Exhibit 10.93
MANUFACTURING AND SUPPLY AGREEMENT
This Manufacturing and Supply Agreement (the "Agreement"), dated as
of ______________, 2002, is entered into by and among IGI, Inc., a Delaware
corporation ("IGI"), Igen, Inc., a Delaware corporation ("Igen") (IGI and
Igen, collectively, the "Suppliers" and each a "Supplier"), and Vetoquinol,
U.S.A., Inc., a Delaware corporation (the "Purchaser").
R E C I T A L S
WHEREAS, the Suppliers are in the business of the production and
marketing of products in the animal health business, such as
pharmaceuticals, nutritional supplements and grooming aids and formulations
under the names EVSCO Pharmaceuticals, Tomlyn and Luv'Em, among others
(collectively, the "Pet Business");
WHEREAS, the Purchaser and IGI have entered into that certain Asset
Purchase Agreement (the "Purchase Agreement"), dated as of February 6,
2002, pursuant to which the Purchaser has agreed to purchase, and IGI has
agreed to sell the Purchased Assets (as defined in the Purchase Agreement)
as further set forth in the Purchase Agreement;
WHEREAS, certain products manufactured, marketed or sold by the Pet
Business incorporate Novasome Technology in a form manufactured by the
Suppliers;
WHEREAS, Section 2.02 of the Purchase Agreement provides that IGI,
Igen and the Purchaser will each execute and deliver to each other this
Agreement at the Closing (as defined in the Purchase Agreement);
WHEREAS, the Suppliers desire to supply the Purchaser with certain
products incorporating Novasome Technology on the terms and conditions set
forth in this Agreement;
WHEREAS, the Purchaser desires to have the Suppliers supply to it
such products on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the above premises and the mutual
agreement set forth herein, the parties agree as follows:
1. Definitions. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meaning set forth below.
"Change of Control" means, with respect to any person (the "Target"),
the sale, transfer or other disposition of all or substantially all of such
Target's assets to one or more other persons (the "Acquiror") in a single
transaction or series of related transactions, unless securities possessing
more than 50% of the total combined voting power of the Acquiror's
outstanding securities (or the securities of any parent thereof) are held
by a person or persons who held securities possessing more than 50% of the
total combined voting power of the Target immediately prior to that
transaction.
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"Field" means the manufacture, packaging, marketing, selling or other
distribution of products for use in the animal health business.
"Force Majeure" means any event beyond the control of the parties,
including, without limitation, fire, flood, riots, strikes, epidemics, war
(declared or undeclared and including the continuance, expansion or new
outbreak of any war or conflict now in existence), acts of terrorism and
responses thereto, shortages, scarcities, embargoes and governmental
actions or decrees.
"IGI-Novasome Products" means those products by which Novasome
Technology is included by the Suppliers in the Technology Products as of
the date hereof (or in the case of Technology Products whose distribution
was discontinued prior to the date hereof, on such date of discontinuance),
including, but not limited to, those set forth on Exhibit A attached
hereto.
"License Agreement" means that certain License Agreement, dated
December 13, 1995 by and between Micro-Pak, Inc., a Delaware corporation
("Micro-Pak"), and Igen.
"Novasome Technology" means any technology, intellectual property,
trade secrets, processes and other property licensed, provided or used or
permitted to be licensed, provided or used under the License Agreement that
was used in any products of the Pet Business on or prior to the Closing
Date of the Purchase Agreement.
"person" (regardless of whether capitalized) means any natural
person, entity, or association, including any corporation, partnership,
limited liability company, government (or agency or subdivision thereof),
trust, joint venture, or proprietorship.
"Related Technology" means any new technology or product
incorporating Novasome Technology developed solely by or for IGI or any of
its wholly-owned subsidiaries (and no other person other than IGI or any of
its wholly-owned subsidiaries), which technology IGI desires to use in the
Field.
