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Exhibit 10.18
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.
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (the "Agreement") is made and entered into as of
April 14, 2000 (the "Effective Date"), by and between XXXXXX-XXXXXXX COMPANY, a
corporation organized and existing under the laws of Delaware ("SUPPLIER"), and
FIRST HORIZON PHARMACEUTICAL CORPORATION, a corporation organized and existing
under the laws of Delaware ("PURCHASER"). Capitalized terms not otherwise
defined herein shall have the meanings set forth in Article 1.
WITNESSETH:
WHEREAS, on the date hereof, PURCHASER has purchased the Product from
SUPPLIER pursuant to an asset purchase agreement between SUPPLIER and PURCHASER
dated as of April 10, 2000 (the "Asset Purchase Agreement");
WHEREAS, PURCHASER does not have immediate capacity for manufacturing
or causing to be manufactured the Products, Active Ingredient or Samples;
WHEREAS, pursuant to the terms of the Asset Purchase Agreement,
SUPPLIER has undertaken to supply Product, Active Ingredient and Samples to
PURCHASER;
WHEREAS, SUPPLIER is a manufacturer with adequate capacity for
manufacturing PURCHASER's Product and Samples and has access to sources of
Active Ingredient;
WHEREAS, the parties desire to enter into a Supply Agreement pursuant
to which SUPPLIER shall supply the Products, Active Ingredient and Samples to
PURCHASER; and
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises contained herein, the parties agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms will have the meanings
set forth below:
"Active Ingredient" means mefenamic acid.
"Affiliate" means (i) any company or entity, more than fifty percent
(50%) of whose voting stock or participating profit interest is owned or
controlled, directly or indirectly, by a party; (ii) any company, entity or
person which owns or controls, directly or indirectly, more than fifty percent
(50%) of the voting stock or participating profit interest of a party and (iii)
any company, entity or person which is under common control with a party
hereto. The term "common control" means a third party has direct or indirect
ownership of fifty percent (50%) or more of the voting
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stock or participating profit interest of both the other company or entity and
the party to this Agreement.
"Asset Purchase Agreement" has the meaning set forth in the Recitals.
"Business Day" means a day during which banks are generally open for
business in New York.
"FDA" means the Food and Drug Administration of the United States.
"GMPs" means current Good Manufacturing Practices.
"New Drug Application" means the new drug application relating to the
Product.
"Product" means the finished pharmaceutical product containing the
Active Ingredient supplied pursuant to this Agreement and set forth in Schedule
A.
"Production Fee" means the fees payable pursuant to Sections 2.2, 2.3
and 2.4.
"Proprietary Information" has the meaning set forth in Section 6.1.
"Raw Materials" means all raw materials and packaging materials
(including labeling), other than the Active Ingredient, needed to produce the
Product.
"Reimbursement Amount" has the meaning set forth in Section 5.3.
"Samples" has the meaning set forth in Section 2.4.
"Specifications" means the specifications and procedures currently
utilized by SUPPLIER in testing Raw Materials and the Active Ingredient and in
manufacturing and testing the Product which are according to the New Drug
Application for the Product in effect on the date hereof or such other
manufacturing specifications as are mutually agreed upon in writing by the
parties hereto, including all stability requirements set forth therein.
"Territory" means the United States of America and Puerto Rico.
2. PRODUCTION ARRANGEMENT.
2.1 Appointment. PURCHASER hereby appoints SUPPLIER and SUPPLIER
hereby agrees to be a supplier of the Product, Active Ingredient and Samples to
PURCHASER pursuant to and for the term of this Agreement.
2.2 Agreement to Supply and Purchase the Product. (a) During the
term of this Agreement, SUPPLIER shall use its commercially reasonable efforts
to supply to PURCHASER the Product in such quantities and on such dates as set
forth in Schedule A hereto, subject to SUPPLIER's ability to complete any
required packaging and labeling changes. In the event SUPPLIER is unable to
supply the Product to PURCHASER on a delivery date set forth on Schedule A, for
a reason other than SUPPLIER's inability to complete packaging and labeling
changes in time, SUPPLIER shall use its commercially reasonable efforts to
deliver such Product as soon as practicable thereafter, but in any event, no
later than thirty (30) days after the applicable delivery date.
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(b) PURCHASER shall purchase from SUPPLIER Product in the
quantities and on the delivery dates set forth in Schedule A. In the event
PURCHASER fails at any time to purchase all Product manufactured and made
available for delivery by SUPPLIER as specified in this Section 2.2(b),
PURCHASER shall pay to SUPPLIER an amount equal to the total Production Fee
which would have otherwise been paid to SUPPLIER had PURCHASER purchased the
quantity specified on Schedule A on the applicable date.
