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EXHIBIT 10.40
LICENSE AND SUPPLY AGREEMENT
MAY 23, 2000
This Agreement is made as of this 23rd day of May, 2000, by and between Abbott
International, Ltd., a company organized under the laws of the State of
Delaware, USA, with its principal offices at 000 Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx,
XX 00000-0000 ("Abbott") and VIVUS International, Ltd., a company organized
under the laws of Bermuda, with its principal offices at Xxxxxxxxx Xxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx, Xxxxxxx. ("VIVUS").
RECITALS
WHEREAS, VIVUS has developed and is developing products for the treatment of
erectile dysfunction; and
WHEREAS, Abbott is interested in obtaining a license to and/or certain other
rights relating to such products; and VIVUS is interested in granting such
license and/or rights to Abbott; and
WHEREAS, VIVUS is a wholly-owned subsidiary of VIVUS, Inc., a Delaware
corporation, ("VIVUS INC."), with its offices at 0000 Xxxxxx Xxxxxx, Xxxxxxxx
Xxxx, XX 00000, which has guaranteed the performance by VIVUS of this Agreement.
NOW, THEREFORE, in consideration of the mutual obligations and promises as set
forth herein, the parties do hereby agree as follows:
ARTICLE 1 - DEFINITIONS
For purposes of this Agreement, the following terms shall have the following
respective meanings:
1.1 Affiliate means any corporation, firm, partnership or other entity,
whether de jure or de facto, which directly or indirectly owns, is
owned by or is under common ownership with a party to the extent of in
excess of fifty percent (50%) of the outstanding securities or assets
having the power to vote on or direct the affairs of the entity.
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1.2 Confidential Information means any information, data or business plans
relating to the Products, the Future Products, or otherwise to the subject of
this Agreement, which a party discloses to the other party, except any portion
thereof which:
(i) is known to the receiving party at the time of disclosure and documented
by written records made prior to the date of this Agreement;
(ii) is disclosed to the receiving party by a third person who has a right
to make such disclosure;
(iii) becomes patented, published or otherwise part of the public domain
through no fault of the receiving party; or (iv) is independently developed by
the receiving party as evidenced by its written records.
1.3 Effective Date means the date of this Agreement first written above.
1.4 First Commercial Sale means the first sale of Product (as defined below) in
the Territory by Abbott or any Abbott Affiliate or sublicensee to any
unaffiliated third party following Regulatory Approval of the Product, as
evidenced by the selling party's invoice to such third party.
1.5 Future Product means any transurethral product for the treatment of male
erectile dysfunction, which is owned by or licensed (with the right to
sub-license) to VIVUS, VIVUS INC. or its or their Affiliates before the tenth
anniversary of the Effective Date, which has at least one different active
ingredient as compared to either the MUSE Product or the ALIBRA Product, and
which is not a Product or an Improvement. For the avoidance of doubt, "Future
Products" do not include any product for the treatment of female sexual
dysfunction or premature ejaculation, owned by or licensed (with the right to
sub-license) by VIVUS, VIVUS INC. or its or their Affiliates.
1.6 Improvement means any and all additions, developments, improvements,
modifications, enhancements or adaptations, whether or not patented or
patentable, that relate to a Product and that are not a Future Product that
comes into existence during the term of this Agreement.
1.7 Xxxxxxx Territory means the countries listed on Exhibit 1.7 attached to this
Agreement, as to which VIVUS has granted certain rights to Xxxxxxx subject to
the terms and conditions of the Distribution Agreement by and between VIVUS and
Xxxxxxx Pharmaceutica International dated January 22, 1997 granting certain
rights to Xxxxxxx for the Products ("Xxxxxxx Agreement").
1.8 Licensed Patents means all patents and patent applications (including
without limitation, continuations, continuations-in-part, divisionals, patents
of addition, substitutions, extensions,
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reissues, reexaminations, renewals, or SPCs), owned by or licensed (with the
right to sublicense) to VIVUS or VIVUS INC. or its or their Affiliates during
the term of this Agreement, and generically or specifically claiming a Product,
an Improvement, a process for manufacturing a Product or Improvement, an
intermediate used in such process, or a use of a Product or Improvement. With
respect to such patents or applications which VIVUS or VIVUS INC. or its or
their Affiliates licenses or acquires or has licensed or acquired from a third
party, the same shall be included within "Licensed Patents" hereunder to the
extent that VIVUS or VIVUS INC. or its or their Affiliates has the right to
license or sublicense the same hereunder. Exhibit 1.8 attached to this Agreement
lists all Licensed Patents in existence as of the Effective Date.
1.9 Marketing Authorization means all governmental approvals and authorizations
necessary for the commercial marketing and sale of the Products in a country in
the Territory, excluding any pricing approval and pricing reimbursement.
1.10 Net Sales means the gross sales of a Product shipped by Abbott and/or its
Affiliates or sub licensee to third parties in the Territory (as defined below)
less deductions allowed to the final buyer against invoiced amounts for:
(A) trade discounts earned or granted;
(B) cash discounts actually allowed;
(C) transportation charges (including insurance costs), handling charges,
sales taxes, excise, turnover, inventory, value added and similar taxes, duties
and charges invoiced to customers;
(D) retroactive price reductions imposed by government authorities;
(F) wholesaler charge backs earned or granted; and
(G) rebates and management fees earned by or granted to third parties.
1.11 Product means (a) the product for the transurethral delivery of alprostadil
and which VIVUS and/or VIVUS INC. sells outside the Territory, as of the
Effective Date, under the trademark MUSE(R) ("MUSE Product"), (b) the product
for the transurethral delivery of alprostadil and prazosin, and for which VIVUS
plans to file a submission for Marketing Authorization in the European Union,
and which VIVUS and/or VIVUS, INC. plans, as of the Effective Date, to market
outside the Territory under the trademark ALIBRA(R) ("ALIBRA Product"), each
with final packaging and labeling suitable for use by the consumer in the
Territory, and (c) any Improvement.
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1.12 Regulatory Approval means all governmental approvals and authorizations
necessary for the commercial sale of the Product in a country in the Territory,
including but not limited to Marketing Authorization, pricing approval and
pricing reimbursement.
1.13 Sales Quarter means for the first Sales Quarter, the period commencing on
the date of Xxxxxx'x First Commercial Sale and ending on the last day of that
Abbott fiscal quarter; and for subsequent Sales Quarters, the successive Abbott
fiscal quarters thereafter.
1.14 Sales Year means for the first Sales Year, the period commencing on the
date of Xxxxxx'x First Commercial Sale and ending on the last day of that Abbott
fiscal year; and for subsequent Sales Years, the successive Abbott fiscal years
thereafter.
1.15 Specifications means the written manufacturing release specifications and
stability specifications for each of the Products, which shall be agreed upon by
the parties and which shall be set forth in Exhibit 1.15 attached hereto or as
amended pursuant to Article 6.5 below.
1.16 SPC means a right based upon a Licensed Patent to exclude others from
making, using or selling a Product, such as a Supplementary Protection
Certificate.
1.17 Supply Price means the price as set forth in Article 4.2 below.
1.18 Trademarks means the trademarks MUSE(R), ALIBRA(R), and BONDIL. The MUSE(R)
and ALIBRA(R) Trademarks are registered or have pending registration
applications throughout the Territory as of the Effective Date.
1.19 Territory means all countries and territories of the world except for the
United States and the Xxxxxxx Territory.
1.20 Valid Claim means any claim of an issued and unexpired patent in the
Licensed Patents which has not been held unenforceable, unpatentable or invalid
by a decision of a court or government agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal or which has not
been admitted by the holder of the patent to be invalid or unenforceable through
reissue, disclaimer or otherwise.
ARTICLE 2 - GRANT OF RIGHTS
2.1 Exclusive License to Abbott.
(A) VIVUS hereby grants to Abbott an exclusive license (exclusive even as to
VIVUS) to use and sell the Product and any Improvements in the
Territory, under the Licensed Patents, with right to sublicense, subject
only to the rights of Astra AB under the Distribution Agreement between
Astra AB and VIVUS dated May 29, 1996 ("Astra
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Agreement"), the December 22, 1999 letter agreement from Astra AB to
VIVUS regarding the termination of the Astra Agreement, and any other
binding agreement or amendment between VIVUS and Astra relating to the
Astra Agreement. Abbott may sublicense any one or more of its Affiliates
at Xxxxxx'x sole discretion, and may sublicense third parties with
VIVUS's prior written consent, such consent not to be unreasonably
withheld. This exclusive license is granted to Abbott as to all uses,
forms, indications, packages and strengths for the Product and any
Product Improvements.
(B) In the event that during the term of this Agreement, any country in the
Xxxxxxx Territory as of the Effective Date ceases to be part of the
Xxxxxxx Territory, and VIVUS has the right to grant the same license as
to such country or countries as VIVUS has granted to Abbott pursuant to
Article 2.1(A) above as to the Territory, then such country or countries
(up to and including the entirety of the Xxxxxxx Territory, as the case
may be) shall automatically become part of the Territory under this
Agreement; provided that no such country shall become part of the
Territory if, at the time such country becomes otherwise available,
there are in effect export restrictions, economic sanctions, or other
laws or regulations which prohibit United States corporations from
selling goods to such country. The parties acknowledge and agree that
neither party shall take any action in violation of VIVUS's contractual
obligations to Xxxxxxx or otherwise in violation of applicable law, with
respect to this Article 2.1(B).
2.2 Future Product Rights.
(A) Subject to the provisions of this Article 2.2, VIVUS hereby grants to
Abbott an exclusive right of first refusal to obtain an exclusive
license (exclusive even as to VIVUS) in the Territory to use and sell
Future Products, to the extent VIVUS has the right to grant such a
license. Abbott shall have a separate and independent right of first
refusal as to each Future Product pursuant to this Article 2.2. The
parties acknowledge that VIVUS (or VIVUS INC, or its or their
Affiliates, as the case may be) may license or acquire rights to a
Future Product from a third party, and that VIVUS may not be permitted
to license or sublicense such rights to Abbott for the full Territory or
for all fields; but the parties agree that VIVUS and VIVUS INC. shall
use their best efforts to obtain rights to any such Future Product from
such third party on a
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basis which will permit VIVUS to license or sublicense such rights to
Abbott for the full Territory and for all fields. VIVUS shall not
discuss, negotiate, entertain, solicit, offer, accept or enter into any
agreement granting to a third party the right to use and sell such
Future Product in the Territory except as expressly set forth in Article
2.2(B) below.
(B) During the term of this Agreement, VIVUS shall use diligent efforts to
determine whether and when VIVUS wishes to pursue commercialization
(directly or via a third party) of each of the Future Products in the
Territory. In each case, but in no event earlier than September 15,
2001, after VIVUS has completed its first Phase II study with a Future
Product, VIVUS shall provide Abbott with the results of this Phase II
study, the Investigational New Drug Application ("IND") (or the
equivalent of an IND filed with any regulatory agency in the Territory)
under which this Phase II study was conducted and the results of all
completed clinical trials under this IND. Within ninety (90) days
following receipt of such data, Abbott shall notify VIVUS of its
decision whether or not it wishes to accept an exclusive license for
such Future Product in the Territory. If Abbott does not wish to accept
such license, then VIVUS shall be free to negotiate with third parties
concerning the grant of rights to use and sell such Future Product on
terms VIVUS deems appropriate, or pursue commercialization of such
Future Product itself and shall have no further obligation under this
Article 2.2 with respect to such Future Product.
(C) If Abbott notifies VIVUS that it does wish to accept such license, then
such Future Product shall become a Product under this Agreement as of
the date of Xxxxxx'x notice of acceptance, and shall be subject to the
terms and conditions of this Agreement with the exception of Articles 3
(in its entirety), 4.3, 9.2 and Exhibit 4, provided that each Future
Product which so becomes a Product under this Agreement shall also be
subject to the provisions expressly set forth in Articles 2.2(D) and 8.6
below, which provisions shall govern for each such Future Product in
case of any conflict with other provisions of this Agreement. In no
event shall the provisions of Articles 2.2(D) and 8.6 below apply to the
MUSE Product or the ALIBRA Product or any Improvements thereof.
