ADMINISTRATIVE AGREEMENT
BETWEEN
THE DEFENSE LOGISTICS AGENCY
AND
▇▇▇▇▇▇ PHARMACEUTICAL, INC.
This Agreement dated the 1st day of May, 1998, is made between ▇▇▇▇▇▇
Pharmaceutical, Inc. ("▇▇▇▇▇▇") and the Defense Logistics Agency ("DLA"). As
used herein, "▇▇▇▇▇▇" means ▇▇▇▇▇▇ Pharmaceutical Inc. and all its operating
sectors, groups, divisions, units and wholly-owned subsidiaries, including those
acquired or established during the term of this Agreement. As used herein,
"Government" means the United States Government.
PREAMBLE
1. ▇▇▇▇▇▇ is a corporation engaged in the development, manufacture, sale, and
distribution of generic drugs and other products, with its principal place of
business in Canton, MA.
2. On May 28, 1997, ▇▇▇▇▇▇ was charged by Criminal Information in the United
States District Court for the District of Massachusetts with one count of
conspiracy to defraud the United States in violation of 18 U.S.C. ss. 371. The
Information alleged that, from in or about May 1988 through in or about July
1994, ▇▇▇▇▇▇ conspired to manufacture drugs approved by the U.S. Food and Drug
Administration ("FDA") using methods different from those approved by FDA, to
falsify manufacturing batch records for FDA-approved drugs, to submit false
annual reports to FDA for approved drugs, and to fail to seek prior FDA approval
for certain manufacturing changes. On June 19, 1997, in accordance with a plea
agreement dated May 27, 1997, ▇▇▇▇▇▇ pled guilty to the charges in the
Information. Copies of the Plea Agreement and the Information are attached to
this Agreement as Exhibits 1 and 2, respectively.
3. Judgment of conviction and sentence with respect to ▇▇▇▇▇▇ were entered on
June 19, 1997. ▇▇▇▇▇▇ was sentenced to "pay a fine in the amount of Ten Million
Six Hundred Fifty Thousand Dollars ($10,650,000)" and to "pay a Special
Assessment in the amount of Four Hundred Dollars ($400). The fine is to be paid
over a three-year period."
4. On October 24, 1997, DLA proposed ▇▇▇▇▇▇ for debarment from Government
contracting and Government-approved subcontracting pursuant to the procedures
contained in the Federal Acquisition Regulation (FAR) Subpart 9.4 and the
Department of Defense FAR Supplement (DFARS) Subpart 209.4. The proposed
debarment action was based upon ▇▇▇▇▇▇'▇ criminal conviction.
5. By written and oral presentations beginning on December 3, 1997, ▇▇▇▇▇▇
presented to DLA information in opposition to the debarment. ▇▇▇▇▇▇ outlined the
present ▇▇▇▇▇▇ Business Conduct Policy and Corporate Compliance Program; its
agreement with FDA; its quality accomplishments since August 1994; its current
standard operating procedures; its education and training program; and other
changes in policy since the conduct to which ▇▇▇▇▇▇ pled guilty. ▇▇▇▇▇▇ also has
acknowledged improper conduct of its employees and has taken responsibility for
the circumstances of wrongdoing.
6. ▇▇▇▇▇▇ has expressed an interest in demonstrating to the Defense Logistics
Agency that, notwithstanding the conduct for which ▇▇▇▇▇▇ was proposed for
debarment, ▇▇▇▇▇▇ can be trusted to deal fairly and honestly with the
Government, and that debarring ▇▇▇▇▇▇ from future Government procurement and
non-procurement programs is not a necessary protection in this case.
7. ▇▇▇▇▇▇ has agreed to keep in place and to incorporate in this Agreement the
measures constituting ▇▇▇▇▇▇'▇ Business Conduct Policy voluntarily adopted prior
to the date of this Agreement. In addition, ▇▇▇▇▇▇ has taken other actions as
specified herein to assure against the recurrence of the conditions giving rise
to the criminal conviction referred to above and to assure that ▇▇▇▇▇▇ possesses
the high degree of business honesty and integrity required of a Government
contractor.
8. ▇▇▇▇▇▇ represents that none of the individuals known to ▇▇▇▇▇▇ to have been
involved in the wrongdoing that was the subject of ▇▇▇▇▇▇'▇ plea is now employed
by the company in a position that has responsibility (a) relating to the
manufacture of any product that might be sold to the Government or (b) for any
function subject to the jurisdiction of FDA. ▇▇▇▇▇▇ further represents that none
of the individuals who were officers or directors of ▇▇▇▇▇▇ at the time of the
criminal actions is presently employed by ▇▇▇▇▇▇, with the following exceptions:
Individual Current Position
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Director, Chairman of the Board
▇▇▇▇▇ ▇▇▇▇▇ Director
▇▇▇▇ ▇. ▇. ▇▇▇▇▇ Director, President - International Business
9. DLA has determined that, under the authority of Federal Acquisition
Regulation (FAR) 9.406, cause exists to ▇▇▇▇▇ ▇▇▇▇▇▇ based upon its conviction.
