EXHIBIT 4.30
MANUFACTURING AGREEMENT
This MANUFACTURING AGREEMENT (the "Manufacturing Agreement") is entered
into as of December 7, 2002 (the "Effective Date"), by and between Xxxxx
(Chemicals) Limited ("Xxxxx"), a company organized and existing under the laws
of the Republic of Ireland and Xxx Xxxxx and Company ("Lilly"), a corporation
organized and existing under the laws of the State of Indiana. Xxxxx and Lilly
are sometimes referred to herein individually as a "Party" and collectively as
"Parties".
RECITALS
WHEREAS, Lilly and Xxxxx have entered into an Assignment, Transfer and
Assumption Agreement of even date herewith (the "Assignment Agreement");
WHEREAS, subject to the terms and conditions set forth in this
Manufacturing Agreement, Xxxxx wishes to have Lilly manufacture and sell
Sarafem(R) (fluoxetine hydrochloride) to Xxxxx; and
WHEREAS, subject to the terms and conditions set forth in this
Manufacturing Agreement, Lilly wishes to manufacture and sell such product for
and to Xxxxx.
NOW, THEREFORE, the Parties hereto, intending to be legally bound,
hereby agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Manufacturing Agreement, the following terms will
have the meanings set forth below:
1.1 Capitalized terms not otherwise defined herein will have the meaning
given to them in the Assignment Agreement.
1.2 "ADDITIONAL QUANTITIES" will have the meaning set forth in Section 4.3.
1.3 "ASSIGNMENT AGREEMENT" will have the meaning set forth in the first
WHEREAS clause of this Manufacturing Agreement.
1.4 "AUDIT" means a review by Xxxxx or its appointed representatives (such
representatives to be reasonably acceptable to Lilly) of Lilly's
processes, procedures and documents as described in Section 3.3(b) of
this Manufacturing Agreement.
1.5 "CGMP" means current Good Manufacturing Practices pursuant to 21
C.F.R.Section 211 et seq., as such may be amended from time to time.
1.6 "CONTRACT QUARTER" means the period ending on the last day of the
calendar month that contains the day immediately preceding the
three-month anniversary of the Closing Date, and each consecutive three
calendar month period thereafter during the term of this Agreement.
1.7 "CONTRACT YEAR" means the period ending on the last day of the calendar
month that contains the day immediately preceding the one-year
anniversary of the Closing Date, and each consecutive twelve calendar
month period thereafter during the term of this Agreement.
1.8 "DISPUTED PRODUCT" will have the meaning set forth in Section 5.3(b).
1.9 "EFFECTIVE DATE" will have the meaning set forth in the first paragraph
of this Manufacturing Agreement.
1.10 "FDCA" means the Federal Food, Drug and Cosmetic Act (21 U.S.C.Section
301 et seq.), as may be amended from time to time, together with any
rules and regulations promulgated thereunder.
1.11 "FORECAST" will have the meaning set forth in Section 4.4.
1.12 "INVENTORY" will have the meaning set forth in Section 2.1.
1.13 "LATENT DEFECT" means a defect that causes the Product to fail to
conform to the Specifications and that was not discoverable upon
reasonable inspection and testing.
1.14 "LILLY ERROR" means the negligent performance, failure to perform or
willful misconduct in the performance by Lilly or its officers, agents
or employees of any obligation imposed upon or assigned to Lilly under
this Manufacturing Agreement or any Applicable Laws.
1.15 "MANUFACTURING RESPONSIBILITY DOCUMENT" OR "MRD", a copy of which is
attached hereto as EXHIBIT A, sets forth additional written
instructions regarding the manufacture and supply of Product. Sections
of the MRD may be modified from time to time through
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the issuance of a revised section signed on behalf of each of the
Parties by an authorized representative incorporating the modification
and stating the effective date and revision number of the modification.
In the event of conflict between the terms of the MRD on the one hand,
and the terms of the Assignment Agreement, this Manufacturing
Agreement, or the Quality Agreement, on the other hand, the terms of
the Assignment Agreement, Manufacturing Agreement or Quality Agreement,
as applicable, will govern.
1.16 "PARTY" or "PARTIES" will have the meaning set forth in the first
paragraph of this Manufacturing Agreement.
1.17 "PRODUCT" means the presentations of finished fluoxetine hydrochloride
pharmaceutical product set forth in EXHIBIT B attached hereto marketed
under the Assigned Trademark in the Territory. Notwithstanding the
foregoing, "Product" will not mean or include Xxxxx New Products.
1.18 "PURCHASE MAXIMUMS" will have the meaning set forth in Section 4.2.
1.19 "PURCHASE MINIMUM" will have the meaning set forth in Section 4.1.
1.20 "QUALITY AGREEMENT" means an agreement between the Parties which
describes certain quality and regulatory responsibilities relating to
the manufacture and release for sale of the Product by Lilly to Xxxxx.
The Quality Agreement will be compiled and agreed upon by the Parties
prior to the Closing Date. The Quality Agreement will be subject to and
not inconsistent with the terms of this Manufacturing Agreement and the
Assignment Agreement, and in the event of conflict between terms of
this Manufacturing Agreement or the Assignment Agreement, as
applicable, on one hand, and the Quality Agreement on the other, this
Manufacturing Agreement or the Assignment Agreement, as applicable,
will govern. Sections of the Quality Agreement may be modified from
time to time through the issuance of a revised Quality Agreement signed
on behalf of each of the Parties by an authorized representative
incorporating the modification and stating the effective date and
revision number of the modification. A reference to "MRD/Quality
Agreement" in this Manufacturing Agreement will mean the MRD and/or
Quality Agreement as the context requires.
1.21 "SPECIFICATIONS" means the specifications for manufacturing and
packaging the Product as set forth in the sNDAs and in EXHIBIT C
attached hereto.
1.22 "THREE-YEAR-FORECAST" will have the meaning set forth in Section
4.4(b).
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ARTICLE 2
PAYMENTS; PURCHASE AND PRICE OF PRODUCT
2.1 PURCHASE OF INVENTORY. On the Closing Date, Xxxxx will purchase from
Lilly and Lilly will supply to Xxxxx, finished goods inventory of trade
and sample Product designated by Lilly to be sold in the Territory
(containing an expiration date of twelve (12) months or more with
respect to sample Product and eighteen (18) months or more with respect
to trade Product) existing as of the Closing Date, less the quantity of
Product held by Lilly's employee health services on the Closing Date
("Inventory"). The purchase price for such finished goods inventory is
included in the payment required to be made by Xxxxx pursuant to
Sections 2.1 and 2.2 of the Assignment Agreement. The quantity of such
finished goods inventory conveyed to Xxxxx pursuant to this Section 2.1
will be applied towards Galen's minimum purchase requirements as set
forth in Sections 4.1 and 4.4, below, and Lilly's maximum supply
obligations set forth in Sections 4.2 and 4.4, below. Lilly will have
no obligation to re-label or over-label any such Product inventory.
Xxxxx will not re-label or over-label any such Product inventory.
2.2 PURCHASE OF FUTURE PRODUCT. As of the Closing Date and during the term
of this Manufacturing Agreement, subject to Section 4.1 (to the extent
the Purchase Minimum is greater than the purchase obligation described
in this Section 2.2) and Sections 4.2 and 4.4, below, Xxxxx will
purchase exclusively from Lilly one hundred percent (100%) of Galen's
future requirements for trade and sample Product in the Territory prior
to FDA approval of Galen's Application for Marketing Authorization for
Product, and fifty percent (50%) of Galen's future requirements for
trade and sample Product in the Territory after the FDA approval of
Galen's Application for Marketing Authorization for Product, and Lilly
will manufacture and supply such Product for and to Xxxxx. Xxxxx may
request, but will not, subject to the minimum purchase obligations set
forth in Sections 4.1 and 4.4, below, be obligated to request, that
Lilly manufacture and supply Product for the Territory in quantities in
excess of Galen's purchase obligations pursuant to this Section 2.2
after the FDA approval of Galen's Application for Marketing
Authorization for Product, and, subject to Lilly's maximum supply
obligations set forth in Sections 4.2 and 4.4, below, Lilly will
manufacture and supply such requested Product for and to Xxxxx. The
purchase price for trade and sample Product purchased by Xxxxx pursuant
to this Section 2.2 is included in the payment required to be made by
Xxxxx pursuant to Sections 2.1 and 2.2 of the Assignment Agreement. The
expiration date with respect to all Product purchased by Xxxxx pursuant
to this Section 2.2 will be no earlier than eighteen (18) months from
the date Lilly makes the applicable Product available for
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shipment. Lilly will have no obligation to manufacture or package
Product for Xxxxx in any presentation not set forth in EXHIBIT B.
