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EXHIBIT 10.45
CONFIDENTIAL TREATMENT REQUESTED AS TO CERTAIN INFORMATION CONTAINED IN THIS
EXHIBIT 10.45 AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXECUTION COPY
MANUFACTURING, PACKAGING AND SUPPLY AGREEMENT
AMONG
INVERNESS MEDICAL INNOVATIONS, INC.,
INVERNESS MEDICAL SWITZERLAND GmbH,
UNIPATH, LTD.
AND
WARNER-LAMBERT COMPANY LLC
dated as of
JUNE 6, 2003
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MANUFACTURING, PACKAGING AND SUPPLY AGREEMENT
This MANUFACTURING, PACKAGING AND SUPPLY AGREEMENT dated as of June 6,
2003, by and among INVERNESS MEDICAL INNOVATIONS, INC., a Delaware corporation
having its principal office at 51 Sawyer Road, Suite 200, Waltham, MA 02453,
("Innovations") for purposes of Sections 6.3, 8, 11 and 12 of this Agreement
only, INVERNESS MEDICAL SWITZERLAND GMBH, a Swiss corporation, having its
principal office at Bundesplatz 10, 6300 Zug, Switzerland ("Inverness") for
purposes of Sections 6.2, 11 and 12 of this Agreement only, Unipath, Ltd., a
United Kingdom company with its principal office at Priory Business Park,
Bedford, MK 44 3UP ("Unipath") and WARNER-LAMBERT COMPANY LLC, a Delaware
limited liability company, having its principal office at 201 Tabor Road, Morris
Plains, New Jersey 07950 ("Warner-Lambert").
WITNESSETH:
WHEREAS, Warner-Lambert desires to have Unipath manufacture, package and
supply to Warner-Lambert, Warner-Lambert's requirements of early pregnancy test
kits complying with the Specifications ("EPT Product") for resale in the
Territory (defined below) under the terms and conditions hereinafter set forth,
and
WHEREAS, Unipath is willing to do so under the terms and conditions
hereinafter set forth, and
WHEREAS, each of Innovations and Inverness are direct or indirect parents
of Unipath and expect to derive substantial benefit from Unipath's execution of
and performance under this Agreement.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants, agreements, representations and warranties herein contained, the
parties hereby agree as follows:
1. DEFINITIONS
1.1. "AFFILIATE" shall mean, with respect to any Person, any other Person
controlling, controlled by or under direct or indirect common control with such
Person. A Person shall be deemed to control a corporation (or other entity) if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation (or other entity),
whether through the ownership of voting securities, by contract or otherwise.
1.2. "AGREEMENT" shall mean this Manufacturing, Packaging and Supply
Agreement and all Exhibits and Schedules attached hereto, as the same may be
amended or otherwise modified from time to time pursuant to the terms set forth
herein.
1.3. "ANNUAL MINIMUM" shall have the meaning set forth in Section 2.13.
1.4. "BUSINESS DAY" shall mean any day other than Saturday, Sunday or any
day on which the banks located in New York are authorized or obligated to be
closed.
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1.5. "CGMP" shall mean all applicable standards and Laws relating to
manufacturing practices for products (including ingredients, intermediates, bulk
and finished products) formulated by any Governmental Authority having
jurisdiction in the form of Laws, regulations, guidelines, advisory opinions and
compliance policy guides and current interpretations of the authority agency, as
the same may be updated, supplemented or amended from time to time.
1.6. "CONTRACT YEAR" shall have the meaning set forth in Section 2.13.
1.7. "ENVIRONMENTAL LAWS" shall mean all laws, rules, ordinances, codes,
regulations, governmental, administrative or judicial orders or decrees or other
legal requirements of any kind, whether currently in existence or hereafter
promulgated, enacted, adopted or amended, relating to pollution, contamination
of the environment, safety or protection of human health and environment
(including ambient air, surface water, groundwater, land or subsurface strata)
and the handling, treatment, transportation or disposal of Waste, including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. 9601 ET SEQ.; the Resource Conservation and Recovery Act of 1976, 42
U.S.C. 6901 ET SEQ.; the Federal Water Pollution Control Act, 33 U.S.C. 1251 ET
SEQ.; the Clean Air Act, 42 U.S.C. 7401 ET SEQ.; Occupational Safety and Health
Act, 29 U.S.C. 651 ET SEQ.; any state counterparts of the foregoing; any rules,
regulations, or guidances promulgated under the foregoing; and any other laws
and regulations related to emissions, spills, leaks, discharges, releases and
threatened releases of substances subject to regulation thereunder.
1.8. "ENVIRONMENTAL LOSSES" shall mean any and all fines, penalties,
costs, liabilities, damages, losses or expenses (including sampling, monitoring
or remediation costs, liabilities based on a finding of "successor" liability,
reasonable attorneys', consultants' or engineering fees and disbursements, costs
of defense and interest expense) incurred by Warner-Lambert or an Affiliate of
Warner-Lambert or for which Warner-Lambert or an Affiliate of Warner-Lambert is
liable or obligated pursuant to any Environmental Law (a) arising out of the
operation, ownership or control of Unipath's facilities, the facilities of any
Affiliates of Unipath, or the facilities of any subcontractors of Unipath or its
Affiliates or (b) arising from the manufacturing, generation, processing,
storage, transportation, distribution, treatment, disposal or other handling of
Product or materials used in the manufacture and packaging of the Product, or
associated by-product, raw materials, intermediates, Wastes, Hazardous
Materials, emissions, releases, spills, leaks or discharges, or returned
Product, by Unipath, Affiliates of Unipath, or subcontractors of Unipath or its
Affiliates, or their officers, directors, employees, agents or contractors.
1.9. "EPT PRODUCT" shall have the meaning set forth in the recitals
hereto.
1.10. "FACILITY" shall mean Unipath's manufacturing facility located at
Priory Business Park, Bedford, MK 44 3UP, and, subject to Warner-Lambert's prior
qualification and written approval, approval not to be unreasonably withheld,
such other facilities to be used by Unipath or its Affiliates in the
manufacture, packaging and storage of Product or materials utilized in the
manufacture and packaging of Product hereunder.
1.11. "FIRM ORDER" shall have the meaning set forth in Section 2.4.3.
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1.12. "FIRM ORDER PERIOD" shall have the meaning set forth in Section
2.4.3.
1.13. "GOVERNMENTAL AUTHORITY" shall mean any duly authorized court,
tribunal, arbitrator, agency, commission, official or other instrumentality of
any federal, state, province, county, city or other political sub-division,
domestic or foreign.
1.14. "HAZARDOUS MATERIALS" shall mean any pollutant, contaminant,
hazardous or toxic substance, constituent or material and other wastes or other
substances regulated under any Environmental Law and may include Product
properly rejected pursuant to Section 4.12 hereof, but shall not include any
other returned Product.
1.15. "HAZARDOUS WASTE" shall mean waste arising from the manufacture and
packaging of the Product that is defined as "Hazardous" by applicable federal,
state, provincial or local laws, rules or regulations and may include Product
properly rejected pursuant to Section 4.12 hereof, but shall not include any
other returned Product.
1.16. "IMPROVEMENTS" shall mean (a) any new or modified product that
performs the same function as the Product in a better or more economical way or
(b) any new or modified product that performs the same function as the Product
and costs less to manufacture than the Product.
1.17. "INNOVATIONS" shall have the meaning set forth in the preamble
hereto.
1.18. "INTELLECTUAL PROPERTY" means the Patents and Know-How.
1.19. "INVERNESS" shall have the meaning set forth in the preamble hereto.
1.20. "KNOW-HOW" means any current or future manufacturing processes and
information related thereto (including, without limitation, manufacturing, and
inventory ordering lead-times, and procedures and vendor and other records),
trade secrets, designs, industrial models, technology, technical information or
data, manufacturing, engineering, and technical drawings, know-how,
methodologies, formulae, concepts, inventions, improvements, copyrights,
clinical data and FDA 510(k) filings related to the registration, supply
marketing, use or sale of the Product.
1.21. "LAWS" shall mean any law, statute, rule, regulation, guideline
(including cGMP), ordinance or other pronouncement of any Governmental Authority
having the effect of law in the United States, any foreign country or territory,
or any domestic or foreign state, province, county, city or other political
sub-division, including any Environmental Law.
1.22. "PATENTS" means the patents and patent applications (and the related
resulting patents) listed on Exhibit B to this Agreement and any addition,
continuation, continuation-in-part, division, reissue, extension, or patent term
extension of, and any substitute application for, any such patent or patent
application and any other current or future patents, patent applications or
patent rights related to the Product or the registration, supply, marketing,
issue or sale of the Product.
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1.23. "PERSON" shall mean any individual or corporation, company,
partnership, trust, incorporated or unincorporated association, joint venture or
other entity of any kind.
1.24. "PRICE" shall mean the price to be charged by Unipath for Product
supplied hereunder, as set forth on Exhibit C, as the same may be amended or
otherwise modified from time to time pursuant to the terms set forth herein.
1.25. "PRODUCT" shall mean the EPT Product in finished and packaged form.
1.26. "PRODUCT SUPPLY DATE" shall have the meaning specified in Section
2.4.1.
1.27. "PRODUCT UNIT" shall mean each e.p.t(R) brand early pregnancy test
stick purchased by Warner - Lambert from Unipath.
1.28. "PRODUCT WRITINGS" shall mean text, writings, artwork and documents,
including without limitation, text and artwork for the Product, Product
packaging and Product inserts, created by or on behalf of Warner-Lambert for the
Product.
1.29. "QUALITY AGREEMENT" shall have the meaning set forth in Section 4.14.
1.30. "RECALL", with respect to any Product, shall mean a "recall",
"correction" or "market" withdrawal, as those terms are defined in 21 CFR 7.3,
as the same may be amended from time to time, and shall include any post-sale
warning or mailing of information regarding such Product, including those
warnings or mailings described in 21 CFR 200.5.
1.31. "RECEIVING POINT" shall have the meaning set forth in Section 3.2.
1.32. "RELEASE" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Materials through the ambient air, soil, subsurface water,
groundwater, wetlands, lands or subsurface strata.
1.33. "SPECIAL WASTE" shall mean waste arising from the manufacture and
packaging of the Product hereunder, including labeling that contains, or has
come into contact with, the Product or raw materials, including Product properly
rejected pursuant to Section 4.12 of this Agreement, rejected or unusable raw
materials, disposable manufacturing equipment (including filters used in
manufacturing and packaging), wash rinse and previously used or discarded
protective clothing. Special Waste does not include Hazardous Waste or
wastewater which is discharged under a National Pollutant Discharge Elimination
System Permit or discharged to a publicly owned treatment works or returned
Product not properly rejected pursuant to Section 4.12 hereof.
1.34. "SPECIFICATIONS" shall mean the specifications for the raw materials
and packaging materials used in the manufacture and/or packaging of the Product
and the specifications for the manufacture, processing and packaging of the
Product, including all formulae, Know-How, materials requirements, standards of
quality control, quality assurance and sanitation, as mutually agreed upon in
writing by Warner-Lambert and Unipath. Final
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Specifications for the Product, as mutually agreed upon in writing by
Warner-Lambert and Unipath, are referenced in Exhibit D. If Specifications have
not yet been finalized as of the date hereof, as noted on such Exhibit, the
parties shall finalize such Specifications by written agreement as soon as
reasonably practicable after the date hereof.
