1
EXHIBIT 10.14
CONFIDENTIAL TREATMENT REQUESTED
Confidential Portions of This Agreement Which Have Been Redacted Are Marked
With Brackets ([***]). The Omitted Material Has Been Filed Separately With The
Securities And Exchange Commission.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is entered into as of the 29th day
of January, 1999, by and between HORIZON PHARMACEUTICAL CORPORATION, a company
incorporated under the laws of Delaware, with its principal place of business at
000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 ("Horizon"), and AMERICAN
HOME PRODUCTS CORPORATION, a company incorporated under the laws of Delaware,
with its principal place of business at Five Giralda Farms, Madison, New Jersey
07940, USA ("AHP"). Both Horizon and AHP are referred to herein individually as
a "Party" and collectively as the "Parties".
WHEREAS, AHP has rights to certain Know-How (as hereinafter defined) and
Trademarks (as hereinafter defined) relating to the Products (as hereinafter
defined);
WHEREAS, Horizon is qualified to market pharmaceutical products in the
Territory (as hereinafter defined);
WHEREAS, Horizon desires to engage AHP's or its Affiliate's (as hereinafter
defined) facilities and services to manufacture (a) the Product for distribution
and sale by Horizon, and AHP is willing to enter into a separate manufacturing
and supply agreement contemporaneously herewith; and
WHEREAS, AHP desires to grant and transfer to Horizon and Horizon desires
to receive a license and other rights and assets under the terms and conditions
set forth herein;
NOW THEREFORE, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained in this Agreement, the Parties
agree as follows:
1. DEFINITIONS.
For the purposes of this Agreement, the capitalized terms hereunder shall
have the meanings defined below:
1.1 "Affiliate(s)" shall mean, in the case of either Party, any
corporation, joint venture, or other business entity which directly or
indirectly controls, is controlled by, or is under common control with
that Party. "Control", as used in this Section 1.1, shall mean having
the power to direct, or cause the direction of, the management and
policies of an entity, whether through ownership of voting securities,
by contract or otherwise. Notwithstanding the foregoing, for purposes
1
2
of this Agreement, the term "Affiliate" shall not include subsidiaries
in which a Party or its Affiliates owns a majority of the ordinary
voting power to elect a majority of the board of directors but is
restricted from electing such majority by contract or otherwise, until
such time as such restrictions are no longer in effect.
1.2 "Closing" shall have the meaning set forth in Section 3.3 hereof.
1.3 "Commercially Reasonable Efforts" shall mean efforts and resources
normally used by a Party for a compound or product owned by it or to
which it has rights, which is of similar market potential at a similar
stage in its product life, taking into account the competitiveness of
the marketplace, the proprietary position of the compound or product,
the regulatory structure involved, the profitability of the applicable
products, and other relevant factors.
1.4 "Customer Contracts" shall mean those contracts and outstanding bids
listed in Exhibit A hereto, between AHP or its Affiliates and certain
Third Parties pursuant to which such Third Parties, inter alia,
purchase Products from AHP or such Affiliates in the Territory.
1.5 "Effective Date" shall mean the date on which the Closing occurs in
accordance with Section 3.3 hereof.
1.6 "Field" shall mean use in humans, excluding injectable forms of the
Substance for human use.
1.7 "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitust Improvements Act of
1976, as amended, and the rules and regulations promulgated
thereunder.
1.8 "Know-How" shall mean all proprietary technical and clinical
information, data and know-how relating to the Products, whether or
not patentable, owned as of the Effective Date or acquired during the
term of this Agreement, by AHP or its Affiliates. Know-How shall
include, without limitation, all processes, formulas, discoveries and
inventions whether relating to biological, chemical, pharmacological,
toxicological, pharmaceutical, physical and analytical safety, quality
control and clinical data, including, without limitation, phase IV
clinical study data. Know-How shall also include relevant medical
information relating to the Products (such as customer questions,
responses thereto and adverse drug event (ADE) history) in AHP's
possession. The term "Know-How", however, shall not include (i) any
know-how, processes, information and data which is, as of the
Effective Date or later becomes, generally available to the public or
(ii) any general manufacturing know-how not specific to the Products.
1.9 "Letter of Intent" shall mean that certain Letter of Intent which (i)
is dated as of December 14, 1998 and (ii) relates to the transaction
contemplated by this Agreement.
2
3
1.10 "Net Sales" shall mean amounts invoiced for sales of the Products by
Horizon, its Affiliates and sublicensees to Third Parties in the
Territory, less the sum of (i) trade, quantity and cash discounts
actually allowed or paid, (ii) credits or allowances given or made for
return of previously sold products, (iii) rebates and chargebacks
specifically identified to the sale of the Products by Horizon, its
Affiliates and sublicensees, and (iv) taxes, duties or other
governmental charges levied on or measured by the billing amount, as
adjusted for rebates and refunds. Such amounts shall be determined
from the books and records of Horizon, its Affiliates and sublicensees
which shall be maintained in accordance with generally accepted
accounting principles. Sales of Products by and between Horizon, its
Affiliates and sublicensees are not sales to Third Parties and shall
be excluded from Net Sales calculations for all purposes.
1.11 "Product(s)" shall mean those Products listed in Exhibit B, for use in
the Field, each of which have been marketed by AHP as of the date this
Agreement was signed by the Parties.
1.12 "Product Supply Agreement" shall have the meaning set forth in Section
7.1 hereof.
1.13 "Regulatory Approval" shall mean all authorizations by the appropriate
Regulatory Authorities which are required for the manufacture (other
than manufacturing facilities licenses, approvals or authorizations)
marketing, promotion, pricing and sale of the Products in the
Territory, including an approved New Drug Application(s) for the
Product(s) which are owned by AHP or its Affiliates.
1.14 "Regulatory Authority" shall mean any national, supra-national,
regional, state or local regulatory agency, department, bureau,
commission, council or other governmental entity in the Territory
involved in the granting of Regulatory Approvals for the Product
including, without limitation, the United States Food and Drug
Administration ("FDA").
1.15 "Substance" shall mean the chemical substance 3-[(cyclopentylhydroxy
phenyl acetyl) oxy] -1, 1-dimethyl (pyrrolidinium bromide, otherwise
known as glycopyrrolate).
1.16 "Supply Price" shall mean the price paid by Horizon to AHP under the
Product Supply Agreement for the purchase of a unit of Product.
1.17 "Systems Transfer Plan" shall have the meaning set forth in Section
3.2 hereof.
1.18 "Territory" shall mean the United States of America, its territories
and possessions, and the Commonwealth of Puerto Rico.
3
4
1.19 "Third Party(ies)" shall mean any person(s) or entity(ies) other than
Horizon, AHP, or their respective Affiliates.
1.20 "Trademarks" shall mean the trademarks listed on Exhibit C hereto,
which, as of the date this Agreement was signed by the Parties, has
been used by AHP in connection with the promotion, marketing and sale
of the Products.
1.21 "Transaction Agreements" shall mean this Agreement and the Product
Supply Agreement.
1.22 "$" shall mean United States Dollars.
2. RIGHTS GRANTED.
2.1 Licenses.
2.1.1 License of Know-How. Subject to the terms and conditions
contained in this Agreement, AHP, as of the Effective Date,
hereby grants to Horizon an exclusive license (exclusive, even
as to AHP, subject to the provisions of Section 2.3), under
the Know-How to make, have made, use, market, distribute,
offer for sale and sell the Product in the Territory. Horizon
accepts all the obligations set forth in this Agreement and
agrees to use the Know-How only in connection with the
manufacture, sale and promotion of the Products in the
Territory, only for so long as the licenses granted under this
Section 2.1.1 remain in effect.
2.1.2 License of Trademark. Subject to the terms and conditions
contained in this Agreement, AHP, as of the Effective Date,
hereby grants to Horizon an exclusive license (exclusive, even
as to AHP), to use the Trademark only in connection with the
manufacture, sale and promotion of the Products in the
Territory. Horizon accepts all the obligations set forth in
this Agreement and agrees to use the Trademark in the
Territory, only for so long as the license granted under this
Section 2.1.2 remains in effect.
2.1.3 Sublicenses. Horizon may grant one or more Affiliates or Third
Parties sublicenses under the licenses granted to Horizon
under Sections 2.1.1 and 2.1.2 in the Territory, provided
that:
(a) Horizon obtains AHP's prior written consent, such
consent not to be unreasonably withheld;
(b) The parties to and the economic terms of any such
agreement shall be fully disclosed to AHP, and the terms
of such agreement shall be consistent with all of the
relevant terms and provisions of this Agreement;
4
5
(c) To the extent that any such Third Party is to Perform
any obligation of Horizon under this Agreement, Horizon
shall remain liable for such performance; and
(d) Horizon shall pay AHP the trademark royalties on all Net
Sales of Product by such Affiliate or Third Party, as
set forth in Section 4.2.1.
2.2 Assignment of Regulatory Approvals. Subject to the terms and
conditions contained in this Agreement, AHP shall assign to Horizon at
the Closing ownership of all its right, title and interest in and to
the Regulatory Approvals in the Territory. At the Closing, all of
AHP's obligations under this Agreement with respect to such Regulatory
Approvals shall immediately terminate (with the exception of
reporting, as required under Section 6.2 hereof, to Horizon
significant safety and efficacy issues relating to Product or
Substance of which AHP is aware and which are required for NDA
reporting in the United States) and thereafter, AET shall have no
further right in or to such Regulatory Approvals in the Territory,
except as provided in Section 6.1.2 hereof Subject to the notice and
cure provisions of Section 11.2.2, if Horizon fails to pay to AHP the
entire amount of the License Fee when due, Horizon shall immediately
reassign the Regulatory Approvals to AHP.
