Exhibit 10.15
EUROPEAN AGREEMENT
THIS AGREEMENT (the "European Agreement"), is made as of this 2nd day
of March, 2001 (the "Effective Date") between NAPRO BIOTHERAPEUTICS, INC., a
corporation organized under the laws of the State of Delaware with its principal
place of business at 6304 Spine Road, Unit A, Boulder, Colorado 80301, United
States of America, and CENTRAL LABORATORIES, LIMITED a corporation organized
under the laws of Ireland with an address Unit 31A, Ravensrock Road, Sandyford
Industrial Estate, Foxrock, Dublin 18 Ireland.
RECITALS:
WHEREAS, NaPro and F.H. Faulding & Co., Ltd. (a Faulding Affiliate)
have entered into an Amended and Restated Master Agreement as of the 5th day of
June, 2000 which relates to the manufacture and distribution of paclitaxel in
certain territories (the "Master Agreement");
WHEREAS, the parties wish to expand their cooperation and activities
into certain territories not covered in the Master Agreement;
WHEREAS, the parties deem it advisable to enter into this European
Agreement to govern the parties' activities with respect to the Field in the
European Territory (as such terms are defined below). The parties wish to leave
the Master Agreement in place to govern the parties' activities with respect to
territories other than the European Territory.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby enter into this
European Agreement, as follows:
1 DEFINITIONS
1.1 In this European Agreement, the following terms when used with
initial capital letters shall have the meanings set forth below:
"Affiliate" shall mean with respect to a Person, any other
person controlling, controlled by or under common control with
such Person.
"Annual Forecast" shall have the meaning set forth in Section
3.10.1.
"Commercial Use" shall mean use of a Formulated Product in a
particular country in the European Territory for alleviating
or curing a cancer indication in humans, once Registration has
been obtained in that country for that indication.
"Compassionate Use" shall mean use of a Formulated Product in
a particular country in the European Territory for alleviating
or curing a cancer indication in humans, prior to Registration
of that product in that country for that indication (e.g.
named patient sales).
"Confidential Information" shall have the meaning set forth in
Article 7.
"Dollars or $" shall mean U.S. Dollars.
"European Territory" shall mean the countries listed on
Exhibit A attached hereto.
"Ex works" shall mean such delivery term as defined in the
current edition of the International Chamber of Commerce
publication "Incoterms."
"Faulding" shall mean Central Laboratories, Limited, a
corporation organized under the laws of Ireland, and its
Affiliates.
"Faulding Trademark(s)" shall mean one or more trademarks,
trade names, or service marks that are owned or licensed by or
on behalf of Faulding which Faulding may use from time to time
in connection with the sale or promotion of the Formulated
Product.
"Field" shall mean the development, manufacture, import, use,
marketing, promotion, offer for sale, sale and distribution of
Formulated Product.
"Formulated Product" shall mean [THIS PORTION HAS BEEN
REDACTED]
[THIS PORTION HAS BEEN REDACTED]
"GMP" shall mean good pharmaceutical manufacturing practice as
required by any governmental authority in any country in the
European Territory whose approval of Product is required.
"IVAX Agreement" shall mean that certain Termination Agreement
between Baker Norton Pharmaceuticals, Inc., a division of IVAX
Corporation, dated as of March 20, 1998.
"Loss" shall mean all loss, damage, cost and expense,
including reasonable attorney's fees.
"Major Market" shall mean [THIS PORTION HAS BEEN REDACTED]
"Master Agreement" shall have the meaning set forth in the
Recitals.
"NaPro" shall mean NaPro Biotherapeutics, Inc., a corporation
organized under the laws of the State of Delaware, and its
Affiliates.
"NaPro Patents" shall mean [THIS PORTION HAS BEEN REDACTED]
"Net Sales Price" shall mean [THIS PORTION HAS BEEN REDACTED]
"Paclitaxel" shall mean the chemical entity of the formula set
forth in Exhibit C.
"Person" shall mean any company, corporation, partnership,
trust, or any other legal entity.
"Product" shall mean Paclitaxel as specified in Exhibit D, as
may be amended by written mutual agreement from time to time,
and manufactured according to, without limitation, the
Specifications, the Registration and GMP.
"Registration" shall mean the final approval of registrations
and permits required by applicable government and regulatory
authorities in a particular country in the European Territory
to import into and market, sell and distribute Formulated
Product for human use to the general public or any part
thereof in that country. Registration shall not include
agreement on pricing with appropriate authorities.
"Rejection" shall mean:
(a) in the case of an application for Registration in a
particular country:
(i) the classification of such application as
"not approvable" or "not approved",
or
(ii) any formal suspension of consideration of
the application; and
(b) in the case of a product for which a Registration has been
obtained in a particular country, the suspension, cancellation
or non-renewal of the Registration.
"Safety Stock" shall have the meaning set forth in Section
3.5.3.
"Section 3.1 Obligations" shall mean the obligations of
Faulding pursuant to Sections 3.1.1, 3.1.2.1, and Section
3.1.3, collectively.
"Specification" shall mean the specification for the Product
set forth in Exhibit D and the Registrations, as such
specification may be amended from time to time, either by
mutual agreement of the parties or in response to directives
issued by a relevant governmental authority in connection with
the Registration or marketing of the Formulated Product in a
particular jurisdiction. All Product supplied by NaPro shall
be manufactured according to GMP.
"Target Market Share" shall mean [THIS PORTION HAS BEEN
REDACTED]
2 Master Agreement; TERM; Licensing Fee
2.1 Survival of the Master Agreement. This European Agreement shall
govern the relationship, obligations, limitations, and rights of the
parties solely with respect to the Field and the European Territory and
the transactions contemplated hereunder. The Master Agreement shall
govern the relationship, obligations, limitations, and rights of the
parties with respect to territories other than the European Territory
and outside the Field and other transactions not contemplated
hereunder; provided that in the event of any conflict between the terms
and conditions of this European Agreement and the terms and conditions
of the Master Agreement, the terms and conditions of this European
Agreement shall govern and control with respect to the European
Territory, and the Master Agreement shall govern and control with
respect to territories set forth therein.
