Exhibit 99.1
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT ("Supply Agreement") made as of the Commencement Date (as
defined below) between CENTRIX PHARMACEUTICAL, INC., an Alabama corporation
having its principal place of business at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("CENTRIX") and INTERPHARM HOLDINGS, INC., a
Delaware corporation having its principal place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("INTERPHARM"). RECITALS
A. WHEREAS, INTERPHARM is engaged in the business of developing, manufacturing,
packaging and selling pharmaceutical products.
B. WHEREAS, CENTRIX is engaged in the business of developing, selling and
marketing certain prescription and non-prescription pharmaceutical products.
C. WHEREAS, CENTRIX desires to retain the services of INTERPHARM to develop,
manufacture, package and supply certain products as more fully set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
each intending to be legally bound, hereby agree as follows: ARTICLE 1 -
DEFINITIONS
1.1 After Year 1. "After Year 1" shall mean each twelve (12) month period of the
Purchase Term following Year 1.
1.2 Approved Labeling. "Approved Labeling" shall include all of the following :
(i) the Product label to be affixed to the bottle; (ii) the Product package
insert (the "Insert"); and (iii) the Product patient-information leaflet, in the
form attached as Exhibit E.
1.3 Bright Stock. "Bright Stock" shall mean bottles of Product packaged without
an external label that are not for commercial sale or distribution and require
further processing. Bright Stock shall be shipped only to a CENTRIX facility for
final processing ____________________________________________.
1.4 CENTRIX Trade Dress. "CENTRIX Trade Dress" shall mean CENTRIX's trade dress
and Approved Labeling for the Product set forth in Exhibit C(2).
1.5 Commencement Date. "Commencement Date" shall mean the date of the first
shipment of Product by INTERPHARM.
1.6 Commercially Reasonable. Commercially Reasonable shall mean a Party's
reasonable efforts and diligence in accordance with its normal business,
economic, legal, medical and scientific judgment, taking into account the
competitiveness of the marketplace, the proprietary position of a Product, other
products it produces, the regulatory structure involved, the profitability of a
Product, and other relevant factors including, without limitation, technical,
legal, scientific, medical, economic or other related factors.
1.7 Confidential Information. "Confidential Information" shall mean with respect
to a Party, all information of any kind whatsoever (including without
limitation, data, Data (as defined in Section 2.1, compilations, formulae,
models, patent disclosures, procedures, processes, projections, protocols,
results of experimentation and testing, specifications, strategies and
techniques), and all tangible and intangible embodiments thereof of any kind
whatsoever (including without limitation, apparatus, compositions, documents,
drawings, machinery, patent applications, records and reports), which is
disclosed by such Party to the other Party and is marked, identified as or
otherwise acknowledged to be confidential at the time of disclosure to the other
Party. Notwithstanding the foregoing, Confidential Information of a party shall
not include information which the other Party can establish by written
documentation (a) to have been publicly known prior to disclosure of such
information by the disclosing Party to the other Party, (b) to have become
publicly known, without fault on the part of the other Party, subsequent to
disclosure of such information by the disclosing party to the other party, (c)
to have been received by the other Party at any time from a source, other than
the disclosing Party, rightfully having possession of and the right to disclose
such information, (d) to have been otherwise known by the other Party prior to
disclosure of such information by the disclosing party to the other Party, or
(e) to have been independently developed by employees or agents of the other
party without the use of such information disclosed by the disclosing party to
the other Party.
1.8 The FDA. The "FDA" shall mean the United States Food and Drug
Administration, or any successor entity thereto.
1.9 Firm Commitment. "Firm Commitment" shall mean the total number of tablets of
the Product, regardless of trade dress or configuration, that CENTRIX has
committed to purchase from INTERPHARM in any one year period under this Supply
Agreement, as set under the heading Firm Commitment in Exhibit A. All tablets
must be ordered in increments of __________________, and all tablets of Product
ordered in any Year shall be deemed to be part of the Firm Commitment until the
full amount of the Firm Commitment is satisfied.
1.10 Forecast. "Forecast" shall mean a rolling twelve (12) month forecast of
CENTRIX's orders for the Product from INTERPHARM.
1.11 Hidden Defect. "Hidden Defect" shall mean any instance where a lot of a
Product fails to conform to the applicable specifications or is otherwise
defective or fails to conform to the warranties given by INTERPHARM herein, and
such failure would not be discoverable upon reasonable physical inspection or
standard testing of such Product upon receipt by CENTRIX.
1.12 Initial Territory. "Initial Territory" shall mean the United States of
America and its territories and possessions, including Puerto Rico.
1.13 INTERPHARM Trade Dress. "INTERPHARM Trade Dress" shall mean Interpharm's
trade dress for the Product set forth on Exhibit C(1).
1.14 License Fee. "License Fee" shall mean the amount set forth under the
heading "License Fee Per Tablet" in Exhibit A for each Firm Commitment tablet of
the Product.
1.15 Manufacturing Defect. "Manufacturing Defect" means any Product defect
caused by the manufacturing, handling or storage of the Product by Interpharm
prior to transfer of ownership of the Product to Centrix.
1.16 Minimum Order. "Minimum Order" shall mean at least 25% of the Firm
Commitment by the end of the first quarter in any Year after Year 1, at least
50% of the Firm Commitment by the end of the second quarter in any Year after
Year 1, at least 75% of the Firm Commitment by the end of the third quarter of
any Year after Year 1 and 100% of the Firm Commitment by the end of any Year
after Year 1.
