EXHIBIT 10.5
This Agreement is made the 16th day of August, 1994
BY AND BETWEEN
ELAN PHARMA, LTD.
An Irish company, of ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
AND
SCHEIN PHARMACEUTICAL, INC.
A US company, of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇
(hereinafter referred to as "THE CLIENT")
2.
WHEREAS
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- ELAN is beneficially entitled to the use of French Patent No. 7836084
(filing date 22nd December 1978) and various other patents have been
granted or are pending under the International Convention in relation to
the development and production of Drug Specific Dosage Forms for
pharmaceutical products.
- ELAN is knowledgeable in the development of Drug Specific Dosage Forms and
has developed a unique range of delivery systems designed to provide
newer and better formulations of medicaments.
- THE CLIENT is desirous of entering into a licensing agreement with ELAN by
virtue of which it will be free to market the PRODUCT under its own label
and trademark in the TERRITORY without infringing any of the patent or
KNOW-HOW rights held by ELAN.
- ELAN is prepared to develop, license and supply the DSDF in the TERRITORY.
NOW IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE I
---------
In the present Agreement the following definitions shall prevail:
1. NORMAL DOSAGE FORM shall mean Cruvail(R) 200mg capsules as sold in the
United States or any other agreed comparison product which contains
Ketoprofen as its sole pharmaceutical active ingredient.
2. DSDF shall mean the capsule Drug Specific Dosage Form which ELAN will
develop in the course of the PROJECT containing Ketoprofen as its
sole pharmaceutical active ingredient with an AB substitution rating
to the NORMAL DOSAGE FORM and to meet the specifications set out in
Appendix A, the specifications contained in the ANDA and any
applicable specifications as may from time to time be published under
the US Pharmacopoeia or established by applicable regulatory
authorities (the "Specifications").
3. $ shall mean United States Dollars.
4. NET SALES of the Product shall mean the total invoiced sales by THE
CLIENT of the PRODUCT in the TERRITORY to an arms length third party,
less usual and customary chargebacks, rebates, discounts, returns,
allowances, credit, sales and other consumption taxes. However, the
deduction against total invoiced sales for returns, other than Recall
Costs as defined in Article VII, Section 2 hereof, and bad debts shall
not be more than 5% in total.
3.
5. KNOW-HOW shall mean all proprietary knowledge, information and
expertise possessed by ELAN or to which Elan has rights relating to
the DSDF, whether or not covered by any patent, patent application
or future patent application, copyright design, trademark or other
industrial or intellectual property rights.
6. PROJECT shall mean all activity in order to develop the DSDF in
accordance with the plan shown in Appendix B.
7. PRODUCT shall mean the DSDF packaged and labelled for sale in the
TERRITORY.
8. PROFITS shall mean Net Sales of the PRODUCT less Full Cost.
9. TERRITORY means the United States of America, its territories and
possessions.
10. ELAN shall mean Elan Pharma Ltd. and any of its parent, subsidiary,
affiliate or associate companies.
11. FDA shall mean the United States Food and Drug Administration.
12. ANDA shall mean the Abbreviated New Drug Application for the DSDF
which ELAN shall file with and seek to have approved by the FDA and
which shall be held by ELAN.
13. FULL COST shall mean ELAN's cost of manufacture which shall be
determined on the basis of the following elements applicable to that
particular function: (a) direct material and labour costs of that
function; and (b) such indirect labour, factory, laboratory and other
overhead costs properly allocable to that function under Irish
generally accepted accounting principles. Overhead allocations shall
include expenses of plant maintenance and engineering, plant
management, receiving and warehousing, building occupancy and quality
control, but do not include corporate overhead or profit margins.
ARTICLE II: THE DSDF
---------- --------
1. ELAN shall develop the DSDF as laid out in the PROJECT set forth in
Appendix B hereto for the consideration set out hereinafter in Article
IV and shall use its best efforts to complete the Project in
accordance with the timetable set out in Appendix B.
2. ELAN shall remain proprietor of all its relevant trademarks and patent
rights relating to the DSDF and all KNOW-HOW relative thereto, but
hereby grants to THE CLIENT an exclusive licence to prepare, use,
promote, market, sell and distribute the PRODUCT in the TERRITORY
under the terms and conditions set out herein.
4.
This license shall also cover other AB rated versions including, but
not limited to other strengths, and delivery systems of the NORMAL
DOSAGE FORM which ELAN may develop by agreement with THE CLIENT for
development fees to be agreed. THE CLIENT hereby accepts such license
and confirms that, during the term of this Agreement and so long as
ELAN is providing the PRODUCT to THE CLIENT in accordance with Article
III hereof it will not market directly or indirectly any 200mg product
containing Ketoprofen as its sole Pharmaceutical active ingredient.
3. THE CLIENT shall ensure that all packaging, labelling, promotional
material and publications, scientific or otherwise, prepared by or on
behalf of THE CLIENT for the PRODUCT or concerning the PRODUCT, shall
contain in writing an acknowledgement that the PRODUCT is
manufactured by ELAN, and copies and/or samples thereof shall be
provided to ELAN on written request. Additionally, THE CLIENT
undertakes that all press releases announcements, oral or written
concerning the PRODUCT must refer to it as developed and manufactured
by ELAN for THE CLIENT.
4. THE CLIENT may market, sell and/or distribute the PRODUCT under any
trademark or trademarks, as it may from time to time choose, and THE
CLIENT shall consider the use of the trademark Ketelan. If THE CLIENT
so chooses to use the trademark Ketelan, it may do so without payment
or additional consideration to ELAN. Elan represents and warrants that
it is the owner of the Ketelan trademark and that the use of the
trademark Ketelan as contemplated hereby will not involve any
infringement of any existing trademark or rights of third parties.
Such trademarks, except Ketelan, shall remain the sole property of THE
CLIENT. ELAN shall not use or authorize any third party to use any
such trademark(s) whether during the term or thereafter.
5. ELAN shall, if requested, advise THE CLIENT in any technical matters
as may become necessary for the proper utilisation of its license.
ARTICLE III: PROCUREMENT OF THE DSDF
-------------------------------------
1. ELAN shall produce and supply to THE CLIENT exclusively its entire
requirements of the DSDF for the TERRITORY at the price, delivery
and other terms contained herein.
5.
1.1. 0n September 1st, 1995, THE CLIENT will provide ELAN with a
forecast of THE CLIENT's requirements for the Product for the 12
month period following FDA approval of the ANDA. This forecast
will be updated quarterly until ANDA approval of the PRODUCT.
