Exhibit 2.03
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (this "Transition Agreement"), dated as of
the 28th day of October, 2003 (the "Effective Date"), is made by and between
Merck & Co., Inc., a New Jersey corporation ("Merck"), and Guilford
Pharmaceuticals Inc., a Delaware corporation ("Guilford").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Asset Transfer and License
Agreement between Merck and Guilford, dated as of October 28, 2003 (the "Asset
Agreement"), Merck has sold, transferred, assigned and licensed to Guilford
certain assets in the Territory (as defined in the Asset Agreement), including
the U.S. NDA for Aggrastat (R).
WHEREAS, in connection with the Asset Agreement, Guilford and an Affiliate of
Merck, Merck Sharp & Dohme (Ireland) Limited, a corporation organized and
existing under the laws of Bermuda which is engaged in business in the Republic
of Ireland ("MSD Ireland"), have entered into that certain Supply Agreement
dated as of the date hereof (the "Supply Agreement") pursuant to which MSD
Ireland will supply (or arrange for the supply) to Guilford of Supplied Product
(as defined in the Supply Agreement) on the terms and conditions set forth
therein.
WHEREAS, in connection with the Asset Agreement and the Supply Agreement,
Guilford desires, and Merck is willing, to provide certain warehousing,
distribution and other transition services during the Transition Period (as
defined in Section 2.1 hereof) with respect to MSD Ireland Image Product (as
hereinafter defined) on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the agreements and covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS
All capitalized terms in this Transition Agreement (whether used in the singular
or the plural), unless otherwise defined herein or referenced to the Supply
Agreement, shall have the meanings as set forth in the Asset Agreement. In
addition, the following terms as used in this Transition Agreement, whether used
in the singular or the plural, shall have the meanings as set forth in this
Article 1. References to "Articles", "Sections" and "subsections" in this
Transition Agreement shall be to Articles, Sections and subsections
respectively, of this Transition Agreement unless otherwise specifically
provided.
1.1 "Administrative Services" shall mean the following Transition Services:
bookkeeping, invoicing, collections and contract administration.
1.2 "Asset Agreement" shall have the meaning given such term in the recitals
to this Transition Agreement.
1.3 "cGMP" shall have the meaning given such term in the Supply Agreement.
1.4 "Effective Date" shall have the meaning given such term in the
introductory paragraph to this Transition Agreement.
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1.5 "Gross Sales" shall mean the gross amount invoiced or recorded by Merck
as a sale on behalf of Guilford to third parties of MSD Ireland Image
Product shipped during the Transition Period which amount shall equal
the sales price for such Product as determined from time to time by
Guilford in accordance with Section 2.8 and which (i) shall not be
reduced by promotional, trade or other discounts, credits for returned
goods or price adjustments, rebates, chargebacks, GPO administration
fees or allowances, and (ii) shall not include freight, sales and excise
taxes, value-added and other taxes, insurance premiums and duties which
are billed to customers as separate items on invoices, or allowances for
short shipments.
1.6 "Merck" shall have the meaning given such term in the recitals to this
Transition Agreement.
1.7 "MSD Ireland Image Product" shall have the meaning given such term in
the Supply Agreement.
1.8 "Securities Laws" shall have the meaning given such term in the Supply
Agreement.
1.9 "Supply Agreement" shall have the meaning given such term in the
recitals to this Transition Agreement.
1.10 "Term" shall have the meaning given such term in Section 5 hereof.
1.11 "Transition Agreement" shall have the meaning given such term in the
introductory paragraph to this agreement.
1.12 "Transition Period" shall mean the period from the Effective Date until
the earlier of (a) June 30, 2004 or (b) depletion of the MSD Ireland
Image Product inventory ordered by Guilford pursuant to the Supply
Agreement, unless earlier terminated in accordance with Article 5.
1.13 "Transition Services" shall have the meaning given such term in Section
2.1 hereof.
1.14 "United States" shall mean the fifty (50) states of the United States
and the District of Columbia.
2 TRANSITION SERVICES
2.1. Transition Services. Subject to the terms and conditions of this
Transition Agreement, during the Transition Period, Guilford hereby
retains Merck to provide, and Merck hereby agrees to provide (or cause a
qualified Affiliate to provide) Guilford, certain warehousing,
distribution and contract administration services at Merck's usual
distribution facilities, in connection with Merck's distribution of MSD
Ireland Image Product on behalf of Guilford in the United States
including, without limitation, providing warehousing space at such
facilities, providing appropriate personnel to accept and warehouse
inventory of MSD Ireland Image Product shipped to such facilities,
arranging for the shipping and delivery of MSD Ireland Image Product to
customers, providing certain administrative and support services in
connection with Guilford's sale of MSD Ireland Image Product in the
United States and performing book keeping, collections and accounting
functions related to such services, all as more specifically set forth
in Schedule 2.1 attached hereto and
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made a part hereof (collectively, the "Transition Services"). The
quantity of MSD Ireland Image Product that is the subject of the
Transition Services is more particularly described in the Asset
Agreement and the Supply Agreement.
