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Exhibit 10.32
DISTRIBUTION AND SUPPLY AGREEMENT
Distribution and Supply Agreement dated as of December 4, 1989, between
Xxxxxx-Xxxxxxx Company, a Delaware corporation ("Xxxxxx-Xxxxxxx") and Fujisawa
Pharmaceutical Company, a Delaware corporation ("Fujisawa").
WITNESSETH
WHEREAS, Xxxxxx-Xxxxxxx manufactures, distributes and sells the
products, in finished form, set forth on Exhibit A hereto (the "Products").
WHEREAS, Xxxxxx-Xxxxxxx desires to appoint Fujisawa the exclusive
distributor of the Products in the Territory (hereinafter defined) and Fujisawa
desires to accept such appointment all on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, Xxxxxx-Xxxxxxx and Fujisawa hereby agree as
follows:
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Terms and Conditions
1. Purchase and Sale. Commencing March 1, 1990 or such other date
as the parties may mutually agree upon (the "Effective Date"), and throughout
the term of this Agreement, Xxxxxx-Xxxxxxx hereby appoints Fujisawa as the
exclusive distributor of the Products in the United States, but excluding Puerto
Rico and the other United States territories and possessions (the "Territory").
Under no circumstances shall Fujisawa distribute any Product outside of the
Territory. Xxxxxx-Xxxxxxx shall supply, and Fujisawa shall purchase, all of
Fujisawa's requirement for the Products for the term of this Agreement.
Promptly following the Effective Date, Xxxxxx-Xxxxxxx and Fujisawa shall
jointly provide a communication to the trade and Xxxxxx-Xxxxxxx shall inform all
potential purchasers of the Product which contact Xxxxxx-Xxxxxxx that Fujicawa
is the exclusive distributor of the Products in the Territory.
2. Product Standards.
(a) Xxxxxx-Xxxxxxx shall use its best efforts to supply
Fujisawa's requirements for the Products from one of Xxxxxx-Xxxxxxx'x Food and
Drug Administration approved facilities (currently expected to be
Xxxxxx-Xxxxxxx'x Rochester, Michigan facility). Fujisawa shall be treated at
least as favorably as Xxxxxx-Xxxxxxx treats its own affiliates in assuring a
supply of the Products. The Products shall be manufactured in accordance with
the specifications and procedures attached as Exhibit B hereto (the
"Specifications"). Xxxxxx-Xxxxxxx represents and
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warrants that the Specifications comply in all material respects with FDA rules
and regulations. Subject to Section 2(c) hereof or as required by any
appropriate governmental agency, such specifications shall remain the same
throughout the term of this Agreement unless any change thereof is mutually
agreed to in writing by both parties hereto and approved by the Federal Food and
Drug Administration (the "FDA") and all other appropriate governmental agencies.
(b) Xxxxxx-Xxxxxxx shall be responsible for handling all
complaints, inquiries and reports of adverse reactions relating to the Products,
including the expense of investigation thereof. Xxxxxx-Xxxxxxx shall keep
Fujisawa informed with respect to such matters and Fujisawa shall cooperate with
Xxxxxx-Xxxxxxx with respect to the investigation and disposition of such
matters. Fujisawa shall promptly notify Xxxxxx-Xxxxxxx of any adverse reaction,
complaint or investigation promptly upon receipt of any of the foregoing and, in
any event, no later than three (3) business days following such receipt.
(c) Fujisawa acknowledges that it has been informed of the
matters described in Exhibit C hereto. In connection therewith, if it becomes
appropriate at any time for Xxxxxx-Xxxxxxx to reformulate any of the Products,
Xxxxxx-Xxxxxxx shall inform Fujisawa of the reformulation and furnish Fujisawa
with the appropriate specifications for such reformulated product(s) and a base
purchase price for such reformulated product(s). Xxxxxx-Xxxxxxx'x decisions in
such regard shall be binding upon Fujisawa and Fujisawa shall cooperate with
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Xxxxxx-Xxxxxxx with respect to such matters. Any reformulated Product shall be
deemed a "Product" for purposes of this Agreement.
