(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2008 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware
|
65-0403311 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer Identification No.) | |
30831 Huntwood Avenue, Hayward, CA
(Address of principal executive offices) |
94544
(Zip Code) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
1
5
55
56
Item 1.
Business
2
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53 ANDAs approved by the FDA, which include generic versions of
brand name pharmaceuticals such as
Brethine
®
,
Florinef
®
,
Minocin
®
,
Claritin-D
®
12-hour,
Claritin-D
®
24-hour,
Wellbutrin
SR
®
and
Prilosec
®
.
24 applications pending at the FDA, including two tentatively
approved (
i.e.
, satisfying substantive FDA requirements
but remaining subject to statutory pre-approval restrictions),
that address approximately $13.5 billion in recent
12 month U.S. product sales.
40 products in various stages of development for which
applications have not yet been filed.
3
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Generic of
Trental
®
Norflex
®
Prilosec
®
Minocin
®
Betapace
®
Brethine
®
Florinef
®
Flumadine
®
Rilutek
®
Mestinon
®
N/A
Aralen
®
Urispas
®
Claritin
Reditab
®
Lofibra
®
Claritin-D
12-hr
®
Android
®
Wellbutrin
SR
®
Zyban
®
Claritin-D
®
24-Hour
Declomycin
®
SinemetCR
®
ProAmatine
Glucophage
XR
®
OxyContin
®
Wellbutrin
SR
®
Dantrium
®
Agrylin
®
Rimadyl
®
Glucophage
XR
®
OxyContin
®
Salagen
®
Colestid
®
Colestid
®
4
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Generic of
Urecholine
®
Ditropan
XL
®
Wellbutrin
XL
®
Corzide
®
Ditropan
XL
®
Xanax
XR
®
Lopid
®
Persantine
®
N/A
Mysoline
®
Phenergan
®
Lofibra
®
Didrex
®
Wellbutrin
XL
®
Prilosec
®
Solodyn
®
(1)
Not currently marketed.
(2)
Multiple products filed under same ANDA, including (i) 2a:
Oxybutynin Chloride products, (ii) 2b: Bupropion Hydrochloride
products, and (iii) 2c: Omeprazole products.
Generic of
Amrix
®
Doryx
®
Depakote
ER
®
Allegra-D
®
Concerta
®
Opana
ER
®
Adderall
XR
®
Flomax
®
Detrol
LA
®
Ultram
ER
®
Effexor
XR
®
Cymbalta
®
Table of Contents
the ability to introduce generic versions of products promptly
after a patent expires;
price;
product quality;
customer service (including maintenance of inventories for
timely delivery);
the ability to identify and market niche products.
6
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Years Ended December 31
2008
2007
2006
($ in 000s)
$
40,947
14
%
$
42,480
13
%
$
33,910
18
%
$
40,831
14
%
$
118,634
35
%
$
2,899
2
%
$
81,778
28
%
$
161,114
48
%
$
36,809
20
%
$
15,946
5
%
$
11,866
4
%
$
13,782
7
%
Prilosec
®
10, 20 and 40 mg delayed released capsules
Wellbutrin
SR
®
100 and 150 mg extended release tablets
Zyban
®
150 mg extended release tablets
Claritin-D
®
12-hour
120 mg
12-hour
extended release tablets
Claritin-D
®
24-hour
240 mg
24-hour
extended release tablets
Claritin
Reditabs
®
10 mg orally disintegrating tablets
Ditropan
XL
®
5, 10 and 15 mg extended release tablets
Glucophage
XR
®
500 mg extended release tablets
Allegra-D
®
60/120 mg extended release tablets
Concerta
®
18, 27, 36 and 54 mg extended release tablets
Wellbutrin
XL
®
150 and 300 mg extended release tablets
7
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8
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Upfront and
Aggregate
Milestone
Upfront
Milestone
Payments
Initial Date
Payment
Payments
Received
(Unaudited and $ in 000s)
June 2002
$
2,250
$
2,250
$
4,500
June 2002
$
350
$
4,050
$
2,000
9
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10
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11
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12
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55
Senior Vice President, Finance, and Chief Financial Officer
57
Senior Vice President, Operations
46
President, Global Pharmaceuticals Division
56
President, Impax Pharmaceuticals Division
13
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Item 1A.
Risk
Factors
14
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15
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obtain FDA approval of our products;
successfully launch new products;
prevail in patent infringement litigation in which we are
involved;
continue to generate or obtain sufficient capital on acceptable
terms to fund our operations; and
comply with the many complex governmental regulations that deal
with virtually every aspect of our business activities.
16
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17
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the availability of alternative products from our competitors;
the prices of our products relative to those of our competitors;
the timing of our market entry;
the ability to market our products effectively at the retail
level; and
the acceptance of our products by government and private
formularies.
18
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proprietary processes or delivery systems;
larger research and development and marketing staffs;
larger production capabilities in a particular therapeutic area;
more experience in preclinical testing and human clinical trials;
more experience in obtaining required regulatory approvals,
including FDA approval;
more products; or
more experience in developing new drugs and financial resources,
particularly with regard to brand manufacturers.
19
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20
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delays in patient enrollment, and variability in the number and
types of patients available for clinical trials;
regulators or institutional review boards may not allow us to
commence or continue a clinical trial;
our inability, or the inability of our partners, to manufacture
or obtain from third parties materials sufficient to complete
our clinical trials;
delays or failure in reaching agreement on acceptable clinical
trial contracts or clinical trial protocols with prospective
clinical trial sites;
risks associated with trial design, which may result in a
failure of the trial to show statistically significant results
even if the product candidate is effective;
Difficulty in maintaining contact with patients after treatment
commences, resulting in incomplete data;
poor effectiveness of product candidates during clinical trials;
safety issues, including adverse events associated with product
candidates;
the failure of patients to complete clinical trials due to
adverse side effects, dissatisfaction with the product
candidate, or other reasons;
governmental or regulatory delays or changes in regulatory
requirements, policy and guidelines; and
varying interpretation of data by the FDA or foreign regulatory
agencies.
21
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22
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greater possibility for disruption due to transportation or
communication problems;
the relative instability of some foreign governments and
economies;
interim price volatility based on labor unrest, materials or
equipment shortages, export duties, restrictions on the transfer
of funds, or fluctuations in currency exchange rates; and
uncertainty regarding recourse to a dependable legal system for
the enforcement of contracts and other rights.
23
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24
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any of our future processes or products will be patentable;
our processes or products will not infringe upon the patents of
third parties; or
we will have the resources to defend against charges of patent
infringement by third parties or to protect our own rights
against infringement by third parties.
the timing of FDA approvals we receive;
the timing of process validation for particular generic drug
products;
25
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the timing of product launches
the introduction of new products by others that render our
products obsolete or noncompetitive;
the ability to maintain selling prices and gross margins on our
products;
the outcome of our patent infringement litigation; and
the addition or loss of customers.
26
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27
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our ability to maintain compliance with SEC reporting
requirements;
our ability to relist our common stock on The NASDAQ Stock
Market and maintain such listing;
investor perception of us;
analyst recommendations;
market conditions relating to specialty pharmaceutical companies;
announcements of new products by us or our competitors;
publicity regarding actual or potential developments relating to
products under development by us or our competitors;
developments, disputes or litigation concerning patent or
proprietary rights;
delays in the development or approval of our product candidates;
regulatory developments;
period to period fluctuations in our financial results and those
of our competitors;
future sales of substantial amounts of common stock by
stockholders; and
economic and other external factors.
exercising voting, redemption, and conversion rights to the
detriment of the holders of common stock;
receiving preferences over the holders of common stock regarding
our assets in the event of our dissolution or liquidation;
delaying, deferring, or preventing a change in control of our
company, even when holders of common stock may desire to effect
such a transaction;
discouraging bids for our common stock at a premium over the
market price of the common stock; and
otherwise adversely affecting the market price of the common
stock.
28
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Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
29
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Item 3.
Legal
Proceedings
30
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31
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32
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33
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Item 4.
Submission
of Matters to a Vote of Security Holders
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Price Range
per Share
High
Low
$
11.40
$
6.50
$
9.55
$
8.00
n/a
n/a
n/a
n/a
$
10.76
$
8.30
$
12.00
$
4.55
$
12.40
$
8.00
$
12.15
$
9.45
any beneficial owners of common stock whose shares are held in
the names of various dealers, clearing agencies, banks, brokers
and other fiduciaries; and
34
Table of Contents
broker-dealers or other participants who hold or clear shares
directly or indirectly through the Depository
Trust Company, or its nominee, Cede & Co.
Number of Securities
Remaining Available for
Number of Securities to
Future Issuance Under
be Issued Upon
Weighted Average
Equity Compensation
Exercise of Outstanding
Exercise Price of
Plans (Excluding
Options, Warrants and
Outstanding Options,
Securities Reflected in
Rights
Warrants and Rights
Column (a))
(a)
(b)
(c)
6,027,029
$
10.45
244,631
2,253,211
(1)
$
10.72
1,641,200
(2)
8,280,240
$
10.53
1,885,831
(1)
Represents options issued pursuant to the Impax Laboratories,
Inc. Amended and Restated 2002 Equity Incentive Plan in excess
of the number of shares authorized for issuance under such plan.
See Note 15 to our consolidated audited financial
statements for information concerning our equity compensation
plans.
(2)
Includes 435,793 shares of common stock available for future
issuance under the Impax Laboratories, Inc. 2001 Non-Qualified
Employee Stock Purchase Plan.
35
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Item 6.
Selected
Financial Data
For the Years Ended December 31,
2008
2007
2006
2005
2004
($ in 000s, except per share data)
$
210,071
$
273,753
$
135,246
$
112,400
$
91,086
59,809
39,992
29,635
26,095
23,069
114,179
89,590
74,245
59,588
76,301
3,923
76,507
(11,247
)
(5,623
)
(46,551
)
18,700
125,925
(12,044
)
(5,780
)
(48,825
)
$
0.32
$
2.14
$
(0.20
)
$
(0.10
)
$
(0.84
)
$
0.31
$
2.06
$
(0.20
)
$
(0.10
)
$
(0.84
)
As of December 31,
2008
2007
2006
2005
2004
($ in 000s)
$
119,985
$
143,496
$
29,834
$
56,081
$
79,039
126,639
110,107
81,919
55,796
76,151
514,582
516,459
343,888
260,285
259,077
5,990
20,510
89,603
80,285
102,047
355,184
382,292
347,864
251,399
244,831
(41,590
)
(60,290
)
(186,215
)
(174,171
)
(168,390
)
$
159,398
$
134,167
$
(3,976
)
$
8,886
$
14,246
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
36
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37
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38
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December 31,
2008
2007
2006
($ in 000s)
$
2,977
$
4,401
$
4,438
50,144
33,972
26,664
(49,065
)
(35,396
)
(26,701
)
$
4,056
$
2,977
$
4,401
28
%
23
%
21
%
December 31,
2008
2007
2006
($ in 000s)
$
3,603
$
3,124
$
5,391
20,361
15,968
13,856
(19,164
)
(15,489
)
(16,123
)
$
4,800
$
3,603
$
3,124
11
%
11
%
11
%
39
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December 31,
2008
2007
2006
($ in 000s)
$
14,261
$
12,903
$
10,625
5,719
5,459
7,220
(6,305
)
(4,101
)
(4,942
)
$
13,675
$
14,261
$
12,903
3
%
4
%
6
%
40
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41
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42
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43
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44
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45
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46
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47
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48
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49
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Payments Due by Period
Less Than
More Than
($ in 000s)
Total
1 Year
1-3 Years
3-5 Years
5 Years
$
20,647
$
14,657
$
3,873
$
2,117
$
1,286
686
520
80
11,796
11,796
6,806
1,412
2,324
2,038
1,032
1,988
1,988
$
42,523
$
30,539
$
6,717
$
4,235
$
1,032
(a)
Liabilities for incomes taxes under FIN 48 were excluded as
the Company is not able to make a reasonably reliable estimate
of the amount and period of related future payments. As of
December 31, 2008, the Company had $7.5 million of
gross unrecognized tax benefits under FIN 48.
(b)
Represents the principal portion of payments of debt
obligations, including: (i) $12.75 million
3.5% Debentures callable on June 15, 2009, interest
paid semi-annually, starting December 15, 2005;
(ii) 6.0% note payable to Solvay in 24 quarterly
principal and interest installment payments of $549,165
commencing March 2007 through December 2012; and
(iii) Vendor financing agreement related to software
licenses with interest at 3.10% in two monthly installments of
$0 and thirty-four monthly principal and interest installments
of $12,871 commencing December 2006 through November 2009.
(c)
We lease office, warehouse, and laboratory facilities under
non-cancelable operating leases through June 2015. We also lease
certain equipment under various non-cancelable operating leases
with various expiration dates through 2013.
(d)
Construction contracts are related to our currently under
construction facility in Taiwan, R.O.C., which is intended to be
utilized for manufacturing, research and development, warehouse,
and administrative space. The construction phase of this project
is expected to be completed and equipment to be installed,
validated, and approved by FDA in 2009, and product shipments to
begin in early 2010. In conjunction with the construction of our
Taiwan facility, we have entered into several contracts,
amounting to an aggregate of approximately $16,617,000 and
$853,000 as of December 31, 2008 and 2007, respectively. As
of December 31, 2008 and 2007, we had remaining commitments
under these contracts of approximately $1,988,000 and $422,000,
respectively.
50
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51
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Item 7A.
Quantitative
and Qualitative Disclosures about Market Risk
Item 8.
Financial
Statements and Supplementary Data
Item 9.
Changes
in and Disagreements with Accountants on Accounting and
Financial Disclosure
Item 9A(T).
Controls
and Procedures
52
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accounting Fees and Services
53
Table of Contents
Item 15.
Exhibits
and Financial Statement Schedules
Exhibit
3
.1.1
Restated Certificate of Incorporation, dated August 30,
2004.(1)
3
.1.2
Certificate of Designation of Series A Junior Participating
Preferred Stock, as filed with the Secretary of State of
Delaware on January 21, 2009.(3)
3
.2
By-Laws.(2)
4
.1
Specimen of Common Stock Certificate.(2)
4
.2
Form of Debenture (incorporated by reference to Exhibit A
to the Indenture, dated as of June 27, 2005, between the
Company and HSBC Bank USA, National Association, as Trustee,
listed on Exhibit 4.3)
4
.3
Indenture, dated as of June 27, 2005, between the Company
and HSBC Bank USA, National Association, as Trustee.(2)
4
.4
Supplemental Indenture, dated as of July 6, 2005, between
the Company and HSBC Bank USA, National Association, as
Trustee.(2)
4
.5
Registration Rights Agreement, dated as of June 27, 2005,
between the Company and the Initial Purchasers named therein.(2)
4
.6
Promissory Note dated June 7, 2006, issued by the Company
to Solvay Pharmaceuticals, Inc.(2)
4
.7
Preferred Stock Rights Agreement, dated as of January 20,
2009, by and between the Company and StockTrans, Inc., as Rights
Agent.(3)
10
.1
Amended and Restated Loan and Security Agreement, dated as of
December 15, 2005, between the Company and Wachovia Bank,
National Association.(2)
10
.1.1
First Amendment, dated October 14, 2008, to Amended and
Restated Loan and Security Agreement, dated December 15,
2005, between the Company and Wachovia Bank, National
Association.(4)
10
.1.2
Second Amendment to Amended and Restated Loan and Security
Agreement, effective as of December 31, 2008, by and among
the Company and Wachovia Bank, National Association.