1.17 Option Tablets. "Option Tablets" shall mean the number of tablets of the
Product set forth under the heading "Option Tablets" in Exhibit A which may be
purchased by CENTRIX from INTERPHARM ______________. Tablets purchased in any
one year period shall only be considered Option Tablets to the extent that the
Firm Commitment for that Year has been satisfied.
1.18 Patents. The "Patents" shall mean any issued patents or patent rights held
by third parties, which would be infringed by the manufacture, use or sale of
the Product to be manufactured by INTERPHARM for CENTRIX pursuant to the terms
of this Supply Agreement.
1.19 Product. The "Product" shall mean the Product listed in Exhibit A.
1.20 Purchase Price. The "Purchase Price" shall mean _____ times the number of
Firm Commitment or Option Tablets ordered.
1.21 Purchase Term. The "Purchase Term" shall mean the shorter of the
one-hundred twenty (120) month period that begins on the Commencement Date, or
the date this Supply Agreement is terminated in accordance with its terms. In
the event that neither Party gives the other written notice at least six (6)
months prior to the end of the initial one-hundred twenty (120) month Purchase
Term, the Supply Agreement shall automatically be extended for successive sixty
(60) month terms.
1.22 Total Payment. The "Total Payment" shall mean the Purchase Price plus the
License Fee.
1.23 Year. "Year" shall mean each twelve (12) month period beginning with the
commencement of the Purchase Term.
1.24 Year 1. "Year 1" shall mean the first twelve month period of the Purchase
Term.
1.25 Year 1 Minimum Order. "Year 1 Minimum Order" shall be, for Year 1, the
following minimum tablets ordered and, subject to Section 2.2.5.4., taken by
CENTRIX: at least 25% of the Firm Commitment by the end of the first quarter, at
least 50% of the Firm Commitment by the end of the second quarter, at least 75%
of the Firm Commitment by the end of the third quarter and 100% of the Firm
Commitment by the end of Year 1. Notwithstanding anything to the contrary
contained in this Supply Agreement, Centrix agrees that the first
________________________________________ of the Product, so long as such Product
would have at least ____________ expiration dating at the commencement of the
Purchase Term.
1.26 Year 1 Requirements. "Year 1 Requirements" shall be a firm commitment by
Centrix to take and pay for the Year 1 Minimum Order as specified in Section
1.25.
1.27 Year 1 Termination Payments. "Year 1 Termination Payments" shall mean (i)
$11,500,000 plus the Total Payments for any Option Tablets for which Centrix has
placed a Binding Forecast during Year 1, minus (ii) the amounts paid by CENTRIX
for the Year 1 Requirements, minus (iii) the amounts paid by CENTRIX for Option
Tablets for which Centrix has placed a Binding Forecast during Year 1.
ARTICLE 2 - SUPPLY
2.1 Overview. Subject to the terms and conditions of this Supply Agreement,
INTERPHARM shall exclusively manufacture, package and supply, and CENTRIX shall
exclusively purchase and sell the Product from INTERPHARM throughout the
Purchase Term. Subject to the provisions set forth in this Section 2.1, CENTRIX
shall sell the Product in the Initial Territory only. Centrix may, at its own
cost, seek to obtain any and all necessary approvals to sell, receive,
warehouse, export, market or distribute the Product outside of the Initial
Territory ("Outside Sales"). Interpharm shall not have any responsibility to
obtain, or assist CENTRIX in obtaining approvals necessary for Outside Sales;
provided, however, that Interpharm shall, upon CENTRIX'S written request,
provide CENTRIX with data relating to INTERPHARM'S formulation and
specifications for the Product (the "Data") if, at the time of the request, the
following conditions are met:
2.1.1 CENTRIX pays all of Interpharm's costs associated with providing the Data;
2.1.2 if CENTRIX is to provide the Data to a third party, such party shall
have signed a confidentiality agreement with respect to the Data provided
by Interpharm and shall agree to be bound by the exclusivity provision
contained in this Section 2.1; and
2.1.3 Interpharm provides its written consent to Outside Sales, which
shall not be unreasonably withheld.
At all times during the Purchase Term, subject to other provisions in this
Supply Agreement, Centrix must purchase at least the Year 1 Minimum Order or
Minimum Order, as applicable, from INTERPHARM, and may purchase the Option
Tablets. _______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Beginning on the first day following the third month of the Purchase Term, and
on or before the first day of each month thereafter, CENTRIX shall deliver to
INTERPHARM a Forecast the first three (3) months of which shall be binding on
CENTRIX and must be taken and paid for by it (the "Binding Forecast").
2.2 Forecasts and Orders.
2.2.1 Year 1 Orders. During Year 1, CENTRIX shall purchase from INTERPHARM
the Year 1 Requirements and pay the Total Payments therefor. The Parties hereby
agree that CENTRIX, by execution of this Supply Agreement, shall be deemed to
have placed binding orders for the Year 1 Requirements and INTERPHARM, by
execution of this Supply Agreement, hereby agrees to supply and deliver, on the
terms set forth herein, the Year 1 Requirements. In the event that CENTRIX
wishes to order more than the Year 1 Requirements in the first six (6) months of
the Purchase Term, it must provide INTERPHARM with at least ninety (90) days
prior written notice.
2.2.2 After Year 1 Orders. After Year 1, CENTRIX must order and take the
Minimum Order.
