EXHIBIT 10.43
DEVELOPMENT,
LICENSE AND SUPPLY AGREEMENT
dated as of August 20, 1997
between
EURAND AMERICA, INC
000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
and
GLOBAL PHARMACEUTICAL CORPORATION
Xxxxxx & Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx. XX 00000-0000
for
PANCRELIPASE
Table of Contents
1. DEFINITIONS 5
2. DEVELOPMENT PROGRAM 7
2.1 THE DEVELOPMENT PROGRAM 7
2.2 REGULATORY FILINGS 7
2.3 PAYMENTS FOR DEVELOPMENT 8
3. GRANT OF LICENSE 9
3.1 GRANT OF LICENSE 9
3.2 THE EXCLUSIVITY OF THE LICENSE 9
4. REGISTRATION AND LAUNCH OBLIGATIONS OF GLOBAL 9
4.1 REGISTRATION OBLIGATIONS OF GLOBAL 9
4.2 LAUNCH OF THE FINISHED DOSAGE FORM 10
4.3 COMPETING DOSAGE FORMS 11
5. OWNERSHIP AND USE OF KNOW-HOW 11
5.1 OWNERSHIP 11
5.2 ADDITIONAL USE 12
5.3 PATENTS 12
6. SALE OF THE PRODUCT 13
6.1 STANDARD OF MANUFACTURE 13
6.2 RlGHT OF REVIEW 13
6.3 REPRESENTATIONS AND WARRANTIES 14
6.4 PURCHASE. AND SALE 15
6.5 DELIVERY SCHEDULE 15
6.6 TITLE, RISK OF LOSS 15
7. PRICES 15
7.1 PRICES AND PRICE CHANGES 15
7.2 PAYMENT TERMS 16
8. ROYALTIES 16
8.1 ROYALTIES 16
8.2 TAXES [7
8.3 CURRENCY 18
2
9 TERM 18
9.1 BASIC TERM 18
9.2 EARLY TERMINATION BY REASON OF PATENT LITIGATION 18
9.3 SALE OF FINISHED DOSAGE FORM FOLLOWING XXXXXXXXXXX 00
00. EVENTS OF DEFAULT, REMEDIES AND EFFECTS OF DEFAULT 19
10.1 EVENTS OF DEFAULT 19
10.2 REMEDIES FOR BREACH 19
11. INDEMNIFTCATION 20
11.1 INDEMNIFlCATTON OF GLOBAL 20
11.2 INDEMNIFICATION OF EURAND 20
11.3 NOTICE AND LEGAL DEFENSE 20
12. MISCELLANEOUS 21
12.1 ASSIGNMENT 21
12.2 CONFIDENTIALITY 21
12.3 EXCHANGE OF INFORMATION 22
12.4 FORCE MAJEURE 23
12.5 AMENDMENTS 23
12.6 NO IMPLIED WAVER 23
12.7 CHOICE OF LAW 23
12.8 NOTICES 23
12.9 EXECUTION OF ADDITIONAL 24
12.10 SEVERABILITY 24
12.11 CAPTIONS 24
12.12 COUNTERPARTS 24
12.13 MINIMUM ANNUAL PURCHASE 25
3
THIS DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT, dated as of August 20, 1997 (the
"Effective Date"), between EURAND AMERICA, INC. a corporation organized under
the laws of Nevada, with its principal offices at 000 Xxxxxx Xxxxx, Xxxxxxxx,
Xxxx 00000 ("EURAND"), and GLOBAL PHARMACEUTlCAL CORPORATION, a corporation
organized under the laws of the State of Delaware, with its principal offices at
Castor & Kensington Avenue:, Philadelphia. PA 19124-5694 ("GLOBAL");
WITNESSETH THAT:
WHEREAS, EURAND is the owner of original processes and know-how for the
development and manufacture of encapsulated pharmaceutical substances;
WHERAS, EURAND and GLOBAL entered into a Confidentiality Agreement,
(the "Confidentiality Agreement), pursuant to which the parties exchanged
confidential information relating to this proposed cooperative effort;
WHEREAS, GLOBAL desires that EURAND undertake a development program
directed towards producing spheronized, encapsulated compositions containing
pancreatic enzymes having the specifications agreed upon between GLOBAL and
EURAND,
WHERE AS, EURAND is willing to undertake such a development program on
the terms and conditions set forth hereinafter;
WHEREAS, GLOBAL desires to receive a license to market and sell a
product containing such spheronized, encapsulated products as developed and
manufactured by EURAND arid EURAND is willing to grant such a license on the
terms and conditions set forth hereinafter;
4
NOW, THEREFORE, in consideration of the agreements and covenants
hereinafter set forth and intending to be legally bound hereby, the parties
hereto covenant and agree as follows:
1. DEFINITIONS
1.1 "Active Ingredient" means the mixture of lipases, proteases
and amylases set forth in Exhibit B.
