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EXHIBIT 10.11
CONFIDENTIAL TREATMENT REQUEST
Confidential Portions Of This Agreement Which Have Been Redacted Are
Marked With Brackets ("[***]"). The Omitted Material Has Been Filed Separately
With The Securities And Exchange Commission.
EXCLUSIVE DISTRIBUTION AGREEMENT
This Exclusive Distribution Agreement (the "Agreement") is dated
effective as of January 1, 1996 by and between UNISOURCE, INC., a Colorado
corporation, with its principal place of business at ▇▇▇▇-▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Unisource"), and HORIZON PHARMACEUTICAL CORPORATION,
a Delaware corporation, with its principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Horizon").
W I T N E S S E T H :
A. Unisource is engaged in the business of developing, manufacturing
and selling pharmaceutical products;
B. Horizon is engaged in the business of marketing and distributing
pharmaceutical products;
C. Unisource and Horizon previously entered into an Exclusive
Distribution Agreement dated July 30, 1993 (the "Prior Agreement") for a
pharmaceutical product known as TANAFED (the "Product"), as described in
Exhibit A hereto, which exhibit is expressly incorporated herein by this
reference; and
D. The parties desire to enter into a new Exclusive Distribution
Agreement superseding the "Prior Agreement" effective as of the date indicated
above, according to the following terms and conditions. It is the express
intention of the parties that this "Agreement" shall replace and supersede the
"Prior Agreement", curing any and all defaults which may exist under the "Prior
Agreement" by either Unisource or Horizon, without any time elapsing between
the termination of the "Prior Agreement" and the effective date of this
"Agreement".
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, IT IS AGREED:
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l. Exclusivity; Requirements Contract; Pricing; and Terms of
Sale.
1.1 Exclusivity.
(a) Unless and until Horizon's exclusivity for
the Product is terminated pursuant to the provisions of Section 1.1(b) hereof,
Unisource shall supply the Product exclusively to Horizon and shall not sell
the Product in the Continent of North America or the Caribbean to anyone other
than Horizon without Horizon's prior written consent. Likewise, Horizon agrees
during the term hereof to purchase the Product exclusively from Unisource for
North American and Caribbean distribution. It is agreed that the mutual
exclusivity provisions of this Agreement shall apply to the Product regardless
of package size or the nature of any packaging.
(b) Unisource shall have the right to terminate
Horizon's exclusivity hereunder if Horizon's aggregate purchases for the
Product during any calendar year beginning in 1996 are less than the scheduled
amount set forth below for such year. Such right to terminate Horizon's
exclusivity must be exercised, if at all, by written notice given within thirty
(30) days after the end of any calendar year. Unisource's right to terminate
Horizon's exclusivity hereunder shall be Unisource's sole remedy for Horizon's
failure to order the scheduled amount during any calendar year. The scheduled
amount for the Product, regardless of package size is as follows:
(i) 1996 - [***];
(ii) 1997 - [***];
(iii) 1998 - [***];
(iv) 1999 and subsequent years - [***]
For purposes of this Agreement, if more gallons are purchased than scheduled
during a particular year, the overage above scheduled gallons will carry over
to the next year's scheduled obligations as a credit.
For purposes of this Agreement, a gallon shall be defined as 128-fl. oz. to be
packaged in various package sizes.
(c) Horizon shall have the right of first refusal on
all other dosage forms or pharmaceutical products containing Pseudoephedrine
Tannate developed by Unisource. Unisource agrees to offer said products in all
forms to Horizon first, and to negotiate terms with Horizon in good faith.
Horizon shall also have the right to match any bona fide offer from any third
party for any said products in all forms, and by agreeing to match the bona
fide offer, Horizon shall be granted exclusivity to the same extent granted
herein for TANAFED.
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1.2 Requirements Contract.
(a) During the term of this Agreement, Horizon shall
purchase the Product exclusively from Unisource and Unisource shall exclusively
supply all of Horizon's requirements of the Product for the distribution
channels heretofore defined. Horizon shall not during the term of this
Agreement purchase or manufacture a comparable Product (comparable Product is
defined as any product containing Pseudoephedrine Tannate, alone or in
combination with other ingredients, and which is intended for the same
therapeutic use as the Product) from anyone other than Unisource. The foregoing
obligation of Unisource to supply all of Horizon's requirements of the Product
and Horizon's obligation to purchase all of its requirements of the Product
exclusively from Unisource shall apply even if Horizon's exclusivity is
terminated by Unisource pursuant to Section 1.1 hereof. Horizon shall have the
right to terminate Unisource's exclusivity hereunder if Unisource is unable to
fulfill all of Horizon's requirements for the Product at any time, subject to
the sixty (60)-day cure period described in Subsection 6.2 below.
