"CONFIDENTIAL MATERIAL FILED SEPARATELY WITH THE COMMISSION"
EXHIBIT 10.29
CONTRACT MANUFACTURING AGREEMENT
BY AND BETWEEN
HOECHST ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
AND
THE RUGBY GROUP, INC.
February 27, 1998
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CONTRACT MANUFACTURING AGREEMENT
AGREEMENT (this "Agreement") dated as of February 27, 1998, by and between
HOECHST ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC., a Delaware corporation ("HMRI"), and THE RUGBY
GROUP, INC., a New York corporation ("Rugby").
WHEREAS, HMRI is engaged in the manufacture of certain pharmaceutical
products at its manufacturing facilities; and
WHEREAS, Rugby owns certain abbreviated new drug applications for certain
generic pharmaceutical products and desires to have HMRI manufacture such
products in accordance with this Agreement; and
WHEREAS, HMRI desires to supply such products to Rugby, upon the terms and
subject to the conditions provided herein.
NOW THEREFORE, in consideration of the premises and of the mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth below. Unless the
context indicates otherwise, the singular shall include the plural and the
plural shall include the singular.
I.1 "ANDA" means the abbreviated new drug applications related to the
Products, submitted to the FDA pursuant to provisions of the Act and applicable
regulations related thereto.
I.2 "Act" means the Federal Food, Drug and Cosmetic Act, as amended.
I.3 "Affiliate" means any company, partnership or other entity which
directly or indirectly controls, is controlled by or is under common control
with a party to this Agreement. For purposes of this Agreement, "control" with
respect to an entity shall mean the legal power to direct or cause the direction
of the general management and policies of such entity.
I.4 "Agreement" means this Contract Manufacturing Agreement.
I.5 "Cost of Sales" shall be determined using the accrual basis of
accounting in accordance with GAAP applied in a manner consistent with Rugby's
customary practices and includes: (i) the Manufacturing Costs relating to *;
plus (ii) all royalties paid to third parties with respect to * (other than to
HMRI or its Affiliates pursuant to this Agreement).
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RUGBY CONTRACT MFG - REDACT.DOCRUGBY CONTRACT MFG - REDACT
I.6 "FDA" means the United States Food and Drug Administration or any
successor entity thereto.
I.7 "Force Majeure" has the meaning set forth in Section 10.3 herein.
I.8 "GMP" means Good Manufacturing Practices as promulgated under the
Act at 21 CFR (chapters 210, 211, 600 and 610), as the same may be amended or
re-enacted from time to time.
I.9 "HMRI Know-How" means Know-How relating to the Process or Product,
known to HMRI.
I.10 "Initial Term" means the period commencing on the date hereof and
ending on December 31, *, unless terminated earlier in accordance with Section
3.2 herein.
I.11 "Know-How" means technical and other information including
without limitation ideas, concepts, inventions, discoveries, data, formulae,
specifications, procedures for experiments and tests and other protocols,
results of experimentation and testing, media formulations, fermentation,
recovery and purification techniques and assay protocols.
I.12 "Manufacturing Costs" means with respect to * manufactured in
finished dosage form (SKU) pursuant to this Agreement or manufactured in whole
or part by a third party or third parties on behalf of Rugby or its Affiliates,
all documented costs paid to HMRI or its Affiliates or to a third party or third
parties in order to complete * in finished dosage form (SKU) for Rugby or its
Affiliates, including, costs related to the purchase of labels. With respect to
* manufactured in finished dosage form (SKU) by Rugby or its Affiliates,
Manufacturing Costs shall include Rugby's or any of its Affiliates Direct
Material Costs, Direct Labor Costs and Overhead attributable to *. "Direct
Material Costs" shall mean reasonable costs incurred in purchasing raw materials
(without deduction for waste), including sales and excise taxes imposed thereon,
and all costs of packaging components. "Direct Labor Costs" shall mean the
reasonable cost of temporary and full-time employees engaged in manufacturing
activities who are directly involved in product manufacturing and packaging and
in quality assurance/quality control. "Overhead" allocated to a Product means
indirect costs associated with the production, testing, packaging, storage and
handling of product, including a reasonable allocation of facilities' costs
allocable to product manufacturing and packaging, including electricity, water,
sewer, waste disposal, property taxes and depreciation of building and
machinery. The allocation and calculation of Rugby's or its Affiliates'
Manufacturing Costs shall be made in accordance with standard cost and
reasonable cost accounting methods in accordance with GAAP, applied in a manner
consistent with Rugby's customary practices. Notwithstanding the foregoing,
Manufacturing Costs shall not include costs relating to distribution expenses.
I.13 "NDA Product" means the products supplied by HMRI to Rugby
pursuant to the Supply and License Agreement.
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I.14 "Net Profit" means with respect to * Net Sales less Cost of
Sales, determined using the accrual basis of accounting in accordance with GAAP
applied in a manner consistent with Rugby's customary practices, excluding the
impact of unusual and nonrecurring items.
I.15 "Net Sales" shall be determined using the accrual basis of
accounting in accordance with GAAP applied in a consistent manner with Rugby's
customary practices and means the actual gross invoice price for sales of * by
Rugby or its Affiliates, less: (i) any and all promotional allowances, rebates,
quantity and cash discounts, and other usual and customary discounts to
customers accrued in the ordinary course of business, in accordance with
historical practice and GAAP and current industry trends; (ii) amounts repaid or
credited by reason of rejections or returns of goods; (iii) retroactive price
reductions; and (iv) 50% of the reasonable allowance for doubtful accounts
accrued in the ordinary course of business, in accordance with historical
practice and GAAP.
I.16 "Process" means the process or processes for the production of
Product.
I.17 "Products" means generic versions, in package size (SKU) and the
finished dosage forms as set forth on Exhibit A attached hereto, and such other
products as may be added pursuant to the terms of Section 2.4(a) herein;
provided, however, that generic versions, in the finished dosage forms set forth
on Exhibit B will be added as Products upon written notification by Rugby to
HMRI that ANDA approval has been attained with respect to such Product;
provided, further, that Rugby may remove a Product listed on Exhibit B upon
written notification to HMRI prior to production of site qualification batches
if pilot or active biostudies with respect to such Product have not been
initiated prior to the date hereof or if an ANDA with respect to such Product
has not been submitted to the FDA prior to January 1, *.
I.18 "Rugby Know-How" means know-how relating to the Process or
Product, known to Rugby and supplied to HMRI pursuant to the provisions of
Section 2.2 herein.
I.19 "Specifications" means the written specifications for Product
contained in the ANDAs. Rugby may amend the Specifications only with the prior
written consent of HMRI, which consent shall not be unreasonably withheld.
I.20 "Supply and License Agreement" means that certain Supply and
License Agreement between HMRI and Rugby of even date herewith.
I.21 "Taxes" has the meaning set forth in Section 2.16 herein.
I.22 "Term" means the period including the Initial Term and ending on
the date of the termination of this Agreement in accordance with Article IV
herein.
I.23 "Territory" means the United States and its possessions and
territories.
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ARTICLE II
MANUFACTURE, PURCHASE AND
SALE OF PRODUCT
II.1 Purchase and Sale. Pursuant to the terms and conditions of this
Agreement, HMRI agrees to manufacture for Rugby, during the Term, the Products
for sale by Rugby in the Territory. During the Term, Rugby agrees to purchase
all of its requirements for the Products for sale in the Territory from HMRI.
HMRI agrees to use commercially reasonable efforts to meet Rugby's demand for
the Products and if there is a shortage in manufacturing capacity, production
capacity will be allocated proportionately among all parties (including HMRI and
its Affiliates) based upon each party's required production over the previous
twelve months. HMRI may manufacture Products at approved locations pursuant to
the ANDAs and may subcontract with third parties for the manufacture or
packaging of Products to fulfill its obligations hereunder at such approved
locations.
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On or subsequent to the date of this Agreement, if Rugby can produce the
required number of quotes, as specified below, to supply a generic equivalent of
any Product at a price that is * or less than the price paid by Rugby for such
Product pursuant to Section 2.12 (the "Reduced Price"), Rugby will promptly
notify HMRI in writing, which notification will contain such bona fide quote or
quotes, as the case may be, and will specify the package sizes (SKU) and
finished dosage forms of Product (the "Reduction Notice"); provided, however, if
Rugby or any of its Affiliates provides a quote, to be a bona fide quote, such
quote must set forth the Manufacturing Costs for the Product on a fully burdened
basis and must be in accordance with GAAP applied in a manner consistent with
Rugby's customary practices. Two Reduced Price quotes are required prior to
January 1, *, with the average of such two quotes to be referred to herein as
the "Reduced Price"; provided, however, if Rugby or any of its Affiliates has
obtained its own ANDA for a Product, only Rugby's or its Affiliate's own Reduced
Price quote for such Product, consistent with the proviso in the preceding
sentence, is required. On or after January 1, *, only one Reduced Price quote,
whether provided by Rugby or a third party, is required. Within ten (10)
business days of HMRI's receipt of the Reduction Notice, HMRI shall notify Rugby
in writing that either (i) the price charged by HMRI to Rugby shall be reduced
to the Reduced Price, or (ii) HMRI is not willing to reduce the price of such
Product. In the event HMRI notifies Rugby that HMRI will not reduce the price of
such Product to the Reduction Price, then Rugby may, in its sole discretion,
remove such Product from this Agreement by delivering a written notice to HMRI.