1.2 "Affiliate" means, with reference to any Person, any other
Person directly or indirectly controlling, controlled or under
common control with such Person, and "control" means the power
to direct the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise.
1.3 Applicable Laws" means all laws1 treaties, ordinances,
judgments, decrees, directives, injunctions, orders of any
court, arbitrator or governmental agency or authority, rules,
regulations, interpretations, authorizations and Applicable
Permits of any international, national, regional, local or
other governmental body, agency, authority, court or Person
having jurisdiction over or related to the development,
registration, manufacture and sale of the Finished Dosage
Form, as maybe in effect from time to time.
1.4 "Applicable Permits" means any waiver, exemption, variance,
permit, license or similar approval, including, without
limitation, product registrations by health or other
government entities, required to be obtained or maintained
under Applicable Laws in connection with the development,
registration, manufacture and/or sale of the Finished Dosage
Form.
1.5 "Approval Date" means, with respect to a particular country in
the Territory, the date on which all Applicable Permits
necessary for sale of the Finished Dosage Form In such country
have been issued.
5
1.6 "Contract Year" means, for the first Contract Year, the period
ending twelve (12) months afterthe date first above written
and for the second and subsequent Contract Years, the twelve
(12) month period commencing on the day following the
anniversary of the end of the first and subsequent Contract
Years, respectively.
1.7 "FDA" shall mean the Food and Drug Administration in the
United States.
1.8 "Finished Dosage Form" means the composition produced by
GLOBAL from the Product, labeled, packaged and ready for Sale
to wholesalers, current and/or potential customers.
1.9 "Force Majeure" means any cause or causes which wholly or
partially prevent or delay the performance of obligations
arising under this Agreement and which are not reasonably
within the control of the non-performing party, including acts
of God, government regulations, labor disputes, floods, fires,
civil commotion, embargoes, quotas, shortage of labor or
materials or any delays in transportation or detention by
customs, health or other government authorities.
1.10 Know-How" means proprietary know-how, trade secrets,
inventions, data, technology and other proprietary
information, which a party hereto has the lawful right to
disclose to the other party. "Know-How" shall include, without
limitation, processes and analytical methodology used in
development, testing analysis and manufacture and medical,
clinical, toxicological testing as well as other scientific
data.
1.11 "Product" means a spheronized, encapsulated composition
containing the Active ingredient and certain excipients, said
composition being produced by EURAND and meeting the
Specifications (as hereinafter defined). As used herein to
distinguish among the Products, the notations "Product A"
"Product B" and "Product C" shall mean, respectively, those
Products having USP Lipas. contents of 10,000; 16,000 and
20,000, all of which are included within the definition of
Products.
6
1.12 "Product Formulation" means the developed formulation required
to convert the Active Ingredient into Product
1.13 "Net Royalties" means royalties due on Net Sales.
1.14 "Net Sale:" means the aggregate invoiced sales Of the Finished
Dosage Form by GLOBAL less returns (excluding recalls and
which shall not to exceed 7%), discounts, rebates, shipping
charges, as well as duties, custom: or other governmental
charges.
1.15 "Person" means any individual, Partnership1 association, joint
venture or corporation
1.16 "Specifications" means the specifications for Product as
stated in an exhibit B to be attached hereto upon such
agreement.
1.17 "Territory" means the United States of America, its
territories and possessions.
1.18 "Act:" shall mean the Federal Food, Drug and Cosmetic Act, as
amended from time to time.
1.19 "cGMP" shall mean current Good Manufacturing Practices as
defined in regulations promulgated by the FDA under the Act
1.20 "Effective Date" shall mean the date set forth in line 2 of
page 4 hereof.
2. DEVELOPMENT PROGRAM
2.1 The Development Program. GLOBAL hereby engages EURAND, and
EURAND hereby agrees, to perform the work described in Exhibit
A (the "Development Program"). In connection therewith, EURAND
represents that it has, and shall continue to during the term
here of, make available such of its scientific, engineering.
manufacturing and other personnel, which, in its discretion,
are necessary to perform EURAND's obligations in accordance
with die terms hereof. EURAND shall report to GLOBAL quarterly
as to its progress In the Developmental Program with updates
as necessary.
7
2.2 Regulatory Filings. Subject to the provisions of Paragraph
4.1(a), GLOBAL shall diligently prepare all necessary
applications to obtain Applicable Permits to market the
finished Dosage Form in the Territory, which Applicable
Permits shall be owned by GLOBAL. EURAND shall assist GLOBAL
with such information and in such manner as Global shall
reasonably request in thc preparation and prosecution of
applications required to obtain such Applicable Permits. So
long as the license in Paragraph 3.1 hereof is exclusive
neither EURAND nor its Affiliates shall file in the Territory
an NDA and/or an ANDA directed to the Product GLOBAL shall
provide ~ with sufficient opportunity to review and comment
upon all regulatory filings prior to their submission and
shall include such changes Is they relate to the Development
Program as are reasonably requested by EURAND. It is agreed
that EURAND shell conduct its review and provide any comments
resulting therefrom to GLOBAL within twenty (20) business days
Of its receipt of such proposed filings. EURAND shall be
deemed to have no comments thereon unless GLOBAL is notified
thereof within the aforementioned twenty (20) business day
period.
