UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
June 22, 2005
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Date of Report (Date of earliest event reported)
ELITE PHARMACEUTICALS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-45241 22-3542636
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
165 Ludlow Avenue, Northvale, New Jersey 07647
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(Address of principal executive offices)
(201) 750-2646
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(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
This Amendment No. 2 to the Form 8K, amends the Form 8K dated June 22, 2005 and
filed with the Securities and Exchange Commission (the "Commission") on June 28,
2005 (the "Original Filing"), as amended by Amendment No. 1 to the Form 8K filed
with the Commission on September 6, 2005 is being filed for the purpose of
amending Exhibit 10.1. Except as indicated below and filed herewith, the
exhibits listed below were filed as exhibits to the Original Filing.
Item 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On June 22, 2005, the Registrant entered into a Product Development and License
Agreement with Pliva, Inc., a New Jersey corporation ("Pliva"). The agreement
provides for the development and license of a controlled released AB rated
generic anti-infective product formulated by the Registrant. The Registrant
intends to develop all dose strengths of the product. Under the agreement, Pliva
will make upfront payments and milestone payments, in the aggregate amount of
$550,000, to the Registrant. The Registrant will manufacture the product and
Pliva will market and sell the product. The development costs will be paid by
Pliva and the Registrant and the profits will be shared equally. The initial
term of the agreement is for a ten (10) year period from the date the product is
first commercially sold by Pliva unless terminated earlier upon the occurrence
of certain events.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS
a) Not applicable.
b) Not applicable.
c) Exhibits
10.1 Product Development and License Agreement, dated as of June
22, 2005 between Pliva, Inc. and Elite Laboratories, Inc.*
99.1. Copy of Press Release, dated June 28, 2005
* The Registrant has requested confidential treatment with respect to the
referenced exhibit. In the event that the Securities and Exchange Commission
should deny such request in whole or in part, such exhibit or the relevant
portions thereof shall be filed by amendment to this Current Report on Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 10, 2005
ELITE PHARMACEUTICALS, INC.
By: /s/ Bernard Berk
------------------------------
Name: Bernard Berk
Title: Chief Executive Officer
CONFIDENTIAL TREATMENT REQUEST
[*] INDICATES INFORMATION THAT HAS BEEN OMITTED PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST AND THIS INFORMATION
HAS BEEN FILED UNDER SEPARATE COVER WITH THE COMMISSION
PRODUCT DEVELOPMENT AND LICENSE AGREEMENT
THIS PRODUCT DEVELOPMENT AND LICENSE AGREEMENT (together with all exhibits and
schedules, the "Agreement"), dated as of June 22, 2005 ( the "Effective Date")
by and between ELITE LABORATORIES, INC., a corporation organized and existing
under the laws of Delaware, and having its principal place of business at 165
Ludlow Avenue, Northvale, NJ 07647 ("ELITE") and PLIVA, INC., a corporation
organized and existing under the laws of New Jersey, and having its principal
place of business at 72 Eagle Rock Avenue, East Hanover, NJ 07936 ("PLIVA").
RECITALS:
PLIVA is engaged in the development, manufacturing, marketing and distribution
of generic pharmaceutical products in the Territory (as defined below) and
possesses qualified marketing and distribution systems and organizations to
enable it to effectively promote, market and distribute such products throughout
the Territory;
ELITE is the owner of Know-How (as defined below) and other proprietary
technology relative to the Product (as defined below);
ELITE and PLIVA desire to further develop and market the Product in the
Territory; and
Elite desires to grant to PLIVA the exclusive right to purchase, market, promote
and distribute the Product in the Territory under PLIVA's label, and PLIVA
desires to accept and exercise the right, all upon such terms and conditions as
are set forth in this agreement.
ELITE and PLIVA agree as follows:
1. DEFINITIONS
The following terms as used in this Agreement shall have the meanings
set forth in this Article:
1.1. "AFFILIATE" shall mean any corporation, firm, partnership or
other entity, which owns or controls, is owned or controlled by,
or is under common control with, PLIVA or ELITE, as the case may
be. The term "control" means the ownership, directly or
indirectly, of at least fifty percent (50%) of the equity or
voting power of the owned or controlled entity.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
1.2. "APPLICABLE LAW" shall mean the United States Food, Drug and
Cosmetic Act of 1938, as may be amended from time to time, and
the regulations and guidelines promulgated pursuant thereto, as
amended from time to time, and all other laws, regulations,
rules and guidelines of any governmental authority in the
Territory pertaining to the development, manufacture, packaging,
labeling, storage, distribution, marketing, sale or intended use
of the Product.
1.3. "cGMP" shall mean all applicable good manufacturing practices,
including but not limited to current "good manufacturing
practices" and any other methods used for the manufacturing,
testing, validation, labeling, packaging, storage, shipment and
installation of any and all pharmaceutical products, equipment
and related materials to ensure that such products and materials
meet the legal requirements for safety and effectiveness as
established by the United States Food and Drug Administration
("FDA") or comparable governmental authority in any country
outside the United States where the Product is distributed under
this Agreement, including, specifically, without limitation,
Title 21, Part 211 of the United States Code of Federal
Regulations.