Notwithstanding anything in this Manufacturing Agreement to the
contrary, in no event will Lilly be required to supply Product to Xxxxx
after the effective date of the termination or expiration of this
Agreement except to the extent Lilly was obligated to deliver Product
to Xxxxx on or before the effective date of the termination or
expiration of this Manufacturing Agreement.
ARTICLE 3
MANUFACTURING AND QUALITY
3.1 MANUFACTURING. Lilly will manufacture, package, label, test, prepare
for shipment and ship Product to Xxxxx from Xxxxx'x facilities, or the
facilities of a Third Person under subcontract with Lilly, at the times
and in the quantities set forth by Xxxxx in a purchase order pursuant
to Section 4.5, subject, however, to the quantity restrictions set
forth in Sections 2.2, 4.1, 4.2 and 4.4 and the minimum lead time for
orders set forth in Section 4.5. Each shipment of Product: (i) will
have been manufactured in accordance with cGMP in effect at the time of
manufacture, (ii) will not be adulterated or misbranded within the
meaning of the FDCA by Lilly or any Third Person subcontractors of
Lilly, (iii) will not have been manufactured or sold in violation of
any Applicable Laws in any material respect, and (iv) upon delivery to
Xxxxx, FOB Xxxxx'x loading dock, will convey good title to such Product
to Xxxxx. Lilly will fax a certificate of analysis to Xxxxx (at such
location designated in the Quality Agreement) no later than five (5)
days after Galen's receipt of Product confirming that such Product
meets the Specifications then in effect.
3.2 MODIFICATIONS. (a) Xxxxx will inform Lilly in writing as soon as
practical of any proposed modification to the Specifications. Lilly
will inform Xxxxx in writing of the amount of any additional costs and
expenses (including capital expenditures, regulatory and any other
costs) and/or increase in on going Product manufacturing costs Lilly
would actually incur due to the modification, and if Xxxxx elects to
adopt the modification, Xxxxx will promptly reimburse Lilly for such
required capital expenditures, regulatory and other costs associated
with the modification and such additional purchase price to be paid to
reflect any increase in on-going Product manufacturing costs resulting
from such modification.
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(b) Lilly will provide Xxxxx a detailed written
explanation of such costs and expenses and/or increase in on going
Product manufacturing costs. If Lilly is unable or unwilling to comply
with a proposed modification or if Xxxxx is unwilling to pay Lilly's
costs to implement such modification or the increase in purchase price
associated therewith, then Xxxxx will withdraw the proposed
modification and the Specifications will remain in full force and
effect; provided, however, that if (i) Xxxxx is willing to pay such
costs, (ii) Lilly is able, but unwilling, to implement such
modification, and (iii) such modification relates to testing or
packaging, Xxxxx and Xxxxx will work together in good faith to
determine if it would be appropriate for Xxxxx to implement such
modifications at the facilities of Xxxxx, an Affiliate of Xxxxx or a
Third Person sub-contractor. The use of any such Third Person
sub-contractor shall be subject to Lilly's prior written consent, which
consent shall not be unreasonably withheld for those Third Person
sub-contractors on Lilly's approved list, and such approved list shall
be provided to Xxxxx from time to time at Galen's request.
(c) Lilly will inform Xxxxx in writing as soon as
practical of any modification to the Specifications proposed by Lilly.
Lilly will not modify any Specification (other than with respect to
minor changes to secondary packaging, which Lilly may modify) without
Galen's prior written consent, which consent will not be unreasonably
withheld. Except for modifications required by the FDA or Applicable
Laws, Lilly will be solely responsible for the costs of any changes in
Specifications proposed by Lilly.
(d) Xxxxx will notify Lilly as soon as practical of any
changes to any Specifications or procedures that are required by the
FDA or Applicable Law and that could have an impact on Lilly's
performance of this Manufacturing Agreement. Any such changes will be
deemed (and treated as) modifications proposed by Xxxxx under this
Section 3.2; provided, however, that if Xxxxx is not willing to pay for
such modification that is required by the FDA or Applicable Laws as
described in this Section 3.2 or Lilly is unable to implement such
modification that is required by Applicable Laws after exercising
commercially reasonable efforts, Lilly may terminate this Manufacturing
Agreement as of the date on which the FDA or Applicable Laws require
the implementation of such modification. Notwithstanding anything to
the contrary provided herein, the modification required by Applicable
Law becoming operational shall constitute a waiver of Lilly's rights to
terminate under this Section 3.2(d).
(e) In no event will Lilly be required to make under this
Section 3.2 a modification that is prohibited by Applicable Law or
Governmental or Regulatory
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Authorities. In no event will Lilly be prohibited from making under
this Section 3.2 a modification that is required by Applicable Laws or
Governmental or Regulatory Authorities; provided, however, that Lilly
shall consult with Xxxxx prior to making any such modification; and
provided further, that Lilly shall use its commercially reasonable
efforts to implement any such modification at the lowest practical
cost. Lilly will have sole responsibility, at Galen's cost, for
obtaining any and all necessary regulatory approvals from the FDA for
modifications to the Specifications and sNDAs and reporting any
modifications to the Specifications and the sNDAs to the FDA as
appropriate. The Product supplied to Xxxxx under this Manufacturing
Agreement will be manufactured under the sNDAs.
(f) Every proposed modification will be treated
separately.
3.3 QUALITY CONTROL AND ASSURANCE; CGMP AUDIT.
(a) Quality Control and Assurance. Lilly will manufacture
the Product in compliance with the Specifications. Lilly will perform
quality control testing and quality oversight on the Product to be
delivered to Xxxxx hereunder in accordance with the Specifications,
cGMP and the MRD/Quality Agreement.
(b) Access to Lilly Facilities by Xxxxx Representatives.
Upon no less than forty-five (45) days' written notice to Lilly and no
more than one (1) time each Calendar Year, Lilly will permit Xxxxx to
conduct an Audit of Lilly's facilities during regular business hours
for the purpose of making quality control inspections to assure cGMP
compliance of the facilities used in the manufacturing, receiving,
sampling, analyzing, storing, handling, packaging and shipping of
Product, including, but not limited to, in the receipt, storage and
issuance of raw materials, labeling and packaging components, and
ingredients thereof. Notwithstanding the immediately preceding
sentence, in the event of a rejection of Product by Xxxxx pursuant to
Section 5.3, below, because of a failure to meet Specifications, then
Xxxxx will have an additional right to conduct an Audit under the
provisions of this Section 3.3(b). Any Xxxxx representatives will be
advised of the confidentiality obligations of Article 9, below, and
will follow such security and facility access procedures as are
reasonably designated by Lilly.
Lilly may require that at all times the Xxxxx representatives
be accompanied by a Lilly representative and that the Xxxxx
representatives not enter areas of the facility used in production of
the Product at times other than when the production of Product is
occurring to assure protection of Lilly Confidential Information or
confidential
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information of a Third Person. Lilly will respond to any written audit
observations provided by Xxxxx within ninety (90) days in the form of a
mutually agreed upon action plan.
(c) Safety Procedures. Lilly will have responsibility for
developing, adopting and enforcing safety procedures for the handling
and production of Product by Lilly and the handling and disposal of all
waste relating thereto. Such responsibilities will terminate as to
Product upon delivery thereof to Galen's common carrier.
(d) Applicable Laws. Lilly and Xxxxx shall each comply
with all Applicable Laws in performing its obligations hereunder,
including laws with respect to the protection of the environment.
3.4 RECORDS AND ACCOUNTING BY LILLY. Lilly will, with respect to each lot
of Product produced by it hereunder, for the longer of (i) any period
required by Applicable Laws, or (ii) a period of one (1) year after the
expiry of the expiration dating of such lot, keep accurate records of
the manufacture and testing of the Product produced by it hereunder,
including, without limitation, all such records which are required
under Applicable Laws. Access to such records will be made available by
Lilly to Xxxxx during normal business hours upon Galen's reasonable
written request.
ARTICLE 4
PURCHASE OF PRODUCT; FORECASTS
4.1 MINIMUM PURCHASE REQUIREMENTS. Without limiting Galen's purchase
obligations described in Section 2.2, above, Xxxxx will purchase from
Lilly prior to the FDA's approval of Galen's Application for Marketing
Authorization for Product, or from Lilly or a Third Person(s), or any
combination thereof, after the FDA's approval of Galen's Application
for Marketing Authorization for Product, at least five hundred (500)
kilograms of trade Product and one hundred forty (140) kilograms of
sample Product each Contract Year (the "Purchase Minimum"). For
purposes of this Manufacturing Agreement, the term "kilogram" when used
in the context of the weight of Product means the kilograms of active
pharmaceutical ingredient contained in the Product.
