EXHIBIT 10(xxiv)
LICENSING AND SUPPLY AGREEMENT, entered into as of
the 23rd day of January, 1996 by and between FAULDING
MEDICAL DEVICE CO., a corporation organized under the laws of
the State of Delaware with its principal place of business at
8777 East Via de Ventura, Suite 315, Scottsdale, Arizona
85258(hereinafter referred to as "FMDC") and F.H. FAULDING &
CO. LIMITED, a corporation organized under the laws of South
Australia, with its principal place of business at 160
Greenhill Road, Parkside, South Australia 5063 (hereinafter
referred to as "FAULDING").
WHEREAS, FMDC, a wholly owned subsidiary of
FAULDING, has designed and developed the Devices (as
hereinafter defined)in conjunction with certain development
efforts of FAULDING;
WHEREAS, the parties have registered certain patents
and trademarks associated with the Devices in various
countries in the Territory in the names hereinafter set forth;
WHEREAS, the parties intend hereby to clarify their
respective ownership rights in and to the Devices, and the
technology, patents and trademarks associated with the
Devices, agreeing, among other things, that FMDC is the
beneficial owner of the Devices Technology and the Patents and
that FAULDING is the beneficial owner of the ONCO-TAIN
Technology, the Operational Know-How and the Trademarks (as
such terms are hereinafter defined);
WHEREAS, the parties wish to formalize their
business arrangement pursuant to which FAULDING has marketed
certain Devices and FAULDING Manufactured Products in the
Territory (as such terms are hereinafter defined);
WHEREAS, FAULDING wishes to be granted, and FMDC is
willing to grant FAULDING, the exclusive right for the term of
this Agreement to market and distribute Devices in the
Territory and to utilize the Devices Technology to
manufacture, market and distribute FAULDING Manufactured
Products in the Territory and FMDC wishes to be granted, and
FAULDING is willing to grant FMDC, the nonexclusive right to
use the Trademarks for the term of this Agreement in
connection with the manufacture and marketing outside of the
Territory of the Devices and products utilizing a Device, all
subject to the terms and conditions of this Agreement;
WHEREAS, FAULDING has requested FMDC, and FMDC,
having the exclusive rights in relation to the manufacture of
the Components, has agreed, subject to the terms and
conditions of this Agreement, to supply FAULDING with the
Components for FAULDING's use in manufacturing FAULDING
Manufactured Products (as such terms are hereinafter defined);
and
WHEREAS, if FMDC, or an Affiliate of FMDC (other
than FAULDING), during the term of this Agreement, shall
decide to manufacture any products that utilize any of the
Devices, FAULDING agrees to grant FMDC or such Affiliate of
FMDC a nonexclusive license during the term of this Agreement
to use the Operational Know-How for the sole purpose of
replicating and scaling-up on the SGV Equipment the process
for the manufacture of products utilizing the Devices.
NOW THEREFORE, in consideration of the mutual
covenants as hereinafter contained, the parties agree as
follows:
1. DEFINITIONS
For the purposes of this Agreement, the following
terms shall have the following meanings:
1.1 "Affiliates" shall mean (a) 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 (b) such parent company.
1.2 "Components" shall mean any item listed on
Schedule A hereto (as such Schedule may be amended from time
to time by mutual agreement between the parties), which is
manufactured by or on behalf of FMDC either as a completed
Device or as a part of a Device and which will be supplied to
FAULDING by FMDC as set forth in Section 9 hereof.
1.3 "Devices" shall mean any of the Devices set
forth on Schedule A hereto (as that Schedule may be amended
from time to time by mutual agreement between the parties),
which may either be a stand-alone Device or may be
incorporated into a FAULDING-Manufactured-Product.
1.4 "Devices Technology" shall mean that technology
(including technical, scientific, industrial information or
knowledge, confidential information and expertise) in relation
to the formulation and composition of the Devices, other than
the ONCO-TAIN Technology, and the processes and the means and
procedures for the manufacture and production of the Devices
and, with the exception of the Operational Know-How, for the
manufacture and production of products utilizing any of the
Devices.
1.5 "FAULDING Manufactured Product(s)" shall mean a
product manufactured by FAULDING that incorporates a Device.
1.6 "Gross Profit" shall mean with respect to any
Device or FAULDING Manufactured Product the Net Sales less the
Total Manufacturing Costs of such Device or FAULDING
Manufactured Product.
1.7 "Net Sales" shall mean, with respect to any
Device or FAULDING Manufactured Product, the gross sales of
FAULDING and its Affiliates during any particular calendar
quarter from sales in the Territory of such Device or FAULDING
Manufactured Product, as the case may be, to unaffiliated
third parties (not including amounts received as reimbursement
of freight, insurance and other costs or taxes) invoiced by
FAULDING or its Affiliates during such quarter, less price
discounts, trade returns, trade allowances, chargebacks or
rebates relating to such sales, as calculated using FAULDING's
standard accounting procedures, in accordance with the
applicable generally accepted accounting principles,
consistently applied. It is understood and agreed that where
the amount of any deduction can not be fairly determined
during the quarter immediately following the quarter in
question, such deduction may be claimed by FAULDING with
respect to the Net Sales during a subsequent quarter.
1.8 "ONCO-TAIN Technology" shall mean the
technology associated with the vial safety sheathing system
known as ONCO-TAIN, including, without limitation, the
ONCO-TAIN know-how.
1.9 "Operational Know-How" shall mean the
processes, methods and procedures associated with the
operation of the SGV Equipment.
1.10 "Patents" shall mean the patents and patent
applications listed on Schedule A hereto as and to the extent
that they relate to the Devices, as such Schedule may be
amended from time to time by mutual agreement of the parties,
together with, as applicable, all continuations,
continuations-in-part, reissues and extensions thereof,
including all patents issuing upon such applications, in each
case as and to the extent that they relate to the making, use
or sale of the Devices.
1.11
(a) "Pre-existing Negotiations of FAULDING" shall
mean the negotiations that FAULDING commenced with the
companies set forth on Schedule B hereto, with respect to the
granting of certain rights to such third parties to distribute
certain Devices and FAULDING Manufactured Products within the
United States.
(b) "Pre-existing Negotiations of FMDC" shall mean
the negotiations that FMDC commenced with the companies set
forth on Schedule C hereto, with respect to the granting of
certain rights to such third parties to distribute certain
Devices within the Territory.
1.12 "Pre-existing Obligation of FAULDING" shall
mean the third-party agreement that Faulding previously
entered into, which is identified on Schedule B hereof.
1.13 "Registration" means the gaining of all
permissions from all Regulatory Authorities in a country in
which the gaining of such permissions is necessary to permit
the commencement of marketing of any of the Devices or
FAULDING Manufactured Product in that country.
1.14 "Regulatory Authority" in respect of a country
means any and all bodies and organizations regulating the
importation, and/or marketing of any of the Devices and
FAULDING Manufactured Products in any part of that country.
1.15 "SGV Equipment" shall mean the equipment used
to manufacture products utilizing the Devices, including,
without limitation, the FAULDING Manufactured Products.
1.16 "Territory" shall mean all the countries of
the world with the exception of the United States of America
and its territories and possessions.
