EXHIBIT 10.9
THIRD PARTY
MANUFACTURING AGREEMENT
1.0 PARTIES
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1.1 BUYER: NICHE PHARMACEUTICALS, INCORPORATED
XXXXXXX, XX 00000
("BUYER")
1.2 SELLER: SCHERING CORPORATION
XXXXXXXXXX, XX 00000
("SCHERING")
2.0 PRODUCTS
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The items specified on Exhibit A attached hereto ("Products").
3.0 PURPOSE
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3.1 BUYER requires an assured source of supply of Products and SCHERING
agrees to produce such Products in accordance with the description and
specifications identified in Exhibit A and Exhibit B attached hereto and made
part hereof.
3.2 SCHERING shall sell to BUYER and BUYER shall purchase from SCHERING
during the term of this Agreement all of BUYER's requirements of Products. BUYER
represents to SCHERING that it has all necessary approvals of the Food & Drug
Administration for the Products.
4.0 PRICE
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4.1 Pilot Batches: The price per pilot batch shall be as set
forth in Exhibit A.
4.2 Products: The purchase price of products shall be as set forth in
Exhibit A. BUYER acknowledges that this purchase price is based upon BUYER's
agreement to purchase all of its requirements of Products exclusively from
SCHERING.
4.3 Payment: Payment for all services performed and product delivered
will be made in U.S. Dollars within thirty (30) days after receipt of SCHERING's
invoice. Invoices will be generated based upon completion of service or shipment
of product.
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4.4 Taxes: BUYER shall reimburse SCHERING for any federal, state or
local excise or other tax, assessment, license fee or other charge or increase
thereof, which SCHERING may be required to pay upon the sale, products,
transportation or use of the Products. In no event shall BUYER be required to
reimburse SCHERING for taxes based on income or franchise fees.
5.0 MANUFACTURING AND QUALITY CONTROL
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5.1 SCHERING shall supply all raw materials and packaging components
for the product of pilot batches according to specifications provided by BUYER.
The pilot batches shall be manufactured in accordance with Good Manufacturing
Procedures (GMP's). All pilot production is on a best efforts basis. As SCHERING
has no experience with the manufacture of Product, there can be no guarantees as
to the success of pilot production. SCHERING and BUYER agree that BUYER's
manufacturing representative be present to review manufacturing procedures and
witness the manufacture of all pilot batches.
5.2 For manufacture of Products, SCHERING shall supply all raw
materials and packaging components according to specifications provided by
BUYER.
5.3 SCHERING shall utilize the quality control and manufacturing
process provided SCHERING by the BUYER employing the same methodology or
equivalent techniques agreed to by SCHERING and the BUYER.
5.4 SCHERING shall provide validation services at the price
set forth in Exhibit A.
5.5 SCHERING shall provide accelerated stability testing for pilot
batches at the prices and according to the conditions set forth in Exhibit A.
6.0 ARTWORK AND LABELING
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6.1 All artwork shall be supplied by BUYER and must be
compatible with SCHERING's packaging equipment.
7.0 SHIPMENT AND RISK OF LOSS
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7.1 Shipment shall be by whatever means BUYER instructs and
SCHERING determines is reasonable, provided that shipment is made
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in accordance with all relevant statutory requirements.
7.2 The purchase prices in Article 4.0 hereof are F.O.B. Kenilworth,
New Jersey. Delivery of Products will be to one location in accordance with
BUYER's shipping instructions. SCHERING's delivery to said carrier or trucker
will constitute delivery to BUYER. BUYER will bear all risk of loss, delay, or
damage in transit as well as freight and insurance.
7.3 Claims: The weights, tares and tests affixed by SCHERING's invoice
shall govern unless proven to be incorrect. Claims relating to quantity,
quality, weight, condition and loss of or damage to any of the Products sold
under this Agreement shall be waived by BUYER unless made within thirty (30)
days of receipt of product by BUYER.
8.0 TERM
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8.1 This Agreement shall be effective as of December 1, 1991, and shall
continue in full force and effect for a period of five (5) years commencing with
the date of first commercial sale of Products by BUYER. This Agreement or any
renewal thereof shall be automatically renewed and extended on the same terms
and conditions at the expiration of the term for a renewal period of two (2)
years thereafter unless either party shall notify the other party in writing at
least one (1) year prior to the expiration of the initial term of renewal term
of its intention not to renew or amend this Agreement.