2.2 Term. This European Agreement shall commence on the Effective Date
and shall continue, unless terminated earlier pursuant to the terms of
this European Agreement, for an initial period until March 22, 2013.
Thereafter, this European Agreement shall continue from year to year,
unless terminated on the anniversary thereof by one party giving
written notice to the other party at least one hundred and eighty (180)
days prior to the expiration of the initial term or any subsequent one
(1) year term.
2.3 Grant of Rights. NaPro hereby grants to Faulding the exclusive
(such exclusivity limited as set forth herein) license and right (with
the right to sublicense) to, directly or indirectly, develop,
manufacture, import, use, market, promote, offer to sell, sell and
distribute Formulated Product in the European Territory in accordance
with the terms and conditions of this European Agreement.
2.4 Licensing Fee. Within ten (10) business days of the Effective Date,
Faulding shall pay to NaPro a license fee of seven million, five
hundred thousand dollars (US$7,5000,000).[THIS PORTION HAS BEEN
REDACTED] In the event NaPro does not obtain registration [THIS PORTION
HAS BEEN REDACTED] NaPro shall pay Faulding the sum of [THIS PORTION
HAS BEEN REDACTED]. In no event shall NaPro be obligated to pay
Faulding pursuant to this Section 2.4 and/or Section 5.6 below, in
excess of [THIS PORTION HAS BEEN REDACTED] .
3 Certain Obligations
3.1 Requirements and Exclusivity.
3.1.1 Subject to the terms and conditions of this European
Agreement, (a) NaPro shall provide, supply and sell Paclitaxel
exclusively to Faulding for use in the Field within the
European Territory, and to no other Person, and (b) Faulding
shall purchase all of its requirements of Paclitaxel
exclusively from NaPro for use in the Field within the
European Territory and from no other Person.
3.1.2 To the extent such obligations are in accordance with
applicable law, NaPro shall prohibit any Person with whom
NaPro has supply agreements or arrangements or licenses, or
other agreements relating to Paclitaxel from, directly or
indirectly, making any use of or selling (including, without
limitation, research, developmental and/or commercial use,
sale and/or supply) any product containing Paclitaxel in the
European Territory in the Field, or from assisting any person
or entity in doing so. [THIS PORTION HAS BEEN REDACTED].
3.1.2.1 [THIS PORTION HAS BEEN REDACTED].
3.1.2.2 Without NaPro's prior written
consent, Faulding shall not use
any NaPro Confidential
Information except for use in
the Field in the European
Territory pursuant to and
during the term of this
European Agreement.
3.1.3 [THIS PORTION HAS BEEN REDACTED]
3.2 Notwithstanding anything contained in this European Agreement
to the contrary:
3.2.1 if NaPro has failed to obtain Registration for
the [THIS PORTION HAS BEEN REDACTED].
3.2.2 in the event that [THIS PORTION HAS BEEN
REDACTED].
3.2.3 if NaPro does not diligently and actively
pursue procurement of Registration, or does not achieve meaningful progress in
its attempts to obtain Registration, in any country in the European Territory
for which NaPro has the responsibility for obtaining Registration;
then
(a) [THIS PORTION HAS BEEN REDACTED]
(b) [THIS PORTION HAS BEEN REDACTED]
3.3. [THIS PORTION HAS BEEN REDACTED]
3.3.1 [THIS PORTION HAS BEEN REDACTED]
3.3.2 [THIS PORTION HAS BEEN REDACTED]
3.5 NaPro's Supply Obligations
3.5.1 Provided that Faulding has provided to NaPro the
forecasts required pursuant to Section 3.10.1 within [THIS
PORTION HAS BEEN REDACTED] of the dates set forth therein and
provided that the amounts reflected in the Annual Forecast do
not vary by more than [THIS PORTION HAS BEEN REDACTED]from the
amounts in the updated interim forecasts, NaPro shall supply
Faulding with the amount of Product specified by Faulding in
the Annual Forecast, no later than [THIS PORTION HAS BEEN
REDACTED] after the dates requested by Faulding, and shall use
its reasonable commercial efforts to supply such Product
according to Faulding's requested delivery schedule and in any
event not later than thirty days from the date specified in
such delivery schedule. Subject to Faulding meeting its
forecasting obligations as set forth above, NaPro shall be
required to supply Faulding with all of Faulding's
requirements of Product. Upon receipt of each quarterly
forecast from Faulding, the parties shall confer and use their
best efforts to determine whether or not NaPro will be able to
supply Faulding with the amounts of Product in the various
countries within the European Territory throughout the twelve
month period covered by the forecast. NaPro shall promptly
advise Faulding in writing if at any time during the term of
this European Agreement, NaPro believes that it will be unable
to supply Faulding with Product which Faulding has forecasted
for any use in any country or countries in the European
Territory, specifying the amount of Product that it will be
unable to supply.
