AMENDED AND RESTATED LICENSE AND PRODUCT SUPPLY AGREEMENT
EXHIBIT
10.19
AMENDED
AND RESTATED
THIS
AMENDED AND RESTATED LICENSE AND PRODUCT SUPPLY AGREEMENT
(“Agreement”) is
made as of the 13th day of October, 2006 (the “Effective Date”), by and between
UNIGEN
PHARMACEUTICALS, INC.,
a Delaware
corporation whose principal place of business is located at 0000 Xxxxxxxxxx
Xxxxx XX, Xxxxx, XX 00000 (“Licensor”), and SCHIFF
NUTRITION GROUP, INC.,
a Utah
corporation whose principal place of business is located at 0000 Xxxxx 0000
Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (together with its subsidiaries
“Licensee”).
WHEREAS,
Licensor is the
owner of valuable data, trade secrets, science, technology, information,
formulas, know-how, patents, trademarks and other intellectual property relating
to the design and manufacture of a proprietary patented or patent pending
blend
of ingredients, Univestin® (as more fully described in Schedule
A
hereto, the
“Compound”), which is suitable for use in the manufacture and distribution by
Licensee of dietary supplements and consumer health products which Licensee
intends to market for certain joint and musculo-skeletal health or other
purposes as set forth on Schedule
B
hereto, which
Schedule may be amended from time by mutual written agreement of the parties
(the “Purposes”);
WHEREAS,
Licensee
develops,
manufactures, markets and sells nutritional supplements and consumer health
products under various brands and through several different channels of
distribution;
WHEREAS,
Licensor has
either received registration or made application for certain trademarks (the
“Trademarks”) and certain patents (the “Patents”) (the Trademarks and the
Patents are set forth on Schedule
C
hereto and shall
hereinafter along with any data, trade secrets, science, technology, formulas,
know-how, intellectual property or other information relating to the Compound
collectively be referred to as the “Property”);
WHEREAS,
the parties
entered into a License and Product Supply Agreement dated as of May 18, 2004
regarding, among other matters, the grant of an exclusive license for the
Compound and the Property to Licensee in connection with the manufacturing,
marketing and sale of joint and musculo-skeletal health related products
containing the Compound in the food, drug and mass (including club) retail
channel in the United States, Mexico and Canada;
WHEREAS,
Licensee
desires to obtain from Licensor and Licensor desires to grant to Licensee
certain exclusive, semi-exclusive or shared rights to use the Compound and
Property in association with the offering for sale, advertising, promotion,
manufacturing, packaging, shipping, marketing, sale and distribution of certain
dietary supplement and other products which contain the Compound as an active
ingredient (collectively, the “Products”) in the food, drug and mass (including
club) or other authorized channels of trade as set forth on Schedule
B
hereto (the
“Authorized Channels of Trade”) in the United States, Mexico and Canada or the
other territories as set forth on Schedule
B
hereto (the
“Territories”) for the Purposes, as applicable; and
WHEREAS,
Licensee
further desires to purchase the Compound from Licensor and Licensor desires
to
sell the Compound to Licensee in raw material form in accordance with the
specifications most recently attached to that certain confirmed purchase
order
dated September 26, 2006 (as amended in writing from time to time by mutual
agreement of the parties, the “Specifications”). Each party agrees that its
consent to amend the Specifications will not be unreasonably withheld or
delayed.
1
NOW,
THEREFORE,
in
consideration of the mutual promises, covenants and conditions contained
herein,
the parties hereby agree as follows:
1. Grant
of
License/Rights.
Subject to the
terms and conditions of this Agreement, Licensor hereby grants to Licensee
and
Licensee accepts a license to use the Compound and Property in connection
with
the advertising, promotion, manufacturing, packaging, shipment, distribution
and
sale of the Products in the Authorized Channels of Trade in the Territories
for
the Purposes as set forth on Schedule
B
hereto. The
scope of the license (i.e. exclusive, semi-exclusive or shared) granted for
the
applicable Authorized Channels of Trade, Territories and Purposes, as
applicable, is set forth on Schedule
B
under the
heading “Scope”. The parties hereby agree that the grant of this license shall
mean that Licensee is permitted, directly or indirectly, in the applicable
Authorized Channel of Trade in the applicable Territories to manufacture,
advertise, promote, package, ship, distribute or sell the Compound, any product
containing the Compound or any product which incorporates, uses or relies
on the
Property, or any reasonable variation thereof for use for any applicable
Purpose
as set forth on Schedule
B
hereto. Licensor
understands and agrees that Licensee may outsource the manufacture of the
Products in whole or in part, and is permitted to sublicense its rights to
use
the Property to the extent required to do so.
(a) Purchase
Orders.
Licensor agrees
to sell and Licensee agrees to purchase the Compound pursuant to specific
purchase orders submitted from time to time by Licensee which shall include,
among other things, the required quantity of the Compound. No purchase order
is
binding on Licensee unless and until it is in writing and signed by Licensee's
authorized representative. Licensor shall provide written confirmation within
2
business days of receipt of the purchase order. Each purchase order shall
be
deemed to be submitted pursuant to this Agreement and subject to the terms
and
conditions therein and herein. In the event of a conflict between the terms
of
the purchase order and this Agreement, the terms of this Agreement shall
apply.
Each purchase order shall be for a minimum of twenty-five (25) kilograms
of the
Compound.
