[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN
ASTERISK [*], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.]
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SUPPLY AGREEMENT
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between
FERRING PHARMACEUTICALS INC
and
VYTERIS INCORPORATED
INDEX
Supply Agreement
Article
1. Definitions
2. Supplies of Product
3. Prices and Payments
4. API
5. Exclusivity
6. Confidentiality
7. Intellectual Property Rights
8. Quality of Products
9. Recalls and Regulatory Actions
10. Limitation of Liability
11. Representations and Warranties
12. Insurance
13. Indemnification
14. Term and Termination
15. Force Majeure
16. Governing Law
17. Resolution of Disputes
18. Miscellaneous
Appendices
1 Product, Transfer Prices and Payment
2 Logistic Arrangements
3 Contact Persons
4 Technical Agreement (including appendices)
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THIS SUPPLY AGREEMENT IS EFFECTIVE ______ 2004 ("EFFECTIVE DATE"), BY AND
BETWEEN:
1) Vyteris Incorporated, a company organized and existing under the laws of
Delaware, of ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇ (hereinafter referred
to as the "Vyteris")
and
2) Ferring Pharmaceuticals Inc., a company organized and existing under the
laws of Delaware, of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇
(hereinafter referred to as the "Ferring")
WHEREAS:
(1) Vyteris has or has access to the organisation and know how required to
manufacture certain medical devices.
(2) Ferring desires to purchase certain medical devices from Vyteris and Vyteris
desires to manufacture and sell such medical devices to Ferring;
(3) the Parties wish to enter into this agreement governing the manufacture and
supply of the medical devices to give effect to the arrangements outlined above.
The Parties therefore agree as follows:
ARTICLE 1 - DEFINITIONS
For purposes of this agreement, the terms defined in this article shall have the
respective meanings set forth below:
1.1 "Affiliate" of a Party shall mean any corporation, partnership or other
entity controlling, controlled by or under common control with such
Party.
1.2 "Agreement" shall mean this supply agreement and the appendices hereto,
including any agreed amendments and additions.
1.3 "Active or "Active Pharmaceutical Ingredient" or "API" shall mean [*].
1.4 "Finished Commercial Product" shall mean Finished Packaged Goods
together with such final commercial packaging, information leaflets and
other materials as Ferring shall so elect in the form intended to be
received by the patient.
-3-
1.5 "Finished Packaged Goods" shall mean the patches and a controller(s)
packaged in a carton. --
1.6 "Party" shall mean Vyteris or Ferring and, when used in the plural,
shall mean Vyteris and Ferring
1.7 "Patch" is described in section 1.12 of the License and Development
Agreement
1.8 "Product" shall mean the commercial product that uses an iontophoretic
drug delivery system for the [*] that is developed pursuant to the
License consisting of a patch and a controller.
1.9 "Product Specifications" shall mean the mutually-agreed specifications
for the Product as defined in section 1.12. The details of these Product
Specifications will not be available until completion of the Development
Project under the Development Agreement of even date and approved by the
FDA.
1.10 "Technical Agreement" shall mean the technical agreement attached hereto
as APPENDIX 4.
ARTICLE 2 - SUPPLIES OF PRODUCT
2.1 SUPPLIES
Subject to the terms and conditions hereof, Vyteris shall sell to
Ferring, and Ferring shall purchase from Vyteris the Finished Packaged
Goods ordered by Ferring in accordance with Section 2.2.
2.2 FORECASTS, PURCHASE ORDERS, ORDER SIZES AND ORDER FREQUENCy
The logistic arrangements for Vyteris' manufacture and supply of
Finished Packaged Goods to Ferring, including forecasts, procedures for
purchase orders, order sizes, order frequency, and delivery shall be
performed in accordance with the terms and conditions of Appendix 2.
Such Appendix shall be updated whenever necessary by mutual agreement of
the Parties.
ARTICLE 3 - PRICES AND PAYMENTS
The Products shall be sold by Vyteris and purchased by Ferring at the
prices and on the terms set out in Appendix 1. Such appendix shall be
updated whenever necessary by mutual agreement of the Parties.
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ARTICLE 4 - API
4.1 API SUPPLY
Ferring shall supply free of charge to Vyteris the API necessary to meet
Ferring's forecasted purchases on the basis of Ferring's forecasts and
Vyteris' reported manufacturing schedule and API inventory levels.
