CO-PROMOTION AGREEMENT
BETWEEN
ORTHOLOGIC
AND
SANOFI PHARMACEUTICALS, INC.
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 - Definitions and Interpretation ................................ 1
ARTICLE II - Committee .................................................... 8
ARTICLE III - Term and Termination ........................................ 9
ARTICLE IV - Disclaimer of Warranties Limitation of Liability ............. 11
ARTICLE V - Co-promotional Activities ..................................... 12
ARTICLE VI - Compensation / Obligations ................................... 16
ARTICLE VII - Reports and Records ......................................... 18
ARTICLE VIII - Trademark and Corporate Name ............................... 19
ARTICLE IX - Food and Drug Administration Compliance and Discontinuance
of Product ................................................................ 20
ARTICLE X - Indemnification ............................................... 21
ARTICLE XI - Insurance .................................................... 23
ARTICLE XII - Confidential Information .................................... 23
ARTICLE XIII - Relationship of the Parties ................................ 25
ARTICLE XIV - Termination for Breach or Default ........................... 25
ARTICLE XV - Property of the Parties ...................................... 26
ARTICLE XVI - Injunctive Relief ........................................... 26
ARTICLE XVII - General Representations and Warranties ..................... 26
ARTICLE XVIII - Force Majeure ............................................. 28
ARTICLE XIX - Successors and Assignment ................................... 29
ARTICLE XX - Entire Agreement - Modifications ............................. 29
ARTICLE XXI - Compliance with Law ......................................... 29
ARTICLE XXII - Severability ............................................... 30
ARTICLE XXIII - Dispute Resolution and Governing Law ...................... 30
ARTICLE XXIV - Waiver ..................................................... 31
ARTICLE XXV - Survivability ............................................... 31
ARTICLE XXVI - Notices .................................................... 32
ARTICLE XXVII - Heading ................................................... 33
ARTICLE XXVIII- Language .................................................. 33
PAGE
----
ARTICLE XXIX - Exhibits and Schedules ..................................... 33
ARTICLE XXX - No Third Party Rights ....................................... 33
ARTICLE XXXI - Counterparts ............................................... 33
ARTICLE XXXII - Currency .................................................. 34
CO-PROMOTION AGREEMENT
This exclusive co-promotion agreement (this "Agreement"), is made and entered
into as of the 23rd day of June, 1997 (the "Effective Date") between SANOFI
PHARMACEUTICALS, INC., a Delaware corporation, with its principal place of
business located at 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 ("Sanofi") and
ORTHOLOGIC CORP., a Delaware corporation, with its principal place of business
located at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000 ("OrthoLogic").
WITNESSETH:
-----------
WHEREAS, Sanofi owns certain rights in and to the Product as per the License
Agreement;
WHEREAS, OrthoLogic has expertise in promoting device products; and
WHEREAS, Sanofi and OrthoLogic desire to enter into this Agreement with respect
to OrthoLogic's promotion of the Product to the Target Audience.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Sanofi and OrthoLogic hereby agree as follows:
ARTICLE I
---------
DEFINITIONS AND INTERPRETATION
1.1 Definitions - The following terms, as used herein (unless a clear
contrary interpretation appears), have the following meanings:
"Affiliate" means (i) with respect to (a) Sanofi; (b) Sanofi, a societe
anonyme organized under the laws of France, and ( c) any successor thereto
("Sanofi France") and any Person directly or indirectly controlled by Sanofi
France and (ii) with respect to OrthoLogic or any other Person, any Person,
directly or indirectly, controlled by, controlling or under common control with
such Person. For the purposes of this definition, "control" (including, with
correlative meaning, the terms "controlling" and "controlled") shall mean the
possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agreement" has the meaning specified in the preliminary statements.
"Attributable Unit" means the Units, net of returns, that are purchased
by a Third Party and shipped to OrthoLogic's Target Audience.
"Claims" has the meaning specified in Article 1 0.1.1
"Committee" means the joint committee composed of representatives from
OrthoLogic and Sanofi established pursuant to Article 2.1 hereof.
"Competitive Product" means drugs or devices that include the same
indications as the Product.
"Complaint" has the meaning specified in Article 9.3.l.
"Confidential Information" has the meaning specified in Article 12.1.
"Contract Year" means each sequential twelve (12) month period during
the Term with the first such period commencing on January 1, 1998.
"Customers" means Persons involved in the distribution and utilization
of the Product, including, but not limited to, wholesalers, physicians and
managed care organizations.
"Detail" or "Detailing" means a personal contact by a professional
sales representative with a health care practitioner, health care institution,
their employees or agents for the purpose of providing information on or
stimulating interest in the use of purchase of pharmaceutical or health care
products.
"Effective Date" means the date the last Party executes this Agreement.
2
"FDA" means the United States Food and Drug Administration or any other
government body or agency that succeeds it.
"FDA Approval" means receipt of all approvals from the FDA required to
market the Product in the Territory.
"Fidia" means Fidia S.p.A., an Italian corporation in amministrazione
straordinaria under the laws of Italy, with its principal place of business
located at Xxx Xxxxx xxxxx Xxxxxxxx 0/X, Xxxxx Xxxxx (XX), Xxxxx.
"GSI" has the meaning specified in Schedule B.
"Indemnified Party" has the meaning specified in Article 10.3.
"Indemnifying Party" has the meaning specified in Article 10.3.
"License Agreement" has the meaning specified in Article 3.2(e).
"Licensed Use" means the use of the Product in the Territory.
"Marketing Plan" has the meaning specified in Article 2.1.
"Minimum Promotional Amount" has the meaning specified in Article
5.3.4.
"Minimum Unit Sales Amount" has the meaning specified in Article 5.3.5.
