SALES DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into as of the day of
, 1996, by and between XXXXXXXXXX LABORATORIES, INC.,
a Texas corporation ("Xxxxxxxxxx"), and FAULDING PHARMACEUTICALS/XXXXX XXXX
LABORATORIES, an Australian corporation ("Faulding").
W I T N E S S E T H :
WHEREAS, Xxxxxxxxxx is engaged in the business of manufacturing, selling and
distributing certain pharmaceutical products and is desirous of establishing
a competent and exclusive distribution source for sales of such products in
Australia and New Zealand (defined in Article I hereof as the Territory);
and
WHEREAS, Faulding is desirous of distributing such products in the Territory
and is willing and able to provide a competent distribution organization in
the Territory, and Faulding desires to be Xxxxxxxxxx'x sales distributor for
such products in the Territory;
NOW, THEREFORE, the parties hereto, in consideration of the premises and
mutual covenants and undertakings herein contained, agree as follows:
Article 1.Definitions
1.1As used in this Agreement, the following terms shall have the meanings
specified in this Article 1.1:
(a)"Products" shall mean the wound and skin care products manufactured by
or for Xxxxxxxxxx set forth on Exhibit A hereto. Xxxxxxxxxx will provide
a ninety (90) day notice to Faulding on its intent to add or discontinue
Products to Exhibit A. No Product shall be discontinued or removed from
Exhibit A during the term of this Agreement unless agreed to in writing by
both parties.
(b)"Territory" shall mean the following countries: Australia and New
Zealand.
Article 2.Appointment
2.1 Subject to the terms and conditions of this Agreement, Xxxxxxxxxx hereby
appoints Faulding as Xxxxxxxxxx'x exclusive sales distributor in the
Territory for the sale of Products, and Faulding hereby accepts such
appointment. As sales distributor in the Territory, Faulding shall, subject
to the terms and conditions of this Agreement, have the right to sell
Products in the Territory, but shall have no right to sell Products outside
the Territory. During the term of this Agreement, Xxxxxxxxxx agrees not to
appoint any other persons as distributors for the Products in the Territory,
provided in this Agreement.
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2.2a. At standards mutually agreeable to both Faulding and Xxxxxxxxxx, and
at Faulding's sole expense, Faulding agrees to (a) make and maintain all
declarations, filings, and registrations with, and obtain all approvals and
authorizations from, governmental and regulatory authorities required to be
made or obtained in connection with the promotion, marketing, sale or
distribution of the Products in the Territory, (b) devote, at minimum,
efforts consistent with those utilized in its own product line to the
diligent promotion, marketing, sale and distribution of the Products in the
Territory, and (c) provide and maintain a competent organization for the
promotion, marketing, sale and distribution of the Products in the
Territory. In a manner reasonably satisfactory to Xxxxxxxxxx, and at
Faulding's sole expense, Faulding agrees to (a) assure competent and prompt
handling of inquiries, orders, shipments, xxxxxxxx and collections, and
returns of or with respect to the Products and careful attention to
customers' requirements for all Products, and (b) promptly assign back to
Xxxxxxxxxx any product registrations in the Territory upon termination of
Agreement.
2.2x. Xxxxxxxxxx agrees to provide to Faulding all data, information and
results of additional tests ("Data") it possesses which may be necessary to
obtain approval of and complete and maintain registration. In the event
Xxxxxxxxxx does not possess such Data, Xxxxxxxxxx shall attempt to obtain
the same and provide it to Faulding. Xxxxxxxxxx is not obligated, however,
to obtain and provide such Data if, in Xxxxxxxxxx'x opinion, the cost of
such is prohibitive or if the Data appears impossible or unreasonable to
obtain.
2.2x.Xxxxxxxxxx agrees that if it terminates this Agreement without cause
Xxxxxxxxxx will reimburse Faulding for all appropriate fees and expenses
incurred by Faulding in procuring registration of the Products.
2.3 Xxxxxxxxxx will provide Faulding with such (i) reasonable sales personnel
training in relation to the Products in Irving, Texas or a mutually agreed
upon location, and (ii) promotional Product literature of Xxxxxxxxxx, as
Faulding may request from time to time. Xxxxxxxxxx is not obligated to
travel to Australia more than one time to provide such sales training.
Faulding agrees to pay for one return business class flight for Xxxxxxxxxx
from the United States or Australia; and to reimburse Xxxxxxxxxx at a per
diem rate of $100.00 for any additional days over two per trip; however,
Faulding has no obligation to share any other expenses.. If any additional
training in or travel to Australia is requested of Xxxxxxxxxx or by
Faulding, the Parties shall mutually agree in writing on the terms of such
travel and expenses to be shared, but under no circumstances is Xxxxxxxxxx
obligated to provide such additional training in Australia. Xxxxxxxxxx'X
expenses incurred in relation to said sales training shall not exceed 5% of
projected sales of the Product as set forth in Faulding's sales forecast for
the first 12 month period of the term of this Agreement.
