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Exhibit 4.40
Amended and Restated MANUFACTURE AND SUPPLY AGREEMENT
BETWEEN WARNER-LAMBERT CANADA INC. AND DRAXIS PHARMA INC.
DATED AS OF JULY 1, 1999
TABLE OF CONTENTS
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Amended and Restated MANUFACTURE AND SUPPLY AGREEMENT
MANUFACTURE AND SUPPLY AGREEMENT dated as of July 1, 1999, by and between WARNER-LAMBERT CANADA INC. (“ Warner ”), a corporation duly organized and incorporated under the laws of the province of Ontario having its principal office located at 2200 Eglinton Avenue East, Scarborough, Ontario, Canada, M1L 2N3, and DRAXIS PHARMA INC. (the “Manufacturer” ), a corporation incorporated under the laws of Canada, and having its principal office located at 16751 Trans Canada Highway, Kirkland, Quebec, H9H 4J4.
WITNESSETH :
WHEREAS, Warner desires to have the Manufacturer manufacture and supply Warner with its requirements of Warner’s products listed in Schedule A attached hereto;
WHEREAS, the Manufacturer desires to manufacture and supply Warner with its requirements of such products; and
WHEREAS, the parties are willing to carry out the foregoing pursuant to the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of these premises and the covenants, agreements and stipulations hereinafter set forth, the parties hereto agree as follows:
Section 1. Definitions.
1.1. Definitions.
The following terms (except as otherwise expressly provided) for all purposes of this Agreement shall have the following respective meanings:
“Action or Proceeding” shall mean any action, claim, suit, proceeding, arbitration or Governmental or Regulatory Authority action, notification, investigation or audit.
“Affiliate” shall mean any Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the Person specified. For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
“Agreement” shall mean this Manufacturing and Supply Agreement and all Schedules attached hereto, as the same may be amended, supplemented or otherwise modified from time to time pursuant to the terms set forth herein.
Warner-Lambert/Draxis Pharma Manufacture and Supply Agreement
“Annual Product Review” shall have the meaning set forth in Section II(1) of Schedule D.
“Business Day” means a day other than a Saturday or Sunday or a statutory holiday in the Province of Quebec.
“Consumer Price Index” or “CPI” means the consumer price index established and published, from time to time, by Statistics Canada for the relevant period or periods and described as “All Items – Canada”, or any successor index or organization.
“Environmental Laws” shall mean all federal, provincial, foreign, local, city or municipal laws, statutes, by-laws and regulations and, to the extent they have the force of law, all rules, orders, codes, protocols, guidelines, policies, directions, actions, judicial or administrative decrees promulgated pursuant to such laws, statutes and regulations relating to or controlling, in whole or in part and in any manner whatever, the environment, employee and public health and safety and the assets and undertaking of the Manufacturer and the intended uses thereof and includes, without limitation, Environmental Laws relating to the storage, generation, use, handling, manufacture, processing, labelling, transportation, treatment, release or disposal of Hazardous Materials.
“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 or for which Warner or an Affiliate of Warner is liable or obligated pursuant to any Environmental Law and (i) arising out of the operation, ownership or control of the Facility, or (ii) relating to, arising from, or in any way connected with the manufacturing, generation, processing, storage, transportation, distribution, treatment, disposal or other handling of products (including the Products), associated by-products, raw materials, intermediates, wastes, Hazardous Materials, emissions, releases, spills, leaks or discharges or returned products (including the Products), by the Manufacturer or its permitted assignees.
“Facility” shall mean the Manufacturer’s manufacturing facility located at 16751 Trans Canada Highway, Kirkland, Quebec, H9H 4J4, and, subject to Warner’s prior written approval, such other facilities used by the Manufacturer in the manufacture and storage of Products or Materials utilized in the manufacture of Products hereunder.
“Formulate” shall mean to effect the operation required in the manufacture, processing, testing, packaging, labelling or storage, as the case may be, of the Products by the Manufacturer.
“Formulation” shall mean any operation required in the manufacture, processing, testing, packaging, labelling or storage, as the case may be, of the Products by the Manufacturer.
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“Good Manufacturing Practices” or “GMP” shall mean those good manufacturing practices as shall be required by applicable Laws in Canada.
“Governmental or Regulatory Authority” shall mean any court, tribunal, arbitrator, agency, commission, official or other instrumentality of Canada, any foreign country or any territory, or any domestic or foreign state, province, county, city or other political subdivision thereof.
“Group I Products” shall mean the product(s) listed as Group I Products in Schedule A attached hereto, as such Schedule may be amended from time to time by mutual agreement of the parties
“Group II Products” shall mean the product(s) listed as Group II Products in Schedule A attached hereto, as such Schedule may be amended from time to time by mutual agreement of the parties
“Hazardous Materials” shall mean any pollutant, contaminant, hazardous or toxic substance, constituent or material, other wastes or substances regulated under any Environmental Law.
“Initial Term” shall have the meaning ascribed thereto in Section 11.1.
“Laws” shall mean any law, statute, rule, regulation, guideline (including current GMP), ordinance or other pronouncements of any Governmental or Regulatory Authority having the effect of law in Canada, any foreign country or any territory, or any domestic or foreign state, province, county, city or other political subdivision, including without limitation any Requirements of Environmental Law.
“Losses” shall mean any and all damages, fines, fees, settlements, payments, obligations, penalties, deficiencies, losses, costs and expenses (including, without limitation, Environmental Losses, interest, court costs, reasonable fees of attorneys, accountants and other experts and other reasonable expenses of litigation or other proceedings or of any claim, default or assessment).
“Materials” shall mean all raw materials, ingredients, packaging materials and any other materials used in the manufacture and packaging of Products by the Manufacturer.
“Person” shall mean any natural person, entity, corporation, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or Governmental or Regulatory Authority.
“Price” shall mean the price per unit to be charged by the Manufacturer for Products manufactured and supplied hereunder, as set forth in Schedule C attached hereto.
“Product(s)” shall mean collectively the Group I Products and the Group II Products as listed in Schedule A attached hereto, as such Schedule may be amended from time to time by mutual agreement of the parties.
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“Quality Agreement” shall mean the quality agreement entered into between Warner and the Manufacturer as of the date hereof, which details the quality obligations and responsibilities of the parties with respect to the Products and attached hereto as Schedule D.
“Recall” shall mean with respect to any and all Products, any “recall”, “product withdrawal” or “stock recovery” withdrawal, as those terms are defined in the Product Recall Procedures issued by the Health Protection Branch of Health Canada, as the same may be amended from time to time, and all as the same may be amended from time to time (collectively, the “Recall Procedures”), and shall include any post-sale warning or mailing of information regarding such Product, including those warnings or mailings described in the Recall Procedures.
“Requirements of Environmental Law” shall mean all requirements of Environmental Law including but not limited to, all such requirements relating to: (i) the protection, preservation or remediation of the natural environment (the air, land, surface water or groundwater); (ii) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation; and (iii) hazardous substances or conditions (matters that are prohibited, controlled or otherwise regulated, such as contaminants, pollutants, toxic substances, dangerous goods, wastes, hazardous wastes, liquid industrial wastes, hazardous materials, urea formaldehyde foam type of insulation, asbestos or asbestos containing materials, polychlorinated biphenyls (PCBs) or PCB contaminated fluids or equipment, explosives, radioactive substances, petroleum and associated products, underground storage tanks or surface impoundments and any emissions, spills, leaks, discharges, releases and threatened releases thereof or therefrom).
“Specifications” shall mean the specifications required by Warner for the manufacture, processing, packaging and supply of the Products, including all formulae, raw materials and packing materials requirements, and standards of quality control, quality assurance and sanitation, all as mutually agreed upon by the parties in writing and attached hereto as Schedule F and pursuant to the drug manufacturing procedures, as such Specifications may be amended, supplemented or otherwise modified from time to time by mutual agreement of the parties.
“Term” shall have the meaning ascribed thereto in Section 11.1.
“Year 2000 Compliance” shall mean: (i) the accurate processing of date/time data (including, but not limited to, calculating, comparing and sequencing) from, into and between the twentieth and twenty-first centuries and during the years 1999 and 2000, including leap year calculations (2000 being a leap year), and (ii) the accurate and uninterrupted functioning of hardware, software and other systems and equipment before, during and after January 1, 2000, without any change in operations associated with the advent of 1999 or the twenty-first century.
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1.2. Terms Generally.
The definitions in 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, paragraphs, clauses and Schedules shall be deemed references to Sections, paragraphs and clauses of this Agreement and Schedules to this Agreement unless the context shall otherwise require.
Section 2. Equipment
2.1. Purchase and Installation of Equipment, Molds and Tooling.
The Manufacturer shall be responsible for purchasing, installing and validating at its Facility all new equipment, molds, tooling, and/or modifications to existing equipment, molds and/or tooling necessary for the manufacture, packaging, labelling and shipment of Products hereunder, and all costs and expenses associated therewith. Notwithstanding the foregoing, Warner shall be responsible for all costs and expenses associated with the purchase, installation and validation at the Facility of all new equipment, molds, tooling and/or modifications to existing equipment, molds and/or tooling which are required, after the date hereof, as a result of any change made in the manufacturing or packaging of the Products, provided that such change was made at Warner’s request and not for the purpose of complying with the Specifications or GMP. The installation of the foregoing equipment, molds and tooling shall be conducted in accordance with all applicable Laws and the Specifications (as relevant). At the request of Warner, the Manufacturer shall return to Warner all equipment, molds, tooling and operating supplies relating to any Product that were provided or paid for by Warner.
Section 3. Supply and Purchase Requirements; Orders; Shipment and Delivery Terms; Inventory.
3.1. Agreement to Supply.
(a) During the Term of this Agreement, and subject to the provisions of this Agreement, the Manufacturer shall manufacture, package and exclusively supply to Warner (and/or its Affiliates or designees) the Products in accordance with the Specifications and this Agreement.
(b) The manufacturing by the Manufacturer with respect to Group I Products commenced on or about April 1, 1999 in accordance with the Manufacture and Supply Agreement dated as of February 1, 1999 between the parties. The manufacturing by the Manufacturer with respect to Group II Products shall commence on or about October 1, 1999, provided that such manufacturing shall not commence, with respect to certain of the Group II Products, until such later date as Warner notifies the Manufacturer. Provided Warner notifies the Manufacturer not less than ninety (90) days in advance of the proposed manufacturing commencement date for any Group II Product, the Manufacturer shall conduct such validation it considers necessary, and in accordance with this Agreement, to ensure that the commencement of manufacturing of Group II Products will occur as required by Warner.
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3.2. Use of Facility Equipment, Molds and Tooling; Notice.
(a) All manufacturing, packaging and storage activities shall be carried out by the Manufacturer at the Facility and utilizing equipment, molds and tooling in the manner set forth in the Specifications, except to the extent that the Manufacturer receives Warner’s advance written permission to alter the location or specified usage of the foregoing.
(b) Following receipt of Warner’s advance written permission, as contemplated in paragraph (a) of this Section 3.2, the Manufacturer shall notify Warner in writing prior to making any change to (i) the location of any manufacturing, packaging or storage activities carried out hereunder, or (ii) the equipment used in the manufacture or packaging of the Products hereunder.
3.3. Orders.
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3.4. Production Requirements; Required Tolerance.
The Manufacturer shall Formulate and deliver to Warner the Products and devote the necessary capacity to meet Warner’s firm purchase commitments and weekly requirements for the Products in a timely fashion. Throughout the Term of this Agreement, the Manufacturer shall: (i) Formulate and deliver 98% of orders on the delivery date specified within each purchase order, or within 3 Business Days thereof; and (ii) deliver 95% of the quantity ordered by Warner pursuant to each purchase order.
3.5. Forecasts.
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3.6. Standard Forms.
In ordering and delivering the Products pursuant hereto, Warner and the Manufacturer may employ their standard forms, but nothing in those forms shall be construed to modify, amend or supplement the terms of this Agreement and, in the case of any conflict herewith, the terms of this Agreement shall control.
3.7. Quantitative Defects.
Warner shall inform the Manufacturer in writing of any claim relating to quantitative defects in shipments of Products within thirty (30) days following actual receipt of such shipments by Warner and Warner shall provide to the Manufacturer copies of any appropriate documents relating to such defects. The Manufacturer shall, at its own expense, provide Warner with any missing quantities of such Products as soon as reasonably possible
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after receipt of notice from Warner. Warner shall only be obligated to pay for actual quantities of Products received by Warner. 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.
3.8. Supply of Raw Materials, Ingredients and Packaging Materials.
(a) The Manufacturer shall procure all Materials relating hereto. All Materials shall comply with the Specifications. The Manufacturer may not substitute or otherwise replace any Material and/or any supplier thereof without the prior written consent of Warner. The costs of such Materials including the cost of procuring such Materials (e.g. freight) are included in the Price of the Products.
(b) Warner shall supply to the Manufacturer all labelling, artwork, text and copy to be used by the Manufacturer in Product packaging and labelling.
3.9. Product Samples.
The Manufacturer shall provide Warner or any such other Person as Warner shall designate with representative lot samples of each production batch of Product promptly upon request. Such Product samples shall be shipped to Warner or such other Person at Warner’s expense in accordance with the provisions set forth in Schedule B hereof, or as otherwise instructed by Warner. Warner shall pay for such samples when invoiced in accordance with Section 4.2 hereof. Any disputes as to whether any such Product samples conform to the Specifications shall be resolved in accordance with the provisions of Section 5.13 hereof.
Section 4. Price, Payment, Price Adjustments.
4.1. Determination of Price/Cost of Materials.
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4.2. Payment Provisions.
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4.3. Shipping Instructions; Risk of Loss.
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4.4. Taxes.
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Section 5. Manufacturing Standards, Quality Control Inspection, Rejection and Recall of Products.
5.1. Manufacturing Standards.
(a) The Manufacturer shall manufacture, process and package the Products (including without limitation disposing of all waste and other materials) strictly in accordance with the Specifications, applicable Laws including current GMP.
(b) If, at any time during the Term, there occurs a material change in current GMP, including a change which requires the revalidation of the manufacturing process, or a significant portion of the process, the parties will negotiate in good faith to settle the proportion of the cost of implementing such material change to be borne by each of the parties.
5.2. Storage Requirements.
The Manufacturer shall store all Materials and finished Products in a clean, dry area, free from insects and rodents, in a manner to prevent entry of foreign materials. Storage and handling of the foregoing shall be strictly in accordance with the provisions of all applicable Laws including current GMP and the quality control programs and standards set forth in the Specifications.
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5.3. Use of Packaging Materials.
Packaging materials supplied by Warner and/or used in the packaging and supply of the Products hereunder may only be used by the Manufacturer in connection with its packaging and supply of the Products hereunder and for purposes consistent with the terms of this Agreement and for no other purpose (e.g., such packaging materials shall not be used for storage or waste disposal purposes).
5.4. Production Codes.
The Manufacturer agrees that production codes placed on the Products shall be in accordance with the Specifications.
5.5. Maintenance of Facility, Equipment and Molds.
The Manufacturer shall maintain all equipment, tooling and molds utilized in the manufacture and supply of Products hereunder in good operating condition and shall maintain such equipment, tooling and molds in accordance with, or in a manner that shall meet the requirements of (i) all applicable Laws, including current GMP and (ii) all requirements set forth in the Specifications. The Manufacturer shall maintain the Facility in accordance with, or in a manner that shall meet the requirements of all material Laws including current GMP and all requirements set forth in the Specifications. In the event that the Manufacturer fails or anticipates to fail to meet any of the foregoing requirements relating to the Manufacturer’s maintenance of the Facility or any equipment, tooling or molds utilized in connection herewith, or in the event that the Manufacturer receives any notice from any Governmental or Regulatory Authority relating to its maintenance of, or failure to maintain, the Facility or any equipment, tooling or molds utilized in connection herewith, the Manufacturer shall promptly contact Warner, and the Manufacturer shall take any actions as may be required under the Specifications.
5.6. Legal and Regulatory Filings and Requests.
The Manufacturer and Warner shall cooperate and be diligent in responding to all requests for information from, and in making all legally required filings with, Governmental and Regulatory Authorities having jurisdiction to make such requests or require such filings. The Manufacturer shall obtain and comply with all material licenses, consents, permits and Laws which may from time to time be required by appropriate Governmental and Regulatory Authorities with respect to its manufacturing processes and the Facility and otherwise to permit the performance of its obligations hereunder.
5.7. Analysis of Materials.
Prior to use in production, the Manufacturer shall have shipments of Materials analyzed for such matters in accordance with the Specifications and the Manufacturer shall ensure that all Materials strictly comply with the Specifications. Such analyses may be conducted, at the option of Warner, by the Manufacturer internally or by an outside laboratory retained by the Manufacturer and approved by Warner. For purposes of this Agreement, such tests shall be considered routine and shall be performed at the Manufacturer’s expense. All test
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results are to be carefully documented and available for inspection or statistical summary at Warner’s request.
5.8. Non-conforming Materials.
The Manufacturer shall not use any Materials that do not strictly comply with the Specifications (without the prior written approval of Warner) and applicable Laws. If the Manufacturer uses any non-conforming Material without receiving the prior written approval of Warner, the Manufacturer shall be responsible for all Losses suffered or incurred by Warner as a result of such use, including, without limitation, any expenses incurred by the Manufacturer or Warner in the correction thereof and any expenses incurred by Warner arising out of any Recall of any affected Product or other corrective measures taken with respect thereto. The Manufacturer shall be responsible for pursuing all resolutions with the applicable supplier of non-conforming Materials.
5.9. Quality Tests and Checks.
The Manufacturer shall perform all stability, validation, raw material and in-process and finished product tests or checks required by the Specifications and applicable Laws in order to ensure the quality of the Products manufactured and supplied hereunder. For purposes of this Agreement, such tests and/or checks shall be considered routine and shall be performed at the Manufacturer’s expense. All tests and test results shall be carefully performed, documented and summarized by the Manufacturer in accordance with the Specifications and applicable Laws. To the extent necessary in relation to the release of any Product by Warner, the Manufacturer shall supply to Warner a certificate of analysis with respect to each production batch of Product tested.
5.10. Non-complying Products.
No Product shall be released for shipment by the Manufacturer unless such Product strictly complies with the Specifications, the provisions of Schedule D of this Agreement and all applicable Laws. The Manufacturer shall quarantine any non-complying Products and shall advise Warner of such non-compliance and of the testing or inspection results of such batch or batches of Product. Products that do not strictly comply and are quarantined should be properly tagged and isolated and may be released only with the prior written approval of Warner.
5.11. Disposal of Rejected Products and Materials.
All Products rejected pursuant to Section 5.13 and Materials rejected pursuant to Section 5.8 shall be removed (if applicable) and disposed of by either Warner or the Manufacturer in a manner consistent with applicable Laws and as approved in advance by Warner, acting reasonably, (such disposal cost to be at the expense of the party responsible therefor pursuant to the terms of Section 5.8 or 5.13, as the case may be). No rejected Materials, Product or Product in process shall be sold as salvage or for any other purpose by the Manufacturer or designees or agents of the Manufacturer without the prior written approval of Warner. The Manufacturer shall replace such rejected Products or Materials at the expense of the party responsible therefor, in accordance with the provisions of Section 5.8 or 5.13 hereof.
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5.12. Maintenance and Retention of Records and/or Samples.
(a) The Manufacturer shall maintain detailed records with respect to raw and packaging material usage and finished Product production, which records shall include production code dates and shipping information relating to the Products, so that Products can be easily traced in case of a Recall or rejection of Products or Materials. The Manufacturer’s records shall be sufficient such that the Manufacturer shall be capable of responding to inquiries by Warner within 2 days Business Days of notification, including providing the production code date and the location of the Products in question. Warner shall be responsible for responding to all customers’ inquiries and/or complaints relating to the Products and the recordkeeping relating thereto.
(b) The Manufacturer shall retain, for periods required by applicable Law, and upon request by Warner make available to Warner, (i) copies of the batch manufacturing records, stability study and quality control records maintained pursuant hereto or otherwise maintained in relation to the Products, (ii) copies of testing results of all the tests performed pursuant hereto or otherwise performed in relation to the Products, (iii) samples of the Materials, and (iv) samples of each batch of Products to the extent reasonably instructed by Warner or required by applicable Laws. The Manufacturer shall send reasonable quantities of samples of each batch of Products for analysis to Warner’s laboratory or a third party laboratory designated by Warner when reasonably requested to do so by Warner. The expense of such routine testing shall be paid by Warner. Any disputes as to whether any such Product samples fail to conform to the Specifications shall be resolved in accordance with the provisions of Section 5.13 hereof.
5.13. Rejection of Shipments; Disposal of Rejected Shipments; Dispute Resolution.
(a) Within thirty (30) days following receipt by Warner of any given shipment of Products hereunder, Warner shall have the right to give the Manufacturer notice of rejection (“ Rejection Notice ”) in respect of any shipment of Products that fails in whole or in part to meet the Specifications (“ Rejected Products ”); provided, however, that there shall be no time restrictions applicable to Warner’s provision of a Rejection Notice where any of the following have occurred or are present:
(i) latent defects in the shipped Products that have not been caused by components or ingredients supplied by Warner (assuming proper storage and handling by the Manufacturer of such components or ingredients supplied by Warner and compliance by the Manufacturer with the terms hereof),
(ii) defects in the shipped Products that are not readily apparent on visual inspection, or
(iii) breach by the Manufacturer of any of its representations warranties or obligations hereunder.
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Except in the instances set forth in clauses (i), (ii) and (iii) of this paragraph (a), failure on the part of Warner to give a Rejection Notice shall mean acceptance by it of the shipment to which the Rejection Notice would have otherwise applied.
(b) The Manufacturer shall have thirty (30) days from receipt of a Rejection Notice within which to accept or reject Warner’s claims. The Manufacturer will promptly, following receipt of the Rejection Notice, submit a report on all Rejected Products, including the investigation and testing done and the recommended disposition to Warner. Warner shall review such report and notify the Manufacturer that Warner either requests additional data, approves the recommended disposition of the Rejected Products or will otherwise direct the Manufacturer as to how the Rejected Products should be disposed. All such Rejected Products shall be disposed of at the Manufacturer’s expense.
(c) If Warner and the Manufacturer agree that all or part of the Rejected Products may be reworked or reclaimed, Warner shall return such Products to the Manufacturer forthwith, and the Manufacturer shall reimburse Warner for all reasonable expenses associated with such return.
(d) In the event of a dispute between Warner and the Manufacturer as to whether a shipment of Products fails in whole or part to meet the Specifications, the resolution of such dispute shall proceed as follows:
(i) firstly, analysts from each of Warner and the Manufacturer shall meet to determine that the methods of analysis are the same and that such analysis was executed in the same manner by each party;
(ii) secondly, controlled, split samples of the disputed Product shall be sent from one party to the other for analysis in the manner agreed to in (d)(i);
(iii) thirdly, if the analysis in (d)(ii) does not resolve the dispute, analysts from each party shall meet and mutually proceed with the analysis of a mutually agreed sample;
(iv) fourthly, if there is still no resolution of the dispute, the parties shall retain an independent testing organization mutually chosen by the parties, the appointment of which shall not be unreasonably delayed by either party. The determination of such independent testing organization shall be binding on both parties.
Until a dispute is resolved, Warner shall properly tag and isolate all Rejected Products and shall not dispose of any Rejected Products without prior authorization from the Manufacturer. In any event, whatever the results of the analysis and the resolution of the dispute, Warner retains the right to determine the disputed Product’s release status. The fees and costs of the testing organization, and storage, handling and, if applicable, replacement and disposal of the Products shall be borne by the party whose position is not sustained by the testing organization.
(e) Warner shall have the right to withhold payment for any shipment of Rejected Products. If it is ultimately determined that the Rejected Products were properly
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rejected by Warner, Warner shall have no obligation to pay for the Rejected Products and the Manufacturer shall promptly reimburse Warner for any payment made in respect of the Rejected Products prior to receipt by the Manufacturer of the Rejection Notice and for all other costs incurred. If it is ultimately determined that the Rejected Products were not properly rejected by Warner, Warner shall be obligated to pay the outstanding balance owing in respect of the Rejected Products within 30 days of receipt of the determination made by the independent testing organization pursuant to paragraph (d) above.
(f) If at the time of delivery of a Rejection Notice Warner requires a replacement shipment of Rejected Products “ Replacement Products ”), Warner shall provide a written request for such Replacement Products along with the Rejection Notice. The Manufacturer shall use commercially reasonable best efforts to deliver the Replacement Products within 90 days of the date of receipt of the Rejection Notice. Warner shall be obligated to pay for such Replacement Products in accordance with Section 4.2 of the Agreement.
(g) The provisions of this Section 5.13 shall survive termination of this Agreement with respect to shipments of Products (or any portions thereof) manufactured by the Manufacturer that are received by Warner subsequent to the termination or expiration of this Agreement; provided, that subsequent to the termination or expiration of this Agreement, Warner, in lieu of having the Manufacturer replace such rejected Products, may elect in its sole discretion to have the Manufacturer reimburse Warner for the reasonable costs associated with the replacement of such rejected Products (including any applicable freight charges) by Warner or a third party selected by Warner.
5.14. Customer Complaints; Recalls.
(a) The Manufacturer shall provide all reasonable assistance requested by Warner in investigating customer complaints regarding any Product that, in Warner’s reasonable opinion, are related to or arise from the manufacturing and/or packaging of such Product, including, without limitation, testing of the Product in accordance with Warner’s Specifications.
(b) Warner shall be responsible for all Recalls of Products. Upon the reasonable request of Warner, the Manufacturer shall assist Warner, to the extent reasonably necessary or relevant, in implementing Recalls of Products from the market. Upon the receipt by either party of any direction to Recall any Product from the market from any Governmental or Regulatory Authority, the receiving party shall notify the other party in accordance with the terms of Section 5.15 hereof. Warner shall be responsible for all costs of the Recall unless such Recall results from the negligence, wilful misconduct or breach of this Agreement by the Manufacturer.
5.15. Government Inspections, Seizures and Recalls.
If any Governmental or Regulatory Authority conducts an inspection at the Facility, seizes any Product and/or its Materials, requests a Recall of any Product, or otherwise notifies the Manufacturer of any violation or potential violation of any applicable Law relating to a Product or Products, or the manufacture or storage thereof, Warner shall be notified immediately by the Manufacturer and the Manufacturer shall take such actions as may be required under the Specifications or reasonably instructed by Warner. The Manufacturer shall
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promptly send any reports relating to such inspection, seizure, request or notification to Warner. In the event that any such Governmental or Regulatory Authority requests, but does not seize, the Product in connection with any such inspection, the Manufacturer (i) shall promptly notify Warner of such request, (ii) shall follow any reasonable procedures instructed by Warner in responding to such request, provided that such procedures do not interfere with the Manufacturer’s compliance with the Governmental or Regulatory Authority’s request, and (iii) shall promptly send any samples of the Product requested by the Authority to Warner.
5.16. Inspections and Audits by Warner.
Representatives of Warner shall have access to every Facility for the purpose of (i) conducting inspections of such Facility and the Manufacturer’s maintenance and usage of the equipment and the molds and tooling utilized in the manufacture or packaging of Products, (ii) performing quality control audits or (iii) witnessing manufacturing, processing, packaging, storage or transportation of the Products or Materials, all as relating to the manufacture and supply of Products pursuant to this Agreement (collectively referred to as inspections). Such inspections do not relieve the Manufacturer of any of its obligations under this Agreement or create new obligations on the part of Warner. Such visits by Warner’s representatives shall be conducted at mutually agreed times during normal business hours with reasonable prior written notice. Warner shall have access to the results of any tests performed by the Manufacturer or at the Manufacturer’s direction relating to Products or Materials or the processes used in the manufacturing or packaging of the Products. The Manufacturer shall, upon not less than 10 Business Days notice, make available to an independent chartered accountant, selected by Warner and reasonably acceptable to the Manufacturer, all books, records and other data reasonably necessary to evaluate any adjustment made in connection with Price adjustments. Warner may exercise this right to an audit not more than once in any calendar year, and then only with respect to adjustments made during the preceding two calendar years. The independent chartered accountant selected shall agree not to disclose any confidential information and shall only disclose to Warner such information as is necessary to determine whether such adjustments were accurate. Such accountant shall also agree to disclose to the Manufacturer the results of the review.
Section 6. Representations and Warranties and Covenants.
6.1. Representations, Warranties and Covenants.
(a) The Manufacturer hereby represents, warrants and covenants to Warner that:
(i) The Facility, all equipment, tooling and molds utilized in the manufacture and supply of Products hereunder, and the procedures and processes (including installation, operation and performance qualifications) instituted by the Manufacturer in connection herewith are, as of the date hereof, and shall continue during the Term of this Agreement to be in material compliance with all applicable Laws and maintained in good operating condition.
(ii) The manufacturing, packaging and storage operations utilized in and with respect to the production of Products hereunder; the installation,
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operation and maintenance (and repair or replacement, if any) of the Facility and the equipment, tooling and molds utilized in connection herewith; and the procedures and processes (including installation, operation and performance qualifications and disposal | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AGREEMENTS / CONTRACTS
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