DLA has further determined, however, that the terms and conditions of this
Agreement provide adequate assurance that ▇▇▇▇▇▇'▇ future dealings with the
Government, if any, will be conducted with the high degree of honesty and
integrity required of a Government contractor, and that suspension or debarment
is not necessary at this time to protect the Government's interests. The
parties, therefore, agree to the following terms and conditions.
ARTICLES
1. The period of this Administrative Agreement shall be three years from the
date of execution of this Agreement by DLA, except that, should ▇▇▇▇▇▇ fail to
be in full compliance with any term or condition of this Agreement, the period
shall be three years from the time that ▇▇▇▇▇▇ reestablishes full compliance.
2. ▇▇▇▇▇▇ has entered into a plea agreement with the United States. A copy of
the plea agreement is attached hereto as Exhibit 1, and the terms of the plea
agreement are incorporated herein by reference. ▇▇▇▇▇▇ agrees, as a term of this
Agreement, to comply with the terms of the plea agreement.
3. ▇▇▇▇▇▇ shall maintain complete records, including original documents, of all
purchases, sales, receipts, shipments, or testing of any material or product in
any way related to government contracts or subcontracts. These records shall be
sufficient to provide complete evidence of all transactions related to items
furnished directly or indirectly by ▇▇▇▇▇▇ to the Government upon any government
procurement. These records shall be maintained for not less than four years
after final payment of any affected contract.
4. In addition to any other right DLA may have by statute, regulation, or
contract, DLA or its duly authorized representative may examine ▇▇▇▇▇▇'▇ books,
records (including test data records), and other company documents and
supporting materials for the purpose of verifying and evaluating: (a) ▇▇▇▇▇▇'▇
compliance with the terms of this Agreement; (b) ▇▇▇▇▇▇'▇ business conduct in
its dealings with all of its customers, including the Government; (c) ▇▇▇▇▇▇'▇
compliance with Federal procurement policies and accepted business practices;
and (d) ▇▇▇▇▇▇'▇ compliance with the requirements of Government contracts or
subcontracts. The materials described above shall be made available by ▇▇▇▇▇▇ at
all reasonable times for inspection, audit, or reproduction. Further, for
purposes of this provision, DLA or its authorized representative may interview
any Copley employee who consents to be interviewed at the employee's place of
business during normal business hours or at such other place and time as may be
mutually agreed between the employee and DLA. Employees may elect to be
interviewed with or without a representative of ▇▇▇▇▇▇ present.
5. ▇▇▇▇▇▇ has implemented and agrees to maintain a Business Ethics Program
involving all company employees. The Business Ethics Program consists of (a) the
Business Conduct Policy, (b) the Corporate Compliance Program, (c) the
statements of policy in Exhibits 11 and 12 to this Agreement, and (d) such
additional documents as the Audit Committee of ▇▇▇▇▇▇'▇ Board of Directors ("the
Audit Committee") may approve as parts of the Business Ethics Program. The Audit
Committee shall be responsible for overseeing the implementation by ▇▇▇▇▇▇'▇
management of the Business Ethics Program. The Business Ethics Program shall be
maintained so as to ensure that ▇▇▇▇▇▇ and each of its officers and employees
maintains the business honesty and integrity required of a Government
contractor, and that ▇▇▇▇▇▇'▇ performance of each Government contract is in
strict compliance with all applicable laws, regulations, and the terms of the
contract. The Business Ethics Program shall include, at a minimum, the following
components:
a. The written Business Conduct Policy and Corporate Compliance
Program, both adopted on January 30, 1998 by the ▇▇▇▇▇▇ Board of Directors. The
Policy and Program, as implemented, include (i) a statement of ▇▇▇▇▇▇'▇
commitment to comply with all applicable laws and regulations in the conduct of
its business; (ii) guidelines for ▇▇▇▇▇▇ employees to follow in their business
dealings on behalf of ▇▇▇▇▇▇; (iii) a notice that, consistent with Article 7 of
this Agreement, ▇▇▇▇▇▇ shall immediately discipline, up to and including
dismissal, any employee, officer, or director of ▇▇▇▇▇▇ whose conduct relating
to ▇▇▇▇▇▇'▇ business violates applicable laws, regulations, ▇▇▇▇▇▇'▇ Business
Conduct Policy, the terms of this Agreement, or basic tenets of business honesty
and integrity; (iv) a requirement that employees report to ▇▇▇▇▇▇'▇ Compliance
Coordinator any impropriety relating to ▇▇▇▇▇▇'▇ business of which they have
knowledge whether committed by an employee of ▇▇▇▇▇▇, or of the Government, or
any other person, and whether the impropriety relates to violations of law,
regulation, contract, ▇▇▇▇▇▇'▇ Business Conduct Policy, the terms of this
Agreement, basic tenets of business honesty and integrity, or any other
requirement; (v) a notice that employees may report improprieties anonymously;
and (vi) a notice that employees may report improprieties relating to ▇▇▇▇▇▇'▇
business directly to appropriate Government officials. Copies of the Policy and
Program are Exhibit 3 and 4, respectively, to this Agreement.
