EXHIBIT 10
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
TERMINATION AGREEMENT
This Termination Agreement (the "Agreement") is entered into as of this
26th day of August, 2002 by and between Schering AG, a German corporation having
offices at 00000 Xxxxxx, Xxxxxxx ("Schering"), and DUSA Pharmaceuticals, Inc., a
New Jersey corporation, having offices at 00 Xxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000 ("DUSA").
WHEREAS, Schering and DUSA entered into that certain Marketing,
Development and Supply Agreement (the "MD&S Agreement") and that certain Light
Source Agreement (the "Light Source Agreement") each dated as of November 22,
1999; and
WHEREAS, Schering has delivered to DUSA a written notice of termination
pursuant to Section 19.3 of the MD&S Agreement which also initiates termination
of the Light Source Agreement pursuant to Section 9.1 thereof; and
WHEREAS, Schering and DUSA have agreed that the Guaranty, the Security
Agreement and the Secured Line of Credit Promissory Note, each dated November
22, 1999, are deemed void by way of a letter agreement dated September 26, 2001;
and
WHEREAS, Schering and DUSA are each now desirous of terminating the
MD&S Agreement and the Light Source Agreement on the terms and conditions as set
forth in this Termination Agreement.
NOW, THEREFORE, intending to be legally bound, and for good and
sufficient consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Notwithstanding any term, provision or condition as set forth in the
MD&S Agreement or the Light Source Agreement, the parties hereto agree that the
MD&S Agreement and the Light Source Agreement shall terminate effective
September 1, 2002 (the "Termination Date"). Except as specifically set forth in
this Agreement, the MD&S Agreement and the Light Source Agreement shall have no
further force and effect after the Termination Date. Capitalized terms that are
used in this Agreement without definition shall have the definitions that they
have in the MD&S Agreement and the Light Source Agreement.
2. In full and complete consideration for DUSA's agreement to terminate
the MD&S Agreement, the Light Source Agreement and any other agreement between
the parties in connection with Collaboration Products or the Light Source under
the terms of this Agreement, and, except as otherwise specifically set forth in
this Agreement, in full and complete payment of any monetary obligation owed to
DUSA under any term, provision or obligation of the MD&S Agreement, the Light
Source Agreement, or any other agreement between the parties in relation
thereof, Schering agrees:
(i) to complete those studies described on Attachment A hereto in
accordance with the terms and conditions of the respective
agreements governing these studies, and, unless covered by the
terms of Section 11 of this Agreement, to promptly provide to
DUSA all data and test results as soon as they are available,
as well as copies of the applicable protocols and any other
relevant information resulting from such studies. Schering
hereby conveys its ownership rights to such data and test
results to DUSA and shall cause its Affiliates to transfer its
ownership rights therein to DUSA promptly following the
Termination Date; and
(ii) to pay to DUSA Two Million Fifty Thousand Dollars ($2,050,000)
to fund any of its development activities in the following
amounts: (a) $700,000 payable within
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
ten (10) days of the Termination Date (b) $700,000 payable not
later than September 30, 2002; and (c) $650,000 payable not
later than December 31, 2002.
With the exception of the performance of those studies and the payment described
immediately above and as expressly set forth in this Agreement, the parties
acknowledge that as of the Termination Date, neither Schering or its Affiliates
shall have any obligations, financial or otherwise, with respect to the
Development Program or any other development or research activities.
3. Except as otherwise specifically set forth in this Agreement, as of
the Termination Date, Schering shall not, and shall cause its Affiliates not to,
directly or indirectly, market, sell, distribute or promote any Initial
Products. Schering specifically acknowledges that, as of the Termination Date,
all rights to market, sell, distribute, and promote Collaboration Products
(including the Initial Product) granted under the MD&S Agreement are hereby
terminated.
4. An inventory of the existing promotional materials as well as the
list of vendor contact information utilized by Schering (e.g. materials from the
[c.i.]) and by its United States Affiliate, Berlex Laboratories ("Berlex"), for
the promotion of the Initial Product in the United States and elsewhere, is set
forth on Attachment B hereto. Upon the request of DUSA made prior to the
Termination Date, Schering and/or Berlex Laboratories will promptly (but in any
event, no later than fifteen (15) days after any such request) forward to DUSA
at DUSA's cost those promotional materials so requested by DUSA, as well as the
respective film or master copies for reproduction purposes, to the extent
available. At all times after sixty (60) days of the Termination Date, DUSA
shall not use any such promotional materials unless it shall have removed,
covered or obliterated all references to Berlex and Schering contained on these
materials in such manner that the Berlex and/or Schering name is in no way
visible or recognizable. DUSA shall be free to distribute such promotional
materials as provided in this Section 4, without any claim of infringement of
any copyright or other property or intangible right of Schering related to these
materials.
