Exhibit 10.2
LICENSE AND DISTRIBUTION AGREEMENT
THIS LICENSE AND DISTRIBUTION AGREEMENT is entered into as of the 3rd day of
October 2002.
BETWEEN: HYDRO MED SCIENCES, INC., a corporation incorporated under the laws of
the state of Delaware, U.S.A., with its principal place of business
located at
0 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
(hereinafter referred to as "HYDROMED")
-and-
PALADIN LABS INC., a corporation incorporated under the laws of Canada,
with its principal place of business located at
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxx, X0X 0X0
(hereinafter referred to as "PALADIN")
BACKGROUND
WHEREAS Paladin is engaged in the marketing, sale and distribution of various
pharmaceutical products;
WHEREAS HydroMed has developed and is the sole owner or exclusive licensee of
certain Patent Rights and other Intellectual Property (each as hereinafter
defined) relating to a certain Product (as hereinafter defined) and is currently
in the process of conducting clinical trials for the Product for use in the
treatment of prostate cancer;
WHEREAS HydroMed wishes to grant to Paladin an exclusive license under the
Patent Rights and other Intellectual Property during the Term (as hereinafter
defined) to import, use and sell the Product for use in the Primary Indication
and Other Indications (both as hereinafter defined) in the Territory (as
hereinafter defined), the whole in accordance with the terms and conditions
hereinafter set forth;
WHEREAS HydroMed wishes to appoint Paladin as its exclusive agent in the
Territory in seeking to obtain Regulatory Approval (as hereinafter defined) for
the Product in the Territory for use in the Primary Indication and Other
Indications, the whole in accordance with the terms and conditions hereinafter
set forth;
WHEREAS HydroMed wishes to grant to Paladin the exclusive right to market and
sell the Product in the Territory for use in the Approved Indications, the whole
in accordance with the terms and conditions hereinafter set forth;
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WHEREAS HydroMed has agreed to supply Paladin with the Product on an exclusive
basis in the Territory prior to Regulatory Approval, and following receipt of
Regulatory Approval, for distribution and sale in the Territory for use in the
Approved Indications, the whole in accordance with the terms and conditions
hereinafter set forth.
TERMS
NOW THEREFORE this Agreement witnesses that in consideration of the respective
covenants, agreements, representations, warranties and indemnities herein
contained and for other good and valuable consideration, the Parties hereby
covenant and agree as follows:
ARTICLE 1 - DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. For the purposes of this Agreement or any notice, consent,
authorization or other communication required or permitted to be given
hereunder, the following expressions shall have the following meanings,
respectively, unless the context otherwise requires:
(a) "AFFILIATE" shall mean any Person which directly or indirectly
controls, is controlled by, or is under common control with another
Person, provided that "control" shall mean ownership as to more than
fifty percent (50%) of another Person or the power to direct decisions
of another Person, including, without limitation, the power to direct
management and policies of another Person, whether by reason of
ownership, by contract or otherwise.
(b) "AGREEMENT" shall mean this License and Distribution Agreement and all
instruments supplemental hereto or in amendment or confirmation
hereof; "HEREIN", "HEREOF, "HERETO", "HEREUNDER" and similar
expressions mean and refer to this Agreement and not to any particular
Article, Section, Subsection or other subdivision; "ARTICLE",
"SECTION", "SUBSECTION" or other subdivision of this Agreement means
and refers to the specified Article, Section, Subsection or other
subdivision of this Agreement.
(c) "APPROVED INDICATIONS" shall mean the Primary Indication and the Other
Indications, in each case at such time as Regulatory Approval for such
indication has been obtained.
(d) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which the branches of the Canadian Imperial Bank of
Commerce located in the City of Montreal, Quebec and/or the Federal
Reserve Bank with jurisdiction over the then- current principal place
of business by HydroMed are not open for business.
(e) "CALENDAR QUARTER" shall mean each three-month period commencing
January 1, April 1, July 1 and October 1 of each year during the term
of this Agreement.
(f) "CALENDAR YEAR" shall mean the period from January 1st to December
31st in a given year.
(g) "CANADIAN SOURCED ITEMS" means betadine swabsticks, alcohol swabs and
Lidocaine HC1 1% and Epinephrine.
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(h) "CMC INFORMATION" shall mean the chemistry, manufacturing, and control
information as commonly found in a NDS.
(i) "COMMERCIAL SALE" means any sale or distribution of the Product by
Paladin or its Affiliates to a Third Party, other than (i)
distribution in connection with Phase IV clinical trials of the
Product conducted by Paladin or (ii) distribution of samples in
accordance with Section 4.7 provided by HydroMed under Section 4.7 at
cost or less.
(j) "DEVELOPMENT PLAN" shall have the meaning set forth in Section 3.3.
(k) "DIN" shall mean the Drug Identification Number issued by the TPD for
each dosage form of the Product sold in the Territory.
(1) "DEVELOPMENT PARTNER" shall have the meaning set forth in Subsection
3.9.1.
(m) "DOLLAR" and the symbol "$" shall mean lawful money of the United
States.
(n) "EFFECTIVE DATE" shall mean the date first written above.
(o) "ENDOMETRIOSIS INDICATION" shall have the meaning set forth in
Subsection 3.9.1.
(p) "EVENT OF FORCE MAJEURE" shall have the meaning set forth in Section
13.1.
(q) "GMPs" shall mean Good Manufacturing Practices as required under the
rules and regulations of Health Canada.
(r) "GOVERNMENTAL BODY" shall mean (i) any domestic or foreign national,
federal, provincial, state, municipal or other government or body,
(ii) any subdivision, ministry, department, secretariat, bureau,
agency, commission, board, instrumentality or authority of any of the
foregoing governments or bodies, (iii) any quasi-governmental or
private body exercising any regulatory, expropriation or taxing
authority under or for the account of any of the foregoing governments
or bodies, or (iv) any domestic or foreign judicial, quasi-judicial,
arbitration or administrative court, grand jury, tribunal, commission,
board or panel of any of the foregoing governments or bodies.
(s) "IMPLANT" means HydroMed's proprietary Histrelin Hydron Implant(TM),
as more fully described in Schedule 1.1 (s).
(t) "IMPROVEMENTS" shall mean any re-formulations, line-extensions or
other advances in, modifications or improvements to the Product for
use in the Primary Indication and Other Indications.
(u) "INTELLECTUAL PROPERTY" shall mean: (a) the Patent Rights; (b) the
Trade Marks; (c) the Marketing and Distribution Know-How; and (d)
whether or not reduced to writing, all discoveries, inventions, all
rights to inventions, designs, design applications and design
registrations, copyright, copyright applications and registrations,
and all other rights and intellectual property now or hereafter owned,
held or used by HydroMed or any of its Affiliates, other than patents,
patent applications, trademarks, trade names and trade dress.
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(v) "KIT" shall mean a container and its components assembled and packaged
by HydroMed or a third party designated by HydroMed, containing the
Implant and the materials and accessories listed on Schedule 1.1 (v)
The contents of the Kit may vary from time to time, subject to mutual
written agreement between the Parties.
(w) "LABELS" shall mean (i) all labels and other written, printed, or
graphic matter upon the Product or any packaging, container or wrapper
utilized with the Product and (ii) any written material accompanying
the Product, including without limitation, any package inserts.
(x) "LAWS" shall mean:
(i) all constitutions, treaties, laws, statutes, codes, ordinances,
orders, decrees, rules, regulations, and municipal by-laws,
whether domestic, foreign or international, including any such
constitutions, etc. of any Governmental Body;
(ii) all judgments, orders, writs, injunctions, decisions, rulings,
decrees and awards of any Governmental Body; and
(iii) all policies, practices and guidelines of any Governmental Body,
in each case binding on or affecting the Party or Person referred
to in the context in which such word is used; and "LAW" shall
mean any one of them.
(y) "LOSSES" shall mean liabilities, damages, costs or expenses, including
reasonable fees and expenses of attorneys and other professionals, as
well as court costs.
(z) "MARKETING AND DISTRIBUTION KNOW-HOW" shall mean all know-how,
information, data, knowledge, reference materials, confidential
information and other information owned or developed by, in the
possession of, known to or used by HydroMed and/or its Affiliates that
is reasonably required by Paladin in order to market, distribute, use
and sell the Product in the Territory for use in the Primary
Indication and Other Indications and can be disclosed by HydroMed to
Paladin. Without limiting the generality of the foregoing, Marketing
and Distribution Know-How shall include all marketing plans, market
research data and reports, customer segmentation reports, studies,
sales materials, reprints, brochures, package inserts, stability data
and manufacturing quality data regarding the Product whether in the
Territory or outside the Territory, and all Promotional Materials, in
each case if HydroMed can disclose it to Paladin.
(aa) "MARKETING PLAN" shall have the meaning set forth in Section 4.9.
(bb) "MATERIAL BREACH" shall mean any breach of the terms of this Agreement
of such a nature as to have a material effect on the non-breaching
Party.
(cc) "NDS" shall mean a New Drug Submission filed with the TPD.
(dd) "NET SALES" shall mean the total gross sales invoiced and collected by
Paladin with respect to the Commercial Sale of the Product in the
Territory by Paladin, less the
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aggregate of (i) customers' returns for Product that fails to comply
with Specifications or that are made in accordance with the Returns
Policy attached to Schedule 8.8, rebates pursuant to any governmental
programs or Laws, recalls, trade and/or promotional allowances
actually allowed or taken; (ii) charges paid by Paladin for freight,
transport and delivery, including insurance, for shipping from
Paladin's or its designee's facilities to a customer, and (iii) any
sales tax, value added tax, goods and services tax or any other tax
that may be imposed on the sale of the Product, which taxes are
included in gross sales invoiced.
(ee) "OTHER INDICATIONS" shall mean the treatment of central precocious
puberty (CPP), and/or any other indications for which the Product
shall be developed; provided, however, that the Endometriosis
Indication shall only be treated as an Other Indication if Paladin
exercises its right of first refusal to obtain marketing and
distribution rights for the Endometriosis Indication in accordance
with Subsection 3.9.
(ff) "PARTIES" shall mean Paladin or HydroMed collectively; and "Party"
shall mean either one of them.
(gg) "PATENT RIGHTS" shall mean those patent applications and issued
patents owned by HydroMed or its Affiliates and/or made available in
any other way to HydroMed or its Affiliates that but for this
Agreement would be infringed by the manufacture, use, distribution or
sale of the Product in the Territory for use in the Primary Indication
or Other Indications and every divisional, continuation, continuation
in part, substitution and confirmation application based thereon, and
any reissue or extension based on any of the foregoing.
(hh) "PERSON" shall mean an individual, corporation, limited liability
company, cooperative, partnership, organisation or any similar entity.
(ii) "PRIMARY INDICATION" shall mean the treatment of prostate cancer.
(jj) "PRODUCT" shall mean all dosage strengths and forms of the Implant in
its final finished form along with the Kit, together with all Labels
and any and all Improvements. In no event shall the Canadian Sourced
Items be considered part of the Product.
(kk) "PROMOTIONAL MATERIALS" shall mean all promotional materials, detail
aids and pieces, journal ads, films, artwork and graphics, and any
other marketing literature and information relating to the marketing,
distribution or sale of the Product for use in the Primary Indication
and/or Other Indications outside of the Territory.
(l1) "REGULATORY APPROVAL" shall mean the approval by the TPD of an NDS and
the issuance of a DIN for the Product, and any other approvals,
licenses, registrations or authorizations of the TPD or any other
Regulatory Authority necessary for the marketing, distribution and
sale of the Product in the Territory for use in a particular
indication.
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(mm) "REGULATORY AUTHORITY" shall mean each and every Governmental Body
from which approvals are required for the marketing, distribution or
sale of the Product in the Territory.
(nn) "REJECTED PRODUCT" shall have the meaning set forth in Section 7.6.1.
(oo) "SPECIFICATIONS" shall mean the specifications for the Product, as
approved by the TPD, to be attached as Schedule l.l(oo) and more fully
described in the official Labels for the Product.
(pp) "TERM" shall mean the time period from the Effective Date until
termination of this Agreement.
(qq) "TERRITORY" shall mean Canada and each of its territories and
possessions on the Effective Date.
(rr) "THIRD PARTY" means any Person other than a Party or an Affiliate of a
Party.
(ss) "TPD" shall mean the Therapeutic Products Directorate of Health Canada
or any successor or replacement entity thereof performing the same
functions.
(tt) "TRADE MARKS" shall mean, subject to Article 5, all trade marks and
trade names and trade dresses (whether registered or not) owned by
HydroMed or its Affiliates and approved by HydroMed for use in the
marketing, distribution and sale of the Product in the Territory for
use in the Primary Indication and/or Other Indications.
1.2 INTERPRETATION. The division of this Agreement into Articles and the
insertion of headings are for convenience of reference only and shall not
affect the interpretation of this Agreement. In this Agreement, words
importing the singular number only shall include the plural and vice versa
and words importing gender shall include all genders.
1.3 SCHEDULES. The following are the Schedules annexed to and incorporated (or
will be annexed to and incorporated) in this Agreement by reference and
deemed to be a part hereof:
Schedule 1.1(s) Current Implant Specifications
Schedule l.l(v) Contents of Kit
Schedule 1.1(oo) Product and Kit Specifications
Schedule 8.8 Returns Policy
Schedule 9.1 Quality Agreement
ARTICLE 2 - LICENSE AND CONSIDERATION
2.1 LICENSE GRANTS. HydroMed hereby grants to Paladin, and Paladin hereby
accepts, an exclusive royalty-bearing (as set forth in Article 6) license
under the Intellectual Property in the Territory during the Term (and any
extended period provided for in Section 13.7):
2.1.1. to seek Regulatory Approval for the marketing, distribution and sale
of the Product for use in the Primary Indication, and subject to
Sections 3.1 and 3.9, any Other Indications;
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2.1.2. following receipt of Regulatory Approval, to directly or indirectly
use, market, promote, distribute and sell the Product in the Territory
for use in the Approved Indications;
2.1.3. subject to Article 5, to use the Trade Marks on the Product in
connection with the marketing, distribution and sale of the Product in
the Territory for use in the Approved Indications; and
2.1.4. to use the Marketing and Distribution Know-How, the Patent Rights
and all other Intellectual Property to the extent reasonably required
by Paladin in order to market, distribute and sell the Product in the
Territory for use in the Approved Indications,
the whole in accordance with the provisions of this Agreement. Paladin
agrees that all of the Intellectual Property is and shall remain the
property of HydroMed.
2.2 SUBLICENSING. The license rights granted under Section 2.1 may be
sublicensed by Paladin with the prior written consent of HydroMed, which
consent shall not be unreasonably withheld or delayed. The grant of any
sublicense shall not relieve Paladin of any of its obligations under this
Agreement.
2.3 RESERVATION OF RIGHTS. HydroMed hereby reserves to itself all right, title
and interest in the Intellectual Property not expressly granted to Paladin
in this Agreement. Without limiting the generality of the foregoing, in no
event shall this Agreement be construed to grant Paladin any rights to the
Intellectual Property outside the Territory or prevent HydroMed from
directly or indirectly: (a) manufacturing, using, marketing, promoting,
distributing and selling the Product in the Territory for use in
indications other than the Primary Indication and Other Indications; (b)
manufacturing, using, marketing, promoting, distributing and selling the
Product outside the Territory for use in any indication; or (c) entering
into and performing agreements with third parties regarding the foregoing.
ARTICLE 3 - PRODUCT DEVELOPMENT AND REGULATORY APPROVAL
3.1 REGULATORY APPROVAL. HydroMed hereby appoints Paladin as its exclusive
agent in the Territory during the Term, and Paladin hereby accepts its
appointment, upon the terms and conditions herein specified, to apply for
each Regulatory Approval for the Product for use in the Primary Indication
and any Other Indications currently in development by HydroMed or developed
by HydroMed subsequent to the Effective Date; it being understood that
HydroMed shall be under no obligation to develop the Product for use in
such Other Indications. Paladin hereby agrees to use commercially
reasonable efforts in applying for each such Regulatory Approval, which
shall, whenever permitted by the Law, be applied for in the name of Paladin
and, subject to Section 13.7, shall be owned solely by Paladin and HydroMed
undertakes, at its own expense, to provide Paladin with such assistance and
cooperation to the extent necessary to obtain each such Regulatory Approval
for the Product for use in the Primary Indication and Other Indications
currently in development by HydroMed or developed by HyroMed subsequent to
the Effective Date. The Parties agree to set up a meeting with the TPD
prior to submitting the NDS for the Product and to undertake appropriate
follow-up procedures in order to increase the chances of success in
obtaining Regulatory Approval for the Product for use in the Primary
Indication.
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3.2 FURNISHING DATA. HydroMed shall supply Paladin with all data and
information in its possession or control as is necessary for the purpose of
obtaining Regulatory Approval for the Product in the Territory for use in
the Primary Indication and any Other Indications currently in development
by HydroMed or developed by HydroMed subsequent to the Effective Date,
including but not limited to clinical and non-clinical study data, results
and reports (including toxicology reports) and/or CMC information owned or
used by HydroMed with respect to the Product, and HydroMed may, in its
discretion, make its personnel available as needed to address any
regulatory issues as they arise. Without limiting the generality of the
foregoing, HydroMed shall provide Paladin with access to and the right to
cross-reference existing regulatory filings for the Product submitted by it
and/or its Affiliates or designated nominees in any jurisdiction outside of
the Territory. At the request of Paladin, HydroMed shall notify the
Regulatory Authority in the Territory of Paladin's right to reference any
such regulatory filings in any application filed by Paladin in accordance
with the terms of this Agreement.
3.3 DEVELOPMENT AND REGULATORY APPROVAL PLAN FOR THE PRIMARY INDICATION.
Within sixty (60) Business Days after the Effective Date, Paladin and
HydroMed shall prepare a plan outlining all pre-clinical, clinical and
regulatory activities that are necessary for receiving Regulatory Approval
for the use of the Product in the Primary Indication in the Territory, the
party responsible for each such activity and estimated time schedules for
the completion of all such activities (the "Plan"). Generally, the Plan
shall allocate responsibility for pre-clinical and clinical activities to
HydroMed and regulatory activities in the Territory (including development
and approval of the Labels) to Paladin. Subject to Section 6.3, in no
event, however, shall the Plan require HydroMed to conduct pre-clinical or
clinical activities beyond those activities currently being conducted by
HydroMed in the United States in respect of the Primary Indication. Each
Party shall use commercially reasonable efforts to perform their respective
responsibilities under the Plan within the schedule set forth in the Plan.
Each Party shall provide the other Party with regular (but no less than
quarterly) updates on its progress against the Plan.
3.4 CLINICAL TRIALS FOR THE PRIMARY INDICATION: PHASE IV CLINICAL STUDIES.
HydroMed, at its own cost, shall use commercially reasonable efforts to
complete all necessary pre-clinical and clinical trials that are required
by the TPD in order to receive Regulatory Approval for use of the Product
in the Primary Indication, provided that HydroMed shall not be required to
undertake any pre-clinical or clinical trials for the Primary Indication
beyond those activities currently being conducted in the United States and
Canada in respect of the Primary Indication (which includes one (1) site in
the Territory for the current clinical trial being conducted by HydroMed in
respect of the Primary Indication). Paladin shall have the exclusive right
(but not the obligation) to conduct Phase IV clinical trials relating to
the use of the Product in the Approved Indications in the Territory, but
only with the prior written consent of HydroMed, which consent shall not be
unreasonably withheld or delayed; provided that if Paladin fails to conduct
such Phase IV clinical trial within one (1) year after a request by
HydroMed to conduct such a study, HydroMed shall have the right to conduct
Phase IV clinical trials relating to use of the Product in the Approved
Indications in the Territory. For the purpose of conducting such Phase IV
clinical trials, HydroMed shall supply to Paladin a commercially reasonable
quantity of the Product at a price equal to HydroMed's manufacturing cost.
All clinical and/or marketing data developed by the Parties during the Term
shall remain the property of the Party developing such data, and any data
to which both Parties have contributed to or on which both Parties have
worked shall remain the
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property of both jointly and severally. The Parties agree that they will
promptly share with one another all information and reports regarding the
results of any such Phase IV trials.
3.5 MAINTAINING REGULATORY APPROVAL. Paladin undertakes to use commercially
reasonable efforts to maintain the Regulatory Approval for the Product for
use in the Approved Indications in the Territory. HydroMed undertakes to
assist in maintaining such Regulatory Approval, in accordance with
Paladin's reasonable requests. Subject to the foregoing, all reasonable
direct out-of-pocket expenses incurred by Paladin and/or HydroMed in
maintaining the registrations shall be borne and reimbursed by Paladin.
3.6 COPIES OF CORRESPONDENCE; NOTICE. Copies of all pertinent correspondence
related to the promotion, sale and use of the Product for use in the
Approved Indications, to and from the TPD or other relevant Regulatory
Authority and all submissions, or pertinent excerpts thereof, to the TPD
connected to the Product for use in the Approved Indications will be
furnished by the corresponding Party to the other Party in a timely manner.
3.7 REIMBURSEMENT. Paladin shall use commercially reasonable efforts to seek
to obtain and to maintain the Product on the federal and/or provincial
formularies for use in the Approved Indications in the Territory. HydroMed
agrees to assist Paladin as reasonably required with such efforts. Subject
to the foregoing, any and all expenses incurred by Paladin and/or HydroMed
with the obtaining and maintenance of the Product on the federal and/or
provincial formularies shall be borne and reimbursed by Paladin.
3.8 PATENTED MEDICINE PRICES REVIEW BOARD. Paladin undertakes, at its own
expense, to make all submissions and filings to the Patented Medicine
Prices Review Board ("PMPRB") in order to establish unit prices for the
Product for use in the Approved Indications that conform to the PMPRB's
guidelines.
3.9 ENDOMETRIOSIS INDICATION.
3.9.1. DEVELOPMENT. In the event that HydroMed enters into an agreement
(the "Third Party Development Agreement") with a Third Party outside
of the Territory (the "Development Partner") for the development of
the Product for use in the treatment of endometriosis (the
"Endometriosis Indication"), then Paladin shall have an option,
exercisable within a period of thirty (30) days of being notified in
writing by HydroMed, to pay to HydroMed a share of the total
consideration paid by the Development Partner under the Third Party
Development Agreement, as per the following formula: A x B / C, where
"A" is the total consideration paid by the Development Partner to
HydroMed for the right to develop the Product for the Endometriosis
Indication, "B" is the total annual revenue generated by all
pharmaceutical sales in the Territory, as determined by an independent
and credible source, and "C" is the total annual revenue generated by
all pharmaceutical sales for those territories for which the
Development Partner has been granted marketing rights, as determined
by an independent and credible source. Any payments made by Paladin
shall be consistent with the form, terms and conditions of the Third
Party Development Agreement. If Paladin exercises this option, then
the Endometriosis Indication shall automatically be treated as an
Other Indication and be subject to the terms and conditions herein. If
Paladin does not exercise its option under this subsection 3.9.1 by
the end of the thirty (30) day period, then HydroMed shall be free
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to grant, sell, transfer, license or otherwise assign such rights to
any Third Party, on economic terms no more favourable, in the
aggregate, to such Third Party than those offered to Paladin
hereunder.
3.9.2. RIGHT OF FIRST REFUSAL. Notwithstanding anything contained herein
to the contrary, at any time during the Term, in the event that
HydroMed develops independently the Product for use in the
Endometriosis Indication, HydroMed shall promptly so notify Paladin in
writing. Upon receipt of such notice, Paladin shall have a period of
thirty (30) days to deliver to HydroMed a written notice of its
interest in marketing and distributing the Product for use in the
Endometriosis Indication in the Territory. If Paladin so confirms its
interest, then the Endometriosis Indication shall automatically be
treated as an Other Indication under this Agreement for all purposes,
and to the same extent as any of the Other Indications, unless
otherwise agreed to between the Parties by way of a separate written
agreement (it being understood that Paladin shall in no event be
required to pay any milestone payments provided for herein for the
grant of such rights). If Paladin does not confirm its interest by the
end of such thirty (30) day period, then HydroMed shall be free to
grant, sell, transfer, license or otherwise assign or commercialize
the Product for use in the Endometriosis Indication either itself or
through Third Parties on economic terms no more favourable in the
aggregate to such Third Party than those offered to Paladin hereunder.
3.9.3. ACCESS TO DATA. If Paladin obtains marketing and distribution
rights for the Endometriosis Indication as provided in Subsections
3.9.1 and 3.9.2 above, then HydroMed shall, and shall cause the
Development Partner to, comply with the terms of this Article 3,
including without limitation, the undertaking to provide all necessary
data and information in their possession or control as is necessary
for the purpose of seeking Regulatory Approval for the Endometriosis
Indication.
3.10 DEVELOPMENT AND REGULATORY APPROVAL PLAN FOR OTHER INDICATIONS. Within
sixty (60) Business Days after HydroMed notifies Paladin of its development
of the Product for use in an Other Indication, Paladin and HydroMed shall
prepare a plan outlining all pre-clinical, clinical and regulatory
activities that are necessary for receiving Regulatory Approval for use of
the Product in the Other Indication in the Territory, the party responsible
for each such activity and estimated time schedules for the completion of
all such activities (each such plan, the "Additional Plan"). Generally,
each Additional Plan shall allocate responsibility for pre-clinical and
clinical activities to HydroMed and regulatory activities in the Territory
to Paladin (including development and approval of the Labels). Subject to
Section 6.3, in no event, however, shall any Additional Plan require
HydroMed to conduct pre-clinical or clinical activities beyond those
activities planned to be undertaken by HydroMed for obtaining approval to
market and sell the Product in the United States for use in the Other
Indication, except that HydroMed shall open at least one (1) site in the
Territory for all pivotal clinical trials for any such Other Indication.
Each Party shall use commercially reasonable efforts to perform their
respective responsibilities under each Additional Plan within the schedule
set forth in each Additional Plan. Each Party shall provide the other Party
with regular (but no less than quarterly) updates on its progress against
the Plan.
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ARTICLE 4 - EXCLUSIVE SUPPLY AND DISTRIBUTION; PROMOTION AND SALES
4.1 APPOINTMENT OF DISTRIBUTOR. Without prejudice to the exclusive rights
granted to Paladin in Section 2.1 above and for greater certainty, for the
Term, HydroMed hereby appoints Paladin, and Paladin hereby accepts its
appointment, as exclusive distributor of the Product in the Territory for
the Approved Indications, and HydroMed hereby agrees and undertakes to
supply Paladin with a sufficient quantity of the Product to meet its needs
throughout the Term, subject to and in accordance with the terms and
conditions hereinafter set forth.
4.2 EXCLUSIVE SUPPLY. During the Term, HydroMed shall not supply the Product
for distribution or sale in the Territory for use in the Primary Indication
or Other Indications to any Person other than Paladin, it being understood
between the Parties that HydroMed shall not directly or indirectly sell, or
otherwise make available, the Product in the Territory for use in the
Primary Indication or Other Indications other than through Paladin in
accordance with the terms of this Agreement. HydroMed shall refer to
Paladin all orders or inquiries received by it from sources in the
Territory in connection with the Product for use in the Approved
Indications.
4.3 SALES WITHIN THE TERRITORY. Paladin shall not, and Paladin shall cause its
Affiliates not to, directly or indirectly, without the prior written
consent of HydroMed, sell the Product outside the Territory, or knowingly
sell the Product to any Person within the Territory for resale or use
outside of the Territory.
4.4 COMPETING PRODUCT. Each Party shall not, and shall cause its Affiliates
not to, directly or indirectly, jointly or in conjunction with any other
Person, whether as principal, agent, shareholder, employee, independent
contractor, or in any other manner whatsoever, develop, market, distribute
or sell in the Territory any products that contain the same active
ingredient as that which is contained in the Product, or any products
similar to or competitive with the Product, that are used in any of the
Approved Indications, during the Term and for a period of three (3) years
following the expiry or termination of this Agreement. The foregoing shall
not be construed to prevent HydroMed from directly or indirectly
manufacturing, marketing, distributing and selling the Product in the
Territory for use in any indication after the Term.
4.5 SUBCONTRACTING. The Parties acknowledge and agree that, subject to prior
written notification to and acceptance from the appropriate Regulatory
Authority, each Party shall have the right, at its sole expense, to
subcontract with Third Parties or Affiliates for the performance of its
obligations hereunder, upon prior written approval of the other Party where
the subcontractor is a Third Party (which approval shall not be
unreasonably withheld or delayed); provided, however, that each Party shall
remain responsible to the other Party for (a) assuring that each
subcontractor complies with all applicable provisions of this Agreement and
all applicable Laws and (b) fulfilling all of its obligations hereunder. In
the event that any subcontracting by HydroMed would have a material impact
on Paladin's responsibilities to the appropriate Regulatory Authority and
to the extent reasonably possible, HydroMed will inform Paladin at least
six (6) months prior to arranging for any such subcontracting.
4.6 PRODUCT PROMOTION. Paladin shall employ commercially reasonable efforts to
market, distribute and sell the Product in the Territory for use in the
Approved Indications and shall bear all costs and expenses incurred in
connection with such efforts, except as set forth in this
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Agreement. The Parties agree to meet at either Party's request in order to
discuss any marketing, distribution and sales issues.
4.7 SAMPLES. During the first three (3) years from the date the Product is
launched in the Territory, HydroMed shall provide to Paladin samples of the
Product at a price equal to HydroMed's manufacturing cost. Sample
quantities shall be limited to supplying evaluation units to an advisory
board for example, or key physicians as identified by Paladin and approved
by HydroMed acting reasonably, and not to be used as a promotional tool for
the broad mass of the Territory's physicians.
4.8 PROMOTIONAL MATERIALS. HydroMed shall provide Paladin, at no additional
cost, with samples of all Promotional Materials owned by HydroMed to market
the Product for use in the Approved Indications outside of the Territory;
provided that Paladin reimburses HydroMed for all additional advertising
agency costs, if any, associated with supplying any artwork and graphics.
HydroMed hereby grants to Paladin the right to use such Promotional
Materials and, subject to Article 5, to modify any artwork and graphics for
its purpose. HydroMed shall use commercially reasonable efforts to obtain
for Paladin the right to use Promotional Materials owned by any Third
Party.
4.9 MARKETING PLAN. Commencing the year following submission of the NDS,
Paladin shall prepare, develop and submit to HydroMed an annual marketing
plan (the "Marketing Plan") for HydroMed's review and approval by no later
than the 15th of February of each year during the term of this Agreement,
for the then current Calendar Year. The Marketing Plan will outline plans
for the promotion and sale of the Product in the Territory, and will also
include recommendations for Product pricing, reimbursement status and
activities, positioning, and a description of the promotional programs, if
any, planned for the relevant Calendar Year. HydroMed, acting in good
faith, shall have thirty (30) Business Days from the date of receipt to
review the Marketing Plan and suggest commercially reasonable changes.
Paladin shall make commercially reasonable efforts to include any changes
in the Marketing Plan suggested by HydroMed and shall advise, in writing,
within fifteen (15) Business Days which changes it has incorporated
together with an explanation as to any changes that were suggested by
HydroMed but not incorporated. In the event that HydroMed does not respond
to Paladin within thirty (30) Business Days of the receipt of the Marketing
Plan, the Marketing Plan will be deemed to be acceptable to HydroMed.
Notwithstanding anything else contained herein to the contrary, at the
request of either Party, the Parties shall meet semi-annually to review
proposed marketing plans for the Product.
ARTICLE 5 - BRANDING; TRADEMARKS
5.1 BRANDING. The Product shall bear a product name owned by HydroMed, which
product name shall, if possible, be the same as the product name used in
the United States, as well as certain other trademarks of HydroMed and
trademarks of Paladin (other than a product name) and use the trade dress
identified by HydroMed from time to time and approved by Paladin; provided,
however, that such labeling shall ensure that the distinctiveness of the
trademarks of each party is maintained and include a tag line that
indicates the ownership of each Party's trademarks.
5.2 OBLIGATIONS AND CONDITIONS. No Promotional Materials bearing the Trade
Marks may be used without HydroMed's prior written approval, which consent
shall not be unreasonably
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withheld or delayed but shall be conditioned upon maintaining the
distinctiveness of the trademarks of each Party and including a tag line
that indicates HydroMed's ownership of the Trade Marks. It is agreed by the
Parties that in the event that HydroMed does not respond to Paladin's
submission of the new Promotional Materials or labeling within ten (10)
Business Days, consent shall be deemed to be granted. Notwithstanding
anything to the contrary, Paladin's use of the Trade Marks shall be
conditioned upon Paladin's compliance with HydroMed's then-current quality
standards, which standards HydroMed may update from time to time by written
notice to Paladin, it being understood that Paladin may use up any
packaging, labeling or Promotional Materials that it has at the time of the
update, either in stock or in process.
5.3 LICENSE GRANT BY PALADIN. Paladin hereby, for itself and on behalf of its
Affiliates, grants HydroMed a nonexclusive license to use Paladin's
trademarks, trade names, logos and trade dress (collectively, the "Paladin
Trademarks") on labeling of the Product approved by Paladin.
Notwithstanding anything to the contrary, HydroMed's use of the Paladin
Trademarks shall be conditioned upon HydroMed's compliance with Paladin's
then-current quality standards which standards Paladin may update from time
to time by written notice to HydroMed, it being understood that HydroMed
may use up any packaging, labeling or promotional material that it has at
the time of the update, either in stock or in process.
5.4 CHANGES. Each Party may discontinue, alter or add new trademarks to be
used in connection with the labeling and marketing of the Product in the
Territory for use in the Approved Indications; provided that: (a) the
foregoing shall not be deemed to allow Paladin to use or place a product
name owned by Paladin or licensed by Paladin from a Third Party on the
Product; and (b) each Party may use up any packaging, labeling or
Promotional Materials that it has at the time of the discontinuance,
alteration or addition, either in stock or in process.
5.5 NO OTHER RIGHTS; ALLOCATION OF GOODWILL. Except for the licenses granted
by each of HydroMed and Paladin to the other under this Agreement, neither
Party shall acquire any right, title, or interest in any trademark, trade
name, logo or trade dress of the other Party by reason of this Agreement.
Each of Paladin and HydroMed shall be responsible for registering, as
necessary, its own trademarks, trade names, logos and trade dress. Paladin
acknowledges that all use of any of HydroMed's trade names, trademarks,
trade dress and logos and all of the goodwill associated therewith shall
inure solely to HydroMed's benefit. Likewise, HydroMed acknowledges that
all use of any of Paladin's trademarks, trade dress, trade names, and
logos, and all of the goodwill associated therewith shall inure solely to
Paladin's benefit.
5.6 EFFECT OF TERMINATION. Upon termination of this Agreement both parties
shall immediately cease all use of the other party's trademarks, trade
names, logos and trade dress, except as set forth in Section 13.7
ARTICLE 6 - PRICING AND PAYMENT TERMS
6.1 TRANSFER FEE. Paladin shall pay HydroMed a transfer fee for each unit of
the Product supplied by HydroMed to Paladin under this Agreement (the
"Transfer Fee"). The Transfer Fee is USD $190 per unit of the Product.
Paladin shall pay HydroMed's invoices for Transfer Fees no later than
forty-five (45) days after receipt of each shipment of the Product.
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6.2 ROYALTIES. In consideration of HydroMed's grant of license rights to the
Intellectual Property under this Agreement, Paladin shall pay HydroMed
royalties in an amount equal to eight percent (8%) of Net Sales. Paladin
shall pay the royalties due under this Agreement no later than forty-five
(45) days following the completion of each Calendar Quarter.
6.3 REFUND FOR PRE-CLINICAL AND CLINICAL ACTIVITIES. If the TPD requires
pre-clinical or clinical activities to grant Regulatory Approval for use of
the Product in the Primary Indication or any Other Indication developed by
HydroMed beyond those activities currently being undertaken or subsequently
undertaken by HydroMed at its expense to obtain approval to sell the
Product, HydroMed and Paladin will mutually agree as to how to undertake
such pre-clinical and/or clinical activities and following such agreement,
HydroMed will pay the first Two Hundred Fifty Thousand Dollars ($250,000)
of such pre-clinical and/or clinical activities and Paladin shall pay all
amounts above Two Hundred Fifty Thousand Dollars ($250,000).
Notwithstanding the foregoing, if Paladin has not made an equity investment
in HydroMed of at least One Million Dollars ($1,000,000) in accordance with
the Investment Agreement between Paladin and HydroMed dated the Effective
Date (the "Investment Agreement"), then HydroMed need not pay for such
pre-clinical or clinical activities and instead will refund to Paladin the
actual out-of-pocket cost paid by Paladin for such pre-clinical and
clinical activities subject to the following conditions and limitations:
(a) HydroMed shall be required to make such refund only after Paladin
makes an equity investment in HydroMed of at least One Million Dollars
($1,000,000) in accordance with the Investment Agreement;
(b) HydroMed shall make such refund only after Paladin has provided to
HydroMed invoices and other documentation and records reasonably
requested by HydroMed supporting Paladin's calculation of the actual
out-of-pocket cost paid by Paladin for such pre-clinical and clinical
activities; and
(c) the aggregate amount of such refund shall not exceed Two Hundred Fifty
Thousand Dollars ($250,000).
6.4 QUARTERLY REPORT. Within forty-five (45) days following the end of each
Calendar Quarter, Paladin shall render a written report to HydroMed setting
forth the following information and calculations for such Calendar Quarter:
(a) Net Sales for the Calendar Quarter;
(b) the actual number of Product sold (net of returns) for the Calendar
Quarter; and
(c) the calculation of royalties payable to HydroMed pursuant to Section
6.2.
6.5 ANNUAL REPORT. Within sixty (60) days following the end of each Calendar
Year, Paladin shall render a written report to HydroMed setting forth the
Net Sales for the Calendar Year.
6.6 PHASE IV AND SAMPLE SUPPLIES. In accordance with Sections 3.4 and 4.7,
Paladin shall pay HydroMed for HydroMed's supply of the Product for use in
Phase IV clinical trials and samples in an amount equal to HydroMed's fully
burdened manufacturing cost. Paladin shall
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pay HydroMed's invoices for such supplies within forty-five (45) days after
receipt of the Product.
6.7 PAYMENT. All amounts due to HydroMed in accordance with the terms hereof
shall be paid by cheque or wire transfer in Dollars to such bank as
HydroMed may direct from time to time. Overdue amounts shall bear interest
at a rate equal to the lower of 1.5% per month or the highest rate
permitted by law from the due date until the date paid. All expenses
incurred by Paladin in making such transfers shall be borne by Paladin. For
amounts collected by Paladin in currency other than Dollars, such amounts
shall be converted to Dollars using the exchange ratio set forth in the
Wall Street Journal on the last day of the relevant Calendar Quarter.
6.8 RECORDS. Paladin shall record all sales of Product and shall keep full and
true books of account and other records in accordance with the requirements
of generally accepted accounting principles in Canada and other good
business practice so that details of sales for the Product, the calculation
of Net Sales and Paladin's payment obligations in respect thereof may be
properly ascertained.
6.9 AUDIT. Paladin agrees, at the request of HydroMed and at HydroMed's
expense, to permit an independent accounting firm of recognized Canadian
national standing, selected by HydroMed to have access, upon reasonable
notice, during ordinary business hours and no more frequently than once in
any Calendar Year, to such books of account and other records as may be
necessary to determine the correctness of any report by Paladin to HydroMed
in accordance with this Article 6. If such independent certified public
accountant shall determine that an amount is due and owing by one Party to
the other, then the owing Party shall promptly pay the amount due and
owing, provided that if the Party owing the amount is Paladin and such
amount is five percent (5%) or more of the total amount that should have
been paid to HydroMed under this Agreement in respect of the audited
period, then Paladin shall also reimburse HydroMed for the cost of the
audit.
ARTICLE 7 - MANUFACTURE AND SUPPLY
7.1 MANUFACTURING. HydroMed shall, directly or through an Affiliate or Third
Party designee, have the sole right and responsibility for manufacturing,
assembling, packaging and labeling the Product in such quantities as, in
HydroMed's opinion, are required to fill all orders and for maintaining
such inventory levels of raw materials and packaging components as are
required to meet Paladin's then-current forecast for the Product. HydroMed
shall require and ensure that each Product is assembled and packaged in
accordance with GMPs and all applicable Laws and includes the Labels.
Paladin shall be responsible for supplying camera-ready proofs of all
Labels and other artwork to be included with the Product.
7.2 SUPPLY. HydroMed or its Affiliates shall supply Paladin with all of its
requirements in the Territory for the Product for use in the Approved
Indications in finished package form. HydroMed shall use all reasonable
efforts to supply Paladin with a sufficient quantity of the Product to
satisfy Paladin's forecasted needs from time to time throughout the Term
and in accordance with the terms of this Agreement. Notwithstanding
anything to the contrary, HydroMed shall have no obligation or liability
for its failure or inability to satisfy orders for the Product that exceeds
the Forecast in effect for the relevant period at the time of ordering by
forty percent (40%).
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7.3 FAILURE TO SUPPLY. In the event that HydroMed or its Affiliates are unable
to supply the Product in specified quality or in quantities sufficient to
meet forecast demand for a cumulative period of ninety (90) Business Days
in any twelve (12) month period ("Supply Failure Period"), then Paladin may
elect in its sole and absolute discretion to either:
7.3.1. as its sole and exclusive remedy, receive liquidated damages in an
amount equal to (i) the Net Sales that Paladin would have generated
from the last day of the Supply Failure Period until the date that is
twelve (12) months later less (ii) the product of the Transfer Fee
multiplied by the aggregate number of units of the Product forecasted
to be ordered during such twelve (12) month period (as set forth in
the most recent Forecast provided pursuant to Section 8.3), provided
that
(a) if Paladin elects to receive liquidated damages under this Section
7.3.1, then HydroMed shall be relieved of its obligations under
Article 7 and Article 8 to manufacture and supply Paladin with Product
(both in respect of any unsatisfied Purchase Orders and any new
Purchase Orders that Paladin may place with HydroMed) until such time
as HydroMed notifies Paladin that it is able to resume supply of the
Product under the terms of this Agreement, except that if HydroMed
does not give such notice within twelve (12) months after the last day
of the Supply Failure Period, this Agreement shall automatically
terminate; and
(b) if HydroMed's inability to supply is caused by an Event of Force
Majeure, the option provided by this Section 7.3.1 shall not be
available to Paladin; or
7.3.2. have the Product made by a Third Party manufacturer designated by
HydroMed and approved by Paladin, which approval shall not be
unreasonably withheld, conditioned, denied or delayed. If Paladin
makes such an election, HydroMed shall grant the Third Party
manufacturer a non-exclusive, royalty-free license under the
Intellectual Property for the sole purpose of manufacturing and
selling to Paladin the quantity of the Product that HydroMed is unable
to supply.
7.4 SUPPLY RESUMPTION. If Paladin exercises its rights to have a Third Party
manufacturer manufacture the Product pursuant to Section 7.3 and thereafter
during the Term HydroMed desires to resume supplying Paladin with the
Product (whether by HydroMed or otherwise), then HydroMed shall notify
Paladin of such desire. Paladin shall then resume purchasing Product
exclusively from HydroMed for the remainder of the Term as soon as HydroMed
demonstrates to Paladin's reasonable satisfaction that HydroMed (whether by
HydroMed or otherwise) is capable of re-establishing a satisfactory supply
of the Product; provided that Paladin shall not be required to cancel any
purchase orders for the Product issued to the Third Party manufacturer that
were issued in accordance with the Forecasts provided to HydroMed pursuant
to Section 8.3 prior to the date that HydroMed gave Paladin notice of its
desire to resume supply and cover periods no more than six (6) months after
the date that HydroMed gave Paladin notice of its desire to resume supply.
If and when HydroMed resumes supplying the Product pursuant to this Section
7.4, the Third Party manufacturer shall be required to return to HydroMed
all information provided to the Third Party manufacturer pursuant to
Section 7.3 and any license granted to the Third Party manufacturer shall
terminate. Notwithstanding anything in this Agreement to the contrary, upon
the termination of this Agreement for any reason, the Third Party
manufacturer shall be required to return to
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HydroMed all information provided to Third Party manufacturer pursuant to
Section 7.3 and any license granted to the Third Party manufacturer shall
terminate.
7.5 DOCUMENTATION AND CERTIFICATE OF ANALYSIS. HydroMed shall provide Paladin
with required supporting documentation for the manufacture and assembly of
the Product in a form suitable for Paladin's submission to the TPD. A
certificate of analysis and such other documentation specified in the
Quality Agreement shall be delivered with each batch of the Product
delivered to Paladin.
7.6 DELIVERY AND ACCEPTANCE.
7.6.1. ACCEPTANCE. Paladin shall not be obliged to accept delivery of any
lot or batch of the Product unless the lot or batch meets the
Specifications. Each lot or batch of the Product shall be considered
accepted by Paladin unless Paladin has rejected the same by delivering
written notice thereof to HydroMed as soon as is reasonably possible
but in any event no later than forty-five (45) days after delivery of
such lot or batch of the Product, unless re-testing is required in
which case Paladin shall have another thirty (30) days from the date
that re-testing is indicated as being required. Paladin is entitled to
reject any batch which does not meet the Specifications or the
requirements of GMPs, is incorrectly labeled, is not shipped in
accordance with the shipping and handling requirements applicable
thereto or does not contain the specified Labels ("Rejected Product").
To the extent possible, Paladin shall verify counts and identify any
damages to HydroMed within five (5) Business Days of receipt.
Paladin's sole and exclusive remedy for any shortage in a shipment
shall be for HydroMed to send additional units of the Product as soon
as reasonably possible.
7.6.2. REJECTION NOTICE. A written notice of rejection shall be conclusive
and binding upon HydroMed unless HydroMed notifies Paladin within
forty-five (45) Business Days of receipt by HydroMed of the written
notice of rejection that it denies responsibility for the problem in
question. In the event of such a notice by HydroMed, representative
samples of the Rejected Product shall be submitted to a mutually
acceptable independent laboratory or consultant, as required, for
analysis or review, the costs of which shall be paid by the party
whose position is not sustained.
7.6.3. REIMBURSED COSTS. Paladin shall return all Rejected Product to
HydroMed at Paladin's expense. If Rejected Products are determined to
have not complied with the Specifications or the requirements of GMPs
or were incorrectly labeled (including the Labels), then HydroMed
shall reimburse the amount paid by Paladin, if any, for delivery of
the Rejected Product to HydroMed.
7.7 IMPROVEMENTS; NEW FORMULATION. HydroMed shall furnish Paladin with all
information pertinent to the marketing, sale and promotion of the Product
relating to any Improvements, which HydroMed may make from time to time to
the Product, or to any new formulation of the Product. To the extent
reasonably possible, HydroMed shall provide Paladin with six (6) months
prior written notice of any anticipated Improvements or new formulations.
7.8 EXPIRATION DATE. The expiration date for the Product will be as permitted
by the applicable Regulatory Approval, provided that HydroMed acknowledges
that it would be desirable to have expiration dates of at least twenty-four
(24) months.
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7.9 COMPLIANCE WITH LAWS. HydroMed shall comply with all applicable Laws in
the Territory in relation to the manufacture, handling and storage and sale
of the Product until delivery to the ship-to location set forth in the
applicable Purchase Order. Following delivery of the Product to the ship-to
location set forth in the applicable Purchase Order, Paladin shall comply
with all applicable Laws in relation to the handling, storage, distribution
and sale of the Product in the Territory and HydroMed's then-current
instructions relating to handling, storage and shipment of the Products in
the Territory.
7.10 KITS. HydroMed shall be responsible for obtaining all requisite consents
and approvals from relevant Third Parties (other than Governmental Bodies)
in connection with the assembly and packaging of the Kit and all of its
contents. Paladin shall ensure that all components of the Kit have the
necessary regulatory approvals from the TPD to be used, marketed,
distributed and sold in the Territory, and HydroMed shall give Paladin
reasonable assistance in this regard. HydroMed shall order, at its own
cost, the Canadian Sourced Items from a Canadian manufacturer or wholesaler
and require them to be delivered to the ship-to address set forth in
Paladin's Purchase Order for the Product. Until packaged together with the
Product and sold to a customer, the Canadian Sourced Items shall be owned
by HydroMed, and Paladin shall store its inventory of the Canadian Sourced
Items in a separate area that conspicuously identifies such items as the
property of HydroMed. Paladin shall be solely responsible for packaging the
Canadian Sourced Items with the Products in accordance with all Laws and
GMPs. Paladin hereby assumes all risks regarding the Canadian Sourced
Items, including any issues with respect to delivery, quantity and/or
quality, provided that HydroMed shall cooperate in good faith with Paladin
in resolving claims and issues with manufacturers) and/or wholesalers) of
the Canadian Sourced Items.
ARTICLE 8 - FORECASTS/ORDERING/TITLE AND RISK/RETURNS
8.1 ORDERING. Paladin may order units of the Product by issuing binding
purchase orders (each, a "Purchase Order") to HydroMed pursuant to the
terms of this Agreement. Each Purchase Order shall state the quantity of
the Product to be purchased, delivery date(s) and routing instructions,
destination or destinations. No different or additional terms or conditions
on any purchase order, acknowledgment or other transmittal, whether a
standard business form or otherwise, utilized by Paladin or HydroMed in
connection with the sale of the Product shall be construed or deemed to be
an amendment of or supplement to this Agreement or otherwise binding on
either Paladin or HydroMed.
8.2 ACCEPTANCE OR REJECTION OF PURCHASE ORDERS. HydroMed shall indicate its
acceptance or rejection of each Purchase Order within ten (10) Business
Days after receipt; provided that HydroMed may reject a Purchase Order, in
whole or in part, only if: (a) the Purchase Order fails to comply with the
terms and conditions of this Agreement; (b) the delivery date is less than
ninety (90) days from the date of HydroMed's receipt of such Purchase
Order, or (c) if the volume under the Purchase Order and all other accepted
Purchase Orders covering the applicable monthly period exceeds the volume
set forth in Paladin's then-current forecast (delivered pursuant to Section
8.3) by more than forty percent (40%). If requested by Paladin following
Paladin's receipt of HydroMed's rejection notice under clause (c) above,
HydroMed will use commercially reasonable efforts to deliver the excess
volume of the Product specified in the rejected Purchase Order, but
HydroMed's failure to so deliver the excess volume shall not be a breach of
this Agreement. HydroMed's sole obligation in filling accepted Purchase
Orders shall be to use commercially reasonable efforts to fill Paladin's
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orders for the Product. In no event shall HydroMed be liable to any third
party for HydxoMed's failure to deliver the Product to Paladin by any
delivery due date set forth in any Purchase Order.
8.3 FORECASTS. Paladin shall provide HydroMed a non-binding twelve (12) month
rolling forecast (the "Forecast") of Paladin's estimated requirements of
the Product, itemized for use as commercial product or as samples, for the
Term. The Forecast shall be reviewed and updated by Paladin no later than
thirty (30) days before the start of each calendar quarter during the Term.
Each such Forecast shall reflect a good faith attempt by Paladin to
estimate quantity requirements of the Product, based on anticipated demand
herefore.
8.4 SHIPMENT. HydroMed will use diligent efforts to ship the Product ordered
by Paladin within one hundred and twenty (120) days after its acceptance of
Paladin's purchase order. The Products will be shipped CPT (Incoterms 2000)
to the ship-to address set forth in Paladin's purchase order. HydroMed
shall ensure that the Product is suitably packed for shipment in HydroMed
standard containers.
8.5 PRODUCT LIABILITY INSURANCE. HydroMed agrees to maintain product liability
insurance consistent with its normal business practices to cover risks
related to the Product and, upon Paladin's request, to provide Paladin with
certificates of insurance attesting to the existence of such insurance.
8.6 ALL RISK INSURANCE. Paladin agrees to maintain all risk and general
liability insurance consistent with its normal business practices to cover
risks related to the storage, marketing, sales, and distribution of the
Product in the Territory, and, upon HydroMed's request, to provide HydroMed
with certificates of insurance attesting to the existence of such
insurance. HydroMed agrees to maintain all risk and general liability
insurance consistent with its normal business practices to cover normal
business risks and including intellectual property claims, and, upon
Paladin's request to provide Paladin with certificates of insurance
attesting to the existence of such insurance. Each Party shall name the
other Party as a co-insured under each insurance policy.
8.7 INSURANCE NOTIFICATION. Each Party agrees, upon request, to advise the
other Party of the status of the insurance required by this Article 8 and
of any change in such status. It is understood and agreed that furnishing
of such insurance coverage will not relieve either Party of their
obligations under this Agreement.
8.8 RETURNS. Returns to Paladin of the Product sold after the Effective Date
shall be made in accordance with the Returns Policy set forth in Schedule
8.8 hereto. The policy shall be communicated to customers in an appropriate
fashion. Destruction of the returned Product is the responsibility of
Paladin. The returned Product will be destroyed in accordance with all
appropriate Laws relating to the disposal of pharmaceutical products,
including any and all appropriate environmental Laws.
ARTICLE 9 - QUALITY AGREEMENT
9.1 QUALITY. Both Parties agree that responsibility for quality control,
processes and procedures as they relate to the Product shall be governed by
the Quality Agreement to be attached hereto as Schedule 9.1 after HydroMed
and Paladin mutually agree to the Quality
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Agreement. The quality control, processes and procedures defined in the
Quality Agreement shall include without limitation the procurement of
components/ingredients, the manufacture of bulk product, the packaging of
the bulk product, the creation of printed materials, the analytical testing
of ingredients, components and final product, the execution of stability
protocols, and the Quality Control Release procedure. Upon approval from
the regulatory and scientific affairs departments of both companies, the
Quality Agreement will serve as the standard of operation between the two
Parties. To the extent of any conflict between the provisions of the
Quality Agreement and any other agreement between the parties dealing with
the same subject matter, the Quality Agreement shall prevail.
ARTICLE 10 - REPRESENTATIONS AND WARRANTIES
10.1 REPRESENTATIONS AND WARRANTIES OF HVDROMED. HydroMed hereby makes the
following covenants, representations and warranties to Paladin and does so
in full understanding and acknowledgement that Paladin is relying on its
said representations and warranties in entering into this Agreement,
notwithstanding any due diligence investigation done or information
obtained by Paladin prior to the Effective Date:
(a) STATUS. HydroMed is a corporation organized and existing under the
Laws of the State of Delaware, U.S.A. No action has been taken by the
directors, officers or shareholders of HydroMed to dissolve the
corporation. HydroMed has the corporate power and authority to enter
into the present Agreement and to perform all its obligations
hereunder.
(b) ALL NECESSARY PROCEEDINGS. The execution and delivery by HydroMed of
this Agreement, the performance by HydroMed of all the terms and
conditions thereof to be performed by it and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate actions and proceedings, and no other act or
approval of any Person is required to authorize such execution,
delivery, and performance.
(c) NO VIOLATION. HydroMed warrants that the execution, delivery and
performance of this Agreement by it: (i) does not and will not violate
or conflict with any provision of Law or any provision of its articles
of incorporation or by-laws; and (ii) does not and will not, with or
without the passage of time or the giving of notice, result in the
breach of, or constitute a default, cause the acceleration of
performance, or require any consent under, or result in the creation
of any lien, charge or encumbrance upon any of its property or assets
pursuant to any material instrument or agreement to which it is a
party or by which it or its properties may be bound or affected.
Without limiting the generality of the foregoing, HydroMed has not
made any written or oral agreement or undertaking with any other
Person regarding the rights to promote, distribute or sell the Product
or to seek Regulatory Approval for the Product in the Territory.
(d) COMPLIANCE. HydroMed warrants that the Product to be manufactured and
assembled by it or by any of its Affiliates shall be in compliance
with the Specifications at the time of delivery to ship-to address set
forth in the applicable purchase order and all applicable Laws in
relation to the manufacturing, handling, storage and labeling of the
Product. Without limiting the generality of the foregoing,
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HydroMed warrants that the Product will be manufactured in accordance
with GMPs. Once per Calendar Year, HydroMed shall provide to Paladin a
letter stating that the manufacturing batch records have been reviewed
and accepted according to GMPs. HydroMed further warrants that it will
supply Paladin with Product that, at the time of shipment, will have a
remaining shelf-life at least equal to the shelf-life permitted by the
applicable Regulatory Approval (assuming storage in accordance with
applicable requirements).
(e) THIRD PARTY CLAIMS. To HydroMed's knowledge, as of the Effective
Date, there is no outstanding or threatened claim or allegation that
the marketing, distribution or sale of the Product or use of the Trade
Marks in accordance with this Agreement infringe upon any rights of a
Third Party.
(f) RIGHT TO GRANT LICENSES. To HydroMed's knowledge, HydroMed is the
sole and exclusive owner or licensee of all Intellectual Property
needed to market, distribute and sell the Product in the Territory in
accordance with this Agreement. HydroMed has the full right, power and
authority to grant the rights granted to Paladin hereunder, free and
clear of any mortgage, lien or encumbrance.
(g) DISCLOSURE. HydroMed has licensed to Paladin under this Agreement all
Intellectual Property owned or controlled by HydroMed relating to the
Product necessary for Paladin to perform its obligations under this
Agreement. HydroMed has faithfully informed Paladin about all
information in its knowledge or possession or control concerning the
safety and efficacy of the Product, and any side effects, injury,
toxicity or sensitivity reactions and incidents associated with all
uses, studies, investigations or tests involving the Product (animal
or human) throughout the world.
(h) REGULATORY APPROVAL. As of the Effective Date of this Agreement,
HydroMed is not aware of any facts that would reasonably lead it to
conclude that the Product will be unable to receive Regulatory
Approval in the Territory.
(i) INTELLECTUAL PROPERTY PROTECTION. HydroMed has not and will not
knowingly or intentionally take any action, and will use its best
efforts to assure that its Affiliates will not knowingly or
intentionally take any action, during the term of the Agreement, that
could adversely affect the Intellectual Property covering the Product,
including without limitation, the distinctiveness or value of the
Trade Marks. HydroMed shall not authorize or undertake any use of the
Trade Marks (other than HydroMed and its variations) or any variation
thereof in the Territory in connection with any products or materials
other than the Product or materials associated with the Product.
10.2 REPRESENTATIONS AND WARRANTIES OF PALADIN. Paladin hereby makes the
following covenants, representations and warranties to HydroMed and does so
in full understanding and acknowledgement that HydroMed is relying on its
said representations and warranties in entering into this Agreement:
(a) STATUS. Paladin is a corporation organized and existing under the
Laws of Canada. No action has been taken by the directors, officers or
shareholders of Paladin to
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dissolve the corporation. Paladin has the corporate power and
authority to enter into the present Agreement and to perform all its
obligations hereunder.
(b) ALL NECESSARY PROCEEDINGS. The execution and delivery by Paladin of
this Agreement, the performance by Paladin of all the terms and
conditions thereof to be performed by it and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate actions and proceedings, and no other act or
approval of any Person is required to authorize such execution,
delivery, and performance.
(c) NO VIOLATION. Paladin warrants that the execution, delivery and
performance of this Agreement by it: (i) does not and will not violate
or conflict with any provision of Law or any provision of its articles
of incorporation or by-laws; and (ii) does not and will not, with or
without the passage of time or the giving of notice, result in the
breach of, or constitute a default, cause the acceleration of
performance, or require any consent under, or result in the creation
of any lien, charge or encumbrance upon any of its property or assets
pursuant to any material instrument or agreement to which it is a
party or by which it or its properties may be bound or affected.
(d) COMPLIANCE. Paladin shall comply with all applicable Laws in relation
to the handling, storage, distribution and sale of the Product.
(e) TRADE MARKS. Paladin shall not authorize or undertake any use of any
xxxx that is confusingly similar to the Trade Marks in the Territory.
10.3 NO IMPLIED REPRESENTATION OR WARRANTIES. EXCEPT INSOFAR AS SPECIFICALLY
PROVIDED FOR IN THIS ARTICLE 10, THE REPRESENTATIONS AND WARRANTIES SET OUT
ABOVE IN THIS ARTICLE 10 ARE THE ONLY REPRESENTATIONS AND WARRANTIES GIVEN
BY EITHER PARTY HEREIN AND ARE MADE IN LIEU OF ALL OTHER REPRESENTATIONS
AND WARRANTIES, EXPRESS OR IMPLIED. THERE IS NO OTHER CONDITION OR WARRANTY
THAT THE PRODUCT SHALL BE FREE FROM CLAIMS OF INFRINGEMENT, MERCHANTABLE OR
FIT FOR ANY PARTICULAR PURPOSE, OR SHALL SUCCESSFULLY RECEIVE REGULATORY
APPROVAL.
10.4 LIMITS ON REPRESENTATIONS AND WARRANTIES. Nothing herein shall be
construed as a representation or warranty by Paladin that it will be
successful in obtaining Regulatory Approval for the Product for any
indication.
ARTICLE 11 - INDEMNIFICATION
11.1 BY PALADIN. Paladin shall indemnify HydroMed, its affiliates and their
respective directors, officers, shareholders, employees or agents
(collectively, the "HydroMed Releasees"), and hold it harmless from and
against any and all Losses (including personal injury, death or property
damage) arising from any and all Third Party claims against the HydroMed
Releasees: (a) relating to the marketing, distribution or sale of the
Product in the Territory to the extent such claims are the result of the
fault, negligence or willful misconduct of Paladin, or its Affiliates, or
their respective directors, officers, shareholders, employees or agents;
(b) of any nature whatsoever relating to the Canadian Source Items and/or
any processing or
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23
repackaging of the Product in connection with Paladin's incorporation of
the Canadian Source Items with the Product; or (c) caused by a breach or
misstatement by Paladin of its representations and warranties under this
Agreement; except to the extent such Third Party claims result from the
fault, negligence or willful misconduct of the HydroMed Releasees or its
or their failure to comply with the terms of this Agreement. Paladin shall
not be liable under this Section 11.1 in the event that the HydroMed
Releasees admit or settle any such claim without the prior written consent
of Paladin, which consent shall not be unreasonably withheld, conditioned,
delayed or denied.
11.2 BY HYDROMED. HydroMed shall indemnify Paladin, its Affiliates and their
respective directors, officers, shareholders, employees or agents
(collectively, the "Paladin Releasees"), and hold it harmless from and
against any and all Losses (including personal injury, death or property
damage) arising from any and all Third Party claims against the Paladin
Releasees: (a) that the manufacture, use or sale of the Product in
accordance with this Agreement infringes the intellectual property rights
of a third party in the Territory; (b) of any nature whatsoever relating to
the manufacture or use of the Product; or (c) caused by a breach or
misstatement by HydroMed of its representations and warranties under this
Agreement; except to the extent such Third Party claims result from the
fault or negligence of the Paladin Releasees, or its or their failure to
comply with the terms of this Agreement. HydroMed shall not be liable under
this Section 11.2 in the event that the Paladin Releasees admit or settle
any such claim without the prior written consent of HydroMed, which consent
shall not be unreasonably withheld, delayed or denied.
11.3 INDEMNIFICATION PROCEDURE. A Party seeking indemnification (the
"Indemnified Party") shall notify, in writing, the other Party (the
"Indemnifying Party") within fifteen (15) Business Days of the assertion of
any claim or discovery of any fact upon which the Indemnified Party intends
to base a claim for indemnification. An Indemnified Party's failure to so
notify the Indemnifying Party shall not, however, relieve such Indemnifying
Party from any liability under this Agreement to the Indemnified Party with
respect to such claim except to the extent that such Indemnifying Party is
actually denied, during the period of delay in notice, the opportunity to
remedy or otherwise mitigate the event or activity (ies) giving rise to the
claim for indemnification and thereby suffers or otherwise incurs
additional liquidated or other readily quantifiable damages as a result of
such failure.
11.4 DEFENDING CLAIMS. The Indemnifying Party, while reserving the right to
contest its obligations to indemnify hereunder, shall be responsible for
the defense of any claim, demand, lawsuit or other proceeding in connection
with which the Indemnified Party claims indemnification hereunder. The
Indemnified Party shall have the right, at its expense, to participate
jointly with the Indemnifying Party in the defense of any such claim,
demand, lawsuit or other proceeding, but with respect to any issue involved
in such claim, demand, lawsuit or other proceeding with respect to which
the Indemnifying Party has acknowledged its obligation hereunder, the
Indemnifying Party shall have the right to select counsel, settle, try or
otherwise dispose of or handle such claim, demand, lawsuit or other
proceeding on such terms as the indemnifying Party shall deem appropriate,
subject to any reasonable written objection of the Indemnified Party.
11.5 INTELLECTUAL PROPERTY INFRINGEMENT. HydroMed will notify Paladin if it
receives any notice of infringement related to the activities engaged in
under this Agreement, and advise Paladin of any litigation which may be
initiated against it related to the activities engaged in under
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24
this Agreement, and will keep Paladin advised throughout such litigation.
All costs of such litigation shall be borne by HydroMed unless any of the
Paladin Releasees admit infringement or settle such litigation without the
prior written consent of HydroMed, which consent shall not be unreasonably
withheld, delayed or denied. Notwithstanding the foregoing, and without
limiting the generality of Sections 11.2 through 11.4, in the event that
the marketing, use or sale of the Product in accordance with this Agreement
infringes or would infringe any Third Party intellectual property rights,
the Party first becoming aware of same shall notify the other and, subject
to Sections 11.2 through 11.4, the Parties shall discuss the matter and
decide on a course of action. Should any such infringement claim or suit be
upheld by a final, non-appealable order of a court that prevents Paladin
from marketing, using and selling the Product in the Territory, HydroMed
shall repurchase from Paladin, at cost, all of the Product currently in
Paladin's stock that have not been sold. HydroMed may then, in its sole
discretion after consultation with Paladin, elect to (i) change the Product
so as to make it non-infringing; or (ii) obtain rights to the Third Party
intellectual property rights and make such rights available to Paladin (it
being understood that Paladin shall in no event be required to make any
additional payments provided for herein for the grant of such rights). If,
however, HydroMed chooses to do neither of the foregoing, then HydroMed
shall inform Paladin and the Parties may mutually agree to terminate this
Agreement, provided that if this Agreement is not so terminated, then
HydroMed shall be relieved of its obligations under Article 7 and Article 8
to manufacture and supply Paladin with Product (both in respect of any
unsatisfied Purchase Orders and any new Purchase Orders that Paladin may
place with Hydromed), and Paladin shall not be entitled to exercise any
rights or remedies against HydroMed in respect of any failure to supply.
11.6 THIRD PARTY INFRINGEMENT.
11.6.1. In the event that either Party determines that a Third Party (other
than a permitted licensee, transferee or distributor of either Party)
is making, using, or selling a product or process that may infringe
any of the Intellectual Property relating to the Product, including
later issued and acquired patents covering the Product, or any uses or
processes pertaining thereto, it will promptly notify the other Party
in writing.
11.6.2. HydroMed shall be responsible for, in its sole discretion,
obtaining a discontinuance of any infringement or bringing suit
against a Third Party infringer relating to the Product.
Notwithstanding anything contained herein to the contrary, HydroMed
shall have the right, but not the obligation, to bring such a suit.
HydroMed shall bear all the expenses of any such suit brought by it
and shall, after retaining for itself an amount equal to such
expenses, split equally the remaining balance of any and all recovery
and damages therefrom with Paladin. Paladin agrees to be named as a
co-plaintiff if HydroMed brings suit and shall cooperate with HydroMed
(which shall include providing any necessary assistance and executing
any necessary documents, with any reasonable, receipted out-of-pocket
expenses being reimbursed to Paladin by HydroMed to the extent such
expenses were previously approved in writing by HydroMed), and shall
have the right to consult with HydroMed and to participate in and be
represented by independent counsel in such litigation at its own
expense. Except as otherwise specifically provided herein, HydroMed
shall have control over any such suit, and decisions as to settlement,
methods and/or terms and conditions for resolving the suit shall be
made by HydroMed (after consultation with Paladin, should Paladin be
joined as a party to such suit).
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11.6.3. In the event HydroMed chooses not to prosecute an infringement as
aforesaid within ninety (90) days after learning of the
infringement, Paladin shall have the right to do so. In such event,
HydroMed shall cooperate with Paladin (which shall include
providing any necessary assistance and executing any necessary
documents, with any reasonable, receipted out-of-pocket expenses
being reimbursed to HydroMed by Paladin to the extent such expenses
were previously approved in writing by Paladin). Paladin shall bear
all the expenses of any such suit brought by it and shall, after
retaining for itself an amount equal to such expenses, split
equally the remaining balance of any and all recovery and damages
from such suit with HydroMed. No settlement, consent judgment or
other voluntary final disposition of the suit may be entered into
without the prior written consent of HydroMed.
ARTICLE 12 - CONFIDENTIALITY
12.1 CONFIDENTIAL INFORMATION. For the purposes of this Agreement,
"Confidential Information" means all verbal, written, electronically
transmitted and/or machine reproduced information, chemical structures,
data, documents, methods and Intellectual Property of or relating to the
business of either Party or its Affiliates, already provided or disclosed
by it or its Affiliates to the other Party, or which will be provided to
the other Party under this Agreement, and all materials, data, results,
reports and other documents generated by or on behalf of the other Party
containing or regarding such information, data, documents, methods and
Intellectual Property.
12.2 OBLIGATIONS. During the term of this Agreement, each Party may supply to
the other Party such Confidential Information as is considered useful
solely for the purpose of enabling the other Party to perform its
obligations hereunder (the "Purpose"). The other Party shall not use or
allow the use of the Confidential Information for any other purpose.
12.3 EXCEPTIONS. Neither Party shall have any obligation of non-disclosure or
non-use hereunder with respect to any Confidential Information which:
(a) at the time of disclosure to the other Party is already available or
known to the public;
(b) after disclosure to the other Party becomes available or known to the
public through no breach of this Agreement;
(c) is already lawfully in the possession of the other Party at the time
disclosure hereunder was made and such possession is documented by
written evidence and not subject to any obligation of non-disclosure
or non-use; or
(d) is received from a Third Party having the right to disclose same and
who is not bound by obligations of non-disclosure and/or non-use.
12.4 UNAUTHORISED USE. In case either Party becomes aware or has knowledge of
any unauthorised use or disclosure of Confidential Information, it shall
promptly notify the other Party of such unauthorised use or disclosure and,
thereafter, shall take all reasonable steps to assist the other Party in
attempting to minimise any potential or actual damages or losses resulting
from such unauthorised use or disclosure.
CONFIDENTIAL
26
12.5 RETURN OF DOCUMENTS. Each Party, upon receipt of a written request from
the other Party following the expiration or termination of this Agreement,
shall promptly return to the other Party all Confidential Information of
such other Party, including all reproductions and copies thereof together
with all internal material and documents generated by it containing
Confidential Information or references thereto, from which references the
substance of the Confidential Information can be implied or understood and
shall delete all references thereto stored electronically.
12.6 OWNERSHIP RIGHTS. Each Party agrees that it shall not claim to have any
rights, title or ownership in the Confidential Information of the other
Party or any discoveries or inventions based on or derived from the
Confidential Information, and that rights, title and ownership in the
Confidential Information or any discoveries or inventions based on or
derived from said Confidential Information shall, as between the Parties,
rest in the other Party. Each party agrees to promptly disclose to the
other Party any discoveries or inventions based on or derived from the
Confidential Information. Each Party further agrees to assign (and does
hereby assign) to the other Party, the sole and exclusive ownership in all
such discoveries and inventions and to sign all documents and do all things
required to give effect thereto.
12.7 TERM. The provisions of this Article 12 shall survive the expiry or
termination of the Agreement until all of the Confidential Information has
fallen within one of the exceptions set forth in Sections 12.3(a) through
(d) inclusive.
ARTICLE 13 - TERM AND TERMINATION
13.1 TERM. This Agreement shall commence upon the Effective Date hereof, until
the fifteenth (15th) anniversary date of the date on which Regulatory
Approval is obtained for the Primary Indication, and shall automatically
renew for subsequent three (3) year terms on the same terms and conditions,
unless sooner terminated as provided elsewhere in this Agreement.
13.2 TERMINATION. This Agreement may be terminated:
(a) By either Party if the other Party commits a Material Breach of any of
its obligations under this Agreement and (i) fails to remedy the
breach within thirty (30) Business Days of being required by the first
Party to do so; or (ii) where remedy of the breach is not reasonably
possible within thirty (30) Business Days, fails to propose a plan
within twenty (20) Business Days which, in the opinion of the first
Party acting reasonably, is capable of providing a remedy of the
breach within ninety (90) Business Days.
(b) If either Party shall commence as debtor any proceedings under any
bankruptcy, insolvency, readjustment of debt, dissolution or
liquidation Law or any such proceeding shall be commenced against
either Party, or any trustee or receiver shall be appointed therefor,
and either Party shall by any act or failure to act indicate approval
of or consent to, or acquiescence in such proceedings or in the
appointment of any such trustee or receiver; or if any such
proceedings brought against either Party shall be approved by any
court and shall remain undismissed for thirty (30) Business Days after
its levy, then in any such case, the Party not involved in such
proceedings shall have the option to terminate this Agreement in its
entirety by
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27
written notice of such termination to the Party involved in such
proceedings and upon the giving of such notice this Agreement shall
immediately terminate.
(c) By either Party, upon at least thirty (30) days prior written notice
to the other Party, if, as a result of an Event of Force Majeure, the
other Party is unable to fully perform its obligations hereunder for a
period of one hundred fifty (150) consecutive days; provided that if
the required performance is met during the thirty (30) day period,
this Agreement shall continue in full force and effect as if the
notice had not been given.
(d) By HydroMed if Paladin fails to make any equity investment in HydroMed
when required by the Investment Agreement or chooses not to exercise
its option to make an equity investment in HydroMed of at least One
Million Dollars ($1,000,000) in accordance with the Investment
Agreement.
(e) By Paladin if HydroMed fails to close, by June 30, 2003, one or more
third party financing transactions raising at least Ten Million
Dollars ($10,000,000) in the aggregate.
(f) By Paladin, if any Regulatory Authority has finally denied Regulatory
Approval (or any material part thereof) for the Product with respect
to the Primary Indication.
13.3 PARTIAL TERMINATION. In the event that any termination hereunder is
limited to one (1) or more, but not all forms, dosages or indications of
the Product, then the effects of such termination shall only apply to the
affected form(s), dosage(s) or indication(s), but shall not affect in any
way the validity of this Agreement with respect to any other form or
dosage.
13.4 REMEDIES NOT LIMITED. The termination of this Agreement by either party
shall not limit remedies that may be otherwise available.
13.5 SURVIVAL. Expiration or termination of this Agreement for any reason shall
not relieve either party of its obligations that have accrued prior to the
expiration or termination of this Agreement. Without limiting the
generality of the foregoing, Articles 1, 6, 11, 12 and 15 and Sections 2.3,
4.4, 5.5, 5.6, 13.5, 13.6 and 13.7 of this Agreement shall survive
expiration or termination of this Agreement.
13.6 POST-TERMINATION. Unless HydroMed terminates this Agreement pursuant to
Sections 13.2(a) or 13.2(b), during a six (6) month period following the
expiry or termination hereof, Paladin may sell out its stock on hand of the
Product. In addition, if Paladin terminates this Agreement under Section
13.2(c) but the Event of Force Majeure giving rise to such termination only
reduced HydroMed's capacity to supply the Product, then for six (6) months
following such termination, HydroMed shall continue to supply Paladin with
the Product in accordance with Section 14.5. All applicable provisions of
this Agreement shall survive termination as necessary to give effect to
this Section 13.6.
13.7 OTHER CONSEQUENCES OF TERMINATION. Upon termination or expiration of this
Agreement, Paladin shall, within thirty (30) days from the date of receipt
of a request from HydroMed submit all necessary paperwork to TPD to request
assignment of the NDS and DIN to HydroMed, if any, and any other Regulatory
Approval held with respect to the Product and all Provincial Formulary
listings, provided that HydroMed shall pay to Paladin an amount
CONFIDENTIAL
28
sufficient to cover any costs incurred by Paladin in connection with
obtaining Regulatory Approval for the Product and transferring same back to
HydroMed. In addition, Paladin shall promptly assign to HydroMed any
sublicenses to the Intellectual Property granted by Paladin, and such
sublicenses shall survive in accordance with their terms.
ARTICLE 14 - FORCE MAJEURE
14.1 DEFINITION. For the purposes of this Agreement, an "Event of Force
Majeure" shall include the following:
(a) acts of God;
(b) expropriation, confiscation or requisitioning of facilities or
compliance with any Law which affects to a degree not presently
existing the supply, availability or use of materials or labour;
(c) acts or inaction on the part of any Governmental Body or Person
purporting to act therefor;
(d) embargoes, or acts of war or the public enemy, whether war be declared
or not;
(e) strikes, public disorder, insurrection, rebellion, riots or violent
demonstrations;
(f) floods, earthquakes, lightning, hail, inclement weather conditions or
other natural calamities; and
(g) any circumstances whether or not of the class or kind specifically
named above not within the reasonable control of a Party and which,
despite the exercise of reasonable diligence, such Party is unable to
prevent, avoid or remove.