(b) Forecasts;
Minimum Lead Times.
Licensee shall
provide Licensor with a six (6) month non-binding forecast, updated once
per
quarter. Licensee shall provide Licensor with a two (2) month binding minimum
forecast; provided that Licensee may delay delivery of the Compound purchased.
Production lead time shall be at least two (2) calendar weeks prior to a
requested delivery date from the date of the confirmed purchase order, provided,
however, that Licensor shall use its best efforts to deliver the Compound
to
Licensee as soon as possible after receiving the purchase order unless otherwise
requested by Licensee. Licensee shall have the right to cancel any order
at no
charge at any time upon two (2) weeks written notice prior to the requested
delivery date.
(c) Scheduling.
Licensor will
manufacture the Compound for a particular shipment on a schedule such that
the
Compound will be finished and ready for shipment on or immediately before
the
shipping date as indicated on the purchase order. The Compound must be shipped
not later than five (5) days after production and quality testing is completed
unless otherwise requested by Licensee.
(d) Inventories.
Licensor will
source, purchase and warehouse all raw materials and maintain at all times
sufficient inventories of ingredients and supplies to meet its obligations
hereunder. Any expenditure Licensor may make based on projected future sales
to
Licensee (including any forecasts by Licensor or Licensee) are Licensor's
responsibility and at Licensor's own risk. Licensor shall not be entitled
to
reimbursement of any production costs or expenses unless specifically authorized
in writing in advance by Licensee.
2
(e) Timeliness.
Licensor shall
manufacture, ship and deliver the Compound in raw material form acceptable
to
Licensee, in a timely manner in accordance with the purchase orders submitted
by
Licensee. Licensor agrees that all Compound purchased by Licensee shall meet
the
Specifications. Licensee shall have forty-five (45) days to inspect the Compound
in order to determine that the Compound meets the Specifications. If the
Compound does not meet the Specifications, then such Compound may be rejected
by
Licensee at Licensor's expense. If Licensee fails to inspect the Compound
within
such 45-day period, then the Compound shall be deemed to be accepted. Licensor
agrees that it will notify Licensee immediately of any real or anticipated
delays that could impact the supply of the Compound or the ability of Licensor
to fulfill its obligations under this Agreement, including, but not limited
to,
component supply or labor shortages, or events which involve health, safety,
building code, or regulatory issues or violations.
(f) Licensor
Failure to Supply.
If Licensor
fails to supply the Compound in the manner and within the time frames set
forth
in this Agreement, or is unable to supply the Compound for any reason, Licensor
agrees to pay to Licensee the difference between the price Licensee would
have
charged its customer for the applicable lost or delayed sales and the product
cost of goods sold. Licensor will also pay to Licensee any penalties or other
costs incurred by Licensee in connection with such lost or delayed sale.
The
amount of Compound ordered will be counted towards satisfaction of the Annual
Minimum Purchase Requirement described in Section 9 below. In addition, Licensor
agrees that if Licensee loses a customer due in whole or in part to such
delay
or failure to supply, the parties will make good faith efforts to renegotiate
the Annual Minimum Purchase Requirement, which shall at a minimum be reduced
by
the greater of (i) the amount of sales to the lost customer during the 12
month
period (or an annualized amount if sales covered a shorter period) preceding
the
failed or delayed delivery and (ii) the amount of sales to the lost customer
contracted for the 12 month period (or an annualized amount if contracted
for a
shorter period) following the failed or delayed delivery.
To
the extent
Licensee purchases in excess of 125% of Licensee’s written forecasted purchases
(as updated in writing) for a given six-month period under 2(b) above, Licensor
shall have three weeks from the date of requested delivery to correct any
failure to supply the Compound in the manner and within the time frames set
forth in this Agreement prior to being required to pay the amounts prescribed
in
Section 2(f) above.
3. Term.
Unless sooner
terminated as provided herein, the term of this Agreement shall be for a
period
of 5 years (the “Initial Term”) commencing on the Effective Date and continuing
until the fifth anniversary thereof.
This Agreement
shall automatically be renewed for
additional
periods of one (1) year (each, a “Renewal Term” and collectively, the “Renewal
Terms”) (the Initial Term and the Renewal Term(s), if any, shall hereinafter be
collectively referred to as the “Term”) unless
Licensee
provides Licensor with written notice of its intention not to renew this
Agreement no less than one hundred eighty (180) days prior to the end of
the
existing term.
4. Permitted
Uses.
(a) Subject
to the
provisions of Section 5 hereof, the license granted in Section 1 hereof entitles
Licensee, directly or indirectly, to use the Property in connection with
the
advertising, promotion, packaging, manufacturing, shipment, distribution
and
sale of the Products in the Territories, including, without limitation,
letterhead, business cards, invoices and receipts, oral presentations, and
all
other documentation and communications to third parties relating to the sale,
promotion and advertising of the Products. No consents, approvals or
authorizations shall be required from Licensor in order for Licensee to market
the Products.
(b) Licensee
shall
cause to appear on all its Products and other materials or media described
in
Section 4(a) hereof the appropriate trademark and/or patent notification
which
shall be of such size and in such location as shall make them readily
observable, provided, however, thatLicensee,
in its
sole discretion, shall decide which trademarks, including one or more of
Licensor’s Trademarks, to use in connection with the Products.
3
5. Prohibited
Uses.
