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EXHIBIT 10.13
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.
PRODUCT SUPPLY AGREEMENT
THIS PRODUCT SUPPLY AGREEMENT (the "Agreement") is entered into as of
January 29, 1999 (the "Effective Date"), by and between AMERICAN HOME PRODUCTS
CORPORATION, located at Five Xxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter "AHP"), and HORIZON PHARMACEUTICAL CORPORATION located at 000
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 (hereinafter "Horizon"). AHP
and Horizon may each be referred to herein individually as a "Party" and
collectively as the "Parties."
WHEREAS, on January 29, 1999 Horizon and AHP entered into a license
agreement concerning AHP's grant of a license to Horizon of AHP's interest in
the Robinul(R) oral dosage form human pharmaceutical business in the United
States, its territories and possessions (including the Commonwealth of Puerto
Rico); and
WHEREAS, Horizon desires AHP to manufacture or have manufactured and
supply to Horizon certain Robinul(R) products for sale by Horizon in the
Territory (as such term is defined below) and AHP desires to manufacture or
have manufactured and supply Horizon with such products on the terms and
conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing premises and the
mutual premises, covenants and conditions contained in this Agreement, the
Parties agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following respective meanings:
1.1 "ACCEPTABLE PRODUCT" shall have the meaning set forth in
Section 6.1 hereof.
1.2 "AFFILIATE" shall mean, in the case of either Party, any
corporation, joint venture, or other business entity which
directly or indirectly controls, is controlled by, or is
under common control with that Party. "Control", as used in
this Section 1.2, shall mean having the power to direct, or
cause the direction of, the management and policies of an
entity, whether through ownership of voting securities, by
contract or otherwise. Notwithstanding the foregoing, for
purposes of this Agreement, the term "Affiliate" shall not
include subsidiaries in which a Party or its Affiliates owns
a majority of the ordinary voting power to elect a majority
of the board of directors but is restricted from electing
such majority by contract or otherwise, until such time as
such restrictions are no longer in effect.
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1.3 "BINDING QUARTERLY FORECAST" shall have the meaning set forth
in Section 2.3.1.
1.4 "CALENDAR QUARTER" shall mean the respective periods of three
(3) consecutive calendar months ending on March 31, June 30,
September 30 or December 31, for so long as this Agreement is
in effect.
1.5 "CERTIFICATE OF ANALYSIS" shall mean the certificate for each
batch of Product delivered hereunder in the form contemplated
by Section 2.6 of this Agreement.
1.6 "CGMP" shall mean current good manufacturing practices of the
FDA, including compliance with the FD&C Act, 21 C.F.R. parts
210 and 211 and all applicable FDA rules, regulations,
policies and guidelines in effect at a given time.
1.7 "COMMERCIALLY REASONABLE EFFORTS" shall mean efforts and
resources normally used by a Party for a compound or product
owned by it or to which it has rights, which is of similar
market potential at a similar stage in its product life,
taking into account the competitiveness of the marketplace,
the proprietary position of the compound or product, the
regulatory structure involved, the profitability of the
applicable products, and other relevant factors.
1.8 "FDA" shall mean the United States Food and Drug
Administration, and any successor thereto.
1.9 "FD&C ACT" shall mean the United States Federal Food, Drug and
Cosmetic Act, as amended.
1.10 "FULLY ABSORBED COST" shall mean with respect to AHP's
manufacture of the Product, the sum of AHP's standard unit
costs of raw materials, direct labor and allocated overhead.
The calculation of direct labor and allocated overhead costs
will be consistent with AHP's then current cost accounting
policies and procedures and in accordance with generally
accepted accounting procedures.
1.11 "KNOW-HOW" shall mean all proprietary technical and clinical
information, data and know-how relating to the manufacture of
the Product, whether or not patentable, owned or controlled,
as of the Effective Date or acquired during the term of this
Agreement, by AHP or its Affiliates (with the right to have
or disclose). Know-How shall include, without limitation, all
processes, formulas, discoveries and inventions whether
relating to biological, chemical, pharmacological,
toxicological, pharmaceutical, physical and analytical
safety, quality control and clinical data, including, without
limitation, phase IV clinical study data. The term
"Know-How", however, shall not include (i) any know-how,
processes, information and data which is, as of the Effective
Date or later becomes, generally available to the public or
(ii) any general manufacturing know-how not specific to the
Product.
1.12 "LICENSE AGREEMENT" shall mean the License Agreement between
AHP and Horizon relating to, among other things, the grant by
AHP to Horizon of an exclusive license pertaining to certain
of AHP's Robinul(R) Products within the Territory which
License Agreement was executed on January 29, 1999.
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1.13 "MATERIALS" shall mean any or all Substances, inactive
ingredients, excipients, components, labels, packaging
materials and other consumable materials used in the
manufacture of the Products, provided, however, that
Materials shall not include any equipment used in the
manufacture of the Products.
1.14 "MG." shall mean milligrams.
1.15 "NDA" shall mean a New Drug Application as defined in the
FD&C Act and applicable regulations thereunder, as amended
from time to time.
1.16 "PRODUCTS" shall mean the following compositions and dosage
forms containing Substance in the following amounts and
supplied to Horizon pursuant to this Agreement:
Product A (Robinul(R))
Tablets
Glycopyrrolate
1 mg.
Supplied in: Bottles of 100
Product B (Robinul(R) Forte)
Tablets
Glycopyrrolate
2 mg.
Supplied in: Bottles of 100
In addition, Products shall include 1 mg. Tablets
(Product C) and 2 mg. Tablets (Product D) supplied
in bulk but only for Horizon's requirements to
self-package for sampling purposes.
It is understood by the Parties hereto that the
Products are to (a) be substantially similar to
those Products currently manufactured and marketed
by AHP in the Territory, (b) comply with the
Specifications and (c) be sold under the trademark
Robinul(R).
1.17 "REGULATORY APPROVALS" shall mean all (i) authorizations by
the appropriate Regulatory Authorities which are required for
the manufacture (other than manufacturing facility licenses,
approvals or authorizations), marketing, promotion, pricing
and sale of the Products in the Territory, and (ii)
investigational new drug applications permitting the clinical
study of the Product in the Territory, each of which are
owned by AHP or its Affiliates.
1.18 "REGULATORY AUTHORITY" shall mean any national,
supra-national, regional, state or local regulatory agency,
department, bureau, commission, council or other governmental
entity in the Territory involved in the granting of
Regulatory Approval for the Product, including, without
limitation, the FDA.
1.19 "SPECIFICATIONS" shall mean specifications for or concerning
the manufacturing, testing, and packaging of Products as set
forth in the Regulatory Approvals for the Product and in
Schedule 1.19 hereto, or as may be agreed upon by the Parties
in writing from time to time.
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1.20 "SUBSTANCE" shall mean the chemical substance
3-[(cyclopentylhydroxy phenylacetyl)oxy]-1,
1-dimethylpyrrolidinium bromide, otherwise known as
glycopyrrolate.
1.21 "TERM" shall have the meaning set forth in Section 10.1
hereof.
1.22 "TERRITORY" shall mean the United States, its territories and
possessions (including the Commonwealth of Puerto Rico).
1.23 "THIRD PARTY(IES) shall mean any person(s) or party(ies)
other than Horizon, AHP or their respective Affiliates.
1.24 "TRANSACTION AGREEMENTS" shall mean this Agreement and the
License Agreement.
1.25 "$" shall mean United States dollars.
2. SUPPLY OF PRODUCTS.
2.1 OBLIGATION TO SUPPLY. Subject to the provisions of this
Agreement, during the Term of this Agreement, AHP shall
manufacture or have manufactured for and supply to Horizon
Products for sale by Horizon, its Affiliates or its permitted
sublicensees in the Territory, and Horizon shall purchase
from AHP its entire requirements of Products for sale in the
Territory. All Products supplied under this Agreement are to
be supplied in finished form, as specified in Horizon's
purchase orders placed with AHP pursuant to Section 2.4
below.
2.2 SUBCONTRACTING; ASSIGNMENT OF OBLIGATIONS.
2.2.1 RIGHT TO SUBCONTRACT OR ASSIGN. AHP may subcontract
or assign any part of its manufacturing and supply
obligations hereunder if it provides no less than
six (6) months' written notice of its intent to do
so to Horizon, subject to Horizon's prior right to
take over such manufacturing and supply obligations.