4.2 API OWNERSHIP
Title to the API will at all times remain vested in Ferring. Vyteris
will provide to Ferring monthly reports on API inventory. Vyteris will
be responsible for all accidental and negligent losses of or damage to
API following delivery to it by Ferring's designated third party
supplier. Ordinary losses within agreed limits associated with the
manufacturing process and detailed in the Technical Agreement attached
hereto shall not be considered accidental or negligent losses.
ARTICLE 5 - EXCLUSIVITY
On the terms and subject to the conditions set forth in this Agreement,
Vyteris shall manufacture for and supply the Product to Ferring on an
exclusive basis, and Ferring shall purchase its requirements of the
Product exclusively from Vyteris during the term of this Agreement save
that Vyteris, in the first calendar year that Ferring forecasts the
purchase of one million (1,000,000) patches, shall at Ferring's request
and expense establish within a reasonable of time a second source at a
facility agreeable to Ferring from which Vyteris shall be permitted to
source a portion of its annual needs in each calendar year. It is
understood that the use at Ferring's request of two manufacturing
sources may result in Product not being produced as cost effectively at
either the original or the second site if not produced in sufficiently
large volumes. Where a significant difference in cost of goods arises as
a result of low volume production at either source the parties shall
meet and agree on equitable solution adjustments to the transfer prices
of goods made at either or both sources sufficient to compensate Vyteris
for any cost inefficiencies resulting from Ferring's request that a
second source be used.
ARTICLE 6 - CONFIDENTIALITY
6.1 CONFIDENTIAL INFORMATION
Each of the parties agrees to hold in confidence any confidential or
proprietary information disclosed to it by the other. Each party will
take such precautions as it normally takes with its own confidential or
proprietary information to prevent the improper disclosure to an
independent third party of information disclosed to it pursuant to this
Agreement. Notwithstanding the preceding provision, the obligation of
confidence with respect to information disclosed does not include:
(i) information which, at the time of disclosure, is known to the
recipient, as evidenced by records of the recipient;
-5-
(ii) information which, at the time of disclosure, is published,
known publicly, or is otherwise in the public domain;
(iii) information which, after disclosure, is published, becomes known
publicly or otherwise becomes part of the public domain through
no fault of the recipient;
(iv) information which has been or is disclosed to the recipient in
good faith by a third party who was not and is not under any
obligation of confidence or secrecy at the time of such
disclosure;
(v) information which is required to be submitted to a governmental
agency for the purpose of obtaining product approval, provided
that the recipient will make a good faith attempt to obtain
confidential treatment of the information by such agency;
(vi) information which has been developed by the recipient
independent of any confidential information disclosed to it by
the other Party hereunder; and
(vii) information which the recipient is required by law to disclose.
6.2 RETURN OF CONFIDENTIAL INFORMATION
Upon termination of this Agreement, each Party will promptly return to
the other any confidential or proprietary information disclosed to it by
the other prior to termination and destroy internal documents
encompassing any confidential or proprietary information subject to
regulatory requirements;, except for one copy of disclosed confidential
or proprietary information which may be retained by the recipient's
legal counsel for the sole purpose of ensuring compliance with
continuing obligations hereunder. Furthermore each Party agrees to keep
confidential such information for a period of 5 (five) years after the
effective date of such termination.
ARTICLE 7 - INTELLECTUAL PROPERTY RIGHTS
7.1 Except as is necessary for the proper performance of this Agreement by
the Parties or as set out herein, no license, express or implied is
granted by this Agreement by either Party to the other under any of its
intellectual property rights.
7.2 Title to and property in all manufacturing records (which shall include
but not be limited to all batch documentation and validation data) of
Vyteris shall be and remain at all times exclusively vested in Vyteris.
Ownership of intellectual property relating to process improvements
shall be owned in accordance with the relevant provisions of the License
and Development Agreement between the Parties of even date.
7.3 No process improvements or changes, in accordance with the Technical
Agreement shall be employed by Vyteris in the manufacture of the
Finished Packaged Goods unless the Parties have previously in writing
agreed to the terms upon which such process improvements or changes are
to be employed by Vyteris.
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ARTICLE 8 - QUALITY OF PRODUCTS
8.1 QUALITY OF PRODUCTS
The Products sold by Vyteris to Ferring pursuant hereto will be
manufactured in all material respects in accordance with the Technical
Agreement and its appendices.