2.2. Compliance with Applicable Laws. Each party shall, and shall cause its
respective employees to, comply, in all material respects, with all
Applicable Laws which may be applicable to the Transition Services.
2.3. Quality Control. Merck shall provide the Transition Services to the
extent applicable in accordance with cGMP.
2.4. Title and Risk of Loss. Title to all MSD Ireland Image Product purchased
by Guilford pursuant to the Supply Agreement shall pass to Guilford in
accordance with the Supply Agreement. The MSD Ireland Image Product
purchased by Guilford under the Supply Agreement will be insured by
Guilford at Guilford's expense while in Merck's possession and control
pursuant to this Transition Agreement. Merck shall have no risk or
liability for loss or casualty to MSD Ireland Image Product during such
period except with respect to first party claims where Guilford has
shown that any loss or damage to such goods has resulted from the gross
negligence or willful misconduct by Merck in conducting the Transition
Services, and only after Guilford's insurance carrier, after Guilford
has in good faith asserted and prosecuted a claim for such loss or
casualty, has denied coverage of such loss or casualty on that basis.
2.5. Exclusivity. During the Term, Guilford shall not distribute or warehouse
MSD Ireland Image Product except through Merck hereunder; provided, that
in the event that at the conclusion of the Transition Period (upon
expiration or termination in accordance with Article 5) there is
existing in Guilford's inventory MSD Ireland Image Product, or in the
event Guilford has ordered MSD Ireland Image Product pursuant to the
Supply Agreement pursuant to an outstanding Firm Order, Guilford shall
have the right to sell and distribute such MSD Ireland Image Product. As
soon as practicable after the conclusion of the Transition Period, Merck
shall deliver any such MSD Ireland Image Product to Guilford at
Guilford's expense.
2.6. Customers. In order to inform customers of the change in ownership of
the Acquired Assets and of the arrangements between Merck and Guilford
with respect to the Contracts and the sales, distribution and customer
support services for the MSD Ireland Image Product during and after the
Transition Period, (i) Merck shall deliver a notice to parties to the
Contracts in accordance with Section 3.9 of the Asset Agreement and (ii)
Guilford shall deliver a notice to the parties to such Contracts in a
form approved by Merck prior to the Effective Date. Thereafter, the
parties shall cooperate in good faith to respond to inquiries by
contracted customers, trade customers, wholesalers and other third
parties with respect to the transfer of the sales, distribution and
customer support services for the Product to Guilford during the
Transition Period
2.7. Terms and conditions. All MSD Ireland Image Product distributed by Merck
hereunder shall be sold under and pursuant to Merck's standard terms and
conditions as the same may be in effect from time to time, which terms
and conditions shall be deemed to have been adopted by Guilford with
respect to MSD Ireland Image Product as of the Effective Date (a copy of
the current terms and conditions has been provided to Guilford). To the
extent that such terms and conditions (including without limitation
their provisions regarding discounts for prompt payment and return of
products for credit) differ from
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Guilford's standard terms and conditions relating to other products at
the time of sale of any MSD Ireland Image Product, it shall be
Guilford's responsibility to inform customers of such difference at the
time Guilford accepts orders for such MSD Ireland Image Product and to
inform customers of the terms and conditions that will govern the
transaction and to inform Merck if any variation in terms or processes
is required. Guilford will indemnify and hold Merck harmless for any
failure to properly inform customers of the terms and conditions that
will apply to any sale during the Transition Period. Guilford's standard
terms and conditions will apply to any MSD Ireland Image Product for
which orders are accepted after the Transition Period.
2.8. Pricing of MSD Ireland Image Product. From and after the Effective Date,
pricing of MSD Ireland Image Product shall be solely within the control
of Guilford. During the Transition Period, Guilford may desire to change
the price for MSD Ireland Image Product. In that event, Guilford will
provide two (2) business days prior written notice to Merck of any
change in price in written form detailing the new price and the
presentation of MSD Ireland Image Product to which such price change
shall apply. Merck will make such new price effective within two (2)
business days of receipt of such notice. Guilford shall also have the
ability to limit purchases in accordance with Merck's standard terms and
conditions. Where applicable and until the effective time of a notice
provided in accordance with this Section 2.8, any contract prices to
specific customers (including without limitation applicable discounts,
chargebacks, GPO administration fees and rebates) in effect immediately
prior to the Effective Date shall continue in effect.
