Exhibit 10.31
LICENSE, SUPPLY AND DEVELOPMENT
AGREEMENT
“DC AGREEMENT”
between
WARNER CHILCOTT COMPANY,
INC.
and
LEO Pharma A/S
TABLE OF CONTENTS
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I
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DEFINITIONS
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4
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II
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RIGHTS
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9
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III
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DEVELOPMENT
– 80185/80190
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10
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IV
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DEVELOPMENT -
LINE EXTENSIONS
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11
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V
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STUDIES
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12
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VI
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SUPPLY OF
FINISHED PRODUCTS
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12
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VII
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MARKETING
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23
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VIII
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ACCOUNTING AND
ROYALTY PAYMENT
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25
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IX
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PATENT
PROTECTION AND VALIDITY
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27
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X
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THIRD PARTIES
INTELLECTUAL PROPERTY CLAIMS
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28
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XI
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CONFIDENTIALITY
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29
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XII
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REGISTRATIONS
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29
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XIII
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TRADEMARKS
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30
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XIV
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AUTHORISATIONS
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31
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XV
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QUALITY
ASSURANCES
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31
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XVI
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SAFETY
REPORTING, COMPLAINTS AND PRODUCT RECALL
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32
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XVII
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RESPONSIBILITIES OF PARTIES
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32
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XVIII
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TERM AND
TERMINATION; CONSEQUENCES OF TERMINATION
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34
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XIX
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ASSIGNABILITY
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37
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XX
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AMENDMENT OF
AGREEMENT; WAIVER; SEVERABILITY
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37
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XXI
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STATUS OF PRIOR
AGREEMENT
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38
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XXII
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FORCE
MAJEURE
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39
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XXIII
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NON-COMPETITION
CLAUSE
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39
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XXIV
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PARTNERSHIP/AGENCY; THIRD PARTIES
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40
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XXV
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GOVERNING
LAW
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40
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XXVI
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NOTICES
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41
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Appendices:
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Appendix I:
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LEO Logo
Guidelines
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Appendix II:
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LEO Product
Concept
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Appendix III:
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Patents
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Appendix IV:
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Products
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Appendix
V:
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Batch Size and
Minimum Order Quantity Per Delivery
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Appendix
VI:
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Quality
Agreement
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Appendix VII:
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WCCI’s
Pharmaceutical Import License
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Appendix VIII:
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Pharmacovigilance Agreement
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Appendix
IX:
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Complaints and
Product Recall
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Appendix
X:
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Pack
Sizes
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AGREEMENT
between
WARNER CHILCOTT COMPANY,
INC. of P.O. Box 1005,
Fajardo, Puerto Rico, 00738 (“ WCCI
”)
and
LEO Pharma A/S
of Industriparken 55, DK-2750
Ballerup, Denmark (“ LEO ”).
Capitalized terms not otherwise
defined herein shall have the meanings set forth in Article
I of this Agreement.
WHEREAS WCCI and LEO wish to explore certain
opportunities in relation to topical treatment and prevention of
psoriasis with calcipotriol (calcipotriene) alone or in combination
with steroids in the Territory;
WHEREAS , LEO has discovered and developed the Compound
and Manufactures pharmaceutical products containing the Compound
for human therapeutic use;
WHEREAS , WCCI has marketing expertise within the field
of dermatology; and
WHEREAS , WCCI and LEO are interested in collaborating
on the marketing of the Products in the Territory.
NOW THEREFORE
, the Parties hereby agree as
follows:
I - DEFINITIONS
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1.1
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“
Action or Proceeding ” shall mean any action, suit,
proceeding, arbitration or Governmental or Regulatory Authority
action, notification, investigation or audit.
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1.2
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“
Affiliate ” shall mean, with respect to any Person,
any Person which, directly or indirectly, controls, is controlled
by, or is under common control with, the specified Person. For
purposes of this definition, the term “control” as
applied to any Person, means the possession, directly or
indirectly, of at least fifty-one per cent (51%) of the power
to direct or cause the direction of the management of that Person,
whether through ownership of voting securities or
otherwise.
