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EXHIBIT 10.21
SUPPLY AGREEMENT
THIS PRODUCT SUPPLY AGREEMENT (the "Agreement") is made this 16th day
of July, 1996, by and between SmithKline Xxxxxxx Corporation, a corporation
organized under the laws of Pennsylvania ("SB") with principal offices at Xxx
Xxxxxxxx Xxxxx, Xxxxx, XX, and King Pharmaceuticals Inc. ("SELLER"), having a
place of business at Bristol, Tennessee. SB and SELLER are from time to time
referred to as "the Parties."
WHEREAS, SB is in the business of developing, manufacturing and
marketing a variety of human health products;
WHEREAS, SB desires King to undertake the manufacture and packaging of
the human prescription pharmaceuticals BACTROBAN, Fastin, Halfan, and Menest,
and the animal health product BACTODERM, and King desires to manufacture,
package, and sell such products to SB.
NOW, THEREFORE, the parties intending to be legally bound, agree as
follows:
1. GENERAL DEFINITIONS
(a) "AFFILIATE" means (i) any corporation or business entity fifty
percent (50%) or more of the voting stock of which is and continues to be owned
directly or indirectly by any party hereto; (ii) any corporation or business
entity which directly or indirectly owns fifty percent (50%) or more of the
voting stock of any party hereto; or (iii) any corporation or business entity
under the direct or indirect control of such corporation or business entity as
described in (i) or (ii).
(b) "ACQUISITION COST" is the price for each PRODUCT as described in
Schedule A.
(c) "PRODUCT" shall mean each of the products and "PRODUCTS" shall mean
all of the products listed in Schedule A, manufactured according to the
SPECIFICATIONS.
(d) "SPECIFICATIONS" shall mean those written specifications for the
manufacture of PRODUCT attached hereto as Schedule B.
(e) "TERRITORY" shall mean the United States, its territories, and
possessions.
(f) "MENEST" shall mean any final solid oral dosage form product
containing esterified estrogen as an active ingredient.
(g) "BACTROBAN" and "BACTODERM" shall include any final finished
topical ointment product (excluding intra-nasal products) containing mupirocin
(and not mupirocin calcium) 20 mg per g (2%) as a single active ingredient.
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(h) "FASTIN" shall include any final solid oral dosage form product
containing phentermine HCl as a single active ingredient.
(i) "HALFAN" shall include any final solid oral dosage form product
containing halofantrine as a single active ingredient.
(j) "SB" shall include SB's AFFILIATES, successors, assigns, licensees,
and any other third parties with which either contracts for the sale, promotion,
or distribution of any PRODUCT.
(k) "SELLER" shall include SELLER's AFFILIATES, successors, assigns,
licensees, and any other third parties with which either contracts for the sale,
promotion, or distribution of any PRODUCT.
(l) "STANDARD COST" as referred to in Schedule A shall be defined
according to the cost analysis provided under Schedule E.
2. SUPPLY
(a) During the term of this Agreement, and subject to Sections 3 and 10
below, SELLER shall supply and SB shall purchase exclusively from SELLER all of
SB's requirements for MENEST, FASTIN and HALFAN in the TERRITORY.
(b) During the term of this Agreement, and subject to Section 10 below,
Seller shall supply and SB shall purchase twenty-two (22) lots total in any
combination of lots of BACTROBAN or BACTODERM, as specified by SB. Seller shall
promptly manufacture one lot of BACTODERM. The remaining twenty-one (21) lots
will be campaigned upon delivery of components. Provided however, no PRODUCTS
shall be manufactured by SELLER until all mupirocin necessary to manufacture all
twenty-two (22) lots of BACTROBAN and BACTODERM have been received and accepted
at SELLER's facilities in Bristol, Tennessee.
(c) During the term of this Agreement, and subject to the provisions
herein set forth, SELLER shall allocate sufficient production resources and
adopt sufficient production planning procedures in order to meet SB's purchase
orders of PRODUCTS.
3. MANUFACTURE AND SUPPLY ARRANGEMENTS
(a) Simultaneously with the execution of this Agreement and then no
later than November 1st of each year during the term of this Agreement, covering
the period from January 1st through December 31st, and then again no later than
May 1st of each year during the term of this Agreement, covering the period from
July 1st through June 30th, SB shall provide SELLER with a twelve (12) month
forecast including delivery dates, organized by months and SKU's, of SB's
estimated requirements of HALFAN, FASTIN and MENEST. The first six (6) months of
said forecasts shall be a binding order and SB shall, simultaneously with the
submission of each forecast, submit purchase orders for such binding orders.
