[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.
EXHIBIT 10.35
SUPPLY AND DISTRIBUTION AGREEMENT
THIS SUPPLY, DISTRIBUTION AND MARKETING AGREEMENT (the "Agreement") is hereby
entered into and effective as of September 4, 2003 (the "Effective Date") by and
between Advancis Pharmaceutical Corporation ("Advancis"), a Delaware
corporation, having an address at 00000 Xxxxxx Xxxxxxx Xxxxxxx, Xxxxxxxxxx, XX
00000, and Par Pharmaceutical, Inc. ("Par"), a Delaware corporation with offices
located at Xxx Xxx Xxxxx Xxxx, Xxxxxx Xxxxxx, Xxx Xxxx 00000.
WHEREAS, Advancis is engaged in the development of pharmaceutical products and
wishes to provide Par with rights to promote, sell and distribute certain of its
products in the Territory;
WHEREAS, Par desires to market and sell certain of Advancis's products in the
Territory
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1. "ACQUISITION PRICE" means Par's actual out of pocket expense for API
and fully packaged Product as paid to Advancis or to a Third Party
manufacturer.
1.2. "ADVANCIS APPLICABLE PERCENTAGE" means [***] or the percentage set
forth in Section 6.6 in the event that Advancis reduces the Advancis
Applicable Percentage pursuant to Section 6.6.
1.3. "AFFILIATE(S)" means any Person (defined below) which directly or
indirectly controls, is controlled by, or under common control with
a Party. For purposes of the foregoing definition, the term
"control" (including with correlative meaning, the terms
"controlling", "controlled by", and "under common control with") as
used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of
voting securities, by contract, or otherwise.
1.4. "ANDA" means an Abbreviated New Drug Application filed with the FDA
with respect to Product.
1.5. "API" means the active pharmaceutical ingredient clarithromycin.
1.6. "APPLICABLE LAWS" means all applicable laws, rules, regulations and
guidelines that may apply to the development, marketing or sale of
the Product in the Territory or the
performance of either Party's obligations under this Agreement
including laws, regulations and guidelines governing the import,
export, development, marketing, distribution and sale of the
Product, to the extent applicable and relevant, and including all
current Good Manufacturing Practices or current Good Clinical
Practices or similar standards or guidelines promulgated by the FDA
and including trade association guidelines, where applicable, as
well as U.S. export control laws and the U.S. Foreign Corrupt
Practices Act.
1.7. "APPROVED MANUFACTURING CONTRACT(S)" means the manufacturing
contracts with respect to API and Product between Advancis and a
Third Party(ies) pursuant to Section 5.1 that has been approved by
Par.
1.8. "COMMERCIAL EXPENSES" means commercially reasonable costs and
expenses related solely to marketing (including promotional
activities, symposia, and the like), selling and distributing the
Product that are incurred by Par. Commercial Expenses shall not
exceed five (5) percent of Net Sales.
1.9. "COMMERCIAL LAUNCH" or "COMMERCIALLY LAUNCH" means the first
introduction in the United States of Product by Par, or a Par
Affiliate to each of a major retail chain and a major distributor
(as those terms are commonly understood in the industry) after the
FDA has approved the ANDA for the Product.
1.10."Competing Product" means any pharmaceutical product that is either
A/B rated to Biaxin(R) XL Filmtab(R) or which posses substantially
the same pharmacokinetic profile as Biaxin(R) XL Filmtab(R)
1.11."CONFIDENTIAL INFORMATION" means with respect to a Party, all
information of any kind whatsoever (including without limitation,
data, compilations, formulae, models, patent disclosures,
procedures, processes, projections, protocols, results of
experimentation and testing, specifications, strategies, techniques
and all non-public Intellectual Property Rights (defined below)),
and all tangible and intangible embodiments thereof of any kind
whatsoever (including without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records and
reports), which is disclosed by such Party to the other Party and is
marked, identified or otherwise acknowledged to be confidential at
the time of disclosure to the other Party. Notwithstanding the
foregoing, Confidential Information of a Party shall not include
2
information which the other Party can establish by written
documentation (a) to have been publicly known prior to disclosure of
such information by the disclosing Party to the other Party, (b) to
have become publicly known, without fault on the part of the other
Party, subsequent to disclosure of such information by the
disclosing Party to the other Party, (c) to have been received by
the other Party free of an obligation of confidentiality at any time
from a source, other than the disclosing Party, rightfully having
possession of and the right to disclose such information free of an
obligation of confidentiality, (d) as demonstrated by written
records, to have been otherwise known by the other Party prior to
disclosure of such information by the disclosing Party to the other
Party, or (e) to have been independently developed by employees or
agents of the other Party without the use of such information
disclosed by the disclosing Party to the other Party.
1.12."GMP" means current Good Manufacturing Practices promulgated by the
FDA.
1.13."FDA" means the United States Food and Drug Administration or any
successor agency thereto.
1.14."IMPROVEMENTS" means any and all improvements, enhancements, or
modifications of the Product, including any different dosage
strengths or delivery forms (e.g. capsules vs. tablets etc.) of the
Product.
1.15."INTELLECTUAL PROPERTY RIGHTS" means without limitation all of the
following which relates to or underlies or arises out of the
Product: (i) patent applications, continuation applications,
continuation in part applications, divisional applications, any
corresponding foreign patent applications to any of the foregoing,
and any patents that may grant or may have been granted on any of
the foregoing, including reissues, re-examinations and extensions;
(ii) all know-how, trade secrets, inventions (whether patentable or
otherwise), data, processes, techniques, procedures, compositions,
devices, methods, formulas, protocols and information, whether
patentable or not; (iii) copyrightable works, copyrights and
applications, registrations and renewals in connections with the
Product; (iv) other proprietary rights; and (v) copies and tangible
embodiments of any one or more of the foregoing.
