MARKETING AND LICENSE AGREEMENT
THIS AGREEMENT is made as of 2 October, 2000,
BETWEEN:
Allwin Biotrade Ltd., a company having offices at 1200, 543 Granville
Street, Vancouver, British Columbia, Canada,
("Allwin")
AND:
Fargin S.A., a company having offices at Juncal 1327, Piso 18, Esc. 1801,
Montevideo, Uruguay,
("Fargin")
WHEREAS:
(A) Allwin, an affiliate of Dragon Pharmaceuticals Inc., based in Vancouver,
Canada has certain world-wide marketing and sales rights for the Products;
and
(B) Allwin has agreed to grant certain rights to Fargin to sell the Products in
the specified market;
THIS AGREEMENT WITNESSES that in consideration of $1 paid and other
consideration given, by each party to each other party, the receipt and
sufficiency of which each party acknowledges, the parties severally AGREE as
follows: Part 1
Definitions and Interpretation
Definitions
1.1 In this Agreement, except as otherwise expressly provided or as the context
otherwise requires:
(a) Affiliate of a party means a corporation or entity that, directly or
indirectly, controls, is under common control with or is controlled by
the specified party;
(b) Indication means the use of the Product to treat a particular
condition as described in Schedule A;
(c) Market Area means the territory described in Schedule A;
(d) Marketing Approval has the meaning set out in Schedule A;
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(e) Products means those biotechnology drugs listed in Schedule A;
(f) Purchase Orders has the meaning set out in ss.3.3;
(g) Trademarks means those trademarks and trade names listed in Schedule
C.
Interpretation
1.2 In this Agreement, except as otherwise expressly provided or as the context
otherwise requires,
(a) "this Agreement" means this agreement as from time to time
supplemented or amended by one or more agreements entered into
pursuant to the applicable provisions of this Agreement,
(b) a reference to a Part is to a Part of this Agreement, and the symbol
ss. followed by a number or some combination of numbers and letters
refers to the section, paragraph, subparagraph, clause or subclause of
this Agreement so designated,
(c) headings are solely for convenience of reference and are not intended
to be complete or accurate descriptions of content or to be guides to
interpretation of this Agreement or any part of it,
(d) the word "including", when following a general statement or term, is
not to be construed as limiting the general statement or term to any
specific item or matter set forth or to similar items or matters, but
rather as permitting the general statement or term to refer also to
all other items or matters that could reasonably fall within its
broadest possible scope,
(e) an accounting term not otherwise defined herein has the meaning
assigned to it, and every calculation to be made hereunder is to be
made, in accordance with accounting principles generally accepted in
the United States applied on a consistent basis,
(f) a reference to currency means United States currency,
(g) a reference to a statute includes all regulations made thereunder, all
amendments to the statute or regulations in force from time to time,
and every statute or regulation that supplements or supersedes such
statute or regulations,
(h) a reference to an entity includes any successor to that entity,
(i) a word importing the masculine gender includes the feminine and
neuter, a word in the singular includes the plural, a word importing a
corporate entity includes an individual, and vice versa, and
(j) a reference to "approval", "authorization" or "consent" means written
approval, authorization or consent.
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Part 2
GRANT OF LICENSE
License
2.1 Subject to the terms of this Agreement, Allwin hereby grants to Fargin an
exclusive license to sell the Products in the Market Area for treatment of
the Indication. Sales outside of the Market Area are prohibited and Fargin
will have rights to formulate, vial, and package the products set out in
schedule A.
2.2 Notwithstanding ss.2.1, Allwin retains the right for it, and its
Affiliates, to sell the Products in the Market Area.
2.3 Nothing in this Agreement confers on Fargin any interest, licence or right
in respect of Products, other than as set out herein, and the Products will
remain the exclusive property of Allwin and its Affiliates.
2.4 Fargin will forthwith disclose to Allwin every improvement to or further
development of the Products, including the results of any research, testing
or clinical trials conducted by or on behalf of Fargin. The results of such
research, testing, trials and improvements will be immediately disclosed to
Allwin and will be owned by Allwin and its Affiliates, without any
obligation of Fargin, with respect to the ownership or use of such
information or the payment of any compensation.
Fargin's Regulatory Obligations
2.5 Fargin will be responsible for obtaining, at its expense, all registrations
from applicable regulatory authorities in order to permit the sale of the
Products in the Market Area (the "Marketing Approval"). In particular,
Fargin will (a) Expeditiously pursue steps to register product first in
Brazil, while simultaneously seeking registration in all other countries
within assigned territory.
