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EXHIBIT 10.19
SUPPLY AGREEMENT
This Agreement dated as of January 28, 1997 between Bio-Plexus, Inc., a
Connecticut corporation, (sometimes referred to as "Supplier" or "Bio-Plexus"),
and Johnson & Johnson Medical, Inc., a New Jersey corporation (sometimes
referred to as "Purchaser" or "JJMI"), sets forth the terms and conditions on
which the parties agree to have Supplier supply Purchaser with the catheter
safety needle assembly, (sometimes referred to as the "SNA", "SNAs" or
"Product") and to perform the following additional services (sometimes referred
to as the "Contract Services"), all as specified below.
1) Supply, Specifications and Contract Services. During the term of
this Agreement, Supplier shall supply Purchaser with those quantities of the
SNAs as ordered by Purchaser pursuant to this Agreement. The SNAs shall comply
with the specifications (sometimes referred to as the "Specifications") as
outlined on Exhibit 1 hereto, or as such Specifications may be modified in
writing by the parties. In manufacturing the SNAs for Purchaser, Supplier shall
not deviate from the Specifications without obtaining the prior written consent
of Purchaser. The price for the SNAs shall be as described in Section 3 hereto.
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At the request of Purchaser, Supplier shall also perform the Contract
Services as specified in Exhibit 1A hereto. The charges for the Contract
Services shall be as set forth in Exhibit 1A, and shall remain in effect for the
period specified in Exhibit 1A. The mechanism (if any) for adjusting the price
for the Contract Services is also specified in Exhibit 1A. Supplier shall not
deviate from the agreed-upon Contract Services specified herein without the
prior written approval of Purchaser. If the parties agree to add any
additional/alternative Contract Services hereunder, this must be documented in
writing by the parties.
During the term of this Agreement, unless Purchaser otherwise agrees in
writing, Supplier shall not make or sell any SNAs (or any products which would
reasonably be expected to compete with such SNAs), to the extent such items are
for use in the Field as described in the Development and License Agreement dated
as of January 28, 1997 between Supplier and Purchaser (the "Development/License
Agreement").
2) Forecasts and Orders. Once during each calendar quarter during the
term of this Agreement, Purchaser shall provide Supplier with a non-binding
written forecast of Purchaser's expected needs for the SNAs during the following
four calendar quarters. Purchaser shall place any of its orders for the SNAs by
written purchase order to Supplier, which shall be placed at least 90 days prior
to the desired date of delivery, unless the parties otherwise
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agree in writing with respect to any specific orders. However, unless Supplier
otherwise agrees in writing, Supplier shall not be obligated to supply more than
12,000,000 SNAs annually during the first two 12 month periods following
commercial launch as referenced in Exhibit 2 hereto and not more than 18,000,000
SNAs annually during each subsequent 12 month period following commercial
launch, unless Purchaser provides Supplier at least 12 months prior written
notice with respect to such excess purchase amounts.
During each respective 12 month period in the term of this Agreement,
Purchaser shall purchase the respective minimum units of SNAs from Supplier as
specified in Exhibit 2 hereto. Such minimums in an applicable 12 month period
shall be appropriately reduced to the extent of any failure to supply by
Supplier under this Agreement. In the event that Purchaser fails to purchase the
applicable minimums for a respective 12 month period and is not otherwise
relieved of such obligation pursuant to the terms of this Agreement, Supplier's
exclusive remedies shall be as set forth in Exhibit 2 hereto.
3) Purchase Price. The initial price for the SNAs shall be as set forth
in Exhibit 3 hereto, and shall remain in effect for the period specified in
Exhibit 3. The mechanism (if any) for adjusting the price for the SNAs is also
specified in Exhibit 3.
The price charged by Supplier to Purchaser hereunder shall be F.O.B.
