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SUPPLY AGREEMENT

Supply Agreement

SUPPLY AGREEMENT | Document Parties: AHP Manufacturing BV | American Home Products Corporation | Martek Biosciences Corporation You are currently viewing:
This Supply Agreement involves

AHP Manufacturing BV | American Home Products Corporation | Martek Biosciences Corporation

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Title: SUPPLY AGREEMENT
Date: 12/29/2008
Industry: Biotechnology and Drugs     Sector: Healthcare

SUPPLY AGREEMENT, Parties: ahp manufacturing bv , american home products corporation , martek biosciences corporation
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Exhibit 10.07 SUPPLY AGREEMENT THIS SUPPLY AGREEMENT (the " Agreement ") is executed on October 31, 2008 (the " Execution Date ") but made effective as of November 21, 2007 (the " Effective Date "), by and between AHP Manufacturing B.V. trading as Wyeth Nutritionals Ireland, a corporation organized under the laws of the Netherlands with offices located at Spicalaan 31, 2132 JG Hoofddorp, The Netherlands (" PURCHASER "), and Martek Biosciences Corporation, a corporation organized under the laws of Delaware with offices located at 6480 Dobbin Road, Columbia, Maryland 21045 (" SELLER "). PURCHASER and SELLER are sometimes referred to herein individually a " Party " or collectively as the " Parties ". WITNESSETH THAT : WHEREAS, Wyeth (formerly known as American Home Products Corporation), the indirect parent corporation of PURCHASER, and SELLER entered into a License Agreement, dated as of January 28, 1993 and amended January 10, 2005, for the United States (" U.S. Agreement "), and a License Agreement, dated as of January 28, 1993 and amended January 10, 2005, for countries outside of the United States (" International Agreement " and, collectively with the U.S. Agreement, the " License Agreements "), wherein SELLER had granted to Wyeth in the Territory (as defined therein) certain rights under Licensed Patents (as defined therein) and Technology (as defined therein) (A) to produce the Wyeth Product, (B) to use and make Martek Products (as defined therein) for purposes of making and having made the Wyeth Product and (C) to use, market and distribute the Wyeth Product, in each case as further specified in the License Agreements; WHEREAS, PURCHASER wishes to purchase DHA and ARA from SELLER in accordance with the terms of this Agreement; WHEREAS, SELLER is willing to supply such DHA and ARA in the form of Martek Products for use by PURCHASER to manufacture, use, market and distribute Wyeth Products and Growing Up Milk Products in accordance with the terms of the License Agreements and this Agreement; and WHEREAS, Wyeth will formally assign the License Agreements to PURCHASER, a wholly owned subsidiary of Wyeth, contemporaneously with the execution of this Agreement, such assignment to be effective for all purposes as of November 21, 2007.

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

 




 

NOW, THEREFORE, in consideration of the foregoing premises and of the mutual undertakings herein contained, the Parties agree as follows: ARTICLE 1. DEFINITIONS Unless defined herein, all capitalized terms will have the meanings stated in the License Agreements. References herein to SELLER and PURCHASER shall also be deemed as references to Licensor and Licensee, respectively, for purposes of the License Agreements. 1.1 "Acceptable Product" shall mean DHA Martek Product or ARA Martek Product delivered under this Agreement that satisfies the warranty set forth in Section 5.1 at the time of delivery to PURCHASER pursuant to Section 2.4. 1.2 "Agreement" shall have the meaning set forth in the Preamble. 1.3 * 1.4 "Applicable Law" shall mean all applicable laws, regulations and other requirements which may be in effect from time to time, of all national governmental authorities, and of all states, municipalities and other political subdivisions and agencies thereof, including, without limiting the generality of the foregoing, the Federal Food, Drug, and Cosmetic Act, the regulations and other requirements of the United States Food and Drug Administration, similar state laws and regulations or similar laws and other requirements in the Territory, including any and all amendments, as may be applicable in any jurisdiction in the Territory in which relevant Martek Products, Growing Up Milk Products or Wyeth Products, as applicable, are Manufactured, distributed or sold. 1.5 "ARA" shall mean arachidonic acid. 1.6 "ARA Martek Product" shall mean Martek Product that is ARA. 1.7 * 1.8 "Claim" shall have the meaning set forth in Section 9.3. 1.9 * 1.10 * 1.11 "DHA" shall mean docosahexaenoic acid. 1.12 "DHA Martek Product" shall mean Martek Product that is DHA. 1.13 "Effective Date" shall have the meaning set forth in the Preamble. 1.14 "Execution Date" shall have the meaning set forth in the Preamble. 1.15 "Growing Up Milk Product" shall mean a nutritionally enhanced milk and/or soy-milk based product marketed to and intended for use by children from twelve (12) through thirty-six (36) months of age, and by older children in markets where such products are or will be marketed by PURCHASER and/or its Affiliates to be consumed by such older children. 1.16 "Indemnitee" shall have the meaning set forth in Section 9.3. 1.17 "Indemnitor" shall have the meaning set forth in Section 9.3. 1.18 "International Agreement" shall have the meaning set forth in the Preamble.