2.2.3 Forecasts. Beginning on the first day following the third month of
the Purchase Term, and on or before the first day of each month thereafter,
CENTRIX shall deliver to INTERPHARM a Forecast the first three (3) months of
which shall constitute a Binding Forecast.
2.2.4 Supply Obligation. During Year 1, INTERPHARM shall be required to
manufacture, supply and deliver to CENTRIX the Year 1 Requirements and, at
CENTRIX's request, the Option Tablets. After Year 1, INTERPHARM shall be
required to manufacture, supply and deliver to CENTRIX the Minimum Order and, at
CENTRIX's request, the Option Tablets. To the extent that a Forecast calls for
Product in excess of the sum of the Firm Commitment and Option Tablets divided
by twelve (an "Excess Order"), INTERPHARM shall use Commercially Reasonable
efforts to supply such quantities, but there shall be no penalty for a failure
to do so.
2.2.5 Orders. CENTRIX shall make all purchases hereunder by submitting to
INTERPHARM firm written purchase orders, which shall be in a form mutually
agreeable to both parties ("Purchase Order"). In the event of a conflict between
the terms and conditions of any purchase order and this Supply Agreement, the
terms and conditions of this Supply Agreement shall prevail.
2.2.5.1 Subject to Section 2.1, the Purchase Orders shall specify, without
limitation nor exclusion, the description of the Product ordered, the quantity
ordered, the Purchase Price, License Fee, Total Payment, the place of delivery
and the required delivery date therefor, which shall not be less than ninety
(90) days after the date of such Purchase Order, and whether the INTERPHARM or
CENTRIX Trade Dress is to be used.
Interpharm shall provide written confirmation to Centrix, of receipt of each
Purchase Order that it receives from Centrix within three (3) business days of
Interpharm's receipt of such Purchase Order. The confirmation shall include the
number of tablets of each trade dress and configuration ordered by Centrix, and
the requested date of delivery.
2.2.5.2 At its discretion, CENTRIX may specify in a Purchase Order that it
desires to purchase the Product in bulk without packaging ("Bulk Orders");
provided, however, that (i) the Total Payment shall be the same as if the order
was not for Product in bulk without packaging and (ii)
________________________________________________________________ 2.2.5.3 At its
discretion, CENTRIX may specify in a Purchase Order that it desires to purchase
the Product in Bright Stock ("Bright Stock Orders");
_______________________________________________________________________________.
2.2.5.4 In the event that a Purchase Order is placed for delivery of the Product
in any given Year pursuant to the terms of this Supply Agreement, CENTRIX is not
in breach of this Supply Agreement, and INTERPHARM fails to deliver the Product
by the date specified through no fault of CENTRIX, the sale of the Product shall
be credited in the Year in which delivery was to be made under the terms of the
Purchase Order.
2.3 Shipments. With the exception of Bright Stock which shall be delivered FOB
INTERPHARM's warehouse (with freight to CENTRIX's warehouse being paid by
Interpharm), delivery shall be FOB CENTRIX's warehouse. Delivery shall be no
later than the delivery date specified by CENTRIX if such delivery date is in
compliance with Section 2.2.5, and no later than one hundred twenty (120) days
from the date of manufacture of the Product. For each delivery tendered by
Interpharm more than thirty days (30) after the delivery date specified by
Centrix in accordance with this Section 2.3, Centrix shall be entitled to a
deduction of five percent (5%) of the Total Payment owed in connection with such
delivery.
2.4 Shipment Preparation. With the exception of label artwork, which shall be
provided by CENTRIX, INTERPHARM shall be solely responsible for the packaging,
labeling and otherwise preparing for delivery of the Product in accordance with
applicable federal and state regulations, including, without limitation,
relating to the U.S. Food and Drug Administration. Nothing contained in this
Section shall prevent CENTRIX from submitting Bulk Orders pursuant to Section
2.2.5.2 or orders in accordance with Section 2.2.5.3; provided, however, that if
CENTRIX exercises such right(s), it, and not INTERPHARM, shall have the
obligations set forth under this Section 2.4.
2.5 Billing and Payment. INTERPHARM shall invoice CENTRIX the Total Payment for
all units in each shipment of Products delivered to CENTRIX. Payment terms shall
be net thirty (30) days from date of receipt in CENTRIX's warehouse.
2.6 Security and Breach During Year 1. Notwithstanding anything to the contrary
contained in this Supply Agreement, this Section 2.6 shall apply.
2.6.1 Breach During Year 1. In the event that at any time during Year 1:
2.6.1.1 CENTRIX shall fail to pay INTERPHARM as required under this
Supply Agreement for any of the Year 1 Requirements for Product that has
been delivered, and such failure to pay is not cured within ten (10) days
of notice from Interpharm to Centrix, INTERPHARM may, in its discretion:
2.6.1.1.1 Terminate this Supply Agreement; and
2.6.1.1.2 Commence legal action against CENTRIX for (i) any
amounts it has not been paid and (ii) the Year 1 Termination
Payments; provided, however, that once INTERPHARM receives the
monies owed to it under this Section 2.6.1.1, it shall, at
CENTRIX's option, deliver the Product to CENTRIX to which the
monies relate.