1.4. "CONFIDENTIAL INFORMATION" shall mean any information pertaining
to the Product from time to time communicated by or on behalf of
the disclosing party, including, without limitation, trade
secrets, Know-How, pricing, costs, suppliers, licensees,
customer information, patent rights, scientific, technical,
commercial and medical product development information,
manufacturing, methods, processes and production, contractual
arrangements, results, discoveries and inventions, procedures
and forms, financial and other business information, forecasts,
strategies and other data, whether of a written, oral or visual
nature.
1.5. "COST OF GOODS" shall mean (i) ELITE's fully absorbed direct and
indirect cost of manufacturing, labeling and packaging the
Product, including without limitation the cost of all active
pharmaceutical ingredients, materials, and components included
in the Product, plus (ii) [*]
1.6. "COMMERCIALIZATION", "COMMERCIALIZING", or "COMMERCIALIZE" shall
mean all activities relating to manufacture, promotion,
distribution, marketing and sale of the Product in the
Territory.
1.7. "ED-COSTS" shall mean the fees, costs and expenses incurred by
Elite in meeting its obligations pursuant to Section 2.1 and
Section 2.2(a) plus any amount paid to outside counsel by ELITE
in procuring the freedom to operate opinion provided for in
Section 4.2.
1.8. "FIELD" shall mean treatment of urinary tract infections.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
2
1.9. "KNOW-HOW" shall mean all technology, data, information,
processes and methods necessary or useful in the production,
testing, registration or marketing of the Product.
1.10. "LICENSEE" shall mean the recipient of a license granted by
ELITE to Commercialize the Product in the Territory. PLIVA shall
be the designated and exclusive Licensee hereunder for the
Territory.
1.11. "MARKETING AUTHORIZATION" shall mean the final approval of all
regulatory authorities necessary to market the Product in a
particular country in the Territory, including as applicable
pricing and reimbursement approval and all other approvals
required in a particular country in the Territory for the
marketing, distribution and sale of the Product in the Field in
the normal course of business.
1.12. "NET PROFIT" shall mean the Price LESS the Cost of Goods.
1.13. "PD-COSTS" shall mean the fees, costs and expenses incurred by
PLIVA in connection with the Studies plus the milestones
actually paid to ELITE pursuant to Section 5.2 plus any amount
paid to outside counsel by PLIVA in procuring the freedom to
operate opinion provided for in Section 4.2.
1.14. "PRICE" shall mean the sales price paid by third parties to
PLIVA for Product, less only the following deductions to the
extent actually incurred, all determined in accordance with
generally accepted accounting principles:
(1) customs and excise duties or other sales taxes (but, for
the avoidance of doubt not income or corporation tax),
directly related to the sale of the Product;
(2) costs incurred by PLIVA in respect of transport, shipping
and insurance costs; and industry standard or mandatory
discounts or rebates related to the sale of the Product,
including, without limitation, any credit in respect of
any Federal or state Medicaid, Medicare or similar
program; and
(3) amounts repaid or credited by PLIVA, consistent with its
ordinary or customary business practices for similar
products, by reason of the rejection or return of goods
and allowances, including trade, quantity and cash
discounts and any other adjustments, including those
granted on account of price or shelf stock adjustments,
billing errors, rejected goods, damaged goods, recalls,
returns, rebates, chargebacks, reimbursements, similar
payments granted or given to wholesalers or other
distributors, buying groups, health care insurance
carriers or other institutions.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
3
1.15. "PRODUCT" shall mean twice-a-day nitrofurantoin 100 mg capsule
that is approved by FDA as AB rated as bioequivalent to
Macrobid(R), a product sold commercially by Proctor and Gamble
(the "REFERENCED DRUG"), for use in the Field and which meets
the specifications set forth in the ANDA to be filed pursuant to
this Agreement (the "SPECIFICATIONS").
1.16. "TERM" shall have the meaning set forth in Section 12 hereof.
1.17. "TERRITORY" shall mean the United States of America and its
territories and possessions, including the Commonwealth of
Puerto Rico.
2. PRODUCT DEVELOPMENT
2.1. ELITE shall be responsible for Product formulation, methods
development and validation.
2.2. ELITE shall obtain and submit to PLIVA, for PLIVA's review and
approval (such approval not to be unreasonably withheld,
conditioned or delayed), a proposal or proposals, including
costs, from a third party to conduct pilot and pivotal
bioequivalence studies for the Product to evidence
bioequivalence to the Referenced Drug in accordance with study
plan protocols to be agreed to by ELITE and PLIVA (the
"STUDIES"). Following its approval, PLIVA shall engage such
third party to conduct the Studies, and the cost of all Studies
shall be borne by PLIVA.
(a) ELITE shall complete any additional formulation work, if
necessary, complete process development and scale-up,
including in-process controls and all necessary stability
studies with respect to the Product, and manufacture
Product biobatches reasonably required to conduct such
Studies.
2.3. Each of ELITE and PLIVA agrees that, during the Term, except for
the Studies contemplated hereunder, neither it nor any of its
Affiliates will conduct clinical studies for any other generic
version of nitrofurantoin, whether for itself or any third
party, for distribution or sale in the Territory.
2.4. ELITE and PLIVA shall each have the right to discontinue the
Studies at any time prior to completion of such Studies upon
three (3) days' prior written notice to the other party, if
ELITE or PLIVA, as the case may be, reasonably believes that
health and safety issues may arise.
2.5. ELITE shall inform PLIVA of any changes in the Product
development plan. ELITE shall use commercially reasonable
efforts to assure PLIVA
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
4
that the Product shall be available to PLIVA to market at the
time agreed to by ELITE and PLIVA in writing pursuant to this
Agreement.
