DISTRIBUTION AND SUPPLY AGREEMENT
By and Between
Molecular Pharmacology Limited (ACN 110 037 860)
And:
Molecular Pharmacology (USA) Limited
DATED: OCTOBER 13, 2005
TABLE OF CONTENTS
DISTRIBUTION AND SUPPLY AGREEMENT
This MARKETING AND DISTRIBUTION
AGREEMENT (this "Agreement") is made and entered into as of October
13, 2005,
By and Between:
Molecular Pharmacology Limited (ACN 110 037 860), a corporation
duly organized and existing under the applicable laws of Australia,
having an address at Level 1, 284 Oxford Street, Leederville,
Western Australia ("MPL").
And:
Molecular Pharmacology (USA)
Limited, a corporation duly organized and existing under the
applicable laws of the State of Nevada, and having an address at
12880 Railway Avenue, Vancouver, British Columbia, Canada
("Distributor").
RECITALS
WHEREAS, Cambridge Scientific Pty
Ltd owns the intellectual property to metallo-polypeptide analgesic
in various formulations, presentations and strengths;
and
WHEREAS, Cambridge Scientific Pty
Ltd has granted to MPL the marketing and distribution rights to
metallo-polypeptide analgesic in various formulations,
presentations and strengths; and
WHEREAS, Distributor wishes to
obtain the exclusive right to distribute, even as to MPL, market,
promote, detail, advertise and sell the Licensed Products (as
hereinafter defined) as MPL's exclusive distributor of such
Licensed Products in the Territory (as hereinafter defined), and to
utilize MPL's Trademarks (as hereinafter defined) to identify the
Licensed Products in connection with the distribution, marketing,
promotion, advertisement and sale of the Licensed Products in the
Territory as described herein, and MPL wishes to grant such rights
to Distributor on the terms and conditions set forth in this
Agreement; and
WHEREAS, Distributor wishes to
purchase from MPL, and MPL agrees to supply to Distributor,
Distributor's entire requirements of the Licensed Products, for
distribution in the Territory for the Term (as hereinafter
defined).
NOW, THEREFORE, in consideration
of the mutual covenants and agreements hereinafter set forth and
other good and valuable consideration, the receipt and legal
sufficiency of which are hereby mutually acknowledged, MPL and
Distributor hereby agree as follows:
ARTICLE
1: DEFINED TERMS
1.01
Defined Terms . The
following terms, whether used in the singular or plural, shall have
the meanings assigned to them below for purposes of this
Agreement:
"Actual Quantity" has the meaning
set forth in Section 5.03(c).
"Adverse Event" shall mean any
adverse event associated with the use of the Licensed Products in
humans, whether or not considered drug-related, including (i) an
adverse event occurring in the course of the use of the Licensed
Products in professional practice; (ii) an adverse event occurring
from an overdose, whether accidental or intentional, related to the
Licensed Products; (iii) an adverse event occurring from drug abuse
related to the Licensed Products; (iv) an adverse event occurring
from withdrawal of the Licensed Products; and (v) any failure of
expected pharmacological action, or such other definition as may
from time to time be set forth in 21 CFR Part 314.80.
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"Affiliate" means, with respect
to any person, any other person, that directly or indirectly
controls, is controlled by, or is under common control with, such
person. For such purposes, control, controlled by and under common
control with shall mean the possession of the power to direct or
cause the direction of the management and policies of an entity,
whether through the ownership of voting stock or partnership
interest, by contract or otherwise. In the case of a corporation,
the direct or indirect ownership of fifty percent (50%) or more, or
the ownership percentage as required under local jurisdiction, of
its outstanding voting shares or the ability otherwise to elect a
majority of the board of directors or other managing authority of
the entity shall in any event be deemed to confer control, it being
understood that the direct or indirect ownership of a lesser
percentage of such shares shall not necessarily preclude the
existence of control.
"Agreement" means this agreement,
together with all appendices, exhibits and schedules hereto, as the
same may be amended or supplemented in accordance with this
Agreement.
"Annual Minimum Purchase
Requirement" has the meaning set forth in Section
5.01(b).
"Annual Period" means any of the
four periods identified as such in the table in Section 5.01(b)
and, if the Term of this Agreement is extended pursuant to Section
12.01, each twelve (12) month period ending on the anniversary of
October 13, 2005.
"Applicable Laws" means all laws
(including the common law), ordinances, rules and regulations
applicable to this Agreement or the activities contemplated
hereunder, including without limitation the Federal Food, Drug,
and Cosmetic Act and applicable regulations, federal and
state anti-kickback laws, privacy laws, consumer protection
statutes, laws relating to sample accountability and any
requirements under any Licensed Product Registrations applicable to
the Licensed Products in the Territory.
"Applicable Percentage" has the
meaning set forth in Section 5.06(a).
"Average Annual Net Sales" has
the meaning set forth in Section 12.07.
"Bi-Annual Supply Schedule" has
the meaning set forth in Section 5.03(c).
"Business Day" means any day that
is not a United States federal holiday.
"Calendar Quarter" means a period
of three (3) consecutive calendar months commencing each January 1,
April 1, July 1, and September 1 and ending each December 31, March
31, June 30 and September 30, as the case may be.
"Cambridge" means Cambridge
Scientific Pty Ltd (ACN 109 247 118) of Level 1, 284 Oxford Street,
Leederville, Western Australia.
"Commercially Reasonable Efforts"
of a Party means those efforts consistent with the exercise of its
prudent scientific and business judgment as applied to other
commercialization efforts for products of similar scientific and
commercial potential within the relevant product lines of such
Party.
"Commencement Date" means the
date that any Licensed Product is available and ready for
distribution and sale in commercial quantities in the Territory
under the terms of this Agreement.
"Commencement Period" means the
period commencing on the Commencement Date and ending on a date,
which shall be designated by Distributor in writing at least
fifteen (15) Business Days prior to such date, that is no later
than nine (9) months after the Commencement Date, determined by
Distributor, in its sole discretion to be the date by which
Distributor has or shall have sufficient warehousing capabilities
such that the services contemplated by the provisions of Section
3.08 are no longer necessary. Any extension of the Commencement
Period shall be upon mutual agreement, in writing, by the
Parties.