Fujisawa agrees that all communications with respect to the
matter described in Exhibit C or any other regulatory matter with the FDA or any
other governmental agency will be controlled by Xxxxxx-Xxxxxxx and Fujisawa
shall cooperate with Xxxxxx-Xxxxxxx with respect to such matters and shall not
make any contact relating to the Product with the FDA or any other governmental
or regulatory agency without the prior written consent of Xxxxxx-Xxxxxxx.
3. Purchase Price. Fujisawa's purchases of each Product shall be
at (i) forty percent (40%) of Fujisawa'a catalog list price for each Product as
of the date of the invoice relating to such Product, or (ii) forty percent (40%)
of the sales price set forth on Exhibit A hereto, whichever is greater. Any
applicable sales or other tax (except for tax on the income of Xxxxxx-Xxxxxxx)
shall be added to such purchase price. Fujisawa shall provide Xxxxx-Xxxxxxx with
thirty (30) days prior written notice of any change in the catalog list price
for any of the Products.
Notwithstanding the foregoing, Fujisawa shall be entitled to
request and purchase from Xxxxxx-Xxxxxxx amounts of the Elase 10 gram tube at
(i) thirty-two percent (32%) of Fujisawa's catalog list price or (ii) thirty-two
percent (32%) of the sales price set forth on Exhibit A hereto, whichever is
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greater. Fujisawa acknowledges that such ordered amounts shall be marked on the
tube and/or the package with words to the effect "Sample - Not for resale" and
must be ordered in minimum lot sizes of 5,000 units. Forecasts for such Products
shall be included in the forecasts as described in Section 5 hereof.
4. Packaging and Labeling; Returns. At the Effective Date, the
Products shall be packaged in the same manner as Xxxxxx-Xxxxxxx heretofore
packaged the Products (an example of which has been seen and accepted by
Fujisawa). Fujisawa shall furnish labeling specifications and any necessary
artwork to Xxxxxx-Xxxxxxx and Xxxxxx-Xxxxxxx shall label the Products
accordingly, provided that such specifications are reasonably satisfactory to
Xxxxxx-Xxxxxxx and approved by the FDA. It is understood that the labeling
specifications shall call for a statement such as "Manufactured by Xxxxx-Xxxxx
for distribution by Fujisawa".
Fujisawa shall purchase, for the purchase price referred to in Section
3 hereof, all of the finished goods inventory in the possession of
Xxxxxx-Xxxxxxx as of the Effective Date and allow for the depletion of all
existing labeling and packaging inventory; provided, however that Fujisawa shall
not be required to purchase any more than a four months supply (based on sales
for the corresponding months in the prior year plus l0%) of each Product and
Fujisawa shall not be required to purchase any inventory with a shelf life of
less than fifteen months as of the Effective Date.
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Any Products which are returned to Fujisawa after the Effective Date
shall be for the account of and handled by Fujisawa; provided, however, that for
the first three (3) months following the Effective Date, if the value of returns
(based on the catalog list price when such Products were sold) of the Products
in the aggregate exceed $104,710, Xxxxxx-Xxxxxxx shall reimburse Fujisawa for
the excess above $104,710 of unusable returned Products. Any returns received by
Xxxxxx-Xxxxxxx after the Effective Date shall be handled by Xxxxxx-Xxxxxxx and
Xxxxxx-Xxxxxxx shall be entitled to charge Fujisawa for the cost of such
returns, except as set forth above.