Under no circumstances shall SELLER be required to produce greater than two
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hundred percent (200%) of the number of units forecasted for a specific month in
the initial forecast or applicable subsequent annual forecasts. After receiving
SB's twelve month forecasts, SELLER shall notify SB within ten working days in
the event the forecast unreasonably exceeds SELLER's anticipated capacity. In
any event SELLER shall use reasonable efforts to adjust its production capacity
to accommodate such forecast up to 200% of the initial or applicable subsequent
annual forecast for each PRODUCT. In the event SELLER is unable to meet SB's
forecast, SB shall have the option to purchase the excess PRODUCT not supplied
by SELLER from a third party.
(b) SELLER is not required to deliver PRODUCTS sooner than ninety (90)
days after receipt of SB's written purchase orders for the same. SELLER shall
not be required to manufacture or package PRODUCTS in quantities less than
multiplies of whole batch sizes possessing a single label. Not withstanding the
foregoing, SELLER will use reasonable effort to meet SB's request for deliveries
less than ninety (90) days
SELLER will attempt to accommodate any changes requested by SB in
delivery schedules for PRODUCTS after SELLER's receipt of SB's binding purchase
order, provided that no such changes shall result in SB purchasing less PRODUCT
than that covered in any binding purchase order. SB will bear the reasonable
out-of-pocket costs incurred by SELLER in connection with any delay in the
shipment of PRODUCT caused by SB's rescheduling of shipping dates. SELLER will
ship purchase orders immediately upon release by SELLER's QA department in a
single shipment to a single destination.
(c) The supply and purchase of BACTROBAN and BACTODERM, under this
Agreement shall commence as soon as practicable with SELLER to use best efforts
to deliver BACTROBAN and BACTODERM in the amounts and by the delivery dates
specified on the mutually agreed upon purchase orders issued simultaneously with
the execution of this Agreement.
(d) SB and SELLER shall negotiate in good faith standard operating
procedures, conforming to the responsibilities delegated between the Parties in
this Agreement, to meet regulatory and customer service standards as specified
in the Checklist (see Schedule C) from SB's contract quality manual.
(e) SB will purchase esterified estrogen, mupirocin, and halafantrine
(the "Materials") for its own account for delivery to SELLER. The expenses for
the purchase, supply and delivery of the Materials shall be borne solely by SB
and provided at no charge to SELLER. It will be the responsibility of SELLER to
manage the Materials and to be accountable for their usage. Upon request, SELLER
will furnish SB a monthly report, summarizing the usage of Materials by lot
number and showing the beginning and ending inventories of the Materials and
reconcile the usage of the Materials to within ten percent (10%+/-) of the
amounts received from SB. No more than once every calendar quarter and upon
delivery of reasonable prior written notice to SELLER, any representative
authorized by SB shall have the right to examine SELLER's records for the sole
purpose of verifying SELLER's inventory and use of the Materials directly
related to the PRODUCTS. SELLER and SB will establish a mutually agreeable
minimum yield based on the average yield for the prior 24 months (including
PRODUCT manufacturing time under prior agreements with SB). SELLER shall
reimburse SB on an annual basis for a yield of less
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than 97% of the minimum yield at a prorated schedule. Notwithstanding the
foregoing, SELLER shall have no responsibility for any loss to or of esterified
estrogen supplied by SB until MENEST is fully validated. MENEST shall not be
subject to any minimum yield ratio until it is completely validated. Further,
until MENEST is completely validated, SELLER shall be entitled to full payment
of the ACQUISITION COSTS for completed batches of MENEST even if such batches
fail to SPECIFICATIONS unless the failed batches are due to the negligence of
SELLER.
(f) Insurance. SELLER will, at its expense, insure the Materials on its
premises under an all risks policy in an amount mutually agreeable to the
parties, and SB will be named as an additional loss payee under said policy.
(g) Transfer of PRODUCTS. Upon termination of this Agreement in its
entirety or as to any PRODUCT, SELLER will provide reasonable assistance to SB
in the transfer of the Materials and manufacturing process of the PRODUCT(S) to
other facilities. Such assistance shall include, transfer of manufacturing
records, plant visits, and operator training.
(h) SB agrees to provide: (i) up to $100,000 for facilities upgrades to
improve SELLER's Menest production area (which SELLER will xxxx to SB at actual
cost as incurred); and (ii) a previously used and operating Accelecoater or
equivalent (with air handling)
(i) If SB determines that changes, alterations, or modifications to the
facilities or equipment (including the purchase of new equipment) are necessary
to manufacture or to facilitate the manufacture of any PRODUCT under this
Agreement, in accordance with either the SPECIFICATIONS or cGMP standards, then
the costs and expenses of such changes, alterations, or modifications to the
facilities or the equipment (including the purchase of new equipment) shall be
borne by SB to the extent that such costs and expenses are attributable to the
PRODUCT under this Agreement. SB shall make its determinations as to the
compliance of SELLER's facilities or equipment or SELLER's compliance with its
warranties under this Agreement in a reasonable and good faith manner.
