CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
EXHIBIT 10.47
SUPPLY AND DISTRIBUTION AGREEMENT
by and between
GENPHARM INC.,
▇▇▇▇▇▇ HEALTH PRODUCTS, LLC
and
PAR PHARMACEUTICAL, INC.
LORATADINE
DECEMBER 20, 2002
Exhibit 10.47 - Page 1
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
TABLE OF CONTENTS
1. DEFINITIONS..........................................................4
2. CERTAIN PAYMENTS.....................................................7
2.1 FIRST INSTALLMENT...........................................8
2.2 SECOND INSTALLMENT..........................................8
3. APPOINTMENT; PRODUCT SUPPLY AND DISTRIBUTION.........................8
3.1 APPOINTMENT AS EXCLUSIVE DISTRIBUTOR........................8
3.2 OBLIGATION TO REGISTER AND SUPPLY...........................8
3.3 OBLIGATION TO PURCHASE AND MARKET...........................8
3.4 FORECASTS AND FIRM ORDERS...................................9
3.5 INSUFFICIENCY OF SUPPLY.....................................9
4. PURCHASING; DELIVERY.................................................9
4.1 PURCHASE ORDERS.............................................9
4.2 DELIVERY...................................................10
4.3 ACCEPTANCE AND REJECTION...................................11
4.4 PACKAGING..................................................11
5. PRICE AND PAYMENT TERMS.............................................12
5.1 TRANSFER PRICE.............................................12
5.2 INVOICING AND PAYMENT......................................12
6. CERTAIN UNDERTAKINGS................................................12
6.1 PRODUCT COMPLAINTS AND ADVERSE DRUG EXPERIENCES............12
6.2 FACILITY MAINTENANCE; INSPECTION; REPORTS..................12
6.3 FILING REQUIREMENTS AND MAINTENANCE........................13
6.4 INSURANCE..................................................13
6.5 CERTAIN LITIGATION.........................................13
6.6 ALLOCATION OF NET PROFIT...................................13
6.7 PROVISION OF CERTAIN INFORMATION...........................14
7 WARRANTIES AND INDEMNIFICATION......................................14
7.1 CERTAIN REPRESENTATIONS AND WARRANTIES OF GENPHARM.........14
7.2 CERTAIN REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇...........14
7.3 CERTAIN REPRESENTATIONS AND WARRANTIES OF PAR..............15
7.4 PRODUCT RECALL.............................................15
7.5 OBLIGATIONS OF PAR.........................................16
Exhibit 10.47-Page 2
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7.6 INDEMNIFICATION BY ▇▇▇▇▇▇..................................16
7.7 INDEMNIFICATION BY GENPHARM................................16
7.8 INDEMNIFICATION PROCEDURES.................................17
8. AUDIT...............................................................17
8.1 AUDIT OF GENPHARM'S BOOKS..................................17
8.2 AUDIT OF ▇▇▇▇▇▇'▇ BOOKS....................................18
8.3 AUDIT LIMITATIONS..........................................18
9. TERM AND TERMINATION................................................18
9.1 TERM.......................................................18
9.2 TERMINATION................................................19
9.3 POST-TERMINATION...........................................20
10. CONFIDENTIALITY.....................................................20
10.1 TREATMENT OF CONFIDENTIAL INFORMATION......................20
10.2 LIMITS ON DISCLOSURE.......................................20
11. FORCE MAJEURE.......................................................21
11.1 EFFECTS OF FORCE MAJEURE..................................21
11.2 NOTICE OF FORCE MAJEURE...................................21
11.3 ALLOCATION OF CAPACITY....................................21
12. MISCELLANEOUS......................................................22
12.1 DISPUTE RESOLUTION........................................22
12.2 INDEPENDENT CONTRACTORS...................................22
12.3 ASSIGNMENT................................................22
12.4 GOVERNING LAW.............................................22
12.5 CURRENCY UNITS............................................22
12.6 NO IMPLIED WAIVER.........................................23
12.7 NOTICE....................................................23
12.8 AMENDMENTS................................................24
12.9 COUNTERPARTS..............................................24
12.10 ENTIRE AGREEMENT..........................................24
12.11 BENEFIT; BINDING EFFECT...................................24
12.12 SURVIVAL..................................................24
12.13 FURTHER ASSURANCES........................................24
12.14 SEVERABILITY..............................................25
12.15 PAR AS THIRD-PARTY BENEFICIARY............................25
Exhibit 10.47 - Page 3
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ASTERISKS DENOTE SUCH OMISSION
SUPPLY AND DISTRIBUTION AGREEMENT
THIS SUPPLY AND DISTRIBUTION AGREEMENT (this "Agreement"),
dated as of December 20, 2002, is by and between Genpharm Inc., an Ontario,
Canada corporation having offices at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ("Genpharm"), ▇▇▇▇▇▇ Health Products, LLC, a Delaware limited
liability company having offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("▇▇▇▇▇▇"), and Par Pharmaceutical, Inc., a New Jersey corporation having
offices at ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ("Par").
WHEREAS, Genpharm, among other things, manufactures certain
generic pharmaceutical products, and Par and ▇▇▇▇▇▇ each, among other things,
market and sell certain generic pharmaceutical products;
WHEREAS, Genpharm has received tentative approval from the FDA
(as defined herein) for the manufacture and by prescription sale of Loratadine
(intended to be the bioequivalent to Claritin(R)) (the "Product") in 10 mg
tablets and, by a prior written agreement, dated March 25, 2002 (the
"Manufacturing Agreement"), Genpharm has appointed Par as the exclusive
distributor in the Territory (as defined herein) of all Product manufactured by
Genpharm;
WHEREAS, based on the anticipated status of the Product as an
over-the-counter product, Genpharm and Par desire that certain marketing and
over-the-counter distribution rights in respect of the Product be sub-contracted
to certain third-party distributors; and
WHEREAS, Par and Genpharm desire to permit certain rights in
respect of the marketing and over-the-counter distribution of the Product to be
sub-contracted to ▇▇▇▇▇▇, and ▇▇▇▇▇▇ wishes to market and engage in the
over-the-counter distribution of the Product, in the Territory; all subject to
the terms and conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS. For purposes hereof, the following terms shall
have the meanings set forth below:
"Act" means the Federal Food, Drug, and Cosmetic Act, as
amended from time to time, and the rules and regulations promulgated thereunder.
"Affiliate" means, with respect to any Person, any other
Person controlled by, controlling or under common control with such Person,
where control means more than 50% ownership or voting rights of a Person or
other power to direct the management or policy of a Person.
"ANDA" means the abbreviated new drug application filed by the
Manufacturer for the Product and approved by the FDA, as the same may be
supplemented and/or amended from time to time.
"API" means the active pharmaceutical ingredient, Loratadine
HCl.
Exhibit 10.47 - Page 4
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ASTERISKS DENOTE SUCH OMISSION
"Arbitrator(s)" has the meaning set forth in Section 12.1
hereof.
"cGMP" means the current Good Manufacturing Practices
regulations of the FDA (as in effect from time to time) in 21 C.F.R. pts. 210
and 211.
"Confidential Information" means any information that in any
way shall relate to a party, including, without limitation, its products,
business, know-how, patents, methods, trade secrets and technology, or to any
Affiliate thereof, that shall be furnished to any other party(ies) in connection
with this Agreement. Confidential Information shall include the existence and
terms of this Agreement. Confidential Information shall not include any
information:
(i) that, at the time of disclosure, is generally available to
the public;
(ii) that, after the time of disclosure, becomes generally
available to the public, except as a result of a breach of this Agreement by the
recipient of such information;
(iii) that, prior to the time of disclosure, becomes available
to the recipient of such information from a third party which is not legally or
contractually prohibited from disclosing such Confidential Information;
PROVIDED, that such Confidential Information was not acquired, directly or
indirectly, from the disclosing party or its Affiliates;
(iv) the recipient of which can demonstrate was developed by
or for such recipient independently of, and without the use of, the Confidential
Information disclosed by the disclosing party or its Affiliates hereunder; or
(v) that is required to be disclosed by legal or judicial
process; PROVIDED, in each case, the party so disclosing information timely
informs the other party, uses its commercially best efforts to limit the
disclosure required by such legal or judicial process and maintains
confidentiality, and permits the other party to attempt, by appropriate legal
means, to limit such disclosure.
"Effective Date" means the date of execution of this
Agreement.
"FDA" means the United States Food and Drug Administration or
any successor governmental agency.
"First Commercial Sale" means the first sale of the Product
under this Agreement in an arms' length transaction to a third party. Par and
Genpharm shall mutually determine whether and when to commence with the First
Commercial Sale and shall notify ▇▇▇▇▇▇ in writing thereof.