For purpose of determining the date upon which Product is
purchased pursuant to the terms of this Manufacturing Agreement, the
date of "purchase" of
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Product means the date upon which Lilly or a Third Person, as
applicable, is obligated to deliver such Product to Xxxxx.
Notwithstanding the foregoing, in the event that a Reduction
Date occurs during a Contract Year, the Purchase Minimums for any
Contract Year thereafter will be one hundred fifty (150) kilograms of
trade Product and forty-two (42) kilograms of sample Product in any
such Contract Year.
4.2 MAXIMUM PURCHASE AMOUNTS. Notwithstanding Lilly's supply obligations
set forth in Sections 2.2 and 4.4, Lilly will not be required to supply
Xxxxx (i) with more than two hundred fifty (250) kilograms of trade
Product in any Contract Quarter and more than one thousand (1,000)
kilograms of trade Product in any Contract Year, and (ii) with more
than seventy (70) kilograms of sample Product in any Contract Quarter
and no more than two hundred eighty (280) kilograms of sample Product
in any Contract Year. The maximum quantities set forth in the preceding
sentence will be collectively referred to herein as the "Purchase
Maximums." For purposes of this Manufacturing Agreement, Lilly will be
deemed to have "supplied" Product to Xxxxx on the date that Lilly has
delivered Product to Xxxxx in accordance with Section 4.7, below.
Notwithstanding the foregoing, in the event that a Reduction
Date occurs during a Contract Year, the Purchase Maximums for any
Contract Year thereafter will be three hundred (300) kilograms of trade
Product and eighty-four (84) kilograms of sample Product in any such
Contract Year and the Purchase Maximums for any Contract Quarter
thereafter will be seventy-five (75) kilograms of trade Product and
twenty-one (21) kilograms of sample Product in any such Contract
Quarter.
4.3 PURCHASE OF PRODUCT FROM THIRD PERSONS. Notwithstanding Section 4.2, if
Xxxxx has purchased the Purchase Maximums from Lilly in a Calendar
Quarter or Calendar Year, Xxxxx may, but will not be obligated to,
request that Lilly provide additional quantities of Product in excess
of the Purchase Maximums ("Additional Quantities"). Lilly will consider
in good faith whether to supply Additional Quantities. Additional
Quantities will be supplied to Xxxxx at the prices determined by Lilly.
If Lilly indicates that it is unable or in good faith unwilling to
supply to Xxxxx such Additional Quantities or if Xxxxx in its sole
discretion does not request such Additional Quantities from Lilly,
then, provided the FDA has approved Galen's Application for Marketing
Authorization for Product, Xxxxx will have the right to purchase such
Additional Quantities of Product from a Third Person manufacturer under
its Application for Marketing Authorization;
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provided, however, that the purchase of Additional Quantities by Xxxxx
from a Third Person manufacturer will not relieve Xxxxx of its
obligation to satisfy the Purchase Minimum or purchase obligations set
forth in Sections 2.2 and 4.4 from Lilly in any subsequent Contract
Quarter or Contract Year, as applicable. If Xxxxx purchases any such
Additional Quantities from a Third Person, Xxxxx will maintain, at its
cost, all records required to identify the manufacturer of such
Product.
4.4 FORECASTS.
(a) Upon the Closing Date and on or before the first day
of each Contract Quarter thereafter, Xxxxx will provide to Xxxxx
Xxxxx'x estimate of the total quantity of Product to be delivered for
the following Contract Quarter and the succeeding eight (8) Contract
Quarters, broken down into calendar months (the "Forecast"). Subject to
Sections 2.2 (to the extent Galen's purchase obligation in Section 2.2
is greater than the purchase obligation described in this Section
4.4(a)), 4.1 and 4.2, above, during each Contract Quarter, Xxxxx will
be obligated to purchase eighty percent (80%) of the quantities of
Product forecasted for such Contract Quarter in the Forecast in which
such Contract Quarter was the third (3rd) Contract Quarter of the
Forecast, and Lilly will be obligated to supply Xxxxx with quantity
ordered by Xxxxx unless the quantity exceeds one hundred twenty percent
(120%) of the quantities of Product forecasted for such Contract
Quarter in the Forecast in which such Contract Quarter was the third
(3rd) Contract Quarter of the Forecast. Except as otherwise set forth
in this Section 4.4 or elsewhere in this Agreement, the Parties agree
that the Forecasts will be for general planning purposes only, and will
not be binding on Lilly or Xxxxx. If Xxxxx fails to provide a Forecast
when due, the most recent Forecast will be deemed to be the Forecast in
place of the Forecast not delivered, with the quantity forecasted for
the ninth (9th) Contract Quarter of the Forecast deemed to be zero (0).
(b) Three-Year Forecast. In addition to the Forecasts,
Xxxxx will deliver to Lilly on the Closing Date a forecast in months of
the quantity of Product Xxxxx expects to receive from Lilly during the
term of this Manufacturing Agreement (the "Three-Year Forecast"). The
Parties agree that the Three-Year Forecast will be used for planning
purposes only and will not be binding on either Party (except to the
extent a forecast for a month or quarter is included in a Forecast and
is otherwise binding as set forth in Section 4.4(a)).
(c) Components or Materials. Reasonable quantities of
components or materials that are used in the manufacture of the
Product, will be purchased by Lilly, at its
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own cost and expense. Except for the initial changes in packaging and
labeling that are required under Section 5.1, if Xxxxx requests any
change to the quantities previously forecasted for a Contract Quarter
in a Forecast that causes any obsolescence of any such components or
materials purchased by Lilly and the Specifications have been modified
pursuant to Section 3.2 causing an increase in Lilly's manufacturing
cost, Xxxxx will be responsible to Lilly for the reasonable and direct
costs and expenses actually incurred associated with said components or
materials related to the increase in manufacturing costs (including,
but not limited to, any costs related to returning such components or
material to the vendor or otherwise disposing thereof).
4.5 PURCHASE ORDERS. Xxxxx will purchase Product solely by written purchase
orders, which purchase orders must be consistent with the quantity
restrictions set forth in Sections 2.2, 4.1, 4.2 and 4.4, above.
Product must be ordered in whole lot quantities. Each Xxxxx order will
be governed by the terms of this Manufacturing Agreement, the
Assignment Agreement and the MRD/Quality Agreement, and no terms or
conditions of Xxxxx purchase orders, Lilly's acknowledgement forms, or
any other forms will be applicable except those specifying quantity
ordered (subject to the quantity restrictions) and shipment locations.
Xxxxx will submit each such written purchase order to Lilly at least
ninety (90) days in advance of the date specified in each purchase
order by which delivery of the Product is required. Each purchase order
will include the information listed in EXHIBIT D attached hereto. Upon
receipt and acceptance of each purchase order by Lilly hereunder, Lilly
will supply the Product in such quantities (with any variances
permitted hereunder) and will use commercially reasonable efforts to
deliver such Product to Xxxxx on the deliver dates specified in such
purchase order, unless otherwise mutually agreed to in writing by the
Parties. Delivery by Lilly of greater than ninety percent (90%) of the
quantity ordered will be in full satisfaction of the quantity ordered
in such purchase order and satisfaction of Lilly's obligation to supply
such order; provided, however, that the full purchase order will be
applied to Galen's minimum purchase obligations under this
Manufacturing Agreement, but only the quantities that Lilly actually
delivers to Xxxxx will be applied to the maximum purchase amounts under
this Manufacturing Agreement. With respect to the purchase of
Additional Quantities and increased manufacturing costs arising out of
modifications to the Specifications, Xxxxx will only be invoiced and
required to pay for the quantities that Lilly actually delivers to
Xxxxx.
4.6 TRANSFER OF MANUFACTURING RESPONSIBILITIES. Lilly agrees to provide to
Xxxxx or its designees, at no cost to Xxxxx except as otherwise
provided in this Section 4.6, up to five hundred (500) hours of
manufacturing transfer assistance to be used by Xxxxx prior to the
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third year anniversary of the Closing Date. Any transfer assistance
provided by Lilly to Xxxxx in excess thereof shall be paid for by Xxxxx
at the rate of $275 per hour. Lilly will have no obligation to provide
assistance in excess of the required 500 hours, but will consider
requests for assistance by Xxxxx in good faith. In all cases, Xxxxx
agrees to pay Lilly for all reasonable travel, room and board expenses
incurred by Lilly personnel in providing such assistance. Lilly will
invoice Xxxxx on a monthly basis for the expenses incurred during the
previous calendar month. Xxxxx will pay such invoices within thirty
(30) days from the date of invoice, with such payments being made by
Federal Reserve electronic wire transfer to an account designated by
Lilly. Lilly's obligation pursuant to this Section 4.6 will cease or be
suspended, as applicable, in the event this Manufacturing Agreement is
terminated or suspended by Lilly in accordance with the provisions of
this Agreement. In connection with the technology transfer contemplated
in this Section 4.6, Lilly will only be required to provide Xxxxx or
its designees with such documentation and technical assistance as is
reasonably necessary to transfer the manufacturing of Product to Xxxxx
or its designees.
