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EXHIBIT 10.13
CONFIDENTIAL TREATMENT REQUESTED
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.
PRODUCT SUPPLY AGREEMENT
THIS PRODUCT SUPPLY AGREEMENT (the "Agreement") is entered into as of
January 29, 1999 (the "Effective Date"), by and between AMERICAN HOME PRODUCTS
CORPORATION, located at Five Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter "AHP"), and HORIZON PHARMACEUTICAL CORPORATION located at 000
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (hereinafter "Horizon"). AHP
and Horizon may each be referred to herein individually as a "Party" and
collectively as the "Parties."
WHEREAS, on January 29, 1999 Horizon and AHP entered into a license
agreement concerning AHP's grant of a license to Horizon of AHP's interest in
the Robinul(R) oral dosage form human pharmaceutical business in the United
States, its territories and possessions (including the Commonwealth of Puerto
Rico); and
WHEREAS, Horizon desires AHP to manufacture or have manufactured and supply
to Horizon certain Robinul(R) products for sale by Horizon in the Territory (as
such term is defined below) and AHP desires to manufacture or have manufactured
and supply Horizon with such products on the terms and conditions set forth
herein.
NOW THEREFORE, in consideration of the foregoing premises and the mutual
premises, covenants and conditions contained in this Agreement, the Parties
agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
respective meanings:
1.1 "ACCEPTABLE PRODUCT" shall have the meaning set forth in Section 6.1
hereof.
1.2 "AFFILIATE" shall mean, in the case of either Party, any corporation,
joint venture, or other business entity which directly or indirectly
controls, is controlled by, or is under common control with that
Party. "Control", as used in this Section 1.2, shall mean having the
power to direct, or cause the direction of, the management and
policies of an entity, whether
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through ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, for purposes of this Agreement, the term
"Affiliate" shall not include subsidiaries in which a Party or its Affiliates
owns a majority of the ordinary voting power to elect a majority of the board of
directors but is restricted from electing such majority by contract or
otherwise, until such time as such restrictions are no longer in effect.
1.3 "BINDING QUARTERLY FORECAST" shall have the meaning set forth in
Section 2.3.1.
1.4 "CALENDAR QUARTER" shall mean the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30
or December 31, for so long as this Agreement is in effect.
1.5 "CERTIFICATE OF ANALYSIS" shall mean the certificate for each batch of
Product delivered hereunder in the form contemplated by Section 2.6 of
this Agreement.
1.6 "CGMP" shall mean current good manufacturing practices of the FDA,
including compliance with the FD&C Act, 21 C.F.R. parts 210 and 211
and all applicable FDA rules, regulations, policies and guidelines in
effect at a given time.
1.7 "COMMERCIALLY REASONABLE EFFORTS" shall mean efforts and resources
normally used by a Party for a compound or product owned by it or to
which it has rights, which is of similar market potential at a similar
stage in its product life, taking into account the competitiveness of
the marketplace, the proprietary position of the compound or product,
the regulatory structure involved, the profitability of the applicable
products, and other relevant factors.
1.8 "FDA" shall mean the United States Food and Drug Administration, and
any successor thereto.
1.9 "FD&C ACT" shall mean the United States Federal Food, Drug and
Cosmetic Act, as amended.
1.10 "FULLY ABSORBED COST" shall mean with respect to AHP's manufacture of
the Product, the sum of AHP's standard unit costs of raw materials,
direct labor and allocated overhead. The calculation of direct labor
and allocated overhead costs will be consistent with AHP's then
current cost accounting policies and procedures and in accordance with
generally accepted accounting procedures.
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1.11 "KNOW-HOW" shall mean all proprietary technical and clinical
information, data and know-how relating to the manufacture of the
Product, whether or not patentable, owned or controlled, as of the
Effective Date or acquired during the term of this Agreement, by AHP
or its Affiliates (with the right to have or disclose). Know-How shall
include, without limitation, all processes, formulas, discoveries and
inventions whether relating to biological, chemical, pharmacological,
toxicological, pharmaceutical, physical and analytical safety, quality
control and clinical data, including, without limitation, phase IV
clinical study data. The term "Know-How", however, shall not include
(i) any know-how, processes, information and data which is, as of the
Effective Date or later becomes, generally available to the public or
(ii) any general manufacturing know-how not specific to the Product.
1.12 "LICENSE AGREEMENT" shall mean the License Agreement between AHP and
Horizon relating to, among other things, the grant by AHP to Horizon
of an exclusive license pertaining to certain of AHP's Robinul(R)
Products within the Territory which License Agreement was executed on
January 29, 1999.
1.13 "MATERIALS" shall mean any or all Substances, inactive ingredients,
excipients, components, labels, packaging materials and other
consumable materials used in the manufacture of the Products,
provided, however, that Materials shall not include any equipment used
in the manufacture of the Products.
1.14 "MG." shall mean milligrams.
1.15 "NDA" shall mean a New Drug Application as defined in the FD&C Act and
applicable regulations thereunder, as amended from time to time.
1.16 "PRODUCTS" shall mean the following compositions and dosage forms
containing Substance in the following amounts and supplied to Horizon
pursuant to this Agreement:
Product A (Robinul(R))
Tablets
Glycopyrrolate
1 mg.
Supplied in: Bottles of 100
Product B (Robinul(R) Forte)
Tablets
Glycopyrrolate
2 mg.
Supplied in: Bottles of 100
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In addition, Products shall include 1 mg. Tablets (Product C) and 2
mg. Tablets (Product D) supplied in bulk but only for Horizon's
requirements to self-package for sampling purposes.
It is understood by the Parties hereto that the Products are to (a) be
substantially similar to those Products currently manufactured and
marketed by AHP in the Territory, (b) comply with the Specifications
and (c) be sold under the trademark Robinul(R).
1.17 "REGULATORY APPROVALS" shall mean all (i) authorizations by the
appropriate Regulatory Authorities which are required for the
manufacture (other than manufacturing facility licenses, approvals or
authorizations), marketing, promotion, pricing and sale of the
Products in the Territory, and (ii) investigational new drug
applications permitting the clinical study of the Product in the
Territory, each of which are owned by AHP or its Affiliates.
1.18 "REGULATORY AUTHORITY" shall mean any national, supra-national,
regional, state or local regulatory agency, department, bureau,
commission, council or other governmental entity in the Territory
involved in the granting of Regulatory Approval for the Product,
including, without limitation, the FDA.
1.19 "SPECIFICATIONS" shall mean specifications for or concerning the
manufacturing, testing, and packaging of Products as set forth in the
Regulatory Approvals for the Product and in Schedule 1.19 hereto, or
as may be agreed upon by the Parties in writing from time to time.
1.20 "SUBSTANCE" shall mean the chemical substance 3-[(cyclopentylhydroxy
phenylacety1)oxy]-1, 1-dimethylpyrrolidinium bromide, otherwise known
as glycopyrrolate.
1.21 "TERM" shall have the meaning set forth in Section 10.1 hereof.
1.22 "TERRITORY" shall mean the United States, its territories and
possessions (including the Commonwealth of Puerto Rico).
1.23 "THIRD PARTY(IES) shall mean any person(s) or party(ies) other than
Horizon, AHP or their respective Affiliates.
1.24 "TRANSACTION AGREEMENTS" shall mean this Agreement and the License
Agreement.
1.25 "$" shall mean United States dollars.
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2. SUPPLY OF PRODUCTS.
2.1 OBLIGATION TO SUPPLY. Subject to the provisions of this Agreement,
during the Term of this Agreement, AHP shall manufacture or have
manufactured for and supply to Horizon Products for sale by Horizon,
its Affiliates or its permitted sublicensees in the Territory, and
Horizon shall purchase from AHP its entire requirements of Products
for sale in the Territory. All Products supplied under this Agreement
are to be supplied in finished form, as specified in Horizon's
purchase orders placed with AHP pursuant to Section 2.4 below.