10
.2
Purchase Agreement, dated June 26, 2005, between the
Company and the Purchasers named therein.(2)
10
.3
Impax Laboratories Inc. 1995 Stock Incentive Plan.*(2)
10
.3.1
Amendment No. 1 to Impax Laboratories, Inc. 1995 Stock
Incentive Plan, dated July 1, 1998.*
10
.3.2
Amendment No. 2 to Impax Laboratories, Inc. 1995 Stock
Incentive Plan, dated May 25, 1999.*
10
.4
Impax Laboratories Inc. 1999 Equity Incentive Plan.*
10
.4.1
Form of Stock Option Grant under the Impax Laboratories, Inc.
1999 Equity Incentive Plan.*
10
.5
Impax Laboratories Inc. 2001 Non-Qualified Employee Stock
Purchase Plan.*(2)
10
.6
Impax Laboratories Inc. Amended and Restated 2002 Equity
Incentive Plan.*
10
.6.1
Form of Stock Option Grant under the Impax Laboratories, Inc.
Amended and Restated 2002 Equity Incentive Plan.*
10
.6.2
Form of Stock Bonus Agreement under the Impax Laboratories, Inc.
Amended and Restated 2002 Equity Incentive Plan.*
54
Table of Contents
Exhibit
10
.7
Impax Laboratories Inc. Executive Non-Qualified Deferred
Compensation Plan, restated effective January 1, 2005.*(4)
10
.8
Employment Agreement, dated as of December 14, 1999,
between the Company and Charles Hsiao, Ph.D.*(4)
10
.9
Employment Agreement, dated as of December 14, 1999,
between the Company and Larry Hsu, Ph.D.*(4)
10
.10
Offer of Employment Letter, dated August 12, 2004, between
the Company and Charles V. Hildenbrand.*
10
.11
Offer of Employment Letter, dated February 9, 2005, between
the Company and Arthur A. Koch, Jr.*
10
.12.1
Employment Agreement, dated as of September 1, 2006,
between the Company and David S. Doll.*(2)
10
.12.2
Separation Agreement and General Release, dated July 30,
2008, between the Company and David S. Doll.*(2)
10
.12.3
Consulting Agreement, effective as of September 4, 2008,
between the Company and David S. Doll.*(2)
10
.13
Offer of Employment Letter, effective as of March 31, 2008,
between the Company and Michael Nestor.*
10
.14
Offer of Employment Letter, effective as of January 5,
2009, between the Company and Christopher Mengler.*
10
.15
Strategic Alliance Agreement, dated June 27, 2001, between
the Company and Teva Pharmaceuticals Curacao N.V.**(5)
10
.15.1
Letter Amendment, dated October 8, 2003, to Strategic
Alliance Agreement, dated June 27, 2001, between the
Company and Teva Pharmaceuticals Curacao N.V.**(5)
10
.15.2
Letter Agreement, dated March 24, 2005, between the Company
and Teva Pharmaceuticals Curacao N.V.**(5)
10
.15.3
Letter Amendment, dated March 24, 2005 and effective
January 1, 2005, to Strategic Alliance Agreement, dated
June 27, 2001, between the Company and Teva Pharmaceuticals
Curacao N.V.**(5)
10
.15.4
Amendment, dated January 24, 2006, to Strategic Alliance
Agreement, dated June 27, 2001, between the Company and
Teva Pharmaceuticals Curacao N.V.**(6)
10
.15.5
Amendment, dated February 9, 2007, to Strategic Alliance
Agreement, dated June 27, 2001, between the Company and
Teva Pharmaceuticals Curacao N.V.**(5)
10
.16
Development, License and Supply Agreement, dated as of
June 18, 2002, between the Company and Wyeth, acting
through its Wyeth Consumer Healthcare Division.**(5)
10
.16.1
Amendment, dated as of July 9, 2004, to Development,
License and Supply Agreement, dated as of June 18, 2002,
between the Company and Wyeth, acting through its Wyeth Consumer
Healthcare Division.(6)
10
.16.2
Amendment, dated as of February 14, 2005, to Development,
License and Supply Agreement, dated as of June 18, 2002,
between the Company and Wyeth, acting through its Wyeth Consumer
Healthcare Division.(6)
10
.17
Licensing, Contract Manufacturing and Supply Agreement, dated as
of June 18, 2002, between the Company and Schering
Corporation.**(6)
10
.17.1
Amendment No. 3, effective as of July 23, 2004, to
Licensing, Contract Manufacturing and Supply Agreement, dated as
of June 18, 2002, between the Company and Schering
Corporation.**(5)
10
.17.2
Amendment No. 4, effective as of December 15, 2006, to
Licensing, Contract Manufacturing and Supply Agreement, dated as
of June 18, 2002, between the Company and Schering
Corporation.**(5)
10
.18
Supply and Distribution Agreement, dated as of November 3,
2005, between the Company and DAVA Pharmaceuticals, Inc.**(5)
10
.18.1
Amendment No. 2, dated February 6, 2007, to Supply and
Distribution Agreement, dated November 3, 2005, between the
Company and DAVA Pharmaceuticals, Inc.**(6)
10
.19
Patent License Agreement, dated as of March 30, 2007, by
and among Purdue Pharma L.P., The P.F. Laboratories, Inc.,
Purdue Pharmaceuticals L.P. and the Company.(7)
Table of Contents
Exhibit
10
.20
Supplemental License Agreement, dated as of March 30, 2007,
by and among Purdue Pharma L.P., The P.F. Laboratories, Inc.,
Purdue Pharmaceuticals L.P. and the Company.(7)
10
.21
Sublicense Agreement, effective as of March 30, 2007,
between the Company and DAVA Pharmaceuticals, Inc.(7)
10
.22
Promotional Services Agreement, dated as of January 19,
2006, between the Company and Shire US Inc.**(5)
10
.23
Co-promotion Agreement, dated as of July 16, 2008, between
the Company and Wyeth, acting through its Wyeth Pharmaceuticals
Division.**(7)
10
.24
Joint Development Agreement, dated as of November 26, 2008,
between the Company and Medicis Pharmaceutical Corporation.**(5)
10
.25
Special Cash Bonus Payments and Directors Fees.*(8)
10
.26
Construction Work Agreement, dated as of February 18, 2008,
by and between Impax Laboratories (Taiwan), Inc., a wholly-owned
subsidiary of the Company, and E&C Engineering Corporation
(English translation from the Taiwanese language).
10
.27
Construction Agreement, dated as of March 11, 2008, by and
between Impax Laboratories (Taiwan), Inc., a wholly-owned
subsidiary of the Company, and Fu Tsu Construction (English
translation from the Taiwanese language).
11
.1
Statement re computation of per share earnings (incorporated by
reference to Note 17 to the Notes to the Consolidated
Financial Statements in this Annual Report on
Form 10-K).
21
.1
Subsidiaries of the registrant.
31
.1
Certification of the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31
.2
Certification of the Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32
.1
Certifications of the Chief Executive Officer and Chief
Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
*
Management contract, compensatory plan or arrangement.
**
Confidential treatment requested for certain portions of this
exhibit pursuant to
Rule 24b-2
under the Exchange Act, which portions are omitted and filed
separately with the SEC.
(1)
Incorporated by reference to Amendment No. 5 to the
Companys Registration Statement on Form 10 filed on
December 23, 2008.
(2)
Incorporated by reference to the Companys Registration
Statement on Form 10 filed on October 10, 2008.
(3)
Incorporated by reference to the Companys Current Report
on
Form 8-K
filed on January 22, 2009.
(4)
Incorporated by reference to Amendment No. 2 to the
Companys Registration Statement on Form 10 filed on
December 2, 2008.
(5)
Incorporated by reference to Amendment No. 6 to the
Companys Registration Statement on Form 10 filed on
January 14, 2009.
(6)
Incorporated by reference to Amendment No. 1 to the
Companys Registration Statement on Form 10 filed on
November 12, 2008.
(7)
Incorporated by reference to Amendment No. 7 to the
Companys Registration Statement on Form 10 filed on
January 21, 2009.
(8)
Incorporated by reference to the Companys Current Report
on
Form 8-K
filed on January 6, 2009.
Table of Contents
F-2
F-3
F-4
F-5
F-6
F-7 to F-58
S-1
Page F-1 of F-58
Table of Contents
Page F-2 of F-58
Table of Contents
December 31,
2008
2007
$
69,275
$
37,462
50,710
106,034
43,306
51,503
32,305
27,568
13,578
11,923
17,996
27,376
9,298
8,592
236,468
270,458
95,629
81,223
93,144
82,474
52,599
47,937
9,168
6,793
27,574
27,574
$
514,582
$
516,459
LIABILITIES AND STOCKHOLDERS EQUITY
$
14,657
$
69,234
12,797
16,898
41,360
35,838
35,015
26,381
6,000
12,000
109,829
160,351
12,750
5,990
7,760
2,285
225,804
181,720
6,000
13,561
11,426
$
355,184
$
382,292
$
$
602
591
203,538
196,049
(2,157
)
(2,157
)
(995
)
(26
)
(41,590
)
(60,290
)
$
159,398
$
134,167
$
514,582
$
516,459
Page F-3 of F-58
Table of Contents
Years Ended December 31,
2008
2007
2006
$
98,602
$
87,978
$
78,201
81,778
161,114
36,809
15,946
11,866
13,782
833
12,891
12,759
6,434
21
36
20
210,071
273,753
135,246
91,969
107,656
72,248
118,102
166,097
62,998
59,809
39,992
29,635
6,472
10,025
9,693
2,556
47,898
39,573
32,361
114,179
89,590
74,245
3,923
76,507
(11,247
)
1,234
(110
)
1,098
1,319
21,576
73
(192
)
4,218
4,751
2,233
(2,599
)
(4,113
)
(3,796
)
29,671
77,108
(11,904
)
10,971
(48,817
)
140
$
18,700
$
125,925
$
(12,044
)
$
0.32
$
2.14
$
(0.20
)
$
0.31
$
2.06
$
(0.20
)
59,072,752
58,810,452
58,996,365
60,782,721
61,217,470
58,996,365
Page F-4 of F-58
Table of Contents
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS EQUITY (DEFICIT)
AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31,
2008
(dollars
and shares in thousands)
Accumulated
Additional
Other
Common Stock
Paid-In
Treasury
Accumulated
Comprehensive
Shares
Par Value
Capital
Stock
Deficit
Loss
Total
58,977
$
590
$
182,467
$
$
(174,171
)
$
$
8,886
52
659
659
683
683
(244
)
(2,157
)
(2,157
)
(3
)
(3
)
(12,044
)
(12,044
)
58,785
$
590
$
183,809
$
(2,157
)
$
(186,215
)
$
(3
)
$
(3,976
)
37
1
250
251
1,513
1,513
10,477
10,477
(23
)
(23
)
125,925
125,925
58,822
$
591
$
196,049
$
(2,157
)
$
(60,290
)
$
(26
)
$
134,167
994
10
1,029
1,039
5,817
5,817
76
1
643
644
(969
)
(969
)
18,700
18,700
59,892
$
602
$
203,538
$
(2,157
)
$
(41,590
)
$
(995
)
$
159,398
Years Ended December 31,
2008
2007
2006
$
18,700
$
125,925
$
(12,044
)
(969
)
(23
)
(3
)
$
17,731
$
125,902
$
(12,047
)
Page F-5 of F-58
Table of Contents
Years Ended December 31,
2008
2007
2006
$
18,700
$
125,925
$
(12,044
)
9,895
8,612
7,307
568
550
(81,485
)
4,718
17,483
(10,477
)
1,397
6,118
(1,319
)
94,876
234,816
115,391
(33,928
)
(64,681
)
(42,431
)
(81,778
)
(161,114
)
(36,809
)
22,713
46,363
14,006
16,399
15,359
11,215
(16,087
)
(13,014
)
(11,678
)
(15,946
)
(11,866
)
(13,782
)
14,977
9,900
12,421
40,000
(833
)
(12,000
)
(18,200
)
(14,400
)
(2,197
)
(2,573
)
(12,000
)
3,500
2,556
5,817
1,513
683
561
(2,867
)
(3,147
)
(1,004
)
(1,234
)
110
(1,098
)
7,629
9,868
(31,393
)
(4,737
)
6,543
(846
)
(4,184
)
(6,324
)
1,960
(814
)
7,546
4,372
738
1,189
1,814
$
64,564
$
119,014
$
(5,760
)
$
(202,133
)
$
(244,119
)
$
(57,530
)
260,324
164,667
35,302
(25,863
)
(18,836
)
(21,475
)
$
32,328
$
(98,288
)
$
(43,703
)
$
(65,234
)
$
(253
)
$
(108
)
10,477
155
113
93
$
(65,079
)
$
10,337
$
(15
)
$
31,813
$
31,063
$
(49,478
)
$
37,462
$
6,399
$
55,877
$
69,275
$
37,462
$
6,399
Years Ended December 31,
2008
2007
2006
(in $000s)
$
2,970
$
4,556
$
3,409
$
8,381
$
14,106
$
500
Page F-6 of F-58
Table of Contents
1.
THE
COMPANY
2.
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Page F-7 of F-58
Table of Contents
Page F-8 of F-58
Table of Contents
2008
2007
2006
22.9
%
8.7
%
7.1
%
20.4
%
19.1
%
13.5
%
20.4
%
15.8
%
11.2
%
13.5
%
26.1
%
45.5
%
6.0
%
8.4
%
5.0
%
83.2
%
78.1
%
82.3
%
2008
2007
2006
18.0
%
13.2
%
17.3
%
14.0
%
12.7
%
18.3
%
13.9
%
35.5
%
11.6
%
10.3
%
17.9
%
10.9
%
5.5
%
8.4
%
5.5
%
68.4
%
77.2
%
67.4
%
Page F-9 of F-58
Table of Contents
Page F-10 of F-58
Table of Contents
the delivered item has value to the customer on a stand alone
basis;
there is objective and reliable evidence of the fair value of
the undelivered item; and
if the arrangement includes a general right of return relative
to the delivered item, delivery or performance of the
undelivered item is considered probable and substantially in the
control of the vendor.
Page F-11 of F-58
Table of Contents
Page F-12 of F-58
Table of Contents
Page F-13 of F-58
Table of Contents
Page F-14 of F-58
Table of Contents
Page F-15 of F-58
Table of Contents
3.
RECENT
ACCOUNTING PRONOUNCEMENTS
Page F-16 of F-58
Table of Contents
4.
INVESTMENTS
Page F-17 of F-58
Table of Contents
Gross
Gross
Amortized
Unrecognized
Unrecognized
Fair
Cost
Gains
Losses
Value
(In $000s)
$
6,194
$
$
$
6,194
35,948
52
(6
)
35,994
7,856
(54
)
7,802
481
(31
)
450
231
231
$
50,710
$
52
$
(91
)
$
50,671
Gross
Gross
Amortized
Unrecognized
Unrecognized
Fair
Cost
Gains
Losses
Value
(In $000s)
$
94,107
$
$
$
94,107
7,000
7,000
3,202
5
(8
)
3,199
1,503
(64
)
1,439
222
222
$
106,034
$
5
$
(72
)
$
105,967
5.