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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1.19 "Initial Forecast" shall have the meaning set forth in Section 2.2.1. 1.20 "License Agreements" shall have the meaning set forth in the Preamble. 1.21 "Manufacture" and "Manufacturing" shall mean the manufacturing, production, processing, formulating, packaging, labeling, holding and/or quality control testing of a product, material or compound. 1.22 "Martek Product Specifications" shall mean the specifications for ARA Martek Product and DHA Martek Product, as set forth in Exhibit C attached hereto, as such Exhibit may be modified by written agreement of the Parties. 1.23 * 1.24 "Party" and "Parties" shall have the meaning set forth in the Preamble. 1.25 * 1.26 "Person" shall mean any individual, firm, corporation, partnership, limited liability company, trust, business trust, joint venture company, governmental authority, association or other entity. 1.27 "Purchase Order" shall have the meaning set forth in Section 2.2.2. 1.28 "Purchase Price" shall have the meaning set forth in Section 2.3.1. 1.29 "PURCHASER" shall have the meaning set forth in the Preamble. 1.30 *. 1.31 "Regulatory Authority" shall mean any national, supra-national, regional, state, or local regulatory agency, department, bureau, commission, council, or other governmental entity regulating or otherwise exercising authority in the Territory with respect to the DHA Martek Product, ARA Martek Product, the Wyeth Products and/or the Growing Up Milk Products. 1.32 * 1.33 * 1.34 * 1.35 "Rolling Forecast" shall have the meaning set forth in Section 2.2.1. 1.36 "SELLER" shall have the meaning set forth in the Preamble. 1.37 "Shortfall Notice" shall have the meaning set forth in Section 2.2.6. 1.38 *

