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EXHIBIT 10.21
Note: Certain portions of the exhibit
have been omitted based upon a
request for confidential treatment.
The omitted portions have been
separately filed with the Commission.
SUPPLY AGREEMENT
This Agreement is made this 27th day of April, 1993 by and between Iomed,
Inc. ("Iomed"), 0000 Xxxx 0000 Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 and Xxxxxx
Laboratories, Xxx Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx 00000-0000.
Iomed desires to purchase its requirements of Lidocaine 2% and Epinephrine
1:100,000 injection, USP, from Abbott and Abbott agrees to sell to Iomed its
requirements of such Product. Iomed will market the Product for use in
conjunction with Iomed's proposed medical device for iontophoretic
administration.
Therefore, in consideration of the premises and the mutual promises and
agreements contained herein, Iomed and Abbott agree as follows:
1. Product.
For purposes of this Agreement, the term "Product" shall mean Lidocaine 2%
and Epinephrine 1:100,000 injection, USP, packaged in 30ml SVP fliptop
containers and labeled for iontophoretic administration with Iomed medical
devices.
2. Custom Product Development.
Promptly after the execution of this Agreement, the parties shall
undertake a project to develop a custom packaged product suitable for marketing
with Iomed's iontophoretic medical administration device and suitable for
manufacturing on Xxxxxx'x standard packaging equipment for
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fliptop containers. The parties shall use their reasonable best efforts to
complete successfully the product development and to obtain U.S. Food and Drug
Administration ("FDA") marketing approval of the Product. It is understood and
agreed that there is no guarantee that the product development project will be
successful and no representation or warranty of any kind is given by either
party that a marketable Product will result from the project.
3. Xxxxxx'x Development Responsibilities.
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The objective of the product development project shall be for Abbott to
assist Iomed as required in obtaining regulatory approval for sale of the
Product. The Product will then be manufactured by Abbott and sold to Iomed for
resale by Iomed. Abbott shall have the following development responsibilities:
a. Manufacture at Xxxxxx'x Xxxxx Mount plant 1,000 units of Product for
clinical and stability supplies for testing to be carried out by Iomed to
support FDA filings for device and drug marketing approvals.
b. Provide authorization to reference Xxxxxx'x Abbreviated New Drug
Application, as appropriate for Pre-market Approval submissions by Iomed.
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c. Assist Iomed, as reasonably requested, in preparation of regulatory
submissions for the Product and provide such other assistance as Iomed may
reasonably require.
d. Submit Investigational New Drug application and Supplemental New Drug
Application as Xxxxxx'x responsibilities in the development process
require.
e. Using Xxxxxx'x graphics studio, typeset final label and carton copy from
artwork provided by Iomed and generate proofs and negatives suitable for
printing.
4. Iomed's Regulatory Submissions.
Iomed agrees that Abbott shall have the right to review Iomed's proposed
Pre-market Approval submissions. Abbott shall complete its review within a
reasonable period of time after receipt from Iomed of the proposed regulatory
submission. Iomed further agrees that Abbott shall participate with Iomed in
responding to questions from the FDA regarding regulatory submissions
applicable to the Product. Iomed shall respond to questions relating to its
device. Abbott shall respond to questions relating to the product.
5. Payment for Xxxxxx'x Development Efforts.
5.1 Development Fee. To reimburse Abbott for its participation in the
product development project, IOMED shall pay to Abbott a
non-refundable development fee of $65,000 within ten (10) days after
execution of this Agreement.
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****.
5.2 Changes in Project Scope. If unanticipated changes occur in the
product development project or Product Specifications, or if technical
difficulties result in the requirement for Abbott to perform either additional
or repeat work, Xxxxxx'x costs for such work shall be paid by Iomed, subject to
Iomed's prior approval.
6. Manufacture and Supply of Product.
6.1 Purchase and Sale of Product - Iomed Requirements. During the terms
of this Agreement and pursuant to the terms and conditions hereof, Abbott
agrees to manufacture, sell and deliver Product exclusively to Iomed and Iomed
agrees to purchase its total requirements of Product from Abbott.
6.2 Orders and Delivery Variances. Unless otherwise agreed to by the
parties, the order quantity shall be a whole number in multiples of ****. The
maximum order quantity shall be two hundred thousand (200,000) units per month.