Supplier's facility in Vernon Connecticut; but the risk of
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loss with respect to the SNAs shall remain with Supplier until the SNAs are
delivered to Purchaser in accordance with this Agreement. Purchaser shall pay
for each respective order of SNAs which it places pursuant to this Agreement
within 30 days of receipt of such ordered SNAs (and applicable invoice therefor)
provided that such SNAs comply with the terms of this Agreement. Unless
otherwise directed by Purchaser, Supplier shall ship each order of SNAs to
Purchaser at ____________, following shipping instructions provided by
Purchaser.
4) Replacement of Non-Conforming SNAs. Supplier agrees to promptly
replace (at no additional charge to Purchaser) any SNAs supplied to Purchaser
hereunder which do not fully comply with the terms of this Agreement. Purchaser
agrees to give notice to Supplier of any defects in any such SNAs shipped to
Purchaser hereunder as soon as reasonably possible after such defects are
discovered by Purchaser.
5) Manufacture in Accordance with Applicable Rules and Regulations.
Supplier represents and warrants that all SNAs supplied in connection with this
Agreement shall be manufactured by Supplier and all Contract Services from
Supplier shall be performed in full compliance with all applicable laws and
regulations and otherwise in compliance with this Agreement; and without
limiting the foregoing, Supplier represents and warrants that it shall supply
the SNAs in full compliance with all rules and regulations
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with respect to United States Good Manufacturing Practices ("GMP Requirements")
as such may be determined by the United States Food and Drug Administration
("FDA"). Purchaser has the right (upon reasonable notice to Supplier) to audit
the facilities being used by Supplier for production of the SNAs to assure
compliance with applicable rules and regulations, and Supplier shall promptly
remedy any bona fide deficiencies which may be noted in any such audit. Supplier
acknowledges that the preceding sentence granting Purchaser certain audit rights
in no way relieves Supplier of any of its obligations under this Agreement, nor
shall such provision require Purchaser to conduct any such audits.
6) Certain Representations of Supplier. Supplier represents and
warrants that its supplying of the SNAs to Purchaser under this Agreement does
not conflict with any other agreement to which Supplier is a party, or with any
rights of any other party.
7) Responsibility for Damages Each party hereto ("Indemnifying Party")
shall be responsible for and shall indemnify the other party hereto
("Indemnified Party") against all losses, costs, and expenses, including without
limitation reasonable attorneys' fees ("Damages") to the extent any such Damages
result directly from the failure of the Indemnifying Party to fully perform its
obligations under this Agreement, or otherwise directly from the negligence or
other fault of the Indemnifying Party, its agents or employees. Neither party
shall be responsible for any
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indirect, speculative or consequential damages under this Agreement, provided
that product recall expenses required due to the fault of a party hereto shall
not be excluded Damages. To the extent an Indemnified Party makes claim for
indemnification hereunder, the Indemnified Party shall give written notice to
the Indemnifying Party reasonably setting forth the facts and circumstances in
connection with the claim for indemnification.
8) Term and Termination. This Agreement shall remain in effect for a
period of 12 years (sometimes referred to as the "Initial Term") from the
effective date hereof, unless sooner terminated as provided below. If the
parties agree to extend the Agreement beyond the Initial Term, such agreement
must be in writing signed by the parties.
This Agreement may be terminated by one party at the end of a period
of 60 days written notice to the other party if such other party is in material
breach of any of its obligations under this Agreement, and if the defaulting
party fails to remedy such breach by the end of such 60 day period (or be in the
process of remedying such breach if the remedy in good faith cannot be completed
within the 60 day notice period). In case of a termination under the provisions
of the previous sentence, the non-defaulting party may pursue any remedy
available in law or in equity under applicable law with respect to such breach.
Any termination of this Agreement will not affect rights and obligations of the
parties which have accrued prior to the date of termination.
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Purchaser has the right, upon at least 100 days prior written notice to
Supplier, to terminate any of the Contract Services available from Supplier
under this Agreement. In the event of such termination, Supplier shall be paid
for any such Contract Services being terminated by Purchaser which are performed
by Supplier in accordance with this Agreement up through the date of such
termination.
Purchaser has the right to terminate this Agreement along with the
Development/License Agreement upon one year's prior written notice to Supplier.
