EXHIBIT 10 (xxiii)
DEVELOPMENT AND DISTRIBUTION AGREEMENT
BETWEEN
F.H. FAULDING & CO. LIMITED
AND
FAULDING PHARMACEUTICAL CO.
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . 2
2. APPOINTMENT. . . . . . . . . . . . . . . . . . . 6
3. THE PRODUCTS.. . . . . . . . . . . . . . . . . . 7
4. THE PRODUCT SUMMARY SHEETS.. . . . . . . . . . . 9
5. PRODUCT DEVELOPMENT REVIEW PROCESS.. . . . . . .10
6. PRODUCT REGISTRATION.. . . . . . . . . . . . . .12
7. FORECASTS AND ORDERS. . . . . . . . . . . . . . .13
8. INVOICED PURCHASE PRICE;PURCHASE PRICE ADJUSTMENT.14
9. SHIPMENT OF PRODUCTS. . . . . . . . . . . . . . .17
10. AUDITS.. . . . . . . . . . . . . . . . . . . . .19
11. SUB-LICENSEES. . . . . . . . . . . . . . . . . .20
12. QUALITY CONTROL. . . . . . . . . . . . . . . . .21
13. PRODUCT ACCEPTANCE.. . . . . . . . . . . . . . .22
14. NOTIFICATION OF ADVERSE DRUG EXPERIENCES.. . . .24
15. RECALLS. . . . . . . . . . . . . . . . . . . . .25
16. RELATIONSHIP OF FAULDING AND FPC.. . . . . . . .26
17. TRADEMARKS AND LABELING. . . . . . . . . . . . .26
18. ADVERTISING. . . . . . . . . . . . . . . . . . .27
19. NOTICES. . . . . . . . . . . . . . . . . . . . .28
20. WARRANTIES AND INDEMNIFICATIONS. . . . . . . . .28
21. CONFIDENTIALITY. . . . . . . . . . . . . . . . .30
22. TAXATION ISSUES. . . . . . . . . . . . . . . . .31
23. TERM AND TERMINATION.. . . . . . . . . . . . . .32
24. FORCE MAJEURE. . . . . . . . . . . . . . . . . .33
25. COMPLIANCE WITH LAW. . . . . . . . . . . . . . .33
26. EXECUTION OF ALL NECESSARY ADDITIONAL DOCUMENTS.34
27. WAIVER.. . . . . . . . . . . . . . . . . . . . .34
28. ASSIGNMENT AND AMENDMENT.. . . . . . . . . . . .34
29. ENTIRE AGREEMENT.. . . . . . . . . . . . . . . .34
30. GOVERNING LAW. . . . . . . . . . . . . . . . . .34
31. SEVERABILITY.. . . . . . . . . . . . . . . . . .34
32. HEADINGS.. . . . . . . . . . . . . . . . . . . .35
Schedule A Initial Products
DEVELOPMENT AND DISTRIBUTION AGREEMENT dated January
, 1996 (the "Agreement") by and between F.H. FAULDING & CO.
LIMITED, a corporation organized under the laws of the State
of South Australia with offices at 160 Greenhill Road,
Parkside 5063, South Australia ("FAULDING") and FAULDING
PHARMACEUTICAL CO. a corporation organized under the laws of
the State of Delaware with its principal place of business at
200 Elmora Avenue, Elizabeth, New Jersey ("FPC").
WHEREAS, FAULDING is engaged in the development and
manufacture of certain injectable pharmaceutical and medical
products and FPC is a distributor and seller of injectable
pharmaceutical and medical products;
WHEREAS, FAULDING has negotiated the termination of
certain agreements pursuant to which FAULDING, or one of its
Affiliates, had granted to certain third parties the exclusive
right to distribute the Initial Products (as hereinafter
defined) in the United States;
WHEREAS, the parties wish to formalize their
business arrangement pursuant to which FAULDING has permitted
FPC, since September 1995, to distribute one of the Initial
Products, which is identified on Schedule A hereto, on an
exclusive basis in the Territory;
WHEREAS, FPC wishes to be appointed, and FAULDING
has agreed to appoint FPC, as FAULDING's exclusive distributor
in the Territory of each of the Initial Products under the
terms and provisions of this Agreement;
WHEREAS, the parties intend, on an ongoing basis, to
review FAULDING's development program for the Territory with
the expectation that new injectable products may be added as
Products under the provisions of this Agreement;
NOW, THEREFORE, in consideration of the mutual
covenants contained herein, FAULDING and FPC agree to the
following:
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
(a) "ADE" shall mean adverse drug experience as
defined under the laws or regulations of the Regulatory
Authority.
(b) "Affiliates" shall mean (i) an entity
controlled by a common parent that owns more than fifty
percent of the voting stock of both such entity and one of the
parties to this Agreement and (ii) such parent company.
(c) "Antecedent Supply Agreements" shall mean (i)
the Marketing and Supply Agreement dated February 2, 1990
between FAULDING Medical Device Co. (formerly, David Bull
Laboratories U.S.A. Inc.) and Schein Pharmaceutical Inc. and
(ii) the Manufacturing and/or Supply Agreement, dated August
23, 1993, between FAULDING (formerly, David Bull Laboratories
Pty Ltd.) and Fujisawa USA, Inc.
(d) "Average Selling Price" shall mean, with
respect to each Product in any Calendar Quarter, the Net Sales
Value of the Net Units Sold during such Quarter divided by the
number of Net Units Sold during such Quarter.
(e) "Batch" with respect to any of the Products
shall refer to a separate and distinct quantity of such
Product, which is (i) processed under continuous and identical
conditions and designated by a distinctive batch number and an
expiration date and (ii) approved by the Regulatory Authority.
(f) "Calendar Quarter" shall mean those three month
periods commencing, respectively, on January 1, April 1, July
1 and October 1, except that the initial Calendar Quarter
shall mean the period commencing on the FPC Licensing Date and
ending on the last day of the Calendar Quarter in which the
FPC Licensing Date occurs.
(g) "Certificate of Analysis" shall mean a document
certifying that a Batch of a Product meets all Specifications,
which is dated and signed by a duly authorized representative
of the Quality Control or Quality Assurance department of
FAULDING.
(h) "DEA" shall mean the United States Drug
Enforcement Agency.
(i) "FDA" shall mean the United States Food and
Drug Administration.
(j) "Firm Order" shall have the meaning set forth in
Section 7(a) of this Agreement.
(k) "FPC Licensing Date" shall mean the later of
the Inclusion Date and the date upon which the parties obtain
all necessary approvals and/or registrations from the
Regulatory Authority to enable Marketing by FPC of such
Product in the Territory.
(l) "GMP" shall mean good manufacturing practice as
required by the regulations of the FDA and/or required by any
other like authority, whether federal or state, regulating the
development and manufacturing and Marketing of therapeutic
substances in any part of the Territory and Australia and the
import and Marketing of therapeutic substances in any part of
the Territory.
(m) "Inclusion Date" shall mean with respect to any
product the date upon which the parties hereto have executed
a Product Summary Sheet for such product and have thereby
incorporated such product as a Product under the terms and
conditions of this Agreement as of such date.
(n) "Initial Products" shall mean the Products set
forth on Schedule A of this Agreement, which the parties
intend to incorporate as Products, as set forth in Section
3(a) of this Agreement.
(o) "Invoiced Purchase Price" shall have the
meaning set forth in Section 8(b)(iii) of this Agreement.
(p) "Issue of Concern" shall have the meaning set
forth in Section 4 of this Agreement.
