This
Promotion Agreement (“Agreement”) is entered into as of
February 3, 2010 (“Effective Date”) by and between
MiddleBrook Pharmaceuticals, Inc. (“MBRK”), a Delaware
corporation with offices at 7 Village Circle, Suite 100,
Westlake, TX 76262 and DoctorDirectory.com, Inc .
(“DD”), a South Carolina Corporation, with offices at
One Page Avenue, Suite 280, Asheville, NC 28801.
WHEREAS DD
provides advertising, promotion and marketing services to
pharmaceutical companies that seek to market their products to
physicians and other allied medical professionals including nurses,
nurse practitioners, and physician assistants; and
WHEREAS
MBRK markets prescription drug products, including its product
known as MOXATAG ®
(“MOXATAG”)
to licensed physicians, nurses, nurse practitioners, and physician
assistants in the United States (“US”) whose clinical
practice is consistent with MOXATAG’s approved labeling;
and
WHEREAS
MBRK seeks to have MOXATAG promoted to as many licensed US
physicians, nurse practitioners and physician assistants whose
clinical practice is consistent with MOXATAG’s approved
labeling as is possible and practical.
THEREFORE,
for good and valuable consideration, the sufficiency and receipt of
which is hereby acknowledged, the Parties agree that DD will
promote MOXATAG to certain US physicians and others as identified
in this Agreement subject to the terms and conditions as set forth
below:
The terms
as used in this Agreement will have the meanings as
follows:
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(a)
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“ Actual DD Target
Segment MOXATAG TRx ” means the total actual number
of MOXATAG prescriptions filled in the US during the applicable
Promotional Measurement Period and written by DD Target Segment
Prescribers as stipulated by the Prescriber Data.
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(b)
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“ Actual DD Target
Segment MOXATAG TRx Tablets ” means the average
number of tablets contained in all MOXATAG TRx during the
applicable Promotional Measurement Period as stipulated by the
Prescriber Data including the tablet quantities as reported by IMS
NPA weekly EUTRx (tablets) data, multiplied by Actual DD
Target Segment MOXATAG TRx.
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(c)
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“ Change of
Control ” means the change of control of MBRK, as
defined by any of the following events: A) any third party acquires
directly or indirectly the beneficial ownership of any voting
security of MBRK representing fifty percent (50%) of the total
voting power of the then outstanding voting securities of MBRK; B)
the consummation of a merger, consolidation, recapitalization, or
reorganization of MBRK with or by a third party which
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would result in fifty percent (50%) or more of
the total voting power of MBRK stock being transferred to a third
party; or C) the stockholders or equity holders of MBRK approve a
plan of complete liquidation of MBRK or an agreement for the sale
or disposition of all or substantially all the assets of
MBRK.
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(d)
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“ Coupons
” means those coupons or vouchers
provided by MBRK and distributed through a MBRK designee and whose
redemption is tracked by a MBRK designee, and redeemed by patients
filling MOXATAG prescriptions written by DD Target Segment
Prescribers.
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(e)
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“ Cost of Coupon
Redemption Amount ” means the redemption amount and the
costs associated with printing and processing those Coupons
redeemed during the applicable Promotion Measurement
period.
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(f)
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“ Cost of Samples
Amount ” means the cost of manufacturing and
delivering (including, without limitation, all applicable freight,
packaging and shipping costs) and costs of any third party vendors
used in connection with manufacturing and fulfillment of MOXATAG
samples.
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(g)
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“ Deposit
” means that amount which MBRK shall deposit with DD upon the
Promotion Commencement Date and as subject to the adjustment
outlined in Section 5.
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(h)
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“ DD Target Segment
Prescribers ” means the licensed prescribers as
defined in EXHIBIT 1.
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(i)
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“ Early Termination
Fee ” means that amount equal to the most
recent month’s Promotion Fee prior to termination, multiplied
by the number of unexpired months remaining in the current year of
the Agreement.
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(j)
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“ End of Agreement
Fee ” means the fee, in addition to any other amounts
due, payable to DD (when this Agreement is terminated as further
described in Section 18(f)) that is equal to two
(2) times the last month’s Promotional Fee earned by DD
during the last month of the Agreement.
