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EXHIBIT 10.1
Confidential treatment has been requested
for portions of this Exhibit. The copy
filed herewith omits the information
subject to the confidentiality request.
Omissions are designated by ***. A complete
version of this exhibit has been
filed separately with the Securities and
Exchange Commission.
DISTRIBUTION AND SUPPLY AGREEMENT
BETWEEN
SPECTRUM PHARMACEUTICALS, INC.
AND
CURA PHARMACEUTICAL CO. INC.
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DISTRIBUTION AND SUPPLY AGREEMENT (this "Agreement") made as of the
13th
day of April, 2005 between SPECTRUM
PHARMACEUTICALS, INC., a Delaware
corporation with its principal offices at
157 Technology Drive, Irvine,
California, USA, 92618 (hereinafter called
"SPECTRUM") and CURA PHARMACEUTICAL
CO., INC., a New Jersey corporation with
its principal offices at 542 Industrial
Way West, Eatontown, New Jersey, USA, 07724
(hereinafter called "CURA").
Defined
terms used in this Agreement shall have the meanings set forth
in
Section 1 hereof, except as otherwise
provided herein.
WHEREAS,
SPECTRUM is engaged in the licensing, development and
commercialization of pharmaceutical products and wishes to market
a
certain
product in the Territory.
WHEREAS,
CURA is a distributor and seller of pharmaceutical products in
the
Territory and desires to obtain an exclusive right to,
distribute,
promote
and sell the product supplied by SPECTRUM in the Territory;
WHEREAS,
SPECTRUM has agreed, subject to the terms and conditions of the
Agreement,
to grant CURA the exclusive right to distribute the Product in
the
Territory and to supply to CURA on an exclusive basis in the
Territory
all of
CURA's requirements of the Product;
WHEREAS,
CURA has agreed, subject to the terms and conditions of the
Agreement,
to grant SPECTRUM the exclusive right to supply the Product to
CURA for
the Territory and to undertake the distribution of such Product
in the
Territory; and
WHEREAS,
in connection with the foregoing, CURA and SPECTRUM have agreed
to implement a
profit-sharing arrangement in respect of the sale and
distribution by CURA of the Product in the Territory.
NOW,
THEREFORE, the parties agree as follows:
1. DEFINITIONS.
For the
purposes of this Agreement the following terms have the
following
meanings:
1.1
"AFFILIATES"
shall mean (a) an entity controlled by a common parent
that owns more than fifty percent of the voting stock of both
such
entity and one of the parties to this Agreement and (b) such
parent
company.
1.2
"ANDA'S" shall
mean the Abbreviated New Drug Applications filed with
the FDA in connection with the Products.
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1.3
"APPROVED
PRODUCT" shall mean any Product that shall have been
granted all necessary approvals by all required Regulatory
Authorities to allow the sale and distribution by CURA or an
Affiliate of CURA of such Product in the Territory.
1.4
"BATCH", with
respect to any of the Products, shall mean a separate
and distinct quantity of such Product processed under continuous
and
identical conditions and designated by a batch number.
1.5
"CERTIFICATE OF
ANALYSIS" shall mean a document, which is dated and
signed by a duly authorized representative of the Quality Control
or
Quality Assurance Department of SPECTRUM, certifying that a Batch
of
any Product meets all Specifications.
1.6
"FDA" shall mean
the U.S. Food and Drug Administration, or any
successor body.
1.7
"FD&C ACT"
means the Federal Food, drug and Cosmetic Act of 1938, as
amended and the regulations thereunder, as the same may be
amended
or revised.
1.8
"FIRST APPROVAL
DATE" shall mean the date on which CURA or SPECTRUM
first obtains approval from a Regulatory Authority in the
Territory
to market a Product.
1.9
"FISCAL YEAR"
shall mean the twelve-month period commencing on
January 1st of each year and ending on December 31st, or any
other
twelve-month period designated as the fiscal year of CURA.
1.10
"CGMP" shall mean
current good manufacturing practices as required
by the rules and regulations of the applicable Regulatory
Authority.
1.11
"INDEPENDENT
LABORATORY" shall have the meaning set forth in Section
8.4 hereof.
1.12
"LAUNCH DATE", as to
each Approved Product, shall mean that date on
which marketing and distribution of such Approved Product shall
commence in the Territory.
1.13
"LAUNCH NOTICE" shall
have the meaning set forth in Section 6.1
hereof.
1.14
"LIAISON COMMITTEE"
shall have the meaning set forth in Section 3
hereof.
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1.15
"MANUFACTURING COST"
with respect to the Product shall mean [***].
Current actual costs that shall remain in effect for the first
year
of this contract are set forth on Schedule B.