(a) Licensee
shall
use the Property only in the manner, for the approved Purposes and to the
extent
provided in this Agreement. It is understood that Licensor shall remain the
sole
owner of the Property and that neither the performance of this Agreement
nor the
use by Licensee thereof shall confer on Licensee any ownership rights thereto.
It is understood that Licensee shall remain the sole owner of its trademarks
and
the formulas for its Products and that the performance of this Agreement
shall
not confer on Licensor any ownership rights thereto.
(b) Licensee
shall
not advertise, promote, manufacture, package, ship, distribute or sell the
Products outside of the Authorized Channels of Trade or
Territories.
(c) Except
for the
licenses granted hereunder, Licensee shall not use any trademark, service
xxxx
or business name owned by Licensor whether registered or not, for any purpose
or
in any manner whatsoever without the express written consent of
Licensor.
(d) During
the Term
hereof, neither Licensor nor any of its agents, employees, representatives
or
affiliates, shall use or grant any party the right, directly or indirectly,
to
use (i) the Property, (ii) the Compound, or (iii) any property which although
not expressly subject to the Agreement, infringes the Property licensed
hereunder, in each case in any manner that conflicts with the rights granted
to
Licensee under this Agreement.
(e) Unless
the
clinical proven daily dosage for the Compound decreases or unless approved
in
advance by Licensor, Licensee shall not recommend a daily dosage of Compound
less than the amount set forth on Schedule
D
on any of its
Product labels or packaging.
(a) If
during the
Term hereof, Licensor shall develop or obtain new or derivative rights or
make
or acquire any new developments, improvements or modifications to the Property
or the Compound (the “Licensor’s Improvements”) relating to the Purposes,
Licensor shall promptly advise Licensee of any and all information concerning
the Licensor’s Improvements. The Licensor’s Improvements relating to the
Purposes shall be deemed to be included in the licenses granted herein by
Licensor to Licensee; provided, however, that the Licensor’s Improvements shall
be and remain the exclusive property of Licensor.
(b) If
during the
Term hereof, Licensee shall develop or obtain new rights or make or acquire
any
new developments, improvements or modifications relating to the Purposes
to (i)
the Property or the Compound, all of such improvements shall be owned by
Licensee; and (ii) the Products, all of such improvements shall be owned
by
Licensee. Licensee shall also own all right, title and interest in any
trademarks and copyrights developed by Licensee for use on the Products.
Licensee shall not have any ownership rights to the formula for the
Compound.
(c) Notwithstanding
anything to the contrary contained herein, Licensee may, in its sole discretion,
decide whether or not to use any of the Trademarks on any of the Products
or
whether to use another trademark.
7. Licensee’s
Obligations.
Licensee shall
ensure that the Products, and the sale thereof, materially comply with
applicable laws and regulations of the United States. Without limiting the
generality of the foregoing, it shall be the sole responsibility of Licensee
to
obtain and maintain all material licenses, permits, authorizations or product
registrations required by the applicable Territory
in
order to sell the Products in such jurisdictions (“Health Registrations”),
except for all patent and trademark search, application, registration and
maintenance requirements and fees relating to the Property or the Compound
which
shall be the sole responsibility of Licensor. Licensor shall comply with
all
reasonable requests for assistance by Licensee in connection with such Health
Registrations, including, without limitation, the furnishing of documents.
All
such Health Registrations of Products obtained by Licensee shall be in the
name
of Licensee or its designee and Licensee shall be the sole owner thereof.
If
Licensee receives any notice from any such governmental authority raising
any
issues concerning the safety, efficacy or quality of any of the Compound,
Licensee shall immediately notify Licensor in writing. Upon receipt of such
notification, Licensor shall make all efforts to cure such safety, efficacy
or
quality issue(s) as they relate to the Compound as promptly as possible.
Any
Health Registrations of the Products that are required in the Territories
shall
be at Licensee’s expense.
4
(a) At
Licensee’s
request, Licensor shall, at its sole expense, provide to Licensee any
information as to the contents of the Compound or any other information required
by any governmental authorities in any Territory. Licensor shall provide
documentation and other information reasonably requested by Licensee in support
of Licensee’s application, if any, for USP certification of the Products.
Licensee shall be solely responsible for any USP certification application,
including the information contained in such application.
(b) Licensor
shall be
responsible for the proper and lawful acquisition, maintenance, storage and
handling of the ingredients and components of the Compound and all
Compound-related inventory.
(c) Licensor
shall
manufacture or have manufactured, package, label, supply and deliver the
Compound in accordance with the highest standards of the nutritional supplement
industry and in strict compliance with (i) all applicable regulatory
requirements, and (ii) Licensee’s current “Supplier Shipping & Compliance
Guide”. Licensor shall deliver to Licensee all documentation necessary to
adequately document the safety, quality and quantity of all ingredients
contained therein and the efficacy of the Compound.
Such
documentation shall also include, without limitation, a Certificate of Analysis
which provides qualitative and quantitative confirmation of the active
ingredient content of the Compound and the accompanying laboratory results
for
each and every lot of the Compound. Licensee may rely on the content of the
Certificate of Analysis for any purposes. Failure to provide Compound of
suitable quality conforming to the Compound’s Specifications or documentation
set forth in this Section 8 in support thereof shall be grounds for rejection
of
the Compound by the Licensee and a material breach of this Agreement which,
if
not cured within sixty (60) days, shall provide Licensee with the right to
terminate this Agreement. The Property shall not infringe upon or misappropriate
the intellectual property or other rights of any third party and shall be
of
acceptable style, appearance and quality to Licensee.