2.3 Active Ingredient and Raw Materials. (a) SUPPLIER will at all
times acquire, at its own cost and expense, the Active Ingredient and Raw
Materials, in such quantities as are necessary to enable SUPPLIER to
manufacture and supply the desired quantities of the Product during the term of
this Agreement. SUPPLIER will perform all quality control procedures with
respect to the Active Ingredient and Raw Materials in accordance with the
Specifications.
(b) SUPPLIER will use its commercially reasonable efforts to
provide PURCHASER with the Active Ingredient in the quantity, on the delivery
date and at the price set forth on Schedule B hereto. In the event SUPPLIER is
unable to supply the Active Ingredient to PURCHASER on the delivery date set
forth on Schedule B, SUPPLIER shall use its commercially reasonable efforts to
deliver such Active Ingredient as soon as practicable thereafter, but in any
event, no later than thirty (30) days after the original delivery date.
2.4 Product Samples. SUPPLIER shall use its commercially
reasonable efforts to provide PURCHASER with samples of the Product ("Samples")
in such quantity, on the delivery dates and at the prices set forth on Schedule
C hereto, provided, PURCHASER delivers to SUPPLIER a purchase order for the
desired quantity of Samples at least ten (10) Business Days before the
beginning of the applicable delivery date option selected by PURCHASER. In the
event SUPPLIER is unable to supply the Samples to PURCHASER on the applicable
delivery date set forth on Schedule C, SUPPLIER shall use its commercially
reasonable efforts to deliver such Samples as soon as practicable thereafter,
but in any event, no later than thirty (30) days after the applicable delivery
date.
3. DELIVERY AND ACCEPTANCE.
3.1 Delivery. The Products shall be delivered to a carrier
designated by PURCHASER at SUPPLIER's plant in Lititz, Pennsylvania, or
SUPPLIER's distribution center in Elk Grove Village, Illinois, as PURCHASER
shall direct. Title to and risk of loss for the Product shall transfer to
PURCHASER upon delivery to PURCHASER at the designated location.
3.2 Acceptance of Shipments. After receipt of a shipment of
Products, Active Ingredient or Samples, PURCHASER shall within ten (10)
Business Days after delivery thereof, visually inspect the Product shipment and
communicate acceptance or rejection to Seller in writing. The parties agree
that PURCHASER's visual inspection consists of (i) comparing the applicable
order against the documentation accompanying the shipment to verify that the
delivery date, identity, quantity and exterior shipment labeling comply with
the order and (ii) visually inspecting the exterior of the shipment to verify
that the shipment appears to be in good condition.
3.3 Failure to meet Specifications. In addition, after the date of
acceptance by PURCHASER pursuant to Section 3.2, PURCHASER shall be entitled to
return any shipment of Product, Active Ingredient or Samples, in whole or in
part, to the extent that such Product,
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Active Ingredient or Samples fail to meet Specifications (as such
Specifications existed on the date of delivery), where such failure is due
solely to the actions or omissions of SUPPLIER.
4. PRODUCTION FEE AND PAYMENT.
4.1 Production Fees. Subject to Section 2.2(b), PURCHASER will pay
SUPPLIER the applicable Production Fees for Product (including costs of Active
Ingredient, Raw Materials, manufacturing, filling, inspecting, quality control,
stability testing and packaging), Active Ingredient and Samples delivered to
PURCHASER hereunder.
4.2 Invoices. SUPPLIER will issue an invoice PURCHASER for the
full Production Fee with each shipment of the Product, Active Ingredient or
Samples delivered in accordance with Section 3.1. SUPPLIER will invoice
PURCHASER for all other amounts due hereunder on or after performance or
occurrence of the event that entitles SUPPLIER to be paid such amount by
PURCHASER. All invoices hereunder will be due and payable within thirty (30)
days after receipt of the invoice by PURCHASER.
4.3 Taxes. In addition to payment of the Production Fee, PURCHASER
will be responsible for the payment of any sales and use taxes on the Product,
Active Ingredient or Samples delivered by SUPPLIER to PURCHASER.
5. QUALITY CONTROL.
5.1 Manufacturing Process and Quality Assurance. The Product will
be manufactured by SUPPLIER in compliance with applicable laws and the
Specifications and in accordance with the manufacturing, quality assurance and
validation procedures currently employed by SUPPLIER in manufacturing the
Product or such other procedures as may be mutually agreed upon, or as may be
required under the New Drug Application.
