Contract to Supply - Sample Document

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

  Exhibit 10.2

1.1

“Activated PEG” shall mean [**] further details of which are set out in the Specification (as defined below).

1.2

“Affiliate” shall mean a company that, directly or indirectly, through one or more intermediates, controls, is controlled by, or is under common control with the company specified. For the purpose of this definition, control shall mean the direct or indirect ownership of more than fifty percent (50%) or, if not more than than fifty percent (50%), the maximum percentage as allowed by applicable law of (i) the stock of shares entitled to vote for the election of directors or (ii) ownership interest.

1.3

“BLA” shall mean a regulatory application filed with a governmental agency in a country or a group of countries for the purpose of lawfully marketing, selling, distributing, importing, exporting, manufacturing, developing or using a therapeutic or prophylactic product for the treatment or prevention of a disease or physical condition; A BLA shall include, without limitation, a Product License Application or Marketing Authorization in the European Union, and a Biologics License Application or a New Drug Application in the United States.

1.4

“cGMP” shall mean the current principles and guidelines of good manufacturing practice and general biologics product standards as contained in US Federal Food Drug and Cosmetic Act at

1.5

“Effective Date” shall mean the date of this Agreement first referenced above.

1.6

“FDA” shall mean the United States Food and Drug Administration.

1.7

“Force Majeure” shall mean any unforeseeable occurrence beyond the reasonable control of a Party that prevents the performance by that Party of any of its obligations hereunder arising from or attributable to acts, events, non-happenings, omissions, accidents or any other similar cause which is unforeseeable and beyond the reasonable control of such Party.

1.8

“Legal Requirements” shall mean (i) any present and future national, state, local or similar laws (whether under statute, rule, regulation or otherwise) and (ii) requirements under permits, orders, decrees, judgments or directives, and requirements of applicable Regulatory Agencies (including, without limitation, cGMP) (with respect to each of the foregoing, as amended or revised from time to time).

1.9

“Party” shall mean either Savient or NOF, as is appropriate in the given context and the plural shall mean both Savient and NOF.

1.10

“Quality Agreement” shall mean the list of responsibilities of the Parties relating to cGMP activities, a copy of which is attached hereto as Exhibit D and incorporated herein by reference. The Quality Agreement shall be updated from time to time by mutual written agreement of the Parties.

1.11

“Quarterly” shall mean a period of three (3) consecutive months commencing on 1 January, 1 April, 1 July and 1 October in each calendar year during the Term of Agreement.

1.12

“Regulatory Agency” shall mean with respect to the United States, the FDA, or, in the case of a country in the Territory other than the United States, such other appropriate regulatory agency with similar responsibilities.

1.13

“SAVIENT Products” shall mean SAVIENT’s proprietary PEG-uricase (as more specifically defined in Exhibit E attached hereto and incorporated herein by reference) [**] .

1.14

“Specification” shall mean the agreed upon procedures, requirements, standards and other items set forth in the attached Exhibit A which is incorporated herein by reference. Exhibit A shall be updated from time to time by mutual written agreement of the Parties hereto.

1.15

“Third Party” shall mean any person or party other than SAVIENT, NOF and their respective Affiliates.

1.16

“Year” shall mean the twelve month period commencing on the Effective Date and any subsequent anniversary of the Effective Date.

1.17

References to the singular shall be deemed to include the plural and vice versa.

1.18

References to statutory provisions shall include the same as amended or re-enacted from time to time, whether before or after the date hereof.

2.1

Development Activities . Pursuant to the terms of this Agreement and subject to the condition that SAVIENT shall purchase, and take delivery of, by the end of September 2007 the three process validation batches to be manufactured by NOF in the May-August 2007 timeframe ([**]kg x 3 lots), such validation batches shall have expiration dating of [**] from their respective dates of manufacture. NOF shall prepare a Type II Drug Master File (hereinafter “DMF”) for Activated PEG for the purpose of submitting the DMF to the United States FDA. In addition, NOF shall use commercially reasonable efforts to submit in a timely manner a DMF, or its equivalent, to any Regulatory Agency in such additional country, including the European Union, as the Parties may agree in the future, and such submission shall be in a form that may be reasonably expected to be acceptable to such Regulatory Agency, provided, however, that SAVIENT shall reimburse to NOF the costs and expenses to be incurred by NOF in connection with preparation and submission of such additional DMF. NOF agrees that it shall use its best efforts to submit the DMF to the FDA not later than December 31, 2007, through an agent physically located in the United States and in accordance with all applicable Legal Requirements. NOF shall submit such additional data and/or information as may be requested or required by a Regulatory Agency as it relates to the SAVIENT PEG-uricase BLA and shall do so on a timely basis and in accordance with all applicable Legal Requirements. In accordance with applicable Regulatory Agency rules and regulations, NOF will issue letters of authorization to such Regulatory Agencies as may be requested by SAVIENT in order to allow the Regulatory Agency to review the DMF for Activated PEG in reference to SAVIENT’s PEG-uricase BLA.