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1.3
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“
Agreement ” shall mean this License, Supply and
Development Agreement between WCCI and LEO.
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1.4
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“
Amended and Restated Dovonex® Agreement ” shall
mean the License and Supply Agreement dated as of the date hereof
between LEO and WCCI.
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1.5
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“
Appendix IV Products ” shall mean the Products listed
and further described in Appendix IV .
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1.6
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“
BMS ” shall mean Bristol-Myers Squibb
Company.
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1.7
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“ BMS
Agreements ” shall mean the agreement dated
September 28, 1989 between BMS (as successor to E.R.
Squibb & Sons Inc.) and LEO, as amended July 6,
1992, April 8, 1993 and April 1, 2003 and the
Product Supply Agreement between BMS and LEO dated as of
April 8, 1993, each as may be amended or supplemented by the
parties in the future.
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1.8
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“
Compound ” shall mean the compound Calcipotriene, a
vitamin D analogue with the formula C 27 H 40 0 3 .
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1.9
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“
Confidentiality Agreement ” shall mean the
Confidentiality Agreement dated as of 4 July 2005 between the
Parties.
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1.10
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“
current Good Manufacturing Practices ” shall mean the
regulatory and other standards of good manufacturing practice in
the Territory, as in effect from time to time, relating to the
Manufacture of medicinal products.
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1.11
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“
Dovonex® Products ” shall mean Dovonex®
ointment, Dovonex® cream and Dovonex® scalp
solution.
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1.12
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“
Effective Date ” shall mean the date on which this
Agreement becomes effective pursuant to Article 3.4(c) of the
Master Agreement.
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1.13
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“
FDA ” shall mean the United States Food and Drug
Administration.
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1.14
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“
Finished Product ” shall mean the Products which are
ready for sale to customers in finished, final packaged
form.
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1.15
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“
Governmental or Regulatory Authority ” shall mean any
court, tribunal, arbitrator, agency, commission, official or other
instrumentality of the United States or any relevant country,
state, province, county, city or other political
subdivision.
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1.16
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“
Gross Margin ” shall mean Net Sales less an amount
equal to a percentage of Net Sales determined by adding the
purchase price, as set forth in Article 6.2 and the
applicable royalty rate, set forth in Article 8.1
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1.17
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“
IND ” shall mean the Investigational New Drug
Application, as defined in the United States Federal Food, Drug and
Cosmetic Act and applicable regulations promulgated thereunder as
amended from time to time, filed in the United States for the
Product.
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1.18
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“
Laws ” shall mean all laws, statutes, rules,
regulations, ordinances and other pronouncements having the effect
of law of any relevant Governmental or Regulatory
Authority.
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1.19
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“ LEO
Logo Guidelines ” shall mean the guidelines for use of
the LEO name and the Assyrian Lion logo, as amended from time to
time, Appendix I .
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1.20
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“ LEO
Product Branding ” shall mean the Trademark, the LEO
name, the Assyrian Lion, the LEO Logo Guidelines, the LEO Product
Concept and any domain names or websites related to the Product in
the Territory.
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1.21
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“ LEO
Product Concept ” shall mean the global concept for
packaging and promotional materials related to the Products
developed by LEO as amended from time to time, Appendix II
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1.22
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“
Losses ” shall mean any and all damages, fines, fees,
penalties, deficiencies, losses and expenses (including without
limitation interest, court costs, reasonable fees of attorneys,
accountants and other experts or other expenses of litigation or
other proceedings or of any claim, default or
assessment).
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1.23
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“
Manufacture ” shall mean all the activities relating
to production of each Product, spanning from purchasing raw
materials to packaging Product including, but not limited to,
purchasing raw materials, packaging materials, production, quality
control and assurance, filling, labelling, packaging and finishing,
release, holding and storage and the tests and analyses conducted
in connection therewith.