(j) If, as the result of a specific audit, inspection, or inquiry
related to SELLER's facility, the FDA, the DEA, EPA, the Occupational Safety
and Health Administration or any federal or state governmental agency
determines that changes, alterations, or modifications to the facilities or the
equipment (including the purchase of new equipment) at SELLER's facilities are
necessary solely because of any process or procedure required by SELLER to
fulfill its obligations under this Agreement as to any PRODUCT of SB, and if
such changes, alterations, or modifications to the facilities or the equipment
(including the purchase of new equipment) total Three Hundred Thousand Dollars
($300,000) or less, then the parties shall share equally between them those
costs and charges, and provided further that if such costs total more than
Three Hundred Thousand ($300,000), then the Parties agree that either party may
elect to be excused from its requirements under this Agreement unless the other
party consents to bear the entire costs of the changes, alterations, or
modifications. An election by one party to discontinue the Agreement shall
apply only as to the requirements of that electing party with respect to the
particular Product precipitating such changes, alterations, or modifications to
the facilities or the equipment (including the purchase of new equipment).
Notwithstanding paragraphs 5(g) and 5(h) of this
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Agreement the SELLER certifies that it is not aware of any pending or current
request from any such agency which would result in any such costs under this
provision.
(k) As specified in Schedule D, SB will furnish labeling components and
bottles to SELLER for use by SELLER in providing the PRODUCTS under this
Agreement. SB will transfer those items on Schedule D to Seller at SB's actual
direct costs for these items.
4. PRICES; PAYMENT; SHIPMENT
(a) During the term of this Agreement, SELLER shall manufacture in
accordance with current Good Manufacturing Practices, including, without
limitation, those set forth in 21 C.F.R., parts 210 and 211 ("cGMPs"), and sell
PRODUCTS to SB at the prices (and which meet the SPECIFICATIONS) listed in
Schedule A. Purchase orders shall be shipped by SELLER F.O.B. SELLER's plant, in
accordance with those shipping and handling instructions specified in each
purchase order, limited to one location per purchase order. Title to PRODUCTS
and risk of loss to same shall pass to SB upon delivery to SB's designated
carrier at SELLER's plant.
(b) SB agrees to pay SELLER for PRODUCT to be provided in accordance
with Section 4(a) above net thirty (30) days from the date of invoicing. All
payments hereunder shall be made in U.S. Dollars. Invoices shall issue upon
SELLER's QA release. Delinquent invoices shall incur interest charges at the
rate of one and one-half percent (1.5%) per month until paid in full.
(c) Each shipment of PRODUCTS to SB shall be accompanied by a typed
certificate of analysis specifying that the lot of PRODUCTS conform to the
SPECIFICATIONS for same.
(d) Within fifteen (15) days of receipt of PRODUCTS by SB under this
Agreement, SB shall have the right to test and inspect the PRODUCTS and reject
any PRODUCT or component thereof which was not manufactured in accordance with
cGMPs or does not conform to the SPECIFICATIONS. In the event of such rejection,
SB shall notify SELLER in writing within 72 hours of such rejection, and SELLER
shall, at SB's option, within 30 days from its receipt of SB's rejection notice,
either credit the cost paid by SB or replace the rejected PRODUCT at SELLER's
expense or notify SB that SELLER disputes that PRODUCT failed to meet cGMPs or
the SPECIFICATIONS. In the event that SELLER disputes SB's rejection of PRODUCT,
then the parties shall submit such disputed batches of PRODUCTS and accompanying
documentation to a mutually acceptable independent laboratory for testing. The
costs and expenses of the related laboratory tests shall be borne by the party
in error. Likewise, SB shall notify SELLER of any defects not reasonably
discoverable in PRODUCT which are discovered by SB within fifteen (15) days
after detection; in case SELLER contests SB's allegations, an independent
laboratory shall make the final decision whether the PRODUCTS meet cGMPs or the
SPECIFICATIONS as provided above.
(e) Within fifteen (15) days of receipt of the Materials by SELLER
under this Agreement, SELLER shall have the right to test and inspect the
Materials and reject any of the Materials or component thereof which was not
manufactured in accordance with cGMPs or does not conform to the SPECIFICATIONS.