ACCOUNTS
RECEIVABLE
December 31,
2008
2007
(In $000s)
$
54,591
$
60,272
(4,800
)
(3,603
)
(4,056
)
(2,977
)
(2,429
)
(2,189
)
$
43,306
$
51,503
Page F-18 of F-58
Table of Contents
For the Years Ended December 31,
2008
2007
2006
(In $000s)
$
3,603
$
3,124
$
5,391
20,361
15,968
13,856
(19,164
)
(15,489
)
(16,123
)
$
4,800
$
3,603
$
3,124
For the Years Ended December 31,
2008
2007
2006
(In $000s)
$
2,977
$
4,401
$
4,438
50,144
33,972
26,664
(49,065
)
(35,396
)
(26,701
)
$
4,056
$
2,977
$
4,401
6.
INVENTORY
December 31,
2008
2007
(In $000s)
$
16,940
$
15,005
1,397
1,827
16,504
11,373
$
34,841
$
28,205
(2,536
)
(637
)
$
32,305
$
27,568
Page F-19 of F-58
Table of Contents
7.
PROPERTY,
PLANT AND EQUIPMENT
December 31,
2008
2007
(In $000s)
$
2,270
$
2,270
55,310
51,287
49,983
44,001
6,733
5,332
21,019
10,323
135,315
113,213
(39,686
)
(31,990
)
$
95,629
$
81,223
Page F-20 of F-58
Table of Contents
8.
ACCRUED
EXPENSES
December 31,
2008
2007
(In $000s)
$
15,147
$
9,983
13,675
14,261
572
384
584
566
259
551
2,279
2,096
2,087
3,382
4,526
1,555
2,231
3,060
$
41,360
$
35,838
December 31,
2008
2007
2006
(In $000s)
$
14,261
$
12,903
$
10,625
5,719
5,459
7,220
(6,305
)
(4,101
)
(4,942
)
$
13,675
$
14,261
$
12,903
Page F-21 of F-58
Table of Contents
9.
FAIR
VALUE OF COMMON STOCK PURCHASE WARRANTS
Common
Common
Stock
Stock
Total
Purchase
Purchase
Reported
Warrants
Warrants
Liability
Outstanding
Value
Value
741,503
$
5.36
$
3,977,000
(100,000
)
641,503
$
3.60
$
2,313,000
(36,616
)
604,887
$
3.78
$
2,285,000
(604,887
)
$
$
For the Years Ended December 31,
2008
2007
2006
43.0 - 49.0
%
24.2 - 46.4
%
48.7 - 57.6
%
1.25 - 1.50
%
3.4 - 4.9
%
4.7 - 5.2
%
0
%
0
%
0
%
Page F-22 of F-58
Table of Contents
10.
INCOME
TAXES
For the Years Ended December 31,
2008
2007
2006
(In $000s)
$
6,315
$
8,383
$
320
(62
)
6,802
190
6,253
15,185
510
$
3,478
$
17,830
$
(4,971
)
(66,783
)
4,651
1,240
(347
)
(2,391
)
(14,702
)
2,341
4,718
(64,002
)
(370
)
$
10,971
$
(48,817
)
$
140
For the Years Ended December 31,
2008
2007
2006
(In $000s)
$
29,671
$
77,108
$
(11,904
)
10,385
35.0
%
26,988
35.0
%
(4,047
)
(34.0
)%
130
0.5
%
2,886
3.8
%
(1,699
)
(14.3
)%
(1,993
)
(2.6
)%
(2,228
)
(7.5
)%
(1,306
)
(1.7
)%
(996
)
(8.3
)%
1,438
4.9
%
528
0.7
%
232
2.0
%
(531
)
(1.8
)%
(676
)
(0.9
)%
(432
)
(1.5
)%
38
0.1
%
(373
)
(3.1
)%
1,050
3.5
%
6,118
7.9
%
1,159
3.9
%
85
0.1
%
31
0.2
%
(81,485
)
(105.7
)%
6,992
58.7
%
$
10,971
37.0
%
$
(48,817
)
(63.3
)%
$
140
1.2
%
Page F-23 of F-58
Table of Contents
December 31,
2008
2007
(In $000s)
$
830
$
1,024
3,009
6,118
2,490
1,249
11,711
10,230
87,789
81,654
3,073
7,145
2,376
3,345
371
4,838
3,752
$
116,487
$
114,517
$
2,205
$
1,508
42,267
37,468
854
566
228
$
45,892
$
39,204
$
70,595
$
75,313
December 31,
2008
2007
(In $000s)
$
23,940
$
32,336
(5,944
)
(4,960
)
17,996
27,376
92,547
82,181
(39,948
)
(34,244
)
52,599
47,937
$
70,595
$
75,313
Page F-24 of F-58
Table of Contents
Amount
(In $000s)
$
2,075
4,968
1,955
3,775
$
12,773
Page F-25 of F-58
Table of Contents
11.
REVOLVING
LINE OF CREDIT
12.
LONG-TERM
DEBT
Page F-26 of F-58
Table of Contents
Page F-27 of F-58
Table of Contents
December 31,
2008
2007
(In $000s)
$
12,750
$
75,000
2,215
2,957
7,760
9,428
137
144
$
20,647
$
89,744
(14,657
)
(69,234
)
$
5,990
$
20,510
(1)
In August and September 2008, the Company repurchased at a
discount an aggregate of $62,250,000 face value principal amount
of its 3.5% Debentures at the request of the holders. The
remaining $12,750,000 principal amount matures on June 15,
2012, but is subject to repurchase by the Company at 100% of the
outstanding principal amount on June 15, 2009, at the
option of the holders.
(2)
Term loan payable at 8.17% to Cathay Bank in 83 monthly
installments of $19,540 commencing June 28, 2001 through
May 27, 2008 with a balance due on June 28, 2008. The
8.17% Cathay Bank loan was collateralized by land, building and
building improvements in the Companys 35,000 square
foot headquarters and research facility in Hayward, California.
This loan was paid in full without penalty in May 2008.
(3)
Term loan payable at 7.5% to Cathay Bank in 83 monthly
installments of $24,629 commencing November 14, 2001
through October 13, 2008 with a balance of $2,917,598 due
on November 14, 2008. The 7.5% Cathay Bank loan was
collateralized by land, building and building improvements in
the Companys 50,000 square foot manufacturing
facility in Hayward, California. This loan was paid in full
without penalty in May 2008.
(4)
Subordinated promissory note in the amount of $11,000,000
related to the June 2006 settlement of litigation brought by
Solvay Pharmaceuticals, Inc. (Solvay). In the
settlement, the Company agreed to pay $23,000,000 to Solvay,
with such amount recorded as litigation settlement expense in
the Companys 2004 financial statements. The settlement
included a $12,000,000 cash payment upon signing of the
settlement agreement with the remaining $11,000,000 to be paid
under the terms of the subordinated promissory note between the
Company and Solvay. The subordinated promissory note interest
rate is 6.0% per annum, and requires the Company to pay 24
quarterly installments of $549,165, commencing in March 2007
through December 2012. Additionally, the subordinated promissory
note becomes immediately due and payable upon the occurrence of
a default in any payment due, a change in control of the
Company, voluntary or involuntary bankruptcy proceeding by or
against the Company, and working capital less than 150% of the
remaining unpaid balance of the subordinated promissory note. At
December 31, 2008, none of these events has occurred to
date.
(5)
Vendor financing agreement related to software licenses, with
interest at 3.1% annum, and two monthly installments of $0 and
thirty-four monthly installments of $12,871, commencing December
2006 through November 2009.
Page F-28 of F-58
Table of Contents
(In $000s)
$
14,657
1,879
1,994
2,117
$
20,647
13.
ALLIANCE
AGREEMENTS
Contingent Sale of Market Exclusivity
The Teva Agreement obligated the Company
to deliver and Teva to purchase the exclusive marketing rights
for four of the 12 covered products for $22,000,000 to the
extent the Company achieved specified product development
milestones relating to four products. Portions of this
$22,000,000 purchase price were assigned to milestones based on
their negotiated values at the inception of the Teva Agreement.
If some, but not all of the milestones were achieved, then
exclusive marketing rights would transfer only for those
products for which the related milestones were met. To the
extent the
Page F-29 of F-58
Table of Contents
milestones were not achieved by January 15, 2004 and Teva
had not exercised the contingent option to purchase market
exclusivity described below, the related exclusive marketing
rights would not be transferred to Teva, the Company would be
required to repay the corresponding portions of the $22,000,000
advance deposit and Teva would retain non-exclusive marketing
rights with respect to the related products. The milestones and
related portions to be repaid were: $2,000,000 if tentative FDA
approval for one specified product was not obtained by
June 15, 2002; $5,000,000 if the same product was not
launched by February 15, 2003; $5,000,000 and $4,000,000,
respectively, if two additional products were not launched by
December 15, 2003; $1,000,000 if tentative FDA approval of
a fourth product was not received by January 15, 2003; and
$5,000,000 if the same product was not launched by
December 15, 2003.
Contingent Option to Purchase Market Exclusivity
The Company also granted Teva an option
to purchase the exclusive marketing rights to the four specified
products to the extent the product development milestones were
not met. Teva could exercise this right by forgiving repayment
of half of the foregoing portions of the $22,000,000 advance
deposit payable as assigned in the Teva Agreement to the
specified product.
The Companys Share Settlement Option
To the extent the Company failed to
achieve the milestones and Teva failed to exercise its option to
purchase market exclusivity for the four specified products and
the Company was thus required to repay the advance deposit, the
Company had the option to settle, or repay, the applicable
portion of the advance deposit either in cash or with shares of
its common stock valued at the average closing price of the
stock during the ten trading days ending two days prior to the
date of Tevas receipt of the shares (Designated
Share Price).
Interest Forgiveness /FDA Approval Provision
Under the terms of the Teva Agreement,
when the Company received FDA approval for any three of the 12
covered products, the entire amount of interest payable under
the advance deposit would be forgiven. The nominal amount of the
accrued interest expected to be incurred over the life of the
advance deposit was estimated not to exceed approximately
$4,400,000.
Contingent Stock Repurchase Option
.
The
Teva Agreement divided eleven of the products into three
categories, referred to as product tiers. The
Tier 1 products were those pending FDA approval when the
Teva Agreement was entered into, whereas Tier 2 and
Tier 3 products were those for which applications to the
FDA had not as yet been filed at the inception of the Teva
Agreement. The Teva Agreement gave the Company the option to
repurchase from Teva 243,729 shares of its common stock
(one-sixth of the shares initially sold to Teva) for $1.00
contingent upon Teva achieving a commercial sale of either a
Tier 2 or Tier 3 product.
Page F-30 of F-58
Table of Contents
Tevas reimbursement of manufacturing costs;
The Companys profit share associated with Tevas
sales of products to its customers;
The sale of market exclusivity for certain products;
The estimated fair value received upon the Companys
exercise of the contingent stock repurchase option upon
achieving the commercial sale of a Tier 2 or Tier 3
product;
Tevas reimbursement of regulatory and litigation
costs; and
The value received as a result of the forgiveness of interest on
the advance deposit upon receipt of the third FDA approval to
market a product.
Tevas reimbursement of manufacturing costs
at the time the Company delivers the product
to Teva;
The Companys pro rata profit share
at
the time Teva reports the Companys respective pro rata
profit share to the Company;
The sale of market exclusivity
at the time
market exclusivity was delivered by Tevas exercise of its
contingent option to purchase market exclusivity;
The milestone associated with the first commercial sale of a
Tier 2 or Tier 3 product and concurrent exercise of
the contingent stock repurchase option at the time
the right to exercise the option accrued;
Cost sharing payments
at the time the related
costs are incurred (except for the $300,000 cost reimbursement
payable upon inception of the Teva Agreement, recognition of
which began at such inception); and
Forgiveness of interest
at the time the
Company received its third FDA approval to market a product
covered by the agreement.
Page F-31 of F-58
Table of Contents
Page F-32 of F-58
Table of Contents
Page F-33 of F-58
Table of Contents
Inception
Through
For the Years Ended December 31,
Dec 31,
2008
2007
2006
2005
(In $000s)
$
181,149
$
136,157
$
78,014
$
700
732
861
3,660
59,706
133,873
92,502
89,990
60,406
134,605
93,363
93,650
(47,133
)
(3,467
)
6,000
4,370
2,157
$
60,406
$
87,472
$
92,053
$
104,020
$
(333
)
$
(333
)
$
(333
)
$
(1,500
)
(243
)
(243
)
(243
)
(1,094
)
(120
)
(120
)
(659
)
(583
)
(516
)
(466
)
(916
)
(39,668
)
(41,268
)
(32,209
)
(22,496
)
(40,947
)
(42,480
)
(33,910
)
(26,006
)
$
200,608
$
181,149
$
136,157
$
78,014
Inception
Through
For the Years Ended December 31,
Dec 31,
2008
2007
2006
2005
(In $000s)
$
75,296
$
49,728
$
27,059
$
33,621
46,246
35,530
36,079
(20,556
)
(20,678
)
(12,861
)
(9,020
)
$
88,361
$
75,296
$
49,728
$
27,059
Page F-34 of F-58
Table of Contents
Deferred
Deferred
Product
Revenue
Manufacturing Costs
Recognition
Amortization
(In $000s)
$
19,112
$
8,415
19,112
8,415
19,112
8,415
19,112
8,415
19,112
8,415
105,048
46,286
$
200,608
$
88,361
Page F-35 of F-58
Table of Contents
Page F-36 of F-58
Table of Contents
Inception
Through
For the Years Ended December 31,
Dec 31,
2008
2007
2006
2005
(In $000s)
$
20,591
$
17,098
$
19,665
$
84
42
8,310
424
158
1,060
16,399
14,851
11,015
39,601
$
16,399
$
15,359
$
11,215
$
48,971
(297
)
(315
)
(786
)
(6,071
)
(112
)
(312
)
(221
)
(793
)
(15,537
)
(11,239
)
(12,775
)
(22,442
)
(15,946
)
(11,866
)
(13,782
)
(29,306
)
$
21,044
$
20,591
$
17,098
$
19,665
Inception
Through
For the Years Ended December 31,
Dec 31,
2008
2007
2006
2005
(In $000s)
$
17,251
$
14,137
$
14,880
$
16,037
12,172
11,727
29,981
50
842
(49
)
5,181
$
16,087
$
13,014
$
11,678
$
35,162
(14,634
)
(9,201
)
(12,024
)
(17,260
)
(343
)
(699
)
(397
)
(3,022
)
(14,977
)
(9,900
)
(12,421
)
(20,282
)
$
18,361
$
17,251
$
14,137
$
14,880
Page F-37 of F-58
Table of Contents
Deferred
Deferred
Product
Revenue
Manufacturing Costs
Recognition
Amortization
(In $000s)
$
5,903
$
5,163
5,903
5,163
1,949
1,703
1,158
1,011
1,158
1,011
4,973
4,310
$
21,044
$
18,361
Page F-38 of F-58
Table of Contents
Page F-39 of F-58
Table of Contents
Inception
Through
For the Years Ended December 31,
Dec 31,
2008
2007
2006
2005
(In $000s)
$
6,361
$
24,784
$
5,655
$
9,000
1,000
34,470
100,211
13,028
4,738
34,470
100,211
22,028
5,738
(858
)
(7,975
)
(1,150
)
(17
)
(39,973
)
(110,659
)
(1,749
)
(66
)
(40,831
)
(118,634
)
(2,899
)
(83
)
$
$
6,361
$
24,784
$
5,655
Inception
Through
For the Years Ended December 31,
Dec 31,
2008
2007
2006
2005
(In $000s)
$
1,850
$
9,100
$
3,344
$
307
18,435
6,901
3,401
(2,157
)
(25,685
)
(1,145
)
(57
)
$
$
1,850
$
9,100
$
3,344
Page F-40 of F-58
Table of Contents
Page F-41 of F-58
Table of Contents
Year Ended
December 31,
2008
(In $000s)
$
40,000
40,000
(833
)
(833
)
$
39,167
Deferred
Revenue
Recognition
(In $000s)
$
10,000
10,000
10,000
9,167
$
39,167
Page F-42 of F-58
Table of Contents
Page F-43 of F-58
Table of Contents
14.
