MANUFACTURING AGREEMENT
1.0 PARTIES
1.1 BUYER: NICHE PHARMACEUTICALS, INC.
000 XXXXX XXX XXXXXX
XXXXXXX, XXXXX 00000
1.2 SELLER: I F P, INC.
0000 XXXXXXX XXXXX, XXX. 00 & X00
XXXXXXXXX, XX 00000
2.0 PRODUCTS
The item specified on Exhibit A attached hereto ("Products")
3.0 PURPOSE
3.1 BUYER requires an assured source of supply of Products and IFP agrees
to produce such Products in accordance with the description and specifications
identified in Exhibit A and Exhibit B attached hereto and made part hereof.
3.2 IFP shall sell to BUYER and BUYER shall purchase from IFP during the
term of this Agreement all of BUYER's requirements of Products. BUYER represents
to IFP that it has all necessary approvals of the Food & Drug Administration for
the Products.
4.0 PRICE
4.1 Products: The purchase price of Products shall be as set forth in
Exhibit A. BUYER acknowledges that this purchase price is based upon BUYER's
agreement to purchase all of its requirements of Products exclusively from IFP.
4.2 Payment: Payment for all services performed and product delivered will
be made in U.S. Dollars within thirty (30) days after receipt of IFP's invoice.
Invoices will be generated based upon completion of service or shipment of
product.
5.0 MANUFACTURING AND QUALITY CONTROL
5.1 For manufacture of Products, IFP shall supply all raw material and
packaging components according to specifications provided by BUYER.
5.2 IFP shall utilize the quality control and manufacturing process
provided IFP by the BUYER employing the same methodology or equivalent
techniques agreed to by IFP and the BUYER.
5.3 IFP shall provide validation services at the price set forth in Exhibit
A.
5.4 IFP shall send to an outside facility for accelerated stability testing
for pilot batches at the prices and according to the conditions set forth in
Exhibit A.
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6.0 ARTWORK AND LABELING
6.1 All artwork shall be supplied by BUYER and must be compatible with
IFP's packaging equipment.
7.0 SHIPMENT AND RISK OF LOSS
7.1 Shipment shall be by whatever means BUYER instructs and IFP determines
is reasonable, provided that shipment is made in accordance with all relevant
statutory requirements.
7.2 The purchase prices in Article 4.0 hereof are FOB Fairbault, MN.
Delivery of Products will be to one location in accordance with BUYER's shipping
instructions. IFP's delivery to said carrier or trucker will constitute delivery
to BUYER. BUYER will bear all risk of loss, delay, or damage in transit as well
as freight and insurance.
7.3 Claims: The weights, tares and tests affixed by IFP's invoice shall
govern unless proven to be incorrect. Claims relating to quantity, quality,
weight, condition and loss of or damage to any of the Products sold under this
Agreement shall be waived by BUYER unless made within thirty (30) days of
receipt of Product by BUYER?
8.0 TERM
8.1 This Agreement shall be effective as of September 1, 1997, and shall
continue in full force and effect for a period of three (3) years commencing
with the date of first commercial sale of Products by BUYER. This Agreement or
any renewal thereof shall be automatically renewed and extended in the same
terms and conditions at the expiration of the term for a renewal period of two
(2) years thereafter unless either party shall notify the other party in writing
at least one (1) year prior to the expiration of the initial term of renewal
term of its intention not to renew or amend this Agreement.
9.0 ESTIMATES AND PURCHASE ORDERS
9.1 IFP will order components of Products, printed labeling, package
materials in containers based on the lead time required to fill BUYER's
estimated requirements. BUYER agrees to purchase from IFP all Products
manufactured for BUYER by IFP in accordance with BUYER's most recent written
estimated and/or purchase orders. Upon change in artwork requested by BUYER or
upon termination of this Agreement, BUYER shall purchase any inventory of
Products manufactured for it by IFP and remaining at the date of termination
along with any components, printed labeling, packaging materials and containers
which were acquired and/or prepared by IFP based on forecast pursuant to this
Agreement. Any inventory of packaging components rendered obsolete as a result
of a change shall be purchased from IFP by BUYER.