In the event that a Product is removed from this Agreement pursuant to the
provisions of this Section 2.1, then upon fulfillment of its binding obligation
to purchase such Product in accordance with Section 2.6(b) herein, such Product
shall be removed from this Agreement and shall no longer be considered a Product
or be subject to this Agreement; provided, however, that any Product removed
from this Agreement will remain on the List of Upside Products in Exhibit H to
the Stock Purchase Agreement, dated as of August 25, 1997, as amended, by and
among HMRI, Marisub, Inc. and ▇▇▇▇▇▇ Pharmaceuticals, Inc. (the "Stock Purchase
Agreement"), for purposes of Article VI of the Stock Purchase Agreement. Rugby
acknowledges and agrees that in the event the annual aggregate volume of tablets
and capsules (which volume shall be based upon finished package size (SKU)) of
Product subject to this Agreement is reduced to a level which is equal to or
less than *% of the annual aggregate volume of tablets and capsules of Product
ordered by Rugby from HMRI during the twelve (12) month period prior to the date
hereof, HMRI may in its sole discretion terminate this Agreement by providing
written notification of such intent to Rugby.
II.2 Rugby Know-How. Rugby hereby grants HMRI the non-exclusive right
to use the Rugby Know-How for the purpose of this Agreement. HMRI agrees not to
use or exploit the Rugby Know-How for any other purpose other than as set forth
in this Agreement.
II.3 Shelf Life. HMRI will ship Product to Rugby with a shelf life at
least equal to the requisite regulatory shelf life for such Product minus *
months.
II.4 Product Expansion or Abandonment/ Site Qualification.
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(a) Product Expansion or Abandonment. Exhibit A attached hereto
sets forth the initial list of Products subject to the terms of this Agreement,
and may only be amended from time to time as provided in this Section 2.4.
Except as provided herein, additional generic versions of Products in finished
dosage forms and in package sizes (SKU) pursuant to Rugby ANDAs may be added to
the terms of this Agreement only upon the written agreement of HMRI and Rugby;
provided, however, that subject to the provisions of Section 1.17, (i) the
generic versions of each Product in finished dosage forms listed on Exhibit B
attached hereto will be added to the terms of this Agreement upon written
notification by Rugby to HMRI that ANDA approval has been attained; and (ii) to
the extent that HMRI does not currently have the FDA approvals necessary to
manufacture, market, distribute and sell any of the Products in package sizes of
500s and 1,000s, upon the request of Rugby, HMRI agrees to promptly take all
actions reasonably necessary (provided that all costs and expenses related
thereto are divided * between HMRI and Rugby through December 31, *, and are at
Rugby's sole cost and expense thereafter) to obtain all required consents and
approvals from the FDA in order to manufacture, market and distribute each of
the Products in such package sizes as requested by Rugby and, upon HMRI's
receipt of the required FDA approvals necessary to manufacture, market,
distribute and sell such Products in such requested package sizes, such Products
in such package sizes shall be deemed to be a "Product" pursuant to the terms of
this Agreement. Rugby may abandon Product at any time upon prior written
notification to HMRI due to statutory, regulatory or similar legislative
concerns. In the event the statutory, regulatory or similar legislative concerns
are alleviated with respect to a Product and Rugby chooses to again sell such
Product, Rugby will provide HMRI the opportunity to manufacture such Product and
in the event HMRI consents in writing to manufacture such Product, such Product
will be included again in this Agreement and again become subject to this
Agreement. In addition, Product may be abandoned by Rugby upon * written
notification by Rugby to HMRI (upon a determination of senior management of
Rugby to discontinue sales of such Product), which written notification shall
specify the package size (SKU) and finished dosage form to be abandoned;
provided, however, unless otherwise agreed to by the parties, Product may not be
abandoned until January 1, *; provided, further, that *, in finished dosage form
may be abandoned only upon the written agreement of both parties. If a Product
is subsequently abandoned pursuant to the terms of this Agreement, it will no
longer be considered a Product or be subject to this Agreement; provided,
however, in the event that Rugby determines to sell such Product again, Rugby
will provide HMRI the opportunity to manufacture such Product and in the event
HMRI consents in writing to manufacture such Product, such Product will again be
included and become subject to the terms of this Agreement. Rugby shall be
deemed to have abandoned a Product if its forecasted purchases of such Product
is equal to zero for *.
Subject to the availability of active ingredients and manufacturing
capacity, in the event Rugby terminates the Agreement pursuant to the provisions
of Section 3.2(a)(i) and (ii) herein, then on or prior to the termination of
this Agreement, Rugby may purchase up to * supply of such Products, which supply
is based upon the amount of Product purchased by Rugby or its Subsidiaries over
the previous *. Any such purchase shall not increase the obligations of HMRI
pursuant to Sections 2.11(a) and (b) of this Agreement. The timing for delivery
of such Product shall be determined by HMRI and shall be based upon the
availability of active ingredient and available manufacturing capacity.
(b) Site Qualification. During the Term, HMRI agrees to provide
technical consultation reasonably requested by Rugby that HMRI is reasonably
able to provide for the qualification of a second manufacturing site for up to *
ANDAs during the time that such qualification is pending. Rugby will provide
HMRI reasonable notification of its intent to qualify a second manufacturing
site for a Product for which technical consultation is requested pursuant to
this Section 2.4(b). Rugby will be responsible for all of HMRI's reasonable
out-of-pocket costs in connection with such technical consultation, which
expenses will be reimbursed by Rugby within thirty (30) days after completion of
such qualification.
II.5 Labeling and Packaging. Rugby shall be responsible for all costs
of developing, packaging and labeling for the Product, and shall provide HMRI
all art work and pharmacological information, usage instructions and warnings to
be applied to each Product, which shall be consistent with the FDA approved
labeling for the Products. Rugby shall provide such information pursuant to this
Section 2.5 to HMRI a sufficient period of time in advance of delivery
requirements for the Products set forth in this Agreement.
II.6 Forecasts.
(a) Long-Range Forecasts. Upon execution of this Agreement and by
* of each year thereafter, Rugby shall provide HMRI with a forecast of the
quantities of each Product, by package size (SKU) and finished dosage form, that
Rugby intends to order during the * year period commencing with the following
calendar year. The parties acknowledge that such forecasts shall represent
reasonable best faith estimates, not purchase commitments.
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(b) Short-Term Forecasts. Upon execution of this Agreement, and
thereafter at least thirty (30) days prior to the first (1st) day of each
succeeding *, Rugby will furnish HMRI with a rolling forecast of the quantities
of each Product, by package size (SKU) and finished dosage form, that Rugby
intends to order during the * period commencing with that *, stipulating
periodic delivery requirements. The first * of such forecast shall constitute a
binding commitment of Rugby to purchase such quantities evidenced by purchase
orders to HMRI pursuant to Section 2.6 herein. In the event it is reasonably
necessary for HMRI to purchase active ingredient for Product beyond the binding
commitment of Rugby, HMRI may request written authorization from Rugby regarding
such purchase. In the event Rugby authorizes such purchase, or authorizes a
portion of such purchase, Rugby will be responsible for the costs of the active
ingredient authorized to be purchased which is not used by HMRI in the
manufacture of Product or other products. In the event Rugby does not authorize
such purchase, HMRI shall not be required (but shall use commercially reasonable
efforts) to meet Rugby's forecasts or orders with respect to the Products
manufactured with such active ingredient. Rugby will be required to purchase
that percentage of the quantity of each Product specified in the short-term
forecast for successive * as follows:
PERCENTAGE OF PRODUCT INDICATED
* PERIOD IN THE FORECAST THAT RUGBY IS
OF THE FORECAST IS REQUIRED TO PURCHASE
First *%
Second *% over the next *
II.7 Orders. Rugby acknowledges that each Product is produced in full
lot quantities, as set forth on Exhibit A attached hereto. At least * days prior
to the delivery date specified in each respective order, Rugby shall place its
purchase order with HMRI for each Product in full lot quantities, by package
size (SKU) and finished dosage form. Unless otherwise specified in writing, all
orders placed by Rugby with HMRI hereunder shall be addressed as follows:
Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇
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Such orders shall specify in each three month period an aggregate quantity
of each Product, by package size (SKU) and finished dosage form, which is at
least as great as the amount of such Product required to be purchased by Rugby
pursuant to Section 2.5. HMRI may reject any portion of an order which exceeds
*% of the most current forecast underlying such order, or may reject any order
which (i) except as otherwise provided in Section 2.15 regarding a good faith
payment dispute by Rugby, is received at a time when Rugby is delinquent in
payment hereunder or (ii) cannot be filled due to circumstances arising under
Section 10.3. Rugby acknowledges it will make good faith forecasts of the
quantities of each Product, by package size and finished dosage form, that Rugby
intends to order and will only place orders for Product to the extent reasonably
sufficient to support its inventory safety stock. Subject to availability of
active ingredient, HMRI will use its reasonable commercial efforts to supply
orders which exceed *% of the most current forecast underlying such order. All
rejections by HMRI shall be in writing and delivered to Rugby within five (5)
business days of HMRI's receipt of the order. HMRI shall deliver against each
such order in accordance with Section 2.7 herein. Rugby shall be obligated to
purchase all such Product, by package size (SKU) and finished dosage form,
ordered and delivered by the delivery date specified in Rugby's purchase order,
provided that such Product meets the Specifications. In no event shall the use
of any form of order acknowledgment, purchase order, shipping document,
confirmation or waybill be deemed to modify or substitute for the terms and
conditions of this Agreement. All such documents shall be subject to, and shall
be deemed to incorporate, the terms and conditions of this Agreement. The
parties acknowledge that the binding commitments of Rugby to purchase Product in
accordance with the rolling forecast of Rugby in effect on the date hereof,
which forecast is attached hereto as Exhibit C, will be binding on the parties
after the execution of this Agreement and such Product shall be purchased
pursuant to the terms of this Agreement.