4.7 SHIPMENT OF PRODUCT. Shipment of Product will be to one distribution
center designated by Xxxxx for trade Product and one distribution
center designated by Xxxxx for sample Product. Lilly will not make
direct shipments to final customers. Xxxxx will select and pay the
carrier to be used. Product will be shipped FOB Lilly's loading dock,
freight class, Class 70 (Class of Commodity for Food and Pharmaceutical
Product) or as may otherwise be required pursuant to Applicable Laws.
Title and risk of loss or damage to the Product will remain with Lilly
to Lilly's loading dock, at which time title to the Product will rest
in, and risk of loss or damage to the Product will pass to, Xxxxx FOB
Lilly's loading dock. Xxxxx will cause Product to be picked up at
Lilly's dock no later than fifteen (15) business days after the later
of (i) the delivery date specified in the applicable purchase order,
and (ii) the date Lilly makes such Product available for shipment.
ARTICLE 5
LABELING; TRADE DRESS; NON-PRODUCT
5.1 LABELING, TRADE DRESS AND PACKAGING. The Product will be labeled,
prepared and packed for shipment in full compliance with the sNDAs and
cGMP, and in accordance with the MRD/Quality Agreement. Xxxxx, at its
expense, will provide Lilly with an electronic graphics file for all
new or revised printed packaging components to be used in
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the manufacture of Product. Such artwork will be implemented as soon as
practicable after all applicable regulatory requirements with respect
thereto have been met and in accordance with the provisions set forth
in the MRD/Quality Agreement. Until Galen's initial packaging and
labeling materials have been implemented, Product will continue to be
labeled and packaged with the labels and packaging being used by Lilly
as of the Closing Date. Lilly hereby grants to Xxxxx, for no additional
consideration, a non-exclusive license to use (but not modify) the
labels and packaging being used by Lilly for the Product as of the
Closing Date solely to market, sell and promote the Product delivered
by Lilly that contains such labels and packaging being used by Lilly as
of the Closing Date. The foregoing license does not xxxxx Xxxxx any
rights in the "Lilly" xxxx or name except as it appears in such labels
and packaging. The foregoing license will terminate upon the earlier of
Galen's sale of all of such Product, or on the second (2nd) year
anniversary of the Closing Date. Lilly will have no obligation to
re-label or over-label any such Product packaged prior to the
implementation of Galen's labels and packaging. Galen's name (or the
name of an Affiliate of Xxxxx) will appear as the exclusive distributor
of the Product and Lilly's name will appear as the manufacturer of the
Product (unless a Third Person manufactures any Product pursuant to
Section 4.3, above, in which event such Third Person's name will appear
as the manufacturer of the Product) unless it is reasonable and allowed
under Applicable Laws under the circumstances to delete Lilly's or such
Third Person's name. All changes made to Galen's initial labeling will
be made in accordance with the procedures and timelines set forth in
the MRD. Xxxxx will reimburse Lilly for any costs associated with
changing to Galen's initial labeling, trade dress and packaging work
provided by Lilly hereunder and for any subsequent packaging and
labeling change work required or otherwise requested by Xxxxx
hereunder, including without limitation, commercially reasonable costs
associated with the destruction of printed components rendered obsolete
as a result of the transactions contemplated hereby.
5.2 LOT NUMBERING. Lilly's lot numbers will be affixed on the containers
for the Product and on each shipping carton in accordance with
Applicable Laws.
5.3 TESTING AND REJECTION OF DELIVERED PRODUCT.
(a) Non-Conforming Product. Xxxxx will be entitled, but
not obliged, at its cost and expense and using the test methods set
forth in the sNDAs or other applicable cGMP test methods used by Lilly
at the time such Product was manufactured, to test any and all Product
delivered to it hereunder to determine whether such Product complies
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with the Specifications. Xxxxx will use validated methods to test
Product. Xxxxx will notify Lilly in writing promptly, and in any event
not later than forty-five (45) days after delivery thereof if it
rejects any Product delivered to it because such Product failed to meet
the Specifications. Any notice of rejection by Xxxxx shall be
accompanied by a reasonably detailed statement of its reasons for
rejection and a report of any pertinent analysis performed by Xxxxx on
the allegedly nonconforming product, together with the methods and
procedures used. Lilly shall notify Xxxxx as promptly as reasonably
possible, but in any event within forty-five (45) business days after
receipt of such notice of rejection, whether it accepts Galen's
assertions of non-conformity. If Xxxxx rejects any such Product it
will, at Lilly's request, provide Lilly with the opportunity to conduct
its own tests on such rejected Product. Product not rejected within the
forty-five (45) day period will be deemed accepted and, without in any
way limiting Lilly's indemnity obligations set forth in Section 11.1,
will constitute a waiver of any claims Xxxxx may have against Lilly
with respect to the purchase price for such shipment; subject, however,
to Galen's right to reject any Product for Latent Defects discovered by
Xxxxx and promptly reported to Lilly. Lilly will use commercially
reasonable efforts to replace the properly rejected Product with
Product which meets the Specifications within a commercially reasonable
time and will deliver such replacement Product, at Lilly's sole cost
and expense, to Xxxxx. In addition, Lilly will, at Lilly's sole cost
and expense, arrange for all such rejected Product to be picked up
promptly and, where applicable, destroyed in accordance with all
Applicable Laws. Product properly rejected in accordance with this
Section 5.3(a) will not be applied to the applicable Purchase Maximums,
Purchase Minimums, the purchase obligation set forth in Section 2.2, or
the minimum purchase or maximum supply obligations set forth in Section
4.4(a); but replacement Product will be applied to the applicable
Purchase Maximums, Purchase Minimums, the purchase obligations set
forth in Section 2.2, and the minimum purchase or maximum supply
obligations set forth in Section 4.4(a).
(b) Disputed Product. Notwithstanding subsection (a),
above, if Xxxxx and Xxxxx disagree on whether any Product rejected by
Xxxxx pursuant to subsection (a), above, complies with the
Specifications or on the methods for or results of testing of any of
such rejected Product, an independent laboratory which is acceptable to
both Parties will test the Product in dispute ("Disputed Product")
using the test methods set forth in the sNDAs, and any other applicable
cGMP test method used by Lilly at the time the Disputed Product was
manufactured, which tests will be validated by such laboratory
independently. If such laboratory finds that the Disputed Product meets
the Specifications, Xxxxx will promptly pay the fees of such laboratory
related to such testing.
14
To the extent such Disputed Product is found to meet the
Specifications, such Disputed Product will be applied to the applicable
Purchase Maximums, Purchase Minimums, the purchase obligations set
forth in Section 2.2, and the minimum purchase or maximum supply
obligations set forth in Section 4.4 (a). If such laboratory finds that
the Disputed Product fails to meet the Specifications, Lilly will pay
the fees of such laboratory related to such testing and will promptly
replace the Disputed Product in accordance with the preceding
subsection (a). Both Parties hereby agree to accept and be bound by the
findings of such independent laboratory.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx hereby represents and warrants to Xxxxx that, as of the date
hereof:
6.1 ORGANIZATION AND STANDING. Lilly is a corporation duly organized,
validly existing, and in good standing under the laws of the State of
Indiana.
6.2 POWER AND AUTHORITY. Lilly has all requisite corporate power and
authority to execute, deliver, and perform this Manufacturing Agreement
and the other agreements and instruments to be executed and delivered
by it pursuant hereto and thereto and to consummate the transactions
contemplated herein and therein. The execution, delivery, and
performance of this Manufacturing Agreement by Lilly does not, and the
consummation of the transactions contemplated hereby will not, violate
any provisions of Lilly's organizational documents, bylaws, or any
Applicable Law applicable to Lilly, or any agreement, mortgage, lease,
instrument, order, judgment, or decree to which Lilly is a party or by
which Lilly is bound.
6.3 CORPORATE ACTION; BINDING EFFECT. Lilly has duly and properly taken all
action required by law, its organizational documents, or otherwise, to
authorize the execution, delivery, and performance of this
Manufacturing Agreement and the other instruments to be executed and
delivered by it pursuant hereto and thereto and the consummation of the
transactions contemplated hereby and thereby. This Manufacturing
Agreement has been duly executed and delivered by Lilly and
constitutes, and the other instruments contemplated hereby when duly
executed and delivered by Lilly will constitute legal, valid, and
binding obligations of Lilly enforceable against it in accordance with
its respective terms, except as enforcement may be affected by
bankruptcy, insolvency, or other similar laws.