"Confidential Information" has
the meaning set forth in Section 11.01(a).
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"Confidentiality Agreement" has
the meaning set forth in Section 11.01(b).
"Cost of Goods" means the price
at which Distributor purchases Licensed Products from MPL, as set
forth in Section 5.05.
"CSO" means a contract sales
organization that is engaged in the business of promoting
prescription drug products.
"DDMAC" means the FDA's Division
of Drug Marketing, Advertising and Communications.
"Delivery Date" has the meaning
set forth in Section 5.04(b).
"Distributor Claim" has the
meaning set forth in Section 9.01.
"Distributor Party" has the
meaning set forth in Section 9.01.
"Effective Date" means the date
upon which this Agreement was first entered into, as set forth
above.
"FDA" means the United States
Food and Drug Administration, or any successor agency of the United
States.
"Federal Programs" has the
meaning set forth in Section 3.07.
"GLP" has the meaning set forth
in Section 8.02(f)(ii).
"Minimum Gross Receipts"
means:
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for the first twelve (12) months
period after the Effective Date, five hundred thousand dollars
($500,000);
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for the second twelve (12) months
period after the Effective Date, two million dollars
($2,000,000.00);
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for the third twelve (12) months
period after the Effective Date and for each year after that, as
provided for in clause 5.2.
"Good Manufacturing Practices"
means all current good manufacturing practices as defined under 21
USC ss. 351(a)(2)(B) and the FDA regulations promulgated
thereunder, as in effect from time to time.
"Governmental Authority" means
any Federal, state, local or foreign governmental authority, agency
or other body.
"Gross Receipts" means the Gross
Receipts more particularly set out and described in Exhibit
5.01(b).
"Intellectual Property" means:
(i) all patents and patent applications in existence as of the
Effective Date, as set forth on EXHIBIT 1.01A.
"Licence" means the licence
granted by the MPL to the Distributor by this Agreement.
"Licensed Field" means the
topical application of the Technology for human use only, and
specifically excludes:
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dermatological or cosmetic use, or
tissue repair or tissue regeneration effect; and
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any use or application of the
Technology in non-human groups or species.
"Licensed Products" means all
products in all dosage forms, formulations, line extensions and
package configurations using or otherwise incorporating any aspect
or production method of metallo-polypeptide analgesic as an active
ingredient marketed by MPL or its Affiliate in the Territory under
the tradename Tripeptafen or any other trade names or Trade Marks
used by MPL relating to the product and any improvements to such
formulations or dosages as may hereafter be distributed by MPL or
its Affiliates in the Territory during the Term for the topical
application for human use only, and specifically
excludes:
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dermatological or cosmetic use, or
tissue repair or tissue regeneration effect;
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any use or application of the
Licensed Product in non-human groups or species; and
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Thermalife cream, presently owned by
Pharmanet Group Limited (ACN 006 640 553) the holding company of
MPL.
"Licensed Product Packaging
Materials" means all packaging materials used in the manufacture
of, and shipment of, the Licensed Products, as in effect on the
date hereof, including primary and secondary containers, closures,
tertiary packaging materials, labels and leaflets, all as revised
from time to time in accordance with the terms and conditions of
this Agreement.
"Licensed Product Registration"
means the approvals or registrations for any of the Licensed
Products which have been received by MPL in the Territory,
including without limitation the Drug Master File (DMF) and NDA for
the Licensed Product.
"Manufacturing Documentation"
means, with respect to any Licensed Product, any and all current
validation reports, any current formulation's manufacturing
instructions, and current batch record templates, and which are
specific to or otherwise used in Secondary Manufacture of the
finished form of the Licensed Product. For avoidance of doubt, it
is understood and agreed that the term "Manufacturing
Documentation" shall only apply to such documents as are used in,
or that relate to, the finished goods manufacturing process, and
shall not in any case apply to the Primary Manufacturing process or
to the synthesis of any of the active drug substance in the
Licensed Product.
"Market" means market,
distribute, sell, supply or any other way dispose of.
"Material Adverse Effect" has the
meaning set forth in Section 8.02(b).
"MPL Claim" has the meaning set
forth in Section 9.02.
"MPL Entities" means MPL and
those MPL Affiliates that manufacture, distribute, sell, promote or
market the Licensed Products in the Territory.
"MPL Party" has the meaning set
forth in Section 9.02.
"NDA" means a New Drug
Application filed with the FDA for any product, requesting
permission to place a drug on the market in accordance with 21 CFR
Part 314, and all amendments or supplements filed pursuant to the
requirements of the FDA, including all documents, data and other
information concerning such product which are necessary for FDA
approval to market such product in the Territory.
"NDC" means National Drug
Code.
"Net Sales" means the gross
amount invoiced for Licensed Products by Distributor or its
Affiliates to Third Parties in the Territory, less:
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quantity, trade, and/or cash
discounts, allowances, rebates, chargebacks and price adjustments
or reductions allowed or given;
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credits, rebates, chargebacks, or
refunds allowed for rejected, outdated, damaged, or returned
Licensed Products;
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the Cost of Goods; and
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any other similar and customary
deductions as defined and accepted by U.S. Generally Accepted
Accounting Principles.
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Deductions shall be determined in
accordance with U.S. Generally Accepted Accounting Principles,
consistently applied. If any of the Licensed Products are sold for
compensation other than cash, Net Sales shall be calculated based
on the gross list price of the Licensed Products on the date of
sale in cash.
"Net Wholesale Price" means the
gross list price published by Distributor, ex-factory, to its
wholesale customers for the Licensed Products.
"Patents" means all patents
relating to the Licensed Products, patent applications filed by or
on behalf of MPL now and in the future (including patents or patent
applications relating to the MPL's Improvements and the Licensee's
Improvements) and any proposed patent as set out in a patent
strategy in any jurisdiction in the Territory including those set
out in Exhibit 1.01A of the Agreement.
"Party" means MPL or Distributor
and, when used in the plural, shall mean MPL and
Distributor.
"PDMA" means the Prescription
Drug Marketing Act .
