CONFIDENTIAL MATERIAL OMMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMMISSIONS.
July 22,1999
Xx. Xxxxxx X. Xxxx
President and Chief Executive Officer
Kos Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxx Xxxxx, 00xx Xxxxx
Miami, FL 33131
Re: CO-PROMOTION COLLABORATION
--------------------------
Dear Xx. Xxxx:
This letter sets forth terms and conditions by which Kos
Pharmaceuticals, Inc. ("Kos"), and Xxxxx Pharmaceutical Company ("Xxxxx") shall
participate in a Co-Promotion Collaboration (the "Agreement") for the promotion
and marketing of Xxxxx'x Mavik/registered mark/ (trandolapril) and
Tarka/registered mark/ (trandolapril/verapamil hydrochloride ER) tablets
(collectively, the "Products").
1. PURPOSE, DESIGNATION AND TERRITORY
a. Purpose
Xxxxx and Kos desire to enter this Agreement to work
cooperatively in the United States, its territories and its
possessions (hereinafter the "Territory") to (i) develop
marketing and sales strategies for the Products, (ii) prepare
promotional and sales materials for the Products, (iii) market
and promote the Products, (iv) educate healthcare providers
regarding the Products, (v) furnish physician support with
respect to the use of the Products, (vi) represent the
Products at conventions and conferences, (vii) maintain
relationships with key thought leaders to maximize Product
awareness, (viii) provide administrative support for the
marketing and distribution of the Products, and (ix) conduct
any other activities necessary or appropriate for the
promotion of the Products (collectively, the "Collaboration
Objectives"). By leveraging their respective organizational
strengths, the parties intend to build a creative, synergistic
and cost-effective program for the successful promotion and
sale of the Products. The parties shall seek to achieve the
Collaboration Objectives in accordance with a marketing plan
for the Products which shall include the objectives,
strategies, and financial targets and the tactics
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necessary for the parties to achieve such financial targets
(collectively, the "Marketing Plan").
b. Designation
Xxxxx hereby designates Kos, and Kos hereby accepts such
designation, as Xxxxx'x exclusive co-promoter for the
marketing and sale of the Products and
****************************************************** within
the Territory. Kos' designation as co-promoter shall not
restrict Xxxxx'x right to promote and sell the Products in the
Territory
during the term of this Agreement.
2. COLLABORATION MANAGEMENT
a. Marketing Committee
Kos and Xxxxx shall form a marketing committee (the "Marketing
Committee"), which shall be responsible for the ongoing
management of the collaboration and achievement of the
Collaboration Objectives. The Marketing Committee shall be
chaired by *******************. The Marketing Committee shall
consist of a core membership of three to four representatives
from Kos and Xxxxx respectively, including the Marketing or
Product Manager from each company. The attendance of AD HOC
representatives or invitees may be necessary on a regular or
temporary basis. The parties shall bear their own expenses in
connection with attending Marketing Committee meetings.
The Marketing Committee shall meet periodically, but no less
than three (3) times per calendar year, at dates, times and
locations mutually agreeable to the parties. Meetings of the
Marketing Committee may be conducted in person, or by video-
or tele-conference.
It is the intention of the Parties that the Marketing
Committee shall seek to reach consensus on major issues
related to the Marketing Plan and its execution. All marketing
disputes shall be resolved by the ******** chairperson.
The Marketing Committee shall be responsible for (i) approving
the Marketing Plan and financial targets for the Products;
(ii) establishing and implementing policies, programs, and
procedures; (iii) developing and monitoring the performance
metrics related to the Marketing Plan, including without
limitation, sales, prescriptions, pricing, expenses, call
plan, professional education programs, etc.; and (iv)
accounting for all expenses by each party and reporting such
information pursuant to the terms of the Agreement.
The Marketing Committee shall work diligently to manage all
expenses, including the cost of samples, in a cost-effective
manner.
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b. Product Rights
Except for the co-promotion rights provided to Kos hereunder,
all patent, intellectual, brand, distribution and other rights
relating to the Products shall be and are hereby retained by
Xxxxx.
3. XXXXX DUTIES AND RESPONSIBILITIES
a. General
Xxxxx shall be responsible for activities necessary to
commercialize the Products, including without limitation,
maintaining all regulatory approvals, manufacturing the
Products in accordance with FDA approved specifications,
managing the Products' order fulfillment process, handling all
post-sale compliance and reporting obligations, and receiving
and addressing all medical inquiries.
b. Promotion and Marketing
In accordance with the Marketing Plan, Xxxxx shall devote its
resources to promote and market the Products in the Territory.
