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CONFIDENTIAL CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AMENDED AND RESTATED LICENSE, COMMERCIALIZATION AND SUPPLY AGREEMENT

Supply Agreement

CONFIDENTIAL CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AMENDED AND RESTATED LICENSE, COMMERCIALIZATION AND SUPPLY AGREEMENT You are currently viewing:
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INDEVUS PHARMACEUTICALS INC | ALLERGAN, INC | ESPRIT PHARMA, INC | INDEVUS PHARMACEUTICALS, INC

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Title: CONFIDENTIAL CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION AMENDED AND RESTATED LICENSE, COMMERCIALIZATION AND SUPPLY AGREEMENT
Governing Law: New York     Date: 9/21/2007

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EXHIBIT 10.1

 

CONFIDENTIAL

   Execution Copy

CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN FILED SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION

AMENDED AND RESTATED LICENSE,

COMMERCIALIZATION AND SUPPLY AGREEMENT

by and between

INDEVUS PHARMACEUTICALS, INC.

and

ESPRIT PHARMA, INC.

dated

September 18, 2007

 


TABLE OF CONTENTS

 

               Page
1.    D EFINITIONS    1
2.    G RANT OF R IGHTS    14
   2.1    Grants by Indevus    14
   2.2    Sublicenses of Third Party Rights    15
   2.3    Retained Rights; No Implied Licenses; Limitations    16
   2.4    Non-Competition    16
   2.5    Proposed Sublicense by Esprit    16
   2.6    Regulatory Filings    17
   2.7    Access to Information    18
   2.8    Grant by Esprit    18
   2.9    No Further Development by Indevus    18
3.    G OVERNANCE    19
   3.1    Development Committee    19
   3.2    Marketing Committee    20
   3.3    Supply Committee    22
   3.4    Meetings    24
   3.5    Minutes of Committee Meetings    24
   3.6    Disbanding of Committees    24
   3.7    Project Coordinators    25
4.    D EVELOPMENT AND R EGULATORY M ATTERS    25
   4.1    Development    25
   4.2    Regulatory Matters    25
5.    P ROMOTION OF P RODUCTS    29
   5.1    General    29
   5.2    Promotion Plan    30
   5.3    Target Prescribers; Product Advisors    30
   5.4    Esprit Promotional Activities    31
   5.5    Indevus Promotional Activities    31
   5.6    Promotional Materials and Activities    33
   5.7    Samples    35
   5.8    Training Program    35
   5.9    Additional Services and Assistance by Esprit    37
   5.10    Additional Personnel and Support    38
   5.11    Covenants of the Parties    38

 


6.    P AYMENTS AND S TATEMENTS    39
   6.1    Upfront and Milestone Payments    39
   6.2    Sublicensing Royalties, Minimum Royalties and Third Party Royalties    40
   6.3    Sales Force Reimbursement    44
   6.4    Reports and Payments    45
   6.5    Audits    47
   6.6    License to Dominating Patent    48
7.    R EPRESENTATIONS AND W ARRANTIES    48
   7.1    General Representations    48
   7.2    Additional Representations and Warranties of Indevus    49
   7.3    Additional Representations and Warranties of Esprit    51
   7.4    Disclaimer of Additional Warranties    51
   7.5    Limitation of Liability    51
8.    P ATENT M ATTERS    52
   8.1    Ownership    52
   8.2    Maintenance and Prosecution    52
   8.3    Third Party Infringement    53
   8.4    Third Party Intellectual Property    54
   8.5    Patent Term Extensions    54
   8.6    Conflict with Certain Existing Agreements    55
9.    T RADEMARK M ATTERS    55
   9.1    General    55
   9.2    Maintenance    55
   9.3    Use of Trademark    55
   9.4    Enforcement    55
   9.5    Avoidance of Confusion    56
   9.6    Trademark Security Interest    56
10.    A DVERSE E XPERIENCES    56
11.    C ONFIDENTIALITY AND P UBLICITY    57
   11.1    Non-Disclosure and Non-Use Obligations    57
   11.2    Permitted Disclosure of Proprietary Information    58
   11.3    Disclosure of Agreement to Governmental Authority    58
   11.4    Publications    59
   11.5    Other Public Statements    59
12.    T ERM AND T ERMINATION    60
   12.1    Term and Expiration    60
   12.2    Early Termination    60
   12.3    Rights Not Affected    61