"Person" means any natural
person, corporation, firm, business trust, joint venture,
association, organization, company, partnership, limited liability
company, or other business entity, or any government or any agency
or political subdivision thereof (including but not limited to
FDA).
"Pre-Clearance Period" has the
meaning set forth in Section 3.02(b)(ii).
"Pre-Clearance Process" has the
meaning set forth in Section 3.02(b)(ii).
"Primary Manufacture" or "Primary
Manufacturing" means the process used in the manufacture of an
active drug substance (including, but not limited to the synthesis
thereof), the result of which will be used in Secondary
Manufacturing of a pharmaceutical product.
"Promotional Review Notice" has
the meaning set forth in Section 3.02(b)(i).
"Purchase Order" has the meaning
set forth in Section 5.03(a).
"Recall" has the meaning set
forth in Section 6.07.
"Renewal Date" has the meaning
set forth in Section 12.01.
"Royalty" has the meaning set
forth in Section 5.01(b).
"Secondary Manufacture" or
"Secondary Manufacturing" means the manufacturing and packaging
process used in formulating the active drug substance and all
excipients into a final dosage form of a pharmaceutical
product.
"Serious Adverse Event" means an
Adverse Event occurring at any dose that results in any of the
following outcomes: death, a life-threatening Adverse Event,
inpatient hospitalization or prolongation of existing
hospitalization, a persistent or significant disability/incapacity,
or a congenital anomaly/birth defect. Important medical events that
may not result in death, be life-threatening, or require
hospitalization may be considered a Serious Adverse Event when,
based upon appropriate medical judgment, they may jeopardize the
patient or subject and may require medical or surgical intervention
to prevent one of the outcomes listed in this
definition.
"Technology" means the product or
invention:-
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metallo-polypeptide analgesic
production method and all improvements and all industrial and
intellectual property rights which may be derived or obtained from
the Patent; and
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the Documentation which forms part
of the Patent and contains technical information relating to the
Patent.
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"Term" has the meaning set forth
in Section 12.01.
"Territory" means the United
States of America, excluding its territories and
possessions.
"Third Party" means any Person
whom or which is neither a Party nor an Affiliate of a
Party.
"To The Knowledge of" a specified
entity or any similar term means to the actual knowledge of the
officers of the specified entity having operating responsibility
for the business of such entity.
"Trademarks" means the trademarks
set forth on Exhibit 1.01B.
1.02
Terms Generally . All
references herein to Articles, Sections, paragraphs, clauses,
Exhibits and Schedules shall be deemed references to Articles,
Sections, paragraphs and clauses of this Agreement and Exhibits and
Schedules to this Agreement unless the context shall otherwise
require.
ARTICLE
2: APPOINTMENT OF DISTRIBUTOR; RIGHTS AND LIMITATIONS; RIGHTS OF
FIRST REFUSAL FOR THE LICENSED PRODUCTS
2.01
Appointment of Distribution Rights .
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Subject to the terms and conditions
of this Agreement, MPL hereby appoints Distributor as MPL's
exclusive distributor (exclusive even as to MPL and its Affiliates)
of the Licensed Products in the Territory, and, in connection
therewith, grants to Distributor the exclusive right (exclusive
even as to MPL and its Affiliates) to market, promote, advertise,
sell and distribute the Licensed Products in the Territory. The
appointment made in the preceding sentence shall commence as of the
Effective Date and continue throughout the Term, and shall not
survive past the termination or expiration of the Term. MPL and its
Affiliates shall not engage in any marketing, promotion,
advertisement, sale or distribution (except to the extent provided
in Section 2.01(b) below) of the Licensed Products within the
Territory during the Term of this Agreement. MPL shall not
knowingly sell to any of its Affiliates or any Third Party outside
the Territory Licensed Products for resale inside the
Territory.
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MPL shall retain the right to ship
Licensed Products through its distribution channels in the
Territory, as long as such shipment is solely in connection with
providing Licensed Products to MPL Affiliates for sale outside the
Territory or to Distributor within the Territory.
2.02
Territorial Limitation . Distributor agrees that it shall conduct its
marketing, promotion, advertisement, sale and distribution of the
Licensed Products solely in the Territory. Distributor shall not
sell, market, promote, advertise or distribute the Licensed
Products outside the Territory. Distributor shall not knowingly
sell the Licensed Products, directly or indirectly, to any Third
Party in the Territory for resale outside the Territory. It is
acknowledged by the parties, however, that certain sales of the
Licensed Products by Distributor to the United States Government,
and its subdivisions thereof, may result in the Licensed Products
being shipped to military bases and other government installations
that are outside the scope of the Territory and such sales shall
not constitute a breach of this Agreement. MPL shall use
Commercially Reasonable Efforts to ensure that its Affiliates shall
not sell the Licensed Products, directly or indirectly, to Third
Parties in the Territory for commercial sale. The Distributor shall
immediately refer to MPL all enquiries received for the Licensed
Product from outside the Territory or for delivery of the Licensed
Product outside the Territory.
2.03
Restriction on Sub-Distributors . Without the prior written consent of MPL,
Distributor shall not grant to any Third Party any rights to
market, promote, advertise, sell or distribute the Licensed
Products, and shall not enter into any agreement or arrangement
with respect to co-promoting the Licensed Products. The foregoing
notwithstanding, Distributor may employ the services of a Third
Party in:
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the detailing of the Licensed
Products to healthcare professionals in the Territory, so long as
any sales representative deployed by such Third Party for
Distributor for such purpose shall at such time not detail products
that are competitive with the Licensed Products,
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the receiving, warehousing and
shipping of the Licensed Products for Distributor, or
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the acceptance of orders, generation
of invoices and collection and management of receivables with
respect to Distributor's sales of the Licensed
Products.
2.04
Compliance with Licensed Product Registration Resale in Same
Packaging .
Distributor shall not at any time do, and neither shall Distributor
permit its agents or representatives to do, any act in violation of
the Licensed Product Registration for any of the Licensed Products
in the Territory. In the event that any filings are required to be
made with or approvals required to be obtained from applicable
regulatory authorities in order to sell the Licensed Products to
Distributor or for Distributor to initiate distribution, marketing,
advertisement, sale or promotion of the Licensed Products in the
Territory, the Parties shall cooperate fully to ensure that such
filings and approvals are obtained or made as expeditiously as
reasonably practicable. Distributor shall not alter in any manner
any of the Licensed Products or its packaging as sold to it by MPL
hereunder and shall resell the Licensed Products without alteration
in the form sold to it by MPL.