II.8 Delivery. Delivery terms shall be F.O.B. HMRI's manufacturing
facility. HMRI shall ship Product in accordance with Rugby's purchase order form
or as otherwise directed by Rugby in writing. Title to any Product purchased by
Rugby shall pass to Rugby upon the earlier of (i) a common carrier accepting
possession or control of such Product or (ii) the passage of such Product from
the loading dock of HMRI's facility to Rugby or its agent.
II.9 Shortages/ Rejected Goods.
(a) Shortages. Rugby shall notify HMRI in writing of any shortage
in quantity of any shipment of Product within the earlier of (i) ten (10)
business days after discovery of such shortage and (ii) the shelf life of such
Product, but only to the extent that such Product is in the possession of Rugby.
Such notification shall specify the package size (SKU) and finished dosage form
of such Product. Rugby shall notify HMRI in writing of any shortage in quantity
of any shipment of Product that is not within its possession within the earlier
of (i) ten (10) business days after discovery and (ii) the shelf life of such
Product, and shall provide documentation reasonably satisfactory to HMRI
demonstrating such shortage existed while such Product was in the possession of
Rugby. In the event of such shortage (and the satisfaction in HMRI's reasonable
determination of documentation if Product is not in the possession of Rugby),
HMRI shall make up the shortage within seven (7) business days if replacement
Product stock is available, or, if no such replacement stock is available, as
soon as reasonably practicable after receiving such notice, at no additional
cost to Rugby.
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(b) Rejected Goods. Rugby shall notify HMRI in writing of any
claim relating to Product that fails to meet the Specifications (other than for
reasons of storage, handling, or shipping by Rugby, its Affiliates, customers
and carriers) within the earlier of (i) ten (10) business days after discovery
that such Product so fails to meet the Specifications and (ii) the shelf life of
such Product, which notification shall specify the package size (SKU) and
finished dosage form of such Product. Subject to the provisions of Section
2.9(c) herein, HMRI shall replace such Product that fails to meet the
Specifications within ten (10) business days at no additional cost to Rugby. The
provisions of this Section 2.9(b) shall not apply to Product damaged in transit.
(c) Disputes. In the event of a conflict regarding whether
Product fails to meet the Specifications which HMRI and Rugby are unable to
resolve, a sample of such Product shall be submitted by Rugby to an independent
laboratory reasonably acceptable to both parties for testing and the test
results obtained by such laboratory shall be final and controlling. The fees and
expenses of such laboratory testing shall be borne entirely by the party against
whom such laboratory's findings are made. In the event the test results indicate
that the Product in question fails to meet the Specifications, HMRI shall
replace such Product at no additional cost to Rugby within ten (10) business
days after receipt of such results. In the event the test results indicate that
the Product in question does meet the Specifications, Rugby shall pay all
additional shipping and transportation costs incurred as a result of the
conflict.
(d) Sole Remedy. The provisions of Sections 2.9(a) in the case of
shortage in quantity of any shipment of Product, and except as otherwise
provided in Section 8.2(a) herein, Sections 2.9(b) and (c), in the case of
Product that fails to meet the Specifications, shall be the sole remedy
available to Rugby with respect to any Shortage in quantity of any shipment of
Product, or Product that fails to meet the Specifications, as the case may be.
II.10 Capacity Allocation. In the event HMRI, upon receiving a
forecast pursuant to Section 2.6 or a firm order pursuant to Section 2.7, is or
anticipates that it will be unable to meet such forecast or firm order, either
in whole or in part, then HMRI shall give written notice of such inability to
Rugby within ten (10) days of receipt of such forecast or firm order. HMRI and
Rugby shall meet within ten (10) days of such written notice to consider
alternatives for meeting Rugby's requirements for Product, including but not
limited to the sharing of the cost to expand HMRI's manufacturing capacity.
II.11 Failure to Supply
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(a) At any time prior to the second anniversary of this
Agreement, if Rugby makes a firm order for Product in accordance with Section
2.7 and HMRI is unable to deliver such Product to Rugby due to a Force Majeure,
or if a Product is abandoned by HMRI due to statutory, regulatory, or
legislative concerns due to a Force Majeure, for a period of up to * from the
date of such failure to supply, HMRI will reimburse Rugby for an amount equal to
Rugby's *. If such inability to meet a firm order is partial, HMRI shall deliver
against firm orders such quantities of such Product as are available. Rugby
acknowledges that it shall use its commercially reasonable good faith efforts to
purchase replacement Product at the lowest prices available. The provisions of
this Section 2.11(a) shall be Rugby's sole remedy for HMRI's inability to
deliver a Product to Rugby due to a Force Majeure in accordance with this
Section 2.11(a).
(b) During the Initial Term, if Rugby makes a firm order for
Product in accordance with Section 2.7 and HMRI is unable to deliver such
Product to Rugby in accordance with the terms of this Agreement due to any
reason other than a Force Majeure, or if a Product is abandoned by HMRI due to
statutory, regulatory, or legislative concerns due to any reason other than a
Force Majeure, for a period of up to * from the date of such failure to supply,
HMRI will reimburse Rugby for an amount equal to Rugby's *. If such inability to
meet a firm order is partial, HMRI shall deliver against firm orders such
quantities of such Product as are available. Rugby acknowledges that it shall
use its commercially reasonable good faith efforts to purchase replacement
Product at the lowest prices available. The provisions of this Section 2.11(b)
shall be Rugby's sole remedy for HMRI's inability to deliver a Product to Rugby
in accordance with this Section 2.11(b)The provisions of this Section 2.11(b)
shall be Rugby's sole remedy for HMRI's inability to deliver a Product to Rugby
in accordance with this Section 2.11(b), except with respect to a willful breach
by HMRI that results in a material adverse effect to Rugby of the value of this
Agreement taken as a whole.
(c) All amounts owed to Rugby by HMRI pursuant to this Section
2.11 shall bear interest in the same manner as amounts owed by Rugby to HMRI
pursuant to Section 2.15. Rugby shall be entitled to set-off amounts owed
pursuant to this Section 2.11 for which a credit acknowledgment has been issued
by HMRI against purchases of Product.
II.12 Product Pricing. The manufacturing costs for the Products shall
be the lower of (i) HMRI's costs practices (on a capacity basis), as set forth
in the HMRI Product Costing Manual, according to generally accepted accounting
principles, adjusted at the rate of 3.5% annually for inflation or (ii) the 1997
Chelsea standard costs, adjusted at the rate of 3.5% annually for inflation, in
each of (i) or (ii) except with respect to active ingredient, which at all times
shall be at * . In the event either party is able to procure active ingredient
at a lesser price, the parties shall work together in good faith (to the extent
permitted pursuant to contractual obligations of the parties) to procure such
lower priced active ingredient. The initial manufacturing costs for the
Products, by package size (SKU) and finished dosage form FOB at HMRI's
manufacturing site is set forth in * on Exhibit A attached hereto and will be
adjusted January 1 of each year during the Term at the rate of 3.5% annually for
inflation (except with respect to active ingredient, which at all times shall be
at *. Except as otherwise provided in Section 2.10, the manufacturing costs for
the Products from the date hereof through the second anniversary of this
Agreement shall be as follows: * anniversary of this Agreement and at all times
thereafter, the pricing for the Products shall be as set forth in * of Exhibit A
to this Agreement and in addition shall include a manufacturing profit to HMRI
of *% (except for *, which after the second anniversary of this Agreement will
be supplied at cost and will have the * as set forth in Section 2.13). If there
is any dispute regarding the provisions of this Section 2.12, such dispute shall
be resolved in accordance with the provisions of Article 10 herein.