2.9. Trademarks. Guilford shall not acquire any right, title or interest in
any trademark, service xxxx, name, logo, design or trade dress belonging
to Merck (or to any other person or entity under contract or license
with Merck) by virtue of this Transition Agreement or any action or
omission of Merck, Guilford or any other person acting pursuant to this
Transition Agreement. The parties acknowledge and agree that the
ownership, license and rights, title and interest in and to any and all
intellectual property associated with the MSD Ireland Image Product
shall be governed exclusively by the terms and conditions of the Asset
Agreement.
2.10. Audit and Inspection Rights. Merck shall keep complete, accurate and
detailed records concerning Gross Sales, computation of Reconciled Net
Sales, chargebacks, GPO administration fees, discounts and rebates,
product returns, accounts payable and receivable, expenses incurred by
Merck in connection with this Transition Agreement and all matters with
respect to Transition Services. Such records shall be kept in sufficient
detail to permit independent audit of such records. Merck shall, at
Guilford's request and expense, make such records available upon
reasonable notice during normal business hours for examination by
Guilford or its independent certified public accountants or auditors
designated by Guilford and approved by Merck, which approval shall not
be unreasonably withheld or delayed. To the extent required in
connection with the preparation or review of quarterly financial
statements, Merck shall permit Guilford's independent auditors to access
Merck's (or its Affiliate's) warehouses or other distribution facilities
no more than twice during the Transition Period to verify inventory
levels during normal business hours and upon reasonable advance notice.
2.11. Insurance. During the Term, Guilford shall maintain insurance in
accordance with Section 13.4 of the Asset Agreement.
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2.12. Territories Outside the United States. Unless otherwise agreed by the
parties after the Effective Date, Merck shall have no obligation under
this Transition Agreement to provide Transition Services in any area of
the Territory other than the United States. Notwithstanding the
foregoing, to the extent that Merck shall, after the Effective Date,
sell MSD Ireland Image Product in any part of the Territory other than
the United States, Merck shall, to the extent practicable, periodically
notify Guilford of such sales in a manner consistent with the reporting
obligations contemplated in Schedule 2.1 and shall pay to Guilford the
Reconciled Net Sales (as defined in Schedule 2.1) associated therewith
and shall invoice Guilford for any chargebacks, GPO administration fees,
discounts and/or rebates accrued in connection such sales, each in
accordance with the procedures set forth in Schedule 2.1 as if such
sales had been made in the United States. The parties hereby acknowledge
and agree that any sale of MSD Ireland Image Product during the
Transition Period in any part of the Territory other than the United
States made by Merck in accordance with this Section 2.12 shall not
constitute a breach of Merck's post-Effective Date covenants set forth
in Section 6.1 of the Asset Agreement. In the event that at the
conclusion of the Transition Period there remains in the inventory of
Merck and its Affiliates MSD Ireland Image Product in any area of the
Territory outside of the United States, Merck shall provide Guilford
written notice of the amount and location of such inventory, and
Guilford shall issue a Firm Order pursuant to the Supply Agreement for
purchase of any such remaining MSD Ireland Image Product inventory
deliverable within thirty (30) days of the conclusion of the Transition
Period; provided that Guilford shall only have an obligation pursuant to
this Section 2.12 to purchase that amount of MSD Ireland Image Product
representing the difference, if any, between (a) the amount of MSD
Ireland Image Product inventory held by Merck and its Affiliates in
those areas of the Territory outside of the United States on the
Effective Date, and (b) any amounts of such inventory sold by Merck
during the Transition Period pursuant to this Section 2.12.
3. FEES AND PAYMENT
3.1. Fees for Transition Services. There shall be no fees payable for
Transition Services performed until May 1, 2004. On and after that date
and until the end of the Transition Period, in consideration for the
Transition Services provided hereunder, Guilford shall pay Merck 0.3%
percent of Gross Sales subject to Transition Services.
3.2. Expenses. Guilford shall reimburse Merck for any out-of-pocket expenses
reasonably incurred and paid to a third party in performing its
obligations under this Transition Agreement.
3.3. Invoicing and Payment of Fees. Within forty-five (45) days after the end
of each calendar month during the Term, Merck shall invoice Guilford for
any fees due, to the extent applicable under Section 3.1, for Transition
Services performed during such calendar month. All payments for
Transition Services shall be made in U.S. Dollars within thirty (30)
days after the date of invoice. Payment shall be made by corporate check
drawn on a United States bank or remitted by wire transfer in
immediately available funds in U.S. Dollars to a bank and account to be
designated in writing from time to time by Merck. Any payment of fees or
expenses not made when due shall bear interest at the lesser of (i) 1.0%
per month or (ii) the maximum rate permitted under Applicable Laws. Any
unpaid fees and expenses for Transition Services may also, at Merck's
discretion and cumulatively with any other remedies available to Merck
under
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this Transition Agreement, any other agreement or Applicable Laws, be
set off without notice to Guilford against any amounts owed by Merck to
Guilford.