1.17 "Total Cost to FMDC" shall have the meaning
set forth in Section 7.2 of this Agreement.
1.18 "Total Manufacturing Costs" with respect to:
(a) any Component or Device shall mean the total
manufacturing costs of such Component or Device
calculated according to FMDC's standard costing
system, subject to normal accounting procedures,
and consistent with generally accepted U.S.
accounting practices; and
(b) any stand-alone Device or a FAULDING
Manufactured Product shall mean, respectively,
FAULDING's purchase price from FMDC of such Device
or the cost to FAULDING of manufacturing such
FAULDING Manufactured Product on a fully absorbed
basis, calculated according to FAULDING's standard
costing system, subject to normal accounting
procedures, and consistent with generally accepted
Australian accounting principles.
1.19 "Trademarks" shall mean the trademarks set
forth on Schedule D hereto, as such Schedule may be amended
from time to time by the parties.
1.20 "U.S." shall mean the United States of
America.
2. EXCLUSIVE LICENSE TO THE DEVICES TECHNOLOGY
2.1 In consideration of the payments set forth in
Sections 7 and 8 of this Agreement and the license accorded
FMDC pursuant to Section 16.2 of this Agreement, FMDC hereby
grants a license to FAULDING to the Devices Technology for the
sole purposes of manufacturing FAULDING Manufactured Products
and, subject to the conditions set forth in Section 4 of this
Agreement, of marketing such Devices and FAULDING Manufactured
Products within the Territory. The parties agree that,
subject to the provisions of Section 4 of this Agreement, the
license granted hereunder to FAULDING is sole and exclusive
for the term of this Agreement for the manufacture of the
FAULDING Manufactured Products and the marketing of the
Devices and FAULDING Manufactured Products within the
Territory. The parties further acknowledge that FAULDING has
been marketing certain of the Devices and FAULDING
Manufactured Products in the Territory prior to July 1995 and
that all pertinent terms of this Agreement, including without
limitation, the payment terms set forth in Sections 7 and 8
hereof, shall only apply to the sales of such Devices and
FAULDING Manufactured Products that have occurred from July
1995 up to the date hereof as if such sales had occurred
during the term hereof.
2.2 FAULDING agrees that, subject to the provisions
of Section 4 of this Agreement, it will not use or exploit the
Devices Technology for any purpose other than the manufacture
of the FAULDING Manufactured Products and the marketing of
the Devices and the FAULDING Manufactured Products in the
Territory and that, subject to the provisions of Section 4
hereof, it will not:
(a) manufacture, nor permit an Affiliate, agent or
sublicensee to manufacture, any FAULDING
Manufactured Product; and
(b) will not sell, attempt to sell or permit any
Affiliate, agent or sublicensee to sell or attempt
to sell any FAULDING Manufactured Product or
Device,
outside the Territory either on its own account or through any
third party nor will it sell, nor permit any of its
Affiliates, agents or sublicensees to sell, any Device or
FAULDING Manufactured Product to any person or corporation
within the Territory where FAULDING or its Affiliate, agent or
sublicensee has reasonable grounds to believe that such other
person or corporation intends to sell such Device or FAULDING
Manufactured Product outside the Territory.
3. SUB-DISTRIBUTORS
3.1 Subject to the limitations set forth in Section
3.2 of this Agreement, FAULDING shall have the right to
appoint any Affiliate, agent or sub-licensee to market,
distribute, promote and/or sell any Devices or FAULDING
Manufactured Products within the Territory.
3.2 The appointment of any such Affiliate, agent or
sub-licensee under Section 3.1 shall be on such terms and
conditions as FAULDING may reasonably require in writing,
provided such terms and conditions are not inconsistent with
the terms and conditions of this Agreement. FAULDING agrees
that it shall, at all times, be solely responsible for the
acts, deeds or omissions of any Affiliate, agent or sub-licensee
appointed pursuant to Section 3.1 and hereby indemnifies FMDC against
any and all loss, liability, damage, claims, cost and expense arising
from or in connection with such Affiliate's, agent's or sub-licensee's
acts, deeds or omissions.
4. COMPETING PRODUCTS; EXCEPTIONS TO EXCLUSIVITY
4.1 FAULDING shall neither directly nor indirectly
market a drug delivery device either within or outside the
Territory that is the same as, or substantially similar to,
any of the Devices, without the prior written consent of FMDC.
4.2 FAULDING acknowledges and agrees that
notwithstanding the exclusive license set forth in Section 2
hereof, FAULDING hereby consents to the continuation by FMDC
of the Pre-existing Negotiations of FMDC and further agrees
that notwithstanding any provisions of Section 2 to the
contrary, FMDC is not restricted hereunder from investigating
any opportunity to market any Device, or any product utilizing
a Device (collectively, the "FMDC Generated Product") in any
country in the Territory (a "Device Marketing Opportunity"),
provided, however, that FMDC shall provide FAULDING with a
right of first refusal to market, or manufacture and market
such FMDC Generated Product in such country as follows:
(a) At any time during the term of this
Agreement, FMDC may notify FAULDING in
writing of a Device Marketing Opportunity (the
"Notice of Opportunity"). Such Notice of
Opportunity will identify the targeted
market, will contain as full a description of
the FMDC Generated Product as reasonably
possible, and will summarize the proposed
material terms, including the estimated
selling price and, as applicable, the
estimated timetable for development and
submission of registration materials with
respect to such FMDC Generated Product to the
relevant Regulatory Authorities.
(b) FAULDING shall have twenty (20) days from
its receipt of the FMDC Notice of Opportunity
to inform FMDC in writing whether or not it
wishes to negotiate the terms on which it
would, as the case may be, market or
manufacture and market such FMDC Generated
Product under the terms of this Agreement (the
"Response Notice"). If (i) FAULDING informs
FMDC through such Response Notice, that it
does not have an interest in negotiating with
FMDC, (ii) FAULDING fails to deliver a
Response Notice to FMDC, within twenty (20)
days of its receipt of the FMDC Notice of
Opportunity or (iii) the parties, after
negotiating in good faith for a period of an
additional thirty (30) days from the date of
receipt by FMDC of the Response Notice, are
unable to come to an agreement on the terms
that would permit FAULDING, as the case may
be, to market or manufacture and market such
FMDC Generated Product hereunder, FMDC shall
have the right to market such FMDC Generated
Product in the country or countries identified
in the Notice of Opportunity independent of
this Agreement and to enter into an agreement
with a third party for (as may be applicable)
the development, manufacturing and/ or
marketing by, or the purchase from such third
party, of such FMDC Generated Product;
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
FMDC Notice of Opportunity delivered to
FAULDING. Notwithstanding the provisions of
Section 4.2(a) hereof to the contrary, once
FMDC has delivered a Notice of Opportunity to
FAULDING hereunder, it may not market, nor
negotiate with any third party to develop,
manufacture or market the FMDC Generated
Product which is the subject of the Notice of
Opportunity until one of the conditions set
forth in Subsection (i), (ii) or (iii) of this
Section 4.2(b) has been satisfied.