In the event of such rejection, SELLER shall notify SB in writing within 72
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hours of such rejection, and SB shall, within 30 days from its receipt of
SELLER's rejection notice, replace the rejected Material at SB's expense or
notify SELLER that SB disputes that the Material failed to meet cGMPs or the
SPECIFICATIONS. In the event that SB disputes SELLER's rejection of the
Materials, then the Parties shall submit such disputed batches of Materials and
accompanying documentation to a mutually acceptable independent laboratory for
testing. The costs and expenses of the related laboratory tests shall be borne
by the party in error. Likewise, SELLER shall notify SB of any defects not
reasonably discoverable in the Materials which are discovered by SELLER within
fifteen (15) days after detection; in case SB contests SELLER's allegations, an
independent laboratory shall make the final decision whether the Materials meet
cGMPs or the SPECIFICATIONS as provided above.
(f) If either party becomes aware at any time of any defect associated
with the PRODUCT or the Materials, said party shall notify the other party
immediately and confirm the notification as soon as possible in writing.
(g) Notwithstanding the effective date of this Agreement, any purchase
orders currently submitted to SELLER but not released by SELLER's Quality
Assurance department shall be invoiced to SB at the ACQUISITION COSTS shown in
Schedule A.
(h) In establishing the ACQUISITION COSTS of the PRODUCTS, the parties
have assumed, based on the recent stability in pricing, that the annual
inflation rate will not exceed four percent (4.0%). Because this assumption may
in fact prove false, the parties agree that beginning on the first anniversary
of this Agreement, and on each anniversary thereafter during the term of this
Agreement, Seller shall have the right to increase the ACQUISITION COSTS for the
forthcoming calendar year by an amount equal to the excess, if any, of the
actual rate of inflation for the twelve (12) months preceding the anniversary
date (as measured by the Consumer Price Index - Urban, ("CPI-U") published by
the U.S. Department of Labor, Bureau of Statistics) over the parties' assumed
rate of four percent (4.0%). Subject to offset for any increases permitted above
on an annual basis, SELLER shall have the right to increase the ACQUISITION
COSTS by an amount equal to the increase, if any, of the actual CPI-U which is
in excess of a 10% cumulative rate for the initial term of this Agreement.
5. REGULATORY MATTERS
(a) SELLER represents that it currently has, and shall maintain, all
regulatory and governmental permits, licenses and approvals that may be
necessary to manufacture and ship PRODUCTS to SB. Without limiting the
generality of the foregoing, SELLER shall manufacture the PRODUCTS: (i) under
conditions that are in accordance with all United States governmental regulatory
requirements concerning cGMPs; and (ii) in a facility maintaining drug
establishment registration with the U.S. Food and Drug Administration (FDA) as
set forth in 21 C.F.R., part 207.
(b) (1) During the term of this Agreement, SELLER will be responsible
for any reporting of matters regarding the PRODUCTS to the appropriate
governmental authorities in accordance with pertinent laws and regulations.
SELLER shall immediately notify SB of any such matter and shall promptly furnish
copies of such reports to SB. SELLER shall also advise SB of any
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occurrences or information which arises out of SELLER's manufacturing activities
which have or could reasonably be expected to have regulatory compliance and/or
reporting consequences.
(2) SELLER shall be responsible for handling and responding to any
appropriate governmental agency inspections with respect to PRODUCTS during the
term of this Agreement. SELLER shall provide to SB any information reasonably
requested by SB related to the PRODUCTS and all information requested by any
governmental agency in connection with any governmental inspection related to
the PRODUCTS. SELLER shall immediately advise SB of any requests by any
governmental agency for such inspections with respect to PRODUCTS and SB shall
cooperate and provide reasonable assistance as requested by SELLER.
(3) During the term of this Agreement, upon reasonable notice,
during normal business hours, and no more than once a year, SB shall have the
right to inspect and perform Quality Assurance (QA) audits of the SELLER's
manufacturing sites where PRODUCTS are manufactured pursuant to this Agreement
to assure regulatory compliance with cGMPs. SELLER has the right to accompany SB
during the QA audits. Subject to Section 3(i), if deficiencies are discovered
during these QA audits that would prevent SELLER or third party manufacturers
from passing cGMPs, or other relevant regulatory inspections, SELLER shall,
following consultation with SB, correct such deficiencies with respect to
SELLER's manufacturing sites and, with respect to third party manufacturing
facilities, use its reasonable best efforts to assure correction of such
deficiencies.
(c) SELLER will not modify or change any ingredient used in the
manufacture of the PRODUCTS or in any other way deviate from any manufacturing
or control process employed in manufacturing the PRODUCTS, or change any
manufacturing site or any supplier or vendor of any ingredient used in the
manufacture of the PRODUCTS, without first obtaining SB's prior written
approval. Should such change or deviation occur, SELLER shall immediately notify
SB of such change, giving details of the same.