As part of this effort and in accordance with the Marketing
Plan, Xxxxx, *****************, shall not do less than the
following:
(1) Maintain a Marketing Manager for the Products who shall
serve as a member of the Marketing Committee, be responsible
for and dedicated to the promotional and marketing activities
of the Products at the direction of the Marketing Committee,
develop the Marketing Plan, and act as the primary contact for
Xxxxx'x product marketing group. The Marketing Manager shall
assure the development of the Marketing Plan in sufficient
time as to permit its review and approval by the Marketing
Committee by ******************** of each calendar year during
any part of which the Agreement shall be in effect (an
"Agreement Year"). For the 1999 Agreement Year, Xxxxx will
develop and submit to Kos a launch plan by July 23, 1999.
(2) Develop and co-ordinate professional education
initiatives, including development of strategy, identifying
and training faculty, providing logistical support, sponsoring
symposia and publications, and other related duties and
responsibilities set out in the Marketing Plan.
(3) As part of Xxxxx'x responsibility to seek reimbursement
for the Products, continue to include the Products in the
promotional efforts of its Account Executives, and to develop
and implement contracting strategies to encourage formulary
acceptance.
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(4) Appoint such other persons as may be necessary to fulfill
Xxxxx'x obligations under the Marketing Plan.
(5) Pursuant to the direction of the Marketing Committee, fund
and manage the identified promotional and educational programs
and agencies utilized to execute marketing programs,
educational programs, and other tactical sales and marketing
initiatives agreed upon in the Marketing Plan. Funding by
Xxxxx for such programs and initiatives shall be, on an annual
basis, ******************************************************.
(6) Actively and fully participate, as specified in the
Marketing Plan, in the promotion, marketing, education,
advertising, planning and sales activities necessary to
distribute and sell the Products.
(7) Provide initial Product training, including personnel and
materials, to Kos at its national sales training meeting, and
thereafter provide training materials and technical support as
such relates to the promotion of the Products to enable Kos to
maintain the ongoing training of its personnel.
c. Product Support
As part of Xxxxx'x commercialization and promotional duties,
Xxxxx shall be responsible for the following:
(1) Packaging, labeling, warehousing and distributing the
Products.
(2) Using reasonable commercial efforts to maintain inventory
at sufficient levels to assure timely delivery of Products.
(3) Accepting orders, invoicing distributors or customers,
handling reimbursement matters and supervising collection
activities.
(4) Providing customer service activities, furnishing medical
information services, and satisfying all regulatory filing
requirements.
(5) Seeking reimbursement for the Products.
d. Product Pricing and Terms
Kos and Xxxxx will collaborate on the pricing and terms of
sale for the Products. Xxxxx shall give due consideration to
Kos' input; but Xxxxx shall retain, in all instances, sole
discretion in establishing the Products' price, and policies
with respect to sales terms.
4. KOS DUTIES AND RESPONSIBILITIES
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a. General
Kos shall establish the promotion and marketing of the
Products in the Territory as an important corporate priority,
and Kos shall devote its resources to promote and market the
Products in the Territory in accordance with the Marketing
Plan.
b. Promotion and Marketing
As part of Kos' promotion and marketing obligation, and in
accordance with the Marketing Plan, Kos,
*********************************, shall not do less than the
following:
(1) Appoint a Marketing Manager for the Products who shall
serve as a member of the Marketing Committee, be responsible
for and dedicated to the Products' promotional and marketing
activities at the direction of the Marketing Committee, and
act as the primary contact to Xxxxx'x product marketing group.
(2) Appoint such other persons as may be necessary to fulfill
Kos' obligations under the Marketing Plan, including but not
limited to implementing, through the use of its personal
promotion efforts, the professional education and managed care
pull through initiatives developed and coordinated by Xxxxx,
as specified in the Marketing Plan.
(3) Maintain and train adequate sales representation in the
Territory to promote the Products and to execute the Sales
Call Plan established at paragraph 4(c) herein, and develop
and implement a sales compensation system, the elements of
which will be determined in ************ sole discretion. Such
sales compensation system shall be appropriately and
sufficiently weighted as to be consistent with and supportive
of Kos' obligations under the Agreement.
(4) Furnish sufficient training so that each Kos sales
representative which makes a Product Call is trained and
knowledgeable regarding the Products.
