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EXHIBIT 10.2
COPROMOTION AGREEMENT
BETWEEN
NOVAVAX, INC.
AND
KING PHARMACEUTICALS, INC.
JANUARY 8, 2001
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TABLE OF CONTENTS
1. DEFINITIONS................................................................1
2. GRANT OF RIGHTS............................................................2
2.1 Grant of Rights to KING...............................................2
2.2 Grant of Rights to NOVAVAX............................................2
2.3 Trademark.............................................................2
3. RESPONSIBILITIES OF KING...................................................4
3.1 Promotion by KING.....................................................4
3.2 Manufacture, Shipment, Etc. of the KING Products......................6
3.3 KING Detail and Sales Reports.........................................6
3.4 KING Sales Force......................................................7
4. RESPONSIBILITIES OF NOVAVAX................................................8
4.1 Promotion of Copromote Products by NOVAVAX............................8
4.2 Manufacture, Shipment, Etc. of the NOVAVAX Products...................9
4.3 NOVAVAX Detail and Sales Reports.....................................10
4.4 NOVAVAX Sales Force..................................................11
5. TRAINING AND PROMOTIONAL MATERIAL.........................................12
5.1 Training.............................................................12
5.2 Promotional Materials................................................12
6. COPROMOTE PRODUCT SAMPLES.................................................13
6.1 Supply, Storage and Distribution of Samples..........................13
6.2 Use of Samples.......................................................13
7. CERTAIN REGULATORY MATTERS................................................14
7.1 Licenses.............................................................14
7.2 Regulatory Responsibility............................................14
7.3 Efficacy and Safety Information......................................15
7.4 Notice of Adverse Events.............................................16
7.5 Product Technical Complaints and Recalls.............................17
7.6 Returns..............................................................18
7.7 Notice of Government Inspections.....................................19
7.8 Government Inquiries.................................................19
7.9 Medical Inquiries....................................................19
8. MANAGEMENT COMMITTEE......................................................20
8.1 Establishment of the PMC.............................................20
8.2 Purpose and Responsibilities of the PMC..............................20
8.3 PMC Meetings.........................................................21
8.4 Vote and Approval....................................................21
8.5 Marketing Plan and Budget............................................22
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8.6 Additional Studies, Line Extensions and New Products.................22
8.7 Dispute Resolution...................................................23
9. FEES AND EXPENSES.........................................................24
9.1 Consideration Fee....................................................24
9.2 Milestone Payments...................................................25
9.3 Residual Payments....................................................25
9.4 Marketing Expenses...................................................26
9.5 Excess Detail Costs..................................................28
9.6 Other Miscellaneous Costs and Expenses...............................28
9.7 Costs Savings........................................................28
10. RECORDKEEPING AND AUDITS..................................................29
10.1 Maintenance of Books and Records.....................................29
10.2 Payment Audits.......................................................29
10.3 Compliance Audits....................................................30
11. TERM AND TERMINATION......................................................30
11.1 Term of Agreement....................................................30
11.2 Termination by NOVAVAX...............................................31
11.3 Termination by KING..................................................31
11.4 Failure to Meet Detail Requirements..................................33
11.5 Effects of Termination...............................................33
11.6 Actions Upon Termination.............................................34
11.7 Survival.............................................................34
11.8 Payments Upon Termination............................................34
12. CONFIDENTIALITY; OWNERSHIP................................................36
12.1 Confidential Information.............................................36
13. INDEMNIFICATION AND INSURANCE.............................................37
13.1 Indemnification by KING..............................................37
13.2 Indemnification by NOVAVAX...........................................38
13.3 Claims Procedures....................................................38
13.4 Insurance............................................................39
14. REPRESENTATIONS AND WARRANTIES............................................39
14.1 By KING..............................................................39
14.2 By NOVAVAX...........................................................40
15. NOTICES...................................................................41
16. MISCELLANEOUS PROVISIONS..................................................42
16.1 Assignment; Change of Control........................................42
16.2 Governing Law........................................................43
16.3 Non-Waiver...........................................................43
16.4 Entire Agreement.....................................................44
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16.5 Jurisdiction; Venue..................................................44
16.6 Severability.........................................................45
16.7 Relationship of the Parties..........................................46
16.8 Public Announcements.................................................46
16.9 Counterparts.........................................................46
16.10 Force Majeure........................................................46
16.11 Interpretation.......................................................46
16.12 Certain Expenses and Commissions.....................................47
16.13 Third Party Beneficiaries............................................47
16.14 Covenant Not to Promote Competing Product............................47
16.15 Headings.............................................................47
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COPROMOTION AGREEMENT
THIS COPROMOTION AGREEMENT (this "Agreement") is entered into and
effective as of this 8th day of January, 2001 (the "Effective Date"), by and
between KING PHARMACEUTICALS, INC., a Tennessee corporation ("KING"), and
NOVAVAX, INC., a Delaware corporation ("NOVAVAX").
WHEREAS, KING and NOVAVAX each have a field representative sales force
focused on physicians and health care practitioners who specialize in the
practice of obstetrics or gynecology or who frequently prescribe hormone
replacement therapy products ("OB/GYN");
WHEREAS, NOVAVAX owns or will own a patent or patents related to the
NOVAVAX Products and expects to file with the FDA a New Drug Application for
ESTRASORB(TM);
WHEREAS, KING markets and distributes an oral contraceptive product for
women containing the actives levonorgestrel and ethinyl estradiol under the
registered trademark NORDETTE(R) (each a "KING Product" or collectively, the
"KING Products");
WHEREAS, KING and NOVAVAX are engaged in the business of and have
expertise in, among other things, the promotion of pharmaceutical products to
the OB/GYN community; and
WHEREAS, KING and NOVAVAX desire to work together to promote the
NOVAVAX Products and the KING Products in the United States, its territories and
possessions, the District of Columbia and the Commonwealth of Puerto Rico (the
"Territory") upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS
Capitalized terms used herein without definition shall have the respective
meanings assigned thereto in Annex I attached hereto and incorporated herein for
all purposes of this Agreement (such definitions to be equally applicable to
both the singular and plural forms of the terms defined). Unless otherwise
specified, all references herein to "Articles" or "Sections" are to Articles or
Sections of this Agreement.
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2. GRANT OF RIGHTS
2.1 GRANT OF RIGHTS TO KING.
(a) NOVAVAX hereby grants to KING and its Affiliates, on an exclusive
basis together with NOVAVAX and its Affiliates, the right to promote the NOVAVAX
Products within the Territory during the Term of this Agreement, upon and
subject to the terms and conditions set forth in this Agreement.
(b) The grant of rights within the Territory set forth in Section
2.1(a) is subject to and limited only by the right of NOVAVAX and its Affiliates
to promote the NOVAVAX Products within the Territory during the Term of this
Agreement in accordance with the terms and conditions of this Agreement.
2.2 GRANT OF RIGHTS TO NOVAVAX.
(a) KING hereby grants to NOVAVAX and its Affiliates, on an exclusive
basis together with KING and its Affiliates, the right to promote the KING
Products in the Territory during the Term of this Agreement, upon and subject to
the terms and conditions set forth in this Agreement.
(b) The grant of rights set forth in Section 2.2(a) is subject to and
limited only by the right of KING and its Affiliates to promote the KING
Products within the Territory during the Term of this Agreement in accordance
with the terms and conditions of this Agreement.
2.3 TRADEMARK.
(a) Required Use and Compliance. Each party shall promote the NOVAVAX
Products only under the NOVAVAX Trademarks. KING shall not use any trademark or
servicemark other than the NOVAVAX Trademarks in promoting the NOVAVAX Products
without the prior approval of NOVAVAX. Each party shall promote the KING
Products only under the KING Trademarks. NOVAVAX shall not use any trademark or
servicemark other than the KING Trademarks in promoting the KING Products
without the prior approval of KING. The NOVAVAX Trademarks and KING Trademarks
are set forth on Exhibit 2.3(a).
(b) Validity of Trademarks. KING acknowledges the validity of NOVAVAX's
right, title and interest in and to the NOVAVAX Trademarks and KING shall not
have, assert or acquire any right, title or interest in or to any of the NOVAVAX
Trademarks, except as otherwise explicitly provided in this Agreement. NOVAVAX
acknowledges the validity of KING's right, title and
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interest in and to the KING Trademarks and NOVAVAX shall not have, assert or
acquire any right, title or interest in or to any of the KING Trademarks, except
as otherwise explicitly provided in this Agreement.
(c) Use of Trademarks.
(i) NOVAVAX Trademarks. In connection with the subject matter
hereof, KING shall use the NOVAVAX Trademarks only in a manner consistent with
NOVAVAX's trademark usage guidelines (the "NOVAVAX Guidelines") and shall not
use any NOVAVAX Trademark in connection with any goods or products other than
the NOVAVAX Products, notwithstanding that such goods or products are dissimilar
to the NOVAVAX Products or have a different use. The parties shall develop the
NOVAVAX Guidelines as soon as practicable after the Effective Date. KING shall
use the NOVAVAX Trademarks only to the extent authorized herein.
(ii) KING Trademarks. In connection with the subject matter hereof,
NOVAVAX shall use the KING Trademarks only in a manner consistent with KING's
trademark usage guidelines (the "KING Guidelines") and shall not use any KING
Trademark in connection with any goods or products other than the KING Products,
notwithstanding that such goods or products are dissimilar to the KING Products
or have a different use. The parties shall develop the KING Guidelines as soon
as practicable after the Effective Date. NOVAVAX shall use the KING Trademarks
only to the extent authorized herein.
(d) Notice of Infringement.
(i) Each party shall give the other party notice of any
infringement or threatened infringement of any of such other party's Trademarks
used in connection with the Copromote Products. Except as otherwise provided in
Section 2.3(d)(ii) below, each party shall determine in its sole discretion what
action, if any, to take in response to the infringement or threatened
infringement of that party's Trademark. Each party agrees to identify the
primary brand Trademarks of its Copromote Products (each a "Primary Brand
Trademark"). Exhibit 2.3(d) sets forth the list of Primary Brand Trademarks for
the KING Products and the NOVAVAX Products as of the Effective Date. In the
event that one party chooses to take enforcement action in response to the
infringement or threatened infringement of its Trademark, the other party shall
reasonably cooperate in such enforcement; provided, however, the enforcing party
shall reimburse the other party for reasonable expenses incurred by the other
party that are related to such enforcement.
(ii) As to each Primary Brand Trademark only, if the party owning
such a Trademark fails to take enforcement action within one hundred twenty
(120) days following notice thereof in response to the infringement or
threatened infringement of its Trademark, the other party shall have the right,
in
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its sole discretion, to conduct litigation or other enforcement proceedings at
the expense of the owner of the Primary Brand Trademark, naming the Primary
Brand Trademark owner as a party plaintiff. In such event, the Primary Brand
Trademark owner shall reasonably cooperate in such enforcement.
(iii) The parties shall cooperate in good faith with respect to all
Trademark enforcement actions hereunder, and each party shall notify the other
party promptly of all substantive developments with respect to such Trademark
enforcement actions, including, without limitation, all material filings, court
papers and other related documents. Each party shall consider the timely given,
reasonable comments and advice of the other party with respect to the strategy
employed and submissions made relative to any Trademark enforcement actions. The
party enforcing such Trademark action shall retain for its own account any
damages or other monetary relief obtained in connection therewith.
3. RESPONSIBILITIES OF KING
3.1 PROMOTION BY KING.
(a) NOVAVAX Product Promotion. Commencing as of the NOVAVAX Product
Initiation Date and continuing throughout the Term, KING shall use its
Commercially Reasonable Efforts to market and promote the NOVAVAX Products to
OB/GYN's in the Territory in accordance with the then current Marketing Plan.
Without limiting the foregoing, KING agrees that at all times during the period
commencing as of the NOVAVAX Product Initiation Date, KING or its Affiliates
shall (i) have at least fifty (50) field sales representatives Detailing the
NOVAVAX Products to OB/GYN's in the Territory, and (ii) perform Details of the
NOVAVAX Products at a minimum rate of 60,000 per twelve (12) month period in the
Territory. On or prior to each anniversary of the NOVAVAX Product Initiation
Date, the target and minimum number of Details for the NOVAVAX Products shall be
determined by the PMC. Beginning on the NOVAVAX Product Initiation Date and
thereafter, KING or its Affiliates shall be responsible for performing at least
fifty percent (50%) of such target Details. The number of Details required in
this Section 3.1(a) shall be conducted and spaced according to the current
Marketing Plan then in effect, provided, however, that the total number of
Details required in any annual Marketing Plan shall not be less than fifty
percent (50%) of the total number of Details required in the Marketing Plan for
the previous year, unless KING can demonstrate good cause, to NOVAVAX's
reasonable satisfaction, that a further reduction in the number of Details would
be prudent given the then current market conditions (which determination shall
not be subject to Section 8.7(b)). KING agrees, subject to NOVAVAX providing
KING with a sufficient quantity of samples (as determined by the PMC) of the
NOVAVAX Products, to use its Commercially Reasonable Efforts to provide, and/or
to cause its Affiliates to provide, samples of the
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NOVAVAX Products to OB/GYN's in the Territory in accordance with the then
current Marketing Plan.
(b) KING Product Promotion. Commencing as of the KING Product
Initiation Date and continuing throughout the Term, KING shall use its
Commercially Reasonable Efforts to market and promote the KING Products to
OB/GYN's in the Territory in accordance with the then current Marketing Plan.
Without limiting the foregoing, KING agrees that at all times during the period
commencing as of the KING Product Initiation Date, KING or its Affiliates shall
(i) have at least fifty (50) field sales representatives Detailing the KING
Products to OB/GYN's in the Territory, and (ii) perform the minimum Details set
by the PMC, as set forth in the current Marketing Plan then in effect. On or
prior to each anniversary of the KING Product Initiation Date, the target and
minimum number of Details for the KING Products shall be determined by the PMC.
Beginning on the KING Product Initiation Date and thereafter, KING or its
Affiliates shall be responsible for performing at least fifty percent (50%) of
such target Details. The number of Details required in this Section 3.1(b) shall
be conducted and spaced according to the current Marketing Plan then in effect,
provided, however, that the total number of Details required in any annual
Marketing Plan shall not be less than fifty percent (50%) of the total number of
Details required in the Marketing Plan for the previous year, unless KING can
demonstrate good cause, to NOVAVAX's reasonable satisfaction, that a further
reduction in the number of Details would be prudent given the then current
market conditions (which determination shall not be subject to Section 8.7(b)).
KING agrees to use its Commercially Reasonable Efforts to provide, and/or to
cause its Affiliates to provide, samples of the KING Products to OB/GYN's in the
Territory in accordance with the then current Marketing Plan.
(c) In performing its duties hereunder, KING shall, and shall cause
its employees and the employees of its relevant Affiliates to, comply with all
regulatory, professional and legal requirements, including, without limitation,
the FDA's regulations and guidelines concerning the advertising of prescription
drug products, the American Medical Associations' Guidelines on Gifts to
Physicians, the PhRMA Guidelines for Marketing Practices, and the ACCME
Standards for Commercial Support of Continuing Medical Education, which may be
applicable to the Copromote Products and services (including without limitation
the manufacturing, packaging, warehousing, handling and distribution of samples
of the Copromote Products) to be provided by KING hereunder. No employee of KING
or of any of its relevant Affiliates shall make any representation, statement,
warranty or guaranty with respect to the Copromote Products that is not
consistent with current labeling of the Copromote Products or promotional
materials approved by the PMC, that is deceptive or misleading, that disparages
the Copromote Products or the good name, good will and reputation of NOVAVAX or
that diminishes in any material respect any NOVAVAX Trademark. KING represents
and warrants that its services hereunder will be provided in a professional,
ethical and competent manner.
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3.2 MANUFACTURE, SHIPMENT, ETC. OF THE KING PRODUCTS.
