Exhibit 10.59
MANUFACTURING AND SUPPLY AGREEMENT
This agreement (this "Agreement") is made and entered into effective
February 14, 2001, by and among IGI, Inc., a New Jersey corporation
("IGI"), Igen, Inc., a Delaware corporation ("Igen"), Immunogenetics, Inc.,
a Delaware corporation ("Immunogentics" and, together with IGI and Igen,
the "IGI Parties") and Genesis Pharmaceutical, Inc., a Delaware corporation
("Genesis"). The IGI Parties and Genesis are each referred to herein as a
"Party" and collectively referred to as the "Parties."
WHEREAS, the IGI Parties manufacture and distribute skin care systems
known as the "WellSkin(R)" line of skin care products, which products
Genesis desires to market, sell and distribute worldwide.
WHEREAS, the IGI Parties desire to assign to Genesis all of their
rights, title and interest in and to the WellSkin(R) Trademark (as defined
in Section 3.1(c) hereof) and sell the Products (as defined below) to
Genesis upon terms and conditions to be established by this Agreement;
NOW, THEREFORE, the Parties hereby agree as follows:
1. PRODUCTS AND FIELD
1.1 The products covered by this Agreement (the "Products") shall
include those Products set forth on Schedule A attached hereto.
The IGI Parties agree to sell the Products to Genesis pursuant
to the terms of this Agreement.
1.2 The Parties agree that Genesis may only market, distribute and
sell the Products to: (i) dispensing physicians throughout the
world and (ii) with the consent of IGI, which consent may not
be unreasonably withheld, any other entity or person located
outside the borders of the United States and its territories
and possessions (collectively, the "Field").
2. TERM OF THE AGREEMENT
The term of the Agreement will come into force upon the satisfaction
of the conditions to the obligations of the Parties stated in Section
3.1 hereof (the "Effective Date"), and, unless sooner terminated as
provided in Section 10 hereof, will remain in force until December
13, 2005 (the "Initial Term"). Thereafter, upon receipt of proof,
satisfactory to Genesis, that the IGI Parties have renewed or
obtained, for a period of at least ten (10) years beginning December
13, 2005, all regulatory approvals, licenses, patents, trademarks or
other intellectual property necessary for the manufacturing and
marketing of the Products including, but not limited to, the renewal
of that certain License Agreement, dated December 13, 1995 by and
between Micro-Pak, Inc., a Delaware corporation ("Micro-Pak") and
Igen attached hereto as Exhibit C (the "Novasome License" and to
together with such regulatory approvals, licenses, patents,
trademarks and intellectual property rights, the "Renewal
Requirements"), Genesis shall have an option to renew this agreement
for an additional ten (10) year term by paying fifty thousand dollars
($50,000) to IGI (the "First Renewal Term"). Prior to the last day of
the First Renewal Term (the "First Renewal Termination Date"),
Genesis shall have an option to renew this agreement for an
additional ten (10) year term beginning on the First Renewal
Termination Date by paying ten thousand dollars ($10,000) to IGI (the
"Second Renewal Term" and, together with the Initial Term and the
First Renewal Term, the "Term").
3. CONDITIONS TO OBLIGATIONS OF THE PARTIES
3.1 The obligations of Genesis under this Agreement are subject to
the satisfaction of the following conditions:
(a) Genesis shall have received from IGI, in a form
satisfactory to Genesis and Genesis' counsel, evidence that Tristrata has
released the IGI Parties from their obligations under the IGI-Tristrata
Agreement (the "Tristrata Release");
(b) Genesis shall have received from IGI, in a form
satisfactory to Genesis' counsel, a certificate from IGI, certifying that
it has relinquished all of its rights under the IGI-Tristrata Agreement
(the "IGI Certificate");
(c) Genesis shall have received from IGI, in a form
satisfactory to Genesis' counsel, proof of the proper filing and
recordation of (i) that certain Confirmatory Assignment, dated as of
December 1, 1998 by and between Glaxo Group Limited, a corporation
organized under the laws of the United Kingdom and Glaxo Wellcome Inc., a
North Carolina corporation; and (ii) that certain Trademark Assignment,
dated as of December 18, 1998 by and between Glaxo Wellcome Inc., a North
Carolina corporation and Igen.
(d) Genesis shall have received from the IGI Parties, in a
form satisfactory to Genesis' counsel, an assignment (the "Assignment"),
substantially in the form of Exhibit A attached hereto, of all of their
rights, title and interest in and to that certain trademark, as more fully
described in Exhibit B attached hereto and made a part hereof (the
"WellSkin(R) Trademark") for any and all goods and services related
thereto.
3.2 The obligations of the IGI Parties under this Agreement are
subject to the satisfaction of the following condition: that
IGI shall have received from Genesis, in a form satisfactory to
IGI, evidence that Genesis has entered into an amendment to
that certain License Agreement by and between Tristrata and
Genesis, dated December 31, 1998 whereby Genesis and Tristrata
have agreed upon certain terms relating to products bearing the
Wellskin label (the "Genesis-Tristrata Amendment").
