EXHIBIT 10.10
LICENSE AND SUPPLY AGREEMENT
This Supply Agreement, dated as of the ninth day of February 2000, is
between GENEVA PHARMACEUTICALS, INC., a Colorado corporation, with offices at
0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Geneva"), and OBAGI
MEDICAL PRODUCTS, INC., a California corporation, with offices at 000 Xxxxxx
Xxxxx, Xxxx Xxxxx, XX 00000.
WHEREAS, Buyer wishes to purchase Tretinoin Cream in 20gm and 45gm tubes
of 3 strengths, 0.1%, 0.05%, and 0.025% (hereinafter, the "Products") from
Geneva; and
WHEREAS, Geneva is willing to supply the Products to Buyer for resale upon
the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS
(a) The following terms shall have the meanings set forth or
where indicated, below for purposes of this Agreement:
"ACT" means the Federal Food, Drug and Cosmetic Act, as amended from
time to time.
"AFFILIATE" of any person shall mean any corporation or other business
entity which, directly or indirectly, controls, is controlled by, or is under
common control with, such person. For purposes of this definition, the term
"control" (as used in the terms "controls," "controlled by," and "under
common control with") means either (a) holding fifty (50) percent or more of
the outstanding voting securities of an issuer or (b) in the case of an
entity that has no outstanding voting securities, having the right to fifty
(50) percent or more of the profits of the entity, or having the right in the
event of dissolution to fifty (50) percent or more of the assets of the
entity.
"ANDA" means an abbreviated new drug application filed with the FDA with
respect to the manufacture or sale of a Product.
"BUYER INDEMNIFIED PARTIES" shall have the meaning given thereto in
Section 10.2 hereof.
"FDA" means the United States Food and Drug Administration.
"FORMS" shall have the meaning given thereto in Section 18.3 hereof.
"GENEVA INDEMNIFIED PARTIES" shall have the meaning given thereto in
Section 10.1 hereof.
"GMP" means current good manufacturing practices as defined from time to
time in Section 501(a)(2)(B) of the Act and the applicable rules and
regulations of the FDA.
"INITIAL TERM" shall have the meaning given hereto in Section 11.1
hereof.
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"ORDER DATE" shall have the meaning given thereto in Section 4.2 hereof.
"PROCEDURES" shall have the meaning given thereto in Section 3.8 hereof.
"PRODUCTS" shall have the meaning set forth in the recitals to this
Agreement.
"TERRITORY" means the United States.
2. PURCHASE AND SALE; LICENSE
2.1 During the term of this Agreement, and subject to the provisions
hereof, Geneva agrees to supply to Buyer, and Buyer agrees to purchase from
Geneva, all of Buyer's requirements for the Products. All orders for the
Products shall be made pursuant to written purchase orders delivered to
Geneva in accordance with Section 4 hereof. All purchase orders from Buyer
shall be in multiples of full batch sizes which are commonly used in routine
production of the Products. Minimum batch sizes are set forth on Schedule A.
The parties reserve the right to negotiate modified minimum batch sizes on
mutually agreeable terms and conditions. Each shipment to a different
shipping location shall be considered a separate shipment for purposes of
this Agreement.
2.2 Geneva hereby grants to Buyer the non-exclusive right to market,
sell, and distribute the Products in the Territory under the Obagi label or
such other labels owned or controlled by Buyer, and consented to by Geneva.
3. PRICE; PAYMENT, MARKETING RESPONSIBILITY; MISCELLANEOUS TERMS AND
CONDITIONS OF SALE
3.1 (a) The Transfer Price payable by Buyer for the Products shall
be as set forth in Schedule B attached hereto. Geneva will make every attempt
to maintain firm prices during the term of the contract on the Products.
However, market conditions may change. Geneva, therefore, reserves the right
to adjust prices from time to time based on market conditions and the cost of
goods sold. In the event that a third party manufacturer receives FDA
approval for its ANDA for the Products, which causes the market price for the
products to decline, the parties agree to negotiate in good faith to decrease
Transfer Prices for the Products.
3.2 (a) Buyer shall bear the cost of any sales taxes of any kind,
nature or description whatsoever applicable to the sale of any Product sold
by Geneva to Buyer and Buyer shall forthwith pay to Geneva all such sums upon
demand unless Buyer is exempt therefrom and, as evidence thereof, provides to
Geneva, at the time of the submission of its order to Geneva, with tax
exemption certificates or permits acceptable to the appropriate taxing
authorities.
(b) Shipping terms are F.O.B. Geneva shipping point. Buyer shall
bear the cost of freight from Geneva's shipping location to Buyer's location.
3.3 Each release of Product for shipment to Buyer shall constitute a
separate sale, obligating Buyer to pay therefor, subject to the terms of this
agreement, whether said shipment is
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in whole or only partial fulfillment of any order or confirmation issued in
connection therewith. Geneva agrees to invoice each separate shipment on a
separate invoice.