"Force Majeure Event" has the meaning set forth in Section
11.1 hereof.
"Initial Term" has the meaning set forth in Section 9.1
hereof.
"Ineligible Person" means any Person who is prohibited by any
law, rule or regulation or by any order, directive or policy from selling the
Product (assuming that the Product Approval has been obtained) or any other
pharmaceutical product within the Territory or who is listed by any United
States federal agency as debarred, suspended, proposed for debarment or
otherwise ineligible for federal programs in the United States or other
jurisdictions within the Territory.
Exhibit 10.47 - Page 5
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"▇▇▇▇▇▇ Facility" means the facility and warehouse used by
▇▇▇▇▇▇ to process, package, label and/or store the Product.
"Losses" has the meaning set forth in Section 7.6 hereof.
"Manufacturer" means Genpharm or its Affiliate in whose name
the Product Approval is registered.
"Manufacturing Agreement" has the meaning set forth in the
second recital hereof.
"Manufacturing Cost" means the actual, direct costs to
manufacture (including quality control and testing) and package the Product
including, without limitation, the landed cost of raw materials and packaging
materials, component costs, labor (salary and allocable benefits), material
adjustments for off-grade or defective material, handling losses, physical
adjustments, salvage and reasonable overhead charges relating to the manufacture
of the Product, calculated in accordance with U.S. generally accepted accounting
principles, consistently applied. The Manufacturing Cost shall specifically
exclude all costs incurred in research, development, design, marketing,
promotion and administration and in obtaining the Product Approval. If, in the
sole discretion of the Manufacturer, all or any portion of the manufacturing or
packaging of the Product is subcontracted to a third party (or to any
Affiliate), the Manufacturing Cost shall include the actual amount paid, without
▇▇▇▇-up, to such third party (or Affiliate). Genpharm hereby preliminarily
establishes the Manufacturing Cost at $**.** per 1,000 extended units in bulk.
Within the first thirty (30) calendar days of manufacturing the Product,
Genpharm may adjust such Manufacturing Cost upwards by up to *** (**%) percent
and shall adjust such Manufacturing Cost downwards, as appropriate, to reflect
its actual Manufacturing Cost, and shall deliver a Manufacturing Cost Statement
to ▇▇▇▇▇▇ and Par promptly, and in any event within sixty (60) calendar days of
commencing its manufacturing of the Product. Genpharm shall establish the
Manufacturing Cost on the first day of each calendar year thereafter and shall
deliver to ▇▇▇▇▇▇ and Par a Manufacturing Cost Statement within sixty (60)
calendar days of such date.
"Manufacturing Cost Statement" means a statement showing the
calculation of the Manufacturing Cost applicable to the period for which it is
delivered, which statement shall be accompanied by a certificate signed by the
President or Chief Financial Officer of Genpharm certifying that, to the best of
his or her knowledge, after reasonable investigation, such statement is true and
correct in all material respects.
"Net Profit" means Net Sales less (i) the actual, direct cost
to ▇▇▇▇▇▇ to package and label such Product into appropriate configurations and
SKUs, calculated in accordance with U.S. generally accepted accounting
principles, consistently applied, (ii) *** (**%) percent of the amount
calculated pursuant to clause (i) hereof, as a distribution fee, and (iii) the
Transfer Price paid to Genpharm with respect to such Product.
"Net Sales" means the gross invoiced sales price billed for
the Product sold by ▇▇▇▇▇▇ and its Affiliates in the Territory less (i) returns,
price protections, cash discounts and allowances offered to, and actually taken
by, third parties in the ordinary course of business, (ii) applicable direct
Exhibit 10.47 - Page 6
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ASTERISKS DENOTE SUCH OMISSION
insurance costs and (iii) applicable non-income taxes incurred by ▇▇▇▇▇▇, if
any; all determined in accordance with U.S. generally accepted accounting
principles, consistently applied. It is understood and agreed that (a) the
Product shall not be bundled and sold with other products and (b) for purposes
hereof, Product sold to affiliated parties shall be deemed to be sold at the
gross invoiced sales price billed for Product sold to unaffiliated third parties
in arms' length transactions.
"Paragraph IV Litigation" means any litigation commenced in
respect of the Product in accordance with and within the time specified by
Section 505(j)(5)(B)(iii) of the Act following the Manufacturer's submission to
the FDA of a certification in accordance with Section 505(j)(2)(A)(vii)(IV) of
the Act solely with regard to claims of infringement, invalidity and
unenforceability of any patent(s) in respect of the Product.
"Person" means an individual, corporation, partnership or
other entity.
"Plant" means the facility and warehouse used by the
Manufacturer to manufacture and/or store the Product.
"Product" has the meaning set forth in the second recital
hereof.
"Product Approval" means the final and unconditional approval
of an ANDA by the FDA enabling the Manufacturer to manufacture and sell the
Product over-the-counter in the Territory.
"Reasonable and Consistent Requirements" shall mean ▇▇▇▇▇▇'▇
reasonable and consistent requirements for the Product, based primarily upon the
volume and timing of its prior orders.
"Renewal Term" has the meaning set forth in Section 9.1
hereof.
"SKUs" means stock keeping units.
"Specifications" means the terms and conditions applicable to
the Product and described in the ANDA for the Product, as the same may be
supplemented or amended from time to time.
"Territory" means the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, plus the District of Columbia, the Commonwealth of Puerto Rico, the
U.S. Virgin Islands, Guam, Samoa and any other territory which, on the Effective
Date, is a United States government protectorate wherein an ANDA approved by the
FDA is required to sell the Product in such territory.
"Transfer Price" means the sum of (a) the Manufacturing Cost
of the Product supplied by the Manufacturer to ▇▇▇▇▇▇ pursuant hereto plus (b)
applicable freight, taxes, duties, insurance and related charges incurred by the
Manufacturer under Section 4.2(a) hereof to deliver the Product F.O.B. the
▇▇▇▇▇▇ Facility.
Exhibit 10.47 - Page 7
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ASTERISKS DENOTE SUCH OMISSION
2. CERTAIN PAYMENTS.
2.1 FIRST INSTALLMENT. On January 6, 2003, ▇▇▇▇▇▇ shall pay,
by wire transfer of immediately available funds, the sum of $***,*** to a bank
account of Genpharm previously designated to ▇▇▇▇▇▇ in writing by Genpharm. In
the event that this Agreement is terminated pursuant to Section 9.2(a) hereof
only, Genpharm shall promptly repay to ▇▇▇▇▇▇ all monies paid by ▇▇▇▇▇▇ to
Genpharm under this Section 2.1, without interest.
2.2 SECOND INSTALLMENT. On July 1, 2003, ▇▇▇▇▇▇ shall pay, by
wire transfer of immediately available funds, the sum of $***,*** to a bank
account of Genpharm previously designated to ▇▇▇▇▇▇ in writing by Genpharm. In
the event that this Agreement is terminated pursuant to Section 9.2(a) hereof
only, Genpharm shall promptly repay to ▇▇▇▇▇▇ all monies paid by ▇▇▇▇▇▇ to
Genpharm under this Section 2.2, without interest.
3. APPOINTMENT; PRODUCT SUPPLY AND DISTRIBUTION.
3.1 APPOINTMENT AS EXCLUSIVE DISTRIBUTOR. (a) Subject to
receipt by the Manufacturer of the Product Approval and the written consent of
Par and Genpharm to commence with the First Commercial Sale, which consent shall
not be unreasonably withheld, Par hereby appoints ▇▇▇▇▇▇ as its exclusive
sub-distributor of the Product solely for over-the-counter sales in the
Territory, and ▇▇▇▇▇▇ hereby accepts such appointment and agrees to act as such
exclusive sub-distributor, all upon the terms and conditions set forth herein.
(b) To the extent required by the terms of the Manufacturing
Agreement in order for the parties to fulfill their obligations hereunder,
Genpharm hereby irrevocably and unconditionally consents to Par's appointment of
▇▇▇▇▇▇ as an exclusive sub-distributor of the Product in the Territory. The
foregoing notwithstanding, nothing herein shall be construed to alter or
diminish Genpharm's appointment of Par as the sole and exclusive distributor of
the Product in the Territory pursuant to the Manufacturing Agreement.
3.2 OBLIGATION TO REGISTER AND SUPPLY. (a) Genpharm shall use
its reasonable best efforts to cause the Manufacturer to obtain the Product
Approval; PROVIDED, that nothing herein contained shall constitute a guarantee
or representation by Genpharm or Par that the Product Approval will be obtained.