3.4. Guilford Responsible for Taxes. Any and all taxes (excluding income
taxes based upon Merck's income or Merck's franchise fees or taxes)
relating to the Transition Services provided under this Transition
Agreement, including, without limitation, sales, use and excise taxes
required to be paid by any federal, state or local authority shall be
borne by Guilford. Official receipts indicating proof of payment of any
such taxes shall be secured and made available to Merck upon request as
evidence of payment.
4. INDEMNITY
4.1. Guilford shall protect, defend, indemnify and hold harmless Merck, its
Affiliates and its and their directors, officers, shareholders,
employees and agents, and their respective successors and permitted
assigns from any and all claims, actions, causes of action, liabilities,
losses, costs, damages or expenses, including reasonable attorneys' fees
associated therewith ("Losses"), which directly or indirectly arise out
of or relate to the Transition Services provided hereunder, unless such
Losses result from (i) Merck's breach of this Transition Agreement, or
(ii) the gross negligence or willful misconduct of Merck in the
performance of its obligations under this Transition Agreement.
4.2. Merck shall protect, defend, indemnify and hold harmless Guilford, its
Affiliates and its and their directors, officers, shareholders,
employees and agents, and their respective successors and permitted
assigns, from any and all Losses which directly or indirectly arise out
of or relate to (i) Merck's breach of this Transition Agreement or (ii)
the gross negligence or willful misconduct of Merck in the performance
of its obligations under this Transition Agreement; provided, however,
that the total and aggregate liability of Merck and its Affiliates for
any claims paid by Merck and its Affiliates under this Transition
Agreement and the Supply Agreement shall not exceed US $20,000,000.00.
4.3. The indemnified party agrees to give the indemnifying party (i) prompt
written notice of any claims made for which the indemnified party knows
or reasonably should know the indemnifying party reasonably may be
liable under the foregoing indemnification and (ii) the opportunity to
defend, negotiate, and settle such claims; provided, that in the event
any such indemnifying party shall assume the defense of any such claim,
such indemnifying party may reserve its rights as to its ultimate
liability with respect to the claim but in such event, and until the
indemnifying party shall assume liability for such claim as an
indemnified claim under this Article 4, the indemnified party shall have
the right to participate in such defense and to consent to any proposed
settlement. The indemnified party shall provide the indemnifying party
with all information in its possession, all authority and all assistance
necessary to enable the indemnifying party to carry on the defense of
such suit; provided, however, that the indemnified party reserves the
right to retain its own counsel to defend itself in such suit.
4.4. Neither party shall be responsible to or bound by any settlement made by
the other party without its prior written consent, which consent shall
not be unreasonably withheld.
4.5. IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES OR THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS BE LIABLE TO THE OTHER PARTY OR
ITS AFFILIATES, OR THEIR RESPECTIVE DIRECTORS, OFFICERS,
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EMPLOYEES OR AGENTS, FOR ANY SPECIAL, INDIRECT, PUNITIVE, EXEMPLARY,
CONSEQUENTIAL OR INCIDENTAL DAMAGES OR LOSSES OF ANY KIND, NATURE OR
DESCRIPTION WHATSOEVER (INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOST
REVENUES AND/OR LOST SAVINGS) SUFFERED OR INCURRED BY SUCH PARTY FOR ANY
CAUSE WHATSOEVER, REGARDLESS OF WHETHER ARISING FROM BREACH OF CONTRACT,
WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY IS
ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE OR IF SUCH LOSS OR
DAMAGE COULD HAVE BEEN REASONABLY FORESEEN.
4.6. The sole and exclusive remedy for any claim arising under this
Transition Agreement shall be a claim for indemnification under this
Article 4.
5. TERM AND TERMINATION
5.1. This Transition Agreement shall be effective as of the Effective Date
and shall continue in effect until the earlier of (a) the last day of
the Transition Period, or (b) the termination of the Supply Agreement in
accordance with its terms, unless earlier terminated as provided in this
Article 5. Such effective period shall be referred to herein as the
"Term".
5.2. Guilford may terminate this Transition Agreement in its entirety by
providing written notice thereof to Merck (i) any time on or after May
1, 2004, in which case such termination shall be effective thirty (30)
days after the date of such notice, and (ii) any time prior to May 1,
2004, which termination shall not be effective until the inventory of
MSD Ireland Image Product ordered by Guilford pursuant to the Supply
Agreement and held by Merck for distribution pursuant to this Transition
Agreement shall be no greater than thirty (30) days worth of inventory,
determined on an average basis with reference to the relative inventory
of each presentation of MSD Ireland Image Product held by Merck. If
Guilford wishes to terminate this Transition Agreement with respect to
less than all of the Transition Services, Guilford shall first obtain
the written consent of Merck; provided, however, that to the extent
practicable, Guilford may terminate this Transition Agreement solely
with respect to all Administrative Services provided hereunder upon
thirty (30) days written notice to Merck.
