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CONFIDENTIAL TREATMENT REQUEST
[ * ] INDICATES INFORMATION THAT HAS BEEN OMITTED PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST AND THIS INFORMATION
HAS BEEN FILED UNDER SEPARATE COVER WITH THE COMMISSION
PRODUCT COLLABORATION AGREEMENT
THIS PRODUCT COLLABORATION AGREEMENT, made as of November 10, 2006
by
and between ELITE
Pharmaceuticals, Inc.,
a corporation
organized and existing
under the laws of Delaware having its principal place of
business at 165 Ludlow
Avenue, Northvale,
New Jersey 07647
("ELITE") and THEPHARMANETWORK, LLC, a
limited liability
company organized and existing under the
laws of New Jersey
with a principal place
of business at 180 Summit Avenue, Suite 200, Montvale,
New Jersey 07645 ("TPN").
RECITALS
WHEREAS, TPN is
engaged in the research and development of generic
pharmaceutical products and has accumulated considerable knowledge in the
field
of pharmaceutical product development management services.
WHEREAS, ELITE is
engaged in the business of research and development,
manufacturing, sales and marketing of oral controlled release
products.
WHEREAS, TPN
wishes to collaborate with ELITE and provide product
development services including analytical methods development and
validation and
formulation of a generic pharmaceutical product in the
Territory.
NOW,
THEREFORE,
in consideration
of the mutual
covenants contained
in
this Agreement, the Parties agree as follows:
ARTICLE I
DEFINITIONS
1.1
DEFINITIONS.
Capitalized terms used
in this Agreement,
whether in the
singular or plural,
have the meanings set forth in SCHEDULE 1 which is attached
hereto and made part of this Agreement, or as otherwise specifically
defined in
this Agreement.
ARTICLE II
PRODUCT DEVELOPMENT SERVICES
2.1
PROVISION OF DEVELOPMENT SERVICES. During the term of this
Agreement, TPN
shall provide the product development services described on SCHEDULE 2
attached
to this Agreement (the
"DEVELOPMENT
SERVICES") to ELITE and its Collaboration
Parties in connection
with the development of the Product. ELITE shall be
responsible for
the payment of
ELITE: _____
1
TPN: _____
* Portions of this exhibit have been omitted and filed separately
pursuant to an
application for
confidential
treatment filed with
the Securities and Exchange
Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>
[*] costs and expenses incurred by the Collaboration Parties in connection with
the active
pharmaceutical
ingredients.
Any and all
out-of-pocket
costs and
expenses will be split between TPN ([*]%) and ELITE ([*]%);
provided, however,
that TPN's share of the out of pocket expenses will accrue and will be
recouped
by Elite out of TPN's [*] ([*]%) percent royalty share upon
commercialization of
the product. Each party should be responsible for paying its own
labor costs.
2.2
PROVISION OF DEVELOPMENT SUPPORT AND COMMERCIALIZATION SERVICE. During
the term of this
Agreement, ELITE shall
provide the
development
support and
commercialization
services described on
SCHEDULE 2 attached to this Agreement
and made a part hereof to TPN in connection with the development support and
commercialization of
the Product
(the "Support Services"). ELITE shall be
responsible for
the payment of [*] costs and expenses incurred by the
Collaboration Parties in connection with the active pharmaceutical
ingredients.
Any and all
out-of-pocket costs
and expenses will be
split between TPN ([*]%)
and ELITE ([*]%) provided, however, that TPN's share of the out of pocket
expenses will accrue
and be recouped by
Elite out of TPN's [*] ([*]%) percent
royalty share upon commercialization of the product.
2.3 ANDA
HOLDER. TPN shall be the owner and party of record of all
regulatory
filings with respect to the Product, including the ANDA for the
Product. ELITE
shall cooperate
with TPN and the Collaboration Parties, as TPN reasonably
requires, in preparing such regulatory filings, including, without limitation,
any and all data contained therein.
2.4
IDENTIFICATION OF
PRODUCT. Commencing
promptly after the
execution and
delivery of this
Agreement, TPN and
ELITE shall work together to determine the
specific synthetic
narcotic analgesic drug product from which a generic
equivalent shall be
developed as the Product. TPN and ELITE shall discuss,
in
good faith, each synthetic narcotic analgesic drug product
suggested by a party
and use commercially
reasonable
efforts to agree upon
the specific
synthetic
narcotic analgesic
drug product from which a generic equivalent shall be
developed within
sixty (60) days of the
date hereof,
unless such period is
otherwise extended by the mutual consent of the parties.
