EXHIBIT 10.1
Confidential treatment has been requested for portions of this Exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated by ***. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
DISTRIBUTION AND SUPPLY AGREEMENT
BETWEEN
SPECTRUM PHARMACEUTICALS, INC.
AND
CURA PHARMACEUTICAL CO. INC.
DISTRIBUTION AND SUPPLY AGREEMENT (this "Agreement") made as of the 13th
day of April, 2005 between SPECTRUM PHARMACEUTICALS, INC., a Delaware
corporation with its principal offices at 157 Technology Drive, Irvine,
California, USA, 92618 (hereinafter called "SPECTRUM") and CURA PHARMACEUTICAL
CO., INC., a New Jersey corporation with its principal offices at 542 Industrial
Way West, Eatontown, New Jersey, USA, 07724 (hereinafter called "CURA").
Defined terms used in this Agreement shall have the meanings set forth in
Section 1 hereof, except as otherwise provided herein.
WHEREAS, SPECTRUM is engaged in the licensing, development and
commercialization of pharmaceutical products and wishes to market a
certain product in the Territory.
WHEREAS, CURA is a distributor and seller of pharmaceutical products in
the Territory and desires to obtain an exclusive right to, distribute,
promote and sell the product supplied by SPECTRUM in the Territory;
WHEREAS, SPECTRUM has agreed, subject to the terms and conditions of the
Agreement, to grant CURA the exclusive right to distribute the Product in
the Territory and to supply to CURA on an exclusive basis in the Territory
all of CURA's requirements of the Product;
WHEREAS, CURA has agreed, subject to the terms and conditions of the
Agreement, to grant SPECTRUM the exclusive right to supply the Product to
CURA for the Territory and to undertake the distribution of such Product
in the Territory; and
WHEREAS, in connection with the foregoing, CURA and SPECTRUM have agreed
to implement a profit-sharing arrangement in respect of the sale and
distribution by CURA of the Product in the Territory.
NOW, THEREFORE, the parties agree as follows:
1. DEFINITIONS.
For the purposes of this Agreement the following terms have the following
meanings:
1.1 "AFFILIATES" shall mean (a) an entity controlled by a common parent
that owns more than fifty percent of the voting stock of both such
entity and one of the parties to this Agreement and (b) such parent
company.
1.2 "ANDA'S" shall mean the Abbreviated New Drug Applications filed with
the FDA in connection with the Products.
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1.3 "APPROVED PRODUCT" shall mean any Product that shall have been
granted all necessary approvals by all required Regulatory
Authorities to allow the sale and distribution by CURA or an
Affiliate of CURA of such Product in the Territory.
1.4 "BATCH", with respect to any of the Products, shall mean a separate
and distinct quantity of such Product processed under continuous and
identical conditions and designated by a batch number.
1.5 "CERTIFICATE OF ANALYSIS" shall mean a document, which is dated and
signed by a duly authorized representative of the Quality Control or
Quality Assurance Department of SPECTRUM, certifying that a Batch of
any Product meets all Specifications.
1.6 "FDA" shall mean the U.S. Food and Drug Administration, or any
successor body.
1.7 "FD&C ACT" means the Federal Food, drug and Cosmetic Act of 1938, as
amended and the regulations thereunder, as the same may be amended
or revised.
1.8 "FIRST APPROVAL DATE" shall mean the date on which CURA or SPECTRUM
first obtains approval from a Regulatory Authority in the Territory
to market a Product.
1.9 "FISCAL YEAR" shall mean the twelve-month period commencing on
January 1st of each year and ending on December 31st, or any other
twelve-month period designated as the fiscal year of CURA.
1.10 "CGMP" shall mean current good manufacturing practices as required
by the rules and regulations of the applicable Regulatory Authority.
1.11 "INDEPENDENT LABORATORY" shall have the meaning set forth in Section
8.4 hereof.
1.12 "LAUNCH DATE", as to each Approved Product, shall mean that date on
which marketing and distribution of such Approved Product shall
commence in the Territory.
1.13 "LAUNCH NOTICE" shall have the meaning set forth in Section 6.1
hereof.
1.14 "LIAISON COMMITTEE" shall have the meaning set forth in Section 3
hereof.
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1.15 "MANUFACTURING COST" with respect to the Product shall mean [***].
Current actual costs that shall remain in effect for the first year
of this contract are set forth on Schedule B.
1.16 "MANUFACTURING PARTNER" shall mean a pharmaceutical manufacturer
selected and contracted by SPECTRUM to manufacture the Product
according to SPECTRUM'S specifications.
1.17 "NET PROFITS" with respect to each of the Products shall mean the
Net Sales made by CURA of such Product less SPECTRUM's Manufacturing
Costs in respect of such Product.
1.18 "NET SALES" in respect the Product shall mean CURA's gross invoice
amounts on such sales of such Product by CURA and/or its Affiliates
to third parties, less the following deductions reasonably and
properly incurred in the ordinary course of business and paid or
given:
(a) transportation cost to deliver Product from CURA to its
customer;
(b) trade, quantity or cash discounts, service allowances and
independent brokers or agents' commissions, off-invoice
promotional discounts, rebates, volume reimbursements, if any,
given, allowed or paid, such amounts to be agreed to by the
parties prior to being given, allowed or paid by CURA;
(c) credits or allowance for such Product, if any, given or made
on account of price and shelf adjustments, returns, bad debts,
charge backs, any and all federal, state or local government
rebates or discounts whether in existence now or enacted at
any time hereafter, and the gross amount bill for that
rejected Product or such Product recalled, seized or destroyed
(voluntarily (to be mutually agreed to by both parties) or at
the request of any government agency, subdivision or
department);
(d) any tax, excise or other government charge upon or measured by
the production, sale, transportation, delivery or use of such
Product; and any surcharge, levy, tax or assessment mandated
by any federal, state or local government or administrative
agency to fund a compensation program or reserve for persons
injured by such Product; in each case determined in accordance
with CURA's customary accounting policies and practices in a
manner consistent with Generally Accepted Accounting
Principles in the United States.