(5) Maintain a material presence and prominently promote the
Products at the conferences and meetings in the Territory
which Xxx plans to attend in accordance with the Marketing
Plan. For those conferences and meetings which Kos will not
attend, to the extent determined by the Marketing Committee,
Kos shall provide personnel to assist Xxxxx.
c. Sales Call Plan
(1) During each Agreement Year, in addition to any sales calls
Xxxxx may make, Kos shall make a minimum of ***********
primary details, ************** of which shall be to
****************************************** as defined by
Xxxxx, and the
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remaining primary details shall be determined by applying the
"Methodology for Defining Targeted Prescribers" set forth in
Attachment B, which is attached hereto and incorporated
herein. In Agreement Years 1999 and 2004, the number of
primary details shall be prorated to reflect the number of
months in each such Agreement Year. By way of example, if Kos
commences promotion effective on August 1, 1999, Kos shall be
responsible to make 5/12th of **************** primary details
for the 1999 Agreement Year. In the 2004 Agreement Year, Kos
shall be responsible to make 6/12th of *****************
primary details.
A "primary detail" shall mean a completed sales presentation
(as generally understood throughout the Pharmaceutical
industry) of either Mavik or Tarka occupying at least ******of
the detail time and emphasis, and shall not include sample
drops.
(2) Kos shall be solely responsible for all costs associated
with the management of its sales representatives, including,
without limitation, all salaries, benefits, commissions,
bonuses and incentive compensation, travel and entertainment,
training and meeting costs, automobiles and related expenses,
and all other costs associated with maintaining a sales force
such as *****************************************************.
5. PAYMENTS AND COMMISSIONS
a. Compensation to Kos
(1) Xxxxx shall book all sales of the Products, and shall
compensate Kos based on the combined Commissionable Revenues
for each Product pursuant to the commission schedule
("Commission Schedule") set out in Attachment A, which is
attached hereto and incorporated herein. The Commissionable
Revenues for each Product shall be defined as:
******************************************************
Kos shall purchase ************************* data for each
Product. The Annual Multiplier shall be as follows:
AGREEMENT YEAR ANNUAL MULTIPLIER
1999 ****
2000 ****
2001 ****
2002 ****
2003 ****
2004 ****
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Xxxxx will track the performance of the Products at
the end of each quarter of each Agreement Year, and will
annualize Commissionable Revenues for the Agreement Year based
upon actual Commissionable Revenues year to date (the
"Projected Annualized Sales"). At the conclusion of, and
within thirty (30) days of the availability of the
******************* for, each of the first three (3) quarters
of an Agreement Year, Xxxxx shall determine the amount to be
paid to Kos (the "Compensation") by applying the Commission
Schedule to the Projected Annualized Sales. For the second and
third quarters of any Agreement Year, Xxxxx shall adjust the
Compensation to reflect any increase or decrease in Projected
Annualized Sales from the previous quarter. Attachment A sets
forth examples of the application of the Compensation Schedule
to Projected Annualized Sales. Within thirty (30) days of
receipt of the ********************* following the end of an
Agreement Year, Xxxxx shall pay to Kos, or Kos reimburse
Xxxxx, the difference between the compensation due on the
actual Commissionable Revenues for that Agreement Year and the
Compensation the Commission Schedule to the Projected
Annualized Sales that shall have been paid to Kos over the
previous three quarters of such Agreement Year.
(2) For the 1999 Agreement Year, Xxxxx shall compensate Kos at
the end of the third quarter based on Projected Annualized
Sales of the year and at the end of 1999 based on actual
Commissionable Revenues for the full Agreement Year.
(3) Notwithstanding anything to the contrary in Section
5.a.(1) hereinabove, for the Agreement Year 2004, Xxxxx shall
compensate Kos an amount determined by applying the
Compensation Schedule to the product of ****************** the
actual Commissionable Revenues for the Products through
***************** and dividing the resultant amount by *****
to reflect Xxx' participation for 6/12th of the 2004 Agreement
Year. There shall be no further reconciliation of the amount
of compensation made to Kos.
(4) In the event that Xxxxx substantially increases its amount
of personal promotion or substantially decreases its managed
care initiatives beyond current levels, the parties shall
negotiate in good faith a revised compensation structure to
reflect the changes in promotional efforts by Xxxxx.