II.13 Profit Split Related to *. Rugby shall make payments to HMRI
equal to (a) with respect to sales of * from the Closing Date through December
31, *, *% of the Net Profit of * (other than Distributed *, as defined in the
Stock Purchase Agreement, for which the * payment is provided in Section 6.4
thereof), based upon the quarterly periods ended March 31, June 30, September 30
and December 31, and (b) thereafter, *% of the Net Profit of * (other than
Distributed *, for which the * payment is provided in Section 6.4 Stock Purchase
Agreement), based upon the quarterly periods ended March 31, June 30, September
30 and December 31, in perpetuity. Prior to the second year anniversary of this
Agreement, the profit split for * shall be calculated as if purchased at the
cost set forth in * Exhibit A to this Agreement. Profit split payments made to
HMRI shall reflect the net profit (as calculated in the same manner as the
calculation of Net Profit) received on the bundled sale of *, multiplied by the
following fraction, the numerator of which is equal to the number of units of *
multiplied by the standard invoice unit price thereof, and the denominator of
which is equal to the sum of the number of units of each product (including *)
or service included in such bundled sale multiplied by the respective standard
invoice unit price thereof.
II.14 Access to Records.
(a) Each party shall maintain complete and accurate books and
records of account relating to the manufacturing costs of Product, and sale of
*, as the case may be. Each party shall have the right during the term of this
Agreement and for one year thereafter (and, in the case
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of HMRI, at any time while profit split payments with respect to * are being
made, and for one year thereafter) to examine the relevant books and records of
the other party relating to the manufacturing costs of Products, and sale of *,
as the case may be, during normal business hours and upon reasonable advance
written notice to verify the correctness of the calculations of the
manufacturing costs of the Products, or the profit split of *, as the case may
be. Each party shall cooperate with the other with respect to all reasonable
requests made with respect to such inspection.
(b) Each party shall have three (3) years after receipt of
payments pursuant to this Agreement or receipt of information relating to the
manufacturing costs of Products, as the case may be (the "Dispute Period"), to
dispute the amount of any such payment pursuant to this Agreement or the
manufacturing costs of Products, as the case may be (a "Dispute"). If a party
does not give written notice of a Dispute within the Dispute Period to the other
(a "Dispute Notice"), the amount of such payment or the manufacturing costs, as
the case may be, shall be deemed to have been accepted and agreed to by the
other and shall be final and binding upon the parties hereto. If a party has a
Dispute, it shall promptly send the other party a Dispute Notice within the
Dispute Period, setting forth in reasonable detail the elements and amounts with
which it disagrees. Within thirty (30) days after delivery of such Dispute
Notice, the parties hereto shall attempt to resolve such Dispute and agree in
writing upon the final amount of the disputed item. No dispute shall be made
with respect to any payments made pursuant to Section 2.13 or the manufacturing
costs of the Products, as the case may be, that have previously been disputed by
a party in a review of the records of a party relating the calculation of
payments pursuant to Section 2.13 or the manufacturing costs of the Products, as
the case may be.
(c) If the parties are unable to resolve any Dispute within the
thirty (30) day period after receipt of a Dispute Notice, the New York office of
the certified public accounting firm of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP (the "Arbitrating
Accountant") shall be engaged as arbitrator hereunder to settle such Dispute as
soon as practicable. In the event ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP is unwilling or unable to
serve as the Arbitrating Accountant, the parties hereto shall select by mutual
agreement another nationally recognized certified public accounting firm, who is
not rendering (and during the preceding two-year period has not rendered)
services to either HMRI, Rugby, or any of their respective Affiliates, to serve
as the Arbitrating Accountant. In connection with the resolution of any Dispute,
the Arbitrating Accountant shall have access to all documents, records, work
papers, facilities and personnel necessary to perform its function as
arbitrator. The arbitration before the Arbitrating Accountant shall be conducted
in accordance with the commercial arbitration rules of the American Arbitration
Association. The Arbitrating Accountant's award with respect to any Dispute
shall be final and binding upon the parties hereto, and judgment may be entered
on the award. Each party shall pay one-half of the fees and expenses of the
Arbitrating Accountant with respect to any Dispute.
II.15 Payment. All payments required by this Agreement shall be made
in United States Dollars. All invoices are strictly net and payment must be
received within forty-five (45) days from the date of invoice. The date of each
invoice shall be the date of shipment of Products. Payment shall be made without
deduction, deferment, set-off, lien or counterclaim of any nature, other than
for rejected or returned goods, or credits issued by HMRI pursuant to Section
2.11 herein, in each case for which a credit acknowledgment has been issued by
HMRI. Time for payment shall be of the essence. Unless Rugby notifies HMRI in
writing of a good faith dispute, with respect to payments not received within
such forty-five (45) days, or within forty-five (45) days after the end of each
calendar quarter with respect to payments pursuant to Section 2.12 herein,
interest shall accrue on any amount overdue, at the rate of prime plus 2%, such
interest to begin accruing on a daily basis from the date of invoice, and shall
accrue both before and after judgment; provided, however, in the case of a good
faith dispute regarding payment resolved to be due and not paid within three (3)
business days after such resolution, interest shall accrue on any amount
overdue, at the rate of prime plus 2%, such interest to begin accruing on a
daily basis from the date such payment becomes overdue, and shall accrue both
before and after judgment; provided, further, in the case of a good faith
dispute regarding payment, Rugby may in its discretion determine to pay such
amounts disputed to be overdue and in the event amounts are finally determined
not to be due by Rugby, HMRI shall repay such excess amounts to Rugby determined
not be due, and interest shall accrue on any such amount, at the rate of prime
plus 2%, such interest to begin accruing on a daily basis from the date such
disputed payment was received by HMRI.
With respect to defaults of payment not cured within ten (10) business days
after receipt of written notice from HMRI to Rugby, HMRI shall, in its sole
discretion, and without prejudice to any other of its accrued rights, be
entitled to suspend the provision of the Products or to treat the Agreement as
repudiated by notice in writing to Rugby exercised at any time thereafter;
provided, however, a good ▇▇▇▇▇ ▇▇▇▇ fide dispute by Rugby regarding a payment
pursuant to this Agreement shall not be considered a default of payment so long
as Rugby notifies HMRI in writing of such dispute within the later of five (5)
business days from the date of invoice or the date of payment. Rugby
acknowledges it will notify HMRI promptly upon a determination that a dispute
exists regarding a payment.
II.16 Advertising/Marketing/Sales Costs and Product Pricing. Rugby
shall be responsible for all advertising, marketing and sales costs associated
with Product distribution. Rugby will have complete authority for all sales
pricing decisions for the Product. Rugby shall not alter the Products and shall
not recommend or knowingly sell the Products for any uses except as described in
the FDA approved Product labeling.
II.17 Taxes. Rugby shall reimburse HMRI for all tariffs, duties and
excise, sales or use, value added or other taxes or levies (collectively,
"Taxes") that are paid by HMRI that are directly related to the manufacture and
sale to Rugby of the Products and which are not otherwise included in the
product pricing set forth in Section 2.12. Notwithstanding the foregoing, Rugby
shall have no reimbursement obligations pursuant to this Section 2.17 to the
extent that (i) such Taxes are based on HMRI's net income or (ii) such Taxes are
recoverable or offset by HMRI, in whole or in part, as a credit, rebate,
deduction or otherwise.
ARTICLE III
TERM AND TERMINATION
III.1 Term. The Initial Term of this Agreement will commence upon
execution of this Agreement and will continue until December 31, *, unless
terminated earlier in accordance with the provisions of Section 3.2 herein.
Thereafter, this Agreement will automatically continue until either party
provides not less than * prior written notification to the other that this
Agreement shall terminate, which notification shall specify the date upon which
this Agreement shall terminate (which in any event shall not be prior to
December 31, *).
III.2 Early Termination.
(a) Either Rugby or HMRI, as the case may be, may terminate this
Agreement forthwith by notice in writing to the other party upon the occurrence
of any of the following events:
(i) if the other party commits a material breach of this
Agreement, other than a payment default, which in the case of a
breach capable of remedy shall not have been remedied within
thirty (30) days of the receipt by the other party of a notice
identifying the breach and requiring its remedy or such longer
time as the party in breach may demonstrate to the other party is
necessary to remedy the breach using its reasonable efforts to do
so; or
(ii) if the other party ceases for any reason to carry on
business or convenes a meeting of its creditors or has a receiver
or manager appointed in respect of all or substantially all of
its assets or is the subject of an application for an
administration order or of any proposal for a voluntary
arrangement or enters into liquidation (whether compulsorily or
voluntarily) or undergoes any analogous act or proceedings under
foreign law; or
(iii) the enactment of any law, order or regulation by a
governmental unit that would render it impossible for the other
party to perform its obligations hereunder.
III.3 Consequences of Termination and Survival. Termination of this
Agreement for whatever reason shall not affect the accrued rights of either HMRI
or Rugby arising under or out of this Agreement. The obligations under the
second paragraph only of Section 2.4(a), Section 2.11 (Failure to Supply) (in
the case of termination of this Agreement by Rugby pursuant to Section 3.2(a)
herein), Section 2.13 (Profit Split Relating to *), Section 2.14 (Access to
Records), Article 5 (Product Recalls), Article 6 (Warranties), Article 7
(Nondisclosure and Confidentiality), Article 8 (Indemnification and Insurance),
Article 9 (Dispute Resolution) or any other provision which expressly or by
implication is intended to survive expiration or termination shall survive
expiration or termination of this Agreement or of any extensions thereof.
