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EXHIBIT 10.4
AGREEMENT REGARDING PARTNERSHIP TERMINATION
This Agreement ("Agreement") is entered into as of June 30, 1997, by
and among Xxxxxx Laboratories, Inc., a Nevada corporation ("Xxxxxx"), Circa
Pharmaceuticals, Inc., a New York corporation ("Circa"), BOL Inc., a Delaware
corporation ("BOL"), Xxxxx-Xxxxxxx Xxxxx Inc., a Pennsylvania corporation
("RPR"), and Xxxxx-Xxxxxxx Xxxxx Pharmaceuticals Inc., a Delaware corporation
("RPRPI").
R E C I T A L S:
WHEREAS, Xxxxxx and Circa (formerly known as Xxxxx Pharmaceuticals Co.,
Inc.) are affiliated through joint ownership by their parent corporation, Xxxxxx
Pharmaceuticals, Inc., a Nevada corporation ("Xxxxxx Pharmaceuticals"); and
WHEREAS, BOL and RPRPI (as successor by merger to RPR BRG Group Inc.
(formerly known as ROR II Corp.)) are the partners of BRG Company (the
"Company"), a general partnership organized under the laws of the State of
Delaware for the purpose of commercializing, among other things, the extended
release formulation of diltiazem currently marketed in the U.S. under the
trademark Dilacor XR(R) (the "Product"); and
WHEREAS, the rights, duties and obligations of BOL and RPRPI with
respect to the Company are controlled by the General Partnership Agreement of
the Company, dated as of July 17, 1989, as amended (the "Partnership Agreement")
and a series of additional agreements (the "Related Agreements") as set forth on
Exhibit A, attached hereto entered into in furtherance of the objectives of the
Company between or among two or more of the Company, BOL, RPRPI, Circa and RPR;
and
WHEREAS, Xxxxxx, RPRPI and Xxxxx Pharmaceutical Products Inc., an
affiliate of RPRPI ("RPPI") desire to enter into a series of transactions
pursuant to which, among other things: (i) the parties hereto shall terminate
the Partnership Agreement and all the Related Agreements; (ii) with the consent
of Jago Research AG ("Jago"), RPPI will grant to Xxxxxx an exclusive license of
all of its rights to market, advertise, promote, sell and distribute the Product
(including both branded and generic versions of it) in certain jurisdictions,
and grant to Xxxxxx certain option rights with respect to the acquisition of
RPPI's rights to the Product in certain jurisdictions, pursuant to a License
Agreement, of even date herewith, between Xxxxxx and RPPI; (iii) RPRPI will sell
and Xxxxxx will purchase certain inventory of and other assets relating to the
Product pursuant to an Inventory Purchase Agreement, of even date herewith,
between Xxxxxx and RPRPI; and (iv) RPRPI will manufacture and supply the Product
to Xxxxxx pursuant to the terms of a Manufacturing and Supply Agreement, of even
date herewith, between Xxxxxx and RPRPI (collectively, the "Transaction");
WHEREAS, Xxxxxx, Circa, BOL, RPR and RPRPI now desire to enter into
this Agreement to set forth certain rights and obligations and to terminate the
Partnership Agreement and the Related Agreements, all on the terms and
conditions as set forth below.
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A G R E E M E N T S:
NOW, THEREFORE, Circa, Watson, BOL, RPR and RPRPI hereby agree as
follows:
Section 1. Termination. The parties hereby agree that, subject to the
fulfillment of the conditions set forth in Section 6 hereof:
(a) Effective as of 11:59 p.m. on June 30, 1997, the Partnership
Agreement and the Related Agreements are hereby terminated and of no further
force or effect whatsoever; provided, that (i) the obligations to make royalty
payments to Circa under the Partnership Agreement shall survive such termination
as and to the extent set forth in Section 7 below and (ii) the assignments and
conveyances of rights made in Section 3.a. of the Third Amendment and in Section
3.a. of the Fourth Amendment to the Partnership Agreement will not be affected
by such termination. BOL and RPRPI shall promptly take such actions as are
necessary in order to dissolve the Company effective as of said date and time
and to wind-up the affairs of the Company as soon as practicable thereafter.
(b) Without limiting subparagraph (a) above, each of BOL and RPRPI
expressly acknowledges and agrees that neither party nor any of its Affiliates
(as defined below) shall have any ongoing obligations, liabilities or
responsibilities of any nature whatsoever pursuant to the non-competition
covenant contained in Section 16(b) of the Partnership Agreement. For purposes
hereof, "Affiliate" shall mean, when used with respect to a person, any other
person directly or indirectly controlling, controlled by, or under common
control with the subject person; provided, however, that with respect to RPR and
RPRPI, only RPR and persons directly or indirectly controlled by RPR shall be an
Affiliate of such parties for any provision of this Agreement, or any of the
Agreements contemplated hereby. For purposes of this Agreement, "control" means
the direct or indirect ownership of over 50% of the outstanding voting
securities of a person, or the right to receive over 50% of the profits or
earnings of a person.