The maximum and minimum order sizes may be adjusted from time to time by written
agreement of the parties. Delivery of Product by Abbott may vary from quantities
ordered by Iomed plus or minus ****
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****. Such deliveries shall be in full compliance with this Agreement.
6.3 Manufacture of Product.
6.3.1 Abbott shall manufacture Product in accordance with the Product
Specifications for ****, as modified from time to time by Abbott. Product
shall be labeled by Abbott in accordance with FDA approved lable copy and as
mutually approved by the parties.
6.3.2 Xxxxxx'x quality control procedures and in-plant quality
control checks on the production of Product for Iomed shall be applied in the
same manner as those procedures and checks are applied to products manufactured
for sale directly by Abbott as Abbott products. Abbott shall provide a
certificate of analysis with each shipment of Product.
6.3.3 Iomed shall have a period of ****days from the date of receipt
to inspect and reject any shipment of Product on the grounds that it does not
conform with the Product Specifications. Iomed shall have the right to return
any Product which does not conform. All of part of any shipment may be held for
Xxxxxx'x disposition if found to be not in conformance with the Product
Specifications, provided Abbott confirms such nonconformance through generally
accepted quality control procedures. Abbott shall have **** days from the
effective date of rejection (written notice) by Iomed in which to confirm
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nonconformance. Failure to confirm within such **** day period shall constitute
agreement with Iomed's rejection of Product. After Abbott confirms
nonconformance, Abbott shall have a period of **** days to replace such
nonconforming Product. Replacement of Product with conforming Product shall be
Iomed's sole and exclusive remedy for any nonconforming Product delivered
hereunder. Any Product not rejected by Iomed pursuant to this subparagraph 6.3.3
shall be deemed accepted for all purposes and all claims with respect to such
Product waived by Iomed. Shipment of rejected Product to Xxxxxx and shipment of
replacement Product to Iomed shall be at Xxxxxx'x expense and by the carrier
designated by Xxxxxx.
6.3.4 Xxxxxx hereby approves placement of a descriptive private label
with Iomed's tradename and/or Iomed's trademark on the Product. Any material
changes to the descriptive label must be approved by Abbott prior to
implementing such changes.
6.5 Price and Payment.
6.5.1 Product shall be delivered by Abbott at prices set forth in Exhibit
A of this Agreement. The prices are based on standard Abbott packaging
components with custom Iomed print copy as approved by Abbott for
manufacturability.
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6.5.2 Abbott shall invoice Iomed upon delivery of Product. ****.
6.5.3 Any federal, state, county or municipal sales or use tax,
excise or similar charge, or any other tax assessment (other than that assessed
against income), license or other charge lawfully assessed and normally charged
on the manufacture, sale or transportation of Product sold pursuant to this
Agreement shall be paid by Iomed.
6.6 Delivery. Product shall be delivered to Iomed F.O.B. Xxxxxx'x Rocky
Mount, North Carolina plant and title shall pass to Iomed at such point.
6.7 Orders and Forecasts.
6.7.1 Abbott and Iomed shall cooperate fully in estimating and
scheduling production for the first firm order to be placed by Iomed. The first
firm order shall cover a period of three (3) consecutive calendar months.
Thereafter, firm orders shall be placed monthly and shall cover the next
succeeding third month. At the time Iomed places its firm monthly orders, Iomed
shall provide to Abbott Iomed's estimate of its monthly requirements for the
next succeeding nine (9) calendar month
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period. It is the intent that at all times Abbott shall have in hand firm
monthly orders covering the current three (3) calendar month period and Iomed's
estimates of its monthly requirements for the next succeeding nine (9) calendar
month period.
6.7.2 Each Iomed purchase order for Product shall be governed by the
terms of this Agreement and none of the provisions of such purchase order shall
be applicable except those specifying quantity ordered, delivery dates, shipping
instructions and invoice information.
6.8 Guarantees and Warranties.
6.8.1 Abbott guarantees to Iomed that Product delivered to Iomed
pursuant to this Agreement shall, at the time of delivery, not be adulterated
or misbranded within the meaning of the Federal Food, Drug, and Cosmetic Act,
as amended, or within the meaning of any applicable state or municipal law in
which the definitions of adulteration and misbranding are substantially the
same as those contained in the Federal Food, Drug, and Cosmetic Act, as such
Act and such laws are constituted and effective at the time of delivery and
will not be an article which may not under the provisions of Sections 404 and
505 of such Act be introduced into interstate commerce.