If Purchaser effects such termination within the first 3 years following
commercial launch (as defined in Exhibit 2 hereto) for any reason other than
breach by Supplier, then Purchaser shall, as Supplier's exclusive remedies: a)
pay Supplier for the applicable minimum payments for the 12 month notice period
as calculated under this Agreement and the Development/License Agreement; and b)
forfeit (on an "as is" basis) the Purchaser's Tooling provided to Supplier under
Section 18 of this Agreement. If Purchaser effects such termination after the
first 3 years following commercial launch (as defined in Exhibit 2 hereto) for
any reason other than breach by Supplier, then Purchaser shall, as Supplier's
exclusive remedies: a) pay Supplier for the applicable minimum payments for the
12 month notice period as calculated under this Agreement and the
Development/License Agreement; and b) provide Supplier the opportunity to
purchase (on an "as is" basis) the Purchaser's Tooling provided to Supplier
under Section 18 of this Agreement. Such purchase if elected by
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Supplier, must be effected with Supplier and Purchaser within 60 days following
the termination and shall be for a price equal to Purchaser's net book value for
such Purchaser's Tooling.
9) Force Majeure. If either party is prevented from performing any of
its obligations hereunder (other than any obligation to pay money) due to any
cause which is beyond the non-performing party's control, including without
limitation fire, explosion, flood, or other acts of God ("Force Majeure Event"),
such non-performing party shall not be liable for breach of this Agreement with
respect to such non-performance, provided that the non-performing party gives
immediate written notice to the other party of the Force Majeure Event and
exercises all reasonable efforts to eliminate the Force Majeure Event and to
resume performance of its affected obligations as soon as practicable.
10) Confidential Information. All written information designated as
confidential and exchanged between Supplier and Purchaser while this Agreement
is in effect shall be treated as confidential information and neither party
shall for 5 years (or such longer period as may be specified in writing) after
such exchange, disclose such confidential information of the other party to any
third party or otherwise use such confidential information (except in the
performance of this Agreement) without the prior written approval of the other
party, unless such information has become public knowledge through no fault of
the party receiving
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such information, or comes to such party from a third party under no obligation
of confidentiality with respect to such information, or was in the possession of
such party prior to the date of disclosure.
11) Notices. Any notice given by one party to the other hereunder shall
be sent in writing or delivered personally as follows:
if to Purchaser:
Johnson & Johnson Medical, Inc.
2500 Arbrook Boulevard
P.O. Box 90130
Arlington, Texas 76004-3130
Attention: Dr. Jan H. Egberts
if to Supplier:
Bio-Plexus, Inc.
129 Reservoir Road
Vernon, Connecticut 06066
Attention: Mr. Carl Sahi;
or to such other address as the respective party shall designate by appropriate
notice hereunder to the other party.
12) Section Headings. The Section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13) Governing Law. This Agreement shall be construed pursuant to the
internal laws of the State of New Jersey.
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14) Assignment. This Agreement and the rights and obligations hereunder
shall be binding upon and inure to the benefit of the parties hereto, their
respective successors and assigns, but except as provided below, this Agreement
shall not be assignable by either party without the prior written consent of the
other party. Purchaser may assign this Agreement to any other subsidiary of
Johnson & Johnson (the corporate parent of Purchaser) upon written notification
to Supplier, provided that such assignment shall not relieve Purchaser of its
obligations hereunder.
15) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
shall be deemed to constitute only one Agreement.
16) Entire Agreement. It is the desire and intent of the parties to
provide certainty as to their future rights and remedies against each other by
defining the extent of their undertakings herein. The parties have, in this
Agreement incorporated all representations, warranties, covenants, commitments
and understandings on which they have relied in entering into this Agreement,
and, except as provided for herein, neither party makes any covenant or other
commitment to the other concerning its future action. Accordingly, this
Agreement (i) constitutes the entire agreement and understanding between the
parties and there are no promises, representations, conditions, provisions or
terms related
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thereto other than those set forth in this Agreement and (ii) supersedes all
previous understandings, agreements and representations between the parties,
written or oral with respect to the subject matter hereof. Any amendment to this
Agreement must be in writing signed by the parties. The foregoing does not
affect the Development/License Agreement which remains in effect between the
parties and contains the terms as set forth therein.
