Exhibit 4.35
EXECUTION COPY
OPTION AGREEMENT
THIS AGREEMENT is made as of the Effective Date (defined below), by and
between XXXXXXX-XXXXX SQUIBB COMPANY, a Delaware corporation, headquartered at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 XXX ("BMS"), and XXXXX (CHEMICALS)
LIMITED, a corporation of the Republic of Ireland, with offices at 0 Xxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xx. Xxxxxx, Xxxxxxxx of Ireland ("Xxxxx"). Capitalized
terms not otherwise defined herein shall have the meaning set forth in Article
1.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the terms of the XXX License Agreement, BMS is
the exclusive licensee from XXX of certain patents and technical information
within the Territory for the development and commercialization of products
containing the Compound and that are sold under the trademark "Dovonex(R)" for
use within the dermatological field; and
WHEREAS, concurrently with the execution of this Agreement, BMS and
Xxxxx have entered into a Copromotion Agreement for the copromotion by Xxxxx of
the Products; and
WHEREAS, subject to the terms of this Agreement, the Parties desire
to grant to Xxxxx the option to acquire certain rights and assets relating to
the Product that are Controlled by BMS; and
WHEREAS, subject to the terms of this Agreement and to the written
consent of XXX, if Xxxxx exercises the Option and there is a Closing, BMS shall,
concurrently with the acquisition by Xxxxx of such rights and assets, assign to
Xxxxx BMS' interests in the XXX License Agreement and the XXX Supply Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, and intending to be legally bound hereby, the Parties hereto agree as
follows:
ARTICLE 1 - DEFINITIONS.
For purposes of this Agreement, the following terms shall have the
corresponding meanings set forth below:
"Acquired Assets" means the rights and benefits to be assigned or
sold at Closing to Xxxxx pursuant to the Asset Purchase Agreement.
"Affiliate" means, with respect to any Person, any other Person
which directly or indirectly controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, a Person shall be
regarded as in control of another Person if it/he/she 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 it/he/she directly or indirectly possesses the power to direct or cause
the direction of the
EXECUTION COPY
management or policies of the other Person, whether through the ownership of
voting securities, by contract or any other means whatsoever.
"Agreement" means this agreement, together with all schedules
hereto, and as the same may be amended or supplemented from time to time
hereafter by a written agreement duly executed by authorized representatives of
each Party hereto in accordance with Section 9.3.
"Ancillary Agreements" means the XXX License Agreement, the XXX
Supply Agreement, the Consent Agreement and the Copromotion Agreement.
"Asset Purchase Agreement" has the meaning set forth in Section
2.1.4 hereof.
"Business" means (x) in the case of BMS, the business of
distributing, marketing and selling the Products in the Territory; and (y) in
the case of Xxxxx, the promotion of the Products pursuant to the Copromotion
Agreement, in each case ((x) and (y)), as conducted by a Party and its
Affiliates as of the Option Acceptance Date.
"Closing" means the consummation of the Purchase Transaction in
accordance with the Asset Purchase Agreement.
"Closing Date" means the date on which the Closing occurs.
"Competitive Business Product" means a fixed combination of vitamin
D3 or any vitamin D3 analog with a corticosteroid; provided, however, that
"Competitive Business Product" shall not include such a fixed combination sold
over the counter (without a prescription) other than in a topical presentation.
For sake of clarity and avoidance of doubt, a corticosteriod shall not be
considered a vitamin D3 analog for purposes of the determination of whether a
product is a Competitive Business Product.
"Compound" means the crystalline vitamin D3 analogue MC 903
(molecular weight 412.62) that is licensed to BMS under the XXX License
Agreement.
"Consent Agreement" means the consent agreement entered into as of
the date hereof among XXX, Xxxxx and BMS.
"Controlled by" means, with respect to any product, information or
intellectual property right, that the applicable Party or Person, in whole or in
part, owns or has a license to such product, information or intellectual
property right and has the ability to grant access or a license (or a
sublicense), as applicable, without violating the terms of any agreement or
other arrangements with any Third Party existing at the time such Party or
Person would be first required to grant such access, license or sublicense.
2
EXECUTION COPY
"Copromotion Agreement" means the Copromotion Agreement between BMS
and Xxxxx for the copromotion by Xxxxx of the Products in the Territory of even
date herewith, and as the same may be modified or supplemented hereafter.
"Copromotion Term" means the period during which Xxxxx is entitled
to copromote the Product under the Copromotion Agreement.
"Diligent Efforts" means the carrying out of obligations or tasks in
a manner consistent with the efforts a Party devotes to its other products of
similar market potential, profit potential or strategic value resulting from its
own internal research efforts, based on conditions then prevailing.
"Dovobet(R)" means any pharmaceutical preparation formulation
containing both the Compound and the steroid betamethasone dipropionate, in all
dosage forms, formulation, presentations and line extensions.
"Effective Date" means April 1, 2003.
"FDA" means the U.S. Food and Drug Administration.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, agency, commission, official or other instrumentality of any
federal, state, county, city or other political subdivision, foreign or
domestic.
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of any Governmental or Regulatory
Authority.
"XXX" means XXX Pharma A/S (formerly known as XXX Pharmaceutical
Products Ltd.), a Danish entity, with offices at Xxxxxxxxxxxxxx 00, XX-0000
Xxxxxxxx, Xxxxxxx.
"XXX License Agreement" means the agreement between BMS (as
successor to X.X. Xxxxxx & Sons, Inc.) and XXX for the development and
commercialization of products containing the Compound in the Territory within
the dermatological field dated September 28, 1989, as heretofore amended by
amendments thereto dated as of July 6, 1992, April 8, 1993 and the date hereof
and as attached hereto as Exhibit C, as such agreement may be amended,
supplemented or modified from time to time in accordance with Section 2.6.6 of
the Consent Agreement.
"XXX Supply Agreement" means the agreement between Xxxxxxx-Xxxxx
Squibb Company and XXX for the supply to BMS by XXX of finished and packaged
products containing the Compound for use in the Licensed Territory within the
dermatological field dated April 8, 1993, as amended as of the date hereof and
as attached hereto as Exhibit D, as such agreement may be amended, supplemented
or modified from time to time in accordance with Section 2.6.6 of the Consent
Agreement.
"XXX Technical Information" means all information (including
preclinical, chemical-pharmaceutical and clinical data or other scientific
information or secret
3
EXECUTION COPY
know-how about the Compound and any Product, or uses for a Product, as well as
all information and secret know-how regarding the manufacture or packaging of a
Product) that has been or will be disclosed by or licensed to BMS by XXX under
the XXX License Agreement.
"Net Sales" means the aggregate sales in the Territory of Products
by Xxxxx, its Affiliates, its licensees or by a Third Party who distributes such
Product as agent or licensee of Xxxxx, its Affiliates or its licensees (a "Third
Party Partner"), in each case from the sale of a Product to independent Third
Parties less the following amounts (to the extent not paid or reimbursed by the
purchaser or transferee): sales returns and allowances, including trade,
quantity and cash discounts and any other adjustments, including those granted
on account of price adjustments, billing errors, rejected goods, damaged goods,
recalls, returns, rebates, chargeback rebates, fees, reimbursements or similar
payments granted or given to wholesalers or other distributors (including
retailers), buying groups, health care insurance carriers or other institutions,
freight and insurance charges billed to the customers, customs or excise duties,
sales tax and other taxes (except income taxes) or duties relating to invoiced
sales amounts, and any payment in respect of sales to any Governmental or
Regulatory Authority in respect of any Federal or state Medicaid, Medicare or
similar program, all as determined in accordance with generally accepted
accounting principles on a basis consistent with Galen's audited financial
statements, provided, however, that any deductions from aggregate sales
described above in excess of eight percent (8%) shall not be taken into account
for purposes of calculating Net Sales.
"Option" has the meaning set forth in Section 2.1 hereof.
"Option Acceptance Date" has the meaning set forth in the first
paragraph of Article 4 hereof.
"Party" means Xxxxx or BMS, as the case may be. "Parties" means
Xxxxx and BMS.
"Person" means an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock company,
joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, Governmental or Regulatory Authority, or any other form of legal
entity not specifically listed herein.
"Product" means (x) all current pharmaceutical preparations for
human use in final topical dosage forms which contain the Compound as a
therapeutically active ingredient that have been approved as of the Effective
Date by any Governmental or Regulatory Authority for use and sale in the
Territory; and (y) all future pharmaceutical preparations for human use in final
dosage forms which contain the Compound as a therapeutically active ingredient
that are approved by any Governmental or Regulatory Authority in the Territory
during the Copromotion Term, and that BMS is able to promote, and has accepted
to promote, under the XXX License Agreement during the Copromotion Term;
provided that the definition of Product shall not include Dovobet(R) except for
purposes of the last sentence of Sections 2.1.1, 2.1.2, 2.1.3 and 2.2.3 and the
whole of Articles 5 and 7. Product shall be in finished and packaged form for
use by the end-user.
4
EXECUTION COPY
"Purchase Transaction" has the meaning set forth in Section 2.1
hereof.
"Retained Information" means any and all books and records prepared
and maintained by BMS in connection with the Business, including all regulatory
files (including correspondence with regulatory authorities), market research
data, and marketing data, that do not relate exclusively to the Business and are
used in connection with BMS's or its Affiliates' conduct of the Business prior
to the Closing Date or that are laboratory notebooks.
"Territory" means the fifty (50) states of the United States of
America and the District of Columbia, and any U.S. possessions and territories.
"Third Party(ies)" means any Person other than: (1) Xxxxx and BMS
and (2) any Affiliates of Xxxxx and BMS.
ARTICLE 2 - GRANT OF OPTION RIGHT TO XXXXX; CHANGE IN CONTROL; PHASE IV STUDIES.
2.1 Option Right. Subject to the terms of this Agreement, BMS hereby
grants to Xxxxx the option ("Option") to acquire certain rights and assets
relating to the Product that are Controlled by BMS pursuant to the terms of the
Asset Purchase Agreement (the "Purchase Transaction"). The Option shall be
exercisable as follows:
2.1.1 January 1, 2004. To exercise the Option, Xxxxx shall give
written notice (an "Option Notice") to BMS. If Xxxxx gives an Option Notice on
or prior to August 1, 2003, BMS shall, within thirty (30) days after receipt of
the Option Notice, deliver written notice to Xxxxx as to whether BMS desires to
proceed with consummation of the Purchase Transaction, it being understood that,
unless BMS affirmatively notifies Xxxxx in writing within such 30-day period
that BMS elects to proceed with consummation of the Purchase Transaction, no
Purchase Transaction shall be consummated pursuant to this Section 2.1.1. BMS
shall be entitled in its sole and absolute discretion to refuse to consummate
the Purchase Transaction in response to such Option Notice (it being understood
that if BMS fails to respond to such Option Notice within such 30-day period,
such absence of response shall be deemed to be notice that BMS has elected not
to proceed to consummate the Purchase Transaction). If BMS elects to proceed
with consummation of the Purchase Transaction, then: (i) BMS and Xxxxx will,
within thirty (30) days thereafter, enter into an Asset Purchase Agreement
pursuant to Section 2.1.4 hereof, and (ii) subject to Section 2.3 hereof and the
terms and conditions of the Asset Purchase Agreement, the Purchase Transaction
shall close during the first week of January 2004. Subject to Sections 2.2 and
2.3 hereof, (x) Xxxxx will pay to BMS Three Hundred Million Dollars
(US$300,000,000) at Closing (which amount shall be the up-front cash purchase
price under the Asset Purchase Agreement set forth on Schedule 1.01(a) thereof),
as adjusted pursuant to the Asset Purchase Agreement, and (y) BMS shall receive
a twenty percent (20%) royalty on Net Sales of the Product pursuant to Article 5
hereof from the Closing Date through December 31, 2007.
2.1.2 January 1, 2005. If Xxxxx gives an Option Notice after August
1, 2003 but on or prior to August 1, 2004, BMS shall, within thirty (30) days
after receipt of the Option Notice, deliver written notice to Xxxxx as to
whether BMS desires to proceed with consummation
5
EXECUTION COPY
of the Purchase Transaction, it being understood that, unless BMS affirmatively
notifies Xxxxx in writing within such 30-day period that BMS elects to proceed
with consummation of the Purchase Transaction, no Purchase Transaction shall be
consummated pursuant to this Section 2.1.2. BMS shall be entitled in its sole
and absolute discretion to refuse to consummate the Purchase Transaction in
response to such Option Notice (it being understood that if BMS fails to respond
to such Option Notice within such 30-day period, such absence of response shall
be deemed to be notice that BMS has elected not to proceed to consummate the
Purchase Transaction). If BMS elects to proceed with consummation of the
Purchase Transaction, then: (i) BMS and Xxxxx will, within thirty (30) days
thereafter, enter into an Asset Purchase Agreement pursuant to Section 2.1.4
hereof, and (ii) subject to Section 2.3 hereof and to the terms and conditions
of the Asset Purchase Agreement, the Parties shall close the Purchase
Transaction during the first week of January 2005. Subject to Sections 2.2 and
2.3 hereof, (x) Xxxxx will pay to BMS Two Hundred Fifty Million Dollars
(US$250,000,000) at Closing (which amount shall be the up-front cash purchase
price under the Asset Purchase Agreement set forth on Schedule 1.01(a) thereof),
as adjusted pursuant to the Asset Purchase Agreement, and (y) BMS will receive a
ten percent (10%) royalty on Net Sales of the Product pursuant to Article 5
hereof from the Closing Date through December 31, 2007.
2.1.3 January 1, 2006. If Xxxxx gives an Option Notice after August
1, 2004 but on or prior to August 1, 2005, then, (i) BMS and Xxxxx will, within
thirty (30) days thereafter, enter into an Asset Purchase Agreement pursuant to
Section 2.1.4 hereof, and (ii) subject to Section 2.3 hereof and the terms and
conditions of the Asset Purchase Agreement, the Parties shall close during the
first week of January 2006. Subject to Sections 2.2 and 2.3 hereof, (x) Xxxxx
will pay to BMS Two Hundred Million Dollars (US$200,000,000) at Closing (which
amount shall be the up-front cash purchase price under the Asset Purchase
Agreement set forth on Schedule 1.01(a) thereof), as adjusted pursuant to the
Asset Purchase Agreement, and (y) BMS will receive a five percent (5%) royalty
on Net Sales of the Product pursuant to Article 5 hereof from the Closing Date
through December 31, 2007.
2.1.4 Asset Purchase Agreement. On or prior to each of July 1, 2003,
July 1, 2004 and July 1, 2005, respectively (unless the Purchase Transaction has
been consummated prior to such date), Xxxxx shall give BMS written notice if
Xxxxx is considering exercising the Option pursuant to Sections 2.1.1, 2.1.2 or
2.1.3, respectively. If Xxxxx indicates that it is considering exercising the
Option pursuant to any such Section, BMS shall, within 15 calendar days of
receiving notice thereof, either (a) give Xxxxx notice in writing that it is
unwilling to engage in the Purchase Transaction pursuant to such Section 2.1.1,
2.1.2 or 2.1.3, as applicable, or (b) deliver to Xxxxx the form of the Asset
Purchase Agreement, in substantially the form attached as Exhibit A (the "Asset
Purchase Agreement"), with updated draft disclosure schedules reflecting updates
to BMS's disclosure schedules with respect to its representations and warranties
since the date of this Agreement (other than any certified financial statements
required by the Asset Purchase Agreement, which shall be delivered as set forth
in the Asset Purchase Agreement). Xxxxx shall have the right until the
immediately following August 1 to confirm and negotiate any such updates to the
extent they materially affect the value of the rights and assets subject to this
Option Agreement and the Asset Purchase Agreement and to provide BMS with a firm
written notice that it is exercising its Option under Sections 2.1.1, 2.1.2 or
2.1.3, as applicable; provided, that neither Party shall be under any
obligation, express or
6
EXECUTION COPY
implied, to change the Purchase Price. If firm written notice of Option exercise
is given by Xxxxx on a timely basis, then, in the event that BMS elects to
proceed with consummation of the Purchase Transaction pursuant to Section 2.1.1
or 2.1.2 or is required to proceed with the consummation thereof pursuant to
Section 2.1.3, BMS and Xxxxx will enter into the Asset Purchase Agreement. If
Xxxxx elects to deliver an Option Notice, then not later than five (5) business
days after the Option Notice is received by BMS, Xxxxx shall be entitled to
update its representations and warranties and to set forth any exceptions to
such representations and warranties in a schedule to the Asset Purchase
Agreement as Xxxxx considers appropriate. BMS and Xxxxx will consider in good
faith other modifications or supplements to any terms that either believes are
necessary to fully and appropriately reflect the transaction.
2.1.5 Coordination Among Parts of 2.1. Except as set forth in
Section 2.2.4, delivery of an Option Notice by Xxxxx to BMS that does not result
in the consummation of the Purchase Transaction (other than due to a breach by
Xxxxx of the Asset Purchase Agreement or a failure by Xxxxx to fulfill a Closing
condition solely within its control, in each case that results in BMS
terminating the Asset Purchase Agreement in accordance with its terms, or if the
Asset Purchase Agreement is terminated for failure to receive necessary
Governmental consents and approvals) shall not affect Galen's right to deliver
subsequent Option Notices to BMS.
Section 2.2 Effect of Change of Control.
2.2.1 Change in Control. In the event that BMS undergoes a "Change
in Control" (as defined in Section 2.2.5 below) after the Effective Date and
prior to August 1, 2007, then Xxxxx may give an Option Notice not earlier than
the effective date of such Change in Control and not later than three (3) months
after such Change in Control. If timely notification is given, then, (x) BMS and
Xxxxx will, within thirty (30) days thereafter, enter into the Asset Purchase
Agreement pursuant to Section 2.1.4 hereof, and (y) subject to Section 2.3
hereof and the terms and conditions of the Asset Purchase Agreement, the Parties
shall close the Purchase Transaction as soon as practicable but no later than
four months thereafter.
2.2.2 Effect on Up-Front Payment. The up-front payment to be
inserted in an Asset Purchase Agreement executed pursuant to Section 2.2.1 shall
depend on the actual Closing Date and shall be determined as follows:
2.2.2.1 if any Closing pursuant to such Change in Control
occurs prior to January 1, 2004, the up-front amount shall be the same
figures as if a Closing pursuant to Section 2.1.1 shall have occurred;
2.2.2.2 if any Closing pursuant to such Change in Control
occurs on or after January 1, 2004 and on or prior to January 1, 2006,
then the up-front payment shall be equal to:
$300,000,000 - ($100,000,000 x M/24)
7
EXECUTION COPY
where M equals the number of full calendar months that have elapsed since
January 1, 2004 until the Closing Date. For example, if the Closing occurs
on April 1, 2004, the up-front payment would be $287,500,000.
2.2.2.3 if any Closing pursuant to such Change in Control
occurs after January 1, 2006 and on or prior to December 31, 2007, then
the up-front payment shall be equal to:
$200,000,000 - ($100,000,000 x N/24)
where N equals the number of full calendar months that have elapsed since
January 1, 2006 until the Closing Date. For example if a Closing occurs on
July 1, 2006, the up-front payment would be $175,000,000; if Closing
occurs on July 1, 2007, the up-front payment would be $125,000,000.
2.2.3 Effect on Royalty Rate. The royalty rate payable pursuant to
Article 5 below on Net Sales of the Product from the Closing Date through
December 31, 2007 shall depend on the actual Closing Date and shall be
determined as follows:
2.2.3.1 if any Closing pursuant to such Change in Control
occurs prior to January 1, 2004, the royalty rate shall be the same figure
as if a Closing pursuant to Section 2.1.1 shall have occurred;
2.2.3.2 if any Closing pursuant to such Change in Control
occurs on or after January 1, 2004 and prior to January 1, 2005, the
royalty rate shall be:
20% - (10% x M/12)
where M equals the number of full calendar months that have elapsed
since January 1, 2004 until the Closing Date. For example, if the
Closing occurs on April 1, 2004, the royalty rate would be 17.5%.
2.2.3.3 if any Closing pursuant to such Change in Control
occurs on or after January 1, 2005 and on or prior to December 31, 2005,
then the royalty rate shall be:
10% - (5% x M/12)
where M equals the number of full calendar months that have elapsed
since January 1, 2005 until the Closing Date. For example, if the
Closing occurs on April 1, 2005, the royalty rate would be 8.75%.
2.2.3.4 if any Closing pursuant to such Change in Control
occurs on or after January 1, 2006 and on or prior to December 31, 2007,
then the royalty rate shall be 5%.
8
EXECUTION COPY
2.2.4 Coordination with Section 2.1. If July 31, 2003, July 31,
2004, or July 31, 2005 should occur during the three-month period following a
Change in Control, then Xxxxx may elect to enter into and consummate the
Purchase Transaction, if at all, only pursuant to Section 2.2 and not pursuant
to such Section 2.1.1, 2.1.2, or 2.1.3, as the case may be; provided, that Xxxxx
does not waive any rights it may have to elect to enter into and consummate the
Purchase Transaction pursuant to Section 2.1.2 or 2.1.3, as the case may be,
that would apply to any succeeding year after the year in which such Change in
Control occurs.
2.2.5 Definition of Change in Control. For purposes of this Section
2.2, the term "Change in Control" means any sale of voting securities or sale of
assets (whether by sale, merger, consolidation, share exchange, or otherwise)
which, directly or indirectly, (i) transfers over 50% of the assets of BMS to
any Person other than an Affiliate of BMS, or (ii) results in any Person and/or
any of its Affiliates (other than an Affiliate of BMS) becoming the beneficial
owner, directly or indirectly, of fifty percent (50%) or more of those
securities of BMS entitled to vote for the election of directors of BMS.
2.3 Delay in Receipt of Governmental Approvals. If receipt of any
governmental approval or expiration of any waiting period applicable to the
Purchase Transaction (e.g. HSR waiting period) should result in a delay in the
consummation of the Purchase Transaction until after the desired closing date
set forth in Section 2.1.1, 2.1.2, 2.1.3 or 2.2.1, as the case may be, the delay
shall not affect the Up-Front Cash Purchase Price (as defined in the Asset
Purchase Agreement) to be paid by Xxxxx under the Asset Purchase Agreement or
the applicable royalty rate on Net Sales to be paid by Xxxxx as set forth in the
applicable Section 2.1.1, 2.1.2, 2.1.3 or 2.2.
ARTICLE 3 - COVENANTS PRIOR TO CLOSING.
3.1 Payment of Dovobet(R) Royalty. From the date hereof until the earlier
of December 31, 2007 and the Closing Date (the "Dovobet(R) Period"), Xxxxx shall
pay to BMS, within sixty (60) days after the end of each calendar quarter, a
non-creditable and non-refundable earned royalty equal to 20% of Net Sales, if
any, of Dovobet(R) (and no other Products) during each calendar quarter during
the Dovobet(R) Period. Such royalty payments shall be made directly by Xxxxx to
BMS. Galen's obligation to make such payments shall be unconditional and
irrevocable and shall not be subject to offset or credit. The payment mechanics
and limitations with respect to Royalty Payments set forth in Sections 5.2
through 5.7 hereof shall apply, mutatis mutandis, to the royalty payments
pursuant to this Section 3.1. Xxxxx represents and warrants that, under its
agreements with XXX, Xxxxx will be entitled to book sales of Dovobet(R) from and
after the Closing. Xxxxx covenants and agrees that no termination, waiver,
modification, release or amendments of, to or from its agreements with XXX will
be made voluntarily by Xxxxx from and after the Effective Date without the prior
written consent of BMS (which consent shall not unreasonably withheld) if such
change would adversely affect Galen's ability to book sales of Dovobet(R);
provided that the foregoing consent obligation shall not apply to termination by
Xxxxx of an agreement for material breach by XXX.
3.2 Publicity. Except as otherwise required by law or applicable stock
exchange requirements, prior to Closing, no Party shall, and each Party shall
cause their respective Affiliates, representatives and agents not to, issue or
cause the publication of any press release or
9
EXECUTION COPY
public announcement with respect to the transactions contemplated by this
Agreement without the express prior written approval of the other Parties, which
approval shall not unreasonably be withheld. The content of the initial press
release announcing the execution of this Agreement shall be mutually agreed by
all Parties hereto.
3.3 Access. Prior to the execution and delivery of the Asset Purchase
Agreement BMS shall give to Xxxxx, upon reasonable prior notice and no more than
once per year plus once following the Option Acceptance Date, reasonable access
to the books, records and personnel related to the Products and the Business for
the purpose of enabling Xxxxx to decide whether to exercise the Option and to
confirm the representations and warranties in the Asset Purchase Agreement.
3.4 No Sale. From the date hereof until the execution and delivery of the
Asset Purchase Agreement, BMS shall not, nor shall its representatives,
Affiliates or agents, entertain, negotiate or enter into any agreement for, or
take any steps to consummate, the sale or disposition of the Acquired Assets or
any material portion of the Acquired Assets with any Person other than Xxxxx;
provided that the foregoing shall not apply with respect to any transaction
occurring directly or indirectly as a result of a Change of Control or the sale
of all or substantially all of BMS' pharmaceutical business.
ARTICLE 4 - COVENANTS FOLLOWING OPTION ACCEPTANCE DATE UNTIL EXECUTION OF ASSET
PURCHASE AGREEMENT.
This Article 4 shall have no force and effect unless and until Xxxxx
provides BMS with an Option Notice that is accepted by BMS under Section 2.1.1
or 2.1.2 or that is delivered under Section 2.1.3 or 2.2.1 hereof. Following the
date of such acceptance (or of such delivery) (the "Option Acceptance Date") and
until the date of the execution of the Asset Purchase Agreement (or for such
longer period as set forth in Section 4.2.3), the following shall apply:
4.1 Conduct of the Business. Each Party and its Affiliates shall continue
to perform its obligations under the Ancillary Agreements. BMS and Xxxxx shall,
and shall cause their respective Affiliates to, operate the Business following
the Option Acceptance Date only in the ordinary course of business consistent
with past practices and shall, and shall cause its Affiliates to, use its or
their reasonable efforts to preserve intact the Business.
4.2 Confidentiality.
4.2.1 Xxxxx shall use its commercially reasonable efforts to keep
confidential the information being provided to it in connection with this
Agreement and the consummation of the other transactions contemplated hereby
except that Xxxxx may disclose such confidential information (i) to its counsel,
(ii) to the extent such information is already public at the time it is
disclosed, (iii) in connection with pursuing any remedies under this Agreement
or as required by applicable Law, (iv) to prospective lenders (to the extent
required by such lenders) all information relating to the Business delivered to
such persons in connection with the financing of the transactions contemplated
by this Agreement, and (v) Retained Information relating to the Business may be
publicly disclosed (A) if and to the extent required by applicable Law or (B)
with the written consent of BMS (not to be unreasonably withheld).
10
EXECUTION COPY
4.2.2 Each of Xxxxx and BMS agrees that the terms of this Agreement
and the Asset Purchase Agreement shall not be disclosed or otherwise made
available to the public and that copies of this Agreement and the Asset Purchase
Agreement shall not be publicly filed or otherwise made available to the public,
except where such disclosure, availability or filing is required by applicable
Law and only to the extent required by such Law. In respect of the foregoing,
the parties acknowledge that Xxxxx expects to be required by Law to file this
Agreement and the Asset Purchase Agreement with the U.S. Securities and Exchange
Commission. Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure. However, any such information relating to the tax treatment or tax
structure is required to be kept confidential to the extent necessary to comply
with any applicable federal or state securities laws.
4.2.3 BMS shall use commercially reasonable efforts to keep
confidential, and to cause its Affiliates and its and their officers, directors,
employees and advisors to keep confidential, all information relating to the
Business, except (i) as required to be disclosed by BMS or its Affiliates under
any of its Ancillary Agreements with XXX or any of its Affiliates, (ii) as used
by BMS and its Affiliates in the manufacture, development, use and sale of the
products other than a Competitive Business Product, and (iii) in connection with
pursuing any remedies under this Agreement or as required by Law or
administrative process and except for information that is available to the
public on the Closing Date, or thereafter becomes available to the public other
than as a result of a breach of this Section 4.2.3. The covenant set forth in
this Section 4.2.3 shall terminate five (5) years after the Closing.
ARTICLE 5 - EARN-OUT ROYALTIES PAYABLE TO BMS FOLLOWING CLOSING.
5.1 Royalty. In addition to the Up-Front Cash Purchase Price paid to BMS
by Xxxxx pursuant to (and as defined in) the Asset Purchase Agreement, Xxxxx
shall pay to BMS from the Closing Date through and including December 31, 2007
(the "Royalty Term") a non-creditable and non-refundable earned royalty at the
rate determined pursuant to Article 2 (the "Royalty Payments") on Net Sales of
the Product during the Royalty Term. The Royalty Payments shall be made directly
by Xxxxx to BMS. Galen's obligation to make the Royalty Payments shall be
unconditional and irrevocable and shall not be subject to offset or credit.
Xxxxx may arrange for any licensee of the Product who is entitled to book sales
in the Territory to make the Royalty Payments to BMS directly; provided, that
Xxxxx shall remain jointly and severally responsible with the licensee for the
payment of any Royalty Payments. Xxxxx represents and warrants that, under its
agreements with XXX, Xxxxx will be entitled to book sales of the Product from
and after the Closing. Xxxxx covenants and agrees that no termination, waiver,
modification, release or amendments of, to or from its agreements with XXX will
be made voluntarily by Xxxxx from and after the Effective Date without the prior
written consent of BMS (which consent shall not be unreasonably withheld) if
such change would adversely affect Galen's ability to book sales of the
11
EXECUTION COPY
Product; provided that the foregoing consent obligation shall not apply to
termination by Xxxxx of an agreement for a material breach by XXX.
5.2 End User. There shall be no obligation to pay royalties to BMS under
this Article 5 on sales of Product between Xxxxx, its Affiliates, its licensees
and its Third Party Partners, but in such instances the obligation to pay
royalties shall arise only upon the last sale by Xxxxx, its Affiliates, its
licensees, or Galen's Third Party Partners to unrelated Third Parties, such as
end users and distributors. Royalties due under this Article 5 shall be deemed
to accrue when Product is shipped or billed, whichever event shall first occur.
5.3 Manner of Payment. All payments hereunder shall be in United States
dollars in immediately available funds and shall be made by electronic funds
transfer to such bank account as may be designated from time to time by BMS.
5.3.1 Late Payment. Any payment, including, without limitation,
royalty payments, made by Xxxxx hereunder after the date such payment is due,
shall bear interest at the lesser of: (a) two percent (2%) above the prime
commercial lending rate as published by Citibank, N.A., New York, New York, as
of the date such payment was due, or (b) the maximum rate permitted by
applicable law (the "Interest Rate"). The Interest Rate shall be calculated from
the date payment was due until actually received by BMS.
5.3.2 Underpayment. If an Inspection (as defined in Section 5.7
hereafter) reveals an underpayment, then Xxxxx shall promptly make up such
underpayment with interest at the Interest Rate.
5.4 Withholding Taxes. Where required to do so by applicable Law, Xxxxx
shall withhold taxes required to be paid to a taxing authority in connection
with any Royalty Payments to BMS hereunder, and Xxxxx shall promptly furnish BMS
with satisfactory evidence of such withholding and payment. Xxxxx shall
cooperate with BMS in obtaining exemption from withholding taxes where available
under applicable Law.
5.5 Statements. All Royalty Payments made to BMS hereunder shall be made
within sixty (60) days after the end of each calendar quarter during the Royalty
Term and shall be accompanied by a written statement setting forth in reasonable
detail the calculation thereof, including the gross amount billed or invoiced by
Xxxxx, its Affiliate, its sublicensees and any Third Party Partner for the sale
and/or distribution for the Product, permitted itemized deductions against such
gross amount, and Net Sales, calculated pursuant to Section 5.1, both in the
aggregate and by each shelf keeping unit (SKU).
5.6 Record Keeping. Xxxxx shall keep and maintain, and shall cause its
Affiliates, sublicensees and Third Party Partners, to keep and maintain,
complete and accurate books of account and records of all sales of the Products
in a manner adequate to enable Xxxxx to calculate Net Sales and shall retain
such books and records for a period of three years from the last day of the
calendar quarter in which such sales were made.
12
EXECUTION COPY
5.7 Inspection. Upon at least two weeks' prior written notice, Xxxxx
shall, and shall cause its Affiliates, its sublicensees and Third Party Partners
to make such books of account and records available for inspection by BMS
representatives during normal business hours at the principal offices of such
entity, as the case may be, for the sole purpose of determining whether
appropriate accounting and payment have been made hereunder (the "Inspection").
Such review and access shall be permitted once per year and only with respect to
the three-year period prior to the year in which the audit occurs. Such BMS
representatives shall be subject to such reasonable and appropriate
confidentiality obligations as may be required and after the Inspection may
reveal to BMS only whether there exist any errors in payment and, if an error
exists, the amount of such error(s) and the calculation thereof, and no
additional or any other information. Results of any such examination shall be
made available to both Parties. BMS shall bear the cost of any such Inspection;
provided, that in the event the Inspection discloses that any payments made to
BMS hereunder for any accounting period were deficient by more than five percent
(5%), Xxxxx shall reimburse BMS for the cost of such Inspection. If Net Sales or
payments have been understated, unpaid amounts shall be paid promptly in
accordance with this Article 5.
5.8 Diligent Efforts. Xxxxx will use Diligent Efforts to promote and
commercialize the Product in the Territory during the Royalty Term in accordance
with applicable Law.
5.9 Adverse Events. Except as set forth in the Asset Purchase Agreement,
BMS shall have no responsibility or liability for the maintenance of any
Regulatory Approvals for the Product or for the reporting of adverse events to
the FDA as required under applicable Law with respect to the Product after the
Closing Date.
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES.
6.1 Mutual Representations and Warranties. Each Party represents and
warrants to each of the other Parties that, as of the Effective Date:
6.1.1 Representations of Authority. It has full corporate right,
power and authority to enter into this Agreement and to perform its respective
obligations under this Agreement and, subject to Section 6.1.2 hereof, that it
has the right to grant to the other the rights granted pursuant to this
Agreement.
6.1.2 Consents. Subject to the execution and delivery of the Consent
Agreement in the form attached as Exhibit B hereto, all necessary consents,
approvals and authorizations of all Governmental or Regulatory Authorities and
other persons required to be obtained by it as of the Effective Date in
connection with the execution, delivery and performance of this Agreement have
been or, if not reasonably capable of being obtained prior to the Effective
Date, shall be obtained.
6.1.3 No Conflict. Notwithstanding anything to the contrary in this
Agreement, but subject to the execution and delivery of the Consent Agreement in
the form attached as Exhibit B hereto, the execution and delivery of this
Agreement, the performance of such Party's obligations in the conduct of this
Agreement and the licenses and sublicenses to be granted pursuant to this
Agreement (a) do not and will not conflict with or violate any requirement of
13
EXECUTION COPY
applicable Laws existing as of the Effective Date and (b) do not and will not
conflict with, violate, breach or constitute a default or require any consent
under, any contractual obligations of such Party or any of its Affiliates
existing as of the Effective Date, except for such consents as shall have been
obtained prior to the Effective Date hereof.
6.1.4 Enforceability. This Agreement has been duly executed by it,
has been authorized by all necessary corporate action, and is a legal and valid
obligation binding upon it and is enforceable in accordance with its terms.
6.2 Representation of Xxxxx. Xxxxx represents and warrants that it will
not provide any Option Notice under this Agreement unless and until it has
sufficient funds and/or financing available to it to consummate the Purchase
Transaction.
6.3 Representation of BMS. BMS represents and warrants that is has been
duly and validly substituted for X.X. Xxxxxx & Sons, Inc. as a party to the XXX
License Agreement.
ARTICLE 7 - TERMINATION OF EXISTING AGREEMENTS; NOTICES
7.1 Termination of Existing Agreements at Closing. Upon Closing, the
Parties agree that the Copromotion Agreement shall automatically terminate. All
terms and conditions which are intended to survive termination under the
Copromotion Agreement and that would otherwise have survived if such agreement
had terminated upon expiration of the term thereof shall continue to survive the
termination of such agreement pursuant to this Section 7.1.
7.2 Release and Waiver. At the Closing Date, Xxxxx, on behalf of itself
and its Affiliates, including its and their administrators, successors, assigns,
officers, directors, employees, agents, and trustees (all of the foregoing being
referred to in this paragraph as "Releasors"), hereby releases, acquits and
forever discharges BMS and its Affiliates, including its and their
administrators, successors, assigns, officers, directors, employees, attorneys,
agents, and trustees (all of the foregoing referred to in this paragraph as
"Releasees") from all debts, demands, actions, causes of action, suits,
accounts, torts, damages and any and all claims, defenses, offsets, judgments,
demands and liabilities whatsoever, of every name and nature, both at law and in
equity, known or unknown, suspected or unsuspected, accrued or unaccrued,
arising out of or in connection with any breach by BMS of its performance
obligations to Xxxxx under the Copromotion Agreement prior to the Closing Date;
provided, however, that nothing contained herein is intended to or shall
release, waive or discharge any obligations that a Party may have with respect
to: (i) its indemnification and hold harmless obligations (and any defense
obligations associated therewith) that survive under the Copromotion Agreement,
as more fully set forth in Section 7.2.1 hereof, (ii) BMS' obligations to pay
Performance Compensation (as defined in the Copromotion Agreement) or expenses
required to be reimbursed to Xxxxx under the Copromotion Agreement for
copromotion services provided by Xxxxx prior to Closing, (iii) Galen's
obligation to reimburse BMS for expenses required to be reimbursed to BMS under
the Copromotion Agreement and arising prior to the Closing Date; or (iv) breach
after the Closing Date of a Party's or its Affiliates' obligations under any of
the Ancillary Agreements that survive the termination of such Ancillary
Agreements. This Article 7.2 shall survive the Closing and any termination of
this Agreement.