2.2 SUBCONTRACTING; ASSIGNMENT OF OBLIGATIONS.
2.2.1RIGHT TO SUBCONTRACT OR ASSIGN. AHP may subcontract or assign any
part of its manufacturing and supply obligations hereunder if it
provides no less than six (6) months' written notice of its
intent to do so to Horizon, subject to Horizon's prior right to
take over such manufacturing and supply obligations. AHP and
Horizon agree that, prior to transfer of manufacturing
obligations to such subcontractor or assignee, such subcontractor
or assignee must (i) have an FDA approved facility for the
manufacture of Product and a supplement to the Regulatory
Approvals permitting the manufacture of Product in such
facilities must be approved by the FDA, and (ii) must agree in
writing to comply with the obligations set forth in this
Agreement. AHP shall assist in the qualification of such third
party manufacturers or Horizon; provided, however, that AHP's
assistance shall be limited to providing reasonable technical
assistance not to exceed 30 man-days and the delivery of the
following documentation: Batch records for both strengths of the
Product, copies of change control history, all method validations
(including new HPLC methods), active ingredient specification
sheets, raw material test procedures, copies of process and
cleaning validations, and a copy of the Product dossier made
available to Horizon during the due diligence process. AHP shall
notify Horizon or obtain Horizon's consent with respect to its
purchase of Materials from qualified Third Parties for use in its
manufacture of Product hereunder.
2.2.2COSTS. In the event that (i) during the Term of this Agreement
AHP subcontracts or assigns its manufacturing and supply
obligations to a Third Party pursuant to Horizon's request or
(ii) Horizon assumes, either directly or through a Third Party,
the responsibilities for manufacturing and supplying Product
during the Term of this Agreement as permitted under Section
2.2.1 hereof, Horizon shall pay the out-of-pocket expenses
incurred by either Party in transferring such manufacturing and
supply responsibilities.
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2.3 FORECASTS
2.3.1ROLLING FORECASTS. Throughout the term of this Agreement, Horizon
shall provide AHP with a rolling one (1) year forecast of its
expected purchases of each Product, the mechanism for which shall
be as follows:
(i) On or before the Effective Date, Horizon shall have provided AHP
with a written forecast of its expected purchases of each of the
Products for the period extending three (3) Calendar Quarters
beyond the Calendar Quarter containing the Effective Date.
Subject to Section 2.3.2, the forecast for this period, excluding
the last two (2) Calendar Quarters, shall be binding upon
Horizon.
(ii) Beginning on the date of the first Calendar Quarter following the
Effective Date and then on or prior to the first day of each
subsequent Calendar Quarter, Horizon shall provide AHP with an
update to its previously submitted forecast of its expected
purchases of each of the Products. Such update shall consist of a
repetition of the previously forecasted three (3) Calendar
Quarters along with a newly introduced forecast for the Calendar
Quarter subsequent to the last Calendar Quarter previously
forecasted, provided, however, that the quantity forecasted for
each Product for any Calendar Quarter shall not, without AHP's
prior written consent, be more than one hundred twenty-five
percent (125%) of the quantity forecasted for such Product for
the immediately preceding Calendar Quarter. Subject to Section
2.3.2, the forecast for this period, excluding the last two (2)
Calendar Quarters, shall be binding upon Horizon.
(iii)Under each of Sections 2.3.1(i) and 2.3.1(ii) above, the forecast
for those quarters which is binding upon Horizon shall be a
"Binding Quarterly Forecast."
2.3.2QUANTITY LIMITATIONS. The quantity of each Product ordered by
Horizon to be supplied by AHP in accordance with such orders in
any Calendar Quarter shall not be less than seventy-five percent
(75%) of the quantity of such Product specified in the most
recent Binding Quarterly Forecast applicable to such Calendar
Quarter. Additionally, AHP shall not be obligated to supply that
quantity of any Product in any Calendar Quarter that is more than
one hundred twenty-five percent (125%) of the quantity of such
Product specified for the most recent Binding Quarterly Forecast
applicable to such Calendar Quarter, but shall use its
Commercially Reasonable Efforts to meet requirements in excess of
such quantity. AHP shall provide sixty (60) days' written notice
to Horizon in the event AHP determines that it cannot fill an
order.
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2.4 PURCHASE ORDERS
2.4.1SUBMISSION OF PURCHASE ORDERS. From time to time, Horizon shall
place purchase orders with AHP, in a format agreed upon by the
Parties, for each of the Products specifying the quantities of
the Products desired, and the place(s) to which and the manner
and dates by which delivery is to be made; said delivery dates to
be no earlier than one hundred twenty (120) calendar days after
the purchase order date. All purchase orders shall be sent by
Horizon to the attention of the following employee of AHP or as
otherwise instructed by AHP.
Wyeth-Ayerst Pharmaceuticals
X.X. Xxx 000
Xxxxx, XX 00000
Attn: Mr. Xxx Xxxxxxx,
Finished Stock Requirements Division
FAX: (000) 000-0000
Purchase orders made in accordance with the provisions of this
Article 2 shall be deemed to be accepted by AHP if AHP has not
rejected said purchase orders within ten (10) business days of
receipt of the same, provided, however, that AHP shall not reject
any purchase order specifying quantities within the quantity
limitations set forth in Section 2.3.2 hereof and which purchase
orders are otherwise in accordance with the provisions of this
Article 2. To the extent the terms of any purchase order or
acknowledgment thereof are inconsistent with the terms of this
Agreement, the terms of this Agreement shall control.
2.4.2SIZE OF ORDERS. All purchase orders for each Product placed by
Horizon shall be whole number multiples of the production batch
sizes used by AHP. These are set forth below (or as mutually
agreed in writing by the Parties):
Product Batch Size - Expected Yield
Products A and C
1 mg. tablets [***] tablets
Products B and D
2 mg. tablets [***] tablets
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2.5 DELIVERY. AHP shall execute all accepted purchase orders consistent
with this Agreement by delivery ex works to Horizon's designated
carrier at AHP's manufacturing or distribution facility of all ordered
quantities of the Products no later than the delivery dates provided
in Horizon's purchase orders. Title and risk of loss will pass to
Horizon when each order of Products is delivered to the designated
carrier of Horizon at AHP's manufacturing or distribution facility.
2.6 SPECIFICATIONS; CERTIFICATE OF ANALYSIS. As of the time of such
delivery by AHP, each batch of the Products will conform to the
Specifications. AHP shall perform release testing in a manner
consistent with testing methods agreed upon by the Parties. AHP shall
provide to Horizon a Certificate of Analysis with each shipment of the
Products to Horizon or its designated recipient stating that the
Products conform to the Specifications and meet release
specifications. The Certificate of Analysis shall be in a format
agreed upon by the Parties and, if required under cGMP, such
Certificate of Analysis shall include the Specifications and the
results of release testing conducted by AHP on such Products. Upon
Horizon's written request, AHP will also provide Horizon with a copy
of the manufacturing and controls information for the applicable
batch(es) delivered.
2.7 LABELING. Within thirty (30) days after the Effective Date, Horizon,
at its own expense, will provide AHP with Horizon's new labeling for
the Product (including a new NDC number for each Product) bearing
Horizon's corporate name and trade dress. If such labeling is changed
in any manner other than a new NDC number and Horizon's corporate name
and tradedress, such labeling shall be subject to the approval of AHP,
which approval will not be unreasonably withheld. AHP agrees to either
approve or disapprove such labeling within thirty (30) business days
of AHP's receipt thereof from Horizon. AHP, at Horizon's expense, will
print, either directly or through a Third Party, labels and other
printed material to be included as part of the finished Product.
Product manufactured by AHP after AHP's receipt and approval of
Horizon's new labeling for the Product, shall bear such new labeling,
provided, however, that AHP shall have no responsibility with respect
to the content of such labeling, provided the content of the labeling
printed by AHP is the same as the content of the labeling provided by
Horizon. Horizon shall reimburse AHP for all reasonable costs incurred
(on a Fully-Absorbed Cost basis) by AHP in making modifications to
labeling, branding or imprinting, packaging and/or manufacturing
processes to accommodate Horizon's new labeling or to accommodate any
other changes requested by Horizon. Such reimbursement shall be made
pursuant to invoices submitted by AHP to Horizon, which invoices shall
be payable within thirty (30) days after Horizon's receipt thereof. In
addition, should such new labeling result in any increase in AHP's
cost of manufacturing the Product hereunder, the purchase price for
such Product as calculated under Section 5.1 hereof, shall be
increased by such additional costs. Notwithstanding the foregoing, AHP
may supply Horizon with Product bearing AHP's labeling if such Product
was manufactured and labeled prior to the Closing, it being agreed
that Product manufactured from and after the Closing shall bear (i)
AHP's label, or (ii) Horizon's new label.