6.8.2 Abbott warrants that Product delivered to Iomed pursuant to
this Agreement shall conform with the Product Specifications
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and shall have been manufactured pursuant to current Good Manufacturing
Practice, as prescribed by regulations promulgated by the FDA. ABBOTT MAKES NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCT. ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY
DISCLAIMED BY XXXXXX. Xxxxxx shall not be liable to Iomed for indirect,
incidental or consequential damages resulting from any breach of this Agreement.
6.8.3 Abbott shall indemnify and hold Iomed harmless from and against
all liability, loss or damage (including reasonable attorney fee(s) which Iomed
may incur, or be required to pay by reason of any injury, illness and/or death
that resulted from negligent or wrongful acts or omissions of Abbott. Iomed
shall indemnify and hold Abbott harmless from and against any and all
liability, loss or damage (including reasonable attorney fees) which Abbott may
incur, or be required to pay by reason of any injury, illness and/or death that
resulted from negligent or wrongful acts or omissions of Iomed, or the safety
or efficacy of the Product when used with Iomed's iontophoretic administration
devices.
The obligations of the indemnifying party under this paragraph are
conditioned upon the prompt written notification to the indemnifying party of
any of the aforementioned suits or claims upon the full cooperation of the
indemnified party in the investigation, defense and proposed settlement of such
suits or claims and the indemnifying party being given the opportunity to
defend. This provision for indemnification shall be void and there shall be no
liability against a party as to any suit or claim for which settlement or
compromise is made without prior written consent of the indemnifying party.
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****
7. Term and Termination.
7.1 This Agreement shall commence on the date first above written and the
initial term shall expire on December 31, 1998. Thereafter, the term shall
continue automatically until terminated. This agreement may be terminated on
December 31, 1998 or at anytime thereafter upon not less than one hundred
eighty (180) day's prior written notice from one party to the other. Iomed may
terminate this Agreement at anytime by giving Abbott one hundred eighty (180)
days prior written notice if Iomed discontinues sale of its iontophoretic
administration devices.
7.2 Either party may terminate this Agreement by giving to the other
sixty (60) days prior written notice as follows:
a. Upon the bankruptcy or the insolvency of the other party; or
b. Upon the breach of any warranty or any other material provision of
this Agreement by the other party if the breach is
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not cured within sixty (60) days after written notice thereof to the
party in default.
7.3 Termination, expiration, cancellation or abandonment of this Agreement
through any means and for any reason shall not relieve the parties of any
obligation accruing prior thereto and shall be without prejudice to the rights
and remedies of either party with respect to any antecedent breach of any of
the provisions of this Agreement.
8. Force Majeure.
Any delay in the performance of any of the duties or obligations of either
party hereto (except the payment of money) shall not be considered a breach of
this Agreement and the time required for performance shall be extended for a
period equal to the period of such delay, provided that such delay has been
caused by or is the result of any acts of God; acts of the public enemy;
insurrections; riots; embargoes; labor disputes, including strikes, lockouts,
job actions, or boycotts; fires; explosions; floods; shortages of material or
energy; or other unforeseeable causes beyond the control and without the fault
or negligence of the party so affected. The party so affected shall give prompt
notice to the other party of such cause, and shall take whatever reasonable
steps are necessary to relieve the effect of such cause as rapidly as possible.
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9. Confidential Information.
9.1 It is recognized by the parties that during the term of this
Agreement the parties may exchange Confidential Information. Each party agrees
not to disclose to any third person Confidential Information received from the
other party and not to use Confidential Information received from the other
party, except as authorized by the disclosing party. For purposes of this
Agreement, Confidential Information shall include all information disclosed
hereunder in writing and identified as being confidential or if disclosed
orally is reduced to writing within thirty (30) days of oral disclosure and
identified as being confidential, except any portion thereof which:
a. is known to the recipient before receipt thereof under this Agreement;
b. is disclosed in good faith to the recipient after acceptance of this
Agreement by a third person lawfully in possession of such information and
not under an obligation of nondisclosure;
c. is or becomes part of the public domain through no fault of the recipient;
d. is developed by the recipient independently of and without reference to
Confidential Information; or
e. is required by law to be disclosed.