14
EXECUTION COPY
7.2.1 Indemnification Obligations Under Copromotion Agreement. BMS
shall continue to indemnify Xxxxx, and Xxxxx shall continue to indemnify BMS, as
provided in Article 14 and Section 5.5 of the Copromotion Agreement with respect
to Product sold by BMS prior to the Closing Date. Xxxxx shall continue to
indemnify BMS as provided in Section 3.6.8 of the Copromotion Agreement.
7.3 Notices. Unless otherwise explicitly set forth herein, any notice
required or permitted to be given hereunder shall be in writing and shall be
delivered personally by hand, or sent by reputable overnight courier, signature
required, to the addresses of each Party set forth below or to such other
address or addresses as shall be designated in writing in the same matter:
(a) If to BMS:
Xxxxxxx-Xxxxx Squibb U.S. Pharmaceutical Group
000 Xxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President - U.S. Pharmaceutical Group
with a copy to the attention of the "Vice President and Senior Counsel
- USPG" at the same address and a copy to the attention of the Vice
President - Alliance Management at Xxxxxxx-Xxxxx Squibb Company, Xxxxx
000 xx Xxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000-0000.
(b) If to Xxxxx:
Xxxxx (Chemicals) Limited.
0 Xxxxxxxx Xxxx
Xxx Xxxxxxxxx, Xx. Xxxxxx
Attention: Senior Vice President - Finance
with a copy to the attention of the "Senior Vice President, Business
Development and General Counsel" at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000.
All notices shall be deemed given when received by the addressee.
ARTICLE 8 - TERM AND TERMINATION
8.1 Term. This Agreement shall commence upon the Effective Date and,
unless sooner terminated by mutual written consent of all the Parties, shall
terminate on the earlier of (i) the termination of the Copromotion Agreement in
accordance with its terms, or (ii) the Closing; provided that Section 4.2.3 and
Articles 5, 7 and 9 shall survive any such termination pursuant to clauses (i)
or (ii) above.
15
EXECUTION COPY
ARTICLE 9 - MISCELLANEOUS PROVISIONS.
9.1 Assignment. No 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 each Party (i) may assign its rights and obligations
hereunder to an Affiliate without the prior consent of the other Party
(although, in such event, the assigning Party shall remain jointly and severally
responsible and liable with such Affiliate for the performance of all of
representations, warranties, obligations and agreements of the assigning Party
set forth herein) and (ii) may assign its rights and obligations to a successor
(whether by merger, consolidation, reorganization or other similar event) or
purchaser of all or substantially all of its business assets relating to its
pharmaceutical business; provided, that such successor or purchaser has agreed
in writing to assume all of such Party's rights and obligations hereunder and a
copy of such assumption is provided to the other Party hereunder.
9.2 Non-Waiver. Any failure on the part of a Party to enforce at any time
or for any period of time any of the provisions of this Agreement shall not be
deemed or construed to be a waiver of such provisions or of any right of such
Party thereafter to enforce each and every such provision on any succeeding
occasion or breach thereof.
9.3 Entirety of Agreement. This Agreement, together with the Exhibits
hereto, and the Ancillary Agreements where herein referenced, contains the
entire understanding of the Parties with respect to the subject matter hereof
and thereof and supersedes all previous and contemporaneous verbal and written
understandings, agreements, representations and warranties with respect to such
subject matter or on which the Parties may have relied. This Agreement (and any
provision or term hereof) may be released, waived, changed or supplemented only
by a written agreement signed by an officer or other authorized representative
of the Party against whom enforcement of any release, waiver, change or
supplement is sought. This Agreement shall not be strictly construed against any
Party hereto. Paragraph headings are for convenience only and shall not be
considered in interpreting this Agreement.
9.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE OTHER THAN SECTIONS 5-1401 OF
THE NEW YORK GENERAL OBLIGATIONS LAW.
9.5 Relationship of the Parties. In making and performing this Agreement,
the Parties are acting, and intend to be treated, as independent entities and
nothing contained in this Agreement shall be construed or implied to create an
agency, partnership, joint venture, or employer and employee relationship
between any Party with the other Party. Except as otherwise expressly provided
herein, no Party may act on behalf of the other Party, and no Party may make (or
has any authority to make) any representation, warranty or commitment, whether
16
EXECUTION COPY
express or implied, on behalf of the other Party or incur any charges or
expenses for or in the name of the other Party. No Party shall be liable for the
acts of the other Party. The relationship of the Parties under this Agreement
is, and is intended to be, one of independent contractors hereunder.
No Party shall have any responsibility for the hiring, firing,
compensation or benefits of the other Party's employees, and all compensation
and benefits to be paid to any employee or representative of a Party shall be
the responsibility of the Party engaging such individual. No Party may create,
assume, or impose any contractual or other obligation or liability on behalf of
the other Party without said Party's duly authorized prior written approval.
9.6 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.
9.7 Consent to Jurisdiction. Each Party irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding arising
out of this Agreement, the Asset Purchase Agreement or any transaction
contemplated hereby or thereby. Each Party agrees to commence any such action,
suit or proceeding either in the United States District Court for the Southern
District of New York or if such suit, action or other proceeding may not be
brought in such court for jurisdictional reasons, in the Supreme Court of the
State of New York, New York County. Each Party further agrees that service of
any process, summons, notice or document by registered mail to such Party's
respective address set forth above shall be effective service of process for any
action, suit or proceeding in New York with respect to any matters to which it
has submitted to jurisdiction in this Section 9.7. Each Party irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement, the Asset Purchase Agreement, or
the transactions contemplated hereby and thereby in (i) the Supreme Court of the
State of New York, New York County or (ii) the United States District Court for
the Southern District of New York, and hereby and thereby further irrevocably
and unconditionally waives and agrees not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
9.8 Waiver of Jury Trial. Each Party hereto hereby waives to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
respect to any litigation directly or indirectly arising out of, under or in
connection with this Agreement or any Related Instrument. Each Party hereto (a)
certifies that no representative, agent or attorney of any other Party has
represented, expressly or otherwise, that such other Party would not, in the
event of litigation, seek to enforce that foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement and the Related Instruments, as applicable, by, among other things,
the mutual waivers and certifications in this Section 9.8.
17
EXECUTION COPY
9.9 Attorney Fees. A Party in breach of this Agreement shall, on demand,
indemnify and hold harmless each other Party for and against all reasonable
out-of-pocket expenses, including legal fees, incurred by such other Party by
reason of the enforcement and protection of its rights under this Agreement. The
payment of such expenses is in addition to any other relief to which such other
Party may be entitled.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
18
EXECUTION COPY
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date set forth above.
XXXXXXX-XXXXX XXXXXX XXXXX (CHEMICALS) LIMITED
COMPANY
By: By:
------------------------ -----------------------------
Name: Name:
------------------------ ----------------------------
Title: Title:
------------------------ --------------------------
19
LIST OF EXHIBITS
Exhibit A - Form of Asset Purchase Agreement
Exhibit B - Consent Agreement
Exhibit C - XXX License Agreement
Exhibit D - XXX Supply Agreement
20
FINAL FORM
================================================================================
ASSET PURCHASE AGREEMENT
between
XXXXXXX-XXXXX SQUIBB COMPANY
as Seller
and
XXXXX (CHEMICALS) LIMITED
as Purchaser
Dated as of {_________}
================================================================================
FINAL FORM
TABLE OF CONTENTS
PAGE
ARTICLE I. SALE AND PURCHASE OF ASSETS...................................... 1
SECTION 1.01. Purchase and Sale..................................... 1
SECTION 1.02. Transfer of Assets.................................... 1
SECTION 1.03. Assumed Liabilities................................... 3
SECTION 1.04. Closing............................................... 5
SECTION 1.05. Risk of Loss.......................................... 6
SECTION 1.06. Up-Front Cash Purchase Price Adjustment............... 6
SECTION 1.07. Unanticipated Discounting Purchase Price Adjustment... 7
SECTION 1.08. Inventory............................................. 7
SECTION 1.09. Rebates; Chargebacks; Returns Handling................ 8
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF SELLER........................ 10
SECTION 2.01. Organization.......................................... 11
SECTION 2.02. Authority; Execution and Delivery; Enforceability..... 11
SECTION 2.03. Consents and Approvals; No Violations................. 11
SECTION 2.04. Financial Statements.................................. 12
SECTION 2.05. [Intentionally omitted]............................... 12
SECTION 2.06. Title of Assets....................................... 12
SECTION 2.07. Intellectual Property................................. 12
SECTION 2.08. Contracts............................................. 13
SECTION 2.09. Compliance with Law................................... 14
SECTION 2.10. Litigation............................................ 15
SECTION 2.11. Brokers or Finders.................................... 16
SECTION 2.12. Registrations......................................... 16
i
FINAL FORM
SECTION 2.13. Medical Information................................... 16
SECTION 2.14. Websites and Domain Names............................. 16
SECTION 2.15. Conduct of Business................................... 16
SECTION 2.16. Knowledge............................................. 16
SECTION 2.17. Inventory............................................. 16
SECTION 2.18. Conduct Since Option Acceptance Date................. 17
SECTION 2.19. No Other Representations or Warranties................ 17
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF PURCHASER.................... 17
SECTION 3.01. Organization.......................................... 17
SECTION 3.02. Authority; Execution and Delivery; Enforceability..... 17
SECTION 3.03. Consents and Approvals; No Violations................. 17
SECTION 3.04. Brokers and Finders................................... 18
SECTION 3.05. No Proceedings........................................ 18
SECTION 3.06. Availability of Funds................................. 18
SECTION 3.07. No Other Purchaser Representations or Warranties...... 18
ARTICLE IV. COVENANTS....................................................... 19
SECTION 4.01. Conduct of the Business............................... 19
SECTION 4.02. Access to Information................................. 19
SECTION 4.03. Confidentiality....................................... 20
SECTION 4.04. Best Efforts.......................................... 21
SECTION 4.05. Regulatory Approvals.................................. 21
SECTION 4.06. Transfer Taxes; Purchase Price Allocation............. 21
SECTION 4.07. Publicity............................................. 22
SECTION 4.08. Supplemental Disclosure............................... 22
SECTION 4.09. Further Assurances.................................... 22
ii
FINAL FORM
SECTION 4.10. No Use of Certain Names............................... 23
SECTION 4.11. Bulk Transfer Laws.................................... 23
SECTION 4.12. Customer Notifications................................ 23
SECTION 4.13. Termination of Contracts.............................. 24
SECTION 4.14. Post-Closing Cooperation.............................. 24
SECTION 4.15. Covenant Not to Compete............................... 25
SECTION 4.16. NDC................................................... 25
SECTION 4.17. Returns............................................... 25
SECTION 4.18. NDA Maintenance; Adverse Experience................... 26
SECTION 4.19. Audited Financial Statements.......................... 26
ARTICLE V. CONDITIONS....................................................... 27
SECTION 5.01. Deliveries at Closing................................. 27
SECTION 5.02. Conditions to Each Party's Obligations................ 27
SECTION 5.03. Conditions Specific to Obligations of Purchaser....... 28
SECTION 5.04. Conditions to Obligations of Seller................... 29
SECTION 5.05. Waiver of Closing Conditions.......................... 29
SECTION 5.06. Frustration of Closing Conditions..................... 29
ARTICLE VI. TERMINATION AND AMENDMENT....................................... 30
SECTION 6.01. Termination........................................... 30
SECTION 6.02. Effect of Termination................................. 30
SECTION 6.03. Amendments and Waivers................................ 30
ARTICLE VII. SURVIVAL; INDEMNIFICATION...................................... 31
SECTION 7.01. Survival of Representations........................... 31
SECTION 7.02. Indemnification by Seller............................. 31
SECTION 7.03. Indemnification by Purchaser.......................... 32
iii
FINAL FORM
SECTION 7.04. Calculation of Losses................................. 32
SECTION 7.05. Termination of Indemnification........................ 32
SECTION 7.06. Procedures............................................ 33
SECTION 7.07. Sole Remedy; No Additional Representations............ 34
SECTION 7.08. Limitations on Liability.............................. 35
ARTICLE VIII. MISCELLANEOUS................................................. 36
SECTION 8.01. Notices............................................... 36
SECTION 8.02. Definitions; Interpretation........................... 36
SECTION 8.03. Descriptive Headings.................................. 43
SECTION 8.04. Counterparts.......................................... 43
SECTION 8.05. Entire Agreement...................................... 43
SECTION 8.06. Fees and Expenses..................................... 43
SECTION 8.07. Governing Law......................................... 43
SECTION 8.08. Specific Performance.................................. 43
SECTION 8.09. Assignment............................................ 44
SECTION 8.10. Successors and Assigns................................ 44
SECTION 8.11. Severability.......................................... 44
SECTION 8.12. Consent to Jurisdiction............................... 44
SECTION 8.13. Waiver of Jury Trial.................................. 45
SECTION 8.14. Attorney Fees......................................... 45
Exhibit A -- Form of Assumption Agreement
Exhibit B -- Form of General Assignment and Xxxx of Sale
Exhibit C -- Form of Assignment of Internet Names
Exhibit D -- Form of Assignment of Trademarks
iv
FINAL FORM
Schedule 1.01(a) -- Up-Front Cash Purchase Price
Schedule 1.04(c) -- Account of Seller
Schedule 2.03(a) -- Violations
Schedule 2.03(b) -- Consents and Approvals
Schedule 2.07(a) -- Intellectual Property
Schedule 2.07(b) -- Exceptions to Intellectual Property
Schedule 2.08 -- Contracts with Respect to the Business
Schedule 2.09(a) -- Exceptions to Compliance with Law
Schedule 2.09(b)(i) -- Exceptions to FDA Compliance
Schedule 2.09(b)(ii) -- FDA Notice Since January 1, 1996
Schedule 2.10 -- Litigation
Schedule 2.12 -- Registrations
Schedule 2.14 -- Websites and Domain Names
Schedule 4.01 -- Exceptions to Conduct of Business in the Ordinary Course
Schedule 7.02(b) -- Limitations on Seller's Indemnification Obligations
Schedule 8.02(a) -- Representatives
v
FINAL FORM
ASSET PURCHASE AGREEMENT dated as of _________, 200__ (the "Agreement
Date") between Xxxxxxx-Xxxxx Squibb Company, a Delaware corporation ("Seller"),
and Xxxxx (Chemicals) Limited, a Republic of Ireland corporation ("Purchaser").
Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, the Acquired Assets (Section 8.02(b) identifies the sections of
this Agreement in which this term and other capitalized terms used herein and
not defined in Section 8.02(a) are defined). In addition, Purchaser has agreed
to assume from Seller the Assumed Liabilities.
Accordingly, the Parties hereby agree as follows:
ARTICLE I.
SALE AND PURCHASE OF ASSETS
SECTION 1.01. PURCHASE AND SALE. On the terms and subject to the
conditions of this Agreement, at the Closing, Seller shall, and shall cause its
Affiliates to, sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser shall purchase from Seller and its Affiliates, all the right, title
and interest of Seller and such Affiliates in, to and under the Acquired Assets,
for (a) the amount set forth on Schedule 1.01(a), payable in immediately
available funds at Closing as set forth in Section 1.04, minus the Up-Front Cash
Purchase Price adjustment, if any, determined in accordance with Section
1.06(a), as further adjusted pursuant to Section 1.07 (the "Up-Front Cash
Purchase Price"), (b) the royalties payable by Purchaser to Seller following the
Closing under Article 3 of the Option Agreement (the "Royalties") (the Up-Front
Purchase Price and the Royalties referred to herein as the "Purchase Price"),
(c) the payments in respect of Inventory required by Section 1.08, and (d) the
assumption by Purchaser of the Assumed Liabilities. The purchase and sale of the
Acquired Assets and the assumption of the Assumed Liabilities are referred to in
this Agreement collectively as the "Acquisition".
SECTION 1.02. TRANSFER OF ASSETS. (a) The term "Acquired Assets" means
all Seller's and its Affiliates' rights, title and interest in, to and under
those certain assets set forth below:
(i) the Intellectual Property;
(ii) the Inventory;
(iii) Seller's right, title and interest in and to any and all
regulatory files (including correspondence with regulatory
authorities), registrations (including any IND and NDA for the
Product), applications, approvals, licenses and permits
exclusively relating to the Business or the Acquired Assets
(including the Products) as of the Closing Date from any
applicable regulatory authority in the Territory, in each case to
the extent transferable in light of legal, contractual, and
regulatory considerations;
(iv) Seller's rights and interests in and to the XXX License Agreement
and XXX Supply Agreement, where and to the extent arising from and
after the Closing;
FINAL FORM
(v) all marketing materials, research data, customer and sales
information, product literature, promotional materials and data,
advertising and display materials and all training materials in
whatever medium (e.g., audio, visual or print) exclusively related
to the Business or to the Acquired Assets (including the
Products), in each case to the extent transferable in light of
legal, contractual and practical considerations;
(vi) all records, customer contracts, and recorded information,
including customer and supplier lists, that are exclusively
related to the Business or the Acquired Assets, in each case to
the extent transferable in light of legal, contractual and
practical considerations, other than records and recorded
information relating to the XXX Patents and XXX Technical
Information; and
(vii) all the rights relating to the Acquired Assets set forth in
clauses (i) and (iii) above, including all claims, counterclaims,
credits, causes of action, choses in action, rights of recovery
and rights of setoff and Third Party warranties, guaranties and
similar contractual rights as to Third Parties held by or in favor
of Seller or any of its Affiliates.
(b) [Intentionally omitted]
(c) Purchaser acknowledges and agrees that it is not acquiring from
Seller or its Affiliates any rights, title or interest in, to and under any of
the following assets (the "Excluded Assets"):
(i) any real estate owned or leased by Seller or any of its
Affiliates;
(ii) all cash and cash equivalents of Seller or any of its Affiliates;
(iii) any patent rights, including without limitation the XXX Patents;
(iv) any technical information or know-how relating to the manufacture
of the Compound or Product, including without limitation the XXX
Technical Information;
(v) the Names;
(vi) all Accounts Receivable;
(vii) any assets, properties or rights of Seller or any of its
Affiliates other than the Acquired Assets;
(viii) except as conveyed pursuant to Section 1.08, any inventories of
the Business, including raw materials, goods in process, finished
goods, packaging supplies and labels;
(ix) any manufacturing equipment and packaging assets used in the
manufacture of the Products, and any warranty rights applicable to
such manufacturing equipment;
2
FINAL FORM
(x) any refund or credit of Taxes attributable to any Excluded Tax
Liability;
(xi) all rights, claims and credits of Seller or any of its Affiliates,
relating to any Excluded Asset or any Excluded Liability,
including any such items arising under insurance policies and all
guarantees, warranties, indemnities and similar rights in favor of
Seller or any of its Affiliates relating to any Excluded Asset or
any Excluded Liability;
(xii) all rights of Seller or any of its Affiliates under this Agreement
and the Ancillary Agreements and Related Instruments; and
(xiii) all Retained Information, except as set forth in Section 4.02(b).
(d) Purchaser shall acquire the Acquired Assets free and clear of all
liabilities, obligations and commitments of Seller or any of its Affiliates,
other than the Assumed Liabilities, and free and clear of all Liens, other than
Permitted Liens.
SECTION 1.03. ASSUMED LIABILITIES. (a) Upon the terms and subject to the
conditions of this Agreement, Purchaser shall assume, effective as of the
Closing, and from and after the Closing, Purchaser shall pay, perform and
discharge when due, only the following liabilities, obligations and commitments
of Seller and its Affiliates (the "Assumed Liabilities").
(i) except to the extent set forth in Section 1.03(c)(ii), all
liabilities arising out of or relating to any product liability,
breach of warranty or similar claim for injury to person or
property, regardless of when asserted, which resulted from the use
or misuse of the Products or otherwise related to the Products
(including all Proceedings relating to any such liabilities);
(ii) except to the extent set forth in Section 1.03(c)(iii), all
liabilities arising out of or relating to the return of any
Product on or after the Closing Date, whether or not sold by
Seller or its Affiliates prior to, on or after the Closing Date;
(iii) except to the extent set forth in Section 1.03(c)(iii), all
liabilities arising out of or relating to any Rebate Program
related to any Product;
(iv) all liabilities for Taxes arising out of or relating to, directly
or indirectly, the Business or the Acquired Assets (including the
Products) or the ownership, sale or lease of any of the Acquired
Assets, other than the Excluded Tax Liabilities, in addition to
those attributed to Purchaser pursuant to Section 4.06;
(v) except as set forth in Section 1.03(c), Seller's obligations under
the XXX License Agreement and XXX Supply Agreement, in each case
to the extent transferable in light of legal, contractual, and
regulatory considerations; and
(vi) all other liabilities, obligations and commitments of whatever
kind and nature, primary or secondary, direct or indirect,
absolute or contingent, known or unknown, whether or not accrued,
arising out of or relating to, directly or indirectly, the
Business or the Acquired Assets (including the Products) or the
3
FINAL FORM
ownership, sale or lease of any of the Acquired Assets but in each
case only to the extent related to the conduct of the Business or
the use of the Acquired Assets for any period on or after the
Closing Date.
(b) Purchaser and Seller hereby agree to reimburse one another, U.S.
dollar for dollar, in the event that (i) any of their or their respective
Affiliate's customers offset, against accounts payable by such customer to
Seller or Purchaser or their respective Affiliates, the cost of any Product
returned by such customer, or (ii) they or any of their respective Affiliates
are required to issue a credit for the account of any customer for returns, in
each case which are the responsibility of the other Party hereto pursuant to
this Section 1.03. Seller and Purchaser agree to, and to cause their respective
Affiliates to, provide notice to one another of any such offset or issuance of
credit for which such Party or its Affiliate is entitled to be reimbursed
pursuant to this Section 1.03(b). Payment shall be made promptly following
receipt of notice of any such offset by or issuance of a credit to a customer
(together with supporting documentation). Seller and Purchaser shall, and Seller
shall cause its Affiliates to, cooperate to ensure that a customer does not
offset returns of any Product against both Seller (or any of its Affiliates) and
Purchaser.
(c) Notwithstanding any other provision of this Agreement or any Related
Instrument, Purchaser shall not assume any Excluded Liability, each of which
shall be retained and paid, performed and discharged when due by Seller and its
Affiliates. The term "Excluded Liability" shall mean:
(i) accounts payable and liabilities, obligations and commitments of
Seller or any of its Affiliates for materials and services with
respect to the manufacture of any Product (it being understood
that these obligations are ones that are not covered by Sections
1.03(a)(i), (ii) or (iii));
(ii) all liabilities arising out of or relating to any product
liability, breach of warranty or similar claim for injury to
person or property, regardless of when asserted, which resulted
from the use or misuse of Products manufactured by or on behalf of
Seller and shipped to a Third Party prior to the Closing (the
"Shipped Products") or otherwise related to the Shipped Products
(including all Proceedings relating to any such liabilities) (it
being understood that these obligations are ones that are not
covered by Sections 1.03(c)(i) or (c)(iii));
(iii) all liabilities arising out of or relating to any Rebate Programs
related to any Shipped Product;
(iv) any Tax payable with respect to any business, asset, property or
operation of Seller or any member of any affiliated group of which
Seller is a member (including any Taxes relating to or arising out
of the operation of the Business) for any Pre-Closing Tax Period,
including any Tax for which Seller is responsible pursuant to
Section 4.06 ("Excluded Tax Liability");
(v) any liability, obligation or commitment of Seller or any of its
Affiliates arising out of or relating to any Excluded Asset;
4
FINAL FORM
(vi) any liability, obligation or commitment of any kind arising out of
or relating to employment, compensation or benefits (including
severance) for the present or future employees of Seller or any of
its Affiliates;
(vii) all liabilities arising out of or relating to (A) any
investigation by any Governmental Entity relating to Shipped
Products (a "Government Investigation") or (B) any private
litigation to the extent that such litigation relates to a
Government Investigation;
(viii) Seller's obligations and liabilities under the XXX License
Agreement and XXX Supply Agreement, to the extent related to the
period prior to the Closing; and
(ix) except to the extent specifically provided in Section 1.03(a) (i),
(ii), (iii) and (iv), all other liabilities, obligations and
commitments of whatever kind and nature, primary or secondary,
direct or indirect, absolute or contingent, known or unknown,
whether or not accrued, arising out of or relating to, directly or
indirectly, the Business or the Acquired Assets (including the
Products) but only to the extent related to any period prior to
the Closing Date.
(d) Each of Purchaser's and Seller's obligations under this Section 1.03
will not be subject to offset or reduction by reason of any actual or alleged
breach of any representation, warranty or covenant contained in this Agreement
or any Related Instrument or any right or alleged right to indemnification
hereunder.
SECTION 1.04. CLOSING.
(a) The consummation of the transactions contemplated by this Agreement
("Closing") will, subject to the satisfaction or waiver of the conditions set
forth in Article V hereof, take place at 9:00 a.m. on {_________________} or at
such other time as shall be mutually agreed upon by the Parties at the offices
of Xxxxxxx-Xxxxx Squibb Company, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
date on which Closing occurs is referred to herein as the "Closing Date."
(b) At Closing, Seller shall deliver or cause to be delivered to
Purchaser, the following: (i) a duly executed Xxxx of Sale for the Acquired
Assets; (ii) the Seller's Officer's Certificate; (iii) a duly executed
Assignment of Trademarks; and (iv) a duly executed Assignment of Internet Names.
(c) At Closing, Purchaser shall deliver to Seller, the following: (i)
cash in the aggregate amount set forth in Schedule 1.01(a) by electronic funds
transfer of immediately available United States Dollars in the amounts and to
the accounts of such entities as are designated by Seller on Schedule 1.04(c)
(with such entities to designate to Purchaser in writing not less than two (2)
business days prior to Closing the relevant account numbers of the accounts to
which such transfers should be made); (ii) a duly executed Assignment of
Trademarks; (iii) a duly executed Assignment of Internet Names; (iv) a duly
executed instrument of assumption of the Assumed Liabilities substantially in
the form of Exhibit A (the "Assumption Agreement"); and (v) the Purchaser's
Officer's Certificate.
5
FINAL FORM
SECTION 1.05. RISK OF LOSS.
Until Closing, any loss of or damage to the Acquired Assets from fire,
casualty or any other occurrence shall be the sole responsibility of Seller or
its Affiliates, as applicable. At Closing, title to the Acquired Assets shall be
transferred to Purchaser and Purchaser shall thereafter bear all risk of loss
associated with the Acquired Assets and be solely responsible for procuring
adequate insurance to protect the Acquired Assets against any such loss.
SECTION 1.06. UP-FRONT CASH PURCHASE PRICE ADJUSTMENT.
(a) The Up-Front Cash Purchase Price shall be adjusted by an amount (the
"Pipeline Adjustment") equal to the difference between (i) Seller's total dollar
volume sales of the Product for the twelve months ended on the Closing Date and
(ii) Seller's calculation of the total dollar volume sales of the Product for
the same twelve-month period as determined in the same manner as in the
Copromotion Agreement for purposes of calculating Purchaser's Performance
Compensation thereunder.
(b) Within sixty (60) days after the Closing Date, Seller shall send to
Purchaser a written calculation of the Pipeline Adjustment. Seller shall give
Purchaser access to all books and records and personnel of Seller reasonably
necessary to verify such calculation. Within ninety (90) days of Seller sending
such calculation to Purchaser, Purchaser may object in writing to the
calculation. If Purchaser fails to object within such ninety-day period, the
Pipeline Adjustment shall become final and binding. If Purchaser objects within
such ninety-day period, the Parties shall use reasonable efforts to agree upon
the calculation within thirty (30) days of Purchaser sending its objections to
Seller. If the Parties agree within such period, the Pipeline Adjustment as so
agreed shall become final and binding. If the Parties are unable to agree within
such period, the Parties shall submit the disagreement to arbitration. Such
arbitration shall be final and binding upon the Parties. Such arbitration shall
be held in New York, New York, or such other location as Seller and Purchaser
may mutually agree. There shall be one (1) arbitrator, who shall be suitably
experienced in matters relating to valuations within the pharmaceutical industry
and who, unless Seller and Purchaser can agree on the selection of the
arbitrator within sixty (60) days after receipt of Purchaser's written objection
shall be selected by the Rules of the American Arbitration Association; provided
that such arbitrator must be an individual who (i) is not a current employee or
director of, or consultant to, either of the Parties or of an entity which
currently has a commercial alliance or consulting relationship with either of
the Parties, (ii) has disclosed any previous affiliation with one of the Parties
of the type described in clause (i), and (iii) is mutually acceptable to the
Parties. The arbitrator will render a written decision within one (1) month
after the date that the arbitrator is appointed. The decision of the arbitrator
will be final and binding on the Parties. Each Party to the arbitration shall
bear its own expenses of such arbitration and shall evenly share the costs and
fees of the arbitrator.
(c) Seller shall pay to Purchaser an amount equal to the Pipeline
Adjustment in immediately available funds within three (3) business days of its
final determination.
(d) Notwithstanding anything to the contrary set forth in this Agreement,
except as provided in Section 1.07 of this Agreement, the foregoing shall be
Purchaser's sole and exclusive remedy with respect to Seller's (and its
Affiliates') sales practices related to incentives or other
6
FINAL FORM
inducements to purchase the Product offered, or volume of the Product sold, to
Seller's (or such Affiliates') customers, in each case, prior to the Closing
Date. Purchaser shall not be entitled to recovery under Article VII for any
Losses arising from any breaches of representations and warranties or breaches
of covenants in this Agreement or in any Related Instrument relating to such
sales practices or volume of sales, except to the extent arising out of a Third
Party Claim.
SECTION 1.07. UNANTICIPATED DISCOUNTING PURCHASE PRICE ADJUSTMENT.
(a) In determining the Up-Front Cash Purchase Price, Seller and Purchaser
have assumed that Incentive Discounts (as defined in Section 1.07(b)) in the
aggregate for all presentations of the Product for any given full calendar
quarter from and after the Effective Date (as defined in the Option Agreement)
but prior to the Closing Date will not exceed in the aggregate fifteen percent
(15%) or more of all Gross Sales of the Product for such calendar quarter
("Unanticipated Discounting") (it being understood that Seller has sole and
absolute discretion to establish pricing for the Product and its discounting,
which discounting may or may not exceed 15%). However, if Unanticipated
Discounting shall have occurred during any given full calendar quarter, from and
after the Effective Date (as defined in the Option Agreement) but prior to the
Closing Date, then the Up-Front Cash Purchase Price shall be reduced according
to the following formula:
D = A / 85 / B X C
A = the Up-Front Cash Purchase Price;
B = the number of calendar quarters between the Effective Date (as
defined in the Option Agreement) and the Closing Date;
C = the number of calendar quarters during which Unanticipated
Discounting occurred between the Effective Date (as defined in the
Option Agreement) and the Closing Date; and
D = the amount of the applicable reduction to the Up-Front Cash
Purchase Price.
(b) For purposes of this Section 1.07, "Incentive Discounts" shall mean
all sales allowances, including trade, quantity and cash discounts and any other
rebates, chargeback rebates, fees, reimbursements or similar payments granted or
given to wholesalers or other distributors (including retailers), buying groups,
health care insurance carriers or other institutions, and any payment in respect
of sales to any governmental authority in respect of any Federal or state
Medicaid, Medicare or similar program, all as determined in accordance with
generally accepted accounting principles on a basis consistent with Seller's
audited financial statements, but excluding such discounts, credits, or rebates
that relate to matters such as product returns, rejected or damaged goods,
billing errors, and the like.
SECTION 1.08. INVENTORY.
On the Closing Date, Seller shall, and shall cause its Affiliates to,
sell, assign, transfer, convey and deliver to Purchaser, and Purchaser shall
purchase, acquire, pay for and accept from
7
FINAL FORM
Seller, free and clear of all Liens, all right, title and interest of Seller and
its Affiliates in, to and under any Product inventory then held by Seller and
its Affiliates or that has been firm ordered by Seller and its Affiliates from
XXX (the "Inventory"). The purchase price for the Inventory shall be the price
and other amounts, including royalties, paid or payable to XXX by Seller under
the XXX Supply Agreement and XXX License Agreement and shall be paid by
Purchaser to Seller within thirty (30) days after the Closing by wire transfer
of immediately available funds to the accounts specified on Schedule 1.04(c). On
the Closing Date and for a reasonable time thereafter, Seller and its Affiliates
will make the Inventory available for pick-up by Purchaser. Seller shall bear
the risk of loss to the Inventory until the Inventory has been delivered to
Purchaser; thereafter Purchaser shall bear the risk of loss to the Inventory.
Seller shall provide to Purchaser upon delivery of the Inventory, the
certificate of analysis that Seller received from XXX for each batch of Products
comprising the Inventory.
SECTION 1.09. REBATES; CHARGEBACKS; RETURNS HANDLING.
Subject to Section 1.09(h), the Parties will administer and pay all
rebates, chargebacks and other similar programs as follows:
(a) Sales of Product Under Seller's NDC Code. Subject to Section 1.09(e),
from and after the Closing, Purchaser will process and be responsible for the
administration and payment of all Prime Vendor and federal, state and local
managed care and other rebate programs, including Medicaid/Medicare rebates, as
well as chargebacks for the Product (collectively, "Rebate Programs"), in each
case, related to Product sold under Seller's NDC code, regardless of whether
such Product was sold by Seller, Purchaser or any of their respective
Affiliates; provided, however, that Seller will pay to Purchaser (by Federal
Reserve electronic wire transfer in immediately available funds to an account
designated by Purchaser):
(i) within sixty (60) days of the Closing Date an amount equal to: (1)
the product of: (A) a number equal to (i) the amount of rebates
and chargebacks paid by Seller related to the Product pursuant to
federal, state and local governmental Rebate Programs (including,
without limitation, Medicaid rebates, but excluding Medicare and
any Prime Vendor rebates or chargebacks), during the preceding
twelve month period divided by (ii) gross sales for the same
preceding period, multiplied by (B) Seller's gross sales of the
Product for the six (6) months preceding the Closing, less (2) any
rebates and chargebacks paid by Seller after the Closing relating
to Products pursuant to federal, state and local governmental
Rebate Programs (including, without limitation, Medicaid rebates,
but excluding Medicare and any Prime Vendor rebates or
chargebacks); and
(ii) within sixty (60) days of the Closing Date an amount equal to: (1)
the product of (A) a number equal to (i) the amount of rebates and
chargebacks paid by Seller related to the Product to Prime Vendors
with respect to sales to governmental and non-governmental Third
Parties during the preceding twelve month period divided by (ii)
gross sales for the same preceding period, multiplied by (B)
Seller's gross sales of the Product for the forty-five (45) day
period preceding the Closing, less (2) any rebates and chargebacks
paid by Seller after the Closing
8
FINAL FORM
relating to the Products to Prime Vendors with respect to sales to
governmental and non-governmental Third Parties.
Seller shall be responsible for all obligations relating to any Other Rebate
Programs (as defined below) until the end of the first full calendar quarter
after Closing and thereafter Purchaser shall be responsible for such
obligations; provided that notwithstanding anything in the foregoing to the
contrary, Seller shall remain responsible for all Shipped Products and Purchaser
shall remain responsible for all Products other than Shipped Products. "Other
Rebate Program" shall mean any Rebate Program related to the Product other than
the Rebate Programs covered in clauses (i) and (ii) above or in Section 1.09(f).
(b) Sales of Product Under an NDC Code Other Than Seller's. Purchaser
will process and be responsible for the administration and payment of all
federal, state and local managed care and other rebate programs, including
Medicaid/Medicare rebates, as well as chargebacks for the Product, in each case,
related to Product that is sold by Purchaser in the Territory which bears an NDC
Code other than Seller's NDC Code.
(c) Product Returns. Purchaser shall be solely responsible for processing
and handling all returns following the Closing. Purchaser will be responsible
for the credit liability associated with all returns of Product sold on or after
the Closing Date in the Territory, and Seller will be responsible for the credit
liability for all returns of Product sold before the Closing Date.
Notwithstanding the foregoing, in the event Seller delivers Product to Purchaser
from lots that include Product that was sold by Seller prior to the Closing Date
(each referred to herein as a "Partial Lot"), Purchaser and Seller will each be
responsible for one half of the credit liability associated with returns of
Product included in such Partial Lot (regardless of who sold such Product). The
issuance and determination of all credits and payments for any returns for which
Seller may have a credit liability hereunder (including with respect to Partial
Lots) shall be made in accordance with Seller's returns policy applicable to the
majority of Seller's non-oncology products, as provided in writing to Purchaser.
Each party will destroy Product returned to it in accordance with applicable
Laws regardless of whether or not it had the responsibility for the returned
Product pursuant to this paragraph (c). A Party may invoice the other Party for
the actual expenses incurred as a result of destroying Product for which the
other Party is responsible including without limitation, fees paid to Third
Parties for receiving and processing such returned Product in accordance with
applicable Laws; provided, that if Purchaser requests Seller to ship returned
Product to Purchaser, Seller will do so at Purchaser's expense. Such other Party
will pay such invoice within thirty (30) days of the date of invoice. Neither
Party will issue a credit to a Third Party attributable to returns for which the
other Party is responsible. The Parties shall reconcile and true up their
accounting under this provision at the end of each calendar quarter after the
Closing until both Parties agree that such need no longer exists.
