EXHIBIT 10.1
Amended & Restated
Pernix – Macoven Pharmaceuticals
Agreement
This amended and restated agreement (this “AGREEMENT”) is made this 22nd day of June, 2010 by and between Pernix Therapeutics, LLC (“Pernix”), a Louisiana limited liability company having an office at 33219 Forest West Street, Magnolia, Texas 77354 and Macoven Pharmaceuticals, L.L.C. (“Macoven Pharmaceuticals”), a Louisiana limited liability company. Pernix and Macoven Pharmaceuticals may be collectively referred to as the “Parties.”
RECITALS:
WHEREAS, Pernix and Macoven Pharmaceuticals entered into that certain Pharmaceuticals Agreement on July 27, 2009 (the “Original Agreement”);
WHEREAS, in accordance with the terms of the Original Agreement, Pernix paid Macoven Pharmaceuticals a one-time development fee in the amount of $1,500,000.00 (the “DEVELOPMENT FEE”);
WHEREAS, Macoven Pharmaceuticals currently promotes various GENERIC PRODUCTS (as hereinafter defined); and
WHEREAS, the Parties desire to amend and restate the terms of the Original Agreement to clarify that for as long as this Agreement is in effect, 100% of NET SALES (as hereinafter defined) from the sale of GENERIC PRODUCTS by Macoven Pharmaceuticals shall be the sole and exclusive property of Pernix.
NOW THEREFORE, in consideration of the promises and of the mutual covenants and agreements herein contained, receipts and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:
1. DEFINITIONS
| 1.1. | “ACTION OR PROCEEDING” means any action, suit, proceeding, arbitration, order, inquiry, hearing, assessment with respect to fines or penalties, or litigation (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any governmental or regulatory authority. |
| 1.2. | “APPLICABLE LAWS” means all applicable statutes, ordinances, regulations, rules or orders of any kind whatsoever of any government authority or court of competent jurisdiction, including, without limitation, the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §301 et seq.). |
| 1.3. | “GENERIC PRODUCTS” means all generic products based on or derived from PERNIX PRODUCTS that are developed, marketed and sold under the terms of this Agreement, as may be authorized by Pernix and set forth on Exhibit B hereto. |
| 1.4. | “PERNIX PRODUCTS ” means all pharmaceutical products for which Pernix has the authority, whether from ownership, license or otherwise, to authorize the development, marketing and sale of a generic version based on or derived from such product by another party, as set forth on Exhibit A hereto. |
| 1.5. | “THIRD PARTY” means any business entities or individuals other than Pernix or Macoven Pharmaceuticals. |
| 1.6. | “KNOW-HOW” means all product specifications; manufacturing, physical chemistry and formulation know-how; analytical testing methods and validations; technical knowledge; expertise; skill; practices and procedures; formulae; trade secrets; confidential information; analytical methodology; processes; preclinical, clinical, stability and other data and results; market studies; and all other experience and know-how, in each case in tangible form and only to the extent related to Pernix, PERNIX PRODUCTS and/or GENERIC PRODUCTS, whether or not patentable, together with inventions and methods (whether patentable or unpatentable and whether or not reduced to practice) and all improvements to those inventions and methods. |
| 1.7. | “NET SALES” means, with respect to a GENERIC PRODUCT, the amount of gross sales of such product less returns, discounts and allowances, as may be calculated in accordance with generally accepted accounting principles. |
| 2.1. | Ownership: Subject to the other terms and conditions of this AGREEMENT, Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that Pernix currently owns and will retain ownership in all rights of any kind, including but not limited to intellectual property rights, trademarks, copyrights, patents, KNOW-HOW, trade secrets, and the like in all PERNIX PRODUCTS and GENERIC PRODUCTS to the fullest extent permitted by law. This AGREEMENT does not assign, transfer, convey, or change Pernix’s ownership rights in any way. |
| 2.2. | License: Macoven Pharmaceuticals acknowledges, agrees, and understands that this AGREEMENT acts as a non-exclusive license agreement whereby for a set term, as discussed herein pursuant to Section 5, Macoven Pharmaceuticals is given the non-exclusive right to develop, market, and sell GENERIC PRODUCTS. |
| 2.3. | Marketing: Subject to the other terms and conditions of this AGREEMENT, Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that Pernix, its partners, affiliates, its subsidiaries, and/or its successors in interests, shall have the right to use any marketing materials developed by and/or for Macoven Pharmaceuticals for marketing and/or selling any GENERIC PRODUCTS. |