EMPLOYEE
BENEFIT PLANS
Page F-44 of F-58
Table of Contents
15.
SHARE-BASED
COMPENSATION:
Page F-45 of F-58
Table of Contents
Weighted
Average
Exercise
Number of Shares
Price
Under Option
per Share
7,152,301
$
10.06
291,000
$
6.85
(8,613
)
$
4.21
(296,517
)
$
21.38
7,138,171
$
9.46
1,991,678
$
11.34
(20,719
)
$
2.28
(61,369
)
$
8.38
9,047,761
$
9.90
539,850
$
8.80
(956,824
)
$
4.18
(350,547
)
$
9.07
8,280,240
$
10.53
8,155,317
$
10.58
6,396,840
$
10.58
Non-Vested
Weighted
Restricted
Average
Stock
Grant Date
Awards
Fair Value
$
272,678
$
11.45
$
(2,337
)
$
11.48
270,341
$
11.45
210,300
$
8.81
(64,111
)
$
11.45
(16,814
)
$
11.15
399,716
$
10.30
Page F-46 of F-58
Table of Contents
For the Years Ended December 31,
2008
2007
2006
64.1%-67.7%
67.7%-75.2%
76.2%-76.3%
66.8%
69.9%
76.3%
3.0%
4.0%
4.7%
0%
0%
0%
6.25
6.07
6.25
$5.58
$7.43
$4.91
For the Years Ended December 31,
2008
2007
2006
(In $000s)
$
1,522
$
418
$
168
2,262
563
236
2,033
532
279
$
5,817
$
1,513
$
683
Page F-47 of F-58
Table of Contents
16.
STOCKHOLDERS
EQUITY (DEFICIT)
17.
EARNINGS
PER SHARE
Page F-48 of F-58
Table of Contents
For the Years Ended December 31,
2008
2007
2006
(In $000s, except share and per share amounts)
$
18,700
$
125,925
$
(12,044
)
59,072,752
58,810,452
58,996,365
1,709,969
2,407,018
60,782,721
61,217,470
58,996,365
$
0.32
$
2.14
$
(0.20
)
$
0.31
$
2.06
$
(0.20
)
18.
SEGMENT
INFORMATION
Page F-49 of F-58
Table of Contents
Global
Impax
Corporate
Total
Division
Division
and Other
Company
(In $000s)
$
197,180
$
12,891
$
$
210,071
80,724
11,245
91,969
43,502
16,307
59,809
6,472
6,472
$
60,944
$
(16,198
)
$
(15,075
)
$
29,671
Global
Impax
Corporate
Total
Division
Division
and Other
Company
$
260,994
$
12,759
$
$
273,753
96,829
10,827
107,656
31,170
8,822
39,992
10,025
10,025
$
118,964
$
(8,585
)
$
(33,271
)
$
77,108
Global
Impax
Corporate
Total
Division
Division
and Other
Company
$
128,812
$
6,434
$
$
135,246
66,675
5,573
72,248
24,362
5,273
29,635
9,693
9,693
$
25,781
$
(6,208
)
$
(31,477
)
$
(11,904
)
19.
COMMITMENTS
AND CONTINGENCIES
Page F-50 of F-58
Table of Contents
Years Ended
December 31,
(In $000s)
$
1,412
1,265
1,059
1,014
1,024
1,032
$
6,806
20.
LEGAL AND
REGULATORY MATTERS
Page F-51 of F-58
Table of Contents
Page F-52 of F-58
Table of Contents
Page F-53 of F-58
Table of Contents
Page F-54 of F-58
Table of Contents
Page F-55 of F-58
Table of Contents
21.
SUBSEQUENT
EVENTS
Page F-56 of F-58
Table of Contents
22.
SUPPLEMENTARY
FINANCIAL INFORMATION (unaudited)
2008 Quarters Ended:
March 31
June 30
September 30
December 31
(In $000s except share and per share amounts)
$
38,990
$
45,703
$
42,343
$
54,544
9,233
11,033
13,770
16,108
4,191
5,190
4,173
6,805
946
1,381
1,478
1,914
1,163
1,474
2,213
1,906
23,457
26,625
20,709
27,811
18,805
43,870
9,424
9,679
4,409
4,932
3,398
3,207
833
3,252
3,238
3,238
3,163
7
7
5
2
49,930
78,672
36,774
44,695
$
26,552
$
57,968
$
14,478
$
19,104
$
959
$
17,597
$
(8,914
)
$
9,058
$
0.02
$
0.30
$
(0.15
)
$
0.15
$
0.02
$
0.29
$
(0.15
)
$
0.15
58,833,979
58,978,703
59,166,319
59,308,389
61,126,768
60,584,709
59,166,319
60,624,452
The Company recognized $1.2 million in income during in the
fourth quarter 2008, resulting from the adjustment of the
assumptions used to determine the change in the fair value of
the common stock purchase warrants.
Page F-57 of F-58
Table of Contents
2007 Quarters Ended:
March 31
June 30
September 30
December 31
(In $000s except share and per share amounts)
$
32,478
$
33,880
$
42,289
$
39,852
7,202
7,419
10,559
8,792
3,375
3,520
4,306
4,767
968
1,291
1,639
1,565
1,174
1,336
1,191
1,417
19,759
20,314
24,594
23,311
8,278
33,296
81,634
37,906
2,408
2,305
4,081
3,072
3,201
3,279
3,104
3,175
17
9
7
3
33,663
59,203
113,420
67,467
$
13,677
$
30,902
$
87,428
$
34,090
$
(7,770
)
$
83,792
$
43,402
$
6,501
$
(0.13
)
$
1.42
$
0.74
$
0.11
$
(0.13
)
$
1.37
$
0.71
$
0.11
58,794,020
58,807,656
58,818,971
58,821,964
58,794,020
61,193,296
61,293,615
61,301,862
As more fully discussed above in the Alliance Agreements
footnote, the settlement of a patent infringement lawsuit
resulted in the Company being granted a license permitting it to
manufacture and sell its oxycodone product (under the terms of
the DAVA Agreement), resulting in the Companys
determination to shorten the revenue recognition period of the
DAVA Agreement. The license authorized the Company to sell a
fixed amount of its product (under a sub-license granted to
DAVA) through June 2007. The increased amount of revenue
recognized in the third quarter of 2007 resulted from the
recognition of these product sales over the resulting revised
shorter recognition period.
As more fully discussed above in the Income Taxes footnote, at
June 30, 2007, the Company reversed the valuation allowance
on the deferred tax asset, resulting in a significant tax
benefit for the second quarter of 2007.
Page F-58 of F-58
Table of Contents
For the Year Ended December 31, 2006
Column B
Column C
Column D
Column E
Balance at
Charge to
Charge to
Balance at
Beginning of
Costs and
Other
End of
Period
Expenses
Accounts
Deductions
Period
(In $000s)
$
84,970
$
6,992
$
$
$
91,962
5,776
(2,857
)
2,919
For the Year Ended December 31, 2007
Column B
Column C
Column D
Column E
Balance at
Charge to
Charge to
Balance at
Beginning of
Costs and
Other
End of
Period
Expenses
Accounts
Deductions
Period
(In $000s)
$
91,962
$
(81,485
)
$
(10,477
)
$
$
2,919
229
3,148
550
550
For the Year Ended December 31, 2008
Column B
Column C
Column D
Column E
Balance at
Charge to
Charge to
Balance at
Beginning of
Costs and
Other
End of
Period
Expenses
Accounts
Deductions
Period
(In $000s)
$
$
333
$
$
$
333
3,148
1,257
4,405
550
568
(290
)
828
S-1
Table of Contents
Title: President and Chief Executive Officer
President, Chief Executive Officer (Principal Executive Officer)
and Director
March 12, 2009
Senior Vice President, Finance, and
Chief Financial Officer
(Principal Financial and Accounting Officer)
March 12, 2009
Director
March 12, 2009
Chairman of the Board
March 12, 2009
Director
March 12, 2009
Director
March 12, 2009
Director
March 12, 2009
Director
March 12, 2009
Table of Contents
Exhibit
3
.1.1
Restated Certificate of Incorporation, dated August 30,
2004.(1)
3
.1.2
Certificate of Designation of Series A Junior Participating
Preferred Stock, as filed with the Secretary of State of
Delaware on January 21, 2009.(3)
3
.2
By-Laws.(2)
4
.1
Specimen of Common Stock Certificate.(2)
4
.2
Form of Debenture (incorporated by reference to Exhibit A
to the Indenture, dated as of June 27, 2005, between the
Company and HSBC Bank USA, National Association, as Trustee,
listed on Exhibit 4.3)
4
.3
Indenture, dated as of June 27, 2005, between the Company
and HSBC Bank USA, National Association, as Trustee.(2)
4
.4
Supplemental Indenture, dated as of July 6, 2005, between
the Company and HSBC Bank USA, National Association, as
Trustee.(2)
4
.5
Registration Rights Agreement, dated as of June 27, 2005,
between the Company and the Initial Purchasers named therein.(2)
4
.6
Promissory Note dated June 7, 2006, issued by the Company
to Solvay Pharmaceuticals, Inc.(2)
4
.7
Preferred Stock Rights Agreement, dated as of January 20,
2009, by and between the Company and StockTrans, Inc., as Rights
Agent.(3)
10
.1
Amended and Restated Loan and Security Agreement, dated as of
December 15, 2005, between the Company and Wachovia Bank,
National Association.(2)
10
.1.1
First Amendment, dated October 14, 2008, to Amended and
Restated Loan and Security Agreement, dated December 15,
2005, between the Company and Wachovia Bank, National
Association.(4)
10
.1.2
Second Amendment to Amended and Restated Loan and Security
Agreement, effective as of December 31, 2008, by and among
the Company and Wachovia Bank, National Association.
10
.2
Purchase Agreement, dated June 26, 2005, between the
Company and the Purchasers named therein.(2)
10
.3
Impax Laboratories Inc. 1995 Stock Incentive Plan.*(2)
10
.3.1
Amendment No. 1 to Impax Laboratories, Inc. 1995 Stock
Incentive Plan, dated July 1, 1998.*
10
.3.2
Amendment No. 2 to Impax Laboratories, Inc. 1995 Stock
Incentive Plan, dated May 25, 1999.*
10
.4
Impax Laboratories Inc. 1999 Equity Incentive Plan.*
10
.4.1
Form of Stock Option Grant under the Impax Laboratories, Inc.
1999 Equity Incentive Plan.*
10
.5
Impax Laboratories Inc. 2001 Non-Qualified Employee Stock
Purchase Plan.*(2)
10
.6
Impax Laboratories Inc. Amended and Restated 2002 Equity
Incentive Plan.*
10
.6.1
Form of Stock Option Grant under the Impax Laboratories, Inc.
Amended and Restated 2002 Equity Incentive Plan.*
10
.6.2
Form of Stock Bonus Agreement under the Impax Laboratories, Inc.
Amended and Restated 2002 Equity Incentive Plan.*
10
.7
Impax Laboratories Inc. Executive Non-Qualified Deferred
Compensation Plan, restated effective January 1, 2005.*(4)
10
.8
Employment Agreement, dated as of December 14, 1999,
between the Company and Charles Hsiao, Ph.D.*(4)
10
.9
Employment Agreement, dated as of December 14, 1999,
between the Company and Larry Hsu, Ph.D.*(4)
10
.10
Offer of Employment Letter, dated August 12, 2004, between
the Company and Charles V. Hildenbrand.*
10
.11
Offer of Employment Letter, dated February 9, 2005, between
the Company and Arthur A. Koch, Jr.*
10
.12.1
Employment Agreement, dated as of September 1, 2006,
between the Company and David S. Doll.*(2)
10
.12.2
Separation Agreement and General Release, dated July 30,
2008, between the Company and David S. Doll.*(2)
10
.12.3
Consulting Agreement, effective as of September 4, 2008,
between the Company and David S. Doll.*(2)
10
.13
Offer of Employment Letter, effective as of March 31, 2008,
between the Company and Michael Nestor.*
Table of Contents
Exhibit
10
.14
Offer of Employment Letter, effective as of January 5,
2009, between the Company and Christopher Mengler.*
10
.15
Strategic Alliance Agreement, dated June 27, 2001, between
the Company and Teva Pharmaceuticals Curacao N.V.**(5)
10
.15.1
Letter Amendment, dated October 8, 2003, to Strategic
Alliance Agreement, dated June 27, 2001, between the
Company and Teva Pharmaceuticals Curacao N.V.**(5)
10
.15.2
Letter Agreement, dated March 24, 2005, between the Company
and Teva Pharmaceuticals Curacao N.V.**(5)
10
.15.3
Letter Amendment, dated March 24, 2005 and effective
January 1, 2005, to Strategic Alliance Agreement, dated
June 27, 2001, between the Company and Teva Pharmaceuticals
Curacao N.V.**(5)
10
.15.4
Amendment, dated January 24, 2006, to Strategic Alliance
Agreement, dated June 27, 2001, between the Company and
Teva Pharmaceuticals Curacao N.V.**(6)
10
.15.5
Amendment, dated February 9, 2007, to Strategic Alliance
Agreement, dated June 27, 2001, between the Company and
Teva Pharmaceuticals Curacao N.V.**(5)
10
.16
Development, License and Supply Agreement, dated as of
June 18, 2002, between the Company and Wyeth, acting
through its Wyeth Consumer Healthcare Division.**(5)
10
.16.1
Amendment, dated as of July 9, 2004, to Development,
License and Supply Agreement, dated as of June 18, 2002,
between the Company and Wyeth, acting through its Wyeth Consumer
Healthcare Division.(6)
10
.16.2
Amendment, dated as of February 14, 2005, to Development,
License and Supply Agreement, dated as of June 18, 2002,
between the Company and Wyeth, acting through its Wyeth Consumer
Healthcare Division.(6)
10
.17
Licensing, Contract Manufacturing and Supply Agreement, dated as
of June 18, 2002, between the Company and Schering
Corporation.**(6)
10
.17.1
Amendment No. 3, effective as of July 23, 2004, to
Licensing, Contract Manufacturing and Supply Agreement, dated as
of June 18, 2002, between the Company and Schering
Corporation.**(5)
10
.17.2
Amendment No. 4, effective as of December 15, 2006, to
Licensing, Contract Manufacturing and Supply Agreement, dated as
of June 18, 2002, between the Company and Schering
Corporation.**(5)
10
.18
Supply and Distribution Agreement, dated as of November 3,
2005, between the Company and DAVA Pharmaceuticals, Inc.**(5)
10
.18.1
Amendment No. 2, dated February 6, 2007, to Supply and
Distribution Agreement, dated November 3, 2005, between the
Company and DAVA Pharmaceuticals, Inc.**(6)
10
.19
Patent License Agreement, dated as of March 30, 2007, by
and among Purdue Pharma L.P., The P.F. Laboratories, Inc.,
Purdue Pharmaceuticals L.P. and the Company.(7)
10
.20
Supplemental License Agreement, dated as of March 30, 2007,
by and among Purdue Pharma L.P., The P.F. Laboratories, Inc.,
Purdue Pharmaceuticals L.P. and the Company.(7)
10
.21
Sublicense Agreement, effective as of March 30, 2007,
between the Company and DAVA Pharmaceuticals, Inc.(7)
10
.22
Promotional Services Agreement, dated as of January 19,
2006, between the Company and Shire US Inc.**(5)
10
.23
Co-promotion Agreement, dated as of July 16, 2008, between
the Company and Wyeth, acting through its Wyeth Pharmaceuticals
Division.**(7)
10
.24
Joint Development Agreement, dated as of November 26, 2008,
between the Company and Medicis Pharmaceutical Corporation.**(5)
10
.25
Special Cash Bonus Payments and Directors Fees.*(8)
10
.26
Construction Work Agreement, dated as of February 18, 2008,
by and between Impax Laboratories (Taiwan), Inc., a wholly-owned
subsidiary of the Company, and E&C Engineering Corporation
(English translation from the Taiwanese language).