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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1.39 * 1.40 "Term" shall have the meaning set forth in Section 6.1. 1.41 "Territory" shall, subject to Section 6.2.2, mean the world. 1.42 "Testing Laboratory" shall have the meaning set forth in Section 4.2.1. 1.43 "U.S. Agreement" shall have the meaning set forth in the Preamble. 1.44 "Wyeth" shall have the meaning set forth in the Preamble. 1.45 "Wyeth Product" shall mean AHPC Formulaid Product (as defined in the License Agreements), but shall specifically exclude *. ARTICLE 2. PURCHASE AND SUPPLY OF COMPOUNDS 2.1 Purchase of DHA and ARA . During the Term of this Agreement, and subject to its terms, (a) SELLER shall Manufacture and supply to PURCHASER all quantities of DHA and ARA ordered by PURCHASER in accordance with the terms hereof and (b) PURCHASER shall purchase from SELLER PURCHASER’s and its Affiliates’ total requirements of DHA and ARA for use in the Manufacture, distribution and sale of Infant Formula Products throughout the Territory; provided that (i) *, and (ii) such total requirements shall not include PURCHASER’s or its Affiliates’ requirements of DHA and/or ARA for research or evaluation purposes (and not for sale). For the avoidance of doubt, (a) while PURCHASER may purchase DHA Martek Product and ARA Martek Product under this Agreement for use in the Manufacture, distribution and/or sale of its Growing Up Milk Products, nothing in this Agreement shall operate or be construed to limit PURCHASER’s or its Affiliates’ right to purchase from a Third Party any quantity of DHA or ARA for the purposes of the Manufacture, distribution and/or sale of its Growing Up Milk Products and (b) *. All quantities of Martek Product supplied by SELLER under this Agreement shall be used, either by PURCHASER, its Affiliates, or by contractors of PURCHASER or its Affiliates on PURCHASER’s or such Affiliate’s behalf, solely for purposes of Manufacture, distribution and/or sale of Wyeth Products or Growing Up Milk Products, or for research purposes related to Infant Formula Products or Growing Up Milk Products. 2.2 Forecasts and Orders . 2.2.1 As of the Execution Date of this Agreement, a provisional non-binding forecast of the monthly quantity of DHA Martek Product and ARA Martek Product which PURCHASER will order on behalf of itself and its Affiliates for delivery hereunder for the period from the Execution Date until March 31, 2009 shall be established using the average monthly quantities of DHA Martek Product and ARA Martek Product ordered by PURCHASER in the six (6) calendar months prior to the Execution Date (the " Initial Forecast ). Thereafter, not later than December 1 and June 1 of each calendar year during the Term of this Agreement, PURCHASER shall submit to SELLER a non-binding forecast of the quantity and expected delivery dates of DHA Martek Product and ARA Martek Product that PURCHASER estimates in good faith that it will order on behalf of itself and its Affiliates for delivery under this Agreement during the four (4) quarters commencing on the immediately succeeding January 1 and July 1, respectively (each such forecast, a " Rolling Forecast "). The Initial Forecast and the Rolling Forecasts will be good-faith, best estimates of requirements and shall not be considered a firm commitment.

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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2.2.2 Except for Purchase Orders submitted by PURCHASER but not fulfilled as of the Execution Date, purchase orders (each a " Purchase Order ") for each order of DHA Martek Product and ARA Martek Product shall be placed by PURCHASER to SELLER at least sixty (60) days but no more than one hundred twenty (120) days prior to the required date of delivery of such Martek Product to PURCHASER. Each Purchase Order shall specify the shipping destination (which shall be in the Territory), and required delivery date, for the Martek Product ordered therein. SELLER shall accept each Purchase Order from PURCHASER placed in accordance with this Section 2.2.2 for up to * of the relevant volumes specified for the applicable month in the Initial Forecast or, if a Rolling Forecast has been provided, the most recent Rolling Forecast provided by PURCHASER as of the time of the placement of such Purchase Order. SELLER shall acknowledge all Purchase Orders submitted in accordance with Section 2.2.2 within ten (10) business days of SELLER’s receipt of such Purchase Orders. Purchase Orders submitted by PURCHASER in accordance with this Agreement which have been acknowledged in writing by SELLER shall be considered as firm and binding orders (subject to the terms of this Agreement) and shall only be canceled or amended by mutual written agreement of the Parties. For the avoidance of doubt, SELLER shall not reject any Purchase Order submitted by PURCHASER in accordance with Section 2.2.2. 2.2.3 SELLER shall fulfill by the required delivery date set forth therein each Purchase Order acknowledged pursuant to Section 2.2.2; provided that SELLER shall have no liability for any breach of this Section 2.2.3 unless and until SELLER fails to deliver in accordance with Section 2.4 *as relevant, ordered by PURCHASER for delivery *for a particular shipping destination (which aggregate amount for such location for * by * In the event that SELLER fails to fulfill any Purchase Order acknowledged pursuant to Section 2.2.2 by the required delivery date, PURCHASER shall provide notice thereof to SELLER and shall use reasonable efforts to do so within *; provided, however, that any failure by PURCHASER to provide such notice within such time period shall not be a breach of this Agreement or operate or be deemed to limit any remedies available to PURCHASER hereunder. 2.2.4 Purchase Orders for amounts in addition to * of the relevant volumes specified for the applicable calendar month in the Initial Forecast or the most recent Rolling Forecast, as applicable, shall be accepted and fulfilled by SELLER as is commercially reasonable. 2.2.5 In the event of any conflict between the provisions of this Agreement and any Purchase Order, acknowledgement or invoice, or any additional terms included in any Purchase Order, acknowledgement or invoice, the provisions of this Agreement shall control. All preprinted terms and conditions contained on any Purchase Order, acknowledgement or invoice, or similar document, shall be disregarded.