| 2.4. | Exclusiveness: Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that the rights granted to Macoven Pharmaceuticals under this AGREEMENT are non-exclusive and Pernix has the right to grant the same and/or similar rights to any THIRD PARTY at Pernix’s discretion. |
| 2.5. | Distribution: Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that Macoven Pharmaceuticals is responsible for the distribution and marketing of any products developed as a result of this AGREEMENT. |
3. PRODUCT COMMERCIALIZATION
| 3.1. | Subject to the other terms and conditions of this AGREEMENT, Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that Pernix retains complete control over the commercialization and promotion of any and all PERNIX PRODUCTS and GENERIC PRODUCTS. |
| 3.2. | Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that the license granted to Macoven Pharmaceuticals pursuant to the terms of this Agreement is limited to the GENERIC PRODUCTS set forth on Exhibit B hereto. Pernix, may, in its sole and absolute discretion, add or remove products from the list of GENERIC PRODUCTS set forth on Exhibit B as it, in its sole and absolute discretion, may deem necessary and in its best interest. In the event a GENERIC PRODUCT is removed from Exhibit B, all rights granted to Macoven Pharmaceuticals with respect to such product by the terms of this Agreement shall, without any action on the part of either party, terminate. Macoven Pharmaceuticals will consult with Pernix and obtain Pernix’s consent prior to partaking in any activity that would be considered the commer cialization and/or promotion of any GENERIC PRODUCTS. |
4. MANUFACTURE OF PRODUCTS
| 4.1. | Any GENERIC PRODUCTS developed as a result of this AGREEMENT will be manufactured at a location that is acceptable to Pernix. |
| 4.2. | Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that Pernix has the right and control to make all final approvals and/or other decisions regarding the manufacturing of any GENERIC PRODUCTS developed as a result of this AGREEMENT. |
| 4.3. | Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that Macoven Pharmaceuticals is solely responsible for any and all payments to any manufacturer for the development and/or manufacturing of any GENERIC PRODUCTS developed as a result of this AGREEMENT. |
| 5.1. | The initial term (“INITIAL TERM”) is eighteen (18) months from July 27, 2009, the effective date of the ORIGINAL AGREEMENT. The INITIAL TERM shall expire on January 27, 2011. |
| 5.2. | After expiration of the INITIAL TERM described in 5.1, this AGREEMENT shall automatically renew for 12 months unless Pernix chooses not to renew. This AGREEMENT will then renew for a new 12 month term at the end of each 12 month period unless otherwise terminated by Pernix as provided for under the terms of this AGREEMENT. |
| 5.3. | Pernix has the right to terminate this AGREEMENT after the INITIAL TERM at will. Macoven Pharmaceuticals can only terminate this AGREEMENT with 90 days notice. |
| 5.4. | Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that Pernix must provide 30 days advance notice to Macoven Pharmaceuticals before terminating this AGREEMENT. |
| 5.5. | Pernix and Macoven Pharmaceuticals acknowledge, agree, and understand that if both Pernix and Macoven Pharmaceuticals agree to terminate this AGREEMENT, then this AGREEMENT may be terminated at anytime. |
6. PAYMENTS BY PERNIX TO MACOVEN PHARMACEUTICALS
| 6.1. | Pernix paid Macoven Pharmaceuticals a one time development and service fee (“DEVELOPMENT FEE”) of One Million Five Hundred Thousand and 00/100 ($1,500,000.00) following the execution of the ORIGINAL AGREEMENT to develop, promote, commercialize, market, and sell GENERIC PRODUCTS for the exclusive benefit of Pernix. |
| 6.2. | In the event of a termination of this AGREEMENT prior to the INITIAL TERM for any reason, Macoven Pharmaceuticals shall reimburse Pernix for that portion of the DEVELOPMENT FEE equal to the product of the DEVELOPMENT FEE multiplied by ((18 minus the number of whole months the INITIAL TERM has been in effect) divided by 18). |
7. PAYMENTS BY MACOVEN PHARMACEUTICALS TO PERNIX/ OWNERSHIP OF SALES
| 7.1. | Macoven Pharmaceuticals acknowledges, agrees, and understands that the NET SALES of all GENERIC PRODUCTS shall be the sole and exclusive property of Pernix. Pernix may, in its sole and absolute discretion, amend the list of PERNIX PRODUCTS and/or GENERIC PRODUCTS as set forth on Exhibits A and B hereto, respectively, and shall promptly furnish Macoven Pharmaceuticals with written notice of such change(s). |
| 7.2. | Macoven Pharmaceuticals acknowledges, agrees and understands that any and all payments submitted to Macoven Pharmaceuticals and/or any of its affiliates, employees, officers, directors, agents, subsidiaries or successors from THIRD PARTIES for any orders of any GENERIC PRODUCTS are the exclusive property of Pernix. |