(b) Subject to receipt by the Manufacturer of the Product
Approval and the written consent of Par and Genpharm to commence with the First
Commercial Sale, which consent shall not be unreasonably withheld, Genpharm
shall use commercially reasonable efforts to cause the Manufacturer to
manufacture and supply to ▇▇▇▇▇▇ reasonable quantities of the Product in bulk
form and in a timely fashion, upon the terms and conditions set forth herein.
3.3 OBLIGATION TO PURCHASE AND MARKET. (a) Subject to receipt
by the Manufacturer of the Product Approval and the written consent of Par and
Genpharm to commence with the First Commercial Sale, which consent shall not be
unreasonably withheld, ▇▇▇▇▇▇, subject to Section 3.3(b) hereof, (i) shall use
its commercially best efforts to market and sell the Product over-the-counter in
the Territory and (ii) shall purchase all of its requirements for the Product in
the Territory from Genpharm pursuant to this Agreement, all upon the terms and
conditions set forth herein.
Exhibit 10.47 - Page 8
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(b) Neither ▇▇▇▇▇▇ nor any of its Affiliates shall, directly
or indirectly, market or sell the Product (i) to any of the Persons listed on
SCHEDULE 3.3 hereto, (ii) bearing prescription labeling to any Person, (iii)
outside of the Territory or (iv) to any Person in the Territory where it knows
or has reason to believe that such Product will be resold by such Person
(directly or indirectly) outside of the Territory. Genpharm and ▇▇▇▇▇▇
understand and agree that Par shall retain the exclusive right to market and
sell the Product (A) to the customers listed on SCHEDULE 3.3 hereto and (B)
bearing prescription labeling to any Person.
3.4 FORECASTS AND FIRM ORDERS. ▇▇▇▇▇▇ shall provide to
Genpharm and Par, quarterly (at least sixty (60) calendar days in advance of the
commencement of the first calendar month forecasted thereunder), a twelve
(12)-month rolling forecast of ▇▇▇▇▇▇'▇ estimated requirements of the Product,
which forecast shall represent a commitment of ▇▇▇▇▇▇ to purchase the quantity
of Product projected for the first three months thereunder and a commitment to
purchase from Genpharm (or Genpharm's designee) any raw materials not used or
resold by the Manufacturer but ordered by the Manufacturer in reasonable
reliance on the quantity of Product forecasted by ▇▇▇▇▇▇ for the fourth, fifth
and sixth months forecasted thereunder. Such raw material purchased by ▇▇▇▇▇▇
shall be delivered to ▇▇▇▇▇▇ promptly after ▇▇▇▇▇▇'▇ payment therefor, and
▇▇▇▇▇▇ shall pay Genpharm promptly upon receipt of Genpharm's invoice for
applicable freight, insurance and taxes, imposts or duties levied upon the sale
of the raw materials by Genpharm to ▇▇▇▇▇▇. Subject to the foregoing, all
forecasts are estimates only, and ▇▇▇▇▇▇ shall be bound only to purchase the
Product pursuant to purchase orders submitted, or deemed hereunder to be
submitted, by it to Genpharm (and Par). ▇▇▇▇▇▇ shall deliver the first such
forecast as soon as possible and in any event within thirty (30) calendar days
after the Effective Date, and ▇▇▇▇▇▇ shall, subject to the first sentence
hereof, deliver the updated and extended forecasts every three (3) months
thereafter.
3.5 INSUFFICIENCY OF SUPPLY. In the event that Genpharm shall
fail to supply ▇▇▇▇▇▇'▇ Reasonable and Consistent Requirements hereunder for a
period exceeding one hundred twenty (120) consecutive days and ▇▇▇▇▇▇ is not in
breach of this Agreement, ▇▇▇▇▇▇ may, in its discretion, elect to cause the
Product to be manufactured for ▇▇▇▇▇▇ by a third party of ▇▇▇▇▇▇'▇ choosing (a
"Third Party Source"). At the end of such 120-day period, ▇▇▇▇▇▇ shall give
Genpharm not less than sixty (60) days notice of ▇▇▇▇▇▇'▇ intent to cause such
Product to be manufactured by a Third Party Source for ▇▇▇▇▇▇. If Genpharm is
able to demonstrate to ▇▇▇▇▇▇, in ▇▇▇▇▇▇'▇ reasonable good faith discretion,
that it can meet ▇▇▇▇▇▇'▇ Reasonable and Consistent Requirements within such
sixty (60) day period, then ▇▇▇▇▇▇ shall continue to procure all of its
requirements of the Product from Genpharm. If Genpharm is unable to demonstrate
to ▇▇▇▇▇▇, in ▇▇▇▇▇▇'▇ reasonable good faith discretion, that it can meet
▇▇▇▇▇▇'▇ Reaonable and Consistent Requirements within such sixty (60) day
period, and ▇▇▇▇▇▇ is not in breach of this Agreement, then ▇▇▇▇▇▇ shall have
the right to secure additional supply of the Product from a Third Party Source
to the extent that Genpharm is unable to meet ▇▇▇▇▇▇'▇ Reasonable and Consistent
Requirements, only until such time as Genpharm is able to demonstrate to ▇▇▇▇▇▇,
in ▇▇▇▇▇▇'▇ reasonable good faith discretion, that it can meet ▇▇▇▇▇▇'▇
Reasonable and Consistent Requirements hereunder.
4. PURCHASING; DELIVERY.
4.1 PURCHASE ORDERS. (a) ▇▇▇▇▇▇ shall place orders for the
Product with Genpharm using ▇▇▇▇▇▇'▇ standard form of purchase order, a copy of
which is attached hereto as EXHIBIT A. Each purchase order submitted to Genpharm
by ▇▇▇▇▇▇ shall contemplate the purchase of Product in minimum batch size as
Exhibit 10.47 - Page 9
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ASTERISKS DENOTE SUCH OMISSION
contemplated in the Product Approval or multiples thereof (unless Genpharm shall
agree in writing to smaller quantities) and shall specify the requested delivery
date therefor, which date shall not be less than one hundred twelve (112)
calendar days from the date of Genpharm's receipt of such order. Each order
placed pursuant to this Section 4.1 shall constitute a firm obligation to
purchase the ordered quantities of the Product. The terms and conditions of this
Agreement shall be controlling over any conflicting terms and conditions used by
▇▇▇▇▇▇ in ordering the Product or by Genpharm in accepting or confirming orders
and any term or condition of such purchase order, acceptance or other document
which shall conflict with or be in addition to the terms and conditions of this
Agreement is hereby expressly rejected (unless all the parties shall have
mutually agreed to the contrary in writing in respect of a particular instance).
(b) ▇▇▇▇▇▇ acknowledges and agrees that the Manufacturer shall
base its production planning for Product manufactured pursuant to this Agreement
on the forecasts provided by ▇▇▇▇▇▇ pursuant to Section 3.4 hereof. ▇▇▇▇▇▇
hereby agrees that the Manufacturer shall have the right at any time, for
purposes of Section 3.4 and otherwise, to order materials and supplies to
manufacture one hundred twenty (120%) percent of those quantities of the Product
forecasted to be ordered by ▇▇▇▇▇▇ under Section 3.4 for the then current and
the next calendar quarter. In addition, to the extent any materials necessary
for the manufacture of the Product require a longer lead time, the Manufacturer
shall be entitled to order reasonable quantities of such materials for purposes
of Section 3.4 and otherwise.
4.2 DELIVERY. (a) All Products shall be delivered in bulk
containers, F.O.B. the ▇▇▇▇▇▇ Facility, and risk of loss and title to the
Product shall pass to ▇▇▇▇▇▇ upon delivery of the Product to the ▇▇▇▇▇▇
Facility. Genpharm shall arrange for shipping and/or transportation of the
Product from the Plant and pay all shipping and related costs, including
insurance, and all applicable sales tax, use tax, consumption tax, goods and
services tax, value added tax or similar tax, imposts or duties levied upon the
sale of the Product by Genpharm to ▇▇▇▇▇▇, whether that tax, impost or duty is
levied under the laws of the jurisdiction where the Plant is located and/or the
jurisdiction where any of Genpharm, ▇▇▇▇▇▇ and/or Par is located (or of any
state, province, territory or other political subdivision thereof) and whether
it is currently in force or comes into force after the Effective Date. Each
party shall supply to the other all documentation necessary to export such
Product from the jurisdiction where the Plant is located and all documentation
necessary to import such Product into the Territory, to the extent that same is
available to such party or is reasonably capable of being generated by it.
