LICENSE AND SUPPLY AGREEMENT
This Supply Agreement, dated as of the 31st day of March 2000, is
between VIVIER-REGISTERED TRADEMARK- PHARMA INC., a Quebec, Canada
corporation incorporated under the laws of Canada with offices at 0000
Xxxxxxxx Xxx, Xx-Xxxxxx, Xxxxxx Xxxxxx X0X 0X0 ("Vivier"), and OBAGI MEDICAL
PRODUCTS, INC., a corporation incorporated under the laws of California, with
offices at 000 Xxxxxx Xxxxx, Xxxx Xxxxx, XX 00000 ("Buyer").
WHEREAS Vivier manufactures and markets or will market various types of
dermatological products throughout North America and potentially in other
countries under its Vivier label and trademarks;
WHEREAS, Buyer wishes to purchase Vitamin-C 5%, and Vitamin-C 10% under
its OMP, Inc. label (hereinafter, the "Products") from Vivier; and
WHEREAS, Vivier is willing to supply the Products to Buyer for resale
under the Buyer's label upon the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS
(a) The following terms shall have the meanings set forth or
where indicated, below for purposes of this Agreement:
"ACT" means the Federal Food, Drug and Cosmetic Act, as amended from
time to time.
"AFFILIATE" of any person shall mean any corporation or other business
entity which, directly or indirectly, controls, is controlled by, or is under
common control with, such person. For purposes of this definition, the term
"control" (as used in the terms "controls," "controlled by," and "under common
control with") means either (a) holding fifty percent (50%)or more of the
outstanding voting securities of an issuer or (b) in the case of an entity that
has no outstanding voting securities, having the right to fifty percent (50%)or
more of the profits of the entity, or having the right in the event of
dissolution to fifty percent (50%)or more of the assets of the entity.
"BUYER INDEMNIFIED PARTIES" shall have the meaning given thereto in
Section 14.2 hereof.
"COMMENCEMENT DATE" means the date of the execution of this agreement
by the parties.
"CONTRACT YEAR" means each consecutive 12-month period commencing on
the Commencement Date and each one year anniversary thereof.
"FDA" means the United States Food and Drug Administration.
"FORMS" shall have the meaning given thereto in Section 23.3 hereof.
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"GMP" means current good manufacturing practices as defined from time
to time in Section 501(a)(2)(B) of the Act and the applicable rules and
regulations of the FDA.
"INITIAL TERM" shall have the meaning given hereto in Section 15
hereof.
"ORDER DATE" shall have the meaning given thereto in Section 5.3
hereof.
"PROCEDURES" shall have the meaning given thereto in Section 4.8
hereof.
"PRODUCTS" shall have the meaning set forth in the recitals to this
Agreement.
"Specifications" the specifications of the Products listed in
Schedule F.
"TERRITORY" means the United States in the physician-dispensed channel
of distribution; and for all channels of distribution in thecountries set forth
on Schedule E.
"TPP" means the Canadian Therapeutics Products Programme.
"Trademarks / Patents" means the trademarks / patents listed in
Schedule D and such other trademarks, trade names or identifying marks to be
used in association with the Product hereunder, which are all owned by Vivier.
"VIVIER INDEMNIFIED PARTIES" shall have the meaning given thereto in
Section 14.1 hereof.
2. PURCHASE AND SALE; LICENSE
2.1 During the term of this Agreement, and subject to the provisions
hereof, Vivier agrees to supply to Buyer, all of Buyer's requirements for the
Products. All orders for the Products shall be made pursuant to written purchase
orders delivered to Vivier in accordance with Section 4 hereof. All purchase
orders from Buyer shall be in multiples of full batch sizes commonly used in
routine production of the Products. Minimum batch sizes are set forth on
Schedule A. The parties reserve the right to negotiate modified minimum batch
sizes on mutually agreeable terms and conditions.
2.2 Vivier hereby grants to Buyer the exclusive right to market, sell,
and distribute the Products in the Territory and in the specified channels of
distribution and OMP agrees to distribute the Products under the OMP label or
such other labels owned or controlled by Buyer on an exclusive basis.
2.3 The Buyer shall not, during the term of this agreement, sell the
Products to customers in the United States other than prescribing / dispensing
physicians, knowingly sell the Products in the Territory for resale outside the
Territory, (in particular Canada) nor buy from anyone other than Vivier or
develop or manufacture itself the Products or any other product which is
substantially the same as the Products during the five (5) year contract.
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2.4 Vivier retains the right to sell the Products under its label and
trademarks in Canada and other than through the physician-dispensed channel of
distribution, in the United States. Vivier retains the right to sell the
Products under its label and trademarks in the United States through the retail
drug stores, spas, and beauty salons channel of distribution.
2.5 If Vivier fails to deliver any of the Products in the quantities
requested by Buyer within thirty (30) business days of the date of delivery as
specified in a purchase order, then Buyer shall have the right to cancel the
amount of the purchase order which is unfulfilled, and obtain the unsupplied
quantity of such equivalent Products from any other manufacturer. In such event,
Vivier shall pay to Buyer the difference between the contract price and Buyer's
actual cost of such replacement product (subject to the obligation of Buyer to
reasonably mitigate its damages). Said right shall apply only to the extent that
such purchase order is unfulfilled. A purchase order shall be deemed filled and
closed if (a) Buyer orders full minimum batch sizes and Vivier delivers the
appropriate number of full batches or (b) the quantity of Products delivered is
within ten percent (10%) of the quantity ordered. In no event shall Buyer be
required to pay for any quantities not actually delivered.
2.6 Appropriate supply lead times will be established (once final
labels and packaging are approved for printing by the Buyer) in excess of 120%
of the minimum annual purchase quantities set forth in Section 3, which will be
mutually agreed to by both parties.
2.7 Buyer agrees to review with Vivier its sales by country for those
countries specified on Schedule E within 60 days of the end of each Contract
Year. In the event that Buyer has not established sales in any country specified
on Schedule E by the end of the first Contract Year, Buyer's exclusivity and
distribution rights under this agreement with respect to such country shall
automatically terminate.