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the IGI Parties: Each IGI
Party, jointly and severally represents and warrants to Genesis
that the following statements are true and correct as of the
date of this Agreement:
(a) Each IGI Party is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation.
(b) Each IGI Party has full power and authority (including
full corporate power and authority) to execute and deliver this Agreement
and to perform its obligations hereunder. Without limiting the generality
of the foregoing, each IGI Party has duly authorized the execution,
delivery and performance of this Agreement by such IGI Party. This
Agreement constitutes the valid and legally binding obligation of each of
the IGI Parties, enforceable in accordance with its terms and conditions.
(c) Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which each IGI Party is
subject or any provision of the charter or bylaws of each IGI Party or
(ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any agreement,
contract, lease, license, instrument, or other arrangement to which such
IGI Party is a party or by which it is bound or to which any of its assets
is subject (or result in the imposition of any security interest upon any
of its assets). Each IGI Party does not need to give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the IGI Parties to
consummate the transactions contemplated by this Agreement.
(d) The Novasome License, attached hereto as Exhibit C, is a
valid and legally binding obligation of Micro-Pak and Igen and is in effect
as of the date hereof.
(e) The IGI Parties have obtained all regulatory approvals
that are necessary for bulk manufacturing and marketing of the Products.
(f) The IGI Parties have completed all stability studies
necessary to market the Products in their current container closure system.
(g) Igen is, as of the date of this Agreement, the lawful and
exclusive owner of the WellSkin(R) Trademark for any and all goods and
services related thereto.
(h) The IGI Parties have obtained all licenses, patents,
trademarks or other intellectual property necessary for the manufacturing
and marketing of the Products.
(i) To the best knowledge of the IGI Parties, Micro-Pak is
the lawful and exclusive owner of all patents purported to be licensed to
Igen pursuant to the Novasome License and that (A) such patents have not
been assigned or otherwise transferred from Micro-Pak to any party other
than Igen and (B) such patents have not been encumbered or pledged in any
way that adversely affects, or is reasonably likely to adversely affect,
the rights of Igen under the Novasome License.
4.2 Representations and Warranties of Genesis: Genesis represents
and warrants to the IGI Parties that the following statements
are true and correct as of the date of this Agreement:
(a) Genesis is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation.
(b) Genesis has full power and authority (including full
corporate power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder. Without limiting the generality of the
foregoing, Genesis has duly authorized the execution, delivery and
performance of this Agreement by Genesis. This Agreement constitutes the
valid and legally binding obligation of Genesis, enforceable in accordance
with its terms and conditions.
(c) Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which Genesis is subject or
any provision of the charter or bylaws of Genesis or (ii) conflict with,
result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract,
lease, license, instrument, or other arrangement to which Genesis is a
party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any security interest upon any of its assets).
Genesis does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order for Genesis to consummate the transactions
contemplated by this Agreement.
5. PRODUCTION AND SUPPLY OF THE PRODUCT LINE
5.1 The Products sold to Genesis shall be produced by the IGI
Parties on a made to order basis in bulk form and shall be
delivered to Genesis in a packaged quantity as set forth in the
applicable Order (as defined in Section 6.6 hereof) (each such
packaged quantity for a Product referred to as a "Batch").
5.2 The IGI Parties shall maintain manufacturing capacity
sufficient to meet Genesis' needs on a timely basis. The IGI
Parties also agree to maintain product and formulation support
and to use their best efforts to enhance existing products
based on the customer information and market requirements
supplied by Genesis to IGI from time to time.
5.3 The Parties may, from time to time, desire to enter into
product development or product supply agreements based upon new
product ideas submitted by either Party. The terms of those
arrangements shall be negotiated in good faith on a product-by-
product basis.
5.4 IGI shall have the right to examine, not more often than once
per annum, and at IGI's sole expense, the books and records of
Genesis as they relate to the terms of this Agreement.
5.5 Shipment. The IGI Parties will ship the Products to Genesis at
its premises in Hazel Park, Michigan or any other location
designated by Genesis as its primary premises, by a carrier or
delivery method specified by the IGI Parties. The IGI Parties
shall pay all shipment costs.
6. PRICES AND TERMS OF SALE AND LICENSING
6.1 Past Due Monies. Genesis agrees to pay to IGI on the Effective
Date, pursuant to that certain Supply and Sales Agreement,
dated December 11, 1998 by and between Genesis and IGI (the
"Genesis-IGI Agreement") an amount equal to (i) $52,399
(representing payment for the calendar quarter ending December
31, 2000) ("Quarter 4") minus (ii) $13,160 (representing a
credit towards the increase in fees charged by IGI to Genesis
for recent deliveries pursuant to the Genesis-IGI Agreement).