AHP and Horizon agree that, prior to transfer of
manufacturing obligations to such subcontractor or
assignee, such subcontractor or assignee must (i)
have an FDA approved facility for the manufacture of
Product and a supplement to the Regulatory Approvals
permitting the manufacture of Product in such
facilities must be approved by the FDA, and (ii)
must agree in writing to comply with the obligations
set forth in this Agreement. AHP shall assist in the
qualification of such third party manufacturers or
Horizon; provided, however, that AHP's assistance
shall be limited to providing reasonable technical
assistance not to exceed 30 man-days and the
delivery of the following documentation: Batch
records for both strengths of the Product, copies of
change control history, all method validations
(including new HPLC methods), active ingredient
specification sheets, raw material test procedures,
copies of process and cleaning validations, and a
copy of the Product dossier made available to
Horizon during the due diligence process. AHP shall
notify Horizon or obtain Horizon's consent with
respect to its purchase of Materials from qualified
Third Parties for use in its manufacture of Product
hereunder.
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2.2.2 COSTS. In the event that (i) during the Term of this
Agreement AHP subcontracts or assigns its
manufacturing and supply obligations to a Third
Party pursuant to Horizon's request or (ii) Horizon
assumes, either directly or through a Third Party,
the responsibilities for manufacturing and supplying
Product during the Term of this Agreement as
permitted under Section 2.2.1 hereof, Horizon shall
pay the out-of-pocket expenses incurred by either
Party in transferring such manufacturing and supply
responsibilities.
2.3 FORECASTS
2.3.1 ROLLING FORECASTS. Throughout the term of this
Agreement, Horizon shall provide AHP with a rolling
one (1) year forecast of its expected purchases of
each Product, the mechanism for which shall be as
follows:
(i) On or before the Effective Date, Horizon shall have
provided AHP with a written forecast of its expected
purchases of each of the Products for the period
extending three (3) Calendar Quarters beyond the
Calendar Quarter containing the Effective Date.
Subject to Section 2.3.2, the forecast for this
period, excluding the last two (2) Calendar
Quarters, shall be binding upon Horizon.
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(ii) Beginning on the date of the first Calendar Quarter
following the Effective Date and then on or prior to
the first day of each subsequent Calendar Quarter,
Horizon shall provide AHP with an update to its
previously submitted forecast of its expected
purchases of each of the Products. Such update shall
consist of a repetition of the previously forecasted
three (3) Calendar Quarters along with a newly
introduced forecast for the Calendar Quarter
subsequent to the last Calendar Quarter previously
forecasted, provided, however, that the quantity
forecasted for each Product for any Calendar Quarter
shall not, without AHP's prior written consent, be
more than one hundred twenty-five percent (125%) of
the quantity forecasted for such Product for the
immediately preceding Calendar Quarter. Subject to
Section 2.3.2, the forecast for this period,
excluding the last two (2) Calendar Quarters, shall
be binding upon Horizon.
(iii) Under each of Sections 2.3.1(i) and 2.3.1(ii) above,
the forecast for those quarters which is binding
upon Horizon shall be a "Binding Quarterly
Forecast."
2.3.2 QUANTITY LIMITATIONS. The quantity of each Product
ordered by Horizon to be supplied by AHP in
accordance with such orders in any Calendar Quarter
shall not be less than seventy-five percent (75%) of
the quantity of such Product specified in the most
recent Binding Quarterly Forecast applicable to such
Calendar Quarter. Additionally, AHP shall not be
obligated to supply that quantity of any Product in
any Calendar Quarter that is more than one hundred
twenty-five percent (125%) of the quantity of such
Product specified for the most recent Binding
Quarterly Forecast applicable to such Calendar
Quarter, but shall use its Commercially Reasonable
Efforts to meet requirements in excess of such
quantity. AHP shall provide sixty (60) days' written
notice to Horizon in the event AHP determines that
it cannot fill an order.
2.4 PURCHASE ORDERS
2.4.1 SUBMISSION OF PURCHASE ORDERS. From time to time,
Horizon shall place purchase orders with AHP, in a
format agreed upon by the Parties, for each of the
Products specifying the quantities of the Products
desired, and the place(s) to which and the manner
and dates by which delivery is to be made; said
delivery dates to be no earlier than one hundred
twenty (120) calendar days after the purchase order
date. All purchase orders shall be sent by Horizon
to the attention of the following employee of AHP or
as otherwise instructed by AHP.
Wyeth-Ayerst Pharmaceuticals
X.X. Xxx 000
Xxxxx, XX 00000
Attn: Mr. Xxx Xxxxxxx,
Finished Stock Requirements Division
FAX: (000) 000-0000
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[***]-CONFIDENTIAL TREATMENT REQUESTED
Purchase orders made in accordance with the
provisions of this Article 2 shall be deemed to be
accepted by AHP if AHP has not rejected said
purchase orders within ten (10) business days of
receipt of the same, provided, however, that AHP
shall not reject any purchase order specifying
quantities within the quantity limitations set forth
in Section 2.3.2 hereof and which purchase orders
are otherwise in accordance with the provisions of
this Article 2. To the extent the terms of any
purchase order or acknowledgment thereof are
inconsistent with the terms of this Agreement, the
terms of this Agreement shall control.
2.4.2 SIZE OF ORDERS. All purchase orders for each Product
placed by Horizon shall be whole number multiples of
the production batch sizes used by AHP. These are
set forth below (or as mutually agreed in writing by
the Parties):
Product Batch Size - Expected Yield
Products A and C
1 mg. tablets [***] tablets
Products B and D
2 mg. tablets [***] tablets
2.5 DELIVERY. AHP shall execute all accepted purchase orders
consistent with this Agreement by delivery ex works to
Horizon's designated carrier at AHP's manufacturing or
distribution facility of all ordered quantities of the
Products no later than the delivery dates provided in
Horizon's purchase orders. Title and risk of loss will pass
to Horizon when each order of Products is delivered to the
designated carrier of Horizon at AHP's manufacturing or
distribution facility.
2.6 SPECIFICATIONS; CERTIFICATE OF ANALYSIS. As of the time of
such delivery by AHP, each batch of the Products will conform
to the Specifications. AHP shall perform release testing in a
manner consistent with testing methods agreed upon by the
Parties. AHP shall provide to Horizon a Certificate of
Analysis with each shipment of the Products to Horizon or its
designated recipient stating that the Products conform to the
Specifications and meet release specifications. The
Certificate of Analysis shall be in a format agreed upon by
the Parties and, if required under cGMP, such Certificate of
Analysis shall include the Specifications and the results of
release testing conducted by AHP on such Products. Upon
Horizon's written request, AHP will also provide Horizon with
a copy of the manufacturing and controls information for the
applicable batch(es) delivered.
2.7 LABELING. Within thirty (30) days after the Effective Date,
Horizon, at its own expense, will provide AHP with Horizon's
new labeling for the Product (including a new NDC number for
each Product) bearing Horizon's corporate name and trade
dress. If such labeling is changed in any manner other than a
new NDC number and Horizon's corporate name and tradedress,
such labeling shall be subject to the approval of AHP, which
approval will not be unreasonably withheld. AHP agrees to
either approve or disapprove such labeling within thirty (30)
business days of AHP's receipt thereof from Horizon. AHP, at
Horizon's expense, will print, either directly or through a
Third Party, labels and other printed material to be included
as part of the finished Product. Product
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manufactured by AHP after AHP's receipt and approval of
Horizon's new labeling for the Product, shall bear such new
labeling, provided, however, that AHP shall have no
responsibility with respect to the content of such labeling,
provided the content of the labeling printed by AHP is the
same as the content of the labeling provided by Horizon.
Horizon shall reimburse AHP for all reasonable costs incurred
(on a Fully-Absorbed Cost basis) by AHP in making
modifications to labeling, branding or imprinting, packaging
and/or manufacturing processes to accommodate Horizon's new
labeling or to accommodate any other changes requested by
Horizon. Such reimbursement shall be made pursuant to invoices
submitted by AHP to Horizon, which invoices shall be payable
within thirty (30) days after Horizon's receipt thereof. In
addition, should such new labeling result in any increase in
AHP's cost of manufacturing the Product hereunder, the
purchase price for such Product as calculated under Section
5.1 hereof, shall be increased by such additional costs.
Notwithstanding the foregoing, AHP may supply Horizon with
Product bearing AHP's labeling if such Product was
manufactured and labeled prior to the Closing, it being agreed
that Product manufactured from and after the Closing shall
bear (i) AHP's label, or (ii) Horizon's new label.
2.8 PURCHASE OF RESIDUAL INVENTORIES. Upon expiration or upon
termination of this Agreement by AHP, upon AHP's request
Horizon shall purchase from AHP (i) reasonable quantities of
AHP's residual inventories of Products having not less than
twelve months' remaining dating at the then current purchase
price as determined in accordance with Section 5.1 hereof,
and (ii) reasonable quantities of AHP's residual inventories
of Product specific Materials, including, without limitation,
all labels and other Product specific packaging materials,
but excluding all stocks of Substance and Materials used for
the manufacture of Substance, at AHP's Fully Absorbed Cost
for such Materials.
