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EXHIBIT 10.11
CONFIDENTIAL TREATMENT REQUEST
Confidential Portions Of This Agreement Which Have Been Redacted Are Marked
With Brackets ("[***]"). The Omitted Material Has Been Filed Separately With The
Securities And Exchange Commission.
EXCLUSIVE DISTRIBUTION AGREEMENT
This Exclusive Distribution Agreement (the "Agreement") is dated effective
as of January 1, 1996 by and between UNISOURCE, INC., a Colorado corporation,
with its principal place of business at 0000-00xx Xx., Xxxxx 000, Xxxxxxx,
Xxxxxxxx 00000 ("Unisource"), and HORIZON PHARMACEUTICAL CORPORATION, a Delaware
corporation, with its principal place of business at 0000 Xxxxxxxxxxx Xxxxxxx,
Xxxxx #000, Xxxxxxx, Xxxxxxx 00000 ("Horizon").
W I T N E S S E T H :
A. Unisource is engaged in the business of developing, manufacturing and
selling pharmaceutical products;
B. Horizon is engaged in the business of marketing and distributing
pharmaceutical products;
C. Unisource and Horizon previously entered into an Exclusive Distribution
Agreement dated July 30, 1993 (the "Prior Agreement") for a pharmaceutical
product known as TANAFED (the "Product"), as described in Exhibit A hereto,
which exhibit is expressly incorporated herein by this reference; and
D. The parties desire to enter into a new Exclusive Distribution Agreement
superseding the "Prior Agreement" effective as of the date indicated above,
according to the following terms and conditions. It is the express intention of
the parties that this "Agreement" shall replace and supersede the "Prior
Agreement", curing any and all defaults which may exist under the "Prior
Agreement" by either Unisource or Horizon, without any time elapsing between the
termination of the "Prior Agreement" and the effective date of this "Agreement".
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, IT IS AGREED:
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l. Exclusivity; Requirements Contract; Pricing; and Terms of Sale.
1.1 Exclusivity.
(a) Unless and until Horizon's exclusivity for the Product is
terminated pursuant to the provisions of Section 1.1(b) hereof, Unisource shall
supply the Product exclusively to Horizon and shall not sell the Product in the
Continent of North America or the Caribbean to anyone other than Horizon without
Horizon's prior written consent. Likewise, Horizon agrees during the term hereof
to purchase the Product exclusively from Unisource for North American and
Caribbean distribution. It is agreed that the mutual exclusivity provisions of
this Agreement shall apply to the Product regardless of package size or the
nature of any packaging.
(b) Unisource shall have the right to terminate Horizon's
exclusivity hereunder if Horizon's aggregate purchases for the Product during
any calendar year beginning in 1996 are less than the scheduled amount set forth
below for such year. Such right to terminate Horizon's exclusivity must be
exercised, if at all, by written notice given within thirty (30) days after the
end of any calendar year. Unisource's right to terminate Horizon's exclusivity
hereunder shall be Unisource's sole remedy for Horizon's failure to order the
scheduled amount during any calendar year. The scheduled amount for the Product,
regardless of package size is as follows:
(i) 1996 - [***];
(ii) 1997 - [***];
(iii) 1998 - [***];
(iv) 1999 and subsequent years - [***]
For purposes of this Agreement, if more gallons are purchased than scheduled
during a particular year, the overage above scheduled gallons will carry over to
the next year's scheduled obligations as a credit.
For purposes of this Agreement, a gallon shall be defined as 128-fl. oz. to be
packaged in various package sizes.
(c) Horizon shall have the right of first refusal on all other
dosage forms or pharmaceutical products containing Pseudoephedrine Tannate
developed by Unisource. Unisource agrees to offer said products in all forms to
Horizon first, and to negotiate terms with Horizon in good faith. Horizon shall
also have the right to match any bona fide offer from any third party for any
said products in all forms, and by agreeing to match the bona fide offer,
Horizon shall be granted exclusivity to the same extent granted herein for
TANAFED.
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1.2 Requirements Contract.