3.5.2 Beginning with the Product to be delivered by NaPro
after [THIS PORTION HAS BEEN REDACTED] that Faulding has
specified in any of its purchase orders or shipping schedules
to be used in any country or countries in the European
Territory, if NaPro
(a) advises Faulding in writing, as set
forth above, that it will not be able to supply Product for
such country, or
(b) fails to supply Faulding with
Product within [THIS PORTION HAS BEEN REDACTED] after the date
specified by Faulding in its shipping schedule, then:
provided that Faulding has submitted to NaPro the forecasts required pursuant to
Section 3.10.1 within seven (7) days of the dates set forth therein, and
provided that the amounts reflected in the Annual Forecast do not vary by more
than [THIS PORTION HAS BEEN REDACTED]rom the amounts in the updated interim
forecasts, NaPro shall pay to Faulding (as liquidated damages for failure to
supply) an amount equal to [THIS PORTION HAS BEEN REDACTED]
3.5.3 NaPro shall maintain a Safety Stock of the Product at a
facility or facilities of Faulding designated by Faulding
within six month's of the commercial launch of the Formulated
Product in each country in the European Territory. If NaPro
controls such facilities then NaPro shall bear the risk of
loss with respect to such Safety Stock; and if Faulding
controls such facilities then Faulding shall bear the risk of
loss with respect to such Safety Stock. NaPro or Faulding, as
the case may be, shall use the same standard of care with
respect to the Safety Stock as it uses with its own inventory.
[THIS PORTION HAS BEEN REDACTED]. To the extent the Safety
Stock falls below the minimum level set forth above, Faulding
shall notify NaPro in writing and NaPro shall use diligent and
commercially reasonable efforts to replenish the Safety Stock
[THIS PORTION HAS BEEN REDACTED]. The initial purchase price
for such Safety Stock payable by Faulding to NaPro shall be
[THIS PORTION HAS BEEN REDACTED] If the quantity of such
Safety Stock is reduced by Faulding, through commercial sales
or other uses requiring payment to NaPro pursuant to Sections
3.7.1 or 3.8, then [THIS PORTION HAS BEEN REDACTED]
If NaPro determines that it will be unable to supply Product to Faulding then,
provided that Faulding has provided to NaPro the forecasts required pursuant to
Section 3.10.1 [THIS PORTION HAS BEEN REDACTED] of the dates set forth therein,
and provided that the amounts reflected in the Annual Forecast do not vary by
more than [THIS PORTION HAS BEEN REDACTED] from the amounts in the updated
interim forecasts, NaPro shall elect to either: (a) continue to pay Faulding the
liquidated damages as set forth in Section 3.5.2 above for any period in which
NaPro is unable to supply; or (b) transfer to Faulding NaPro's Registration
dossiers with respect to the Formulated Product in each country in the European
Territory that NaPro was unable to supply the Product, and [THIS PORTION HAS
BEEN REDACTED]. Such license terms between NaPro and Faulding for [THIS PORTION
HAS BEEN REDACTED] NaPro shall make the election set forth in subparagraph (b)
above by giving Faulding six months prior written notice, provided that NaPro
has complied with its obligations to provide Safety Stock pursuant to Section
3.5.3 hereof. If NaPro has not complied with its obligations to provide Safety
Stock, then the required notice period shall be extended by one month for each
month of safety stock inventory which NaPro failed to provide (to a maximum of
six months).
[THIS PORTION HAS BEEN REDACTED]
3.7 Pricing.
3.7.1 The ex works Boulder (or other NaPro facility) price for
sale of Product from NaPro to Faulding for Commercial Use or
Compassionate Use shall be [THIS PORTION HAS BEEN REDACTED]
3.7.2 Notwithstanding the foregoing, if Faulding determines in
its reasonable judgment that the sales price of the Formulated
Product in the general market place in a Major Market has
fallen to such a level that it is no longer economically
viable to offer for sale and sell the Formulated Product to
customers in such Major Market based upon the price charged by
NaPro to Faulding for the Product, then upon written notice
from Faulding to NaPro, [THIS PORTION HAS BEEN REDACTED].
3.8 Lost Product or Destroyed Product. The ex works Boulder (or other
NaPro Facility) price for sale of Product to Faulding, which Product is
used internally by Faulding, or which Faulding has lost, corrupted,
contaminated or, due to Faulding's fault, destroyed or outdated, shall
be [THIS PORTION HAS BEEN REDACTED]. NaPro shall, for a reasonable
charge, use reasonable efforts to restore Product that Faulding has
corrupted or contaminated so that such Product shall meet the
Specifications.
3.9 Invoice and Payment. NaPro shall invoice the Product upon delivery,
and payment shall be due sixty (60) days following delivery. Payments
shall be made by wire transfer to the account specified by NaPro from
time to time.
3.10 Supply Forecast, Orders and Allocation of Faulding Sales.
3.10.1 On [THIS PORTION HAS BEEN REDACTED] Faulding shall
provide NaPro with (i) a forecast of Product to be ordered for
delivery during the twelve (12) month period commencing on
[THIS PORTION HAS BEEN REDACTED]of that year (the "Annual
Forecast"), (ii) a good faith estimate of the amounts of
Product ordered to be used in each of the countries within the
European Territory and (iii) a good faith estimate of its Net
Sale Prices for sales in each country within the European
Territory for such period (the "Estimated Prices"). In
addition, by [THIS PORTION HAS BEEN REDACTED]f each calendar
year, Faulding shall issue to NaPro a firm purchase order for
the coming calendar quarter, together with its updated
forecast of Product to be ordered for the subsequent three (3)
calendar quarters. With each quarterly firm purchase order,
Faulding shall also submit its requested shipping schedule as
well as an update of its good faith estimates of the amounts
of Products ordered to be used in each of the countries within
the European Territory, as well as any Product anticipated to
be used internally, lost, or destroyed. Such forecast shall be
separate from that provided under the Master Agreement.
3.10.2 Except as set forth below, the forecast to be submitted
by Faulding shall not create a binding obligation on the part
of either party to this European Agreement.
3.10.2.1 Faulding shall be required to purchase a
minimum of [THIS PORTION HAS BEEN REDACTED]f that
amount specified by the Annual Forecast, provided
that NaPro is able to supply such amount.
3.10.2.2 NaPro shall use its commercially reasonable
efforts to supply all of Faulding's requirements of
Product according to Faulding's requested delivery
schedule, regardless of whether such Product
requirements were reflected in Faulding's current
forecast.
