Exhibit 10.11


 


CONFIDENTIAL TREATMENT REQUESTED:


Portions of this Exhibit have been redacted
pursuant to a request for confidential treatment under Rule 24b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934,
as amended.  Such redacted portions have been replaced with “{***}” in this Exhibit.  An unredacted version of this document has
been filed separately with the Securities and Exchange Commission along with the request for
confidential treatment.


 


SUPPLY
AGREEMENT


 


between


 


PLANTEX
USA, INC.

Two University Plaza, Suite 305,
Hackensack, NJ 07601

(“Plantex”)


 


and


 


BIOVAIL
LABORATORIES INCORPORATED

Chelston Park, Building 2, Collymore Rock, St.
Michael, Barbados, West Indies

(“Biovail”)


 


WHEREAS,
Plantex and Biovail desire to provide for the purchase and supply of the active
pharmaceutical ingredient, diltiazem hydrochloride, upon the terms and
conditions set forth in this Agreement.


 


NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements set forth in this Agreement, and other good and valuable
consideration the adequacy and sufficiency of which is acknowledged, the
Parties, intending to be legally bound, agree as follows:


 


1.                                      INTERPRETATION
AND CERTAIN DEFINITIONS


 


1.1                                 The preamble to
this Agreement forms an integral part hereof.


 


1.2                                 Section headings
in this Agreement are intended solely for convenience of reference and shall be
given, no effect in the interpretation of this Agreement.


 


1.3                                 All annexes to
this Agreement, signed by both Parties, whether attached at the time of
signature hereof or at any time thereafter, shall be construed as an integral
part of this Agreement.


 


1.4                                 For purposes of
this Agreement, the following words and phrases shall bear the respective
meanings assigned to them below (and cognate expressions shall bear
corresponding meanings):


 


1.4.1                                                     “API” — shall mean the active pharmaceutical ingredient
diltiazem hydrochloride.


 

















 


1.4.2                                                     “Action” — shall mean any suit, action, investigation
(governmental or otherwise), claim or proceeding initiated or filed against a
Party which results in or could result in a Loss or Losses for which
indemnification is required by an Indemnifying Party pursuant to Article 10
herein.


 


1.4.3                                                     “Affiliates” — shall mean, with respect to any Party, any
Person that is controlled by, controls, or is under common control with, that
Party, but for greater certainty, Ethypharm S.A, shall not be an Affiliate of
Biovail for any purpose of this Agreement. For this purpose, “control” of a corporation or other business entity shall
mean direct or indirect beneficial ownership of more than fifty percent (50%)
of the voting interest in, or more than fifty percent (50%) in the equity of,
or the right to appoint more than fifty percent (50%) of the directors or management
of, such corporation or other business entity.


 


1.4.4                                                     “Agreement” — means this Agreement as it is hereafter amended
from time to time in the mutual written agreement of the Parties.


 


1.4.5                                                     “cGMP” — means current good manufacturing practices in accordance
with the rules and regulations promulgated by the FDA.


 


1.4.6                                                     “DMF” — means the applicable drug master file covering the
analysis and manufacture of the API, including, without limitation, analytical
methods, stability and pharmaceutical data, impurities, and manufacturing
processes with respect to the API.


 


1.4.7                                                     “Effective Date” — means October 1, 2004.


 


1.4.8                                                     “FDA” — means the United States Food and Drug Administration
and all agencies under its direct control or any successor organization.


 


1.4.9                                                     “Finished Product(s)” — means finished pharmaceutical product(s) in
any and all strengths and dosage forms manufactured by or on behalf of Biovail,
any of its Affiliates or contract manufacturers with the API, other than
Cardizem CD as manufactured by or for Biovail and Marketed under the brand name
Cardizem CD in the Territory.


 


1.4.10                                               “Indemnified Party” — means the Party to this Agreement
entitled to be indemnified by the Indemnifying Party against a Loss or Losses
pursuant to Section 10 below.


 


1.4.11                                               “Indemnifying Party” — means the Party obligated to indemnify
the indemnified Party against a Loss or Losses pursuant to Section 10
below.


 


1.4.12                                               “Loss” — means any liability, loss, cost, damage or expense,
including, without limitation, reasonable attorneys’ fees and expenses.


 

















 


1.4.13                                               “Manufacture” and “manufacturing” —
mean, along with other forms of the word, the manufacturing, handling,
packaging, storage and/or disposal of the API or any Finished Products, as the
case may be, and the raw materials and components used in connection with the
preparation thereof.


