EXHIBIT 10 (p.2)
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
SECOND AMENDMENT TO PURCHASE AND SUPPLY AGREEMENT
This Second Amendment to Purchase and Supply Agreement (the "Second Amendment"),
effective as of July 27, 2001, is made by and between DUSA Pharmaceuticals,
Inc., a New Jersey corporation, having offices at 25 Upton Drive, Wilmington,
Massachusetts 01887 ("DUSA") and North Safety Products, Inc., a Delaware
corporation and unit of Norcross Safety Products L.L.C., having offices at 2000
Plainfield Pike, Cranston, Rhode Island 02921 ("NSP").
Whereas, DUSA and NSP are parties to a Purchase and Supply Agreement effective
as of September 13, 1999 (the "Agreement") which was amended effective as of
February 15, 2001 (the "Amendment"); and
Whereas, the parties wish to further amend the Agreement upon the terms and
conditions set forth in this Second Amendment for good and valuable
consideration which is hereby acknowledged.
Now, Therefore, in consideration of the covenants, conditions, and undertakings
hereinafter set forth, the parties mutually agree as follows:
1. Amend Article II Supply by deleting Section 2.4.3, Underutilization Fee, in
the Amendment and replace it as follows:
Section 2.4.3. Underutilization Fee
(a) The parties recognize that orders for DUSA's Kerastick(R) have not
been at unit levels as originally anticipated by the parties. DUSA
agrees, therefore, to compensate NSP in the form of an
under-utilization fee, as follows:
(i) One Million Dollars ($1,000,000) upon execution of this Second
Amendment
(ii) One Hundred Thousand Dollars ($100,000) on or before September
1, 2001, subject to written confirmation of the final validation
for the isolation room constructed for the Attest product line.
(iii) Payments of One Hundred Thousand Dollars ($100,000) on or
before the following dates: December 31, 2001; June 30, 2002;
December 31, 2002.
(iv) Subject to Sub-Paragraph 2.4.3(b) below, up to Five Hundred
Thousand Dollars ($500,000) in the event DUSA exercises its
right to extend the Term until June 30, 2003, payable in three
installments on December 31, 2002, March 31, 2003 and July 10,
2003. Such fees shall be calculated as determined by the formula
in Sub-Paragraph 2.4.3(b) below.
(b) If DUSA has not ordered any Kerastick(R) units during the period
July 1, 2001 through June 30, 2003, DUSA shall pay the
under-utilization fee of Five Hundred Thousand Dollars ($500,000) set
forth in Sub--Paragraph 2.4.3 (a) above . If DUSA has ordered [c.i.]
Kerastick(R) units during the period July 1, 2001 through June 30,
2003, no payment shall be due to NSP. If DUSA orders less than [c.i.]
Kerastick(R) units during the period July 1, 2001 through June 30,
2003, then the amount due to NSP shall be calculated on [c.i.] by
comparing the number of units manufactured during the period to [c.i.]
to determine the percentage of utilization. The percentage of
under-utilization shall be equal to [c.i.] minus the percentage of
utilization and shall be multiplied by $500,000. In the event DUSA has
not ordered any Kerastick(R) units during the period July 1, 2001
through December 31, 2002, DUSA shall make an advance against any
payment due under this paragraph in the amount of One Hundred Sixty
Seven Thousand Dollars ($167,000). Similarly, if DUSA has not ordered
any Kerastick(R) units during the period July 1, 2001 through March
31, 2003, DUSA shall make an additional advance against any payment
due under this paragraph in the amount of One Hundred Sixty Seven
Thousand Dollars ($167,000). The final payment of One Hundred Sixty
Six Thousand Dollars ($166,000) shall be made no later than July 10,
2003. The parties shall reconcile the number of units manufactured and
released for shipment by the DUSA Quality Unit and shall adjust the
total of any payments made under this Sub-Paragraph 2.4.3 (a)(iv) and
(b) no later than July 10, 2003, to reflect the total number of units
manufactured and released for shipment during the period July 1, 2001
to
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
June 30, 2003.
(c) At any time following the date of this Second Amendment, but no later
than upon termination of the Agreement, NSP shall provide DUSA, at
DUSA's request, with all current and historical records and
information, including, without limitation, engineering drawings,
validation records and protocols, SOPs pertaining to, or supporting
Kerastick(R) manufacturing, QA processes and procedures, test
processes and procedures, and all other documents related to the
cGMP's of manufacturing the Kerastick(R). In addition, NSP will
provide personnel support who are knowledgeable in connection with the
manufacture of the Kerastick(R) to DUSA, (subject to reasonable
availability), at DUSA's cost, at hourly rates as previously charged
by NSP prior to the date of this Second Amendment. This activity is
specific to the development of the process and manufacturing
capability at DUSA and does not relate to providing any of the above
referenced documentation.
(d) Further, NSP agrees to provide DUSA a list of consultants and suppliers
(names, addresses, phone numbers, contacts) associated with the
original Kerastick(R) project, as well as all suppliers that support
the manufacturing of the Kerastick(R) for NSP. NSP agrees to release
these consultants and suppliers to speak directly with DUSA upon
request for the purposes of technology transfer of the Kerastick(R)
manufacturing process.
(e) NSP agrees to maintain the DUSA Kerastick(R) manufacturing facility and
it's employees in a state of readiness for the manufacture of the
Kerastick(R) units, and to maintain the capability of producing at
least 25,000 Kerastick(R) units per month according to established
procedures and cGMP's.
(f) Also at termination of the agreement or at any time after the date of
this Second Amendment, if DUSA notifies NSP that DUSA will not be
placing any further orders with NSP, NSP shall make DUSA's equipment
available to DUSA. The actual transportation from NSP's loading dock to
DUSA's facility would be at DUSA's cost.
(g) No later than July 10, 2003 or the end of the Term, whichever is
sooner, DUSA shall purchase from NSP all the acceptable good and
marketable inventory of raw materials and components at NSP's invoiced
cost, and work-in-process relating to the Kerastick(R) at NSP's
standard cost. DUSA shall also purchase all acceptable inventory of
finished goods of Kerastick(R) that NSP has available for shipping,
having a shelf life of at least 22 months.
2. Further amend Article X Term and Termination as follows:
Section 10.1 Term. The term of this Agreement shall commence on the
Effective Date and shall continue in full force and effect until
December 31, 2002, unless DUSA shall notify NSP in writing on or before
June 30, 2002 that it wishes to extend the term for an additional six
(6) months until June 30, 2003. In the event DUSA so notifies NSP, the
term of the Agreement shall end on June 30, 2003.
3. In the event that NSP materially breaches the Agreement, all prior
under-utilization fees paid by DUSA to NSP under this Second Amendment
shall be refunded in full, and no further under-utilization fees shall be
due to NSP.
Except as specifically provided in this Second Amendment, all of the provisions
of the Agreement and the Amendment are and shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have signed this Second Amendment to Purchase
and Supply Agreement effective as of the date stated above.
DUSA Pharmaceuticals, Inc. North Safety Products, Inc.
By: /s/ D. Geoffrey Shulman By: /s/ Moni Levy
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Date: 07/27/01 Date: 07/26/2001
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