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1.19 "OBJECTION NOTICE" shall have the meaning set forth in Section 8.4
hereof.
1.20 "PRODUCT" shall mean the product set forth on Schedule A.
1.21 "REGISTRATION" with respect to the Product means the meeting of all
of the requirements of all applicable Regulatory Authorities
necessary to permit the commencement of manufacturing and marketing
of such Product in the Territory by CURA or an Affiliate of CURA.
1.22 "REGULATORY AUTHORITY" means any and all bodies and organizations
regulating the manufacture, importation, distribution, use and sale
of any of the Products in the Territory.
1.23 "SPECTRUM'S FACILITY" shall mean the facility or the facilities that
SPECTRUM shall contract to have the Product manufactured in for sale
to CURA.
1.24 "SPECIFICATIONS" of Product means the specifications for any Product
as agreed to by the parties and as approved by the applicable
Regulatory Authority. The Specifications may be amended from time to
time by written agreement between the parties and as specifically
requested by applicable Regulatory Authorities.
1.25 "TECHNICAL INFORMATION" shall mean the manufacturing process and any
and all technical knowledge, trade secrets, analytical methodology,
processes, manufacturing and toxicological information, and any and
all other technical information or experience related to the
manufacturing of any of the Products.
1.26 "TERRITORY" shall mean the U.S.
1.27 "U.S." means the United States of America and its territories and
possessions.
2. APPOINTMENT OF CURA AS DISTRIBUTOR; SUB-DISTRIBUTORS
2.1 SPECTRUM hereby grants to CURA and CURA hereby accepts, the
exclusive right to distribute, promote and sell the Product in the
Territory subject to the terms and conditions of this Agreement.
CURA hereby grants to SPECTRUM and SPECTRUM accepts, the exclusive
right to supply the Product to CURA for sale in the Territory
subject to the terms and conditions of this Agreement.
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2.2 CURA shall use best efforts to promote, distribute and sell the
Product in and throughout the Territory and shall use best efforts
to maintain a reasonably adequate level of stock of such Product to
meet the market demand for such Product within and throughout the
Territory.
2.3 CURA undertakes and agrees that it will not sell any of the Product
directly or indirectly outside the Territory nor export any of the
Product out of the Territory nor fill any orders for any of the
Product knowing that such orders are intended for sale outside the
Territory.
2.4 Subject to the limitations set forth in the following sentence, CURA
shall have the right to appoint any sub-distributor to distribute,
market, promote and/or sell the Product within the Territory. The
appointment of any sub-distributor shall be on such terms and
conditions as CURA may reasonably require in writing provided such
terms and conditions are not inconsistent with the terms and
conditions of this Agreement. CURA agrees that it shall, at all
times, be solely responsible for the acts, deeds or omissions of any
sub-distributor appointed pursuant to this subsection 2.4.
Notwithstanding the foregoing, (a) the appointment of a
sub-distributor shall not in any way diminish, reduce or eliminate
any of CURA's obligations under this Agreement, and CURA shall
remain primarily liable for all such obligations; and (b) prior to
entering into an agreement with a sub-distributor, CURA shall notify
SPECTRUM of the proposed agreement, including the name of the
proposed sub-distributor.
3. LIAISON COMMITTEE
From time to time as reasonably agreed to by the parties, and at
least once each calendar quarter from the date hereof, SPECTRUM and
CURA shall meet and confer with each other concerning, among other
things, the manufacture and marketing of the Product, the pricing of
the Product and any deductions or allowances allowed or paid that
affect Net Sales. SPECTRUM and CURA each shall be represented at
such meetings by not more than three (3) representatives, who,
collectively, shall constitute a "Liaison Committee."
4. MANUFACTURE AND SUPPLY OF THE PRODUCTS BY SPECTRUM
4.1 SPECTRUM shall cause a Manufacturing Partner, to manufacture the
Product to supply such Product to CURA, pursuant to the binding
forecasts and purchase orders placed by CURA in accordance with
Section 6 hereof, at SPECTRUM's current Manufacturing Cost of such
Product as set forth on Schedule B for the first year of the
contract and then, as provided in Section 7 hereof.
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4.2 Notwithstanding any other provision in this Agreement to the
contrary:
(a) SPECTRUM shall have the option of terminating the supply of
the Product to CURA; and
(b) CURA shall have the option of discontinuing the marketing of
the Product in the Territory, at any time, in the event that,
in both parties reasonable judgment, the parties mutually
conclude, as the case may be, that continuing to market such
Product will be commercially unprofitable. In the event that
SPECTRUM elects to terminate the supply of the Product or CURA
elects discontinue the marketing of the Product, then such
party, upon [***] days written notice to the other party,
shall have no further liability to the other in respect
thereto other than remittance of respective share of profits
from continued sales of Product during this period or from
remaining inventory of Product which the parties may agree to
continue active selling after the [***] day period. In
addition, notwithstanding the above, CURA shall be obligated
to take delivery of and market (and may not return to
SPECTRUM) any amounts of Product included in the last binding
forecast provided to SPECTRUM prior to the election to
discontinue marketing the Product.