5.2 Modifications. Any request for modification of the
Specifications (including a change of the Raw Materials or Active Ingredient)
will be made by the requesting party to the other party in writing. SUPPLIER
will inform PURCHASER of the amount of any additional costs (including capital
expenditures) that any such modification would reasonably entail, if any, and,
if PURCHASER elects to adopt the modification, the Production Fee will be
increased by the amount of such additional costs, and the relevant documents
and related schedules will be revised accordingly. If SUPPLIER is technically
unable to comply with a modification proposed by PURCHASER or if PURCHASER is
unwilling to pay the additional costs associated with any modification, the
requesting party will have the option to withdraw the proposed modification or,
if the requesting party can demonstrate that it reasonably requires such
modification for business or regulatory reasons, to terminate this Agreement.
Each party will notify the other party as soon as reasonably possible of any
proposed changes to the Specifications, procedures or other areas that have an
impact on the other party's performance of this Agreement. In no event will
SUPPLIER be required to make (or not to make) a modification that it deems
prohibited (or required) by applicable regulations or regulatory authorities.
Notwithstanding the foregoing, SUPPLIER shall not have the right to terminate
this Agreement pursuant to this Section 5.2 if PURCHASER is unwilling to pay
the additional costs associated with any modification proposed by SUPPLIER,
other than modifications that are required for regulatory reasons.
5.3 Testing. SUPPLIER will perform such quality assurance testing
as required under the New Drug Application, and will provide evidence of such
testing to PURCHASER in a
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certificate of analysis for each product lot which confirms that the product
lot has been manufactured and analyzed by SUPPLIER according with the
Specifications. SUPPLIER shall provide a copy of the applicable certificate of
analysis to PURCHASER with each product lot that is delivered to PURCHASER or
by facsimile on the date of delivery.
5.4 Reimbursement for Non-Conforming Product. If the Product fails
to meet the Specifications, where such failure is due solely to the actions or
omissions of SUPPLIER, SUPPLIER will credit PURCHASER with the Reimbursement
Amount. The "Reimbursement Amount" will be deemed equal to the sum of any costs
reasonably expended by PURCHASER in order to identify the defect (i.e.,
testing), plus all Production Fees paid on account of the subject Product. The
Reimbursement Amount will be payable sixty (60) days after rejection of the
subject Product in accordance with this Section. At PURCHASER's option, (i)
SUPPLIER will be relieved of any obligation to deliver any Product with respect
to the non-conforming batch, or (ii) SUPPLIER will replace the non-conforming
batch with substitute Product that conforms with the Specifications and any
other requirements of this Agreement, within sixty (60) calendar days from the
date PURCHASER notifies SUPPLIER of its election of option (ii) of this Section
5.4, in which case PURCHASER will pay to SUPPLIER amounts in accordance with
Article 4 based on the substitute Product. SUPPLIER will dispose of the
non-conforming Product at its own expense This Section 5.4 sets forth
PURCHASER's sole remedy for non-conforming Product that is identified before
sale thereof by PURCHASER to PURCHASER's customer, and under no circumstances
will SUPPLIER be liable to PURCHASER for any damages, including, without
limitation, direct, special, incidental or consequential damages (including,
without limitation, loss of business, profits, or goodwill), arising therefrom
(whether in contract, tort, negligence or otherwise) or in connection with its
performance under this Agreement.
5.5 Access for Quality Control. Subject to SUPPLIER's reasonable
ability to assure the confidentiality of its other projects, SUPPLIER will
permit PURCHASER's representatives to enter SUPPLIER's plant upon reasonable
advance written notice and at reasonable intervals during regular business
hours solely for the purpose of making quality control inspections of the
facilities used in production of the Product for PURCHASER, including
manufacturing, receiving, sampling, analyzing, storing, handling, packaging,
shipping and disposing of the Active Ingredient and the Product. In addition,
the parties agree that a member of SUPPLIER's pharmaceutical quality assurance
team shall be present at all such inspections.
6. CONFIDENTIAL INFORMATION.
6.1 Confidentiality. PURCHASER and SUPPLIER will at all times
maintain as confidential any information, technology, formulation, process,
packaging, analytical methods, stability data, registration data or know-how of
a proprietary or confidential nature relating to the Product disclosed by the
other party pursuant to or in connection with this Agreement (the "Proprietary
Information"); provided, however, that the term "Proprietary Information" does
not include information which becomes available to the receiving party
following the date of this Agreement on a non-confidential basis from a source
other than the disclosing party, its representatives or Affiliates, if such
source is not under an obligation, (whether contractual, legal or fiduciary) to
the disclosing party, its representatives or its Affiliates to keep such
information confidential.
