EXHIBIT 10.8
KEFLEX PRODUCTS TRANSITION AGREEMENT
This KEFLEX PRODUCTS TRANSITION
AGREEMENT (this “ Agreement ”) is made as of
November 7, 2007 between KEF PHARMACEUTICALS, INC., a
Delaware corporation (“ Kef ”) and
MIDDLEBROOK PHARMACEUTICALS, INC. , a Delaware corporation
(“ MiddleBrook ”).
Background Statement
Kef and MiddleBrook are parties to an
Asset Purchase Agreement, dated as of the date of this Agreement
(the “ Purchase Agreement ”), and the Related
Agreements (as defined in the Purchase Agreement), pursuant to
which Kef will acquire from MiddleBrook assets relating to certain
Cephalexin antibiotic products marketed under the name KEFLEX.
Pursuant to a separate Consignment Agreement, dated as of the date
of this Agreement (the “ Consignment Agreement
”), MiddleBrook will hold on consignment Kef’s entire
inventory of finished Keflex Products and sell such Keflex Products
in the ordinary course of MiddleBrook’s business. Some of the
Keflex Products to be held and sold by MiddleBrook pursuant to the
Consignment Agreement will be manufactured for MiddleBrook pursuant
to a Manufacturing Agreement between MiddleBrook and Ceph
International Corp. (“Ceph”), amended September 5,
2005. Upon the termination of the Consignment Agreement, it will be
necessary for Kef to thereafter manufacture, distribute and sell
the Keflex Products. This Agreement sets forth the agreement of the
parties regarding the transition of the manufacture, distribution
and sale of Keflex Products from MiddleBrook to Kef in the event of
such termination.
Statement of Agreement
1. Definitions .
(a) Terms defined in the
Purchase Agreement shall have the same meaning when used
herein.
(b) The following terms shall
have the meanings set forth below.
“ Chargeback Date
” means the last day of the first full month following the
Transition Date.
“ Chargebacks ”
has the meaning set forth in Section 4 .
“ Consignment Agreement
” has the meaning set forth in the Background
Statement.
“ Contingent Manufacturing
Assignment Agreement ” has the meaning set forth in
Section 2(b) .
“ Keflex Products
” means all dosage forms, formulations, strengths and package
sizes and types of any cephalexin antibiotic products that may be
marketed now or in the future under the NDA.
“ Lex Asset Purchase
Agreement ” means that certain Asset Purchase Agreement,
dated as of the date hereof, between MiddleBrook and Lex
Pharmaceuticals, Inc.
“ NDA ” means the
approved new drug applications number 50-405 and 50-406, including
all supplements and amendments thereto.
“ Party ” means
either MiddleBrook or Kef and “ Parties ” means
both MiddleBrook and Kef.
“ Purchase Agreement
” has the meaning set forth in the Background
Statement.
“ Transition Date
” means the date on which the Consignment Agreement
terminates.
2. Transfer of
Responsibilities, Product and Books and Records . Upon the
Transition Date, MiddleBrook shall take the actions described in
this Section 2 .
(a) Consigned
Merchandise . As of the Transition Date, MiddleBrook shall
cease all sales and shipments of Consigned Merchandise (as defined
in the Consignment Agreement) and shall deliver to Kef any
outstanding orders for Keflex Products. Within five (5) days
after the Transition Date, MiddleBrook shall dispatch all Keflex
Products for delivery to Kef at such destination(s), and in
accordance with such freight instructions, as Kef may have
specified in writing not less than five (5) days prior to the
date of dispatch. Kef shall pay the freight costs for shipping the
Keflex Products to Kef.
(b) Assignment of
Manufacturing Agreement . As of and after the Transition Date,
MiddleBrook shall take such actions and execute and deliver such
documents as may be necessary to carry out the terms and provisions
of the Contingent Manufacturing Assignment Agreement, which is
attached as Exhibit F to the Lex Asset Purchase
Agreement.
(c) Keflex Records. As of and
after the Transition Date, MiddleBrook shall transfer (i) all
records of MiddleBrook relating to the Keflex Products including
all historical sales records and (ii) a complete and accurate
copy of all Technical Data Embodiments within the scope of
Section 2. 1(a)(i) and, if the Patent License (as
defined in the Purchase Agreement) has been executed by MiddleBrook
and Kef, the Technical Data Embodiments in Section 2.
1(a)(ii) of the Lex Asset Purchase Agreement. Kef shall pay
the freight costs for shipping such records to Kef. MiddleBrook may
retain copies of those records that MiddleBrook is required to
maintain by any Legal Requirement or requires for the auditing of
its financial statements.
(d) Product Labeling. As of and
after the Transition Date, MiddleBrook shall grant to Kef the right
to receive, market and sell Keflex Products that have been
manufactured on or before the Transition Date and bearing a label
with MiddleBrook’s name, provided such Keflex Products are
sold in unaltered form in compliance with all Regulatory
Obligations before their respective expiration dates.
3. Products Returns .
MiddleBrook shall be responsible for making any refunds relating to
returns of Keflex Products sold by MiddleBrook prior to the
Transition Date and shall deliver to Kef any Keflex Products
physically returned to MiddleBrook. Kef shall be responsible for
all returns of Keflex Products sold by Kef after the Transition
Date. With respect to any
2
batch of
Keflex Products sold both before and after the Transition Date, the
financial responsibility for returns shall be allocated between the
Parties in proportion to their respective sales of each SKU sold
both before and after the Transition Date.
4. Chargebacks and
Rebates . MiddleBrook shall be responsible for and shall pay
all chargebacks and rebates related to sales of Keflex Products
under arrangements of MiddleBrook with Governmental Authorities
(“ Chargebacks ”) that are first submitted on or
before the Chargeback Date, and Kef shall be responsible for and
pay all Chargebacks that are first submitted after the Chargeback
Date.
5. Indemnificati