(q) "Marketing" in respect of any of the Products
means the promotion, advertising, distribution and sale of
such Product and includes a product launch campaign.
(r) "Marketing Year" shall mean with respect to
each Product the period from July 1 to June 30 of each
calendar year, except that the initial Marketing Year shall
mean the period commencing on the FPC Licensing Date and
ending on the last day of the month of June immediately
following the FPC Licensing Date.
(s) "Net Sales Value" shall mean with respect to
the Net Units Sold of any Product during any Calendar Quarter
the gross sales of FPC from sales of such Product to
independent third parties (not including amounts received as
reimbursement of freight, insurance and other costs or taxes
incurred as a result of the direct sale to an independent
third party) invoiced by FPC during such Quarter, less price
discounts, trade returns, trade allowances, chargebacks or
rebates relating to such sales, as calculated using FPC's
standard accounting procedures, in accordance with U.S.
generally accepted accounting principles, consistently
applied.
(t) "Net Units Sold" shall mean, with respect to
the sales of any Product during any Calendar Quarter during
the term of this Agreement, the total number of units of such
Product sold during such Quarter, less any returns.
(u) "Product Review Liaison" shall mean the liaison
appointed by each party to communicate with the other party
with regard to the product development review process with
respect to each Product, as set forth in Sections 4 and 5 of
this Agreement.
(v) "Product Summary Sheet" in respect of each
Product shall have the meaning set forth in Section 4 of this
Agreement.
(w) "Products" shall mean those injectable products
for which a Product Summary Sheet has been prepared and
countersigned by both parties to this Agreement and such
product has thereby been incorporated and made a part of this
Agreement.
(x) "Purchase Price" shall mean with respect to each
of the Products sold to FPC hereunder the greater of (i) fifty
(50%) percent of the Average Selling Price or (ii) 110% of the
U.S. TMC of such Product.
(y) "Purchase Price Adjustment" shall have the
meaning set forth in Section 10(b) hereof.
(z) "Registration" with respect to any Product
shall mean the gaining of all permissions from all Regulatory
Authorities, including, without limitation the DEA, necessary
to permit the commencement of Marketing by FPC of such Product
in the Territory.
(aa) "Regulatory Application" shall mean, as the
case may be, the New Drug Application, the Abbreviated New
Drug Application or the Abbreviated Antibiotic Drug
Application that is filed with the FDA in respect of a
particular Product.
(bb) "Regulatory Authority" shall mean the FDA, the
DEA and/or any other like authority, whether federal or state,
regulating the import, and Marketing of therapeutic substances
in any part of the Territory and the Therapeutics Goods
Administration and/or any other like authority in Australia.
(cc) "Specifications" of a Product shall mean the
specifications for the Product as stated in the Regulatory
Application for such Product.
(dd) "Territory" shall mean the U.S. and its
territories and possessions.
(ee) "U.S." shall mean the United States of
America.
(ff) "U.S. TMC" with respect to any Product shall
mean the cost to FAULDING of manufacturing each unit of such
Product during any Calendar Quarter on a fully absorbed
basis, calculated according to FAULDING's standard costing
system, subject to normal accounting procedures, consistent
with generally accepted Australian accounting principles and
, subject to the provisions of Section 8(c) hereof, as
converted into U.S. dollars at FAULDING's budgeted exchange
rate, which is ordinarily established in the Calendar Quarter
commencing January 1 of each Year; provided, however, such
exchange rate shall not be greater than 105% nor less than 95%
of the T/T mid rate of the Australia and New Zealand Banking
Group Limited in Adelaide, Australia on the date that the
budgeted rate is established.
2. APPOINTMENT.
(a) Subject to the provisions of Sections 3, 4 and
5 of this Agreement, FAULDING hereby grants to FPC beginning
on the FPC Licensing Date for each Product and extending for
the period of time that such Product is included as a Product
under the terms of this Agreement, the exclusive right to
Market such Product in the Territory, and FAULDING agrees to
supply to FPC, subject to the provisions of Sections 5 and 7
of this Agreement, all of its requirements of such Product.
(b) FPC agrees that it will neither Market nor
attempt to Market any Product outside the Territory either on
its own account or through any third party nor will it sell
any Product to any person or corporation within the Territory
where FPC has reasonable grounds to believe that such other
person or corporation intends to sell such Product outside the
Territory.
(c) Subject to the provisions of Section
5(b)(vii), 5(c)(iv) and 5(d) of this Agreement, FPC agrees
that during the term of this Agreement, it shall not source
any of the Products from any third party without the prior
written consent of FAULDING.
(d) Subject to the provisions of Section 5 of this
Agreement, FPC shall use reasonable efforts to Market the
Products covered by this Agreement during the term hereof and
as contemplated by Section 6 of this Agreement, to obtain
and/or maintain the Registration of the Products in the
Territory.
(e) Subject to the time tables set forth in the
Product Summary Sheets and/or established or modified during
the product development review process contemplated by Section
5 of this Agreement, FAULDING shall use reasonable efforts, as
may be applicable, to develop the Products for Registration
and Marketing in the Territory and, subject to the provisions
of Sections 7, 9 and 10(c) of this Agreement, to supply FPC
with Products.
(f) FAULDING hereby grants FPC a right of first
refusal to Market within the Territory as a Product hereunder
any generic injectable product developed or manufactured by
FAULDING, and acceptable for U.S. registration, during the
term of this Agreement, unless otherwise agreed to by the
parties.
3. THE PRODUCTS.
(a) The parties agree that it is their mutual
intention that each of the Initial Products shall be
incorporated into this Agreement as a Product on a date
subsequent to the date on which exclusive marketing rights
under the Antecedent Supply Agreements terminate, as set forth
on Schedule A hereto. The parties further acknowledge that
FPC has been marketing one of the Initial Products, which is
identified on Schedule A hereto, since September 1995 and that
all pertinent terms of this Agreement, including without
limitation, the payment terms set forth in Sections 8 and 9
hereto, shall apply to sales of such Initial Product that have
occurred from September 1995 up to the date hereof as if such
sales had occurred during the term hereof. As soon as
reasonably practicable after the date hereof, the parties
shall commence negotiations of the terms of a Product Summary
Sheet to include each Initial Product as a Product under the
terms of this Agreement.
(b) As provided, and subject to the conditions set
forth, in Section 2(f) hereof, at any time during the term of
this Agreement, FAULDING may notify FPC in writing, by means
of FAULDING's "Monthly International Business & Product
Development Minutes", or by any other written communication
delivered to FPC, of its intent to make a pharmaceutical
product not covered by this Agreement available to FPC (the
"FAULDING Notice of Intent"). FPC shall have sixty days from
its receipt of the FAULDING Notice of Intent to inform
FAULDING in writing whether or not it wishes to negotiate the
terms of a Summary Product Sheet to include such product as an
additional Product under the terms of this Agreement (the
"Section 3(b) Notice"). If (i) FPC informs FAULDING that it
does not have an interest in negotiating with FAULDING, (ii)
FPC fails to deliver to FAULDING a Section 3(b) Notice, within
sixty (60) days of its receipt of the FAULDING Notice of
Intent, of its interest in negotiating with FAULDING, or (iii)
the parties, after negotiating in good faith for a period of
an additional sixty (60) days from the date of receipt by FPC
of the Section 3(b) Notice, are unable to come to an agreement
on the terms that would make such new product a Product
hereunder, FAULDING shall have the right to register and
Market such product in the Territory and/or enter into an
agreement with any third party for the registration and
Marketing of such product in the Territory; provided, however,
that the terms offered to any such third party shall not be
more favorable than those that had been offered to FPC in the
negotiations described in this Section 3(b).