ARTICLE III
COMPENSATION
3.1
DEVELOPMENT PAYMENTS.
ELITE shall, within thirty (30) days after receipt
of written notice from
TPN of the completion
of each milestone specified in
SCHEDULE 3 hereto,
make the payment to TPN which is payable upon completion of
such milestone.
3.2
ROYALTY PAYMENTS
TO TPN. ELITE shall, within thirty (30) days after
receipt of royalty
payments from the Marketing Partner (selected pursuant to
Section 4.2 hereof) with respect to sale of the Product
remit to TPN an
amount
equal to [*] percent ([*]%) of the royalty payment received. Royalty payments
due to TPN shall
continue with respect
to the Product
ELITE: _____
2
TPN: _____
* Portions of this exhibit have been omitted and filed separately
pursuant to an
application for
confidential
treatment filed with
the Securities and Exchange
Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>
during the term of this Agreement. If ELITE later determines that any royalty
payment was miscalculated for any reason whatsoever, ELITE shall pay to TPN the
amount that should have been paid to TPN pursuant to this
Agreement but was
not
paid, and TPN shall
pay to ELITE any amount that was paid to TPN pursuant to
this Agreement but
should not have been paid. Any payment required to be made
pursuant to a subsequent recalculation (if any) shall be made
within thirty (30)
days of the paying party's receipt of written notice of the
recalculated amount.
3.3
RECORDS AND AUDIT.
ELITE shall keep full,
true and accurate books of
account containing all
particulars with
respect to royalty
payments received
from the Marketing Partner for the purpose of showing the amounts
payable to TPN
hereunder. Such books
of accounts shall be kept at ELITE's principal place of
business. During
the term of this
Agreement and for one (1) year after its
termination or expiration, such books and the supporting data shall
be available
at ELITE's principal
place of business, at
mutually acceptable
times and upon
reasonable prior written notice during normal business hours for
inspection by a
firm of certified
public accountants
selected by TPN and
acceptable to ELITE,
which consent shall
not be unreasonably
withheld for the
purpose of verifying
ELITE's royalty statements; PROVIDED, HOWEVER, that such examination
shall not
take place more often than once each calendar year and shall not
cover more than
the preceding three (3) years, with no right to audit any
previous period.
The
cost of inspection is to be paid by TPN. All information
provided to TPN or
its
accountants pursuant
to this Section 3.3 shall be subject to the MCA referenced
in Article V. If requested by ELITE, the accounting firm designated
by TPN shall
be required
to execute a confidentially agreement containing terms and
conditions substantially equivalent to those provided in the
MCA.
ARTICLE IV
MANUFACTURING, PACKAGING, DELIVERY AND DISTRIBUTION
4.1.
MANUFACTURING;
PACKAGING & DELIVERY Following ANDA approval, ELITE shall
manufacture the
Product on [*] in accordance with the terms and conditions of
the Marketing Partner Agreement.
4.2
LICENSE FOR
DISTRIBUTION The Parties shall mutually select a third party
for distribution of the Product in the territory (the "Marketing
Partner").
ARTICLE V
CONFIDENTIALITY
ELITE and TPN
acknowledge
that the Mutual Confidentiality Agreement
between the Parties dated as of the Effective Date of this
Agreement (the "MCA")
is in full force and effect as provided therein. A copy of the MCA is appended
to, and is
hereby incorporated into and made a part of,
this Agreement as
SCHEDULE 4. No Party shall make any press release regarding this Agreement or
the Product that names the other Party without the written consent
of such other
Party.