(5) Kos acknowledges and agrees that it shall be solely
responsible for paying the appropriate amount of any and all
federal, state, and local taxes with respect to all
compensation paid pursuant to this Agreement, and that Xxxxx
shall have no responsibility whatsoever for withholding or
paying any such taxes for or on behalf of Kos.
b. "Net Sales" shall mean the gross invoiced sales for the
Products sold or otherwise disposed of in an arm's length
transaction to a third party, minus the sum of
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**************************************************************
******.
c. Expenses
Each party shall bear its own expenses for performing its
obligations and conducting its activities as required under
the Agreement, subject to 5(d) hereinbelow.
d. Advertising & Promotion/Samples
Kos shall support the Advertising and Promotional (A&P) effort
by contributing to the purchase of product samples in the
following minimum amounts in each year of the Term of the
agreement:
1999 ******************
2000 ******************
2001 ******************
2002 ******************
2003 ******************
2004 ******************
Samples shall be ordered no less than ********* in advance. A
***** rolling forecast for samples shall be established, with
the first ******** forecast being firm, and the *************
being a good faith estimate by the Marketing Committee of its
anticipated needs. The price to be paid by Kos for samples of
the Products shall be ****************. Samples will be
shipped F.O.B. to a location of Kos' choice, and shall
*********************.
In the event Kos' contribution in any Agreement Year exceeds
the sample expenditure as determined by the Marketing
Committee, the excess dollars shall be applied to
************************* by the Marketing Committee. In the
event Kos' sample purchase in any Agreement Year exceeds the
A&P contribution amount designated hereinabove for such
Agreement Year, Kos shall be permitted to apply such excess
A&P contribution, up to a *********************** of the
following Agreement Year's designated A&P contribution amount,
to such following Agreement Year.
For the 1999 Agreement Year, Kos shall be permitted to apply
toward its required A&P contribution up to ************ of the
direct costs and expenses (including basic hotel room and
associated taxes and group meals, for Xxxxx attendees, but
excluding their incidental expenses) incurred to conduct a
national sales training meeting on the Products.
e. Right to Audit
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(1) During the Term of this Agreement and for one (1) year
thereafter, (a) Kos shall have the right, at its expense, to
have audited Xxxxx'x records for the sole purpose of
confirming Xxxxx'x A&P expenditures for the Products, and
Xxxxx'x calculation of Commissionable Revenues and (b) Xxxxx
shall have the right, at its expense, to have audited Kos'
records for the sole purpose of confirming Kos' sales force
activity for the promotion of the Products, and Kos' A&P
expenditure for the Products, other than for samples.
(2) Such audits shall be limited to not more than once in any
calendar year and shall be further limited in scope to the
year immediately last past.
(3) Such audits shall be conducted by an independent auditing
or accounting firm chosen by the auditing party and agreed to
by the audited party, such agreement not to be unreasonably
withheld.
6. DISPUTE RESOLUTION
a. Internal Review
The ************ chairperson shall
****************************. Any other matter that can not be
resolved by the Marketing Committee, including any disputes or
claims arising out of the Agreement, shall be submitted for
resolution to the Presidents of Kos and Xxxxx respectively, or
their designees.
b. Judicial Recourse
If a matter or dispute can not be resolved by the Presidents
of Kos and Xxxxx within thirty (30) days, either party shall
have the right to seek any and all remedies available at law
or in equity.
7. TERM AND TERMINATION
a. Term
The initial term of the Agreement shall commence on the date
this Agreement shall have been signed by both parties and
shall expire on June 30, 2004, unless terminated earlier
pursuant to the Agreement (the "Term"). Promotion of the
Products by Kos shall commence during the first week of
August, 1999.
b. Renewal
With the mutual written consent of Xxxxx and Kos, the
Agreement may be extended for one or more additional years.
If, at the end of the initial Term, Xxxxx
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or Kos chose not to extend the Term, the Agreement shall
terminate automatically and without penalty.
c. Termination
(1) Kos or Xxxxx shall have the right to terminate the
Agreement upon the occurrence of any of the following events:
(i) the other party commits a material breach of the
Agreement, and such breach is not cured within thirty (30)
days following receipt of notice thereof; (ii) the bankruptcy
or insolvency, or the making or seeking to make or arrange an
assignment for the benefit of creditors of the other party; or
initiation of proceedings in voluntary or involuntary
bankruptcy, or the appointment of a receiver or trustee of
such party's property which is not discharged within ninety
(90) days, (iii) the FDA withdraws marketing approval for one
or both Products; (iv) any merger, or consolidation with, or
sale to a third party of the businesses to which this
Agreement relates by either party; or (v) pursuant to 7(d)
hereinbelow.