2.6. ELITE shall perform its obligations in this Section 2 in
accordance with Applicable Laws.
3. REGULATORY FILINGS
Following successful completion of the pivotal biostudy for the
Product, ELITE shall be responsible for the preparation, filing and
prosecution with the FDA of an abbreviated New Drug Application
("ANDA") for the Product. The ANDA shall be in the name of ELITE. ELITE
shall bear the cost of the ANDA preparation, filing and prosecution.
Each party shall reasonably cooperate with the other party in
connection with the preparation of the ANDA. Each party shall have the
right to review and comment upon any and all prepared applications and
filings prior to submission to the relevant governmental authorities.
4. INTELLECTUAL PROPERTY OWNERSHIP, MAINTENANCE AND DEFENSE
4.1. INTELLECTUAL PROPERTY. All rights, title and interest in and to
all intellectual property rights relating to the Product,
including without limitation, inventions, discoveries,
creations, information, data, reports, results, and/or
improvements to any Confidential Information, Know-How, study
inventions, regulatory filings, patent rights, processes,
techniques, and any improvements, modifications, alterations
thereto and patents issuing thereon made during the Term hereof
whether in connection with the Study or otherwise ("Intellectual
Property Rights") are and shall, in all events, be the sole and
exclusive property of ELITE. PLIVA shall take such actions, and
execute and deliver such documents, as may be reasonably
requested from time to time by ELITE, at ELITE's expense, to
perfect ELITE's Intellectual Property Rights. ELITE grants to
PLIVA and PLIVA accepts, during the Term, an exclusive,
non-transferable license to ELITE's Intellectual Property Rights
to allow PLIVA to offer for sale the Product in the Territory.
PLIVA may not grant any sublicense to ELITE's Intellectual
Property Rights without ELITE's prior written consent, which
consent may be granted or withheld in ELITE's sole discretion.
4.2. FREEDOM TO OPERATE. PLIVA and ELITE shall, under a joint defense
agreement, obtain, within 120 days of the effective date, a
"freedom to operate" opinion from outside counsel with respect
to the manufacture, use and sale of the Product in each country
in the Territory. Either party shall have the right to terminate
this Agreement with respect to a country if not satisfied with
the opinion(s) for such country by notifying the other party in
writing within 30 days of receipt of the opinion. The
obligations of each party accrued to through the Effective Date
of any such notice,
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
5
including the obligation to reimburse for costs incurred, shall
survive termination of this Agreement.
4.3. DEFENSE OF PRODUCT. PLIVA and ELITE shall be responsible for,
and shall share equally the cost of, defending the Product and
the parties hereto against any lawsuits in accordance with the
terms and conditions of Article 7.
5. FINANCIAL TERMS
5.1. PAYMENTS. For all Product supplied to PLIVA under this Agreement
ELITE shall invoice PLIVA, referencing in each invoice the
purchase order(s), if any, to which the invoice relates, the
Cost of Goods and the quantity of units of Product shipped.
PLIVA shall pay each invoice within forty five (45) days of the
invoice date. Any late payments or underpayments under this
Agreement shall bear interest at the prime rate from the initial
due date until payment in full.
5.2. MILESTONES. PLIVA shall pay to Elite the following milestones
payments:
a) [*] simultaneously with the execution and delivery of this
Agreement, or, if later, on the thirtieth day following
delivery by ELITE of the legal opinion described in
Section 4.2 of this Agreement (unless the Agreement has
theretofore been terminated under Section 4.2).
b) [*] upon (i) completion of a successful pivotal
bioequivalence study where the Product meets the FDA
guidelines for bioequivalence, and (ii) submission to and
acceptance by the FDA of the ANDA for the Product .
c) [*] upon FDA approval of the Product.
5.3 PROFIT SHARE.
(a) Within forty five (45) days following the end of each calendar quarter
during the Term following the first commercial sale of the Product
hereunder, PLIVA shall provide ELITE with a detailed statement for such
period showing for all Product sold by PLIVA during such period the
number of units sold, the Price for those units, and the Net Profit for
such period. PLIVA shall pay to ELITE a percentage of the Net Profit
for such period within fifteen (15) days of delivery to ELITE of the
statement showing such calculation.
(b) The percentage payable to ELITE shall be determined as follows.
(1) Within thirty (30) days of FDA approval of the Product, ELITE
shall provide to PLIVA a detailed statement of the ED-Costs and
PLIVA shall provide to ELITE a detailed statement of the
PD-Costs.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
6
(2) If the ED-Costs exceed the PD-Costs, then ELITE shall be
entitled to recover the amount by which the ED-Costs exceed the
PD-Costs.
(3) If the PD-Costs exceed the ED-Costs, then PLIVA shall be
entitled to recover the amount by which the PD-Costs exceed the
PD-Costs.
(4) The Party entitled to recover the amount of the difference shall
receive or retain, as the case may be, [*] of the Net Profit
until such amount is recovered. Thereafter, the Parties shall
[*].