5. DUSA currently maintains an inventory of Finished Products that it
obtained from Berlex on or about May 15, 2002 (Lot # 1A177; 744 cartons) and on
or about May 29, 2002 (Lot # 1B025; 851 cartons) ("DUSA's Existing Inventory").
The parties originally arranged for the delivery of DUSA's Existing Inventory to
DUSA in order for DUSA to relabel the Finished Products with an updated
expiration period, while maintaining the Berlex name on such inventory. For a
period of twelve (12) months following the Termination Date, DUSA shall be free
to distribute DUSA's Existing Inventory that contains Berlex's name or its
logo(s), trademark(s) or trade name(s) on the labels, packages or the package
inserts for such Finished Products within DUSA's Existing Inventory, provided
that such Finished Products were, in fact, relabeled by DUSA prior to the
Termination Date. The parties acknowledge and agree that the [c.i.] shall be
borne by DUSA [c.i.] DUSA's procurement of DUSA's Existing Inventory. DUSA's
indemnification of Schering and its Affiliates as provided for in Section 18 of
the MD&S Agreement and Section 12 of this Agreement is expressly applicable to
this Section with respect to potential claims brought by third parties.
6. Berlex currently maintains an inventory of twenty-four (24) lots of
Finished Product, of varying quantities and expiration dates ("Berlex Existing
Inventory"), which will be destroyed by Berlex, at its sole discretion,
following the Termination Date. If DUSA seeks all or part of Berlex's Existing
Inventory prior to its destruction, Berlex shall provide such additional
inventory to DUSA, and, in such case, DUSA shall pay Berlex the costs of
transfer as well as for
2
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
the cost of such additional inventory (to be calculated as its acquisition cost
modified by the remaining commercial life of the Finished Product). With respect
to any Finished Products within Berlex's Existing Inventory that are obtained by
DUSA under the terms of this section, DUSA shall not sell or distribute any such
Finished Products that contain Berlex's name or its or their logo(s),
trademark(s) or trade name(s) on the labels, packages or the package inserts for
such Finished Products. Schering acknowledges that DUSA has requested Lot # 1A
042, with an expiration date of 08 January 2003, containing approximately 2,808
Kerasticks as of the date hereof, pursuant to this section.
7. Promptly following the Termination Date, Schering shall, and shall
cause its Affiliates to, undertake the following:
(i) Transfer to DUSA the existing Levulan(R) PDT websites and all
related files, disks, software and all assignable rights
including, but not limited to, domain names and video clips,
pertaining thereto. The websites and related materials shall
be provided to DUSA at no charge, provided however, DUSA shall
be responsible for costs associated with such transfer and
shall reimburse Schering and its Affiliates for all out of
pocket costs and expenses incurred in connection with such
transfer and assistance. DUSA shall remove all references to
Schering and Berlex from the websites as soon as reasonably
practicable, but, in any event, no later than thirty (30) days
after the Termination Date.
(ii) Subject to any applicable confidentiality restrictions,
provide DUSA with all [c.i.] derived from the Levulan(R)
Wholesale Agreement entered into by and between Berlex
Laboratories, Inc. and [c.i.] dated September 19, 2000.
(iii) Subject to any applicable confidentiality restrictions,
provide DUSA with all existing or initiated but not yet
completed marketing data and Marketing Plans pertaining to the
use of Levulan(R) PDT for the indication actinic keratosis and
other potential indications, including but not limited to,
those plans and data associated with the broad area actinic
keratosis indication and Collaboration Products for which
Marketing Approvals have been obtained pursuant to the
Development Program. Such data shall also include results of
market research, competitive studies (e.g. [c.i.]) [c.i.].
(iv) Subject to any applicable confidentiality restrictions,
provide DUSA with compilations of all existing material
third-party agreements which shall include those specified on
Attachment A and such other agreements as agreed to by DUSA
and Berlex pertaining to the sales, marketing and distribution
of the Initial Product. Prior to the Termination Date,
Schering and Berlex will provide DUSA with the appropriate
contacts with any such contract parties, including without
limitation [c.i.], in order to facilitate the transfer to DUSA
of marketing, sales and distribution responsibilities for the
Initial Product in the United States. In addition, Berlex
shall provide to DUSA a list which identifies the [c.i.] with
Berlex with respect to the use of Levulan(R) PDT.