10
.27
Construction Agreement, dated as of March 11, 2008, by and
between Impax Laboratories (Taiwan), Inc., a wholly-owned
subsidiary of the Company, and Fu Tsu Construction (English
translation from the Taiwanese language).
Table of Contents
Exhibit
11
.1
Statement re computation of per share earnings (incorporated by
reference to Note 17 to the Notes to the Consolidated
Financial Statements in this Annual Report on
Form 10-K).
21
.1
Subsidiaries of the registrant.
31
.1
Certification of the Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31
.2
Certification of the Chief Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32
.1
Certifications of the Chief Executive Officer and Chief
Financial Officer Pursuant to 18 U.S.C. Section 1350,
as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
*
Management contract, compensatory plan or arrangement.
**
Confidential treatment requested for certain portions of this
exhibit pursuant to
Rule 24b-2
under the Exchange Act, which portions are omitted and filed
separately with the SEC.
(1)
Incorporated by reference to Amendment No. 5 to the
Companys Registration Statement on Form 10 filed on
December 23, 2008.
(2)
Incorporated by reference to the Companys Registration
Statement on Form 10 filed on October 10, 2008.
(3)
Incorporated by reference to the Companys Current Report
on
Form 8-K
filed on January 22, 2009.
(4)
Incorporated by reference to Amendment No. 2 to the
Companys Registration Statement on Form 10 filed on
December 2, 2008.
(5)
Incorporated by reference to Amendment No. 6 to the
Companys Registration Statement on Form 10 filed on
January 14, 2009.
(6)
Incorporated by reference to Amendment No. 1 to the
Companys Registration Statement on Form 10 filed on
November 12, 2008.
(7)
Incorporated by reference to Amendment No. 7 to the
Companys Registration Statement on Form 10 filed on
January 21, 2009.
(8)
Incorporated by reference to the Companys Current Report
on
Form 8-K
filed on January 6, 2009.
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IMPAX LABORATORIES, INC.
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By: | /s/ Arthur A. Koch, Jr. | |||
Name/Title: Arthur A. Koch, Jr., SVP - CFO | ||||
WACHOVIA BANK, NATIONAL
ASSOCIATION |
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By: | /s/ Margaret A. Byrne | |||
Name/Title: Margaret A. Byrne , Director | ||||
Address | Ownership | Landlord (If Leased) | ||
30831 Huntwood Avenue
Hayward, CA 94544 |
Owned | |||
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31153 San Antonio Street,
Hayward, CA 94544 |
Owned | |||
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1502 Crocker Avenue
Hayward, CA 94544 |
Leased |
RREEF Management Co.
26120 Eden Landing Road Suite 2 Hayward, CA 94545 |
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3735 Castor Avenue
Philadelphia, PA 19124 |
Owned | |||
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30941-30945 San Clemente
St.
Hayward, CA 94544 |
Leased |
Buckhead Industrial Properties, Inc.
c/o Lend Lease Real Estate Investments, Inc. One Front St., Suite 1100 San Francisco, CA 94111 |
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7026 Knoll Center Parkway
Suite 225 Pleasanton, CA 94566 |
Leased |
7-L Northcreek, LLC
4175 Business Center Drive Fremont, CA 94538 |
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121 New Britain Blvd.
New Britain, PA 18914 |
Leased |
Nappen & Associates
119 Keystone Drive Montgomeryville, PA 18936 |
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1490 Crocker Avenue
Hayward, CA 94544 |
Owned | |||
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1508 Crocker Avenue
Hayward, CA 94544 |
Leased |
RREEF Management Co.
26120 Eden Landing Road Suite 2 Hayward, CA 94545 |
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31047 Genstar Avenue
Hayward, CA 94544 |
Leased |
United Genstar
31047 Genstar Avenue Hayward, CA 94544 |
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41316 Christy Street
Freemont, CA 94538 |
Leased |
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Optionee Name:
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Address:
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Total Option Shares:
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Exercise Price Per Share:
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Date of Grant:
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Expiration Date:
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Type of Option:
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[ ] Incentive Stock Option | |
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[ ] Nonstatutory Stock Option |
1. | Grant of Option Impax Laboratories, Inc. (the Company), hereby grants to Optionee named above (Optionee) and Optionee hereby accepts a nontransferable option to purchase the total number of shares of common stock of the Company set forth above (the Shares) at the exercise price per share set forth above (the Exercise Price), subject to all of the terms and conditions of this Stock Option Grant (this Option) and the Companys 1999 Equity Incentive Plan (the Plan). Optionee acknowledges receipt of a copy of the Plan, which is attached hereto as Exhibit A. Optionee represents that he or she is familiar with the terms and conditions of the Plan and hereby accepts this Option subject to all of the terms and conditions hereof and thereof. Optionee hereby agrees to accept as binding, conclusive, and final, all decisions and interpretations of the Board, or Committee, if applicable, (hereinafter the Board), as to any questions or disputes arising under the Plan or this Option. |
If designated as an Incentive Stock Option above, this Option is intended to qualify as an incentive stock option (ISO) within the meaning of Section 422 of the Code. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in the Plan. |
2. | Right to Exercise During Optionees continued service with the Company or any Parent or Subsidiary of the Company (or, in the case of a Nonstatutory Stock Option, an Affiliate of the Company), this Option shall become exercisable over four years in 25% equal annual installments from the date of the grant. Subject to earlier termination as provided in Section 5 below, to the extent that this Option has become exercisable with respect to the Shares covered thereby, this Option may thereafter be exercised by Optionee, in whole or in part, at any time or from time to time prior to the Expiration Date. |
3. | Restriction on Exercise This Option may not be exercised unless such exercise is in compliance with the Securities Act, the Exchange Act, regulations promulgated thereunder and all applicable state securities laws as they are in effect on the date of exercise, and the requirements of any stock exchange or national market system on which the Companys common stock may be listed at the time of exercise. Optionee understands that the Company is under no obligation to register, qualify or list the Shares with the Securities and Exchange Commission (SEC), any state securities commission, or any stock exchange to effect such compliance. |
4. | Termination of Service Except as provided below in this Section, this Option shall terminate and may not be exercised if Optionees continuous service with the Company or any Parent or Subsidiary of the Company or, in the case of a Nonstatutory Stock Option, an Affiliate of the Company (hereinafter Continuous Service) is terminated for any reason whatsoever. The Board shall have discretion to determine whether Optionees Continuous Service with the Company or any Parent, Subsidiary of Affiliate of the Company has terminated and the effective date on which such termination occurred (the Termination Date). |
5. | Manner of Exercise |
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6. | Nontransferability of Option The Option may not be transferred in any manner other than by will or by the law of descent and distribution and may be exercised during the lifetime of Optionee only by Optionee. |
7. | Independent Tax Advice Optionee agrees that Optionee has or will obtain the advice of independent tax counsel regarding the federal and state income tax consequences of the receipt and exercise of this Option and of the disposition of Common Stock acquired upon exercise hereof, including advice regarding the imposition of the alternative minimum tax on tax preferences generated by exercise of stock options and regarding any holding period requirements for preferential tax treatment. OPTIONEE ACKNOWLEDGES THAT HE OR SHE HAS NOT RELIED AND WILL NOT RELY UPON ANY ADVICE OR REPRESENTATIONS BY THE COMPANY OR BY ITS EMPLOYEES OR REPRESENTATIVES WITH RESPECT TO THE TAX TREATMENT OF THIS OPTION OR ANY SHARES ISSUED PURSUANT HERETO . |
8. | No Right to Continue as Employee Nothing contained in this Option shall: (i) confer upon the Optionee any right to continue as an Employee, Officer, Director or Consultant of the Company or of any Affiliate; or (ii) limit in any way the right of the Company or of any Affiliate to terminate the Optionees position as an employee at any time. |
9. | Board Determinations Optionee hereby agrees to accept as binding, conclusive, and final all decisions and interpretations of the Board (including any committee thereof), or other administrator of the Plan, as to any questions arising under the Plan or this Option. This Option, as supplemented by the Plan, shall bind and inure to the benefit of the Company and its successors and assigns, and the Optionee and the Optionees estate in the event of death. |
10. | Entire Agreement The Plan is incorporated herein by this reference. The Option and the Plan constitute the entire agreement of the parties hereto and supersede all prior undertakings and agreements with respect to the subject matter hereof. |
COMPANY : | IMPAX LABORATORIES, INC. | |||||
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OPTIONEE
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Total Option Shares: | {Grant} | |||
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Exercise Price Per Share: | ||||
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Date of Grant: | ||||
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Expiration Date: | ||||
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Type of Option: | o Incentive Stock Option | |
o Nonstatutory Stock Option |
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COMPANY:
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IMPAX LABORATORIES, INC. | |||||
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OPTIONEE: |
(Signature)
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IMPAX LABORATORIES, INC.
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By: | ||||
Arthur A. Koch, Jr. | ||||
Chief Financial Officer | ||||
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ACCEPTED: | |||
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(Signature) | |||
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(Date) |
6
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√ | Kaiser or Health Net Healthcare, Guardian Dental, and VSP Vision (coverage effective October 1, 2004). | ||
√ | 401(k) (participation begins the first quarter following three (3) months of continuous service). | ||
√ | Short- and Long-Term Disability Insurance, Life, and Accidental Death & Dismemberment, after 90 days with the company. |
√ | 128 Hours of Personal Time Off, and 10 Holidays designated yearly. | ||
√ | Eligibility to participate in the Employee Stock Purchase Plan after one year of service at a 15% discount. | ||
√ | Executive Non-Qualified Deferred Compensation Plan |
Cc:
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Larry Hsu, President | |
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Nai Chang, Controller |
/s/
Charles V. Hildenbrand
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Start Date: August 31, 2004 | |
Signature
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/s/ Arthur A. Koch, Jr.
Arthur A. Koch, Jr.
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Date: |
February
10, 2005
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| Your position will be Divisional President, Brand Products Division reporting to Larry Hsu, PhD., President & CEO. | ||
| Your position will be based at Hayward, California with an agreed upon start date of March 31, 2008. On your first morning, please report to our administration facility at 31047 Genstar Road, Hayward CA 94544 for new hire orientation. | ||
| Your starting salary will be $425,000 per year, paid biweekly. | ||
| You will also receive, subject to Shareholder approval, an option to purchase stock options of 75,000 shares of IMPAX stock and 30,000 Restricted Stock Units. These options have a 4 year vesting schedule at 25% per year. | ||
| It is the Companys intent to negotiate in good faith an employment agreement with all senior executives as soon as it becomes current with its 10-K/10-Q filing. | ||
| You are eligible to receive a relocation package of $75,000 grossed up towards any and all relocation expenses you may incur for your move to California. The Company will negotiate in good faith to increase if needed at the time of your moving. However, the total relocation package will not exceed $125,000 grossed up. You and your family need to be formally moved to the Bay Area by July 2009 or we will expect full repayment of relocation expenses paid to you. You will receive $37,500 (that is 50% of $75,000) of relocation expenses with your first paycheck. The remaining 50% ($37,500) plus any additional negotiated amount will be paid out after you have provided proof to HR of permanent relocation of you and your family to the San Francisco Bay Area. | ||
| The Company agrees to pay for temporary housing at a mutually agreeable location until you move to the Bay Area, not to exceed a reasonable dollar amount determined by the Company. | ||
| You will be eligible to participate in a bonus program designed to reward you up to 75% of your annual salary, dependent on your performance and that of the Companys. | ||
| Also, you are eligible to participate in the following company benefits: |
√ | Kaiser or Health Net Healthcare, Delta Dental, and VSP Vision (coverage effective the first of the month following 30 days of employment). | ||
√ | 401(k) (participation begins the first quarter following 30 days of continuous service). | ||
√ | Short- and Long Term Disability Insurance, Life, and Accidental Death & Dismemberment, after 90 days with the company. | ||
√ | 20 days of Personal Time Off, and 10 Holidays designated yearly. | ||
√ | Eligibility to participate in the Employee Stock Purchase Plan after one year of service at a 15% discount. | ||
√ | Executive Non-Qualified Deferred Compensation Plan. |
/s/ Michael J. Nestor
Michael J. Nestor
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Date: March
6, 2008
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/s/ Paul R. Ulatoski
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Vice President Human Resources
|
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Impax Laboratories, Inc.