2.4a During the term of this Agreement, Faulding shall be considered an
independent contractor and shall not be considered a partner, employee,
agent or servant of Xxxxxxxxxx. As such, Faulding has no authority of any
nature whatsoever to bind Xxxxxxxxxx or incur any liability for or on behalf
of Xxxxxxxxxx or to represent itself as anything other than a sales
distributor and independent contractor.
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2.4b Xxxxxxxxxx shall xxxxx to Faulding the first right of refusal to
additional products Xxxxxxxxxx develops or acquires within or for the wound
dressing market. From time to time, as products become available,
Xxxxxxxxxx shall present new products to Faulding for evaluation. Faulding
shall have ninety days to decide whether it desires to include such products
under this Agreement. If Faulding decides not to accept these products or
fails to reply within the ninety days, then Xxxxxxxxxx shall be free to
market or distribute the products as it sees fit. If Faulding desires the
product, Xxxxxxxxxx and Faulding shall commence good faith negotiations
relative to price and other pertinent terms associated with the sale. If
the parties are unable to reach agreement on these terms within thirty days
or within an extended time period mutually agreed upon between the Parties,
then Faulding's first right of refusal shall automatically terminate with
regard to that particular product. Xxxxxxxxxx agrees that it shall not
offer distribution rights to such additional products to any third party at
more favorable terms without first offering, for a period of sixty days,
those terms to Faulding.
2.4c When and where appropriate, Faulding shall incorporate or request
incorporation of Xxxxxxxxxx'x complex carbohydrates into appropriate
complimentary wound care products such as alginates, hydrocolloids and other
composite dressings.
Article 3. Certain Performance Requirements
3.1 Faulding agrees to promote, market, sell and distribute the Products only
to customers and potential customers within the Territory for ultimate use
within the Territory. Faulding will not, under any circumstances, either
directly or indirectly through third parties, knowingly promote, market,
sell, distribute or ship Products within or to, or for ultimate use within,
the United States or any place outside the Territory.
3.2 In order to assure Xxxxxxxxxx that Faulding is not repatriating Products
to the United States or elsewhere outside the Territory, Faulding agrees
that:
(a) Faulding will send to Xxxxxxxxxx a quarterly sales report on the number
of units of each Product sold; and
(b) Faulding will send to Xxxxxxxxxx a quarterly inventory report of the
Products.
3.3 Faulding shall maintain a sufficient inventory of Products to assure an
adequate supply of Products to serve all its market segments. Faulding's
inventory maintenance of the Products shall meet all storage and other
required standards as mandated by applicable governmental authorities. All
such inventory shall be subject to annual inspection by a maximum of two
Xxxxxxxxxx employees or agents. Xxxxxxxxxx shall provide Faulding 72 hours
written notice of inspection and such inspection shall be made during normal
business hours.
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3.4 Faulding shall in no way be responsible for any tax in the nature of an
income tax imposed on Xxxxxxxxxx. Faulding shall be responsible for and
shall collect all governmental and regulatory sales and other taxes, charges
and fees that may be due and owing upon sales by Faulding of Products. Upon
written request from Faulding, Xxxxxxxxxx shall provide Faulding with such
certificates or other documents as may be reasonably required to establish
any applicable exemptions from the collection of such taxes, charges and
fees.
3.5 All Products shall be packaged and delivered by Xxxxxxxxxx to Faulding.
All Products shall be labeled, advertised, marketed, sold and distributed
by Faulding in compliance with the rules and regulations of the applicable
governmental authority within the Territory, as amended from time to time,
and (ii) all other applicable laws, rules and regulations. Xxxxxxxxxx
agrees to consult with Faulding regarding the materials and design to be
utilized in the packaging of the Products. Faulding shall pay all expenses
associated with any alterations to the packaging and labeling of the
Products which deviate from Carrington's standard packaging materials,
designs, methods and/or procedures and the Parties shall agree on minimum
production runs for such custom labels.
3.6 Faulding agrees not to make, or permit any of its employees, agents or
representatives to make, any claims of any properties or results relating
to any Product, unless such claims have received written approval from
Xxxxxxxxxx or from the applicable governmental authorities.
3.7 Faulding agrees to provide Xxxxxxxxxx its general marketing strategy,
prior to the labeling, advertising, or marketing of the Products. If
Xxxxxxxxxx does not respond to Faulding within three business days of
Xxxxxxxxxx'x receipt of said material, then Faulding shall assume said
material has been deemed acceptable. Either upon Xxxxxxxxxx'x written
approval of such marketing plan or in the event the material is deemed
accepted as set forth above, Faulding shall have sole discretion on the
details and implementation of said plan and, consequently, on its strategy
in achieving the minimum sales volume forecasted.
3.8 The Parties agree that each shall have the right to inspect the other's
facilities two times each year to ensure compliance with the provisions of
this Agreement. Each Party agrees to provide the other three business days
notice of inspection and such inspection shall be made by a maximum of two
of the Party's employees or agents during each visit.