4.3 FMDC acknowledges and agrees that FAULDING is
committed with respect to supplying certain Faulding
Manufactured Products to a third party under the Pre-existing
Obligation and hereby consents to FAULDING's commitment to
such third party with respect to such Products under the terms
of the Pre-existing Obligation. Moreover, FMDC hereby
consents to the continuation by FAULDING of the Pre-existing
Negotiations of FAULDING and, agrees, upon a successful
culmination of any such Negotiations, to negotiate in good
faith with FAULDING to determine on what terms, if any, that
FMDC would consent to FAULDING's entering into a third party
agreement arising from such Negotiations. For purposes of
this Section 4.3, FMDC shall use the same standards of good
faith negotiations as are set forth in Section 4.4 immediately
hereafter.
4.4 The parties acknowledge and agree that
opportunities may arise for (a) FAULDING to supply certain
Devices and FAULDING Manufactured Products to FMDC or an
Affiliate of FMDC for marketing outside of the Territory; (b)
for FAULDING to supply Devices and\or FAULDING Manufactured
Products to a third party distributor on a world-wide basis,
including the United States of America as well as countries
within the Territory; and (c) for FMDC, or an Affiliate of
FMDC, to market a Device or a product utilizing a Device
within, as well as outside of, the Territory. The parties
agree that in each such instance, the party having such an
opportunity (the "Marketing Party") may not, under the terms
of this Agreement, be permitted to enter into any such
arrangement without the prior consent of the other party (the
"Consenting Party") to this Agreement. The parties further
agree that it is in their mutual best interest to negotiate in
good faith, on a country-by-country and product-by-product
basis to determine whether the Consenting Party can reach an
accommodation with the Marketing Party that would be
commercially acceptable to both of them, basing its decision
in each instance, on the competitive impact, which the
Consenting Party reasonably believes, the implementation of
the Marketing Party's opportunity may have on the Consenting
Party's business or prospects.
5. INTELLECTUAL PROPERTY RIGHTS OF FMDC
5.1 FAULDING acknowledges and agrees that FMDC is
the beneficial owner of the Devices Technology and, except as
set forth in Section 14 of this Agreement, of all industrial
and intellectual property rights in relation to the Devices
Technology, including the right to the Patents, registered or
other designs, copyright, and any other confidential
information. Nothing contained in this Agreement shall be
effective to give FAULDING any rights of ownership in and to
the Devices Technology, including, without limitation, any
improvements to such Technology, described in Section 6
hereof, and to the intellectual property owned by FMDC. The
licensing of the Devices Technology hereunder is for the sole
purposes of manufacturing FAULDING Manufacturing Products and
marketing Devices and FAULDING Manufactured Products in the
Territory.
5.2 FAULDING acknowledges and agrees that FMDC is
the beneficial owner of each of the Patents. With respect to
any Patents that have heretofore been issued in FAULDING's
name, FMDC, at its sole discretion, may direct FAULDING in
writing, at any time and from time to time, to assign any or
all of such Patents, at FAULDING's cost, to FMDC or its
designee. Upon receipt of FMDC's directive, FAULDING shall
promptly deliver to FMDC, or to FMDC's nominee, any documents
in its possession relating to such Patent(s) and shall execute
all such documents as may be required, or as FMDC may deem
appropriate, to ensure that any such assignment is effected.
6. IMPROVEMENTS TO THE DEVICES TECHNOLOGY
6.1 Any improvement to the Devices Technology as it
applies to any Component or Device or FAULDING Manufactured
Product made or discovered by FMDC during the term of this
Agreement shall be made known to FAULDING and FAULDING shall
be entitled to use and commercially exploit any such
improvements without any additional payment hereunder.
6.2 FAULDING acknowledges and agrees that FMDC is
the beneficial owner of any improvements to the Devices
Technology as it applies to any Device or any Device utilized
in a Product made or discovered by FAULDING during the term of
this Agreement. FAULDING shall promptly make any such
improvement known to FMDC and, each of FMDC and FAULDING
shall be entitled, consistent with the terms of this
Agreement, to use and commercially exploit any such
improvement without payment to the other party of any fee or
royalty.
7. PURCHASE PRICE OF THE COMPONENTS
7.1 FAULDING shall purchase all of its requirements
of each of the Components from FMDC. It is FMDC's current
intention to have the Components manufactured for FMDC by a
third party contract manufacturer (the "Contract
Manufacturer"), but it is understood and agreed by both of the
parties that at any time during the term of this Agreement, by
ninety (90) days' notice to FAULDING, FMDC has the option of
manufacturing any or all of such Components in-house provided,
however, that FMDC (a) shall supply such Components to
FAULDING on comparable terms as the terms then in effect
through the FMDC's Contract Manufacturer; (b) shall receive
prior authorization from the applicable Regulatory Authorities
for its new manufacturing site and (c) shall ensure that the
Contract Manufacturer continues to manufacture and supply the
Component to FAULDING until such time as the alternate site is
approved.
7.2 Subject to the provisions of Section 8 hereof,
the purchase price for the Components shall be an amount equal
to one hundred seventeen and one half (117-1/2%) percent of the
"Total Cost to FMDC" of such Components. For purposes of this
Agreement, the "Total Cost to FMDC" of any Components:
(i) manufactured by the Contract Manufacturer
shall be the Contract Manufacturer's invoice
price to FMDC for such Components; and
(ii) manufactured in-house shall be FMDC's
Total Manufacturing Costs with respect to such
Components, as defined in Section 1.18 of this
Agreement.
The parties agree that the "Total Cost to FMDC" will include,
without limitation, any costs for laboratory testing,
sterilization and transportation between processing sites.
7.3 FMDC shall keep at its principal office true
and particular accounts and records of all Costs to FMDC in
relation to the manufacturing of such Components for a period
of five years after the date of the shipment of such Component
to FAULDING. FAULDING shall have the right to audit such
records as set forth under Section 13 of this Agreement.
8. REDUCTION OF PURCHASE PRICE
8.1 If during any calendar quarter, FAULDING's
Gross Profit with respect to the sales of any Device or
FAULDING Manufactured Product, which are sold in any country
within the Territory by or on behalf of FAULDING under the
terms of this Agreement, is less than twenty five (25%)
percent of the Total Net Sales of such Device or Product in
such country, FAULDING shall be entitled, with respect to such
sales in such country, to a rebate of its purchase price of
the Component(s)comprising such Device or incorporated into
the FAULDING Manufactured Product to the extent that the
purchase price of such Component(s) for such calendar quarter
shall reduced from one hundred seventeen and one half (117-1/2%)
percent to one hundred ten (110%) of the Total Cost to FMDC of
such Components (the "Rebate").
8.2 If FAULDING determines that it is entitled,
with respect to the sales in any country in the Territory, to
a Rebate with respect to its purchase of any Components
comprising a Device or incorporated into a FAULDING
Manufactured Product in such country, as set forth in Section
8.1 hereof, it shall, within thirty (30) days of such calendar
quarter, calculate and send to FMDC, a detailed statement (the
"Rebate Statement") reflecting the information for each of the
Devices or FAULDING Manufactured Products for such calendar
quarter for which a Rebate is claimed, including: (a) the
product description, (b) the list of markets in which such
Device or Product was sold and a Rebate is being claimed (c)
the aggregate number of such units sold;(d) Net Sales made by
or on behalf of FAULDING with respect to such units; (d)the
Total Manufacturing Costs for such FAULDING Manufactured
Products;(e) the Gross Profit, stated as a dollar amount and
a percentage of Net Sales of such units (f) the purchase price
of each of the Components comprising the Device or
incorporated into a FAULDING Manufactured Product for which a
Rebate is being claimed and (g) the amount of the claimed
adjustment in purchase price to be payable to FAULDING.