3.4 (a) Geneva shall issue its invoice to Buyer at the time of
shipment. Payments for Product sold hereunder shall be made by Buyer to
Geneva within thirty (30) days after date of invoice, terms net 30 days. If
Buyer fails to pay any invoiced amount when due, a service charge will be
imposed by Geneva on such outstanding amount for each month or portion
thereof that such amount is overdue equal to, on an annualized basis, the
lesser of the rate of interest then announced by Citibank, N.A. as its prime
rate or the highest rate permitted by law.
(b) Geneva shall have the right to cancel any orders accepted by
it, or to delay the shipment of Product ordered hereunder, or to vary,
change, or limit the amount or duration of credit to be allowed to Buyer, if
Buyer fails to meet the established payment schedules.
(c) If Geneva is prevented from charging any price in effect by
any governmental law, order, regulation or ruling, Buyer shall pay Geneva any
amount not paid as a result of such prohibition with respect to any Product
ordered under this Agreement as soon as such law, order, regulation or ruling
is rescinded or modified so as to permit payment of such amounts.
(d) Subject to Section 5.1 hereof, all payments shall be in the
full amount stated in each invoice, without any setoffs, deductions or
withholdings of any kind, except that payment shall not be required to the
extent that Buyer reasonably determines that it has the benefit of a credit
relating to any previously issued invoice and follows the procedures set
forth in the remainder of this Section 3.4(d). Buyer shall not make any such
deduction or set off against amounts owed to Geneva, without first providing
thirty (30) days written notice to Geneva of the existence of a dispute. Such
written notice shall include enough detail to enable Geneva to evaluate the
claim, including but not limited to, a description of the type of claim
(i.e., pricing, rebate, shortage claim) as well as the relevant items,
prices, quantities, relevant time period. The parties agree to negotiate in
good faith to resolve any such dispute.
3.5 Buyer shall be responsible for all marketing, distribution, and
related costs incurred by it in connection with its sale of the Products.
3.6 (a) The parties shall cooperate to develop mutually acceptable
procedures to ensure compliance with applicable advertising and promotion
regulations.
(b) Buyer represents, warrants and covenants (i) that all marketing,
labeling, sale and distribution shall be in accordance with State and Federal
laws and regulations, (ii) that Buyer will submit marketing materials for the
Products to Geneva for approval prior to distribution, which approval shall
not be unreasonably withheld or delayed, and (iii) that no Products will be
promoted for off-label use(s).
3.7 Buyer shall not use, or claim any right or license with respect to,
any trademark, trade name, service xxxx or logo of Geneva, and Geneva shall
not use, or claim any right or license with respect to, any trademark, trade
name, service xxxx or logo of Buyer.
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3.8 To the extent not otherwise covered in this Agreement, purchases of
Product hereunder will be made pursuant to Buyer's standard purchase order
procedures (the "Procedures"). Such Procedures may be modified from time to
time with the written consent of Geneva, which consent shall not
unreasonably be withheld. Notwithstanding the foregoing, it is understood
that the provisions of this Agreement shall control in the event of any
conflict between such provisions and Buyer's Procedures.
4. FORECASTS; SHIPMENTS; ORDERS
4.1 In order to assist Geneva in planning its production runs for the
Products, Buyer shall provide Geneva, at least five (5) days prior to the
beginning of each month, with a twelve (12) month rolling forecast of the
quantities of each Product required by Buyer, by month, for the following
twelve (12) months, together with the approximate dates upon which it will
request the deliveries of such Product be made. In. addition, Buyer shall
submit a forecast for the succeeding twelve (12) months in quarterly
estimates and the next three (3) years in annual increments. It is understood
that such rolling forecasts are intended to be Buyer's estimates of its
purchase requirements; they shall not be binding upon either party.
Notwithstanding the foregoing, Buyer acknowledges that production and plant
capacity planning will be based on such forecasts. Buyer shall be bound to
purchase from Geneva 100% of those quantities of Product set forth in any
such forecast as being the requirements of Product for the first three (3)
months of each forecast.
4.2 Geneva shall, within thirty (30) business days after receipt of
each such forecast notify Buyer of any prospective problems it might have in
respect of meeting Buyer's forecasted order quantities or estimated delivery
dates.
4.3 Buyer shall provide Geneva with its firm orders for the Products
within the lead times set forth on Schedule A (which Schedule A describes
different lead times for different Products) and Geneva, within five (5)
business days after the date that an order is deemed placed with it (the
"Order Date"), shall acknowledge receipt of Buyer's order and confirm that
the order can be supplied. For purposes hereof, the Order Date shall be the
earlier of (a) the date that Geneva receives the order via mail or (b) the
date of receipt of the telecopied order.