Genpharm shall ensure that the Product is transported and ▇▇▇▇▇▇ shall ensure
that the Product is received, handled, stored and delivered, in accordance with
the Specifications and applicable cGMP and other FDA requirements (and the
requirements of all other applicable governmental or regulatory bodies, agencies
or authorities in the Territory).
(b) Genpharm shall use commercially reasonable efforts to
ensure that the Product ordered by ▇▇▇▇▇▇ in accordance with this Agreement is
shipped in accordance with the delivery dates specified in ▇▇▇▇▇▇'▇ purchase
orders, as accepted by Genpharm, and Genpharm shall notify ▇▇▇▇▇▇ promptly of
any significant anticipated delay. Neither Genpharm nor Par shall be liable for
▇▇▇▇▇▇'▇ loss of profits in the event of late or non-delivery.
(c) Genpharm shall cause the Manufacturer to include in each
shipment of the Product hereunder a certificate of analysis that shall certify
that the Product contained in such shipment complies with the provisions of
Section 7.1 of this Agreement. The Product supplied hereunder shall have a
Exhibit 10.47 - Page 10
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ASTERISKS DENOTE SUCH OMISSION
minimum shelf life of 20 months, which shall run from the date of shipment by
the Manufacturer.
4.3 ACCEPTANCE AND REJECTION. Leiner shall give written notice
to Genpharm of any claims that the Product purchased pursuant to this Agreement
does not comply with the requirements of Section 7.1 of this Agreement promptly
upon its becoming aware of such non-compliance. In the event that Leiner shall
fail to notify Genpharm of any such claim within thirty (30) business days of
▇▇▇▇▇▇'▇ receipt or deemed receipt thereof at the Leiner Facility, such Product
shall be deemed accepted by Leiner. Any notice by Leiner pursuant to this
Section 4.3 that any Product does not comply with the terms and conditions
hereof shall be accompanied by a true and correct copy of the results of any
tests conducted by Leiner thereon. Leiner and Genpharm shall cooperate in good
faith with the Manufacturer to resolve any disputes arising therefrom and in the
event that the parties shall be unable to resolve such dispute within thirty
(30) calendar days from the date of the Manufacturer's receipt of ▇▇▇▇▇▇'▇
notice pursuant to this Section 4.3, the parties shall submit such dispute to a
mutually agreed-to independent laboratory. The determination by such laboratory
shall be final and binding and the costs therefor shall be borne by the
non-prevailing party. Leiner shall not dispose of any Product claimed by it not
to comply with the terms and conditions hereof until final resolution of any
dispute with respect thereto. Genpharm shall cause the Manufacturer to promptly
replace any Product which does not comply with the terms and conditions hereof,
at Genpharm's sole cost and expense, by delivery thereof to Leiner, but neither
Par nor Genpharm shall be liable for ▇▇▇▇▇▇'▇ loss of profits in connection
herewith.
4.4 PACKAGING. Leiner shall package the Product into
appropriate configurations and SKUs. Leiner shall ensure that the Product is
packaged with labels, product inserts and other labeling conforming with FDA
requirements. Leiner shall be solely responsible, financially and legally, for
the contents of the labels and artwork on all finished labeled Product sold or
otherwise released by Leiner (except for information contained on such labels
that is also contained on the labels of the bulk Product supplied by or on
behalf of the Manufacturer to Leiner pursuant hereto). Leiner understands and
agrees that all labels and artwork concepts on all packaging material used by
Leiner in connection with labeling and packaging of the Product shall be subject
to the prior reasonable approval of Genpharm; PROVIDED, that the approval by
Genpharm of any label or artwork concept shall not relieve or otherwise affect
▇▇▇▇▇▇'▇ obligations or responsibilities hereunder (or impose any obligation or
responsibility on Genpharm or Par in connection with such labels or packaging
material or their use or release, as aforesaid, except as expressly contemplated
above with respect to the contents of information contained on the labels which
was provided by Genpharm or the Manufacturer). Genpharm understands and agrees
that after initial approval of master labels and artwork concepts, Leiner shall
not be obligated to provide revised individual customer labels or artwork to
Manufacturer; PROVIDED, that such revision is confined to either trade dress or
customer trademark issues. Leiner shall be responsible for the costs of printing
plates and dies as may be applicable. Leiner shall comply with the
Specifications and applicable cGMP and other FDA requirements (and the
requirements of all other applicable governmental or regulatory bodies, agencies
or authorities in the Territory) in all packaging and labeling of the Product.
Exhibit 10.47 - Page 11
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ASTERISKS DENOTE SUCH OMISSION
5. PRICE AND PAYMENT TERMS.
5.1 TRANSFER PRICE. Leiner shall pay Genpharm the Transfer
Price of the Product. Genpharm shall provide Leiner with its best Transfer Price
for the Product for over-the-counter distribution in the Territory, based upon
comparable quantities, delivery dates and other terms and conditions, not giving
effect to Section 2 hereof..
5.2 INVOICING AND PAYMENT. Genpharm shall invoice Leiner for
the Transfer Price of the Product within a reasonable period of time after the
time such Product is delivered to Leiner as contemplated in Section 4.2 hereof.
The Transfer Price shall be due and payable within forty-five (45) calendar days
following the date of such invoice and thereafter shall bear interest until paid
at the annualized rate equal to the daily (as at the close of business on each
such day) prime rate as quoted from time to time by Citibank, N.A. (or successor
entity), New York, New York, plus five (5%) percent, compounded daily. Leiner
shall pay the Transfer Price for each shipment of the Product, whether such
shipment be in whole or in only partial fulfillment of any order.
6. CERTAIN UNDERTAKINGS.
6.1 PRODUCT COMPLAINTS AND ADVERSE DRUG EXPERIENCES. Leiner
shall be responsible for handling all Product complaints promptly and for
notifying Genpharm and Par of all such complaints promptly and in any event
within thirty (30) calendar days of knowledge thereof. Leiner shall notify
Genpharm and Par of any report of an adverse drug experience concerning the
Product within three (3) calendar days of receipt of the report and provide
Genpharm and Par with information as required by applicable law and regulations
and/or as reasonably requested by Genpharm or Par. This Section 6.1 shall
survive the termination or expiration of this Agreement with respect to Product
distributed by Leiner.
6.2 FACILITY MAINTENANCE; INSPECTION; REPORTS. (a) Genpharm
shall cause the Manufacturer to maintain and operate the Plant and implement
such quality control procedures so as to be able to perform its obligations
hereunder. Genpharm shall cause the Manufacturer to provide access to quality
assurance representatives of Leiner and/or Par, at either party's request, to
inspect the Plant at all times upon reasonable notice, during normal business
hours and on a confidential basis. Genpharm shall also cause the Manufacturer to
permit Leiner and/or Par, at either party's request, to conduct reasonable
periodic visits to such Plant to discuss manufacturing and supply issues with
management of Genpharm and the Manufacturer.
(b) Leiner shall maintain and operate the Leiner Facility and
implement such quality control procedures so as to be able to perform its
obligations hereunder. Leiner shall provide access to quality assurance
representatives of Genpharm (who may be accompanied by quality assurance
representatives of the Manufacturer) and/or Par, at either party's request, to
inspect the Leiner Facility at all times upon reasonable notice, during normal
business hours and on a confidential basis.
(c) Leiner shall promptly provide Genpharm and Par with a copy
of any FDA Form 483 received at the conclusion of an inspection relating to the
Product. Genpharm shall cause Leiner and Par to be promptly provided with a copy
Exhibit 10.47 - Page 12
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ASTERISKS DENOTE SUCH OMISSION
of any FDA Form 483 received by the Manufacturer following the conclusion of an
inspection relating to the Product.
6.3 FILING REQUIREMENTS AND MAINTENANCE. (a) Genpharm shall
cause the Manufacturer to promptly comply with all FDA filing and reporting
requirements with respect to the Product, including, without limitation, all
filing and reporting necessary to keep the ANDA current with the FDA. Genpharm
shall cause the Manufacturer to be responsible for all stability studies as may
be required for the Product in bulk containers.
(b) Leiner shall be responsible for compliance with all FDA
requirements concerning its repackaging, labeling, and marketing activities,
including, but not limited to, stability of the Product in ▇▇▇▇▇▇'▇
container-closure system.