2.8 PURCHASE OF RESIDUAL INVENTORIES. Upon expiration or upon termination
of this Agreement by AHP, upon AHP's request Horizon shall purchase
from AHP (i) reasonable quantities of AHP's residual inventories of
Products having not less than twelve months' remaining dating at the
then current purchase price as determined in accordance with Section
5.1 hereof, and (ii) reasonable quantities of AHP's residual
inventories of Product specific Materials, including, without
limitation, all labels and other Product specific packaging materials,
but excluding all stocks of Substance and Materials used for the
manufacture of Substance, at AHP's Fully Absorbed Cost for such
Materials.
2.9 INITIAL DELIVERY. AHP agrees to provide initial delivery of Products,
subject to the timely receipt of an appropriate purchase order from
Horizon in accordance with this Article 2, on or before Closing in
accordance with procedures and terms to be set forth in the Systems
Transfer documents developed by the Parties pursuant to Section 3.2 of
the License Agreement.
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3. MANUFACTURE OF PRODUCTS.
3.1 MANUFACTURE OF PRODUCT. AHP agrees to manufacture and supply the
Products in accordance with (i) the Specifications, (ii) the
applicable Regulatory Approvals, as may be amended from time to time,
and (iii) cGMP requirements, and all other applicable laws, rules and
regulations. If
(a) upon Horizon's request the Parties mutually agree to change part
or all of the Product manufacturing process, or
(b) any Product specific change in the applicable Regulatory
Approvals (other than a change included under clause (a) above),
applicable laws, rules or regulations requires a change in the
Product manufacturing process
Horizon shall reimburse AHP for all Fully Absorbed Costs incurred
by AHP in connection with making such changes in the Product
manufacturing process. Additionally, if either making any such
change in the Product manufacturing process or any Product
specific change in the applicable Regulatory Approvals,
applicable laws, rules or regulations requires AHP to conduct
development, testing or other activities (e.g., process
development, stability testing, validation of new specifications,
etc...) (collectively referred to as "Activities") in addition to
those activities AHP conducted or is required to conduct in its
manufacture of the Product immediately prior to such change in
either the Product manufacturing process or the Product specific
applicable Regulatory Approvals, applicable laws, rules or
regulations being implemented, Horizon shall reimburse AHP for
all Fully Absorbed Costs incurred by AHP in connection therewith.
In addition to the foregoing, in the event that the Product
manufacturing process is changed or AHP is required to conduct
Activities in accordance with this Section 3.1, the purchase
price for Product, other than for Product already manufactured
and in inventory, shall be increased in an amount equivalent to
the increase in AHP's manufacturing cost for Product, which
increase shall be effective immediately upon AHP becoming aware
of any proposed changes in the Regulatory Approvals, applicable
laws, rules or regulations which requires either (i) a change in
the Product manufacturing process or (ii) to AHP to conduct
Activities, it will promptly notify Horizon and will consult with
Horizon regarding the proposed changes and Activities, and will
obtain Horizon's written consent prior to implementing the
Activities and the changes, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, in the
event that Horizon requests changes in the manufacturing process,
AHP shall not be obligated to make such change or conduct any
Activities with respect thereto unless the parties mutually agree
to make such change in the Product manufacturing process.
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3.2 PROCUREMENT OF MATERIALS. AHP shall use its Commercially Reasonable
Efforts to timely procure all Materials necessary for the production
of the Products. Title to all such Materials shall reside in AHP.
Notwithstanding the foregoing, AHP's obligation to supply Horizon with
Product hereunder is subject to AHP's ability to obtain from Third
Parties Materials in sufficient quantities to meet Horizon's and AHP's
requirements for the manufacture of Products. AHP may, during any
period of shortage of any Materials, prorate its supply of such
Materials between Horizon and AHP's other uses (e.g., for sales of
Products outside of the Territory or use in products other than
Products) according to the relative quantities purchased/used by each
during the immediately preceding twelve (12) months (or such shorter
period of time that AHP has actually been supplying Product to Horizon
hereunder if such shortage of Materials occurs prior to the first
anniversary of the Effective Date) without regard to price. AHP shall
use Commercially Reasonable Efforts to avoid entirely any such
shortage or, if avoidance is not possible, to limit such period and
amount and shall promptly inform Horizon if it becomes aware of any
potential shortage. [***]
3.3 REGULATORY FILINGS. Horizon shall provide to AHP copies of all annual
reports to the FDA.
3.4 COMPLIANCE WITH LAWS AND REGULATIONS. While the Products are in its
possession or under its control, AHP shall comply with all applicable
federal, state and local statutory and regulatory requirements
regarding the manufacture, packaging, handling and storage of the
Products.
3.5 PRODUCT COMPLAINTS. Horizon shall be solely responsible for
interacting with the public with respect to complaints regarding
Product quality. With respect to any such complaints, each Party shall
have the responsibility for promptly conducting an investigation of
any activities conducted by it under the Transaction Agreements which
may be relevant to the complaint and each Party shall promptly report
the results of such investigation to the other Party. The Parties
shall cooperate in any investigation by the other Party of each such
complaint which involves the Parties' duties under this Agreement.
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4. TECHNOLOGY TRANSFER.
4.1 TRANSFER OF PRODUCT MANUFACTURING KNOW-HOW. As soon as practicable
after Horizon's request, and only if Horizon has complied with all of
its obligations under the Transaction Agreements including, without
limitation, the payment of all fees and payments that become due and
payable prior to such time, AHP shall furnish Horizon with one copy of
the Know-How, including all technical, manufacturing and AHP's other
written information, including but not limited to process sheets, raw
material and process specifications, manuals, vendors lists, and other
writings specifically relating to the Products, which are currently
used by AHP, its Affiliates or sub-contractors to manufacture or have
manufactured Products according to the methods used by AHP or its
Affiliates or subcontractors. AHP agrees that Horizon, its Affiliates
or its permitted sublicensees, may use all Know-How listed in the
preceding sentence for the manufacture of Products for sale in the
Territory.
4.2 TRAINING. In connection with the transfer of information described in
Section 4.1, AHP shall permit a reasonable number of Horizon's
technically skilled personnel and consultants designated by Horizon
(with travel and living expenses paid by Horizon) to make one or more
visits to such facilities of AHP or its Affiliates as may be engaged
in the manufacture of Products for up to an aggregate of thirty (30)
man-days in order to inspect and be instructed in all manufacturing
techniques and procedures used by AHP, its Affiliates or
subcontractors in the manufacture of Products.
4.3 HORIZON'S USE OF KNOW-HOW. Horizon agrees that it shall use all
Know-How provided to Horizon by or on behalf of AHP, its Affiliates or
subcontractors pursuant to the Transaction Agreements for the sole
purpose of making, using and/or selling the Products only in the
Territory and shall not use or permit any Third Party to use such
Know-How for the purpose of making Products for sale outside the
Territory or for use as veterinary pharmaceutical products within or
outside of the Territory. In the event, due to Horizon's failure to
comply with any provision of the Transaction Agreements, such Know-How
is used for the purpose of making Products for either sale outside the
Territory or sale as veterinary pharmaceutical products within or
outside of the Territory during such time period, Horizon shall
immediately cease such use and/or sale and take such action as may be
necessary to prevent a Third Party from using such Know-How for the
purpose of making Products for sale outside the Territory and/or for
sale as veterinary pharmaceutical products within or outside the
Territory. The provisions of this Section shall not limit any other
remedy AHP has on account of the use of such Know-How for the purpose
of making Products for sale outside the Territory or for sale as
veterinary pharmaceutical products within or outside the Territory.
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5. PURCHASE PRICE.
5.1 PRICE. Horizon shall purchase from AHP and AHP shall sell to Horizon
Products at the purchase prices set forth in Schedule 5.1 hereof,
which purchase prices shall be increased once each year by [***].