| 7.3. | Macoven Pharmaceuticals acknowledges, agrees, and understands that at the time of termination of this AGREEMENT for any reason, any NET SALES attributable to outstanding invoices and accounts receivables relating to any GENERIC PRODUCTS will be the exclusive property of and belong to Pernix. Macoven Pharmaceuticals hereby assigns to Pernix full ownership of any accounts receivables and outstanding invoices relating to the NET SALES of any GENERIC PRODUCTS. |
| 7.4. | Macoven Pharmaceuticals acknowledges, agrees, and understands that it is responsible for any and all costs and fees, including but not limited to attorney’s fees, incurred and/or associated with collecting any sales proceeds associated with the sale of any GENERIC PRODUCTS developed as a result of this AGREEMENT. Macoven Pharmaceuticals acknowledges and agrees that it will reimburse Pernix for any costs and/or fees, including but not limited to attorney’s fees, incurred and/or expended by Pernix in collecting sales proceeds associated with the sale of any GENERIC PRODUCTS developed as a result of this AGREEMENT. |
| 7.5. | Macoven Pharmaceuticals agrees to forward all payments due Pernix pursuant to the terms of Sections 7.1 to 7.4 to Pernix on at least the 15th and 30th of each month |
| 8.1. | The scope of this AGREEMENT shall include all pages of this AGREEMENT along with any and all attachments and/or exhibits. |
| 8.2. | All notices to be given under this AGREEMENT shall be in writing and shall be deemed to be fully given by a party when sent by certified or registered mail, postage prepaid, or by reputable overnight carrier to the other party at the respective address shown below or to such other address as a party hereto shall supply to the other in writing: |
If to Pernix: Pernix Therapeutics, LLC 33219 West Forest Street Magnolia, Texas 77354 Attention: Cooper Collins | If to Macoven Pharmaceuticals : Macoven Pharmaceuticals, LLC . 410 West Brannon Road Nicholasville, Kentucky 40356 Attention: Mike Venters |
| 8.3. | All terms and provisions of this AGREEMENT shall survive any change of control for both Pernix and Macoven Pharmaceuticals. In addition all terms and provisions of this AGREEMENT shall apply to any change of ownership for both Pernix and Macoven Pharmaceuticals. |
| 8.4. | This AGREEMENT may be executed in any number of counterparts and by facsimile, each of which will be deemed an original, but all of which together will constitute one and the same instrument. |
| 9.1. | Confidential Information. Each party acknowledges and agrees that it will have access to, or become acquainted with, Confidential Information of the other party in connection with the performance of the services required by this AGREEMENT. For the purposes of this AGREEMENT, “Confidential Information” shall mean any information of the disclosing party or any affiliate thereof, which gives the disclosing party an advantage over its competitors who do not possess such information and constitutes valuable trade secrets and proprietary data which was revealed to the receiving party as a result of entering into or performing its obligations under this AGREEMENT, including but not limited to, information which relates to the PERNIX PRODUCTS, the GENERIC PRODUCTS, designs, methods, discoveries, improvements, documents, trade secrets, proprietary rights, business affairs, customer information or employee information. Confidential Information shall not include any information that: |
| 9.1.1. | was known to the receiving party prior to the date of this AGREEMENT, without an obligation to keep it confidential; |
| 9.1.2. | was lawfully obtained by the receiving party from a third party without any obligation of confidentiality; |
| 9.1.3. | is, at the time of disclosure, in the public knowledge; |
| 9.1.4. | becomes part of the public knowledge after disclosure by publication or otherwise except by breach of this AGREEMENT; |
| 9.1.5. | is developed by the receiving party independently by persons who did not have access to the Confidential Information and apart from this AGREEMENT; and |
| 9.1.6. | is otherwise knowledge possessed by the receiving party or its employees as the result of their industry experience or education. |
| 9.2. | The receiving party shall keep all Confidential Information in confidence and shall not, at any time during or for a period of five (5) years from the termination of this AGREEMENT, without the disclosing party’s prior written consent, disclose or otherwise make available, directly or indirectly, any item of Confidential Information to anyone other than its employees (and its legal counsel and consultants provided they are bound by similar obligations of confidentiality) who need to know the same in connection with fulfilling the purposes of this AGREEMENT. The receiving party shall use the Confidential Information only in connection with fulfilling the purposes of this AGREEMENT and for no other purpose. Each party shall inform its employees of the trade secret, proprietary and confidential nature of the Confidential Infor mation. |