1.35. "START-UP ACTIVITIES" shall have the meaning set forth in Section 2.1
and Exhibit A hereof.
1.36. "TERM" shall have the meaning set forth in Section 12.1 hereof.
1.37. "TERM MINIMUM" shall have the meaning set forth in Section 2.13.
1.38. "TERRITORY" means the United States, its territories and possessions.
1.39. "UNIPATH" shall have the meaning set forth in the preamble hereto.
1.40. "WARNER-LAMBERT" shall have the meaning set forth in preamble hereto.
1.41. "WASTE" shall mean all wastes which arise from the manufacture and
packaging of Product hereunder including Hazardous Waste and Special Waste.
The definitions in this Section 1 shall apply equally to both the singular
and plural forms of the terms defined. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Sections and Exhibits shall be deemed references to
Sections of this Agreement and Exhibits to this Agreement unless the context
shall otherwise require.
2. START-UP ACTIVITIES; SUPPLY OF PRODUCT; FIRM ORDERS AND REPORTS.
2.1. START-UP ACTIVITIES. Unipath hereby represents, warrants and agrees
that:
(a) Unipath shall comply with and complete all manufacturing and packaging
start-up activities with respect to the Product, including the manufacture or
ordering of all Product materials, the Product manufacturing and packaging
trials, validation protocols, validation activities, written validation reports,
the activities listed in Exhibit A hereto on the dates listed therein and any
other activities agreed to be performed by Unipath..
(b) Any protocols and reports prepared by Unipath relating to the Product
(including any validation reports) shall be subject to Warner-Lambert's prior
review and approval, such approval not to be unreasonably withheld.
(c) Unipath shall permit a reasonable number of Warner-Lambert employees
(such number to be mutually agreed by Unipath and Warner-Lambert) to observe and
review the Start-Up Activities at the Facility during normal business hours and
on reasonable notice subject to Warner-Lambert employees' compliance with
Facility rules and regulations regarding security, health and safety. Unipath
and Warner-Lambert have jointly developed or shall jointly develop a project
plan to determine the timeline for the ordering and receipt of Product packaging
materials
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for the Product. The validation reports produced hereunder shall be
deemed confidential information of Unipath and Warner-Lambert hereunder and
shall not be disclosed by either party to any third party, except as permitted
under Section 11 hereof.
(d) The activities described in this Section 2.1 are collectively referred
to herein as the "Start-Up Activities".
2.2. PURCHASE AND INSTALLATION OF EQUIPMENT, MOLDS AND TOOLING. Unipath
shall be responsible for purchasing, installing, qualifying and maintaining at
its Facility any and all new or used equipment, molds, tooling and/or
modifications to existing equipment, molds and/or tooling necessary for the
manufacturing, packaging, labeling and shipment of Product hereunder. All costs
and expenses associated with such purchase, installation, qualification and
maintenance shall be borne by Unipath. To the extent Warner-Lambert purchases or
otherwise pays for any equipment, molds or tooling for the manufacture or
packaging of Product, all such equipment, molds and tooling shall be the
property of Warner-Lambert. Unipath shall use such tooling only in connection
with the manufacture and packaging of the Product under this Agreement and shall
not modify such tooling without the consent of Warner-Lambert. The installation,
qualification and maintenance of all equipment, molds and tooling shall be
conducted in accordance with all applicable Laws, and any relevant
Specifications.
2.3. AGREEMENT TO SUPPLY. During the Term of this Agreement Unipath shall
manufacture, package and supply the Product to Warner-Lambert in accordance with
terms of this Agreement.
2.4. FORECAST ; FIRM ORDERS; CHANGES TO FIRM ORDERS.
2.4.1 Unipath will first deliver Product to Warner-Lambert, on June 6, 2004
(the "Product Supply Date").
2.4.2 Beginning six (6) months after the date of this Agreement and
continuing on each calendar month during the term of this Agreement,
Warner-Lambert shall provide Unipath with written forecast of its
estimated monthly purchases of the Product for the twelve (12) month
period commencing with the calendar month following the month in
which such forecast is delivered to Unipath (except that in the case
of forecasts delivered prior to May 2004, such forecasts shall be for
the twelve (12) month period beginning on the Product Supply Date).
Such forecasts shall represent Warner-Lambert's commercially
reasonable, good-faith estimate of its Product requirements from
Unipath for such twelve (12) month period in light of then existing
conditions. Except as provided in Section 2.4.3, such forecasts are
for the convenience of Unipath only, shall not constitute firm
purchase or shipping orders and shall not be binding upon, or create
any obligation or liability with respect to, Warner-Lambert or
Unipath.
2.4.3 Beginning with the forecast delivered in May 2004, at the time each
written forecast is delivered by Warner-Lambert to Unipath pursuant
to Section 2.4.2, the first three (3) months of such forecast (the
"Firm Order Period") shall be deemed
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a firm order (a "Firm Order") for the Product, which Firm Order shall
specify actual quantities and delivery dates for the Product for the
Firm Order Period. Quantities of Product delivered pursuant to a Firm
Order shall not vary more than plus or minus five percent (+/- 5%) of
such Firm Order. Unipath shall deliver the Product on the delivery
date specified by Warner-Lambert in the relevant Firm Order or up to
fifteen (15) Business Days prior to such delivery date.
Warner-Lambert shall be obligated to pay Unipath in accordance with
Section 3.1, for quantities of Product produced and delivered by
Unipath in accordance with the instructions contained in
Warner-Lambert's Firm Orders, subject to any exceptions to
Warner-Lambert's obligation to pay for such Product contained in this
Agreement.
2.4.4 Once a Firm Order is submitted to Unipath with respect to any given
Firm Order Period, Warner-Lambert may reasonably vary that Firm Order
by providing at least five (5) days' written notice to Unipath prior
to the beginning of the month for which such Firm Order is to be
varied during such Firm Order Period; PROVIDED, HOWEVER, that Unipath
shall have thirty (30) days from the day of such variance notice to
deliver the amount of Product that is in excess of the amount ordered
by Warner-Lambert pursuant to the original Firm Order.
Notwithstanding the immediately preceding sentence, in the event
Warner-Lambert wishes to increase a Firm Order by greater than
twenty-five percent (25%), Unipath is only required to make
reasonable commercial efforts to produce such additional volume of
Product for Warner-Lambert.
2.4.5 If Warner-Lambert decreases the production volumes set forth in
Warner-Lambert's Firm Orders, Warner-Lambert shall be responsible for
the reasonable cost of materials for the Product purchased by Unipath
and in accordance with Warner-Lambert's Firm Orders; PROVIDED,
HOWEVER, that Warner-Lambert shall not be responsible for the
reasonable cost of materials for (i) any materials in excess of a
ninety (90) day supply unless such excess supply was specifically
authorized in writing by Warner-Lambert or (ii) any materials that
are or will be subsequently used by Unipath. At Warner-Lambert's
option, Warner-Lambert may instruct Unipath to utilize such materials
in the future supply of Product. In addition, Unipath shall use
reasonable efforts to utilize such materials in the supply of Product
so as to minimize the amount of such materials that remain unused.
2.5. STANDARD FORMS. In ordering and delivering Product, Warner-Lambert
and Unipath may employ their standard forms, but nothing in those forms shall be
construed to modify or amend the terms of this Agreement, and, in the case of
any conflict herewith, the terms of this Agreement shall control.
2.6. QUANTITATIVE DEFECTS. Warner-Lambert shall inform Unipath in writing
of any claim relating to quantitative defects in shipments of Product within
thirty (30) days following actual receipt of such shipments by Warner-Lambert,
and Warner-Lambert shall provide to Unipath copies of any appropriate documents
relating to such defects that Warner-Lambert may
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have in its possession. Unipath shall, at its own expense, provide
Warner-Lambert with any missing quantities of such Product as soon as reasonably
possible after receipt of notice from Warner-Lambert. Warner-Lambert shall only
be obligated to pay for actual quantities of Product received by Warner-Lambert.
Any claim for a quantitative defect which is not made within such thirty (30)
day period shall be deemed to have been waived by Warner-Lambert.
2.7. INVENTORY; CARRYING CHARGES. Unipath will keep adequate inventories
of Product materials on hand or with suppliers to accommodate variations in
quantities and packaging that may be reasonably required by Warner-Lambert
hereunder, consistent with Section 2.4 above. In the event Unipath is required,
pursuant to this Agreement, to hold inventory of non-active raw materials and/or
Product for more than 180 days, Unipath shall have the right to charge
Warner-Lambert for reasonable inventory carrying charges (not to exceed 9% of
Unipath's cost of non-active raw materials in the held inventory) to compensate
Unipath for the carrying cost of such inventory, if the existence of such
inventory arose as a result of a change in sales forecast by Warner-Lambert.
Such inventory carrying charges shall be periodically invoiced to
Warner-Lambert, as incurred, together with suitable back up information
evidencing the carrying charges and Warner-Lambert shall pay such invoices
within thirty (30) days after receipt.
2.8. NO THIRD PARTY CONFLICTS. Unipath shall not manufacture or process
goods for itself or a third party where to do so will, as a consequence, delay
delivery of Warner-Lambert's identified requirements of Product (including any
reasonable increases in Warner-Lambert's delivery requirements thereof pursuant
to the terms of Section 2.4 hereof).
2.9. PRODUCT SAMPLES. Unipath shall provide Warner-Lambert with samples of
the Product (other than retention samples) promptly upon request. Such Product
samples shall be shipped to Warner-Lambert in accordance with the provisions set
forth in Section 3.2 hereof, and Warner-Lambert shall pay the Price for such
Product in the manner described in Section 3.3.
2.10. ALTERNATIVE SUPPLY. Notwithstanding the provisions of Section 2.11,
if at any time during the Term of this Agreement Unipath does not for a period
of thirty (30) days or more, or anticipates that it will not, fill the total
monthly Product volume required by Warner-Lambert's forecasts, or the Product
supplied by Unipath does not meet or comply with the Specifications for a period
of thirty (30) days or more, Unipath must (a) procure from a third party
quantities of Product sufficient to replace any quantities of Product which
Unipath cannot or will not supply, or (b) otherwise provide for an alternative
source of Product. Unipath shall promptly notify Warner-Lambert in the event
that it cannot or will not meet forecasted volumes, or in the event Product does
not meet or comply with Specifications. Unipath shall use its best efforts with
Warner-Lambert to resolve such problems during the thirty (30) day period.
Unipath and its Afiliates shall cooperate with, and supply all reasonable
technical assistance, including, without limitation, technical personnel, at
Unipath's expense, to any alternate supplier, and shall assist in the disclosure
of Intellectual Property to such supplier and such supplier shall have complete
access to and use of such Intellectual Property during the period Unipath shall
be unable or unwilling to supply Product, or the Period during which the Product
fails to meet Specifications; PROVIDED THAT any alternate supplier to whom
Unipath or its Affiliates must disclose Intellectual Property in accordance with
this Section 2.10, shall be required to execute a
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confidentiality agreement prior to disclosure. If Unipath does not provide an
acceptable alternative source of supply within 60 days of the first date (x)
Unipath was unable or unwilling to supply Product, or (y) the Product failed to
meet Specifications, in addition to any other rights it may have hereunder or at
law, Warner-Lambert may terminate this agreement in accordance with Section
12.2. Each of Inverness and Unipath shall indemnify Warner-Lambert, its
Affiliates and their directors, officers, agents, consultants and employees for
the aggregate losses, including an increase in the price paid by Warner-Lambert
to a third-party supplier of the substitute product in connection with the
exercise of its rights under this SECTION 2.10. The parties agree that the
indemnification procedures set forth in Section 8.4 shall be followed by the
parties with respect to the foregoing indemnification.