17. Arbitration of Disputes. Any unresolved controversy or claim
arising out of or relating to this Agreement, or the parties' decision to enter
into this Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrators) may be
entered in any court having jurisdiction thereof. The arbitration shall be held
in New York, New York and the arbitrators shall apply the substantive law
governing this Agreement as provided herein, except that the interpretation and
enforcement of this arbitration provision shall be governed by the Federal
Arbitration Act. The arbitrators shall not award either party punitive damages
and the parties shall be deemed to have waived any right to such damages.
18. Purchaser's Tooling. Purchaser shall supply Supplier with the items
of tooling (sometimes referred to as Purchaser's Tooling) as listed on Exhibit 4
hereto, for use by Supplier in connection with this Agreement. Purchaser's
Tooling shall be used by Supplier only for Purchaser's benefit in
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connection with this Agreement. Such Purchaser's Tooling shall remain the
property of Purchaser, and shall be promptly surrendered to Purchaser upon
termination of this Agreement, except as otherwise provided in this Agreement,
or except as otherwise agreed in writing by the parties. Supplier agrees to
maintain on the Purchaser's Tooling any labels or other identifying signs as
requested by Purchaser to confirm Purchaser's ownership of the Purchaser's
Tooling. Supplier shall be responsible for any damages to the Purchaser's
Tooling while in Supplier's facility, except to the extent such damages are due
to the fault of Purchaser. Supplier agrees to maintain the Purchaser's Tooling
during the term of this Agreement in accordance with Supplier's reasonable
customary standards as applicable to similar tooling owned or otherwise used by
Supplier. Supplier shall allow Purchaser access to Purchaser's Tooling during
Supplier's normal business hours, or as otherwise reasonably necessary, as
requested by Purchaser.
19. Government Inspections Supplier shall advise Purchaser on the same
day if an authorized agent of the FDA or other governmental agency visits
Supplier's manufacturing facility and requests or requires information or
changes which directly pertain to the SNAs. Purchaser will be provided copies of
any FDA or governmental agency correspondence or inquiries within 24 hours
including inspections, receipt of Form 483's, notice of adverse findings and
regulatory letters pertaining to the SNAs.
20. Liability Insurance. Within 10 days after the effective date of
this Agreement, Supplier shall furnish to Purchaser written
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evidence of products and contractual liability insurance covering Supplier (with
Purchaser named as an additional insured) with respect to Supplier's obligations
under this Agreement, which insurance coverage shall be maintained at all times
during this Agreement. Such coverage shall afford at least $10,000,000 each
occurrence combined single limit bodily injury/property damage and $10,000,000
annual aggregate liability limits. Such evidence of insurance coverage may be
either a copy of the effective policy or a reasonably acceptable certificate of
insurance from the insurer. The referenced insurance coverage shall not be
changed or canceled without the insurer providing Purchaser at least 30 days
prior written notice.
21. Failure to Supply. In the event that any failure by Supplier to
supply SNAs under this Agreement lasts longer than 120 days, Purchaser shall
have (among its other remedies) the right to utilize an alternate supplier for
the SNAs. If Purchaser elects to utilize such alternate supplier, Supplier shall
provide all reasonable technical assistance and know-how (at no charge) to allow
the alternate supplier to produce the SNAs for Purchaser during the period when
Supplier fails to supply and for a period of 90 days thereafter.
22. Public Announcements. Except as otherwise required by applicable
law, neither party will originate any publicity, news release, or other public
announcements written or oral whether to the public, press, stockholders, or
otherwise relating to this Agreement or to performance hereunder without the
prior written
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consent of the other party hereto (which consent shall not be unreasonably
withheld).
In Witness Whereof, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
Johnson & Johnson Medical, Inc.
By /s/ Jan Egberts, M.D.
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Bio-Plexus, Inc.
By /s/ Ronald A. Haverl
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