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SUPPLY AGREEMENT

Supply Agreement

SUPPLY AGREEMENT | Document Parties: PLANTEX USA, Inc. | NOVO Therapeutics, Inc. You are currently viewing:
This Supply Agreement involves

PLANTEX USA, Inc. | NOVO Therapeutics, Inc.

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Title: SUPPLY AGREEMENT
Governing Law: New Jersey     Date: 2/10/2006
Industry: Biotechnology and Drugs     Sector: Healthcare

SUPPLY AGREEMENT, Parties: plantex usa  inc. , novo therapeutics  inc.
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Exhibit 10.12

 

SUPPLY AGREEMENT

 

THIS SUPPLY AGREEMENT is entered into this 27th day of December, 2001 by and between PLANTEX USA, Inc., a corporation organized under the laws of the State of New Jersey with offices at 482 Hudson Terrace, Englewood Cliffs, New Jersey 07632 (“PLANTEX”) and D-NOVO Therapeutics, Inc., a corporation organized under the laws of the State of Delaware with offices at 28202 Cabot Road, Suite 200, Laguna Niguel, California 92677 (“D-NOVO”).

 

WITNESSETH

 

WHEREAS, the parties wish to enter into an agreement pursuant to which PLANTEX (or an Affiliate thereof) will supply D-NOVO Active Pharmaceutical Ingredients (“API”) (as defined below) for the Finished Product (as defined below) and D-NOVO (including Affiliates thereof and their respective licensees and contract manufacturing vendors, if any) will purchase from PLANTEX requirements as set forth below, of API used in the manufacture of Finished Product.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements set forth in this Agreement, the parties agree as follows:

 

1.

DEFINITIONS

 

The following words and phrases shall, for purposes of this Agreement, have the following meanings (with any term or phrase referred to below, or defined elsewhere in this Agreement, in the singular to include the plural and vice versa as the context requires):

 

Action ” shall mean any suit, action, investigation (governmental or otherwise), claim or proceeding initiated or filed against a party to this Agreement, which results in or could result in a Loss or Losses for which indemnification is required by the other party under Article 13 below.

 

Active Pharmaceutical Ingredients ” or “ API ” shall mean bulk, unformulated Calcitriol.

 

Affiliate ” of any party shall mean any Person that is controlled by, controls, or is under common control with such party. For this purpose, “control” of a corporation or other business entity shall mean the direct or indirect beneficial ownership of more than fifty percent (50%) in the equity of, or the right to appoint more than fifty percent (50%) of the directors or management of such corporation or other business entity.

 

Agreement ” shall mean this Agreement as it is amended from time to time in the manner provided herein.

 

ANDA ” shall mean an Abbreviated New Drug Application filed with the FDA pursuant to its rules and regulations.

 

Approval ” shall mean any and all approvals, licenses, registrations or authorizations of the applicable Regulatory Authority necessary for the marketing of Finished Products in the relevant country in the Territory.

 

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cGMP ” shall mean current good manufacturing practices as set forth in regulations issued by the FDA from time to time.

 

Contract Year ” shall mean the twelve (12) month period measured from a specific date or event.

 

DMFs ” shall mean the drug master files covering the analysis and manufacture of the API, comprising any and all technical information in the possession of PLANTEX (or an Affiliate thereof), including, without limitation, analytical methods, stability and pharmaceutical data, impurities, and manufacturing processes with respect to the API.

 

Effective Date ” shall mean December 27 th , 2001.

 

Finished Products ” or “ Finished Product ” shall mean such pharmaceutical products developed and/or marketed by D-NOVO for the treatment and/or prevention of any cancer containing API as shall receive Approval for marketing by a Regulatory Authority.

 

FDA ” shall mean the United States Food and Drug Administration and all agencies under its direct control or any successor organization.

 

FFDCA ” shall mean the Federal Food, Drug and Cosmetic Act of 1934, as amended from time to time, and the regulations promulgated pursuant thereto, or any successor statute adopted to replace such act.

 

Indemnified Party ” shall mean the party to this Agreement entitled to be indemnified by the Indemnifying Party against a Loss or Losses pursuant to Article 13 below.