2.9 INITIAL DELIVERY. AHP agrees to provide initial delivery of
Products, subject to the timely receipt of an appropriate
purchase order from Horizon in accordance with this Article
2, on or before Closing in accordance with procedures and
terms to be set forth in the Systems Transfer documents
developed by the Parties pursuant to Section 3.2 of the
License Agreement.
3. MANUFACTURE OF PRODUCTS.
3.1 MANUFACTURE OF PRODUCT. AHP agrees to manufacture and supply
the Products in accordance with (i) the Specifications, (ii)
the applicable Regulatory Approvals, as may be amended from
time to time, and (iii) cGMP requirements, and all other
applicable laws, rules and regulations. If
(a) upon Horizon's request the Parties mutually
agree to change part or all of the Product
manufacturing process, or
(b) any Product specific change in the
applicable Regulatory Approvals (other than
a change included under clause (a) above),
applicable laws, rules or regulations
requires a change in the Product
manufacturing process
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Horizon shall reimburse AHP for all Fully Absorbed Costs
incurred by AHP in connection with making such changes in the
Product manufacturing process. Additionally, if either making
any such change in the Product manufacturing process or any
Product specific change in the applicable Regulatory
Approvals, applicable laws, rules or regulations requires AHP
to conduct development, testing or other activities (e.g.,
process development, stability testing, validation of new
specifications, etc...) (collectively referred to as
"Activities") in addition to those activities AHP conducted
or is required to conduct in its manufacture of the Product
immediately prior to such change in either the Product
manufacturing process or the Product specific applicable
Regulatory Approvals, applicable laws, rules or regulations
being implemented, Horizon shall reimburse AHP for all Fully
Absorbed Costs incurred by AHP in connection therewith. In
addition to the foregoing, in the event that the Product
manufacturing process is changed or AHP is required to
conduct Activities in accordance with this Section 3.1, the
purchase price for Product, other than for Product already
manufactured and in inventory, shall be increased in an
amount equivalent to the increase in AHP's manufacturing cost
for Product, which increase shall be effective immediately
upon AHP becoming aware of any proposed changes in the
Regulatory Approvals, applicable laws, rules or regulations
which requires either (i) a change in the Product
manufacturing process or (ii) to AHP to conduct Activities,
it will promptly notify Horizon and will consult with Horizon
regarding the proposed changes and Activities, and will
obtain Horizon's written consent prior to implementing the
Activities and the changes, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, in the
event that Horizon requests changes in the manufacturing
process, AHP shall not be obligated to make such change or
conduct any Activities with respect thereto unless the
parties mutually agree to make such change in the Product
manufacturing process.
3.2 PROCUREMENT OF MATERIALS. AHP shall use its Commercially
Reasonable Efforts to timely procure all Materials necessary
for the production of the Products. Title to all such
Materials shall reside in AHP. Notwithstanding the foregoing,
AHP's obligation to supply Horizon with Product hereunder is
subject to AHP's ability to obtain from Third Parties
Materials in sufficient quantities to meet Horizon's and
AHP's requirements for the manufacture of Products. AHP may,
during any period of shortage of any Materials, prorate its
supply of such Materials between Horizon and AHP's other uses
(e.g., for sales of Products outside of the Territory or use
in products other than Products) according to the relative
quantities purchased/used by each during the immediately
preceding twelve (12) months (or such shorter period of time
that AHP has actually been supplying Product to Horizon
hereunder if such shortage of Materials occurs prior to the
first anniversary of the Effective Date) without regard to
price. AHP shall use Commercially Reasonable Efforts to avoid
entirely any such shortage or, if avoidance is not possible,
to limit such period and amount and shall promptly inform
Horizon if it becomes aware of any potential shortage. In the
event that, after May 30, 1999, AHP is unable to supply the
lesser of seventy-five percent (75%) of (i) the average
number of bottles of Product A and Product B sold by Horizon
for the previous three full calendar months ("Sale
Minimums"), or (ii) 7,600 bottles of Product A and 2,650
bottles of Product B ("Bottle Minimums") for a period greater
than thirty (30) days, then, provided the shortage has not
been resolved prior to the next License Fee payment date,
Horizon may reduce or
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suspend the payment of the amounts otherwise due and payable
under Section 4.1 of the License Agreement until AHP is again
able to supply Horizon such quantities of Products based on
the schedule set forth in Table I below, provided, that in no
event shall Horizon reduce or suspend such payments more than
two consecutive calendar quarters nor more than three
calendar quarters during the eight calendar quarter period
specified in Section 4.1(ii) of the License Agreement.
TABLE I
AMOUNT OF
PRODUCTS SUPPLIED PAYMENT REDUCTION
----------------- -----------------
less than 75% but 50%
or more of Sale Minimums or 50%
Bottle Minimums, as applicable
less than 50% but 25% or more 75%
less than 25% full suspension
3.3 REGULATORY FILINGS. Horizon shall provide to AHP copies of
all annual reports to the FDA.
3.4 COMPLIANCE WITH LAWS AND REGULATIONS. While the Products are
in its possession or under its control, AHP shall comply with
all applicable federal, state and local statutory and
regulatory requirements regarding the manufacture, packaging,
handling and storage of the Products.
3.5 PRODUCT COMPLAINTS. Horizon shall be solely responsible for
interacting with the public with respect to complaints
regarding Product quality. With respect to any such
complaints, each Party shall have the responsibility for
promptly conducting an investigation of any activities
conducted by it under the Transaction Agreements which may be
relevant to the complaint and each Party shall promptly
report the results of such investigation to the other Party.
The Parties shall cooperate in any investigation by the other
Party of each such complaint which involves the Parties'
duties under this Agreement.
4. TECHNOLOGY TRANSFER.
4.1 TRANSFER OF PRODUCT MANUFACTURING KNOW-HOW. As soon as
practicable after Horizon's request, and only if Horizon has
complied with all of its obligations under the Transaction
Agreements including, without limitation, the payment of all
fees and payments that become due and payable prior to such
time, AHP shall furnish Horizon with one copy of the
Know-How, including all technical, manufacturing and AHP's
other written information, including but not limited to
process sheets, raw material and process specifications,
manuals, vendors lists, and other writings specifically
relating to the Products, which are currently used by AHP,
its Affiliates or sub-contractors to manufacture or have
manufactured Products according to the methods used by AHP or
its Affiliates or subcontractors. AHP agrees that Horizon,
its Affiliates or its permitted sublicensees, may use all
Know-How listed in the preceding sentence for the manufacture
of Products for sale in the Territory.
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[***]-CONFIDENTIAL TREATMENT REQUESTED
4.2 TRAINING. In connection with the transfer of information
described in Section 4.1, AHP shall permit a reasonable
number of Horizon's technically skilled personnel and
consultants designated by Horizon (with travel and living
expenses paid by Horizon) to make one or more visits to such
facilities of AHP or its Affiliates as may be engaged in the
manufacture of Products for up to an aggregate of thirty (30)
man-days in order to inspect and be instructed in all
manufacturing techniques and procedures used by AHP, its
Affiliates or subcontractors in the manufacture of Products.
4.3 HORIZON'S USE OF KNOW-HOW. Horizon agrees that it shall use
all Know-How provided to Horizon by or on behalf of AHP, its
Affiliates or subcontractors pursuant to the Transaction
Agreements for the sole purpose of making, using and/or
selling the Products only in the Territory and shall not use
or permit any Third Party to use such Know-How for the
purpose of making Products for sale outside the Territory or
for use as veterinary pharmaceutical products within or
outside of the Territory. In the event, due to Horizon's
failure to comply with any provision of the Transaction
Agreements, such Know-How is used for the purpose of making
Products for either sale outside the Territory or sale as
veterinary pharmaceutical products within or outside of the
Territory during such time period, Horizon shall immediately
cease such use and/or sale and take such action as may be
necessary to prevent a Third Party from using such Know-How
for the purpose of making Products for sale outside the
Territory and/or for sale as veterinary pharmaceutical
products within or outside the Territory. The provisions of
this Section shall not limit any other remedy AHP has on
account of the use of such Know-How for the purpose of making
Products for sale outside the Territory or for sale as
veterinary pharmaceutical products within or outside the
Territory.
5. PURCHASE PRICE.
5.1 PRICE. Horizon shall purchase from AHP and AHP shall sell to
Horizon Products at the purchase prices set forth in Schedule
5.1 hereof, which purchase prices shall be increased once
each year by [****]
5.2 FREIGHT, INSURANCE AND TAXES. Horizon shall pay all actual
freight, insurance and government sales tax imposed on
purchasers for resale, and duties and other fees (except tax
on income to AHP) incurred in connection with the sale and
shipment of the Products to Horizon.