1.16."LABEL," "LABELED" or "LABELING" means all labels and other written
printed or graphic matter upon (i) the Product or any container or
wrapper utilized with the
3
Product, or (ii) any written material accompanying the Product,
including without limitation, package inserts.
1.17."NET PROFIT" means the difference between Net Sales and Par's Total
Cost of Product.
1.18."NET SALES" means the dollar amount determined by deducting from the
gross invoiced sales price billed for the Product sold by Par, or by
an Affiliate of Par, or by a permitted sub-licensee, as the case may
be, in the Territory to Third Parties in arms length transactions,
the following: (i) all applicable sales credits accrued in
accordance with accounting principles generally accepted in the
United States, (ii) payments or rebates incurred pursuant to
federal, state and local government assistance programs, whether in
existence now or enacted at any time hereafter, (iii) costs for
transit insurance, freight, handling or other transportation, (iv)
customs duty, sales, use or excise taxes and (v) the write-off of
bad debt not to exceed one percent (1%) of Net SALES. Sales credits
accrued in accordance with accounting principles generally accepted
in the United States can include credits or discounts related to the
following: (i) customer returns, returned goods allowances including
those made as part of a recall, billing and shipping errors,
rejected goods and damaged goods (ii) cash or terms discounts (iii)
customer rebate programs (iv) chargebacks and administration fees or
similar credits or payments granted to customers pursuant to
contract or other purchases (v) sales promotions, trade show
discounts and stocking allowances and (vi) price adjustments,
including those on customer inventories following price changes.
1.19."PACKAGING" means all primary containers, including bottles, cartons,
shipping cases or any other like matter used in packaging or
accompanying the Product.
1.20."PAR AGREEMENTS" means any and all agreements between Par and a Third
Party with respect to manufacture, sale, distribution and marketing
of Product. The Par Agreements include the Approved Manufacturing
Agreements assigned to Par.
1.21."PAR APPLICABLE PERCENTAGE" means 100% minus the Advancis Applicable
Percentage.
1.22."PERSON" means an individual, corporation, partnership, limited
liability company, firm, association, joint venture, estate, trust,
governmental or administrative body or agency, or any other entity.
4
1.23."PRODUCT" means clarithromycin extended-release 500 mg tablets which
are A/B rated to Biaxin(R) XL Filmtab(R).
1.24."REGULATORY APPROVALS" shall mean any approvals, product and/or
establishment licenses, registrations or authorizations, including
without limitation approvals under ANDAs which are necessary for the
commercial manufacture, use, storage, importation, transport,
promotion, pricing or sale of the Product in the Territory.
1.25."TERRITORY" means Canada and the United States its territories,
possessions and the Commonwealth of Puerto Rico.
1.26."THIRD PARTY(IES)" means a person other than a Party or its
Affiliate.
1.27."TOTAL COST" means the sum of Commercial Expenses and Acquisition
Price for the Product.
1.28."TRADEMARK" means any and all trademarks, trademark applications and
trademark registrations with respect to Product in the Territory.
ARTICLE 2. DEVELOPMENT
2.1. GENERAL DEVELOPMENT RESPONSIBILITIES. Subject to Advancis' rights
and obligations under this Agreement, Advancis shall have the sole
control and responsibility for developing the Product, except that
Par shall have sole control of and responsibility for preparing any
patent certifications and related notice letters in connection with
the ANDA for the Product. Advancis responsibilities shall include,
without limitation, the following:
2.1.1.Developing a formulation for the Product A/B rated by the FDA
to Biaxin(R) XL clarithromycin extended release tablets.
2.1.2.Advancis shall keep Par reasonably informed of the progress of
the development of the Product.
2.1.3.Conducting, without limitation, all necessary testing,
analytical studies, and human bioequivalence studies necessary
to support an ANDA for the Product.
2.2. COMPLIANCE. Advancis shall comply with, and shall require compliance
with by its Third Party contractors, all Applicable Laws in the
conduct of all activities associated with the development of the
Product.
2.3. DEVELOPMENT EXPENSES. Advancis shall be responsible for all costs
and expenses associated with the development of the Product,
including, without limitation, internal
5
and third party costs and expenses related to materials (e.g. API),
facilities, personnel, analytical testing (e.g., outside laboratory
expenses) and human bioequivalence studies (e.g., pilot and pivotal
biostudies).
ARTICLE 3. REGULATORY APPROVAL
3.1. INITIAL ANDA OWNERSHIP. Until such time as the ANDA is transferred
to Par pursuant to Section 6.5, the ANDA for the Product shall be
owned exclusively by Advancis.
3.2. PROSECUTION. Advancis shall use commercially reasonable efforts to
perform a first pivotal biostudy with respect to the bioequivalency
of the existing formulation of Product with respect to Biaxin(R)
XL Filmtab(R), and if successful to thereafter use commercially
reasonable efforts to prepare, file, and prosecute the ANDA for the
Product.
3.3. EXPENSES. Advancis shall have sole responsibility for all expenses
associated with preparing, filing and prosecuting the ANDA for the
Product.