"Net Sales" means the gross sales invoiced for the Product by Sanofi
and its Affiliates to Third Parties less deductions:. (i) distribution, quantity
and/or cash discounts, allowances and/or Rebates actually allowed or given, and
transportation and insurance costs for shipments to customers; (ii) credits or
refunds actually allowed for returned Units, and (iii) sales and other excise
taxes directly related to that sale, to the extent that such items are included
in the gross invoice price (but not including taxes assessed against the income
derived from such sale). Sales between or among Sanofi and its Affiliates shall
be excluded from the computation
3
of Net Sales except where such Affiliates are end users but Net Sales shall
include the subsequent final sales to Third Parties by such Affiliate. In the
event of a Recall, Net Sales will be adjusted mutually between the Parties.
"Net Selling Price" or "NSP" for any calendar period means Net Sales
for that period divided by the number of Units, net of returns, sold by Sanofi
and its Affiliates during the same period.
"Nonsalable Returns" means Returns that cannot be resold.
"OCU" means OrthoLogic's compensation per Unit, net of returns, which
is calculated as the Net Selling Price minus the Trade Transfer Price minus
payments made to Sanofi pursuant to Articles 6.2.2 (i) and (ii) of this
Agreement.
"OrthoLogic" has the meaning specified in the preliminary statements.
"OrthoLogic's Annual Unit Forecast" has the meaning specified in
Article 5.3.2.
".Party" means Sanofi or OrthoLogic and, when used in the plural, shall
mean OrthoLogic and Sanofi.
"Payment Period" means the period commencing on the first day of the
launch of the Product and ending on the last day of each of the succeeding
calendar quarters during the Term.
"Person" means any natural person, corporation, firm, business trust,
joint venture, association, organization, company, partnership or other business
entity, or any government or any agency or political subdivision thereof.
"Product" means Hyalgane hyaluronic acid sodium salt as an
intra-articular device or drug for human use for the treatment of arthropathies,
the manufacturing specifications of which are described in the License
Agreement.
4
"Providing Party" has the meaning specified in Article 12.l..
"Rebate" means the return of a payment or a charge back to the customer
based on certain criteria set forth in the contract that the customer must meet
for the contracted products and/or any Federal or state statutory requirements
(i.e., market share, formulary acceptance, dollar volume or growth over some
average).
"Recall" shall mean any action (including replacement and repair) to
correct misbranded, adulterated or unmarketable Product, which is either (i)
specifically mandated by the FDA or other regulatory authorities; (ii) agreed
upon by Sanofi and Fidia, or (iii) determined by either Sanofi or Fidia in good
faith, after consultation with the other party, for reasons of safety, efficacy
or other material Product defect materially affecting Product marketability.
"Receiving Party" has the meaning specified in Article 12.l.
"Renewal Term" has the meaning specified in Article 3.1.
"Residual Period" has the meaning specified in Article 3.1 (a).
"Returns" means the Product that is returned and attributable to the
Target Audience.
"Sample Product" means a Unit which is used to promote the use of
"Hyalgan" at no cost to the Target Audience and which is provided by Fidia in
reasonable quantities and identified with appropriate wording.
"Sanofi" has the meaning specified in the preliminary statements.
"Sanofi Group" has the meaning specified in Article 10.2.l.
"Shared Accounts" means accounts which are involving orthopedic
surgeons and other types of physicians who prescribe the Product, including, but
not limited to, health maintenance organizations, group purchasing
organizations, co-operative purchasing groups and multi- disciplined practices.
5
"Target Audience" means orthopedic surgeons, who graduated from an
accredited program, as well as accounts which are deemed to be "Shared Accounts"
in the Territory, which shall use the Product for the Licensed Use.
"Term" has the meaning specified in Article 3. 1.
"Territory" means the USA, which includes the 50 states, the District
of Columbia and USA military bases around the world.
"Third Party" means any Person who or which is neither a Party nor an
Affiliate of a Party.
"Trademark" means the xxxx "Hyalgan" United States Registration No.
1,420,772 (12/16/86) owned by Fidia, and any other marks owned or controlled by
Fidia and used by Sanofi pursuant to the License Agreement.
"Trade Transfer Price" means an amount of 30% of Net Selling Price as
defined in the License Agreement, provided, however, that during the first four
(4) years of the term of the License Agreement, the Trade Transfer Price shall
not be less than Sixteen Dollars ($16.00) per Unit (the "Floor") nor more than
Eighteen Dollars ($18.00) per Unit (the "Cap"). On or before September 30, 2001,
the Floor and the Cap shall be negotiated in good faith by Sanofi and Fidia
based upon the prevailing economic and competitive dynamics affecting the
marketplace. If Sanofi and Fidia do not reach agreement prior to the
commencement of the next calendar year, the Floor and the Cap agreed upon for
the previous calendar year will be adjusted by an amount equal to the percentage
increase or decrease in the all items index of the US Department of Labor
(Bureau of Labor Statistics) Consumer Price Index ("CPI") for the USA from the
base month of August 1999, provided, however, that at no time shall the annual
increase or decrease exceed 4%. During the remainder of the term of the License
Agreement, the new Floor and the new Cap will be annually adjusted by an amount
equal to the percentage increase or decrease in the CPI from the base month of
August 2001, provided, however, that at no time shall the annual increase or
decrease exceed four percent (4%), nor
6
shall the Trade Transfer Price exceed 30% of Net Selling Price as defined in the
License Agreement.
"Unit" means one (1) 2ml-vial or pre-filled syringe containing 20mg of
the Product, as requested by Sanofi in its purchase order of the Product plus
package insert.
"USA" means the United States of America.
"Wholesaler Acquisition Cost" means the published price a
wholesaler/distributor will pay Sanofi for the Product.