3.10.3 NaPro shall calculate the invoice price for each
quarterly order submitted by Faulding based on the forecast
allocations of sales and the Estimated Prices submitted by
Faulding. At the close of each period of twelve calendar
months ending on [THIS PORTION HAS BEEN REDACTED] Faulding
shall calculate the actual end use of Product supplied to
Faulding during such period and any prior period still
remaining to be determined, to the extent ascertained, on the
basis that the first Product to be supplied to Faulding is the
first to be sold and that Product is used internally, lost, or
destroyed after Product has first been sold. Faulding shall
also calculate the actual Faulding Net Sale Prices per gram
for Commercial Use sales during such twelve (12) month period.
Any under or overpayment detected by such calculation shall be
paid by May 31 of each year and verified as provided in
Section 3.10.4.
3.10.4 Faulding shall on an annual basis within sixty (60)
days after the end of the applicable twelve (12) month period
pursuant to Section 3.10.1, provide NaPro with a report on
sales of Formulated Product in each of the countries within
the European Territory as well as information on all
applicable Net Sale Prices in each of the countries within the
European Territory, and other information pertinent to the
loss, corruption, contamination, or destruction of Product.
NaPro shall have the right, at its cost, to hire an
independent accountant reasonably satisfactory to Faulding and
subject to the confidentiality provisions hereunder, which
accountant may, upon reasonable notice to Faulding and during
normal business hours no more than once in any twelve month
period, review Faulding's books and records relating to price
or payments made pursuant to this European Agreement solely to
verify the reports provided by Faulding to NaPro as described
in this Section 3.10.4. Such independent accountant shall
verify to NaPro the accuracy of such reports. Should any
underpayment equaling or exceeding five percent (5%) of the
payments due over any twelve (12) month period be detected,
then the cost of such audit shall be borne by Faulding and any
such underpayment shall be promptly paid by Faulding. If any
such verification shows underpayment or overpayment, a
correcting payment or a refund shall be promptly made by the
party who owes such money to the other party.
3.10.5 Exchange Rate Variation
3.10.5.1 In the event that payments on Net Sales
Price of the Formulated Product are made in a
currency other than United States Dollars, within
thirty (30) days of the end of each year, the parties
shall calculate the average exchange rate between the
applicable foreign currency and the United States
Dollar for the previous year, by aggregating the
closing exchange rates on the last working day of
each month during such year, as published in the
London Financial Times, and dividing by twelve (12)
(the "Average Exchange Rate").
3.10.5.2 For the first year of this European
Agreement the "Base Exchange Rate" shall be the rates
set forth on Exhibit E and for the second and
subsequent years the "Base Exchange Rate" shall be
set at the Average Exchange Rate for the previous
year.
3.10.5.3 Should the Average Exchange Rate differ from
the Base Exchange Rate by [THIS PORTION HAS BEEN
REDACTED]
3.10.5.4 For the purposes of this Section 3.10.5, a
"year" shall run from the date of this European
Agreement or the anniversary of the date of this
European Agreement.
3.11 Product Quality. Each lot of Product supplied by NaPro to Faulding
shall meet the Specification as such Specification may be amended from
time to time, either by mutual agreement of the parties or in response
to directives issued by a relevant government authority in connection
with the Registration or marketing of the Product in a particular
jurisdiction. With each lot of Product supplied by NaPro to Faulding,
NaPro shall submit to Faulding an (a) appropriate certificate of
analysis confirming compliance with the Specification and (c)
appropriate certificate of conformance confirming compliance with the
registered DMF and with cGMPs. Upon delivery of the Product to
Faulding, Faulding shall as soon as reasonably practicable inform NaPro
by written notice of any damaged or otherwise defective Product alleged
to have been delivered by NaPro and shall, upon the request of NaPro,
return the damaged or defective Product to NaPro and the reasonable
cost of return shall be borne by NaPro and NaPro shall as soon as
practicable replace the damaged or defective Product, provided that
such damage or defect shall have been caused by NaPro and not by
Faulding or the shipper to Faulding. Any failure by Faulding to detect
latent defects in the Product delivered to Faulding shall not affect
NaPro's indemnity obligations under this European Agreement or
obligation to replace such Product except that Faulding shall be
responsible for any claims arising out of defects which should have
been detected by the pre-formulation tests required of Faulding under
applicable regulatory requirements.
3.12 Formulated Product Quality. Each lot of Formulated Product
manufactured by Faulding to be sold in the European Territory pursuant
to this Agreement shall meet the Specification as such Specification
may be amended from time to time, either by mutual agreement of the
parties or in response to directives issued by a relevant government
authority in connection with the Registration or marketing of the
Formulated Product in a particular jurisdiction. All such Formulated
Product shall be manufactured pursuant to GMP. In connection with the
release of Formulated Product manufactured by Faulding, Faulding shall
submit to NaPro appropriate documentation confirming compliance with
the Specification and GMP, together with samples of each lot of such
Formulated Product, and shall provide NaPro with any other information
as may be required for Formulated Product release. Specific
responsibilities for the release of Formulated Product shall be set
forth in the Technical Agreement referred to in Section 4.7.
3.12.1 NaPro shall have the right to conduct a Manufacturing
Audit as set forth herein. For purposes of this Agreement, the
term "Manufacturing Audit" shall mean an audit by no more than
three individuals, reasonably acceptable by both parties, of
that portion of Faulding's manufacturing facility where the
Formulated Product is manufactured and of such documentation
specifically relating to the manufacture of the Formulated
Product, for purposes of confirming that Faulding's procedures
and processes used in manufacturing the Formulated Product
conform to GMP. Any such individuals shall be accompanied by
Faulding personnel at all times, shall be qualified to conduct
manufacturing audits, shall comply with Faulding's rules and
regulations relating to facility security, health and safety,
and shall execute a written agreement to maintain in
confidence all information obtained during the course of any
such audit except for disclosure to NaPro with respect to the
Formulated Product for the purposes set forth in this Section
3.12.1. Manufacturing Audits shall be conducted no more than
two times per calendar year unless otherwise agreed to by
Faulding; provided that if there is a deficiency with respect
to GMP compliance then NaPro may conduct an additional audit
to reasonably confirm that such deficiency has been addressed.