5. LABELING
Subject to CURA's fulfillment of its obligations set forth in the
immediately following sentence of this Section 5, SPECTRUM shall package
and label the Approved Product in accordance with the specifications
approved by the FDA in issuance of the ANDA. CURA shall supply trade dress
and other necessary information requested by SPECTRUM that is required for
labeling. SPECTRUM shall be fully responsible for the form and content of
the Product label and other aspects of Product packaging and labeling,
except to the extent of content supplied by CURA.
6. FORECASTS, ORDERS, DELIVERY AND PURCHASE OBLIGATIONS.
6.1 When both parties agree that Registration of the Products is likely
to be imminent, the parties shall meet and agree upon an estimated
Launch Date in respect of such Approved Product. Thereafter, CURA
shall send to SPECTRUM a notice (the "Launch Notice") with respect
to such Product that shall contain the following:
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(a) a statement of the estimated Launch Date of such Product; and;
(b) a purchase order for such Product to be purchased by CURA,
prior to the Launch Date, in respect of such Product.
6.2 On the first day of each calendar quarter commencing after the
Launch Date of each Approved Product, CURA shall provide to SPECTRUM
a forecast of the amount of such Product to be ordered for delivery
during each of the [***] following the date of the forecast. The
amounts forecasted for [***] in such forecast shall be a binding
purchase obligation of CURA. CURA shall use best efforts to make the
subsequent [***] in the forecast as accurate as possible.
6.3 SPECTRUM shall not be required to supply during any particular
Quarter more than [***] of the most recent forecasted amount for
such quarter, but will use all reasonable efforts to supply the full
amount ordered.
6.4 CURA shall place a written purchase order with SPECTRUM for the
quantity and the delivery date of the Product that it desires to
purchase under this Agreement for commercial use; provided, however,
that where in conflict with the terms and conditions of this
Agreement, this Agreement, and not such standard terms and
conditions set forth in the purchase orders, shall govern the
purchase and sale of the Product under this Agreement. CURA agrees
to place such purchase orders at least [***] days in advance of the
specified delivery date, unless otherwise agreed to by the parties.
Upon its receipt and acceptance of each such order, SPECTRUM shall
use its best efforts to fulfil the order as requested. Unless
SPECTRUM delivers a written objection to a purchase order within
[***] of its receipt of such order, the purchase order shall be
deemed accepted. The purchase orders placed by CURA must be
consistent with the binding forecasts provided under Section 6.2
above.
6.5 SPECTRUM will retain title and risk of loss to all Product until
delivered FOB ex SPECTRUM's Facility or such other place or places
as may be mutually agreed by the parties. Thereafter, CURA will have
the title and risk of loss of all Product.
6.6 Both parties shall mutually agree on the price at which CURA shall
sell the Approved Product in the Territory.
6.7 Should SPECTRUM fail to supply product on an agreed upon delivery
date, and CURA suffers financial loss due to SPECTRUM's or
SPECTRUM'S Manufacturing Partner's failure to supply as a result of
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sales contracts or other sales agreements that Cura has entered
into, SPECTRUM will reimburse Cura for these financial losses.
Reimbursement shall be in U.S. currency and shall be issued
immediately upon Cura's supplying SPECTRUM with written proof of
financial loss due to SPECTRUM's or SPECTRUM'S Manufacturing
Partner's failure to supply product on specified delivery dates. As
a condition to SPECTRUM's obligation under this Section 6.7, CURA
shall use best efforts to try to avoid any financial loss by
renegotiating the sales contracts or other sales agreements for new
delivery dates.
7. PRICE AND PAYMENT
7.1 CURA and SPECTRUM shall divide the Net Profits earned in connection
with the sale and distribution of the Approved Product with [***]
percent ([***]%) of the Net Profit to be distributed to SPECTRUM and
[***] percent ([***]%) of the Net Profit to be distributed to CURA
until SPECTRUM'S cumulative share of the net profit shall reach the
total of [***] U.S. dollars. When SPECTRUM's cumulative share of the
Net Profit reaches the [***] dollar milestone a new formula for the
division of the Net Profit will be instituted so that SPECTRUM
receives [***] percent ([***]%) of the Net Profit and CURA receives
[***] percent ([***]%) of the Net Profit. SPECTRUM shall not be
responsible for any share of any net loss should Manufacturing Costs
exceed Net Sales.
7.2 Starting in the second year of the contract when the current
Manufacturing Cost set forth on Schedule B expires, not later than
[***] days after the close of each [***], commencing with the first
such [***] in the second year which Approved Product is delivered to
CURA, SPECTRUM shall calculate its Manufacturing Costs and shall
provide CURA with such calculations, including a statement setting
forth in detail by category the amounts used to calculate
Manufacturing Costs for such [***].
7.3 Within [***] days from the close of each [***], commencing with the
first such [***] in which funds are actually collected by CURA in
respect of the commercial sale and distribution of the Approved
Product, CURA shall submit to SPECTRUM a written statement (the
"[***] Net Profit Statement") in the form set forth on Schedule C
hereto, showing the share of Net Profits and Manufacturing Costs due
to SPECTRUM, and shall deliver to SPECTRUM by wire transfer its
share of the Net Profit amount shown as due and payable to SPECTRUM.