Except as otherwise provided herein, all forecasts made hereunder
shall be made to assist ELAN in planning its production, and THE
CLIENT in planning sales, and are not represented to be binding
purchase orders, and shall be without prejudice to THE CLIENT's
subsequent firm orders for the PRODUCT in accordance with the
terms of this Agreement.
The parties acknowledge that it is in their mutual interest that
launch of the PRODUCT be effected as soon as possible following
ANDA approval, for which purpose the parties shall, in advance of
the ANDA approval, discuss and agree on the manufacture and
purchase of specific quantities of launch stocks, (the "Launch
Stocks"). In any event and notwithstanding any firm purchase
orders for such Launch Stocks which THE CLIENT has already placed
with ELAN, ELAN will notify THE CLIENT of its receipt of a pre-
approval letter for the ANDA for the PRODUCT from the FDA and THE
CLIENT will within seven (7) days of such notification place a
firm purchase order with ELAN for its Launch Stocks which
notification shall include a copy of the FDA pre-approval letter,
unless such purchase order has been submitted to ELAN prior to
that date. With respect to Launch Stocks ELAN agrees to supply
quantities of capsules of DSDF for delivery within one hundred and
twenty (120) days of placement of purchase orders. THE CLIENT will
use its best efforts to provide forecasts for deliveries for the
balance of the year in which the ANDA is approved which it
requires in addition to the Launch Stocks, on a monthly basis at
the beginning of each month.
Notwithstanding anything to the contrary contained herein, ELAN
agrees to use its best efforts to fill any orders for delivery
(including Launch Stock orders) within ninety (90) days after they
are placed by THE CLIENT provided they are within 25% plus or
minus THE CLIENT's forecast which is current as of the date of the
order. Elan also will use its best efforts to fill THE CLIENT's
requirements in excess of one hundred and twenty five (125%) of
forecasted amounts.
1.2. On September 30th of the year during which the ANDA is approved,
or if after October 1, within 15 days of such approval date, THE
CLIENT shall provide a forecast for purchases for the following
calendar year. The first calendar quarter of such forecast shall
be a binding purchase commitment of THE CLIENT. At the beginning
of each calendar quarter thereafter THE CLIENT will provide a
rolling annual forecast for the period beginning on the first day
of the calendar quarter following the calendar quarter in which
the forecast is made and the first calendar quarter of such
forecast shall be a binding purchase commitment of THE CLIENT.
6.
ELAN will use its best efforts to fill THE CLIENT's requirements
in excess of one hundred and twenty five (125%) percent of
forecasted amounts. Notwithstanding the foregoing, it shall be
the responsibility of ELAN to maintain reasonably adequate
inventories of the DSDF using its best efforts to satisfy the
requirements of THE CLIENT.
1.3. For all purchase orders for the PRODUCT other than the Launch
Stocks, THE CLIENT shall communicate to ELAN THE CLIENT's firm
purchase order for the PRODUCT for the quarter within forty-five
(45) days before the beginning of each calendar quarter during
the Term after approval of the ANDA by the FDA, specifying
shipment/delivery schedules within the time frames set forth in
Paragraph 1.6 hereof.
1.4. Within seven (7) days of the receipt of each such order, Elan
shall either confirm to THE CLIENT that it will meet THE CLIENT's
requirements for the quarter in accordance with the
shipment/delivery schedule, whereupon the purchase order shall be
confirmed, final and binding on the parties; or in the event of
ELAN's inability to meet such requirements or schedule, ELAN
shall notify THE CLIENT in detail as to the extent to which it
will not meet such requirements or schedule. ELAN may at such
time suggest modifications to THE CLIENT's requirements or
schedule. In the event of ELAN's suggesting any modifications,
THE CLIENT shall communicate to ELAN its acceptance or rejection,
in whole or in part, thereof within seven (7) days after THE
CLIENT's receipt of such communication, whereupon the purchase
order shall be confirmed, final and binding on the parties. To
the extent that THE CLIENT does not accept such suggested
modifications or that ELAN cannot meet THE CLIENT's requirements
or schedule, THE CLIENT may satisfy its requirements and/or
schedule for such quarter by purchasing the PRODUCT from
alternate sources as provided in Section 1.6 hereof. All
communications for the purpose of this Section 1.4 shall, to the
extent practicable, be by fax with confirmed answer back to the
other party, and only in the event of this being not possible for
any reason, will communications be in writing through overnight
courier services.
1.5. Shipments of the PRODUCT shall be made by ELAN promptly against
confirmed purchase orders placed by THE CLIENT with delivery
dates no later than one hundred twenty (120) days from the date
of THE CLIENT's placing the applicable purchase order. Products
shall be shipped F.O.B to THE CLIENT's manufacturing facility in
either the State of New York, the State of Connecticut, Puerto
Rico, or as otherwise instructed by THE CLIENT from time to time.
7.
1.6. If at any time during the Term, ELAN is or expects that it will
be unable to satisfy THE CLIENT's requirements of the PRODUCT, in
full or in part, ELAN promptly shall so notify THE CLIENT,
detailing the extent to which it will not meet such requirements.
THE CLIENT, without limiting any other remedy available to it,
may in its discretion meet the shortfalls therein from any
alternate source or sources. THE CLIENT, without limiting any
other remedy available to it, may also purchase PRODUCT from
alternate source or sources if a lawsuit has been commenced
alleging that the import, manufacture and/or distribution of the
PRODUCT as contemplated hereby infringes any patent or
proprietary right of any other person, firm or corporation.
1.7. ELAN shall deliver the DSDF to THE CLIENT and/or any party
designated by THE CLIENT in proper bulk packaging so as to permit
safe storage and transport.
1.8. Unless otherwise agreed to in writing between the parties, ELAN
shall supply the DSDF in the form of bulk capsules and THE CLIENT
shall be responsible for the packaging of said bulk capsules into
final market packaging.
1.9. All quantities of the DSDF delivered by ELAN hereunder shall
conform to the Specifications. All claims for failure of any
shipment of the DSDF to conform to Specifications must be made to
ELAN in writing within forty-five (45) days following delivery.