3.9 Faulding will actively and aggressively promote the sale of the Products
to all customers and potential customers within the Territory. Faulding's
wound care division or operation agrees not to market, sell or distribute
to any customers or potential customers in the Territory without ninety (90)
days written notice to Xxxxxxxxxx, any competitive hydrogel product.
Xxxxxxxxxx acknowledges that Faulding's Healthcare and Distribution
Operations may market, sell, and distribute competitive products.
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3.10 Faulding represents that its books, records and accounts pertaining to
all its operations hereunder are complete and accurate in all material
respects and have been maintained in accordance with sound and generally
accepted accounting principles. Faulding's auditor shall hand over to
Xxxxxxxxxx at the end of each 12-month period during the term of this
Agreement a declaration that the accounts as rendered are correct.
Xxxxxxxxxx shall have the right to have such books, records and accounts
examined by a qualified accountant nominated by Xxxxxxxxxx at Xxxxxxxxxx'x
expense.
Article 4. Sale of Products by Xxxxxxxxxx to Faulding
4.1 Subject to the terms and conditions of this Agreement, including
specifically Article 4.6 hereof, Xxxxxxxxxx shall sell to Faulding its
requirements for the Products at a price for each Product (the "Contract
Price"). For orders placed by Faulding during the first 12-month period of
the term of this Agreement, the Contract Prices for the Products listed on
Exhibit A are set forth on such exhibit opposite each Product. At least 90
days prior to the end of each 12-month period of the term of this Agreement,
(a) Faulding shall provide in writing to Xxxxxxxxxx both a sales forecast
and purchase forecast for the Products for the following 12-month period,
and (b) the parties shall commence good faith negotiations to determine and
agree upon the Contract Prices for Products for the next 12-month period of
the term. During any twelve (12) month period Xxxxxxxxxx reserves the right
to change its distributor prices for Products as set forth in the Published
Price List if mutually agreed to by Faulding. Such cost increases shall be
no greater than the U.S. inflation rate plus 5% of said rate.
4.2 As consideration for its appointment as an exclusive sales distributor
entitled to a Product discount, Faulding agrees to purchase from Xxxxxxxxxx,
during each 12-month period of the term of this Agreement, commencing with
the 12-month period beginning July 1, 1997 through June 30, 1998, at the
Contract Price, a specified minimum aggregate dollar amount (based on the
Contract Price) of the Products (the "Specified Minimum Amount"). For the
first 12-month period of the term of this Agreement there shall be no
Specified Minimum Amount. The Specified Minimum Amounts for each subsequent
12-month period shall be determined by mutual agreement of the parties prior
to the beginning of such period based on Faulding's reasonable, good faith
projections of future sales growth and such other factors as the parties may
deem relevant.
4.3a Faulding shall order Products by submitting a purchase order to
Xxxxxxxxxx describing the type and quantity of the Products to be purchased.
All orders are subject to acceptance by Xxxxxxxxxx. All purchases shall be
spaced in a reasonable manner. If Xxxxxxxxxx accepts the order, Xxxxxxxxxx
will invoice Faulding upon shipment of the Products. Unless otherwise
agreed, Faulding shall pay all invoices in full within 30 days from the date
of receipt thereof. All sales and payments shall be made, and all orders
shall be accepted, in the State of Texas.
4.3b In the event Faulding places a purchase order for more than 120% of its
most recent sales forecast, and Xxxxxxxxxx agrees to accept such purchase
order, Xxxxxxxxxx agrees (1) to supply Faulding up to 120% of the amount in
the forecast, subject to the provisions in Articles 4.4 and 4.6, and (2)
to use all reasonable efforts to supply Faulding the complete amount of
Products ordered.
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4.4 Xxxxxxxxxx shall not be obligated to ship Products to Faulding at any
time (i) when Faulding is otherwise in material breach of this Agreement,
or (ii) when payment of an undisputed amount owed by Faulding is overdue.
If payment is overdue because of a dispute, the undisputed amount is still
due. For example, an invoiced shipment of 100 units is sent but only 80
units arrive, then Faulding shall pay for the 80 units actually received and
the disputed 20 units shall be resolved separately.
4.5 All shipments of Products to Faulding will be packaged in accordance with
Xxxxxxxxxx'x standard packaging procedures and shipped per Xxxxxxxxxx'x
existing distribution policy. All Contract Prices are F.O.B. (invoice price
includes Seller's expense for delivery to the named destination),
Xxxxxxxxxx'x facility, Dallas, Texas for single shipments totaling less than
$40,000.00 U.S.; otherwise, for single orders greater than $40,000.00 U.S.
the Contract Prices shall be C.I.F. (invoice price includes cost, insurance
and freight). The shipping point shall be Faulding's facility, Xxxxxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxxxx. Ownership of and title to Products
and all risks of loss with respect thereto shall pass to Faulding upon
delivery of such Products by Xxxxxxxxxx to the carrier at the designated
delivery (F.O.B. or C.I.F.) point. Deliveries of Products shall be made by
Xxxxxxxxxx under normal trade conditions in the usual and customary manner.