Notwithstanding the foregoing, CURA shall deliver to SPECTRUM by
wire transfer the Manufacturing Costs due SPECTRUM within [***] days
after Product is delivered to CURA FOB ex SPECTRUM's factory. This
amount is non-refundable. Along with that
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first [***] Net Profit Statement for the [***] that funds were first
collected, CURA shall provide the [***] Net Profit Statements and
the corresponding payments for those [***] that passed before funds
were collected.
7.4 Not later than [***] days following the close of each Fiscal Year,
CURA shall deliver a written statement (the "Final Net Profit
Statement"), in the form set forth on Schedule D hereto.
7.5 To the extent that, as a result of final adjustments reflected in an
annual audit statement to be performed by an auditor chosen by
SPECTRUM and reasonably acceptable to CURA, (a) CURA has underpaid
to SPECTRUM its share of the Net Profits in respect of such Fiscal
Year, then CURA, within [***] of delivering such annual audit
statement to SPECTRUM, shall promptly pay to SPECTRUM by wire
transfer the amount of such short-fall, or (b) CURA has overpaid to
SPECTRUM its share of the Net Profits in respect of such Fiscal
Year, then SPECTRUM, within [***] of CURA's delivery of such annual
audit Statement to SPECTRUM shall pay to CURA by check, the amount
of such over-payment. In addition, starting in the second year of
the contract when the current Manufacturing Cost set forth on
Schedule B expires, CURA shall have the right, once annually and at
its own cost, during regular business hours, upon giving reasonable
prior written notice to SPECTRUM to have an independent
professionally qualified auditor, reasonably approved by SPECTRUM,
audit SPECTRUM'S records relative to SPECTRUM'S calculation of the
Manufacturing Costs.
7.6 In the event that CURA sells any Product in combination with any
other products, as a part of a package deal or combined deal, it
agrees not to make any such deal on terms that would in any way
disadvantage SPECTRUM or diminish its share of Net Profits under the
terms of this Agreement. In addition, CURA shall not discount the
price of the Product when it is sold or combined with another
product.
7.7 After the Final Net Profit Statement for a Fiscal Year has been
audited and adjusted, if the aggregate amount that CURA received for
its share of the Net Profit for such Fiscal Year is less than [***]
of the Net Sales for such Fiscal Year, then the parties shall in
good faith renegotiate the share of the Net Profit set forth in
Section 7.1 for future Fiscal Years.
8. QUALITY CONTROL AND PRODUCT ACCEPTANCE.
8.1 SPECTRUM shall ensure that all Products supplied to CURA under the
terms of this Agreement will meet the Specifications.
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8.2 SPECTRUM shall ensure that each Batch of Product is labeled and each
of the Batch numbers is applied to each such Batch, as required by
the applicable Regulatory Authority. SPECTRUM will ensure that a
copy of the Certificate of Analysis with respect to each Batch of
Product supplied to CURA (a) is faxed to CURA prior to shipping such
Batch to CURA (confirmed by hard copies mailed to CURA) and (b)
accompanies each Batch. SPECTRUM shall not ship any Batch of Product
to CURA if such Batch does not meet the Specifications.
8.3 SPECTRUM shall provide and maintain suitable storage and transport
conditions for each Batch of Product and shall provide CURA with
complete written instructions with respect to proper conditions for
the transport and storage of Product. Upon receipt of any Batch of
Product to CURA by SPECTRUM, CURA shall provide and maintain
suitable storage conditions therefor and shall comply with any
written instructions provided by SPECTRUM in respect of the
transport and storage of Product.
8.4 All shipments of Product received by CURA shall be deemed accepted
unless CURA gives SPECTRUM a written Notice (the "Objection Notice")
within [***] of such receipt specifying the manner in which the
Batch of Product does not conform to Specifications. The Objection
Notice shall be accompanied by written reports of any testing
performed by or for CURA on such Batch. Upon receipt of the
Objection Notice, SPECTRUM may request CURA to return the rejected
Product or samples thereof for further testing. The test results, if
any, submitted to SPECTRUM by CURA shall be deemed conclusive unless
SPECTRUM notifies CURA within [***] of its receipt of the Objection
Notice or the samples, whichever is later, that it disagrees with
such test results. In the event of such notice by SPECTRUM, the
rejected Product or samples thereof shall be submitted to a mutually
acceptable independent laboratory (the "Independent Laboratory") for
analysis in the form of a written report (the "Report"), the costs
of which shall be paid by CURA except if the results of the Report
determine that any of the Product rejected by CURA does not meet the
applicable Specifications, in which case SPECTRUM will pay for all
such costs. If the Report states that the Product meets the
Specifications, CURA must pay SPECTRUM the Manufacturing Costs for
the Product and use its best efforts to sell the Product. SPECTRUM
will use its best efforts to replace Product that does not meet the
applicable Specifications with conforming goods as soon as
reasonably possible, provided that the departure from Specifications
is not due to the fault or act of CURA. All transportation, shipping
and insurance costs and other fees incident to the shipping back to
SPECTRUM of the Product determined by the Report not
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to meet Specifications and the shipping to CURA of the replacement
Product will be paid for by SPECTRUM. In the event that replacement
Product is required, it shall be shipped via airfreight unless
otherwise agreed to in writing by CURA. Once the Product is deemed
accepted by CURA or the Report states that the Product meets the
Specifications, CURA shall be obligated to take the Product and pay
SPECTRUM the Manufacturing Costs for the Product. Subject to Section
8.1, CURA shall not be able to return the Product to SPECTRUM for
any reason, nor shall CURA be entitled to any credits from SPECTRUM
for any Product for any reason including but not limited to that it
is not able to sell the Product or the Product is returned to it.