1.2 Interpretation - In this Agreement, unless a clear contrary
intention appears:
(i) the singular number includes the plural number and
vice versa;
(ii) reference to any person or entity includes such
person's or entity's successors and assigns;
(iii) reference to this Agreement means such agreement as
amended, modified or supplemented from time to time
in accordance with the terms hereof;
(iv) reference to any law, rule, regulation, order,
decree, requirement, policy, guideline, directive or
interpretation means as amended, modified, codified,
replaced or reenacted in whole or in part, and in
effect on the determination date, including rules and
regulations promulgated thereunder;
(v) "hereundee", "hereof", "hereto" and words of similar
import shall be deemed references to this Agreement
as a whole and not to any particular Article, Section
or other provision hereof;
(vi) "including" (and with correlative meaning "include")
means including without limiting the generality of
any description preceding such term; and
(vii) relative to the determination of any period of time,
"from" means "from and including to" and "to" means
"to but excluding".
7
ARTICLE 11
----------
COMMITTEE
2.1 The Parties with FIDIA shall establish the Committee consisting of
a mutually agreed number of employees of Sanofi, OrthoLogic and FIDIA, which
shall meet periodically, as the Parties and FIDIA agree, but not less than every
quarter. For purposes of the Committee, FIDIA's role will be advisory and
observational. The Parties and FIDIA will meet to direct the marketing and
promotion of the Product to the Target Audience, including, but not limited to
the following: (a) to review and coordinate marketing and sales plans; (b) set
sales forecasts; (c ) coordinate development and allocation by market of
promotional materials; (d) discuss Detailing efforts for OrthoLogic; (e) discuss
research and development activities of the Product; (f) report on the status of
clinical studies; (g) establish sampling and marketing unit strategies and
procedures; (h) establish and update Target Audience account lists; (i)
establish and periodically review procedures for handling inquires to the
Product, including but not limited to, medical, product inquires, technical,
product complaints, safety issues and adverse reactions, and adverse events ;
and (j) to discuss any other issues or topics concerning promotion of the
Product. In particular, the Committee shall determine the initial plan for
OrthoLogic's marketing and promotion of the Product to the Target Audience (the
"Marketing Plan"). In addition, with respect to Shared Accounts, the Committee,
on a quarterly basis, will approve, for purposes of Compensation, a percentage,
which will vary from time to time based on a joint written presentation of the
Parties from an account by account analysis performed by Sanofi Division
Managers and OrthoLogic's Area Vice Presidents, to be used when calculating
Attributable Units allocated from the Shared Accounts to OrthoLogic. Each Party
shall have an equal opportunity to express its views regarding decisions to be
taken by the Committee. In the event of a difference of opinion within the
Committee regarding a decision, either Party shall be afforded an opportunity to
convey its views to the senior executives of the other Party, but Sanofi shall
have the ultimate decisional authority.
8
ARTICLE III
-----------
TERM AND TERMINATION
3.1 Term. This Agreement shall continue in force for an initial period
commencing as of the Effective Date and, unless sooner terminated as provided in
this Agreement, shall terminate on December 31, 2002 unless renewed pursuant to
Article 3.1 (b) (the "Term"). Thereafter, Sanofi may, at its sole option, invoke
one of the following:
(a) at the expiration of the Term or any Renewal Term, Sanofi
shall pay to OrthoLogic an amount equal to 50% of the gross compensation paid
OrthoLogic pursuant to this Agreement for the last calendar year, which will be
paid on a quarterly basis during the next calendar year (the "Residual Period");
or
(b) Sanofi shall renew this Agreement under the same terms and
conditions hereunder for an additional one (1) year period (the "Renewal
Term")and the Minimum Sales Unit requirement for that year shall be at 50% of
the last calendar year's Attributable Units; or
(c) Sanofi shall enter into a "revised" co-promotion agreement
with OrthoLogic on terms and conditions established by the Committee that are
mutually beneficial to the Parties.
Sanofi shall notify OrthoLogic one hundred twenty (120) days prior to
the expiration of the Term as to which option in Article 3.1 above Sanofi shall
exercise.
3.2 Termination. Notwithstanding the provisions of Article 3.1 above,
this Agreement may be terminated in accordance with the following provisions:
(a) Either Party hereto may terminate this Agreement at any
time upon written notice to the other Party if the other Party: (i) files a
petition of any type as to its bankruptcy (which petition is not dismissed
within ninety (90) days); (ii) is declared bankrupt; (iii) becomes insolvent;
(iv) makes an assignment for the benefit of creditors; (v) goes into liquidation
or receivership; or (vi) otherwise loses legal control of its business;
9
(b) Either Party may terminate this Agreement upon written
notice to the other Party if Minimum Unit Sales as described in Article 5.3.5 of
this Agreement are not met.
(c) Either Party may terminate this Agreement upon written
notice to the other Party if an event of Force Majeure continues for more than
six (6) months as provided in Article XVIII below;
(d) Either Party may terminate this Agreement upon written
notice to the other Party if the other Party is in material breach or default of
this Agreement and not cured as provided in Article XIV of this Agreement;
(e) Sanofi may terminate this Agreement immediately upon the
termination of the Exclusive License and Distribution Agreement made and entered
into on the same date as the Effective Date by and between Fidia and Sanofi (the
"License Agreement");
(f) Sanofi may terminate this Agreement upon thirty (30) days
written notice to OrthoLogic in the event that conditions are not met as
described in Article 5.3.4 and 5.3.5 of this Agreement
3.3 Non-Compete. During the Term and for a period of one (1) year after
the early termination or expiration of the Term, or any renewal thereafter,
OrthoLogic shall not market, promote, distribute or sell in the Territory any
Competitive Product.