Notwithstanding the foregoing, Purchaser shall have no responsibility for, and
Seller shall be solely responsible for the cost of, misshipped Products by
Seller that are returned by the customer for non-compliance with the terms of
the customer's orders (such as non-compliance with respect to quantity,
delivery, date, pricing error, or delivery location). Each Party shall have the
right during normal business hours and on reasonable notice, to review the other
Party's books and records and consult with the other Party's responsible
employees in respect of performance of this Section 1.09(c).
9
FINAL FORM
(d) Medicaid Processing. Purchaser will be responsible for supplying the
United States government with mandated pricing information related to Product
sold under Seller's NDC code for purposes of calculating Medicaid rebate per
unit for the Product. This responsibility will begin in the quarter of Closing.
The Parties agree that Seller will provide to Purchaser transaction level data
related to sales made by Seller under Seller's NDC code in the quarter of
Closing in order for Purchaser to submit applicable pricing.
(e) FSS and PHS Processing. The Parties will notify all necessary Third
Parties, including the VA National Acquisition Center, as promptly as possible
after the Closing (but in no event later than five business days post-Closing),
that the Product should be added to Purchaser's Federal Supply Schedule (FSS)
and that Purchaser will assume responsibility for all reporting and other
obligations relating to FSS submissions, PHS submissions, and chargeback
processing. Until such time as Seller receives written notification from
applicable government entities acknowledging the effective date of such
assumption and that Seller is no longer obligated to make FSS submissions and
process FSS chargebacks, Seller will continue to make FSS submissions and
process FSS chargebacks and Purchaser will provide Seller with prompt written
notice of (i) changes in its FSS prices, (ii) price changes to those Tracking
Customer(s) existing as of the Closing Date (which, as of March 31, 2003, are
Novation, Harvard Community Health Plan, Fallon Clinics, HIP Drug Plan Inc,
MedPartners, PACT and/or Kaiser) for the Product, and (iii) price reductions to
any commercial customer to a level below the FSS prices in effect at that time.
These price notifications will be made to the Seller within three (3) business
days after they take effect.
(f) Medicare. In the event that rebates are required to be paid after the
Closing with respect to Medicare based on Products sold prior to Closing,
Purchaser will process and pay such claims and rebates and Seller will reimburse
Purchaser for all amounts paid relating to Shipped Product
(g) Retroactive Impact. In the event that any pricing changes made by
Purchaser after the Closing have the effect of increasing any rebate, chargeback
or similar liability or payment obligation owed by Seller to any Third Party in
the absence of what such liability obligation would have been in the absence of
such pricing change, Purchaser shall reimburse Seller for such increase in
liability or payment obligation incurred by Seller.
(h) Materially Unfair Outcome. Notwithstanding anything to the contrary
in the foregoing provisions of this Section 1.09 and subject to Sections
1.03(a)(iii) and 1.03(c)(iii), the Parties acknowledge and agree that nothing in
this Section 1.09 is intended to make money or lose money for either Party in
respect of the matters covered in this Section 1.09, and if either Party
believes that the above provisions have resulted in a materially unfair outcome
to such Party, the Parties will meet and confer in good faith to address the
perceived inequity.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser on the date hereof as
follows:
10
FINAL FORM
SECTION 2.01. ORGANIZATION.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of Seller and its
Affiliates has all requisite corporate power and authority to own, lease and
operate the Acquired Assets and to carry on the Business as they are presently
conducted.
SECTION 2.02. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.
Seller has the requisite corporate power and authority to execute and
deliver this Agreement and to perform all of its obligations hereunder, and each
of Seller and its Affiliates has the requisite corporate power and authority to
execute and deliver each Related Instrument to which it is a party and to
perform all of its obligations thereunder. The execution and delivery of this
Agreement and the Related Instruments and the performance by Seller and its
Affiliates of their respective obligations hereunder and thereunder have been
authorized by all requisite corporate action on their respective parts. This
Agreement has been validly executed and delivered by Seller and (assuming that
this Agreement has been duly authorized, executed and delivered by Purchaser)
constitutes, and each Related Instrument that is to be executed and delivered by
Seller or an Affiliate of Seller will constitute when executed and delivered by
Seller or such Affiliate, as applicable (assuming that such Related Instrument
has been duly authorized, executed and delivered by Purchaser to the extent
applicable), a valid and binding obligation of such Party, enforceable against
such Party in accordance with its terms.
SECTION 2.03. CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Except as set forth on Schedule 2.03(a), neither the execution and
delivery of this Agreement nor any Related Instrument by Seller or any Affiliate
of Seller party thereto, nor the performance by Seller or such Affiliate of its
obligations hereunder or thereunder will (i) violate the certificate of
incorporation, by-laws or other organizational document of Seller or such
Affiliate, (ii) conflict with or result in a violation or breach of, or
constitute a default under, any contract, agreement or instrument to which
Seller or such Affiliate is a party or by which Seller or such Affiliate or the
Acquired Assets are bound, or result in the creation or imposition of any Lien
upon any of the Acquired Assets or (iii) violate or conflict with any Law, rule,
regulation, judgment, order or decree of any court applicable to Seller, such
Affiliate or the Acquired Assets, except in the case of clauses (ii) or (iii)
for violations, breaches or defaults which would not result in a Material
Adverse Effect, have a material adverse effect on Seller's ability to consummate
the transactions contemplated hereby or materially delay the consummation of the
transactions contemplated hereby.
(b) Except for the applicable requirements of the HSR Act and except as
set forth on Schedule 2.03(b), no filing with, and no permit, authorization,
consent or approval of, any Governmental Entity is necessary for the
consummation by Seller of the transactions contemplated by this Agreement,
except for those filings, permits, authorizations, consents or approvals the
failure of which to be made or obtained would not result in a Material Adverse
Effect, materially impair Seller's ability to consummate the transactions
contemplated hereby or materially delay the consummation of the transactions
contemplated hereby.
11
FINAL FORM
SECTION 2.04. FINANCIAL STATEMENTS.
Schedule 2.04 sets forth the "Statements of Net Sales and Products
Contribution" for the Products for the years ended December 31, _______, ______
and _____ [prior three years] and for the ___ months ended __________, 200_ [any
stub period] (collectively, the "Financial Statements"). The Financial
Statements have been prepared in accordance with Seller's accounting policies
applied on a consistent basis and fairly present, in all material respects, as
of the dates thereof and for the periods then ended the aggregate Product
contribution (as described therein) for the Business, taken as a whole. The
Audited Financial Statements, when delivered to Purchaser pursuant to Section
4.19, will be prepared in accordance with GAAP and Seller's accounting policies
applied on a consistent basis and will fairly present, in all material respects,
as of the dates thereof the aggregate Product contribution (as described
therein) of the Business, taken as a whole. The aggregate Product contribution
for the Business, taken as a whole, as presented in the Audited Financial
Statements for the years ended December 31, ____, ____ and ___, shall not
reflect any material adverse change from the aggregate Product contribution for
the Business, taken as a whole, presented in the Financial Statements as of such
respective dates.
SECTION 2.05. [INTENTIONALLY OMITTED].
SECTION 2.06. TITLE OF ASSETS.
Seller or an Affiliate of Seller has, or as of the Closing Date
will have, good and valid title to all the Acquired Assets, except, in the case
of the Acquired Assets set forth in clauses (ii), (v) and (vi) of Section
1.02(a), those disposed of in the ordinary course of business consistent with
past practice and not in violation of this Agreement, in each case free and
clear of all Liens, other than Permitted Liens. This Section 2.06 does not
relate to Intellectual Property, which is the subject of Section 2.07.
SECTION 2.07. INTELLECTUAL PROPERTY.
(a) Schedule 2.07(a) sets forth a complete and correct list of (i) all
registered trademarks and copyrights used exclusively in the Business; (ii) all
common law trademarks and service marks used exclusively in the Business, and
(iii) all licenses or agreements to which Seller or any of its Affiliates is a
party with respect to the Intellectual Property.
(b) Except as set forth on Schedule 2.07(b):
(i) Seller or one of its Affiliates owns and possesses all right,
title and interest in, to and under the Intellectual Property used
in the Business free and clear of any liens, encumbrances or other
restrictions; and no claim by any Third Party contesting the
validity, enforceability, use or ownership of any such
Intellectual Property has been made and is currently outstanding,
nor to the Knowledge of Seller, is any threatened;
(ii) none of Seller or any of its Affiliates has received any notices
of, nor is aware of any facts which would indicate a reasonable
likelihood of, any infringement or misappropriation by, or
conflict with, any Third Party with respect to the
12
FINAL FORM
Intellectual Property used in the Business (including any demand
or request that Seller license rights from a Third Party); and
(iii) to the Knowledge of Seller, the conduct of the Business does not
infringe, misappropriate or otherwise conflict with any rights of
any Third Parties.
(c) No present or former employee or consultant of Seller and no other
person owns or has any proprietary, financial or other interest, direct or
indirect, in the Intellectual Property used in the Business.
SECTION 2.08. CONTRACTS.
Except as set forth on Schedule 2.08, none of Seller or its Affiliates is
a party to or bound by any oral or written contract, lease, license, indenture,
agreement, commitment or any other legally binding arrangement, that is used,
held for use or intended for use, primarily in, or that arises primarily out of,
the operation or conduct of the Business and under which Purchaser will have any
liability or other obligation after the Closing ("Contracts") and that is:
(i) or contains a covenant not to compete or covenants that in any way
purport to restrict the business activity of Seller and/or its
Affiliates or limit the freedom of Seller and/or its Affiliates to
engage in the Business or to compete with any Person or otherwise
restricts the rights of Seller and/or its Affiliates to use or
disclose any information in its or their possession;
(ii) a Contract involving payment by Seller and/or any of its
Affiliates of more than $50,000 or extending for a term more than
180 days from the Agreement Date (unless terminable without
payment or penalty upon no more than 60 days' notice), other than
purchase orders entered into in the ordinary course of the
Business consistent with past practice;
(iii) a Contract involving the obligation of Seller and/or any of its
Affiliates to deliver products or services for payment of more
than $50,000 or extending for a term more than 180 days from the
Agreement Date (unless terminable without payment or penalty upon
no more than 60 days' notice), other than sales orders entered
into in the ordinary course of the Business consistent with past
practice; or
(iv) a Contract for the sale of any Acquired Asset (other than
inventory sales in the ordinary course of business) or the grant
of any preferential rights to purchase any Acquired Asset or
requiring the consent of any party thereto to the transfer thereof
or that creates a relationship with any distributor, dealer,
manufacturer's representative or sales agency or that provides for
payments to or by any Person based on sales, purchases, or
profits, other than direct payments for goods; or
(v) a lease, installment or conditional sale agreement, or other
Contract affecting the ownership of, leasing of, title to, use of
or any other interest in any Acquired Assets (except personal
property leases and installment or conditional sales agreements
having a value per item or aggregate payments of less than $50,000
or
13
FINAL FORM
extending for a term less than 180 days from the Agreement Date
(unless terminable without payment or penalty upon no more than 60
days' notice)).
Except as set forth in Schedule 2.08, all Contracts listed in the
Schedules are valid, binding and in full force and effect, except for such
failures to be valid, binding, and in full force and effect that, individually
or in the aggregate, have not had and could not reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 2.08, Seller or its
Affiliates have performed all obligations required to be performed by them to
date under the Contracts, and they are not (with or without the lapse of time or
the giving of notice, or both) in breach or default in any respect thereunder
and, to the Knowledge of Seller, no other party to any Contract is (with or
without the lapse of time or the giving of notice, or both) in breach or default
in any respect thereunder, except for such noncompliance, breaches and defaults
that, individually or in the aggregate, have not had and could not reasonably be
expected to have a Material Adverse Effect. Complete and correct copies of all
Contracts listed in the Schedules, together with all modifications and
amendments thereto, have been made available to Purchaser.
SECTION 2.09. COMPLIANCE WITH LAW.
(a) Except as set forth on Schedule 2.09(a) or to the extent that it
could not reasonably be expected to have a Material Adverse Effect, (i) the
Business is conducted in compliance with all permits, government licenses,
registrations, approvals, concessions, franchises, authorizations, orders,
injunctions and decrees and applicable Laws, including the United States Food,
Drug and Cosmetics Act of 1938, as amended from time to time (the "FDA Act"),
(ii) all governmental licenses, permits, registrations, approvals, concessions,
franchises and authorizations principally employed in, or necessary to the
ongoing conduct of, the Business are in full force and effect, (iii) since
{insert date that is January 1 of the fifth year preceding the Option Acceptance
Date}, no Governmental Entity has served notice that Seller and its Affiliates
(with respect to the Business), the Business or the Acquired Assets were or are
in violation of any Law or order in any jurisdiction and, to the Knowledge of
Seller, there are no grounds for the same and (iv) since {insert date that is
January 1 of the fifth year preceding the Option Acceptance Date}, none of
Seller or any of its Affiliates has received written notice from any United
States Governmental Entity or any other Governmental Entity that there are any
circumstances currently existing which would lead to any loss or refusal to
renew any governmental licenses, permits, registrations, approvals, concessions,
franchises and authorizations on terms less advantageous to Seller and its
Affiliates than the terms of those licenses, permits, registrations, approvals,
concessions, franchises and authorizations currently in force.
(b)
(i) Except as set forth on Schedule 2.09(b)(i), the Business is
conducted in compliance in all material respects with all
applicable Laws in connection with the preparation and submission
to the FDA of each of the NDAs relating to the Products, and each
of the NDAs has been approved by, and none of Seller or any of its
Affiliates has received any notice in writing which has, or
reasonably should have, led Seller to believe that any of the NDAs
are not currently in good standing with the FDA. To its Knowledge,
Seller or its Affiliates have filed with the FDA all required
notices, supplemental applications and annual or other reports,
14
FINAL FORM
including adverse experience reports, with respect to each NDA
which is material to the conduct of the Business as currently
conducted by Seller. Except as set forth on Schedule 2.09(b)(i),
with respect to the Products for which an NDA has been approved by
the FDA, the applicant and all persons performing operations
covered by the application acted in compliance in all material
respects with 21 U.S.C.Sections 355 or 357, 21 C.F.R. Parts
314 or 430 et. seq., respectively, and all terms and conditions of
such application; provided, that the foregoing shall not apply to
any portions of the NDA that rely upon information required to be
submitted or supplied by XXX. Except as set forth on Schedule
2.09(b)(i), none of Seller or any of its Affiliates or any of
their agents have prepared or have any rights to any ANDA filings
(or equivalent non-U.S. filings) relating to the Products.
(ii) Except as set forth on Schedule 2.09(b)(ii), since {insert date
that is January 1 of the fifth year preceding the Agreement Date},
neither Seller nor any of its Affiliates has received any written
notice that any United States governmental or regulatory agency
(including the FDA) has commenced, or, to the Knowledge of Seller,
threatened to initiate any action to withdraw its approval or
request the recall of any Product, or commenced or threatened to
initiate any action to enjoin production of the Products at any
facility.
(III) SELLER DOES NOT MANUFACTURE ANY OF THE PRODUCTS AND, EXCEPT AS SET
FORTH IN SECTION 2.17, DISCLAIMS ALL REPRESENTATIONS AND
WARRANTIES AS TO WHETHER THE MANUFACTURING OF THE PRODUCTS IS
BEING CONDUCTED IN COMPLIANCE IN ALL MATERIAL RESPECTS WITH
CURRENT GOOD MANUFACTURING PRACTICES AS SET FORTH IN 21 C.F.R.
PARTS 210 AND 211 OR THE SPECIFICATIONS CONTAINED IN THE NDA FOR
THE PRODUCT.
(iv) Seller and its Affiliates have made available to Purchaser copies
of all material (A) reports of inspection observations received by
Seller, (B) establishment inspection reports received by Seller,
and (C) warning letters as well as any other documents received by
Seller or any of its Affiliates from the FDA relating to the
Products and/or arising out of the conduct of the Business that
assert ongoing material lack of compliance with any material
applicable Laws or regulatory requirements (including those of the
FDA) by Seller or its Affiliates.
SECTION 2.10. LITIGATION.
(a) As of the Agreement Date, except as set forth on Schedule 2.10, there
is no claim, action, or proceeding, including product liability claims
(collectively, a "Proceeding"), pending or, to Seller's Knowledge, threatened
against Seller or its Affiliates in respect of the Acquired Assets (including
the Products), the conduct of the Business or the transactions contemplated by
this Agreement and each Related Instrument, in respect of which Purchaser would
become liable as a result of the consummation of the transactions contemplated
hereby which is reasonably likely to be adversely determined, and if adversely
determined, is reasonably likely to result in a Material Adverse Effect.
15
FINAL FORM
(b) There are no outstanding orders, injunctions or decrees of any United
States Governmental Entity that apply to the Acquired Assets (or will apply to
Purchaser after Closing) that restrict the ownership, disposition or use of the
Acquired Assets or the conduct of the Business, in each case, in any material
respect.
SECTION 2.11. BROKERS OR FINDERS.
Neither Seller nor any of its Affiliates has retained any agent, broker,
investment banker, financial advisor or other firm or Person that is or will be
entitled to any brokers' or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement, and
there are no claims for any of the foregoing.
SECTION 2.12. REGISTRATIONS.
Schedule 2.12 sets forth all regulatory approvals for the Products.
SECTION 2.13. MEDICAL INFORMATION.
Seller has made available to Purchaser copies of (a) all adverse event
reports with respect to the Products that have been filed with the FDA since
{insert the January 1 of the fifth year preceding the Option Acceptance Date},
including any material correspondence or other material documents relating
thereto, (b) a schedule of all payouts made by Seller since {insert the January
1 of the fifth year preceding the Option Acceptance Date} to end-users in
respect of claims relating to the Products and (c) a schedule of all actual or
threatened claims made by end-users since {insert the January 1 of the third
year preceding the Option Acceptance Date} against Seller or its Affiliates
relating to the Products.
SECTION 2.14. WEBSITES AND DOMAIN NAMES.
Other than the domain names set forth on Schedule 2.14, none of Seller or
any of its Affiliates has any interest or ownership rights in any domain names
or websites exclusively relating to the Products.
SECTION 2.15. CONDUCT OF BUSINESS.
Seller conducts the Business in the Territory only.
SECTION 2.16. KNOWLEDGE.
The individuals set forth on Schedule 8.02(a) are Seller's and its
Affiliates' representatives with primary responsibility in their respective
areas of expertise.
SECTION 2.17. INVENTORY.
To the Knowledge of Seller, the Inventory sold to the Purchaser under
this Agreement: (a) will not be adulterated or misbranded under applicable Laws
at the time the same is tendered to the common carrier for delivery to the
Purchaser; (b) will meet the Specifications therefor at the time the same is
tendered to the common carrier for delivery to the Purchaser; and (c) shall
16
FINAL FORM
be manufactured, labeled and packaged in accordance with Good Manufacturing
Practices and all other applicable Laws including all applicable U.S. federal,
state and local environmental health and safety Laws in effect at the time and
place of manufacture of the Products.
SECTION 2.18. CONDUCT SINCE OPTION ACCEPTANCE DATE.
Neither Seller nor its Affiliates has engaged in any conduct between the
Option Acceptance Date and the date hereof which if engaged in after the date
hereof would be a breach of Section 4.01.
SECTION 2.19. NO OTHER REPRESENTATIONS OR WARRANTIES.
Except for the representations and warranties contained in the Option
Agreement, this Article II (including the Schedules), the Seller's Officer's
Certificate and the Related Instruments, none of Seller, its Affiliates or any
other Person makes any other express or implied representation or warranty on
behalf of Seller or any of its Affiliates.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller on the date hereof as
follows:
SECTION 3.01. ORGANIZATION.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of Northern Ireland. Purchaser has all requisite
corporate power and authority to own, lease and operate its properties and to
conduct its business as now being conducted.
SECTION 3.02. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY.
Purchaser has the requisite corporate power and authority to execute and
deliver this Agreement and the Related Instruments and to perform its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and the Related Instruments and the performance by Purchaser of its
obligations hereunder and thereunder have been authorized by all requisite
corporate action on the part of Purchaser. This Agreement has been validly
executed and delivered by Purchaser and, assuming that this Agreement has been
duly authorized, executed and delivered by Seller, constitutes, and each Related
Instrument that is to be executed and delivered by Purchaser will constitute
when executed and delivered by Purchaser (assuming that such Related Instrument
has been duly authorized, executed and delivered by Seller and/or its Affiliates
to the extent applicable), a valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms.
SECTION 3.03. CONSENTS AND APPROVALS; NO VIOLATIONS.
(a) Neither the execution and delivery of this Agreement nor any Related
Instrument by Purchaser nor the performance by Purchaser of its obligations
hereunder or thereunder will (i) violate the certificate of incorporation,
by-laws or other organizational document of
17
FINAL FORM
Purchaser, (ii) conflict with or result in a violation or breach of, or
constitute a default under, any contract, agreement or instrument to which
Purchaser is a party or by which any of its properties or assets are bound or
(iii) violate or conflict with any Law, judgment, order or decree, except in the
case of clauses (ii) or (iii) for violations, breaches or defaults which would
not have a material adverse effect on Purchaser's ability to consummate the
transaction contemplated hereby or materially delay the consummation of the
transactions contemplated by this Agreement.
(b) Except for the applicable requirements of the HSR Act, no filing
with, and no permit, authorization, consent or approval of, any Governmental
Entity is necessary for the consummation by Purchaser of the transactions
contemplated by this Agreement, except for those filings, permits,
authorizations, consents or approvals the failure of which to be made or
obtained would not materially impair Purchaser's ability to consummate the
transaction contemplated hereby or materially delay the consummation of the
transactions contemplated hereby.
SECTION 3.04. BROKERS AND FINDERS.
Neither Purchaser nor its Affiliates has retained any agent, broker,
investment banker, financial advisor or other firm or Person that is or will be
entitled to any brokers' or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement, and
there are no claims for any of the foregoing.
SECTION 3.05. NO PROCEEDINGS.
There is no Proceeding, pending or, to the Knowledge of Purchaser,
threatened against Purchaser which would affect Purchaser's ability to
consummate the transactions contemplated by this Agreement and each Related
Instrument.
SECTION 3.06. AVAILABILITY OF FUNDS.
Purchaser possesses as of the Agreement Date, and as of the Closing Date
will have, available funds sufficiently necessary to consummate the transaction
contemplated by this Agreement.
SECTION 3.07. NO OTHER PURCHASER REPRESENTATIONS OR WARRANTIES.
Except for the representations and warranties contained in this Article
III, the Purchaser's Officer's Certificate and the Related Instruments neither
Purchaser nor any other Person makes any other express or implied representation
or warranty on behalf of Purchaser in connection with this Agreement.
18
FINAL FORM
ARTICLE IV.
COVENANTS
SECTION 4.01. CONDUCT OF THE BUSINESS.
During the period from the Agreement Date until the Closing, Seller
shall, except as otherwise contemplated by this Agreement or as set forth on
Schedule 4.01 and shall cause its Affiliates to, operate the Business only in
the ordinary course of business consistent with past practices and shall, and
shall cause its Affiliates to, use its or their reasonable efforts to preserve
intact the Acquired Assets and the Business. Without limiting the generality of
the foregoing, and except as otherwise contemplated by this Agreement, from the
Agreement Date until the Closing Date, without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld), Seller: (a) shall
not, and shall cause its Affiliates not to, mortgage, pledge or subject to any
Lien (other than Permitted Liens) any Acquired Asset; (b) shall, and shall cause
its Affiliates to, use its and their reasonable efforts to maintain satisfactory
relationships with and preserve the goodwill of suppliers and customers in
connection with the conduct of the Business; (c) shall not, and shall cause its
Affiliates not to, transfer or grant any rights or options in or to any of the
Acquired Assets except for the transfer of inventory in the ordinary course of
business; (d) shall not, and shall cause its Affiliates not to, transfer to any
Third Party any rights under any licenses, sublicenses or other agreements with
respect to any Intellectual Property; (e) shall, and shall cause its Affiliates
to, conduct its marketing and promotional activities with respect to the
Products in the ordinary course of the Business consistent with past practices;
(f) shall not, and shall cause its Affiliates not to, institute any new methods
of purchase, sale or operation nor institute any changes in the product pricing
or in promotional allowances other than in the ordinary course of the Business
consistent with past practices; (g) shall not, and shall cause its Affiliates
not to, make any material changes in selling, pricing or advertising practices
other than in the ordinary course of the Business consistent with past
practices; and (h) shall not launch any Product packaging changes or Product
line extensions and (i) not agree to take any of the foregoing actions. Without
limiting the foregoing in clause (g), Seller shall not, and shall cause its
Affiliates not to, engage in any special promotions of any Product.
SECTION 4.02. ACCESS TO INFORMATION.
(a) After the Agreement Date and prior to Closing, Seller shall, and
shall cause its Affiliates to, permit Purchaser and its representatives and
agents to have reasonable access during normal business hours to Seller's and
its Affiliates' books and records, manufacturing facilities and personnel
primarily relating to the Acquired Assets and the Business and Seller shall, and
shall cause its Affiliates to, furnish promptly to Purchaser such available
information concerning the Acquired Assets and the Business as Purchaser may
reasonably request; provided, however, that such access does not unreasonably
disrupt the normal operations of Seller, its Affiliates or the Business.
19
FINAL FORM
(b) In addition, at any time prior to, on or after the Closing (i) Seller
shall cooperate with Purchaser in making Retained Information available, (ii)
Seller shall furnish copies (the first such copy being at Seller's cost and any
additional copies being at Purchaser's cost) of such Retained Information for
review by Purchaser, to the extent practicable, at the reasonable request of
Purchaser, including but not limited to the provision of a full copy of the NDA
(to the extent included in Retained Information) and (iii) upon written notice
from Purchaser of any request for Retained Information, Seller shall promptly
designate appropriate contacts with respect thereto, and shall make such
contacts reasonably available to Purchaser.
SECTION 4.03. CONFIDENTIALITY.
(a) Purchaser shall use its commercially reasonable efforts to keep
confidential, prior to the Closing, the information being provided to it in
connection with the Acquisition and the consummation of the other transactions
contemplated hereby except Purchaser may disclose such confidential information
(i) to its counsel, (ii) to the extent such information is already public at the
time it is disclosed, (iii) in connection with pursuing any remedies under this
Agreement or as required by applicable Law, (iv) to prospective lenders (to the
extent required by such lenders) all information relating to the Business
delivered to such persons in connection with the financing of the transactions
contemplated by this Agreement and (v) Retained Information relating to the
Business may be publicly disclosed (A) if and to the extent required by
applicable Law or (B) with the written consent of Seller (not to be unreasonably
withheld).
(b) Each of Purchaser and Seller agrees that the terms of this Agreement
and the Related Instruments shall not be disclosed or otherwise made available
to the public and that copies of this Agreement and the Related Instruments
shall not be publicly filed or otherwise made available to the public, except
where such disclosure, availability or filing is required by applicable Law and
only to the extent required by such Law. In respect of the foregoing, the
Parties acknowledge that Purchaser expects to be required by Law to file this
Agreement with the U.S. Securities and Exchange Commission. Notwithstanding
anything herein to the contrary, any Party to this Agreement (and any employee,
representative, or other agent of any Party to this Agreement) may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure. However, any such information
relating to the tax treatment or tax structure is required to be kept
confidential to the extent necessary to comply with any applicable federal or
state securities laws.
(c) Seller shall use commercially reasonable efforts to keep
confidential, and to cause its Affiliates and its and their officers, directors,
employees and advisors to keep confidential, all information relating to the
Business, except (i) as required to be disclosed by Seller or its Affiliates
under any of its Ancillary Agreements with XXX or any of its Affiliates, (ii) as
used by Seller and its Affiliates in the manufacture, development, use and sale
of the products other than a Competitive Business Product, and (iii) in
connection with pursuing any remedies under this Agreement or as required by Law
or administrative process and except for information that is available to the
public on the Closing Date, or thereafter becomes available to the public other
than as a result of a breach of this Section 4.03(c). The covenant set forth in
this Section 4.03(c) shall terminate five (5) years after the Closing.
20
FINAL FORM
SECTION 4.04. BEST EFFORTS.
(a) On the terms and subject to the conditions of this Agreement and
subject to Section 3.06 of this Agreement with respect to Purchaser's obligation
to have sufficient funds, each Party shall use its best efforts to cause the
Closing to occur, including taking all reasonable actions necessary to comply
promptly with all legal requirements that may be imposed on it or any of its
Affiliates with respect to the Closing. Without limiting the foregoing or the
provisions set forth in Section 4.05, Purchaser and Seller shall use their
respective best efforts to cause the Closing by the applicable date set forth in
the Option Agreement.
SECTION 4.05. REGULATORY APPROVALS.
(a) Promptly after the Agreement Date, each Party will use its reasonable
best efforts to file appropriate forms under the HSR Act with the United States
Federal Trade Commission ("FTC") and the United States Department of Justice
("DOJ") and with the relevant regulatory authority any other filings required
under applicable competition, merger control, antitrust or similar law or
regulation ("Competition Laws"). Each of Seller and Purchaser shall as promptly
as practicable, supply the FTC and the DOJ such supplemental information
requested, if any, in connection with the transactions contemplated hereby
pursuant to the HSR Act or such other Competition Laws. Any supplemental
information shall be in substantial compliance with the requirements of the HSR
Act or such other Competition Laws. Each of Purchaser and Seller shall furnish
to the other such necessary information and reasonable assistance as the other
may request in connection with its preparation of any submission that is
necessary under the HSR Act or such other Competition Laws. Seller and Purchaser
shall keep each other apprised of the status of any communications with, and any
inquiries or requests for additional information from, the FTC and the DOJ or
such other Governmental Entity and shall comply promptly with any such inquiry
or request. Each of Seller and Purchaser shall use its best efforts to obtain
any clearance required under the HSR Act or such other Competition Laws for the
consummation of the transactions contemplated by this Agreement.
(b) Except as provided in Section 4.05(a), each of Seller and Purchaser
shall use commercially reasonable efforts to procure all applicable regulatory
approvals necessary to consummate the transactions contemplated hereby,
including the transfer from Seller to Purchaser, within 90 days of the Closing
Date, of all Seller's rights, title and interest to regulatory approvals
relating to the Products or the Business.
SECTION 4.06. TRANSFER TAXES; PURCHASE PRICE ALLOCATION.
(a) Except as otherwise provided herein, any fees, charges, Taxes or
other payments required to be made to any Governmental Entity in connection with
the transfer of the Acquired Assets and the assignment and the assumption of the
Assumed Liabilities pursuant to the terms of this Agreement shall be paid 50% by
Seller and 50% by Purchaser. Seller and Purchaser shall cooperate in timely
making and filing all filings, Tax Returns, reports and forms as may be required
with respect to any Taxes payable in connection with the transfer of the
Acquired Assets.
21
FINAL FORM
(b) Purchaser shall prepare an allocation of the Purchase Price (and all
other capitalized costs) among the Acquired Assets in accordance with Code
Section 1060 and Treasury regulations thereunder (and any similar provision of
state or local law, as appropriate), which allocation shall be binding upon all
parties for all purposes of this Agreement. Purchaser shall deliver such
allocation to Seller within 60 days after the Closing. If Seller disputes such
allocation within 30 days after delivery of such allocation to Seller and the
Parties are unable to resolve any dispute within 45 days after delivery of such
allocation to Seller, the Parties shall submit any remaining disputes to an
independent appraisal firm mutually acceptable to the Parties for a final and
binding determination. The fees and expenses of such appraisal firm shall be
borne equally by Seller and Purchaser. Seller and Purchaser and their Affiliates
shall report, act and file Tax Returns in all respects and for all purposes
consistent with such allocation as finally agreed or determined. Neither Seller
nor Purchaser shall take any position that is inconsistent with such allocation
unless required to do so by applicable Law.
SECTION 4.07. PUBLICITY.
Except as otherwise required by law or applicable stock exchange
requirements, prior to Closing neither Purchaser nor Seller shall, and each of
them shall cause their respective Affiliates, representatives and agents not to,
issue or cause the publication of any press release or public announcement with
respect to the transactions contemplated by this Agreement without the express
prior written approval of the other Party, which approval shall not unreasonably
be withheld. The content of the initial press release announcing the execution
of this Agreement shall be mutually agreed by Purchaser and Seller.
SECTION 4.08. SUPPLEMENTAL DISCLOSURE.
Seller shall have the right from time to time prior to the second
business day preceding Closing to supplement or amend the Schedules with respect
to any matter hereafter arising or discovered which if existing or known on the
Agreement Date would have been required to be set forth or described in any such
Schedule. Any such supplemental or amended disclosure shall not be deemed to
have cured any breach of any representation or warranty made in this Agreement
for purposes of determining whether or not the conditions set forth in Article V
have been satisfied, but will be deemed to have cured any such breach of
representation or warranty made in this Agreement and to have been disclosed as
of the Agreement Date for purposes of Article VII hereof.
SECTION 4.09. FURTHER ASSURANCES.
Each Party shall from time to time after Closing, without
additional consideration, execute and deliver such further instruments and take
such other action as may be reasonably requested by the other Party to make
effective the transactions contemplated by this Agreement and each Related
Instrument. With respect to all documents, information and other materials
included in the Acquired Assets, in addition to paper and other tangible copies,
Seller shall, upon Purchaser's request, also provide to Purchaser electronic
copies of such documents, information and other materials, provided, that,
Seller or its Affiliates or their respective agents have electronic copies
thereof. The foregoing requirement shall only apply to such documents,
information and other material exclusively related to the Acquired Assets, and
Seller shall have
22
FINAL FORM
no obligation to reformat or otherwise alter or modify any such materials in
order to provide them to Purchaser.
SECTION 4.10. NO USE OF CERTAIN NAMES.
(a) Purchaser shall promptly, and in any event within six (6) months
after Closing, complete the revision of all product literature relating to the
Products (i) to delete all references to the Names and (ii) to delete all
references to Seller's or its Affiliates' customer service address or phone
number; provided, however, that for a period of six (6) months from the Closing
Date, Purchaser may continue to distribute product literature that uses any
Names, addresses or phone numbers to the extent that such literature exists on
the Closing Date, and Seller hereby grants to Purchaser rights under any
copyrights and other intellectual property owned by Seller (and covenants to
cause each of its Affiliates to grant Purchaser rights under any copyrights and
other intellectual property owned by such Affiliate) to the extent necessary to
allow Purchaser to so use such product literature. In no event shall Purchaser
use any Names after the Closing in any manner or for any purpose different from
the use of such Names by Seller during the 90-day period preceding Closing,
except as provided in the XXX Supply Agreement.
(b) Seller hereby grants a non-exclusive right and license to Purchaser
under the Names to the extent necessary to allow Purchaser and its Affiliates
and their designees to market, distribute and sell the Products utilizing the
labels and packaging existing on or on order by Seller or its Affiliates as of
the Closing Date, to the extent permitted under the XXX Supply Agreement.
(c) "Names" means "Xxxxxxx-Xxxxx Squibb Company", "Xxxxxxx-Xxxxx Squibb",
"BMS", "Xxxxxxx-Xxxxx Products", "B-MS", "Squibb" and "X.X. Xxxxxx & Sons",
"Xxxx Xxxxxxx", "Apothecon", "Invamed", "Apothecon/Invamed", "Xxxx Xxxxxxx &
Company" variations and derivatives thereof and any other logos or trademarks,
trade names or service marks of Seller or its Affiliates not included on
Schedule 2.07.
SECTION 4.11. BULK TRANSFER LAWS.
Purchaser hereby waives compliance by Seller and its Affiliates with the
provisions of any so called "bulk transfer law" of any jurisdiction in
connection with the sale of the Acquired Assets to Purchaser.
SECTION 4.12. CUSTOMER NOTIFICATIONS.
Promptly after the Closing Date, Purchaser shall notify all customers of
the Business (i) of the transfer of the Acquired Assets to Purchaser, (ii) that
all purchase orders for Products received by Seller or any of its Affiliates
prior to the Closing Date but not filled as of such date will be transferred to
Purchaser; provided, that, to the extent that any purchase order cannot be so
transferred, Seller and Purchaser shall cooperate with each other to ensure that
such purchase order is filled and that Purchaser receives the same economic
benefit and assumes the same liability associated with filling such purchase
order as if such purchase order had been so transferred, and (iii) that all
subsequent purchase orders for Products should be sent to Purchaser's
Distributor at Xxxxxx Xxxxxxxx, Inc., 000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, XX 00000,
Attention: Manager, Customer Service.
23
FINAL FORM
SECTION 4.13. TERMINATION OF CONTRACTS.
To the extent any on-going contract, commitment or arrangement between
Seller and any of Seller's Affiliates and any customer exists prior to Closing
with respect to any Product(s), Seller shall use commercially reasonable efforts
to terminate such contracts (but only with respect to such Product(s)) effective
as of the Closing, and Purchaser shall reasonably cooperate in connection
therewith. If any out-of-pocket costs are required to be incurred to such Third
Parties to terminate any such contracts, Seller shall notify Purchaser of the
anticipated amount of such costs. The Parties will cooperate and use reasonable
efforts to minimize the amount of any such costs. If Purchaser has agreed to
bear any disclosed costs, Seller shall obtain such terminations and Purchaser
shall reimburse Seller for the amount of such out-of-pocket costs. With respect
to any such contract, commitment or arrangement which is not terminated prior to
Closing, Seller shall use commercially reasonable efforts with Purchaser's
reasonable cooperation to devise an alternative arrangement to ensure that
Purchaser receives the commercial benefit of such contract, commitment or
arrangement for sales made following the Closing.