5. Forecasting. Four (4) months before the commencement of each
calendar quarter, Fujisawa will give to Xxxxxx-Xxxxxxx (A) a forecast of
Fujisawa's approximate twelve (12) months requirements of each Product
commencing four (4} months after the date of such forecast and (B) a forecast of
its requirements of each Product during the first quarter of said twelve (12)
months period. The forecast referred to in (A) above shall represent Fujisawa's
reasonable estimates of the quantity of each Product that Fujisawa will require
for stock production and sales during the twelve (12) month period to which much
forecast applies and the forecast referred to in (B) above shall be considered a
firm order. Without the prior written consent of Xxxxxx-Xxxxxxx which shall not
be unreasonably withheld, no firm order for any amount of units of any Product
may exceed the most recent forecast for such quarter by more than fifteen
percent (l5%) and no forecast for any quarter may exceed the forecast for the
prior quarter by
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more than fifteen percent (15%). Notwithstanding the foregoing, it shall not be
unreasonable for Xxxxxx-Xxxxxxx to withhold its consent if it believes increased
orders for any Products are due to anticipated future Product price increases by
Fujisawa.
6. Title and Risk of Loss. Title and risk of loss to the Products
shall remain with Xxxxxx-Xxxxxxx until delivery within the United States to a
common carrier for shipment to Fujisawa to the destination specified in its firm
order for such Products. Delivery to such common carrier shall constitute
delivery to Fujisawa and Fujisawa shall bear all risk of loss, delay, damage in
transit as well as all transportation expenses. Such Products shall not be
shipped outside of the United States by Fujisawa for any purpose whatsoever.
Xxxxxx-Xxxxxxx shall invoice Fujisawa for the Products shipped
pursuant to this Agreement and Fujisawa shall pay each invoice within thirty
(30) days of the date of such invoice or the delivery date, whichever is later.
In ordering and delivering the Products, Xxxxxx-Xxxxxxx and
Fujisawa may use their standard forms, but nothing in such forms shall be
construed to amend or modify the terms of this Agreement and in case of conflict
herewith, the terms of this Agreement shall control.
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7. Advertising and Promotion.
(a) Fujisawa agrees that it shall use its best efforts to
ensure that the Products shall be as actively promoted with the same intensity
and frequency as Fujisawa would promote one of its own pharmaceutical products
of equal gross profits. Fujisawa shall promote the Products by making medical
details and sales representative calls and distributing suitable advertising and
promotional materials. The Products shall be promoted at all times in accordance
with the FDA regulations concerning advertising and promotional labeling. All
advertising and promotional materials shall be submitted to Xxxxxx-Xxxxxxx for
its prior review and approval which shall not be unreasonably withheld.
Xxxxxx-Xxxxxxx shall inform Fujisawa of its rejection or approval of advertising
and promotional material within thirty (30) days of receipt of such materials by
Xxxxxx-Xxxxxxx. Fujisawa shall not use any materials which Xxxxxx-Xxxxxxx shall
advise do not meet Xxxxxx-Xxxxxxx'x approval and Fujisawa shall discontinue the
use of any materials which Xxxxxx-Xxxxxxx may at any time advise do not meet
Xxxxxx-Xxxxxxx'x approval due to regulatory concerns.
(b) Any dispute or challenge to the promotion or advertising
of any of the Products by the FDA, a competitor or otherwise shall be handled by
Xxxxxx-Xxxxxxx (and Fujisawa shall promptly notify Xxxxxx-Xxxxxxx within
twenty-four (24) hours of any each dispute or challenge to which it becomes
aware) and all decisions made by Xxxxxx-Xxxxxxx relating thereto shall be
binding on Fujisawa.
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8. Warranty; Inspection. Xxxxxx-Xxxxxxx warrants that
each production lot of the Products delivered to Fujisawa under this Agreement
shall, at the time of delivery, meet the Specifications, shall be in good,
usable and merchantable condition reasonably fit for use if used in accordance
with label directions and Shall not consist of or contain any product or article
which, at the time of shipment, (A) is adulterated or misbranded within the
meaning of the Federal Food, Drug and Cosmetic Act, as amended (the "Act") or
(B) may not, under the provisions of Section 404 or 505 of the Act, be
introduced into interstate commence.
Fujisawa shall have a period of thirty (30) days from date of
receipt of the Products to inspect and reject any shipment on the grounds that
it does not comply with the foregoing. Fujisawa shall notify Xxxxxx-Xxxxxxx in
writing of Fujisawa'a claims on account of quality of any Product or failure to
meet Specifications within thirty (30) days of the receipt of each shipment.
