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Exhibit 10.28
CONFIDENTIAL TREATMENT - NOTED BY * AND STRIKE-THROUGH
*
SUPPLY AND LICENSE AGREEMENT
BY AND BETWEEN
HOECHST XXXXXX XXXXXXX, INC.
AND
THE RUGBY GROUP, INC.
FEBRUARY 27, 1998
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SUPPLY AND LICENSE AGREEMENT
AGREEMENT (this "Agreement") dated as of February 27, 1998, by
and between HOECHST XXXXXX XXXXXXX, INC., a Delaware corporation ("HMRI"), and
THE RUGBY GROUP, INC., a New York corporation ("Rugby").
WHEREAS, HMRI is engaged in the manufacture of certain
pharmaceutical products pursuant to certain new drug applications owned by HMRI;
and
WHEREAS, Rugby desires to purchase and market generic versions
of such products, under its own name, or the name of an affiliate, and under the
private label name of certain of its customers in accordance with this
Agreement; and
WHEREAS, HMRI desires to supply and license such products to
Rugby, upon the terms and subject to the conditions provided herein.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants contained herein and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
The following terms shall have the meanings set forth below.
Unless the context indicates otherwise, the singular shall include the plural
and the plural shall include the singular.
I.1 "ACT" means the Federal Food, Drug and Cosmetic Act, as
amended.
I.2 "AFFILIATE" means any company, partnership or other entity
which directly or indirectly controls, is controlled by or is under common
control with a party to this Agreement. For purposes of this Agreement,
"control" with respect to an entity shall mean the legal power to direct or
cause the direction of the general management and policies of such entity.
I.3 "AGREEMENT" means this Supply and License Agreement.
I.4 "ANDA PRODUCT" means the products to be supplied by HMRI
to Rugby pursuant to the Contract Manufacturing Agreement.
I.5 "CONTRACT MANUFACTURING AGREEMENT" means that certain
Contract Manufacturing Agreement by and between HMRI and Rugby of even date
herewith.
I.6 "COST OF SALES" shall be determined using the accrual
basis of accounting in accordance with GAAP applied in a manner consistent with
Rugby's customary practices and includes (i) the Manufacturing Costs relating to
sucralfate; plus (ii) all royalties paid to third parties with respect to
sucralfate (other than to HMRI or its Affiliates pursuant to this Agreement).
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I.7 "FDA" means the United States Food and Drug Administration
or any successor entity thereto.
I.8 "FORCE MAJEURE" has the meaning set forth in Section 11.3
herein.
I.9 "GMP" means Good Manufacturing Practices as promulgated
under the Act at 21 CFR (chapters 210, 211, 600 and 610), as the same may be
amended or re-enacted from time to time.
I.10 "HMRI KNOW-HOW" means Know-How relating to the Process or
Product, known to HMRI.
I.11 "INITIAL TERM" means the period commencing on the date
hereof and ending on December 31, 2001, unless terminated earlier in accordance
with Section 4.2 herein.
I.12 "KNOW-HOW" means technical and other information
including without limitation ideas, concepts, inventions, discoveries, data,
formulae, specifications, procedures for experiments and tests and other
protocols, results of experimentation and testing, media formulations,
fermentation, recovery and purification techniques and assay protocols.
I.13 "MANUFACTURING COSTS" means with respect to sucralfate
manufactured in finished dosage form (SKU) pursuant to this Agreement or
manufactured in whole or part by a third party or third parties on behalf of
Rugby or its Affiliates, all documented costs paid to HMRI or its Affiliates or
to a third party or third parties, as the case may be, in order to complete
sucralfate in finished dosage form (SKU) for Rugby or its Affiliates, including,
costs related to the purchase of labels. With respect to sucralfate manufactured
in finished dosage form (SKU) by Rugby or its Affiliates, Rugby's or any of its
Affiliates Direct Material Costs, Direct Labor Costs and Overhead attributable
to sucralfate. "Direct Material Costs" shall mean reasonable costs incurred in
purchasing raw materials (without deduction for waste), including sales and
excise taxes imposed thereon, and all costs of packaging components. "Direct
Labor Costs" shall mean the reasonable cost of temporary and full-time employees
engaged in manufacturing activities who are directly involved in product
manufacturing and packaging and in quality assurance/quality control. "Overhead"
allocated to a Product means indirect costs associated with the production,
testing, packaging, storage and handling of product, including a reasonable
allocation of facilities' costs allocable to product manufacturing and
packaging, including electricity, water, sewer, waste disposal, property taxes
and depreciation of building and machinery. The allocation and calculation of
Rugby's or its Affiliates' Manufacturing Costs shall be made in accordance with
standard cost and reasonable cost accounting methods in accordance with GAAP,
applied in a manner consistent with Rugby's customary practices. Notwithstanding
the foregoing, Manufacturing Costs shall not include costs relating to
distribution expenses.
I.14 "NDA" means the new drug applications related to the
Products, submitted to the FDA under Sections 505, 507 or 512 of the Act and
applicable regulations related thereto.
I.15 "NET PROFIT" means with respect to sucralfate Net Sales
less Cost of Sales, determined using the accrual basis of accounting in
accordance with GAAP applied in a manner consistent with Rugby's customary
practices, excluding the impact of unusual and nonrecurring items.
I.16 "NET SALES" shall be determined using the accrual basis
of accounting in accordance with GAAP applied in a manner consistent with
Rugby's customary practices and means the
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actual gross invoice price for sales of * by Rugby or its Affiliates, less: (i)
any and all promotional allowance, rebates, quantity and cash discounts, and
other usual and customary discounts to customers accrued in the ordinary course
of business, in accordance with historical practice and GAAP and current
industry trends; (ii) amounts repaid or credited by reason of rejections or
returns of goods; (iii) retroactive price reductions; and (iv) *% of the
reasonable allowance for doubtful accounts accrued in the ordinary course of
business, in accordance with historical practice and GAAP.
I.17 "PROCESS" means the process or processes for the
production of Product.
I.18 "PRODUCTS" means generic versions of * in package sizes
(SKU) and finished dosage forms as set forth on Exhibit A attached hereto,
manufactured and distributed by HMRI on a brand name basis pursuant to its'
NDAs, and such other products as may be added pursuant to the terms of Section
3.3(a) herein.
I.19 "PROPRIETARY PRODUCTS" means the HMRI proprietary
Know-How relating to the Process or the Product with respect to the Products
listed on Exhibit B attached hereto (as the same may be amended from time to
time by HMRI with respect to new products added to the terms of this Agreement).
I.20 "SPECIFICATIONS" means the written specifications for
Product contained in the NDAs, as the same may be amended from time to time by
HMRI pursuant to the provisions of Section 7.2 herein.
I.21 "TAXES" has the meaning set forth in Section 3.16 herein.
I.22 "TERM" means the period including the Initial Term and
ending on the date of the termination of this Agreement in accordance with
Article IV herein.
I.23 "TERRITORY" means the United States and its possessions
and territories.
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* will be added to Exhibit A to this Agreement upon the effective date of
the launch of such product in generic form. Pricing for * will be provided
within fifteen (15) days after Rugby's provision of estimated volumes and
estimated pricing of such product.
ARTICLE II
GRANT OF LICENSE
II.1 GRANT OF LICENSE. Except as provided in Section 3.3(a),
HMRI hereby grants to Rugby an exclusive royalty free right and license to
promote, distribute, market and sell the Products in the Territory in
perpetuity; provided, however, notwithstanding the foregoing, Rugby acknowledges
and agrees the royalty free right and license to promote, distribute and sell
generic versions, in package sizes (SKU) and finished dosage forms, of * shall
be exclusive except as to one third party. Notwithstanding the foregoing, except
as otherwise specifically provided herein, HMRI has the exclusive right to
manufacture the Products. Except as provided in Section 3.3(a), during and after
the Term, HMRI and its Affiliates agree not to promote, distribute, market or
sell the Products in the Territory. Except upon abandonment of a Product by
Rugby in accordance with Section 3.3(a)(i), upon expiration of the Term or
removal of a Product from this Agreement, Rugby shall have the right to
manufacture the generic equivalent of a Product under its own abbreviated new
drug application or, in accordance with Section 3.3(c) hereof, under HMRI's NDA.
II.2 RIGHT TO SUBLICENSE. Rugby shall have the right to grant
sublicenses under the license granted by HMRI to Rugby pursuant to Section 2.1
to Affiliates of Rugby and, with the prior written
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consent of HMRI, to entities which are not Affiliates of Rugby. Rugby will
provide a copy of all such sublicenses to HMRI.
II.3 RIGHT OF FIRST REFUSAL. In the event HMRI determines (in
its sole discretion) to launch a generic version of *, HMRI will provide Rugby
the right of first refusal on terms proposed by HMRI in good faith as terms
which would be acceptable to an unaffiliated third party, upon which HMRI would
supply a generic version of * (the "Terms"). Concurrently with the delivery of
the Terms, HMRI shall deliver to Rugby all reasonably sufficient information in
its possession relating to the sale of * reasonably requested by Rugby and
required for Rugby to determine whether to accept the Terms. Rugby shall keep
the Terms confidential and shall have ten (10) business days to accept such
Terms, which acceptance shall be in writing in accordance with the provisions of
Section 11.1 herein. In the event Rugby does not accept the Terms within such
time period, HMRI may offer such Terms to any other party and may negotiate with
another party ready, willing and able to enter into an agreement; provided,
however, HMRI may not enter into an agreement with any other party on terms and
conditions less favorable in the aggregate to HMRI than the Terms (such less
favorable in the aggregate terms and conditions being referred to as the "Other
Party Terms"), without first offering to enter into an agreement with Rugby on
the Other Party Terms. Upon receipt of such offer, Rugby shall keep the Other
Party Terms confidential and shall have five (5) business days to accept the
Other Party Terms, which acceptance shall be in writing in accordance with the
provisions of Section 11.1 herein. In the event Rugby does not accept such Other
Party Terms within such time period, HMRI may enter into an agreement with any
other party on terms and conditions at least as favorable in the aggregate to
HMRI as the Other Party Terms; provided, further, that in the event that HMRI
offers to enter into an agreement with any other party with respect to a generic
version of * on terms and conditions less favorable in the aggregate to HMRI
than the then existing Other Party Terms, HMRI shall first offer such terms and
conditions to Rugby and Rugby shall keep such terms and conditions confidential
and shall have five (5) business days to accept such terms and conditions
offered by HMRI, which acceptance shall be in writing in accordance with the
provisions of Section 11.1 herein. The provisions of this Section 2.3 shall
terminate upon HMRI entering into an agreement with another party with respect
to a generic version of *, in accordance with this Section 2.3. Notwithstanding
the foregoing, if the other party accepting the Terms or the Other Party Terms,
as the case may be, is an Affiliate of HMRI, which in lieu of launching a
generic version of *, transfers such distribution rights to a third party and
such transfer is on terms less favorable in the aggregate to the Terms or the
Other Party Terms, as the case may be, such new terms shall be offered to Rugby.
