EXHIBIT 10.1
TERMINATION AND ASSIGNMENT
AGREEMENT
This Termination and
Assignment Agreement (the “ Agreement ”) is made
and entered into this 5 th day of July 2007, by and
between Depomed, Inc. (“ Depomed ”), a
California corporation having an address at 1360 O’Brien
Drive, Menlo Park, California 94025, and Esprit Pharma, Inc.,
(“ Esprit ”), a Delaware corporation having an
address at 2 Tower Center Boulevard, East Brunswick, New Jersey
08816.
RECITALS
A.
Depomed and Esprit are parties to: (i) that certain Exclusive
License and Marketing Agreement dated July 21, 2005, as amended by
Amendment No. 1 to Exclusive License and Marketing Agreement dated
July 24, 2006 (together, the “ License Agreement
”), (ii) that certain Supply Agreement dated July 21, 2005
(the “ Supply Agreement ”) and a related Quality
Agreement, dated as of April 6, 2007 (the “ Quality
Agreement ”) and (iii) that certain Co-Promotion
Agreement dated July 24, 2006 (the “ Co-Promotion
Agreement ” and together with the License Agreement,
the Supply Agreement and the Quality Agreement, the “
ProQuin® XR Agreements ”). Capitalized
terms used herein without definition shall have the meanings
ascribed to them in the License Agreement.
B.
The Parties desire to terminate the ProQuin® XR Agreements on
the terms set forth herein.
It is therefore agreed
as follows:
1.
DEFINITIONS
The terms defined in
this Article 1 shall, for all purposes of this Agreement, have the
following meanings:
“ Active
Ingredient ” means the chemical compound known as
ciprofloxacin hydrochloride.
“
Affiliate ” means any corporation or other entity that
directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with the
designated Party but only for so long as such relationship
exists. For the purposes of this section, “
Control ” means ownership of at least fifty percent
(or such lesser percent as may be the maximum that may be owned by
foreign interests pursuant to the laws of the country of
incorporation) of the shares of stock entitled to vote for
directors in the case of a corporation and at least fifty percent
(or such lesser percent as may be the maximum that may be owned by
foreign interests pursuant to the laws of the country of domicile)
of the interests in profits in the case of a business entity other
than a corporation.
“ Call
” means a face-to-face contact between a member of
Esprit’s sales force and a prescriber or potential prescriber
of Licensed Product during which relevant characteristics of
Licensed Product are described by the member of Esprit’s
sales force.
“
Distribute ” or “ Distribution ”
means the distribution of, and fulfillment of customer orders for,
Licensed Product, as well as the distribution of samples of
Licensed Product.
“ Effective
Date ” means the date first referred to above.
“ Esprit
Change of Control ” means (i) the acquisition by any
person or group (as defined in Section 13(d)(3) or 14(d)(2) of the
Securities and Exchange Act of 1934, as amended) of direct or
beneficial ownership (as defined in Rule 13d-3 under the Securities
and Exchange Act of 1934, as amended) of more than fifty percent of
the voting stock of Esprit; (ii) any merger, amalgamation or
consolidation of Esprit or an Affiliate of Esprit with another
corporation or other entity in which the stockholders of Esprit,
immediately prior to such amalgamation, consolidation, or merger,
own less than fifty percent of the voting stock of the surviving
corporation immediately after such transaction; or (iii) the sale
or exclusive license of substantially all of the assets of
Esprit. Notwithstanding the foregoing, for purposes of Esprit
Licensed Product detailing obligations referred to in Section 6.2
below, an Esprit Change of Control does not include any transaction
or series of related transactions between Esprit and any existing
stockholder of Esprit that would otherwise constitute an Esprit
Change of Control.
“ Esprit NDC
Number ” means any of the following NDC numbers related
to Licensed Product Distributed by Esprit on or before the
Effective Date: (i) NDC No. 1545600103, which corresponds to
the three tablet blister pack commercial presentation of Licensed
Product Distributed by Esprit; (ii) NDC No. 1391300150, which
corresponds to the fifty count bottle of Licensed Product
Distributed by Esprit; (iii) NDC No. 1545600150, which corresponds
to a fifty count bottle of Licensed Product; (iv) NDC No.
1545600199, which corresponds to the three tablet blister pack
sample presentation of Licensed Product Distributed by Esprit to
prescribers of Licensed Product.
“ FDA
” means the United States Food and Drug Administration or any
successor United States governmental agency performing similar
functions with respect to pharmaceutical products.
“ IND
” means an Investigational New Drug Application filed with
the FDA.
“ Licensed
Product ” means the once-daily oral tablet formulation
that contains Active Ingredient, is known as ProQuin® XR, and
is approved in the Territory under NDA No. 21-744 filed with the
FDA on July 18, 2004 (as such NDA may be amended or supplemented
subsequent to the Effective Date).