(c) All rights, assets and liabilities of the Company shall be
distributed in accordance with the Plan of Partnership Dissolution attached
hereto as Exhibit B.
Section 2. Termination Fee. In order to induce RPRPI to execute this
Agreement and enter into the Transaction, Xxxxxx shall immediately upon the
signing of this Agreement deliver to RPRPI the sum of Twenty Million Dollars
($20,000,000.00), by wire transfer to such account as may be specified in
writing by RPRPI.
Section 3. Release by RPRPI. Except for the royalty payment obligations
of the parties set forth in Section 7 below, RPRPI, for itself, its
predecessors, successors and assigns, partners, subsidiaries, and Affiliates
(collectively, the "RPR Parties"), hereby releases and forever discharges BOL,
and the predecessors, successors and assigns, partners, subsidiaries, and
Affiliates of BOL, including, without limitation, Xxxxxx and
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Xxxxxx Pharmaceuticals and their respective predecessors, successors and assigns
(collectively, the "Circa Parties") from any and all liabilities, obligations,
expenses, losses, damages, indemnities, claims, causes of action and demands
whatsoever which RPRPI and the RPR Parties ever had, now have or may have,
whether now known or unknown, against BOL and the Circa Parties arising out of,
resulting from, or in any way related to the Company and/or the Partnership
Agreement or the Related Agreements.
Section 4. Release by BOL. Except for the royalty payment obligations
of the parties set forth in Section 7 below, BOL for itself and the Circa
Parties, hereby releases and forever discharges RPRPI and the RPR Parties from
any and all liabilities, obligations, expenses, losses, damages, indemnities,
claims, causes of action and demands whatsoever which BOL and the Circa Parties
ever had, now have or may have, whether now known or unknown, against RPRPI and
the RPR Parties arising out of, resulting from, or in any way related to the
Company and/or the Partnership Agreement or the Related Agreements.
Section 5. General Release. Each party hereby agrees, represents and
warrants that the releases in Sections 3 and 4 are not limited to matters that
are known or disclosed, and each party hereby waives any and all rights and
benefits that it now has, or in the future may have, under or by virtue of
Section 1542 of the Civil Code of the State of California (or any other statute
or common law principles of similar effect), that provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
In this connection, each party hereby also agrees, represents, and warrants that
it realizes and acknowledges that factual matters now unknown to it may have
given or may hereafter give rise to causes of action, claims, demands, debts,
controversies, damages, costs, losses and expenses that are presently unknown,
unanticipated, and unsuspected, that Sections 3 and 4 have been negotiated and
agreed upon in light of that realization and that it nevertheless hereby intends
to release, discharge, and acquit each other party from any such unknown causes
of action, claims, demands debts, controversies, damages, costs, losses and
expenses.
Section 6. Conditions to Effectiveness. As a condition precedent to the
effectiveness of this Agreement and the obligations, releases and other duties
and benefits of the parties hereunder, each of the following conditions must be
satisfied:
(a) Watson, Jago, Circa and RPR shall have entered into that certain
Consent Agreement substantially in the form attached hereto as Exhibit C;
(b) Xxxxxx and RPPI shall have entered into that certain License
Agreement, substantially in the form attached hereto as Exhibit D;
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(c) Xxxxxx and RPRPI shall have entered into that certain Manufacturing
and Supply Agreement, substantially in the form attached hereto as Exhibit E;
and
(d) Xxxxxx and RPRPI shall have entered into that certain Inventory
Purchase Agreement, substantially in the form attached hereto as Exhibit F.
Section 7. Royalty Payments.
(a) Section 4 of the Fourth Amendment to the Partnership Agreement,
dated April 27, 1993 (the "Fourth Amendment"), as amended by that certain Letter
Agreement, dated May 3, 1995 between RPR and Circa (the "Letter Agreement"),
sets forth certain royalty payment obligations whereby, among other things, RPR
must pay Circa royalty on the Net Sales (as defined in the Fourth Amendment) of
the Branded QD Product (as defined in the Fourth Amendment) in the United States
and its territories and possessions. Each of the parties hereto acknowledges and
agrees that notwithstanding anything to the contrary contained herein, the
obligation to make any and all royalty payments due and owing to Circa under
Section 4.a. of the Fourth Amendment for periods prior to July 1, 1997 shall
survive the termination of the Partnership Agreement and be paid as set forth
below.