3.4. PROGRESS UPDATES. Advancis shall keep Par informed of the progress
of the prosecution of the ANDA for the Product, including providing
Par with good faith projections of the approximate time at which
approval of the ANDA may be expected and providing Par with notice
of any negative communications from the FDA which could affect
approval timing.
3.5. COOPERATION. Each Party agrees to provide the other Party with all
information in its possession or control that is necessary for the
other Party to comply with any applicable reporting requirements.
Par shall use commercially reasonable efforts to make its regulatory
personnel available to consult with Advancis regarding the
prosecution of the ANDA for the Product.
3.6. In the event that a first pivotal biostudy of the existing
formulation of Product fails to demonstrate that such formulation is
bioequivalent to Biaxin(R) Filmtab(R), then the parties shall
negotiate in good faith an amendment to the terms and conditions of
this Agreement with respect to further development of Product and
the financial terms thereof and if the parties fail to reach
agreement as to such an amendment within sixty (60) days after
Advancis provides to Par the final report of the results of such
study furnished by the contract research organization that conducted
the study, then this Agreement shall terminate.
6
ARTICLE 4. COMMERCIALIZATION
4.1. LICENSE GRANT. Advancis hereby grants to Par an exclusive license
under its rights in and to the Regulatory Approvals for the Product
and under its Intellectual Property rights associated with the
Product, to import, market, use, manufacture, have manufactured,
promote, distribute and sell the Product in the Territory. The
foregoing license shall include the right for Par to appoint
sub-contractors to market, distribute and sell the Product within
the Territory. The license granted under this Section 4.1 is subject
to a license retained by Advancis to develop Product pursuant to
this Agreement.
4.2. MARKETING AND DISTRIBUTION OBLIGATIONS.
4.2.1.The Parties agree to work together in good faith to develop a
marketing and/or branding strategy for the Product. Ultimate
responsibility and decision making control with regard to
marketing and pricing of the Product shall belong solely to
Par.
4.2.2.Subject to Section 15.12, Par agrees to use commercially
reasonable efforts to market, promote, distribute and sell the
Product in the Territory consistent with Par's efforts in
regard to its other premier generic or branded products, as
applicable. Par agrees to comply and shall require all of its
Third Party contractors to comply with all Applicable Laws in
the conduct of activities with respect to marketing, promotion
distribution and sale of Product in the Territory.
4.2.3.Par will not use the Product as a loss leader or bundle the
Product in any fashion which decreases the revenue directly
attributable to the Product.
4.3. COMMERCIAL LAUNCH. Par's management, and its board of directors,
shall have the ultimate decision-making authority with respect to
the scale and timing of the Commercial Launch of the Product.
(a) Subject to Section 4.3(b), Par agrees to Commercially Launch the
Product before the later of June 1, 2005 or six (6) months after
Regulatory Approval.
(b) Par's obligations to Commercially Launch the Product shall be
suspended during the existence of any one or more of the following:
(i) Par is engaged in litigation with respect to
Intellectual Property Rights of a Third Party that
concern Product or Par is in good faith negotiations
with a
7
Third Party to obtain a license to Intellectual Property
Rights that affect the ability to market Product; or
(ii) there is a court order that, in the United States,
Product infringes a valid claim of a patent of a Third
Party or Advancis is prohibited from marketing the
product by any judgment, order, injunction, decree or
award of any court, administrative agency, or arbitrator
or government body; or
(iii) Subject to 4.3(c), Par is acting in a commercially
reasonable fashion in consideration of reasonable
threats of patent infringement. Par agrees to keep
Advancis informed regarding such potential patent
issues.
(c) In the event that Par has not yet launched the product pursuant
to Section 4.3(b)(iii) above and Advancis desires to nevertheless
launch the Product Advancis will so notify Par. Following such
notice, Advancis may if it so chooses seek in good faith an opinion
of counsel, which counsel is reasonably acceptable to Par, that such
patents that Par is considering pursuant to Section 4.3(b)(iii) are
not infringed and/or invalid and/or unenforceable. If Advancis
receives such an opinion, Advancis will notify Par and provide a
copy of the opinion to Par for its review. If after 45 days ("Par's
review period") Par has not notified Advancis that it intends to
launch the Product and otherwise comply with the requirements of
this Section 4.3 Advancis shall have the right to seek to have a
Third Party launch and market the Product or launch and market the
Product itself and this Agreement shall automatically terminate as
of either (1) the date that Advancis has entered into such an
agreement with the Third Party or (2) the date that Advancis
launches the Product. With respect to the foregoing item (2), Par
hereby agrees that following Par's forty-five (45) day review period
Advancis shall be free to enter into such arrangements as necessary
to launch and market the Product on its own in reliance upon the
ultimate termination of this Agreement and to the extent required
Par grants a license under its rights under this Agreement in order
to implement such launch.
(d) In the event that this Agreement is terminated under Section
4.3(c), Advancis agrees to refund to Par any amounts paid to
Advancis under Section 6.2 of this Agreement. Advancis agrees to
make such payments at the rate of 50% of its revenue in connection
with the Product.
8
4.4. COMPETITIVE ACTIVITIES. Subject to Section 4.3(c), during the term
of this Agreement, Advancis shall not develop, make, have made,
sell, offer for sale, distribute or otherwise make available (nor
contract with a third Party to do any of the foregoing) the Product
or any Competing Product to any Person in the Territory other than
Par. During the term of this Agreement Par shall not market,
promote, sell, offer for sale, distribute or otherwise make
available (nor contract with a third Party to do any of the
foregoing) the Product or any Competing Product, except as supplied
to Par by Advancis or a mutually agreed third party manufacturer, to
any Person in the Territory.