(D) In the event that a Future Product becomes a Product under this
Agreement pursuant to Article 2.2(B) and (C) above, then the following
provisions shall apply:
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(i) The parties shall promptly form a Development Committee and shall
work together on the further development of such Future Product,
pursuant to Article 8.6 below;
(ii) Abbott shall pay to VIVUS an amount equal to (***) of VIVUS's
actual, verified out-of-pocket costs for the Phase II studies
relating to such Future Product, such amount being payable within
thirty (30) days of the date upon which the first patient is
enrolled in the first Phase III study relating to such Future
Product;
(iii) Abbott shall pay to VIVUS an amount equal to (***) of VIVUS's
actual, verified out-of-pocket costs for the Phase III studies
relating to such Future Product, such amount being payable within
thirty (30) days after the end of each calendar quarter, as such
costs are incurred subject to Article 8.6 below;
(iv) Abbott shall pay to VIVUS an amount equal to (***) of VIVUS's
actual, verified out-of-pocket costs for the Phase II and III
studies (in the case of Phase III studies, such costs are payable
only if incurred subject to Article 8.6 below) relating to such
Future Product (bringing the total such amounts paid by Abbott to
(***) of such costs), payable within thirty (30) days of the date
by which such Future Product has obtained Marketing Authorization
in the first two of any of the following countries: France,
Italy, Germany, Spain, and the United Kingdom;
(v) VIVUS shall select a trademark in consultation with Abbott, which
trademark shall be owned and registered by VIVUS, and which shall
be a Trademark under this Agreement, exclusively licensed to
Abbott in the Territory for use in connection with such Future
Product, and which shall be used where possible by VIVUS and/or
its licensees in connection with such Future Product outside the
Territory;
(vi) VIVUS shall sell such Future Product to Abbott pursuant to
Article 4, provided that (i) Article 4.3 and Exhibit 4 shall not
apply, and (ii) the price of such Future Product shall in no
event be less than VIVUS's actual variable cost (includes direct
labor and material and all overhead that is directly related to
the manufacture of such Future Product and specifically
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excludes fixed overhead items such as facilities rent,
depreciation, common utilities, taxes and insurance, etc.) of
producing such Future Product plus any royalties actually paid by
VIVUS to third parties in connection with the sale of such Future
Product; and (iii) the price of such Future Product to be used by
Abbott in the Territory as samples shall be VIVUS's actual,
variable cost (includes direct labor and material and all
overhead that is directly related to the manufacture of such
samples and specifically excludes fixed overhead items such as
facilities rent, depreciation, common utilities, taxes and
insurance, etc.) of producing such samples and;
(vii) Abbott shall be responsible for, and shall bear all costs of,
obtaining and maintaining all Regulatory Approvals for such
Future Product in the Territory, provided that clinical
development costs for such Future Product which are necessary to
support the Marketing Authorization for such Future Product in
the European Countries shall be shared by the parties as set
forth in Article 8.6(F) below.
(viii) Abbott shall use due diligence to market and sell such Future
Product in accordance with Article 9.1 below.
(E) The only obligations of VIVUS and Abbott under this Article 2.2 are as
expressly stated therein, and there are no further implied obligations
relating to the matters contemplated therein. Without limiting the
foregoing, it is further understood and agreed that the subject Future
Product(s) may or may not be discovered or reduced to practice at all,
may or may not be developed through the completion of Phase II, and that
further modification and/or variations of a Future Product may be
developed after the completion of Phase II studies. Accordingly, so long
as VIVUS provides Abbott with such data and information as required by
Article 2.2(B) above, the requirements of Article 2.2(B) above shall be
deemed satisfied with respect to any and all improvements,
modifications, variants or derivatives of the product developed or
reduced to practice after the completion of Phase II studies; to the
extent that any such improvements, modifications, variants or
derivatives were included in the definition of such Future Product as
offered shall be deemed to be included with such Future Product when it
is offered to Abbott pursuant to this Article 2.2.
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ARTICLE 3 - MILESTONES
3.1 Abbott shall pay VIVUS the following one-time, non-creditable and
non-cumulative milestone fees within thirty (30) days after the event specified:
(A) (***), upon the ALIBRA Product obtaining Marketing Authorization in the
first three (3) of the following countries: Belgium, France, Germany,
Italy, Spain, and the United Kingdom;
(B) (***), upon the first occasion on which Abbott achieves annual Net Sales
of the Products of (***) in the Territory; and
(C) (***), upon the first occasion on which Abbott achieves annual Net Sales
of the Products of (***) in the Territory.
ARTICLE 4 - PURCHASE AND SALE
4.1 Purchases and Sale of Product. Subject to the terms and conditions of this
Agreement, VIVUS shall sell Products exclusively to Abbott in the Territory and
Abbott shall purchase its requirements of Products exclusively from VIVUS, at
the Supply Price.
4.2 Supply Price. The Supply Price for the MUSE Product shall equal (***) of
Xxxxxx'x Net Sales of the MUSE Product in the Territory, calculated as provided
in Article 4.2(B) below. The Supply Price for the ALIBRA Product shall equal
(***) of Xxxxxx'x Net Sales of the ALIBRA Product in the Territory, calculated
as provided in Article 4.2(B) below. The Supply Price for both Products shall be
subject to the provisions of Article 4.3 below.
(A) In order to enable the parties to sell and purchase the Products prior
to the time in which Xxxxxx'x Net Sales for a Sales Quarter are
determined, Abbott shall pay for Products ordered, delivered and
accepted pursuant to Article 5 below based upon an interim "Transfer
Price," which shall be equal to (***) of Xxxxxx'x estimated weighted
average net selling price for an Abbott fiscal year, for the Products in
the Territory, respectively for the MUSE Product and for the ALIBRA
Product. Abbott shall advise VIVUS no later than forty-five (45) days
prior to the start of each of Xxxxxx'x fiscal years, during the term of
this Agreement, of Xxxxxx'x estimated weighted average net selling price
for each of the Products in the Territory for the coming Abbott fiscal
year, and the Transfer Price for that fiscal year shall be based upon
such price, subject to any adjustment required under Article 4.2(B)
below.
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(B) The parties shall conduct a reconciliation no later than forty-five (45)
days after the end of each Sales Quarter, in order to determine whether
one party owes the other party any amount in connection with the sale
and purchase of the MUSE Product and/or the ALIBRA Product in that Sales
Quarter, based upon the difference (if any) between the respective
Transfer Price and the Supply Price for that Sales Quarter. For the
purposes of such reconciliation, Abbott shall provide to VIVUS a
statement of Xxxxxx'x sales in units, per country in the Territory, and
of Xxxxxx'x Net Sales, per country in the Territory and in local
currency as well as in U.S. dollars, converted pursuant to Article 4.7
below. In the event that one party owes the other party any amount in
accordance with this Article 4.2(B), the owing party shall pay such
amount within thirty (30) days of the date upon which the parties have
agreed in writing upon the reconciliation calculation. In the event that
the Supply Price is greater than one hundred ten percent (110%) or less
than ninety percent (90%) of the Transfer Price for two (2) consecutive
Sales Quarters, the Transfer Price established in Article 4.2(A) above
shall be changed for the remainder of that Sales Year to the Supply
Price applicable to the most recent Sales Quarter.
4.3 Minimum Supply Price. Starting after the first Sales Year, the Supply Price
for the Products shall in no event be less than the Minimum Supply Price as set
forth in Exhibit 4 attached to this Agreement.
4.4 Samples. VIVUS shall sell a quantity of Products to Abbott for use as
samples, at "Sample Prices" as set forth in Exhibit 4 attached to this
Agreement. Abbott may purchase such samples in quantities not to exceed the
following percentages of Xxxxxx'x total unit sales of each Product in the
Territory: (***) in each of the first two (2) Sales Years; (***) in each of the
third and fourth Sales Years; and (***) in each Sales Year thereafter.
4.5 Initial Start-Up Costs. Abbott shall pay VIVUS for VIVUS's actual cost paid
to third parties for materials (including but not limited to foil and packaging
materials) associated with the modification of the packaging of the MUSE Product
to incorporate Abbott trade dress and otherwise to meet Xxxxxx'x requirements
for the sale by Abbott of the MUSE Product in the Territory ("Initial Start-Up
Costs"). VIVUS shall reimburse Abbott for the payment of such Initial Start-Up
Costs via a credit against Xxxxxx'x purchases of the MUSE Product that include
such Initial Start-Up elements. Should any of these Initial Start-Up Costs not
be reimbursed to
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Abbott, then VIVUS will provide to Abbott all documents, including copies of
third-party invoices, evidencing such costs.
4.6 Records.
(A) Abbott and/or its Affiliates shall keep and maintain records of sales
made pursuant to the license granted hereunder so that Xxxxxx'x Net
Sales and the calculation of the Transfer Price and the Supply Price may
be verified. Such records shall be open to inspection upon prior written
notice at any reasonable time during business hours, not more than once
per calendar year, and each inspection shall cover no more than the two
(2) calendar years preceding such notice of inspection. The inspection
shall be conducted at VIVUS's expense by a nationally recognized
independent certified public accountant who is not VIVUS's auditor of
record and who is selected by VIVUS and approved by Abbott, which
approval shall not be unreasonably withheld. The accountant shall be
bound by confidentiality obligations at least as stringent as those
provided in Article 19 of this Agreement, and shall then have the right
to examine the records kept pursuant to this Agreement and report to
VIVUS the findings (but not the underlying data) of the inspection as
are necessary to evidence that the records were or were not maintained
and used in accordance with this Agreement. A copy of any report
provided to VIVUS by the accountant shall be given concurrently to
Abbott. If the inspection of records reveals more than five percent (5%)
underpayment by Abbott for the purchase of the Products (calculated as a
percentage of all such payments made in connection with a Sales Year),
then the expenses for the accountant shall be borne by Abbott and Abbott
shall promptly repay to VIVUS the amount of such underpayment, plus
interest calculated at the prime rate of interest as published in the
Wall Street Journal for the date upon which such underpayment was made.
For the purposes of this Article 4.6, an "underpayment" shall not
include any amount that the parties determine is owed to VIVUS pursuant
to the reconciliation procedure set forth in Article 4.2(B) above.
(B) VIVUS and VIVUS INC. and/or its or their Affiliates shall keep and
maintain records of their costs of clinical development, regulatory work
and samples relating to any Future Product which becomes a Product under
this Agreement pursuant to Article 2.2 above, so that Abbott may verify
such costs to the extent that Abbott is obligated under this Agreement
to make payments to VIVUS based on such costs. Such records shall
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be open to inspection upon prior written notice at any reasonable time
during business hours, not more than once per calendar year, and each
inspection shall cover no more than the two (2) calendar years preceding
such notice of inspection. The inspection shall be conducted at Xxxxxx'x
expense by a nationally recognized independent certified public
accountant who is not Xxxxxx'x auditor of record and who is selected by
Abbott and approved by VIVUS, which approval shall not be unreasonably
withheld. The accountant shall be bound by confidentiality obligations
at least as stringent as those provided in Article 19 of this Agreement,
and shall then have the right to examine the records kept pursuant to
this Agreement and report to Abbott the findings (but not the underlying
data) of the inspection as are necessary to evidence that the records
were or were not maintained and used in accordance with this Agreement.
A copy of any report provided to Abbott by the accountant shall be given
concurrently to VIVUS. If the inspection of records reveals more than
five percent (5%) overpayment by Abbott for payments made based on such
costs (calculated as a percentage of all such payments made), then the
expenses for the accountant shall be borne by VIVUS and VIVUS shall
promptly repay to Abbott the amount of such overpayment, plus interest
calculated at the prime rate of interest as published in the Wall Street
Journal for the date upon which such overpayment was made. For the
purposes of this Article 4.6, an "overpayment" shall not include any
amount that the parties determine is owed to Abbott pursuant to the
reconciliation procedure set forth in Article 4.2(B) above.
4.7 Payments. Any payments due VIVUS or Abbott under this Agreement shall be
made by remitting to the bank account designated by the party to whom payment is
to be made. Any such payments shall be made in U.S. Dollars and, in the case of
quarterly payments based upon Abbott Net Sales in currencies other than U.S.
Dollars, such quarterly payments shall be the sum of payments due for the three
(3) months of the applicable quarter calculated for each such month using the
beginning and ending month's published exchange rate, set one business day prior
to month end, by Reuters divided by two (if a Reuters exchange rate is not
available for certain countries, an exchange rate established by a recognized
third party will be used). Any payment which is more than ten (10) days overdue
shall bear interest from the original due date at the prime rate of interest as
published in the Wall Street Journal for the due date.