The total amount owed by Genesis to IGI for Quarter 4 ($52,399
less $13,160) is $39,239. Genesis also agrees to pay to IGI an
amount equal to $1,608 as a reimbursement by Genesis to IGI for
expenses incurred by IGI due to a cost of living increase under
the that certain License Agreement, dated January 1, 1996 by
and between Tristrata Technology, Inc., a Delaware corporation
("Tristrata") and IGI (the "IGI-Tristrata Agreement") for the
first two calendar quarters of the year 2000. The total amount
owed by Genesis to IGI under this Section 6.1 ($39,239 plus
$1,608) is equal to $40,847.
6.2 Lump sum payment. Genesis will pay to IGI on the Effective
Date, five hundred twenty five thousand dollars ($525,000) (the
"IGI Payment") in exchange for the Assignment. Upon the payment
by Genesis of the amounts stated in Sections 6.1 and 6.2
hereof, all of the liabilities and/or obligations of Genesis
under the Genesis-IGI Agreement shall be extinguished and the
Genesis-IGI Agreement shall immediately terminate.
6.3 During the Term, Genesis shall pay to IGI, within thirty (30)
days of receipt of a Batch, on an order-by-order basis, a
manufacturing fee (the "Manufacturing Fee") for each product as
listed on Schedule A provided, however, that no such
Manufacturing Fee shall be paid by Genesis to IGI, for any
Batches rejected by Genesis pursuant to Section 6.9 hereof or,
if applicable, the IGI Parties shall, promptly upon receiving
notice thereof, refund any Manufacturing Fees previously paid
by Genesis to IGI for such rejected Batches. All payments made
by Genesis under this Section 6.3 shall be made in U.S.
Dollars. For any new products or reformulation of old products
(unless such reformulation of old products is due to a
rejection of such old products by Genesis pursuant to Section
6.9 hereof), Genesis and IGI will establish a fee to be paid to
IGI on a product-by-product basis. The Manufacturing Fee as
listed on Schedule A attached hereto is based upon the Batch
size incurring the least manufacturing costs to IGI and will be
adjusted by IGI, as applicable according to Batch sizes stated
in a given Order, provided that Genesis receives written notice
of such adjustment at least ten (10) days prior to receipt by
Genesis of the Products subject to such adjustment and Genesis
is given an opportunity to amend such Order at its option.
Refunds for partial Batches will not be allowed.
6.4 Genesis shall pay to IGI a five percent (5%) royalty (the
"Royalty Fee") on all International Sales (as defined below) of
the Products, such Royalty Fee to be paid no later than sixty
(60) days after the close of each calendar quarter during the
Term. Fees will be calculated based upon Net Sales (as defined
below) of these International Sales. IGI acknowledges that all
sales of the Products destined for sale within the United
States and its territories and possessions shall be royalty-
free. This royalty fee shall be in addition to the
Manufacturing Fee for such Products.
(a) "International Sales" shall mean transactions whereby the
Products are sold and shipped by Genesis to purchasers located outside the
borders of the United States and its territories and possessions.
(b) "Net Sales" shall mean the total gross amounts actually
collected for all of the Products in International Sales sold by Genesis
and sold under license from Genesis by any licensee of Genesis or any sales
organization controlled by it, less any costs associated with any
governmental licenses, certificates of free sale, insurance incident to
transportation, transportation and shipping charges, excise or turnover
taxes and customs duties, bona fide trade and cash discounts and sales
commissions, and allowance for returns of the Products.
6.5 Genesis assumes responsibility for the payment of all taxes in
connection with International Sales, including any tariffs or
duties from or payable to authorities, intermediaries, agencies
or any municipality or political subdivision of any foreign
country in which International Sales are made. If Genesis is
required to withhold or deduct, from any payment made to IGI,
taxes related to the payment of the Royalty Fee or any other
fee payable by Genesis to IGI pursuant to this Agreement (a
"Tax Payment"), Genesis will pay such taxes and deduct such
amounts paid from the Royalty Fee or other applicable fee to be
paid to IGI. In the event that Genesis receives a refund for a
Tax Payment that Genesis has previously deducted pursuant to
the previous sentence from amounts payable by Genesis to IGI,
Genesis shall pay to IGI an amount equal to the portion of such
refund that corresponds to the amount previously deducted by
Genesis from amounts payable by Genesis to IGI for the
applicable Tax Payment.
6.6 Forecasting and Order Process. Not later than ninety (90) days
prior to the beginning of each calendar year during the Term,
Genesis shall provide IGI with a non-binding full-year estimate
of Genesis' yearly requirements for the Products, including a
six (6) month rolling forecast for the Products, the first
three months of which will be considered a firm and binding
order. The forecast will be updated quarterly, on or before the
l5th day of each calendar quarter. Each three month forecast,
as updated each calendar quarter beginning with the forecast
for the first three months, shall be considered a firm and
binding order (an "Order").
