EXHIBIT 10.4
PENTOXIFYLLINE AGREEMENT
THIS AGREEMENT (the "Agreement"), effective this 1st day of January
1997 (the "Effective Date"), is by and between HOECHST ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC., a
Delaware corporation ("HMRI"), and ▇▇▇▇▇▇ PHARMACEUTICAL, INC., a Delaware
corporation ("▇▇▇▇▇▇").
W I T N E S S E T H:
WHEREAS, HMRI is engaged in the manufacture, for the United States of
America market, of pentoxifylline in finished dosage forms (the "Product" or
"Products") pursuant to New Drug Application #▇▇-▇▇▇ (▇▇▇ "▇▇▇"), and
WHEREAS, ▇▇▇▇▇▇ desires to purchase and market the Products, under
its own name in the Territory (as hereinafter defined), and
WHEREAS, HMRI desires to supply Product to ▇▇▇▇▇▇, upon the terms and
conditions provided herein.
NOW THEREFORE, the parties hereto agree as follows:
1. MANUFACTURE, PURCHASE AND SALE OF PRODUCT, AND HMRI REVENUE SHARE
1.1 Purchase and Sale. Pursuant to the terms and conditions of this
Agreement consistent with 21 CFR 314.70(d)(4), HMRI agrees to manufacture
exclusively for ▇▇▇▇▇▇, during the Term (as defined in Section 11.1 hereof) of
this Agreement, the 400 mg strength of HMRI's pentoxifylline formulation, for
sale by ▇▇▇▇▇▇ to the trade in the Territory under the ▇▇▇▇▇▇ label only. For
the Term, and thereafter in the event of renewal or extension (as set forth in
Section 11 hereof), ▇▇▇▇▇▇ agrees to purchase all of its requirements for the
Product for sale in the Territory from HMRI and HMRI agrees to supply all of
▇▇▇▇▇▇'▇ requirements for the Product. It is understood by the parties that
the Product is produced in campaigns of a minimum quantity set forth in
Schedule 1.1 of this Agreement (the "Minimum Quantity"). Regardless of
▇▇▇▇▇▇'▇ requirements under this Section 1.1, ▇▇▇▇▇▇ hereby agrees to place
firm and binding orders for, and to purchase and take delivery from HMRI of,
quantities of the Product and any multiples thereof to be delivered to ▇▇▇▇▇▇
in each calender month during the Term of this Agreement that are not less
than the Minimum Quantity. The parties acknowledge that shipments of the
Product by HMRI may vary from the Minimum Quantity by up to ten percent more
or less than the Minimum Quantity. The first commercial launch date for the
Product shall be determined at the sole discretion of HMRI; provided, however,
that HMRI must allow ▇▇▇▇▇▇ to proceed with such commercial launch in the
event that the Product becomes or is about to become subject to multi-source
competition. Those quantities ordered on a firm basis by ▇▇▇▇▇▇ prior to the
first Product commercial launch date (not to exceed [21 batches]) which have
less than 12 months of remaining shelf life at the time of the first Product
commercial launch date (based on Product dating) shall be credited and/or
replaced by HMRI with new quantities at no additional cost to ▇▇▇▇▇▇.
1.2 Product Specifications and Manufacturing Technology Transfer Option.
HMRI will manufacture the Product for ▇▇▇▇▇▇ in oblong, scored tablets in
strengths and colors as follows:
Strength: ▇▇▇▇▇▇ Generic
400 ▇▇ ▇▇▇▇▇
The Product shall meet the specifications set forth in the NDA, as
such specifications may be changed from time to time. HMRI shall on a timely
basis advise ▇▇▇▇▇▇ of any changes made with respect to the NDA.
1.3 Labeling and Packaging. ▇▇▇▇▇▇ shall be responsible for all the cost
of developing packaging and labeling for the Product which shall be consistent
with the U.S. Food and Drug Administration (the "FDA") approved labeling for
the Products, and shall be in dosage strengths and colors as set forth in
Section 1.2 herein and in packaging configurations as subsequently mutually
agreed upon by the parties. ▇▇▇▇▇▇ agrees to develop Product labeling and
packaging configurations consistent with the reasonable request of HMRI.
1.4 Rolling Forecasts and Orders. On a monthly basis ▇▇▇▇▇▇ will provide
HMRI with 12-month rolling forecasts by package size (SKU) and by distributor.