b. The Business Conduct Policy has been circulated to each employee of
▇▇▇▇▇▇. After reading the Code each current employee has signed in a register
(which may be individual forms kept in a loose-leaf book) to be maintained by
▇▇▇▇▇▇ and open to inspection by the Government, that the employee has read and
understood the import of the document. At least once in each calendar year, each
then-current employee shall repeat the procedure of reading the Policy and
signing the register. ▇▇▇▇▇▇ shall submit, as a part of each report to DLA
pursuant to Article 9, a statement by the Chairman of the Board that the Board
of Directors has verified that the register is being maintained, and that each
employee has signed the register as required by this provision. The register
shall be maintained and available for DLA's review and inspection during the
life of this Agreement. Within thirty days of starting employment with ▇▇▇▇▇▇,
new employees shall read the Policy and sign the register. Within the thirty
days, the new employee's immediate supervisor or other management person shall
discuss the content and requirements of the Code with the new employee.
▇. ▇▇▇▇▇▇ has instituted and shall maintain an information and
education program designed to assure that all employees are aware of all
applicable laws, regulations, and standards of business conduct that employees
are expected to follow, and the consequences both to the employee and to the
company that will ensue from any violation of such measures. Each employee of
▇▇▇▇▇▇ has received at least one hour of initial training in the ▇▇▇▇▇▇ Business
Conduct Policy. Each employee shall receive annually not less than one hour of
training in ▇▇▇▇▇▇'▇ Business Ethics Program.
▇. ▇▇▇▇▇▇ also has installed a toll-free telephone number for reporting
suspected misconduct directly to an independent telephone monitor, who, will, as
appropriate, report suspected misconduct to the Compliance Coordinator, the
General Counsel, or the Audit Committee. This telephone number is listed in the
Canton, MA telephone directory. In addition, ▇▇▇▇▇▇ has posted in prominent
places accessible, in the aggregate, to each of its employees, a notice
detailing the company's commitment to comply with all applicable laws and
regulations in the conduct of its business. The notice designates the Compliance
Coordinator to receive any reports of misconduct relating to ▇▇▇▇▇▇'▇ business
of which any employee may have knowledge, whether committed by an employee of
▇▇▇▇▇▇, an employee of the Government, or other individual or business entity;
provides the toll-free telephone number for the Compliance Coordinator; states
that any report may be anonymous; and designates the Compliance Coordinator to
be available for consultation on any questions the employee may have concerning
▇▇▇▇▇▇'▇ business practices. A copy of the notice is Exhibit 6 to this
Agreement. Every six months, starting six months from the date of this
agreement, ▇▇▇▇▇▇, as a part of the report required by Article 9, shall provide
DLA with a report identifying all calls made to the company Hotline (regardless
of the subject matter), and all instances of misconduct relating to ▇▇▇▇▇▇'▇
business that were reported to the Compliance Coordinator, or otherwise brought
to the attention of management, during the preceding six months. Such reports
shall state the nature of the reported conduct, the results of the internal
investigation, and the corrective action, if any, taken by ▇▇▇▇▇▇. A matter
pending resolution at the time of a six-month reporting period shall be reported
each six months until final resolution of the matter is reported. Negative
reports are required.
e. All written materials and training related to the Business Conduct
Policy will be provided in English and in any other language necessary to assure
that each employee understands all elements of any written or oral presentation.
6. The principal members of ▇▇▇▇▇▇ management on the date of execution of this
Agreement by DLA are
We-▇▇▇ ▇▇▇▇▇, Ph.D. Executive Vice President - Scientific and
Technical Affairs
▇▇▇▇ ▇▇▇▇▇ Executive Vice President, General Counsel,
Secretary
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Vice President, Chief Financial Officer, and
Treasurer; Compliance Coordinator
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Vice President - Sales/Marketing
▇▇▇▇▇▇▇ ▇▇▇▇▇ Vice President - Administration/Corporate
Communications
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Vice President - Operations
▇▇▇▇ ▇. ▇. ▇▇▇▇▇ President, ▇▇▇▇▇▇ Pharmaceutical International
▇▇▇▇▇▇▇ ▇▇▇▇▇ Vice President - Technical Services and Engineering
▇▇▇▇▇▇ agrees to notify DLA promptly if any of these principals leaves his or
her current position and to report the name of a successor to DLA promptly after
appointment.