KING (and/or its Affiliates) shall have the sole responsibility for the
manufacture, shipment, distribution, warehousing, billing and order confirmation
of the KING Products and for the collection of receivables resulting from sales
of the KING Products in the Territory. NOVAVAX may make recommendations to KING
from time to time regarding the price of and pricing strategies for the KING
Products during the Term, including, without limitation, price increases and
decreases and the timing thereof, provided, however, that KING shall have the
sole authority to determine the price of the KING Products in the Territory
during the Term, including price increases and decreases and the timing thereof.
KING shall manufacture or cause to be manufactured the KING Products and samples
of the KING Products in accordance with all applicable laws, including, without
limitation, the Act and all applicable regulations thereunder, the NDA and
current Good Manufacturing Practices. KING shall use its best efforts to
maintain the NDA for the KING Products in good standing with the FDA and shall
enforce all intellectual property rights of each and every kind associated
therewith. KING shall use its best efforts to ensure that adequate quantities of
the KING Products and samples of the KING Products are available to meet the
anticipated demand for the KING Products and samples of the KING Products in the
Territory during the Term of this Agreement.
3.3 KING DETAIL AND SALES REPORTS.
(a) NOVAVAX Products. Throughout the Term, KING shall provide NOVAVAX
with a report within thirty (30) calendar days after the end of each calendar
quarter, with the first such report due for the calendar quarter during which
the NOVAVAX Product Initiation Date occurs, setting forth the following
information regarding the efforts of KING's sales force in promoting and
Detailing the NOVAVAX Products during the preceding quarter (or part thereof):
(i) the number of Details made and recorded by KING's standard record keeping
procedures based on data recorded by the sales force; (ii) the names, addresses
and phone numbers of the OB/GYN's called upon; (iii) the names of and the
percentage of OB/GYN's Detailed who were provided with samples of the NOVAVAX
Products; (iv) the actual number of such samples delivered on each Detail; and
(v) such other information as may be required in the then current Marketing
Plan.
(b) KING Products. Throughout the Term, KING shall provide NOVAVAX with
a report within thirty (30) calendar days after the end of each calendar
quarter, with the first such report due for the calendar quarter during which
the KING Product Initiation Date occurs, setting forth the following information
regarding the efforts of KING's sales force in promoting and Detailing the KING
Products during the preceding quarter (or part thereof): (i) the number of
Details made and recorded by KING's standard record keeping procedures
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based on data recorded by the sales force; (ii) the names, addresses and phone
numbers of the OB/GYN's called upon; (iii) the names of and the percentage of
OB/GYN's Detailed who were provided with samples of the KING Products; (iv) the
actual number of such samples delivered on each Detail; and (v) such other
information as may be required in the then current Marketing Plan.
(c) The reports provided by KING pursuant to Section 3.3(a) and Section
3.3(b) are referred to herein as the "KING Detail Reports". Each KING Detail
Report shall be delivered in an electronic format and in hard copy form.
(d) Within fifteen (15) days after the end of each month, KING shall
provide to NOVAVAX a summary report setting forth (i) the gross sales of the
KING Products in the Territory for such month, (ii) the gross sales of the KING
Products in the Territory since January 1 of such year, (iii) the Net Sales of
the KING Products in the Territory for such month and the itemized deductions
taken in calculating all such Net Sales, and (iv) the Net Sales of the KING
Products in the Territory since January 1 of such year. All reports required by
this Section 3.3(d) shall be provided to NOVAVAX either by facsimile or
transmitted electronically, in each case with a confirmation copy sent by mail.
(e) KING shall furnish to NOVAVAX, within thirty (30) calendar days
after the end of each Agreement Quarter and each calendar quarter for which
Residual Payments are due, a report setting forth in reasonable detail the
calculation of the Incremental Sales of KING Products in the Territory for such
Agreement Quarter or calendar quarter in a form approved by NOVAVAX.
3.4 KING SALES FORCE.
(a) Except as agreed to by the parties and subject to the terms and
conditions of this Agreement, KING shall be solely responsible for the costs and
expenses of establishing, maintaining and training KING's (and its Affiliates')
sales force of sufficient size to perform its obligations hereunder, and
conducting KING's other activities under this Agreement; provided, however, that
(i) such training shall be conducted in accordance with Section 5.1 and (ii) the
content and strategic direction of any training provided by KING that relates
specifically to the Copromote Products shall be coordinated with the PMC.
Notwithstanding the foregoing, KING shall pay incentive compensation to its
sales representatives having primary responsibility for Detailing the Copromote
Products with respect to sales of the Copromote Products in the Territory in
accordance with KING's Sales Incentive Compensation Plan for KING's own
prescription drug products, it being understood that KING shall determine the
target payout for the Copromote Products in a manner consistent with the way in
which it determines the target payouts for prescription drug products of
comparable commercial potential.
(b) To the extent practicable, all written, electronic and visual
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communications provided to any of KING's (and its Affiliates') sales
representatives regarding strategy, positioning or selling messages for the
Copromote Products will, at the request of the PMC, be subject to review by the
PMC and KING's Regulatory Affairs department in accordance with Section 5.2(a).
4. RESPONSIBILITIES OF NOVAVAX.
4.1 PROMOTION OF COPROMOTE PRODUCTS BY NOVAVAX.
(a) NOVAVAX Product Promotion. Commencing as of the NOVAVAX Product
Initiation Date and continuing throughout the Term, NOVAVAX shall use its
Commercially Reasonable Efforts to market and promote the NOVAVAX Products to
OB/GYN's in the Territory in accordance with the then current Marketing Plan.
Without limiting the foregoing, NOVAVAX agrees that at all times during the
period commencing as of the NOVAVAX Product Initiation Date, NOVAVAX or its
Affiliates shall (i) have at least fifty (50) field sales representatives
Detailing the NOVAVAX Products to OB/GYN's in the Territory, and (ii) perform
Details of the NOVAVAX Products at a minimum rate of 60,000 per twelve (12)
month period in the Territory. On or prior to each anniversary of the NOVAVAX
Product Initiation Date, the target and minimum number of Details for the
NOVAVAX Products shall be determined by the PMC. Beginning on the NOVAVAX
Product Initiation Date and thereafter, NOVAVAX or its Affiliates shall be
responsible for performing at least fifty percent (50%) of such target Details.
The number of Details required in this Section 4.1(a) shall be conducted and
spaced according to the current Marketing Plan then in effect, provided,
however, that the total number of Details required in any annual Marketing Plan
shall not be less than fifty percent (50%) of the total number of such Details
required in the Marketing Plan for the previous year, unless NOVAVAX can
demonstrate good cause, to KING's reasonable satisfaction, that a further
reduction in the number of Details would be prudent given the then current
market conditions (which determination shall not be subject to Section 8.7(b)).
NOVAVAX agrees to use its Commercially Reasonable Efforts to provide, and/or to
cause its Affiliates to provide, samples of the NOVAVAX Products to OB/GYN's in
the Territory in accordance with the then current Marketing Plan.
(b) KING Product Promotion. Commencing as of the KING Product
Initiation Date and continuing throughout the Term, NOVAVAX shall use its
Commercially Reasonable Efforts to market and promote the KING Products to
OB/GYN's in the Territory in accordance with the then current Marketing Plan.
Without limiting the foregoing, NOVAVAX agrees that at all times during the
period commencing as of the KING Product Initiation Date, NOVAVAX or its
Affiliates shall (i) have at least fifty (50) field sales representatives
Detailing the KING Products to OB/GYN's in the Territory, and (ii) perform the
minimum Details set by the PMC, as set forth in the current Marketing Plan then
in effect.
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On or prior to each anniversary of the KING Product Initiation Date, the target
and minimum number of Details for the KING Products shall be determined by the
PMC. Beginning on the KING Product Initiation Date and thereafter, NOVAVAX or
its Affiliates shall be responsible for performing at least fifty percent (50%)
of such target Details. The number of Details required in this Section 4.1(b)
shall be conducted and spaced according to the current Marketing Plan then in
effect, provided, however, that the total number of Details required in any
annual Marketing Plan shall not be less than fifty percent (50%) of the total
number of Details required in the Marketing Plan for the previous year, unless
KING can demonstrate good cause, to NOVAVAX's reasonable satisfaction, that a
further reduction in the number of Details would be prudent given the then
current market conditions (which determination shall not be subject to Section
8.7(b)). NOVAVAX agrees, subject to KING providing NOVAVAX with a sufficient
quantity of samples (as determined by the PMC) of the KING Products, to use its
Commercially Reasonable Efforts to provide, and/or to cause its Affiliates to
provide, samples of the KING Products to OB/GYN's in the Territory in accordance
with the then current Marketing Plan.
(c) In performing its duties hereunder, NOVAVAX shall, and shall cause
its employees and the employees of its relevant Affiliates to, comply with all
regulatory, professional and legal requirements, including, without limitation,
the FDA's regulations and guidelines concerning the advertising of prescription
drug products, the American Medical Associations' Guidelines on Gifts to
Physicians, the PhRMA Guidelines for Marketing Practices, and the ACCME
Standards for Commercial Support of Continuing Medical Education, which may be
applicable to the Copromote Products and services (including without limitation
the manufacturing, packaging, warehousing, handling and distribution of samples
of the Copromote Products) to be provided by NOVAVAX hereunder. No employee of
NOVAVAX or of any of its relevant Affiliates shall make any representation,
statement, warranty or guaranty with respect to the Copromote Products that is
not consistent with current labeling of the Copromote Products or promotional
materials approved by the PMC, that is deceptive or misleading, that disparages
the Copromote Products or the good name, good will and reputation of KING or
that diminishes in any material respect any KING Trademark. NOVAVAX represents
and warrants that its services hereunder will be provided in a professional,
ethical and competent manner.
4.2 MANUFACTURE, SHIPMENT, ETC. OF THE NOVAVAX PRODUCTS.
NOVAVAX (and/or its Affiliates) shall have the sole responsibility for
the manufacture, shipment, distribution, warehousing, billing and order
confirmation of the NOVAVAX Products and for the collection of receivables
resulting from sales of the NOVAVAX Products in the Territory. KING may make
recommendations to NOVAVAX from time to time regarding the price of and pricing
strategies for the NOVAVAX Products during the Term, including, without
limitation, price increases and decreases and the timing thereof, provided,
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however, that NOVAVAX shall have the sole authority to determine the price of
the NOVAVAX Products in the Territory during the Term, including price increases
and decreases and the timing thereof. NOVAVAX shall manufacture or cause to be
manufactured the NOVAVAX Products and samples of the NOVAVAX Products in
accordance with all applicable laws, including, without limitation, the Act and
all applicable regulations thereunder, the NDA and current Good Manufacturing
Practices. NOVAVAX shall use its best efforts to maintain the NDA for the
NOVAVAX Products in good standing with the FDA and shall enforce all patents and
intellectual property rights of each and every kind associated therewith.
NOVAVAX shall use its best efforts to ensure that adequate quantities of the
NOVAVAX Products and samples of the NOVAVAX Products are available to meet the
anticipated demand for the NOVAVAX Products and samples of the NOVAVAX Products
in the Territory during the Term of this Agreement.
4.3 NOVAVAX DETAIL AND SALES REPORTS.
(a) NOVAVAX Products. Throughout the Term, NOVAVAX shall provide KING
with a report within thirty (30) calendar days after the end of each calendar
quarter, with the first such report due for the calendar quarter during which
the NOVAVAX Product Initiation Date occurs, setting forth the following
information regarding the efforts of NOVAVAX's sales force in promoting and
Detailing the NOVAVAX Products during the preceding quarter (or part thereof):
(i) the number of Details made and recorded by NOVAVAX's standard record keeping
procedures based on data recorded by the sales force; (ii) the names, addresses
and phone numbers of the OB/GYN's called upon; (iii) the names of and the
percentage of OB/GYN's Detailed who were provided with samples of the NOVAVAX
Products; (iv) the actual number of such samples delivered on each Detail; and
(v) such other information as may be required in the then current Marketing
Plan.
(b) KING Products. Throughout the Term, NOVAVAX shall provide KING with
a report within thirty (30) calendar days after the end of each calendar
quarter, with the first such report due for the calendar quarter during which
the KING Product Initiation Date occurs, setting forth the following information
regarding the efforts of NOVAVAX's sales force in promoting and Detailing the
KING Products during the preceding quarter (or part thereof): (i) the number of
Details made and recorded by NOVAVAX's standard record keeping procedures based
on data recorded by the sales force; (ii) the names, addresses and phone numbers
of the OB/GYN's called upon; (iii) the names of and the percentage of OB/GYN's
Detailed who were provided with samples of the KING Products; (iv) the actual
number of such samples delivered on each Detail; and (v) such other information
as may be required in the then current Marketing Plan.
(c) The reports provided by NOVAVAX pursuant to Section 4.3(a) and
4.3(b) are referred to herein as the "NOVAVAX Detail Reports". Each
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NOVAVAX Detail Report delivered pursuant hereto shall be delivered in an
electronic format and in hard copy form.
(d) Throughout the Term, NOVAVAX shall provide to KING a weekly report
setting forth the gross sales of the NOVAVAX Products in the Territory for the
previous business week. Additionally, within fifteen (15) days after the end of
each month, NOVAVAX shall provide to KING a summary report setting forth (i) the
gross sales of the NOVAVAX Products in the Territory for such month, (ii) the
gross sales of the NOVAVAX Products in the Territory since January 1 of such
year, (iii) the Net Sales of the NOVAVAX Products in the Territory for such
month and the itemized deductions taken in calculating all such Net Sales, and
(iv) the Net Sales of the NOVAVAX Products in the Territory since January 1 of
such year. All reports required by this Section 4.3(c) shall be provided to KING
either by facsimile or transmitted electronically, in each case with a
confirmation copy sent by mail.
(e) NOVAVAX shall furnish to KING, within thirty (30) calendar days
after the end of each Agreement Quarter and each calendar quarter for which
Residual Payments are due, a report setting forth in reasonable detail the
calculation of the total Net Sales of NOVAVAX Products in the Territory for such
Agreement Quarter or calendar quarter in a form approved by KING.
4.4 NOVAVAX SALES FORCE.
(a) Except as agreed to by the parties and subject to the terms and
conditions of this Agreement, NOVAVAX shall be solely responsible for the costs
and expenses of establishing, maintaining and training NOVAVAX's (and its
Affiliates') sales force of sufficient size to perform its obligations
hereunder, and conducting NOVAVAX's other activities under this Agreement;
provided, however, that (i) such training shall be conducted in accordance with
Section 5.1 and (ii) the content and strategic direction of any training
provided by NOVAVAX that relates specifically to the Copromote Products shall be
coordinated with the PMC. Notwithstanding the foregoing, NOVAVAX shall pay
incentive compensation to its sales representatives having primary
responsibility for Detailing the Copromote Products with respect to sales of the
Copromote Products in the Territory in accordance with NOVAVAX's Sales Incentive
Compensation Plan for NOVAVAX's own products, it being understood that NOVAVAX
shall determine the target payout for the Copromote Products in a manner
consistent with the way in which it determines the target payouts for
prescription drug products of comparable commercial potential.
(b) To the extent practicable, all written, electronic and visual
communications provided to any of NOVAVAX's (and its Affiliates') sales
representatives regarding strategy, positioning or selling messages for the
Copromote Products will, at the request of the PMC, be subject to review by the
PMC and KING's Regulatory Affairs department in accordance with Section 5.2(a).
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5. TRAINING AND PROMOTIONAL MATERIAL
5.1 TRAINING.
(a) Each of the parties agrees to make its sales representatives
available for training with respect to the marketing and sale of the Copromote
Products. The parties agree that KING shall, subject to the PMC's approval, be
responsible for developing and, if applicable, conducting training programs for
each of KING's and NOVAVAX's sales forces. Training shall be carried out at a
time which is mutually acceptable to the parties. The parties' relevant local
operating entity Affiliates shall be responsible for the development and conduct
of training programs, subject to the direction of KING and NOVAVAX and the
oversight of the PMC, on an ongoing basis to assure a consistent, focused
promotional strategy. As additional members are added to the parties' respective
sales forces responsible for marketing the Copromote Products, training will be
given to groups of the newly selected members.