2.3 Payments for Development
(a) In consideration of EURAND's performance in
accordance with the terms and conditions of this
Agreement as defined in Exhibit A, GLOBAL shall make
the following payments to EURAND:
(I) Upon execution of this Agreement $100,000.00
(ii) Upon the first business day or $100,000.00
each of the next three (3)
calendar quarters immediately
following the Effective Date
(iii) Upon release and supply of $1 00,000.00
pivotal batches of Product as
necessary for clinical study
8
(b) In addition to the milestone payments set forth in
paragraph (a) hereof, GLOBAL shall be responsible for
the following additional materials, development costs
and/or expenses:
(i) the cost of any development or registration
work performed by EURAND at the request of
GLOBAL, above and beyond the defined work of
the Development Program;
(ii) A process fee for each validation batch of
Product (the number of validation batches
not to exceed the three [3] without
agreement by the parties) at a cost of
EURAND's Manufacturing Cost for Product +
10%;
(iii) The cost of any bio-studies performed by
GLOBAL In conjunction with the Development
Program; and
(iv) The reasonable expense associated with
travel of EURAND personnel associated with
the Development Project, such travel having
been previously authorized by GLOBAL.
(c) Product which meets the Specifications and is
produced in the validation batches is agreed to be
the property of GLOBAL and will be provided to GLOBAL
at a cost determined in accordance with (ii) above
F.O.B. plant in Vandalia, Ohio immediately following
validation.
3. GRANT OF LICENSE
3.1 Grant of License. Subject to the terms sot forth herein and in
consideration for the payments set forth in Articles 2.3 and
8.1 hereof, EURAND hereby grants to GLOBAL an exclusive
royalty-baring license for the term of this Agreement within
the territory to (i) use the Product in the manufacture of the
Finished Dosage Form, aid (ii) use, offer for sale and sell
the Finished Dosage Form.
3.2 Exclusivity. The exclusivity of the license granted pursuant
to Paragraph 3.1 may be converted to non-exclusive by
operation of Paragraphs 4.2,4.3 and/or 12.13.
4. REGISTRATION AND LAUNCH OBLIGATIONS OF GLOBAL
4.1 Registration Obligations of GLOBAL
9
(a) GLOBAL shall initiate all clinical studies within
twelve (12) months of provision of validation batches
by EURAND to GLOBAL, but not before May 1999. GLOBAL
shall exercise commercially reasonable efforts to
apply for Applicable Permits and secure Approval
Dates for the Finished Dosage Form In the Territory
as quickly as possible. Notwithstanding any provision
in this Agreement to the contrary, GLOBAL shall have
no obligation to apply for or obtain Applicable
Permits in the Territory if such registration or
approval is reasonably deemed by GLOBAL to be
unnecessary to market the Finished Dosage Form in
such country. GLOBAL hereby agrees that exertion of
"commercially reasonable efforts" shall mean the same
efforts that GLOBAL devotes to its other major
pharmaceutical products in the Territory and shall
include, without limitation, the submission by GLOBAL
of any additional documentation on the Finished
Dosage Form required under Applicable Laws.
(b) GLOBAL and EURAND shall exchange with each other
copies of any "in-vivo" clinical studies performed on
the Finished Dosage Form during the term of this
Agreement. Each party may use any of such studies,
including in the registration or promotion of the
Finished Dosage Form by either party or its
subdistributors in any country excluding Canada and
the Territory.
(c) During the term of this Agreement, GLOBAL shall
provide EURAND with a report on the status of
progress of all Applicable Permits in the Territory
every three (3) months until thc Approval Data in
each country. GLOBAL shall notify EURAND of the
submission date of each application for the
Applicable Permits and the Approval Date thereof not
later than two (2) weeks after said dates.
4.2 Launch of the Finished Dosage Form
10
(a) Subject to the receipt of Product from Eurand as
provided in Article 6 hereof, GLOBAL shall launch the
Finished Dosage Form in the Territory promptly after
receipt of the Applicable Permits with respect to the
sale of the Finished Dosage Form. GLOBAL shall
continue to sell the Finished Dosage Form on a
nationwide basis using the same efforts that GLOBAL
devotes to its other major pharmaceutical products in
such country.