2.05
No Ownership Rights Conveyed on Effective Date
. Except for Distributor's right to
use the Trademarks pursuant to Section 3.03 hereof, no right or
license under any Trademark, or under any patent rights or know-how
owned or controlled by MPL or any of its Affiliates to make or have
made the Licensed Products is granted under this Agreement to
Distributor. Without limiting the foregoing, the Parties
acknowledge and agree that nothing in this Agreement shall grant to
Distributor any right or interest in any new Licensed Products,
dosage forms, or other presentations at any time derived or
developed by MPL in connection with the Licensed
Products.
2.06
Right of First Refusal to Purchase Licensed Products
.
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Subject to the terms and conditions
of this Agreement, in the event that at any time during the Term
MPL decides to divest itself of any of the Licensed Products,
whether by assignment, sale, conveyance, transfer, license or other
means, MPL will first offer to Distributor the opportunity to
purchase all the Licensed Products. Without limiting the generality
of the foregoing, MPL will refrain from offering any of the
Licensed Products to any third Party until either:
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Distributor has advised MPL in
writing that it elects not to accept MPL's offer of the Licensed
Products, or
-
following a period of good faith
negotiation, MPL and Distributor are unable to reach an agreement
concerning a purchase of the Licensed Products.
Whereupon, MPL may offer and sell any of the
Licensed Products to a Third Party on terms no less favorable to
MPL than those last offered by MPL to Distributor, it being
understood, however, that any such sale to a Third Party that
occurs prior to the expiration of the Term shall be subject to
Distributor's rights under this Agreement, including Distributor's
right to act as exclusive distributor of the Licensed Products in
the Territory. If MPL does not complete such sale to a Third Party
within one hundred eighty (180) days after either date described in
the immediately preceding sentence, MPL shall again be subject to
the provisions of this Section 2.06 with respect to any divestiture
of the Licensed Products.
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In the event that at any time after
the expiration or termination of the Term and within twenty-four
(24) months after such expiration or termination MPL decides to
divest itself of any of the Licensed Products, whether by
assignment, sale, conveyance, transfer, license or other means, MPL
will afford Distributor an opportunity to purchase such Licensed
Products; it being understood, however, that such opportunity shall
not constitute a right of first refusal.
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The completion of any assignment,
sale, conveyance, transfer, license and delivery with respect to
the Licensed Products pursuant to this Section 2.06 shall be
referred to herein as the "Transfer" of the Licensed Products. The
Parties acknowledge that the completion of the Transfer may be
subject to governmental consents or approvals.
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In the event that at any time within
twenty-four (24) months after the termination or expiration of this
Agreement, MPL decides to abandon one or more of the Licensed
Products, MPL will first offer to Distributor the opportunity to
acquire the rights to such Licensed Products. Pursuant to such
offer, MPL and Distributor shall conduct good faith negotiations
with respect to the terms of such acquisition.
2.07
Non-Compete . During
the Term of this Agreement, Distributor shall not distribute,
market, promote, detail, advertise or sell any product within the
same therapeutic category, containing the same active
pharmaceutical ingredient and approved for the same indication that
competes directly with any Licensed Product.
ARTICLE
3: DISTRIBUTOR RESPONSIBILITIES
3.01
Distribution Diligence . In fulfillment of its obligations under this
Agreement, during the Term Distributor shall:
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maintain levels of inventory, after
the Commencement Period, of each of the Licensed Products no
greater than is reasonable and consistent with customary industry
practice and Distributor's historical sales patterns of the
Licensed Products to its customers;
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provide, at its expense, a
traceability system for the Licensed Products reasonably comparable
to customary industry practices;
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use Commercially Reasonable Efforts
to ensure that all sales force personnel promote the Licensed
Products in a manner that is consistent with the Licensed Products'
applicable Licensed Product Registration and labeling and that is
permitted by Applicable Laws. If Distributor becomes aware of any
such activity in contravention of the immediately foregoing
standards, Distributor shall take prompt affirmative action to
ensure that such activity shall cease, and take additional remedial
action to advise its sales personnel concerning the activities
described in this subsection;
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use Commercially Reasonable Efforts
not to take any action which constitutes a violation of Applicable
Laws or breach of this Agreement and would have a material adverse
impact on:
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the commercialization of the
Licensed Products in the Territory; or
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the then existing business of MPL,
its Affiliates and licensees with respect to the Licensed Products
outside of the Territory;
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assist MPL in obtaining, as soon as
reasonably practicable following the Effective Date, and no later
than six (6) months following the Effective Date, at MPL's sole and
exclusive expense, any and all requisite NDCs in Distributor's name
for the Licensed Products, and, except as otherwise provided in
this Agreement, obtain any and all governmental approvals as are
required for Distributor to fulfill its obligations hereunder. MPL
shall cause the NDC number obtained by Distributor to appear on all
Licensed Products (other than Licensed Products consisting of
current inventory of finished goods) sold by MPL to Distributor as
soon as reasonably practicable;
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maintain the availability of the
current package inserts with respect to the Licensed Products on
any website maintained by Distributor or its Affiliates for the
distribution, marketing, promotion, detailing, advertising or sale
of the Licensed Products and at such other locations where
Distributor or any such Affiliates make information regarding the
Licensed Products available; and
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use Commercially Reasonable Efforts
to sell, market, detail, promote, advertise and distribute the
Licensed Products in a manner that will not have a material adverse
effect on the Licensed Products.
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include all Licensed Products in
its Patient Assistance Program. For purposes of this clause (viii),
the "Patient Assistance Program" shall be those indigent programs
maintained by Distributor.
3.02
Promotional Materials and Activities .