4.6 Xxxxxxxxxx shall use its reasonable best efforts to ensure availability
of all Products ordered by Faulding under this Agreement. However, if
necessary in the best judgment of Carrington, Carrington may allocate its
available supply of Products among all its customers, distributors or other
purchasers, including Faulding, on such basis as it shall deem reasonable,
practicable and equitable, without liability for any failure of performance
or lost sales which may result from such allocations.
4.7a Xxxxxxxxxx accepts liability for defective products and agrees to
replace such defective Products should they occur with new Products. Except
as specifically set forth in this Agreement and, except as may be expressly
stated by Xxxxxxxxxx on the Product or on Xxxxxxxxxx'X packaging, or in
Xxxxxxxxxx'X information accompanying the Product, at the time of shipment
to Faulding hereunder, XXXXXXXXXX MAKES NO REPRESENTATIONS OR WARRANTIES OF
ANY KIND WITH RESPECT TO THE PRODUCTS, EXPRESS OR IMPLIED, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
XXXXXXXXXX NEITHER ASSUMES NOR AUTHORIZES ANYONE TO ASSUME FOR IT ANY
OBLIGATION OR LIABILITY IN CONNECTION WITH THE PRODUCTS. Faulding shall not
make any representation or warranty with respect to the Products that is
more extensive than, or inconsistent with, the limited warranty set forth
in this Article 4.7 or that is inconsistent with the policies or
publications of Xxxxxxxxxx relating to the Products.
4.7b SUBJECT TO ALL OTHER PARAGRAPHS IN THIS ARTICLE 4.7, FAULDING'S
EXCLUSIVE REMEDY FOR BREACH OF ANY WARRANTY HEREUNDER IS THE DELIVERY BY
XXXXXXXXXX OF ADDITIONAL QUANTITIES OF THE PRODUCTS IN REPLACEMENT OF THE
NON-CONFORMING PRODUCTS OR THE REFUND OF THE CONTRACT PRICE FOR THE PRODUCTS
THAT ARE COVERED BY THE WARRANTY, AT FAULDING'S OPTION. XXXXXXXXXX SHALL
HAVE NO OTHER OBLIGATION OR LIABILITY FOR DAMAGES TO FAULDING OR ANY OTHER
PERSON OF ANY TYPE, INCLUDING, BUT NOT LIMITED TO, INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES, LOSS OF PROFITS OR OTHER COMMERCIAL OR ECONOMIC LOSS,
OR ANY OTHER LOSS, DAMAGE OR EXPENSE, ARISING OUT OF OR IN CONNECTION WITH
THE SALE, USE, LOSS OF USE, NONPERFORMANCE OR REPLACEMENT OF THE PRODUCTS.
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4.7c XXXXXXXXXX SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS FAULDING AND
FAULDING'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM AND
AGAINST ALL CLAIMS, LIABILITIES, DEMANDS, DAMAGES, EXPENSES AND LOSSES
(INCLUDING REASONABLE ATTORNEY'S FEES AND EXPENSES) ARISING OUT OF OR
CONNECTED WITH ANY USE OF XXXXXXXXXX'X TRADEMARKS OR THE SALE OF
XXXXXXXXXX'X PRODUCTS BY FAULDING, ANY BREACH BY XXXXXXXXXX OF ANY OF ITS
REPRESENTATIONS, WARRANTIES OR COVENANTS UNDER THIS AGREEMENT OR ANY ACTS
OR OMISSIONS ON THE PART OF XXXXXXXXXX OR ITS AGENTS, SERVANTS OR EMPLOYEES
WHICH ARE OUTSIDE OR BEYOND XXXXXXXXXX'X AUTHORIZATION GRANTED HEREIN;
PROVIDED, THAT THIS INDEMNITY SHALL NOT EXTEND TO ANY SUCH LOSS, DAMAGE,
COSTS OR OTHER EXPENSES ARISING OUT OF ANY ACT OR OMISSION OF FAULDING, ITS
OFFICERS, SERVANTS OR AGENTS IN CONNECTION WITH ITS OBLIGATIONS UNDER THIS
AGREEMENT.
4.7d FAULDING SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS XXXXXXXXXX AND
CARRINGTON'S AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM AND
AGAINST ALL CLAIMS, LIABILITIES, DEMANDS, DAMAGES, EXPENSES AND LOSSES
(INCLUDING REASONABLE ATTORNEY'S FEES AND EXPENSES) ARISING OUT OF OR
CONNECTED WITH ANY USE OF FAULDING'S TRADEMARKS OR THE SALE OF XXXXXXXXXX'X
PRODUCTS BY FAULDING, ANY BREACH BY FAULDING OF ANY OF ITS REPRESENTATIONS,
WARRANTIES OR COVENANTS UNDER THIS AGREEMENT OR ANY ACTS OR OMISSIONS ON THE
PART OF FAULDING OR ITS AGENTS, SERVANTS OR EMPLOYEES WHICH ARE OUTSIDE OR
BEYOND FAULDING'S AUTHORIZATION GRANTED HEREIN; PROVIDED, THAT THIS
INDEMNITY SHALL NOT EXTEND TO ANY SUCH LOSS, DAMAGE, COSTS OR OTHER EXPENSES
ARISING OUT OF ANY ACT OR OMISSION OF XXXXXXXXXX, ITS OFFICERS, SERVANTS OR
AGENTS IN CONNECTION WITH ITS OBLIGATIONS UNDER THIS AGREEMENT.