(2) Xxxxx shall have the right to terminate the Agreement if
unforeseen clinically significant safety and/or efficacy
issues materially affecting either of the Products' sales
become known.
d. Minimum Sales
The parties hereby establish that the combined Commissionable
Revenue target for the Products for the year 2000 is
*********** dollars ****************. If Kos promotes in good
faith the Products in accordance with the Marketing Plan
approved by the Marketing Committee, and the Commissionable
Revenue for calendar year 2000 shall be less than ************
of such Commissionable Revenue target, either party may
terminate the Agreement by written notice no later than
************. Upon the receipt of a notice of termination
under this Section 7(d), the non-terminating party shall by
notice to the terminating party be entitled to require the
terminating party to continue its performance under the
Agreement for a period not to exceed 90 days.
e. The parties agree that, in the event in any Agreement Year
after the year 2000, the combined Commissionable Revenue for
the Products does not exceed
*************************************, and provided Kos shall
have promoted the Products in good faith and in accordance
with the Marketing Plan approved by the Marketing Committee,
Kos shall be permitted to terminate the Agreement by written
notice to be delivered no later than ********* of the
following Agreement Year.
f. In the event of early termination other than for a material
breach of the Agreement by Kos, Kos shall be compensated in an
amount calculated by applying the rate of compensation set
forth in Attachment A to the prorated (up to the effective
date of
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termination) Projected Annualized Sales at the time of
termination. There shall be no further reconciliation of the
amount of compensation so made thereafter.
g. Upon termination of this Agreement, Kos shall return to Xxxxx
all product samples, sales and promotional and communication
materials, marketing plans and reports and other tangible
items provided to Kos by Xxxxx pursuant to the terms and
intent of this Agreement. In the event Kos terminates the
Agreement pursuant to Section 7.c(1)(i) hereinabove, or either
party terminates the Agreement pursuant to Section 7.c(1)(iii)
or Section 7.c(2) hereinabove, Xxxxx shall reimburse Kos the
actual cost paid to Xxxxx of all samples of the Product(s) in
Kos' possession as of the effective date of termination.
8. REGULATORY MATTERS
a. All regulatory matters in the Territory regarding the Products
shall remain under the exclusive control of Xxxxx.
b. Kos shall not without the consent of Xxxxx, unless so required
by law, correspond or communicate with the FDA or with any
other governmental authority, concerning the Products, or
otherwise take any action concerning any authorization or
permission under which any of the Products are sold. Kos shall
provide to Xxxxx, upon receipt, copies of any communication
from the FDA or other governmental authority related to the
Products. If Kos is advised in writing by its counsel that it
must communicate with the FDA or other governmental authority,
then Kos shall so advise Xxxxx and Kos shall if the law
permits comply with any and all reasonable direction of Xxxxx
concerning any meeting or communication with the FDA or other
governmental authority.
c. Contemporaneously with the execution of this Agreement, the
parties shall execute the Adverse Event Processing and
Exchange Agreement ("AE Agreement"), attached hereto and
incorporated herein as Attachment C.
d. In addition to the AE Agreement's requirements with respect to
the safety and efficacy of the Products, each party shall
inform the other party of any Product Quality complaint
received. A Product Quality Complaint shall be defined as any
complaint that questions the purity, identity, potency or
quality of the Products, or either one of them, their
packaging or labeling.
e. Each party further agrees to promptly notify the other party
of any and all events that could affect the marketing of the
Products, including, without limitation, any notification or
other information which it receives (directly or indirectly)
from the FDA or any other governmental authority, any
information on new or existing products competitive to the
Products, or any information which indicates or suggests
potential for liability arising from the marketing or sale of
the Products.
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f. Each party agrees to immediately notify the other party
telephonically, followed by a writing, of any order, request
or directive of a court or other governmental authority to
recall or withdraw the Products in any jurisdiction. Xxxxx
shall be responsible, at its sole cost and expense, for the
costs of any recall or withdrawal of the Products not caused
by the negligence or willful misconduct of Kos.