15
6.4 GOVERNMENTAL APPROVAL. Except as set forth in Section 4.15 of the
Assignment Agreement, no consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any
Governmental or Regulatory Authority or any other Third Person is
required in connection with the execution, delivery and performance of
this Manufacturing Agreement, or any agreement or instrument
contemplated by this Manufacturing Agreement, by Lilly or the
performance by Lilly of its obligations contemplated hereby and
thereby.
6.5 BROKERAGE. No broker, finder or similar agent has been employed by or
on behalf of Lilly, and no Person with which Lilly has had any dealings
or communications of any kind is entitled to any brokerage commission,
finder's fee or any similar compensation, in connection with this
Manufacturing Agreement or the transactions contemplated hereby.
6.6 LITIGATION. Except as set forth in SCHEDULE 4.19 of the Assignment
Agreement, there are no pending or, to Lilly's knowledge, threatened
judicial, administrative or arbitral actions, claims, suits or
proceedings pending as of the date hereof against Lilly or its
Affiliates in the Territory which, either individually or together with
any other, will have a material adverse effect on the ability of Lilly
to perform its obligations under this Manufacturing Agreement or any
agreement or instrument contemplated hereby. Xxxxx acknowledges that
Lilly has or may have certain actions, claims, suits or proceedings
pending or threatened with respect to Prozac(R), Prozac(R) Weekly(TM)
or fluoxetine hydrochloride unrelated to the Product, and Xxxxx agrees
that Lilly will not be in breach of the representation and warranty set
forth in this Section 6.6 or this Agreement as a result of such actions
or proceedings.
6.7 PRODUCT SPECIFICATIONS. As of the date of delivery, all of the existing
Product purchased by Xxxxx pursuant to Section 2.1 above and all
Product delivered by Lilly to Xxxxx hereunder: (i) will conform to the
Specifications in effect at the time of manufacture, (ii) will have
been manufactured in accordance with cGMP in effect at the time of
manufacture, (iii) will not be adulterated or misbranded by Lilly
within the meaning of the FDCA, (iv) will not have been manufactured or
sold in violation of any Applicable Laws in any material respect, and
(v) will convey good title to such Product to Xxxxx.
6.8 NOT DEBARRED. Lilly is not debarred and has not and will not use in any
capacity the services of any Person debarred under subsections 306(a)
or (b) of the Generic Drug Enforcement Act of 1992. If at any time this
representation and warranty is no longer accurate, Lilly will
immediately notify Xxxxx of such fact.
16
6.9 APPLICABLE LAWS. Lilly will comply with all Applicable Laws relating to
its manufacture of the Product.
6.10 IMPLIED WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 6 AND
ARTICLE 4 OF THE ASSIGNMENT AGREEMENT, LILLY MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY
STATUTE OR OTHERWISE, AND LILLY SPECIFICALLY DISCLAIMS ANY AND ALL
IMPLIED OR STATUTORY WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE AND
WARRANTY OF NONINFRINGEMENT.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF XXXXX
Xxxxx represents and warrants to Lilly that, as of the date hereof:
7.1 ORGANIZATION AND STANDING. Xxxxx is a company duly organized, validly
existing, and in good standing under the laws of the Republic of
Ireland.
7.2 POWER AND AUTHORITY. Xxxxx has all requisite corporate power and
authority to execute, deliver, and perform this Manufacturing Agreement
and the other agreements and instruments to be executed and delivered
by it pursuant hereto and thereto and to consummate the transactions
contemplated herein and therein. The execution, delivery, and
performance of this Manufacturing Agreement by Xxxxx does not, and the
consummation of the transactions contemplated hereby will not, violate
any provisions of Galen's organizational documents, bylaws, or any
Applicable Law applicable to Xxxxx, or any agreement, mortgage, lease,
instrument, order, judgment, or decree to which Xxxxx is a party or by
which Xxxxx is bound.
7.3 CORPORATE ACTION; BINDING EFFECT. Xxxxx has duly and properly taken all
action required by law, its organizational documents, or otherwise, to
authorize the execution, delivery, and performance of this
Manufacturing Agreement and the other instruments to be executed and
delivered by it pursuant hereto and thereto and the consummation of the
transactions contemplated hereby and thereby. This Manufacturing
Agreement has been duly executed and delivered by Xxxxx and
constitutes, and the other instruments contemplated hereby when duly
executed and delivered by Xxxxx will constitute legal,
17
valid, and binding obligations of Xxxxx enforceable against it in
accordance with its respective terms, except as enforcement may be
affected by bankruptcy, insolvency, or other similar laws.
7.4 GOVERNMENTAL APPROVAL. Except as set forth in Section 5.4 of the
Assignment Agreement, no consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any
Governmental or Regulatory Authority or any other Third Person is
required in connection with the execution, delivery and performance of
this Manufacturing Agreement, or any agreement or instrument
contemplated by this Manufacturing Agreement, by Xxxxx or the
performance by Xxxxx of its obligations contemplated hereby and
thereby.
7.5 BROKERAGE. No broker, finder or similar agent has been employed by or
on behalf of Xxxxx, and no Person with which Xxxxx has had any dealings
or communications of any kind is entitled to any brokerage commission,
finder's fee or any similar compensation, in connection with this
Manufacturing Agreement or the transactions contemplated hereby.
7.6 LITIGATION. There are no pending or, to Galen's knowledge as of the
Effective Date, threatened judicial, administrative or arbitral
actions, claims, suits or proceedings pending as of the date hereof
against Xxxxx which, either individually or together with any other,
will have a material adverse effect on the ability of Xxxxx to perform
its obligations under this Manufacturing Agreement or any agreement or
instrument contemplated hereby.
7.7 NOT DEBARRED. Xxxxx is not debarred and has not and will not use in any
capacity the services of any Person debarred under subsections 306(a)
or (b) of the Generic Drug Enforcement Act of 1992. If at any time this
representation and warranty is no longer accurate, Xxxxx will
immediately notify Lilly of such fact.
7.8 APPLICABLE LAWS. Xxxxx will comply with Applicable Laws relating to its
distributing, marketing, promoting and selling of the Product.
ARTICLE 8
TERM OF MANUFACTURING AGREEMENT; TERMINATION
8.1 TERM OF MANUFACTURING AGREEMENT. Unless sooner terminated in accordance
with this Article 8 or any other provision of this Manufacturing
Agreement, this Manufacturing Agreement will take effect and commence
on the Closing Date and continue in effect for
18
a term that will expire on the last day of the third Contract Year. No
suspension of this Manufacturing Agreement will extend the term of this
Manufacturing Agreement.
8.2 PROCEDURES FOR SUSPENSION OR TERMINATION. A suspension of a Party's
obligations under this Manufacturing Agreement pursuant to Section
8.3(b) or a termination of this Manufacturing Agreement pursuant to
Sections 3.2(d) and 8.3(a) or (c) shall not be effective unless the
suspending or terminating Party complies with the following procedures:
(a) The suspending or terminating Party will give the
other Party prior written notice thereof, specifying in reasonable
detail the alleged material breach or material default, and if such
alleged material breach or material default continues unremedied for a
period of thirty (30) days with respect to monetary breaches or
defaults or ninety (90) days with respect to non-monetary breaches or
defaults after the date of receipt of the notification or, if the
non-monetary material breach or material default reasonably cannot be
corrected or remedied within ninety (90) days, then if (i) the
defaulting Party has not commenced remedying said material breach or
material default within said ninety (90) days and is diligently
pursuing completion of same, or (ii) said material breach or material
default has not been corrected or remedied within one-hundred twenty
(120) days, then such suspending or terminating Party may immediately
suspend its obligations under this Manufacturing Agreement pursuant to
Section 8.3(b) or terminate this Agreement pursuant to Sections 3.2(d)
and 8.3(a) or (c) by again providing written notification to the
defaulting Party and such suspension or termination shall be effective
as of the date that such notice was delivered to the other Party;
provided that in the case of a termination of this Agreement by Lilly
pursuant to Section 3.2(d), the effective date of any such or
termination shall be in accordance with Section 3.2(d). This Section
8.2(a) will not be exclusive and will not be in lieu of any other
remedies available to a Party hereto for any breach or default
hereunder on the part of the other Party.