6.2 Survival of Confidentiality. PURCHASER and SUPPLIER hereby
agree that the provisions of this Article 6 and the obligations of
confidentiality herein will endure for a period of five (5) years after the
expiration or termination of this Agreement; provided, however, that with
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respect to Proprietary Information regarding, arising out of, relating to,
reflecting, incorporating or based upon scientific, technological (including,
without limitation, analytical, manufacturing or formulation technology),
regulatory or compliance matters, the obligations of confidentiality herein
will not terminate.
7. INDEMNIFICATION.
7.1 Indemnification of SUPPLIER. PURCHASER will defend, indemnify,
and hold harmless SUPPLIER, its officers, agents, employees and Affiliates from
any loss, claim, action, damage, penalty, fine, expense or liability (including
reasonable defense costs and attorneys fees) ("Claim") to the extent the same
arises out of or is related to (a) the breach of any representation, warranty
or guarantee made by PURCHASER herein, (b) the handling, possession or use of
the Product following delivery to PURCHASER in accordance with Section 3.1
including, without limitation, express and implied warranties of
merchantability, fitness for a particular purpose and strict liability, unless
the claim results from the applicable Product failing to conform to the
Specifications, where such non-compliance is due solely to the actions or
omissions of SUPPLIER or (c) any other negligent act or omission of PURCHASER.
7.2 Indemnification of PURCHASER. SUPPLIER will defend, indemnify,
and hold harmless PURCHASER, its officers, agents, employees and Affiliates
from any Claim to the extent the same arises out of or is related to (a) the
breach of any representation, warranty or guarantee made by SUPPLIER herein or
(b) any other negligent act or omission of SUPPLIER.
7.3 Indemnification Procedures. In any case under this Agreement
where one party has indemnified the other against any claim or legal action,
indemnification will be conditioned on compliance with the procedure outlined
below. Provided that prompt notice is given of any claim or suit for which
indemnification might be claimed, the indemnifying party promptly will defend,
contest or otherwise protect against any such claim or suit (including by way
of settlement and release) at its own cost and expense. The indemnified party
may, but will not be obligated to, participate at its own expense in a defense
thereof by counsel of its own choosing, but the indemnifying party will be
entitled to control the defense unless the indemnified party has relieved the
indemnifying party from liability with respect to the particular matter. If the
indemnifying party fails timely to defend, contest or otherwise protect against
any such claim or suit, the indemnified party may, but will not be obligated
to, defend, contest or otherwise protect against the same, and make any
compromise or settlement thereof and recover the entire costs thereof from the
indemnifying party, including reasonable attorneys fees, disbursements and all
amounts paid as a result of such claim or suit or the compromise or settlement
thereof; provided, however, that if the indemnifying party undertakes the
timely defense of such matter, the indemnified party will not be entitled to
recover from the indemnifying party its costs incurred in the defense thereof.
The indemnified party will cooperate and provide such assistance as the
indemnifying party may reasonably request in connection with the defense of the
matter subject to indemnification.
8. RECALLS.
8.1 Recalls. If any Product must be recalled by reason of failure
to meet the Specifications, any requirements of the FDA or any other
requirements of law, PURCHASER will pay all costs and expenses in order to
effect the recall unless such recall is caused by a failure of the Product to
meet the Specifications, where such failure is due solely to the actions or
omissions of SUPPLIER. However, SUPPLIER will, in any event, comply with any
regulatory
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obligations arising from its status as manufacturer of the recalled Product,
and otherwise cooperate as reasonably required in PURCHASER's efforts.
8.2 Reimbursement by PURCHASER. PURCHASER will reimburse SUPPLIER
for any costs reasonably expended by SUPPLIER to effect the recall, including
any cost associated with the Product that cannot be shipped due to the
condition requiring the recall, unless the recall is required due to the
failure of the Product to meet the Specifications, where such failure is due
solely to the actions or omissions of SUPPLIER.
8.3 Reimbursement by SUPPLIER. If PURCHASER can demonstrate that
the failure to meet applicable legal requirements is caused by failure of the
Product to meet the Specifications, where such failure is due solely to the
actions or omissions of SUPPLIER, SUPPLIER will reimburse PURCHASER for (a) any
cost reasonably expended by PURCHASER to effect the recall and (b) the
Reimbursement Amount in accordance with Section 5.4.