 


   12.4    Effect of Expiration or Termination    62
13.    I NDEMNIFICATION AND I NSURANCE    63
   13.1    Indemnity    63
   13.2    Esprit Indemnification    63
   13.3    Indevus Indemnification    63
   13.4    Indemnification Procedure    64
   13.5    Defense of Claims    64
   13.6    Settlement of Indemnified Claims    65
   13.7    Product Liability Claims    65
   13.8    Insurance    67
14.    O RDERS AND S UPPLY    67
   14.1    Orders and Terms of Sale    67
   14.2    Misdirected Orders    67
   14.3    Product Returns    67
   14.4    Supply Obligations    68
   14.5    Forecasts for Products    68
   14.6    Purchase Orders    70
   14.7    Delivery    70
   14.8    Supply Price and Payments    71
   14.9    Conformity; Specifications; Quality Control    72
   14.10    Inspection; Non-conformance    73
   14.11    Inventory Management    74
   14.12    Shortages; Failure to Supply    74
   14.13    Assumption of Processing Activities    75
   14.14    Ex-US Supply Agreement    77
15.    M ISCELLANEOUS    77
   15.1    Force Majeure    77
   15.2    Assignment    77
   15.3    Severability    78
   15.4    Notices    78
   15.5    Specific Performance    79
   15.6    Applicable Law and Venue    80
   15.7    Entire Agreement    80
   15.8    Independent Contractors    80
   15.9    Waiver    80
   15.10    Headings; References; Interpretation    80
   15.11    Release    81
   15.12    Counterparts    81

 


THIS AMENDED AND RESTATED LICENSE, COMMERCIALIZATION AND SUPPLY AGREEMENT (the “ Agreement ”) is made as of September 18, 2007 (the “ Execution Date ”), and, except as otherwise specified herein, is to become effective on the Effective Date (as defined below), by and between INDEVUS PHARMACEUTICALS, INC. , a corporation organized and existing under the laws of the State of Delaware and having its principal office at 99 Hayden Avenue, Suite 200, Lexington, MA 02421, United States (“ Indevus ”), and ESPRIT PHARMA, INC. , a corporation organized and existing under the laws of the State of Delaware and having its principal office at 2 Tower Center Boulevard, East Brunswick, NJ 08816, United States (“ Esprit ”).

RECITALS

WHEREAS, Odyssey Pharmaceuticals, Inc. and Indevus entered into a certain License, Commercialization and Supply Agreement, effective as of April 6, 2004, as amended by Amendment No. 1 thereto, dated as of April 30, 2005, as further amended by the Amendment and Consent Agreement, dated as of May 14, 2005 by and among Indevus, Odyssey Pharmaceuticals, Inc. and Esprit (f/k/a Saturn Pharmaceuticals, Inc.) (collectively, the “ Original Agreement ”);

WHEREAS , pursuant to a certain Asset Purchase Agreement, effective as of May 14, 2005, Odyssey Pharmaceuticals, Inc. assigned to Esprit (formerly known as “Esprit Pharma Holding Company, Inc.” and prior to that “Saturn Pharmaceuticals, Inc.”) the rights of Odyssey Pharmaceuticals, Inc., and Esprit assumed the obligations of Odyssey Pharmaceuticals, Inc., in and under the Original Agreement;

WHEREAS , simultaneously with the execution of this Agreement, Esprit Pharma Holding Company, Inc. (“ Esprit Holding ”), the current parent company of Esprit is entering into an Agreement and Plan of Merger by and among Allergan, Inc., a Delaware corporation (“ Allergan ”), Andrew Einhorn, solely in his capacity as the Escrow Participants’ Representative, Esmerelde Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of Allergan, and Esprit Holding (the “ Merger Agreement ”);

WHEREAS , pursuant to the Merger Agreement, Esmerelde Acquisition, Inc. will merge with and into Esprit Holding, and Esprit Holding will survive the merger as a wholly-owned subsidiary of Allergan; and

WHEREAS , Indevus and Esprit desire to amend and restate the Original Agreement to reflect the agreements of the Parties to be effective as of the Effective Date or, as specifically set forth in Article 14, on the Execution Date, all on the terms and conditions set forth below.