SECTION 4.14. POST-CLOSING COOPERATION.
(a) Purchaser and Seller shall cooperate with each other, and shall cause
their officers, employees, agents, auditors, Affiliates and representatives to
cooperate with each other, for a period of 180 days after Closing to ensure the
orderly transition of the Business from Seller to Purchaser and to minimize any
disruption to the Business and the other respective businesses of Seller and
Purchaser that might result from the transactions contemplated hereby. After
Closing, upon reasonable written notice, Purchaser and Seller shall furnish or
cause to be furnished to each other and their employees, counsel, auditors and
representatives access, during normal businesses hours, to such information and
assistance relating to the Business (to the extent within the control of such
Party) as is reasonably requested for financial reporting and accounting
matters.
(b) After Closing, upon reasonable written notice, Purchaser and Seller
shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance (to the extent within the control
of such Party) relating to the Acquired Assets (including access to books and
records) as is reasonably requested for the filing of all Tax Returns, and
making of any election related to Taxes, the preparation for any audit by any
Taxing authority, and the prosecution or defense of any claim, suit or
proceeding related to any Tax Return. Seller and Purchaser shall cooperate with
each other in the conduct of any audit or other proceeding relating to Taxes
involving the Business. Purchaser shall retain the books and records of Seller
and its Affiliates included in the Acquired Assets for a period of seven years
after Closing. After the end of such seven-year period, before disposing of such
books or records, Purchaser shall give notice to such effect to Seller and shall
give Seller, at Seller's cost and expense, an opportunity to remove and retain
all or any part of such books or records as Seller may select.
(c) Each Party shall reimburse the other for reasonable out-of-pocket
costs and expenses incurred in assisting the other pursuant to this Section
4.14. Neither Party shall be required by this Section 4.14 to take any action
that would unreasonably interfere with the conduct of its
24
FINAL FORM
business or unreasonably disrupt its normal operations (or, in the case of
Purchaser, the Business).
SECTION 4.15. COVENANT NOT TO COMPETE.
(a) After Closing, Seller shall not, and shall cause its subsidiaries not
to, directly or indirectly, (i) for a period of ten (10) years following the
Closing Date, engage in the manufacture, marketing, distribution or sale of any
product containing the Compound or (ii) for a period of ten (10) years following
[the Closing Date], engage in the manufacture, marketing, distribution or sale
of any product that has received marketing clearance from the FDA for psoriasis
treatment or prevention and which is either (x) a topical vitamin D3 or any
Vitamin D3 analog or (y) a fixed combination of vitamin D3 or any Vitamin D3
analog with a corticosteroid (a "Competitive Business Product") (each of (i) and
(ii) being a "Competitive Business") provided, however that "Competitive
Business Product" shall not include such a product sold over the counter
(without a prescription) containing vitamin D3 or any Vitamin D3 analog (e.g., a
vitamin capsule) other than one in a topical presentation. For sake of clarity
and avoidance of doubt, a corticosteroid shall not be considered a Vitamin D3
analog for purposes of the determination of whether a product is a Competitive
Business Product.
(b) The foregoing shall not be construed to prevent Seller or any of its
subsidiaries from doing any of the following: (i) acquiring any legal entity
that derives less than 5% of its revenues from a Competitive Business (or any
legal entity that derives an amount equal to or in excess of 5% of its revenues
from a Competitive Business so long as Seller causes such legal entity to divest
such Competitive Business within two (2) years from the date of acquisition),
and thereafter owning, managing, operating or controlling such Person, (ii)
owning up to 10% of the voting equity securities or any non-voting equity or
debt securities of any legal entity primarily engaged in a Competitive Business
whose securities are publicly traded on a national securities exchange or in the
over-the-counter market (or an amount in excess of 10% so long as BMS divests
such excess within two (2) years), (iii) owning any equity or debt securities
through any employee benefit or pension plan, or (vii) the use of Compound, any
Product or Dovobet(R) in any form in research and development as conducted by
Seller and its subsidiaries.
(c) It is specifically agreed that Section 4.15(a) shall not apply if
Seller is acquired by, merges or consolidates with a Third Party that derives
any revenue from a Competitive Business.
SECTION 4.16. NDC.
Purchaser shall take any and all action, as expeditiously as possible
(but in no event later than six months after the Closing), necessary to change
the National Drug Code ("NDC") number for each Product and to apply such new NDC
number to each Product sold, however, that the foregoing shall not apply to the
Inventory.
SECTION 4.17. RETURNS.
During the six months after the Closing, to the extent that the Product
do not have safety or efficacy issues, Purchaser shall not offer any incentives
to solicit, or take any actions other than in the ordinary course of business to
encourage, customers to return Product that has less than six months dating.
25
FINAL FORM
SECTION 4.18. NDA Maintenance; Adverse Experience.
After the Closing, Seller shall have no responsibility or liability for
any filings required to be made to or to maintain the NDA, including but not
limited to the filing of adverse event reports required by Law except with
respect to adverse events reports due prior to or within one month after the
Closing Date. Seller shall cooperate with Purchaser in connection therewith as
reasonably requested by Purchaser and as follows:
(a) During such one-month period following the Closing Date, Seller shall
and shall cause its Affiliates to notify Purchaser (i) of any Serious Adverse
Event (as defined below) for the Product of which Seller or its Affiliates is
aware within seven calendar days from the date the Seller or its Affiliates
first became aware of such Serious Adverse Event, (ii) of any Non-Serious
Adverse Events (as defined below) for the Product that are reported to Seller or
any of its Affiliates no more than one month from the date received by Seller or
any of its Affiliates; provided, however, that medical and scientific judgment
should be exercised in deciding whether expedited reporting is appropriate in
other situations, such as important medical events that may not be immediately
life-threatening or result in death or hospitalization but may jeopardize the
patient or may require intervention to prevent a Serious Adverse Event outcome
and (iii) promptly of any medical inquires or product quality complaints
regarding the Product made to Seller or its Affiliates. For purposes of this
Section 4.18(a), A "Serious Adverse Event" for the Product shall have the
meaning set forth in 21 C.F.R. Section 314.80(a), as amended from time to time,
and a "Non-Serious Adverse Event" for the Product shall mean an untoward medical
occurrence at any dose for any of the Products that is not a Serious Adverse
Event.
(b) Following the end of such one month period until the first anniversary
of the Closing Date, Seller shall and shall cause its Affiliates to notify
Purchaser (i) of any Adverse Event (as defined below) for the Product of which
Seller or its Affiliates is aware within three business days but no more than
four calendar days from the date the Seller or its Affiliates first became aware
of such Adverse Event and (ii) promptly of any medical inquires or product
quality complaints regarding the Product made to Seller or its Affiliates. For
purposes of this Section 4.18(b), an "Adverse Event" for the Product shall have
the meaning set forth in 21 C.F.R. Section 314.80(a), as amended from time to
time.
(c) Any of the matters to be notified pursuant to Section 4.18(a) or (b)
above shall be notified to:
Xxxxxx Xxxxxxxx Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Vice President - Regulatory Affairs
Facsimile No: 000-000-0000
Telephone No: 000-000-0000
SECTION 4.19. AUDITED FINANCIAL STATEMENTS.
If required by the U.K. Listing Authority, Seller shall cause to be
delivered to Purchaser as soon as reasonably practical but not later than the
later of (i) forty-five (45) days after the Agreement Date and (ii) fifty-five
(55) days after the end of the last fiscal period in
26
FINAL FORM
respect of which Audited Financial Statements are to be delivered hereunder, a
"Statement of Net Sales and Product Contribution" for each Product audited in
accordance with [U.K.] GAAP for the years ended December 31, ____, ____ and ____
and for the ____ months ended _________, 200___ (the "Audited Financial
Statements"), together with a report of Seller's independent accountants, with
respect thereto. The Audited Financial Statements shall be prepared at
Purchaser's reasonable expense.
ARTICLE V.
CONDITIONS
SECTION 5.01. Deliveries at Closing.
(a) Seller Deliveries at Closing. At the Closing, Seller shall deliver or
cause to be delivered the following: (i) all documents and agreements required
to be executed and delivered to Purchaser by Seller at Closing pursuant to this
Agreement; and (ii) Seller's Officer's Certificate.
(b) Purchaser Deliveries at Closing. At the Closing, Purchaser shall
deliver or cause to be delivered the following: (i) all documents and agreements
required to be executed and delivered to Seller by Purchaser at Closing pursuant
to this Agreement; (ii) Purchaser's Officer's Certificate; and (iii) the
Up-Front Cash Purchase Price set forth in, and to the entities designated by
Seller pursuant to, this Agreement, by electronic funds transfer of immediately
available funds.
The documents required to be delivered at Closing by each Party pursuant to this
Section 5.01 are referred to as the "Definitive Agreements".
SECTION 5.02. Conditions to Each Party's Obligations.
The respective obligation of each Party to effect the transactions
contemplated by this Agreement and to execute and deliver the Definitive
Agreements shall be subject to the satisfaction or waiver at or prior to the
Closing of the following conditions:
(a) The waiting period (including any extensions thereof) applicable to
the consummation of the transactions contemplated by this Agreement required
pursuant to the HSR Act shall have expired or been terminated and any other
required approval or waiting period under other applicable Competition Laws, if
any, shall have been obtained or terminated or shall have expired.
(b) No action, suit or proceeding shall be pending before any court or
quasi-judicial or administrative agency of any federal, state, local or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent consummation of any
of the transactions contemplated by this Agreement and the Definitive
Agreements, (B) cause any of the transactions contemplated by this Agreement and
the Definitive Agreements to be rescinded after the Closing or (C) affect
adversely Purchaser's right to own the Acquired Assets, to obtain supply of
Product for use and sale in the Territory, to
27
FINAL FORM
promote and distribute the Product in the Territory and to own and license the
XXX Patents, the XXX Technical Information and the Trademarks for use in the
Territory.
(c) Each Party has received all approvals from all Third Parties, as well
as all Regulatory Authorities and Governmental Entities, required for the
consummation of the transaction on the terms agreed upon by the Parties.
(d) The Consent Agreement is in full force and effect.
(e) XXX shall have duly executed and delivered the release and
acknowledgment referenced in Section 2.2.1(iii) of the Consent Agreement.
(f) Xxxxx shall have duly executed and delivered to BMS a document
confirming the release and waiver referenced in Section 7.2 of the Option
Agreement.
SECTION 5.03. Conditions Specific to Obligations of Purchaser.
The obligation of Purchaser to effect the transactions contemplated by
this Agreement and to execute and deliver the Definitive Agreements shall be
further subject to the satisfaction or waiver by Purchaser at or prior to the
Closing of the following conditions:
(a) The representations and warranties of Seller made in this Agreement
(including the Schedules), the Option Agreement, and any other Definitive
Agreements that are qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material respects as of
the Closing Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date).
(b) Seller shall have performed in all material respects all obligations
and covenants required to be performed or complied with by it under this
Agreement by the time of Closing.
(c) Seller shall have delivered or caused to be delivered to Purchaser the
documents specified in Section 1.04(b).
(d) If required, the Parent Shareholder Approval shall have been obtained.
(e) During the period from [date of last Financial Statements] until the
Closing, there shall not have occurred, and there shall not exist on the Closing
Date, any condition or fact which has, or would reasonably be expected to have,
a Material Adverse Effect.
(f) Either (i) the Dovobet(R) License and Supply Agreement or (ii) the
Development Agreement shall be in full force and effect.
28
FINAL FORM
SECTION 5.04. Conditions to Obligations of Seller.
The obligation of Seller to effect the transactions contemplated by the
Purchase Transaction and to execute and deliver the Definitive Agreements shall
be further subject to the satisfaction or waiver by BMS at or prior to the
Closing of the following conditions:
(a) The representations and warranties of Purchaser made in this
Agreement, the Option Agreement, and any other Definitive Agreements that are
qualified as to materiality shall be true and correct, and those not so
qualified shall be true and correct in all material respects as of the Closing
Date as though made on the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct in all
material respects, on and as of such earlier date).
(b) Purchaser shall have performed in all material respects all
obligations and covenants required to be performed or complied with by it under
this Agreement by the time of Closing.
(c) Purchaser shall have delivered or caused to be delivered to Seller the
payment required by Section 1.04(c).
(d) Purchaser shall have delivered or caused to be delivered to Seller
each of the documents specified in Section 1.04(c).
SECTION 5.05. Waiver of Closing Conditions.
Purchaser and Seller acknowledge and agree that if Purchaser or Seller has
knowledge of a failure of any condition set forth in Section 5.03 or 5.04,
respectively, or of any breach by the other Party of any representation,
warranty or covenant contained in this Agreement, and such Party proceeds with
the Closing, such Party shall be deemed to have waived such condition or breach
and such Party and its successors, assigns and Affiliates shall not be entitled
to be indemnified pursuant to Article VII, to xxx for damages or to assert any
other right or remedy for any losses, arising from any matters relating to such
condition or breach, notwithstanding anything to the contrary contained herein
or in any certificate delivered pursuant hereto.
SECTION 5.06. Frustration of Closing Conditions.
Neither Purchaser nor Seller may rely on the failure of any condition set
forth in this Article V to be satisfied if such failure was caused by such
Party's failure to act in good faith or to use its best efforts to cause the
Closing to occur, to the extent required by Section 4.04.
29
FINAL FORM
ARTICLE VI.
TERMINATION AND AMENDMENT
SECTION 6.01. Termination.
This Agreement may be terminated at any time prior to the Closing by:
(a) Mutual consent of Seller and Purchaser;
(b) Either Seller or Purchaser if the Closing shall not have occurred on
or before {five (5) months after the Agreement Date}(unless the failure to
consummate the Closing by such date shall be due to the failure of the Party
seeking to terminate this Agreement to have fulfilled any of its obligations
under this Agreement);
(c) Either Seller or Purchaser if a condition to its obligation to perform
becomes incapable of fulfillment and such condition shall not have been waived
by the other Party; provided, that, Seller or Purchaser, as the case may be, may
not seek termination pursuant to this Section 6.01(c) if such condition is
incapable of fulfillment due to the failure of the Party seeking termination to
perform the agreements set forth herein required to be performed by such Party,
at or before Closing; or
(d) Either Seller or Purchaser if any court of competent jurisdiction or
other competent Governmental Entity shall have issued a statute, rule,
regulation, order, decree or injunction or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement and such statute, rule, regulation, order, decree or injunction
or other action shall have become final and nonappealable.
SECTION 6.02. Effect of Termination.
If this Agreement is terminated and the transactions contemplated
hereby are abandoned as described in Section 6.01, this Agreement shall become
null and void and of no further force and effect, except for the provisions of
(i) Section 4.03 relating to the obligation of Purchaser to keep confidential
certain information and data obtained by it from Seller or its Affiliates, (ii)
Section 8.06 relating to certain expenses, (iii) Sections 2.11 and 3.04 relating
to finder's fees and broker's fees, (iv) Section 6.01 and this Section 6.02, (v)
Section 4.07 relating to publicity and (vi) Section 8.07 relating to governing
law. Nothing in this Section 6.02 shall be deemed to release any Party from any
liability for any breach by such Party of the terms and provisions of this
Agreement or to impair the right of any Party to compel specific performance by
any other Party of its obligations under this Agreement.
SECTION 6.03. Amendments and Waivers.
This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the Parties hereto. By an instrument in writing
Purchaser, on the one hand, or Seller,
30
FINAL FORM
on the other hand, may waive compliance by the other Party with any term or
provision of this Agreement that such other Party was or is obligated to comply
with or perform.
ARTICLE VII.
SURVIVAL; INDEMNIFICATION
SECTION 7.01. Survival of Representations.
The representations and warranties contained in this Agreement (including
the Schedules), in any Related Instrument, the Seller's Officer's Certificate,
the Purchaser's Officer's Certificate and in any other document delivered in
connection herewith or therewith shall survive the Closing solely for purposes
of this Article VII and shall terminate at the close of business on the
eighteen-month anniversary of the Closing Date; provided, that, the
representations and warranties contained in Section 2.01 (Organization); Section
2.02 (Authority; Execution and Delivery; Enforceability); Section 2.11 (Brokers
and Finders); Section 3.01 (Organization); and Section 3.02 (Authority;
Execution and Delivery; Enforceability) shall terminate on the third anniversary
of the Closing Date.
SECTION 7.02. Indemnification by Seller.
(a) Subject to Section 1.06(d), and 7.08, Seller shall indemnify Purchaser
and its Affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives against, and hold them harmless from,
any loss, liability, claim, damage or expense (including reasonable legal fees
and expenses) ("Losses"), as incurred (payable promptly upon written request),
to the extent arising from:
(i) any breach of any representation or warranty of Seller that survives
the Closing and is contained in this Agreement (including the
Schedules) or the Seller's Officer's Certificate;
(ii) subject to the provisions of Section 7.07(b), any breach of any
covenant or obligation of Seller contained in this Agreement or in
any Related Instrument;
(iii) any Excluded Liability; and
(iv) any fees, expenses or other payments incurred or owed by Seller or
its Affiliates to any brokers, financial advisors or comparable
other Persons retained or employed by it in connection with the
transactions contemplated by this Agreement or by any Related
Instrument.
(b) Seller's indemnification obligations under Section 7.02(a)(i) shall be
limited as set forth in Schedule 7.02(b).
(c) The limitations contained in Schedule 7.02(b) shall not be applicable
to indemnification pursuant to Section 7.02(a)(i), only as it relates to
breaches of the representations set forth in Sections 2.01, 2.02, 2.11 and 2.18.
31
FINAL FORM
SECTION 7.03. Indemnification by Purchaser.
Subject to Section 7.08, Purchaser shall indemnify Seller, its Affiliates
and each of their respective officers, directors, employees, stockholders,
agents and representatives against, and agrees to hold them harmless from, any
Loss, as incurred (payable promptly upon written request), to the extent arising
from or in connection with or otherwise with respect to:
(a) any breach of any representation or warranty of Purchaser that
survives the Closing and is contained in this Agreement or the Purchaser's
Officer's Certificate; provided that Purchaser shall not be required to
indemnify any Person, and shall not have any liability under this Section
7.03(a) to the extent the liability or obligation is directly caused by any
action taken or omitted to be taken by Seller or any of its Affiliates.
(b) subject to the provisions of Section 7.07(b), any breach of any
covenant or obligation of Purchaser contained in this Agreement or in any
Related Instrument;
(c) any Assumed Liability; and
(d) any fees, expenses or other payments incurred or owed by Purchaser to
any brokers, financial advisors or other comparable Persons retained or employed
by it in connection with the transactions contemplated by this Agreement or by
any Related Instrument.
SECTION 7.04. Calculation of Losses.
The amount of any Loss for which indemnification is provided under clause
(i) of Section 7.02(a) or clause (a) of Section 7.03 shall be net of any amounts
actually recovered by the Indemnified Party under insurance policies with
respect to such Loss and shall be (a) increased to take account of any net Tax
cost incurred by the indemnified party arising from the receipt of indemnity
payments hereunder (grossed up for such increase) and (b) reduced to take
account of any net Tax benefit immediately realized by the indemnified party in
cash arising from the incurrence or payment of any such Loss. In computing the
amount of any such Tax cost or Tax benefit, the indemnified party shall be
deemed to recognize all other items of income, gain, loss deduction or credit
before recognizing any item arising from the receipt of any indemnity payment
under clause (i) of Section 7.02(a) or clause (a) of Section 7.03 or the
incurrence or payment of any indemnified Loss. Any indemnity payment under
clause (i) of Section 7.02(a) or clause (a) of Section 7.03 shall be treated as
an adjustment to the Up-Front Cash Purchase Price for Tax purposes, unless a
final determination (which shall include the execution of a Form 870-AD or
successor form) with respect to the indemnified party or any of its Affiliates
causes any such payment not to be treated as an adjustment to such price for
federal income Tax purposes.
SECTION 7.05. Termination of Indemnification.
The obligations to indemnify and hold harmless any Party, (a) pursuant to
Section 7.02(a)(i) or 7.03(a), shall terminate on the eighteen-month anniversary
of the Closing Date (except to the extent that pursuant to Section 7.01 any
representation or warranty survives past such anniversary) and (b) pursuant to
the other clauses of Sections 7.02 and 7.03, shall not terminate; provided,
however, that such obligations to indemnify and hold harmless shall not
32
FINAL FORM
terminate with respect to any item as to which the Person to be indemnified
shall have, before the expiration of the applicable period, previously made a
claim by delivering a notice of such claim (stating in reasonable detail the
basis of such claim) pursuant to Section 7.06 to the Party to be providing the
indemnification.
SECTION 7.06. Procedures.
(a) In order for a party (the "Indemnified Party") to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim made by any Person against the Indemnified Party (a "Third
Party Claim"), such Indemnified Party must notify the indemnifying party (the
"Indemnifying Party") in writing (and in reasonable detail) of the Third Party
Claim within 15 business days after receipt by such Indemnified Party of notice
of the Third Party Claim; provided, however, that failure to give such
notification shall not affect the indemnification provided hereunder except to
the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure (except that the Indemnifying Party shall not be liable
for any expenses incurred during the period in which the Indemnified Party
failed to give such notice). Thereafter, the Indemnified Party shall deliver to
the Indemnifying Party, within five business days' after the Indemnified Party's
receipt thereof, copies of all notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim.
(b) If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the Indemnifying
Party assumes such defense, the Indemnified Party shall have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of counsel employed
by the Indemnified Party for any period during which the Indemnifying Party has
not assumed the defense thereof (other than during any period in which the
Indemnified Party shall have failed to give notice of the Third Party Claim as
provided above). If the Indemnifying Party chooses to defend or prosecute a
Third Party Claim, all the indemnified parties shall cooperate in the defense or
prosecution thereof. Such cooperation shall include the retention and (upon the
Indemnifying Party's request) the provision to the Indemnifying Party of records
and information that are reasonably relevant to such Third Party Claim, and
making employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder. Whether or not
the Indemnifying Party assumes the defense of a Third Party Claim, the
Indemnified Party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the Indemnifying Party's
prior written consent (which consent shall not be unreasonably withheld). If the
Indemnifying Party assumes the defense of a Third Party Claim, the Indemnified
Party shall agree to any settlement, compromise or discharge of a Third Party
Claim that the Indemnifying Party may recommend and that by its terms obligates
the Indemnifying Party to pay the full amount of the liability in connection
with such Third Party Claim, which releases the Indemnified Party completely in
connection with such
33
FINAL FORM
Third Party Claim and that would not otherwise materially adversely affect the
Indemnified Party.
(c) In the event any Indemnified Party should have a claim against any
Indemnifying Party under Section 7.02 or 7.03 that does not involve a Third
Party Claim being asserted against or sought to be collected from such
Indemnified Party, the Indemnified Party shall deliver notice of such claim with
reasonable promptness to the Indemnifying Party. The failure by any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party from any liability that it may have to such Indemnified Party under
Section 7.02 or 7.03, except to the extent that the Indemnifying Party
demonstrates that it has been actually prejudiced by such failure. If the
Indemnifying Party disputes its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved by litigation in an appropriate
court of competent jurisdiction.
SECTION 7.07. Sole Remedy; No Additional Representations.
(a) Except as otherwise specifically provided in Section 8.08, Section
1.06, Section 1.08 or in any Related Instrument, each of Purchaser and Seller
acknowledges and agrees that, to the extent Closing occurs, its sole and
exclusive remedy after Closing with respect to any and all claims and causes of
action relating to this Agreement (including the Schedules), the Seller's
Officer's Certificate, the Purchaser's Officer's Certificate and the Related
Instruments, the Acquisition and the other transactions contemplated hereby and
thereby, the Business, the Acquired Assets and the Assumed Liabilities (other
than claims of, or causes of action arising from, fraud or relating to breaches
of covenants requiring performance after the Closing Date) shall be pursuant to
the indemnification provisions set forth in this Article VII; provided, that
nothing in this Section is intended to affect a Party's continuing obligations
under the Consent Agreement or any Ancillary Agreement. In furtherance of the
foregoing, each of Purchaser and Seller hereby waives, from and after Closing,
to the fullest extent permitted under applicable Law, any and all rights, claims
and causes of action relating to this Agreement (including the Schedules), the
Seller's Officer's Certificate, the Purchaser's Officer's Certificate, the
Assumption Agreement, the Acquisition and the other transactions contemplated
hereby and thereby, the Business, the Acquired Assets and the Assumed
Liabilities (other than claims of, or causes of action arising from, fraud or
relating to breaches of covenants requiring performance after the Closing Date)
it may have against the other Party hereto arising under or based upon any
applicable Law or arising under or based upon common law or otherwise (except
pursuant to the indemnification provisions set forth in Section 7.02 or Section
7.03, as applicable).
(b) Each of Purchaser and Seller acknowledges and agrees that, to the
extent the Closing occurs, it shall not have any remedy after the Closing with
respect to any and all claims and causes of action relating to any breach of any
covenant requiring performance prior to the Closing under this Agreement
(including the Schedules) (other than claims of, or causes of action arising
from, fraud); provided, that, this Section 7.07(b) shall not apply to any breach
of a covenant that requires performance prior to and after the Closing to the
extent any breach of such covenant occurs after the Closing.
34
FINAL FORM
(c) Purchaser acknowledges that it and its representatives have been
permitted full and complete access to the books and records, facilities,
equipment, tax returns, contracts, insurance policies (or summaries thereof) and
other properties and assets of the Business that it and its representatives have
desired or requested to see or review, and that it and its representatives have
had a opportunity to meet with the officers and employees of Seller and its
Affiliates to discuss the Business. For the avoidance of doubt, Purchaser's
access to such information and its opportunity to meet with such personnel shall
not limit Purchaser's right to make a claim for indemnification under Section
7.02(a).
(d) Purchaser acknowledges that none of Seller, its Affiliates or any
other Person has made any representation or warranty, expressed or implied, as
to the accuracy or completeness of any information regarding the Business
furnished or made available to Purchaser and its representatives, except as
expressly set forth in this Agreement (including the Schedules), the Related
Instruments or the Seller's Officer's Certificate, and none of Seller, its
Affiliates or any other Person shall have or be subject to any liability to
Purchaser or any other Person resulting from the distribution to Purchaser, or
Purchaser's use of, any such information, documents or material made available
to Purchaser in any "data rooms", management presentations or in any other form
in expectation of the transactions contemplated hereby except to the extent such
information, documents or materials is included in the representations or
warranties of the Seller set forth in this Agreement (including the Schedules),
the Related Instruments or the Seller's Officers' Certificates.
(e) Purchaser also acknowledges that, should Closing occur, except as
expressly set forth in the representations and warranties set forth in Article
II of this Agreement (including the Schedules), Related Instrument or in the
Seller's Officer's Certificate, there are no representations or warranties by
Seller of any kind, express or implied, with respect to the Business, and that
Purchaser is purchasing the Acquired Assets "as is", "where is" and "with all
faults". Without limiting the generality of the foregoing, except as expressly
set forth in the representations and warranties set forth in Article II of this
Agreement (including the Schedules), the Related Instruments or in the Seller's
Officer's Certificate, THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
SECTION 7.08. Limitations on Liability.
(a) Notwithstanding any provision herein, neither Seller nor Purchaser
shall in any event be liable to the other Party or its Affiliates, officers,
directors, employees, stockholders, agents or representatives on account of any
indemnity obligation set forth in Section 7.02(a)(i) or 7.03(a), for any
indirect, consequential or punitive damages (including, but not limited to, lost
profits, loss of use, damage to goodwill or loss of business); provided, that
for sake of clarity, any unpaid Royalties due Seller under the Option Agreement
shall be considered direct damages for purposes of the foregoing.
(b) Seller and Purchaser shall cooperate with each other in resolving any
claim or liability with respect to which one Party is obligated to indemnify the
other under this Agreement, including without limitation, by making commercially
reasonable efforts to mitigate or resolve any such claim or liability.
35
FINAL FORM
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.01. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed given upon receipt if delivered personally, or when sent if
mailed by registered or certified mail (return receipt requested) or by
reputable overnight express courier (charges prepaid) or transmitted by
facsimile (with confirmation of transmittal) to the Parties at the following
addresses (or at such other address for a Party as shall be specified by like
notice):
(a) if to Seller, to:
Xxxxxxx-Xxxxx Squibb Company
X.X. Xxx 0000
Xxxxx 000 at Xxxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Vice President and Senior Counsel - Worldwide Licensing
and Business Development
with a copy sent separately by registered mail or reputable
overnight courier to each of Seller's Senior Vice President -
Worldwide Business Development and to Seller's Vice President -
Alliance Management, both of whom are at the same address
(b) if to Purchaser, to:
Xxxxx Holdings PLC
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telephone (000) 000-0000
Facsimile: (000) 000-0000
Attention: President and Chief Executive Officer
with a copy separately by registered mail or reputable overnight
courier to: its General Counsel at the same address
SECTION 8.02. Definitions; Interpretation.
(a) For purposes of this Agreement:
"Accounts Receivable" means all accounts receivable, notes receivable and
other indebtedness due and owed by any Third Party to Seller or any of its
Affiliates arising or held in connection with the Business as of the close of
business on the Closing Date.
36
FINAL FORM
"Affiliate" means, with respect to any Person, any Person which, directly
or indirectly, controls, is controlled by, or is under common control with, the
specified Person. For purposes of this definition, the term "control" as applied
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management of that Person, whether through
ownership of voting securities or otherwise.
"Agreement Date" means the date first set forth above.
"Ancillary Agreements" means the XXX License Agreement, the XXX Supply
Agreement, and the Copromotion Agreement.
"ANDA" means an abbreviated new drug application which is submitted to the
FDA for approval to manufacture and/or sell a pharmaceutical product in the
Territory.
"Assignment of Internet Names" means the Assignment of Internet Names
agreement substantially in the form of Exhibit C.
"Assignment of Trademarks" means the Assignment of Trademarks agreement
substantially in the form of Exhibit D.
"Xxxx of Sale" means the General Assignment and Xxxx of Sale in
substantially the form of Exhibit B.
"Business" means the business of distributing, marketing and selling the
Product, as currently conducted by Seller and its Affiliates. The Business
specifically excludes any manufacturing or packaging of the Product.
"Code" means the Internal Revenue Code of 1986, as amended.
"Compound" means the crystalline vitamin D analogue MC 903 that is
licensed to Seller under the XXX License Agreement.
"Controlled by" means, with respect to any product, information or
intellectual property right, that the applicable Party or Person, in whole or in
part, owns or has a license to such product, information or intellectual
property right and has the ability to grant access or a license (or a
sublicense), as applicable, without violating the terms of any agreement or
other arrangements with any Third Party existing at the time such Party or
Person would be first required to grant such access, license or sublicense.
"Copromotion Agreement" means the Copromotion Agreement between Purchaser
and Seller for the copromotion by Purchaser and Seller of the Products, dated
effective May 1, 2003, and as the same may have been modified or supplemented
thereafter.
"Dovobet(R)" means a single pharmaceutical formulation containing both the
Compound and the steroid betamethasone dipropionate, in all presentations.
"FDA" means the United States Food and Drug Administration.
37
FINAL FORM
"GAAP" means United States generally accepted accounting principles as in
effect on the date hereof.
"Governmental Entity" means any Federal, state, local or non-U.S.
government or any court of competent jurisdiction, legislature, governmental
agency, administrative agency or commission or other governmental authority or
instrumentality, U.S. or non-U.S.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Intellectual Property" means the Trademark and all marketing know-how,
good will and copyrights, which are currently owned by Seller and that are used
exclusively in the conduct of the Business or relate exclusively to the Product.
For sake of clarity, Intellectual Property does not include any XXX Patents, any
XXX Technical Information, any patents owned or Controlled by Seller or any
technical information or know-how owned or Controlled by Seller relating to the
manufacture of Dovobet(R) or the Products.
"Knowledge" means (i) with respect to Seller, the actual knowledge of the
representatives of Seller set forth on Schedule 8.02(a) after due inquiry, and
(ii) with respect to Purchaser, the actual knowledge of any officer of Purchaser
after due inquiry.
"Laws" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of any Governmental Entity or any
self-regulatory organization (including any stock exchange on which the Seller
or Purchaser, as applicable, has listed securities).
"XXX" means XXX Pharma A/S, (formerly named XXX Pharmaceuticals Products,
Ltd. A/S (Lovens Kemiske Fabrik Produktionsaktieselskab)), a corporation
organized under the laws of Denmark), and having an address at Xxxxxxxxxxxxxx
00, XX-0000 Xxxxxxxx, Xxxxxxx.
"XXX License Agreement" means the agreement between Seller (as successor
to X.X. Xxxxxx & Sons, Inc.) and XXX for the development and commercialization
of products containing the Compound in the Licensed Territory within the
dermatological field dated September 28, 1989, as heretofore amended by
amendments thereto dated as of July 6, 1992 and April 8, 1993, a copy of which
is attached as Exhibit C to the Option Agreement, together with any amendments
thereto to which Purchaser has consented in writing.
"XXX Patents" means the patents, patent applications, and patent rights
licensed to Seller by XXX under the XXX License Agreement.
"XXX Supply Agreement" means the agreement between Seller and XXX for the
supply of finished and packaged products containing the Compound in the Licensed
Territory for use within the dermatological field dated April 8, 1993, a copy of
which is attached as Exhibit D to the Option Agreement, together with any
amendments thereto to which Purchaser has consented in writing.
"XXX Technical Information" means all information (including preclinical,
chemical-pharmaceutical and clinical data or other scientific information or
secret know-how about the
38
FINAL FORM
Compound and any Product, or uses for a Product, as well as all information and
secret know-how in the possession of XXX regarding the manufacture or packaging
of a Product) that has been or will be disclosed by or licensed to Seller by XXX
under the XXX License Agreement.
"Lien" means any lien (statutory or otherwise), claim, charge, option,
security interest, pledge, mortgage, restriction, financing statement or similar
encumbrance of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any lease having substantially the same
effect as any of the foregoing and any assignment or deposit arrangement in the
nature of a security device).
"Material Adverse Effect" means a material and adverse effect upon the
business, operations, assets, liabilities, financial condition or operating
results of the Business or the Acquired Assets (including the Products), taken
as a whole.
"NDA" means a New Drug Application, ANDA or Products License Application
for any Product, as appropriate, requesting permission to place a drug on the
market in accordance with 21 CFR Part 314, and all supplements filed pursuant to
the requirements of the FDA, including all documents, data and other information
concerning Products which are necessary for FDA approval to market a Product in
the Territory.
"Option Agreement" means the agreement between Purchaser and Seller dated
as of April 1, 2003 under which certain option rights are granted to Purchaser
to purchase the Business and to enter into this Asset Purchase Agreement with
Seller.
"Option", "Option Acceptance Date", and "Option Period" have the meanings
as set forth in the Option Agreement.
"Parent Shareholder Approval" means the affirmative vote of the holders of
a majority of the issued ordinary shares of Xxxxx Holdings plc taken at a duly
noticed and convened meeting of its shareholders.
"Party" means Seller or Purchaser.
"Permitted Liens" means, collectively (a) Liens for taxes or assessments
which are not delinquent or are being contested in good faith by appropriate
proceedings, (b) statutory mechanics, warehousemen's, materialmens, contractors,
workmen's, repairmen's and carriers liens, and other similar Liens arising in
the ordinary course for obligations which are not delinquent, (c) the rights, if
any, of Third Parties, appearing in product advertisements for the Products
being transferred as part of the Acquired Assets, and (d) Liens which do not
materially impair the current use or the value of the assets subject to such
Liens.
"Person" means any individual, group, corporation, partnership or other
organization or entity (including any Governmental Entity).
"Pre-Closing Tax Period" means all taxable periods ending on or before the
Closing Date and the portion ending on the Closing Date of any taxable period
that includes (but does not end on) the Closing Date.
39
FINAL FORM
"Product" means all current pharmaceutical preparations for human use in
final topical dosage forms which contain the Compound as a therapeutically
active ingredient that have been approved as of the Agreement Date by any
Governmental or Regulatory Authority for use and sale in the Territory, but
excluding Dovobet(R). Product means product in finished and packaged form for
use by the end-user.
"Related Instruments" means the Assumption Agreement, the Xxxx of Sale,
the Assignment of Internet Names and the Assignment of Trademarks.
"Retained Information" means any and all books and records prepared and
maintained by Seller in connection with the Business, including all regulatory
files (including correspondence with regulatory authorities), market research
data, and marketing data, that do not relate exclusively to the Business and are
used in connection with Seller's or its Affiliates' conduct of the Business
prior to the Closing Date or that are laboratory notebooks.
"Taxes", or "Tax" in the singular form, means any and all taxes, levies or
other like assessments, including, but not limited to, income, transfer, gains,
gross receipts, excise, inventory, property (real, personal or intangible),
custom duty, sales, use, license, withholding, payroll, employment, capital
stock and franchise taxes, imposed by the United States, or any state, local or
foreign government or subdivision or agency thereof.
"Tax Return" means any report, return or other information filed with any
taxing authority with respect to Taxes imposed upon or attributable to the
operations of the Business.
"Territory" means the fifty (50) states of the United States of America
and the District of Columbia, and any U.S. possessions and territories.
"Third Party" means a Person who or which is neither a Party nor an
Affiliate of a Party.
"Trademarks" means all trademarks set forth on Schedule 2.07(a) and domain
names set forth on Schedule 2.14 and all registrations, applications and
renewals for any of the foregoing, together with the goodwill associated
therewith.
"United States" means the fifty states of the United States of America and
the District of Columbia.