The first rolling forecast will be due upon execution of this Agreement.
▇▇▇▇▇▇ will be obligated to place orders and purchase from HMRI the
following:
a. 100% of the amounts forecast for the first three months of each
rolling forecast; and
b. 50% of the amounts forecast for months four, five and six of
each rolling forecast.
Each purchase order shall contain a shipment date in accordance with
HMRI's manufacturing lead time of twelve (12) weeks, and be subject to the
provisions of Section 9 hereof. ▇▇▇▇▇▇ will supply HMRI with monthly sales
summaries by class of trade at HMRI's request.
1.5 Cost of Goods and Payment. As of the Effective Date, and thereafter
annually in January of each subsequent calendar year during the Term of this
Agreement, HMRI shall provide to ▇▇▇▇▇▇ cost of goods pricing for the Products
during that calendar year. HMRI cost of goods pricing provided to ▇▇▇▇▇▇ for
each calendar year subsequent to the initial pricing provided in Exhibit A of
this Agreement shall be accompanied by such reasonable detail and
documentation as to enable ▇▇▇▇▇▇ to understand the basis for such pricing.
The pricing shall include material costs (including, but not limited to, bulk
active ingredient costs which bulk active costs shall include a reasonable
profit margin to HMRI to be negotiated based upon quotes from qualified, bona
fide sources), manufacturing charges and packaging costs on a fully allocated
basis according to generally accepted accounting principles. HMRI's cost of
goods pricing to ▇▇▇▇▇▇ during 1997 for packaged finished goods FOB
Bridgewater, New Jersey shall be as set forth in Exhibit A, attached hereto
and made a part hereof. Notwithstanding the foregoing sentence, the parties
understand that HMRI may move its production site for any Product to a
different site and that in such event Exhibit A will be amended to reflect
HMRI's cost of goods pricing to ▇▇▇▇▇▇ at such new production site. ▇▇▇▇▇▇
agrees to pay the invoice amount for the Products ordered by ▇▇▇▇▇▇. Terms of
payment shall be open account, net forty-five (45) days from the later of
receipt of invoice or shipment of the Product. For the initial Product
commercial stocking period, terms of payment shall be open account, net sixty
(60) days from first Product commercial launch date.
1.6 Advertising/Marketing/Sales Costs and Product Pricing. ▇▇▇▇▇▇ shall
be responsible for all advertising, marketing and sales costs associated with
Product distribution. ▇▇▇▇▇▇ will have complete authority for all pricing
decisions for the Product sold by ▇▇▇▇▇▇. ▇▇▇▇▇▇ agrees to keep HMRI
reasonably informed of price changes in excess of twenty-five percent (25%) or
such other percentage as mutually agreed to by the parties.
1.7 HMRI Net Profit Margin Share. The parties agree that HMRI shall
receive, on a monthly basis following ▇▇▇▇▇▇'▇ market introduction of the
Product, payments from ▇▇▇▇▇▇ which shall be equal to [*] of the ▇▇▇▇▇▇ Net
Profit Margin realized on sales of any Product in the Territory during each
preceding calendar month or, if applicable, be charged [*] of any loss
realized on sales of any Product in the Territory during each preceding
calendar month. For the purposes of this Section 1.7, ▇▇▇▇▇▇ Net Profit Margin
shall mean ▇▇▇▇▇▇ Product gross sales less actual chargebacks, rebates, price
adjustments, returns and cash discounts and less cost of goods as set forth in
Section 1.5 herein. Exhibit B, attached hereto and made a part hereof, sets
forth the method of calculation of HMRI Net Profit Margin Share. The monthly
payments contemplated by this Section 1.7 shall be made by check delivered to
HMRI not later than ninety (90) days following the close of each calendar
month during the Term of this Agreement.
[*] Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
2. TERRITORY
This Agreement encompasses only the United States of America and its
possessions and territories including Puerto Rico (the "Territory") and gives
▇▇▇▇▇▇ the right to market to all classes of trade in the Territory.
3. REGULATORY MATTERS
3.1 FDA Approval. HMRI represents and warrants that the Product is
approved by the FDA for the uses set forth in HMRI's labeling. ▇▇▇▇▇▇ and
HMRI agree to take all necessary action to obtain and maintain any approvals
necessary to permit ▇▇▇▇▇▇ to sell the Product under its own name in the
Territory in compliance with applicable federal and state drug laws. HMRI and
▇▇▇▇▇▇ agree to coordinate with each other concerning all changes to Product
labeling.