III.4 Accrued Obligations. In the event that this Agreement is
terminated by HMRI pursuant to the provisions of Section 3.2 herein, Rugby shall
pay to HMRI, (i) all amounts outstanding and remaining to be paid for Product
supplied prior to the termination, (ii) all binding amounts for Product
forecasted pursuant to Section 2.6 herein or ordered pursuant to Section 2.7
herein and (iii) an amount to compensate HMRI for active ingredient that HMRI is
contractually committed to purchase at the time of such termination pursuant to
authorization received from Rugby in accordance with Section 2.6(b) herein which
is not subsequently used by HMRI to manufacture any Product or any other
product.
ARTICLE IV
CERTIFICATES AND ACCESS AND REGULATORY MATTERS
IV.1 Certificates of Analysis. HMRI shall perform, or cause to be
performed, sample tests on each lot of Product manufactured pursuant to this
Agreement before delivery to Rugby. Each test report shall set forth the items
tested, Specifications and test results in a certificate of analysis, containing
the types of information which shall have been approved by mutual agreement of
the parties, for each lot delivered. HMRI shall send, or cause to be sent, such
certificates to Rugby prior to delivery of each lot unless otherwise agreed.
IV.2 Certificates of Manufacturing Compliance. HMRI shall provide, or
cause to be provided, for each lot of Product manufactured pursuant to this
Agreement, a certificate of manufacturing compliance, containing the types of
information which shall have been approved by mutual agreement of the parties,
which will certify that the Product was manufactured in accordance with the
Specifications and the GMP. HMRI shall advise Rugby promptly if an authorized
agent of the FDA or other governmental regulatory agency visits any of HMRI's
manufacturing facilities, or the facilities where the Products are being
manufactured, concerning the Products. HMRI shall furnish to Rugby all material
information supplied to, or supplied by, the FDA or other governmental
regulatory agency, including the Form 483 observations and responses, to the
extent that such report relates to Products (or the ability of HMRI to supply
such Product), within five (5) business days of HMRI's receipt of such
information or delivery of such information, as the case may be.
IV.3 Changes. HMRI shall not change the critical specified raw
materials, packaging materials, their source, analytical test procedures or
critical manufacturing conditions or manufacturing equipment used in the
manufacture of Product without the prior written consent of Rugby, which consent
shall not be unreasonably withheld.
IV.4 Access to Facilities.
(a) Rugby Access. Upon the reasonable prior written request of
Rugby, Rugby shall have the right to inspect those portions of the manufacturing
and testing facilities of HMRI where Products are being manufactured or tested,
as the case may be, during regular business hours, to ascertain compliance with
GMPs. If the FDA or other applicable governmental regulatory agency asserts any
notice to the effect that HMRI has failed to comply with any law or regulation
in connection with the manufacture of Products, or if HMRI delivers Product that
does not meet the Specifications, then Rugby shall have the right to inspect
such portions of the manufacturing facilities of HMRI that relate to the
manufacture of Product upon reasonable notice and during normal business hours.
Notwithstanding the provisions of this Section 4.4(a), Rugby shall have no
obligation or be deemed to have an obligation to inspect the manufacturing and
testing facilities of HMRI.
(b) HMRI Access. Upon the reasonable prior written request of
HMRI, HMRI shall have the right to inspect those portions of the warehouse and
distribution facilities of Rugby where Products are being stored and
distributed, during regular business hours, to observe Product storage and
distribution or other related activities. If the FDA or other applicable
governmental regulatory agency asserts any notice to the effect that Rugby has
failed to comply with any law or regulation in connection with the storage or
distribution of Products, then HMRI shall have the right to inspect such
portions of the warehouse and distribution facilities of Rugby that relate to
the storage or distribution of Product upon reasonable notice and during normal
business hours. Notwithstanding the provisions of this Section 4.4(b), HMRI
shall have no obligation or be deemed to have an obligation to inspect the
warehouse and distribution facilities of Rugby.
IV.5 Regulatory Correspondence. Rugby and HMRI shall make available
(or cause to be made available) to each other within three (3) days of receipt
of regulatory correspondence regarding regulatory letters, withdrawal of
Product, and correspondence bearing on the safety and efficacy of the Product.
IV.6 Product Inquiries and Complaints. Rugby will promptly submit to
HMRI all Product safety and efficacy inquiries, Product quality complaints and
adverse drug event reports received by it, together with all available evidence
and other information relating thereto. Except as otherwise required by law or
governmental regulation, Rugby will be responsible for investigating and
responding to all such inquiries, complaints and adverse events regarding
Product. It shall be the responsibility of Rugby to comply with all federal,
state and local governmental reporting requirements regarding adverse drug
events and Product quality matters, except where such events or matters are
caused by acts or omissions of HMRI, in which case Rugby may, consistent with
applicable law and regulation, request HMRI's assistance in such compliance.
Rugby will forward a copy of all FDA submissions concerning Product adverse drug
events or any Product safety-related topic to HMRI within ten (10) business days
of submission.
IV.7 Response to Complaints and/or Adverse Drug Reactions (or Events).
Pursuant to reported complaint and/or adverse drug reaction (or event), if the
nature of the reported complaint and/or adverse drug reaction (or event)
requires testing, HMRI will, at Rugby's reasonable request and expense, perform
analytical testing of corresponding retention samples and provide the results
thereto to Rugby as soon as reasonably practicable; provided, however, HMRI
shall be responsible for the reasonable costs of such testing and reporting to
the FDA or any other governmental regulatory agency if it is determined that
HMRI is responsible for such reported complaint and/or adverse drug reaction (or
event). Such testing shall be performed using ANDA approved testing procedures.
IV.8 Additional Information. HMRI shall provide to Rugby in a timely
manner, but in no event less than sixty (60) days prior to the due date of
Rugby's annual report to the FDA with respect to the Products, all information
(in written form) which Rugby requests regarding the Products in order to comply
with applicable federal and state drug laws. Such information shall include,
without limitation, quantities of each Product sold. Rugby shall be responsible
for assuring that all promotional material produced by it relating to Products
comply with federal, state and local law. [Rugby 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 Products.] Rugby shall provide to
HMRI a copy of such FDA annual report.
ARTICLE V
PRODUCT RECALLS
V.1 Product Recalls. In the event (i) any government authority issues
a request, directive or order that Product be recalled, (ii) a court of
competent jurisdiction orders such a recall, or (iii) Rugby shall reasonably
determine that Product should be recalled, the parties shall take all
appropriate corrective actions, and shall cooperate in the investigations
surrounding the recall. In the event that Rugby determines that Product should
be recalled, Rugby shall consult with HMRI prior to taking any corrective
actions. In the event that such recall results from any cause or event other
than that arising from the defective manufacture, storage or handling (excluding
defects relating to packaging or labeling supplied by or prepared at the
direction of Rugby) of the recalled Product by HMRI, Rugby shall be responsible
for all documented out-of-pocket expenses of such recall consistent with
directions received from the appropriate governmental authority. In the event
that such recall results from any cause or event arising from the defective
manufacture, storage or handling (excluding defects relating to packaging or
labeling supplied by or prepared at the direction of Rugby), HMRI shall be
responsible for all such documented expenses. For purposes of this Agreement,
the expenses of recall shall include the expenses of notification and
destruction or return of the recalled product and all other documented
out-of-pocket costs incurred in connection with such recall, but shall not
include lost profits of either party.
V.2 Disputes. If there is any dispute concerning which party's acts or
omissions gave rise to such recall of Product, such dispute shall be referred
for decision to an independent expert (acting as an expert and not as an
arbitrator) to be appointed by agreement between Rugby and HMRI or, in the
absence of agreement, by the President for the time being of the Pharmaceutical
Research and Manufacturers of America. The costs of such independent expert
shall be borne equally between Rugby and HMRI. The decision of such independent
expert shall be in writing and, except for manifest error on the face of the
decision, shall be binding on both Rugby and HMRI.
ARTICLE VI
WARRANTIES
VI.1 FDA Approval. Rugby warrants that each Product is approved by the
FDA for the uses set forth in the Product labeling.
VI.2 Compliance with GMP. HMRI warrants that all Products will be
manufactured in conformity with the regulations of the FDA and any comparable
state agency applicable thereto.
VI.3 Conformity with Specifications. HMRI warrants that each Product
manufactured by HMRI and sold to Rugby pursuant to this Agreement will meet the
Specifications for such Product in effect at the time title to such Product
passes from HMRI to Rugby pursuant to Section 2.8 herein. Rugby may amend such
Specifications from time to time only with the prior written consent of HMRI,
which consent shall not be unreasonably withheld.
VI.4 Compliance with the Federal Food, Drug and Cosmetic Act. HMRI
warrants that all Product delivered to Rugby pursuant to this Agreement will, at
the time of such delivery, not be adulterated within the meaning of the Act and
will not be an article which may not, under the provisions of such Act, be
introduced into interstate commerce.