(b) The following terms have the meanings set forth in the Sections set
forth below:
TERM SECTION
---- -------
Acquired Assets 1.02(a)
Acquisition 1.01
Adverse Event 4.19(b)
40
FINAL FORM
TERM SECTION
---- -------
Assumed Liabilities 1.03(a)
Assumption Agreement 1.04(c)
Audited Financial Statements 4.19
Closing 1.04(a)
Closing Date 1.04(a)
Competition Law 4.05(a)
Competitive Business and Competitive Business Product 4.15(a)
Confidentiality Agreement 4.03(a)
Contracts 2.08
Definitive Agreements 5.01
DOJ 4.05(a)
Excluded Assets 1.02(c)
Excluded Liability 1.03(c)
Excluded Tax Liability 1.03(c)(iv)
FDA Act 2.09(a)
FTC 4.05(a)
Government Investigation 1.03(c)(vii)
Incentive Discounts 1.07(b)
Indemnified Party 7.06(a)
Indemnifying Party 7.06(a)
Inventory 1.08
Losses 7.02(a)
Names 4.10(c)
NDC 4.16
41
FINAL FORM
TERM SECTION
---- -------
Non-Serious Adverse Event 4.18(a)
Other Rebate Program 1.09(a)
Partial Event 1.08(c)
Pipeline Adjustment 1.06(a)
Proceeding 2.10(a)
Purchase Price 1.01
Purchaser Preamble
Purchaser's Officer's Certificate 5.03(c)
Rebate Program 1.09(a)
Royalties 1.01
Seller Preamble
Seller's Officer's Certificate 5.02(c)
Serious Adverse Event 4.18(a)
Shipped Products 1.03(c)(ii)
Third Party Claim 7.06(a)
Unanticipated Discounting 1.07(a)
Up-Front Cash Purchase Price 1.01
(c) In the event of an ambiguity or a question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly by the Parties
and no presumption or burden of proof shall arise favoring or disfavoring any
Party by virtue of the authorship of any provisions of this Agreement.
(d) The definitions of the terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (A) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other
42
FINAL FORM
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein); (B) any reference herein to any Person shall be construed to
include the Person's successors and assigns; (C) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof; and
(D) all references herein to Articles, Sections, Exhibits or Schedules shall be
construed to refer to Articles, Sections, Exhibits and Schedules of this
Agreement.
SECTION 8.03. Descriptive Headings.
The descriptive headings herein are inserted for convenience only and are
not intended to be part of or to affect the meaning or interpretation of this
Agreement.
SECTION 8.04. Counterparts.
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the Parties and
delivered to the other Party.
SECTION 8.05. Entire Agreement.
This Agreement (including the Schedules), the Purchaser's Officer's
Certificate, the Seller's Officer's Certificate, the Related Instruments and,
where and to the extent herein referenced, the Consent Agreement, the Option
Agreement and the Ancillary Agreements, along with the Schedules and Exhibits
hereto and thereto, contain the entire agreement and understanding between the
Parties hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to such subject matter. Neither Party
shall be liable or bound to any other Party in any manner by any
representations, warranties or covenants relating to such subject matter except
as specifically set forth herein (including the Schedules), in the Purchaser's
Officer's Certificate, the Seller's Officer's Certificate, the Option Agreement,
the Consent Agreement, the Ancillary Agreements or in the Related Instruments.
SECTION 8.06. Fees and Expenses.
Regardless of whether or not the transactions contemplated by this
Agreement are consummated, each Party shall bear its own fees and expenses
incurred in connection with the transactions contemplated by this Agreement and
the Related Instruments.
SECTION 8.07. Governing Law.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York applicable to agreements made and to be
performed entirely within such State, without regard to the conflicts of law
principles of such State other than Section 5-1401 of the New York General
Obligations Law.
43
FINAL FORM
SECTION 8.08. Specific Performance.
The Parties hereto agree that if any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached, irreparable damage would occur, no adequate remedy at law would exist
and damages would be difficult to determine, and that the Parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 8.09. Assignment.
This Agreement may not be assigned by any Party hereto without the prior
written consent of the other Party, provided, however, that Purchaser may assign
this Agreement to any of its Affiliates or to any successor to substantially all
of its pharmaceutical business, without the prior written consent of Seller;
provided, further, that, Purchaser fully and unconditionally guarantees the
obligations of such entity. Any attempted assignment in violation of this
Section 8.09 shall be void. Notwithstanding anything to the contrary in the
foregoing, Purchaser or its Affiliates may assign the right to receive the
assets described in Section 1.02(a)(iii) to XXX.
SECTION 8.10. Successors and Assigns.
This Agreement shall be binding upon and inure solely to the benefit of
the Parties hereto, their successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person or persons any right, benefits or remedies of any nature whatsoever under
or by reason of this Agreement.
SECTION 8.11. Severability.
In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the Parties shall negotiate in good
faith with a view to the substitution therefor of a suitable and equitable
solution in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid provision; provided, however, that the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
Parties hereto shall be enforceable to the fullest extent permitted by law.
SECTION 8.12. Consent to Jurisdiction.
Each of Purchaser and Seller irrevocably submits to the exclusive
jurisdiction of (a) the Supreme Court of the State of New York, New York County,
and (b) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement, any Related Instrument or any transaction contemplated hereby or
thereby. Each of Purchaser and Seller agrees to commence any such action, suit
or proceeding either in the United States District Court for the Southern
District of New York or if such suit, action or other proceeding may not be
brought in such court for jurisdictional reasons, in the Supreme Court of the
State of New York, New York County. Each of Purchaser and Seller further agrees
that service of any process, summons, notice or document
44
FINAL FORM
by U.S. registered mail to such Party's respective address set forth above shall
be effective service of process for any action, suit or proceeding in New York
with respect to any matters to which it has submitted to jurisdiction in this
Section 8.12. Each of Purchaser and Seller irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement, any Related Instrument or the transactions
contemplated hereby and thereby in (i) the Supreme Court of the State of New
York, New York County or (ii) the United States District Court for the Southern
District of New York, and hereby and thereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
SECTION 8.13. Waiver of Jury Trial.
Each Party hereto hereby waives to the fullest extent permitted by
applicable Law, any right it may have to a trial by jury in respect to any
litigation directly or indirectly arising out of, under or in connection with
this Agreement or any Related Instrument. Each Party hereto (a) certifies that
no representative, agent or attorney of any other Party has represented,
expressly or otherwise, that such other Party would not, in the event of
litigation, seek to enforce that foregoing waiver and (b) acknowledges that it
and the other Parties hereto have been induced to enter into this Agreement and
the Related Instruments, as applicable, by, among other things, the mutual
waivers and certifications in this Section 8.13.
SECTION 8.14. Attorney Fees.
A Party in breach of this Agreement shall, on demand, indemnify and hold
harmless the other Party for and against all reasonable out-of-pocket expenses,
including legal fees, incurred by such other Party by reason of the enforcement
and protection of its rights under this Agreement. The payment of such expenses
is in addition to any other relief to which such other Party may be entitled.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
45
FINAL FORM
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first written above.
XXXXXXX-XXXXX SQUIBB COMPANY
By:
------------------------------------
Name:
Title:
XXXXX (CHEMICALS) LIMITED
By:
------------------------------------
Name:
Title:
46
FINAL FORM
Exhibit A
FORM OF
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT (this "Assumption Agreement") is made as of this
___ day of ___________, 20___, by Xxxxx (Chemicals) Limited, a Republic of
Ireland corporation (the "Purchaser"), to Xxxxxxx-Xxxxx Squibb Company, a
Delaware corporation (the "Seller").
W I T N E S S E T H
WHEREAS, the Purchaser and the Seller have entered into an Asset Purchase
Agreement, dated as of ___________ (the "Asset Purchase Agreement"), pursuant to
which the Purchaser agreed to acquire from the Seller and its Affiliates the
Acquired Assets (capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Asset Purchase Agreement),
in consideration for the payment by the Purchaser of the Purchase Price and the
assumption by the Purchaser of the Assumed Liabilities upon the terms and
conditions hereof;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Purchaser, intending to be
legally bound, does hereby undertake and agree from and after the date hereof,
subject to the terms and conditions set forth in the Asset Purchase Agreement,
as follows:
1. Subject to the limitations set forth in the Asset Purchase Agreement,
the Purchaser, hereby absolutely and irrevocably assumes, and undertakes to be
solely liable and responsible for, the liabilities and obligations underlying
the Assumed Liabilities (including without limitation all obligations and
covenants of Seller arising under the XXX License Agreement and XXX Supply
Agreement after the Closing Date).
2. Subject to and in accordance with the Asset Purchase Agreement, the
Purchaser agrees to indemnify and hold harmless the Seller and its Affiliates
from any and all Losses sustained or incurred by the Seller and its Affiliates
by reason of any failure of the Purchaser to pay, perform or otherwise discharge
the Assumed Liabilities (including without limitation all obligations and
covenants of Seller arising under the XXX License Agreement and XXX Supply
Agreement after the Closing Date).
3. The Purchaser covenants and agrees with the Seller that the Purchaser
will execute all such instruments and take, or cause to be taken, such actions
as the Seller may reasonably request in order to more fully effectuate the
assumption of the Assumed Liabilities in accordance with this Assumption
Agreement and the Asset Purchase Agreement.
FINAL FORM
4. This Assumption Agreement shall be binding upon and inure solely to the
benefit of the Seller and the Purchaser and their respective permitted
successors and assigns subject to and in accordance with the terms of the Asset
Purchase Agreement.
5. This Assumption Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to any
applicable principles of conflicts of laws, other than Section 5-1401 of the New
York General Obligations Law.
IN WITNESS WHEREOF, the Purchaser has caused this Assumption Agreement to
be executed as of the date first written above.
XXXXX (CHEMICALS) LIMITED
By:
------------------------------------
Name:
Title:
2
FINAL FORM
Exhibit B
FORM OF
GENERAL ASSIGNMENT AND XXXX OF SALE
THIS GENERAL ASSIGNMENT AND XXXX OF SALE (this "Xxxx of Sale") is made as
of this ___ day of ________, ______, from Xxxxxxx-Xxxxx Squibb Company, a
Delaware corporation (the "Seller"), to Xxxxx (Chemicals) Limited, a Republic of
Ireland corporation (the "Purchaser").
W I T N E S S E T H
WHEREAS, the Purchaser and the Seller have entered into an Asset Purchase
Agreement, dated as of __________ (the "Asset Purchase Agreement"), pursuant to
which the Seller has agreed, and has agreed to cause its Affiliates, to sell,
assign, transfer, convey and deliver to the Purchaser the Acquired Assets
(capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Asset Purchase Agreement), in consideration
for the payment by Purchaser of the Purchase Price and the assumption by the
Purchaser of the Assumed Liabilities;
WHEREAS, Purchaser desires to accept the sale, assignment, transfer,
conveyance and delivery of the Acquired Assets;
NOW, THEREFORE, in consideration of the payment of the Purchase Price and
the assumption of the Assumed Liabilities, the receipt and sufficiency of which
are hereby acknowledged by the Seller (on behalf of itself and its Affiliates),
the Seller, intending to be legally bound, does hereby irrevocably sell, assign,
transfer, convey and deliver to the Purchaser, its successors and assigns
pursuant to and in accordance with the terms and provisions of the Asset
Purchase Agreement, all of the Seller's and its Affiliates' right, title and
interest in, to and under the Acquired Assets.
TO HAVE AND TO HOLD the Acquired Assets, together with all the rights and
appurtenances thereunto in any way belonging, unto the Purchaser, its successors
and assigns, forever.
PURCHASER hereby accepts the sale, assignment, transfer, conveyance and
delivery of the Acquired Assets.
THIS AGREEMENT (i) is made pursuant to, and is subject to the terms of,
the Asset Purchase Agreement and (ii) shall be binding upon and inure solely to
the benefit of the Seller and the Purchaser and their respective permitted
successors and assigns in accordance with the terms of the Asset Purchase
Agreement.
At any time or from time to time after the date hereof, at Purchaser's
request and without further consideration, Seller shall execute and deliver to
Purchaser such further instruments and
FINAL FORM
take such other actions as Purchaser may reasonably request to make effective
the transactions contemplated by the Asset Purchase Agreement and each Related
Agreement.
THIS AGREEMENT shall be governed by and construed in accordance with the
laws of the State of New York, without regard to any applicable principles of
conflicts of law, other than Section 5-1401 of the New York General Obligations
Law.
IN WITNESS WHEREOF, the Seller has caused this General Assignment and Xxxx
of Sale to be executed as of the date first written above.
XXXXXXX-XXXXX SQUIBB COMPANY
By:
----------------------------------
Name:
Title:
XXXXX (CHEMICALS) LIMITED
By:
----------------------------------
Name:
Title:
2
FINAL FORM
Exhibit C
ASSIGNMENT OF INTERNET NAMES
THIS ASSIGNMENT OF INTERNET NAMES (this "Assignment") is made as of the
____ day of ___________, _______, by and between Xxxxxxx-Xxxxx Squibb Company, a
Delaware corporation ("Assignor"), and Xxxxx (Chemicals) Limited, a Republic of
Ireland corporation ("Assignee").
W I T N E S S E T H
WHEREAS, Assignor is engaged in manufacturing, distributing, marketing and
selling products under the trademark Dovonex(R) (the "Product"); and
WHEREAS, Assignor and Assignee have entered into an Asset Purchase
Agreement for products under the trademark Dovonex(R) dated as of the ___th day
of _______, 20__ (the "Asset Purchase Agreement"), pursuant to which Assignor is
selling or causing to be sold to Assignee, and Assignee is purchasing and
acquiring, among other things, certain assets connected with the Product,
including right, title, and interest in and to the internet names listed on
Schedule I hereto (the "Internet Names");
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Assignor does hereby sell, assign,
transfer, set over, and deliver to Assignee right, title and interest in and to:
(i) the Internet Names;
(ii) all continuations, divisions, reissues and substitutes of the
Internet Names;
(iii) all rights of enforcement and the right to damages for past
infringement, misappropriation or other conflicts relating to the
Internet Names; and
(iv) all other rights relating to the Internet Names, to the extent such
rights exist.
FURTHERMORE, Assignor will, at the expense of Assignee (i) execute and
deliver such further instruments including, without limitation, further
instruments of assignment, and (ii) take such further actions as Assignee may
reasonably request in order to register this Assignment at the appropriate
registries and to demonstrate Assignee's title to the Internet Names.
FURTHERMORE, for avoidance of doubt, Assignee acknowledges and agrees that
Assignor makes no representations or warranties whatsoever with respect to the
Internet Names and the other assets and rights described in clauses (ii), (iii)
and (iv) above (including any representations and warranties with respect to the
existence, validity, enforceability, use or ownership of any such common law
rights), except for those representations and warranties expressly set forth in
Section 2.14 of the Asset Purchase Agreement.
FINAL FORM
This Assignment shall be governed by and construed in accordance with the
laws of the State of New York, without regard to any applicable principles of
conflicts of law, other than Section 5-1401 of the New York General Obligations
Law. Each of the Parties hereto hereby irrevocably and unconditionally consents
to jurisdiction as set forth in Section 8.12 of the Asset Purchase Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Assignment of
Internet Names for Dovonex(R) as of the date first written above.
XXXXXXX-XXXXX SQUIBB COMPANY
By:
----------------------------------
Name:
Title:
XXXXX (CHEMICALS) LIMITED
By:
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Attorney in Fact
2
FINAL FORM
SCHEDULE I
ASSIGNED INTERNET NAMES
Seller does not own any DOVONEX domain names. However, XXX owns XXXXXXX.XXX
(registered 10/29/02) and XXXXXXX.XX (registered 6/11/02).
FINAL FORM
Exhibit D
ASSIGNMENT OF TRADEMARKS
THIS ASSIGNMENT OF TRADEMARKS (this "Assignment") is made as of the ___th
day of ______, 20___, by and between Xxxxxxx-Xxxxx Squibb Company, a Delaware
corporation ("Assignor"), and Xxxxx (Chemicals) Limited, a Republic of Ireland
corporation ("Assignee").
W I T N E S S E T H
WHEREAS, Assignor is engaged in manufacturing, distributing, marketing and
selling products under the trademark Dovonex(R) (the "Product"); and
WHEREAS, Assignor and Assignee have entered into an Asset Purchase
Agreement for products under the trademark Dovonex(R) dated as of the __th day
of ______, 20__ (the "Asset Purchase Agreement"), pursuant to which Assignor is
selling or causing to be sold to Assignee, and Assignee is purchasing and
acquiring, among other things, certain assets connected with the Product,
including right, title, and interest in and to those names and marks in the
Territory (as such term is defined in the Asset Purchase Agreement), including
the registrations and/or applications set forth on such Schedule I annexed
hereto(collectively, the "Trademark");
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Assignor does hereby sell, assign,
transfer, set over, and deliver to Assignee all right, title and interest in and
to:
(i) the Trademark;
(ii) the goodwill of Seller's business connected with the use of the
Trademark;
(iii) all rights of enforcement and the right to damages for past
infringement, unfair competition or other conflicts relating to the
Trademark; and
(iv) except as limited hereto and by the Asset Purchase Agreement, all
other rights, including common law rights, relating to the Trademark
in the Territory to the extent such rights exist.
FURTHERMORE, Assignor will, at the expense of Assignee, (i) execute and
deliver such further instruments including, without limitation, further
instruments of assignment, and (ii) take such further actions as Assignee may
reasonably request in order to register this Assignment at the appropriate
registries and to demonstrate Assignee's title to the Trademark or in order to
prosecute any of the pending applications included in the Trademark.
FURTHERMORE, for avoidance of doubt, Assignee acknowledges and agrees that
Assignor makes no representations or warranties whatsoever with respect to the
Trademark and the other assets and rights described in clauses (ii), (iii) and
(iv) above (including any representations and warranties with respect to the
existence, validity, enforceability, use or
FINAL FORM
ownership of any such common law rights), except for those representations and
warranties expressly set forth in Section 2.07 of the Asset Purchase Agreement.
This Assignment shall be governed by and construed in accordance with the
laws of the State of New York, without regard to any applicable principles of
conflicts of law, other than Section 5-1401 of the New York General Obligations
Law. Each of the Parties hereto hereby irrevocably and unconditionally consents
to jurisdiction as set forth in Section 8.12 of the Asset Purchase Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Assignment of
Trademarks for Dovonex(R) as of the date first written above.
XXXXXXX-XXXXX SQUIBB COMPANY
By:
---------------------------------
Name:
Title:
XXXXX (CHEMICALS) LIMITED
By:
---------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Attorney in Fact
2
FINAL FORM
SCHEDULE I
ASSIGNED TRADEMARK
Dovonex Trademark:
Registration Number - 1799033
Serial Number - 74124643
Registered - October 19, 1993
Registered Owner - Westwood-Squibb Pharmaceuticals, Inc.
FINAL FORM
SCHEDULE 1.01(A)
UP-FRONT CASH PURCHASE PRICE
Amount payable in cash at Closing: U.S. $_____________ (subject to adjustment
pursuant to Article 1 of the Asset Purchase Agreement).
FINAL FORM
SCHEDULE 1.04(C)
ACCOUNT OF SELLER
The cash to be delivered at Closing pursuant to Section 1.04(c) shall be wire
transferred to the following account for Xxxxxxx-Xxxxx Squibb Company:
The bank account instructions for Xxxxxxx-Xxxxx Squibb Company are:
--------------------------------------------------------------------------------
ABA Number: #
--------------------------------------------------------------------------------
Bank Name:
--------------------------------------------------------------------------------
Bank Address:
--------------------------------------------------------------------------------
Account Name: Xxxxxxx-Xxxxx Squibb Company
--------------------------------------------------------------------------------
Account Number: #
--------------------------------------------------------------------------------
Reference: _______________________
--------------------------------------------------------------------------------
Amount to be wired: $
--------------------------------------------------------------------------------
FINAL FORM
SCHEDULE 2.03(A)
VIOLATIONS
None.
CONSENTS OF THIRD PARTIES
The prior written consent of XXX is required for the consummation of the
transactions contemplated by this Agreement and has been given in the Consent
Agreement.
No other consents are required.
FINAL FORM
SCHEDULE 2.03(B)
CONSENTS AND APPROVALS
None.
FINAL FORM
SCHEDULE 2.07(A)
INTELLECTUAL PROPERTY
A. All registered Intellectual Property, other applications for registration
of Intellectual Property:
U.S. Trademark for Dovonex(R)
Registration Number - 1799033
Serial Number - 74124643
Registered - October 19, 1993
Registered Owner - Westwood-Squibb Pharmaceuticals, Inc.
B. All common law trademark and service marks used in the Business:
See Schedule 4.01, Item 2.
C. All licenses or similar agreements or arrangements to which Seller or
Affiliate is a party, either as licensee or licensor, relating to the
Intellectual Property:
(1) Seller is also a party to the XXX License Agreement under which Seller
is licensed under LEO's Patents and Technical Information to market and
sell the Products in the Territory. Seller is also party to the XXX Supply
Agreement, under which XXX provides seller with its requirements for the
Product.
2
FINAL FORM
SCHEDULE 2.07(B)
EXCEPTIONS TO INTELLECTUAL PROPERTY
Seller is also a party to the XXX License Agreement under which Seller is
licensed under LEO's Patents and Technical Information to market and sell the
Products in the Territory. Seller is also party to the XXX Supply Agreement,
under which XXX provides seller with its requirements for the Product Seller is
also a part to a Reversion of Rights Agreement with XXX for the exclusive
development and commercialization by XXX of Dovobet(R).
FINAL FORM
SCHEDULE 2.08
CONTRACTS WITH RESPECT TO THE BUSINESS
A. Contracts that contain a covenant not to compete or covenants that in any
way purport to restrict the business activity of Seller and/or its
Affiliates or limit the freedom of Seller and/or its Affiliates to engage
in any of the Business or to compete with any Person or otherwise
restricts the rights of Seller and/or its Affiliates to use or disclose
any information in its or their possession:
Seller is also a party to the XXX License Agreement under which Seller is
licensed under LEO's Patents and Technical Information to market and sell
the Products in the Territory. Seller is also party to the XXX Supply
Agreement, under which XXX provides seller with its requirements for the
Product. These Agreements require the consent of Seller to assign any such
contracts or to sublicense or assign any rights it has under those
agreements. Seller is also a part to a Reversion of Rights Agreement with
XXX for the exclusive development and commercialization by XXX of
Dovobet(R).
B. Contracts that involve payment by Seller and/or any of its Affiliates of
more than $50,000 or extending for a term more than 180 days from the date
of this Agreement (unless terminable without payment or penalty upon no
more than 60 days' notice), other than purchase orders entered into in the
ordinary course of the Business consistent with past practice:
{To be inserted - e.g. rebate obligations; XXX contracts.
C. Contracts involving the obligation of Seller and/or any of its Affiliates
to deliver products or services for payment of more than $50,000 or
extending for a term more than 180 days from the date of this Agreement
(unless terminable without payment or penalty upon no more than 60 days'
notice), other than sales orders entered into in the ordinary course of
the Business consistent with past practice:
XXX License Agreement and XXX Supply Agreement.
FINAL FORM
SCHEDULE 2.08 (CONTINUED)
D. Contracts for the sale of any Acquired Asset (other than inventory sales
in the ordinary course of business) or the grant of any preferential
rights to purchase any Acquired Asset or requiring the consent of any
party to the transfer thereof or that creates a relationship with any
distributor, dealer, manufacturers, representative or sales agency or that
provides for payments to or by any Person based on sales, purchases, or
profits, other than direct payments for goods:
XXX License Agreement and XXX Supply Agreement.
E. Leases, installments or conditional sale agreements, or other Contracts
affecting the ownership of, leasing of, title to, use of or any other
interest in any Acquired Assets (except personal property leases and
installment or conditional sales agreements having a value per item or
aggregate payments of less than $50,000 or extending for a term less than
180 days from the date of this Agreement (unless terminable without
payment or penalty upon no more than 60 days' notice)):
XXX License Agreement and XXX Supply Agreement.
FINAL FORM
SCHEDULE 2.09(A)
EXCEPTIONS TO COMPLIANCE WITH LAW
FINAL FORM
SCHEDULE 2.09(B)(i)
EXCEPTIONS TO FDA COMPLIANCE
FINAL FORM
SCHEDULE 2.09(B)(ii)
FDA NOTICE SINCE _________
FINAL FORM
SCHEDULE 2.10
LITIGATION
FINAL FORM
SCHEDULE 2.12
REGISTRATIONS
United States regulatory status:
--------------------------------------------------------------------------------
STATUS NDC NO. TRADE NAME STRENGTH SIZE
APPROVAL DATE FDA NO. GENERIC NAME PACKAGE PACKAGE SIZE
FILE HOLDER
--------------------------------------------------------------------------------
.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FINAL FORM
SCHEDULE 2.14
WEBSITES AND DOMAIN NAMES
FINAL FORM
SCHEDULE 4.01
EXCEPTIONS TO CONDUCT OF BUSINESS IN THE ORDINARY COURSE
FINAL FORM
SCHEDULE 7.02(B)
LIMITATIONS ON SELLER'S INDEMNIFICATION OBLIGATIONS
Seller shall not be required to indemnify any Person, and shall not have any
liability:
1. under clause (i) of Section 7.02 (a) unless the aggregate of all Losses
for which Seller would, but for this clause (i), be liable exceeds on a
cumulative basis an amount equal to one percent (1.0%) of the Up-Front
Cash Purchase Price, and then only to the extent of any such excess;
2. under clause (i) of Section 7.02(a) for any individual items (or series of
related individual items) where the Loss relating thereto is less than
$25,000, in which case such items shall not be aggregated for purposes of
clause (i) of this Schedule 7.02(b);
3. under clause (i) of Section 7.02(a) in excess of an aggregate amount equal
to ten percent (10.0%) of the Up-Front Cash Purchase Price; and
4. under clause (i) of Section 7.02(a) to the extent the liability or
obligation is directly caused by any action taken or omitted to be taken
by Purchaser or any of its Affiliates.
FINAL FORM
SCHEDULE 8.02(A)
REPRESENTATIVES
1. The following individuals are Seller's and its Affiliates' representatives
with primary responsibilities in their respective areas of expertise:
EXECUTION COPY
CONSENT AGREEMENT
THIS AGREEMENT ("AGREEMENT") is made and entered by and between XXXXXXX-XXXXX
SQUIBB COMPANY, a Delaware corporation, headquartered at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("BMS"), XXXXX (CHEMICALS) LIMITED, a corporation of the
Republic of Ireland, with offices at 0 Xxxxxxxx Xxxx, Xxx Xxxxxxxxx, Xx. Xxxxxx,
Xxxxxxxx of Ireland ("XXXXX"), and XXX PHARMA A/S (FORMERLY NAMED XXX
PHARMACEUTICAL PRODUCTS, LTD.), a Danish entity, with offices at Xxxxxxxxxxxxxx
00, XX-0000 Xxxxxxxx, Xxxxxxx ("XXX"). Capitalized terms not otherwise defined
herein shall have the meanings set forth in Article 1 of this Agreement.
RECITALS
WHEREAS, on the date hereof, BMS and Xxxxx are entering into (1) an
agreement under which BMS will grant to Xxxxx the right to copromote the
Dovonex(R) Product with BMS in the Territory (said agreement, as it may be
amended or supplemented by BMS and Xxxxx hereafter, the "COPROMOTION AGREEMENT")
and (2) an Option Agreement under which Xxxxx will have the option, under
specified terms and conditions, to purchase all BMS' rights, title and interest
in the Acquired Assets (as defined therein) (said agreement, as it may be
amended or supplemented by BMS and Xxxxx hereafter, the "OPTION AGREEMENT");
WHEREAS, if such option under the Option Agreement (the "OPTION") is
exercised, BMS and Xxxxx will enter into an asset purchase agreement therefor
substantially in the form attached to the Option Agreement (said agreement, as
it may be amended or supplemented by BMS and Xxxxx hereafter, the "ASSET
PURCHASE AGREEMENT") whereby BMS will, among other things, assign to Xxxxx, and
Xxxxx will assume, subject to the terms thereof, BMS' rights, interests,
obligations and covenants under the XXX Supply Agreement and XXX License
Agreement;
WHEREAS, the Parties wish to memorialize written consent of XXX to the
execution, delivery and performance by BMS of the Copromotion Agreement, the
Option Agreement and the Asset Purchase Agreement;
WHEREAS, on the date hereof, Xxxxx and XXX are entering into a set of
documents and business transactions (the "XXX-XXXXX AGREEMENTS") whereby Xxxxx,
if it exercises the Option and a Closing takes place in accordance with the
terms of the Asset Purchase Agreement, will assign to XXX certain rights
regarding the Dovonex(R) Product immediately after the Closing;
WHEREAS, under such XXX-Xxxxx Agreements, Xxxxx will be entitled to book
sales of the Dovonex(R) Products (as defined below) in the Territory;
WHEREAS, Xxxxx will agree to pay BMS a royalty on Net Sales of the
Dovonex(R) Product occurring prior to December 31, 2007 pursuant to the terms of
the Option Agreement;
WHEREAS, in order to induce BMS and Xxxxx to enter into the Copromotion
- 1 -
EXECUTION COPY
Agreement, the Option Agreement and, if the Option is exercised, the Asset
Purchase Agreement, BMS and Xxxxx require certain assurances and commitments of
XXX and XXX is willing to provide such assurances and commitments; and
WHEREAS, to ensure that BMS receives all of the Royalty Payments due it
under the Option Agreement, the Parties wish to provide for the continued
payment by XXX to BMS of such Royalty Payments as set forth herein, in the event
that, prior to December 31, 2007, Xxxxx is no longer entitled to book sales of
the Dovonex(R) Product in the Territory;
NOW, THEREFORE, in consideration of the foregoing premises and the
following covenants, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, XXX, BMS and Xxxxx agree as
follows:
1. DEFINITIONS
For the purposes of this Agreement, the following definitions shall apply,
and the terms defined herein in plural shall include the singular and
vice-versa:
"AFFILIATE" means, with respect to a Party hereto, any corporation,
partnership, joint venture or other business arrangement which is controlled by,
controlling or under common control with such Party, with "control" meaning
direct or indirect beneficial ownership or control of more than fifty percent
(50%) of the voting stock of such corporation or other business entity.
"AGREEMENT" means this agreement, as the same may be amended or
supplemented from time to time hereafter.
"CLOSING" means the closing under the Asset Purchase Agreement, if any.
"CLOSING DATE" means the day on which the closing under the Asset Purchase
Agreement takes place, if ever.
"COMPOUND" has the meaning set forth in the XXX License Agreement.
"CONTROLLED BY" means, with respect to any compound, Patent, know-how,
data, regulatory filing or Regulatory Approval, information or intellectual
property right, that the Party owns or has a license to such compound, Patent,
know-how, data, regulatory filing or Regulatory Approval, information or
intellectual property right and has the ability to grant to another Party
access, a license or a sublicense (as applicable) to such compound, Patent,
know-how, data, regulatory filing or Regulatory Approval, information or
intellectual property right as provided for herein without violating the terms
of any agreement or other arrangements with any Third Party existing at the time
such Party would be first required hereunder to grant such other Party such
access, license or sublicense.
"DOVOBET(R) PRODUCT" means any pharmaceutical preparation containing both
of the following two active ingredients: (1) the Compound and (2) the steroid
Betamethasone
- 2 -
EXECUTION COPY
Dipropionate, in all dosage forms, formulations, presentations, and line
extensions.
"DOVONEX(R) PRODUCT" means all current pharmaceutical preparations for
human use in final topical dosage forms which contain the Compound as a
therapeutically active ingredient that have been approved for marketing as of
the Effective Date by the relevant Governmental or Regulatory Authority in the
Territory or which may hereafter be approved for marketing by a relevant
Governmental or Regulatory Authority in the Territory. For sake of clarity,
Dovonex(R) Product does not include the Dovobet(R) Product.
"EFFECTIVE DATE" meansApril 1, 2003.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, agency, commission, official or other instrumentality of any
federal, state, county, city or other political subdivision, foreign or
domestic.
"IND" means an Investigational New Drug Application, as defined in the
United States Federal Food, Drug and Cosmetic Act and applicable regulations
promulgated thereunder as amended from time to time, filed in the United States.
"INSPECTION" has the meaning set forth in Section 3.7.
"INTEREST RATE" has the meaning set forth in Section 3.3.1.
"LAWS" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of any Governmental or Regulatory
Authority (including any stock exchange on which a Party has listed securities).
"XXX LICENSE AGREEMENT" means the Agreement between XXX and BMS (as
successor to Squibb) for the use and sale of Licensed Product(s) in the
Territory within the dermatological field dated September 28, 1989, as amended
by amendments thereto dated as of July 6, 1992, April 8, 1993, and as of the
date hereof, and as the same may be amended or supplemented by the parties in
the future.
"XXX SUPPLY AGREEMENT" means the agreement between BMS and XXX for the
supply of finished and packaged products containing the Compound in the
Territory for use within the dermatological field dated April 8, 1993 and as the
same may be amended or supplemented by the parties in the future.
"LICENSED PRODUCT(S)" means pharmaceutical compositions and dosage units
containing the Compound, whether alone or in combination with other active
ingredients, and shall include the Dovonex(R) Products and the Dovobet(R)
Products.
"NDA" means a New Drug Application, as defined in the United States
Federal Food, Drug and Cosmetic Act and applicable regulations promulgated
thereunder as amended from time to time.
- 3 -
EXECUTION COPY
"NET SALES" means the aggregate sales in the Territory of the Dovonex(R)
Products by XXX, its Affiliates, its licensees or by a Third Party who
distributes such Dovonex(R) Product as agent or licensee of XXX, its Affiliates
or its licensees (a "Third Party Partner"), in each case from the sale of a
Dovonex(R) Product to independent Third Parties less the following amounts (to
the extent not reimbursed by the purchaser or transferee): sales returns and
allowances, including trade, quantity and cash discounts and any other
adjustments, including those granted on account of price adjustments, billing
errors, rejected goods, damaged goods, recalls, returns, rebates, chargeback
rebates, fees, reimbursements or similar payments granted or given to
wholesalers or other distributors (including retailers), buying groups, health
care insurance carriers or other institutions, freight and insurance charges
billed to the customers, customs or excise duties, sales tax and other taxes
(except income taxes) or duties relating to invoiced sales amounts, and any
payment in respect of sales to any Governmental or Regulatory Authority in
respect of any Federal or state Medicaid, Medicare or similar program, all as
determined in accordance with generally accepted accounting principles on a
basis consistent with the audited financial statements of XXX, provided,
however, that any deductions from aggregate sales described above in excess of
eight percent (8%) shall not be taken into account for purposes of calculating
Net Sales.
"PARTY" means LEO, Galen, or BMS, as the case may be.
"PATENTS" has the meaning set forth in the XXX License Agreement.
"REGULATORY APPROVAL" means the IND and NDA, as well as any other filings,
approvals, licenses, registrations or authorizations of any Governmental or
Regulatory Authority that are Controlled by BMS and that relate to the
development, use, marketing, sale or distribution of the Dovonex(R) Product in
the Territory.
"ROYALTY PAYMENTS" has the meaning set forth in Section 3.1.
"SQUIBB" means X.X. Xxxxxx & Sons LLC, formerly known as X.X. Xxxxxx &
Sons, Inc.
"TECHNICAL INFORMATION" has the meaning set forth in the XXX License
Agreement.
"TERRITORY" has the meaning set forth in the XXX License Agreement.
"THIRD PARTY" means any business entity other than XXX, BMS, Xxxxx, and
their respective Affiliates.
2. CONSENT OF XXX; CONTINUING OBLIGATIONS.
2.1 CONSENT OF XXX TO COPROMOTION AGREEMENT. XXX hereby consents to
execution, delivery and performance by BMS and Xxxxx of the Copromotion
Agreement; provided, that the terms thereof do not conflict with the terms and
conditions of the XXX License Agreement or the XXX Supply Agreement. XXX
acknowledges that it will supply BMS with all
- 4 -
EXECUTION COPY
of its Dovonex(R) Product requirements pursuant to the XXX Supply Agreement
through the end of the Copromotion Term (December 31, 2007). Nothing in the
Copromotion Agreement will affect compensation due XXX under the XXX Supply and
XXX License Agreements or BMS' obligations under either such agreement, and BMS
shall be responsible for the performance by Xxxxx of BMS' obligations and
covenants under either such agreement. BMS shall be responsible for all
compensation to be made to Xxxxx for its services provided with respect to the
promotion of the Dovonex(R) Product. XXX acknowledges that it is not entitled to
any compensation from BMS based on any payments made to BMS by Xxxxx for the
right to copromote the Dovonex(R) Product.
2.2 CONSENT OF XXX TO OPTION AGREEMENT AND TO ASSET PURCHASE AGREEMENT.
XXX hereby consents to execution, delivery and performance by BMS and Xxxxx of
the Option Agreement, and, if such Option is exercised, to the execution,
delivery and performance of the Asset Purchase Agreement, including, but not
limited to the assignment by BMS of their respective rights and interests under,
and the assumption by Xxxxx of BMS' obligations and covenants under, the XXX
License Agreement and the XXX Supply Agreement.