Failure to make a timely claim in the manner prescribed shall
constitute acceptance of the shipment. DSDF which has been
delivered and which does not conform to specifications shall be
replaced at ELAN'S cost. In the event of an unresolved dispute as
to conformity with Specifications of the DSDF, the parties shall
nominate an independent first class laboratory to undertake the
relevant testing. Its findings shall be conclusive and binding
upon the parties. All costs relating to this process shall be
borne exclusively by the unsuccessful party. Nothing contained in
this Paragraph 1.9 shall limit ELAN's indemnification obligations
under Article VIII, paragraph 8 hereof.
ARTICLE IV: REPRESENTATION AND WARRANTIES
---------- -----------------------------
1. Each of ELAN and THE CLIENT represents and warrants to the other
that it has such permits, licenses and authorizations of
governmental or regulatory authorities as are necessary to own
its respective properties, conduct its business and consummate
the transactions contemplated hereby.
2. Each of ELAN and THE CLIENT represents and warrants to the other
that it is not currently debarred, suspended, or otherwise
excluded by any United States governmental agency from receiving
Federal contracts.
8.
3. ELAN further represents and warrants that:
3.1. The PRODUCT sold by ELAN to THE CLIENT pursuant hereto shall be,
and remain throughout its stated shelf-life, in accordance with
the Specifications when packaged and stored according to the ANDA
specification.
3.2. The PRODUCT sold by ELAN to THE CLIENT pursuant hereto be of
good, merchantable and usable quality, free of defects, suitable
for the purposes for which the Product is to be used by, and
shall not be adulterated or misbranded within the meaning of the
US Food, Drug and Cosmetics Act.
3.3. The PRODUCT sold by ELAN to THE CLIENT pursuant hereto conform in
all respects to all applicable laws, regulations and approvals
governing the manufacture, packaging, importation and
distribution of the PRODUCT in the Territory, including, without
limitation, the FDA's current Good Manufacturing Practices.
3.4. Its manufacturing facilities conform in all respects to
applicable laws, regulations and approvals governing such
facility and are adequate to produce the quantities of the
PRODUCT contemplated hereby.
3.5. To the best of ELAN's knowledge, all bulk active ingredient used
in the manufacture of the PRODUCT shall be manufactured at an
FDA-approved manufacturing facility in accordance with current
Good Manufacturing Practices and current Bulk Drug Substances
Guidelines, and shall be in compliance with the applicable
specifications under the bulk product monograph, and shall not be
manufactured, imported or distributed in violation of any rights
of any third party.
3.6. Neither the purchase by THE CLIENT of the PRODUCT as contemplated
hereby nor the manufacture, marketing, sale or use of the PRODUCT
or any information or technology relating thereto, all as
contemplated hereby, will involve any infringement of any
existing patents or rights of third parties, including but not
limited to the NORMAL DOSAGE FORM, nor has ELAN received any
notice of any claimed infringement (including, without
limitation, patent infringement) in connection with the PRODUCT.
3.7. ELAN shall obtain adequate supplies of the bulk active compounds
contained in the PRODUCT to fulfill ELAN's obligations with
respect to the manufacture, sale and delivery of the PRODUCT
under this Agreement subject to purchase orders being received
from THE CLIENT.
9.
ARTICLE V: FINANCIAL PROVISIONS
--------- --------------------
1. Development Fees
----------------
In consideration of the development of the DSDF by ELAN under this
Agreement, THE CLIENT shall pay to ELAN a non-refundable development
fee of $375,000 (three hundred and seventy five thousand dollars) upon
commencement of Stage II B of the PROJECT.
2. License Fees
------------
In consideration of the rights and license granted to THE CLIENT by
virtue of this Agreement, THE CLIENT shall pay to ELAN License Fees as
follows, which shall be non-recoverable save as provided for in
Article V, Section 2.3 or Article VI, Section 9 below:
2.1. ********** **** ******* ******** on signature of this Agreement.
2.2. ********** **** ******* ******** on filing of the ANDA with the
FDA.
2.3. Subject to Section 2.4. below, on approval of the ANDA by the
FDA, THE CLIENT shall pay to ELAN a one-time license fee of ****
of IMS reported sales for the NORMAL DOSAGE FORM for the 12 month
period preceding FDA approval of the ANDA based on the most
current IMS sales data available at the time of ANDA approval
less **********. At the conclusion of the 60th day following the
entry of the PRODUCT into the generic market place in the
TERRITORY this license fee shall, if necessary, be reduced as set
forth in the table below. If such reduction is required, then THE
CLIENT shall recover the difference in the license fee previously
paid and the reduced license fee amount from ELAN's first PROFITS
due in accordance with Section 6 herein. THE CLIENT shall also
furnish ELAN with the details and launch dates of any other AB
rated versions of the NORMAL DOSAGE FORM which have been launched
in the United States prior to the ANDA approval of which it has
knowledge. The total license fee payable to ELAN shall be
calculated as:
-------------------------------------------------------------------------------------------------------------------
Total license fee as percent of IMS reported sales for The PRODUCT's entry in the generic market place
the normal dosage form for the 12 month period
preceding FDA approval of the ANDA
-------------------------------------------------------------------------------------------------------------------
**** 1st in the market for at least 60 days
-------------------------------------------------------------------------------------------------------------------
***** 2nd in the market place with at least a 60 day head
start prior to a third entry or 1st in the market
for less than 60 days
-------------------------------------------------------------------------------------------------------------------
***** All other cases
-------------------------------------------------------------------------------------------------------------------
* redacted pursuant to confidential treatment request.
10.
2.4. In the event that the amount calculated under Section 2.3 shall
be less than ********** **** ******* ********, then no additional
license fee shall be paid to ELAN, and the difference between the
amount calculated and the $2,000,000 (two million dollars),
(i.e., the total payments under Sections 2.1 and 2.2), up to a
maximum of ******** ***** ******* ******** ********
shall be allocable to a new project, to be agreed by the parties
in a manner to be discussed and agreed in good faith, and failing
such an agreement THE CLIENT shall be allowed to recover these
funds against future royalties and manufacturing income to ELAN
received from a licensee for the PRODUCT in the territory.
2.5. For the purpose of Section 2.3 any generic version of the NORMAL
DOSAGE FORM which is launched, distributed, licensed or otherwise
supplied for sale in the United States by or through rights
granted under the New Drug Application approved by the FDA for
the NORMAL DOSAGE FORM shall not be regarded as a competing AB
rated product.