(b) (I) So long as EURAND has completed the Development
Program and has supplied GLOBAL with Product meeting
the Specifications and suitable for use in a clinical
study in accordance with the time period(s) indicated
in the Development Program, GLOBAL shall apply for
Applicable Permits to market and sell the Finished
Dosage Form in the Territory within three (3) years
of the date of this Agreement Should GLOBAL fail to
do so within the aforementioned three (3) year
period, EURAND may, in its sole discretion, convert
the license under Paragraph 3.1 hereof to a
non-exclusive license. (ii) If the Applicable Permits
fail to issue within three (3) years of such filing,
EURAND may, in its sole discretion, convert the
license under Paragraph 3.1 hereof to a non-exclusive
license. However, so long as the Applicable Permits
have been timely filed pursuant to Article 4.2(b)(i)
hereof, EURAND agrees to negotiate in good faith with
GLOBAL toward the granting to GLOBAL of an extension
to such three year period.
4.3 Competing Dosage Forms. The license granted under Paragraph
3.1 hereof shall automatically convert to non-exclusive should
GLOBAL market in the Territory another product containing
pancreatic enzymes in a dosage form similar or identical to
the Finished Dosage Form, except for products supplied to
GLOBAL by EURAND or products containing pancreatic enzymes in
combination with other active ingredients.
11
5. OWNERSHIP AND USE OF KNOW-HOW
5.1 Ownership. Except as specifically provided in Paragraph 5.2
below, Know-How developed by either party or jointly by the
parties during the course of the performance of this
Agreement, including patents thereof, shall be (i) the
property of EURAND if related to the Active Ingredient, the
Product and/or its production (including modifications or
improvements thereto) plus any drug delivery systems or
technologies, or (ii) the property of GLOBAL if related solely
to the manufacture or use of the Finished Dosage Form. Each
party shall be free to use and practice such Know-How owned by
it in any application (not inconsistent with the terms of this
Agreement) without the consent of the other and without an
obligation to notify the other party of such intended use or
to pay royalties or other compensation to the other by reason
of such use. Know-How owned prior to the date hereof by either
party shall continue to be owned exclusively by such party.
5.2 Additional Use. In addition to EURAND's rights described in
Section 5.1, and notwithstanding any other provision of this
Agreement, EURAND shall have the right to use, disclose and
license to any third parties (except those in Canada) all
Know-How developed by GLOBAL during the course of the
performance of this Agreement which is directed to the
manufacture of the Finished Dosage Form from the Product
("Manufacturing Technical Information"), provided such use,
disclosure or license does not conflict, directly or
indirectly. with the rights granted to GLOBAL under this
Agreement
5.3 Patents. Each party shall be responsible, at its own expense,
for filing and prosecuting patent applications, as it deems
appropriate, and for paying maintenance fees on any patents
issuing therefrom, for the term of this Agreement, with
respect to inventions
12
owned by it. Each party shall promptly render all necessary
assistance reasonably requested by the other party (at such
requesting party's sole expense) in applying for and
prosecuting patent applications based on inventions owned by
such other party under this Agreement Patents covering jointly
owned Manufacturing Technical Information shall be owned by
the parties jointly, and the parties shall share equally in
the expenses of filing for and inaintaining such patents.
6. SALE OF THE PRODUCT
6.1 Standard of Manufacture. EURAND shall supply GLOBAL with
Product meeting the Specifications. All Product supplied by
EURAND to GLOBAL hereunder shall be produced in accordance
with cGMP and shall not be adulterated or misbranded within
the meaning of the Act. Each shipment of Product from EURAND
to GLOBAL shall be sampled and analyzed by EURAND to determine
if the shipment meets the Specifications. EURAND shall deliver
to GLOBAL with each shipment of the Product a certificate of
analysis stating that the Product meets the Specifications.
EURAND shall maintain all batch records relating to the
manufacture of the Product. GLOBAL may audit such batch
records upon the provision of reasonable notice to EURAND.
6.2 Right of Review. GLOBAL may conduct its own analyses on each
shipment of the Product received pursuant to this Agreement.
GLOBAL shall notify EURAND within sixty (60) days after
delivery of the Product if the same does not meet the
Specifications or is adulterated or misbranded within the
meaning of the Act. Any dispute arising between EURAND and
GLOBAL concerning the conformity of any shipment of Product
which cannot be settled between the two parties shall be
submitted to an independent expert. Said independent expert
shall be mutually agreed to by the parties. In the event
13
that such agreement cannot be reached, each party will
independently select an independent expert and such two (2)
independent experts shall select a third independent expert
who will then determine if the Product meets the
Specifications and is misbranded or adulterated within the
meaning of the Act. The decision of said expert shall be
binding on EURAND and GLOBAL. The charges, including the fees
and expenses of the expert, relating to any dispute described
in this paragraph shall be paid by EURAND if the expert
declares the delivery not to be in conformity or by GLOBAL if
the expert declares the delivery to be in conformity. GLOBAL
is responsible for the release of the Finished Dosage Form for
sale.
6.3 Representations and Warranties.
(a) Each party represents and warrants to the other that
it is authorized to enter into and to perform its
obligations under this Agreement.