2.6 Allwin will use reasonable efforts to assist Fargin in obtaining the
Marketing Approval, including providing to Fargin:
(a) the following documents
-Any and all reasonable documents required to obtain registration and
marketing approval within Fargin's assigned territory, as well as
necessary technical documentation and assistance required for local
formulation and packaging in Fargin's facilities
(b) at the cost of Allwin, such amounts of the Product (to a maximum of
1000 vials without the further consent of Allwin) necessary for Fargin
to conduct such research or clinical testing required to be completed
in order to obtain the Marketing Approval
(c) at such time as Fargin may undertake vialling operations within
Brazil. Allwin agrees to provide all and any technical support towards
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this effort. This technical support is to include exchange visits of
technical personal from Huaxin to Fargin and from Fargin to Huaxin.
Travelling parties will pay their own airfare but cost of lodging is
to be supported by the hosting company at a four/five star hotel.
(d) Allwin will supply Fargin the necessary documentation to establish the
bioequivalence of the product as compared to the market leader (as
recommended by the Brazilian government) when required by the Ministry
of Health of Brazil.
Notwithstanding the foregoing, nothing will obligate Allwin or any of its
Affiliates to conduct any research activities or clinical trials in order for
Fargin to obtain the Marketing Approval.
2.7 All registrations made in order to obtain the Marketing Approval will be
made by Fargin on behalf of and in the name of Allwin and, as directed, any
of Allwin's Affiliates.
Fargin's Sales Obligations
2.8 Fargin will, at its expense,
(a) use all reasonable efforts to promote the sale of the Products in the
Market Area,
(b) arrange for and maintain adequate storage space for the Products in
the Market Area;
(c) as it considers necessary to effect the sales of the Products,
maintain a trained and competent sales force,
(d) work with Allwin to develop new marketing aids and strategies, and
(e) develop and implement promotional programs designed to successfully
market the Products in the Market Area.
(f) Yearly, on the anniversary of the execution of this agreement provide
Allwin with a detailed sales and marketing plan, to include minimum
order amounts. This document will be the base document for assessment
of Fargin's performance as a licensee within the assigned territory.
The initial sales and marketing plan is to be submitted to Allwin
within sixty days of the approval of the product in the respective
territory.
Sublicenses
2.9 Fargin may not grant sublicenses to sell the Products in the Market Area
without the consent of Allwin, which consent Allwin can refuse to grant in
its sole discretion or may grant on such terms and conditions as it sees
fit.
Marketing Plan
2.10 Fargin, Allwin and their Affiliates will jointly develop a marketing plan
for the sale of the products in the Market Area. The marketing plan will be
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prepared by the 30th of October of each year and will cover the 12-month
period from January to December of the following year. The plan will be
reviewed quarterly by representatives of Fargin and Allwin.
Branding
2.11 Fargin and Allwin will jointly determine a name under which the Products
will be sold in the Market Area. At Allwin's option, the name "Dragon" and
any related trademarks will be included in, or linked and used with, the
name selected. Fargin and Allwin will share ownership of the brand name
developed under this section and, except with the consent of the other
party, will not use such name other than in connection with the Products in
the Market Area.
Marketing Tools
2.12 To assist Fargin's marketing of the Products, Allwin will provide Fargin,
at no cost to Allwin, access to its promotional materials for the Products
and Trademarks including all mechanical artwork and designwork in
connection with the use of the Trademarks. Fargin will pay the cost of
reproduction of such materials. During the first year Allwin will cover 50%
of the cost of the reproduction of the promotion material to be paid in
product
Market Area Packaging
2.13 Fargin will work with Allwin to develop distinctive packaging materials
suitable to the Market Area. All packaging will be subject to the approval
of Allwin and will include, at the option of Allwin, such trademark or
logos of Allwin or its Affiliates as determined by Allwin. Fargin will be
responsible for the costs of all packaging when packaging is done locally
in the territory.
Trademark License
2.14 Allwin grants to Fargin, subject to the entering into of a trademark
license agreement, the non-exclusive, non-transferable right and license to
use the Trademarks for the purposes of advertising, promoting and marketing
the Products in the Market Area. Except those rights set out in the
trademark license agreement, if any, Allwin has no proprietary rights in
and to the Trademarks.
2.15 If Allwin develops any further trademarks or trade names in connection with
the Products, Allwin will license Fargin to use such trade names or
trademarks in connection with the Products and all provisions in this
Agreement relating to the use of the Trademarks will apply to such future
licenses.
2.16 Fargin will assist Allwin in obtaining, as required, registrations of
Allwin's Trademarks in the Market Area, all such costs to be borne by
Allwin.