5.3 PAYMENT. Payments to AHP for the purchase price of delivered
Products (as well as any other payment due from Horizon to
AHP under this Agreement) shall be made by Horizon within
thirty (30) days after the date of invoice, except as to
Product orders which are rejected by Horizon in accordance
with the procedures recited in Article 6, or which the
Parties dispute are in conformance with the Specifications.
In the event Product is rejected by Horizon, but is
determined to be Acceptable Product pursuant to Section 6.2
hereof, the payment for such Product shall be due and payable
within ten (10) days after the determination with respect to
such Product is made in accordance with Section 6.2 hereof.
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5.4 MAINTENANCE OF RECORDS; AUDITS. AHP shall keep complete
records of AHP's Fully Absorbed Costs for the manufacture and
supply of Products hereunder, and shall permit an independent
certified public accountant selected by Horizon and
reasonably acceptable to AHP, at Horizon's expense, at the
time of (a) any price adjustment under Section 5.1, or (b)
request by AHP for reimbursement of costs incurred under
Sections 2.7 and 3.1 hereof, but, in any event, no more than
once per year, to inspect and review such records during
normal business hours and upon reasonable prior notice, in
order to verify or determine such costs and whether an
increase in such costs has occurred. The independent
certified public accountant may not disclose to Horizon
specific manufacturing cost breakdowns, but only whether or
not the increase in AHP's Fully Absorbed Cost reported by AHP
are correct. Horizon shall bear the costs and fees associated
with such inspections and reviews unless it is determined by
the independent certified public accountant that such price
adjustment was unjustified (in excess of five percent (5%)
more than the price increase determined by the independent
certified public accountant to be justified), in which case
AHP shall bear the costs and fees of such audit and shall
promptly refund to Horizon any overpayments made by Horizon
because of such unjustified price adjustment.
6. INSPECTION OF PRODUCT.
6.1 INSPECTION; REJECTION OF PRODUCT. Horizon shall analyze
representative samples of each lot of Product delivered to
Horizon for purposes of determining whether the same meets
the Specifications and was manufactured in accordance with
the NDA and cGMP ("Acceptable Product") and, if performed,
will do so within thirty (30) days from the date of delivery
of such Products to Horizon's carrier. Horizon shall notify
AHP in writing within said thirty (30) days of any of the
Product or portion thereof, which Horizon is rejecting
because it is not Acceptable Product. If Horizon fails to
notify AHP that it is rejecting a lot of Product within such
thirty (30) day period, such lot of Product shall be deemed
to be Acceptable Product. In the event of a recall of
Product, Section 9.1 hereof shall govern.
6.2 THIRD PARTY ANALYSIS. If AHP, after good faith consultation
with Horizon, disputes any finding by Horizon that Product is
not Acceptable Product, representative samples of such
Product shall be forwarded to a Third Party jointly selected
by AHP and Horizon, in their reasonable discretion, for
analysis, which analysis shall be performed in compliance
with applicable FDA regulations for retesting of
pharmaceutical products. The findings of such Third Party
regarding whether the Product was Acceptable Product shall be
binding upon the Parties. The cost of such analysis by such
Third Party shall be borne by the Party whose findings
differed from those generated by such Third Party.
6.3 REPLACEMENT OF PRODUCT. AHP shall replace any Product order,
or portion thereof, which is not Acceptable Product (unless
such non-conformance is due to any negligent or wrongful act
or omission by Horizon or its agents or subcontractors), at
its cost and expense, including shipping costs.
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6.4 DISPOSITION OF REJECTED PRODUCT. AHP shall instruct Horizon
as to the disposition of any Product order or portion thereof
determined not to be Acceptable Product. At the sole option
of AHP, said Product may be returned to AHP, at AHP's expense
including shipping costs, or destroyed in an environmentally
acceptable manner, at AHP's expense.
7. INSPECTION AND ACCESS TO FACILITY AND RECORDS.
7.1 INSPECTION BY REGULATORY AUTHORITIES. Upon the request of the
FDA or other regulatory agency, such agency shall have access
to observe and inspect AHP's or its Affiliates' facilities
and procedures used for the manufacture, testing or
warehousing of the Products and to audit such facilities for
compliance with cGMP and/or other applicable regulatory
standards.
7.2 NOTIFICATION OF INQUIRIES AND INSPECTIONS. AHP also agrees to
notify Horizon within ten (10) business days or such shorter
time as may be required by the notification of the
inspection, of any written or oral inquiries, notifications
or inspection activity by the FDA or other regulatory agency
in regard to any Product. AHP shall permit not more than two
(2) Horizon representatives to attend any such inspections,
and shall provide a reasonable description of any such
governmental inquiries, notifications or inspections promptly
after such visit or inquiry. AHP shall furnish to Horizon (i)
within ten (10) business days after receipt, any report or
correspondence issued by the FDA or other governmental agency
in connection with such visit or inquiry, including but not
limited to, any FDA Form 483 (List of Inspectional
Observations) or applicable portions of any FDA Warning
Letters which pertain to the Products in the Territory and
(ii) not later than ten (10) business days prior to the time
it provides to the FDA or other regulatory agency, copies of
proposed responses or explanations relating to items set
forth above (each, a "Proposed Response"), in each case
redacted of trade secrets or other confidential or
proprietary information of AHP that are unrelated to the
obligations under this Agreement or are unrelated to the
Products. AHP shall discuss with Horizon and consider in good
faith any comments provided by Horizon on the Proposed
Response. After the filing of a response with the FDA or
other regulatory agency, AHP will notify Horizon of any
further contacts with such agency relating to the subject
matter of the response.
7.3 INSPECTION BY HORIZON. AHP shall permit Horizon to inspect
once annually that portion of the AHP facility where Product
is manufactured and review such Product documents as is
reasonably necessary for the purpose of assessing AHP's
compliance with applicable regulations. Such inspection and
document review shall be conducted upon reasonable prior
notice by Horizon, but not less than thirty (30) days prior
to the proposed inspection, at a time and date mutually
agreeable to the Parties. In addition, in the event Horizon
has received two or more shipments of Product determined not
to be Acceptable Product pursuant to the procedures of
Article VI hereof within a single Calendar Quarter, Horizon
shall be permitted to conduct an additional such inspection
to help determine the reason(s) for delivery of such
non-Accepted Product.
14
8. WARRANTIES AND INDEMNITIES.
8.1 REPRESENTATIONS AND WARRANTIES OF EACH PARTY. As of the
Effective Date, each of Horizon and AHP hereby represents,
warrants and covenants to the other Party hereto a follows:
(a) it is a corporation or entity duly organized and
validly existing under the laws of the state or
other jurisdiction of incorporation or formation;
(b) the execution, delivery and performance of this
Agreement by such Party has been duly authorized by
all requisite corporate action and do not require
any shareholder action or approval;
(c) it has the power and authority to execute and
deliver this Agreement and to perform its
obligations hereunder;
(d) the execution, delivery and performance by such Party
of this Agreement and its compliance with the terms
and provisions hereof does not and will not conflict
with or result in a breach of any of the terms and
provisions of or constitute a default under (i) a
loan agreement, guaranty, financing agreement,
agreement affecting a product or other agreement or
instrument binding or affecting it or its property;
(ii) the provisions of its charter or operative
documents or bylaws; or (iii) any order, writ,
injunction or decree of any court or governmental
authority entered against it or by which any of its
property is bound; and
(e) it shall at all times comply with all applicable
material laws and regulations relating to its
activities under this Agreement.
8.2 REPRESENTATIONS AND WARRANTIES OF AHP. In addition to the
representations and warranties made by AHP in Section 8.1
hereof, AHP hereby represents and warrants to Horizon as
follows:
(a) that all Products supplied hereunder conform to the
Specifications, will be (and with respect to the
initial delivery of Product to Horizon hereunder,
were) manufactured in accordance with the applicable
Regulatory Approvals and cGMP, and, subject to
Section 2.7 hereof, will not be (and, with respect
to the initial delivery of Product to Horizon
hereunder, were not) adulterated or misbranded while
in AHP's possession; and
(b) that it has not and will not use in any capacity the
services of any persons debarred under 21 U.S.C.
ss.335(a) or 335(b) in connection with the
manufacture of the Products.
8.3 COVENANTS OF HORIZON. In addition to the representations and
warranties made by Horizon in Section 8.1 hereof and the
covenants made by Horizon elsewhere in this Agreement,
Horizon hereby covenants to AHP that it shall not sell the
Products manufactured by AHP hereunder in countries other
than those within the Territory and that it shall not sell
such Products for veterinary use within or outside the
Territory. Horizon further covenants that it shall not sell
such
15
Products to any Third Party which Horizon has reason to
believe might sell the Products in countries other than those
within the Territory. In the case of any such Third Party
sales, Horizon shall exercise its Commercially Reasonable
Efforts, consistent with applicable law, to gain a cessation
of such Third Party sales of Products within such countries,
including, to the extent possible, terminating its sales of
Product to such Third Party.