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Subject to the provisions of
Section 3.02(b) below, Distributor shall be solely responsible, at
its sole expense and under its sole control for conducting all
promotional activities and for designing, preparing and
distributing all materials, advertisements and activities used in
the promotion, advertising and marketing of the Licensed Products
within the Territory. Distributor shall Ensure that all materials,
advertisements and promotional activities comply with, and
Distributor shall be solely responsible and liable for any failure
of such materials and activities to comply with, the applicable
labeling and Licensed Product Registration for any of the Licensed
Products and with Applicable Laws and regulations, notwithstanding
any prior review or approval of such materials or activities by MPL
and notwithstanding that such materials or activities may have been
previously reviewed, used or conducted by MPL. Distributor shall be
solely responsible for fulfilling regulatory requirements
pertaining to its promotional materials and activities, including,
without limitation, sole responsibility for submitting to FDA all
promotional and advertising materials prepared by or for
Distributor at the time of initial dissemination, by way of a Form
FDA-2253, consistent with 21 CFR Part 314.81. To this effect, MPL
shall, upon the Effective Date, or as soon thereafter as is
reasonably practicable, place a letter on file with DDMAC with
respect to the Licensed Products advising DDMAC that Distributor
shall be the sole marketer and promoter of the Licensed Products in
the Territory and requesting that DDMAC address regulatory
inquiries and concerns regarding Distributor's promotional
activities solely with Distributor. Distributor shall promptly, but
in no event less than one (1) Business Day after Distributor's
receipt thereof, provide a copy to MPL of any correspondence from a
government agency with respect to any of the Licensed Products,
including, but not limited to, the FDA, reflecting any purported
legal or regulatory violations or legal or regulatory action being
considered or taken by such government agency, including without
limitation, copies of FDA NOV's and Warning Letters. Unless
otherwise required, Distributor shall not provide MPL with copies
of any promotional materials or advertising or notify MPL of any
promotional activities unless pursuant to a written request by MPL.
Distributor shall absorb and be solely responsible for any and all
lost profits, lost revenues, damages, losses, expenses and costs
incurred by Distributor, its Affiliates, and any CSO retained by
Distributor pursuant to the terms of this Agreement, arising from
the failure of any promotional materials or advertising used, or
activities conducted by, Distributor to comply with the applicable
labeling, the Licensed Product Registrations and/or with Applicable
Laws. Without limiting the rights MPL may have under the
indemnification provisions of this Agreement, Distributor shall
promptly reimburse MPL and its Affiliates for any and all damages,
losses, expenses and costs suffered or incurred by MPL and its
Affiliates arising from (i) the failure of any promotional
materials or advertising used or activities conducted by
Distributor to comply with the applicable labeling, the applicable
Licensed Product Registrations, Applicable Laws, and/or any
comments, guidance or direction given by FDA or DDMAC in the
Pre-Clearance Process pursuant to Section 3.02(b)(ii) or (ii) the
failure of Distributor or its representatives or any CSO selected
pursuant to the terms of this Agreement to promote the Licensed
Products in compliance with the applicable labeling, the applicable
Licensed Product Registrations and/or with Applicable Laws. MPL
shall use Commercially Reasonable Efforts to mitigate or limit its
losses, expenses and costs incurred in connection with any matter
described in (i) or (ii) above and for purposes of the preceding
sentence, it is understood and agreed that the losses, expenses and
costs incurred by MPL shall include, without limitation, the
losses, expenses and costs incurred by MPL to so mitigate or limit
the effect or impact of (i) or (ii) above, on MPL and its
Affiliates products or corporate image (including, but not limited
to, the costs of any remedial action undertaken by MPL to
communicate with physicians or customers (including, but not
limited to so-called "dear doctor letters").
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If Distributor (or MPL) shall
receive a Warning Letter from FDA which relates to marketing,
promotion, advertisement, sale or distribution of the Licensed
Products after the Effective Date, or Distributor (or MPL) shall
receive two (2) NOV's from the FDA which relate to marketing,
promotion, advertisement, sale or distribution of the Licensed
Products after the Effective Date, MPL shall have the right to
call, and Distributor shall participate/or attend at its own
expense, a meeting of Distributor (which shall include senior level
marketing and sales management of Distributor) and MPL, to be held
in Los Angeles, CA. The purpose of such meeting shall be to discuss
the promotional pieces or practices which led to the issuance of
the Warning Letter or the NOV's, as the case may be, and to
discuss, if appropriate, appropriate corrective or remedial
measures to Distributor's promotional review process. Subsequent to
any such meeting or in lieu of such meeting (if such meeting is not
held as a result of the mutual agreement of the Parties or as a
result of Distributor's failure or refusal to attend), MPL may, in
its sole and absolute discretion, at any time after the issuance of
a Warning Letter or a second NOV from FDA related to the Licensed
Products after the Effective Date, decide to invoke the promotional
review procedures set forth in Section 3.02(b)(ii) below by sending
written notice thereof to Distributor (hereinafter, a "Promotional
Review Notice").
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In the event that MPL sends a
Promotional Review Notice to Distributor, Distributor shall comply
with the procedures set forth in this Section 3.02(b)(ii).
Distributor shall ensure that all marketing and advertising
materials and activities comply with the applicable labeling and
the applicable Licensed Product Registration for any of the
Licensed Products and with Applicable Laws, including, without
limitation, addressing any concerns which were the subject of such
FDA letter(s). For a period of twelve (12) months after the
Promotional Review Notice (the "Pre-Clearance Period"), Distributor
shall submit all of the following for review and approval by DDMAC
(the "Pre-Clearance Process") prior to use or dissemination; any
and all marketing, advertising, promotional and related materials
and activities (including, without limitation, detail aids,
letters, brochures, reprints and other printed materials shown to
or left with healthcare providers, letters, brochures and other
printed materials intended for consumers, website content,
materials for use in promotional programs, and any print,
television, radio, and other media advertising materials intended
for healthcare providers or consumers), labeling, press materials,
updates and corrections to the Physicians Desk Reference with
respect to the Licensed Products, speaker training materials
(including slides and slide kits), sales training materials and
other materials and communications originating from home offices,
regional offices, local offices or hub offices and sent to the
sales force regarding promotional messages or strategies for the
Licensed Products. Distributor shall not use any materials or make
any claims in advertising, promoting or selling the Licensed
Products which have not gone through the Pre-Clearance Process and
received specific and entire written approval by DDMAC; provided,
however, that in the case of materials not accepted for review by
DDMAC, Distributor shall ensure that all such materials and the
claims and promotional messages therein; (a) are consistent with
the materials and claims that have gone through the Pre-Clearance
Process and received written approval by DDMAC and (b) comply with
all comments, direction and guidance given by DDMAC during the
Pre-Clearance Period. Distributor shall ensure that all promotional
programs and activities of all sales representatives promoting the
Licensed Products comply with any and all comments, direction or
guidance given by DDMAC during the Pre-Clearance Period. Upon
expiration of the Pre-Clearance Period, Distributor shall continue
to promote, detail, sell and advertise the Licensed Products in a
manner consistent with, and in full compliance with, all comments,
directions and guidance received from DDMAC. Distributor shall be
solely responsible for submitting all promotional and advertising
materials prepared by or for it to the FDA by way of a Form 2253 or
otherwise. MPL shall have the right to immediately terminate this
Agreement if; (i) Distributor shall fail to fully comply with the
requirements of this Section 3.02(b)(ii) or (iii) FDA issues a
Warning Letter or NOV with respect to any of the Licensed Products
at any time during or after the Pre-Clearance Period.
