EXHIBIT 10.26
SUPPLY AGREEMENT
This Agreement is made between:
ZONAGEN INC, a corporation organized and existing under the laws of Delaware,
with offices at 0000 Xxxxxxxxxx Xxxxx, B 4, The Xxxxxxxxx, XXXXX 00000, XXX
"ZONAGEN"
AND
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PLASTO S.A. (SYNKEM DIVISION), a company organized and existing under the laws
of France with registered offices at 00 Xxx xx Xxxxxxx, 00000 XXXXXXX, XXXXXX
"SYNKEM"
WHEREAS
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1) ZONAGEN owns patent rights relating to the use of phentolamine mesylate in
the treatment of erectile dysfunctions;
2) Pursuant to a contract signed in November 1995, SYNKEM supplied ZONAGEN
with three validation batches of that compound in bulk form for the purpose of
supporting an IND application.
3) ZONAGEN is now preparing the launch of the pharmaceutical product made from
that compound in several countries.
4) SYNKEM is willing to supply Phentolamine Mesylate in bulk form to ZONAGEN
upon the terms and conditions hereof.
NOW, THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
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ARTICLE 1
DEFINITIONS
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"COMPOUND" means Phentolamine Mesylate in bulk form;
"FINISHED PRODUCT" means the product in finished pharmaceutical form
manufactured from the COMPOUND supplied hereunder;
"USP/NF" means the US Pharmacopoeia-23/National Formulary-18, as may
be amended, and any succeeding regulation or law;
"FORCE MAJEURE" means, in relation to either party, any circumstances beyond
the reasonable control of that party and not caused by such
party (including, without limitation, governmental orders or
restriction, war, warlike condition, revolution, riot,
internal or external strike, lock out, other forms of
industrial action, fire, flood);
"CONTROL" means the ability to direct the affairs of another whether
by virtue of contract, ownership of shares or otherwise
ARTICLE 2
SUPPLY
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2.1 During the term of this Agreement, SYNKEM shall supply ZONAGEN
with such quantities of the COMPOUND meeting the requirements of USP/NF as will
be ordered by ZONAGEN in accordance with the provisions hereof.
2.2 Each order shall be placed by ZONAGEN no less than nine months
before the requested delivery date.
2.3 Each order shall amount to a whole number of batches of the
COMPOUND. One batch of the COMPOUND amounts to approximately 120 kg, being
understood that the precise quantity corresponding to one batch might vary
slightly from one batch to another because of differences in the yield of each
manufacturing run.
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2.4 All consignments of the COMPOUND shall be governed by the "CIP
HOUSTON" 1990 ICC INCOTERM, including, without limitation, its provisions for
the passing of risks.
2.5 Each batch of COMPOUND shall be accompanied by:
* an analytical certificate prepared by SYNKEM showing the actual
analytical data and the COMPOUND's batch number;
* a quality release statement certifying that the COMPOUND meets the
requirements of the USP/NF and that manufacturing and control records
were reviewed in accordance with GMP.
ARTICLE 3
PRICE-PAYMENT
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3.1 The price for the first 1,000 kilograms of the COMPOUND supplied
hereunder shall be US$1,800.00 per kilogram; the price for the second 1,000
kilograms of the COMPOUND supplied hereunder shall be US$1,600.00 per kilogram.
After such amounts have been delivered, the parties shall negotiate
diligently and in good faith a price for further amounts to be delivered
hereunder taking into account changes in the dollar/franc exchange rate, changes
in the costs of production and prices charged by third parties for the COMPOUND.
If despite such good faith negotiations the parties are unable to agree upon a
price, either party may terminate this Agreement by notifying the other party in
writing.
Notwithstanding the above provisions: (i) SYNKEM may at any time
request good faith renegotiation of the supply price if the exchange rate
between USD and FRF falls short of FRF 5.50 to USD 1 according to the latest
monthly average rate quoted by BFCE Multidevise Database. If despite such good
faith negotiations the parties are unable to agree upon a price, either party
may terminate this Agreement by notifying the other party in writing.
