Exhibit 10.58
CONFIDENTIAL TREATMENT REQUESTED
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CO-PROMOTION AGREEMENT
This Agreement ("Agreement") is made and effective as of the 1st day of July,
1999, (hereinafter referred to as the "Effective Date"), by and between Bayer
Corporation, a corporation of the State of Indiana (hereinafter "Bayer") and
Schein Pharmaceutical, Inc. a corporation of the State of Delaware (hereinafter
"Schein").
W I T N E S S E T H:
WHEREAS, Schein has an exclusive Sublicense, Co-Marketing and Supply
Agreement with ▇▇▇▇▇▇ R&D Laboratories Inc. covering a sodium ferric gluconate
complex in sucrose injection pharmaceutical product marketed by Schein under the
brand name Ferrlecit(R) (hereinafter "Product") indicated for treating iron
deficiency, and Schein desires to enhance market share of Product in the United
States pharmaceutical market place; and
WHEREAS, Bayer has considerable knowledge in promoting, detailing and
marketing pharmaceutical products in the United States and has in place a large,
well-experienced detailing force; and
WHEREAS, Bayer and Schein believe that a joint promotion and detailing
arrangement regarding Product would be desirable and fully compatible with each
party's business objectives.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, Bayer and Schein hereby agree as follows:
1. ARTICLE I: DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following meanings:
1.1. "Affiliate" shall mean:
(a) An organization which owns, directly or indirectly, a controlling
interest in Bayer or Schein by stock ownership or otherwise; or
(b) An organization controlled by or having its majority ownership
directly or indirectly common to the majority ownership of Bayer or
Schein.
1.2. "Confidential Information" shall mean information which relates to the
Product, including financial statements, costs and expense data,
production data, trade secrets, secret processes and formulae, marketing
and consumer data or any other information which is not generally
ascertainable from public or published information, regardless of
whether such information was provided pursuant to the terms of this
Agreement, by request of the other party or in any other manner. Schein
reserves the right to limit the disclosure to Bayer of any Confidential
Information which, in the sole opinion of Schein, is not necessary to
achieve the purposes of this Agreement.
1.3. "Customer" shall mean hospitals, dialysis clinics affiliated with
hospitals, clinical pharmacists, nephrology nurses, nephrologists including
residents & fellows and pharmaceutical & therapeutic committee members.
1.4. "DDD" shall mean IMS America Ltd. Drug Distribution Data.
1.5. Joint Detailing Period" shall mean the period of time commencing on July 1,
1999 and ending on February 28, 2000, subject to extension as provided in
Article VI, below.
1.6. "Product" shall mean sodium ferric gluconate Ferrlecit(R).
1.7. "Territory" shall mean the United States of America
excluding its territories and possessions.
1.8. In the terms defined herein, the singular shall include the plural and VICE
VERSA.
2. ARTICLE II: GRANTS AND OBLIGATIONS
2.1. Grant of Rights. Schein hereby grants to Bayer during the Joint Detailing
Period the right to promote and detail the Product to Customers in the
Territory jointly with Schein in accordance with the provisions of this
Agreement.
2.2. Obligations of Bayer.
(a) During the Joint Detailing Period, Bayer will be diligent in its
efforts consistent with its customary business practices and legal
requirements to deploy its sales force to promote and detail to
Customers throughout the Territory the Product in such manner and with
such expedition as Bayer itself would have adopted in promoting and
detailing a pharmaceutical product of its own invention. During the
Joint Detailing Period and for a period of one (1) year thereafter,
Bayer will not promote or detail any pharmaceutical product with
indications similar to those of the Product.
(b) The Product will be presented in a primary position in at least *
percent (*) of Bayer's sales representative calls to dialysis
centers and nephrologists and in no less than a secondary position
in the remainder of such calls.
(c) Without limiting the generality of the foregoing, Bayer will assign
no fewer than * biological sales representatives and managers to
promote and detail the Product to Customers. Bayer shall also use
its best efforts to insure a sufficient amount of selling time will
be allotted to promote and detail the Product, but in all events
not less than between *-* of such representatives sales time and *
of a representative's bonus potential will be allocated to the
Product.
2.3. Obligations of Schein
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been filed separately with the Securities and
Exchange Commission.
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(a) During the Joint Detailing Period, Schein will be diligent in its
efforts consistent with its customary business practice and legal
requirements to deploy its sales force to promote and detail the
Product throughout the Territory to prospective prescribers or users
of the Product other than Customers.
(b) During the Joint Detailing Period, Schein will furnish to Bayer, at
Schein's expense, all sales, training, marketing and promotional
materials made available by Schein for use by its sales
representatives, at such time or times as such materials are available
for distribution to Schein's sales representatives and in such
quantities as Bayer may reasonably request for use in detailing by its
sales representatives.
(c) Schein will reimburse Bayer for all out-of-pocket expenses incurred by
Bayer in sponsoring, producing or participating in promotional,
scientific or educational programs, conventions or forums undertaken
at the request of or with the prior written approval of Schein.