ELITE: _____
3
TPN: _____
* Portions of this exhibit have been omitted and filed separately
pursuant to an
application for
confidential
treatment filed with
the Securities and Exchange
Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>
ARTICLE VI
DISCLAIMERS, REPRESENTATIONS, WARRANTIES AND INDEMNIFICATIONS
6.1 TPN
REPRESENTATIONS,
WARRANTIES
AND COVENANTS. TPN represents and
warrants to and covenants with ELITE as follows:
6.1.1
COMPANY EXISTENCE AND AUTHORITY. As of the Effective Date, TPN:
(a)
is a limited liability
company duly organized, validly existing and
in
good standing under the laws of the State of New Jersey in which it
is
formed, (b) has full
company power and
authority and the legal right to
own
and operate its
property and assets
and to carry on its business as
it
is now being conducted and as contemplated in this Agreement,
including the right to grant the license granted hereunder, (c) has the
company power
and authority and the legal right to enter into this
Agreement and
perform its obligations hereunder, (d) has taken all
necessary company
action on its part required to authorize the execution
and
delivery of the
Agreement and the
performance
of its obligations
hereunder, and (e) has
delivered this Agreement, which has been duly
executed and constitutes a legal, valid, binding obligation of TPN
and is
enforceable against it in accordance with its terms.
6.1.2
COMPLIANCE WITH
LAWS. In carrying out its work under this
Agreement, all TPN
work shall be
carried out in compliance with any
applicable laws including, without limitation, federal, state, or local
laws, regulations,
or guidelines governing the work at the site
where
such
work is being conducted.
6.1.3 NO
DEBARMENT. TPN will
comply at all times with the provisions
of
the Generic Drug Enforcement Act of 1992 and will upon request
certify
in
writing to ELITE that none of its employees nor any person providing
services to TPN in connection with the Collaboration have been debarred
under the provisions of such Act.
6.1.4 NO
ACTIONS. TPN has not taken nor will it take any action, which
would, in TPN' s good faith judgment, interfere with the performance
of
any
obligations of TPN set forth in this Agreement.
6.2 ELITE
REPRESENTATIONS,
WARRANTIES AND
COVENANTS. ELITE
represents and
warrants to and covenants with TPN as follows:
6.2.1
CORPORATE EXISTENCE
AND AUTHORITY.
As of the Effective
Date,
ELITE: (a) is a corporation duly organized, validly existing and in good
standing under the
laws of Delaware, (b)
has full corporate
power and
authority and the
legal right to own and operate its property and assets
and
to carry on its business as it is now being conducted and as
contemplated in this
Agreement,
including the right to grant license
granted hereunder,
(c) has the
corporate power and authority and the
legal right to enter into this Agreement and perform its obligations
hereunder, (d) has
taken all necessary corporate action on its part
required to
authorize the execution and delivery of the
ELITE: _____
4
TPN: _____
* Portions of this exhibit have been omitted and filed separately
pursuant to an
application for
confidential
treatment filed with
the Securities and Exchange
Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>
Agreement and the performance of its obligations hereunder, and (e) has
delivered this Agreement, which has been duly executed and
constitutes a
legal, valid,
binding obligation of
ELITE and is enforceable against it
in
accordance with its terms.
6.2.2
COMPLIANCE WITH
LAWS. In carrying out its work under this
Agreement,
all ELITE work shall
be carried out in
compliance
with any
applicable laws including, without limitation, federal, state, or local
laws, regulations,
or guidelines governing the work at the site
where
such
work is being conducted.
6.2.3 NO
DEBARMENT. ELITE will comply at all times with the provisions
of
the Generic Drug Enforcement Act of 1992 and will upon request
certify
in
writing to TPN that
none of its employees
nor any person
providing
services to ELITE in connection with this Collaboration or this
Agreement
have
been debarred under the provisions of such Act.
6.2.4 NO
ACTIONS. ELITE has not taken nor will it take any
action,
which would,
in ELITE's good faith judgment, interfere with the
performance of any obligations of ELITE set forth in this
Agreement.
6.3
DISCLAIMER. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER
PARTY MAKES ANY
REPRESENTATION
OR WARRANTY TO THE OTHER PARTY OF ANY KIND,
EXPRESS OR
IMPLIED,
INCLUDING,
WITHOUT
LIMITATION,
ANY WARRANTY OF
NON-INFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Without
limiting the generality of the foregoing, each Party expressly does not
warrant
(a) the success of any
research and
development
undertaken
pursuant to this
Agreement, (b) the
safety for any purpose of the technology it provides
hereunder or (c) that the Product will be successfully marketed following its
approval for commercial sale.