9.0 ESTIMATES AND PURCHASE ORDERS
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9.1 SCHERING will order components of Products, printed labeling,
package materials in containers based on the lead time required to fill BUYER's
estimated requirements. BUYER agrees to purchase from SCHERING all Products
manufactured for BUYER by SCHERING in accordance with BUYER's most recent
written estimates and/or purchase orders. Upon change in artwork requested by
BUYER or upon termination of this Agreement, BUYER shall purchase any inventory
of Products manufactured for it by SCHERING and remaining at the date of
termination along with any components, printed labeling, packaging materials and
containers which were acquired and/or prepared by SCHERING based on forecast
pursuant to this Agreement. Any inventory of packaging components rendered
obsolete as a result of a change shall be purchased from SCHERING by BUYER.
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9.2 At the initiation of this Agreement, BUYER will provide SCHERING
with a written forecast indicating BUYER's projected needs for the succeeding
year.
9.3 BUYER shall place orders in increments of single batches, i.e.,
approximately 1.6 million tablets per batch.
9.4 At the end of each calendar quarter during the term of this
Agreement or any subsequent agreement, BUYER shall provide SCHERING with more
specific data as to its projected needs for the following four (4) calendar
quarters. The parties acknowledge that any data provided to SCHERING by BUYER
concerning its projected needs shall be estimates and shall not be binding on
BUYER unless and until confirmed by BUYER's written purchase order.
9.5 BUYER shall issue written purchase orders to SCHERING at least
ninety (90) days prior to the requested delivery date if the requirements are at
or below the previously supplied estimates and one hundred twenty (120) days if
requirements exceed the previous estimates by 25%.
9.6 BUYER's purchase orders shall designate the desired quantities of
Products, delivery dates and destinations. SCHERING shall promptly fill and ship
all orders of Products in accordance with BUYER's instructions.
10.0 WARRANTIES
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10.1 SCHERING warrants that products delivered to BUYER under this
Agreement shall, at the time of delivery:
10.1.1 Meet the specifications for products set forth
in Exhibit "B" attached hereto;
10.1.2 Shall be in good, usable and merchantable
condition; and
10.1.3 Shall be in compliance with all applicable
Federal laws and regulations.
10.2 BUYER shall have a period of thirty (30) days from date of receipt
of the Products to inspect and reject any shipment of Products on the grounds
that it does not comply with the provisions of Article 10.1 hereof. All or part
of any shipment may be held for SCHERING's disposition and at SCHERING's expense
if found to be
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not in compliance with the specifications set forth in Exhibit "B" hereof,
provided SCHERING confirms such noncompliance through generally acceptable
quality control procedures.
10.3 SCHERING will indemnify and hold BUYER harmless for the
administrative and product costs associated with a product recall should such
recall arise from SCHERING's willful misconduct or negligence in the manufacture
of product. Any claim for indemnification hereunder shall be supported by
reference to generally accepted quality control procedures mutually agreeable to
SCHERING and BUYER.
10.4 Notwithstanding the provisions of Article 12.0 hereof, BUYER's
exclusive remedy and SCHERING's exclusive liability under this Agreement or
otherwise (including negligence) shall be for damages which shall in no event
exceed so much of the purchase price as is applicable to that portion of the
particular shipment with respect to which damages are claimed. BUYER assumes all
risks and liability, and SCHERING assumes no liability, with respect to
unloading and discharge of the Products, storage, handling, sale and use of the
products including its use alone or in combination with other substances or in
the operation of any process, and the compliance or noncompliance with all
federal, state and local laws and regulations applicable to the Products. Other
than as expressly stated in this Agreement, neither party shall be liable to the
other for any incidental or consequential damages arising in connection with
this Agreement or the Products sold hereunder.
11.0 PATENT INDEMNITY
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11.1 SCHERING shall indemnify and hold BUYER harmless from all costs,
damages and expenses (including attorney's fees) arising out of any suit or
action brought against BUYER based upon a claim that any process o technical
data owned by SCHERING infringes a U.S. patent or any other proprietary rights.
11.2 BUYER will indemnify and hold SCHERING harmless from all costs,
damages and expenses (including attorney's fees) arising out of any suit or
action against SCHERING based on a claim (i) that any process or technical data
or other Product or manufacturing specifications furnished by BUYER infringes on
a U.S. patent or other proprietary rights or (ii) that sale or distribution of
the Products by BUYER infringes a U.S. patent(s).
