1
TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT, dated as of December 15, 1999
("Agreement"), is between Nastech Pharmaceutical Company, Inc., a Delaware
corporation ("Nastech"), and Xxxxxxx Pharma, Inc., a Delaware corporation
("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxxx and Nastech entered into that certain License and Supply
Agreement, dated as of December 11, 1997 (the "License Agreement"); and
WHEREAS, Buyer and Seller have decided to amicably terminate the License
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency is hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall
have the meanings given them in the License Agreement.
2. Disposition of License and Supply Agreement. As of the Effective
Date (as defined in Section 5.1 below), the License Agreement shall be
terminated and shall have no further force and effect. No party to the License
Agreement shall have any rights or obligations thereunder, including, without
limitation, with respect to any unpaid obligation to pay any milestone payments.
3. Mutual Release. As of the Effective Date, each of Xxxxxxx and
Nastech (each a "Releasing Party") for itself, its predecessors, successors,
assigns, affiliates, officers, directors, agents and employees, does hereby
release, remise and forever discharge each other party hereto and its respective
successors, affiliates, assigns, officers, directors, agents and employees
(collectively, such Releasing Party's "Releasees"), from any and all claims,
demands, rights of action, causes of action, lawsuits, damages, indebtedness,
liabilities, obligations, losses or expenses of any nature whatsoever and
remedies therefor, duty or relationship, acts, omissions, misfeasance,
malfeasance, causes of action, sums of money, accounts, compensation, contracts,
controversies, promises, choices in action, rights of indemnity or liability of
any type, kind, nature, description or character whatsoever, and irrespective of
how, why or by reason of what facts, whether known or unknown, suspected or
unsuspected, whether heretofore now existing or hereafter arising, which could,
might or may be claimed to exist, whether liquidated or unliquidated, whether
existing in law or equity and whether known or unknown, foreseen or unforeseen,
which the Releasing Party has or has had, or may hereafter claim to have had,
against any Releasees arising from, under or in connection with the License
Agreement, the negotiation thereof or the relationships created thereunder, and
any transactions and documents in connection therewith, related thereto or
contemplated thereby, provided, however, that nothing in this Section 3 shall
affect the rights, duties and obligations of the Releasing Parties pursuant to
this Agreement.
2
4. Remedies.
4.1 In the event of any breach or threatened breach by either party
hereto of any covenant, warranty, agreement, understanding of provision (the
"terms") of this Agreement, each party acknowledges and agrees that the other
parties would be irreparably harmed; and, in the event of any breach of the
terms of this Agreement, each party agrees that each of the other parties shall
be entitled, if it so elects, in addition to any other legal or equitable
remedies available to it, to institute and prosecute any proceeding in any court
of competent jurisdiction, either at law or in equity, and shall be entitled to
such relief as may be available to it, at law or in equity, including, but not
limited to, an injunction or an order for specific performance.
4.2 If, for any reason, a part of this Agreement is deemed
unenforceable in any court of law of competent jurisdiction, the remaining
provisions of this Agreement shall be enforced to the greatest extent possible
as if said unenforceable part were omitted. Failure by any party at any time to
require performance by the other party of any provision hereto shall in no way
affect the full right to require such performance at any time thereafter, nor
shall the waiver by either party of the breach of any provision hereof be a
waiver of any succeeding breach of the same or any other provision.
5. Payments.
5.1 On the date hereof, Nastech shall pay Xxxxxxx $250,000 by wire
transfer of immediately available funds to such account or accounts as shall be
designated by written notice from Xxxxxxx to Nastech on or prior to the date
hereof. The date that Xxxxxxx receives such $250,000 payment shall be the
"Effective Date" for all purposes hereunder.
5.2 Nastech agrees to pay Xxxxxxx one-half of all Consideration
received, including, without limitation, upfront payments, milestone payments,
royalties and any other payments, whether received directly or indirectly,
through intermediaries or otherwise, in respect of Scopolamine. Payments to
Xxxxxxx pursuant to this Section 5.2 shall (i) be made in immediately available
funds within 3 business days of Nastech's receipt of the Consideration
underlying such payment and (ii) continue until Xxxxxxx receives payments
totaling a Net Present Value (as defined below) of $3,500,000. "Net Present
Value" shall mean, with respect to the amount of payments to be received by
Schwarz under this Section 5.2, an amount that compensates for the time value
of money by accruing quarterly compounded interest at the rate of 8.5% per
annum on the unpaid portion of such payment from the earlier of (i) the date
that is 12 months after the date hereof or (ii) the date that Nastech signs an
agreement for license, sale or other disposition of Scopolamine, until the date
such payment is received by Xxxxxxx. "Consideration" shall mean, money or the
Fair Market Value of in-kind consideration. The "Fair Market Value" of any
in-kind consideration received shall be the value determined by the parties in
good faith or if the parties can not agree, by a Professional Appraiser.