3. Performance
-----------
THE CLIENT agrees to use reasonable commercial efforts in launching
and selling the PRODUCT in the TERRITORY as would be deemed
commensurate with the achievement of its own business aims for a
similar product of its own. THE CLIENT shall during and for a period
of four (4) years after the launch of the PRODUCT communicate with
ELAN regarding its objectives for and performance of the PRODUCT in
the marketplace subject to the confidentiality obligations contained
herein.
4. Additional Expenses
-------------------
THE CLIENT shall reimburse the following expenses within 30 days of
the date of invoicing of the expense.
4.1. Cost of DSDF or PRODUCT produced, at THE CLIENT's request, for
THE CLIENT for purposes other than commercial sale.
4.2. Cost of any additional development or registration work on the
DSDF or PRODUCT carried out by ELAN at the request of THE CLIENT
other than work outlined in Appendix B, including but not limited
to, pharmacokinetic studies and related assays, stability data
generation, clinical studies and compilation and submission of
dossiers required for registration purposes. ELAN's charges for
this work shall be cost plus fifteen (15%) percent.
* redacted pursuant to confidential treatment request.
11.
5. Price of DSDF
-------------
5.1. THE CLIENT agrees to apply the same policy in establishing a
sales price for the PRODUCT in the TERRITORY as THE CLIENT would
do in the case of its own products.
5.2. ELAN shall supply DSDF to THE CLIENT at its FULL COST, and ELAN
shall, during the course of the PROJECT, keep THE CLIENT apprised
as to its estimates of the FULL COST. On September 30 of each
year following FDA approval of the ANDA during the term, ELAN
shall notify THE CLIENT of its annual FULL COST increases which
shall be limited to (i) actual cost increases for the bulk
substance contained in the DSDF and (ii) the lesser of either
actual increases or the percentage increase in the consumer price
index in Ireland for all other costs related to the manufacture
of the DSDF. However, at no point shall ELAN be so forced to
supply the DSDF at a price less than the FULL COST as outlined
hereunder and in the event of such an occurrence, the parties
shall amicably discuss the situation with a view to agreeing a
mutually acceptable revised price structure. Payment for DSDF so
supplied shall be made by THE CLIENT within thirty (30) days
receipt of an invoice therefore.
6.1. Profit Allocation
-----------------
Within forty-five (45) days after the end of each calendar quarter
following the launch of the PRODUCT. THE CLIENT will calculate and
deliver to ELAN its share of the PROFITS as set forth below for
such quarter accompanied by an accounting of such PROFITS including
a detailed written statement of its NET SALES of the PRODUCT sold
and shipped to third party customers.
6.2.(i) During the Term and for a four (4) year period commencing with THE
CLIENT's first firm purchase order for PRODUCT, the PROFITS with
respect to all PRODUCT purchased from ELAN under this Agreement and
sold by THE CLIENT to third party customers shall be allocated
between THE CLIENT and ELAN as follows: ***** ******* ***** of
PROFITS shall be allocated to THE CLIENT and ***** ******* of
PROFITS shall be allocated to ELAN. Thereafter, the PROFITS with
respect to all PRODUCT purchased from ELAN under this Agreement and
sold by THE CLIENT to third party customers shall be allocated
between THE CLIENT and ELAN as follows: ***** ******* ***** of
PROFITS shall be allocated to CLIENT and ***** ******* *****
of PROFITS shall be allocated to ELAN.
* redacted pursuant to confidential treatment request.
12.
6.2.(ii) Notwithstanding the provisions of 6.2(i) if the PRODUCT's
wholesale acquisition cost ("WAC") falls below ****** per capsule
of 200 mg, then THE CLIENT shall receive an additional cumulative
five percent (5%) allocation of PROFITS over and above the
percentage of PROFIT allocated per 6.2.(i) above for every five
percent (5%) of ****** per capsule of 200 mg that the PRODUCT's
WAC falls below ****** per capsule of 200 mg. However, such
provision shall apply only to the point where twenty percent (20%)
of the PROFITS are allocated to ELAN and eighty percent (80%) of
the PROFITS are allocated to THE CLIENT following which there
shall be no further allocation of PROFITS.
7. Audits
------
For the one hundred eighty (180) day period following the close of
each calendar year during the Term, ELAN and THE CLIENT shall
provide each other's independent certified accountants (reasonably
acceptable to the other party) with access, during regular
business hours and upon reasonable prior request, and subject to
the confidentiality undertakings contained in this Agreement, to
such party's books and records relating to the PRODUCT solely for
the purposes of verifying the accuracy of calculations hereunder
for the calendar year then ended.
8. Transfer of Manufacturing
-------------------------
ELAN reserves the right to cease manufacturing the DSDF in the
event that the PROFITS fail to give it a margin of ******* *******
***** on its FULL COST subject to giving CLIENT 6 months prior
written notice. In such an event and if so requested by THE
CLIENT, ELAN shall grant to THE CLIENT the exclusive rights to
manufacture, or have manufactured by a third party designated by
CLIENT and acceptable to ELAN, the DSDF for the TERRITORY. In
return for such a right to manufacture the DSDF, THE CLIENT shall
pay to ELAN ***** ******* ***** of its PROFITS, which shall then
be calculated based on the equivalent FULL COSTS of THE CLIENT or
its appointed third party manufacturer. In the event of such a
transfer of manufacture, the parties shall agree on a reasonable
period of time under which said transfer is to be made and ELAN
shall continue to supply CLIENT with the PRODUCT until such
transfer is fully effected so that CLIENT's supply of the PRODUCT
shall be continuous and uninterrupted.
* redacted pursuant to confidential treatment request.
13.
9. New Project/Refund
------------------
9.1. In the event that the FDA does not approve the ANDA within five
(5) years from the date of this Agreement, and should THE CLIENT
within a six-month period thereafter then elect not to continue
with this Agreement, then the License Fees paid to ELAN under
paragraph 2.2 of this Article above (**** **********) shall be
allocated to a new project, to be agreed by the parties, in a
manner to be discussed and agreed in good faith. Failing such
agreement, THE CLIENT is allowed to recover these funds through
future royalty and manufacturing income received by ELAN from a
licensee in the territory.
9.2. If any technology covered by any of Elan's patents is utilized in
the development of the PRODUCT and such patent(s) are found by a
court of applicable jurisdiction to be invalid or unenforceable
in the TERRITORY and as result thereof a third party would be
entitled to manufacture or distribute the PRODUCT in the
TERRITORY utilizing any of the technology covered by such
patents, then the percentage of PROFITS to be allocated to ELAN
pursuant to Section 6.2 hereof shall be reduced by an amount
equal to the percentage point reduction of the market share of
the PRODUCT directly attributable to the third-party product.