 


1.4.14                                               “Market Price” — means an average of two (2) bona-fide
prices in U.S. Dollars/kg to sell API to Biovail for use in its Finished
Product, as presented to Biovail in a firm written quotation from third
parties, which API is the subject of a currently qualified DMF referenced in an
approved ANDA; provided, however, that the Market Price for all
quantities of API ordered by Biovail from October 1, 2004 through December 31,
2005 shall be deemed to be {***}†.


 


1.4.15                                               “Party” or “Parties” — mean
and include Plantex and Biovail, or each of them individually, as opposed to a “third
party,” which is not a party to this Agreement.


 


1.4.16                                               “Person” — means any individual, partnership, association, corporation,
trust or legal person or entity.


 


1.4.17                                               “Regulatory Authorities” — mean any and all bodies and
organizations, including, without limitation, the FDA, which regulate the
manufacture, importation, distribution, use and sale of API and/or the Finished
Products.


 


1.4.18                                               “Specifications” — means the specifications for the API
contained in Schedule I attached hereto.


 


1.4.19                                               “Term” — shall mean the duration of this Agreement starting
on the Effective Date and continuing until December 31,2009, unless
terminated prior to such expiration date pursuant to this Agreement.


 


1.4.20                                               “Territory” — means Canada and the United States of America.


 


2.                                      PURCHASE
AND SUPPLY OF API


 


2.1                                 From the
Effective Date through December 31, 2005, Biovail shall purchase, or cause
its Affiliates to purchase, from Plantex, and Plantex shall sell to Biovail or
such Affiliates, a minimum quantity of {***}† of API. Plantex shall store
all such API purchased by Biovail or its Affiliates under cGMP conditions in
the USA or in Israel, for delivery to Biovail in accordance with Biovail’s
directions. Thereafter, for the period commencing on the later of January 1,
2006 and the date upon which Biovail has used up its then existing inventories
of API, through 


 






† Represents
material which has been redacted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment pursuant
to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


 

















 


the end of the Term, Biovail
shall purchase, or cause its Affiliates to purchase, from Plantex, and Plantex
shall sell to Biovail or such Affiliates, {***}† of the API required by
Biovail, and its Affiliates in connection with the manufacture or marketing of
Finished Products for sale in the Territory.


 


2.2                                 The purchase
price payable for the API hereunder shall be the applicable Market Price.
Commencing on October 1, 2005 and on October 1st of each successive
twelve (12) month period thereafter, the Parties shall agree in good faith upon
the Market Price for the following calendar year. If the Parties are unable to
mutually agree upon the Market Price for any calendar year, the Market Price
shall remain at the Market Price for the prior calendar year. Plantex will
issue invoices upon shipment of API. Invoices will be due and payable
forty-five (45) days of the invoice date. All dollar amounts herein refer to
U.S. currency. Amounts not paid when due shall accrue interest calculated at
the rate of {***}† plus the U.S. prime rate (but in no event greater than the maximum rate
permitted by law) in effect on the date that the payment should have been made,
as published in The Wall Street Journal, Eastern U.S. Edition, calculated on a
daily basis. No deductions of any kind from any payment becoming due to Plantex
may be made in the absence of an official credit memorandum from Plantex
authorizing the deduction, which Plantex shall promptly issue when Biovail is
entitled to the deduction in accordance with this Agreement.


 


2.3                                 Within {***}† of the date hereof, and,
thereafter, by the fifteenth (15th) day of each successive calendar month,
Biovail shall provide Plantex with a good faith, {***}† rolling forecast of its
requirements of API by month. The first {***}† of each {***}† rolling forecast will
constitute a firm purchase order (“Firm Purchase Order”) for the API indicated
for those months. Plantex shall confirm to Biovail within {***}† of its receipt of each such
forecast that Plantex has the capacity to provide the quantities of API set out
in that forecast. Plantex shall supply (a) the quantities set forth on
each Firm Purchase Order and (b) those additional amounts that may be
ordered in excess of the forecasted amounts constituting Firm Purchase Orders
hereunder, provided that Plantex confirms and accepts orders for those
additional amounts in writing within {***}† of Plantex’s receipt thereof.
The Firm Purchase Orders for each of the first {***}† of each forecast may not be
for an amount less than {***}† or greater than {***}† of the immediately preceding
forecast for each such {***}†; provided, however, that Plantex shall use
commercially reasonable efforts to fill any Firm Purchase Order to the extent
of quantities exceeding {***}† of the immediately preceding forecast.


 


2.4                                 If any term or
condition contained in any purchase order is inconsistent with this Agreement
then the terms and conditions provided in this Agreement will control. No
additional term or condition set forth in any purchase order will be binding
upon Plantex unless agreed to in writing by Plantex.