 

Initial Launch ” means the date on which D-NOVO (or any of its Affiliates or their respective licensees, if any) makes its first commercial sale in the Territory of any Finished Product to an unaffiliated third party.

 

Loss ” or “ Losses ” shall mean any liability, loss, costs, damage or expense, including reasonable attorneys’ fees and expenses, incurred or suffered by a party to this Agreement, except for consequential damages, for which indemnification is required under Article 13 below.

 

Manufacture ” and “ manufacturing ” and other forms of such word or phrase shall refer to the manufacturing, handling, packaging, storage and/or disposal of the API and the raw materials and components used in connection therewith.

 

NDA ” means a New Drug Application filed with the FDA pursuant to its rules and regulations.

 

Party ” or “ Parties ”, when referring to the parties to this Agreement shall mean and include PLANTEX and D-NOVO, or each of them individually.

 

Person ” shall mean any individual, partnership, association, corporation, trust or legal person or entity.

 

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Regulatory Authority ” shall mean any and all governmental bodies, organizations and agencies whose approval is necessary to develop, manufacture, import, use, and or market Finished Products in the relevant country of the Territory.

 

Territory ” shall mean worldwide.

 

2.

TERM

 

The initial term of this Agreement shall begin on the date hereof and unless terminated in the manner provided in Article 14 hereof, shall expire upon the expiration of the greater of (i) ten (10) Contract Years from the date hereof or (ii) the tenth (10th) anniversary of the date occurring prior to the tenth anniversary of the date hereof that D-NOVO receives marketing approval for Finished Product from the FDA (“Initial Term”). D-NOVO shall notify PLANTEX in writing within five (5) days following receipt of such marketing approval. This Agreement shall be automatically extended upon the same terms and conditions for successive two (2) year periods (“ Renewal Term”) unless either Party shall have provided notice of its intent not to renew this Agreement not less than one (1) year prior to expiration of the Initial Term or any Renewal Term then in effect. For purposes of this Agreement “Term” shall refer collectively to the Initial Term and the Renewal Terms, unless the context otherwise requires.

 

3.

SCOPE OF THE AGREEMENT

 

This Agreement shall apply to purchases during the Term by D-NOVO (and its Affiliates and their respective licensees and contract manufacturing vendors, if any) of API and their respective, direct or indirect, successors and permitted assigns, for the development, commercialization, distribution and sale of Finished Product in the Territory.

 

4.

DEVELOPMENT EFFORT

 

D-NOVO agrees at its sole cost and expense to use its best efforts to obtain Approval to market Finished Product in such countries in the Territory as shall be reasonably determined by D-NOVO, except that D-NOVO shall use its best efforts to obtain FDA Approval to market Finished Product in the United States based upon a NDA or ANDA, as shall be determined by D-NOVO. In connection with such FDA Approval, D-NOVO shall at its sole cost and expense conduct all tests and studies reasonably required to enable D-NOVO to apply for, obtain and maintain FDA Approval for Finished Product. In connection with the development of Finished Product and securing any Approvals, D-NOVO agrees, on behalf of itself, its Affiliates and their respective licensees or contract manufacturing vendors, if any, to use only API obtained from PLANTEX (or its Affiliates) and purchase all of their respective requirements of API from PLANTEX (or its Affiliates). Upon the execution and delivery of this Agreement, PLANTEX shall provide and deliver to D-NOVO without charge two grams (2 gms.) of API. Thereafter, D-NOVO shall be charged [*] dollars ($[*]) per gram for Developmental Orders (as herein defined) of API sold hereunder and such price shall not be subject to increase or decrease. As used herein, “Developmental Orders” means orders placed prior to Approval by a Regulatory

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Authority and not in connection with commercial production in connection with commercial launch following any such Approval. All Developmental Orders shall be minimum noncancellable orders for quantities of not less than [*] grams each. Each of the Developmental Orders shall be deliverable over periods not exceeding twelve (12) months, in partial shipments of not less than [*] grams each.

 

5.