(v) Subject to any applicable confidentiality provisions, Schering
will provide to DUSA promptly, upon written notice, copies of
those agreements that are requested by or required to be
submitted to the FDA or other applicable
3
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
regulatory authority as part of its MAA filings. In the event
disclosure of the agreement is prohibited due to
confidentiality restrictions, Schering will use commercially
reasonable efforts to obtain such consent from the other
party. DUSA agrees that such contracts shall be used solely
for the purpose of supporting its regulatory submission.
(vi) Furnish to DUSA a copy of all written materials and
communications with regulatory bodies and the [c.i.]
concerning the establishment of [c.i.] and amounts for
Levulan(R) PDT therapy (i.e., CPT-codes, J-codes, APC
pass-through). It is expressly understood that any proposed
changes to existing [c.i.] and all other matters pertaining to
reimbursement of Levulan(R) PDT therapy [c.i.].
(vii) Provide DUSA with a copy of each submission to the FDA
pertaining to the Existing MAA and all documents related
thereto. Provide DUSA with a copy of each Marketing Approval
Application submitted to any other country pertaining to a
Collaboration Product and all documents related thereto. Such
documents shall include, but not be limited to, promotional
materials, records of telephone calls, correspondence, and
adverse event reporting.
(viii) Subject to any applicable confidentiality restrictions,
provide DUSA with a copy of all medical education materials
pertaining to the Initial Product, including but not limited
to, continuing medical education materials, white papers for
consumer use, materials for training, bibliographies, and
clinical compendia.
(ix) Subject to any applicable confidentiality restrictions,
provide DUSA with a copy of all other Data related to the
Collaboration Products, unless covered by the terms of Section
11 of this Agreement (i.e., [c.i.]), and return all
Confidential Information at DUSA's cost pursuant to Section
19.4.5 of the MD&S Agreement.
8. Berlex agrees that it shall not terminate its Consultation Agreement
with BestMed, dated January 7, 2002, concerning presentations to be given at the
SDEF H&H Dermatology Seminar to be held September 11-15, 2002 ("Seminar").
Berlex agrees to allow DUSA to sponsor one (1) presentation slot during the
Seminar, for which DUSA shall reimburse Berlex for the costs of the speaker fee
and other actual expenses associated with the speaker's attendance. DUSA shall
pay to Berlex the amount of reimbursement not later than fifteen (15) days
following the conclusion of the Seminar.
9. DUSA shall be responsible for reporting all adverse drug reactions
and events to the appropriate regulatory authorities in which such Collaboration
Product is being developed or commercialized, in accordance with appropriate
laws and regulations of the relevant countries and authorities as of the
Termination Date. During the thirty (30) day period following the Termination
Date, Berlex will continue to provide coding and data entry services, if
requested by DUSA. This period may be extended for an additional thirty (30) day
period upon mutual agreement of the parties. Schering, or Berlex, as the case
may be, shall promptly forward to DUSA all relevant suspected adverse event data
that it receives or becomes aware of after the Termination Date. DUSA shall have
a dedicated fax line solely for this purpose for a reasonable period of time
following the Termination Date, but in any case, for not less than eighteen (18)
months following the Termination Date.
10. Schering has filed MAA's with respect to the Initial Product in the
following countries: Austria (basis for the mutual recognition procedure in
Europe), Australia, South Africa
4
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
and Brazil. Schering shall take the necessary actions to facilitate the transfer
of the MAA's to DUSA or the withdrawal of any MAA if so requested by DUSA, and
shall provide reasonable assistance to DUSA in order for DUSA to continue with
the respective registration processes, for a period of sixty (60) days following
the Termination Date. At the request of DUSA, Schering has filed a request with
the regulatory authorities of Australia to withdraw the MAA that has been
submitted in that jurisdiction. Commencing on the Termination Date, DUSA shall
be solely responsible for the preparation and filing of all MAA's and related
amendments and supplements, including without limitation continuation of the
registration process with respect to the MAA's referred to above. It is
expressly understood that in no event shall Schering be obligated to file any
additional MAA's, initiate, continue or conduct any studies associated with the
registration processes of such XXXx or initiate or continue product launch
activities, and that its sole responsibility shall be to provide reasonable
assistance to DUSA and to complete the assignment of all XXXx as described
herein.
11. Schering has developed and invented [c.i.] and [c.i.] for use with
[c.i.]. Schering represents that there are no other Schering Inventions or Joint
Inventions made in connection with the Development Program. DUSA acknowledges
that such developments and inventions were made solely by Schering personnel.