9.2 At the initiation of this Agreement, BUYER will provide IFP with a
written forecast indicating BUYER's projected needs for the succeeding year.
9.3 BUYER shall place orders in increments of single batches, i.e., as
stated in "Exhibit A."
9.4 At the end of each calendar quarter, during the term of this Agreement
or any subsequent agreement, BUYER shall provide IFP with more specific data as
to its projected needs for the following four (4) calendar quarters. The parties
acknowledge that any data provided to IFP
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by BUYER concerning its projected needs shall be estimates and shall not be
binding on BUYER unless and until confirmed by BUYER's written purchase order.
9.5 BUYER shall issue written purchase orders to IFP at least ninety (90)
days prior to the requested delivery date if the requirements are at or below
the previously supplied estimates and one hundred twenty (120) days if
requirements exceed the previous estimates by twenty-five (25) percent(%).
9.6 BUYER's purchase orders shall designate the desired quantities of
Products, delivery dates and destinations. IFP shall promptly fill and ship all
orders of Products in accordance with BUYER's instructions.
10.0 WARRANTIES
10.1 IFP warrants that Products delivered to BUYER under this Agreement
shall, at the time of delivery;
10.1.1 Meet the specifications for products set forth in Exhibit B
attached hereto;
10.1.2 Shall be in good, usable and merchantable condition; and,
10.1.3 Shall be in compliance with all applicable Federal laws and
regulations.
10.2 BUYER shall have a period of thirty (30) days from date of receipt of
the Products to inspect and reject any shipment of Products on the grounds that
it does not comply with the provisions of Article 10.1 hereof. All or part of
any shipment may be held for IFP's disposition and at IFP's expense if found to
be not in compliance with the specifications set forth in Exhibit B hereof,
provided IFP confirms such noncompliance through generally acceptable quality
control procedures.
10.3 IFP will indemnify and hold BUYER harmless for the administrative and
product costs associated with a product recall should such recall arise from
IFP's willful misconduct or negligence in the manufacture of product. Any claim
for indemnification hereunder shall be supported by reference to generally
accepted quality control procedures mutually agreeable to IFP and BUYER.
10.4 Notwithstanding the provisions of Article 12.0 hereof, BUYER's
exclusive remedy and IFP's exclusive liability under this Agreement or otherwise
(including negligence) shall be for damages which shall in no event exceed so
much of the purchase price as is applicable to that portion of the particular
shipment with respect to which damages are claimed. BUYER assumes all risks and
liability, and IFP assumes no liability, with respect to unloading and discharge
of the Products, storage, handling, sale and use of the products including its
use alone or in combination with other substances or in the operation of any
process, and the compliance or non compliance with all Federal, state and local
laws and regulations applicable to the Products. Other than as expressly stated
in this Agreement, neither party shall be liable to the other for any incidental
or consequential damages arising in connection with this Agreement or the
Products sold hereunder.
11.0 PATENT INDEMNITY
11.1 IFP shall indemnify and hold BUYER harmless from all costs, damages,
and expenses (including attorney's fees) arising out of any suit or action
brought against BUYER based upon a
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claim that any process or technical data owned by IFP infringes a U.S. patent or
any other proprietary rights.
11.2 BUYER will indemnify and hold IFP harmless from all costs, damages and
expenses (including attorney's fees) arising out of any suit or action against
IFP based on a claim (i) that any process or technical data or other Product or
manufacturing specifications furnished by BUYER infringes on a U.S. patent or
other proprietary rights or (ii) that sale of distribution of the Products by
BUYER infringes a U.S. patent(s).