6.4 TPN'S
RIGHT TO
INDEMNIFICATION. ELITE
shall indemnify each
of TPN, its
Affiliates, permitted
successors
and assigns,
and the directors, officers,
employees, agents and
counsel thereof (the "TPN INDEMNITEES"), and defend and
hold each TPN
Indemnitee harmless
from and against
any and all
liabilities,
damages, losses, settlements, claims, actions, suits, penalties,
fines, costs or
expenses (including, without limitation, reasonable attorneys'
fees) (any of the
foregoing, "DAMAGES")
incurred by or
asserted against any
TPN Indemnitee
of
whatever kind or nature, including, without limitation, any claim or liability
based upon negligence,
warranty, strict liability or violation of
government
regulation arising
out of or relating to: (a) any breach of or failure to
perform any representation, warranty or covenant made by ELITE
pursuant to this
Article V; (b) any material breach of this Agreement by ELITE;
or (c) the use,
handling, storage,
sale or other
disposition
of the Product
that is sold by
ELITE, its Affiliates or agents following receive of approval for
the commercial
sale of the Product;
except, in each such case in subparagraphs (a) through (c)
above, to the extent
that such Damages result from the negligence or misconduct
of a TPN Indemnitee or TPN's breach of or failure to perform any
representation,
warranty or covenant under Section 6.1.
ELITE: _____
5
TPN: _____
* Portions of this exhibit have been omitted and filed separately
pursuant to an
application for
confidential
treatment filed with
the Securities and Exchange
Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>
6.5
ELITE'S RIGHT TO INDEMNIFICATION. TPN shall indemnify each of ELITE,
its
Affiliates, successors
and assigns,
and the directors,
officers, employees,
agents and counsel thereof (the "ELITE INDEMNITEES"), and defend and hold each
ELITE Indemnitee
harmless from and
against any and all Damages incurred by or
asserted against any
ELITE Indemnitee of
whatever kind or
nature, including,
without limitation,
any claim or liability
based upon
negligence,
warranty,
strict liability
or violation of government regulation arising out of or
relating to:
(a) any breach of or failure to perform any representation,
warranty or covenant
made by TPN pursuant to this Article V or (b) any material
breach of this Agreement by TPN; except, in each such case, in
subparagraphs (a)
and (b) above, to the
extent that such Damages result from the negligence or
misconduct of a ELITE
Indemnitee or ELITE's breach of or failure to perform any
representation or warranty under Section 6.2.
6.6
INDEMNIFICATION
PROCEDURES WITH RESPECT TO THIRD PARTY CLAIMS. Promptly
after a Party entitled to indemnification under Section 6.4 or 6.5 (an
"INDEMNITEE") receives
notice of any pending or threatened claim against it (an
"ACTION"), such
Indemnitee
shall give written
notice to the Party to whom the
Indemnitee is entitled
to look for
indemnification
pursuant to Section 6.4 or
6.5, as applicable (the "INDEMNIFYING PARTY"), of the commencement thereof,
provided that the failure so to notify the Indemnifying
Party shall not
relieve
it of any liability that it may have to any Indemnitee hereunder,
except to the
extent the Indemnifying Party demonstrates that it is prejudiced
thereby. In
case any Action that is subject to indemnification under this
Article V shall be
brought against
an Indemnitee and it shall give written notice to the
Indemnifying Party of the commencement thereof, the Indemnifying Party
shall be
entitled to
participate therein
and, if it so desires,
to assume the
defense
thereof with counsel
reasonably
satisfactory to such
Indemnitee
and, after
notice from the
Indemnifying Party to
the Indemnitee of its election to assume
the defense
thereof, the Indemnifying Party shall not be liable to such
Indemnitee under
this Article V for any fees of other
counsel or any other
expenses, in each case
subsequently
incurred by such
Indemnitee in connection
with the defense thereof, other than reasonable costs of investigation.