4.5. RECALL. In the event that either Party believes it may be necessary
to conduct a recall, field correction, market withdrawal, stock
recovery, or other similar action with respect to any Product sold
under this Agreement (a "Recall"), Advancis and Par shall promptly
consult with each other as to how best to proceed, it being
understood and agreed that the final decision as to any Recall of
any Product shall be made by Par; provided however, that neither Par
nor Advancis shall be prohibited hereunder from taking any action
that it is required to take by Applicable Law. The cost of any
Recall of Product shall be paid for by the Parties in accordance
with the Par Applicable Percentage and the Advancis Applicable
Percentage. Any Recall required because of a negligent or illegal
act or omission in the handling, storage or distribution of Product
by Par shall be at Par's sole expense.
ARTICLE 5. SUPPLY AND PURCHASE
5.1. Advancis agrees to enter into a contract with one or more Third
Parties to manufacture API and to produce Product containing API.
Advancis shall not sign any such contract(s) until Par in writing
approves the terms and conditions thereof, which approval shall not
be withheld or delayed unreasonably.
5.2. Until assignment of the Approved Manufacturing Contract, Advancis
agrees to supply Product to Par and Par agrees to order, accept and
pay for Product and API in accordance with the terms and conditions
of the Approved Manufacturing Contracts.
5.3. The only warranties with respect to API and Product shall be those
provided by the Third Party manufacturer in the Approved
Manufacturing Contracts and Advancis shall have no liability with
respect to any breach of any such warranties. At the request of Par,
to the extent that there is any breach of any warranty under an
Approved
9
Manufacturing Contract that has not been assigned to Par, Advancis
shall bring an action to enforce such warranties and each Party
shall bear the cost and expense thereof in accordance with its
Applicable Percentage.
5.4. PRODUCT REPRESENTATIONS AND WARRANTIES.
5.4.1.Par warrants that it will use reasonable commercial efforts to
market, promote and sell the Product and will comply with all
Applicable Laws in the conduct of activities with respect to
handling, storage, distribution, marketing, promoting and
selling of Product.
5.5. ADVANCIS shall have no liability to Par with respect to manufacture
and supply of Product and the only remedies available to Par with
respect to any API or Product supplied under an Approved
Manufacturing Contract are those available thereunder.
ARTICLE 6. FINANCIAL PROVISIONS
6.1. PRODUCT SUPPLY PRICE. To the extent that Advancis supplies Product
to Par under the Approved Manufacturing Contracts, Par shall pay for
Product and API under the terms and conditions of the Approved
Manufacturing Contracts.
6.2. MILESTONE PAYMENTS. Provided that executed Approved Manufacturing
Contracts are in place for the supply of API and for the
manufacturing and supply of finished Product, Par shall make the
following milestone payments to Advancis which may in the aggregate
amount to up to Six Million U.S. dollars ($6,000,000):
6.2.1.Upon demonstration by Advancis that the Product meets the
FDA's statistical criteria for bioequivalence to Biaxin(R) XL
clarithromycin extended release tablets Par shall pay to
Advancis [***].
6.2.2.Upon the later of January 7, 2004 or the receipt of written
notice from the FDA that the ANDA for the Product has been
accepted, Par shall pay to Advancis [***].
6.2.3.Upon Commercial Launch of the Product by Par, Par shall pay to
Advancis [***].
6.2.4.If after one hundred and eighty (180) days following
Commercial Launch of the Product by Par there is no more than
one other ANDA (in addition to the Advancis/Par ANDA) approved
for a product bioequivalent to Biaxin(R) XL
10
clarithromycin extended release tablets, Par shall pay to
Advancis [***].
In the event that executed Approved Manufacturing Agreements for both API and
finished and packaged Product are not in place for the supply of API and for the
manufacturing and supply of Product at the time of achieving the foregoing
milestones, such Milestone Payments shall only become due and payable upon the
execution of such agreements for the supply of clarithromycin API and for the
manufacturing and supply of finished Product to Par.
6.3. NET PROFITS. Net profits shall be determined on a calendar quarter
by calendar quarter basis. Par shall pay to Advancis the Advancis
Applicable Percentage of Net Profits for a calendar quarter within
thirty (30) days of the end of each calendar quarter in which sales
of Product have been made by Par. Each Net Profit payment shall be
accompanied by a copy of a calculation of the amount due and
payable, including a statement as to Net Sales, Acquisition Price
and Commercial Expenses.
6.4. RECORDS AND AUDITS. Advancis shall have the right once each calendar
year, at its own expense, for any period during which Product is
sold by Par hereunder and for one (1) year thereafter, to have an
independent public accountant, reasonably acceptable to Par, audit
the relevant financial books and records of account of Par at normal
business hours, upon reasonable demand, to determine or verify the
amounts due and payable to Advancis hereunder. If errors of five
percent (5%) or more in Advancis's favor are discovered as a result
of such audit, Par shall reimburse Advancis for the expense of such
audit and pay the deficiency with interest immediately at the prime
rate set forth in the Wall Street Journal, Eastern Edition plus two
percent (2%). As a condition to such examination, the independent
public accountant selected by Advancis shall execute a written
agreement, reasonably satisfactory in form and substance to Par, to
maintain in confidence all information obtained during the course of
any such examination except for disclosure to Advancis as necessary
for the above purpose.