4.4 (a) Each order shall specify the quantity of Product ordered. The
order shall be delivered to such location as Geneva designates in writing to
Buyer from time to time. Buyer shall be bound to purchase from Geneva, within
one year from the Order Date, 100% of those quantities of Product set forth
in any such purchase order. On or after the Order Date, Buyer will specify
individual shipment release dates for the quantities ordered. Subject to the
terms of the following sentence, Buyer is under no obligation to accept
shipments nor commence payment of invoices prior to the shipment release
date. Any quantity of Product, which Buyer has not yet requested released for
shipment within one year from the Order Date, shall nonetheless be released
for shipment by Geneva, invoiced to Buyer and promptly paid for by Buyer
within the time period set forth in Section 3.4(a).
(b) Buyer shall provide Geneva with a list of approved carriers.
Geneva shall make all necessary shipping arrangements with a carrier listed
by Buyer as "approved" and shall deliver all orders to Buyer F.O.B. Geneva
shipping point.
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(c) When a shipment of Product is ready for delivery, Geneva shall
notify Buyer of the expected delivery dates (including, to the extent
applicable, details or port, date and time) to enable delivery and collection
to be coordinated.
4.5 If Geneva fails to release for shipment any Product, in the
quantities ordered by Buyer and released for shipment, within thirty (30)
business days of the date of delivery as specified in the shipment release
and acknowledged by Geneva, then Buyer shall have the right to cancel the
amount of the purchase order which is unfulfilled, and obtain the unsupplied
quantity of such generic Product from any other generic manufacturer. In such
event, Geneva shall pay to Buyer the difference between the contract price
and Buyer's actual cost of such replacement product (subject to the
obligation of Buyer to reasonably mitigate its damages). Said right shall
apply only to the extent that such purchase order is unfulfilled. A purchase
order shall be deemed filled and closed if (a) a Buyer orders full batch
sizes and Geneva delivers the appropriate number of full batches, regardless
of actual quantities, or (b) the quantity of Product delivered is within ten
percent (10%) of the quantity ordered.
4.6 (a) Buyer shall be responsible for all label artwork; provided;
however, that Geneva shall be responsible for the review and approval of such
artwork and any future modifications thereto, and shall be responsible for
final packaging production.
(b) Geneva shall purchase all materials and packaging components
for the Product. Buyer agrees to be held responsible for the Transfer Price
of all obsolescent inventory and inventory remaining as a result of changes
in Purchase Order requirements or the exercise of the rights of termination
in accordance with Article 11 of this Agreement, provided Geneva has ordered
to maintain inventory levels within normal lead items described on Schedule
A, and/or standard container sizes and/or minimum order quantities. Geneva
will use reasonable commercial efforts to mitigate obsolescence via
adjustments to open orders. Buyer will not be responsible for obsolescent
inventory in excess of the lead times set forth in the forecast provided on
Schedule A hereto.
5. INSPECTION OF SHIPMENTS
5.1 Buyer shall inspect all Product delivered hereunder for defective
or adulterated Product immediately upon receipt and shall provide Geneva with
written notice of any such defective or adulterated Product within thirty
(30) days of receipt. Defective or adulterated Products, excluding those
Products suffering from defects or adulteration as a result of shipper's
action or failure to act, shall hereinafter be referred to as, "Damaged
Product." If within such thirty (30) day period, Buyer notifies Geneva that
in its opinion the defects or adulteration are not as a result of shipper's
action or failure to act, Buyer agrees to review its results with Geneva's
Quality Assurance Department to confirm the existence of Damaged Product.
Pending final determination of the existence of Damaged Product, Buyer's
obligation to pay for the Damaged Product shall be suspended. Upon a
determination that such product is or was not Damaged Product, Buyer shall
immediately pay to Geneva the full invoice price for such product. If both
parties agree that the shipment, or any part thereof, is Damaged Product,
then Geneva shall, at Buyer's option, (a) deliver replacement Product to
Buyer as soon as reasonably practical thereafter (but, in any event, within
ninety (90) days after the initial notification by
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Buyer), (b) refund to Buyer (by cash or credit) the purchase price paid by
Buyer with respect to the amount of Product which is determined to be Damaged
Product or (c) cancel that portion of the purchase order to the extent of the
Damaged Product in which event Buyer shall have no obligation to pay for such
Damaged Product. If the parties disagree as to the existence of a problem,
they will then submit representative samples of the shipment to a mutually
acceptable independent testing lab and the results of said lab shall be
binding on the parties and the costs associated with such submission shall be
borne by the party against which the lab decides.
5.2 (a) Notwithstanding any other provisions of this Agreement, Buyer
agrees, if so requested by Geneva, to return to Geneva, at Geneva's expense,
any Product that is, or is claimed to be, Damaged Product or otherwise to
dispose of such Product as Geneva may direct.
