EXHIBIT 10.14
DATED 29 MAY , 2002
SCHERING AKTIENGESELLSCHAFT (1)
- and -
PHARMION GMBH (2)
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INTERIM SALES REPRESENTATION AGREEMENT
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PAGE INDEX
1. DEFINITIONS 4
2. APPOINTMENT OF PHARMION 6
3. EXISTING MARKETING AUTHORIZATIONS 7
4 DEVELOPMENT AND COMMERCIALIZATION EFFORTS IN TERRITORY 9
5. COORDINATION OF DEVELOPMENT; ADDITIONAL INDICATIONS 10
6. CONSIDERATION 10
7. MANUFACTURE AND SUPPLY OF PRODUCT 11
8. PRODUCT RETURNS 12
9. FORECASTING AND ORDERING 12
10. PACKAGING AND LABELING; USE OF NAME 14
11. QUALITY OF PRODUCT 15
12. DELIVERY 16
13. SUPPLY PRICE 17
14. INVENTORY 17
15. ADVERSE REPORTS; COMPLAINTS 19
16. UNDERTAKINGS OF PHARMION; IMPROVEMENTS 20
17. UNDERTAKINGS AND WARRANTIES OF SCHERING 20
18. RIGHT OF FIRST REFUSAL 20
19. CONFIDENTIALITY 20
20. INDEMNITIES AND INSURANCE 20
21. DURATION AND XXXXXXXXXXX 00
00. CONSEQUENCES OF XXXXXXXXXXX 00
00. RIGHTS AND REMEDIES 21
24. FORCE MAJEURE 21
25. NOTICE 22
26. ENTIRE AGREEMENT; VARIATIONS 22
27. ADDITIONAL TERMS 22
28. GUARANTEE 23
INTERIM SALES REPRESENTATION AGREEMENT
THIS AGREEMENT is made the 29th day of May 2002
BETWEEN:
(1) SCHERING AKTIENGESELLSCHAFT, a company registered in Germany and having
its principal place of business at 00000 Xxxxxx, Xxxxxxx ("Schering")
and
(2) PHARMION GMBH, a company registered in Switzerland and having its
Registered Office at Xxxxxxxxxxxxxxxxxx 0, Xxxxx 0000, Xxxxxxxxxxx
("Pharmion")
RECITALS:
(A) Schering is the owner or licensee of patents and trade marks relating
to the Product (as hereinafter defined), and is currently marketing and
selling the Product for the Initial Indication (as hereinafter
defined), through an affiliated company, in North America.
(B) Schering is the holder or is entitled to be registered as the holder of
Marketing Authorizations (as hereinafter defined) for the Product in
various countries of the Territory (as hereinafter defined), and is in
a position to supply Product to Pharmion for distribution in the
Territory on the terms hereinafter described.
(C) Pharmion's personnel have expertise and experience in the development,
registration, marketing and distribution of pharmaceutical products in
the Territory.
(D) Pharmion wishes to obtain rights to distribute the Product under the
Trade Marks (as hereinafter defined) for the Initial Indication, and in
coordination with Schering to develop the Product, obtain Marketing
Authorizations for and distribute the Product under the Product Patents
for Additional Indications (both as hereinafter
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defined) in the Territory, and Schering is willing to grant such rights
to Pharmion and to supply Product to Pharmion consistent with
Schering's priority to supply Product for the Schering Territory (as
hereinafter defined), all on the terms and conditions set out in this
Agreement.
(E) Pharmion acknowledges that Schering has certain manufacturing supply
issues and that its immediate corporate objective is to assure an
adequate supply of Product for sale in the Schering Territory; and both
Parties have entered into this Agreement as an interim measure, pending
a timely resolution of such manufacturing supply issues.
(F) Schering and Pharmion have, today, entered into a Distribution and
Development Agreement that is intended to come automatically into
effect if such manufacturing supply issues can be resolved during the
term of this Interim Sales Representation Agreement.
IT IS HEREBY AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1 Capitalized terms not otherwise defined in this Agreement shall have
the meanings ascribed to such terms in the Final Agreement, all of the
definitions of which are hereby incorporated by reference. In addition,
in this Agreement, the following terms shall have the following
meanings unless the context requires otherwise:
"AVENTIS SERVICES AGREEMENT" means the Sales Commission Services
Agreement between Schering and Aventis Pharma Deutschland GmbH dated
July 27, 2001.
"FINAL AGREEMENT" means the Distribution and Development Agreement
between Schering and Pharmion executed concurrently with this Agreement
on the date hereof.
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"INCEPTION DATE" means the first day of the calendar month following
the month in which this Agreement has been executed and delivered.
"INITIAL TERM" shall have the meaning provided in Section 21.1.
"INVENTORY" means all of Schering's inventories of Product Manufactured
for the Territory, consisting of Finished Goods packaged with Aventis
labeling.
"INVENTORY VALUE" has the meaning set out in Section 14.2 herein.
"RENEWAL TERM" shall have the meaning provided in Section 21.1 herein.
"REQUESTED ORDER" shall have the meaning set out in Section 9.2.2
herein.
"SHORT-DATED" means, with respect to Inventory, Inventory having a
remaining shelf life as of the Inception Date of less than six months.
1.2 Construction and Interpretation
In the interpretation of this Agreement:
1.2.1 the headings are for convenience only and shall not affect the
interpretation hereof;
1.2.2 references in this Agreement to Sections, Schedules and
Exhibits are to the sections of, and schedules and exhibits
to, this Agreement, except insofar as references are contained
in sections in this Agreement which are incorporated by
reference to the Final Agreement, in which case those
references are references to sections of, and schedules and
exhibits to the Final Agreement;
1.2.3 unless the context otherwise requires the singular shall
include the plural and vice versa, reference to any gender
shall include reference to the
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other gender, and references to persons shall include bodies
corporate, unincorporated associations and partnerships;
1.2.4 this Agreement includes the Schedules and Exhibits hereto; and
1.2.5 all provisions in this Agreement which are incorporated by
reference to the Final Agreement shall have the same effect in
this Agreement as if such provisions had been set forth
verbatim in this Agreement.
2. APPOINTMENT OF PHARMION
2.1 Subject to the terms and conditions of this Agreement, with effect from
the Inception Date, Schering hereby grants to Pharmion the exclusive
right:
2.1.1 to purchase the Product from Schering for resale in the Territory;
2.1.2 to advertise, market, promote, distribute, use and sell the Product
under and by reference to the Trade Marks and under the Patents in the
Territory for the Initial Indication and for any Additional Indications
that are approved by the Development and Marketing Committee and
covered by an appropriate Marketing Authorization in the country of
sale;
2.1.3 to use the Data to apply for, obtain and or maintain Marketing
Authorizations for the Product in the Initial Indication in countries
in the Territory where there are no Existing Marketing Authorizations
and in which it is commercially reasonable for Pharmion to do so;
2.1.4 to develop the Product under the Product Patents, Data and Improvements
for any Additional Indications approved by the Development and
Marketing Committee and to assist Schering in applying for and
obtaining Marketing Authorizations for the sale of the Product for such
Additional Indications in such countries within the Territory in which
Pharmion deems it commercially reasonable to do so.
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2.1.5 to use the Product Marketing Materials in connection with the
advertising, marketing, promotion and distribution of the Product in
the Territory.
2.2 The provisions of Section 2.3 of the Final Agreement is hereby
incorporated by reference into this Agreement.
2.3 From and after the Inception Date, Schering will transfer or procure
the transfer to Pharmion of such elements of the Data, as well as the
then current Product Marketing Materials, which Pharmion may request
from time to time, all such materials having been provided by Aventis.
To the extent needed by Pharmion or its Recognized Agents to be able to
distribute the Product in given countries within the Territory,
Schering will also procure the transfer to Pharmion of all available
regulatory documentation relating to the Product for such countries,
such documentation to include paper files and, if available, electronic
versions. During the term of this Agreement, each Party shall, upon the
reasonable request of the other, transfer such data developed by such
Party as comprise Improvements, as well as such new Product Marketing
Materials as have been developed by such Party. All such transfers
shall be coordinated through the Development and Marketing Committee,
and each Party shall have the right, consistent with Agency regulations
in the countries within the Territory or the Schering Territory, to use
the Product Marketing Materials developed by the other within its own
territory.
3. EXISTING MARKETING AUTHORIZATIONS
3.1 Schering will maintain the Existing Marketing Authorizations, and
Schering shall bear all costs and expenses incurred in connection with
such maintenance. Schering will appoint Pharmion or its designated
Recognized Agent as Schering's exclusive distributor or subdistributor
of the Product in the countries within the Territory.
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Schering shall notify Pharmion in advance of any meeting related to the
Product between Schering and any regulatory Agency in the Territory or
the Schering Territory where, in the reasonable judgment of Schering,
any such meeting could have an adverse effect on the development or
sale by Pharmion of the Product in the Territory or the Manufacture and
supply of the Product.
3.2 Schering shall keep Pharmion informed of any changes to the Existing
Marketing Authorizations which Schering wishes to make or is required
to make by an Agency in the Territory. However, in case an EMEA request
disables the implementation of requirements of an Agency in the
Schering Territory, then Schering may object to a change to the
Existing Marketing Authorizations and the Parties will negotiate in
good faith to solve this issue. In the event that a change requested by
Pharmion and consented to by Schering or required by an Agency should
require Schering to make any process or production changes, Schering
shall make such change, and all incremental costs incurred by Schering
in making and implementing such change shall be borne by Pharmion.
However, if such change is also required by an Agency in the Schering
Territory, then Schering and Pharmion shall share equally the cost of
any such change. Schering will keep Pharmion informed of Manufacturing
or other changes to the Product reportable to an Agency, including
without limitation those changes submitted to the U.S. or Canadian
Agency.
3.3 In case Pharmion exercises its rights pursuant to Section 2.1.3 of this
Agreement Pharmion shall bear all costs and expenses incurred in
connection with the application and maintenance of such Marketing
Authorizations. Pharmion shall keep Schering informed about any such
application for a Marketing Authorization.
3.4 The provisions of Sections 3.4, 3.5 and 3.6 of the Final Agreement are
hereby incorporated by reference into this Agreement.
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4. DEVELOPMENT AND COMMERCIALIZATION EFFORTS IN THE TERRITORY
4.1 Pharmion's Development Efforts: Pharmion shall use Commercially
Reasonable Efforts to develop the Product for the Initial Indication
and for any Additional Indications approved by the Development and
Marketing Committee in all countries of the Territory where it is
commercially reasonable to do so, taking into account (a) the
commercial potential of the Product on a country-by-country basis, (b)
Pharmion's reasonable judgment regarding the optimization of the sale
of the Product in the Territory taken as a whole and (c) the current
availability of supply of the Product from Schering (collectively, "the
Product's Commercial Potential").
4.2 The provisions of Sections 4.3, 4.4, 4,5 and 4.6 of the Final Agreement
are hereby incorporated by reference into this Agreement.
4.3 Transition of Order Processing, Distribution, Billing and Collection.
Order processing, distribution, billing and collection services for
sales of Product in the Territory are currently being conducted for
Schering by Aventis Pharma Deutschland GmbH ("Aventis Deutschland")
under the Aventis Services Agreement. Promptly following the Inception
Date, Pharmion will use Commercially Reasonable Efforts and will work
with Schering and Aventis Deutschland to arrange for the transition of
such services to Pharmion in each of the countries within the Territory
where the Product is currently being sold, with the goal of completing
such transition by the end of July 2002. During the period between the
Inception Date and the date on which such transition shall have been
effected in any given country within the Territory, Schering shall
provide to Pharmion the full benefits of the Aventis Services Agreement
(subject to Pharmion bearing the 4.5% commission of Aventis under such
Agreement), and all sales of Product from and after the Inception Date
shall be for the account of Pharmion.
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5. COORDINATION OF DEVELOPMENT EFFORTS; DEVELOPMENT FOR ADDITIONAL
INDICATIONS
5.1 The provisions of Sections 5.1, 5.2, 5.3, 5.4 and 5.5 of the Final
Agreement are hereby incorporated by reference into this Agreement.
5.2 Development for ACS Indication: During the term of this Agreement,
Pharmion shall not seek to obtain approval of the Product in any
country of the Territory for the ACS Indication.
6. CONSIDERATION
6.1 Initial Rights Acquisition Fee: As payment of purchase price for the
rights granted under this Agreement during its Initial Term, Pharmion
shall pay to Schering via wire transfer (the "Initial Rights
Acquisition Fee"):
6.1.1 the sum of $2,000,000 (two million dollars), within five (5)
Business Days of the Inception Date; and
6.1.2 the sum of $1,000,000 (one million dollars), within five (5)
Business Days of the end of the sixth month following the
Inception Date. If during the first sixth months of this
Agreement commencing on the Inception Date, deliveries of
Product to Pharmion by Schering were materially below the
amounts requested by Pharmion through the submission of
Requested Orders or if during this period there were material
disruptions in the timing of the delivery of Product by
Schering, but such short-falls in supply or disruptions of
supply were not at a level sufficient to constitute a Supply
Interruption Event under the provisions of the Final
Agreement, the Parties will negotiate in good faith a
reduction in the payment of this $1,000,000 (one million
dollars) amount.
6.2 Renewal Rights Acquisition Fee: Within five (5) Business Days of each
extension of the term of this Agreement for a Renewal Term of 12
calendar months, as contemplated by Section 21 hereof, Pharmion shall
pay to Schering via wire
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transfer the sum of $4,000,000 (four million dollars) (each a "Renewal
Rights Acquisition Fee") as additional purchase price for the rights
granted under this Agreement.
6.3 Business Commission: Pharmion shall pay Schering a business commission
of eight percent (8%) on all of Pharmion's Net Sales during the term of
this Agreement. Such commission shall be paid as follows:
6.3.1 Within twenty (20) Business Days after March 31, June 30,
September 30 and December 31 of each year during the term of
this Agreement, commencing with the calendar quarter ending
September 30, 2002 (with the first such period covering the
period from the Inception Date through September 30, 2002),
Pharmion shall deliver to Schering a true and accurate report
setting forth for the preceding three (3) calendar months (or
in the case of the first such period the amount of time
between the Inception Date and the end of such calendar
quarter): (a) Net Sales and (b) the business commission
payable thereon. Except as otherwise provided, simultaneously
with the delivery of each such report, Pharmion shall pay to
Schering the amount, if any, due for the period of such
report, by wire transfer to a bank account specified by
Schering. If no payments are due, it shall be so reported.
6.3.2 The provisions of Section 30 of the Final Agreement shall
apply to all such reports of Net Sales and the calculation of
the business commission due with respect to such Net Sales.
6.4 Partial Refund of Purchase Price: The provisions of Section 6.4 (a) of
the Final Agreement are hereby incorporated by reference into this
Agreement.
7. MANUFACTURE AND SUPPLY OF PRODUCT
7.1 Requirements Purchase and Sale. Pharmion will purchase all of its
requirements for the Product from Schering during the term of this
Agreement and, provided
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always that Pharmion fulfils its forecasting and ordering obligations
hereunder, Schering will use its Commercially Reasonable Efforts to
supply Pharmion the amounts of Product that it orders, provided,
however, that during the term of this Agreement Schering shall not be
required to divert production of the Product designated for the
Schering Territory in order to satisfy Pharmion's requirements.
Schering will supply Product to Pharmion as Finished Goods as long as
Aventis is the Manufacturer and as Semi-Finished Goods thereafter, at
which point Pharmion will be responsible for all further Packaging of
the Product. Except as otherwise provided herein, Schering will supply
the Product exclusively to Pharmion for sale in the Territory.
7.2 The provisions of Section 7.5 of the Final Agreement are hereby
incorporated by reference into this Agreement.
7.3 Absence of Claim: Except as otherwise provided in Sections 6.1.2 and
6.4, where Schering has complied with its obligations under this
Section 7, Pharmion shall have no claim or remedy against Schering
arising from Schering's cessation or failure to supply Product.
8. PRODUCT RETURNS
8.1 Returns: Schering will accept returns of Product (including returns of
short-dated Product), in accordance with Schering's standard policies,
from entities within the Territory that purchased the Product prior to
the Inception Date and which are returned prior to the First
Anniversary of the Inception Date (whether from Schering or Aventis)
and shall keep Pharmion informed, on a regular basis, of both the
volume of such returns and the customers from whom such returned
Product was obtained.
9. FORECASTING AND ORDERING
9.1 Long-Range Forecast: On the Inception Date, and on a monthly basis
thereafter, Pharmion shall furnish Schering with a rolling monthly
forecast of the quantities by SKU that Pharmion intends to order during
the succeeding twenty-one (21)
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month period (the "Long-Range Forecast"). The first Long-Range Forecast
delivered to Schering shall contain forecasts for the 21 month period
beginning with the month immediately succeeding the "Initial Period".
For the purposes of this Agreement, the "Initial Period" shall mean the
month in which the Inception Date occurs, and the next full three
months thereafter. The Long-Range Forecast shall represent the most
current estimates for planning purposes but shall not be purchase
commitments.
9.2 Firm Orders.
9.2.1 During the Initial Period, Schering shall supply Pharmion with
such quantities of Product as requested by Pharmion up to the
amount of Finished Goods and Semi-Finished Goods (if any) on
hand for use in the Territory as of the Inception Date. To the
extent Pharmion requires an amount in excess of such amount,
Schering shall use Commercially Reasonable Efforts to supply
Pharmion with such excess amounts but Schering shall not be
required to divert production of Product designated for the
Schering Territory in order to satisfy Pharmion's requirements
during the Initial Period.
9.2.2 To the extent consistent with the volume limitations set forth
in Section 9.3 below, the first three (3) months of the
Long-Range Forecast, as updated monthly, shall be treated by
both Parties as a request from Pharmion for a non-cancelable
legally binding commitment on the part of Schering to supply,
and on the part of Pharmion to purchase, the quantity of
Product by SKU as set forth in the Long-Range Forecast (each a
"Requested Order"). Within ten (10) Business Days following
the receipt of each month's Long-Range Forecast, Schering
shall notify Pharmion of its ability to fulfill such 3 month
commitment and if Schering shall accept such 3 month order in
writing, then it shall be a binding commitment on the part of
Schering to deliver, and on the part of Pharmion to purchase
the quantities specified (a "Firm Order"). If Schering
notifies Pharmion that it is able to supply some, but less
than all of the amount requested by Pharmion, then such lesser
quantity shall constitute a binding commitment
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on the part of Schering to deliver and on the part of Pharmion
to purchase the lesser quantities so specified (a "Firm
Partial Order"). In the event of a Firm Partial Order,
Schering shall use Commercially Reasonable Efforts to increase
the amount supplied to Pharmion in subsequent periods to
reduce the cumulative shortfall in supply. However, Pharmion
hereby acknowledges that circumstances may arise in which
Schering is unable to enter into a binding commitment to
deliver any of the Product desired by Pharmion in the first 3
months of a given Long-Range Forecast or to make up the
shortfall in supply occasioned by a Firm Partial Order.
9.3 Variations of Long-Range Forecasts:
The provisions of Sections 9.3.1 and 9.3.2 of the Final Agreement are
hereby incorporated by reference into this Agreement.
9.4 Terms of Firm Orders: Any Firm Orders, Firm Partial Orders, or related
purchase orders, purchase order releases, confirmations, acceptances,
advices and similar documents submitted by either Party in conducting
the activities contemplated under this Agreement are for administration
purposes only and shall not add to or modify the terms of this
Agreement. To the extent of any conflict or inconsistency between this
Agreement and any such document, the terms and conditions of this
Agreement shall control as to a particular order, unless otherwise
agreed to in writing by the Parties.
10. PACKAGING AND LABELING; USE OF NAME
10.1 Packaging and Labeling.
10.1.1 During the term of this Agreement, all Product shall be sold
under the Schering label, with Pharmion or its Recognized
Agent, as applicable, designated as the distributor of the
Product.
10.1.2 Schering shall be responsible for ensuring that all Packaging
and labeling, including, but not limited to, the package
make-up, package inserts and
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other elements relating to Packaging as well as all
promotional material, complies with all laws and regulations
applicable to such Packaging and labeling in the Territory.
10.1.3 Pharmion shall provide the information required under this
Section 10 to Schering in advance of delivery requirements for
the Product set forth in this Agreement.
10.1.4 In case Schering or the Manufacturer requires changes to the
Packaging for technical reasons (e.g. changes to Packaging
technology or equipment), Schering shall bear all costs of
such changes and the obsolete inventory of Packaging and label
materials, if any, resulting therefrom.
10.1.5 After each change of Packaging material, twenty-five (25)
samples of each new Packaging material shall be provided to
Pharmion.
10.2 The provisions of Section 10.2 of the Final Agreement are hereby
incorporated by reference into this Agreement.
11. QUALITY OF PRODUCT
11.1 Manufacturing and Product Changes
11.1.1 PRODUCT CHANGES: Except for the Required Changes defined in
Section 11.1.2 below, Schering shall not make or allow to be
made any changes to the Product, Specifications, Manufacturing
or Packaging that would require variations to the Marketing
Authorization or notification in any country of the Territory,
without the prior written consent of Pharmion, such consent
not to be unreasonably withheld or delayed. Schering will use
Commercially Reasonable Efforts to ensure that the timing of
Schering's notice to Pharmion of any such change shall permit
adequate time for Pharmion to make any necessary regulatory
filings and obtain any necessary approval of the corresponding
variation to the Marketing
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Authorization thereof from Agencies prior to the change being
implemented.
11.1.2 REQUIRED CHANGES: The following changes shall constitute
Required Changes: (i) changes to the Specifications or
Manufacturing or Packaging processes that are required by laws
(including, without limitation, GMP), or by medical or
scientific concerns as to the toxicity, safety and/or efficacy
of the Product (collectively "Required Changes"); (ii) changes
to the Specifications or Manufacturing or Packaging processes
which arise out of the change of Manufacturer from Aventis to
a third party; and (iii) changes which Schering reasonably
considers necessary or desirable and which do not change the
character or identity of the Product in such a way as to have
an adverse effect on Pharmion's interest in the Product in the
Territory. The Parties shall cooperate in making such Required
Changes promptly. All costs of making such Required Change
shall be borne by Schering. If, despite the exercise of
Commercially Reasonable Efforts, Schering is unable to make or
have such Required Change made without material adverse
effects on the Product in the Schering Territory, Schering
shall not be required to make such change.
11.1.3 The provisions of Sections 11.1.3 and 11.1.4 of the Final
Agreement are hereby incorporated by reference into this
Agreement.
11.2 The provisions of Sections 11.2, 11.3 and 11.4 of the Final Agreement
are hereby incorporated by reference into this Agreement.
12. DELIVERY
12.1 Subject to Section 9.2.2 of this Agreement, the provisions of Sections
12.1, 12.2, 12.3, 12.4, 12.5 and 12.6 of the Final Agreement are hereby
incorporated by reference into this Agreement.
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13. SUPPLY PRICE
13.1 Schering shall supply Product to Pharmion at the Manufacturer's Supply
Price plus a five percent (5%) xxxx-up.
13.2 The provisions of Sections 13.2, 13.3, 13.4 and 13.5 of the Final
Agreement are hereby incorporated by reference into this Agreement.
14. INVENTORY
14.1 Halt of Shipments. As of the Inception Date, Schering will instruct
Aventis Deutschland to halt temporarily all shipments of Product in the
Territory under the Aventis Services Agreement for a period of five (5)
Business Days pending the inventory taking described below.
14.2 Purchase of Inventory. Pharmion shall purchase all Inventory on hand
that is not damaged or Short-Dated as of the Inception Date for the
average price per kilogram (as set out in Schedule 1) paid by Schering
to Aventis under the terms of the Aventis Supply Agreement for
Inventory purchased between 2 October 2001 and the Inception Date (the
"Inventory Value"). At the Inception Date, Schering shall deliver an
estimate of the Inventory Value (the "Estimated Inventory Value") to
Pharmion and Pharmion shall pay an amount equal to the Estimated
Inventory Value to Schering within five (5) business days of the
Inception Date. The Inventory Value shall be finally determined, and a
reimbursement of any difference between the final Inventory Value and
the Estimated Inventory Value shall be made to Schering or Pharmion, as
the case may be, as follows:
14.2.1 As soon as practicable after the Inception Date, Schering shall conduct
a final Inventory count at those principal locations of Aventis at
which the Inventory is located (as specified in Schedule 1 to this
Agreement) to determine the quantities of Inventory outstanding at such
locations as of the Inception Date that is not damaged or Short-Dated.
Pharmion and one or more of its agents or
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representatives shall have the right to observe the final Inventory
count and determination. Based upon such count, and with respect to
other Aventis locations in which Inventory is located, based upon
records maintained by Aventis, Schering shall prepare and deliver a
Statement of Inventory Value (the "Statement of Inventory Value") to
Pharmion. Subject to Section 14.2.2, the Statement of Inventory Value
delivered by Schering to Pharmion shall be final, binding and
conclusive on the parties hereto.
14.2.2 Pharmion may dispute any amounts reflected on the Statement of
Inventory Value, but only on the basis that the amounts reflected on
the Statement of Inventory Value were not calculated in accordance with
Schedule 4, or that the Inventory was not correctly counted or is
otherwise damaged or Short-Dated; provided, however, that Pharmion
shall have notified Schering in writing of each disputed item,
specifying the amount thereof in dispute and setting forth, in
reasonable detail, the basis for such dispute, within fifteen (15)
Business Days of Schering's delivery of the Statement of Inventory
Value to Pharmion. In the event of such a dispute, Schering and
Pharmion shall attempt to reconcile their differences, and any
resolution by them as to any disputed amounts shall be final, binding
and conclusive on the parties hereto. If Schering and Pharmion are
unable to resolve any such dispute within thirty (30) Business Days
after Pharmion's delivery of its notice of dispute to Schering,
Schering and Pharmion shall submit the items remaining in dispute for
resolution to a mutually acceptable independent accounting firm of
international reputation (the "Independent Accounting Firm"), which
shall, within twenty (20) Business Days after such submission,
determine and report to Schering and Pharmion upon such remaining
disputed items, and such report shall be final, binding and conclusive
on Seller and Purchaser. The fees and disbursements of the Independent
Accounting Firm shall be allocated to Pharmion in the same proportion
as the aggregate amount of such remaining disputed items so submitted
to the Independent Accounting Firm that is unsuccessfully disputed by
Pharmion (as finally determined by the Independent Accounting Firm)
bears to the total amount of such remaining disputed items so
submitted, and the balance shall be paid by Schering. In acting under
this Agreement, the Independent Accounting Firm shall be entitled to
the privileges and immunities of arbitrators.
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14.2.3 The Statement of Inventory Value shall be deemed final for the purposes
of this Section 14 upon the earlier of (i) the failure of Pharmion to
notify Schering of a dispute within fifteen (15) Business Days after
Schering's delivery of the Statement of Inventory Value to Pharmion or
(ii) the resolution of all disputes pursuant to Section 14.2.2. Within
five (5) Business Days of the Statement of Inventory Value being deemed
final, a payment shall be made as follows:
(a) In the event that the amount of the final Inventory Value
reflected on the Statement of Inventory Value is less than the
Estimated Inventory Value, then Schering shall pay an amount
equal to such difference to an account designated by Pharmion,
by wire transfer in immediately available funds;
or
(b) In the event that the amount of the final Inventory Value
reflected on the Statement of Inventory Value exceeds the
Estimated Inventory Value, then Pharmion shall pay an amount
equal to such excess to an account designated by Schering, by
wire transfer in immediately available funds.
14.3 Delivery of Inventory. Deliveries of Inventory shall be made Ex Works
("EXW") (as such term is defined in the INCOTERMS 2000), at the sites
of the Aventis Affiliates where the respective part of Inventory is in
stock. These Aventis Affiliates are listed in Schedule 1.
14.4 Obsolete Inventory. Any Inventory that has been purchased by Pharmion
in accordance with this Article 14 that remains unsold on or after
August 15, 2002 will no longer be distributed. Pharmion will deliver
such remaining Inventory to Schering Delivery Duty Unpaid ("DDU") (as
such term is defined in the INCOTERMS 2000) and Schering will destroy
such Inventory. Schering will repay to Pharmion an amount equal to the
value of the Obsolete Inventory calculated by using the average price
(as set out in Schedule 4).
15. ADVERSE REACTIONS; COMPLAINTS
15.1 The provisions of Sections 14.1, 14.2, 14.3 and 14.4 of the Final
Agreement are hereby incorporated by reference into this Agreement.
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16. UNDERTAKINGS OF PHARMION; IMPROVEMENTS
16.1 The provisions of Section 15.1 (except clause 15.1.13), 15.2 and 15.3
of the Final Agreement are hereby incorporated by reference into this
Agreement.
17. UNDERTAKINGS AND WARRANTIES OF SCHERING
17.1 The provisions of Section 16.1 and 16.2 of the Final Agreement are
hereby incorporated by reference into this Agreement.
18. RIGHT OF FIRST REFUSAL
The provisions of Section 17 of the Final Agreement are hereby
incorporated by reference into this Agreement.