1.16
"MANUFACTURING
PARTNER" shall mean a pharmaceutical manufacturer
selected and contracted by SPECTRUM to manufacture the Product
according to SPECTRUM'S specifications.
1.17
"NET PROFITS" with
respect to each of the Products shall mean the
Net Sales made by CURA of such Product less SPECTRUM's
Manufacturing
Costs in respect of such Product.
1.18
"NET SALES" in respect
the Product shall mean CURA's gross invoice
amounts on such sales of such Product by CURA and/or its
Affiliates
to third parties, less the following deductions reasonably and
properly incurred in the ordinary course of business and paid
or
given:
(a)
transportation cost to deliver Product from CURA to its
customer;
(b) trade,
quantity or cash discounts, service allowances and
independent brokers or agents' commissions, off-invoice
promotional discounts, rebates, volume reimbursements, if any,
given, allowed or paid, such amounts to be agreed to by the
parties prior to being given, allowed or paid by CURA;
(c) credits or
allowance for such Product, if any, given or made
on account of price and shelf adjustments, returns, bad debts,
charge backs, any and all federal, state or local government
rebates or discounts whether in existence now or enacted at
any time hereafter, and the gross amount bill for that
rejected Product or such Product recalled, seized or destroyed
(voluntarily (to be mutually agreed to by both parties) or at
the request of any government agency, subdivision or
department);
(d) any tax,
excise or other government charge upon or measured by
the production, sale, transportation, delivery or use of such
Product; and any surcharge, levy, tax or assessment mandated
by any federal, state or local government or administrative
agency to fund a compensation program or reserve for persons
injured by such Product; in each case determined in accordance
with CURA's customary accounting policies and practices in a
manner consistent with Generally Accepted Accounting
Principles in the United States.
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1.19
"OBJECTION NOTICE"
shall have the meaning set forth in Section 8.4
hereof.
1.20
"PRODUCT" shall mean
the product set forth on Schedule A.
1.21
"REGISTRATION" with
respect to the Product means the meeting of all
of the requirements of all applicable Regulatory Authorities
necessary to permit the commencement of manufacturing and
marketing
of such Product in the Territory by CURA or an Affiliate of
CURA.
1.22
"REGULATORY AUTHORITY"
means any and all bodies and organizations
regulating the manufacture, importation, distribution, use and
sale
of any of the
Products in the Territory.
1.23
"SPECTRUM'S FACILITY"
shall mean the facility or the facilities that
SPECTRUM shall contract to have the Product manufactured in for
sale
to CURA.
1.24
"SPECIFICATIONS" of
Product means the specifications for any Product
as agreed to by the parties and as approved by the applicable
Regulatory Authority. The Specifications may be amended from time
to
time by written agreement between the parties and as
specifically
requested by applicable Regulatory Authorities.
1.25
"TECHNICAL
INFORMATION" shall mean the manufacturing process and any
and all technical knowledge, trade secrets, analytical
methodology,
processes, manufacturing and toxicological information, and any
and
all other technical information or experience related to the
manufacturing of any of the Products.
1.26
"TERRITORY" shall mean
the U.S.
1.27
"U.S." means the
United States of America and its territories and
possessions.
2. APPOINTMENT OF CURA AS DISTRIBUTOR;
SUB-DISTRIBUTORS
2.1
SPECTRUM hereby
grants to CURA and CURA hereby accepts, the
exclusive right to distribute, promote and sell the Product in
the
Territory subject to the terms and conditions of this
Agreement.
CURA hereby grants to SPECTRUM and SPECTRUM accepts, the
exclusive
right to supply the Product to CURA for sale in the Territory
subject to the terms and conditions of this Agreement.
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2.2
CURA shall use
best efforts to promote, distribute and sell the
Product in and throughout the Territory and shall use best
efforts
to maintain a reasonably adequate level of stock of such Product
to
meet the market demand for such Product within and throughout
the
Territory.
2.3
CURA undertakes
and agrees that it will not sell any of the Product
directly or indirectly outside the Territory nor export any of
the
Product out of the Territory nor fill any orders for any of the
Product knowing that such orders are intended for sale outside
the
Territory.
2.4
Subject to the
limitations set forth in the following sentence, CURA
shall have the right to appoint any sub-distributor to
distribute,
market, promote and/or sell the Product within the Territory.
The
appointment of any sub-distributor shall be on such terms and
conditions as CURA may reasonably require in writing provided
such
terms and conditions are not inconsistent with the terms and
conditions of this Agreement. CURA agrees that it shall, at all
times, be solely responsible for the acts, deeds or omissions of
any
sub-distributor appointed pursuant to this subsection 2.4.