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4.8 Taxes. Where any sum due to be paid to VIVUS hereunder is subject to any
withholding or similar tax, the parties shall use their best efforts to do all
such acts and things and to sign all such documents as will enable them to take
advantage of any applicable double taxation agreement or treaty. In the event
there is no applicable double taxation agreement or treaty, or if an applicable
double taxation agreement or treaty reduces but does not eliminate such
withholding or similar tax, Abbott shall pay such withholding or similar tax to
the appropriate government authority, deduct the amount paid from the amount due
VIVUS and secure and send to VIVUS the best available evidence of such payment.
ARTICLE 5 - FORECASTS, ORDERS, INVOICES AND TITLE
5.1 Initial Forecast. Within sixty (60) days of the Effective Date, Xxxxxx shall
give VIVUS its then current best forecast of the quantity of Products that
Xxxxxx will require from VIVUS prior to and during the first four Sales
Quarters. Xxxxxx shall break down the forecast for the period prior to the first
Sales Quarter and for the first two Sales Quarters of such forecast by month and
by Stock Keeping Unit ("SKU") per Product.
5.2 Rolling Forecasts. No later than seventy-five (75) days prior to the first
day of each Sales Quarter after the initial Sales Quarter, Xxxxxx shall give
VIVUS its then current best forecast of the quantity of Products that Xxxxxx
will require from VIVUS during each of the next four (4) Sales Quarters. Xxxxxx
shall break down the forecast for the first two such Sales Quarters of the
forecast by month and by SKU per Product.
5.3 Order and Acceptance. The forecast for the first Sales Quarter in each of
Xxxxxx'x rolling forecasts made pursuant to Article 5.2 above shall constitute
Xxxxxx'x firm order for that Sales Quarter, and all firm orders shall specify
delivery date(s) no less than ninety (90) days from the date of such firm order.
Xxxxxx shall not increase or decrease its forecast (by SKU and in total), for
the second Sales Quarter in each of Xxxxxx'x rolling forecasts made pursuant to
Article 5.2 above, by more than twenty percent (20%). VIVUS shall accept all
firm orders from Xxxxxx for quantities of Products up to and including one
hundred twenty percent (120%) of the quantity (by SKU and in total) of Products
previously forecasted by Xxxxxx for such Sales Quarter, and shall use its best
efforts to accept all firm orders from Xxxxxx for quantities of Products in
excess of that quantity of Products. Xxxxxx shall not increase or decrease its
forecast, for the third Sales Quarter in each of Xxxxxx'x rolling forecasts made
pursuant to Article 5.2 above, by more than fifty percent (50%). VIVUS shall
accept all firm orders from Xxxxxx for quantities of Products
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up to and including one hundred fifty percent (150%) of the quantity of Products
previously forecasted by Xxxxxx for such Sales Quarter, and shall use its best
efforts to accept all firm orders from Xxxxxx for quantities of Products in
excess of that quantity of Products. Once an order has been accepted by VIVUS,
then VIVUS shall be obligated to sell, and Xxxxxx shall be obligated to
purchase, the ordered Products.
5.4 Invoices. VIVUS shall invoice Xxxxxx for the Transfer Price in United States
dollars for the Products shipped. Xxxxxx shall pay VIVUS such invoiced amount
within thirty (30) days from the date of the invoice.
5.5 Delivery. VIVUS shall deliver the Products to Xxxxxx, FOB at VIVUS's
facilities located in Lakewood, New Jersey, USA. All shipping costs, liability,
ownership and logistics of Product beyond the Lakewood facility's loading dock
are the responsibility of Xxxxxx.
5.6 Conflicting Terms and Conditions. Except as otherwise provided in this
Agreement, the terms and conditions of this Agreement shall govern,
notwithstanding any additional or inconsistent terms or conditions in Xxxxxx'x
form of purchase order or similar document or in VIVUS's acknowledgment,
invoice, or similar documents.
5.7 Post-Expiration Supply. In the event that this Agreement expires pursuant to
Article 17.1 below, and Xxxxxx wishes to continue purchasing the Products from
VIVUS, the parties shall promptly negotiate in good faith the terms and
conditions of a supply agreement for the Products. The Supply Price shall not be
applicable to the sale and purchase of the Products under such separate supply
agreement.
ARTICLE 6 - SAMPLING, TESTING AND ANALYSIS
6.1 Certificate of Analysis. VIVUS shall test or cause to be tested each lot of
the Products pursuant to the Specifications before delivery to Xxxxxx. Each test
shall set forth the items tested, specifications and test results in a
certificate of analysis for each lot delivered. VIVUS shall send or cause to be
sent such certificates to Xxxxxx along with delivery of the Products. Xxxxxx is
entitled to rely on such certificates for all purposes of this Agreement. Xxxxxx
will perform any testing upon entry of the Products into the European Union, or
elsewhere in the Territory, that is necessary for the sale or distribution of
such Product in the territory.
6.2 Manufacturing Compliance.
(A) On each certificate of analysis provided to Xxxxxx pursuant to Article
6.1 above, VIVUS shall provide or cause to be provided for each lot of
the Products purchased a
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statement which will certify that the lot of Products was manufactured
in accordance with the Specifications and applicable current Good
Manufacturing Practices ("cGMP") laws and/or regulations.
(B) Notwithstanding VIVUS's obligation to provide such statement, within
ninety (90) days of the Effective Date, VIVUS shall permit Xxxxxx to
inspect, or obtain permission for such inspection, during reasonable
business hours and upon reasonable prior notice to VIVUS, those areas of
the facilities where the Products are manufactured, stored, tested and
handled and to manufacturing records of the Products manufactured by
VIVUS and/or VIVUS's third-party contract manufacturer(s).
(C) VIVUS shall advise Xxxxxx promptly if an authorized agent of any
governmental body in the Territory inspects any of the facilities
concerning the Products. VIVUS shall promptly furnish to Xxxxxx a copy
of all material documents and/or written communications relating to such
visit and the application of such visit to the Products, if any.
(D) If any such governmental body inspection and/or document or
communication described in Article 6.2(C) above gives rise to any
changes in VIVUS's or VIVUS's third-party contract manufacturer(s)
facilities or manufacturing processes, technical documentation or
record-keeping relating to the Products (or in the facilities, processes
or record-keeping of VIVUS's third-party contract manufacturer(s)),
VIVUS shall advise Xxxxxx of such changes no later than ninety (90) days
prior to the date upon which such changes become effective; provided
that, if VIVUS does not itself receive at least ninety (90) days prior
notice of any such change, then VIVUS shall notify Xxxxxx of such change
promptly after receiving its own notice.
(E) If VIVUS or VIVUS's third-party contract manufacturer(s) for any reason,
other than under Article 6.2(D) above, makes any changes in its or their
facilities or manufacturing processes, technical documentation or
record-keeping relating to the Products, VIVUS shall advise Xxxxxx of
such changes no later than ninety (90) days prior to the date upon which
such changes are to become effective. Such changes shall be deemed
accepted by Xxxxxx unless Xxxxxx notifies VIVUS to the contrary within
such ninety (90) day or other agreed period. If Xxxxxx notifies VIVUS
that Xxxxxx does not accept such changes, then the parties shall
promptly meet and mutually determine in good faith any modifications to
such changes that should be made in
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order to render such changes acceptable to Xxxxxx. The parties
acknowledge and agree that in considering or implementing any changes or
modifications to changes being considered and/or made under this Article
6.2, the parties shall act in such a manner as to avoid, as far as
possible, any delay or interruption in the supply of Products to Xxxxxx
and in Xxxxxx'x ability to market and sell the Products in the
Territory.
(F) The parties acknowledge that the specific requirements, including time
period, of Section 6.2 (D) and Section 6.2(E) above, may be modified in
writing by the separate technical agreement referred to in Section 6.6
below.
6.3 Defective Product. Xxxxxx shall notify VIVUS in writing of any claim
relating to damaged, defective or nonconforming Products or any shortage in
quantity of any shipment of the Products within thirty (30) days of receipt of
such Products. If Xxxxxx fails to give such written claim notice to VIVUS within
said thirty (30) day period, the Products shipped shall be deemed to be
conforming, not damaged nor defective at the time of delivery and shall be
deemed to be sufficient in quantity. If Xxxxxx gives such written claim notice
to VIVUS within said thirty (30) day period, then Xxxxxx and VIVUS shall, in an
appropriate manner to be agreed, jointly inspect the Products to see if claimed
nonconformity, damage or defect actually exists in the Products shipped. If
existence of claimed nonconformity, damage, defect or shortage is reasonably
verified through such inspection, VIVUS shall replace the rejected Products or
make up the shortage as soon as practicable but no later than ninety (90) days
after such verification, at no extra cost to Xxxxxx, and shall make arrangements
with Xxxxxx for the destruction of any rejected Products, at VIVUS's expense.
6.4 Discrepant Inspection Results. In the event of a discrepancy between
Xxxxxx'x and VIVUS's inspection results such that one party's results fall
within the Specifications and the other party's results fall outside the
Specifications, the parties shall cause an independent tester, mutually
acceptable to the parties, to perform comparative tests on samples of the
allegedly defective Products. The independent tester's results shall be final
and binding and the parties shall share equally in the cost of the independent
tester.
6.5 Specifications. The Specifications may be modified from time to time by
written agreement of the parties without the necessity of amending this
Agreement.
6.6 Technical Agreement. Within sixty (60) days, the respective manufacturing
groups of VIVUS and Xxxxxx shall enter into a separate technical agreement, in a
format suitable for
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submission to the regulatory authorities in each country in the Territory,
recording the Specifications and Manufacturing Standards and measures to ensure
compliance with applicable regulations relating to production, storage,
transportation and release of the Products. Such Technical Agreement will also
further define, as appropriate, the specific requirements and timing for Section
6.2 (D) and Section 6.2 (E), above.
ARTICLE 7 - PATENTS
7.1 Patent Prosecution and Maintenance. To the extent it has the right to do so,
VIVUS shall, at its sole cost and expense, maintain any patent applications and
patents listed in Exhibit 1.8 and/or included in Licensed Patents, and shall
diligently prosecute any such patent applications and obtain all available
patent term extensions; provided that VIVUS may decide, subject to Xxxxxx'x
prior written consent (which consent shall not be unreasonably withheld or
delayed), not to prosecute certain of the Licensed Patents, or to cause or
permit certain of the Licensed Patents to lapse or become abandoned in the
Territory if, in VIVUS's reasonable commercial judgment, such decision would not
adversely affect Xxxxxx'x ability to exercise its rights and perform its
obligations under this Agreement. To the extent it does not have the right to
maintain such patent applications and patents, prosecute such patent
applications and obtain patent term extensions, VIVUS shall use its best efforts
to ensure that the third party who has the right to take such actions shall do
so. VIVUS shall keep Xxxxxx informed on a quarterly basis and also on Xxxxxx'x
reasonable written request about the status of such patent applications and/or
patents, including but not limited to providing Xxxxxx with copies of all
material documents relating to the prosecution and/or the maintenance of the
Licensed Patents in a timely manner so as to allow Xxxxxx a reasonable
opportunity to review and comment on VIVUS's planned patent strategy.
ARTICLE 8 - DEVELOPMENT AND REGULATORY ISSUES
8.1 VIVUS Responsibilities. VIVUS shall be responsible for, and shall bear all
costs of, the following:
(A) VIVUS shall be responsible for obtaining all Marketing Authorizations
for the Products in Xxxxxx'x name in those countries in Europe which are
listed on Exhibit 8.1 attached to this Agreement, including but not
limited to conducting any clinical studies with the Products which may
be necessary to obtain Marketing Authorization
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for the Products, with labeling for the MUSE Product equivalent to the
labeling in effect for the MUSE Product as of the Effective Date, and
with labeling for the ALIBRA Product which the parties mutually
negotiate with the applicable governmental authorities, and for
maintaining such Marketing Authorizations until such Marketing
Authorizations are transferred to Xxxxxx. Promptly after the Effective
Date, VIVUS shall transfer to Xxxxxx all Marketing Authorizations in the
Territory for the MUSE Product, and all Marketing Authorization
applications in the Territory for the ALIBRA Product, as expeditiously
as possible.