(b) Each party represents and warrants to the other that
the rights granted by it hereunder and its
obligations created under this Agreement do not
conflict in any manner with any rights previously
granted by it or any of its previous obligations.
(c) GLOBAL represents and warrants that to the best of
its knowledge, the sale and/or use of the Finished
Dosage Form does not infringe any patent or
intellectual property rights of any third party in
the Territory.
(d) EURAND represents that:
(i) the Product delivered pursuant to this
Agreement shall meet the Specifications and
shall not be adulterated or misbranded
within the meaning of the Act;
(ii) it will comply with all Applicable Laws in
the United States (or any other country of
Product manufacture) in the production of
the Product.
(iii) the use, manufacture, distribution or sale
of the Product, Product Formulation and/or
Active Ingredient in any portion of the
Territory does not violate or
14
Infringe in any respect, and it has no
knowledge5e of any pending or threatened
claim or legal action asserting that any
such use, manufacture, production,
distribution or sale violates or infringes,
any extant patents, trade secrets,
trademarks, or other extant industrial or
intellectual property rights of any third
party; and
(iv) there is no pending or threatened claim or
legal action concerning adulteration or
misbranding of the Product in the Territory.
EURAND expressly disclaims all other warranties whether express or
implied with respect to the Product, whether as to merchantability, fitness for
a particular purpose or any other matter.
6.4 Purchase and Sale. Subject to the provisions of Paragraph 3.2,
EURAND shall sell and deliver to GLOBAL, and GLOBAL shall
purchase and accept GLOBAL's total requirements of Product for
the Territory as ordered pursuant to Paragraph 6.5 below.
6.5 Delivery Schedule. Commencing on the Effective Date, GLOBAL
shall establish a four (4) calendar quarter forecast covering
its estimated requirements, based on manufacturing batch sizes
and multiples thereof, and the desired delivery dates of the
Product. No later than September 30 and March 31 of each
calendar year during the term of this Agreement GLOBAL shall
provide EURAND with a good faith estimate of tile amount and
timing of the Product to be delivered to GLOBAL during the
four (4) quarters commencing the following January I and July
1, respectively. GLOBAL shall place its firm orders at least
twelve (12) weeks prior to the desired date of shipment.
EURAND shall not be obligated to fill orders exceeding the
immediately preceding forecast by more than thirty percent
(30%) but shall make commercially reasonable efforts to do so.
6.6 Title. Risk of Loss. Risk of 1055 with respect to the Product
shall pass from EURAND to GLOBAL upon delivery to GLOBAL's
carrier at EURAND's manufacturing plant,
15
currently in Vandalia, Ohio. Title to the Product shall pass
to GLOBAL upon receipt of payment for said Product.
7. PRICES
7.1 Prices and Price Changes.
(a) EURAND shall sell, and GLOBAL shall buy, the Product
at the price of EURAND's manufacturing costs plus
10%, F.O.B. plant in Vandalia, Ohio. Manufacturing
costs are to be determined in accordance with Exhibit
C.
(b) EURAND shall be entitled to adjust the price set
forth in Article 7.1(a) to reflect changes In its
manufacturing costs. Such adjustments may be made no
more than once per calendar year in accordance with
its manufacturing costs. EURAND shall notify GLOBAL
of the revised price of the Product during the last
quarter of each calendar year during the term of the
Agreement. The revised price shall be applied to any
delivery of Product made during the following
calendar year. In addition, the price applicable
during any calendar year may be adjusted by EURAND as
soon as is practicable after thirty (30) days written
notice to GLOBAL, to cover one hundred percent (100%)
of any additional cost or expense of manufacturing
Product, to the extent that a change in manufacturing
technique is requested by GLOBAL or required by a
change in Applicable Laws (including a change in
cGMP), or due to an increase in the cost of raw
materials.
7.2 Payment Terms. EURAND shall send to GLOBAL an invoice showing
the amount due under Section 7.1 with each shipment. GLOBAL
shall pay EURAND the amount due thirty (30) days of the date
of invoice. GLOBAL shall have the right, however, to set off
against invoices received for Product to the extent that
Product previously received and paid for by GLOBAL is properly
rejected in accordance with Paragraph 6.2 hereof.
8. ROYALTIES
16
8.1 Royalties.
(a) GLOBAL shall pay EURAND a Net Royalty of eight
percent (8%) of the Net Sales of the Finished Dosage
Form sold by GLOBAL in the Territory during the term
of this Agreement No later than thirty (30) days
after the end of each calendar quarter, GLOBAL shall
report to EURAND the Net Sales of the Finished Dosage
Form and the Net Royalties due during each calendar
quarter in each country of the Territory in the
previous calendar quarter. The payment by GLOBAL to
EURAND shall be in U.S. Dollars and shall be made
forty-five(45) day, after the end of each calendar
quarter. Payment shall be made by such means to
assure that the funds of such payment are immediately
available to EURAND at the end of such forty-five day
period. GLOBAL shall keep true and accurate books of
account and shall keep and maintain all records and
documents necessary for EURAND to ascertain the Net
Royalties due under this Agreement.
(b) Upon the provision of reasonable notice, EURAND shall
have the right to designate a firm of certified
public accountants to inspect GLOBAL's books of
account, records, documents and instruments and to
make copies thereof, at any time during GLOBAL's
regular business hours during the term of this
Agreement and for a period of two (2) years
immediately after termination of this Agreement, to
ascertain the accuracy of such report. The expense of
such audit shall be EURAND's unless the audit shall
demonstrate a discrepancy greater than live percent
(5%) between Net Royalties reported and paid and
those which were actually due, in which event the
expenses or audit shall be borne by GLOBAL. Such
audits shall not be conducted more frequently than
once per calendar year.
8.2 Taxes. All taxes, assessments, fees and other charges, if any,
levied under the laws or regulations with respect to payments
due to EURAND hereunder shall be for the account
17
of EURAND, and if required to be withheld from payments to
EURAND, shall he deducted by GLOBAL from such payments to
EURAND. Receipts, if available, for all such withholdings
shall bc provided to EURAND. GLOBAL shall be responsible for
establishing its right to claim any exemption to such charges
or to its withholding, shall keep EURAND advised in writing of
the basis and status of all such exemption claims, and, except
to the extent such exemption claim is based upon the false)
inaccurate or misleading information furnished by or on behalf
of EURAND, shall be liable for any penalty. interest or other
assessment against EURAND arising solely from such failure to
pay or withhold such charges in reliance on any such exemption
claim.
8.3 Currency. All payments to be paid to EURAND hereunder shall be
computed and made in United States Dollars.
9. TERM
9.1 Basic Term. Unless modified by the Operation of Article 10.2
hereof, this Agreement shall be effective from the date first
above written and shall continue for an initial period often
(10) years thereafter. Thereafter, this Agreement shall
automatically renew itself and thereby continue in force for
consecutive periods of two (2) years, provided that this
Agreement may be terminated by either party upon provision of
one (1) year's prior written notice delivered to the other
party in year nine (9) of the initial term or any time during
the subsequent two (2) year terms.
9.2 Early Termination by Reason of Patent Litigation.
Notwithstanding Section 9.1 hereof and subject to the
operation of the second paragraph of this provision, in the
event that either party to this Agreement is named in a
third-party patent litigation related to the subject matter of
this Agreement and that seeks an award of damages or an
injunction, either party shall have the right at any time
thereafter to terminate this Agreement upon
18
sixty (60) days prior written notice without further
obligation to the other except for obligations incurred prior
to the time of such notice.
So long as the license granted pursuant to Article 3
hereof is exclusive, prior to early termination or this
Agreement the parties agree to seek an opinion from an
Independent counsel acceptable to both parties. If such patent
counsel determines that the Product and/or Finished Dosage
Form cannot be mad; used, marketed and/or sold in the
Territory under the rights possessed by the parties without
infringing the rights of such third party, the parties shall
jointly or independently endeavor to secure a license from the
third party on terms acceptable to bath parties. If such
license cannot bc reasonably secured, either party may
terminate the Agreement as provided immediately above.
9.3 Sale of Finished Dosage Farm Following Termination Unless
termination of the Agreement occurred due to a breach by
GLOBAL, GLOBAL may sell its inventory of Finished Dosage Form
existing as of the date of such termination for a period of up
to six(6) months. Such termination shall not relieve GLOBAL of
its royalty obligations on such sales.
10. EVENTS OF DEFAULT, REMEDIES AND EFFECTS OF DEFAULT
10.1 Events of Default. An event of default under this Agreement
shall he deemed to exist upon the occurrence or any one or
more of the following events:
(a) failure by either xxxxx hereto to perform fully any
material provision of this Agreement and such failure
continues (i) for a period of sixty (60) days after
notice of such nonperformance or (ii) if the
non-performing Party shall commence within such sixty
(60) days and shall thereafter proceed with all due
diligence to cure such failure, such failure is not
cured within such longer period (not to exceed sixty
[60]
19
days) as shall be reasonably necessary for such party
to cure the same with all due diligence: or
(b) failure of GLOBAL to pay any amount due and owing to
EURAND, failure continues for a period of thirty (30)
days after written notice of such non-payment;
unless, however, such non-payment is due to a good
faith dispute concerning the amount owed.
10.2 Remedies for Breach Termination. Upon the occurrence and
during the continuation of any event of default thereunder,
the party not in default may terminate this Agreement in whole
or only with regard to the provision which has given rise to
the event of, default and pursue any other remedies provided
under this Agreement or available at law.