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Distributor acknowledges that MPL
has advised Distributor that MPL is not currently actively
promoting any of the Licensed Products in the Territory and has
never promoted its products in the Territory, and that MPL does not
have current materials designed for advertising or promoting the
Licensed Products in the Territory. MPL shall provide Distributor
with copies of any advertising, promotional or training materials
in its possession and previously used by MPL relating to the
Licensed Products, and shall permit Distributor, subject to
compliance by Distributor with Applicable Laws, to update, adapt
and use such materials in the Territory in developing new
promotional materials (subject to any copyrights or other rights
reserved to MPL, its Affiliates and to Third Parties in such
materials). MPL reserves and retains title and all rights,
including copyright rights, in and to all written, visual and
electronic works and other materials (including without limitation
training materials, promotion materials, brochures and other detail
literature) provided by it to Distributor under this Agreement.
Subject to the foregoing, Distributor is granted the nonexclusive
right under this Section to use, copy, modify, and distribute such
materials only for the purposes of this Agreement and in
furtherance of the rights granted to Distributor hereunder, for the
Term for any of the Licensed Products to which such works and
materials relate. Distributor shall ensure that all copyright
notices and this permission notice appear on all copies of the
written materials provided by MPL and all adaptations and
derivative works thereof. Any and all new promotional material
developed by Distributor, including that which adapts or utilizes
materials supplied to Distributor by MPL, shall be filed with FDA
at the time of initial dissemination via Form FDA-2253.
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Distributor shall have sole
authority and responsibility, at its sole expense, for conducting
independent and non-independent symposia, speaker training and
engagement programs, advisory board meetings and other consulting
arrangements, scientific exhibits and other types of scientific
exchange, and other such events or programs as Distributor, in its
sole discretion, deems to be appropriate with respect to the
Licensed Products within the Territory; provided, however, that any
and all such events and programs must comply in all respects with
Applicable Laws and relevant FDA policies, including without
limitation, the FDA's Guidance on Industry-Supported Educational
and Scientific Activities.
3.03
Use of Trademarks; Trade Dress . During the Term of this Agreement, and subject
to the terms and conditions of this Agreement:
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Distributor shall use the
Trademarks, on an exclusive royalty-free basis, to promote, market,
sell and distribute the Licensed Products within the Territory.
Distributor shall not identify the Licensed Products by any
designation other than the Trademarks for the Licensed Products.
With respect to all Licensed Products which bear Distributor's NDC
codes as provided herein, Distributor shall be identified as the
distributor of such Licensed Products on the Licensed Products'
label as the same may be required and specified under Applicable
Law, or if Applicable Law does not specify how the distributor
shall be indicated on a Licensed Products' label, then as
determined (including without limitation as to size and placement)
jointly by MPL and Distributor. The use of the Trademarks by
Distributor shall be expressly subject to subparagraph (c)
below.
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Distributor undertakes to use the
Trademarks only in respect of the Licensed Products purchased from
MPL or its designee pursuant hereto, only in accordance with the
standards of quality established or approved by MPL or its
designee, and only in the Territory. Distributor shall permit duly
authorized representatives of MPL to inspect, on the premises of
Distributor or its subcontractors and agents, at reasonable times
during normal business hours and upon not less than ten (10)
Business Days prior written notice, inventory of the Licensed
Products, Distributor's quality control records, and Distributor's
facilities used in or relating to the storage, distribution or sale
of the Licensed Products to ensure compliance with quality control
standards and with applicable terms of this Agreement pertaining to
the use of the Trademarks.
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Whenever Distributor uses the
Trademarks in advertising or in any other manner in connection with
the Licensed Products, Distributor shall clearly indicate that the
Trademarks are owned by the Molecular Pharmacology Limited (ACN 110
037 860). When using the Trademarks under this Agreement,
Distributor shall comply with all Applicable Laws pertaining to the
Trademarks in force at any time in the Territory. During the Term
of this Agreement, Distributor shall provide MPL with copies of
such foregoing material on a periodic basis, as requested by MPL,
for approval of the use of the Trademarks by Distributor.
Distributor shall promptly take any and all actions directed by MPL
with respect to Distributor's use of the Trademarks that are
reasonably designed to ensure compliance with the provisions of
this Section 3.03.
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Distributor acknowledges and agrees
that MPL and/or its Affiliates, is, and will remain the owner of
the Trademarks. Distributor shall not at any time do, cause to be
done, or permit any of its employees, agents, contractors and
subcontractors to commit any act inconsistent with, contesting or
in any way impairing, or tending to impair, such ownership.
Distributor agrees that all use of the Trademarks by Distributor
shall inure to the benefit of and be on behalf of MPL or its
Affiliates. Distributor acknowledges that nothing in this Agreement
shall give Distributor any right, title or interest in the
Trademarks other than the right to use the Trademarks within the
Territory in accordance with this Agreement. Distributor agrees
that it will not challenge MPL's or its Affiliates' title to, or
ownership of, the Trademarks, or attack or contest the validity of
the Trademarks. All goodwill accruing to the Trademarks as a result
of the use of the Trademarks in the performance of this Agreement
shall belong solely to MPL or its Affiliates. In the event that
Distributor acquires any rights in the Trademarks in connection
with Distributor's activities pursuant to this Agreement,
Distributor shall assign, and hereby does assign, to MPL or its
Affiliates all such rights, including any related
goodwill.