(B) VIVUS shall provide to Xxxxxx, as expeditiously as possible, any and all
authorizations, assistance, information and/or materials in VIVUS's
possession or control required by Xxxxxx in order to enable Xxxxxx to
market and sell the Products in the Territory (including, but not
limited to authorizations, assistance, information and/or materials
relating to Regulatory Approval of the Products by the United States
Food and Drug Administration and by the European Medicines Evaluation
Agency, and to the Drug Master Files for the Products). To the extent
that any material, information, data or documents required by Xxxxxx are
not in VIVUS's possession or control, VIVUS shall use reasonable efforts
to obtain such material, information, data or documents for Xxxxxx.
(C) In fulfilling its obligations under this Agreement, VIVUS shall use its
best efforts to ensure that the Products are entitled to and receive the
maximum benefit of any regulatory market exclusivity periods or other
safeguards or extensions of proprietary status, which are or may be
applicable in the Territory.
(D) VIVUS shall be responsible for filing trademark applications for, and
for the maintenance and upkeep of, the Trademarks in the Territory.
8.2 Xxxxxx Responsibilities. During the term of this Agreement, Xxxxxx shall be
responsible for, and shall bear all cost of, the following:
(A) Xxxxxx shall be responsible for (i) maintaining all Marketing
Authorizations obtained by VIVUS for the Products in the countries
listed on Exhibit 8.1, once such Marketing Authorizations have been
transferred to Xxxxxx; (ii) obtaining all pricing and reimbursement
approvals in Xxxxxx'x name for the Product in the countries listed on
Exhibit 8.1; and (iii) obtaining and maintaining all Regulatory
Approvals in Xxxxxx'x name, including but not limited to conducting any
clinical studies with the Products
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which may be necessary to obtain Marketing Authorization for the
Products, for the countries in the Territory outside of the countries
listed on Exhibit 8.1. Should Xxxxxx in connection with the Products
conduct clinical studies, the parties endeavor to work by consensus in
the development of protocols for such clinical studies.
(B) Xxxxxx shall own all registrations and Regulatory Approvals for the
Products in the Territory.
(C) In fulfilling its obligations under this Agreement, Xxxxxx shall use its
best efforts to ensure that the Products are entitled to and receive the
maximum benefit of any regulatory market exclusivity periods or other
safeguards or extensions of proprietary status, which are or may be
applicable in the Territory.
8.3 Pharmacovigilance. Promptly after the Effective Date, the respective
pharmacovigilance groups of VIVUS and Xxxxxx shall enter into a separate
agreement covering adverse event information exchange relating to the Products.
Such agreement will permit the inclusion of the respective pharmacovigilance
groups of other third parties to whom VIVUS has granted or will grant (during
the term of this Agreement) a license under the VIVUS Technology to make, have
made, use and sell the Products in the United States or in the Xxxxxxx
Territory.
8.4 Regulatory Communications. Xxxxxx and VIVUS shall promptly inform each other
of any material communications to or from governmental authorities or agencies
relating to the Products, including but not limited to providing each other
promptly with copies of any material written communications. With the exception
of product recalls, which are to be handled pursuant to Article 10 below, or
visits by governmental body to any of the facilities where the Products are
manufactured, which are to be handled pursuant to Article 6.2 above, and of
adverse event reporting, which is to be handled pursuant to Article 8.3 above,
the parties shall consult with each other regarding any issues raised in such
communications, and shall attempt in good faith to agree upon any action to be
taken or response to be made in connection with such communications. If the
parties are unable to agree within a reasonable time prior to when the action is
to be taken or the response is to be made the party responsible for obtaining
Marketing Authorization for the Product in the country in question shall decide
what action to take or response to make.
8.5 Improvements. In the event that development and/or regulatory work and/or
costs are required in order to commercialize an Improvement, the parties shall
negotiate in good faith to
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determine the development and/or regulatory strategy and work, and how to
allocate the costs therefor.
8.6 Future Product Development Committee. For each Future Product that becomes a
Product pursuant to Article 2.2 above, Xxxxxx and VIVUS shall form a Development
Committee which shall be responsible for creating and implementing the clinical
development plan for such Future Product from Phase III forward, and for
creating and implementing the regulatory strategy for obtaining Marketing
Authorization for such Future Product in the European Countries set forth on
Exhibit 8.1 attached hereto, including the creation and management of the budget
for such clinical development of and regulatory strategy for such Future
Product. The Development Committee shall be organized and operated as set forth
in this Article 8.6.
(A) The Development Committee shall consist of no more than six (6)
individuals, an equal number of which shall be representatives,
respectively, from Xxxxxx and VIVUS, and shall be chaired alternatively
on an annual basis by one (1) of the VIVUS representatives and by one
(1) of the Xxxxxx representatives. Each party's representatives on the
Development Committee shall be an employee of such party and each shall
have one (1) vote on any matter arising for decision by the Development
Committee. Each party shall have the right, at any time, to designate by
written notice to the other party, a replacement, on a permanent or
temporary basis, for any of such party's members on the Development
Committee.
(B) The Development Committee shall endeavor to work by consensus. In the
event of a deadlock in any vote on any issue to be decided by the
Development Committee, the parties shall refer the deadlocked issue to
VIVUS's Vice President of Research and Development and Xxxxxx'x
International Division Vice President of Medical Affairs. These
individuals shall attempt, promptly and in good faith, to resolve such
issue amicably. If such issue remains deadlocked, the parties shall
refer such issue to, respectively, the President of VIVUS, and the
President of Xxxxxx'x International Division. Any issue remaining
deadlocked after this last step shall be resolved through an Alternative
Dispute Resolution ("ADR") procedure pursuant to Article 20.11 below.
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(C) The Development Committee shall meet as necessary, in person or
otherwise, as the parties shall agree, but no less than once per
calendar quarter. The chairperson shall be responsible for scheduling
and arranging such meetings and ensuring that all of the members or
their designated replacements are able to attend. Each party shall bear
its own costs, including travel costs, for its representatives on the
Development Committee attending any meeting of the Development
Committee.
(D) Within sixty (60) days of a Future Product becoming a Product under this
Agreement in accordance with Article 2.2 above, the parties shall reach
written agreement, through the Development Committee, on the plan for
the clinical development and regulatory work relating to such Future
Product for the remainder of that calendar year ("Initial Period") and,
separately, for the budget therefor. It is understood and agreed that
any clinical development or regulatory work that had already begun by
VIVUS at the time a Future Product becomes a Product under this
Agreement in accordance with Article 2.2 above, will automatically
become a part of the written agreement on the plan for the clinical
development and regulatory work related to such Future Product including
the budget therefor and will not require the approval of the Development
Committee as long as this plan and a reasonable estimate of costs was
provided to Xxxxxx during the ninety (90) day evaluation period
described in Article 2.2 (B) above. Following the Initial Period, at
least ninety (90) days prior to January 1 of each year, the Development
Committee will update such plan and budget therefor for the next
calendar year. Each such plan and budget must be approved by the
Development Committee, and by VIVUS's President and Xxxxxx'x
International Division Vice President of Medical Affairs, such approval
not to be unreasonably withheld, before the Development Committee may
implement such plan and budget. Notwithstanding any other provision in
this Agreement to the contrary, Xxxxxx shall not be obligated to make
any payments with respect to any clinical development work done in
connection with any Future Product unless such work, and the budget
therefor, was approved in accordance with this Article 8.6(D).
(E) All applications for Regulatory Approval for such Future Product in the
Territory shall
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be made in Xxxxxx'x name and all Regulatory Approvals obtained in the
Territory for such Future Product shall be owned by Xxxxxx.
(F) VIVUS shall bear the costs of all clinical development of such Future
Product that are necessary to support the Marketing Authorization for
such Future Product in the European Countries, except as provided
otherwise expressly in Article 2.2(D) above.
(G) Xxxxxx shall bear the costs of, and make all final decisions with
respect to, the regulatory strategy for all aspects of obtaining
Regulatory Approval in the Territory.
(H) At the written request of VIVUS, the Development Committee for a given
Future Product shall be expanded to include VIVUS's other licensee(s),
if any, for such Future Product outside the Territory that become a
licensee after the Effective Date of this Agreement, for the sole
purpose of making the clinical development of such Future Product as
efficient as possible on a worldwide basis. Xxxxxx and VIVUS intend that
the Development Committee's discussions and activities shall comply at
all times with applicable laws and regulations, including but not
limited to applicable antitrust and/or competition law, and no
commercial information shall be shared, or discussion of commercial
issues shall be permitted. Each such additional VIVUS licensee shall
have an equal number of members on the Development Committee as do VIVUS
and Xxxxxx respectively, and VIVUS shall ensure that each such
additional VIVUS licensee complies with the Development Committee
procedures as set forth in this Article 8.6. Xxxxxx shall not be
required, and VIVUS shall not be permitted, to share any clinical or
other data generated by Xxxxxx with such additional licensee(s) without
Xxxxxx'x prior written consent and such consent will not be unreasonably
withheld. Xxxxxx shall not be required to pay any portion of the costs
of any clinical studies or other clinical development that relate to any
country or area outside the Territory, except as provided otherwise
expressly in Article 2.2(D) above.
ARTICLE 9 - MARKETING AND SALES
9.1 Xxxxxx Diligence. In addition to the items set forth in Article 3.1 above,
Xxxxxx shall use its diligent efforts to market and/or sell the Products in the
Territory, consistent with the efforts that Xxxxxx expends on pursuing
commercialization of Xxxxxx'x own products of similar market
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potential, including but not limited to products for the treatment of erectile
dysfunction, taking into consideration the proprietary or non-proprietary status
of the Products and determining, in Xxxxxx'x best commercial judgment, whether
and how to launch the Products in a given country of the Territory, and what if
any promotional tools are reasonably necessary or desirable in marketing and/or
selling the Products in the Territory. Xxxxxx shall make any such launches and
utilize any such promotional tools at Xxxxxx'x own expense.
9.2 Missed Targets. In the event that the fee provided in Article 3.1(B) above
does not become payable by the end of the third Sales Year, or that the fee
provided in Article 3.1(C) above does not become payable by the end of the sixth
Sales Year, then VIVUS may terminate this Agreement upon thirty (30) days
written notice; provided that in either event, if Xxxxxx'x annual Net Sales are
at least (i) sixty percent (60%) of the amount specified in Article 3.1(B) or
(C) (as the case may be) in the European Countries listed in Exhibit 8.1 or (ii)
seventy-five percent (75%) of the amount specified in Article 3.1(B) or (C) (as
the case may be) in the Territory, as of the date of VIVUS's notice of
termination, then Xxxxxx may, at its option, avoid termination by paying to
VIVUS an amount equal to the fee otherwise applicable under Article 3.1(B) or
(C) (as the case may be). If Xxxxxx makes such payment within thirty (30) days
of the date of VIVUS's notice of termination, then such notice shall become null
and void, and this Agreement shall remain in full force and effect.
ARTICLE 10 - PRODUCT RECALL
10.1 Recall in the Territory. In the event that, in the Territory, (i) any
government authority issues a request, directive or order that a Product be
recalled, or (ii) a court of competent jurisdiction orders such a recall, or
(iii) Xxxxxx and VIVUS jointly determine that a Product should be recalled,
Xxxxxx shall take all appropriate corrective actions. If such recall results
from any cause or event attributable solely to VIVUS's negligence or fault,
VIVUS shall be responsible for the direct expenses of the recall. If such recall
results from any cause or event attributable solely to Xxxxxx'x negligence or
fault, Xxxxxx shall be responsible for the direct expenses of the recall. If
such recall results from any other cause or event (including attribution to the
negligence or fault of both VIVUS and Xxxxxx), the parties shall share equally
the direct expenses of the recall. For the purposes of this Agreement, the
direct expenses of recall shall include, without limitation, the expenses of
notification and return of the recalled Products and
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Xxxxxx'x costs for the Products, and shall not include the cost of any relaunch
by Xxxxxx of the Products in the Territory subsequent to a recall.
10.2 Recall Outside the Territory. In the event that, outside the Territory, (i)
any government authority issues a request, directive or order that a Product be
recalled, or (ii) a court of competent jurisdiction orders such a recall, or
(iii) VIVUS (or its Affiliates or sublicensees, as the case may be) decides that
the Products should be recalled, VIVUS shall notify Xxxxxx no later than five
(5) business days prior to the effective date of such recall, and shall provide
Xxxxxx with all information and assistance as Xxxxxx may reasonably request in
order to enable Xxxxxx to determine any appropriate actions relating to the
Products in the Territory arising from such recall.