6.4 INSURANCE. Each of Leiner and Genpharm shall (and shall
cause their respective Affiliates, as required, to) during the term of this
Agreement and for a period of not less than 36 months following the termination
or expiration of this Agreement, carry or be subject to coverage under (as a
named insured) product liability insurance (including blanket contractual
liability) in an amount of not less than $15 million combined single limit, each
of whose insurance shall name Par as an additional named insured and shall be
written on an occurrence policy form with an insurance carrier reasonably
acceptable to the other parties. Evidence of coverage, in the form of
certificates of insurance, shall be provided to each party promptly upon
execution of this Agreement and as reasonably requested thereafter. Such
certificates shall be provided by written notice to the other party hereto
fifteen (15) calendar days prior to any material change, cancellation or
non-renewal of the policy.
6.5 CERTAIN LITIGATION. Genpharm and Par will (a) undertake
the defense of legal matters relating to the Paragraph IV Litigation with regard
to the Product and (b) be fully responsible for the legal fees and expenses
resulting directly from the Paragraph IV Litigation and have ultimate decision
making authority with regard to the Paragraph IV Litigation, subject to, and as
provided in, the Manufacturing Agreement.
6.6 ALLOCATION OF NET PROFIT. (a)(i) With respect to Net
Profit attributable to sales of the Product during the twelve (12)-month period
commencing on the date of the First Commercial Sale, Leiner shall pay to
Genpharm, as a royalty, within thirty (30) calendar days of the end of each
calendar quarter thereof, an amount equal to *****-**** (**%) percent of the Net
Profit attributable to sales of the Product during such calendar quarter.
(ii) With respect to Net Profit attributable to sales of the
Product following the first anniversary of the First Commercial Sale, Leiner
shall pay to Genpharm, as a royalty, within thirty (30) calendar days of the end
of each calendar quarter thereof, an amount equal to ***** (**%) percent of the
Net Profit attributable to sales of the Product during such calendar quarter.
(b) All payments made pursuant to this Section 6.6 shall be
accompanied by a written statement setting forth in reasonable detail the basis
for and calculation of such amount and signed by the Chief Financial Officer of
Leiner certifying that, to the best of his or her knowledge, after reasonable
investigation, such statement is true and correct.
Exhibit 10.47 - Page 13
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ASTERISKS DENOTE SUCH OMISSION
6.7 PROVISION OF CERTAIN INFORMATION. Genpharm and Leiner
shall provide Par with such information as Par may reasonably request from time
to time with respect to the subject matter of this Agreement, as soon as
reasonably practicable after receipt of any such request. Such information may
include, but is not limited to, the number of units of Product sold and related
pricing information.
7 WARRANTIES AND INDEMNIFICATION.
7.1 CERTAIN REPRESENTATIONS AND WARRANTIES OF GENPHARM. (a)
Genpharm represents, warrants and agrees to Leiner and Par that at the time of
delivery to Leiner hereunder the Product: (i) will meet the Specifications, will
not be adulterated or misbranded, within the meaning of the Act, will comply
with any similar state and local laws and all regulations under those laws, and
will not be an article which may not be introduced into interstate commerce
under the provisions of Section 505 of the Act; and (ii) will have a minimum
shelf life of at least twenty (20) months, which shall run from the date of
shipment.
(b) Genpharm represents and warrants to Leiner and Par that
(i) the Manufacturer has characterized bulk containers as a "finished market
package" in the ANDA and (ii) the ANDA and any other filings made with the FDA
in connection with the Product prior to the date hereof were all accurate,
complete, and truthful when filed and were made in good faith upon the best
information available to Genpharm at such time.
(c) Genpharm represents, warrants and agrees to Leiner and Par
that the Product it has manufactured or will manufacture has been, and will be,
manufactured, stored, transported and tested in accordance with the most current
version of the ANDA, cGMP and all applicable laws in effect at the time of such
manufacture and testing.
(d) Genpharm represents and warrants to Leiner and Par that
neither it nor any of its Affiliates is an Ineligible Person.
THE FOREGOING WARRANTIES IN SECTION 7.1(a), (b), (c) AND (d) ARE MADE BY
GENPHARM EXPRESSLY IN LIEU OF ANY OTHER EXPRESS OR IMPLIED WARRANTIES,
INCLUDING, BUT NOT BY WAY OF LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
7.2 CERTAIN REPRESENTATIONS AND WARRANTIES OF LEINER. (a)
Leiner represents, warrants and agrees to Genpharm and Par that (i) the
repackaging, labeling, testing, storage, transportation and marketing activities
that it will conduct with respect to the Product will comply with cGMP and all
requirements of the Act, any similar state and local laws, and all regulations
under those laws; and (ii) assuming the accuracy of the representation of
Genpharm pursuant to Section 7.1(a)(i) hereof, the Product distributed by Leiner
will not be adulterated or misbranded, within the meaning of the Act, and will
not be an article which may not be introduced into interstate commerce under the
provisions of Section 505 of the Act.
(b) Leiner represents, warrants and agrees to Genpharm and Par
that (i) any trademarks utilized in connection with the packaging and labeling
of the Product are the property of Leiner and may be lawfully used by Leiner
without breach of any contract or agreement to which Leiner is a party or by
Exhibit 10.47 - Page 14
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which Leiner is bound, and (ii) the Product label will comply in all material
respects with all applicable laws and regulations.
(c) Leiner represents and warrants to Genpharm and Par that
neither it nor any of its Affiliates is an Ineligible Person.
THE FOREGOING REPRESENTATIONS AND WARRANTIES IN SECTION 7.2(a), (b) AND (c) ARE
MADE BY LEINER EXPRESSLY IN LIEU OF ANY OTHER EXPRESS OR IMPLIED WARRANTIES,
INCLUDING, BUT NOT BY WAY OF LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.
7.3 CERTAIN REPRESENTATIONS AND WARRANTIES OF PAR. Par hereby
represents and warrants to Genpharm and Leiner that neither it nor any of its
Affiliates is an Ineligible Person.
THE FOREGOING REPRESENTATION AND WARRANTY IN SECTION 7.3 IS THE ONLY
REPRESENTATION MADE BY PAR AND IS EXPRESSLY IN LIEU OF ANY EXPRESS OR IMPLIED
WARRANTIES, INCLUDING, BUT NOT BY WAY OF LIMITATION, THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
7.4 PRODUCT RECALL. (a) In the event that the Manufacturer
shall be required (or shall voluntarily decide) to initiate a recall, product
withdrawal or field correction of any Product (a "Recall"), whether or not such
Recall has been requested or ordered by the FDA (or any other governmental body,
agency or official having jurisdiction in the Territory) or by a court, Genpharm
shall, or shall cause the Manufacturer to, notify Leiner, and Leiner shall fully
cooperate and shall cause its Affiliates to fully cooperate with Genpharm (and
such Manufacturer) in notifying their customers to return all such Product and
shall follow any other instructions provided by Genpharm (or such Manufacturer).
(b) In the event that Leiner believes that a Recall may be
necessary and/or appropriate, prior to taking any action Leiner shall
immediately notify Par and the Manufacturer and Genpharm and Leiner shall
cooperate and cause their respective Affiliates to cooperate with each other
(and the other's Affiliates) in determining the necessity and nature of the
action to be taken.
(c) With respect to any Recall, Genpharm or the Manufacturer
shall make all contacts with the FDA and shall be responsible for coordinating
all of the necessary activities in connection with such Recall and Leiner (and
its Affiliates) and Genpharm (and its Affiliates) shall each cooperate with the
other (and with the other's Affiliates) in recalling the affected Product.
(d) (i) In the event that it is determined by agreement of the parties or
by arbitration as herein contemplated that a Recall results from any
cause or event arising from the manufacture, labeling, storage,
transportation (prior to delivery to Leiner), handling or packaging of
the Product by the Manufacturer or other cause or event attributable to
the Manufacturer, Genpharm shall be responsible for all expenses of
such Recall. (ii) In the event that it is determined by agreement of
the parties or by arbitration as herein contemplated that a Recall
results from any cause or event arising from the transportation(after
delivery to Leiner), repackaging, labeling, storage, handling,
Exhibit 10.47 - Page 15
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ASTERISKS DENOTE SUCH OMISSION
marketing or distribution of the Product by Leiner or any of its
Affiliates or other cause or event attributable to Leiner or any of its
Affiliates, Leiner shall be responsible for all expenses of such
Recall. (iii) In the event that it is determined by agreement of the
parties or by arbitration as herein contemplated that a Recall results
from a combination of (i) and (ii) above, then Genpharm and Leiner
shall be responsible for all expenses of such Recall in proportions
determined by such agreement of the parties or by such arbitration.
(iv) Any costs incurred by the Manufacturer or Leiner in complying with
their respective obligations pursuant to this Section 7.4 shall not be
passed on to the other parties hereunder in the calculation of the
Manufacturing Cost or otherwise.