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Distributor is limited to using the
Trademarks in connection with the Internet as follows:
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the use must be in compliance with
local rules regarding advertising of pharmaceuticals on the
Internet;
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the use of any Trademarks as a
domain name is limited to the relevant country code domain within
the Territory. No license is granted to use the ".com generic code
domain" or any other such top-level domain. All domain names
containing the Trademark shall be registered and maintained by and
in the name of MPL or its designee;
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the use of any Trademarks as a
domain name is limited to use on websites with universal resource
locaters using the relevant country code domain within the
Territory and aimed at audiences in those countries in the
Territory;
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appropriate disclaimers must be
included in any website to the effect that it is intended for
residents in that country within the Territory only;
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in using any of the Trademarks as a
domain name or on the Internet, Distributor will not have and shall
not represent in any way that it has any title or right to the
ownership or registration or their use, except as provided in this
Agreement. Distributor will at all times indicate that each of the
Trademarks is a trademark of MPL used under license.
3.04
Trademark Infringement by Third Parties . If either Party becomes aware that a Third
Party is infringing any Trademark used in connection with the
Licensed Products, such Party shall give written notice to the
other Party describing in detail the nature of such infringement.
MPL and its Affiliates shall have the sole right, but not the
obligation, to enforce any such Trademarks against such Third Party
infringer to the extent deemed necessary or appropriate by MPL or
its Affiliates, in their reasonable discretion, and to settle or
compromise any such possible infringement by taking such action as
MPL or its Affiliates may determine in their sole and absolute
discretion; provided, however, that MPL shall not settle any such
potential infringement in a manner that materially adversely
affects the rights granted to Distributor hereunder, except with
Distributor's prior written consent (which consent shall not be
unreasonably withheld). Distributor shall provide MPL all
reasonable assistance (including, without limitation, making
documents and records available for review and copying, and making
persons within its control available for pertinent testimony), at
MPL's expense, in such enforcement.
3.05
Rebates . Distributor
shall process, administer and be financially responsible for all
rebates pursuant to any government rebate programs and all
commercial rebates, with respect to government claims for the
Licensed Products.
3.06
Medicaid Information . With respect to any of the Licensed Products
sold by Distributor after the Commencement Date which bears an NDC
number of MPL or any of MPL's Affiliates, Distributor shall deliver
to MPL (and to the extent necessary for Distributor to comply with
its Health Care Financing Administration reporting obligations, MPL
shall deliver to Distributor), within fifteen (15) days after the
end of each Calendar Quarter, the following information:
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the "best price" (as defined under
the Social Security Act, 42 USC ss. 1396r-8(c)(1)(C)) for each of
such Licensed Products, identified by NDC number, and
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the "average manufacturer price"
(as defined under the Social Security Act, 42 USC ss.
1396r-8(k)(1)) and the sales dollar amount as well as the number of
units for each of such Licensed Products, each identified by NDC
number.
Distributor agrees to provide to
MPL any additional data or other information required for the
calculation of the rebates contemplated in Section 3.05. Each party
agrees that the other party may use all information described in
this Section 3.06 in reporting to the Centers for Medicaid and
Medicare Services.
3.07
Federal Government Pricing Programs . Promptly after the Effective Date, MPL shall
notify the Health Care Financing Administration, the United States
Department of Defense, the Office of Drug Pricing and the Veteran's
Affairs National Acquisition Center (the foregoing being
hereinafter collectively referred to as the "Federal Programs") of
Distributor's distribution rights with respect to the Licensed
Products. Distributor shall establish its own contractual
relationships with the Federal Programs as soon as commercially
reasonable. !
3.08
Shipping and Distribution Obligations .
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From and after the Commencement
Date, MPL shall perform the following services for Distributor with
respect to the Licensed Products:
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MPL shall process orders for
Distributor for the first three (3) months of the Commencement
Period; provided, however, that Distributor receives all purchase
orders from customers and that all invoicing of customers shall be
done by Distributor; and
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MPL shall warehouse and ship the
Licensed Products during the first three (3) months of the
Commencement Period.
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Distributor may, at its sole
discretion, terminate the Commencement Period at any time before
the date that is nine (9) months after the Effective Date by
providing written notice to MPL within fifteen (15) Business Days
prior to such early termination of the Commencement
Period.
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MPL agrees and confirms that no
Licensed Products will be shipped, sold, distributed or released
during the Commencement Period prior to receipt of a certificate of
analysis for said Licensed Products as required under Section 6.02
herein below.
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The services to be provided by MPL
pursuant to this Section 3.08(a) shall be at its sole cost and
expense, it being understood and agreed, however, that the price
for Licensed Products during the Commencement Period reflects an
amount intended to compensate MPL in full for such
services.
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From and after the expiration of
the Commencement Period. From and after the expiration of the
Commencement Period, Distributor shall:
-
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ship and distribute the Licensed
Products to its customers; and
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warehouse the Licensed
Products.
Distributor agrees and confirms that no Licensed
Products will be shipped, sold, distributed or released after the
Commencement Period prior to receipt of a certificate of analysis
for said Licensed Products as required under Section 6.02 herein
below.
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From and after the Effective Date.
Commencing on Commencement Date and thereafter, Distributor
shall:
-
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invoice and bill the purchasers of
the Licensed Products from Distributor;
-
confirm all orders placed with
Distributor in accordance with Distributor's customary practices;
and
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collect the receivables resulting
from Distributor's sales of Licensed Products.
3.09
Pricing; From and after the Effective Date
. Distributor shall have the sole
authority to determine the prices of Licensed Products sold by it
during the Term and to establish its own pricing policy for the
Licensed Products within the Territory, including price increases
or decreases and the timing thereof as determined by Distributor.
Distributor will provide MPL not less than five (5) Business Days'
notice to MPL of any such price changes.
3.10
Sales Force .