3.2 Regulatory Correspondence. ▇▇▇▇▇▇ and HMRI shall make available to
each other, within three (3) days of receipt, regulatory correspondence
covering the following issues: regulatory letters, Product recalls,
withdrawal of Product, and correspondence bearing on the safety and efficacy
of the Product.
3.3 Product Inquiries and Complaints/Recalls. ▇▇▇▇▇▇ will promptly submit
to HMRI all Product safety and efficacy inquiries, Product quality complaints
and adverse drug event (ADE) reports received by it, together with all
available evidence and other information relating thereto. Except as
otherwise required by law or governmental regulation, HMRI will be responsible
for investigating and responding to all such inquiries, complaints and adverse
events regarding the Product. It shall be the exclusive responsibility of
HMRI to comply with all federal, state and local governmental reporting
requirements regarding ADEs and Product quality matters, except where such
events or matters are caused solely by acts or omissions of ▇▇▇▇▇▇, in which
case HMRI may, consistent with applicable law and regulation, request ▇▇▇▇▇▇'▇
assistance in such compliance. HMRI will forward a copy of all FDA
submissions concerning Product ADEs or any Product safety-related topic to
▇▇▇▇▇▇ within ten (10) working days of submission. In the event of a dispute
in respect of the therapeutic action or quality of the Product: (i) if the
dispute involves only ▇▇▇▇▇▇ and a subsequent purchaser then ▇▇▇▇▇▇ and HMRI
shall consult prior to any compromise or settlement of such dispute; and (ii)
if the dispute involves ▇▇▇▇▇▇, HMRI and a subsequent purchaser then both
parties must consent prior to any compromise or settlement of such dispute.
▇▇▇▇▇▇ shall be responsible for forwarding recall materials received from HMRI
designed to recover Products distributed by it and its private label customers
in the event of a recall. Expenses associated with a recall are to be borne
by the party at fault.
3.4 Quality Assurance. In order to facilitate quality assurance
activities with respect to the Product, HMRI agrees to (a) allow ▇▇▇▇▇▇ at
least once per year at mutually agreeable times to inspect/audit HMRI's
facilities and records pertaining to manufacture, testing, storage and
packaging for compliance with Good Manufacturing Practice, 21 CFR 211, and (b)
supply to ▇▇▇▇▇▇ the results of all stability testing for the Product. ▇▇▇▇▇▇
agrees to allow HMRI at least once per year at mutually agreeable times to
inspect/audit ▇▇▇▇▇▇'▇ facilities and records pertaining to storage and
distribution for compliance with Good Manufacturing Practice, 21 CFR 221.
3.5 Additional Information. ▇▇▇▇▇▇ shall provide to HMRI in a timely
manner, but in no event less than thirty (30) days prior to the due date of
HMRI's annual report to the FDA with respect to the Product, all information
which HMRI requests regarding the Product in order to comply with applicable
federal and state drug laws. Such information shall include, without
limitation, quantities of the Product sold. ▇▇▇▇▇▇ shall be responsible for
assuring that all promotional material produced by it relating to the Product
comply with federal, state and local law. ▇▇▇▇▇▇ shall provide to HMRI prior
to first use copies of all advertising, promotional material, labeling and
other literature used on, or in connection with, the Product. HMRI shall
supply to ▇▇▇▇▇▇ on a timely basis a copy of said FDA annual report.
4. PROPRIETARY RIGHTS AND TRADEMARKS
HMRI retains ownership of the NDA and any supplements thereto. HMRI is
the owner of certain proprietary information (the "Proprietary Rights") used
in connection with the manufacturing, sale and distribution of pentoxifylline
pharmaceutical preparations. No such Proprietary Rights are being assigned,
licensed or otherwise transferred hereunder, and ▇▇▇▇▇▇ acknowledges that it
shall have no rights hereunder to any such Proprietary Rights and hereby
agrees that it shall not contest or dispute the validity of or title to any of
such Proprietary Rights. Without limiting the generality of the foregoing,
▇▇▇▇▇▇ agrees it shall not take or cooperate in litigation or threatened
litigation which might or is intended to impair or attack such Proprietary
Rights or which questions the paramount interest of HMRI or its affiliates,
licensees or assignees in the same. ▇▇▇▇▇▇ and its private label customers
shall market the Product under their own trade names and trademarks, which
shall not be confusingly similar to the trademark of HMRI for its
pentoxifylline product.