2.8 Vivier hereby grants to Buyer the right of first offer to
distribute its Vitamin-C 10% plus Hydroquinone 4% product, upon release of such
product from stability testing. In the event that Buyer exercises its right of
first offer hereunder, such product shall be deemed incorporated in the
definition of Products under this agreement, and the parties shall agree on
minimums in addition to those specified in Section 3.
3. BUYER PRODUCT COMMITMENTS
3.1 First Contract Year
a) During the first Contract Year, Buyer hereby agrees to purchase the following
minimum quantities for delivery in the first Contract Year:
1) For the US, a total of 50,000 units in the aggregate of
the Vitamin-C 5% Eye Contour Serum 15 ml and Vitamin-C 10%
High Potency Serum - 30 ml.
2) For the 4 Country Groups and countries specified on
Schedule E, a total of 50,000 units in the aggregate of
the Vitamin-C 5% Eye Contour Serum - 15 ml and Vitamin-C
10% High Potency - 30 ml.
3) The Buyer shall provide Vivier with an opening purchase
order for 16,000 units of Vitamin-C 5% Eye Contour Serum
15 ml and 20,000 units of Vitamin-C High Potency 30 ml
within five (5) working days from the
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Commencement Date. Failure to issue the purchase order
shall not relieve the Buyer from any liability for these
quantities.
4) The Buyer agrees to pay Vivier a deposit equal to 20%
of the value of the first (opening) order upon submission
of the purchase order to Vivier, and the balance thirty
days (30) after shipment. Vivier agrees to apply this
deposit only toward the procurement of materials, supplies
and packaging related to Buyer's order. In return for
making this payment, Vivier will grant to Buyer a discount
of 2% from the unit prices shown in Schedule B or from
Schedule C.
5) Buyer will provide to Vivier, at its own cost and expense,
and approved by the Buyer final artwork and packaging
design for the Products.
3.2 Subsequent Contract Years
a) For the second through to the fifth contract year, Buyer agrees to
purchase a minimum quantity equal to 107.5% of the total minimum quantities in
effect for the preceding Contract Year.
b) In order for the Buyer to maintain exclusivity of the Products in
the Territory, the Buyer agrees to purchase the minimum annual quantities for
the US and for the Country Groups and countries set forth on Schedule E as set
forth in Sections 3.1 and 3.2, respectively, and under the terms set forth in
this Agreement. If the Buyer fails to meet the minimum annual quantities as set
forth in Sections 3.1 and 3.2, the Buyer's exclusivity right in the US and/or
the Country Groups and countries set forth on Schedule E, respectively, will
automatically revert to Vivier.
4. PRICE; PAYMENT, MARKETING RESPONSIBILITY; MISCELLANEOUS TERMS AND
CONDITIONS OF SALE
4.1 (a) The transfer price payable by Buyer for the Products shall be
as set forth in Schedule B attached hereto (the "Transfer Price") or as set
forth in Schedule C attached hereto ("Annual Unit Volume Transfer Price and
Discounts").
4.2 (a) Buyer shall bear the cost of any sales taxes of any kind,
nature or description whatsoever applicable to the sale of any Product sold by
Vivier to Buyer and Buyer shall forthwith pay to Vivier all such sums upon
demand unless Buyer is exempt therefrom and, as evidence thereof, provides to
Vivier, at the time of the submission of its order to Vivier, with tax exemption
certificates or permits acceptable to the appropriate taxing authorities.
(b) Shipping terms shall be F.O.B. Vivier's Montreal area,
Quebec location. All freight and shipping charges and all other taxes, custom
duties or fees, storage, handling, insurance and other charges relating to
the Product shall be paid by the Buyer. Vivier may increase its sale price of
the Product proportionately to the increase in the Canadian Consumer Price
Index as published by Statistics Canada, taking the month in which this
agreement is executed for a reference. The increase shall be effective the
beginning of each Contract Year.
(c) All payments to Vivier hereunder shall be in US dollars.
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4.3 Each release of Product for shipment to Buyer shall constitute a
separate sale, obligating Buyer to pay therefor, subject to the terms of this
agreement, whether said shipment is in whole or only partial fulfillment of any
order or confirmation issued in connection therewith. Vivier agrees to invoice
each separate shipment on a separate invoice.
4.4 (a) Vivier shall issue its invoice to Buyer at the time of
shipment. Payments for Product sold hereunder shall be made by Buyer to Vivier
within thirty (30) days after date of invoice, terms net 30 days or 2% net 15
days by check or, at the discretion of Vivier, by electronic transfer. The
correct purchase order number will be quoted on all invoices. All overdue
amounts shall collect interest at the prime rate of Vivier's bank plus 2% but
never less than 12% per annum, calculated daily
(b) Subject to Section 5.1 hereof, all payments shall be in
the full amount stated in each invoice, without any setoffs, deductions or
withholdings of any kind, except that payment shall not be required to the
extent that Buyer reasonably determines that it has the benefit of a credit
relating to any previously issued invoice and follows the procedures set forth
in the remainder of this Section 3.4(d). Buyer shall not make any such deduction
or set off against amounts owed to Vivier, without first providing thirty (30)
days written notice to Vivier of the existence of a dispute. Such written notice
shall include enough detail to enable Vivier to evaluate the claim, including
but not limited to, a description of the type of claim (i.e., pricing, rebate,
shortage claim) as well as the relevant items, prices, quantities, relevant time
period. The parties agree to negotiate in good faith to resolve any such
dispute.
4.5 Buyer shall be responsible for all marketing, distribution, and
related costs incurred by it in connection with its sale of the Products within
the Territory.
4.6 (a) The parties shall cooperate to develop mutually acceptable
procedures to ensure compliance with applicable advertising and promotion
regulations.