Manufacturing Audits shall be conducted during Faulding's
normal business hours and upon at least thirty (30) days'
prior written notice to Faulding. The written notice shall
identify any specific audit requests that NaPro intends to
make of Faulding and NaPro's contact person with regard to the
Manufacturing Audit. In no event shall a Manufacturing Audit
exceed two (2) days in duration unless such Manufacturing
Audit is delayed by the act or omission of Faulding, and in
all cases NaPro shall ensure that its employees or agents will
conduct each Manufacturing Audit so as not to interfere with
the normal and ordinary operation of Faulding's manufacturing
facility. All Manufacturing Audits shall be at NaPro's sole
expense. Any confidential information obtained by NaPro from
Faulding as a result of this access shall be treated as
Faulding Confidential Information pursuant to the terms of
this Agreement.
3.13 NaPro Indemnity. NaPro shall protect, indemnify and hold
harmless Faulding from and against all Loss incurred by
Faulding by reason of:
3.13.1 Product Defect. Any defect (whether of a design or
manufacturing origin) in the Product supplied to Faulding
pursuant to this European Agreement, including failure to meet
the Specification except to the extent that any defect or
failure is the result of any action or inaction by NaPro at
Faulding's direction evidenced in writing.
3.11.2 Breach. The breach by NaPro of any of its warranties
or obligations under this European Agreement.
3.14 Faulding Indemnity. Faulding shall protect, indemnify and
hold harmless NaPro from and against all Loss incurred by
NaPro by reason of:
3.14.1 Product Defect. Any defect (whether of a design or
manufacturing origin) in the Formulated Product manufactured
by Faulding, other than by reason of a defect in the Product
where such defect is the fault of NaPro.
3.14.2 Breach. The breach by Faulding of any of its
warranties or obligations under this European Agreement.
3.15 Product Liability Insurance. Faulding shall use all reasonable
efforts to obtain product liability insurance in the amount of at least
[THIS PORTION HAS BEEN REDACTED] covering the sale of the Formulated
Product. NaPro represents that as of the date hereof it has product
liability insurance in the amount of at least [THIS PORTION HAS BEEN
REDACTED] Upon obtaining Registration and Faulding's forecast sales
exceed [THIS PORTION HAS BEEN REDACTED], NaPro shall use all reasonable
efforts to obtain product liability insurance in the initial amount of
[THIS PORTION HAS BEEN REDACTED]covering sale of the Product.
3.16 Shipping. NaPro shall deliver the Product ex works NaPro's
manufacturing facility. NaPro shall cooperate with Faulding to ship the
products to Faulding at Faulding's expense. Risk of loss to the Product
shall pass upon delivery to Faulding's common carrier. Faulding shall
be responsible for obtaining suitable import and export licenses
required to ship the Formulated Product into the various countries of
the European Territory.
4 Registration, Marketing, Manufacture Obligations
4.1 Registration. NaPro shall at its own expense use its diligent and
commercially reasonable efforts to rapidly pursue Registration [THIS
PORTION HAS BEEN REDACTED] in the Field throughout the countries in the
European Territory which are listed on Exhibit F attached hereto.
Without limiting the generality of the foregoing, NaPro shall use its
diligent and commercially reasonable efforts to apply for a
Registration [THIS PORTION HAS BEEN REDACTED] and to obtain approval of
such Registration prior to the first anniversary of the filing of such
Registration. NaPro shall promptly retain and maintain during the term
of this European Agreement, at its sole expense, the services of a
recognized and experienced regulatory consulting organization,
reasonably acceptable to Faulding, to assist NaPro with NaPro's
obligations hereunder relating to the procurement of Registration [THIS
PORTION HAS BEEN REDACTED]. If NaPro exercises this option: (i)
Faulding shall provide reasonable regulatory support at a reasonable
cost and (ii) Faulding shall promptly provide to NaPro copies in
Faulding's possession of the product specification and other relevant
registration documents for [THIS PORTION HAS BEEN REDACTED] which are
used in Faulding's applications for Registration, provided, however,
that any such information provided by Faulding to NaPro shall be deemed
Confidential Information (as defined in herein) of Faulding and shall
be used solely for the sale of the [THIS PORTION HAS BEEN REDACTED] by
NaPro pursuant to the terms of this European Agreement, or outside the
territories of the European Agreement and the Master Agreement.
Following Registration by NaPro, Faulding shall be responsible for
negotiating and obtaining pricing approval from the appropriate
authorities.
4.2 [THIS PORTION HAS BEEN REDACTED]
4.3 Marketing, Retention of Exclusive Distribution Rights. Following
Registration, Faulding shall use commercially reasonable efforts to
market the Formulated Product for sale within the European Territory.
Such efforts shall be equivalent to Faulding's efforts relating to
other drugs intended for human antineoplastic use.
[THIS PORTION HAS BEEN REDACTED]
4.4 [THIS PORTION HAS BEEN REDACTED]
4.5 Pre-clinical/Clinical Data. Subject to third party contractual
obligations, the parties agree to share with each other pre-clinical
and clinical data developed by them for the Formulated Product
including raw data and final reports. Each party shall promptly inform
the other of any adverse reactions encountered in their clinical
studies relating to Paclitaxel. Neither party shall alter the
specification of the Formulated Product to be used in the European
Territory without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed. Faulding shall
own all preclinical and clinical data developed by Faulding and shall
have the right to use such data in the European Territory and within
the territory of the Master Agreement pursuant to the terms of such
agreements. Subject to third party contractual obligations, Faulding
hereby grants to NaPro a non-exclusive and fully paid up license to use
such data developed by Faulding outside of the European Territory and
outside the territory of the Master Agreement or for the purposes
specifically permitted to NaPro pursuant to the terms of this
Agreement. NaPro shall own all preclinical and clinical data developed
by NaPro and shall have the right to use such data outside the European
Territory and outside the territory of the Master Agreement. NaPro's
use of such data within the European Territory and the territory of the
Master Agreement shall be governed by the terms of such agreements.
