EXHIBIT 10.2
CONFIDENTIAL TREATMENT REQUESTED
Confidential Portions of This Agreement Which Have Been Redacted Are Marked With
Brackets ([***]). The Omitted Material Has Been Filed Separately With The
Securities And Exchange Commission.
SUPPLY AGREEMENT
THIS AGREEMENT is entered into as of the 3rd day of May, 2001 (the
"Commencement Date"), by and between BANNER PHARMACAPS INC., a Delaware
corporation, having an office at 0000 Xxxxxxx Xxxxx, Xxxx Xxxxx, Xxxxx Xxxxxxxx
00000 ("Banner") and SANOFI-SYNTHELABO INC., a Delaware corporation, having an
office at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("SaSy").
SaSy desires that Banner manufacture, imprint and bulk package the Product
(as hereinafter defined) for SaSy utilizing Banner's patented Soflet(TM)
technology in accordance with the provisions of this Agreement. Banner has the
capacity and is willing to manufacture, imprint and bulk package the Product for
SaSy in accordance with the provisions of this Agreement.
In consideration of the premises and of the mutual promises hereinafter set
forth, the parties agree as follows:
1. Definitions
The terms defined in this Section 1 shall, for all purposes of this
Agreement, have the meanings specified in this Section 1 (applicable in both the
singular and plural forms).
1.1 "Act" shall mean the United States Food, Drug and Cosmetic Act, as
amended from time to time.
1.2 "Cores" shall mean the active ingredient(s) listed in Appendix A in
solid caplet or tablet dosage form provided by SaSy to Banner for purposes of
gelatin enrobing by Banner.
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1.3 "cGMPs" shall mean current Good Manufacturing Practices as further
defined in regulations promulgated by the FDA under the Act or in related
guidance documents.
1.4 "FDA" shall mean the United States Food and Drug Administration and any
of its successor agencies or departments.
1.5 "In bulk" shall mean quantities of Product packaged in non-retail size
containers, such Product intended for repackaging and/or re-labeling in
accordance with the Act.
1.6 "Product" shall mean a Core (as defined in Section 1.2 above) which has
been gelatin enrobed by Banner under this Agreement.
1.7 "Specifications" shall mean any and all specifications agreed upon by
the parties from time to time for the composition and manufacture of the Product
including the imprinting and packaging thereof. All Specifications and any
subsequent changes thereto shall be in writing, dated and signed by the parties,
and identified as "Appendix A."
2. Purchase/Supply of Product
2.1 Banner Commitment. Banner agrees to manufacture, imprint and supply to
SaSy in bulk (as defined in 1.5 above) the Product, and any additional products
agreed to by the parties in writing, pursuant to SaSy's purchase orders
submitted in accordance with the terms and conditions of this Agreement.
Banner's duties shall include manufacturing, gelatin enrobing, imprinting,
testing, bulk packaging, applying lot numbers, labeling, and shipment of the
Product.
2.2 SaSy Commitment. SaSy agrees to purchase from Banner all of SaSy's
requirements of the Product for distribution and sale in the United States
during the term of this Agreement.
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2.3 Exclusivity. During the term of this Agreement, subject to the
conditions set forth below, Banner agrees not to manufacture (either for itself
or a third party) a prescription prenatal vitamin product in [***] for sale or
distribution within the United States. Further, subject to the conditions set
forth below, Banner agrees not to develop (either for itself or a third party) a
prescription prenatal vitamin product in [***], which product would be sold or
distributed within the United States during the term of this Agreement. Banner's
exclusivity commitment shall be subject to the following conditions:
(a) SaSy purchases at least [***] units of Product in calendar year 2002
and in each subsequent calendar year during the term of this Agreement and any
term extensions.
(b) SaSy's PreNate(TM)Brand, at all times remains in the [***] in the
prenatal prescription vitamin category based on full calendar year sales, as
determined by market research data agreed to by the parties.
3. Terms of Purchase
3.1 Pricing. Pricing for the Prenate(TM)brand product for the year 2001 is
$ [***] per 1,000 units. The base price ("Base Price") for purchases of the
Prenate(TM) brand product during subsequent calendar years shall be as follows:
[***] per 1,000 units
[***] per 1,000 units
[***] per 1,000 units
Beginning with calendar year 2002, sales of the Prenate(TM) brand product to
SaSy will be invoiced and paid at $[***] per 1,000 units, subject to adjustment
pursuant to Section 3.2(a). If during any such calendar year SaSy does not
realize at least $[***] in gross factory
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sales (by Sanofi) of the Product, then the Product price for all sales during
such year shall be adjusted retroactively to the applicable Base Price set forth
above, based upon the actual unit sales volume during such calendar year. SaSy
shall pay Banner (1) the difference between the applicable Base Price and the
$[***] invoiced price, multiplied by (2) the actual number of units sold during
such year, within 30 days following Banner's invoice. Pricing for any Products
other than the Prenate(TM) brand Product shall be subject to agreement by the
parties.
3.2 Price Adjustments; Payment Terms.
(a) Banner shall have the right to adjust its prices annually on sixty (60)
days' written notice to SaSy to reflect any total net increases in its per unit
cost of labor plus overhead (i.e., if there is a decrease in overhead and an
increase in labor, the price adjustment shall reflect the net change). Price
increases for labor and overhead costs will not exceed the rate of change in the
"Employment Cost Index for total compensation for private industry workers -
Manufacturing Nondurables" from June 2001 to the calendar month preceding the
effective date of the increase, as established by the U.S. Department of Labor.
(b) Banner shall adjust its prices annually to reflect any increases or
decreases in its cost of raw materials, including gelatin. In each case Banner
shall submit to SaSy the new purchasing standard pricing for raw materials at
least sixty (60) days before the effective date of the price change. Banner's
submission shall include appropriate documentation to support the change in raw
materials pricing.
(c) The parties agree that any price adjustments under Sections 3.2(a) and
3.2(b) shall be effective on January 1 of each calendar year during the term of
this Agreement.
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(d) The Product prices do not include any taxes, including, but not limited
to, sales, use and excise taxes or customs duties, all of which shall be paid
when due by SaSy. SaSy shall provide for all applicable jurisdictions any
necessary tax exemption or other certifications for any Products that Banner
agrees to drop ship on behalf of SaSy.
(e) Payments to Banner by SaSy for Product purchases shall be net thirty
(30) days. Payment shall be in U.S. dollars. Banner's invoice shall be issued
upon the date of shipment of Products to SaSy or SaSy's designee.
3.3 Forecasts. On or before the last day of each calendar month during the
term of this Agreement, SaSy shall furnish Banner with a written forecast of
SaSy's requirements of the Product for each of the next succeeding twelve
months. The first three (3) months of each forecast shall be a firm purchase
commitment (the "Committed Purchase"), and only month three can vary from the
prior monthly forecast. The first and second months of each 12 month forecast
shall be the same as the second and third months of the prior twelve month
forecast (i.e., rolling 12 month forecast).
3.4 Purchase Orders. Within two (2) weeks of the submission of each
forecast, SaSy shall provide Banner with a binding firm order ("Purchase Order")
for the Committed Purchase which specifies the specific Product, expected
delivery date to SaSy, the quantities of each Product ordered and the requested
place, time and manner of delivery (including any carrier designated for use by
SaSy). All purchases shall be pursuant to Banner's standard form of purchase
order acknowledgement. In the event of a conflict between such acknowledgment
form and this Agreement, this Agreement shall control. Within five (5) days
after receipt of a Purchase Order, Banner shall notify SaSy of its acceptance of
such Purchase Order. If such Purchase Order exceeds the standard order size
(i.e., 10 lots, 1.234 mm tablets, theoretical batch size), Banner shall indicate
what portion of the amounts covered by the Purchase Order Banner is willing to
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accept as a binding order. Such confirmation shall also confirm the delivery
date. If a specific raw material ingredient is delayed due to an event of force
majeure or fails to meet specifications, then for all purposes of this Section
3.4, Banner's shipment timetable shall be extended by the period of such delay
or in the case of unacceptable material, to allow Banner adequate time to obtain
suitable replacement material, provided such time or period shall not exceed the
3 month force majeure period set forth in Section 9 below. Banner recognizes
that the secure sourcing of raw materials is an integral part of its
manufacturing responsibilities, and will inform SaSy in a timely manner with
respect to any problems related to such sourcing.
3.5 Shipment. Banner shall ship each order F.O.B. Banner's manufacturing
facility. Freight and insurance shall be for the account of SaSy, and SaSy shall
bear the risk of loss, delay or damage in transit from and after delivery to the
designated carrier. Banner shall package the Product for shipment in accordance
with its customary practices, unless otherwise agreed in writing by Banner, in
which event any extra cost incurred by Banner on account of changes requested by
SaSy shall be reimbursed by SaSy. Banner shall include the following for each
shipment of the Product: (a) the purchase order number; (b) the lot and/or batch
numbers; (c) the quantity of the Product; and (d) a certificate of analysis in
Banner's customary form.
3.6 Royalties.
3.6.1 For Calendar Year 2002 and subsequent years during the term of this
Agreement, including any extensions, SaSy shall pay to Banner annually a royalty
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equal to [***]% of SaSy's "Gross Sales" (as defined below) if SaSy's Gross Sales
for such year exceed a threshold of $[***]. The royalty shall be payable on all
Gross Sales for the year if the $[***] threshold is reached. SaSy's payment
shall be made within thirty (30) days after the end of each calendar year. Each
payment shall be based upon a report (prepared by SaSy and submitted to Banner
within 45 days of the end of the calendar year) showing Gross Sales for such
calendar year for the Product, with sufficient detail to permit Banner to
confirm such report. For purposes hereof, "Gross Sales" means factory gross
sales of the Product before any deductions are made for discounts, returns,
rebates, and allowances by SaSy in accordance with its customary trade practices
and as determined in accordance with generally accepted accounting principles,
consistently applied. SaSy shall keep accurate books and records in accordance
with generally accepted accounting principles showing all information required
to calculate the amounts payable under this Section 3.6.1. Such books and
records will be preserved for at least three (3) years from the date of the
payment to which they relate.
3.6.2 Upon ten (10) days written notice from Banner, SaSy shall permit one
or more certified public accountants mutually agreeable to Banner and SaSy, to
inspect during normal business hours SaSy's books and records which specifically
pertain to the computation of Gross Sales and royalty revenues. Such accountants
will keep confidential all information received from SaSy, except that they may
disclose to Banner their findings regarding the computation of Gross Sales and
royalty revenues so that Banner may verify any amounts payable under Section
3.6.1. If any such inspection of SaSy's records indicates an underpayment to
Banner of five percent (5%) or more for any annual period, SaSy will
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reimburse Banner the discrepancy together with the actual and reasonable costs
of such inspection. Otherwise, such inspection will be at Banner's sole expense.
4. Ingredients.
4.1 Delivery of Cores. SaSy shall coordinate the delivery of Cores to
Banner in quantities as agreed by the parties (via confirmation of purchase
order) and as are necessary to enable Banner to manufacture and gelatin enrobe
the Core as provided herein. SaSy will use reasonable commercial efforts to
supply the Cores at least three (3) weeks before commencement of manufacture
with freight prepaid to Banner's High Point, North Carolina facility, as
reasonably directed by Banner. If a specific shipment of Cores is delayed or
fails to meet the Core Specifications (as defined in Section 4.2), then for all
purposes of this Section 4.1, Banner's shipment timetable shall be extended by
an appropriate period to account for such delay or in the case of unacceptable
Cores, by an appropriate period for SaSy to supply suitable replacement Cores.
Title to the Cores shall remain with SaSy at all times. Banner shall have no
payment obligation for the Cores; provided, however, that in the event of loss,
damage or shortage of Cores after receipt by Banner, Banner shall be responsible
for the Cores required to be replaced at a unit price of $[***] per thousand
Cores.
4.2 Core Specifications. The Cores SaSy supplies to Banner shall conform to
specifications (including size) agreed to by the parties (the "Core
Specifications") and delivery of the Cores to Banner shall signify SaSy's
approval of such Cores for use in manufacturing the Product. SaSy shall also
furnish Banner specifications for storage conditions for the Cores (e.g.,
packaging, temperature, percentage of relative humidity, etc.) to ensure the
Cores remain stable and capable of processing and Banner shall store in
accordance therewith. SaSy shall
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be responsible, at its expense, for return or disposal of any Cores that do not
meet the Core Specifications, and shall indemnify and hold harmless Banner,
subject to Sections 11.1, 11.3 and 11.5, for any losses or liabilities arising
from use of Cores that do not meet the Core Specifications previously agreed to
by the parties. Banner shall assume responsibility and risk for the safekeeping,
storage and handling of Cores delivered by SaSy to Banner hereunder.
4.3 Yields. (a) At the completion of the first twenty (20) full-scale
production batches (except the first validation lot, which has been previously
allocated between the parties for process optimization), SaSy and Banner will
mutually agree on a "standard yield". This determination will be made by a team
of both parties' technical personnel. This yield will serve as the standard
reference for full year calculation. At the end of each calendar year during the
term, if the actual annual yield is lower than the standard yield, then Banner
shall promptly investigate the reasons for the loss and provide SaSy with the
results of the investigation. If the investigation determines the Core loss was
due to non-conformance with Banner Manufacturing Requirements (as defined in
Section 5.1) or Banner's production processes, then Banner will reimburse SaSy
for the variance, at a unit price of $[***] per thousand Cores. Retained samples
and additional stability requests will not be taken into account in calculating
manufacturing loss. For purposes of determining the actual yield, any broken,
damaged or unusable Cores detected before or during the enrobing process shall
be excluded in determining the quantity of Cores supplied by SaSy. If due to
manufacturing errors by Banner or non-conformance of Product with Banner
Manufacturing Requirements, an entire batch of Product or Cores is rendered
unusable, then Banner shall reimburse SaSy for the entire batch of Cores, at the
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unit price set forth above, and in the case of Product previously paid for by
SaSy, at the actual cost of such unusable Product.
(b) If after Banner's investigation as described in Section 4.3(a) above,
Banner and SaSy do not agree on the loss or the reasons thereof, the matter will
be submitted to an independent laboratory acceptable to both parties for its
review and determination. The parties will agree on the methods and procedures
for testing. The determination of such independent laboratory will be binding on
both parties. The cost of the independent laboratory shall be borne by the party
who was in error.
4.4 Supply of Inactive Ingredients. Banner shall supply inactive and other
ingredients and materials as required for enrobing, manufacturing, imprinting,
testing and shipping the Product. Banner's receipt, processing, handling and
storage of all raw materials required hereunder shall be conducted under proper
and sanitary conditions in accordance with cGMPs. In the manufacture of
Products, Banner will not use any materials that fail to meet the current
National Formulary, the current U.S. Pharmacopoeia standards (where such
standards are established and are applicable), and/or any requirements specified
by Customer and agreed to by Banner for such materials. Banner must inform SaSy
in a timely manner of any changes which may impact the validation or stability
of the Products.
5. Performance Standards
5.1 Specifications and Characteristics Banner shall manufacture, bulk
package, test and ship the Products in accordance with (i) the Specifications
and (ii) all applicable laws and regulations, including but not limited to, the
Act and the regulations promulgated thereunder (such as current Good
Manufacturing Practices ("GMPs")), as amended and in effect from time to time.
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Banner's responsibilities and obligations described in the foregoing sentence
are hereinafter referred to as the "Banner Manufacturing Requirements". Banner
shall perform such quality control and quality assurance testing as is required
to ensure that the Products comply with all of the Banner Manufacturing
Requirements, except as otherwise set forth in the Specifications, the Technical
Agreement, or any of the appendices hereto. Banner shall not make any changes to
the Specifications without the prior written consent of SaSy.
5.2 Certificate of Analysis. Concurrent with shipment, Banner shall deliver
to SaSy a Certificate of Analysis, in Banner's customary form attached hereto
for each lot of Product sold to SaSy, confirming that the Product meets the
Banner Manufacturing Requirements.
5.3 Product Acceptance.
(a) Within thirty (30) days of receipt of Product, SaSy or its
designee shall conduct an analysis of samples of Products delivered by Banner.
Should the result of any analysis of such samples deviate from the Banner
Manufacturing Requirements, SaSy shall notify Banner in writing by facsimile and
immediately thereafter provide Banner with samples of the Product tested. If,
following a review of the test results and after conducting its own test of the
samples, Banner agrees that such samples do not conform to the Banner
Manufacturing Requirements, Banner shall provide SaSy, free of any additional
charge, with new deliveries of the same quantity of the Products and pay for the
cost of any related shipping, removal or destruction. At Banner's cost, Banner
may promptly reinspect the nonconforming Product to determine whether it meets
the Banner Manufacturing Requirements. In either event, SaSy shall return, at
Banner's expense, the particular lot or shipment of the Product which does not
comply with the Banner Manufacturing Requirements if requested to do so by
Banner. If SaSy fails to notify Banner of a batch that fails to conform to
Banner Manufacturing Requirements by the thirty-fifth (35th) day following
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receipt of the Product, then SaSy shall be deemed to have accepted such batch.
(b) If Banner and SaSy do not agree on whether the Product conforms to the
Banner Manufacturing Requirements, the matter will be submitted to an
independent testing laboratory acceptable to both parties for its review and
determination. The parties will agree on the analytical methods and procedures
for testing and an inter-laboratory methods transfer process will be implemented
at the laboratory to ensure acceptable data. The determination of such
independent laboratory will be binding on both parties. The cost of the
independent laboratory shall be borne by the party whose testing results were in
error. If the product is determined not to conform to the Banner Manufacturing
Requirements, then Banner shall, subject to Sections 11.2 and 11.5 have the
obligations with respect to the non-conforming Product set forth in Section
5.3(a) above; provided, however, that Banner shall be responsible for the cost
of any lost or damaged Core (at $[***] per 1,000 Cores) that may be necessary in
order to replace any non-conforming Products. Notwithstanding the foregoing,
Banner shall have no liability with respect to non-conforming Products to the
extent that such Products do not conform to the Banner Manufacturing
Requirements because of a defect in the Core or any other ingredients supplied
by SaSy under this Agreement. If the Product is determined to conform to the
Banner Manufacturing Requirements, then SaSy shall accept and pay for the
Product in accordance with the terms hereof.
(c) Subject to Sections 11.2 and 11.5, Banner's obligations in this Section
5.3 shall constitute SaSy's sole remedy for delivery of Product that does not
conform to Banner Manufacturing Requirements.
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6. Product Complaints
6.1 Field. Should either party experience any quality problem involving
field correction of any specific lot(s) of Product supplied to SaSy by Banner,
such party will notify the other in writing by facsimile within twenty-four (24)
hours. Banner will test retained samples of lots in question and report its
findings within ten (10) working days. SaSy retains the right to correct field
problems as it deems appropriate, with or without the concurrence of Banner. All
information about Product complaints shall be considered "Confidential
Information" under the terms of this Agreement.
6.2 Regulatory. Either party shall immediately notify the other party in
writing should it become aware of any defect or condition that renders any
lot(s) of Product supplied by Banner to SaSy in violation of the Banner
Manufacturing Requirements or the Act, or of a similar law of any jurisdiction
where the Product is sold. Banner shall share with SaSy (and SaSy shall share
with Banner only to the extent related to Banner's activities) all data on
confirmed lot specific Product complaints including, but not limited to,
complaints or information regarding performance and/or allegations or reports of
any negative effect from the use or misuse of such affected lot of Products as
soon as such data is available. Banner will provide reasonable and timely
assistance to SaSy in resolving customer complaints. SaSy shall have sole
responsibility and authority to interact directly with its customers in the
resolution of such complaints.
6.3 Adverse Reports. Banner will report to SaSy all data and/or information
pertaining to adverse reports on any lot of Product supplied by Banner for
distribution by SaSy which would have an adverse impact on performance of the
Products.
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6.4 Notices. Field notifications with respect to the Products, or any of
them shall be the responsibility of SaSy. All costs associated with such actions
shall be the responsibility of the party whose fault or omission necessitated
such action. Should there be a difference of opinion between Banner and SaSy
regarding a field notification, SaSy will exercise the right to notify its
customers without delay.
7. Term and Termination
7.1 Term; Renewal. This Agreement shall continue in effect for a period of
five (5) years following the date hereof and shall automatically renew for
successive renewal terms of two (2) years each unless either party gives written
notice of non-renewal at least twelve (12) months prior to the end of the
initial five-year term or any successive two-year renewal term, in which case
this Agreement shall automatically expire at the end of such term.
7.2 Termination. Either party shall have the right to terminate this
Agreement at any time by notice in writing to the other:
(a) If the other party commits a material breach of any of its
obligations herein and fails (i) where a remedy is reasonably possible, within
sixty (60) days after notice from the non-breaching party to remedy that breach.
(b) If the other party (i) applies for or consents to the appointment
of a receiver, trustee or liquidator of it or of its properties and assets, (ii)
admits in writing its inability to pay its debts as they mature, (iii) makes a
general assignment for the benefit of creditors, (iv) is adjudicated a bankrupt
or insolvent, (v) files a voluntary petition under the Federal Bankruptcy Code
or takes advantage of any insolvency, readjustment of debt, dissolution or
liquidation law or statute or files an answer admitting the material allegations
of a petition filed against it at any proceeding under any such law, or (vi) has
entered against it an order, judgment or decree issued by any court of competent
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jurisdiction approving a petition seeking reorganization of it or of its
properties and assets or appointing a receiver, trustee or liquidator of it.
(c) If the other party is prevented by reason of any circumstances
referred to in Section 9 of this Agreement from performing any of its
obligations hereunder for a continuous period of three (3) months.
7.3 Post Termination Obligation. Upon termination of this Agreement, SaSy
shall purchase from Banner all Products for which SaSy has outstanding firm
orders with Banner, and shall reimburse Banner for the actual costs of packaging
components used to make the Products that Banner cannot use after the
termination date. Banner shall return to SaSy at SaSy's expense (unless
termination is by SaSy pursuant to Section 7.2(a) and then at Banner's expense)
all Cores supplied by SaSy remaining in Banner's possession that are not needed
to complete SaSy's outstanding firm orders to the extent such components were to
be used for Product for which SaSy had submitted a purchase order.
8. Technical Agreement. Banner and SaSy agree to enter into a Technical
Agreement for the manufacture of the Product which will specify certain of the
parties' responsibilities for certain of the parties' manufacturing, compliance,
and regulatory matters, in substantially the form attached as Appendix B.
9. Force Majeure. Neither Banner nor SaSy shall be considered in default or be
liable to the other party for any delay in performance or for non-performance of
the terms of this Agreement caused by circumstances beyond the reasonable
control of such party, including but not limited to, acts of God, explosion,
fire, flood, earthquake or tremor, war, whether declared or not, accident, labor
strike or labor disturbances, sabotage, order or decrees of any court, or raw
material shortages, unavailability, or delay in delivery. A party claiming a
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right to be excused from performance under this Section shall immediately notify
the other party in writing of the extent of its inability to perform, which
notice shall specify the occurrence beyond its reasonable control that prevents
such performance. Such other party shall have the right to make alternative
arrangements during the period of the force majeure and, after 3 months, shall
have the right to terminate this Agreement.
10. Confidential Information.
10.1 Non-Disclosure. During the term of this Agreement and for a period
ending the later of (i) ten (10) years following the date hereof or (ii) five
(5) years following expiration or termination of this Agreement, SaSy and Banner
shall keep, and shall cause its respective affiliates, officers, directors,
employees and agents to keep, confidential all information proprietary to the
other party that has been acquired by it through its participation in the
negotiation and performance of this Agreement, and each shall use such
information solely for purposes of performing its obligations hereunder,
provided that the foregoing restriction shall not apply to information that (a)
is or hereafter becomes generally available to the public other than by reason
of any default with respect to confidentiality under this Agreement, (b) is
hereafter disclosed to such party by a third party who is not in default of any
confidentiality obligation to the other party (and such disclosure can be
properly demonstrated by the receiving party), (c) was previously or is
hereafter developed by or on behalf of such party, without reliance on
confidential information of the other party acquired prior to or after the date
hereof (and such can be properly demonstrated by the receiving party), (d) is
required to be disclosed in compliance with applicable laws or regulations or
order by a court or other governmental or regulatory agency or body having
competent jurisdiction, provided that reasonable measures shall be taken to
assure confidential treatment of such information, (e) is provided by such party
under appropriate terms and conditions, including confidentiality provisions
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equivalent to those in this Agreement, to third parties for consulting,
accounting, legal and similar purposes, (f) such party considers reasonably
necessary to disclose in connection with any action, suit or proceeding before
any court or any governmental or other regulatory agency or body or any arbitral
panel, or any audit or investigation brought by any governmental or other
regulatory agency or body, or the assertion of any claim against any insurer or
other third party. Each of SaSy and Banner recognizes that any violation of this
confidentiality provision may cause the other irreparable harm and agrees that
the other party shall be entitled, in addition to any other right or remedy it
may have, at law or in equity, to an injunction without the posting of any bond
or other security, enjoining the disclosing party, its affiliates and their
respective officers, directors, employees and agents from any violation or
potential violation of this Section 10.1. The terms of this Section 10.1 shall
survive any termination or expiration of this Agreement.
10.2 Limitations on Use. SaSy and Banner agree that they will not use the
confidential information of the other party for any purpose, other than carrying
out their respective obligations set forth in this Agreement, including without
limitation, publication of any kind, without the prior written consent of such
other party.
11. Indemnities and Insurance
11.1 Limitation of Liability. Subject to Sections 11.2 and 11.5, Banner's
liability for shipment of Product which fails to conform to Banner Manufacturing
Requirements shall be limited to the remedies set forth in Section 5.3. Neither
Banner nor SaSy shall be liable for any incidental, indirect, special or
consequential damages, or for lost profits, savings or revenues of any kind
resulting from the failure of any Products to meet the Banner Manufacturing
Requirements, the Core Specifications or for any other breach of this Agreement.
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Banner and SaSy (with respect to Cores) expressly disclaim any implied warranty
of fitness for a particular purpose.
11.2. By Banner. Banner shall indemnify and hold SaSy and its officers,
directors, shareholders, agents and employees harmless against any and all
liability, damage, loss, cost or expense resulting from any third party claim
made or suit brought against SaSy or such persons to the extent such claim (i)
is caused by Banner's negligence or willful misconduct, (ii) is caused by the
failure of the Products to conform to the Banner Manufacturing Requirements,
(iii) is caused by Banner's material breach of any terms of this Agreement
(including representations and warranties), or (iv) arises out of a claim of a
violation of any intellectual property rights, including but not limited to
trademark, copyright and/or trade dress, infringement of any patent or the
unauthorized use of a trade secret resulting from the material (excluding Cores)
or production process used by Banner in manufacturing Product. Upon the filing
of any such claim or suit, SaSy shall immediately notify Banner thereof, and
shall permit Banner at its cost to handle and control such claim or suit. SaSy
shall have the right to participate in the defense of such claim or suit at its
own expense.
11.3. By SaSy. SaSy shall indemnify and hold Banner and its officers,
directors, shareholders, agents and employees harmless against any and all
liability, damage, loss, cost or expense resulting from any third party claim
made or suit brought against Banner or such persons to the extent such claim (i)
is caused by SaSy's negligence or willful misconduct, (ii) is caused by SaSy's
material breach of any terms of this Agreement (including representations and
warranties) or arises out of a violation by SaSy of any applicable laws or
regulations, (iii) is caused by the Cores or any inherent Product properties or
defects, but excluding defects introduced into the Product by Banner in
violation of Banner's warranties or obligations hereunder, (iv) is otherwise
caused by or arises out of the marketing, distribution, sale or use of the
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Product by SaSy or any third party or (v) arises out of a claim of a violation
of any intellectual property rights, including but not limited to, trademark,
copyright, and/or trade dress, infringement of any patent, or the unauthorized
use of a trade secret resulting from the manufacture of the Products by Banner
based on information or technology furnished to Banner by SaSy. Upon the filing
of any such claim or suit, Banner shall immediately notify SaSy thereof and
shall permit SaSy at its cost to handle and control such claim or suit. Banner
shall have the right to participate in the defense of such claim or suit at its
own expense.
11.4 Claims. No claim shall be made or be enforceable against either party
under this Section 11 unless written notice thereof with full particulars is
received by the indemnifying party within sixty (60) days after the existence or
cause of the claim is found.
11.5 Recalls. The parties recognize that it is possible for recalls of the
Products to be necessary due to the action or inaction of one of the parties or
otherwise. The parties agree that SaSy shall have sole responsibility to effect
any recall. Banner shall only be responsible for costs of a recall and all
reasonable expenses associated therewith to the extent it is demonstrated to be
caused solely by a breach of Banner's obligations under this Agreement,
including non-conformance to Banner Manufacturing Requirements. In such event,
Banner shall use its commercially reasonable best efforts to replace the
recalled products within 60 days of notice of recall. In the event of any such
recall, regardless of the party whose action or inaction caused same, the party
discovering such action or inaction shall promptly notify the other party, and
the parties shall cooperate fully in the handling and disposition of such
recall. The parties agree that Banner shall have no responsibility for any
recall resulting from the Cores except to the extent any defect in the Cores is
caused by Banner, or from plans and specifications for products or other
materials provided by SaSy to Banner.
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11.6 Dispute Resolution.