(d) Subject to Bayer's obligation of confidentiality set forth herein,
once per calender year during normal business hours and upon
reasonable prior written notice, Schein agrees to make available to
Bayer or its agent or representative (subject to such representative
or agent being reasonably acceptable to Schein and subject further to
such representative or agent signing a confidentiality undertaking)
such information in its possession as may permit Bayer to confirm, for
all proper purposes contemplated by this Agreement, sales, returns and
market share, including without limitation production, quality
assurance/quality control, inventory, orders, sales, deliveries and
return records with respect to the Product.
3. ARTICLE III: PAYMENTS
3.1. Service Fee. In consideration for Bayer's agreement to promote and
detail the Product to Customers in the Territory during the Joint
Detailing Period, Schein shall pay to Bayer a service fee at the rate of
* for each three month period of the Joint Detailing Period, with the
first three month period beginning on July 1, 1999; provided, however,
that the service fee for the two month period ending February 28, 2000,
will be a pro-rated share of the * per quarter or *. The service fee
will be due thirty (30) days after the end of each three month period
or, with respect to the service fee payment for the two month period
ending February 28, 2000, thirty (30) days after expiration of the
initial term of Joint Detailing Period, without regard to any extension
thereof.
3.2. Sales Commissions. For the initial Joint Detailing Period ending February
28, 2000, Schein shall pay to Bayer amounts equal to the following
percentages of sales of Product to Customers in the Territory by Bayer as
reported by DDD:
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* Material omitted pursuant to a request for confidential treatment. The
omitted material has been filed separately with the Securities and
Exchange Commission.
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DDD Reported Sales Commissions
------------------ -----------
Up to * *
Sales in excess of * but
not in excess of * *
Sales in excess of * *
A sample calculation of sales commissions is contained in Exhibit A to this
Agreement.
In the event that Bayer has reason to believe that sales of Product to
Customers in the Territory has been under-reported by DDD, Schein shall pay
Bayer commission on such additional sales as if such sales had been
reported by DDD provided, if in Schein's sole determination Bayer can
substantiate such additional sales with a reasonable amount of independent
proof.
3.3. All sums due to Bayer shall be payable to Bayer in U.S. dollars by Schein
at the following address:
Bayer Inc.
Pharmaceutical Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or at such other address within the United States that Bayer may designate
in writing to Schein.
3.4. EXTENSION OF JOINT DETAILING PERIOD. In the event the Joint Detailing
Period is extended in accordance with Article VI, hereof, the parties agree
to negotiate in good faith any appropriate adjustment to baseline sales
figures and commission payout levels within thirty (30) days of the
commencement of any extension period.
3.5. PAYMENT OF COMMISSIONS. Within ninety (90) days after the close of each
quarter during the Joint Detailing Period, Schein shall remit to Bayer all
commissions accruing under this Article during such quarter. The payment
shall be accompanied by the DDD report for such Product sales both as to
aggregate quantities and dollar amounts of such sales of the Product
reported by DDD subject to payments hereunder for such quarter.
4. ARTICLE IV: COOPERATION, RIGHTS AND RESPONSIBILITIES
4.1. COOPERATION OF PARTIES. It is among the objectives of the parties to
jointly promote and detail the Product to Customers in the Territory in the
most effective and efficient fashion during the Joint Detailing Period. To
achieve this objective, the parties agree, during the
----------
* Material omitted pursuant to a request for confidential treatment. The
omitted material has been filed separately with the Securities and
Exchange Commission.
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Joint Detailing Period, as follows:
(a) The parties shall each appoint an authorized representative
("Coordinator") between whom communications will be directed. Each
party will notify the other as to the name of the individual so
appointed. Each party may replace its Coordinator at any time, upon
written notice to the other party.
(b) The Coordinators shall establish a team ("Team") directed by the
Coordinators and consisting of representatives of each party which
will meet from time to time, at mutually agreeable times and
locations, to discuss and coordinate the joint promotion and
detailing of the Product in the Territory and the strategies and
programs that should be developed to maximize sales of the Product.
Illustratively, the Team shall guide all continuing joint promotion
and detailing efforts with respect to the Product in the Territory.
Notwithstanding the foregoing, Schein will have the final authority
and responsibility, with the cooperation and assistance of Bayer,
for developing detailing, marketing and promotional strategies and
other matters with respect to the Product, and Schein shall have
the final right of approval for all such strategies and other
matters.
(c) From time to time, but in no event less than once a year, the Team
shall develop and formulate joint marketing plans for specified
periods (collectively the "Marketing Plan") which shall set forth
detailing, promotion and marketing strategies relating to the Product.
The marketing planning process shall be a joint effort under the
leadership and authority of Schein. The provisions of the Marketing
Plan shall be agreed to by the Coordinators, and if the Coordinators
cannot agree, then the matters in dispute shall be referred to the
President of Bayer Pharmaceutical Division and the Chairman of Schein.
Schein, however, shall have the final responsibility for, and control
over, and the final right of approval for, the development and content
of the Marketing Plan. Schein retains the right to determine in its
discretion the appropriate manner and timing of execution of all
marketing and promotional plans and strategies, including without
limitation the selection of ad agencies, the development and
production of promotional materials.