8.4 NO OTHER WARRANTIES. EXCEPT FOR THE WARRANTIES EXPRESSLY MADE
BY AHP IN SECTIONS 8.1 AND 8.2 HEREOF, AHP MAKES NO OTHER
REPRESENTATION OR WARRANTIES, EITHER EXPRESS OR IMPLIED
(WHETHER WRITTEN OR ORAL), INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR ANY WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE PRODUCTS OR AHP'S
OBLIGATIONS HEREUNDER. ADDITIONALLY, EXCEPT FOR THE
WARRANTIES MADE BY HORIZON IN THIS AGREEMENT, HORIZON MAKES
NO OTHER REPRESENTATION OR WARRANTY, EITHER EXPRESS OR
IMPLIED (WHETHER WRITTEN OR ORAL) WITH RESPECT TO HORIZON'S
OBLIGATIONS HEREUNDER.
8.5 INDEMNIFICATION BY AHP. AHP shall indemnify, defend and hold
harmless Horizon, its Affiliates and their respective
officers, directors, shareholders, employees, agents and
representatives (each a "Horizon Indemnified Party") from any
claims, losses, liabilities, costs, expenses (including
reasonable attorney's fees) and damages to Third Parties,
including any related to property or personal injury (each a
"Liability") which the Horizon Indemnified Party may incur,
suffer or be required to pay resulting from or arising in
connection with (a) the breach by AHP of any representation
or warranty contained in this Agreement; (b) any violation by
AHP of any applicable federal, state or local regulation,
statute or order in the manufacture and packaging of Products
arising out of AHP's duties under this Agreement which is not
attributable to printed materials provided by Horizon; or (c)
any negligent act or omission by AHP or its affiliates in
carrying out its obligations under this Agreement.
Notwithstanding the foregoing, AHP shall have no obligations
to defend, indemnify or hold harmless any Horizon Indemnified
Party for any Liability that results from the negligence or
intentional misconduct of Horizon, its Affiliates, or any of
its permitted sublicensees or any of their respective
officers, directors, employees, agents, consultants or
representatives.
8.6 INDEMNIFICATION BY HORIZON. Horizon shall indemnify, defend
and hold harmless AHP and its Affiliates, and each of its and
their respective employees, officers, directors and agents
(each, an "AHP Indemnified Party") from and against any
Liability which the AHP Indemnified Party may incur, suffer
or be required to pay resulting from or arising in connection
with (a) the breach by Horizon of any representation or
warranty contained in this Agreement; (b) materials or
promotional claims (except to the extent that AHP has
previously reviewed and approved the specific material or
promotional claim under Section 8.2 of the License
Agreement), (c) the manufacture, packaging, promotion,
distribution, testing, use, marketing, sale or other
disposition of Products by Horizon, its Affiliates, its
permitted sublicensees or their respective subcontractors; or
(d) the use of the Trademark by Horizon, its Affiliates, its
16
permitted sublicensees or their respective subcontractors.
Notwithstanding the foregoing, Horizon shall have no
obligations to indemnify, defend, or hold harmless any AHP
Indemnified Party for any Liability that results from the
international misconduct or negligence of AHP, its
Affiliates, its permitted sublicensees or any of their
respective employees, officers, directors or agents,
consultants or representatives.
8.7 CONDITIONS TO INDEMNIFICATION. The obligations of the
indemnifying Party under Sections 8.5 and 8.6 are conditioned
upon the delivery of written notice to the indemnifying Party
of any potential Liability promptly after the indemnified
Party becomes aware of such potential Liability. The
indemnifying Party shall have the right to assume the defense
of any suit or claim relating to the Liability if it has
assumed responsibility for the suit or claim in writing;
however, if in the reasonable judgment of the indemnified
Party, such suit or claim involves an issue or matter which
could have a materially adverse effect on the business
operations or assets of the indemnified Party, the
indemnified Party may waive its rights to indemnity under
this Agreement and control the defense or settlement thereof,
but in no event shall any such waiver be construed as a
waiver of any indemnification rights such Party may have at
law or in equity. If the indemnifying Party defends the suit
or claim, the indemnified Party may participate in (but not
control) the defense thereof at its sole cost and expense.
8.8 SETTLEMENTS. Neither Party may settle a claim or action
related to a Liability without the consent of the other
Party, if such settlement would impose any monetary
obligation on the other Party or require the other Party to
submit to an injunction or otherwise limit the other Party's
rights under this Agreement. Except as otherwise expressly
set forth in this Article 8, any payment made by a Party to
settle any such claim or action shall be at its own cost and
expense.
8.9 LIMITATION OF LIABILITY. With respect to any claim by one
Party against the other arising out of the performance or
failure of performance of the other Party under this
Agreement, the Parties expressly agree that the liability of
such Party to the other Party for such breach shall be
limited under this Agreement or otherwise at law or equity to
direct damages only and in no event shall a Party be liable
for, punitive, exemplary or consequential damages. The
limitations set forth in this Section 8.9 shall not apply
with respect to the obligations of either Party to indemnify
the other under Sections 8.5 or 8.6 hereof in connection with
a Liability to a third party.
8.10 INSURANCE. Horizon shall obtain and maintain at all times
during the term of this Agreement Commercial General
Liability Insurance, including Products Liability, with
limits of liability of not less than Five Million Dollars
($5,000,000) per occurrence and Ten Million Dollars
($10,000,000) in the aggregate. Horizon shall provide AHP
with a Certificate of Insurance evidencing this coverage
within thirty (30) days of the Effective Date. Such insurance
policy shall name AHP as an additional insured and Horizon
shall use its Commercially Reasonable Efforts to ensure such
insurance policy contains a provision requiring ten (10) day
advance notification to AHP in the event of its cancellation
or termination. AHP shall maintain self insurance and/or
insurance obtained from Third Party insurers in amounts
sufficient to cover its obligations under Section 8.5. Upon
Horizon's written request, AHP shall provide Horizon with
evidence of such insurance coverage.
17
9. RECALLS.
9.1 PRODUCT RECALLS. In the event of an actual or threatened
recall of any Product required or recommended by a
governmental agency or authority of competent jurisdiction
within the Territory or if recall of any Product is (i)
reasonably deemed advisable by AHP or by Horizon, or (ii)
jointly deemed advisable by AHP and Horizon, such recall
shall be promptly implemented and administered by Horizon in
a manner which is appropriate and reasonable under the
circumstances and in conformity with accepted trade
practices. In the event that a recall is caused because, due
to negligent acts or omissions of AHP, its Affiliates or
subcontractors, Product supplied by AHP to Horizon does not
conform to the Specifications or was not manufactured in
accordance with the applicable Regulatory Approvals and cGMP,
the cost, including Horizon's reasonable out-of-pocket
expenses, of any such recall shall be borne by AHP. Horizon
shall pay all costs, including AHP's reasonable out-of-pocket
expenses, associated with a recall for any other reason,
including without limitation, recalls (i) caused by actions
of Third Parties occurring after such Product is sold by
Horizon, (ii) due to packaging or label defects for which
Horizon has responsibility or (iii) due to any other breach
by Horizon of its duties under this Agreement.
9.2 NOTICE OF EVENTS THAT MAY LEAD TO PRODUCT RECALL. Each Party
shall keep the other fully and promptly informed of any
notification, event or other information, whether received
directly or indirectly, which might affect the marketability,
safety or effectiveness of Products or might result in a
recall of Products by the FDA.
9.3 RECALL DUE TO BREACH BY AHP. In the event of any recall for
which AHP would be responsible for the costs in accordance
with Section 9.1 hereof, AHP shall, at the election of
Horizon either:
(a) supply Products, without charge to Horizon, in an
amount sufficient to replace the amounts of Products
recalled, or
(b) refund to Horizon or give credit to Horizon against
outstanding receivables due from Horizon for the
price of Products to be delivered to Horizon in the
future, in amounts equal to the price paid by
Horizon to AHP for Products so recalled plus the
reasonable transportation costs incurred by Horizon
and not recovered by Horizon in respect of such
recalled Products.
In addition, if, as a direct result of any recall for which
AHP would be responsible for the costs in accordance with
Section 9.1 hereof, Horizon's aggregate sales of Products in
any consecutive thirty (30) day period fall below fifty
percent (50%) of Horizon's average monthly sales of Products
for the preceding six (6) months, then Horizon may postpone
payment of the first and second payments following the recall
otherwise due and payable under Section 4.1(ii) of the
License agreement for six (6) months, after which Horizon
shall resume making such payments, including immediate
payment of the two postponed payments.