7. Promotion of the ▇▇▇▇▇▇ Business Ethics Program is an element of each
manager's and supervisor's performance standards. ▇▇▇▇▇▇ has implemented and
will maintain an annual certification requirement that all managers at every
level in the company attest that they personally have (a) discussed with each
employee under their direct supervision the content and application of the
company's Business Ethics Program; (b) informed each such employee that strict
compliance with the Program is a condition of employment; and (c) informed each
such employee that ▇▇▇▇▇▇ will take disciplinary action, including termination,
for violation, in connection with the company's business, of the principles and
practices set forth in the Program, applicable laws or regulations, or basic
tenets of business honesty and integrity. A copy of the certificate used to
fulfill this requirement is attached as Exhibit 7. In addition, promotion of
▇▇▇▇▇▇'▇ Business Ethics Program will be an element of each manager's and
supervisor's own performance standards. ▇▇▇▇▇▇ will submit, as a part of each
report to DLA pursuant to Article 9, a statement by the Chairman of the Board
that the Board of Directors has verified that the certifications are being
maintained and that each manager has provided a certification as required by
this provision. The certificates shall be maintained and available for DLA's
review and inspection during the life of this agreement.
8. The Audit Committee of the Board of Directors of ▇▇▇▇▇▇ shall be responsible
for seeing to it that management implements the company's Business Ethics
Program, including maintenance and updating of the Business Conduct Policy, and
auditing of ▇▇▇▇▇▇'▇ compliance with this Agreement. The Audit Committee shall
oversee all of ▇▇▇▇▇▇'▇ compliance programs, consult with whatever advisors it
deems appropriate in matters relating to these programs, receive reports in
person or in writing not less than quarterly from the Compliance Coordinator
(and from the General Counsel if appropriate) concerning ▇▇▇▇▇▇'▇ compliance
with the Program, and take whatever actions are appropriate and necessary to
ensure that ▇▇▇▇▇▇ conducts its activities in compliance with the requirements
of the law and sound business ethics. ▇▇▇▇▇▇ shall provide to DLA copies of
written reports and minutes of the Audit Committee meetings reflecting the
reports made to the Committee on the Business Ethics Program and the Committee's
decisions or directions to management concerning any matters in any way related
to ▇▇▇▇▇▇'▇ compliance programs or this Agreement. The names of the members of
the Committee are listed at Exhibit 8. If any member of the Committee leaves the
Committee, ▇▇▇▇▇▇ shall promptly notify DLA of the change and shall report the
name of each new member to DLA promptly after election or appointment.
9. The Board of Directors of ▇▇▇▇▇▇ shall submit periodic written reports to DLA
describing the measures taken by ▇▇▇▇▇▇ to implement, and to ensure compliance
with, this Agreement. The reports must be submitted in time to be received at
DLA within three months of the effective date of this Agreement, on or before
the six-month anniversary of the effective date of this Agreement, and
thereafter on or before each six-month anniversary during the term of this
Agreement. The final report is to be received not later than one month prior to
the final day of this Agreement. A schedule of reporting dates is attached as
Exhibit 9. The reporting dates and time frames set forth in this Agreement are
deadlines for receipt of the reports at DLA Headquarters. ▇▇▇▇▇▇'▇ failure to
meet these requirements on or before the dates agreed to shall constitute a
breach of this Agreement.
The reports shall include:
o Standards of conduct/ethics/compliance training conducted and the
number of persons who attended.
o Informal notifications or initiatives relating to the Business Ethics
Program.
o Description of each Hotline call or other report of misconduct
received and disposition of each. (It is understood that "misconduct" does not
include "minor violations" within the meaning of ss. 309 of the Federal Food,
Drug, and Cosmetic Act, 21 U.S.C. ss. 336, except that such term does include
any violation of the statutes or regulations administered by FDA that results in
a recall, seizure, injunction, field alert, issuance of FDA Form # 483 (report
of inspectional observations) or Warning Letter.)
o Information required by Articles 12 and 24.
o The status of any ongoing investigation of, or legal proceedings
involving, ▇▇▇▇▇▇ brought by any Governmental entity; including times, places,
and subject matter of search warrants, subpoenas, criminal charges, criminal or
civil agreements, etc.
10. ▇▇▇▇▇▇ represents to DLA that, to the best of ▇▇▇▇▇▇'▇ knowledge, ▇▇▇▇▇▇ is
not now under criminal or civil investigation by any Governmental entity. In
addition to the periodic written reports required under Article 9, ▇▇▇▇▇▇ shall
notify DLA within two working days of the time ▇▇▇▇▇▇ learns of (a) the
initiation of any criminal or civil investigation of ▇▇▇▇▇▇ by any Governmental
entity, (b) service of subpoenas on ▇▇▇▇▇▇ by any Governmental entity, (c)
service of search warrants and/or searches carried out in any ▇▇▇▇▇▇ facility,
(d) initiation of legal action by any entity that alleges facts that, if true,
would impact upon the business responsibility of ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall provide to
DLA as much information as necessary to allow DLA to determine the impact of the
investigative or legal activity upon the present responsibility of ▇▇▇▇▇▇ for
Government contracting.