“ Market
” means to promote, Distribute, market, advertise, sell or
offer to sell.
“ NDA
” means a New Drug Application or application for approval to
market submitted to the FDA.
“ Party
” means Depomed or Esprit, and “ Parties ”
means both Depomed and Esprit and their Affiliates.
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“ Proprietary
Information ” means any and all scientific, clinical,
regulatory, marketing, financial and commercial information or
data, whether communicated in writing, orally or by any other
means, which is owned and under the protection of one Party and is
provided by that Party to the other Party in connection with this
Agreement.
“ Regulatory
Approval ” means the permission or consent granted by the
FDA for the Marketing of the Licensed Product in the
Territory.
“ Regulatory
Data ” means data including, but not limited to, medical,
toxicological, pharmacological and clinical data to the extent
necessary to, required for, or included in any governmental
regulatory filing to obtain or maintain Regulatory Approval to
Market the Licensed Product, including post-approval reports,
filings and submissions.
“ Third
Party(ies) ” means a person or entity who or which is
neither a Party nor an Affiliate of a Party.
“
Trademark(s) ” means the Proquin® trademark, U.S.
Registration No. 2,968,719, and all related domain names identified
on Exhibit A , and other common law trademark rights related
thereto.
“ Voided
Payment ” means any payment by Esprit under this
Agreement that is subsequently invalidated, declared to be
fraudulent or preferential or set aside or is required to be repaid
to a trustee, receiver or any other party, under any bankruptcy,
insolvency, reorganization or similar act or law, state, federal or
foreign law, common law or equitable cause.
2.
TERMINATION OF PROQUIN® XR AGREEMENTS
2.1
Termination of Supply Agreement and Quality Agreement
. The Supply Agreement is hereby terminated in its entirety,
provided that the rights and obligations identified in Section 16.3
of the Supply Agreement shall survive such termination as and to
the extent set forth in such Section 16.3. In addition, the
Quality Agreement is hereby terminated in its entirety.
2.2
Termination of Co-Promotion Agreement . The
Co-Promotion Agreement is hereby terminated in its entirety,
provided that the rights and obligations provided in Section 10 and
Section 11 shall survive such termination as provided in Section
10.2 and Section 11.2.
2.3
Termination of License Agreement . The License
Agreement is hereby terminated in its entirety, provided that the
rights and obligations identified in Section 20.6 of the License
Agreement shall survive such termination.
2.4
Conflicting Terms . Notwithstanding the provisions of
the foregoing Sections 2.1, 2.2 and 2.3, to the extent that any
surviving rights and obligations of the Parties under the
ProQuin® XR Agreements directly conflict with the express
rights and obligations of the Parties provided herein, the terms of
this Agreement shall govern.
2.5
Mutual Releases . Each of the Parties, by and for
itself and on behalf of its employees, agents, other
representatives, officers, directors, stockholders, partners,
members, Affiliates, subsidiaries, predecessors, successors, and
assigns, fully releases and discharges the
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other Party and its
employees, agents, other representatives, officers, directors,
stockholders, partners, members, Affiliates, subsidiaries,
predecessors, successors, and assigns, from any and all claims,
rights, demands, liabilities, obligations, damages, actions, and
causes of action, of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of any act, omission, event,
transaction or occurrence on or before the Effective Date that
relates to (a) the Licensed Product, and/or (b) the Proquin®
XR Agreements; provided that this release (x) shall not affect the
surviving rights and obligations under the Proquin® XR
Agreements as set forth in Section 2.1, Section 2.2, or Section
2.3, or any rights and obligations under this Agreement (and the
exhibits hereto), and (y) shall cease to be effective as a release
of Esprit in the event of a Voided Payment.
3.
PAYMENT OBLIGATIONS
3.1
Certain Payments . Esprit shall make the following
termination payments to Depomed on the Effective Date, by wire
transfer of immediately available funds to a Depomed account
pursuant to wire transfer instructions provided to Esprit by
Depomed on or before the Effective Date:
(a) Ten
Million Dollars ($10,000,000), representing the license fee payable
by Esprit on or before July 21, 2007, pursuant to the License
Agreement;
(b) Two
and One-Half Million Dollars ($2,500,000), representing of one-half
of the minimum royalty on Licensed Product for 2007 pursuant to the
License Agreement; and
(c)
Five Million Dollars ($5,000,000), representing a termination
fee.
4.
INTELLECTUAL PROPERTY MATTERS; PRODUCT
DOCUMENTATION
4.1
Termination of Rights and Licenses; Reversion of Rights
. Without limiting the generality of Section 2, all of
Esprit’s rights and licenses under the following Sections of
the License Agreement shall, as of the Effective Date, terminate,
and all rights and licenses granted therein shall immediately and
automatically revert to Depomed: Sections 2.1, 2.2, and
4.1.