"Technology Products" means all product lines or product categories
in the field known as:
(i) shampoos, if such products contain any of the active
ingredients contained in any products of the Pet Business that are
shampoos that exist on the date hereof or existed at any time prior
hereto;
(ii) creme rinses, if such products contain any of the active
ingredients contained in any products of the Pet Business that are
creme rinses that exist on the date hereof or existed at any time
prior hereto;
(iii) moisturizing sprays or ear cleansers, to the extent such
sprays or ear cleansers, as the case may be, are formulated with 100%
Novasome Technology; and
(iv) hand cremes.
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A product which is a Technology Product shall cease to be a Technology
Product if the Novasome Technology in its formulation is reduced to a
de minimis amount compared to the amount of Novasome Technology in its
formulation in effect on the date hereof (or, if the product has been
discontinued prior to the date hereof, its formulation on the date that its
use was discontinued).
2. Supply of Products; Forecasts and Orders.
2.1. General. Subject to the terms and conditions of this Agreement,
the Suppliers shall sell to the Purchaser, and the Purchaser shall purchase
from the Suppliers, the IGI-Novasome Products, in such quantities and at
such times as ordered by the Purchaser in accordance with Section 2 hereof.
The Suppliers shall use commercially reasonable efforts to maintain
manufacturing capacity sufficient to meet the Purchaser's needs on a timely
basis. In the event of any shortage of any raw materials or supplies
required by the Suppliers to manufacture the IGI-Novasome Products forecast
under Section 2.2, the Suppliers shall assure that the Purchaser's Orders
for the IGI-Novasome Products are fulfilled on a pro rata basis, based upon
the available raw materials and supplies and the other needs, requirements
and commitments of the Suppliers (including, without limitation, the
manufacture, production and supply of products for the Suppliers' use in
the Suppliers' businesses) for such raw materials and supplies.
2.2. Forecasts. Promptly after the Effective Date, the Purchaser
shall provide the Suppliers with a written forecast of its estimated
purchases of each IGI-Novasome Product for the next three (3) months.
Suppliers shall use reasonable commercial efforts to fill Orders that are
consistent with such forecast. On the 15th day of every month commencing
with the second month after the Effective Date, the Purchaser shall provide
the Suppliers with a written forecast of the Purchaser's estimated
purchases of IGI-Novasome Products during each month of the 3-month period
beginning with the second month following the month in which the forecast
is given. For example, on January 15th the Purchaser would give a forecast
of the months of March, April and May. On February 15th the Purchaser would
give a forecast for the months of April, May and June. The last forecast in
which a month is included shall constitute a binding commitment to purchase
in such month, at the minimum, 75% of the estimated purchases of each IGI-
Novasome Product set forth in such forecast with respect to such month. For
example, the month of May would be included in forecasts given on
January 15th , February 15th and March 15th. The forecast for May included in
the March 15th forecast would be binding on the Purchaser to the extent
provided above. In no event will the Suppliers be required to supply,
otherwise provide or sell to the Purchaser with respect to any month any
IGI-Novasome Products in excess of the amount for such IGI-Novasome
Products set forth in the binding forecast provided by the Purchaser to the
Suppliers under this Section 2.2 for such month.
2.3. Orders. Orders to purchase the IGI-Novasome Products under this
Agreement ("Orders") shall be made in writing and submitted by mail,
facsimile, electronic mail or other means agreed upon by the parties. Each
order must specify the quantity of each IGI-Novasome Product being ordered
and the delivery dates therefor. All orders shall reference and incorporate
the terms and conditions set forth in this Agreement. The quantity for each
IGI-Novasome Product ordered in any Order shall be set in whole number
units of 2,000 kilogram batch sizes, with a minimum order of one 2,000
kilogram batch size. No Order shall
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set a delivery date for less than forty-five (45) days after the date that
such Order is delivered to the Suppliers.