2.3 Retained Rights. Notwithstanding the licenses granted to Horizon under
Section 2.1, after the Closing, AHP shall retain ownership of and all
rights to (i) the current NDC numbers and Product Codes it uses for
each of the Products (subject to Horizon's right to sell Product under
Section 2.7 of the Product Supply Agreement), (ii) the real and
personal property (including, without limitation, all equipment) and
general manufacturing know-how used by AHP in manufacturing the
Products (either before, during or after the term of this Agreement)
other than Know-How, (iii) all accounts receivable from sales of the
Products by or on behalf of AHP, and (iv) all inventories of the
Products that have not otherwise been purchased by Horizon pursuant to
Section 7.1 hereof and the Product Supply Agreement. Additionally, AHP
retains ownership of and the right to use the Know-How (i) to
manufacture Products for Horizon pursuant to Section 7.1 hereof and
the Product Supply Agreement; (ii) to manufacture Products for sale
outside of the Territory (including, without limitation, for sale to
AHP's Affiliates or Third Parties in the Territory, for final
distribution and sale outside of the Territory); (iii) to manufacture
products containing Substance for use or sale, both in and outside of
the Territory, as veterinary pharmaceutical products and as injectable
product for human use; and (iv) to manufacture, use and sell Products
in the Territory if this Agreement is terminated by AHP pursuant to
Section 11.2.2 hereof and all payments due to AHP pursuant to Section
4.1.1 have not been fully paid to AHP.
5
6
2.4 Horizon's Covenant Not To Compete. Horizon agrees that, during the
term of this Agreement, Horizon and its Affiliates will not utilize
the Know-How, Regulatory Approvals or Trademarks in any manner to
make, have made, use, market, offer to sell or sell any product
containing the Substance as a pharmaceutically active ingredient for
use as a veterinary pharmaceutical agent or for injectable dosage
forms for human use.
3. PRE-CLOSING ACTIVITIES; CLOSING.
3.1 Government Approvals. Each of Horizon and AHP shall use its good faith
efforts to eliminate any concern on the part of any court or
government authority regarding the legality of the proposed
transaction, including, if required by state antitrust authorities,
promptly taking all steps to secure government antitrust clearance,
including, without limitation, cooperating in good faith with any
government investigation including the prompt production of documents
and information demanded by a second request for documents and of
witnesses if requested. Horizon and AHP will cooperate and use
respectively all reasonable efforts to make all registrations, filings
and applications, to give all notices and to obtain by the Closing all
governmental or other consents, transfers, approvals, orders,
qualifications, authorizations, permits and waivers, if any, and to do
all other things necessary or desirable for the consummation of the
transactions as contemplated hereby. Neither Party shall be required,
however, to divest products or assets or materially change its
business if doing so is a condition of obtaining approval under the
governmental approvals of the transactions contemplated by this
Agreement.
3.2 Systems Transfer. During the time period between the signing of this
Agreement by the Parties and the Closing, the Parties will develop a
mutually acceptable post Closing operation plan substantially in the
form of Exhibit D hereto (the "Systems Transfer Plan") to transfer the
processing of chargebacks, government rebates, returns (including the
processing of customer credits), obligations under Customer Contracts,
customer service functions, and regulatory reporting functions from
AHP to Horizon and Know-How necessary to enable Horizon to use,
market, distribute and sell Product in the Territory. Such plan shall
be reduced to writing by Horizon and approved by both Parties and
shall be implemented by the Parties as soon as practicable after the
Closing.
3.3 The Closing.
3.3.1 Time and Place. The Closing of the transactions contemplated
hereby shall take place at 10:00 A.M. (local time) on January
29, 1999 at the offices of Wyeth-Ayerst Laboratories Division
of American Home Products Corporation, St Davids,
Pennsylvania, or at such other time and place as the Parties
may agree. The Closing shall be effective as of midnight on
the Effective Date.
6
7
[***] - CONFIDENTIAL TREATMENT REQUESTED
3.3.2 Payment of License Fee. At the Closing, Horizon shall make the
payment required by Section 4.1(i) hereof, which payment shall
be made by wire transfer in funds immediately available to
such bank account as AHP may designate at least three (3)
business days in advance.
3.3.3 Customer Information. To the extent the following items have
not previously been provided to Horizon, AHP, at the Closing,
will deliver to Horizon
(a) complete and accurate copies of AHP's relevant customer
lists including relevant sales data for the Products;
and
(b) copies of current and pending customer sales contracts
for the Product, which contracts shall be redacted for
purposes of deleting information that is not related to
the Product and other confidential information.
3.3.4 Other Agreements. At the Closing, Horizon and AHP shall each
execute and deliver to the other the Systems Transfer Plan and
the Product Supply Agreement in the form attached hereto as
Exhibit F.
3.3.5 Certifications of Representations and Warranties. At the
Closing, each Party shall certify to the other that the
representations and warranties set forth in Article 10 hereof
remain true and in effect as of the day of Closing. In the
event that one or more of the representations and warranties
do not remain true and in effect as of the day of Closing, the
Party receiving such certification shall have the option to
(i) complete the Closing (and such Party shall be required to
expressly waive its rights under the specific representation
and warranty which is no longer true and/or in effect as of
the day of closing) or (ii) terminate this Agreement as
provided in Section 11.2.1.
3.4 Conduct of Business from Signing to Closing. AHP covenants and
agrees that, during the period between the signing of this Agreement
and Closing, it will use its Commercially Reasonable Efforts to
conduct the business relating to Product in a manner consistent with
its prior practices.
4. CONSIDERATION.
4.1 License Fee. In partial consideration of the licenses granted to
Horizon under Section 2.1 hereof and the other rights and assets
transferred to Horizon hereunder, Horizon shall pay AHP a
nonrefundable, noncreditable license fee (the "License Fee") as
follows (i) [***] dollars ($[***]) which shall be due and payable at
7
8
[***] - CONFIDENTIAL TREATMENT REQUESTED
the Closing and (ii) [***] payments each in the amount of [***]
dollars ($[***]) due [***], for a total of [***] dollars ($[***]) in
addition to the payment due under Section 4.1(i) above.
4.2 Royalties.
4.2.1 Royalty Rates. In further consideration of the trademark
license granted to Horizon under Section 2.1.2 hereof, during
the term of this Agreement, Horizon shall pay AHP royalties in
the amount of
(a) [***] of the Net Sales for all Products sold by or on
behalf of Horizon, its Affiliates and sublicensees prior
to the [***] anniversary of the Effective Date up to
annual Net Sales of $[***]; and
(b) [***] of the Net Sales for all Products sold by or on
behalf of Horizon, its Affiliates and sublicensees prior
to the [***] anniversary of the Effective Date of Net
Sales above annual Net Sales of $[***]; and
(c) [***] of the Net Sales for all Products sold by or on
behalf of Horizon, its Affiliates and sublicensees after
the [***] anniversary of the Effective Date.
4.2.2 Minimum Royalties. During the period from the Effective Date
to the fifth anniversary of the Effective Date, Horizon shall
pay a minimum royalty to AHP each calendar quarter of [***]
dollars ($[***]).
4.2.3 Scope of Royalty Obligations. No royalties shall be due upon
the sale or other transfer among Horizon and its Affiliates,
but in such cases the royalty shall be due and calculated upon
Horizon's or its Affiliates' Net Sales to the first
independent Third Party.
4.2.4 Royalties Paid Quarterly. For each calendar quarter, or part
thereof, in which Horizon sells Product and is obligated to
pay to AHP royalties with respect to such sales pursuant to
this Section 4.2, Horizon shall, for the first four calendar
quarters following the Effective Date within forty five (45)
calendar days, and for each calendar quarter thereafter within
thirty (30) calendar days, following the close of each such
calendar quarter furnish to AHP a written report for the
calendar quarter showing (i) the number of units of each
Product (by NDC number) sold by Horizon, its Affiliates and
sublicensees in the Territory during such calendar quarter,
(ii) the Net Sales of Product (by NDC number) sold by Horizon,
its Affiliates and sublicensees in the Territory during such
calendar month, and (iii) the royalties payable under this
Agreement for such calendar quarter. Simultaneously with the
8
9
submission of the written report, Horizon shall pay to AHP a
sum equal to the aggregate royalty due for such calendar
quarter calculated in accordance with this Agreement
(reconciled for any previous overpayments, underpayments or
credits).
4.3 Method of Payment. All payments to be made by Horizon to AHP
pursuant to Section 4.2 hereof shall be made in United States
dollars by wire transfer simultaneously with the submission of the
report required under Section 4.2.4 hereof.
4.4 Maintenance of Records by Horizon; Audits.
4.4.1 Record Keeping by Horizon. Horizon and its Affiliates
shall, and shall cause its sublicensees to, keep
accurate books and accounts of record in connection
with the sale by or on behalf of Horizon, its
Affiliates and sublicensees of the Products in
sufficient detail (i) to permit accurate
determination of all figures necessary for
verification of payments required to be paid
hereunder and (ii) to verify compliance with the
provisions of Section 8.3 hereof. Horizon, its
Affiliates and sublicensees shall maintain such
records for a period of three (3) years after the end
of the year in which they were generated.
4.4.2 Audit by AHP. AHP, through an independent certified
public accountant reasonably acceptable to Horizon,
shall have the right, at its own expense, to access
the books and records of Horizon, its Affiliates and
sublicensees as may be reasonably necessary (i) to
verify the accuracy of the royalty reports and all
payments made hereunder and (ii) to verify compliance
with the provisions of Section 8.3 hereof, including,
without limitation, the determination of any
additional payments that may be due to AHP pursuant
to Section 8.3 hereof. Such access shall be conducted
after reasonable prior written notice to Horizon and
during ordinary business hours and shall not be more
frequent than once per calendar year, in respect of
any calendar year ending not more than thirty (30)
months prior to the date of such notice. Upon the
expiration of the thirty (30) month period described
in the immediately preceding sentence, the
calculation of amounts payable with respect to such
time periods shall be binding and conclusive upon
AHP, and Horizon, its Affiliates and sublicensees
shall be released from any liability or
accountability with respect to payments for such time
periods. The parties agree that such independent
certified public accountant shall disclose to AHP
only whether the royalty reports are correct or
incorrect, the specific details concerning any
discrepancies in such reports, whether the provisions
of Section 8.3 hereof have been complied with and the
specific details concerning any noncompliance with
the provisions of Section 8.3 hereof. AHP agrees to
keep in strict confidence all information learned in
the course of such
9
10
audit, except when it is necessary to reveal such
information in order to enforce its rights under this
Agreement.
4.4.3 Underpayments/Overpayments. If such independent
certified public accountant's report shows any
underpayment, Horizon shall remit or shall cause its
Affiliates and sublicensees to remit to AHP within
thirty (30) days after AHP's receipt of such report,
(i) the amount of such underpayment (ii) interest on
such underpayment at the prime rate quoted by Chase
Manhattan Bank N.A. from the date payment was first
due until the date of payment of such underpayment
and (iii) if such underpayment exceeds five percent
(5%) of the total amount owed for the calendar year
then being audited, the reasonable fees and expenses
of such independent certified public accountant
performing the audit. Any overpayments, less the
reasonable fees and expenses of such independent
certified public accountant, shall be fully
creditable against amounts payable in subsequent
payment periods.
4.5 Taxes and Withholding. All taxes levied or incurred on account
of any payments from Horizon to AHP accruing under this
Agreement, by national, state or local governments, will be
assumed and paid by Horizon, except taxes levied thereon as
income to AHP and if such taxes are required to be withheld by
Horizon they will be deducted from payments due to AHP and
will be timely paid by Horizon to the proper taxing authority
for the account of AHP, a receipt or other proof of payment
therefor secured and sent to AHP as soon as practicable.
5. DISCLOSURE OF KNOW-HOW; ASSUMPTION OF OBLIGATIONS
5.1 Disclosure of Know-How. At or immediately after the Closing, in
accordance with Section 3.2, AHP shall promptly disclose to Horizon
that Know-How currently utilized by or on behalf of AHP or its
Affiliates which is necessary to enable Horizon to use, market,
distribute and sell the Product in accordance with the Transaction
Agreements.
5.2 Customer Contracts. A complete and accurate list of each of the
current and pending Customer Contracts pursuant to which AHP or an
AHP Affiliate is, with respect to the current Customer Contracts
immediately prior to the date of this Agreement, selling Products,
along with other products of AHP and its Affiliates, to Third Party
buyers is attached hereto as Exhibit A. AHP agrees that between the
date of signing of this Agreement and Closing, no new Customer
Contracts shall be executed without first consulting with Horizon.
AHP further agrees that between the date of signing of this
Agreement and Closing, no new bids shall be made without first
consulting with and obtaining the written consent of Horizon. The
parties agree that bids outstanding as of the date of the signing of
this Agreement shall be handled in AHP's normal course of business.
10
11
[***] - CONFIDENTIAL TREATMENT REQUESTED
The Parties understand and agree that because the right to sell
Product is being transferred to Horizon pursuant to this Agreement,
as of the Effective Date AHP will no longer have the right to sell
or, except as provided below, adjust the price of Product under the
Customer Contracts, provided, however, that Horizon agrees that it
will continue to honor all of AHP's commitments made in each such
Customer Contract with respect to supplying the Product, including,
without limitation, the sale prices as adjusted in accordance with
such Customer Contracts, for the Products throughout the term of
each such Customer Contract. After the Closing, upon Horizon's
request, AHP and Horizon will request each Third Party to the
Customer Contracts to relieve AHP of its obligations to provide
Product under each such Customer Contract. In addition, to the
extent that AHP and Horizon are unable to obtain a release from a
Third Party of AHP's obligations to supply the Product under such
Customer Contract, then upon the request of Horizon, AHP shall use
its Commercially Reasonable Efforts to take actions that are
permitted under the terms of such Customer Contract to minimize the
commitment for Product thereunder, including without limitation,
adjusting Product prices, reducing the term of such Customer
Contract solely with respect to the Product and terminating AHP's
obligations with respect to Product under any such Customer
Contract, provided, however, that AHP shall not be required to
either (i) adjust prices or terms relating to products other than
Products, (ii) make any payments to such Third Party in
consideration for making such price adjustments or modifications to
the Customer Contract or (iii) terminate any such Customer Contract
with respect to products other than Products. AHP agrees that
following the signing of this Agreement, it will not take any action
with respect to any Customer Contract which will extend the term of
such Customer Contract for any Product or otherwise adversely affect
Horizon with respect to any Product, without the prior written
consent of Horizon. All sales of the Product after the Closing shall
be booked by Horizon.
5.3 Chargebacks. As of the Closing, Horizon will be responsible for all
customer chargebacks for Product sold in the Territory, provided,
however, that, with respect to such Product sales, AHP, for a period
of [***] after the Effective Date, will reimburse Horizon for all
qualified customer chargebacks having Activity Dates prior to the
Effective Date. For purposes of this Section 5.3, the "Activity
Date" is the date a wholesaler ships the Product to a customer under
terms of a customer sales contract or pursuant to a purchase order
issued by such customer.
5.4 Rebates. As of the Closing, Horizon will be fully responsible for
all Federal, State and Third Party rebate programs for Product sold
in the Territory under Horizon's NDC numbers, including all
reporting activities associated with such programs. Additionally, as
of the Closing, Horizon will be financially responsible for all
Federal, State and Third Party rebate programs for Product sold in
the Territory under AHP's label, provided, however, that with
respect to such Product sales, AHP will continue to prepare the
11
12
[***] - CONFIDENTIAL TREATMENT REQUESTED
appropriate Federal and State rebate reports and process Federal and
State rebates for the sale of such Product and Horizon will
reimburse AHP for [***]. For purposes of this Section 5.4, the
"Report Date" is the date a qualified rebate invoice is issued under
applicable Federal or State Rebate Programs.
5.5 Returns. As of the Effective Date, Horizon will be responsible for
all returns of Product sold in the Territory, provided, however,
that AHP will reimburse Horizon for all qualified returns of such
Product sold by AHP to Third Parties prior to the Effective Date.
The Parties agree to track sales and returns of Product by lot
number to determine whether such Product was sold to Third Parties
by AHP prior to the Effective Date or by Horizon after the Effective
Date. AHP's liability pursuant to this Section 5.5 for such returns
shall not exceed [***] and all returns in excess of such limitation
shall be borne solely by Horizon.
5.6 Reimbursement. AHP shall reimburse Horizon for chargebacks, rebates
and returns according to Sections 5.3, 5.4 and 5.5 as follows:
Horizon agrees to provide AHP with an invoice for amounts due under
Sections 5.3, 5.4 and 5.5 within thirty (30) days after the end of
each calendar month with the documentation required to verify the
same. AHP agrees to reimburse Horizon in accordance with Sections
5.3, 5.4 and 5.5 hereof within thirty (30) days after the receipt of
the invoice and all required documentation.
6. REGULATORY MATTERS.
6.1 Horizon Responsibilities.
6.1.1 Disclosure of Regulatory Approvals. Within thirty (30) days
after the Effective Date, AHP shall provide Horizon with a
copy of all correspondence or other documents reasonably
related to such Regulatory Approvals. Additionally, within
such thirty (30) day period, AHP shall provide to Horizon a
current list of suppliers for Materials used in the
manufacture of Products.
6.1.2 Right of Reference. Horizon irrevocably grants to AHP the
right to reference the Regulatory Approvals to support AHP's
Product related activities outside of the Territory and to
support any veterinary pharmaceutical products containing
Substance or any injectable products for human use, which
AHP currently markets or sells or may, in the future, market
or sell. Horizon shall not amend the Regulatory Approvals
without the prior written consent of AHP, such consent not
to be unreasonably withheld, and AHP shall respond to
Horizon's request for consent within thirty (30) days from
such request.
12
13
6.1.3 Responsibilities. After the Effective Date, Horizon shall be
solely responsible for conducting all activities in connection
with such Regulatory Approvals, including, without limitation,
communicating and preparing and filing all reports (including,
without limitation, adverse drug experience reports) with the
appropriate Regulatory Authorities in the Territory and
interacting with any Third Parties with respect to Products
sold or distributed in the Territory; provided, however, that
for up to sixty (60) days after the Effective Date, AHP shall
assist and cooperate in the transition of such activities to
Horizon. Additionally, to the extent that Horizon is
obligated, under applicable laws and regulations, to report to
the Regulatory Authorities in the Territory, adverse drug
experiences associated with Product sold by or on behalf of
AHP outside of the Territory, AHP shall provide Horizon with
information about such adverse drug experiences in accordance
with the provisions of Section 6.2 hereof and to the extent
that, AHP is obligated under applicable laws and regulations
to report adverse drug experiences associated with Product
sold by or on behalf of Horizon inside the Territory, Horizon
shall provide AHP with information about such adverse drug
experiences in accordance with the provisions of Section 6.2
hereof. Upon written request of Horizon, AHP shall provide
Horizon with all additional written information in AHP's
possession which directly relates to the Products in the Field
as AHP shall have developed and which would be useful in
supporting the Regulatory Approvals.
6.1.4 Payment of Fees. After the Effective Date, Horizon shall pay
all NDA maintenance fees and any establishment license fees of
Horizon, its Affiliates or Third Parties which must be paid
with respect to facilities used in the manufacture of Product
by or on behalf of Horizon. Notwithstanding the foregoing, for
so long as AHP is supplying Product to Horizon in accordance
with the Product Supply Agreement, AHP shall pay any
establishment license fees which must be paid with respect to
AHP's, its Affiliate's or subcontractor's facilities used for
the manufacture of such Product.
6.2 Adverse Drug Experience Reporting. In order for the Parties to
comply with their respective responsibilities under this Article 6
and otherwise relating to the reporting of adverse drug experiences,
to the extent either Party receives any information regarding
adverse drug experiences related to the use of the Product, whether
such use is within or outside of the Territory, such Party shall
promptly provide the other Party with such information in accordance
with the Adverse Event Reporting Procedures (as may be amended from
time to time upon mutual agreement) set forth in Exhibit E.
13
14
[***] - CONFIDENTIAL TREATMENT REQUESTED
7. SUPPLY.
7.1 Supply of Product by AHP. For the term set forth in the Product
Supply Agreement, AHP, either directly or through one or more
subcontractors, shall manufacture and supply Products to Horizon for
sale in the Territory and Horizon shall purchase from AHP its entire
requirements of Products for sale in the Territory, all in
accordance with the terms and conditions of the Product Supply
Agreement, in the form attached hereto as Exhibit F, to be entered
into by the Parties at the Closing.
7.2 Supply of Product by Horizon. Following the term set forth in the
Product Supply Agreement and thereafter:
(a) Horizon shall be responsible, at its own expense, for
manufacturing its requirements of Product, either by itself or
through a Third Party;
(b) Upon AHP's request, Horizon shall purchase from AHP (i)
reasonable quantities of AHP's residual inventories of
Products having not less than twelve months remaining dating
at the then current purchase price and (ii) reasonable
quantities of AHP's useable, residual inventories of Product
specific Materials (as defined in the Product Supply
Agreement), including, without limitation, all labels and
other Product specific packaging materials at AHP's
fully-absorbed manufacturing costs;
(c) Upon AHP's request, Horizon would supply AHP's requirements of
Products for sale by AHPC outside the Territory at Horizon's
then fully-absorbed manufacturing cost plus a [***] xxxx-up,
which purchase prices shall be increased once each year by
[***].
(d) Upon AHP's request, Horizon will use its Commercially
Reasonable Efforts to facilitate discussions between AHP and
any Third Party manufacturer with which Horizon may be in
discussions regarding the manufacture of the Product following
the term of the Product Supply Agreement.
7.3 Supply of Substance by Horizon. Following the term set forth in the
Product Supply Agreement, and thereafter:
(a) Horizon shall be responsible, at its own expense, for
manufacturing its requirements of bulk Substance, either by
itself or through a Third Party;
14
15
(b) Upon AHP's request, Horizon shall purchase from AHP (i)
reasonable quantities of AHP's residual inventories of the
bulk Substance and (ii) reasonable quantities of AHP's
residual inventories of Substance specific Materials (as
defined in the Substance Supply Agreement), including without
limitation, all labels and other Substance specific packaging
materials, in each case at AHP's fully-absorbed manufacturing
costs; and
(c) Upon AHP's request, Horizon will use its Commercially
Reasonable Efforts to facilitate discussions between AHP and
any Third Party manufacturer with which Horizon may be in
discussions regarding the manufacture of the Substance
following the term of the Product Supply Agreement.
8. PROMOTION, MARKETING AND SALE OF PRODUCTS.
8.1 Diligence. As of the Closing, Horizon shall be solely responsible
for and shall use its Commercially Reasonable Efforts to promote,
market, sell and distribute the Products in the Territory.
8.2 Materials and Promotional Claims. Horizon at all times shall be
solely responsible for complying with all applicable laws and
regulations in its promotion and marketing of the Products.
8.3 Timing of Sales. Horizon agrees that it and its Affiliates shall
not, by any action or act of omission cause sales of Products that
would have otherwise occurred prior to the end of the fifth
anniversary of the Effective Date, to occur after the fifth
anniversary of the Effective Date.
Such actions or acts of omission may include, without limitation,
announcing or implementing changes in the price of Products, or
delaying the filling of orders. AHP shall have the right to audit,
in accordance with Section 4.5.2 hereof all of Horizon's records
reasonably necessary to verify compliance with this Section and if
AHP determines that either Horizon or its Affiliates has taken any
such actions or committed any such act of omission then, for
purposes of the payment of royalties under Section 4.2 hereof, the
Net Sales of Product made during the three months after the fifth
anniversary of the Effective Date shall be treated as if such sales
occurred prior to the fifth anniversary of the Effective Date.
15
16
9. TRADEMARKS.
9.1 Use of Trademarks. Horizon agrees to use the Trademarks only in
connection with the Products and in the manner and style which shall
have the prior written approval of AHP. Horizon shall submit to AHP
samples of all commercial materials containing any of the
Trademarks. AHP, within thirty (30) days of its receipt of such
materials, shall have the right to reasonably comment on the usage
of the Trademarks in such materials and Horizon, at its own cost and
expense, will promptly correct any improper usage of the Trademarks.
Horizon agrees not to claim or to assert any right of ownership in
or to such Trademarks or the goodwill associated therewith and shall
take no action which may destroy, damage or impair in any way the
ownership or rights of AHP in and to such Trademarks. Horizon shall
not register anywhere in the world in its own name, or on behalf of
any other person or entity, any trademark, trade dress, brands,
labeling, designs or other indicia of ownership identical to, or
confusingly similar to, the Trademarks, and shall not associate the
Trademarks with any articles other than the Products and shall, at
the request of AHP, do all such acts and things and execute all such
documents as AHP shall in its reasonable discretion consider
necessary or proper to register or maintain the registration of the
Trademarks in any country of the Territory. Should usage of the
Trademarks in any country vest title thereto in Horizon, then
Horizon shall at AHP's request, immediately assign and transfer such
title to AHP.
9.2 Quality Control. Horizon will not permit the quality of Products to
deteriorate while in its possession so as to adversely affect the
goodwill associated with the Trademarks. Horizon shall upon request
of AHP, from time to time furnish AHP, without charge,
specifications and samples of Products for quality review by AHP.
AHP or an authorized representative thereof shall have the right, at
all reasonable times, to inspect the finished goods in relation to
which the Trademarks are to be used, as part of appropriate quality
control.
9.3 Infringement of Trademarks. In the event that, either Horizon or AHP
learn that any of the Trademarks pertaining to Products is being
infringed in the Territory by any Third Party, it shall promptly
notify the other Party of such infringement. AHP shall have the
right, but not the obligation, to act to terminate any such Third
Party infringement, including, without limitation, prosecuting a
lawsuit or other legal proceeding, at AHP's own expense. In the
event that AHP takes any such action to terminate such infringement,
Horizon may, at its sole option, take appropriate steps to join AHP
in such action and share equally in the costs thereof. If and only
if Horizon joins such action as stated in the preceding sentence,
AHP and Horizon shall share equally in any recovery which may be
received as a result of such action less the reimbursement of each
Party for the out-of-pocket expenses incurred in taking, joining and
prosecuting such action. Notwithstanding the foregoing, Horizon
shall fully cooperate with AHP in any action AHP takes to terminate
such infringement and, to the
16
17
extent AHP recovers damages from such Third Party, through
settlement or otherwise, shall be reimbursed by AHP for all
reasonable expenses incurred in connection therewith. If AHP fails
to take any action within sixty (60) days after Horizon's request,
Horizon shall have the right to act as it sees fit to terminate the
infringement, including without limitation, prosecuting a lawsuit or
other legal proceeding, at Horizon's own expense. Horizon may deduct
its costs and expenses for such action from trademark royalties
accruing under Section 4.2 after the date of filing of such action.
In the event that Horizon takes any such action to terminate such
infringement, AHP may, at its sole option, take appropriate steps to
join Horizon in such action and share equally in the costs thereof.
If and only if AHP joins such action as stated in the preceding
sentence, AHP and Horizon shall share equally in any recovery which
may be received as a result of such action less the reimbursement of
each Party for the out-of-pocket expenses incurred in taking,
joining and prosecuting such action. Notwithstanding the foregoing,
AHP shall fully cooperate with Horizon in any action Horizon takes
to terminate such infringement, including without limitation,
agreeing to be joined as party plaintiff and approving any
reasonable settlement agreement achieved by Horizon, and to the
extent Horizon receives damages from such Third Party, through
settlement or otherwise, shall be reimbursed by Horizon for all
reasonable expenses incurred in connection therewith and deductions
from trademark royalties pursuant to this Section 9.3.
10. REPRESENTATIONS AND WARRANTIES.
10.1 Representations and Warranties of Each Party. As of the signing of
this Agreement, each of Horizon and AHP hereby represents, warrants
and covenants to the other Party hereto as follows:
(a) it is a corporation or entity duly organized and validly
existing under the laws of the state or other jurisdiction
of incorporation or formation;
(b) the execution, delivery and performance of this Agreement by
such Party has been duly authorized by all requisite
corporate action and do not require any shareholder action
or approval;
(c) it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder;
(d) the execution, delivery and performance by such Party of this
Agreement and its compliance with the terms and provisions
hereof does not and will not conflict with or result in a
breach of any of the terms and provisions of or constitute a
default under (i) a loan agreement, guaranty, financing
agreement, agreement affecting a product or other agreement or
instrument binding or affecting it or its property; (ii) the
provisions of its charter or operative documents or bylaws; or
(iii) any order, writ, injunction or decree of any court or
governmental authority entered against it or by which any of
its property is bound; and
17
18
(e) it shall at all times comply with all applicable material laws
and regulations relating to its activities under this
Agreement.
10.2 Representations and Warranties of AHP. As of the signing of this
Agreement, AHP hereby represents and warrants to Horizon as follows:
(a) Except as listed in Exhibit G, there are no (i) pending or, to
AHP's knowledge, threatened product liability, breach of
warranty or other claims, actions, arbitrations,
administrative or other proceedings regarding the Product or
the Trademarks, to which AHP is a party in the Territory; or
(ii) pending or, to AHP's knowledge, overtly threatened claim
against AHP asserting that any of the Know-How infringes or
violates the rights of Third Parties.
(b) AHP is the sole owner of the Trademarks, the Know-How and the
Regulatory Approvals for the Product in the Territory and AHP
has not sublicensed, pledged, encumbered, assigned,
transferred or granted any rights or interest therein to any
Third Party inconsistent with the rights granted to Horizon
under the Transaction Agreements, and prior to the Closing,
AHP will enter into no such agreement with any Affiliate or
Third Party.
(c) AHP has furnished Horizon with access to a complete copy of
the Regulatory Approvals, including all material amendments
and supplements thereto. To the best of AHP's knowledge, the
Regulatory Approvals are in good standing and nothing has come
to the attention of AHP which has, or reasonably should have,
led AHP to believe that the Regulatory Approvals are not in
good standing. To the best of AHP's knowledge, there is no
pending or overtly threatened action by the FDA which will
have a material adverse effect on the Regulatory Approvals.
(d) AHP represents and warrants that the list of Customer
Contracts provided herein is accurate and complete with
respect to current Customer Contracts and is, to the best of
AHP's knowledge, accurate and complete with respect to pending
Customer Contracts.
(e) AHP has not given any notice to any Third Parties asserting
misappropriation of trade secrets relating to the Know-How.
(f) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN
THE PRODUCT SUPPLY AGREEMENT, AHP MAKES NO OTHER
REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
PRODUCTS OR THE TRADEMARKS OR HORIZON'S USE THEREOF.
18
19
10.3 Representations and Warranties of Horizon. As of the signing of this
Agreement, Horizon represents and warrants to AHP that it has
properly determined that the net present value of the transactions
contemplated by this Agreement is less than fifteen million dollars
($15,000,000) and no HSR filing is required in connection with the
transactions contemplated hereby.
10.4 Representation by Legal Counsel. Each Party hereto represents that
it has been represented by legal counsel in connection with this
Agreement and acknowledges that it has participated in the drafting
hereof. In interpreting and applying the terms and provisions of
this Agreement, the Parties agree that no presumption shall exist or
be implied against the Party which drafted such terms and
provisions.
11. TERM AND TERMINATION.
11.1 Term. This Agreement shall be effective as of the Effective Date
and, unless terminated earlier by mutual written agreement of the
Parties or pursuant to this Article 11, shall remain in full force
and effect for so long as Horizon sells Product in the Territory
(the "Term"). Notwithstanding the foregoing, upon the payment of all
amounts due pursuant to Section 4.1 hereof the Know-How license
granted to Horizon pursuant to Section 2.1.1 hereof shall become a
fully paid-up, perpetual exclusive (exclusive except as to
veterinary pharmaceutical products and injectable human uses by AHP
and its Affiliates neither of which shall have the right to
sublicense) license.
11.2 Termination.
11.2.1 Certifications of Representation and Warranties. Either
Party may terminate this Agreement if, in accordance with
Section 3.3.5 hereof, the other Party certifies that one or
more of its representations and warranties set forth in
Article 10 hereof do not remain true and in effect as of the
day of Closing.
11.2.2 Termination for Cause Both Parties. This Agreement may be
terminated by written notice by either Party (subject to the
provisions of Section 11.2.3) at any time during the Term of
this Agreement:
(a) for material breach by the other Party, which breach remains
uncured for thirty (30) days in the case of nonpayment of
19
20
any amount due and ninety (90) days for all other breaches,
each measured from the date written notice of such breach is
given to the breaching Party, or, if such breach is not
susceptible of cure within such ninety (90) day period and the
breaching Party uses diligent good faith efforts to cure such
breach, for one hundred eighty (180) days after written notice
to the breaching Party; or
(b) upon the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an assignment
of a substantial portion of the assets for the benefit of
creditors by the other Party, or in the event a receiver or
custodian is appointed for such Party's business, or if a
substantial portion of such Party's business is subject to
attachment or similar process; provided, however, that in the
case of any involuntary bankruptcy proceeding such right to
terminate shall only become effective if the proceeding is not
dismissed within ninety (90) days after the filing thereof.
11.2.3 Effect of Termination for Cause on License.
(a) In the event that Horizon breaches this Agreement pursuant to
Section 11.2.2 then it shall be AHP's sole option:
(i) to terminate this Agreement, in which case all rights to
the Know-How, the Regulatory Approvals and the
Trademarks shall revert to AHP (unless all payments
under Section 4.1 have been fully paid to AHP) and
Horizon shall remain obligated to make all payments
under Sections 4.1 and 4.2 which have accrued as of the
date of termination; or
(ii) to accelerate the payments required under Section 4.1 so
that they shall become immediately due and payable, in
which case this Agreement shall remain in full force and
effect, and Horizon shall remain obligated to make all
payments required under Sections 4.1 and 4.2; or
(iii) to pursue all legal and equitable remedies available to
it, in which case the Agreement shall remain in full
force and effect and Horizon shall remain obligated to
make all payments required under Sections 4.1 and 4.2.
(b) In the event that AHP breaches this Agreement pursuant to
Section 11.2.2 then it shall be Horizon's sole option:
20
21
(i) to terminate this Agreement, in which case all rights to
the Know-How and the Regulatory Approvals shall be
vested in Horizon (if all payments under Section 4.1
have been fully paid to AHP) and the license under the
Trademarks shall be deemed to be fully paid-up and
Horizon shall remain obligated to make only those
payments under Section 4.2 which have accrued as of the
date of termination; or
(ii) to pursue all legal and equitable remedies available to
it, in which case the Agreement shall remain in full
force and effect and Horizon shall remain obligated to
make all payments required under Sections 4.1 and 4.2.
11.3 Survival. The provisions of Articles 1, 2, 6, 12 and 13 and
Sections 4.4, 4.5, 11.2.3, 14.2.3, 14.6, 14.7, 14.8, 14.9, and
14.10 shall survive expiration or any earlier termination of
this Agreement. Any payments that become due and payable prior
to expiration, which have not been paid, shall survive
expiration or any earlier termination of this Agreement.
12. INDEMNIFICATION.
12.1 Notice and Assistance. Each Party shall promptly notify the other,
in writing, if it learns of any litigation, claim, administrative or
criminal proceedings (collectively "Actions"), related to the
Product, the Substance, the Trademark, or any Regulatory Approval,
asserted or threatened against such Party (the "Defending Party").
With respect to any Actions relating to the Product, the Substance,
the Trademark or any Regulatory Approval asserted against a
Defending Party, the other Party shall, at no out-of-pocket expense
to it except as otherwise provided in this Article 12, reasonably
cooperate with and provide such reasonable assistance to such
Defending Party as such Defending Party may reasonably request in
connection with its defense against such Actions. Such reasonable
assistance may include, without limitation, providing copies of all
relevant correspondence and other materials that the Defending Party
may reasonably request, provided, however, that any Confidential
Information so provided shall be treated in accordance with the
provisions of Article 13 hereof.
12.2 Indemnification by AHP. AHP shall indemnify, defend and hold
harmless Horizon, its Affiliates or its permitted sublicensees, and
each of its and their respective employees, officers, directors and
agents (each, a "Horizon Indemnified Party") from and against any
and all liability, loss, damage, cost, and expense (including
reasonable attorneys' fees) (collectively, a "Liability") which the
Horizon Indemnified Party may incur, suffer or be required to pay
resulting from or arising in connection with (i) the breach by AHP
of any representation or warranty contained in this Agreement, (ii)
the manufacture, promotion,
21
22
distribution, testing, use, marketing, sale or other disposition of
the Substance or Products by AHP outside of the Territory and Field,
whether before or after the Effective Date; (iii) the manufacture,
promotion, distribution, testing, use, marketing, sale or other
disposition of the Substance or Products by AHP within the Territory
and Field before the Effective Date; or (iv) the use of the
Trademarks by AHP or its Affiliates within or outside the Territory,
whether before or after the Effective Date. Notwithstanding the
foregoing, AHP shall have no obligation under this Agreement to
indemnify, defend or hold harmless any Horizon Indemnified Party
with respect to claims, demands, costs or judgments which result
from willful misconduct or negligent acts or omissions of Horizon,
its Affiliates, its permitted sublicensees, or any of their
respective employees, officers, directors or agents.
12.3 Indemnification by Horizon. Horizon shall indemnify, defend and hold
harmless AHP and its Affiliates, and each of its and their
respective employees, officers, directors and agents (each, an "AHP
Indemnified Party") from and against any Liability which the AHP
Indemnified Party may incur, suffer or be required to pay resulting
from or arising in connection with (i) the breach by Horizon of any
representation or warranty contained in this Agreement; (ii) the
manufacture (but only upon the commencement of Horizon's
manufacturing the Products pursuant to the Product Supply
Agreement), promotion, distribution, testing, use, marketing, sale
or other disposition of Products by Horizon, its Affiliates, its
permitted sublicensees or their respective subcontractors; or (iii)
the use of the Trademark by Horizon, its Affiliates, its permitted
sublicensees or their respective subcontractors. Notwithstanding the
foregoing, Horizon shall have no obligation under this Agreement to
indemnify, defend, or hold harmless any AHP Indemnified Party with
respect to claims, demands, costs or judgments which result from
willful misconduct or negligent acts or omissions of AHP, its
Affiliates, its permitted sublicensees or any of their respective
employees, officers, directors or agents.
12.4 Conditions to Indemnification. The obligations of the indemnifying
Party under Sections 12.2 and 12.3 are conditioned upon the delivery
of written notice to the indemnifying Party of any potential
Liability promptly after the indemnified Party becomes aware of such
potential Liability. The indemnifying Party shall have the right to
assume the defense of any suit or claim related to the Liability if
it has assumed responsibility for the suit or claim in writing;
however, if in the reasonable judgment of the indemnified Party,
such suit or claim involves an issue or matter which could have a
materially adverse effect on the business operations or assets of
the indemnified Party, the indemnified Party may waive its rights to
indemnity under this Agreement and control the defense or settlement
thereof, but in no event shall any such waiver be construed as a
waiver of any indemnification rights such Party may have at law or
in equity. If the indemnifying Party defends the suit or claim, the
indemnified Party may participate in (but not control) the defense
thereof at its sole cost and expense.
22
23
[***] - CONFIDENTIAL TREATMENT REQUESTED
12.5 Settlements. Neither Party may settle a claim or action related to a
Liability without the consent of the other Party, if such settlement
would impose any monetary obligation on the other Party or require
the other Party to submit to an injunction or otherwise limit the
other Party's rights under this Agreement or otherwise. Except as
otherwise expressly set forth in this Article 12, any payment made
by a Party to settle any such claim or action shall be at its own
cost and expense.
12.6 Limitation of Liability. With respect to any claim by one Party
against the other arising out of the performance or failure of
performance of the other Party under this Agreement, the Parties
expressly agree that the liability of such Party to the other Party
for such breach shall be limited under this Agreement or otherwise
at law or equity to direct damages only and in no event shall a
Party be liable for punitive, exemplary or consequential damages.
The limitations set forth in this Section 12.6 shall not apply with
respect to the obligations of either Party to indemnify the other
under Sections 12.2 or 12.3 hereof in connection with a Liability to
a Third Party.
12.7 Insurance. Horizon shall obtain and maintain at all times during the
term of this Agreement, Commercial General Liability Insurance,
including Products Liability Insurance, with reputable and
financially secure insurance carriers to cover its indemnification
obligations under Section 12.3, with limits of not less than [***]
dollars ($[***]) per occurrence and [***] dollars ($[***]) in the
aggregate. Horizon shall provide AHP with a Certificate of Insurance
evidencing this coverage within thirty (30) days after the Closing.
Such insurance policy shall name AHP as an additional insured and
Horizon shall use its Commercially Reasonable Efforts to ensure that
such insurance policy contains a provision requiring ten (10) day
advance notification to AHP in the event of its cancellation or
termination. AHP shall maintain self-insurance and/or obtain
insurance from a Third Party insurer in amounts sufficient to cover
its obligations under Section 12.2. Upon Horizon's written request,
AHP shall provide Horizon with evidence of such insurance coverage.
13. CONFIDENTIALITY.
13.1 Nondisclosure Obligation. Each of Horizon and AHP shall use only in
accordance with this Agreement and shall not disclose to any Third
Party any information including, without limitation, Know-How,
received by it from the other Party (the "Information"), without the
prior written consent of the other Party. The foregoing obligations
shall survive the expiration or earlier termination of the last of
the Transaction Agreements to so expire or to be so terminated for a
period of five (5) years. These obligations shall not apply to
Information that:
23
24
(i) is known by the receiving Party at the time of its receipt,
and not through a prior disclosure by the disclosing Party, as
documented by business records;
(ii) is at the time of disclosure or thereafter becomes published
or otherwise part of the public domain without breach of this
Agreement by the receiving Party;
(iii) is subsequently disclosed to the receiving Party by a Third
Party who has the right to make such disclosure;
(iv) is developed by the receiving Party independently of the
Information received from the disclosing Party and such
independent development can be documented by the receiving
Party, or
(v) is required by law, regulation, rule, act or order of any
governmental authority or agency to be disclosed by a Party,
provided that notice is promptly delivered to the other Party
in order to provide an opportunity to seek a protective order
or other similar order with respect to such Information and
thereafter the disclosing Party discloses to the requesting
entity only the minimum Information required to be disclosed
in order to comply with the request, whether or not a
protective order or other similar order is obtained by the
other Party.
13.2 Permitted Disclosures. Information may be disclosed to employees,
agents, consultants, sublicensees or suppliers of the recipient
Party or its Affiliates, but only to the extent required to
accomplish the purposes of this Agreement and only if the recipient
Party obtains prior agreement from its employees, agents,
consultants, sublicensees, suppliers or Third Party manufacturers to
whom disclosure is to be made to hold in confidence and not make use
of such Information for any purpose other than those permitted by
this Agreement. Each Party will use at least the same standard of
care as it uses to protect proprietary or confidential information
of its own to ensure that such employees, agents, consultants,
sublicensees, suppliers or Third Party manufacturers do not disclose
or make any unauthorized use of the Information.
13.3 Disclosure of Agreement. Neither Horizon nor AHP shall release to
any Third Party or publish in any way any non-public information
with respect to the terms of this Agreement or concerning their
cooperation without the prior written consent of the other, which
consent will not be unreasonably withheld or delayed, provided,
however, that either
24
25
Party may disclose the terms of this Agreement to the extent
required to comply with applicable laws, including, without
limitation the rules and regulations promulgated by the United
States Securities and Exchange Commission, provided, however, that
prior to making any such disclosure, the Party intending to so
disclose the terms of this Agreement shall (i) provide the
nondisclosing Party with written notice of the proposed disclosure
and a opportunity to review and comment on the intended disclosure
which is reasonable under the circumstances and (ii) shall seek
confidential treatment for as much of the disclosure as is
reasonable under the circumstances, including, without limitation,
seeking confidential treatment of any information as may be
requested by the other Party. Notwithstanding any other provision of
this Agreement, each Party may disclose the terms of this Agreement
to lenders, investment bankers and other financial institutions of
its choice solely for purposes of financing the business operations
of such Party either (i) upon the written consent of the other Party
or (ii) if the disclosing Party uses reasonable efforts to obtain a
signed confidentiality agreement with such financial institution
with respect to such information on terms substantially similar to
those contained in this Article 13.
13.4 Publicity. Subject to Section 13.3, all publicity, press releases
and other announcements relating to this Agreement or the
transactions contemplated hereby shall be reviewed in advance by,
and shall be subject to the approval of, both Parties.
14. MISCELLANEOUS.
14.1 Force Majeure. Neither Party shall be liable to the other for delay
or failure in the performance of the obligations on its part
contained in this Agreement if and to the extent that such failure
or delay is due to circumstances beyond its control (including,
without limitation, AHP's inability to obtain, from a Third Party,
sufficient quantities of the raw materials needed for the
manufacture of Substance to meet its manufacturing obligations under
Article 7) which it could not have avoided by the exercise of
reasonable diligence. It shall notify the other Party promptly
should such circumstances arise, giving an indication of the likely
extent and duration thereof and shall use all Commercially
Reasonable Efforts to resume performance of its obligations as soon
as practicable.
14.2 Assignment.
14.2.1 Assignment by Horizon. Horizon may assign any or all of its
rights or obligations under this Agreement in the Territory to
any of its Affiliates, for so long as they remain Affiliates.
In addition, Horizon may assign any or all of its rights or
obligations under this Agreement in the Territory in
conjunction
25
26
with a merger or acquisition of Horizon or its Affiliates.
Horizon may not otherwise assign any of its rights or
obligations under this Agreement without AHP's prior written
consent, not to be unreasonably withheld. AHP shall respond to
such requests by Horizon for assignment within thirty (30)
days from such request. Any permitted assignment shall not
relieve Horizon of its responsibilities for performance of its
obligations under this Agreement. Notwithstanding the
foregoing, Horizon may not assign or otherwise transfer the
Regulatory Approvals to any Third Party until the later to
occur of (i) all payments are made under Article 4.1, and (ii)
termination of the Product Supply Agreement.
14.2.2 Assignment by AHP. AHP may assign any or all of its rights or
obligations under this Agreement to any of its Affiliates or
to any Third Party, provided, however, that AHP may assign all
or part of its obligations to a Third Party only after
receiving Horizon's prior written consent, which consent shall
not be unreasonably withheld or delayed; provided, further,
that such assignment shall not relieve AHP of its
responsibilities for performance of its obligations under this
Agreement. Notwithstanding the foregoing, Horizon's consent
shall not be required for any assignment made by AHP in
connection with a merger or similar reorganization of AHP or
its parent company or the sale of all or substantially all of
AHP's or AHP's parent company's pharmaceutical assets.
14.2.3 Binding Nature of Assignment. This Agreement shall be binding
upon and inure to the benefit of the successors and permitted
assigns of the Parties. Any assignment not in accordance with
this Article 14 shall be void.
14.3 No Waiver. The failure of either Party to require performance by the
other Party of any of that other Party's obligations hereunder shall
in no manner affect the right of such Party to enforce the same at a
later time. No waiver by any Party hereto of any condition, or of
the breach of any provision, term, representation or warranty
contained in this Agreement whether by conduct or otherwise, in any
one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach, or of
any other condition or of the breach of any other provision, term,
representation or warranty hereof.
14.4 Severability. If a court or other tribunal of competent jurisdiction
should hold any term or provision of this Agreement to be excessive,
or invalid, void or unenforceable, the offending term or provision
shall be deleted or revised to the extent necessary to be
enforceable, and, if possible, replaced by a term or provision
which, so far as practicable achieves the legitimate aims of the
Parties.
14.5 Relationship between the Parties. Both Parties are independent
contractors under this Agreement. Nothing herein contained shall be
deemed to create an employment, agency, joint venture or partnership
relationship between the Parties hereto or any of their agents or
26
27
employees, or any other legal arrangement that would impose
liability upon one Party for the act or failure to act of the other
Party. Neither Party shall have any express or implied power to
enter into any contracts or commitments or to incur any liabilities
in the name of, or on behalf of, the other Party, or to bind the
other Party in any respect whatsoever.
14.6 Correspondence and Notices.
14.6.1 Ordinary Notices. Correspondence, reports, documentation, and
any other communication in writing between the Parties in the
course of ordinary implementation of this Agreement shall be
delivered by hand, sent by facsimile, overnight courier or by
airmail to the employee or representative of the other Party who
is designated by such other Party to receive such written
communication.
14.6.2 Extraordinary Notices. Extraordinary notices and communications
(including, without limitation, notices of termination, force
majeure, material breach, change of address) shall be in writing
and sent by prepaid registered or certified air mail, or by
facsimile confirmed by prepaid registered or certified air mail
letter, and shall be deemed to have been properly served to the
addressee upon receipt of such written communication.
14.6.3 Addresses. In the case of Horizon, the proper address for
communications and for all payments shall be:
Horizon Pharmaceutical Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxx Xxxxx
Fax: (000) 000-0000
and it the case of AHP, the proper address for communications and
for all payments shall be:
Wyeth-Ayerst Laboratories
000 Xxxxxxxxx Xxxxxx
Xx. Xxxxxx, Xxxxxxxxxxxx 00000
Attn: Senior Vice President,
Global Business Development
Fax: (000) 000-0000
with a copy to:
American Home Products Corporation
0 Xxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attn: Senior Vice President
and General Counsel
Fax: (000) 000-0000
27
28
14.7 Choice of Law. This Agreement is subject to and governed by the laws
of the State of Delaware, excluding its conflict of laws provisions.
14.8 Entire Agreement Amendment. This Agreement, together with the other
Transaction Agreements and the Confidential Disclosure Agreement
between AHP and X.X. Financial Enterprises Inc. (an equity holder in
Horizon) dated April 28, 1998, and all the covenants, promises,
agreements, warranties, representations, conditions and
understandings contained herein and therein sets forth the complete,
full and exclusive agreement between the Parties and supersedes and
terminates all prior and contemporaneous agreements and
understandings between the Parties, whether oral or in writing.
There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or
written, between the Parties other than as are set forth in the
Transaction Agreements. No subsequent alteration, amendment, change,
waiver or addition to this Agreement shall be binding upon the
Parties unless reduced to writing and signed by an authorized
officer of each Party. No understanding, agreement, representation
or promise, not explicitly set forth herein, has been relied on by
either Party in deciding to execute this Agreement.
14.9 Headings. The headings and captions used in this Agreement are
solely for the convenience of reference and shall not affect its
interpretation.
14.10 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be an original and all of which
shall constitute together the same document.
14.11 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all other acts, as may
be necessary or appropriate in order to carry out the purposes and
intent of this Agreement including, without limitation, any filings
with any antitrust agency which may be required.
IN WITNESS WHEREOF, this Agreement has been executed by the duly authorized
representatives of the Parties as of the date set forth below.
AMERICAN HOME PRODUCTS HORIZON PHARMACEUTICALS, INC.
CORPORATION
------------------------------- --------------------------------
Name: Name:
Title: Title:
28
29
EXHIBIT A
CUSTOMER CONTRACTS
------------------
The Customer Contracts are listed on the following two pages.
29
30
[***] - CONFIDENTIAL TREATMENT REQUESTED
WYETH-AYERST LABORATORIES
BID ANALYSIS SYSTEM
CONTRACT PRODUCT PRICES BY NDC - ACTIVE
--------------------------------------------------------------------------------------- -------------------------------------------
NDC: 00000-0000-00 ROBINUL FORTE TABLETS PKG SIZE: [***]
--------------------------------------------------------------------------------------- -------------------------------------------
CTLG PRICE: [***] FACTOR COST: [***] FSS PRICE: [***]
--------------------------------------------- --------------------------------------------------------------- --------------------
CURRENT BEST: [***] CURRENT NOMINALS: [***] FUTURE BEST: [***] FUTURE NOMINAL: [***]
---------------------------------------------------------------------------------------------------------------------- ------------
GRP/CUST GRP/CUSTOMER NAME CITY STATE CLS CONTRACT START DATE END DATE SALES PRICE DISC %
------------------------------------------------------------- ----------------- ------------ ------------ ----------- ----- -----
01 - NON GUARANTEED TYPE
------------------------------------------------------------- ------------ -------------- ------------ ------------ -------- -----
000000489 PUERTO RICO HOSP GROUP SAN XXXX PR 0000046178 11/01/1997 11/30/1998 [***] [***]
---------------- ----------------------------- ------------- ------------ -------------- ------------ ------------ -------- ------
791000010 XXXXXXXX XXX XXXXXXX XXXX XXX XX 00 0000046045 11/01/1997 11/30/1998 [***] [***]
------------------------------------------------------------------- -------- -------------- ------------ ------------ -------- ---
02 - GUARANTEED
------------------------------------------------------------------- ------------ ---------- ------------ ------------ -------- ---
000000340 VETERANS STATE HOME HINES IL 0000046309 11/01/1998 11/30/1998 [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000000355 PHS FEDERAL GOVT ACCTS WASHINGTON DC 0000046308 11/01/1998 11/30/1998 [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000000406 MILITARY RADNOR PA 0000000000 11/01/1998 11/30/1998 [***] [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000000310 VA PRIME VENDOR RADNOR PA 0000046196 11/01/1998 11/30/1998 [***] [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000002003 STATE OF ARKANSAS LITTLE ROCK AR 0000043007 01/01/1998 12/31/1998 [***] [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000000027 MINNESOTA MULTI-STATE ST. XXXX. MN 0000046643 05/01/1998 04/30/1999 [***] [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
0000009585 NEW PUERTO RICO HOSP ST. DAVIDS PA 0000047764 04/30/1998 04/27/1999 [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000000253 XXXXX HEALTCARE DALLAS TX 0000022284 09/01/1998 08/31/1999 [***] [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000000309 HEALTH SERVS CORP AMER BRIDGETON MO 0000024878 10/01/1998 09/30/1999 [***] [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
04 - GUARANTEED W/OUT - CLAUSE
---------------- ----------------------------- -------------- ------------ -------------- ------------ ------------ -------- -----
0000009341 MICH STATE UNIV AFFIL EAST LANSING MI 0000046646 02/01/1998 01/31/9999 [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
05 - GUAR W/PRC ESC & OUT CLS
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000000407 XXXX HEALTHCARE HOUSTON TX 0000031263 07/01/1998 03/31/2000 [***] [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
000000418 PACT (G/MEDMGMNT) PLYMOUTH MN 0000046216 07/01/1998 03/31/2000 [***] [***]
--------- ------------------------ ------------------------- ------------ ---------- ------------- ------- ------ ------
30
31
[***] - CONFIDENTIAL TREATMENT REQUESTED
WYETH-AYERST LABORATORIES
BID ANALYSIS SYSTEM
CONTRACT PRODUCT PRICES BY NDC - ACTIVE
--------------------------------------------------------------------------------------- ------------------------------------------
NDC: 00000-0000-00 ROBINUL TABLETS PKG SIZE: [***]
--------------------------------------------------------------------------------------- ------------------------------------------
CTLG PRICE: [***] FACTOR COST: [***] FSS PRICE: [***]
--------------------------------------------- ----------------------------------------- ---------------------------------- -------
CURRENT BEST: [***] CURRENT NOMINALS: [***] FUTURE BEST: [***] FUTURE NOMINAL: [***]
--------------------------------------------- ----------------------------------------- ---------------------------------- -------
---------------- --------------------------------- ------------------ ---------- ------- --------------- ------------ ------------
GRP/CUST GRP/CUSTOMER NAME CITY STATE CLS CONTRACT START DATE END DATE SALES PRICE DISC %
----------------------------------------------------------------------------------------------------------------------------------
01 - NON-GUARANTEED TYPE
----------------- --------------- ------------ ------------ ----------
000000489 PUERTO RICO HOSP GROUP .. SAN XXXX PR 0000046178 11/01/1997 11/30/1998 [***] [***]
---------- ------------------------ ------------ ----------------- --------------- ------------ ------------ ----------
791000010 HOSPITAL DEL MAESTRO .... HATO REY PR 14 0000046045 11/01/1997 11/30/1998 [***] [***]
---------- ------------------------ ------------ ----------------- --------------- ------------ ------------ ---------
02 - GUARANTEED
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
000000344 PHS BETHESDA MD 0000058826 10/01/1998 12/31/1998 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
000000340 VETERANS STATE HOME HINES IL 0000046309 01/01/1998 11/30/1998 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
000000355 PYS FEDERAL GOVT ACCTS WASHINGTON DC 0000046308 01/01/1998 11/30/1998 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
000000406 MILITARY RADNOR PA 0000000000 01/01/1998 11/30/1998 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
000000310 VA PRIME VENDOR RADNOR PA 0000046196 01/01/1998 11/30/1998 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
000000164 ISD (INTERNAL SVCS DEPT) LOS ANGELES CA 0000000000 02/01/1998 01/31/1999 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
000000195 XXX XXXX XXXX XXXX & XXX XXX XXXX XX 0000037145 09/15/1997 09/30/2000 [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000002003 STATE OF ARKANSAS LITTLE ROCK AR 0000043007 01/01/1998 12/31/1998 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000000027 MINNESOTA MULTI-STATE ST. XXXX MN 0000046643 05/01/1998 04/30/1999 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000002046 STATE OF SOUTH CAROLINA COLUMBIA SC 0000046472 05/01/1998 04/30/1999 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000009585 NEW PUERTO RICO HOSP ST. DAVIDS PA 0000047764 04/30/1998 04/27/1999 [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000000000 XXXXX HEALTHCARE DALLAS TX 0000022284 09/01/1998 08/31/1999 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000000309 HEALTH SERVS CORP AMER BRIDGETON MO 0000024878 10/01/1998 09/30/1999 [***] [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000002004 STATE OF CALIFORNIA SACRAMENTO CA 0000000000 10/05/1998 09/30/2000 [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000002048 STATE OF TENNESSEE NASHVILLE TN 0000060276 10/22/1998 07/31/1999 [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
04 - GUARANTEED W/OUT-CLAUSE
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
0000009341 MICH STATE UNIV AFFIL E.LANSING MI 0000046646 02/01/98 01/31/99 [***] [***]
---------- ------------------------ ------------ --------------- ------------ ------------ ------ ------ ------
31
32
[***] - CONFIDENTIAL TREATMENT REQUESTED
05 - GUAR W/PRC ESC & OUT CLS
---------- ------------------------ --------------- ------------- ------------ ----------- ------- ------ -------
GRP/CUST GRP/CUSTOMER NAME CITY STATE CLS CONTRACT START DATE END DATE SALES PRICE DISC %
-----------------------------------------------------------------------------------------------------------------------------
000000407 XXXX HEALTHCARE HOUSTON TX 0000031263 07/01/1998 03/31/2000 [***] [***] [***]
--------- -------------------------- ------------- --------------- ------------- ------------ ------- ------- ------
000000418 PACT (C/MEDMGNT) PLYMOUTH MN 0000046216 07/01/1998 03/31/2000 [***] [***] [***]
--------- -------------------------- ------------- --------------- ------------- ------------ ------- ------- ------
32
33
EXHIBIT B
---------
PRODUCTS
Country NDC No. Strength Dosage Form Package Size
------- ------- -------- ----------- ------------
USA 7824-63 1 mg tablets bottles of 100
USA 7840-63 2 mg tablets bottles of 100
33
34
EXHIBIT C
---------
TRADEMARKS
Country Trademark Registration No. Renewal Date
------- --------- ---------------- ------------
United States Robinul 728,458 03/13/2002
34
35
EXHIBIT D
---------
SYSTEMS TRANSFER PLAN
Pursuant to Section 3.2 of that certain License Agreement entered into by
and between Horizon Pharmaceutical Corporation ("Horizon") and American Home
Products Corporation, acting through its Wyeth-Ayerst Laboratories Division
("AHP") on January 29, 1999 (the "License Agreement"), Horizon and AHP, by
signing below, each agree that the documents identified below and attached
hereto constitute the Systems Transfer Plan. Horizon and AHP each further agree
that to the extent any of the attached documents are inconsistent with the
License Agreement or the Product Supply Agreement which also was entered into by
Horizon and AHP on January 29, 1999, the terms and conditions of the License
Agreement or the Product Supply Agreement, as applicable, shall control. The
Parties recognize that this document serves as a guideline for the transition of
responsibilities for the Product from AHP to Horizon and that, to the extent
that this Systems Transfer Plan imposes timelines which are not expressly stated
within the License Agreement or the Product Supply Agreement, the failure to
strictly adhere to any such timelines set forth in this Systems Transfer Plan
shall not constitute a breach of either the License Agreement or the Product
Supply Agreement
Attachments
1. Initial inventory shipment; Outstanding sales orders;
Initial forecast; On-going purchase orders
2. Product/Quality Complaints
3. Labeling, Product Inserts, Tooling
4. Customer Contracts
5. Rebates
6. Manufacturing Plant Services
7. Regulatory
8. Returns
9. Chargebacks
HORIZON PHARMACUETICAL AMERICAN HOME PRODUCTS
CORPORATION CORPORATION acting through its
Wyeth-Ayerst Laboratories Division
By:_______________________________ By:__________________________________
Name:_____________________________ Name:________________________________
Title:____________________________ Title:_______________________________
Date:_____________________________ Date:________________________________
35
36
EXHIBIT E
ADVERSE DRUG EVENT REPORTING PROCEDURE
The Parties hereby agree that the following terms will govern disclosures
of each Party to the other with respect to adverse event reporting relating to
the Product or Substance as clinically tested or marketed by or on behalf of
either Party.
1. Definitions.
1.1 An Adverse Drug Experience ("ADE") is defined as:
a) any experience which is adverse, including what are commonly
described as adverse or undesirable experiences, adverse events,
adverse reactions, side effects, or death due to any cause
associated with, or observed in conjunction with the use of a
drug, biological product, or device in humans, whether or not
considered related to the use of that product:
- occurring in the course of the use of a drug, biological
product or device,
- associated with, or observed in conjunction with product
overdose, whether accidental or intentional
- associated with, or observed in conjunction with product
abuse, and/or
- associated with, or observed in conjunction with product
withdrawal.
b) Any significant failure of expected pharmacological or biologic
therapeutical action (with the exception of in clinical trials).
1.2 Serious or Non-Serious is defined as:
a) A Serious ADE is any adverse drug experience occurring at any dose
that results in any of the following outcomes: death, a
life-threatening adverse drug experience, inpatient hospitalization
or prolongation of existing hospitalization, a persistent or
significant disability/incapacity, or a congenital anomaly/birth
defect. Other important medical events that may not result in death,
be life-threatening, or require hospitalization may be considered a
serious adverse drug experience when, based upon appropriate medical
judgment, they may jeopardize the patient or subject and may require
medical or surgical intervention to prevent one of the outcomes
listed in this definition. Examples of such medical events include
allergic bronchospasm requiring intensive treatment in an emergency
room or at home, blood dyscrasias or convulsions that do not result
in inpatient hospitalization, or the development of drug dependency
or drug abuse.
36
37
b) A Non-Serious ADE is any ADE which does not meet the criteria for
a serious ADE.
1.3 Life-threatening adverse drug experience is defined as any adverse
drug experience that places the patient, in the view of the initial
reporter, at immediate risk of death from the adverse drug experience
as it occurred, i.e., it does not include an adverse drug experience
that, had it occurred in a more severe form, might have caused death.
1.4 Disability is defined as a substantial disruption of a person's
ability to conduct normal life functions.
1.5 An Unexpected ADE is defined as any ADE that is not listed in the
current labeling for the drug product. This includes events that may
be symptomatically and pathophysiologically related to an event listed
in the labeling, but differ from the event because of greater severity
or specificity.
1.6 Associated with or related to the use of the drug is defined as: A
reasonable possibility exists that the ADE was caused by the drug.
1.7 NDA Holder is defined as: An "Applicant" as defined in 21 CFR Part
314.3(b), for regulatory approval of a Product in any regulatory
jurisdiction, including a holder of a foreign equivalent thereto.
1.8 IND Holder is defined as: A "Sponsor" as defined in 21 CFR Part 313.1
(b) of an investigational new drug in any regulatory jurisdiction,
including a holder of a foreign equivalent thereto.
1.9 Capitalized terms not defined in this Exhibit shall have the meaning
assigned thereto in the Agreement.
2. With respect to the Product or Substance, the Parties agree as follows:
a. All initial reports and any follow-up information (oral or written)
for any and all Serious ADEs as defined above (other than with respect
to animal studies) which become known to either Party (other than from
disclosure by or on behalf of the other Party) must be communicated by
telephone, telefax or electronically directly to the other Party
and/or the NDA Holder, IND Holder (individually and collectively
referred to as "Holders") within forty-eight (48) hours of receipt of
the information. Written confirmation of the Serious ADE received by
such Party should be sent to the other Party and/or the Holders as
soon as it becomes available, but in any event within forty-eight (48)
hours of initial report of the Serious ADE by such Party.
37
38
b. Both Parties shall exchange Medwatch and/or CIOMs forms and other
health authority reports within forty-eight (48) hours of
submission to any Regulatory Authority.
c. All initial reports and follow-up information received for all
Non-Serious ADEs for marketed Product which become known to a
Party (other than from disclosure by or on behalf of the other
Party) must be communicated in writing, by telefax or
electronically to the other Party within ten (10) days, on
Medwatch or CIOMs forms (where possible).
d. Each Party shall coordinate and cooperate with the other whenever
practicable to prepare a single written report regarding all
Serious and/or Non-Serious ADEs, provided, however, that neither
Party shall be obligated to delay reporting of any ADE in
violation of applicable law or regulations regarding the
reporting of ADEs.
3. The Parties further agree that:
a. A written report be forwarded to the other Party within
forty-eight (48) hours of receipt by the Party making the report,
for ADEs for animal studies which suggest a potential significant
risk for humans;
b. Each Party will give the other Party a report via a print-out or
computer disk of all ADEs reported to it and its Affiliates
relating to the Product or Substance within the last year, within
thirty (30) days of receipt of a request from the other Party but
not more often than four (4) times a year;
c. If either Party wishes access to ADE Reports of the other Party
relating to the Product or Substance, upon request of that Party,
the other Party shall make available its ADE records relating to
the Product or Substance (including computer disks) for viewing
and copying by the other Party. The Parties may discuss the
transfer of ADE Reports by computer disk.
d. Disclosure of information hereunder by a Party to the other Party
shall continue as long as either Party and/or its Affiliates or
designees continue to clinically test or market Product or
Substance.
4. Each Party shall diligently undertake the following further obligations
where both Parties are or will be commercializing the Product or Substance
pursuant to the Agreement and/or performing clinical trials with respect to
the Product or Substance:
38
39
a. Upon the Effective Date, each Party shall identify individuals
who shall be responsible for identifying all ADE reporting
requirements in all countries of the Territory as set forth in
the Agreement, and any amendments thereto;
b. To immediately consult with the other Party, with respect to the
investigation and handling of any Serious ADE disclosed to it by
the other Party or by a third Party and to allow the other Party
to review the Serious ADE and to participate in the follow-up
investigation;
c. To immediately advise the other Party of any Product and/or
Substance safety communication received from a health authority
and consult with the other Party with respect to any Product
and/or Substance warning, labeling change or change to an
investigators' brochure involving safety issues proposed by the
other Party, including, but not limited to the safety issues
agreed to by the Parties;
d. To diligently handle in a timely manner the follow-up
investigation and resolution of each ADE reported to it;
e. To provide the other Party mutually agreed upon audit rights of
its ADE reporting system and documentation, upon prior notice,
during normal business hours, at the expense of the auditing
Party and under the confidentiality obligations set forth in the
Agreement;
f. To meet in a timely fashion from time to time as may be
reasonably required to implement the adverse event reporting and
consultation procedures described in this Exhibit E, including
identification of those individuals in each Party's Drug Safety
group who will be responsible for reporting to and receiving ADE
information from the other Party, and the development of a
written standard operating procedure with respect to adverse
event reporting responsibilities, including reporting
responsibilities to investigators;
g. Where possible, to transmit all data electronically;
h. To report to each other any addenda, revisions or changes to the
Agreement (e.g., change in territories, local regulations,
addition of new licensors/licensees to the Agreement, etc.) which
might alter the adverse event reporting responsibilities
hereunder;
i. To utilize English as the language of communication and data
exchange between the Parties;
j. To develop a system of exchange of documents and information in
the event that the Agreement involves more than two Parties;
k. To work together to develop an electronic system to transmit ADE
data.
39
40
5. The Parties may meet after the Effective Date of the Agreement to establish
a separate agreement for adverse event exchange which will supersede this
Exhibit E.