6.5. Six months after Commercial Launch of Product in the United States,
Advancis agrees to assign to Par the Regulatory Approvals and the
Approved Manufacturing Contracts in each case for no additional
consideration.
6.6. (a) At any time up until three (3) months after Commercial
Launch, by written notice from Advancis to Par, Advancis shall have
the right to reduce the
11
Advancis Applicable Percentage to [***], at which time, if not
previously assigned, Advancis shall assign to Par the Regulatory
Approvals and the Approved Manufacturing Contracts.
(b) In the event that Advancis reduces or has reduced the
Advancis Applicable Percentage under Section 6.6(a) and there is an
accusation and/or court action that Product sold by Par infringes a
patent of a Third Party and as a result of an unappealed or
unappealable court decision or as a result of a settlement or
compromise, Par is able to continue sale of Product in the United
States, then Par shall pay to Advancis in addition to any other
amounts paid or to be paid hereunder an amount equal to [***]
of Net Profits of Product sold after the date of such reduction and
prior to the date of such decision, settlement or compromise, and
thereafter the Advancis Applicable Percentage shall be [***].
ARTICLE 7. COMMERCIALIZATION COMMITTEE
7.1. ESTABLISHMENT OF THE COMMERCIALIZATION COMMITTEE. Promptly after the
Effective Date, the Parties will form a committee (the
"Commercialization Committee") to be comprised of two (2)
representatives of each of Advancis and Par. Each Party shall have
the right from time to time to substitute new members, on a
permanent or temporary basis, for any of its previously designated
members of the Commercialization Committee. Each Party shall bear
its own costs associated with participation in the Commercialization
Committee.
7.2. PURPOSE AND RESPONSIBILITIES OF THE COMMERCIALIZATION COMMITTEE. The
Commercialization Committee shall oversee the commercialization of
the Product, including (i) the timelines for and occurrence of
milestones, general timelines for commercial launch, following
launch to monitor marketing and sales of Product, and such other
matters as are provided to the Commercialization Committee by mutual
agreement of the Parties. The Commercialization Committee shall not
have any authority to impose financial, cost or other obligations on
either party in excess of those expressly set forth in this
Agreement unless expressly consented to in writing by such party.
7.3. COMMERCIALIZATION COMMITTEE MEETINGS. During the term of this
Agreement, the Commercialization Committee shall meet at least once
each calendar quarter or at such
12
other frequency as the Commercialization Committee agrees. The
Parties shall meet on a date and time and at a location agreed to by
the Commercialization Committee. Upon written notice by either Party
to the other that a meeting is required or requested, a meeting will
be held within thirty (30) calendar days of such notice on a date
and time and at a location to be agreed upon by the Parties, or
sooner if warranted by the circumstances. Notice requesting such a
meeting shall include adequate information describing the activity
to be reviewed. Any meetings of the Commercialization Committee may
be held in person at a location to be agreed to by the Parties, or
by videoconference or teleconference. A reasonable number of
additional representatives of either Party including outside
consultants and independent contractors, subject to the other
party's reasonable consent) may attend meetings of the
Commercialization Committee in a non-voting capacity. At least one
week prior to any meeting of the Commercialization Committee, each
Party shall provide the other with a a proposed agenda of the
matters to be discussed at such meeting. Within (30) days after each
meeting, the Commercialization Committee chairperson will provide
the Parties with a written report describing, in reasonable detail,
the status of the Product including pricing and marketing data, a
summary of the results and progress to date, the issues requiring
resolution and the agreed resolution of previously reported issues.
ARTICLE 8. INTELLECTUAL PROPERTY
8.1. GENERAL OWNERSHIP. Par understands and agrees that as between the
Parties, ownership of all intellectual property shall be determined
in accordance with U.S. patent law.
8.2. THIRD PARTY INFRINGEMENT. To the extent that any Third Party asserts
patent infringement against Par and/or Advancis or any of their
Affiliates in connection with this Agreement or the Product, Par
shall have sole control in addressing such assertions and in
managing and conducting any related litigation using counsel of its
choice. Par agrees to keep Advancis and its nominated legal counsel
informed with respect to the progress of such claims and to disclose
to Advancis' counsel all papers filed or served in the action and
all material decisions issued by the courts in such matters.
Following the execution of a mutually agreeable joint privilege
agreement, Advancis, and its nominated counsel in furtherance of the
mutual defense shall be allowed full access to Par's designated
legal counsel in connection with the defense and shall be allowed to
13
participate in the development of the litigation strategy. The
counsel nominated by Par shall represent both Par and Advancis where
both Par and Advancis are parties to the suit. Neither Party shall
agree to any settlement of any disputes with a Third Party that
pertain to the Product without the express written consent of the
other Party, which consent shall not be unreasonably withheld.
Advancis and Par shall share equally in all expenses, costs, and
fees associated with all of the foregoing set forth in this Section
8.2, except that Par shall be responsible for one hundred percent
(100%) thereof in the event that Advancis reduces the Advancis
Applicable Percentage under Section 6.6.
8.3. Advancis and Par agree to cooperate with each other with regard to
assessing, avoiding and defending against threats of infringement of
Third Party Intellectual Property Rights; provided however, that
Advancis shall have no obligation to re-formulate the Product. In
this respect the parties agree to enter into a joint defense
agreement with respect to infringement, if any, of Third Party
Intellectual Property Rights. Without limiting the foregoing, Par
agrees to make available to Advancis the evaluation of Intellectual
Property Rights of Third Parties made by Par and its counsel with
respect to Product within three (3) months of filing an ANDA; and
upon approval of an ANDA; and within thirty (30) days of Commercial
Launch.