5.2 FREIGHT, INSURANCE AND TAXES. Horizon shall pay all actual freight,
insurance and government sales tax imposed on purchasers for resale,
and duties and other fees (except tax on income to AHP) incurred in
connection with the sale and shipment of the Products to Horizon.
5.3 PAYMENT. Payments to AHP for the purchase price of delivered Products
(as well as any other payment due from Horizon to AHP under this
Agreement) shall be made by Horizon within thirty (30) days after the
date of invoice, except as to Product orders which are rejected by
Horizon in accordance with the procedures recited in Article 6, or
which the Parties dispute are in conformance with the Specifications.
In the event Product is rejected by Horizon, but is determined to be
Acceptable Product pursuant to Section 6.2 hereof, the payment for
such Product shall be due and payable within ten (10) days after the
determination with respect to such Product is made in accordance with
Section 6.2 hereof.
5.4 MAINTENANCE OF RECORDS; AUDITS. AHP shall keep complete records of
AHP's Fully Absorbed Costs for the manufacture and supply of Products
hereunder, and shall permit an independent certified public accountant
selected by Horizon and reasonably acceptable to AHP, at Horizon's
expense, at the time of (a) any price adjustment under Section 5.1, or
(b) request by AHP for reimbursement of costs incurred under Sections
2.7 and 3.1 hereof, but, in any event, no more than once per year, to
inspect and review such records during normal business hours and upon
reasonable prior notice, in order to verify or determine such costs
and whether an increase in such costs has occurred. The independent
certified public accountant may not disclose to Horizon specific
manufacturing cost breakdowns, but only whether or not the increase in
AHP's Fully Absorbed Cost reported by AHP are correct. Horizon shall
bear the costs and fees associated with such inspections and reviews
unless it is determined by the independent certified public accountant
that such price adjustment was unjustified (in excess of five percent
(5%) more than the price increase determined by the independent
certified public accountant to be justified), in which case AHP shall
bear the costs and fees of such audit and shall promptly refund to
Horizon any overpayments made by Horizon because of such unjustified
price adjustment.
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6. INSPECTION OF PRODUCT.
6.1 INSPECTION; REJECTION OF PRODUCT. Horizon shall analyze representative
samples of each lot of Product delivered to Horizon for purposes of
determining whether the same meets the Specifications and was
manufactured in accordance with the NDA and cGMP ("Acceptable
Product") and, if performed, will do so within thirty (30) days from
the date of delivery of such Products to Horizon's carrier. Horizon
shall notify AHP in writing within said thirty (30) days of any of the
Product or portion thereof, which Horizon is rejecting because it is
not Acceptable Product. If Horizon fails to notify AHP that it is
rejecting a lot of Product within such thirty (30) day period, such
lot of Product shall be deemed to be Acceptable Product. In the event
of a recall of Product, Section 9.1 hereof shall govern.
6.2 THIRD PARTY ANALYSIS. If AHP, after good faith consultation with
Horizon, disputes any finding by Horizon that Product is not
Acceptable Product, representative samples of such Product shall be
forwarded to a Third Party jointly selected by AHP and Horizon, in
their reasonable discretion, for analysis, which analysis shall be
performed in compliance with applicable FDA regulations for retesting
of pharmaceutical products. The findings of such Third Party regarding
whether the Product was Acceptable Product shall be binding upon the
Parties. The cost of such analysis by such Third Party shall be borne
by the Party whose findings differed from those generated by such
Third Party.
6.3 REPLACEMENT OF PRODUCT. AHP shall replace any Product order, or
portion thereof, which is not Acceptable Product (unless such
non-conformance is due to any negligent or wrongful act or omission by
Horizon or its agents or subcontractors), at its cost and expense,
including shipping costs.
6.4 DISPOSITION OF REJECTED PRODUCT. AHP shall instruct Horizon as to the
disposition of any Product order or portion thereof determined not to
be Acceptable Product. At the sole option of AHP, said Product may be
returned to AHP, at AHP's expense including shipping costs, or
destroyed in an environmentally acceptable manner, at AHP's expense.
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7. INSPECTION AND ACCESS TO FACILITY AND RECORDS.
7.1 INSPECTION BY REGULATORY AUTHORITIES. Upon the request of the FDA or
other regulatory agency, such agency shall have access to observe and
inspect AHP's or its Affiliates' facilities and procedures used for
the manufacture, testing or warehousing of the Products and to audit
such facilities for compliance with cGMP and/or other applicable
regulatory standards.
7.2 NOTIFICATION OF INQUIRIES AND INSPECTIONS. AHP also agrees to notify
Horizon within ten (10) business days or such shorter time as may be
required by the notification of the inspection, of any written or oral
inquiries, notifications or inspection activity by the FDA or other
regulatory agency in regard to any Product. AHP shall permit not more
than two (2) Horizon representatives to attend any such inspections,
and shall provide a reasonable description of any such governmental
inquiries, notifications or inspections promptly after such visit or
inquiry. AHP shall furnish to Horizon (i) within ten (10) business
days after receipt, any report or correspondence issued by the FDA or
other governmental agency in connection with such visit or inquiry,
including but not limited to, any FDA Form 483 (List of Inspectional
Observations) or applicable portions of any FDA Warning Letters which
pertain to the Products in the Territory and (ii) not later than ten
(10) business days prior to the time it provides to the FDA or other
regulatory agency, copies of proposed responses or explanations
relating to items set forth above (each, a "Proposed Response"), in
each case redacted of trade secrets or other confidential or
proprietary information of AHP that are unrelated to the obligations
under this Agreement or are unrelated to the Products. AHP shall
discuss with Horizon and consider in good faith any comments provided
by Horizon on the Proposed Response. After the filing of a response
with the FDA or other regulatory agency, AHP will notify Horizon of
any further contacts with such agency relating to the subject matter
of the response.
7.3 INSPECTION BY HORIZON. AHP shall permit Horizon to inspect once
annually that portion of the AHP facility where Product is
manufactured and review such Product documents as is reasonably
necessary for the purpose of assessing AHP's compliance with
applicable regulations. Such inspection and document review shall be
conducted upon reasonable prior notice by Horizon, but not less than
thirty (30) days prior to the proposed inspection, at a time and date
mutually agreeable to the Parties. In addition, in the event Horizon
has received two or more shipments of Product determined not to be
Acceptable Product pursuant to the procedures of Article VI hereof
within a single Calendar Quarter, Horizon shall be permitted to
conduct an additional such inspection to help determine the reason(s)
for delivery of such non-Accepted Product.
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8. WARRANTIES AND INDEMNITIES.
8.1 REPRESENTATIONS AND WARRANTIES OF EACH PARTY. As of the Effective
Date, each of Horizon and AHP hereby represents, warrants and
covenants to the other Party hereto a follows:
(a) it is a corporation or entity duly organized and validly existing
under the laws of the state or other jurisdiction of
incorporation or formation;
(b) the execution, delivery and performance of this Agreement by such
Party has been duly authorized by all requisite corporate action
and do not require any shareholder action or approval;
(c) it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder;
(d) the execution, delivery and performance by such Party of this
Agreement and its compliance with the terms and provisions hereof
does not and will not conflict with or result in a breach of any
of the terms and provisions of or constitute a default under (i)
a loan agreement, guaranty, financing agreement, agreement
affecting a product or other agreement or instrument binding or
affecting it or its property; (ii) the provisions of its charter
or operative documents or bylaws; or (iii) any order, writ,
injunction or decree of any court or governmental authority
entered against it or by which any of its property is bound; and
(e) it shall at all times comply with all applicable material laws
and regulations relating to its activities under this Agreement.
8.2 REPRESENTATIONS AND WARRANTIES OF AHP. In addition to the
representations and warranties made by AHP in Section 8.1 hereof, AHP
hereby represents and warrants to Horizon as follows:
(a) that all Products supplied hereunder conform to the
Specifications, will be (and with respect to the initial delivery
of Product to Horizon hereunder, were) manufactured in accordance
with the applicable Regulatory Approvals and cGMP, and, subject
to Section 2.7 hereof, will not be (and, with respect to the
initial delivery of Product to Horizon hereunder, were not)
adulterated or misbranded while in AHP's possession; and
(b) that it has not and will not use in any capacity the services of
any persons debarred under 21 U.S.C. ss.335(a) or 335(b) in
connection with the manufacture of the Products.