(d) A party shall have the right to comment upon and make recommendations
to the other party regarding the other party's activities under this
Agreement, which recommendations the other party shall thoroughly
evaluate and consider.
(e) Each party shall bear its own costs associated with its participation
in the Team and associated with its detailing, marketing, promotional
and training/launch activities under this Agreement, except as
otherwise provided herein.
4.2. During the Joint Detailing Period and subject to any other provision of
this Agreement, each party will provide the other with all information
which the disclosing party deems significant and relevant to the
detailing and promotion of the Product within a reasonable
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time after such information becomes known to the party, provided such
information is not received under a secrecy obligation. Within thirty
(30) days after the close of each quarter during the Joint Detailing
Period, Bayer will provide to Schein a report of Bayer Product detail
call activity by medical specialty for the quarter then ended, along
with a summary of feedback from Bayer sales representatives concerning
their detailing efforts for that quarter.
4.3. During the Joint Detailing Period, each party shall promptly notify the
other party of all information coming into its possession concerning
unexpected side effects, injury, toxicity or sensitivity reactions as
provided in Appendix I hereto.
4.4. Schein shall retain all proprietary and property interests in the Product
until the point of sale and in all supporting sales and promotional
material. Bayer will not have nor represent that it has any control or
proprietary or property interests in the Product or in any sales or
promotional material. Nothing contained herein shall be deemed to ▇▇▇▇▇
▇▇▇▇▇, either expressly or impliedly, a license or other right or interest
in any patent, trademark or other similar property of Schein or its
Affiliates except as may be necessary for Bayer to promote and detail the
Product as provided in this Agreement. Bayer acknowledges that Schein shall
retain all copyrights in and to all sales, promotional and training
materials created or used in connection with the promotion of the Product.
4.5. Bayer shall not be required to distribute any sales and promotional
material which:
(a) does not mention the Product; or
(b) includes reference to another Schein pharmaceutical in addition to the
Product. At Schein's request and at Bayer's sole option, Bayer may
distribute sales and promotion material of the type identified in this
subsection. Should Bayer elect to distribute such material, it shall
be supplied to Bayer by Schein free of all charge.
4.6. Schein shall not be required to distribute any sales and promotion material
which contains a reference:
(a) to Bayer (other than in connection with the joint detailing and
promotion of the Product in accordance with this Agreement); or
(b) any Bayer pharmaceutical.
4.7 During the Joint Detailing Period, Schein shall also provide Bayer, at
Schein's cost, with reasonable quantities of training materials which have
been created and developed by Schein relating to the Product. Bayer shall
have the responsibility for, and control over, the manner in which it
trains its sales force with guidance from Schein that the training is
consistent with Schein's sales force training with respect to the Product.
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4.8 In implementing the obligations contained in Article II, each party shall
have sole discretion as to the manner (which shall not be inconsistent with
the Marketing Plan, and provided that Bayer will not utilize any
promotional materials not created by Schein) in which it promotes and
details (including any expenditure of funds in connection therewith) the
Product in the Territory. Each party shall bear its own costs incurred in
the performance of any obligations hereunder, subject to the provisions of
Article III. Neither party shall have any responsibility for the hiring,
firing or compensation of the other party's employees or for any
employee benefits. No employee or representative of a party shall have
any authority to bind or obligate the other party to this Agreement for
any sum or in any manner whatsoever, or to create or impose any
contractual or other liability on the other party without said party's
authorized written approval. For all purposes, and notwithstanding any
other provisions of this Agreement to the contrary Bayer's legal
relationship under this Agreement to Schein shall be that of independent
contractor. Each party shall be responsible for ensuring that its
promotional activities under this Agreement are in full compliance with
all applicable laws, rules, regulations and orders, including without
limitation applicable FDA regulations, and are consistent with the
Product approval and package insert. Notwithstanding the foregoing,
Schein shall be solely responsible for ensuring that all sales,
training, marketing and promotional materials furnished by Schein to
Bayer are in such full compliance.
4.9 Schein shall use commercially reasonable efforts consistent with Schein's
overall business strategy, as determined by Schein, to insure that
sufficient stock of the Product will be available in its inventory to
promptly fill orders procured by Bayer from Customers during the Joint
Detailing Period for sales of the Product in the Territory. In the event
that there is an insufficient stock of Product available to fill all orders
so procured by Bayer, Schein will use commercially reasonable efforts to
equitably allocate available Product stock among all orders received by
Schein, whether such orders originated from Bayer Customers or from
customers of Schein. Notwithstanding the foregoing, all orders for Products
are subject to acceptance by Schein, in whole or in part.
4.10 Prior to or upon the signing of this Agreement and at least thirty (30)
days prior to each calendar quarter during the Joint Detailing Period and
any extension thereof, Bayer and Schein will confer to establish a forecast
of anticipated sales of Product by month for the succeeding twelve (12)
month period. Such forecasts shall be made to assist Schein in planning its
Product production and shall be non-binding.
4.11 Neither party shall distribute or have distributed any such information
which bears the name of the other without the prior written approval of the
other, which approval shall not be unreasonably withheld. Nothing herein
contained shall require the Bayer name or logo to appear on the Product's
label, container label or package insert.