(b) Each party shall decide where the training of its sales
representatives will occur and absorb the costs of transporting, housing and
maintaining their respective personnel for such training. Subject to the
oversight of the PMC, all sales and marketing training materials will be
prepared and supplied by KING.
5.2 PROMOTIONAL MATERIALS.
(a) All written sales, promotion and advertising materials ("Marketing
Materials") relating to the Copromote Products shall be consistent with the
Marketing Plans approved by the PMC. All Marketing Materials shall be subject to
copy clearance procedures established by the parties from time to time,
including review by each party. Marketing Materials prepared by either party
shall be provided to the other party for legal and regulatory comment, which
comment shall occur within five (5) days after such party's receipt of the
Marketing Materials approved by the PMC and shall be given due consideration.
(b) In all written or visual materials used in the Territory related
to the Copromote Products which identify either of the parties, the parties will
be presented and described to the medical communities (including, for example,
the physician, pharmacy, governmental, reimbursement and hospital sectors) as
joining in the promotion of the Copromote Products in the Territory. All such
written and visual materials and all documentary information, promotional
material, and oral presentations (where practical) regarding the promoting of
the Copromote Products will state this arrangement and will
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display the names and logos of the parties with equal prominence, as permitted
by applicable law.
6. COPROMOTE PRODUCT SAMPLES
6.1 SUPPLY, STORAGE AND DISTRIBUTION OF SAMPLES.
(a) NOVAVAX Products. NOVAVAX shall provide KING, from time to time on
a schedule and in such quantities to be reasonably determined by the PMC, with
samples of the NOVAVAX Products to be used by KING solely in marketing and
promoting the Copromote Products in the Territory, in accordance with the then
current Marketing Plan. NOVAVAX shall ship the samples to one central warehouse
of KING, as designated by KING, and the risk of loss and responsibility for
handling and warehousing of the samples shall pass to KING upon delivery to a
carrier designated by KING. KING shall be responsible for distributing the
samples to its sales representatives in a timely manner. KING shall also be
responsible for securing the return of and reconciling existing sample
inventories from its discontinued field sales representatives. All samples of
the NOVAVAX Products provided to KING hereunder shall be accompanied by an
appropriate Certificate of Analysis of the NOVAVAX Product specifications and an
indication of expiration dating.
(b) KING Products. KING shall provide NOVAVAX, from time to time on a
schedule and in such quantities to be reasonably determined by the PMC, with
samples of the KING Products to be used by NOVAVAX solely in marketing and
promoting the Copromote Products in the Territory. KING shall ship the samples
to one central warehouse of NOVAVAX, as designated by NOVAVAX, and the risk of
loss and responsibility for handling and warehousing of the samples shall pass
to NOVAVAX upon delivery to a carrier designated by NOVAVAX. NOVAVAX shall be
responsible for distributing the samples to its sales representatives in a
timely manner. NOVAVAX shall also be responsible for securing the return of and
reconciling existing sample inventories from its discontinued field sales
representatives. All samples of the KING Products provided to NOVAVAX hereunder
shall be accompanied by an appropriate Certificate of Analysis of the KING
Product specifications and an indication of expiration dating.
6.2 USE OF SAMPLES.
(a) NOVAVAX Products. Samples of the NOVAVAX Products supplied by
NOVAVAX to KING or to NOVAVAX's sales representatives for use in the Territory
shall be used by KING and NOVAVAX solely in making Detail calls to OB/GYN's in
the Territory pursuant to this Agreement. Upon its receipt of NOVAVAX Product
samples, KING shall be responsible for accountability and compliance with the
PDMA, and other applicable federal, state and local laws and
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regulations relating to such samples or the distribution of same. NOVAVAX shall
be responsible for accountability and compliance with the PDMA, and other
applicable federal, state and local laws and regulations relating to NOVAVAX
Product samples that NOVAVAX supplies for distribution by NOVAVAX's sales
representatives. KING and NOVAVAX each shall be responsible for adherence by its
respective sales representatives to such laws and regulations.
(b) KING Products. Samples of the KING Products supplied by KING to
NOVAVAX or to KING's sales representatives shall be used by KING and NOVAVAX
solely in making Detail calls to OB/GYN's in the Territory pursuant to this
Agreement. Upon its receipt of KING Product samples, NOVAVAX shall be
responsible for accountability and compliance with the PDMA, and other
applicable federal, state and local laws and regulations relating to such
samples or the distribution of same. KING shall be responsible for
accountability and compliance with the PDMA, and other applicable federal, state
and local laws and regulations relating to KING Product samples that KING
supplies for distribution by KING's sales representatives. KING and NOVAVAX each
shall be responsible for adherence by its respective sales representatives to
such laws and regulations.
(c) Audit Rights. Each party or its appointed agents shall have the
right to audit the records and/or reports for the Copromote Product samples, as
required to be kept by the other party under the PDMA, during normal business
hours, at convenient times and upon no less than five (5) calendar days' prior
notice.
7. CERTAIN REGULATORY MATTERS
7.1 LICENSES.
Each party hereto shall, at its sole cost and expense, maintain in full
force and effect all necessary licenses, permits and other authorizations
required by law, regulation, ordinance or statute to carry out its duties and
obligations in the Territory under this Agreement.
7.2 REGULATORY RESPONSIBILITY.
(a) NOVAVAX Products. All regulatory matters regarding the NOVAVAX
Products shall remain under the control of NOVAVAX, subject to the participation
by KING in matters related to the marketing of the NOVAVAX Products to OB/GYN's
in the Territory. Notwithstanding the foregoing, NOVAVAX shall promptly provide
KING with copies of all communications received from any regulatory agency or
authority concerning the NOVAVAX Products or any Marketing Materials related to
the NOVAVAX Products and shall submit copies of all such communications and
filings to be made to any
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regulatory agency or authority for prior review and comment within five (5)
business days. NOVAVAX shall provide adequate notice to KING and shall include
KING in all meetings with the FDA, electronic, in person, or otherwise. NOVAVAX
shall give due consideration to all comments timely made by KING and shall
notify KING, in writing, if it declines to address any such comments, stating
the reason therefor.
(b) KING Products. All regulatory matters regarding the KING Products
shall remain under the control of KING, subject to the participation by NOVAVAX
in matters related to the marketing of the KING Products to OB/GYN's in the
Territory. Notwithstanding the foregoing, KING shall promptly provide NOVAVAX
with copies of all communications received from any regulatory agency or
authority concerning the KING Products or any Marketing Materials and shall
submit copies of all communications and filings to be made to any regulatory
agency or authority for prior review and comment within five (5) business days.
KING shall provide adequate notice to NOVAVAX and shall include NOVAVAX in all
meetings with the FDA, electronic, in person, or otherwise. KING shall give due
consideration to all comments timely made by NOVAVAX and shall notify NOVAVAX,
in writing, if it declines to address any such comments, stating the reason
therefor.
7.3 EFFICACY AND SAFETY INFORMATION.
(a) NOVAVAX Products. NOVAVAX shall furnish KING with efficacy and
safety information in its possession as reasonably requested by KING to assist
KING in promoting the NOVAVAX Products to OB/GYN's in the Territory, including
without limitation relevant clinical and safety data included in the NDA for the
NOVAVAX Products and additional information, if any, related to the efficacy and
safety profile of the NOVAVAX Products. Except for that information that is to
be disclosed to OB/GYN's in connection with conducting Details, such information
shall be treated as Confidential and Proprietary Information pursuant to Section
12 of this Agreement and shall not be disclosed to third parties without
NOVAVAX's prior written approval or direction.
(b) KING Products. KING shall furnish NOVAVAX with efficacy and safety
information reasonably requested by NOVAVAX to assist NOVAVAX in promoting the
KING Products to OB/GYN's in the Territory, including without limitation
relevant clinical and safety data included in the NDA for the KING Products and
additional information, if any, related to the efficacy and safety profile of
the KING Products. Except for that information that is to be disclosed to
OB/GYN's in connection with conducting Details, such information shall be
treated as confidential and proprietary information pursuant to Section 12 of
this Agreement and shall not be disclosed to third parties without KING's prior
written approval or direction.
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7.4 NOTICE OF ADVERSE EVENTS.
(a) Each party shall promptly notify the other party of any event(s)
that materially affect(s) or could materially affect the marketing of the
Copromote Products, including without limitation adverse drug reactions and
governmental inquiries.
(b) NOVAVAX Products. Serious Adverse Events for the NOVAVAX Products
learned of by KING shall be submitted in writing to NOVAVAX within two (2)
business days from the date of learning thereof by KING. Non-Serious Adverse
Events for the NOVAVAX Products learned of by KING shall be submitted in writing
to NOVAVAX no more than five (5) business days from the date of learning thereof
by KING. NOVAVAX and/or its Affiliates shall have the sole responsibility for
reporting and responding to such events to applicable regulatory authorities in
the Territory; provided, that KING may take such actions (including issuing such
reports) as it determines is required by applicable law. NOVAVAX shall promptly
provide KING with copies of all periodic reports and product safety update
reports relating to the NOVAVAX Products which are filed or received from third
parties. Notwithstanding the foregoing, within one hundred twenty (120) days
after the Effective Date, the parties shall meet and establish a standard
operating procedure ("SOP") addressing the responsibilities of each party with
respect to adverse event reporting, which SOP shall supercede this Section 7.4,
it being understood, however, that with regard to the NOVAVAX Products, NOVAVAX
shall have the responsibility of reporting all adverse events to the appropriate
regulatory authorities.
(c) KING Products. Serious Adverse Events for the KING Products learned
of by NOVAVAX shall be submitted in writing to KING within two (2) business days
from the date of learning thereof by NOVAVAX. Non-Serious Adverse Events for the
KING Products learned of by NOVAVAX shall be submitted in writing to KING no
more than five (5) business days from the date of learning thereof by NOVAVAX.
KING and/or its Affiliates shall have the sole responsibility for reporting and
responding to such events to applicable regulatory authorities in the Territory;
provided, that NOVAVAX may take such actions (including issuing such reports) as
it determines is required by applicable law. KING shall promptly provide NOVAVAX
with copies of all periodic reports and product safety update reports relating
to the KING Products which are filed or received from third parties.
Notwithstanding the foregoing, within one hundred twenty (120) days after the
Effective Date, the parties shall meet and establish an SOP addressing the
responsibilities of each party with respect to adverse event reporting, which
SOP shall supercede this Section 7.4, it being understood, however, that with
regard to the KING Products, KING shall have the responsibility of reporting all
adverse events to the appropriate regulatory authorities.
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7.5 PRODUCT TECHNICAL COMPLAINTS AND RECALLS.
(a) NOVAVAX Products. NOVAVAX shall have the sole authority and
responsibility to respond to any regulatory agencies, including without
limitation the FDA, to respond to NOVAVAX Product Technical Complaints and
medical complaints and to handle all returns, recalls or market withdrawals of
the NOVAVAX Products in accordance with applicable law, at NOVAVAX's cost and
expense; provided, however, that if any such returns, recalls or market
withdrawals of the NOVAVAX Products are caused solely by actions or inactions by
KING constituting a breach of the provisions of this Agreement or a violation of
applicable law, KING, as NOVAVAX's sole remedy, shall bear all reasonable Direct
Costs associated with such actions or inactions in connection therewith,
provided, however, that KING shall have no obligation to reimburse NOVAVAX for
any incidental or consequential damages incurred in connection therewith,
including, without limitation, any lost profits. Prior to the NOVAVAX Product
Initiation Date, the PMC shall adopt an SOP for handling NOVAVAX Product
Technical Complaints, medical inquiries and adverse event information received
by the parties not otherwise specified in this Agreement. The PMC shall revise
the SOP from time to time during the Term as the PMC deems necessary.
(b) KING Products. KING shall have the sole authority and
responsibility to respond to any regulatory agencies, including without
limitation the FDA, to respond to KING Product Technical Complaints and medical
complaints and to handle all returns, recalls or market withdrawals of the KING
Products in accordance with applicable law, at KING's cost and expense;
provided, however, that if any such returns, recalls or market withdrawals of
the KING Products are caused solely by actions or inactions by NOVAVAX
constituting a breach of the provisions of this Agreement or a violation of
applicable law, NOVAVAX, as KING's sole remedy, shall bear all reasonable Direct
Costs associated with such actions or inactions in connection therewith,
provided, however that NOVAVAX shall have no obligation to reimburse KING for
any incidental or consequential damages incurred in connection therewith,
including, without limitation, any lost profits. Prior to the KING Product
Initiation Date, the PMC shall adopt an SOP for handling KING Product Technical
Complaints, medical inquiries and adverse event information received by the
parties not otherwise specified in this Agreement. The PMC shall revise the SOP
from time to time during the Term as the PMC deems necessary.
(c) Each party shall promptly (but in any case, not later than 48
hours) notify the other party in writing of any order, request or directive of a
court or other governmental authority to recall or withdraw a Copromote Product.
NOVAVAX shall be solely responsible for determining whether to issue a recall or
withdrawal and for the cost and expense of any such recall or withdrawal of the
NOVAVAX Products, subject to reasonable consultation with KING. King shall be
solely responsible for determining whether to issue a recall or withdrawal and
for
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the cost and expense of any such recall or withdrawal of the KING Products,
subject to reasonable consultation with NOVAVAX.
(d) Because the NOVAVAX Products are manufactured by or on behalf of
NOVAVAX and the underlying NDA is owned solely by NOVAVAX or an Affiliate of
NOVAVAX, KING shall send NOVAVAX Product Technical Complaints to NOVAVAX. If the
NOVAVAX Product Technical Complaint cannot be categorized as a B Complaint
(meaning no actual or potential harm to patient), then the NOVAVAX Product
Technical Complaint will be categorized as an A Complaint. A Complaints shall be
sent to NOVAVAX within twenty-four (24) hours of receipt and B Complaints shall
be sent within three (3) business days of receipt, but no more than four (4)
calendar days from the receipt date by KING. NOVAVAX shall promptly notify KING
following receipt by NOVAVAX of any NOVAVAX Product Technical Complaints.
(e) Because the KING Products are manufactured by or on behalf of KING
and the underlying NDA is owned solely by KING or an Affiliate of KING, NOVAVAX
shall send KING Product Technical Complaints to KING. If the KING Product
Technical Complaint cannot be categorized as a B Complaint (meaning no actual or
potential harm to patient), then the KING Product Technical Complaint will be
categorized as an A Complaint. A Complaints shall be sent to KING within
twenty-four (24) hours of receipt and B Complaints shall be sent within three
(3) business days of receipt, but no more than four (4) calendar days from the
receipt date by NOVAVAX. KING shall promptly notify NOVAVAX following receipt by
KING of any KING Product Technical Complaints.
7.6 RETURNS.
(a) Any NOVAVAX Products returned to KING shall be shipped to the
facility designated by NOVAVAX, with shipping and other Direct Costs to be paid
by NOVAVAX. Risk of loss or damage with respect to NOVAVAX Products shipped to
NOVAVAX under this Section 7 shall pass to NOVAVAX on delivery to a carrier
designated by NOVAVAX. KING shall incur no liability of any nature in the
handling of such returns unless such NOVAVAX Products were handled or stored
improperly by KING.
(b) Any KING Products returned to NOVAVAX shall be shipped to the
facility designated by KING, with shipping and other Direct Costs to be paid by
KING. Risk of loss or damage with respect to the KING Products shipped to KING
under this Section 7 shall pass to KING on delivery to a carrier designated by
KING. NOVAVAX shall incur no liability of any nature in the handling of such
returns unless such KING Products were handled or stored improperly by NOVAVAX.