5.3. This Transition Agreement may be terminated by written notice given by
either party as follows:
(a) If the other party shall be in breach of any material obligation
hereunder, and has not cured such breach within thirty (30) days after
receipt of a notice from the non-breaching party requesting the
correction of such breach. Such termination shall be effective upon
failure of the breaching party to cure such breach within the specified
time period; or
(b) Upon the filing or institution of any bankruptcy, reorganization,
liquidation or receivership proceedings by the other party, or upon the
failure by the other party for more than sixty (60) days to discharge
any such actions against it. Such termination shall be effective upon
receipt of the notice.
5.4. Upon termination of this Transition Agreement by Merck pursuant to
Section 5.3(a), Guilford shall pay to Merck any fees and expenses due
for Transition Services provided prior to the effective date of such
termination. Upon any termination or expiration of this
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Transition Agreement, Merck shall deliver to Guilford all MSD Ireland
Image Product in Merck's possession in the United States on the
effective date of such termination that was ordered by Guilford pursuant
to the Supply Agreement (provided that such MSD Ireland Image Product
shall be paid for as provided in the Supply Agreement), and Guilford
shall have the right to sell and distribute such MSD Ireland Image
Product in the Territory at its discretion notwithstanding any provision
of this Transition Agreement or the Supply Agreement to the contrary.
Nothing in this Section 5.4 shall be construed to require the delivery
to Guilford of MSD Ireland Image Product at a time earlier than when
such delivery is required under the Supply Agreement. The provisions of
this Section 5.4 shall survive the expiration, cancellation or other
termination of this Transition Agreement.
5.5. The termination of this Transition Agreement shall not affect the rights
and obligations of the parties arising prior to such termination.
Termination under this Article 5 shall relieve and release all parties
from any liabilities and obligations under this Transition Agreement
other than those specifically set forth in this Article 5, those that
survive termination in accordance with Section 6.14 and any and all
obligations to indemnify the other party in accordance with Article 4.
Notwithstanding any provision of the Asset Agreement or the Supply
Agreement to the contrary, termination of this Transition Agreement
shall not affect the rights and obligations of the parties under the
Supply Agreement or the Asset Agreement.
6. MISCELLANEOUS
6.1. Force Majeure. The parties shall not be liable for the failure or delay
in performing any obligation under this Transition Agreement (except for
the payment of money) if and to the extent such failure or delay is due
to (a) acts of God; (b) weather, fire or explosion; (c) war, terrorism,
invasion, riot or other civil unrest; (d) governmental laws, orders,
restrictions, actions, embargoes or blockades; (e) national or regional
emergency; (f) injunctions, strikes, lockouts, labor trouble or other
industrial disturbances; (g) shortage of adequate fuel, power,
materials, or (h) any other event which is beyond the reasonable control
of the affected party (each such event, a "Force Majeure"); provided
that the party affected shall promptly notify the other of the Force
Majeure condition and shall exert all commercially reasonable efforts at
its cost to eliminate, cure or overcome any such causes and to resume
performance of its obligations as soon as possible.
6.2. Governing Law. This Transition Agreement shall be governed by,
interpreted and construed, and all claims and disputes, whether in tort,
contract, or otherwise be resolved in accordance with the substantive
laws of the State of New Jersey, without reference to any rules of
conflict of laws thereof.
6.3. Arbitration. In the event of any controversy or claim arising out of or
relating to this Transition Agreement, performance hereunder,
termination hereof, or any relationship created hereby, or related in
any way to the Transition Services, each party irrevocably submits to
the exclusive jurisdiction of the courts of the State of New Jersey and
the Federal courts of the United States District Court for the District
of New Jersey for the purposes of any suit, action or other proceeding
arising out of this Transition Agreement or transactions contemplated
hereby. Each party irrevocably and unconditionally waives any objection
to the laying of venue in the state and Federal courts of New Jersey as
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stated above and that any such action was brought in an inconvenient
forum. Notwithstanding the foregoing:
(a) In the event of a threatened disclosure in violation of this
Transition Agreement, either party shall have the right (notwithstanding
subsection 6.3(b) below) to seek injunctive relief from any competent
court in the jurisdiction where the disclosure is threatened to prevent
such disclosure pending resolution of the merits of the dispute; and
(b) Subject to subsection 6.3(a) above, any controversy, claim or
dispute between the parties hereto arising out of or relating to the
performance, construction, interpretation or enforcement of this
Transition Agreement shall be submitted to binding confidential
arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. Section 1
et seq. in accordance with the Rules of -- --- Commercial Arbitration of
the American Arbitration Association or its successor. Any arbitration
pursuant to this Transition Agreement shall be conducted in New Jersey
by three neutral arbitrators selected by the American Arbitration
Association. The judgment upon the award rendered in any such
arbitration shall be final and binding upon the parties and may be
entered in any court having jurisdiction thereof. All fees and expenses
of the arbitrators and all other expenses of the arbitration, except for
attorneys' fees, shall be shared equally by the parties. Each party
shall bear its own attorneys fees.