5. SECRECY
Except for literature and information intended for disclosure to
customers, each party will treat as confidential all technical and commercial
information acquired by it from the other party under this Agreement and will
take all necessary precautions to assure the secrecy of such confidential
information. Each party agrees to return to the other party upon the
expiration or termination of this Agreement all confidential technical and
commercial literature, data, and information acquired from the other party.
Neither party shall, during the term of this Agreement or for ten (10) years
thereafter, without the express prior written consent of the other party, use
or disclose any such information received by it from the other party pursuant
to the transactions contemplated by this Agreement for any purpose whatsoever.
6. WARRANTY
HMRI warrants that the Product manufactured by HMRI and sold to ▇▇▇▇▇▇
pursuant to this Agreement will meet the specifications for Product set forth
in the NDA in effect at the time of such shipment. HMRI reserves the right to
amend such specifications from time to time at the sole discretion of HMRI;
provided that ▇▇▇▇▇▇ is provided with written notice within a commercially
reasonable period of time in advance in order to effect any necessary
marketing or other changes and, provided further that such changes do not
cause the Product delivered to ▇▇▇▇▇▇ to cease to be the equivalent of the
Trental(R) then sold by HMRI. All Product will conform to, and the Products
manufactured by HMRI will be manufactured in conformity with, the regulations
of the Federal Food and Drug Administration and any comparable state agency
applicable thereto. None of the Product contained in any shipment made
hereunder to ▇▇▇▇▇▇ will, at the time of delivery, be adulterated or
misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as
amended (the "Act"), and those applicable state laws substantially similar to
the Act, as such Act and laws exist at the time of delivery. None of the
Products will be an article that may not, under the provisions of the Act, be
introduced into interstate commerce. The Products shall conform with any
specifications and quality assurance requirements mutually agreed to in
writing by the parties and, in any event, shall not contain any poisonous or
deleterious material. No Product shall infringe the patent, trade secret or
other proprietary right of any third party. THIS WARRANTY IS THE ONLY
WARRANTY, EXPRESS OR IMPLIED, MADE BY HMRI AS TO THE PRODUCT, AND ALL OTHER
WARRANTIES, INCLUDING MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE,
ARE DISCLAIMED. Except as otherwise provided in this Agreement, the exclusive
remedy for breach of warranty shall be prompt replacement of the nonconforming
Product at HMRI's expense with a like amount of the Product conforming to the
above-stated warranty. For purposes hereof, replacement may include
reprocessing of the Product if done in a period of time commercially
reasonable to ▇▇▇▇▇▇. In no event shall HMRI be liable to ▇▇▇▇▇▇ for any
alteration, change, improper packaging or other improper treatment of the
Product by ▇▇▇▇▇▇ other than in accordance with HMRI's instructions; nor shall
HMRI be liable to ▇▇▇▇▇▇ for any damage arising solely from ▇▇▇▇▇▇'▇
marketing, advertising, distribution or sale of the Product that conforms to
the warranty set forth above.
7. ▇▇▇▇▇▇'▇ OBLIGATIONS
▇▇▇▇▇▇ shall not alter the Product and shall not recommend or knowingly
sell the Product for any uses except as described in the FDA approved Product
labeling.
8. INDEMNITY
8.1 Indemnification by HMRI. HMRI shall defend, indemnify and hold
harmless ▇▇▇▇▇▇ and its affiliates (and each of their employees, officers,
directors and stockholders) from and against any and all claims, liabilities,
assessed damages, costs and expenses (including, without limitation, costs and
expenses of investigation and settlement, court costs and attorneys' fees and
expenses regardless of outcome, but excluding any indirect, incidental or
consequential damages or losses and lost profits) arising out of any claim of
defect in materials or workmanship of the Product, failure of the Product to
conform to the express warranty set forth in Section 6 hereinabove or alleged
or actual personal injury, illness, death or other harm, except to the extent
such claim arises out of ▇▇▇▇▇▇'▇ breach of this Agreement, negligence or
misconduct.