Notwithstanding an
Indemnifying Party's
election to assume the
defense of any
such Action
that is subject to indemnification under this Article V, the
Indemnitee shall have the right to employ separate counsel and to
participate in
the defense of such Action, and the Indemnifying Party shall bear
the reasonable
fees, costs and
expenses of such
separate counsel if: (i) the use of
counsel
chosen by the Indemnifying Party to represent the Indemnitee
would present such
counsel with a conflict of interest; (ii) the actual or potential
defendants in,
or targets of, any
such Action
include both the Indemnifying Party and the
Indemnitee, and the Indemnitee shall have reasonably concluded that
there may be
legal defenses
available to it which
are different from or additional to those
available to the Indemnifying Party (in which case the
Indemnifying Party shall
not have the right to assume the defense of such Action on the Indemnitee's
behalf); (iii) the Indemnifying Party shall not have employed
counsel reasonably
satisfactory to the
Indemnitee to represent the Indemnitee within a reasonable
time after notice of the institution of such Action;
or (iv) the
Indemnifying
Party shall
authorize the Indemnitee to employ separate counsel at the
Indemnifying Party's
expense. If an
Indemnifying Party
assumes the defense of
such Action,
no compromise or settlement thereof may be effected by the
Indemnifying Party without the Indemnitee's written consent, which
consent shall
not be unreasonably
withheld or delayed,
ELITE: _____
6
TPN: _____
* Portions of this exhibit have been omitted and filed separately
pursuant to an
application for
confidential
treatment filed with
the Securities and Exchange
Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>
unless (1) there is no
finding or
admission of any violation of law or any
violation of the
rights of any other
Party and no effect on
any other claims
that may be made
against the Indemnitee
and (2) the sole
relief provided is
monetary damages that
are paid in full by the Indemnifying Party. Unless the
Parties shall
otherwise agree, or
unless there shall be a finding of liability
of either Party to the other, the Parties shall be jointly
liable with
respect
to the claims of any third Party claims.
6.7
LIMITATION ON DAMAGES. Notwithstanding any provision of this
Agreement to
the contrary, neither
Party shall be entitled in connection with any breach or
violation of this Agreement to recover any punitive, exemplary or other special
damages or any indirect, incidental or consequential
damages, including without
limitation damages relating to loss of profit, business opportunity or
business
reputation. Each
Party, as a material
inducement
to the other Party to
enter
into and perform its obligations under this Agreement, hereby expressly waives
its right to assert any claim relating to such damages and agrees
not to seek to
recover such damages in connection with any action, suit or proceeding relating
to this Agreement.
The foregoing shall not limit the right of any person
entitled to
indemnification in accordance with the provisions of this Article
V
with respect to all
components
of any claim,
award or judgment
against such
person by any unaffiliated third party.
6.8
EXCLUSIVE REMEDY.
In the absence of
fraud or the intentional breach of
this Agreement,
the indemnification provisions contained in this Article VI
shall constitute the
sole and exclusive
recourse and remedy of the Parties for
monetary damages
arising out of any breach or violation of any of the
representations,
warranties,
covenants or
agreements
contained
in this
Agreement. Nothing
herein shall be deemed to limit the right of either Party to
seek injunctive or other equitable relief in connection with the
failure of the
other Party to perform any covenant or agreement contained in this
Agreement.
ARTICLE VII
INTELLECTUAL PROPERTY
7.1 TPN
OWNERSHIP OF INTELLECTUAL PROPERTY. TPN shall own sole and
exclusive
ownership of, and all
right, title,
and interest in and to
all developments,
improvements and enhancements thereof conceived of or made by
TPN or any of its
employees or agents to the Product during the term of this
Agreement.
The ANDA
shall be filed in the name of TPN and shall be owned by TPN.
7.2
LICENSE OF ANDA. TPN shall license the right to manufacture, use
and sell
the Product to ELITE,
subject to Elite maintaining required compliance with all
regulatory agencies having jurisdiction over the Product.
ELITE: _____
7
TPN: _____
* Portions of this exhibit have been omitted and filed separately
pursuant to an
application for
confidential
treatment filed with
the Securities and Exchange
Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
<PAGE>
ARTICLE VIII
TERM AND TERMINATION
8.1 TERM
OF COLLABORATION.
This Agreement shall become effective on the
Effective Date and
shall continue in
effect for a period of fifteen (15) years
from the date of first
commercial sale of the
Product unless terminated in
accordance with this
Article VIII.
The Parties
hereto may agree,
by written
consent signed by both Parties, to renew this Agreement for an
additional five
(5) year term (or such longer or shorter period of time as the
Parties may agree
in writing).
8.2
TERMINATION FOR
BREACH. Either Party
may terminate
this Agreement by
notice to the other Party at any time during the term of this
Agreement if the
other Party is in breach of any material obligations hereunder and
has not cured
such breach within ninety (90) da