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Part 3
PRICING, ORDERS anD PAYMENT
Price
3.1 Subject to ss.3.2, Allwin will sell the Products to Fargin at the prices
set out in Schedule B. The parties will review pricing for the Products
every 12 months during the term of this Agreement. In a case of large
orders (individual orders larger than 250,000 vials), Allwin will
favourably reconsider re-negotiation of price prior to the end of 12-month
period.
Re-sale Prices
3.2 Subject to all applicable laws and the approval of Allwin, which will not
be unreasonably withheld, Fargin will determine the prices at which the
Products will be sold in the Market Area. In reviewing the resale price for
the Products, Allwin and Fargin will take into account considerations of
consumer affordability and maintaining appropriate price advantages over
competitors.
3.3 With respect to bids to deliver Products made by public tender of
substantial quantities, before responding Fargin and Allwin will agree on
the pricing to be included in such tender.
Purchase Orders
3.4 Fargin will prepare purchase orders ("Purchase Orders") for all Products
and each such order will specify the type of Products, the quantity of each
Product and any other information that Allwin considers necessary. Purchase
Orders cannot be amended without the consent of Allwin.
3.5 Allwin will acknowledge receipt of all Purchase Orders by a facsimile sent
within five business days after receipt of Fargin's notice.
Delivery Times
3.6 Allwin will promptly fill all Purchase Orders received from Fargin in
accordance with the terms of each Purchase Order and will ensure, unless a
longer delivery time is specified in a Purchase Order, a 60-day delivery
time for each such Purchase Order. If Allwin is able to deliver the
Products in a shorter period of time than specified in the Purchase Order,
it will notify Fargin of such earlier delivery date.
Payment
3.7 Fargin will make full payment for Products shipped to it by Allwin on or
before 150 days after the date of shipment provided that, before the expiry
of the payment period, Fargin has received from Allwin the following
documents:
(a) Allwin's detailed invoice;
(b) customs' invoice;
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(c) air waybill;
(d) packing list; and
(e) pharmaceutical certificate of analysis, quality assurance and quality
control documents and batch certificates.
Letter of Credit
3.8 Fargin will, at the request of Allwin, at any time during the term of this
Agreement, provide a standby irrevocable letter of credit to Allwin which
letter of credit may be drawn by Allwin upon default by Fargin of payment
in connection with any Products as provided in the preceding section.
Notwithstanding any other provision of this Agreement, if it has requested
a letter of credit Allwin will not be obligated to manufacture or deliver
any Product until it has received the letter of credit..
3.9 The value of the standby irrevocable letter of credit need not exceed the
value of the Purchase Order for which Allwin has requested the letter of
credit.
Audit Right
Allwin reserves the rights to periodically inspect Fargin financial records as
pertain to sales of products described in schedule A.
Additional Procedures
3.10 The parties recognize that additional procedures related to the purchase
and shipment of Products may be necessary from time to time during the term
of this Agreement and each will cooperate with the other to formulate and
implement new policies and procedures.
Part 4
MANUFACTURING
Specifications
4.1 Allwin will produce, or will arrange for an affiliate to produce, all
Products to its best technical standards and in accordance with W.H.O. cGMP
specifications in effect at the time of manufacture.
Shipping
4.2 Allwin will ensure that each shipment conforms to the Purchase Order and
all Products will be packaged and shipped in accordance with recognized
standards for guaranteeing maintenance of chain of refrigeration from the
Products manufacturing facility to Fargin's facility, through a mutually
agreed upon air courier service. To permit the proper tracking of the
Product, the air waybill number will be transmitted to Fargin as soon as
practicable after shipment of the Product.
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Storage and Inspection
4.3 Fargin will promptly store all Products immediately upon receipt in a
storage facility capable of maintaining the requisite refrigeration and
will, as soon as practicable after receipt of any Product, inspect the
shipment and advise Allwin of conformity with the Purchase Order.
Testing of Product
4.4 Fargin may arrange for the Product to be tested at an independent third
party facility, including the State Laboratory in Brazil, to determine
whether the efficacy or purity of the Product is within manufacturing
specifications as provided for in the Marketing Approval. Fargin will
promptly notify Allwin of such test results once received.
4.5 If the testing conducted under ss.4.4 determines that the Product fails to
meet the standards of efficacy or purity required under the terms of the
Marketing Approval, Fargin will be entitled to receive, at the option of
Allwin, a refund of the purchase price as specified in the Purchase Order
or a replacement shipment of the Product. Notwithstanding the foregoing,
Allwin may, before providing a refund or replacement Product, conduct
testing at an independent third party facility of the Product shipment. If
the results of Allwin's testing indicate that the Product does meet the
standards set out in the Marketing Approval, Allwin and Fargin will use
good faith efforts to resolve the discrepancy in the test results and make
a determination as to the suitability of the shipment for sale.