(b) Buyer represents, warrants and covenants that all marketing,
labeling, sale and distribution shall be in accordance with local laws and
regulations.
4.7 Buyer shall not use, or claim any right or license with respect to,
any trademark, trade name, service xxxx or logo of Vivier, and Vivier shall not
use, or claim any right or license with respect to, any trademark, trade name,
service xxxx or logo of Buyer.
4.8 To the extent not otherwise covered in this Agreement, purchases of
Product hereunder will be made pursuant to Buyer's standard purchase order
procedures (the "Procedures"). Such Procedures may be modified from time to time
with the written consent of Vivier, which consent shall not unreasonably be
withheld. Notwithstanding the foregoing, it is understood that the provisions of
this Agreement shall control in the event of any conflict between such
provisions and Buyer's Procedures.
4.9 a) In addition, to the transfer price payable by the Buyer for the
Products as set forth in Schedule B attached hereto (the "Transfer Price").
Vivier has agreed to provide to the Buyer with Annual Unit Volume Transfer
Prices and Discounts for the Vitamin-C 5% - 15 ml and for the Vitamin-C 10% - 30
ml as set forth in Schedule C attached hereto (the "Annual Unit Volume Transfer
Price and discounts"). These prices will be set at the commencement of the
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Contract Year and will be based on the Buyer's total committed annual unit
minimums for the Territory.
b) Should the Buyer exceed their total committed annual unit
minimums for the Territory and that their increased sales units of the said
Products qualifies them to benefit from a lower price range, Vivier, at its
option, will either remit to the Buyer a) a dollar credit and/ or b) free goods
for the difference in the price for the Products sold to and paid for by the
Buyer at the end of Contract Year. This credit would be remitted by Vivier to
the Buyer within 60 days of the close of the Contract Year and providing there
are no outstanding balances and no unforecasted unit sales i.e., intentional
loading by the Buyer unless otherwise mutually agreed to.
(c) Should the Buyer, given its projected quarterly and / or
annual unit forecasts, fail to meet its stated committed annual unit volumes and
have benefited or are benefiting from the lower unit price volumes, upon
Vivier's request, the Buyer agrees that it is obligated to pay Vivier for the
difference in the volume unit price it has received for the purchased Products
given its actual unit sales and as set forth in Schedule C attached hereto (the
"Annual Unit Volume Transfer Price and Discounts"). The Buyer agrees that it
will remit to Vivier within 60 days of the close of the Contract Year, or when
requested by Vivier, given the Buyer's known lower unit sales volumes and
forecasted unit volumes supplied to Vivier, the difference between what it has
paid for the purchased Products and the new price based on their actual annual
unit volume as set forth in Schedule C attached hereto (the "Annual Unit Volume
Transfer Price and Discounts").
5. FORECASTS; SHIPMENTS; ORDERS
5.1 In order to assist Vivier in planning its production runs for the
Products, the Buyer shall provide Vivier, at least five (5) days prior to the
beginning of each month, with a three (3) month rolling forecast of the
quantities of each Product required by Buyer, by month, for the following three
(3) months, together with the approximate dates upon which it will request the
deliveries of such Product be made. In addition, Buyer shall submit a forecast
for the succeeding three (3) months in quarterly estimates. It is understood
that such rolling forecasts are intended to be Buyer's estimates of its purchase
requirements; they shall not be binding upon either party. Notwithstanding the
foregoing, Buyer acknowledges that production and plant capacity planning will
be based on such forecasts Buyer shall be bound to purchase from Vivier 100% of
those quantities of Product set forth in any such forecast as being the
requirements of Products for the first three (3) months of the forecast.
5.2 Vivier shall, within thirty (30) business days after receipt of
each such forecast notify Buyer of any prospective problems it might have in
respect of meeting Buyer's forecasted order quantities or estimated delivery
dates.
5.3 Buyer shall provide Vivier with its firm orders for the Products
within the lead times set forth on Schedule A (which Schedule A describes
different lead times for different Products) and Vivier, within five (5)
business days after the date that an order is deemed placed with it (the "Order
Date"), shall acknowledge receipt of Buyer's order and confirm that the order
can be supplied. For purposes hereof, the Order Date shall be the earlier of (a)
the date that Vivier receives the order via mail or (b) the date of receipt of
the telecopied order.
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5.4 For the opening order only, the Buyer agrees to xxxxx Xxxxxx a lead
time of up to 60 days (upon approval of the Buyer's final label and package
artwork, UPC bar code, etc.) to deliver the Products to the Buyer. Vivier agrees
to use its commercially reasonable efforts to deliver such order as soon as
possible.
5.5 (a) Each order shall specify the quantity of Product ordered.
The order shall be delivered to such location as Vivier designates in writing
to Buyer from time to time. On or after the Order Date, Buyer will specify
individual shipment release dates for the quantities ordered. Subject to the
terms of the following sentence, Buyer is under no obligation to accept
shipments nor commence payment of invoices prior to the shipment release date.
(b) Buyer shall provide Vivier with a list of approved carriers.
Vivier shall make all necessary shipping arrangements with a carrier listed
by Buyer as "approved" and shall deliver all orders to Buyer F.O.B. Buyer
delivery point.
(c) When a shipment of Product is ready for delivery, Vivier
shall notify Buyer of the expected delivery dates (including, to the extent
applicable, details or port, date and time) to enable delivery and collection
to be coordinated.
(d) Buyer shall be fully responsible for all final label and
packaging artwork provided to Vivier. Vivier shall review and approve such
final artwork. Any future modifications thereto to be included in the final
packaging production will be brought to the attention of the Buyer for final
approval and Vivier will supervise the final production runs.
(e) Vivier shall purchase all materials and packaging components
for the Product. The Buyer understands that Vivier's 15 ml bottle products
are currently packaged in carton boxes of 30's and that the 30 ml bottle
products are packaged in carton boxes of 20's and shipped in master shippers
of 8 cartons.