ARTICLE 11 - REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants for itself as follows:
11.1 Organized. It is a corporation duly organized, validly existing and is in
good standing under the laws of the jurisdiction of its incorporation, is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification and failure to have such would prevent it
from performing its obligations under this Agreement and has all requisite
corporate power and authority to conduct its business as now being conducted, to
own, lease and operate its properties and to execute, deliver and perform this
Agreement.
11.2. Due Execution. The execution, delivery and performance by it of this
Agreement have been duly authorized by all necessary corporate action and do not
and will not (i) require any consent or approval of its stockholders, (ii)
violate any provision of any law, rule, regulation, order, writ, judgement,
injunction, decree, determination or award presently in effect having
applicability to it or any provision of its charter or by-laws, or (iii) result
in a breach of or constitute a default under any material agreement, mortgage,
lease, license (including any license from a third party which is necessary for
the full performance of this Agreement), permit or other instrument or
obligation to which it is a party or by which it or its properties may be bound
or affected.
11.3 No Third Party Approval. No authorization, consent, approval, license,
exemption of, or filing or registration with, any court or governmental
authority or regulatory body (other than health regulatory authorities) is
required for the due execution, delivery or performance by it of this Agreement,
except as provided herein.
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11.4 Binding Agreement. This Agreement is a legal, valid and binding obligation
of such party, enforceable against it in accordance with its terms and
conditions. It is not under any obligation to any person, contractual or
otherwise, that is in conflict with the terms of this Agreement. 11.5 Full
Disclosure. Each Party has disclosed to the other in good faith all material
information relevant to the subject matter of this Agreement and to such party's
ability to observe and perform its obligations hereunder. VIVUS further warrants
that it has disclosed to Xxxxxx all material information of which it is aware
necessary or appropriate to evaluate the Licensed Patents, the safety and
efficacy of the Products, and VIVUS manufacturing capacity for the Products.
Such disclosure includes information contained in publicly available filings
with the Securities & Exchange Commission.
ARTICLE 12 - COVENANTS, REPRESENTATIONS AND WARRANTIES OF VIVUS
VIVUS covenants, represents and warrants to Xxxxxx that:
12.1 Agreements. The only agreements in existence as of the Effective Date under
which VIVUS has acquired rights to Licensed Patents are listed in Exhibit 12.1
attached to this Agreement ("Third Party Licenses"). All rights with respect to
Licensed Patents referenced in Exhibit 12.1 as patents for which "Place" or
"Place, et al" are listed as inventor are either included in the license from
Alza or have otherwise been transferred to VIVUS and are owned by VIVUS. The
"Xxxx Patents," (collectively, the Licensed Patents, rights and technology
granted to (i) Ortho Pharmaceutical Corporation by Xxxx X. Xxxx and Xxxx X.
Xxxxxxx dated January 4, 1991, and assigned to VIVUS by Assignment from Ortho
Pharmaceutical Corporation dated January 9, 1992, and (ii) VIVUS by Xxxx X. Xxxx
and Xxxx X. Xxxxxxx dated December 28, 1992) are not necessary to use,
manufacture, have manufactured, sell, or have sold Products in the Territory,
and Xxxxxx'x use, manufacture, have manufactured, use, sale and have sold of
Products in the Territory will not infringe the Xxxx Patents. To the best of the
knowledge of VIVUS as of the Effective Date, and other than as set forth above
with respect to the Xxxx Patents, the Licensed Patents and Third Party Licenses
are the only patents, know-how and technology necessary to make, have made, use
and sell the Products.
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12.2 VIVUS Obligations. VIVUS covenants, represents and warrants to Xxxxxx with
respect to the Third Party Licenses that (i) VIVUS and its Affiliates will fully
comply with all of VIVUS's covenants and obligations thereunder, to the extent
material to Xxxxxx'x rights under this Agreement, (ii) the Third Party Licenses
are in full force and effect, not having been amended, other than as set forth
in Exhibit 12.1 attached to this Agreement, (iii) VIVUS and its Affiliates have
received no oral or written notification of any alleged breach or default by
VIVUS and/ or its Affiliates (iv) VIVUS and its Affiliates are not aware of any
breach or default thereof by any third party, (v) VIVUS has the full right and
authority to sublicense VIVUS and its Affiliates' rights to Xxxxxx, and (vi)
VIVUS and its Affiliates will not terminate, or otherwise amend the Third Party
Licenses, in any manner which would materially adversely affect Xxxxxx'x rights
under this Agreement.
12.3 Specifications. All quantities of the Products will comply with, and VIVUS
shall only release Products for shipment to Xxxxxx which comply with (i) all
specifications of the Products (respectively as to the MUSE Product and the
ALIBRA Product) in the Marketing Authorization applications approved by the
regulatory authorities in the respective countries of the Territory, (ii) all
Specifications, and (iii) all applicable legal and regulatory requirements
relating to the manufacture of the Products for sale in the Territory, including
but not limited to Good Manufacturing Practices.
12.4 Quality of Starting Materials and Packing Materials. All starting materials
and packaging materials used in the manufacture of each of the Products shall
comply with the applicable Specifications and the Manufacturing Standards (as
defined below).
12.5 Current Good Manufacturing Practices ("cGMP") /Regulatory Requirements. All
manufacturing and quality control methods utilized by VIVUS in the manufacture
of the Products shall be carried out according to the procedures and
requirements set forth in the then-current version of the VIVUS Site Master File
for the Medicines Control Agency, or the Site Master File for Xxxxxxx
International to the extent that any country listed in Exhibit 1.7 becomes a
part of the Territory in accordance with Article 2.1(B) above, with respect to
each such Product, and (as to each Product) in accordance with all applicable
rules governing medicinal products and/or medical devices in the Good
Manufacturing Practice for medicinal products
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and/or medical devices and regulations issued by the health regulatory
authorities in the countries of the Territory for which such Product is to be
sold as in effect at the time and the applicable standards in effect at the time
(collectively, the "Manufacturing Standards").
12.6 Documentation. VIVUS shall keep and maintain, for the approved shelf life
of each Product plus two (2) years (i) reference samples and quality control
records for each batch of starting materials and packaging material used in the
manufacture of the Products, and (ii) manufacturing and quality control records
for each batch of the Products. Each shipment of the Products shall be
accompanied by the following written documentation: (i) the date of manufacture,
(ii) delivered amount of Product units, (iii) a certificate of analysis pursuant
to Article 6.
12.7 Xxxxxx Right of Inspection. Following Xxxxxx'x initial facilities and
records inspection as provided in Article 6.2(B) above, VIVUS shall, upon
written request of Xxxxxx, permit Xxxxxx'x authorized representative to inspect
the following: (i) all manufacturing and quality control records for all
manufacture of the Products, and (ii) quality control records of all starting
materials used in the manufacture of each of the Products.
12.8 Compliance with Laws and Regulations. All Product delivered to Xxxxxx
pursuant to this Agreement will, to the best of VIVUS's knowledge, at the time
of such delivery not be adulterated or misbranded within the meaning of
applicable laws and regulations, and will not be an article which may not, under
the provisions of such applicable laws and regulations, be introduced in
commerce.
12.9 Shelf Life. Each lot of the Products delivered pursuant to this Agreement
will continue until the applicable expiration date, to conform to the
Specifications. At the time of delivery to Xxxxxx, each lot of the Product
delivered pursuant to this Agreement shall be no more than four (4) months past
its manufacturing date.
12.10 Highest Quality. In manufacturing and releasing to Xxxxxx the Products in
compliance with the Specifications, the Manufacturing Standards, and otherwise
as represented, warranted and covenanted by VIVUS in this Article 12, VIVUS
shall provide to Xxxxxx under this Agreement Products which are of the same or
better quality as the Products marketed by VIVUS or its licensee(s) outside the
Territory, and which meet any other requirements imposed by the relevant
government authorities for the marketing and sale of the Product in the
Territory.
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12.11 Patent Validity and Enforceability As of the Effective Date, VIVUS has no
knowledge or information that would materially impact the validity and/or
enforceability of the Licensed Patents and the Licensed Patents have not been,
and will not be, knowingly obtained through any activity, omission or
representation that would limit or destroy the validity of the Licensed Patents.
12.12 Legal Actions There are no actions pending, or, to the best of VIVUS's
knowledge as of the Effective Date, threatened before any court or other
tribunal or body relating to the Licensed Patents.
12.13 Complete Patents/Ownership Exhibit 1.8 lists all patents issued and patent
applications in existence on or before the Effective Date and, except for the
patents licensed to VIVUS, VIVUS is named in the patents and patent applications
listed in Exhibit 1.8 and all inventors named therein have assigned, or are
under obligation to assign, to VIVUS all of their right, title and interest in
the inventions claimed. None of the Licensed Patents as of the Effective Date
has lapsed by reason of abandonment or nonpayment of annuities.
12.14 VIVUS-Astra Agreement. VIVUS represents, warrants and covenants to Xxxxxx
that VIVUS and Astra have mutually agreed to terminate the Astra Agreement,
independent of any action by Xxxxxx, and that VIVUS shall use its best efforts,
in accordance with applicable law and not in violation of any contractual
obligations it may have toward Astra AB, to enable Xxxxxx to exercise the
exclusive license granted under this Agreement without restrictions relating to
any Astra AB rights, as expeditiously as possible.
ARTICLE 13 - FORCE MAJEURE
Upon occurrence of an event of force majeure, the party affected shall promptly
notify the other party in writing, setting forth the details of the occurrence,
its expected duration and how that party's performance of its obligations under
this Agreement is affected. The affected party shall resume the performance of
its obligations as soon as practicable after the force majeure event ceases. If
a party's performance of any obligation under this Agreement is significantly
hindered or is prevented by an event of force majeure for more than six (6)
months, whether or not consecutive, in any twelve (12) month period, then the
other party may terminate this Agreement upon thirty (30) days' notice.
ARTICLE 14 - ALLOCATION OF SUPPLY
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14.1 Allocation of Supply. In the event of VIVUS's inability for any reason to
supply the Products ordered by Xxxxxx, VIVUS shall allocate its available supply
between Xxxxxx, VIVUS and VIVUS's licensee(s) outside the Territory on a fair
and equitable basis based on a pro-rata share of worldwide Product sales for the
six (6) months preceding and the forecasted worldwide Product sales for the next
six (6) months following such allocation. If VIVUS is unable to supply ninety
percent (90%) of the Products (on a Product-by-Product basis) ordered by Xxxxxx
and accepted by VIVUS pursuant to Articles 5.3, 5.5 and 5.6 of this Agreement
for a total of four (4) Months, whether or not consecutive, in any consecutive
twelve (12) Month period, Xxxxxx may at its sole option: (i) forgo the
quantities ordered that VIVUS is unable to supply; (ii) take delivery within a
reasonable period of time after VIVUS becomes able to supply the quantities
ordered; or (iii) make or have a third party make, or permit VIVUS to have a
third party (approved by Xxxxxx) make, the Product that VIVUS fails to supply.
14.2 Quality Assurance. In the event that an inspection or report by an
authorized agent of a governmental agency in the Territory reveals that VIVUS's
(or VIVUS's third-party contractor's) facilities and processes for manufacturing
the Products do not comply with applicable laws and regulations, including
without limitation Good Manufacturing Practices, and such lack of compliance
results in VIVUS's inability to fulfill its obligations to Xxxxxx under this
Agreement, then Xxxxxx may, at its sole option, make or have a third party make,
or permit VIVUS to have a third party (approved by Xxxxxx) make, the Products
that VIVUS is not able to supply.
14.3 Right to Manufacture Product. In the event Xxxxxx selects option 14.1(iii)
and/or option 14.2 above, then Xxxxxx shall have the right to make and/or have a
third party make Product and such right shall continue in effect until such time
as VIVUS provides Xxxxxx not less than six (6) months notice and demonstrates
that it is able to adequately supply Xxxxxx'x reasonable requirements of Product
in the Territory and VIVUS shall transfer to Xxxxxx or to Xxxxxx'x or VIVUS's
designated third party manufacturer all information, assistance, materials and
authorizations useful and necessary with respect to the manufacture, storage and
shipment of the Products, in a timely manner so as to avoid any delay or
interruption in supply of the Products to Xxxxxx. VIVUS shall reimburse Xxxxxx
for up to (***) of Xxxxxx'x actual, verified out-of-pocket start-up costs
incurred by Xxxxxx to manufacture Product under this Article 14.3. Xxxxxx shall
pay to VIVUS a royalty on the Net Sales of such Products that are manufactured
under this Article 14.3 equal to the greater of (i) the Supply Price pursuant to
Article 4.2 above less
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Xxxxxx'x actual cost of obtaining such Product from a third party or its
variable cost (includes direct labor and material and all overhead that is
directly related to the manufacture of such Product and specifically excludes
fixed overhead items such as facilities rent, depreciation, common utilities,
taxes and insurance, etc.) to manufacture such Product and, (ii) (***) of Net
Sales of such Product.