2.6.1.2 CENTRIX shall, at any time, fail to meet Year 1 Minimum Order,
INTERPHARM may:
2.6.1.2.1 Terminate this Supply Agreement; and
2.6.1.2.2 Commence legal action against CENTRIX for (i) any amounts it has not
been paid and (ii) the Year 1 Termination Payments; provided, however, that once
INTERPHARM receives the monies owed to it under this Section 2.6.1.2, it shall,
at CENTRIX's option, deliver the Product to CENTRIX to which the monies relate.
2.6.2 Breach After Year 1. In the event that, at any time After Year 1:
2.6.2.1 CENTRIX shall fail to pay for an order as required under this Supply
Agreement, and such failure to pay is not cured within ten (10) days of notice
from Interpharm to Centrix, INTERPHARM may, in its discretion:
2.6.2.1.1 Terminate this Supply Agreement; and
2.6.2.1.2 Commence legal action against CENTRIX for any amounts that have
not been paid.
2.6.2.2 CENTRIX shall fail to submit a Binding Forecast which is at
least equal to the Minimum Order, INTERPHARM may, in its discretion:
2.6.2.2.1 Terminate this Supply Agreement; and
2.6.2.2.2 Commence legal action against CENTRIX for the Total
Payments for the Minimum Order; provided, however, that once INTERPHARM receives
the monies owed to it under this Section 2.6.2.2, it shall, at CENTRIX's option,
deliver to CENTRIX, the Minimum Order.
2.6.2.3 CENTRIX shall fail to take the Binding Forecast, INTERPHARM
may, in its discretion:
2.6.2.3.1 Terminate this Supply Agreement; and
2.6.2.3.2 Commence legal action against CENTRIX for the Total
Payment due for the Binding Forecast; provided, however, that once INTERPHARM
receives the monies owed to it under this Section 2.6.2.3, it shall, at
CENTRIX's option, deliver the Binding Forecast to CENTRIX.
ARTICLE 3 - QUALITY
3.1 Quality Control By INTERPHARM. Prior to execution of this Supply Agreement,
INTERPHARM shall provide to CENTRIX the specifications for the Product. After
execution of this Supply Agreement and for each manufactured shipment of the
Product, a Certificate of Analysis, signed by a qualified representative of
INTERPHARM, shall be forwarded to CENTRIX via facsimile at the time of shipment.
INTERPHARM shall send via regular mail a copy of the Certificate of Analysis at
the time of each shipment to CENTRIX, and the original will be filed at
INTERPHARM, but shall be made available to CENTRIX upon request. INTERPHARM
shall make available at its location to CENTRIX, upon its reasonable notice, the
results of all quality control and/or quality assurance testing concerning the
Product and/or the branded product, including, without limitation, for content,
content uniformity, comparative dissolution, and stability, pursuant to the
guidelines under applicable law and regulations and Interpharm's standard
operating procedures, as they may be amended from time to time.
3.2 Quality Control By CENTRIX. Prior to any packaging of the Bright Stock
Product, each repackager shall provide a letter of continuing guarantee,
addressed to INTERPHARM and CENTRIX, which shall be reasonably satisfactory to
INTERPHARM and CENTRIX, that the Product will be packaged, stored and handled at
all times, in compliance with cGMP and all applicable laws and that the
packaging facility currently, and shall be at all times, in compliance with cGMP
and all applicable laws. The form of letter of continuing guarantee to be
provided is annexed hereto as Exhibit D. CENTRIX hereby agrees that it will
cause any repackager to provide the letter of continuing guarantee annexed
hereto as Exhibit D.
3.3 Compliance of INTERPHARM Vendors. INTERPHARM is responsible for compliance
assurance regarding cGMP of all vendors of pharmaceutical ingredients, product
components, and testing services selected and purchased solely by INTERPHARM in
association with supply of the Products to CENTRIX under this agreement. Changes
to any supplier of pharmaceutical ingredients, product specifications, product
components, or services will be (i) at Interpharm's discretion and (ii) under
applicable law and regulations, and reasonable notice shall be provided to
CENTRIX.
3.4 FDA Inspectional Findings, Notices or Letters. Each Party shall notify the
other promptly of any written FDA Notices, Inspectional Observations or Warning
Letters received by it and provide the other Party within 5 working days,
suitable copies of such FDA communications.
3.5 Expiration Dating. INTERPHARM shall continue to run stability testing on the
Product in ambient conditions so as to attempt to extend expiration dating
through the period until the Product no longer passes such stability testing.
Interpharm makes no representation as to the results of such testing. Interpharm
agrees that at the commencement of the Purchase Term, the Product shall have
_________________ expiration dating from the date of manufacture.
3.6 Rejection. CENTRIX may examine and test Products as it sees fit; provided,
however, that CENTRIX shall give written notice to INTERPHARM of its rejection
hereunder (a "Rejection Notice"), within Fifteen (15) days after CENTRIX's
receipt of shipment of any Product that fails to conform to agreed
specifications or other representations and warranties given by INTERPHARM
herein. The Rejection Notice shall specify the grounds for rejection in detail.
In the event that such Rejection Notice is not received within fifteen (15) days
after CENTRIX's receipt of Product, such Product shall be deemed to be accepted
by CENTRIX; provided, however, that in the event of a Hidden Defect, Product
shall not be deemed accepted by CENTRIX at any time. After receipt of a
Rejection Notice from CENTRIX, and upon reasonable notice by CENTRIX, INTERPHARM
(i) shall provide to CENTRIX copies of any Form 483 inquiries and responses
relating to the Product, and (ii) may make available other records relating only
to the Product, at its discretion and (iii) may allow CENTRIX access to at its
facility during normal business hours, at its discretion. In the event that
INTERPHARM provides written notice that it agrees with the grounds for
rejection, CENTRIX may withhold payment for that shipment or the rejected
portion thereof, if payment has not been made, and if payment has been made,
INTERPHARM shall credit CENTRIX for that shipment.