6.4. Consent and Waiver regarding Service of Process, Personal Jurisdiction
and Jury Trial.
(a) In any action, suit, arbitration or proceeding to enforce the rights
of either party under this Transition Agreement or otherwise arising out
of this Transition Agreement or from any acts, omissions or activities
of either party arising from or related in any way to this Transition
Agreement or the transactions contemplated hereby or related in any way
to the Transition Services, each party, by execution and delivery of
this Transition Agreement, expressly and irrevocably consents to the
service of any complaint, summons, notice or other process relating to
any such action, suit, arbitration or proceeding by delivery thereof to
it by hand or by any other manner provided for in Section 6.12 hereof.
Each party hereby expressly and irrevocably waives any claim or defense
in any such action, suit, arbitration or proceeding based on any alleged
lack of personal jurisdiction, improper venue, forum non conveniens or
any similar doctrine or theory.
(b) In any action, suit, arbitration or proceeding to enforce the rights
of either party under this Transition Agreement or otherwise arising out
of this Transition Agreement or from any acts, omissions or activities
of either party arising from or related in any way to this Transition
Agreement or the transactions contemplated hereby or related in any way
to the Transition Services, the parties hereto, by execution and
delivery of this Transition Agreement, expressly and irrevocably waive
their right to a jury trial and stipulate that any such action, suit or
proceeding shall be tried by the court (or arbitrator if the proceeding
is under Section 6.3(b) hereof).
6.5. Independent Contractor. The parties hereto are independent contractors.
Nothing in this Transition Agreement is intended or shall be deemed to
constitute a partnership, agency, franchise or joint venture
relationship between the parties. Neither party shall enter into any
agreements or make any commitments for the other.
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6.6. Confidentiality and Public Announcements. Section 10 of the Asset
Agreement is incorporated herein and shall be a part of this Transition
Agreement.
6.7. Assignment. This Transition Agreement and the rights and obligations of
the parties hereunder shall not be assignable or delegable, in whole or
in part, without the consent of the other party, which consent shall not
be unreasonably withheld or delayed; provided, that (i) both parties
shall have the right to assign this Transition Agreement or delegate its
duties in whole or in part to any Affiliate or any third party in
connection with a valid assignment of the Supply Agreement pursuant to
the terms thereof, and (ii) Guilford shall have the right to
collaterally assign this Transition Agreement to the extent required in
connection with its financing arrangements for the purpose of permitting
its financing sources to exercise their remedies upon any default by
Guilford. Any attempted assignment of this Transition Agreement in
violation of this Section 6.7 shall be void. Notwithstanding the
foregoing, the prohibition on assignment set forth in this Section 6.7
shall not apply to any assignment that constitutes a Change of Control
for purposes of Section 11.3 of the Supply Agreement.
6.8. Entire Agreement. This Transition Agreement, including without
limitation the Schedules hereto, together with the Asset Agreement and
the other agreements contemplated thereby, constitutes the entire
agreement between the parties hereto with respect to the subject matter
hereof and except as expressly otherwise provided herein, supersedes and
cancels all previous agreements, negotiations, commitments and writings
in respect to the subject matter thereof. Notwithstanding anything to
the contrary in the first paragraph of this Section 6.8, the Asset
Agreement, the Supply Agreement and this Transition Agreement shall each
stand as independent agreements between the parties, and after the
Effective Date each of this Transition Agreement, the Supply Agreement
and the Asset Agreement will remain in full force and effect and this
Transition Agreement shall not be deemed superseded or amended thereby.
Without limitation of the foregoing, the provisions of the Asset
Agreement, the Supply Agreement and this Transition Agreement with
respect to indemnification shall both remain independently effective
(except that the Maximum shall be cumulative with the Maximum under the
Supply Agreement and the Asset Agreement) and no such contracts shall be
deemed to supersede or limit the indemnification obligations imposed by
any other, except as may be specifically specified therein.
6.9. Successors and Assigns. The terms and conditions of this Transition
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
6.10. Headings. The headings of the Articles, Sections and subsections of this
Transition Agreement are inserted for convenience only and shall not be
deemed to constitute a part of this Transition Agreement or affect the
construction hereof.
6.11. Modification and Waiver. No amendment, modification or alteration of
the terms of this Transition Agreement shall be binding unless the same
shall be in writing and duly executed by the parties hereto, except
that any of the terms or provisions of this Transition Agreement may be
waived in writing at any time by the party which is entitled to the
benefits of such waived terms or provisions. No waiver of any of the
provisions of this Transition Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not
similar). No delay on the part of any party exercising any right, power
or privilege hereunder shall operate as a waiver thereof.
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6.12. Notices. Any notices or demands required by this Transition Agreement
shall be given in writing and shall be given by delivery in person, by
electronic facsimile transmission, cable, telegram, telex or other
standard forms of written telecommunications, by overnight courier or by
registered or certified mail, postage prepaid,
if to Merck, to:
Merck & Co., Inc.
000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxx Xxxxx, XX 00000-0000
Attn: Executive Director, USHH Business Development
Facsimile: 000-000-0000
with a copy to:
Xxxxx Xxxxxxx, Esq.
Legal Department UG4A-50
Merck & Co., Inc.
000 X. Xxxxxxxxxx Xxxx
Xxxxx Xxxxx, XX 00000-0000
Facsimile: 000-000-0000
with a copy to:
Merck & Co., Inc.
Xxx Xxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxxx Xxxxxxx, XX 00000-0000
Attention: Office of the Secretary
Facsimile: (000) 000-0000
if to Guilford, to:
Guilford Pharmaceuticals Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Guilford Pharmaceuticals Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
or at such other address for a party as shall be specified by like
notice. The date of giving any such notice shall be the date of hand
delivery, the date sent by electronic
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facsimile transmission, cable, telegram, telex or other standard forms
of written communications, the day after delivery to the overnight
courier service, and the date three days following the posting of the
registered or certified mail.
6.13. Counterparts. This Transition Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed an original
and all of which shall constitute one and the same agreement.
6.14. Survival of Certain Provisions. The terms, provisions, representations,
and warranties contained in this Transition Agreement that by their
sense and context are intended to survive the performance thereof
(including, without limitation, Article 4 and Sections 6.2, 6.3, 6.4,
6.6, 6.8, 6.9, 6.12, 6.14, 6.15, 6.17, 6.18 and 6.19, and the payment
and reconciliation provisions of Schedule 2.1) by either party or both
parties hereunder shall so survive the completion of performance,
expiration or termination of this Transition Agreement.
6.15. Severability. If any provision of this Transition Agreement is found
invalid or unenforceable by a court of competent jurisdiction, the
remainder of this Transition Agreement shall continue in full force and
effect. The parties shall negotiate in good faith to substitute a valid,
legal, and enforceable provision that reflects the intent of such
invalid or unenforceable provision.
6.16. Review by Legal Counsel. Each of the parties agrees that it has read and
had the opportunity to review this Transition Agreement with its legal
counsel. Accordingly, the rule of construction that any ambiguity
contained in this Transition Agreement shall be construed against the
drafting party shall not apply.
6.17. Third Party Beneficiaries. Nothing in this Transition Agreement, express
or implied, is intended to confer upon any third party, any rights,
remedies, obligations or liabilities.
6.18. Asset Agreement. The parties expressly acknowledge and agree that
certain provisions of the Asset Agreement are incorporated by reference
herein, or by their terms otherwise apply hereto and further agree that
such provisions shall be given full effect in interpreting and enforcing
this Transition Agreement. In the event of any inconsistency between
this Transition Agreement and the Asset Agreement, the Asset Agreement
shall control.
6.19. Cumulative Remedies. Except as otherwise provided herein, no remedy
referred to in this Transition Agreement is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy
referred to in this Transition Agreement or otherwise available under
law or at equity.
6.20. Further Assurances. Each party agrees to execute such further papers,
agreements, documents, instruments and the like as may be necessary or
desirable to effect the purpose of this Transition Agreement and to
carry out its provisions.
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IN WITNESS WHEREOF, the undersigned have executed this Transition Agreement as
of the Effective Date.
MERCK & CO., INC. GUILFORD PHARMACEUTICALS INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxx, M.D.
--------------------------- ---------------------------
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxx X. Xxxxx, M.D.
Title: Chairman, President and Title: Chairman, President and
Chief Executive Officer Chief Executive Officer
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SCHEDULE 2.1
TRANSITION SERVICES
Merck shall provide, or shall cause subcontractors used by Merck in the ordinary
course of conducting its business to provide, the following services in the
United States during the Transition Period:
Warehousing of the MSD Ireland Image Product at Merck.