(f) Vivier agrees to properly xxxx, xxxx and ship the Product to
one (1) location designated by Buyer in boxes of twelve (12).
(g) The Buyer agrees, given Vivier's current and standard
packaging, to: (1) pay for special or customized shipping and printing
plates, films for labels for outer boxes and master shippers; (2) be
responsible for the labeling i.e., label specifications and copy (including
translation(s), and bear the cost of original artwork, print origination and
any subsequent amendments thereto, and of the final printing material (sticky
labels, insert and outer cartons); and (3) send to Vivier any revisions to
the finished artwork, translated if necessary, or films at least three (3)
months before the due date of each shipment, other than for the opening order.
6. ALLOCATION OF SHORTAGES
6.1 Subject to Section 2.5 hereof, Vivier shall not be required to
maintain an inventory of the Products and shall use reasonable efforts to supply
the Products according to the Buyer's purchase orders insofar as not prevented
or hindered by limitations of availability, production hold-ups, shortages of
raw materials or labor and the like. In the event of such
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happenings, Vivier shall notify the Buyer at the earliest possible time of
the impending delay or shortage. Vivier shall then allocate between its
customers (including its own requirements) and the Buyer its available supply
of Products in proportion to the respective quantity of Products purchased
from Vivier by each customer and by the Buyer during the preceding three
month period. Any shortages in supply to the Buyer relating to accepted
purchase orders shall reduce the Buyer's minimum purchase obligations by the
amount of the shortfall.
7. INSPECTION OF SHIPMENTS
7.1 Buyer shall inspect all Product delivered hereunder for defective
or adulterated Product within a reasonable period of time after receipt and
shall provide Vivier with written notice of any such defective or adulterated
Product within thirty (30) days of discovery of any defect of adulteration.
Defective or adulterated Products, excluding those Products suffering from
defects or adulteration as a result of shipper's action or failure to act, shall
hereinafter be referred to as, "Damaged Product." If within such thirty (30) day
period, Buyer notifies Vivier that in its opinion the defects or adulteration
are not as a result of shipper's action or failure to act, Buyer agrees to
review its results with Vivier's Quality Assurance Department to confirm the
existence of Damaged Product. Pending final determination of the existence of
Damaged Product, Buyer's obligation to pay for the Damaged Product shall be
suspended. Upon a determination that such product is or was not Damaged Product,
Buyer shall immediately pay to Vivier the full invoice price for such product.
If both parties agree that the shipment, or any part thereof, is Damaged
Product, then Vivier shall, at Buyer's option, (a) deliver replacement Product
to Buyer as soon as reasonably practical thereafter (but, in any event, within
ninety (90) days after the initial notification by Buyer) , (b) refund to Buyer
(by cash or credit) the purchase price paid by Buyer with respect to the amount
of Product which is determined to be Damaged Product or (c) cancel that portion
of the purchase order to the extent of the Damaged Product in which event Buyer
shall have no obligation to pay for such Damaged Product. If the parties
disagree as to the existence of a problem, they will then submit representative
samples of the shipment to a mutually acceptable independent testing lab and the
results of said lab shall be binding on the parties and the costs associated
with such submission shall be borne by the party against which the lab decides.
7.2 (a) Notwithstanding any other provisions of this Agreement, Buyer
agrees, if so requested by Vivier, to return to Vivier, at Vivier's expense, any
Product that is, or is claimed to be, Damaged Product or otherwise to dispose of
such Product as Vivier may direct.
7.3 Vivier's warranty shall not extend to the Products which have been
improperly stored or handled after loading on carrier.
8. TRADE SECRETS AND CONFIDENTIALITY
8.1 (a) Vivier or Buyer may, from time to time, disclose to the other
valuable information of a technical or nontechnical nature that is not generally
known to the trade or public. Each of Vivier and Buyer agrees that during the
period that this Agreement is in effect and for a period of five (5) years
thereafter, it will not disclose to anyone in any manner whatsoever (except as
authorized in writing by the other party) any such information
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("Confidential Information"), including, without limitation, intellectual
property, inventions, works of authorship, trade secrets or know-how or other
information relating in any way to the products, processes, and services of
such other party which becomes known to Vivier or Buyer, as the case may be,
during the period that this Agreement is in effect. The obligations of this
Section 6 shall not apply to information that (i) is known to a party as
shown by written records prior to the disclosure of such information by the
other party; (ii) becomes public information or is generally available to the
public other than by an unauthorized act or omission of a party; or (iii) is
received by a party from third parties who are in rightful possession of such
information and who are lawfully entitled to disclose such information to
such party.
(b) Upon termination of this Agreement, each of Vivier and
Buyer shall return to the other all materials and documents that include
Confidential Information of the other party, including all copies of such
materials and documents, and shall make no further use of such Confidential
Information.
8.2 Each party agrees to advise those of its employees who receive any
other party's Confidential Information that such information (a) is proprietary
and confidential to such party and (b) shall not be disclosed to anyone except
as authorized by this Agreement or otherwise authorized by such party in
writing. Each party further agrees to take such precautions as it normally takes
with its own confidential and proprietary information to prevent unauthorized
disclosure of another party's Confidential Information.
8.3 In the event that a party becomes legally compelled to disclose
another party's Confidential Information, it will provide such other party with
prompt advance notice in writing so that such other party may, at its
discretion, defend against such legal obligation, seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Section 6. In the event that such protective order or other remedy is not
obtained, a party will furnish only that portion of such other party's
Confidential Information which, it is advised by written opinion of counsel, is
legally required and will exercise its best efforts to obtain reliable assurance
that confidential treatment will be accorded such Confidential Information.
8.4 Each party acknowledges that any unauthorized disclosure of any
portion of another party's Confidential Information shall cause irreparable
injury to such other party and that no adequate or complete remedy shall be
available to such other party to compensate for such injury. Accordingly, each
party hereby also acknowledges that such other party shall be entitled to
injunctive relief in the event of such unauthorized disclosure by a party or any
of its employees in addition to whatever remedies it might have at law.