 






† Represents
material which has been redacted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment pursuant
to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


 

















 


2.5                                 During any period
during this Agreement in which Plantex, for any reason, including, without
limitation, force majeure as defined in Section 12 hereof, either fails to
confirm to Biovail that it has the capacity to provide the quantities of API
set out in a forecast delivered pursuant to Section 2.3, or fails to
supply the requisite quantities of API within sixty (60) days after the date of
delivery specified by Biovail in any Firm Purchase Order or any other purchase
order accepted and confirmed in writing by Plantex, then Biovail may, as its
sole remedy, obtain any such quantities set out in any such forecast or
purchase order through an alternate supplier. Any such cover purchases shall be
credited against Biovail’s purchase requirements set forth in Section 2,1.
In the event Plantex regains its ability to resume supplying hereunder, Biovail’s
right to cover shall terminate immediately upon the delivery by Plantex to
Biovail of written notice thereof, provided, however, that Biovail may .accept
and use any API ordered by Biovail from an alternate supplier before the date
of such notice.


 


2.6                                 Biovail, its
Affiliates and any of their contract manufacturers shall use the API only for
the manufacture of Finished Products for sale in the Territory. Biovail, its
Affiliates and any of their contract manufacturers are prohibited from
reselling or otherwise transferring all or any portion of API not used in the
manufacture of Finished Products for sale in the Territory to any other Person.


 


2.7                                 Plantex or its
Affiliate shall maintain with the FDA a valid DMF for the API that is in full
compliance with applicable FDA requirements. Provided that all representations
and warranties of Biovail shall remain true and all covenants and undertakings
of Biovail are being fully complied with, Biovail shall have the right to
reference the DMF in its drug applications for any Finished Product. All API
will be manufactured in accordance with cGMP and conform to the Specifications.


 


2.8                                 Biovail shall
keep and maintain complete and accurate records and books of account in
sufficient detail and form so as to enable Plantex to verify compliance by
Biovail of its purchase requirement obligations in accordance with Section 2.1
hereof. Biovail shall permit those records and books of account to be examined
by independent certified public accountant of selected by Plantex, no more than
once each calendar year (unless during any calendar year a misstatement is
discovered in an audit, in which event an additional audit may be conducted during
such calendar year), and only to the extent necessary for Plantex to verify the
information required by this Section 2.8. Said independent certified
public accountant shall treat as confidential and shall not disclose to Plantex
any information from Biovail except for information which must be given to that
party pursuant to any provision of this Agreement. This examination must be
during normal business hours, upon not less than twenty (20) days’ prior
written notice, and at the expense of Plantex; provided, however, that if the
examination establishes that Biovail failed to comply with the purchase
obligations set forth in Section 2.1 hereof, Biovail shall be responsible
for the reasonable expenses of such examination. All amounts determined to be
due that were not paid must be paid upon demand, with interest calculated
thereon from the date that the payment 


 

















 


should have been made, such
interest calculated at the rate of {***}† plus the U.S. prime rate
(but in no event greater than the maximum rate permitted by law) in effect on
the date that the payment should have been made, as published in The Wall
Street Journal, Eastern U.S. Edition, calculated on a daily basis. The books
and records subject hereof will be deemed Confidential Information and subject
to the provisions of Section 13 of this Agreement. The right to audit
under this Section 2.8 shall survive termination of this Agreement for a
period of two (2) years.


 


3.                                      RIGHT
OF FIRST OFFER


 


From
and after the Effective Date, with respect to any finished dose pharmaceutical
product that Biovail has under current development or that it elects to develop
during the Term, Biovail shall grant Plantex the first opportunity to act as
the primary active pharmaceutical ingredient supplier for such product(s) in
and for the Territory.


 


4.                                      DELIVERY:
RISK OF LOSS


 


Unless
agreed otherwise in writing by the Parties, API will be delivered CIP (per
Incoterms 2000) San Juan, Puerto Rico or such other port as may be directed
from time to time by Biovail. All deliveries from Plantex will be made on or
before the delivery date specified on each Firm Purchase Order or the
additional purchase orders accepted and confirmed in writing by Plantex.


 


5.                                      PRODUCT
WARRANTIES; ACCEPTANCE AND CLAIMS


 


5.1                                 Plantex
represents and warrants that at the time of sale and shipment of API by Plantex
hereunder, that such API (a) will conform to the Specifications and (b) will
have been manufactured, stored and packaged for shipment in accordance with
cGMP in effect at the time thereof. THE FOREGOING WARRANTY IS EXCLUSIVE AND IN
LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO,
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.