Subject to third party obligations, NaPro hereby grants to Faulding a
non-exclusive and fully paid up license to use such data developed by
NaPro within the European Territory pursuant to the terms of this
Agreement
4.6 Regulatory Filings. Faulding agrees to provide reasonable
assistance in NaPro's regulatory filings for [THIS PORTION HAS BEEN
REDACTED] within the European Territory by providing to NaPro (in a
reasonable time frame) such information, regulatory documents and files
(including obtaining certificates of free sale if necessary) as are
required to obtain Registration in NaPro's name or the name of NaPro's
licensee in the country in question. NaPro shall pay Faulding's out of
pocket costs, and a reasonable fee mutually agreed upon between the
parties, in connection with all assistance rendered by Faulding to
NaPro pursuant to this Section. [THIS PORTION HAS BEEN REDACTED]. NaPro
shall not be required to pay Faulding's costs or expenses for
information, documents and files which have been previously collected,
obtained, or prepared by Faulding.
4.7 Monitoring of Applications for Registration and Pricing. NaPro and
its representatives shall collaborate and consult with Faulding to
formulate strategy for Registration efforts with respect to the [THIS
PORTION HAS BEEN REDACTED] throughout the European Territory. Faulding
shall receive reasonable advance notice of, and shall have the right to
participate in, all meetings and discussions between NaPro and
regulatory authorities and/or NaPro's consultants and representatives
and with respect to Registration. NaPro shall provide Faulding once per
quarter, a written update on the status of Registration efforts
throughout the European Territory. NaPro and its representatives shall
consult with Faulding with respect to NaPro's efforts to obtain
Registration for the [THIS PORTION HAS BEEN REDACTED] in the European
Territory. Faulding shall provide NaPro once per quarter, a written
update on timing issues with respect to pricing negotiations in the
European Territory and any clinical or other developmental/regulatory
efforts with respect to the Formulated Product that Faulding is
undertaking within the European Territory. The parties shall cooperate
with one another in reporting adverse events relating to Formulated
Product. Within the first anniversary of the execution and delivery of
this Agreement, the parties shall enter into a mutually agreeable
Technical Agreement on standard industry terms to include, among other
things, release of Formulated Product and quality assurance and quality
control matters with respect to the Product and Formulated Product.
4.8 Product and Formulated Product. NaPro shall provide Product to
Faulding pursuant to this European Agreement. Faulding shall be
responsible (at Faulding's sole expense) for formulation, finishing,
and packaging of Formulated Product sold by Faulding and importing such
Formulated Product into the European Territory.
4.9 Improvements.
4.9.1 NaPro shall supply the Product to Faulding, in
accordance with the terms and conditions hereunder, with
respect to the development, manufacture and commercialization
of any formulation of Paclitaxel that Faulding develops, or
that Faulding may acquire after the Effective Date.
4.9.2 In the event that NaPro develops or acquires a new
formulation of Paclitaxel (each, an "Option Product") then,
provided that NaPro has the right to offer marketing rights to
such Option Product in the European Territory, then Faulding
shall have a first option to negotiate the terms of an
agreement for the development, registration and
commercialization of such Option Product in the European
Territory, which option shall be exercised by Faulding within
90 days of Faulding's receipt of such written notification
from NaPro. If Faulding elects to enter into such
negotiations, the parties shall negotiate in good faith the
terms of an applicable agreement, which terms shall be
commercially reasonable, arms-length terms, and shall include
a formula for the equal sharing of development costs for such
Option Product.
4.9.3 NaPro shall not supply Paclitaxel to any third party
that has or attempts to develop, manufacture and/or
commercialize a formulation of Paclitaxel in breach of the
exclusivity rights granted to Faulding hereunder, including
the provisions of Sections 3.1.1 and 3.1.2.
4.10 [THIS PORTION HAS BEEN REDACTED].
5 Patents; Proprietary Rights
5.1 Exclusive License Grant. Subject to the terms of this European
Agreement, NaPro hereby grants to Faulding an exclusive license under
the NaPro Patents and other intellectual property to import, use, offer
to sell and sell Formulated Product in the Field in the European
Territory pursuant to the terms of this European Agreement ("License").
Other than: (a) the license granted to IVAX pursuant to the terms of
the IVAX Agreement; (b) as required solely for NaPro's performance of
its obligations under this European Agreement; and (c) as otherwise
explicitly granted to NaPro herein, such License shall be exclusive to
Faulding, even to the exclusion of NaPro, and NaPro shall grant no
further licenses to NaPro Patents to any third party in the Field in
the European Territory.
5.2 Notice of Patent Infringement. Each Party shall promptly
notify the other Party of: (a) any infringement of NaPro Patents; or
(b) third party assertion of infringement by one or both Parties of a
third party patent right. Such notice shall be in writing and shall
set forth the details of the known facts relating to such activities.
5.3 Patent Enforcement. [THIS PORTION HAS BEEN REDACTED].
5.4 Failure to Enforce Patents. [THIS PORTION HAS BEEN REDACTED].
5.5 Alleged Patent Infringement. In the event that a third party
asserts that NaPro and/or Faulding is infringing a third party patent
right as a result of the activities contemplated by this European
Agreement, then NaPro shall have the right and obligation to defend
against such allegations and control all related legal proceedings.