FAULDING shall state the amounts due and payable in U.S.
dollars. The exchange rate shall be the T/T mid rate of the
Australia and New Zealand Banking Group Limited in Adelaide,
Australia on the last business day of the calendar quarter in
question.
8.3 The calculations of FAULDING set forth in the
Rebate Statement shall be final, unless within twenty (20)
days after receipt of such Statement, FMDC notifies FAULDING
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 8.4 of this Agreement.
8.4 If FMDC objects to any calculations in the
Rebate Statement (the "Disputed Amount"), then FAULDING and
FMDC shall endeavor to agree promptly upon such Disputed
Amount. In the event that a Disputed Amount has not been
resolved in writing within twenty (20) business days after the
date of receipt by FAULDING of FMDC's written objection, then
the Disputed Amount shall be submitted to a nationally
recognized accounting firm mutually acceptable to FAULDING and
FMDC (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 FAULDING's calculations to comply with the provisions
of Section 8.2 hereof. Within thirty (30) days after the
submission of any dispute to the Arbitrator pursuant to this
Section 8.4, 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 8.4 shall be paid by FMDC, except if the
Arbitrator determines that an adjustment in FAULDING's
calculations, which is greater than fifteen (15%) percent of
the total amount claimed, should be made in FMDC's favor, then
such fees and expenses shall be paid by FAULDING.
8.5 FMDC shall pay FAULDING within thirty (30) days
after the date of its receipt of the Rebate Statement, or with
respect to any Disputed Amount, within twenty (20)days after
the decision of the Arbitrator, as set forth in Section 8.4
hereof, any Rebate due to FAULDING. FMDC shall make all such
payments in U.S. dollars via wire transfer to the bank or
banks designated by FAULDING.
8.6 With respect to each Device or FAULDING
Manufactured Product for which a Rebate is claimed by FAULDING
under this Section 8, FAULDING shall keep at its offices true
and particular accounts and records of all sales, the invoiced
amount of such sales and the amount of any other payments
received or paid in relation to sales of such Device or
Product for a period of five years after the date of the
Rebate Statement. FMDC shall have the right to audit such
records as set forth under Section 13 of this Agreement.
9. COMPONENTS: FORECASTS, ORDERS AND PAYMENT
9.1 At least ninety (90) days prior to the start of
each calendar quarter, FAULDING shall provide FMDC with a
forecast of its requirements of Components as required for
manufacturing FAULDING Manufactured Devices or for sale of
Devices or FAULDING Manufactured Products in the Territory for
the next four calendar quarters in batch sizes specified by
FMDC. The forecast for the most current three-month period
shall constitute a firm order ("Firm Order "). The Firm Order
shall be in the form of purchase order reasonably agreed to by
the parties and shall state in detail the quantities of all
Components ordered and dates for delivery and shall be binding
on both parties regarding the Components to be supplied and
purchased. The forecast for the remaining nine-month period
is for planning purposes only and does not constitute a
commitment to purchase or supply. However, FAULDING shall use
all reasonable efforts to make each forecast as accurate as
possible.
9.2 FMDC shall not be required pursuant to any Firm
Order to supply during any particular quarter an amount of any
Component that is more than one hundred ten percent (110%) of
the amount of such Component that was forecasted for such
quarter in FAULDING's most recent non-binding forecast, but
will use all reasonable efforts to supply the full amount
ordered.
9.3 After receipt of a Firm Order, FMDC shall
promptly ship, or shall cause its Contract Manufacturer to
ship, any Components ordered by FAULDING to arrive at the port
of entry designated by FAULDING, as set forth in Section 9.5
hereof, within 15 business days of the requested delivery
date.
9.4 FMDC shall invoice FAULDING for the Components
at the time of shipment of the Components as set forth in
Section 9.3 of this Agreement. FMDC has provided FAULDING in
writing with the current purchase price of each Component and,
upon sixty (60) days prior written notice, will provide
FAULDING with any change to the purchase price of any such
Component. As set forth in Section 13 of this Agreement,
FAULDING shall have the right, pursuant to the provisions of
Section 13 of this Agreement, to audit all records with
respect to the calculation of the purchase price of any
Component, as determined according to the provisions of
Sections 7.2 and 8.1 hereof. Payment shall be made by
FAULDING within sixty (60) days of FAULDING's receipt of the
invoice or of the Components, whichever is later. All payments
for Components by FAULDING shall be paid in U.S. Dollars by
wire transfer to the account specified by FMDC from time to
time.
9.5 FMDC shall ship the Components to FAULDING to
the port of entry in Australia, as designated by FAULDING.
FAULDING may choose the means of shipment by notifying FMDC of
its choice in its Firm Order. FAULDING shall pay for all
freight and insurance costs. Risk of loss of the goods shall
pass to FAULDING upon delivery of the Components to the
carrier. In the event FAULDING has not furnished FMDC with
shipping and insurance instructions in its Firm Order, FMDC
shall deliver the Components to FAULDING F.O.B. the
manufacturing plant of FMDC or its Contract Manufacturer by
delivery to a carrier selected by FMDC and FMDC shall, in its
sole discretion, obtain insurance coverage thereon, the cost
of which shall be borne by FAULDING and added to the purchase
price.
9.6 FAULDING shall be responsible for all
procedures required to clear customs for the Components and
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
Components and Devices sold and delivered to FAULDING pursuant
to this Agreement and shall obtain any licenses, authoriza-
tions or other documents required by any governmental authori-
ties in order to permit the importation and exportation after
manufacture of the Components sold and delivered to FAULDING
pursuant to this Agreement.
9.7 If FAULDING claims that there is a shortage of
any of the Components delivered by FMDC pursuant to a Firm
Order, it shall submit written notice to FMDC within thirty
(30) days of the date of the delivery of such order. In case
of alleged non-delivery, a written claim must be submitted to
FMDC within thirty (30) days of receipt of FMDC's Invoice or
expected date of delivery, whichever is earlier. In the
absence of such a written claim, in the case of either an
alleged shortage or non-delivery, the Components shall be
deemed to have been delivered in accordance with this
Agreement. In any event, FAULDING shall not be entitled to
refuse to accept delivery by reason only of an alleged or
actual shortage.
10. REGISTRATION; REGULATORY APPROVALS
10.1 FAULDING shall seek, or cause an Affiliate or
sub-licensee to seek, all necessary approvals and/or
registrations from the appropriate Regulatory Authorities in
each country in the Territory in which FAULDING chooses to
market any Device or FAULDING Manufactured Product to enable
the marketing of such Device or FAULDING Manufactured Product
in such country. Nothing provided herein, however, shall
require FAULDING to seek registration of any Device or
FAULDING Manufactured Product in any country in the Territory.