NOW, THEREFORE , in consideration of the foregoing statements and the mutual agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indevus and Esprit hereby agree as follows:

 

  1. D EFINITIONS

Unless specifically set forth to the contrary herein, the following terms, where used in the singular or plural, shall have the respective meanings set forth below:

1.1Act ” means the United States Food, Drug, and Cosmetic Act of 1938, as amended, and the rules and regulations promulgated thereunder, or any successor act, as the same shall be in effect from time to time.

 


1.2Adverse Experience ” or “AE(s)” means adverse drug experiences, as defined by 21 CFR Section 314.80.

1.3Affiliate ” of a Party means (i) any corporation or business entity of which at least fifty percent (50%) of the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by a Party; (ii) any corporation or business entity which, directly or indirectly, owns, controls or holds at least fifty percent (50%) (or the maximum ownership interest permitted by law) of the securities or other ownership interests representing the equity, voting stock or general partnership interest of a Party; (iii) any corporation or business entity of which, directly or indirectly, an entity described in the immediately preceding subsection (ii) controls or holds at least fifty percent (50%) (or the maximum ownership interest permitted by law) of the securities or other ownership interests representing the equity, voting stock or general partnership interest of such corporation or entity; or (iv) any corporation or business entity of which a Party has the right to acquire, directly or indirectly, at least fifty percent (50%) of the securities or other ownership interests representing the equity, voting stock or general partnership interest thereof.

1.4Agreement Term ” has the meaning set forth in Section 12.1.

1.5Allergan ” has the meaning set forth in the Recitals.

1.6Annual Purchased Amount ” means, with respect to Finished Product and/or Samples of Trospium Twice-Daily the sum of (a) the amount of such Finished Product and/or Samples that is delivered to Esprit during any one (1) year period commencing on September 1, 2007 or an anniversary thereof plus (b) the amount of such Finished Product and/or Samples subject to accepted and open (non-cancelled) firm Purchase Orders submitted by Esprit and requesting delivery during the applicable annual period, in accordance with the terms and conditions of Article 14, if such Finished Product and/or Samples have not been delivered on a timely basis through no fault of Esprit.

1.7Batch ” means a specific quantity of Product or Compound that is produced in a process or series of processes according to a single manufacturing order during the same cycle of manufacture so that it is homogeneous within specified limits. The batch quantities are approximately * tablets for Trospium Twice-Daily and are estimated to be approximately * capsules for Trospium Once-Daily.

1.8Business Day ” means any day that is not a Saturday or a Sunday or a day on which the New York Stock Exchange is closed.

1.9Calendar Quarter ” means for each Calendar Year, each of the three (3) month periods ending March 31, June 30, September 30 and December 31; provided , however , that (a) the first Calendar Quarter of any particular period shall extend from the commencement of such period to the end of the first complete Calendar Quarter thereafter; and (b) the last Calendar Quarter shall end upon the expiration or termination of this Agreement.

 

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1.10Calendar Year ” means (a) for the first Calendar Year of the Agreement Term, the period beginning on the Effective Date and ending on (i) December 31, 2007 if the Effective Date occurs prior to December 31, 2007 or (ii) December 31, 2008 if the Effective Date occurs after December 31, 2007 and prior to December 31, 2008, (b) for each Calendar Year of the Agreement Term thereafter, each successive period beginning on January 1 and ending twelve (12) consecutive calendar months later on December 31, and (c) for the last Calendar Year of the Agreement Term, the period beginning on January 1 of the Calendar Year in which the Agreement terminates or expires and ending on the effective date of expiration or termination of this Agreement.

1.11Catalent Agreements ” means the (a) Manufacturing and Supply Agreement by and between Catalent Pharma Solutions LLC (“ Catalent ”) and Indevus, entered into as of September 17, 2007 and (b) Quality Agreement by and between Catalent and Indevus, entered into as of September 13, 2007; in each case, as in effect as of the Execution Date.

