EXHIBIT 99.3
ADVANCE AGREEMENT
This ADVANCE AGREEMENT (this "Agreement") is made and entered into as
of this 20th day of February, 2003, by and between AMERICAN PHARMACEUTICAL
PARTNERS, INC., a Delaware corporation ("APP"), with offices at 0000 Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-0000, XXX, and BIGMAR
PHARMACEUTICALS, SA, a Swiss corporation ("Bigmar"), with offices at Xxx
Xxxxxxxxx, 00, 0000-XX, Xxxxxxxx, Xxxxxxxxxxx. All references to APP and Bigmar
shall include the public companies and their respective subsidiaries. BIGMAR,
INC. ("Bigmar, Inc.") a Delaware corporation having offices at 0000 Xxxxxxxxx
Xxxx Xxxx, Xxxxxxxxx, Xxxx 00000 XXX, is a party to this Agreement as a
guarantor of the performance under this Agreement by Bigmar and all of the
affiliates of Bigmar including Bigmar, Inc.
WHEREAS, Bigmar and APP have several agreements between them relating
to various aspects of their business relationship, most notably for purposes of
this Agreement a certain Manufacturing and Labeling Agreement dated February 17,
2000 whereby Bigmar manufactures and sells to App for resale in the United
States and Canada several finished pharmaceutical products; and
WHEREAS, Bigmar and APP desire that APP pay certain invoices issued to
Bigmar for methotrexate active pharmaceutical ingredient (the "API") as
referenced below and that APP pay for additional quantities of the API so that
Bigmar can convert such API into finished methotrexate injection (6 separate
codes) and methotrexate for injection (1 code) (collectively, "Products") for
sale to APP.
NOW, THEREFORE, in consideration of the terms, conditions, rights and
covenants set forth herein, the parties agree as follows:
1. Past Due Amounts. APP shall immediately pay to Bigmar's
supplier of the API, Orion Corporation Fermion, X.X. Xxx 00,
XX-00000, Xxxxx, Xxxxxxx ("Orion"), the full amount of Orion's
outstanding and unpaid invoices to Bigmar for the API, a total
of (euro)332,045 pertaining to invoice number 30267/359
((euro)126,195) and invoice number 30307/359 ((euro)205,850),
copies of which are attached hereto as Exhibits A and B,
together with any interest Orion may charge in respect of the
late payments.
2. Further Orders of API. APP shall further pay to Orion,
(euro)371,425 for an additional 83 kilograms of API, such
payments to be made on approximately February 27, 2003 in the
amount of (euro)214,800 and April 4, 2003 in the amount of
(euro)156,625, which API is to be shipped to Bigmar. Bigmar
shall provide APP with copies of the invoices in respect of
such purchases prior to APP's payments, and shall provide APP
with Orion's written acceptance of such orders promptly upon
Bigmar's receipt of same.
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3. Use of API; Priority of Manufacture. Bigmar shall utilize the
API purchased with payments by APP solely in the manufacture
of Products to be sold to APP. Bigmar shall not utilize such
API for any other purpose, including without limitation, the
manufacture of any methotrexate in finished form for sale to
any third party. Until all of APP's past-due and then current
orders for the Product are filled, Bigmar shall not
manufacture methotrexate in finished form for sales to any
third party, and shall otherwise give reasonable priority to
the manufacture of Products for APP; provided, however, that
Bigmar shall update and confer with APP at least weekly during
such period in respect of its manufacturing schedule and shall
reasonably adjust such scheduling in consultation with APP in
order to assure an optimal schedule of delivery for all
products (including Products) APP purchases from Bigmar in
order that APP is able to fill its then current market
requirements.
4. Full Amount Due; Fulfillment of Demand. Bigmar represents and
warrants to APP that the amount set forth above in Paragraph 1
is the full amount due Orion in connection with Orion's past
supply of API to Bigmar, and that with such payment and the
receipt of API as set forth in Paragraph 2 above, Bigmar shall
be able to fill the outstanding orders and forecasted demand
of APP for the Products within a commercially reasonable
period of time.
5. Repayment by Bigmar. Bigmar covenants to and shall repay all
amounts paid by APP to Orion on Bigmar's behalf and/or in
respect of purchases of API (the total of such payments, as
converted into US Dollars using the foreign exchange rate as
reported in the US edition of the Wall Street Journal on the
date of each payment by APP to Orion, and as reduced from time
to time by payments and/or credits, the "Outstanding
Advance"). The Outstanding Advance shall be reduced by the
amount of any amount paid or credited to APP pursuant to this
Paragraph 5. APP shall have the right to offset and apply as
credit the Outstanding Advance against up to seventy-five
percent (75%) of any invoice issued by Bigmar to APP for APP's
purchases of Products from Bigmar until the Outstanding
Advance is reduced to zero (0). Bigmar shall, separate from
the credits APP may take pursuant to the previous sentence,
have the right to make payments against and thus reduce the
Outstanding Advance if and when Bigmar may so desire;
provided, however that in the event that APP has not within
twelve (12) months of the date of this Agreement been fully
repaid the Outstanding Advance through the credits against
Bigmar invoices referred to in this Paragraph 5, Bigmar shall
within thirty (30) days of the end of such twelve (12) month
period, pay APP the full amount then remaining of the
Outstanding Advance.