| 9.3. | Extraordinary Relief. Any violation by either Pernix or Macoven Pharmaceuticals of its obligations pursuant to the confidentiality provisions herein shall not be adequately compensable by monetary damages and the non-violating party shall be entitled to an injunction order or other appropriate decree specifically enforcing such party’s obligations pursuant to the confidentiality provisions of this AGREEMENT. The rights granted by this Section 9.3 are in addition to all other remedies and rights available at law or in equity. |
| 9.4. | Upon termination of this AGREEMENT, each party will return the other party’s Confidential Information which is under its control or in its possession. |
10. ENFORCEMENT, RENEWAL, TERMINATION, AND/OR GENERAL
| 10.1. | This AGREEMENT shall be governed by, and interpreted under, the laws of the State of Louisiana without giving effect to the conflicts of laws principles. In the event of a dispute(s), claim(s) or matter(s) in question of any kind whatsoever arising out of or related or collateral to the provisions and/or subject matter of this AGREEMENT or the breach thereof, it is agreed that the parties to this AGREEMENT will attempt to resolve such dispute(s), claim(s) or other matter(s) in question amicably by informal discussions and negotiations within a seven (7) day period. All dispute(s), claim(s) or other matter(s) in question that can not be settled by negotiations among the parties within such time shall upon demand of, and at the election of Pernix be submitted by the parties to arbitration to take place in the State of Louisiana. |
| 10.2. | In the event that arbitration is not elected by Pernix, then any dispute(s), claim(s), controversy, or other matter(s), shall be resolved without a jury in a court located in the State of Louisiana. The parties consent to jurisdiction in such courts, waive any objection to such venue and waive trial by jury. The parties stipulate and agree that any judgment relating to this AGREEMENT which is entered in a court in the State of Louisiana shall be binding throughout the world. Legal Process may be served on either party by Certified Mail, Return Receipt Requested or any other method permitted by the rules of the court in which an action is commenced. |
| 10.3. | In the event that this matter proceeds to arbitration or litigation, the prevailing party shall be entitled to collect reasonable attorney’s fees for the arbitration and/or litigation. |
| 10.4. | In the event that any provision of this AGREEMENT shall be held invalid or unenforceable, it shall be deemed modified, but only to the extent necessary to make it lawful. To effect such modification, the said provision shall be deemed deleted, added to and/or rewritten, whichever shall most fully preserve the intentions of the parties as originally expressed herein. |
| 10.5. | The obligations of the parties under this AGREEMENT shall be binding upon their legal assigns and successors, but this AGREEMENT may not be assigned by a party to this AGREEMENT to a THIRD PARTY except with the prior written consent of the other party. |
| 10.6. | Either party shall have the right, but not the obligation, to terminate this AGREEMENT upon (thirty) 30 days written notice after the occurrence of a material breach of this AGREEMENT. Such termination shall be without prejudice to any other right or remedy of the Parties, including, but not limited to, the right to damages and/or equitable relief and/or to remedy any material breach of this AGREEMENT. |
11. REPRESENTATIONS AND WARRANTIES
| 11.1. | Macoven Pharmaceuticals and Pernix represent and warrant that they have the right and authority to enter into this AGREEMENT with one another. |
| 11.2. | This AGREEMENT (and any Exhibits attached hereto) supersedes all prior discussions and agreements, both written and oral, among the Parties with respect to the subject matter hereof and contain the sole and entire agreement among the Parties with respect to the subject matter hereof. |
| 11.3. | Macoven Pharmaceuticals represents and warrants that there are no Actions or Proceedings pending, threatened or reasonably anticipated against Macoven Pharmaceuticals or its Affiliates that relate to (a) pharmaceutical products currently or previously sold by Macoven Pharmaceuticals; (b) this Agreement; or (c) the transactions contemplated by this Agreement. Macoven Pharmaceuticals is not subject to any order that could reasonably be expected to materially impair or delay the ability of Macoven Pharmaceuticals to perform its obligations hereunder. |