2.4. Specifications. During the Term, the Suppliers shall assure
that the IGI-Novasome Products shall conform in all material respects to
those formulations and specifications for IGI-Novasome Products utilized by
the Suppliers in their conduct of the Pet Business on the date of the
Purchase Agreement and on the date hereof (collectively, the
"Specifications"). The Specifications are described in Exhibit B attached
hereto. Except as may be required by Sections 2.5 and 5, no change shall be
made to the Specifications without the Purchaser's prior written consent.
2.5. Compliance. The Suppliers shall comply with all applicable laws
and regulations, and all approvals and permits maintained by it, if any,
with respect to the manufacture, sale and delivery of IGI-Novasome Products
under this Agreement.
3. Delivery; Acceptance and Rejection; Payment.
3.1. Deliveries. The Suppliers shall deliver all IGI-Novasome
Products specified under each Order, f.o.b. the Suppliers' plant in Buena,
New Jersey (or such other location in the United States as the Suppliers
may designate to the Purchaser in writing). In the event that the Suppliers
are, or may become, unable to timely fill any Order for any reason, the
Suppliers shall promptly notify the Purchaser of such inability.
3.2. Right to Reject Delivery. Upon receipt of any delivery of IGI-
Novasome Products hereunder, the Purchaser shall make or cause to be made
such inspection and tests of the IGI-Novasome Products as the Purchaser
shall deem reasonably necessary to determine whether or not such IGI-
Novasome Products conform to the Specifications and the Purchaser's Order.
In the event any IGI-Novasome Product fails to so conform, before using the
IGI-Novasome Product, the Purchaser shall give the Suppliers written notice
of such failure (which notice shall describe the specific failure to
conform) within sixty (60) days after the date of delivery of the IGI-
Novasome Product to the Purchaser, and at the Purchaser's election, the
Suppliers shall promptly either (i) replace the nonconforming IGI-Novasome
Product(s) within thirty (30) days after receipt of such notice from the
Purchaser, or (ii) issue to the Purchaser a credit in the amount of the
Manufacturing Fee applicable to the of the nonconforming IGI-Novasome
Product(s) plus applicable taxes and costs, to the extent such
Manufacturing Fee, taxes and costs have been paid by the Purchaser. In the
case of either replacement or credit pursuant to the preceding clauses (i)
and (ii), the Purchaser shall promptly return to the Suppliers the
nonconforming IGI-Novasome Product at the Supplier's cost.
3.3. Payment. During the Term, the Purchaser shall pay to IGI,
within thirty (30) days of delivery of a shipment of IGI-Novasome Products
under an Order, on an order-by-order basis, a manufacturing fee (the
"Manufacturing Fee") for each IGI-Novasome Product as specified in Exhibit
A attached hereto; provided, however, that the Purchaser shall not pay any
Manufacturing Fee for any IGI-Novasome Product(s) that are rejected by the
Purchaser pursuant to Section 3.2 unless such IGI-Novasome Product(s) are
replaced or credited by the Suppliers pursuant to Section 3.2. All payments
made by the Purchaser under this Section 3.3 shall be made in U.S. Dollars.
The Manufacturing Fee for each IGI-Novasome Product set forth in
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Exhibit A shall govern through the date three (3) years subsequent to the
date of this Agreement, subject to increase on an annual basis by a
percentage equal to twenty percent of the percentage by which the Producer
Price Index published by the United States Department of Labor as may be
applicable to the State of New Jersey (the "PPI") has increased during such
annual period. Thereafter such Manufacturing Fee shall be subject to
increase on an annual basis by a percentage equal to the percentage by
which the PPI has increased during such annual period. For any new products
or reformulation of old products, the parties will negotiate in good faith
a fee to be paid to IGI. In the event the parties are not able to come to
terms on such a fee, the Suppliers shall have no obligation to supply,
otherwise provide or sell to the Purchaser any such new products or
reformulations of old products and shall have no liability to the Purchaser
with respect thereto. Notwithstanding anything in this Agreement to the
contrary, the Suppliers shall not be under any obligation to supply IGI-
Novasome Products to the Purchaser during any period when any material
portion of the Manufacturing Fee has not been paid when due, provided that
any portion of the Manufacturing Fee as to which there exists a bona fide
dispute between the Purchaser and the Suppliers shall not be deemed unpaid
for the purposes of this sentence.