Upon receipt of such offer, Rugby shall keep such terms confidential and shall
have five (5) business days to accept such terms, which acceptance shall be in
writing in accordance with the provisions of Section 11.1 herein.
II.4 ACTIVE INGREDIENT SUPPLY AGREEMENT. Upon the reasonable
written request of Rugby, HMRI agrees to enter into discussions with Rugby
regarding the terms and conditions upon which HMRI and Rugby could enter into an
active ingredient supply agreement; provided, however, that Rugby acknowledges
and agrees that HMRI is under no obligation to enter into such active ingredient
supply agreement.
ARTICLE III
MANUFACTURE, PURCHASE AND
SALE OF PRODUCT
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III.1 PURCHASE AND SALE. Pursuant to the terms and conditions
of this Agreement, HMRI agrees to manufacture for Rugby, during the Term, the
Products for sale by Rugby in the Territory. During the Term, Rugby agrees to
purchase all of its requirements for the Products for sale in the Territory from
HMRI. HMRI agrees to use commercially reasonable efforts to meet Rugby's demand
for the Products and if there is a shortage in capacity, production capacity
will be allocated proportionately among all parties (including HMRI and its
Affiliates) based upon each party's required production over the previous twelve
months. HMRI may subcontract with third parties for the manufacture or packaging
of Products to fulfill its obligations hereunder.
III.2 SHELF LIFE. HMRI will ship Product to Rugby with a shelf
life at least equal to the requisite regulatory shelf life for such Product
minus * months; provided, however, in the event a generic version of * is added
as a Product and becomes subject to the terms of this Agreement, HMRI will ship
a generic version of * to Rugby with a shelf life at least equal to the
requisite regulatory shelf life for * minus * months.
III.3 PRODUCT EXPANSION OR ABANDONMENT; SALE OF PRODUCT.
(a) Product Expansion or Abandonment. Exhibit A attached
hereto sets forth the initial list of Products subject to the terms of this
Agreement, and may only be amended from time to time as provided in this Section
3.3. Additional generic versions of products in finished dosage forms and in
package sizes (SKU) pursuant to HMRI new drug applications may be added to the
terms of this Agreement only upon the written agreement of HMRI and Rugby;
provided, however, that to the extent that HMRI does not currently have the FDA
approvals necessary to manufacture, market, distribute and sell any of the
Products in package sizes of 500s and 1,000s, upon the request of Rugby, HMRI
agrees to promptly take all actions reasonably necessary (provided that Rugby is
responsible for all costs and expenses related thereto) to obtain all required
consents and approvals from the FDA in order to manufacture, market and
distribute each of the Products in such package sizes as requested by Rugby and,
upon HMRI's receipt of the required FDA approvals necessary to manufacture,
market, distribute and sell such Products in such requested package sizes, such
Products in such package sizes shall be deemed to be a "Product" pursuant to the
terms of this Agreement. HMRI may abandon a Product at any time upon prior
written notification to Rugby due to statutory, regulatory or similar
legislative concerns. In the event the statutory, regulatory or similar
legislative concerns are alleviated with respect to a Product and HMRI chooses
to again manufacture such Product, such Product will be included again in this
Agreement and again become subject to this Agreement if Rugby consents in
writing to such inclusion; provided, however, in the event HMRI chooses not to
manufacture such Product, HMRI agrees to transfer the manufacturing rights in
accordance with the provisions of Section 3.3(c) herein with respect to such
Product (except with respect to the Proprietary Products) to Rugby. In addition,
Product may be abandoned by either party hereto upon two (2) years written
notification by such party to the other, which written notification shall
specify the package size (SKU) and finished dosage form to be abandoned;
provided, however, unless otherwise agreed to by the parties, Product may not be
abandoned until January 1, 2000; provided, further, that * in finished dosage
form may be abandoned only upon the written agreement of both parties. On or
after January 1, *, Product may be abandoned (i) by Rugby or HMRI upon two (2)
years prior written notice upon a determination of senior management of Rugby or
HMRI, as the case may be, to discontinue sales or the manufacturing of such
Product, as the case may be, or (ii) by Rugby upon one (1) year prior written
notice (which notice may be delivered at any time after January 1, *) upon
approval or acquisition of an abbreviated new drug application for such Product
by Rugby or its Affiliates. If a Product is subsequently abandoned pursuant to
the terms
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of this Agreement, it will no longer be considered a Product or be subject to
this Agreement; provided, however, in the event that HMRI abandons a Product
pursuant to Section 3.3(a)(i) and determines to manufacture such Product again,
HMRI will provide Rugby the opportunity to distribute and sell such Product, and
if Rugby consents in writing to such inclusion, such Product will be included
again in this Agreement and again become subject to this Agreement. Rugby
acknowledges that the exclusive royalty right and license to promote,
distribute, market and sell a particular Product shall terminate upon an
abandonment of such Product by Rugby. Rugby shall be deemed to have abandoned a
Product if its forecasted purchases of such Product is equal to zero for four
(4) consecutive short-term forecasts (under Section 3.5(b) hereof) with respect
to the first three (3) months of each such forecast.
Subject to the availability of active ingredients and
manufacturing capacity, in the event HMRI abandons a Product (except abandonment
due to statutory, regulatory or similar legislative concerns) or Rugby
terminates the Agreement pursuant to the provisions of Section 4.2(a)(i) or (ii)
herein, then (i) upon six (6) months' prior written notice in the case of
abandonment of a Product, or (ii) on or prior to the termination of this
Agreement by Rugby pursuant to the provisions of Section 4.2(a)(i) or (ii)
herein, Rugby may purchase up to * supply of such abandoned Product (or Products
in the case of termination of the Agreement), which supply is based upon the
amount of Product purchased by Rugby or its subsidiaries over the previous *
months. Any such purchase shall not increase the obligations of HMRI under
Sections 3.10(b) and (c) of this Agreement. The timing for delivery of such
Product shall be reasonably determined by HMRI and shall be based upon the
availability of active ingredient and available manufacturing capacity.
(b) Sale of NDA. In the event HMRI determines to sell an NDA
to a third party, HMRI shall notify Rugby in writing of such sale (the "NDA Sale
Notification"), which notification shall specify the NDA to be sold and the
package sizes (SKU) and finished dosage forms of Product manufactured pursuant
to such NDA. As a condition to the sale of the NDA to such third party, HMRI
shall retain such rights sufficient to enable it to, or shall cause such third
party to, license such Product to Rugby on the terms and conditions set forth in
this Agreement. In addition, to the extent that HMRI transfers the manufacturing
responsibility of Product manufactured pursuant to such NDA, as a condition of
such sale, HMRI shall cause such third party to supply such Product, in package
size (SKU) and finished dosage form manufactured pursuant to such NDA, to Rugby
on the terms and conditions set forth in this Agreement; provided, however,
prior to December 31, *, HMRI will guarantee the continued supply to Rugby of
Product(s) manufactured pursuant to such NDA through December 31, * in
accordance with the terms of this Agreement; provided, further, on or subsequent
to January 1, *, Rugby may in its discretion remove such Product(s) from this
Agreement by providing written notice to HMRI within thirty (30) days after the
receipt of an NDA Sale Notification, and thereafter such Product(s) shall no
longer be considered a Product or be subject to this Agreement. In any event,
upon the sale of an NDA by HMRI to a third party in which HMRI transfers the
manufacturing responsibility of Product manufactured pursuant to such NDA, the
package sizes (SKU) and finished dosage forms of Product manufactured pursuant
to such NDA shall no longer be considered a Product or be subject to this
Agreement.
(c) Transfer of Technology. In the event (i) HMRI determines
to abandon a Product pursuant to Section 3.3(a) herein, (ii) HMRI chooses not to
manufacture a Product previously abandoned due to statutory, regulatory or
similar legislative concerns after the statutory, regulatory or similar
legislative concerns are alleviated pursuant to Section 3.3(a), (iii) HMRI
elects not to renew the Agreement in accordance with Section 4.1 herein, or (iv)
Rugby terminates this Agreement pursuant to the provisions of Section 4.2
herein, HMRI agrees to transfer the manufacturing rights (including the HMRI
Know-How relating thereto) to such Product(s) to Rugby as soon as reasonably
practicable after the date of such event;
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provided, however, HMRI shall have no obligation to transfer such manufacturing
rights to the Proprietary Products. In the event the manufacturing rights to a
Product are transferred to Rugby, until such time as a second manufacturing site
is qualified in connection with such Product, HMRI will provide assistance
reasonably requested by Rugby for the transition of such manufacturing rights
and related HMRI Know-How, including taking all reasonable steps to allow Rugby
to qualify a second manufacturing site for such Product at a site designated by
Rugby pursuant to the NDA and consent by HMRI to the manufacture by Rugby or its
Affiliate of such Product at such site, and Rugby will be responsible for all of
HMRI's reasonable out-of-pocket costs in connection with the transfer of such
manufacturing rights and related HMRI Know-How, which expenses will be
reimbursed by Rugby within thirty (30) days after the completion of such
transfer.
III.4 LABELING AND PACKAGING. Rugby shall be responsible for
all costs of developing, packaging and labeling for the Product, and shall
provide HMRI all art work to be applied to each Product, which shall be
consistent with the FDA approved labeling for the Products. Rugby shall provide
such information pursuant to this Section 3.4 to HMRI a sufficient period of
time in advance of delivery requirements for the Products set forth in this
Agreement.
III.5 FORECASTS.
(a) Long-Range Forecasts. Upon execution of this Agreement and
by October 1 of each year thereafter, Rugby shall provide HMRI with a forecast
of the quantities of each Product, by package size (SKU) and finished dosage
form, that Rugby intends to order during the three (3) year period commencing
with the following calendar year. The parties acknowledge that such forecasts
shall represent reasonable best faith estimates, not purchase commitments.
(b) Short-Term Forecasts. Upon execution of this Agreement,
and thereafter at least thirty (30) days prior to the first (1st) day of each
succeeding calendar quarter, Rugby will furnish HMRI with a rolling forecast of
the quantities of each Product, by package size (SKU) and finished dosage form,
that Rugby intends to order during the twelve (12) month period commencing with
that calendar quarter, stipulating periodic delivery requirements. The first
three months of such forecast shall constitute a binding commitment of Rugby to
purchase such quantities evidenced by purchase orders to HMRI pursuant to
Section 3.6 herein. In the event it is reasonably necessary for HMRI to purchase
active ingredient for Product beyond the binding commitment of Rugby, HMRI may
request written authorization from Rugby regarding such purchase. In the event
Rugby authorizes such purchase or authorizes a portion of such purchase, Rugby
will be responsible for the costs of the active ingredient authorized to be
purchased which is not used by HMRI in the manufacture of Product or other
products. In the event Rugby does not authorize such purchase, HMRI shall not be
required (but will use commercially reasonable efforts) to meet Rugby's
forecasts or orders with respect to the Products manufactured with such active
ingredient. Rugby will be required to purchase that percentage of the quantity
of each Product specified in the short-term forecast for successive quarters as
follows:
Percentage of Product indicated
Three Month Period in the forecast that Rugby is
of the forecast is required to purchase
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First 100%
Second 50% over the next three quarters
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III.6 ORDERS. Rugby acknowledges that each Product is produced
in full lot quantities, as set forth on Exhibit A attached hereto. At least *
days prior to the delivery date specified in each respective order, Rugby shall
place its purchase order with HMRI for each Product in full lot quantities, by
package size (SKU) and finished dosage form. Unless otherwise specified in
writing, all orders placed by Rugby with HMRI hereunder shall be addressed as
follows:
Hoechst Xxxxxx Xxxxxxx, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Attn: Xx. Xxx Xxxxxxxxx
Such orders shall specify in each three month period an
aggregate quantity of each Product, by package size (SKU) and finished dosage
form, which is at least as great as the amount of such Product required to be
purchased by Rugby pursuant to Section 3.5. HMRI may reject any portion of an
order which exceeds *% of the most current forecast underlying such order, or
may reject any order which (i) except as otherwise provided in Section 3.14
regarding a good faith payment dispute by Rugby, is received at a time when
Rugby is delinquent in payment hereunder or (ii) cannot be filled due to
circumstances arising under Section 11.3. Rugby acknowledges it will make good
faith forecasts of the quantities of each Product, by package size and finished
dosage form, that Rugby intends to order and will only place orders for Product
to the extent reasonably sufficient to support its inventory safety stock.
Subject to availability of active ingredient, HMRI will use its reasonable
commercial efforts to supply orders which exceed *% of the most current forecast
underlying such order. All rejections by HMRI shall be in writing and delivered
to Rugby within five (5) business days of HMRI's receipt of the order. HMRI
shall deliver against each such order in accordance with Section 3.7 herein.
Rugby shall be obligated to purchase all such Product, by package size (SKU) and
finished dosage form, ordered and delivered by the delivery date specified in
Rugby's purchase order, provided that such Product meets the Specifications. In
no event shall the use of any form of order acknowledgment, purchase order,
shipping document, confirmation or waybill be deemed to modify or substitute for
the terms and conditions of this Agreement. All such documents shall be subject
to, and shall be deemed to incorporate, the terms and conditions of this
Agreement. The parties acknowledge that the binding commitments of Rugby to
purchase Product in accordance with the rolling forecast of Rugby in effect on
the date hereof, which forecast is attached hereto as Exhibit C, will be binding
on the parties after the execution of this Agreement and such Products shall be
purchased pursuant to the terms of this Agreement.
III.7 DELIVERY. Delivery terms shall be F.O.B. HMRI's
manufacturing facility. HMRI shall ship Product in accordance with Rugby's
purchase order form or as otherwise directed by Rugby in writing. Title to any
Product purchased by Rugby shall pass to Rugby upon the earlier of (i) a common
carrier accepting possession or control of such Product or (ii) the passage of
such Product from the loading dock of HMRI's facility to Rugby or its agent.
III.8 SHORTAGES/ REJECTED GOODS.
(a) Shortages. Rugby shall notify HMRI in writing of any
shortage in quantity of any shipment of Product within the earlier of (i) ten
(10) business days after discovery of such shortage and (ii)
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the shelf life of such Product, but only to the extent that such Product is in
the possession of Rugby. Such notification shall specify the package size (SKU)
and finished dosage form of such Product. Rugby shall notify HMRI in writing of
any shortage in quantity of any shipment of Product that is not within its
possession within the earlier of (i) ten (10) business days after discovery and
(ii) the shelf life of such Product, and shall provide documentation reasonably
satisfactory to HMRI demonstrating such shortage existed while such Product was
in the possession of Rugby. In the event of such shortage (and the reasonable
satisfaction in HMRI's determination of documentation if Product is not in the
possession of Rugby), HMRI shall make up the shortage within seven (7) business
days if replacement Product stock is available, or, if no such replacement stock
is available, as soon as reasonably practicable after receiving such notice, at
no additional cost to Rugby.
(b) Rejected Goods. Rugby shall notify HMRI in writing of any
claim relating to Product that fails to meet the Specifications (other than for
reasons of storage, handling, or shipping by Rugby, its Affiliates, customers
and carriers) within the earlier of (i) ten (10) business days after discovery
that such Product so fails to meet the Specifications and (ii) the shelf life of
such Product, which notification shall specify the package size (SKU) and
finished dosage form of such Product. Subject to the provisions of Section
3.8(c) herein, HMRI shall replace such Product that fails to meet the
Specifications within ten (10) business days at no additional cost to Rugby. The
provisions of this Section 3.8(b) shall not apply to Product damaged in transit.
(c) Disputes. In the event of a conflict regarding whether
Product fails to meet the Specifications which HMRI and Rugby are unable to
resolve, a sample of such Product shall be submitted by Rugby to an independent
laboratory reasonably acceptable to both parties for testing and the test
results obtained by such laboratory shall be final and controlling. The fees and
expenses of such laboratory testing shall be borne entirely by the party against
whom such laboratory's findings are made. In the event the test results indicate
that the Product in question fails to meet the Specifications, HMRI shall
replace such Product at no additional cost to Rugby within ten (10) business
days after receipt of such results. In the event the test results indicate that
the Product in question does meet the Specifications, Rugby shall pay all
additional shipping and transportation costs incurred as a result of the
conflict.
(d) Sole Remedy. The provisions of Sections 3.8(a) in the case
of shortage in quantity of any shipment of Product, and except as otherwise
provided in Section 9.2(c) herein, Sections 3.8(b) and (c), in the case of
Product that fails to meet the Specifications, shall be the sole remedy
available to Rugby with respect to any Shortage in quantity of any shipment of
Product, or Product that fails to meet the Specifications, as the case may be.
III.9 CAPACITY ALLOCATION. In the event HMRI, upon receiving a
forecast pursuant to Section 3.5 or a firm order pursuant to Section 3.6, is or
anticipates that it will be unable to meet such forecast or firm order, either
in whole or in part, then HMRI shall give written notice of such inability to
Rugby within ten (10) days of receipt of such forecast or firm order. HMRI and
Rugby shall meet within ten (10) days of such written notice to consider
alternatives for meeting Rugby's requirements for Product, including but not
limited to the sharing of the cost to expand HMRI's manufacturing capacity.
III.10 FAILURE TO SUPPLY
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(a) At any time prior to the second anniversary of this
Agreement, as liquidated damages for HMRI's inability to supply a Product under
this Agreement or an ANDA Product under the Contract Manufacturing Agreement, if
Rugby makes a firm order for Product in accordance with Section 3.6 of this
Agreement or an ANDA Product in accordance with Section 2.7 of the Contract
Manufacturing Agreement (for purposes of this Section 3.10(a), such firm order
may be made without regard to the *% forecast limitation or the limitation of
Rugby to place orders only to the extent reasonably sufficient to support its
inventory safety stock) and HMRI is unable to supply any Product or ANDA Product
to Rugby for any reason whatsoever (including a Force Majeure), or if a Product
is abandoned by HMRI due to statutory, regulatory or legislative concerns, HMRI
shall pay Rugby the following amount for each day of such failure: *. During any
period that HMRI is making the payments to Rugby pursuant to this Section 3.10,
Rugby shall pay HMRI the prices set forth in * to this Agreement for the
purchase of Product and the prices set forth in * of the Contract Manufacturing
Agreement for the purchase of ANDA Product. All amounts owed by HMRI pursuant to
this Section 3.10(a) will be paid forty-five (45) days after the date of the
onset of such inability to supply and each forty-five (45) days thereafter
during the period of such inability to supply. Any rectification of the
inability to supply a Product or an ANDA Product shall be effective as of the
first day of the next calendar quarter; the parties shall jointly agree on the
amount of such credits remaining for the purchase of Product pursuant to Section
3.11 herein or ANDA Product pursuant to Section 2.12 of the Contract
Manufacturing Agreement after the effective date of the rectification of the
inability to supply.
(b) At any time prior to the * anniversary of this Agreement,
if Rugby makes a firm order for Product in accordance with Section 3.6 and HMRI
is unable to deliver such Product to Rugby due to a Force Majeure (as defined in
Section 11.3 herein), or if a Product is abandoned by HMRI due to statutory,
regulatory, or legislative concerns due to a Force Majeure, for a period of up
to * from the date of such failure to supply, HMRI will reimburse Rugby for an
amount equal to Rugby's *. If such inability to meet a firm order is partial,
HMRI shall deliver against firm orders such quantities of such Product as are
available. Rugby acknowledges that it shall use its commercially reasonable good
faith efforts to purchase replacement Product at the lowest prices available.
The provisions of Sections 3.10(a) and (b) shall be Rugby's sole remedy for
HMRI's inability to deliver a Product to Rugby due to a Force Majeure in
accordance with this Section 3.10(b).
(c) During the Initial Term, if Rugby makes a firm order for
Product in accordance with Section 3.6 and HMRI is unable to deliver such
Product to Rugby in accordance with the terms of this Agreement due to any
reason other than a Force Majeure, or if a Product is abandoned by HMRI due to
statutory, regulatory, or legislative concerns due to any reason other than a
Force Majeure, for a period of up to * from the date of such failure to supply,
HMRI will reimburse Rugby for an amount equal to Rugby's *. If such inability to
meet a firm order is partial, HMRI shall deliver against firm orders such
quantities of such Product as are available. Rugby acknowledges that it shall
use its commercially reasonable good faith efforts to purchase replacement
Product at the lowest prices available. The provisions of Sections 3.10(a) and
(c) shall be Rugby's sole remedy for HMRI's inability to deliver a Product to
Rugby in accordance with this Section 3.10(c), except with respect to a willful
breach by HMRI that results in a material adverse effect to Rugby of the value
of this Agreement taken as a whole.
(d) All amounts owed to Rugby by HMRI pursuant to this Section
3.10 shall bear interest in the same manner as amounts owed by Rugby to HMRI
pursuant to Section 3.14. Rugby shall be
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entitled to set-off amounts owed pursuant to this Section 3.10 for which a
credit acknowledgment has been issued by HMRI against purchases of Product.
III.11 PRODUCT PRICE. The pricing for the Products is
determined in accordance with HMRI's costs practices (on a capacity basis), as
set forth in the HMRI Product Costing Manual, according to generally accepted
accounting principles. The initial manufacturing costs for the Products, by
package size (SKU) and finished dosage form FOB at HMRI's manufacturing site is
set forth in * and shall be adjusted January 1 of each year during the Term at
the rate of 3.5% annually for inflation (except active ingredient, which at all
times shall be at *. In the event either party is able to procure active
ingredient at a lesser price, the parties shall work together (to the extent
permitted pursuant to contractual obligations of the parties) to procure such
lower priced active ingredient. Except as otherwise provided in Section 3.10,
the manufacturing costs for the Products from the date hereof through the *
anniversary of this Agreement shall be as follows: * . As of the * anniversary
of this Agreement and at all times thereafter, the pricing for the Products
shall be as set forth in * of Exhibit A to this Agreement and in addition shall
include a manufacturing profit to HMRI of *% (except for sucralfate, which after
the * anniversary of this Agreement will be supplied at cost and will have the
profit split as set forth in Section 3.12). If there is any dispute regarding
the provisions of this Section 3.11, such dispute shall be resolved in
accordance with the provisions of Article 10 herein.
III.12 PROFIT SPLIT RELATED TO SUCRALFATE. Beginning January
1, 1999 and continuing in perpetuity, Rugby shall make payments to HMRI equal to
*% of the Net Profit of sucralfate, based upon the quarterly periods ended March
31, June 30, September 30 and December 31. After January 1, 1999 through the
second anniversary of this Agreement, the profit split for sucralfate shall be
calculated as if purchased at the cost set forth in * Exhibit A to this
Agreement. Rugby shall make such quarterly payments to HMRI in accordance with
the provisions of Section 3.14 on or before forty-five (45) days after the end
of each such calendar quarter. Payment to HMRI shall be accompanied by
reasonable detail and documentation regarding the Net Profit of sucralfate for
such quarter. Profit split payments made to HMRI shall reflect the net profit
(as calculated in the same manner as the calculation of Net Profit) received on
the bundled sale of sucralfate, multiplied by the following fraction, the
numerator of which is equal to the number of units of sucralfate multiplied by
the standard invoice unit price thereof, and the denominator of which is equal
to the sum of the number of units of each product (including sucralfate) or
service included in such bundled sale multiplied by the respective standard
invoice unit price thereof.
III.13 ACCESS TO RECORDS.
(a) Each party shall maintain complete and accurate books and
records of account relating to the manufacturing costs of Product, and sale of
sucralfate, as the case may be. Each party shall have the right during the term
of this Agreement and for one year thereafter (and, in the case of HMRI, at any
time while profit split payments with respect to sucralfate are being made, and
for one year after the termination of such profit split payments) to examine the
relevant books and records of the other party relating to the manufacturing
costs of Products, and sale of sucralfate, as the case may be, during normal
business hours and upon reasonable advance written notice to verify the
correctness of the calculations of the cost of goods of the Products, or the
profit split of sucralfate, as the case may be. Each party shall cooperate with
the other with respect to all reasonable requests made with respect to such
inspection.
(b) Each party shall have three (3) years after receipt of
payments pursuant to this Agreement or receipt of information relating to the
manufacturing costs of Products, as the case may be (the
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"Dispute Period") to dispute the amount of any such payment pursuant to this
Agreement or the manufacturing costs of Products, as the case may be (a
"Dispute"). If a party does not give written notice of a Dispute within the
Dispute Period to the other (a "Dispute Notice"), the amount of such payment or
the manufacturing costs, as the case may be, shall be deemed to have been
accepted and agreed to by the other and shall be final and binding upon the
parties hereto. If a party has a Dispute, it shall promptly send the other party
a Dispute Notice within the Dispute Period, setting forth in reasonable detail
the elements and amounts with which it disagrees. Within thirty (30) days after
delivery of such Dispute Notice, the parties hereto shall attempt to resolve
such Dispute and agree in writing upon the final amount of the disputed item. No
dispute shall be made with respect to any payments made pursuant to Section 3.12
or the manufacturing costs of the Products, as the case may be, that have
previously been disputed by a party in a review of the records of a party
relating the calculation of payments pursuant to Section 3.12 or the
manufacturing costs of the Products, as the case may be.
(c) If the parties are unable to resolve any Dispute within
the thirty (30) day period after receipt of a Dispute Notice, the New York
office of the certified public accounting firm of Xxxxxx Xxxxxxxx LLP (the
"Arbitrating Accountant") shall be engaged as arbitrator hereunder to settle
such Dispute as soon as practicable. In the event Xxxxxx Xxxxxxxx LLP is
unwilling or unable to serve as the Arbitrating Accountant, the parties hereto
shall select by mutual agreement another nationally recognized certified public
accounting firm, who is not rendering (and during the preceding two-year period
has not rendered) services to either HMRI, Rugby, or any of their respective
Affiliates, to serve as the Arbitrating Accountant. In connection with the
resolution of any Dispute, the Arbitrating Accountant shall have access to all
documents, records, work papers, facilities and personnel necessary to perform
its function as arbitrator. The arbitration before the Arbitrating Accountant
shall be conducted in accordance with the commercial arbitration rules of the
American Arbitration Association. The Arbitrating Accountant's award with
respect to any Dispute shall be final and binding upon the parties hereto, and
judgment may be entered on the award. Each party shall pay one-half of the fees
and expenses of the Arbitrating Accountant with respect to any Dispute.
III.14 PAYMENT. All payments required by this Agreement shall
be made in United States Dollars. All invoices are strictly net and payment must
be received within forty-five (45) days from the date of invoice. The date of
each invoice shall be the date of shipment of products. Payment shall be made
without deduction, deferment, set-off, lien or counterclaim of any nature, other
than for rejected or returned goods, or credits issued by HMRI pursuant to
Section 3.10 herein, in each case for which a credit acknowledgment has been
issued by HMRI. Time for payment shall be of the essence. Unless Rugby notifies
HMRI in writing of a good faith dispute, with respect to payments not received
within such forty-five (45) days, or within forty-five (45) days after the end
of each calendar quarter with respect to payments pursuant to Section 3.12
herein, interest shall accrue on any amount overdue, at the rate of prime plus
2%, such interest to begin accruing on a daily basis from the date of invoice,
and shall accrue both before and after judgment; provided, however, in the case
of a good faith dispute regarding payment resolved to be due and not paid within
three (3) business days after such resolution, interest shall accrue on any
amount overdue, at the rate of prime plus 2%, such interest to begin accruing on
a daily basis from the date such payment becomes overdue, and shall accrue both
before and after judgment; provided, further, in the case of a good faith
dispute regarding payment, Rugby may in its discretion determine to pay such
amounts disputed to be overdue and in the event amounts are finally determined
not to be due by Rugby, HMRI shall repay such excess amounts determined not be
due to Rugby, and interest shall accrue on any such amount, at the rate of prime
plus 2%, such interest to begin accruing on a daily basis from the date such
disputed payment was received by HMRI.
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With respect to defaults of payment not cured within ten (10)
business days after receipt of written notice from HMRI to Rugby, HMRI shall, in
its sole discretion, and without prejudice to any other of its accrued rights,
be entitled to suspend the provision of the Products or to treat the Agreement
as repudiated by notice in writing to Rugby exercised at any time thereafter;
provided, however, a good xxxxx xxxx fide dispute by Rugby regarding a payment
pursuant to this Agreement shall not be considered a default of payment so long
as Rugby notifies HMRI in writing of such dispute within the later of five (5)
business days from the date of invoice or the date of payment. Rugby
acknowledges it will notify HMRI promptly upon a determination that a dispute
exists regarding a payment.
III.15 ADVERTISING/MARKETING/SALES COSTS AND PRODUCT PRICING.
Rugby shall be responsible for all advertising, marketing and sales costs
associated with Product distribution. Rugby will have complete authority for all
pricing decisions for the Product. Rugby shall not alter the Products and shall
not recommend or knowingly sell the Products for any uses except as described in
the FDA approved Product labeling.
III.16 TAXES. Rugby shall reimburse HMRI for all tariffs,
duties and excise, sales or use, value added or other taxes or levies
(collectively, "Taxes") that are paid by HMRI that are directly related to the
manufacture and sale to Rugby of the Products and which are not otherwise
included in the product pricing set forth in Section 3.11 herein.
Notwithstanding the foregoing, Rugby shall have no reimbursement obligations
pursuant to this Section 3.16 to the extent that (i) such Taxes are based on
HMRI's net income or (ii) such Taxes are recoverable or offset by HMRI, in whole
or in part, as a credit, rebate, deduction or otherwise.
ARTICLE IV
TERM AND TERMINATION
IV.1 TERM. The Initial Term of this Agreement will commence
upon the execution of this Agreement and will continue until December 31, 2001,
unless terminated earlier in accordance with the provisions of Section 4.2
herein. Thereafter, this Agreement will automatically continue until either
party provides not less than two years' prior written notification to the other
that this Agreement will terminate, which notification shall specify the date
upon which this Agreement shall terminate (which in any event shall not be prior
to December 31, 2001). If HMRI so notifies Rugby that this Agreement will
terminate, HMRI will, as soon as reasonably practicable during the two-year
notice period, take all reasonable actions to allow Rugby to manufacture the
Products in accordance with Section 3.3(c ) herein, except with respect to the
Proprietary Products.