9. RECORDS AND INSPECTIONS.
9.1 SPECTRUM will maintain records and documents documenting the
Manufacturing Cost of each of the Product and CURA will maintain
records and documents (including but not limited to information
related to all allowances and deductions included under Section
1.18) documenting all transactions relating to the sale of the
Product for a time period equal to the greater of:
(a) the period meeting all known regulations of the applicable
Regulatory Authorities for periods with respect to such
Product; and
(b) five (5) years from the date of sale.
Each of the parties will use commercially reasonable efforts to
ascertain the retention requirements of the applicable Regulatory
Authorities and will keep the other party informed of any changes
that it becomes aware of that may reasonably affect such other
party's obligations under this Section 9.1.
9.2 Each party shall within forty-eight (48) hours notify the other
party of any (a) inspections by any Regulatory Authority, including,
without limitation, inspections as a result of the recall of, or any
other regulatory issue related to any of the Product and/or (b)
material notices received from any Regulatory Authority. Each party
shall also have the duty immediately to notify the other if it
becomes aware, or reasonably should have become aware, of any
concern with respect to any Product that may affect the efficacy or
safety of any of the Products.
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10. INTELLECTUAL PROPERTY RIGHTS
10.1 CURA acknowledges and agrees that SPECTRUM is the owner of the
Technical Information, and of all industrial and intellectual
property rights of any kind in relation to the Technical
Information, including the right to patents, registered or other
designs, copyright, trademarks or trade names and any other
confidential information. In addition, CURA acknowledges and agrees
that SPECTRUM is the owner of the ANDA. Nothing contained in this
Agreement shall be effective to give CURA any rights of ownership in
and to the Technical Information, the intellectual property and/or
the ANDA owned by SPECTRUM.
10.2 Any improvements to the Technical Information made or discovered by
SPECTRUM during the term of this Agreement shall remain the property
of SPECTRUM and all industrial and intellectual property rights of
any kind in relation to such improvements, including the right to
patents, registered or other designs, copyright, trademarks or trade
names and any other confidential information, shall remain the
property of SPECTRUM.
11. RELATIONSHIP OF SPECTRUM AND CURA.
11.1 The relationship between SPECTRUM and CURA that is created by this
Agreement shall be that of vendor and purchaser, and not that of a
partnership, principal and agent, or joint or co-ventures. In the
performance of this Agreement, CURA shall have no authority to
assume or create any obligation or responsibility, either expressed
or implied, on behalf of or in the name of SPECTRUM, or to bind
SPECTRUM, its Affiliates or its Manufacturing Partners in any manner
whatsoever and SPECTRUM shall have no authority to assume or create
any obligation or responsibility, either express or implied, on
behalf of or in the name of CURA or to bind CURA or its Affiliates
in any manner whatsoever. Each party shall indemnify the other party
for any claim asserted by any third party that the acts of such
party or any of its Affiliates or Manufacturing Partners created any
obligation or responsibility of the other party other than as
expressly set forth in this Section.
11.2 If this Agreement is terminated for any reason, neither party shall
thereafter use, or permit anyone else under its control to use, the
other's name in the promotion of its business or the offer for sale
of any goods and neither party shall package or label any goods in a
manner that the other party hereto might reasonably consider to be
imitative of any goods sold by such party.
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12. WARRANTIES.
12.1 CURA hereby represents and warrants to SPECTRUM that:
(a) it has the corporate authority to enter into this Agreement
and to perform its obligations hereunder;
(b) it is not aware of any legal, contractual or other
restriction, limitation or condition which might affect
adversely its ability to perform hereunder; and
(c) all Product shipped by CURA pursuant to this Agreement (i)
shall not be adulterated Product within the meaning of the
FD&C Act; (iv) shall not be a product which would violate any
section of the FD&C Act if introduced into interstate commerce
and (v) shall be stored and handled by CURA at all times in
the proper manner and suitable conditions for such Product.
12.2 SPECTRUM hereby represents and warrants to CURA that:
(a) it has the corporate authority to enter into this Agreement
and to perform its obligations hereunder;
(b) it is not aware of any legal contractual or other restriction,
limitation or condition which might affect adversely its
ability to perform hereunder;
(c) the manufacture, importation, and sale to CURA of any Product
provided by SPECTRUM to CURA hereunder and the distribution
such Product shall not violate the patent or intellectual
property rights of any third party in the Territory; and
(d) all Product shipped to CURA pursuant to this Agreement (i)
shall be manufactured, packaged and labeled in conformance
with the applicable Specifications for such Product at the
time of shipment, (ii) shall be manufactured, packaged and
labeled in a plant which meets the requirements of the
applicable Regulatory Authority where the Product is to be
sold, including, without limitation, conformance with cGMP,
(iii) shall not be adulterated Product within the meaning of
the FD&C Act; (iv) shall not be a product which would violate
any section of the FD&C Act if introduced into interstate
commerce and (v) shall be stored and handled by SPECTRUM at
all times in the proper manner and suitable conditions for
such Product.
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12.3 Each party hereby represents and warrants and covenants to the other
that such party is not debarred under the Generic Drug Enforcement
Act of 1992 and it does not and will not use in any capacity the
services of any person debarred under the Generic Drug Enforcement
Act of 1992; neither such party, nor, to the best of its knowledge,
any of its employees, agents or contractors, has engaged in any
activity which could lead to it becoming debarred under the Generic
Drug Enforcement Act of 1992.