4.7eCARRINGTON SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS FAULDING AND ITS
OFFICERS, SERVANTS AND AGENTS AGAINST ANY AND ALL LOSS, DAMAGE, COSTS OR
OTHER EXPENSES (EXCEPT CONSEQUENTIAL LOSS SUCH AS LOSS OF PROFITS OR
BUSINESS) ARISING OUT OF:
(1) THE SUPPLY, SALE, USE OR ANY DEFECT IN THE PRODUCTS SOLD BY FAULDING AND,
WITHOUT LIMITATION, EXTENDS TO: (a) ANY FAILURE OF THE PRODUCTS TO COMPLY
WITH XXXXXXXXXX'X SPECIFICATIONS, AND (b) ANY FAILURE OF THE PRODUCTS TO
COMPLY WITH THE SPECIFICATIONS IN THE REGISTRATIONS; OR
(2) AN INFRINGEMENT ON THIRD PARTY INTELLECTUAL PROPERTY RIGHTS AS A RESULT
OF THE USE OF XXXXXXXXXX'X PRODUCTS, PATENTS OR TRADEMARKS IN THE TERRITORY,
PROVIDED THAT THIS INDEMNITY SHALL NOT EXTEND TO ANY SUCH LOSS, DAMAGES,
COSTS OR OTHER EXPENSES ARISING OUT OF ANY ACT OR OMISSION OF FAULDING, ITS
OFFICERS, SERVANTS OR AGENTS IN CONNECTION WITH ITS OBLIGATIONS UNDER THIS
AGREEMENT.
4.7f XXXXXXXXXX SHALL, IN SUPPORT OF THE ABOVE INDEMNITY, WITHOUT LIMITING
XXXXXXXXXX'X LIABILITY ARISING FROM THE PRECEDING, EFFECT AND MAINTAIN SUCH
INSURANCE AS FAULDING MAY REASONABLY REQUEST NOTING THE INTEREST TO FAULDING
THEREON IN AN AMOUNT OF $3,000,000.00 PER CLAIM WITH A REPUTABLE AND SOLVENT
INSURANCE COMPANY. XXXXXXXXXX SHALL, FROM TIME TO TIME, UPON REQUEST FROM
FAULDING, PROVIDE FAULDING WITH EVIDENCE THAT THE INSURANCE AS AFORESAID HAS
BEEN EFFECTED AND PROVIDE COPIES OF THE RELEVANT INSURANCE POLICY TO
FAULDING.
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4.8 Credits on defective Products by Faulding shall include importation and
shipment expenses and will be calculated by Xxxxxxxxxx based on the original
Contract Price of the items returned, whether identified by lot number or
another method. Xxxxxxxxxx shall provide Faulding a copy of its Insurance
Certificate and shall include Faulding thereunder.
4.9 Each Party shall promptly notify the other of all material information
and complaints to its knowledge or coming into its possession regarding the
Products, concerning, without limitation, unexpected side effects, injury,
toxicity or sensitivity reactions. Faulding shall maintain a file for all
such complaints and Faulding shall investigate complaints and, at its sole
discretion, shall decide on the action to be taken after reasonably
discussing the situation with Xxxxxxxxxx. Xxxxxxxxxx agrees to assist
Faulding in the investigation of such complaints as Faulding may reasonably
request from time to time.
Article 5. Term and Termination
5.1 The term of this Agreement shall be for a period of five years from the
effective date of this Agreement. After such term, this Agreement shall be
automatically renewed for a term of five years, every five years, during
the effective life of the Product(S), unless the parties mutually agree in
writing to terminate this Agreement. Notwithstanding the foregoing, this
Agreement may be terminated in accordance with the provisions of this
Article 5.
5.2a Xxxxxxxxxx shall have the absolute right to terminate this Agreement if
Faulding fails to perform or breaches, in any material respect, any of the
terms or provisions of this Agreement. Without limiting the events which
shall be deemed to constitute a breach or material breach of this Agreement
by Faulding, Faulding understands and agrees that it shall be in material
breach of this Agreement, and Xxxxxxxxxx shall have the right to terminate
this Agreement under this Article 5.2, if:
(I) Faulding fails or refuses to pay to Xxxxxxxxxx any sum when due;
(ii) Faulding breaches any provision of Article 2.2, 3.1, 3.5, 3.7, 3.9, 4.3,
4.7, 6 or 7; or
(iii) Faulding fails to purchase the Specified Minimum Amount of Product for
any required period starting in year two (2).