5.4 AUDIT; INSPECTION. Within one hundred eighty (180) days following
the close of each calendar year during the Term and for a period of twenty four
months following expiration or earlier termination of this Agreement, upon the
request of a party ("Requesting Party") the other party shall provide the
Requesting Party's accountants, at Requesting Party's sole cost and expense,
with access, during regular business hours and upon reasonable prior written
notice, and subject to the confidentiality undertakings contained in Section 10
of this Agreement, to the other party's books and records relating to the
Product in the Field in the Territory solely for purposes of verifying costs and
expenses and Net Profit in connection with this Agreement, and for verifying the
accuracy of the calculations hereunder for the calendar year then ended and for
the two calendar years prior thereto. If any such verification shows any
underpayment or overpayment, a correcting payment or a refund shall be made
within thirty (30) days of completion of such verification and submission of the
results thereof, with details of the calculations included therein. In the event
such verification shows an underpayment of more than [*] was made by the
Requesting Party to the other party, the other party will be required to pay for
the costs reasonably incurred by Requesting Party in connection with its
inspection.
6. MANUFACTURE, SUPPLY AND COMMERCIALIZATION OF PRODUCT
6.1 During the Term, and on and subject to the terms and conditions of
this Agreement, ELITE shall manufacture and supply or, with PLIVA's
prior written consent (such consent not to be unreasonably withheld,
conditioned or delayed), subcontract the manufacture and supply of, the
Product in the Territory exclusively to PLIVA for resale by PLIVA in
the Territory, in such quantities and at such times as are specified in
the purchase orders placed by PLIVA pursuant to this Agreement. PLIVA
shall purchase its requirements of Product for resale in the Territory
exclusively from ELITE.
6.2 ELITE will supply the Product to PLIVA in finished form, labeled in
accordance with the ANDA, and packaged ready for resale in accordance
with Section 6.5 (d) hereof. ELITE shall manufacture, store and ship
the PRODUCT to PLIVA, and PLIVA shall store, ship, market and
distribute the PRODUCT in the Territory, in accordance with cGMPs,
Applicable Laws, the Specifications, and the terms and conditions of
this Agreement.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
7
6.3 The Product to be supplied by ELITE to PLIVA hereunder shall bear
PLIVA's label. ELITE shall provide to PLIVA a sample of the printed
labeling and packaging for the Product for PLIVA's approval. ELITE
shall label and package all Product in accordance with the ANDA, cGMPs,
and the applicable requirements of the FDA. PLIVA grants to ELITE a
limited license to use PLIVA's trademarks for purposes of packaging and
labeling Product as described in this section.
6.4 PLIVA shall diligently market and promote the Product in the
Territory, using such commercially reasonable efforts to maximize
Product sales and Net Manufacturing Profits. PLIVA shall devote such
marketing efforts to the Product as it would exert for products of its
own with comparable market size and profit potential under comparable
competitive conditions. At least once per calendar quarter PLIVA shall
provide to ELITE, in writing, an outline of PLIVA's sales expectations
for the Product for the upcoming three calendar quarters.
6.5 (a) At least one hundred twenty (120) days prior to the
anticipated launch date of the Product in the Territory, and thereafter
at least thirty days prior to each calendar quarter during the Term,
PLIVA shall provide ELITE with a written forecast of PLIVA's estimated
Product requirements for each of the following four calendar quarters.
The forecasts will be non-binding, except as provided below.
(b) PLIVA shall make all Product purchases hereunder by
submitting firm purchase orders to ELITE. Each such purchase order
shall be in writing and shall specify the quantity of Product ordered
(which shall be in batch size, or multiples thereof) and the requested
delivery date(s). Purchase orders shall be placed at least ninety days
before the desired delivery date. Each purchase order shall be subject
to ELITE's acceptance, in whole or in part. In the event of a conflict
between the terms and conditions of any purchase order and this
Agreement, the terms and conditions of this Agreement shall prevail.
(c) In each calendar quarter, PLIVA shall be obligated to
place purchase orders for a quantity of Product constituting at least
seventy five percent of the estimated quantity for that quarter as
contained in the forecast provided in the previous quarter.
(d) All Product supplied under this Agreement shall be
delivered FOB ELITE's manufacturing site. PLIVA shall pay all freight,
insurance and other charges applicable to the sale and transport of the
Product to PLIVA's facilities. Title and risk of loss and damages to
Product shall pass to PLIVA upon delivery to PLIVA's designated
carrier.
(e) If a shipment of Product of any portion thereof fails to
conform to the applicable Specifications, then PLIVA shall have the
right to reject such nonconforming shipment of Product or the
nonconforming portion thereof, as the case may be. PLIVA shall give
written notice to ELITE of its rejection within
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
8
fifteen days of PLIVA's receipt of the Product, specifying the grounds
for such rejection. The nonconforming Product shall be held for ELITE's
disposition, or shall be returned to ELITE, as directed by ELITE in
writing. Nonconforming Product shall be returned to ELITE within ten
(10) business days of ELITE's so directing. ELITE shall replace each
nonconforming shipment of Product, or the nonconforming portion
thereof, with conforming Product as soon as reasonably practicable
after receipt of notice or rejection thereof. If ELITE disputes any
claim of nonconforming Product and the parties cannot resolve the
dispute within thirty days, then the dispute shall be subject to the
dispute resolution provisions of Section 17 hereof.
(f) ELITE and PLIVA each agree to notify the other within
twenty-four (24) hours of any serious and unexpected adverse reactions
reported to either of them resulting from the use of the Product
(whether inside or outside of the Territory). ELITE and PLIVA shall
each notify the other promptly of any other complaints or adverse
reactions from third parties reported to either of them resulting from
use of the Product sold under PLIVA's label.