8.2 The Technical Agreement shall set forth the Parties' obligations with
respect to manufacturing quality audits by FDA and Ferring.
8.3 DEFECTIVE PRODUCTS
Ferring will inspect Product delivered to Ferring in accordance with the
Technical Agreement attached hereto however in the event that any
quantity of the Product delivered to Ferring or its designee pursuant
hereto fails to satisfy the requirements of this Section 8 including,
without limitation, a failure to meet the Product Specification, the
Ferring may reject the same by giving notice to the Vyteris within
forty-five (45) days after receipt of such Product. Such notice will
specify the manner in which the Product fails to meet the Product
Specification or is otherwise defective. Any Products not rejected
within such forty-five (45) day period shall be deemed accepted by
Ferring. Any claims for failure to so conform or for such defects shall
be made in writing by Ferring to Vyteris, indicating the non-conforming
characteristics of the Products.
Vyteris will, upon receipt of such written notification by Ferring,
replace the defective Product and pay all freight and duty with respect
to such replacement, provided however, that Ferring or its designee has
stored the Products under proper conditions.
In the event of any dispute as to whether any quantity of the Product
delivered to Ferring or its designee fails to meet the requirements of
this Section 8, such dispute shall be resolved by an independent testing
organization acceptable to both Vyteris and Ferring.
Nothing in this section shall prevent Ferring from pursuing a claim and
recovering compensation from Vyteris for such Product in the event that
such defects are not discovered until after the elapse of forty five
days from delivery provided that Ferring followed the inspection
requirements set forth in the Technical Agreement attached hereto, and
such inspection did not reveal such defects.
8.4 Supplier must provide Product that meets a failure rate that is defined
in the Technical Agreement - attached hereto.
ARTICLE 9 - RECALLS AND REGULATORY ACTIONS
9.1 RECALLS; COOPERATION
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If either Party believes that a Product recall is appropriate, such
Party will immediately notify the other Party prior to taking any action
and the Parties will cooperate with each other in determining the
necessity and nature of such action. If the Parties determine that a
Product recall should be initiated, whether or not such recall has been
requested or ordered by any governmental agency, Vyteris will fully
cooperate with Ferring in notifying customers to return all such Product
and will follow any other reasonable instructions provided by Ferring.
9.2 COMMUNICATIONS WITH REGULATORY AUTHORITIES
Ferring shall be primarily responsible and shall have the principal
right to interface with the FDA or other regulatory authority with
respect to the Product. Vyteris shall be primarily responsible and shall
have the principal right to interface with the FDA or other regulatory
authority with respect to the Device Master File for the Product, and
may communicate with the FDA or any regulatory authority regarding the
Device Master File, provided that Vyteris shall provide copies to
Ferring of all such communications.
9.3 COMPLAINTS AND INVESTIGATIONS
Ferring shall be responsible for interfacing with its customers
regarding all Product complaints and inquiries. Vyteris has the option
to meet quarterly with Ferring to review complaints and inquiries.
Vyteris shall cooperate fully with Ferring to conduct reasonable
investigations to evaluate the complaint or inquiry. Ferring shall be
responsible for contacting its customers for the purposes of such
investigations. If Vyteris receives any information regarding adverse
reactions or defects of the Products, Vyteris shall promptly inform
Ferring thereof. Each party shall reasonably cooperate with the other in
sharing any information that may constitute an adverse experience or
complaint related to the Products and shall designate a representative
responsible for the exchange of such information.
9.4 LIABILITY FOR RECALL COSTS
If a Product recall is necessary for any reason, Vyteris and Ferring
will investigate the cause of such recall and will bear the costs of
such recall in proportion to the responsibility of each Party for the
error necessitating the recall, if the result of an error, or, if not
the result of an error, on such other equitable basis to which the
Parties shall agree.
9.5 CONFIDENTIALITY
All communications relating to any Recall will be held in confidence and
will be subject to the terms of Article 6 of this Agreement; provided,
however, that no Party shall be prohibited by this Section 9.5 from
making any disclosure or providing any notice that may be required under
applicable law.
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ARTICLE 10 - LIMITATION OF LIABILITY
10.1 LOST, DAMAGED OR DESTROYED INGREDIENTS
Vyteris's liability under this Agreement for any and all claims for
lost, damaged or destroyed API that cannot be reworked is limited to a
maximum of [*] per Vyteris production lot of Product or the cost of the
API (to Ferring), whichever is less.