Provided, however, in the event of a failure by Faulding to meet agreed upon
minimums, Faulding may continue to distribute the Products for an additional
year, if Faulding meets agreed upon purchases for that subsequent year. In
any event, Xxxxxxxxxx reserves the right to purchase such remaining
inventory from Faulding at the Contract Price.
5.2b Faulding shall have the absolute right to terminate this Agreement,
either in its entirety or with respect to particular Products or particular
countries in the Territory where: (i) the attempt to obtain Product(s)
registration fails, or (ii) a Serious Adverse Health Event occurs, or (iii)
registrations are withdrawn from the Territory.
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5.2c In the event either Party fails to perform or breaches the terms of this
Agreement as set forth in Article 5.2a, the other Party agrees to provide
the breaching Party notice of its intention to terminate this Agreement.
The breaching Party shall have sixty days from the date of receipt of such
notice to remedy its breach and/or failure to perform in accordance with the
terms and provisions of this Agreement.
5.3 Each Party shall have the absolute right to terminate this Agreement in
the event the Party shall become insolvent, or if there is instituted by or
against the other Party procedures in bankruptcy, or under insolvency laws
or for reorganization, receivership or dissolution, or if the other Party
loses any franchise or license to operate its business as presently
conducted in any part of the Territory.
5.4 This Agreement shall automatically terminate effective at the end of any
12-month period of the term of this Agreement referred to in Articles 4.1
and 4.2 hereof if the parties are unable to agree upon the Contract Prices
or the Specified Minimum Amount for the next 12-month period of the term.
Xxxxxxxxxx shall give Faulding six months notice of its intent to terminate.
The Parties agree that contract Prices or Specified Minimum Amounts shall
not be unreasonably increased or decreased and shall be based on reasonable,
good faith projections of future sales growth and other relevant market,
competitive and regulatory factors discussed between the Parties.
5.5 During the one-year period following termination of this Agreement, any
inventory of Products held by Faulding at the termination of this Agreement
may be sold by Faulding to customers in the Territory in the ordinary
course; provided, however, that for the period required to liquidate such
inventory, all of the provisions contained herein governing Faulding's
performance obligations and Xxxxxxxxxx'x rights shall remain in effect. In
order to accelerate the liquidation of any such inventory, Xxxxxxxxxx shall
have the option, but not the obligation, to purchase all or any part of such
remaining inventory at the price at which the inventory was originally sold
by Xxxxxxxxxx to Faulding including importation and shipping.
5.6 The termination of this Agreement shall not impair the rights or
obligations of either party hereto which shall have accrued hereunder prior
to such termination. The provisions of Articles 4.7, 6, 7 and 15 and the
rights and obligations of the parties thereunder shall survive the
termination of this Agreement for a period of one (1) year.
Article 6. Trademarks and Trade Names
6.1 All Xxxxxxxxxx trademarks, trade names, service marks, logos and
derivatives thereof relating to the Products (the "Trademarks"), and all
patents, technology and other intellectual property relating to the
Products, are the sole and exclusive property of Xxxxxxxxxx or its
affiliates. Xxxxxxxxxx hereby grants Faulding permission to use the
Trademarks for the limited purpose of performing its obligations under this
Agreement. Xxxxxxxxxx agrees to disclose and make available to Faulding any
relevant and appropriate intellectual property information regarding the
Products for the limited purposes set forth in this Agreement. Xxxxxxxxxx
may, in its sole discretion after consultation with Faulding, modify or
discontinue the use of any Trademark and/or use one or more additional or
substitute marks or names, and Faulding shall be obligated to do the same.
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6.2 It shall be the sole responsibility of Xxxxxxxxxx, at its sole expense,
to keep in force and maintain the Trademarks in the Territory by paying all
necessary fees throughout the term of this Agreement. Faulding agrees to
use the Trademarks in full compliance with the rules prescribed from time
to time by Xxxxxxxxxx. Faulding may not use any Trademark as part of any
corporate name or with any prefix, suffix or other modifying words, terms,
designs or symbols. In addition, Faulding may not use any Trademark in
connection with the sale of any unauthorized product or service or in any
other manner not explicitly authorized in writing by Xxxxxxxxxx.
6.3 Xxxxxxxxxx hereby grants to Faulding the option to include Faulding's
trademark on the Products. In the event of any infringement of, or
challenge to, the use of any Trademark or of any Faulding trademark, the
informed party is obligated to notify the other party immediately. The
challenged party shall investigate any alleged violation and, if necessary,
will take appropriate legal action to resolve the issue and to prevent other
competitors from infringing on its intellectual property rights within the
Territory. Otherwise, each party shall have sole and absolute discretion
to take such action as it deems appropriate.
6.4 In the event of the termination of this Agreement for any reason,
Faulding's right to use the Trademarks shall cease, and Faulding shall cease
using such Trademarks at such time as Faulding's inventory of Products has
been sold. Faulding shall, as soon as it is reasonably possible, remove all
Trademarks which appear on or about the premises of the office(s) of
Faulding and any of the advertising of Faulding used in connection with
Products.