Part 5
CONFIDENTIALITY AND NON-COMPETITION
Confidentiality
5.1 In order to protect all confidential or proprietary information that may be
shared between the parties during the term of this Agreement, concurrent
with, or as soon as practicable after, the execution of this Agreement, the
parties will enter into a non-disclosure agreement.
5.2 The non-disclosure agreement referred to in ss.5.1 will be substantially in
the form of the agreement dated July 7, 2000 between Dragon
Pharmaceuticals, the parent company of Allwin and Fargin, with the
necessary changes.
Non-Competition
5.3 During the term of this Agreement, and for a period of three years
thereafter, Fargin will not, directly or indirectly,
(a) in sole proprietorship,
(b) in any partnership,
(c) as the owner of any amount of the shares of any class of any
corporation engaged in the manufacture, sale or distribution of the
Product, or
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(d) in a business which competes with the Allwin or its Affiliates or
partners,
engage in or carry on the business of manufacturing, distributing or marketing,
the Product in and outside of the Market Area, including seeking to either
directly or indirectly, a licence or any other right or authority from any party
to manufacture or sell a product that competes with the Product.
5.4 Fargin agrees and acknowledges that all the restrictions in this Agreement
are reasonable for the protection of legitimate business interests and
proprietary rights of Allwin and hereby waives all defences to the strict
enforcement thereof.
Part 6
DISPUTE RESOLUTION
Disputes
6.1 If at any time there is a dispute among the parties with respect to any
matter relating to this Agreement, any party that wishes the issue to be
considered further will give notice to the other of that it requires the
dispute to be decided under the terms of this Agreement.
Referral to Senior Officers
6.2 If a notice is given under ss.6.1, a senior officer designated by each
party will undertake discussions for the purpose of settling the dispute. A
decision reached by these officers and communicated in writing to the
parties will be determinative of the dispute and will be binding on each
party.
Arbitration
6.3 If no decision is reached under ss.6.2 within 30 days of the dispute being
sent for consideration, either party may, by notice to the other party
given at any time before a decision is rendered under ss.6.2, submit the
dispute for determination by a single arbitrator acting under the Rules of
the British Columbia Commercial Arbitration Centre.
6.4 If the parties can not agree on a single arbitrator, the arbitrator will be
appointed by the British Columbia International Commercial Arbitration
Centre.
6.5 The arbitration will take place in Vancouver, British Columbia and will be
administered by the British Columbia International Arbitration Centre and
conducted in accordance with the procedures of the Centre.
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Part 7
TERM AND TERMINATION
Term
7.1 This Agreement will be in effect for a seven-year period ending on 9
August, 2007, and will be renewed automatically for successive two year
terms unless otherwise terminated in accordance with the terms hereof (the
"Term"). Fargin's exclusivity within its territory will be considered in
jeopardy if target sales performance as proposed in the yearly detailed
sales and marketing plan described in section 2.8 is not met, if not
actually exceeded.
Termination by Either Party
7.2 Either party may terminate this Agreement
(a) upon notice given at least 180 days before the end of the current
Term, such termination to come into effect at the end of that Term, or
(b) immediately upon written notice if the other party
(i) is in breach or violates any of the terms and conditions of or
fails to perform any of its obligations under this Agreement and,
after receiving notice from the other party, does not cure such
default within 60 days, or
(ii) becomes insolvent, bankrupt, makes an assignment for the benefit
of its creditors or has a receiver, receiver/manager, trustee or
liquidator appointed in respect of its business or its assets.
Liabilities
7.3 Upon termination of this Agreement, Allwin will be required to complete any
and all existing Purchase Orders as at the date of termination and Fargin
will be required to receive and pay for all Products shipped in connection
with such Purchase Orders.
Part 8
Liabilities and INDEMNIFICATION
Limitation of Liability
8.1 Allwin is responsible for the quality of the Product except in cases when
the Product default may attributable to the storage, distribution or
transportation of the Product within the Territory.
Indemnification
8.2 Fargin will indemnify, hold harmless, and defend Allwin and its Affiliates,
its directors, officers, employees, and agents against any and all claims,
suits, losses, damage, costs, fees, and expenses resulting from or arising
out of exercise of the rights granted under this Agreement and the sale of
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the Product, in the case that the product in question was locally vialled
by Fargin. This indemnification will include, but will not be limited to,
any product liability.