4.12 Each party, at its option, may issue press releases or other public
announcements relating to the Product or the arrangement contemplated by
this Agreement, provided, however, that:
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(a) neither party shall issue a press release or public announcement which
has, as a major focus, either the joint detailing and promotion of the
Product in the Territory or such arrangement, without the prior
written approval of the other party, which approval shall not be
unreasonably withheld; and
(b) all other press releases and public announcements will describe the
Product and the arrangement contemplated by this Agreement in a manner
consistent with those releases and announcements previously approved
by the other party.
4.13 Subject to Bayer's indemnification obligations confirmed in Section 5.5
hereof, Schein shall have the sole right and responsibility for, and shall
bear all costs related to, obtaining and maintaining the authorization
and/or ability to market a pharmaceutical product in the Territory in
accordance with the terms of its Agreement with ▇▇▇▇▇▇ R&D Laboratories
Inc. and applicable laws and regulations including, without limitation, the
following:
(a) RESPONSE TO PRODUCT COMPLAINTS AND/OR ADVERSE EVENTS THAT ARE REPORTED
WITH RESPECT TO THE PRODUCT. Bayer agrees that it shall refer any such
complaints which it receives to Schein in accordance with Appendix I
hereto;
(b) ALL PRODUCT RETURNS MUST BE AUTHORIZED BY SCHEIN. Bayer shall not
solicit or accept any returns of Product and shall advise the customer
that Product is to be returned to Schein. If despite the foregoing any
Product is returned to Bayer, then it shall be shipped to Schein's
nearest distribution facility or, at Schein's option, may be handled
through the One Box return system.
(c) HANDLING ALL RECALLS OF THE PRODUCT. At Schein's request and Bayer's
option, Bayer will assist Schein in receiving the recalled Product and
any direct documented costs incurred by Bayer with respect to
participating in such recall shall be reimbursed by Schein.
4.14 Each party shall respond to medical questions or inquiries relating to the
Product directed to such party. Within a reasonable time from the date of
this Agreement, Schein shall provide Bayer with all reasonably necessary
information which would enable Bayer to respond properly and promptly to
any such questions or inquiries. Schein shall use its best efforts to keep
such information current. Schein and Bayer shall coordinate responses to
anticipated inquiries and questions. Each party shall be responsible for
ensuring that its responses are in full compliance with all applicable
laws, rules, regulations and orders, including without limitation
applicable FDA regulations, and are consistent with the Product approval
and package insert.
4.15 Bayer shall furnish Schein with a bi-weekly report highlighting medical
information inquiries and responses that will provide detail on:
Customer Name
Customer Title
Customer Address
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Customer Phone #
Inquiry/Reason for Call
Response submitted
Date of Inquiry
Date of Response
This report shall be forwarded to the Director of Professional Affairs at
Schein, or designee.
4.16 Notwithstanding the Marketing Plan or any other provision herein to the
contrary, Schein will have the right and responsibility for establishing
and modifying the terms and conditions with respect to the sale of the
Product, including the price at which the Product will be sold, any
discount attributable to payments on receivables, distribution of the
Product and the like.
4.17 At the end of the Joint Detailing Period (or any extension thereof or upon
termination under any circumstance) Bayer shall have no further obligations
to promote and detail the Product and, upon request by Schein, shall return
to Schein all sales, marketing, training and other materials which it has
in its possession relating to Product. Schein shall have the right to
continue to distribute materials bearing the Bayer name, until the
inventories of such materials are depleted.
5. ARTICLE V: WARRANTIES AND INDEMNIFICATION
5.1. Each party warrants and represents to the other that it has the full right
and authority to enter into this Agreement, and that it is not aware of any
impediment that would inhibit its ability to perform its obligations under
this Agreement. Without limiting the foregoing, Schein warrants and
represents to Bayer that neither the entry into this Agreement nor the
performance hereof by Schein and Bayer shall violate or create a default
under Schein's Sublicence, Co-Marketing and Supply Agreement with Makeoff R
& D Laboratories Inc.
5.2. Schein warrants and represents that, to the best of its knowledge, the
Product package insert adequately describes the toxicity and sensitivity
reactions associated with the Product when administered in accordance with
the package insert.
5.3 Schein warrants and represents that it has no knowledge of the existence of
any patent which would prevent Schein from making, using or selling the
Product in the Territory or would prevent Schein and Bayer from jointly
promoting or detailing the Product in the Territory. Bayer acknowledges
that neither Schein nor any of its Affiliates holds any patent covering the
Product.
5.4 Schein shall indemnify, defend and hold Bayer harmless against any and all
damages, costs, expenses, lawsuits and liabilities directly or indirectly
resulting from claims, suits or judgments with respect to (i) the Product
or components thereof; (ii) breach of
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Schein's obligations hereunder; or (iii) breach of Schein's
representations hereunder. Bayer shall promptly notify Schein of any
claims or suits for which Bayer may assert contribution or
indemnification from Schein hereunder and Bayer shall permit Schein, or
its insurer, at Schein's expense, to assume the defense of any and all
such claims or suits and Bayer shall reasonably cooperate with Schein or
its insurer in such defense when requested to do so.
5.5 Bayer shall indemnify, defend and hold Schein harmless against any and all
damages, costs, expenses, lawsuits, and liabilities directly or indirectly
resulting from claims, suits or judgments with respect to (i) the
detailing, promoting, marketing or sale of Product by Bayer hereunder;
(ii) breach by Bayer of any of its obligations hereunder; or (iii)
breach by Bayer of any of its representations hereunder. Schein shall
promptly notify Bayer of any such claims or suits for which Schein may
assert contribution or indemnification from Bayer and Schein shall
permit Bayer or its insurer at Bayer's expense, to assume the defense of
any and all such claims or suits and Schein shall reasonably cooperate
with Bayer or its insurer in such defense when requested to do so.
5.6 Without limitation, as between Bayer and Schein, if an above described
claim, suit or judgment (or any portion thereof) is based solely on:
(a) the failure of the Product to meet any specifications in both the
exclusive Sublicense, Co-Marketing and Supply Agreement with ▇▇▇▇▇▇
R&D Laboratories Inc., and the ▇▇▇▇▇▇ R&D Laboratories New Drug
Application approved by the U.S. Food and Drug Administration ("FDA")
or supplements thereto; or
(b) misrepresentations or deficiencies in or omissions from the Product's
package insert approved by the FDA or in or from Product sales,
training, marketing and promotional materials supplied to Bayer by
Schein;
then Bayer shall not be deemed negligent with respect to such matters and
shall be fully and completely indemnified by Schein under section 5.4 with
respect to such claim, suit or judgment (or portion thereof) which solely
involved such matters, and Schein shall be permitted, at its sole cost, to
assume full control over the defense of any such claim or suit (or portion
thereof).
5.7 This Article V shall survive the termination of this Agreement.
6. ARTICLE VI: TERM AND TERMINATION
6.1 The joint promotion and detailing of the Product shall cease at the end
of the initial Joint Detailing Period ending February 28, 2000;
provided, however, Bayer, in its discretion, shall have the right but
not the obligation to extend the term of the Joint Detailing Period and
this Agreement on the condition that during the six (6) month period
beginning July 1, 1999 and ending December 31, 1999, the percentage
share of sales of Product by Bayer to Customers in the Territory to
sales of all iron replacement therapies used by Customers
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during such six (6) month term exceeds by more than ten percent (10%)
the percentage share during such term of sales of the Product by Schein
(exclusive of sales to Bayer Customers) to sales of all iron replacement
therapies in use (exclusive of sales to Bayer Customers). Market share
shall be measured using the market information available as of December
31, 1999 such that Bayer may give written notice to Schein of its
election prior to February 28, 2000. Upon the proper election by Bayer,
the Joint Detailing Period and this Agreement shall be extended at
Bayer's option for one or two consecutive but separate terms, with the
first renewal term ending June 30, 2000 and the second renewal term
ending December 31, 2000. In the event that Bayer fails to make such
election, and Schein, in its discretion, desires to extend the term of
the Joint Detailing Period and this Agreement, Schein shall advise Bayer
of its desire as promptly as possible, so that the parties may timely
negotiate the terms of such extension.
6.2 Either party may terminate this Agreement, and its performance hereunder,
for cause upon thirty (30) days prior written notice in the event that the
other party has breached or failed to perform any of its material
obligations hereunder, however, if the party to whom such notice is
directed cures the breach or non-performance described in the notice within
said thirty (30) day notice period, such notice of termination shall be
given no effect and this Agreement shall continue in full force in
accordance with its terms.
6.3 This Agreement, and the Joint Detailing Period established hereunder, shall
terminate automatically upon termination of Schein's Sub-license,
Co-Marketing and Supply Agreement with ▇▇▇▇▇▇ R&D Laboratories Inc. Schein
shall notify Bayer in writing of any such termination. Bayer's performance
obligations under this Agreement, however, will terminate immediately upon
a termination of said Sub-license Agreement, whether or not Schein has
provided Bayer with the required notice. Schein will indemnify Bayer
pursuant to Section 5.4 against any action ▇▇▇▇▇▇ R&D Laboratories Inc. may
take against Bayer for activities by Bayer during the period following the
termination of said Sub-license agreement and prior to Bayer's receipt of
such notice from Schein.
6.4 Termination of this Agreement shall be without prejudice to either party's
right to obtain performance of any obligations provided for in this
Agreement which survive termination by their terms.
7. ARTICLE VII: FORCE MAJEURE
7.1 The performance by either party of any covenants or obligations on its part
to be performed hereunder (other than an obligation of either to pay money
to the other) shall be excused by floods, strikes or other labor
disturbances, riots, fires, accidents, wars, embargoes, delays of carriers,
inability to obtain materials from sources of supply, acts, injunctions, or
restraints of governments (whether or not now threatened), or any cause
preventing such performance whether similar or dissimilar to the foregoing
beyond the reasonable control of the party bound by such covenant or its
obligation, provided, however, that the party affected shall exert its
reasonable diligent efforts to eliminate or
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cure or overcome any of such causes and to resume performance of its
covenants with all possible speed.