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[***] - CONFIDENTIAL TREATMENT REQUESTED
9.4 DEFINITION OF RECALL. For Purposes of this Article 9,
"recall" shall mean any action by Horizon and its Affiliates,
or AHP and its Affiliates, to recover title or possession or
halt distribution, prescription or consumption of Products
sold or shipped to Third Parties. The term "recall" also
applies to Product which would have been subject to recall if
it had been sold or shipped.
9.5 SURVIVAL OF OBLIGATIONS. The provisions and obligations of
this Article 9 shall survive any termination of this
Agreement.
10. TERM AND TERMINATION.
10.1 TERM. This Agreement shall become effective upon the
Effective Date of the License Agreement and, unless earlier
terminated as provided below, shall remain in full force and
effect for a period ending on the second (2nd) anniversary of
the Effective Date (the "Term"). Thereafter, the term of this
Agreement may be extended by Horizon on six (6) months' prior
written notice for up to six (6) additional months provided
that the Parties agree upon all terms and conditions of such
extension not later than the expiration of the Term. The
Supply Price would be negotiated but shall not be less than
AHP's Fully Absorbed Cost plus a [***] percent [***] xxxx-up.
If the Parties have not extended the term of this Agreement or
signed a new supply agreement before the expiration of the
Term, AHP shall have no obligation to supply Horizon with any
Product after expiration of the Term. Upon expiration or
termination of this Agreement for any reason, all unpaid
amounts due pursuant to Section 5.1 shall become immediately
due and payable.
10.2 TERMINATION BY AHP. AHP may terminate this Agreement, except
as limited hereinafter, immediately upon written notice, in
the event
(a) Horizon fails to make any payment due and owing
within thirty (30) days after notice thereof from
AHP that such payment has not been made by Horizon
by the date specified in Section 5.3; or
(b) Horizon commits a breach of any material provision
of this Agreement which breach remains uncured for
sixty (60) days, measured from the date written
notice of such breach is given to Horizon, or if
such breach is not susceptible of cure within such
sixty (60) day period and Horizon uses good faith
efforts to cure such breach, for one hundred eighty
(180) days after written notice to Horizon; or
` (c) the License Agreement is terminated for any reason,
other than AHP's breach of the License Agreement,
prior to the expiration of the Term of this
Agreement.
10.3 TERMINATION BY HORIZON. Horizon may terminate this Agreement,
in whole or with regard to a specific Product as applicable,
immediately upon written notice in the event (a) AHP commits
a breach of any material provision of this Agreement, which
is not cured within thirty (30) days in case of a failure to
make any payment due and owing; or (b) AHP commits a breach
of any material provision of this Agreement which breach
remains uncured for sixty (60) days, measured from the date
written notice of such breach is given to AHP, or if such
breach is not susceptible of cure within such sixty (60) day
period and AHP uses good faith efforts to cure such breach,
for one hundred eighty (180) days after written notice to
AHP; or (c) the License Agreement is terminated for any
reason other than Horizon's breach of the License Agreement
prior to the expiration of the Term of this Agreement.
19
10.4 INSOLVENCY. Either party may terminate this Agreement upon
the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an
assignment of a substantial portion of the assets for the
benefit of creditors by the other Party, or in the event a
receiver or custodian is appointed for such party's business,
or if a substantial portion of such Party's business is
subject to attachment or similar process; provided, however,
that in the case of any involuntary bankruptcy proceeding
such right to terminate shall only become effective if the
proceeding is not dismissed within ninety (90) days after the
filing thereof.
10.5 EFFECT OF TERMINATION. Upon termination or expiration of this
Agreement, except in the event of termination of the
Agreement by AHP pursuant to Sections 10.2 or 10.4, AHP shall
have the obligations set forth in Sections 4.1 and 4.2. If
AHP terminates this Agreement pursuant to either Section 10.2
or 10.4, the obligations set forth in Sections 4.1 and 4.2
hereof shall survive termination if Horizon has made or
accelerates payment of all payments to AHP required under
Section 4.1 of the License Agreement, and otherwise the
obligations under Sections 4.1 and 4.2 hereof shall not
survive termination. In the event that Horizon terminates
this Agreement pursuant to Section 10.3 hereof because of a
failure to supply Product to Horizon which failure to supply
results in an uncured breach of this Agreement by AHP,
Horizon shall thereafter be permitted to manufacture Product
either directly or through a Third Party and the transfer of
manufacturing Know-How under Section 4.1 shall be
accomplished as soon as practicable, but in no event more
than thirty (30) days, after this Agreement is so terminated
and the reasonable out-of-pocket costs incurred by the
Parties in transferring such Product manufacturing
responsibilities from AHP to either Horizon, its Affiliates
or a Third Party shall be borne by AHP.
10.6 ACCRUED OBLIGATIONS. Termination of this Agreement for any
cause shall not release either Party from any obligation
theretofore accrued.
10.7 NO WAIVER. The failure on the part of either Party to
exercise or enforce any right conferred upon it hereunder
shall not be deemed to be a waiver of any such right nor
operate to bar the exercise or enforcement thereof at any
time thereafter.
10.8 OUTSTANDING ORDERS. Upon termination of this Agreement for
any reason other than pursuant to Sections 10.2 or 10.5
hereof, AHP shall fill all outstanding purchase orders of
Horizon or its Affiliates for the Products, unless otherwise
instructed by Horizon.
10.9 BULK SUBSTANCE. To the extent permitted under the supply
agreement planned to be entered into between AHP and its
supplier of Substance (the "Bulk Substance Supply
Agreement"), AHP will use commercially reasonable efforts to
have such supplier enter into a direct supply agreement for
Substance with Horizon upon expiration of this Agreement, on
the same terms and conditions, including price, as the Bulk
Substance Supply Agreement. AHP shall not be required, as
part of its commercially reasonable efforts, to pay any money
or provide any other form of consideration to such supplier.
Upon expiration of this Agreement, if such direct supply
agreement is not entered into, AHP and Horizon will cooperate
in a mutually agreeable arrangement under which to the extent
feasible Horizon would obtain the benefits and assume the
obligations of AHP under the Bulk
20
Substance Supply Agreement as it relates to Substance,
including subcontracting to Horizon, or under which AHP would
enforce for the benefit of Horizon, with Horizon assuming
AHP's obligations, any and all rights of AHP against such
supplier. The purpose of such an arrangement would be for
Horizon to obtain price, quantity, destination and delivery
date terms comparable to AHP's rights under the Bulk
Substance Supply Agreement.
10.10 SURVIVAL. Subject to Section 10.5 hereof, the following
provisions shall survive expiration or termination of this
Agreement: Sections 2.8, 3.3, 4.1, 4.2, 4.3, 5.4, 10.9,
10.10, 12.6 and 12.7 and Articles 8, 9 and 11.
11. CONFIDENTIALITY.
11.1 NONDISCLOSURE OBLIGATION. Each of Horizon and AHP shall use
only in accordance with this Agreement and shall not disclose
to any Third Party any information including, without
limitation, Know-How, received by it from the other Party
(the "Information"), without the prior written consent of the
other Party. The foregoing obligations shall survive the
expiration or earlier termination of the last of the
Transaction Agreements to so expire or to be so terminated
for a period of five (5) years. These obligations shall not
apply to Information that:
(i) is known by the receiving Party at the time
of its receipt, and not through a prior
disclosure by the disclosing Party, as
documented by business records;
(ii) is at the time of disclosure or thereafter
becomes published or otherwise part of the
public domain without breach of this
Agreement by the receiving Party;
(iii) is subsequently disclosed to the receiving
Party by a Third Party who has the right to
make such disclosure;
(iv) is developed by the receiving Party
independently of the Information received
from the disclosing Party and such
independent development can be documented
by the receiving Party; or
(v) is required by law, regulation, rule, act or
order of any governmental authority or
agency to be disclosed by a Party, provided
that notice is promptly delivered to the
other Party in order to provide an
opportunity to seek a protective order or
other similar order with respect to such
Information and thereafter the disclosing
Party discloses to the requesting entity
only the minimum Information required to be
disclosed in order to comply with the
request, whether or not a protective order
or other similar order is obtained by the
other Party.
11.2 PERMITTED DISCLOSURES. Information may be disclosed to
employees, agents, consultants, sublicensees or suppliers of
the recipient Party or its Affiliates, but only to the extent
required to accomplish the purposes of this Agreement and
21
only if the recipient Party obtains prior agreement from its
employees, agents, consultants, sublicensees, suppliers or
Third Party manufacturers to whom disclosure is to be made to
hold in confidence and not make use of such Information for
any purpose other than those permitted by this Agreement.