10.2 FAULDING, or an Affiliate or sub-licensee of
FAULDING, will carry out all activities required to maintain
or obtain approval of the Devices and FAULDING Manufactured
Products described in Section 10.1 of this Agreement. Upon
written request of FAULDING and at the cost of FAULDING, FMDC
shall provide FAULDING with reasonable assistance in obtaining
and maintaining such approvals.
10.3 To the extent permissible under applicable
laws or regulations, each application for Registration in
relation to a (a)Device shall state that the Device is
supplied by FMDC under license and (b) in relation to a
FAULDING Manufactured Product shall name FAULDING as the
manufacturer of the Product and shall state that the Device is
supplied by FMDC under license . Upon termination of the
License Agreement, the provisions of Section 25.3 of this
Agreement shall apply.
10.4 FAULDING shall notify FMDC of any and all
registrations of each Device and FAULDING Manufactured Product
in the Territory, and upon such registration in any country in
the Territory, FAULDING shall use reasonable efforts, at its
expense, to market, or cause the marketing of, such Device or
FAULDING Manufactured Product in and throughout such country
in order to obtain the optimum market potential for such
Device or FAULDING Manufactured Product within and throughout
such country.
11. ADVERSE EVENTS; RECALLS
11.1 FAULDING agrees that it will, in accordance
with all applicable laws and regulations of the Territory, as
such laws and regulations, may from time to time be amended,
notify FMDC promptly (a)of any adverse reactions reported to
it or to any Affiliate or sub-licensee of FAULDING resulting
from the use of the Devices Technology (and provide to FMDC
copies of all such adverse action reports received by it or
any Affiliate or sub-licensee of FAULDING), (b) of any
complaints from third parties involving the Devices Technology
and (c) of any recall, or proposed recall, of any Devices or
FAULDING Manufactured Products resulting from the use of the
Devices Technology.
11.2 In the event that FMDC uses the Devices
Technology, either outside of the Territory or, subject to the
provisions of Section 4 hereof, within the Territory, in the
manufacture of any other product, FMDC agrees that it will, in
accordance with all applicable laws and regulations, as such
laws and regulations, may from time to time be amended, notify
FAULDING promptly (a) of any serious and unexpected adverse
reactions reported to it or to any of its Affiliates or sub-
licensees resulting from such use of the Devices Technology
(and provide to FAULDING copies of all other adverse action
reports received by it or any sublicensee of FMDC), (b) of any
complaints from third parties involving the Devices Technology
and (c) of any recall of Device or any product utilizing
Devices Technology.
12. QUALITY CONTROL
12.1 Whether FMDC supplies FAULDING with Components
either through its Contract Manufacturer or in-house, FMDC
will ensure that:
(a) the Components are manufactured in conformance
with all applicable regulations, including without
limitation, Good Manufacturing Practices, and in
accordance with the specifications for the
Components agreed to by the parties and FAULDING's
Firm Orders described in Section 9 hereof;
(b) adequate quality control is maintained in
respect of the manufacture, packaging, labeling and
storage of the Components; that any quality control
testing of the Components is conducted in
accordance with all relevant scientific and legal
standards and with all reasonable diligence and
expedition and that all packaging and labeling used
for the Components meets all the requirements under
the applicable laws, rules and regulations of
Australia and the United States of America;
(c) complete and accurate records with respect to
the manufacture, packaging, labeling and storage of
the Components are maintained for such period of
time as is required by applicable law;
(d) all Components will be transferred under
appropriate storage conditions and packaged for
shipment according to all laws and regulations of
the United States of America and Australia, as
applicable, and with all necessary export
clearances obtained; and
(e) FAULDING shall have the right, at its own
cost, (i) twice annually or (ii) upon a (A) report
to FAULDING or any sub-licensee of FAULDING of any
serious and unexpected adverse reactions resulting
from the use of the Device of which the Component
is a part (the "Component's Device"), (B) any
complaints from third parties involving the
Component's Device or the Device Technology, (C)
any recall of the Component's Device or the
FAULDING Manufactured Product of which the
Component's Device is a part;
to visit the manufacturing plant for the Components during
regular business hours, provided reasonable prior written
notice is provided to the Contract Manufacturer and/or FMDC.
12.2 All Components received by FAULDING from FMDC
shall be deemed to comply with the provisions of Section 12.1
hereof unless FAULDING gives FMDC written notice (the
"Objection Notice") within thirty (30) days of such receipt
specifying the manner in which the Components do not conform
to specifications. The Objection Notice shall be accompanied
by written reports of any testing performed by or for FAULDING
on the Components. Upon receipt of the Objection Notice, FMDC
may request FAULDING to return the rejected Components or
samples thereof for further testing. The test results, if any,
submitted to FMDC by FAULDING shall be deemed conclusive
unless FMDC notifies FAULDING within thirty (30) days of its
receipt of the Objection Notice or the samples, whichever is
later, that it disagrees with such test results. In the event
of such notice by FMDC, the rejected Components or samples
thereof shall be submitted to a mutually acceptable
independent laboratory (the "Independent Laboratory") for
analysis in the form of 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 Components rejected by
FAULDING do not meet specifications, FMDC will ensure that
such Components are replaced with conforming goods within
ninety (90) days from the date of the Report, provided that
the departure from specifications is not due to any fault or
act of FAULDING. All transportation, shipping and insurance
costs and other fees incident to the shipping back to FMDC of
the Components determined by the Report to be defective and
the shipping to FAULDING of the replacement Components will be
paid for by FMDC if the Components have been determined by the
Report to be defective.
13. AUDITS
13.1 During any visit contemplated by Section
12.1(e) of this Agreement, FAULDING shall have the right (a)
to inspect the manufacturing facilities, (b) to inspect
quality control procedures and (c) to review any records
maintained pursuant to Section 12.1(c) to ensure that the
manufacturer of the Components complies with all applicable
regulations.
13.2 After giving reasonable written notice to
FAULDING, FMDC shall have the right during ordinary business
hours, twice annually, and at its own cost, to have
independent auditors inspect and audit the accounts and
records referred to in Section 8.6 of this Agreement.
13.3 After giving reasonable written notice to
FMDC, FAULDING shall have the right during ordinary business
hours, twice annually, and at its own cost, to have
independent auditors inspect and audit the accounts and
records referred to in Section 7.3 hereof.
13.4 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.
14. ONCO-TAIN TECHNOLOGY
14.1 FMDC acknowledges and agrees that FAULDING is
the owner of the ONCO-TAIN Technology and of all industrial
and intellectual property rights in relation to the ONCO-TAIN
Technology, including the right to patents, registered or
other designs, copyright, and any other confidential
information. Nothing contained in this Agreement shall be
effective to give FMDC any rights of ownership in and to the
ONCO-TAIN Technology including, without limitation, any
improvements to such Technology, and to the intellectual
property owned by FAULDING.
14.2 In the event that FMDC shall desire to
manufacture or market any product which in any way utilizes
the ONCO-TAIN Technology anywhere, within or outside the
Territory, the parties agree to negotiate in good faith to
determine whether they can reach an agreement that is
commercially acceptable to both of them.