(d) Licensor
shall
materially comply with applicable laws, regulations, rules and orders applicable
in the United States, including, without limitation, those of the U.S. Federal
Food and Drug Administration (the “FDA”) and those relating to the Dietary
Supplements and Health Education Act of 1994, as amended. The Compound is
guaranteed by Licensor to be not adulterated or misbranded within the meaning
of
the Federal Food, Drug and Cosmetic Act, and not an article which may not,
under
such Act, be introduced into interstate commerce. The Compound shall be
merchantable and fit for the intended use by Licensee and the purchasers
of the
Products. Licensor shall promptly notify Licensee if any audit is conducted
by
the FDA while any of the Compound is being manufactured. If the FDA pulls
a
sample of a lot of the Compound, Licensor shall immediately send a matching
sample to Licensee. Licensor shall promptly notify Licensee of any customer
orother
complaints,
governmental inquiries, quality issues or product liability issues relating
to
the Compound or any of its components.
(e) Licensor
shall
use its best efforts to (i) file all applications for Patents and Trademarks
in
the Territories where they have not already been filed; and (ii) prosecute
all
pending applications with the appropriate governmental authorities in the
Territories in order to obtain the issuance of the Patent and Trademark
registrations contemplated hereunder.
(f) Licensor
shall
use reasonable commercial efforts to promptly provide Licensee the results
of
any clinical studies relating to the Compound.
(g) Licensor
represents and warrants that it has provided to Licensee all results of each
clinical study performed on the Compound to date, and that such results have
not
been changed, summarized or altered in any way. Licensor further represents
and
warrants that, to the best of its knowledge after due inquiry, that the results
of all clinical studies provided to Licenses are complete and
accurate.
5
(a) All
of the
Property licensed to Licensee hereunder shall be on a royalty-free
basis.
(b) In
consideration
for the license granted to Licensee hereunder and in order to maintain the
exclusive or semi-exclusive rights, as applicable, to the license granted
hereunder as set forth on Schedule
B,
Licensee hereby
agrees to purchase from Licensor the quantities of Compound (“Annual Minimum
Purchase Requirement”) set forth in Schedule
E
for the years
indicated thereon.
If
Licensee fails
to meet the Annual Minimum Purchase Requirement during any year of the Term,
Licensee may, at its sole option, agree to pay a penalty fee equal to the
dollar
amount that would be required to purchase 40% of the difference between the
Annual Minimum Purchase Requirement and the amount of the Compound actually
purchased by the end of the applicable annual period (the “Penalty Fee”) with an
annual fee cap of $200,000. If Licensee elects to pay the Penalty Fee, the
Annual Minimum Purchase Requirement shall be deemed satisfied for the applicable
annual period. If Licensee fails to either meet the Annual Minimum Purchase
Requirement or pay the Penalty Fee, Licensor’s sole remedy shall be to either
(i) maintain the license granted hereunder; or (ii) terminate such license
granted hereunder and grant Licensee a non-exclusive license to use the Compound
and the Property in the applicable Territories for the applicable Authorized
Channels of Trade and Purposes; or (iii) terminate this Agreement. Licensee
shall in no event owe Licensor any monies or other compensation for Licensee’s
failure to satisfy its Annual Minimum Purchase Requirement if Licensor
determines to terminate this Agreement. If the parties cannot in good faith
agree on an Annual Minimum Purchase Requirement for Year 4, Year 5 and/or
each
year of the Renewal Term(s), then the Annual Minimum Purchase Requirement
for
each such year shall be 110% of the prior year’s Annual Minimum Purchase
Requirement.
(c) Licensor
acknowledges that in consideration for the license granted to Licensee
hereunder, Licensee paid to Licensor an exclusivity fee as described on
Schedule
F
hereto.
(a) Basic
Pricing.
The price of
the Compound shall be the price set forth on Schedule
G
hereto, which
price shall cover all costs and charges necessary to be paid by Licensee
to
Licensor hereunder. The price for the Compound includes, without limitation,
Licensor’s cost of complying with all of Licensee’s Specifications including,
but not limited to, usual packing of good quality so as to sustain (without
damages) normal motor freight transportation to the point of delivery. The
freight,crating,
packaging and all other charges are to be paid by Licensor, and these charges
shall be expressly identified to Licensee. The price covers all federal,
state
and local taxes and duties from which Licensor cannot obtain exemption. The
amounts of any such taxes or duties are the sole responsibility of Licensor
and
shall be separately shown to Licensee. Such taxes and duties shall be paid
by
Licensor when due. Licensor represents that the price Licensee pays for the
Compound is Licensor’s lowest price currently in effect for goods of similar
quantity and quality. Should any lower price, or any better terms, be quoted
by
Licensor to any of its customers for goods of similar quantity or quality,
prior
to completion of the delivery of the goods, Licensor will promptly notify
Licensee and, thereupon, such lower price or better terms will apply to this
Agreement, provided that the granting of such lower price or better terms
to
Licensee would not be in violation of any applicable law. In calculating
the
price, Licensor shall take into account all rebates, discounts, charge-backs,
promotions, credits or other favorable terms or similar arrangements. Licensor
represents and warrants that, to the best of its knowledge, the prices set
forth
herein do not and will not violate any federal, state, county or municipal
law
or regulation relative to price discrimination, price-fixing, or price
stabilization.