(d) For all PRODUCTS, SB shall be responsible for all stability
testing. Further, SELLER shall have no obligation or responsibility to conduct,
maintain, supervise or monitor any stability program for the PRODUCTS unless the
Parties otherwise agree in a separate writing memorialized by both Parties. From
time to xxxx XXXXXX may request copies of the stability work being performed by
or on behalf of SB and SB shall promptly furnish same to SELLER.
(e) SB shall be solely responsible for all artwork and copy relating to
the final packaging and labeling of all PRODUCTS. SB shall also be solely
responsible for the compliance with all federal, state and local laws and
regulations concerning packaging and labeling, and for obtaining any necessary
regulatory approvals of printed materials, artwork, and copy.
(f) SB agrees that within one hundred and eighty (180) calendar days
from the execution by SB of this Agreement, SB will authorize and approve by a
duly authorized signatory written copies of production cards, product and
packaging specifications, batch formulations, and analytical methods. Further,
during the life of this Agreement, SB shall continue to review and execute such
documents submitted by SELLER within one hundred eighty (180) calendar days.
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(g) With respect to MENEST, SB agrees to: (i) rework promptly the
tablet physical appearance to replace the imprinting with debossing; (ii)
promptly develop and change the coating process to use of an aqueous solvent;
(iii) eliminate use of methylene chloride from the manufacturing process if
practicable; (iv) execute production cards necessary to such changes; and (v)
file all necessary supplements, applications, authorizations or other regulatory
documents as soon as practicable.
(h) SB agrees to validate the manufacturing processes for the PRODUCTS
as soon as practicable. SB and SELLER shall agree to the validation protocol.
However, if the parties cannot agree to the validation protocol, or any element
of a validation protocol for any PRODUCT, then the Parties agree to submit the
proposed protocol for a final determination to a mutually agreeable, independent
third-party consulting company of national reputation and expertise.
SELLER agrees to provide services to support the validation as
requested by SB. Further, SELLER shall have the right of first refusal as to any
and/or all services to be provided related to the validation of the PRODUCTS.
"Right of first-refusal" as used in this provision shall mean that if SB decides
to contract for any services or responsibilities related to the validation of
the PRODUCTS, then SB shall first offer the work to SELLER under the terms set
forth in subsection (i), infra, or if SB has approached another person of entity
(the "Proposed Contractor") for the work desired, then SB shall offer such work
or services to SELLER at the same price and upon the same terms and conditions
as have been offered to SB in writing by a bona fide Proposed Contractor, who is
properly licensed, insured, and capable of performing the desired work. SB shall
give SELLER a copy of the written offer from the Proposed Contractor for the
desired validation services, which copy shall identify the name and address of
the Proposed Contractor for the validation services, the proposed rates, terms,
timelines, and the conditions upon which the Proposed Contractor is able and
willing to perform. SELLER shall have sixty (60) days after receipt of such copy
of the proposed services in which to exercise its right to choose to perform
such services, and its exercise of the decision to perform such services shall
be communicated to SB by written notice within the sixty (60) day period.
(i) In consideration of SELLER providing any services or conducting any
part of the validation of products or providing other services under Section 5
of this Agreement at SB's request, SB shall pay to SELLER the sum of One Hundred
Dollars ($100.00) per hour, or any part thereof, per person performing work for
or on behalf of SB for the validation of PRODUCTS or other services hereunder.
SELLER shall invoice SB monthly for work performed by SELLER's personnel related
to the validation of PRODUCTS or other services and such invoices shall be due
within thirty (30) days of the date of the invoice. Delinquent invoices shall
incur interest at the rate of one and one-half percent (1.5%) per month until
paid.
6. TERM AND TERMINATION
(a) The initial term of this Agreement shall commence immediately upon
the execution of this Agreement by the last party to sign and shall extend
through December 31, 1999.
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(b) The initial term of the Agreement for PRODUCTS other than BACTROBAN
and BACTODERM shall be automatically extended for one (1) year periods unless
either party provides one year written notice of non-renewal prior to
expiration.
(c) Either SB or SELLER may terminate this Agreement prior to its then
current expiration date upon 45 days' prior written notice delivered by either
party to the other party in the event the other party has breached any material
provision of this Agreement and fails to remedy the breach prior to expiration
of the 45 day period.