13. INDEMNIFICATION.
13.1 CURA agrees to indemnify SPECTRUM, its affiliates and its
Manufacturing Partners against and holds SPECTRUM, its affiliates
and its Manufacturing Partners harmless from, any and all loss
(except consequential loss, such as, for example, loss of business
or of profits), liability, damage, claim, cost and expense
(including, without limitation, reasonable attorney's fees and
liabilities for personal injury suffered by any person) arising from
or in connection with any:
(a) breach of the warranties by CURA hereunder;
(b) other misrepresentation or breach of this Agreement by CURA,
its affiliates or its sub-distributors to the extent they are
performing the provision in question for CURA or upon CURA's
request;
(c) claim, express, implied or statutory made by CURA, its
Affiliates or its sub-distributors, (except to the extent that
such claim has been approved by the Regulatory Authority or
authorized by SPECTRUM) as to the efficacy or safety of any of
the Products or the use to be made by any purchaser of any of
the Products; or
(d) any other act or omission of CURA, its Affiliates or
sub-distributors in connection with the sale and distribution
of any of the Products.
13.2 SPECTRUM hereby agrees to indemnify and hold CURA and CURA's
Affiliates harmless from any and all loss (except consequential
loss, such as, for example, loss of business or of profits),
liability, damage, claim, cost and expense (including, without
limitation, reasonable attorney's fees and liabilities for personal
injury suffered by any person) arising from or in connection with
any:
(a) breach of the warranties by SPECTRUM;
(b) other misrepresentation or breach of this Agreement by
SPECTRUM or any wrongful act or omission of SPECTRUM and its
15
Manufacturing Partner in connection with its contract
obligations hereunder;
(c) claim, express, implied or statutory made by SPECTRUM, its
Affiliates, (except to the extent that such claim has been
approved by the Regulatory Authority or authorized by CURA) as
to the efficacy or safety of any of the Products or the use to
be made by any purchaser of any of the Products;
(d) suit, claim or proceeding brought against CURA in the
Territory based on any claim that CURA's activities with
respect to any Product constitute an infringement of any
process patent or intellectual property rights of any third
party in the Territory; or
(e) any other act or omission of SPECTRUM, its Affiliates or
Manufacturing Partners in connection with the manufacture,
packaging, labeling and sale of Product to CURA or its
Affiliates.
13.3 If CURA or any of its Affiliates or SPECTRUM, its Affiliates or any
of its Manufacturing Partners (in each case an "Indemnified Party")
receives any written claim which it believes is the subject of
indemnity hereunder by SPECTRUM or CURA, as the case may be, (in
each case as "Indemnifying Party"), the Indemnified Party shall, as
soon as reasonably practicable after forming such belief, give
notice thereof to the Indemnifying Party, including full particulars
of such claim to the extent known to the Indemnified Party;
provided, that the failure to give timely notice to the Indemnifying
Party as contemplated hereby shall not release the Indemnifying
Party from any liability to the Indemnified party. The Indemnifying
Party shall have the right, by prompt notice to the Indemnified
Party, to assume the defense of such claim with counsel reasonably
satisfactory to the Indemnified Party, and at the cost of the
Indemnifying Party. If the Indemnifying Party does not so assume the
defense of such claim or, having done so, does not diligently pursue
such defense, the Indemnified Party may assume such defense, with
counsel of its choice, but for the account of the Indemnifying
Party. If the Indemnifying Party so assumes such defense, the
Indemnified Party may participate therein through counsel of its
choice, but the cost of such counsel shall be for the account of the
Indemnified Party.
13.4 The party not assuming the defense of any such claim shall render
all reasonable assistance to the party assuming such defense, and
all out-of-pocket costs of such assistance shall be for the account
of the Indemnifying Party.
13.5 No such claims shall be settled other than by the party defending
the same, and then only with the consent of the other party, which
shall not be
16
unreasonably withheld; provided, that the Indemnified Party shall
have no obligation to consent to any settlement of any such claim
which imposes on the Indemnified Party any liability or obligation
which cannot be assumed and performed in full by the Indemnifying
party.
14. COMPLIANCE WITH LAW.
14.1 It shall be the responsibility of CURA and SPECTRUM, respectively,
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 the country in which it is, respectively,
manufacturing or selling Product or manufacturing or marketing any
of the Products.
14.2 It is further agreed that neither party shall be obligated to carry
out or perform any or all of the terms of this Agreement as shall
constitute a violation of any treaty, law, code or regulation of any
governmental authority whether local, national or international. In
any event, the other terms of this Agreement shall nevertheless
continue and the parties shall use all reasonable efforts to
re-negotiate and amend this Agreement so that the performance of
this Agreement as so amended will not involve any such violation.
15. CONFIDENTIALITY.
15.1 Any confidential information disclosed during the term of this
Agreement shall be governed by that certain Mutual Confidentiality
Agreement dated February 7, 2005, by and between the parties.
16. AUDITS.
16.1 Once annually, CURA or its authorized representative shall have the
right, at its own cost, to visit SPECTRUM's or SPECTRUM'S
Manufacturing Partner's Facility during regular business hours
provided CURA gives reasonable prior written notice to SPECTRUM.