ARTICLE 15 - TRADEMARKS
15.1 Trademark Rights. VIVUS hereby grants to Xxxxxx the exclusive right,
exclusive even as to VIVUS, to use the Trademarks in connection with the
Products in the Territory during the term of this Agreement. Xxxxxx acknowledges
that such Trademarks shall be and are the sole property of VIVUS. In the event
that VIVUS decides to divest itself of the Trademarks, VIVUS shall assign such
Trademarks in the Territory to Xxxxxx upon Xxxxxx'x written request.
15.2 Electronic Address. VIVUS hereby grants to Xxxxxx a non-exclusive right to
use VIVUS's registered electronic address, xxx.xxxxx.xxx, for the purpose of
linking electronic users with Xxxxxx'x relevant web pages, web sites or other
electronic addresses relating to the Product in the Territory.
15.3 Xxxxxx'x Own Xxxx. In the event that Xxxxxx is unable to use the Trademarks
in connection with the Products in the Territory, for legal, regulatory or
cultural reasons, Xxxxxx may elect to use trademarks of its own choosing in
connection with the Products in the Territory, after consultation with VIVUS,
instead of the Trademarks. VIVUS acknowledges that such trademarks shall be and
are the sole property of Xxxxxx, and that the cost of adoption and registration
of such trademarks shall be borne by Xxxxxx.
ARTICLE 16 - INFRINGEMENT
16.1 Third Party Infringement. Each party will notify the other party if it
becomes aware of the activities of any third party, which are believed to
infringe any of the Licensed Patents or the Trademarks. The parties shall
consult as to potential strategies against the alleged infringer, including but
not limited to litigation strategy.
16.2 Litigation.
(A) If the efforts of the parties are not successful in abating the alleged
infringement, then VIVUS shall have the right, but not the obligation,
to bring an appropriate suit or action against such infringement, at its
own expense. Xxxxxx agrees to cooperate
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in any such infringement action and agrees to execute all papers and
perform such other acts as may be reasonably requested by Xxxxxx, at
VIVUS's expense. VIVUS shall consult with Xxxxxx and take into account
Xxxxxx'x recommendations regarding the conduct of such action, provided
that VIVUS shall have full right and authority to determine the strategy
and tactics for such action and to settle, consent to judgment, or
otherwise resolve any such action or suit. The provisions of the
foregoing notwithstanding, no such resolution shall be binding on Xxxxxx
without its prior written consent (which consent shall not be
unreasonably withheld) unless such resolution does not (i) impose any
liability, loss, cost or obligation upon Xxxxxx and (ii) adversely
affect Xxxxxx'x rights under this Agreement.
(B) If VIVUS does not elect to bring suit against the alleged infringer,
Xxxxxx shall have the right, but not the obligation, to bring an
appropriate suit or action against such infringer in the Territory, at
Xxxxxx'x own expense. VIVUS agrees to cooperate in any such infringement
action and agrees to execute all papers and perform such other acts as
may be reasonably requested by Xxxxxx (including but not limited to
consent to be joined as a nominal party plaintiff in such action), at
Xxxxxx'x expense. Xxxxxx shall consult with VIVUS and take into account
VIVUS's recommendations regarding the conduct of such action, provided
that Xxxxxx shall have full right and authority to determine the
strategy and tactics for such action and to settle, consent to judgment,
or otherwise resolve any such action or suit. The provisions of the
foregoing notwithstanding, no such resolution shall be binding on VIVUS
without its prior written consent (which consent shall not be
unreasonably withheld) unless such resolution does not (i) impose any
liability, loss, cost or obligation upon VIVUS and (ii) adversely affect
VIVUS's rights under this Agreement.
(C) If VIVUS or Xxxxxx brings an infringement action pursuant to this
Article 16, any amount recovered in any action or suit against a third
party infringer shall be allocated as follows: first, to the party
bringing such action in order to reimburse such party for the costs and
expenses of such action; second, with respect to any remaining amount,
sixty percent (60%) of that portion of such amount resulting from
infringement within the Territory to Xxxxxx, and the rest of any
remaining amount to VIVUS.
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16.3 Alleged Infringement of Third Party Intellectual Property.
(A) VIVUS shall indemnify and hold Xxxxxx harmless against any judgment,
damage, loss, cost or other expense (including legal fees) resulting
from any claim or suit alleging infringement of any patent or trademark
owned by a third party arising from Xxxxxx'x or its Affiliates' or
sublicensees' use or sale of the Products and/ or any Improvements and/
or use of any of the Trademarks in the Territory. Xxxxxx shall promptly
give notice to VIVUS of any such claim or suit, and VIVUS shall have
full control over the defense of such claim or suit; provided that
Xxxxxx shall have the right to participate, at its own expense, with
counsel of its own choosing, in such defense. Xxxxxx shall provide to
VIVUS such reasonable assistance at VIVUS's expense as VIVUS may, from
time to time, reasonably request. VIVUS, at its option and expense, may
dispose of such claim or may conduct the defense of such suit. If Xxxxxx
becomes obligated to make any payment, including but not limited to
royalties and/ or damages, to any third party for patent, trademark or
other intellectual property infringement allegedly attributable to the
Products, in order to use and sell the Products in the Territory, such
payments shall be creditable against Xxxxxx'x purchases of the Products,
which would otherwise be payable to VIVUS hereunder. Xxxxxx shall use
its best efforts to minimize its third-party payment obligations under
this circumstance. VIVUS shall not dispose of any such claim or suit by
agreement, in any fashion which causes Xxxxxx to be enjoined or
otherwise prohibited from using or selling the Products in any country
or countries of the Territory, without Xxxxxx'x prior written consent.
(B) If Xxxxxx is enjoined or otherwise prohibited from using or selling the
Products in a given country in the Territory as a result of alleged
patent or trademark infringement, then Xxxxxx may exclude such country
from the Territory upon written notice within thirty (30) days of the
date of such final, permanent, unappealable or unappealed injunction or
other order. If Xxxxxx is enjoined or otherwise prohibited from making,
having made, using or selling any of the Products and/or any of the
Improvements and/or from using any of the Trademarks in all or a
significant portion of the Territory as a result of alleged patent or
trademark infringement, then, at Xxxxxx'x sole discretion, Xxxxxx may
exclude such portion of the Territory from this Agreement, or terminate
this Agreement upon
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written notice within thirty (30) days of the date of such final,
permanent, unappealable or unappealed injunction or other order.
ARTICLE 17 - TERM AND TERMINATION
17.1 Term. The term of this Agreement shall commence on the Effective Date and
shall, unless earlier terminated pursuant to this Article 17 or other express
termination provisions in this Agreement, expire on a country-by-country and
Product-by-Product basis upon the later to occur of (i) the expiration of the
last Valid Claim that would be infringed by the manufacture, sale or use of the
Product in such country, and (ii) the tenth (10th) anniversary of the First
Commercial Sale of such Product. Upon the expiration of this Agreement and upon
Xxxxxx'x request the parties shall negotiate transfer of all rights to the
Trademarks in the Territory to Xxxxxx.
17.2 Breach. Either party may, in addition to any other remedies available to it
by law or in equity, terminate this Agreement upon sixty (60) days' written
notice in the event that the other party commits a material breaches of this
Agreement and fails to cure such breach within sixty (60) days of notice of the
breach. The party giving notice of breach may withhold any payments otherwise
due and owing to the breaching party, to be used as a setoff against any loss or
damage arising from the breach, and said withholding shall not constitute breach
of this Agreement. Any amounts so withheld shall be deposited by the withholding
party into an interest-bearing escrow account. If the breaching party cures the
breach within the sixty (60) day cure period and this Agreement is not
terminated, then the withholding party shall promptly pay to the other party the
withheld amount, less that portion of such amount which was applied as a setoff.
Notwithstanding the foregoing provision, if Xxxxxx gives notice of breach to
VIVUS, Xxxxxx may withhold other payments pursuant to this Article 17.2 but
shall not be entitled to withhold payment for Product actually ordered by and
delivered to Xxxxxx pursuant to Article 5 of this Agreement.
17.3 Insolvency or Bankruptcy. Either party may, in addition to any other
remedies available to it by law or in equity, terminate this Agreement, upon
thirty (30) days' written notice to the other party in the event the other party
shall have become insolvent or bankrupt, or shall have made an assignment for
the benefit of its creditors, or there shall have been appointed a trustee or
receiver of the other party or for all or a substantial part of its property, or
any case or proceeding shall have been commenced or other action taken by or
against the other party in bankruptcy or
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seeking reorganization, liquidation, dissolution, winding-up, arrangement,
composition or readjustment of its debts or any relief under any bankruptcy,
insolvency, reorganization or other similar act or law of any jurisdiction now
or hereinafter in effect.
17.4 Serious Events. Should there occur serious and unexpected events which,
from a reasonable pharmaceutical company's point of view, would make it
impossible or impracticable to pursue the commercialization of the Products,
including but not limited to a serious adverse event associated with the
Products, either party may, with full consultation with the other party,
terminate this Agreement upon thirty (30) days' written notice. Termination by a
party in good faith pursuant to this Article 17.4 shall not, in itself,
constitute a basis for any claim for compensation or other remedies by the other
party.
17.5 Lack of Commercial Viability. Xxxxxx may terminate this Agreement, on a
country-by-country and Product-by-Product basis, upon one hundred eighty (180)
days' notice if, in Xxxxxx'x reasonable commercial judgement, the Product(s) are
not commercially viable in such country. In the event that Xxxxxx terminates
this Agreement for one but not both of the Products in a country of the
Territory under this Article 17.5, all rights to use and sell such Product in
such country shall revert to VIVUS as of the effective date of such termination,
and Xxxxxx shall ensure that all registrations and Regulatory Approvals for such
Product in such country shall be promptly assigned to VIVUS. In the event that
Xxxxxx terminates this Agreement for both Products in a country of the Territory
under this Article 17.5, such country shall cease to be part of the Territory
for all purposes of this Agreement, all rights to use and sell Products in such
country shall revert to VIVUS as of the effective date of such termination, and
Xxxxxx shall ensure that all registrations and Regulatory Approvals for the
Products in such country shall be promptly assigned to VIVUS. Termination by
Xxxxxx in good faith pursuant to this Article 17.5 shall not, in itself,
constitute a basis for any claim for compensation or other remedies by the other
party.
17.6 Change of Control or Ownership. Either party may terminate this Agreement
upon thirty (30) days' written notice if the ownership or control of at least
fifty percent (50%) of the assets or voting securities of the other party are
transferred and, in the non-changing party's reasonable judgement, the other
party's new owner or controlling entity is a competitor of the non-changing
party in the field of erectile dysfunction.
17.7 Survival of Liability. Except as expressly provided otherwise in this
Agreement, termination, expiration, cancellation or abandonment of this
Agreement through any means and
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for any reason shall not relieve the parties of any obligation accruing prior
thereto and shall be without prejudice to the rights and remedies of either
party with respect to any antecedent breach of any provision of this Agreement.
17.8 Remaining Inventory. Xxxxxx shall maintain a normal level of inventory of
the Products prior to expiration or termination of this Agreement, and shall
have a period of six (6) months from the date of termination of this Agreement
during which it may sell its remaining inventory of Products, provided it sell
such inventory in a manner substantially similar to the manner in which it was
selling Products prior to the termination.
17.9 Survival. Upon expiration or termination of this Agreement, all rights and
obligations of the parties under this Agreement shall terminate except those
rights and obligations described in Articles 1, 4.6, 10.1, 12.6, 17, 18, 19 and
20.