12.0 GENERAL INDEMNITIES/CONSEQUENTIAL DAMAGES
12.1 IFP will indemnify and hold BUYER harmless for any and all liability,
damage, loss, cost or expense (including reasonable attorney's fees) resulting
from any third party claims made or suits brought against BUYER which arise from
IFP's negligence in the manufacture of Products hereunder or IFP's breach of the
warranty set forth in Article 10.1 hereof. Upon filing of any such claim or
suit, BUYER shall immediately notify IFP.
12.2 BUYER will indemnify and hold IFP harmless from any and all liability,
damage, loss, cost or expense (including reasonable attorney's fees) resulting
from any third party claims made or suits brought against IFP which arise from
BUYER's willful misconduct or negligence in the specifications for, or handling,
distribution, marketing or sale of Products hereunder. Upon filing of any such
claim or suit, IFP shall immediately notify BUYER.
12.3 The applicable provisions of the "cross-indemnities" in Articles 12.1
and 12.2 hereof shall also apply to IFP's production and BUYER's use of the
Products produced from pilot batches.
12.4 BUYER shall provide to IFP evidence of Product Liability and
Contractual Liability insurance reasonably satisfactory to IFP of not less than
$2 million per occurrence prior to IFP delivering initial commercial product
naming IFP as an insured under such policy. Insurance shall maintain in force
for the term of this Agreement and any subsequent renewals. Failure to
demonstrate proof of valid in-force coverage or such other evidence of coverage
for third party liability as shall be satisfactory to IFP, or failure to
maintain such coverage shall be terms for immediate termination of this
Agreement by IFP.
12.5 IFP shall self-insure or maintain Product liability insurance to the
extent of $2 million dollars.
13.0 REGULATORY FILINGS AND APPROVALS
13.1 BUYER shall fulfill all approval and reporting requirements of
applicable Federal and State regulatory agencies with respect to the Products
supplied by IFP hereunder, provided that IFP shall cooperate with BUYER in
providing any data or other information readily available to IFP concerning the
Products which will enable BUYER to secure the approvals necessary for the
Products.
14.0 FORCE MAJEURE
14.1 BUYER and IFP shall not be considered in default of their obligations
hereunder to the extent that performance of such obligations hereunder to the
extent that performance of such obligations is delayed, hindered or prevented by
Force Majeure. Force Majeure includes, without imitation, inclement weather,
strikes, lockouts, inability to procure labor or materials or fuels due to
shortages, fires, riots, incendiarism, interference by civil of military
authorities, compliance with the
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regulations or order of any government authority, or the outbreak or war or
insurgence, or acts of war (declared or undeclared) and any other cause which is
beyond the reasonable control of either party. Specifically excluded from this
definition are those acts of the Federal Government of any agency thereof, or
judicial action which could have been avoided by compliance with such laws or
regulations, publicly available and reasonably expected to be known by BUYER and
IFP.
15.0 FAILURE TO MARKET/REPURCHASE OF OBLIGATIONS
15.1 In the event IFP wishes to cancel this Agreement or any subsequent
Agreement relating to the supply of Products by IFP prior to the expiration date
hereof, IFP agrees to sell to BUYER at BUYER's request under the current terms
and conditions of this Agreement or subsequent renewal a supply of Product of
not more than the total purchased amount of Product for the immediately prior
one (1) year period.
16.0 TERMINATION
16.1 In the event that either party hereto shall at any time commit a
material breach of any of its obligations hereunder, the non-breaching party
may, at its option, terminate this Agreement by giving the other party at least
one hundred and eighty (180) calendar days' prior written notice. Unless the
breaching party cures the breach within the aforesaid notice period, this
Agreement shall be deemed terminated.
16.2 Any termination of this Agreement shall not release the parties from
liabilities and obligations accrued as of the date thereof including but not
limited to BUYER's reimbursement of IFP's cost of materials purchased for the
Products prior to notice of termination.