8.3 TERMINATION OR SUSPENSION FOLLOWING THE CLOSING DATE. Following the
Closing Date, this Manufacturing Agreement may not be suspended or
terminated by either Party, except as follows:
(a) Either Party may immediately terminate this
Manufacturing Agreement by providing written notice to the other Party
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 an
involuntary petition
19
for relief under the United States Bankruptcy Code is filed in a court
of competent jurisdiction against the other Party which is not
dismissed within thirty (30) days of its filing, or the other Party
makes or executes any assignment for the benefit of creditors.
(b) Lilly may suspend its obligations under this
Manufacturing Agreement in the event of a material breach or material
default by Xxxxx of Galen's obligations to make any payments to Lilly
under the Assignment Agreement or this Manufacturing Agreement;
provided that if Xxxxx cures such material breach or material default
within the cure period provided in Section 8.2(a), then Lilly will be
obligated to continue to perform thereafter its obligations under this
Manufacturing Agreement.
(c) Lilly may terminate this Manufacturing Agreement in
the event that Xxxxx fails to receive approval from the FDA of its
Application for Marketing Authorization for the Product by the third
anniversary of the Closing Date. If Xxxxx fails to receive an
approvable letter before the third anniversary of the Closing Date, the
cure period provided in Section 8.2 shall not apply.
8.4 TERMINATION PRIOR TO CLOSING. In addition to each Party's rights to
terminate pursuant to Section 8.3, a Party may terminate this
Manufacturing Agreement prior to the Closing Date immediately upon any
termination of the Assignment Agreement by such Party pursuant to the
terms thereof.
8.5 EFFECT OF TERMINATION. Upon termination of this Manufacturing Agreement
for any reason (whether due to breach of either Party or otherwise),
Lilly will furnish to Xxxxx a complete inventory of all work in
progress for the manufacture of the Product and an inventory of all
finished Product. Unless otherwise agreed to between the Parties, all
stock on hand as of the effective date of termination of this
Manufacturing Agreement will be dealt with promptly as follows:
(a) Product manufactured and packaged pursuant to
purchase orders from Xxxxx and accepted by Lilly will be delivered by
Lilly to Xxxxx, whereupon Xxxxx will pay Lilly therefor in accordance
with the terms hereof if such payment is otherwise required under
Section 3.2 or 4.3.
(b) Work in progress commenced by Lilly against accepted
purchase orders from Xxxxx or work in progress or finished Product
commenced or finished in reliance on the quantity of Product forecasted
for the current Calendar Quarter in the Forecast delivered to Lilly on
or before the first day of the previous Calendar Quarter will be
20
completed by Lilly and delivered to Xxxxx, whereupon Xxxxx will pay
Lilly therefor in accordance with the terms hereof if such payment is
otherwise required under Section 3.2 or 4.3; and
(c) Xxxxx will reimburse Lilly for Lilly's actual cost of
raw materials (including packaging components) dedicated for use but
not used in the manufacture of Additional Quantities of Product and raw
materials dedicated for use but not used for Product that was purchased
as a result of modifications to the Specifications causing an increase
in manufacturing costs, but only if such modifications are
modifications for which Xxxxx is obligated to pay under Section 3.2(a).
At Galen's option and expense, Lilly will deliver to Xxxxx any raw
materials paid for by Xxxxx under this provision (other than materials
with Lilly's name or any variation thereof appearing on them), FOB
point of shipment.
Payment for all Additional Quantities of Product (if required)
and increases in manufacturing costs as a result of a modification to
the Specifications which Xxxxx is obligated to pay pursuant to Section
3.2 will be deemed payable upon receipt of an invoice, with such
payments being made in United States currency and by Federal Reserve
wire transfer to an account designated by Lilly.
8.6 CONTINUING OBLIGATIONS. Termination of this Manufacturing Agreement for
any reason will not relieve the Parties of any obligation accruing
prior thereto (including the obligation to pay invoiced amounts even
though not yet due) or any antecedent breach of the provisions of this
Manufacturing Agreement, and will be without prejudice to the rights
and remedies of either Party with respect to any antecedent breach of
the provisions of this Manufacturing Agreement. Without limiting the
generality of the foregoing and in addition to the foregoing, no
termination of this Manufacturing Agreement, whether by lapse of time
or otherwise, will serve to terminate the rights and obligations of the
Parties hereto under Articles 1, 6, 7, 8 (including Section 8.1), 9,
10, 11 and 12 hereof and Section 3.4, hereof, rights and obligations
which otherwise expressly survive the termination of this Agreement and
Sections which are necessary to give effect to rights and obligations
which expressly survive the expiration or terminate of this Agreement.
8.7 NON-EXCLUSIVE REMEDIES. The remedies set forth in this Section 8 or
elsewhere in this Manufacturing Agreement will be in addition to, and
will not be to the exclusion of, any other remedies available to the
Parties at law, in equity or under this Manufacturing Agreement.
21
8.8 EMERGENCY SUPPLY. Subject to the conditions set forth in this Section
8.8, Xxxxx may elect, by written notice provided to Lilly on or before
April 1, 2005, to have Lilly extend the term of this Manufacturing
Agreement for an additional twelve (12) month period beyond the
expiration date set forth in Section 8.1, above. If Xxxxx exercises
this election, the terms and conditions of this Manufacturing Agreement
shall remain in full force and effect for an additional four Contract
Quarters beyond the expiration date set forth in Section 8.1, above;
provided, however, that (i) Lilly will not be required to supply Xxxxx
with more than one thousand (1,000) kilograms of Product and (ii)
purchase orders must be in whole lot quantities.
Xxxxx will have the right to exercise the election set forth
in this Section 8.8 if, and only if, (i) this Manufacturing Agreement
has not been (or will not be during the extension term) terminated by
Lilly pursuant to Sections 8.3 or 8.4 above, (ii) Xxxxx has used its
commercially reasonable efforts to either manufacture for itself or
find a Third Person manufacturer to assume manufacturing responsibility
for Product and the active pharmaceutical ingredient contained therein
as of the expiration date set forth in Section 8.1, above, and (iii)
Xxxxx pays to Lilly within five (5) days of Galen's delivery of its
election to extend the Manufacturing Agreement pursuant to this Section
8.8 Six Million Dollars ($6,000,000) ("Emergency Supply Election
Payment") by Federal Reserve electronic wire transfer in immediate
available funds to an account designated by Lilly. Lilly shall invoice
Xxxxx for Product supplied pursuant to this Section 8.8 upon delivery
and Xxxxx shall pay such invoice within 30 days of receipt of such
invoice. The invoice amount for Product ordered by Xxxxx in accordance
with this Section 8.8, shall be determined by the Parties, through good
faith negotiations, and shall be based on the then comparable price of
fully finished fluoxetine hydrochloride packaged for commercial sale in
comparable packaging that can be obtained from a Third Person (the
"Market Price"). Notwithstanding anything in this Manufacturing
Agreement to the contrary, in the event Xxxxx elects to extend this
Manufacturing Agreement under this Section 8.8, Xxxxx will deliver to
Lilly up to two purchase orders for all Product to be ordered pursuant
to this Section 8.8 before the end of the expiration date set forth in
Section 8.1, above, for the total quantity to be delivered by Lilly for
each Contract Quarter during such extension period. Notwithstanding
anything in this Manufacturing Agreement to the contrary, Lilly will
deliver the quantity specified for each Contract Quarter prior to the
end of such Contract Quarter; provided, however, Lilly will not be
obligated to deliver more than 300 kilograms of Product in any Contract
Quarter during such extension period, and Lilly may deliver to Xxxxx
Product required to be delivered in a Contract Quarter in advance of
such Contract Quarter.
22
Notwithstanding anything in this Agreement to the contrary,
Lilly will not be in breach of any of its obligations under this
Section 8.8 so long as it exercises commercially reasonable efforts to
perform such obligations; provided, however, that if Xxxxx exercises
this election and Lilly fails to supply the full amount of Product
ordered by Xxxxx in accordance with this Section 8.8, then Lilly shall
refund Xxxxx an amount equal to the difference between (i) the
Emergency Supply Election Payment and (ii) the product of the Emergency
Supply Election Payment multiplied by a fraction, the numerator of
which is the amount in kilograms of Product supplied to Lilly under
this Section 8.8 and the denominator of which is the amount of supply
ordered by Xxxxx under this Section 8.8.
8.9 MITIGATION OF DAMAGES. In the event of any breach of this Manufacturing
Agreement by Xxxxx or Lilly, the other Party shall take reasonable
actions to mitigate its damages.
ARTICLE 9
CONFIDENTIALITY
Confidentiality, nondisclosure and nonuse of information will be
provided under and pursuant to, and in accordance with the terms of, Article 8
of the Assignment Agreement, which terms of such Article 8 are by this reference
incorporated herein and made a part of this Manufacturing Agreement, and all of
which for purposes of this Manufacturing Agreement will survive any termination
or expiration of the Assignment Agreement.