ARTICLE 18 - INDEMNITY
18.1 By VIVUS. In addition to indemnification expressly provided elsewhere in
this Agreement, VIVUS shall indemnify, defend and hold Xxxxxx, its directors,
employees, agents and representatives (including but not limited to Xxxxxx'x
Affiliates and sublicensees) harmless from and against all claims, causes of
action, settlement costs (including but not limited to reasonable attorney's
fees and expenses) losses or liabilities of any kind which:
(A) arise from or are attributable to any negligent act or omission or
willful misconduct on the part of VIVUS or its Affiliates, or its or
their directors, employees, agents or representatives relating to any of
VIVUS's obligations under this Agreement, including but not limited to
any breach of a representation or warranty;
(B) arise from or are attributable to a defect in the MUSE Product or in the
manufacture of a Product, or from the failure of a Product to meet the
Specifications and the Manufacturing Standards, including any theory of
strict liability or any other theory of product liability, and which in
either case are not otherwise attributable to any negligent act or
omission or willful misconduct on the part of Xxxxxx, its directors,
employees, agents or representatives (including, but not limited to,
Xxxxxx'x Affiliates); or
(C) arise from or are attributable to any act or omission of VIVUS or Astra
AB or, respectively, its Affiliates, or its or their directors,
employees, agents or
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representatives relating to the Astra Agreement, or any act or omission
of Xxxxxx or its Affiliates, or its or their directors, employees,
agents or representatives which allegedly causes harm or damage or loss
of rights to Astra AB or its Affiliates, or its or their directors,
employees, agents, shareholders or representatives in connection with
the Astra Agreement.
18.2 By Xxxxxx. In addition to indemnification expressly provided elsewhere in
this Agreement, Xxxxxx shall indemnify, defend and hold VIVUS, its directors,
employees, agents and representatives harmless from and against all claims,
causes of action, settlement costs (including but not limited to reasonable
attorney's fees and expenses) losses or liabilities of any kind which:
(A) arise from or are attributable to any negligent act or omission or
willful misconduct on the part of Xxxxxx, its directors, employees,
agents or representatives relating to any of its obligations under this
Agreement; or
(B) arise from or are attributable to the storage, use, sale, marketing and
promotion of the Products by Xxxxxx in the Territory and which in either
case are not otherwise attributable to a defect in the MUSE Product or
in the manufacture of a Product or the failure of a Product to meet the
Specifications and Manufacturing Standards as set forth in Article
18.1(B) above, and which in either case are not otherwise attributable
to any negligent act or omission or willful misconduct on the part of
VIVUS, its directors, employees, agents or representatives
18.3 Condition of Indemnification. If either party expects to seek
indemnification under this Article, it shall promptly give notice to the
indemnifying party of the basis for such claim of indemnification. If
indemnification is sought as a result of any third party claim or suit, such
notice to the indemnifying party shall be within fifteen (15) days after receipt
by the other party of such claim or suit (if to Xxxxxx, notice to Xxxxxx
Laboratories, Risk Management, D-317, 000 Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, XX
00000-0000, with copy to the Xxxxxx persons identified in Article 20.5 below; if
to VIVUS, notice as set forth in Article 20.5 below); provided, however, that
the failure to give notice within such time period shall not relieve the
indemnifying party of its obligation to indemnify unless it shall be materially
prejudiced by the failure. The indemnifying party shall have full control over
the defense of such claim or suit; provided that the indemnified party shall
have the right to participate, at its own expense, with counsel of its own
choosing, in such defense. The indemnified party shall fully cooperate with the
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indemnifying party in the defense of all such claims or suits. The indemnifying
party shall make no offer of settlement, settlement or compromise without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld) unless such settlement fully releases the indemnified
party without any liability, loss, cost or obligation.
18.4 Term of Indemnification. The obligations of the parties set forth in this
Article 18 shall apply during the term of this Agreement and for a period of
five (5) years after the date of termination in whole or expiration of this
Agreement or any extension thereof.
ARTICLE 19 - CONFIDENTIALITY AND DISCLOSURE
19.1 Confidentiality. Neither party shall use or disclose any Confidential
Information received by it pursuant to this Agreement without the prior written
consent of the other. This obligation shall continue for a period of seven (7)
years after expiration or termination of this Agreement.
19.2 Disclosure. Nothing contained in this Article shall be construed to
restrict the parties from disclosing Confidential Information as required: (i)
for regulatory, tax, securities or customs reasons, (ii) by court or other
government order, (iii) for confidential audit purposes, or, (iv) from using
such Confidential Information as is reasonably necessary to perform acts
permitted by this Agreement, including the registration, marketing, sale or use
of the Product; provided that the disclosing party shall, in the event of
disclosure under Articles (i) or (ii) above, provide the other party with not
less than five (5) business days notice prior to disclosure (except where the
disclosing party itself receives less than five (5) business days prior notice,
in which case the disclosing party shall immediately notify the other party),
and the disclosing party shall fully cooperate with the other party to the
extent permitted by law, so that the other party may make any objections and/or
secure any protective provisions it deems reasonably necessary.
ARTICLE 20 - MISCELLANEOUS
20.1 Assignment. This Agreement may not be assigned or otherwise transferred,
nor, except as expressly provided hereunder, may any right or obligation
hereunder be assigned or transferred by either party without the prior written
consent of the other party; provided, however, that either VIVUS or Abbott may,
without such consent, assign this Agreement and its rights and obligations
hereunder in connection with the transfer or sale of all or substantially all of
its assets, its merger or consolidation or any similar transaction, and that
Abbott may, without
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such consent, assign this Agreement and its rights and obligations hereunder to
one or more of its Affiliates. Any permitted assignee shall assume all
obligations of its assignor under this Agreement.
20.2 Sublicensees. In the event that Abbott grants sublicenses under Article 2,
Abbott shall ensure that such sublicensees shall abide by all the obligations of
Abbott contained in this Agreement to the extent that such obligations are
relevant to and applicable to such sublicensees.
20.3 Damages. Notwithstanding any provision in this Agreement to the contrary,
in no event shall a party hereto be liable to the other party for any indirect
or consequential damages, including but not limited to loss of profits or
business opportunity.
20.4 Severability. Each party intends not to violate any public policy,
statutory or common law, rule, regulation, treaty or decision of any government
agency or executive body thereof of any country or community or association of
countries. If any term or provision of this Agreement is held to be invalid,
illegal or unenforceable by a court or other governmental authority of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other term or provision of this Agreement, which shall remain in full force
and effect. The holding of a term or provision to be invalid, illegal or
unenforceable in a jurisdiction shall not have any effect on the application of
the term or provision in any other jurisdiction.
20.5 Notices. Any consent or notice required or permitted to be given or made
under this Agreement by one party to the other shall be in writing, delivered
personally or by facsimile (and promptly confirmed by personal delivery,
first-class mail or courier), first-class mail or courier, postage prepaid
(where applicable), addressed to the other party as shown below or to such other
address as the addressee shall have last furnished in writing to the addresser
and (except as otherwise provided in this Agreement) shall be effective upon
receipt by the addressee.
If to VIVUS: VIVUS International Limited
c/o VIVUS, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: President
Fax: (000)000-0000
cc: Wilson, Sonsini,Xxxxxxxx & Xxxxxx
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Attention: Xxxxxxx X. Xxxxx
Fax: (000)000-0000
If to Abbott: Xxxxxx International, Ltd.
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000-0000
Attention: President, Abbott International Division
Fax: (000)000-0000
cc: Vice President, International Legal Operations
Fax: (000)000-0000
20.6 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, excluding its conflict of
laws provision. Application of the United Nations Convention On Contracts For
The International Sale Of Goods is hereby excluded.
20.7 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
superseded by this Agreement. Except as expressly provided elsewhere in this
Agreement, this Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by both parties hereto.
20.8 Headings. The captions to the Articles hereof are not a part of this
Agreement, but are merely guides or labels to assist in locating and reading the
Articles hereof.
20.9 Independent Contractors. It is expressly understood and agreed that VIVUS
and Abbott are independent contractors and that the relationship between the two
parties shall not constitute a partnership, joint venture or agency. Neither
VIVUS nor Abbott shall have the authority to make any statement, representations
or commitments of any kind, or to take any action, which shall be binding on the
other, without the prior written consent of the party to do so.
20.10 Waiver. The waiver by either party of any right hereunder or of a failure
to perform or breach by the other party shall not be deemed a waiver of any
other right hereunder or of any other failure or breach whether of a similar
nature or otherwise.
20.11 Alternative Dispute Resolution. The parties agree that any dispute that
arises in connection with this Agreement, which cannot be amicably resolved by
the parties, shall be
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resolved by Alternative Dispute Resolution ("ADR") pursuant to the procedure set
forth in Exhibit 20.11 attached hereto.
20.12 Public Announcements. Except as required by law, in which case the
provisions of Article 19.2 shall apply, neither party shall make any public
announcement, statement, response to questions or other disclosure concerning
this Agreement nor the terms nor the subject matter hereof without the prior
written consent of the other party.
20.13 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.
THEREFORE, the parties hereto have executed this Agreement as of the first day
above written.
XXXXXX INTERNATIONAL, LTD. VIVUS INTERNATIONAL, LTD.
By:_____________________________ By:_______________________________
Title:__________________________ Title:____________________________
Date:___________________________ Date:_____________________________
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GUARANTEE OF PERFORMANCE
In order to induce Abbott to enter into the foregoing Agreement,
VIVUS, INC., a corporation organized under the laws of the state of Delaware and
having a principal place of business at 0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxx, XX
00000, and being the sole shareholder of VIVUS, hereby irrevocably and
unconditionally guarantees any and all obligations (including, without
limitation, any payment obligations) of VIVUS to Abbott, whether or not existing
or hereinafter arising pursuant to the foregoing Agreement (including, without
limitation, all agreements, grants, Undertakings, grants, licenses and
sublicenses now or hereafter entered into pursuant to the Agreement
(collectively, the "VIVUS Undertakings") or as such VIVUS Undertakings may be
hereinafter amended or modified (with or without notice to or consent of VIVUS
INC.).
VIVUS INC. further agrees that that VIVUS Undertakings may be
extended, renewed, modified, amended or compromised in any way, with or without
notice to or consent of VIVUS INC.
Notice of acceptance of the Guaranty and of the incurring of any
obligation or any default of the VIVUS Undertakings, as well as demand and
protest with respect to such VIVUS Undertakings and as well as any right to
challenge or dispute the validity and enforceability of this Guarantee, are
hereby waived by VIVUS INC.
This Guaranty shall be an irrevocable, continuing, absolute and
unconditional guaranty of payment and performance by VIVUS pursuant to the VIVUS
Undertakings.
VIVUS INC. represents, covenants and warrants to Abbott as follows,
upon which Abbott relies in acceptance of this Guaranty: that (i) VIVUS INC. is
the sole shareholder of all of issued and outstanding capital stock of VIVUS,
(ii) VIVUS INC. will benefit from the Agreement between VIVUS and Abbott, (iii)
VIVUS INC. has received good and valuable consideration for its execution,
delivery and performance of this Guaranty, and (iv) VIVUS INC. has executed and
delivered this Guaranty to Abbott.
Notice to VIVUS INC. shall be given pursuant to the provisions of
Article 20.5 of the Agreement.
Page 41 of 55
42
This Guaranty shall be governed by and construed in accordance with
the laws of the State of Delaware and shall take effect as an instrument under
seal.
In the event of any dispute under this Guaranty, as to construction
or performance of this Guaranty or any of its provisions or otherwise, such
dispute shall be settled in accordance with Article 20.11 above, which is
incorporated herein by reference, substituting "VIVUS INC." for "VIVUS" in such
Article for purposes of this Guaranty. If an action to enforce this Guaranty is
undertaken, the party prevailing in such enforcement action shall be entitled to
recover its reasonable out-of-pocket expenses (including fees of outside
counsel) with respect to such action.
VIVUS INC. shall not assign or transfer this Guaranty without the
prior written consent of Abbott.
THEREFORE, VIVUS INC. executes this Guaranty under seal as of this
16th day of May 2000.
VIVUS, INC.