During any such visit, CURA's representatives shall have the right
(a) to inspect the manufacturing facilities, (b) to inspect quality
control procedures, (c) to audit any records and reports pertinent
to the development, manufacturing, disposition or transport of any
of the Products to ensure that SPECTRUM complies with all applicable
regulations for the production of Product, including, without
limitation, compliance with applicable CGMP. SPECTRUM, at its
discretion, may accompany CURA on the visit.
17
16.2 CURA shall assume all risk of loss and indemnify and hold the other
party harmless from and against any and all loss, liability, damage,
claim and expense including, but not limited to, reasonable
attorneys' fees arising out of or resulting from such audits or
inspections.
16.3 In the event of an audit by any Regulatory Authority, SPECTRUM and
CURA each shall supply the other with a copy of any report received
from such Regulatory Authority and shall use its best efforts to
provide such Regulatory Authority with a prompt, accurate and
complete response to any deficiencies noted during the audit. Both
parties agree that they shall use their best efforts to promptly
address, and if necessary correct, any and all such deficiencies to
the satisfaction of such Regulatory Authority.
17. TERM AND TERMINATION.
17.1 This Agreement shall be for an initial term commencing as of the
date of this Agreement and continuing until the second (2nd)
anniversary of the First Approval Date. This Agreement shall be
extended automatically for two additional terms of two (2) years
each, unless either party gives written notice of its intent not to
renew, such notice to be given not later than [***] prior to the
expiration date of the current term thereof.
17.2 This Agreement may be terminated by notice in writing by either
party if the other party shall default in the performance of any of
its other obligations under this Agreement and such default shall
continue for a period of not less than [***] after written notice
specifying such default shall have been given; provided, however,
that if such default is not capable of being cured within such [***]
period but the party in default initiates and diligently continues
good faith efforts to cure such default, such [***] period shall be
extended to [***]; or (c) by either party if the other party makes
an arrangement with its creditors or goes into bankruptcy,
receivership or liquidation, or if a receiver or a receiver and
manager is appointed in respect of the whole or a major part of the
property or business of the party in default.
17.3 [***] after notice of termination has been given as herein provided,
the right of CURA to place orders for Product with SPECTRUM shall
cease.
17.4 Immediately upon termination or expiration of this Agreement, CURA
shall have the obligation, if requested by SPECTRUM, to accept and
market any Product in transit or subject to an accepted purchase
order or binding forecast at the time of giving of written notice of
termination.
- --------
Certain information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
18
18. FORCE MAJEURE.
Neither party shall be liable or be in breach of any provision of this
Agreement for any failure or delay on its part to perform any obligation
where such failure or delay has been occasioned by any act of God, war,
riot, fire, explosion, flood, sabotage, unavailability of fuel, accidents
of navigation or breakdown or damage of vessels or other conveyances for
air, land or sea, other impediments or hindrances to transportation,
government intervention (other than that of duly-authorized Regulatory
Authority), strikes or other labor disturbances or any other cause beyond
the control of the parties.
19. INSURANCE
SPECTRUM and CURA each shall maintain adequate product liability insurance
to cover product liability claims against it, respectively, as
manufacturer of the Products and distributor of the Products.
20. NOTICES.
Notices provided under this Agreement to be given or served by either
party on the other shall be given in writing and served personally or by
prepaid registered airmail post or by express mail or by means of
facsimile to the following respective addresses or to such other addresses
as the parties may hereafter advise each other in writing. It being agreed
and understood by the parties that any such notice shall be deemed given
and served the day transmitted by facsimile or a date three (3) days after
the date of express mail or mail by courier.
TO: SPECTRUM
SPECTRUM PHARMACEUTICALS, INC.
157 Technology Drive
Irvine, CA 92618
Attention: Rajesh C. Shrotriya MD, Chairman, CEO and President
Fax: +(949) 788-6706
TO: CURA
CURA Pharmaceutical Co.
542 Industrial Way West
Eatontown, New Jersey 07724
Attention: Fabio Lanzieri, President
Fax: +1(732) 982-8308
19
21. EXECUTION OF ALL NECESSARY ADDITIONAL DOCUMENTS.
Each party agrees that it will forthwith upon the request of the other
party execute and deliver all such instruments and agreements and will
take all such other actions as the other party may reasonably request from
time to time in order to effectuate the provision and purposes of this
Agreement.
22. WAIVER.
The failure of either of the parties to insist upon a strict performance
of any other terms and provisions therein shall not be deemed a waiver of
any subsequent breach of default in the terms or provisions of this
Agreement.
23. ASSIGNMENT AND AMENDMENT.
23.1 Other than an assignment by either party to any of its Affiliates,
neither this Agreement nor any rights arising hereunder shall be
assigned by one party without the prior written consent of the other
and then only upon approval of the other party and acceptance of
such assignment in written form approved by such party, which
approval shall not be unreasonably withheld. In the event of an
assignment by either party to it Affiliate as permitted hereunder,
the assigning party shall not be released from its obligations
hereunder and shall guarantee the full performance by such Affiliate
of such obligations. Notwithstanding the above, either party may
assign this Agreement to a successor in interest pursuant to a
merger, acquisition or sale of all or substantially all of the
assignor's assets. Subject to the limitations on assignment herein,
this Agreement shall be binding upon and inure to the benefit of any
successors in interest and permitted assigns of CURA and SPECTRUM.
Any such successor or permitted assignee shall expressly assume in
writing the performance of all terms and conditions of this
Agreement.
23.2 No amendment hereof shall be binding unless made in writing and
signed by the parties hereto.