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1.24
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“
Manufacturing Authorization ” shall mean the
authorization to Manufacture the Products as granted by the
relevant Governmental or Regulatory Authorities.
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1.25
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“
Master Agreement ” shall mean the Master Agreement
dated as of 1 April 2003 between LEO and WCCI (as assignee of
GALEN), as amended by Addendum I dated as of the date hereof
between LEO and WCCI (“ Addendum I to the Master
Agreement ”), as further amended from time to
time.
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1.26
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“
NDA ” shall mean the New Drug Application filed with
the FDA for a Product, requesting permission to place such Product
on the market in accordance with 21 C.F.R. Part 314 and all
supplements filed pursuant to the requirements of the FDA,
including all documents, data and other information concerning such
Product which are necessary for FDA approval to market a product in
the United States.
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1.27
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“ Net
Sales ” shall mean the adjusted gross invoice price, the
adjusted gross invoice price being the aggregate sales of WCCI and
its Affiliates of the Appendix IV Products to unaffiliated third
parties in the Territory (but not including sales between WCCI and
its Affiliates) less sales returns and allowances, including trade,
quantity and cash discounts and any other adjustments, including
those granted on account of price adjustments, billing errors,
rejected goods, damaged goods, Recalls, returns, rebates,
chargeback rebates, fees, reimbursements or similar payments
granted or given to wholesalers or other distributors (including
retailers), buying groups, health care insurance carriers or other
institutions, freight and insurance charges billed to the
customers, customs or excise duties, sales tax and other taxes
(except income taxes) or duties relating to sales, and any payment
in respect of sales to any Governmental or Regulatory Authority in
respect of any
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Federal or state Medicaid, Medicare
or similar program, all as determined in accordance with generally
accepted accounting principles on a basis consistent with
WCCI’s audited financial statements, provided, however, that
the deductions from aggregate sales described above shall in no
event exceed eight percent (8%) of the gross adjusted
price.
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1.28
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“
Party ” shall mean WCCI or LEO, as the case may be,
and “ Parties ” shall mean WCCI and
LEO.
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1.29
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“
Patents ” shall mean the patents and patent
applications owned and controlled by LEO and listed in Appendix
III hereto, together with any reissues, extensions,
substitutions, confirmations, registrations, revalidations,
additions, divisions, continuations, or continuations-in-part, of
or to the aforesaid patents and patent applications and/or any
patents issuing thereon, and any other patents owned by, or
licensed to LEO in the Territory which, in the absence of a
license, would be infringed by the Manufacture, use, sale, offer
for sale, import, storage or distribution of Products.
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1.30
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“
Person ” shall mean any individual, firm, corporation,
partnership, limited liability company, trust, joint venture,
Governmental or Regulatory Authority or other entity or
organization.
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1.31
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“
Product ” or “ Products ” shall
mean any (i) pharmaceutical formulations containing
calcipotriol (calcipotriene) as the only active pharmaceutical
ingredient (other than the Dovonex® Products) and
(ii) pharmaceutical formulations containing calcipotriol
(calcipotriene) and steroid (including the Appendix IV Products),
in each case, in any form including, but not limited to, an
ointment, cream, gel, solution, foam, mousse or liquid, whether
such formulation has been developed, is being developed or may be
developed in the future.
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1.32
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“
Registrations ” shall mean the authorization to sell
the Product in the Territory as granted by the FDA or other
relevant Governmental or Regulatory Authority.
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1.33
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“
Specifications ” shall mean the specifications and
procedures for Manufacturing the Product as contained in the
Registration for the Product and any additional specifications as
are mutually agreed upon by the parties hereto in writing,
including all stability requirements set forth therein.