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7.7 NOTICE OF GOVERNMENT INSPECTIONS.
(a) NOVAVAX agrees that, to the extent it becomes aware of the results,
observations and/or outcome of any inspections or audits of the facilities or
operations involved in the manufacture, processing, testing or packaging of the
Copromote Products conducted by governmental agencies, including without
limitation the FDA, NOVAVAX will notify KING of any such information as it
relates to the Copromote Products within three (3) days of obtaining the
information. NOVAVAX will provide KING copies of reports of quality audits
conducted by NOVAVAX and will apprise KING of material manufacturing issues
affecting supply of the Copromote Products.
(b) KING agrees that, to the extent it becomes aware of the results,
observations and/or outcome of any inspections or audits of the facilities or
operations involved in the manufacture, processing, testing or packaging of the
Copromote Products conducted by governmental agencies, including without
limitation the FDA, KING will notify NOVAVAX of any such information as it
relates to the Copromote Products within three (3) days of obtaining the
information. KING will provide NOVAVAX copies of reports of quality audits
conducted by KING and will apprise NOVAVAX of material manufacturing issues
affecting supply of the Copromote Products.
7.8 GOVERNMENT INQUIRIES.
Upon being contacted by the FDA or any other federal, state or local
agency for any regulatory purpose pertaining specifically to this Agreement or
to the Copromote Products, a party shall immediately notify the other party.
Either party may permit unannounced FDA or similar unannounced inspections of
Copromote Products or facilities and respond to the extent necessary to comply
with its obligations under applicable law. Each party shall provide the other
with notices of any other inspection and shall allow that party to participate
to the extent necessary in the sole opinion of that party, in such inspections
and responses pertaining to the Copromote Products.
7.9 MEDICAL INQUIRIES.
(a) NOVAVAX Products. NOVAVAX shall handle all medical inquiries
concerning the NOVAVAX Products. KING shall refer all medical information
requests and/or medical inquiries to NOVAVAX in accordance with the procedures
set forth in the SOP referred to in Section 7.5.
(b) KING Products. KING shall handle all medical inquiries concerning
the KING Products. NOVAVAX shall refer all medical information requests to the
Regulatory Affairs department of KING in accordance with the procedures set
forth in the SOP referred to in Section 7.5.
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8. MANAGEMENT COMMITTEE
8.1 ESTABLISHMENT OF THE PMC.
The parties hereto recognize that it is in the best interests of both
parties to (a) maximize the sales of and profits arising from the Copromote
Products in the Territory and (b) optimize the marketing of the Copromote
Products in the Territory during the Term and to coordinate the activities of
both parties with respect to the promotion of the Copromote Products in the
Territory. Accordingly, the parties hereby establish a management committee (the
"Product Management Committee" or "PMC") made up of three (3) representatives of
each party. One of KING's senior representatives shall chair the PMC. Both
parties shall have the right from time to time to substitute individuals, on a
permanent or temporary basis, for any of its previously designated members of
the PMC. The members appointed by each party shall be vested with appropriate
decision-making authority and power with respect to the promotion and marketing
of the Copromote Products by such party. Members of each such committee shall be
employees of the parties (or their Affiliates), respectively, and shall not be
outside consultants, independent contractors or outside legal counsel, but such
Persons are permitted to attend meetings of the PMC. Each party shall bear its
own costs associated with its participation on the PMC.
8.2 PURPOSE AND RESPONSIBILITIES OF THE PMC.
The purpose of the PMC is to oversee the marketing and promotion of the
Copromote Products by the parties as contemplated by this Agreement by
coordinating the marketing and promotional efforts of the parties in the
Territory and maximizing the sales thereof. Accordingly, in addition to the
specific matters addressed elsewhere in this Agreement, and subject to the other
provisions of this Agreement the PMC shall approve the following:
(a) marketing and promotion activities for the Copromote Products in
the Territory;
(b) the annual Marketing Plan for the Copromote Products and related
Budget of Net Sales and Marketing Expenses for use in the Territory;
(c) the market definition against which the Copromote Products will be
measured in the Territory;
(d) Copromote Product production forecasts for the Territory;
(e) Marketing Expenses in the Territory;
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(f) targets for sales force staffing, number and frequency of
quarterly and annual Details in the Territory;
(g) Copromote Product positioning, strategy and objectives in the
Territory;
(h) determining the format and quantities of promotional sales,
marketing and educational materials for the Copromote Products which will
be provided to the OB/GYN's called upon in the Details by either party's
sales representatives in the Territory;
(i) quantities and schedule of delivery of samples of the Copromote
Products to be provided by NOVAVAX to each party's sales representatives
and to the OB/GYN's called upon in the Details by each party's sales force
in the Territory; and
(j) managed health care strategy tactics in the Territory.
8.3 PMC MEETINGS.
During the Term of this Agreement, the PMC shall meet: (a) at least
once each Agreement Quarter on a date and at a location to be agreed to by the
PMC, and (b) upon written notice by either party to the other that a meeting is
required or requested, in which case a meeting will be held within thirty (30)
calendar days of such notice on a date and at a location to be agreed to by the
parties, or sooner if warranted by circumstances. Notice requesting a meeting
shall include adequate information describing the activity to be reviewed. Any
meetings of the PMC may be held in person at a location to be agreed to by the
parties, or by videoconference or teleconference. Other representatives of the
parties may attend PMC meetings as consultants or advisors to the participants.
At least one week prior to any meeting of the PMC, each of the parties shall
provide the other party with a proposed agenda of the matters to be discussed at
such meeting. The parties shall agree, at the first meeting of the PMC, upon
procedures for maintaining meeting minutes. If the parties cannot agree upon a
time and location, then the PMC Chairman shall designate, in his sole
discretion, a reasonable time and location.
8.4 VOTE AND APPROVAL.
The PMC may take action on a matter at a meeting only if a quorum
exists with respect to that matter. The attendance of at least two (2) members
of the PMC of each party at a meeting shall constitute a quorum for the
transaction of business. Each member of the PMC shall be entitled to cast one
(1) vote on any matter to be acted upon at any meeting of the PMC. All decisions
made by the PMC shall require a unanimous vote by the members of the PMC present
at the meeting. Any action required or permitted to be taken at any meeting of
the
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PMC may be taken without a meeting if the action is taken by all members of
the PMC. The action must be evidenced by one or more written consents describing
the action taken and signed by each member of the PMC.
8.5 MARKETING PLAN AND BUDGET.
On or prior to October 31 of each year during the Term of this
Agreement, the parties shall develop a Marketing Plan and the related Budget for
the following calendar year and submit such Marketing Plan to the PMC for
approval; provided, that the Marketing Plan with respect to the KING Products
for the period beginning with the KING Product Initiation Date shall be
developed by the parties and submitted for the approval of the PMC on or prior
to the KING Product Initiation Date, and the Marketing Plan with respect to the
NOVAVAX Products for the period beginning with the NOVAVAX Product Initiation
Date shall be developed by the parties and submitted for the approval of the PMC
on or prior to the NOVAVAX Product Initiation date. Each Marketing Plan shall
set forth the manner in which the Copromote Products are to be promoted and
Detailed in the Territory during the period to which the Marketing Plan relates
and shall include, at a minimum: (a) the minimum number of quarterly and annual
Details to be provided by each party and targets therefor which shall be
allocated in a professionally equitable manner (the "Minimum Targeted Details");
(b) Copromote Product positioning, strategy and tactics with supporting
advertising and promotional activity to be undertaken; (c) the Budget,
including, without limitation, direct to consumer advertising, if any; (d) any
training and/or sampling programs to be conducted; (e) medical and education
programs to be conducted; (f) public relations activities; (g) medical
conventions to be attended; and (h) such other information relating to the
marketing of the Copromote Products as deemed advisable by the PMC. Neither
party shall make any material change in any previously approved Marketing Plan
without the prior written approval of the PMC. Additionally, within one hundred
twenty (120) days after the Effective Date, NOVAVAX shall submit to the PMC for
review and approval an initial NOVAVAX Product production forecast, and KING
shall submit to the PMC for review and approval an initial KING Product
production forecast.
8.6 ADDITIONAL STUDIES, LINE EXTENSIONS AND NEW PRODUCTS.
(a) Any proposals for additional clinical studies of any NOVAVAX
Product, including, without limitation, Phase IV studies and clinical studies
for purposes of expanding the indications or otherwise changing the label for
such NOVAVAX Product shall be submitted to the PMC for consideration, whether
such studies are proposed by KING or NOVAVAX.
(i) If KING, in its sole discretion, elects to equally share with
NOVAVAX and actually pays those Direct Costs for such study for which NOVAVAX
will be responsible, KING shall be entitled to receive fifty percent
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(50%) of any revenues that NOVAVAX may receive in connection with such study. If
KING, in its sole discretion, elects not to share in the costs of such study,
NOVAVAX shall be free to proceed with such study and KING shall have no right to
receive any portion of any revenue NOVAVAX receives in connection therewith so
long as such revenues are clearly identifiable and separable.
(ii) If NOVAVAX, in its sole discretion, elects to equally share
with KING and actually pays those Direct Costs for such study for which KING
will be responsible, NOVAVAX shall be entitled to receive fifty percent (50%) of
any revenues that KING may receive in connection with such study. If NOVAVAX, in
its sole discretion, elects not to share in the costs of such study, KING shall
be free to proceed with such study and NOVAVAX shall have no right to receive
any portion of any revenue KING receives in connection therewith so long as such
revenues are clearly identifiable and separable.
(b) Any proposals for development of additional NOVAVAX Products,
including, without limitation, new formulations and line extensions, shall be
submitted to the PMC for consideration, whether such development activities are
proposed by NOVAVAX or KING. If KING, in its sole discretion, elects to equally
share with NOVAVAX and actually pays those Direct Costs for such development
activities for which NOVAVAX will be responsible, KING shall be entitled to
receive fifty percent (50%) of any revenues that NOVAVAX actually receives from
sales of products resulting from such development activities and any such
additional products shall become NOVAVAX Products under this Agreement. If KING,
in its sole discretion, elects not to share in the costs of such development
activities, NOVAVAX shall be free to proceed with such development activities
and KING shall have no right to receive any portion of any revenues in
connection therewith so long as such revenues are clearly identifiable and
separable and such additional products shall not be considered to be NOVAVAX
Products under this Agreement (i.e., NOVAVAX will have the right to receive all
the benefits in connection with such additional products and KING shall have no
obligations in connection therewith).
8.7 DISPUTE RESOLUTION.
(a) The parties recognize that disputes as to certain matters may from
time to time arise during the Term of this Agreement that relate to either
party's rights and/or obligations hereunder. It is the objective of the parties
to establish procedures to facilitate the resolution of disputes arising under
this Agreement in an expedient manner by mutual cooperation and without resort
to litigation. To accomplish this objective, the parties agree to follow the
procedures set forth in this Section 8.7 if and when a dispute arises under this
Agreement.
(b) Unless otherwise specifically recited in this Agreement, disputes
between the parties under this Agreement shall be first referred to the
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PMC by either party as soon as reasonably possible after such dispute has
arisen. If the PMC is unable to resolve such a dispute within fifteen (15) days
of being requested by a party to resolve such dispute, either party may, by
written notice to the other, have such dispute referred to their respective
executive officers designated below or their designees, for attempted resolution
by negotiations within thirty (30) days after such notice is received. The
designated officers are as follows:
For NOVAVAX: President of Novavax, Inc.
For KING: President of KING Pharmaceuticals, Inc.
Any dispute that cannot be resolved within thirty (30) calendar
days after submission to the designated officers shall be submitted for
arbitration in accordance with the rules of the American Arbitration
Association, and the award or decision made by the arbitrator(s) designated
pursuant to the American Arbitration Association rules of arbitration shall be
binding upon the parties hereto and a judgment consistent therewith may be
entered in any court of competent jurisdiction; provided, however, that nothing
herein contained shall preclude a party from seeking equitable remedies in a
court of competent jurisdiction in order to enforce the provisions of Section 16
hereof. Any proceeding brought by NOVAVAX against KING shall be brought in a
state or federal court in Tennessee. Any proceeding brought by KING against
NOVAVAX shall be brought in a state or federal court in Maryland.
(c) Notwithstanding Section 8.7(b), if the PMC proposes a modification
to a previously approved Marketing Plan and such modification is expected to
have a material adverse impact on the results of operations of one of the
parties then the individuals identified in Section 8.7(b) shall mutually agree
to such modifications prior to the implementation thereof.
9. FEES AND EXPENSES
9.1 CONSIDERATION FEE.
(a) NOVAVAX Products. Within forty-five (45) days after the end of each
calendar quarter during the Term, NOVAVAX shall pay to KING (by wire transfer of
immediately available funds to an account designated by KING to NOVAVAX in
writing) an amount ("NP Consideration Fee") equal to fifty percent (50%) of the
Net Sales of the NOVAVAX Products in the Territory during such quarter minus
fifty percent (50%) of the Net Costs of NOVAVAX Products in the Territory during
such quarter; provided, however, that NOVAVAX shall be solely responsible for
the Net Costs of NOVAVAX Products to the extent that such Net Costs, as a
percentage of Net Sales, exceed seventeen percent (17%)
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during any calendar quarter. By way of example only, Exhibit 9.1 reflects a
sample calculation of the NP Consideration Fee.
(b) KING Products. Within forty-five (45) days after the end of each
calendar quarter during the Term, KING shall pay to NOVAVAX (by wire transfer of
immediately available funds to an account designated by NOVAVAX to KING in
writing) an amount ("KP Consideration Fee") equal to (i) fifty percent (50%) of
the Incremental Sales for the KING Products during such quarter (calculated
using the baseline sales figures on Exhibit 9.1(b)) minus (ii) fifty percent
(50%) of the Incremental Costs for the KING Products during such quarter. By way
of example only, Exhibit 9.1 reflects a sample calculation of the KP
Consideration Fee.
9.2 MILESTONE PAYMENTS.
KING shall pay NOVAVAX Five Million Dollars ($5,000,000) if (i) the NDA
for ESTRASORB(TM) is accepted for filing by the FDA on or before June 30, 2001;
and (ii) NOVAVAX provides KING with the Consultant Opinion Letters required to
be delivered pursuant to Section 5(a) of that certain Note Purchase Agreement
dated as of December 19, 2000 by and between King and Novavax (the "Note
Purchase Agreement"), King shall pay NOVAVAX Two Million Five Hundred Thousand
Dollars ($2,500,000) if (i) the NDA for ESTRASORB(TM) is accepted for filing by
the FDA after June 30, 2001, but on or before September 30, 2001; and (ii)
NOVAVAX provides KING with the Consultant Opinion Letters required to be
delivered pursuant to Section 5(a) of the Note Purchase Agreement.
9.3 RESIDUAL PAYMENTS.
(a) Payments by NOVAVAX. If this Agreement shall expire at the end of
the Initial Term and KING shall not have elected (or shall not have the right to
elect) to extend the Initial Term with respect to the NOVAVAX Products for the
Extended Promotion Term, then for the twenty-four (24) month period after the
date of such expiration: (i) NOVAVAX shall make residual payments (the "Residual
Payments") to KING equal to twenty-five percent (25%) of Net Sales of the
NOVAVAX Products during such period, and (ii) shall conduct its business
involving the marketing and sale of the NOVAVAX products only in the ordinary
course and shall not affect the time of any sales of the NOVAVAX Products in
order to affect the amount of Net Sales for such period. Within forty-five (45)
days after the end of each calendar quarter (or part thereof) during such
period, NOVAVAX shall pay to KING (by wire transfer of immediately available
funds to an account designated by KING to NOVAVAX in writing) an amount equal to
the Residual Payments accrued but unpaid through the end of such calendar
quarter.