9. RECORDS AND AUDITS.
9.1 Hold Period. For one (1) year after the expiration date of any
particular Product batch(es), or longer if required by law (the "Hold Period"),
each party will maintain, as applicable, records and samples relating to such
batch(es) sufficient to substantiate and verify its duties and obligations
hereunder, including but not limited to, records of orders sent and received,
Product manufactured, work in progress, Product analyses and quality control
tests, distribution of the Product and the like. During the Hold Period,
neither party will destroy any records relating to regulatory compliance or
quality assurance without giving the other party advance written notice and an
opportunity to take possession of or copy such records.
9.2 Notice of FDA Actions. Each party agrees to advise the other
party in a timely manner of any actions by the FDA with respect to the Product.
Such notice remains subject, in all respects, to the provisions of Article 6.
10. TERM AND TERMINATION.
10.1 Term. Subject to the termination provisions of Section 10.2,
this Agreement will expire on December 31, 2000. This Agreement may be extended
by mutual agreement of the parties hereto for an additional three (3) months.
10.2 Termination. Each party will have the right to terminate this
Agreement (i) by giving the other party written notice thereof if the other
party fails to perform or violates any material provision of this Agreement in
any material respect, and such failure continues unremedied for a period of
thirty (30) days after the date the notifying party gives written notice to the
defaulting party with respect thereto; or (ii) immediately if the other party
is declared insolvent or bankrupt by a court of competent jurisdiction, or a
voluntary petition of bankruptcy is filed in any court of competent
jurisdiction by the other party, or the other party makes or executes any
assignment for the benefit of creditors.
10.3 Effect of Termination. Unless otherwise agreed to between the
parties, all stock on hand as of the effective date of expiration or
termination of this Agreement will be treated as follows as soon as
practicable:
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(a) Product manufactured and packaged pursuant to Schedule A will
be delivered by SUPPLIER to PURCHASER, whereupon PURCHASER will pay SUPPLIER
therefor in accordance with the terms hereof; and
(b) Work in progress commenced by SUPPLIER in accordance with the
manufacturing schedule set forth on Schedule D attached hereto will, at the
option of PURCHASER (but at the option of SUPPLIER in the case of termination
hereof by SUPPLIER under Section 10.2), (i) cease, and such work in progress
will remain with SUPPLIER (in which case PURCHASER will pay SUPPLIER an amount
equal to SUPPLIER's actual costs incurred in connection with the performance
and cessation of such work less the cost to SUPPLIER of materials that can be
returned by SUPPLIER or used by SUPPLIER in later batches of other products
manufactured by SUPPLIER as reasonably determined by SUPPLIER) or (ii) be
completed by SUPPLIER and delivered to PURCHASER, whereupon PURCHASER will pay
SUPPLIER therefor in accordance with the terms hereof; provided, however, that
in the case of expiration under Section 10.1, PURCHASER will not have such
option and will proceed under clause (ii) of this provision.
10.4 No Release. The expiration or termination of this Agreement
will not operate to release any party from any liability incurred prior to or
upon termination hereof or which subsequently arises under the operation of
Article 22.
11. REGULATORY MATTERS.
11.1 Compliance. Each party will provide reasonable assistance to
the other if necessary to respond to FDA audits, inspections, inquiries or
requests concerning the Product or otherwise necessary to comply with GMPs.
PURCHASER's employees present at the facility will at all times adhere to
safety regulations, GMPs and work schedules generally applicable to SUPPLIER's
own employees.
11.2 USP Monograph. It is understood and agreed by the parties that
if the USP establishes a monograph for the Product that conflicts with the
Specifications, the Product labeling shall be modified to reflect this fact in
accordance with the Federal Food, Drug, and Cosmetic Act ("FFDCA").
11.3 Compliance Audits. Each party will notify the other party
within twenty four (24) hours after it receives notice of an FDA or other
domestic regulatory authority audit involving the Product or any component
thereof and will provide to such party copies of any resulting document of
action (FDA Form 483 inspectional observation report, regulatory letters, etc.)
or of relevant sections thereof, resulting from these audits within five (5)
Business Days after receipt (solely to the extent such documents directly
relate to the Product).
12. TRADEMARKS AND LABELING.
12.1 Trademarks and Labeling. (a) PURCHASER shall provide SUPPLIER
with labeling instructions prior to or on the Effective Date. SUPPLIER will
affix labeling to the Product as instructed by PURCHASER. PURCHASER shall pay
all costs incurred by SUPPLIER in connection with the implementation of labels
bearing PURCHASER's name and trademark. Nothing contained herein will give
PURCHASER any right to use any SUPPLIER trademark and PURCHASER will not obtain
any right, title or interest in any SUPPLIER trademark by virtue of this
Agreement or the performance by SUPPLIER of services hereunder; provided,
however, that SUPPLIER will permit PURCHASER to use SUPPLIER's trademark in
connection with the
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Product to the extent permitted under the Asset Purchase Agreement or required
by applicable law or regulation.