11.6.1 SaSy and Banner agree to use all best efforts to resolve any and all
disputes arising out of or relating to this Agreement. If after thirty (30) days
following receipt of notice by one party from the other of a dispute under this
Agreement, the parties are unable to resolve the dispute, then the parties shall
each appoint a person of the rank of at least Vice President to personally
review the facts of the dispute and seek to resolve the matter by means of
direct discussions between the appointed representatives. If the appointed
representatives cannot reach agreement within thirty (30) days of notice of
appointment of such representatives, then the matter may be fully and finally
resolved in binding arbitration if mutually agreed to by both SaSy and Banner.
11.6.2 Arbitration shall be conducted in accordance with the commercial
arbitration rules then in effect of the American Arbitration Association (AAA).
Arbitration shall take place in New York, New York and shall be conducted by
three (3) arbitrators, one of whom shall be selected by each party, and the
third arbitrator by the two (2) arbitrators so selected, all within the time
limits established by the then existing rules of the AAA. To the maximum extent
permitted by applicable law, the decision of the arbitrators shall be final and
without appeal, and may be enforced in any court having jurisdiction over SaSy
or Banner, as the case may be or their current assets. Upon the request of a
party, the arbitration award shall specify the factual and legal basis for the
award. To the extent permitted by applicable law, the arbitrator(s) shall have
the power to award recovery of all costs and fees (including reasonable
attorneys' fees, administrative fees, and arbitrators' fees) to the prevailing
party. The arbitrator(s) may not award punitive damages. All other expenses,
including without limitation, legal fees shall be borne by the party incurring
such expenses, except that the parties shall divide equally the fees and
expenses of the arbitrators unless otherwise determined by the arbitrators.
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11.6.3 Notwithstanding the foregoing, if either SaSy or Banner does not
agree to binding arbitration, then either party may seek injunctive or other
relief from a court of law.
11.7 Insurance. Each party shall obtain, at its expense, insurance
coverage, including Product Liability Insurance, on Products with liability
limitations of five million dollars ($5,000,000) per occurrence and ten million
dollars ($10,000,000) in the aggregate. Each party shall name the other party as
additional insured on all such policies. Such insurance company shall have a
rating of at least A- (minus) from A.M. Best.
11.8 Third Party Rights. Banner represents and warrants that the
manufacture of the Product or any component thereof will not as a result of the
acts or omissions of Banner or Banner's agents, representatives or independent
contractors infringe any rights of third parties; provided, that Banner makes no
representations or warranties regarding the Cores.
12. Miscellaneous
12.1 Title; Trademarks. Title to all Banner know-how, technology and other
Banner intellectual property relating to the Softlet(TM) technology and gelatin
shell formulations for enrobing the Cores will remain with Banner; and title to
all know-how, technology and intellectual property relating to the Cores shall
remain with SaSy. SaSy shall own the Product manufactured by Banner pursuant to
this Agreement. Except as required by a governmental authority or applicable
laws or regulations, SaSy agrees that it will not use the Banner name and/or
Banner's trademark in any advertising, promotions, marketing, and/or labeling of
the Products, without the prior written consent of Banner. SaSy shall have the
right to use Banner's trademark "Soflet(TM)" and related logo and reference the
applicable patents of Banner on SaSy's packaging, advertising, product brochures
and trade dress, provided SaSy obtains Banner's prior approval of the proposed
manner of use of such trademark and logo and patent references on such
packaging, advertising, product brochures and trade dress.
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12.2 Records/Inspection.
(a) SaSy shall have the right, at reasonable intervals and on
reasonable (at least ten (10) business days) prior notice and during normal
business hours, to inspect Banner's manufacturing, laboratory, packaging and
warehousing facilities used in the manufacture, packaging, storage, testing,
shipping and receiving of the Products or their components. The frequency and
extent of routine inspections shall be no more than once per calendar year or
upon just cause as mutually agreed by the parties.
(b) SaSy shall have the right, upon prior reasonable notice to Banner
and during normal business hours, to examine all batch production and QA/QC
records related to the Products kept by Banner and to request and receive
reasonable samples of raw materials, packaging materials and finished Products.
(c) During the term of this Agreement, Banner shall promptly notify
SaSy of any inspections by the FDA, or any federal, state or local government
health agency, of the facilities where the Products are manufactured and
packaged and shall thereupon furnish SaSy with copies of all government health
agency reports and/or other documents (including responses to the FDA) relating
to such inspections where the inspections involve or may involve the Products,
the components or active ingredients (Cores) of the Products, the manufacture of
the Products, or the premises used to process and ship the Products; provided,
that Banner shall not be required to furnish SaSy any materials that Banner
considers to be proprietary or confidential to it. If such inspections are
scheduled or conducted with advance notice, Banner shall so advise SaSy and
unless there is a legal prohibition against doing so, SaSy shall have the option
to be present during the inspections. Banner shall provide SaSy copies of any
Banner correspondence relating to the Products submitted to any government
agency.
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(d) During the term of this Agreement, each party shall report
promptly to the other any significant information it may receive concerning any
defects, adverse reactions and unexpected side effects, if reasonably believed
to be related to the Products.