9. FORCE MAJEURE
Neither party shall be held liable or responsible to the other party
nor be deemed in default under this Agreement for failure or delay in
fulfilling or performing any term of this Agreement when such failure
or delay is caused by or results from causes beyond the reasonable
control of the affected party, including without limitation fire,
floods, embargoes, war, acts of war ( whether war is declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting
by any governmental authority, unless due to a violation by the
non-performing party hereto; provided, however, the party so affected
shall use commercially reasonable and diligent efforts to avoid or
remove such causes of non-performance, and shall continue performance
hereunder with reasonable dispatch whenever such causes are removed.
Each party shall provide the other party with prompt written notice of
any delay or failure to perform that occurs by reason of force majeure.
The parties shall mutually seek a resolution of the delay or the
failure to perform as noted above, provided that if no resolution is
achieved that is reasonably acceptable to the party not relying on this
provision within six months of delivery of the aforementioned written
notice, such party may terminate this Agreement upon written notice to
the other.
10. ASSIGNMENT
Neither party shall assign or transfer its rights or obligations under
this Agreement without the prior written consent of the other party,
except (i) to an affiliate, or (ii) in connection with a merger, or
consolidation with, or the sale to a third party of the businesses to
which the Agreement relates.
11. REPRESENTATIONS AND WARRANTIES
x. Xxxxx represents and warrants that, as of the Effective Date
of this Agreement:
(1) to the best of its knowledge, Kos' promotion or marketing
of the Product(s) under this Agreement shall not infringe the
patent, trade secret or other proprietary rights of any third
party;
(2) it owns or is the licensee in good standing of the
Product(s);
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(3) it has received no notice of infringement or
misappropriation of any alleged rights asserted by any third
party in relation to any technology used in connection with
the manufacture, use or sale of Product(s);
(4) it is not in default with respect to any license agreement
necessary for it to comply with the Agreement;
(5) it is not aware of any patent, know-how, trade secret, or
other right of any third party which could reasonably be
expected to materially adversely affect its ability to carry
out its responsibilities under this Agreement or the
manufacture, use or sale of Product(s), or Kos right to
exploit any right granted to it under this Agreement;
(6) it has the right and requisite authority, including
without limitation, all governmental, shareholder, and other
approvals, to enter into this Agreement;
(7) it is not aware of, and it has no reason to believe that
it will experience, any material unusual or other circumstance
out of the normal course of business that will adversely
affect, with respect to the Products, the (i) freight, transit
insurance and transportation cost, (ii) trade or cash
discounts, quantity discounts, rebates, chargebacks, and other
price reduction programs, (iii) sales returns and allowances,
bad debts or rejections, (iv) sales, value-added and other
direct taxes, (v) import and export duties or tariffs, or (vi)
sample cost. Further, Xxxxx accounts and will continue to
account for its provision for items (i) through (vi) above in
accordance with U.S. generally accepted accounting principles,
applied in a consistent manner from period to period; and
(8) there have not been in the years 1997, 1998, and up to May
1999 Provider Perspective prescriptions greater than
**************** for either of the Products.
b. Kos represents and warrants that, as of the Effective date of
the Agreement
(1) it has the right and requisite authority, including
without limitation, all governmental, shareholder, and other
approvals, to enter into this Agreement;
(2) it is not a party to any agreement nor is it aware of any
fact or any future event that shall prevent or limit in any
way Kos' ability to perform its duties and obligations under
the Agreement; and
(3) it neither has in development nor plans to develop any
product which shall compete with the Products.
c. Kos further represents and covenants that:
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(1) Kos shall be in compliance with all laws and regulations
applicable to the subject matter of this Agreement, including,
without limitation, the Federal Food, Drug, and Cosmetic Act
and the Prescription Drug Marketing Act;
(2) the services to be performed by Xxx hereunder will be
performed only by individuals who are employees of Kos, and
such services will involve the promotion of the Products in a
manner consistent with their approved labeling and the
materials approved by the Marketing Committee;
(3) Kos has a written statement of policies and procedures for
adherence with federal and state statutes;
(4) each employee of Kos who will provide services hereunder
has access to the aforementioned written statement and
receives training with respect thereto including the
importance of strict adherence; and
(5) it shall not represent to any third party that it has any
proprietary or property right or interest in the Products, or
in any patent relating thereto, or in any trademark used in
connection therewith.