11. INDEMNIFICATION
11.1 Indemnification of GLOBAL. EURAND shall indemnity and hold
GLOBAL harmless from and against all damages, losses,
expenses, claims, demands, Suits, penalties, judgments or
administrative and judicial orders and liabilities (including
reasonable counsel fees and expenses) incurred, assessed or
sustained by GLOBAL, its officers. director; and employees and
agents with respect to or involving or arising out of a breach
of the warranties in Section 6.3 hereof by EURAND and/or the
manufacturing of Product regardless of whether the claim is
based in contract, strict liability, warranty or any other
legal theory.
11.2 Indemnification of EURAND. GLOBAL shall indemnify and hold
EURAND harmless from and against all damages, losses,
expenses, claims, demands, suits, penalties, judgments or
administrative and judicial orders and liabilities (including
reasonable counsel fees and expenses) incurred, assessed or
sustained by EURAND, its officers, directors, employees, and
agents with respect to or involving or arising out of a breach
of
20
warranties in Section 6.3 hereof by GLOBAL (except to the
extent covered by the indemnification provisions of Section
11.1 hereof), and/or the sale, packaging, advertising,
distribution or use of the Finished Dosage Form, regardless of
whether the claim is based in contract, strict liability,
warranty or any other legal theory.
11.3 Notice and Legal Defense. Promptly after receipt by a party
hereunder of any claim or notice of the commencement of any
action, administrative Or legal proceeding, or investigation
as to which the indemnity provided for in Section 11.1 and
11.2 hereof may apply, the party seeking indemnification shall
notify the indemnifying party of such fact; provided that the
failure to so notify shall not release an indemnifying party
of its obligation hereunder unless such failure shall be
materially detrimental to the defense of any such action,
proceeding or investigation. The indemnifying party shall
assume the defense thereof; provided however, that if the
defendants in any such action include both the party seeking
indemnification and the indemnifying party and the party
seeking indemnification shall reasonably conclude that there
may he legal defenses available to it which are different from
or additional to, or inconsistent with, those available to the
indemnifying party, the party seeking indemnification shall
have the right to select separate counsel to participate in
the defense of such action on behalf of such party seeking
indemnification, at the indemnifying party's expense.
12. MISCELLANEOUS
12.1 Assignment Neither this Agreement nor any interest herein may
be assigned, in whole or in part, by either party hereto
without the prior written consent of the other party hereto,
provided, that either party shall have the right to assign all
or part of its rights, interest and obligations to an
Affiliate, a successor to a controlling or majority share of
such party or to a successor to substantially all the business
to which this Agreement
21
relates. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of the parties hereto
and their respective permitted successors and assigns.
12.2 Confidentiality.
(a) Any and all information provided by one party to the other
pursuant to this Agreement or the Confidentiality Agreement
shall be deemed to be confidential information ("Confidential
Information"). The obligations of confidentiality present in
this Agreement supersede those contained in the
Confidentiality Agreement. Each party will hold Confidential
information in complete confidence and will not, without the
prior written consent of the other, use or disclose it in
whole or in part to any person other than for the purposes set
forth in this Agreement for a period ending five (5) years
following expiration of this Agreement. Each party will be
entitled to disclose any such Confidential Information to such
of its professional advisers, directors, officers and senior
employees who are directly concerned with this Agreement and
its implementation and whose knowledge of such information is
necessary for these purposes. Each party will use its
reasonable efforts to ensure that each individual to whom such
a disclosure is made adheres 10 the terms of this undertaking
as if he or she were a party hereto1 including without
limitation, having such individuals execute similar
agreements.
(b) As used herein, the term Confidential Information shall not
include information:
(i) which at the time of disclosure to the other is in
the public domain;
(ii) which, after disclosure, becomes generally available
to third parties from a source other than the
discloser: provided that such source is not bound by
a confidentiality or other similar agreement with the
discloser or by any other
22
legal, contractual or fiduciary obligation which
prohibits the disclosure of such Confidential
Information;
(iii) which was lawfully in possession of the recipient
prior to disclosure, as evidenced by written records
and which was not acquired directly or indirectly
from the discloser; or
(iv) which the recipient is required to disclose or, after
consultation with legal counsel, determines it
prudent to be disclosed, to the extent required under
the laws, guidelines or regulations or pursuant to
any request by any governmental agency lawfully
requesting the same, or to any court of competent
jurisdiction acting pursuant to its powers.
12.3 Exchange of Information. GLOBAL will periodically inform
EURAND about any useful marketing information concerning the
sales of the Finished Dosage Form in the Territory. Each party
will timely report to the other any information concerning any
side effect, injury. toxicity or sensitivity reaction
associated with clinical uses, studies, investigations or test
of the Active Ingredient, Product, Product Formulation or
Finished Dosage Form. In reporting such incidents, the
reporting party will use reasonable efforts to indicate
whether, in its judgment, any of them are unexpected or
unusual in type, incidence or severity.