1.12CFR ” means the United States Code of Federal Regulations.

1.13cGMP ” means current Good Manufacturing Practice as defined in Parts 210 and 211 of Title 21 of the CFR, as may be amended from time to time, or any successor thereto.

1.14Claims ” has the meaning set forth in Section 13.2.

1.15Collateral ” has the meaning set forth in Section 2.6(b)(i).

1.16Commercially Reasonable Efforts ” means that degree of skill, effort, expertise, and resources normally used (including the promptness in which such efforts and resources would be applied) consistent with standards generally accepted in the pharmaceutical industry, with respect to the diligent development, manufacture and commercialization of pharmaceutical products of similar market and profit potential at a similar stage in development or product life as a Product in the Field.

1.17Competing Product ” means any product in the Field that contains Compound as one of its active ingredients *

1.18Compound ” means the chemical compound known as Trospium Chloride whose specific chemical name is 3-alpha-benziloyloxynortropane-8-spiro-1’-pyrrolidinium chloride, also known as spiro[8-azoniabicyclo[3,2,1]octane-8,1’-pyrrolidinium]-3-[(hydroxydiphenyl-acetyl)-oxy]chloride((1 µ , 3ß, 5 µ ))-(9Cl) and any related analogues, homologues, derivative and other pharmaceutically active salts.

1.19Control ” means possession of the ability to grant a license or sublicense as provided for herein without violating the terms of any agreement with any Third Party.

 

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1.20Copromotion Period ” means the period commencing on the Effective Date and expiring on (a) September 30, 2008, or (b) if extended by Indevus in accordance with Section 5.5(b)(ii), on December 31, 2008 or March 31, 2009, as applicable, or (c) the last day of any applicable Cure Period in which Indevus completes its Detail Obligations in accordance with Section 5.5(b)(ii) after the dates set forth in subsections (a) and (b) above.

1.21Cure Period ” means any two (2) consecutive Calendar Quarters immediately following a Deficient Quarter.

1.22Data ” means any and all research data, pharmacology data, preclinical data, clinical data and/or all other documentation submitted, or required to be submitted, to the FDA in association with an IND or NDA for a Product (excluding any Drug Master Files (DMFs), Chemistry, Manufacturing and Control (CMC) data, or similar documentation).

1.23Deficient Quarter ” means any Calendar Quarter in which the Indevus Sales Force fails to deliver * of the Quarterly Indevus Details applicable to such Calendar Quarter.

1.24Deploy ” means the act of designating a particular employee of Esprit or Indevus as a member of the Esprit Sales Force or Indevus Sales Force, as applicable, and the inception by such member of services to Detail the Products; provided , however , that no such member shall be Deployed without first satisfying the requirements set forth in Section 5.8.

1.25Detail ” means a face-to-face contact by a Representative with a Target Prescriber in an individual or group practice setting (not including dinner meetings, medical conventions, medical education meetings, Sample drops or incidental contacts that do not otherwise constitute a Detail as defined herein), and during which the FDA-approved indicated uses, safety, effectiveness, contraindications, side effects, warnings, and other relevant characteristics of a Product are described by the Representative in a fair and balanced manner consistent with the requirements of the Act and with FDA-approved Product information sheets, and using, as necessary or desirable, the Product Labeling and/or the Promotional Materials. When used as a verb, “ Detail ” shall mean to engage in a Detail.

1.26Development Committee ” has the meaning set forth in Section 3.1(a).

1.27Effective Date ” means the Effective Time (as such term is defined in the Merger Agreement).

1.28Esprit Sales Force ” has the meaning set forth in Section 5.4(a).

1.29Ex-US Supply Agreement ” means, if Indevus exercises the Ex-US Supply Option, the agreement to be effective as of the Processing Assumption Date between Indevus and Esprit pursuant to which Esprit shall supply Indevus or its designees with bulk capsules of Trospium Once-Daily prior to being in their finished, labeled and packaged form solely for use outside the Territory.

1.30Ex-US Supply Option ” has the meaning set forth in Section 14.14.

 

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1.31FDA ” means the United States Food and Drug Administration and any successor agency having substantially the same functions.