1.3 Price and Terms of Sale.
(a) The price to be charged to Horizon for Product
in various package sizes bearing the Horizon or a subsidiary label shall be the
same as those currently quoted to Horizon, as shown on Exhibit "B" attached
hereto and incorporated herein. However, the price charged to Horizon for the
Product shall be reduced if: (1) Unisource engages a new manufacturer who
supplies Product to Unisource at a lower cost, or (2) increased volume orders
by Horizon result in per-unit savings to Unisource because of economies of
scale. In the event of the occurrence of either of these contingencies,
Unisource and Horizon agree to negotiate a price reduction in good faith,
promptly upon receipt of written notice from Horizon of a desire to negotiate
price reduction as a result of the occurrence of one or both contingencies. No
other price changes shall be made without the written consent of both parties.
(b) Horizon shall pay Unisource for the Product
within thirty (30) days after shipment of the Product to the location
specified. Unisource warrants that when invoiced the Product will conform to
those specifications documented in Exhibit A and Unisource will cause the
manufacturer to provide to Horizon a Certificate of Assay, batch assay sheets
and all current material safety data sheets applicable to the Product for each
batch shipped to Horizon. Horizon will not be obligated to pay for a
non-conforming batch of the Product or a batch for which a Certificate of Assay
has not been provided.
(c) All shipments of the Product to Horizon at the
location specified will be made FOB, Unisource site of manufacture.
2. Term of Agreement and Termination. This Agreement shall
commence on January 1, 1996, at which time the "Prior Agreement" shall be
superseded instantly and this Agreement shall continue for a period of seven
(7) years until December 31, 2003. If upon expiration of this initial term
ending December 31, 2003, Horizon is not in default of any of the material
terms and conditions of this Agreement, Horizon shall have an option to extend
this Agreement for an additional term of seven (7) years. This option shall be
automatically
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[***] - CONFIDENTIAL TREATMENT REQUESTED
exercised unless Horizon gives written notice to Unisource of its
intent not to exercise the option prior to December 31, 2003. This Agreement
shall also terminate immediately upon any voluntary or involuntary dissolution,
act of bankruptcy or reorganization for the benefit of creditors of either
party, and may not be reinstated thereafter except with the other party's
written consent.
In the event that Horizon exercises the seven year
option, Horizon agrees to purchase [***] of Product in each of the first three
years of the option period, and [***] of Product in each of the remaining four
years, pursuant to the exclusivity and requirements provisions of subsection 1
above.
3. Representations and Warranties of Unisource.
Unisource represents and warrants to Horizon that the Product supplied
hereunder will be merchantable and that the Product supplied hereunder will be
manufactured in accordance with the then FDA current good manufacturing
practices for comparable products. Unisource shall cause the manufacturer of
the Product (the "Manufacturer") to supply Horizon with the standard form FDA
continuing guaranty. Unisource further represents and warrants to Horizon that
it is the sole and exclusive owner of the Product and that no consents are
required from any person to grant Horizon the rights granted to it hereunder.
Unisource hereby agrees to indemnify and hold harmless Horizon from and against
any breach of its representations and warranties set forth in this Agreement.
In no event, however, will Unisource be liable to Horizon for consequential
damages.
4. Insurance. Unisource shall cause the Manufacturer to
maintain product liability insurance in a minimum amount of One Million Dollars
($1,000,000) and, prior to the delivery of the first order of Product,
Unisource shall cause the Manufacturer to provide Horizon with a certificate of
insurance naming Horizon as an additional insured on Manufacturer's insurance
policy. Thereafter, Unisource shall cause the manufacturer to provide periodic
verification of the liability insurance coverage on each renewal of the policy,
and in any event at least each year on the anniversary date of the policy.
5. Default.
5.1 Notice of Default. Subject to Section 6.2,
if a default occurs hereunder, then the non-defaulting party shall be entitled
to terminate this Agreement upon sixty (60) days' written notice to the
defaulting party, if the defaulting party has not cured the default as provided
in paragraph 6.2, which notice shall describe the default in reasonable detail.