VI.5 No Liens. HMRI warrants that all Product delivered to Rugby
pursuant to this Agreement will, at the time of such delivery, be free and clear
of all liens, encumbrances, security interests and other encumbrances.
VI.6 Exclusion of Other Warranties. EXCEPT WHERE OTHERWISE SET FORTH
IN THIS AGREEMENT, SECTIONS 6.1, 6.2, 6.3, 6.4 AND 6.5 ARE IN LIEU OF ALL
CONDITIONS, WARRANTIES AND STATEMENTS IN RESPECT OF PRODUCT AND IN RESPECT OF
THE MANUFACTURING SERVICES PROVIDED HEREUNDER, WHETHER EXPRESSED OR IMPLIED BY
STATUTE, CUSTOM OF THE TRADE OR OTHERWISE (INCLUDING BUT WITHOUT LIMITATION ANY
SUCH CONDITION, WARRANTY OR STATEMENT RELATING TO THE DESCRIPTION OR QUALITY OF
PRODUCT, ITS MERCHANTABILITY OR ITS FITNESS FOR A PARTICULAR PURPOSE OR USE
UNDER ANY CONDITIONS) AND ANY SUCH CONDITION, WARRANTY OR STATEMENT IS HEREBY
EXCLUDED. EXCEPT AS PROVIDED IN ARTICLE 8 HEREIN, REPLACEMENT OF ANY
NONCONFORMING PRODUCT AND REASONABLE DOCUMENTED OUT OF POCKET EXPENSES SHALL BE
RUGBY'S SOLE REMEDY FOR BREACH OF ANY EXPRESS WARRANTY CONTAINED IN THIS ARTICLE
VI. In no event shall HMRI or Rugby be liable under or with respect to this
Agreement for any indirect, incidental, consequential, special or punitive
damages of any kind, including loss of profits, including but not limited to due
to breach of warranty, tort, breach or repudiation of any term or condition of
this Agreement.
"*SEE PAGE ONE OF EXHIBIT"
ARTICLE VII
NONDISCLOSURE, CONFIDENTIALITY AND TRADEMARKS
VII.1 Nondisclosure Obligations.
(a) Except as otherwise provided in this Agreement, Rugby
acknowledges that the HMRI Know-How with which it may be supplied pursuant to
this Agreement and HMRI acknowledges that the Rugby Know-How with which it may
be supplied pursuant to this Agreement or otherwise is supplied in circumstances
imparting an obligation of confidence and agrees to keep such HMRI Know-How or
Rugby Know-How, as the case may be, secret and confidential and to respect the
other's proprietary rights therein and to use the same for the sole purpose of
this Agreement and during the period of this Agreement or at any time for any
reason whatsoever not to disclose or cause or permit to be disclosed such HMRI
Know-How or Rugby Know-How, as the case may be, to any third party.
(b) Each party shall procure that only its respective employees
or employees of its Affiliates or consultants and contractors shall have access
to HMRI Know-How or Rugby Know-How, as the case may be, on a need to know basis
and shall be subject to the same obligations of confidence as the principals
pursuant to Section 7.1(a) above and shall enter into secrecy agreements in
support of such obligations. Insofar as this is not reasonably practicable, the
principals shall take all reasonable steps to ensure that any such employees,
consultants and contractors are made aware of such obligations.
(c) Both parties undertake and agree not to disclose or permit to
be disclosed at any time for any reason whatsoever to any third party or
otherwise make use of or permit to be made use of any trade secrets or
confidential information relating to the technology, business affairs or
finances of the other or of any Affiliates, suppliers, agents, distributors,
licensees, licensors or other customers of the other which comes into their
possession pursuant to this Agreement.
(d) The obligations of confidence referred to in this Section 7.1
shall not extend to any information which:
(i) is or becomes part of the public domain other than by
unauthorized acts of the party obligated not to disclose such
information or its Affiliates or sublicensees, as applicable;
(ii) can be shown by written documents to have been
disclosed to the receiving party or its Affiliates or
sublicensees by a third party, provided such information was not
obtained by such third party directly or indirectly from the
other party under this Agreement pursuant to a confidentiality
agreement;
(iii) prior to disclosure under this Agreement, was
already in the possession of the receiving party or its
Affiliates or sublicensees, provided such information was not
obtained directly or indirectly from the other party under this
Agreement pursuant to a confidentiality agreement;
(iv) can be shown by written documents to have been
independently developed by the receiving party or its Affiliates
without breach of any of the provisions of this Agreement;
(v) is disclosed by the receiving party pursuant to oral
questions, interrogatories, requests for information or
documents, subpoena, or a civil investigative demand of a court
or governmental agency; provided that the receiving party
notifies the other party immediately upon receipt thereof (and
provided that the disclosing party furnishes only that portion of
the information which it is advised by counsel is legally
required and impose such obligations of secrecy as are possible
in that regard); or
(vi) is required to be disclosed by a party under any
statutory, regulatory or similar legislative requirement or any
rule of any stock exchange to which it or any Affiliate is
subject, subject to the obligation of secrecy as are possible in
that regard.
VII.2 Terms of this Agreement. Rugby and HMRI each agree not to
disclose any terms or conditions of this Agreement to any third party without
the prior consent of the other party, except as required by applicable law.
Notwithstanding the foregoing, prior to execution of this Agreement, Rugby and
HMRI shall agree upon the substance of information that can be used as a routine
reference in the usual course of business to describe the terms of this
Agreement from time to time, without the other party's consent; provided,
however, that if either party determines that excessive use of such statement is
made by the other party, then the party determined to be using such statement
excessively shall, upon notice by the other party, cease making such statement.
VII.3 Injunctive Relief. The parties hereto understand and agree that
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Article 7 by either party or their employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf. Accordingly, each party shall be entitled to the granting of injunctive
relief by a court of competent jurisdiction against any action that constitutes
any such breach of this Article 7.
VII.4 Trademarks. HMRI acknowledges that Rugby and its Affiliates are
the exclusive owner of (i) the trademarks, service marks, slogan, trade names,
trade dress and the like (including the associated goodwill of each) held by
Rugby or its Affiliates and (ii) all copyrights held by Rugby or its Affiliates
(collectively, the "Rugby Intellectual Property Rights"). HMRI acknowledges that
it shall have no rights hereunder to any such Rugby Intellectual Property Rights
and agrees that it shall not contest or dispute the validity of or title to any
of such Rugby Intellectual Property Rights. HMRI agrees it shall not take or
cooperate in litigation or threatened litigation which might or is intended to
impair or attack the Rugby Intellectual Property Rights.
ARTICLE VIII
LIMITATION OF LIABILITY, INDEMNIFICATION AND INSURANCE
VIII.1 Indemnification by Rugby. Except as otherwise specifically
provided herein, Rugby shall indemnify and maintain HMRI against all claims,
actions, costs, expenses (including court costs and legal fees on a full
indemnity basis) or other liabilities ("Liabilities") whatsoever in respect of:
(a) any defective design product liability claim with respect to
a Product;
(b) any negligence or willful misconduct of Rugby in relation to
the use, marketing, storage, distribution, handling or sale of Product;
(c) any labeling of any Product to the extent that such labeling
has been supplied by or at the direction of Rugby and applied in accordance with
instructions from Rugby; and
(d) any representation or warranty made by Rugby to its customers
or users with respect to Product, other than representations or warranties
contained in Sections 6.2, 6.3, 6.4 or 6.5.
VIII.2 Indemnification by HMRI. Except as otherwise specifically
provided herein, HMRI shall indemnify and maintain Rugby against all Liabilities
whatsoever in respect of:
(a) HMRI's failure to comply with the Specifications; and
(b) any negligence or willful misconduct by HMRI in the
manufacture, storage, packaging, handling or shipping of Product.
VIII.3 Indemnification Procedures. A party (the "Indemnitee") that
intends to claim indemnification under this Article 8 shall:
(a) notify the other party (the "Indemnitor") of any Liability
with respect to which the Indemnitee intends to claim indemnification as soon as
practicable after the Indemnitee becomes aware of any such Liability;
(b) permit the Indemnitor to assume the defense thereof with
counsel mutually satisfactory to the parties; and
(c) cooperate with the Indemnitor, at the Indemnitor's expense,
in the defense thereof.
With respect to any matter for which the Indemnitor has an obligation
to indemnify the Indemnitee under this Agreement, the Indemnitee shall have the
right to participate and be represented (at the Indemnitor's expense) by legal
counsel of the Indemnitee's choice in all proceedings and negotiations, if
representation by counsel retained by Indemnitor would be inappropriate due to
actual or potential differing interests between the Indemnitee and any other
party represented by such counsel in such proceedings. The indemnity agreement
in this Article 8 shall not apply to amounts paid in settlement of any Liability
if such settlement is effected without the consent of the Indemnitor, which
consent shall not be unreasonably withheld. Failure of the Indemnitee to deliver
notice to the Indemnitor within a reasonable time after becoming aware of a
Liability shall relieve the Indemnitor of any liability to the Indemnitee
pursuant to this Article 8 in the event such delay is prejudicial to the
Indemnitor's ability to defend such action.