3.4 Effect of Termination. Termination, expiration, cancellation or
abandonment of this Agreement through any means and for any reason shall not
relieve the Parties of any obligation accruing prior thereto and shall be
without prejudice to the rights and remedies of either Party with respect to any
antecedent breach of any of the provisions of this Agreement
3.5 Surviving Obligations. Notwithstanding any termination of this
Agreement, the indemnification provisions of Article X of this Agreement and the
confidentiality provisions of Article XII of this Agreement shall survive.
10
ARTICLE IV
----------
DISCLAIMER OF WARRANTIES
LIMITATION OF LIABILITY
4.1 Warranty and Disclaimers and Limitations.
4.1.1 Sanofi warrants and represents that all quantities of
the Product shall meet all specifications and quality standards described in the
License Agreement, as may be amended from time to time by Sanofi and Fidia, and
that Sanofi shall adhere to all applicable governmental laws and regulations
relating to the distribution, sale and shipment of the Product in the Territory.
Sanofi further warrants that all necessary approvals from government agencies
relating to the sale of the Product hereunder have been obtained.
4.1.2 THE LIMITED WARRANTY PROVIDED IN ARTICLE 4.1.1 IS
SANOFI'S SOLE WARRANTY WITH RESPECT TO THE PRODUCT AND IS MADE IN LIEU OF ANY
AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF QUALITY,
PERFORMANCE, MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE OR PURPOSE. SANOFI
MAKES NO OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND WITH RESPECT TO THE
PRODUCT.
4.2 Limitation of Liability. EXCEPT WITH RESPECT TO CLAIMS FOR
INDEMNIFICATION UNDER ARTICLE X OF THIS AGREEMENT, IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES,
INCLUDING LOSS OR PROFITS, REVENUE, DATA OR USE, INCURRED BY THE OTHER PARTY,
WHETHER IN CONTRACT OR TORT OR BASED ON A WARRANTY, EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11
ARTICLE V
---------
CO-PROMOTIONAL ACTIVITIES
5.1 Appointment. Sanofi hereby appoints OrthoLogic as its exclusive
co-promotion marketing agent for sales of the Product to the Target Audience as
specified in Section 3.3. 1. OrthoLogic and Sanofi shall use commercially
reasonable efforts to simultaneously (i) conduct the training for each Party's
respective sales organization and (ii) commence Detailing. OrthoLogic will not
appoint sub-agents without Sanofi's prior written approval, except that
OrthoLogic is permitted to utilize independent contractors equal to 10% of their
sales force at any one time during the Term.
5.2 Publicity. Neither Party shall issue any press release or public
announcement or otherwise divulge the existence of this Agreement or its terms
without the prior written consent of the other Party except as and to the extent
that such Party shall be obligated by law, rules or regulations of any
governmental or regulatory body. Notwithstanding the foregoing, the Parties
hereto agree to prepare a mutually agreeable press release for dissemination
subsequent to the execution hereof.
5.3 OrthoLogic's Obligations.
5.3.1 Marketing and Forecasts. OrthoLogic shall use best
efforts to market and promote the Product to the Target Audience and shall
conduct face to face Detailing with a minimum of 50% of the Target Audience at
least six (6) times per calendar year during the Term and shall afford Sanofi a
reasonable opportunity to verify the level of such promotional activity by
providing, among other things, OrthoLogic's internal promotional sales activity
reports. OrthoLogic shall maintain an adequate and competent marketing and sales
organization for Detailing to the Target Audience and agrees to promote the
Product by accepted promotional practices and in accordance with FDA
requirements.
5.3.2 Annual Unit Production Forecast. OrthoLogic shall advise
Sanofi in writing on or before the 15" day of September for each year of this
Agreement as to its estimated Unit requirements, exclusive of Samples, for the
next Contract Year ("OrthoLogic's Annual Unit Forecast"). OrthoLogic shall
advise Sanofi as well for the Unit requirements for
12
the Product Samples for the following Contract Year. OrthoLogic's Annual Unit
Forecast and the requirements for the Product Samples shall be provided by
OrthoLogic on a monthly-based schedule. OrthoLogic further agrees that, to the
extent its failure to achieve the Unit Sales equal to OrthoLogic's Annual Unit
Forecast requires Sanofi to incur additional inventory carrying charges, that
these additional charges shall be borne by OrthoLogic and deducted from payments
to OrthoLogic.
5.3.3 Record Keeping. OrthoLogic shall maintain complete and
accurate records regarding its performance hereunder for such periods as may be
required by applicable law.
5.3.4 Promotional Materials. OrthoLogic shall be responsible,
at its own sole expense and cost, for the advertising, promotion and medical
education of the Target Audience, including, but not limited to, the
distribution of promotional materials provided by Sanofi or Fidia pursuant to
Section 5.4.6 below, samples, reminder pieces, promotional materials, seminars,
symposia, luncheons and Continuing Medical Education programs. OrthoLogic agrees
to spend at a minimum the amounts specified in Schedule A, which is attached
hereto and made part of this Agreement, in connection with the foregoing during
the Term (the "Minimum Promotional Amount"). Notwithstanding the foregoing, the
Minimum Promotional Amount shall specifically exclude costs and expenses
associated with OrthoLogic's sales force, managed care, sales support and
marketing personnel expenses. OrthoLogic shall not use any promotional materials
for the Product other than materials provided by Sanofi or Fidia, or except as
developed by OrthoLogic and expressly authorized in advance of use in writing by
Sanofi. The cost of any such authorized (i.e., non-Sanofi) materials shall be
borne by OrthoLogic. OrthoLogic shall provide Sanofi with copies of all head
office correspondence to its field sales force with regard to promotion of the
Product.
5.3.5 Minimum Unit Sales. OrthoLogic agrees that Attributable
Units will be equal to or greater than 50% of , 425,000 and 450,000 for Contract
years 4 and 5 respectively (the "Minimum Unit Sales").