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(k)
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“ FDA
” means the federal Food and Drug
Administration.
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(l)
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“ Gross Margin Per
Tablet ” means the Gross Margin calculated in
accordance with GAAP and which excludes those non-recurring and
unusual items that the Parties agree are not resulting from
activities under this Agreement (“GM Adjustment Items”)
divided by the actual number of MOXATAG tablets (as report
by IMS Health Rx data) during the applicable Promotional Period. By
way of example, these GM Adjustment Items where appropriate may
include inventory write-offs, changes to prior period reserve
balances or foreign exchange gains or losses. MBRK agrees to
provide a summary of any GM Adjustment Items to DD. The calculation
of Gross Margin Per Tablet will be based on U.S. sales of MOXATAG
only. For periods after September 30, 2010, if the Gross
Margin per Tablet is less than $3.50, the Parties agree to
re-evaluate the viability of the Agreement and if deemed necessary
will use commercially reasonable efforts to re-negotiate an
amendment to the Agreement.
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(m)
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“ Gross Margin Per TRx
” means
the Gross Margin per MOXATAG Rx as calculated in accordance with
GAAP and which exclude GM Adjustment Items. The calculation of
Gross Margin Per TRx will be based on U.S. sales of MOXATAG only.
For the period from the Effective Date through September 30,
2010, the Gross Margin per TRx shall be $36.50.
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(n)
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“ Intellectual Property
Rights ” means any and all patents,
copyrights, trade secrets, trademarks, and any and all other
intellectual property rights or interests.
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(o)
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“ Medical
Professionals ” means licensed nurses, nurse
practitioners, and physician assistants.
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(p)
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“ MOXATAG
” means the prescription drug known as MOXATAG
®
(amoxicillin
extended-release) Tablets 775 mg, approved by the FDA, having NDC
numbers 110442-142-03 and 110442-142-02 which is marketed in the
US, including currently and subsequently approved formulations,
strengths, concentrations and delivery mechanisms.
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(q)
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“ MOXATAG
Labeling ” shall mean (a) the FDA-approved full
prescribing information for MOXATAG, including any required patient
information, and (b) all labels and other written, printed or
graphic matter upon any container, wrapper or any package insert or
outsert utilized with or for MOXATAG.
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(r)
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“ Parties
” means DD and MBRK collectively.
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(s)
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“ Prescriber
Data ” means the prescriber data supplied by a
nationally recognized prescription data provider where permitted
under federal and state law, which is currently provided to MBRK by
IMS Health.
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(t)
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“ Promotion
Commencement Date ” means the first day of the month
in which DD commences its promotion of MOXATAG under this
Agreement.
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(u)
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“ Promotion
Fees ” means the Promotion Fees payable to DD by MBRK
for the promotion services provided under this Agreement as is
calculated by and stipulated in Section 5, which represent
fair market value for such services.
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(v)
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“ Promotional
Materials ” shall mean all MBRK-approved and
available sales representative training materials and all
MBRK-approved and available written, printed, graphic, electronic,
audio or video matter, including, but not limited to, journal
advertisements, sales aids, formulary binders, reprints, direct
mail, direct-to-consumer advertising, Internet postings, broadcast
advertisements and sales reminder aids (for example, scratch pads,
pens and other such items), in each case created by a party or on
its behalf and used or intended for use by DD and MBRK in
connection with any promotion of MOXATAG hereunder, or disease
state or indication for which MOXATAG is approved for treatment but
excluding MOXATAG Labeling.
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(w)
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“ Promotional
Measurement Period ” means that month during which
prescription activity for MOXATAG is measured.
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(x)
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“ Territory
” shall mean the US, including all US territories,
possessions and protectorates.
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(y)
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“ Up-Front Payment
” means
the one-time payment of $50,000 to be made by MBRK to DD upon
execution of this Agreement.
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This
Agreement shall commence as of the Effective Date and shall
continue in full force and effect for an initial term of three
(3) years from the Promotion Commencement Date, divided into
three one-year periods. Unless terminated in accordance with the
provisions of Section 18, this Agreement shall automatically
renew for each subsequent one-year term.