(b) SUPPLIER and PURCHASER shall use their best efforts to
complete the conversion of labels to PURCHASER's name and trademark for Product
having a delivery date on or after July 31, 2000.
(c) As between PURCHASER and SUPPLIER, PURCHASER shall be solely
responsible for ensuring that approved Product labels, Product inserts and
other printed materials, if any, comply with all applicable laws, provided,
however, that SUPPLIER warrants that Product supplied hereunder prior to the
conversion of labels to PURCHASER's name and trademark in accordance herewith
shall comply with the NDA as it exists on the date hereof.
(d) No change to Product labels or Product inserts may be made
without the prior written approval of PURCHASER.
13. RELATIONSHIP OF PARTIES.
13.1 Independent Contractors. It is not the intent of the parties
hereto to form any partnership or joint venture. Each party will, in relation
to its obligations hereunder, act as an independent contractor, and nothing in
this Agreement will be construed to give either party the power or authority to
act for, bind or commit the other party in any way whatsoever.
13.2 Public Statements. SUPPLIER and PURCHASER each agree not to
disclose the terms or status of this Agreement in any public statements,
whether oral or written, including but not limited to shareholder reports,
communications with stock market analysts, statements to other customers or
prospective customers, press releases or other communications with the media,
or prospectuses, without the other party's prior written consent, which will
not be unreasonably withheld, or as required by applicable law. If possible,
each party will give the other at least five (5) Business Days advance written
notice of a disclosure required by applicable law and will cooperate with the
other party to minimize the scope and content of such disclosure.
14. WARRANTIES.
14.1 SUPPLIER's Warranty. SUPPLIER hereby represents and warrants
as follows:
(a) The Product will conform with the Specifications.
(b) Subject to Section 5.2(b) of the Asset Purchase Agreement,
SUPPLIER will comply in all material respects with any law, regulation,
ordinance, order, injunction, decree or requirement applicable to the
manufacture of the Product (including GMPs); provided that PURCHASER will
reimburse SUPPLIER for any increased costs that SUPPLIER reasonably incurs;
(and cannot reasonably defer) in manufacturing the Product, or operating the
facility in which the Product is manufactured, as a result of any change in
such laws or regulations.
(c) SUPPLIER will maintain in effect all material governmental
permits, licenses, orders, applications and approvals required of it and make
all filings and notifications required of it regarding the manufacturing of the
Product; and SUPPLIER will manufacture Products in material compliance with all
such permits, licenses, orders, applications and approvals.
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(d) SUPPLIER and SUPPLIER's employees and Affiliates have never
been (i) debarred or (ii) convicted of a crime for which a person can be
debarred, under Section 306(a) or 306(b) of the Generic Drug Enforcement Act of
1992. SUPPLIER agrees that it will promptly notify PURCHASER in the event of
any such debarment or conviction. The terms of the preceding sentence shall
survive the termination or expiration of this Agreement.
(e) The Product shall, at the time it is delivered under Section
3.1, not be adulterated or misbranded within the meaning of the FFDCA.
Xxxxxx-Xxxxxxx shall have no responsibility for costs and expenses associated
with any recall of Product on or after the date hereof attributable to a
determination by a governmental or regulatory authority that the use of the
Xxxxxx-Xxxxxxx Name on such Product would constitute misbranding within the
meaning of the FFDCA.
(f) SUPPLIER has full authority to enter into this Agreement.
14.2 PURCHASER's Warranty. PURCHASER hereby represents and warrants
as follows:
(a) PURCHASER owns all rights to the Product trademarks and trade
names, if any, and the Product labeling bearing PURCHASER's name and trademarks
meets regulatory requirements.
(b) The use and sale of the Product (in the country where sold and
for its indicated purpose) bearing PURCHASER's name and trademarks by or on
behalf of PURCHASER or its customers will not infringe any trademark or trade
name of any third person.
(c) PURCHASER will comply in all material respects with any law,
regulation, ordinance, order, injunction, decree or requirement applicable to
the marketing of the Product.