Fujisawa'a failure to notify Xxxxxx-Xxxxxxx within the stipulated thirty (30)
day period will be deemed for purposes of this Agreement as acceptance by
Fujisawa of such shipment. All Products which are defective hereunder shall be
returned to Xxxxxx-Xxxxxxx at Xxxxxx-Xxxxxxx'x expense and shall be replaced by
Xxxxxx-Xxxxxxx at no charge to Fujisawa. The preceding sentence sets forth
Fujisawa's sole remedy for nonconforming shipments, except as set forth in
Section 13(a) hereof. Xxxxxx-Xxxxxxx shall not be liable to Fujisawa for any
damages, including but not limited to, direct, special,
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incidenta1 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. Any dispute between Xxxxxx-Xxxxxxx and Fujisawa as to whether or not
any Product is defective shall, if not resolved by the good faith negotiations
of Xxxxxx-Xxxxxxx and Fujisawa, be submitted for conclusive determination to a
mutually acceptable independent testing laboratory, the fees of which shall be
paid by Fujisawa if the applicable Product is determined to be not defective and
by Xxxxxx-Xxxxxxx if such Product is determined to be defective.
9. Representations and Warranties.
(a) Fujisawa represents and warrants that it is duly
incorporated in the State of Delaware and is licensed to do business in each
State in which it is required to be so licensed as a result of its activities in
such State and pursuant to this Agreement.
(b) Fujisawa acknowledges that Xxxxxx-Xxxxxxx has not made
any representations or warranties of any kind, either express or implied, except
as expressly set forth in this Agreement. FUJISAWA AGREES THAT THE
REPRESENTATIONS AND WARRANTIES GIVEN HEREIN BY XXXXXX-XXXXXXX ARE IN LIEU OF,
AND FUJISAWA HEREBY EXPRESSLY WAIVES ALL RIGHTS TO, ANY IMPLIED WARRANTIES WHICH
MAY OTHERWISE BE APPLICABLE BECAUSE OF THE PROVISIONS OF THE UNIFORM COMMERCIAL
CODE OR ANY OTHER STATUTE,
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INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE.
10. Further Covenants of Fujisawa.
(a) Fujisawa shall comply in all respects with all statutes,
rules and regulations (including, without limitation, the "Prescription Drug
Marketing Act of 1987") applicable to it in connection with the performance of
its obligations under this Agreement and the distribution of the Products.
(b) Fujisawa shall not take any action or omit to take any
action which might negatively affect the regulatory status of any of the
Products.
(c) Fujisawa shall cooperate with Xxxxxx-Xxxxxxx in
attempting to obtain all appropriate licenses and registrations in order that
Fujisawa may distribute the Products pursuant to this Agreement, it being
understood that all communications with the FDA and any other governmental or
regulatory authority shall be made by Xxxxxx-Xxxxxxx.
(d) In the event that Fujisawa plans during the term of this
Agreement to introduce in the Territory any product for topical use which may be
directly competitive with any of the Products, Fujisawa shall inform and consult
with Xxxxxx-Xxxxxxx reasonably in advance of such introduction and Fujisawa
shall ensure that the sales of the Products shall not be jeopardized by the
introduction of such product.
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(e) Fujisawa shall not submit for governmental approval,
promote or sell any line extensions to the Products without the prior written
consent of Xxxxxx-Xxxxxxx.
(f) Fujisawa shall only use the trademark "Elase" on
materials approved by Xxxxxx-Xxxxxxx. Fujisawa shall, at no time during the term
of this Agreement, use any trademark confusingly similar to the trademark
"Ease" and, after the termination of this Agreement, Fujisawa shall not use the
trademark Elase or any trademark confusingly similar therewith. Fujisawa shall
not acquire any rights of ownership to the tradename "Elase" under this
Agreement.