19. CONFIDENTIALITY
The provisions of Section 18 of the Final Agreement are hereby
incorporated by reference into this Agreement.
20. INDEMNITIES AND INSURANCE
The provisions of Section 19 of the Final Agreement are hereby
incorporated by reference into this Agreement.
21. DURATION AND TERMINATION
21.1 This Agreement will come into force on the Inception Date and, subject
to the parties' rights of termination in Sections 21.2 and 21.3
hereunder, will continue in force for a period of twelve (12) months
commencing on the first day of month following the month in which the
Inception Date occurred (the "Initial Term").
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The Initial Term will be automatically renewed for an additional period
of twelve (12) months and thereafter for an additional twelve (12)
months period term (each a "Renewal Term"), unless Pharmion has
terminated this Agreement pursuant to Section 21.2.
If the Manufacturing Milestone Date occurs during either the Initial
Term or a Renewal Term, this Agreement will terminate simultaneously
with the Effective Date of the Final Agreement.
21.2 Pharmion may terminate this Agreement with effect as of the end of the
Initial Term or the respective Renewal Term by giving written notice
at any time prior to the last two months of the then pending term of
this Agreement if a Supply Interruption Event has occurred.
21.3 The provisions of Section 20.2 and 20.3 of the Final Agreement are
hereby incorporated by reference into this Agreement.
22. CONSEQUENCES OF TERMINATION
22.1 The provisions of Section 21.1, 21.2 and 21.4 of the Final Agreement
are hereby incorporated by reference into this Agreement.
23. RIGHTS AND REMEDIES
23.1 The provisions of Section 22.1 and 22.2 of the Final Agreement are
hereby incorporated by reference into this Agreement.
24. FORCE MAJEURE
Neither Party shall be in breach of this Agreement if there is any
total or partial failure of performance by it of its duties and
obligations under this Agreement by reason of force majeure. If either
Party is unable to perform its duties and obligations under this
Agreement as a direct result of force majeure, such Party shall give
written notice to the other of such inability stating the reason in
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question. The operation of this Agreement shall be suspended during the
period in which the force majeure continues. Forthwith upon the reason
ceasing to exist, the Party relying upon it shall give notice to the
other of this fact. If the force majeure continues for a period of more
than ninety (90) days, the Party not relying on force majeure shall be
entitled to terminate this Agreement forthwith by written notice to the
other.
25. NOTICE
25.1 The provisions of Section 24.1 and 24.2 of the Final Agreement are
hereby incorporated by reference into this Agreement.
26. ENTIRE AGREEMENT/VARIATIONS
26.1 This Agreement and the Final Agreement constitute the entire agreement
and understanding between the parties and supersedes all prior oral or
written understandings, arrangements, representations or agreements
between them relating to the subject matter of this Agreement. No
director, employee or agent of either of the parties is authorised to
make any representation or warranty to the other not contained in this
Agreement, and each of the parties acknowledges that it has not relied
on any such oral or written representations or warranties.
26.2 No variations, amendments, modifications or supplements to this
Agreement shall be valid unless made in writing in English and signed
by a duly authorised representative of each of the parties.
27. ADDITIONAL TERMS
The following additional Sections of the Final Agreement are hereby
incorporated by reference into this Agreement:
(a) Section 26 -- Severance of Terms
(b) Section 27 -- Publication/Presentation/Press Release
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(c) Section 28 -- Partnership/Agency
(d) Section 29 -- Assignment
(e) Section 30 -- Audit Rights
(f) Section 31 -- Novartis Agreement
(g) Section 32 -- Governing Law and Jurisdiction
28. GUARANTEE
Pharmion Corporation hereby unconditionally guarantees the prompt
payment and full performance by Pharmion of its obligations under this
Agreement, subject to Pharmion Corporation having all of the rights,
remedies and defenses of Pharmion under this Agreement.
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AS WITNESS, the hands of the parties or their duly authorised representatives
the day and year first above written.
SCHERING AKTIENGESELLSCHAFT
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx Xxxxxxx
Name: Prof. Xx. Xxxxx Xxxxx Name: Xx. Xxxxxx Kostlin
Title: Vice Chairman of the Executive Board Title: Member of the Executive Board
PHARMION GMBH PHARMION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Director Title: President & CEO