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12.0 GENERAL INDEMNITIES/CONSEQUENTIAL DAMAGES
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12.1 SCHERING will indemnify and hold BUYER harmless for any and all
liability, damage, loss, cost or expense (including reasonable attorney's fees)
resulting from any third party claims made or suits brought against BUYER which
arise from SCHERING's negligence in the manufacture of products hereunder or
SCHERING's breach of the warranty set forth in Article 10.1 hereof. Upon filing
of any such claim or suit, BUYER shall immediately notify SCHERING.
12.2 BUYER will indemnify and hold SCHERING harmless from any and all
liability, damage, loss, cost or expense (including reasonable attorney's fees)
resulting from any third party claims made or suits brought against SCHERING
which arise from BUYER's willful misconduct or negligence in the specifications
for, or handling, distribution, marketing or sale of Products hereunder. Upon
filing of any such claim or suit, SCHERING shall immediately notify BUYER.
12.3 The applicable provisions of the "cross-indemnities" in Articles
12.1 and 12.2 hereof shall also apply to SCHERING's production and BUYER's use
of the Products produced from pilot batches.
12.4 BUYER shall provide to SCHERING evidence of Product liability and
contractual liability insurance reasonably satisfactory to SCHERING of not less
than $2 million per occurrence prior to SCHERING delivering initial commercial
product naming SCHERING as an insured under such policy. Insurance shall
maintain in force for the term of this Agreement and any subsequent renewals.
Failure to demonstrate proof of valid in-force coverage or such other evidence
of coverage for third party liability as shall be satisfactory to SCHERING, or
failure to maintain such coverage shall be terms for immediate termination of
this Agreement by SCHERING.
12.5 SCHERING shall self-insure or maintain Product liability
insurance to the extent of $2 million dollars.
13.0 REGULATORY FILINGS AND APPROVALS
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13.1 BUYER certifies that it will list its Product with the Food and
Drug Administration (Report of Private Label Distribution) and that SCHERING
shall not file for registration.
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13.2 BUYER shall fulfill all approval and reporting requirements of
applicable Federal and State regulatory agencies with respect to the Products
supplied by SCHERING hereunder, provided that SCHERING shall cooperate with
BUYER in providing any data or other information readily available to SCHERING
concerning the Products which will enable BUYER to secure the approvals
necessary for the Products.
14.0 FORCE MAJEURE
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14.1 BUYER and SCHERING shall not be considered in default of their
obligations hereunder to the extent that performance of such obligations is
delayed, hindered or prevented by Force Majeure. Force Majeure includes, without
limitation, inclement weather, strikes, lockouts, inability to procure labor or
materials or fuels due to shortages, fires, riots, incendiarism, interference by
civil or military authorities, compliance with the regulations or order of any
government authority, or the outbreak of war or insurgence, or acts of war
(declared or undeclared) and any other cause which is beyond the reasonable
control of either party. Specifically excluded from this definition are those
acts of the Federal Government or any agency thereof, or judicial action which
could have been avoided by compliance with such laws or regulations, publicly
available and reasonably expected to be known by BUYER and SCHERING.
15.0 FAILURE TO MARKET/REPURCHASE OF OBLIGATIONS
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15.1 SCHERING represents and BUYER acknowledges that significant
capital investment is involved and valuable resources have been allocated and
opportunities forgone by SCHERING in order to manufacture Products.
Consequently, in the event BUYER wishes to cancel this Agreement or any
subsequent agreement relating to the supply of Products by SCHERING, prior to
the expiration date hereof, it may do so by first paying SCHERING and amount
equivalent to the last twelve months' purchases of Product from SCHERING.
15.2 In the event SCHERING wishes to cancel this Agreement or any
subsequent Agreement relating to the supply of Products by SCHERING prior to the
expiration date hereof, SCHERING agrees to sell to BUYER at BUYER's request
under the current terms and conditions of this Agreement or subsequent renewal a
supply of product of not more than the total purchased amount of Product for the
immediately prior one (1) year period.
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16.0 TERMINATION
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16.1 In the event that either party hereto shall at any time commit a
material breach of any of its obligations hereunder, the non-breaching party
may, at its option, terminate this Agreement by giving the other party at least
one hundred and eighty (180) calendar days' prior written notice. Unless the
breaching party cures the breach within the aforesaid notice period, this
Agreement shall be deemed terminated.
16.2 Any termination of this Agreement shall not release the parties
from liabilities and obligations accrued as of the date thereof including but
not limited to BUYER's reimbursement of SCHERING's cost of materials purchased
for the products prior to notice of termination.