6
(b) Price
Adjustments.
The price set
forth on Schedule
G
hereto is not
subject to escalation of any kind or for any reason, except for modifications
or
improvements to the Compound which have been requested by Licensee.
(c) Payment
Terms;
Delivery and Acceptance of Goods.
All Compound
shall be shipped prepaid ground transportation, FOB Licensee’s designated
address in the United States. Payment terms shall be net thirty (30) days
from
the later of Licensee’s receipt of the Compound and the invoice pertaining to
such Compound. Licensee shall be entitled to a 2% discount on the price of
all
Compound for which Licensee pays within ten (10) business days of the later
of
Licensee’s receipt of the Compound and the invoice pertaining to such Compound.
Late payment is considered a violation of this agreement. All payments shall
be
made in U.S. dollars.
Unless Licensee
transports the goods with its trucks, the risk of loss or damage of the goods
shall pass to Licensee at the time goods are actually accepted at the delivery
address and the entire risk of loss or damage in transit shall be upon the
Licensor. Licensor bears the risks and all costs of ground transportation
delivery to the delivery address, including without limitation, import duties,
taxes and other charges of delivering the goods to the delivery address,
cleared
for importation. An acceptance of goods shall not be deemed to occur until
after
Licensee has had a minimum of forty-five (45) days to inspect the Compound.
Acceptance of any part of a commercial unit shall not be deemed to be an
acceptance of the entire unit.
(d) Nonconforming
Goods.
Without waiving
any other rights or remedies available at law or equity, Licensee may reject
or
revoke acceptance of goods or any portion thereof which, without limitation,
are
(i) not in conformity with Licensee’s quality control standards, (ii) defective,
(iii) otherwise not in conformity with quantities or descriptions referred
to in
this Agreement or made a part hereof, (iv) not in conformity with the
Specifications under which the goods are to be sold, (v) not in compliance
with
any mutually approved sample, or (vi) not in compliance with Licensee’s current
“Supplier Shipping & Compliance Guide” (collectively, “Nonconforming
Goods”). Licensor shall make no shipment of Nonconforming Goods, whether as an
accommodation or otherwise, unless first authorized in writing by the Licensee.
Upon rejection or revocation, Licensee, at its option, may return at Licensor’s
expense any or all of the goods or require correction or replacement at
Licensor’s expense within five business days.
(e) Inspection.
Licensee shall
have the option to inspect the goods, including materials used in the
manufacture or packaging of the goods, and records relating thereto at
reasonable times and places before, during and after the manufacture or delivery
of the goods. Licensee reserves the right to inspect any facility in which
the
goods are manufactured, packaged or stored and any raw materials, goods in
process, or finished goods. An inspection or failure to inspect shall not
relieve Licensor of any responsibility or liability with respect to the goods,
including material used in themanufacture
or
packaging of the goods, nor shall an inspection be interpreted as an acceptance
of goods by Licensee.
(f) Failure
to
discover Nonconforming Goods.
Notwithstanding
the foregoing paragraphs, Licensee’s failure to discover Nonconforming Goods or
other defects shall not relieve Licensor of its obligations under Section
17 or
any other provision of this Agreement or the applicable purchase order or
limit
any rights or remedies Licensee may have under applicable law or
equity.
7
(a) Representations
and Warranties of Licensor.
Licensor hereby
represents and warrants to Licensee that (i) Licensor is the sole owner of
the
right, title and interest in and to the Compound and the Property (ii) Licensor
is entitled to grant the licenses contemplated hereunder to Licensee, (iii)
the
Property does not constitute an infringement of any existing intellectual
property rights when used on the Products; (iv) the Compound is suitable
for the
purposes for which it will be used by Licensee; (v) the Compound as delivered
by
Licensor to Licensee will be free of defects, will be manufactured in accordance
with good manufacturing practices and conform to the description of the Compound
ordered by Licensee; (vi) the Compound as delivered by Licensor to Licensee
shall continue to be the same qualitative and quantitative formula as the
Compound tested in any clinical studies; (vii) Licensor has the full power,
capacity and right to enter into this Agreement, including, but not limited
to,
the ability and wherewithal to provide for the manufacture of the Compound
in
compliance with the quality and quantity standards contemplated by this
Agreement; (viii) Licensor has not licensed the Compound or Property or any
aspect thereof in any manner inconsistent with the licenses granted hereunder;
(ix) Licensor shall convey good, clear and unencumbered title to the Compound
supplied; (x) Licensor has not granted any rights relating to the Compound
or
the Property to any other person or entity in the Authorized Channels of
Trade
in the Territories for the Purposes for which Licensor has granted Licensee
exclusive rights; (xi) neither the execution and delivery of this Agreement
nor
compliance with the obligations of Licensor hereunder, will violate any law
or
regulation, or any order or decrees of any court or government instrumentality,
or will conflict with, or result in the breach of, or constitute a default
under, any contract, agreement, instrument or judgment to which Licensor
is a
party; and (xii) no action, approval or consent, including but not limited
to,
any action, approval or consent by any United States federal, state, municipal
or other governmental agency, commission, board, bureau or instrumentality
is
necessary in order to constitute this Agreement as a valid, binding and
enforceable obligation of Licensor in accordance with its terms.