(c) At any time during the term of this Agreement, FPC
may notify FAULDING in writing of its desire to Market a
pharmaceutical product in the Territory (the "FPC Product
Proposal"). Such Proposal will contain as full a description
of the product as reasonably possible, including, without
limitation, detailed unit forecasts for the first five-year
Marketing period, the estimated selling prices for all
presentations requested of FAULDING and, as applicable, the
requested timetable for development and delivery of
registration materials for submission of a Regulatory
Application.
(d) The parties acknowledge and agree that it is their
mutual intent under Section 3(c) for FPC to, and FPC hereby
does, grant FAULDING a right of first refusal to supply
injectable anti-cancer products on FPC's behalf but that,
subject to the limitation set forth in the last sentence of
Section 3(e) hereof, FPC shall be in no way restricted from
sourcing any other products from any other third party.
(e) FAULDING shall have sixty (60) days from its receipt
of the FPC Product Proposal to inform FPC in writing whether
or not it wishes to negotiate the terms of a Product Summary
Sheet to include such product as an additional Product under
the terms of this Agreement (the "Section 3(e) Notice"). If
(i) FAULDING informs FPC through such Notice, that it does not
have an interest in negotiating with FPC, (ii) FAULDING fails
to deliver a Section 3(e) Notice to FPC, within sixty (60)
days of its receipt of the FPC Product Proposal or (iii) the
parties, after negotiating in good faith for a period of an
additional sixty (60) days from the date of receipt by FPC of
the Section 3(e) Notice, are unable to come to an agreement on
the terms that would make such new product a Product
hereunder, FPC shall have the right to Market such product
independently of this Agreement and to enter into an agreement
with a third party for the purchase, and(as may be applicable)
the development, of such product from such third party;
provided, however, that the material terms offered to such
third party must be essentially the same as, and, in any event
no more favorable than, the material terms of the FPC Product
Proposal delivered to FAULDING. Notwithstanding the provisions
of Section 3(d) hereof to the contrary, once FPC has delivered
an FPC Product Proposal to FAULDING hereunder, it may not
Market, nor negotiate with any third party to develop,
manufacture or Market the product which is the subject of the
FPC Product Proposal until one of the conditions set forth in
Subsection (i), (ii) or (iii) of this Section 3(e) has been
satisfied.
4. THE PRODUCT SUMMARY SHEETS.
(a) The parties, upon reaching an agreement between
them to incorporate any product as a Product, as described in
Section 3 of this Agreement, shall prepare and countersign a
Product Summary Sheet in respect of such Product.
(b) Each Product Summary Sheet shall describe the
Product and shall set forth the material terms with respect to
the development, manufacturing and Marketing of the Product
that have been agreed to by the parties as of the execution
date thereof, including, without limitation, the targeted
submission date to the FDA, and as set forth in Section 8 of
this Agreement, the estimated U.S. TMC per unit, the
estimated Net Selling Price per unit and the Invoiced
Purchase Price per unit for the first Marketing Year. The
detailed content and requirements of the Product Summary Sheet
will be agreed upon between the parties from time to time.
5. PRODUCT DEVELOPMENT REVIEW PROCESS.
(a) The parties shall each appoint a liaison (the
"Product Review Liaison") to communicate with each other with
regard to information required in Section 4 and this Section
5 hereof. Either party may change its Product Review Liaison
by written notice to the other party.
(b) During the term of this Agreement, the parties,
through their Product Review Liaisons (i) shall amend the
Product Summary Sheets, through a written document
countersigned by both such Liaisons, to reflect any material
changes in the terms between them with respect to each Product
and (ii) shall promptly give each other written notice, by
facsimile, of any "Issue of Concern" associated with any of
the Products (as defined hereafter in Section 5(c)hereof) as
to which FAULDING or FPC obtains information.
(c) For purposes of this Agreement, an "Issue of
Concern" will mean any circumstance that, in the reasonable
opinion of either party, may materially affect the timing and
continued economic viability of the development, manufacture
or Marketing of any Product, including, without limitation,
the following:
(i) the manufacture, use or sale of any of the Products
has resulted in, or may result in, the infringement of a
third party's patent or other intellectual property
rights or the occurrence of any other intellectual
property issue associated with any of the Products that
has, or may have, a material effect on either party's
business;
(ii) the development of any Product or submissions of a
Regulatory Application to the Regulatory Authority is not
going to be achieved, or is not likely to be achieved,
within six (6) months after the relevant due dates as
agreed to by the parties and set forth in the most
current Product Summary Sheet;
(iii) during any Marketing Year, the forecasted sales of
such Product are less than 75% of the forecasted sales
listed in the most current Product Summary Sheet for such
Product;
(iv) during any Marketing Year, the forecasted net
profit before taxes is less than 75% of the forecasted
net profit before taxes from sales of such Product that
is listed in the most current Product Summary Sheet for
such Product;
(v) projected development, manufacturing, Marketing or
Registration costs of either party are currently expected
to be greater than 130% of such costs previously
forecasted by such party;
(vi) the estimated Net Selling Price, the estimated U.S.
TMC or the Invoiced Purchase Price, in the reasonable
opinion of either party, does not reflect prevailing
market conditions of such Product;
(vii) FAULDING is unable to supply a Product ordered by
FPC for a period of time exceeding ninety (90) days after
the requested delivery date; or
(viii) either party has become aware of a serious safety
concern with respect to such Product.
(d) The recipient of any notice with respect to an
Issue of Concern will promptly acknowledge receipt of such
information, and, thereafter, the parties will negotiate in
good faith to resolve any such Issue of Concern to their
mutual satisfaction. FAULDING shall not be required to
deliver any Product pursuant to which it has delivered or
received, as the case may be, an Issue of Concern Notice under
Section 5(c)(i) or 5(c)(viii)hereof until such time, if ever,
that the parties agree that such Issue of Concern is no longer
applicable to such Product.
(e) After due deliberation and good faith
negotiations between them, if either party determines that it
is not in its best interest to continue to develop,
manufacture or sell, as the case may be, a Product or Products
pursuant to the terms of this Agreement, such party may, by
written notice to the other party, delete such product as a
Product hereunder. In addition to its right to suspend
delivery of Products set forth in Section 5(d) hereof,
FAULDING may only be obligated to deliver Products, which have
been deleted pursuant to this Section 5(e),that are ordered
prior to the date of deletion and the provisions of Section
23(c) shall apply with respect to the deleted Products insofar
as such provisions are consistent with such deletion.
6. PRODUCT REGISTRATION.
(a) FPC shall apply for registration, or for
amendments to existing registrations, of the Products as
required by applicable laws and regulations and obtain and
maintain such registrations in its own name and at its own
expense; provided, however, that prior to expending any such
registration costs, FPC shall submit a written estimate of
such costs to FAULDING for FAULDING's prior written approval.
and provided, further, however, that upon expiration or the
termination of the Agreement for any reason, whatsoever, or
upon the deletion of any Product hereunder, FPC, at the
request of FAULDING, shall promptly transfer the registration
to FAULDING, or its designee, of all of the Products affected,
as the case may be, by such expiration, termination or
deletion. After the transfer of the registration of such
Products to FAULDING or its designee, FAULDING shall promptly
reimburse FPC for (i) all of FPC's reasonable expenses(A) that
relate directly to such registration or transfer (other than
the expenses set forth in Section 6(b) hereto for which FPC is
solely responsible) and (B) for which FAULDING has given its
prior written approval, as set forth in this Section 6(a), or
(ii) for such other amount as may be negotiated by the parties
prior to the transfer.