(g) Fujisawa shall not sell or distribute any of the Products
to any third person if Fujisawa knows or has reason to believe that such third
person will sell or distribute any of the Products outside of the Territory.
(h) Fujisawa shall continue to be licensed to do business in
each State in which it is required to be so licensed during the term of this
Agreement.
11. Confidentiality. Xxxxxx-Xxxxxxx will at all times maintain as
confidential any know-how or technical or financial information disclosed to
Xxxxxx-Xxxxxxx by Fujisawa during the term of this Agreement. Fujisawa will at
all times maintain as confidential any know-how or technical or financial
information as disclosed to Fujisawa by Xxxxxx-Xxxxxxx during the term of
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this Agreement. However, no such know-how or technical or financial information
shall be considered of a confidential nature if (A) it shall have been known to
the party alleging nonconfidentiality prior to the date of this Agreement and
that fact can be established from such party's records; or (B) it shall have
been in the public domain other than by breach of the confidentiality
contemplated by this Agreement; or (C) it is disclosed to the receiving party by
a third party which is not in breach of any confidentiality obligation to the
other party. The party asserting that any disclosed information is proprietary
shall have the burden of establishing the proprietary nature of such
information.
12. Force Majeure. In the event that strikes, riots, war, acts of
God, invasion, fire, explosion, floods, delay of carrier, shortage or failure in
the supply of materials, energy shortage, acts of government or governmental
agencies or instrumentalities, or other contingencies beyond the control of
Xxxxxx-Xxxxxxx, interfere with, or prevent, Xxxxxx-Xxxxxxx'x production of the
Products for Fujisawa hereunder, Xxxxxx-Xxxxxxx'x obligation to carry out such
production for Fujisawa shall be suspended until such time as such contingency
or contingencies have terminated.
13. Indemnification
(a) Except as set forth in Section 13(b), Xxxxxx-Xxxxxxx will
indemnify and hold Fujisawa harmless against any and all liability, damage,
lose, cost or expense resulting from any third party claims made or suits
brought against Xxxxxx-Xxxxxxx
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xxx/xx Xxxxxxxx which may be sustained or suffered by Fujisawa by virtue of the
distribution and sale of the Products. Upon the filing of any such claim or
suit, Fujisawa shall immediately notify Xxxxxx-Xxxxxxx thereof and shall permit
Xxxxxx-Xxxxxxx to handle and control such claim or suit. The obligations set
forth in this Section 13(a) shall survive the termination of this Agreement.
(b) Fujisawa will indemnify and hold Xxxxxx-Xxxxxxx harmless
against any and all liability, damage, loss, cost or expense resulting from any
third party claims made or suits brought against Fujisawa and/or Xxxxxx-Xxxxxxx
which arise out of (A) the breach of any representation, warranty or covenant
contained in this Agreement, (B) any violations of the Prescription Drug
Marketing Act of 1987 as a result of the activities contemplated hereunder, or
(C) the negligence or willful misconduct of Fujisawa in the distribution and
sale of the Products in the Territory. Upon the filing of any such claim or
suit, Xxxxxx-Xxxxxxx shall immediately notify Fujisawa thereof and shall permit
Fujisawa at its cost to handle and control such claim or suit, except with
respect to any claims or suits which may impact the regulatory status of any of
the Products, which claims or suits shall be handled and controlled by
Xxxxxx-Xxxxxxx at Fujisawa's expense. The obligations set forth in this Section
13(b) shall survive the termination of this Agreement.
14. Assignment. Fujisawa shall not be entitled to assign any of
its rights or delegate any of its duties hereunder without
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the prior written consent of Xxxxxx-Xxxxxxx. Xxxxxx-Xxxxxxx may assign its
rights or delegate its duties to any third person or entity without the consent
of Fujisawa. Xxxxxx-Xxxxxxx shall give Fujisawa thirty (30) days prior written
notice in the event it intends to assign any or all of its rights or delegate
any or all of its duties as aforesaid.
15. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New Jersey (except for
those provisions governing conflicts of law). Each party hereby irrevocably
submits to the Jurisdiction of any court in the State of New Jersey to resolve
any disputes arising out of or in any way relating to this Agreement.
16. Term: Termination. This Agreement shall become effective as of
the Effective Date, and shall remain in full force and effect for a period of
five (5) years from such date. This Agreement shall be automatically renewed for
additional periods of two (2) years unless Fujisawa or Xxxxxx-Xxxxxxx shall have
given the other party written notice of termination at least one hundred eighty
(180) days prior to the then-relevant expiration date of this Agreement;
provided, however, that Xxxxxx-Xxxxxxx may not terminate this Agreement as set
forth above unless, in its reasonable opinion, Fujisawa failed to adequately
support the Products during the prior two-year period.
Notwithstanding the foregoing, this Agreement may
be terminated by Xxxxxx-Xxxxxxx effective as of September 1, 1992 or
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any date thereafter in the event that the option granted to Xxxxxx-Xxxxxxx under
Article II of the Option and License Agreement dated the date hereof, between
Fujisawa and Xxxxxx-Xxxxxxx is not exercised. Xxxxxx-Xxxxxxx shall give
Fujisawa three (3) months notice of any such termination.
This Agreement may be terminated at any time by either party:
(A) Upon breach of this Agreement by the other party, on
sixty (60) days' prior written notice to the breaching party, the notice to
become effective at the end of such sixty (60) day period unless the breach is
sooner cured by the breaching party;
(B) Upon bankruptcy or insolvency of the other party or
placing of the business of such party in receivership.
Upon any expiration or termination of this Agreement,
Xxxxxx-Xxxxxxx shall repurchase, at the price paid by Fujisawa to Xxxxxx-Xxxxxxx
for such Products, any usable current (expiration date not to be more than one
(1) year from the date of such purchase) remaining inventory of the Products
(shipping costs to be borne by Fujisawa). Any nonusable inventory (expiration
date being less than one year from the date of purchase) shall be destroyed at
Fujisawa's expense.
17. Notices. Any notice required or permitted to be given under
this Agreement shall be mailed by registered or certified
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air mail, postage prepaid, addressed to the party to be notified at its address
stated below, or at such other address as may hereafter be furnished in writing
to the notifying party.
If to Fujisawa:
Fujisawa Pharmaceutical Company
Xxxxx 000
000 Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxx 00000
Attention: Chairman of the Board
If to Xxxxxx-Xxxxxxx:
Xxxxxx-Xxxxxxx Company
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, Xxx Xxxxxx 00000
Attention: Vice President, Corporate Licensing and
Technology Transfer
with a copy to:
Vice President and General Counsel
18. Waiver. The failure on the part of Fujisawa or Xxxxxx-Xxxxxxx
to exercise or enforce any rights conferred upon it hereunder shall not be
deemed to be a waiver of any such rights nor operate to bar the exercise or
enforcement thereof at any time thereafter.
19. Independent Contractor. At all times during the term of this
Agreement, and any renewals hereof, the parties shall be considered independent
contractors, and neither the making of this Agreement nor the performance of any
of the provisions hereof shall be construed to make either party an agent,
employee or legal representative of the other, nor shall this Agreement be
deemed to establish a joint venture or partnership.
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20. Public Announcements. Xxxxxx-Xxxxxxx and Fujisawa shall
consult with each other before issuing any press releases or otherwise making
any public statements with respect to this Agreement and neither of them shall
issue any press release or make any public statement prior to obtaining the
other party's approval, which approval shall not be unreasonably withheld,
except that no such approval shall be necessary to the extent disclosure may be
required by law.
21. Integration. This Agreement contains all of the
representations, warranties, covenants and agreements between the parties
relating to the subject matter hereof. Any amendment to this Agreement must be
in writing and signed by both parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
XXXXXX-XXXXXXX COMPANY
By:/s/
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Title
FUJISAWA PHARMEUTICAL COMPANY
By:/s/
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Title:
