EXHIBIT 10.9
AGREEMENT BETWEEN LANNETT COMPANY, INC. AND SIEGFRIED (USA), INC.
DATED: October 31, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ (▇▇▇), Inc. of ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
("Seller") will sell and Lannett Company Inc. of ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("Buyer") will buy the Product on the terms and conditions contained
herein. The terms of this Agreement and any signed addenda attached to this
Agreement constitute the entire Agreement between the Seller and Buyer and
supersede any existing sales contract relating to the Product. This Agreement
must be signed and returned by Buyer within 30 days from the date first
specified above and will not bind Seller unless signed by an authorized
representative of Seller. The Agreement does not bind the Buyer unless it
receives the Agreement signed by an authorized representative of the Seller on
or before the date specified above. Subject to the terms and conditions of this
Agreement, Seller shall sell to Buyer, and Buyer shall purchase exclusively from
Seller, the Product
PRODUCT: Primidone USP
CONTRACT TERM: The initial term of this Agreement shall be for a period of
Twelve (12) months from the date first specified above.
QUANTITY: 100 Percent (100%) of Buyer's yearly requirements for Product
FOB (Incoterms 2000): Pennsville, New Jersey
BASE PRICE:
[CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION] US
Dollars per Kilogram for all quantities provided total requirements exceed
CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION]
Kilograms during a period of Twelve (12) months.
CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION] US
Dollars per Kilogram for all quantities if total purchases do not exceed
CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION]
Kilogram during a period of Twelve (12) months.
SHIP TO: Lannett Company Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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STANDARD TERMS AND CONDITIONS OF SALE
1. WARRANTY. Seller warrants that the Product will conform in all material
respects to the attached SPECIFICATIONS.
2. DISCLAIMER OF FURTHER WARRANTIES. EXCEPT AS SET FORTH ABOVE, SELLER MAKES
NO WARRANTY, REPRESENTATION OR CONDITION OFANY KIND, EXPRESS OR IMPLIED
(INCLUDING NO WARRANTY OF MERCHANTABILITY OR FITNESS OF THE PRODUCT FOR
ANY USE CONTEMPLATED BY BUYER) CONCERNING THE PRODUCT OR CONTAINERS IN,
WHICH THE PRODUCT IS SHIPPED.
3. LIMITATION OF REMEDIES AND LIABILITY. IN NO EVENTWILL BUYER'S DAMAGES OR
OTHER RECOVERY FROM SELLER IN ANY CAUSE OF ACTION, WHETHER BASED ON
CONTRACT, TORT, OR ANY OTHER THEORY, EXCEED THE PRICE PAID BY BUYER FOR
THE SPECIFIC PRODUCT AS TO WHICH THE CLAIM IS MADE. SELLER SHALL NOT BE
LIABLE, AND BUYER WAIVES ALL CLAIMS AGAINST SELLER, FOR PROSPECTIVE
PROFITS OR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES BASED
UPON NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY IN TORT OR ANY OTHER
CAUSE OF ACTION. Seller's total, complete and exclusive liability
hereunder shall be limited to the remedies contained in this Section 3.
Seller will not be liable to Buyer for any contribution to or indemnity
against all or any part of any loss, damage or injury to persons or
property resulting from Buyer's handling, storage, transportation, resale
or use of the Goods in manufacturing processes, or in combination with
other substances, or otherwise. All technical advice, recommendations and
services provided by Seller are intended for use by persons having skill,
at their own risk, and Seller assumes no responsibility, and Buyer hereby
waives all claims against Seller, for results obtained or damages incurred
from the use of Seller's advice, recommendations or services. Buyer will
indemnify and hold Seller harmless from and against all damages, costs and
expenses resulting from special marking of the Product or containers in
accordance with Buyer's requests, Buyer's purchase, use, marketing,
manufacturing or sale of the Product or Buyer's failure to recall finished
product.
In the event Buyer rejects a lot pursuant to Section 9, Buyer may return
to Seller, at Seller's shipping expense and risk, any Product sold by
Seller to Buyer which does not conform to the Specifications, for credit
or replacement, at the election of Seller within sixty (60) days of
receipt. Credit for properly returned items will be given when Seller
receives such Product. No such return may be made unless Buyer first
receives written authorization for the return
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from Seller and such return is made in accordance with such authorization.
Shipping costs for shipment of replacement Product by Seller back to Buyer
via ground transportation shall be paid by Seller. Seller shall have no
obligation to grant credit for or replace any Product sold hereunder which
has been subject to misuse, mishandling, neglect, accident, abuse or has
been subjected to alteration or modifications unauthorized by the Seller.
4. FORCE MAJEURE. Failure of any party to perform its obligations under this
Agreement (except the obligation to make payments when properly due) shall
not subject such party to any liability or place them in breach of any
term or condition of this Agreement to the other party if such failure is
due to any cause beyond the reasonable control of such non-performing
party ("force majeure"), unless conclusive evidence to the contrary is
provided. Causes of non-performance constituting force majeure shall
include, without limitation, acts of God, fire, explosion, flood, drought,
war, riot, sabotage, embargo, strikes or other labor trouble, failure in
whole or in part of suppliers to deliver on schedule materials, equipment
or machinery, interruption of or delay in transportation or energy, a
national health emergency or compliance with any order or regulation of
any government entity acting with color of right. The party affected shall
within 5 (five) business days notify the other party of the condition
constituting force majeure as defined herein and shall exert reasonable
commercially efforts to eliminate, cure and overcome any such causes and
to resume performance of its obligations with all possible speed; provided
that nothing herein shall obligate a party to settle on terms
unsatisfactory to such party any strike, lockout or other labor
difficulty, any investigation or other proceeding by any public authority
or any litigation by any third party. If a condition constituting force
majeure as defined herein exists for more than thirty (30) consecutive
days, the parties shall meet to negotiate a mutually satisfactory
resolution to the problem, if practicable.
5. FORECASTS.
a. On or prior to the 15th business day of the month preceding each
quarter of this term (i.e. December 15, March 15, June 15, and
September 15), Buyer shall provide Seller with a rolling eighteen
month forecast of its estimated requirements for the Product. Each
quarterly Forecast will provide the amount of Product required as
well as the desired delivery dates. The forecasts provided pursuant
to this Section 5 are hereafter referred to individually as a
"Forecast" and collectively as the "Forecasts." Buyer may amend its
Forecasts, provided that such changes to the Forecasts shall not
affect Product delivery dates and quantities that are within ninety
(90) days after the date of such change. The binding forecast, the
current calendar quarter, automatically becomes a purchase order for
the quantity and delivery dates requested upon acceptance by Seller
pursuant to Section 5(b).
b. Exhibit B contains the Forecast for the first Eighteen (18) months
of this Agreement and the Seller warrants that it has the production
capacity to manufacture the Product taking into account its other
commitments and obligations in the quantities and delivery dates set
out in the Forecast.
c. Within ten (10) business days of receiving a Forecast the Seller
will notify the Buyer whether or not it has the production capacity
to manufacture the quantities of the Product as forecasted and to
deliver the Product on the requested delivery date. If the seller
confirms the quantity and delivery dates, the quantity becomes the
Deliverable Quantity and the delivery dates become the Confirmed
Delivery Dates. If the Seller cannot meet the quantity and delivery
date requirements, the Seller and Buyer shall agree on the
quantities and delivery dates that are acceptable. Buyer
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may obtain, at its own expense, any quantity that the Seller cannot
supply on the requested delivery date(s), but only for the period of
time that the Seller is unable to supply the quantity requested.
Buyer may deduct the amount of the Product obtained by an alternate
source from the Quantity specified in this Agreement, without
affecting the Price.
d. Seller shall be under no obligation to supply Product to Buyer in
excess of the Quantity specified in this Agreement, unless otherwise
agreed upon in accordance with this Section 5.
e. In the event the Seller is unable to supply Buyer with all or part
of the Deliverable Quantity within fourteen days following the
Confirmed Delivery Date or unable to supply the agreed upon
quantities, by force majeure under Section 15, or otherwise, Seller
will reconfirm the Deliverable Quantity and New Delivery Date. If
acceptable to the Buyer, the new Quantity becomes the Deliverable
Quantity and the new Date becomes the Confirmed Delivery date. If
Seller has to change the Deliverable Quantity and Confirmed Delivery
and such new dates are not acceptable to Buyer on more than three
occasions in a calendar year, the Buyer may terminate this Agreement
in accordance Section 15, Termination for Cause provision. If the
new Deliverable Quantity and Confirmed Delivery Dates are not
acceptable, the Buyer may purchase at its own expense from another
source such portion of Deliverable Quantity, which Seller cannot
supply, but only for the period of time that Seller is unable to
supply the Deliverable Quantity. Buyer may deduct any quantity not
shipped to Seller because of any such shortage of materials from the
Quantity specified in this Agreement, without affecting the Price.
6. SHORTAGES. If for any reason a shortage occurs in Seller's supply of the
materials necessary to produce the Product, Seller shall have the right to
satisfy its own requirements, and the requirements of its or its parent's
divisions, subsidiaries and affiliates for such materials, whether or not
any of such materials are allocated to the production of Product. Seller
will make best efforts to provide Buyer with the maximum allocation of
product should the situation exist because of any such shortage of
materials.
7. HARDSHIP. If, during the term of the Agreement, performance of the
Agreement should lead to unreasonable hardship for one or other party,
taking the interests of both parties into account, both parties shall
endeavor to agree amicably to amend the Agreement in the light of the
change in circumstances. This includes but is not limited to: extra
production costs exceeding ten percent (10%) incurred by the Seller and
not in their immediate control; a decreased demand exceeding ten percent
(10%) of the minimum requirements for Buyer's Products; any competitive
disadvantage for Seller or Buyer which may arise under this Agreement.
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8. PAYMENT TERMS. Seller shall invoice Buyer upon shipment. Payment is due
thirty (30) days from date of invoice. The date of the invoice shall be no
sooner than the date of shipment. Buyer shall have the right in the case
of a shipment of Product which the Buyer has determined in good faith does
not conform to the Specifications to withhold payment until such time as
the Product's conformity to the Specifications is determined in accordance
with Section 11 hereof.
9. CLAIMS. Seller will provide a Certificate of Analysis (C of A) for each
lot of Product shipped to Buyer. Buyer shall analyze each lot of Product
within Thirty (30) business days of receipt. If Product fails to meet
SPECIFICATIONS based on such tests, Buyer shall have the option of
accepting or rejecting such lot. If Buyer accepts such lot, Seller shall
have no further liability. If Buyer rejects such lot, Seller's liability,
if any, shall be as set forth in Section 1 and 2 above. Acceptance or
Rejection shall be made within forty-five (45) business days of receipt
and shall be sent in writing to Seller. Failure to test or failure to
reject within the time frames set forth above shall constitute an
acceptance and Seller shall have no further liability with respect
thereto.
10. NOTICES. All notices under this Contract must be in writing and mailed or
delivered to the attention of the General Plant Manager and the
appropriate address set forth in the beginning of this Contract.
11. CHANGE IN PROCESS. Seller shall notify Buyer prior to making any
significant change in process reaction conditions for manufacture of
Product. Following such a change, Seller will submit samples from finished
lots to Buyer for their evaluation and approval of process change.
12. TERMINATION FOR CAUSE. In the event one party is in material default of an
obligation under this Contract (the Defaulting Party) the other party (the
Non-defaulting Party) may terminate this agreement provided that (i) the
Non-Defaulting Party has received notice in writing specifying the nature
of the default (the Default Notice); and (ii) the Defaulting Party has not
rectified the default within thirty (30) days after receipt from the
Non-Defaulting Party. In the event of such termination, Buyer shall remain
obligated to purchase and pay for and Seller shall be obligated to sell,
all Deliverable Qualities. The Contract may also be terminated by either
party if the other shall at any time (i) institute or have instituted
against it any proceeding in bankruptcy or reorganization; (ii) enter into
any composition or other arrangement with its creditors; or (iii) enter
into liquidation.
13. MISCELLANEOUS. No modification, waiver, or discharge of this Contract
shall bind either party unless signed by its authorized representative. If
either party assigns this Contract (other than to an affiliate) by
operation of law or otherwise, without the consent of the other party, the
assignment shall be null and void. New Jersey law will govern the
validity, performance, construction and effect of this Contract. Seller
may assign this contract without consent to a purchaser of all or
substantially all of its assets or business.
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14. SEVERABILITY. Each and every sentence, and each and every paragraph and
provision of this Agreement shall be severable, and in the event any one
or more of them is/are declared invalid or unenforceable, the others shall
survive.
15. RESOLUTION OF DISPUTE; CONTROLLING LAW. Any dispute arising out of or
relating to this Agreement shall first be submitted to mediation in
accordance with the CPR Mediation Procedure of the CPR Institute. Unless
otherwise agreed, the parties will select a mediator from the CPR Panels
of Distinguished Neutrals. Any such dispute arising out of or relating to
this Agreement which has not been resolved by non-binding procedure as
provided hereunder within thirty (30) days of the appointment of a
mediator, shall be settled by arbitration; provided, however, that if a
mediator is not selected within ten (10) days of submission of the dispute
for mediation, or if either party will not participate in a non-binding
procedure, the other party may initiate arbitration before expiration of
the thirty (30) day period. The Federal Arbitration Act, 9 U.S.C. Sections
1-16, shall govern the arbitration and any court having jurisdiction
thereof may enter judgment upon the award rendered by the arbitrator. The
place of arbitration shall be in the State of New Jersey. The arbitrator
shall make his determination within thirty (30) days after the parties
submit briefings with respect thereto. The award rendered by the
arbitrator shall be in writing.
16. HEADINGS. Headings used in this Agreement are for reference purposes only.
WHEREOF, the parties have executed this Contract as of the day and year first
above written.
LANNETT COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer
Date: October 28, 2002
SIEGFRIED (USA), INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: VP Business Areas USA
Date: October 28, 2002
Note: Portions of Exhibit 10.9 have been omitted pursuant to a request fro
confidential treatment.
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