6.7 Other Terms and Conditions of Sale. All binding orders of the
Products shall be accompanied by purchase orders issued by
Genesis; which purchase orders are to be consistent with the
forecasting procedure as described in Section 6.6 above. To the
extent that there is any discrepancy between the terms of the
Order and the terms of this Agreement, the terms of this
Agreement shall govern.
6.8 Specifications. During the Term, the IGI Parties shall assure
that the Products shall conform to each of the following
specifications (collectively, the "Specifications") on the date
of delivery to Genesis:
(a) The Products shall meet the specifications agreed upon by
the Parties and shall be manufactured in accordance with the Batches
approved by the Parties and as described in Schedule A attached hereto.
(b) The Products shall be manufactured in accordance with all
applicable federal, state and local regulatory requirements.
(c) The Products shall be delivered to Genesis within 30 days
of receipt by IGI of an Order.
(d) The Products shall meet all requirements of the Food and
Drug Administration of the United States (the "FDA ") for over-the-counter
drugs, including, but not limited to, the following:
(i) The Products shall be tested for homogeneity,
stability and release in accordance with validated analytical methods.
During the Term, Ongoing Tests (as defined in below) of the Products shall
be conducted by the IGI Parties.
(1) "Ongoing Tests" shall mean certain ongoing
tests conducted by the IGI Parties promptly upon the request of Genesis or
as required by FDA regulations, for homogeneity, stability, release and
process methods necessary to ensure that the Products meet all FDA
requirements. Genesis shall pay IGI for all reasonable costs incurred by
the IGI Parties in performing those Ongoing Tests that are part of the
stability study program. The costs of all other Ongoing Tests shall be the
sole responsibility of the IGI Parties. Genesis shall, at its own expense,
ship any Products to be tested to the premises of the applicable IGI
Parties.
(ii) The Products shall be manufactured in accordance
with validated processing methods. During the Term, Ongoing Tests of the
Products shall be conducted by the IGI Parties. The Parties hereby agree
that the first three Batches delivered under this Agreement containing
Products that are over-the-counter sunscreens shall be considered process
validation batches until such time as the three such Batches have been
manufactured in accordance with this Agreement. The IGI Parties hereby
represent and warrant that the validation process described in this Section
6.8(d)(ii) conforms to the requirements set out by the FDA concerning
validated processing methods.
(iii) Upon execution of this Agreement, each Product
shall have established, validated holding periods for bulk stock of not
less than ten (10) days. As each Product is manufactured by the IGI Parties
pursuant to an Order placed by Genesis, IGI shall continue to perform
validation testing until each Product will have established, validated
holding periods for bulk stock of not less than thirty (30) days.
(iv) Upon execution of this Agreement, the IGI Parties
shall cause the Products to have proven stability for at least two (2)
years. During the Term, Ongoing Tests of the Products shall be conducted by
the IGI Parties. By the close of the first year following the date of
execution of this Agreement, the Products shall have proven stability for
at least three (3) years.
(v) The products with a SPF declaration shall have had
their Sun Protection Factor proven by a testing method performed in
compliance with the requirements of the Final Monograph for Over the
Counter Sun Protection Products promulgated by the FDA.
During the Term, the IGI Parties shall continue to provide all
testing and research necessary to enable the Products to continue meeting
all FDA requirements for bulk products. In the event that the Products are
determined not to meet all FDA requirements for bulk products, the IGI
Parties shall, at their sole expense and immediately following knowledge by
any of the IGI Parties of such situation, take all actions necessary to
ensure that the Products meet all FDA requirements at such time.
6.9 Right to Reject Delivery. Provided that Genesis has notified
IGI within twenty (20) days of receipt of a particular Batch of
Products, Genesis may refuse to accept all, and not less than
all of the Products in any Batch that does not conform to the
Specifications, in which case such Batch will not be considered
to have been delivered by the IGI Parties. Genesis and IGI will
establish procedures for the containment, accumulation, sorting
and return of nonconforming Products. IGI shall pay the round
trip shipping costs for nonconforming Products not accepted by
Genesis. The IGI Parties shall, within thirty (30) days after
receipt of notice from Genesis that Products will not be
accepted by Genesis, deliver replacement Products to Genesis in
conformity with all of the Specifications.
6.10 Cost Adjustments. The Manufacturing Fee may be adjusted by IGI
(an "Adjustment") by up to 2.5% for a given year for material
changes in the cost of raw goods, materials, shipping and labor
used to manufacture the Products ("IGI Costs") on January 1 of
each year during the Term, provided that IGI notifies Genesis,
in writing, of the basis for such Adjustment at least ninety
(90) days prior to such date. An Adjustment in excess of 2.5%
may occur on January 1 of a given year provided that IGI
provides Genesis, in writing and in a form satisfactory to
Genesis, (i) a notice of the basis for such Adjustment and
(ii) supporting documentation evidencing such material changes
in IGI Costs at least ninety (90) days prior to such date.