10.2 SPECIAL DAMAGES
In no event shall either Party be liable to the other Party or to any
other person for any special, consequential, exemplary or incidental
damages (including lost or anticipated revenues or profits relating to
the same), arising from or relating to this Agreement or the subject
matter thereof.
10.3 WAIVER OF CLAIMS
Ferring hereby waives or agrees to waive all claims against Vyteris for
damages arising from lost, damaged or destroyed API that cannot be
reworked to the extent that such claims exceed [*] per Vyteris
production lot of Product (including costs, expenses, and attorneys'
fees).
The Parties specifically agree that any claims that Ferring may have
against Vyteris exceeding the waiver amounts listed above (including
costs, expenses, and attorneys' fees) will be made, if at all, against
Ferring's insurance policy, if one exists.
ARTICLE 11 - REPRESENTATIONS AND WARRANTIES
11.1 VYTERIS
Vyteris warrants that it shall during the term of this Agreement comply
at all times in all material respects with the requirements set forth by
the relevant regulatory authorities for the manufacture of Products for
medical use.
Vyteris warrants that it has the rights and licenses to supply the
Products to Ferring as contemplated hereby and that it shall maintain
such rights and licenses during the term hereof.
Vyteris warrants that the Product shall be manufactured in all material
respects in accordance with current Good Manufacturing Practices and in
conformity with the Product Specifications, and that the Product shall
be free from material defects.
11.2 INDEPENDENT CONTRACTORS
The Parties are independent contractors, and this Agreement shall not be
deemed to constitute either Party (or any of its employees) a partner,
joint venturer, franchisee, servant, agent, or employee of the other.
Except as otherwise expressly provided herein, no Party may make any
representation, warranty or
-9-
commitment, whether express or implied, on behalf of or incur any
charges or expenses for, or in the name of, any other Party.
ARTICLE 12 - INSURANCE
Vyteris carries the risk for loss of or damage to the Product and any
intermediates, starting materials and packaging materials until delivery
of the Product to Ferring. Vyteris shall put in place and maintain
during the term hereof adequate insurance for such risks. Any risks of
loss of product after delivery in accordance with Appendix 2 shall be
the responsibility of Ferring.
ARTICLE 13 - INDEMNIFICATION
13.1 INDEMNIFICATION
Each Party will indemnify, defend and hold the other party harmless from
and against any and all claims, judgments, costs, awards, expenses
(including reasonable attorneys' fees) and liabilities of every kind to
any third party arising out of any breach by such Party of its
warranties and covenants or other obligations contained herein; provided
that, with respect to product liability, Vyteris will be liable for
claims arising from its fault or negligence in manufacturing the
Product, and Ferring will be liable for claims arising from its fault or
negligence in labeling, marketing, selling or distributing the Product.
13.2 Vyteris undertakes to indemnify, defend and hold harmless Ferring
against all expenses arising in connection with third party claims of
infringement of patent or other intellectual property rights, relating
to the iontophoretic methodology or techniques used by Vyteris in the
manufacturing of the Product.
13.3 NOTIFICATION
Any party asserting a right to indemnification hereunder shall notify
the other party as soon as reasonably practicable after forming a belief
that a claim exists that may be subject to the indemnification
provisions of this Section 13, but in no event later than thirty (30)
days after receiving notice of any third party claim, provide the other
party with all available information and assistance and afford the other
party the opportunity, at such other party's expense, to defend or
settle the claim; The indemnified Party shall provide reasonable
cooperation to the indemnifying Party in defense of any such claims or
suits, including, but not limited to, affording complete access to all
relevant records. Nothing herein shall prevent the indemnified Party
from retaining counsel of its choice, at such Party's expense, to
monitor the defense, trial, or settlement of this matter, and the
indemnifying Party and its counsel shall reasonably cooperate with such
counsel.
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ARTICLE 14 - TERM AND TERMINATION
14.1 TERM
This Agreement shall become effective on the date of receipt by Vyteris
of the first purchase order for production of a full scale batch that
will be used for commercial sale, which may be earlier than the date of
FDA approval for commercial sale and shall remain in full force for
fifteen (15) years, unless terminated earlier by either Party in
accordance with this Agreement.