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(b) Payments by KING. For the twenty-four (24) month period after the
date of expiration of this Agreement: (i) KING shall make Residual Payments to
NOVAVAX equal to twenty-five percent (25%) of Incremental Sales of the KING
Products during such period, and (ii) shall conduct its business involving the
marketing and sale of the KING products only in the ordinary course and shall
not affect the time of any sales of the KING Products in order to affect the
amount of Net Sales for such period. Within forty-five (45) days after the end
of each calendar quarter (or part thereof) during such period, KING shall pay to
NOVAVAX (by wire transfer of immediately available funds to an account
designated by NOVAVAX to KING in writing) an amount equal to the Residual
Payments accrued but unpaid through the end of such calendar quarter.
9.4 MARKETING EXPENSES.
(a) In accordance with Section 8.5, as part of the Marketing Plan, the
parties shall develop a Budget of Marketing Expenses and submit such Marketing
Plan to the PMC for approval for each calendar year during the Term. The parties
acknowledge and agree that the Marketing Expenses approved by the PMC in the
Budget shall be shared equally by the parties.
(b) NOVAVAX Products. NOVAVAX shall initially pay for all Marketing as
such Marketing Expenses are incurred for NOVAVAX Products and shall keep
accurate and reasonably detailed records of such payments. NOVAVAX shall provide
KING with a weekly update of an estimate of the Marketing Expenses and other PMC
approved miscellaneous expenses incurred by NOVAVAX during the previous week
within fifteen (15) days after the end of each month. NOVAVAX shall provide KING
with a detailed statement of Marketing Expenses and other PMC-approved
miscellaneous expenses incurred during such month along with an invoice for
KING's share thereof, which invoice will be payable, less any credits for
Marketing Expenses and other PMC-approved miscellaneous expenses incurred and
paid by KING within fifteen (15) days of KING's receipt thereof. KING shall also
provide NOVAVAX with a weekly update of an estimate of the Marketing Expenses
and other PMC approved miscellaneous expenses incurred and paid (other than to
NOVAVAX) by it during the previous week and within fifteen (15) days after the
end of each month, KING shall provide NOVAVAX with a detailed statement of all
Marketing Expenses and other PMC-approved miscellaneous expenses incurred by
KING during such month. Within thirty (30) days after the end of each calendar
quarter during the Term, NOVAVAX shall prepare a reconciliation statement of
Marketing Expenses incurred by each party during such calendar quarter. If such
reconciliation statement shall show that either party reasonably incurred and
paid Marketing Expenses and other PMC-approved miscellaneous costs and expenses
in excess of the amount payable by such party, and that the other party incurred
and paid Marketing Expenses below
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the amount payable by such party, then within thirty (30) days after such
reconciliation statement is submitted to KING, the underpaying party shall
reimburse the other party for the amount of such underpayment. Any overpayment
which is not reimbursed in accordance with the foregoing sentence shall be
credited to Marketing Expenses payable by the overpaying party in the following
calendar year, up to an amount equal to five percent (5%) of the amount that was
payable by such party pursuant to this Section 9.4(b) as applicable, in the year
to which the overpayment relates, and the remainder of any such unreimbursed
overpayment shall be repaid as determined by the PMC.
(c) KING Products. KING shall initially pay for all Marketing as such
Marketing Expenses are incurred for KING Products and shall keep accurate and
reasonably detailed records of such payments. KING shall provide NOVAVAX with a
weekly update of an estimate of the Marketing Expenses incurred during the
previous week within fifteen (15) days after the end of each month. KING shall
provide NOVAVAX with a detailed monthly statement of Marketing Expenses and
other PMC-approved miscellaneous expenses related to Incremental Sales incurred
during such month along with an invoice for NOVAVAX's share thereof, which
invoice will be payable, less any credits for Marketing Expenses and other
PMC-approved miscellaneous expenses incurred and paid by NOVAVAX within fifteen
(15) days of NOVAVAX's receipt thereof. NOVAVAX shall also provide KING with a
weekly update of an estimate of the Marketing Expenses and other PMC-approved
miscellaneous expenses incurred by it during the previous week and within
fifteen (15) days after the end of each month, NOVAVAX shall provide KING with a
detailed statement of all Marketing Expenses and other PMC-approved
miscellaneous expenses incurred by NOVAVAX during such month. Within thirty (30)
days after the end of each calendar quarter during the Term, KING shall prepare
a reconciliation statement of Marketing Expenses incurred by each party during
such calendar quarter. If such reconciliation statement shall show that either
party reasonably incurred and paid Marketing Expenses and other PMC-approved
miscellaneous costs and expenses in excess of the amount payable by such party,
and that the other party incurred and paid Marketing Expenses below the amount
payable by such party, then within thirty (30) days after such reconciliation
statement is submitted to NOVAVAX, the underpaying party shall reimburse the
other party for the amount of such underpayment. Any overpayment which is not
reimbursed in accordance with the foregoing sentence shall be credited to
Marketing Expenses payable by the overpaying party in the following calendar
year, up to an amount equal to five percent (5%) of the amount that was payable
by such party pursuant to this Section 9.4(c) as applicable, in the year to
which the overpayment relates, and the remainder of any such unreimbursed
overpayment shall be repaid as determined by the PMC.
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9.5 EXCESS DETAIL COSTS.
If, during any calendar year during the Term, a party reasonably
determines, based on the NOVAVAX Detail Reports or the KING Detail Reports, as
the case may be, that the other party is failing to conduct the minimum number
or percentage of Details (the "Minimum Targeted Details") for the NOVAVAX
Products required to be conducted by such other party by the Marketing Plan for
such year, then such party may elect to conduct a greater number of Details for
the NOVAVAX Products than the Minimum Targeted Details for such party (such
greater number of Details, the "Excess Details"). A party conducting Excess
Details for the NOVAVAX Products shall notify the other party promptly in
writing following the Agreement Quarter in which such Excess Details were
conducted, and within thirty (30) days after receipt of such notice, the other
party shall pay to such party an amount equal to two (2) times the then current
Detail Cost multiplied by the number of such Excess Details; provided, that any
payments to a party under this Section 9.5 on Details for the NOVAVAX Products
in excess of one hundred five percent (105%) of the Minimum Targeted Details for
such party for any calendar year shall be subject to the prior approval of the
PMC.
9.6 OTHER MISCELLANEOUS COSTS AND EXPENSES.
Except as otherwise expressly provided in this Agreement, KING and
NOVAVAX shall each pay one-half (1/2) of all costs and expenses, which are
specifically approved by the PMC; provided, however that this Section 9.6 shall
not be construed to require KING or any of its Affiliates to manufacture the
NOVAVAX Products or samples of the NOVAVAX Products, nor shall it be construed
to require NOVAVAX or any of its Affiliates to manufacture the KING Products or
samples of the KING Products.
9.7 COSTS SAVINGS.
(a) If KING is able to assist NOVAVAX in reducing NOVAVAX's cost of
goods of any NOVAVAX Product, then NOVAVAX shall pay to KING one half (1/2) of
the resulting cost savings and the parties shall in good faith establish
arrangements for making such payments; provided, however, this Section 9.7 shall
not be construed or interpreted to require KING or any of its Affiliates to
manufacture any NOVAVAX Product or any active ingredients or to provide any
components or labeling.
(b) If NOVAVAX is able to assist KING in reducing KING's cost of goods
of any KING Product, then KING shall pay to NOVAVAX one half (1/2) of the
resulting cost savings and the parties shall in good faith establish
arrangements for making such payments; provided, however, this Section 9.7 shall
not be construed or interpreted to require NOVAVAX or any of its Affiliates
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to manufacture any KING Product or any active ingredients or to provide any
components or labeling.
10. RECORDKEEPING AND AUDITS
10.1 MAINTENANCE OF BOOKS AND RECORDS.
Each party shall maintain complete and accurate books and records in
sufficient detail, in accordance with GAAP and all applicable laws, rules,
ordinances and regulations, to enable verification of the performance of such
party's obligations under this Agreement. Such records shall be maintained for a
period of twenty-four (24) months after the end of the Term or longer if
required by applicable law.
10.2 PAYMENT AUDITS.
(a) Either party (herein, the "Auditing Party") may demand, no more
than once during any calendar year from the KING Product Initiation Date until
two (2) years following the end of the Term, an audit of the relevant books and
records of the other party (herein, the "Audited Party") in order to verify the
Audited Party's reports on the matters addressed in this Agreement. Upon no less
than fifteen (15) days' prior written notice to the Audited Party, the Audited
Party shall grant access to members of a nationally recognized independent
public accounting firm selected by the Auditing Party to the relevant books and
records of the Audited Party in order to conduct a review or audit thereof. Such
access shall be available during normal business hours. The accountants shall
report their conclusions and calculations to the Auditing Party and the Audited
Party; provided, that in no event shall the accountants disclose any information
of the Audited Party except to the extent necessary to verify the Audited
Party's reporting and other compliance with the terms of this Agreement and, at
the request of the Audited Party, such accountants will execute appropriate
non-disclosure agreements. Except as hereinafter set forth, the Auditing Party
shall bear the full cost of the performance of any such audit. Any information
obtained from an audit under this Section 10.2 shall be deemed Confidential and
Proprietary Information of the Audited Party.
(b) If, as a result of any audit of the books and records of the
Audited Party, it is shown that the Audited Party's payments to the Auditing
Party under this Agreement with respect to the period of time audited were less
than the amount which should have been paid to the Auditing Party pursuant to
this Agreement, then the Audited Party shall pay to the Auditing Party the
amount of such shortfall within thirty (30) days after the Auditing Party's
demand therefor. If, as a result of any audit of the books and records of
Audited Party, it is shown that the Audited Party's payments to the Auditing
Party under this Agreement with respect to the period of time audited were
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more than the amount which should have been paid to the Auditing Party pursuant
to this Agreement, then the Auditing Party shall pay to the Audited Party the
amount of such overpayment within thirty (30) days after the Audited Party's
demand therefor. In addition, if any amount payable by the Audited Party
pursuant to this Section 10.2 is more than the amount which should have
originally been paid pursuant to this Agreement by an amount in excess of ten
percent (10%) of the payments actually made with respect to the period in
question, then the Audited Party shall also reimburse the Auditing Party for its
documented reasonable out-of-pocket costs and expenses incurred in connection
with the audit.
10.3 COMPLIANCE AUDITS.
In addition to the access and audit rights of the parties set forth in
Section 10.2, no more than once during any calendar year during the Term, each
party shall, and shall cause its Affiliates to, afford to the other party
reasonable access during normal business hours (and at such other times as the
parties may mutually agree) to the relevant books, records and other information
of such party upon reasonable prior notice from the other party may reasonably
request in order to monitor such party's compliance with such party's
obligations under the applicable Marketing Plan and its other non-monetary
obligations under this Agreement. Such access shall be available during normal
business hours. Any inspection conducted by either party pursuant to this
Section 10.3 shall be at the sole cost and expense of such party.
11. TERM AND TERMINATION
11.1 TERM OF AGREEMENT.
(a) The initial term of this Agreement (the "Initial Term") shall
commence as of the Effective Date hereof and, unless terminated sooner or
extended as provided below, shall continue until the last to expire of any
patent rights covering the NOVAVAX Products which grant exclusivity to the
marketing of the NOVAVAX Products (the Initial Term, as extended or sooner
terminated, the "Term").
(b) If NOVAVAX (or any of its Affiliates) shall obtain any additional
patent or other exclusive rights with respect to the manufacturing, sale,
marketing or promotion of the NOVAVAX Products, and such rights shall have a
term which extends beyond the Initial Term ("Additional Exclusivity Rights"),
then NOVAVAX shall so notify KING promptly and KING may, in its sole discretion,
elect to extend the Initial Term until the expiration or termination of such
Additional Exclusivity Rights (the "Extended Promotion Term"); provided,
however, that KING shall not be entitled to extend the Initial
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Term pursuant to this Section 11.1(b) if KING shall then be in breach or default
of this Agreement in any material respect. If KING shall elect to extend the
Initial Term pursuant to this Section 11.1(b), then KING shall provide written
notice thereof to NOVAVAX at least sixty (60) days prior to the expiration of
the Initial Term, in which case the terms and conditions of this Agreement shall
remain in full force and effect until the expiration of the Extended Promotion
Term, unless terminated sooner as provided herein. In connection with any
extension of the Initial Term pursuant to this Section 11.1(b), the parties
shall in good faith enter into such amendments or modifications to this
Agreement that may be necessary or appropriate to implement the terms and
conditions of this Agreement, as modified or supplemented by the Additional
Exclusivity Rights; provided, that the extension provided under this Section
11.1(b) shall not be subject to agreement on such amendments or modifications,
and failing such agreement this Agreement shall continue in full force and
effect.
11.2 TERMINATION BY NOVAVAX.
(a) NOVAVAX shall have the right to terminate this Agreement except as
provided in Section 11.4 below, at any time upon written notice to KING, if KING
breaches in a material way any of the representations, warranties, covenants or
agreements set forth in this Agreement or otherwise materially defaults in the
performance of any of its duties or obligations under this Agreement, which
breach or default shall not be cured within sixty (60) days after written notice
is given to KING specifying the breach or default.
(b) NOVAVAX shall have the right to terminate this Agreement with
respect to any KING Product upon thirty (30) days' prior notice to KING if there
has been a material adverse change in the market for such KING Product in the
Territory such as a recall or withdrawal of such KING Product, or a safety
problem related to such KING Product, which was not remedied by KING within
sixty (60) days after receiving notice of such change.
(c) To the extent permitted by law, NOVAVAX shall have the right to
terminate this Agreement immediately upon notice to KING, if KING is declared
bankrupt or insolvent where there is an assignment for the benefit of creditors,
or if a receiver is appointed or proceedings commenced, (and not dismissed
within ninety (90) days) voluntarily or involuntarily, under any bankruptcy or
similar law.
11.3 TERMINATION BY KING.
KING shall have the right to terminate this Agreement, in its sole
discretion, as follows:
(a) at any time on or before June 30, 2001 or immediate notice, in
the event that KING, in conducting its continued due diligence on the NOVAVAX
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Products, determines, in its sole discretion, that there are safety or efficacy
concerns relating to the NOVAVAX Products;
(b) immediately upon written notice to NOVAVAX, if (i) the FDA shall
not have given written notice to NOVAVAX that the FDA has accepted the NDA for
the ESTRASORB(TM) Model Claims on or prior to March 31, 2002, or (ii) KING is
advised between March 31, 2002 and December 31, 2002, by a nationally recognized
pharmaceuticals consulting firm, that the FDA is not expected to approve the NDA
for the ESTRASORB(TM) by December 31, 2002;
(c) within sixty (60) days after the third anniversary of the NOVAVAX
Product Initiation Date, upon sixty (60) days' written notice to NOVAVAX if
annualized Net Sales of the NOVAVAX Products, based on the run rate over the
preceding six (6) months are less than Fifty Million dollars ($50,000,000);
(d) except as provided in Section 11.4 below, at any time upon
written notice to NOVAVAX, if NOVAVAX breaches in a material way any of the
representations, warranties, covenants or agreements set forth in this Agreement
or otherwise materially defaults in the performance of any of its duties or
obligations under this Agreement, which breach or default shall not be cured
within sixty (60) days after written notice is given to NOVAVAX specifying the
breach or default;
(e) upon thirty (30) days' prior notice to NOVAVAX if there has been
a material adverse change in the market for a NOVAVAX Product in the Territory
such as a recall or withdrawal of such NOVAVAX Product, or a safety problem
related to such NOVAVAX Product;
(f) with respect to any KING Product, upon thirty (30) days' prior
notice to NOVAVAX if there has been a material adverse change in the market for
such KING Product in the Territory such as a recall or withdrawal of such King
Product, or a safety problem related to such KING Product; or
(g) immediately upon notice to NOVAVAX, to the extent permitted by
law, if NOVAVAX is declared bankrupt or insolvent where there is an assignment
for the benefit of creditors, or if a receiver is appointed or proceedings
commenced (and not dismissed within ninety (90) days), voluntarily or
involuntarily, under any bankruptcy or similar law.