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Distributor shall be solely
responsible for the costs and expenses of establishing and
maintaining its sales force and marketing functions for the
Licensed Products, and for conducting its other activities under
this Agreement, and, subject to the foregoing, shall have the sole
authority to control its sales force and direct the activities of
its sales force.
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All members of Distributor's sales
force (including management and representatives), and CSO sales
force personnel, if any, shall complete a Licensed Product-related
training program conducted by Distributor at its cost and expense.
All members of Distributor's sales force (including management and
representatives) and CSO sales force personnel, if any, must pass a
competency test with respect to the Licensed Products with a score
of ninety percent (90%) or higher. In connection with Distributor's
Licensed Product-related training program, MPL shall, to the extent
available and in MPL's possession provide Distributor with copies
of any training materials previously used in training sales
representatives in the Territory on the Licensed Products.
Distributor shall have the sole responsibility for any such
materials and for preparing additional and new materials for the
Licensed Products for sales training purposes as needed. Ongoing
training of Distributor's sales representatives and other personnel
shall be the responsibility of Distributor at its cost and expense.
The contents of any training provided by Distributor that relates
to the Licensed Products shall be developed and coordinated by
Distributor, and Distributor shall be solely responsible for
training its sales force (including management and sales
representatives) and CSO sales force personnel, if any, with regard
to Applicable Laws and directing such sales force and sales force
personnel to be compliant with Applicable Laws, regardless of
whether Distributor utilized MPL provided materials for
training.
3.11
Accounting Records .
Distributor shall keep full, true and accurate books of account
containing all particulars which may be necessary for the purpose
of showing Gross Receipts related to all sales of all Licensed
Products by Distributor and its sublicensees. Distributor's
complete books of account and supporting data therefor shall be
kept at its principal place of business for at least three (3)
years following the end of the calendar year to which they
pertain.
ARTICLE
4: MPL RESPONSIBILITIES
4.01
Supply of Licensed Products . In order to ensure the quality of the Licensed
Products to be sold by Distributor under the Trademarks,
Distributor shall purchase exclusively from MPL, and MPL shall
supply exclusively to Distributor, pursuant to Articles 5 and 6
hereof and subject to the other terms and conditions as set forth
in this Agreement, Distributor's entire requirements of Licensed
Products for marketing, sale and distribution by Distributor in the
Territory during the Term.
4.02
Retention of Licensed Product Registrations During the
Term.
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MPL shall have sole responsibility
for maintaining, and shall maintain, the Licensed Product
Registration in the Territory at its expense, including without
limitation filing NDA Annual Reports and paying all user fees,
product fees and establishment fees associated with the Licensed
Product Registrations in the Territory. MPL shall keep Distributor
informed on a timely basis as to any developments that would have a
material adverse effect on a Licensed Product Registration.
Distributor shall cooperate with MPL with respect to obtaining and
maintaining the Licensed Product Registrations, and shall execute,
acknowledge and deliver such further instruments at MPL's request
and expense, and use Commercially Reasonable Efforts to do all such
other acts, as promptly as possible, which may be necessary or
appropriate to obtain and maintain the Licensed Product
Registrations in the Territory. Distributor shall, on a timely
basis, provide to MPL all information that Distributor has from
time to time during the Term for each of the Licensed Products that
is reasonably necessary and relevant to MPL's obligations hereunder
to fulfill such Licensed Product Registration maintenance
requirements (including, but not limited to, providing sales
distribution information concerning the Licensed Products). MPL
shall have the final decision-making authority in every case on
whether and how to supplement, amend or otherwise alter the
Licensed Product Registrations and any other issues in connection
with such Licensed Product Registrations (including, but not
limited to, decisions, subject to Section 6.07, to recall the
Licensed Products) and on whether and how to communicate with the
FDA and other applicable governmental agencies or authorities in
connection with such Licensed Product Registrations.
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MPL and Distributor each shall make
its facilities available at reasonable times during business hours
for inspection by representatives of governmental agencies. MPL and
Distributor each shall notify the other within twenty-four (24)
hours (or, if such twenty-four (24) hour period ends on a day that
is not a Business Day, then prior to Noon on the next following
Business Day) of receipt, and provide a copy thereof, of any notice
of any FDA or other governmental agency inspection, investigation
or other inquiry, or other material governmental notice or
communication, relating to the manufacture, sale, marketing,
promotion, distribution, or use of the Licensed Products within the
Territory. Distributor and MPL shall cooperate with each other
during any such inspection, investigation or other inquiry.
Distributor and MPL shall discuss any response to observations or
notifications received in connection with any such inspection,
investigation or other inquiry and each shall give the other an
opportunity to comment upon any proposed response before it is
made; provided, however, that (i) MPL will not be required to
discuss with Distributor any issues specific to the manufacture of
the Licensed Products, or to obtain the consent or agreement of
Distributor with respect to issues related thereto; provided,
however, that MPL shall notify Distributor of any issues specific
to the manufacture of the Licensed Products that (A) could
reasonably be expected, in MPL's discretion, to have a material
affect on Distributor's ability to distribute Licensed Products in
the Territory, and (B) have regulatory implications that could
reasonably be expected, in MPL's discretion, have a material affect
on Distributor's ability to distribute Licensed Products in the
Territory, and (ii) Distributor shall be solely responsible for
responding to regulatory inquiries and actions from government
agencies relating to promotional activities and materials as
contemplated by Section 3.02. In the event of disagreement
concerning the form or content of such response, however, MPL shall
be responsible for deciding the appropriate form and content of any
response with respect to any of its governmental agency cited
activities and Distributor shall be responsible for deciding the
appropriate form and content of any response with respect to any of
its governmental agency cited activities.
Distributor and MPL will provide each other with copies of all
correspondence received by it from, or filed by it with, any
federal, state or local regulatory authority to the extent
pertaining to each of the Licensed Products or its , labeling,
packaging, distribution, promotion, advertisement, marketing or
sale in the Territory; provided, however, that Distributor shall
not provide copies of promotional materials or advertising of the
Licensed Products to MPL unless requested by MPL in writing. In
addition, MPL will provide Distributor copies of all material
correspondence received by MPL from, or filed by MP
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