(b) FPC shall bear the responsibility and expense
for any applicable filings and approvals made in connection
with advertising and promotional materials and shall, at its
sole expense, comply with requirements imposed by the
Regulatory Authority relating to the marketing and
distribution of each of the Products in the Territory.
(c) FAULDING shall provide reasonable assistance to
FPC in the fulfillment of its obligations pursuant to Sections
6(a) and 6(b) hereof.
7. FORECASTS AND ORDERS
(a) At least ninety (90) days prior to the
commencement of the Marketing of any Product, and, thereafter,
by the fifteenth (15th) day of each subsequent month during
the term of this Agreement, FPC shall provide FAULDING with a
forecast of the number of Batches of each Product to be
ordered for delivery during each month for the succeeding
twenty-four (24) month period. Such forecast shall not be a
binding obligation on either party with the exceptions that
(i) the forecast for the most current four month period shall
constitute a firm order(the "Firm Order"); and (ii) FAULDING
shall not be required to supply during any such four month
period more than one hundred and twenty per cent (120%) of the
amount forecasted in the Firm Order for such four month period
but will use all reasonable efforts to supply the full amount
ordered.
(b) The Firm Orders and acknowledgments thereof may
be issued or given on FPC's or FAULDING's standard purchase
order forms, as the case may be, containing standard terms and
conditions, but the terms and conditions of this Agreement,
and not such standard terms and conditions, shall govern the
purchase and sale of Products under this Agreement.
(c) The Firm Order shall state in reasonable detail
the quantities of each Product to be delivered to FPC and the
requested dates for delivery of each such Product. Except
with the written consent of FAULDING, no Firm Order of any
Product will require FAULDING to make a shipment of such
Product (i) on a date less than ninety (90) days after the
date of the order or (ii) containing less than the Batch size
of such Product.
(d) FPC shall pay in full in U.S. dollars against
FAULDING's invoices for any Product shipped to it pursuant to
this Agreement within sixty (60) days from the date of
delivery of such Products to the destination in the Territory
designated by FPC. FPC shall wire transfer all payments
hereunder to a bank or banks designated in writing by FAULDING
unless instructed otherwise by FAULDING. As set forth in
Section 8 hereof, FPC shall pay the aggregate Invoiced
Purchase Price for each of the Products, subject to the
Purchase Price Adjustment mechanism described in such Section.
8. INVOICED PURCHASE PRICE;
PURCHASE PRICE ADJUSTMENT.
(a) FPC shall sell each of the Products to third
parties in arms' length transactions at prices to be set by
FPC in its sole discretion.
(b) Ninety (90) days prior to the commencement of
each Marketing Year, the parties will amend each Product
Summary Sheet to reflect the following information agreed upon
by the parties for such Marketing Year with respect to each
unit of such Product:
(i) FAULDING's good faith estimate of the U.S.
TMC;
(ii) FPC's good faith estimate of the
Net Selling Price; and
(iii) the "Invoiced Purchase Price",
which for purposes of this Agreement
shall be the parties' good faith
estimate of the Purchase Price, as
calculated in Section 1(x) hereof.
(c) All orders of each Product delivered to FPC by
FAULDING hereunder during each Marketing Year will be invoiced
at the Invoiced Purchase Price for such Product set forth in
such Product Summary Sheet, unless the parties agree in
writing to an amended Invoiced Purchase Price and provided,
further, that if the aggregated Purchase Price of any
Product at the end of the first, second or third Calendar
Quarter of any Marketing Year is greater than 110% or less
than 90% of the aggregated Invoiced Purchase Price paid for
such Product during such Quarter, the Invoiced Purchase Price
per unit for the following Calendar Quarter shall equal the
Purchase Price per unit of such Product during the immediately
preceding Quarter. It is further agreed that during any
Marketing Year if:
(i) the applicable currency exchange rate
either increases or decreases by greater
than five (5%) percent; or
(ii) the amount equal to 110% of the U.S.
TMC of any Product either increases or
decreases by greater than ten (10%) due to
(i) a change in the cost of the active drug
substance such that the cost of the affected
Product changes by greater than plus or
minus ten (10%) percent and/or (ii) a change
in the applicable currency exchange rate,
then FAULDING, in a fully documented written proposal, may
request FPC's approval of a TMC change with respect to any
such affected Product. FPC shall respond in writing to
FAULDING's request within thirty (30) days of FPC's receipt of
such request and will not unreasonably withhold approval of
such request.
(d) Within thirty (30) days after the end of each
Calendar Quarter, FPC shall calculate and send to FAULDING a
statement reflecting the following financial data with respect
to the purchase of each of the Products from FAULDING and the
sale of each the Products to its customers during such Quarter
(FPC's "Quarterly Statement"):
(i) the number of Net Units Sold, the Net
Sales Value of the Net Units Sold and the
Average Selling Price per unit;
(ii) the Purchase Price per unit and Purchase
Price payable for Net Units Sold, as
calculated in Section 1(w) hereof,
including the calculation of (i) fifty
(50%) percent of the Average Selling
Price and (ii) 110% of the U.S. TMC of
such Product, as set forth in Section
1(w) hereof;
(iii) the Invoiced Purchase Price per unit
and the Invoiced Purchase Price for
Net Units Sold for purchases during
such Period;
(iv) if (a) the Purchase Price for Net Units
Sold is greater than the Invoiced
Purchase Price for Net Units Sold, the
Purchase Price Adjustment due FAULDING or
(b) the Invoiced Purchase Price for Net
Units Sold is greater than the Purchase
Price for Net Units Sold, the Purchase
Price Adjustment due FPC; and
(v) the sum of the Purchase Price
Adjustments for each of the
Products sold during such Period
and the amount payable to
FAULDING or FPC, as the case may
be.
(e) The parties acknowledge and agree that (i) it
is necessary for the calculations set forth in this Section 8
for FPC to, and FPC shall, account for all sales of each of
the Products hereunder on a strict first-in-first-out basis
and (ii) notwithstanding the provisions of Section 8(c) to
the contrary, at no time during the term hereof will FAULDING
be paid by FPC for any Product hereunder in an amount less
than 110% of the U.S. TMC as agreed in the Product Summary
Sheet on the date of supply of such Product. FPC will compute
the calculations set forth under Section 8(d) hereof using the
U.S. TMC indicated in the most current Product Summary Sheet
at the beginning of the Period unless informed otherwise by
FAULDING in writing under the procedure outlined in Section
8(c). In the event that FAULDING notifies FPC of the revision
of the U.S. TMC, such revised U.S. TMC will apply for all
subsequent shipments of such Product unless otherwise agreed
to by the parties.
(f) The calculations of FPC set forth in its
Quarterly Statement shall be final, unless within twenty (20)
days after receipt of such Statement, FAULDING notifies FPC in
writing of any objection to such calculations, specifying such
objections in reasonable detail. Upon receipt of any such
objection, the matter shall be resolved as set forth in
Section 8(g) of this Agreement.