2.2

Commencement of Supply . The commencement of supply of Activated PEG pursuant to this Agreement shall not occur until such a time as SAVIENT shall have submitted to NOF a Forecast (as defined below), where such Forecast shall include a Firm Order (as defined below) which shall not require delivery of any Activated PEG in less than [**] from the date of the submission of the Firm Forecast (hereafter the, “Supply Commencement Date”).

3.1

Manufacture and Supply . In furtherance of the manufacturing SAVIENT Products to be used as a drug or device for the treatment of gout or other diseases and conditions involving hyperuricemia and/or monosodium urate crystals (hereinafter, the “Field”), NOF agrees to manufacture and supply the Activated PEG to SAVIENT or SAVIENT’S designated agent in accordance with the terms of this Agreement and SAVIENT agrees not to use, transfer or otherwise dispose of the Activated PEG for any other purpose. NOF further confirms that all orders placed by SAVIENT for the Activated PEG will be manufactured under cGMP. The parties agree that the nominal batch size for the production of Activated PEG pursuant to this Agreement shall be approximately [**] kilograms ([**]kg); SAVIENT shall provide Forecasts (as hereinafter defined) for Activated PEG and place orders in quantities no less than [**]kg per shipment..

3.2

Forecasting and Orders . SAVIENT shall forecast and order the Activated PEG as follows:

(a)

Not less than [**] prior to the Supply Commencement Date and Quarterly thereafter, SAVIENT shall provide to NOF a rolling [**] forecast, starting from the Supply Commencement Date, of its expected quarterly requirements for the Activated PEG (“Forecast”), the first [**] of which shall be binding (a “Firm Forecast”) and the last [**] of which shall be non-binding. The Forecast will include the required delivery dates and delivery locations for the Activated PEG, such delivery dates to be no sooner than ninety (90) days from the date of transmission of the Forecast to NOF. The Forecast will be updated Quarterly by SAVIENT. The non-binding portions of the Forecast, the last [**], may be modified by SAVIENT plus or minus [**]% upon each quarter becoming a Firm Forecast provided, however, that the total amount of the non-binding portions of the Forecast may not increase or decrease by [**]kg, plus or minus, within such non-binding [**] period unless the parties shall agree otherwise.

(b)

Within ten (10) days of receipt of the Forecast and each quarterly updated Forecast, NOF shall reply in writing whether it will agree to meet the required Forecast and delivery dates. If, despite the use of best commercial efforts, NOF projects that it is unable to agree to the Forecast or updated Forecast and the delivery dates set forth therein, the Parties shall use their reasonable efforts to agree to a revised Forecast and delivery dates. Provided, however, that NOF shall not modify the delivery dates for any Firm Forecast previously accepted by NOF unless there has been an increase or decrease to the quantity specified by SAVIENT in the updated Forecast. Additionally, the parties agree that time is of the essence in resolving any dispute arising hereunder and shall use their best efforts to agree upon a revised Forecast as soon as possible.

(c)

SAVIENT shall place binding written purchase orders setting forth delivery dates of each quarter for the Activated PEG based on the Firm Forecast and updated Firm Forecasts at least [**] before the agreed upon delivery date (“Firm Order”). Ó

3.3

Delivery . NOF shall deliver such quantities of Activated PEG to SAVIENT as agreed upon by the parties in accordance with the terms of Section 3.2 herein; such quantities shall be delivered on or before the dates agreed upon by the Parties in accordance with Section 3.2. Promptly after shipment of the Activated PEG to SAVIENT, NOF shall notify shipping information to SAVIENT in writing by invoice or other documentation. Delivery shall be CIF by air shipment to Ben Gurion Airport, Israel (Incoterms 2000) or to such other location as may be directed by SAVIENT in the applicable Firm Order. NOF shall ship the Activated PEG, properly packaged and labeled in accordance with the Specifications, to SAVIENT or SAVIENT’s designee. If the Activated PEG is not delivered in accordance with this Agreement, both Parties agree to consult with each other to rectify the non-delivery within thirty (30) days after receiving request for consultation from either Party.