/s/ Xxxxxx X. Xxxxxx
By: Xxxxxx Xxxxxx
Title: President and Chief Executive Officer Date:_______________________
Page 42 of 55
43
Exhibit 1.7 (p. 1 of 2)
XXXXXXX XXXXXXXXX
XXXXXXXX 0000 XXXXXXXXX ADDENDUM 1097 DISTRIBUTION AGREEMENT
Afghanistan Mongolia Antigua
Algeria Morocco Aruba
Angola Mozambique Bahamas
Armenia Namibia Barbados
Azerbaijan Nepal Bermuda
Bahrain Nigeria Brunei
Bangladesh North Korea Cambodia
Belarus Oman Canada
Benin Pakistan Cayman Islands
Bhutan Qatar China
Bophuthatswana Russia Curacao
Botswana Rwanda Dominican Republic
Burkina Faso Saudi Arabia Grenada
Burundi Senegal Haiti
Cameroon Seychelles Hong Kong
Central African Republic Sierra Leone Indonesia
Chad Somalia Jamaica
Comoros Sri Lanka Laos
Congo Sudan Macau
Cote d'Ivorie Swaziland Malaysia
Djibouti Syria Mexico
Egypt Tajikistan Myanmar
Equatorial Guinea Tanzania Philippines
Eritrea Togo Saint Xxxxxx
Ethiopia Transkei Saint Xxxxxxx
Gabon Tunisia Santa Lucia
Gambia Turkmenistan Singapore
Georgia Uganda South Africa
Ghana Ukraine South Korea
Guinea United Arab Emirates Taiwan
Guinea Bissau Uzbekistan Thailand
India Yemen Tortola
Iran Zaire Trinidad
Iraq Zambia Turks and Caicos Islands
Israel Zansibar Vietnam
Page 43 of 55
44
Exhibit 1.7 (p. 2 of 2)
ADDENDUM 1097 TERRITORY
ADDENDUM 1097 TERRITORY
Ivory Coast
Jordan
Kazachstan
Kenya
Krygyzstan
Kuwait
Lebanon
Lesotho
Liberia
Libya
Madagascar
Malawi
Mali
Mauritania
Page 44 of 55
45
Exhibit 1.8 (p. 1 of 8)
LICENSED PATENTS
(***)
--------------------------------------------------------------------------------
Ref. No. Title/Inventors Status
Serial and Patent Nos.
--------------------------------------------------------------------------------
Page 45 of 55
46
Exhibit 1.15 (p.1 of 2)
SPECIFICATIONS
MUSE(R) RELEASE AND SHELF-LIFE (REGULATORY) SPECIFICATIONS
(***)
Page 46 of 55
47
Exhibit 4
PRICES
----------------------------------------------------------------------------------------------------------------------
VIVUS produces up VIVUS produces VIVUS produces VIVUS produces VIVUS produces
to (***) of (***) up to (***) up to (***) up to >(***) of Product*
Product* (***) of Product* (***) of Product* (***) of Product*
----------------------------------------------------------------------------------------------------------------------
Sample Price per (***) (***) (***) (***) (***)
unit of Product
----------------------------------------------------------------------------------------------------------------------
Minimum Supply (***) (***) (***) (***) (***)
Price per unit
of Product **
----------------------------------------------------------------------------------------------------------------------
* Total VIVUS worldwide unit production of finished Product in a calendar year
(not only VIVUS finished Product produced for Abbott)
** No Minimum Supply Price applies until after the first anniversary of the
First Commercial Sale in the Territory.
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48
Exhibit 8.1
EUROPEAN COUNTRIES
COUNTRY
Austria
Belgium
Denmark
France
Finland
Germany
Greece
Ireland
Italy
Luxembourg
Netherlands
Portugal
Spain
Sweden
United Kingdom
Page 48 of 55
49
Exhibit 12.1
THIRD PARTY LICENSES
AMENDMENTS TO THIRD PARTY LICENSES
1. Assignment Agreement between VIVUS, Inc. and ALZA Corporation dated
December 31, 1993.
2. Assignment between Ortho Pharmaceutical Corporation ("Ortho") and
VIVUS, Inc. dated June 9, 1992 (assigning to VIVUS Ortho's rights
under three license agreements between Ortho and:
(a) AMSU Ltd. dated June 23, 1989;
(b) Xxxxx Xxxxxxxxx AB dated June 26, 1989; and
(c) Xxxx X. Xxxx and Xxxxx X. Xxxxxxx dated January 4, 1991.
3. License Agreement between VIVUS, Inc. and Xxxx X. Xxxx and Xxxxx X.
Xxxxxxx, dated December 28, 1992 (amending and restating VIVUS'
rights under the license agreement between Ortho and Xxxx and Xxxxxxx
assigned to VIVUS from Ortho);
4. Amendment between VIVUS, Inc. and AMSU, Ltd. dated April 22, 1992
(amending the license agreement between Ortho and AMSU assigned to
VIVUS from Ortho);
5. Amendment between VIVUS, Inc. and AMSU, Ltd. dated July 3, 1992
(amending the license agreement between Ortho and AMSU assigned to
VIVUS from Ortho);
6. Amendment between VIVUS, Inc. and Xxxxx Xxxxxxxxx AB dated April 22,
1992 (amending the license agreement between Ortho and AMSU assigned
to VIVUS from Ortho); and
7. Amendment between VIVUS, Inc. and Xxxxx Xxxxxxxxx AB dated July 3,
1992 (amending the license agreement between Ortho and AMSU assigned
to VIVUS from Ortho).
Page 49 of 55
50
Exhibit 20.11 (p.1 of 5)
Alternative Dispute Resolution
The parties recognize that bona fide disputes as to certain
matters may arise from time to time during the term of this
Agreement which relate to either party's rights and/or
obligations. To have such a dispute resolved by this
Alternative Dispute Resolution ("ADR") provision, a party
first must send written notice of the dispute to the other
party for attempted resolution by good faith negotiations
between their respective presidents (or their designees) of
the affected subsidiaries, divisions, or business units
within twenty-eight (28) days after such notice is received
(all references to "days" in this ADR provision are to
calendar days).
If the matter has not been resolved within twenty-eight
(28) days of the notice of dispute, or if the parties fail
to meet within such twenty-eight (28) days, either party
may initiate an ADR proceeding as provided herein. The
parties shall have the right to be represented by counsel
in such a proceeding.
1. To begin an ADR proceeding, a party shall provide
written notice to the other party of the issues to be
resolved by ADR. Within fourteen (14) days after its
receipt of such notice, the other party may, by written
notice to the party initiating the ADR, add additional
issues to be resolved within the same ADR.
2. Within twenty-one (21) days following receipt of the
original ADR notice, the parties shall select a mutually
acceptable neutral to preside in the resolution of any
disputes in this ADR proceeding. If the parties are unable
to agree on a mutually acceptable neutral within such
period, either party may request the President of the CPR
Institute for Dispute Resolution ("CPR"), 000 Xxxxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to select a
neutral pursuant to the following procedures:
(a) The CPR shall submit to the parties a list
of not less than five (5) candidates within fourteen (14)
days after receipt of the request, along with a Curriculum
Vitae for each candidate. No candidate shall be an
employee, director, or shareholder of either party or any
of their subsidiaries or affiliates.
Page 50 of 55
51
Exhibit 20.11 (p.2 of 5)
(b) Such list shall include a statement of
disclosure by each candidate of any circumstances likely to
affect his or her impartiality.
(c) Each party shall number the candidates in
order of preference (with the number one (1) signifying the
greatest preference) and shall deliver the list to the CPR
within seven (7) days following receipt of the list of
candidates. If a party believes a conflict of interest
exists regarding any of the candidates, that party shall
provide a written explanation of the conflict to the CPR
along with its list showing its order of preference for the
candidates. Any party failing to return a list of
preferences on time shall be deemed to have no order of
preference.
(d) If the parties collectively have identified
fewer than three (3) candidates deemed to have conflicts,
the CPR immediately shall designate as the neutral the
candidate for whom the parties collectively have indicated
the greatest preference. If a tie should result between two
candidates, the CPR may designate either candidate. If the
parties collectively have identified three (3) or more
candidates deemed to have conflicts, the CPR shall review
the explanations regarding conflicts and, in its sole
discretion, may either (i) immediately designate as the
neutral the candidate for whom the parties collectively
have indicated the greatest preference, or (ii) issue a new
list of not less than five (5) candidates, in which case
the procedures set forth in subparagraphs 2(a) - 2(d) shall
be repeated.
3. No earlier than twenty-eight (28) days or later than
fifty-six (56) days after selection, the neutral shall hold
a hearing to resolve each of the issues identified by the
parties. The ADR proceeding shall take place at a location
agreed upon by the parties. If the parties cannot agree,
the neutral shall designate a location other than the
principal place of business of either party or any of their
subsidiaries or affiliates.
4. At least seven (7) days prior to the hearing, each party
shall submit the following to the other party and the
neutral:
(a) a copy of all exhibits on which such party
intends to rely in any oral or written presentation to the
neutral;
(b) a list of any witnesses such party intends
to call at the hearing, and a short summary of the
anticipated testimony of each witness;
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52
Exhibit 20.11 (p.3 of 5)
(c) a proposed ruling on each issue to be
resolved, together with a request for a specific damage
award or other remedy for each issue. The proposed rulings
and remedies shall not contain any recitation of the facts
or any legal arguments and shall not exceed one (1) page
per issue.
(d) a brief in support of such party's proposed
rulings and remedies, provided that the brief shall not
exceed twenty (20) pages. This page limitation shall apply
regardless of the number of issues raised in the ADR
proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d),
no discovery shall be required or permitted by any means,
including depositions, interrogatories, requests for
admissions, or production of documents.
5. The hearing shall be conducted on two (2) consecutive
days and shall be governed by the following rules:
(a) Each party shall be entitled to five (5)
hours of hearing time to present its case. The neutral
shall determine whether each party has had the five (5)
hours to which it is entitled.
(b) Each party shall be entitled, but not
required, to make an opening statement, to present regular
and rebuttal testimony, documents or other evidence, to
cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately
after their direct testimony, and cross-examination time
shall be charged against the party conducting the
cross-examination.
(c) The party initiating the ADR shall begin the
hearing and, if it chooses to make an opening statement,
shall address not only issues it raised but also any issues
raised by the responding party. The responding party, if it
chooses to make an opening statement, also shall address
all issues raised in the ADR. Thereafter, the presentation
of regular and rebuttal testimony and documents, other
evidence, and closing arguments shall proceed in the same
sequence.
(d) Except when testifying, witnesses shall be
excluded from the hearing until closing arguments.
Page 52 of 55
53
Exhibit 20.11 (p.4 of 5)
(e) Settlement negotiations, including any
statements made therein, shall not be admissible under any
circumstances. Affidavits prepared for purposes of the ADR
hearing also shall not be admissible. As to all other
matters, the neutral shall have sole discretion regarding
the admissibility of any evidence.
6. Within seven (7) days following completion of the
hearing, each party may submit to the other party and the
neutral a post-hearing brief in support of its proposed
rulings and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed
ten (10) pages. This page limitation shall apply regardless
of the number of issues raised in the ADR proceeding.
7. The neutral shall rule on each disputed issue within
fourteen (14) days following completion of the hearing.
Such ruling shall adopt in its entirety the proposed ruling
and remedy of one of the parties on each disputed issue but
may adopt one party's proposed rulings and remedies on some
issues and the other party's proposed rulings and remedies
on other issues. The neutral shall not issue any written
opinion or otherwise explain the basis of the ruling.
8. The neutral shall be paid a reasonable fee plus
expenses. These fees and expenses, along with the
reasonable legal fees and expenses of the prevailing party
(including all expert witness fees and expenses), the fees
and expenses of a court reporter, and any expenses for a
hearing room, shall be paid as follows:
(a) If the neutral rules in favor of one party
on all disputed issues in the ADR, the losing party shall
pay 100% of such fees and expenses.
(b) If the neutral rules in favor of one party
on some issues and the other party on other issues, the
neutral shall issue with the rulings a written
determination as to how such fees and expenses shall be
allocated between the parties. The neutral shall allocate
fees and expenses in a way that bears a reasonable
relationship to the outcome of the ADR, with the party
prevailing on more issues, or on issues of greater value or
gravity, recovering a relatively larger share of its legal
fees and expenses.
Page 53 of 55
54
Exhibit 20.11 (p.5 of 5)
9. The rulings of the neutral and the allocation of fees
and expenses shall be binding, non-reviewable, and
non-appealable, and may be entered as a final judgment in
any court having jurisdiction.
10. Except as provided in paragraph 9 or as required by
law, the existence of the dispute, any settlement
negotiations, the ADR hearing, any submissions (including
exhibits, testimony, proposed rulings, and briefs), and the
rulings shall be deemed Confidential Information. The
neutral shall have the authority to impose sanctions for
unauthorized disclosure of Confidential Information.
Page 54 of 55