3.6.1 Hidden Defects. As soon as either Party becomes aware of a Hidden
Defect in any Product lot, it shall immediately notify the other
Party and the Batch involved, at CENTRIX's election, shall be deemed
rejected as of the date of such notice, subject to INTERPHARM's
right to dispute the notice as set forth below. In the event that
the notice is not disputed, INTERPHARM shall refund all moneys paid
for the shipment of Product involved.
3.6.2 Disputed Rejection. In the event that INTERPHARM provides a written
notice in which it disputes any of the grounds for rejection put
forth by CENTRIX, such dispute shall be resolved by the decision of
___________________________________________, using validated test
methods approved or accepted by FDA or USP including any methods or
specifications described in post-approval commitments to FDA. The
determination of the Lab with respect to all or part of any shipment
of the Products shall be final and binding upon the parties and
enforceable in any court of competent jurisdiction, but only as to
the reasons given by CENTRIX in rejecting or recalling the shipment
or portion thereof and shall have no effect on any other matter or
issues for which said entity did not render a determination. The
initial cost of the Lab shall be borne by CENTRIX (the "Rejection
Initial Costs"). The losing Party shall bear all costs relating to
the Lab, including the Rejection Initial Costs which shall be paid
within thirty (30) days of the Lab's final determination. The
Parties hereby agree to instruct the Lab, to the extent possible, to
make a determination within thirty (30) days of submission.
3.7 Recalls. If any Product is recalled pursuant to FDA regulation or other
applicable laws or because INTERPHARM or CENTRIX, in either of their discretion
determine that a recall is necessary to protect the public health and such
recall is due to a Party's gross negligence or willful misconduct or a material
breach of any representation or warranty hereunder, then the Party whose conduct
caused the need for the recall shall bear all out-of-pocket costs in connection
with the recall, including, but not limited to, all notification letters,
postage, phone calls, faxes, courier charges, and all shipping expenses. If the
recalled Product is to be destroyed and the recall is due to INTERPHARM's gross
negligence, willful misconduct or material breach, INTERPHARM, at CENTRIX's
request, shall, at CENTRIX's sole discretion, replace free of charge said
Product or issue a credit to CENTRIX's account or refund payment to CENTRIX. If
such a recall is due to CENTRIX's gross negligence or willful misconduct or a
material breach of any representation or warranty of CENTRIX hereunder, then
CENTRIX shall bear all incremental out-of-pocket direct costs in connection with
the recall, including, but not limited to, all notification letters and all
shipping expenses. The parties agree to cooperate in case of a recall of any of
the Product and provide such information as may be necessary to effectuate the
recall and to satisfy any regulatory requests about the recall.
3.7.1 Disputed Recall. In the event that either Party provides written
notice to the other that it disputes any of the grounds for a recall, such
dispute shall be resolved by a mutually agreeable independent expert with
expertise in the area of the recall (the "Independent Expert"). The initial
costs of retaining the Independent Expert shall be paid by the Party initiating
the recall (the "Recall Initial Costs"). The losing Party shall bear all costs
relating to the Independent Expert, including the Recall Initial Costs, as well
as all costs relating to the recall and its consequences (including any monies
previously paid with respect to the recall), which shall be paid within thirty
(30) days of the Independent Expert's final determination. The Parties hereby
agree to instruct the Independent Expert, to the extent possible, to make a
determination within thirty (30) days of submission.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES AND COVENANTS
4.1 Representations and Warranties by each Party. Each Party hereby represents
and warrants to the other party as follows:
4.1.1 Corporate Existence. Such Party is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction
in which it is incorporated.
4.1.2 Authorization and Enforcement of Obligations. Such party (a) has the
corporate power and authority and the legal right to enter into this Supply
Agreement and to perform its obligations hereunder, and (b) has taken all
necessary corporate action on its part to authorize the execution and delivery
of this Supply Agreement and the performance of its obligations hereunder. This
Supply Agreement has been duly executed and delivered on behalf of such party,
and constitutes a legal, valid, binding obligation, enforceable against such
party in accordance with its terms.
4.1.3 No Conflict. The execution and delivery of this Supply Agreement and the
performance of such Party's obligations hereunder (a) do not conflict with or
violate any requirement of applicable laws or regulations, and (b) do not
conflict with, or constitute a default under, any material contractual
obligation of such party.
4.2 Covenants by Each Party. Each Party hereby covenants and agrees with each
other that it shall not take any action, or fail to take any action, that would
cause a violation of applicable law or regulations within or without the Initial
Territory during the term of this contract. In addition, CENTRIX hereby
covenants and agrees with INTERPHARM that it shall:
4.2.1 Within 30 days of any material change, furnish to INTERPHARM, for its
information, any materials that are used primarily for the purpose of promoting
the Product to physicians or pharmacists. Centrix also hereby agrees that all
materials and activities relating to the marketing, promotion, offer for sale or
sale of the Product ("Sales Activities") shall, in all respects, comply with all
applicable laws relating to the marketing, promotion and sale of pharmaceutical
products.
4.2.2 Be responsible for receiving, recording and responding to all inquiries or
complaints from customers, as required by applicable law and regulations, and on
a timely basis, including alleged adverse drug events relating to the Product.