| 11.4. | Paragraph/Section headings herein are for convenience only and do not control or affect the meaning or interpretation of any terms of provisions of this AGREEMENT. |
| 11.5. | No waiver of any provision of this AGREEMENT will be considered unless it is in a signed writing, and no such waiver will constitute a waiver of any other provision(s) or of the same provision on another occasion. |
| 12.1. | Indemnification by Macoven Pharmaceuticals. Macoven Pharmaceuticals shall defend, indemnify and hold Pernix, its affiliates, subsidiaries, successors, directors, officers, employees and agents harmless from and against any and all claims, suits, actions, damages, assessments, interest charges, penalties, costs or expenses, including reasonable attorney’s fees (collectively, the “INDEMNIFIED AMOUNTS,”) arising out of (a) the material breach by Macoven Pharmaceuticals of any of its obligations, representations or warranties under this AGREEMENT, including, without limitation, Macoven Pharmaceuticals’ failure to submit payments to Pernix pursuant to Section 7 of this AGREEMENT, (b) a negligent or willful act or omission on the part of Macoven Pharmaceuticals (including any employee or agent of Macoven Pharmaceuticals), (c) any federal or state claims or assessment for nonpayment or late payment by Macoven Pharmaceuticals of any tax or contribution based on compensation or other benefits owed to any employees of Macoven Pharmaceuticals, including, without limitation, a claim or assessment that Pernix should have withheld any amounts related thereto, (d) requests by Macoven Pharmaceuticals or by third parties (in connection with a claim against Macoven Pharmaceuticals ) pursuant to a subpoena or court order for the production by Pernix of documents or any other materials or to interview, depose and/or elicit testimony from Pernix employees on any matters related to or involving this AGREEMENT, (e) any violation by Macoven Pharmaceuticals of any and all APPLICABLE LAWS of any governmental body having jurisdiction over the exercise of rights under this AGREEMENT, or (f) any misuse or misappropriation of any products distributed by Macoven Pharmaceuticals. |
| 13.1. | Macoven Pharmaceuticals Insurance Coverage Required. During any term of this AGREEMENT, and with respect to liability hereunder for any post termination period during which a claim could be asserted against Macoven Pharmaceuticals, up to 5 years after termination, Macoven Pharmaceuticals shall maintain at its sole expense insurance coverage as follows: |
| 13.1.1. | Product liability insurance with respect to any GENERIC PRODUCTS developed as a result of this AGREEMENT with coverage limits of not less than $5 million per occurrence and $5 million in the aggregate; and |
| 13.1.2. | Commercial General Liability insurance including with a combined single limit of $1,000,000, minimum liability of $1,000,000 each occurrence and $2,000,000 in the aggregate. |
| 13.1.3. | The foregoing insurance shall be maintained with responsible carriers and their terms of coverage shall be evidenced by certificates of insurance to be furnished by Macoven Pharmaceuticals to Pernix within 7 days of written request by Pernix. Such certificates of insurance shall provide that at least 30 days’ written notice shall be given to Pernix prior to cancellation or modification of any of the material terms of coverage of any policy. |
| 14.1. | Neither party shall be deemed to have breached this AGREEMENT or to be liable for any damages caused by failure to perform or by delay in rendering performance hereunder arising out of any occurrence or contingency beyond its reasonable control, including but not limited to, (a) flood, earthquake, hurricane, fire, war, strikes, labor unrest, riot, civil commotion, power or communication line failure, computer equipment failure or operational failure, (b) failure of independent contractors under agreement with Pernix to perform or (c) prohibition(s) or restriction(s) imposed by applicable regulatory authority, the judgment, ruling or order of a court or agency of competent jurisdiction, or the enactment of or change in any law or regulation. |
(Signature page(s) follows)
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
| Pernix Therapeutics, LLC | | Macoven Pharmaceuticals, LLC. | |
| | | | |
By: Pernix Therapeutics Holdings, Inc.,
its sole manager and member | | | |
| | | | |
| By: /s/ Cooper C Collins | | By: /s/ Michael Venters | |
| Name: Cooper C. Collins | | Name: Michael Venters | |
| Title: President & Chief Executive Officer | | Title: President | |
| | | | |
| Date: 6/22/10 | | Date: 6/22/10 | |