7. WARRANTIES AND PARTS
7.1 Warranties. All products formulated by the IGI Parties, and all
labeling provided by the IGI Parties shall be subject to IGI's
standard warranty that the Products meet agreed specifications,
and are manufactured in accordance with approved processes and
comply with all applicable bulk manufacturing federal, state
and local regulatory requirements. Specifications for products
listed in Schedule A attached hereto shall be IGI's product
specifications. THIS WARRANTY IS SPECIFICALLY LIMITED BY
SECTION 11.2 BELOW.
8. TECHNOLOGY
8.1 As the IGI Parties develop new technology related to the
Products, the IGI Parties shall immediately inform Genesis on a
confidential basis and the Parties hereby agree to negotiate in
good faith to reach mutually acceptable terms, including
distribution and pricing terms, relating to the potential
marketing and/or use of any such new technology. However, it is
understood that the IGI Parties are not required to disclose to
Genesis or provide to Genesis any opportunity to purchase or
market any technology not related to the Products, developed
pursuant to a venture involving an independent third party, or
if otherwise restricted from doing so under any legal
requirement. If requested by IGI, Genesis will execute
appropriate non-disclosure documents relating to any trade
secrets disclosed by IGI.
9. REGULATORY, TRADEMARK, LICENSING AND PATENT MATTERS
9.1 Regulatory Approvals. The IGI Parties represent and warrant
that they have obtained all regulatory approvals that are
necessary for bulk manufacturing and marketing of the Products
and shall use their best efforts to obtain all necessary
regulatory approvals for bulk manufacturing and marketing of
any additional Products to be developed in connection with this
Agreement.
9.2 Patent Infringement. The IGI Parties shall indemnify, defend,
and hold Genesis harmless from and against all loss, liability,
damages, claims, fines, penalties, demands, actions and
proceedings and all costs and expenses connected therewith,
including reasonable attorneys' fees, in connection with
infringement of any United States or foreign patent or other
intellectual property right based on the manufacture, sale or
distribution of the Products, except for claims based on
modifications or unapproved promotional claims requested or
made by Genesis with respect to which Genesis agrees to
indemnify, defend, and hold IGI harmless. The IGI Parties will
assume the defense of any suit based on any such claim of
infringement brought against Genesis. The IGI Parties shall
also indemnify, defend and hold Genesis harmless from and
against all loss, liability, damages, claims, fines, penalties,
demands, actions and proceedings and all costs and expenses
connected therewith, including reasonable attorneys' fees,
arising out of issues related to (i) trademark infringement
with respect to the WellSkin(R) Trademark and (ii) patent
infringement with respect to the Novasome License and/or the
patents that underlie the Novasome License, brought under any
jurisdiction or arising anywhere in the world. The IGI Parties
will assume, at their own expense, the defense of any suit
based on any such claim of infringement brought against
Genesis. If, as a result of any claim, proceeding or threat
thereof with respect to the Products or the WellSkin(R)
Trademark, Genesis is prevented from sublicensing,
manufacturing, processing, selling or otherwise distributing
any or all of the Products, the IGI Parties shall use their
best efforts to procure for Genesis the right, without
materially altering functionality or performance, to continue
to sublicense, manufacture, process, sell or otherwise
distribute the Products at the IGI Parties' sole expense. After
receipt by Genesis of notice of the commencement of any action,
Genesis will notify IGI of such action. The provisions of this
Section 9.2 shall survive termination or assignment of this
Agreement for a period of not more than five (5) years from the
earlier of the date of expiration of this Agreement or the
Termination Date, as the case may be.
10. TERMINATION
This agreement may be terminated as follows:
10.1 Either Party shall have the right to terminate this Agreement
(including any pending orders placed by Genesis) immediately
upon written notice to the other Party in the event such party
files or has filed against it, any petition in a bankruptcy or
similar proceeding or enters into any form of arrangement with
its creditors; or demonstrates a financial condition of such a
nature that in the terminating Party's reasonable judgment the
terminated Party shall not be capable of performing all of its
obligations hereunder.
10.2 The IGI Parties, acting unanimously, may only terminate this
Agreement immediately if Genesis fails to perform any of its
material obligations under this Agreement and such
nonperformance continues for more than sixty (60) days after
written notice is received by Genesis. The provisions of this
Section 10.2 shall not apply to nonperformance of Genesis under
Sections 6.3 or 6.4 for any amounts due that are in dispute.
10.3 Genesis may terminate this Agreement in accordance with the
following provisions:
(a) Genesis may terminate this Agreement immediately if any
representation or warranty of any IGI Party is materially inaccurate or if
any of the IGI Parties fails to perform any of its obligations under this
Agreement through the failure to provide, on a timely basis, the Products
in satisfactory form to Genesis pursuant to Sections 3.1, 3.2, 5.9 and 6.1
hereof and such nonperformance continues for a period of sixty (60) days.