 


5.2                                 Biovail shall
have the right to reject all or part of any shipment of API it orders and
receives from Plantex on the ground that it fails to conform with the warranty
contained in Section 5.1 herein, provided that (a) Biovail delivers
written notice to Plantex within thirty (30) days from the date of receipt of
such shipment and (b) Plantex confirms such nonconformance ire writing
within thirty (30) days after receipt of Biovail’s notice. In the event of the
foregoing, Biovail may return the nonconforming API in accordance with Section 5.3;
otherwise, all shipments of API shall be deemed accepted by Biovail. If a
dispute arises as to whether the API conforms to Specifications, which dispute
is not resolved within thirty (30) days 


 






† Represents
material which has been redacted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment pursuant
to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


 

















 


of the delivery by Biovail of
the notice of nonconformance, then the matter (along with related samples,
batch records or other evidence, as appropriate) shall be submitted to an
independent testing laboratory agreed to by each of Biovail and Plantex. The
determination of the independent testing laboratory will be binding upon the
Parties. If it is determined that the nonconformance is due to damage to API (x) caused
by Biovail or its agents or (y) that occurs subsequent to delivery of the
API by Plantex. Plantex will have no liability to Biovail with respect to such
nonconformance and the cost of any testing and evaluation by the testing
laboratory will be borne by Biovail. If it is determined that the
nonconformance is caused by Plantex, then Plantex will credit Biovail’s account
for the price invoiced for the portion of nonconforming API (or if payment
therefor has previously been made by Biovail, pay Biovail the amount of such
credit or offset the amount thereof against other amounts then due to Plantex)
and the cost of any testing and evaluation by the testing laboratory will be
born by Plantex.


 


5.3                                 Plantex shall
accept for return and replacement any API manufactured and supplied to Biovail
under this Agreement that does not conform with the warranty set forth in Section 5.1
above and for which proper notice has been given and nonconformance of which
has been confirmed by Plantex. This will be the recipient’s sole remedy for
claims that any shipment of API failed to comply with such warranties. It is
understood that the foregoing limited remedy applies only to the failure to
conform to the warranty contained in Section 5.1. All returns of API with
obvious defects must be in the original manufactured condition. Plantex will
pay reasonable return freight and shipping charges, and shall assume the risk
of loss in transit associated with those returns.


 


5.4                                 The provisions of
paragraph 5.2 do not apply to any deficiencies in the Product not reasonably
detectable within thirty (30) days of actual receipt of the Product by Biovail
or its Affiliate. Biovail shall notify Plantex of any such deficiencies within
thirty (30) days after they come to the attention of Biovail or its Affiliate.


 


5.5                                 To the extent
that Biovail has new formulations of Finished Products in development as of the
Effective Date or thereafter develops new formulations of Finished Products, it
shall develop appropriate specifications for the API required for the
manufacture of such Finished Products which it shall furnish to Plantex as
promptly as they are finalized. Plantex shall respond to any such
specifications within sixty (60) days of their being delivered by Biovail to
confirm whether or not it will be able to supply API in accordance with such
specifications. If Plantex does so confirm the specifications, they shall be
deemed “Specifications” for all purposes of this Agreement and deemed added to
this Agreement. If Plantex does not so confirm its ability to meet such
specifications, or does not actually meet the Specifications as so agreed,
Biovail may obtain API for such new Finished Products from an alternate
supplier, and the quantities of API obtained from such other supplier for those
new formulations shall not be taken into account in determining Biovail’s
compliance with Section 2.1.


 

















 


5.6                                 If at any time
during the Term of this Agreement Plantex is unable to supply to Biovail the
requisite quantities of API meeting the warranty set out in Section 5.1,
Biovail may obtain any such quantities from an alternate supplier.


 


6.                                      ADDITIONAL
REPRESENTATIONS, WARRANTIES AND COVENANTS


 


6.1                                 Biovail hereby
represents, warrants and covenants to Plantex that (a) Biovail is a
corporation duly organized and existing under the laws of its jurisdiction of
incorporation, (b) it has the requisite authority to enter into this
Agreement and to perform its obligations hereunder, (c) this Agreement is
a legal, valid and binding agreement of Biovail, enforceable against Biovail in
accordance with its terms, (d) Biovail is not aware of any contractual or
other restriction, limitation or condition which might affect adversely its
ability to perform hereunder, (e) Biovail, its Affiliates and any contract
manufacturers are in material compliance with all laws and regulations
applicable to conduct of their business; (f) the importation, storage,
manufacture, use, sale and/or distribution of any or all of the Finished
Products shall not (1) violate any applicable laws or regulations nor (2) infringe
upon the patent, trade secret or proprietary right of any third party; and (g) its
current annual requirements for the API are approximately {***}†.