8. ARTICLE VIII: DISPUTE RESOLUTION
8.1 Both parties are obligated to undertake all reasonable efforts in order to
solve in an amicable way any controversy arising in connection with this
Agreement. However, in the event that disputes arise that cannot be
resolved at the immediate level, the dispute shall be referred to the
President of Bayer Pharmaceutical Division and the Chairman and CEO of
Schein.
9. ARTICLE IX: CONFIDENTIALITY; NON-SOLICITATION
9.1 For a period of ten (10) years from the Effective Date of this Agreement or
five (5) years from the termination hereof, whichever occurs later:
(a) each party agrees not to use Confidential Information furnished by the
other party for any purpose inconsistent with this Agreement; and
(b) each party will treat Confidential Information furnished by the other
party as if it were its own proprietary information and will not
disclose it to any third party other than its Affiliates or
consultants without the prior written consent of the other party who
furnished such information.
9.2 Bayer shall not have the right for a period of five (5) years from the
termination of this Agreement to disclose, publish and/or use for its
benefit or for the benefit of any third party any Confidential
Information, sales, marketing, training or other information provided to
Bayer by or on behalf of Schein or its Affiliates received under this
Agreement to promote, achieve and/or maintain the sale and use of the
Product or any other pharmaceutical specialty with indications similar
to those of Product without the prior written consent of Schein.
9.3 A party shall be relieved of any and all of the obligations of Sections 9.1
and 9.2 with respect to Confidential Information if:
(a) such Confidential Information was known to the party receiving the
Confidential Information prior to receipt from the disclosing party;
or
(b) such Confidential Information was at the time of disclosure to the
party receiving the Confidential Information generally available to
the public or which became generally available to the public through
no fault attributable to the party receiving the Confidential
Information; or
(c) such Confidential Information was made available to the party
receiving the Confidential Information for its use or disclosure from
any third person who was at the time of transmitting such Confidential
Information not under a non-
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disclosure obligation to the other party.
9.4 Each of Schein and Bayer agrees that during the term of this Agreement and
for a period of one year after the termination of this Agreement for any
reason, neither it nor any of its Affiliates shall, except with the prior
written consent of the other party, offer employment to or employ any
person in the other party's sales force if such person was involved in
promoting the Product under this Agreement.
10 ARTICLE X: MISCELLANEOUS PROVISIONS
10.1 This Agreement shall be governed by and interpreted under the laws of the
United States and of the State of New Jersey.
10.2 This Agreement shall be binding upon, and shall inure to the benefit of
successors to a party hereto, but shall not otherwise be assignable without
the prior written consent of both parties.
10.3 Any notice required to be given hereunder shall be considered properly
given and deemed received within four (4) business days of mailing if sent
by certified mail, return receipt requested , or shall be deemed received
upon receipt if sent by messenger or overnight delivery, or by telecopier
(provided an additional copy is sent by certified mail, return receipt
requested within two (2) business days) if sent to the respective address
of each party as follows:
10.4 If to Bayer to: Office of the President
Bayer Inc.
Pharmaceutical Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Schein to: Chairman of the Board
Schein Pharmaceutical, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
or to such other address as the addressee shall have last furnished in
writing in accord with this provision to the addresser.
10.5 If any provision of this Agreement is held to be invalid, such invalidity
shall not affect the validity of the remaining provisions.
10.6 All captions herein are for convenience only and shall not be interpreted
as having any substantive meaning.
13
10.7 All covenants, agreements, representations and warranties made hereunder
shall be deemed to have been relied upon notwithstanding any investigation
heretofore or hereafter made and shall survive the execution of this
Agreement.
10.8 This Agreement constitutes the entire agreement between the parties hereto
with respect to the within subject matter and supersedes all previous
agreements relating to the co-promotion of pharmaceutical products by
Schein and Bayer, whether written or oral, including, without limitation,
that certain Co-Promotion Agreement, dated August 1, 1994, as amended,
which shall be deemed terminated as of the Effective Date in accordance
with the provisions set forth therein. This Agreement may be changed only
in writing signed by properly authorized representatives of Bayer and
Schein.
IN WITNESS WHEREOF, Bayer and Schein have caused this Agreement to be duly
executed by their authorized representatives, in duplicate as of the date first
set forth above.
BAYER INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. Vice President & Gen. Mgr.
Pharma USA
Bayer Corporation
SCHEIN PHARMACEUTICAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Brand Products Group
14
APPENDIX I
COMPLAINT GUIDELINE PROCEDURES
The purpose of this appendix is to establish written procedures for the
communication and processing of Product complaints received by Bayer.
Acting in accord with this Agreement will facilitate compliance with Federal
Requirements as set forth in 21 CFR 211.198 (complaint files) and 21 CFR
310.305/21 CFR 314.80 (reporting of post-marketing adverse drug reactions).
A. COMPLAINT REPORTING:
1. Complaints reported directly to Bayer will be summarized, and forwarded
immediately by fax to the Manager of Professional Affairs, or designee, at
Schein. Bayer personnel will utilize and complete the Schein developed Drug
Experience Report (DER) Form as per instructions when recording the adverse
event/product complaint (Form attached.), or such other format as the
parties may agree.