(e) For purposes of this agreement, Recall expenses shall
include, but not be limited to, the expenses of notification and destruction or
return of the recalled Product, as the case may be, and ▇▇▇▇▇▇'▇ (and its
Affiliates') and Genpharm's (and its Affiliates') reasonable out-of pocket costs
in connection with such Recall, including, but not limited to, reasonable
attorney's fees and expenses and credits and recall expenses claimed and paid to
customers (the "Recall Expenses"). Each of the parties shall use, and shall
cause its Affiliates to use, its reasonable best efforts to minimize the Recall
Expenses that it incurs and shall provide to the other, upon request, reasonable
evidence of the Recall Expenses being claimed by it.
(f) All communications relating to a Recall shall be held in confidence and
shall be subject to the terms of Section 10 hereof.
7.5 OBLIGATIONS OF PAR. The parties hereby recognize and agree
that Par shall have no obligations under this Agreement except as are expressly
set forth herein.
7.6 INDEMNIFICATION BY LEINER. Leiner shall indemnify and hold
Genpharm and Par and their respective Affiliates, officers, directors, employees
and agents harmless from and against any claim, action, suit, proceeding, loss,
liability, damage or expense (including, without limitation, reasonable
attorneys' fees) ("Losses") arising directly or indirectly as a result of
▇▇▇▇▇▇'▇ and its Affiliates' negligent acts or omissions, willful wrongful acts
or any breach of its representations, warranties, covenants or other obligations
hereunder; PROVIDED, HOWEVER, that Leiner shall not be required to indemnify Par
with respect to any Losses to the extent arising from or related to Par's or its
Affiliates' negligent acts or omissions, willful wrongful acts or breach of its
representation, warranty, covenants or other obligations hereunder, or from
information supplied by Par or its Affiliates to Leiner or contained in
regulatory filings or correspondence prepared or delivered by Par or its
Affiliates in connection herewith; PROVIDED, FURTHER, that Leiner shall not be
required to indemnify Genpharm with respect to any Losses to the extent arising
from or related to Genpharm's or any of Genpharm's Affiliate's negligent acts or
omissions, willful wrongful acts or breach of its representations, warranties,
covenants or other obligations hereunder, or from information supplied by
Genpharm or any of its Affiliates to Leiner or contained in regulatory filings
or correspondence prepared or delivered by Genpharm or any of its Affiliates.
7.7 INDEMNIFICATION BY GENPHARM. Genpharm shall indemnify and
hold Par and Leiner and their respective Affiliates, officers, directors,
employees and agents harmless from and against any Losses arising directly or
indirectly as a result of Genpharm's negligent acts or omissions, willful
wrongful acts or any breach of its representations, warranties, covenants or
other obligations hereunder; PROVIDED, HOWEVER, that Genpharm shall not be
required to indemnify Par with respect to any Losses to the extent arising from
Exhibit 10.47 - Page 16
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ASTERISKS DENOTE SUCH OMISSION
or related to Par's or any of Par's Affiliate's negligent acts or omissions,
willful wrongful acts or breach of its representation, warranty, covenants or
other obligations hereunder, or from information supplied by Par or any of its
Affiliates to Genpharm or contained in regulatory filings or correspondence
prepared or delivered by Par or any of its Affiliates in connection herewith;
PROVIDED, FURTHER, that Genpharm shall not be required to indemnify Leiner with
respect to any Losses to the extent arising from or related to ▇▇▇▇▇▇'▇ or
▇▇▇▇▇▇'▇ Affiliates' negligent acts or omissions, willful wrongful acts or
breach of its representations, warranties, covenants or other obligations
hereunder, or from information supplied by Leiner or its Affiliates to Genpharm
or contained in regulatory filings or correspondence prepared or delivered by
Leiner or its Affiliates.
7.8 INDEMNIFICATION PROCEDURES. A party (the "Indemnitee")
which intends to claim indemnification under this Article 7 shall promptly
notify the party from whom it intends to claim indemnification (the
"Indemnitor") in writing of any action, claim or liability in respect to which
the Indemnitee or any of its offices, directors, employees or agents intends to
claim such indemnification. The Indemnitee shall permit, and shall cause its
employees and agents to permit, the Indemnitor, at its discretion, to settle any
such action, claim or liability and agrees to the complete control of such
defense or settlement by the Indemnitor; PROVIDED, HOWEVER, that such settlement
does not adversely affect any other party's rights hereunder or impose any
obligations on any other party in addition to those set forth herein in order
for it to exercise such rights. No such action, claim or liability shall be
settled by the Indemnitee without the prior written consent of the Indemnitor,
and the Indemnitor shall not be responsible for any fees or other costs incurred
other than as provided herein. The Indemnitee, its employees, agents and
affiliates shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any action, claim or
liability covered by this indemnification. The Indemnitee shall have the right,
but not the obligation, to be represented by counsel of its own selection and at
its own expense.
8. AUDIT.
8.1 AUDIT OF GENPHARM'S BOOKS. Genpharm shall, and shall cause
the Manufacturer to, maintain true and complete books of account containing an
accurate record of all data necessary for proper assessment of the Transfer
Price for the Product provided in Section 5.1 hereof. Subject to Section 8.3
hereof, Genpharm shall, and shall cause the Manufacturer to, provide Par and
Leiner with the right, through an independent certified public accountant
(except any to whom Genpharm or the Manufacturer has a reasonable objection), to
audit such books of account related to such cost at any time, on reasonable
prior written notice, within two (2) years after the end of the calendar year in
which the Products that are the subject of such payment were delivered for sale
in the Territory for the purpose of verifying the accuracy of such cost.
Genpharm or the Manufacturer may require such accountant to execute a reasonable
confidentiality agreement as a condition to providing access to its books and
records. Subject to the final sentence of this Section 8.1, the party or parties
requesting the audit shall bear all costs of the audit. In the event that such
certified public accountant shall have questions which are not in their judgment
answered by such books and records, the auditor shall have the right to confer
with representatives of Genpharm, including its Chief Financial Officer. The
parties agree that information furnished to Par and Leiner as a result of any
such audit shall be limited to a written statement by such certified public
accountant to the effect that they have reviewed the books of account maintained
by or on behalf of Genpharm or the Manufacturer and either (a) Genpharm's or the
Manufacturer's calculations are correct or (b) setting forth any required
Exhibit 10.47 - Page 17
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ASTERISKS DENOTE SUCH OMISSION
adjustments thereto. The parties agree to be bound by the final result of such
audit. If any such audit shows any overpayment by Leiner, Genpharm shall make a
correcting refund or, at ▇▇▇▇▇▇'▇ option, credit, within thirty (30) calendar
days after receipt of the written statement described above and, if such
overpayment shall exceed three (3%) percent of any amount payable hereunder or
$10,000, whichever is greater, Genpharm shall bear all costs of the audit. If
any such audit shows any underpayment by Leiner, Leiner shall make a correcting
payment within thirty (30) calendar days after receipt of the written statement
described above.
8.2 AUDIT OF ▇▇▇▇▇▇'▇ BOOKS. Leiner shall maintain true and
complete books of account containing an accurate record of all data necessary
for proper assessment of the Net Profit payments provided in Section 6.6 hereof.
Subject to Section 8.3 hereof, Par and Genpharm shall have the right, through an
independent certified public accountant (except any to whom Leiner has a
reasonable objection), to audit ▇▇▇▇▇▇'▇ books of account related to such
payment at any time, on reasonable prior written notice, within two (2) years
after the end of the calendar year in which the Products that are the subject of
such payment were delivered for sale in the Territory for the purpose of
verifying the accuracy of such payment. Leiner may require such accountant to
execute a reasonable confidentiality agreement as a condition to providing
access to its books and records. Subject to the final sentence of this Section
8.2, the party or parties requesting the audit shall bear all costs of the
audit. In the event that such certified public accountant shall have questions
which are not in their judgment answered by such books and records, the auditor
shall have the right to confer with representatives of Leiner, including its
Chief Financial Officer. The parties agree that information furnished to Par and
Genpharm as a result of any such audit shall be limited to a written statement
by such certified public accountant to the effect that they have reviewed the
books of account of Leiner and either (a) ▇▇▇▇▇▇'▇ calculations are correct or
(b) setting forth any required adjustments thereto. The parties agree to be
bound by the final result of such audit. If any such audit shows any
underpayment by Leiner, Leiner shall make a correcting payment within thirty
(30) calendar days after receipt of the written statement described above and,
if such underpayment shall exceed three (3%) percent of any amount payable
hereunder or $10,000, whichever is greater, Leiner shall bear all costs of the
audit. If any such audit shows any overpayment by Leiner, Genpharm shall make a
correcting payment or, at ▇▇▇▇▇▇'▇ option, credit, within thirty (30) calendar
days after receipt of the written statement described above.