Insurance
8.3 Fargin and Allwin, at their sole costs and expenses, will insure their
activities in connection with the work under this Agreement and obtain,
keep in force, and maintain insurance or an equivalent program of self
insurance at its sole cost and expense,
Notice of Claim
8.4 Allwin will promptly notify Fargin in writing of any claim or suit brought
against Allwin in respect of which Fargin intends to invoke the provisions
of this Part. Fargin will keep Allwin informed on a current basis of its
defence of any claims pursuant to this Part.
Part 9
GENERAL PROVISIONS
Entire Agreement
9.1 This Agreement constitutes the entire agreement between the parties and
supersedes every previous agreement, communication, negotiation,
representation or understanding, whether oral or written, expressed or
implied, between the parties with respect to the subject matter of this
Agreement.
9.2 No director, officer, employee or agent of any party has any authority to
make any representation or commitment not contained in this Agreement, and
each party has executed this Agreement without reliance upon any such
representation or commitment.
Force Majeure
9.3 No party will be liable for its failure to perform any of its obligations
under this Agreement as a result of Acts of God (including all natural
disasters), strikes, lockouts, civil disturbances, government or court
ordered interruptions or delays, acts of war and riots, but that either
party to this Agreement may elect to terminate it upon three months written
notice to the other if force majeure cannot or is not remedied within three
months after its occurrence.
Severability
9.4 If any provision of this Agreement is at any time unenforceable or invalid
for any reason it will be severable from the remainder of this Agreement
and this Agreement will be construed as though such provision was not
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contained herein and the remainder will continue in full force and effect
and be construed as if this Agreement had been executed without the invalid
or unenforceable provision.
Amendments
9.5 This Agreement may not be amended except in writing signed by both parties.
Assignment
9.6 Neither party will be entitled to assign this Agreement without the written
consent of the other party.
Governing Law
9.7 This Agreement is and will be deemed to have been made in the Province of
British Columbia, for all purposes will be governed exclusively by and
construed and enforced in accordance with the laws prevailing in British
Columbia and the rights and remedies of the parties will be determined in
accordance with those laws.
Notice
9.8 To be effective, a notice, request, demand or direction (each for the
purposes of this provision a "notice") to be given pursuant to this
Agreement by one party to another party must be in writing and must be
(a) delivered by hand or by mail, or
(b) received by telecopier transmission or other similar from of written
communication by electronic means,
in each case addressed as applicable as follows:
If to Allwin at:
East Asia Chambers, PO Box 901, Road Town, Tortola, British Virgin Islands
Telecopier: +284 495 5088
Attention: Dr. Ken Cai
If to Fargin at:
Juncal 1327, Piso 18, Esc. 1801, Montevideo, Uruguay
Telecopier: +55 21 597 5251
Attention: Mr. J. Jabour A.
9.9 A notice delivered or sent in accordance with ss.12.9 will be deemed to be
given and received
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(a) at 8.00 a.m. on the day of delivery or receipt at the place of
delivery or receipt if that day is a Business Day at that place and
the delivery or receipt is before that time on that day,
(b) at the time of delivery or receipt if received on or after 8.00 a.m.
and before 4.00 p.m. at the place of delivery or receipt on a day that
is a Business Day at that place, and
(c) at 8.00 a.m. at the place of delivery or receipt on the next day that
is a Business Day at that place, if delivered or received on a day
that is not a Business Day at that place or at or after 4.00 p.m. at
that place.
No Partnership
9.10 Nothing in this Agreement will constitute, by any means, a partnership
between the parties.
Binding Effect
9.11 This Agreement will enure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties.
Further Assurances
9.12 Each party will, at such party's own expense and without expense to the
other party, execute and deliver such further agreements and other
documents and do such further acts and things as the other party reasonably
requests to evidence, carry out or give full force and effect to the intent
of this Agreement.
Counterparts
9.13 This Agreement [and any other writing delivered pursuant hereto] may be
executed in any number of counterparts with the same effect as if all
parties to this Agreement [or such other writing] had signed the same
document, and all counterparts will be construed together and constitute
one and the same instrument.
IN WITNESS WHEREOF this Agreement was executed by the parties as of the day and
year first above written.
Allwin Biotrade Ltd.
Per:
Dr. Ken Cai
Fargin Laboratorios Ltda
Per:
Mr. J. Jabour A.
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Witnessed for Allwin Biotrade Ltd.
Per: _____________________________
Robert K. Walsh
International Marketing Manager, Dragon Pharmaceuticals Inc.