11. Between five and seven months after the effective date of this Agreement,
the Chairman of the Board of Directors or chief Executive Officer of ▇▇▇▇▇▇ and
the Compliance Coordinator or General Counsel shall offer to meet with the DLA
Special Assistant for Contracting Integrity or a designee to discuss
implementation of this Agreement. Each six months during the term of this
Agreement the Compliance Coordinator or General Counsel shall offer to meet with
representatives of the Special Assistant for Contracting Integrity to discuss
implementation of this Agreement.
12. As a manufacturer for and supplier to prime contractors, ▇▇▇▇▇▇ is required
by its customers to submit to outside audits and/or surveys conducted by the
customer or on its behalf by third parties. The written reports resulting from
all such audits or surveys will be included with reports filed under the
provisions of Article 9.
13. ▇▇▇▇▇▇ has advised DLA that, as a part of ▇▇▇▇▇▇'▇ program of
self-governance, ▇▇▇▇▇▇ has a written policy of voluntarily disclosing suspected
misconduct (as described in Article 9) involving or affecting ▇▇▇▇▇▇'▇
Government business to an appropriate Government official within fifteen days
after such misconduct is discovered by, known to, or disclosed to any management
official of the company. The misconduct to be reported includes misconduct by
any person, including, but not limited to, those associated with ▇▇▇▇▇▇ or with
the Government, and shall include misconduct disclosed to ▇▇▇▇▇▇ management from
any source. ▇▇▇▇▇▇'▇ program provides that ▇▇▇▇▇▇ immediately will investigate
any report of misconduct that comes to its attention and will notify the
Government of any potential or actual impact on any aspect of ▇▇▇▇▇▇'▇
Government business and will take corrective action, including prompt
restitution for any harm to the Government. During the term of this Agreement,
▇▇▇▇▇▇ will provide to DLA copies of all such disclosures or notice to any
Government official, within ten working days of the disclosure. The fact that
this Agreement incorporates ▇▇▇▇▇▇'▇ policy of voluntary disclosure shall not
render a disclosure made pursuant to the policy involuntary for purposes of any
agency Voluntary Disclosure program.
14. ▇▇▇▇▇▇ has distributed to every supplier and subcontractor to ▇▇▇▇▇▇ a
letter from ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman of the Board of Directors of ▇▇▇▇▇▇,
emphasizing ▇▇▇▇▇▇ commitment to procurement integrity, asking suppliers and
subcontractors not to offer or give anything of value to ▇▇▇▇▇▇ employees, and
asking suppliers and subcontractors to report to ▇▇. ▇▇▇▇▇▇ any improper or
illegal activity by ▇▇▇▇▇▇ employees, and informing them of the telephone number
for the ▇▇▇▇▇▇ Hotline. A copy of the letter is at Exhibit 10. A similar letter
will be sent to all ▇▇▇▇▇▇ suppliers and subcontractors each year in the month
of November. A copy of the letter shall be furnished to DLA.
15. ▇▇▇▇▇▇ has a written internal operating policy that ▇▇▇▇▇▇ shall not
knowingly employ, with or without pay, an individual who is listed by a Federal
Agency as debarred, suspended, or otherwise ineligible for Federal programs. A
copy of the policy is attached as Exhibit 11. In order to carry out the policy,
▇▇▇▇▇▇ shall make reasonable inquiry into the status of any potential employee
or consultant. Such reasonable inquiry shall include, at a minimum, review of
the General Services Administration's List of Parties Excluded from Federal
Procurement Programs. ▇▇▇▇▇▇ policy does not require ▇▇▇▇▇▇ to terminate the
employment of individuals who become suspended or are proposed for debarment
during their employment with ▇▇▇▇▇▇. ▇▇▇▇▇▇, however, will remove such employees
from responsibility for or involvement with ▇▇▇▇▇▇'▇ government-related business
affairs until the resolution of such suspension or proposed debarment. In
addition, if any employee of ▇▇▇▇▇▇ is charged with a criminal offense relating
to ▇▇▇▇▇▇'▇ business (other than a traffic or parking violation or a similarly
minor violation), ▇▇▇▇▇▇ will remove that employee immediately from
responsibility for or involvement with ▇▇▇▇▇▇'▇ business affairs. If the
employee is convicted or debarred, ▇▇▇▇▇▇ policy requires that the employee will
be terminated from employment with ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall notify DLA of each such
personnel action taken, and the reasons therefor, within 15 days of the action.
The salary of any officer, employee, or consultant removed from government
contracting in accordance with the ▇▇▇▇▇▇ policy set forth in this paragraph
shall be unallowable for government contracting purposes and shall not be
charged either directly or indirectly to any government contract. ▇▇▇▇▇▇ agrees
to account separately for such costs.