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CC: Larry Hsu
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Accepted by:
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/s/ Christopher Mengler
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Date: 29 DEC 08 | |
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Christopher Mengler
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1. DEFINITIONS AND INTERPRETATION
|
1 | |||
2. SCOPE OF WORK
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1 | |||
3. AGREEMENT SUM AND PAYMENT
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2 | |||
4. TAX AND DUTIES
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2 | |||
5. WORK SCHEDULE
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2 | |||
6. CHANGES AND ADDITIONAL WORK
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3 | |||
7. ADDITIONAL PAYMENT
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3 | |||
8. DELAY AND EXTENSION OF TIME
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3 | |||
9. TERMINATION AND LIMITATION OF LIABILITY
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4 | |||
10. FORCE MAJEURE DELAY BEYOND CONTROL
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5 | |||
11. INDEMNITY
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5 | |||
12. PROPERTY AND RISK
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6 | |||
13. INSURANCE
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6 | |||
14. INDEPENDENT CONTRACTOR
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6 | |||
15. ASSIGNMENT AND SUBCONTRACTING
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6 | |||
16 PERFORMANCE BOND
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7 | |||
17. ACCEPTANCE OF THE WORK
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7 | |||
18. WARRANTY
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7 | |||
19. DISPUTE RESOLUTION
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8 | |||
20. NOTICES
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8 | |||
21. GOVERNING LAW
|
9 | |||
22. AMENDMENT
|
9 | |||
23. ENTIRE AGREEMENT
|
9 |
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1. | DEFINITIONS AND INTERPRETATION | |
1.1 | In the Agreement the following words and expressions shall have the meanings hereby assigned to them except when the context otherwise requires: |
a. | Agreement means this Agreement and its attachments hereto. | ||
b. | Agreement Sum means the total agreed price for the services rendered by the Contractor for Work under this Agreement. | ||
c. | Work means the works described in the documents identified in the Attachment A hereto with reference to the works. | ||
d. | Work Product means anything created or developed by Contractor in performing Work, including all data, documents, reports, drawings, designs, models, ideas and improvements, electronic data (in usable form), and other intellectual property including copyrights, patents, trademarks, and trade secrets. Excluded from Work Product are questionnaire formats, methods for collecting data, patents, tradenames, and databases owned or licensed by Contractor. | ||
e. | Site means where the Project is located; address: Land Lot No. 39-1 in the Jhunan Science Park, Jhunan, Miao-Li, Taiwan, ROC. |
1.2 | Unless otherwise expressly provided, all payments shall be made hereunder in New Taiwan Dollar . | |
2. | SCOPE OF WORK |
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Contractor shall, except to the extent otherwise expressly stated herein, furnish all labor, supervision, materials, tools, equipment, facilities, permits, and activities to properly and efficiently do all things necessary to perform the Work, as further defined in Attachment A , Scope of Work which is attached hereto and included herein. This Scope of Work may be modified from time to time by mutual written agreement. | ||
3. | AGREEMENT SUM AND PAYMENT | |
3.1 | The Agreement Sum for the execution of the Work is New Taiwan Dollar One Hundred Seventy Eight Million and Eight Hundred Thousand ( NTD178,800,000), excluding ROC Value Added Tax. ROC Value Added Tax shall be for the account of IMPAX. The detailed price breakdown is annexed herein as Attachment B . | |
3.2 | Terms of payment are as below: |
a. | 90% of the Agreement Sum payable by monthly progress; | ||
b. | 10% of the Agreement Sum payable upon final Acceptance by IMPAX, or within six (6) months after IMPAX obtains Building Occupancy Permit from local authority, whichever occurs first. |
3.3 | Contractor shall invoice IMPAX before the 10 th day of every month for its Work properly provided under the Agreement during the preceding month. IMPAX shall review and approve the invoice within ten (10) days after its receipt. The invoice shall be deemed as approved by IMPAX if it does not approve nor stating its objection to the invoice within such period of time. Payment is due within 30 days after invoice approved. | |
4. | TAX AND DUTIES | |
4.1 | All rates and prices set forth in the Agreement shall be inclusive of all Taxes, Duties, Charges and the like, except for the ROC Value Added Tax. | |
4.2 | The Contractor shall obtain immunity or exemption from taxes or duties from which the Contractor or its subcontractors are exempt under applicable law or shall obtain a refund or credit including interest applicable for any such taxes or duties paid. If the Contractor negligently fails to obtain said immunities, exemptions refunds, or credits such taxes and duties shall be to the Contractors account. | |
4.3 | The Contractor shall however be deemed to have included in the Contract Sum for all costs and expenses arising out of or in relation to the administration of all Taxes, Duties and Charges payable by him on the services purchased for the carrying out and bringing to completion of the Work. Such cost and expense shall include but not limited to all administrative costs, financial charges, etc. | |
5. | WORK SCHEDULE | |
The Contractor agrees to commence Work under this Agreement from the commencement date stated in the IMPAX Letter of Intent, dated 11 December 2007, and shall complete Phase 1-A of this Work by May 31, 2008 and complete Phase 1-B of this Work by September 30, 2008 (refer to Attachement A for the scopes of Phase 1-A and Phase 1-B), unless the deadlines have been extended in accordance with Article 8 of this Agreement. |
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In no event shall the Work to be performed under this Agreement be considered to be complete until all construction items called for on the drawings, and specifications have been completed. | ||
6. | CHANGES AND ADDITIONAL WORK | |
6.1 | With prior written direction, IMPAX may make changes in the Work or authorize additional works which shall be performed under and be subject to the applicable conditions of this Agreement. In all cases where the amount or character of the Work is affected, an adjustment to Contractors compensation and/or schedule should be agreed upon by both parties. | |
6.2 | All changes or additional works must be authorized in writing by IMPAX before said work is begun. | |
6.3 | Notwithstanding anything to the contrary herein contained, Contractor shall not however be entitled to any additional compensation or an extension of time under Contractors schedule if any change or additional work required by IMPAX as aforesaid is necessitated by any event caused by the negligence omission or default of the Contractor. | |
6.5 | IMPAX may at its sole direction also issue instruction in regard to the stoppage or postponement of any part of the Work to be performed under the provisions of the Agreement. If the schedule for the performance of the work is affected by such stoppage and postponement and unless such stoppage and postponement is necessitated by any event caused by the negligence omission or default of Contractor, IMPAX shall allow Contractor such extension of time as is reasonable and, provided that the stoppage or postponement has been longer than 180 days, the Contractor shall be entitled to additional costs and/or expenses directly incurred therefrom, during the period of stoppage or postponement. If Contractor proceed with the Work after being issued with instructions to stop or postpone, then Contractor shall be responsible for the removal or correction of such work and for any other damages or losses suffered or incurred by IMPAX. | |
7. | ADDITIONAL PAYMENT | |
The Contractor shall not be entitled to claim additional costs that incur during the performance of the Work as in example for a prolonged period of time (exceeding Agreement Completion Schedule) or extra works (exceeding Agreement Work) unless such extra costs have been approved by IMPAX in regard to the Agreement. | ||
8. | DELAY AND EXTENSION OF TIME | |
8.1 | In the event Work performed by Contractor fails to conform with the generally accepted engineering standards, or Contractor personnel is incompetent for the assigned works, IMPAX or the supervisors assigned by IMAX may notify Contractor at any time and Contractor shall make corrections as instructed by IMPAX or the supervisors without requesting additional payment, and shall maintain the original schedule. | |
8.2 | In the event of delays or inability to fulfill contractual obligations due to Force Majeure, the affected party shall not be deemed in breach of the Agreement. | |
8.3 | If the Contractor fails to meet any of the deadlines provided in Article 5 of this Agreement or in delay with his other contractual duties of which the performance |
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shall be due the latest at the written demand from IMPAX, he shall pay a liquidated damage and not as a penalty for each day of delay. The daily liquidated damages for not meeting such contractual duty shall be 0.1% of the Agreement Sum up to the limit of 20% hereof. | ||
8.4 | If any of the deadlines must be extended as a result of one of the following circumstances, the Contractor shall notify IMPAX of his request by a written notice together with supporting documents. IMPAX may at his option extend the deadline after evaluating Contractor justifications for the delay and therefore waive the liquidated damage: |
a. | As a consequence of Force Majeure; | ||
b. | Any Agreement amendment for which Contractor is not responsible or Contractor suspension of the project execution as notified by IMPAX; | ||
c. | IMPAX has not provided the required information, equipment or sites to Contractor or taken the required matching measures such as evaluation or approval in accordance with the Agreement requirements; | ||
d. | Any delay for which another supplier establishing a contractual relationship with IMPAX is responsible; | ||
e. | Any other causes for which IMPAX is liable or Contractor is not responsible. |
9. | TERMINATION AND LIMITATION OF LIABILITY | |
9.1 | In the event that the Contractor has been behind any of the deadlines provided in Article 5 of this Agreement for thirty (30) days, or in the event that the Contractors reveals inability to complete this Project on schedule, IMPAX is entitled to, with written notice, terminate this Agreement. | |
9.2 | In the event IMPAX or Contractor is in breach or default of this Agreement, or any material provisions thereof, and does not act to remedy such breach or default within thirty (30) calendar days after written Notice is given, this Agreement may at any time thereafter be suspended or terminated, in whole or in part, by the other Party. In the case of termination, the Notice shall specify an effective date that provides for an orderly shutdown of the Work. | |
9.3 | Upon termination, Contractor shall take appropriate steps promptly to terminate the affected Work in an orderly manner, and to terminate pertinent outstanding obligations and commitments with a reasonable cost to IMPAX. Contractor shall conduct these termination steps in a proper manner or take necessary steps in order not to cause IMPAX damages. | |
9.4 | Termination of this Agreement, for whatever reason, shall not prejudice or affect the accrued rights or claims and liabilities of either party to this Agreement. | |
9.5 | The Contractors maximum aggregate liability in connection with all claims under this Agreement, including liquidated damage for delay as stated above, shall not exceed twenty percent (20%) of the Agreement Sum. However, the indemnification or compensations for the IMPAXs damage or loss resulting from defective Work Products delivered by the Contractor or from Contractors intentional acts or gross negligence are not subject to the maximum aggregate liability. | |
9.6 | Neither party shall be liable to the other for any loss of profit, loss of use, loss of production, loss of contracts or for any other indirect or consequential damage that may be suffered by the other. |
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12. | PROPERTY AND RISK | |
12.1 | All Work Product is owned by IMPAX upon creation. | |
12.2 | Contractor irrevocably assigns, transfers and conveys, and shall cause any subcontractors and other agents of Contractor (and the employees of Contractor and such subcontractors and agents) to assign, transfer and convey, to IMPAX all of its and their right, title and interest (including ownership of copyright) in and to all Work Product. | |
12.3 | Contractor warrants: (i) that it has sufficient right, title and interest to assign, transfer and convey the ownership rights set forth in this Section; and, (ii) that the Work and Work Product (and use thereof) do not infringe, and shall not infringe or cause the infringement of, the proprietary rights of any third party. | |
12.4 | Contractor agrees to execute, and shall cause any subcontractors and other agents of Contractor (and the employees of Contractor and such subcontractors and agents) to execute, any documents or take any other actions as may reasonably be necessary (or as IMPAX may reasonably request) to perfect the ownership of IMPAX in the Work Product. | |
13. | INSURANCE | |
Contractor shall maintain at least the below policies of insurance as necessary for the Project and such policies shall include IMPAX and sub-subcontractors as co-insured with same coverage as Contractor. The insurance shall be in force until acceptance of completion of this Project, and shall be extended if the work schedule is extended. | ||
1. Erection All Risk Insurance with a total limit at the
Agreement Sum;
2. Employee Liability Insurance with a total limit at 60 million NT dollars; 3. Third Party Liability Insurance with a total limit at 60 million NT dollars. |
The cost for the insurance mentioned above is included in the Agreement Sum and therefor the Contractor shall not ask for reimburecement for the insurance cost. Within 14 business days after the execution of this Agreement, the Contractor shall provide the insurance documents to IMPAX. | ||
14. | INDEPENDENT CONTRACTOR | |
The employees, subcontractors, methods, facilities and equipment used by Contractor shall be at all times under its exclusive direction and control. Contractors relationship to IMPAX under the Agreement shall be that of an independent contractor, and nothing in the Agreement shall be construed to constitute Contractor, its subcontractors or any of their employees as an employee, agent, associate, joint venturer, or partner of IMPAX. It is agreed that Contractors employees, who are assigned to IMPAX work under the Agreement, shall at all times be and remain employees of Contractor. | ||
15. | ASSIGNMENT AND SUBCONTRACTING | |
Neither party shall assign its rights nor delegate performance of its obligations under this Agreement to any third person, without the prior written consent of the other party, and any attempted assignment without this consent shall be void. |
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18.3 | In the event a portion of the Work under the Warranty fails to perform its intended functions, Contractor shall within three (3) days (or, within such reasonable time as agreed by IMPAX) make good and correct such deficiency at the cost to Contractor. Contractor failure to take such remedy action constitutes the breach of Warranty and entitled IMPAX to cash the Warranty Bond. | |
18.4 | The Warranty period for the defect portion shall be extended for a period equals to the portion that is out of service. In no case however, shall the Warranty be extended beyond three (3) years after the final Acceptance. | |
18.5 | The Warranty Bond shall return to the Contractor upon the conclusion of Warranty. | |
19. | DISPUTE RESOLUTION | |
19.1 | Any claims, differences or disputes arising out of or in connection with the present Agreement including any question regarding its existence, validity termination or its performance or in connection with arrangements regarding the performance of this Agreement (hereinafter referred to as Dispute) shall be settled by and amicable effort on the part of the parties by negotiation in the first instance. | |
19.2 | If the parties hereto fail to come to an amicable settlement, the parties agree to be finally settled by arbitration. The Arbitration shall take place in Taipei according to the Arbitration Law of the Republic of China. | |
19.3 | The language to be used in the arbitration proceedings shall be Chinese. | |
19.4 | The decision of the arbitrators shall be final and the Parties hereby agree to abide by it. During the period of arbitration, the performance by both Parties under the Agreement shall be carried on without interruption and in accordance with the terms hereof, except as to Work for which IMPAX may specifically authorize delay due to pending arbitration. | |
20. | NOTICES | |
Any NOTICE required or permitted hereunder shall be deemed to have been sufficiently given to either Party for all purposes hereof only if given in writing (a) by hand delivery; or (b) by registered mail or by special delivery; postage prepaid, return receipt requested, addressed as set forth below, or to such other address as either Party may designate by Notice as herein requested. All Notices shall be effective upon first receipt. Ordinary project correspondence between the Parties shall be sent to the same R.O.C. address indicated herein. |
TO IMPAX | IMPAX Laboratories (Taiwan), Inc. | |||||||
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No. 11, Ke June Rd. | |||||||
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Jhunan 350, Miao-Li, Taiwan | |||||||
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Republic of China | |||||||
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ATTENTION of Project Manager | |||||||
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Fax Number: (037) 586 558 | |||||||
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Telephone Number: (037) 586 268 | |||||||
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E&C | E&C Engineering Corporation | ||||||
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5F, 16, Lane 270, Pei Shen Rd., Sec. 3, | |||||||
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Shenkeng 222, Taipei, Taiwan | |||||||
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Republic of China |
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ATTENTION of Project Manager | |||||||
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Fax Number: (02) 2662-2814, 2664-6102 | |||||||
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Telephone Number: (02) 2662-5858 |
IMPAX Laboratories (Taiwan), Inc.