6.5 In the event of a breach or threatened breach by Faulding of the
provisions of this Article 6, Xxxxxxxxxx shall be entitled to an injunction
or injunctions to prevent such breaches. Nothing herein shall be construed
as prohibiting Xxxxxxxxxx from pursuing other remedies available to it for
such breach or threatened breach of this Article 6, including the recovery
of damages from Faulding.
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Article 7. Confidential Information
7.1 Each party recognizes and acknowledges that both will have access to
confidential information and trade secrets of the other and other entities
doing business with both parties relating to research, development,
manufacturing, marketing, financial and other business-related activities
("Confidential Information"). Such Confidential Information constitutes
valuable, special and unique property of each party and/or other entities
doing business with each party. Other than as is necessary to perform the
terms of this Agreement, neither party shall, during and after the term of
this Agreement, make any use of such Confidential Information, or disclose
any of such Confidential Information to any person or firm, corporation,
association or other entity, for any reason or purpose whatsoever, except
as specifically allowed in writing by an authorized representative of the
other party. In the event of a breach or threatened breach by either party
of the provisions of this Article 7, each shall be entitled to an injunction
restraining the other from disclosing and/or using, in whole or in part,
such Confidential Information. Nothing herein shall be construed as
prohibiting either party from pursuing other remedies available to it for
such breach or threatened breach of this Article 7, including the recovery
of damages from the other party. The above does not apply to information
or material that was known to the public or generally available to the
public prior to the date it was received by either party.
7.2 Faulding shall not disclose the existence of this Agreement or any of the
terms hereof without the prior written consent of Xxxxxxxxxx.
Article 8. Force Majeure
8.1 Neither Faulding nor Xxxxxxxxxx shall have any liability hereunder if
either is prevented from performing any of its obligations hereunder by
reason of any factor beyond its control, including, without limitation,
fire, explosion, accident, riot, flood, drought, storm, earthquake,
lightning, frost, civil commotion, sabotage, vandalism, smoke, hail,
embargo, act of God or the public enemy, other casualty, strike or lockout,
or interference, prohibition or restriction imposed by any government or any
officer or agent thereof ("Force Majeure"), and neither Faulding's nor
Xxxxxxxxxx'x obligations, so far as may be necessary, shall be suspended
during the period of such Force Majeure nor shall either party's obligations
be cancelled in respect of such Products as would have been sold hereunder
but for such suspension. Such shall give to other prompt notice of any such
Force Majeure, the date of commencement thereof and its probable duration
and shall give a further notice in like manner upon the termination thereof.
Each party hereto shall endeavor with due diligence to resume compliance
with its obligations hereunder at the earliest date and shall do all that
it reasonably can to overcome or mitigate the effects of any such Force
Majeure upon a party's obligations under this Agreement. Should the Force
Majeure continue for more than six (6) months, then the other Party shall
have the right to cancel this Agreement and the Parties' shall seek an
equitable agreement on the Parties' reward of interests.
8.2 The Parties agree that any obligation to pay money is never excused by
Force Majeure.
11
Article 9. Amendment
9.1 No oral explanation or oral information by either party hereto shall
alter the meaning or interpretation of this Agreement. No modification,
alteration, addition or change in the terms hereof shall be binding on
either party hereto unless reduced to writing and executed by the duly
authorized representative of each party.
Article 10. Entire Agreement
10.1 This Agreement shall supersede any and all prior agreements,
understandings, arrangements, promises, representations, warranties, and/or
any contracts of any form or nature whatsoever, whether oral or in writing
and whether explicit or implicit, which may have been entered into prior to
the execution hereof between the parties, their officers, directors or
employees as to the subject matter hereof. Neither of the parties hereto
has relied upon any oral representation or oral information given to it by
any representative of the other party not included in this Agreement.
Article 11. Assignment
11.1 Neither this Agreement nor any of the rights or obligations of either
party hereunder shall be assigned by either party without the prior written
consent of the other, executed by a duly authorized officer of each party.
Consent by either Party shall not be unreasonably withheld.
Article 12. Governing Law
12.1 It is expressly agreed that the validity, performance and construction
of this Agreement will be governed by the laws and jurisdiction of
Australia.
Article 13. Notices
13.1 Any notice required or permitted to be given under this Agreement by
one of the parties to the other shall be given for all purposes by delivery
in person, registered air-mail, commercial courier services, postage
prepaid, return receipt requested, or by fax addressed to:
(a) Xxxxxxxxxx at: Xxxxxxxxxx Laboratories, Inc., 0000 Xxxxxx Xxxx Xxxx,
Xxxxxx, Xxxxx 00000, attention: President, or at such other address as
Xxxxxxxxxx shall have theretofore furnished in writing to Faulding. (Fax
No. 000-000-0000)
(b) Faulding at: Faulding Pharmaceuticals, 0-00 Xxxxx Xxxxx, Xxxxxxxx
Xxxxxxxx 0000 , attention: Xxxxx Xxxxxx, General Manager, or at such other
address as Faulding shall have theretofore furnished in writing to
Xxxxxxxxxx. (Fax No. 000-000-0000)
Article 14. Waiver
14.1 Neither Faulding's nor Xxxxxxxxxx'x failure to enforce at any time any
of the provisions of this Agreement or any right with respect thereto, shall
be considered a waiver of such provisions or rights or in any way affect the
validity of same. Neither Faulding's nor Xxxxxxxxxx'x exercise of any of
its rights shall preclude or prejudice either party thereafter from
exercising the same or any other right it may have, irrespective of any
previous action by either party.