(g) (i) In the event either party believes it may be necessary
to conduct a recall, field correction, market withdrawal, stock
recovery, or other similar action with respect to any Product sold by
ELITE to PLIVA under this Agreement (a "RECALL"), ELITE and PLIVA shall
consult with each other as to how best to proceed, it being understood
and agreed that the final decision as to any Recall of any Product
shall be made by ELITE; provided, however, that PLIVA shall not be
prohibited hereunder from taking any action that it is required to take
by applicable law. (ii) In the event the Recall of the Product is
solely as a result of (1) the manufacture, supply, storage, or
distribution by ELITE of Product; (2) a breach by ELITE of its
representations, warranties or obligations under this Agreement; or (3)
the grossly negligent or intentionally wrongful act of ELITE or its
representatives, then ELITE shall bear all costs and expenses of such
Recall, including, without limitation expenses related to
communications and meetings with all required regulatory agencies,
expenses of replacement stock (not including backorder reimbursement),
the cost of notifying customers and costs associated with shipment of
Product being recalled from customers and shipment of an equal amount
of replacement Product to those customers (collectively, "RECALL
COSTS"). In all other events, PLIVA shall bear all of the Recall Costs.
7. INDEMNIFICATION
7.1 INFRINGEMENT CLAIMS. ELITE and PLIVA shall be jointly responsible
for searching, reviewing and evaluating any patents or published patent
applications pertaining to the manufacture, use and sale of Product in
each country in the Territory, including without limitation, relating
to active pharmaceutical ingredients and Product formulation. PLIVA and
ELITE jointly shall investigate and defend any and all claims, actions
and proceedings resulting from an assertion against ELITE or PLIVA (or
a Licensee if ELITE and PLIVA have agreed to indemnify
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
9
such Licensee) that the Product infringes upon a third party's
intellectual property rights ("INFRINGEMENT CLAIM"). PLIVA and ELITE
shall be jointly responsible for the cost and expenses of the defense,
including without limitation damages, awards, and settlement costs. The
parties shall provide such assistance as the other party may from time
to time reasonably request in connection with the evaluation and
defense of any potential or actual Infringement Claim.
7.2 ENFORCEMENT PROCEEDINGS. ELITE and PLIVA shall jointly bring
enforcement proceeding against any third party if ELITE and PLIVA
determine jointly that a third-party is likely infringing upon the
rights of ELITE, PLIVA or a Licensee of the Product. PLIVA and ELITE
shall be jointly responsible for the cost and expenses arising from
such enforcement proceeding, including without limitation damages,
awards, and settlement costs. All such costs and expenses shall be
allocated equally between ELITE and PLIVA. ELITE and PLIVA shall share
equally all amounts awarded in connection with any such enforcement
proceeding.
7.3 INDEMNIFICATION OBLIGATIONS OF THE PARTIES.
(a) Each party shall indemnify, defend and hold harmless the
other party and its Affiliates from and against any and all
losses, costs, expenses, liabilities, claims, actions,
damages, personal injury, or loss of life, including without
limitation, reasonable attorney's fees (collectively,
"Losses"), arising directly from such party's (i) grossly
negligent acts or omissions or willful misconduct; and/or (ii)
breach of this Agreement.
(b) ELITE and PLIVA shall jointly defend any and all claims,
actions and proceedings brought by any third party relating to
the Product. PLIVA and ELITE shall be jointly responsible for
the cost and expenses of defense, including without limitation
damages, awards and settlement costs, except for Losses for
which one party is entitled to indemnification from the other
party under Section 7.3 (a) above. ELITE and PLIVA shall
jointly select counsel for any such claim, action or
proceeding. Neither party may settle or consent to judgment in
any such action without the other party's consent if such
settlement or judgment would impose any obligation, financial
or otherwise, on the non-settling party that would not be
fully covered by the settling party's indemnification under
this Agreement.
7.4 NOTWITHSTANDING ANY PROVISION TO THE CONTRARY CONTAINED IN THIS AGREEMENT,
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR A LICENSEE FOR
ANY CONSEQUENTIAL, INCIDENTAL, OR PUNITATIVE DAMAGES (INCLUDING LOSS OF PROFITS,
LOSS OF ENTERPRISE, AND LOSS OF OPPORTUNITY) , REGARDLESS OF WHETHER FOR BREACH
OF WARRANTY, CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR
OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
10
8. INSURANCE
Each party agrees to maintain in force, during the Term and for a
period of 24 months thereafter, product liability insurance coverage in
minimum limits of $5,000,000 each. Each party shall instruct its
insurance carrier to notify the other party of any change, modification
or cancellation of insurance thirty days prior to such change,
modification or cancellation taking effect.