(b) Buyer shall be deemed to have accepted any shipment of Product
hereunder, and except as otherwise specifically provided in Section 10.2
hereof, unless Geneva receives the written notice required under Section 5.1
within the time period specified herein.
5.3 Notwithstanding anything in this Agreement to the contrary, it
shall be Buyer's responsibility to accurately forecast its purchasing needs.
Assuming that no more than six months have elapsed off the expiration dating
described on Schedule A and that at least 18 months expiration dating remains
for any Product as of the date of Geneva's receipt of the purchase order,
Geneva shall not be required to accept any returns of, or reimburse Buyer
for, or issue a credit with respect to, any short-dated or expired Product
from such shipment. Geneva shall have no responsibility to Buyer because of
Buyer's inability to sell its inventory of Product on a timely basis
resulting in such inventory, or any portion thereof, becoming short-dated or
expired.
5.4 Except in the case of a claim for indemnification under Section
10.2 or 10.3 hereof, (a) no claim by Buyer of any kind whatsoever relating to
any Product or this Agreement, whether arising in contract tort, negligence,
breach of warranty, strict liability, or under any other legal theory, shall
be greater in amount than the purchase price paid for such Product with
respect to which damages are claimed and (b) Geneva's sole liability, if any,
to Buyer, and Buyer's sole remedy in respect of any such claim, shall in no
event exceed such purchase price. Geneva may satisfy any such liability at
its option either by (i) replacing such Product or (ii) refunding to Buyer
(by cash or credit) the purchase price paid therefor.
6. TRADE SECRETS AND CONFIDENTIALITY
6.1 (a) Geneva or Buyer may, from time to time, disclose to the other
valuable information of a technical or nontechnical nature that is not
generally known to the trade or public. Each of Geneva and Buyer agrees that
during the period that this Agreement is in effect and for a period of five
(5) years thereafter, it will not disclose to anyone in any manner whatsoever
(except as authorized in writing by the other party) any such information
("Confidential Information"), including, without limitation, intellectual
property, inventions, works of authorship, trade secrets or know-how or other
information relating in any way to the products, processes, and services of
such other party which becomes known to Geneva or Buyer, as the case may be,
during the period that this Agreement is in effect. The obligations of this
Section 6 shall not apply to information that (i) is known to a party as
shown by written records prior to the disclosure of such information by
the other party; (ii) becomes public information or
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is generally available to the public other than by an unauthorized act or
omission of a party; or (iii) is received by a party from third parties who
are in rightful possession of such information and who are lawfully entitled
to disclose such information to such party.
(b) Upon termination of this Agreement, each of Geneva and Buyer
shall return to the other all materials and documents that include
Confidential Information of the other party, including all copies of such
materials and documents, and shall make no further use of such Confidential
Information.
6.2 Each party agrees to advise those of its employees who receive any
other party's Confidential Information that such information (a) is
proprietary and confidential to such party and (b) shall not be disclosed to
anyone except as authorized by this Agreement or otherwise authorized by such
party in writing. Each party further agrees to take such precautions as it
normally takes with its own confidential and proprietary information to
prevent unauthorized disclosure of another party's Confidential Information.
6.3 In the event that a party becomes legally compelled to disclose
another party's Confidential Information, it will provide such other party
with prompt advance notice in writing so that such other party may, at its
discretion, defend against such legal obligation, seek a protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Section 6. In the event that such protective order or other remedy is not
obtained, a party will furnish only that portion of such other party's
Confidential Information which, it is advised by written opinion of
counsel, is legally required and will exercise its best efforts to obtain
reliable assurance that confidential treatment will be accorded such
Confidential Information.
6.4 Each party acknowledges that any unauthorized disclosure of any
portion of another party's Confidential Information shall cause irreparable
injury to such other party and that no adequate or complete remedy shall be
available to such other party to compensate for such injury. Accordingly,
each party hereby also acknowledges that such other party shall be entitled
to injunctive relief in the event of such unauthorized disclosure by a party
or any of its employees in addition to whatever remedies it might have at law.
7. MUTUAL REPRESENTATIONS AND WARRANTIES
Each of the parties hereto represents and warrants to the other that:
(i) it is a corporation duly organized, existing, and in good standing in
accordance with the laws of its state of organization; (ii) it has all
requisite legal and corporate power and authority to enter into this
Agreement; (iii) when executed by the corporate officers whose names appear
on the signature page hereof, this Agreement shall be a valid and binding
obligation of the parties enforceable in accordance with its terms, subject
to laws of general application relating to bankruptcy, insolvency, and the
relief of debtors; (iv) the execution and delivery of this Agreement and
consummation of the transactions contemplated hereby will not constitute a
breach or default under any other agreement to which it is party or by which
it is bound; (v) it will comply with all applicable laws, rules and
regulations in the conduct of its responsibilities and activities under this
Agreement.