IV.2 EARLY TERMINATION.
(a) Either Rugby or HMRI, as the case may be, may terminate
this Agreement forthwith by notice in writing to the other party upon the
occurrence of any of the following events:
(i) if the other party commits a material breach of
this Agreement, other than a payment default, which in the
case of a breach capable of remedy shall not have been
remedied within thirty (30) days of the receipt by the other
party of a notice identifying the
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breach and requiring its remedy or such longer time as the
party in breach may demonstrate to the other party is
necessary to remedy the breach using its reasonable efforts to
do so; or
(ii) if the other party ceases for any reason to
carry on business or convenes a meeting of its creditors or
has a receiver or manager appointed in respect of all or
substantially all of its assets or is the subject of an
application for an administration order or of any proposal for
a voluntary arrangement or enters into liquidation (whether
compulsorily or voluntarily) or undergoes any analogous act or
proceedings under foreign law; or
(iii) the enactment of any law, order or regulation
by a governmental unit that would render it impossible for the
other party to perform its obligations hereunder. In the event
Rugby terminates this Agreement pursuant to this Section 4.2,
HMRI will take all reasonable actions to allow Rugby to
manufacture the Products in accordance with Section 3.3(c )
herein, except with respect to the Proprietary Products.
IV.3 CONSEQUENCES OF TERMINATION AND SURVIVAL. Termination of
this Agreement for whatever reason shall not affect the accrued rights of either
HMRI or Rugby arising under or out of this Agreement. The obligations under
Section 2.1 (Grant of License), Section 3.3(a) (second paragraph only), Section
3.3(c) (Technology Transfer), Section 2.3 (Right of First Refusal), Section
3.10(a), Section 3.10(b) or (c) (in the case of Section 3.10(b) or (c),
termination of this Agreement by Rugby pursuant to Section 4.2(a) herein),
Section 3.12 (Profit Split Relating to Sucralfate), Section 3.13 (Access to
Records), Article 6 (Product Recalls), Article 7 (Warranties), Article 8
(Nondisclosure and Confidentiality), Article 9 (Indemnification and Insurance),
Article 10 (Dispute Resolution) or any other provision which expressly or by
implication is intended to survive expiration or termination shall survive
expiration or termination of this Agreement or of any extensions thereof.
IV.4 ACCRUED OBLIGATIONS. In the event that this Agreement is
terminated by HMRI pursuant to the provisions of Section 4.2 herein, Rugby shall
pay to HMRI, (i) all amounts outstanding and remaining to be paid for Product
supplied prior to the termination, (ii) all binding amounts for Product
forecasted pursuant to Section 3.5 herein or ordered pursuant to Section 3.6
herein and (iii) an amount to compensate HMRI for active ingredient that HMRI is
contractually committed to purchase at the time of such termination pursuant to
authorization received from Rugby in accordance with Section 3.5(b) herein which
is not subsequently used by HMRI to manufacture any Product or any other
product.
ARTICLE V
CERTIFICATES AND ACCESS AND REGULATORY MATTERS
V.1 CERTIFICATES OF ANALYSIS. HMRI shall perform, or cause to
be performed, sample tests on each lot of Product manufactured pursuant to this
Agreement before delivery to Rugby. Each test report shall set forth the items
tested, Specifications and test results in a certificate of analysis, containing
the types of information which shall have been approved by mutual agreement of
the parties, for each lot delivered. HMRI shall send, or cause to be sent, such
certificates to Rugby prior to delivery of each lot unless otherwise agreed.
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V.2 CERTIFICATES OF MANUFACTURING COMPLIANCE. HMRI shall
provide, or cause to be provided, for each lot of Product manufactured pursuant
to this Agreement, a certificate of manufacturing compliance, containing the
types of information which shall have been approved by mutual agreement of the
parties, which will certify that the Product was manufactured in accordance with
the Specifications and the GMP. HMRI shall advise Rugby promptly if an
authorized agent of the FDA or other governmental regulatory agency visits any
of HMRI's manufacturing facilities, or the facilities where the Products are
being manufactured, concerning the Products. HMRI shall furnish to Rugby all
material information supplied to, or supplied by, the FDA or other governmental
regulatory agency, including the Form 483 observations and responses, to the
extent such information relates to the Products (or the ability of HMRI to
supply such Product), within five (5) business days of HMRI's receipt of such
information or delivery of such information, as the case may be.
V.3 CHANGES. HMRI shall provide written notification to Rugby
a reasonable time in advance prior to changing the critical specified raw
materials, packaging materials, their source, analytical test procedures or
critical manufacturing conditions or manufacturing equipment used in the
manufacture of Product.
V.4 ACCESS TO FACILITIES.
(a) Rugby Access. Upon the reasonable prior written request
of Rugby, Rugby shall have the right to inspect those portions of the
manufacturing and testing facilities of HMRI where Products are being
manufactured or tested, as the case may be, during regular business hours, to
ascertain compliance with GMPs. If the FDA or other applicable governmental
regulatory agency asserts any notice to the effect that HMRI has failed to
comply with any law or regulation in connection with the manufacture of
Products, or if HMRI delivers Product that does not meet the Specifications,
then Rugby shall have the right to inspect such portions of the manufacturing
facilities of HMRI that relate to the manufacture of Product upon reasonable
notice and during normal business hours. Notwithstanding the provisions of this
Section 5.4(a), Rugby shall have no obligation or be deemed to have an
obligation to inspect the manufacturing and testing facilities of HMRI.
(b) HMRI Access. Upon the reasonable prior written request of
HMRI, HMRI shall have the right to inspect those portions of the warehouse and
distribution facilities of Rugby where Products are being stored and
distributed, during regular business hours, to observe Product storage and
distribution or other related activities. If the FDA or other applicable
governmental regulatory agency asserts any notice to the effect that Rugby has
failed to comply with any law or regulation in connection with the storage or
distribution of Products, then HMRI shall have the right to inspect such
portions of the warehouse and distribution facilities of Rugby that relate to
the storage or distribution of Product upon reasonable notice and during normal
business hours. Notwithstanding the provisions of this Section 5.4(b), HMRI
shall have no obligation or be deemed to have an obligation to inspect the
warehouse and distribution facilities of Rugby.
V.5 REGULATORY CORRESPONDENCE. Rugby and HMRI shall make
available (or cause to be made available) to each other within three (3) days of
receipt of regulatory correspondence regarding regulatory letters, withdrawal of
Product, and correspondence bearing on the safety and efficacy of the Product.
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V.6 PRODUCT INQUIRIES AND COMPLAINTS. Rugby will promptly
submit to HMRI all Product safety and efficacy inquiries, Product quality
complaints and adverse drug event reports received by it, together with all
available evidence and other information relating thereto. Except as otherwise
required by law or governmental regulation, HMRI will be responsible for
investigating and responding to all such inquiries, complaints and adverse
events regarding Product. It shall be the responsibility of HMRI to comply with
all federal, state and local governmental reporting requirements regarding
adverse drug events and Product quality matters, except where such events or
matters are caused by acts or omissions of Rugby, in which case HMRI may,
consistent with applicable law and regulation, request Rugby's assistance in
such compliance. HMRI will forward a copy of all FDA submissions concerning
Product adverse drug events or any Product safety-related topic to Rugby within
five (5) business days of submission. In the event of a dispute in respect of
the therapeutic action or quality of a Product: (i) if the dispute involves only
Rugby and a subsequent purchaser then Rugby and HMRI shall consult prior to any
compromise or settlement of such dispute; and (ii) if the dispute involves
Rugby, HMRI and a subsequent purchaser then both parties must consent prior to
any compromise or settlement of such dispute.
V.7 RESPONSE TO COMPLAINTS AND/OR ADVERSE DRUG REACTIONS (OR
EVENTS). Pursuant to reported complaint and/or adverse drug reaction (or event),
if the nature of the reported complaint and/or adverse drug reaction (or event)
requires testing, HMRI will, at Rugby's reasonable request and expense, perform
analytical testing of corresponding retention samples and provide the results
thereto to Rugby as soon as reasonably practicable; provided, however, that HMRI
shall be responsible for the reasonable costs of such testing and reporting to
the FDA or any other governmental regulatory agency if it is determined that
HMRI is responsible for such reported complaint and/or adverse drug reaction (or
event). Such testing shall be performed using NDA approved testing procedures.
V.8 ADDITIONAL INFORMATION. Rugby shall provide to HMRI in a
timely manner, but in no event less than sixty (60) days prior to the due date
of HMRI's annual report to the FDA with respect to the Products, all information
(in written form) which HMRI requests regarding the Products in order to comply
with applicable federal and state drug laws. Such information shall include,
without limitation, quantities of each Product sold. Rugby shall be responsible
for assuring that all promotional material produced by it relating to Products
comply with federal, state and local law. Rugby shall provide to HMRI prior to
first use copies of all advertising, promotional material, labeling and other
literature used on, or in connection with, the Products. HMRI shall provide to
Rugby a copy of such FDA annual report.
ARTICLE VI
PRODUCT RECALLS
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VI.1 PRODUCT RECALLS. In the event (i) any government
authority issues a request, directive or order that Product be recalled, (ii) a
court of competent jurisdiction orders such a recall, or (iii) HMRI shall
reasonably determine that Product should be recalled, the parties shall take all
appropriate corrective actions, and shall cooperate in the investigations
surrounding the recall. In the event that HMRI determines that Product should be
recalled, HMRI shall consult with Rugby prior to taking any corrective actions.
In the event that such recall results from any cause or event other than that
arising from the storage, distribution or handling of the recalled Product by
Rugby or its Affiliates or the negligence of Rugby or its Affiliates, HMRI shall
be responsible for all documented out-of-pocket expenses of such recall
consistent with directions received from the appropriate governmental authority.
In the event that such recall results from any cause or event arising from the
storage, distribution or handling of the recalled Product by Rugby or its
Affiliates or the negligence of Rugby or its Affiliates, Rugby shall be
responsible for all such documented out-of-pocket expenses. For purposes of this
Agreement, the expenses of recall shall include the expenses of notification and
destruction or return of the recalled product and all other costs incurred in
connection with such recall, but shall not include lost profits of either party.