9.3. If the importation, distribution, marketing, sale and/or use of
the PRODUCT in the TERRITORY as contemplated hereby is found by a
court of applicable jurisdiction to infringe the rights of a
third party and as a result thereof THE CLIENT would be precluded
from the distribution, marketing, sale and/or use of the PRODUCT
in the TERRITORY, then without limiting ELAN's indemnification
undertakings under Article VIII, Section 8, ELAN shall use
---
reasonable endeavors at ELAN's expense to obtain and maintain
-------------------------------------------------------------
such license as required for THE CLIENT to continue to market the
-----------------------------------------------------------------
PRODUCT in the TERRITORY.
------------------------
ARTICLE VI: REGISTRATION OF THE PRODUCT
---------- ---------------------------
1. ELAN shall prepare and shall submit to the FDA, promptly upon
completion of the Project, the completed ANDA for the PRODUCT and
shall use its best efforts to obtain as soon as possible FDA approval
of the ANDA. ELAN shall remit to THE CLIENT a completed copy of said
ANDA within thirty (30) days of its filing with the FDA. ELAN shall at
its sole discretion decide on the content of the ANDA, however, in the
event that ELAN so requests, THE CLIENT shall assist and advise ELAN,
such advice shall be provided free of charge unless THE CLIENT has
provided prior notification of the cost to ELAN on the compilation of
the ANDA.
2. ELAN shall notify THE CLIENT of the filing date and the approval date
of the ANDA within two (2) working days following said dates.
* redacted pursuant to confidential treatment request.
14.
3. If any additional information or clinical data are requested by the
FDA in order to obtain approval of the ANDA in the TERRITORY, ELAN and
THE CLIENT shall discuss and agree on an appropriate plan of action to
generate such data.
4. ELAN shall in a businesslike fashion keep THE CLIENT updated on the
status of the ANDA filing throughout its review by the FDA and shall
copy THE CLIENT on materially relevant correspondence with FDA
relating to the ANDA and/or the PRODUCT manufacturing facility.
5. THE CLIENT shall be responsible for obtaining all FDA approvals
necessary for THE CLIENT to package the DSDF into final marketing
packaging and for obtaining all applicable state and local regulatory
approvals for the distribution of the PRODUCT in the TERRITORY. ELAN
shall cooperate with THE CLIENT in obtaining such approvals. THE
CLIENT shall develop and provide ELAN with the commercial stability
data to support the ANDA and it shall provide this data in a time
frame consistent with the ANDA target filing date.
ARTICLE VII: CUSTOMER COMPLAINTS: RECALL
---------------------------
1. ELAN agrees to notify THE CLIENT promptly of any serious and
unexpected adverse reactions reported to ELAN outside of the TERRITORY
resulting from use of the PRODUCT, and on a regular basis with respect
to all other reports of adverse reactions. THE CLIENT shall notify
ELAN promptly of any complaints from third parties reported to THE
CLIENT involving any serious and unexpected adverse reactions
resulting from the use of the PRODUCT. All complaints relating to the
PRODUCT will be handled as described in Appendix C hereto, entitled
----------
"Complaint Handling Procedures".
2. In the event of any recall of the PRODUCT, as suggested or requested
by any governmental authority THE CLIENT shall perform the recall of
the PRODUCT in the TERRITORY. If the recall arises from THE CLIENT's
acts or omissions in the packaging, marketing, distribution, storage
or handling of the PRODUCT, the cost of goods sold, distribution
expenses and third-party recall expenses (collectively, "Recall
Costs") shall be borne by THE CLIENT. If the recall rises from ELAN's
acts or omissions in the manufacturing or delivery of the PRODUCT, the
Recall Costs shall be borne by ELAN. In all other events the Recall
Costs shall be shared equally. ELAN shall be responsible for all
recalls of the PRODUCT outside the TERRITORY.
15.
ARTICLE VIII: SUNDRY CLAUSES
------------ --------------
1. Secrecy
-------
1.1. Any information, whether of a written, oral or visual nature
pertaining to the PRODUCT that has been or will be communicated
or delivered by ELAN to THE CLIENT, and any information (whether
of a written, oral, or visual nature) from time to time
communicated or delivered by THE CLIENT to ELAN, including,
without limitation, trade secrets, business methods, and cost,
supplier, manufacturing and customer information, shall be
treated by THE CLIENT and ELAN, respectively, as confidential
information, and shall not be disclosed or revealed to any third
party whatsoever or used in any manner except as expressly
provided for herein; provided, however, that such confidential
information shall not be subject to the restrictions and
prohibitions set forth in this section to the extent that such
confidential information:
(i) is available to the public in public literature or
otherwise, or after disclosure by one party to the other
becomes public knowledge through no default of the party
receiving such confidential information;
(ii) was known to the party receiving such confidential
information prior to the receipt of such confidential
information by such party, whether received before or after
the date of this Agreement;
(iii) is obtained by the party receiving such confidential
information from a third party not subject to a requirement
of confidentiality with respect to such confidential
information; or
(iv) is required to be disclosed pursuant to: (A) any order of a
court having jurisdiction and power to order such
information to be released or made public; or (B) any
lawful action of a governmental or regulatory agency.
1.2. Each party shall take all such precautions as it normally takes
with its own confidential information to prevent any improper
disclosure of such confidential information to any third party;
provided, however, that such confidential information may be
disclosed within the limits required to obtain any authorization
from the FDA or any other United States or foreign governmental
or regulatory agency or, with the prior written consent of the
other party, which shall not be unreasonably withheld, or as may
otherwise be required in connection with the purposes of this
Agreement.
16.
1.3. Neither ELAN nor THE CLIENT will publicise the terms of this
Agreement in any way without the prior written consent of the
other party except as required by applicable law, regulation, or
judicial order.
1.4. This Article VIII, Section 1 and the obligations contained herein
shall survive for five (5) years after termination of this
Agreement, whether pursuant to Article VIII, Section 6, hereof,
by expiration of the Term of otherwise.
2. Patents
-------
With respect to any discoveries, inventions, improvements and
innovations relating to the DSDF and the Project, ELAN shall have the
right to apply for patent protection in its own name and at its own
expense. Should it however be doubtful whether a patent may be
obtained, then ELAN may at its sole discretion decide not to apply for
a patent in the TERRITORY. If such a patent is obtained THE CLIENT
shall have for the duration of this Agreement a right thereunder to
prepare, use and sell the PRODUCT as specified in Article II, Section
2 hereof.