3.4

Delivery Documentation . Prior to shipping the Activated PEG as set forth in Section 3.3, NOF shall send to SAVIENT a Certificate of Analysis (“C of A”) certifying the conformance of the Activated PEG to the Specification and with all warranties set forth in ARTICLE 4, which C of A will be signed by the head of the Quality Assurance unit at NOF’s manufacturing facility. The C of A shall be faxed to the attention of SAVIENT’S Manufacturing Department at (732) 418-0766, Attention: Director, Biopharma Processing, or as may otherwise be designated in writing by SAVIENT from time to time prior to the release of the shipment by NOF. Provided, however, that SAVIENT shall refer to and state the above requirements on every Firm Orders. The original C of A shall accompany the shipment of the Activated PEG. NOF shall have the responsibility of authorizing the release of any Activated PEG ordered and prior to shipment of the Activated PEG NOF shall supply the C of A to SAVIENT as set forth above.

3.5

Minimum Purchase . Subsequent to the Supply Commencement Date, during each Year of the Term of Agreement (as defined below), SAVIENT shall order for delivery in any Year from NOF at least SAVIENT’s annual minimum requirement of the Activated PEG for each Year as provided in Exhibit B attached hereto and incorporated herein, or of its proportionate volume of requirement in case of less than one full Year (“Minimum Purchase Obligation”). Nothing herein shall be construed as limiting the amount of Activated PEG that SAVIENT may purchase from NOF, nor the amount of Activated PEG that NOF shall supply to SAVIENT, in any given Year, subject only to the provisions relating to Forecasts and Firm Forecasts, as such terms are defined herein. For purposes of clarity, the purchase by SAVIENT of the process validation batches contemplated in Section 2.1 above shall count towards the annual minimum purchase requirements in 2007 pursuant to this Section 3.5 and shall be procured at the agreed upon price of [**] United States Dollars (US$[**]).

3.6

[**] Minimum Purchase Obligation . Notwithstanding the foregoing, at any time during the Term of Agreement SAVIENT shall have an option (without terminating this

3.7

Supply Failure . In the event that NOF is unable to supply at least [**] percent ([**]%) of SAVIENT’S Firm Forecast quantities (hereinafter, a “Supply Failure”), then both parties agree to meet and use their best efforts to solve such Supply Failure.

3.8

Exclusivity of Purchase and Supply . SAVIENT agrees that for SAVIENT Products it shall procure Activated PEG from NOF on an exclusive basis and shall not purchase or otherwise procure Activated PEG from any Third Party during the Term of the Agreement; provided, however, that in the event a Supply Failure shall occur SAVIENT shall have the right, but not the obligation, to obtain such quantities of Activated PEG as it may require for such a period of time until the Supply Failure has been remedied to SAVIENT’s reasonable satisfaction.

4.1

Quality Control .

(a)

NOF shall perform, or cause to be performed, quality control tests and procedures in accordance with the Quality Agreement to verify that each batch of the Activated PEG conforms to the Specification.

(b)

NOF will make available to SAVIENT any other relevant information, documents and/or data pertaining to the manufacturing and testing of the Activated PEG. In addition, if the Activated PEG deviates from the Specification, the variance and non-conformance data and records shall promptly be reported in writing to SAVIENT.

4.2

Rejection . Within thirty (30) days following the day on which SAVIENT or SAVIENT’S designated agent, as the case may be, receives delivery of the Activated PEG or the C of A (whichever is the later), SAVIENT shall have the right to reject the Activated PEG batch (or part thereof) which fails to conform to the applicable Specification or otherwise fails to conform to warranties given by NOF set forth in ARTICLE 5, provided that this Section 4.2 shall not apply if the failure to conform to applicable Specification is due to any action or inaction on the part of SAVIENT. Any such rejection shall be made by written notice to NOF specifying the manner in which all or part of such batch fails to meet the foregoing requirements.

4.3

Failure to Conform . If any batch of the Activated PEG fails to conform to the Specification or otherwise fails to conform to the warranties set forth in ARTICLE 5 for any reason, SAVIENT shall, at NOF’s election (a) return such batch to NOF at NOF’s direction and expense within ten (10) days following the date of written notice of rejection by SAVIENT pursuant to Section 4.2, or (b) destroy such batch and provide to NOF certification of such destruction in a form reasonably acceptable to both NOF and SAVIENT.

4.4

Refund . Payment for any Activated PEG shall not be deemed acceptance if at a later date such batch is rejected pursuant to Section 4.2, and NOF shall refund the price of all rejected Activated PEG to SAVIENT within forty-five (45) days of the rejection of the Activated PEG.