12
Article 15. Arbitration
15.1 Except as provided in Articles 6.5 and 7.1, any dispute, controversy or
claim arising out of or in relation to or in connection with this Agreement,
the operations carried out under this Agreement or the relationship of the
parties created under this Agreement, shall be exclusively and finally
settled by confidential arbitration, and any party may submit such a
dispute, controversy or claim to arbitration. The arbitration proceeding
shall be held at the location of the non-instituting party in the English
language and shall be governed by the rules of the International Chamber of
Commerce (the "ICC") as amended from time to time. Any procedural rule not
determined under the rules of the ICC shall be determined by the laws of
Australia, other than those laws that would refer the matter to another
jurisdiction.
A single arbitrator shall be appointed by unanimous consent of the parties.
If the parties cannot reach agreement on an arbitrator within 45 days of the
submission of a notice of arbitration, the appointing authority for the
implementation of such procedure shall be the ICC, who shall appoint an
independent arbitrator who does not have any financial interest in the
dispute, controversy or claim. If the ICC is unable to appoint, or fails
to appoint, an arbitrator within 90 days of being requested to do so, then
the arbitration shall be heard by three arbitrators, one selected by each
party within the 30 days of being required to do so, and the third promptly
selected by the two arbitrators selected by the parties.
The arbitrators shall use their best efforts to announce the award and the
reasons therefor in writing within sixty days after the conclusion of the
presentation of evidence and oral or written argument, or within such longer
period as the parties may agree upon in writing. The decision of the
arbitrators shall be final and binding upon the parties. Judgment upon the
award rendered may be entered in any court having jurisdiction over the
person or the assets of the party owing the judgment or application may be
made to such court for a judicial acceptance of the award and an order of
enforcement, as the case may be. Unless otherwise determined by the
arbitrator, each party involved in the arbitration shall bear the expense
of its own counsel, experts and presentation of proof, and the expense of
the arbitrator and the ICC (if any) shall be divided equally among the
parties to the arbitration.
Article 16. No Inconsistent Actions
16.1 Each party hereto agrees that it will not voluntarily undertake any
action or course of action inconsistent with the provisions or intent of
this Agreement and, subject to the provisions of Articles 4.6 and 8 hereof,
will promptly do all acts and take all measures as may be appropriate to
comply with the terms, conditions and provisions of this Agreement.
Article 17. Currency of Account
17.1 This Agreement evidences a transaction for the sale of goods in which
the specification of U.S. dollars is of the essence, and U.S. dollars shall
be the currency of account in all events. All payments to be made by
Faulding to Xxxxxxxxxx hereunder shall be made either (i) in immediately
available funds by confirmed wire transfer to a bank account to be
designated by Xxxxxxxxxx or (ii) in the form of a bank cashier's check
payable to the order of Xxxxxxxxxx.
13
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
XXXXXXXXXX LABORATORIES, INC.
By:
Name: Xxxxxxx X. Xxxxxx, Ph.D.
Title: President and CEO
FAULDING PHARMACEUTICALS/XXXXX XXXX LABORATORIES
By: __________________________________
Name: Xxxxx Xxxxxx
Title: General Manager
PAGE
ANNEXURE 1
THE PRODUCTS
TRADEMARKS TO BE REGISTERED BY XXXXXXXXXX DURING THE TERM OF THE AGREEMENT
Carrasyn (R)
14 ANNEXURE 2
OVERALL QUALITY CONTROL AND RELEASE RESPONSIBILITY PERSON
Name:Xx. Xx Xxxxxxxxxxx
Title:Director, QC/QA
Company:Xxxxxxxxxx Laboratories, Inc.
Name:
Title:
Company:
15
EXHIBIT A
HydroHeal Gel Unit Forecast and Pricing
Year 1: July 1st, 1997 - June 30th, 1998
Contract
Unit Forecast Transfer Prices
Min Max $U.S.
------ ------ ---------
8 gm ( .28 oz.) tubes (ea.) 2300 5200 $1.66
15 gm ( .52 oz.) tubes (ea.) 1800 4550 1.99
25 gm ( .88 oz.) tubes (ea.) 7000 17550 2.77
85 gm (3.00 oz.) tubes (ea.) 6500 15600 6.87
195 gm (6.88 oz.) tubes (ea.) 800 1950 11.28
* Products sold to and prices paid by Faulding
shall be in U.S. dollars.
16