4.2
Ownership of Intellectual Property . Esprit hereby
represents and warrants to Depomed that: (i) to the best of
Esprit’s knowledge, none of Esprit’s employees, agents,
or other persons acting under its authority, developed, conceived
or reduced to practice any inventions, discoveries or know-how
relating to the Licensed Product, including formulations thereof,
or methods of making or using same, or Improvements thereof during
the term of, or in the course of performance of, any of the
ProQuin® XR Agreements (collectively, “
Inventions ”), (ii) that in the event that any
Inventions were so developed, conceived or reduced to practice by
any such parties, Esprit does hereby assign all of its right, title
and interest therein to Depomed and (iii) that in the event that
Esprit becomes aware of the existence of any such Inventions, it
will provide prompt written notice to Depomed of same, including
without limitation, a written description of such Invention, and it
will take such actions as Depomed shall reasonably request to
evidence such assignment and to enable Depomed to understand and
exploit such Invention.
4.3
Product Documentation . Esprit hereby assigns
to Depomed Esprit’s right, title and interest in and to any
and all promotional or other materials or documents (including
sales
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and training materials,
website, marketing documents) related to the Licensed Product,
including without limitation any such materials created for Esprit
by or on behalf of Esprit’s agents, consultants or
vendors. Copies of all such materials in Esprit’s
possession or control shall be delivered to Depomed (including
without limitation in electronic form) as contemplated by the
Transition Plan.
5.
REGULATORY MATTERS; RECALLS
5.1
Transfer of Regulatory Approvals; Notification to FDA
. Esprit hereby assigns to Depomed all of Esprit’s
right, title and interest in and to any and all Regulatory Data,
Regulatory Approvals and other filings with or approvals granted by
any and all agencies or authorities of the United States federal
government and any state or local agencies or authorities that
pertain or relate to the Licensed Product. On the Effective
Date, Esprit shall send executed letters in substantially the forms
attached hereto as Exhibit B-1 and Exhibit B-2 to FDA
authorizing the transfer of the NDA and the IND for the Licensed
Product to Depomed.
5.2
Regulatory Records . On the Effective Date, Esprit
shall deliver to Depomed all files and documents in Esprit’s
possession or control as of such date relating to the approvals or
filings described in Section 5.1, a chronology of discussions with
FDA relating to the Licensed Product, and other information in
Esprit’s possession or control as of such date necessary to
maintain compliance with the US regulatory authorities.
5.3
Communication with Regulatory Authorities; Product
Complaints . From and after the effective date of the
transfer by Esprit to Depomed of the IND and NDA for the Licensed
Product as described in Section 5.1, Depomed shall have the sole
right and obligation to: (i) take all actions and conduct all
communications with the appropriate US regulatory authorities in
respect of such IND and NDA, including preparing and filing all
reports (including adverse drug experience reports) with the
appropriate US regulatory authorities; (ii) take all actions and
conduct all communications with Third Parties (including without
limitation patients, pharmacists, physicians and other health care
providers) in respect of Licensed Product sold pursuant to such NDA
(whether sold before or after the Effective Date), including
responding to all complaints in respect thereof, including
complaints related to tampering or contamination; (iii) investigate
all complaints and adverse drug experiences in respect of Licensed
Product sold pursuant to such NDA (whether sold before or after the
Effective Date); and (iv) respond to any inquiry related to the
Licensed Product directed to Esprit from and after the Effective
Date from any governmental health authority (including without
limitation the FDA and any state, county or other health
authority). Following the Effective Date, as provided in the
Transition Plan, Esprit will promptly notify Depomed’s
Regulatory Affairs department in accordance with applicable laws
and regulations, and in reasonably sufficient time to allow Depomed
to make any filings with, or notification to, governmental
authorities within the time periods required by law, of any inquiry
(written or verbal) received by Esprit related to any of the
foregoing, including without limitation any inquiry received by
Esprit with respect to the Licensed Product (either commercial drug
product or commercial samples) bearing Esprit’s name on the
container-closure. Esprit shall cooperate with
Depomed’s reasonable requests and use commercially reasonable
efforts to assist Depomed in connection with any of the
foregoing.
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5.4
Adverse Event Reporting . From and after the Effective
Date, as provided in the Transition Plan, Esprit shall promptly
(and in any event, in reasonably sufficient time to allow Depomed
to make any filings with, or notification to, governmental
authorities within the time periods required by law) notify Depomed
if Esprit receives a complaint or a report of an adverse drug
experience in respect of the Licensed Product. In addition,
through December 31, 2007, Esprit sh
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