In the event that Genesis terminates this Agreement pursuant to this
Section 10.3(a), the IGI Parties shall use their best efforts to find and
implement a replacement for its services, satisfactory to Genesis. In the
event that the IGI Parties do not find and implement such a replacement
within ninety (90) days from the Termination Date, in addition to the
effects of termination described in Section 10.5 below, the IGI Parties
shall transfer to Genesis, as soon as possible following such date, all
formulas and data necessary to manufacture the Products in accordance with
the Specifications and a fully paid, perpetual, royalty-free license to,
any and all intellectual property rights necessary to manufacture the
Products in accordance with the Specifications (such formulas, data and
license collectively referred to as, the "Manufacturing Instructions").
(b) If the sale or distribution of any of the Products is or
is reasonably likely to become prohibited by applicable laws, rules or
regulations then in effect or soon to be in effect then either the IGI
Parties (acting unanimously) or Genesis may immediately terminate this
Agreement at any time.
10.4 Genesis may terminate this Agreement for any other reason with
a minimum of six months notice of intent to terminate except as
otherwise provided herein.
10.5 Effects of Termination. On the date that this Agreement is
terminated pursuant to any of the provisions of this Section 10 (the
"Termination Date"), the following shall occur:
(a) Genesis shall be required to pay to IGI, within a
reasonable time following the Termination Date, any Manufacturing Fees or
Royalty Fees incurred as a result of Orders placed prior to the Termination
Date. From and after the Termination Date, Genesis shall not be required to
pay to IGI (i) any Manufacturing Fees incurred after such Termination Date
or (ii) any Royalty Fees for products other than those Products Ordered
from the IGI Parties prior to the Termination Date.
(b) Any and all Products manufactured by the IGI Parties in
response to an Order made by Genesis prior to the Termination Date shall be
delivered by the IGI Parties to Genesis pursuant to the terms of such
Order.
11. CONFIDENTIALITY
The Parties acknowledge that each may from time to time disclose to
the other Confidential Information. "Confidential Information" is defined
as any information disclosed by either Party to the other in documentary or
other tangible form in connection with the Agreement, and which is clearly
marked at the time of disclosure as being confidential or proprietary. Any
information disclosed orally by either Party to the other Party shall be
considered Confidential Information, provided the same is reduced to a
documentary form, marked "Confidential" or "Proprietary" and transmitted to
the other Party within sixty days after the oral disclosure. Throughout the
Term and at all times thereafter, each of the Parties shall retain any
Confidential Information received from the other Party in strict
confidence, shall not disclose any Confidential Information to any third
party, and shall not use any Confidential Information for any purpose
whatsoever other than to carry out the purposes of this Agreement. The
disclosure of Confidential Information by either Party within its own
company shall be restricted to only those of its directors, officers,
employees and attorneys and other agents who have a need to know and have
been advised of the restrictions on disclosure and use pursuant to this
Section 11. Notwithstanding any other provisions of this Agreement, the
obligations of confidentiality and non-use of each of the Parties under
this Section 11 shall not apply, or shall cease to apply, to any
Confidential Information disclosed by either Party to the other Party if
such information (i) is or becomes at any time publicly known through no
wrongful act of the receiving Party; (ii) is at any time, without breach of
the Agreement, rightfully obtained by the receiving party from a third
party who is free to pass it on to the receiving Party; (iii) is at any
time, without breach of this Agreement, developed by the receiving Party,
completely independently of any disclosure by the disclosing Party; (iv) is
approved for release by the written authorization of the disclosing Party;
(v) is required to be disclosed pursuant to the requirement of a government
agency or operation of law after all reasonable legal remedies to maintain
confidentiality have been exhausted or the Parties have entered into an
appropriate protective order restricting the disclosure of such
Confidential Information; or, (vi) was provided to or in the possession of
the receiving Party prior to the signing of this agreement (other than
information so provided pursuant to the Genesis-IGI Agreement). Upon the
termination or assignment of this Agreement for any reason, all
Confidential Information in documentary or other tangible form received
from the other Party shall be promptly returned by the receiving Party to
the other Party together with all copies and notes thereof, and the duties
of confidentiality defined herein shall survive the termination or
assignment of this Agreement until the expiration of ten (10) years after
the date of such termination.
12. PRODUCT LIABILITY INSURANCE AND LIMITATION OF LIABILITY
12.1 Products Liability. The IGI Parties shall be responsible for
and shall defend, indemnify and hold harmless, Genesis, its
dealers and its customers from and against all loss, liability,
damages, claims, fines, penalties, demands, actions and
proceedings and all costs and expenses connected therewith,
including reasonable attorneys' fees, in connection with any
third party for bodily injuries and/or property damage related
claims arising out of the use or alleged use of Products
supplied or manufactured by the IGI Parties. The IGI Parties
shall not be responsible for any claims arising solely from the
alteration or contamination of any of the Products due to the
repackaging, mishandling or improper storage of such Products
by Genesis. The IGI Parties shall maintain general liability
insurance, with products liability coverage, in such amounts
and upon such terms as the IGI Parties deem advisable, but in
any event not less than three million dollars ($3,000,000) in
coverage. A certificate of insurance evidencing the coverage
required under this Section 12.1 shall be furnished by IGI to
Genesis as soon as is practicable following Genesis' written
request thereof. The provisions of this Section 12.1 shall
survive termination or assignment of this Agreement for a
period of not more than five (5) years from the earlier of the
date of expiration of this Agreement or the Termination Date,
as the case may be.