(g) If FAULDING objects to any calculations in
FPC's Quarterly Statement (the "Disputed Amount"), then each
of the parties shall endeavor to agree promptly upon such
Disputed Amount. In the event that a Disputed Amount has not
been resolved in writing within thirty (30) days after the
date of receipt by FPC of FAULDING's written objection, then
the Disputed Amount shall be submitted to an internationally
recognized accounting firm mutually acceptable to the parties
(the "Arbitrator"). Nothing herein shall be construed to
authorize or permit the Arbitrator to determine any question
or matter whatever under or in connection with this Agreement,
except the determination of what adjustments, if any, must be
made in FPC's calculations set forth in its Quarterly
Statement. Within thirty (30) days of the submission of any
dispute to the Arbitrator pursuant to this Section 8(g), the
Arbitrator shall render a decision along with a statement of
reasons therefor. The decision of the Arbitrator shall be
final and binding upon each party hereto. The fees and
expenses of the Arbitrator for any determination under this
Section 8(g) shall be paid by the party against whom the
discrepancy is resolved.
(h) FPC's payment to FAULDING or any amount due
FPC, as the case may be and as calculated in FPC's Quarterly
Statement, shall be delivered to the other party in U.S.
dollars via wire transfer to the bank or banks designated by
such other party shall be paid by FPC or FAULDING, as the case
may be, within sixty (60) days after the end of the Calendar
Quarter to which the changes pertain. With respect to any
Disputed Amount in FPC's Quarterly Statement, the party
responsible shall pay or repay the other party, or make any
other adjustment required, within twenty (20) days after the
resolution of the dispute by the parties or the decision of
the Arbitrator, as the case may be.
(i) Each of the parties shall keep proper books of
account on all records with respect to any of the Products,
clearly recording all matters and transactions relating to any
of the Products. Each of the parties will permit authorized
representatives of the other party, upon reasonable prior
written notice to inspect such books and records, as set forth
in Section 10 of this Agreement.
9. SHIPMENT OF PRODUCTS
(a) Deliveries of the Products to the destination in
the Territory designated by FPC shall be made by FAULDING,
F.O.B. FAULDING's manufacturing plant in Australia, and as
otherwise designated in the Firm Orders. FAULDING will
ensure that deliveries of the Products are accompanied by
quality control certificates of analysis and will send copies
of such certificates of analysis and shipment details
contemporaneously by telecopier (confirmed by hard copies
mailed) to FPC. FAULDING shall also ensure that all Products
shall be transferred under appropriate storage conditions and
packaged for shipment according to all laws and regulations of
the Territory and Australia, as applicable.
(b) FPC may choose the means of shipment by
notifying FAULDING of its choice on its Firm Order. FPC shall
pay for all freight and insurance costs. Identification of
the goods to the contract shall occur and risk of loss shall
pass to FPC upon delivery of the Products to the carrier. In
the event FPC has not furnished FAULDING with shipping and
insurance instructions in its Order, FAULDING shall deliver
the Products to FPC, F.O.B. FAULDING's manufacturing plant in
Australia, within ninety (90) days of acceptance of the order
by delivery to a carrier selected by FAULDING and FAULDING
shall, in its sole discretion, obtain insurance coverage
thereon, the cost of which shall be borne by FPC and added to
the purchase price.
(c) FPC (i) shall be responsible for the payment of
any import, customs or similar duties imposed by governmental
authorities and of any federal, state, county or municipal
sales or use tax, excise or similar charge, or any other tax
assessment (other than that assessed against income), license,
fee or other charge lawfully assessed or charged on the use
or transportation of the Products sold and delivered to FPC
pursuant to this Agreement; and (ii) shall obtain any
licenses, authorizations or other documents required by any
governmental authorities in order to permit the importation of
the Products sold and delivered to FPC pursuant to this
Agreement. FAULDING shall be responsible, at FPC's cost, for
obtaining necessary export clearances and any licenses,
authorizations or other documents required by any governmental
authorities in order to permit the exportation of the Products
delivered and sold to FPC pursuant to this Agreement.
(d) FAULDING shall include in its invoice to FPC,
described in Section 7 of this Agreement, all expenses
incurred by FAULDING in connection with shipping the Products
and FPC shall pay all such amounts reflected on such invoice
in accordance with the provisions of Section 7(d) hereof.
10. AUDITS.
(a) FPC shall have the right, no more than twice
annually, with a limit of two FPC representatives on each such
occasion and at its own cost, to visit FAULDING's
manufacturing plant(s) for the Products during regular
business hours, upon giving reasonable prior written notice to
FAULDING. During any such visit, FPC shall have the right (i)
to inspect the manufacturing facilities, (ii) to inspect
quality control procedures and (iii) to review any applicable
records to ensure that FAULDING complies with current GMP
regulations and other applicable regulations for the Products.
(b) FPC shall also have the right, no more than
twice annually and at its own cost, during regular business
hours, upon giving reasonable prior written notice to FAULDING
to have an independent professionally qualified auditor or
other qualified representative of FPC, reasonably approved by
FAULDING, audit FAULDING's records relative to the total
manufacturing costs and the calculation of the U.S. TMC of any
of the Products and of any other incidental costs chargeable
to FPC hereunder.
(c) FAULDING shall have the right, no more than
twice annually and at its own cost, during regular business
hours, upon giving reasonable prior written notice to FPC to
have an independent professionally qualified auditor or other
qualified representative of FAULDING, reasonably approved by
FPC, audit FPC's records relative to FPC's books of account,
as set forth in Section 8 hereof.
(d) The party conducting the audit shall assume all
risk of loss and indemnify and hold the other party harmless
from and against any and all loss, liability, damage, claim
and expense including, but not limited to, reasonable
attorneys' fees arising out of or resulting from the auditing
party's presence on the audited party's premises.
(e) Each of the parties will permit any inspection
by the Regulatory Authority, which is required for
Registration and Marketing of any of the Products, of all
records and reports pertinent to the development,
manufacturing, transport and Marketing of each Product.
(f) Each of the parties shall retain any records or
data with respect to their obligations and services pursuant
to this Agreement, and the costs thereof, for a period equal
to the longer of the period of time in accordance with the
pertinent regulations and requirements of Australian Tax
Office and Australian Stock Exchange and the Regulatory
Authorities in the Territory, including, without limitation,
the regulations and requirements of the FDA, the U.S. Internal
Revenue Service and the U.S. Securities and Exchange
Commission and five (5) years after the date of the
termination or expiration of the Agreement.
11. SUB-LICENSEES.
(a) FPC is authorized to appoint its own agents or
sub-licensees ("Sub-licensees) for the solicitation of orders
for and sub-distribution of such Product in the Territory.
The appointment of any Sub-licensee shall be on such terms and
conditions as FPC may reasonably require in writing, provided
such terms and conditions are not inconsistent with the terms
and conditions of this Agreement.
(b) Where a Sub-licensee has been appointed by FPC
pursuant to this Section 11, FPC agrees that it shall at all
times be solely responsible for the acts, or omissions of such
Sub-licensee and hereby agrees to indemnify FAULDING against
any and all loss, liability, damage, claims, cost and expense
(inclusive of attorney's fees and disbursements) arising from
or in connection with such Sub-licensee's acts, or omissions.
12. QUALITY CONTROL.
(a) FAULDING shall perform the quality control
tests on each of the Products necessary for conformity of the
Products to the Specifications.
(b) FAULDING shall provide FPC with reasonable
advance written notice of any proposed changes to the method
of manufacture, associated facilities or other validated
processes associated with any of the Products. FAULDING shall
not make any such change, which requires prior approval by the
Regulatory Authority, before such approval has been obtained.