 


6.2                                 Plantex hereby
represents, warrants and covenants to Biovail that (a) it is a corporation
amalgamated, organized and existing under the laws of the State of New Jersey, (b) it
has the corporate authority to enter into this Agreement and to perform its
obligations hereunder, (c) this Agreement is a legal, valid and binding
agreement of Plantex enforceable against Plantex in accordance with its terms, (d) it
is not aware of any contractual or other restriction, limitation or condition
which might affect adversely its ability to perform hereunder and (e) it
is in material compliance with all applicable laws and regulations.


 


6.3                                 The
representations, warranties, covenants and undertakings contained in this
Agreement are continuous in nature and shall be deemed to have been given by
each Party at execution of this Agreement and at each stage of performance
hereunder.


 


7.                                      REGULATORY
INSPECTIONS AND COMMUNICATIONS


 


Biovail
will promptly deliver to Plantex all reports, data, information and
correspondence received by it from the FDA or any other Regulatory Authority
with respect to the API and any cGMP issues relating thereto. In addition,
Biovail will promptly deliver to Plantex any written response, information,
data or correspondence delivered by it to the FDA or any other Regulatory
Authority with respect to the API. Each of the Parties agrees to cooperate to
the extent reasonably requested by the other in connection with any
communications with the FDA or any other Regulatory Authority.


 






† Represents
material which has been redacted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment pursuant
to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.


 

















 


8.                                      COMPLAINT
HANDLING AND ADVERSE DRUG REACTION REPORTS


 


8.1                                 Plantex and
Biovail shall provide prompt notice to the other of any information concerning
side effects, injury, toxicity or sensitivity reactions received by it which
may be associated with the Finished Products or the API. Biovail shall be responsible
for all adverse drug event reporting and responding to all adverse drug reports
received from lay persons and/or health care professionals regarding the
Finished Products.


 


8.2                                 Copies of
complaints regarding the Finished Products or the API received by either Party
shall be sent promptly by facsimile to the other. Biovail shall investigate all
complaints associated with the manufacturing of the Finished Products and shall
provide a written summary to Plantex of all such investigations, as well as a
prompt written response to the complainant, with a copy to Plantex.


 


9.                                      RECALLS
AND WITHDRAWALS


 


To
the extent permitted or required by law, any decision by Biovail to recall,
withdraw or cease distribution of any Finished Product as a result of a violation
of applicable law or regulation, or because the Finished Product presents a
possible safety risk, shall be made after consultation between Plantex and
Biovail to minimize the business and legal risk to both Parties and to assure
compliance by the Parties with the requirements of applicable laws and
regulations. Biovail shall indemnify and hold harmless Plantex against any and
all reasonable costs and expenses which Plantex may incur as a result of any
recall of Finished Products unless, however, such recall is due to a defect in
the API, in which case Plantex shall indemnify and hold harmless Biovail
against any and all reasonable costs and expenses which Biovail may incur as a
result of such recall.


 


10.                               INDEMNIFICATION
AND LIMITATIONS


 


10.1                           Plantex shall
indemnify, defend, save and hold Biovail and each of its Affiliates and their
respective officers, directors, employees and agents, harmless from and against
Loss or Losses payable to third parties in connection with any and all Actions
by third parties resulting from, or arising out of any material breach of any
warranty or material non-fulfillment or non-performance by Plantex of any
agreement, covenant or obligation of Plantex under this Agreement. Plantex will
not be liable hereunder for any Losses resulting from any settlement of any
claim, litigation or proceeding effected without its consent, which consent
shall not be unreasonably withheld.


 


10.2                           Biovail shall
indemnify, defend, save and hold Plantex and each of its Affiliates and their
respective officers, directors, employees and agents harmless from and against
Loss or Losses payable to third parties in connection with any and all Actions
by third parties resulting from, or arising out of (a) any material breach
of any representation or warranty herein pertaining to Biovail or material
non-fulfillment or non-performance by Biovail of any covenant or undertaking
made 


 

















 


herein; (b) any actual or
alleged defect in any Finished Product not resulting from any breach of this
Agreement by Plantex; (c) any actual or alleged infringement or violation
of any patent, trade secret or proprietary rights of any third party arising
out of the storage, manufacture, use, sale and/or distribution of any Finished
Product, or (d) any enforcement action by a Regulatory Authority relating
to any Finished Product resulting from the failure by Biovail to comply with
applicable laws, rules, orders or regulations. Biovail will not be liable
hereunder for any Loss or Losses resulting from any settlement of any claim, litigation
or proceeding effected without its consent, which consent shall not be
unreasonably withheld.