VIII.4 Distribution/ Product Liability Insurance. Rugby shall obtain
and maintain in effect for the term of this Agreement, liability insurance or
indemnity policies with an insurer reasonably acceptable to HMRI, in an amount
not less than *with an indemnity to principals clause with respect to products
liability with respect to each Product and distribution of each Product, which
policies shall name HMRI as an additional insured and shall be blanket policies.
Such policies shall insure against liability on the part of Rugby and any of its
Affiliates, as their interests may appear, due to injury, disability or death of
any person or persons, or injury to property, arising from the distribution of
Products. Upon the execution of this Agreement and thereafter on January 1 each
year during the Term, Rugby shall provide to HMRI a certificate of insurance (i)
summarizing the insurance coverage, (ii) identifying any exclusions and (iii)
indicating that the terms of Rugby's insurance policies are in accordance with
this Section 9.4. Rugby shall promptly notify HMRI of any alterations to the
terms of this policy or in the amounts for which insurance is provided.
VIII.5 Manufacturer's Insurance. HMRI shall obtain and maintain in
effect for the term of this Agreement, insurance or indemnity policies with an
insurer reasonably satisfactory to Rugby, in an amount not being less than *with
an indemnity to principals clause with respect to the manufacture, storage or
handling of Product, which policies shall name Rugby as an additional insured
and shall be blanket policies. Such policies shall insure against liability on
the part of HMRI and any of its Affiliates, as their interests may appear, due
to injury, disability or death of any person or persons, or injury to property
arising from the negligence of HMRI in the manufacture of Product. Upon the
execution of this Agreement and thereafter on January 1 each year during the
Term, HMRI shall provide to Rugby a certificate of insurance (i) summarizing the
insurance coverage, (ii) identifying any exclusions and (iii) indicating that
the terms of HMRI's insurance policies are in accordance with this Section 9.5.
HMRI shall promptly notify Rugby of any alterations to the terms of the policy
or in the amounts for which insurance is provided.
VIII.6 Product Liability Claims. As soon as it becomes aware, each
party will give the other prompt written notice of any defect or alleged defect
in a Product, any injury alleged to have occurred as a result of the use or
application of a Product, and any circumstances that may give rise to litigation
or recall of a Product or regulatory action that may affect the sale or
manufacture of a Product, specifying, to the extent the party has such
information, the time, place and circumstances thereof and the names and
addresses of the persons involved. Each party will also furnish promptly to the
other copies of all papers received in respect of any claim, action or suit
arising out of such alleged defect, injury or regulatory action.
ARTICLE IX
DISPUTE RESOLUTION
IX.1 Mediation Committee. The Chief Executive Officers or Presidents
of the parties shall constitute the mediation committee (the "Mediation
Committee"). In the event any dispute or controversy arises under, out of, in
connection with or in relation to this Agreement or any amendments or proposed
amendment thereto or any breach thereof the parties agree that, before any party
initiates arbitration proceedings pursuant to Section 9.6, it shall give the
other party notice and shall demand that the members of the Mediation Committee
attempt to resolve the matter amicably. If the Mediation Committee is unable to
resolve a matter within ten (10) days of submission of the matter to it via
telephone, telefax or other written or oral contact, the Mediation Committee
shall meet in person, not later than twenty (20) days following submission of
the matter to it, at a mutually convenient place to attempt in good faith to
resolve the dispute. If the Mediation Committee is unable to resolve a dispute,
unless a mutually acceptable extension is agreed upon by the Mediation
Committee, either side shall have the right, but not the obligation, to initiate
arbitration proceedings respecting the matter under review, in accordance with
Section 9.6 herein.
IX.2 Non-Arbitrable Issues. The parties acknowledge that matters
relating to product recalls as set forth in Article 5 herein, Disputes as set
forth in Section 2.14 and the matters set forth in Section 7.3 shall not be
submitted to arbitration pursuant to Section 9.3 hereof but instead shall be
resolved in accordance with Section 5.2, 2.14 and 7.3 herein respectively.
IX.3 Scope of Arbitration. The parties agree that all disputes and
controversies except those set forth in Section 9.2 herein arising under this
Agreement shall be resolved by arbitration in accordance with the provisions of
this Article 9; provided, however, that during the period of arbitration on any
dispute the parties shall continue to fulfill their obligations as set forth in
this Agreement.
IX.4 Arbitration Panel. The arbitration shall be held before a panel
of three (3) persons (the "Arbitration Panel").
IX.4.1 Selection. Within fifteen (15) days of the appointment of the
two initial arbitrators, the two arbitrators so appointed shall appoint the
third arbitrator, who shall be an attorney and shall act as chair of the
Arbitration Panel.
IX.4.2 Qualifications. The two arbitrators selected by the parties
hereto shall have experience in the pharmaceutical and/or biotechnology
industry. None of the arbitrators shall have been employed or be retained by or
otherwise related to HMRI or Rugby.
IX.4.3 Failure to Name. If a party fails to name its arbitrator within
thirty (30) days of the receipt of the Notice of Arbitration (as defined
herein), then the arbitrator already named shall immediately select the second
arbitrator. The two arbitrators so appointed shall appoint the third arbitrator,
who shall be an attorney and shall act as chair of the Arbitration Panel.
IX.4.4 Right to Select Replacement. In the event that an arbitrator
refuses or is otherwise unable to serve as such, the party or the other
arbitrator(s) as the case may be, who selected such arbitrator shall have the
right to select his/her replacement. Such replacement shall be selected within
fifteen (15) days of the refusal or inability by such arbitrator to serve.
IX.5 Designation of Rules, Situs, Governing Law.
IX.5.1 Designation of Rules. The parties agree that the arbitrators
shall apply the Federal Rules of Evidence as they are applied in cases tried to
a court sitting without a jury; unless the parties otherwise agree in writing,
the opinions of expert witnesses shall not be admissible. The parties agree that
discovery proceedings shall be limited to: (i) the dispute; (ii) depositions of
those persons having direct knowledge of the dispute; and (iii) submission of
all documents which relate to the dispute.
IX.5.2 Situs. The arbitration hearing shall be held in New York, New
York unless otherwise mutually agreed to in writing.
IX.6 Procedure.
IX.6.1 Conciliation Period. No party shall send a Notice of
Arbitration in connection with a dispute under this Article 9 unless at least
thirty (30) days prior to the date of such Notice of Arbitration, such party
shall have furnished to the other parties written notice of its intent to send a
Notice of Arbitration in connection with a dispute. During such thirty (30) day
period the Mediation Committee shall attempt in good faith to settle the dispute
in accordance with the provisions of Section 9.1 herein.
IX.6.2 Notice of Arbitration. The party seeking to institute
arbitration (hereinafter, a "Claimant") shall do so by sending the other parties
(hereinafter, each a "Respondent") a written notice of arbitration (the "Notice
of Arbitration"). The Notice of Arbitration shall set forth in detail the nature
of the dispute. The Notice of Arbitration shall also designate the arbitrator
appointed by the Claimant and set forth a full Curriculum Vitae or resume
showing that the arbitrator meets the qualifications set forth in Section 9.4.2.
IX.6.3 Response. Within thirty (30) days after receipt of the Notice
of Arbitration, the Respondent shall send the Claimant a written Response
including any counterclaims (the "Response"). The Response shall also designate
the arbitrator appointed by the Respondent and set forth a full Curriculum Vitae
or resume showing that the arbitrator meets the qualifications set forth in
Section 9.4.2. If the Response sets forth a counterclaim, the Claimant may,
within fifteen (15) days of the receipt of the Response, deliver to the
Respondent and the arbitrators a Rejoinder (the "Rejoinder") answering such
counterclaim.
IX.6.4 Discovery. Within sixty (60) days of the date of the Response,
each party shall submit to the other parties and to the arbitrators one (1) copy
of all documents in the possession, custody or control of the party or its
Affiliates, which are relevant to the dispute or controversy set forth in the
Notice of Arbitration, Response or Rejoinder. Within forty-five (45) days of the
date of the Response, each party shall submit to the other parties a list of all
witnesses intended to be called at the hearing. Each party shall use its
commercially reasonable good faith efforts to make available for deposition
within thirty (30) days after the delivery of the list of witnesses at each
party's respective location of its operations, all of its agents, employees, and
Affiliates who have direct knowledge of the dispute at such times and places
that shall not unreasonably disrupt the business of the other parties. The chair
of the Arbitration Panel shall determine all discovery disputes and may enforce
a decision by imposing appropriate sanctions on the non-complying party.
IX.6.5 Record. A stenographic record of all proceedings shall be made
and oaths administered by a duly licensed and qualified court reporter. The
court reporter shall prepare five (5) copies of the stenographic record of such
proceeding and shall send one (1) copy to each of the arbitrators and to each of
the parties within seven (7) days of the relevant proceeding under this Section.