ARTICLE 9. CONFIDENTIALITY AND PUBLIC DISCLOSURE
9.1. During the term of this Agreement and for a period of five (5) years
thereafter, a Party shall not disclose to any Third Party any
Confidential Information received by it hereunder from the other
Party or use any such Confidential Information for its own benefit.
Each Party agrees to protect Confidential Information received from
the other Party at least as well as it would its own proprietary and
confidential information
9.2. To the extent it is reasonably necessary or appropriate to fulfill
its obligations or exercise its rights under this Agreement, a Party
may disclose the other Party's Confidential Information to its
Affiliates, consultants, outside contractors, collaborators and
clinical investigators on a need-to-know basis on condition that
such entities or persons agree to keep Confidential Information
confidential for the same time periods and to the same extent as
required by this Agreement.
9.2.1.The obligation of a Party not to disclose Confidential
Information of the other Party shall not apply to any part of
such Confidential Information that is disclosed
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by a Party pursuant to an order or demand issued by a court or
governmental agency or pursuant to a legal proceeding or as
otherwise required by law; provided, however that such Party
notifies the other Party prior to disclosure, giving the other
Party sufficient advance notice to permit it to seek a
protective order or other similar order with respect to such
Confidential Information and provided further that such Party
furnishes only that portion of the other Party's Confidential
Information which it is advised by counsel is legally
required.
9.3. Each Party shall bind all persons having access through it to any
Confidential Information to take no steps inconsistent with or
preventing such Party from carrying out the terms of this Agreement.
Each Party hereby represents to the other that the receiving Party
will be responsible for the acts of any officer and/or employee
receiving the Confidential Information.
9.4. Upon termination of this Agreement, each Party, at the request of
the other, shall return all Confidential Information disclosed to it
hereunder, in whatever form contained, including all notes or
memoranda made by its employees, agents, or representatives obtained
or derived from any such Confidential Information, including any
listing which identifies the documents which were provided.
9.5. Neither party shall disclose the terms or conditions of this
Agreement that have not been previously disclosed to the public or
make any public announcement concerning this Agreement without the
consent of the other party, which shall not be unreasonably
withheld, except such consent shall not be required (i) where such
disclosure is required in accordance with any applicable law, rule
or regulation (including, without limitation, disclosure
requirements of the U.S. Securities and Exchange Commission, NASDAQ
or any other stock exchange on which securities are traded), (ii) in
connection with an equity investment, loan, financing or similar
transaction provided that such disclosure is subject to an
obligation of confidentiality except in the case where after
reasonable efforts the disclosing party can not obtain such an
obligation of confidentiality , (iii) in connection with a
consolidation, merger, change in control or sale of all or a portion
of the business of a Party or similar transaction subject to an
obligation of confidentiality by the receiving party , (iv) in
connection with an order of a court or government agency, (v) where
such disclosure is made to attorneys, accountants and other advisors
to
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a party subject to an obligation of confidentiality . In the event
of a required public announcement, to the extent practicable under
the circumstances, the party making such announcement shall provide
the other party with a copy of the proposed text prior to such
announcement sufficiently in advance of the scheduled release of
such announcement to afford such other party a reasonable
opportunity to review and comment upon the proposed text.
9.6. The Parties understand and agree that each will be required to make
a public disclosure regarding this Agreement as a matter of
compliance with the United States laws and regulations of the
Securities Exchange commission ("SEC") regarding securities. Without
limiting either party's obligations under the securities laws and
regulations, the parties agree to work together in good faith to
make mutually acceptable public announcements of this Agreement at
mutually acceptable times. Additionally, if a party is required to
file a copy of this Agreement with any of its SEC filings, it agrees
to seek confidential treatment for the Agreement, and to work
together with the other party in good faith in seeking such
confidential treatment.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
10.1.Advancis here hereby represents and warrants that as of the Effective
Date:
10.1.1. Advancis is a company duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
formation;
10.1.2. Advancis has the power and authority to enter into and be
bound by the terms and conditions of this Agreement and to
perform its obligations hereunder;
10.1.3. Advancis has taken all necessary action on its part to
authorize the execution and delivery of this Agreement and
this Agreement has been duly executed and delivered on behalf
of Advancis and constitutes a legal, valid, binding
obligation, enforceable against Advancis in accordance with
its terms; and,
10.1.4. Advancis is subject to no legal, contractual or other
restrictions, limitations or conditions which conflict with
its rights and obligations under this Agreement or which might
affect adversely its ability to perform hereunder.
10.2.Par here hereby represents and warrants that as of the Effective
Date:
10.2.1. Par is a company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
formation;
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10.2.2. Par has the power and authority to enter into and be bound by the
terms and conditions of this Agreement and to perform its
obligations hereunder;
10.2.3. Par has taken all necessary action on its part to authorize the
execution and delivery of this Agreement and this Agreement has been
duly executed and delivered on behalf of Par and constitutes a
legal, valid, binding obligation, enforceable against Par in
accordance with its terms; and,
10.2.4. Par is subject to no legal, contractual or other restrictions,
limitations or conditions which conflict with its rights and
obligations under this Agreement or which might affect adversely its
ability to perform hereunder.
10.3. Advancis represents and warrants that it has not failed to disclose
to Par granted United States patents that as of the Effective Date
to the knowledge of Advancis should be considered by Par with
respect to the potential infringement risks, if any, as to the
Product that is being developed by Advancis as of the Effective
Date. Appendix A is a list of patents disclosed to Par.