8.2 Indemnification by ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall defend, indemnify and hold
harmless HMRI and its affiliates (and each of their employees, officers,
directors and stockholders) from and against any and all claims, liabilities,
assessed damages, costs and expenses (including, without limitation, costs and
expenses of investigation and settlement, court costs and attorneys' fees and
expenses regardless of outcome, but excluding any indirect, incidental or
consequential damages or losses and lost profits) to the extent caused by
▇▇▇▇▇▇'▇ packaging, marketing, advertising, distribution or sale of Product
that conforms to the express warranty set forth in Section 6 hereinabove or
caused by alterations to the Product made by ▇▇▇▇▇▇ after delivery by HMRI
other than in accordance with the written directions of HMRI, except to the
extent such claim arises out of HMRI's breach of this Agreement, negligence or
misconduct.
8.3 Indemnification Procedures. The parties shall cooperate and give each
other prompt notice of claims as to which indemnification may be claimed
hereunder. The indemnifying party may, at its option, control the defense of
claims for which indemnification may be sought. The indemnifying party shall
not be required to indemnify the indemnified party for any claim settled
without the indemnifying party's written consent.
9. ORDERS
9.1 Placement of Orders. All orders placed by ▇▇▇▇▇▇ with HMRI hereunder
shall be sent to the following address, unless otherwise notified in writing:
Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
9.2 Shipment. HMRI shall make every reasonable effort to fill ▇▇▇▇▇▇'▇
accepted orders in accordance with ▇▇▇▇▇▇'▇ requested delivery dates. All
shipments of the Product to ▇▇▇▇▇▇ shall be accompanied by a certificate of
analysis for each batch in said shipment, certifying that each batch was made
in accordance with current Good Manufacturing Practices and the NDA and
listing test results. Deliveries to ▇▇▇▇▇▇ shall be FOB, HMRI Bridgewater,
New Jersey or such other U.S. location to which HMRI may move production of
the Product. ▇▇▇▇▇▇ shall pay all shipping costs, including insurance.
9.3 Risk of Loss. Risk of loss shall pass to ▇▇▇▇▇▇ upon shipment by
HMRI.
9.4 Claims. ▇▇▇▇▇▇ shall cause a commercially reasonable visual
inspection of all shipments of the Product promptly after arrival if shipped
directly to ▇▇▇▇▇▇, and shall give prompt oral notice of potential
nonconforming goods, and within thirty (30) days after arrival of any such
shipment, give written notice to HMRI of any claim that any Product included
in shipment may not conform to any applicable specifications or warranty. If
shipment of the Product is to a destination other than ▇▇▇▇▇▇, any claims of
non-conformity under this Section 9.4 must be made by ▇▇▇▇▇▇ within ninety
(90) days of actual delivery of the Product to such destination. HMRI shall
promptly replace such nonconforming Product with conforming Product at no
additional cost to ▇▇▇▇▇▇. ▇▇▇▇▇▇'▇ failure to detect and/or give notice of
any defect not readily identifiable upon commercially reasonable visual
inspection shall not vitiate HMRI's obligations under the warranty and
indemnification provisions of this Agreement.
10. FORCE MAJEURE
Neither party shall be responsible or liable, in any way, for any default
in performance of this Agreement arising, directly or indirectly, from any
cause beyond such party's control, including, without limiting the generality
of this provision, fire, flood, tornado, cyclone, war, enemy action, embargo,
strike, lockout, labor trouble, transportation difficulties, governmental
order, proclamation or regulation, inability to obtain raw materials, fuel,
power, packaging or other supplies, accident, explosion, riot, insurrection or
expropriation of the plants by governmental authority, or failure to make
delivery of the Product if the same shall be prevented or delayed by state or
other governmental authority or as a result of requisitioning for allocation
to others by any governmental authority.
11. TERM, TERMINATION AND BREACH
11.1 Term. The Term of this Agreement shall commence on the date first
written above (the "Effective Date") and shall be in full force and effect
until five (5) years from the Effective Date (such period being the "Initial
Term") unless earlier terminated pursuant to Section 11.3 or 11.4
(Termination). This Agreement shall renew for subsequent five (5) year
periods following expiration of the Initial Term (each an "Additional Term"),
under the same terms and conditions as the Initial Term, unless terminated by
written notice by either party not later than three (3) years prior to the
termination of any Initial Term or Additional Term hereunder.