2.2.1 If such Option is exercised by Xxxxx, and there is a Closing
pursuant to the Asset Purchase Agreement:
(i) XXX shall use commercially reasonable efforts at its
expense to assist BMS and Xxxxx to procure all applicable regulatory
approvals necessary to consummate the purchase transaction as
expeditiously as possible. Promptly after execution of the Asset
Purchase Agreement, XXX will use its reasonable best efforts to
cooperate with BMS and Xxxxx in filing any appropriate forms under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
("HSR ACT") with the United States Federal Trade Commission ("FTC")
and the United States Department of Justice ("DOJ"). XXX shall, if
required, supply as promptly as practicable to the FTC and the DOJ
such supplemental information requested, if any, in connection with
the transactions contemplated hereby pursuant to the HSR Act. Any
supplemental information shall be in substantial compliance with the
requirements of the HSR Act. XXX shall furnish to BMS and Xxxxx such
necessary information and reasonable assistance as either may
request in connection with its preparation of any submission that is
necessary under the HSR Act. BMS, Xxxxx and XXX shall keep each
other apprised of the status of any communications with, and any
inquiries or requests for additional information from, the FTC and
the DOJ and shall comply promptly with any such inquiry or request.
Each party shall use its best efforts to obtain any clearance
required under the HSR Act and under any other applicable
competition, merger control, antitrust or similar Laws, if any, for
the consummation of the transactions contemplated by the Asset
Purchase Agreement.
(ii) XXX shall use its reasonable best efforts to assist in
the Closing of the purchase transaction including taking all
reasonable actions necessary to comply promptly with all legal
requirements that may be imposed on it or any of its
- 5 -
EXECUTION COPY
Affiliates with respect to the Closing and continuing to comply with
its obligations under the XXX Supply Agreement and XXX License
Agreement.
(iii) At the Closing, XXX and/or BMS, as applicable, shall
deliver (a) a release from XXX, substantially in the form of Section
5.4 of this Agreement, effective as of the Closing Date and relating
to the period ending on the Closing Date, with all references to
"Effective Date" in such section replaced with "Closing Date" and
(b) an acknowledgement from XXX and BMS, substantially in the form
of Section 2.6.1 effective as of the Closing Date and relating to
the period ending on the Closing Date.
2.3 CERTAIN PHASE IV STUDIES. XXX and BMS will continue to share 50-50 the
costs of the following Phase IV studies:
- Dermal Carcinogenicity Study in Mice (Study # DN01097) at Huntingdon
started 11/16/01 - report expected 09/04; and
- Photocarcinogenicity Study in Hairless Mice (Study #DN01098) at
Argus Labs started 11/26/01 - report expected 04/03.
2.4 FIELD. For sake of clarity, BMS and XXX acknowledges that the scope of
the license granted under the XXX License Agreement is limited to conditions
within the dermatological field in humans which are or will be approved by the
FDA.
2.5 SUPPLY OF THE DOVONEX(R) PRODUCT. In the event that Xxxxx exercises
the Option and there is a Closing pursuant to the Asset Purchase Agreement, BMS
will not supply Xxxxx with any Dovonex(R) Product (other than inventory firm
held by BMS or firm ordered by BMS as of the Closing Date and which is purchased
by Xxxxx from BMS pursuant to the Asset Purchase Agreement), all requirements
for which will be supplied by XXX. BMS will be responsible for paying XXX for
Dovonex(R) Product delivered to and accepted by BMS prior to the Closing Date or
that has been firm ordered by BMS prior to the Closing Date in accordance with
the terms of the XXX Supply Agreement and XXX License Agreement in effect prior
to the Closing Date; provided, that BMS retains the right to accept or reject
Dovonex(R) Product in accordance with the terms of the XXX Supply Agreement as
it exists immediately prior to the Closing Date. BMS will have no responsibility
or liability to XXX for any future orders by Xxxxx of Dovonex(R) Product and XXX
will look solely to Xxxxx to payment for same.
2.6 SPECIFIC ACKNOWLEDGEMENTS.
2.6.1 Each of XXX and BMS hereby acknowledges and agrees that (i)
the XXX Supply Agreement and XXX License Agreement constitute legal, valid
and binding obligations of such party or its Affiliate, are currently in
full force and effect, and are enforceable against such party or its
Affiliate in accordance with their terms, and (ii) such party or Affiliate
is not currently in breach or default, in any material respect, under
either agreement;
- 6 -
EXECUTION COPY
2.6.2 XXX acknowledges and agrees that it is not entitled to any
compensation from BMS based on any payments made heretofore or
concurrently with the execution of this Agreement by Xxxxx to BMS or to be
made by Xxxxx to BMS in the future with respect to (i) the purchase by
Xxxxx of the assets, rights, and interests acquired by Xxxxx under the
Asset Purchase Agreement, (ii) the assignment by BMS of its rights and
interests under, and the assumption by Xxxxx of BMS' obligations and
covenants under, the XXX License Agreement and the XXX Supply Agreement,
or (iii) the copromotion of the Dovonex(R) Product by Xxxxx pursuant to
the Copromotion Agreement;
2.6.3 BMS acknowledges and agrees that it is not entitled to any
compensation from Xxxxx or XXX based on any payments made heretofore or
concurrently with the execution of this Agreement by Xxxxx to XXX or to be
made by Xxxxx to XXX in the future with respect to the Dovobet(R) Product
or the Dovonex(R) Product. For the sake of clarity, the parties
acknowledge that this Section 2.6.3 does not apply to any Royalty Payments
that Xxxxx has agreed to pay directly to BMS pursuant to the Option
Agreement, any Royalty payments that XXX has agreed to pay BMS pursuant to
the Dovobet Reversion of Rights Agreement, or any payments that Xxxxx may
agree to pay to BMS pursuant to the Asset Purchase Agreement.
2.6.4 XXX acknowledges and agrees that, in the event that Xxxxx
exercises the Option and there is a Closing pursuant to the Asset Purchase
Agreement, BMS shall not have any indemnification obligations to XXX under
the provisions of Article XVI of the XXX License Agreement and Article XVI
of the XXX Supply Agreement to the extent that the same relate to the
Dovonex(R) Product sold by Xxxxx or XXX after the Closing Date or to
inventory sold by BMS to Xxxxx pursuant to the Asset Purchase Agreement,
except as it relates to inventory sold to Xxxxx by BMS under the Asset
Purchase Agreement that, by reason of act or omission of BMS or its
Affiliates, (a) is adulterated or misbranded, (b) does not meet the
applicable specifications therefor at the time the same is tendered to the
common carrier for delivery to Xxxxx, or (c) is not manufactured, labeled
or packaged in accordance with Good Manufacturing Practices and all other
applicable Laws including all applicable U.S. federal, state and local
environmental health and safety Laws in effect at the time and place of
manufacture thereof.
2.6.5 Xxxxx and XXX acknowledge and agree that BMS shall not be
required to make any filings to the IND and NDA after the Closing Date
(except with respect to reports due prior to or within one month after the
Closing Date), all of which shall be made by Xxxxx and/or XXX, as
separately agreed to by Xxxxx and XXX.
2.6.6 XXX and BMS agree that no termination, waiver, modification,
release or amendments of, to or from the XXX License Agreement or the XXX
Supply Agreement may be made voluntarily by such party without the prior
written consent of Xxxxx (such consent not to be unreasonably withheld);
provided that the foregoing consent obligation shall not apply to
termination by BMS or XXX of the XXX Supply Agreement or XXX License
Agreement for material breach by XXX or BMS (as the case may be) of either
- 7 -
EXECUTION COPY
such agreement (including termination of the XXX License Agreement by BMS
pursuant to Article XIII(C) thereof for material breach by XXX of its
obligations under the XXX Supply Agreement)..
2.7 CONTINUING RIGHTS AND OBLIGATIONS OF BMS. BMS shall not have any
responsibility or liability for the performance of the XXX Supply Agreement or
XXX License Agreement by Xxxxx after the Closing Date. In the event that Xxxxx
exercises the Option and there is a Closing pursuant to the Asset Purchase
Agreement, notwithstanding the foregoing and the assignment and assumption by
Xxxxx of BMS' rights, interest, obligations and covenants under the XXX Supply
Agreement and XXX License Agreement, BMS shall continue to abide by its
confidentiality obligations under the XXX License Agreement and the XXX Supply
Agreement (as the same existed immediately prior to the Closing Date), and shall
continue to abide by its obligations under Articles VIII(B), IX, X, XI, XIV(A),
XIV(C) and XVI(B)-(C) (but only to the extent, in the case of Articles
XVI(B)-(C), based on Dovonex(R) Product sold by BMS to Third Parties prior to
the Closing Date) of the XXX License Agreement (but specifically excluding
Section XII(B) of the XXX License Agreement) and under Article XVI (but only to
the extent based on Dovonex(R) Product sold by BMS or its Affiliates to Third
Parties prior to the Closing Date) of the XXX Supply Agreement.
3. ROYALTY PAYMENTS AND COVENANTS BY XXX AND XXXXX.
XXX and Xxxxx covenant, warrant, and represent to BMS that, in the event
Xxxxx exercises the Option and there is a Closing pursuant to the Asset Purchase
Agreement, under the terms of the XXX-Xxxxx Agreements, Xxxxx is and will be
entitled to book sales of the Dovonex(R) Product in the Territory through
December 31, 2007. However, part of the consideration to be paid to BMS pursuant
to the Option Agreement consists of a royalty to be paid by Xxxxx to BMS on Net
Sales of the Dovonex(R) Product occurring prior to December 31, 2007, which
royalty may be jeopardized if, prior to December 31, 2007, Xxxxx is no longer
entitled to book sales of a Dovonex(R) Product in the Territory because the
applicable XXX-Xxxxx Agreements are terminated or for any other reason.
Accordingly, in order to induce BMS to enter into and to consummate the Asset
Purchase Agreement, should Xxxxx elect to exercise the Option, and to ensure
that BMS receives the full consideration due under the Asset Purchase Agreement
and the Option Agreement, XXX agrees and covenants, that, IN THE EVENT AND ONLY
IN THE EVENT that prior to December 31, 2007, Xxxxx is no longer entitled to
book sales of the Dovonex(R) Product in the Territory, XXX will make Royalty
Payments to BMS and will perform the covenants and obligations hereinafter set
forth in this Article 3 through and including December 31, 2007, as follows:
3.1 ROYALTY PAYMENTS. In the event that Xxxxx exercises the Option and
there is a Closing pursuant to the Asset Purchase Agreement, and in the event
that, prior to December 31, 2007, Xxxxx is no longer entitled to book sales of
the Dovonex(R) Product in the Territory (the date on which such event shall
occur being referred to as the "RCD"), XXX shall pay to BMS a non-creditable and
non-refundable earned royalty on Net Sales of the Dovonex(R) Product in the
Territory (the "ROYALTY PAYMENTS"). The royalty rate shall be determined by the
date of the Closing, as follows:
- 8 -
EXECUTION COPY
CLOSING DATE ROYALTY RATE
------------ ------------
January 2004 20%
January 2005 10%
January 2006 5%;
provided, however, that if the Option is exercised and the Closing occurs
following, and pursuant to the provisions of the Option Agreement relating to, a
Change in Control (as defined in Appendix A) of BMS, the royalty rate shall be
calculated as set forth in Appendix A hereto.
The applicable royalty rate shall be applied to Net Sales of the
Dovonex(R) Product from the RCD through and including December 31, 2007 (the
"ROYALTY TERM"). The obligation of XXX to pay the Royalty Payments shall be
unconditional and irrevocable and shall not be subject to offset or credit. XXX
may arrange for any licensee of the Dovonex(R) Product who is entitled to book
sales in the Territory to make the Royalty Payments to BMS directly; provided,
that XXX shall remain jointly and severally responsible with the licensee for
the payment of any Royalty Payments.
3.2 END USER. There shall be no obligation to pay royalties to BMS under
this Article 3 on sales of Dovonex(R) Product between XXX, its Affiliates, its
licensees and its Third Party Partners, but in such instances the obligation to
pay royalties shall arise only upon the last sale by XXX, its Affiliates, its
licensees, or the Third Party Partners of XXX to unrelated Third Parties, such
as end users and distributors. Royalties due under this Article 3 shall be
deemed to accrue when Dovonex(R) Product is shipped or billed, whichever event
shall first occur.
3.3 MANNER OF PAYMENT. All payments hereunder shall be in United States
dollars in immediately available funds and shall be made by electronic funds
transfer to such bank account as may be designated from time to time by BMS.
3.3.1 LATE PAYMENT. Any payment, including, without limitation,
Royalty Payments, made by XXX hereunder after the date such payment is
due, shall bear interest at the lesser of: (a) two percent (2%) above the
prime commercial lending rate as published by Citibank, N.A., New York,
New York, as of the date such payment was due, or (b) the maximum rate
permitted by applicable Law (the "INTEREST Rate"). The Interest Rate shall
be calculated from the date payment was due until actually received by
BMS.
3.3.2 UNDERPAYMENT. If an Inspection (as defined in Section 3.7
hereafter) reveals an underpayment, then XXX shall promptly make up such
underpayment with interest at the Interest Rate.
3.4 WITHHOLDING TAXES. Where required to do so by applicable Law, XXX
shall withhold taxes required to be paid to a taxing authority in connection
with any payments to BMS hereunder, and XXX shall promptly furnish BMS with
satisfactory evidence of such withholding and payment. XXX shall cooperate with
BMS in obtaining exemption from withholding taxes
- 9 -
EXECUTION COPY
where available under applicable Law.
3.5 STATEMENTS. All Royalty Payments made to BMS hereunder shall be made
within sixty (60) days after the end of each calendar quarter during the Royalty
Term and shall be accompanied by a written statement setting forth in reasonable
detail the calculation thereof, including, for example, in the case of Royalty
Payments, the gross amount billed or invoiced by XXX, its Affiliate, its
sublicensees and any Third Party Partner for the sale and/or distribution for
the Dovonex(R) Product, permitted itemized deductions against such gross amount,
and Net Sales, calculated pursuant to Section 3.1, both in the aggregate and by
each shelf keeping unit (SKU).
3.6 RECORD KEEPING. XXX shall keep and maintain, and shall cause its
Affiliates, sublicensees and Third Party Partners, to keep and maintain,
complete and accurate books of account and records of all sales of the
Dovonex(R) Product in a manner adequate to enable XXX to calculate Net Sales and
shall retain such books and records for a period of three years from the last
day of the calendar quarter in which such sales were made.
3.7 INSPECTION. Upon at least two weeks' prior written notice, XXX shall
and shall cause its Affiliates, its sublicensees and Third Party Partners to
make such books of account and records available for inspection by an
independent certified public accountant selected by BMS (except one to whom XXX
has some reasonable objections) during normal business hours at the principal
offices of such entity, as the case may be, for the sole purpose of determining
whether appropriate accounting and payment have been made hereunder (the
"INSPECTION"). Such review and access shall be permitted once per year and only
with respect to the three-year period prior to the year in which the audit
occurs. Such independent certified public accountant shall be subject to such
appropriate confidentiality obligations as may be required and after the
Inspection may reveal to BMS only whether there exist any errors in payment and,
if an error exists, the amount of such error(s) and the calculation thereof, and
no additional or any other information. Results of any such examination shall be
made available to both BMS and XXX. BMS shall bear the cost of any such
Inspection; provided, that in the event the Inspection discloses that any
payments made to BMS hereunder for any accounting period were deficient by more
than five percent (5%), XXX shall reimburse BMS for the cost of such Inspection.
If Net Sales or payments have been understated, unpaid amounts shall be paid
promptly in accordance with this Article 3.
3.8 DILIGENT EFFORTS. XXX will use commercially reasonable efforts to
commercialize the Dovonex(R) Products in the Territory in accordance with
applicable Law.
3.9 ADVERTISING AND PROMOTION. BMS shall not have any responsibility or
liability for the cost and expense of advertising and promoting the Dovonex(R)
Product in the Territory after the Closing Date.
3.10 ADVERSE EVENTS. BMS shall not have any responsibility or liability
for the maintenance of any Regulatory Approvals for the Dovonex(R) Product or
the reporting of adverse events to the FDA required under applicable Law with
respect to the Dovonex(R) Product after the Closing Date (except with respect to
reports due prior to or within one month after the Closing Date). XXX will
reimburse BMS for any fully burdened costs incurred by BMS to assist XXX
- 10 -
EXECUTION COPY
with any of the foregoing.
4. [Intentionally omitted]
5. REPRESENTATIONS AND WARRANTIES; DISCLAIMER; LIMITATION OF LIABILITY
5.1 MUTUAL WARRANTIES. Each Party represents and warrants to the other
Parties that (a) it has all requisite corporate power and authority to enter
into this Agreement, to grant the licenses granted by it hereunder, and to
perform its other obligations under this Agreement, (b) execution of this
Agreement and the performance by the warranting Party of its obligations
hereunder, including, without limitation, the licenses granted by that Party
hereunder, have been duly authorized, (c) this Agreement is fully binding and
enforceable in accordance with its terms, and (d) the performance of this
Agreement by it does not create a breach or default under any other agreement to
which it is a party. BMS represents and warrants to the other Parties that it
has been duly and validly substituted for Squibb as a party to the XXX License
Agreement.
5.2 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE XXX
LICENSE AGREEMENT, THE XXX SUPPLY AGREEMENT, THE COPROMOTION AGREEMENT, THE
OPTION AGREEMENT OR THE ASSET PURCHASE AGREEMENT, BMS MAKES NO REPRESENTATIONS
AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
5.3 LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR
OTHERWISE, NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY WITH RESPECT TO ANY
SUBJECT MATTER OR DISPUTE ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT,
WHETHER UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL OR
EQUITABLE THEORY, FOR ANY INCIDENTAL, INDIRECT, PUNITIVE, SPECIAL, OR
CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF USE,
DAMAGE TO GOODWILL, OR LOSS OF BUSINESS, WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES); PROVIDED, HOWEVER, THAT THE
FOREGOING LIMITATIONS SHALL NOT APPLY WITH RESPECT TO DAMAGES ARISING AS A
RESULT OF WILLFUL MISCONDUCT OR GROSS NEGLIGENCE BY SUCH PARTY.
5.4 RELEASE AND WAIVER. XXX, on behalf of itself and its Affiliates,
including its and their administrators, successors, assigns, officers,
directors, employees, agents, and trustees (all of the foregoing being referred
to in this paragraph as "RELEASORS"), hereby releases, acquits and forever
discharges each of Xxxxx and BMS and their respective Affiliates, including
their administrators, successors, assigns, officers, directors, employees,
attorneys, agents, and trustees (all of the foregoing referred to in this
paragraph as "RELEASEES") from all debts, demands, actions, causes of action,
suits, accounts, torts, damages and any and all claims, defenses, offsets,
- 11 -
EXECUTION COPY
judgments, demands and liabilities whatsoever, of every name and nature, both at
law and in equity, known or unknown, suspected or unsuspected, accrued or
unaccrued, arising out of or in connection with any breach by BMS of its
performance obligations to XXX under the XXX License Agreement and XXX Supply
Agreement prior to the Effective Date; provided, however, that nothing contained
herein is intended to or shall release, waive or discharge any obligations (i)
that BMS may have with respect to: (a) its indemnification and hold harmless
obligations (and any defense obligations associated therewith) under the XXX
License Agreement and the XXX Supply Agreement as set forth in Sections 7.1 and
7.1.1 hereof, and (b) any amounts (inclusive of any royalties) that BMS is
obligated to pay XXX under the XXX License and XXX Supply Agreement for
Dovonex(R) Product ordered prior to the Effective Date, (ii) XXX may have to
supply Dovonex(R) Product to BMS that was firm ordered by BMS prior to the
Effective Date or to reimburse (or at BMS' option, replace) or credit BMS for
rejected or returned Dovonex(R) Product; (iii) BMS and XXX may have to pay one
another the amounts required under Section IX(B) and IX(C) of the XXX License
Agreement for infringement actions brought by XXX or BMS under such sections for
Third Party infringement occurring prior to the Effective Date; (iv) XXX may
have to indemnify and defend BMS against claims by a Third Party of infringement
pursuant to Article X of the XXX License Agreement; (v) that XXX may have with
respect to its continuing indemnification and hold harmless obligations (and any
defense obligations associated therewith) under the XXX License Agreement and/or
the XXX Supply Agreement arising out of claims made by Third Parties based on
acts or omissions of XXX prior to the Effective Date or as set forth in Sections
7.1 and 7.1.1 hereof, and (vi) BMS or XXX may have with respect to any breach
after the Effective Date of any obligations of BMS or XXX under the XXX License
Agreement or XXX Supply Agreement that survive the termination of said
Agreements.
6. CONFIDENTIALITY
6.1 NONDISCLOSURE. All Information disclosed by one Party to another Party
pursuant to this Agreement shall be "CONFIDENTIAL INFORMATION" for all purposes
hereunder. The Parties agree that for a period of five (5) years after receipt
of such Confidential Information, a Party receiving Confidential Information of
another Party will (i) use commercially reasonable efforts to maintain in
confidence such Confidential Information (but not less than those efforts as
such Party uses to maintain in confidence its own proprietary industrial
information of similar kind and value) and not to disclose such Confidential
Information to any Third Party without prior written consent of such other
Party, except for disclosures made in confidence to any Third Party under terms
consistent with this Agreement and made in furtherance of this Agreement or of
rights granted to a Party hereunder, and (ii) not use such other Party's
Confidential Information for any purpose except those permitted by this
Agreement.
6.2 EXCEPTIONS. The obligations in Section 6.1 shall not apply with
respect to any portion of the Confidential Information that the receiving Party
can show by competent proof:
6.2.1 Is publicly disclosed by the disclosing Party, either before
or after it is disclosed to the receiving Party hereunder; or
- 12 -
EXECUTION COPY
6.2.2 Was known to the receiving Party or any of its Affiliates,
without obligation to keep it confidential, prior to disclosure by the
disclosing Party; or
6.2.3 Is subsequently disclosed to the receiving Party or any of its
Affiliates by a Third Party lawfully in possession thereof and without
obligation to keep it confidential; or
6.2.4 Is published by a Third Party or otherwise becomes publicly
available or enters the public domain, either before or after it is
disclosed to the receiving Party; or
6.2.5 Has been independently developed by employees or contractors
of the receiving Party or any of its Affiliates without the aid,
application or use of Confidential Information.
6.3 AUTHORIZED DISCLOSURE. A Party may disclose the Confidential
Information belonging to another Party to the extent such disclosure is
reasonably necessary in the following instances: (i) prosecuting or defending
litigation; complying with applicable Law; and (ii) disclosure, in connection
with the performance of this Agreement, to Affiliates, potential collaborators,
partners, and licensees (including potential co-marketing and copromotion
contractors), research collaborators, potential investment bankers, investors,
lenders, employees, consultants, or agents, each of whom prior to disclosure
must be bound by similar obligations of confidentiality and non-use at least
equivalent in scope to those set forth in Section 6.1.
6.4 TERMS OF THIS AGREEMENT. The Parties acknowledge that the terms of
this Agreement shall be treated as Confidential Information of the Parties. Such
terms may be disclosed by a Party to individuals or entities covered by Section
6.3 above, each of whom prior to disclosure must be bound by similar obligations
of confidentiality and non-use at least equivalent in scope to those set forth
in Section 6.1. In addition, a copy of this Agreement may be filed by either
Party with the Securities and Exchange Commission in connection with any public
offering of such Party's securities or periodic reporting to the Securities and
Exchange Commission. In connection with any such filing, such Party shall
endeavor to obtain confidential treatment of economic and trade secret
information. In any event, the Parties agree to take all reasonable action to
avoid disclosure of Confidential Information except as permitted under Section
6.3.
7. INDEMNITY
7.1 XXX INDEMNITY. From and after the Closing Date, subject to Sections
7.1.1 and 7.2, XXX shall indemnify, hold harmless, and defend BMS and its
Affiliates and its and their officers, directors, employees, agents and
representatives from and against any and all damages, losses, liabilities, costs
(including without limitation reasonable legal expenses, costs of litigation,
and reasonable attorney's fees) or judgments, whether for money or equitable
relief, of any kind ("LOSSES") arising out of or relating to, directly or
indirectly, claims, threatened claims, suits or other proceedings ("CLAIMS")
arising out of or relating to, directly or indirectly, the research,
development, manufacture, use, sale or other disposition, promotion,
advertising,
- 13 -
EXECUTION COPY
marketing, offering for sale, importation, handling, storage, transfer, or
exportation of the Dovonex(R) Products by XXX and its Affiliates, licensees and
contractors or arising out of or relating to, directly or indirectly, use,
license, and practice of the Patents and Technical Information by XXX (or its
Affiliates and sublicensees) after the Closing Date, including without
limitation, Claims based in whole or in part on (i) product liability, bodily
injury, death or property damage alleged to have been caused by a Dovonex(R)
Product after the Closing Date, (ii) infringement of Third Party patent,
copyrights, trademarks, or other intellectual property rights by XXX and its
Affiliates, (sub)licensees and contractors after the Closing Date, (iii) the
failure of XXX and its Affiliates, (sub)licensees and contractors to comply with
applicable Laws related to the marketing, promotion, distribution and sale of
Dovonex(R) Products and/or to the manufacture, adulteration, misbranding, and
labeling of Dovonex(R) Products after the Closing Date, and/or (iv) failure of a
Dovonex(R) Product to be manufactured in accordance with applicable Regulatory
Approvals or applicable Law or with internal XXX specifications after the
Closing Date.
7.1.1 INDEMNIFICATION OBLIGATIONS UNDER XXX LICENSE AND SUPPLY
AGREEMENTS. Notwithstanding the assignment by BMS and assumption by Xxxxx
of the XXX License Agreement and XXX Supply Agreement on the Closing Date,
(A) BMS shall continue to indemnify XXX as provided in Section 2.7 hereof,
and (B) XXX shall continue to indemnify BMS (i) as provided in Sections
XVI(B) and XVI(C) of the XXX License Agreement with respect to Dovonex(R)
Product sold by BMS or its Affiliates prior to the Closing Date, (ii) as
provided in Section XVI(B) of the XXX Supply Agreement with respect to
Dovonex(R) Product sold by BMS or its Affiliates prior to the Closing Date
and, (iii) as provided in Section XVI(C) of the XXX Supply Agreement with
respect to Dovonex(R) Product sold by XXX to, or firm ordered by, BMS
prior to the Closing Date. Xxxxx shall be a third party beneficiary of the
obligations of XXX under Section XVI(C) of the XXX Supply Agreement with
respect to Dovonex(R) Product sold to BMS prior to the Closing Date that
represents inventory held or firm ordered by BMS that is sold to Xxxxx on
or after the Closing Date, and XXX hereby agrees that said Section XVI(C)
shall be deemed amended to insert the words "and Xxxxx" after each use of
the term "XXXXXXX-XXXXX SQUIBB" in said Section XVI(C).
7.2 INDEMNIFICATION PROCEDURES. BMS shall notify XXX in writing promptly
upon becoming aware of any Claim that may be a Claim. XXX shall have the right
to assume and control the defense of the Claim at its own expense using
attorneys that are reasonably acceptable to BMS. If the right to assume and have
sole control of the defense is exercised by XXX, BMS shall have the right to
participate in, but not control, such defense at its own expense and the
indemnity obligations of XXX shall not include any attorneys' fees and
litigation expenses incurred by BMS or its Affiliates after the assumption of
the defense by XXX. If XXX does not assume the defense of the Claim, BMS may
defend the Claim but shall have no obligation to do so. Neither BMS nor its
Affiliates will settle or compromise the Claim without the prior written consent
of XXX, and XXX will not settle or compromise the Claim in any manner without
the prior written consent of BMS where the settlement or compromise (i) would
have an adverse effect on BMS' rights under the XXX License Agreement, (ii)
would have an adverse effect on the scope or enforceability of the Patents or
Technical Information as they pertain to the
- 14 -
EXECUTION COPY
manufacture, use or sale of Licensed Products, (iii) would require that BMS or
any BMS indemnitee admit to any liability or wrongdoing, or (iv) would restrict
BMS' research and business activities in any way or require BMS to grant any
right or benefit or provide any compensation or damages to any Third Party. BMS
shall reasonably cooperate with XXX and will make available to XXX all pertinent
information Controlled by BMS.
8. TERM AND TERMINATION
8.1 TERM. This Agreement shall commence upon the Effective Date and,
unless sooner terminated in accordance with the terms hereof or by mutual
written consent of all parties hereto, shall continue until December 31, 2007
except as expressly stated in this Agreement.
8.2 TERMINATION BY BMS OR XXX. BMS or XXX shall have the right to
terminate this Agreement prior to December 31, 2007, at its sole discretion,
upon delivery of written notice to the other party, upon the occurrence of any
of the following:
8.2.1 the Option Agreement having been terminated pursuant to the
terms thereof; or
8.2.2 Xxxxx having given written notice to all parties hereto that
it irrevocably waives and relinquishes any and all rights to exercise the
Option.
8.3 NO OTHER TERMINATION. No party hereto may terminate this Agreement,
whether with or without cause, other than as set forth in Sections 8.1 and 8.2.
8.4 OBLIGATIONS ACCRUED PRIOR TO TERMINATION. A Party shall not be
relieved of any obligation that accrued prior to the effective date of the
termination of this Agreement.
8.5 SURVIVAL. The following provisions shall survive termination of this
Agreement under Sections 8.1 or 8.2: Articles 6, 7 and 9, and Sections 2.3, 2.5,
2.6, 2.7, 3.6, 3.7, 5.2, 5.3, 5.4, and 8.4, as well as any other provisions
which by their nature are intended to survive termination.
9. GENERAL
9.1 PROVISIONS CONTRARY TO LAW. In performing this Agreement, the Parties
shall comply with all applicable Laws. Wherever there is any conflict between
any provision of this Agreement and any applicable Law, the Law shall prevail,
but in such event the affected provision of this Agreement shall be limited or
eliminated only to the extent necessary, and the remainder of this Agreement
shall remain in full force and effect. In the event the terms of this Agreement
are materially altered as a result of the foregoing or in the event that an
unexpected incident renders performance of this Agreement physically or legally
impossible, the Parties shall renegotiate in good faith an appropriate amendment
to this Agreement to resolve any inequities.
9.2 NOTICES. Any notice required or permitted to be given by this
Agreement shall be
- 15 -
EXECUTION COPY
in writing and shall be delivered by hand or overnight courier with tracking
capabilities or mailed postage prepaid by first class, registered or certified
mail addressed as set forth below unless changed by notice so given:
If to XXX:
XXX Pharma A/S
Industriparken 55
DK-2750 Ballerup
DENMARK
Attention: The President and Chief Executive Officer
If to BMS:
Xxxxxxx-Xxxxx Squibb Pharmaceutical Group
Xxxxx 000 xx Xxxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Senior Vice President for Business Development
With separate copies to its (x) Vice President and Senior Counsel, Worldwide
Licensing and Business Development, at the same address and (y) Vice President
for Alliance Management, at the same address.
If to Xxxxx, to:
Xxxxx Holdings PLC
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: President and Chief Executive Officer
with a separate copy to its General Counsel at the same address
Any such notice shall be deemed delivered on the date received.
9.3 FORCE MAJEURE. No Party shall be liable for delay or failure in the
performance of any of its obligations hereunder if such delay or failure is due
to causes beyond its reasonable control, including, without limitation, acts of
God, fires, earthquakes, strikes and labor disputes, acts of war, civil unrest
or intervention of any Governmental or Regulatory Authority; provided, that the
affected Party promptly notifies the other Parties and further provided that the
affected Party shall use its commercially reasonable efforts to avoid or remove
such causes of non-performance and shall continue performance with the utmost
dispatch whenever such causes are removed. When such circumstances arise, the
Parties shall negotiate in good faith any modifications of the terms of this
Agreement that may be necessary or appropriate in order to arrive at an
equitable solution.
- 16 -
EXECUTION COPY
9.4 USE OF NAMES. BMS shall have no responsibility or liability for the
selection, registration and maintenance of all trademarks which XXX employs in
connection with its activities conducted pursuant to this Agreement, if any, and
XXX shall own and control such trademarks. Nothing in this Agreement shall be
construed as a grant to XXX or Xxxxx of rights, by license or otherwise, to the
use of any trademarks, service marks, logos owned by BMS or the name of BMS for
any purpose. No Party shall use the name or marks or logos of another Party for
any purpose without the prior written consent of such other Party.
9.5 ASSIGNMENT. No Party shall assign its rights or obligations under this
Agreement without the prior written consent of the other Parties, except that
this Agreement and the licenses and rights herein granted shall be binding upon,
and shall inure to the benefit of successors of the Parties hereto, or to any
assignee of all of the goodwill and entire business and assets of a Party hereto
relating to its pharmaceuticals business, and any other attempted assignment in
violation of the foregoing shall be null and void; provided, however, that each
Party may, without the other Parties' consent, assign all of its rights and
obligations hereunder, to an Affiliate of such Party, provided, that such
Affiliate or assignee or successor in interest agrees in writing to be bound by
the terms of this Agreement, and provided, further, that the assignor shall be
responsible for the performance of its Affiliate assignee(s) hereunder. Subject
to the foregoing, this Agreement shall inure to the benefit of and be binding on
the Parties' successors and assigns.
9.6 WAIVERS AND MODIFICATIONS. The failure of any Party to insist on the
performance of any obligation hereunder shall not be deemed to be a waiver of
such obligation. Waiver of any breach of any provision hereof shall not be
deemed to be a waiver of any other breach of such provision or any other
provision on such occasion or any succeeding occasion. No waiver, modification,
release or amendment of any obligation under or provision of this Agreement
shall be valid or effective unless in writing and signed by all Parties hereto.
9.7 CHOICE OF LAW AND JURISDICTION.
9.7.1 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE
OTHER THAN SECTIONS 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
9.7.2 CONSENT TO JURISDICTION. Each Party irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York,
New York County, and (b) the United States District Court for the Southern
District of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated
hereby or thereby. Each Party agrees to commence any such action, suit or
proceeding either in the United States District Court for the Southern
District of New York or if such suit, action or other proceeding may not
be brought in such court for jurisdictional reasons, in the Supreme Court
of the State of New York, New York County. Each Party further agrees that
service of any process, summons,
- 17 -
EXECUTION COPY
notice or document by registered mail to such Party's respective address
set forth above shall be effective service of process for any action, suit
or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction in this Section 9.7.2. Each Party irrevocably
and unconditionally waives any objection to the laying of venue of any
action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby and thereby in (i) the Supreme Court of
the State of New York, New York County or (ii) the United States District
Court for the Southern District of New York, and hereby and thereby
further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought
in any such court has been brought in an inconvenient forum.
9.7.3 WAIVER OF JURY TRIAL. Each Party hereto hereby waives to the
fullest extent permitted by applicable Law, any right it may have to a
trial by jury in respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement.
9.7.4 ATTORNEY FEES. A Party in breach of this Agreement shall
indemnify and hold harmless the other Parties for and against all
reasonable out-of-pocket expenses, including legal fees, incurred by such
other Party by reason of the enforcement and protection of its rights
under this Agreement. The payment of such expenses is in addition to any
other relief to which such other Party may be entitled.
9.8 PUBLICITY. Except as required by Law, including, without limitation,
that of the U.S Securities and Exchange Commission, the National Association of
Securities Dealers, the U.K. Listing Authority or any national stock exchange,
and except as expressly provided herein, no Party shall make any public
announcement concerning this Agreement without the prior written consent of the
other Parties (not to be unreasonably withheld). In the event of a public
disclosure required by Law, including without limitation, any required
disclosure in any securities offering document, the Party making such
announcement shall at least five business days prior to such disclosure provide
the other Parties with a copy of the proposed text of the disclosure, and any
such other Party shall be entitled to have its reasonable comments incorporated
prior to such announcement, provided that provision of proposed text and
incorporation of comments referenced above is consistent with the disclosing
Party's legal or regulatory obligations.
9.9 ENTIRE AGREEMENT. This Agreement, the XXX License Agreement, the XXX
Supply Agreement (where herein referenced), the Copromotion Agreement, the
Option Agreement and the Asset Purchase Agreement, together constitute the
entire agreement between the Parties as to the subject matter of this Agreement,
and supersede all prior negotiations, representations, agreements and
understandings regarding the same. This Agreement shall not be strictly
construed against either Party hereto.
9.10 COUNTERPARTS. This Agreement may be executed in counterparts with the
same effect as if the Parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and shall
constitute one and the same instrument.
- 18 -
EXECUTION COPY
9.11 RELATIONSHIP OF THE PARTIES. Each Party is an independent contractor
under this Agreement. Nothing contained herein is intended or is to be construed
so as to constitute BMS, Xxxxx and XXX as partners, agents or joint venturers.
No Party shall have any express or implied right or authority to assume or
create any obligations on behalf of or in the name of the other Parties or to
bind the other Parties to any contract, agreement or undertaking with any Third
Party.
9.12 HEADINGS. Headings and captions are for convenience only and are not
to be used in the interpretation of this Agreement.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
- 19 -
EXECUTION COPY
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date set forth above.
XXX PHARMA A/S XXXXXXX-XXXXX SQUIBB COMPANY
By: By:
----------------------------- ---------------------------
Name: Name:
--------------------------- -------------------------
Title: Title:
-------------------------- ------------------------
XXXXX (CHEMICALS) LIMITED
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
- 20 -
EXECUTION COPY
APPENDIX A
ROYALTY RATE ON CHANGE OF CONTROL OPTION EXERCISE
(Excerpted from Option Agreement)
The royalty rate for purposes of Section 3.1 of this Agreement upon a
Change of Control shall depend on the actual Closing Date and shall be
determined as follows:
(a) if any Closing pursuant to such Change in Control occurs prior
to January 1, 2004, the royalty rate shall be 20%;
(b) if any Closing pursuant to such Change in Control occurs on or
after January 1, 2004 and prior to January 1, 2005, the royalty rate
shall be:
20% - (10% x M/12)
where M equals the number of full calendar months that have elapsed
since January 1, 2004 until the Closing Date. For example, if the
Closing occurs on April 1, 2004, the royalty rate would be 17.5%.