1.32FDA Approval ” means with respect to a Product in the Field, all authorizations by the FDA that are required for the marketing of such Product in the United States.

1.33Field ” means *

1.34Finished Product ” means Trospium Twice-Daily or Trospium Once-Daily, as applicable, in its finished, labeled and packaged form, ready for distribution in the Field in the Territory.

1.35Firm Commitment ” has the meaning set forth in Section 14.5(b)(ii).

1.36Force Majeure ” means, with respect to a Party, any fire, flood, earthquake, explosion, storm, blockage, embargo, war, acts of war (whether war be declared or not), terrorism, insurrection, riot, civil commotion, strike, lockout or other labor disturbance, failure of public utilities or common carriers, act of God or act, omission or delay in acting by any governmental authority or the other Party.

1.37Forecasted Supply Price ” has the meaning set forth in Section 14.8(b)(ii).

1.38GAAP ” means generally accepted accounting principles in the United States, consistently applied.

1.39Generic Competition ” shall be deemed to exist as of any date if Generic Products have a market share in the United States of * or greater of the total unit volume of Trospium Once-Daily in the United States (as so shown by the average of the monthly IMS (or IMS-equivalent) data) for the most recent Calendar Quarter ended prior to such date.

1.40Generic Product ” means any product containing Compound that is an AB rated equivalent to Trospium Once-Daily as defined in the 23rd edition of Approved Drug Products with Therapeutic Equivalence Evaluations issued by the United States Department of Health and Human Services, for which FDA Approval in the United States has been obtained *

1.41Helsinn Agreements ” means the (a) API Supply Agreement dated as of November 22, 2006 by and between Indevus and Helsinn Chemicals SA and Helsinn Advanced Synthesis SA (collectively, “ Helsinn ”) and (b) Quality Technical Agreement dated as of August 21, 2007 by and between Helsinn and Indevus; in case, as in effect as of the Execution Date and as amended from time to time during the Agreement Term.

1.42Improvements ” means all inventions and know-how, patentable or otherwise, made, created, developed, conceived or reduced to practice by or on behalf of a Party and/or any of its Affiliates during the Agreement Term, that have application or relate to Compound or Products for use in the Field, including developments in the manufacture, formulation, ingredients, preparation, presentation, means of delivery or administration, dosage,

 

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indication, methods of use or packaging and/or sale of Products in the Field, including a process for manufacturing a Product, an intermediate used in such process, a formulation of a Product in the Field, or a use or indication of a Product in the Field.

1.43IND ” means an Investigational New Drug application, as described in 21 CFR Section 312.23, obtained for purposes of conducting clinical trials in accordance with the requirements of the Act and the regulations promulgated thereunder, including all supplements and amendments thereto, relating to the use of Compound or a Product in the Field.

1.44Indevus Intellectual Property ” means Indevus Patent Rights and Indevus Know-How.

1.45Indevus Invention ” has the meaning set forth in Section 8.1.

1.46Indevus Know-How ” means all unpatented information and Data that are as of the Effective Date or become during the Agreement Term owned or otherwise Controlled by Indevus, including discoveries, Improvements, processes, formulas, inventions, know-how and trade secrets, to the extent necessary or useful for the development, manufacture, and/or commercialization of a Compound or Product in the Field. Indevus Know-How does not include any Patent Rights. Indevus Know-How also includes, other than marketing rights and marketing approvals transferred to Esprit on the NDA Transfer Date, all marketing authorizations and marketing approvals granted by the FDA (e.g., approved NDAs, INDs, and related applications and other forms of marketing authorization) to Indevus for the marketing of Products in the Field in the Territory. Such marketing authorizations and marketing approvals shall be deemed embodiments of Data and Indevus Know-How.

1.47Indevus Logo ” has the meaning set forth on Schedule 1.47.

1.48Indevus Patent Rights ” means all Patent Rights in the Territory that are as of the Effective Date or become during the Agreement Term owned or otherwise Controlled by Indevus and that generically or specifically claim, or are otherwise related to, the making, having made, use, offer for sale, sale or importation of Products in the Field or claim any Improvements in the Field made by Indevus, including Indevus’ interest in any Patent Rights in Joint Inventions.