Each Party will use at least the same standard of care as it
uses to protect proprietary or confidential information of
its own to ensure that such employees, agents, consultants,
sublicensees, suppliers or Third Party manufacturers do not
disclose or make any unauthorized use of the Information.
11.3 DISCLOSURE OF AGREEMENT. Neither Horizon nor AHP shall
release to any Third Party or publish in any way any
non-public information with respect to the terms of this
Agreement or concerning their cooperation without the prior
written consent of the other, which consent will not be
unreasonably withheld or delayed, provided, however, that
either Party may disclose the terms of this Agreement to the
extent required to comply with applicable laws, including,
without limitation, the rules and regulations promulgated by
the United States Securities and Exchange Commission,
provided, however, that prior to making any such disclosure,
the Party intending to so disclose the terms of this
Agreement shall (i) provide the nondisclosing Party with
written notice of the proposed disclosure and an opportunity
to review and comment on the intended disclosure which is
reasonable under the circumstances and (ii) shall seek
confidential treatment for as much of the disclosure as is
reasonable under the circumstances, including, without
limitation, seeking confidential treatment of any information
as may be requested by the other Party. Notwithstanding any
other provision of this Agreement, each Party may disclose
the terms of this Agreement to lenders, investment bankers
and other financial institutions of its choice solely for
purposes of financing the business operations of such Party
either (i) upon the written consent of the other Party or
(ii) if the disclosing Party uses reasonable efforts to
obtain a signed confidentiality agreement with such financial
institution with respect to such information on terms
substantially similar to those contained in this Article 11.
11.4 PUBLICITY. Subject to Section 11.3, all publicity, press
releases and other announcements relating to this Agreement
or the transactions contemplated hereby shall be reviewed in
advance by, and shall be subject to the approval of, both
Parties. The Party responding to a request for such approval
shall respond to the other Party in writing within five (5)
days of such request.
11.5 WAIVER. AHP agrees that, upon AHP and its supplier of
Substance entering into the Bulk Substance Supply Agreement,
AHP shall waive its rights under the Confidentiality
Agreement among AHP, Horizon, EJ Financial and Mikart, the
License Agreement and this Agreement to the extent such
agreements prohibit Horizon from communicating with such
supplier and entering into agreement(s) regarding the
Substance with such supplier.
12. MISCELLANEOUS.
12.1 FORCE MAJEURE. Neither Party shall be liable to the other for
delay or failure in the performance of the obligations on its
part contained in this Agreement if and to the extent that
such failure or delay is due to circumstances beyond its
control (including, without limitation, AHP's inability to
obtain, from a Third Party,
22
sufficient quantities of the raw materials needed for the
manufacture of Substance to meet its manufacturing
obligations hereunder) which it could not have avoided by the
exercise of reasonable diligence. It shall notify the other
Party promptly should such circumstances arise, giving an
indication of the likely extent and duration thereof, and
shall use all Commercially Reasonable Efforts to resume
performance of its obligations as soon as practicable.
12.2 ASSIGNMENT.
12.2.1 ASSIGNMENT BY HORIZON. Horizon may assign any or all
of its right or obligations under this Agreement in
the Territory to any of its Affiliates, for so long
as they remain Affiliates. In addition, Horizon may
assign any or all of its rights or obligations under
this Agreement in the Territory in conjunction with
a merger or acquisition of Horizon. Horizon may not
otherwise assign any of its rights or obligations
under this Agreement without AHP's prior written
consent, which consent shall not be unreasonably
withheld. AHP shall respond to such requests by
Horizon for assignment within thirty (30) days from
such request. Any permitted assignment shall not
relieve Horizon of its responsibilities for
performance of its obligations under this Agreement.
12.2.2 ASSIGNMENT BY AHP. AHP may assign any or all of its
rights or obligations under this Agreement to any of
its Affiliates or to any Third Party, provided,
however, that AHP may assign all or part of its
obligations to a Third Party only after receiving
Horizon's prior written consent, which consent shall
not be unreasonably withheld or delayed; provided,
further, that such assignment shall not relieve AHP
of its responsibilities for performance of its
obligations under this Agreement. Notwithstanding
the foregoing, Horizon's consent shall not be
required for any assignment made by AHP in
connection with a merger or similar reorganization
of AHP or its parent company or the sale of all or
substantially all of AHP's or AHP's parent company's
pharmaceutical assets.
12.2.3 BINDING NATURE OF ASSIGNMENT. This Agreement shall
be binding upon and inure to the benefit of the
successors and permitted assigns of the Parties. Any
assignment not in accordance with this Section 12.2
shall be void.
12.3 NO WAIVER. The failure of either Party to require performance
by the other Party of any of that other Party's obligations
hereunder shall in no manner affect the right of such Party
to enforce the same at a later time. No waiver by any Party
hereto of any condition, or of the breach of any provision,
term, representation or warranty contained in this Agreement,
whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or breach, or of any
other condition or of the breach of any other provision,
term, representation or warranty hereof.
12.4 SEVERABILITY. If a court or other tribunal of competent
jurisdiction should hold any term or provision of this
Agreement to be excessive, or invalid, void or unenforceable,
the offending term or provision shall be deleted or revised
to the
23
extent necessary to be enforceable, and, if possible,
replaced by a term or provision which, so far as practicable,
achieves the legitimate aims of the Parties.
12.5 RELATIONSHIP BETWEEN THE PARTIES. Both Parties are
independent contractors under this Agreement. Nothing herein
contained shall be deemed to create an employment, agency,
joint venture or partnership relationship between the Parties
hereto or any of their agents or employees, or any other
legal arrangement that would impose liability upon one party
for the act or failure to act of the other Party. Neither
Party shall have any express or implied power to enter into
any contracts or commitments or to incur any liabilities in
the name of, or on behalf of, the other Party, or to bind the
other Party in any respect whatsoever.
12.6 CORRESPONDENCE AND NOTICES.
12.6.1 ORDINARY NOTICES. Correspondence, reports,
documentation, and any other communication in
writing between the Parties in the course of
ordinary implementation of this Agreement shall be
delivered by hand, sent by facsimile, overnight
courier or by airmail to the employee or
representative of the other Party who is designated
by such other Party to receive such written
communication.
12.6.2 EXTRAORDINARY NOTICES. Extraordinary notices and
communications (including, without limitation,
notices of termination, force majeure, material
breach, change of address) shall be in writing and
sent by prepaid registered or certified air mail, or
by facsimile confirmed by prepaid registered or
certified air mail letter, and shall be deemed to
have been properly served to the addressee upon
receipt of such written communication.
12.6.3 ADDRESSES. In the case of Horizon, the proper
address for communications and for all payments
shall be:
Horizon Pharmaceutical Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxx Xxxxx
Fax: (000) 000-0000
and in the case of AHP, the proper address for
communications and for all payments shall be:
Wyeth-Ayerst Laboratories
000 Xxxxxxxxx Xxxxxx
Xx. Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Senior Vice President, Global
Business Development
Fax: (000) 000-0000
with a copy to:
American Home Products Corporation
0 Xxxxxxx Xxxxx
00
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Senior Vice President and General
Counsel
Fax: (000) 000-0000
12.7 CHOICE OF LAW. This Agreement is subject to and governed by
the laws of the State of Delaware, excluding its conflict of
law provisions.
12.8 ENTIRE AGREEMENT; AMENDMENT. This Agreement, together with
the other Transaction Agreements and the Confidential
Disclosure Agreement between AHP and X.X. Financial
Enterprises Inc. (an equity holder in Horizon) dated April
28, 1998, and all the covenants, promises, agreements,
warranties, representations, conditions and understandings
contained herein and therein sets forth the complete, final
and exclusive agreement between the Parties and supersedes
and terminates all prior and contemporaneous agreements and
understandings between the Parties, whether oral or in
writing. There are no covenants, promises, agreements,
warranties, representations, conditions or understandings,
either oral or written, between the Parties other than as are
set forth in the Transaction Agreements. No subsequent
alteration, amendment, change, waiver or addition to this
Agreement shall be binding upon the Parties unless reduced to
writing and signed by an authorized officer of each Party. No
understanding, agreement, representation or promise, not
explicitly set forth herein, has been relied on by either
Party in deciding to execute this Agreement.
12.9 HEADINGS. The headings and captions used in this Agreement
are solely for the convenience of reference and shall not
affect its interpretation.
12.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be an original and all of
which shall constitute together the same document.
12.11 FURTHER ACTIONS. Each Party agrees to execute, acknowledge
and deliver such further instruments, and to do all other
acts, as may be necessary or appropriate in order to carry
out the purposes and intent of this Agreement including,
without limitation, any filings with any antitrust agency
which may be required.
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized representatives of the Parties as of the date set forth below.