(c) FAULDING shall label each of the Products and
apply Batch numbers and expiration dates to each Batch of
Products, as required for such Product by the Regulatory
Authority. Upon the testing of each Batch of any Product,
FAULDING will promptly deliver a copy of the Certificate of
Analysis with respect to such Batch to FPC by facsimile.
Deliveries of each Batch of Product will also be accompanied
by a copy of the relevant Certificate of Analysis.
(d) Each party will maintain complete and accurate
records for the periods set forth in Section 10(f) hereof.
Each of the parties will use commercially reasonable efforts
to ascertain the retention requirements of the pertinent
Regulatory Authorities and will keep the other party informed
of any changes that it becomes aware of that may reasonably
impinge upon a Product.
(e) FAULDING agrees that it will cooperate with FPC
in its efforts to maintain the commercial viability of each of
the Products in the Territory, including, but not limited to,
supplying the data necessary to obtain and maintain
Registration approval, as provided for in Section 6(a) of this
Agreement.
(f) Each party shall immediately notify the other
party of any inspections by any Regulatory Authority that are
"for cause", a result of a Recall of any of the Products or
that may, directly or indirectly, in the reasonable opinion of
such party, impinge upon the ability of either party to supply
or Market any of the Products, including, without limitation,
inspections of suppliers requiring approval of the Regulatory
Authority.
13. PRODUCT ACCEPTANCE.
(a) If FPC claims that there is a shortage of any
of the Products delivered by FAULDING pursuant to a Firm
Order, it shall submit written notice to FAULDING within ten
(10) days of the date of the delivery of such Order. In case
of an alleged or actual non-delivery, a written claim must be
submitted to FAULDING within thirty (30) days of FAULDING's
delivery advice notice. In the absence of such a written
claim, in the case of either alleged shortage or non-delivery,
the Products shall be deemed to have been delivered in
accordance with this Agreement. In any event, FPC shall not
be entitled to refuse to accept delivery by reason only of an
alleged or actual shortage.
(b) All Products received by FPC shall be deemed
accepted unless FPC gives FAULDING written notice (the
"Objection Notice") within thirty (30) days of such receipt
specifying the manner in which the Products do not conform to
the Specifications. The Objection Notice shall be accompanied
by written reports of any testing performed by or for FPC on
the relevant Products. Upon receipt of the Objection Notice,
FAULDING may request FPC to return the relevant Products or
samples thereof for further testing. The test results, if any,
submitted to FAULDING by FPC shall be deemed conclusive unless
FAULDING notifies FPC within seven (7) days after the
completion of tests reasonably required to support or refute
FPC's Objection Notice that it disagrees with such test
results. In the event of such notice by FAULDING, the
relevant Products or samples thereof shall be submitted to a
mutually acceptable independent laboratory (the "Independent
Laboratory") for analysis and a written report (the "Report"),
the costs of which shall be paid by the party against whom the
discrepancy is resolved. In the event that the results of the
Report determine that any of the Products objected to by FPC
do not meet the Specifications for such Product, FAULDING will
use commercially reasonable efforts to replace such rejected
Products with conforming goods within ninety (90) days from
the date of the Report, provided that the departure from
Specifications is not due to the fault or act of FPC. All
transportation, shipping and insurance costs and other fees
incident to the shipping back to FAULDING of the Products
determined by the Report to be defective and the shipping to
FPC of the replacement Products will be paid for by FAULDING
and all costs incident to the shipping back of conforming
goods will be paid for by FPC.
(c) In the event that any of the Products are
returned to FPC by its customers for the reason that said
Products are claimed to be defective, FPC, subject to the
provisions of Section 14 hereof, shall notify FAULDING within
thirty (30) days of such return by written notice (the "Return
Notice") specifying the manner in which such Products are
claimed to be defective. Upon receipt of the Return Notice,
FAULDING may request FPC to return the Products which are the
subject of the Return Notice or samples thereof for testing.
If FAULDING concludes that such Products do not conform to the
Specifications or are otherwise defective, FAULDING will
replace such Products with conforming goods within sixty (60)
days after the completion of such tests as are reasonably
required to support or refute the Return Notice, provided that
the departure from Specifications is not due to the fault or
act of FPC or its customer. If FAULDING concludes that the
Products conform to the Specifications and are not otherwise
defective, it shall notify FPC of its objection to the Return
Notice within thirty (30) days of its receipt of the Return
Notice or its receipt of the samples, whichever is later. If
FPC disagrees with FAULDING's conclusion, then the Products
shall be submitted to the Independent Laboratory for a Report,
the costs of which shall be paid by the party against whom the
discrepancy is resolved. In the event that the results of the
Report determine that any of the Products returned to FPC do
not meet the Specifications or are otherwise defective,
FAULDING will use commercially reasonable efforts to replace
such Products with conforming goods within ninety (90) days
from the date of the Report, provided that the departure from
Specifications is not due to the fault or act of FPC or the
customer. All transportation, shipping and insurance costs
and other fees incident to the shipping back to FAULDING of
the Products (i) determined by the Report to be defective and
the shipping to FPC of the replacement Products will be paid
for by FAULDING; and (ii) determined by the Report not to be
defective and the return shipment thereof to FPC will be paid
for by FPC.
(d) Any other complaints received by FPC with
respect to any of the Products, other than complaints
regarding the handling, shipping, supply and labeling of the
Products (collectively, the "Distribution Complaints"), shall
be forwarded to FAULDING and all Distribution Complaints shall
be handled by FPC. Each party shall promptly deliver to the
other party a copy of all correspondence and reports arising
from any such complaints.
14. NOTIFICATION OF ADVERSE DRUG EXPERIENCES.
(a) The parties shall each appoint a liaison (a
"Medical Liaison Officer") to communicate with each other with
regard to information required in this Section 14 and Section
15 hereof. Either party may change its Medical Liaison
Officer by written notice to the other party.
(b) During the term of this Agreement, FAULDING and
FPC shall give each other notice, as set forth in this Section
14, of any ADE associated with any of the Products as to which
FAULDING or FPC obtains information in accordance with the
following:
(i) Any ADE information obtained by FPC and any
ADE information obtained by FAULDING, which in
FAULDING's reasonable opinion may impact upon
FPC's Registration or Marketing of the Product
in the Territory, shall be reported to the
other's Medical Liaison Officer, by telephone
and in writing (only by facsimile) within two
(2) calendar days after initial receipt of the
information. The recipient shall acknowledge
receipt of such information within twenty four
(24) hours of its receipt.
(ii) The reports shall contain to the extent
reasonably possible all information required
by the Regulatory Authority.
(iii) Each of the parties will maintain complete and
accurate records of each ADE for such periods
as may be required by applicable law, but not
less than five (5) years.
(c) FPC will file any ADE Report for any Product
required under applicable laws or regulations of the
Regulatory Authority. Each party shall provide the other
party with copies of all correspondence between the Regulatory
Authority and itself related to Product safety, and
promotional material. Copies of all such correspondence with
the Regulatory Authority covered by this subsection (c) shall
be provided to the other party by the party involved within
ten (10) days of its receipt or delivery, as the case may be,
of such correspondence. In addition, each party shall keep the
other party timely advised in advance of any meetings or
discussions with any Regulatory Authority relevant to the
safety and efficacy of any of the Products.
(d) If FAULDING determines it is necessary to issue
a report with respect to the medical efficacy or safety of any
Product, FAULDING shall provide such report to FPC in
sufficient time to allow for issuance to FPC customers.