(ii) ZONAGEN may at any time request good faith renegotiation of the
supply price if the exchange rate between USD and FRF exceeds FRF 6 to USD 1
according to the latest monthly average rate quoted by BFCE Multidevise
Database. If despite such good faith negotiations the parties are unable to
agree upon a price, either party may terminate this Agreement by notifying the
other party in writing.
3.2 ZONAGEN shall pay each consignment of the COMPOUND by bank
transfer in US Dollars:
* 25% shall be paid upon ordering the relevant consignment of COMPOUND;
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* 75% shall be paid within 30 calendar days of the end of the month
during which the relevant invoice was received. If ZONAGEN has not
received the COMPOUND consignment by the time the relevant invoice is
due to be paid, payment may be postponed by ZONAGEN until it receives
the relevant COMPOUND consignment but in no case shall such delay in
payment exceed thirty calendar days from the date payment was
initially due.
ARTICLE 4
EXCLUSIVE RIGHTS
----------------
4.1 During the term of this Agreement, SYNKEM shall refrain from
entering into agreements to directly or indirectly supply the COMPOUND to a
third party.
4.2 During the term of this Agreement, ZONAGEN shall purchase all its
requirements of the COMPOUND from SYNKEM and shall refrain from manufacturing
the COMPOUND or having the same manufactured by a third party.
Notwithstanding the foregoing, if at any time and for any reason
SYNKEM is unable to supply ZONAGEN with sufficient COMPOUND to satisfy ZONAGEN's
requirements, ZONAGEN may purchase from third parties any amount of COMPOUND it
requires in excess of that which can be supplied by SYNKEM.
ARTICLE 5
MINIMUM PURCHASE REQUIREMENTS
-----------------------------
For each calendar year during the term of this Agreement, ZONAGEN
commits itself to purchase the following minimal amounts of the COMPOUND from
SYNKEM:
1997: one (1) batch
1998: two (2) batches
ZONAGEN shall place orders totaling a minimum of 1000 Kilograms of the
COMPOUND (including the amounts ordered in 1997 and 1998) by no later
than June 30, 1999.
2000 and 2001: three (3) batches per calendar year; if for any
reason, ZONAGEN does not wish to be supplied with all or part of such
quantities of the COMPOUND, it shall pay to SYNKEM the sum
corresponding to the number of kilograms concerned multiplied by the
then applicable supply price.
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ARTICLE 6
MANUFACTURING REQUIREMENTS
--------------------------
6.1 SYNKEM shall manufacture the COMPOUND in accordance with cGMP.
6.2 SYNKEM shall retain a sample of each batch of COMPOUND produced
and, upon request, shall make such sample available to ZONAGEN. The retained
sample shall consist of at least twice the quantity necessary for all tests
required to determine whether the COMPOUND meets the requirements of the USP/NF.
The retained sample shall be kept under the same conditions as those under which
stocks of the COMPOUND are stored in SYNKEM's facilities.
For each batch, the sample shall be retained by SYNKEM for a period
expiring at the earliest one year after the expiration date of the last lot of
FINISHED PRODUCT containing that batch of the COMPOUND.
6.3 SYNKEM shall maintain records to ensure its ability to perform a
complete lot history via lot tracing of the COMPOUND.
6.4 SYNKEM shall keep on file all manufacturing records and
analytical results pertaining to the manufacture of each batch of the COMPOUND
for a period expiring not earlier than one year after the expiration date of the
last lot of FINISHED PRODUCT manufactured with that batch of COMPOUND. SYNKEM
shall make such records available to ZONAGEN or regulatory authorities for
inspection on request.