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1.34
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“
Technical Information ” shall mean all information in
the possession of LEO and/or its Affiliates, and the information
transferred from BMS to WCCI, regarding preclinical,
chemical-pharmaceutical and clinical data or other scientific
information (including Specifications, master batch records,
analytical methods including validation protocol and the drug
master file), or secret know-how about the Products including, but
not limited to marketing know-how and show-how or uses for the
Product in the possession of LEO regarding the Product necessary
for WCCI to fulfil its obligations under the Agreement.
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1.35
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“
Territory ” shall mean the fifty (50) states of
the United States of America, the District of Columbia, its
territories and current possessions.
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1.36
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“
Trademark ” shall mean the trademark Dovobet
® owned by LEO, or any other
trademark LEO may select for the Products, such Trademarks to be
owned by LEO.
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1.37
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“ WCCI
Information ” shall mean any information (including, but
not limited to, technical improvements, financial and marketing
information) developed, made and/or generated by WCCI relating to
and made as a result of its work with the Products.
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II - RIGHTS
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2.1
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Grant . LEO hereby grants WCCI, and WCCI accepts from
LEO, subject to the terms, conditions and provisions of this
Agreement, an exclusive license subject to Article 7.1 ,
with the right to sublicense to WCCI’s Affiliates, under the
Trademark, Patents and Technical Information owned by, or licensed
to, LEO to import, store, distribute, use, sell and offer to sell
the Products in the Territory. For the avoidance of doubt, the
Parties agree that the rights granted to WCCI herein expressly
include exclusive rights relating to (i) the Appendix IV
Products whether or not (x) LEO determines in accordance with
Article 3.1 that it is economically unfeasible to proceed
with the development of such products or (y) the Parties
mutually agree to proceed with the development following such
determination and (ii) the Product line extensions whether or
not the Parties mutually agree to pursue their development in
accordance with Article IV . Subject to Article 4.1 ,
the Parties acknowledge and agree that they will (i) discuss
the development of the Product line extensions in good faith,
(ii) use commercially reasonable judgment in
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determining whether or not to enter
into agreements with the other Party to pursue the development of
any Product line extension and (iii) negotiate in good faith
with respect to such development agreements.
The Parties acknowledge that in
connection with WCCI’s efforts to market and sell the
Products in the Territory, it is necessary for WCCI to establish
Internet websites with domain names containing the word
“dovobet” or other Trademarks (collectively, the
“ Product Websites ”). As promptly as
practicable following the execution of this Agreement, the Parties
shall cooperate to develop a mutually acceptable strategy with
respect to establishing the Product Websites including, without
limitation, the negotiation and execution of mutually acceptable
domain name license agreements if necessary to effectuate such
strategy.
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2.2
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LEO, its
Affiliates and its partners having rights to the Products outside
of the Territory (“ Product Licensees ”) will be
free to use WCCI Information (other than confidential financial
information regarding WCCI), but shall be subject to the same
confidentiality obligations set forth in Article XI
.
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III - DEVELOPMENT –
80185/80190
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3.1
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LEO shall be
responsible for the development of LEO 80185 and LEO 80190 for the
indications described in Appendix IV (the “
Indications ”), including, without limitation,
performing any preclinical, clinical and other scientific studies
necessary to obtain approval of the FDA to each NDA for the
Indications (collectively, the “80185/80190
Development”). LEO shall develop the Appendix IV Products in
the pack sizes set forth in Appendix X hereto. LEO shall
bear all costs and expenses associated with the 80185/80190
Development including, without limitation, costs in relation to
obtaining NDA approval; provided that if FDA requirements
make development of any Product under the 80185/80190 Development,
in the reasonable judgement of LEO, economically unfeasible, the
Parties will meet to discuss in good faith if and how to proceed
with regard to development of such Product including whether to
continue or discontinue such development and the implications of
such decision. In connection with the 80185/80190 Development, LEO
shall provide WCCI with regular status reports and shall timely
communicate to WCCI any significant discussions or decisions that
occur during internal (eg, project teams) and external (eg, FDA
authorities) meetings related to such development.
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3.2
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LEO cannot
guarantee that an NDA and/or a marketing authorization can be
obtained for any Product.