9. INTELLECTUAL PROPERTY
9.1 Nothing in this agreement shall be construed as transferring to the
Buyer any right, title or interest in or to any patent, trademark, copyright,
design, proprietary information, process or know-how related to the Product and
which is the property of or controlled by Vivier.
9.2 The Buyer agrees that its corporate name shall not include: a) the
Trademarks, the name of Vivier or any word confusingly similar thereto; or b)
any other trademark owned by Vivier.
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9.3 The Buyer acknowledges that it has no proprietary interest in any
of the Trademarks, and Patents, that all such Trademarks and Patents are the
property of Vivier. The Buyer shall acquire no proprietary interest in them as a
result of such use and shall not at any time, whether during or after this
agreement, assert or claim any rights in any of the Trademarks and Patents.
10. AUTHORIZATION AND REGISTRATIONS
10.1 The Buyer shall comply with all regulatory requirements of the
Territory and obtain at its cost all necessary authorizations, licenses or
permits for the sale of the Products in the Territory, only to the extent Buyer
intends to sell the Products in such portion of the Territory. Vivier shall
provide any data concerning the Product which may be reasonably be required in
order to comply with applicable regulatory requirements.
10.2 In the event that regulatory approval or registration is
compulsory in certain countries of the Territory in which Buyer intends to sell
the Products, Buyer shall apply for such registration in the name of the Buyer
and Vivier and take such steps as are reasonably necessary to acknowledge that
Vivier is the manufacturer, at its cost.
11. MUTUAL REPRESENTATIONS AND WARRANTIES
Each of the parties hereto represents and warrants to the other that:
(i) it is a corporation duly organized, existing, and in good standing in
accordance with the laws of its state of organization; (ii) it has all requisite
legal and corporate power and authority to enter into this Agreement; (iii) when
executed by the corporate officers whose names appear on the signature page
hereof, this Agreement shall be a valid and binding obligation of the parties
enforceable in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency, and the relief of debtors; (iv) the
execution and delivery of this Agreement and consummation of the transactions
contemplated hereby will not constitute a breach or default under any other
agreement to which it is party or by which it is bound; (v) it will comply with
all applicable laws, rules and regulations in the conduct of its
responsibilities and activities under this Agreement.
12. SAFETY AND HEALTH--RESPONSIBLE CARE
12.1 From time to time Vivier may provide Buyer with safety and health
information, including, without limitation, warnings, material safety data
sheets, precautionary safety measures, and instructions on proper care, use and
handling, storage, and disposal of the Product. Buyer agrees to observe all
precautions and instructions provided by Vivier and to communicate all such
environmental, safety and health information to its employees.
12.2 Buyer shall follow safe handling, storage, transportation, use,
and disposal practices with respect to the Product, including, but not limited
to, those required by federal, state, and local laws, regulations, and
ordinances and those set forth in the Responsible Care Codes of the Chemical
Manufacturers Association.
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12.3 Vivier shall have the right to inspect Buyer's locations (in the
company of a Buyer representative) at reasonable times and upon reasonable
advance notice to determine Buyer's compliance with applicable laws and
regulations and with Vivier's instructions on proper care, use, handling,
storage and disposal of the Product.
13. QUALITY OF THE PRODUCT
13. 1 Vivier hereby warrants that no Product constituting or being a
part of any shipment made by Vivier pursuant hereto shall at the time of any
such shipment be adulterated or misbranded within the meaning of the Act or TPP,
or regulations promulgated thereunder, as such law or regulation is constituted
and in effect at the time of any such shipment. Notwithstanding the foregoing,
Vivier makes no misbranding representation with respect to Buyer's promotional
activities.
13.2 The parties hereto agree to mutually cooperate with each other, as
required by pertinent provisions of the Act or TPP and the regulations
promulgated thereunder, in connection with any recalls, complaints or adverse
reactions relating to the Product manufactured and sold hereunder. In the event
of any recalls relating to the Product, all costs associated therewith shall be
borne by the party whose action or inaction causes such recall. For purposes of
this Section 13.2, the cost of any recall shall be deemed to be any
administrative and shipping expenses incurred by Buyer's customers and
reimbursed by Buyer, unless otherwise agreed in writing by the parties hereto.
13.3 VIVIER HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE. Except as otherwise specifically provided in this Agreement,
Buyer assumes all risks and liabilities whatsoever resulting from the
transportation, handling, storage, use and disposal of the Products, whether
used singly or in combination with other substances.
13.4 (a) Product quality complaints received by the Buyer will be
forwarded upon receipt to a quality assurance representative to be designated by
Vivier. It is Vivier's responsibility to investigate these complaints or forward
such complaints to the manufacturer, if applicable, and to provide Buyer with a
follow-up report and required corrective actions, if any.
(b) Adverse event reports received by the Buyer will be forwarded
upon receipt to Vivier's designated quality assurance representative. It is
Vivier's responsibility to fulfill its regulatory and reporting requirements
related to the adverse event reports.
14. INDEMNIFICATION
14.1 Subject to Sections 14.3 and 14.4 hereof, Buyer shall defend,
indemnify and hold harmless Vivier, its officers and directors, and its
successors and permitted assigns (collectively referred to as the "Vivier
Indemnified Parties"), from, against and in respect to any and all losses,
obligations, liabilities, penalties and damages (other than the Vivier
Indemnified Parties' consequential, incidental, special or indirect damages) and
reasonable costs and expenses which any of the Vivier Indemnified Parties may
incur or suffer in connection with any and all
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deficiencies, actions (including, without limitation, any proceedings to
establish insurance coverage) and/or judgments, with which any of them may be
faced and which arise out of or are based upon third party claims or
investigations asserted or initiated against any of them arising from the
use, labeling, sale or marketing of the Product, except to the extent such
claims arise from (a) manufacturer and/or Vivier's failure (i) to meet the
manufacturing specifications contained in the Product's ANDA or (ii) to
manufacture and package the Product in compliance with the Act and TPP and
with the FDA's and TPP's GMP and other regulations promulgated under the Act.
