Exhibit 10(ae)
Supply Agreement dated Janauary 17, 1997
January 17, 1997
Xx. Xxxxxxx X. Xxxxxx
Vice President-Finance
Lannett Company, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Dear Xxxx:
This will set forth the terms on which Lannett Company, Inc.,
("Lannett") will supply certain Products to ___________________________ for
distribution and sale by _______________ under the _____________ label.
1. Lannett will supply ______________, on the terms of this
agreement, all of _____________'s requirements of the Products listed in
Exhibit 1 (the "Products") for distribution and sale by ____________ in the
United States.
2. (a). Throughout the term of this Agreement, Lannett will not
directly sell or distribute Product to Hospitals and Managed Care
organizations (except ________________ ) and chain market segments. In the
event a potential customer expresses to Lannett or ______________ that it
prefers to establish business for Product directly with the manufacturer,
then the applicable party shall promptly notify the other of such potential
customer and Lannett will be able to sell directly to such customer. In
addition, ____________ will act as Lannett's exclusive sales agent for the
sale of Lannett label Products currently being sold by Lannett to the
current Lannett chain market customers, _____ and _______ . For these two
customers _____________ will submit each order to Lannett, and Lannett will
invoice and ship each order directly to the customer. Within thirty days
after the end of each calendar month, Lannett will pay ____________ a 3%
royalty on Lannett's net sales (net sales is defined as gross sales, less
discounts, rebates, returns and allowances) to _____ and _______ . New
Products sold to _____ and ______ , will be at the agreed upon transfer price
for both the Lannett and ___________ labels. ____________ shall not solicit
sales, directly sell or distribute Product to the customers included in
Exhibit 2 hereof, except when such sale is made to service Hospital, Managed
Care or Chain market segment customers. ___________ shall promptly inform
Lannett of sales arrangements to such parties which require sales to
customer included in Exhibit 2. Such Exhibit may be
Lannett/________
January 16, 1997
Page Two of Eight
modified from time to time by Lannett. The provisions of this section 2(a)
shall not be applicable to customers outside the U.S. Such international
customers shall be'handled on an individual basis.
2. (b). Lannett will deliver the finished Products to ___________ in
bottles as specified in ___________'s purchase order, except for
_____________________________________________ , which may be ordered in
bulk. In such case, _________ agrees to package Lannett's ___________ within
30 days of Date of Manufacture, and comply with the FDA's guidelines for
"Expiration Dating for Repackaging into Multiple-Use Containers, Including
Unit-of-Use Containers" attached as Exhibit 3.
2. (c). ____________ will distribute the Products under a __________
label in a manner consistent with their distribution as generic drugs.
Lannett will prepare the required labels and inserts for the Products other
than the Products ordered in bulk. ___________ will review and approve each
label and insert before final printing and Lannett will be responsible for
the accuracy and completeness of such materials and their compliance with
applicable laws and regulations. Lannett will make all regulatory filings
for advertising and other promotional materials for the Products which
Lannett is required to make as holder of the ANDA. Neither party will
acquire any rights in any trademarks or other identification owned or used
by the other in connection with the Products.
2. (d). ____________ will provide to Lannett on a monthly basis a
forecast of its orders for the Products for the then following six (6)
months, along with requested shipment dates for the Products. Each forecast
will be binding upon _________ with respect to orders forecasted for the
lesser of the then following three (3) months or the remaining term of this
agreement. At the time of each order, the parties will agree on shipment
dates for the order, and Lannett will make all shipments in accordance with
the agreed dates. Lannett shall use all reasonable efforts to deliver the
full quantities of the Products ordered by __________. Within thirty (30)
days following its receipt of each forecast, according to paragraph 2(d)
hereof, Lannett shall advise _________ in writing if it is unable to supply
the entire quantity forecasted. _________ shall have the right to purchase
from third parties, such quantities of the Products (at ________'s cost),
for which Lannett shall have advised that it will be unable to. supply, for
as long as Lannett's inability to supply continues and for a three (3) month
period following notice by Lannett that it is able to supply __________ the
entire quantity forecasted.
2. (e). Lannett will ship the Products FOB __________ via regular freight in
accordance with __________'s delivery schedule instructions.
Lannett/_______
January 16, 1997
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2. (f). The terms of this agreement will prevail over any
inconsistent terms in any order, acknowledgment or invoice.
3. Lannett will supply the Products to _________ at the sales
prices specified in Exhibit 1. _________ will pay the sales price for each
shipment on payment terms of net 30 days.
4. (a). Lannett guarantees that the Products delivered to
__________ will not be, on the date of shipment, adulterated or misbranded
within the meaning of the Federal Food, Drug and Cosmetic Act or an article
which may not, under the provisions of Sections 404, 505, or 512 of such
Act, be introduced into interstate commerce. Lannett further guarantees that
the Product will be manufactured in all respects in accordance with
requisite approvals by the FDA and will conform in all respects to current
good manufacturing practices, as published and amended from time to time by
the FDA. Lannett agrees to indemnify and hold harmless _________, its
directors, officers, employees and agents, from any liability or expense
they incur arising out of any personal injury caused by the Products or any
breach of Lannett's guarantees in this paragraph, 4(a). up to the limits of
Lannett's insurance.