15. RECALLS.
(a) In the event that either party determines that
a Product does not conform to the Specifications or that it
should be recalled for any other reason, prior to taking any
action, it shall give written notice to the other party's
Quality Officer specifying its reasons for the necessity of a
recall (the "Recall Notice"). If both parties agree that the
Product should be recalled, FPC will handle the administration
of the recall and FAULDING, if permitted to do so under the
laws and regulations of the Regulatory Authority, will replace
all Products recalled as soon as reasonably practicable.
(b) If, within ten (10) days from the date of the
Recall Notice, the parties have been unable to reach an agree-
ment concerning the necessity of a recall, the parties agree
to submit the Product to the Independent Laboratory for a
Report, the cost of which shall be paid by the party against
whom the discrepancy is resolved. In the event that the
discrepancy is resolved in the Report against FAULDING,
FAULDING shall reimburse FPC for all reasonable out-of-pocket
expenses relating to such recall. In the event that the
discrepancy is resolved in the Report in favor of FAULDING and
FPC elects to recall the Product notwithstanding the Report,
FAULDING shall have no obligation to FPC with respect to
replacement of Products or reimbursement of expenses.
16. RELATIONSHIP OF FAULDING AND FPC.
(a) The relationship between FAULDING and FPC that
is created by this Agreement shall be that of vendor and
purchaser, and not that of principal and agent. In the
performance of this Agreement, neither party shall have the
authority to assume or create any obligation or
responsibility, either expressed or implied, on behalf of or
in the name of the other party, or to bind the other party in
any manner whatsoever.
(b) FPC shall conduct its own business in its own
name and in such a manner as it sees fit, and shall be solely
responsible for determining the prices to be charged for the
Products in the Territory.
17. TRADEMARKS AND LABELING.
(a) Nothing contained herein shall be construed as
conferring any license in favor of FPC to any trademarks owned
or claimed to be owned by FAULDING. Unless it obtains the
written permission of FAULDING, FPC shall not affix or apply
to any of the Products any trademark or other name, logo or
emblem nor shall it remove or tamper with any trademarks
applied to the Products by FAULDING. Nothing contained herein
shall impose any obligation upon FAULDING to register or
otherwise maintain in force any trademark.
(b) FAULDING shall appear on the label of the
Products as the manufacturer thereof and FPC as distributor.
(c) FPC shall at all times recognize the validity
and FAULDING's ownership of any trademarks which FAULDING
permits it to use or permits to be used on or in relation to
the Products and shall at no time do, or allow to be done,
anything by way of omission or commission, which would put in
issue or adversely affect such validity or ownership, or which
would damage or prejudice the reputation or goodwill of
FAULDING as owner thereof.
(d) FPC shall enter into such trademark, service
mark or trade name user agreements or other instruments
relative to the grants of any rights to use any such
trademarks as may be required by FAULDING, such agreements or
other instruments to be coterminous for each Product with the
license granted with respect to such Product as set forth in
the relevant Product Summary Sheet. Upon expiration or
termination of this Agreement or deletion of any Product, FPC
agrees to do and execute such acts, deeds and things that may
be required by FAULDING for the purpose of cancellation of any
such agreements or instruments or the registrations thereof.
(e) Products will be labeled and packaged in
accordance with instructions provided by FPC. FPC will supply
masters for labels, package inserts and packaging. FAULDING
will procure, test, inspect and approve all labels, package
inserts and packaging used for the Products in accordance with
the laws and regulations of the Regulatory Authority.
FAULDING will submit all new labels, package inserts and
packaging used for any Products to FPC for approval prior to
use unless otherwise agreed in writing. In the event that FPC
requests a labelling change, all costs reasonably associated
with the implementation of such change will be borne by FPC.
18. ADVERTISING.
If this Agreement is terminated for any reason,
neither party shall package or label any goods in a manner
that the other party hereto might reasonably consider to be
imitative of any goods sold by such party.
19. NOTICES.
Notices provided under this Agreement to be given or
served by either party on the other shall be given in writing
and served personally or by prepaid registered airmail post or
by courier or by means of facsimile to the following
respective addresses or to such other addresses as the parties
may hereafter advise each other in writing. It is agreed and
understood by the parties that any such notice shall be deemed
given and served on the date transmitted by facsimile, or a
date four (4) days after the date of dispatch by courier or a
date ten (10) days after the date of posting by airmail.
To: FAULDING
F.H. FAULDING & CO. LIMITED
160 Greenhill Road
Parkside 5063 South Australia
Attention: Secretary
Facsimile +61 8 373 3120
To: FPC
FAULDING PHARMACEUTICAL CO.
200 Elmora Avenue
Elizabeth, New Jersey 07207
Attention: Chief Financial Officer
Facsimile +1 908 355 7048
20. WARRANTIES AND INDEMNIFICATIONS.
(a) FPC hereby warrants that:
(i) it will comply with any applicable
regulatory requirements with respect to the
advertising, promotion, storage, distribution and
sales of the Products; and
(ii) with respect to any Product for which FPC
has furnished FAULDING with Specifications,
provided that FAULDING follows FPC's instructions
with respect to such Specifications and Product
formulation, at the Inclusion Date of each
Product, to the best of its knowledge, the
Marketing of such Product pursuant to the terms
of this Agreement will not infringe any patent,
trademark or other intellectual property rights
relevant to the Territory.
Notwithstanding any other provision of any sales agreement,
purchase order or other contract between FAULDING and a
customer, FAULDING shall not be liable for, and FPC agrees to
indemnify FAULDING against and hold FAULDING harmless from,
any and all loss, liability, damage, claim, cost and expense
(including without limitation, attorney's fees and
disbursements) arising from or in connection with any (A)
breach of the warranties by FPC hereunder, (B) other
misrepresentation or breach of this Agreement by FPC and (C)
claim, express, implied or statutory made by FPC as to the
efficacy or safety of any of the Products or the use to be
made by any purchaser of the Products or (D) other act or
omission of FPC in connection with the marketing, distribution
and sale of any of the Products. In addition, if FPC uses its
own trademarks, or other name, logo or emblem, pursuant to
Section 17(a), it agrees to indemnify and hold FAULDING
harmless from and against any and all loss, liability, damage,
claim and expense including, but not limited to, reasonable
attorneys fees, arising out of or relating to the use of such
trademark or other name, logo or emblem.
(b) FAULDING hereby warrants that:
(i) all Products shipped to FPC pursuant to this
Agreement will meet the Specifications for such
Product at the time of shipment and throughout
the stated shelf-life of such Product, provided
however, that such Product has been stored in
accordance with FAULDING's instructions;
(ii) all Products manufactured and shipped to
FPC hereunder will be manufactured in a plant
which meets GMP;
(iii) it will not deliver to FPC pursuant to
this Agreement adulterated or misbranded Product,
as defined by the FDA; and
(iv) at the Inclusion Date of each Product, to
the best of FAULDING's knowledge, the
manufacturing of such Product pursuant to the
terms of this Agreement will not infringe any
patent, trademark or other intellectual property
rights relevant to Australia.
FAULDING hereby agrees to indemnify and hold FPC harmless from
any and all loss (except consequential loss, such as, for
example, loss of business or of profits), liability, damage,
claim, cost and expense (including, without limitation,
reasonable attorney's fees) arising from or in connection with
the breach of FAULDING's warranties hereunder.
Other than as expressly stated above in this Section 20,
FAULDING makes NO WARRANTIES, WHETHER EXPRESS, IMPLIED OR
STATUTORY. THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED.