Notwithstanding the foregoing, (a) the appointment of a
sub-distributor shall not in any way diminish, reduce or
eliminate
any of CURA's obligations under this Agreement, and CURA shall
remain primarily liable for all such obligations; and (b) prior
to
entering into an agreement with a sub-distributor, CURA shall
notify
SPECTRUM of the proposed agreement, including the name of the
proposed sub-distributor.
3. LIAISON COMMITTEE
From time to time as reasonably agreed to by the parties, and
at
least once each calendar quarter from the date hereof, SPECTRUM
and
CURA shall meet and confer with each other concerning, among
other
things, the manufacture and marketing of the Product, the pricing
of
the Product and any deductions or allowances allowed or paid
that
affect Net Sales. SPECTRUM and CURA each shall be represented
at
such meetings by not more than three (3) representatives, who,
collectively, shall constitute a "Liaison Committee."
4. MANUFACTURE AND SUPPLY OF THE PRODUCTS
BY SPECTRUM
4.1
SPECTRUM shall
cause a Manufacturing Partner, to manufacture the
Product to supply such Product to CURA, pursuant to the binding
forecasts and purchase orders placed by CURA in accordance with
Section 6 hereof, at SPECTRUM's current Manufacturing Cost of
such
Product as set forth on Schedule B for the first year of the
contract and then, as provided in Section 7 hereof.
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4.2
Notwithstanding
any other provision in this Agreement to the
contrary:
(a) SPECTRUM
shall have the option of terminating the supply of
the Product to CURA; and
(b) CURA shall
have the option of discontinuing the marketing of
the Product in the Territory, at any time, in the event that,
in both parties reasonable judgment, the parties mutually
conclude, as the case may be, that continuing to market such
Product will be commercially unprofitable. In the event that
SPECTRUM elects to terminate the supply of the Product or CURA
elects discontinue the marketing of the Product, then such
party, upon [***] days written notice to the other party,
shall have no further liability to the other in respect
thereto other than remittance of respective share of profits
from continued sales of Product during this period or from
remaining inventory of Product which the parties may agree to
continue active selling after the [***] day period. In
addition, notwithstanding the above, CURA shall be obligated
to take delivery of and market (and may not return to
SPECTRUM) any amounts of Product included in the last binding
forecast provided to SPECTRUM prior to the election to
discontinue marketing the Product.
5. LABELING
Subject to
CURA's fulfillment of its obligations set forth in the
immediately following sentence of this Section 5, SPECTRUM shall
package
and label
the Approved Product in accordance with the specifications
approved
by the FDA in issuance of the ANDA. CURA shall supply trade
dress
and other
necessary information requested by SPECTRUM that is required
for
labeling.
SPECTRUM shall be fully responsible for the form and content of
the
Product label and other aspects of Product packaging and
labeling,
except to
the extent of content supplied by CURA.
6. FORECASTS, ORDERS, DELIVERY AND PURCHASE
OBLIGATIONS.
6.1
When both
parties agree that Registration of the Products is likely
to be imminent, the parties shall meet and agree upon an
estimated
Launch Date in respect of such Approved Product. Thereafter,
CURA
shall send to SPECTRUM a notice (the "Launch Notice") with
respect
to such Product that shall contain the following:
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(a) a statement
of the estimated Launch Date of such Product; and;
(b) a purchase
order for such Product to be purchased by CURA,
prior to the Launch Date, in respect of such Product.
6.2
On the first day
of each calendar quarter commencing after the
Launch Date of each Approved Product, CURA shall provide to
SPECTRUM
a forecast of the amount of such Product to be ordered for
delivery
during each of the [***] following the date of the forecast.
The
amounts forecasted for [***] in such forecast shall be a
binding
purchase obligation of CURA. CURA shall use best efforts to make
the
subsequent [***] in the forecast as accurate as possible.
6.3
SPECTRUM shall
not be required to supply during any particular
Quarter more than [***] of the most recent forecasted amount
for
such quarter, but will use all reasonable efforts to supply the
full
amount ordered.
6.4
CURA shall place
a written purchase order with SPECTRUM for the
quantity and the delivery date of the Product that it desires
to
purchase under this Agreement for commercial use; provided,
however,
that where in conflict with the terms and conditions of this
Agreement, this Agreement, and not such standard terms and
conditions set forth in the purchase orders, shall govern the
purchase and sale of the Product under this Agreement. CURA
agrees
to place such purchase orders at least [***] days in advance of
the
specified delivery date, unless otherwise agreed to by the
parties.
Upon its receipt and acceptance of each such order, SPECTRUM
shall
use its best efforts to fulfil the order as requested. Unless
SPECTRUM delivers a written objection to a purchase order
within
[***] of its receipt of such order, the purchase order shall be
deemed accepted. The purchase orders placed by CURA must be
consistent
with the binding forecasts provided under Section 6.2
above.