(b) Representations
and Warranties of Licensee.
Licensee hereby
represents and warrants to Licensor that (i) it has the full power, capacity
and
right to enter into the Agreement; (ii) it knows of no pending or threatened
action in law or in equity, which adversely affects the rights granted herein;
(iii) neither the execution and delivery of this Agreement nor compliance
with
the obligations of Licensee hereunder will violate any law or regulation,
or any
order or decree of any court or governmental instrumentality, or will conflict
with, or result in breach of, or constitute a default under, any contract,
agreement instrument or judgment to which Licensee is a party; and (iv) no
action, approval or consent, including but not limited to, any action, approval
or consent by any United States federal, state, municipal or other governmental
agency, commission, board, bureau or instrumentality is necessary in order
to
constitute this Agreement as a valid, binding and enforceable obligation
of
Licensee in accordance with its terms.
12. Acknowledgment
of Ownership of the Property.
Licensee
acknowledges Licensor's right, title and interest in and to the Property
and the
goodwill associated therewith.
Licensee shall
not represent in any manner that it has any ownership right, title or interest
in the Property other than as set forth in this Agreement.
8
13. Infringement.
(a) Licensee
shall
notify Licensor in the event that Licensee learns of any actual or apparent
infringement of the Property.
(b) Licensor
shall be
required to take all necessary actions to protect the validity of the Property
at its sole expense. Such action shall include, but not be limited to, assuming
responsibility at its expense for the defense of any lawsuit challenging
or
affecting the rights to the Property, settling litigation, and/or instituting
litigation at its expense to protect its rights to the Property. Licensee
shall
comply, at Licensor’s expense, with all reasonable requests for assistance in
connection therewith, including, without limitation, the furnishing of documents
and having its officers or other persons reasonably designated by Licensor
appear as witnesses.
14. Termination.
(a) In
addition to
any other rights of termination contained in this Agreement, this Agreement
may
be terminated prior to the expiration of the Term set forth in Section 3
hereof,
by either party for the failure by the other party to perform any material
obligation hereunder, and if a failure to cure such breach shall continue
for a
period of ninety (90) days after written notice of default is sent by the
non-breaching party to the breaching party.
(b) This
Agreement
may be terminated by either party upon written notice if the other party
files
or has filed against it a petition under any bankruptcy laws, makes an
assignment for the benefit of creditors or has a receiver appointed for it
or
any of its assets.
15. Rights
of
Parties Upon Expiration or Termination.
In the event of
the expiration or termination of this Agreement, Licensee shall have the
right
for a period of twelve (12) months from the date of such termination or
expiration to continue the use of the Property and the Compound in conjunction
with the advertising and sale of Products in the Territories and allowing
for
the continued manufacture of the Products in order for Licensee to effect
an
orderly transition with its customers and to sell though its existing inventory
of Compound, Products and related packaging materials. After such twelve
(12)
month period, Licensee shall thereafter cease all use of the Property and
the
Compound. Termination or expiration of this Agreement shall not affect the
indemnification obligations hereunder or any other provisions intended by
their
nature to survive the termination or expiration of this Agreement.
16. Confidentiality.
The
Confidentiality Agreement dated July 15, 2002 by and between the Licensor
and
the Licensee (the “Confidentiality Agreement”) is and shall remain in full force
and effect. The parties acknowledge and agree that the existence of this
Agreement and the terms and conditions hereof shall constitute Confidential
Information under the Confidentiality Agreement. Licensor acknowledges that
Licensee may file this Agreement or any portion hereof with the Securities
and
Exchange Commission if Licensee in its discretion deems such to be necessary
or
advisable. Any such filing will not affect the parties’ obligations of
confidentiality with respect to Confidential Information not disclosed in
such a
filing.
(a) Licensor
agrees
to indemnify, defend and hold harmless Licensee and its officers, directors,
agents, employees and affiliates (such persons, together with their successors
and assigns, are referred to herein as “Indemnified Parties”) from and against
any claim, demand, action, proceeding or cause of action made or brought
against
Licensee or any of its Indemnified Parties by any third party, including,
without limitation, any damages, settlement payments, penalties, liabilities,
costs and expenses or any judgment rendered against or incurred by Licensee
or
any of its Indemnified Parties in any such action and reasonable attorneys'
fees
and expenses incurred byLicensee
or its
Indemnified Parties in defending any such claim brought against it or them
except as otherwise provided below ("Damages"), arising out of or resulting
from
(i) this Agreement, including a breach of this Agreement by Licensor; (ii)
product liability attributable, directly or indirectly, in whole or in part,
to
the Compound or (iii) the violation or infringement of any patent, trademark,
trade dress, copyright or other intellectual property right relating to the
Compound, the Property or other specifications or materials selected by
Licensor, provided that none of such occurrences are caused by the negligence
or
willful misconduct of Licensee.
9
(b) Licensee
agrees
to indemnify, defend and hold harmless Licensor and its Indemnified Parties
from
and against any claim, demand, action or cause of action which is made against
Licensor or any of its Indemnified Parties by any third party, including,
without limitation, any damages, settlement payments, penalties, liabilities,
costs and expenses or any judgment rendered against or incurred by Licensor
or
any of its Indemnified Parties in any such action and reasonable attorneys'
fees
and expenses incurred by Licensor or its Indemnified Parties in defending
any
such claim brought against it or them except as otherwise provided below,
to the
extent arising out of or resulting from (i) a breach of this Agreement by
Licensee, (ii) the improper, labeling (including packaging materials), promotion
or use of the Products by Licensee or its respective employees or agents
unless
such claim results from incorrect information supplied by Licensor for the
Compound or Property; or (iii) the violation or infringement of any trademark
or
trade dress rights relating to the Products (other than those owned by Licensor
and licensed to Licensee hereunder) or other specifications or materials
selected by Licensee, provided that none of such occurrences are caused by
the
negligence or willful misconduct of Licensor.