5.2 Effect of Default and Cure. The party in
default shall have a period of sixty (60) days from receipt of the Notice of
Default provided for in paragraph 6.1 within which to cure the specified
default. If the default is cured and corrected within sixty (60) days after
proper notice, this Agreement shall continue in full force and effect as if no
default had existed. If the default is not timely cured as set forth in this
Subsection 6.2, then the non-defaulting party shall have the option to
terminate this Agreement, and such termination shall be without prejudice to
any claim for damages which the non-defaulting party may have.
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6. Force Majeure and Termination.
6.1 Force Majeure. A party to this Agreement shall be
excused from performance under this Agreement to the extent that and for so
long as such performance is substantially hindered or prevented by force
majeure such as acts of God, strikes, or acts of war.
6.2 Right of Termination. If any performance excused
pursuant to Subsection 6.1 is both protracted and material with reference to
the objectives and purposes of this Agreement, the party not excused thereby
may terminate this Agreement upon fifteen (15) days' written notice to the
other party, and such terminating party shall be entitled to an equitable
adjustment of its rights and obligations hereunder.
7. Applicable Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Colorado without
giving effect to the principles of conflict of laws thereof.
8. Notices. Any notice, demand or other communication
required or authorized to be given under this Agreement shall, if reasonably
practicable, be transmitted by telecopier to the number specified below,
confirmed by hard copy via U.S. Mail, or such notice may be sent by personal
delivery, national overnight commercial delivery service which provides package
tracking services ("Overnight Courier") or by U.S. Mail, certified, return
receipt requested. Any such notice shall be deemed received as of the first
business day after it is sent if delivered by telecopy, Overnight Courier or
personal delivery, or on the day actually received and signed for if sent by
Certified U.S. Mail. All notices shall be sent to the respective parties at the
following telecopy numbers and addresses, or such other telecopy number or
address as a party may provide to the other by written notice complying with
this Section 9:
Horizon Pharmaceutical Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
Unisource, Inc.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Fax No. ▇▇▇-▇▇▇-▇▇▇▇
9. Assignment; Binding Effect. This Agreement may not
be assigned by either party without the prior written consent of the other
party, and any attempt by either party to assign this Agreement without such
consent shall be null and void ab initio. This Agreement shall inure to the
benefit of, and be binding upon, the respective successors and permitted
assigns of the parties.
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10. Modification. This Agreement may not be modified or
amended in any respect except in writing signed by both parties.
11. The Prior Agreement. The Prior Agreement is hereby
superseded in its entirety by mutual consent of both parties. Each party
represents and warrants to the other that no default exists under the terms of
the Prior Agreement.
12. Entire Agreement. This is the entire Agreement between
the parties and no prior representations, statements, warranties or inducements
form a part of this contract or vary, modify or expand upon any of the terms or
conditions contained in this written Agreement.
IN WITNESS WHEREOF, the parties hereto have signed, sealed and
delivered this Agreement effective January 1, 1996.
Attest: UNISOURCE, INC.
By:
------------------------------- -----------------------------
Attest: HORIZON PHARMACEUTICAL
CORPORATION
By:
------------------------------- -----------------------------
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EXHIBIT A
TANAFED
FORMULA A
Pediatric Suspension BID
Each 5 mL contains:
Chlorpheniramine tannate 4.5 mg.
Pseudoephedrine tannate 75.0 mg.
Inactive ingredients: benzoic acid, FD&C Red No. 40, flavors (natural
and artificial), glycerin, kaolin, magnesium aluminum silicate,
methylparaben, pectin, water, saccharin sodium and sucrose.
FORMULA B
Pediatric Suspension BID
Each 5 mL contains:
Chlorpheniramine tannate 4.5 mg.
Pseudoephedrine tannate 75.0 mg.
Inactive ingredients: Citric acid, D&C Red #28, flavors, glycerin,
magnesium aluminum silicate, methyiparaben, sodium benzoate, sodium
citrate, sodium saccharin, sucrose, zanthan gum.
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EXHIBIT B
[***]
Chlorpheniramine tannate 4.5 mg.
Pseudoephedrine tannate 75.0 mg.
Quantity: [***] order [***] order or more
1. Packaging: Pints Pints
Price: $[***] $[***]
2. Packaging: [***] [***]
Price: $[***] $[***]
3. Packaging: [***] [***]
Price; $[***] $[***]
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