(b) Within forty-five (45) days after June 30, 1997, RPRPI shall
provide Circa with a written report of RPRPI's best good faith estimates of Net
Sales of the Branded QD Product during the calendar quarter ended June 30, 1997
and corresponding royalty owed, as well as a reconciliation of the report for
the preceding calendar quarter with the final figure for Net Sales as reported
on the formal books of RPRPI. Such report shall be accompanied by the royalty
due for the quarter ended June 30, 1997, subject to any adjustments for the
preceding calendar quarter. Within forty-five (45) days after September 30,
1997, RPR shall provide Circa with a reconciliation of the previous reports
provided hereunder with the final figures for Net Sales as reported on the
formal books of RPRPI, and the party owing money in connection with any
adjustment to such previous report shall promptly pay such amount.
(c) RPRPI shall keep complete and accurate records concerning Net Sales
of the Branded QD Products in the United States and its territories and
possessions for the calendar quarter ending June 30, 1997 in accordance with
generally accepted accounting principles applied on a consistent basis. At
Circa's request and expense upon reasonable notice to RPRPI, such records shall
be made available for reasonable examination by Circa or an independent
certified public accountant or auditors designated by Circa and approved by
RPRPI for the purpose of verifying the accuracy of the accounting reports and
the calculation of the royalty payment to be made pursuant to Section 7(b)
above.
Section 8. Miscellaneous.
(a) No party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of the other parties
hereto. No such assignment shall relieve assignor of any of its obligations or
liabilities under this Agreement.
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(b) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective permitted successors and assigns.
Nothing contained herein shall give to any other person any benefit or any legal
or equitable right, remedy or claim.
(c) This Agreement may only be modified, amended or supplemented by an
instrument in writing executed by each of the parties hereto.
(d) No term or provision hereof will be considered waived by either
party, and no breach excused by either party, unless such waiver or consent is
in writing signed on behalf of the party against whom the waiver is asserted. No
consent by either party to, or waiver of, a breach by either party, whether
express or implied, will constitute a consent to, waiver of, or excuse of any
other, different, or subsequent breach by either party.
(e) All notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be delivered personally
or sent by facsimile transmission, air courier, or registered or certified mail,
return receipt requested, addressed as follows:
If to Xxxxxx, Circa or BOL: If to RPR or RPRPI, in care of:
Xxxxxx Laboratories, Inc. Xxxxx-Xxxxxxx Xxxxx Pharmaceuticals Inc.
000 Xxxxxx Xxxxxx 000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000 Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Attn: Xx. Xxxxx Xxxx Attn: Senior Vice President and General
Manager, Americas
With copies to: With copies to:
X'Xxxxxx & Xxxxxx Xxxxx-Xxxxxxx Xxxxx Pharmaceuticals Inc.
00 Xxxxx XxXxxxx, Xxxxx 0000 000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Fax: (000) 000-0000 Attn: General Counsel
Attn: Xxxxxx X. Xxxxxxx Fax: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance herewith. Any such
communication shall be deemed to have been delivered (i) when delivered, if
delivered personally, (ii) when sent (with confirmation received), if sent by
facsimile transmission on a business day, (iii) on the first business day after
dispatch (with confirmation received), if sent by facsimile transmission on a
day other than a business day, (iv) on the second business day after dispatch,
if sent by air courier, and (v) on the fifth business day after mailing, if sent
by mail.
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(f) This Agreement shall become binding when any one or more
counterparts hereof, individually or taken together, shall bear the signatures
of each of the parties hereto. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against the party
whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument.
(g) The article and 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.
(h) This Agreement and any claims, disputes or causes of action
relating to or arising out of this Agreement shall be construed in accordance
with and governed by the laws of the State of New York, without giving effect to
the conflict of laws principles thereof.
(i) Any of the provisions of this Agreement which are determined to be
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability in such jurisdiction, without rendering
invalid or unenforceable the remaining provisions hereof or affecting the
validity or enforceability of any of the provisions of this Agreement in any
other jurisdiction.
(j) This Agreement and the other agreements contemplated hereby or
thereby or executed concurrently herewith embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between the parties
hereto and their respective Affiliates with respect thereto, including, without
limitation, that certain letter of intent, dated May 20, 1997, between RPR and
Xxxxxx. There are no agreements, covenants or undertakings with respect to the
subject matter of this Agreement and the other agreements contemplated hereby or
thereby other than those expressly set forth or referred to herein or therein
and no representations or warranties of any kind or nature whatsoever, express
or implied, are made or shall be deemed to be made herein by the parties hereto
except those expressly made in this Agreement and the other agreements
contemplated hereby or thereby.
(k) Each party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be reasonably necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of date first above written.
XXXXXX LABORATORIES, INC. XXXXX-XXXXXXX XXXXX
PHARMACEUTICALS INC.
By: _______________________ By: _______________________
Its:_______________________ Its:________________________
CIRCA PHARMACEUTICALS, INC. XXXXX-XXXXXXX XXXXX INC.
By: _______________________ By: ________________________
Its:_______________________ Its:_________________________
BOL INC.
By: _______________________
Its:_______________________
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