6. Security.
a. To secure the repayment of moneys APP has paid and
shall pay to Orion on Bigmar's behalf and/or in
respect of purchases of API, Bigmar hereby grants to
APP a security interest in Bigmar's Abbreviated New
Drug Applications, and the respective Approvals, for
each of the Product (ANDA Nos. 40-263, 40-265 and
40-266), leucovorin calcium for injection (ANDA No.
40-286), and daunorubiein hydrochloride for injection
(ANDA No. 65-000), together with any supplements and
other or future ANDA's Bigmar may file with respect
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to said products (collectively, the "Approvals").
Bigmar shall remain in possession of and own such
Approvals unless and until a Default (as defined
hereinafter) occurs, and shall not sell, transfer or
dispose of the Approvals, or grant or subject such
Approvals to any paid charge, lien or security in
favor of any third party. Bigmar shall properly
maintain such approvals, including without limitation
filing all supplementals, amendments, annual and
other periodic or required reports, notifications and
other materials as necessary under the laws of the
United States. For purposes of this Agreement,
"Default" shall mean Bigmar's failure to pay the
remaining Outstanding Advance and set forth in the
last sentence of Paragraph 5 above after a notice of
default and a forty-five (45) day opportunity to cure
such failure to pay.
b. APP shall be entitled to inspect, examine and
photocopy all files of Bigmar relating to the
Approvals at any time on reasonable notice during
normal business hours.
c. In order to assure that APP is able to enforce and
fully make use of its security in the Approvals upon
the occurrence of an event of Default, Bigmar shall
promptly and reasonably cooperate if and as APP
desires that APP be added to one or more Approvals as
an alternate manufacturer, and so notifies Bigmar.
Such cooperation shall include without limitation
giving technical assistance and advice based upon
Bigmar's experience, providing APP with access to
reasonable quantities of the respective active
pharmaceutical ingredients and other components, and
executing any documents or other materials necessary
to add APP under law and regulation.
d. Upon the occurrence of Default, Bigmar shall: i)
transfer and assign the Approvals to APP and take all
steps to accomplish the same; ii) make available and
provide APP with all original files, documents and
other materials relating to the Approvals; iii)
execute any documents or other materials necessary to
transfer the Approvals to APP under law and
regulation; iv) assert no defenses or claims it may
have against APP except those Bigmar may have under
this Agreement; and v) pay on demand all expenses and
expenditures of APP, including without limitation,
reasonable attorneys fees and expenses, incurred by
APP in protecting, enforcing or exercising the rights
and remedies created by, connected with or provided
in, or performance pursuant to, this Agreement. Upon
satisfaction of all of the conditions set forth in
the foregoing sentence of this Paragraph 6.d,
Bigmar's obligation to pay any remaining Outstanding
Advance shall be forgiven and such debt shall be
extinguished.
e. Bigmar represents and warrants to APP that i) Bigmar
is the true and rightful owner of the Approvals; ii)
the Approvals have not been sold, transferred or
disposed, and no third party has been granted, and
the Approvals have not been subjected to, any paid
charge, lien or security; iii) until full payment of
the Outstanding Advance (and except as set forth in
this Agreement) the Approvals will not be sold,
transferred or disposed, and no third party will be
granted, and the Approvals will not be subjected to,
any paid charge, lien or security; iv) the payments
made and to be made by APP under Paragraph 1 above
constitute adequate consideration for the security
granted hereby; v) full right and authority has been
granted, and no further approval is necessary to
grant, the security interest referred to in this
Paragraph 6; and vi) the grant of such security
interest does not conflict with any understanding or
agreement between Bigmar and any third party.
7. Guarantee. Bigmar, Inc., as the shareholder of one hundred
percent (100%) of Bigmar's outstanding stock and as signatory
to this Agreement, hereby absolutely and unconditionally
guarantees to APP and accepts responsibility for Bigmar's
obligations and compliance with all terms of this Agreement,
including without limitation the payment in full of the
indebtedness, and the payments of any and all sums which may
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at any time be or become due and payable, as and when the same
shall be due and payable, whether by lapse of time or
otherwise. The obligations of Bigmar, Inc. under this
Paragraph 7 shall not be altered, limited, or affected by any
proceeding, voluntary or involuntary, involving the
bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of its subsidiary, Bigmar, or any
defense Bigmar may have by reason of the order or decision of
any court or administrative body resulting from such
proceeding.