The period of time between the commencement and the termination of this
Agreement at the end of the Initial Term or the last Additional Term, if any,
is referred to herein as the "Term."
11.2 Renegotiation. If either party gives notice of termination pursuant
to Section 11.1 or if HMRI gives notice of termination pursuant to Section
11.3(ii) or Section 11.4, the parties shall, for a period of three months
following such notice, negotiate in good faith the terms and conditions under
which the Agreement could be renewed or continued, as the case may be.
(i) In the event that HMRI provides notice to terminate pursuant to
this Section 11.1 or Section 11.4 and such renewal or continuation
negotiations are unsuccessful, this Agreement shall be terminated as of the
end of such three month negotiation period. At ▇▇▇▇▇▇'▇ written request, HMRI
shall provide ▇▇▇▇▇▇ or its designee with such technical assistance services
reasonably necessary to enable ▇▇▇▇▇▇ to manufacture or have manufactured its
own product versions of the Products pursuant to Abbreviated New Drug
Applications of ▇▇▇▇▇▇ (the "▇▇▇▇▇▇ Products") in the Territory; provided,
however, that ▇▇▇▇▇▇ shall have no right to (a) require HMRI to transfer to
▇▇▇▇▇▇ or any third party any right whatsoever with respect to the NDA or the
Proprietary Rights, (b) require HMRI to provide technical assistance services
to any third party, or (c) transfer to any third party technical assistance
services learned under this Agreement. In consideration of these technical
assistance services, HMRI shall receive a royalty of 20% of the ▇▇▇▇▇▇ Net
Profit Margin (as defined in Section 1.7 herein) with respect to sales by
▇▇▇▇▇▇ of any ▇▇▇▇▇▇ Product for a period of ten (10) years from the date of
first commercial sale of such ▇▇▇▇▇▇ Product.
(ii) In the event that ▇▇▇▇▇▇ provides notice to terminate pursuant
to this Section 11.1 and renewal negotiations are unsuccessful, HMRI shall
have no obligation to provide ▇▇▇▇▇▇ with any technical assistance services
pursuant to this Agreement.
11.3 Termination.
(I) Either party shall have the right to terminate this Agreement at
any time by giving due notice to terminate this Agreement in any of the
following events:
(a) Insolvency or bankruptcy of the other party or the inability
or failure of the other party to perform any financial obligations as the same
become due;
(b) Failure of the other party to make required payment under
this Agreement where such failure continues after ten (10) days' notice from
the other party;
(c) Demonstrable inability of the other party to perform its
material obligations under this Agreement; and/or
(d) The enactment of any law, order or regulation by a
governmental unit that would impair or restrict the right of or the ability of
either party to terminate or elect not to renew this Agreement or which would
render it impracticable or impossible for the other party to perform its
obligations hereunder.
(ii) Either party shall have the right to terminate this Agreement
at any time upon six months' prior written notice if the ▇▇▇▇▇▇ Net Profit
Margin as defined in Section 1.7 has been negative for six consecutive months.
11.4 HMRI Termination. This Agreement may be terminated at any time by
HMRI upon written notice to ▇▇▇▇▇▇ that the bulk active ingredient cost
component of material costs under Section 1.5 herein is less than HMRI's
actual cost per U.S. GAAP net of any intercompany profits.
11.5 Breach or Misrepresentation. In the event of any material breach of
this Agreement or any material misrepresentation of any representation or
warranty contained herein by either party, the other party shall give the
breaching party written notice thereof. The breaching party shall have thirty
(30) days after receipt of written notice to cure said breach. If cure is not
effected within the thirty (30) day period, the nonbreaching party shall have
the right to terminate this Agreement.
12. NOTICES
Except for ▇▇▇▇▇▇'▇ Product orders which shall be sent to the address
specified in Section 9 hereof, all notices which ▇▇▇▇▇▇ gives HMRI shall be
sent prepaid, either by first class mail, return receipt requested, express
courier, telecopy, cable, or telex, addressed to HMRI as follows, unless
otherwise notified in writing:
Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: North America General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All notices which HMRI gives to ▇▇▇▇▇▇ shall be sent in the same manner,
addressed to ▇▇▇▇▇▇ as follows, unless otherwise notified in writing:
▇▇▇▇▇▇ Pharmaceutical, Inc.
Canton Commerce Center
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President or Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice sent by mail shall be deemed given seventy-two (72) hours after
the deposits thereof. Any notice sent by express courier, telecopy, cable or
telex shall be deemed given when actually received.