8. SAFETY AND HEALTH--RESPONSIBLE CARE
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8.1 From time to time Geneva may provide Buyer with safety and health
information, including, without limitation, warnings, material safety data
sheets, precautionary safety measures, and instructions on proper care, use
and handling, storage, and disposal of the Product. Buyer agrees to observe
all precautions and instructions provided by Geneva and to communicate all
such environmental, safety and health information to its employees.
8.2 Buyer shall follow safe handling, storage, transportation, use, and
disposal practices with respect to the Product, including, but not limited
to, those required by federal, state, and local laws, regulations, and
ordinances and those set forth in the Responsible Care Codes of the Chemical
Manufacturers Association.
8.3 Geneva shall have the right to inspect Buyer's locations (in the
company of a Buyer representative) at reasonable times and upon reasonable
advance notice to determine Buyer's compliance with applicable laws and
regulations and with Geneva's instructions on proper care, use, handling,
storage and disposal of the Product.
8.4 Buyer shall defend, indemnify and hold Geneva harmless against all
claims, liabilities, and expenses (other than Geneva's consequential,
incidental, special or indirect damages) arising from Buyer's failure to
comply with this Section 8.
9. QUALITY OF THE PRODUCT
9.1 Geneva hereby warrants that no Product constituting or being a part
of any shipment made by Geneva pursuant hereto shall at the time of any such
shipment be adulterated or misbranded within the meaning of the Act, or
regulations promulgated thereunder, as such law or regulation is constituted
and in effect at the time of any such shipment. Notwithstanding the
foregoing, Geneva makes no misbranding representation with respect to Buyer's
promotional activities.
9.2 The parties hereto agree to mutually cooperate with each other, as
required by pertinent provisions of the Act and the regulations promulgated
thereunder, in connection with any recalls, complaints or adverse reactions
relating to the Product manufactured and sold hereunder. In the event of any
recalls relating to the Product, all costs associated therewith shall be borne
by the party whose action or inaction causes such recall. For purposes of
this Section 9.2, the cost of any recall shall be deemed to be any
administrative and shipping expenses incurred by Buyer's customers and
reimbursed by Buyer, unless otherwise agreed in writing by the parties hereto.
9.3 GENEVA HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE. Except as otherwise specifically provided in this
Agreement, Buyer assumes all risks and liabilities whatsoever resulting from
the transportation, handling, storage, use and disposal of the Products,
whether used singly or in combination with other substances.
9.4 a. Product quality complaints received by the Buyer will be
forwarded upon receipt to a quality assurance representative to be designated
by Geneva. It is Geneva's
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responsibility to investigate these complaints or forward such complaints to
the manufacturer, if applicable, and to provide Buyer with a follow-up report
and required corrective actions, if any.
b. Adverse event reports received by the Buyer will be forwarded upon
receipt to Geneva's designated quality assurance representative. It is
Geneva's responsibility to fulfill its regulatory and reporting requirements
related to the adverse event reports.
10. INDEMNIFICATION
10.1 Subject to Sections 10.3 and 10.4 hereof, Buyer shall defend,
indemnify and hold harmless Geneva, its officers and directors, and its
successors and permitted assigns (collectively referred to as the "Geneva
Indemnified Parties"), from, against and in respect to any and all losses,
obligations, liabilities, penalties and damages (other than the Geneva
Indemnified Parties' consequential, incidental, special or indirect damages)
and reasonable costs and expenses which any of the Geneva Indemnified Parties
may incur or suffer in connection with any and all deficiencies, actions
(including, without limitation, any proceedings to establish insurance
coverage) and/or judgments, with which any of them may be faced and which
arise out of or are based upon third party claims or investigations asserted
or initiated against any of them arising from the use, labeling, sale or
marketing of the Product, except to the extent such claims arise from
(a) manufacturer and/or Geneva's failure (i) to meet the manufacturing
specifications contained in the Product's ANDA or (ii) to manufacture and
package the Product in compliance with the Act and with the FDA's GMP and
other regulations promulgated under the Act.
10.2 Subject to Section 10.4 hereof, Geneva shall defend, indemnify
and hold harmless Buyer, its officers and directors, and its successors and
permitted assigns (collectively referred to as the "Buyer Indemnified
Parties"), from, against and in respect of any and all losses, obligations,
liabilities, penalties and damages (other than the Buyer Indemnified Parties'
consequential, incidental, special or indirect damages) and reasonable costs
and expenses which any of the Buyer Indemnified Parties may incur or suffer
in connection with any and all deficiencies, actions (including, without
limitation, any proceedings to establish insurance coverage) and/or
judgments with which any of them may be faced and which arise out of or are
based upon third party claims or investigations asserted or initiated against
any of them to the extent such claims arise from (a) manufacturer or Geneva's
failure (i) to meet the manufacturing specifications contained in the
Product's ANDA or (ii) to manufacture and package the Product in compliance
with the Act and with the FDA's cGMPs and other regulations promulgated under
the Act. Geneva's indemnification obligations under this Section 10.3 shall
not be subject to the limitation of liability set forth in Section 5.5 hereof.