3. Assignments
-----------
This Agreement may be assigned without THE CLIENT's consent by ELAN in
whole or in part subject to ELAN's maintaining full responsibility to
THE CLIENT for ELAN's undertakings, all liabilities, representations
and warranties expressed in this Agreement. ELAN or THE CLIENT may,
without the prior written consent of the other, assign this Agreement,
in whole or in part, to an Affiliate or to any entity which acquires
all or substantially all of the party's assets. For purposes of this
Agreement, an "Affiliate" shall mean any person, firm, corporation or
other business entity which directly or indirectly controls, is
controlled by, or is under common control with, ELAN or THE CLIENT, as
the case may be.
4. Parties Bound
-------------
This Agreement shall be binding upon and enure for the benefit of
parties hereto, their successors and permitted assigns.
5. Effect of Partial Invalidity
----------------------------
If any provision of this Agreement is held by any court or other
competent authority to be void or unenforceable in whole or in part,
this Agreement shall continue to be valid as to the other provisions
thereof and the remainder of the effected provision.
17.
6. Duration and Termination
------------------------
6.1. Subject to prior termination in accordance with Article V,
Section 9, the term ("Term") of this Agreement shall commence on
the date hereof and shall extend for a period of eighteen (18)
years, or for the life of any relevant patent, whichever is
longer. Thereafter, it shall continue automatically for
additional periods of 1 year unless terminated by THE CLIENT or
ELAN upon serving 12 months prior written notice to the other by
means of registered letter with acknowledgment of receipt.
6.2. Notwithstanding anything in this Agreement construable to the
contrary ELAN shall have the right to terminate this Agreement
if, following approval of the ANDA, THE CLIENT fails to market
the PRODUCT in the United States within three (3) months from the
receipt of the Launch Stocks.
6.3. This Agreement may be terminated in its entirety upon receipt of
a written notice of termination given by:
(I) The non-defaulting party in the event the other party shall:
(a) commit a material breach or default under this
Agreement, which breach or default shall not be
remedied within sixty (60) days after the receipt of
written notice thereof by the party in breach or
default; or
(b) become insolvent or seek protection under any
bankruptcy, receivership, trust deed, creditors
arrangement, composition or comparable proceeding, or
if any such proceeding is instituted against the other
party (which is not dismissed within 60 days); or
(c) fail to promptly secure or renew any license,
registration, permit, authorization or approval for the
conduct of its business in any manner contemplated by
this Agreement or if any such license, registration,
permit, authorization or approval is revoked or
suspended and not reinstated within sixty (60) days
18.
(II) THE CLIENT, if
(a) a lawsuit has been commenced alleging that the
manufacture and/or distribution of the PRODUCT as
contemplated hereby infringes any patent or other
proprietary right of any other person, firm or
corporation; or
(b) The PROFIT margin on the PRODUCT is less than fifteen
percent (15%); or
(c) the FDA does not approve the ANDA within five (5)
years from the date of this Agreement.
(III) ELAN, if any entity identified in Appendix D, attached
hereto, acquires more than 20% of THE CLIENT's voting
stock.
6.4. Upon exercise of those rights of termination as specified in
paragraphs 6.2 and 6.3, this Agreement shall automatically
terminate and be of no further legal force or effect.
6.5. Upon termination of this Agreement
(i) ELAN and THE CLIENT shall have no further obligations or
liabilities of any kind whatsoever under this Agreement
except as expressly provided in Article VIII, Section 1 and
Article VIII, Section 8.
(ii) Any sums that were due from THE CLIENT to ELAN or from ELAN
to THE CLIENT prior to the exercise of the right to
terminate this agreement as set forth herein, shall be paid
in full within 60 days of termination of this Agreement;
6.6. Termination of this Agreement (whether under this section, on
expiration of the Term or otherwise) shall be without prejudice
to any rights of either party against the other that may have
accrued to the date of such termination.
7. Sales Reports
-------------
The parties hereto agree to meet on a quarterly basis for the
first year following the initial launch of the PRODUCT, on a
semi-annual basis for the second and third year and on an annual
basis thereafter. At such meetings, THE CLIENT will report on the
ongoing sales performance of the PRODUCT in the TERRITORY,
including marketing approaches, promotion and advertising
material and campaigns, sales plans and results, performance
against competitors etc. At the request of ELAN, THE CLIENT shall
provide such information in written form at other times.
19.
8. Indemnifications
----------------
ELAN shall assume the sole and entire responsibility and shall
indemnify and save harmless THE CLIENT from any and all claims,
liabilities, expenses, responsibilities and damages, including
reasonable attorney's fees, by reason of any claim, proceedings,
action, liability or injury related to or arising out of
(i) THE CLIENT's purchase, importation, distribution,
marketing, sale and/or use of the PRODUCT as provided for
in this Agreement to the extent it was caused by the
negligence or wrongful acts or omissions of ELAN;
(ii) The PRODUCT's failure to meet Specifications;
or
(iii) any alleged infringement of the proprietary rights of third
parties by reason of the performance of this Agreement and
the purchase, distribution, marketing, sale and/or use of
the PRODUCT by THE CLIENT.
THE CLIENT shall assume the sole and entire responsibility and
shall indemnify and save harmless ELAN from any and all claims,
liabilities, expenses, including reasonable attorney's fees,
responsibilities and damages by reason of any claim, proceedings,
action, liability or injury arising out of any faults of the
PRODUCT resulting from the transport, packaging, storage or
handling of the PRODUCT by THE CLIENT to the extent that it was
caused by the negligence or wrongful acts or omissions on the
part of THE CLIENT.
This Section 8 and the obligations contained herein shall survive
termination of this Agreement, whether pursuant to Article VIII,
Section 6 hereof, by expiration of the Term or otherwise
9. Applicable Law
--------------
This Agreement shall be governed by and construed and interpreted
in accordance with the State of Georgia without regard to
principles of conflicts of law.
Each of ELAN and THE CLIENT hereby expressly submits to the
jurisdiction of the Federal and State Courts of the State of
Georgia, and agrees that service delivered in accordance with the
provisions of Article VIII, Section 11, hereof, shall be deemed
to be proper service upon it, and hereby waives all objections
and defenses as to personal defenses as to personal jurisdiction
in such jurisdiction or jurisdictions.