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E&C Engineering Corporation | |||
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/s/
Larry Hsu
Mr. Larry Hsu
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/s/
Andrew Tsai
Mr. Andrew Tsai
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Chairman
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President |
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Article 1 | Name of Construction |
Article 2 | Location of Construction |
Article 3 | Scope of Construction |
Article 4 | Tax-inclusive Contract Price: Two Hundred Eighty-six Million New Taiwan dollars exactly. |
Article 5 | Term of Construction |
1. | Commencement of Construction: Party B shall commence Construction and provide a commencement report within seven days upon receipt of the Party As bid-awarding notice after the final reward is decided. | |
2. | Deadline of Construction |
a. | Construction shall be fully completed within 365 calendar days (including all Saturdays and Sundays) following the commencement. The Permit of Use is scheduled to be obtained by September 30, 2008, and inspection will begin on September 15, 2008. Deadline of Construction shall also apply to other outsourced construction work designated by the proprietor. | ||
b. | On the location of Construction, an area of 530 square meters dubbed R&D Area shall be ready for production on June 1, 2008. Therefore, construction of such R&D Area shall be completed in a weather tight condition and delivered (including the MEP work) by May 31, 2008. |
3. | Involuntary Delay |
a. | If additional work exceeding the amount of jobs specified herein is required as a result of any modification made to Construction, Party B shall notify Party A of the number of additional working days for Construction within 10 days, and the parties shall negotiate for a working schedule extension. | ||
b. | If Term of Construction is affected as a result of force majeure, acts of God or reasons attributable to Party A, Party B shall submit an application for working schedule extension of Construction based on the facts within 15 days following the occurrence of such result. In the case where additional work requires less than half day, the working day shall be ignored; the period more than half day but less than one working day shall be treated as one day (details of the deferral shall be supplied). The number of days required shall be submitted to Architect, which will forward the same to Party A for approval. | ||
c. | The deferred or additional period for Construction in the preceding two paragraphs shall be counted consecutively according to the calendar system. However, any national holiday below shall not be counted as working days. |
(a) | National Holidays: New Year Holiday, Labor Day, National Day, and other holidays announced by the Central Personnel Administration of the Executive Yuan not to be counted as a working day. | ||
(b) | Customary Holidays: Lunar New Year Holidays, Qingming Festival, Dragon Boat Festival, Mid-Autumn Festival and other holidays announced by the Central Personnel Administration of the Executive Yuan not to be counted as a working day. | ||
(c) | National Election days and other days announced by any level of the |
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competent authority any time to be a holiday and not to be counted as a working day. |
Article | 6 Method of Payment |
1. | No Advancements | |
The price of Construction is assessed in every two months based on the amount of contracted work completed, in each time 95 percent of the construction cost of the completed portion is payable, and the outstanding amount shall be paid in full without interest when Construction is fully completed, inspected and accepted, and after Party B has completed the warranty of Construction. | ||
2. | In the event where Party A or Architect discovers that Party B has any one of the situations below, the evaluation of completed works or payment may be suspended until the causes to such suspension have been moved: |
a. | Party B fails to render the construction service in accordance with the drawings, and delays its improvement after it has been demanded by the Architect. | ||
b. | The overall progress of Construction is legged behind by over 10 percent of the scheduled pipeline, or there is any concern that Construction may not be completed before the deadline. | ||
c. | Party B defaults any payment payable to its contractor or materials supplier and therefore a dispute over Construction has arises. | ||
d. | Party A or a third party involved in Construction seeks damages from Party B in vain. | ||
e. | Party B is in breach of any term or condition contained herein. | ||
f. | Party B fails to honor any check or suffers a similar financial crisis. |
3. | The seal specimen used by Party B for invoice of construction payment shall be consistent with the one attached hereto. The right to receive such payment shall not be transferred or assigned to others without Party As agreement. |
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4. | If due to modification of design, additional number of work or project is required, such additional work or project shall not be assessed or inspected unless Party A has completed the legal procedures required. | |
5. | Any amount payable by Party A arising herefrom shall, regardless of its due day, be available for offsetting all the damages suffered or expenses incurred by Party A as a result of Party Bs default and breach of the provisions herein. |
Article 7 | Duties of Architect |
1. | Duties of Architect include the following: |
(a) | To review or modify the design, quality, or amount of work required by Construction. | ||
(b) | To explain the construction specification and relevant rules applicable to this Agreement. | ||
(c) | To review on daily reports, construction plans, detailed drawings and prescheduled pipelines provided by Party B. | ||
(d) | To supervise and randomly inspect Construction and randomly inspect the materials. | ||
(e) | To the extent approved by Party A, decide on Party Bs applications. | ||
(f) | To review and approve on Party Bs request for payments. | ||
(g) | To control quality of Construction and demand the progress and safety and health of workers of Construction. |
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(h) | To coordinate with other works related to Construction. |
(2) | All of the applications, reports and payment requests made by Party B pursuant to this Agreement are subject to Architects approval or forwarding. Party B shall also notify Architect and Party A any filings or report to be submitted to the competent authority pursuant to the law. |
(3) | The parties shall comply with all the decisions made by Architect within the scope of its duty, and shall notify Architect in writing of any objection within ten days after the decision is made. |
Article 8 | Modification and Design of Construction |
1. | Party A has the right to modify, add or reduce Construction any time at its discretion. |
2. | In the case of an unexpected condition, or when the actual condition is far from what is shown in the design drawings, either Party A or Party B has the right to request for change. |
3. | In the event where modification of Construction is required, Party B shall comply with Party As written instruction without objections once it is given. The amount of work to be added or reduced shall be paid based on the unit prices attached hereto; recognition of the amount of work added or reduced shall be subject to the result from the amount specified herein deducting the one that has been completed. Modification of the local construction shall be counted according the amount of locations changed. If any new work is required, its unit price shall be separately agreed. If the added or reduced amount of work exceeds 10 percent of the original amount specified herein, the unit price of the work exceeded shall be separately agreed. If the work involved is merely a minor modification or typically required in the practice, even if such work is not specified in the drawings or construction specifications, Party B shall pursue such work without objection or requests for additional payment. |
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Article 9 | Construction Plan |
(1) | When submitting its bid, Party B shall provide its construction plan, which shall include: |
(a) | Site organization chart, which includes the name of key personnel, profile, and scope of duty. | ||
(b) | Construction implementation plan, which instructs the plan to carry out each works, and how to coordinate among projects. | ||
(c) | Mobilization plan, which instructs location of working places and accommodation, and the move-in and operation date of the personnel, machinery and equipment. | ||
(d) | Construction pipelines, which instructs the commencement and completion of each construction work expected from each unit, construction order of such work, and the number of working hours and dates for milestones. | ||
(e) | Machinery and Equipment List, which enumerates the name of each machine and equipment to be delivered to Site, the working condition, working hours, and dates when construction materials are supplied onsite. | ||
(f) | Logistic Plan, which indicates the plans concerning materials, reviews, purchasing, transportation, and warehousing in the course of the construction. | ||
(g) | Safety Plan, which instructs the safety and health management system to be adopted in Construction, and the relevant safety measures. | ||
(h) | Quality Control Plan, which instructs the quality control measures to be adopted in Construction, which shall be overseen by a designated quality control engineer. | ||
(i) | Other proposals that may reduce the costs of Construction, shorten the term of Construction, or substitute plans not detrimental to safety, function and quality. |
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(j) | Disaster Prevention Plan, which instructs emergency measures in the case of a typhoon and rain during Construction. | ||
(k) | Coordination and management of contractors construction interface. |
2. | During Construction, Party B shall fill out the daily report in a format agreed by Party A, and submit the same to Architect, which will forward it for Party As approval. |
Article 10 | Construction Drawings |
1. | Party B has read this Agreement and inspected the Site, and shall act in compliance with the Agreement. Party B shall be liable for all the damages it suffers as a result of its failure to comprehend the condition of the Site in negligence. In the case of an obscure instruction that is technically or customary required, Party B shall perform its duty in accordance with Architects instruction without asking for compensation. If the actual condition or man-made barrier during the term of Construction is inconsistent with the drawings, Party B shall immediately report to the Architect for a resolution. |
2. | Drawings of this Agreement: All of the illustrations may be mutually supplementary. In the case of a conflict between two drawings, the latest drawing shall prevail. In the case of a conflict between a document and drawing, the drawing shall prevail. At all times, large-scale drawings shall prevail over small-scale drawings. |
3. | Prior to commencement of every project, Party B shall submit to Architect and Party A Works detailed field drawings of the site and samples for review, so that the progress of Construction will not be affected. If the order or timing of submission of detailed drawings of Construction is inappropriate or the review is not passed and consequently the progress of Construction is affected, Party B shall not request for extension of the deadline on such a ground. Materials concerning the overall color matches shall be submitted altogether for review. |
4. | Party B shall be responsible for illustration of the as-built drawing; Party B shall prepare the triplets and one electronic copy of the drawing, and deliver the same to Party A after such drawing has passed the review of Architect. |
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Article 11 | Site Management |
1. | Party B itself shall, or appoint one representative who has an experience of over 10 years in site construction (facility construction) to, station onsite. The representative shall oversee and maintain workers of Construction. Party B shall be liable if any worker is in breach of the law or has caused any dispute as the result of such breach. If any worker is injured or killed in an accident, Party B shall deal with the matter, and Party A shall not be liable for whatsoever. When exiting the Site, the representative appointed by Party B shall notify Party A of the name of his/her deputy; if Party A considers that such representative appointed by Party B unsuitable for the job, it may notify Party B to replace the person. |
2. | With respect to the onsite materials, machinery and equipment, regardless of whether they are prepared by Party B or supplied by (or lent from) Party A, Party B shall properly manage the items and liable for any lost or damage of them. |
3. | Party B shall film and record the onsite situations before, after and throughout the term of construction. |
4. | Party B shall appoint a legally qualified safety and health steward to station onsite on a full-time basis, and be accountable for labor safety, health, and environmental protection. |
5. | The construction work rendered by Party B shall be in line with the rules prescribed by the Science Park Administration or other competent authority. |
Article 12 | Machinery, Equipment and Materials |
1. | Unless otherwise prescribed herein, all of the machinery, equipment and materials required by Construction shall be supplied by Party B. |
2. | Unless otherwise prescribed herein or agreed by Architect, any machine or equipment supplied by Party B and is part of Construction shall be a qualified new item. Whenever a machine is arrived onsite, it shall be reported. Unless otherwise prescribed herein, each item shall be supported by an inspection report supplied by a professional institution. In the case of exported machinery, Party B shall provide with the certificate of country of origin (indicating the relevant location and |
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3. | Without the agreement of Architect or Party A, any machinery, equipment or materials that have arrived onsite and entered on the price calculation books shall not be removed by Party B at will. |
4. | Even if the equipment is inspected at its arrival in the site, the Architect may decline or request a substitute of such equipment which a defect is found during the term of Construction. |
5. | The premises where Party B stores its equipment and instruments shall be within the area approved by Party A, and the items stored up shall not prevent the progress of Construction and traffic of the streets. |
6. | Within one month after the bid is awarded, Party A has the right to decide the brand of the materials to be used, and Party B shall not dispute over Party As decision with any reason whatsoever. However, upon Party A or Architects consent, Party B may use materials of other brand, provided the substitute brand is in the same quality. |
7. | Within 20 days prior to any need, Party B shall apply for the machinery, equipment and materials to be supplied by Party A, so that the item can be delivered onsite in a timely manner. If the delivery is rescheduled, Party A shall notify Party B of any change one month before the scheduled delivery. If the materials or machinery or equipment to be supplied by Party A cannot be delivered on the scheduled date and consequently Party B suspends Construction in whole or in part, Party B may apply to Party A for an extension of the Construction term , and may seek damages from Party A if any is incurred. |
Article 13 | Onsite Safety and Health Facilities |
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1. | Labor Safety and Health Act and its Enforcement Rules; | |
2. | Guidelines for Labor Safety and Health Facilities; | |
3. | Relevant rules concerning standards of construction safety and health facilities; | |
4. | To participate in the Cleaning and Safety Agreement Organization pursuant to the Labor Safety and Health Organization Management and Auto-Checking Guidelines; | |
5. | Crane Equipment Safety Rules; | |
6. | Guidelines for High-Elevation Operations Protection Measures; | |
7. | Electric Construction Safety Measures Explanation and Inspection Guidelines; | |
8. | Labor Health Administration Rules; | |
9. | Labor Safety and Health Training Rules; and | |
10. | Other applicable rules concerning safety and health. |
Article 14 | Construction Insurance |
1. | Party B has obtained the insurance for Construction pursuant to the insurance content specified below. |
2. | Party B may increase the insured amount as much as it is necessary; since the insurance fees have been incorporated in the total bidding price, Party A will not compensate for any accident liabilities occurred during the term of Construction. |
3. | Content of Insurance: |
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(a) | Construction General Liability Insurance To be insured based according to the contract price, with deductibles not more than NT$100,000. | ||
(b) | Construction Third-party Liability Insurance: |
(i) | Over NT$5 million for injury or death per person; | ||
(ii) | Over NT$6 million for injury or death per accident; | ||
(iii) | Over NT$3 million for financial losses per accident; | ||
(iv) | Over NT$9 million for the overall compensation per accident; | ||
(v) | No limits on the overall compensation during the insurance term. |
(c) | Employers Accident Liability Insurance: |
(i) | Compensation of over NT$3 million for injury or death per person; | ||
(ii) | Compensation of over NT$3 million for injury or death per accident; | ||
(iii) | No limits on the compensation for death during the insurance term, and the coverage shall include all of the construction workers. | ||
(iv) | The insurance coverage shall include Party A and Party B, subcontractors designed by Party A, other contractors involved in Construction, Architect, and onsite supervisors appointed by Party A. |
(d) | Neighboring Housing Damages Liability Insurance: |
(a) | Collapse: Over NT$3 million per accident; | ||
(b) | Cracking: Over NT$3 million per accident. |
(e) | In the event of any accident that may lead to damages compensation, Party B shall act in compliance with the terms prescribed by the insurer, and shall be liable for the deductibles specified on the policy and for the compensation exceeding the claimed amount. | ||
(f) | The term of each insurance shall start from the date Construction is commenced, till the date it is inspected and accepted. | ||
(g) | In the case where the insurer requests for onsite inspection for any accident, Party B shall immediately resume its work after the onsite inspection is finished, and shall not seize its construction work on the ground of a pending |
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claim or on any other grounds. | |||
(h) | If Party B regards increasing any insurance limits described above is necessary, the additional insurance fees shall be borne by Party B. |
4. | Construction Machinery and Equipment General Insurance: | |
Party B shall prepare and maintain all of the insurances concerning its construction machinery and equipment required in Construction, installation construction general insurance, sea, land and air transportation of the purchased equipment, and insurances concerning self-owned or leased automobiles. | ||
5. | Other insurances: | |
Party B shall obtain and maintain various insurances including theft, fire insurance, accident insurance, and labor insurance, and shall be liable for all the damages and responsibilities arising from any accident. The various insurance fees borne by Party B shall be included in the total contract cost, which will not be separately paid by Party A. |
Article 15 | Safety Measures and Environmental Protection |
1. | During the term of Construction, Party B shall comply with Hazardous Work Place Review and Inspection Rules, Labor Safety and Health Act and Enforcement Rules thereof, Enforcement Rules for Labor Safety and Health Facilities, Water Contamination Prevention Act, Air Contamination Prevention Act, Air Pollution Prevention Act, and Noises Control Standards, Waste Disposal Act, Construction Safety and Health Facilities Standards, and Guidelines for Establishing Road Traffic, Sign, Lining, and Signals. Party B shall also implement precautions onsite against storms and floods, and shall appoint qualified site safety and health personnel to station onsite on a full-time basis, who shall give directions concerning safety and health measures. If due to Party Bs ignorance any accident is occurred, Party B shall be liable for all the consequences whatsoever. |
2. | During the term of Construction, if any emergency accident affects the safety of life or property, Party B may take proper actions without Architects instruction so as to prevent any loss of life or property. Still, however, Party B shall report to Party A of |
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such event within 24 hours after the occurrence, and shall follow Architects instruction, if any. |
3. | Party B shall strictly restrain its personnel from gambling, brawl, drinking, shouting, wandering, wearing strange outfit, being naked, spitting betel nut juice, littering, speeding and other action that may obstruct the peace and order of the site area. If any worker has a disease or contagious disease, Party B shall swiftly remove him/her from the Site and send him/her to a hospital. All of the accidents occurred during the term of Construction shall be handled by Party B. If any person or property of Party A is damaged, Party B shall be liable for the compensation. |
4. | Party B shall not obstruct the traffic when working on Construction. If suspension of access is required because of Construction, tentative traffic lining and safety facilities shall be provided. During the term of Construction, Party B shall set up red flags or danger warning signs onsite at the daytime. In the nighttime, Party B shall hang red lights up and fence the Site to ensure safety. Party B shall safeguard the safety of the neighboring establishments, people, animals, public facilities and private/public properties, and shall be fully liable if any accident or damage is occurred as a result of negligence. |
