SUPPLY AGREEMENT
THIS AGREEMENT dated as of this 17th day of December, 1999, is entered into
by and between Leiner Health Products Inc., a Delaware corporation (the "US
BUYER"), Vita Health Products Inc., a Manitoba corporation (the "CANADIAN
BUYER" and, together the US Buyer, the "BUYERS") and Novopharm Limited, an
Ontario corporation ("NOVOPHARM").
WITNESSETH:
WHEREAS, Novopharm has expertise, and is engaged, in the development,
manufacture and supply of over-the-counter pharmaceutical products ("OTC
PRODUCTS");
WHEREAS, Novopharm owns or has rights to certain patents and/or know-how
applicable to OTC Products;
WHEREAS, Novopharm owns the Approved ANDAs related to the Granutec Products
and the DINs related to the Stanley Products and has therefore obtained all
necessary regulatory approval for the manufacture, supply and sale of the
Products in the United States and Canada;
WHEREAS, pursuant to that certain Amended and Restated Asset Purchase
Agreement (the "ASSET PURCHASE AGREEMENT"), dated as of December 17, 1999,
among the Buyers Granutec Acquirco, Inc., a Delaware corporation, Novopharm,
Granutec, Inc., ("GRANUTEC") Granutec Holding Corporation ("GHC"), and
Stanley Pharmaceuticals Ltd., ("STANLEY") the US Buyer desires to acquire the
Approved ANDAs and the Canadian Buyer desires to acquire the DINs related to
the Products, and Novopharm has agreed to sell or cause the sale of such
Approved ANDAs and DINs to the US Buyer and the Canadian Buyer;
WHEREAS, the Buyers desire to obtain certain transitional services and other
assistance relating to the process of obtaining the requisite Governmental
Approvals to manufacture the Products governed by the Approved ANDA's;
WHEREAS, the Buyers desire to purchase commercial quantities of the Products
from Novopharm from time to time for a limited time and Novopharm is willing
to supply the Buyer's requirements for the Products, on the terms and subject
to the conditions set forth below;
WHEREAS, the Buyers desire to acquire the right of first refusal to acquire
the Approved ANDAs and the DINs that Novopharm or any of its Affiliates may
develop and obtain
regarding OTC Products other than the Products, on the terms and subject to
the conditions set forth below; and
WHEREAS, it is a condition precedent to the consummation of the transactions
contemplated by the Asset Purchase Agreement that Novopharm execute and
deliver this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants set forth below, the parties agree as follows:
ARTICLE 1: DEFINITIONS
For purposes of this Agreement, the terms defined in this Article 1 shall
have the respective meanings set forth below (the singular shall include the
plural and vice versa):
"AFFILIATE" means, with respect to any Person, any other Person which
directly or indirectly controls, is controlled by, or is under common control
with, such Person. A Person shall be regarded as in control of another Person
if it owns, or directly or indirectly controls, fifty percent (50%) or more
of the voting stock or other ownership interest of the other Person, or if it
directly or indirectly possesses the power to direct or cause the direction
of the management and policies of the other Person by any means whatsoever.
"ANDA" means an "Abbreviated New Drug Application" as defined in the US Act.
"APPROVED ANDA" means an ANDA approved by the FDA.
"ASSET PURCHASE AGREEMENT" is defined in the recitals to this Agreement.
"BUSINESS DAY" means any Monday, Tuesday, Wednesday, Thursday or Friday that
is not a day on which banking institutions in New York City are authorized or
obligated by law or executive order to close.
"CANADIAN ACT" means the Canadian Food and Drugs Act, as amended from time to
time, and the regulations promulgated thereunder.
"CANADIAN BUYER" is defined in the first paragraph of this Agreement.
"CANADIAN PRIME RATE" means the prime interest rate of The Bank of Nova
Scotia in effect from time to time for Canadian dollar loans made in Canada.
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"CBE" means a "Changes Being Effected" supplement as defined in the US Act.
"CGMP" shall mean current Good Manufacturing Practices promulgated by each of
the FDA and TPP governing the manufacture, handling, storage and control of
the Products in the United States and Canada, respectively.
"CLOSING" means the Closing as defined in the Asset Purchase Agreement.
"CONFIDENTIAL INFORMATION" means Technical Information and information
pertaining to Novopharm's and the Buyers' respective businesses, products,
marketing plans, marketing activities, market projections and related
matters, provided by one party to the other pursuant to or in furtherance of
this Agreement.
"DEVELOPMENT COSTS" is defined in Section 3.1.
"DINS" means Canadian Drug Identification Numbers.
"DSA" means a Drug Submission Application submitted to the TPP requesting
authorization to sell each of the Stanley Products, and the "DSAs" means all
approved DSAs for the Stanley Products, and includes DIN Applications, New
Drug Submissions, Supplemental New Drug Submissions and Investigational New
Drug Submissions.
"EFFECTIVE DATE" means the Closing Date as defined in the Asset Purchase
Agreement.
"FDA" means the United States Food and Drug Administration and all agencies
under its direct control or any successor organization.
"FORCE MAJEURE EVENT" means any fire, flood, embargo, war, act of war
(whether war be declared or not), insurrection, riot, civil unrest,
unforeseeable plant breakdowns or lack or failure of source of supply.
"GRANUTEC" is defined in the recitals to this Agreement.
"GRANUTEC PRODUCTS" means those products set forth in Schedule A hereto.
"NON-COMPETITION AGREEMENT" means the Non-Competition Agreement, dated as of
the date hereof, among the Buyers, Granutec, GHC, Stanley and Novopharm.
"OFFER" is defined in Section 2.1(b).
"OFFER NOTICE" is defined in Section 2.1(b).
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"ORDER" as defined in Section 5.2(a).
"OTC PRODUCTS" is defined in the recitals to this Agreement.
"PRODUCTS" means the Granutec Products and the Stanley Products.
"SPECIFICATIONS" means with respect to any of the Products, the
specifications as set forth in such product's Drug Master File or Regulatory
Approval, as appropriate, in accordance with, in the case of a Granutec
Product, the US Act and such Product's Approved ANDA and, in the case of a
Stanley Product, the Canadian Act.
"SPECIFIED FUTURE PRODUCTS" means those products set forth in Schedule C
hereto.
"STANLEY" is defined in the recitals to this Agreement.
"STANLEY PRODUCTS" means those products set forth in Schedule B hereto.
"SUPAC PROCESS" means the process by which a CBE is filed to effect a
manufacturing site change in accordance with the Scale Up and Post Approval
Changes (Immediate Release) guidance issued by the FDA.
"TECHNICAL INFORMATION" means all know-how, trade secrets, inventions, data
(including regulatory data), technology, processes and information, including
improvements and modifications to any thereof, the disclosure or use of which
is provided for or permitted under this Agreement and which a party hereto
has the lawful and contractual right to disclose to the other party. It shall
also include, without limitation, (a) medical, chemical, bioequivalent and
other scientific data; (b) processes and analytical methodology used in the
development, testing, analysis and validation of such Products; and (c)
packaging and manufacturing data and processes. Notwithstanding the
foregoing, Technical Information shall not include trademarks or patents.
"TERRITORY" means the United States, Canada and Mexico.
"THIRD PARTY" means any entity or person which is not party to this Agreement
or an Affiliate and/or subsidiary of a party to this Agreement.
"TPP" means the Therapeutic Products Program, Department of Health and
Welfare (Canada).
"UNSPECIFIED FUTURE PRODUCTS" means any OTC Products other than the Products
and the Specified Future Products.
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"US ACT" means the United States Food, Drug and Cosmetic Act, as amended from
time to time, and the regulations promulgated thereunder.
"US BUYER" is defined in the first paragraph of this Agreement.
ARTICLE 2: MANUFACTURE AND SALE OF PRODUCTS
2.1 MANUFACTURE AND SALE. (a) From and after the Effective Date and until
the first anniversary of the Effective Date, on the terms and subject to the
conditions of this Agreement, Novopharm shall manufacture, sell and deliver,
for sale in the Territory, (A) to the US Buyer all of the US Buyer's
requirements of Granutec Products for the Territory and (B) to the Canadian
Buyer all of the Canadian Buyer requirements of Stanley Products for the
Territory.
(b) From and after the Effective Date until the second anniversary
of the Effective Date, the US Buyer shall not purchase any of the Granutec
Products and the Canadian Buyer shall not purchase any of the Stanley
Products from a Third Party, unless such Buyer shall first deliver to
Novopharm a notice (an "OFFER NOTICE") stating:
(i) that such Buyer has received a bona fide offer to supply all or a
portion of its requirements for such Product(s) (an "OFFER");
(ii) with respect to each Product included in the Offer, the price,
volume and other material terms contained in the Offer (other than the
identity of the Third Party supplier of such Products); and
(iii) such Buyer's offer, irrevocable by its terms for five (5)
Business Days to purchase from Novopharm all (but not less than all) of
the Products included in the Offer, on terms and conditions not less
favorable to Novopharm than those contained in the Offer.
(c) If Novopharm fails to accept the offer within such five (5)
Business Days, then the relevant Buyer shall have the right to purchase the
Products set forth in such Offer Notice from the offeror identified in the
Offer Notice or any other Third Party, on terms and conditions no less
favorable to such Buyer than those terms and conditions set forth in the
Offer Notice.
2.2 STARTING MATERIAL. Novopharm shall acquire all of the material required
for the manufacture of the Products.
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2.3 STORAGE. Novopharm shall store all material and Products, including
work-in-process, in accordance with the appropriate cGMP and the guidelines
set out, in the case of Granutec Products, in the US Act and its regulations
and all corresponding Approved ANDAs and, in the case of Stanley Products, in
the Canadian Act and its regulations.
2.4 OTC SPECIFICATIONS. Novopharm shall manufacture under this Agreement
the Novopharm Products and Granutec Products in conformity with their
Specifications and the corresponding Approved ANDAs and the Stanley Products
in conformity with their Specifications and the corresponding DINs. Any
modifications or process changes with respect to the Products shall be
implemented in accordance with, in the case of Novopharm Products and
Granutec Products, the US Act and its regulations and, in the case of Stanley
Products, the Canadian Act and its regulations. Novopharm shall ensure that
such changes, if any, do not render the Products non-compliant with respect
to any applicable requirement under, with respect to each Novopharm Product
and Granutec Product, the US Act and such Product's respective Approved ANDA
and/or Specifications, and, with respect to each Stanley Product, the
Canadian Act and such Product's respective DIN and/or Specifications. In no
event shall Novopharm make any such modification or process change without
the prior written consent of the US Buyer and its duly authorized agents or
the Canadian Buyer and its duly authorized agents as appropriate.
2.5 RIGHT TO INSPECTION. Each Buyer and its duly authorized agents shall at
all times during the period commencing on the Effective Date and ending on
the second anniversary thereof be entitled to inspect during normal business
hours upon reasonable advance notice, any premises where the Products are
stored, manufactured, packaged or handled, or any premises where materials to
be used in the manufacture of the Products are stored, and each Buyer and its
duly authorized agents shall have free access to all parts of such premises
and may inspect and test such Products or materials and may interview
employees involved in such storage, manufacture, packaging or handling.
ARTICLE 3: TRANSITION PERIOD/FUTURE OTC PRODUCTS
3.1 SUPAC. (a) From and after the Effective Date, upon the request of the
US Buyer Novopharm shall assist the US Buyer in the SUPAC Process for each
Product whereby the US Buyer will acquire the right to manufacture each
Product in the plant acquired by the US Buyer pursuant to the Asset Purchase
Agreement from Granutec located in Wilson, North Carolina. Such assistance
shall include, without limitation, providing supporting data as electronic
and hard copies of Master Batch Records, Standard Operating Procedures, Raw
Material Specifications, Technology Transfer documentation, and comparison of
equipment lists. Novopharm will provide the Canadian Buyer (i)
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access to its Product approvals for the purpose of assisting the Canadian
Buyer in obtaining a cross-referenced DIN and (ii) all support necessary to
obtain an approved change in the registered manufacturing site or
Establishment License, as appropriate, under the Canadian Act. Novopharm
shall not be entitled to compensation for such assistance, PROVIDED, however,
that the US Purchaser shall reimburse Novopharm for cost of test batches and
related materials.
3.2 FUTURE OTC PRODUCTS. (a) Except as set forth in Section 3.2(b), on each
occasion, if any, that Novopharm or any of its Affiliates develops and
obtains or otherwise acquires an Approved ANDA and/or a DIN for any of the
Specified Future Products (by action of the FDA, the TPP or otherwise),
Novopharm shall promptly and in any event within 5 Business Days of obtaining
such Approved ANDA or DIN deliver to the Buyers a written offer, irrevocable
on its terms for thirty (30) Business Days, to sell such Approved ANDA and/or
DIN to any Buyer at a price equal to the sum of (i) the cost of developing
and obtaining or otherwise acquiring such Approved ANDAs and/or DINs, as
determined to the reasonable satisfaction of the Buyers, based on Novopharm's
accrued development costs, including without limitation, cost of materials
and reasonable overhead ("DEVELOPMENT COSTS") and (ii) 10% of the amount
determined pursuant to clause (i) of this Section 3.2(a).
(b) The US Buyer or the Canadian Buyer may from time to time
request that Novopharm develop and obtain Approved ANDAs and/or DINs for any
of the Specified Future Products. Upon receipt of any such request, Novopharm
shall use commercially reasonable best efforts to develop and obtain as
promptly as practicable such Approved ANDAs and/or DINs as requested by the
requesting Buyer. Promptly upon obtaining any Approved ANDAs and/or DINs,
Novopharm shall sell, and the requesting Buyer shall purchase, such Approved
ANDAs and/or DINs at a price equal to the sum of (i) the Development Costs of
such Approved ANDA or DIN and (ii) 10% of the amount determined pursuant to
clause (i) of this Section 3.2(b); PROVIDED that if such ANDA or DIN is not
approved the Buyer will forthwith, on written notice from Novopharm that such
ANDA or DIN has not been approved, pay to Novopharm the Development Costs of
such ANDA or DIN.
(c) On each occasion, if any, that Novopharm or any of its
Affiliates develops and obtains or otherwise acquires an Approved ANDA and/or
DIN with respect to an Unspecified Future Product, Novopharm shall promptly
deliver to the Buyers a written offer, irrevocable on its terms for thirty
(30) Business Days, to sell such Approved ANDAs and/or DINs to the Buyers on
terms and conditions set forth in such written offer. The Buyers shall have
thirty (30) Business Days in which to determine whether to accept such offer.
If the Buyers fail to accept such offer within such thirty (30) Business
Days, Novopharm shall have the right to sell the offered Approved ANDAs
and/or DINs to
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Third Parties on terms and conditions no less favorable to Novopharm than
those terms and conditions offered to the Buyers or, subject to the
Non-Competition Agreement, to use such Approved ANDAs and/or DINs for its own
account.
(d) On each occasion, if any, that the Buyers request that
Novopharm develop and obtain an Approved ANDA and/or DIN for any Unspecified
Future Product, Novopharm and the Buyers shall negotiate in good faith the
terms and conditions pursuant to which such work shall be performed.
3.3 Novopharm shall be entitled to sell the Products outside of the
Territory. During the term of this Agreement, at the request of Novopharm the
US Buyer shall use its commercially reasonable best efforts to assist
Novopharm, at Novopharm's sole cost and expense, in obtaining regulatory
clearances for the Products in such markets outside of the Territory, such
assistance to include, without limitation, confirming that Novopharm
originally developed and obtained the Approved ANDA.
ARTICLE 4: FORECASTS, ORDERS, PACKAGING, AND DELIVERY
4.1 FORECASTS. Promptly after the Effective Date, and promptly after the
beginning of each month during the term of this Agreement, the Buyers shall
provide Novopharm with a non-binding, rolling twelve month forecast of the
quantities of Products required. The Buyers shall notify Novopharm as
promptly as practicable of any changes to the forecast.
4.2 ORDERS (a) The Buyers may place orders (each an "ORDER") for Products
from time to time in accordance with this Article. With respect to each
Product ordered, each Order shall specify: (i) the volume and type of the
Product required; (ii) the required delivery date; and (iii) the place of
delivery.
(b) Orders may be placed by telephone, facsimile or mail.
(c) The Buyers will use good faith efforts to ensure that Orders
are materially consistent with the forecast delivered in accordance with
Section 4.1, as the same may be reasonably amended by the Buyers from time to
time.
(d) Each Order must be placed at least 90 Business Days prior to
the delivery date specified in the Order.
(e) Novopharm must confirm an Order to the applicable Buyer within
five Business Days after receipt of the Order from such Buyer and confirm the
date of delivery.
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If the delivery date is unacceptable, such Buyer must notify Novopharm within
5 days that the order is cancelled.
4.3 PACKAGING AND LABELLING. The Products shall be sold in bulk or strip
form. Novopharm shall ensure that packaging and labeling of the bulk and
strip products conforms to all applicable regulations.
4.4 DELIVERY. All Products supplied under this Agreement shall be shipped
FOB Novopharm Toronto. The applicable Buyer shall pay all freight, insurance
charges, taxes, import and export duties, inspection fees and other charges
applicable to the sale and transport of the Products purchased by the
applicable Buyer hereunder. Novopharm must use all commercially reasonable
efforts to deliver the Product to the applicable Buyer by the time specified
in the relevant Order. Novopharm shall package the Products and use a mode of
transportation that assures that the products meet all applicable
Specifications when delivered for shipment.
4.5 PURCHASE ORDER TERMS. The terms and conditions of this Agreement shall
be controlling over any terms and conditions included in the documents used
by the Buyers in placing Orders or by Novopharm in accepting or confirming
orders.
4.6 TITLE TO PRODUCTS. Title to the Products manufactured by Novopharm
shall pass to the applicable Buyer on the earlier of payment by the
applicable Buyer or delivery to the applicable Buyer in accordance with the
Order pursuant to which such delivery is made.
ARTICLE 5: RETURNS AND RECALLS
If at any time any Buyer believes that its finished goods should be recalled
and/or be the subject of a notification to a governmental authority because
any of the relevant Products shall have failed to meet its Specifications or
was otherwise noncompliant, such Buyer shall promptly notify Novopharm in
writing of such belief and provide to Novopharm all information it has
received in connection therewith. If at any time Novopharm believes that any
finished goods should be recalled and/or be the subject of a notification to
a governmental authority because the relevant Products shall have failed to
meet Specifications or were otherwise noncompliant, Novopharm shall promptly
notify the appropriate Buyer in writing of such belief and provide to such
Buyer all information it has received in connection therewith. The
appropriate Buyer shall, at Novopharm's sole cost and expense, be responsible
for conducting any recall that is initiated and for complying with any and
all regulatory requirements applicable to any such recall. Novopharm shall
assist such Buyer by providing information reasonably needed by such Buyer to
conduct such recall and to comply with regulatory requirements.
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ARTICLE 6: PRICE AND PAYMENT TERMS
6.1 PURCHASE PRICE. The price for the Products sold by Novopharm to the
Buyers pursuant to Section 2.1(a) hereunder shall be as set forth, with
respect to the Granutec Products, in Schedule A hereto, and with respect to
the Stanley Products, in Schedule B hereto. The prices set forth in Schedule
A shall be applicable for a period of one (1) year and in Schedule B shall be
applicable for a period of 120 days, each from the Effective Date of this
Agreement and thereafter the price for each Product shall be as agreed upon
by the parties to this Agreement from time to time.
6.2 SALES AND USE TAXES. Novopharm shall be solely responsible for the
payment of all federal, state or local sales, use or value-added tax, excise
or similar charge, or other tax assessment assessed or charged on the sale of
Products sold pursuant to this Agreement.
6.3 PAYMENT. Each month Novopharm shall deliver to each Buyer an invoice
for all Products delivered during the prior calendar month. Payment is due
and payable within 30 days of the end of the month in which the invoice is
sent by Novopharm to the applicable Buyer in respect of the Products
manufactured and delivered by Novopharm and will be made by check made
payable to Novopharm. Any amount invoiced by Novopharm pursuant to this
Section 6.3 shall, beginning 30 days after the end of the month in which such
amount is invoiced, bear interest at the Canadian Prime Rate plus 3% per
annum.
ARTICLE 7: DEVELOPMENT COSTS
7.1 ACCESS TO INFORMATION. Novopharm must, during the term of this
Agreement, retain, and allow the Buyers access, on reasonable notice, to
information relating to the Development Costs, for the purpose only of
verifying those costs and changes in them.
7.2 MINIMIZATION OF DEVELOPMENT COSTS. Novopharm shall take commercially
reasonable steps to minimize the Development Costs which may be incurred by
Novopharm in performing their obligations under this Agreement.
ARTICLE 8: FORCE MAJEURE
Neither party shall be held liable or responsible to the other party nor be
deemed to have defaulted under or breached this Agreement for failure or
delay in fulfilling or performing any term of this Agreement to the extent,
and for so long as, such failure or delay is caused by or results from a
Force Majeure Event. Upon the occurrence of a Force
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Majeure Event, the party failing or delaying performance, shall promptly
notify the other party, in writing, setting forth in reasonable detail the
nature of the occurrence, its expected duration and how such party's
performance is affected. In the event of the applicability of this Section
8.1, the party failing or delaying performance shall use its commercially
reasonable efforts to eliminate, cure and overcome any such causes and resume
performance of its obligations as quickly as possible. In the event a delay
in or failure of performance by Novopharm in the delivery of Products to any
Buyer ordered pursuant to Section 2.1(b) or 4.2 extends for more than 10
days, the affected Buyer may cancel the applicable order and obtain the
Product from a Third Party.
ARTICLE 9: REPRESENTATIONS WARRANTIES
9.1 NOVOPHARM REPRESENTATIONS WARRANTIES. Novopharm represents and warrants
to the Buyer as follows:
(a) The Products supplied pursuant to this Agreement will conform
with the applicable Specifications and will be manufactured in
accordance with the applicable cGMP.
(b) The Products supplied by Novopharm under this Agreement and the
methods, facilities and controls used for the receipt, manufacturing
and packaging of the Products will comply with all representations,
warranties and requirements of or implied by any applicable laws,
regulations, rules and orders of any governmental authority,
including, without limitation, the US Act and the Canadian Act.
(c) Without limiting the foregoing, all shipments or other deliveries
of the Products by Novopharm to the Buyers is hereby guaranteed by
Novopharm, as of the date of such shipment or delivery, to be, on
such date, (i) in the case of the Granutec Products shipped to the US
Buyers, not adulterated or misbranded within the meaning of the US
Act, and not an article which may not, under the provisions of such
act, be introduced into interstate commerce, and (ii) in the case of
Stanley Products shipped to the Canadian Buyers, not in violation of
the Canadian Act or any applicable governmental approval or law.
(d) The Products supplied pursuant to this Agreement will not
infringe the rights of any person or entity.
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(e) Novopharm is registered with the FDA as follows:
USA
Registered Drug Establishment Number 1062246
Labeler Code Assignment Number 0625213
The Manufacturing Facility Location 4700 Novopharm Blvd.
Wilson, NC 267893
Contact Vincent Rocco
VP-Quality & Compliance
Phone 252-234-2222
CANADA
Registered Drug Establishment Number FCCA094
Labeler Code Assignment Number 43806
The Manufacturing Facility Location 30 Novopharm Court
Toronto, ON M1B 2K9
Contact Kenneth Micholko
Sr. Dir.-Reg. Affairs
Phone 416-291-8888 Ext. 7020
(f) Novopharm hereby certifies that it did not and will not use in
any capacity the services of any person debarred under section 306 of
the US Act.
9.2 DELIVERY OF PRODUCT. Novopharm represents, warrants and undertakes to
the Buyers that each of the statements in Section 9.1 will be true and
correct on each date Novopharm delivers Products pursuant to this Agreement
as if made on and as at that date.
9.3 PRODUCT CONFORMITY. If any Product sold and delivered hereunder shall,
in any material respect, fail to conform to the provisions of this Agreement,
or to meet the Specifications for such Product, Novopharm shall provide the
applicable Buyer, at such Buyer's option, with either a full refund of the
purchase price for such nonconforming Product (including all freight,
insurance charges, taxes, import and export duties, inspection fees and other
charges) or an equal quantity of Product as replacement therefor. In
addition, the Buyers shall have the right, by written notice to Novopharm, to
terminate Section 2.1 of this Agreement. This Section 9.3 shall in no way
limit or affect the indemnification obligations of Novopharm as provided in
Section 12.2.
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ARTICLE 10: INSURANCE
Each party shall maintain comprehensive general liability insurance,
including contractual liability insurance and product liability insurance, of
at least ten million dollars ($10,000,000) for the term of this Agreement and
thereafter, for so long as it customarily maintains insurance for itself for
similar products and activities.
ARTICLE 11: CONFIDENTIALITY AND PUBLICATION
11.1 CONFIDENTIAL INFORMATION. The terms of this Agreement and all Offers
delivered hereunder and all technical and processing data, information and
knowledge related to the Products, including, without limitation, any
manufacturing processes or methods, analytical methods, quality control and
safety data, the Approved ANDAs for each of the Granutec Products and the
DINs for the Stanley Products, whether in oral, written or graphic form, and
identified in writing by the disclosing party as confidential shall be deemed
and included in the definition of "Confidential Information". Neither party
shall use, disclose or grant the use of the Confidential Information except
on a need-to-know basis to those directors, officers, employees, consultants,
contractors, (sub)licensees or permitted assignees, to the extent that such
disclosure is reasonably necessary in connection with such party's activities
as expressly authorized by this Agreement. To the extent that disclosure is
authorized by this Agreement, prior to disclosure, each party hereto shall
obtain agreement of any such person to hold in confidence and not make use of
the Confidential Information for any purpose other than those permitted by
this Agreement. Both parties shall take the same precautions as it normally
takes with its own Confidential Information to prevent disclosure to third
parties. The Confidential Information shall not be disclosed during the term
of this Agreement, and for a period of five (5) years following the
expiration or termination of the Agreement.
11.2 PERMITTED DISCLOSURES. The confidentiality obligations contained
herein shall not apply to the extent that (A) any party is required to
disclose Confidential Information pursuant to applicable law, regulation or
order of a governmental agency or court of competent jurisdiction, but only
to the extent required to be disclosed; PROVIDED that the disclosing party
notifies the other party in writing and gives the other party reasonable time
to comment on or contest the same prior to disclosure; or (B) the disclosing
party can demonstrate that (I) the disclosed information was public knowledge
prior to, at the time of or after disclosure other than through unauthorized
acts or omissions of the disclosing party; (II) the information was
previously disclosed to the recipient on an unrestricted basis from a third
party source unrelated to any party to this Agreement and not under a duty of
confidentiality to the non-disclosing party; or (III) the disclosed
information was
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independently developed by the recipient without use of Confidential
Information as evidenced by written records.
11.3 PUBLICATION. Neither party shall disclose to Third Parties nor
originate any publicity, news release or public announcement, written or
oral, whether to the public, the press, stockholders or otherwise, referring
to the existence of or relating to the terms of this Agreement, without prior
written consent of the other party.
ARTICLE 12: TERMINATION, TERM
12.1 TERMINATION.
12.1.1 BREACH. In the event Novopharm commits a breach or defaults in
the performance or observance of any of the provisions of this Agreement, and
such breach is not cured within twenty (20) days after the receipt of written
notice thereof from the other party specifying such breach or default or a
petition in bankruptcy is filed by or against Novopharm, a receiver is
appointed on account of Novopharm's insolvency, or Novopharm makes a general
assignment for the benefit of its creditors, the Buyers shall be entitled to
terminate all or any provision of this Agreement upon an additional thirty
(30) days written notice to the breaching or defaulting party, PROVIDED,
HOWEVER, that either party shall be entitled to seek specific performance of
this agreement without prejudice to such party's right to also seek damages
or such other legal remedies to which such party may otherwise be entitled.
12.1.2 OBLIGATION TO PAY. The termination or expiration of this Agreement
shall not release the Buyers from the obligation to pay any sum owed to
Novopharm for Products delivered prior to any such termination or expiration.
12.1.3 Notwithstanding any termination or expiration of this Agreement,
the provisions of Articles 3.2, 11, and 13 shall remain in effect.
12.1.4 Notwithstanding anything to the contrary in this Agreement, subject
to Section 12.1.3, this Agreement shall terminate (4) four years from the
Effective Date.
ARTICLE 13: LIABILITY AND INDEMNIFICATION
13.1 The Buyers shall indemnify, defend and hold Novopharm, its affiliates,
officers, directors and shareholders, and its successors and assigns and their
respective officers, directors, employees, agents, advisers, representatives
(collectively, "NOVOPHARM
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INDEMNIFIED PARTIES") from and against, and pay or reimburse the Novopharm
Indemnified Parties for any and all claims, liabilities, obligations, losses,
fines, costs, royalties, proceedings, deficiencies or damages (whether
absolute, accrued, conditional or otherwise and whether or not resulting from
third party claims), including product returns or recalls, out-of-pocket
expenses and reasonable attorneys' and accountants' fees incurred in the
investigation or defense of any of the same or in asserting any of the rights
hereunder (collectively, "LOSSES") to the extent such Losses result from or
arise out of any failure of any Buyer to perform any covenant or agreement made
or contained in this Agreement or fulfill any other obligation in respect
thereof.
13.2 Novopharm shall indemnify, defend and hold the Buyers, their affiliates,
officers, directors and shareholders, and their successors and assigns and their
respective officers, directors, employees, agents, advisers, representatives
(collectively, the "BUYER INDEMNIFIED PARTIES") from and against, and pay or
reimburse the Buyers Indemnified Parties for any and all claims, liabilities,
obligations, losses, fines, costs, royalties, proceedings, deficiencies or
damages (whether absolute, accrued, conditional or otherwise and whether or not
resulting from third party claims), including product returns or recalls
(subject to Article 5) out-of-pocket expenses and reasonable attorneys' and
accountants' fees incurred in the investigation or defense of any of the same or
in asserting any of the rights hereunder (collectively, "LOSSES") to the extent
such Losses result from or arise out of (A) Novopharm's negligent or wilful
misconduct in its performance under this Agreement, (B) any inaccuracy in any
representation or warranty by Novopharm when made or deemed made or contained in
this Agreement or in connection therewith; or (C) any failure of Novopharm to
perform any covenant or agreement made or contained in this Agreement or fulfill
any other obligation in respect thereof.
13.3 The party seeking indemnification (the "INDEMNIFIED PARTY") hereunder shall
notify promptly in writing the party from whom indemnity is sought (the
"INDEMNIFYING PARTY") of any matter for which indemnity is sought and shall give
the Indemnifying Party full information and assistance for the defense of any
such claim. The Indemnifying Party shall pay all damages and costs awarded
against the Indemnified Party but shall not be responsible for any settlement
made by the Indemnified Party without the Indemnifying Party's written consent
(which shall not be unreasonably withheld).
ARTICLE 14: MISCELLANEOUS
14.1 ENTIRE AGREEMENT. This Agreement and the attached Schedules set forth the
entire understanding between the parties with respect to the subject matter
hereof. All express or implied agreements and understandings, either oral or
written, heretofore made are
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expressly superseded by this Agreement. This Agreement may not be modified or
amended except in writing signed by both parties.
14.2 WAIVER. The waiver by either party of any right hereunder or the failure to
perform or of a breach by the other party shall not be deemed a waiver of any
other right hereunder or of any other breach or failure by said other party
whether of a similar nature or otherwise.
14.3 SEVERABILITY. If and to the extent that any particular provision of this
Agreement is found to be void, voidable or unenforceable for any reason
whatsoever, then such provision or provisions shall be deemed severed from the
remainder of this Agreement and all other provisions hereof shall remain in full
force and effect. Such severed provisions shall be replaced with a revised
written provision agreed to by the parties which accomplishes, to the extent
possible, the business purpose of the original provision in a valid and
enforceable manner.
14.4 RELATIONSHIP. It is expressly agreed that Novopharm and the Buyers shall be
independent contractors and nothing in this Agreement shall create among the
parties a partnership, joint venture or agency. Neither party shall have the
authority to make any statements, representations or commitments of any kind, or
to take any action, which shall be binding on the other party, without the prior
express written consent of the other party to do so.
14.5 NO CONFLICT. Each party represents that neither this Agreement nor any of
its obligations hereunder shall conflict or result in a breach of any
arrangement or agreement between such party and any Third Party.
14.6 OFFICIAL LANGUAGE. The official language of this Agreement, and of all
consents, notices and reports required or permitted to be given or made under
this Agreement, shall be English.
14.7 HEADINGS. The headings of each article in this Agreement are for reference
and convenience and shall not affect the meanings of the provisions of the
Agreement.
14.8 NOTICES. Any consent, notice or report required or permitted to be given or
made under this Agreement by one of the parties to the other shall be in
writing, delivered by registered or certified mail, postage prepaid, or by
facsimile and confirmed by mail and addressed to such other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addresser:
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If to Novopharm: Novopharm Limited
30 Novopharm Court
Toronto, Ontario, Canada M1B 2K9
Attention: President and Chief Executive
Officer
Copy to: General Counsel
If to Buyers: Leiner Health Products Inc.
901 East 233rd Street
Carson, California 90745
Attention: President and Chief Executive Officer
All notices shall be deemed to be effective five days after the date of
mailing or upon receipt if sent by telex or facsimile (but only if followed by
certified or registered confirmation).
14.9 BENEFIT. This Agreement shall be binding upon and inure to the benefit of
the parties hereto, their respective successors and permitted assigns.
14.10 DOLLAR CURRENCY. All dollar amounts referred to in this Agreement and in
Schedule A attached hereto are in lawful money of the United States. Dollar
amounts referred to in Schedule B are in Canadian dollars.
14.11 GOVERNING LAW. This Agreement shall be governed in all respects, including
as to validity, interpretation and effect, by the internal laws of the State of
New York, without giving effect to the conflict of laws rules thereof to the
extent that the application of the law of another jurisdiction would be required
thereby.
14.12 NO THIRD PARTY BENEFICIARIES. Except as provided in Section 13 with
respect to indemnification of Indemnified Parties hereunder, nothing in this
Agreement shall confer any rights upon any person or entity other than the
parties hereto and their respective heirs, successors and permitted assigns.
14.13 ASSIGNMENT. This Agreement shall not be assignable or otherwise
transferable by any party hereto without the prior written consent of, in the
case of assignment or transfer by Novopharm, the Buyers and, in the case of
assignment or transfer by any Buyer, Novopharm, PROVIDED that any Buyer may
assign this Agreement to any Affiliate of such Buyer, and PROVIDED, further,
that each Buyer remains obligated for performance under the terms of this
Agreement notwithstanding any assignment to any Affiliate.
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14.14 REMEDIES. The rights and remedies provided in this Agreement are
cumulative and are not exclusive of any rights and remedies either party may
have otherwise have at law or in equity.
14.15 COUNTERPARTS. This Agreement may be executed in several counterparts, each
of which shall be deemed an original and all of which shall together constitute
one and the same instrument.
14.16 PRIORITY. Novopharm undertakes to treat the Buyers as its preferred
customers and to give priority to the Buyers over all other of Novopharm's
customers in respect of inventories and production and development resources
during the term of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.
LEINER HEALTH PRODUCTS INC. NOVOPHARM LIMITED
By: By:
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Title: Title:
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VITA HEALTH PRODUCTS INC.
By:
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Title:
-------------------------
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