(h) an "Event of Default" shall have occurred under that certain 4%
Convertible Senior Note, dated December 19, 2000, made by NOVAVAX to KING.
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11.4 FAILURE TO MEET DETAIL REQUIREMENTS.
Notwithstanding any provision in this Agreement to the contrary, in the
event that either party (the "Nonperforming Party") fails to perform at least
ninety percent (90%) of the minimum number of Details it is required to perform
during any calendar year and the other party has performed at least ninety
percent (90%) of the minimum number of Details it is required to perform during
such calendar year, such other party shall have sixty (60) days from its receipt
of the Nonperforming Party's final Detail Report for such calendar year to
notify the Nonperforming Party that it is in breach of such obligations, in
which event the Nonperforming Party shall have the opportunity to cure such
default by providing a sufficient number of extra Details to make up for such
short fall prior to the end of the first full calendar quarter following the
calendar quarter in which the other party provides such breach notice to the
Nonperforming Party. In the event the Nonperforming Party fails to so cure such
default, the other party may, within thirty (30) days after the end of such
calendar quarter, terminate this Agreement on sixty (60) days' prior notice to
the Nonperforming Party. If the other party (i) fails to give timely notice of
the Nonperforming Party's breach or of termination due to the other
Nonperforming Party's failure to cure such breach in accordance with this
Section 11.4 or (ii) elects, in accordance with Section 9.5 hereof, to perform
excess Details to make up the Nonperforming Party's shortfall of required
Details, the other party shall be deemed to have waived its rights under this
Section 11.4 with respect to such breach, provided, however, that any such
waiver shall not be construed as a waiver of such other party's rights under
this Section 11.4 as to any further breaches by the Nonperforming Party.
Notwithstanding the foregoing, the parties agree that the Nonperforming Party
shall not be in breach of its Detailing obligations for any calendar year
hereunder if the Nonperforming Party provides at least ninety percent (90%) of
the minimum number of Details it is required to perform during such calendar
year.
11.5 EFFECTS OF TERMINATION.
(a) Neither the termination nor expiration of this Agreement shall
release or operate to discharge either party from any liability or obligation
that may have accrued prior to such termination or expiration. Any termination
of this Agreement as provided herein shall not be an exclusive remedy but shall
be in addition to any remedies whatsoever that may be available to the
terminating party.
(b) Notwithstanding the giving of any notice of termination pursuant
to this Section 11, each party shall continue to fulfill its obligations under
this Agreement at all times until the effective date of any such termination.
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11.6 ACTIONS UPON TERMINATION.
(a) NOVAVAX Products. Upon the termination or expiration of this
Agreement for any reason with respect to the NOVAVAX Products, KING shall
immediately cease all of its promotional and marketing activities for the
terminated NOVAVAX Products, discontinue any use of the NOVAVAX Trademarks
related to the terminated NOVAVAX Products, and return to NOVAVAX or destroy all
sales training and Marketing Materials for the terminated NOVAVAX Products
containing NOVAVAX Trademarks and any remaining terminated NOVAVAX Products
samples (not already distributed or destroyed with destruction certified by
KING). After any termination NOVAVAX shall retain the right to use any sales
training and Marketing Materials developed under the auspices of the PMC during
the Term of this Agreement, provided, however, that NOVAVAX shall have no
further right to use KING's name or any KING Trademark or logos in connection
therewith.
(b) KING Products. Upon the termination or expiration of this
Agreement for any reason with respect to the KING Products, NOVAVAX shall
immediately cease all of its promotional and marketing activities for the
terminated KING Products, discontinue any use of the KING Trademarks related to
the terminated KING Products, and return to KING or destroy all sales training
and Marketing Materials for the terminated KING Products containing KING
Trademarks and any remaining terminated KING Products samples (not already
distributed or destroyed with destruction certified by NOVAVAX). After any
termination KING shall retain the right to use any sales training and Marketing
Materials developed under the auspices of the PMC during the Term of this
Agreement, provided, however, that KING shall have no further right to use
NOVAVAX's name or any of the NOVAVAX Trademarks or logos in connection
therewith.
11.7 SURVIVAL.
The representations, warranties, covenants and agreements of the
parties in Sections 3.3(e), 4.3(e), 9 (to the extent applicable pursuant to
Section 11.8), 10, 11, 12, 13, 14, 15 and 16 hereof shall survive any expiration
or termination of this Agreement.
11.8 PAYMENTS UPON TERMINATION.
(a) The expiration or termination of this Agreement pursuant to this
Section 11 with respect to any Copromote Product shall not release (i) either
party from any obligation to pay to the other party any amounts accrued under
Section 9 of this Agreement in connection with activities completed, expenses
accrued and Net Sales realized for such Copromote Product with respect to the
period prior to the effective date of such expiration or termination; or (ii) if
applicable, NOVAVAX from any obligation to make Residual Payments to KING;
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provided, that no further amounts shall be payable under Section 9, except as
provided for in this Section 11.
(b) Within thirty (30) days after the expiration or termination of
this Agreement, KING shall provide to NOVAVAX (i) a KING Detail Report for the
month during which such expiration or termination occurs (and all KING Detail
Reports for prior months that were required to be submitted to NOVAVAX pursuant
to Section 3.3 but were not submitted); (ii) a statement of Net Sales for the
KING Products during the period of January 1 of the calendar year in which such
expiration or termination occurs through the effective date of such expiration
or termination; (iii) a reasonably detailed statement of Marketing Expenses
incurred by KING during such period; and (iv) a reasonably detailed statement of
costs and expenses incurred by KING in performing Excess Details, if any, during
such period.
(c) Within thirty (30) days after the expiration or termination of
this Agreement, NOVAVAX shall provide to KING (i) a NOVAVAX Detail Report for
the month during which such expiration or termination occurs (and all NOVAVAX
Detail Reports for prior months that were required to be submitted to KING
pursuant to Section 4.3 but were not submitted); (ii) a statement of Net Sales
for the NOVAVAX Products during the period of January 1 of the calendar year in
which such expiration or termination occurs through the effective date of such
expiration or termination; and (iii) a reasonably detailed statement of
Marketing Expenses incurred by NOVAVAX during such period; and (iv) a reasonably
detailed statement of costs and expenses incurred by NOVAVAX in performing
Excess Details, if any, during such period.
(d) Within thirty (30) days after receipt of such information from
NOVAVAX and KING, the PMC shall determine the net amount due and or payable by
KING and NOVAVAX, and such amount shall be paid by the parties within thirty
(30) days after such PMC determination.
(e) In the event of termination of this Agreement pursuant to Section
11.3(b), NOVAVAX, as KING's sole remedy for the failure to have such Model
Claims approved, shall, within thirty (30) days after the effective date of such
termination, pay to KING an amount equal to all Marketing Expenses paid and
other PMC approved miscellaneous expenses by KING incurred under Section 9.2 and
Section 9.4 hereof prior to the date of termination, less any reimbursements
NOVAVAX has previously made to KING for NOVAVAX's share of such Marketing
Expenses and other PMC approved miscellaneous expenses.
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12. CONFIDENTIALITY; OWNERSHIP
12.1 CONFIDENTIAL INFORMATION.
(a) Each party acknowledges that it may receive confidential or
proprietary information of the other party in the performance of this Agreement,
including without limitation information obtained or reviewed in connection with
any audits or investigations performed pursuant to Section 10.2 or Section 10.3
of this Agreement. Each party shall hold confidential and shall not, directly or
indirectly, disclose, publish or use for the benefit of any third party or
itself, except in carrying out its duties hereunder, any confidential or
proprietary information of the other party or confidential or proprietary
information jointly developed by the parties, without first having obtained the
furnishing party's written consent to such disclosure or use. "Confidential or
Proprietary Information" shall include without limitation know-how, scientific
information, clinical data, efficacy and safety data, adverse event information,
formulas, methods and processes, specifications, pricing information (including
discounts, rebates and other price adjustments) and other terms and conditions
of sales, customer information, business plans, and all other intellectual
property. This restriction shall not apply to any information within the
following categories:
(i) is or becomes part of the public domain other than by
unauthorized acts of the party obligated not to disclose such information
or its Affiliates, sublicensees, consultants and contractors, as
applicable;
(ii) can be shown by written documentation to have been disclosed
to or already in the possession of the receiving party or its Affiliates or
sublicensees by a third party, provided such information was not obtained
by such third party directly or indirectly from the other party under this
Agreement pursuant to a confidentiality agreement;
(iii) can be shown by written documentation to have been
independently developed by the receiving party or its Affiliates without
breach of any of the provisions of this Agreement by personnel without
access to the confidential information;
(iv) is disclosed by the receiving party pursuant to
interrogatories, formal requests for information or documents, subpoena, or
a civil investigative demand of a court or governmental agency; provided,
however, that, to the extent practicable, the receiving party notifies the
other party promptly following receipt thereof so that the other may seek a
protective order or other appropriate remedy to prevent or limit such
disclosure, and provided further that the disclosing party furnishes only
that portion of the information which it is advised by counsel is legally
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required and imposes such obligations of secrecy as are possible in that
regard;
(v) is required to be disclosed by a party under any statutory,
regulatory or similar legislative requirement or any rule of any stock
exchange to which it or any Affiliate is subject; provided, however, that
the non-disclosing party shall be allowed to review the proposed disclosure
and the disclosing party agrees to consider in good faith any proposed
revisions thereof provided to the disclosing party within two (2) business
days of the non-disclosing party's receipt of the proposed disclosure and
the parties shall seek confidential treatment for such disclosure as
permitted by applicable law; or
(vi) is required by authorities to obtain regulatory approval.
(b) The obligations set forth in this Section 12 shall survive the
termination or expiration of this Agreement for a period of five (5) years. The
confidentiality obligations described in this Section 12 shall be in addition to
the parties' obligations under the Confidentiality Agreements dated as of
September 1, 2000 (the "Confidentiality Agreements"), except that to the extent
there is a conflict between the Confidentiality Agreements and provisions of
this Agreement, this Agreement shall govern.
13. INDEMNIFICATION AND INSURANCE
13.1 INDEMNIFICATION BY KING.
KING shall defend, indemnify and hold NOVAVAX and its Affiliates, and
their respective officers, directors, employees, successors and assigns,
harmless from and against any and all claims, liabilities, losses, costs,
actions, suits, damages and expenses (other than special, incidental,
consequential or punitive damages, but including attorneys' fees and costs)
arising out of: (a) any breach by KING of any representation, warranty or
covenant contained in this Agreement; (b) the infringement or alleged
infringement of any patent, trademark or other intellectual property rights of a
third party by its activities with respect to the KING Products or KING
Trademarks; (c) any personal injury (including death) and/or property damage
resulting from the handling, possession or use of the KING Products; (d) any
claims by third parties relating to the performance or nonperformance of KING's
obligations under this Agreement; and (e) any other liability arising out of the
manufacture, marketing, labeling, distribution or use of the KING Products;
provided, however, that KING shall not be required to indemnify NOVAVAX with
respect to any such claim, liability, loss, cost, action, suit, damage or
expense hereunder to the extent covered by NOVAVAX's indemnification obligation
in Section 13.2, or which arises from NOVAVAX's
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negligent act or omission or intentional misconduct or that of any NOVAVAX
affiliate.
13.2 INDEMNIFICATION BY NOVAVAX.
NOVAVAX shall defend, indemnify and hold KING and its Affiliates, and
their respective officers, directors, employees, successors and assigns,
harmless from and against any and all claims, liabilities, losses, costs,
actions, suits, damages and expenses (other than special, incidental,
consequential or punitive damages, but including attorneys' fees and costs)
arising out of: (a) any breach by NOVAVAX of any representation, warranty or
covenant contained in this Agreement; (b) the infringement or alleged
infringement of any patent, trademark or other intellectual property rights of a
third party by its activities with respect to the NOVAVAX Products or Trademark
in accordance with the terms and conditions of this Agreement; (c) any personal
injury (including death) and/or property damage resulting from the handling,
possession or use of the NOVAVAX Products; (d) any claims by third parties
relating to the performance or nonperformance of NOVAVAX's obligations under
this Agreement; and (e) any other liability arising out of the manufacture,
marketing, labeling, distribution or use of the NOVAVAX Products; provided,
however, that NOVAVAX shall not be required to indemnify KING with respect to
any such claim, liability, loss, cost, action, suit, damage or expense hereunder
to the extent covered by KING's indemnification obligation in Section 13.1, or
which arises from KING's negligent act or omission or intentional misconduct or
that of any KING Affiliate.
13.3 CLAIMS PROCEDURES.
A party (the "Indemnitee") which intends to claim indemnification
under this Section 13 shall notify the other party (the "Indemnitor") within a
reasonable time in writing of any action, claim or liability in respect of which
the Indemnitee believes it is entitled to claim indemnification, provided that
the failure to give timely notice to the Indemnitor shall not release the
Indemnitor from any liability to the Indemnitee to the extent the Indemnitor is
not prejudiced thereby. The Indemnitor shall have the right, by notice to the
Indemnitee, to assume the defense of any such action or claim within the fifteen
(15) day period after the Indemnitor's receipt of notice of any action or claim
with counsel of the Indemnitor's choice and at the sole cost of the Indemnitor.
If the Indemnitor does not so assume the defense of such third party claim, the
Indemnitee may assume such defense with reasonable counsel of its choice and at
the sole cost of the Indemnitor. If the Indemnitor so assumes such defense, the
Indemnitee may participate therein through counsel of its choice, but at the
sole cost of the Indemnitee. The party not assuming the defense of any such
claim shall render all reasonable assistance to the party assuming such defense,
and all reasonable out-of-pocket costs of such assistance shall be for the
account of the Indemnitor. No such claim shall be settled other than by the
party defending the same, and then only with
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the consent of the other party which shall not be unreasonably withheld;
provided that the Indemnitee shall have no obligation to consent to any
settlement of any such action or claim which imposes on the Indemnitee any
liability or obligation which cannot be assumed and performed in full by the
Indemnitor, and the Indemnitee shall have no right to withhold its consent to
any settlement of any such action or claim if the settlement involves only the
payment of money by the Indemnitor or its insurer.
13.4 INSURANCE.
Each party shall maintain insurance (either through purchase of a
policy form a nationally recognized third party insurer or through maintenance
of a self-insurance program) against such risks and upon such terms (including
coverages, deductible limits and self-insured retentions) as is customary for
the activities to be conducted by such party under this Agreement and is
appropriate to cover its indemnification obligations hereunder. Each party shall
name the other as an additional insured on such party's relevant insurance
policies, as its interests may appear, and shall furnish to the other party
evidence of such insurance, upon request.
14. REPRESENTATIONS AND WARRANTIES
14.1 BY KING.
KING represents and warrants to NOVAVAX that:
(a) the execution, delivery and performance of this Agreement by KING
does not conflict with, or constitute a breach of or under, any order, judgment,
agreement or instrument to which KING is a party; and
(b) the execution, delivery and performance of this Agreement by KING
does not require the consent of any Person or the authorization of (by notice or
otherwise) any governmental or regulatory authority;
(c) the rights granted by KING to NOVAVAX hereunder do not conflict
with any rights granted by KING to any third party;
(d) KING has sufficient rights in and to the KING Products and all
intellectual property, use, development, manufacturing, marketing, distribution
and sale rights related thereto necessary or advisable for such purposes as
contemplated by this agreement (the "KING Product Rights"), free and clear of
any liens or encumbrances, except for any customer contracts, government
contracts and contracts with hospitals or group purchasing organizations, in
each case entered into in the ordinary course of business (collectively,
"Product Contracts");
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(e) except for the Product Contracts, there are no agreements between
KING and any Person with respect to the rights of KING in the Territory in the
KING Products and the KING Product Rights;
(f) KING has the right to and, as of the Effective Date, has no reason
to believe it will not have a continuous and sufficient supply of the active
ingredient included in the KING Products during the entire Term;
(g) it has no notice that any KING Product Rights, or that the use
thereof as contemplated under this Agreement, interfere or infringe on any
intellectual property rights owned or possessed by any Person;
(h) there are no third party pending patent applications which, if
issued, may cover the use, development, manufacture, distribution or sale of the
KING Products;
(i) there are no claims, judgments or settlements against or owed by
KING or pending or threatened claims or litigation relating to the KING Products
or the KING Product Rights;
(j) it has reviewed the available safety data relating to the KING
Products and has no reason to believe the KING Products are not safe;
(k) any KING Product samples provided to NOVAVAX hereunder have been
at all times in the control of KING or its designate and meet applicable
specifications contained in the NDA for the KING Product.