9. REPRESENTATIONS AND WARRANTIES
9.1 ELITE represents and warrants to PLIVA, as of the Effective Date,
as follows:
(1) ELITE has the legal right and full corporate power and
authority to enter into this Agreement and to perform the
same;
(2) the Agreement constitutes valid and binding obligations on
ELITE in accordance with its terms except as limited by
applicable bankruptcy, insolvency, reorganization and
other laws of general application affecting the
enforcement of creditors' rights generally, and except as
enforcement of rights to indemnity and contribution
hereunder may be limited by principles of public policy;
(3) ELITE has taken all corporate action required by it to
authorize it to enter into and to perform the Agreement;
(4) ELITE has the right to disclose Know-How to PLIVA as is
necessary for PLIVA to perform its obligations hereunder;
(5) to ELITE's knowledge, there are no infringement
proceedings pending against ELITE in connection with the
Product;
(6) there are no agreements between ELITE and any third party
that conflict with this Agreement;
(7) no consent or approval of any third party, court or
governmental agency is required in connection with the
execution and performance of this Agreement by ELITE;
(8) ELITE will manufacture all Product in accordance with
cGMPs and all Applicable Laws;
(9) ELITE is not enjoined from manufacturing nor is ELITE
currently sanctioned by the FDA pursuant to any issued 483
inspection reports;
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
11
(10) ELITE's employees and agents are not and have not been
debarred by FDA pursuant to 21 USC Section 335(a) or
involved in any investigation or proceeding which could
lead to debarment;
(11) ELITE does not and will not knowingly employ or use the
services of any individual or entity that has been
debarred or convicted of a felony or who is currently
under investigation for such conviction;
(12) all laboratory, scientific, technical or commercial
information that is submitted by ELITE to PLIVA or to any
regulatory health authority relating to the Product should
be complete, true, accurate and correct and shall not
contain any knowingly false information, misrepresentation
and/or omission; and
(13) ELITE will perform all necessary record keeping as
required under applicable federal and state laws regarding
the manufacture of the Product, environmental impact of
the manufacturing and all potential or adverse product
defects.
ELITE MAKES NO OTHER WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, EXCEPT
THOSE EXPRESSLY MADE HEREIN. ELITE SPECIFICALLY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A
PARTICULAR PURPOSE.
9.2 PLIVA represents and warrants to ELITE, as of the Effective Date, as
follows:
(1) PLIVA has the legal right and full corporate power
and authority to enter into this Agreement and to
perform the same;
(2) the Agreement constitutes valid and binding
obligations on PLIVA in accordance with its terms
except as limited by applicable bankruptcy,
insolvency, reorganization and other laws of general
application affecting the enforcement of creditors'
rights generally, and except as enforcement of rights
to indemnity and contribution hereunder may be
limited by principles of public policy;
(3) PLIVA has taken or will have taken all corporate
action required by it to authorize it to enter into
and to perform the Agreement;
(4) there are no agreements between PLIVA and any third
party that conflict with this Agreement;
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
12
(5) no consent or approval of any third party, court or
governmental agency is required in connection with
the execution and performance of this Agreement by
PLIVA;
(6) PLIVA will transport, store, handle, distribute,
market and sell all Product in accordance with cGMPs
and all Applicable Laws;
(7) PLIVA's employees and agents are not and have not
been debarred by the FDA pursuant to 21 U.S.C.
Section 335(a) or involved in any investigation or
proceedings which could lead to debarment;
(8) in the performance of its obligations under this
Agreement, PLIVA does not and will not knowingly
employ or use the services of any individual or
entity that has been debarred, convicted of a felony
or who is currently under investigation for such
conviction; and
(9) PLIVA will perform all necessary record keeping as
required under applicable federal and state laws
regarding the transport, handling, storage and
distribution of the Product, environmental impact of
the manufacturing and all potential or adverse
product defects.
PLIVA MAKES NO OTHER WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, EXCEPT
THOSE EXPRESSLY MADE HEREIN. PLIVA SPECIFICALLY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A
PARTICULAR PURPOSE.
10. OBLIGATION OF CONFIDENTIALITY
10.1 All Confidential Information disclosed by a party ("Disclosing
Party") shall be treated by the other party ("Receiving Party") as
confidential and shall not be disclosed or revealed to any third party
and shall be used solely in connection with the performance of this
Agreement; provided, however, that Confidential Information shall not
include information that the Receiving Party can document as having
been:
(1) public knowledge prior to the disclosure, or which
hereafter becomes public knowledge through no fault of the
Receiving Party;
(2) lawfully in the Receiving Party's possession prior to the
time of disclosure by Receiving Party;
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
13
(3) received, after the time of disclosure, from a third party
not under a similar obligation of confidentiality to
Disclosing Party; or
(4) independently developed by Receiving Party's employees
without access to Disclosing Party's Confidential Information.
10.2 The Receiving Party shall take all such precautions as it normally
takes with its own Confidential Information, but in no event less than
reasonable precautions, to prevent improper disclosure; provided,
however, that Confidential Information may be disclosed within the
limits required (A) to obtain any authorization from the FDA or any
other United States or foreign governmental or regulatory agency or,
with the prior written consent of the Disclosing Party; (B) to be
disclosed pursuant to (i) any order of any court having jurisdiction
and power to order such information to be released or made public; or
(ii) any lawful action of a governmental or regulatory agency.
10.3 In addition to and without limiting any other remedies available
to a Receiving Party at law or in equity, the Receiving Party shall
also be entitled to seek immediate injunctive relief in any court to
restrain any breach or threatened breach of a Receiving Party and to
enforce the provisions of this Section 10. Each party acknowledges and
agrees that there is may be no adequate remedy at law or in equity for
any such breach or threatened breach and, in the event that any
proceeding is brought seeking injunctive relief, the Receiving Party
shall not use as a defense thereto that there is an adequate remedy at
law.