15. OPERATIONAL KNOW-HOW
15.1 FMDC acknowledges and agrees that FAULDING is
the owner of the Operational Know-How and of all industrial
and intellectual property rights in relation to the
Operational Know-How, including the right to patents,
registered or other designs, copyright, and any other
confidential information. Nothing contained in this Agreement
shall be effective to give FMDC any rights of ownership in and
to such Operational Know-How including, without limitation,
any improvements to such Know-How, and FMDC's right to use the
Operational Know-How, as set forth in Section 15.2 of this
Agreement, shall be for the sole purpose of replicating and
scaling-up on the SGV Equipment the process for the
manufacture of products utilizing the Devices Technology.
15.2 The parties understand and agree that FMDC, or
an Affiliate of FMDC other than FAULDING(collectively or
alternatively, "the "Manufacturer") may undertake to
manufacture products utilizing the Devices Technology. In
such event, FAULDING agrees to negotiate in good faith with
the Manufacturer to reach mutually acceptable and commercially
reasonable rates and terms on which to:
(a) provide to the Manufacturer all
Operational Know-How in its possession as may
be necessary and helpful to replicate and
scale-up the process for the manufacture of
products utilizing the Devices; and
(b) provide appropriate scientists and
engineers to aid the Manufacturer in the
commissioning of the SGV Equipment and the
replicating and scaling-up of the process of
manufacturing products utilizing the Devices,
all at the reasonable cost of the
Manufacturer.
15.3 For the purposes of Section 15.2:
(a) "commercially reasonable rates and terms"
shall mean rates and terms that are not less
favorable to the Manufacturer than those rates
and terms, which in the reasonable judgement
of each of FAULDING and the Manufacturer,
could be obtained by the Manufacturer from a
non-affiliated third-party in an arms-length
negotiation in the ordinary course of its
business for similar work; and
(b) "aid...in the commissioning of the SGV
Equipment and the replicating and scaling-up
of the process of manufacturing products
utilizing the Devices" shall include, without
limitation, providing to the Manufacturer on-site
FAULDING engineers to assist in the
scaling-up process, to the reasonable
satisfaction of the Manufacturer, and
permitting personnel of the Manufacturer, at
the Manufacturer's reasonable expense, to
visit FAULDING's premises in Australia for
technical discussions relating to operations
of the SGV Equipment.
16. OWNERSHIP AND LICENSING OF TRADEMARKS
16.1 FMDC acknowledges and agrees that FAULDING is
the beneficial owner of each of the Trademarks. With respect
to any Trademarks that have heretofore been registered by FMDC
(under either its current name or its prior name, DBL, Inc.,
FAULDING, at its sole discretion, may direct FMDC in writing,
at any time and from time to time, to assign any or all of
such Trademarks, at FMDC's cost, to FAULDING or its designee.
Upon receipt of FAULDING's directive, FMDC shall promptly
deliver to FAULDING, or to FAULDING's nominee, any documents
in its possession relating to such Trademark(s) and shall
execute all such documents as may be required, or as FAULDING
may deem appropriate, to ensure any such assignment is
effected.
16.2 FAULDING hereby licenses to FMDC the right to
use the Trademarks in connection with the manufacture,
distribution and sale, outside of the Territory, of the
Devices and products utilizing such Devices, subject to the
terms and conditions of this Agreement. FMDC shall use the
Trademarks only upon, in connection with, and under the terms
of this license. Each of the Trademarks shall at all times be
used in accordance with acceptable trademark practices,
including use of the appropriate notice of registration,
legend or symbol wherever permitted or required by applicable
law. All packaging and promotional material shall so indicate
the licensing of the Trademarks and FMDC, upon FAULDING's
request, will provide FAULDING with samples of all uses of the
Trademarks. FMDC acknowledges and agrees that all goodwill in
the Trademarks shall accrue to FAULDING.
17. WARRANTY
17.1 FMDC represents and warrants to FAULDING that:
(a) it has the corporate authority to enter
into this Agreement and to perform its
obligations hereunder;
(b) it is not aware of any legal, contractual
or other restriction, limitation or condition
which might affect adversely its ability to
perform hereunder;
(c) it is the owner of the Devices Technology
free and clear of any liens or encumbrances of
third parties and has sufficient right, title
and interest in the Devices Technology to
grant the license to FAULDING granted
hereunder for the purpose of manufacturing and
marketing FAULDING Manufactured Products
within the Territory; and
(d) the Components delivered to FAULDING by or
on behalf of FMDC pursuant to this Agreement
shall (i) meet the specifications for such
Components, which have been agreed to by the
parties, at the time of delivery by FMDC to
FAULDING; (ii) be manufactured using materials
mutually approved by the parties and (iii) be
manufactured and stored in compliance with all
applicable laws and regulations, including,
without limitation, Good Manufacturing
Practices; provided, however, that the
warranty provided by FMDC to FAULDING in this
Section 17.1(e)is specifically limited to the
utilization of such Component as part of a
Device and FMDC hereby makes no representation
or warranty whatsoever with respect to the
stability, safety or efficacy of the use of
any Product in a FAULDING Manufactured Product
format.
17.2 FAULDING represents and warrants to FMDC that:
(a) it has the corporate authority to enter
into this Agreement and to perform its
obligations hereunder;
(b) it is not aware of any legal contractual
or other restriction, limitation or condition
which might affect adversely its ability to
perform hereunder.
(c) it is the owner of the ONCO-TAIN
Technology and the Operational Know-How clear
of any liens or encumbrances of third parties
and, upon the licensing of either the
Operational Know-How, or the ONCO-TAIN
Technology as contemplated, respectively, by
Sections 14 and 15 hereof, it will be the
owner of the ONCO-TAIN Technology or
Operational Know-How, as the case may be, free
and clear of any liens or encumbrances and to
the best of its knowledge on the date hereof,
will have sufficient right, title and interest
in the ONCO-TAIN Technology or Operational
Know-How, as the case may be, to grant a
license to FMDC on the terms and conditions
proposed, respectively, in Sections 14 and 15
hereof; and
(d) to the best of its knowledge as of the
date hereof, none of the Trademarks infringes
the rights of any third parties in the United
States of America.
18. INDEMNITY
18.1 FMDC agrees to indemnify, defend and hold
harmless FAULDING, its Affiliates and subsidiaries and their
respective employees against any and all claims, losses
(except consequential losses, such as, for example, the loss
of business or of profits), damages and liabilities, including
reasonable attorney's fees, (a) relating to the Components
supplied hereunder, including liability for death or personal
injury, that results from the negligence or willful misconduct
of FMDC, or (b) arising out of any breach of any obligation
by FMDC hereunder or any representation or warranty by FMDC
hereunder; provided, however, that the indemnity provided by
FMDC pursuant to this Section 18.1 is limited strictly to the
use of Components and Devices and FMDC shall under no
circumstances be held liable, and FAULDING shall hold FMDC
harmless, as set forth in Section 18.2, for any claims or
losses arising from any Product's utilization in conjunction
with a Device or the stability, safety or efficacy of the use
of any Product in a FAULDING Manufactured Product.