20.
10. New Markets
-----------
In the event that THE CLIENT is presented with the opportunity to
supply or to tender for supply of commercially significant
quantities of the PRODUCT to third parties for sale outside the
TERRITORY, and where THE CLIENT expresses to ELAN its interest in
pursuing such an opportunity, and where ELAN is contractually
free to do so, ELAN and THE CLIENT shall negotiate in good faith
appropriate terms governing such a supply transaction.
11. Notice
------
11.1. Any notice to be given under this Agreement shall be sent
in writing in English by registered airmail or telecopied
or telexed to:
- ELAN at
Elan Pharma Ltd.
Monksland, Athlone, Ireland
Attention: ▇. ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇ ▇▇▇▇▇
Telefax : 353 902 92427
- THE CLIENT at
Schein Pharmaceutical, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇
Attention: General Counsel
Telephone: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Telefax: 001 201 593 5820
or to such other address(es) as may from time to time be notified
by either party to the other hereunder.
21.
11.2. Any notice sent by mail shall be deemed to have been
delivered within seven (7) working days after despatch and
any notice sent by telex or telecopy shall be deemed to
have been delivered within twenty-four (24) hours of the
time of the despatch. Notices of change of address shall be
effective upon receipt.
12. Counterparts
------------
This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed to be an
original, but which together shall constitute one and the
same instrument.
13. Relationship
------------
The parties have no ownership interest in the other. The
relationship created by this Agreement is solely that of
buyer and seller. This Agreement does not create any
partnership, joint venture, principal-agent, or similar
business relationship between the parties. Neither party is
a legal representative of the other party and neither party
shall hold itself out as having the authority to represent
or act on behalf of the other in any capacity whatsoever.
Neither party shall assume or create any obligation,
representation, warranty or guarantee, express or implied,
on behalf of the other party for any purpose whatsoever nor
will it incur any liability whatsoever for which the other
party may become directly, indirectly or continentally
liable. Each party shall be fully responsible for all
actions of, and all costs incurred by, its employees,
agents, or representatives in carrying out its obligations
under this Agreement.
14. Insurance
---------
THE CLIENT and ELAN each agree to maintain in force, during
the Term, products liability insurance coverage in
minimum limits of $5,000,000 (five million dollars) and,
upon request, each party shall furnish to the other a
Certificate of Insurance; provided, however to so request
such Certificate shall not be deemed a waiver to the
party's obligations hereunder.
15. Entire Agreement
----------------
This Agreement, together with the Appendices hereto,
contains the entire agreement between the parties hereto
and supersedes any agreement between them with respect to
the subject matter hereof.
22.
IN WITNESS THEREOF the parties hereto have executed this Agreement in duplicate.
Signed by SCHEIN PHARMACEUTICAL, INC.
By: /s/ S Getraer
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Title: Executive Vice President
-----------------------------
Executed by ELAN PHARMA, LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Title: Director
-----------------------------
APPENDIX A
----------
PRODUCT/DSDF SPECIFICATIONS
---------------------------
The DSDF shall be an AB-rated (as the term is defined and accepted by the FDA)
equivalent to the 200mg Oruvail (R) capsule.
APPENDIX B
----------
DEVELOPMENT PROJECT
-------------------
For the consideration outlined in Article IV of this Agreement, ELAN shall
undertake the following programme of work.
Stage I: Laboratory-scale formulation development to provide a 200mg capsule
-------
with an in-vitro profile matching that of the NORMAL DOSAGE FORM.
This formulation will then be evaluated in a single-dose cross-over
pharmacokinetic study in up to 12 human male volunteers comparing
up to three formulations of DSDF to NORMAL DOSAGE FORM. Development
of analytical methods will be undertaken. Pilot bulk stability work
will also be undertaken in this Stage I.
COMPLETE MID-OCTOBER, 1994 - REPORT DUE
MEETING WITH SCHEIN TO START STAGE IIA IN NOVEMBER -
COMPLETE EARLY MAY, 1995 - REPORT DUE
Stage II A: Optimisation of the laboratory-scale formulation developed and
----------
tested in Stage I. Scale-up of this optimised formulation to pilot-
scale. Product from the pilot-scale batches will be evaluated in a
single-dose cross-over pharmacokinetic specification setting study
in up to 24 human male volunteers using NORMAL DOSAGE FORM as the
reference product. Pilot bulk stability work will also be
undertaken at this stage.
Stage II B: The optimised formulation and process developed in Stage II A of
----------
the Project shall undergo Process Transfer to ELAN's manufacturing
unit with consequent further scale-up of the process to full
production - batch size. ELAN will also conduct Process Validation
and establish and validate all analytical methodology, including
analytical chemistry, and establish required quality assurance and
quality control methodologies and procedures. ELAN shall also
conduct a series of pivotal pharmacokinetic studies on commercial -
batch size DSDF as follows:
(i) A pivotal single-dose 2-way cross-over pharmacokinetic study
in 24 human male volunteers comparing the DSDF to the NORMAL
DOSAGE FORM.
(ii) A pivotal single-dose cross-over pharmacokinetic study in 24
human male volunteers comparing the DSDF to the NORMAL DOSAGE
FORM under both fasted and fed conditions.
(iii) A pivotal steady-state (to day 5) 2-way cross-over
pharmacokinetic study in 24 human male volunteers comparing
the DSDF to the NORMAL DOSAGE FORM
ELAN shall also conduct bulk pivotal stability on the capsules of
DSDF manufactured under this Stage II B.
START STAGE IIB EARLY MAY - COMPLETED MID-OCTOBER -
ANDA FILING MID-OCTOBER, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
----------
DEVELOPMENT PROJECT (Continued)
-------------------------------
Note 1: It is acknowledged by the parties hereto that in order to
------
secure a timely approval of the ANDA, pivotal stability
in final commercial packaging will need to be made
available during the ANDA prosecution process, and
preferably prior to the filing of the ANDA. ELAN and THE
CLIENT shall discuss and agree separately on a programme
of work and schedule for the carrying out of this work in
a manner which shall jeopardise neither the projected
filing dates or approval dates for the ANDA. In the event
that it is agreed that ELAN shall conduct such stability
work, the parties shall pre-agree the costs therefor,
which THE CLIENT shall be obliged to pay to ELAN as non-
recoverable development fees on commencement of such
work. However, as of the date of this Agreement, it is
the intention of the parties that THE CLIENT shall
undertake all such work at its own expense and to a
schedule designed so that all such finished pack
stability data as would normally be required in a quality
abbreviated new drug application will be available to
ELAN no later than ninety (90) days from completion of
the PROJECT.