AMERICAN HOME PRODUCTS CORPORATION HORIZON PHARMACEUTICAL CORPORATION
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------ ------------------------------
25
SCHEDULE 1.19
SPECIFICATIONS
PRODUCT SPECIFICATIONS ARE SET FORTH ON THE FOLLOWING 22 PAGES
26
[***] - CONFIDENTIAL TREATMENT REQUESTED
GENERAL PRODUCT INFORMATION
LABEL CLAIM: Glycopyrrolate, [***]
DOSAGE FORM: [***]
LOT SIZE: [***]
PACKAGE SIZE: [***]
PRODUCT CODE: 7824
NDA NO.: [***]
RX OR OTC: Rx
OFFICIAL NF OR USP: [***]
DEA CLASS: [***]
FORM 6 NO.: [***]
EXPIRATION DATE: 3 years
MFD. BY: X. X. Xxxxxx Company
TABLE OF CONTENTS
PAGE 2 - GENERAL PRODUCT INFORMATION
PAGE 3 - IN-PROCESS - DURING COMPRESSION
PAGE 7 - BULK FINISHED PRODUCT - AFTER COMPRESSION
PAGE 17 - REGULATORY SPECIFICATIONS AND METHODS
PAGE 19 - PACKAGED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
27
[***] - CONFIDENTIAL TREATMENT REQUESTED
AFTER COMPRESSION
SAMPLING
This sample is the composite of in-process samples collected during the
compression of the lot and shall consist of at least [***] tablets.
TESTS
Description
------------
Specification: A white, round, flat-face, beveled-edge, compressed tablet, [***] mm
in diameter and [***] mm thick. One side is engraved [***] - 7824, the
obverse side is scored. Odor shall be characteristic of product.
Test: [***]
Weight (Average of [***] Tablets)
---------------------------------
Specification: Theoretical average weight [***]
Acceptable range [***]
Test: Record the average tablet weight of [***] tablets as determined from
[***].
Dissolution - Glycopyrrolate
----------------------------
Specification: [***]
Principle [***]
Reagants [***]
Calculation [***] glycopyrrolate [***]
Discussion
Start-up and Shut-down of System
Assay-Glycopyrrolate
[***]
28
[***] - CONFIDENTIAL TREATMENT REQUESTED
Specification: [***]
Reagants: [***]
glycopyrrolate [****]
glycopyrrolate [****]
Procedure [***]
Calculation [***] glycopyrrolate [****]
[***]
Calculation [***] glycopyrrolate [****]
Calculation [***] glycopyrrolate [***]
Discussion
Start-up and Shut-down of System
Assay - Glycopyrrolate
Specification: [***]
Reagents [***]
glycopyrrolate [****]
glycopyrrolate [****]
Procedure [***]
Calculation [***] glycopyrrolate [****]
Glycopyrrolate Identification
[****] glycopyrrolate [****]
Uniformity of Dosage Units
29
[***] - CONFIDENTIAL TREATMENT REQUESTED
Method: [***]
Specification: [***]
30
[***] - CONFIDENTIAL TREATMENT REQUESTED
Test: [***]
Principles [***]
Apparatus [***]
Reagents [***]
gylcopyrrolate [****]
Procedure 1. [***]
2. [***]
3. [***]
Calculation [***]
31
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
[****] GLYCOPYRROLATE ROBINS PRODUCT
PRODUCT GRAPH OMITTED
32
PRODUCT SCAN GRAPH OMITTED
33
[***] - CONFIDENTIAL TREATMENT REQUESTED
ACCEPT/REJECT
[***]
1. [***]
2. [***]
34
[***] - CONFIDENTIAL TREATMENT REQUESTED
INSPECTION
During the packaging of the product at X. X. Xxxxxx Company, the
following [***].
PRODUCT IDENTIFICATION
[***]
SHELF SAMPLE
[***]
NET CONTENTS OF CONTAINERS
Specification: [***]
Test: [***]
BOTTLES AND CAPS
Specification: Complies with standard
Test: Each bottle sampled shall be examined for the
following:
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
6. [***]
7. [***]
35
[***] - CONFIDENTIAL TREATMENT REQUESTED
LABELS
Specification: Complies with standard
Test: The label of each bottle sampled shall be examined for the following:
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
CARTONS
Specification: Complies with standard
Test: Each carton sampled shall be examined for the following:
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
INSERTS
Specification: Complies with standard
Test: The insert of each bottle sampled shall be examined for the following:
1. [***]
2. [***]
3. [***]
4. [***]
36
[***] - CONFIDENTIAL TREATMENT REQUESTED
STANDARDS
[***] by the X.X. Xxxxxx Company. [****] by the X.X. Xxxxxx Company [****]
ACCEPT/REJECT
[***]
1. [***]
2. [***]
Specification Approved May, 1990
Xxxxxx X. Xxxxxxxxx, Xx. A. Xxxxx Xxxxxx
Director, Quality Assurance Vice President, GMP
X. X. Xxxxxx Company X. X. Xxxxxx Company
-------------------------------- --------------------------------
37
[***] - CONFIDENTIAL TREATMENT REQUESTED
GRAPHIC
WHITEHALL
ROBINS
WHITEHALL ROBINS
ANALYTICAL DEVELOPMENT - TEST METHOD
Method: [***] Glycopyrrolate [****] Glycopyrrolate
WH#/Product: [***]
Method#: [***]
Date:
Supersedes: [***]
Developed by: [***]
Checked by:
Reviewed by:
38
[***] - CONFIDENTIAL TREATMENT REQUESTED
-------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
COMPOSITE ASSAY FOR GLYCOPYRROLATE [***]
Reagents
Glycopyrrolate - Whitehall Robins [***]
Apparatus
[***]
Preparation of Standard Solution
NOTE: Prepare this solution fresh daily.
1. [***]
2. [***]
3. [***]
4. [***]
1 of 7
39
[***] - CONFIDENTIAL TREATMENT REQUESTED
-------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
-------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
Preparation of Sample Solution
1. [***] glycopyrrolate [****] glycopyrrolate [***]
2. [***]
3. [***]
4. [***]
5. [***]
Procedure
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
2 of 7
40
[***] - CONFIDENTIAL TREATMENT REQUESTED
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
6. [***]
7. [***] glycopyrrolate [****]
Manual Calculations
[***] glycopyrrolate [****]
glycopyrrolate [****]
3 of 7
41
[***] - CONFIDENTIAL TREATMENT REQUESTED
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
PRODUCT EQUATION OMITTED
where:
Au = absorbance of sample
As = absorbance of standard
Ws = weight of standard, in mg
n = number of tablets used
CONTENT UNIFORMITY FOR GLYCOPYRROLATE [***]
Reagents
Refer to section under [***]Glycopyrrolate".
Apparatus
Refer to section under [***]Glycopyrrolate."
Preparation of Standard Solution
Refer to section under [***]Glycopyrrolate."
4 of 7
42
[***] - CONFIDENTIAL TREATMENT REQUESTED
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
Preparation of Sample Solution
1. [***]
2. [***]
3. [***]
4. [***]
Procedure
Refer to section under [***]Glycopyrrolate."
Manual Calculations
[***] glycopyrrolate [****]
For [***] tablets:
PRODUCT EQUATION OMITTED
5 of 7
43
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
PRODUCT EQUATION OMITTED
For [****] tablets:
PRODUCT EQUATION OMITTED
6 of 7
44
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
--------------------------------------------------------------------------------
GRAPHIC ANALYTICAL DEVELOPMENT - TEST METHOD
--------------------------------------------------------------------------------
Robinul Tablets, Robinul Forte Tablets
WH#: [***] Date: [***]
Method#: [***] Supersedes: [***]
--------------------------------------------------------------------------------
PRODUCT EQUATION OMITTED
where:
Au = absorbance of sample
As = absorbance of standard
Ws = weight of standard, in mg
7 OF 7
45
[***] - CONFIDENTIAL TREATMENT REQUESTED
BULK FINISHED PRODUCT SPECIFICATIONS AND TEST PROCEDURES
SCHEDULE 5.1
INITIAL PURCHASE PRICES
Product Strength Package Size AHP NDC# Initial Purchase Price
------- --------- ------------ -------- ----------------------
Robinul tablets 1 mg bottles of 100 7824-63 $ [***]
Robinul tablets 2 mg bottles of 100 7840-63 $ [***]
Robinul tablets 2 mg bulk N/A $ [***] per [***]
Robinul tablets 2 mg bulk N/A $ [***] per [***]
46
EXHIBIT G
PENDING LIABILITIES
1. The following civil actions are pending with respect to AHP's sale of the
Product in the Territory:
Xxxxxxxxx x. Xxxxx, et al., Superior Court of California,
County of Xxx Xxxxx, Xx. 000000