12.2 Limitation of Liability. Genesis understands and agrees that
the IGI Parties shall have no liability to Genesis for
consequential, or incidental damages or expenses in the event
that the IGI Parties are unable to perform under the Agreement
by reason of any present or future law, regulation or order of
any political subdivision, authority or agency of competent
jurisdiction which prevents or restricts the IGI Parties from
manufacturing, selling, distributing, shipping, or otherwise
offering any Products contemplated by the Agreement. THE SOLE
REMEDY FOR BREACH OF ANY AND ALL WARRANTIES AND THE SOLE REMEDY
FOR IGI'S LIABILITY OF ANY KIND WITH RESPECT TO PRODUCTS
PROVIDED HEREUNDER (OTHER THAN LIABILITY ARISING PURSUANT TO
SECTIONS 8.2 AND 11.1 HEREOF) AND ANY OTHER PERFORMANCE BY IGI
UNDER OR PURSUANT TO THIS AGREEMENT SHALL BE LIMITED TO AMOUNTS
ACTUALLY PAID BY GENESIS TO IGI UNDER THIS AGREEMENT. GENESIS
AGREES THAT IGI SHALL NOT BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR FOR ANY LOSS
OF PROFIT, REVENUE OR DATA BASED UPON IGI'S NONPERFORMANCE OR
BREACH OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT WHETHER
BASED IN CONTRACT, TORT, OR OTHERWISE, EVEN IF ANY IGI PARTY
SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH POTENTIAL
LOSS OR DAMAGE.
13. NON-COMPETITION.
13.1 Neither the IGI Parties, nor any of their respective
subsidiaries or affiliates shall:
(a) distribute, market or manufacture any product for anyone
other than Genesis, which is the same as or reasonably similar to any of
the Products and which is to be sold in the Field;
(b) appoint, designate, license or grant rights to any
distributor, marketer or seller, other than Genesis (whether acting as an
independent contractor, agent or other representative or in any other
capacity), relating to any product which is the same as or reasonably
similar to any of the Products and which is to be sold in the Field;
(c) distribute, market or manufacture, any product for anyone
other than Genesis, which competes, directly with any of the Products and
which is to be sold in the Field; and
(d) appoint, designate, license or grant rights to any
distributor, marketer or seller, other than Genesis (whether acting as an
independent contractor, agent or other representative or in any other
capacity), relating to any product which competes, directly with any of the
Products and which is to be sold in the Field.
(e) In the event that Genesis chooses to engage a
manufacturer other than the IGI Parties or their respective subsidiaries
and affiliates, to manufacture for Genesis any Product, then for the
purposes of this Section 13, the provisions of Section 13.1 shall cease to
apply solely with respect to such Product, as such Product is currently
marketed for use, and shall continue in full force and effect with respect
to all other Products.
13.2 Neither the IGI Parties, nor any of their respective
subsidiaries or affiliates shall: (i) distribute, market or
sell any product, to anyone other than Genesis which bears the
WellSkin(R) Trademark or (ii) appoint, designate, license or
grant rights to any distributor, marketer or seller, other than
Genesis (whether acting as an independent contractor, agent or
other representative or in any other capacity), to any product
which bears the WellSkin(R) Trademark. This Section 13.3 shall
survive termination of this Agreement.
14. GENERAL PROVISIONS
14.1 Notices. All notices permitted or required hereunder shall be
in writing and shall be sent by registered or certified mail,
by fax with a confirmation copy sent by mail, or by courier
service. Notices shall be sent to the addresses in this
Agreement or such other addresses as a Party may designate from
time to time by written notice in accordance with this Section
14.1.
14.2 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes any and all
previous agreements, memoranda, or understandings of the
Parties.
14.3 Amendment. This Agreement may only be amended by a written
document signed by both Parties.
14.4 Force Majeure. Neither Party shall be liable for any failure or
delay of performance under this Agreement (except for payment
obligations under this Agreement to which this Section shall
not apply) due to technological changes or developments, acts
of God, acts of government or other circumstances causing
impossibility of performance.
14.5 Consequential Damages. The IGI Parties shall not be liable for
loss or damage of any kind resulting from delay or the
inability to deliver on account of fire, strikes, labor
disputes, shortages of materials or products, accident, war,
delay or defaults of common carriers or suppliers, acts of
civil or military authorities, or from any other cause beyond
their control.