(c) Upon
the
occurrence of an event which would give rise to a right of indemnification
under
this Agreement, the party claiming the right to indemnification (the
"Indemnitee") shall give prompt written notice to the other party providing
reasonable details of the nature of the event and basis of the indemnity
claim.
The party obligated to provide the indemnification (the "Indemnitor") shall
then
have the right, at its own expense and with counsel of its choice, to defend,
contest or otherwise protect against any such suit, action, investigation,
claim
or proceeding ("Action"). If the Indemnitee reasonably determines that its
interests are not adequately represented by the Indemnitor’s counsel, Indemnitee
shall have the right to participate, at the Indemnitor’s expense, in the defense
thereof with counsel of its choice reasonably acceptable to the Indemnitor.
In
any event, the Indemnitee shall also have the right, but not the obligation,
to
participate at its own expense in the defense thereof with counsel of its
choice. The Indemnitee agrees to cooperate to the extent reasonably necessary
to
assist the Indemnitor in defending, contesting or otherwise protesting against
any such Action provided that the reasonable cost in doing so shall be paid
by
the Indemnitor. If the Indemnitor fails within fifteen (15) days after receipt
of such notice to (i) notify the Indemnitee of its intent to defend, or (ii)
defend, contest or otherwise protect against such Action, or fails to diligently
continue to provide such defense after undertaking to do so, the Indemnitee
shall have the right upon five (5) days' prior written notice to the Indemnitor,
to defend, settle and satisfy any such Action and recover the costs of the
same
from the Indemnitor. Any amounts owed by the Indemnitor to the Indemnitee
may,
at the Indemnitee’s option, be applied to offset amounts owed by the Indemnitee
to the Indemnitor pursuant to this Agreement.
(d) EACH
OF LICENSOR
AND LICENSEE ACKNOWLEDGES THAT, EXCEPT AS EXPLICITLY SET FORTH IN THIS
AGREEMENT, IN NO EVENT SHALL IT BE LIABLE FOR ANY INDIRECT, SPECIAL,
CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGE, LOSS OR EXPENSE, INCLUDING,
WITHOUT LIMITATION, DAMAGES FOR LOSS OF GOODWILL, LOSS OF PROFITS, LOSS OF
USE,
LOST TIME AND ANY AND ALL OTHER COMMERCIAL DAMAGES, EVEN IF ADVISED OF THEIR
POSSIBLE EXISTENCE. The foregoing exclusion of certain damages shall apply
regardless of the success or effectiveness of other remedies, but shall not
apply to any indemnification obligations and/or amounts owed pursuant to
Section
17(a) and (b) above.
(e) The
provisions of
this Section 17 shall survive the expiration of the Term or any other
termination of this Agreement.
10
(f) The
parties shall
each maintain in full force and effect throughout the Term general product
liability insurance with limits of not less than one million dollars
($1,000,000) per occurrence, two million dollars ($2,000,000) in the aggregate.
Licensor’s insurance shall name Licensee and its affiliates as an additional
insured, shall have broad form vendor’s coverage, and shall be placed with an
insurance company which has a most recent rating given by Best’s Key Rating
Guide of at least a “B” or above, or in such other company as Licensee may
approve. Each party agrees to promptly deliver certificates or other proof
of
said insurance to the other party. Licensor’s insurance required by this
Agreement shall be primary with respect to any other insurance available
to
Licensor and shall contain a waiver of subrogation by Licensor’s insurance
carrier against Licensee and its insurance carrier with respect to all
obligations assumed by Licensor pursuant to this Agreement. Each party will
provide a copy of any contract of insurance required under this Agreement,
upon
request from the other party.
18. Force
Majeure.
None of the
parties shall be liable for any failure to perform or delay in performance
of
its obligations hereunder (other than the obligation to pay monies due and
owing
for the shipment of Compound under this Agreement) caused by any circumstances
beyond its reasonable control occurring in any of the countries in the
applicable Territory, including, but not limited to, fire, earthquake, war,
civil commotion, any act of central or local government, industrial disputes,
lockouts and strikes, provided, however, that if the period of default continues
for more than sixty (60) days, the other party shall be entitled to terminate
this Agreement forthwith by notice in writing.
19. Further
Assurances.
The parties
shall execute such documents and consents and take such other action as may
be
necessary to register this Agreement with the appropriate governmental
authorities of the countries in the Territories.
20. Amendments.
The provisions
of this Agreement may not be amended, supplemented, waived or changed orally,
but only by a writing signed by both parties and making specific reference
to
this Agreement.
21. Waivers.
Neither
Licensor's nor Licensee's failure to enforce any of the provisions of this
Agreement shall constitute a waiver of its rights to later enforce such terms
or
conditions. Any waiver under this Agreement must be in writing signed by
the
party to be charged therewith and expressly purporting to constitute such
a
waiver. Any such waiver shall be effective only for the specific instance
and
circumstance with respect to which it is executed and delivered.