14.2 Subject to Section 14.4 hereof, Vivier shall defend, indemnify and
hold harmless Buyer, its officers and directors, and its successors and
permitted assigns (collectively referred to as the "Buyer Indemnified Parties"),
from, against and in respect of any and all losses, obligations, liabilities,
penalties and damages (other than the Buyer Indemnified Parties' consequential,
incidental, special or indirect damages) and reasonable costs and expenses which
any of the Buyer Indemnified Parties may incur or suffer in connection with any
and all deficiencies, actions (including, without limitation, any proceedings to
establish insurance coverage) and/or judgments with which any of them may be
faced and which arise out of or are based upon third party claims or
investigations asserted or initiated against any of them to the extent such
claims arise from manufacturer or Vivier's failure to manufacture and package
the Product in compliance with the Act and TPP and with the FDA's and TPP's GMPs
and other regulations promulgated under the Act and TPP. Vivier's
indemnification obligations under this Section 14.2 shall not be subject to the
limitation of liability set forth in Section 7.3 hereof.
14.3 Without limiting its obligations under Section 10.2, Vivier shall
defend, indemnify, and hold harmless the Buyer Indemnified Parties from,
against, and in respect to any and all losses, obligations, liabilities,
penalties, damages, and reasonable costs and expenses which any of the Buyer
Indemnified Parties may incur or suffer in connection with any claim of
infringement of any patent or other proprietary right made against any of them
and based, in whole or in part, upon Buyer's activities properly undertaken
pursuant to this Agreement.
14.4 The foregoing indemnification obligations of Vivier and Buyer are
subject to the following: (a) the indemnifying party is notified by or on behalf
of the indemnified party in writing promptly after a claim is made, a suit is
filed or an action or investigation is initiated (each, a "Proceeding") against
the indemnified party; (b) the indemnifying party is permitted to defend,
control, conduct and prosecute, in the indemnifying party's sole discretion and
by counsel of the indemnifying party's choosing, the defense of such Proceeding
brought against the indemnified party; (c) subject to the last sentence of this
Section 14.4, the indemnifying party has the right in its sole discretion to
settle, compromise or otherwise terminate the Proceeding and each of Vivier and
Buyer expressly agrees that the indemnifying party may do so in its name; (d)
the indemnified party shall refrain from settling any such Proceeding without
the indemnifying party's prior written consent; (e) the indemnified party shall
not compromise the position of the indemnifying party by admission, statements
or conduct in a way that could prejudice the defense, control, conduct or
prosecution of said cause of action; and (f) the indemnified party shall
cooperate with the indemnifying party in the defense, conduct, prosecution or
termination of the Proceeding, including the furnishing of information and the
assistance from employees of the indemnified party at the indemnifying party's
reasonable request and at no charge to the indemnifying party. Notwithstanding
anything in clause (c)
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above to the contrary, no compromise or settlement of any Proceeding may be
effected by the indemnifying party without the indemnified party's consent
(which consent shall not be unreasonably withheld), unless, in connection
therewith, there is no finding or admission of any violation by the
indemnified party of (i) any law, rule or regulation or (ii) the rights of
any person.
14.5 Promptly after receipt by a party of notice of the threat or
commencement of any Proceeding against it in respect of which indemnity may be
sought against the other party hereunder, the parties shall determine their
respective indemnification responsibilities under this Section 14. If the
parties are unable to agree, they shall retain an outside expert whose
determination in this regard shall be final and binding. If the parties are
unable to agree on an outside expert or such expert is unable to make a
determination as to the parties' respective indemnification responsibilities,
then such determination shall await the completion of the Proceeding. Pending
such completion, the parties shall conduct the defense of the Proceeding as
agreed between them. In any event, the determination by a court of competent
jurisdiction, with respect to the fault or responsibility of the parties, shall
be conclusive and binding for purposes of determining a right to indemnification
under this Article 14.
14.6 a. Buyer and Vivier shall maintain during the performance of this
Agreement the following insurance or self-insurance in amounts no less than that
specified for each type:
i) General liability insurance with combined limits of
not less than $1,000,000 per occurrence and
$1,000,000 per accident for bodily injury, including
death, and property damage; and
ii) Product Liability Insurance with limits not less than
$2,000,000.
b. Upon request, Vivier and Buyer shall each provide the other with
evidence of its insurance or self insurance. Each party shall
provide the other thirty (30) days prior written notice of any
cancellation or change in its coverage.
c. Such insurance shall be underwritten with a responsible and
reputable insurer.
d. Each of Vivier and Buyer's policies shall include the other as
additional insureds as their respective interests may appear.
14.7 UNDER NO CIRCUMSTANCES SHALL ANY PARTY BE LIABLE FOR ANY INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF THE OTHER, INCLUDING BUT NOT
LIMITED TO DAMAGES FOR LOST PROFITS OR INTERRUPTION OF BUSINESS ARISING OUT OF
OR RELATING TO THE SUPPLY OF PRODUCTS UNDER THIS AGREEMENT.
15. TERM AND TERMINATION
This Agreement shall commence on the Commencement Date and shall
continue in effect for five (5) years (hereinafter referred to as the "Initial
Term") and may be renewed thereafter upon mutual agreement between the parties.
16. DEFAULT
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16.1 Either party may terminate this Agreement upon the giving of
prior written notice to the other party if the other party (a) has not fully
complied, in all material respects, with the terms and conditions hereof and (b)
fails to cure any such material noncompliance within forty-five (45) days after
receipt of such notice; in such event, this Agreement shall terminate effective
on the later of (a) the expiration of such forty-five (45) day period or (b) the
date specified in the written notice from the terminating party. In addition,
either party may terminate this Agreement with immediate effect upon giving
written notice to the other party in the event of insolvency, assignment for the
benefit of creditors, or bankruptcy proceedings by or against the other party.