NaPro shall indemnify Faulding for any monetary damages which Faulding
is required to pay to third parties as a result of the following types
of infringement actions:
[THIS PORTION HAS BEEN REDACTED]
Faulding shall indemnify NaPro for any monetary damages which NaPro is required
to pay to third parties as a result infringement actions based on patents which
claim compositions of matter related to [THIS PORTION HAS BEEN REDACTED] other
than [THIS PORTION HAS BEEN REDACTED] marketed by Faulding.
For all other types of infringement actions, NaPro and Faulding shall share
equally any damages owed to third parties as a result of such actions; provided
that any settlement or compromise or consent to the entry of any judgment in any
such actions shall require the mutual written consent of each party hereto.
5.6 [THIS PORTION HAS BEEN REDACTED]
5.7 Prosecution of NaPro Patents. NaPro shall be , at its expense,
solely responsible for (i) securing the grant of any patent
applications within the NaPro Patents; (ii) filing and prosecuting
patent applications on patentable inventions and discoveries relating
to the same; (iii) defending all such applications and NaPro Patents
against third party oppositions and invalidity actions; and (iv)
maintaining in force any issued letters patent relating to the same;
provided that Faulding at its request shall be provided with copies of
all documents relating to such filing, prosecution, defense and
maintenance in sufficient time to review such documents and comment
thereon prior to filing.
6 Termination and Dispute Resolution
6.1 Termination By Either Party; Reorganization Insolvency.
Notwithstanding anything else contained in this European Agreement,
this European Agreement may be terminated by the non-breaching party
giving written notice to the other upon the happening of any of the
following events:
6.1.1 In the event the other party shall commit a material
breach or default under this Agreement, which breach or
default shall not be remedied within ninety (90) days after
the receipt of written notice thereof by the party in breach
or default.
6.1.2 The expiration of twenty-one (21) days after the other
party having a receiver validly appointed for the whole or any
substantial part of its assets or immediately where a court
order is validly made or a resolution of such party's
shareholders passed for the winding up of such party other
than for the purpose of reorganization or reconstruction.
6.1.3 In the event that the other party files a petition in
bankruptcy or similar proceedings or is adjudicated bankrupt
or if a petition for bankruptcy or similar proceedings is
filed against such party and is not stayed or discharged
within forty-five (45) days of such filing or if such party
becomes insolvent or makes an assignment for the benefit of
creditors or any agreement pursuant to bankruptcy law or
otherwise acknowledges insolvency or is adjudged bankrupt or
if such party discontinues business.
6.2 Governing Law. This European Agreement shall be construed in
accordance with and governed by the internal laws of the State of New
York, excluding such state's rules relating to conflicts of laws, and
its form, execution, validity, construction and effect shall be
determined in accordance with such internal laws.
6.3 Effects of Termination. Upon termination of this European
Agreement, (a) the full amount of any amounts outstanding by one party
to the other shall be paid forthwith, and (b) all rights and licenses
granted hereunder, other than rights to use clinical data shall
terminate. Notwithstanding the termination of this European Agreement,
the obligations of the parties with respect to confidentiality pursuant
to Section 7 hereof shall survive for ten (10) years following such
termination, and neither party nor any of its respective Affiliates
shall utilize any of the Confidential Information provided by the other
party pursuant to this European Agreement. The parties shall provide
one another with the clinical data to the extent not already provided.
6.4 Arbitration Hearings. Any disputes arising under or relating to
this European Agreement shall be settled by binding arbitration in
accordance with the CPR Rules for Non-Administered Arbitration by a
single arbitrator, and such arbitration proceeding shall be held in New
York, New York, unless the parties agree otherwise in writing. Any
arbitration conducted pursuant to the provisions of this Section shall
be conducted as follows, unless the parties agree otherwise in writing:
(a) In rendering judgment, the arbitrator may not provide for
punitive or similar exemplary damages.
(b) Any arbitration under this European Agreement shall be
completed within thirty days after the parties submit briefings with
respect thereto.
(c) The award rendered by the arbitrator shall be in writing.
(d) The parties agree that the decision shall be the sole,
exclusive and binding remedy between them regarding any and all
disputes, controversies, claims and counterclaims presented to the
arbitrators. Application may be made to any court having jurisdiction
over the party (or its assets) against whom the decision is rendered
for a judicial recognition of the decision and an order of enforcement.
7 Confidentiality
7.1 Transfer of Information. Each party has provided to the other
information relating to Paclitaxel in connection with negotiation of
the Master Agreement and performance of the Master Agreement and each
party will in the future provide information in relation to this
European Agreement which the disclosing party considers to be
confidential ("Confidential Information"). "Confidential Information"
shall not include any information which:
7.1.1 Is now, or hereafter becomes, through no act or failure
to act on the part of the receiving party, generally known or
available to the public.
7.1.2 Is known to the receiving party at the time of
disclosure provided that the receiving party promptly notifies
the disclosing party in writing of this prior knowledge within
a reasonable time of discovery of such prior knowledge.
7.1.3 Is hereafter furnished to the receiving party by a third
party, as a matter of right and without restriction on
disclosure, provided that the receiving party promptly
notifies the disclosing party of this third party disclosure
within thirty (30) days thereafter.
7.1.4 Is disclosed with the written approval of the
disclosing party.
7.2 Restricted Disclosure. The parties will restrict dissemination of
Confidential Information received from the other party to only those
employees with a need to know such information, except that:
7.2.1 In the case of Faulding, such Confidential Information
may be provided to regulatory authorities in connection with
Registration for the Formulated Product, or for the purposes
allowed under the Master Agreement.
7.2.2 In the case of NaPro, such Confidential Information may
be provided to regulatory authorities in connection with an
application for a Registration for the Formulated Product.