16. ▇▇▇▇▇▇ has a written internal operating policy that ▇▇▇▇▇▇ shall not
knowingly form a contract (other than a contract for the sale of goods by
▇▇▇▇▇▇) with, make a purchase from, or enter into any business relationship
(other than a contract for the sale of goods by ▇▇▇▇▇▇) with any individual or
business entity that is listed by a Federal Agency as debarred, suspended, or
proposed for debarment, where such contract, purchase, or business relationship
involves more than $10,000, unless there is a compelling reason to do so. A copy
of the policy is attached as Exhibit 12. If ▇▇▇▇▇▇ concludes that there is a
compelling reason, ▇▇▇▇▇▇ will provide notice to the cognizant Contracting
Officer, if any, and to DLA prior to entering such a business relationship (a)
of ▇▇▇▇▇▇'▇ intent to do so, (b) the identity of the proposed business partner,
(c) a written determination by the senior ▇▇▇▇▇▇ executive that a compelling
reason justifies the relationship, and (d) the procedures ▇▇▇▇▇▇ has established
to protect the Government's interest. Reasonable inquiry shall be made into the
status of any potential participant with ▇▇▇▇▇▇ in a transaction within the
scope of this paragraph. Such reasonable inquiry shall include, at a minimum,
review of the General Services Administration's List of Parties Excluded from
Federal Procurement Programs.
17. ▇▇▇▇▇▇ voluntarily has severed all business relations with ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Severed Employees"),
including, but not limited to, the following relationships: employer-employee,
creditor-debtor, and owner-business entity (including shareholder-corporation).
▇▇▇▇▇▇ shall not re-employ in any capacity or resume business relations with any
individuals identified to DLA as involved in or responsible for the misconduct
at issue here. Because ▇▇▇▇▇▇'▇ securities are publicly traded, ▇▇▇▇▇▇ has no
control over who purchases its securities. The fact of any Severed Employee
being a holder of ▇▇▇▇▇▇ securities shall not be considered a violation of this
Agreement.
18. ▇▇▇▇▇▇ has and shall continuously enforce the following policy:
a. The Severed Employees shall not share any office or storage space,
any building, or any computer system with ▇▇▇▇▇▇;
b. The Severed Employees shall not be permitted to enter the premises
of ▇▇▇▇▇▇.
19. ▇▇▇▇▇▇ shall notify DLA of any proposed changes in the directives,
instructions, or procedures implemented in furtherance of ▇▇▇▇▇▇'▇ Business
Ethics Program and compliance with this Agreement. DLA, or its authorized
representative, retains the right to verify, approve, or disapprove any such
changes. ▇▇▇▇▇▇ may implement a proposed change (subject to subsequent
disapproval by DLA) if ▇▇▇▇▇▇ has submitted such change to DLA and DLA has not
disapproved the change within 30 days.
20. ▇▇▇▇▇▇ has paid to DLA $ 10,000 to cover DLA's costs of independently
reviewing this matter and administering this Agreement.
21. ▇▇▇▇▇▇ shall not seek reimbursement from the Government, either directly or
indirectly, for legal or related costs expended or to be expended arising from,
related to, or in connection with, the Government's criminal investigation and
▇▇▇▇▇▇'▇ defense and settlement thereof, or in connection with the Civil
Settlement Agreement entered into by ▇▇▇▇▇▇ and the United States, or DLA's
independent administrative review, or the negotiation and preparation of this
Agreement, or the performance or administration of this Agreement. ▇▇▇▇▇▇ shall
treat these costs as unallowable costs for Government contract accounting
purposes. Included in these unallowable costs are any legal or related costs
expended on behalf of any ▇▇▇▇▇▇ employee. Nothing in this Article shall be
interpreted as relating to the tax treatment of any costs incurred by ▇▇▇▇▇▇, or
as relating to ▇▇▇▇▇▇'▇ accounting for tax purposes.
22. ▇▇▇▇▇▇ agrees to waive as to the United States Government all claims,
demands, or requests for monies of any kind or of whatever nature that ▇▇▇▇▇▇
may have or may develop in the future arising from, related to, or in connection
with, any investigation, or as a result of administrative or judicial
proceedings, or request for any other relief in law or in equity, or in any
other forum be it judicial or administrative in nature arising out of or
relating to the facts that gave rise to the proposed debarment.
23. ▇▇▇▇▇▇ hereby releases the United States, its instrumentalities, agents, and
employees in their official and personal capacities, of any and all liability or
claims arising out of the investigation, criminal prosecution, at issue here, or
the suspension (proposed debarment or debarment) of ▇▇▇▇▇▇ or the discussions
leading to this Agreement.
24. ▇▇▇▇▇▇ agrees to provide with the reports made pursuant to Article 9 a list
of all internal audit reports generated by or for ▇▇▇▇▇▇ within the preceding
six months and to make available to DLA copies of any such audit reports
requested by DLA.