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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2.2.6 In the event that SELLER, at any time during the Term, shall have reason to believe that it will be unable to supply PURCHASER with its requirements of Martek Products, SELLER shall use reasonable efforts to communicate with PURCHASER in a timely manner so as to help PURCHASER ensure there is no interruption in supply to PURCHASER, and the Parties shall thereafter discuss how such shortfall will be resolved. SELLER shall * provide a written notice to PURCHASER (a " Shortfall Notice ") if (a) SELLER will be unable to supply PURCHASER with the amount ordered by PURCHASER in a Purchase Order by the required delivery date set forth therein (whether by reason of a force majeure event or otherwise), or (b) SELLER concludes that it will be unable to supply PURCHASER *set forth in the Initial Forecast or a Rolling Forecast, as relevant, for any period for which Purchase Orders may still be placed (i.e., more than sixty (60) days ahead) (whether by reason of a force majeure event or otherwise). Any such Shortfall Notice shall expressly identify itself as a Shortfall Notice and shall include*. Any notices pursuant to this Section 2.2.6 shall be for information purposes only and shall not, by themselves, be used to claim a breach of this Agreement. 2.3 Payment Terms . 2.3.1 Price . During the Term of this Agreement, PURCHASER shall pay for the Martek Products delivered by SELLER in accordance with the terms of this Agreement at the prices determined in accordance with the terms set forth in Exhibit A attached hereto (the " Purchase Price ") and in accordance with this Section 2.3. 2.3.2 Invoice Amount . The amount initially invoiced for Martek Products purchased hereunder during a given calendar year shall be set (a) for * based on forecasted sales volumes for *, and (b) for each calendar year thereafter based on the Rolling Forecast for such calendar year submitted to SELLER by PURCHASER on or prior to the December 1 immediately preceding such calendar year as provided in Section 2.3.1. 2.3.3 Adjustments . If the forecasted sales volume of Martek Products used to determine the invoice price as provided in Section 2.3.2 is greater than the quantity of Martek Products actually purchased during the relevant calendar year, and, as a result, the Purchase Price payable by PURCHASER to SELLER for Martek Products as specified in Exhibit A is higher than the invoiced amounts actually paid pursuant to Section 2.3.2, then SELLER shall invoice PURCHASER within thirty (30) days after the end of such calendar year for an amount equal to the difference, if any, between the total Purchase Price payable as specified in Exhibit A and the total invoiced amounts actually paid pursuant to Section 2.3.2, and PURCHASER shall pay such amounts within *. Alternatively, if the quantity of Martek Products actually purchased by PURCHASER from SELLER pursuant to this Agreement during the relevant calendar year exceeds the forecasted sales volume of Martek Products used to determine the invoice price as provided in Section 2.3.2 for such calendar year, and, as a result, the Purchase Price payable by PURCHASER to SELLER for Martek Products as specified in Exhibit A is lower than the invoiced amounts actually paid pursuant to Section 2.3.2, then SELLER shall credit against future purchases of Martek Product hereunder an amount equal to the difference, if any, between the total invoiced amounts actually paid pursuant to Section 2.3.2 and the total Purchase Price payable as specified in Exhibit A . Any credit due to PURCHASER shall be made available within * after the end of the calendar year for which it accrues. To the extent any such credit exceeds the amount due to SELLER from PURCHASER at the time of termination or expiration of this Agreement, then SELLER shall pay to PURCHASER such excess amount within * after such expiration or termination. In the event this Agreement expires or terminates prior to the end of a calendar year, for such partial year, the credits or reimbursements required to effectuate the foregoing shall be calculated on a pro rata basis (i.e., calculated as if the average monthly volume of purchases under this Agreement for the partial year had been made for each month for the full calendar year, with the credit or reimbursement reduced proportionally to account for the number of months out of the full calendar year this Agreement was actually in effect) and determined and credited or paid within * of the date following such termination.