ARTICLE 7
REGULATORY OBLIGATIONS
----------------------
7.1 Upon request, SYNKEM shall issue letters authorizing registration
authorities to cross-refer to Drug Master Files ("DMFs") relating to the
COMPOUND under the possession or control of SYNKEM which are submitted to
governmental authorities for SYNKEM's manufacturing site(s). SYNKEM shall keep
such DMFs up to date.
7.2 If requested by regulatory authorities or by ZONAGEN, SYNKEM
shall accept and permit an inspection, at reasonable time and upon reasonable
prior notice, of its facilities where the COMPOUND is manufactured or stored and
of the manufacturing records pertaining to the manufacture of the COMPOUND.
7.3 Regarding inspections requested and made by ZONAGEN:
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* ZONAGEN shall, before making any such inspection, give full
details of the reason of such inspection and of all matters which
will be dealt with during such inspection. This information
shall be provided to SYNKEM in written form.
* Any information which may come to ZONAGEN's knowledge during such
inspection shall be subject to the secrecy provisions of Article
14.
ARTICLE 8
WARRANTY, LIABILITY AND INDEMNIFICATION
---------------------------------------
8.1 SYNKEM warrants that the COMPOUND manufactured and supplied
hereunder shall meet the requirements of the USP/NF. SYNKEM DISCLAIMS ALL OTHER
WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE
WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.
8.2 Subject to Clause 8.3, ZONAGEN's EXCLUSIVE REMEDY FOR ANY FAILURE
OF THE COMPOUND TO MEET THE REQUIREMENTS OF THE USP/NF SHALL BE THE REPLACEMENT
OR REFUND PURSUANT TO CLAUSE 9.2. IN NO CASE SHALL SYNKEM BE LIABLE TO ZONAGEN
FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
8.3 a) SYNKEM shall indemnify and hold ZONAGEN harmless from and
against any and all liability, damage, cost or expense (including reasonable
attorneys' fees) arising out of third party claims based upon failure by SYNKEM
to supply COMPOUND in accordance with the specifications set forth in the
USP/NF, such failure to be acknowledged as the cause of the third party's damage
by a court of competent jurisdiction, an arbitrator appointed pursuant to
Article 17 or the parties hereto by mutual written agreement.
b) SYNKEM shall not be liable hereunder for failure of the COMPOUND
to meet the specifications set forth in the USP/NF if ZONAGEN has not tested the
COMPOUND pursuant to Clause 9.1 before using the same or selling the FINISHED
PRODUCT made from the COMPOUND or if, despite such tests evidencing a failure of
COMPOUND to meet such specifications, ZONAGEN has decided to use it or sell the
FINISHED PRODUCT made from such COMPOUND.
8.4 ZONAGEN shall indemnify and hold SYNKEM harmless from and against
any and all liability, damage, cost and expenses (including reasonable
attorneys' fees) arising out of third party claims other than those based upon
failure by SYNKEM to supply COMPOUND in accordance with the specifications set
forth in the USP/NF, including without limitation faulty
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manufacture, labeling or promotion of the FINISHED PRODUCT by ZONAGEN or its sub
contractors or licensees.
8.5 ZONAGEN warrants and represents that the manufacture and supply
of COMPOUND hereunder shall not infringe any patent and ZONAGEN shall indemnify
and hold SYNKEM harmless against all judgements, decrees, cost and expenses
(including reasonable attorneys' fees) resulting from any alleged infringement.
However, this shall not apply if and to the extent that the manufacturing
process (or portion thereof) has been designed by SYNKEM and infringes a third
party patent claiming such process.
8.6 IN NO CASE SHALL ZONAGEN BE LIABLE TO SYNKEM FOR INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES.
8.7 THE EXCLUSION OF INDIRECT, INCIDENTAL AND CONSEQUENTIAL DAMAGES
SET FORTH IN CLAUSES 8.2 AND 8.6 SHALL NOT APPLY IN THE CASE OF THIRD PARTY
CLAIMS AS PROVIDED FOR IN THE HOLD HARMLESS PROVISIONS CONTAINED IN CLAUSES
8.3(a), 8.4 and 8.5.