17.0 NON-WAIVER OF RIGHTS
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17.1 Failure by SCHERING or BUYER at any time to enforce any of the
terms or conditions of this Agreement shall not affect or impair such terms or
conditions in any way, or the right of SCHERING or BUYER at any time to avail
itself of such remedies as it may have for any breach of such terms or
conditions under the provisions of this Agreement, in equity or at law.
18.0 TRADEMARKS AND TRADE NAMES
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18.1 BUYER hereby acknowledges that it does not have, and shall not
acquire, any interest in any of SCHERING's trademarks or trade names for the
Products unless otherwise expressly agreed.
18.2 BUYER agrees not to use any trade names or trademarks of SCHERING,
including but without limitation the trade name and trademark "SCHERING," except
as specifically authorized by SCHERING in writing both as to the names or marks
which may be used and as to the manner and prominence of use.
18.3 SCHERING agrees to Niche's use of the statement "Manufactured by
Schering Corporation, Xxxxxxxxxx, XX 00000" on Product's primary label in a
format and manner acceptable to SCHERING and authorized in writing.
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19.0 CONFIDENTIALITY
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19.1 The parties hereby acknowledge that any and all information,
knowledge, technology and trade secrets relating to the production, processing
and testing of Products may be used only in the production of Products under
this Agreement.
19.2 BUYER shall maintain in confidence all information, knowledge,
technology and trade secrets relating to the Products as purchased from SCHERING
or developed solely by SCHERING after the date of this Agreement and disclosed
to BUYER and BUYER shall not use such SCHERING information, knowledge,
technology and trade secrets for itself or for any third party nor disclose the
same to any third party without the express written consent of SCHERING.
19.3 SCHERING shall maintain in confidence all information, knowledge,
technology and trade secrets relating to formula for the Products as purchased
from BUYER after the date of this Agreement and disclosed to SCHERING and
SCHERING shall not use such BUYER formulae, information, knowledge, technology
and trade secrets for itself or for any third party nor disclose the same to any
third party without the express written consent of BUYER.
19.4 The obligations set forth above shall not apply to any
information, data, technology, or trade secret disclosed by one party to the
other, either in anticipation of or pursuant to this Agreement or any other
agreement between the parties, if it is (a) already known to the receiving party
as of the date such disclosure is made; (b) available to the receiving party
from printed publications as of the date such disclosure is made or becomes
available from printed publications through no fault of the receiving party; or
(c) disclosed to said receiving party by an independent third party through no
fault of the receiving party.
20.0 NOTICES
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20.1 Any notice required to be given herein shall be deemed to have
been sufficiently given to either party for all of the purposes hereof if given
by telephone, telex or cable and confirmed by registered mail, postage prepaid,
addressed as follows:
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TO SCHERING: SCHERING-PLOUGH CORPORATION
Manager, Third-Party Business Development
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
TO BUYER: NICHE PHARMACEUTICALS, INCORPORATED
President, CEO
000 Xxxxxx Xxxx Xx., X-000
Xxxxxxx, XX 00000
or to such other address as either of the parties shall designate by notice
given as herein required. Notices shall be effective seven (7) calendar days
after mailing of confirmation.
21.0 AMENDMENTS AND WAIVER
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21.1 This agreement cannot be amended in any respect except in writing
duly executed by both parties. No waiver of compliance with any provisions or
conditions of this Agreement and no approvals provided for in this Agreement
shall be effective unless evidenced by a written instrument executed by the
party to be charged.
22.0 ASSIGNMENT
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22.1 Neither party hereto shall assign this Agreement or any part
thereof or any interest herein without the written approval of the other party
hereto except as herein otherwise provided and such approval may not be
unreasonably withheld.
23.0 GOVERNING LAW
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23.1 This Agreement shall be governed by the laws of the State
of New Jersey.
24.0 ENTIRE AGREEMENT
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24.1 This Agreement constitutes the entire understanding between the
parties and shall supersede any prior agreements between the parties hereto.
Each party acknowledges that there are no other understandings which relate to
the matters covered herein or which are inconsistent with any provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate effective as of the date of the latest of the signatures hereto.
NICHE PHARMACEUTICALS, INC. SCHERING CORPORATION
By: /s/ Xxxxx X. Xxxxxxx By: /s/ RML
Title: President /CEO Title: Vice President
Date: 12/24/91 Date: 1/27/92
RML/mlb
attachments: Exhibit A, Exhibit B
12/20/91
#20 A:NICHE