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Notwithstanding the above, nothing contained in this Agreement shall
preclude Iomed or Abbott from utilizing Confidential Information as may be
necessary in prosecuting patent rights of the parties, or obtaining
governmental marketing approvals, or in manufacturing Product pursuant to this
Agreement. The obligations of the parties relating to Confidential Information
shall expire three (3) years after the termination of this Agreement.
10. Independent Contractors.
The relationship of Iomed to Abbott established by this Agreement is that
of an independent contractor. Nothing contained in this Agreement shall be
construed to constitute Iomed as a partner, agent or joint venturer with Abbott
or as a participant in a joint or common undertaking with Abbott.
11. Notices.
All notices hereunder shall be delivered personally or by registered or
certified mail, postage prepaid, to the following addresses of the respective
parties:
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Xxxxxx Laboratories
Xxx Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
With copy to: President
Hospital Products Division
Iomed, Inc.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: President
With copy to: Vice President Operations
Notices shall be effective upon receipt if personally delivered, or on
the third business day following the date of mailing. A party may change its
address listed above by notice to the other party.
12. Applicable Law.
This Agreement shall be construed, interpreted and governed by the
laws of the State of Illinois, except for choice of law rules.
13. Assignment.
Neither party shall assign this Agreement or any part thereof without
the prior written consent of the other party; provided, however, Abbott may
assign this Agreement to a wholly-owned subsidiary and either party, without
such consent, may assign or sell the same in connection with the transfer or
sale of substantially its entire business
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to which this Agreement pertains or in the event of its merger or consolidation
with another company. Any permitted assignee shall assume all obligations of
its assignor under this Agreement. No assignment shall relieve any party of
responsibility for the performance of any accrued obligation which such party
then has hereunder.
14. Entire Agreement
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof and supersedes all written or oral prior
agreements or understandings with respect thereto. No course of dealing or
usage of trade shall be used to modify the terms hereof.
15. Severability.
This Agreement is subject to the restrictions, limitations, terms and
conditions of all applicable laws, governmental regulations, approvals and
clearances. If any term or provision of this Agreement shall for any reason be
held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other term or provision
hereof, and this Agreement shall be interpreted and construed as if such term
or provision, to the extent the same shall have been held to be invalid,
illegal or unenforceable, had never been contained herein.
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16. Waiver -- Modification of Agreement.
No waiver or modification of any of the terms of this Agreement shall be
valid unless in writing and signed by authorized representatives of both
parties. Failure by either party to enforce any rights under this Agreement
shall not be construed as a waiver of such rights nor shall a waiver by either
party in one or more instances be construed as constituting a continuing waiver
or as a waiver in other instances.
17. Product Recalls.
If (a) any government authority issues a request, directive or order that
the Product be recalled, or (b) a court of competent jurisdiction orders such a
recall, or (c) Iomed or Abbott reasonably determine after consultation with the
other that the Product should be recalled, the parties shall take all
appropriate corrective actions. If such recall results from any cause or event
for which Abbott is responsible, Abbott shall be responsible for the expenses
of recall. In all other cases, Iomed shall be responsible for the expenses of
recall. For the purposes of this Agreement, the expenses of recall shall
include, without limitation, the reasonable expenses of notification and
destruction or return of the recalled Product and the costs for the Product
recalled which shall be equal to the purchase price paid for such Product.
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The parties intending to be bound by the terms and conditions hereof have
caused this Agreement to be signed by their fully authorized representatives on
the date first above written.
XXXXXX LABORATORIES IOMED, INC.
By: By:
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Title: President Hospital Products Title: President
Division
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Exhibit A
Price
Price per unit for the 30 mL fliptop container of Product is as follows:
Quantity Per Contract Year Price/Unit
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0 - 300,000 Units $****
300,001 Units and above $****
1) Prices are based on Product purchased by delivery during each Contract
Year. A Contract Year shall be the twelve (12) month period beginning on the
first day of the month following the month in which Iomed receives final FDA
approval to market the Product.
2) Beginning January 1, 1994, and on each succeeding January 1 during the
term hereof, prices may be increased by Abbott. ****