18.2 FAULDING agrees to indemnify, defend and hold
harmless FMDC, its Affiliates and subsidiaries and their
employees against any and all claims, losses(except
consequential losses, such as, for example, the loss of
business or of profits), damages and liabilities, including
reasonable attorney's fees, incurred by any of them (a)
relating to any Product's utilization in conjunction with a
Device or the stability, safety or efficacy of the use of any
Product in a FAULDING Manufactured Product or to any other
claim with respect to any FAULDING Manufactured Product
distributed or sold hereunder, including liability for death
or personal injury that results from the negligence or willful
misconduct of FAULDING, or (b) arising out of any breach of
any obligation by FAULDING hereunder, any representation or
warranty by FAULDING hereunder, or any act or omission of
FAULDING or any of its Affiliates or sub-licensees in
connection with the marketing, distribution and sale of the
FAULDING Manufactured Products hereunder.
18.3
(a) If FAULDING or any of its Affiliates or
subsidiaries or FMDC or any of its Affiliates or subsidiaries
(in each case an "Indemnified Party") receives any written
claim which it believes is the subject of indemnity hereunder
by FMDC or FAULDING, as the case may be, (in each case as
"Indemnifying Party"), the Indemnified Party shall, as soon as
reasonably practicable after forming such belief, give notice
thereof to the Indemnifying Party, including full particulars
of such claim to the extent known to the Indemnified Party;
provided, that the failure to give timely notice to the
Indemnifying Party as contemplated hereby shall not release
the Indemnifying Party from any liability to the Indemnified
party other than pursuant to this Section 18. The
Indemnifying Party shall have the right, by prompt notice to
the Indemnified Party, to assume the defense of such claim
with counsel reasonably satisfactory to the Indemnified Party,
and at the cost of the Indemnifying Party. If the
Indemnifying Party does not so assume the defense of such
claim or, having done so, does not diligently pursue such
defense, the Indemnified Party may assume such defense, with
counsel of its choice, but for the account of the Indemnifying
Party. If the Indemnifying Party so assumes such defense, the
Indemnified Party may participate therein through counsel of
its choice, but the cost of such counsel shall be for the
account of the Indemnified Party.
(b) The party not assuming the defense of any such
claim shall render all reasonable assistance to the party
assuming such defense, and all out-of-pocket costs of such
assistance shall be for the account of the Indemnifying Party.
(c) No such claims shall be settled other than by
the party defending the same, and then only with the consent
of the other party, which shall not be unreasonably withheld;
provided, that the Indemnified Party shall have no obligation
to consent to any settlement of any such claim which imposes
on the Indemnified Party any liability or obligation which
cannot be assumed and performed in full by the Indemnifying
party.
18.4
(a) FMDC shall have no liability hereunder for any
claim (hereinafter a "Manufacture Infringement Claim") which,
if true, would constitute a breach of the warranties contained
in Section 17.1(c)hereof based on FAULDING's manufacture or
distribution of any FAULDING Manufactured Product, as the case
may be, after FAULDING receives a notice from FMDC that
FAULDING should cease such manufacture or distribution due to
a Manufacture Infringement Claim.
(b) FAULDING shall have no liability hereunder for
any claim (hereinafter a "Trademark Infringement Claim")
which, if true, would constitute a breach of the warranties
contained in Section 17.2(d)hereof based on FMDC's use of any
of the Trademarks after FMDC receives a notice from FAULDING
that FMDC should cease using any such Trademark due to a
Trademark Infringement Claim.
19. PATENT PROSECUTION AND MAINTENANCE
19.1 FAULDING agrees, on FMDC's behalf and at
FMDC's cost, to apply for, obtain and maintain the Patents.
All expenses for the prosecution and maintenance of each of
the Patents shall be paid by FMDC to FAULDING within sixty
(60) days after FMDC's receipt of an invoice from FAULDING for
such expenses; provided, however, that FAULDING shall seek
instruction from FMDC before each significant action is taken
during the prosecution and maintenance of the Patents and
provided further, however, that FAULDING shall not incur any
cost not usually incurred in the ordinary course of
prosecuting or maintaining such Patents, and which is more
than $1000, without receiving prior approval in writing from
FMDC. FMDC agrees, at its own cost, to co-operate fully with
FAULDING in the prosecution and maintenance of the patents as
reasonably requested by FAULDING in writing.
19.2 FAULDING shall promptly furnish FMDC with true
copies of the Patent(s) concerned.
20. PATENT AND TRADEMARK INFRINGEMENT
20.1 Each party will promptly notify the other
party of any infringement or possible infringement by a third
party of any of the Patents or Trademarks and any claim of
litigation by a third party alleging invalidity of any of the
Patents or Trademarks. Moreover, in the event of any claim or
threat of litigation by a third party alleging infringement by
any of the Patents or Trademarks or if either party discovers
that any of the Patents or Trademarks infringe, or may
possibly infringe, a third party's intellectual property
rights, each Party shall promptly give notice of such claim or
litigation to the other Party.
20.2 The "Litigating Party", which shall be:
(a) FMDC with respect to any actions associated with
alleged infringement of or by the Patents; and
(b) FAULDING with respect to any actions associated with
alleged infringement of or by the Trademarks,
shall have the right but not the obligation to defend or
prosecute any right with respect to such Patent or Trademark,
as the case may be. In such event, the other party shall
cooperate with the Litigating Party.
20.3 If the Litigating Party fails to prosecute or
defend any such action (a) within ninety (90) days after its
giving or receiving notice thereof or, (b) if applicable,
within the earlier of (i) ninety (90) days after the
Litigating Party receives notice of any such action or (ii)
fifteen (15) days prior to the last day permitted by the court
in which the action has been filed to file responsive
pleadings, then the other party shall have the right, but not
the obligation, to prosecute or defend any such action on its
own behalf and, if necessary to sustain standing, the right to
name the Litigating Party, or, if applicable, its successor or
assignee, as a party plaintiff. In such event, the Litigating
Party shall reasonably cooperate with the other party.
20.4 The party prosecuting or defending the action
shall control all aspects of such action and bear all costs of
such action and the proceeds of such action, of which there is
no indemnification or for which indemnification is not sought,
shall belong to the prosecuting or defending party.
21. CONFIDENTIALITY
21.1 FAULDING agrees with FMDC that it will not
disclose to any person or corporation any confidential
information of FMDC that it may acquire at any time during the
term of this License Agreement, including, without limitation
the Devices Technology and any improvements to the Devices
Technology, without the prior written consent of FMDC and that
FAULDING will use all reasonable efforts to prevent
unauthorized publication or disclosure by any person of such
Technology, including, without limitation, requiring its
employees, consultants, Affiliates, sub-licensees and agents
to enter into similar confidentiality agreements in relation
to the Technology and such other confidential information.
21.2 FMDC agrees with FAULDING that it will not
disclose to any person or corporation any confidential
information of FAULDING that it may acquire at any time during
the term of this License Agreement, including, without
limitation, the Operational Know-How and the ONCO-TAIN
Technology without the prior written consent of FAULDING and
that FMDC will use all reasonable efforts to prevent
unauthorized publication or disclosure by any person of such
confidential information, including requiring its employees,
consultants, Affiliates and agents to enter into similar
confidentiality agreements in relation to such confidential
information.
21.3 The obligations undertaken by each party under
this Section 21 shall continue in force for a period of five
(5) years following the termination or expiration of this
Agreement.