8.8 The indemnities set forth in this Article 8 are subject to the
condition that the party seeking indemnity notifies the other party (the
"Indemnifying Party") without delay of the bringing or threat of any claim or
legal proceedings against or involving or implicating the Indemnifying Party
and:
a) abide by such reasonable instructions as the Indemnifying Party
may issue concerning the conduct of such claim or the defense of such
proceedings; and
b) does not make without the Indemnifying Party's express written
consent any admission of liability to a claimant or plaintiff or his, her
or its legal representative or insurer in respect of such claim, threatened
claim, proceedings or threatened proceedings; and
c) does not make without the Indemnifying Party's express written
consent any settlement or compromise of such claim, threatened claim,
proceedings or threatened proceedings.
ARTICLE 9
DEFECTIVE COMPOUND
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9.1 a) Upon delivery, ZONAGEN shall inspect the COMPOUND according
to the relevant analytical methods set forth in the USP/NF. If the COMPOUND
delivered does not conform with the specifications of the USP/NF, ZONAGEN may
reject such COMPOUND by notifying SYNKEM within thirty days from the date of
delivery to ZONAGEN.
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b) Hidden defects not revealed by the above inspection which cause
the COMPOUND not to conform with the specifications of the USP/NF shall be
notified to SYNKEM immediately upon discovery. In such event, ZONAGEN may
reject such COMPOUND by notifying SYNKEM within thirty (30) days from the date
of such discovery.
9.2 After the consultation and agreement among the parties, the
quantity of COMPOUND which was rejected under Clause 9.1 ("Defective COMPOUND")
shall be replaced by SYNKEM with the same quantity of COMPOUND which meets the
specifications of the USP/NF by one of the following procedures which is
acceptable to ZONAGEN:
a) SYNKEM shall, at no additional cost to ZONAGEN, reprocess the
Defective COMPOUND within such period of time as will be reasonably agreed
upon by the parties by following a reworking procedure acceptable to
ZONAGEN and in compliance with SYNKEM's DMF for the COMPOUND.
Any loss of COMPOUND resulting from this procedure shall, if such
substance had been already paid by ZONAGEN, be replaced by an equivalent
quantity of new COMPOUND which conforms with the specifications of the
USP/NF or give rise to a compensation by SYNKEM for the COMPOUND lost at
the applicable price (as specified in Clause 3.1), at ZONAGEN's option.
b) SYNKEM shall carry out new production of the COMPOUND at no
additional cost to ZONAGEN within such period of time as will be reasonably
agreed upon by the parties.
c) In the event that ZONAGEN destroys or disposes of the defective
COMPOUND (or FINISHED PRODUCT containing the defective COMPOUND), this
shall be done in full compliance with local and national laws and
regulations.
ARTICLE 10
INSURANCE
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10.1 At all times this contract is in effect, each of ZONAGEN and
SYNKEM shall maintain product liability insurance in an amount of not less than
ten million dollars (USD 10,000,000) in the case of ZONAGEN or one hundred and
fifty million French Francs (FF 150,000,000) in the case of SYNKEM so as to
cover any liability it may incur pursuant to Article 8.
10.2 Each party hereto shall upon request at all reasonable times
provide the other with a certificate of insurance as evidence of such insurance.
In the event that such insurance is
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significantly reduced or restricted, terminated or otherwise not renewed, the
affected party shall immediately notify the other.
ARTICLE 11
TERM
----
This Agreement shall come into effect on the date of its complete
signature by both parties and, subject to the provisions for anticipatory
termination herein contained, shall remain in force for an initial term of five
years.
It shall thereafter continue for consecutive one year periods unless
and until terminated by either party giving not less than twelve (12) months'
prior written notice, such notice to be effective at the end of the initial term
or at the end of any subsequent one year term.