5. | If due to insufficient equipment or poor performance of Party A and Party Bs subcontractor life, body or property of others is damaged, Party B shall be fully liable for the consequences, and Party A shall not be liable whatsoever. |
6. | To truly ensure safety of the Site and any area overseen by Party A, the manufacturer shall set up tentative walls around the foundation, and shall control the entry/exit of the walls. |
7. | During the term of Construction, Party B shall conduct housekeeping of the Site, and ensure roads adjacent to the Site and premises within buildings clear of any waste, garbage, or materials, scaffolds, tools and other equipments that are unnecessary or disqualified, so as to maintain safety of the Site and tidiness of the working environment. Before the inspection, Party B shall clean up all the waste and miscellaneous objects from the Site and adjacent roads, and shall tidy up all of the |
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structures, at its own expense. Within 15 days after Construction is completed, Party B shall remove all of the construction facilities and unused materials for provisional constructions from the Site. | ||
8. | Party B shall unconditionally repair and restore all of the roads and adjacent environments or other facilities that have been damaged due to transportation of Party Bs materials or due to Construction. | |
9. | Before Party B completes the jobs described above, Architect and Party A will withhold their executions of Party Bs application for the outstanding final payment. |
1. | Water and power facilities: Party B shall be responsible for the supply of water and power. Party B shall unconditionally provide other construction contractors with the existing and provisional water and power supplies, but may negotiate with other users to share the costs. | |
2. | To prevent power outage, Party B shall provide itself with generators for emergency. | |
3. | Working and materials compartments and other provisional facilities: Party B shall, at its own expense, set up provisional facilities at appropriate locations around the Site with Party As approval. |
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4. | Telecommunications facilities: Party B shall provide itself with the telecommunications facilities for external contacts of Construction, and shall maintain and manage the telecommunications systems within the Site and bear the costs thereof. | |
5. | Party B shall provide Party A and Architect each with one independent office required for management and supervision of Construction, within which water, power, air conditioning, telephone, the Internet, office desks and furnishings shall be available. Party B shall be responsible for the housekeeping and hygiene of the offices and shall bear the costs thereof. | |
6. | Party B shall provide with simple visual telecommunications facilities for Party A to have birds eye view of the whole Construction of the Site. |
1. | If another construction is pursued while Construction is being built, Party B shall, in a hope to fully complete its plan, coordinate and negotiate with builders of such other construction so as to avoid construction conflicts, mutual interference, or unnecessary excavation or repair. In the event of any dispute between any two builders, Party B shall follow Architects or Party As arrangement, deployment and decision without any objection. Nor shall Party B seeks any compensation from Party A. | |
2. | Unless it is required by foundation digging, plants within the Site shall not be destroyed or removed by Party B, and may be replanted at a location designated by Party A. |
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1. | An event of force majeure; | |
2. | Party A requests all or part of Construction be suspended; | |
3. | Design is modified or amount of construction work is increased; | |
4. | Party A fails to perform its duty, or there is any reason attributable to Party A; | |
5. | Any delay of a relevant construction work that affects progress of Construction; and | |
6. | Other application of Party B that has been approved by Party A. |
1. | If Construction is not completed before the deadline pursuant to Article 5 of this Agreement, Party B shall be deemed in default, and shall be liable for a default penalty of 0.1 percent of the total contract price per day within a period of 10 days starting from the scheduled deadline, and for the days defaulted after the 10-day period, Party B shall be liable for a default penalty of 0.2 percent of the total price |
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per day, all of the default penalties are to be deducted from the construction payment payable to Party B. | ||
2. | All of the default penalties combined shall be subject to a maximum sum of 20 percent of the construction price. In the case of default, Party A may terminate this Agreement in whole or in part pursuant to Paragraph 2, Article 33 of this Agreement, and Party B shall have no objections in this regard. |
1. | Any situation otherwise specified herein; | |
2. | Seizure is necessary due to the climate conditions of the Site; and | |
3. | Any situation as a result of Party Bs negligence. |
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1. | Party B agrees to be liable for confidentiality and not to disclose to a third party any confidential information with respect to Party As business or technology that came to Party Bs awareness or became in Party Bs possession as a result of Construction. | |
2. | Party B agrees to be liable for confidentiality of the content specified in the non-disclosure agreement. |
1. | During the term of Construction, when Party A or Architect inspects quality of Construction pursuant to the applicable regulations, Party B shall provide any assistance and convenience required, and shall dispatch its personnel to assist in the matters. | |
2. | If Party A or Architect discovers the quality of work performed by Party B falls below the requirement specified herein, or when any inappropriate measure may harm safety of Construction, Party A or Architect may instruct Party B to make improvements within a time limit, or to destruct the portion of work that does not meet the requirements. If Party B fails to follow such instruction within the time limit, Party A or Architect may demand Party B suspend Construction in whole or in part, and the work shall not be resumed until improvement or destruction demanded has been completed and recognized by Party A and Architect, and Party B shall not ask for working schedule extension or compensation on this ground. | |
3 | During the term of Construction, Party B shall request for inspection according to the scheduled pipelines. In the event where Party A or Architect discovers Party B has started the work scheduled in a following pipeline without applying for inspection of the work of a certain pipeline, it may request Party B destruct the portion that has been done, and Party B shall have no objections and be liable for all the damages incurred therefrom. | |
4. | During the term of Construction, if Party B fails to make improvements according to Party As or Architects instruction, or fails to fully follow a given instruction in a |
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prescribed time limit, Party A or Architect may not enter the relevant costs on the book or may stop the payment requested, or postdate the payment check, or deduct the current construction payment from future payments according to the existing situation. Party A may also hire hands to proceed Construction, charging Party B hourly wages and materials fees based on the current market prices with a mark-up of 50 percent of the prices, and the charges will be deducted from the latest construction payment or retained payment. |
1. | Before Construction is fully completed, Party A and Architect may inspect the partial work that has been done and henceforth take over the partial work. | |
2. | Without prejudice to Party Bs performance of its duty, Party A may notify B to use the partial work that has been completed. Party A shall take it over after the parties have negotiated for the delineation of rights and obligations. The Architect shall decide with respect to whether Construction is obstructed, and Party shall not have any objection. During the term of Construction if a subject is lost or damaged because it is of a consumable or of any reason not attributable to Party B, Party A shall be liable for all the consequences, and the amount and extension of term shall be separately agreed by the parties. |
1. | When Construction is fully completed, when the application for Permit of Use has been filed, and when Construction is ready for use, Party B shall apply for inspection in writing, providing with the as-built drawing, certificate of imported materials, certificate of origin, maintenance guidance handbook, construction final calculation statement, and construction term final calculation table. After they are confirmed by Architect and Party A in a preliminary inspection, the date for an official inspection and acceptance shall be scheduled. If the primary inspection is not accepted, Party B shall submit another date of completion for another preliminary inspection. The date of completion shall be the date of primary inspection is passed. | |
2. | For the official inspection and acceptance, Party B shall dispatch its personnel to the Site. If Party B fails to be present on the Site, Party A and Architect may proceed the official inspection and acceptance, and Party B shall not have any objection towards the result of official inspection and acceptance. |
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3. | For the official inspection and acceptance, Party A and Architect may request Party B to excavate or destruct a part of Construction for inspection. Party B shall act in compliance with respect to the request and repair the destroyed work. The costs for destruction and repair shall be borne by Party B if the inspection result indicates that Party B fails to comply with this Agreement; otherwise the costs shall be borne by Party A, provided that the total amount is less than NT$100,000. If the amount is over NT$100,000, Party B shall be liable for the costs. | |
4. | If result of the official inspection indicates that Party B has failed to comply with this Agreement, Party B shall, within a period of 15 days, or undertakes to Party A and Architect, provide a deadline for modification agreed by Party A and Architect. After the modification is completed, Party B shall not ask for any compensation and shall apply for the first-time re-inspection. | |
5. | In the first-time re-inspection, if new defects are found Party B has corrected the defects found in the primary and official inspection and acceptance, Party B shall, within 10 days after the new discovery (or in a period for correction agreed by Party A and Architect) request for the second-time inspection. If the defects found in the first-time inspection have been corrected, inspection and acceptance is completed. If the defects found in the second-time inspection are not corrected, Party B shall be deemed in default and shall be liable for a default penalty of 1 percent of the total construction price per day starting from the date following the second-time inspection, till the date when all the defects are corrected. | |
6. | After inspection is completed and Construction is accepted, Architect shall report to Party A, which shall issue to Party B a certificate of completion of Construction, and shall return the performance bond to Party B after it has completed the procedures of construction warranty. Party A shall also conduct final clearing of the construction payment, and shall settle the outstanding construction payment. |
1. | Staring from acceptance and delivery of Construction, the structure of Construction is given a warranty of 10 years, and water-proofness of Construction is given a 5-year warranty. For other nature not prescribed above, Party B shall provide a warranty of 2 years. During the term of each warranty, if a part or whole of Construction suffers dislocation, leakage, cracking, collapse or other damages, which |
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has been confirmed to be resulted from unsound materials or quality rendered by Party B, Party B shall, after notified by Party A, immediately repair or remove the damage without compensation. If Party B fails to repair within five days upon receipt of the notice, Party A may hire hands to have the situation fixed, and the costs and expenses arising therefore will be deducted from Party Bs Warranty Bond, and any insufficient amount of the bond shall be paid by Party B. If Party B still cannot perform its duty, the guarantor shall return the money. Parry B shall also be liable for repair or compensation in the case where Party A or a third person suffers losses as a result of the aforementioned defect or repair. Party B shall complete the warranty procedures for Construction before asking for settlement of the outstanding payment, and shall pay the construction warranty bond (with a written guarantee endorsed by a bank), which is in the amount of 3 percent of the construction clearing payment. | ||
2. | Warrant of Construction can be divided into two terms. The first term is six month from inspection and acceptance. If Party B completed the correction of any defect pursuant to the preceding paragraph, after three months an amount of 60 percent of the warranty bond shall be returned. | |
3. | The second term is two years from inspection and acceptance of Construction, and when Party B has corrected the defects as required, Party A shall return to Party B the remaining warranty bond. Still, Party Bs warranty liabilities under this Agreement shall conform to the provision of Paragraph 1, Article 31 of this Agreement. |
1. | This Agreement is discharged or terminated at Party As request: | |
Whenever required, or when the court or governmental institution gives an order of stoppage for a period of over 180 days in accordance with the law, Party A may discharge or terminate this Agreement. Once notified, Party B shall immediately stop its operation. Party A shall, not only inspect the work that has been completed by |
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Party B as well as the qualified machinery and equipment onsite, and pay to Party B the unit prices based on the price list attached hereto (in the case of absence of such list, the prices shall be separately agreed by the parties), it shall also negotiate with Party B for a resolution. Party B shall continue to maintain the work that has been completed until Party B takes it over. After this Agreement is terminated, Party B shall still be liable for all the obligations specified herein. | ||
2. | This Agreement is discharged or terminated due to Party Bs negligence: | |
In the event where Party B has any one of the situations below, Party A may terminate this Agreement any time and may invite other bidders to finish a whole or part of Construction, or may complete Construction by itself. Party B and its guarantor shall be jointly liable for all the damages arising therefrom. |
(a) | Party B bids for Construction under another persons trade name. | ||
(b) | Party B fails to commence its work for over 30 days on the scheduled commencement date. | ||
(c) | Party B lags behind in its progress of Construction, and it is foreseeable that Construction will not be completed according to the schedule, or Party B is rash in its performance of Construction, without following Party As instruction for corrections. | ||
(d) | Before Construction is fully completed, Party B seizes its operation for over 15 days without justified causes. | ||
(e) | Party B fails to comply with the requirements specified herein. |
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3. | This Agreement is discharged or terminated due to Party As negligence: |
(a) | Party A requests reduction of the construction price down to 50 percent of the original price. | ||
(b) | Party A request stoppage for over 180 days for any reason not attributable to Party B. | ||
(c) | It is foreseeable that Party A is unable to pay the construction price. When this Agreement is terminated pursuant to this paragraph, Party A shall, not only pay to Party B for the all the work completed and the qualified machinery and equipment onsite, but also compensate Party B for all the damages arising from termination of this Agreement, including: employee severance pay, dismantling fee of machinery, equipment, and non-purchased instrument, and the stoppage fee starting from the date this Agreement is terminated till Party B vacates the Site. However, lost of Party Bs expected profit in relation to this Agreement, or of the opportunity forfeited to perform this Agreement shall not be any ground for damages as result of termination of this Agreement. |
1. | Within three days after the bid is awarded, the winning bidder shall come to Party A and Architect for agreement documents, and shall execute the Construction Agreement within 30 days after the bid is awarded. | |
2. | Upon execution of this Agreement, Party B shall provide a performance bond equivalent to 10 percent of the contract price in the form of a Bank of Taiwan check, bank draft, bears government bond, certificate of deposit, joint guarantee, joint guaranteed insurance policy, or standby letter of credit issued by a financial institution. The performance bond described above or guarantee form shall be paid in four installments, each is in the amount of a quarter of the construction price, and |
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shall be returned without interest. | ||
3. | If this Agreement is amended or additional new work is incorporated, the additional or reduced construction price shall be counted in the original contract price, and Party A may suffice or return the performance bond proportionally. |
1. | In the case of any dispute between the parties with respect to any provision of this Agreement, and when Architects decision are not satisfied by the parties, the parties shall resort to the Arbitration Association of the Republic of China, and solve the dispute through arbitration in accordance with the arbitration procedures of the Association. | |
2. | If the parties do not want to solve the dispute through arbitration, when any action is imitated concerning a dispute, the parties hereby agree to submit to the Taipei District Court in the first instance. | |
3. | When the dispute case is still pending, Party B shall not seize its operation without Party As consent, and shall continue to perform its obligations hereunder. | |
4. | In the event where the construction payment is retained by the courts order due to any financial dispute between Party B and another party, Party B shall not seize its payment on this ground, and shall be liable for all the costs and damages incurred. |
1. | This Agreement shall be executed in two originals, each shall be retained by one party. Party A shall retain three copies of the original, Architect one party, and Party B two copies. The parties and Architect each shall also retain one copy of the summary copy. |
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2. | The parties shall be responsible for the stamp duty of their respective original of this Agreement. |
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Party A: Impax Laboratories (Taiwan), Inc.
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Party B: Fu Tsu Construction | |
Responsible Person: Hsu, Chung-Chiang
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Responsible Person: Lin Chi-Sheng | |
Uniform Invoice No.: 28112462
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Uniform Invoice No.: 14054955 | |
Address:
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Address: 14-16/Fls., 27 Zhongshan N. Rd., Sec. 1, Taipei | |
Tel. No.: (037) 586-268
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Tel. No.: (02) 2551-7559 | |
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Architect: J. J. Pan and Partners
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Address: 21, Lane 12, Alley 118, Renai Rd.,
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Sec. 3, Taipei
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Tel. No.: (02)2701-2617
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Jurisdiction of Incorporation | ||||
or Organization | Ownership | |||
Impax Laboratories (Taiwan) Inc.
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Taiwan, Republic of China | 100% | ||
Impax Laboratories (Cayman), Ltd.
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Cayman Islands | 100% | ||
Prohealth Biotech, Inc.
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Taiwan, Republic of China | 58.68% |
1. | I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2008 of Impax Laboratories, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | [Intentionally omitted]; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
March 12, 2009 | By: | /s/ Larry Hsu, Ph.D. | ||
Larry Hsu, Ph.D. | ||||
President and Chief Executive Officer | ||||
1. | I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2008 of Impax Laboratories, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | [Intentionally omitted]; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
March 12, 2009 | By: | /s/ Arthur A. Koch, Jr. | ||
Arthur A. Koch, Jr. | ||||
Senior Vice President, Finance, and
Chief Financial Officer |
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(1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
March 12, 2009 | By: | /s/ Larry Hsu, Ph.D. | ||
Larry Hsu, Ph.D. | ||||
President and Chief Executive Officer | ||||
March 12, 2009 | By: | /s/ Arthur A. Koch, Jr. | ||
Arthur A. Koch, Jr. | ||||
Senior Vice President, Finance, and
Chief Financial Officer |
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