(c) if any Closing pursuant to such Change in Control occurs on or
after January 1, 2005 and on or prior to December 31, 2005, then the
royalty rate shall be:
10% - (5% x M/12)
where M equals the number of full calendar months that have elapsed
since January 1, 2005 until the Closing Date. For example, if the
Closing occurs on April 1, 2005, the royalty rate would be 8.75%).
(d) if any Closing pursuant to such Change in Control occurs on or
after January 1, 2006 and on or prior to December 31, 2007, then the
royalty rate shall be 5%.
For purposes of this Appendix, the term "CHANGE IN CONTROL" means any sale
of voting securities or sale of assets (whether by sale, merger, consolidation,
share exchange, or otherwise) which, directly or indirectly, (i) transfers over
50% of the assets of BMS to any Person (defined as an individual, corporation,
partnership, limited liability company, trust, business trust, association,
joint stock company, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization, Governmental or Regulatory Authority, or any other
form of legal entity not specifically listed herein) other than an Affiliate of
BMS, or (ii) results in any Person and/or any of its Affiliates (other than an
Affiliate of BMS) becoming the beneficial owner, directly or indirectly, of
fifty percent (50%) or more of those securities of BMS entitled to vote for the
election of directors of BMS.
- 21 -
AGREEMENT
between
XXX PHARMACEUTICAL PRODUCTS LTD. A/S
(LOVENS KEMISKE FABRIK PRODUKTIONSAKTIESELSKAB)
and
X.X. XXXXXX & SONS INC.
CONTENTS
Page
----
Art. I DEFINITIONS 2
Art. II RIGHTS 4
Art. III PAYMENTS 4
Art. IV SUPPLY OF LICENSED PRODUCTS 7
Art. V MINIMUMS 9
Art. VI WORK BY SQUIBB AND XXX 11
Art. VII ADVERTISING AND PROMOTIONAL MATERIALS 14
Art. VIII ACCOUNTING AND ROYALTY PAYMENT 14
Art. IX PATENT PROTECTION AND VALIDITY 16
Art. X THIRD PARTIES PATENT CLAIMS 17
Art. XI CONFIDENTIALITY 19
Art. XII HEALTH REGISTRATION 20
Art. XIII DURATION OF LICENSE 21
Art. XIV DEVELOPMENTS 23
Art. XV TRADE XXXX 24
Art. XVI RESPONSIBILITIES OF PARTIES 25
Art. XVII ASSIGNABILITY 27
Art. XVIII AMENDMENT OF AGREEMENT 28
Art. XIX STATUS OF PRIOR AGREEMENTS 28
Art. XX FORCE MAJEURE 28
Art. XXI GOVERNING LAW 28
Art. XXII NOTICES 29
Appendix 1 PATENTS
Appendix 2 COMPOUND
Appendix 3 SUPPLY
Appendix 4 DEVELOPMENT PLAN
AGREEMENT
---------
between
XXX PHARMACEUTICAL PRODUCTS LTD. A/S (LOVENS KEMISKE FABRIK
PRODUKTIONSAKTIESELSKAB), Xxxxxxxxxxxxxx 0, XX-0000 Xxxxxxxx, Xxxxxxx
(hereinafter referred to as "XXX")
and
X.X. XXXXXX & SONS INC., Xxxxxxxxx, Xxx Xxxxxx 00000-0000, Xxxxxx Xxxxxx of
America (hereinafter referred to as "SQUIBB").
---------
WHEREAS, XXX and its Affiliates have made developments in the field of certain
vitamin D analogues and own or control patent applications pertaining thereto;
and
WHEREAS, SQUIBB has development and marketing expertise within the
dermatological field; and
WHEREAS, SQUIBB and XXX are interested in collaborating in development and
marketing of MC 903 in the United States of America;
NOW THEREFORE, the parties hereby agree as follows:
I - DEFINITIONS
A. "Patents" shall mean the patent application owned and controlled by XXX and
listed in Appendix 1 hereto, together with any divisions, continuations,
and continuations-in-part, thereof and all patents issuing thereon,
including reissues, patents of addition and any registration or
confirmation patents which, in the absence of a license, would be infringed
by the manufacture, use or sale of Licensed Product(s) as defined below.
B. "Compound" shall mean the vitamin D analogue MC 903 of the structure shown
in Appendix 2.
C. "Licensed Product(s)" shall mean pharmaceutical compositions and dosage
units containing Compound which can be used within the dermatological
field.
D. "Cost Price" shall mean the following items:
Variable costs (including labour, raw material etc.);
Capacity costs (including overhead for production, wages, etc.);
Indirect costs amounting to forty-five percent (45%) of the sum of the
other two items. (It shall expressly be understood that indirect costs do
not include expenses in connection with LEO's research or marketing).
E. "Net Sales" of Licensed Product(s) shall mean the ad-
justed gross invoice price less five percent (5%) of said adjusted gross
invoice price, the adjusted gross invoice price being the gross invoice
price billed less credits or allowances, if any, actually granted on
account of price adjustments, rejection or return of Licensed Product(s)
previously sold, and less duties and taxes, other than income taxes, paid
in connection with the sale of the Licensed Product(s).
F. "Affiliate" shall mean, with respect to a given company, any company which
owns or controls at least fifty-one per cent (51%) of the voting stock of
such given company, or any other company at least fifty-one per cent (51%)
of whose voting stock is owned by or controlled by such owning or
controlling company or by the given company.
G. "Technical Information" shall mean all information in the possession of XXX
regarding preclinical, chemical-pharmaceutical and clinical data or other
scientific information, or secret know-how about Compound and Licensed
Product(s), or uses for the Licensed Product(s) as well as all information
and secret know-how in the possession of XXX regarding the manufacture or
packaging of Licensed Product(s).
H. "Territory" shall mean the United States of America, its territories and
possessions.
II - RIGHTS
XXX hereby grants SQUIBB, and SQUIBB accepts from XXX, subject to the terms,
conditions and provisions of this Agreement, the following:
An exclusive, non-transferable license, with the right to sublicense
SQUIBB's Affiliates, under Patents and Technical Information owned by, or
licensed to, XXX for the use and sale of Licensed Product(s) in the
Territory.
XXX retains the right to co-promote or co-market the Licensed Product(s) in the
Territory through a company in which XXX owns at least fifty-one percent (51%)
of the voting stock, provided, however, that such right shall not be exercisable
by XXX until five years from the date of the first marketing approval is
obtained by SQUIBB for the marketing of a Licensed Product from the FDA (Food
and Drug Administration).
If XXX wants to exercise this right, XXX shall inform SQUIBB six (6) months in
advance of its intentions. Thereafter the parties shall discuss the most
suitable way to accomplish this co-promotion, or co-marketing with due
consideration to the interests of both parties.
III - PAYMENTS
A. Within 30 (thirty) days from the full execution date of this Agreement,
SQUIBB shall pay to XXX in Ballerup a down payment of $1,000,000 (one
million United States Dollars). Not later than 30 (thirty) days after
SQUIBB's
submission of a New Drug Application (NDA) to the FDA covering the treatment of
psoriasis with a Licensed Product in the form of an ointment, a second
installment of $1,000,000 (one million United States Dollars) shall be paid to
XXX. Not later than 30 (thirty) days after SQUIBB's submission of an NDA to the
FDA covering the treatment of psoriasis with a Licensed Product in the form of
a cream, a third installment of $500,000 (five hundred thousand United States
Dollars) shall be paid to XXX. Not later than 30 (thirty) days after having
obtained final FDA approval for the marketing of a Licensed Product in the
form of an ointment, a fourth installment of $1,000,000 (one million United
States Dollars) shall be paid to XXX. Not later than 30 (thirty) days after
having obtained final FDA approval for the marketing of a Licensed Product in
the form of a cream, a fifth installment of $500,000 (five hundred thousand
United States Dollars) shall be paid to XXX. Not later than 30 (thirty) days
after SQUIBB's submission of an NDA to the FDA seeking an indication for
continued use of a Licensed Product following the apparent resolution of
psoriatic lesion(s) (long-term treatment) a sixth installment of $500,000
(five hundred thousand United States Dollars) shall be paid to XXX. However,
payment of this sixth installment shall not be later than June 30, 1994. 30
(thirty) days after having obtained final
FDA approval for the marketing of a Licensed Product having a claim for
long-term treatment, but not later than December 31, 1995, a seventh
installment of $500,000 (five hundred thousand United States Dollars) shall
be paid to XXX.
It is to be understood that no part of the down payments paid to XXX
hereunder shall be refunded to SQUIB for any reason whatsoever.
X. XXXXXX shall pay to XXX a royalty calculates on the Net Sales of Licensed
Product(s) sold by SQUIBB or its Affiliates in the Territory in
consideration of the patent licenses and licensing rights granted by XXX to
SQUIBB in Article II, and of the Technical Information furnished to SQUIBB
by XXX. The royalty rate will be: 6% (six percent) on annual Net Sales up
to $5,000,000 (five million United States Dollars); 8% (eight percent) on
annual Net Sales in excess of $5,000,000 (five million United States
Dollars) up to $15,000,000 (fifteen million United States Dollars); and 10%
(ten percent) on annual Net Sales in excess of $15,000,000 (fifteen million
United States Dollars); but if no valid Patent exists, SQUIBB shall
continue to pay royalties at 50% (fifty percent) of the foregoing rates but
for no longer than 15 (fifteen) years from the date of SQUIBB's first
commercial sale of a Licensed Product in the Territory.
IV - SUPPLY OF LICENSED PRODUCTS
A. In order to ensure the quality of the Licensed Product(s) to be sold by
SQUIBB, SQUIBB shall purchase from XXX, and XXX shall supply to SQUIBB,
according to supply conditions as laid down in Appendix 3 to this
Agreement, either from XXX or from such other sources as XXX shall
authorize by prior notice in writing to SQUIBB, SQUIBB's total requirements
of the Licensed Products(s) for use and sale for the period of 15 (fifteen)
years from first marketing on the following conditions and terms.
B. The bulk price from LEO shall be 23% (twenty-three percent) of SQUIBB's Net
Sales price for Licensed Products(s) calculated on the basis of the
weighted average of SQUIBB's ex-factory prices for all specialty forms
which shall appear from the royalty statements. However if such average
price exceeds $15 per 30 gram tube the bulk supply price for purposes of
this Section IV B shall remain at $15. This $15 price, based on 1989
prices, will be adjusted for inflation once a year on the basis of the
official Consumer Price Index of the US Department of Labor. The bulk price
shall not be less than LEO's Cost Price no matter whether the Cost Price
exceeds the above 23% of SQUIBB's ex-factory price. LEO guarantees,
however, that as long as the weighted average of SQUIBB's ex-factory prices
for all specialty forms exceeds $120 per kilogram of Licenses Product(s)
containing
50 micrograms per gram of MC 903, the bulk price from LEO will be 23% of
said ex-factory prices. The figure $120/kg of Licensed Product(s) is based
on 1989 prices and will be adjusted for inflation once a year on the basis
of the official Danish Consumer Price Index.
Since the accurate value of SQUIBB's Net Sales price for Licensed
Product(s) will not be known at the time of purchase of Licensed Product(s)
and the precise price therefore cannot be determined, SQUIBB shall be
invoiced on the basis of estimated net receipt from sales, and the invoiced
amount will then be adjusted when the actual sales figures are available.
C. LEO agrees that the filling and packaging of Licensed Product(s) to be used
in the Territory shall be performed by LEO at $0.35/30 gram tube based on
1989 prices and the price will be adjusted for inflation once a year on the
basis of the official Danish Consumer Price Index.
D. Should LEO for any reason be unable to supply Licensed Product(s) for more
than 45 (forty-five) days in accordance with Appendix 3 hereto, then SQUIBB
shall be entitled to purchase the Compound from LEO and to formulate
Licensed Product(s), for as long as this situation exists, at a reduced
price reflecting the cost of formulation.
If, and for as long as LEO should for any reason be unable to supply the
Compound, SQUIBB shall be entitled to manufacture, or have manufactured,
the Compound and to formulate Licensed Product(s) under the royalty
payable under the Article III A. In such cases LEO will provide SQUIBB
with the know-how and assistance required by SQUIBB for formulation and/or
manufacture, as the case may be.
E. For purposes of sampling, LEO will supply SQUIBB with Licensed Product(s)
in amounts to be agreed upon. LEO will supply samples in 3 gram tubes at
Cost price, however not more than $0.4/tube. This maximum price is based
on 1989 prices and will be adjusted for inflation once a year on the basis
of the official Danish Consumer Price Index.
In case SQUIBB can document that they can produce or have produced said
samples at a significantly lower price than $0.4/tube then LEO agrees to
supply bulk Licensed Product(s) at a price of $25/kg. This price is based
on 1989 prices and will be adjusted for inflation once a year on the basis
of the official Danish Consumer Price Index.
V - MINIMUMS
A. For the third full calendar year of marketing of a Licensed Product by
SQUIBB in the Territory a minimum
payment of $2,500,000 (two and a half million United States Dollars) will
be paid by SQUIBB to LEO for the period from January 1 to December 31 of
the third full calendar year of marketing of a Licensed Product in the
Territory of SQUIBB. For the fourth full calendar year of marketing of a
Licensed Product of SQUIBB in the Territory a minimum payment of $3,000,000
(three million United States Dollars) will be paid by SQUIBB to LEO for the
period from January 1 to December 31 of said fourth full calendar year of
marketing of a Licensed Product by SQUIBB in the Territory and for each
subsequent calendar year as long as SQUIBB is the only company selling
Licensed Product(s) in the Territory a minimum payment of $3,500,000 (three
and one half million United States Dollars) will be paid by SQUIBB to LEO
for each twelve month period from January 1, to December 31, during which
this Agreement is in effect.
B. Payments, for the purposes of this Article V, shall consist of the royalty
computed under Article III B for each full calendar year and the value of
bulk material ordered by SQUIBB before October 1 plus the amount, if any,
needed to reach the minimum for each respective full calendar year. Actual
remittance of fund with respect to the amounts due for any calendar year
shall occur within ninety (90) days of the end of such year.
SQUIBB may elect to cease making the minimum payments due under Article V A
upon two (2) years prior written notice to LEO. This two (2) year notice
may not be given by SQUIBB to LEO until the end of the third full year of
marketing of the Licensed Product(s) by SQUIBB. Upon receiving this notice
LEO shall have the right to license another party either on an exclusive or
non-exclusive basis to market the Licensed Product(s) in the Territory.
SQUIBB will cooperate fully with any additional licensee in assisting them
in obtaining an approved NDA for the marketing of Licensed Product(s). In
order to enable SQUIBB to render this assistance, LEO, upon receiving the
above notice shall notify SQUIBB within six (6) months of its future plans
for marketing the Licensed Product(s) in the Territory.
C. If the Licensed Product(s) become(s) approved in the Territory for any
major dermatological indication other than psoriasis, or if serious
limitations in the use of Licensed Product(s) for psoriasis become
apparent, then the size of the minimum payment shall be adjusted.
VI - WORK BY SQUIBB AND LEO
A. Promptly after the effective date of this Agreement LEO shall furnish
SQUIBB with all Technical Information presently in LEO's possession which
it is free to dis-
close. Unless acquired from others on terms which prohibit such disclosure,
LEO shall keep SQUIBB informed during the term of this Agreement of all
technical data, development and improvements within LEO's Technical
Information.
B. As soon as possible LEO will provide SQUIBB with a copy of its complete EEC
registration dossier for MC 903 ointment. As SQUIBB intends to introduce
the ointment and cream formulations at the same time, LEO will use all
reasonable efforts to complete its development of an MC 903 cream and to
make available to SQUIBB all the necessary Technical Information for an IND
submission.
C. SQUIBB will perform and pay for such preclinical and clinical studies for
obtaining FDA approval of Licensed Product(s) which may be necessary in
addition to the dossier mentioned under VI B.
Should carcinogenicity studies be necessary for FDA approval, then LEO
agrees to pay 50% (fifty percent) of the documented expenses to such
studies provided that LEO and/or LEO's other licensees make use thereof for
registration purposes.
If SQUIBB and LEO decide to collaborate on the development of documentation
supporting long-term treatment with MC 903, and if the health authorities
in order to approve this indication will require carcinogenicity studies.
then LEO will share the documented cost of these with 50% (fifty
percent).
D. The development of Licensed Product(s) will take place according to a
development plan agreed upon by the parties and being part of this
Agreement as Appendix 4. It is understood by both parties that this
development plan is subject to any changes required by the FDA for the
development of the Licensed Product(s).
E. In order to enable SQUIBB to conduct such development work, LEO will
provide SQUIBB free of charge with reasonable quantities of Compound
and Licensed Product(s).
F. Until NDA approval has been obtained SQUIBB will regularly and at
least every three (3) months report to LEO the progress of the
development work.
G. LEO is entitled to participate in all important meetings with the FDA
provided that such participation does not result in any significant
delay.
H. SQUIBB will devote significant dermatological sales force time to the
promotion of the Licensed Product(s) during the first two years of
marketing. Sales force time during this period will be equivalent to
the full time support of at least thirty-five (35) sales
representatives.
VII - ADVERTISING AND PROMOTIONAL MATERIALS
SQUIBB shall bear all of the cost and expense of advertising and promoting the
Licensed Product(s) in the Territory. LEO and SQUIBB will discuss any relevant
issues regarding the promotion of the Licensed Product(s) in the Territory.
SQUIBB's advertising and promotional materials shall be in accordance with the
claims approved by the FDA.
VIII - ACCOUNTING AND ROYALTY PAYMENT
A. SQUIBB shall render to LEO within ninety (90) days after the end of each
calendar half year, a detailed accounting for such period both as to
quantities and amount of its sales as subject to royalty payments due for
such period.
B. SQUIBB agrees to keep accurate records in sufficient detail to enable the
royalties payable hereunder to be determined, and upon LEO's request,
shall permit an independent, certified public accountant selected by LEO
(except one to whom SQUIBB has some reasonable objection) to have access
during ordinary business hours to SQUIBB's records (a) to determine the
correctness of any half year report and/or payments made under this
Agreement or (b) to obtain information as to the royalty payable for any
such period in case of SQUIBB's failure to report or pay pursuant to this
Agreement. This right of review shall
terminate three (3) years after LEO's receipt of SQUIBB's half year
account. Said accountant shall not disclose to LEO any information other
than information relating to the accuracy of the reports and payments made
under this Agreement and in no event the quantities and prices to
individual customers are to be disclosed to LEO.
C. Royalties shall be computed upon Net Sales of Licensed Product(s) within
the Territory and shall be remitted in United States Dollars via bank
transfer to LEO's bank account: reg. no. 4000 1015966 in Copenhagen
Handelsbank, Holmes Kanal 2, KD-1060, CPH-K.
D. If laws or regulations require withholding of taxes imposed upon LEO on
account of royalties accruing under this Agreement, such taxes will
deducted by SQUIBB from such remittable royalty and will be paid by SQUIBB
to the proper taxing authority. Proof of payment shall be secured and sent
to LEO as evidence of such payment.
E. No royalty shall be payable to LEO hereunder in respect of the sale,
transfer or disposal among SQUIBB and its Affiliates of the Licensed
Product(s). In such case, the royalty shall become due on the sales by
SQUIBB or its Affiliates to any third parties other than its Affiliates.
F. In no cases shall the sums received by LEO as royalties
for sale of Licensed Product(s) be returned to SQUIBB unless found to be
in error.
IX - PATENT PROTECTION AND VALIDITY
A. LEO agrees to prosecute and maintain the Patents within the Territory.
B. LEO agrees within reasonable limits to protect from infringement of the
Patents and SQUIBB shall notify LEO of any such infringement. When a third
party, in SQUIBB's opinion, infringes the Patents and the infringement
constitutes a substantial unlicensed competition, SQUIBB shall provide LEO
with any available evidence of the infringement. LEO shall use all
reasonable measures, whether by action, suit, proceeding or otherwise to
prevent such infringement. All costs and expenses of such action, suit or
other proceeding unless collected from the third party against whom the
same is brought, shall be borne by LEO. SQUIBB shall, at LEO's request,
cooperate with LEO in all respects including, but not limited to, making
available to LEO or its legal representative, all relevant papers, records,
information, samples, specimen, and the like. SQUIBB shall use its
influence to make any of its employees testify when requested by LEO. Any
recovery obtained by LEO as the result of such proceeding, by settlement or
otherwise, shall after deduc-
tion of cost and expenses involved in such a proceeding be shared by SQUIBB
and LEO in the ratio of two (2) to SQUIBB and one(1) to LEO.
C. If LEO refuses to institute an infringement suit that SQUIBB feels is
reasonably required, SQUIBB shall have the right to institute such suit at
its own expense in the name of LEO or SQUIBB or both. In such event, LEO
shall cooperate fully with SQUIBB, at SQUIBB's expense. Any recovery
obtained by SQUIBB as the result of such proceeding, by settlement or
otherwise, shall be the property of SQUIBB. Should SQUIBB as the result of
any such infringement action be forced to grant, or with LEO's acceptance
grant, a sublicense to the infringing party, SQUIBB shall pay to LEO the
royalties actually received from such sublicensees, or the amount called
for in Article III B hereunder, whichever is less. LEO shall use its
influence to make any of its employees testify when requested by SQUIBB.
X - THIRD PARTIES PATENT CLAIMS
-------------------------------
A. If a suit is filed by any third party against SQUIBB as defendant alleging
that SQUIBB's operation under the licensed Patents and/or the Technical
Information constitutes an infringement of the patent rights of the said
third party, LEO, upon SQUIBB's request, shall use
-18-
its best efforts to make available to SQUIBB any relevant records, papers,
expert information, samples, formulae and the like, and shall cooperate in
such defense with SQUIBB as may be reasonably requested by it.
In case of such litigation or threat thereof, SQUIBB shall notify LEO
promptly. Should SQUIBB decide not to take up the defense, LEO may at its
entire discretion take up the defense itself, but is under no obligation to
do so. If and when LEO takes up a defense SQUIBB shall, upon LEO's request,
assist LEO to the best of its ability with legal and technical advice and
assistance, evidence, and documentation. Notwithstanding the above, SQUIBB
reserves the right to settle any suit brought by a third party against
SQUIBB without having LEO defending said suit. 50% (fifty percent) of the
royalty payments necessitated by this settlement may be deducted from
SQUIBB's obligation under Article III B, provided that this deduction does
not reduce the royalty payments in Article III B by more than 50%. However
SQUIBB shall consult with LEO in case such settlement may involve other
payments.
C. This Agreement is deemed to continue in full force, including SQUIBB's
obligation to pay full royalty during a pending patent litigation
instituted by third party due to SQUIBB's working under LEO's licensed
Patent right
and/or Technical Information granted hereunder. However, for as long as a
litigation is pending SQUIBB shall escrow the royalty due in a bank acceptable
to LEO. If SQUIBB is ultimately held liable to any third party who brings suit,
then SQUIBB can deduct any payments made to said third party in the form of
damages or royalty payments from the above escrow account and then from its
obligation under Article III B.
XI - CONFIDENTIALITY
A. Any technical Information conveyed by LEO to SQUIBB under this Agreement
shall be considered confidential regardless of designation, and shall, to
the extent not published or otherwise properly in the public domain, or not
furnished to SQUIBB on a non-confidential basis by a third party having the
lawful right to do so, not be disclosed by SQUIBB except to duly authorized
governmental agencies where necessary in order to obtain approval to market
Licensed Product(s).
B. SQUIBB may have its officers, employees and outside investigators
acquainted with the said Technical Information within the limit of
necessity for use of Licensed Product(s) imposing upon them the same
secrecy obligations as SQUIBB owes hereunder.
- 20 -
XII - HEALTH REGISTRATION
-------------------------
A. With the aim of obtaining the fastest possible FDA approval the regulatory
affairs department of SQUIBB and LEO shall collaborate on filing of an NDA.
SQUIBB shall bear all regulatory expenses related to SQUIBB's submissions
of an NDA with the FDA.
B. By termination of this Agreement prior to the contractual period as
provided for in Article XIII A, or if LEO exercises its right under Article
XII, SQUIBB shall permit LEO or a designee of LEO to have access to
SQUIBB's submission to the FDA and cooperate fully in assisting LEO in
obtaining an NDA approval. LEO or its designee shall have the right to use,
free of charge, any of the material found in SQUIBB's submission to the FDA
in any manner LEO deems appropriate. SQUIBB agrees to provide LEO within
reasonable limits with available additional information about Licensed
Product(s) which LEO or its designee reasonably needs for taking over the
FDA submission. In case a marketing license has been granted by the FDA,
such license shall be transferred to LEO free of charge.
The provisions above shall, however, not be applicable to LEO in the event
the termination is caused by defaults or breaches by LEO of any of the
provisions of this Agreement, and such defaults or breaches having been
claimed by SQUIBB with reference to Articles XIII C and XIII D.
XIII - DURATION OF LICENSE
A. This Agreement shall become effective on the date of execution hereof by
the parties hereto and shall continue in full force and effect as provided
herein unless modified or terminated in accordance with any of the
provisions hereof, until the expiration of the last to expire Patent under
this Agreement or until the end of a fifteen (15) years period commencing
on the date of SQUIBB's first commercial sale of a Licensed Product in the
Territory, whichever period is longer, but full royalty shall be paid as
provided for under Article III only during the life of the Patents.
B. In the event that SQUIBB has not obtained FDA approval of a Licensed
Product on or before five (5) years after the effective date of this
Agreement, and if SQUIBB cannon give LEO reasonable evidence that it has
been diligent in seeking such approval or upon SQUIBB's voluntary
discontinuance of marketing of Licensed Product(s) for a period of more
than twelve (12) consecutive months, LEO shall have the right upon sixty
(60) days' notice to SQUIBB to change the license granted under this
Agreement to a non-exclusive license.
C. In the event that SQUIBB and LEO agree that further development and
commercialization of Licensed Product(s) no longer are sound due to
therapeutic or economic reasons,
-11-
then either party can with six (6) months prior notice terminate this
Agreement. In the event the parties cannot agree then SQUIBB can with
another six (6) months notice terminate this Agreement. In case of
termination SQUIBB will fully cooperate with LEO in finalizing ongoing
studies, but SQUIBB shall not be obligated to make any further payments to
LEO that are or become due pursuant to Articles III, IV and V on or after
the effective date of the termination.
D. In the event that one of the parties hereto materially defaults or breaches
any of the provisions of this Agreement, the other party shall have the
right to cancel the license herein granted upon sixty (60) days' written
notice, provided, however, that if the party in default within the sixty
days' period referred to, remedies the said default or breach, the license
herein granted shall continue in full force and effect.
E. This Agreement shall automatically terminate if the license and right
herein granted shall terminate pursuant to Article XIII A.
F. In the event of termination of this Agreement under the provisions of
Article XIII A, XIII C or XIII D hereof, SQUIBB shall not be relieved of
the duty and obligation to pay in full, royalties accrued and unpaid at the
ef-
- 23 -
fective date of such termination. In such event, the confidentiality
obligations of Articles XI A, XI B and XIV A shall continue.
XIV - DEVELOPMENTS
A. SQUIBB agrees to place at the disposal of LEO all developments and
experience initiated or acquired by SQUIBB with respect to the manufacture
and use of Licensed Product(s) and grants to LEO and its Affiliates the
right to use such developments and experience, free of charge, in the
manufacture or use of Licensed Product(s), as far as SQUIBB is free to do
so. SQUIBB also grants to LEO and its Affiliates a non-exclusive,
royalty-free license under patents relating to such inventions made by
SQUIBB during the term of this Agreement that cover Compound and Licensed
Product(s), their use, their production and/or intermediates used in their
production. The confidentiality and secrecy provisions of Articles XI A and
XI B shall be applied by LEO to information conveyed to LEO under this
Article XIV. SQUIBB will consider the terms under which such developments
and improvements might be offered to LEO's other licensees.
B. Similarly LEO will without additional payment put at SQUIBB's disposal all
developments and improvements with respect to Licensed Product(s) in the
Territory to the
extent that they are initiated by LEO. Developments and improvements
generated by LEO's other licensees will be offered to SQUIBB on terms to be
negotiated if LEO is free to do so.
C. The right granted under Article XIV A to make use of SQUIBB's developments
and experience, and the non-exclusive royalty-free license under patents
covering such developments, shall not terminate with the termination of
this Agreement, and on expiry or termination of this Agreement SQUIBB shall
at LEO's request and free of charge make available to LEO all such
experience and information then in its possession to the extent they have
not reached LEO on the day of termination in the form of written
descriptions including detailed reports. The provision above, shall,
however, not be applicable to LEO in the event that the termination is
caused by defaults or breaches by LEO of any of the provisions of this
Agreement, and such defaults or breaches have been claimed by SQUIBB with
reference to Article XIII D.
XV - TRADE MARK
A. SQUIBB shall be entitled to sell Licensed Product(s) under SQUIBB's own
trade mark(s), it being understood that LEO shall be informed of the trade
mark(s) to be used by SQUIBB.
B. All packaging material shall indicate Licensed Products from Leo
Pharmaceutical Products Ltd., including, whenever practical, the LEO logo
and the Assyrian Lion. The packaging and promotional material shall be sent
to LEO for its review and comment but final approval will be solely the
responsibility of SQUIBB.
C. Upon expiration of this Agreement under Article XIII A, SQUIBB shall have a
fully paid up license to market the Licensed Product(s) in the Territory
without any further obligation or payment.
XVI - RESPONSIBILITIES OF PARTIES
A. Both LEO and SQUIBB shall observe all applicable laws and regulations in
effect in fulfilling their obligations under this Agreement.
B. Both LEO and SQUIBB shall be responsible for their respective commissions
and omissions under this Agreement and shall indemnify each other
accordingly against all costs and expenses related to third party claims.
The development risks (relating to risks inherent in the development of the
Compound and/or Licensed Product(s)) shall be borne by LEO to the extent
that LEO is held legally liable for such development risks.
-26-
C. In any cash under the preceding paragraph (B), where SQUIBB or LEO is to
indemnify the other, the control of the defense of any action for/or on any
such expense, claim, demand or cause of action and of negotiations for
settlement and compromise thereof, shall repose with the party who
according to (B) above seems to be the responsible party, except that
nothing in this paragraph shall be construed to relieve either party hereto
of the obligation to give the other all reasonable cooperation, assistance
and authority necessary to permit full and complete defense of any action;
provided, however, that no party will settle any of such claims without
consent of the other party; however, such consent shall not be unreasonably
withheld. Both parties shall, if desired, be allowed to participate, at
their own expense, directly or through a representative e.g. their product
liability insurers, in any action.
D. SQUIBB and LEO shall each promptly inform the other of any information
pertaining to potential risks of Compound and/or Licensed Product(s),
especially any severe adverse reactions, side effects and drug
interactions. In the event LEO shall, because of severe adverse reactions,
side effects or drug interactions, deem it necessary to terminate the sale
of any or all Licensed Products by LEO in the Territory, LEO shall notify
SQUIBB prior to taking
-27-
any such action and both parties shall try to mutually agree on the
necessary steps to be taken. In the event the parties do not arrive at such
mutual agreement then both LEO and SQUIBB shall be entitled to terminate
the sales of any or all Licensed Products to the extent which they deem
necessary. If SQUIBB continues to sell the Licensed Product(s) after LEO
has terminated the sale of Licensed Product(s) after LEO has terminated the
sale of Licensed Product(s) in the Territory due to the events described in
this Article XVI D, then SQUIBB shall have full and sole liability and bear
all indemnification under Article XVI B and XVI C.
E. Any supply agreement which LEO and SQUIBB may enter into shall incorporate
by reference or be deemed to have incorporated by reference all the terms
and conditions of this Article XVI.
XVII - ASSIGNABILITY
This Agreement and the licenses and rights herein granted shall be binding
upon, and shall inure to the benefit of successors of the parties hereto, or to
any assignee of all of the good will and entire business and assets of a party
hereto relating to pharmaceuticals, but shall not otherwise be assignable
without the prior written consent of the other party.
- 28 -
XVIII - AMENDMENT OF AGREEMENT
In the event that an unexpected incident renders performance of this Agreement
physically or legally impossible, including incompatibility with U.S. laws, both
parties agree to negotiate an appropriate amendment to the Agreement. The
Agreement shall not be changed or modified orally.
XIX - STATUS OF PRIOR AGREEMENTS
This Agreement constitutes the entire Agreement between the parties hereto with
respect to the within subject matter and supersedes all previous agreements,
whether written or oral.
XX - FORCE MAJEURE
Neither party shall be responsible for a failure or delay in performance of any
of its obligations hereunder due to force majeure such as war, insurrection,
strikes, lock-outs, acts of God, governmental action or any other contingency
beyond its control.
XXI - GOVERNING LAW
This Agreement shall be governed by the laws of the party being sued, in all
respects of validity, construction and
- 29 -
performance thereof. In the event SQUIBB is the party being sued, this shall
mean the laws of the State of New Jersey, United States of America, and the
appropriate forum for such suit shall be in the State of New Jersey. In the
event LEO is the party being sued, this shall mean the laws of the Kingdom of
Denmark and the appropriate forum shall be the Maritime and the Commercial
Court in Copenhagen.
XXII - NOTICES
Any notice hereunder shall be deemed to be sufficiently given if sent by
registered mail, or by international telex:
In the case of LEO to:
Leo Pharmaceutical Products Ltd.
Att.: The Managing Director
Industriparken 55
DK-2750 Ballerup
Denmark
Telex: 35147 leo dk
In the case of SQUIBB to:
E.R. SQUIBB & SONS INC.
Att.: The President
P.O. Box 4000
Princeton, N.J. 08543-4000
USA
Telex: 843334 squibb prin
or to such other address as the addressee shall have last furnished in writing
to the addressor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in duplicate by their authorized officers as of the date below
written.
LEO PHARMACEUTICAL PRODUCTS LTD.
A/S (LOVENS KEMISKE FABRIK
PRODUKTIONSAKTIESELSKAB) E.R. SQUIBB & SONS INC.
By: /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
---------------------------- ---------------------------------
Title: /s/ [ILLEGIBLE] Title: /s/ [ILLEGIBLE]
------------------------- ------------------------------
Date: 28-9-1989 Date: 28-9-1989
-------------------------- -------------------------------
APPENDIX 1
"PATENTS"
U.S. Application Serial Number 07/034,391
Filing Date 03/18/87
APPENDIX 2
"Compound"
Structural formula of MC 903:
[STRUCTURAL FORMULA GRAPHIC]
MC 903 is a colourless, crystalline vitamin D analogue with the formula C2?H??O3
(molecular weight 412.62).
APPENDIX 3
Supply
In accordance with discussions between SQUIBB and LEO the parties have agreed as
follows:
1. SQUIBB shall purchase from LEO (or an Affiliate of LEO) and LEO shall
sell to SQUIBB, according to Article IV, Licensed Products for use in the
Territory on the following conditions and terms:
2. For the first two (2) years of marketing SQUIBB shall maintain at least
three (3) months' inventory of the Licensed Products. SQUIBB shall inform
LEO at monthly intervals of the amount of inventory on hand. Three (3)
months' inventory shall be determined at any particular time by
multiplying by three (3) the average of SQUIBB's monthly sales and
samples of the Licensed Products during the preceding six (6) months in
which deliveries of the Licensed Products were made by LEO.
APPENDIX 3. Page 2
3. Not less than three (3) months before commencement of the period SQUIBB
shall provide to LEO a rolling delivery schedule for the supply to it of
the Licensed Products covering a period of twelve (12) months. Orders
specified in the delivery schedule will be confirmed by SQUIBB with a
minimum of sixty (60) days' notice prior to dispatch from LEO. Should a
particular purchase order call for delivery of amounts of the Licensed
Products in excess of the amounts specified in a delivery schedule for a
particular month, that portion of the excess which LEO cannot deliver as
requested by such purchase order shall be automatically added to and
should be delivered in the succeeding month. However, LEO will endeavor
to do its utmost to execute the requested delivery.
Where any individual item of packaging is to be changed, a minimum of
four (4) months' notice prior to dispatch following receipt of camera
ready artwork will be required.
4. SQUIBB shall remit payment within forty-five (45) days after receipt of
each shipment which is sent to SQUIBB.
APPENDIX 3, Page 3
5. All shipments will be sent to a facility of SQUIBB or to such other place
as SQUIBB shall designate, and will be in accordance with the
specifications for shipping and packing included with each purchase order.
SQUIBB shall pay freight on all such shipments. Delivery will be made to a
common carrier as SQUIBB shall direct or to any special carrier which
SQUIBB shall designate, and all risk of loss, delay or damage in transit
shall be borne by SQUIBB. LEO shall pay all import duties. Acceptance of
any consignment shall be made in writing to LEO within forty-five (45) days
from receipt. Quality determinations on Licensed Products shall be made
strictly in accordance with the specifications mutually agreed upon. For
special supply of Licensed Products on which a sterility test is in
particular necessary or is required by the FDA, the parties shall discuss
and mutually agree in writing on such sterility test to be used by both
parties.