14.6 Waiver of Compliance. Any failure by any Party hereto to
enforce any term or condition of this Agreement shall not be
construed as a waiver of that Party's right thereafter to
enforce each and every term and condition of this Agreement.
14.7 Governing Law and Dispute Resolution. This Agreement shall be
governed and construed under and in accordance with the laws of
the State of New York, without regard to principles of
conflicts of laws. Disputes arising from this Agreement shall
be discussed and settled amicably by good faith negotiations
between the IGI Parties and Genesis. Any such disputes which
cannot be settled amicably and by such good faith negotiations
within 60 days after written notice by one Party to the other
shall be resolved at the request of either Party, to the
exclusion of a court of law, by binding arbitration in
accordance with the rules of the American Arbitration
Association in the State of New York then in effect; provided,
however, that either Party shall be free to maintain an action
in any jurisdiction for purposes of obtaining specific
performance of this Agreement or otherwise obtaining injunctive
or equitable relief.
14.8 Costs and Expenses. Except as specifically otherwise provided
herein, during the Term, a Party hereto shall pay at its own
expense any and all costs or expenses incurred by such Party in
connection with carrying out its duties and obligations under
this Agreement and in the solicitation, sales, service, and
support of Products.
14.9 Announcements. Neither Party will make any public
announcements, regarding their relationship without prior
notification to the other Party. Genesis is aware that IGI,
being a public company, has legal requirements that must be
considered relating to any such announcements, and it will
agree to cooperate with these requirements.
14.10 Benefit; Assignment. This Agreement shall be binding upon the
Parties and their respective successors and assigns and shall
inure to the benefit of the Parties and their respective
successors and permitted assigns. No Party may assign, by
operation of law or otherwise, any of its rights or delegate,
by operation of law or otherwise, any of its duties under this
Agreement without the prior written consent of the other Party,
which consent shall not be unreasonably withheld. Any
assignment or delegation of this Agreement by any IGI Party
without the prior written consent of Genesis shall be void,
except as part of a sale of all of the assets necessary for the
performance of the IGI Parties under this Agreement; provided
that, the entity purchasing such assets has, prior to such
sale, agreed to assume all of the obligations of the IGI
Parties under this Agreement and shall have confirmed such
assumption, by written notice satisfactory to Genesis, prior to
such sale. Any assignment or delegation of this Agreement by
Genesis without the prior written consent of IGI shall be void,
except as part of a sale of all of the assets necessary for the
performance of Genesis under this Agreement; provided that, the
entity purchasing such assets has, prior to such sale, agreed
to assume all of the obligations of Genesis under this
Agreement and shall have confirmed such assumption, by written
notice satisfactory to IGI, prior to such sale.
14.11 Severability. If a court of competent jurisdiction determines
that any provision of this Agreement is invalid, unenforceable
or illegal for any reason, such determination shall not affect
or impair the validity, legality and enforceability of the
other provisions of this Agreement which shall remain in full
force and effect in the same manner and to the same extent as
if the invalid, unenforceable or illegal provision had not been
contained in this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth in the first paragraph of this Agreement.
GENESIS PHARMACEUTICAL, INC. IGI, INC.
By: /s/ Leonard Mazur By: /s/ John Ambrose
Name: Leonard Mazur Name: John Ambrose
Title: Chairman, Chief Title: President and
Executive Officer Chief Operating Officer
IGEN, INC. IMMUNOGENETICS, INC.
By: /s/ John Ambrose By: /s/ John Ambrose
Name: John Ambrose Name: John Ambrose
Title: President Title: President
Exhibit A
FORM OF TRADEMARK ASSIGNMENT
[SEE ATTACHED]
February 12, 2001
SCHEDULE "A"
WellSkin Products in Bulk for Genesis Pharmaceuticals
Code Product Batch Size Genesis Cost/Kg.
- ---------------------------------------------------------------------------
59611 12% GA Facial Lotion, SPF 15 400 kg. $25.27
59621 14% GA Facial Cream, SPF 15 400 kg. $26.54
59630 Advance Sunscreen, SPF 25 400 kg. $24.31
59665 14% GA Hand Cream, SPF 15 400 kg. $28.22
59670 14% Body Lotion, SPF 15 2500 kg. $13.51
59615 12% GA Facial Cleanser 2500 kg. $ 7.11
59625 Smoothing Eye Cream 400 kg. $34.08
59660 Oily Skin Toner 400 kg. $10.31
59675 Advance Moisturizing Cream 400 kg. $20.10
Night Time Cream 400 kg. $23.95
Exhibit B
THE TRADEMARK
Registration Registration
Trademark No. Date
- ---------------------------------------------------
WELLSKIN 2217752 January 12,1999
Exhibit C
NOVASOME LICENSE
[SEE ATTACHED]
Schedule A
THE PRODUCTS
[SEE ATTACHED]