14.2 OPTION TO RENEW
Ferring shall have the option to request an extension of this Agreement
no less than thirty-six (36) months prior to expiration. If, after one
hundred and eighty (180) days from Ferring's notice that it wishes to
enter into extension discussions, Vyteris declines to enter into
negotiations or fails to accept terms no less financially beneficial
than set out herein, then Ferring shall be free to find another supplier
and Vyteris shall provide such staff and/or equipment as may be
reasonably necessary to effect a technology transfer to the new
manufacturer. In addition, Vyteris shall at Ferring's request produce
safety stock of up to twelve (12) months during the final twelve (12)
months of the Supply Agreement. The royalty shall be payable on sales of
such safety stock on a first in, first out basis.
If Ferring does not exercise its option or the Parties are unable to
reach agreement on commercial terms, Vyteris shall be under no
obligation to provide any technology transfer to Ferring or its new
supplier.
14.3 TERMINATION FOR CAUSE
Except as otherwise provided in Article 15 below regarding Force
Majeure, either Party may terminate this Agreement:
(a) upon or after the breach of any material provision of this Agreement
or the License by the other Party if the other Party has not cured a
curable breach within forty five (45) days after written notice thereof
by the non-breaching Party; or
(b) if the other Party voluntarily commences any action for or seeks any
arrangement with its creditors, or for liquidation, reorganization
(other than for corporate reorganization), dissolution or relief under
any bankruptcy, insolvency or similar law; or
(c) if a proceeding is commenced or an order, judgment or decree is
entered seeking an arrangement with its creditors or the liquidation,
reorganization, dissolution of the other Party or any similar act or any
other relief under any bankruptcy, insolvency or similar law against the
other Party, without its consent, which continues undismissed or
unstayed for a period of forty five (45) days. During the first twelve
months from the start of commercial production which shall include the
period of manufacture of any validation batch completed within
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three months of receipt of marketing authorization and where necessary
pricing approval in any country for purposes of (a) above, a failure by
Vyteris to supply Ferring with Products pursuant to this Agreement that
is not cured within forty-five (45) days following receipt of written
notice from Ferring of such failure shall not constitute grounds for
terminating this Agreement if, within fifteen (15) days following
receipt of such notice, Vyteris provides Ferring with written notice and
evidence reasonably satisfactory to Ferring that the failure has
resulted from circumstances beyond the reasonable control of Vyteris and
not as a result of obligations to supply products to persons other than
Ferring ("Remediation Notice"). Such Remediation Notice shall include a
written plan (the "Remediation Plan") setting forth the actions that
Vyteris shall take to cure the supply failure as soon as commercially
possible, and shall be subject to the review and approval by Ferring,
which shall not be unreasonably withheld, conditioned or delayed.
Vyteris shall not be considered in breach of Section 14.3(a) as a result
of the supply failure if the Remediation Plan is approved by Ferring and
Vyteris fulfills all of its supply and related obligations under such
plan within the time periods provided thereby. Vyteris shall use its
best efforts to cure any supply failure, and shall be considered in
breach under Section 14.3(a) if it fails to perform any of its
obligations under the Remediation Plan in a manner reasonably
satisfactory to Ferring.
14.4 EFFECT OF EXPIRATION OR TERMINATION
Expiration or termination of this Agreement shall not relieve the
Parties of any obligation accruing prior to such expiration or
termination, and the provisions of this section 14.5, section 14.6 and
the Articles 6, 7, 8, 10, 13, 16 & 17 shall survive the expiration or
termination of this Agreement.
14.5 REMAINING STOCK
In the event of termination other than as a result of breach by Ferring,
Ferring shall have the right, but not the obligation, to purchase all
usable stock of the Product which was manufactured for Ferring.
ARTICLE 15 - FORCE MAJEURE
Any significant unexpected event which is beyond the reasonable control
of a party for which such party cannot reasonably have been expected to
have taken account and including, but without prejudice to the foregoing
generality, events resulting from an act of God, lightning, fire, flood,
earthquake, accumulation of snow or ice, lack of water arising from
weather or environmental problems, strike, lock-out or other industrial
disturbance, act of the public enemy, war declared or undeclared; threat
of war; terrorist act; blockade, revolution, riot, insurrection, civil
commotion, public demonstration, sabotage, act of vandalism, prevention
from or hindrance in obtaining any raw materials, energy or other
supplies,
-12-
explosion, fault or failure of plant or machinery (which could not have
been prevented by good industry practice); government restraint, act of
legislature or a directive or requirement of the competent authority
affecting a party or its subcontractor providing that such party or its
subcontractor's lack of funds shall not be interpreted as a cause beyond
such party's reasonable control. In the event that such causes continue
for more than three (3) consecutive months, each party will have the
right to terminate the Agreement and neither of the Parties will have a
right to reimbursement or any claim for damages as a result of the
cancellation of this Agreement.