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IV - DEVELOPMENT – LINE
EXTENSIONS
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4.1
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Promptly
following the execution of this Agreement and at regular intervals
(at least semi-annually) thereafter, the Parties shall meet and
discuss in good faith the development of line extensions for
Products including, without limitation, foam delivery systems for
the Products (each, a “Line Extension Development”). In
the event the Parties agree to conduct a Line Extension
Development, the Parties shall agree in a separate agreement how
the clinical and product development costs will be shared by the
Parties. LEO will assume such development and manufacturing
responsibilities unless otherwise agreed by the Parties.
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4.2
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If LEO assumes
the development responsibilities with respect to any Line Extension
Development, LEO will own all rights including, but not limited to,
any intellectual property rights, arising out of such development.
If LEO does not assume the development responsibilities with
respect to any Line Extension Development, LEO and WCCI shall
discuss in good faith the possible development by WCCI. If WCCI
assumes the development responsibilities with respect to any Line
Extension Development (i) the Parties shall discuss in good
faith intellectual property issues and optimal development
timelines and (ii) WCCI shall (x) buy the active
pharmaceutical ingredients (“ API ”) from LEO
and (y) use the relevant technical and preclinical data owned
by LEO (the “ LEO Data ”). Subject to the last
sentence of Article 8.1 , WCCI shall pay a royalty for use
of the LEO Data in an amount to be agreed by the Parties at the
time of such use. Subject to the last sentence of Article
6.2 , LEO will supply and WCCI will buy its entire needs of
such API from LEO at a purchase price to be agreed upon at the time
of each Line Extension Development conducted by WCCI. If LEO does
not Manufacture the Finished Product(s) with respect to any Line
Extension Development, LEO and WCCI shall discuss in good faith the
Manufacture of such Finished Product(s) by WCCI.
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V - STUDIES
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5.1
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WCCI shall not
perform any pre-clinical or clinical studies, seeding trials,
observational studies or any other pre or post marketing studies
relating to the Products, without the prior written consent of LEO
and the prior written approval of the protocols by LEO, such
consent and approval not to be unreasonably withheld. Products to
be used in any such studies shall be delivered by LEO to WCCI at a
price equivalent to 75% of the purchase price as defined in
Article 6.2 . The performance, funding and use of data and
results related to certain of such studies and trials are further
described in Article 3 of Addendum I to the Master Agreement, which
are hereby incorporated by reference in this Agreement and which
are hereby deemed to be part of this Agreement.
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VI - SUPPLY OF FINISHED
PRODUCTS
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6.1
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Supply . In order to ensure the quality of the Products
to be sold by WCCI, WCCI shall purchase from LEO, and LEO shall
supply to WCCI, according to supply conditions set forth in this
Agreement, either from LEO or from such other sources as LEO shall
authorise subject to Article 6.9.1(b) , WCCI’s total
requirements of the Products for use and sale for the term of this
Agreement, it being understood that LEO shall have no obligation to
supply a Product (other than clinical supplies) and WCCI shall have
no obligation to purchase a Product unless and until a Registration
is granted with respect to such Product. For the avoidance of
doubt, if and when a Registration is granted for an Appendix IV
Product, subject to the terms, conditions and provisions of this
Agreement, WCCI shall have the obligation to market and sell such
Product in the Territory.