4. Use of IGI-Novasome Products; Access to Related Technology.
4.1. Use of IGI-Novasome Products. The Purchaser shall use the IGI-
Novasome Products purchased from the Suppliers pursuant to this Agreement
only in connection with the manufacture, packaging, marketing, sale or
other distribution by the Purchaser, its successors, assigns or licensees
of Technology Products in the Field. The Purchaser and the Suppliers shall
negotiate in good faith the terms and conditions upon which Supplier will
supply IGI-Novasome Products to the Purchaser for any other purpose. In the
event the parties are not able to agree as to the supply of IGI-Novasome
Products for another purpose, the Suppliers shall have no obligation to
supply, otherwise provide or sell to the Purchaser IGI-Novasome Products
for such purpose.
4.2. Technology. Subject to the provisions of this Section 4.2, the
Purchaser shall have the first right of negotiation to become the exclusive
purchaser from the Suppliers of any Related Technology. Upon the
determination by IGI or any of its wholly-owned subsidiaries to market for
commercial use of any Related Technology, the Suppliers shall promptly
notify the Purchaser in writing of the existence thereof (the "Related
Technology Notice"), and the parties hereby agree to negotiate in good
faith with respect to mutually acceptable terms, including distribution and
pricing terms, relating to the potential marketing and/or use of such
Related Technology. Any Related Technology Notice and the contents thereof
shall be held by the Purchaser in the strictest confidence, and the
negotiations described in the previous sentence shall be conducted only to
the extent covered by a confidentiality agreement in a form reasonably
agreeable to both parties. In the event that the Suppliers and the
Purchaser are unable to reach a mutually satisfactory agreement regarding
any Related Technology within 90 days of the Related Technology Notice, the
Suppliers shall be free to offer such Related Technology to others and will
have no liability to the Purchaser with respect thereto under this
Agreement. Notwithstanding the foregoing, the Suppliers are not required to
disclose to the Purchaser, or provide to the Purchaser any opportunity to
negotiate to purchase or market, any technology developed by the Suppliers
pursuant to a contract or venture or other understanding, arrangement or
agreement with a third party (such technology, the "Unrelated Technology").
Any use or
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licensing of the Unrelated Technology, or the manufacture or supply of any
products that contain or are based on the Unrelated Technology by the
Suppliers shall not violate this Section 4.2.
5. Regulatory, Trademark, Licensing and Patent Matters. The
Suppliers hereby represent and warrant that they have obtained and will
maintain all material regulatory approvals that are necessary for
manufacturing the IGI-Novasome Products.
6. Term and Termination.
6.1. Term. The term of the Suppliers obligations to supply IGI-
Novasome Products to the Purchaser hereunder will commence on the date
hereof (the "Effective Date"), and, unless sooner terminated as provided in
Section 6.2 hereof, will remain in force until December 13, 2015.
6.2. Termination. This agreement may be terminated as follows:
(a) Either Supplier shall have the right to terminate this
Agreement (including any pending orders placed by the Purchaser)
immediately upon written notice to the Purchaser in the event the Purchaser
files or has filed against it, any petition in a bankruptcy or similar
proceeding.
(b) The Purchaser shall have the right to terminate this Agreement
(including any pending orders placed by the Purchaser) immediately upon
written notice to either Supplier in the event that either Supplier files
or has filed against it any petition in a bankruptcy or similar proceeding.
(c) The Suppliers may only terminate this Agreement immediately if
Purchaser fails to perform any of its material obligations under this
Agreement and such nonperformance continues for more than sixty (60) days
after written notice is received by Purchaser.
(d) The Purchaser may terminate this Agreement immediately if any
representation or warranty of any Supplier is materially inaccurate or if
the Suppliers fail to perform any of their material obligations under this
Agreement and such nonperformance continues for a period of sixty (60) days
after written notice is received by the Suppliers.