10.3 Without limiting its obligations under Section 10.2, Geneva shall
defend, indemnify, and hold harmless the Buyer Indemnified Parties from,
against, and in respect to any and all losses, obligations, liabilities,
penalties, damages, and reasonable costs and expenses which any of the Buyer
Indemnified Parties may incur or suffer in connection with any claim of
infringement of any patent or other proprietary right made against any of
them and based, in whole or in part, upon Buyer's activities properly
undertaken pursuant to this Agreement.
10.4 The foregoing indemnification obligations of Geneva and Buyer are
subject to the following: (a) the indemnifying party is notified by or on
behalf of the indemnified party in writing promptly after a claim is made, a
suit is filed or an action or investigation is initiated
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(each, a "Proceeding") against the indemnified party; (b) the indemnifying
party is permitted to defend, control, conduct and prosecute, in the
indemnifying party's sole discretion and by counsel of the indemnifying
party's choosing, the defense of such Proceeding brought against the
indemnified party; (c) subject to the last sentence of this Section 10.4, the
indemnifying party has the right in its sole discretion to settle, compromise
or otherwise terminate the Proceeding and each of Geneva and Buyer expressly
agrees that the indemnifying party may do so in its name; (d) the
indemnified party shall refrain from settling any such Proceeding without the
indemnifying party's prior written consent; (e) the indemnified party shall
not compromise the position of the indemnifying party by admission,
statements or conduct in a way that could prejudice the defense, control,
conduct or prosecution of said cause of action; and (f) the indemnified party
shall cooperate with the indemnifying party in the defense, conduct,
prosecution or termination of the Proceeding, including the furnishing of
information and the assistance from employees of the indemnified party at the
indemnifying party's reasonable request and at no charge to the indemnifying
party. Notwithstanding anything in clause (c) above to the contrary, no
compromise or settlement of any Proceeding may be effected by the
indemnifying party without the indemnified party's consent (which consent
shall not be unreasonably withheld), unless, in connection therewith, there
is no finding or admission of any violation by the indemnified party of
(i) any law, rule or regulation or (ii) the rights of any person.
10.5 Promptly after receipt by a party of notice of the threat or
commencement of any Proceeding against it in respect of which indemnity may
be sought against the other party hereunder, the parties shall determine
their respective indemnification responsibilities under this Section 10. If
the parties are unable to agree, they shall retain an outside expert whose
determination in this regard shall be final and binding. If the parties are
unable to agree on an outside expert or such expert is unable to make a
determination as to the parties' respective indemnification responsibilities,
then such determination shall await the completion of the Proceeding. Pending
such completion, the parties shall conduct the defense of the Proceeding as
agreed between them. In any event, the determination by a court of competent
jurisdiction, with respect to the fault or responsibility of the parties,
shall be conclusive and binding for purposes of determining a right to
indemnification under this Article 10.
10.6 a. Buyer and Geneva shall maintain during the performance of this
Agreement the following insurance or self-insurance in amounts no less than
that specified for each type:
i) General liability insurance with combined limits of not
less than $1,000,000 per occurrence and $1,000,000 per
accident for bodily injury, including death, and property
damage; and
ii) Product Liability Insurance with limits not less than
$2,000,000.
b. Upon request, Geneva and Buyer shall each provide the other with
evidence of its insurance or self insurance. Each party shall provide the
other thirty (30) days prior written notice of any cancellation or change in
its coverage.
10.7 UNDER NO CIRCUMSTANCES SHALL ANY PARTY BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF THE OTHER,
INCLUDING BUT NOT LIMITED TO DAMAGES FOR LOST PROFITS OR
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INTERRUPTION OF BUSINESS ARISING OUT OF OR RELATING TO THE SUPPLY OF PRODUCTS
UNDER THIS AGREEMENT.
11. TERM AND TERMINATION
11.1 This Agreement shall commence on the date hereof and shall
continue in effect for three (3) years (hereinafter referred to as the
"Initial Term") and may be renewed thereafter upon mutual agreement between
the parties; provided, however, that either party may terminate this
Agreement by giving the other party at least ninety (90) days prior written
notice of termination.