"Professional Appraiser" shall mean, with respect to the valuation of in-kind
payments, a professional appraiser (e.g., an
3
accounting firm or investment bank) which is experienced in valuing like assets
and which is appointed by the parties. Payments pursuant to this Section 5.2
shall be applied by Xxxxxxx first against interest accrued and unpaid and
second, to the outstanding principal balance.
5.3 Nastech will not, through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by it, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 5
and in the taking of all such action as may be necessary or appropriate in order
to protect Xxxxxxx against impairment.
5.4 In the event that Nastech breaches its obligations under this
Xxxxxxx 0, Xxxxxxx, may, after 10 days prior written notice to Nastech (during
which period Nastech may cure such breach), declare all or any portion of the
outstanding payments due under this Section 5 to be due an payable, whereupon
the full unpaid amount of such payments which shall be so declared due and
payable shall be and become immediately due and payable, without further notice,
demand or presentment (which is hereby specifically waived by Nastech).
6. Reports.
6.1 Until Nastech has satisfied its obligations pursuant to Section
5.2, Nastech shall provide to Xxxxxxx a report, within 30 days of the end of
each quarter, stating a summary of all activities undertaken by Nastech or its
affiliates with respect to Scopolamine as well as all monies and other
Consideration received by Nastech or its affiliates in respect of Scopolamine
during such quarter, including, without limitation, upfront payments, milestone
payments and royalties, whether received directly or indirectly, through
intermediaries or otherwise, from the sale and licensing of Scopolamine.
6.2 Nastech and its affiliates shall keep full, true and accurate
books of account containing all particulars that may be necessary for the
purpose of showing amounts owing pursuant to Section 5.2. Such books of account
shall be kept at Nastech's principal place of business. Such books and the
supporting data shall be open, at all reasonable times and upon reasonable
notice during the term of this Agreement and for 2 years after its termination,
to the inspection of a firm of certified public accountants selected by Xxxxxxx
and reasonably acceptable to Nastech, for the purpose of verifying amounts owing
pursuant to Section 5.2. Except as otherwise provided in this Section, the cost
of any such examination shall be paid by Schwarz. In the event that any such
inspection reveals that the actual amounts owing pursuant to Section 5.2 exceeds
the amounts paid by Nastech more than 5% during the period covered by the
inspection, Nastech shall promptly pay Xxxxxxx the amount by which Nastech
previously underpaid under Section 5.2, plus interest at the rate of 12% per
annum, and shall reimburse Xxxxxxx for the fees and expenses paid to such
accountants in connection with their inspection.
4
7. Miscellaneous.
7.1 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
7.2 Nastech shall not assign any of its rights or obligations under
this Agreement without the prior written consent of Xxxxxxx.
7.3 Each party hereto has voluntarily entered into and executed this
Agreement after having had the opportunity to be advised by legal counsel of its
choice of the effects, significance and consequence of this Agreement.
7.4 This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and cannot be modified or amended
except by an agreement made in writing by all the parties hereto.
7.5 Each party hereto acknowledges that it has not relied upon any
representation of any kind made by any other party in making the foregoing
release.
7.6 It is hereby further understood and agreed that the acceptance of
delivery of this Agreement by the parties released hereby shall not be deemed or
construed as an admission of liability of any nature whatsoever arising from or
related to the subject of this Agreement.
7.7 Publicity. The parties agree that no publicity release or
announcement concerning the transactions contemplated hereby shall be issued
without the advance written consent of the other, except as such release or
announcement may be required by law, in which case the party making the release
or announcement shall, before making any such release or announcement, use
reasonable efforts to afford the other party a reasonable opportunity to review
and comment upon such release or announcement.
7.8 This Agreement may be signed in any number of counterparts, all of
which together shall constitute one and the same document.
7.9 Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH OF
PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION. EACH OF PARTIES HERETO FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS
5
BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT
THE STATE OF NEW YORK. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY OF THE PARTIES HERETO
HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM
ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR
ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT.
[Signatures Next Page]
6
IN WITNESS WHEREOF, the parties have duly executed this Termination and
Release Agreement as of the day and year first above written.
XXXXXXX PHARMA, INC.
By: /s/ Xxxxx Xxxxxxxxx
------------------------
Xxxxx Xxxxxxxxx, President and CEO
NASTECH PHARMACEUTICAL COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxx X. Xxxxx
Title: President/CEO