10.4 The Receiving Party may disclose Confidential Information of the
Disclosing Party to the Receiving Party's employees, consultants,
licensees, prospective licensees and subcontractors on a need-to-know
basis; provided, however, that (i) any such disclosure shall be
pursuant to confidentiality undertakings with terms at least as
restrictive as those specified herein; and (ii) any violation of this
Agreement by such persons shall be deemed a breach of the Receiving
Party. Any of the persons mentioned above who are provided with access
to Confidential Information shall be informed by the Receiving Party of
the Receiving Party's obligations hereunder.
10.5 The confidentiality obligations of each party under this Section
10 shall survive the expiration or earlier termination of this
Agreement, howsoever terminated.
10.6 The parties shall cooperate and agree upon any public statement
concerning the existence, subject matter or any term of this Agreement
by or on behalf of any Party prior to any issuance, dissemination or
release. Subject to Section 10.2, neither party may issue, disseminate
or release any such public statement without the prior written approval
of the other parties, which consent shall not be unreasonably withheld
or delayed.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
14
10.7 The confidentiality obligations contained in this Article 10 are
in addition to and not in substitution for any confidentiality
obligations of the parties undertaken pursuant to the Non-Disclosure
Agreement between ELITE and PLIVA dated June 22, 2004 (which agreement
shall continue in full force and effect as therein provided).
11. TERM OF AGREEMENT
This Agreement shall become Effective Date and shall continue in force,
in with respect to any particular country in the Territory, for a ten
(10) year period from the date the Product is first commercially sold
in that country by PLIVA ("Initial Term"), unless terminated earlier
under Article 12. Upon expiration of the Initial Term, and any
extension term as hereafter provided ("Renewal Term" and together with
the Initial Term, the "Term"), the Term shall automatically be renewed
for additional periods of three (3) years each, unless written notice
is given by either party to the other at least one (1) year prior to
the end of the Initial Term or any of the Renewal Term of such party's
decision not to extend the term of the Agreement upon expiration of the
then existing term.
12. TERMINATION
12.1 This Agreement may be terminated by a party:
(1) upon breach of this Agreement by the other party (including,
without limitation, the failure to timely perform any
obligation under this Agreement), and after sixty (60) days
prior written notice to the breaching party, the notice to
become effective at the end of the sixty (60) day period
unless the breach is sooner cured by the breaching party;
(2) if a successful pivotal biostudy demonstrating the Product
meets FDA guidelines for bioequivalence is not completed
within one (1) year from the Effective Date, or if the
parties are unable to obtain Marketing Authorization from FDA
within the later of (i) two (2) years from the completion of
the Studies or (ii) five (5) years of the Effective Date;
(3) if there are no patents which present a risk of infringement
in the Territory and the first commercial launch of the
Product in the Territory under this Agreement does not occur
within sixty (60) days of the date a Marketing Authorization
for the Territory is obtained;
(4) upon the other party's insolvency or voluntary filing of a
petition for bankruptcy, or the placing of the business of
the other party in the hand of a receiver; or
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
15
(5) if the Net Profit received by that party in respect of the
Product is less than [*] for any calendar year after the
first full calendar year of commercial sales hereunder.
12.2 EFFECT OF TERMINATION. Termination of this Agreement for any
reason shall be without prejudice to:
(1) ELITE's and PLIVA's right to receive all amounts accrued and
unpaid under Sections 2, 3 or 5 up to the date of such
termination;
(2) any provisions clearly meant to survive termination or
expiration of this Agreement, including without limitation
representations, warranties, indemnification and confidentiality
obligations as well as Sections 1, 4, 7, 8, 9, 10, 12, and 14,
shall remain in full force and effect.
(3) the rights of inspection and audit set out in Section 5.4
shall continue in force as required under the terms of this
Agreement; and
(4) any other remedies which either party may then or thereafter
have hereunder or otherwise.
12.3 RIGHTS TO ANDAS. Without limiting any other right or remedy
available to PLIVA, on ELITE's breach of this Agreement (if such breach is not
cured within the time period provided in Section 12.1 (1) above), then at
PLIVA's request ELITE shall, within the Territory, transfer to PLIVA, at no
charge, the ANDA (or comparable Marketing Authorization outside of the United
States) for the Product, and ELITE promptly shall take such other actions as
reasonably requested by PLIVA from time to time to evidence PLIVA's exclusive
rights to the ANDA or comparable Marketing Authorization and all information
contained therein, subject to PLIVA having theretofore reimbursed ELITE in full
for the Elite Product Development Costs.