14.2 BY NOVAVAX.
NOVAVAX represents and warrants to KING that:
(a) the execution, delivery and performance of this Agreement by
NOVAVAX does not conflict with, or constitute a breach of or under, any order,
judgment, agreement or instrument to which NOVAVAX is a party;
(b) the execution, delivery and performance of this Agreement by
NOVAVAX does not require the consent of any Person or the authorization of (by
notice or otherwise) any governmental or regulatory authority,
(c) the rights granted by NOVAVAX to KING hereunder do not conflict
with any rights granted by NOVAVAX to any third party;
(d) NOVAVAX has sufficient rights in and to the NOVAVAX Products and
all intellectual property, use, development, manufacturing, marketing,
distribution and sale rights related thereto necessary or advisable for such
purposes as contemplated by this agreement (the "NOVAVAX Product Rights"), free
and clear of any liens or encumbrances;
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(e) there are no agreements between NOVAVAX and any Person in with
respect to the rights of NOVAVAX in the Territory in the NOVAVAX Products and
the NOVAVAX Product Rights;
(f) NOVAVAX has the right to and, as of the Effective Date, has no
reason to believe it will not have a continuous and sufficient supply of the
active ingredient included in the NOVAVAX Products during the entire Term;
(g) it has no notice that any NOVAVAX Product Rights, or that the use
thereof as contemplated under this Agreement, interfere or infringe on any
intellectual property rights owned or possessed by any Person;
(h) there are no third party pending patent applications which, if
issued, may cover the use, development, manufacture, distribution or sale of the
NOVAVAX Products;
(i) there are no claims, judgments or settlements against or owed by
NOVAVAX or pending or threatened claims or litigation relating to the NOVAVAX
Products or the NOVAVAX Product Rights;
(j) it has reviewed the available safety data relating to the NOVAVAX
Products and has no reason to believe the NOVAVAX Products are not safe;
(k) any NOVAVAX Product samples provided to KING hereunder have been
at all times in the control of NOVAVAX or its designate and meet applicable
specifications contained in the NDA for the NOVAVAX Product.
15. NOTICES
Except as otherwise specifically provided herein, any notice or other
documents to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if sent by registered post, nationally recognized
overnight courier or confirmed facsimile transmission to a party (followed by
hard copy by mail) or delivered in person to a party at the address or facsimile
number set out below for such party or such other address as the party may from
time to time designate by written notice to the other:
If to KING:
KING Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy (which shall not constitute notice) to:
KING Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Executive Vice President and General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to NOVAVAX:
Novavax, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
White & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice or other document shall be deemed to have been received by the
addressee three (3) business days following the date of dispatch of the notice
or other document by post or, where the notice or other document is sent by
overnight courier, by hand or is given by facsimile, simultaneously with the
transmission or delivery thereof.
16. MISCELLANEOUS PROVISIONS
16.1 ASSIGNMENT; CHANGE OF CONTROL.
(a) Neither party shall assign or otherwise transfer this Agreement or
any interest herein or right hereunder without the prior written consent of the
other party, and any such purported assignment, transfer or attempt to assign or
transfer any interest herein or right hereunder shall be void and of no effect,
except that without the prior written consent of NOVAVAX, KING may assign its
rights and obligations hereunder to an Affiliate. In the case of an assignment
in accordance with this Section 16.1, the assigning party shall remain
responsible for all of its obligations and agreements set forth herein,
notwithstanding such assignment and such transferee or successor shall assume in
writing the obligations of the party to which it is the transferee or successor.
Subject to the foregoing, this Agreement
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shall be binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
(b) NOVAVAX and KING acknowledge and agree that KING's obligations,
commitments (financial and otherwise) and investments pursuant to the terms
hereof and pursuant to various other commercial arrangements between KING and
NOVAVAX are based on the premise that (i) KING expects that it shall take
several years for the NOVAVAX Products to develop and mature to be viable and
economically profitable pharmaceutical products, and (ii) KING believes that the
best organizational and corporate structure to achieve these objectives is for
NOVAVAX to remain an independent biopharmaceutical company focused on the
research, development and commercialization of proprietary healthcare products
for women.
(c) Upon a Change of Control of NOVAVAX, KING may elect, in KING's
sole option, any or all of the following: (i) terminate all provisions of this
Agreement with respect to the KING Products, (ii) terminate all rights of
NOVAVAX to promote the NOVAVAX Products in the Territory pursuant to the terms
hereof or otherwise, or (iii) require NOVAVAX to (A) assign and transfer to KING
all rights of ownership to any governmental or regulatory applications or
approvals in the Territory issued or pending (including any correspondence with
respect thereto) with respect to any NOVAVAX Products and any trademarks in the
Territory with respect to any NOVAVAX Products, and (B) license to KING on an
exclusive and perpetual basis solely in the Territory all intellectual property
rights and Know How with respect to the NOVAVAX Products as may be necessary to
make, use, promote and sell the NOVAVAX Products in the Territory; provided,
however, if KING elects its rights under clause (ii) or (iii) above, KING will
pay NOVAVAX a royalty of seven and one-half percent (7.5%) of the Net Sales of
the NOVAVAX Products received by KING, and such royalty payment shall be subject
to commercial terms substantially similar to the terms of the Exclusive License
and Distribution Agreement dated as of the date hereof between KING and NOVAVAX.
(d) NOVAVAX acknowledges and agrees that the agreements contained in
this Section 16.1 are an integral part of the transactions contemplated in this
Agreement, and that, without these agreements, KING would not enter into this
Agreement and certain other commercial arrangements with NOVAVAX.
16.2 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
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16.3 NON-WAIVER.
The failure of either party to enforce or to exercise, at any time or
for any period of time, any term of or any right arising pursuant to this
Agreement does not constitute, and shall not be construed as, a waiver of such
term or right, and shall in no way affect that party's right later to enforce or
exercise such term or right.
16.4 ENTIRE AGREEMENT.
This Agreement and the Confidentiality Agreements contain all of the
terms agreed to by the parties regarding the subject matter of this Agreement
and supersede any prior agreements, understandings or arrangements between them,
whether oral or in writing. This Agreement may not be amended, modified, altered
or supplemented except by means of a written agreement or other instrument
executed by both of the parties hereto. No course of conduct or dealing between
the parties shall act as a modification or waiver of any provisions of this
Agreement.
16.5 JURISDICTION; VENUE.
(a) Each of NOVAVAX and KING hereby waives personal service of any
process upon it in connection with any suit, action or proceeding arising out of
or relating to this Agreement or the transactions contemplated hereby, and
hereby covenants and agrees that all such service of process may be made in the
manner set forth in Section 15 with the same effect as though served on it
personally.
(b) NOVAVAX hereby covenants and agrees that any suit, action or
proceeding initiated by the Company against KING, its affiliates, subsidiaries,
successors and/or assigns arising out of or relating to this Agreement or the
transactions contemplated hereby shall be brought exclusively in the federal
courts located in and/or state courts of the State of Tennessee. In the event of
any such suit, action or proceeding initiated by NOVAVAX, each of NOVAVAX and
KING hereby submit to the exclusive jurisdiction and venue of the federal courts
located in and state courts of the State of Tennessee and hereby waive any and
all objections based on jurisdiction or venue that such party may have under
applicable law or the Federal Rules of Civil Procedure. Each of the parties
hereby irrevocably designates CT Corporation in the State of Tennessee (the
"Tennessee Process Agent") as its designee, appointee and agent to receive, for
and on its behalf, service of process in the State of Tennessee in any such
suit, action or proceedings with respect to this Agreement and the transactions
contemplated hereby. Service on the Tennessee Process Agent shall be deemed
complete upon delivery thereof to the Tennessee Process Agent, provided that, in
the
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case of any such service upon the Tennessee Process Agent, the party effecting
such service shall also deliver a copy thereof to the other parties in
accordance with the notice provision set forth in Section 10.8. Each such party
shall take all such action as may be necessary to continue the appointment of
the Tennessee Process Agent in full force and effect or to appoint another
agent, who shall thereafter be referred to herein as the "Tennessee Process
Agent," so that each such party shall at all times have an agent for service for
the foregoing purposes in the State of Tennessee.
(c) KING hereby covenants and agrees that any suit, action or
proceeding initiated by KING against NOVAVAX, its affiliates, subsidiaries,
successors and/or assigns arising out of or relating to this Agreement or the
transactions contemplated hereby shall be brought exclusively in the federal
courts located in and/or state courts of the State of Maryland. In the event of
any such suit, action or proceeding initiated by KING, each of NOVAVAX and KING
hereby submit to the exclusive jurisdiction and venue of the federal courts
located in and state courts of the State of Maryland and hereby waive any and
all objections based on jurisdiction or venue that such party may have under
applicable law or the Federal Rules of Civil Procedure. Each of the foregoing
parties hereby irrevocably designates CT Corporation in the State of Maryland
(the "Maryland Process Agent"), as its designee, appointee and agent to receive,
for and on its behalf, service of process in the State of Maryland in any such
suit, action or proceedings with respect to this Agreement and the transactions
contemplated hereby. Service on the Maryland Process Agent shall be deemed
complete upon delivery thereof to the Maryland Process Agent, provided that in
the case of any such service upon the Maryland Process Agent, the party
effecting such service shall also deliver a copy thereof to the other parties in
accordance with the notice provision set forth in Section 15. Each such party
shall take all such action as may be necessary to continue the appointment of
the Maryland Process Agent in full force and effect or to appoint another agent,
who shall thereafter be referred to herein as the "Maryland Process Agent," so
that each such party shall at all times have an agent for service for the
foregoing purposes in the State of Maryland.
16.6 SEVERABILITY.
In the event that any of the provisions or a portion of any provision
of this Agreement are held to be invalid, illegal or unenforceable by a court of
competent jurisdiction or a governmental authority, such provision or portion of
provision shall be construed and enforced as if it had been narrowly drawn so as
not to be invalid, illegal or unenforceable and the validity, legality and
enforceability of the enforceable portion of any such provision and the
remaining provisions shall not be adversely affected thereby.
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16.7 RELATIONSHIP OF THE PARTIES.
The parties hereto are acting and performing as independent
contractors. Nothing in this Agreement creates the relationship of partnership,
joint venture, sales agency or principal and agent. Neither party is the agent
of the other, and neither party may hold itself out as such to any other party.
All financial obligations associated with each party's business shall be the
sole responsibility of such party.
16.8 PUBLIC ANNOUNCEMENTS.
The form and content of any public announcement to be made by one
party regarding this Agreement, or the subject matter contained herein, shall be
subject to the prior written consent of the other party (which consent shall not
be unreasonably withheld, delayed or conditioned), except as may be required by
applicable law (including, without limitation, disclosure requirements of the
SEC, NYSE, NASDAQ, AMEX or any other stock exchange) in which event the party
making the announcement shall endeavor to give the other party reasonable
advance notice and review of any such disclosure.
16.9 COUNTERPARTS.
This Agreement shall become binding when any one or more counterparts
hereof, individually or taken together, shall bear the signatures of each of the
parties hereto. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original as against the party whose signature
appears thereon, but all of which taken together shall constitute but one and
the same instrument.
16.10 FORCE MAJEURE.
Neither party shall be liable to the other party for any failure to
perform as required by this Agreement (other than the obligation to pay money)
if the failure to perform is due to circumstances reasonably beyond such party's
control including, without limitation, acts of God, civil disorders or
commotions, acts of aggression, fire, explosions, floods, drought, war,
sabotage, embargo, utility failures, material shortages, labor disturbances, a
national health emergency, or appropriations of property. A party whose
performance is affected by a force majeure event shall take prompt action using
its reasonable best efforts to remedy the effects of the force majeure event.
16.11 INTERPRETATION.
The parties hereto acknowledge and agree that: (a) each party and its
representatives have reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision; and (b) the terms and provisions
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of this Agreement shall be construed fairly as to each party hereto and not in
favor of or against either party regardless of which party was generally
responsible for the preparation or drafting of this Agreement.
16.12 CERTAIN EXPENSES AND COMMISSIONS.
Except as otherwise expressly set forth in this Agreement, the
parties hereto shall each pay all their costs and expenses, including legal and
accounting fees, incurred in connection with the preparation, negotiation,
execution and delivery of this Agreement, respective brokerage fees, commissions
and finder's fees, if any, and shall indemnify and hold the other harmless from
and against any and all other claims or liabilities for such costs and expenses,
brokerage fees, commissions and finder's fees incurred by reason of any action
taken by any such party.
16.13 THIRD PARTY BENEFICIARIES.
This Agreement is not intended to confer upon any non-party rights or
remedies hereunder, except as may be received or created as part of a valid
assignment.
16.14 COVENANT NOT TO PROMOTE COMPETING PRODUCT.
NOVAVAX shall not (or assist any third party to) manufacture, market,
sell, or promote any product directly competitive with any of the Copromote
Products during the Term of this Agreement, except in connection with the
performance of its obligations under this Agreement and except for the
manufacture, marketing, sale, or promotion of Gynodiol.
16.15 HEADINGS.
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
SIGNATURE PAGES FOLLOW
47
52
IN WITNESS WHEREOF, the parties have duly executed this Copromotion
Agreement as of the first date written above.
KING PHARMACEUTICALS, INC.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice Chairman -- Strategic Planning
-----------------------------------
NOVAVAX, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: President and CEO
-----------------------------------
48
53
ANNEX I
DEFINITIONS
"ACT" shall mean the United States Federal Food, Drug and
Cosmetic Act, as it may be amended from time to time.
"ADDITIONAL EXCLUSIVITY RIGHTS" shall have the meaning set forth
in Section 11.1(b).
"AFFILIATE(S)" shall mean, with respect to any Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, such Person. A
Person shall be regarded as in control of another Person if such Person owns, or
directly or indirectly controls, more than fifty percent (50%) of the voting
securities (or comparable equity interests) or other ownership interests of the
other Person, or if such Person directly or indirectly possesses the power to
direct or cause the direction of the management or policies of the other Person,
whether through the ownership of voting securities, by contract or any other
means whatsoever, provided, however, that, for purposes of this Agreement, the
term "Affiliate" shall not include subsidiaries in which a party or its
Affiliates owns a majority of the ordinary voting power to elect a majority of
the Board of Directors, but is restricted from electing such majority by
contract or otherwise, until such time as such restrictions are no longer in
effect.
"AGREEMENT" shall mean this Agreement, together with all
appendices, exhibits and schedules referenced herein or attached hereto, and as
the same may be amended or supplemented from time to time hereafter pursuant to
the provisions hereof.
"AGREEMENT QUARTER" shall mean each three (3) month period
commencing on the first (1st) day of January, April, July or October, as the
case may be, during the Term.
"AUDITED PARTY" shall have the meaning set forth in Section
10.2(a).
"AUDITING PARTY" shall have the meaning set forth in Section
10.2(a).
"BASELINE" shall have the meaning set forth in Exhibit 9.1(b).
"BUDGET(S)" shall mean the annual budget of Net Sales and
Marketing Expenses prepared and approved by the PMC in accordance with this
Agreement.