In the event of termination by Buyer pursuant to this Section 16.1 as a result
of material breach by Vivier, and subject to the provisions of Section 4.4,
Vivier shall honor any purchase order accepted prior to the date notice of
termination is given. In the event of termination by Vivier pursuant to this
Section 16.1 as a result of Buyer's material breach, Buyer acknowledges and
agrees that Vivier shall be entitled to cancel any purchase order accepted prior
to the date notice of termination is given, and shall not be obligated to ship
any Product ordered by Buyer pursuant to such purchase order.
16.2 The termination of this Agreement shall not release Buyer from the
obligation to pay any sum that may be owing to Vivier (whether then or
thereafter due to Vivier) or operate to discharge any liability that had been
incurred by either party prior to any such termination.
16.3 During the period between the giving of any notice of termination
of this Agreement pursuant to this Section 16 and the effective date of
termination, all Product shall be delivered to Buyer solely on a C.O.D.
basis.
16.4 Notwithstanding any termination of this Agreement, the provisions
of Section 4.6(b), and Articles 7, 8, 9, 12, and 14 shall remain in effect.
17. FORCE MAJEURE
17.1 Neither party shall be liable for any failure to deliver or
receive or any delay in delivery or receipt of any shipment when such failure or
delay shall be caused (directly or indirectly) by fire; flood; accident;
explosion, sabotage; strike, or any labor disturbance (regardless of the
reasonableness of the demands of labor); civil commotions; riots; invasions;
wars (present or future); acts, restraints, requisitions, regulations, or
directions of any governmental authority; voluntary or mandatory compliance by a
party with any request of any governmental authority, or any officer,
department, agency, or committee thereof; voluntary or mandatory compliance by a
party with any request for material represented to be for purposes of (directly
or indirectly) producing articles for national defense or national defense
facilities; shortage of labor, fuel, power or raw materials; inability to obtain
supplies; failures of normal sources of supplies; inability to obtain or delays
of transportation facilities; any act of God; or any cause (whether similar or
dissimilar to the foregoing) beyond the reasonable control of a party.
17.2 Except as provided below, if a force majeure event occurs, then
the affected party's performance shall be excused and the time for performance
shall be extended for the period of delay or inability to perform due to such
occurrence. If, however, any such event shall
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delay any shipment hereunder or the receipt thereof for more than thirty (30)
days beyond the scheduled delivery date, then (a) if such event is suffered
by Buyer and not also Vivier, Vivier shall have the right, at its option, to
cancel such shipment, and (b) if such event is suffered by Vivier and not
also Buyer, Buyer shall have the right to cancel its order and to purchase
from a third party the amount of Product ordered without incurring any
liability to Vivier with respect thereto. If any such disability exists for
more than ninety (90) days, the party not under such disability may terminate
this contract without liability to the other party by giving such other party
thirty (30) days' prior written notice of termination, and this Agreement
shall terminate on such thirtieth (30th) day unless prior thereto the force
majeure event ceases to exist and the party giving the notice of termination
is so notified in writing.
18. ASSIGNMENT
No party shall assign or otherwise transfer this Agreement or any
interest herein or any right hereunder without the prior written consent of the
other party, except that either party may, without the necessity for such
consent, assign this Agreement or any interest herein or any right hereunder, to
any of its Affiliates, or to any party which acquires a majority in interest of
Buyer's or Vivier's assets or capital stock. Any such purported assignment,
transfer, or attempt to assign or transfer any interest or right hereunder
except in compliance with this Section 13 shall be null, void and of no effect.
19. WAIVER; SEVERABILITY
19.1 Each party acknowledges and agrees that any failure on the part of
the other party to enforce at any time, or for any period of time, any of the
provisions of this Agreement shall not be deemed or construed to be a waiver of
such provisions or of the right of such other party thereafter to enforce each
an every such provision.
19.2 The rights and remedies set forth herein shall be the exclusive
rights and remedies of the parties.
19.3 If and to the extent that any provision of this Agreement is
determined by any legislature, court or administrative agency to be in whole or
in part invalid or unenforceable, such provision or part thereof shall be deemed
to be surplusage and, to the extent not so determined to be invalid or
unenforceable, each provision hereof shall remain in full force and effect
unless the purposes of this Agreement cannot be achieved. In the event any
provisions shall be held invalid, illegal or unenforceable the parties shall use
commercially reasonable efforts to substitute a valid, legal and enforceable
provision which insofar as practical implements the purposes hereof.
20. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of California as though made and to be fully
performed in said State. Any proceeding to enforce or resolve disputes of any
nature arising under or relating to this Agreement shall be brought exclusively
before the courts of the State of California or of the United States of America
for the Central District of California.
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21. NOTICES
All notices required or permitted hereunder shall be given in writing
and sent by facsimile transmission, or mailed postage prepaid by first-class
certified or registered mail, or sent by a nationally recognized express courier
service, or hand-delivered to the following addressees:
Vivier: Vivier-Registered Trademark- Pharma, Inc.
0000 Xxxxxxxx Xxx
Xx-Xxxxxx, Xxxxxx X0X 0X0, Xxxxxx
Tel: 000-000-0000
Fax: 000.000.0000
Attention: Xxxx Xxxxxx, President & CEO
Buyer: Obagi Medical Products, Inc.
000 Xxxxxx Xxxxx, Xxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Fax: 562/000-0000
Attention: Xxxxxxx X. Xxxx, President & CEO
or to such other address as may be specified in a notice given to the other
party in accordance with this Section. Any notice, if sent properly addressed,
postage prepaid, shall be deemed made three (3) days after the date of mailing
as indicated on the certified or registered mail receipt, or on the next
business day if sent by express courier service or on the date of delivery or
transmission (if delivered or sent during ordinary business hours, otherwise on
the next business day) if hand-delivered or sent by facsimile transmission.