24. ENTIRE AGREEMENT.
This Agreement and that certain Mutual Confidentiality Agreement dated
February 7, 2005, by and between the parties incorporates the entire
understanding of the parties and revokes and supersedes any and all
20
agreements, contracts, understandings or arrangements that might have
existed heretofore between the parties regarding the subject matter
hereof.
25. GOVERNING LAW; LANGUAGE.
25.1 This 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.
25.2 The parties hereto agree that this Agreement shall be in the English
language.
26. SEVERABILITY.
If any term or provision of this Agreement shall be held invalid or
unenforceable, the remaining terms hereof shall not be affected, but shall
be valid and enforced to the fullest extent permitted by law.
27. HEADINGS.
The headings used in this Agreement are intended for guidance only and
shall not be considered part of this written understanding between the
parties hereto.
28. PUBLICITY
Except as required by law or the rules of the principal stock exchange on
which the party's stock is traded, no party shall originate any public
statement, news release or other public announcement (oral or written),
whether in the public press, stockholders' reports, at investors meetings
or meetings with individual investors, or otherwise, relating to this
Agreement or to any sublicense hereunder, or to the performance hereunder
or any such agreements, including information related to price and sales
amounts, or use a party's name for any purpose, including, without
limitation, in connection with the advertising or sale of the Product,
without the prior written approval of the other party, such consent not to
be unreasonably withheld. The parties each agree to respond to each such
request within five (5) business days of receipt of a request (unless a
shorter period of time is necessary to comply with law). In the case of
unintentional public disclosure concerning this Agreement, any Product or
any other subject matter hereof, the disclosing party shall promptly
inform the other party of such disclosure and the other party shall be
entitled to make a public announcement regarding the subject matter of the
disclosure. The other party
21
shall notify the disclosing party of their intention to make such an
announcement. Following a party's consent to or approval of the public
disclosure of any information pursuant to this Section 28, both parties
shall be entitled to make subsequent public announcements of such
information without renewed compliance with this Section 28, unless the
scope and/or duration of such consent or approval is expressly limited.
Upon conclusion of this Agreement, the parties will publish a press
release on their future cooperation.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on the date
first above written.
CURA PHARMACEUTICAL CO., INC.
By: /s/ Fabio Lanzieri
--------------------------------
Fabio Lanzieri
President
SPECTRUM PHARMACEUTICALS, INC.
By: /s/ Rajesh C. Shrotriya
--------------------------------
Rajesh C. Shrotriya, M.D.
Chairman, CEO and President
22
SCHEDULE A
THE PRODUCT
-----------
GENERIC NAME BRAND NAME [***]
- ------------ ----------
Carboplatin Paraplatin [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
- --------
Certain information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
23
SCHEDULE B
NET MANUFACTURING COST
----------------------
GENERIC NAME BRAND NAME [***] MANUFACTURING COST
- ------------ ---------- ------------------
Carboplatin Paraplatin [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
[***] [***] [***] [***]
- -------
Certain information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
24
SCHEDULE C
FORM OF [***] NET PROFIT STATEMENT
[***] ENDED XXXXX XX, XXXX
GROSS INVOICED SALES $ -
=============
LESS:
Chargebacks -
Rebates/Allowances -
Bad Debts -
Returns -
Shelf Adjustments -
Cash Discounts -
Freight Out -
Other -
Total Deductions -
-------------
NET SALES $ -
=============
LESS: Manufacturing Costs of Products -
-------------
NET PROFITS $ -
-------------
- -------------------------------------------------------------------------------
CURA PORTION $ -
=============
SPECTRUM
NET PROFIT PORTION $ -
+ MANUFACTURING COST $ -
DUE SPECTRUM $ -
=============
- -------------------------------------------------------------------------------
- --------
Certain information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
25
CONFIDENTIAL
SCHEDULE D
FORM OF FINAL NET PROFIT STATEMENT
FISCAL YEAR ENDED DECEMBER 31, xxxx
TOTAL ACTUAL
QTR 1 QTR 2 QTR 3 QTR 4 REPORTED ADJ. ANNUAL
----- ----- ----- ----- -------- ---- ------
GROSS INVOICED SALES $ - $ - $ - $ - $ - $ - $ -
------------------------------------------------------------------
LESS: - - - - - - -
Chargebacks - - - - - - -
Rebates/Allowances - - - - - - -
Bad Debts - - - - - - -
Returns - - - - - - -
Shelf Adjustments - - - - - - -
Cash discounts - - - - - - -
Freight Out - - - - - - -
Other - - - - - - -
------------------------------------------------------------------
Total Deductions - - - - - - -
==================================================================
NET SALES $ - $ - $ - $ - $ - $ - $ -
------------------------------------------------------------------
Less: Manufacturing Costs
of Products - - - - - - -
------------------------------------------------------------------
NET PROFITS $ - $ - $ - $ - $ - $ - $ -
==================================================================
- ----------------------------------------------------------------------------------------------------
CURA PORTION $ - $ - $ - $ - $ - $ - $ -
AMOUNT DUE SPECTRUM $ - $ - $ - $ - $ - $ - $ -
- ----------------------------------------------------------------------------------------------------
AMOUNT PAID TO SPECTRUM IN FISCAL YEAR ENDING 12/31 $ -
ADJUSTED AMOUNT THAT SHOULD HAVE BEEN PAID TO SPECTRUM IN TWELVE MONTHS
ENDED DECEMBER 31, 200X -
-----
AMOUNT DUE FROM/(TO) SPECTRUM $ -
=====
- ----------------------------------------------------------------------------------------------------
CONFIDENTIAL
26