17.0 NON-WAIVER OF RIGHTS
17.1 Failure by IFP or BUYER at any time to enforce any of the terms or
conditions of this Agreement shall not affect or impair such terms or conditions
in any way, or the right of IFP or BUYER at any time to avail itself of such
remedies as it may have for any breach of such terms or conditions under the
provisions of this Agreement, in equity or at law.
18.0 TRADEMARKS AND TRADE NAMES
18.1 BUYER hereby acknowledges that it does not have, and shall not
acquire, any interest in any of IFP's trademarks or trade names for the Products
unless otherwise expressly agreed.
18.2 BUYER agrees not to use any trade names or trademarks of IFP,
including but without limitation the trade name and trademark "IFP", except as
specifically authorized by IFP in writing both as to the names or marks which
may be used and as to the manner and prominence of use.
19.0 CONFIDENTIALITY
19.1 The parties hereby acknowledge that any and all information,
knowledge, technology and trade secrets relating to the production, processing
and testing of Products may be used only in the production of Products under
this Agreement.
19.2 BUYER shall maintain in confidence all information, knowledge,
technology and trade secrets relating to the Products as purchased from IFP or
developed solely by IFP after the date of this Agreement and disclosed to BUYER
and BUYER shall not use such IFP information, knowledge,
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technology and trade secrets for itself or for any third party not disclose the
same to any third party without the express written consent of IFP.
19.3 IFP shall maintain in confidence all information, knowledge,
technology and trade secrets relating to formula for the Products as purchased
from BUYER after the date of this Agreement and disclosed to IFP and IFP shall
not use such BUYER formulae, information, knowledge, technology and trade
secrets for itself or for any third party nor disclose the same to any third
party without the express written consent of BUYER.
19.4 The obligations set forth above shall not apply to any information,
data, technology, or trade secrets disclosed by one party to the other, either
in anticipation of or pursuant to this Agreement or any other agreement between
the parties, if it is (a) already known to the receiving party as of the date
such disclosure is made; (b) available to the receiving party from printed
publications as of the date such disclosure is made or becomes available from
printed publications through no fault or the receiving party; or (c) disclosed
to said receiving party by an independent third party through no fault of the
receiving party.
20.0 NOTICES
20.1 Any notice required to be given herein shall be deemed to have been
sufficiently given to either party for all of the purposes hereof if given by
telephone, telex, or cable and confirmed by registered mail, postage prepaid,
addressed as follows:
TO IFP: President
I F P, Inc.
0000 Xxxxxxx Xxxxx
Xxx 00 & Xxxxxxxxxx 00
Xxxxxxxxx, XX 00000-0000
TO BUYER: President
Niche Pharmaceuticals, Inc.
000 Xxxxx Xxx Xxxxxx
P. O. Xxx 000
Xxxxxxx, Xxxxx 00000-0000
or to such other address as either of the parties shall designate by notice
given as herein required. Notices shall be effective seven (7) calendar days
after mailing of confirmation.
21.0 AMENDMENTS AND WAIVER
21.1 This Agreement cannot be amended in any respect except in writing duly
excuted by both parties. No waiver of compliance with any provisions or
conditions of this Agreement and no approvals provided for in this Agreement
shall be effective unless evidenced by a written instrument executed by the
party to be charged.
22.0 ASSIGNMENT
22.1 Neither party hereto shall assign this Agreement or any part thereof
or any interest herein without the written approval of the other party hereto
except as herein otherwise provided and such approval may not be unreasonably
withheld.
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23.0 GOVERNING LAW
23.1 This Agreement shall be governed by the laws of the State of Texas.
24.0 ENTIRE AGREEMENT
24.1 This Agreement constitutues the entire understanding between the
parties and shall supersede any prior agreements between the parties hereto.
Each party acknowledges that there are no other understandings which relate to
the matters covered herein or which are inconsistent with any provisions of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate effective as of the date of the latest of the signatures hereto.
NICHE PHARMACEUTICALS, INC. I F P , INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ illegible
Title: CEO President Title: President
Date: September 1, 1997 Date: August 25, 1997
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