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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2.3.4 No Royalty . The Parties acknowledge and agree that no royalties, including any royalties under the License Agreements, shall be due to SELLER in connection with the supply of Martek Products hereunder or the use and subsequent sale of products containing such Martek Products by PURCHASER or its Affiliates in accordance with the terms hereof. The Purchase Prices set forth herein for sales of Martek Products by SELLER to PURCHASER constitute the only consideration associated with the use and sale of such Martek Products. 2.3.5 Taxes . The Purchase Price for the Martek Products delivered hereunder is exclusive of any and all national, state or local sales, use, value added or similar taxes, customs duties or governmental tariffs or fees which SELLER may be required to pay or collect upon the delivery of such Martek Products. Should any tax or levy be made, PURCHASER agrees to pay such tax or levy and indemnify SELLER for any claim for such tax or levy demanded. In no event, however, shall PURCHASER be responsible for any taxes based on SELLER’s income or similar measures. 2.3.6 Terms . PURCHASER shall pay all correct invoices for amounts due in accordance with Section 2.3.2 above within * from the date of SELLER’s invoice, which invoice shall be dated as of the date of delivery of the invoiced Martek Products delivered in accordance with Section 2.4 below. For any invoices containing errors, payment shall not be due with respect to the incorrect portion(s) of the invoice until the invoicing errors are corrected and a new invoice, with respect to the incorrect portions on the original invoice, is received by PURCHASER. All amounts payable hereunder by either Party shall be in U.S. dollars. 2.3.7 Sample Requests . SELLER may request, up to two (2) times per year, and PURCHASER shall provide following each such request, samples for up to a total of six (6) SKUs of Wyeth Products or Growing Up Milk Products (in the aggregate) from PURCHASER’s markets. Reasonable expenses of filling any such requests shall be borne by SELLER. SELLER shall not resell or distribute such Wyeth Products or Growing Up Milk Products, and shall use them only for purposes of display at SELLER’s premises or at trade shows, or for evaluation. 2.4 Delivery Terms . DHA Martek Product and ARA Martek Product ordered in accordance with this Agreement shall be delivered Ex Works (EXW) (INCOTERMS 2000) SELLER’s place of shipment and title to and risk of loss shall be transferred upon such delivery; provided, however, that if requested by PURCHASER in an applicable Purchase Order, SELLER shall, on behalf of PURCASER and at PURCHASER’s sole expense, contract for shipment to the shipping destination in the Territory specified by PURCHASER in such Purchase Order and insurance sufficient to the cover risk of loss of such shipment; provided further that in such situation, delivery for purposes of this Agreement shall still be deemed to have occurred EXW SELLER’s place of shipment.

