CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
EXHIBIT 10.44
FIRST AMENDMENT TO THE
SUPPLY AND MARKETING AGREEMENT
BETWEEN
PENTECH PHARMACEUTICALS, INC.
AND
PAR PHARMACEUTICAL, INC.
THIS FIRST AMENDMENT TO THE TO THE SUPPLY AND MARKETING AGREEMENT (THIS
"AMENDMENT"), dated as of November 12, 2002, is hereby entered into by and
between Pentech Pharmaceuticals, Inc. ("Pentech"), an Illinois corporation,
having offices at 3315 Algonquin Road, Rolling Meadows, Illinois 60008 and Par
Pharmaceutical, Inc. ("Par"), a New Jersey corporation, having offices at One
Ram Ridge Road, Spring Valley, New York 10977.
WHEREAS, Pentech and Par have previously entered into that certain Supply And
Marketing Agreement dated as of November 19, 2001 (the "Supply and Marketing
Agreement"); and,
WHEREAS, Pentech and Par wish to amend the Supply and Marketing Agreement by
entering into this Amendment on the terms and conditions and for the purposes
set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth
herein, the receipt and sufficiency of which is hereby acknowledged, Pentech and
Par agree as follows:
DEFINITIONS.
Any capitalized terms used herein which are not defined herein, shall have the
meaning set forth in the Supply and Marketing Agreement. The definition of
"Agreement" in the Supply and Marketing Agreement shall hereby be deleted in its
entirety and replaced with the following new definition.
"Agreement" shall mean this Supply and Marketing Agreement as amended
from time to time.
The definition of "Cost of Goods" in the Supply and Marketing Agreement shall
hereby be amended by appending the following to the definition of "Cost of
Goods".
Cost of Goods shall also include any license, royalty, profit or
similar payment required to be made by Par to a third party in
connection with Par's sale of a paroxetine product.
The following new definitions shall hereby be added to the Agreement.
"Project" shall mean all activities in conjunction with developing and
obtaining regulatory approval for a paroxetine product.
AMENDMENTS.
Section 2.2 of the Supply and Marketing Agreement shall be deleted in its
entirety and replaced with the following new Section 2.2.
2.2 LEGAL COUNSEL AND EXPENSES. In connection with the Paragraph IV
Litigation, and as additional consideration for the exclusive right to
market, sell and distribute paroxetine products in the Territory on
behalf of Pentech, Par and Pentech hereby agree that Par shall have
the sole and exclusive control of the Paragraph IV Litigation and all
regulatory activities related to the Project. Par shall assume full
responsibility for meeting the regulatory requirements in connection
with the Project, including but not limited to maintaining cGMP
compliance; provided however, that (1) the Chicago facility shall be
dedicated to the Project and Pentech shall produce no other products
at this facility and (2) Pentech shall cooperate with Par in good
faith to resolve any regulatory compliance issues which may arise in
connection with the Project. Pentech and Par further agree that Par
shall employ Edward Haug, Esq., and his associates, of Frommer
Lawrence & Haug LLP, 745 Fifth Avenue, New York, New York 10151
("FLH"), as its primary legal counsel in connection with the Paragraph
IV Litigation and all regulatory activities related to the Project.
The President (or similar officer if there is no President) of
Pentech, acting in good faith and in furtherance of the Paragraph IV
Exhibit 10.44 - Page 1
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
Litigation and in obtaining regulatory approval for a paroxetine
product, shall be allowed unlimited access to an contact with FLH in
connection with the Paragraph IV Litigation and regulatory activities
related to the Project. In addition, Pentech and Par each agree that
Par will be fully responsible for all reasonable legal fees and
expenses incurred by Pentech after the date of this Agreement
resulting directly from the Paragraph IV Litigation. Notwithstanding
anything to the contrary contained herein, in no event shall Par
reimburse Pentech or be responsible to pay for any litigation fees
and/or expenses (legal or otherwise) incurred before the signing of
the Agreement nor any other Development Costs associated with the
Project (other than the Funding Payments). All fees to be paid by Par
under this Section 2.2 shall be paid by Par within thirty (30) days of
Par's receipt of an invoice for such fees and expenses. All payments
under this Section 2.2 are nonrefundable but legal expenses in excess
of two million dollars ($2,000,000) shall be fully creditable against
Profit Payments which become due and payable to Pentech pursuant to
this Agreement.
Section 2.3 of the Supply and Marketing Agreement shall be amended by appending
the following to the end of Section 2.3.
Par and Pentech further agree that in the event of any settlement to
which Pentech and a third party are parties, which relates to
paroxetine, Par will first be reimbursed for all of its direct costs
related to the development and marketing of paroxetine, including but
not limited to manufacturing related costs (e.g. spray drying
equipment, facility modifications and API start-up costs) and legal
expenses, out of any amounts received in the settlement by Par and
Pentech, any remaining amounts that are received by Par and Pentech
out of such a settlement will be divided *% to Par and *% to Pentech.