8.3 COVENANTS OF HORIZON. In addition to the representations and
warranties made by Horizon in Section 8.1 hereof and the covenants
made by Horizon elsewhere in this Agreement, Horizon hereby covenants
to AHP that it shall not sell the Products manufactured by AHP
hereunder in countries other than those within the Territory and that
it shall not sell such Products for veterinary use within or outside
the Territory. Horizon further covenants that it shall not sell such
Products to any Third Party which Horizon has reason to believe might
sell the Products in countries other than those within the Territory.
In the case of any such Third Party sales, Horizon shall exercise its
Commercially Reasonable Efforts, consistent with applicable law, to
gain a cessation of such Third Party sales of Products within such
countries, including, to the extent possible, terminating its sales of
Product to such Third Party.
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8.4 NO OTHER WARRANTIES. EXCEPT FOR THE WARRANTIES EXPRESSLY MADE BY AHP
IN SECTIONS 8.1 AND 8.2 HEREOF, AHP MAKES NO OTHER REPRESENTATION OR
WARRANTIES, EITHER EXPRESS OR IMPLIED (WHETHER WRITTEN OR ORAL),
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR ANY
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE
PRODUCTS OR AHP'S OBLIGATIONS HEREUNDER. ADDITIONALLY, EXCEPT FOR THE
WARRANTIES MADE BY HORIZON IN THIS AGREEMENT, HORIZON MAKES NO OTHER
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED (WHETHER WRITTEN
OR ORAL) WITH RESPECT TO HORIZON'S OBLIGATIONS HEREUNDER.
8.5 INDEMNIFICATION BY AHP. AHP shall indemnify, defend and hold harmless
Horizon, its Affiliates and their respective officers, directors,
shareholders, employees, agents and representatives (each a "Horizon
Indemnified Party") from any claims, losses, liabilities, costs,
expenses (including reasonable attorney's fees) and damages to Third
Parties, including any related to property or personal injury (each a
"Liability") which the Horizon Indemnified Party may incur, suffer or
be required to pay resulting from or arising in connection with (a)
the breach by AHP of any representation or warranty contained in this
Agreement; (b) any violation by AHP of any applicable federal, state
or local regulation, statute or order in the manufacture and packaging
of Products arising out of AHP's duties under this Agreement which is
not attributable to printed materials provided by Horizon; or (c) any
negligent act or omission by AHP or its affiliates in carrying out its
obligations under this Agreement. Notwithstanding the foregoing, AHP
shall have no obligations to defend, indemnify or hold harmless any
Horizon Indemnified Party for any Liability that results from the
negligence or intentional misconduct of Horizon, its Affiliates, or
any of its permitted sublicensees or any of their respective officers,
directors, employees, agents, consultants or representatives.
8.6 INDEMNIFICATION BY HORIZON. Horizon shall indemnify, defend and hold
harmless AHP and its Affiliates, and each of its and their respective
employees, officers, directors and agents (each, an "AHP Indemnified
Party") from and against any Liability which the AHP Indemnified Party
may incur, suffer or be required to pay resulting from or arising in
connection with (a) the breach by Horizon of any representation or
warranty contained in this Agreement; (b) materials or promotional
claims (except to the extent that AHP has previously reviewed and
approved the specific material or promotional claim under Section 8.2
of the License Agreement), (c) the manufacture, packaging, promotion,
distribution, testing, use, marketing, sale or other disposition of
Products by Horizon, its Affiliates, its permitted sublicensees or
their respective subcontractors; or (d) the use of the Trademark by
Horizon, its Affiliates, its permitted sublicensees or their
respective subcontractors. Notwithstanding the foregoing, Horizon
shall have no obligations to indemnify, defend, or hold harmless any
AHP Indemnified Party for any Liability that results from the
international misconduct or negligence of AHP, its Affiliates, its
permitted sublicensees or any of their respective employees, officers,
directors or agents, consultants or representatives.
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8.7 CONDITIONS TO INDEMNIFICATION. The obligations of the indemnifying
Party under Sections 8.5 and 8.6 are conditioned upon the delivery of
written notice to the indemnifying Party of any potential Liability
promptly after the indemnified Party becomes aware of such potential
Liability. The indemnifying Party shall have the right to assume the
defense of any suit or claim relating to the Liability if it has
assumed responsibility for the suit or claim in writing; however, if
in the reasonable judgment of the indemnified Party, such suit or
claim involves an issue or matter which could have a materially
adverse effect on the business operations or assets of the indemnified
Party, the indemnified Party may waive its rights to indemnity under
this Agreement and control the defense or settlement thereof, but in
no event shall any such waiver be construed as a waiver of any
indemnification rights such Party may have at law or in equity. If the
indemnifying Party defends the suit or claim, the indemnified Party
may participate in (but not control) the defense thereof at its sole
cost and expense.
8.8 SETTLEMENTS. Neither Party may settle a claim or action related to a
Liability without the consent of the other Party, if such settlement
would impose any monetary obligation on the other Party or require the
other Party to submit to an injunction or otherwise limit the other
Party's rights under this Agreement. Except as otherwise expressly set
forth in this Article 8, any payment made by a Party to settle any
such claim or action shall be at its own cost and expense.
8.9 LIMITATION OF LIABILITY. With respect to any claim by one Party
against the other arising out of the performance or failure of
performance of the other Party under this Agreement, the Parties
expressly agree that the liability of such Party to the other Party
for such breach shall be limited under this Agreement or otherwise at
law or equity to direct damages only and in no event shall a Party be
liable for, punitive, exemplary or consequential damages. The
limitations set forth in this Section 8.9 shall not apply with respect
to the obligations of either Party to indemnify the other under
Sections 8.5 or 8.6 hereof in connection with a Liability to a third
party.
8.10 INSURANCE. Horizon shall obtain and maintain at all times during the
term of this Agreement Commercial General Liability Insurance,
including Products Liability, with limits of liability of not less
than [***] Dollars ($[***]) per occurrence and [***] Dollars ($[***])
in the aggregate. Horizon shall provide AHP with a Certificate of
Insurance evidencing this coverage within thirty (30) days of the
Effective Date. Such insurance policy shall name AHP as an additional
insured and Horizon shall use its Commercially Reasonable Efforts to
ensure such insurance policy contains a provision requiring ten (10)
day advance notification to AHP in the event of its cancellation or
termination. AHP shall maintain self insurance and/or insurance
obtained from Third Party insurers in amounts sufficient to cover its
obligations under Section 8.5. Upon Horizon's written request, AHP
shall provide Horizon with evidence of such insurance coverage.
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9. RECALLS.
9.1 PRODUCT RECALLS. In the event of an actual or threatened recall of any
Product required or recommended by a governmental agency or authority
of competent jurisdiction within the Territory or if recall of any
Product is (i) reasonably deemed advisable by AHP or by Horizon, or
(ii) jointly deemed advisable by AHP and Horizon, such recall shall be
promptly implemented and administered by Horizon in a manner which is
appropriate and reasonable under the circumstances and in conformity
with accepted trade practices. In the event that a recall is caused
because, due to negligent acts or omissions of AHP, its Affiliates or
subcontractors, Product supplied by AHP to Horizon does not conform to
the Specifications or was not manufactured in accordance with the
applicable Regulatory Approvals and cGMP, the cost, including
Horizon's reasonable out-of-pocket expenses, of any such recall shall
be borne by AHP. Horizon shall pay all costs, including AHP's
reasonable out-of-pocket expenses, associated with a recall for any
other reason, including without limitation, recalls (i) caused by
actions of Third Parties occurring after such Product is sold by
Horizon, (ii) due to packaging or label defects for which Horizon has
responsibility or (iii) due to any other breach by Horizon of its
duties under this Agreement.
9.2 NOTICE OF EVENTS THAT MAY LEAD TO PRODUCT RECALL. Each Party shall
keep the other fully and promptly informed of any notification, event
or other information, whether received directly or indirectly, which
might affect the marketability, safety or effectiveness of Products or
might result in a recall of Products by the FDA.