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6.2
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Purchase
Price . The purchase
price will be a percentage calculated on the Net Sales of Product
sold by WCCI or its Affiliates in the Territory calculated as
follows for the first period, i.e. the period running from the
Effective Date until the end of the calendar year in which the
Agreement becomes effective and the subsequent periods of twelve
(12) months (calendar years):
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Payment
Rate
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Annual Net
Sales (of
Dovobet®
ointment)
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Annual Net
Sales of
Dovobet® ointment
and one additional
Appendix IV Product/
Indication
once
such Product/
Indication is
launched
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Annual Net
Sales of
Dovobet® ointment
and two additional
Appendix IV Products/
Indications
once such Products/
Indications are
launched
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Annual Net
Sales of
Dovobet® ointment
and three additional
Appendix IV Products/
Indications
once such Products/
Indications are
launched
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Annual Net
Sales of
Dovobet® ointment,
and four additional
Appendix IV Products/
Indications
once such Products/
Indications are
launched
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25%
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Less than
USD 50
million
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Less than
USD 75
million
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Less than
USD 100
million
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Less than
USD 125
Million
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Less than
USD 125
million
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22.5%
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USD 50
million or
more and
less than
USD 100
million
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USD
75
million or
more and
less than
USD 125
million
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USD 100
million or
more and
less than
USD 150
million
|
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USD 125
million or
more and
less
than
USD 175
Million
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USD 125
million or
more and
less than
USD 175
million
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20%
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USD 100
million or
more
|
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USD 125
million or
more
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USD 150
million or
more
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USD 175
million or
more
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USD 175
million or
more
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It is understood that LEO has no
obligation to deliver Products at a floor price below four
(4) times the LEO group variable cost at all times (raw
materials, packaging materials including art work, energy, labour
etc.) of the Manufacture of the Products.
The amount of the supply payment for
other Products than the Appendix IV Products at the Effective Date
shall be mutually agreed upon by the Parties on a Product by
Product basis; provided that the payments shall be
calculated on a basis substantially similar to the configuration
above.
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6.3
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Invoicing . LEO shall issue an invoice with each shipment
of Products pursuant to this Agreement and WCCI agrees to pay such
invoice in immediately available funds within end of month + thirty
(30) days from the date of invoice. Invoicing and payments for
Products shall be denominated in United States Dollars. Payment
shall be made to an account designated by LEO in writing. The
supply price of Products reflects shipping terms of FCA [Site of
Production] (ICC Incoterms 2000).
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6.3.1 Invoice Adjustments .
Because the Purchase Price is based on Net Sales and will not be
known precisely at the time of shipment of Products by LEO, such
invoice price shall reflect an estimated Purchase Price agreed by
the Parties.
Each year on 1 August (and as
promptly as practicable after the date hereof with respect to
2006), the Parties shall mutually agree on an invoice price for the
following calendar year based on the expected Net Sales and on
1 January the invoice price of the stock of Products at WCCI
will be adjusted to the new invoice price agreed for that new
year.
Adjustments to correct the invoiced
amount shall be made quarterly following receipt of information on
the actual Net Sales realized on the sale of Products during the
applicable period.
WCCI shall render to LEO, within
sixty (60) days after the end of each calendar quarter, a
detailed report setting forth Net Sales for the preceding calendar
quarter, the corresponding units by SKU represented by such Net
Sales, the manner in which Net Sales have been calculated, as well
as a calculation of said adjustments to invoice prices. Settlement
is to take place at the time of delivery of the report.
Any payment made by WCCI hereunder
after the date such payment is due, shall bear interest at the
lesser of: (a) one and one half percent (1.5%) per month
or (b) the maximum rate permitted by applicable law. The
interest on late payments shall be calculated from the date payment
was due until such payment is received by LEO.
The provisions set forth in this
Article 6.3 that are necessary to perform the adjustments
described herein following the termination or expiration of this
Agreement shall survive such termination or expiration.
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6.4
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Forecasts/Firm Orders .
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(a) To the extent possible, taking
into account the Registration process, as soon as practicable prior
to the Effective Date, WCCI will provide LEO with a firm order for
the period from the Effective Date up to and including the end of
the fourth full month following the Effective Date. LEO will supply
the quantities set forth in such
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firm order in accordance with the
delivery schedule set forth therein, and to the extent such firm
order is not sufficient to meet WCCI’s actual requirements of
the Product for such period, LEO will use commercially reasonable
efforts to supply WCCI with its requirements beyond the amounts
specified in such firm order.