5.3.6 Performance. Anything in this Agreement to the contrary
notwithstanding, if any performance or activity of OrthoLogic, that is required
or contemplated by this
13
Agreement, is prevented or impeded by any action of Fidia or Sanofi, by any
Force Majeure under Article XVIII of this Agreement or by any other condition or
event beyond the control of OrthoLogic, (i) any failure or shortfall in
OrthoLogic's performance shall be excused for the duration of the condition or
event; (ii) an identical amount of time shall be added to any time period
contemplated by this Agreement which is affected by such delay; and (iii) an
equitable adjustment shall be made with respect to any quantitative requirements
to address such factors as reallocation of resources by OrthoLogic and loss of
momentum in the marketplace.
5.4 Sanofi's Obligations.
5.4.1 Product Supply. Sanofi shall use commercially reasonable
efforts to supply the Product for customer orders on a timely basis. If the
Product becomes unavailable, including a recall, during the Term for any reason
and the period of such unavailability extends beyond two (2) months,
OrthoLogic's Detailing obligation as set forth in Article 5.3.1 herein above
shall be suspended. If the period of unavailability extends beyond six (6)
months, then, either Party may upon sixty (60) days prior written notice to the
other Party terminate this Agreement without further obligation, except for
obligations already accrued.
5.4.2 Sale Prices and Term. All sales of the Product shall be
at prices and upon terms established by Sanofi in conjunction with Article 11 of
this Agreement and Sanofi shall have the right, in its sole discretion, from
time to time, to establish, change, alter or amend prices and other terms and
conditions of sale, provided that it provides OrthoLogic with at least seven (7)
days written notice in advance of any such change. The Parties agree that it may
be necessary from time to time to offer customers discounts from the established
list prices. Periodically, Committee will establish guidelines for the amount
and duration of such discounts. OrthoLogic shall not process orders for the
Product, or make price quotations or delivery promises without Sanofi's prior
written approval, provided, however, that OrthoLogic is permitted to have its
sales force complete Sanofi approved order forms and submit the order forms to
Sanofi.
5.4.3 Processing Orders. Sanofi is responsible for the Product
distribution in the Territory. All orders received by Sanofi are subject to its
approval and acceptance and Sanofi reserves the right to accept, reject, in
whole or in part, any or all orders received and/or
14
accepted for the Product at any time, for any reason. If OrthoLogic receives any
orders it shall refer such to Sanofi. All the Product sales shall be invoiced by
Sanofi and shall be made in accordance with Sanofi's terms and conditions of
sale including, without limitation, prices, credit terms, cash discounts,
returns and allowances. Sanofi shall be responsible for all credit risks and
collections of all payments due from customers for the shipped Product. Sanofi
shall not be liable to OrthoLogic for any rejection, cancellation or
modification of any customer order referred to Sanofi by OrthoLogic, or any
failure to deliver the Product ordered pursuant to such order.
5.4.4 Delivery of the Product. Sanofi shall ship and deliver
the Product to customers placing orders pursuant to this Agreement. As between
OrthoLogic and Sanofi, all risk of loss or damage to or destruction of the
Product shall be borne by Sanofi.
5.4.5 Invoicing. Sanofi shall invoice the customer for the
Units ordered and shipped pursuant to such order.
5.4.6 Promotional Materials. Sanofi shall supply at
OrthoLogic's sole expense, reasonable quantities of relevant promotional
materials at Sanofi's cost to OrthoLogic at a fixed location as OrthoLogic may
specify. If OrthoLogic requests shipment to more than one location, it shall
bear the incremental expense thereof. All such promotional material shall comply
with FDA regulations.
5.4.7 Training. Sanofi shall be responsible for providing
reasonable quantities of existing training materials to OrthoLogic's sales force
and shall make available at times and places to be agreed reasonable numbers of
Sanofi personnel for training purposes. Sanofi and OrthoLogic agree to, prior to
the date of the Product launch, a co-launch meeting which shall be held at a
time and place mutually agreed to by the Parties. Sanofi and OrthoLogic shall
each be responsible for their respective travel and accommodation expenses
associated with sending their employees and representatives to said co-launch
meeting. Sanofi and OrthoLogic shall share all other costs and expenses
associated with said co-launch meeting in proportion to the number of their
respective attendees.
15
5.4.8 Access to Account Files. Sanofi shall provide OrthoLogic
with access to account files purchased by Sanofi from the distributor showing
Units purchased by account. If OrthoLogic wishes to access information not
purchased by Sanofi, Sanofi will authorize such access, but at OrthoLogic's
expense.
5.4.9 Sampling. Sanofi shall supply to OrthoLogic, in
reasonable quantities, the Sample Product at a cost of 50% of the Trade Transfer
Price for the first twelve (12) months of the Term and 75% of the Trade Transfer
Price for the remainder of the Term consistent with OrthoLogic's forecast.
ARTICLE VI
----------
COMPENSATION / OBLIGATIONS
6.1 Compensation.
6.1.1 Commission to OrthoLogic:
As compensation hereunder, OrthoLogic shall be paid by Sanofi an amount
equal to the Attributable Units times OCU, as illustrated in the example in
Schedule B attached hereto and made part of this Agreement. OrthoLogic's
commission payments shall be made monthly by Sanofi within ten (10) business
days of receipt of wholesaler report and shall equal thirty five percent (35%)
of Net Sales attributable to Target Audience for that month. Within thirty (30)
days after the end of each calendar quarter, the commission paid to OrthoLogic
shall be adjusted and payments made between the Parties within ten (10) business
days, based on the actual Attributable Units times OCU in that quarter.
6.1.2 If at any time during the Term, the GSI is less than
Seventy Dollars ($70.00), the Parties mutually agree to discuss a revised
commission structure.