APPENDIX 4
DEVELOPMENT PLAN
ELAPSED TIME
YEAR 1 YEAR 2 YEAR 3
|____________________|_______________|_________________|
Rewrite data |______|
to U.S. IND format 0 4
Manuf. of
clinical supplies |______|
at LEO 0 4
Prepare Physician's |______|
Brochure 0 4
Develop labels and
blinding codes for |______|
clinical trial 0 4
1372 form |
4
Pre-I.N.D. |______| (can occur at any point prior
4 to I.N.D. submission)
30 day I.N.D. hold |___|
4 5
Clinical trials |_________|
Phase III study 5 13
CRF
study |___|
clean-up 13 14
Data |___|
analysis 14 15
NDA write-up |___________|
and assembly 14 20
Submission and Review |__________________ --
20 36-48
[LEO PHARMACEUTICAL PRODUCTS LETTERHEAD]
OUR REF. YOUR REF.
September 28, 1989
E.R. SQUIBB & SONS INC.
Princeton, N.J. 08543-4000
U.S.A.
Gentlemen:
Whereas SQUIBB and LEO have entered into an agreement of even date related to MC
903 ("the License Agreement") and LEO are doing extensive research within the
vitamin D field with the aim of synthesizing new vitamin D analogues of
potential usefulness in the treatment of dermatologic disorders, LEO hereby
grant SQUIBB an option to take a license to new vitamin D analogues for systemic
and/or topical dermatologic use resulting from the above mentioned research as
far as these are covered by patent(s) or patent application(s) filed after
August 2, 1985 and before January 1, 1992, however, the option to vitamin D
analogues for systemic use will be subject to the condition that it legally and
otherwise will be possible to separate dermatologic use from other indications
such as cancer and autoimmune diseases.
LEO PHARMACEUTICAL PRODUCTS Page 2
LOVENS KEMISKE FABRIK September 28, 1989
[LETTERHEAD]
If LEO after completion of Phase I trials identify one more vitamin D analogues
as candidates for further development as agent(s) for treatment of dermatologic
disorders LEO will notify SQUIBB and provide the results of their preliminary
testing.
SQUIBB will then have a 6-month period to decide whether or not they want to
exercise the option and enter into a license agreement.
The terms of such a license agreement shall be negotiated between the parties.
Very truly yours,
LEO PHARMACEUTICAL PRODUCTS LTD. A/S
(LOVENS KEMISKE FABRIK PRODUKTIONSAKTIESELSKAB)
[W.O. GODTFREDSEN SIGNATURE]
W.O. Godtfredsen
Director of Research and Development, Dr. Sc.
[LEO LOGO LETTERHEAD]
LEO PHARMACEUTICAL PRODUCTS
LEO PHARMACEUTICAL PRODUCTS TRADING LTD. - LEO PHARMACEUTICAL PRODUCTS LTD.
REG. NO. 23.122 PLACE OF REGISTRATION COPENHAGEN REG. NO. 33.288
55, INDUSTRIPARKEN - DK-2750 BALLERUP - DENMARK
TELEPHONE: +45 44 92 38 00 - TELEGRAMS: HORMONLEO.COPEHAGEN
- TELEX: 35147 LEO DK - TELEFAX: +45 44 94 15 16
OUR REF. YOUR REF.
September 28, 1989
E.R. SQUIBB & SONS INC.
Princeton, N.J. 08543-4000
U.S.A.
Gentlemen:
SQUIBB and LEO have entered into an agreement of even date related to MC 903
("the License Agreement") and it is foreseen that the parties may find it
appropriate as follow-up products to introduce in the Territory combination
product(s) containing MC 903 plus one or more other active ingredients.
In such events the parties shall meet and discuss the commercial terms for the
combination product(s) in question and the principle shall be that LEO's part
of the revenue from the sale of such combination product(s) shall be similar to
LEO's revenue obtained under the License Agreement from sales in the Territory
of Licensed Products containing the same amount of MC 903.
Very truly yours,
LEO PHARMACEUTICAL PRODUCTS LTD. A/S
(LOVENS KEMISKE FABRIK PRODUKTIONSAKTIESELSKAB)
[/S/ W.O. GODTFREDSEN]
W.O. Godtfredsen
Director of Research and Development, Dr. Sc.
[LEO LOGO LETTERHEAD]
LEO PHARMACEUTICAL PRODUCTS LTD. A/S
(LOVENS KEMISKE FABRIK PRODUKTIONSAKTIESELSKAB)
REG.NO.32. 852 COPENHAGEN
55, INDUSTRIPARKEN - DK-2750 BALLERUP - DENMARK
TELEPHONE: +45 44 92 38 00 - TELEX: 35147 LEO DK - TELEFAX: +45 44 94 15 16
JM/hs/2.16/A152
July 7, 1992
BY FAX AND REGISTERED AIRMAIL
Julius A. Vida, Ph.D., MBA
Vice President Licensing
Bristol-Myers Squibb Company
Pharmaceutical Group
Business Development and Planning
P.O. Box 4000 Princeton,
New Jersey 08543-4000
U.S.A.
Dear Julius,
Attached I return, for B-MS's file, the one copy of the revised MC-903 signed
on behalf of Leo by Dr. Poul Rasmussen.
Best regards,
Sincerely,
LEO PHARMACEUTICALS PRODUCTS
[/S/ JAN MULLER]
Jan Muller
cc: A. Bodnar
Z. Horovitz
R. McRae
J. Marsh
H. Sussmann
Encl.
AMENDMENT
This Amendment, effective as of the day last below written, by and between LEO
PHARMACEUTICAL PRODUCTS LTD. A/S (LOVENS KEMISKE FABRIK
PRODUKTIONSAKTIESELSKAB) of DK-2750 Ballerup, Denmark (hereinafter referred to
as "LEO") and E.R. SQUIBB & SONS INC, Princeton, New Jersey 08543-4000, United
States of America (hereinafter referred to as "SQUIBB");
WITNESSETH
WHEREAS LEO and SQUIBB have entered into a License Agreement on the vitamin D
analogue MC-903 as of September 28, 1989 (hereinafter referred to as "the
License Agreement"); and
WHEREAS BRISTOL-MYERS SQUIBB COMPANY has acquired SQUIBB through a merger; and
WHEREAS the parties desire to amend the License Agreement to reflect the
changes in SQUIBB's ownership and to accomplish certain other objectives.
NOW, THEREFORE, in consideration of the premises and the mutual covenants of
the parties, LEO and SQUIBB agree to amend the License Agreement as follows:
1. The parties to the License Agreement are LEO PHARMACEUTICAL PRODUCTS LTD.
A/S (LOVENS KEMISKE FABRIK PRODUKTIONSAKTIESELSKAB) of DK-2750 Ballerup,
Denmark (hereinafter referred to as "LEO") and BRISTOL-MYERS SQUIBB COMPANY
of 345 Park Avenue New York, NY 10154-0037, U.S.A. (hereinafter referred to
as "BRISTOL-MYERS SQUIBB"); and all references to SQUIBB in the Agreement
shall be changed to BRISTOL-MYERS SQUIBB.
-2-
2. In view of the already existing delay in the development of Licensed
Products according to the development plan in Appendix 4 to the License
Agreement, the parties agree to replace said Appendix 4 with the attached
new development plan which is thus to be considered part of the License
Agreement as Appendix 4.
3. Paragraph III A is amended to read as follows:
Within 30 (thirty) days from the full execution date of this
Agreement, BRISTOL-MYERS SQUIBB shall pay to LEO in Ballerup a down
payment of $1,000,000 (one million United States Dollars) [Paid 1989].
Not later than 30 (thirty) days after BRISTOL-MYERS SQUIBB's
submission of a New Drug Application (NDA) to the FDA covering the
treatment of psoriasis with a Licensed Product in the form of an
ointment, a second installment of $1,000,000 (one million United
States Dollars) shall be paid to LEO. Not later than 30 (thirty) days
after BRISTOL-MYERS SQUIBB's submission of an NDA to the FDA covering
treatment of psoriasis with a Licensed Product in the form of a cream,
a third installment of $500,000 (five hundred thousand United States
Dollars) shall be paid to LEO. Not later than 30 (thirty) days after
having obtained final FDA approval for the marketing of a Licensed
Product in the form of an ointment, a fourth installment of $1,000,000
(one million United States Dollars) shall be paid to LEO. Not later
than 30 (thirty) days after having obtained final FDA approval for the
marketing of a Licensed Product in the form of a cream, a fifth
installment of $500,000 (five hundred thousand United States Dollars)
shall be paid to LEO. Not later than 30 (thirty) days after
BRISTOL-MYERS SQUIBB's submission of an NDA to the FDA seeking an
indication for continued use of a
-3-
Licensed Product following the apparent resolution of psoriatic
lesion(s)(long-term treatment) a sixth installment of $500,000 (five
hundred thousand United States Dollars) shall be paid to LEO. Not
later than 30 (thirty) days after having obtained final FDA approval
for the marketing of a Licensed Product having a claim for long-term
treatment, a seventh installment of $500,000 (five hundred thousand
United States Dollars) shall be paid to LEO.
It is to be understood that no part of the down payments paid to Leo
hereunder shall be refunded to BRISTOL-MYERS SQUIBB for any reason
whatsoever.
4. Paragraph VI F is amended to read as follows:
Until approval of an NDA (New Drug Application) has been obtained,
BRISTOL-MYERS SQUIBB will regularly and at least every three (3)
months report to LEO, in writing, the progress of the development
work. BRISTOL-MYERS SQUIBB representatives will also be available to
meet semi-annually with representatives of LEO in the United States
for the purpose of reporting progress in the development of Licensed
Products.
5. In consideration of the new development plan in Appendix 4, Paragraph XIII
B is amended to read as follows:
In the event that BRISTOL-MYERS SQUIBB has not submitted an
application for FDA approval of a Licensed Product in accordance with
the developmental plan in Appendix 4, and if BRISTOL-MYERS SQUIBB
cannot give LEO reasonable evidence that it has been diligent in
adhering to such development plan, or upon BRISTOL-MYERS SQUIBB's
voluntary discontinuance of marketing of Licensed Products for a
period of more than twelve (12)
consecutive months, LEO shall have the right upon sixty (60) days'
notice to BRISTOL-MYERS SQUIBB to change the conditions granted under
this Agreement to a non-exclusive license.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed in duplicate by their authorized officers.
LEO PHARMACEUTICAL PRODUCTS LTD.
A/S (LOVENS KEMISKE FABRIK
PRODUKTIONSAKTIESELSKAB) BRISTOL-MYERS SQUIBB COMPANY
By: /s/ Poul Rasmussen By: /s/ Julius A. Vida
--------------------------------- ------------------------------
Poul Rasmussen Julius A. Vida
Title: Title:
------------------------------ ---------------------------
Director R&D Vice President, Licensing
Date: Date:
------------------------------- ---------------------------
July 6, 1992 July 1, 1992
[Decision Path]
[1993]
[CALCIPOTRIENE CREAM DECISION PATH GRAPHIC]
[CALCIPOTRIENE GEL DECISION PATH GRAPHIC]
BMS-181161 CALCIPOTRIENE (OINT.) GRAPHIC]
[BMS-181161 CALCIPOTRIENE (OINT.) GRAPHIC]
SECOND AMENDMENT OF LICENSE AGREEMENT
MC-903/CALCIPOTRIENE
Agreement made as of the 8th day of April, 1993 by and between LEO
PHARMACEUTICAL PRODUCTS, LTD. A/S (LOVENS KEMISKE FABRIK
PRODUKTIONSAKTIESELSKAB), a corporation duly organized and validly existing
under the laws of Denmark having an address at Industriparken 55, DK-2750
Ballerup, Denmark ("LEO"), and BRISTOL-MYERS SQUIBB COMPANY a corporation duly
organized and validly existing under the laws of the State of Delaware, having
an address at 345 Park Avenue, New York, N.Y. 10154-0037 ("BRISTOL-MYERS
SQUIBB").
WHEREAS the parties have entered a License Agreement dated September 28, 1989,
as amended July 6, 1992, in respect of the Compound and Licensed Product(s); and
WHEREAS the parties agree that it is in their mutual best interest to amend
said Agreement in accordance with the terms and conditions set forth below.
NOW THEREFORE in consideration of the premises and mutual promises, the parties
agree as follows:
1
1. Article I, Paragraph E, is amended to delete the words "less five percent
(5%) of said adjusted gross invoice price" from the definition.
2. Article II of the Agreement is amended to delete that portion of Article II
beginning with the words "LEO retains the right..." and ending with the words
"...interests of both parties". Article II is further amended by the addition
of the following:
BRISTOL-MYERS SQUIBB agrees to promote Licensed Product and
conduct Phase IV research with Licensed Product in accordance with Schedules A
(Sales Force Promotion) and B (Calcipotriene Research) attached hereto.
3. Article III, Paragraph B, is amended to delete that portion of the second
sentence beginning with the words "The royalty rate..." and ending with the
words "(fifteen million United State Dollars);". Article III, Paragraph B, is
further amended by the addition of the following in place of the deleted
portion:
The royalty rate will be 10% (ten percent) of Net Sales;
4. Article IV, Paragraph B, is amended to delete the first three sentences of
that Paragraph. Article IV, Paragraph B, is further amended by the addition of
the following in place of the deleted sentences:
The Bulk Price from LEO shall be the lesser of i) 23% of the
weighted average of BRISTOL-MYERS SQUIBB's Net Sales
2
Price of Licensed Product or ii) the total of (a) 23% of the "inflation
adjusted capped selling price" (as defined in the Supply Agreement) plus
(b) 23% of one-half the difference between such "inflation adjusted capped
selling price" and the weighted average of BRISTOL-MYERS SQUIBB's Net Sales
Price of Licensed Product. The "inflation adjusted capped selling price" in
1989 is U.S. $15 per 30 gram tube, U.S. $30 per 60 gram tube and U.S. $50
per 100 gram tube. The "inflation adjusted capped selling price" shall be
adjusted once each year effective January 1, in an amount equal to the
increase in the United States Consumer Price Index published by the U.S.
Department of Labor for the twelve month period ending the prior October
31.
5. Article IV, Paragraph E, is deleted and the following Paragraph E is added
in its place:
E. For purposes of sampling, LEO will supply BRISTOL-MYERS SQUIBB with
Licensed Product(s) in quanities to be agreed upon. LEO will supply samples
at the lesser of the Cost Price or "Maximum Sample Price". The parties
shall mutually agree on the ideal size or sizes of Licensed Product(s) for
distribution as free samples. A 3 gram sample is the planned sample size on
the Effective Date of this Agreement. LEO's Cost Price for the 3 gram
sample in 1993 is $0.35. The "Maximum Sample Price" in 1993 is
3
$0.35/3 gram sample. The "Maximum Sample Price" is adjusted for
inflation once each year effective January 1, in an amount equal
to the increase in the official Danish Consumer Price Index for
the twelve month period ending the prior October 31.
6. Article VI, Paragraph E is amended by deletion of the words "such
development work" and by their replacement with the words "development work
and other preclinical and clinical research whether prior to or after FDA
approval."
7. Article VI, Paragraph H, is deleted.
8. Article XII, Paragraph B, is amended by the deletion of the words "or if
LEO exercises its rights under Article II,".
9. Article XV is amended by the addition of the following:
D. LEO agrees to assign to BRISTOL-MYERS SQUIBB all of its right,
title and interest in and to the United States trademark DOVONEX.
BRISTOL-MYERS SQUIBB agrees not to use such trademark outside the
Territory.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their authorized officers.
4
LEO PHARMACEUTICAL PRODUCTS LTD. BRISTOL-MYERS SQUIBB COMPANY
A/S (LOVENS KEMISKE PABRIK
PRODUKTIONSAKTIESELSKAB)
By: By: /s/ Jeffrey B. Marsh
----------------------------- ---------------------------------
Jeffrey Marsh
Title: Title: President
------------------------- Westwood-Squibb
Pharmaceuticals Inc.
Date: Date: 4/8/93
----------------------------- ---------------------------------
5
EXHIBIT D
VITAMIN D ANALOGUE MC 903/CALCIPOTRIENE
PRODUCT SUPPLY AGREEMENT
Agreement made as of the 8th day of April, 1993 (the Effective Date) by
and between LEO PHARMACEUTICAL PRODUCTS, LTD. A/S (LOVENS KEMISKE FABRIK
PRODUKTIONSAKTIESELSKAB), a corporation duly organized and validly existing
under the laws of Denmark having an address at Industriparken 55, DK-2750
Ballerup, Denmark (hereinafter referred to as "LEO"), and BRISTOL-MYERS SQUIBB
COMPANY a corporation duly organized and validly existing under the laws of
the State of Delaware, having an address at 345 Park Avenue, New York, N.Y.
10154-0037 ("BRISTOL-MYERS SQUIBB").
W I T N E S S E T H
WHEREAS, the parties have executed an Agreement on September 28, 1989,
amended July 6, 1992, further amended on the date of this Agreement, in respect
of the Vitamin D analogue MC 903/calcipotrine (Compound) and pharmaceutical
compositions and dosage units containing Compound which can be used in the
dermatological field (Licensed Product(s)); and
WHEREAS, LEO is engaged in the manufacture and sale of Compound and
Licensed Product(s) and has agreed to supply same to BRISTOL-MYERS SQUIBB under
terms and conditions generally outlined in the above-mentioned Agreement of
September 28, 1989.
NOW THEREFORE, for and in consideration of the premises and mutual
promises, the parties agree as follows:
ARTICLE I DEFINITIONS
This Product Supply Agreement will incorporate by reference all
definitions set out in the License Agreement dated September 28, 1989. In
addition, the following definitions shall apply to this Product Supply
Agreement.
A. Bulk Price shall mean the lesser of i) 23% of the weighted average of
BRISTOL-MYERS SQUIBB's Net Sales Price of Licensed Product or ii) the total of
(a) 23% of the "inflation adjusted capped selling price" plus (b) 23% of
one-half the difference between such "inflation adjusted capped selling price"
and the weighted average of BRISTOL-MYERS SQUIBB's Net Sales Price of Licensed
Product.
The "inflation adjusted capped selling price", based on 1989 prices, is
set at U.S.$15/30 gram tube, U.S.$30/60 gram tube and U.S.$50/100 gram tube for
all speciality forms. The "inflation adjusted capped selling price" is to be
adjusted once each year effective January 1, in an amount equal to the increase
in the United States Consumer Price Index published by the U.S. Department of
Labor for the twelve month period ending the prior October 31.
2
The Bulk Price shall be calculated as provided in this paragraph so long as
the weighted average of the BRISTOL MYERS SQUIBB Net Sales Price for Licensed
Product (containing 50 micrograms per gram of MC 903/calcipotriene) exceeds the
inflation adjusted equivalent of (1989) U.S. $120/kilogram of Licensed Product.
The figure U.S. $120/kilogram is to be adjusted once each year effective January
1, in an amount equal to the increase in the official Danish Consumer Price
Index for the twelve month period ending the prior October 31. In the event the
weighted average of the BRISTOL-MYERS SQUIBB Net Sales Price for all sizes of
Licensed Product shall fall below the inflation adjusted equivalent of (1989)
U.S. $120/kilogram, and, if in such event, Leo's documented Cost Price shall
exceed the calculated Bulk Price then, and only then, shall the Bulk Price for
Licensed Product be equal to Leo's Cost Price.
B. "Filling and Packaging Fee" shall mean an inflation adjusted fee
added for each tube filled with bulk Licensed Product, packaged and sold by LEO
to BRISTOL-MYERS SQUIBB for commercial sale. The Filling and Packaging Fee is to
be adjusted once each year effective January 1, in an amount equal to the
increase in the Danish Consumer Price Index for the twelve month period ending
the prior October 31. In 1993 the Filling and Packaging Fee in U.S. $0.37/30
gram tube, $0.46/60 gram tube and $0.61/100 gram tube.
C. "Packaging Materials" shall mean all tubes, cartons,
3
package inserts and shipping cartons necessary for use with Licensed Product.
Packaging Materials shall be provided at LEO's net out-of-pocket cost.
BRISTOL-MYERS SQUIBB reserves the right to supply such Packaging Materials
directly at its sole cost. In 1993, LEO's net out-of-pocket cost for Packaging
Materials is $0.28/30 gram package, $0.33/60 gram package and $0.42/ 100 gram
package.
ARTICLE II - QUANTITY
During the term of this Agreement, upon receipt of BRISTOL-MYERS SQUIBB's
purchase orders, LEO will sell and BRISTOL-MYERS SQUIBB will purchase 100% (one
hundred percent) of BRISTOL-MYERS SQUIBB's total requirements of Licensed
Product(s) for distribution in the Territory unless circumstances contemplated
by this Product Supply Agreement or the Agreement of September 8, 1989 dictate
otherwise.
ARTICLE III PRICE FOR LICENSED PRODUCT INTENDED FOR RESALE
The price for each unit of Licensed Product intended for resale shall be
comprised of the Bulk Price plus the Packaging and Filling Fee plus the cost of
Packaging materials (unless supplied by BRISTOL-MYERS SQUIBB).
ARTICLE IV PRICE FOR LICENSED PRODUCT INTENDED FOR FREE
DISTRIBUTION
A. For purposes of sampling, LEO will supply BRISTOL-MYERS SQUIBB with
Licensed Product(s) in quantities to be agreed upon. LEO will supply samples
at the lesser of Cost Price or "Maximum Sample Price".
B. The parties shall mutually agree on the ideal size or sizes of
Licensed Product(s) for distribution as free samples. A 3 gram sample is the
planned sample size on the Effective Date of this Agreement.
C. LEO's Cost Price for the 3 gram sample in 1993 is $0.35.
D. The "Maximum Sample Price" in 1993 is $0.35/ 3 gram sample. The
"Maximum Sample Price" is adjusted for inflation once each year effective
January 1, in an amount equal to the increase in the official Danish Consumer
Price Index for the twelve month period ending prior October 31.
ARTICLE V ORDERS
A. The parties agree to correspond and/or meet as soon as possible and
regularly thereafter, at mutually convenient times and places, to discuss
BRISTOL-MYERS SQUIBB's requirements under
5
Article II, and the mechanisms that can be established to assure that those
requirements are timely met. This is especially important in the start up
period, and also with reference to Article VI, Paragraph E.
B. Three (3) months before the beginning of each quarter BRISTOL-MYERS
SQUIBB shall place a firm order in writing to LEO for that quarter, and
indicate to LEO, BRISTOL-MYERS SQUIBB's estimated requirements for each of
the following 3 quarters and the subsequent 12 months. LEO will supply in a
timely manner the quantities adequate to meet BRISTOL-MYERS SQUIBB's orders
up to the estimated amounts for the relevant period. Should a particular
purchase order call for delivery of Licensed Product in excess of the
amounts specified in a delivery schedule for a particular month, that
portion of the excess which LEO cannot deliver as requested by such
purchase order shall be automatically added to and should be delivered in
the succeeding month. However, LEO will endeavor to do its utmost to
execute the requested delivery.
C. For the first two (2) years of marketing BRISTOL-MYERS SQUIBB shall
maintain at least three (3) months' inventory of the Licensed Products.
ARTICLE VI DELIVERY
A. All shipments shall be shipped to a facility of BRISTOL-MYERS
SQUIBB or to such other place as BRISTOL-MYERS SQUIBB
6
shall designate, and will be in accordance with the delivery instructions and
with the Specifications for shipping and packing included with each purchase
order. BRISTOL-MYERS SQUIBB shall pay freight on all such shipments. Delivery
will be made by LEO to a common carrier as BRISTOL-MYERS SQUIBB shall direct or
to any special carrier which BRISTOL-MYERS SQUIBB shall designate, and all risk
of loss, delay or damage in transit shall be borne by BRISTOL-MYERS SQUIBB.
B. LEO shall pay all import duties. BRISTOL-MYERS SQUIBB shall pay
customs broker fees.
C. Licensed Product sold to BRISTOL-MYERS SQUIBB by LEO shall meet the
Specifications set forth in Exhibit A attached hereto. LEO shall provide a
Certificate of Analysis for every lot of Licensed Product confirming that such
Licensed Product has met the Specifications. The Specifications shall be
mutually agreed upon and may be changed from time to time upon mutual agreement
of the parties except that if any change to the Specifications is mandated by
the U.S. Food and Drug Administration (FDA), such change will be deemed
acceptable by LEO. However, BRISTOL-MYERS SQUIBB in conjunction with LEO shall
determine the feasibility of negotiating such changes with the FDA and/or an
appropriate amendment to this Product Supply Agreement.
D. BRISTOL-MYERS SQUIBB shall examine Licensed Product
7
within 45 (forty-five) days of receipt and shall advise Leo in writing whether
Licensed Product meets or does not meet the Specifications. If Licensed Product
does not meet the Specifications LEO will credit the purchase price to the
account of BRISTOL-MYERS SQUIBB. LEO will decide, at its own expense, the fate
of the Licensed Product in question. Any such rejected Licensed Product shall be
replaced by Leo as promptly as possible. If LEO does not agree to the rejection
of a Licensed Product the parties will seek the opinion of an independent, and
to both parties acceptable, laboratory whose opinion shall be final and binding.
The expenses for such expert opinion shall be borne by the party shown to be
wrong, or, if the expert cannot place the fault noticed and complained about,
then the parties shall share equally the expenses connected with the expert.
E. Leo shall use its best efforts to implement any change in the
Specifications as promptly as possible. Any change in Specifications for the
Packaging Materials shall be implemented not less than four months after receipt
by LEO of camera ready artwork. BRISTOL-MYERS SQUIBB shall hold LEO harmless for
any Packaging Material which LEO has bought as a result of BRISTOL-MYERS
SQUIBB's forecasting in accordance with this Product Supply Agreement provided,
however, that Bristol-Myers Squibb's indemnity liability under this Paragraph
shall not exceed the cost of six months of any Packaging Material from the date
of initial notification of the packaging change.
8
F. If any change in Specifications is requested by LEO, and is agreed to
by BRISTOL-MYERS SQUIBB, it is mutually agreed that if such change requires
prior approval by FDA, such change will not be implemented in respect of
Licensed Products sold to BRISTOL-MYERS SQUIBB until such change has been so
approved.
ARTICLE VII PAYMENT
A. A LEO invoice shall accompany each shipment of Licensed Product.
Because the precise Net Sales Price for Licensed Product will not be known at
the time of shipment by LEO, the LEO invoice shall reflect the estimated Net
Sales Price based upon the most recent information available to LEO.
B. BRISTOL-MYERS SQUIBB shall pay the invoiced amount for Licensed Product
in U.S. dollars within 45 (forty-five) days after receipt at the facility
specified in the delivery instructions.
C. Adjustments to correct the invoiced amount shall be made promptly
following receipt of information on the actual Net Sales Priced realized on the
resale of Licensed Product.
9
ARTICLE VIII QUALITY ASSURANCES
A. Leo warrants that Licensed Product sold to BRISTOL-MYERS SQUIBB is of
pharmaceutical grade and quality suitable for human use and that it meets the
Specifications attached hereto as such Specifications may be revised from time
to time as provided herein and that such Licensed Product conforms to any
further affirmations of fact as may be made on or in any other documentation
associated or related to such Licensed Product.
B. In the event BRISTOL-MYERS SQUIBB determines that any Licensed Product
already in interstate commerce in the Territory presents a risk or injury or
gross deception or is otherwise defective and that recall of such Licensed
Product is appropriate, BRISTOL-MYERS SQUIBB shall conduct such recall in
accordance with FDA guidelines. LEO shall fully cooperate with BRISTOL-MYERS
SQUIBB in the investigation of the cause of the recall. If the parties agree
that the cause of the recall was the fault of LEO, LEO shall reimburse the full
BRISTOL-MYERS SQUIBB cost and expense associated with such recall provided
however, that Leo's liability under this provision shall not extend to
consequential damages associated with such need.
C. Leo agrees to permit representatives of BRISTOL-MYERS SQUIBB to visit
and inspect, at reasonable times to be mutually agreed upon, the LEO facilities
(and all appropriate and relevant
10
documentation) at which Licensed Product and Compound are produced and packaged,
to confirm LEO's conformity with the Specifications and with any applicable
regulations of FDA. In the event such representatives conclude that any
non-conformity with such Specifications or regulations is continuing, the
parties shall use their respective best efforts to resolve the issue as quickly
as possible.
ARTICLE IX LEO INABILITY TO SUPPLY LICENSED PRODUCT
Should LEO for any reason be unable to supply Licensed Product for more
than 45 (forty-five) days beyond the agreed delivery date in a firm purchase
order, then BRISTOL-MYERS SQUIBB shall be entitled to purchase Compound from LEO
and to formulate Licensed Product(s) for as long as the inability to supply
shall continue to exist. The price for Compound shall reflect not only the cost
avoided by LEO in producing Licensed Product(s) but shall also take into account
the BRISTOL-MYERS SQUIBB cost to produce Licensed Product(s) from such Compound
in a packaged form for resale comparable to the form(s) received from LEO. The
intent of this provision is that the BRISTOL-MYERS SQUIBB price for Compound
together with the full BRISTOL-MYERS SQUIBB cost associated with converting such
Compound to Licensed Product shall be no more than the then current price paid
by BRISTOL-MYERS SQUIBB to LEO for Licensed Product.
11
In the event LEO shall be obligated to supply Compound to BRISTOL-MYERS
SQUIBB, the provisions of this Product Supply Agreement, insofar as they are
applicable, shall apply to sale and deliveries of such Compound.
If, and for as long as Leo should for any reason be unable to supply
Compound, BRISTOL-MYERS SQUIBB shall be entitled to manufacture or have
manufactured, the Compound and to formulate Licensed Products under the royalty
payable pursuant to Article III of the Agreement dated September 28, 1989 and
amended on the date of this Agreement. In such cases LEO will provide
BRISTOL-MYERS SQUIBB with the Know-How and assistance required by BRISTOL-MYERS
SQUIBB for formulation and/or manufacture, as the case may be.
ARTICLE X FORCE MAJEURE
LEO's and/or BRISTOL-MYERS SQUIBB's failure to fulfill any obligations
hereunder when due, shall be excused by strikes, riots, war, invasion, acts of
God, fire, explosion, floods, delay of carrier, shortages or failures in the
supply of material, acts of government agencies or instrumentalities, judicial
action, labor trouble, and other contingencies beyond the control of the party
to be excused. In the event force majeure prevents LEO from supplying Licensed
Product or Compound the provisions of Article IX of this Product Supply
Agreement shall apply.
12
ARTICLE XI NOTICE
Whenever provision is made herein for the giving of notice by one party to the
other, such notice shall be deemed to have been effectively given by mailing the
same properly addressed, postage prepaid, to the party to be notified at its
address set forth herein:
For LEO:
Managing Director
LEO Pharmaceutical Products Ltd.
Industriparken 55
DK 2750 Ballerup
Denmark
For BRISTOL-MYERS SQUIBB:
President
Westwood-Squib Pharmaceuticals, Inc.
100 Forest Avenue
Buffalo, N.Y. 14213, U.S.A
ARTICLE XII TERM
This Product Supply Agreement shall be effective upon signing and shall
effective upon signing and shall continue in effect for a period of 15 (fifteen)
years from the date of first commercial sale of Licensed Product. Not less than
18 (eighteen) months prior to the scheduled expiration of this Supply Agreement
the parties shall meet to
13
determine whether there is mutual interest in renewing this Supply Agreement
irrespective of the expiration of the License Agreement. If the parties mutually
agree to renew this Supply Agreement the parties shall negotiate in good faith
the terms and conditions of any such renewal.
ARTICLE XIII TERMINATION FOR CAUSE
This Product Supply Agreement may also be terminated by a party in the
event the other party shall default in any of its obligations hereunder, or in
the event such other party becomes insolvent in a legal or equitable sense, or a
petition of bankruptcy is filed by or against such other party. If a party shall
default in any of its obligations, it shall have 90 (ninety) days from the date
of default notice to cure such default.
If this Agreement is terminated as a result of LEO's breach, bankruptcy or
insolvency, LEO shall provide BRISTOL-MYERS SQUIBB with information, Know-How
and assistance sufficient to fully enable BRISTOL-MYERS SQUIBB to manufacture
Licensed Products and/or Compound.
ARTICLE XIV RIGHTS ON TERMINATION
Any termination of this Agreement as provided herein shall not relieve
either party of any obligation arising hereunder prior
14
to such termination.
ARTICLE XV STATUS OF PRIOR AGREEMENTS
The provisions of this Product Supply Agreement shall prevail over any
inconsistent statements or provisions contained in any documents passing between
BRISTOL-MYERS SQUIBB and LEO including but not limited to any purchase order,
acknowledgement, confirmation or notice, provided however, that in the event of
inconsistency with the Agreement dated September 28, 1989, as amended, the
provisions of said Agreement and amendments shall prevail over this Product
Supply Agreement.
ARTICLE XVI LIABILITY
A. The provisions of Article XVI of the Agreement dated September 28, 1989
are incorporated by reference into this Product Supply Agreement.
B. Except as specified in Paragraph C below, and in Article VIII B,
BRISTOL-MYERS SQUIBB will indemnify and hold LEO harmless against any and all
liability, damage, loss, cost, or expense arising out of BRISTOL-MYERS SQUIBB's
promotion, distribution sale and use of Licensed Products and Compound sold by
LEO to BRISTOL-MYERS SQUIBB hereunder, provided, however, that upon the filing
of
15
any such claim or suit, LEO will immediately notify BRISTOL-MYERS SQUIBB thereof
and, at BRISTOL-MYERS SQUIBB's cost, permit BRISTOL-MYERS SQUIBB's attorneys to
handle and control such claims or suits.
c. LEO will indemnify and hold BRISTOL-MYERS SQUIBB harmless against any
and all liability, damage, loss, cost, or expense arising out of third party
suits based upon LEO's negligence in the manufacture of Licensed Products and
Compound sold to BRISTOL-MYERS SQUIBB or based upon LEO's failure to conform to
the Quality Assurances specified in Article VIII, provided, however, that upon
the filing of any such claim or suit BRISTOL-MYERS SQUIBB will immediately
notify LEO thereof, and at LEO's cost permit LEO's insurers/attorneys to handle
and control such claims or suits.
ARTICLE XVII GOVERNING LAW
The present Agreement shall be governed by the laws of the party being
sued, in all respects of validity, construction and performance thereof. In the
event BRISTOL-MYERS SQUIBB is the party being sued, this shall mean the laws of
the State of New Jersey, United States of America and the appropriate forum for
such suit shall be in the State of New Jersey. In the event LEO is the party
being sued, this shall mean the laws of the Kingdom of Denmark and the
appropriate forum shall be the Maritime and the
16
Commercial Court in Copenhagen.
ARTICLE XVIII ASSIGNMENTS
The parties acknowledge that WESTWOOD-SQUIBB PHARMACEUTICALS, Inc., a
wholly owned subsidiary of BRISTOL-MYERS SQUIBB COMPANY shall be responsible for
the sale and marketing of Licensed Product in the Territory. No additional
Agreement shall be necessary between LEO and WESTWOOD-SQUIBB PHARMACEUTICALS,
INC.
This Product Supply Agreement and the rights herein granted shall be
binding upon, and shall inure to the benefit of, successors of the parties
hereto, or to any assignee of all of the good will and entire business and
assets of a party hereto relating to pharmaceuticals, but shall not otherwise be
assignable without the prior written consent of the other party.
ARTICLE XIX WAIVER
The failure of either party hereto at any time to require performance by
the other party of any provision of this Product Supply Agreement shall not
affect the right of such aggrieved party to require future performance of that
provision, and any waiver by either party of any breach of any provision of this
Product Supply Agreement must be in writing to be effective and shall not be
17
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right under this Agreement.
In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed in duplicate by their authorized officers.
LEO PHARMACEUTICAL PRODUCTS, LTD. BRISTOL-MYERS SQUIBB COMPANY
A/S (LOVENS KEMISKE FABRIK
(PRODUCKTIONSAKTIESELSKAB)
By: By: /s/ Jeffrey B Marsh
------------------------ -----------------------
Jeffrey B Marsh
--------------------------- -----------------------
Title Title PRES; WESTWOOD-SQUIB
Date: Date: 4/8/93
---------------------- ----------------------
18
Schedule A
Sales Force Promotion of Calcipotriene
Westwood-Squibb Pharmaceuticals. Inc. on behalf of Bristol-Myers Squibb will
provide the following minimum levels of Sales Force promotion of calcipotriene
during the following periods:
First 12 months of promotion: 95,400 Details
First 12 months of promotion: 127,900 Details
Years 3-5: 63% of total Westwood-Squibb Sales Force details to dermatologists
and primary care physicians
SCHEDULE B
CALCIPOTRIENE RESEARCH
PSORIASIS LONG TERM: A one year safety study, open labeled use.
PSORIASIS QD: A once a day vehicle controlled efficacy study versus BID for 8
weeks.
PSORIASIS COMPATIBILITY: A double-blind parallel group. Calcipotriene plus HALOG
WESTCORT OR HYTONE to show compatibility.
CALCIPOTRIENE + ULTRAPOTENT STEROID: A double-blind parallel study.
Calcipotriene BID versus Ultrapotent in AM calcipotriene PM versus Ultrapotent
BID for 2 weeks.
HIGH DOSE USAGE: A safety study to determine effect of 30g calcipotriene per day
on bone metabolism parameters.
SKIN THINNING EVALUATION: Calcipotriene versus vehicle and calcipotriene versus
a steroid to assess skin thinning potential.
MODE OF ACTION: Dr. Voorhees study to assess receptor binding activity.
SKIN EFFECTS: To evaluate the effect of calcipotriene on the histology of the
skin.
CALCIPOTRIENE VS. LIDEX: A double-blind parallel BID study of calcipotriene
versus LIDEX for six weeks.
