TO SUCH LINE
EXTENSION.
AFTER RECEIPT OF SUCH NOTICE, COMPANY AND DISTRIBUTOR SHALL
NEGOTIATE EXCLUSIVELY AND IN GOOD FAITH FOR A PERIOD OF NINETY (90) DAYS
THEREAFTER TO MUTUALLY AGREE ON THE TERMS AND CONDITIONS FOR THE DISTRIBUTION OF
SUCH LINE EXTENSION.
THE TERMS FOR LINE EXTENSIONS SHALL INCLUDE BUT NOT BE
LIMITED TO THE FOLLOWING:
(I)
UPFRONT MILESTONE PAYMENTS:
THERE WILL BE NO UPFRONT PAYMENTS
FOR LINE EXTENSIONS;
(II)
LAUNCH MILESTONE PAYMENTS:
FOR LINE EXTENSIONS, LAUNCH MILESTONE
PAYMENTS, IF ANY, WILL BE DISCUSSED AND DETERMINED PRIOR TO SIGNING OF THE
DEFINITIVE AGREEMENT;
(III)
CUMULATIVE NET SALES MILESTONES PAYMENTS:
FOR LINE EXTENSIONS,
CUMULATIVE NET SALES MILESTONES, IF ANY, WILL BE DISCUSSED AND DETERMINED PRIOR
TO SIGNING OF THE DEFINITIVE AGREEMENT; AND
(IV)
LINE EXTENSION SUPPLY PRICING:
PRICES PAYABLE BY DISTRIBUTOR TO
COMPANY FOR LINE EXTENSIONS SHALL BE FURTHER DISCUSSED AND MUTUALLY AGREED UPON
BY THE PARTIES PRIOR TO THE LAUNCH DATE FOR SUCH LINE EXTENSION.
PROMPTLY
FOLLOWING THE FILING FOR REGULATORY APPROVAL FOR ANY LINE EXTENSION, THE COMPANY
AND DISTRIBUTOR SHALL ENTER INTO GOOD FAITH DISCUSSIONS TO AGREE ON THE SUPPLY
PRICING FOR ANY SUCH LINE EXTENSION.
(D)
IN THE EVENT THAT THE PARTIES ARE NOT ABLE TO REACH AGREEMENT FOR
THE DISTRIBUTION RIGHTS FOR ANY LINE EXTENSION PURSUANT TO SECTION 3.4(C) WITHIN
SUCH NINETY (90) DAY PERIOD, COMPANY MAY GRANT DISTRIBUTION RIGHTS TO SUCH LINE
EXTENSION TO A THIRD PARTY; PROVIDED HOWEVER, THAT PRIOR TO GRANTING SUCH
DISTRIBUTION RIGHTS TO A THIRD PARTY, DISTRIBUTOR HAS BEEN GIVEN A FINAL OPTION
TO ACQUIRE SUCH DISTRIBUTION RIGHTS ON THE SAME TERMS OFFERED TO THE THIRD
PARTY.
(E)
FOR THE SAKE OF CLARITY, DISTRIBUTOR'S OPTION OF FIRST NEGOTIATION
FOR ANY DEFINITIVE AGREEMENTS FOR THE AFOREMENTIONED LINE EXTENSIONS SHALL
EXPIRE, ON A LINE EXTENSION-BY-LINE EXTENSION BASIS, IF SUCH AGREEMENTS ARE NOT
EXECUTED WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER RECEIPT OF REGISTRATION FOR
SUCH LINE EXTENSION.
4.
PURCHASE OF PRODUCT
4.1.
MANUFACTURING OBLIGATIONS.
COMPANY SHALL MANUFACTURE, OR HAVE
MANUFACTURED (BY SUCH THIRD PARTY MANUFACTURER AS MAY BE MUTUALLY AGREED UPON
FROM TIME TO TIME BY THE PARTIES; ANY SUCH THIRD PARTY MANUFACTURER, A "CONTRACT
MANUFACTURER"), AND SELL TO DISTRIBUTOR, AND DISTRIBUTOR SHALL PURCHASE FROM
COMPANY, THOSE QUANTITIES OF PRODUCT ORDERED BY DISTRIBUTOR PURSUANT TO PURCHASE
ORDERS SUBMITTED FROM TIME TO TIME IN ACCORDANCE WITH THIS AGREEMENT.
IF
COMPANY USES A CONTRACT MANUFACTURER TO SUPPLY PRODUCT TO DISTRIBUTOR UNDER THIS
AGREEMENT, SUCH CONTRACT MANUFACTURER SHALL BE REQUIRED TO AGREE IN WRITING FOR
THE BENEFIT OF DISTRIBUTOR AS A THIRD PARTY BENEFICIARY TO BE BOUND BY THE
APPLICABLE TERMS AND CONDITIONS OF THIS AGREEMENT RELATING TO THE MANUFACTURE
AND SUPPLY OF PRODUCT, INCLUDING WITHOUT LIMITATION SECTIONS 2.3, 4, 6 AND 8.
NO ARRANGEMENT WITH ANY CONTRACT MANUFACTURER SHALL RELIEVE COMPANY
12
OF ANY OBLIGATION IT OTHERWISE WOULD HAVE UNDER THIS AGREEMENT, INCLUDING
COMPANY'S OBLIGATION TO SUPPLY PRODUCT TO DISTRIBUTOR, AND COMPANY SHALL BE
RESPONSIBLE AND LIABLE TO DISTRIBUTOR FOR ANY BREACH OF ANY SUCH OBLIGATIONS BY
COMPANY OR ANY CONTRACT MANUFACTURER.
4.2.
HOW SUPPLIED.