6.2 Obligations.
6.2.1 (i) Milestone Payments to Fidia. OrthoLogic agrees to
pay Fidia the below listed milestone payments to be received by Sanofi, on
behalf of Fidia, in connection with the
16
Product and which payments shall be directly passed through to Fidia. The total
of these milestone payments will not be less than Four Million Dollars
($4,000,000) and shall be paid as follows:
(a) One Million Dollars ($1,000,000) payable upon execution of
this Agreement;
(b) One Million Dollars ($1,000,000) payable six (6) months
after the launch of the Product by OrthoLogic;
(c) One Million Dollars payable twelve (12) months after the
launch of the Product by OrthoLogic; and.
(d) One Million Dollars payable eighteen (18) months after the
launch of the Product, but not later than December 31, 1998.
(ii) OrthoLogic agrees to pay Sanofi a royalty which
will be passed through to Fidia on combined annual Net Sales of Sanofi and
OrthoLogic in excess of $30 Million Dollars. The Parties shall share the 10%
royalty payment due Fidia in accordance with the respective Party's pro rata
share of combined sales for that year. Sanofi will invoice OrthoLogic any amount
due on a quarterly basis and OrthoLogic will pay said amounts within 10 business
days. The aggregate royalty payments by OrthoLogic and Sanofi to Fidia shall not
exceed $20 Million Dollars for the term of the License Agreement. At any time
during the Term, if the GSI is less than Seventy Dollars ($70.00), the Parties
mutually agree to discuss a lower royalty rate.
6.2.2. Obligations to Sanofi:
OrthoLogic agrees to compensate Sanofi the following:
(i) A Royalty equal to 10% of the Net Selling Price
per Unit times the Attributable Units.
17
(ii) Overhead in the amount equal to $6.75 per Unit
times the Attributable Units. This amount shall be fixed for a period of 12
months from the Effective Date, thereafter the per Unit amount shall be adjusted
annually by an amount equal to the percentage increase or decrease in the all
items index of the US Department of Labor (Bureau of Labor Statistics) Consumer
Price Index ("CPI") for the USA from the base month of August 1997, provided,
however, that at no time shall the annual increase or decrease exceed four
percent (4%).
ARTICLE VII
-----------
REPORTS AND RECORDS
7.1 Reports. Sanofi shall keep true and accurate accounts of Actual
Unit Sales and the OCU and of sums payable to OrthoLogic hereunder. Commencing
with the Product launch under this Agreement and at the end of every calendar
quarter thereafter, Sanofi shall deliver to OrthoLogic written sale and payment
reports containing the calculations by Units or other forms or reports used to
compute payments due OrthoLogic hereunder for the Payment Period covered by the
report. Each sale and payment report and other reports required hereunder shall
be delivered within forty-five (45) business days after the end of the Payment
Period which it covers.
7.2 Examination of Records. During the Term and for a period of two (2)
years thereafter, OrthoLogic shall have the right, at its own expense, to have a
public accounting firm, to which Sanofi has no reasonable objection, examine the
relevant books and records of account of Sanofi during reasonable business hours
not more often than once each calendar year, to determine whether accurate
accounting and payment have been made by Sanofi hereunder. The public accounting
firm shall treat as confidential, and shall not disclose to OrthoLogic, any
information other than information which relates to the accuracy of Sanofi's
accounting of amounts payable hereunder to OrthoLogic.
18
ARTICLE VIII
------------
TRADEMARK AND CORPORATE NAME
8.1 Use of Trademark. OrthoLogic shall use the Trademark only in the
form, manner, and logotype, including identifying the Trademark by any necessary
notices of Trademark registration, specifically approved by Sanofi unless the
Parties agree together, in writing, on further uses of the Trademark.
8.2 Acknowledgment. Sanofi represents that it has certain rights to the
Trademark and that all rights accruing from its use shall inure to the benefit
of Sanofi. OrthoLogic agrees not to contest or deny the validity of the
Trademark or Sanofi's rights to the Trademark. OrthoLogic agrees that it will
not register the Trademark or any colorable imitation thereof or in any way
assist a Third Party to do so.
8.3 Rights on Termination. OrthoLogic agrees that, following
termination of this Agreement for any reason, it will claim no right, title or
interest in, or any right to use the Trademark by reason of its previous
activities under this Agreement. Immediately upon termination of this Agreement,
OrthoLogic shall cease all use of the Trademark and shall turn over to Sanofi or
destroy all stocks of advertising and promotional materials which use the
Trademark.
8.4 Use of Corporate Names. It is the intent of the Parties to promote
sales of the Product through the use of their respective corporate names. Except
as otherwise authorized pursuant to this Article VIII or required by Federal or
state laws and regulations, the Parties agree that each will obtain the consent
of the other Party prior to using the other Party's corporate name, which
consent shall not be unreasonably withheld.
19
ARTICLE IX
----------
FOOD AND DRUG ADMINISTRATION COMPLIANCE
AND DISCONTINUANCE OF PRODUCT
9.1 Relations with the FDA. Sanofi and Fidia, as applicable, shall be
responsible for all interactions with the FDA regarding the Product, including
the filing of required reports, but shall keep OrthoLogic informed of such
contacts insofar as they relate to the Target Audience.
9.2 Relationship with Customers. OrthoLogic shall have all inquires
relating to the Product including, but not limited to, medical, product
inquires, technical, product complaints, safety issues and adverse reactions,
adverse events routed directly to Sanofi Medical staff. OrthoLogic will develop,
in cooperation with Sanofi, a system to immediately forward requests from
Customers associated with the Product to Sanofi.