8.3 AUDIT LIMITATIONS. None of the parties shall have a right
to (i) audit the books of account pursuant to this Section 8 on more than one
occasion during any fiscal year and (ii) audit the books of account of any
fiscal year pursuant to this Section 8 on more than one occasion; PROVIDED,
HOWEVER, that the limitations provided in this Section 8.3 shall not apply to
the Arbitrator(s) in respect of any resolution of any disputes pursuant to
Section 12.1 hereof.
9. TERM AND TERMINATION.
9.1 TERM. This Agreement shall commence on the Effective Date
and continue for a period of five (5) years from the date of the First
Commercial Sale of the Product (the "Initial Term"); PROVIDED, HOWEVER, that
this Agreement shall terminate if there shall be no First Commercial Sale by
June 30, 2004. Thereafter, this Agreement shall be automatically renewed for
successive twelve (12)-month periods (each, a "Renewal Term"), unless any party
shall otherwise notify the other parties in writing at least six (6) months
prior to the scheduled expiration date of the Initial Term or any Renewal Term.
Exhibit 10.47 - Page 18
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ASTERISKS DENOTE SUCH OMISSION
9.2 TERMINATION. This Agreement may be terminated during the
Initial Term or any Renewal Term upon the occurrence of any of the following
events:
(a) FAILURE TO OBTAIN OVER-THE-COUNTER PRODUCT APPROVAL. If
the Manufacturer shall fail to obtain Product Approval by the first anniversary
of the first commercial sale of the Product in generic form by a third party
pursuant to a valid abbreviated new drug application, any party may terminate
this Agreement upon written notice thereof to the other parties.
(b) CHANGE IN CIRCUMSTANCES. Notwithstanding any other
provision of this Agreement, if during any rolling twelve (12)-month-period
after the First Commercial Sale of the Product, the Net Profit for the Product
shall be less than ****** (**%) percent of Net Sales, then any party may
terminate this Agreement by notice in writing to the other parties, given no
later than one hundred twenty (120) calendar days after the end of such rolling
twelve (12) month period; PROVIDED, HOWEVER, a party may not terminate this
Agreement under this Section 9.2(b) if its own breach of this Agreement or other
actions has caused the Net Profit for such period to be less than ****** (**%)
percent of Net Sales.
(c) INFRINGEMENT. Any party may terminate this Agreement upon
ninety (90) calendar days written notice to the other parties if, based upon the
opinion of qualified counsel, such party believes that there is a substantial
likelihood that the Product or API infringes the intellectual property rights of
a third party.
(d) BREACH. If any party commits a breach or default in the
performance or observance of any of its material obligations under this
Agreement and such breach or default is not cured within thirty (30) days after
receipt by such party of the written notice from any non-breaching party
specifying the breach or default, then the non-breaching or non-defaulting party
may terminate this Agreement with immediate effect by giving written notice to
the other parties.
(e) BANKRUPTCY. This Agreement shall automatically terminate
upon the initiation of any proceeding in bankruptcy, reorganization or
arrangement for the appointment of a receiver or trustee to take possession of
the assets of a party hereto or similar proceeding under the law for release of
creditors by or against a party hereto, or if a party hereto shall make an
assignment for the benefit of its creditors.
(f) FORCE MAJEURE EVENT. If, as a result of a Force Majeure
Event, a party does not perform its obligations hereunder for any consecutive
period of 120 calendar days, any other party shall have the right to terminate
this Agreement in its entirety upon providing written notice to the other
parties, such termination to be effective within thirty (30) calendar days of
such notice.
(g) INELIGIBLE PERSON. (i) In the event that Genpharm or
▇▇▇▇▇▇ or any Affiliate of either of them shall become an Ineligible Person with
respect to the Product, such party shall promptly notify the other parties in
writing and shall keep the other parties apprised of its reasonable best efforts
to have the status as an Ineligible Person removed, and any other party may
terminate this Agreement upon thirty (30) calendar days prior written notice
unless the status as an Ineligible Person is removed within such period. (ii)
▇▇▇▇▇▇ or Genpharm may terminate this Agreement upon thirty (30) calendar days
prior written notice to the other parties if (otherwise than by reason of a
breach of its obligations hereunder) it is legally prohibited from performing
Exhibit 10.47 - Page 19
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
its obligations hereunder or it or one of its Affiliates shall become an
Ineligible Person in respect of the Product (and it has made its reasonable best
efforts to remove the prohibition or such status as an Ineligible Person) and
such prohibition or status as an Ineligible Person has continued uninterrupted
for a period of 120 calendar days.
9.3 POST-TERMINATION. (a) Upon the expiration or termination
of this Agreement for any of the above reasons, the parties shall be permitted
to continue in their respective businesses as if the Agreement has not been
entered into in the first place.
(b) Expiration or termination of this Agreement shall not
relieve the parties of any obligations accruing prior to the effective date
thereof or resulting therefrom. All payment obligations due pursuant to this
Agreement shall survive termination or expiration of this Agreement, including,
without limitation, (i) the payment by ▇▇▇▇▇▇ for the cost of all raw materials,
production materials and inventories ordered on behalf of ▇▇▇▇▇▇ in accordance
with Sections 3.4 and 4.1 hereof, but not used by the Manufacturer, and (ii) the
payment by ▇▇▇▇▇▇ of all amounts pursuant to Sections 5 and 6.6 hereof.
10. CONFIDENTIALITY.
10.1 TREATMENT OF CONFIDENTIAL INFORMATION. Except as required
by applicable laws and regulations or as otherwise provided in this Article 10,
during the Term and any Renewal Term, and for a period of five (5) years after
the later of the termination or expiration of this Agreement, each party shall
hold in strict confidence, and may not use for purposes other than this
Agreement, exploit or disclose to a third party (except as specifically set
forth herein or with the express prior written consent of the other party) any
and all Confidential Information.
10.2 LIMITS ON DISCLOSURE. (a) Without limiting the generality
of the foregoing, each party may disclose Confidential Information, to those
employees who need to receive the Confidential Information in order to further
the activities contemplated in this Agreement. Each party shall take sufficient
precautions to safeguard the Confidential Information, including obtaining
appropriate commitments and enforceable confidentiality agreements. Each party
understands and agrees that the disclosure of Confidential Information may
result in serious and irreparable damage to the other party, that the remedy at
law or any breach of this covenant may be inadequate, and that the party seeking
redress hereunder shall be entitled to injunctive relief, without prejudice to
any other rights and remedies to which such party may be entitled.
(b) It is acknowledged that Confidential Information may be
obtained by a party from the other party not only in writing or other tangible
form (including electronic), but also through discussions between each party's
respective representatives, demonstrations, observations and memorization and
other intangible methods.
(c) The above notwithstanding, each party shall have the right
with the exercise of discretion, and insofar as practical under written
confidentiality agreements having provisions no less stringent than those
contained herein, to make disclosures of such portions of Confidential
Information to third party consultants, attorneys, contractors, advisors,
Affiliates and governmental agencies where, in the recipient's reasonable
judgment, such disclosure is beneficial to development, approval or marketing of
the Product pursuant to this Agreement.
Exhibit 10.47 - Page 20
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
(d) Any party shall consult with, and obtain prior written
consent of, the other parties before issuing any press release or making any
other public statement with respect to this Agreement, except as may be required
by applicable law or any listing agreement with any national securities
exchange; provided, that a party issuing such press release or making such
public statement under requirement of applicable law or listing agreement shall
nevertheless use its best efforts to consult with, and obtain prior written
consent of, the other parties before issuing such press release or making such
public statement.
(e) Except as otherwise set forth in this Agreement, upon the
expiration or termination of this Agreement and at the written request of the
disclosing party, the receiving party shall return all Confidential Information
of the disclosing party (including all copies, excerpts and summaries thereof
contained on any media) or destroy such Confidential Information at the option
of the disclosing party, in either case keeping no copies or extracts thereof.
11. FORCE MAJEURE.
11.1 EFFECTS OF FORCE MAJEURE. No party hereto shall be held
liable or responsible for failure or delay in fulfilling or performing any of
its obligations under this Agreement (other than the payment of money or
indemnification) if such failure or delay is caused by, without limitation, acts
of God, acts of the public enemy, fire, explosion, flood, drought, war,
terrorists, riot, sabotage, embargo, strikes or other labor disputes, or by any
other event or circumstance of like or different character to the foregoing
beyond the reasonable control and without the fault or negligence of the
affected party, or by intervention of governmental agency, regardless of fault
(a "Force Majeure Event"). Such excuse shall continue as long as the Force
Majeure Event continues. Subject to Section 9.2(f) hereof, upon cessation of
such Force Majeure Event, such party shall promptly resume performance
hereunder.