2. All adverse drug experience complaints reported to Bayer will be
communicated to Schein within 2 days of report receipt. Schein will be
responsible for completion and submission to the Food and Drug
Administration of Form FDA 3500A, and other, where appropriate.
3. Complaint reports which may meet NDA-Field Alert Report ▇▇▇▇▇▇▇▇ [▇▇ ▇▇▇
314.81 (b) (1)] will be promptly communicated to Schein within 2 days,
enabling FDA notification by Schein within 3 working days. Schein will
advise Bayer of NDA Field Alert Report submission and forward a copy of any
such report to the Complaint Coordinator of Bayer.
B. COMPLAINT INVESTIGATION:
1. Schein will coordinate the investigations of all complaints, including
complaints associated with Product's active or inactive ingredients,
container/closure system, general Product quality, distribution or
handling. At times, personnel from Bayer may be contacted to assist in
identifying or locating the complainant in order to obtain additional
information pertinent to the complaint.
C. COMMUNICATIONS WITH COMPLAINANT:
1. Schein will be responsible for review of complaint evaluation information
and preparation of a written response when appropriate.
2. In situations requiring submission of adverse drug experience reports,
Schein will be responsible for any follow-up communications which may be
required in order to facilitate timely completion and submission of FDA
Form-3500A, and other, as appropriate. (See Appendix 1, Part B for
potential Bayer interaction.)
D. PRODUCT RECALL:
1. In carrying out a recall, both parties will fully cooperate in notifying
customers to follow instructions agreed upon by the parties.
15
EXHIBIT A
CALCULATION OF COMMISSIONS
If total DDD Reported Sales of the Product by Bayer to Customers in the
Territory equal * Bayer's commissions would be calculated as follows:
DDD Reported Sales Commission Percentage Commission
* x * = *
* x * = *
* x * = *
-----------------------------------------------------------
Total Commission *
----------
* Material omitted pursuant to a request for confidential treatment. The
omitted material has been filed separately with the Securities and
Exchange Commission.
16
SCHEIN CONTROL NO.:
SCHEIN PHARMACEUTICAL, INC.
---------------------------
DRUG EXPERIENCE REPORT (DER) FORM
INSTRUCTIONS: A. USE THIS FORM TO REPORT ADVERSE EVENT TO BRAND PROFESSIONAL
AFFAIRS DEPARTMENT. AN ADVERSE EVENT IS ANY UNDESIRABLE EXPERIENCE WHICH
OCCURRED IN A HUMAN DURING OR SHORTLY AFTER THE USE OF A DRUG, REGARDLESS OF
WHETHER THE DRUG CAUSED THE EVENT. AN ADVERSE EVENT WHICH OCCURRED AS A
RESULT OF OVERDOSE (INTENTIONAL OR ACCIDENTAL), FAILURE OF PHARMACOLOGICAL
ACTION OR DRUG WITHDRAWAL; OR WHICH RESULTED IN DRUG ABUSE OR DRUG DEPENDENCY
SHOULD ALSO BE REPORTED TO PROFESSIONAL AFFAIRS.
B. If report is serious*, telephone Professional Affairs (888-397-1766)
IMMEDIATELY to report the event; then fax the completed DER form WITHIN 1
WORKING DAY to ▇▇▇-▇▇▇-▇▇▇▇. Original copies of all faxed and phoned reports
must be mailed to Brand Professional Affairs Dept. Schein Pharmaceutical,
Inc., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. If report is non-serious, you
do not have to telephone; just fax then mail the original DER form to
Professional Affairs.
C. DO NOT USE THIS FORM (1) TO REPORT AN ADVERSE EVENT WHICH OCCURRED IN A
PATIENT WHO WAS PARTICIPATING IN A STUDY INVOLVING THE DRUG IN QUESTION, (2)
TO PROCESS A REQUEST FOR MEDICAL INFORMATION, OR (3) TO RETURN GOODS. ALSO DO
NOT USE THIS FORM FOR MULTIPLE REPORTS; USE ONE FORM PER PATIENT. IF
NECESSARY, MAKE A PHOTOCOPY OF A BLANK DER FORM IF YOU DO NOT HAVE SUFFICIENT
BLANK DER FORMS TO ASSURE ONE PATIENT REPORT PER COPY.