11.2 Either party may terminate this Agreement upon the giving of prior
written notice to the other party if the other party (a) has not fully
complied, in all material respects, with the terms and conditions hereof and
(b) fails to cure any such material noncompliance within forty-five (45) days
after receipt of such notice; in such event, this Agreement shall terminate
effective on the later of (a) the expiration of such forty-five (45) day
period or (b) the date specified in the written notice from the terminating
party. In addition, either party may terminate this Agreement with immediate
effect upon giving written notice to the other party in the event of
insolvency, assignment for the benefit of creditors, or bankruptcy proceedings
by or against the other party. In the event of termination by Buyer pursuant
to this Section 11.2 as a result of material breach by Geneva, and subject to
the provisions of Section 4.4, Geneva shall use honor any purchase order
accepted prior to the date notice of termination is given. In the event of
termination by Geneva pursuant to this Section 11.2 as a result of Buyer's
material breach, Buyer acknowledges and agrees that Geneva shall be entitled
to cancel any purchase order accepted prior to the date notice of termination
is given, and shall not be obligated to ship any Product ordered by Buyer
pursuant to such purchase order.
11.3 The termination of this Agreement shall not release Buyer from the
obligation to pay any sum that may be owing to Geneva (whether then or
thereafter due to Geneva) or operate to discharge any liability that had been
incurred by either party prior to any such termination.
11.4 During the period between the giving of any notice of termination
of this Agreement pursuant to this Section 11 and the effective date of
termination, all Product shall be delivered to Buyer solely on a C.O.D. basis.
11.5 Notwithstanding any termination of this Agreement, the provisions
of Section 3.6(b), and Articles 5,6,7,8 and 10 shall remain in effect.
12. FORCE MAJEURE
12.1 Neither party shall be liable for any failure to deliver or
receive or any delay in delivery or receipt of any shipment when such failure
or delay shall be caused (directly or indirectly) by fire; flood; accident;
explosion, equipment or machinery breakdown; sabotage; strike, or any labor
disturbance (regardless of the reasonableness of the demands of labor); civil
commotions; riots; invasions; wars (present or future); acts, restraints,
requisitions, regulations, or directions of any governmental authority;
voluntary or mandatory compliance by a party with any request of any
governmental authority, or any officer, department, agency, or committee
11
thereof; voluntary or mandatory compliance by a party with any request for
material represented to be for purposes of (directly or indirectly) producing
articles for national defense or national defense facilities; shortage of
labor, fuel, power or raw materials; inability to obtain supplies; failures
of normal sources of supplies; inability to obtain or delays of
transportation facilities; any act of God; or any cause (whether similar or
dissimilar to the foregoing) beyond the reasonable control of a party.
12.2 Except as provided below, if a force majeure event occurs, then
the affected party's performance shall be excused and the time for
performance shall be extended for the period of delay or inability to perform
due to such occurrence. If, however, any such event shall delay any shipment
hereunder or the receipt thereof for more than thirty (30) days beyond the
scheduled delivery date, then (a) if such event is suffered by Buyer and not
also Geneva, Geneva shall have the right, at its option, to cancel such
shipment, and (b) if such event is suffered by Geneva and not also Buyer,
Buyer shall have the right to cancel its order and to purchase from a third
party the amount of Product ordered without incurring any liability to Geneva
with respect thereto. If any such disability exists for more than ninety (90)
days, the party not under such disability may terminate this contract without
liability to the other party by giving such other party thirty (30) days'
prior written notice of termination, and this Agreement shall terminate on
such thirtieth (30th) day unless prior thereto the force majeure event ceases
to exist and the party giving the notice of termination is so notified in
writing.
13. ASSIGNABILITY
No party shall assign or otherwise transfer this Agreement or any
interest herein or any right hereunder without the prior written consent of
the other party, except that either party may, without the necessity for such
consent, assign this Agreement or any interest herein or any right hereunder,
to any of its Affiliates, or to any party which acquires a majority in
interest of Buyer's or Geneva's assets or capital stock. Any such purported
assignment, transfer, or attempt to assign or transfer any interest or right
hereunder except in compliance with this Section 13 shall be null, void and of
no effect.
14. WAIVER; SEVERABILITY
14.1 Each party acknowledges and agrees that any failure on the part of
the other party to enforce at any time, or for any period of time, any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of such provisions or of the right of such other party thereafter to enforce
each an every such provision.
14.2 The rights and remedies set forth herein shall be the exclusive
rights and remedies of the parties.
14.3 If and to the extent that any provision of this Agreement is
determined by any legislature, court or administrative agency to be in whole
or in part invalid or unenforceable, such provision or part thereof shall be
deemed to be surplusage and, to the extent not so determined to be invalid or
unenforceable, each provision hereof shall remain in full force and effect
unless the purposes of this Agreement cannot be achieved. In the event any
provisions shall be held invalid, illegal or unenforceable the parties shall
use commercially reasonable
12
efforts to substitute a valid, legal and enforceable provision which insofar
as practical implements the purposes hereof.
15. GOVERNING LAW
This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of Colorado as though made and to be fully
performed in said State. Any proceeding to enforce or resolve disputes of any
nature arising under or relating to this Agreement shall be brought
exclusively before the courts of the State of California or of the United
States of America for the Central District of California.