(d) This Agreement may be canceled upon thirty (30) days' prior written
notice by either party at any time during this Agreement if, the other party
shall file in any court pursuant to any statute of any government in any country
for which PRODUCT are being supplied by SELLER for sale in such country by SB a
petition in bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver or trustee of the party or of its assets;
or if any other party proposes a written agreement of composition for extension
of its debts; or if the other party shall be served with an involuntary petition
against it, filed in any insolvency proceeding, and such petition shall not be
dismissed within 60 days after filing thereof; or if the other party shall be a
party to any dissolution or liquidation, or if the other party shall make an
assignment for the benefit of its creditors; or if the other party is subject to
any final order of debarment which can be expected to have a material adverse
effect on the sales of PRODUCTS in such country.
7. WARRANTY AND INDEMNIFICATION
(a) Except as conditioned upon SB's obligations under Section 5(h) of
this Agreement, SELLER warrants that PRODUCTS contained in each shipment shall
conform strictly to SPECIFICATIONS and shall be manufactured in accordance with
applicable cGMPs. THIS WARRANTY AND THE WARRANTIES SET FORTH IN SECTION 5 ARE IN
LIEU OF ALL OTHER WARRANTIES WITH RESPECT TO THE PRODUCTS, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, WHETHER THE PRODUCT IS USED ALONE OR IN COMBINATION
WITH OTHER SUBSTANCES.
(b) SB warrants that the Materials contained in each shipment to SELLER
shall conform strictly to SPECIFICATIONS for same and shall be manufactured in
accordance with applicable cGMPs. THIS WARRANTY AND THE WARRANTIES SET FORTH IN
SECTION 5 ARE IN LIEU OF ALL OTHER WARRANTIES WITH RESPECT TO THE MATERIALS,
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WHETHER THE MATERIALS ARE
USED ALONE OR IN COMBINATION WITH OTHER SUBSTANCES.
(c) In the event that any PRODUCTS or Materials have to be quarantined
or recalled, or are subject to a stop-sale action, whether voluntary or by
governmental action, it is agreed and understood that any expenses, including
reasonable fees of any experts or attorneys that may be utilized by either
party, government fines or penalties, related to such recall, quarantine or
stop-sale, shall be
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borne by the party determined to have been responsible for the basis upon which
said recall, quarantine or stop-sale was initiated. Said determination may be
made by the governmental agency involved, or by mutual agreement of the parties
following examination and review of all records pertinent to the manufacture of
PRODUCT or Materials subject to said recall.
(d) SB shall indemnify and hold SELLER harmless from and defend against
any and all third party claims, suits, actions or threats of action based upon,
related to or arising from a breach of any representation, warranty or covenant
in this Agreement or from omissions, negligence, or willful misconduct or any
wrongdoing of SB in connection with this Agreement. SB shall bear the cost,
including reasonable attorneys fees, arising in connection herewith. However,
the obligation of SB to indemnify SELLER shall be excluded if: (i) the losses
incurred are based on negligent acts or omissions of SELLER; and/or (ii) if
SELLER fails to promptly notify SB of the assertion of any such claims of which
SB was actually aware; and/or (iii) if SELLER recognizes or settles all or part
of any such claims without SB's prior consent, which shall not be unreasonably
conditioned, withheld or delayed.
(e) SELLER shall be liable for and shall indemnify, hold harmless and
defend SB, its directors and employees from and against, any damages or injuries
to persons or to property, including reasonable attorneys fees, arising from or
in connection with any third party claims, suits, actions or threats of action
resulting from a breach of any representation, warranty or covenant in this
Agreement or from omissions, negligence, or willful misconduct or any wrongdoing
of SELLER in connection with this Agreement, provided, however, that any such
negligence could not reasonably be determined during the incoming inspection of
goods as described in this Agreement. However, the obligation of SELLER to
indemnify SB shall be excluded to the extent that (i) the losses incurred are
based on negligent acts or omissions of SB; and/or (ii) if SB fails to promptly
notify SELLER of the assertion of any such claims to the extent that SB was
actually aware of the existence of such claims of which SELLER was actually
aware; and/or (iii) if SB recognizes or settles all or part of any such claims
without SELLER's prior consent, which shall not be unreasonably conditioned,
withheld or delayed.
(f) Competitive Products. During the term of this Agreement and one
year thereafter, SELLER warrants that it shall not produce, distribute, or sell
any PRODUCT included in this Agreement to a third party which is identical in
all respects to any of the PRODUCTS.
8. ENVIRONMENTAL
(a) SELLER shall properly dispose of any and all hazardous waste
materials directly; involved with the manufacture of PRODUCTS and in full
compliance with all applicable federal and local laws and regulations, generated
or resulting from the activities performed hereunder, if any, at SELLER's sole
liability and expense. SELLER warrants and represents that the manufacture of
PRODUCTS is currently and will in the future be in compliance with all
applicable US environmental laws and regulations.