VI.2 DISPUTES. If there is any dispute concerning which
party's acts or omissions gave rise to such recall of Product, such dispute
shall be referred for decision to an independent expert (acting as an expert and
not as an arbitrator) to be appointed by agreement between Rugby and HMRI or, in
the absence of agreement, by the President for the time being of the
Pharmaceutical Research and Manufacturers of America. The costs of such
independent expert shall be borne equally between Rugby and HMRI. The decision
of such independent expert shall be in writing and, except for manifest error on
the face of the decision, shall be binding on both Rugby and HMRI.
ARTICLE VII
WARRANTIES
VII.1 FDA APPROVAL. HMRI warrants that each Product is
approved by the FDA for the uses set forth in the Product labeling. All Products
will conform to, and the Products manufactured by HMRI will be manufactured in
conformity with the regulations of the FDA and any comparable state agency
applicable thereto.
VII.2 CONFORMITY WITH SPECIFICATIONS. HMRI warrants that each
Product manufactured by HMRI and sold to Rugby pursuant to this Agreement will
meet the Specifications for such Product in effect at the time title to such
Product passes from HMRI to Rugby pursuant to Section 3.6 herein. HMRI reserves
the right to amend such Specifications from time to time at the sole discretion
of HMRI, provided that Rugby is provided with written notice within a
commercially reasonable period of time in advance in order to effect any
necessary marketing or other changes and, provided further that such changes do
not cause the product delivered to Rugby to cease to be the equivalent of the
applicable Product then sold by HMRI.
VII.3 COMPLIANCE WITH THE FEDERAL FOOD, DRUG AND COSMETIC ACT.
HMRI warrants that all Product delivered to Rugby pursuant to this Agreement
will, at the time of such delivery, not be adulterated within the meaning of the
Act and will not be an article which may not, under the provisions of such Act,
be introduced into interstate commerce.
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VII.4 NO LIENS. HMRI warrants that all Product delivered to
Rugby pursuant to this Agreement will, at the time of such delivery, be free and
clear of all liens, encumbrances, security interests and other encumbrances.
VII.5 EXCLUSION OF OTHER WARRANTIES. EXCEPT WHERE OTHERWISE
SET FORTH IN THIS AGREEMENT, SECTIONS 7.1, 7.2, 7.3 AND 7.4 ARE IN LIEU OF ALL
CONDITIONS, WARRANTIES AND STATEMENTS IN RESPECT OF PRODUCT AND IN RESPECT OF
THE MANUFACTURING SERVICES PROVIDED HEREUNDER, WHETHER EXPRESSED OR IMPLIED BY
STATUTE, CUSTOM OF THE TRADE OR OTHERWISE (INCLUDING BUT WITHOUT LIMITATION ANY
SUCH CONDITION, WARRANTY OR STATEMENT RELATING TO THE DESCRIPTION OR QUALITY OF
PRODUCT, ITS MERCHANTABILITY OR ITS FITNESS FOR A PARTICULAR PURPOSE OR USE
UNDER ANY CONDITIONS) AND ANY SUCH CONDITION, WARRANTY OR STATEMENT IS HEREBY
EXCLUDED. EXCEPT AS PROVIDED IN ARTICLE 9 HEREIN, REPLACEMENT OF ANY
NONCONFORMING PRODUCT AND REASONABLE DOCUMENTED OUT OF POCKET EXPENSES SHALL BE
RUGBY'S SOLE REMEDY FOR BREACH OF ANY EXPRESS WARRANTY CONTAINED IN THIS ARTICLE
VII. In no event shall HMRI or Rugby be liable under or with respect to this
Agreement for any indirect, incidental, consequential, special or punitive
damages of any kind, including loss of profits, including but not limited to due
to breach of warranty, tort, breach or repudiation of any term or condition of
this Agreement.
ARTICLE VIII
NONDISCLOSURE, CONFIDENTIALITY AND TRADEMARKS
VIII.1 NONDISCLOSURE OBLIGATIONS.
(a) Except as otherwise specifically provided in this
Agreement, Rugby acknowledges that the HMRI Know-How with which it may be
supplied pursuant to this Agreement or otherwise is supplied in circumstances
imparting an obligation of confidence and agrees to keep such HMRI Know-How
secret and confidential and to respect HMRI's proprietary rights therein and to
use the same for the sole purpose of this Agreement and during the period of
this Agreement or at any time for any reason whatsoever not to disclose or cause
or permit to be disclosed such HMRI Know-How to any third party.
(b) Rugby shall procure that only its respective employees or
employees of its Affiliates or consultants and contractors shall have access to
HMRI Know-How on a need to know basis and shall be subject to the same
obligations of confidence as the principals pursuant to Section 8.1(a) above and
shall enter into secrecy agreements in support of such obligations. Insofar as
this is not reasonably practicable, the principals shall take all reasonable
steps to ensure that any such employees, consultants and contractors are made
aware of such obligations.
(c) Both parties undertake and agree not to disclose or permit
to be disclosed at any time for any reason whatsoever to any third party or
otherwise make use of or permit to be made use of any trade secrets or
confidential information relating to the technology, business affairs or
finances of the other or of any Affiliates, suppliers, agents, distributors,
licensees, licensors or other customers of the other which comes into their
possession pursuant to this Agreement.
(d) The obligations of confidence referred to in this Section
8.1 shall not extend to any information which:
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(i) is or becomes part of the public domain other
than by unauthorized acts of the party obligated not to
disclose such Information or its Affiliates or sublicensees,
as applicable;
(ii) can be shown by written documents to have been
disclosed to the receiving party or its Affiliates or
sublicensees by a third party, provided such Information was
not obtained by such third party directly or indirectly from
the other party under this Agreement pursuant to a
confidentiality agreement;
(iii) prior to disclosure under this Agreement, was
already in the possession of the receiving party or its
Affiliates or sublicensees, provided such Information was not
obtained directly or indirectly from the other party under
this Agreement pursuant to a confidentiality agreement;
(iv) can be shown by written documents to have been
independently developed by the receiving party or its
Affiliates without breach of any of the provisions of this
Agreement;
(v) is disclosed by the receiving party pursuant to
oral questions, interrogatories, requests for information or
documents, subpoena, or a civil investigative demand of a
court or governmental agency; provided that the receiving
party notifies the other party immediately upon receipt
thereof (and provided that the disclosing party furnishes only
that portion of the information which it is advised by counsel
is legally required and impose such obligations of secrecy as
are possible in that regard); or
(vi) is required to be disclosed by a party under any
statutory, regulatory or similar legislative requirement or
any rule of any stock exchange to which it or any Affiliate is
subject, subject to the obligation of secrecy as are possible
in that regard.
VIII.2 TERMS OF THIS AGREEMENT. Rugby and HMRI each agree not
to disclose any terms or conditions of this Agreement to any third party without
the prior consent of the other party, except as required by applicable law.
Notwithstanding the foregoing, prior to execution of this Agreement, Rugby and
HMRI shall agree upon the substance of information that can be used as a routine
reference in the usual course of business to describe the terms of this
Agreement from time to time, without the other party's consent; provided,
however, that if either party determines that excessive use of such statement is
made by the other party, then the party determined to be using such statement
excessively shall, upon notice by the other party, cease making such statement.
VIII.3 INJUNCTIVE RELIEF. The parties hereto understand and
agree that remedies at law may be inadequate to protect against any breach of
any of the provisions of this Article 8 by either party or their employees,
agents, officers or directors or any other person acting in concert with it or
on its behalf. Accordingly, each party shall be entitled to the granting of
injunctive relief by a court of competent jurisdiction against any action that
constitutes any such breach of this Article 8.
VIII.4 TRADEMARKS.
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(a) HMRI Trademarks. Rugby acknowledges that HMRI and its
Affiliates are the exclusive owner of (i) the trademarks, service marks, slogan,
trade names, trade dress and the like (including the associated goodwill of
each) held by HMRI or its Affiliates and (ii) all copyrights held by HMRI or its
Affiliates (collectively, the "HMRI Intellectual Property Rights"). In addition,
Rugby acknowledges that HMRI is the exclusive owner of the NDAs and any
supplements thereto. Rugby acknowledges that it shall have no rights hereunder
to any such HMRI Intellectual Property Rights and agrees that it shall not
contest or dispute the validity of or title to any of such HMRI Intellectual
Property Rights. Rugby agrees it shall not take or cooperate in litigation or
threatened litigation which might or is intended to impair or attack the HMRI
Intellectual Property Rights. Rugby shall market the Products under its own
trade names and trademarks, which shall not be confusingly similar to the HMRI
Intellectual Property Rights.
(b) Rugby Trademarks. HMRI acknowledges that Rugby and its
Affiliates are the exclusive owner of (i) the trademarks, service marks, slogan,
trade names, trade dress and the like (including the associated goodwill of
each) held by Rugby or its Affiliates and (ii) all copyrights held by Rugby or
its Affiliates (collectively, the "Rugby Intellectual Property Rights"). HMRI
acknowledges that it shall have no rights hereunder to any such Rugby
Intellectual Property Rights and agrees that it shall not contest or dispute the
validity of or title to any of such Rugby Intellectual Property Rights. HMRI
agrees it shall not take or cooperate in litigation or threatened litigation
which might or is intended to impair or attack the Rugby Intellectual Property
Rights.
ARTICLE IX
LIMITATION OF LIABILITY, INDEMNIFICATION AND INSURANCE
IX.1 INDEMNIFICATION BY RUGBY. Except as otherwise
specifically provided herein, Rugby shall indemnify and maintain HMRI against
all claims, actions, costs, expenses (including court costs and legal fees on a
full indemnity basis) or other liabilities ("Liabilities") whatsoever in respect
of:
(a) any negligence or willful misconduct of Rugby in relation
to the use, marketing, storage, distribution, handling or sale of Product;
(b) any labeling of any Product to the extent that such
labeling has been supplied by or at the direction of Rugby and applied in
accordance with instructions from Rugby; and
(c) any representation or warranty made by Rugby to its
customers or users with respect to Product, other than representations or
warranties contained in Article VII herein.
IX.2 INDEMNIFICATION BY HMRI. Except as otherwise specifically
provided herein, HMRI shall indemnify and maintain Rugby against all Liabilities
whatsoever in respect of:
(a) any defective design product liability claim with respect
to a Product;
(b) any labeling of any Product to the extent such labeling is
supplied by or at the direction of HMRI;
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(c) HMRI's failure to comply with the Specifications; and
(d) any negligence or willful misconduct by HMRI in the
manufacture, packaging, storage, handling or shipping of Product.