ARTICLE 12
ANTICIPATORY TERMINATION
------------------------
12.1 If either party shall at any time fail to abide by any of the
provisions of this Agreement, the other party shall have the right to terminate
this Agreement on thirty (30) days' prior written notice to the defaulting party
specifying the default complained of, provided, however, if said defaulting
party cures the default complained of within the said thirty (30) day period,
the Agreement will continue in full force and effect as if no default had
occurred.
12.2 Either party may terminate this Agreement at any time by giving
written notice with immediate effect to the other party if:
a) the other party is declared bankrupt or insolvent. or makes an
assignment for the benefit of creditors, or if a receiver is appointed, or
any procedures are commenced, voluntary or involuntarily, by or against a
party under any bankruptcy or similar law and such procedure is not
dismissed within sixty days of its commencement; or if
b) there is a change in CONTROL of the other party.
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ARTICLE 13
CONSEQUENCES OF TERMINATION
---------------------------
Upon termination of this Agreement pursuant to its provisions or the
provisions of the applicable law:
13.1 SYNKEM shall manufacture and supply those quantities of the
COMPOUND ordered by ZONAGEN prior to such termination and ZONAGEN shall pay the
relevant price for such COMPOUND;
13.2 The parties shall be relieved from the exclusivity obligations
set forth in Article 4.
13.3 Termination shall be without prejudice to (i) any remedies which
either party may then or thereafter have under this Agreement or at law or in
equity (including without limitation possible damages) and (ii) either party's
right to obtain performance of any obligation provided for in this Agreement
which survives termination by its terms or by a fair interpretation thereof.
13.4 Termination shall not relieve the parties of their obligations
that would survive termination by a reasonable interpretation of this Agreement
including Articles 8, 14 and 17.
ARTICLE 14
SECRECY
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14.1 Each party hereto ("RECIPIENT") agrees that, during the
continuance of this Agreement and for five years after termination hereof for
any reason, it will (i) maintain the confidentiality of any and all proprietary
or confidential information disclosed by the other party ("DISCLOSER") and (ii)
refrain from using the same except for the purpose of implementing this
Agreement, unless that information (i) is or becomes public knowledge through no
breach hereof or (ii) was in RECIPIENT's possession prior to disclosure by
DISCLOSER and was not obtained directly or indirectly from DISCLOSER or (iii) is
lawfully acquired from a third party who did not obtain it directly or
indirectly from DISCLOSER.
14.2 RECIPIENT shall, on demand on termination of this Agreement for
any reason provided by this Agreement or by law, return to DISCLOSER all
documents and other tangible mediums of expression embodying DISCLOSER's
INFORMATION and shall keep no summary or copy thereof except for one copy to be
retained in DISCLOSER's confidential files for evidence purposes.
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ARTICLE 15
FORCE MAJEURE
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15.1 Should either party be affected by FORCE MAJEURE, it shall
without delay notify the other party of the nature and extent thereof.
15.2 Neither party shall be deemed to be in breach of this Agreement
or otherwise be liable to the other by reason of any delay in performance, or
non-performance, of any of its obligations hereunder to the extent that such
delay or non-performance, is due to any recognized FORCE MAJEURE of which it has
notified the other party, and the time of performance for that obligation shall
be extended accordingly.
ARTICLE 16
GOVERNING LAW
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This Agreement shall be governed by and construed in accordance with
the laws of the state of New York without reference to choice of law principles.
For the avoidance of doubt, the UN Convention on international sale of goods
shall not govern this Agreement.