COMMERCIAL SUPPLY

 

5.1 D-NOVO Purchases . D-Novo covenants and agrees for and on behalf of itself, its Affiliates and their respective licensees and contract manufacturing vendors, if any, to purchase all requirements for API used by any of them in connection with the manufacture, sale and distribution of Finished Products within the Territory shall be purchased from PLANTEX (or its Affiliates as shall be designated by PLANTEX). Any license or contract manufacturing agreement for the benefit of D-NOVO or any Affiliate thereof, shall contain a provision requiring such licensee or contract manufacturer to purchase from PLANTEX (or its Affiliate as shall be designated by PLANTEX) all of their respective requirements of API used by such party in connection with the manufacture, sale or distribution of Finished Product upon the terms and conditions applicable to purchases hereunder by D-NOVO. Any such license or contract manufacturing agreement shall make specific reference to this Agreement and state with affirmative language that PLANTEX shall have the rights of a third party beneficiary with respect to such Agreement.

 

5.2 Exception . During any period in which PLANTEX, for any reason, including, but not limited to force majeure as provided for in Section 15, fails to supply, is unable to supply or anticipates that it will not supply, the quantities of API to D-NOVO included within any Firm Purchase Order (as defined below) or any other purchase order confirmed in writing by PLANTEX, D-NOVO shall be free to fill such specific purchase order for API (or any unfilled portion) from an alternative source. This shall be the sole remedy for D-NOVO in the event that PLANTEX advises that it is unable to supply API. PLANTEX shall notify D-NOVO promptly upon becoming aware of any facts or circumstances which causes it to believe that it will be unable to meet shipment obligations hereunder.

 

5.3 Sole Supply . PLANTEX shall not supply API to any other entity during the Term of this Agreement for use in the field of the treatment and/or prevention of any cancer, except for a pharmaceutical product that in the reasonable judgment of D-NOVO shall not be in direct competition with D-NOVO’s approved NDA Product, such determination to be made by D-NOVO promptly following the written request therefore by PLANTEX.

 

5.4 Specifications . PLANTEX shall provide with each shipment of API a certificate of analysis. PLANTEX (or an Affiliate thereof) shall file and maintain a valid DMF for the API with the FDA, which is in full compliance with FDA requirements for DMFs. Provided that D-NOVO is not in material breach of its obligations hereunder, D-NOVO shall have the right to reference PLANTEX’s DMF for API in any drug application seeking Approval for Finished Product from a Regulatory Authority.

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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All API shall be manufactured in accordance with cGMP and shall meet the specifications set forth in Schedule A annexed to this Agreement.

 

5.5 Forecasts and Purchase Orders . Prior to Approval, D-NOVO will provide PLANTEX with a [*] month rolling forecast of its requirements by calendar quarter for API. Such rolling forecasts shall be delivered to PLANTEX by or on the fifteenth (15th) day of each calendar quarter during the Term of this Agreement. Notwithstanding the foregoing, D-NOVO’s initial [*]month forecast following Approval shall be provided to PLANTEX within ninety (90) days prior to the anticipated date determined in good faith by D-NOVO for FDA Approval of Finished Product. The first calendar quarter of each [*] month rolling forecast shall be binding on PLANTEX and D-NOVO and shall constitute a firm purchase order (“Firm Purchase Order”) for the API indicated for such calendar quarter. PLANTEX shall supply D-NOVO with (i) the quantities set forth on each such Firm Purchase Order and (ii) such additional amounts that D-NOVO may order in excess of its forecasted amounts constituting Firm Purchase Orders hereunder, provided that PLANTEX shall have confirmed and accepted such additional orders within thirty (30) days of PLANTEX’s receipt of any such additional purchase order. PLANTEX agrees to use reasonable commercial efforts to meet any such additional orders. In the event that PLANTEX determines for any reason (other than force majeure as provided for in Section 15) to discontinue the manufacture of API, PLANTEX shall have the right to terminate its delivery obligations hereunder upon the giving to D-NOVO not less than [*] months prior written notice. The terms and conditions of this Agreement shall apply to all purchase orders issued hereunder, and, if any terms or conditions contained in such purchase orders shall conflict with any terms and conditions contained herein, the terms of this Agreement shall control. No additional terms or conditions set forth in any such purchase order (other than the quantities and delivery dates set forth therein and conforming to the provisions of this Agreement) shall be binding upon PLANTEX, unless agreed to in writing by PLANTEX. Any additional terms therein contained shall be deemed to be a proposed offer of amended terms that shall be deemed objected to by PLANTEX and of no force and effect, notwithstanding any action or inaction by PLANTEX other than its express written approval of such additional terms.