Section 3
—
Obligations of DD
3.1
DD will
promote MOXATAG to DD Target Segment Prescribers using its full
suite of promotion solutions where DD and MBRK deem appropriate,
including but not limited to DD’s a)
eSampling Platform, b) eLearning / eDetailing, c) Educational
Email, d) Direct-to-Physician Bulletin Services, e) Physician
Portal Promotions, f) Patient Portal Promotions, g) Direct Mail
Advertising, h) Coupon Promotions, i) Consumer Condition Content,
j) Search Engine Marketing and k) Mini Web Site Promotions where
appropriate and with prior written approval from MBRK. MBRK shall
have final approval as to the promotion solutions utilized by DD in
the promotion of MOXATAG and DD will not deploy any promotion
solution without such approval from MBRK. Such promotion solutions
are as listed in EXHIBIT 4. In the event that the Parties mutually
agree on the provision of additional services beyond those listed
in EXHIBIT 4, such additional promotional solutions shall be
approved by MBRK and additional Appendices numbered sequentially
(1, 2, 3, 4 etc.) setting forth in detail the additional services
shall be duly signed by authorized representatives of the Parties
and attached to EXHIBIT 4 and incorporated herein. The services
contained in EXHIBIT 4 and any related modifications thereto
represent those services that are reasonably necessary to
accomplish the promotion of MOXATAG. No services shall be provided
by DD, or paid for by MBRK, except as agreed to in writing by the
Parties.
3.2.
Notwithstanding
any other provision of this Agreement, all Promotional Materials
relating to MOXATAG that will be utilized by DD, as well as the use
and placement of such Promotional Materials, are subject to written
approval by MBRK prior to such use. DD agrees to provide draft and
final versions of all Promotional Materials to MBRK for
MBRK’s review and approval prior to DD’s use of such
Promotional Materials, provided such materials are developed or
modified by DD. MBRK has the authority to perform the final review
of all Promotional Materials developed by DD. All Promotional
Materials are subject to MBRK’s legal, medical and regulatory
review and approval process. DD agrees to make all the necessary
changes and/or modifications requested by MBRK. DD shall not use
Promotional Materials for any purpose outside of this Agreement
without prior written authorization from MBRK.
3.3.
Notwithstanding
any other provision of this Agreement, all MOXATAG sample request
forms (hereinafter “Sample Request Forms”) utilized by
DD to document a prescriber’s request for MOXATAG samples are
subject to written approval by MBRK. DD agrees to provide draft and
final versions of all Sample Request Forms to MBRK for MBRK’s
review and approval prior to DD’s use of such Sample Request
Forms. MBRK has the authority to perform the final review of all
Sample Request Forms developed by DD or used in conjunct. All
Sample Request Forms are subject to MBRK’s legal, medical and
regulatory review and approval process. DD agrees to make all the
necessary changes and/or modifications requested by MBRK. DD shall
not use Sample Request Forms for any purpose outside of this
Agreement without prior written authorization from MBRK.
3.4.
Notwithstanding
any other provision of this Agreement, DD shall not offer or
provide any item to a DD Target Segment Prescriber, without prior
written approval by MBRK. The provision of any items shall be
subject to MBRK’s legal, medical and regulatory review and
approval process. In the event that MBRK authorizes the provision
of items of nominal value to a DD Target Segment Prescriber, DD
shall track and record the item provided, the associated value, the
date of the transaction, and the recipient DD Target Segment
Prescriber, including his or her credentials and the state in which
he or she is licensed, where possible.
3.5
DD shall
use commercially reasonable efforts to promote MOXATAG to DD Target
Segment Prescribers and agrees to efficiently perform the services
as described in EXHIBIT 4 in compliance with MBRK’s policies
and procedures, and all applicable federal and state laws and
regulations, including, without limitation, federal and state
anti-kickback statutes, regulations contained in 21 CFR (Code of
Federal Regulations) as they pertain to promotional activity of an
FDA-approved pharmaceutical product and the US Department of Health
and Human Services Office of Inspector General’s
(“OIG”) Compliance Program Guidance for Pharmaceutical
Manufacturers (2003). DD agrees that it shall not directly or
indirectly offer, pay or transfer anything of value, in cash or
in-kind,
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