(a) During the term of this Agreement, Horizon shall purchase the
Product exclusively from Unisource and Unisource shall exclusively supply all of
Horizon's requirements of the Product for the distribution channels heretofore
defined. Horizon shall not during the term of this Agreement purchase or
manufacture a comparable Product (comparable Product is defined as any product
containing Pseudoephedrine Tannate, alone or in combination with other
ingredients, and which is intended for the same therapeutic use as the Product)
from anyone other than Unisource. The foregoing obligation of Unisource to
supply all of Horizon's requirements of the Product and Horizon's obligation to
purchase all of its requirements of the Product exclusively from Unisource shall
apply even if Horizon's exclusivity is terminated by Unisource pursuant to
Section 1.1 hereof. Horizon shall have the right to terminate Unisource's
exclusivity hereunder if Unisource is unable to fulfill all of Horizon's
requirements for the Product at any time, subject to the sixty (60)-day cure
period described in Subsection 6.2 below.
1.3 Price and Terms of Sale.
(a) The price to be charged to Horizon for Product in various
package sizes bearing the Horizon or a subsidiary label shall be the same as
those currently quoted to Horizon, as shown on Exhibit "B" attached hereto and
incorporated herein. However, the price charged to Horizon for the Product shall
be reduced if: (1) Unisource engages a new manufacturer who supplies Product to
Unisource at a lower cost, or (2) increased volume orders by Horizon result in
per-unit savings to Unisource because of economies of scale. In the event of the
occurrence of either of these contingencies, Unisource and Horizon agree to
negotiate a price reduction in good faith, promptly upon receipt of written
notice from Horizon of a desire to negotiate price reduction as a result of the
occurrence of one or both contingencies. No other price changes shall be made
without the written consent of both parties.
(b) Horizon shall pay Unisource for the Product within thirty
(30) days after shipment of the Product to the location specified. Unisource
warrants that when invoiced the Product will conform to those specifications
documented in Exhibit A and Unisource will cause the manufacturer to provide to
Horizon a Certificate of Assay, batch assay sheets and all current material
safety data sheets applicable to the Product for each batch shipped to Horizon.
Horizon will not be obligated to pay for a non-conforming batch of the Product
or a batch for which a Certificate of Assay has not been provided.
(c) All shipments of the Product to Horizon at the location
specified will be made FOB, Unisource site of manufacture.
2. Term of Agreement and Termination. This Agreement shall commence on
January 1, 1996, at which time the "Prior Agreement" shall be superseded
instantly and this Agreement shall continue for a period of seven (7) years
until December 31, 2003. If upon expiration of this initial term ending December
31, 2003, Horizon is not in default of any of the material terms and conditions
of this Agreement, Horizon shall have an option to extend this Agreement for an
additional term of seven (7) years. This option shall be automatically exercised
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unless Horizon gives written notice to Unisource of its intent not to exercise
the option prior to December 31, 2003. This Agreement shall also terminate
immediately upon any voluntary or involuntary dissolution, act of bankruptcy or
reorganization for the benefit of creditors of either party, and may not be
reinstated thereafter except with the other party's written consent.
In the event that Horizon exercises the seven year option, Horizon agrees
to purchase [***] of Product in each of the first three years of the option
period, and [***] of Product in each of the remaining four years, pursuant to
the exclusivity and requirements provisions of subsection 1 above.
3. Representations and Warranties of Unisource. Unisource represents and
warrants to Horizon that the Product supplied hereunder will be merchantable and
that the Product supplied hereunder will be manufactured in accordance with the
then FDA current good manufacturing practices for comparable products. Unisource
shall cause the manufacturer of the Product (the "Manufacturer") to supply
Horizon with the standard form FDA continuing guaranty. Unisource further
represents and warrants to Horizon that it is the sole and exclusive owner of
the Product and that no consents are required from any person to grant Horizon
the rights granted to it hereunder. Unisource hereby agrees to indemnify and
hold harmless Horizon from and against any breach of its representations and
warranties set forth in this Agreement. In no event, however, will Unisource be
liable to Horizon for consequential damages.
4. Insurance. Unisource shall cause the Manufacturer to maintain product
liability insurance in a minimum amount of [***] Dollars and, prior to the
delivery of the first order of Product, Unisource shall cause the Manufacturer
to provide Horizon with a certificate of insurance naming Horizon as an
additional insured on Manufacturer's insurance policy. Thereafter, Unisource
shall cause the manufacturer to provide periodic verification of the liability
insurance coverage on each renewal of the policy, and in any event at least each
year on the anniversary date of the policy.