(d) PURCHASER will maintain in effect all material required
governmental permits, licenses, orders, applications and approvals regarding
the marketing of the Product, including the New Drug Application, and PURCHASER
will market the Product in accordance with all such permits, licenses, orders,
applications and approvals. PURCHASER shall not make any changes to the New
Drug Application affecting the Specifications without the prior written consent
of SUPPLIER, which will not be unreasonably withheld. SUPPLIER shall respond to
PURCHASER'S written request for any such change within thirty (30) days after
receipt of such written request from PURCHASER.
(e) PURCHASER warrants and represents that it has full authority
to enter into this Agreement, that it has been granted full rights and license
to sell the Product and that nothing contained in any other agreement prohibits
or restricts PURCHASER from entering into any part of this Agreement.
14.3 NO IMPLIED WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN THIS AGREEMENT, SUPPLIER AND PURCHASER MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTIES OF ANY KIND REGARDING THE SUPPLY OF THE PRODUCT, EITHER EXPRESS OR
IMPLIED, INCLUDING, IN THE CASE OF SUPPLIER, ANY EXPRESS OR IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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15. ASSIGNMENT.
15.1 This Agreement will be assignable or transferable by SUPPLIER
only with the consent in writing of PURCHASER, which consent shall not be
unreasonably withheld. PURCHASER agrees that until such time as PURCHASER has
discharged all its payment obligations under the Asset Purchase Agreement, it
shall not assign or transfer this Agreement without the prior written consent
of SUPPLIER, which consent shall not be unreasonably withheld. Either party
will respond to the other party's written request for assignment within
forty-five (45) days after receipt of such written request from such other
party. Notwithstanding the foregoing, this Agreement will be assignable or
transferable by either party to any third party successor to all or
substantially all of its entire business. Any assignment or transfer in
violation of the terms of this Agreement will be void and of no effect and will
constitute a material breach hereof. This Agreement will be binding upon and
inure to the benefit of SUPPLIER and PURCHASER and their respective permitted
successors and assigns.
16. GOVERNING LAW.
16.1 This Agreement will be governed by the laws of the State of
New York. Each party hereby consents to the personal jurisdiction of the state
and federal courts located in New York.
17. FORCE MAJEURE.
17.1 Except in the case of monetary obligations of one party to the
other hereunder, neither party hereto will be liable to the other in damages
for, nor will this Agreement be terminable by reason of, any delay or default
in such party's performance hereunder if such delay or default is caused by
conditions beyond such party's control including, but not limited to, acts of
nature, regulation or law or other action of any government or any agency
thereof, war, insurrection, civil commotion, destruction of production
facilities or materials by earthquake, fire, flood or storm, strikes, epidemic,
or unforeseen failure of suppliers, public utilities or common carriers. Each
party hereto agrees promptly to notify the other party of any event of force
majeure above and to employ all reasonable efforts towards prompt resumption of
its performance hereunder when possible if such performance is delayed or
interrupted by reason of such event.
18. NOTICES.
18.1 All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received on the date when delivered by
hand delivery with receipt acknowledged, or upon the next Business Day following
receipt of telex or telecopy transmission, or upon the third day after deposit
in the United States mail, registered or certified with postage prepaid, return
receipt requested, addressed as set forth below:
If to PURCHASER:
First Horizon Pharmaceutical Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Vice President, Corporate Development
Fax: (000) 000-0000
12
with a copy to:
First Horizon Pharmaceutical Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Legal Counsel
Fax: (000) 000-0000
If to SUPPLIER:
Xxxxxx-Xxxxxxx Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
Attention: Vice President, Pharmaceutical
Manufacturing
Fax: (000) 000-0000
with a copy to:
Xxxxxx-Xxxxxxx Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Senior Vice President and General Counsel
Fax: (000) 000-0000
Any party may alter the addresses to which communications or copies are to be
sent by giving, notice of such change of address in conformity with the
provisions of this section for giving notice.
19. HEADINGS.
19.1 Headings used in this Agreement are for reference purposes
only and in no way define, limit, construe or describe the scope or extent of
such paragraph, or in any way affect this Agreement.
20. SEVERABILITY.
20.1 If any provision of this Agreement is held to be invalid or
unenforceable for any reason, the remaining provisions will continue in full
force without being impaired or invalidated in any way, and the parties agree
to replace any invalid provision with a valid provision which most closely
approximates the intent and economic effect of the invalid provision.
21. WAIVER.
21.1 No term or provisions hereof shall be deemed waived, and no
breach excused, unless such waiver or consent is in writing and signed by the
party claimed to have waived or consented. The waiver by any party of a breach
of any provision of this Agreement will not operate or be interpreted as a
waiver of any other or subsequent breach.
13
22. SURVIVAL.
22.1 The provisions of Sections 2.3(b), 5.4, 5.5, 10.3, 10.4 and
13.2 and Articles 6-9 and 11 will survive the termination or expiration of this
Agreement.
22.2 The provisions of this Agreement which do not survive
termination or expiration hereof (as the case may be) will, nonetheless, be
controlling on, and will be used in construing and interpreting, the rights and
obligations of the parties hereto with regard to any dispute, controversy or
claim that may arise under, out of, in connection with, or relating to this
Agreement.
23. ENTIRE AGREEMENT.
23.1 This Agreement, together with the Schedules hereto and the
Asset Purchase Agreement, constitutes the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersedes any prior agreements, negotiations, understandings, representations,
statements and writings relating thereto. To the extent there is any conflict
between this Agreement, any purchase order and any of the Schedules attached
hereto, this Agreement will take precedence. This Agreement may not be amended
or modified unless such amendment or modification is made in writing and
executed by a duly authorized officer or agent of each party hereto.
24. COUNTERPARTS.
24.1 This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which shall together
constitute one and the same instrument. This Agreement shall become binding
when one or more counterparts hereof shall bear the signatures of all parties
indicated as signatories hereto.
25. NO THIRD PARTY BENEFICIARY.
25.1 The terms and provisions of this Agreement are intended solely
for the benefit of each party hereto and their respective successors or
permitted assigns, and it is not the intention of the parties to confer
third-party beneficiary rights upon any other person or entity.
14
IN WITNESS WHEREOF, the parties have caused this Agreement to be entered into
by their duly authorized representatives, to be effective as of the date first
above written.
XXXXXX-XXXXXXX COMPANY FIRST HORIZON PHARMACEUTICAL
CORPORATION
By: By:
------------------------------ ---------------------------------
Name: Name:
------------------------- ----------------------------
Title: Title:
------------------------ ---------------------------
15
SCHEDULE A
[****]-CONFIDENTIAL TREATMENT REQUESTED
PONSTEL SUPPLY SCHEDULE
SUPPLY
------
Item Delivery Date Quantity___________
---------------------------------------------------------------------------------------
Finished Product
----------------
250 mg. [****] [****]
250 mg. [****] [****]
250 mg. [****] [****]
250 mg. [****] [****]
250 mg. [****] [****]
250 mg. [****] [****]
PRODUCTION FEE
Fifteen (15) days prior to each scheduled delivery date, SUPPLIER shall set the
Production Fee based on SUPPLIER's calculation of the standard cost which shall
include the costs of Active Ingredient, Raw Materials, manufacturing, filling,
inspecting, quality control, stability testing and packaging. The Production
Fee for the Product to be delivered on April 30, 2000 will be $ [****] per
bottle of 100's. The Production Fee is subject to adjustment as provided in the
Agreement.
16
[****]-CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE B
MEFENAMIC SUPPLY SCHEDULE
Item Delivery Date Quantity Price/unit
--------------------------------------------------------------------------------------------------
Mefenamic Acid March 31, 2001 [****] $ [****]
17
SCHEDULE C
[****]-CONFIDENTIAL TREATMENT REQUESTED
SAMPLE SUPPLY SCHEDULE
FINISHED PRODUCT SAMPLE SUPPLY
PURCHASER shall choose between one of the two delivery and quantities options
below with respect to the supply of Samples:
Maximum
Item/Unit Delivery Date Quantity_______
---------------------------------------------------------------------------------
SAMPLE SUPPLY OPTION #1
-----------------------
[****] [****] [****]
[****] [****] [****]
OR
SAMPLE SUPPLY OPTION #2
-----------------------
[****] [****] [****]
PRICE
-----
The price per bottle for Samples under either option above is as follows:
[****]
18
SCHEDULE D
[****]-CONFIDENTIAL TREATMENT REQUESTED
MANUFACTURING SCHEDULE
Ponstel
-------
JAN `00 FEB `00 MAR `00 APR `00 MAY `00 JUN `00 JUL `00 AUG `00 SEP `00 OCT `00 NOV `00 DEC `00
------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Beg. Invt. [****] [****] [****] [****] [****] [****] [****] [****] [****] [****] [****] [****]
Forecast [****] [****] [****] [****] [****] [****] [****] [****] [****] [****] [****] [****]
Production [****] [****] [****] [****] [****] [****] [****] [****] [****] [****] [****] [****]
End Invt. [****] [****] [****] [****] [****] [****] [****] [****] [****] [****] [****] [****]
[****] to be produced using Xxxxx-Xxxxx labeling, will be delivered [****].