2.11. *****
2.12. UNIPATH RESTRICTION ON MANUFACTURE. Unipath shall, and shall cause
its Affiliates to, comply with applicable Law as it applies to manufacturing,
marketing, packaging or selling products (i) similar to the Product using all or
any portion of Warner-Lambert's customized design format, or (ii) using
packaging and/or tradedress materials that make comparisons to or are
substantially similar to the Product and/or Warner trademarks, packaging or
tradedress materials. Warner-Lambert has reviewed the products and packaging
listed on Schedule A attached hereto, in the form provided by Inverness as of
the date hereof, and acknowledges that none of such products or packaging
infringe the tradedress of the Product or Warner-Lambert's trademarks. Any claim
or dispute arising out of or in connection with this Section 2.12 shall be
referred to and finally resolved by binding arbitration under the Commercial
Arbitration Rules of the American Arbitration Association ("AAA"), which Rules
are deemed to be incorporated by reference into this clause. The number of
arbitrators shall be three, all of which shall be neutral. The arbitrators shall
be selected from the AAA's National roster of Arbitrators through selection
procedures administered by the AAA within 15 Business Days from commencement of
the arbitration. The place of arbitration shall be New York, New York. The
language to be used in the arbitral proceedings shall be English. The tribunal
shall apply the substantive law of New York, except that the interpretation and
enforcement of this arbitration provision shall be governed by the Federal
Arbitration Act. Prior to commencement of arbitration, emergency relief is
available from any court to avoid irreparable harm. The award of the arbitration
tribunal shall be final and judgment upon such an award may be entered in any
competent court for judicial acceptance of such an award and an order of
enforcement. Until the judgment of the arbitration tribunal has been rendered,
neither party may claim that there has been a breach of this Agreement based on
Section 2.12.
2.13. MINIMUM PURCHASE REQUIREMENTS; PRICE REDUCTIONS; VOLUME DISCOUNTS.
***** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
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(a) *****
<Table>
<Caption>
ANNUAL PERIOD PURCHASE REQUIREMENT
- --------------------------------------------------------------------------------
First Contract Year ******
- --------------------------------------------------------------------------------
Second Contract Year ******
- --------------------------------------------------------------------------------
Third Contract Year ******
- --------------------------------------------------------------------------------
Fourth Contract Year ******
- --------------------------------------------------------------------------------
Fifth Contract Year ******
- --------------------------------------------------------------------------------
</Table>
(b) Subject to Section 12, at the end of the Fifth Contract Year,
Warner-Lambert shall pay Unipath an amount equal to ****** multiplied
by the number that is equal to ****** million less the aggregate number of
Product units purchased by Warner-Lambert during the Term (the "Term Minimum").
(c) Any minimum purchase payment due under this Section for a Contract Year
shall be calculated by Unipath within sixty (60) days of the end of the relevant
Contract Year and invoiced to Warner-Lambert and shall be paid by Warner-Lambert
in the same manner as invoices issued pursuant to Section 3.3.
(d) As of the date all Warner-Lambert purchases made pursuant to this
Agreement add up to ****** million Product units, the Price of the Product shall
be reduced for the remainder of the Term as set forth in Section II of Exhibit
C.
(e) If Warner-Lambert purchases Product units from Unipath, an Affiliate of
Unipath or any party licensed by Unipath or its Affiliates to manufacture or
sell the Product, at or above the volumes set forth below during any Contract
Year, the Product Price set forth on Exhibit C shall be reduced for all Product
purchased during such Contract Year in accordance with the table below. Warner -
Lambert agrees to order only the amount of Product it believes in good faith is
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
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necessary to meet demand from its customers, and shall not order additional
Product in order to qualify for the volume discounts provided for in this
Section 2.13(e).
<Table>
<Caption>
PRODUCT UNITS PURCHASED PRICE REDUCTION
- --------------------------------------------------------------------------------
****** ******
- --------------------------------------------------------------------------------
****** ******
- --------------------------------------------------------------------------------
****** ******
- --------------------------------------------------------------------------------
****** ******
- --------------------------------------------------------------------------------
</Table>
3. PRICE; PAYMENT; SHIPPING INSTRUCTIONS.
3.1. DETERMINATION OF PRICES; COST OF MATERIALS. The Price to be paid to
Unipath by Warner-Lambert for the manufacture, packaging and supply of the
Product, shall be as set forth in Exhibit C, subject to the adjustments
described elsewhere in this Agreement. Such Price includes any costs relating to
Unipath's compliance with the quality provisions of this Agreement and the
provisions of the Quality Agreement. *****
3.2. SHIPPING INSTRUCTIONS; RISK OF LOSS. Unipath shall deliver Product
ordered by Warner-Lambert pursuant to Section 2.4, CIP (named destination) as
defined in the Incoterms 2003 to Warner-Lambert's designated facilities (the
"Receiving Point"). Unipath shall be responsible for designating the carrier(s)
and negotiating terms for shipment of the Product and shall bear the cost of
freight, including shipping insurance, relevant custom duties, import and export
fees, taxes and all other charges applicable to the Product until it is
delivered by Unipath to the Receiving Point. Warner-Lambert shall assume all
risk of the loss for the Product upon delivery by a carrier to the Receiving
Point. Unipath shall be responsible for and hereby agrees to store and ship
Product consistent with the Product's labeling until delivered to the Receiving
Point. Warner-Lambert shall be responsible for and hereby agrees to store and
ship Product consistent with the Product's labeling after it is delivered to the
Receiving Point.
3.3. INVOICES; QUANTITIES. Unipath shall submit invoices to Warner-Lambert
for all shipments of Product hereunder upon delivery of such Product to
Warner-Lambert's loading dock (which invoices shall be directed by Unipath to
Warner-Lambert's Accounts Payable Department at such locations as Warner-Lambert
may instruct from time to time), and such invoices shall be payable within
thirty (30) days of the date on which the invoice submitted by Unipath is
received by Warner-Lambert. Invoices shall be payable in U.S. dollars
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
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3.4. TAXES. The Prices set forth in Exhibit C shall include sales, use,
consumption, or excise taxes of any taxing authority. Unipath and its Affiliates
hereby indemnify Warner-Lambert against, and shall reimburse Warner-Lambert for,
any expenditure Warner-Lambert may be required to make as a result of Unipath's
failure to pay such taxes or other governmental charges to the relevant taxing
authorities.
4. QUALITY CONTROL; ACCESS; INSPECTION; SAMPLES.
4.1. SPECIFICATIONS. Unipath shall supply the Product to Warner-Lambert in
accordance with the Specifications which may be modified or changed only by the
mutual written agreement of the parties. To the extent that such modification or
change results in an increase or decrease in the cost of manufacturing any
Product, the parties shall jointly examine and mutually agree upon the
consequences thereof and shall make an appropriate increase or decrease to the
purchase price of such Product arising from such modification or change. At
least four (4) weeks prior notice to the other party is required for any
requested Specifications change; provided, however, that if any requested
Specifications change requires additional regulatory approval(s), the
implementation of such requested change shall in no event be required until four
(4) weeks after such approval(s) have been obtained. Warner-Lambert shall not
withhold consent to Specification changes proposed by Unipath for the primary
purpose of terminating this Agreement.
4.2. STORAGE REQUIREMENTS. Unipath shall store all materials and Product
in accordance with the Specifications in a clean and dry area, in facilities
with insect and rodent pest controls to assure no contamination. Pest control
measures by Unipath must include adequate cleaning of the facility, control of
food and drink, protection of Product from the environment, monitoring of flying
and crawling pest, and logs detailing findings and actions taken. Unipath's pest
control program must be described in written procedure. Failure to maintain an
adequate pest control program shall constitute a material breach of this
Agreement. Storage and handling of all materials and Product shall be in
accordance with the provisions of all applicable Laws and the quality control
programs and standards set forth in the Specifications. Bulk Product and other
materials utilized by Unipath in connection with the manufacturing, processing
and packaging of the Product shall be used by Unipath on a first in, first out
basis and shall not be used by Unipath beyond the shelf life required under
applicable Laws or as designated in the Specifications.
4.3. NONCONFORMING MATERIALS. Unipath shall not use any packaging or other
Product materials that do not comply with the Specifications or Laws. Unipath
shall promptly contact Warner-Lambert, c/o Warner-Lambert's Quality Assurance
Department or such other persons or departments as Warner-Lambert may instruct,
in the event that Unipath anticipates making changes to any such material or in
the event Unipath considers any such material to be nonconforming or
unacceptable. If Unipath uses any non-conforming Product material without prior
written approval by Warner-Lambert, Unipath shall be responsible for all losses,
costs and expenses suffered or incurred by Warner-Lambert as a result of such
use and any expenses incurred by Unipath in the correction thereof regardless of
any involvement Warner-Lambert may have had in connection with such material
including supplying or purchasing Product materials or designating approved
suppliers; PROVIDED THAT, except for visually observable
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defects, Unipath shall have no responsibility for any non-conformity of Product
materials at the time received by Unipath.
4.4. QUALITY TESTS AND CHECKS. Unipath shall perform all in-process and
finished product tests or checks required by the Specifications or applicable
Laws. For purposes of this Agreement, such tests shall be considered routine and
shall be performed at Unipath's expense; PROVIDED THAT, in the event that
Warner-Lambert requests any tests in addition to the foregoing, Warner-Lambert
shall compensate Unipath for the cost of such additional tests in accordance
with a method to be mutually determined. All tests and test results shall be
performed, documented and summarized by Unipath in accordance with the
Specifications and applicable Laws. All costs associated with changes to the
Specifications made as a result of changes to applicable Laws after the date
hereof which affect the Specifications and which are mutually agreed by the
parties shall be pwassed on to Warner-Lambert on a dollar-for-dollar basis.
4.5. PRODUCTION CODES; RECORDS. Unipath shall maintain detailed records on
Product material usage and finished Product production, including code dates and
shipping information relating to Product, in order that Product can be easily
traced in case of a Recall. Such records shall also comply with any additional
instructions issued by Warner-Lambert and mutually agreed by the parties.
Unipath's Product records shall be sufficient such that Unipath shall be capable
of responding to Product inquiries by Warner-Lambert within one (1) Business Day
of notification, including providing the code date and the location of the
Product in question.
4.6. RECALLS. Unipath must comply and assist with any Recall initiated by
Warner-Lambert. Unipath may not initiate a Recall if Warner-Lambert objects to
such Recall, except to the extent, in the reasonable opinion of Unipath's
counsel, Unipath is required to do so by law. Warner-Lambert shall have sole
responsibility for managing any Recall of the Product, PROVIDED THAT,
Warner-Lambert shall consult with Unipath prior to initiating any Recall for
which it appears that Unipath might bear the expense pursuant to the last
sentence of this Section 4.6. All communications with parties other than the
United States Food and Drug Administration, in connection with any Recall, shall
come solely from Warner-Lambert. Upon receiving from any authority having
jurisdiction any direction to Recall any Product from the market, the receiving
party shall immediately notify the other party in accordance with the terms
hereof. To the extent any Recall results solely from the negligence, willful
misconduct or breach of this Agreement by Unipath, the cost of implementing any
such Recall shall be borne by Unipath.