(b) SELLER shall promptly notify SB in writing of any unauthorized
release, spill or emission of a reportable amount of hazardous materials, used
or generated from the activities performed
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hereunder; and, of any alleged environmental violation or litigation relating to
the facility for the activities performed hereunder.
9. ADVERSE REACTION REPORTS
(a) SELLER shall refer all adverse reaction reports and shall notify SB
of the name and address of each person giving such a report to SB. It is the
responsibility of SB to address any adverse reaction reports. SELLER shall
exercise all reasonable efforts to provide SB any pertinent information
regarding any claims against the manufacture of PRODUCTS as defined in this
Agreement.
(b) Should adverse reaction reports be sent to SELLER directly as the
manufacturer, SELLER will promptly notify SB by telephone or Fax and forward the
original to SB for response within 2 working days.
10. FORCE MAJEURE
If the performance of any part of this Agreement by either party of any
obligation under this Agreement is prevented, restricted, interfered with or
delayed by reason of any cause beyond the reasonable control of the party liable
to perform, the party so affected shall upon giving a written notice to the
other party be excused from such performance to the extent of such prevention,
restriction, interference or delay provided that the affected party shall use
its reasonable best efforts to avoid or remove such causes of non-performance
and shall continue performance with the utmost dispatch whenever such causes are
removed. When such circumstances arise, the parties shall discuss what, if any,
modification of the terms of this Agreement may be required in order to arrive
at an equitable solution.
11. CONFIDENTIAL INFORMATION
(a) Each party recognizes that in the performance of this Agreement
confidential and/or proprietary information belonging to other parties regarding
the PRODUCTS may be disclosed or become known to other parties ("Confidential
Information"). Unless otherwise expressed in writing to the other parties,
information, including that expressed orally, that is exchanged between or among
the parties shall be presumed to be Confidential Information. Each party agrees
to take such precautions as it normally takes with its confidential and/or
proprietary information and to hold in confidence Confidential information for a
period of two (2) years after the earlier of: (i) termination of this Agreement
in its entirety or (ii) with respect to Confidential Information about a
particular Product, the termination of SELLER's obligation to manufacture said
PRODUCT. This obligation shall not apply to:
(i) information that, at the time of disclosure, is in the
public domain;
(ii) information that, after disclosure, is published or
otherwise becomes part of the public domain through no fault of the party to
whom the information was disclosed;
(iii) information that a party can show through its records
was in its possession or the possession of an AFFILIATE at the time of
disclosure;
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(iv) information which becomes available to the receiving party
from a third party which is lawfully entitled to disclose such information; and
(v) information which is known to the receiving party prior to
disclosure or is independently developed as evidenced by such party's written
records
(b) Each party shall maintain, however, the right to disclose such
Confidential Information if required to do so by law, but shall endeavor to keep
and assist the other parties in keeping it confidential by all appropriate
means. If a party finds it necessary to disclose any such information in any
judicial or administrative hearing or proceeding, the party shall immediately
notify the other party that it finds such disclosure to be necessary and shall
attempt to disclose such Confidential Information "in camera" or subject to
"protective order or on some other non-public basis."
(c) Upon termination of this Agreement, the parties shall return each
other's Confidential Information, provided that the parties shall each be
entitled to retain one record copy in their respective legal departments to
determine the extent of their continuing obligations.
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12. GENERAL PROVISIONS
(a) Insurance
During the term of this Agreement, each party shall maintain
comprehensive general liability insurance, product liability and property damage
insurance, or self insurance, in such amounts and with such scope of coverage as
are appropriate for companies of like size taking into account the scope of
activities contemplated herein.
(b) Assignment
This Agreement shall be binding upon and inure to the benefit of the
successors in interest of the respective Parties. Neither this Agreement nor any
interest hereunder shall be assignable by either party without the prior written
consent of the other provided, however, that, without obtaining the consent of
the other party: (i) SB may assign its right and obligations hereunder (to the
extent that the same relates to any PRODUCT) to any third party to which XX
xxxxx such PRODUCT line provided that said third party expressly agrees in
writing to assume the obligations regarding such PRODUCT under this Agreement;
and (ii) either party may assign this Agreement to any AFFILIATE or to any
corporation with which it may merge or consolidate, or to which it may transfer
all or substantially all of its assets, if such AFFILIATE or other corporation
(the "Assuming Party") expressly agrees in writing to assume all obligations
under this Agreement and if such assigning party fully guarantees the
performance of all the Assuming Party's obligations under this Agreement.
Approval of all Assignments for which approval is required shall not be
unreasonably withheld.