12.4 Force Majeure. Each of the parties shall be excused from the
performance or delay in performance of its obligations under
this Agreement in the event such performance is prevented by
Force Majeure and such performance shall be excused as long as
the condition constituting such Force Majeure continues plus
an additional thirty (30) days after termination of such
condition; provided, that the non-performing party shall
provide prompt notice to the other party of the particulars of
the occurrence constituting
23
Force Majeure and of its cessation and shall make diligent
efforts to mitigate the adverse consequences of such
non-performance of delays in performance.
12.5 Amendments. No amendment or modification of the terms of this
Agreement shall be binding on either party unless reduced to
writing and signed by bath parties.
12.6 No Implied Waiver. Failure by either party hereto on one or
more occasions to avail itself of a right conferred by this
Agreement shall in no event be construed as a waiver of such
party's right to enforce said right in the future.
12.7 choice of Law. This Agreement and all rights and obligations
hereunder, including matter: of construction, validity and
performance, shall be governed by and construed in accordance
with New Jersey law without giving effect to its conflict of
laws principles.
12.8 Notices. Any notice and other communication required or
permitted to be given hereunder shall he in writing and shall
be deemed given when delivered personally, telecopied or
received by registered mail, return receipt requested, to the
parties at the following addresses:
If to EURAND, to:
EURAND AMERICA, INC.
000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Att: VP Business Development
Fax: 937/000-0000
If to GLOBAL, to:
GLOBAL PHARMACEUTICAL Co.
Xxxxxx & Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xx. Xxx X. Xxxxxxxxxx
President and CEO
Fax: (000)000-0000
with copy to:
Xxxxxxx Xxxxxxxx Esq.
Fulbright & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx,XX 00000
24
Fax: (000) 000-0000
12.9 Execution of Additional Documents. Each party hereto agrees to
execute such further papers or agreements as may be reasonably
necessary or desirable to effect the purpose of this Agreement
and carry out its provisions.
12.10 Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable by any court
of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
12.11 Captions. The article and Section captions in this Agreement
have been inserted as a matter of convenience and are not part
of this Agreement
12.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of
this Agreement and all of which together shall constitute one
and the same instrument.
12.13 Minimum Annual Royalties. The royalties due EURAND by GLOBAL
pursuant to Article 3 hereof shall reach minimum amounts
annually ("Minimum Annual Royalties") in order for GLOBAL to
retain exclusivity under the license granted pursuant to
Article 3.1. The Minimum Annual Royalties for all of said
Products are set forth immediately below and are based upon
calendar year anniversaries of the Approval Date for each of
said Products.
Minimum Annual Royalty
Anniversary# Products A+B+C
1 $700,000
2 $1,000,000
3 $1,400,000
4 $1,600,000
5 $1,820,000
25
6 and thereafter $1,440,000
Should the royalties: payable by GLOBAL to EURAND for Product fail to
reach the applicable Minimum Annual Royalty amount, EURAND, as its sole remedy
hereunder, may convert the rights granted to GLOBAL pursuant to Articles 3.1 to
non-exclusive. However, GLOBAL shall have the option to supplement the royalty
payments made to EURAND to the extent necessary to inert the Minimum Annual
Royalty.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duty authorized representatives as of the day and year first
above written.
EURAND AMERICA, INC GLOLOBAL PHARMACEUT!CAL
/s/ Xxxxxxx Xxxxxxx /s/ Xxx X. Xxxxxxxxxx
------------------------ ------------------------
Xx. Xxxxxxx Xxxxxxx Xx. Xxx X. Xxxxxxxxxx
Title: Managing Director Title: President and CEO
20th Aug. '97 20th Aug. '97
26
EXHIBIT B: ACTIVE INGREDIENT AND PRODUCT SPECIFICATIONS
Dosage Form: Pancrelipase Delayed-release Capsules
Product strengths (label): 10,000 16,000 20,000 USP Lipase Units
37,500 43,000 75,000 USP Protease Units
33,200 48,000 66,400 USP Amylase Units
Product to meet the USP 23 Monograph specifications, including all supplements.
27
EXHIBIT C: MANUFACTURING COSTS
"Manufacturing cost" means the fully allocated manufacturing cost or Product
determined in accordance with U.S. generally accepted accounting principles
(GAAP) which includes and is limited to:
1. direct labor (salaries, wages and employee benefits);
2. direct materials;
3. operating costs of building and equipment used only in
connection with the manufacture of the Product;
4. allocated depreciation and repairs and maintenance incurred in
connection with the manufacture of Product;
5. quality and in process control incurred in connection with the
manufacture of Product;
6. an allocation of overhead costs incurred in connection with
the manufacturing of Product including: raw material supply
and manufacturing administration and management; supply and
material management, storage and handling. and manufacturing
arid employee training;
7. royalties paid to third parties; and
8. no charges for idle capacity or underutilized facilities shall
be Included in the manufacturing cost.
28