To the extent possible, taking into
account the Registration process, as soon as practicable prior to
the Effective Date, or if not possible, as soon as practicable
after the Effective Date, WCCI shall provide to LEO final
specifications for the labelling and packaging of each presentation
of the Products identifying LEO as the manufacturer of the Product
and WCCI as the distributor thereof, including all necessary
photo-ready art (or its substantial equivalent). WCCI understands
and acknowledges that the lead time for the first shipment of
Product following the receipt of such final specifications shall be
four (4) months.
For supplies thereafter, firm orders
shall be filled by LEO in accordance with the firm orders placed by
WCCI pursuant to Article 6.4(b) .
(b) LEO will within five
(5) working days following the end of each calendar month
receive from WCCI a rolling forecast covering twenty four
(24) months of which the first four (4) months must be
covered by firm orders (consisting of the then current month and
the following three (3) months). LEO shall, to the best of its
ability, supply to WCCI the exact amount of Finished Products that
WCCI has ordered. WCCI accepts that a variation in deliveries of
+/- ten percent (10%) may occur. If LEO does not deliver
Finished Products at the delivery dates stated in the respective
firm order for technical reasons, LEO shall immediately inform
WCCI. Both Parties will agree to a postponement or cancellation of
the firm order affected. In the event of a postponement, LEO shall
deliver within four weeks of the original delivery date. If LEO
does not deliver Finished Products at the delivery dates stated in
the respective firm order (or at a date otherwise agreed upon with
WCCI) for any reason other than technical reasons, LEO shall
deliver within four weeks of the original delivery date. Subject to
timely supply by LEO pursuant to Article 6.4(b) , WCCI shall
maintain at least two (2) months’ inventory of the
Product (two (2) month’s inventory of each stock keeping
unit (SKU)).
If this Agreement is terminated, and
such termination results from the breach of WCCI, then any amounts
owed by WCCI to LEO in respect of firm orders as of the date of
termination must be paid by WCCI.
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(c) The batch-size and minimum order
quantity per delivery shall be as set forth in Appendix V
hereto.
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6.5
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Delivery . All shipments shall be shipped to such named
place as WCCI shall with reasonable notice designate in writing,
and will be in accordance with the delivery instructions and with
the specifications for shipping and packing included with each
purchase order. Delivery will be made by LEO to a common carrier as
WCCI shall direct or to any special carrier which WCCI shall
designate, along with a certificate of compliance and analysis in
accordance with Article 6.9.12 . All risk of loss, delay or
damage in transit after delivery to such carrier shall be borne by
WCCI. WCCI shall pay freight and insurance on all such shipments
and all customs brokers’ fees.
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6.6
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Controlling
Provisions . In ordering
and delivering, WCCI and LEO may employ their standard forms, but
nothing in those forms shall be construed to modify or amend the
terms of this Agreement and in case of conflict herewith, this
Agreement shall control.
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6.7
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Acceptance
of Shipments .
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6.7.1 Initial Acceptance .
After receipt of a Product shipment, WCCI shall, within thirty
(30) days, visually inspect the Product shipment and
communicate acceptance or rejection to LEO in writing. The Parties
agree that WCCI’s visual inspection consists of
(i) comparing the applicable order against the documentation
accompanying the shipment to verify that the delivery date,
identity, quantity and exterior shipment labelling comply with the
order and (ii) visually inspecting the exterior of the Product
shipment to verify that the shipment appears to be in good
condition.
6.7.2 Return and Replacement
. Any quantities of the Products that are rejected and/or returned
by WCCI in accordance with this Agreement and the rejection has
been accepted by LEO shall be returned to LEO at the expense of LEO
and at WCCI’s option (a) shall be replaced by LEO as
quickly as possible at LEO’s sole expense and the payment in
respect of such quantities postponed until such replacement
quantities are received and accepted by WCCI or (b) LEO shall
refund any amounts paid in respect of such quantities to
WCCI.