Distribution services for the MSD Ireland Image Product in the United
States as customarily performed by Merck for the Product during the last
twelve (12) months preceding the Effective Date, including but not
limited to receiving, accepting (where required), processing and
shipping orders for the MSD Ireland Image Product.
Accounting for sales of MSD Ireland Image Product, including accounts
receivable management, billing, collection and record-keeping.
Responding promptly to all product supply inquiries (not including
Adverse Event reports, medical inquiries, or similar inquiries which are
governed by the Asset Agreement) regarding the MSD Ireland Image Product
(all out of pocket costs with respect to such inquiries to be borne by
Guilford).
Chargebacks and GPO administration fees services and processing, and
processing of Medicaid Rebates as provided in Article 9 of the Asset
Agreement.
Providing the following reports to Guilford:
Daily sales reports;
A monthly sales report in form reasonably satisfactory to
Guilford within five (5) business days following the end of each
month setting forth total Gross Sales of MSD Ireland Image
Product by SKU in units and dollars;
Within fifteen (15) days following the end of each calendar
quarter, (i) with respect to the first two months of such
calendar quarter, a report (including a breakdown by customers)
setting forth net sales of MSD Ireland Image Product by SKU,
itemizing all rebates, chargebacks, GPO administration fees,
discounts, or allowances credited or paid to customers in the
United States, and returned goods received from customers in the
United States, and (ii) with respect to the third month of such
calendar quarter, a report (including a breakdown by customers)
setting forth estimated net sales of MSD Ireland Image Product
by SKU, itemizing all rebates, chargebacks, GPO administration
fees, discounts, or allowances credited or paid to customers in
the United States, and returned goods received from customers in
the United States; provided that Merck shall as soon as
practicable and in any event within twenty-five (25) days of the
end of each calendar quarter provide Guilford with an actual
report of the items contemplated in subsection (ii) above; and
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Within fifteen (15) days after the end of each month, an
inventory status report by formulation and SKU, showing the
amount of MSD Ireland Image Product in inventory at the end of
such month in the warehouses and an accounts receivable aging
report.
Within five (5) business days after the end of each month, any
information reasonably necessary to allow Guilford to create and
support audited and unaudited quarterly financial statements
prepared in accordance with GAAP and to meet all disclosure
requirements of the Securities and Exchange Commission
(including estimated net sales of MSD Ireland Image Product by
SKU, itemizing all estimated rebates, chargebacks, GPO
administration fees, discounts, or allowances credited or paid
to customers in the United States, and returned goods received
from customers in the United States).
Making payments to Guilford as follows:
On or before the 15th day after the end of each month (or
portion thereof, if the Transition Period ends in the middle of
a calendar month) during the Transition Period, Merck shall pay
Guilford an amount equal to Reconciled Net Sales in the United
States and provide Guilford with a statement together with
copies of the related credit memos for such month. For purposes
of this Transition Agreement, "Reconciled Net Sales" shall mean:
Gross Sales for such month in the United States;
less:
Product returns received during such month (to
the extent that such product returns are
chargeable to Guilford in accordance with
Article 9 of the Asset Agreement);
Cash discounts given in accordance with the
standard terms and conditions of Merck in effect
during such month; and
Bad debt/uncollectible accounts receivable
write-offs made in accordance with the standard
collection policies of Merck (provided that
Guilford itself reserves the right to pursue
collection efforts in its discretion).
Invoicing Guilford as follows:
On or before the 45th day after the end of each calendar quarter
(or portion thereof, if the Transition Period ends in the middle
of a calendar quarter) during the Transition Period, Merck shall
invoice Guilford for all chargebacks, GPO administration fees,
discounts and rebates accrued during such calendar quarter (to
the extent that such chargebacks, GPO administration fees,
discounts and rebates are payable by Guilford in accordance with
Article 9 of the Asset Agreement) and Merck shall deduct the
amount due to Merck as reflected on each such invoice from the
next payment of Reconciled Net Sales to be made to Guilford in
accordance with the foregoing paragraph; provided that with
respect to the last invoice delivered pursuant to this
paragraph, Guilford shall pay the amount due pursuant to such
invoice within thirty (30) days of receipt thereof.
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For the avoidance of doubt, Merck shall not be liable for non-payment by
customers, provided that Merck shall have properly billed such customers.
Following the end of the Transition Period and prior to the last payment to
Guilford, Merck will classify as a bad debt any invoice that has not yet been
paid, Merck will provide Guilford with a list of accounts receivable outstanding
so that such invoices can be collected by Guilford. Within three months
following the end of the Transition Period, a final true up will be performed
and any amounts owed by Merck to Guilford, or by Guilford to Merck, will be
reconciled.
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