IX.6.6 Attendance at Hearing. Each party may be represented by an
attorney at all hearings before the Arbitration Panel. The Arbitration Panel
shall have the power to require the exclusion of any witness, other than a party
or other essential person, during the testimony of any other witness. Unless the
law provides to the contrary, the arbitration may proceed in the absence of any
party or representative who, after due notice, fails to be present or fails to
obtain a postponement. An award shall not be made solely on the default of a
party; the Arbitration Panel shall require the party who is present to submit
such evidence as it may require for the making of an award.
IX.6.7 Postponement of Hearing. The Arbitration Panel, for good cause
shown, may postpone any hearing under any of the following conditions: (i) upon
the request of a party, (ii) upon its own initiative, and (iii) upon mutual
agreement by the parties.
IX.6.8 Post-Hearing Filings. Any post-hearing briefs shall be made by
the parties to the Arbitration Panel and the other party within fourteen (14)
business days following the hearing. Each party shall be afforded an opportunity
to examine any post-hearing filings and to provide a response to the Arbitration
Panel within seven (7) business days of the receipt of a post-hearing filing.
IX.6.9 Award Opinion. The Arbitration Panel shall issue an opinion
with respect to any dispute. The arbitrators shall issue a final decision within
one (1) month from the final hearing on any dispute. The concurrence of two (2)
arbitrators shall be sufficient for the entry of a final decision. Such opinion
shall be written in the form of "Findings of Fact" and "Conclusions of Law," and
shall include the reasons for a decision. A final decision shall be binding on
both parties.
IX.6.10 Rehearing. The parties agree that a rehearing shall only be
allowed in the event that the chair of the Arbitration Panel is unable or
unwilling to continue performance of the duties of an arbitrator.
IX.6.11 Confidentiality. All arbitration proceedings hereunder shall
be conducted on a confidential basis and shall be subject to the provisions of
Article 7 (Nondisclosure and Confidentiality) herein. The parties and the
arbitrators shall not disclose or otherwise make public any information revealed
during the proceedings or any final decision which may result from the
proceedings.
IX.6.12 Waiver. Any arbitration proceeding hereunder must be
instituted within two (2) years after the controversy or claim is discovered or
reasonably should have been discovered. Failure to send a Notice of Arbitration
within such two-year period shall constitute an absolute bar to the institution
of any proceedings respecting such controversy or claim, and a waiver thereof.
IX.7 Authority of Arbitrators.
IX.7.1 Awards. Except as otherwise specifically provided herein, the
arbitrators shall have the power to award money damages and equitable relief
such as rescission, specific performance and injunctive relief.
IX.7.2 Modification of Article 10. The Arbitration Panel shall not
have the power to amend, change or alter any provision of this Article 9 without
the express written consent of each party hereto.
IX.8 Awards.
IX.8.1 Judgment. Judgment upon the award rendered by the arbitrators
shall be enforceable in any court of competent jurisdiction. Each party agrees
to submit to the personal jurisdiction of that court for purposes of the
enforcement of any such award.
IX.8.2 Fees and Expenses. All fees of the arbitrators and the court
stenographer shall be paid by the party who does not prevail in the arbitration
as determined by the arbitrators. In the event a settlement occurs before the
issuance of a final decision, the parties shall unless otherwise agreed, each
pay an equal portion of any fees of the arbitrators and the court stenographer
and the cost of any transcripts. All other arbitration-related expenses shall be
borne by the party incurring such expenses.
ARTICLE X
GENERAL PROVISIONS
X.1 Notices.
(a) Except as otherwise specifically provided herein, any notice
or other documents to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if sent by registered post, nationally
recognized overnight courier or facsimile transmission to a party or delivered
in person to a party at the address or facsimile number set out below for such
party or such other address as the party may from time to time designate by
written notice to the other:
If to Rugby or ▇▇▇▇▇▇: ▇▇▇▇▇▇ Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇
Fax: 909/▇▇▇-▇▇▇▇
Copy to: ▇'▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: 312/▇▇▇-▇▇▇▇
If to HMRI: Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇
Attn: General Counsel
Fax: 816/▇▇▇-▇▇▇▇
Copy to: Hoechst ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President of Site Operations
- Cincinnati
Fax: 513/▇▇▇-▇▇▇▇
Copy to: Shook, Hardy & Bacon L.L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: 816/▇▇▇-▇▇▇▇
(b) Any such notice or other document shall be deemed to have
been received by the addressee three business days following the date of
dispatch of the notice or other document by post or, where the notice or other
document is sent by overnight courier, by hand or is given by facsimile,
simultaneously with the transmission or delivery. To prove the giving of a
notice or other document it shall be sufficient to show that it was dispatched.
X.2 Entire Agreement; Amendment.
(a) This Agreement, together with the Exhibits attached hereto,
embodies and sets forth the entire agreement and understanding of the parties
with respect to the subject matter herein and there are no promises, terms,
conditions or obligations, oral or written, expressed or implied, other than
those contained in this Agreement. The terms of this Agreement shall supersede
all previous oral or written agreements which may exist or have existed between
the parties relating to the subject matter of this Agreement. Neither party
shall be entitled to rely on any agreement, understanding or arrangement which
is not expressly set forth in this Agreement. Any other terms and conditions
(including without limitation any terms and conditions contained in any purchase
order or sales invoice issued pursuant to this Agreement) are hereby expressly
excluded.
(b) This Agreement shall not be amended, modified, varied or
supplemented except in writing signed by duly authorized representatives of the
parties.
X.3 Force Majeure. If either party is prevented or delayed in the
performance of any of its obligations under this Agreement by Force Majeure (as
defined herein) and shall give written notice thereof to the other party
specifying the matters constituting Force Majeure together with such evidence as
such party reasonably can give and specifying the period for which it is
estimated that such prevention or delay will continue, the party shall be
excused from the performance or the punctual performance of such obligations as
the case may be from the date of such notice for so long as such cause of
prevention or delay shall continue. The expression "Force Majeure" shall be
deemed to include any cause substantially affecting the performance by either
party of this Agreement arising from or attributable to acts, events,
non-happenings, omissions or accidents beyond the reasonable control of the
party whose performance is so affected.
X.4 Assignment. Neither party shall be entitled to assign its rights
and obligations hereunder without the prior written consent of the other;
provided, however, either party shall be entitled, without the prior written
consent of the other, to assign its rights and obligations hereunder to an
Affiliate, but such assignment to an Affiliate shall not relieve the assigning
party of its obligations hereunder. No permitted assignment hereunder shall be
deemed effective until the assignee shall have executed and delivered an
instrument in writing reasonably satisfactory in form and substance to the other
party pursuant to which the assignee assumes all of the obligations of the
assigning party hereunder. Any purported assignment of this Agreement in
violation of this Section 10.4 shall be void. This Agreement shall be binding
upon the successors and permitted assigns of the parties and the name of a party
appearing herein shall be deemed to include the names of its successors and
assigns.
X.5 Headings, Interpretation. The headings used in this Agreement are
for convenience only and are not a part of this Agreement nor affect the
interpretation of any of its provisions.
X.6 Attachments. All Exhibits referenced herein are hereby made a part
of this Agreement.
X.7 Independent Parties. This Agreement shall not be deemed to create
any partnership, joint venture, or agency relationship between the parties. Each
party shall act hereunder as an independent contractor.
X.8 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of New York, excluding its conflict of laws
principles.
X.9 No Waiver. Neither the failure nor delay on the part of either
party to require the strict performance of any term, covenant or condition of
this Agreement or to exercise any right or remedy available on a breach thereof
shall constitute a waiver of any such breach or of any such term or condition.
The consent to, or the waiver of, any breach, or the failure to require on any
single occasion the performance or timely performance of any term, covenant, or
condition of this Agreement shall not be construed as authorizing any subsequent
or additional breach and shall not prevent a subsequent enforcement of such
term, covenant, or condition.
X.10 Severability. In the event that any provision of this Agreement
or the application thereof to any party or circumstance shall be finally
determined by a court of proper jurisdiction to be invalid or unenforceable to
any extent, then (i) a suitable and equitable provision shall be substituted
therefore in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid and unenforceable provision and (ii) the
remainder of this Agreement and the application of such provision to the parties
or circumstances other than those to which it is held invalid or unenforceable
shall not be affected thereby.
X.11 Interpretation. The parties hereto acknowledge and agree that (i)
each party and its representatives has reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its revision, (ii) the rule
of construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement and
(iii) the terms and provisions of this Agreement shall be construed fairly as to
each party hereto and not in favor of or against either party regardless of
which party was generally responsible for the preparation of this Agreement.
X.12 Counterparts. This Agreement may be executed simultaneously in
two counterparts, each of which shall be deemed an original, but both of which
together shall constitute a single agreement.
X.13 Third Party Beneficiaries. This Agreement is not intended to
confer upon any non-party rights or remedies hereunder.
X.14 Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and use all commercially reasonable
efforts to take or cause to be taken, all actions and to do, or cause to be
done, all things necessary under applicable law to consummate the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to
be duly executed as of the date first above written.
HOECHST ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
By:_______________________________
Name:
Title:
THE RUGBY GROUP, INC.
By:________________________________
Name:
Title: