AMENDED AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT (Hylenex)
EXHIBIT 99.3
CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED IS OMITTED AND NOTED WITH “***.” AN UNREDACTED VERSION OF THIS
DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.
HAS BEEN REQUESTED IS OMITTED AND NOTED WITH “***.” AN UNREDACTED VERSION OF THIS
DOCUMENT HAS BEEN SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.
EXECUTION COPY
THIS AMENDED AND RESTATED EXCLUSIVE DISTRIBUTION AGREEMENT (this “Agreement”) dated as of
February 13, 2007 (the “Restatement Date”), is entered into between XXXXXX HEALTHCARE CORPORATION,
a Delaware corporation, with its principal place of business at Xxx Xxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxx 00000-0000, XXX, and XXXXXX HEALTHCARE S.A., a Swiss corporation, with its principal place
of business at Xxxxxxxxxxxx 0, 0000 Xxxxxxxxxxx, Xxxxxxxxxxx (together with its Affiliates,
collectively, “Baxter”), on the one hand, and HALOZYME, INC., a corporation existing under the laws
of the State of California, with its principal place of business at 00000 Xxxxxxxx Xxxxxx Xxxx,
Xxxxx 00, Xxx Xxxxx, Xxxxxxxxxx 00000, XXX (“Halozyme”), on the other hand.
WHEREAS, Halozyme wishes to have Baxter promote, market, distribute and sell Standalone
Product (as defined below) and Baxter wishes to promote, market, distribute and sell Standalone
Product for Halozyme in the Territory (as defined below);
WHEREAS, Halozyme and Xxxxxx Healthcare Corporation previously entered into that certain
Exclusive Distribution Agreement dated as of August 13, 2004 (as amended to date, the “Original
Distribution Agreement”);
WHEREAS, Halozyme and Baxter desire to amend and restate the Original Distribution Agreement
in certain respects, on the terms and conditions of this Agreement;
WHEREAS, Halozyme and Baxter are entering into that certain Amended and Restated Development
and Supply Agreement dated as of the Restatement Date (as amended or restated from time to time,
the “Development Agreement”) for the manufacture and development of Standalone Product.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein
contained, the parties hereby amend the Original Distribution Agreement, and, for convenience,
restate the Original Distribution Agreement in its entirety, effective as of the Restatement Date
as follows:
1. Definitions. For purposes of this Agreement, the following terms will have the
following meanings. Any capitalized terms used, but not defined, in this Agreement shall have the
respective meanings set forth in the Development Agreement.
1.1 “Baxter Net Sales” shall mean the gross sales price of the Standalone Product
invoiced by Baxter or its Affiliate to customers who are not Affiliates (or are Affiliates
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but are the end users of the Standalone Product) less, to the extent actually paid or accrued
by Baxter or its Affiliate (as applicable), (a) credits, allowances, discounts and rebates to, and
chargebacks from the account of, such customers for spoiled, damaged, out-dated and returned
Standalone Product; (b) freight and insurance costs incurred by Baxter or its Affiliate (as
applicable) in transporting the Standalone Product in final form to such customers; (c) cash,
quantity and trade discounts, rebates and other price reductions for the Standalone Product given
to such customers under price reduction programs that are consistent with industry practices and
price reductions given for similar products by Baxter or its Affiliate (as applicable); (d) sales,
use, value-added and other direct taxes incurred on the sale of the Standalone Product in final
form to such customers; and (e) customs duties, surcharges and other governmental charges incurred
in exporting or importing the Standalone Product in final form to such customers.
1.2 “DESI Review Indication” shall mean the DESI Review indication “as an adjuvant to
increase the absorption and dispersion of other injected drugs; for hypodermoclysis; as an adjunct
in subcutaneous urography for improving the resorption of radiopaque agents” (as described in 37
Fed. Reg. No. 122, p. 12418 (June 13, 1972)), together with any subset of the foregoing outside the
United States.
1.3 “Enhanze Agreement (Generic Drugs)” shall mean the Enhanze License and
Collaboration Agreement (Generic Drugs) dated as of the Restatement Date, between Halozyme and
Baxter (as amended or restated from time to time).
1.4 “Halozyme Revenue Share Kit Product” shall mean a product comprising (a) one or
more Drugs (other than Bisphosphonates, Cytostatics, Cytotoxics, Generic Drugs and Hydration
Fluids), and (b) recombinant human PH20 hyaluronidase in a liquid injectable or lyophilized
formulation, as an active ingredient/excipient for enhancing the dispersion and/or absorption of
such one or more Drugs in any liquid injectable or lyophilized formulation, which product is
promoted, marketed and sold in a kit (i.e., in separate containers, but packaged and labeled
together at a single price). All capitalized term used, but not defined, in this Section 1.4 shall
have the respective meanings set forth in the Enhanze Agreement (Generic Drugs).
1.5 “Major Market Countries” shall mean Canada, France, Germany, Italy, Japan, Spain,
the United Kingdom and the United States.
1.6 “Standalone Product” shall have the meaning set forth in the Development
Agreement.
1.7 “Stock Purchase Agreement” shall mean the Stock Purchase Agreement dated as of the
Restatement Date, between Halozyme Therapeutics, Inc., a Nevada corporation, and Xxxxxx
International Inc., a Delaware corporation (as amended or restated from time to time).
1.8 “Territory” shall mean all countries of the world.
2. Appointment and Scope.
2.1 Appointment. As of the Restatement Date and subject to the terms and conditions
and for the Term of this Agreement, Halozyme hereby appoints Baxter as its exclusive distributor of
the Standalone Product in the Territory. Baxter hereby accepts such
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appointment. Baxter may
extend such exclusive distribution rights to any of its Affiliates or sub-
distributors in Xxxxxx’x customary distribution system for its other products, provided that
such Affiliates or sub-distributors shall be bound by the terms of this Agreement.
2.2 Diligence. Baxter shall use its commercially reasonable efforts to promote,
market, distribute and sell the Standalone Product in each Major Market Country in which marketing
approval has been obtained, and following the receipt of such marketing approval to promptly
conduct marketing studies in such country to determine the market potential for the Standalone
Product in such country. Commercially reasonable efforts shall mean those efforts and resources
consistent with the exercise of prudent scientific and business judgment, as applied to other
pharmaceutical products of similar market potential and market size and at a similar stage in the
development or life of such product. Without limiting the foregoing, commercially reasonable
efforts shall include, without limitation, achieving the diligence milestones set forth on Exhibit A.
2.3 Independent Purchaser Status. Baxter shall be an independent purchaser and seller
of the Standalone Product. Baxter shall not act as an agent or legal representative of Halozyme,
nor shall Baxter have any right or power to act for or bind Halozyme in any respect or to pledge
its credit. Except as expressly set forth herein, Baxter shall be free to resell the Standalone
Product on such terms as it may, in its sole discretion, determine, including price, marketing,
advertising, promotion, returns, credits and discounts. The detailed operations of Baxter under
the Agreement are subject to the sole control and management of Baxter. Halozyme shall reasonably
support Xxxxxx’x sales and promotional activities, including but not limited to, referring to
Baxter all orders and inquiries from customers and providing Baxter with any existing marketing
materials and documents relating to the marketing authorizations for the Standalone Product.
2.4 Failure to Supply. Each party shall use its commercially reasonable efforts to
ensure a steady supply of Standalone Product or to resolve any associated supply issues with their
respective contractors.
3. Financial Considerations.
3.1 Baxter Payments.
3.1.1 Upfront Payment. On the Restatement Date, Baxter shall pay to Halozyme a
non-refundable, non-creditable amount of ten million dollars ($10,000,000).
3.1.2 Equity Investment. On the Restatement Date, Xxxxxx International Inc., a
Delaware corporation, shall make an equity investment in Halozyme as provided in the Stock Purchase
Agreement.
3.1.3 Standalone Product-Based Payments. Baxter shall be responsible for the full
cost of manufacturing and supplying the Standalone Product. Additionally, Baxter shall pay to
Halozyme the following payments:
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(a) *** percent (***%) of Baxter Net Sales of Standalone Product; provided, however, that the
minimum royalty payment with respect to each container of Standalone Product shall be $12.
(b) On the applicable pre-payment due date set forth below, Baxter shall pay to Halozyme (as a
pre-payment for the amounts owing under Section 3.1.3(a)) the applicable non-refundable pre-payment
amount specified below for the calendar year in which such pre-payment amount is due, which amount
shall be fully creditable against the payments owed by Baxter under Section 3.1.3(a) above for such
calendar year and succeeding calendar years:
Pre-Payment Amount | Pre-Payment Due Date | |
$1,000,000 |
The Restatement Date (2007) | |
$*** |
January 1, 2008 | |
$*** |
January 1, 2009 |
(c) Following the expiration of the Initial Term, and during each Renewal Term (as each is
defined in Section 9.1), the payment rates and minimum payments set forth in Section 3.1.3(a) with
respect to Standalone Product sold in a particular jurisdiction shall be reduced by fifty percent
(50%) following the commercial launch of an approved generic or “biosimilar” form of the Standalone
Product in such jurisdiction.
3.1.4 Milestone Payments. Baxter shall pay to Halozyme the following non-refundable,
non-creditable milestone payments within thirty (30) days following the first occurrence of each
applicable event:
Amount | Event | |
$***
|
receipt of the first required marketing approval by the European Medicines Agency (EMEA) for the Standalone Product as outlined in the Standalone Product Master Plan; | |
$***
|
the end of the calendar year in which Baxter Net Sales of (a) Standalone Products, and (b) the PH20 Drug component of Products, as defined in the Enhanze Agreement (Generic Drugs) as if it were priced and sold as a Standalone Product, total, in the aggregate for such calendar year, at least two hundred million dollars ($200,000,000); and | |
$***
|
the end of the calendar year in which Baxter Net Sales of (a) Standalone Products, and (b) the PH20 Drug component of Products, as defined in the Enhanze Agreement (Generic Drugs) as if it were priced and sold as a Standalone Product, total, in the aggregate for such calendar year, at least four hundred million dollars ($400,000,000). |
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3.2 Halozyme Payments. Halozyme shall pay to Baxter $*** per item of Halozyme Revenue
Share Kit Product sold by Halozyme, its licensees (other than Baxter) and their respective
Affiliates; provided, however, if such Halozyme Revenue Share Kit Product contains more than 150
USP units of recombinant human PH20 hyaluronidase, the applicable payment shall be increased on a
pro-rata basis to reflect the increase in USP unit dose of recombinant human PH20 hyaluronidase
included in such Halozyme Revenue Share Kit Product; provided, further, if Halozyme reasonably
demonstrates that it is not commercially practicable to sell a Halozyme Revenue Share Kit Product
that contains more than 150 USP units of recombinant human PH20 hyaluronidase bearing the
applicable payment as determined above, then with respect to such Halozyme Revenue Share Kit
Product only, the parties shall amend this provision to reduce the applicable payment with respect
to such Halozyme Revenue Share Kit Product to a mutually acceptable amount. During the term of
this Agreement following the Initial Term, such payment amounts shall be reduced by *** (***).
3.3 Payment Reports.
3.3.1 Within sixty (60) days after the end of each calendar quarter during the Term of this
Agreement, and within sixty (60) days following the expiration or termination of this Agreement,
Baxter shall furnish to Halozyme a written report showing in reasonably specific detail, on a
country-by-country basis, (a) the calculation of Baxter Net Sales and the payment amounts owing
under Section 3.1.3 above; (b) the withholding taxes, if any, required by law to be deducted with
respect to such Baxter Net Sales; and (c) the exchange rates, if any, used in determining the
amount of United States dollars. All amounts in any such written report shall be expressed in
United States dollars. With respect to sales of Standalone Product invoiced in a currency other
than United States dollars, all such amounts shall be expressed both in the currency in which the
distribution is invoiced and in the United States dollar equivalent. The United States dollar
equivalent shall be calculated using the average of the exchange rate (local currency per US$1)
published in The Wall Street Journal, Western Edition, under the heading “Currency Trading”
on the last business day of each month during the applicable calendar quarter. Baxter shall keep
complete and accurate records in sufficient detail to enable the amounts payable hereunder to be
determined.
3.3.2 Within sixty (60) days after the end of each calendar quarter during the Term of this
Agreement, and within sixty (60) days following the expiration or termination of this Agreement,
Halozyme shall furnish to Baxter a written report showing in reasonably specific detail, on a
country-by-country basis, (a) the calculation of the payment amounts owing under Section 3.2 above;
(b) the withholding taxes, if any, required by law to be deducted with respect
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to such payment
amounts; and (c) the exchange rates, if any, used in determining the amount of United States
dollars. All amounts in any such written report shall be expressed in United States dollars. With
respect to sales of Standalone Product invoiced in a currency other than United States dollars, all
such amounts shall be expressed both in the currency in which the distribution is invoiced and in
the United States dollar equivalent. The United States dollar equivalent shall be calculated using
the average of the exchange rate (local currency per US$1) published in The Wall Street
Journal, Western Edition, under the heading “Currency Trading” on the last business
day of each month during the applicable calendar quarter. Halozyme shall keep complete and
accurate records in sufficient detail to enable the amounts payable hereunder to be determined.
3.4 Audits. Upon the written request of a party (the “Payee”) and not more than once
in each calendar year, the other party (the “Payor”) shall permit an independent certified public
accounting firm of nationally recognized standing, selected by the Payee and reasonably acceptable
to the Payor, at the Payee’s expense, to have access during normal business hours to such of the
records of the Payor as may be reasonably necessary to verify the accuracy of the payment reports
hereunder for any year ending not more than thirty-six (36) months prior to the date of such
request. If such accounting firm concludes that additional amounts were owed during the audited
period, then the parties agree to meet and discuss the calculation of the additional amounts. If
it is determined that Payor still owes the additional amounts, then the Payor shall pay such
additional amounts within sixty (60) days of the date the Payee delivers to the Payor such
accounting firm’s written report so concluding. The fees charged by such accounting firm shall be
paid by the Payee; provided, however, if the audit discloses that the amounts payable by the Payor
for such period are more than one hundred five percent (105%) of the amounts actually paid for such
period, then the Payor shall pay the reasonable fees and expenses charged by such accounting firm.
3.5 Payment Terms. All amounts shown to have accrued by each payment report provided
for under Section 3.3 above shall be payable on the date such payment report is due. Payment of
amounts in whole or in part may be made in advance of such due date.
3.6 Payment Method. All payments by a Payor to the Payee under this Agreement shall
be paid in United States dollars and all such payments shall be originated from a United States
bank located in the United States and made by bank wire transfer in immediately available funds to
such account as the payee shall designate before such payment is due.
3.7 Supply of Standalone Product.
3.7.1 Prior to the Restatement Date, Baxter has prepared and provided to Halozyme a written
forecast (the “Initial Standalone Product Forecast”) of its good faith requirements for Standalone
Product for each of the first eighteen (18) months following the Restatement Date. Not later than
one hundred eighty (180) days prior to the first day of each calendar quarter during the term of
this Agreement (commencing with the calendar quarter beginning July 1, 2007), Baxter shall prepare
and provide Halozyme with a written forecast (together with the Initial Standalone Product
Forecast, each a “Rolling Standalone Product Forecast”) of its good faith estimated requirements
for Standalone Product under this Section 3.7 for each of the subsequent six (6) calendar quarters.
Baxter shall not (a) increase or decrease the quantity estimated for the first quarterly period of
each forecast from the quantity estimated for
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the second quarterly period of the previous forecast,
(b) increase or decrease the quantity estimated for the second and third quarterly periods of each
forecast by more than twenty five percent (25%) of the quantity estimated for the third and fourth
quarterly periods of the previous forecast, respectively, without the prior express written consent
of Halozyme. The quantities estimated for the fifth and sixth quarterly periods of each forecast
shall be non-binding, and for planning purposes only.
3.7.2 Baxter shall be required to purchase one hundred percent (100%) of the quantity of
Standalone Product forecasted for the first and second quarterly periods of each Rolling Standalone
Product Forecast.
3.7.3 Halozyme shall be required to supply the quantity of Standalone Product ordered by
Baxter under this Section 3.7 in any calendar quarter up to the quantity forecasted for the first
quarterly period of the most recent Rolling Standalone Product Forecast. Halozyme shall use
commercially reasonable efforts to meet Xxxxxx’x delivery requirements specified in accordance with
Section 3.7.4.
3.7.4 Baxter shall ship or arrange for shipment of the Standalone Product ordered by Baxter
from the site of manufacture of the Standalone Product to Xxxxxx’x distribution facility in
Memphis, Tennessee or such other distribution center as may be designated by Baxter.
3.7.5 Baxter shall be solely responsible for purchasing and maintaining a suitable reserve
supply of Standalone Product for safety stock purposes.
3.8 Dollars. All payments described in this Agreement unless otherwise noted shall be
in United States dollars.
4. Warranty, Representations.
4.1 Halozyme warrants that it possesses good and marketable title to the Standalone Product
sold to Baxter hereunder and complies with all regulatory requirements therefor in each country in
the Territory in which marketing approval has been obtained. With respect to all Standalone
Product sold to Baxter hereunder that is not manufactured by Baxter or its Affiliates, Halozyme
warrants that (i) the Standalone Product complies or will comply with all applicable regulatory
requirements therefor in each country in the Territory in which marketing approval has been
obtained, (ii) the Standalone Product will be manufactured in accordance with the applicable
specifications therefor, such marketing approvals in such countries of the Territory and Good
Manufacturing Practices as applicable to the Standalone Product in such countries of the Territory
and in compliance with approved quality control processes and standards, which processes and
standards will meet the minimum requirements of applicable laws and regulations in such countries
of the Territory, (iii) the Standalone Product will be free from defects in workmanship and
material, and (iv) it shall provide at its own expense all packaging and labeling for the
Standalone Product that conform with the regulatory requirements in such countries of the Territory
and are suitable for sale in such countries of the Territory and such labels are available in the
appropriate languages for such countries of the Territory. For purposes of subparagraph (ii)
above, each batch of the Standalone Product supplied by Halozyme, will include a “Certificate of
Analysis,” which will include testing
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CONFIDENTIAL TREATMENT REQUESTED
results, and shall be sent to Baxter by mail and fax or
e-mail, indicating that the batch has been manufactured and released according to applicable Good
Manufacturing Practices and the applicable specifications therefor. Halozyme shall indemnify,
defend and hold harmless Baxter, its Affiliates, its sublicensees and distributors, and their
respective directors, officers, employees and agents, from and against any and all liabilities,
damages, losses, costs and expenses (including the reasonable fees of attorneys and other
professionals) incurred from any claims, actions or proceedings by any third party to the extent
resulting from a breach of the foregoing warranty.
4.2 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, HALOZYME MAKES NO WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THE STANDALONE PRODUCT. HALOZYME DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5. Covenants of Baxter.
5.1 Certain Restrictions. Except as otherwise permitted by written agreement of the
parties, Baxter shall not, directly or indirectly, (a) condition the sale or transfer of the
Standalone Product with the sale or transfer of any other product or the use of any service unless
the price for the Standalone Product is separately itemized on the applicable invoice and is the
same price charged by Baxter for the Standalone Product when sold separately, (b) promote, sell or
transfer a product comprising a coformulation of the Standalone Product, or any portion thereof,
with any other product, (c) promote, sell or transfer a product comprising the Standalone Product
kitted with any other product (i.e., in one or more containers or delivery devices, with a single
label, packaged together at a single price), (d) promote, sell or transfer any Standalone Product
for any use other than the DESI Review Indication, or (e) conduct, have conducted or assist or
facilitate the conduct of any study of the Standalone Product that requires the administration of
more than a single 150 USP unit dose.
5.2 Exclusivity. Commencing on the Restatement Date, and thereafter for so long as
this Agreement is in effect, Baxter shall not promote, market or sell in the Territory any product
that constitutes bovine or ovine hyaluronidase or any other product sold solely for the labeled
indications of Standalone Product previously or contemporaneously sold by Baxter.
6. Regulatory Filings.
6.1 Baxter shall comply with all applicable regulatory requirements in any country in which
Baxter promotes, markets or sells the Standalone Product or any products resulting from, in whole
or in part, the Standalone Product. In order for Halozyme to comply with 21 CFR 310.305, 314.80
and 314.98 as promulgated by FDA and other regulatory authorities, Baxter must report to Halozyme
any serious adverse events immediately and any adverse events and product complaints regarding the
Standalone Product, consistent with the Quality Agreement. Halozyme must report to Baxter any
serious adverse events immediately and any adverse events and product complaints regarding the
Standalone Product, in each case in accordance with the Quality Agreement.
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6.2 In accordance with and subject to the Development Agreement, Baxter shall be responsible
at its own cost and expense for Halozyme to obtain and maintain all marketing authorizations within
any country in the Territory for the Term of this Agreement. Halozyme shall duly inform the
regulatory authorities of Baxter being the exclusive distributor of the Standalone Product in any
country of the Territory in which marketing approval is obtained.
7. Confidentiality.
7.1 Confidentiality. During the Term of this Agreement, and for a period of five (5)
years following the expiration or earlier termination hereof, each party shall maintain in
confidence all Confidential Information (as defined below) disclosed by the other party, and shall
not use, grant the use of or disclose to any third party the Confidential Information of the other
party other than as expressly permitted by this Agreement. Each party shall notify the other
promptly upon discovery of any unauthorized use or disclosure of the other party’s Confidential
Information. As used herein, “Confidential Information” shall mean all information and data that
(a) is provided by one party to the other party under the Original Distribution Agreement, the
Original Development and Supply Agreement, this Agreement or the Confidentiality Agreement, and (b)
if disclosed in writing or other tangible medium is marked or identified as confidential at the
time of disclosure to the recipient, or is acknowledged at the time of disclosure to be
confidential, or otherwise should reasonably be deemed to be confidential. Notwithstanding the
foregoing, Confidential Information of a party shall not include that portion of such information
and data which, and only to the extent, the recipient can establish by written documentation: (i)
is known to the recipient as evidenced by its written records before receipt thereof from the
disclosing party, (ii) is disclosed to the recipient free of confidentiality obligations by a third
person who has the right to make such disclosure, (iii) is or becomes part of the public domain
through no fault of the recipient, or (iv) the recipient can reasonably establish is independently
developed by persons on behalf of recipient without access to or use of the information disclosed
by the disclosing party.
7.2 Permitted Disclosures. Either party may disclose Confidential Information of the
disclosing party (a) on a need-to-know basis, to such party’s directors, officers and employees to
the extent such disclosure is reasonably necessary in connection with such party’s activities as
expressly authorized by this Agreement, and (b) to those Affiliates, agents and consultants who
need to know such information to accomplish the purposes of this Agreement (collectively,
“Permitted Recipients”); provided such Permitted Recipients are bound to maintain such Confidential
Information in confidence to the same extent as set forth in Section 7.1.
7.3 Terms of Agreement. Neither party shall disclose any terms or conditions of this
Agreement to any third party without the prior consent of the other party; provided, however, that
a party may disclose the terms or conditions of this Agreement, (a) on a need-to-know basis to its
legal and financial advisors to the extent such disclosure is reasonably necessary, and (b) to a
third party in connection with (i) an equity investment in such party, (ii) a merger, consolidation
or similar transaction by such party, or (iii) the sale of all or substantially all of the assets
of such party. Notwithstanding the foregoing, prior to execution of this Agreement, the parties
have agreed upon the substance of information that can be used to
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describe the terms and conditions
of this transaction, and each party may disclose such information, as modified by mutual written
agreement of the parties, without the consent of the other party.
7.4 Litigation and Governmental Disclosure. Each party may disclose Confidential
Information hereunder to the extent such disclosure is reasonably necessary for prosecuting or
defending litigation, complying with applicable governmental regulations or conducting pre-clinical
or clinical trials, provided that if a party is required by law or regulation
to make any such disclosure of the other party’s Confidential Information it will, except
where impractical for necessary disclosures, for example in the event of a medical emergency, give
reasonable advance notice to the other party of such disclosure requirement and will use good faith
efforts to assist such other party to secure a protective order or confidential treatment of such
Confidential Information required to be disclosed.
7.5 Limitation of Disclosure. The parties agree that, except as otherwise may be
required by applicable laws, regulations, rules or orders, including without limitation the rules
and regulations promulgated by the United States Securities and Exchange Commission, and except as
may be authorized in this Section 7, no information concerning this Agreement and the transactions
contemplated herein shall be made public by either party without the prior written consent of the
other.
7.6 Publicity and SEC Filings. The parties agree that the public announcement of the
execution of this Agreement shall only be by one or more press releases mutually agreed to by the
parties. The failure of a party to return a draft of a press release with its proposed amendments
or modifications to such press release to the other party within five business (5) days of such
party’s receipt of such press release shall be deemed as such party’s approval of such press
release as received by such party. Each party agrees that it shall cooperate fully and in a timely
manner with the other with respect to all disclosures to the Securities and Exchange Commission and
any other governmental or regulatory agencies, including requests for confidential treatment of
Confidential Information of either party included in any such disclosure.
8. Intellectual Property Rights.
8.1 Patent Rights. Except as expressly set forth in this Agreement and the
Development Agreement, including but not limited to rights and permissions implied in the
appointment of Baxter and its Affiliates as exclusive distributor(s) pursuant to Section 2.1 of
this Agreement, Halozyme does not, by this agreement, either expressly or impliedly, grant any
other licenses to Baxter under any patents or other intellectual property owned or controlled by
Halozyme or under which Halozyme has any rights. Halozyme warrants that it owns, controls or has
licenses to all intellectual property rights implied in the appointment of Baxter and its
Affiliates as exclusive distributor(s) pursuant to Section 2.1 of this Agreement. Halozyme
represents that it is not otherwise a party to any agreement that would inhibit or prevent Halozyme
from licensing or otherwise conveying any of these intellectual property rights to Baxter.
Halozyme warrants that the use of the trademarks referenced in Section 8.2 below shall be delivered
free of any claim of any third party for any infringement of any trademark rights of such third
party.
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8.2 Trademarks and Trade Names.
(a) Baxter shall use the trademark “Hylenex” for the promotion, marketing and sale of the
Standalone Product and for no other purpose. Baxter shall own and have the right to maintain such
trademark in the Territory. Baxter shall include on all packaging, labeling and marketing and
promotional materials regarding the Standalone Product the name Halozyme, and such trademark as
reasonably requested by Halozyme as a secondary xxxx, reasonably identifying that such product
incorporates technology of Halozyme. Nothing
in this Agreement shall create an obligation on Halozyme to register or otherwise maintain in
force any marks.
(b) Within thirty (30) days after the Approval Date, Halozyme shall supply Baxter with written
guidelines concerning Halozyme’s preferences and restrictions for trade dress or trademarks used in
the marketing, promotion or distribution of the Standalone Product. Halozyme shall have the right
to approve any trade dress or trademarks used by Baxter with the marketing, promotion or
distribution of the Standalone Product, which approval shall not be unreasonably withheld. Such
right of Halozyme to approve shall be exercised by notifying Baxter in writing of Halozyme’s desire
to approve such trade dress or trademarks. After such notification, Baxter shall supply Halozyme
with layouts and/or specimens of any such trade dress or trade xxxx usage at least fifteen (15)
business days prior to any anticipated use of such. Halozyme shall have ten (10) business days to
review any such layouts and/or specimens, and shall be deemed to approve use of such if Baxter is
not notified in writing of Halozyme’s objection to such use by the end of the ten (10) business day
period. Halozyme may suspend such right of approval, without affecting its right to reactivate such
right of approval, by written notice to Baxter.
(c) Any goodwill associated with any trade marks affixed or applied or used in relation to
Standalone Product sold or otherwise distributed by Baxter pursuant to this Agreement shall accrue
to the sole benefit of Halozyme, except to the extent that such goodwill is associated with any
Baxter owned trademark not specific to the Standalone Product. Nothing in this Agreement shall
create an obligation on Baxter to register or otherwise maintain in force any trademarks. Upon
termination of this Agreement, ownership of any trademark registered by Baxter for use only in
Standalone Product labeling or advertising shall vest in Halozyme, and Baxter shall execute all
documents necessary to effect such transfer of ownership.
(d) Despite any use of Xxxxxx’x general trade dress, trademarks or servicemarks denoting
Baxter as the source of Standalone Product in connection with the packaging, labeling, advertising,
or promotion of Standalone Product, Halozyme shall have no license, express or implied, to use such
general trade dress, trademarks or service marks after the termination of this Agreement.
(e) Except as expressly set forth in the Development Agreement or this Agreement, Baxter shall
not use any of Halozyme’s trademarks, or any xxxx or name confusingly similar thereto, as part of
its corporate or business name or in any other manner, except that (i) Baxter may identify itself
as an authorized distributor of Halozyme, and (ii) Baxter shall not register any trade xxxx or
trade name (including any company name) which
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CONFIDENTIAL TREATMENT REQUESTED
is identical to or confusingly similar to or
incorporates any trade xxxx or trade name which Halozyme or any associated company owns or claims
rights in.
8.3 Intellectual Property Infringement Litigation. Baxter shall inform Halozyme
immediately upon becoming aware of: (i) any infringements or risk of infringements by a third party
of Halozyme’s intellectual property (including but not limited to brands, trademarks, copyrights,
and patents), and (ii) any allegations of infringements or risk of infringements by the Standalone
Product of a third party’s intellectual property or claims of such by a third party.
(a) In the event of any such infringement under (i), Baxter shall allow Halozyme to conduct
(at Halozyme’s sole expense) the defense or settlement of any claim of intellectual property right
infringement by or against a third party in relation to any of Halozyme’s intellectual property.
Baxter shall not compromise, settle or negotiate or make any statement on behalf of Halozyme. At
Halozyme’s expense (as to reasonable out-of-pocket expenses only), Baxter shall cooperate with
Halozyme in connection with any such infringement defense or prosecution.
(b) In the event of any allegations of infringement or risk or infringement under (ii), the
Party first having notice of an infringement claim shall promptly notify the other Party in
writing. The notice shall set forth the facts of the infringement claim in reasonable detail. The
party being sued or threatened under (ii) shall have the right to defend against and settle such
claim with independent counsel of its choice, provided that (1) such party shall consult with the
other party, shall reasonable consider the interests of the other party, and shall not settle or
consent to an adverse judgment that would materially adversely affect the interests of the other
party without its consent; (2) the other party shall cooperate with such party to the extent
allowed by law; and (3) such party shall notify the other party as to the particulars of any
agreement settling an infringement claim to the extent permitted by any such settlement agreement.
Both Parties will share equally any costs of defending such an infringement claim under (ii),
including all damages, fees and expenses, including reasonable attorneys’ fees and expenses.
(c) Third Party Licenses. In the event that the use, sale, offer for sale or
importation of Standalone Product is alleged to infringe a Third Party Patent or a Third Party
trademark (collectively, “Third Party IP”), the Parties will cooperate to formulate a commercially
reasonable strategy for resolving such issue. If the Parties determine that obtaining a license
under such Third Party IP is appropriate, and if a license to such Third Party IP is available, the
Parties agree that Halozyme shall be solely responsible for obtaining a license to such Third Party
IP (and such license shall include a right to sublicense to Baxter), when such Third Party IP
relates to the API or its method of manufacture, and that Baxter shall be solely responsible for
obtaining a license to such Third Party IP (and such license shall include a right to sublicense or
assign to Halozyme), when such Third Party IP relates to the formulation or use of Standalone
Product. The Parties shall share equally all costs and expenses attributable to obtaining and
retaining such Third Party IP license.
8.4 Copyrights. Baxter hereby acknowledges that Halozyme has claimed, or may claim,
copyright protection with respect to certain parts of the Standalone Product and the
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CONFIDENTIAL TREATMENT REQUESTED
labels,
inserts and other materials regarding the Standalone Product. Baxter further acknowledges the
validity of Halozyme’s right to claim copyright protection with respect to such items. Baxter
further acknowledges that Halozyme has the exclusive right (to the exclusion of all others) to
claim the copyright protection with respect to all such items. Halozyme herein gives Baxter
express permission to copy and distribute to its sales representatives Standalone Product
advertising, literature and other materials prepared by or on behalf of Halozyme for the purpose of
fulfilling Xxxxxx’x obligations under the Agreement.
9. Term and Termination.
9.1 Term and Renewal. This Agreement, and the obligations of the parties hereunder,
shall commence on the Restatement Date and continue for the life of the family of PH20 patents (the
“Initial Term”). Thereafter, the Agreement will be automatically extended for additional one year
periods (each a “Renewal Term” and collectively with the Initial Term, the “Term”) until either
party notifies the other party in writing not less than twenty-four (24) months prior, of that
party’s intent to terminate the Agreement.
9.2 Termination.
(a) If a party has materially breached this Agreement and such material breach shall continue
for thirty (30) days for a monetary breach, and sixty (60) days for a non-monetary breach, or such
additional time reasonably necessary to cure such non-monetary breach, provided that the breaching
party has commenced a cure within the sixty (60) day period and is diligently pursuing completion
of such cure, such additional period not to exceed one hundred and twenty (120) days in total after
written notice of such breach was provided to the breaching party by the nonbreaching party, the
nonbreaching party shall have the right at its option to terminate this Agreement effective at the
end of such period.
(b) Baxter may terminate this Agreement at any time upon one hundred and eighty (180) days
prior written notice to Halozyme.
(c) In the event of a bona fide allegation or claim of infringement under Section 8.3, Baxter
shall have the option to suspend distribution of Standalone Product (subject to the rights of
Halozyme under Section 9.2(a)), or terminate this Agreement, by written notice to Halozyme.
(d) Upon the expiration or termination of the Development Agreement, this Agreement shall
immediately terminate.
9.3 Effect of Expiration and Termination. Expiration or termination of the Agreement
shall not relieve the parties of any obligation accruing prior to such expiration or termination.
The provisions of Sections 7, 8.2(c) and 10 shall survive the expiration or termination of the
Agreement. Upon the expiration or termination of the Agreement, Baxter shall have the right to
sell the remaining stock of Standalone Product for a period of twelve (12) months following such
expiration or termination.
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CONFIDENTIAL TREATMENT REQUESTED
10. Miscellaneous.
10.1 Notices. All notices hereunder shall be delivered by facsimile (confirmed by
overnight delivery), or by overnight delivery with a reputable overnight delivery service, to the
following address of the respective parties:
If to Halozyme:
|
Halozyme, Inc. | |
00000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 00 | ||
Xxx Xxxxx, Xxxxxxxxxx 00000 | ||
Attn: President and Chief Executive Officer | ||
Fax: (000) 000-0000 | ||
Phone: (000) 000-0000 | ||
With a copy to:
|
Xxxxxxxx & Xxxxxxxx LLP | |
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000 | ||
Xxx Xxxxx, Xxxxxxxxxx 00000 | ||
Attention: Xxxx X. Xxxxxx | ||
Fax: (000) 000-0000 | ||
Phone: (000) 000-0000 | ||
If to Baxter:
|
Xxxxxx Healthcare Corporation | |
00 Xxxxxx Xxxxxx | ||
Xxx Xxxxxxxxxx, XX 00000 | ||
Attn: General Manager | ||
Fax: (000) 000-0000 | ||
Phone: (000) 000-0000 | ||
With a copy to:
|
Xxxxxx Healthcare Corporation | |
Xxx Xxxxxx Xxxxxxx | ||
Xxxxxxxxx, Xxxxxxxx 00000-0000 | ||
Attn: General Counsel | ||
Fax: (000) 000-0000 | ||
Phone: (000) 000-0000 | ||
And to:
|
Xxxxxx Healthcare SA | |
Xxxxxxxxxxxx 0 | ||
XX-0000 Xxxxxxxxxxx | ||
Xxxxxxxxxxx | ||
Attn: Corporate Counsel | ||
Fax: x00 00 000 00 00 | ||
Phone: x00 00 000 00 00 |
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CONFIDENTIAL TREATMENT REQUESTED
Notices shall be effective on the day of receipt. A party may change its address listed above
by notice to the other party given in accordance with this Section 10.1.
10.2 Force Majeure. Any delay in the performance of any of the duties or obligations
of either party hereto (except the payment of money), to the extent caused by an event outside the
affected party’s reasonable control, shall not be considered a breach of this Agreement, and unless
provided to the contrary herein, the time required for performance shall
be extended for a period equal to the period of such delay. Such events shall include without
limitation, acts of God; acts of public enemies; insurrections; riots; injunctions; embargoes;
labor disputes, including strikes, lockouts, job actions, or boycotts; fires; explosions; floods;
shortages of material or energy; delays in the delivery of raw materials; acts or orders of any
government or agency thereof or other unforeseeable causes beyond the reasonable control and
without the fault or negligence of the party so affected. The party so affected shall give prompt
written notice to the other party of such cause and a good faith estimate of the continuing effect
of the force majeure condition and duration of the affected party’s nonperformance, and shall take
whatever reasonable steps are appropriate to relieve the effect of such causes as rapidly as
possible. If the period of nonperformance by Baxter because of force majeure conditions exceeds
one hundred and eighty (180) calendar days, Halozyme may terminate this Agreement by written notice
to Baxter. If the period of nonperformance by Halozyme because of force majeure conditions exceeds
one hundred and eighty (180) calendar days, Baxter may terminate this Agreement by written notice
to Halozyme.