1.49Indevus Sales Force ” means those Representatives Deployed by Indevus on a full-time basis and the field sales management supervising such Representatives.

1.50Indevus Target Prescribers ” means those Target Prescribers with whom, pursuant to the terms of this Agreement, the Indevus Sales Force conducts Primary Position Details and/or Secondary Position Details; provided that such Target Prescribers shall be determined from a list of Target Prescribers agreed to in writing between the Parties prior to the Effective Date, as such list may be amended from time to time with the prior written approval of both Parties.

1.51Initial Indication ” means the use of a Product in the treatment of overactive bladder and/or urinary incontinence.

 

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1.52Initial Purchase Order ” has the meaning set forth in Section 14.6.

1.53Joint Invention ” has the meaning set forth in Section 8.1.

1.54Launch Period ” means the period commencing on the date of launch of Trospium Once-Daily in the United States and expiring on the last day of the (a) fourth (4th) complete Calendar Quarter commencing after such launch date if such launch date is on or after the forty-fifth (45th) day of a Calendar Quarter or (b) third (3rd) complete Calendar Quarter commencing after such launch date if such launch date is prior to the forty-fifth (45th) day of a Calendar Quarter.

1.55Law(s) ” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the binding effect of law of any governmental authority.

1.56Losses ” means any and all damages (including all incidental, consequential, statutory and treble damages), awards, deficiencies, settlement amounts, defaults, assessments, fines, dues, penalties (including penalties imposed by any governmental authority), costs, fees, liabilities, obligations, taxes, liens, losses, lost profits and expenses (including court costs, interest and reasonable fees of attorneys, accountants and other experts) awarded or otherwise paid or payable to Third Parties.

1.57Madaus ” means Madaus GmbH, a successor to Madaus AG, a company with limited liability organized under the laws of Germany and having its principal office at Colonia-Allee 15, 51067 Cologne, Germany, and any successor thereto.

1.58Madaus Agreements ” means the Madaus Amendment, Madaus Compound Supply Agreement, Madaus License, Madaus License and Supply Agreement, and the Madaus Supply Agreement, as any of such agreements may be amended from time to time during the Agreement Term.

1.59Madaus Amendment ” means the Amendment and Agreement by and between Indevus and Madaus, made as of November 3, 2006, as in effect as of the Execution Date.

1.60Madaus Compound Supply Agreement ” means the Compound Supply Agreement by and between Indevus and Madaus, made as of November 3, 2006, as in effect as of the Execution Date.

1.61Madaus License ” means the License Agreement by and between Madaus and Indevus effective as of November 26, 1999, as in effect as of the Execution Date and as amended by the Madaus Amendment.

1.62Madaus License and Supply Agreement ” means the License and Supply Agreement by and between Indevus and Madaus, made as of November 3, 2006, as in effect as of the Execution Date.

 

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1.63Madaus Supply Agreement ” means the Supply Agreement by and between Indevus and Madaus, made as of December 16, 2002, as in effect as of the Execution Date.

1.64Marketing Committee ” has the meaning set forth in Section 3.2(a).

1.65Merger Agreement ” has the meaning set forth in the Recitals.

1.66Minimum Requirement ” has the meaning set forth in Section 14.5(b)(iii).

1.67Minimum Royalties ” means the minimum royalties payable to Indevus by Esprit in the applicable Calendar Year determined in accordance with the table set forth in Section 6.2(b)(i).

1.68Minimum Royalty Shortfall ” has the meaning set forth in Section 6.2(b)(i).

1.69NDA ” means a New Drug Application as defined in the Act that is submitted under Section 505 (b) of the Act to apply for FDA Approval.

1.70NDA Transfer Date ” means the earlier of (a) September 30, 2012 and (b) at Esprit’s sole election, the date, if any, that Indevus assigns its rights or obligations under this Agreement to another person or entity in connection with the transfer or sale of Indevus’ business or all or substantially all of its assets or in the event of a merger, consolidation, change in control or similar corporate transaction.