Note 2: Following the completion of each of the Stages I and II A
------
ELAN shall furnish a report to THE CLIENT outlining the
results of the work undertaken in these Stages of the
PROJECT.
APPENDIX C
----------
COMPLAINT HANDLING PROCEDURES
-----------------------------
The purpose of this Appendix is to establish written procedures for the
communication and processing of Product complaints.
Acting in accord with this Agreement will facilitate compliance with Federal
Requirements as set forth in 21 CFR 211.198 (complaint files) and 21 CFR
310.305/21 CFR 314.80 (postmarketing reporting of adverse drug reactions).
A. Complaint Reporting
1. Complaint reports received by The Client will be summarized and
forwarded to the Complaint Division of Elan.
2. Complaints reported directly to Elan will be summarized and forwarded
to the Complaints Coordinator of The Client.
3. All adverse drug experience complaints reported to The Client will be
communicated to Elan within three working days of report receipt. Elan
will be responsible for completion and submission to the Food and Drug
Administration of Form m FDA-1639 where appropriate. A copy of the
completed Form FDA-1639 will be forwarded to The Client by Elan.
B. Complaint Investigation
1. The Client will investigate all Product complaints associated with
distribution or handling.
2. Elan will investigate all complaints associated with Product's active
or inactive ingredients, container/closure system, or general Product
quality.
3. Upon completion of the necessary evaluation, Elan will provide a
written summary to The Client.
C. Communications with Complainant
1. Elan will be responsible for review of complaint evaluation
information and preparation of a written response. Elan's response
will be directed to The Client and The Client will respond to the
complainant with a copy to Elan.
D. Product Recall
1. In carrying out a recall, both parties will fully cooperate in
notifying customers to follow instructions agreed upon by the parties.
APPENDIX D
TECHNOLOGY COMPETITOR
---------------------
AMERICAN HOME PRODUCTS
----------------------
Dated September 22, ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ LIMITED
AND
SCHEIN PHARMACEUTICAL, INC.
SUPPLEMENTAL AGREEMENT
THIS AGREEMENT is made on the 22nd day of September 1994 between ELAN PHARMA,
LIMITED, an Irish Company of Monksland, Athlone, County Westmeath, Ireland,
("ELAN") and SCHEIN PHARMACEUTICAL, INC. a U.S. Company of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. (hereinafter referred to as "the CLIENT").
WHEREAS
1. ELAN and the CLIENT entered into an Agreement dated as of the 16th day
of August 1994, ("the Principal Agreement") whereby, inter alia, the
CLIENT was licensed to market the PRODUCT under its own label and
trademark in the TERRITORY without infringing any of the Patent or
Know-How rights held by Elan.
2. ELAN and the CLIENT have agreed that PRODUCT shall be supplied by the
CLIENT to ▇▇▇▇ under ▇▇▇▇'▇ private label.
NOW IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE I. DEFINITIONS
1. In this Agreement the definitions contained in the Principal Agreement
shall prevail in addition to the definitions as set forth in this
Agreement.
2. "▇▇▇▇" shall mean ▇▇▇▇ Laboratories Limited and any of its parent or
subsidiary companies.
ARTICLE 11. SUPPLY OF PRODUCT
1. The CLIENT shall supply PRODUCT to ▇▇▇▇ under ▇▇▇▇'▇ private label to
use, promote, market, sell and distribute in the TERRITORY under the
terms and conditions set out herein.
2. The CLIENT may in its discretion supply Product to ▇▇▇▇ under ▇▇▇▇'▇
private label to use, promote market, sell and distribute in the
TERRITORY within the first 12 calendar months after the commencement
of marketing by the CLIENT of the PRODUCT in the TERRITORY (as
evidenced by written invoice to an independent third party).
3. If CLIENT has not supplied PRODUCT to ELAN pursuant to Article II
paragraph 2, the CLIENT shall supply PRODUCT to ▇▇▇▇ under ▇▇▇▇'▇
private label to use, promote, market, sell and distribute the
PRODUCTS in the TERRITORY commencing not later than the expiry of the
twelfth calendar month after the commencement of marketing by the
CLIENT of the PRODUCT in the TERRITORY (as evidenced by written
invoice to an independent third party).
ARTICLE III. DURATION AND TERMINATION
1. The supply of PRODUCT under either Article II paragraphs 2 or 3 shall
continue in full force and effect for the duration of the Principal
Agreement and shall terminate upon the termination of the Principal
Agreement for any reason whatsoever.
ARTICLE IV. TERMS OF SUPPLY AGREEMENT
1. At any time following the commencement of marketing by the CLIENT of
the PRODUCT in the TERRITORY (as evidenced by written invoice to an
independent third party), but, in no event later than the expiry of
the twelfth calendar month after the commencement of marketing by the
CLIENT of the PRODUCT in the TERRITORY, the CLIENT shall supply ▇▇▇▇
with PRODUCT under ▇▇▇▇'▇ private label pursuant to the terms and
conditions of a Supply Agreement to be negotiated in good faith
between the parties. The supply price for the PRODUCT shall be
calculated by reference to the CLIENT's published wholesale
acquisition cost ("WAC") for the PRODUCT less ***. Until the expiry of
the first calendar quarter, in which the Supply Agreement is executed,
the relevant WAC shall be the WAC published as of the commencement of
the Supply Agreement. Thereafter the relevant WAC shall be the WAC
published on the last business day of the preceding calendar quarter.
2. The CLIENT shall deliver the PRODUCT to ▇▇▇▇ and/or any party
designated by ▇▇▇▇ in final market packaging, such packaging being
approved by ▇▇▇▇.
ARTICLE V. NET SALES
1. Sales of PRODUCT by CLIENT to ▇▇▇▇ shall constitute NET SALES for the
purposes of the Principal Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate.
SIGNED BY SIGNED BY
SCHEIN PHARMACEUTICAL, INC. ELAN PHARMA LIMITED
Name: [SIGNATURE ILLEGIBLE] Name: [SIGNATURE ILLEGIBLE]
--------------------- ---------------------
Title: EXEC VP Title: DIRECTOR
--------------------- ---------------------
* redacted pursuant to confidential treatment request.