ARTICLE 10
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
10.1 COMPLIANCE WITH LAW. Lilly will comply with all Applicable Laws
relating to its manufacturing of the Product. Xxxxx will comply with
all Applicable Laws relating to its developing, making, having made,
distributing, marketing, co-marketing, promoting, co-promoting, selling
and having sold the Product, including without limitation all privacy
laws. Xxxxx further agrees to procure all third person consents which
are necessary under Applicable Laws (including the consents from the
subjects of clinical trials necessary to provide access to information
to Lilly or a Third Person). Lilly and Xxxxx each will keep all records
and reports required to be kept by Applicable Laws, and each will make
its facilities available at reasonable times during regular business
hours for inspection by representatives of governmental agencies. Lilly
and Xxxxx each will notify the other, and Xxxxx will notify Indevus,
within twenty-four (24) hours of receipt of any notice or any
23
other indication whatsoever of any FDA or other governmental agency
inspection, investigation or other inquiry, or other notice or
communication of any type from a governmental agency, directly related
to the manufacturing, distributing, selling, marketing, promoting,
co-promoting and co-marketing of the Product in the Territory, and will
cooperate with each other and Indevus during any such inspection,
investigation or other inquiry.
Except as otherwise set forth in this Section 10.1, to the extent such
inspection, investigation or other inquiry concerns the Product and
materially affects the activities of Xxxxx with respect to the Product,
each Party will allow upon reasonable request a representative of the
other Party to be present during the applicable portions of any such
inspection, investigation or other inquiry and will provide copies of
all relevant documents to the other Party. A Party must approve in
advance any representative of the other Party which will be present in
such Party's facilities, such approval not to be unreasonably withheld.
Each Party will discuss any response to observations or notifications
received in connection with any such inspection, investigation or other
inquiry and will give the other Party an opportunity to comment upon
any proposed response before it is made. In the event of disagreement
concerning the form or content of such response, however, Lilly will be
responsible for deciding the appropriate form and content of any
response. Notwithstanding anything in this Section 10.1 to the
contrary, while Product is being manufactured under the sNDAs, Xxxxx
will not have the right to have a representative present during any
inspection, investigation or other inquiry of Lilly or the opportunity
to comment upon any proposed response by Lilly with respect to such
inspection, investigation or other inquiry of Lilly except that Xxxxx
may comment upon a proposed response by Lilly to the extent the
inspection, investigation or other inquiry materially affects the
Product.
10.2 RECALL. Lilly and Xxxxx will each maintain such traceability records as
may be necessary to permit a recall or field correction of the Product.
If either Party determines a recall may be necessary, then such Party
will notify the other Party within twenty-four (24) hours in writing
and by telephone. The decision to conduct and the right to control a
recall will be solely that of Lilly, after consultation with Xxxxx,
with respect to Product sold under the sNDAs, and will be solely that
of Xxxxx, after consultation with Lilly, with respect to Product sold
under the Application for Marketing Authorization for the Product. Both
Parties will cooperate fully with one another in connection with any
recall. If Product distributed prior to the Closing Date is recalled,
then Lilly will bear all costs associated with such recall. If any
recall of Product distributed on or after the Closing
24
Date is due to Lilly Error, Lilly will provide to Xxxxx replacement
Product for all recalled Product at no cost to Xxxxx and will reimburse
Xxxxx for all of Galen's other reasonable direct costs and expenses
actually incurred by Xxxxx in connection with the recall including, but
not limited to, direct costs of retrieving Product already delivered to
customers and direct costs and expenses Xxxxx is required to pay for
notification, shipping and handling charges. Notwithstanding anything
in this Agreement to the contrary, (a) prior to any reimbursement by
Lilly hereunder, Xxxxx will provide Lilly with detailed supporting
documentation of all costs and expenses for which reimbursement is
being sought, and (b) in no event will the direct costs and expenses
payable by Lilly pursuant to this Section 10.2 include Galen's lost
profits associated with such Product. If a recall of Product
distributed after the Closing Date is due to anything other than Lilly
Error, Xxxxx will remain responsible for the purchase price(s) for such
Product and will reimburse Lilly for all of the reasonable direct costs
and expenses described above actually incurred by Lilly (if any) in
connection with such recall including, but not limited to,
administration of the recall and such other reasonable direct costs as
may be reasonably related to the recall. Notwithstanding anything in
this Agreement to the contrary, (X) prior to any reimbursement by Xxxxx
hereunder, Lilly will provide Xxxxx with detailed supporting
documentation of all costs and expenses for which reimbursement is
being sought and (Y) in no event will the direct costs and expenses
described above, include Lilly's lost profits associated with such
Product.
10.3 EXPENSES. Lilly and Xxxxx will each bear their own direct and indirect
expenses incurred in connection with the negotiation and preparation of
this Manufacturing Agreement and, except as set forth in this
Manufacturing Agreement, the performance of the obligations
contemplated hereby.
10.4 REASONABLE EFFORTS. Lilly and Xxxxx each hereby agrees to use all
reasonable efforts to take, or cause to be taken, all actions and to
do, or cause to be done, all things reasonably necessary or proper to
make effective the transactions contemplated by this Manufacturing
Agreement, including such actions as may be reasonably necessary to
obtain approvals and consents of any Governmental or Regulatory
Authority and other Persons (including, without limitation, all
applicable drug listing and notifications to the FDA identifying Xxxxx
as a distributor of the Product); provided, however, that no Party will
be required to (i) pay money (other than as expressly required pursuant
to this Manufacturing Agreement or as implicitly required in order for
a Party to carry out its obligations hereunder), or (ii) assume any
other material obligation not otherwise required to be assumed by this
Manufacturing Agreement.
25
In addition, Xxxxx hereby agrees to use all reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all
things necessary or proper to begin manufacturing Product as of the
expiration of this Manufacturing Agreement including such actions as
may be reasonably necessary to obtain approvals and consents of any
Governmental or Regulatory Authority and other Persons (including,
without limitation, all applicable drug listing and notifications to
the FDA identifying Xxxxx as a manufacturer of the Product).
10.5 COOPERATION.
(a) Cooperation with Third Persons. If either Party becomes
engaged in or participates in any investigation, claim, litigation or
other proceeding with any Third Person, including the FDA, relating in
any way to the manufacturing, selling, marketing, promoting,
co-marketing or co-promoting the Product in the Territory, the other
Party will cooperate in all reasonable respects with such Party in
connection therewith, including using its reasonable efforts to make
available to the other such employees who may be helpful with respect
to such investigation, claim, litigation or other proceeding; provided
that, except as otherwise provided in this Manufacturing Agreement, the
Assignment Agreement or unless more assistance is required by
Applicable Laws, for purposes of this provision, reasonable efforts to
make available any employee will be deemed to mean providing a Party
with reasonable access to any such employee at no cost for a period of
time not to exceed twenty-four (24) hours (e.g., three (3) eight (8)
-hour business days). Thereafter, any such employee will be made
available for such time and upon such terms and conditions (including
compensation) as the Parties may mutually agree.
(b) Cooperation with Third Person Manufacturer. If Lilly enters
into an arrangement with a Third Person to manufacture Product for
Xxxxx in accordance herewith, or if Lilly elects to transfer any
portion of the manufacture of Product from one Lilly facility to
another Lilly facility, then Xxxxx will cooperate in all reasonable
respects with Lilly and such Third Person, if applicable, in obtaining
any required FDA approvals. Lilly will reimburse Xxxxx for any
reasonable direct costs incurred by Xxxxx in providing such assistance.
26
10.6 CONFLICTING RIGHTS. Neither Party will grant any right to any Third
Person which would violate the terms of or conflict with the rights
granted by such Party to the other Party pursuant to this Manufacturing
Agreement.
10.7 DEEMED BREACH OF COVENANT. Neither Lilly nor Xxxxx will be deemed to be
in breach of this Manufacturing Agreement if such Party's deemed breach
is the result of any action or inaction on the part of the other Party.
ARTICLE 11
INDEMNIFICATION; INSURANCE
11.1 INDEMNIFICATION AND INSURANCE. Indemnification and insurance coverage
will be provided under and pursuant to and in accordance with the terms
of Article 11 of the Assignment Agreement, which terms of such Article
11 are by this reference incorporated in and made a part of this
Manufacturing Agreement, and all of which for purposes of this
Manufacturing Agreement will survive any termination or expiration of
the Assignment Agreement.
