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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.
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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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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.
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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 *
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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.
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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.
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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.
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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.
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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.
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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 * .
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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:
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Fax number:
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(410) 740-2985
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Mr. Mario Flores
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Regulatory Manager
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Martek Biosciences Corporation
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6480 Dobbin Road
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Columbia, MD 21045
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(tel) 410-740-0081
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For PURCHASER:
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Fax number:
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(610) 989-5544
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Overnight Courier (only):
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Global Safety Surveillance Epidemiology &
Labeling
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Wyeth Research
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GSSEL Triage Unit
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Dock E
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500 Arcola Road
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Collegeville, PA 19426
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*
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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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