--------------------------------------------------------------------------------
REPORTER'S FULL NAME |_|MD |_|DO |_|PHARMD |_|RPM |_|RN
------------------------------
ADDRESS |_|PSD |_|LPN |_|MED ASST |_|CONSUMER
------------------------------
|_|OTHER (Specify)________________________________
--------------------------------------------------------------------------------
CITY | STATE | ZIP
| |
--------------------------------------------------------------------------------
TEL. NO. | OTHER TEL. NO. | FAX NO.
| |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SUSPECT DRUG NAME DOSE | DATES OF USE | LOT NO
| |
--------------------------------------------------------------------------------
DESCRIBE THE EVENT AS REPORTED TO YOU (INCLUDE PATIENT IDENTIFIERS SUCH AS
GENDER, INITIALS, AGE)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PHYSICIAN OR OTHER HEALTHCARE | IF PATIENT WAS HOSPITALIZED, PROVIDE
PROFESSIONAL WHO PRESCRIBED THE | NAME, ADDRESS AND TELEPHONE NUMBER OF
SUSPECT DRUG | HOSPITAL BELOW
SAME AS REPORTER ABOVE? |
|_|YES |_|NO |_|UNKNOWN |
--------------------------------------------------------------------------------
IF DIFFERENT FROM ABOVE, SPECIFY THE | HOSPITAL NAME
PRESCRIBER BELOW: |
|
--------------------------------------------------------------------------------
NAME |
|
--------------------------------------------------------------------------------
ADDRESS | HOSPITAL ADDRESS
|
--------------------------------------------------------------------------------
|
--------------------------------------------------------------------------------
|
--------------------------------------------------------------------------------
TEL. NO | TEL. NO
|
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SCHEIN REP. EMPLOYEE NAME TEL. NO | VOICEMAIL DATE NOTIFIED | TODAY'S DATE
| |
--------------------------------------------------------------------------------
================================================================================
*An adverse event is considered serious if any of the following occurred:
|_| death __ in-patient hospitalization or
prolongation of in-patient
hospitalization
|_| immediately life threatening __ persistent or significant disability
incapacity
|_| congenital anomaly or birth defect __ medical or surgical intervention to
prevent one of the outcomes above
|_| drug dependency or drug abuse __ medically important in the opinion of
the healthcare professional reporter
CONFIDENTIAL TREATMENT REQUESTED
AMENDMENT NUMBER 1 TO CO-PROMOTION AGREEMENT
This Amendment Number 1 to the Co-Promotion Agreement (the "Amendment") is
entered into as of 1st day of March 2000 between Bayer Corporation, a
corporation of the State of Indiana (hereinafter "Bayer") and Schein
Pharmaceutical, Inc., a corporation of the State of Delaware (hereinafter
"Schein").
WITNESSETH:
WHEREAS, Bayer and Schein entered into a Co-Promotion Agreement dated July
1, 1999 (the "Agreement");
WHEREAS, pursuant to the terms of the Agreement, Bayer and Schein agreed to
jointly promote and detail the Product (as defined in the Agreement);
WHEREAS, the parties wish to amend the Agreement in accordance with the
terms of this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, and for other good and valuable consideration, it is agreed as
follows:
1. DEFINITIONS IN THIS AMENDMENT AND INCORPORATION. Unless otherwise defined
herein, all terms used herein shall have the meaning ascribed to them in
the Agreement, and the terms and provisions of the Agreement are
incorporated herein by reference as though set forth in full.
2. TERM. Bayer and Schein hereby agree that the term of the Agreement shall
terminate on September 30, 2000. The period commencing on March 1, 2000 to
September 30, 2000 is hereinafter referred to as the "Extended Period."
3. OBLIGATIONS. Unless otherwise provided herein, all obligations of the
parties during the Joint Detailing Period shall apply to the Extended
Period.
4. PAYMENT. Section 3.1 and 3.2 shall be deleted in its entirety and replaced
with the following:
3.1 SERVICE FEE. Bayer and Schein acknowledge and agree that the service
fee payable by Schein to Bayer for the Extended Period shall be as
follows:
(a) For the period commencing on March 1, 2000 to March 31, 2000, the
service fee shall be *.
(b) For each three month period commencing on April 1, 2000, the
service fee shall be at a rate of *.
The service fee shall be due thirty (30) days after the end of the
applicable period.
----------
* Material omitted pursuant to a request for confidential treatment. The
omitted material has been filed separately with the Securities and
Exchange Commission.
3.2 SALES COMMISSION. For the Extended Period, Schein shall pay to Bayer
amounts equal to the following percentage of sales of Product to
Customers in the Territory by Bayer as reported by DDD:
DDD Sales Commission %
--------- ------------
Up to $* *
Sales in excess of $* but
not in excess of $* *
Sales in excess of $* *
5. REAFFIRMATION OF AGREEMENT AND OTHER DOCUMENTS. Except as modified herein,
all of the covenants, terms and conditions of the Agreement remain in full
force and effect and are hereby ratified and reaffirmed in all respects. In
the event of any conflict, inconsistency or incongruity between the terms
and conditions of this Amendment and the covenants, terms and conditions of
the Agreement the terms and conditions of this Amendment shall govern and
control.
6. COUNTERPARTS. This Amendment may be executed in two or more counterparts,
each of which together shall constitute an original but which, when taken
together, shall constitute but one instrument and shall become effective
when copies hereof, when taken together, bear the signatures of all
required parties and persons.
IN WITNESS WHEREOF, this Amendment is executed as of the day and year first
above written.
BAYER CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: SR VP/General Manager
-------------------------------------
SCHEIN PHARMACEUTICAL, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President, Brand Products
----------
* Material omitted pursuant to a request for confidential treatment. The
omitted material has been filed separately with the Securities and
Exchange Commission.