 


10.3                           EXCEPT AS
EXPRESSLY PROVIDED FOR IN SECTION 10.1 AND 10.2 REGARDING INDEMNIFICATION
WITH RESPECT TO LOSSES, NEITHER PLANTEX NOR BIOVAIL (NOR ANY OF THEIR
RESPECTIVE AFFILIATES) SHALL BE LIABLE TO THE OTHER UNDER ANY PROVISION OF THIS
AGREEMENT OR UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
OF ANY KIND OR NATURE.


 


10.4                           The terms and
conditions of this Article 10 shall survive any termination of this
Agreement.


 


10.5                           Upon the
occurrence of an event that requires indemnification under this Agreement, the
Indemnified Party will give prompt written notice to the Indemnifying Party
providing reasonable details of the nature of the event and basis of the
indemnity claim. The Indemnifying Party will then have the right, at its
expense and with counsel of its choice, to defend, contest, or otherwise
protect against any such Action.  The
Indemnified Party will also have the right, but not the obligation, to
participate, at its own expense in the defense thereof with counsel of its
choice. The Indemnified Party shall cooperate to the extent reasonably
necessary to assist the Indemnifying Party in defending, contesting or
otherwise protesting against any Action, provided that the reasonable cost in
doing so will be paid by the Indemnifying Party. If the Indemnifying Party
fails within thirty (30) days after receipt of notice to notify the Indemnified
Party of its intent to defend, or to defend, contest or otherwise protect
against the Action or fails to diligently continue to provide the defense after
undertaking to do so, the Indemnified Party will have the right upon ten (10) days
prior written notice to the Indemnifying Party to defend. settle and satisfy
any Action and recover the costs of the same from the Indemnifying Party.


 


10.6                           In the event that
in determining the respective obligations of indemnification under this Article 10,
it is found that the fault of the Indemnified Party or its respective
Affiliates, contributes to any Losses for which the Indemnifying Party is
otherwise liable hereunder, then each Party shall be responsible for that
portion of the indemnifiable Losses to which its fault contributed.


 

















 


10.7                           Without limiting
its obligations hereunder, Biovail shall maintain, commencing with the
Effective Date and continuing throughout the Term, sufficient product liability
insurance coverage to satisfy its obligations hereunder. Biovail shall, upon
request, provide to Plantex certificates of insurance, evidencing such
insurance.


 


10.8                           Without limiting
its obligations hereunder, Plantex shall maintain, commencing with the
Effective Date and continuing throughout the Term, sufficient product liability
insurance coverage to satisfy its obligations hereunder. Plantex shall, upon
request, provide to Biovail certificates of insurance, evidencing such
insurance.


 


11.                               TERM
AND TERMINATION


 


11.1                           This Agreement will
terminate upon the occurrence of any of the following events or conditions
which termination will automatically occur where termination by a specified
Party is not indicated and will occur by action of the specified Party where so
indicated:


 


11.1.1                                               The expiration of
the Term;


 


11.1.2                                               The breach of any
representation or warranty made hereunder or the non-performance of any
covenant, undertaking or any other obligation made hereunder by either Party
that is not cured (a) within thirty (30) days from the date of written
notice delivered to the Party in breach in the case of a payment default, and (b) within
ninety (90) days from the date of written notice in all other cases, provided,
however, that only the aggrieved Party may terminate this Agreement pursuant to
this Section 11.2.2;


 


11.1.3                                               The mutual
written agreement of the Parties to this Agreement;


 


11.1.4                                               Pursuant to the
provisions of Section 12; and


 


11.1.5                                               The filing of a
bankruptcy petition by or against Plantex or Biovail or the appointment of a receiver
for the assets or business of Plantex or Biovail that is not dismissed within
sixty (60) days from the date of such filing or appointment.


 


11.2                           Upon termination
of this Agreement, all rights and obligations will cease to exist except for (a) the
payment of unpaid invoices due, (b) the recovery by a Party hereto of
damages caused by a breach of any representation or warranty contained in this
Agreement or the nonperformance by either Party of any covenant or undertaking
made hereunder, (c) the rights and obligations of the Parties under Article 10
of this Agreement and (d) any other term or condition that by its term
survives termination.