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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2.5 * 2.6 Failure to Supply . 2.6.1 SELLER shall supply by the required delivery date therefor the portion of Martek Product ordered under each Purchase Order acknowledged in accordance with Section 2.2.2 that SELLER is capable of supplying, provided that, if SELLER has insufficient quantities of Martek Product to fulfill any Purchase Order, SELLER may allocate Martek Product among its customers so long as SELLER treats PURCHASER *. 2.6.2 (a) If a failure to supply occurs during the Term such that (A) SELLER fails to deliver in accordance with Section 2.4 at least *of the aggregate amount of ARA Martek Product and/or DHA Martek Product, as relevant, ordered by PURCHASER for delivery within * for a particular * by the * or (B) SELLER gives *, then in each case ((A) and (B)) the permitted * amount that PURCHASER may obtain from a Third Party(ies) in accordance with this Section 2.6.2 shall be the greater of (x) the applicable Shortfall Quantity of DHA and/or ARA, as relevant, or (y) if the * quantity that PURCHASER, after exercising reasonable efforts under the circumstances, is able to obtain from its Third Party supplier(s) * Shortfall Quantity, such * quantity. (b) For purposes hereof, the "Shortfall Quantity" shall mean a quantity of DHA and/or ARA, as relevant, to be obtained in * that * of (A) the maximum * shortfall amount specified by SELLER *, or (B) the difference between (1) the aggregate amount of DHA and/or ARA, as relevant, actually ordered by PURCHASER in accordance with the terms hereof for delivery * for a particular shipment destination, less (2) the aggregate amount of DHA and/or ARA, as relevant actually delivered by SELLER for such shipment destination *. (c) PURCHASER may obtain the permitted amount of ARA and/or DHA via the foregoing rights * for PURCHASER to obtain reasonable cover for SELLER’s failure to provide quantities of the Martek Products ordered hereunder by PURCHASER. In negotiating any such contract for cover, PURCHASER shall, as circumstances allow, reasonably consult with SELLER as to terms being offered and cooperate in good faith with SELLER in SELLER’s reasonable efforts to ensure it can resume its supply of PURCHASER’s total requirements of DHA and ARA hereunder upon SELLER’s resumption of its ability to supply such requirements. PURCHASER shall, in any event, use reasonable efforts under the circumstances to minimize the duration of any contract with a Third Party entered into to obtain cover as permitted herein, and shall ensure that any contract for cover can be unilaterally terminated by PURCHASER on no more than * notice, unless otherwise agreed in writing by SELLER, such agreement to not be unreasonably withheld or delayed. (d) Notwithstanding the foregoing, if SELLER agrees in writing to * PURCHASER for the difference between (i) a higher price offered by a Third Party necessary to obtain lesser volumes and/or a shorter term as compared to a lower price that has been offered by such Third Party for higher volumes and/or a longer term and (ii) the applicable Purchase Price for ARA Martek Product and/or DHA Martek Product, as relevant, then PURCHASER shall agree to accept such higher price in exchange for * by SELLER.

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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2.6.3 For clarity, (x) if any failure to supply only relates to DHA or ARA, and not both, the rights as provided in this Section 2.6 shall only relate to DHA or ARA, as relevant, (y) if any failure to supply only relates to deliveries for a particular shipping destination (e.g., due to specific packaging requirements for that location), the rights as provided in this Section 2.6 shall only apply for deliveries for such shipping destination, and (z) no rights under any Licensed Patents are granted, expressed or implied, by the rights granted under this Section 2.6. In the event PURCHASER exercises any of its rights above in this Section 2.6 (including due to force majeure), any amounts of DHA and/or ARA obtained by PURCHASER from a Third Party in accordance with this Section 2.6 shall be credited to the volumes in the pricing tiers set forth in Exhibit A for the relevant year(s) for the purpose of determining the Purchase Price for such year(s), and PURCHASER shall not be required to pay to SELLER any royalty or any other compensation under the License Agreements with respect to any Wyeth Product or Growing Up Milk Product that incorporates such DHA and/or ARA. 2.6.4 The Parties agree that, so long as SELLER has used its good faith efforts to supply PURCHASER with amounts of Martek Product ordered by PURCHASER in accordance with the terms hereof, any breach by SELLER of its obligations to supply Martek Product to PURCHASER in accordance with the terms of this Agreement shall not give rise to any right to terminate this Agreement for such breach unless and until SELLER has failed (for reasons other than force majeure) to deliver Acceptable Product equal to at least * of the aggregate amount of ARA Martek Product and/or DHA Martek Product, as relevant, ordered pursuant to Purchase Orders placed in accordance with the terms of this Agreement * of the end of the relevant *, in which event PURCHASER shall have the right to terminate this Agreement upon * prior written notice to SELLER. 2.6.5 Notwithstanding any other provision of this Agreement, if PURCHASER has properly exercised its rights to cover hereunder for more than *, and if, at any time while PURCHASER continues to have the right to cover, SELLER does not reasonably believe, after reasonable consultation with PURCHASER, that it will be able * to meet its supply obligations hereunder in such a manner that PURCHASER would not continue to accrue rights to cover under this Section 2.6, then * shall have the right, upon * prior written notice to *. 2.7 * 2.7.1 * 2.7.2 * ARTICLE 3. MANUFACTURING; QUALITY 3.1 Changes to Martek Product Specifications . Subject to Section 3.2, the Martek Product Specifications may only be amended upon the mutual written agreement of the Parties, such agreement to not be unreasonably withheld or delayed. 3.2 Regulatory Changes . If a Regulatory Authority, or a change in Applicable Law, requires a change to (a) SELLER’s Manufacturing processes for Martek Product, (b) the Martek Product Specifications, (c) materials used in the Manufacture of any Martek Product, (d) the suppliers of such materials or (e) any analytical testing or other methods employed to ensure quality control for a Product (each, a " Regulatory Change "), SELLER shall notify PURCHASER, or PURCHASER shall notify SELLER, as the case may be, of such Regulatory Change, and SELLER shall make such Regulatory Change * .