13. NOTICES
13.1 Any notice provided for herein shall be in writing and is
effective upon receipt: (i) when delivered by hand with proof of
delivery; (ii) when sent by facsimile with fax confirmation, provided
same is sent all by regular mail within forty-eight (48) hours; (iii)
three (3) days following deposit for mailing by first class registered
or certified mail, return receipt requested; one day following deposit
for mail with an overnight carrier; or (iv) when received by the
addressee, by delivery service (return receipt requested). Notices
shall be delivered to the addresses set forth below:
If to ELITE: 165 Ludlow Avenue
Northvale, New Jersey 07647
Attention: Chief Executive Officer
Telephone: (201) 750-2646
Facsimile: (201) 750-2755
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
16
If to PLIVA: 72 Eagle Rock Avenue
East Hanover, NJ 07936
Attention: General Counsel
Telephone: 973-599-4181
Facsimile: 973-599-4164
14. MISCELLANEOUS
14.1 Neither party shall be liable for any failure to deliver or
receive or any delay to perform its obligations hereunder when such
failure or delay shall be caused (directly or indirectly) by fire;
flood; accident; explosion; equipment or machinery breakdown; sabotage;
strike, or any labor disturbance (regardless of the reasonableness of
the demands of labor); civil commotions; riots; invasions; wars
(present or future); acts, restraints, requisitions, regulations, or
directions of any governmental entity; voluntary or mandatory
compliance with any request of any governmental entity; facility shut
down; voluntary or mandatory compliance with any request for material
represented to be for purposes of (directly or indirectly) producing
articles for national defense or national defense facilities; shortage
of labor, fuel, power or raw materials; inability to obtain raw
materials or supplies; failures of normal sources of supplies;
inability to obtain or delays of transportation facilities; any act of
God; any act of the other party; or any cause (whether similar or
dissimilar to the foregoing) beyond the reasonable control of such
party (each cause a "Force Majeure Event").
14.2 Either party hereto may assign this Agreement in whole or in part
to any Affiliate or Affiliates who shall be substituted directly in
whole or in part for it hereunder, provided, however, that the assignor
shall guarantee the performance of its Affiliate assignee hereunder.
This Agreement shall not otherwise be assignable by either party
without the prior written consent of the other party, which consent
shall not be unreasonably withheld, conditioned or delayed.
14.3 This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New Jersey, United States of America
without regard to its conflict of laws principles, and should legal
action become necessary to enforce its terms, the prevailing party
shall be entitled to reasonable costs and attorneys' fees.
14.4 In connection with any litigation out of or relating to the
subject matter of this Agreement, each of the parties hereto (a)
irrevocably consents and submits to the exclusive jurisdiction of the
state and federal courts located in New Jersey,
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
17
and (b) agrees that service of process may be effected, in addition to
any other means permitted by the applicable rules of court, by mailing
such process certified mail, return receipt requested or by reputable
overnight courier provided a receipt against delivery at their
respective addresses set forth above is obtained.
14.5 The terms and provisions contained in this Agreement constitute
the entire Agreement between the parties and, except as provided in
Section 11.7 hereof, shall supersede all previous communications,
representations, agreements or understandings, either oral or written,
between the parties hereto with respect to the subject matter hereof
and no agreement or understanding varying or extending these Agreements
shall be binding upon either party hereto, unless in writing which
specifically refers to the Agreement, signed by fully authorized
officers or representatives of the respective parties and the
provisions of these Agreements not specifically amended thereby shall
remain in full force and effect.
14.6 Any waiver must be explicit and in writing. The waiver by either
of the parties to this Agreement of any breach of any provision hereof
by the other party shall not be construed to be a waiver of any
succeeding breach of such provision or a waiver of the provision
itself.
14.7 If and to the extent that any court or tribunal of competent
jurisdiction holds any of the terms, provisions or conditions or part
thereof of this Agreement, or the application hereof of any
circumstances, to be invalid or to be unenforceable in a final
non-appealable order, the remainder of this Agreement and the
application of such term, provision or condition or part thereof to
circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereof, and each of the other
terms, provisions and conditions of this Agreement shall be valid and
enforceable to the fullest extent of the laws.
14.8 The relationship of ELITE and PLIVA under this Agreement is that
of independent contractors. Neither party shall be deemed to be the
agent of the other nor authorized to take any action binding upon the
other.
14.9 This Agreement may be executed in counterparts, each of which
shall be deemed to be an original and all together shall be deemed to
be one and the same Agreement. All headings in this Agreement are
inserted for convenience of reference only and shall not affect its
meaning or interpretation.
15. AGREEMENT TO PERFORM NECESSARY ACTS
Each party to this Agreement agrees to perform any further acts and
execute and deliver any documents that may be reasonably necessary to
carry out the provisions of this Agreement.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
18
16. DISPUTE RESOLUTION
16.1 Should any dispute or difference arise between ELITE and PLIVA or
the Committee during the Term of this Agreement, then either party may
forthwith give notice to the other party that it wishes such dispute or
difference to be referred to a designated senior officer of each of
ELITE and PLIVA.
16.2 If designated senior officers of each of ELITE and PLIVA agree
upon a resolution or disposition of the matter, they shall each sign a
statement which sets out the terms of their agreement. If, however, the
parties' designated senior officers are still unable to resolve their
differences within 60 days of its being referred to them, either party
may pursue any legal remedy available to it. Nothing contained herein
shall be deemed to limit or restrict a party from seeking equitable
remedies, such as a preliminary or permanent injunction, if necessary,
from a court of competent jurisdiction located in the State of New
Jersey.
17. QUALITY AGREEMENT
17.1 PLIVA and ELITE shall enter into an agreement with respect to
quality and regulatory issues (the "Quality Agreement") substantially
in the form attached hereto as Exhibit A.
17.2 If any term in this agreement is inconsistent with any term in the
Quality Agreement, the term in the Quality agreement shall control.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
19
IN WITNESS WHEREOF, ELITE and PLIVA have executed this Agreement in duplicate as
of the day and year first above written.
ELITE LABORATORIES, INC.
By: /s/ Bernard Berk
---------------------------------
Its CEO, Chairman
---------------------------------
PLIVA, INC.
By: /s/ Kurt Orlofski
---------------------------------
Its President and CEO
---------------------------------
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
20