ARTICLE 17
ARBITRATION
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Any claim, controversy or dispute arising between the parties hereto
in connection with or with respect to the subject matter hereof which is not
resolved through mutual good faith efforts and negotiation shall be settled by
final and binding arbitration conducted in New York City in accordance with and
by one arbitrator appointed pursuant to the Rules of Arbitration of the
International Chamber of Commerce then in effect, and judgment upon the award
rendered pursuant thereto may be entered in any court having jurisdiction
thereof, and all rights and remedies of the parties hereto to the contrary are
hereby expressly waived. Neither party shall seek, nor shall the arbitrator be
empowered to award, punitive and/or exemplary damages to either party. Each of
the parties acknowledges that New York City is a convenient forum. The
arbitrator shall have the power to apportion the costs and expenses of the
arbitrator as well as out of pocket, legal, accounting and/or other direct costs
relating or incident to an arbitration hereunder between the parties in such
percentages as the arbitrator may determine, including without limitation,
charging the non-prevailing party with the full amount of such costs and
expenses.
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ARTICLE 18
ENTIRE AGREEMENT
----------------
18.1 This Agreement shall exclude all of SYNKEM's general terms and
conditions of supply and all of ZONAGEN's general terms and conditions of
purchase.
18.2 This Agreement expresses the entire understanding of the parties
with respect to the subject matter hereof and supersedes all prior offers,
negotiations, agreements and correspondence. For the avoidance of doubt the
Secrecy Agreement of September 14, 1994 between ZONAGEN and LABORATORIES
XXXXXXXX S.C.A. is not affected by this Agreement.
ARTICLE 19
ASSIGNMENT
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No party hereto may assign its rights or obligations hereunder without
prior written consent of the other party.
ARTICLE 20
AMENDMENTS
No amendment, changes, modifications or alterations of the terms and
conditions of this Agreement shall be effective unless in writing and duly
executed by both parties.
ARTICLE 21
NOTICES
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Any notices or other communication to be given by one party to the
other pursuant to this Agreement shall be in writing and shall be given by
sending the same by registered letter, express courier, telex, cable or
facsimile transmission to the address of the relevant party as set out below or
such other address as the addressee may notify the addressor in writing from
time to time.
PLASTO SA (SYNKEM DIVISION) ZONAGEN INC
00 xxx xx Xxxxxxx 0000 Xxxxxxxxxx Xxxxx, X 4
21300 CHENOVE The Xxxxxxxxx, XXXXX 00000
XXXXXX XXX
Fax: x00.0.00.00.00.00 Fax: x0.000.000.0000
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ARTICLE 22
SEVERABILITY
------------
Should any part of this Supply Agreement be held unenforceable or in
conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provision shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such invalid or unenforceable part or provision in a commercially reasonable,
valid and enforceable manner, and the remainder of this Supply Agreement shall
remain binding upon the parties hereto.
ARTICLE 23
COUNTERPARTS
------------
This Agreement has been executed in two counterparts, each of which is
deemed an original and all of which together constitute one and the same
agreement.
ARTICLE 24
BINDING EFFECT
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Subject to the provisions of this Agreement, this Agreement shall be
binding upon and shall inure to the benefit of the parties, their respective
heirs, successors and assigns.
ARTICLE 25
GENERAL PROVISIONS
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25.1 Failure by either party to respond to any proposal or statement
made by the other party shall not be deemed to be consent thereto nor operate so
as to modify the nature, effects or extent of any obligation under this
Agreement.
25.2 Failure by either party to exercise or enforce any right
conferred to it by this Agreement shall not be considered a waiver nor operate
so as to preclude the exercise or enforcement thereof at any subsequent time or
on any subsequent occasion.
25.3 This document is not an offer and shall not constitute a contract
unless signed by both parties.
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25.4 Unless the context otherwise requires, the words in singular
shall be deemed to include the plural and vice-versa.
25.5 Title headings have been inserted for convenience only and shall
not be used in interpreting this Agreement.
MADE IN DUPLICATE
ZONAGEN INC. PLASTO S.A. (SYNKEM DIVISION)
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Date:________________________ Date:__________________________________
Signature:___________________ Signature:_____________________________
Name:________________________ Name:__________________________________
Position:____________________ Position:______________________________
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