21.4 The obligations contained in this Section 21
do not apply to any information:
(a) 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;
(b) 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;
(c) acquired by a party from a third party otherwise
than in breach of an obligation of confidence to the other
party;
(d) required by law to be provided to governmental
agencies but only for the purpose of providing it to such
governmental agencies;
(e) provided to any Regulatory Authority in the Territory
in connection with the registration of a Device or FAULDING
Manufactured Product; or
(f) disclosed to an Affiliate of either party for
purposes consistent with this Agreement.
22. TAXATION ISSUES
22.1 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 the United States. 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 22.1, either party, upon written notice to the
other party, may terminate this Agreement. The provisions of
Section 25.3 of this Agreement shall apply upon any
termination of the Agreement pursuant to this Section 22.1.
22.2 Each of the parties agrees to provide
reasonable assistance, at the Affected Party's reasonable
cost, if the Affected Party is subject to a taxation audit
that reviews any commercial arrangement of this Agreement.
23. 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 or by
express mail 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 being agreed
and understood by the parties that any such notice shall be
deemed given and served on the dates transmitted by facsimile
or a date ten (10) days after the date of airmail by post or
express mail:
To: FAULDING
The Company Secretary
F.H. FAULDING & CO. LIMITED
160 Greenhill Road
PARKSIDE South Australia 5063
Facsimile +618 373 3120
To: FMDC
President
FAULDING MEDICAL DEVICE CO.
8777 East Via De Ventura
Suite 315
Scottsdale, Arizona 85258
United States of America
Facsimile +1 602 951 9540
with a copy to:
Chief Financial Officer
FAULDING MEDICAL DEVICE CO.
200 Elmora Avenue
Elizabeth, New Jersey 07207
United States of America
Facsimile +1 908 355 7048
24. ASSIGNMENT
Neither party to this Agreement shall assign any
rights hereunder to third parties other than the right of
payment of monies accrued without the prior written consent of
the other party; provided, however, that the restriction
contained herein shall in no way limit the rights to
sublicense granted to FAULDING under Section 3 of this
Agreement or the rights of either party to make assignments to
Affiliates. This Agreement shall be binding upon any
permitted assignee or successor of either party.
25. TERM AND TERMINATION
25.1 This Agreement shall be for a term of twenty
(20) years commencing as of the date of this Agreement and
shall automatically be renewed thereafter for up to four
successive five-year terms unless written 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.
25.2 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
ninety (90) 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 (other than voluntary liquidation
for the purpose of internal reorganization), 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 to or compulsorily
acquired by any other person.
25.3 Upon the expiration of, or the termination of
this Agreement by either party, FAULDING shall have the right
in each country in the Territory in which, prior to such
termination, it has commenced marketing a Device or a FAULDING
Manufactured Product, to Market such Device or FAULDING
Manufactured Product under the terms of this Agreement until
the earlier of:
(a) three years after the date of expiration or date of
termination; or
(b) the date upon which the applicable Regulatory
Authority has approved for marketing an alternative
drug device for utilization with such Product (the
"Extension Period").
25.4 Upon the latter of:
(a) the termination or expiration of this Agreement,
(b) the termination or expiration of the Extension Period
set forth in Section 25.3 hereof, or
(c) with respect to any records or other data that must
be retained for a period of time in accordance with, and
as set forth in, the regulations of the Regulatory
Authorities in the Territory (the "Retention Period"),
the expiration of the Retention Period,
FAULDING shall promptly deliver to FMDC all information with
respect to the Devices Technology in FAULDING's possession and
FMDC shall promptly deliver to FAULDING all information with
respect to the ONCO-TAIN Technology and Operational Know-How,
if any, in FMDC's possession and the parties shall as soon as
conveniently possible reconcile all accounts.
26. NON WAIVER
Any party's failure to exercise or enforce any right
conferred upon it under this Agreement shall not be deemed to
be a waiver of any such right or operate to bar the exercise
or performance thereof at any time or times thereafter nor
shall any party's waiver of any right under this Agreement at
any given time including rights to any payment be deemed a
waiver for any other time.
27. GOVERNING LAW
This Agreement shall be deemed to be a contract made
under and shall be governed by and construed in accordance
with the laws of the State of New York.
28. 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.
29. 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.
FAULDING MEDICAL DEVICE CO.
By:
F.H. FAULDING & CO. LIMITED
By:
LICENSING AND SUPPLY AGREEMENT
BETWEEN
FAULDING MEDICAL DEVICE CO.
AND
F.H. FAULDING & CO. LIMITED
TABLE OF CONTENTS
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . 2
2. EXCLUSIVE LICENSE TO THE DEVICES TECHNOLOGY. . . 5
3. SUB-DISTRIBUTORS . . . . . . . . . . . . . . . . 6
4. COMPETING PRODUCTS; EXCEPTIONS TO EXCLUSIVITY. . 7
5. INTELLECTUAL PROPERTY RIGHTS OF FMDC . . . . . . 8
6. IMPROVEMENTS TO THE DEVICES TECHNOLOGY . . . . .10
7. PURCHASE PRICE OF THE COMPONENTS . . . . . . . .11
8. REDUCTION OF PURCHASE PRICE. . . . . . . . . . .12
9. COMPONENTS: FORECASTS, ORDERS AND PAYMENT. . . .14
10. REGISTRATION; REGULATORY APPROVALS . . . . . . .16
11. ADVERSE EVENTS; RECALLS. . . . . . . . . . . . .17
12. QUALITY CONTROL . . . . . . . . . . . . . . . .18
13. AUDITS . . . . . . . . . . . . . . . . . . . . .19
14. ONCO-TAIN TECHNOLOGY . . . . . . . . . . . . . .20
15. OPERATIONAL KNOW-HOW . . . . . . . . . . . . . .21
16. OWNERSHIP AND LICENSING OF TRADEMARKS. . . . . .22
17. WARRANTY . . . . . . . . . . . . . . . . . . . .23
18. INDEMNITY. . . . . . . . . . . . . . . . . . . .24
19. PATENT PROSECUTION AND MAINTENANCE . . . . . . .27
20. PATENT AND TRADEMARK INFRINGEMENT. . . . . . . .27
21. CONFIDENTIALITY. . . . . . . . . . . . . . . . .28
22. TAXATION ISSUES. . . . . . . . . . . . . . . . .30
23. NOTICES. . . . . . . . . . . . . . . . . . . . .30
24. ASSIGNMENT . . . . . . . . . . . . . . . . . . .31
25. TERM AND TERMINATION . . . . . . . . . . . . . .32
26. NON WAIVER . . . . . . . . . . . . . . . . . . .33
27. GOVERNING LAW. . . . . . . . . . . . . . . . . .33
28. ENTIRE AGREEMENT . . . . . . . . . . . . . . . .33
29. HEADINGS . . . . . . . . . . . . . . . . . . . .34
Schedule A . . . . . . . Components, Devices & Patents
Schedule B . . . . . . Pre-existing Negotiations and
Obligation of FAULDING
Schedule C . . . . . . . Pre-existing Negotiations of FMDC
Schedule D . . . . . . . Trademarks