5. Default.
5.1 Notice of Default. Subject to Section 6.2, if a default occurs
hereunder, then the non-defaulting party shall be entitled to terminate this
Agreement upon sixty (60) days' written notice to the defaulting party, if the
defaulting party has not cured the default as provided in paragraph 6.2, which
notice shall describe the default in reasonable detail.
5.2 Effect of Default and Cure. The party in default shall have a
period of sixty (60) days from receipt of the Notice of Default provided for in
paragraph 6.1 within which to cure the specified default. If the default is
cured and corrected within sixty (60) days after proper notice, this Agreement
shall continue in full force and effect as if no default had existed. If the
default is not timely cured as set forth in this Subsection 6.2, then the
non-defaulting party shall have the option to terminate this Agreement, and such
termination shall be without prejudice to any claim for damages which the
non-defaulting party may have.
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6. Force Majeure and Termination.
6.1 Force Majeure A party to this Agreement shall be excused from
performance under this Agreement to the extent that and for so long as such
performance is substantially hindered or prevented by force majeure such as acts
of God, strikes, or acts of war.
6.2 Right of Termination. If any performance excused pursuant to
Subsection 6.1 is both protracted and material with reference to the
objectives and purposes of this Agreement, the party not excused thereby may
terminate this Agreement upon fifteen (15) days' written notice to the other
party, and such terminating party shall be entitled to an equitable
adjustment of its rights and obligations hereunder.
7. Applicable Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Colorado without giving effect to the
principles of conflict of laws thereof.
8. Notices. Any notice, demand or other communication required or
authorized to be given under this Agreement shall, if reasonably practicable, be
transmitted by telecopier to the number specified below, confirmed by hard copy
via U.S. Mail, or such notice may be sent by personal delivery, national
overnight commercial delivery service which provides package tracking services
("Overnight Courier") or by U.S. Mail, certified, return receipt requested. Any
such notice shall be deemed received as of the first business day after it is
sent if delivered by telecopy, Overnight Courier or personal delivery, or on the
day actually received and signed for if sent by Certified U.S. Mail. All notices
shall be sent to the respective parties at the following telecopy numbers and
addresses, or such other telecopy number or address as a party may provide to
the other by written notice complying with this Section 9:
Horizon Pharmaceutical Corporation
0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx #000
Xxxxxxx, Xxxxxxx 00000
Attention: President
Fax No. 000-000-0000
Unisource, Inc.
0000-00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: President
Fax No. 000-000-0000
9. Assignment; Binding Effect. This Agreement may not be assigned by either
party without the prior written consent of the other party, and any attempt by
either party to assign this Agreement without such consent shall be null and
void ab initio. This Agreement shall inure to the benefit of, and be binding
upon, the respective successors and permitted assigns of the parties.
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10. Modification. This Agreement may not be modified or amended in any
respect except in writing signed by both parties.
11. The Prior Agreement. The Prior Agreement is hereby superseded in its
entirety by mutual consent of both parties. Each party represents and warrants
to the other that no default exists under the terms of the Prior Agreement.
12. Entire Agreement. This is the entire Agreement between the parties and
no prior representations, statements, warranties or inducements form a part of
this contract or vary, modify or expand upon any of the terms or conditions
contained in this written Agreement.
IN WITNESS WHEREOF, the parties hereto have signed, sealed and delivered
this Agreement effective January 1, 1996.
Attest: UNISOURCE, INC.
_____________________________ By:_________________________________________
Attest: HORIZON PHARMACEUTICAL
CORPORATION
_____________________________
By:_________________________________________
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EXHIBIT A
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TANAFED
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FORMULA A
[***]
FORMULA B
[***]
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EXHIBIT B
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[***]
Quantity: [***] order [***] order or more
1. Packaging: Pints Pints
Price: $[***] $[***]
2. Packaging: [***] [***]
Price: $[***] $[***]
3. Packaging: [***] [***]
Price; $[***] $[***]
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