 

5.6 Capacity . PLANTEX covenants to maintain capacity to manufacture on an annualized basis [*] percent ([*]%) of the forecasted requirements of API set forth in any [*] month forecast submitted by D-NOVO in accordance with this Agreement, provided that the forecasted amount does not exceed the forecasted amount for the preceding year by [*] percent ([*]%) or more. Additionally, following FDA Approval of Finished Product and continuing for the Term, PLANTEX shall maintain in inventory a [*] month supply of API, based upon D-NOVO’s then current forecasted amount. In order to further secure a supply of API hereunder, PLANTEX shall develop a production contingency plan (which plan shall be presented to D-NOVO for its approval, which approval shall not be unreasonably withheld) designed to relocate the API site listed in the DMF for API or utilize an additional site in the event that PLANTEX makes a good faith determination that it is necessary to relocate such site or to utilize an additional site in order to meet D-NOVO’s requirements of API.

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Such plan shall contemplate completion of relocation and securing necessary regulatory approvals within [*] of the determination by PLANTEX that such relocation was required. In the event that relocation has not been completed within such [*] period, D-NOVO’s sole remedy shall be to terminate this Agreement.

 

5.7 Recordkeepinq . D-NOVO shall keep and maintain or cause to be maintained books and records, pertaining to the use of API by D-NOVO and its Affiliates and their respective licensees or contract manufacturing vendors, if any, in the manufacture sale or distribution of Finished Products within the Territory, sufficient to enable PLANTEX to verify and confirm compliance by D-NOVO with the terms and conditions of this Agreement, including, without limitation, the purchase of all requirements obligations provided for in this Agreement. Such books and records shall be maintained in accordance with U.S. generally accepted accounting principles consistently applied. D-NOVO shall permit an independent accounting firm selected by PLANTEX and acceptable to D-NOVO, at reasonable times and upon reasonable notice, to have access during normal business hours to the books and records of D-NOVO (and its Affiliates) as may be necessary to verify and confirm compliance with the terms of this Section 5.7. The costs of any such examination shall be borne by PLANTEX unless it shall be determined that the quotient, q/r, expressed as a percentage, is less than ninety-seven percent (97%), when (q) equals the aggregate quantities expressed in kilograms of API purchased from PLANTEX (or its Affiliates) by D-NOVO and its Affiliates, and their respective licensees or contract manufacturing vendors if any, for use in the manufacture, sale or distribution of Finished Product in the Territory, and (r) equals the aggregate quantities expressed in kilograms of API purchased from all sources by D-NOVO and its Affiliates and their respective licensees and contract manufacturing vendors, if any, for use in the manufacture, sale or distribution of Finished Product in the Territory, in which event D-NOVO shall reimburse PLANTEX all reasonable costs and expenses of such examination. PLANTEX shall keep and maintain or cause to be maintained books and records pertaining to the manufacture of API for at least five (5) years or as required by law, whichever is longer.

 

6.

PRICE; PAYMENTS; DELIVERY

 

6.1 Price .

 

6.1.1 The price payable to PLANTEX hereunder for API shall be [*] dollars ($[*]) per gram. During development of the Finished Product, PLANTEX agrees not to increase the price of API with respect to developmental quantities. At such time as D-NOVO receives FDA approval to market Finished Product, PLANTEX shall have the right to reevaluate the contract price for commercial quantities of API based upon its documented investment in the development of this product and D-NOVO and PLANTEX agrees to negotiate in good faith an increase in the price per gram based thereon. Notwithstanding the foregoing, provided that D-

 

[*] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

6


NOVO purchases not less than [*] grams of API in the first Contract Year following Approval by a Regulatory Authority and in each Contract Year after the second an


 
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