21. CONFIDENTIALITY.
(a) Each of the parties agrees that it will not
disclose any confidential information of the other party that
it may acquire at any time during the term of this Agreement,
including, without limitation, any confidential information of
the other party it may acquire during any Product Review,
without the prior written consent of such party and that it
shall use all reasonable efforts to prevent unauthorized
publication or disclosure by any person of such confidential
information including requiring its employees, consultants or
agents to enter into similar confidentiality agreements in
relation to such confidential information.
(b) The obligations undertaken by each party under
this Section shall continue in force for a period of five (5)
years following the termination or expiration of this
Agreement.
(c) The obligations contained in this Section do
not apply to any information:
(i) which was at the time of receipt by a party in
the public domain or generally known in the
pharmaceutical manufacturing industry otherwise
than by breach of a party's duty of
confidentiality;
(ii) which a party can establish to have been
known to it at the time of receipt from the other
party and not to have been acquired directly or
indirectly from the other party;
(iii) acquired by a party from a third party
otherwise than in breach of an obligation of
confidence to the other party;
(iv) required by law to be provided to
governmental agencies but only for the purpose of
providing it to such governmental agencies; and
(v) disclosed to an Affiliate of either party for
purposes consistent with the terms, and to further
the purposes of this Agreement.
22. TAXATION ISSUES.
(a) Each of the parties is aware that the
commercial arrangements of this Agreement may be subject to
transfer pricing reviews by the relevant taxation authorities
in the Territory and Australia. As a result, this Agreement
may be subject to internal reviews by either or both parties
and to audits by the relevant taxation authorities. If as a
result of such reviews or audits, it becomes necessary or
advisable for either party (the "Affected Party")to change any
commercial arrangements of this Agreement, including, without
limitation, making retroactive adjustments, the other party,
within thirty (30) days after written notification by the
Affected Party, which notification shall explain in reasonable
detail the reason for the proposed change, shall meet with the
Affected Party and each of the parties agrees to negotiate in
good faith, and to use its best efforts to reach agreement
with respect to, any modifications to the commercial terms of
this Agreement. In the event that the parties, despite their
best efforts, cannot reach agreement with respect to any
material change, which in the opinion of either party is
necessary or advisable for the reasons set forth in this
Section 22(a), either party, upon written notice to the other
party, may terminate this Agreement. The provisions of
Sections 23(c) and 20(d) of this Agreement shall apply upon
any termination of the Agreement pursuant to this Section
22(a).
(b) Each of the parties agrees to provide
reasonable assistance, at the other party's reasonable cost,
if such other party is subject to a taxation audit that
reviews any commercial arrangements of this Agreement.
23. TERM AND TERMINATION.
(a) Subject to any other provision hereof, this
Agreement shall remain in effect until June 30, 2005, and the
term of this Agreement shall automatically be renewed
thereafter for up to four successive five-year terms unless
notice is given by either party at least six months prior to
the date of any such renewal of such party's desire not to
renew such term.
(b) This Agreement may be terminated by notice in
writing by either party if the other party shall default in
the performance of any of its obligations under this Agreement
and such default shall continue for a period of not less than
thirty (30) days after written notice specifying such default
shall have been given; by either party if the other party
makes an arrangement with its creditors or goes into
receivership or liquidation, or if a receiver or a receiver
and manager is appointed in respect of the whole or part of
the property or business of the party in default or by either
party if a major part of the assets or all of the assets of
the other party are disposed of or acquired by any other
person.
(c) Immediately upon termination or expiration of
this Agreement, FPC shall (i) accept any and all Products
manufactured or in transit at the time of giving of written
notice of termination or of expiration; and (ii) at FAULDING's
option and request, cancel without penalty all orders for the
Products not in transit at the time of giving written notice
of termination. For a period of six months after the date of
expiration or termination, each of the parties shall continue
to submit Quarterly Statements as set forth in Section 8
hereof and the parties shall as soon as conveniently possible
reconcile all accounts.
24. FORCE MAJEURE.
Neither party shall be liable or be in breach of any
provision of this Agreement for any failure or delay on its
part to perform any obligation where such failure or delay has
been occasioned by any act of God, war, riot, fire, explosion,
flood, sabotage, accident or breakdown of machinery,
unavailability of fuel, labor, containers or transportation
facilities, accidents of navigation or breakdown or damage of
vessels or other conveyancers for air, land or sea, other
impediments or hindrances to transportation, government
intervention, strikes or other labor disturbances or any other
cause beyond the control of the parties.
25. COMPLIANCE WITH LAW.
It shall be the responsibility of FPC to follow all
procedures and take all action which is necessary or required
for agreements of this type by the laws, treaties or
regulations applicable to Marketing the Products in the
Territory. Further, it is agreed that neither party shall be
obligated to carry out or perform any or all of the terms of
this Agreement as shall constitute a violation of any treaty,
law, code or regulation of any governmental authority whether
local, national or international. In any event, the other
terms of this Agreement shall nevertheless continue and the
parties shall use all reasonable efforts to re-negotiate and
amend this Agreement so that the performance of this Agreement
as so amended will not involve any such violation.
26. EXECUTION OF ALL NECESSARY ADDITIONAL DOCUMENTS.
Each party agrees that it will forthwith upon the request
of the other party execute and deliver all such instruments
and agreements and will take all such other actions as the
other party may reasonably request from time to time in order
to effectuate the provision and purposes of this Agreement.
27. WAIVER.
The failure of either of the parties to insist upon a
strict performance of any other terms and provisions therein
shall not be deemed a waiver of any subsequent breach of
default in the terms or provisions of this Agreement.
28. ASSIGNMENT AND AMENDMENT.
Other than an assignment by FAULDING to any of its
Affiliates, neither this Agreement nor any rights arising
hereunder shall be assigned by one party without the prior
written consent of the other and then only upon approval of
the other party and acceptance of such assignment in written
form approved by such party, which approval shall not be
unreasonably withheld. No amendment hereof shall be binding
unless made in writing and signed by the parties hereto.
29. ENTIRE AGREEMENT.
This Agreement incorporates the entire understanding of
the parties and revokes and supersedes any and all agreements,
contracts, understandings or arrangements that might have
existed heretofore between the parties regarding the subject
matter hereof.
30. GOVERNING LAW.
This Agreement shall be construed in accordance with and
governed by the internal laws of the State of New York,
excluding such state's rules relating to conflicts of laws,
and its form, execution, validity, construction and effect
shall be determined in accordance with such internal laws.
31. SEVERABILITY.
If any term or provision of this Agreement shall be held
invalid or unenforceable, the remaining terms hereof shall not
be affected, but shall be valid and enforced to the fullest
extent permitted by law.
32. HEADINGS.
The headings used in this Agreement are intended for
guidance only and shall not be considered part of this written
understanding between the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed by
the parties on the date first above written.
F.H. FAULDING & CO. LIMITED
By:
FAULDING PHARMACEUTICAL CO.
By:
Schedule A
Antecedent Supply Agreement
Under Initial Products Termination Date
Cytarabine Injection June 3, 1995
20 mg/ml, 5ml Vial
Cytarabine Injection June 3, 1995
20 mg/ml, 25ml Vial
Cytarabine Injection June 3, 1995
20 mg/ml, 50ml Vial
Vincristine Sulfate Injection December 31, 1995
1 mg/ml, 1ml Vial
Vincristime Sulfate Injection December 31, 1995
1 mg/ml, 2ml Vial
Sterile Vinblastine Sulfate December 31, 1995
10 mg/vial
FPC began marketing Cytarabine Injection in the U.S. in
September 1995.