9.3 RECALL DUE TO BREACH BY AHP. In the event of any recall for which AHP
would be responsible for the costs in accordance with Section 9.1
hereof, AHP shall, at the election of Horizon either:
(a) supply Products, without chare to Horizon, in an amount
sufficient to replace the amounts of Products recalled, or
(b) refund to Horizon or give credit to Horizon against outstanding
receivables due from Horizon for the price of Products to be
delivered to Horizon in the future, in amounts equal to the price
paid by Horizon to AHP for Products so recalled plus the
reasonable transportation costs incurred by Horizon and not
recovered by Horizon in respect of such recalled Products.
In addition, if, as a direct result of any recall for which AHP
would be responsible for the costs in accordance with Section 9.1
hereof, Horizon's aggregate sales of Products in any consecutive
thirty (30) day period fall below fifty percent (50%) of
Horizon's average monthly sales of Products for the preceding six
(6) months, then Horizon may postpone payment of the first and
second payments following the recall otherwise due and payable
under Section 4.1(ii) of the License agreement for six (6)
months, after which Horizon shall resume making such payments,
including immediate payment of the two postponed payments.
9.4 DEFINITION OF RECALL. For Purposes of this Article 9, "recall" shall
mean any action by Horizon and its Affiliates, or AHP and its
Affiliates, to recover title or possession or halt distribution,
prescription or consumption of Products sold or shipped to Third
Parties. The term "recall" also applies to Product which would have
been subject to recall if it had been sold or shipped.
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9.5 SURVIVAL OF OBLIGATIONS. The provisions and obligations of this
Article 9 shall survive any termination of this Agreement.
10. TERM AND TERMINATION.
10.1 TERM. This Agreement shall become effective upon the Effective Date of
the License Agreement and, unless earlier terminated as provided
below, shall remain in full force and effect for a period ending on
the second (2nd) anniversary of the Effective Date (the "Term").
Thereafter, the term of this Agreement may be extended by Horizon on
six (6) months' prior written notice for up to six (6) additional
months provided that the Parties agree upon all terms and conditions
of such extension not later than the expiration of the Term. The
Supply Price would be negotiated but shall not be less than AHP's
Fully Absorbed Cost plus a [***] xxxx-up. If the Parties have not
extended the term of this Agreement or signed a new supply agreement
before the expiration of the Term, AHP shall have no obligation to
supply Horizon with any Product after expiration of the Term. Upon
expiration or termination of this Agreement for any reason, all unpaid
amounts due pursuant to Section 5.1 shall become immediately due and
payable.
10.2 TERMINATION BY AHP. AHP may terminate this Agreement, except as
limited hereinafter, immediately upon written notice, in the event
(a) Horizon fails to make any payment due and owing within thirty
(30) days after notice thereof from AHP that such payment has not
been made by Horizon by the date specified in Section 5.3; or
(b) Horizon commits a breach of any material provision of this
Agreement which breach remains uncured for sixty (60) days,
measured from the date written notice of such breach is given to
Horizon, or if such breach is not susceptible of cure within such
sixty (60) day period and Horizon uses good faith efforts to cure
such breach, for one hundred eighty (180) days after written
notice to Horizon; or
(c) the License Agreement is terminated for any reason, other than
AHP's breach of the License Agreement, prior to the expiration of
the Term of this Agreement.
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10.3 TERMINATION BY HORIZON. Horizon may terminate this Agreement, in whole
or with regard to a specific Product as applicable, immediately upon
written notice in the event (a) AHP commits a breach of any material
provision of this Agreement, which is not cured within thirty (30)
days in case of a failure to make any payment due and owing; or (b)
AHP commits a breach of any material provision of this Agreement which
breach remains uncured for sixty (60) days, measured from the date
written notice of such breach is given to AHP, or if such breach is
not susceptible of cure within such sixty (60) day period and AHP uses
good faith efforts to cure such breach, for one hundred eighty (180)
days after written notice to AHP; or (c) the License Agreement is
terminated for any reason other than Horizon's breach of the License
Agreement prior to the expiration of the Term of this Agreement.
10.4 INSOLVENCY. Either party may terminate this Agreement upon the filing
or institution of bankruptcy, reorganization, liquidation or
receivership proceedings, or upon an assignment of a substantial
portion of the assets for the benefit of creditors by the other Party,
or in the event a receiver or custodian is appointed for such party's
business, or if a substantial portion of such Party's business is
subject to attachment or similar process; provided, however, that in
the case of any involuntary bankruptcy proceeding such right to
terminate shall only become effective if the proceeding is not
dismissed within ninety (90) days after the filing thereof.
10.5 EFFECT OF TERMINATION. Upon termination or expiration of this
Agreement, except in the event of termination of the Agreement by AHP
pursuant to Sections 10.2 or 10.4, AHP shall have the obligations set
forth in Sections 4.1 and 4.2. If AHP terminates this Agreement
pursuant to either Section 10.2 or 10.4, the obligations set forth in
Sections 4.1 and 4.2 hereof shall survive termination if Horizon has
made or accelerates payment of all payments to AHP required under
Section 4.1 of the License Agreement, and otherwise the obligations
under Sections 4.1 and 4.2 hereof shall not survive termination. In
the event that Horizon terminates this Agreement pursuant to Section
10.3 hereof because of a failure to supply Product to Horizon which
failure to supply results in an uncured breach of this Agreement by
AHP, Horizon shall thereafter be permitted to manufacture Product
either directly or through a Third Party and the transfer of
manufacturing Know-How under Section 4.1 shall be accomplished as soon
as practicable, but in no event more than thirty (30) days, after this
Agreement is so terminated and the reasonable out-of-pocket costs
incurred by the Parties in transferring such Product manufacturing
responsibilities from AHP to either Horizon, its Affiliates or a Third
Party shall be borne by AHP.
10.6 ACCRUED OBLIGATIONS. Termination of this Agreement for any cause shall
not release either Party from any obligation theretofore accrued.
10.7 NO WAIVER. The failure on the part of either Party to exercise or
enforce any right conferred upon it hereunder shall not be deemed to
be a waiver of any such right nor operate to bar the exercise or
enforcement thereof at any time thereafter.
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10.8 OUTSTANDING ORDERS. Upon termination of this Agreement for any reason
other than pursuant to Sections 10.2 or 10.5 hereof, AHP shall fill
all outstanding purchase orders of Horizon or its Affiliates for the
Products, unless otherwise instructed by Horizon.
10.9 BULK SUBSTANCE. To the extent permitted under the supply agreement
planned to be entered into between AHP and its supplier of Substance
(the "Bulk Substance Supply Agreement"), AHP will use commercially
reasonable efforts to have such supplier enter into a direct supply
agreement for Substance with Horizon upon expiration of this
Agreement, on the same terms and conditions, including price, as the
Bulk Substance Supply Agreement. AHP shall not be required, as part of
its commercially reasonable efforts, to pay any money or provide any
other form of consideration to such supplier. Upon expiration of this
Agreement, if such direct supply agreement is not entered into, AHP
and Horizon will cooperate in a mutually agreeable arrangement under
which to the extent feasible Horizon would obtain the benefits and
assume the obligations of AHP under the Bulk Substance Supply
Agreement as it relates to Substance, including subcontracting to
Horizon, or under which AHP would enforce for the benefit of Horizon,
with Horizon assuming AHP's obligations, any and all rights of AHP
against such supplier. The purpose of such an arrangement would be for
Horizon to obtain price, quantity, destination and delivery date terms
comparable to AHP's rights under the Bulk Substance Supply Agreement.
10.10 SURVIVAL. Subject to Section 10.5 hereof, the following provisions
shall survive expiration or termination of this Agreement: Sections
2.8, 3.3, 4.1, 4.2, 4.3, 5.4, 10.9, 10.10, 12.6 and 12.7 and Articles
8, 9 and 11.