25. This agreement shall inure to the benefit of and be binding upon the parties
and their respective successors and assigns. In the event that ▇▇▇▇▇▇ sells or
in any way transfers ownership of any part of the assets of ▇▇▇▇▇▇ that are
subject to this Agreement, ▇▇▇▇▇▇ shall notify DLA in advance and shall require
by the terms of the transfer that the new owner, in addition to ▇▇▇▇▇▇, shall be
bound by the terms and conditions of this Agreement, including, but not limited
to, all reporting requirements, with respect to the assets transferred by ▇▇▇▇▇▇
to such new owner. If a new owner acquires a controlling interest in ▇▇▇▇▇▇ or
one or more of ▇▇▇▇▇▇'▇ facilities, this Agreement shall continue to apply to
▇▇▇▇▇▇ or to the transferred facilities, as applicable; but nothing in this
Article shall be interpreted as extending this Agreement to any of the new
owner's other facilities or operations that were not previously under the
ownership or control of ▇▇▇▇▇▇.
26. In the event that ▇▇▇▇▇▇ purchases or establishes new business units after
the effective date of this Agreement, ▇▇▇▇▇▇ shall implement with respect to
such new business units all provisions
of this Agreement, including any training or education requirements, within 60
days following such purchase or establishment.
27. When requested, ▇▇▇▇▇▇ shall cooperate fully with any investigation of
suspected irregularities involving ▇▇▇▇▇▇'▇ operations or activities and shall
encourage present and past employees of ▇▇▇▇▇▇ to make a full and candid
disclosure of their personal knowledge of the facts and circumstances of any
such suspected irregularities. Nothing in this Article shall be interpreted as
requiring ▇▇▇▇▇▇ to waive any attorney-client privilege or the protection of the
attorney work product doctrine.
28. Provided that the terms and conditions of this Agreement are faithfully
fulfilled, DLA will not suspend or ▇▇▇▇▇ ▇▇▇▇▇▇ based on the facts and
circumstances set forth in the Information (Exhibit 2) referenced in the
Preamble herein. DLA's decision not to suspend or ▇▇▇▇▇ ▇▇▇▇▇▇ upon the facts at
issue here shall not restrict DLA or any other agency of the Government from
instituting administrative actions, including, without limitation, suspension or
debarment, should information indicating the propriety of such action come to
the attention of DLA or such other agency.
29. ▇▇▇▇▇▇'▇ compliance with the terms and conditions of this Agreement shall
constitute an element of ▇▇▇▇▇▇'▇ present responsibility for Government
contracting. ▇▇▇▇▇▇'▇ failure to meet any of its obligations pursuant to the
terms and conditions of this Agreement constitutes a cause for suspension and/or
debarment.
30. ▇▇▇▇▇▇ represents that all written materials and other information supplied
to DLA by its authorized representative during the course of discussions with
DLA preceding this Agreement are true and accurate, to the best information and
belief of the ▇▇▇▇▇▇ signatory to this Agreement. ▇▇▇▇▇▇ understands that this
Agreement is executed on behalf of DLA in reliance upon the truth and accuracy
of all such representations.
31. This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether oral or written,
relating to the subject matter hereof.
32. The provisions of this Agreement in no way alter or diminish the rights and
responsibilities of the United States to carry out its lawful functions in any
proper manner.
33. ▇▇▇▇ ▇▇▇▇▇, as Executive Vice President, General Counsel, and Secretary of
▇▇▇▇▇▇, is fully authorized to execute this Agreement, and represents that he
has authority to bind ▇▇▇▇▇▇.
34. In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
other provisions of this Agreement.
35. Any notices or information required hereunder shall be in writing and
delivered or mailed by registered or certified mail, postage prepaid as follows:
If to ▇▇▇▇▇▇, to: ▇▇▇▇ ▇▇▇▇▇
Executive Vice President and General Counsel
▇▇▇▇▇▇ Pharmaceutical Inc.
▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to DLA, to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
ATTN: Special Assistant for Contracting Integrity (GC)
Defense Logistics Agency
8725 ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or such other address as any party shall have designated by notice in writing to
the other party.
36. This Agreement, including all attachments, is a public document, and may be
distributed by DLA throughout the Government as appropriate and to other
interested persons upon request, including requests filed under the Freedom of
Information Act.
37. This Agreement may be amended or modified only by a written document signed
by both parties.
__________________ _____________________________
Date for the Defense Logistics Agency
------------------ -----------------------------
Date for ▇▇▇▇▇▇ Pharmaceutical, Inc.