6.5
SPECTRUM will
retain title and risk of loss to all Product until
delivered FOB ex SPECTRUM's Facility or such other place or
places
as may be
mutually agreed by the parties. Thereafter, CURA will have
the title and risk of loss of all Product.
6.6
Both parties
shall mutually agree on the price at which CURA shall
sell the Approved Product in the Territory.
6.7
Should SPECTRUM
fail to supply product on an agreed upon delivery
date, and CURA suffers financial loss due to SPECTRUM's or
SPECTRUM'S Manufacturing Partner's failure to supply as a result
of
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sales contracts or other sales agreements that Cura has entered
into, SPECTRUM will reimburse Cura for these financial losses.
Reimbursement shall be in U.S. currency and shall be issued
immediately upon Cura's supplying SPECTRUM with written proof
of
financial loss due to SPECTRUM's or SPECTRUM'S Manufacturing
Partner's failure to supply product on specified delivery dates.
As
a condition to SPECTRUM's obligation under this Section 6.7,
CURA
shall use best efforts to try to avoid any financial loss by
renegotiating the sales contracts or other sales agreements for
new
delivery dates.
7. PRICE AND PAYMENT
7.1
CURA and
SPECTRUM shall divide the Net Profits earned in connection
with the sale and distribution of the Approved Product with
[***]
percent ([***]%) of the Net Profit to be distributed to SPECTRUM
and
[***] percent ([***]%) of the Net Profit to be distributed to
CURA
until SPECTRUM'S cumulative share of the net profit shall reach
the
total of [***] U.S. dollars. When SPECTRUM's cumulative share of
the
Net Profit reaches the [***] dollar milestone a new formula for
the
division of the Net Profit will be instituted so that SPECTRUM
receives [***] percent ([***]%) of the Net Profit and CURA
receives
[***] percent ([***]%) of the Net Profit. SPECTRUM shall not be
responsible for any share of any net loss should Manufacturing
Costs
exceed Net Sales.
7.2
Starting in the
second year of the contract when the current
Manufacturing Cost set forth on Schedule B expires, not later
than
[***] days after the close of each [***], commencing with the
first
such [***] in the second year which Approved Product is delivered
to
CURA, SPECTRUM shall calculate its Manufacturing Costs and
shall
provide CURA with such calculations, including a statement
setting
forth in detail by category the amounts used to calculate
Manufacturing Costs for such [***].
7.3
Within [***]
days from the close of each [***], commencing with the
first such [***] in which funds are actually collected by CURA
in
respect of the commercial sale and distribution of the Approved
Product, CURA shall submit to SPECTRUM a written statement (the
"[***] Net Profit Statement") in the form set forth on Schedule
C
hereto, showing the share of Net Profits and Manufacturing Costs
due
to SPECTRUM, and shall deliver to SPECTRUM by wire transfer its
share of the Net Profit amount shown as due and payable to
SPECTRUM.
Notwithstanding the foregoing, CURA shall deliver to SPECTRUM
by
wire transfer the Manufacturing Costs due SPECTRUM within [***]
days
after Product is delivered to CURA FOB ex SPECTRUM's factory.
This
amount is non-refundable. Along with that
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first [***] Net Profit Statement for the [***] that funds were
first
collected, CURA shall provide the [***] Net Profit Statements
and
the corresponding payments for those [***] that passed before
funds
were collected.
7.4
Not later than
[***] days following the close of each Fiscal Year,
CURA shall deliver a written statement (the "Final Net Profit
Statement"), in the form set forth on Schedule D hereto.
7.5
To the extent
that, as a result of final adjustments reflected in an
annual audit statement to be performed by an auditor chosen by
SPECTRUM and reasonably acceptable to CURA, (a) CURA has
underpaid
to SPECTRUM its share of the Net Profits in respect of such
Fiscal
Year, then CURA, within [***] of delivering such annual audit
statement to SPECTRUM, shall promptly pay to SPECTRUM by wire
transfer the amount of such short-fall, or (b) CURA has overpaid
to
SPECTRUM its share of the Net Profits in respect of such Fiscal
Year, then SPECTRUM, within [***] of CURA's delivery of such
annual
audit Statement to SPECTRUM shall pay to CURA by check, the
amount
of such over-payment. In addition, starting in the second year
of
the contract when the current Manufacturing Cost set forth on
Schedule B expires, CURA shall have the right, once annually and
at
its own cost, during regular business hours, upon giving
reasonable
prior written notice to SPECTRUM to have an independent
professionally qualified auditor, reasonably approved by
SPECTRUM,
audit SPECTRUM'S records relative to SPECTRUM'S calcula