1.71Net Sales ” means the gross amount invoiced for all commercial sales of Finished Products to Third Parties in the Field in the Territory by Esprit and its Affiliates, less the following deductions actually allowed or taken in accordance with GAAP:

(a) credits or allowances actually granted for damaged or spoiled Finished Product, returns, recalls or rejections of such Finished Product, and retroactive price adjustments;

(b) normal and customary trade, cash and quantity discounts, allowances and credits actually allowed for such Finished Product;

(c) sales, value added, excise or similar taxes paid or allowed, or other governmental charges imposed upon the importation, use or sale of such Finished Product in the Territory;

(d) fees paid to Third Party distributors and legally allowed chargebacks, rebates or similar payments actually granted to customers with respect to such Finished Product, including managed health care organizations, wholesalers, distributors, buying groups, retailers, health care insurance carriers, pharmacy benefit management companies, health maintenance organizations or other institutions or health care organizations or to federal, state/provincial, local and other governments, their agencies and purchasers and reimbursers;

 

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(e) freight, postage, shipping and insurance charges related to delivery of such Finished Product; and

(f) any other items that reduce gross sales amounts as required by GAAP.

Sales or other transfers between Esprit and its Affiliates shall be excluded from the computation of Net Sales and no payments will be payable on such sales or transfers except where such Affiliates are end users, but Net Sales shall include the subsequent sales to Third Parties by such Affiliates.

1.72Original Agreement ” has the meaning set forth in the Recitals.

1.73Party ” means Indevus or Esprit.

1.74Patent Rights ” means any patents, patent applications, certificates of invention, or applications for certificates of invention and any supplemental protection certificates, together with any extensions, registrations, confirmations, reissues, substitutions, divisions, continuations or continuations-in-part, reexaminations or renewals thereof.

1.75PDMA ” means the United States Prescription Drug Marketing Act of 1987, as amended, or any successor act thereto, and the regulations promulgated thereunder from time to time.

1.76Phase IV Clinical Trials ” means a human clinical trial for a Product in the Field commenced after receipt of FDA Approval in the United States and that is conducted within the parameters of the FDA Approval for such Product. Phase IV Clinical Trials may include epidemiological studies, modeling and pharmacoeconomic studies, investigator sponsored clinical trials of such Product and post-marketing surveillance studies.

1.77Primary Position Detail ” means a Detail of a Product in the Field in which (a) such Product is the first product Detailed during a Detail to a Target Prescriber, (b) at least * of the total time of the Detail is spent on the presentation of such Product, and (c) the Representative delivers a message to the Target Prescriber in which key attributes of such Product are verbally promoted.

1.78Primary Training ” has the meaning set forth in Section 5.8(a).

1.79Prime Rate ” has the meaning set forth in Section 6.4(d).

1.80Processing Activities ” means the activities required to be undertaken by (a) Indevus or its Third Party Manufacturers in order to manufacture and supply Esprit with Trospium Once-Daily Finished Product and/or Samples prior to the Processing Assumption Date, and (b) in the event the Ex-US Supply Agreement is executed between the Parties, Esprit or its Third Party Manufacturers in order to manufacture and supply Indevus and/or its designees after the Processing Assumption Date with Trospium Once-Daily solely for use outside the Territory either in (i) bulk capsule form prior to being in its finished, labeled and packaged form or (ii) finished, labeled and packaged form.

 

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1.81Processing Assumption Date ” means the effective date of Esprit’s assumption of the Processing Activities of Indevus in accordance with the terms of Section 14.13, which date shall be agreed to by the Parties in writing, but in any event shall not be earlier than the Effective Date nor later than June 30, 2008.

1.82Product ” means any pharmaceutical preparation in final form (or, where the context so indicates, the form under development) containing Compound as a primary active therapeutic ingredient that, except for Samples thereof, requires a prescription from a physician or other health care professional, for use in the Territory.