9.3 Complaints and Records.
9.3.1 Complaints. The Parties agree to report to each other
any and all complaints and medical device reports (as per FDA regulations),
including, but not limited to, adverse reactions, product anomalies or stability
problems relative to or having a bearing on the Product or its performance
(collectively, the "Complaint") which they receive with respect to the Product
within the time required by applicable law and regulations. In any event, the
Party learning of the Complaint will notify the other Party as soon as possible
the next working day . For purposes of this Agreement, Sanofi will assume
responsibility for reporting the Complaint to the FDA as provided in the License
Agreement. In any event, either Party shall promptly notify the other of any
Complaint received by such Party in sufficient detail and in sufficient time to
allow compliance with any and all regulatory requirements imposed in the
Territory.
9.3.2 Records. Each of Sanofi and OrthoLogic shall maintain a
record of all Complaints which they receive. Each Party shall have the right,
upon reasonable notice and at reasonable intervals during normal business hours,
to examine the complaint files, medical device reports, and other filings or
records of the other Party, which are related to the Product.
9.4 Recall. In the event that Sanofi and/or Fidia determines that an
event, incident or circumstance has occurred which may result in the need for
removal of the Product from the
20
market, in whole or in part, it shall advise and consult OrthoLogic with respect
thereto. If Sanofi and/or Fidia removes the Product from the marketplace, Sanofi
and Fidia shall be responsible as provided in the License Agreement for the
recall process including communications with the FDA and shall bear all costs
and expenses of recall, including, without limitation, expenses or obligations
to Third Parties, the cost of notifying customers and costs associated with
shipment of the recalled Product from a customer to Sanofi or Fidia, provided,
however, that if the Recall results from an action by OrthoLogic, OrthoLogic
shall promptly pay all costs and expenses of Sanofi and Fidia in connection with
the Recall.
9.5 Record Keeping. Sanofi shall maintain complete and accurate
records, for such periods as may be required by applicable law, but in no event
less than three (3) years, of all the Product sold by it.
9.6 Discontinuance. Sanofi or Fidia may at any time make changes in, or
discontinue the manufacture, sale or use of the Product if safety, regulatory,
or manufacturing reasons, in Sanofi's or FIDIA's opinion warrant such action.
Sanofi shall promptly notify OrthoLogic of any discontinuance or significant
change in the Product, giving OrthoLogic as much notice as reasonably possible
under the circumstances, attempting, in any event, to provide OrthoLogic at
least six (6) months' advance notice of any discontinuance.
ARTICLE X
---------
INDEMNIFICATION
10.1 Indemnification by Sanofi.
10.1.1 Indemnification by Sanofi. Except for any Claims
(defined below) arising under Article 10.2, Sanofi shall indemnify, defend and
hold OrthoLogic harmless from and against all claims, damages, losses, costs and
expenses, including reasonable attorney's fees (collectively, "Claims"), which
OrthoLogic may incur by reason of any Claims (a) alleging that the Product or
the Trademark, or their use as provided hereunder, violate any patent,
trademark, trade secret, know-how or other intellectual property rights of any
sort; (b) resulting from an injury, illness or death of any Person, to the
extent that such Claim arises out of or results from the tortious conduct or
inaction of Sanofi or its officers, employees or agents in
21
connection with the Product; ( c) arising out of or resulting from the material
breach of Sanofi's representations and warranties in Article 17.2 of this
Agreement; or (d) resulting from injury, illness or death of any person arising
out of or relating to the distribution or use of the Product.
10.1.2 If such Claim in Article 1 0.1.1 above arises in whole
or in part from OrthoLogic's tortious conduct or inaction, then the amount of
such Claim that Sanofi shall indemnify OrthoLogic for pursuant to Article 10.1.1
above shall be reduced by an amount in proportion to the percentage of
OrthoLogic's responsibilities for such Claim as determined by a court of
competent jurisdiction in a final and non-appealable decision or in a binding
settlement between the Parties.
10.2 Indemnification by OrthoLogic.
10.2.1 Indemnification by OrthoLogic. Except for any Claims
arising under Article 10.1 above, OrthoLogic shall indemnify, defend and hold
Sanofi and its Affiliates and their respective officers, directors, employees
and agents (the "Sanofi Group") harmless from and against all Claims, which the
Sanofi Group may incur by reason of any Claims (a) arising out of the activities
of OrthoLogic's marketing, promotion and sales efforts which are not authorized
by Sanofi pursuant to this Agreement; (b) any breach by OrthoLogic of its
representations or obligations under this Agreement; (c ) resulting from an
injury, illness or death of any Person, to the extent that such Claim arises out
of or results from the tortious conduct or inaction of OrthoLogic or its
officers, employees or agents in connection with the Product; or (d) arising out
of or resulting from any material breach of OrthoLogic's representations and
warranties in Article 17.2 of this Agreement above.
10.2.2 If such Claim in Article 10.2 above arises in whole or
in part from the Sanofi's tortious conduct or inaction, then the amount of such
Claim that OrthoLogic shall indemnify the Sanofi Group for pursuant to Article
10.2.1 above shall be reduced by an amount in proportion to the percentage of
Sanofi's responsibilities for such Claim as determined by a court of competent
jurisdiction in a final and non-appealable decision or in a binding settlement
between the Parties.
22
10.3 Indemnification Procedure. The party seeking indemnification under
this Article X (the "Indemnified Party") shall (a) give the other party (the
"Indemnifying Party") notice of the relevant Claim, (b) reasonably cooperate
with the Indemnifying Party, at the Indemnifying Party's expense, in the defense
of such Claim, and (c ) give the Indemnifying Party the sole right to control
the defense and settlement of any such Claim, except that the Indemnifying Party
shall not enter into any settlement that affects the Indemnified Party's rights
or interest without the Indemnified Party's prior written consent, which consent
shall not be unreasonably withheld. The Indemnified Party shall have no
authority to settle any Claim on behalf of the Indemnifying Party. The
Indemnified Party may, at its option and its own expense, participate in the
defense of any such claim with legal counsel of its own choice.