8. Further Documents. Bigmar agrees to provide, complete and
execute any further documents APP reasonably deems necessary
and/or advisable to secure and perfect its security and other
rights under this Agreement, including without limitation
those documents necessary for APP to formulate and perform
development of the respective products for potential
manufacture in its own facilities in the event the ANDA's are
assigned under or pursuant to this Agreement.
9. Miscellaneous.
a. Bigmar and APP are independent parties, and nothing
contained herein shall be construed to create a joint
venture, partnership or similar relationship between
them. Similarly, Bigmar, Inc. and APP are independent
parties, and nothing contained herein shall be
construed to create a joint venture, partnership or
similar relationship between them.
b. In an effort to informally and amicably resolve any
claim, controversy or dispute arising out of or
relating to this Agreement or the breach thereof, and
regardless whether such claim sounds in contract,
tort, or otherwise (a "Dispute"), each party shall
notify the other in writing of a Dispute hereunder
that requires resolution. Such notice shall set forth
the nature of the Dispute, the amount, if any,
involved and the remedy sought. Each party shall
designate a representative who shall be empowered to
investigate, discuss and seek to settle or otherwise
resolve the Dispute. If the two representatives are
unable to resolve the Dispute within thirty (30) days
after proper notification, the Dispute shall be
submitted to the most senior executive of each party
for consideration for an additional thirty (30) days.
If the Dispute remains unresolved after said sixty
(60) day period, either party shall have a right to
commence any action, suit or proceeding with respect
to such Dispute in a court of competent jurisdiction.
The venue for such action, suit or proceeding shall
be the U.S. District Court located in Delaware. No
provision or the exercise of any rights under this
Agreement shall limit or delay the right of the
parties to obtain, apply for, or resort to
court-ordered injunctive relief. Bigmar hereby waives
any rights it may have under the laws of Switzerland
or any other jurisdiction which may prevent or
otherwise affect APP rights to enforce a judgment
obtained against Bigmar under this Advance Agreement.
c. This Agreement shall inure to the benefit of, and
shall be binding upon each of, the parties hereto and
their respective successors and permitted assigns.
This Agreement may be assigned by one party (in whole
or in part) only with the prior written consent of
the other party (which shall not be unreasonably
withheld). Notwithstanding the foregoing, APP may,
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without prior consent, assign this Agreement, in
whole or in part, in connection with the merger,
acquisition or other similar transaction with respect
to all or substantially all of its stock or assets.
d. Any and all notices give pursuant to this Agreement
shall be in writing and in English, and shall be
deemed to have been properly given when delivered
personally or sent by facsimile, air courier, or
post, to the respective address shown below or such
other address as shall be specified by the party(ies)
pursuant to written notice given in accordance with
this section. Any notice shall be effective upon
receipt, which shall be deemed to occur one (1)
business day after the sending of the facsimile,
three (3) business days after the sending by air
courier, and ten (10) calendar days after the
delivery to the postal authorities in the country of
the party by which it is sent, and shall be sent:
If to Bigmar to: Bigmar Pharmaceuticals, SA
Xxx Xxxxxxxxx, 00
0000-XX Xxxxxxxx, Xxxxxxxxxxx
Attention: President
Facsimile: (00) 00-000-0000
With a copy to: Xxxxxxxx Xxxxxx LLP
0000 X Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xx Xxxxxxx
Facsimile: (000) 000-0000
If to APP to: American Pharmaceutical Partners, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
e. This Agreement may be amended, modified, superseded
or canceled, and any other of the terms or conditions
hereof may be modified, only by a written instrument
executed by both parties or, in the case of a waiver,
by the party waiving compliance. Failure of either
party at any time or times to require performance of
any provision hereof shall in no manner affect the
right of such party at a later time to enforce the
same, and no waiver of any nature, whether by conduct
or otherwise, in any one or more instances, shall be
deemed to be or considered as a further or continuing
waiver of any provision of this Agreement.
f. In the event any one or more of the agreements,
provisions or terms contained herein shall be
declared invalid, illegal or unenforceable in any
respect, the validity of the remaining agreements,
provisions or terms contained herein shall in no way
be affected, prejudiced or invalidated thereby.
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g. This Agreement contains the entire agreement between
the parties, and supersedes any agreements between
them with respect to the subject matter hereof.
h. The section headings contained in this Agreement are
for reference purposes only and shall not affect in
any way the meaning or interpretation of this
Agreement.
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IN WITNESS WHEREOF, the parties have, through their duly authorized
representatives, executed this Advance Agreement as of the respective dates
written below.
AMERICAN PHARMACEUTICAL PARTNERS, INC.
By:
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Date:
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BIGMAR PHARMACEUTICALS, SA
By: /s/
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Date: February 27, 2003
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ACKNOWLEDGED AND AGREED TO WITH RESPECT TO
PARAGRAPH 7.
BIGMAR, INC.
By: /s/Xxxx X. Xxxxxxxxxx
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Date: February 27, 2003
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