LIST OF EXHIBITS
EXHIBIT 1 Plea Agreement
EXHIBIT 2 Information
EXHIBIT 3 Business Conduct Policy
EXHIBIT 4 Corporate Compliance Program
EXHIBIT 5 Poster
EXHIBIT 6 Certification Form
EXHIBIT 7 List of Members of Audit Committee
EXHIBIT 8 Dates for Reports
EXHIBIT 9 Form of Letter to Suppliers
EXHIBIT 10 Policy re Debarred Individuals
EXHIBIT 11 Policy re Debarred Contracting Parties
EXHIBIT 6
FORM FOR CERTIFICATION
BY MANAGERS
I, ___________________(print name),
_________________________(title), hereby certify that, within the last year, I
have personally (check each of the following that is applicable):
_____ (a) discussed with each employee under my direct
supervision the content and application of ▇▇▇▇▇▇'▇ Business Ethics Program;
_____ (b) informed each such employee that strict
compliance with the Program is a condition of employment; and
_____ (c) informed each such employee that ▇▇▇▇▇▇ will take
disciplinary action, including termination, for violation, in connection with
the company's business, of the principles and practices set forth in the
Program, applicable laws or regulations, or basic tenets of business honesty and
integrity.
---------------- ---------------------------
Date Signature
EXHIBIT 7
CURRENT MEMBERS OF AUDIT COMMITTEE
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
EXHIBIT 8
ARTICLE 9 REPORTING SCHEDULE
First report due: August 1, 1998
Second report due: November 1, 1998
Reports due every six months thereafter:
May 1, 1999
November 1, 1999
May 1, 2000
November 1, 2000
Final report due: April 1, 2001 (note that this date is one month before the
Agreement expires)
EXHIBIT 9
FORM LETTER TO SUPPLIERS
Dear Sir/Madam:
We are proud of our relationship with the many suppliers who have served ▇▇▇▇▇▇
Pharmaceutical Inc. through the years.
Our business associations arose and will continue to stand on the basis of
mutual respect. We value your goodwill, your service, and your ability to supply
us with quality materials and supplies at fair prices. We trust you respect our
integrity and independence, which are unencumbered by special interest and
favoritism.
In furtherance of our obligations as a supplier of pharmaceuticals to the U.S.
Government, we request that you and your employees not send any gifts or
gratuities of any kind (even those having only nominal value) to any Copley
employee.
▇▇▇▇▇▇ has established a helpline (800-711-6441) to enable employees, suppliers
and/or subcontractors to provide management with information about any possible
improper or illegal activity. Although we encourage anyone making such a report
to identify himself or herself so that we may make appropriate follow-up
inquiries, persons reporting such activity need not identify themselves.
Please convey this policy reminder to your colleagues who call on ▇▇▇▇▇▇.
Very truly yours,
▇▇▇▇▇▇ Pharmaceutical, Inc.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Chairman
EXHIBIT 10
STATEMENT OF POLICY
WITH RESPECT TO
DEBARRED INDIVIDUALS
1. ▇▇▇▇▇▇ shall not knowingly employ, with or without pay, an
individual who is listed by a Federal Agency as debarred, suspended, or
otherwise ineligible for Federal programs.
2. To carry out this policy, ▇▇▇▇▇▇ shall make reasonable
inquiry into the status of any potential employee or consultant. Such inquiry
shall include, at a minimum, review of the General Services Administration's
List of Parties Excluded from Federal Procurement Programs.
3. ▇▇▇▇▇▇ policy does not require ▇▇▇▇▇▇ to terminate the
employment of individuals who become suspended or are proposed for debarment
during their employment with ▇▇▇▇▇▇. ▇▇▇▇▇▇, however, will remove such employees
from responsibility for or involvement with ▇▇▇▇▇▇'▇ government-related business
affairs until the resolution of such suspension or proposed debarment. In
addition, if any employee of ▇▇▇▇▇▇ is charged with a criminal offense relating
to ▇▇▇▇▇▇'▇ business (other than a traffic or parking violation or a similarly
minor violation), ▇▇▇▇▇▇ will remove that employee immediately from
responsibility for or involvement with ▇▇▇▇▇▇'▇ business affairs. If the
employee is convicted or debarred, the employee will be terminated from
employment with ▇▇▇▇▇▇.
EXHIBIT 11
STATEMENT OF POLICY
WITH RESPECT TO
DEBARRED CONTRACTORS
1. ▇▇▇▇▇▇ shall not knowingly form a contract (other than a
contract for the sale of goods by ▇▇▇▇▇▇) with, make a purchase from, or enter
into any business relationship (other than a contract for the sale of goods by
▇▇▇▇▇▇) with any individual independent contractor or business entity that is
listed by a Federal Agency as debarred, suspended, or proposed for debarment,
where such contract, purchase, or business relationship involves more than
$10,000, unless there is a compelling reason to do so.
2. ▇▇▇▇▇▇ shall make reasonable inquiry into the status of any
potential participant with ▇▇▇▇▇▇ in a transaction within the scope of this
policy. Such reasonable inquiry shall include, at a minimum, review of the
General Services Administration's List of Parties Excluded from Federal
Procurement Programs.