13. ASSIGNABILITY
Neither party shall be entitled to assign its rights and obligations under
this Agreement without the other party's prior written consent; provided,
however, that (i) HMRI may assign its rights and obligations under this
Agreement to any member of the Hoechst group companies engaged in the
manufacture or sale of pharmaceutical products without the prior written
consent of ▇▇▇▇▇▇ or its assignee, and (ii) in the event of a sale of all or
substantially all of the assets of ▇▇▇▇▇▇, ▇▇▇▇▇▇ may assign its rights under
this Agreement to the purchaser of such assets, provided such purchaser
expressly assumes all of ▇▇▇▇▇▇'▇ obligations under this Agreement, without
the prior written consent of HMRI or its assignee.
14. DISPUTE RESOLUTION
Disputes between the parties will be settled by arbitration conducted
under rules established by the American Arbitration Association. The venue of
such arbitration proceeding shall be in the state in which the party
complained against resides.
15. SEVERING CLAUSE
If any portion of this Agreement is held invalid by a court of competent
jurisdiction, such portion shall be deemed to be of no force and effect and
the Agreement shall be construed as if such portion had not been included
herein.
16. ENTIRE AGREEMENT
This Agreement contains the sole and entire understanding of the parties
related to its subject matter and supersedes all prior or contemporaneous oral
or written agreements concerning the subject matter.
17. MODIFICATION
This Agreement cannot be changed orally and no modification of this
Agreement shall be recognized nor have any effect, unless the writing in which
it is set forth is signed by HMRI and ▇▇▇▇▇▇, nor shall any waiver of any of
the provisions of this Agreement be effective unless in writing and signed by
the party to be charged therewith.
18. WAIVER
The failure of either party to enforce, at any time, or for any period of
time, the provisions hereof or the failure of either party to exercise any
option herein shall not be construed as a waiver of such provision or option
and shall in no way affect that party's right to enforce such provisions or
exercise such option. No waiver of any provision hereof shall be deemed a
waiver of any succeeding breach of the same or any other provisions of this
Agreement.
19. APPLICABLE LAW
This Agreement shall be deemed to have been entered into within and shall
be governed, construed and enforced in accordance with the laws of the State
of Delaware, regardless of the choice of law principles of that or any other
jurisdiction.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by the respective duly authorized officers on the dates and at the
place indicated below:
▇▇▇▇▇▇ PHARMACEUTICAL, INC. HOECHST ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------- ----------------------------
Title: Executive Vice President and Title: Vice President and
Secretary General Counsel
------------------------------ ----------------------------
SCHEDULE 1.1
MINIMUM QUANTITY
Strength Package Size Minimum Quantity
-------- ------------- ----------------
400 mg 100 BTLS 20,000
500 BTLS 4,000
5,000 BTLS 400
EXHIBIT A
to
Pentoxifylline Agreement
Between
Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
and
▇▇▇▇▇▇ Pharmaceutical, Inc.
1997 COST OF GOODS
During 1997, ▇▇▇▇▇▇'▇ cost of goods for the Products from HMRI FOB
Bridgewater, New Jersey (or such other U.S. location to which HMRI may move
production of the Product) shall be based upon a bulk pentoxifylline delivered
cost to HMRI of $[*] per kilo and shall be as follows:
400 mg
--------
100's 500's 5,000's
----- ----- -------
$[*] $[*] $[*]
[*] Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.
EXHIBIT B
to
Amended and Restated
Pentoxifylline Agreement
Between
Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
and
▇▇▇▇▇▇ Pharmaceutical, Inc.
CALCULATION OF HMRI REVENUE SHARE (Section 1.7)
▇▇▇▇▇▇ Gross Sales $XXX
Less Actual:
Chargebacks $XXX
Rebates $XXX
Price Adjustments $XXX
Cash Discounts $XXX
Net Sales $XXX
Less Cost of Goods* $XXX
----
Net Profit Margin $XXX
HMRI Net Profit Margin Share Percentage x [*]
----
HMRI Net Profit Margin Share $XXX
====
* Cost of Goods calculated on a fully allocated basis according to generally
accepted accounting principles (as set forth in Section 1.5).
[*] Confidential portion has been omitted pursuant to a request for
confidential treatment and has been filed separately with the Commission.