ARTICLE 16 - GOVERNING LAW
This Agreement and any and all matters arising directly or indirectly
herefrom, including without limitation the execution, validity,
construction and effect hereof, shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely in such
state, without giving effect to the conflict of law principles thereof.
The Parties expressly agree that the United Nations Convention on
Contracts for the International Sale of Goods shall not apply to this
Agreement or any Party's performance hereunder.
ARTICLE 17 - RESOLUTION OF DISPUTES
Any disputes arising from or related to this Agreement shall be resolved
in accordance with the procedures set out in Appendix C of the
Development and License Agreement between the Parties of even date.
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ARTICLE 18 - MISCELLANEOUS
18.1 NOTICES
All notices and other communications required or permitted to be given
or made pursuant to this Agreement shall be in writing signed by the
sender and shall be deemed duly given (a) on the date delivered, if
personally delivered, (b) on the date sent by telecopier with automatic
confirmation by the transmitting machine showing the proper number of
pages were transmitted without error providing such transmission was
during normal business hours on a normal business day or if not the
first normal business day thereafter, (c) on the business day after
being sent by Federal Express or another recognized overnight mail
service which utilizes a written form of receipt for next day or next
business day delivery, or (d) three (3) business days after mailing, if
mailed by United States postage-prepaid certified or registered mail,
return receipt requested, in each case addressed to the applicable party
to the address set forth below in this Section 18.1, or to such other
address as the addressee shall have last furnished in writing below;
provided that a party may change its address for receiving notice by the
proper giving of notice hereunder:
FERRING PHARMACEUTICALS INC ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
(Attention: President)
with a copy to
FERRING INTERNATIONAL CENTER SA ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Switzerland
(Att General Counsel)
VYTERIS INC ▇▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
(Attention:Chief Executive
Officer)
18.2 ASSIGNMENT
Neither party may assign this agreement to a third party without the
prior written consent of the other party. Notwithstanding the foregoing,
either party may assign its rights and obligations under this Agreement
without the consent of the other party to any company: (a) that is an
Affiliate; (b) with which it may merge or consolidate; (c) to whom it
may transfer substantially all of its assets to which this Agreement
relates; or (d) by which it may be acquired (including in each case any
company created as a new vehicle upon any such merger, transfer or
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acquisition), provided that: (1) such company undertakes directly to the
other original party under this Agreement to be bound by the terms of
this Agreement; and (2) upon such merger, transfer or acquisition, all
rights under this Agreement are also vested in such company and (3) in
the case of Vyteris such company can demonstrate to Ferring's reasonable
satisfaction that the successor company is fully capable or carrying out
Vyteris' obligations hereunder .
18.3 AMENDMENTS
No change, modification, extension, termination or waiver of this
Agreement (or its Appendices), or any of the provisions herein
contained, shall be valid unless made in writing and signed by duly
authorized representatives of the Parties hereto.
18.4 ENTIRE AGREEMENT
This Agreement and the Appendices, together with the License and all
Exhibits thereto, hereto embody the entire understanding between the
Parties and supersede any prior understanding and agreements (whether or
not in writing) between and among them respecting the subject matter
hereof. There are no other representations, agreements, arrangements or
understandings, oral or written, between the Parties hereto relating to
the subject matter of this Agreement.
18.5 SEVERABILITY
Any of the provisions of this Agreement which are determined to be
invalid or unenforceable in any jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability in such jurisdiction,
without rendering invalid or unenforceable the remaining provisions
hereof and without affecting the validity or enforceability of any of
the terms of this Agreement in any other jurisdiction.
18.6 WAIVER
The waiver by either Party hereto of any right hereunder or the failure
to perform or of a breach by the other Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by
said other Party whether of a similar nature or otherwise.