22. Notices.
All notices
under this Agreement shall be in English and shall be (a) in writing; (b)
given
by regularly scheduled express courier service, hand-delivered or facsimile
(confirmed by such airmail, express courier or hand-delivered correspondence);
and (c) addressed to the parties at the addresses set forth immediately below,
or to such other address as either party may advise the other in writing
in
accordance with the terms hereof:
if
to Licensor:
|
Unigen Pharmaceuticals, Inc.
|
0000
Xxxxxxxxxx
Xxxxx XX
Xxxxx,
Xxxxxxxxxx
00000
Attention:
Xxxxx
Xxxxx,
President
and
CEO
Facsimile:
(000)
000-0000
with
a copy
to:
Unigen
Pharmaceuticals, Inc.
0000
Xxxxxxxxxx
Xxxxx XX
Xxxxx,
Xxxxxxxxxx
00000
Attention:
Xxxxxx
X. Xxxxxxxx
Executive
Vice
President and General Counsel
Facsimile:
(000)
000-0000
if
to Licensee:
|
Schiff Nutrition Group, Inc.
|
0000
Xxxxx 0000
Xxxx
Xxxx
Xxxx Xxxx,
XX 00000
Attn:
General
Counsel
Facsimile:
(000)
000-0000
11
Notices
shall be
deemed given (i) on the scheduled delivery date, if sent by regularly scheduled
express courier service; and (ii) when transmitted, if transmitted by facsimile
and confirmed in one of the manners aforesaid.
23. Assignments
And Sub-Licenses.
Neither
Licensor nor Licensee shall assign its rights hereunder without the prior
written consent of the other party hereto, which shall not be unreasonably
withheld; provided, however, Licensee or Licensor may,
at any time,
assign this Agreement without the prior written consent of Licensor to any
affiliated company, or in the event of a change of ownership or control of
Licensee, including a sale of substantially all the assets of the Licensee.
Licensee may sublicense its rights under this Agreement to affiliates of
Licensee upon the prior written consent of Licensor, such consent not to
be
withheld or delayed unreasonably. Licensee
may
outsource the manufacture of the Products in whole or in part, and is permitted
to sublicense its rights under this Agreement to the extent required to do
so.
24. Brokers.
Each of the
parties represents and warrants that such party has dealt with no broker
or
finder in connection with any of the transactions contemplated by this
Agreement, and, insofar as such party knows, no broker or other person is
entitled to any commission or finder's fee in connection with any of these
transactions. The parties each agree to indemnify and hold harmless one another
against any loss, liability, damage, cost, claim or expense incurred by reason
of any brokerage commission or finder's fee alleged to be payable because
of any
act, omission or statement of the indemnifying party.
(a) This
Agreement
shall not be binding until it has been executed on behalf of each party by
a
duly authorized officer of each party.
(b) This
Agreement,
and any and all disputes arising out of or relating to this Agreement, or
the
subject matter, enforceability or breach thereof, shall be governed by, and
construed and interpreted in accordance with, the laws of the United States
and
the State of Washington, without application of any conflicts of laws
principles, except that the Arbitration provision in Paragraph 26(c) below,
shall be governed by the Federal Arbitration Act to the extent that it is
applicable.
(c) Any
and all
controversies, claims or disputes arising out of or relating to this Agreement,
or the subject matter, enforceability or breach thereof, shall be settled
and
determined exclusively
by final and
binding arbitration
administered by
JAMS under its Streamlined Arbitration Rules and Procedures and shall be
heard
in Seattle, Washington. The state or Federal courts of the states of Washington
and Utah shall have concurrent jurisdiction to issue preliminary injunctive
or
other equitable relief in order to enforce the terms of this Agreement. Judgment
on the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction over the parties. Each party
to this
Agreement waives any objection to personal jurisdiction of the state or Federal
courts in Seattle, Washington and Salt Lake City, Utah.
12
(d) In
no event shall
the demand for arbitration be made after the date when institution of legal
or
equitable proceedings based on such claim, dispute or other matter in question
would be barred by the applicable statutes of limitation.
26. Prevailing
Party.
The
prevailing
party in any arbitration, litigation or other proceeding arising out of or
relating to this Agreement, or the subject matter, enforceability or breach
thereof, shall be entitled to recover from the non-prevailing party its costs
and reasonable attorney’s fees, as determined by the arbitrator(s) or
court.
27. Entire
Agreement.
This Agreement,
including the Schedules hereto, the purchase orders, including the
Specifications (as defined above), submitted by Licensee to Licensor from
time
to time and the Confidentiality Agreement represent the entire understanding
and
agreement between the parties with respect to the subject matter hereof,
and
supersedes all other negotiations, understandings and representations (if
any)
made by and between such parties.
28. Headings.
Any headings
used herein are for convenience in reference only and are not a part of this
Agreement, nor shall they in any way affect the interpretation
hereof.
13
IN
WITNESS WHEREOF,
the parties
have executed this Agreement as of the date first above written.
SCHIFF
NUTRITION
GROUP, INC.,
By: /s/
Xxxxxx X. Xxxxxxxx
Name:
Xxxxxx X.
Xxxxxxxx
Title:
Executive Vice President -
Operations
and Support Services
UNIGEN
PHARMACEUTICALS, INC.,
By: /s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
President and CEO
14