Exhibit 10.40
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PATENT AND KNOW HOW LICENSE AGREEMENT
THIS AGREEMENT, ("Agreement") is made and entered into as of the 14th day of
June, 2002 (the "Commencement Date") by and between Nortec Development
Associates, Inc. a corporation organized and existing under the laws of the
State of New Jersey, with office at 000 Xxxxx Xxxx, Xxxxxx, XX 00000-0000
(hereinafter referred to as "NORTEC"), and Par Pharmaceuticals, Inc., a company
organized and existing under the laws of the State of New York and having an
address at Xxx Xxx Xxxxx Xxxx, Xxxxxx Xxxxxx, XX 00000 (hereinafter referred to
as "PAR").
WITNESSETH:
WHEREAS, NORTEC owns directly or through Affiliates, particularly its parent
organization Xxxxx GmbH., Patent Rights and Know-How, that are applicable to the
manufacture of pharmaceutical formulations of ***********, as that terms are
hereinafter defined;
WHEREAS, PAR wishes to undertake a program to register and commercialize the
Product in the Territory including the stability and clinical studies necessary
to commercialize the Product in the Territory (as those terms are hereinafter
defined);
WHEREAS, PAR wishes to take an exclusive license to use and sell NORTEC'S
sustained release *********** product in the Territory under the Patent Rights
and using the Know-How and to further cooperate with NORTEC in the development
and registration of the Product by the FDA and equivalent agencies in the
Territory;
WHEREAS, NORTEC has indicated its willingness to grant a license and other
rights to Par on the terms and subject to conditions set forth in this Agreement
and to manufacture and supply to PAR its requirements of *********** for sale in
the Territory;
NOW THEREFORE, in consideration of the foregoing premises, which are hereby
incorporated in and made a part of the terms and conditions of this Agreement,
and in consideration of the mutual covenants recited hereinafter, NORTEC and PAR
agree as follows:
ARTICLE 1 - DEFINITIONS
As used in this Agreement, each term which is used in the form listed below
shall have the meaning which is given after it.
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1.1 "DMF" shall mean Drug Master File as maintained with the FDA or an
equivalent organization in the Territory.
1.2 "FDA" shall mean the United States Food and Drug Administration.
1.3 "Know-How" shall mean any idea, invention, information, data and other
know-how, relating to *********** whether or not patentable, except that
which is otherwise included in the Patent Rights, which are owned by or to
which NORTEC has rights to or develops or possesses on or after the
Commencement Date of this Agreement and which are necessary or useful in
the evaluation, development, registration, manufacture, use or sale of the
Product, including, but not limited to, the following:
(a) copies of all papers relating to patents applied for in the Territory
in which patent protection which relate in any way to the Product;
(b) all data and/or information regarding the procedures for manufacturing
Product,
(c) all data and/or information, including summaries and completed case
reporting forms, concerning the testing, manufacture, pharmacology and
clinical use of Product.
1.4 "Affiliate" shall be understood to include any corporation, association or
other organization, which directly or indirectly controls, is controlled
by, or is under common control with the party in question. As used herein,
the term control means control with possession of the power to direct, or
cause the direction of a corporation or other entity.
1.5 "Net Sales" shall mean the amounts invoiced in the first bona fide
arm's-length sales to independent unaffiliated third parties by PAR and
any affiliate or designee of PAR, less the following deductions in each
case to the extent related specifically to the Product: (i) any sales, use
or excise taxes included in such amount, (ii) discounts allowed and taken,
(iii) amounts refunded or credited by reason of returns, allowances for
retroactive price adjustments, or payments made by PAR to independent
unaffiliated third parties as part of rebate arrangements, (iv) charges
for freight, handling and transportation separately itemized on the
invoice; and (v) charge-back rebates and state or federal Medicare or
Medicaid rebates. In the event that Product is sold to a customer at a
discount which exceeds the discounts afforded such customer for other PAR
pharmaceutical products, the Net Sales to such customer shall be deemed to
be the average undiscounted Net Sales of the Product to all customers for
the period in question discounted to a level consistent with the average
discount afforded to such customer on other pharmaceutical products.
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1.6 "Net Price" shall mean the price at which PAR sells Products to
unaffiliated third parties in the Territory which, for the purpose of this
Agreement shall be defined as that price for each tablet dosage strength
of the Product, calculated monthly, which corresponds to the total Net
Sales for said quarter divided by the number of tablets sold to generate
such Net Sales.
1.7 "Patent Rights" means (i) the claims of pending patent applications and
issued patents, if any, in the Territory, listed, as of the Commencement
Date, in Exhibit A attached hereto and made a part hereof; (ii) claims of
any patent applications or issued patents in the Territory filed or issued
during the term of this Agreement owned, controlled or licensed with right
of sublicense by NORTEC which relate to any composition, process, or
methods of use or ***********, and (iii) and reissues, extensions,
continuations, continuations-in-part or divisions of which are hereafter
granted in the Territory. Exhibit A lists the relevant patents and patent
applications of NORTEC or patents or patent applications under which
NORTEC has rights as of the Commencement Date and shall be updated
periodically by NORTEC to reflect the current status of the Patent Rights.
1.8 "Territory" shall mean the United States of America, including its
territories and possessions, and the Commonwealth of Puerto Rico.
1.9 "Product" shall mean any and all bulk or finished pharmaceutical products
in solid oral dosage form which are developed or manufactured using the
Patent Rights or Know How that contain sustained-release *********** as
the active pharmaceutical ingredient and are intended to be bioequivalent
to ******* **.
1.10 "Bulk Product" shall mean the Product developed under this Agreement in an
oral solid dosage form, bulk packaged for intermediate use in bulk
containers which will subsequently be packaged in its final packaging form
by PAR for PAR's analytical stability studies and pilot and pivotal bio
equivalency studies.
ARTICLE 2 - GRANT OF LICENSE
2.1 GRANT
Subject to the terms and conditions of this Agreement, NORTEC hereby
grants to PAR and PAR hereby accepts, an exclusive license, without the
right to grant any sublicense, under the Patent Rights and the Know-How to
use and sell Product in the Territory. No license is granted for any other
product than sustained release *********** which is bio-equivalent to
******* **.
2.2 DISCLOSURE OF KNOW-HOW
Within 14 days after the Commencement Date, NORTEC will disclose, subject
to the confidentiality provisions of Article 5, to PAR, to the extent
necessary for PAR to describe the manufacture of Product in connection
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with any ANDA or equivalent document, all existing Know-How not previously
disclosed to PAR. Thereafter, NORTEC shall promptly identify and disclose
to PAR to the extent PAR requests disclosure, any new or additional
Know-How which comes into NORTEC'S or its Affiliates' possession or
control. NORTEC shall provide to PAR, at no additional cost to PAR,
assistance that NORTEC deems necessary for PAR to describe the manufacture
of Product under this Agreement.
2.3 DEVELOPMENT & CLINICAL SUPPLIES MANUFACTURING COOPERATION
PAR shall supply to NORTEC all API (Active Pharmaceutical Ingredient) and
inactive raw material ingredients reasonably required for NORTEC's
development of the Product and for NORTEC's manufacture of bulk Product
for PAR's pilot and pivotal bio equivalency studies ("Clinical Supplies
Manufacturing") under this Agreement. PAR shall use reasonable commercial
efforts to provide in a timely manner all analytical testing services
required to support NORTEC's development and Clinical Supplies
Manufacturing activities under this Agreement. Nortec will notify PAR in
writing of its requirement for materials which will be furnished in a
timely manner. Nortec will not charge any additional fee for manufacturing
bulk Product for the pilot and pivotal biostudies, other than the license
fee payments and royalties described in Article 3.
2.4 ANDA COOPERATION
NORTEC shall provide all documents and information in its possession that
are reasonably required by PAR to support PAR's filing and prosecution of
an ANDA or other application with the FDA to register the Product. The
application shall be owned by PAR and submitted in its name, and PAR shall
have final authority with respect to all decisions concerning the content,
compilation, prosecution, amendment or supplementation of the ANDA. NORTEC
will not be obligated to carry out any analytical, stability or clinical
studies in connection with its duty to provide information to PAR that
NORTEC has in its possession.
NORTEC shall have a right of consultation with respect to the preparation
of the Product ANDA for FDA filing, and agrees to exercise diligent
efforts to assist PAR in the review and compilation of reports to be
included in the ANDA application.
ARTICLE 3 - LICENSE FEES & ROYALTIES
3.1 LICENSE FEE PAYMENTS
In partial consideration of the grant of licenses under the Patent Rights
with respect to issued patents and patent applications included in the
Patent Rights existing on the Commencement Date and the Know-How, PAR
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shall make the following payments to NORTEC at the following times, except
to the extent it has given notice of Agreement termination as provided
herein prior to any payment due date. In no event shall any of the
following payments be made more than one time regardless of the numbers of
Product which are commercialized hereunder:
(a) $125,000 non-refundable payment on the Effective Date of this
Agreement.
(b) $375,000 due upon NORTEC submitting to PAR the formulation and
physical specifications of immediate release core *********** beads
produced during NORTEC's first immediate release core bead trial
campaign. PAR may, at its sole option, elect to terminate this
Agreement in accordance with the provisions defined in Article 4
herein any time prior to NORTEC's submission of the immediate release
core *********** bead data described in this Article 3.1(b). NORTEC
shall not submit to PAR the data described in this Article 3.1(b)
prior to July 1, 2002.
(c) $400,000 due upon a successful pivotal biostudy that demonstrates bio
equivalence to the branded sustained release solid dosage ***********
Product and demonstration of stability of the Product under 90 day
accelerated stability conditions.
(d) $600,000 due on the day of first commercial sale of the developed
Product.
3.2 ROYALTY PAYMENTS
In addition to the license fee payments outlined in Article 3.1, PAR shall
pay a royalty to NORTEC on Net Sales of the Product developed under this
Agreement based upon the following Royalty Payment Schedule outlined in
this Article 3.2. The royalty payments shall be paid to NORTEC on a
quarterly basis for such time as PAR continues to offer the Product
developed under this Agreement for commercial sale in the Territory. In
the event that a total of two (2) generic sustained release ***********
products, bioequivalent to ******* **, are approved by the FDA and have
been launched for commercial sale (excluding any generic sustained release
*********** products, bioequivalent to ******* **, a.) that are
manufactured marketed and/or distributed by the company, or any affiliates
or designees of the company, owning the rights to the ******* ** product,
and; (b) with an AWP (Average Wholesale Price) equal to or greater than **
% of the AWP of ******* **), then the royalty payments pursuant to this
Article 3.2 will be capped at ** % of PAR's Gross Profit on the Product
developed under this Agreement. AWP shall be based on the data published
in the most recent issue of Price Alert(TM). "Gross Profit" shall mean
PAR's Net Sales of the Product minus PAR's Cost of Goods to manufacture
and package the Product. "Cost of Goods" shall mean: a.) NORTEC's transfer
price to PAR to supply the Product to PAR under the Supply Agreement
outlined in Article 9.1, plus; b.) PAR's direct out-of-pocket costs for
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all packaging raw materials needed to package the Product for commercial
sale, plus; c.) ** % of a.) and b.) above in respect of PAR's cost of
direct labor for packaging, quality assurance, quality control, release of
the Product, administrative costs and overhead, plus; d.) PAR's direct
out-of-pocket costs for all active pharmaceutical and excipient raw
material ingredients contained in the un-packaged Product. In no event
shall the Gross Profit computation and royalty cap outlined in this
Article 3.2 cause the minimum royalty payable to NORTEC to be lower than
** % of the royalty amounts listed in the Royalty Payment Schedule for
each market share level as outlined in this Article 3.2.
ROYALTY PAYMENT SCHEDULE:
------------------------------------------------------
PAR's MARKET SHARE (MS) OF THE
ROYALTY AMOUNT TOTAL SUSTAINED RELEASE SOLID
(% Of NET SALES) DOSAGE *********** MARKET
------------------------------------------------------
** % MS > ** %
-
------------------------------------------------------
** % ** %> MS > ** %
-
------------------------------------------------------
** % ** %> MS > ** %
-
------------------------------------------------------
* % ** %> MS > ** %
-
------------------------------------------------------
* % MS < ** %
------------------------------------------------------
Market share shall be based on the total sales reported for ***********
controlled release products which are bioequivalent to ******* ** as
reported by IMS at the end of each calendar year. If no patent is granted
by the USPTO based on the pending patent applications, the royalty rate
will continue for the life of the Agreement.
ARTICLE 4 - TERM AND TERMINATION
4.1. TERM
The Agreement shall become effective on the Commencement Date and unless
terminated earlier by one of the parties hereto in accordance with its
terms, shall continue for as long as PAR markets the Product. If, after
three years from the date of the launch of the Product, the Net Sales fall
below ** % market share of the total generic sustained release solid
dosage *********** market, the license to PAR will become non-exclusive
and NORTEC will have the right to grant additional non-exclusive licenses
to third-parties under such terms and conditions that NORTEC deems
appropriate.
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4.2. TERMINATION
Notwithstanding the foregoing, and subject to Section 4.3. of this
Article:
(a) A party to the Agreement may terminate the license granted under
Article 2 if the other party commits a material breach of any of the
material terms of the Agreement and does not remedy such breach within
ninety (90) days after receipt of a notice demanding that any such
breach be remedied, or if ninety (90) days is an inadequate cure
period, such longer period as necessary, provided the breaching party
continues to act with reasonable diligence to cure the breach and the
breach is capable of cure;
(b) In the event that PAR in good faith determines that it is no longer
economically viable to pursue the development, registration or sale of
the Product in the Territory, then PAR may terminate this agreement.
In the event that PAR exercises this right, then PAR shall use
reasonable commercial efforts to transfer to NORTEC all rights,
contracts, data and information associated with the Product including
all rights under any unapproved or approved ANDA. Upon such
termination, PAR shall allow NORTEC, without any fee, access to any
trademark PAR may have selected as a brand trademark for Product.
Notwithstanding the foregoing, in subsequent promotion of Product,
NORTEC may utilize in such promotion efforts previously published
material such as for example clinical results and studies that
reference PAR'S trademark for the Product. The right to use the
trademark does not include the right to use PAR'S name or any other
trademark of PAR.
4.3 RIGHTS UPON TERMINATION
Termination of this Agreement or a portion thereof for any reason shall be
without prejudice to:
(a) NORTEC's right to receive payments that are unpaid under this
Agreement as of the date the Agreement is terminated, including but
not limited to payment for Product delivered to PAR and work in
progress under firm purchase orders of PAR.
4.4 SALE OF INVENTORY
Upon termination of this Agreement, PAR will have the right to sell or
otherwise dispose of any inventory on hand.
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ARTICLE 5 - CONFIDENTIALITY
5.1 CONFIDENTIALITY OBLIGATIONS
Each party hereto shall hold in confidence all confidential and other
proprietary information of the other party disclosed to the receiving
party and relating to this Agreement, except for information:
(a) Which is or becomes public knowledge (through no fault of the
receiving party), or
(b) Which is made available to the receiving party by an independent third
party, or
(c) Which is already in the receiving party's possession at the time of
receipt from the disclosing party (and such prior possession can be
properly demonstrated), or
(d) Which is required by law to be disclosed, or
(e) Which becomes publicly known as a result of required disclosures made
to or as a result of FDA regulations under which the Product is
approved for sale in the Territory. If in connections with studies
which are carried out to obtain FDA approval it is necessary to
disclose confidential information under this Agreement, the disclosing
party will make diligent efforts to bind the receiving party to
customary confidentiality and use restrictions.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES, INDEMNITIES AND LIMITATIONS OF
LIABILITY
6.1 OWNERSHIP AND LEGAL AUTHORITY
NORTEC represents and warrants that it is the owner of or has contractual
rights to all of the Patent Rights and Know-how licensed to PAR hereunder,
and that it has the legal power, authority and right to grant the licenses
set forth in Section 2.1, and to perform its obligations under this
Agreement.
6.2 NO THIRD PARTY INFRINGEMENT
NORTEC represents and warrants that it has no knowledge of any claim or
allegation, or any basis therefore, of misuse of any third party's
confidential or proprietary information with regard to use of Patent
Rights or Know-How licensed by NORTEC to PAR hereunder.
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6.3 NO INFRINGEMENT OF THIRD PARTY PATENTS
NORTEC does not represent or warrant as of the date hereof that the
manufacture, use and sale of Product solely because of the use of the
Know-How or Patent Rights will present any question of infringement of any
adversely held patent in the Territory.
6.4 NO THIRD PARTY OPTIONS OR RIGHTS
NORTEC represents and warrants that neither it nor its Affiliates have
granted any effective options(s) or license(s) to any third person or
entity under any of Patent Rights or Know-How with respect to the
manufacture, use or sale of Product within the Territory.
6.5 PRODUCT WARRANTIES
NORTEC represents and warrants that all Product which it supplies to PAR
hereunder:
(i) shall have been manufactured in accord with all applicable laws
and regulations governing the production and supply thereof and
all regulations and requirements of the FDA including the then
current Good Manufacturing Practice (CGMP) Regulations, which
apply to the production and supply of such Product;
(ii) shall, at the time of delivery to PAR, meet the specifications
set forth for the Product by mutual agreement of NORTEC and PAR
(which specifications may be amended only by mutual written
consent of the parties hereto) and shall be merchantable and fit
for its intended use;
(iii) shall meet such written acceptance tests and requirements,
including without limitation, providing samples, provided such
tests are reasonable and customary in the United States
pharmaceutical industry;
(iv) shall not be adulterated or misbranded as defined by the Federal
Food, Drug and Cosmetic Act and regulations thereunder (the
"Act") or any foreign equivalent thereof in any country of
manufacture; and
(v) shall not be an article which may not be introduced into
interstate commerce under the applicable provisions of the Act.
6.6 PAR'S WARRANTIES
PAR warrants to NORTEC that PAR will exercise due care regarding the
*********** formulation, including but not limited to the design of
biostudies, the selection of qualified test facilities, funding and review
of final reports from the qualified test facilities carrying out and
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evaluating the bioequivalency of the *********** formulation, the storage
of the *********** product, the labeling of the *********** product, the
packaging of the *********** product and/or the shipment of the
*********** product, the selection and use of trademarks on the
*********** product.
Prior to filing of the ANDA, PAR will have a study carried out at PAR's
expense for the purpose of determining if there are any unexpired patents
in the Territory that would be infringed as a result of the manufacture,
use or sale of the Product. PAR will disclose the results of all such
studies to Nortec.
6.7 LIMITATION OF LIABILITY
Neither party shall have any liability to the other party under or with
respect to this Agreement or otherwise at law or equity under or with
respect to this Agreement for any indirect, incidental or consequential
damages, including, without limitation, lost profits. It is the intention
of the parties that any liabilities of one party to the other arising from
performance or lack of performance under this Agreement shall be limited
to direct damages as customarily defined.
6.8 INDEMNITIES BY PAR
PAR agrees to indemnify and hold harmless NORTEC and its Affiliates and
their respective employees, agents, officers and directors from and
against any costs, claims, judgments, expenses (including reasonable
attorney fees), damages and awards (but not incidental, indirect or
consequential damages) arising out of or resulting from its acts or
omissions and which result from a breach of its warranties set forth in
this Article, or from PAR's breach of any of the terms and conditions of
this Agreement. PAR will provide NORTEC and periodically update upon
NORTEC's request a certificate of insurance for product liability coverage
in the minimum amount of $ ******** which it agrees to maintain for the
Territory during the term of this Agreement and will undertake to obtain
an endorsement of any and all insurance policies for the benefit of NORTEC
as NORTEC's interest may appear.
PAR further agrees to defend, indemnify and hold NORTEC and its Affiliates
harmless for any loss (including reasonable attorneys' fees) arising out
of a claim alleging infringement of any patent. In any such action, PAR
shall undertake the defense of such claims, and shall control the defense
of the action and the prosecution of any relevant counterclaims.
Notwithstanding the foregoing, PAR shall not agree to settle any such
action on terms that are materially prejudicial to any right or claim of
NORTEC in the Product, the Patents, or the Know-How without the consent of
NORTEC, which consent shall not be withheld or delayed unreasonably.
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NORTEC agrees to cooperate with PAR in the defense of such claims,
including, without limitation, agreeing to timely supply such witnesses,
documents and other information as is necessary to fulfill the PAR's
obligations concerning discovery in the action.
6.9 Each party agrees to give the other prompt written notice within thirty
(30) days of any claims made, including any claims asserted or made by any
governmental authority having jurisdiction, for which the other might be
liable under the foregoing indemnifications, together with the opportunity
to defend, negotiate and settle such claims and will provide reasonable
assistance to such other party's defense of such claim. For any suit
covered by a party's indemnification hereunder, the indemnified party
shall permit the indemnifying party to have control of the conduct of the
defense of such suit, including, without limitation, selection of counsel.
ARTICLE 7 - FDA APPROVAL
7.1 PROCEDURES FOR FILING AND ANDA
PAR shall diligently undertake to prepare, compile and submit an ANDA for
the Product in the Territory and following such submission, PAR shall
diligently prosecute the ANDA with the FDA with a view to obtaining timely
approval for the Product.
7.1.1. REPORTS AND MONITORING
PAR shall provide NORTEC with quarterly written reports on the
efforts to obtain marketing approval in the Territory with
supporting documentation reasonably requested by NORTEC. NORTEC
shall have the right to inspect the ANDA and associated
correspondence at any time upon prior notice during normal business
hours during the term of the Agreement.
7.1.2. REFERENCE TO NORTEC AS MANUFACTURER
All application for marketing approval in the Territory shall list
NORTEC as manufacturer and PAR as the exclusive distributor and
final packager of bulk product. NORTEC's name shall be displayed as
the manufacturer to the extent that such display is legally
permissible on the labeling and packaging for Product.
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ARTICLE 8 - MARKETING
8.1 MARKETING EFFORTS
PAR will use reasonable commercial efforts to market the Product in the
Territory during the term of the Agreement.
8.2 FURTHER OBLIGATIONS
PAR shall furnish and label Product in compliance with the specifications
and requirements set forth in the marketing approval documents in the
Territory.
8.3 ADVERSE DRUG REACTIONS
Each party shall promptly after learning thereof notify the other in
writing of any report of adverse, or possible or suspected adverse,
effects of Product, and whenever either party intends to report the same
to any governmental authority, such party shall, when feasible, consult
with the other party with respect to such notification. Specifically, PAR
shall provide NORTEC with adverse event data for filing with the FDA.
8.4 REPORTING
The parties hereto agree to meet on a quarterly basis for the first year
following the initial launch of the Product, on a semi-annual basis for
the second and third year and on an annual basis for the fourth and fifth
year. At such meetings which will be at location(s) specified by PAR, PAR
will report on the ongoing sales performance of the Product in the
Territory, including marketing approaches, promotion and advertising
campaigns, sales plans and results, performance against competitors etc.
Each party shall bear all of its own costs and expenses with regard to
such meetings. At the request of NORTEC, PAR shall provide information at
other times provided that all information disclosed at meetings or
otherwise shall only be information kept by PAR in the ordinary course of
business.
ARTICLE 9 - MANUFACURING AND SUPPLY
9.1. MANUFACTURE AND SUPPLY:
The parties shall promptly enter good faith negotiations with respect to a
Supply Agreement with respect to the Product. It is envisioned that the
Supply Agreement will provide, among other things, terms and conditions
under which PAR shall purchase all of its requirements for Product
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exclusively from NORTEC (or its reasonably acceptable designee) and NORTEC
(or its reasonably acceptable designee) shall sell to PAR all of PAR's
requirements for Product for sale in the Territory. It is further
envisioned that the Supply Agreement shall contain such other provisions
with respect to forecasting, orders, quality control, adverse event
reporting, warranties and indemnities as it usual and customary in
commercial agreements of this type. NORTEC shall sell such Product
exclusively to PAR in the Territory. Except as otherwise expressly
permitted hereunder, PAR shall not manufacture Product itself or purchase
Product from any other source for sale in the Territory during the term of
this Agreement. On or about, but no later than; a.) the time at which PAR
submits the Product for the pivotal bio equivalency studies; and b.) the
time at which the Product demonstrates stability under accelerated
stability conditions, NORTEC will calculate and present to PAR NORTEC's
transfer price, +/- ** %, to supply the Product to PAR, based upon the
process to manufacture the Product and PAR's anticipated supply
requirements as defined and known at that time. The transfer price as
defined at the time specified above may only be adjusted by NORTEC to
reflect any subsequent changes in; a.) the process to manufacture the
Product; b.) Par's supply requirements; and c.) inflation costs during the
time commencing with the establishment of the transfer price and ending
with the time of commercial launch of the Product. In the event that PAR
and NORTEC are unable to mutually agree upon a transfer price at the time
specified above, PAR may, at its sole option, elect to terminate this
Agreement in accordance with the provisions defined in Article 4 herein.
ARTICLE 10 - RECORDS AND PAYMENTS
10.1 NET SALES REPORTS
Beginning ninety (90) days after the end of the first calendar quarter in
which Net Sales of the Product are first made, and ninety (90) days after
the end of any subsequent calendar quarter during the term of this
Agreement, PAR shall deliver or cause to be delivered to NORTEC a written
report showing the sale of Product during the preceding quarterly period.
10.2 AUDIT RIGHTS
During the term of the Agreement and for a period of six (6) months
thereafter, NORTEC shall have the right at its own expense to have an
independent certified public accounting firm reasonably acceptable to PAR
examine the records described in Section 10.1 (excluding those records, if
any, which relate to the qualitative commentary of 10.1 above) and Section
3.2, herein during reasonable business hours, not more often than once
each calendar year for the present year and for the preceding three (3)
years. Such examination shall be for the sole purpose of determining
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whether appropriate accounting and payment have been made hereunder. Such
independent certified public accounting firm shall be required to treat as
confidential, and not disclose to NORTEC, any information obtained, except
that which would properly be contained in a sales report hereunder. Nor
shall it disclose to any other party any information obtained as a result
of such examination, except as may be required by binding legal process or
government requirements, and then only upon reasonable prior notice and in
consultation with PAR.
ARTICLE 11 - TRADE NAMES AND TRADEMARKS
11.1 PAR hereby acknowledges that it does not have, and shall not acquire,
during or after the term of the Agreement any interest in any of NORTEC's
trademarks or trade names appearing on the labels or packaging materials
for Product.
ARTICLE 12 - GENERAL
12.1 ASSIGNMENT
This Agreement shall not be assignable by either party, except to a wholly
owned Affiliate, without the prior written consent of the other party,
such consent not to be unreasonable withheld.
12.2 NON-WAIVER
The waiver by either of the parties of any breach of any provision hereof
by the other party shall not be construed to be a waiver of any succeeding
breach of such provision or a waiver of the provision itself.
12.3 GOVERNING LAW
This Agreement shall be construed and interpreted in accordance with the
laws of New York.
12.4 BINDING ARBITRATION
Any and all claims, disputes, controversies, and other matters arising out
of or relating to this Agreement, including but not limited to the
formation (including any claim as to fraud in the inducement), breach,
performance, interpretation, or termination thereof, shall be settled by
binding arbitration in accordance with the commercial Arbitration Rules of
the American Arbitration Association. Three arbitrators shall conduct the
arbitration in the English language in the State of New York. The
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arbitrators must be knowledgeable or experienced in the pharmaceutical
industry. Each party will, within 20 days of the date on which arbitration
is requested, select one arbitrator and advise the opposite party of the
name of that arbitrator, and those two arbitrators will select a third
arbitrator. If the two arbitrators selected by the parties are unable to
agree upon a third arbitrator within forty (40) days of the date on which
arbitration is requested, the third arbitrator will be appointed by the
American Arbitration Association. The decision of any two of the three
arbitrators will be the decision of the arbitrators. The costs of
arbitration, including reasonable attorney's fees, shall be borne by as
assessed by the Arbitrators. Notwithstanding anything contained herein to
the contrary, the terms and provisions of this Section shall not preclude
any party hereto from seeking, or a court of competent jurisdiction from
granting, a temporary restraining order, temporary injunction or other
equitable relief for any breach of any restrictive covenant or
confidentiality covenant in this Agreement. The arbitrators' decision
shall be reduced to writing and shall be binding on the parties. Judgment
upon the award(s) rendered by the arbitrators may be entered and execution
had in any court of competent jurisdiction or application may be made to
such court for a judicial acceptance of the award and an order of
enforcement. In arbitration, all privileges under state and federal law,
including attorney-client and work-product privileges, shall be preserved
and protected to the same extent that such privileges would be protected
in a United States district court proceeding applying the internal law of
the State of New York (without reference to the law of conflicts of any
jurisdiction). Failure of either party to abide by the arbitrators'
decision shall permit the other party to terminate this Agreement in whole
or in part.
12.4 INVENTIONS
During the course of the Agreement, it is contemplated that NORTEC and PAR
employees will cooperate in the development of the Product and it is
recognized that inventions and know-how may be developed which may be
applicable in the manufacture of the Product other products which are not
covered by this Agreement. For these reasons, PAR agrees that all
inventions, whether patentable or unpatentable, except for inventions
which relate solely to analytical procedures or to testing procedures that
are directly related to the Product, and which are made by PAR employees
jointly with NORTEC employees or solely by PAR employees or solely by
NORTEC employees, will be assigned to NORTEC. In the event that PAR
obtains any patent on an analytical or testing procedure, PAR agrees to
give NORTEC a royalty free license insofar as NORTEC uses such patented
subject matter in the manufacture of ***********.
12.5 PARTIAL INVALIDITY
If and to the extent that any court or tribunal of competent jurisdiction
holds any of the terms, provisions or conditions or part thereof of this
Agreement, or the application thereof to any circumstances, to be invalid
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or unenforceable in a final nonappealable order, the parties shall use
their best efforts to reform the portions of the Agreement declared
invalid as to fully realize the intent of the parties as practical, and
the remainder of this agreement and the application of such invalid term,
provision or condition or part thereof to circumstances other than those
as to which it is held invalid or unenforceable shall not be affected
thereby, and each of the remaining terms, provisions and conditions of
this Agreement shall be valid and enforceable to the fullest extent of the
law.
12.6 NOTICE
Any notice to be given to a party under or in connection with this
Agreement shall be in writing and shall be made by Express Mail or FEDEX
to the party at the address set forth for such party:
To NORTEC DEVELOPMENT ASSOCIATES, INC.:
000 Xxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, President
Telephone: (000) 000-0000
Fax: (000) 000-0000
With copies to:
000 Xxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Executive Vice President
Telephone: (000) 000-0000
Fax: (000) 000-0000
To PAR PHARMACEUTICALS, INC.:
Xxx Xxx Xxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
Attn: Xxxxxx X'Xxxxxx, CFO
Telephone: (000) 000-0000
Fax: (000) 000-0000
Or to such other address as to which the party has given notice thereof.
Such notices shall be deemed given upon receipt.
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12.7 FORCE MAJEURE:
No failure or omission by a party hereto in the performance of any
obligation of this Agreement shall be deemed a breach of this Agreement,
nor shall it create any liability, provide the party uses reasonable
efforts to resume performance hereunder and the party is capable through
the exercise of such efforts in resuming performance, if the same shall
arise from any cause or causes beyond the control of the affected party,
including, but not limited to, the following, which for purposes of the
Agreement, shall be regarded as beyond the control of the party in
question: act of God; acts or omissions of any government; any rules,
regulation, or orders issued by any governmental authority or by any
officer, department, agency or instrumentality hereof; fire; storm; flood;
earthquake; accident; war; rebellion; insurrection; riot; invasion;
strikes; and lockouts, but does not apply to Section 3.1.
12.8 HEADINGS
The headings appearing herein have been inserted solely for the
convenience of the parties hereto and shall not affect the construction,
meaning or interpretation of the Agreement or any of its terms and
conditions.
12.9 SURVIVAL
The representations and warranties contained in the agreement as well as
any other express provisions herein which are intended to survive the
termination or expiration of this Agreement shall survive the termination
or expiration of the Agreement.
12.10 ENTIRE AGREEMENT
This Agreement constituted the entire understanding between the parties
with respect to the subject matter contained therein and supersedes any
and all prior agreements, understandings and arrangements whether oral or
written between the parties relating to the subject matter hereof. No
amendment, change, modification or alteration of the terms and conditions
of this Agreement shall be binding upon either party unless in writing and
signed by the party to be changed.
12.11 INDEPENDENT CONTRACTORS
It is understood that both parties hereto are independent contractors and
engage in the operation of their own respective business, and neither
party hereto is to be considered the agent of the other party, for any
purpose whatsoever. Neither party has any authority to enter into any
contracts or assume any obligations for the other party or make any
warranties or representations in behalf of the other party.
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12.12 PUBLICITY
Neither party shall publicize or disclose the existence or terms or
termination of this Agreement, except as required by law, until the FDA
has issued an approvable letter for the ANDA, unless first consented to in
writing in advance of disclosure by an authorized representative of the
other party. No consent of a party shall be required after the FDA has
issued such approvable letter for the ANDA insofar as such disclosure
refers to the existence, but not the terms, of this Agreement.
Furthermore, neither party shall release information to the press or
public pertaining to this Agreement or its performance without first
agreeing on the content of such disclosure with the other party.
Notwithstanding the above, both parties agree that PAR will release to the
press a public statement announcing the agreement of the parties to
develop an oral sustained release product under an exclusive license to
utilize NORTEC's intellectual property on the effective date of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be executed
by their duly authorized officers as of the date first above written.
PAR PHARMACEUTICALS NORTEC DEVELOPMENT ASSOCIATES
.
BY /s/ Xxxxx Xxxxxxx BY /s/ Xxxxxxx X. Xxxxx
---------------------------------- ----------------------------------
TITLE President and Ceo TITLE President
------------------------------- -------------------------
DATE 05/24/02 DATE 05/24/02
-------------------------- --------------------------
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EXHIBIT A
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