16. NOTICES
All notices required or permitted hereunder shall be given in writing
and sent by facsimile transmission, or mailed postage prepaid by first-class
certified or registered mail, or sent by a nationally recognized express
courier service, or hand-delivered to the following addressees:
Geneva: Geneva Pharmaceuticals, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Fax: 303/000-0000
Attention: President
Buyer: Obagi Medical Products, Inc.
000 Xxxxxx Xxxxx, Xxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Fax: 562/000-0000
Attention: President
or to such other address as may be specified in a notice given to the other
party in accordance with this Section. Any notice, if sent properly
addressed, postage prepaid, shall be deemed made three (3) days after the
date of mailing as indicated on the certified or registered mail receipt, or
on the next business day if sent by express courier service or on the date of
delivery or transmission (if delivered or sent during ordinary business
hours, otherwise on the next business day) if hand-delivered or sent by
facsimile transmission.
17. CAPTIONS
The captions of each section of this Agreement are inserted only as a
matter of convenience and for reference and in no way shall be deemed to
define, limit, enlarge, or describe the scope of this Agreement and the
relationship of the parties hereto, and shall not in any way affect this
Agreement or the construction of any provisions herein.
18. ENTIRE UNDERSTANDING; MODIFICATION
18.1 This Agreement represents and incorporates the entire
understanding between the parties hereto with respect to the subject matter of
this Agreement, and each party acknowledges that there are no warranties,
representations, covenants or understandings of any kind, nature or
13
description whatsoever made by either party to the other, except such as are
expressly hereinabove set forth.
18.2 Except with respect to the Exhibits and Schedules attached
hereto, which may be amended as provided elsewhere in this Agreement, this
Agreement shall not be subject to change or modification except by the
execution of a writing specified to be an explicit amendment to this Agreement
duly executed by both parties hereto.
18.3 The parties recognize that, during the term of this Agreement, a
purchase order, acknowledgment form or similar routine document
(collectively "Forms") may be used to implement or administer provisions of
this Agreement. Therefore, the parties agree that the terms of this Agreement
prevail in the event of any conflict between this Agreement and the printed
provisions of such Forms, or typed provisions of Forms that add to, vary,
modify or are at conflict with the provisions of this Agreement.
19. PARTIES' RELATIONSHIP
Nothing in this Agreement shall create between the parties a
partnership, joint venture or principal-agent relationship and, for the
avoidance of doubt, each of Geneva and Buyer now confirms and accepts (for
itself and as agent on behalf of its Affiliates) that it is an independent
contractor trading for and on its own behalf.
20. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original and all of which together shall constitute
a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GENEVA PHARMACEUTICALS, INC. OBAGI MEDICAL PRODUCTS, INC.
CORPORATION
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------------- -------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxx
----------------------------------- -----------------------------
Title: Sr. Vice President, Sales/Marketing Title: President & CEO
----------------------------------- ----------------------------
Date: 2/15/00 Date: 2/15/00
14
SCHEDULE A
----------
LEAD TIMES, BATCH SIZES, AND EXPIRATION DATING
-------------------------------------------------------------------------------
Product Description Size Lead Batch Size Exp.
time dating
-------------------------------------------------------------------------------
Tretinoin Cream 0.025% 20 gm tube 120 days Batch is 49,000 2 years
-------------------------------------------------------------------------------
Tretinoin Cream 0.025% 45 gm tube 120 days Batch is 21,750 2 years
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Tretinoin Cream 0.05% 20 gm tube 120 days Batch is 49,000 2 years
-------------------------------------------------------------------------------
Tretinoin Cream 0.05% 45 gm tube 120 days Batch is 21,750 2 years
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Tretinoin Cream 0.1% 20 gm tube 120 days Batch is 49,000 2 years
-------------------------------------------------------------------------------
Tretinoin Cream 0.1% 45 gm tube 120 days Batch is 21,750 2 years
-------------------------------------------------------------------------------
1
SCHEDULE B
----------
TRANSFER PRICE
--------------------------------------------------------------------
Product Description Size Transfer Price
--------------------------------------------------------------------
Tretinoin Cream 0.025% 20 gm tube [***]
--------------------------------------------------------------------
Tretinoin Cream 0.025% 45 gm tube [***]
--------------------------------------------------------------------
--------------------------------------------------------------------
Tretinoin Cream 0.05% 20 gm tube [***]
--------------------------------------------------------------------
Tretinoin Cream 0.05% 45 gm tube [***]
--------------------------------------------------------------------
--------------------------------------------------------------------
Tretinoin Cream 0.1% 20 gm tube [***]
--------------------------------------------------------------------
Tretinoin Cream 0.1% 45 gm tube [***]
--------------------------------------------------------------------
[***] Material has been omitted pursuant to a request for confidential
treatment and such material has been filed separately with the
Securities and Exchange Commission.
1