(e) Banner shall keep records of the manufacture, testing and shipping
of the Products, and retain samples of such Products in order to comply with
applicable regulations as well as to assist with resolving product complaints
and other similar investigations. Copies of such records and samples shall be
made available to SaSy upon its request and shall be retained by Banner and be
available to SaSy for a period of one (1) year after the expiration dates of the
bulk packaged batch, or longer if required by law.
12.3 Governing Law; Jurisdiction. This Agreement shall be governed and
construed in all respects by and under the laws of New York.
12.4 Successors and Assigns. Neither party may assign this Agreement or any
rights hereunder in any manner, whether by virtue of law or otherwise, without
the prior written consent of the other party (which consent shall not be
unreasonably withheld or delayed), except that Banner may assign part or all of
its responsibilities and obligations under this Agreement to one or more
wholly-owned subsidiaries of Banner provided the assigning party remains jointly
and severally liable for performance hereunder. Notwithstanding the foregoing,
either party may assign this Agreement and its rights, subject to its
obligations, hereunder to any assignee in connection with the transfer of all or
substantially all of its business or assets relating to the Product or the Cores
subject to the prior consent of the other party, which consent shall not be
unreasonably withheld, provided that either party may withhold consent in its
sole discretion to a proposed assignment to an entity with which it competes. It
is understood that in no event shall Banner transfer the manufacture of the
Product hereunder to any other Banner Facility without the consent of SaSy,
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which consent shall not be unreasonably withheld. Any increased shipping
expenses resulting from such transfer shall be borne by Banner.
12.5 Banner Representations. Banner represents and warrants that:
(i) the manufacture of the Product or any component thereof will not
as a result of the acts or omissions of Banner or Banner's
agents, representatives or independent contractors infringe any
rights, including patent rights of third parties; and (i) the
trademark "Soflet(TM)" is owned by or licensed to Banner and may
be lawfully used by SaSy within the United States in the manner
set forth in Section 12.1
(ii) the Product has been gelatin enrobed using the patented
Soflet(TM)technology described in U.S. Patents 5,146,730 and
5,459,983 (the "Patents');
(iii) there is no pending litigation or, to Banner's knowledge,
threatened litigation involving the Patents; and
(iv) the Patents are free and clear of any lien, encumbrance or
security interest.
12.6 Entire Agreement. This Agreement and all attachments, including
Appendices and Exhibits, hereto which are referenced herein set forth the entire
agreement between the parties relating to the subject matter contained herein
and may not be modified, amended or discharged except as expressly stated in
this Agreement or by a written agreement signed by the parties hereto.
Notwithstanding the foregoing, any confidentiality agreement previously executed
between the parties shall remain in effect in accordance with its terms.
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12.7 Severability. The provisions of this Agreement shall be deemed
separate. Therefore, if any part of this Agreement is rendered void, invalid or
unenforceable, such rendering shall not affect the validity and enforceability
of the remainder of this Agreement unless the part or parts which are void,
invalid or unenforceable shall substantially impair the value of the whole
Agreement to either party.
12.8 Notices. Unless otherwise stated in this Agreement, any and all
communications required as provided for in this Agreement shall be in writing
and sent by (i) Certified or Registered Mail, postage prepaid, return receipt
requested, (ii) facsimile followed by a letter of confirmation or (iii) by an
express overnight courier service (for example, Federal Express or Airborne),
postage prepaid, return receipt requested and addressed as set forth below.
Notices shall be deemed given three (3) days following mailing by Certified or
Registered Mail, and one (1) day following the date sent by facsimile or
overnight courier.
Any notice to be given to Banner shall be addressed to:
Banner Pharmacaps, Inc.
0000 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Vice President,
Pharmaceutical Sales and Marketing
With a copy to:
Banner Pharmacaps, Inc.
0000 Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Senior Vice President,
Legal and Public Affairs
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Any notice to be given to SaSy-Synthelabo shall be addressed to:
Sanofi-Synthelabo Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Vice President and Chief Financial Officer
With a copy to:
Sanofi-Synthelabo Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx
Senior Vice President and General Counsel
Either party may give written notice of a change of address, and after such
notice has been received, any notice thereafter shall be given to such party as
above provided at such changed address.
12.9. Headings. The headings used in this Agreement are for the convenience
of the parties only, and shall not be considered in interpreting or applying the
provisions of this Agreement.
12.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall be one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
BANNER PHARMACAPS INC. SANOFI-SYNTHELABO INC.
("Banner") ("SaSy")
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxx
------------------------------ --------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx Xxxxx
------------------------------ --------------------------------
Title: President Title: V.P. & C.F.O.
------------------------------ --------------------------------
Date: 8-2-01 Date: 8-2-01
------------------------------ --------------------------------
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxx
--------------------------------
Title: Sr. V.P. and General Counsel
--------------------------------
Date: 8-2-01
--------------------------------
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APPENDIX A
CORES / SPECIFICATIONS
00
XXXXXXXX X
TECHNICAL AGREEMENT
29
1413384