11.2 LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO
THE CONTRARY, EXCEPT FOR THE COSTS AND EXPENSES OF RECALL ENUMERATED IN
SECTION 10.2 OF THIS MANUFACTURING AGREEMENT (OTHER THAN LOST PROFITS)
TO THE EXTENT SUCH COSTS AND EXPENSES CONSTITUTE INDIRECT, SPECIAL,
INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, IN NO EVENT WILL EITHER
PARTY BE LIABLE FOR INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL
(INCLUDING LOST PROFITS) OR PUNITIVE DAMAGES, HOWEVER CAUSED OR UPON
ANY THEORY OF LIABILITY (INCLUDING A PARTY'S OR ITS AFFILIATES' OWN
NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT (OR THE NEGLIGENCE,
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY'S OR A PARTY'S
AFFILIATES' EMPLOYEES, AGENTS OR CONTRACTORS)).
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 SUCCESSORS AND ASSIGNS. This Manufacturing Agreement will be binding
upon and will inure to the benefit of the Parties hereto and their
respective successors and assigns;
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provided, however, that neither Lilly nor Xxxxx may assign this
Manufacturing Agreement or any portion thereof without the prior
written consent of the other, which consent may not be unreasonably
withheld or delayed, except that no prior written consent will be
required if a Party assigns any or all of its rights hereunder to one
of its Affiliates. No assignment of this Manufacturing Agreement or of
any rights hereunder will relieve the assigning Party from being
primarily liable for any of the obligations or liabilities hereunder it
would have had if it had not assigned the Agreement. Each reference to
Lilly herein shall include its assignees and each reference to Xxxxx
shall include its assignees.
12.2 SUBCONTRACTING. Xxxxx may not subcontract any or all of its rights or
obligations under this Manufacturing Agreement to any subcontractor or
consultant without prior written consent of Lilly, which shall not
unreasonably be withheld; provided, however, that Xxxxx may subcontract
any or all of its rights or obligations under this Manufacturing
Agreement without the consent of Lilly, to the extent Xxxxx could
assign such rights or delegate such duties under Section 12.1. Lilly
may subcontract any or all of its rights or obligations under this
Manufacturing Agreement to any subcontractor or consultant without the
consent of Xxxxx. Subject to the preceding two sentences, the
subcontracting Party will be fully responsible to the other Party for
any portion of the services performed by the subcontractor or
consultant to the same extent as if such portion of the services was
performed directly by the subcontracting Party.
12.3 NOTICES. Unless otherwise stated in this Manufacturing Agreement as to
the method of delivery, all notices or other communications required or
permitted to be given hereunder will be in writing and will be deemed
to have been duly given if delivered by hand, same-day courier,
facsimile or if mailed first class, postage prepaid, by registered or
certified mail, return receipt requested (such notices will be deemed
to have been given on the date delivered in the case of hand delivery
or delivery by same-day courier, on the date set forth in the
confirmation sheet in the case of facsimile delivery, and on the fifth
business day following the date of post xxxx in the case of delivery by
mail) as follows:
If to Lilly, as follows:
Xxx Xxxxx and Company
Lilly Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
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Attn: President, U.S. Affiliate
With a copy to:
Xxx Xxxxx and Company
Lilly Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attn: General Counsel
If to Xxxxx, as follows:
Xxxxx (Chemicals) Limited
0 Xxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xx. Xxxxxx
Xxxxxxx
Facsimile:
Attention: Supply Management
With a copy to:
XXXXX HOLDINGS PLC
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attn: Senior Vice President, Corporate Development,
General Counsel and Corporate Secretary
or in any case to such other address or addresses as hereafter will be
furnished in a written notice as provided in this Section 12.3 by any
Party hereto to the other Party.
12.4 WAIVER. Any term or provision of this Manufacturing Agreement may be
waived at any time by the Party entitled to the benefit thereof only by
a written instrument executed by such Party. Except as otherwise
provided in Section 3.2(d) no delay on the part of Lilly or Xxxxx in
exercising any right, power or privilege hereunder will operate as a
waiver thereof, nor will any waiver on the part of either Lilly or
Xxxxx of any right, power or privilege hereunder operate as a waiver of
any other right, power or privilege hereunder nor will any single or
partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.
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12.5 ENTIRE AGREEMENT. This Manufacturing Agreement, the Assignment
Agreement, the Litigation Agreement, the Legal Representation
Agreement, each of their appendices, exhibits, schedules and
certificates, and all documents and certificates delivered or
contemplated in connection herewith and therewith constitute the entire
agreement between the Parties with respect to the subject matter hereof
and supersede all prior agreements or understandings of the Parties
relating thereto.
12.6 AMENDMENT. This Manufacturing Agreement may be modified or amended only
by written agreement of the Parties hereto signed by authorized
representatives of the Parties.
12.7 COUNTERPARTS. This Manufacturing Agreement may be executed in any
number of counterparts, each of which will be deemed an original but
all of which together will constitute a single instrument.
12.8 GOVERNING LAW. This Manufacturing Agreement will be governed and
construed in accordance with the laws of the State of New York
excluding any choice of law rules that may direct the application of
the law of another state.
12.9 CAPTIONS. All section titles or captions contained in this
Manufacturing Agreement and in any exhibit, schedule or certificate
referred to herein or annexed to this Manufacturing Agreement are for
convenience only, will not be deemed a part of this Manufacturing
Agreement and will not affect the meaning or interpretation of this
Manufacturing Agreement.
12.10 NO THIRD PERSON RIGHTS. No provision of this Manufacturing Agreement
will be deemed or construed in any way to result in the creation of any
rights or obligations in any Person not a Party to this Manufacturing
Agreement.
12.11 CONSTRUCTION. This Manufacturing Agreement will be deemed to have been
drafted by both Lilly and Xxxxx and will not be construed against
either Party as the draftsperson hereof. Whenever this Agreement refers
to a number of days, such number shall refer to calendar days unless
business days are specified.
12.12 APPENDICES, EXHIBITS, SCHEDULES AND CERTIFICATES. Each appendix,
exhibit, schedule and certificate attached hereto is incorporated
herein by reference and made a part of this Manufacturing Agreement.
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12.13 NO JOINT VENTURE. Nothing contained herein will be deemed to create any
joint venture or partnership between the Parties hereto, and, except as
is expressly set forth herein, neither Party will have any right by
virtue of this Manufacturing Agreement to bind the other Party in any
manner whatsoever.
12.14 SEVERABILITY. If any provision of this Manufacturing Agreement is held
to be illegal, invalid, or unenforceable under present or future laws
effective while this Manufacturing Agreement remains in effect, the
legality, validity and enforceability of the remaining provisions will
not be affected thereby. In the event a part or provision of this
Manufacturing Agreement is held to be illegal, invalid or
unenforceable, the Parties agree to negotiate in good faith an
amendment of such part or provisions in a manner consistent with the
intention of the Parties.
12.15 FORCE MAJEURE. If either Party is prevented from complying, either
totally or in part, with any of the terms or provisions set forth
herein by reason of force majeure, including, by way of example and not
of limitation, fire, flood, explosion, storm, strike, lockout or other
labor dispute, riot, war, rebellion, accidents, acts of God, acts of
governmental agencies or instrumentalities, or any other similar or
dissimilar cause, in each case to the extent beyond its reasonable
control, said Party will provide written notice of same to the other
Party. Said notice will be provided within five (5) business days of
the occurrence of such event and will identify the requirements of this
Manufacturing Agreement or such of its obligations as may be affected,
and, to the extent so affected, said obligations will be suspended
during the period of such disability. If any raw materials, facility
systems or capacity is used for both the affected Product and any other
product or purposes, Lilly may allocate resources first to its and its
Affiliates' needs. The Party prevented from performing hereunder will
use commercially reasonably best efforts to remove such disability as
promptly as possible and will continue performance whenever such causes
are removed. The Party so affected will give to the other Party a good
faith estimate of the continuing effect of the force majeure condition
and the duration of the affected Party's nonperformance. If the period
of any previous actual nonperformance of a Party because of force
majeure conditions plus the anticipated future period of such Party's
nonperformance because of such conditions will exceed an aggregate of
one hundred twenty (120) days within any one year period, the other
Party may terminate this Manufacturing Agreement by prior written
notice to the nonperforming Party.
12.16 SPECIFICATIONS. As soon as is commercially reasonable after the date
hereof, Lilly shall furnish to Xxxxx a complete copy of the
Specifications.
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IN WITNESS WHEREOF, the Parties hereto have executed this Manufacturing
Agreement as of the date first above written.
XXX LILLY AND COMPANY
By: _________________________________
Printed Name: _______________________
Title: ______________________________
XXXXX (CHEMICALS) LIMITED
By: __________________________________
Printed Name: ________________________
Title: _______________________________