 

















 


12.                               FORCE
MAJEURE


 


Except
for the obligation of Plantex or Biovail to make payments to the other pursuant
to this Agreement (that will not be deferred or extended for any reason),
neither Plantex nor Biovail will be responsible to the other for any failure to
perform or delay in performing if the failure or delay is due to any strike,
riot, civil commotion, sabotage, embargo, war or act of God or other cause
beyond its reasonable control. Neither Party will be responsible for any
failure to perform or delay in performing due to inability to obtain deliveries
where the inability is caused by its supplier. Notwithstanding the foregoing,
if any delay in the performance by either Party of its obligations under this
Agreement shall continue for a period of ninety (90) days or more, then the
Party not suffering the force  majeure event may terminate this
Agreement by written notice to the other Party and each of Plantex and Biovail
shall be relieved from all duties and obligations under this Agreement, except
those duties and obligations accruing prior to such termination.


 


13.                               CONFIDENTIALITY


 


13.1                           In carrying out
the terms of this Agreement it may be necessary that one Party disclose to the
other certain information, which is considered by the disclosing Party to be
proprietary and of a confidential nature. As used herein “Confidential
Information” means any and all information, know-how and data, technical or
non-technical, concerning any finished drug product or active pharmaceutical
ingredient, its manufacture, marketing and sale, that is disclosed under this
Agreement as set forth below and that Biovail or Plantex, as the case may be,
considers to be and treats as proprietary and confidential. Confidential
Information includes, but shall not be limited to plans, processes,
compositions, formulations, specifications, samples, systems, techniques,
analyses, production and quality control data, testing data, marketing and
financial data, and such other information or data relating to any finished
drug product or active pharmaceutical ingredient, or its manufacture, marketing
or sale.


 


13.2                           The recipient of
any Confidential Information shall not use it for any purpose other than for
purposes of performing its obligations under this Agreement. The Party
receiving any Confidential Information will divulge it only to those of its
officers, directors, employees, advisors and Affiliates (and such Affiliates’
officers, directors, employees and advisors) who have a need to know it as a
part of the receiving Party’s obligations hereunder and said officers,
directors, employees, advisors and Affiliates (and such Affiliates’ officers, directors,
employees and advisors) shall hold the information in confidence pursuant to
this Agreement. The recipient of any Confidential Information shall not
disclose it to any third party, except as otherwise contemplated in this
subsection, without the written consent of the disclosing Party.


 


13.3                           The obligations
of confidentiality as provided herein will terminate seven (7) years from
the expiration or termination of this Agreement and will impose no obligation
upon the recipient of any Confidential Information with respect to any portion
of the received information that (a) was known to or in the possession of 


 

















 


the recipient prior to the
disclosure; or (b) is or becomes publicly known through no fault
attributable to the recipient; or (c) is provided to the recipient from a
source independent of the disclosing Party that is not subject to a
confidential or fiduciary relationship with the disclosing Party concerning the
information; or (d) is generated by the recipient independently of any
disclosure from the disclosing Party; or (e) is required by law to be
disclosed to government officials who shall be informed of the confidential
nature of such information.


 


13.4                           Upon expiration
or earlier termination of this Agreement, the recipient of any Confidential
Information shall, as the disclosing Party may direct in writing, either
destroy or return to the disclosing Party all Confidential Information
disclosed together with all copies thereof, provided, however, the recipient
may retain one archival copy thereof for the purpose of determining any
continuing obligations of confidentiality.


 


13.5                           The terms of this
Article 13 will survive termination of this Agreement.


 


14.                               GENERAL
PROVISIONS


 


14.1                           This Agreement
shall be binding upon each of the Parties hereto and each of their respective
successors and assigns, if any.


 


14.2                           Neither Party may
assign any of its rights or obligations under this Agreement without the prior
written consent of the other Party, which consent may not be unreasonably
withheld or delayed. Such consent may be conditioned upon the agreement of the
assigning Party to remain primarily liable for performance of all obligations
of the assignee. Notwithstanding the foregoing, a Party may assign all of its
rights and obligations under this Agreement to an Affiliate of a Party upon
written notice thereof to the other Party. Any attempt to assign this Agreement
in violation of the provisions set forth herein will be deemed a default by the
assigning Party under this Agreement and null and void.


 


14.3                           Any notice,
request, instruction or other communication required or permitted to be given
under this Agreement must be in writing and must be given by sending the notice
properly addressed to the other Party’s address shown below (or any other
address as either Party may indicate by notice in writing to the other from
time to time) (a) by hand or by prepaid registered or certified mail,
return receipt requested, (b) via telecopy, facsimile or telegram, or (c) via
nationally recognized overnight courier.


 


	
  If to Plantex:

  	
  Plantex USA Inc.