Each Party agrees to cooperate with the other Party and to provide all
information reasonably necessary to investigate and respond to any such
inquiries or complaints and each Party agrees to keep the other Party regularly
and promptly informed of any complaints it receives relating to the Product and
to notify the other Party of any adverse drug event reports coming to its
attention during the Purchase Term;
4.2.3 Subject to Section 2.1, not, directly or indirectly, sell or cooperate
with the Sale of Product outside of the Initial Territory, unless Interpharm has
provided written notice to Centrix of its satisfaction that sale of the Product
in a particular jurisdiction outside of the Initial Territory is permitted; and
4.2.4 Product supplied as Bright Stock or in any configuration by INTERPHARM
shall be affixed only with Approved Labeling prior to CENTRIX introducing
Product into interstate commerce.
ARTICLE 5 - REGULATORY MATTERS
5.1 Regulatory Documentation. INTERPHARM shall make available for CENTRIX to
inspect all data, exhibits, analysis, and other documentation necessary for
CENTRIX to insure INTERPHARM has met its regulatory requirements. CENTRIX may
not remove any documentation from INTERPHARM without INTERPHARM's agreement, and
will not allow any documents marked as confidential to be shown to other parties
5.2 Product Complaints. Each Party shall immediately inform the other by
telephone and facsimile of quality, health or safety related concerns or
inquiries that raise potentially serious and unexpected quality, health or
safety concerns as to any of the Products. All such other information not
involving any of the above shall be transmitted to the other party within three
(3) business days following receipt.
ARTICLE 6 - INDEMNIFICATION
6.1 INTERPHARM's Obligation to Indemnify. INTERPHARM agrees to indemnify,
defend, and hold harmless CENTRIX, its respective employees, officers,
directors, shareholders, agents and assigns against any and all claims, losses,
damages and liabilities, including reasonable attorneys' fees incurred by any of
them arising out of any breach of any obligation hereunder or any
representation, warranty or covenant by INTERPHARM hereunder. INTERPHARM also
agrees to indemnify, defend and hold harmless CENTRIX, its respective employees,
officers, directors, shareholders, agents and assigns against any and all Losses
(as defined below) arising out of, relating to or in connection with a
Manufacturing Defect if there is a finding by a court of competent jurisdiction
that such Losses arose solely due to such Manufacturing Defect.
6.2 CENTRIX's Obligation to Indemnify. CENTRIX agrees to indemnify, defend and
hold harmless INTERPHARM, its respective employees, officers, directors,
shareholders, agents and assigns against any and all claims, losses, damages and
liabilities, including reasonable attorneys' fees incurred by any of them
("Losses") arising out of, relating to or in connection with any breach of any
obligation hereunder or any representation, warranty or covenant by CENTRIX
hereunder. CENTRIX also agrees to indemnify, defend and hold harmless
INTERPHARM, its respective employees, officers, directors, shareholders, agents
and assigns against any and all Losses arising out of, relating to or in
connection with (i) the Sales Activities, (ii) any Outside Sales or (iii) the
final processing of the Bright Stock or any Product supplied in bulk once in
CENTRIX's possession; provided, however, that CENTRIX shall have no obligation
to indemnify INTERPHARM with respect to (i), (ii) or (iii) above upon a finding
by a court of competent jurisdiction that such Losses arose solely from a
Manufacturing Defect.
6.3 LIMITATIONS ON INDEMNIFICATION. Notwithstanding provision in this Supply
Agreement to the contrary, neither Party shall be:
6.3.1 entitled to indemnification with respect to any claim or suit to the
extent such claim or suit results from (i) its own negligence or willful
misconduct, or (ii) any action to which it has consented in writing. In
addition, the indemnification pursuant to this Article 6 shall be available only
with respect to claims made by third-parties and not for a claim made solely by
one Party against the other; or
6.3.2 liable to the other Party for any incidental, indirect, special, punitive
or consequential damages, including damages for loss of anticipated profits,
arising directly or indirectly out of or in connection with this Supply
Agreement or the sale, use or defect of any Product.
6.4 Procedures for Control of Third Party Claims. The Party entitled to make a
claim for indemnification under this Article 6 shall be referred to as the
"Indemnified Party" and the Party required to indemnify such claim shall be
referred to as the "Indemnifying Party." In order for an Indemnified Party to be
entitled to any indemnification provided for under this Supply Agreement in
respect of, arising out of or involving a claim or demand, made by any third
party against the Indemnified Party (a "Third Party Claim"), such Indemnified
Party must notify the Indemnifying Party in writing of the Third Party Claim
within thirty (30) business days after receipt by such Indemnified Party of
written notice of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided hereunder except
to the extent the Indemnifying Party shall have been actually materially
prejudiced as a result of such failure. If a Third Party Claim is made against
an Indemnified Party, the Indemnifying Party shall be entitled to participate in
the defense thereof and, upon notice to the Indemnified Party, to assume the
defense thereof; provided, that (i) the Indemnifying Party's counsel is
reasonably satisfactory to the Indemnified Party and (ii) the Indemnifying Party
shall thereafter consult with the Indemnified Party upon the Indemnified Party's
reasonable request for such consultation from time to time with respect to such
suit, action or proceeding. If the Indemnifying Party assumes such defense, the
Indemnified Party shall have the right (but not the duty) to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party. The Indemnifying Party shall be
liable for the fees and expenses of counsel employed by the Indemnified Party
for any period during which the Indemnifying Party has not assumed the defense
thereof, but the Indemnifying Party shall not be liable to the Indemnified Party
for any legal expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof. Whether or not the Indemnifying Party
defends or prosecutes any Third Party Claim, the Parties hereto shall cooperate
in the defense or prosecution thereof. Such cooperation shall include the
retention and (upon the Indemnifying Party's request) the provision to the
Indemnifying Party of records and information which are reasonably relevant to
such Third Party Claim, and making employees or any other Indemnified Party
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Whether or not the Indemnifying
Party shall have assumed the defense of a Third Party Claim, the Indemnified
Party shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the Indemnifying Party's prior written
consent, which shall not be unreasonably withheld. In no event shall the
Indemnifying Party settle any Third Party Claim if such settlement would impose
any obligation or burden on the Indemnified Party, without the prior written
consent of the Indemnified Party.