7.3 Precautions. Each party shall maintain Confidential Information
received from the other party as confidential, and protect the same
from misuse, espionage, loss or theft and shall not disclose the
Confidential Information to others except as provided in Section 7.2.
8 Force Majeure
8.1 Force Majeure. Neither party shall be liable to the other in the
event that performance of its obligations hereunder shall be prevented
by any cause beyond its reasonable control, including without
limitation, acts of God, acts of government, accident, fire, delay or
destruction of means of transport or other disaster ("events of force
majeure"), but the affected party shall use reasonable efforts to avoid
or remove the cause of such nonperformance and shall continue
performance hereunder with the utmost dispatch whenever such cause is
removed; provided that if such event of force majeure continues for a
period of twelve months then the other party shall have the right to
terminate the term of this European Agreement on a country by country
basis; provided further that if NaPro has not complied with its
obligation to provide Safety Stock during the occurrence and
continuance of the event of force majeure, then Faulding shall have the
right to terminate the term of this European Agreement on a country by
country basis to the extent that such event of force majeure continues
for a period of nine months.
9 Miscellaneous Provisions
9.1 Assignment/Third Parties. Neither party shall assign any rights or
obligations hereunder to third parties without the agreement of the
other party; provided that either party may assign any of its rights or
obligations hereunder to its Affiliates without obtaining such consent;
and provided that such assigning party shall remain liable for the
performance of such Affiliate. Notwithstanding this provision, within
the European Territory Faulding shall be entitled to perform any one or
more of its obligations according to this European Agreement by
appointing third parties to do so on its behalf and in its name,
provided that NaPro has given Faulding its prior written consent to
each such appointment, which consent shall not be unreasonably withheld
or delayed and provided that Faulding remains liable for the
performance of such third parties. NaPro may assign this European
Agreement to a third party in connection with the sale of all of
NaPro's business relating to Paclitaxel (other than Bristol-Myers
Squibb), provided that such third party agrees in writing to be bound
by all of the terms of this European Agreement.
9.2 Relationship of Parties. Nothing contained in this European
Agreement shall be construed so as to operate or to place any party
hereto in the relationship of employee or agent or joint venturer or
legal representative of the other party and it is hereby expressly
agreed and acknowledged that each of the parties hereto is an
independent contracting party which does not have the authority or
power for or on behalf of the other party hereto to enter into any
contract to incur debts, to accept money, to assume any obligations or
to make any warranties or representations whatsoever.
9.3 Waiver. The failure of either of the parties to insist upon a
strict performance of any of the provisions of this European Agreement
shall not be deemed a waiver of any subsequent breach of such provision
or of the provision itself.
9.4 Contract Variation. Any modification, alteration, change or
variation in any provision of this European Agreement shall be only
made in writing, executed by both parties.
9.5 Notices. Notices by one party to the other shall be in writing by
registered mail or major air courier delivery (receipt provided) or by
telecopy confirmed both by contemporaneous telephone conversation with
the recipient and by airmail letter.
Notices by Faulding to NaPro shall be directed to NaPro's General
Counsel and Chief Financial Officer at its offices at 6304 Spine Road Unit A
Boulder, CO 80301, USA. Fax: (303) 530-1296.
Notices by NaPro to Faulding shall be directed to Central Laboratories,
Limited, c/o Faulding Pharmaceuticals, plc. at Queens Way, Royal Lemington Spa,
Warwickshire, United Kingdom CV313RW, Fax 011-44-1926-821-047, attention:
Company Secretary; with a copy to F.H. Faulding & Co. Limited at 115 Sherriff
Street, Underdale, South Australia 5032, Australia, attention: Secretary, Fax:
011-61-8-8234-8230; and a copy to Faulding Pharmaceuticals at 650 From Road,
Paramus, NJ 07652, attention: General Counsel, Fax (201) 225-5510.
9.6 Entire Agreement. Except as set out in this European Agreement,
this European Agreement constitutes the entire agreement of the parties
(and into which all prior negotiations, commitments, representations
and undertakings with respect to the subject matter are merged and
there are no other undertakings, warranties or agreements between the
parties relating to the subject matter of this European Agreement and
this European Agreement is not based upon any representations as to
profit or worth nor has any representation been made (whether by this
European Agreement or otherwise) to induce NaPro or Faulding to accept
and execute this European Agreement.
9.7 Compliance with Law. It shall be the responsibility of each party
to follow all procedures and take all actions which are necessary or
required for agreements of this type by the laws, treaties or
regulations applicable in each country in which that party shall deal
in the Product (in the case of NaPro) and the Formulated Product (in
the case of NaPro and Faulding). Faulding shall ensure that the
storage, marketing or sale of the Formulated Product does not breach
any law or statute rule or regulation relating to drugs in each country
in which Faulding shall deal in the Formulated Product.
9.8 Interpretation. Headings in this European Agreement are for ease of
reference only and shall not be used to interpret this European
Agreement. The language of this European Agreement shall be deemed to
be the language mutually chosen by the parties and no rule of strict
construction shall be applied against either party hereto.
9.9 Counterparts. This European Agreement may be executed in one or
more counterparts, each of which shall be an original, but which
together shall form one agreement.
IN WITNESS WHEREOF, the parties hereto have caused this European
Agreement to be executed by their duly authorized representatives as of
the date hereof.
CENTRAL LABORATORIES, LIMITED NAPRO BIOTHERAPEUTICS, INC.
By: /s/ Edward Tweddell By: /s/ Kai P.Larson
------------------------ ---------------------------
Kai P. Larson
Vice President, General Counsel
For good and valuable consideration, F.H. Faulding & Co. Limited hereby
guarantees the performance of the obligations of Central Laboratories, Limited
under the terms of this European Agreement.
F.H. FAULDING & CO. LIMITED
By: /s/Edward Tweddell
------------------
Name: Edward Tweddell
---------------
Title: CEO