(c) Change of Control
This Agreement shall survive any sale by SELLER or SB of all of its
assets, or any portion thereof, to which this Agreement relates. Prior to such
sale, the selling party shall fully guarantee in writing the performance of all
of its obligations and responsibilities hereunder.
(d) Waiver
The failure of any party to enforce at any time any of the provisions
of this Agreement shall in no way constitute or be construed as a waiver of that
or any other provision of this Agreement nor in any way to affect the validity
of this Agreement or any other provision hereof or the right of such party to
enforce thereafter each and every provision of this Agreement nor be deemed to
be a waiver of any other provision or breach.
(e) Governing Law
This Agreement and the relations of the parties hereunder shall be governed by
the laws of the State of Tennessee.
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(f) Arbitration
Any dispute, controversy, or claim arising out of or relating to this
contract, or the breach, termination, or invalidity thereof, which is not
settled by agreement between the parties, shall be finally settled by
arbitration held according to the commercial Arbitration Rules, in effect on the
date of this contract, of the American Arbitration Association ("AAA"), except
that in the event of any actual or threatened breach or default which could give
rise to irreparable harm, the non-defaulting party may apply to any court for
injunctive or other equitable relief, pending the outcome of the arbitration.
The arbitration shall be held in Bristol, Tennessee in accordance with
the substantive law of the state of Tennessee (without reference to Tennessee's
choice of law rules).
The arbitration panel shall consist of three arbitrators; each party
may appoint one arbitrator and a third arbitrator shall be appointed by
agreement of the two party-appointed arbitrators. In the event that the
party-appointed arbitrators cannot select the third arbitrator, then the AAA
shall appoint a third arbitrator. Judgment upon the award of such arbitrators
shall be final and binding on both parties, and any right of appeal therefore is
hereby waived. Judgment upon the award rendered may be entered in any court
having jurisdiction, or application may be made to such court for confirmation
of the award.
(g) Independent Contractor
Nothing in this Agreement shall be constructed to constitute SB or
SELLER as a partner, joint venture, agent or other representative of the other.
Each is an independent company retaining complete control over and complete
responsibility for its own operations and employees. Nothing in this Agreement
shall be construed to grant either party any right or authority to assume or
create any obligation on behalf or in the name of the other, to accept
summonses, or legal process for the other, or to bind the other in any manner
whatsoever.
(h) Obligation to Third Parties.
Each party warrants and represents that proceeding as provided herein
is not inconsistent with any contractual obligations, expressed or implied,
undertaken with any third party.
(i) Severability.
If any one or more of the provisions of this Agreement shall be held to
be invalid, illegal or unenforceable, the validity, legality or enforceability
of the remaining provisions hereof shall not in any way be affected or impaired
thereby. To the extent permitted by applicable law, each party waives any
provision of law which renders any provision hereof invalid, illegal or
unenforceable in any respect. In the event any provision of this Agreement shall
be held to be invalid, illegal or unenforceable, the parties hereto shall use
best efforts to substitute a valid, legal and enforceable provision which,
insofar as practical, implements the purposes hereof.
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(j) Entire Agreement
This Agreement, entered into as of the date written above, together
with any Appendices or Schedules hereto constitutes the entire agreement between
the Parties relating to the subject matter hereof regarding the supply of
PRODUCTS and supersedes all previous writings and understandings. No terms or
provisions of this Agreement shall be varied or modified by any prior or
subsequent statement, conduct or act of either of the Parties, except that the
Parties may amend this Agreement by written instruments specifically referring
to and executed in the same manner as this Agreement.
(k) Notices
All notices hereunder shall be addressed as follows:
if to SB:
SmithKline Xxxxxxx Corporation.
Xxx Xxxxxxxx Xxxxx
XX Xxx 0000
Xxxxx, XX 00000
ATTN: VP, Purchasing
with copies to:
SmithKline Xxxxxxx
Xxx Xxxxxxxx Xxxxx
XX Xxx 0000
Xxxxx, XX. 00000
ATTN: Legal
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if to SELLER:
King Pharmaceuticals
Attention: Xxxx X. Xxxxxxx, Chairman of the Board
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
with a copy to:
King Pharmaceuticals
Attention: Xxxx X. X. Xxxxxxx, Vice President & General Counsel
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
SMITHKLINE XXXXXXX CORPORATION KING PHARMACEUTICALS, INC.
By:/s/ D. Whiterman By:/s/ Xxxx X. Xxxxxxx
--------------------------- ----------------------------
Title: VP & Director, WSO-NA Title: President & CEO
------------------------ -------------------------
Date: July 16, 1996 Date: 7/17/96
------------------------- -------------------------
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