14.2 PROCEDURE. If any Party wishes to invoke an Event of Force Majeure, then
it shall (i) immediately following the commencement of such Event of Force
Majeure notify the other Parties of the occurrence of such Event of Force
Majeure, the reasonably estimated date and time on which it commenced and
the nature of the Event of Force Majeure, and (ii) as soon as reasonably
practicable thereafter, submit to the other Parties proof of the Event of
Force Majeure.
14.3 SUSPENSION OF OBLIGATIONS. If one of the Parties is unable to perform its
obligations under this Agreement because of an Event of Force Majeure,
then such Party shall be excused from performance of its obligations under
this Agreement until the Event of Force Majeure terminates and the
obligations of such Party, which cannot be met due to the Event of Force
Majeure, shall be suspended during the pendency of the Event of Force
Majeure, provided that such Party uses all reasonable efforts to attempt to
prevent, avoid or remove the Event of Force Majeure within the shortest
possible delay. Nevertheless, an Event of Force Majeure has no effect on
the obligation to pay a sum of money owing for the purchase of the Product.
14.4 RESOLUTION. If either Party is excused from performance under this
Agreement because of an Event of Force Majeure, then the Parties agree to
promptly meet and to work in good faith together in an attempt to find
appropriate solutions and to shorten the duration of the Event of Force
Majeure, to the extent reasonably feasible.
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29
14.5 ALLOCATION. If an Event of Force Majeure only reduces HydroMed's capacity
to supply the Product, then HydroMed shall allocate to Paladin its pro rata
share of HydroMed's remaining output of the Product (determined by
reference to the total number of units of Product purchased by Paladin
during the preceding twelve (12) months and the total number of units of
Product sold by HydroMed to any person (including Paladin and all Third
Party's) during such twelve (12) month period).
ARTICLE 15 - MISCELLANEOUS
15.1 LIMITATIONS OF LIABILITY. EXCEPT IN RESPECT OF HYDROMED'S INDEMNIFICATION
OBLIGATIONS UNDER THIS AGREEMENT, IN NO EVENT SHALL HYDROMED'S LIABILITY TO
PALADIN FOR DAMAGES UNDER OR IN RESPECT OF THIS AGREEMENT EXCEED, IN THE
AGGREGATE, THE TOTAL AMOUNT PAID TO HYDROMED UNDER THIS AGREEMENT, WHETHER
SUCH DAMAGES ARISE IN TORT, CONTRACT OR OTHERWISE. IN ADDITION, IN NO EVENT
SHALL HYDROMED BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR
INDIRECT DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS
LIMITATION WILL APPLY EVEN IF HYDROMED HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
15.2 NOTICES. Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be delivered in person,
transmitted by telecopy or similar means of recorded electronic
communication or sent by internationally-recognized overnight courier mail,
charges prepaid, addressed as follows:
(a) if to HydroMed:
Hydro Med Sciences, Inc.
0 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx
00000-0000
Attention: President
Telephone: 000-000-0000
Fax: 000-000-0000
(b) if to Paladin:
Paladin Labs Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: President
Telephone: 000-000-0000
Fax: 000-000-0000
Any such notice or other communication shall be deemed to have been
given and received on the day on which it was delivered or
successfully transmitted (or, if such
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30
day is not a Business Day, on the next following Business Day) or, if
sent by internationally-recognized overnight courier, on the date on
which it was received or refused delivery. Either Party may change its
address for service from time to time by giving notice thereof to the
other Party in accordance with this Article.
15.3 AMENDMENTS. No amendment or waiver shall be binding on either Party unless
consented to in writing by such Party. No waiver of any provision of this
Agreement shall constitute a waiver of any other provision, nor shall any
waiver constitute a continuing waiver unless otherwise expressly provided.
15.4 DISPUTE RESOLUTION. Other than as set out in this Agreement, any breach,
controversy or claim arising out of or relating to this Agreement that
cannot be resolved following good faith discussions between the Parties
shall be forwarded to the President of each Party for review and
resolution. Any dispute the Presidents are unable to resolve within thirty
(30) Business Days shall be determined by arbitration. Arbitration shall be
carried out in accordance with the Laws of the Province of Quebec before
one (1) arbitrator. If the Parties cannot mutually agree upon an
arbitrator, each Party shall name an arbitrator and the arbitrators so
named shall agree upon a third (3rd) arbitrator. The place of arbitration
shall be New York, New York. The language of the arbitration shall be
English. The arbitration decision shall be final and binding on the
Parties. The arbitration carried out hereunder shall apply to the exclusion
of regular legal means, provided that the rights of the Parties in urgent
situations in which time is of the essence to obtain proper remedies in
courts of Law shall remain unimpaired.
15.5 ENTIRE AGREEMENT. This Agreement and the Quality Agreement constitute the
entire agreement between the Parties with respect to the subject matter
hereof and supersede all prior agreements, understandings, letters of
intent, negotiations and discussions, whether written or oral. There are no
conditions, covenants, agreements, representations, warranties or other
provisions, express or implied, collateral, statutory or otherwise,
relating to the subject matter hereof except as herein provided. This
Agreement shall not be changed or modified except in writing.
15.6 ASSIGNMENT. The rights and obligations under this Agreement may not be
assigned by either Party hereto (except to an Affiliate) without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed.
15.7 FURTHER ASSURANCES. Each Party will, from time to time subsequent to the
date hereof, at the request and expense of any other Party, execute and
deliver all such documents and do all such other acts and things as that
other Party, acting reasonably, may from time to time request be executed
or done in order to better evidence or perfect or effectuate any provision
of this Agreement or any of the respective obligations intended to be
created hereby or thereby.
15.8 PUBLICITY. Neither Party shall issue any press release or other public
announcement relating to existence or terms of this Agreement without the
prior written consent of the other Party (which consent shall not be
unreasonably withheld or delayed), except where such announcements are
required by law or regulation, in which event the Parties will use all
reasonable efforts to consult with each other and co-operate with respect
to the wording of
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any such announcement. The Parties shall cooperate in issuing (an) initial
public release (s) with respect to the signing of this Agreement, either
separately or as a joint release.
15.9 COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall constitute an original and all of which taken together shall
constitute one and the same instrument in effect as of the date first
above mentioned.
15.10 GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the Laws in effect in the Province of Quebec and the Laws
of Canada applicable therein.
15.11 LANGUAGE. The parties hereto confirm that it is their wish that this
Agreement as well as all other documents relating hereto, including
notices, have been and shall be drawn up in the English language only. Les
parties aux presentes confirment leur volonte que cette convention de meme
que tous les documents, y compris tous avis, s'y rattachant, soient
rediges en langue anglaise seulement.
(SIGNATURE PAGE FOLLOWS)
CONFIDENTIAL
IN WITNESS WHEREOF this Agreement has been executed by the Parties as of the
date first hereinabove set out.
HYDRO MED SCIENCES, INC.
Per: /s/ Xxxxx Xxxxxxx
--------------------------------
Title: President & CEO Date: 10-3-2002
PALADIN LABS INC.
Per: /s/ Xxxxxxxx Xxxxxxx
--------------------------------
Title: President & CEO Date: OCT 3/2002
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SCHEDULE 1.1(s)
TO THE LICENSE AND DISTRIBUTION AGREEMENT
BETWEEN
HYDRO MED SCIENCES, INC.
AND
PALADIN LABS INC.
CURRENT IMPLANT SPECIFICATIONS
Trade name: Hydron Implant(TM)
Active Ingredient: Histrelin acetate
Form: All dosage strengths and forms as well as all Improvements
(as defined in Section l.l(t).
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SCHEDULE 1.1(v)
TO THE LICENSE AND DISTRIBUTION AGREEMENT
BETWEEN
HYDRO MED SCIENCES, INC.
AND
PALADIN LABS INC.
CONTENTS OF KIT
The Kit shall include the following components:
- Device to insert the Implant
- Betadine Swabsticks(1)
- Alcohol Swabs(1)
- Lidocaine HCl 1% and Epinephrine(1)
- 25g x 1.5" Needles
- 18g x l" Needles
- Gauze Sponges 4"
- Elastoplast
- Adson Forcep 4.75"
- Disposable Scalpels
The following components may be included in the Kit after mutual written
agreement between the Parties:
- Steri Strip Reinforced Adhesive Skin Closures
- Poly lined towel Fenestrated Sterile Field
- Vicryl Sutures Coated
- Curved Mosquito Hemostat 5" (Floor grade stainless steel)
- Latex Gloves
(1) Canadian Sourced Items.
The Kit shall not include the Canadian Sourced Items at the time of shipment to
Paladin. Pursuant to Section 7.10, the Canadian Sourced Items will be ordered by
HydroMed from a Canadian manufacturer or wholesaler and shipped to the same
address as the ship-to address of the Purchase Order for the Product.
CONFIDENTIAL
35
SCHEDULE 1.1(oo)
TO THE LICENSE AND DISTRIBUTION AGREEMENT
BETWEEN
HYDRO MED SCIENCES, INC.
AND
PALADIN LABS INC.
PRODUCT SPECIFICATIONS
TO BE ATTACHED SUBSEQUENT TO THE EFFECTIVE DATE PURSUANT TO SECTION 1.1(oo)
KIT SPECIFICATIONS
TO BE ATTACHED SUBSEQUENT TO THE EFFECTIVE DATE PURSUANT TO SECTION 1.1(oo)
CONFIDENTIAL
36
SCHEDULE 8.8
TO THE LICENSE AND DISTRIBUTION AGREEMENT
BETWEEN
HYDRO MED SCIENCES, INC.
AND
PALADIN LABS INC.
RETURNS POLICY
ITEMS ELIGIBLE FOR RETURN
Returns are limited to outdated merchandise in original packages, whether
returned to PALADIN directly or destroyed at the pharmacy site after approval by
a PALADIN Sales Representative.
TIME LIMIT
Up to one (1) year after expiry or date of discontinuation.
CREDIT VALUE
PALADIN'S invoiced wholesale price
ITEMS NOT ELIGIBLE FOR CREDIT
1. Products damaged by fire, smoke, heat or water resulting from a fire or
other insurable hazards.
2. Products marked "Non-returnable", "Professional Sample", "Clinical Trial
Package", or with similar markings or similar labels.
3. Distress merchandise, such as items purchased from a bankruptcy sale,
going-out-business sale, fire sale, or other merchandise generally
considered under the classification "Distress Merchandise" will not qualify
for credit under the general provision of the Returns Policy.
4. Merchandise obtained via diverted or other means, including other products
outside of Canada.
5. Unexpired Products.
6. Overstocked saleable Products returned to PALADIN without prior written
authorization from HydroMed.
7. Products damaged as a result of the negligence or improper storage or
handling by PALADIN or any third party after delivery of the Product to
PALADIN.
8. Products not in its original packaging.
CONFIDENTIAL
37
SCHEDULE 9.1
TO THE LICENSE AND DISTRIBUTION AGREEMENT
BETWEEN
HYDRO MED SCIENCES, INC.
AND
PALADIN LABS INC.
QUALITY AGREEMENT
TO BE ATTACHED SUBSEQUENT TO THE EFFECTIVE DATE PURSUANT TO SECTION 9.1
CONFIDENTIAL