6.5 INSURANCE. Each Party shall carry products liability insurance in an amount
at least equal to _________ with an insurance carrier reasonably acceptable to
the other Party. Each Party shall name the other party as additional insured
under such policy. A certificate(s) of insurance evidencing such coverage shall
be delivered to the other party within ten (10) days prior to the date any such
Products are first commercially sold by such party. Either Party can, at any
time during the term of this Supply Agreement, require proof that it is covered
under the policy of the other Party: the other Party shall have ten (10) days to
provide evidence of such coverage.
6.6 LIMITATION OF LIABILITY. The liability of either party for any claim arising
out of contract, negligence or strict liability in tort, or any other claim
relating to this Supply Agreement, shall be limited to the actual damages
suffered or incurred by a Party. Except for indemnification for infringement, in
no event shall either party be liable for incidental or consequential damages,
loss of business or profits, special or indirect damages of any nature
whatsoever even if it has been advised of the possibility of such damages.
Notwithstanding anything contained in this Section, INTERPHARM shall be able to
collect all amounts set forth in Section 2.6. The limitations of liability
stated in this Supply Agreement form an essential basis of the bargain between
the parties and apply regardless of whether any limited remedy hereunder fails
of its essential purpose. Nothing herein shall limit any right of recovery under
any policy of insurance or any bond.
ARTICLE 7 -TERMS, TERMINATION
7.1 TERM. This Supply Agreement shall become effective as of the date first
written above and shall remain in full force and effect through the end of the
Purchase Term, or until earlier terminated as provided herein.
7.2 TERMINATION. This Supply Agreement may be terminated at any time:
7.2.1 By INTERPHARM pursuant to the terms of Section 2.6;
7.2.2 by either Party if the other Party fails to remedy and make good any
default in the performance of any condition or obligation under this Supply
Agreement within sixty (60) days of the date a written notice of default is sent
to the defaulting party thereof, (other than the failure to pay any amount due
under this Supply Agreement, for which no cure period shall be available except
as provided elsewhere.);
7.2.3 by either Party upon bankruptcy or insolvency of the other Party or
placing of the business of such party in receivership; or
7.2.4 After Year 1, by CENTRIX; provided, however, that, (i) CENTRIX shall pay
to INTERPHARM all monies owed to INTERPHARM, (ii) CENTRIX shall be responsible
to take and pay for the Binding Forecast as of the date of termination pursuant
to this Section 7.2.4, and (iii) INTERPHARM shall maintain all of its other
rights pursuant to this Supply Agreement.
7.3 EFFECT OF TERMINATION. In the event that either Party has the right to
terminate this Supply Agreement (the "Terminating Party"), this Supply Agreement
shall automatically terminate, unless such Party notifies the other Party that
it does not wish for the Supply Agreement to terminate, and the Terminating
Party shall have the rights set forth in this Supply Agreement, as well as such
other rights as to which it is entitled under applicable law. In the event of a
termination of this Supply Agreement, CENTRIX may not utilize, or allow another
party to utilize, directly or indirectly, in any way, the Data, in order to
develop the Product or make sales of the Product in the Territory or Outside
Sales, or for any other purpose. In the interest of clarity, in the event this
Supply Agreement is terminated, any party supplying CENTRIX with Product may not
utilize the Data in any way.
3
7.4 WAIVER. Failure to terminate this Supply Agreement following a breach or
failure to comply with the terms and conditions of this Supply Agreement shall
not be deemed a waiver of the non- breaching Party's defenses, rights or causes
of action arising from such or any future breach or noncompliance.
7.5 CHANGE IN CIRCUMSTANCE. In the event that (i) generic versions of the
Product are introduced into the market; and/or (ii) there are significant
regulatory changes which affect the manufacture, distribution, sale, and
marketing of the Product, the Parties agree to discuss such changed
circumstances, but have no obligation to vary the terms of this Supply
Agreement.
ARTICLE 8 - CONFIDENTIALITY; NON ASSIGNABILITY
8.1 Non-Assignability. This Supply Agreement and the rights of the Parties
hereunder shall not be assignable nor shall the obligations of either Party be
delegable, without the prior written consent of the other Party, which consent
shall not be unreasonably withheld, provided that either Party may assign its
rights or delegate its duties under this Supply Agreement without obtaining such
consent, to any affiliate or to a successor in interest to the assigning Party's
business (whether by sale of assets, stock, merger, or otherwise). In the event
either Party seeks and obtains the other party's consent to assign or delegate
its rights or obligations to another Party, or in the event of an assignment or
delegation to an Affiliate, or to a successor in interest, the assigning party
shall remain liable for its obligations hereunder.