11. CONFIDENTIALITY.
11.1 NONDISCLOSURE OBLIGATION. Each of Horizon and AHP shall use only in
accordance with this Agreement and shall not disclose to any Third
Party any information including, without limitation, Know-How,
received by it from the other Party (the "Information"), without the
prior written consent of the other Party. The foregoing obligations
shall survive the expiration or earlier termination of the last of the
Transaction Agreements to so expire or to be so terminated for a
period of five (5) years. These obligations shall not apply to
Information that:
(i) is known by the receiving Party at the time of its receipt, and
not through a prior disclosure by the disclosing Party, as
documented by business records;
(ii) is at the time of disclosure or thereafter becomes published or
otherwise part of the public domain without breach of this
Agreement by the receiving Party;
(iii) is subsequently disclosed to the receiving Party by a Third
Party who has the right to make such disclosure;
(iv) is developed by the receiving Party independently of the
Information received from the disclosing Party and such
independent development can be documented by the receiving
Party; or
(v) is required by law, regulation, rule, act or order of any
governmental authority or agency to be disclosed by a Party,
provided that notice is promptly delivered to the other Party in
order to provide an opportunity to seek a protective order or
other similar order with respect to such Information and
thereafter the disclosing Party discloses to the requesting
entity only the minimum Information required to be disclosed in
order to comply with the request, whether or not a protective
order or other similar order is obtained by the other Party.
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11.2 PERMITTED DISCLOSURES. Information may be disclosed to employees,
agents, consultants, sublicensees or suppliers of the recipient Party
or its Affiliates, but only to the extent required to accomplish the
purposes of this Agreement and only if the recipient Party obtains
prior agreement from its employees, agents, consultants, sublicensees,
suppliers or Third Party manufacturers to whom disclosure is to be
made to hold in confidence and not make use of such Information for
any purpose other than those permitted by this Agreement. Each Party
will use at least the same standard of care as it uses to protect
proprietary or confidential information of its own to ensure that such
employees, agents, consultants, sublicensees, suppliers or Third Party
manufacturers do not disclose or make any unauthorized use of the
Information.
11.3 DISCLOSURE OF AGREEMENT. Neither Horizon nor AHP shall release to any
Third Party or publish in any way any non-public information with
respect to the terms of this Agreement or concerning their cooperation
without the prior written consent of the other, which consent will not
be unreasonably withheld or delayed, provided, however, that either
Party may disclose the terms of this Agreement to the extent required
to comply with applicable laws, including, without limitation, the
rules and regulations promulgated by the United States Securities and
Exchange Commission, provided, however, that prior to making any such
disclosure, the Party intending to so disclose the terms of this
Agreement shall (i) provide the nondisclosing Party with written
notice of the proposed disclosure and an opportunity to review and
comment on the intended disclosure which is reasonable under the
circumstances and (ii) shall seek confidential treatment for as much
of the disclosure as is reasonable under the circumstances, including,
without limitation, seeking confidential treatment of any information
as may be requested by the other Party. Notwithstanding any other
provision of this Agreement, each Party may disclose the terms of this
Agreement to lenders, investment bankers and other financial
institutions of its choice solely for purposes of financing the
business operations of such Party either (i) upon the written consent
of the other Party or (ii) if the disclosing Party uses reasonable
efforts to obtain a signed confidentiality agreement with such
financial institution with respect to such information on terms
substantially similar to those contained in this Article 11.
11.4 PUBLICITY. Subject to Section 11.3, all publicity, press releases and
other announcements relating to this Agreement or the transactions
contemplated hereby shall be reviewed in advance by, and shall be
subject to the approval of, both Parties. The Party responding to a
request for such approval shall respond to the other Party in writing
within five (5) days of such request.
11.5 WAIVER. AHP agrees that, upon AHP and its supplier of Substance
entering into the Bulk Substance Supply Agreement, AHP shall waive its
rights under the Confidentiality Agreement among AHP, Horizon, EJ
Financial and Mikart, the License Agreement and this Agreement to the
extent such agreements prohibit Horizon from communicating with such
supplier and entering into agreement(s) regarding the Substance with
such supplier.
12. MISCELLANEOUS.
12.1 FORCE MAJEURE. Neither Party shall be liable to the other for delay or
failure in the performance of the obligations on its part contained in
this Agreement if and to the extent that such failure or delay is due
to circumstances beyond its control (including, without limitation,
AHP's inability to obtain, from a Third Party, sufficient quantities
of the raw materials needed for the manufacture of Substance to meet
its manufacturing obligations hereunder) which it could not have
avoided by the exercise of reasonable diligence. It shall notify the
other Party promptly should such circumstances arise, giving an
indication of the likely extent and duration thereof, and shall use
all Commercially Reasonable Efforts to resume performance of its
obligations as soon as practicable.
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12.2 ASSIGNMENT.
12.2.1 ASSIGNMENT BY HORIZON. Horizon may assign any or all of its
right or obligations under this Agreement in the Territory to any
of its Affiliates, for so long as they remain Affiliates. In
addition, Horizon may assign any or all of its rights or
obligations under this Agreement in the Territory in conjunction
with a merger or acquisition of Horizon. Horizon may not
otherwise assign any of its rights or obligations under this
Agreement without AHP's prior written consent, which consent
shall not be unreasonably withheld. AHP shall respond to such
requests by Horizon for assignment within thirty (30) days from
such request. Any permitted assignment shall not relieve Horizon
of its responsibilities for performance of its obligations under
this Agreement.
12.2.2 ASSIGNMENT BY AHP. AHP may assign any or all of its rights or
obligations under this Agreement to any of its Affiliates or to
any Third Party, provided, however, that AHP may assign all or
part of its obligations to a Third Party only after receiving
Horizon's prior written consent, which consent shall not be
unreasonably withheld or delayed; provided, further, that such
assignment shall not relieve AHP of its responsibilities for
performance of its obligations under this Agreement.
Notwithstanding the foregoing, Horizon's consent shall not be
required for any assignment made by AHP in connection with a
merger or similar reorganization of AHP or its parent company or
the sale of all or substantially all of AHP's or AHP's parent
company's pharmaceutical assets.
12.2.3 BINDING NATURE OF ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the successors and permitted
assigns of the Parties. Any assignment not in accordance with
this Section 12.2 shall be void.
12.3 NO WAIVER. The failure of either Party to require performance by the
other Party of any of that other Party's obligations hereunder shall
in no manner affect the right of such Party to enforce the same at a
later time. No waiver by any Party hereto of any condition, or of the
breach of any provision, term, representation or warranty contained in
this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach, or of any other
condition or of the breach of any other provision, term,
representation or warranty hereof.
12.4 SEVERABILITY. If a court or other tribunal of competent jurisdiction
should hold any term or provision of this Agreement to be excessive,
or invalid, void or unenforceable, the offending term or provision
shall be deleted or revised to the extent necessary to be enforceable,
and, if possible, replaced by a term or provision which, so far as
practicable, achieves the legitimate aims of the Parties.
12.5 RELATIONSHIP BETWEEN THE PARTIES. Both Parties are independent
contractors under this Agreement. Nothing herein contained shall be
deemed to create an employment, agency, joint venture or partnership
relationship between the Parties hereto or any of their agents or
employees, or any other legal arrangement that would impose liability
upon one party for the act or failure to act of the other Party.
Neither Party shall have any express or implied power to enter into
any contracts or commitments or to incur any liabilities in the name
of, or on behalf of, the other Party, or to bind the other Party in
any respect whatsoever.
24
[***] - CONFIDENTIAL TREATMENT REQUESTED
12.6 CORRESPONDENCE AND NOTICES.
12.6.1 ORDINARY NOTICES. Correspondence, reports, documentation, and
any other communication in writing between the Parties in the
course of ordinary implementation of this Agreement shall be
delivered by hand, sent by facsimile, overnight courier or by
airmail to the employee or representative of the other Party who
is designated by such other Party to receive such written
communication.
12.6.2 EXTRAORDINARY NOTICES. Extraordinary notices and communications
(including, without limitation, notices of termination, force
majeure, material breach, change of address) shall be in writing
and sent by prepaid registered or certified air mail, or by
facsimile confirmed by prepaid registered or certified air mail
letter, and shall be deemed to have been properly served to the
addressee upon receipt of such written communication.
12.6.3 ADDRESSES. In the case of Horizon, the proper address for
communications and for all payments shall be:
Horizon Pharmaceutical Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxx Xxxxx
Fax: (000) 000-0000
and in the case of AHP, the proper address for communications and
for all payments shall be:
Wyeth-Ayerst Laboratories
000 Xxxxxxxxx Xxxxxx
Xx. Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Senior Vice President, Global Business Development
Fax: (000) 000-0000
with a copy to:
American Home Products Corporation
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Senior Vice President and General Counsel
Fax: (000) 000-0000
25
[***] - CONFIDENTIAL TREATMENT REQUESTED
12.7 CHOICE OF LAW. This Agreement is subject to and governed by the laws
of the State of Delaware, excluding its conflict of law provisions.