IX.3 INDEMNIFICATION PROCEDURES. A party (the "Indemnitee")
that intends to claim indemnification under this Article 9 shall:
(a) notify the other party (the "Indemnitor") of any Liability
with respect to which the Indemnitee intends to claim indemnification as soon as
practicable after the Indemnitee becomes aware of any such Liability;
(b) permit the Indemnitor to assume the defense thereof with
counsel mutually satisfactory to the parties; and
(c) cooperate with the Indemnitor, at the Indemnitor's
expense, in the defense thereof.
With respect to any matter for which the Indemnitor has an
obligation to indemnify the Indemnitee under this Agreement, the Indemnitee
shall have the right to participate and be represented (at the Indemnitor's
expense) by legal counsel of the Indemnitee's choice in all proceedings and
negotiations, if representation by counsel retained by Indemnitor would be
inappropriate due to actual or potential differing interests between the
Indemnitee and any other party represented by such counsel in such proceedings.
The indemnity agreement in this Article 9 shall not apply to amounts paid in
settlement of any Liability if such settlement is effected without the consent
of the Indemnitor, which consent shall not be unreasonably withheld. Failure of
the Indemnitee to deliver notice to the Indemnitor within a reasonable time
after becoming aware of a Liability shall relieve the Indemnitor of any
liability to the Indemnitee pursuant to this Article 9 in the event such delay
is prejudicial to the Indemnitor's ability to defend such action.
IX.4 DISTRIBUTION INSURANCE. Rugby shall obtain and maintain
in effect for the term of this Agreement, liability insurance or indemnity
policies with an insurer reasonably acceptable to HMRI, in an amount not less
than *with an indemnity to principals clause with respect to the distribution of
each Product, which policies shall name HMRI as an additional insured and shall
be blanket policies. Such policies shall insure against liability on the part of
Rugby and any of its Affiliates, as their interests may appear, due to injury,
disability or death of any person or persons, or injury to property, arising
from the distribution of Products. Upon the execution of this Agreement and
thereafter on January 1 each year during the Term, Rugby shall provide to HMRI a
certificate of insurance (i) summarizing the insurance coverage, (ii)
identifying any exclusions and (iii) indicating that the terms of Rugby's
insurance policies are in accordance with this Section 9.4. Rugby shall promptly
notify HMRI of any alterations to the terms of this policy or in the amounts for
which insurance is provided.
IX.5 MANUFACTURER'S INSURANCE. HMRI shall obtain and maintain
in effect for the term of this Agreement, liability insurance or indemnity
policies with an insurer reasonably satisfactory to Rugby, in an amount not
being less than *with an indemnity to principals clause with respect to the
manufacture, storage or handling of Product, which policies shall name Rugby as
an additional insured and shall be blanket policies. Such policies shall insure
against liability on the part of HMRI and any of its Affiliates, as their
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interests may appear, due to injury, disability or death of any person or
persons, or injury to property arising from the negligence of HMRI in the
manufacture of Product. Upon the execution of this Agreement and thereafter on
January 1 each year during the Term, HMRI shall provide to Rugby a certificate
of insurance (i) summarizing the insurance coverage, (ii) identifying any
exclusions and (iii) indicating that the terms of HMRI's insurance policies are
in accordance with this Section 9.5. HMRI shall promptly notify Rugby of any
alterations to the terms of the policy or in the amounts for which insurance is
provided.
IX.6 PRODUCT LIABILITY CLAIMS. As soon as it becomes aware,
each party will give the other prompt written notice of any defect or alleged
defect in a Product, any injury alleged to have occurred as a result of the use
or application of a Product, and any circumstances that may give rise to
litigation or recall of a Product or regulatory action that may affect the sale
or manufacture of a Product, specifying, to the extent the party has such
information, the time, place and circumstances thereof and the names and
addresses of the persons involved. Each party will also furnish promptly to the
other copies of all papers received in respect of any claim, action or suit
arising out of such alleged defect, injury or regulatory action.
ARTICLE X
DISPUTE RESOLUTION
X.1 MEDIATION COMMITTEE. The Chief Executive Officers or
Presidents of the parties shall constitute the mediation committee (the
"Mediation Committee"). In the event any dispute or controversy arises under,
out of, in connection with or in relation to this Agreement or any amendments or
proposed amendment thereto or any breach thereof the parties agree that, before
any party initiates arbitration proceedings pursuant to Section 10.6, it shall
give the other party notice and shall demand that the members of the Mediation
Committee attempt to resolve the matter amicably. If the Mediation Committee is
unable to resolve a matter within ten (10) days of submission of the matter to
it via telephone, telefax or other written or oral contact, the Mediation
Committee shall meet in person, not later than twenty (20) days following
submission of the matter to it, at a mutually convenient place to attempt in
good faith to resolve the dispute. If the Mediation Committee is unable to
resolve a dispute, unless a mutually acceptable extension is agreed upon by the
Mediation Committee, either side shall have the right, but not the obligation,
to initiate arbitration proceedings respecting the matter under review, in
accordance with Section 10.6 herein.
X.2 NON-ARBITRABLE ISSUES. The parties acknowledge that
matters relating to product recalls as set forth in Article 6 herein, Disputes
as set forth in Section 3.13, and the matters set forth in Section 8.3 shall not
be submitted to arbitration pursuant to Section 10.3 hereof but instead shall be
resolved in accordance with Section 6.2, 3.13 and 8.3 herein, respectively.
X.3 SCOPE OF ARBITRATION. The parties agree that all disputes
and controversies except those set forth in Section 10.2 herein arising under
this Agreement shall be resolved by arbitration in accordance with the
provisions of this Article 10; provided, however, that during the period of
arbitration on any dispute the parties shall continue to fulfill their
obligations as set forth in this Agreement.
X.4 ARBITRATION PANEL. The arbitration shall be held before a
panel of three (3) persons (the "Arbitration Panel").
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X.4.1 Selection. Within fifteen (15) days of the appointment
of the two initial arbitrators, the two arbitrators so appointed shall appoint
the third arbitrator, who shall be an attorney and shall act as chair of the
Arbitration Panel.
X.4.2 Qualifications. The two arbitrators selected by the
parties hereto shall have experience in the pharmaceutical and/or biotechnology
industry. None of the arbitrators shall have been employed or be retained by or
otherwise related to HMRI or Rugby.
X.4.3 Failure to Name. If a party fails to name its arbitrator
within thirty (30) days of the receipt of the Notice of Arbitration (as defined
herein), then the arbitrator already named shall immediately select the second
arbitrator. The two arbitrators so appointed shall appoint the third arbitrator,
who shall be an attorney and shall act as chair of the Arbitration Panel.
X.4.4 Right to Select Replacement. In the event that an
arbitrator refuses or is otherwise unable to serve as such, the party or the
other arbitrator(s) as the case may be, who selected such arbitrator shall have
the right to select his/her replacement. Such replacement shall be selected
within fifteen (15) days of the refusal or inability by such arbitrator to
serve.
X.5 DESIGNATION OF RULES, SITUS, GOVERNING LAW.
X.5.1 Designation of Rules. The parties agree that the
arbitrators shall apply the Federal Rules of Evidence as they are applied in
cases tried to a court sitting without a jury; unless the parties otherwise
agree in writing, the opinions of expert witnesses shall not be admissible. The
parties agree that discovery proceedings shall be limited to: (i) the dispute;
(ii) depositions of those persons having direct knowledge of the dispute; and
(iii) submission of all documents which relate to the dispute.
X.5.2 Situs. The arbitration hearing shall be held in New
York, New York, unless otherwise mutually agreed to in writing.
X.6 PROCEDURE.
X.6.1 Conciliation Period. No party shall send a Notice of
Arbitration in connection with a dispute under this Article 10 unless at least
thirty (30) days prior to the date of such Notice of Arbitration, such party
shall have furnished to the other parties written notice of its intent to send a
Notice of Arbitration in connection with a dispute. During such thirty (30) day
period the Mediation Committee shall attempt in good faith to settle the dispute
in accordance with the provisions of Section 10.1 herein.
X.6.2 Notice of Arbitration. The party seeking to institute
arbitration (hereinafter, a "Claimant") shall do so by sending the other parties
(hereinafter, each a "Respondent") a written notice of arbitration (the "Notice
of Arbitration"). The Notice of Arbitration shall set forth in detail the nature
of the dispute. The Notice of Arbitration shall also designate the arbitrator
appointed by the Claimant and set forth a full Curriculum Vitae or resume
showing that the arbitrator meets the qualifications set forth in Section
10.4.2.
X.6.3 Response. Within thirty (30) days after receipt of the
Notice of Arbitration, the Respondent shall send the Claimant a written Response
including any counterclaims (the "Response").
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The Response shall also designate the arbitrator appointed by the Respondent and
set forth a full Curriculum Vitae or resume showing that the arbitrator meets
the qualifications set forth in Section 10.4.2. If the Response sets forth a
counterclaim, the Claimant may, within fifteen (15) days of the receipt of the
Response, deliver to the Respondent and the arbitrators a Rejoinder (the
"Rejoinder") answering such counterclaim.
X.6.4 Discovery. Within sixty (60) days of the date of the
Response, each party shall submit to the other parties and to the arbitrators
one (1) copy of all documents in the possession, custody or control of the party
or its Affiliates, which are relevant to the dispute or controversy set forth in
the Notice of Arbitration, Response or Rejoinder. Within forty-five (45) days of
the date of the Response, each party shall submit to the other parties a list of
all witnesses intended to be called at the hearing. Each party shall use its
commercially reasonable good faith efforts to make available for deposition
within thirty (30) days after the delivery of the list of witnesses at each
party's respective location of its operations, all of its agents, employees, and
Affiliates who have direct knowledge of the dispute at such times and places
that shall not unreasonably disrupt the business of the other parties. The chair
of the Arbitration Panel shall determine all discovery disputes and may enforce
a decision by imposing appropriate sanctions on the non-complying party.
X.6.5 Record. A stenographic record of all proceedings shall
be made and oaths administered by a duly licensed and qualified court reporter.
The court reporter shall prepare five (5) copies of the stenographic record of
such proceeding and shall send one (1) copy to each of the arbitrators and to
each of the parties within seven (7) days of the relevant proceeding under this
Section.