(e) If the manufacture, sale or distribution of any of the IGI-
Novasome Products is prohibited by applicable laws, rules or regulations in
effect from time to time, then either of the Suppliers, or the Purchaser,
as the case may be, may immediately terminate this Agreement at any time;
provided that if such prohibition relates to less than all of the
Technology Products, any such termination shall relate only to the
Technology Products with respect to which the manufacture, sale or
distribution of IGI-Novasome Products is prohibited, and this Agreement
shall remain in effect with respect to the Technology Products with respect
to which the manufacture, sale or distribution of IGI-Novasome Products is
not prohibited.
(f) The Purchaser may terminate this Agreement for any other reason
with a minimum of six (6) months notice of intent to terminate except as
otherwise provided herein.
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6.3. Effects of Termination. On the date that this Agreement is
terminated pursuant to any of the provisions of Section 6.2 (the
"Termination Date"), the following shall occur: (i) the Purchaser shall be
required to pay to the Suppliers, within a reasonable time following the
Termination Date, any Manufacturing Fees incurred as a result of Orders
placed prior to, but not after, the Termination Date, and (ii) any and all
IGI-Novasome Products manufactured by the Suppliers in response to an Order
made by the Purchaser prior to the Termination Date shall be delivered by
the Suppliers to the Purchaser pursuant to the terms of such Order.
7. Warranties. All products formulated by the Suppliers, and all
labeling provided by the Suppliers shall be subject to IGI's standard
warranty that the IGI-Novasome Products meet the Specifications, and are
manufactured in accordance with approved processes and comply with all
applicable bulk manufacturing, federal, state and local regulatory
requirements. The warranty provisions in this Section 7 provide the
exclusive warranties for any product supplied, otherwise provided or sold
by the Suppliers to the Purchaser under this Agreement. No other warranty,
express or implied, shall apply to any such products. The Suppliers
specifically disclaim all implied warranties of merchantability, fitness
for a particular purpose and noninfringement.
8. Insurance. The Suppliers shall maintain general liability
insurance, with products liability coverage, in such amounts and upon such
terms as the Suppliers deem advisable, but in any event not less than two
million dollars ($2,000,000) in coverage. Upon reasonable request from time
to time, the Suppliers shall provide the Purchaser with evidence of such
insurance.
9. Notices. All notices, requests, claims, demands and other
communications required or permitted to be given under this Agreement shall
be in writing and shall be delivered by hand or sent by confirmed facsimile
or email (with the original to follow by first class mail, postage prepaid)
or sent, postage prepaid, by registered or certified mail or
internationally recognized express courier service and shall be deemed
given when so delivered by hand, email or facsimile or if mailed, five (5)
days after mailing (two (2) business day in the case of overnight courier
service) at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to the Buyer, to
VETOQUINOL U.S.A., Inc.
2000 Chemin Georges
Lavaltrie, Quebec
Canada J0K 1H0
Attention: Normand Robichaud
Telephone: 450-586-2252
Facsimile: 450-586-2511
Email: nrobichaud@vetoquinol.ca
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With a copy to:
VETOQUINOL S.A.
Laboratoire Vetoquinol
34, rue du Chene Sainte-Anne
70200, Magny-Vernois, France
Attention: Directeur General
Telephone: 011-333-8462-5555
Facsimile: 011-333-8462-5509
Email: dg@vetoquinol.com
(b) if to a Seller, to
IGI, Inc.
Wheat Road & Lincoln Avenue
P.O. Box 687
Buena, NJ 08310-0687
Attention: John Ambrose
Telephone: 856-697-1441
Facsimile: 856-697-2259
Email: johnambrose@askigi.com
With a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attention: Jeffrey N. Carp, Esq.
Telephone: 617-526-6468
Facsimile: 617-526-5000
Email: jeffrey.carp@haledorr.com
10. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws (and not the law of
conflicts) of the State of New Jersey.