12.8 ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with the other
Transaction Agreements and the Confidential Disclosure Agreement
between AHP and X.X. Financial Enterprises Inc. (an equity holder in
Horizon) dated April 28, 1998, and all the covenants, promises,
agreements, warranties, representations, conditions and understandings
contained herein and therein sets forth the complete, final and
exclusive agreement between the Parties and supersedes and terminates
all prior and contemporaneous agreements and understandings between
the Parties, whether oral or in writing. There are no covenants,
promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the Parties other than
as are set forth in the Transaction Agreements. No subsequent
alteration, amendment, change, waiver or addition to this Agreement
shall be binding upon the Parties unless reduced to writing and signed
by an authorized officer of each Party. No understanding, agreement,
representation or promise, not explicitly set forth herein, has been
relied on by either Party in deciding to execute this Agreement.
12.9 HEADINGS. The headings and captions used in this Agreement are solely
for the convenience of reference and shall not affect its
interpretation.
12.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be an original and all of which shall
constitute together the same document.
12.11 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all other acts, as may be
necessary or appropriate in order to carry out the purposes and intent
of this Agreement including, without limitation, any filings with any
antitrust agency which may be required.
IN WITNESS WHEREOF, this Agreement has been executed by the duly authorized
representatives of the Parties as of the date set forth below.
AMERICAN HOME PRODUCTS CORPORATION HORIZON PHARMACEUTICAL CORPORATION
By:___________________________________ By:___________________________________
Name:_________________________________ Name:_________________________________
Title:________________________________ Title:________________________________
26
SCHEDULE 1.19
SPECIFICATIONS
PRODUCT SPECIFICATIONS ARE SET FORTH ON THE FOLLOWING 22 PAGES
27
[***] - CONFIDENTIAL TREATMENT REQUESTED
GENERAL PRODUCT INFORMATION
LABEL CLAIM: [***]
DOSAGE FORM: [***]
LOT SIZE: [***]
PACKAGE SIZE: [***]
PRODUCT CODE: [***]
NDA NO.: [***]
RX OR OTC: [***]
OFFICIAL NF OR USP: [***]
DEA CLASS: [***]
FORM 6 NO.: [***]
EXPIRATION DATE: [***]
MFD. BY: [***]
TABLE OF CONTENTS
PAGE 2 - GENERAL PRODUCT INFORMATION
PAGE 3 - IN-PROCESS - DURING COMPRESSION
PAGE 7 - BULK FINISHED PRODUCT - AFTER COMPRESSION
PAGE 17 - REGULATORY SPECIFICATIONS AND METHODS
PAGE 19 - PACKAGED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
28
[***] - CONFIDENTIAL TREATMENT REQUESTED
GENERAL PRODUCT INFORMATION
AFTER COMPRESSION
SAMPLING
This sample is the composite of in-process samples collected during the
compression of the lot and shall consist of at least [***] tablets.
TESTS
Description
Specification: A white, round, flat-face, beveled-edge, compressed
tablet, [***] mm in diameter and [***] mm thick.
One side is engraved AHR-[***], the obverse side is
scored. Odor shall be characteristic of product.
Test: [***]
Weight (Average of [***] Tablets)
Specification: Theoretical average weight [***]
Acceptable range [***]
Test: Record the average tablet weight of [***] tablets as
determined from [***].
Dissolution - Glycopyrrolate
Specification: [***]
Principle [***]
Reagants [***]
Calculation [***]
Discussion
Start-up and Shut-down of System
[***]
29
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GENERAL PRODUCT INFORMATION
Specification: [***]
Reagants: [***]
Procedure [***]
Calculation [***]
[***]
Calculation [***]
Discussion
Start-up and Shut-down of System
[***]
Specification: [***]
Reagents [***]
Procedure [***]
Calculation [***]
[***]
Uniformity of Dosage Units
Method: [***]
Specification: [***]
30
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GENERAL PRODUCT INFORMATION
Test: [***]
Principles [***]
Apparatus [***]
Reagents [***]
Procedure 1. [***]
2. [***]
3. [***]
Calculation [***]
31
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BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
[***]
32
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
[***]
33
[***] - CONFIDENTIAL TREATMENT REQUESTED
GENERAL PRODUCT INFORMATION
ACCEPT/REJECT
[***]
1. [***]
2. [***]
34
[***] - CONFIDENTIAL TREATMENT REQUESTED
GENERAL PRODUCT INFORMATION
INSPECTION
During the packaging of the product at X. X. Xxxxxx Company, the following
[***].
PRODUCT IDENTIFICATION
[***]
SHELF SAMPLE
[***]
NET CONTENTS OF CONTAINERS
Specification: [***]
Test: [***]
BOTTLES AND CAPS
Specification: Complies with standard
Test: Each bottle sampled shall be
examined for the following:
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
6. [***]
7. [***]
35
[***] - CONFIDENTIAL TREATMENT REQUESTED
GENERAL PRODUCT INFORMATION
LABELS
Specification: Complies with standard
Test: The label of each bottle sampled
shall be examined for the following:
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
CARTONS
Specification: Complies with standard
Test: Each carton sampled shall be
examined for the following:
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
INSERTS
Specification: Complies with standard
Test: The insert of each bottle sampled
shall be examined for the following:
1. [***]
2. [***]
3. [***]
4. [***]
36
[***] - CONFIDENTIAL TREATMENT REQUESTED
GENERAL PRODUCT INFORMATION
STANDARDS
[***]
ACCEPT/REJECT
[***]
1. [***]
2. [***]
Specification Approved May, 1990
Xxxxxx X. Xxxxxxxxx, Xx. A. Xxxxx Xxxxxx
Director, Quality Assurance Vice President, GMP
X. X. Xxxxxx Company X. X. Xxxxxx Company
-------------------------------------- -----------------------------------
37
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
GRAPHIC
WHITEHALL
ROBINS
WHITEHALL ROBINS
ANALYTICAL DEVELOPMENT - TEST METHOD
Method: [***]
WH#/Product: [***]
Method#: [***]
Date:
Supersedes: [***]
Developed by: [***]
Checked by:
Reviewed by:
38
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
COMPOSITE ASSAY FOR GLYCOPYRROLATE [***]
Reagents
[***]
Apparatus
[***]
Preparation of Standard Solution
NOTE: Prepare this solution fresh daily.
1. [***]
2. [***]
3. [***]
4. [***]
39
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BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
Preparation of Sample Solution
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
Procedure
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
40
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
6. [***]
7. [***]
Manual Calculations
[***]
41
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BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
where:
Au = absorbance of sample
As = absorbance of standard
Ws = weight of standard, in mg
n = number of tablets used
CONTENT UNIFORMITY FOR [***] [***]
Reagents
Refer to section under [***].
Apparatus
Refer to section under [***].
Preparation of Standard Solution
Refer to section under [***].
42
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BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
Preparation of Sample Solution
1. [***]
2. [***]
3. [***]
4. [***]
Procedure
Refer to section under [***].
Manual Calculations
[***]
For [***] tablets:
43
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BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
[***]
For [***] tablets:
[***]
44
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BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
[***]
where:
Au = absorbance of sample
As = absorbance of standard
Ws = weight of standard, in mg
45
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
SCHEDULE 5.1
INITIAL PURCHASE PRICES
Product Strength Package Size AHP NDC# Initial Purchase Price
Robinul tablets 1 mg bottles of 100 7824-63 $ [***]
Robinul tablets 2 mg bottles of 100 7840-63 $ [***]
Robinul tablets 2 mg bulk N/A $ [***] per [***]
Robinul tablets 2 mg bulk N/A $ [***] per [***]
46
EXHIBIT G
PENDING LIABILITIES
1. The following civil actions are pending with respect to AHP's sale of the
Product in the Territory:
Xxxxxxxxx x. Xxxxx, et al., Superior Court of California,
County of Xxx Xxxxx, Xx. 000000