X.6.6 Attendance at Hearing. Each party may be represented by
an attorney at all hearings before the Arbitration Panel. The Arbitration Panel
shall have the power to require the exclusion of any witness, other than a party
or other essential person, during the testimony of any other witness. Unless the
law provides to the contrary, the arbitration may proceed in the absence of any
party or representative who, after due notice, fails to be present or fails to
obtain a postponement. An award shall not be made solely on the default of a
party; the Arbitration Panel shall require the party who is present to submit
such evidence as it may require for the making of an award.
X.6.7 Postponement of Hearing. The Arbitration Panel, for good
cause shown, may postpone any hearing under any of the following conditions: (i)
upon the request of a party, (ii) upon its own initiative, and (iii) upon mutual
agreement by the parties.
X.6.8 Post-Hearing Filings. Any post-hearing briefs shall be
made by the parties to the Arbitration Panel and the other party within fourteen
(14) business days following the hearing. Each party shall be afforded an
opportunity to examine any post-hearing filings and to provide a response to the
Arbitration Panel within seven (7) business days of the receipt of a
post-hearing filing.
X.6.9 Award Opinion. The Arbitration Panel shall issue an
opinion with respect to any dispute. The arbitrators shall issue a final
decision within one (1) month from the final hearing on any dispute. The
concurrence of two (2) arbitrators shall be sufficient for the entry of a final
decision. Such opinion shall be written in the form of "Findings of Fact" and
"Conclusions of Law," and shall include the reasons for a decision. A final
decision shall be binding on both parties.
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X.6.10 Rehearing. The parties agree that a rehearing
shall only be allowed in the event that the chair of the Arbitration Panel is
unable or unwilling to continue performance of the duties of an arbitrator.
X.6.11 Confidentiality. All arbitration proceedings
hereunder shall be conducted on a confidential basis and shall be subject to the
provisions of Article 8 (Nondisclosure and Confidentiality) herein. The parties
and the arbitrators shall not disclose or otherwise make public any information
revealed during the proceedings or any final decision which may result from the
proceedings.
X.6.12 Waiver. Any arbitration proceeding hereunder
must be instituted within two (2) years after the controversy or claim is
discovered or reasonably should have been discovered. Failure to send a Notice
of Arbitration within such two-year period shall constitute an absolute bar to
the institution of any proceedings respecting such controversy or claim, and a
waiver thereof.
X.7 AUTHORITY OF ARBITRATORS.
X.7.1 Awards. Except as otherwise specifically
provided herein, the arbitrators shall have the power to award money damages and
equitable relief such as rescission, specific performance and injunctive relief.
X.7.2 Modification of Article 10. The Arbitration
Panel shall not have the power to amend, change or alter any provision of this
Article 10 without the express written consent of each party hereto.
X.8 AWARDS.
X.8.1 Judgment. Judgment upon the award rendered by
the arbitrators shall be enforceable in any court of competent jurisdiction.
Each party agrees to submit to the personal jurisdiction of that court for
purposes of the enforcement of any such award.
X.8.2 Fees and Expenses. All fees of the arbitrators
and the court stenographer shall be paid by the party who does not prevail in
the arbitration as determined by the arbitrators. In the event a settlement
occurs before the issuance of a final decision, the parties shall unless
otherwise agreed, each pay an equal portion of any fees of the arbitrators and
the court stenographer and the cost of any transcripts. All other
arbitration-related expenses shall be borne by the party incurring such
expenses.
ARTICLE XI
GENERAL PROVISIONS
XI.1 NOTICES.
(a) Except as otherwise specifically provided herein,
any notice or other documents to be given under this Agreement shall be in
writing and shall be deemed to have been duly given if sent by registered post,
nationally recognized overnight courier or facsimile transmission to a party or
delivered in person to a party at the address or facsimile number set out below
for such party or such other address as the party may from time to time
designate by written notice to the other:
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If to Xxxxxx or Rugby: Xxxxxx Pharmaceuticals, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxx Xxxx
Fax: 909/000-0000
Copy to: X'Xxxxxx & Xxxxxx
00 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax: 312/000-0000
If to HMRI: Hoechst Xxxxxx Xxxxxxx, Inc.
00000 Xxxxxx Xxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000, XXX
Attn: General Counsel
Fax: 816/000-0000
Copy to: Hoechst Xxxxxx Xxxxxxx, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Attn: Vice President of Site Operations -
Cincinnati
Fax: 513/000-0000
Copy to: Shook, Hardy & Bacon L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Fax: 816/000-0000
(b) Any such notice or other document shall be deemed
to have been received by the addressee three business days following the date of
dispatch of the notice or other document by post or, where the notice or other
document is sent by overnight courier, by hand or is given by facsimile,
simultaneously with the transmission or delivery. To prove the giving of a
notice or other document it shall be sufficient to show that it was dispatched.
XI.2 ENTIRE AGREEMENT; AMENDMENT.
(a) This Agreement, together with the Exhibits
attached hereto, embodies and sets forth the entire agreement and understanding
of the parties with respect to the subject matter herein and there are no
promises, terms, conditions or obligations, oral or written, expressed or
implied, other than those contained in this Agreement. The terms of this
Agreement shall supersede all previous oral or written agreements which may
exist or have existed between the parties relating to the subject matter of this
Agreement, including (i) that certain Agreement dated as of March 11, 1991, by
and between Rugby-Xxxxx Group Companies, Inc. and Blue Ridge Laboratories, Inc.
relating to the manufacture of sucralfate tablets
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and (ii) that certain Agreement dated as of November 21, 1991 by and between
Rugby-Xxxxx Group Companies, Inc. and Blue Ridge Laboratories, Inc. relating to
diltiazem tablets. Neither party shall be entitled to rely on any agreement,
understanding or arrangement which is not expressly set forth in this Agreement.
Any other terms and conditions (including without limitation any terms and
conditions contained in any purchase order or sales invoice issued pursuant to
this Agreement) are hereby expressly excluded.
(b) This Agreement shall not be amended, modified,
varied or supplemented except in writing signed by duly authorized
representatives of the parties.
XI.3 FORCE MAJEURE. If either party is prevented or delayed in
the performance of any of its obligations under this Agreement by Force Majeure
(as defined herein) and shall give written notice thereof to the other party
specifying the matters constituting Force Majeure together with such evidence as
such party reasonably can give and specifying the period for which it is
estimated that such prevention or delay will continue, the party shall be
excused from the performance or the punctual performance of such obligations as
the case may be from the date of such notice for so long as such cause of
prevention or delay shall continue. The expression "Force Majeure" shall be
deemed to include any cause substantially affecting the performance by either
party of this Agreement arising from or attributable to acts, events,
non-happenings, omissions or accidents beyond the reasonable control of the
party whose performance is so affected.
XI.4 ASSIGNMENT. Neither party shall be entitled to assign its
rights and obligations hereunder without the prior written consent of the other;
provided, however, either party shall be entitled, without the prior written
consent of the other, to assign its rights and obligations hereunder to an
Affiliate, but such assignment to an Affiliate shall not relieve the assigning
party of its obligations under this Agreement. No permitted assignment hereunder
shall be deemed effective until the assignee shall have executed and delivered
an instrument in writing reasonably satisfactory in form and substance to the
other party pursuant to which the assignee assumes all of the obligations of the
assigning party hereunder. Any purported assignment of this Agreement in
violation of this Section 11.4 shall be void. This Agreement shall be binding
upon the successors and permitted assigns of the parties and the name of a party
appearing herein shall be deemed to include the names of its successors and
assigns.
XI.5 HEADINGS, INTERPRETATION. The headings used in this
Agreement are for convenience only and are not a part of this Agreement nor
affect the interpretation of any of its provisions.
XI.6 ATTACHMENTS. All Exhibits referenced herein are hereby
made a part of this Agreement.
XI.7 INDEPENDENT PARTIES. This Agreement shall not be deemed
to create any partnership, joint venture, or agency relationship between the
parties. Each party shall act hereunder as an independent contractor.
XI.8 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York, excluding its conflict of
laws principles.
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XI.9 NO WAIVER. Neither the failure nor delay on the part of
either party to require the strict performance of any term, covenant or
condition of this Agreement or to exercise any right or remedy available on a
breach thereof shall constitute a waiver of any such breach or of any such term
or condition. The consent to, or the waiver of, any breach, or the failure to
require on any single occasion the performance or timely performance of any
term, covenant, or condition of this Agreement shall not be construed as
authorizing any subsequent or additional breach and shall not prevent a
subsequent enforcement of such term, covenant, or condition.
XI.10 SEVERABILITY. In the event that any provision of this
Agreement or the application thereof to any party or circumstance shall be
finally determined by a court of proper jurisdiction to be invalid or
unenforceable to any extent, then (i) a suitable and equitable provision shall
be substituted therefore in order to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid and unenforceable provision
and (ii) the remainder of this Agreement and the application of such provision
to the parties or circumstances other than those to which it is held invalid or
unenforceable shall not be affected thereby.
XI.11 INTERPRETATION. The parties hereto acknowledge and agree
that (i) each party and its representatives has reviewed and negotiated the
terms and provisions of this Agreement and have contributed to its revision,
(ii) the rule of construction to the effect that any ambiguities are resolved
against the drafting party shall not be employed in the interpretation of this
Agreement and (iii) the terms and provisions of this Agreement shall be
construed fairly as to each party hereto and not in favor of or against either
party regardless of which party was generally responsible for the preparation of
this Agreement.
XI.12 COUNTERPARTS. This Agreement may be executed
simultaneously in two counterparts, each of which shall be deemed an original,
but both of which together shall constitute a single agreement.
XI.13 THIRD PARTY BENEFICIARIES. This Agreement is not
intended to confer upon any non-party rights or remedies hereunder.
XI.14 FURTHER ASSURANCES. Each party shall execute and deliver
such additional instruments and other documents and use all commercially
reasonable efforts to take or cause to be taken, all actions and to do, or cause
to be done, all things necessary under applicable law to consummate the
transactions contemplated hereby.
CONFIDENTIAL TREATMENT - NOTED BY * AND STRIKE-THROUGH
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30
CONFIDENTIAL TREATMENT - NOTED BY * AND STRIKE-THROUGH
IN WITNESS WHEREOF, the parties hereto have each caused this
Agreement to be duly executed as of the date first above written.
HOECHST XXXXXX XXXXXXX, INC.
By:
-------------------------------------
Name:
Title:
THE RUGBY GROUP, INC.
By:
-------------------------------------
Name:
Title:
CONFIDENTIAL TREATMENT - NOTED BY * AND STRIKE-THROUGH
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