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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3.3 Costs and Expenses . SELLER shall be solely responsible for all costs and expenses incurred in connection with the Manufacture of all Martek Product supplied to PURCHASER hereunder, including costs and expenses of personnel, quality control testing, Manufacturing facilities and equipment, and materials. 3.4 * . 3.5 Event Reporting . If SELLER receives a complaint from any Third Party, or if SELLER’s quality assurance group, infant formula business unit managers, or senior management otherwise become aware of a complaint or issue, about Martek Product involving safety concerns, SELLER shall promptly notify PURCHASER in writing. In addition, during the Term of this Agreement, PURCHASER shall promptly notify SELLER of any report of an adverse event once it has determined that it is potentially associated with the use of Martek Products in any Wyeth Product or Growing Up Milk Product, and SELLER shall notify PURCHASER of any report of an adverse event received by SELLER regarding a Wyeth Product or Growing Up Milk Product irrespective of whether the adverse event is potentially associated with the use of a Martek Product. All adverse event notifications as stated above shall occur within five (5) calendar days of receipt of a report of such adverse event. PURCHASER shall have sole discretion in determining what action, if any, is to be taken by PURCHASER in connection with any such adverse event relating to a Wyeth Product or Growing Up Milk Product. The Parties shall be notified as follows (or in such other manner as provided by notice pursuant to Section 11.4): For SELLER:

 

 

 

Fax number:

 

(410) 740-2985

 

 

 

 

 

Mr. Mario Flores

 

 

Regulatory Manager

 

 

Martek Biosciences Corporation

 

 

6480 Dobbin Road

 

 

Columbia, MD 21045

 

 

(tel) 410-740-0081

 

 

 

For PURCHASER:

 

 

 

 

 

Fax number:

 

(610) 989-5544

 

 

 

Overnight Courier (only):

 

Global Safety Surveillance Epidemiology & Labeling

 

 

Wyeth Research

 

 

GSSEL Triage Unit

 

 

Dock E

 

 

500 Arcola Road

 

 

Collegeville, PA 19426

 

 

 

*

 

The asterisk denotes that confidential portions of this exhibit have been omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The confidential portions have been submitted separately to the Securities and Exchange Commission.

 

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3.6 Formulation . PURCHASER agrees that any batch of Wyeth Product that contains DHA Martek Product or ARA Martek Product shall not contain DHA or ARA obtained from any Third Party and that Martek Product shall comprise one hundred percent (100%) of any and all DHA and ARA contained in such batch of Wyeth Product. ARTICLE 4. INSPECTION 4.1 * . 4.2 Evaluation and Cure . 4.2.1 Upon receipt of a written notice from PURCHASER *, SELLER shall undertake appropriate evaluation of the nonconforming Martek Product and shall notify PURCHAS


 
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