1.83Product Adverse Event ” means the occurrence of any of the following: (a) Generic Competition; (b) any materially adverse change to a Trospium Once-Daily Product label such as an FDA-mandated addition of a “Black Box” warning on the Product Labeling of Trospium Once-Daily that is unique to such product among the class of anti-cholinergic drugs for the treatment of overactive bladder; (c) any recall or withdrawal of Trospium Once-Daily mandated by the FDA or reasonably initiated by a Party (other than actions arising out of or resulting from the manufacturing of Trospium Once-Daily on or after the Processing Assumption Date); (d) a determination by a court of competent jurisdiction that a patent owned by a Third Party is infringed by the manufacture, use, sale, offer for sale or importation of Trospium Once-Daily in the Territory; or (e) failure to deliver at least (i) * of Trospium Once-Daily Finished Product and Samples for receipt by Esprit or its designee by * ( provided that Esprit provides any modifications requested by Esprit to the trade dress for such Finished Product and Samples on or before *, and the FDA does not reject any such modifications to the trade dress, provided that, if Esprit does not provide such modifications or if the FDA rejects any such modifications to the trade dress, such delivery date shall be extended by a period of time equal to the period between * and the date upon which Esprit provides such modifications or the FDA approves such trade dress, as applicable), (ii) * (not including the * to be delivered by *, as described in subsection (i) above) of Trospium Once-Daily Finished Product and Samples by *, and/or (iii) * (not including the * to be delivered by *, as applicable, as described in subsections (i) and (ii) above) of Trospium Once-Daily Finished Product and Samples by *.

1.84Product Label(ing) ” has the same meaning as defined in the Act and as interpreted by the FDA.

1.85Product Liability Claims ” means any and all claims by purchasers or users of Products in the Field, or their family members, insurers, health care providers, subrogees or assignees, seeking damages for personal injury, death, expense, economic loss (including loss of value of such Products), or any other relief or remedy, arising out of or related to any alleged defect in the design, labeling, packaging or marketing of such Products, including a failure to warn.

1.86Product NDAs ” means the NDAs owned by Indevus as of the Effective Date relating to Trospium Twice-Daily (No. 21-595) and Trospium Once-Daily (No. 22-103), together with all amendments, supplements and updates thereto, as well as the corresponding INDs (with respect to Trospium Twice-Daily, IND 61,381, and with respect to Trospium Once-Daily, IND 71,305).

 

* CONFIDENTIAL TREATMENT REQUESTED

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1.87Product Procurement Costs ” means the costs associated with the manufacturing, purchasing, procurement and warehousing of Trospium Twice-Daily, Trospium Once-Daily and Compound, as applicable, and with any other Processing Activities, that are actually incurred by Indevus ( provided that in all cases such amounts are not included in, and do not form the basis of, any payments payable by Esprit to Indevus pursuant to Section 6.2(c)), including (a) costs associated with procuring active pharmaceutical ingredients and other materials used to manufacture Finished Products and/or Samples, (b) the cost of transportation, testing, inspections, shrinkage and scrap, related taxes (but in all cases excluding taxes based upon income or receipts), (c) the cost of storage, insurance and any subcontracted costs, and amounts payable to Third Party Manufacturers in connection with the manufacture and supply of Finished Products and/or Samples, including any fees related to minimum purchase requirements, (d) direct labor and, to the extent not in excess of (i)* for Trospium Once-Daily and Trospium Twice-Daily through the Processing Assumption Date, provided the aggregate production Batches do not exceed * through the Processing Assumption Date, and (ii) * annually thereafter for Trospium Twice-Daily provided aggregate annual production Batches do not exceed* (plus, solely with respect to this Section 1.87(d)(ii), the increase on * and each anniversary of such date in the Producer Price Index, Pharmaceutical Preparations (Series ID 325412325412) (as published by the U.S. Bureau of Labor and Statistics (http://www.bls.gov/ppi)) multiplied by such price ) , overhead costs, including an allocation for Indevus’ internal costs and expenses for supply chain management, including supply chain production planning, the formulation and placement of orders with Third Party Manufacturers, the management of inventories throughout the supply chain process, quality control/quality assurance, regulatory and Third Party Manufacturer oversight and cost accounting and including, with respect to Trospium Once-Daily Finished Product, and (e) an amount equal to the amounts payable by Indevus to Madaus pursuant to Section 3.7(b)(2) of the Madaus License ( provided that such amounts are not included in any payments payable by Esprit to Indevus pursuant to Section 6.2(c)).