The parties agree that all rights and title to any inventions, discoveries and
other intellectual property made solely by Schering personnel in connection with
the Development Program shall be the sole property of Schering and Schering
shall be under no obligation to account to DUSA for any fees or profits
resulting therefrom. DUSA shall have a right of first refusal to any such
inventions for use with [c.i.] within the Field in the event that Schering
determines to grant a license to any such inventions. Upon notice by Schering to
DUSA of its interest in licensing such invention for use of [c.i.] within the
Field, the parties will enter good faith negotiations for a period of sixty (60)
days. In the event the parties do not consummate an agreement as to such rights
within the sixty (60) day time limit, then Schering shall have the right to
enter into negotiations with third parties on terms no less favorable than those
being negotiated with DUSA.
12. Except as otherwise specifically provided in this Agreement, in so
terminating the MD&S Agreement and the Light Source Agreement, the parties
hereto respectively release and forever discharge each other, as well as the
other's respective Affiliates, from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and expenses of
any nature whatsoever, known and unknown, suspected or unsuspected, foreseen or
unforeseen, matured or unmatured, ("Losses") which, from the beginning of the
world up to and including the Termination Date, exist, have existed, or may
arise from any claims arising out of or in any way related to the MD&S Agreement
and the Light Source Agreement, or any of the other Agreements referred to in
Section 20.15 (Entire Agreement) of the MD&S Agreement as such other Agreements
may pertain to the rights and/or obligations of each of the parties, or any of
their respective Affiliates provided, however, that such release shall not apply
with respect to willful misconduct or bad faith in connection with regulatory
matters, patent related claims or Losses; and further provided that such release
shall not pertain to any obligation of the parties under this Agreement. Such
release and discharge are expressly subject to the terms of Section 13 of this
Agreement, with respect to the survivability of the third party indemnification
provisions of the MD&S Agreement.
13. The terms and conditions of Article 1 (Definitions); Article 17
(Confidentiality); Article 18 (Indemnification), to the extent that liabilities
arise from claims brought by third parties; and Section 20.11 (Publicity Review)
of the MD&S Agreement and Article 1 (Definitions; and Section 10.10 (Publicity)
of the Light Source Agreement shall specifically survive the termination thereof
pursuant to their terms.
5
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
14. Each party represents and warrants to the other that it has the
full right and authority to enter into this Agreement, and that it is not aware
of any legal impediment that would inhibit its ability to perform its
obligations under this Agreement.
15. Miscellaneous:
(a) This Agreement shall be governed, construed, and enforced and the
rights of the parties determined, in accordance with the laws of the State of
New York, without reference to conflicts of laws principles.
(b) If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, such invalidity shall not affect the
validity of any of the remaining provisions hereof.
(c) This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof. This Agreement may only be
modified in a writing signed by a duly authorized representative of each of the
parties.
(d) All notices and other communications under this Agreement 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):
(i) if to Schering, to:
Xxxxxxxx XX
X-00000
Xxxxxx, Xxxxxxx
Telephone: 011-49-30- 468 18910
Facsimile: 011-49-30- 468 18912
Attention: Xxxxx Xxxxxx
with a copy to:
Berlex Laboratories, Inc.
Xxxx Xxxxxx Xxx 0000
000 Xxxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
(ii)if to DUSA, to:
DUSA Pharmaceuticals, Inc.
00 Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000)000-0000
Facsimile: (000)000-0000
Attention: D. Xxxxxxxx Xxxxxxx
6
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
with a copy to:
Xxxx Xxxxx LLP
Princeton Xxxxxxxxx Village
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
(e) 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 parties.
(f) 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.
(g) The Attachments specifically referred to herein, and delivered
pursuant hereto, are an integral part of this Agreement.
[THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]
7
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date and year first
above written.
SCHERING AKTIENGESELLSCHAFT
By: /s/ Xxxxx Xxxxxx
-------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director, Center of Dermatology
By: /s/ Xx. Xxxxxxx Xxxxxx
-------------------------
Name: Xx. Xxxxxxx Xxxxxx
Title: Corporate Project Management, Center of Dermatology
DUSA PHARMACEUTICALS, INC.
By: /s/ D. Xxxxxxxx Xxxxxxx
-------------------------
Name: D. Xxxxxxxx Xxxxxxx, M.D., FRCPC
Title: President and Chief Executive Officer
8
EXHIBIT 10
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
ATTACHMENT A
[c.i]
EXHIBIT 10
Note: Certain portions of this document have been marked "[c.i.]" to indicate
that confidential treatment has been requested for this confidential
information. The confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.
ATTACHMENT B
[c.i.]