12. INDEMNIFICATION/INSURANCE
x. Xxxxx agrees to indemnify, defend, and hold Kos harmless from
and against any third party claims arising out of (i)
manufacturing or labeling of the Products, (ii) the use of the
Products, (iii) any FDA or other governmental requirements,
unless such claims arise from the negligence or willful act or
omission of Kos, (iv) any negligent act or omission, or any
willful wrongdoing by Xxxxx in the performance of the
Agreement, (v) the breach of any representation or warranty of
Xxxxx. Xxxxx further agrees to indemnify, defend and hold Kos
harmless from and against any claim of patent, copyright,
trademark, or trade secret infringement or misappropriation in
connection with Kos' marketing or promotion of the Products
under the terms of this Agreement, pursuant to the Marketing
Plan, and in conformity with the direction of the Marketing
Committee.
b. Kos agrees to indemnify, defend, and hold Xxxxx harmless from
and against third party claims arising out of (i) any
negligent act or omission, or willful wrongdoing by Kos in the
performance of the Agreement, (ii) the failure by Kos to
comply with any FDA or other governmental requirement, (iii)
the infringement or misappropriation by Kos of any patent,
copyright, trademark, or trade secret, wherein such claim is
based on Kos' marketing or promotion of the Products which is
not pursuant to the terms of this Agreement, the Marketing
Plan, or to the direction of the Marketing Committee, and (iv)
the breach of any representation or warranty of Kos.
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c. The obligations to indemnify, defend, and hold harmless set
forth in Paragraphs 12(a) and 12(b) shall be contingent upon
the party seeking indemnification (the "Indemnitee"): (1)
notifying the indemnifying party of a claim, demand or suit
within five (5) business days of receipt of same; provided,
however, that Indemnitee's failure or delay in providing such
notice shall not relieve the indemnifying party of its
indemnification obligation except to the extent the
indemnifying party is prejudiced thereby; (2) allowing the
indemnifying party and/or its insurers the right to assume
direction and control of the defense of any such claim, demand
or suit; (3) using its best efforts to co-operate with the
indemnifying party and/or its insurers in the defense of such
claim, demand or suit; and (4) agreeing not to settle or
compromise any claim, demand or suit without prior written
authorization of the indemnifying party.
d. During the term of this Agreement, Kos shall obtain and
maintain, at its sole expense, General Liability, including
Advertising Injury Liability, Insurance with a minimum limit
of liability of ******************* per occurrence naming
Xxxxx as an additional named insured. Evidence of coverage, in
the form of certificates of insurance, shall be provided at
the inception of this Agreement and as reasonably requested
thereafter. Such certificates shall provide for written notice
to Xxxxx thirty (30) days prior to any material change,
cancellation or non-renewal of the policy.
During the term of this Agreement, Xxxxx shall maintain
insurance policies of the types and minimum insurance coverage
indicated below. All such policies will be primary in the
event of a loss arising out of performance under this
Agreement and shall provide that where there is more than one
insured, the policy will operate, except for the limits of
liability, as if there were a separate policy covering each
insured. Within 30 days of the date hereof, Xxxxx will furnish
Kos certificates of insurance evidencing the minimum insurance
coverage and limits specified below. Such certificates shall
name Kos an additional insured, as it's interests may appear
hereunder, and provide that at least 30 days written notice
will endeavor to be given to Kos prior to cancellation,
material modification or non-renewal of any of the terms of
coverage of any policy.
Commercial General Liability Combined Single
Insurance (including Contractual, Limit of Liability-
Products, and Advertising ****************
Legal Liability) per occurrence
13. CONFIDENTIALITY
a. During the Term of the Agreement, each party may come into
possession of certain proprietary information, relating to the
subject matter of this Agreement, which is owned by the other
Party ("Confidential Information"). The Parties agree
15
that the receiving Party shall not disclose or use such
Confidential Information, except as expressly provided in this
Agreement and to exercise rights granted under this Agreement,
without the prior written consent of the disclosing Party at
any time during the Term of this Agreement and for a period of
seven (7) years thereafter. A receiving party shall be
permitted to disclose Confidential Information of the
disclosing Party to its employees, agents, or contractors who
need to know such information to perform the receiving Party's
obligations hereunder.
b. The following shall be exceptions to the mutual
confidentiality obligations set forth in 9(f)(1) above:
(1) The obligation to maintain in confidence all Confidential
Information shall survive the termination of the Agreement,
but a receiving Party shall be permitted to disclose
Confidential Information to the extent the receiving Party is
required by law to do so, provided notice of such disclosure
shall be given promptly to the disclosing Party and reasonable
actions shall be taken to avoid and/or minimize the extent of
such disclosure.