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6.7.3 Independent
Verification . If LEO does not agree to the rejection of the
Product the Parties will seek the opinion of an independent
laboratory reasonably acceptable to both Parties, whose opinion
shall be final and binding. The expenses for such expert opinion
shall be borne by the Party shown to be wrong, or, if the expert
cannot identify the responsible Party, then the Parties shall share
equally the expenses connected with the expert and the expenses
connected with the Products rejected and/or returned.
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6.8
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Representations, Warranties and Covenants of
WCCI . WCCI hereby
represents, warrants and covenants to LEO as follows:
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6.8.1 Packaging Components .
Subject to Article 6.9.8 , WCCI shall provide LEO with all
artwork or other material developed or produced by WCCI for product
labels, product inserts and other printed packaging material. All
such art work and other material shall be consistent with the LEO
Product Concept wherever and whenever legally possible. WCCI shall
be responsible for ensuring that Product labels and Product inserts
that it provides pursuant to Article 6.9.8 , and any other
printed materials it provides, comply with all applicable Laws and
with conditions set forth in the Registration. LEO has the right to
purchase packaging components for six (6) months’ use
based on the forecasts delivered at the time when LEO purchases and
WCCI shall reimburse LEO for costs involved in connection with
discarded components due to changes wanted by WCCI in such
components. The same applies if sale of a package size is
discontinued, including, but not limited to, in case of termination
of this Agreement by LEO due to a breach by WCCI, but excluding
discontinuation or withdrawal in the case of termination of this
Agreement by WCCI due to a breach by LEO.
6.8.2 Storage . WCCI
represents and warrants that Products delivered hereunder will be
stored in full accordance with the applicable Laws in the
Territory, and with the instructions given by LEO, and the national
health authorities in the Territory. LEO has the right at any time
during normal business hours, upon reasonable notice, to audit
premises used by WCCI for holding and storage of Products in
Territory and examine those parts of the premises, procedures and
documentation involved in the activities of this
Agreement.
6.8.3 Changes in Product Labels
and Printed Materials . In the event that WCCI requests changes
in product labels, printed packaging materials or
packaging
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inserts for Products and LEO has
components for such materials in stock that it has purchased
specifically for such Product that can no longer be used as a
result of such changes, WCCI shall have the obligation to purchase
the lesser of (a) all of the LEO stock of such components and
(b) six months supply of the LEO stock of such components, at
cost. WCCI shall give LEO at least four (4) months’
notice in advance of any changes required to be made to the
packaging materials. In case of termination of this Agreement,
caused solely by WCCI’s breach, WCCI shall reimburse LEO the
cost of all packaging materials in stock, purchased specifically
for the Products, at the time of such termination.
6.8.4 Repackaging . WCCI is
not allowed to repack the Products or in any way change the
original packaging of Products.
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6.9
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Representations, Warranties and Covenants of
LEO . LEO hereby
represents, warrants and covenants to WCCI as follows:
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6.9.1 Valid Manufacturing
Authorization . (a) LEO owns a valid Manufacturing
Authorization issued by the relevant Governmental or Regulatory
Authority.
(b) LEO shall not make changes or
take actions which will require WCCI to amend any Registration
including but not limited to transfer of any Product to alternative
manufacturing facilities or changes in or replacement of equipment
or a change in the Specifications, without the prior written
consent of WCCI, which consent shall not be unreasonably withheld;
provided that such amendment is for good reason, and any costs
relating to such change or action shall be at the sole expense of
LEO.
6.9.2 Conformity with
Specifications and Laws . Each Product delivered by LEO to WCCI
hereunder has been Manufactured using a process that has been
validated in accordance with current Good Manufacturing Practices
and has been Manufactured in compliance with the Specifications for
such Product and with current Good Manufacturing Practices and all
Laws with respect to the Manufacture of each Product. Each Product
conforms to any further affirmation of fact as may be made on or in
any other documentation associated with or related to such
Products.
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6.9.3 Creation and Retention of
Records . LEO s
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