10.3 Assignment. Neither party shall assign this Agreement or any part hereof or any
interest herein to any non-affiliated third party (or use any subcontractor) without the written
approval of the other party; provided, however, that either party may assign this Agreement without
such consent to an Affiliate or in the case of a merger, consolidation, change in control or sale
of all or substantially all of the assets of the party seeking such assignment or transfer and such
transaction relates to the business covered by this Agreement and the resulting entity assumes all
of the obligations under this Agreement. No assignment shall be valid unless the permitted
assignee(s) assumes all obligations of its assignor under this Agreement. No assignment shall
relieve any party of responsibility for the performance of its obligations hereunder. Any
purported assignment in violation of this Section 10.3 shall be void.
10.4 Entire Agreement. The parties hereto acknowledge that this Agreement, together
with the Stock Purchase Agreement, the Quality Agreement and the Development Agreement sets forth
the entire agreement and understanding of the parties and supersedes all prior written or oral
agreements or understandings, including the Original Distribution Agreement, with respect to the
subject matter hereof. No modification of any of the terms of this Agreement, or any amendments
thereto, shall be deemed to be valid unless in writing and signed by an authorized agent or
representative of both parties hereto. No course of dealing or usage of trade shall be used to
modify the terms and conditions herein.
10.5 Waiver. None of the provisions of this Agreement shall be considered waived by
any party hereto unless such waiver is agreed to, in writing, by authorized agents of such party.
The failure of a party to insist upon strict conformance to any of the terms and conditions hereof,
or failure or delay to exercise any rights provided herein or by law shall not be deemed a waiver
of any rights of any party hereto.
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CONFIDENTIAL TREATMENT REQUESTED
10.6 Obligations to Third Parties. Each party warrants and represents that this
Agreement does not conflict with any contractual obligations, expressed or implied, undertaken with
any third party.
10.7 Independent Contractor. Baxter and Halozyme are acting under this Agreement as
independent contractors and neither shall be considered an agent of, or joint venturer with, the
other. Unless otherwise provided herein to the contrary, each party shall
furnish all expertise, labor, supervision, machining and equipment necessary for the
performance of its obligations hereunder and shall obtain and maintain all building and other
permits and licenses required by public authorities.
10.8 Governing Law. In any action brought regarding the validity, construction and
enforcement of this Agreement, it shall be governed in all respects by the laws of the State of New
Jersey, without regard to the principles of conflicts of laws, and shall not be governed by the
United Nations Convention on Contracts for the International Sale of Goods. The courts of the
State of California shall have jurisdiction over the parties hereto in all matters arising
hereunder and the parties hereto agree that venue shall be a state or federal court in California.
10.9 Severability. If any term or provision of this Agreement shall for any reason be
held invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this Agreement shall be
interpreted and construed as if such term or provision, to the extent the same shall have been held
to be invalid, illegal or unenforceable, had never been contained herein.
10.10 Headings, Interpretation. The headings used in this Agreement are for
convenience only and are not part of this Agreement.
10.11 Baxter Entities. Each of Xxxxxx Healthcare Corporation and Xxxxxx Healthcare
S.A. (a) represents and warrants that all Affiliates within the definition of Baxter shall be bound
by the terms and conditions of this Agreement as if each were an original signatory to this
Agreement, and (b) shall be jointly and severally liable for all acts and omissions of any Baxter
entity in connection with this Agreement. Any act or omission of, or notice to, any Baxter entity
shall constitute the act or omission of, or notice to, each Baxter entity.
10.12 Counterparts. The 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.
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CONFIDENTIAL TREATMENT REQUESTED
IN WITNESS WHEREOF, the parties hereto have each caused this Amended and Restated Exclusive
Distribution Agreement to be executed by their duly-authorized representatives as of the
Restatement Date above written.
HALOZYME, INC. |
||||
By: | /s/ Xxxxxxxx Xxx | |||
Name: | Xxxxxxxx Xxx | |||
Title: | President and Chief Executive Officer | |||
XXXXXX HEALTHCARE CORPORATION |
||||
By: | /s/ Xxxxx Xxxxxxx | |||
Name: | Xxxxx Xxxxxxx | |||
Title: | President | |||
XXXXXX HEALTHCARE S.A. |
||||
By: | /s/ Xxxxxx X. Xxxxxxx | |||
Name: | Xxxxxx X. Xxxxxxx | |||
Title: | Vice President of Finance | |||
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CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
MINIMUM DILIGENCE MILESTONES
Without limiting the generality of Xxxxxx’x obligations set forth in Section 2.2, Baxter shall
spend not less than the following amounts on Development and Promotional Expenses (as defined
below) for each of the following years:
Year | Minimum Xxxxxx | |||
0000 |
$ | * | ** | |
2008 |
$ | * | ** | |
2009 |
$ | * | ** |
For purposes of this Agreement, “Development and Promotional Expenses” shall mean the direct
internal and out-of-pocket costs of Baxter specifically identifiable to the clinical studies,
promotion, marketing, advertising, launch and sales of the Standalone Product (excluding costs
associated with (a) production, storage, transportation, handling or distribution of Standalone
Product, and (b) management, administration, facilities, occupancy and overhead), calculated in a
manner consistent with the customary industry practices for pharmaceutical products.
Within thirty (30) days after the end of each June and December, Baxter shall prepare and provide
Halozyme with a reasonably detailed written report showing the calculation of its Development and
Promotional Expenses during each of the immediately preceding six (6) month period. Upon
Halozyme’s written request, which shall not be more than once in each six (6) month period, Baxter
shall provide Halozyme with reasonable supporting evidence for all Development and Promotional
Expenses.
*** | Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. |
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