18.7 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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In Witness Whereof, the Parties have caused this Agreement to be executed by
their duly authorized representatives.
FERRING PHARMACEUTICALS INC. VYTERIS INCORPORATED
/s/ [Signature of Authorized Person] /s/ [Signature of Authorized Person]
------------------------------------ ------------------------------------
Print name: [Authorized Person] Print name: [Authorized Person]
Title: President & CEO Title: President & CEO
Date: 9/27/04 Date: 9/27/04
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APPENDIX 1 to Supply Agreement between Vyteris Incorporated and Ferring
Pharmaceuticals Inc., effective March ___, 2004
PRODUCT TRANSFER PRICES AND PAYMENT
1. PRODUCT TRANSFER PRICE
Cost Schedule for Finished Packaged Goods
The transfer price shall be based on the number of patches purchased. Price does
not include the API (to be provided by Ferring) nor packaging into Final
Commercial Product.
[*]
o Year one prices to be determined on a blended cost basis across the
relevant volume ranges
o Subsequent year prices at rate based on total annual purchase during
that year. Payment will be on the basis on forecast and any adjustment made
within thirty days of year end.
o [*]
o Minimum purchase of 250,000 patches/year.
The above prices are based on the parties' present knowledge regarding the
anticipated Product specification and configuration, and current economic
conditions. In the event that the anticipated cost to manufacture the Product
increases as a result of extraordinary increases in costs of components or
materials or changes made to the product specification or configuration such
that there is a material change in cost of manufacture, the parties shall, at
Vyteris's request, discuss and agree to a fair and equitable upward adjustment
to the transfer price schedule set forth in paragraph 1 of this Appendix.
2. MINIMUM PURCHASES
Ferring agrees to a minimum annual purchase requirement of [*]. Such requirement
shall be met at Ferring's option, either by [*]. Such payment, if any, shall be
made within 30 days after the end of the annual period.
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3. SAMPLES
Vyteris agrees to provide Ferring with Product samples at Vyteris' standard cost
through the first five years post commercial launch of the Product. Such cost
shall not exceed, however, the marginal price for that year.
4. PAYMENT
Prices payable by Ferring to Vyteris shall be paid by Ferring within 30 (thirty)
days after receipt of the invoice to be sent upon dispatch of the Products the
invoice refers to. Delays may be necessary if there are production or quality
issues that are impacting Ferring's release of the Product.
5. CURRENCY
The payments due shall be payable to Vyteris in US dollars.
6. INVOICE ADDRESS
Invoices to Ferring are to be sent to:
Ferring Pharmaceuticals Inc
Attn. Accounts Payable
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APPENDIX 2 to Supply Agreement between Vyteris Incorporated and Ferring
Pharmaceuticals Inc., effective [insert date], 2004
LOGISTIC ARRANGEMENTS
1. FORECASTS
Ferring shall provide Vyteris, no later than ten (10) business days after
Ferring's receipt of notification from the FDA that it has been approved to
market the Product in the United States (or prior to such time at Ferring's
discretion), a written non-binding rolling demand forecast for the Products
covering a period of 18 (eighteen) months and indicating the quantity of
Products that Ferring then anticipates it will require Vyteris to produce and
deliver to Ferring each month during such eighteen (18) month period ("Product
Order Forecast"). Such eighteen (18) month Product Order Forecast shall be
updated by Ferring monthly on the first day of the month on a non-binding
rolling basis.
Within 5 (five) business days after receipt of the forecast Vyteris is to
confirm its capability of delivering the Product according to the first nine
months of the forecast. Vyteris will make all efforts to meet Ferring's demand
schedule.
2. PURCHASE ORDER / ORDER CONFIRMATION
Ferring shall provide to Vyteris, at any time prior to regulatory approval to
market the Product in the United States, and no later than ten (10) business
days after such regulatory approval, an initial binding, non-cancelable purchase
order for the Products to be delivered within such reasonable time period to
which the parties may agree, specifying the desired quantity of Product, dates
for shipments and shipping instructions (a "Purchase Order"). Thereafter, firm
Purchase Orders shall be sent to Vyteris from Ferring at least four (4) months
before delivery. Vyteris is to confirm each firm Purchase Order in a written
order confirmation within 5 (five) business days after receipt of the firm
Purchase Order. Vyteris will make all efforts to meet Ferring's demand schedule.