54
"CHANGE OF CONTROL" shall mean any sale of voting securities or
sale of assets (whether by sale, merger, consolidation, share exchange or
otherwise in one transaction or a series of transactions) in or by a party
hereto that, directly or indirectly, results in any third party becoming the
beneficial owner, directly or indirectly, of securities or assets of such first
party representing over fifty percent (50%) of the combined voting power of such
Person's then outstanding securities or over fifty percent (50%) of such first
party's total assets.
"COMMERCIALLY REASONABLE EFFORTS" shall mean efforts and
resources normally used by a party for a product owned by it or to which it has
rights, which is of similar market potential at a similar state in its
development or product life, taking into account issues of safety, efficacy,
product profile, the competitiveness of the marketplace, the proprietary
position of the product, the regulatory structure involved, the profitability of
the applicable products, and other relevant commercial factors.
"CONFIDENTIALITY AGREEMENTS" shall have the meaning set forth in
Section 12.1(b).
"CONFIDENTIAL OR PROPRIETARY INFORMATION" shall have the meaning
set forth in 12.1(a).
"COPROMOTE PRODUCTS" shall mean collectively the KING Products
and the NOVAVAX Products.
"CURRENT GOOD MANUFACTURING PRACTICES" shall mean the current
standards for the manufacture of biologicals, as set forth in the Act and
applicable regulations and guidelines promulgated thereunder or successors
thereto, as shall be in effect from time to time during the Term.
"DETAIL(S)" or "DETAILING" shall mean a face-to-face contact
by a sales representative with an OB/GYN during which time the promotional
message involving the Copromote Products is a primary topic of discussion and
the product discussed for either the longest period of time during the contact
or, at a minimum, discussed no less than the second longest period of time
during the contact.
"DETAIL COST" shall be the cost per Detail to be established by
the PMC each year and included in the Marketing Plan for such year.
"DIRECT COST" shall mean all reasonable out-of-pocket costs other
than direct sales force expenses directly attributable to an activity (i.e.,
those costs which vary with such activity), including, but not limited to,
direct labor for such activity and consumable bulk and other materials, as
determined in
ANNEX I - 2
55
accordance with generally accepted cost accounting practices in the country of
the activity, but without any allocation for fixed overhead costs allocable to
the activity, including, but not limited to, direct benefit and labor expenses
for technical services and support services, depreciation, maintenance and
repairs and insurance costs associated with such activity.
"EFFECTIVE DATE" shall have the meaning set forth in the PREAMBLE
of this Agreement.
"ESTRASORB" shall mean the product described in Phase III
Clinical Study.
"EXCESS DETAILS" shall have the meaning set forth in Section 9.5.
"EXTENDED PROMOTION TERM" shall have the meaning set forth in
Section 11.1(c).
"FDA" shall mean the United States Food and Drug Administration
or any successor entity thereto.
"GAAP" shall mean United States generally accepted accounting
principles.
"INCREMENTAL COSTS" shall mean an amount equal to (i) the ratio
of Net Costs for any given quarter to Net Sales for such quarter, multiplied by
(ii) Incremental Sales for such quarter.
"INCREMENTAL SALES" shall mean Net Sales for a given quarter
minus the applicable "Baseline" for such quarter, as set forth on Exhibit
9.1(b).
"INDEMNITEE" shall have the meaning set forth in Section 13.3.
"INDEMNITOR" shall have the meaning set forth in Section 13.3.
"INITIAL TERM" shall have the meaning set forth in Section
11.1(a).
"KING" shall have the meaning set forth in the PREAMBLE of this
Agreement.
"KING DETAIL REPORT" shall have the meaning set forth in Section
3.3(c).
"KING GUIDELINES" shall have the meaning set forth in Section
2.3(c).
ANNEX I - 3
56
"KING PRODUCT INITIATION DATE" shall mean the first business
day of the month immediately following the date on which NOVAVAX provides
written notice to KING that NOVAVAX wishes to commence marketing and promotion
of the KING Products pursuant to this Agreement; provided, however, that in no
case shall the King Product Initiation Date be fewer than twenty (20) days
following the date on which NOVAVAX provides such notice.
"KING PRODUCT RIGHTS" shall have the meaning set forth in Section
14.1(d).
"KING PRODUCT TECHNICAL COMPLAINTS" shall mean any complaint that
questions the purity, identity, potency or quality of the KING Products, its
packaging or labeling, the compliance of any batch of the KING Products with
applicable laws, including the Act, or any complaint that concerns any incident
that causes the KING Products or their labeling to be mistaken for, or applied
to, another article or any bacteriological contamination, or any significant
chemical, physical, or other change or deterioration in the KING Products, or
any failure of one or more batches of the KING Products to meet the
specifications therefor in the NDA.
"KING PRODUCTS" shall mean NORDETTE(R).
"KING TRADEMARK" shall mean the federally registered trademark
NORDETTE(R), and any other related trademark or servicemark containing the word
"NORDETTE", and any other trademark or service ▇▇▇▇ (whether registered or
unregistered) that KING uses on or with any of the KING Products or in any
promotional material related to any of the KING Products.
"KNOW-HOW" shall mean all tangible and intangible technical
and other information including, but not limited to ideas, conceptions,
reductions-to-practice, discoveries, data, designs, chemical structures,
formulae, materials, intermediates, inventions (whether patentable or not),
methods, models, prototypes, samples, works (whether copyrightable or not),
assays, research plans, procedures, designs, experiments, tests, results of
experimentation and testing (including results of research or development),
processes (including manufacturing processes, uses, specifications and
techniques), laboratory records, note books, chemical, pharmacological,
toxicological, clinical, analytical and quality control data, trial data, case
report forms, data analyses, reports, manufacturing data, summaries and
information contained in submissions to and from ethical committees and
regulatory authorities, which relates to or concerns a Copromote Product.
Know-How includes all documents and copies thereof (whether in written,
machine-readable, physical or graphic form) and other things (such as
prototypes,
ANNEX I - 4
57
materials, samples, models, etc.) which contain, embody or refer to the
Know-How. Such information, documents or things will not be excluded from being
Know-How hereunder by reason of the fact that they become available to the
public only through a wrongful act or omission to act of a party hereto or a
sublicensee or distributor of a party hereto. The fact that an item is known to
the public shall not be taken to exclude the possibility that a compilation
including the item, and/or a development relating to the item, is (and remains)
not known to the public. Know-How includes, but is not limited to, any and all
rights that protect the Know-how, such as copyrights software, rights, trade
secret rights, database rights and/or design rights.
"KP CONSIDERATION FEE" shall have the meaning set forth in
Section 9.1(b).
"MARKETING EXPENSES" shall mean the costs and expenses directly
related to the marketing and promotion of the Copromote Products in the
Territory in accordance with the Marketing Plans, including without limitation
costs and expense relating to: (i) general advertising, including without
limitation journal advertising, direct mail and point of prescription
advertising; (ii) continuing medical education programs, (iii) market research;
(iv) the Direct Costs of samples of the Copromote Products; (v) Copromote
Product-related publications and (vi) trade shows and conventions.
"MARKETING MATERIALS" shall have the meaning set forth in Section
5.2(a).
"MARKETING PLAN" shall mean an annual plan and budget for the
promotion and marketing of the Copromote Products as developed pursuant to
Section 8.5.
"MINIMUM TARGETED DETAILS" shall have the meaning set forth in
Section 9.5.
"MODEL CLAIMS" shall mean final approval by the FDA of
Estrasorb(TM) as an estrogen hormone replacement therapy prescription product.
"NDA" shall mean the new drug applications related to the
Copromote Products, submitted to the FDA pursuant to provisions of the Act and
applicable regulations related thereto.
"NET COSTS" shall mean costs of goods sold in accordance with
GAAP, less Marketing Expenses.
ANNEX I - 5
58
"NET SALES" shall mean all gross revenue actually received by
a party from sales of any Copromote Products, less (a) credits for refunds and
returns, (b) sales, use and similar taxes billed by such party to its customers
and required to be paid to the appropriate taxing authorities by such party; (c)
discounts, allowances and commissions paid or allowed by a party on sales of
such Copromote Products, and (c) amounts paid by such party and billed through
to such party's customers for insurance, shipping and similar charges.
"NON-SERIOUS ADVERSE EVENT" shall mean any adverse drug
experience associated with the use of the Copromote Products in humans, whether
or not considered drug related which is not a Serious Adverse Event.
"NOTE PURCHASE AGREEMENT" shall have the meaning set forth in
Section 9.2.
"NOVAVAX" shall have the meaning set forth in the PREAMBLE.
"NOVAVAX DETAIL REPORT" shall have the meaning set forth in
Section 4.3(c).
"NOVAVAX GUIDELINES" shall have the meaning set forth in Section
2.3(c).
"NOVAVAX PRODUCT" shall mean ESTRASORB(TM) and, subject to
Section 8.6 hereof, any hormone replacement therapy pharmaceutical product
marketed in the field of women's health including or using technology or Know
How derived from to ESTRASORB(TM), including but not limited to products
containing a combination of a NOVAVAX Product and another pharmaceutical
product; provided that NOVAVAX Product shall specifically exclude any
pharmaceutical or related products owned by NOVAVAX as a direct result of the
consummation of the Fielding Acquisition Agreement (as defined in the Note
Purchase Agreement).
"NOVAVAX PRODUCT INITIATION DATE" shall mean the date on which
the FDA provides written approval of the NDA for ESTRASORB(TM).
"NOVAVAX PRODUCT RIGHTS" shall have the meaning set forth in
Section 14.2(d).
"NOVAVAX PRODUCT TECHNICAL COMPLAINTS" shall mean any complaint
that questions the purity, identity, potency or quality of the NOVAVAX Products,
its packaging or labeling, the compliance of any batch of the NOVAVAX Products
with applicable laws, including the Act, or any complaint that concerns any
incident that causes the NOVAVAX Products or their labeling to be mistaken
ANNEX I - 6
59
for, or applied to, another article or any bacteriological contamination, or any
significant chemical, physical, or other change or deterioration in the NOVAVAX
Products, or any failure of one or more batches of the NOVAVAX Products to meet
the specifications therefor in the NDA.
"NOVAVAX TRADEMARK" shall mean the federally registered
trademark ESTRASORB(TM), and any other related trademark or servicemark
containing the word "ESTRASORB", and any other trademark or service ▇▇▇▇
(whether registered or unregistered) that NOVAVAX decides to use on or with the
NOVAVAX Products or in any promotional material related to any of the NOVAVAX
Products.
"NP CONSIDERATION FEE" shall have the meaning set forth in
Section 9.1(a).
"OB/GYN" shall have the meaning set forth in the PREAMBLE of
the Agreement in each case who are authorized by applicable law to prescribe the
Copromote Products.
"PDMA" shall mean the Prescription Drug Marketing Act, as
amended, an the implementing rules and regulations thereunder.
"PERSON" shall mean an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority, or any other form of entity not
specifically listed herein.
"PRIMARY BRAND TRADEMARK" shall have the meaning set forth in
Section 2.3(d).
"PRODUCT MANAGEMENT COMMITTEE" or "PMC" shall have the meaning
set forth in Section 8.1.
"PRODUCT TECHNICAL COMPLAINTS" shall mean any complaint that
questions the purity, identity, potency or quality of the Copromote Products,
its packaging or labeling, the compliance of any batch of the Copromote Products
with applicable laws, including the Act, or any complaint that concerns any
incident that causes the Copromote Products or their labeling to be mistaken
for, or applied to, another article or any bacteriological contamination, or any
significant chemical, physical, or other change or deterioration in the
Copromote Products, or any failure of one or more batches of the Copromote
Products to meet the specifications therefor in the NDA.
ANNEX I - 7
60
"RESIDUAL PAYMENTS" shall have the meaning set forth in Section
9.3.
"SERIOUS ADVERSE EVENT" shall mean any serious and unexpected
adverse drug experience, as defined by FDA in 21 C.F.R. ss. 314.80, associated
with the use of the drug in humans, whether or not considered drug related.
"SOP" shall have the meaning set forth in Section 7.4.
"TERM" shall have the meaning set forth in Section 11.1(a).
"TERRITORY" shall mean the United States, its territories and
possessions, the District of Columbia and the Commonwealth of Puerto Rico.
"TRADEMARKS" shall mean collectively the KING Trademarks and the
NOVAVAX Trademarks.
ANNEX I - 8
61
EXHIBIT 2.3(A)
TRADEMARKS
KING:
KING Logo
Monarch Logo
NOVAVAX:
NOVAVAX Logo
i
62
EXHIBIT 2.3(D)
PRIMARY BRAND TRADEMARKS
ESTRASORB(TM)
NORDETTE(R)
ii
63
EXHIBIT 9.1
CONSIDERATION FEE SAMPLE CALCULATION
I. NP CONSIDERATION FEE (CALCULATED AND PAID ON A QUARTERLY BASIS)
NP Consideration Fee to be paid to King at follows:
(50% of the Net Sales Estrasorb(TM)in the Territory) MINUS (50% of the
Net Costs of Estrasorb(TM) in the Territory)*
*Novavax is solely responsible for Net Costs in excess of 17% of Net
Sales.
EXAMPLE A:
Quarterly Net Sales of Estrasorb(TM) in the Territory = $10,000,000
Quarterly Net Costs of Estrasorb(TM) in the Territory = $1,500,000
(50%)($10,000,000) = $5,000,000
(50%)($1,500,000) = $750,000
NP Consideration Fee = $5,000,000 - $750,000
NP CONSIDERATION FEE = $4,250,000
EXAMPLE B:
Quarterly Net Sales of Estrasorb(TM) in the Territory = $10,000,000
Quarterly Net Costs of Estrasorb(TM) in the Territory = $2,000,000
(50%)($10,000,000) = $5,000,000
(17%)($10,000,000) = $1,700,000 (thus Novavax is responsible for all
costs in excess of $1,700,000)
(50%)($1,700,000) = $850,000
NP Consideration Fee = $5,000,000 - $850,000
NP CONSIDERATION FEE = $4,150,000
iii
64
II. KP CONSIDERATION FEE (CALCULATED AND PAID ON A QUARTERLY BASIS)
KP Consideration fee to be paid to Novavax as follows:
50% of Incremental Sales of Nordette(R) in the Territory MINUS 50% of
Incremental Costs of Nordette(R) in the Territory.
Incremental Sales = Quarterly Net Sales of Nordette(R) in the Territory
MINUS "Baseline" Net Sales.
Incremental Costs = (Ratio of Quarterly Net Costs of Nordette(R) in the
Territory to Quarterly Net Sales of Nordette(R) in the Territory) X
(Incremental Sales)
EXAMPLE:
Quarterly Net Sales of Nordette(R) in the Territory = $10,000,000
"Baseline" Net Sales of Nordette(R) in the Territory = $8,000,000
Quarterly Net Costs of Nordette(R) in the Territory = $2,000,000
Incremental Sales = $10,000,000 MINUS $8,000,000 = $2,000,000
Incremental Costs = (20%)($2,000,000) = $400,000
KP Consideration Fee = (50%)($2,000,000) MINUS (50%)($400,000)
KP Consideration Fee = $1,000,000 MINUS $200,000
KP CONSIDERATION FEE = $800,000
iv
65
EXHIBIT 9.1(B)
BASELINES FOR CALCULATING INCREMENTAL SALES
NORDETTE(R)
--------------------------------------------------------------------------------
QUARTER BASELINE
--------------------------------------------------------------------------------
1Q (January 1--March 31) $6,400,000
--------------------------------------------------------------------------------
2Q (April 1--June 30) $7,500,000
--------------------------------------------------------------------------------
3Q (July 1--September 30) $8,000,000
--------------------------------------------------------------------------------
4Q (October 1--December 31) $8,100,000
--------------------------------------------------------------------------------
v