10.4. NEITHER PARTY MAKES ANY OTHER REPRESENTATION OR WARRANTY HEREUNDER
AND DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING,
BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE
OR WITH RESPECT TO THE VALIDITY, ENFORCEABILITY, OR PATENTABILITY OF
ANY PATENTS OR THAT PRODUCTS WILL NOT INFRINGE PATENT RIGHTS OF A
THIRD PARTY OR THAT AN ANDA WILL APPROVED.
ARTICLE 11. INDEMNIFICATION
11.1 Par shall defend, indemnify and hold Advancis and its directors,
officers, employees, shareholders and agents, harmless from and against any and
all Third Party claims, suits or demands for liabilities, damages, losses, costs
and expenses (including the reasonable fees of attorneys and other
professionals) arising out of or resulting from Product that was manufactured
and/or distributed and/or marketed and/or sold by or on behalf of Par or by any
of its Affiliates, distributors, co-marketers or sublicensees, each a "Par
Indemnified Loss" except for a Par Indemnified Loss which arises solely out of
the intentional misconduct of Advancis.
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The foregoing notwithstanding, the indemnity under this Section 11.1 is limited
to [***] of Par Indemnified Loss, except that such limitation shall not apply,
and Par shall be responsible for [***] of each Par Indemified loss where (i)
Advancis has reduced the Advancis Applicable Percentage under Section 6.6(a)
and/or (ii) the Par Indemnified Loss results from the intentional misconduct of
Par and/or the negligence of Par and/or (iii) the Par Indemnified Loss results
from a failure by Par to comply with Applicable Laws.
11.2 Advancis shall indemnify and hold Par and its directors, officers,
employees, shareholders and agents, harmless from and against any and all Third
Party claims, suits or demands for liabilities, damages, losses, costs and
expenses (including the reasonable fees of attorneys and other professionals)
resulting from development activities with respect to Product prior to
Commercial Launch performed by or on behalf of Advancis, each an "Advancis
Indemnified Loss," except for an Advancis Indemnified Loss which solely arises
out of the intentional misconduct of Par. The Indemnity under this Section 11.2
is limited to the Advancis Applicable Percentage of Advancis Indemnified Loss.
11.3 A Party or any of its Affiliates or their respective directors,
officers, employees or agents (the "Indemnitee") that intends to claim
indemnification under this Article 11 shall promptly notify the other Party (the
"Indemnitor") of any claim or action in respect of which the Indemnitee intends
to claim such indemnification, and the Indemnitor shall assume the defense
thereof with counsel mutually satisfactory to the Parties; provided, however,
that an Indemnitee shall have the right to retain its own counsel, with the fees
and expenses to be paid by the Indemnitor, if representation of such Indemnitee
by the counsel retained by the Indemnitor would be inappropriate due to actual
or potential conflicting interests between such Indemnitee
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and any other Party represented by such counsel in such proceedings. The
indemnity agreement in this Article 11 shall not apply to amounts paid in
settlement of any claim or action if such settlement is effected without the
prior consent of the Indemnitor, which consent shall not be withheld or delayed
unreasonably. The failure to deliver notice to the Indemnitor within a
reasonable time after the commencement of any such claim or action, if
materially prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article 11 with respect
to such action. The Indemnitee under this Article 11, its employees and agents,
shall cooperate fully with the Indemnitor and its legal representatives in the
investigation and defense of any claim or action covered by this
indemnification. The Indemnitee shall not settle any such claim or action
without the consent of the Indemnitor .
11.4 The indemnity of Section 11.1 does not apply to a Par Indemnified
Loss arising out of infringement of a patent of a Third Party, and any such Par
Indemnified Loss is covered by Section 8.2, except that in the event that
Advancis reduces or has reduced the Advancis Applicable Percentage under Section
6.6 (a), then the indemnity of Section 11.1 shall extend to each Par Indemnified
Loss arising out of patent infringement and Par shall be responsible for one
hundred percent (100%) of each such Par Indemnified Loss
ARTICLE 12. LIMITATION OF LIABILITY
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXCEPT WITH RESPECT
TO THIRD PARTY CLAIMS PURSUANT TO THE INDEMNIFICATION OBLIGATIONS SET FORTH IN
THIS AGREEMENT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES OR LOSS OF OPPORTUNITY OR USE OF
ANY
19
KIND SUFFERED BY THE OTHER PARTY, WHETHER IN CONTRACT, TORT OR OTHERWISE.
ARTICLE 13. TERM AND TERMINATION
13.1. TERM. Unless earlier terminated pursuant to this Article 13, this
Agreement shall continue in force and effect from the Effective Date for
so long as Par continues to market Product.
13.2. TERMINATION FOR BREACH. Either Party may terminate this Agreement upon
written notice to the other Party at any time during the term of this
Agreement if the other Party is in breach of any material term of this
Agreement and has not cured such breach within thirty (30) days after
notice requesting cure of the breach.
13.3. TERMINATION BY PAR. If at any time Par determines in good faith that it
does not want to launch the Product or no longer wishes to sell the
Product. Par may terminate this Agreement upon ninety (90) days prior
written notice to Advancis.
13.4. SURVIVAL. Sections 13.4, 13.5 and 13.6 and Articles 1, 9, 11, 12 and 15
shall survive any expiration or termination of this Agreement. In
addition, unless otherwise expressly set forth herein, no expiration or
termination of this Agreement shall have any affect on any payment,
obligation, representation or warranty under this Agreement accruing or
arising prior to such expiration or termination.