11. Entirety of Agreement; Amendment and Waiver. This Agreement
sets forth the entire agreement between the parties as to the subject
matter hereof and merges all prior discussions and negotiations between
them, and none of the parties shall be bound by any conditions,
definitions, warranties, understandings or representations with respect to
such subject matter other than as expressly provided herein. Neither this
Agreement, nor any of the terms or provisions hereof or appendices hereto,
may be amended, modified, supplemented or waived, except by a written
instrument signed by the parties hereto (or, in the case of a waiver, by
the party granting such waiver). No waiver of any of the provisions of this
Agreement shall be deemed to be or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver. No failure of a party hereto to insist upon
strict compliance by the other party hereto with any obligation, covenant,
agreement or condition contained in this Agreement shall operate as a
waiver of any subsequent or other failure.
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12. Assignment. The Suppliers shall not without the Purchaser's
prior written consent in any way transfer, assign or otherwise convey
either this Agreement or any of the Suppliers' rights, interests, duties or
obligations hereunder, except in connection with a Change of Control and
then only on condition that the assignee expressly agree in writing
delivered to the Purchaser prior to the consummation of the Change of
Control to assume all of the Suppliers' obligations hereunder.
Notwithstanding anything to the contrary herein, the Suppliers may
subcontract out any or all of their obligations under this Agreement. The
Purchaser shall not, without the Suppliers' prior written consent, in any
way transfer, assign or otherwise convey its rights under Section 4.2
except in connection with a Change of Control and then only on condition
that the assignee expressly agree in writing to assume all of the
Purchaser's obligations hereunder.
13. Actions by the Suppliers. Any action required to be taken by or
that may be taken by, or any obligation of, the Suppliers under this
Agreement shall be deemed taken or performed if taken or performed by any
one or more of the Suppliers.
14. Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.
15. Independent Contractor. This Agreement shall not create an
agency, partnership, joint venture or employer/employee relationship
between the parties hereto. Each of the Purchaser and the Suppliers hereby
agrees not to represent itself in any of such capacities in any manner
whatsoever in reliance on the terms of this Agreement. The sole
relationship established by this Agreement is that of independent
contractors, and nothing hereunder shall be construed to give either party
the power or authority to act for, represent, bind or commit the other
party.
16. Remedies. The parties acknowledge and agree that, in the event
of a breach or a threatened breach by either party of this Agreement, the
other party may suffer irreparable damage for which it will have no
adequate remedy at law and, accordingly, shall be entitled to injunctive
and other equitable remedies to prevent or restrain such breach or
threatened breach, without the necessity of posting any bond or surety, in
addition to any other remedy it might have at law or at equity. Unless
otherwise provided in this Agreement, each right and remedy set forth in
this Agreement is in addition to any other right and remedy, at law or in
equity, and the exercise of one right or remedy shall not be deemed a
waiver of any other right or remedy.
17. Singular and Plural Forms. The use herein of the singular form
shall also denote the plural form, and the use herein of the plural form
shall denote the singular form, as in each case the context may require.
18. Headings. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part hereof or
define, limit or otherwise affect the meaning of any of the terms or
provisions hereof.
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19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which,
when taken together, shall constitute one and the same instrument.
20. Limitation on Damages. No party shall be liable to the other
under strict liability or for any indirect special, exemplary or punitive
damages or except as provided in the Uniform Commercial Code, for any
incidental or consequential damages in connection with the subject matter
of this Agreement or any Order.
21. Force Majeure. Neither Party shall be liable for any failure or
delay of performance under this Agreement due to any Force Majeure. Each
party shall use all reasonable efforts to minimize the impact of a Force
Majeure upon such party and its ability to perform any of its respective
obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement as of the date first
written above.
IGI, INC.
By_________________________________
Name:
Title:
IGEN, INC.
By_________________________________
Name:
Title:
VETOQUINOL U.S.A., INC.
By_________________________________
Name:
Title:
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EXHIBIT A
List of IGI-Novasome Products
See attached.
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EXHIBIT B
Specifications
See attached.
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