22. CAPTIONS
The captions of each section of this Agreement are inserted only as a
matter of convenience and for reference and in no way shall be deemed to define,
limit, enlarge, or describe the scope of this Agreement and the relationship of
the parties hereto, and shall not in any way affect this Agreement or the
construction of any provisions herein.
23. ENTIRE UNDERSTANDING; MODIFICATION
23.1 This Agreement represents and incorporates the entire
understanding between the parties hereto with respect to the subject matter of
this Agreement, and each party acknowledges that there are no warranties,
representations, covenants or understandings of any kind, nature or description
whatsoever made by either party to the other, except such as are expressly
hereinabove set forth.
23.2 Except with respect to the Exhibits and Schedules attached hereto,
which may be amended as provided elsewhere in this Agreement, this Agreement
shall not be subject to change
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or modification except by the execution of a writing specified to be an
explicit amendment to this Agreement duly executed by both parties hereto.
23.3 The parties recognize that, during the term of this Agreement, a
purchase order, acknowledgment form or similar routine document (collectively
"Forms") may be used to implement or administer provisions of this Agreement.
Therefore, the parties agree that the terms of this Agreement prevail in the
event of any conflict between this Agreement and the printed provisions of such
Forms, or typed provisions of Forms that add to, vary, modify or are at conflict
with the provisions of this Agreement.
24. PARTIES' RELATIONSHIP
Nothing in this Agreement shall create between the parties a
partnership, joint venture or principal-agent relationship and, for the
avoidance of doubt, each of Vivier and Buyer now confirms and accepts (for
itself and as agent on behalf of its Affiliates) that it is an independent
contractor trading for and on its own behalf.
25. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original and all of which together shall constitute a
single instrument.
IN WITNESS WHEREOF, the parties hereto by their duly authorized
officers have executed this Agreement as of the day and year first above
written.
VIVIER-Registered Trademark- PHARMA, INC. OBAGI MEDICAL PRODUCTS, INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx X. Xxxx
--------------------- ---------------------------
Name: Xxxx Xxxxxx Name: Xxxxxx X. Xxxx
----------------- -----------------
Title: President & CEO Title: President & CEO
----------------- -----------------
Date: April 3, 2000 Date: March 30, 2000
----------------- -----------------
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SCHEDULE A
LEAD TIMES, BATCH SIZES, AND EXPIRATION DATING
------------------------------------- ------------------- -------------- ----------------------- -------------
Product Description Size Lead time Batch size Exp. dating
------------------------------------- ------------------- -------------- ----------------------- -------------
Vitamin-C 5% Serum 15 ml bottle 30 days Batch is 4,000 14 months
------------------------------------- ------------------- -------------- ----------------------- -------------
Vitamin-C 10% Serum 30 ml bottle 30 days Batch is 4,000 14 months
------------------------------------- ------------------- -------------- ----------------------- -------------
Vitamin-C 30 ml bottle 30 days Batch is 2,000 TBD
10% + 4% HQ Serum
------------------------------------- ------------------- -------------- ----------------------- -------------
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SCHEDULE B
TRANSFER PRICE
-------------------------------------- ------------------- -------------------------
Product Description Size Transfer Price
U.S. Dollars
-------------------------------------- ------------------- -------------------------
Vitamin-C 5% Serum 15 ml bottle $[***]
-------------------------------------- ------------------- -------------------------
Vitamin-C 10% Serum 30 ml bottle $[***]
-------------------------------------- ------------------- -------------------------
Vitamin-C 30 ml bottle $[***]
10% + 4% HQ Serum
-------------------------------------- ------------------- -------------------------
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[***] Material has been omitted pursuant to a request for confidential
treatment and such material has been filed separately with the
Securities and Exchange Commission.
SCHEDULE C
"ANNUAL VOLUME UNIT TRANSFER PRICE AND DISCOUNTS"
---------------------------------------- --------------------------------------
Annual Units % Volume Discount from Unit
Prices Shown on Schedule B
---------------------------------------- --------------------------------------
[***] to [***] [***]%
---------------------------------------- --------------------------------------
[***] to [***] [***]%
---------------------------------------- --------------------------------------
[***] to [***] [***]%
---------------------------------------- --------------------------------------
[***] to [***] [***]%
---------------------------------------- --------------------------------------
[***] to [***] [***]%
---------------------------------------- --------------------------------------
[***] to [***] [***]%
---------------------------------------- --------------------------------------
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[***] Material has been omitted pursuant to a request for confidential
treatment and such material has been filed separately with the
Securities and Exchange Commission.
SCHEDULE D
VIVIER PATENTS AND TRADEMARKS
1. Vivier and logo is a registered trademark and copyright in the US and
Canada.
2. Vitamin-C IDS trademark is pending in the US.
3. IDS and IntraDermal System is a registered trademark in Canada.
4. Vitamin-C and Vitamin-C + Hydroquinone formulations are Patent Pending
in the US and Canada.
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SCHEDULE E
INTERNATIONAL MARKETS HELD
EXCLUSIVELY FOR THE BUYER
WESTERN EUROPE ASIA S. AMERICA MIDDLE EAST
-------------- ---- ------------- -----------
France Taiwan Argentina Saudi Arabia
UK Korea Brazil United Arab
Norway Philippines Colombia Emirates
Sweden Australia Venezuela Egypt
Denmark New Zealand Israel
Benelux Singapore Lebanon
Germany Japan
Austria Peoples Republic of China
Switzerland Hong Kong
Italy
Spain
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SCHEDULE F
PRODUCT SPECIFICATIONS
Vitamin-C 5%
- 15 xx xxxxx xxxxx bottle
- L-Ascorbic Acid 5% USP
- Water USP
- Ethoxydiglycol EP
- Propylene Glycol USP
- Grapefruit Extract
- Fragrance
Vitamin-C 10%
- 30 xx xxxxx amber bottle
- L-Ascorbic Acid 10% USP
- Water USP
- Ethoxydiglycol EP
- Propylene Glycol USP
- Grapefruit Extract
- Fragrance
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