4. (b). "Each party represents to the other that it will not take
any action or failure to take any action, that would cause a violation of
the Federal Food Drug and Cosmetic Act, or any other Federal, State or local
law during the terms of this contract" _________ agrees to indemnify and
hold harmless Lannett, its directors, officers, employees and agents, from
any liability or expense they incur arising out of any personal injury
caused by the Products or any breach of _________'s guarantees in this
agreement, up to the limits of ____________'s insurance.
4. (c). If any Product is found to fail to conform to applicable
FDA specifications, and such failure is due to the fault of Lannett, Lannett
will replace the Products at no cost to _____________. Lannett will bear the
cost of any recall, seizure or market withdrawal of any of the Products due
to acts or omissions of Lannett. If the Products are recalls and such recall
is due to ____________'s negligence or willful misconduct or a breach of any
representation or warranty of _________ hereunder, then __________ shall
bear all incremental out-of-pocket direct costs in connection with the
recall and Lannett shall not be responsible for replacing product free of
charge or for issuing a credit to _________'s account. The parties will
immediately notify each other of, and assist each other in answering,
customer or regulatory inquires and complaints concerning the Products.
Lannett/_______
January 16, 1997
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4. (d). Lannett will not be liable to ________ for any interruption
in the supply of the Products, if the interruption is caused by an act of
God or other event beyond the control of Lannett. Lannett will immediately
notify _______ of any anticipated long-term interruption and will diligently
attempt to resume supply as soon as possible.
5. This agreement will have an initial term of one (1) year and
will be extended for additional one (1) year terms unless either party gives
the other notice of termination at least six (6) months before the scheduled
termination date. Either party may terminate this agreement by written
notice if the other party materially breaches this agreement and fails to
cure the breach within sixty (60) days after written notice of the breach.
6. During the term of this agreement and thereafter, neither party
will use or disclose to others any confidential information furnished by the
other party.
7. This agreement will be governed by Pennsylvania law.
If this sets forth our agreement, please so indicate this agreement and fails
to cure the breach within sixty (60) days after written by signing below.
Sincerely,
_________________________ Lannett Company, Inc.
By:______________________ By: Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx
Vice President-Finance
Date: January 17, 1997
Lannett Company, Inc./___________________ Agreement
Xxxxxxx Company, Inc./____________________ Agreement
EXHIBIT I
Product Brand Reference Sales Price
------- --------------- -----------
(Confidential Information Omitted)
Page 5 of 8
Lannett Company, Inc./______________________ Agreement
EXHIBIT 2
(Confidential Information Omitted)
Page 6 of 8
Lannett Company, Inc./______________________ Agreement
EXHIBIT 3
Expiration Dating for Repackaging into Multiple-Use Containers,
Including Unit-of-Use Containers
A firm may repackage solid oral dosage form drug products into containers
that contain more than a single dosage unit, without conducting stability
studies to support the expiration dates used, provided all of the following
conditions are met:
1. The original bulk container of drug product has not been opened
previously and the entire contents are to be repackaged in one
operations; and
2. The repackaging and storage of the drug product are accomplished in
a controlled environment that is consistent with the conditions
described in the labeling for the bulk and repackaged drug product.
Where no temperature of humidity is specified, a controlled room
temperature with a relative humidity not exceeding 75 percent should
be maintained during repackaging or storage; and
3. The container materials meet the following standards:
(a) Where the original container is made of glass, the drug product is
repackaged into glass ( must meet current USP requirements for
Chemical Resistance Glass Containers (CRGC)); or
(b) Where the original container is a material other than glass (control
records must describe the type of material), the drug product is
repackaged into (1) CRGC glass or (2) a container that is
demonstrated to be equivalent to or exceeds the original container
in terms of water vapor permeation and compatibility with the drug
product (i.e, provides equivalent or increased protection against
oxidation, moisture, ingredient migration from container to drug and
vice versa); or
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Lannett Company, Inc./_________________________ Agreement
EXHIBIT 3 (continued)
Expiration Dating for Repackaging into Multiple-Use Containers
Including Unit-of-Use Containers
(c) Where the original container is polyethylene, the drug product is
repackaged into (1) CRGC glass or (2) a polyethylene container which
meets current USP standards for high density polyethylene containers
(i.e., multiple internal reflectance, thermal analysis, light
transmission, and water vapor permeation); and
4. The container is (a) equivalent to or exceeds the original container
specifications for light transmission of (b) meets current USP
standards for light transmission; and
5. The container meets or exceeds the special protective features of
the original container, for instance, the use of materials to
prevent leaking of container materials into the drug product or the
use of desiccants to maintain low moisture content; and
6. For container-closure system meets current USP standards for a
"tight container" or a "well-closed container", and
7. The expiration date used for the repackaged drug product does not
exceed the expiration date of the original bulk container.
Documentation must be on file to verify that all of the conditions listed
above are met.
If any of the above conditions ARE NOT met, the repackager must use
expiration dates that are determined by appropriate stability testing as
described in 21 CFR 211.166.
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