Article 2 of the Supply and Marketing Agreement shall be amended by adding the
following new section, Section 2.4.
2.4 PROJECT MANAGEMENT. Par shall have sole decision making control
over the Project. In connection therewith, Par shall determine who
shall work on the Project, and shall have discretion to employ
individuals of its choosing to work on the Project. During the term of
the Project, Pentech will provide such space and administrative
support at its Chicago facility as Par may require for those Par
employees which Par chooses to have work on the Project in Chicago
from time to time. All Pentech employees who Par may elect to work on
the project, shall work on the Project under the direction of Par.
However, all such Pentech employees shall remain employees of Pentech
and shall remain the sole responsibility and risk of Pentech. During
the period from January 1, 2003 through December 31, 2003, Par shall
reimburse Pentech for its reasonable corporate costs associated with
the Project, up to a maximum of One Million Three Hundred Thousand
Dollars ($1,300,000), including Pentech's expenses in employing
individuals to work on the Project. To the extent that Pentech has
allocated certain employees to work on the Project, and Par elects to
not have such individuals work on the Project, Par will not reimburse
Pentech for any expenses associated with such employees following
Par's removal of such employees from the Project. Pentech may continue
to employ (for work on other matters) or terminate such employees at
Pentech's sole risk and expense. In no event will Par be responsible
for (1) any legal expenses of Pentech that do not arise out of the
Paragraph IV Litigation or the process of obtaining regulatory
approval for the Product, or (2) any Pentech expenses which are not
directly related to the Project.
Section 5.2 of the Supply and Marketing Agreement shall be deleted in its
entirety, including all subsections, and replaced by the following new section
5.2.
5.2 PROFIT PAYMENT. In addition to the Transfer/Contract Price Payment
and subject to Section 3.1 hereof, Par shall pay Pentech the following
Profit Payments:
(A) Subject to Section 3.1, during the Term and any Renewal Term,
the Profit Payment to be paid by Par to Pentech shall equal *% of
the Gross Profit generated by Par from sales of capsule
paroxetine product.
(B) To the extent that Par markets a generic tablet version of
paroxetine, during the Term of this Agreement and any Renewal
Term, Par shall pay to Pentech a Profit Payment in the amount of
*% of Par's gross profit generated by sales of the tablet version
of paroxetine. Par's gross profit generated by sales of the
tablet version shall be calculated using the same methodology as
Exhibit 10.44 - Page 2
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH SECURITIES AND EXCHANGE COMMISSION
ASTERISKS DENOTE SUCH OMISSION
set forth herein for calculating the Gross Profit for sales of
the capsule and shall include as a "Cost of Goods" any license,
royalty, profit or similar payment required to be made by Par to
a third party in connection with Par's sale of the tablet version
of the paroxetine as well as any payments similar to the
Transfer/Contract Price Payment, which are made to a third Party
in connection with the tablets..
MANUFACTURING AND SUPPLY. Pentech and Par each recognize that as development of
the project has progressed there have been modifications to the allocation of
responsibility between the parties in regards to the development of a commercial
paroxetine product, including manufacturing and supply responsibilities.
Therefore, Pentech and Par hereby agree to negotiate in good faith to amend
those portions of the Supply and Marketing Agreement which pertain to
manufacturing and supply, in order to accurately reflect the relationship
contemplated by the parties.
ENTIRE AGREEMENT; AMENDMENT. This Amendment together with the Supply and
Marketing Agreement (as amended by this Amendment) constitute the complete and
entire understanding between the Parties with respect to the activities
anticipated hereunder and thereunder, superseding and replacing all prior oral
or written agreements, communications, representations, proposals, or
negotiations specifically relating to the activities hereunder and thereunder
and the subject matter hereof and thereof. No change or addition to or variation
nor amendment of this Amendment, nor any cancellation or waiver of any of the
terms or provisions hereof, nor any alteration or modification of any of the
terms and conditions hereof, shall be effective or valid and binding on either
Party unless in writing and signed by a duly authorized representative of each
Party. All terms of the Agreement not specifically addressed or set forth in
this Amendment shall continue to apply in full force and effect, and shall apply
equally to this Amendment itself (e.g. confidentiality, notice, etc.). To the
extent that there is any inconsistency between the terms of the Supply and
Marketing Agreement and this Amendment, the terms of this Amendment shall
govern.
COUNTERPARTS. This Amendment may be executed in counterparts, each of which
shall be deemed an original and all of which taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date
first set forth above.
PENTECH PHARMACEUTICALS, INC. PAR PHARMACEUTICAL, INC.
By:/S/ AL HUMMEL By:/S/ SCOTT TARRIFF
---------------------------------- ---------------------------------
Name: AL HUMMEL Name: SCOTT TARRIFF
------------------------------- -------------------------------
Title: PRESIDENT AND CHIEF EXECUTIVE Title: PRESIDENT AND CHIEF EXECUTIVE
OFFICER OFFICER
Exhibit 10.44 - Page 3