Notwithstanding anything contained herein to the contrary, each Purchase Order
submitted by Ferring shall be for a minimum quantity of Products equal to
eighty- percent (80%) of the quantity of Products set forth in the most recent
Product Order Forecast furnished by Ferring under this paragraph 1 of this
Agreement for such calendar quarter.
Notwithstanding any other provisions of this Appendix or the Agreement, provided
that Vyteris shall have used commercially reasonable efforts to manufacture and
supply the quantity of Products ordered by Ferring, Vyteris shall have no
liability to Ferring for any failure, nor shall it constitute a breach of this
Agreement, for Vyteris to fail to supply Products under any Purchase Order
submitted by Ferring to Vyteris for any applicable calendar quarter to the
extent that such Purchase Order exceeds one hundred twenty-five
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percent (125%) of the amount of Products forecast by Ferring in the most recent
Product Order Forecast submitted by it to Vyteris for the applicable calendar
quarter. With respect to Product ordered more than twelve months after the first
commercial sale of Product for such orders that are less than 125% of Forecasat
Ferring shall be entitled to a discount of five percent (5%)per month for Late
Delivery so long as such delivery remains outstanding. "Late Delivery" in this
section means delivery more than 30 days after the committed delivery date
stated in the accepted order.
3. VYTERIS COMPONENT ORDERS
Ferring will pay for any components purchased by Vyteris in good faith as the
basis of a four month lead time and Ferring's most recent forecast to the extent
such components cannot be used for further manufacture.
4. DELIVERY TERMS
The Products are to be delivered Ex Works (INCOTERMS 2000) at Vyteris' plant;
however Vyteris shall be responsible for loading Products on to the vehicles of
Ferring's nominated carrier.
In the event of conflict, the terms of the Supply Agreement (and its appendices)
shall take precedence over Incoterms 2000.
Such title as Vyteris has in Products and risk of loss or of damage to Products
shall remain with Vyteris until Products are loaded onto the carrier's vehicle
by Vyteris for shipment at Vyteris's plant, at which time title and risk of loss
or damage shall transfer to Ferring. Ferring shall (i) arrange for shipping and
insurance, to be paid by Ferring. Products shall be transported in accordance
with the Product Specifications.
5. DELAY
In the event Vyteris cannot meet the confirmed delivery date it shall inform
Ferring in writing as early as possible before the confirmed delivery date
together with the new delivery date (or the best estimate for the new date).
6. TRANSPORT AND STORAGE OF PRODUCTS
Vyteris and Ferring will transport and store the Products based on the
appropriate storage conditions established during the Development Program.
Documents
The following documents are to be sent before delivery of the Product:
1) purchase order by Ferring
2) purchase order confirmation by Vyteris
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3) deviation report when necessary by Vyteris
4) delivery notification by Vyteris
5) Production and Packaging records
6) Vyteris Release
The following documents are to be sent together with the delivery of the
Product:
1) despatch notice by Vyteris
2) forwarding documents by Vyteris
The following documents are to be sent by separate mail.
1) invoice by Vyteris
2) Certificate of Analysis by fax to by Vyteris
Senior Manager Quality fax ▇▇▇-▇▇▇-▇▇▇▇
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APPENDIX 3 to Supply Agreement between Vyteris Incorporated and Ferring
Pharmaceuticals, Inc., effective 2004
CONTACT PERSONS
At Vyteris At Ferring
Commercial matters: Commercial matters:
President President
Vyteris Inc. Ferring Pharmaceuticals Inc.
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Fair Lawn Suffern
New Jersey 07410 ▇▇ ▇▇▇▇▇▇
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Logistic matters: Logistic matters:
Director of Materials Management Senior Management Manufacturing Services
Vyteris Inc. Ferring Pharmaceuticals Inc.
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Fair Lawn Suffern
New Jersey 07410 ▇▇ ▇▇▇▇▇▇
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Quality / Technical Quality / Technical
matters: matters:
Associate Director, Quality Assur. Senior Manager, Quality Services
Vyteris Inc. Ferring Pharmaceuticals Inc.
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Fair Lawn Suffern
New Jersey 07410 ▇▇ ▇▇▇▇▇▇
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APPENDIX 4 to Supply Agreement between Vyteris Incorporated and Ferring
Pharmaceuticals Inc., effective 2004
TECHNICAL AGREEMENT
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