13.5. Upon any termination of this Agreement, Par shall assign to Advancis all
right, title and interest in and to all Regulatory Approvals, the Approved
Manufacturing Contracts, the Par Agreements, the Trademark, and
Intellectual Property Rights of Par, provided however that to the extent
that such Intellectual Property Rights of Par pertain to products other
than Product, instead of assigning such Intellectual Property Rights of
Par, Par agrees to grant and hereby grants to Advancis in the Territory an
exclusive license with the right to sublicense under such Intellectual
Property Rights of Par to make, have made, use, sell, offer to sell and
import Product.
13.6. Upon termination of this Agreement, Par shall terminate marketing and sale
of Product.
ARTICLE 14. INSURANCE
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Each party shall obtain and maintain at all times during the term of this
Agreement, prudent comprehensive general liability coverage appropriate to its
activities with reputable and financially secure insurance carriers to cover its
activities related to this Agreement. Additionally such insurance coverage shall
include, without limitation, product liability coverage in an amount of no less
than Ten Million dollars per occurrence to be in place prior to the Commercial
Launch and for so long as Product is being sold pursuant to this Agreement.
ARTICLE 15. MISCELLANEOUS
15.1. INTERPRETATION. Unless the context of this Agreement otherwise requires,
(i) the terms "include," "includes," or "including" shall be deemed to be
followed by the words "without limitation" unless otherwise indicated;
(ii) words using the singular or plural number also include the other;
(ii) the terms "hereof," "herein," "hereby," and derivative or similar
words refer to this entire Agreement; (iii) the terms "Article," "Section"
and "Exhibit" refer to the specified Article, Section and Exhibit of this
Agreement, and (iv) words of any gender include each other gender .
Whenever this Agreement refers to a number of days, unless otherwise
specified, such number shall refer to calendar days. The headings in this
Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
15.2. INDEPENDENT CONTRACTOR STATUS. . It is understood and agreed that the
Parties hereto are independent contractors and are engaged in the
operation of their own respective businesses, and neither Party hereto is
to be considered the agent of the other Party for any purpose whatsoever,
and neither Party shall have any authority to enter into any contracts or
assume any obligations for the other Party nor make any warranties or
representations on behalf of that other Party.
15.3. WAIVER. The waiver by either Party of a breach of any provisions contained
herein shall be in writing and shall in no way be construed as a waiver of
any succeeding breach of such provision or the waiver of the provision
itself.
15.4. ASSIGNMENT. This Agreement may not be assigned by either Party without the
prior consent of the other Party; provided, however, without consent
either Party may assign this Agreement (a) to any entity which acquires
substantially all of its assets or business or (b) in connection with a
merger, consolidation or similar transaction.
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15.5. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
Parties regarding the subject matter hereof and supersedes all prior
agreements, understandings and negotiations regarding the same. This
Agreement may not be changed, modified, amended or supplemented except by
a written instrument signed by both Parties. Furthermore, it is the
intention of the Parties that this Agreement be controlling over
additional or different terms of any order, confirmation, invoice or
similar document, even if accepted in writing by both Parties, and that
waivers and amendments shall be effective only if made by non-pre-printed
agreements clearly understood by both Parties to be an amendment or
waiver.
15.6. SEVERABILITY. If any provision of this Agreement shall be held illegal or
unenforceable, that provision shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain in
full force and effect and enforceable.
15.7. FURTHER ASSURANCES. Each Party hereto agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of
this Agreement.
15.8. USE OF PARTY'S NAME. No right, express or implied, is granted by this
Agreement to either Party to use in any manner the name of the other or
any other trade name or trademark of the other in connection with the
performance of this Agreement
15.9. NOTICE AND REPORTS. All notices, consents or approvals required by this
Agreement shall be in writing sent by certified or registered air mail,
postage prepaid or by facsimile or cable (confirmed by such certified or
registered mail) to the Parties at the following addresses or such other
addresses as may be designated in writing by the respective Parties:
TO ADVANCIS:
00000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attn: CEO
TO PAR:
Xxx Xxx Xxxxx Xxxx
00
Xxxxxx Xxxxxx, Xxx Xxxx 00000
Attn: CEO
Notices shall be deemed effective on the date of mailing.
15.10. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Delaware without regard to the
conflicts of laws provisions thereof. The exclusive jurisdiction and
venue of any action with respect to this Agreement shall be the
state and federal courts of Delaware.
15.11. CAPTIONS. Paragraph captions are inserted for convenience only and
in no way are to construed to define, limit or affect the
construction or interpretation hereof.
15.12. FORCE MAJEURE. A Party shall not be liable for nonperformance or
delay in performance [(other than of obligations regarding payment
of money or confidentiality)] caused by any event reasonably beyond
the control of such Party including, but not limited to wars,
hostilities, revolutions, riots, civil commotion, national
emergency, strikes, lockouts, unavailability of supplies, epidemics,
fire, flood, earthquake, force of nature, explosion, embargo, or any
other Act of God, or any law, proclamation, regulation, ordinance,
or other act or order of any court, government or governmental
agency.
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IN WITNESS WHEREOF, the Parties hereto have executed this Supply and
Distribution Agreement to be effective as of the Effective Date.
ADVANCIS PHARMACEUTICAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Title: President & CEO
----------------------------
PAR PHARMACEUTICAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Title: President & CEO
----------------------------
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