8.2 Confidentiality. Except for literature and information intended for
disclosure to customers, and except as may be required to obtain government
approval to manufacture, sell or use a Product, or as may be required under
applicable federal securities laws, each Party will treat as confidential the
Confidential Information, and will take all necessary precautions to assure the
confidentiality of such information. Each Party agrees to return to the other
Party upon the expiration of the Purchase Term or termination of this Supply
Agreement all Confidential Information acquired from such other party, except as
to such information it may be required to retain under applicable law or
regulation, and except for one copy of such information to be retained by such
party's legal department or outside counsel. Notwithstanding the foregoing, all
Data shall be shall be returned by CENTRIX to INTERPHARM upon termination of
this Supply Agreement. Neither Party shall, during the period of this Supply
Agreement or for five (5) years thereafter, without the other Party's express
prior written consent use or disclose any such Confidential Information for any
purpose other than to carry out its obligations hereunder. Each Party, prior to
disclosure of such Confidential Information to any employee, consultant or
advisor shall ensure that such person is bound in writing to observe the
confidentiality provisions of this Supply Agreement. The obligations of
confidentiality shall not apply to information that the receiving party is
required by law or regulation to disclose, provided however that the receiving
party shall so notify the disclosing party of its intent and cooperate with the
disclosing party on reasonable measures to protect the confidentiality of the
information.
8.3 Public Disclosure. Except for such disclosure as is deemed necessary, in the
reasonable judgment of a Party, to comply with applicable laws, no announcement,
news release, public statement, publication, or presentation relating to the
existence of this Supply Agreement, the subject matter hereof, or either Party's
performance hereunder will be made without the other Party's prior written
approval, which approval shall not be unreasonably withheld. The Parties agree
that they will use reasonable efforts to coordinate with respect to a joint
press release relating to the existence of this Supply Agreement, as well as the
Form 8-K to be filed by INTERPHARM relating to the same; provided, that with
respect to such press release and the Form 8-K, INTERPHARM may make any
statements deemed by its counsel to be necessary under applicable law.
ARTICLE 9 - FORCE MAJEURE
9.1 Force Majeure. No failure or omission by the parties in the performance of
any obligation according to this Supply Agreement shall be deemed a breach of
this Supply Agreement or create any liability if the same shall arise from any
cause or causes beyond the control of the party, including, but not limited to,
strikes, riots, war, acts of God, invasion, fire, explosion, floods, delay of
carrier, shortage or failure in the supply of materials, energy shortage and
acts of government or governmental agencies or instrumentalities.
9.2 Obligations of the Parties in case of Force Majeure. In the event that due
to force majeure either party hereto shall be delayed or hindered in or
prevented from the performance of its duties or doing acts required under the
terms of this Supply Agreement, the performance of such act, except for the
obligation to pay amounts due under this Supply Agreement, shall be excused for
the period of the delay. Notwithstanding the aforementioned, the party subject
to force majeure shall take all reasonable steps to resolve the condition(s)
forming the basis of force majeure.
ARTICLE 10 - MISCELLANEOUS
10.1 Governing Law. This Supply Agreement, and its enforcement, shall be
governed by, and construed in accordance with, the laws of the State of New York
(without regard for conflict rules thereof) and the United States.
10.2 Severability. Should any section, or portion, of this Supply Agreement be
held invalid by reason of any law, statute or regulation existing now or in the
future in any jurisdiction by any court of competent authority or by legally
enforceable directive of any governmental body, then such section or portion
thereof shall be validly reformed so as to approximate the intent of the parties
as nearly as possible and, if unreformable, shall be deemed divisible and
deleted with respect to such jurisdiction; this Supply Agreement shall not
otherwise be affected.
10.3 Waiver. The rights and remedies of the parties to this Supply Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under this Supply Agreement will
operate as a waiver of any such right, power or privilege, and no single or
partial exercise of any such right, power or privilege will preclude any other
or further exercise of such right, power or privilege or the exercise of any
other right, power or privilege.
10.4 Notices. All notices hereunder shall be deemed to have been delivered if by
certified mail, return receipt requested, or if sent by facsimile, as follows.
If to INTERPHARM:
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: President
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
If to CENTRIX PHARMACEUTICAL, INC.:
▇▇▇ ▇▇▇▇▇
President
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
10.5 Survival. The provisions of Article 4, Article 6 and Article 8 of this
Supply Agreement shall survive the termination of this Supply Agreement.
10.6 Counterparts. This Supply Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original of this Supply
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement. Any party to this Supply Agreement may deliver an
executed copy hereof by facsimile transmission to another party hereto and any
such delivery shall have the same force and effect as any other delivery of a
manually signed copy of this Supply Agreement.
10.7 Exhibits, Schedules. Any exhibits and schedules to this Supply Agreement,
are herby incorporated by reference into and made a part of this Supply
Agreement.
10.8 Signature Warranty. It is understood and agreed by the Parties that each
represents and warrants to the other that the individual signing this Supply
Agreement on behalf of the Party is their duly authorized representative and
that such individual's signature binds the Party represented to the terms of
this Supply Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supply Agreement
to be executed by their duly authorized officers.
INTERPHARM HOLDINGS, INC. CENTRIX PHARMACEUTICAL, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
----------------- -----------------
Name: ▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇
Title: President Title: President