11.2 NOTICE OF FORCE MAJEURE. Each party agrees to give the
other parties prompt written notice of the occurrence of any Force Majeure
Event, the nature thereof and the extent to which the affected party will be
unable to perform its obligations hereunder. Each party further agrees to use
reasonable efforts to correct or address (if it is amenable thereto) the Force
Majeure Event as quickly as possible and to give the other parties prompt
written notice when it is again fully able to perform such obligations.
11.3 ALLOCATION OF CAPACITY. If the Manufacturer at any time
is unable to fully supply the purchase orders of ▇▇▇▇▇▇ for the Product in
accordance with this Agreement, Genpharm shall use reasonable efforts to cause
the Manufacturer to equitably allocate its available resources and production
capacity among ▇▇▇▇▇▇ and its other customers, taking into consideration the
respective requirements of each during a reasonable period of time prior to the
allocation, as well as such expected requirements during the allocation period.
▇▇▇▇▇▇'▇ recourse under Section 3.5 hereof shall be ▇▇▇▇▇▇'▇ sole and exclusive
remedy (at law or equity) against Genpharm and Par with respect to any failure
by Genpharm and Par to fully supply the purchase orders submitted by ▇▇▇▇▇▇
pursuant to this Agreement.
Exhibit 10.47 - Page 21
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
12. MISCELLANEOUS.
12.1 DISPUTE RESOLUTION. The parties recognize that a BONA
FIDE dispute as to matters may, from time to time, arise during the term of this
Agreement which relates to a party's rights and/or obligations hereunder. In the
event of the occurrence of such a dispute, any party may, by notice to the other
parties, have such dispute referred to their respective officers, designated
below, or their successors, for attempted resolution by good faith negotiation
within thirty (30) calendar days after such notice is received. Such designated
officers are as follows:
For Genpharm : ▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer
For ▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
For Par: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President and Chief Executive Officer
If no agreement is reached within 30 calendar days of the referral to such
officers, then such controversy or claim shall be settled by arbitration by
arbitrator(s) (the "Arbitrator(s)") selected in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, such arbitration to
be held in New York, New York on an expedited basis. Judgment upon the award
rendered by the Arbitrator(s) may be entered in any court having jurisdiction
thereof. The Arbitrator(s) shall have the discretion, to be exercised in
accordance with applicable law, to allocate among the parties the arbitrators'
fees and litigation costs, and the Arbitrator(s) shall also have authority to
shift any prevailing party's attorney's fees to any non-prevailing party.
12.2 INDEPENDENT CONTRACTORS. The relationship between each of
Genpharm, Par and ▇▇▇▇▇▇ is that of independent contractors and nothing herein
shall be deemed to constitute the relationship of partners, joint venturers nor
of principal and agent between any of Genpharm, Par and/or ▇▇▇▇▇▇. No party
shall have any express or implied right or authority to assume or create any
obligations on behalf of or in the name of any other party or to bind any other
party to any contract, agreement or undertaking with any third party.
12.3 ASSIGNMENT. This Agreement may be assigned by any party
in connection with any sale, merger or other business combination involving all
or substantially all of such parties' assets or capital stock. Except as set
forth in the preceding sentence, neither this Agreement nor any other rights or
obligations hereunder shall be assigned, delegated or subcontracted by any party
by operation of law or otherwise without the prior written consent of the other
parties.
12.4 GOVERNING LAW. This contract shall be governed by, and
construed in accordance with, the laws of the State of New York. Subject to
Section 12.1 hereof, in connection with any action commenced hereunder, each of
the undersigned consents to the jurisdiction of the state and federal courts
located in Manhattan, New York City and hereby waives any objection to venue or
forum laid therein. The parties hereby agree that service of process by
certified mail, return receipt requested, shall constitute personal service for
all purposes hereof.
12.5 CURRENCY UNITS. All amounts invoiced and all payments
made hereunder shall be in U.S. dollars. Any cost or expense that forms the
basis of a payment hereunder which was incurred in a currency other than U.S.
dollars shall be converted into its U.S. dollar equivalent in accordance with
the usual procedures therefor used by the Person incurring such cost or expense.
Exhibit 10.47 - Page 22
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
12.6 NO IMPLIED WAIVER. No failure or delay on the part of any
party hereto to exercise any right, power or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver; nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.
12.7 NOTICE. All notices required to be given hereunder shall
be in writing and shall be given by personal delivery, via facsimile
transmission, by a nationally recognized overnight carrier or by registered or
certified mail, postage prepaid with return receipt requested. Notices shall be
addressed to the parties as follows:
If to Genpharm: Genpharm Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇, ▇▇▇▇▇▇
Attn: Chief Financial Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇: ▇▇▇▇▇▇ Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attn: Senior Vice President, Contract Manufacturing
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇▇ Health Products, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Par: Par Pharmaceutical, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇, President and Chief Executive
Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President of Marketing
and Business Development
Facsimile No.: (▇▇▇)-▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Exhibit 10.47 - Page 23
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notices delivered personally shall be deemed communicated as of actual receipt;
notices sent via facsimile transmission shall be deemed communicated as of
receipt by the sender of written confirmation of transmission thereof; notices
sent via overnight courier shall be deemed communicated as of one business day
following sending; and notices mailed shall be deemed communicated as of three
business days after proper mailing. A party may change its address by written
notice in accordance with this Section 12.7.
12.8 AMENDMENTS. Any amendment or modification of this
Agreement shall be valid only if made in writing and signed by all parties
hereto.
12.9 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute a single document.
12.10 ENTIRE AGREEMENT. Except as set forth in the following
sentence, this Agreement, including the Schedules hereto which are incorporated
herein as if set forth in their entirety at the point of reference thereto,
constitutes the entire understanding between the parties with respect to the
subject matter hereof and supersedes all prior contracts, agreements and
understandings related to the same subject matter between the parties. Excepted
from the preceding sentence are (i) the Manufacturing Agreement, as may be
deemed amended hereby, and (ii) that certain Side Agreement of even date
herewith between Genpharm and Par, as such documents apply to Genpharm and Par,
but which in no way affect ▇▇▇▇▇▇'▇ rights and obligations hereunder. The
parties make no representations or warranties, except as expressly provided
herein. The parties intend this Agreement to be a complete statement of the
terms of their understanding. No change or modification of any of the provisions
hereof shall be effective unless in writing and signed by an authorized officer
of each of the parties.
12.11 BENEFIT; BINDING EFFECT. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Subject to Section 12.15 hereof, there are no
intended third-party beneficiaries of this Agreement.
12.12 SURVIVAL. Notwithstanding anything to the contrary
contained in this Agreement, the provisions of Sections 1, 7, 8, 9.3, 10 and 12
shall survive any termination or expiration of this Agreement.
12.13 FURTHER ASSURANCES. The parties hereto agree that they
shall take all appropriate actions, including, without limitation, the execution
or filing of any documents or instruments, which may be reasonably necessary to
carry out the intent and accomplish the purposes of any of the provisions
hereof.
Exhibit 10.47 - Page 24
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
12.14 SEVERABILITY. In the event that any provision of this
Agreement shall be held invalid or unenforceable for any reason by a court of
competent jurisdiction, such provision or part thereof shall be considered
separate from the remaining provisions of this Agreement, which shall remain in
full force and effect. Such invalid or unenforceable provision shall be deemed
revised to effect, to the fullest extent permitted by law, the intent of the
parties as set forth therein.
12.15 PAR AS THIRD-PARTY BENEFICIARY. Genpharm and ▇▇▇▇▇▇
recognize and agree that Par is an intended third-party beneficiary of ▇▇▇▇▇▇'▇
obligations to pay monies pursuant hereto.
[SIGNATURE PAGE FOLLOWS]
Exhibit 10.47 - Page 25
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above written by their duly
authorized representatives.
GENPHARM INC.
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President, Legal Affairs
▇▇▇▇▇▇ HEALTH PRODUCTS, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
PAR PHARMACEUTICAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President of Marketing
and Business Development
Exhibit 10.47 - Page 26
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WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
SCHEDULE 3.3
CERTAIN CUSTOMERS
-----------------
*****-***** (and any successor company thereto)
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
EXHIBIT A
FORM OF PURCHASE ORDER
----------------------