  
	
   

  	
  Two University Plaza, Suite 305 Hackensack, NJ

  
	
   

  	
  07601

  
	
   

  	
  Attention: President

  
	
   

  	
  Fax Number: 201-343-3833

  
	
   

  	
   

  
	
  with a copy to:

  	
  Plantex USA Inc.

  
	
   

  	
  Two University Plaza, Suite 305 Hackensack, NJ

  



 

















 


	
   

  	
  07601

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Fax Number: 201-343-3833

  
	
   

  	
   

  
	
  if to Biovail

  	
  BIOVAIL LABORATORIES INCORPORATED

  
	
   

  	
  Chelston Park, Building 2

  
	
   

  	
  Collymore Rock, St. Michael BH1

  
	
   

  	
  Barbados, West Indies

  
	
   

  	
  Attention: President

  
	
   

  	
  Telephone:

  
	
   

  	
  Facsimile: (246) 437-7085

  
	
   

  	
   

  
	
  with a copy to

  	
  BIOVAIL CORPORATION

  
	
   

  	
  7150 Mississauga Road

  
	
   

  	
  Mississauga, Ontario L5N 8M5

  
	
   

  	
  Attention: General Counsel

  
	
   

  	
  Telephone: (905) 286-3070

  
	
   

  	
  Facsimile:
  (905) 286-3071

  



 


All
such notices shall be deemed given when received.


 


14.4                           Except to the
extent required by law or deemed appropriate by legal counsel to comply with
securities laws, including the furnishing of a press release and the filing of
such documents and information with the U.S. Securities and Exchange Commission
as may be required by federal securities laws and the filing of any report,
statement or document required by any other federal or state regulatory body,
neither Plantex nor Biovail will publish, disclose or otherwise announce the
existence of this Agreement or the terms hereof with out the consent of the
other Party, which consent will not be unreasonably withheld.


 


14.5                           Either Parties’
failure to terminate or seek redress for a breach of, or to insist upon strict
performance of any term, covenant, condition or provision contained in this Agreement
will not prevent a similar subsequent act from constituting a breach of this
Agreement.


 


14.6                           This Agreement
will be governed and construed in accordance with the laws of the State of New
Jersey, except for its conflict of law provisions


 


14.7                           Plantex and
Biovail will at all times act as independent parties without the right or
authority to bind the other with respect to any agreement, representation or
warranty made with or to any third party. Except as otherwise stated herein,
Plantex and Biovail each will be responsible for all costs, expenses, taxes and
liabilities arising from the conduct of its own business, as well as from the
activities of its officers, directors, agents or employees, and each will hold
harmless and indemnify the other from those obligations.


 


14.8                           This Agreement
contains the entire and only agreement between the Parties with respect to the
manufacture and sale of the API and no oral statements or 


 

















 


representations or written
matter not contained in this Agreement will have any force or effect. This
Agreement may not be amended or modified in any way except by writing executed
by authorized representatives of both Parties.


 


14.9                           If any portion of
this Agreement is determined to be illegal or otherwise unenforceable by agreement
of the Parties, by an arbitrator, by a court of competent jurisdiction or by an
administrative agency of competent jurisdiction, that section, to the extent
permitted by law, shall be treated as deleted from this Agreement and the
remaining portions of this Agreement will continue to be in full force and
effect according to the terms hereof.


 


14.10                     The Parties agree
as and from the Effective Date, this Agreement shall supersede the Supply
Agreement between Biovail and Plantex’s Affiliate, ABIC Ltd., dated June 6,
1996, as amended (“Abic Agreement”), and except for any rights of
indemnification thereunder or payment obligations for amounts due thereunder,
neither Party the Abic Agreement shall have any further rights or obligations
thereunder. Promptly following the execution of this Agreement, Plantex shall
arrange with ABIC Ltd. to sign such instrument as either party to the Abic
Agreement shall deem necessary and appropriate to effectuate the provisions of
this section.


 


14.11                     This Agreement
may be executed in one or more counterparts, each of which shall constitute an
original and all of which, when taken together, shall constitute one agreement.


 

















 


IN WITNESS WHEREOF, the Parties have executed this Agreement on the date written at the
beginning of this Agreement.


 


 


	
  PLANTEX USA INC.

  	
   

  	
  BIOVAIL LABORATORIES 

  
	
   

  	
   

  	
   

  	
  INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ George Suokas

  	
   

  	
  By:

  	
  (signed)

  
	
   

  	
  Name: George Suokas

  	
   

  	
   

  	
  Name:

  
	
   

  	
  Title: President

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Cheryl L. Bohnel

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Cheryl L. Bohnel

  	
   

  	
   

  	
   

  
	
   

  	
  Title: Dir. of Finance