4.7. MAINTENANCE OF FACILITY AND EQUIPMENT. Unipath shall maintain all
equipment, tooling and molds used in the manufacture, packaging and supply of
Product hereunder in good operating condition and shall maintain the Facility
and such equipment, tooling and molds in accordance with, or shall exceed, all
requirements set forth in the Specifications and all applicable Laws. In the
event Unipath fails or anticipates it will fail to meet any of the foregoing
requirements relating to Unipath's maintenance of the Facility or such
equipment, tooling or molds, or in the event Unipath receives any notice from
any Governmental Authority with respect to its maintenance of, or failure to
maintain, the Facility or such equipment, tooling or molds, Unipath shall
promptly notify Warner-Lambert, c/o Contract Operations Group of
Warner-Lambert's Quality Assurance Department (or such other person as
Warner-Lambert may
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direct), provide copies of such notice to Warner-Lambert and, if such notice
relates specifically to the Product, provide a copy of Unipath's response for
Warner-Lambert's review.
4.8. INSPECTIONS AND AUDITS. Warner-Lambert shall have access to Unipath's
Facility for the purpose of conducting inspections, performing quality control
audits or witnessing the processing, storage or transportation of Product or
materials related to or used in the manufacture or packaging of Product, and
Warner-Lambert shall have access to the results of any Product tests performed
by Unipath or at Unipath's direction. Warner-Lambert shall also be permitted to
audit that portion of Unipath's books and records pertaining to the packaging
and supply of Product under this Agreement to the extent reasonably necessary to
verify Unipath's compliance with its production and packaging obligations under
this Agreement; PROVIDED THAT such audit shall not include a review of financial
information. Unipath shall use its commercially reasonable best efforts to
ensure that Warner-Lambert has similar access to the facilities, data and
records of Unipath's suppliers or agents. Such inspections do not relieve
Unipath of any of its obligations under this Agreement or create new obligations
on the part of Warner-Lambert. Inspections and audits by Warner-Lambert
personnel hereunder shall be conducted to the extent reasonably required by
Warner-Lambert and upon reasonable notice, during normal business hours and in
compliance with the confidentiality provisions set out in Section 11 hereof and
Unipath's rules and regulations relating to Facility security, health and
safety.
4.9. RETENTION OF SAMPLES AND RECORDS. Unipath shall retain, and upon
request by Warner-Lambert make available to Warner-Lambert, (a) copies of the
quality control records maintained in accordance with Section 4.5 and otherwise
in relation to the Product, (b) copies of testing results of all the tests
performed in relation to the Product and (c) samples of the materials used in
the processing and packaging of the Product to the extent reasonably requested
by Warner-Lambert or required by applicable Laws. All quality control and
assurance records will be maintained by Unipath for a minimum of one (1) year
following the Product expiration date or such other longer time period as may be
required by applicable Laws.
4.10. GOVERNMENT INSPECTIONS, SEIZURES AND RECALLS. If the United States
Food and Drug Administration or any other Governmental Authority makes an
inspection at Unipath's premises which involves any function performed by
Unipath which has application to any Product, or seizes Product or requests a
recall of Product, Warner-Lambert's Quality Assurance Department, or such other
person or group as Warner-Lambert may designate, shall be notified within twelve
(12) hours and Unipath shall take such actions as may be required under the
Specifications. Unipath shall promptly send retained samples of Product seized
by such authority and duplicate reports relating to such inspections to
Warner-Lambert, c/o Warner-Lambert's Quality Assurance Department.
4.11. LEGAL AND REGULATORY FILINGS AND REQUESTS. Unipath and Warner-Lambert
shall cooperate and be diligent in responding to all requests for information
from, and in making all required filings with, regulatory authorities having
jurisdiction to make such requests or require such filings. Unipath shall obtain
and comply with all licenses, consents, permits and regulations which may from
time to time be required by appropriate legal and regulatory authorities with
respect the performance of its obligations hereunder.
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4.12. REJECTION OF PRODUCT/LATENT DEFECTS. Warner-Lambert shall have the
right to give Unipath written notice of rejection of any shipment of Product
that in whole or in part breaches Unipath's warranties, covenants and
obligations under this Agreement; which notice shall be given promptly, and in
any event within thirty (30) days, after discovery of such breach. *****
The expense for such testing and for any costs associated with the
destruction of such Product shall be borne by Warner-Lambert except to the
extent it is determined that Unipath is responsible for such failure or
breach. At Warner-Lambert's option, Unipath shall replace Product which does
not conform with Unipath's warranties under this Agreement as soon as
reasonably possible, taking into account Warner-Lambert's production schedule
as communicated pursuant to Section 2 hereof. Warner-Lambert shall have the
right to setoff any refund due Warner-Lambert on account of rejected Product
against invoices otherwise due or which become due to Unipath. The provisions
of this Section 4.12 shall survive termination of this Agreement with respect
to Product packaged by Unipath that is received or sold by Warner-Lambert
subsequent to the termination or expiration of this Agreement but prior to
any last sale date on the Product(s) labels(s), provided, that subsequent to
the termination or expiration of this Agreement, Warner-Lambert, in lieu of
having Unipath replace such rejected Product, may elect to have Unipath
reimburse Warner-Lambert for the purchase price actually paid for such
Product.
4.13. COMPLAINTS. In connection with any Product complaints forwarded by
Warner-Lambert to Unipath, Unipath shall conduct all necessary reviews of
records and testing of such Product and investigate such complaint, at no
additional cost to Warner-Lambert, all in accordance with the Quality Agreement
(as hereinafter defined).
4.14. QUALITY AGREEMENT. Simultaneously with the execution of this
Agreement, Warner-Lambert and Unipath have entered into a Quality Agreement
which further details the quality assurance obligations and responsibilities of
the parties with respect to the Product ("Quality Agreement").
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
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4.15. HEALTH AND SAFETY PROCEDURE. Unipath shall be solely responsible for
implementing and maintaining health and safety procedures for the manufacture,
packaging and handling at the Facility of the raw materials, Hazardous
Materials, Waste, packaging components and Product as provided herein. Such
procedures shall comply with all applicable Environmental Laws. Warner-Lambert
shall have no responsibility for developing, implementing or overseeing
Unipath's health and safety program.
4.16. TRAINING. Unipath shall educate and train all affected employees and
contractors about the potential hazards associated with the handling of the
Hazardous Materials, Waste, and the manufacture, packaging, analyzing and
handling of the Product and the raw materials and packaging components, and on
the proper use of engineering controls, process equipment and appropriate
personal protective equipment. Warner-Lambert shall have no responsibility for
educating, training or ensuring knowledge of any Unipath employees and
contractors about the potential hazards associated with the handling of any
Hazardous Materials, packaging components, Waste and the analyzing, handling,
manufacturing and packaging of the Product, and on the proper use of engineering
controls, process equipment and appropriate personal protective equipment.
Warner-Lambert shall, however, provide Unipath with all material safety data
sheets, occupational exposure limits or standards relating to the manufacture of
the Product, or other safety-related information to the extent such information
is available.
5. ENVIRONMENTAL MATTERS
5.1. WASTE MATERIALS. The generation, collection, storage, handling,
disposal, transportation and Release of all Hazardous Materials and Waste shall
be the responsibility of Unipath and the cost for providing such services shall
be borne exclusively by Unipath. As part of the services, Unipath shall collect,
handle, package, label and store, treat or dispose of Hazardous Materials and
Waste, in a proper and lawful manner, and shall comply with all Laws governing
such activity. All Waste generated as a result of the manufacturing process
shall be handled and disposed of by Unipath using onsite environmental systems,
or, at Unipath's option, through a responsible waste contractor. Unipath, with
Warner-Lambert's cooperation, shall be responsible for developing and
implementing all procedures necessary to prevent diversion of Product and any
labeling materials from the waste stream, including rendering the Product
unsalable. Unipath shall immediately notify Warner-Lambert by telephone at such
number as Warner-Lambert may specify by written notice to Unipath and
Warner-Lambert's Corporate Security at 212-573-7900 if at any time it believes
that the Product or any labeling materials have been lost or stolen.
5.2. ENVIRONMENTAL PERMITS, LICENSES AND AUTHORIZATIONS. Unipath shall be
responsible for obtaining and shall obtain all necessary environmental or other
licenses, certificates, approvals or permits from Governmental Authorities and
any private permissions, whether original documents or modifications to existing
documents, which are necessary to perform the services in connection with the
manufacture and packaging of the Product and shall provide copies thereof to
Warner-Lambert upon request by Warner-Lambert. Unipath shall provide
Warner-Lambert with immediate verbal notice, confirmed in writing within two (2)
Business Days, in the event of revocation or modifications of any license,
certificate, approval or
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permit which in any way materially impacts Unipath's ability to provide services
or use the Facility to manufacture the Product as set forth herein.
5.3. HAZARDOUS AND SPECIAL WASTES. In the event any current or future raw
materials, packaging components, finished product or wastes resulting from the
manufacture of the Product hereunder are deemed Hazardous Waste or Special
Waste, Unipath shall be responsible for obtaining all necessary environmental or
other licenses, certificates, approvals or permits from Governmental Authorities
and any private permissions which are necessary in connection with the proper
handling, storage, treatment or disposal of such Hazardous Waste or Special
Waste generated as a result of the manufacture and packaging of the Product in
the Facility. All costs and expenses relating to the proper handling, storage,
treatment or disposal of such Hazardous Waste or Special Waste, including the
cost of obtaining any required licenses, certificates, approvals or permits (or
permit modifications) shall be borne solely by Unipath; provided, however, in
the event that any change in law (including, without limitation, any
Environmental Law) after the date of this Agreement results in a requirement for
any additional or new license, certificate, approval or permit (or permit
modification), the costs of obtaining the same shall be equitably allocated
between the parties by mutual agreement. Unipath shall also prepare and execute,
as the generator of the Hazardous Waste or Special Waste, all shipping documents
and waste manifests required under applicable Environmental Laws and shall
maintain all records for the term and in the manner required by all applicable
Environmental Laws with respect to the Hazardous Waste or Special Waste.
5.4. HAZARDOUS OR SPECIAL WASTE DISPOSAL. Unipath or a Hazardous Waste or
Special Waste contractor contracted by Unipath and authorized to handle,
transport and dispose of the Hazardous Waste or Special Waste, as the case may
be, shall handle, package and label the Hazardous Waste and Special Waste in a
lawful and proper manner, and shall comply with all Laws governing such
activity. Both Unipath or the contractor, as the case may be, and the disposal
facility shall be duly licensed and authorized to handle the Hazardous Waste or
Special Waste, as the case may be. Unipath agrees to make, or cause to be made,
periodic and timely pick-ups of the Hazardous Waste and Special Waste and shall
not allow such Waste to remain on-site for any period of time in excess of that
required by Environmental Laws or as required in order to abate a safety or
health hazard arising from the Hazardous Waste or Special Waste.
6. REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS.
6.1. REPRESENTATIONS AND WARRANTIES OF UNIPATH. Unipath hereby represents,
warrants and covenants to Warner-Lambert that:
(a) all corporate action on its part and on the part of each of its
officers and directors necessary for the authorization, execution and delivery
of this Agreement and the performance of its obligations hereunder has been
taken;
(b) this Agreement is the legal, valid and binding obligation of Unipath,
enforceable against it in accordance with its terms;
(c) neither the execution and delivery of this Agreement nor the
performance of the obligations contemplated hereby will; (i) conflict with or
result in any violation of or constitute a
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breach of any of the terms or provisions of or result in the acceleration of any
obligation under, or constitute a default under any provision of Unipath's
Articles of Incorporation or By-laws or any contract or any other obligation to
which Unipath is a party or under which Unipath is subject or bound, or (ii)
violate any judgment, order, injunction, decree or award of any Governmental
Authority, against, or affecting or binding upon, Unipath or upon the
securities, property or business of Unipath, or (iii) constitute a violation by
Unipath of any applicable law or regulation of any jurisdiction as such law or
regulation relates to Unipath or to the property or business of Unipath;
(d) the Facility is in substantial compliance with all applicable Laws
with respect to its obligations under this Agreement, and that there are no
circumstances or conditions known to it that would reasonably be expected to
prevent such compliance from continuing during the Term, including interference
with Seller's ability to manufacture or supply the Product;
(e) the Product furnished by Unipath to Warner-Lambert under this
Agreement (i) shall be of the quality specified in, and shall conform with, the
Specifications, and (ii) shall be manufactured, processed, packaged, stored and
delivered in conformity with the Specifications and all applicable Laws, and
(iii) shall not contain any material provided by or on behalf of Unipath, which
material has not been used or stored in accordance with the Specifications, any
quality assurance standards contained in this Agreement and/or the Quality
Agreement as of the date hereof, and any such standards that may be later
developed by Warner-Lambert and agreed to by Unipath, agreement by Unipath not
to be unreasonably withheld, quality standards instructed by the supplier of
such material and all applicable governmental standards;
(f) Unipath has not and will not use any materials that would cause the
Product to be adulterated within the meaning of Section 501 of the Food, Drug
and Cosmetic Act, as amended (the "Act"); and further, the Product shall not be
misbranded within the meaning of the Act; provided, however that with respect to
any copy approved by Warner-Lambert, Warner-Lambert shall bear responsibility
for such copy.
(g) Unipath is free to enter into this Agreement and it has, and will
continue to have, the legal power, authority and right to perform its
obligations under this Agreement;
(h) Unipath has, and shall have, sufficient rights to the Intellectual
Property to perform its obligations hereunder.
6.2. REPRESENTATIONS AND WARRANTIES OF INVERNESS. Inverness hereby
represents, warrants and covenants to Warner-Lambert that:
(a) all corporate action on its part and on the part of each of its
officers and directors necessary for the authorization, execution and delivery
of this Agreement and the performance of its obligations hereunder has been
taken;
(b) this Agreement is the legal, valid and binding obligation of it,
enforceable against it in accordance with its terms;
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(c) neither the execution and delivery of this Agreement nor the
performance of the obligations contemplated hereby will; (i) conflict with or
result in any violation of or constitute a breach of any of the terms or
provisions of , or result in the acceleration of any obligation under, or
constitute a default under any provision of Inverness's Articles of
Incorporation or By-laws or any contract or any other obligation to which
Inverness is a party or under which Inverness is subject or bound, or (ii)
violate any judgment, order, injunction, decree or award of any Governmental
Authority, or affecting or binding upon, Inverness or upon the securities,
property or business of Inverness, or (iii) constitute a violation by Inverness
of any applicable law or regulation of any jurisdiction as such law or
regulation relates to Inverness or to the property or business of Inverness;
(d) it has, and shall have, sufficient rights to the Intellectual Property
to perform its obligations hereunder;
(e) it is free to enter into this Agreement and it has, and will continue
to have, the legal power, authority and right to perform it obligations under
this Agreement;
(f) there are no misuses of the Patents by Inverness or its Affiliates or
misappropriation of the Intellectual Property by Inverness or its Affiliates;
(g) the manufacture, sale or use of the Product does not infringe any
third-party patents as of the date hereof, and none of the manufacture, sale or
use of any Product delivered pursuant to this Agreement will, if presented in a
proper proceeding brought before a court of competent jurisdiction, infringe any
claim of any patent (i) issued as of the date of this Agreement, and (ii) owned
by a third party;
(h) there are no claims or actions, pending or threatened against or
affecting Inverness or it Affiliates which would be expected to adversely affect
the Product or the Intellectual Property, or prevent Inverness from performing
its obligations under this Agreement; and
(i) Inverness or its Affiliates have acquired all third-party licenses,
approvals, permissions and authorizations required to manufacture and sell the
Product to Warner-Lambert and all such licenses, approvals, permissions and
authorizations will remain valid during the Term.
6.3. REPRESENTATIONS AND WARRANTIES OF INNOVATIONS. Innovations hereby
represents, warrants and covenants to Warner-Lambert that:
(a) all corporate action on its part and on the part of each of its
officers and directors necessary for the authorization, execution and
delivery of this Agreement and the performance of its obligations
hereunder has been taken;
(b) this Agreement is the legal, valid and binding obligation of
Innovations, enforceable against it in accordance with its terms;
(c) neither the execution and delivery of the Agreement nor the
performance of the obligations contemplated hereby will: (i) conflict
with or result in any violation of or constitute a breach of any of
the terms or provisions of or result in the acceleration of any
obligation under, or constitute a default under any provision of
Innovations Articles of Incorporation or By-laws or any contract or
other obligation to which Innovations is a party or under which
Innovations is subject or
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bound; (ii) violate any judgment, order, injunction, decree or award
of any Governmental Authority, against, or affecting or binding upon,
Unipath or upon the securities, property or business of Innovations;
or (iii) constitute a violation by Innovations of any applicable Law
or regulation of any jurisdiction as such Law or regulation relates
to Innovations or to the property or business of Innovations; and
(d) Innovations is free to enter into this Agreement and it has, and will
continue to have, the legal power, authority and right to perform its
obligations under this Agreement.
6.4. REPRESENTATIONS AND WARRANTIES OF WARNER-LAMBERT. Warner-Lambert
hereby represents, warrants and covenants to Unipath that:
(a) all corporate action on its part and on the part of each of its
officers and directors necessary for the authorization, execution and
delivery of this Agreement and the performance of its obligations hereunder
has been taken.
(b) this Agreement is the legal, valid and binding obligation of it,
enforceable against it in accordance with its terms.
(c) neither the execution and delivery of this Agreement nor the
performance of the obligations contemplated hereby will; (i) conflict with
or result in any violation of or constitute a breach of any of the terms or
provisions of, or result in the acceleration of any obligation under, or
constitute a default under any provision of Warner-Lambert's Articles of
Incorporation or By-laws or any contract or any other obligation to which
Warner-Lambert is a party or under which Warner-Lambert is subject or
bound, or (ii) violate any judgment, order, injunction, decree or award of
any Governmental Authority against, or affecting or binding upon,
Warner-Lambert or upon the securities, property or business of
Warner-Lambert, or (iii) constitute a violation by Warner-Lambert of any
applicable law or regulation of any jurisdiction as such law or regulation
relates to Unipath or to the property or business of Warner-Lambert.
6.5. COMPLIANCE WITH LAWS. Unipath represents, warrants and covenants that
as of the date hereof (a) Unipath is, and during the term of this Agreement
Unipath shall continue to be, in full compliance with all applicable Laws
including all applicable labor and employment laws and Environmental Laws; and
(b) Unipath holds all licenses, permits and similar governmental authorizations
necessary or required for Unipath to conduct its operations and business. All
references in this Agreement to applicable Laws shall include the proposed
United States federal rule for current good manufacturing practices for the
manufacture, packing or holding of medical devices.
6.6. NOTICE OF MATERIAL EVENTS. Unipath hereby agrees to notify
Warner-Lambert promptly of any actual or anticipated events which are reasonably
likely to have, a material adverse effect on the Product or on Unipath's ability
to produce Product in accordance with the provisions set forth herein, including
any labor difficulties, strikes, shortages in materials, plant closings and
other interruptions in activity.
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7. OWNERSHIP; TRADEMARKS; PROPRIETARY INFORMATION.
7.1. OWNERSHIP OF INTELLECTUAL PROPERTY.
Warner-Lambert acknowledges that except for its design patent No. USD 383549 ,
all of the Intellectual Property currently involved in the manufacturing
process and function of the Product, as between Unipath and its Affiliates on
the one hand, and Warner-Lambert and its Affiliates on the other hand, is the
property of Unipath and its Affiliates.
(b) If any Improvements or modifications to the Product ("Inventions") are
developed by Warner-Lambert and are patentable, Warner -Lambert may elect to
file applications for patents for such Inventions prior to disclosing them to
Unipath, in which event such Inventions ("WL Inventions") shall be the exclusive
property of Warner-Lambert and shall treated as Information subject to Section
11 by Unipath and its Affiliates. The parties recognize that Inventions may
arise as a result of interactions between the parties, and that there may be
uncertainty as to the role of various individuals in conceiving of such
inventions. In order to reduce controversy with regard to the ownership of
Inventions other than WL Inventions, if and Inventions are disclosed by
Warner-Lambert to Unipath prior to the filing for a patent application for such
Inventions ("Assigned Inventions"), whether developed jointly by the parties or
exclusively by Warner-Lambert, (i) they shall be the exclusive property of
Inverness subject to the license in clause (ii) immediately below, (ii)
Warner-Lambert shall have a perpetual, fully-paid, royalty-free, non-exclusive
license to manufacture, sell and use products incorporating Assigned Inventions,
without the right to assign or sublicense; provided that Warner-Lambert may
assign or sublicense such license to its Affiliates and parties using products
sold by Warner-Lambert shall be licensed for the use of such product and parties
manufacturing product for sale by Warner-Lambert shall be licensed for the
manufacture of such product, (iii) Inverness shall be entitled to file
applications for patents and develop Assigned Inventions, and (iv)
Warner-Lambert shall cooperate as reasonably requested by Inverness to protect
Inverness' rights in Assigned Inventions. If Unipath or its Affiliates intend to
include an Assigned Invention in any pregnancy test kit, it shall offer to
include such Assigned Invention in the Product as contemplated by this
Agreement, and if Warner-Lambert accepts such offer within thirty (30) days,
Unipath and its Affiliates will not use the Assigned Inventions except for
Warner-Lambert's sole benefit for a period of one year from the date Product
incorporating such Assigned Invention is shipped by Warner-Lambert to its
customer. Any trademarks, trade names, brand names, slogans, logos, copyrights,
trade dress, and goodwill associated with the Product shall be the sole and
exclusive property of Warner-Lambert. None of Unipath and its Affiliates shall
have any right or license to use any such rights at any time before, during or
after the Term of this Agreement, except as necessary for the manufacture,
processing, packaging and supply of Product to Warner-Lambert hereunder. Except
as provided above in this subparagraph (b), technology or information owned by
Warner-Lambert or provided by Warner-Lambert to Unipath or its Affiliates in
connection with this Agreement shall not be (i) used by Unipath or its
Affiliates in the manufacture of any product or (ii) disclosed or made available
to any customers of Unipath or its Affiliates, or other third parties. All such
information shall be deemed confidential information subject to the provisions
of Section 11. Any Product Writings and Inventions relating to an ornamental
design feature of the Product that are protectable as intellectual property
rights (whether protectable under a design patent, copyright, or trademark or as
trade dress, trade secret or otherwise), including, without limitation,
ornamental design features related to the look and feel
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of the Product and Intellectual Property related thereto ("Warner-Lambert
Inventions") developed by Unipath or its Affiliates shall be the sole and
exclusive property of Warner-Lambert only as to such ornamental design feature.
Unipath shall promptly prepare and file with Warner-Lambert in relation to any
Warner-Lambert Invention, any invention records or memoranda requested by
Warner-Lambert at Warner-Lambert's expense. For the avoidance of doubt, with
respect to any Invention incorporated into a Product, the parties confirm that
Warner-Lambert has been granted royalty-free, irrevocable and exclusive right
and license to market, promote, sell, offer for sale and import, export Product
supplied by Unipath incorporating the foregoing Inventions. All licenses granted
pursuant to this paragraph (b) shall survive the expiration and termination of
this Agreement.
(c) If Warner-Lambert conducts a study that results in an additional
Product claim , none of Unipath and its Affiliates may use a similar claim for
other products that they manufacture for themselves or a third party; PROVIDED
THAT, if Unipath or its Affiliates already have a similar study in development
as of the date Warner-Lambert notifies Unipath (in accordance with Section 14.1)
of any additional Product claim, and Unipath notifies Warner-Lambert (in
accordance with Section 14.1) of such study within two (2) weeks and documents
the existence of the same through Unipath's internal written files, Unipath and
its Affiliate may continue to conduct its own study and make similar claims for
products it manufactures for itself or a third party, but only to the extent
Unipath's or its Affiliate's independent study fully supports such claim . At no
time may Unipath or its Affiliates rely on or make reference to any
Warner-Lambert study or claim in relation to any product it manufactures for
itself or a third party.
(d) Subject to 7.1(a), it is agreed that Warner-Lambert is the sole owner
of any and all Specifications supplied or paid for by Warner-Lambert, and none
of Unipath and its Affiliates shall use any such Specifications except in
connection with performance under this Agreement.
(e) ******.
(f) Each party will assist the other party in the procurement,
maintenance, protection, assignment and enforcement of the other party's rights
with respect to the Inventions, including without limitation, patents,
certificates of invention, copyrights and trademarks. In addition, each party
will, upon the other party's reasonable request, promptly deliver to such other
party (without charge) executed assignments or other instruments and do such
other acts as may reasonably be
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
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deemed necessary or desirable by other such party to protect such other party's
rights with respect to the Inventions and Warner-Lambert's Inventions.
(g) Unipath acknowledges that all Product Writings shall be owned
exclusively by Warner-Lambert. Unipath and its Affiliates hereby assign to
Warner-Lambert all right, title and interest in perpetuity throughout the world,
in and to said Product Writings created by or on behalf of Unipath, including
without limitation, the copyrights therein and all renewals and extensions
thereof.
(h) The provisions of Sections 7.1(b), (c), (d), (f), and (g) shall
survive the termination or expiration of this Agreement.
7.2. OWNERSHIP OF OTHER PROPERTY. Except as otherwise specified herein, it
is agreed that Unipath is the sole owner of any and all equipment, tools, dies,
printing plates, etc. used by Unipath in connection with the manufacture and
packaging of the Product in accordance with this Agreement. Unipath shall
maintain the above in good working order and shall ensure that they remain free
and clear of all liens and encumbrances that would impair their use under this
Agreement.
7.3. REPRODUCTION OF TRADEMARKS, ETC. In connection with Unipath's
performance of this Agreement, Warner-Lambert hereby grants Unipath the right to
reproduce and print on the Product Warner-Lambert trademarks, trade dress and/or
trade names of such Product which Warner-Lambert may designate in writing from
time to time, in accordance with trademark usage guidelines set forth in the
Specifications or otherwise provided by Warner-Lambert. Samples of all such uses
of such trademarks and/or trade names on the Product or Product packaging shall
be submitted to Warner-Lambert for its written approval prior to production. The
permission granted herein is restricted to the Product supplied under this
Agreement and extends only for the Term of this Agreement.
7.4. UNIPATH'S LIMITED RIGHTS TO USE. Nothing set forth in this Agreement
shall be construed to grant to Unipath any title, right or interest in or to any
trademark, trade name, copyright, patent or other proprietary technology owned
by Warner-Lambert, or any of its Affiliates, or to which Warner-Lambert, or any
of its Affiliates may have rights. Unipath's use of such trademarks, trade
names, copyrights, patents or other proprietary technology shall be limited
exclusively to its performance of this Agreement. Any other use of said
trademarks, trade names, copyrights, patents or other proprietary technology
shall constitute an infringement thereof and/or violation of Warner-Lambert's
rights.
7.5. WARNER-LAMBERT'S LIMITED RIGHTS TO USE. Nothing set forth in this
Agreement shall be construed to grant to Warner-Lambert any title, right or
interest in or to any trademark, trade name, copyright, patent or other
proprietary technology owned by Unipath, or any of its Affiliates, or to which
Unipath, or any of its Affiliates may have rights. Warner-Lambert's use of such
trademarks, trade names, copyrights, patents or other proprietary technology
shall be limited exclusively to its performance of this Agreement. Any other use
of said trademarks, trade names, copyrights, patents or other proprietary
technology shall constitute an infringement thereof and/or violation of
Unipath's rights. Notwithstanding the foregoing, with the prior written approval
of
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Unipath which shall not be unreasonably withheld, Warner-Lambert shall be
permitted to use Unipath's name and trademarks in connection with general
advertising and promotional activities.
8. INDEMNIFICATION.
8.1. INNOVATIONS' INDEMNIFICATION OF WARNER-LAMBERT. Except to the extent
Warner - Lambert is obligated to indemnify Unipath pursuant to Section 8.2,
Innovations shall indemnify, defend and hold Warner-Lambert, each Affiliate of
Warner-Lambert and the officers, directors and employees thereof (each a
"Warner-Lambert indemnified party") harmless from and against any and all
losses, liabilities, damages (including special and/or punitive damages in the
case of a claim for intellectual property infringement), claims, expenses,
suits, recoveries, judgments and fines (including reasonable attorneys' fees and
expenses) (collectively "Losses") that may be incurred by any Warner-Lambert
indemnified party arising out of any (a) damage to property or injury or death
occurring to any person arising out of possession or use by any person of the
Product; (b) injury to person or property or death occurring to any Unipath
employees, subcontractors, agents or any other individuals on Unipath's
premises; (c) claim, action or proceeding brought by any Governmental Authority
arising out of or resulting from any manufacture, packaging or supply of Product
by Unipath or its Affiliates; (d) breach by Inverness or Unipath of any of their
respective obligations, representations or warranties under this Agreement,
including a breach which results in a Recall of Product to the extent that
Unipath or its Affiliates is responsible for such Recall under Section 4.6, or
(e) any other grossly negligent act or omission on the part of Unipath or its
Affiliates; (f) any claim or action alleging unfair competition or infringement
of any patent, trademark, copyright or other intellectual property of any third
party by the manufacture, sale or use of the Product or the Intellectual
Property or; (g) violation of Environmental Laws in connection with the supply
of the Product hereunder.
8.2. WARNER-LAMBERT'S INDEMNIFICATION OF UNIPATH. Warner-Lambert shall
indemnify, defend and hold Unipath, each Affiliate of Unipath and the officers,
directors and employees thereof (each a "Unipath indemnified party") harmless
from and against any and all Losses that may be incurred by any Unipath
indemnified party arising out of any (a) damage to property or injury or death
occurring to any person (i) arising out of possession, use by any person of the
Product to the extent that such damage, injury or death was caused by the
contamination or adulteration of the Product while in the control of
Warner-Lambert or by any defective Specification furnished by Warner-Lambert;
(ii) caused by the presence of Warner-Lambert's employees or agents at the
Facility; or (iii) caused by any Product claim made by Warner-Lambert other than
claims that the Product functions as required by the Specifications, (b) breach
by Warner-Lambert of any of its obligations, representations or warranties under
this Agreement, including a breach which results in a Recall of Product,(c) any
other grossly negligent act or omission on the part of Warner-Lambert, or (d)
any claim or action alleging unfair competition or infringement of any patent,
trademark, copyright or other intellectual property of any third party by the
manufacture, sale or use of the Product based on trade dress, the ornamental
product design or product literature or WL-Inventions supplied by Warner Lambert
for use in or with the Product.
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8.3. ENVIRONMENTAL INDEMNITY. Innovations shall indemnify, defend and hold
Warner-Lambert and each Warner-Lambert indemnified party harmless from and
against any and all (a) Environmental Losses incurred by, claimed, or assessed
against any of them, (b) violations of Environmental Laws, and (c) Environmental
Losses arising from, based upon or caused by Inverness's or any of its
Affiliates or subcontractors' breach of any environmental obligation,
representation or warranty herein.
8.4. PROCEDURES. Any Person that may be entitled to indemnification under
this Agreement (an "Indemnified Party") shall give written notice to the Person
obligated to indemnify it (an "Indemnifying Party") with reasonable promptness
upon becoming aware of any claim or other facts upon which a claim for
indemnification will be based; the notice shall set forth such information with
respect thereto as is then reasonably available to the Indemnified Party. The
Indemnifying Party shall have the right to undertake the defense of any such
claim asserted by a third party with counsel reasonably satisfactory to the
Indemnified Party and the Indemnified Party shall cooperate in such defense and
make available all records, materials and witnesses reasonably requested by the
Indemnifying Party in connection therewith at the Indemnifying Party's expense.
If the Indemnifying Party shall have assumed the defense of the claim with
counsel reasonably satisfactory to the Indemnified Party, the Indemnifying Party
shall not be liable to the Indemnified Party for any legal or other expenses
(other than for reasonable costs of investigation) subsequently incurred by the
Indemnified Party in connection with the defense thereof. The Indemnifying Party
shall not be liable for any claim settled without its consent, which consent
shall not be unreasonably withheld or delayed. The Indemnifying Party shall
obtain the written consent of the Indemnified Party prior to ceasing to defend,
settling or otherwise disposing of any claim. In no event shall Inverness
institute, settle or otherwise resolve any claim or potential claim, action or
proceeding relating to the Product or any trademarks or other intellectual
property rights of Warner-Lambert without the prior written consent of
Warner-Lambert. In no event shall Warner-Lambert settle or otherwise resolve any
claim or potential claim, action or proceeding where such settlement or
resolution would negatively impact the intellectual property rights of Inverness
without the prior written consent of Inverness.
8.5. SURVIVAL. The indemnification obligations set forth in this Section 8
and Section 3.4 shall survive the expiration or termination of this Agreement.
8.6. LIMITATION OF LIABILITY. Except as otherwise provided herein, no
party shall have any liability under this Section 8 or otherwise for any
indirect, special, punitive or consequential losses, such as loss of profits or
goodwill, which may be incurred by the other party hereto as a result of
activities under this Agreement.
9. INSURANCE.
9.1. COVERAGE. Unipath shall acquire and maintain at its sole cost and
expense (a) Statutory Worker's Compensation Insurance and Employer's Liability
Insurance; (b) all risk coverage for physical loss or damage to materials and
Product while at the Facility or under its control; and (c) Product Liability,
Bodily Injury and Property Damage Insurance (with a Broad Form Vendor's
Endorsement naming Warner-Lambert, its subsidiaries and affiliated companies
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and the officers, directors, employees and agents thereof, as well as its
authorized distributors and customers as additional insureds) with a combined
single limit of not less than ******. Unipath shall use its commercially
reasonable best efforts to require its subcontractors, to the extent approved
hereunder, to provide the aforementioned coverages in an amount equal to the
lesser of their respective contract costs or ******.
9.2. CERTIFICATES OF INSURANCE; MAINTENANCE OF COVERAGE. Unipath shall
submit certificates of such insurance to Warner-Lambert (which shall include an
agreement by the insurer not to cancel such coverage except upon thirty (30)
days prior written notice to Warner-Lambert) for its approval before commencing
performance of this Agreement. Unipath shall maintain such insurance coverage in
effect for Warner-Lambert's benefit throughout the term of this Agreement and
for a period of one (1) year from the date of the last delivery of Product to
Warner-Lambert hereunder. In case of Unipath's failure to furnish such
certificates of insurance or cancellation of any required insurance,
Warner-Lambert shall notify Unipath of such failure and shall allow Unipath a
period of thirty (30) days to furnish such certificates. If such certificates
are not furnished within thirty (30) days of Unipath's receipt of such notice,
Warner-Lambert may, at its option, immediately terminate this Agreement.
10. RELATIONSHIP OF THE PARTIES.
10.1. The relationship between Warner-Lambert and Unipath is that of
independent contractors and nothing herein shall be deemed to constitute the
relationship of partners, joint venturers, nor of principal and agent between
Warner-Lambert and Unipath. Neither party shall have any express or implied
right or authority to assume or create any obligations on behalf of or in the
name of the other party or to bind the other party to any contract, agreement or
undertaking with any third party. All persons employed by Unipath in connection
with the packaging and supply of the Product to Warner-Lambert shall be
employees or agents of Unipath and under no circumstances shall Unipath or any
of its employees or agents be deemed to be employees or agents of
Warner-Lambert.
11. CONFIDENTIAL INFORMATION.
11.1. CONFIDENTIAL INFORMATION.
(a) In performing the obligations and permitted activities under this
Agreement, each party shall come in contact with certain confidential and
proprietary information of the other party ("Information"). Each party agrees
that it will:
(i) use such Information obtained from the other party
hereunder only in connection with the activities to be undertaken by each
party as contemplated hereunder;
(ii) restrict disclosure of such information within its own
organization to those of its employees having a reasonable need to know such
Information; and
(iii) not divulge to third parties, without the prior written
consent of the other party, any Information obtained from the other party
hereunder.
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
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Each party will protect such Information from unauthorized use, access or
disclosure with the same degree of care, but no less than a reasonable degree of
care, as it uses to protect its own Information.
(b) The foregoing confidentiality obligations shall not apply if and
to the extent that:
(i) the Information is known to the receiving party prior to
obtaining the same from the disclosing party, as properly demonstrated by the
receiving party's written records;
(ii) the Information is independently developed by employees of the
receiving party and/or by employees of any of its Affiliates, as properly
demonstrated by the receiving party's written records; or
(iii) the Information is obtained by the receiving party from a
third party who is not obligated to keep the Information confidential.
(c) Upon expiration or termination of this Agreement, each party
shall return to the other party all Information received from the other party.
The provisions of this Section 11 shall survive the termination or expiration of
this Agreement and for a period of eight (8) years thereafter.
(d) Unipath agrees not to use or refer to Warner-Lambert's name or
this Agreement in any public statements, whether oral or written, including but
not limited to, annual reports or shareholder reports, general advertising and
promotional activities, statements to other customers or prospective customers
or other communications, without Warner-Lambert's prior written consent, which
consent shall not be unreasonably withheld. All requests for Warner-Lambert's
consent shall be made in accordance with Section 14.1. Warner-Lambert agrees to
review and respond to each request for consent within three (3) Business Days.
If Warner-Lambert fails to respond within three (3) Business Days of any request
pursuant to this paragraph (d), Warner-Lambert will be deemed to consent to the
requested disclosure.
12. TERM; TERMINATION.
12.1 TERM. The term of this Agreement shall commence as of the date of
this Agreement and shall terminate on the sixth (6th) anniversary thereof,
unless earlier terminated in accordance with Section 12.2 hereof or otherwise
pursuant to the terms of this Agreement (the "TERM").
12.2 TERMINATION.
(a) This Agreement may be terminated at any time during the Term by
written notice by one party to the other party if:
(i) the other party shall suspend or discontinue its business
operations or make any assignment for the benefit of its creditors or commence
voluntary proceedings for liquidation
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in bankruptcy, or admit in writing its inability to pay its debts generally as
they become due, or consent to the appointment of a receiver, trustee or
liquidator of the other party or of all or any part of its property, or if there
is an execution sale of a material portion of its assets;
(ii) involuntary bankruptcy or reorganization proceedings are
commenced against the other party or any of its properties or if a receiver or
trustee is appointed for the other party or any of its properties and such
proceedings are not discharged within ninety (90) days;
(iii) the other party files or consents to the filing of a petition
for reorganization or arrangement under any applicable Bankruptcy Act or Code;
or
(iv) the other party fails to comply with any material term of this
Agreement or breaches any representation or warranty herein and such party fails
to cure such noncompliance or breach within thirty (30) days (five (5) days in
the case of a payment default) after receipt of written notice thereof.
(b) Either party may terminate this Agreement in accordance with Section 13
by providing written notice to the other party.
(c) Warner-Lambert may terminate this Agreement at any time during the Term
by written notice to Unipath: (i) if a court (A) makes the findings necessary
for a preliminary injunction against the manufacture, sale or use of the Product
or (B) determines that the Product infringes the intellectual property rights of
a third party; or (ii) pursuant to Section 2.10 hereof; PROVIDED THAT,
Warner-Lambert may terminate this Agreement pursuant to clause (i) (B) only in
the event Unipath fails to (x) at its own cost, obtain the requisite license(s)
which would allow Unipath to legally manufacture, and allow Unipath and
Warner-Lambert to legally sell, the Product, with no additional cost to
Warner-Lambert, or (y) at its own cost, modify the Product in a manner that
results in a non-infringing product acceptable to Warner-Lambert that is
available to ship to Warner-Lambert for distribution within 60 days of the
court's determination, with no additional cost to Warner-Lambert.
(d) Warner-Lambert may terminate this Agreement at any time during the Term
in the event of (i) the direct or indirect change in ownership or control of, or
the corporate reorganization of, Innovations, Inverness or Unipath which results
in a new party or group assuming control of Innovations, Inverness or Unipath or
(ii) the sale of all or substantially all of the assets of Innovations,
Inverness or Unipath. For purposes of this subparagraph (d), a change in
ownership or control shall be deemed to include Unipath being acquired by or
becoming an Affiliate of (x) a competitor of Warner-Lambert, which competitor is
a manufacturer, supplier and/or distributor of products that are competitive
with the Product or (y) any of the companies listed on Schedule B hereto or any
of their Affiliates. The events in clauses (i) and (ii) shall be referred to
herein as a "Change of Control". Innovations, Inverness and Unipath each agree
that as a condition to affecting any Change of Control, the party taking control
of Innovations, Inverness or Unipath or their assets as a result of the Change
of Control must agree to assume the obligations of Innovations, Inverness and
Unipath under this Agreement. Warner-Lambert's termination right pursuant to
this paragraph (d) may be exercised up to six (6) months following consummation
of the Change of Control transaction.
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(e) This Agreement may be terminated at any time during the Term by written
notice by one party to the other party if: (i) any court of competent
jurisdiction or other Governmental Authority shall have issued an order, decree
or ruling enjoining or otherwise prohibiting the transactions contemplated by
this Agreement or (ii) any litigation or proceeding is pending or has been
threatened to be instituted by any person or Governmental Authority, which in
the good faith judgment of (x) the Board of Directors of Inverness, if Inverness
or Unipath is the party or parties seeking to terminate, or (y) the Consumer
Healthcare Leadership Team, if Warner-Lambert is the party seeking to terminate,
could in all likelihood result in an order, decree or ruling enjoining,
prohibiting, seeking substantial damages in respect of or impairing the benefits
of the transactions contemplated by this Agreement; provided that each of
Innovations, Inverness and Unipath agree that any transaction that it enters
into subsequent to the date of this Agreement that affects the events in clauses
(i) or (ii) hereof must be unwound prior to terminating this Agreement pursuant
to this paragraph (e).
(f) Termination of this Agreement shall not affect any obligation to pay
money, indemnify, reimburse, maintain confidentiality or otherwise which either
party hereto may have incurred during the Term hereof.
12.3 EFFECT OF TERMINATION.
(a) Except as otherwise set forth in this Section 12.3,
Warner-Lambert shall not pay Unipath the Term Minimum upon a termination by
Warner-Lambert or Unipath.
(b) In the event of a termination by Warner-Lambert pursuant to
Section 12.2(a), (ii), the Term Minimum shall be paid to Unipath within thirty
(30) days of such termination.
(c) In the event Unipath is acquired by another company that is not a
competitor of Warner-Lambert and is not listed on Schedule B hereto, and Unipath
survives as an operating entity and retains all its material assets, including
access to the Intellectual Property, post-acquisition, Warner-Lambert shall pay
Unipath the Term Minimum if Warner-Lambert terminates this Agreement pursuant to
Section 12.2.(d).
(d) In the event of a termination by Unipath pursuant to Section
12.2(a), the Term Minimum shall be paid to Unipath within thirty (30) days of
the effective date of such termination.
(e) In the event of a termination by either party pursuant to Section
12.2(e), the transactions contemplated herein shall be unwound and this contract
shall be null and void. Inverness may reinstitute its patent litigation against
Warner-Lambert and its Affiliates; provided that Inverness agrees not to affect
an injunction of the manufacture, sale or supply of any e.p.t(R) brand pregnancy
test for a period not less than one hundred eighty (180) days from the date the
termination pursuant to Section 12.2(e) of this Agreement is effective.
(f) This section shall survive termination of this Agreement.
12.4 UNUSED MATERIALS. Within ninety (90) days of the effective date of
the expiration or termination of this Agreement for any reason other than
Unipath's material uncured breach, Warner-Lambert shall purchase at Unipath's
cost any packaging and other raw materials that
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Unipath has purchased exclusively for Warner-Lambert in accordance with this
Agreement for the production of the Product. Warner-Lambert shall not be
obligated to purchase any quantities of materials under this Section 12.4 in
excess of a one hundred twenty (120) day supply of such materials (such supply
amount based upon Warner-Lambert's applicable forecast of its requirements of
the foregoing). At its option Warner-Lambert may, in lieu of purchasing such
materials at cost, place orders with Unipath for additional Product under the
terms of this Agreement in order to extinguish existing stocks of such
materials. In the event that the Agreement terminates as a result of a material
uncured breach by Unipath, Warner-Lambert shall be under no obligation to
purchase any unused materials from Unipath.
12.5 RETURN OF PRODUCT AND MATERIALS SUPPLIED BY WARNER-LAMBERT. Upon the
effective date of expiration or termination of this Agreement for any reason
whatsoever, Unipath shall immediately deliver to Warner-Lambert or its designee
all Product, Specifications, artwork, all premiums and packaging materials
purchased by Warner-Lambert and all other materials, supplies or equipment
provided by Warner-Lambert. Unipath shall also deliver to Warner-Lambert or its
designee all Product produced hereunder, and shall invoice Warner-Lambert in
accordance with the terms of Section 3.3. On termination of this Agreement as a
result of a breach of this Agreement by Unipath, (i) Unipath shall be
responsible for the costs of raw materials ordered by Unipath on behalf of
Warner-Lambert in accordance with forecast requirements, and any Product
quarantined at the time of expiration or termination of this Agreement shall be
disposed of or destroyed at Unipath's expense in accordance with
Warner-Lambert's commercially reasonable instructions, in addition to any other
rights or remedies available to Warner-Lambert. Subsequent to the expiration or
termination of this Agreement, Unipath shall continue to be responsible for
rejected Product, in accordance with the terms of this Agreement.
13. FORCE MAJEURE.
Performance under this Agreement (other than payments required to be made
by either party) shall be excused to the extent prevented or delayed by fire,
flood, explosion, unavoidable widespread product tampering by third parties,
governmental acts or regulations, war, shortages or unavailability of materials,
any act of God, or by any other similar circumstances of any character
reasonably beyond the control of the party so excused. The party affected shall
promptly notify in writing the non-affected party of the event of force majeure
and the probable duration of the delay. Any delay caused by an event of force
majeure shall toll the term of this Agreement which shall be extended by the
length thereof. Notwithstanding the foregoing, in the event a force majeure
prevents performance by one party for more than sixty (60) days, the other party
shall have the right to terminate this Agreement.
14. MISCELLANEOUS.
14.1 NOTICE. All notices, requests, demands or other communications to or
upon the respective parties hereto shall be deemed to have been given or made
when deposited in the mails, registered mail or certified, return receipt
requested, postage prepaid, or overnight courier or by facsimile transmission,
the receipt of which is confirmed by telephone, addressed to the respective
party at the following address (or to such other person or address as is
specified
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elsewhere in this Agreement for specific purposes).
If to Warner-Lambert:
WARNER-LAMBERT COMPANY LLC
201 Tabor Road
Morris Plains, New Jersey 07950
Attention: e.p.t Brand Manager
Telephone: 973-385-2000
With a copy to:
General Counsel, Consumer Healthcare
Telephone: 973-385-2394
Facsimile: 973-385-3927
If to Inverness:
INVERNESS MEDICAL SWITZERLAND GmbH.
Bundesplatz 10
6300 Zug
Switzerland
Attention: Geschaeftsfuehrer
Telephone: 011 41 1 266 29 29
Facsimile: 011 41 1 266 29 00
If to Unipath:
UNIPATH, Ltd.
Priory Business Park
Bedford, MK 44 3UP
Attention: Managing Director
Telephone: 011 44 1234 835154
Facsimile: 011 44 1234 835002
If to Innovations:
INVERNESS MEDICAL INNOVATIONS, INC.
51 Sawyer Road, Suite 200
Waltham, Massachusetts 02453
Attention: General Counsel
Telephone: 781-647-3900
Facsimile: 781-647-3939
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The above addresses for receipt of notice may be changed by either party by
notice, given as provided herein.
14.2 ENTIRE AGREEMENT. This Agreement and the Quality Assurance Agreement
contain the entire understanding of the parties, superseding in all respects any
and all prior oral or written agreements or understandings pertaining to the
subject matter hereof. This Agreement can be amended, modified or supplemented
only by an agreement in writing which is signed by all the parties hereto.
14.3 INCORPORATION OF EXHIBITS. The Exhibits attached to this Agreement
are incorporated herein and made a part hereof.
14.4 SEVERABILITY. If and to the extent that any court of competent
jurisdiction holds any provision or part of this Agreement to be invalid,
unlawful or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement.
14.5 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of the parties.
14.6 ASSIGNMENT. Except as provided in the following sentence, neither
party shall, without the prior written consent of the other party, delegate,
transfer, convey, assign or pledge any of its rights or obligations under this
Agreement to any other person, firm or corporation. Subject t o the limitations
below in this Section 14.6, Warner-Lambert may assign its rights under this
Agreement and delegate its duties under this Agreement to an entity which
acquires or purchases its entire pregnancy testing business. Unless the assignee
is, at the time of such assignment, at least as creditworthy as the assignor as
of the date of this Agreement, Warner-Lambert shall not be released from its
obligations under this Agreement except to the extent actually performed by the
assignee. Warner-Lambert may not assign its rights or delegate its duties under
this Agreement to any of the entities listed in Schedule C or any of their
respective Affiliates.
14.7 WAIVER. A waiver by either party of any of the terms and conditions
of this Agreement in any instance shall not be deemed or construed to be a
waiver of such term or condition for the future.
14.8 HEADINGS. Headings in this Agreement are included for ease of
reference only and have no legal effect.
14.9 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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<Page>
14.10 APPLICABLE LAW; FORUM. This Agreement is governed by and shall be
construed in accordance with the laws of the State of New York other than those
provisions governing conflicts of law. All actions and proceedings arising out
of or relating to this Agreement will be heard and determined in any New York
state or federal court sitting in the City of New York, and each of the parties
hereto irrevocably submits to the exclusive jurisdiction of such courts.
14.11 CONDITIONS PRECEDENT. This Agreement is conditional upon (a) the
execution by, Inverness, Unipath, Unipath Diagnostics, Inc., a Delaware
Corporation with a principal place of business at 51 Sawyer Road, Suite 200,
Waltham, MA 02453, Pfizer, Inc., a Delaware corporation with its principal place
of business at235 East 42nd Street, New York, New York 10017 and Warner-Lambert
of a settlement agreement, substantially in the form attached hereto as Exhibit
D, (the "Settlement Agreement") resolving all outstanding issues and litigation
relating to the alleged infringement of Inverness patents as described therein,
and (b) the execution and subsequent valid entry of certain Consent Orders (as
defined therein). In the event that the Settlement Agreement is not executed by
all parties thereto or the Consent Orders are not filed and validly entered by
the court within thirty (30) days of the date of this Agreement, then this
Agreement shall be null and void and of no force and effect. Each party shall
use its best efforts to complete all activities in this Section 14.11.
14.12 FIREWALL PROVISION. Inverness shall use its best efforts to ensure
that none of its employees, agents or contractors who provide sales and
marketing services will have access to Information, Improvements or other
commercially sensitive material or documents relating to the Product. All
Information, Improvements or other commercially sensitive material or documents
of Warner Lambert that Inverness comes into contact with as a result of this
Agreement shall be used solely for the purposes of performing its duties and
obligations under this Agreement, and shall not be used in the manufacture,
supply or other distribution of any product other than the Product. Furthermore,
Inverness shall use its best efforts to ensure that no competitor shall have
direct or indirect access to any such Information, Improvements or other
commercially sensitive material or documents.
14.13 GOVERNMENTAL INQUIRIES. Each party will keep the other party apprised
of the status of any inquiries made of such party by the United States Federal
Trade Commission or any other Governmental Authority or members of their
prospective staffs with respect to this Agreement or the transactions
contemplated hereby or thereby. The parties hereto each will cooperate with one
another and use all reasonable efforts to prepare all necessary documentation to
obtain all necessary permits, consents, approvals, orders and authorizations of
or any exemptions by, all third parties and governmental bodies necessary to
consummate the transactions contemplated by this Agreement.
14.14 SURVIVAL. The provisions of Sections 3.4, 4.12, 7.1, 8, 11, 12.3,
12.4 and 12.5 shall survive termination of expiration of this Agreement.
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In Witness Whereof, the parties have caused this Agreement to be duly
executed in their respective names and on their behalf, as of the date first
above written.
WARNER-LAMBERT COMPANY LLC
By: /s/ Illegible
----------------
Title: President, Pfizer Consumer Healthcare
-------------------------------------
INVERNESS MEDICAL INNOVATIONS, INC.
By: /s/ Paul T. Hempel
--------------------------------
Title: General Counsel and Secretary
-----------------------------
INVERNESS MEDICAL SWITZERLAND GmbH
By: /s/ Paul T. Hempel
---------------------------------
Title: Geschaftsfuhrer
------------------------------
UNIPATH, Ltd.
By: /s/ D Scott
---------------------------------
Title: Chairman
------------------------------
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<Page>
EXHIBIT A
START UP ACTIVITIES (SECTION 2.1)
******
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
36
<Page>
EXHIBIT B
PATENTS
PATENTS COVERING EPT PRODUCT MANUFACTURED
BY UNIPATH FOR U.S. MARKET
******
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
37
<Page>
EXHIBIT C
PRICES
SECTION I. PRICE OF PRODUCT PRIOR TO WARNER-LAMBERT PURCHASING ******
MILLION AGGREGATE PRODUCT UNITS FROM INVERNESS. Subject to the provisions of
Sections 2.13 and 3, the purchase price for Product sold by Inverness to
Warner-Lambert pursuant to this Agreement will be:
<Table>
<Caption>
PRICE (U.S.$) TESTS PER PACKAGE
------------- -----------------
****** Single
****** Double
****** Triple
</Table>
FIRST ****** MILLION PRODUCT PURCHASES. Subject to the provisions of
Section 3, the first ****** million Product purchases, regardless of how
allocated among single, doubles and triples will be:
<Table>
<Caption>
PRICE (U.S.$) TESTS PER PACKAGE
------------- -----------------
****** Single
****** Double
****** Triple
</Table>
SECTION II. PRICE OF PRODUCT AFTER WARNER-LAMBERT HAS PURCHASED AN AGGREGATE OF
****** MILLION PRODUCT UNITS FROM INVERNESS.
<Table>
<Caption>
PRICE (U.S.$) TESTS PER PACKAGE
------------- -----------------
****** Single
****** Double
****** Triple
</Table>
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
38
<Page>
EXHIBIT D
SPECIFICATIONS
THE SPECIFICATIONS HAVE NOT BEEN FINALIZED AS OF THE DATE HEREOF, AND WILL BE
FINALIZED AND AGREED BY THE PARTIES AS SOON AS REASONABLY PRACTICAL AFTER THE
DATE HEREOF.
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<Page>
SCHEDULE A
PRODUCT AND PACKAGING OF UNIPATH OR ITS AFFILIATES REVIEWED BY WARNER-LAMBERT
IN CONNECTION WITH SECTION 2.12
PRODUCT AND PACKAGING
Walgreens One Step Pregnancy Test -- Expiration Date: May 2004, Lot No. 56268
Clearblue Easy Pregnancy Test - Expiration Date: 2005-01, Lot No. EENO13/3
Accu-Clear Early Pregnancy Test - Expiration Date: October 2004, Lot No. 57542
Eckerd One Step Pregnancy Test - Expiration Date: April 2004, Lot No. 16016A
PROPOSED PACKAGING ONLY
Eckerd One Step Pregnancy Test
Walgreens One Step Pregnancy Test
40
<Page>
SCHEDULE B
******
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
41
<Page>
SCHEDULE C
******
****** REPRESENTS TEXT OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED MATERIAL HAS BEEN FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION
42