4.5

Samples and Records . NOF shall prepare and keep batch records and shall retain samples, properly stored in accordance with the Quality Agreement, from each batch of the Activated PEG manufactured by NOF. NOF shall comply with cGMP in retaining batch records and samples. NOF shall prepare and keep complete and accurate records of all the Activated PEG manufactured for SAVIENT consistent with cGMP requirement. Subject to the confidentiality obligations set out in ARTICLE 6, SAVIENT or its designee shall have access to all such records and samples on reasonable notice and during normal business hours. In the event SAVIENT requires records or documentation, other than those to be maintained by NOF as described above, to file applications to a Regulatory Authority, NOF will assist SAVIENT in the preparation of such records and documentation to the extent requested by SAVIENT and at SAVIENT’s expense.

4.6

Presence at Facility . SAVIENT shall have the right, from time to time, to assign a reasonable number of its employees or representatives to visit NOF’s manufacturing facility and any other relevant location (e.g. warehouse) for two (2) days per Year (or such other period as may be agreed by the Parties in the event that any material non-compliance with the terms of this Agreement or in the manufacture of the Activated PEG is discovered) in order to inspect, discuss and review the activities performed by NOF under this Agreement and to verify NOF’s compliance with the warranties in ARTICLE 5 with respect to the Activated PEG. The presence of SAVIENT’s employees or representatives shall in no way relieve NOF of any of its obligations under this Agreement.

5.1

Warranties . NOF hereby covenants, represents and warrants to SAVIENT that:

(a)

On the date of shipment from Japan of the Activated PEG sold by NOF to SAVIENT hereunder and until acceptance by SAVIENT pursuant to the terms of this Agreement, the subject Activated PEG will comply with all requirements of this Agreement and shall comply with the Specification and conform to the information shown on the C of A and reports provided for the particular batch according to Section 3.4 hereof; additionally, such Activated PEG shall have not less than [**] expiry dating on the date of shipment from NOF to SAVIENT or SAVIENT’s designee. SAVIENT and NOF agree that upon the availability of additional stability data after retesting, the parties will mutually agree on a revision to the “not less that [**] expiry dating of date of shipment” and such revisions shall be memorialized in an amendment to this Agreement.

(b)

To the best knowledge of NOF, no technology used in the manufacture of Activated PEG is the subject of any third party intellectual property rights but NOF shall not warrant that the Activated PEG and the technology shall be free from any claims of infringement upon patents and any other intellectual property rights of any third party.

(c)

At the time that title to the subject shipment of Activated PEG passes to SAVIENT pursuant to the terms of this Agreement, NOF shall have good title thereto which shall pass to SAVIENT free and clear of any and all liens, encumbrances, or any other possessory or financial interests.

(d)

Permits . NOF has and shall maintain all necessary licenses, permits and registrations for the manufacture of the Activated PEG and supply of the same hereunder.

5.2

Consequential Damages . In no event shall either Party be liable, whether under this Agreement or otherwise, for any indirect or consequential damages (including without limitation loss of profits, loss of opportunity, interruption of business, loss of goodwill, and the costs of cover), suffered by the other Party and arising out of any breach of this Agreement or out of any dispute relating thereto.

5.3

Indemnity by SAVIENT . SAVIENT shall defend, indemnify and hold NOF, NOF’s Affiliates and their directors, officers, employees and agents (collectively “NOF INDEMNITEES”) harmless for all losses, liabilities, damages and expenses (including reasonable attorney’s fees and costs) resulting from all claims, demands, actions and other proceedings by any third party to the extent arising from: (a) the breach of any representation, warranty or covenant of SAVIENT contained in this Agreement; (b) the research, development, manufacturing, commercialization or marketing of SAVIENT Products; or (c) the negligence, recklessness or willful misconduct of SAVIENT in the performance of its obligations under this Agreement.

5.4

Indemnity by NOF . NOF shall defend, indemnify and hold SAVIENT, SAVIENT’s Affiliates, and their directors, officers, employees and agents (collectively “SAVIENT INDEMNITEES”) harmless for all losses, liabilities, damages and expenses (including reasonable attorney’s fees and costs) resulting from all claims, demands, actions and other proceedings by any third party to the extent arising from: (a) the breach of any representation, warranty or covenant of NOF contained in this Agreement; or (b) the negligence, recklessness or willful misconduct of NOF in the performance of its obligations under this Agreement.

5.5

Exclusion from SAVIENT Indemnity . The Parties agree that the Activated PEG supplied hereunder will b