(2) Confidential Information shall not include any
information: (a) which was known to the receiving party at or
prior to the date of this Agreement or the previously executed
Confidentiality Agreements dated December 8, 1997 and January
11, 1999; (b) which becomes lawfully known to the receiving
Party without any obligation of confidentiality; or (c) which
becomes known to the general public through no fault of the
receiving Party.
c. Subject to any law or regulation to the contrary, the terms of
this Agreement shall be held in confidence for a period
of seven (7) years following termination or expiration of
this Agreement or any renewal thereof.
14. MISCELLANEOUS
a. Non-Compete
During the Term of the Agreement and for one (1) year
thereafter, Kos shall not promote, market or sell in the
Territory any
********************************************************during
the Term of the Agreement, unless pursuant to a business
arrangement with Xxxxx or with Xxxxx'x prior written approval.
16
b. Solicitation of Employees
During the Term of this Agreement, and for a period of
one (1) year following termination, neither party shall
solicit for employment nor hire any employee of the other
without such party's agreement thereto.
c. Severability
Should one or more provisions of this Agreement be or become
invalid, the parties hereto shall substitute, by mutual
consent, valid provisions which in their economic effect are
sufficiently similar to the invalid provisions that it can be
reasonably assumed that the parties would have entered into
this Agreement with such valid provisions. In case such valid
provisions cannot be agreed upon, the invalidity of one or
several provisions of this Agreement shall not affect the
validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement
that it is to be reasonably assumed that the parties would not
have entered into this Agreement without the invalid
provisions.
d. Notices
Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties
hereto to the other shall be in writing, delivered personally
or by facsimile (and promptly confirmed by personal delivery
or courier) or courier, postage prepaid (where applicable),
addressed to such other party at its address indicated below,
or to such other addresses as the addressee shall have last
furnished in writing to the addressor in accordance with this
paragraph and shall be effective upon receipt by the
addressee.
If to Xxxxx: Xxxxx Pharmaceutical Company
0000 Xxxxxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: President
Xxxxxxxxx: (000) 000-0000
with a copy to: Xxxxx Pharmaceutical Company
0000 Xxxxxxxxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Attention: Group Counsel
Facsimile: (000) 000-0000
17
If to Kos: Kos Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxx Xxxxx, 00xx Xxxxx
Xxxxx, XX 00000
Attention: President
Xxxxxxxxx: (000) 000-0000
with a copy to: Holland & Knight LLP
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxxx
Xxxxxxxxx: (000) 000-0000
e. Applicable Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
f. Entire Agreement
This Agreement contains the entire understanding of the
parties with respect to the subject matter hereof. All express
or implied agreements and understandings, either oral or
written, heretofore made are expressly merged in and made a
part of this Agreement. This Agreement may be amended, or any
term hereof modified, only by a written instrument duly
executed by the parties. Each of the parties hereby
acknowledges that this Agreement is the result of mutual
negotiation and therefore any ambiguity in their respective
terms shall not be construed against the drafting party.
g. Headings
The captions to the several Articles and Paragraphs hereof are
not a part of this Agreement but are for convenience only.
h. Independent Contractors
It is expressly agreed that Kos and Xxxxx shall be independent
contractors and that the relationship between the two parties
shall not constitute a partnership, joint venture or agency.
Neither Kos nor Xxxxx shall have the authority to make any
statements, representations or commitments of any kind, or to
take any action, which shall be binding on the other, without
the prior consent of the other party to do so.
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i. Waivers
No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof
nor shall any waiver on the part of any party of any such
right, power or privilege, nor any single or partial exercise
of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right,
power or privilege.
j. Counterparts
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
k. Publicity
All public announcements, notices or other communications to
third parties regarding this agreement, its terms and
conditions, or the Products shall require the prior written
approval of both parties.
Please indicate Kos' acceptance and agreement to the above by signing
this letter in the space below.
Sincerely,
XXXXX PHARMACEUTICAL COMPANY
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
President
Xxxxxx and accepted this
23 day of July, 1999.
KOS PHARMACEUTICALS, INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------
Xxxxxx X. Xxxx
President and Chief Executive Officer
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ATTACHMENT A TO AGREEMENT: COMMISSION SCHEDULE
THIS PAGE CONSISTS OF CONFIDENTIAL MATERIAL WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ATTACHMENT B TO CO-PROMOTION AGREEMENT: METHODOLOGY FOR DEFINING TARGETED
PRESCRIBERS
THIS PAGE CONSISTS OF CONFIDENTIAL MATERIAL WHICH HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