ARTICLE XI
----------
INSURANCE
11.1 Unless otherwise agreed to in writing, each Party shall, at its
own expense, carry and maintain during the Term, with companies satisfactory to
the other, product liability insurance against losses arising out of, including,
but not limited to, its activities in respect to the distribution, the
marketing, promotion and sale of the Product and all components thereof, naming
the other Party as an additional named insured under such policy (or policies)
of insurance, and in an amount of not less than Five Million Dollars
($5,000,000) per occurrence and in the annual aggregate. Such policy (or
policies) of insurance shall contain a Broad Form Vendors Endorsement, and shall
be written on an occurrence basis, or if on a claims made basis shall have a
retroactive date at least equal to the Effective Date. Each Party agrees that it
shall provide to the other Party within thirty (30) days of the Effective Date,
and from time to time thereafter upon the Parties reasonable request, a
certificate of insurance evidencing compliance with these provisions.
ARTICLE XII
-----------
CONFIDENTIAL INFORMATION
12.1 Sanofi and OrthoLogic agree that all materials, documents and
information provided to them or their employees or agents by the providing Party
hereto (the "Providing Party") and all information developed by the Party
receiving said materials, documents and
23
information (the "Receiving Party") exclusively pursuant to this Agreement, is
and shall be considered as confidential information to the Providing Party
(collectively, the "Confidential Information") and the sole property of the
Providing Party. The Receiving Party agrees to hold such Confidential
Information in strict confidence for five (5) years after the expiration of the
Term and shall disclose the Confidential Information to the Receiving Party's
respective agents, employees, officers and directors, and representatives only
on a need-to-know basis and only if the foregoing Parties are bound and
obligated by the same provisions of confidentiality as used by the Receiving
Party; provided that (a) the Receiving Party will have no obligations with
respect to any Confidential Information that is now or later becomes publicly
available through no fault of the Receiving Party, (b) the Receiving Party
obtains such Confidential Information from a Third Party entitled to disclose
it, (c ) the Receiving Party already has in its possession such Confidential
Information as indicated in its written records, or (d) such Confidential
Information is required by any law, rule, regulation, order, decision, decree or
subpoena or other judicial, administrative or legal process to be disclosed,
provided, however, that the Receiving Party gives the Providing Party sufficient
advance written notice to permit it to seek a protective order or other similar
order with respect to such Confidential Information and thereafter discloses
only the minimum Confidential Information required to be disclosed in order to
comply. The Receiving Party shall include in its contracts with their respective
agents, subcontractors, employees, officers and directors, and representatives,
confidentiality undertaking consistent with this Article XII.
12.2 Upon the expiration of the Term, the Receiving Party will promptly
return to the Providing Party or destroy or delete, as appropriate, all of the
Confidential Information, as well as all written material or electronic storage
which incorporates any Confidential Information, except that one (1) copy of the
Confidential Information may be retained for archival purposes.
12.3 The Receiving Party acknowledges that the disclosure of
Confidential Information without the Providing Party's express written
permission will cause the Providing Party irreparable harm and that the breach
or threatened breach of the nondisclosure provisions of Article XII of this
Agreement will entitle the Providing Party to injunctive relief, in addition to
any other legal remedies that may be available to it.
24
12.4 All obligations of confidentiality and non-disclosure set forth in
this Agreement will survive, without limitation, upon expiration of the Term.
ARTICLE XIII
------------
RELATIONSHIP OF THE PARTIES
13.1 Nothing contained in this Agreement shall be deemed to create a
partnership or joint venture between the Parties, and each of the Parties shall
in all matters connected herewith be independent contractors. Except as required
by this Agreement, which provides for OrthoLogic to represent Sanofi in the
promotion of the Product, neither of the Parties shall hold itself out as the
agent of the other, nor shall either of the Parties incur any indebtedness or
obligation in the name of, or which shall be binding on the other, without the
prior written consent of the other. The personnel of Sanofi are paid by Sanofi
and the personnel of OrthoLogic are paid by OrthoLogic, and each Party assumes
full responsibility for its own personnel under the laws and regulations of
governmental authority in the Territory. In the event that either of the Parties
violates the provisions of this Article XIII, said Party shall indemnify the
other against any debt or obligation so incurred and shall hold the other Party
harmless therefrom.
ARTICLE XIV
-----------
TERMINATION FOR BREACH OR DEFAULT
14.1 In addition to the provisions of Article III hereof, either Party
may terminate this Agreement for material breach or default if such material
breach or default is not cured within ninety (90) days after the giving of
notice by the other Party specifying such breach or default. In addition,
OrthoLogic may terminate upon the discontinuance of manufacture, sale or use of
the Product by Sanofi.
14.2 In promoting sale of the Product, OrthoLogic agrees to act in
accordance with accepted marketing standards and FDA requirements. If Sanofi
believes that OrthoLogic has breached or is in default of this Agreement for
failure to comply with such standards or requirements, Sanofi will give
OrthoLogic prompt notice thereof, and the Parties will work together to cure any
breach or default. If the breach or default is not cured within ninety (90)
25
days after the giving of the notice described in the preceding sentence, Sanofi
may terminate this Agreement.
14.3 The failure of either Party to terminate pursuant to this Article
XIV shall not preclude said Party from thereafter terminating for any subsequent
violation whether similar or not.
ARTICLE XV
----------
PROPERTY OF THE PARTIES
15.1 In the event of termination of this Agreement for whatever cause,
in addition to either Party's obligations hereunder, a Party in possession of
property of the other Party shall return such property to the other Party or its
designee no later than thirty (30) days after the effective date of termination.
ARTICLE XVI
-----------
INJUNCTIVE RELIEF
16.1 The Parties acknowledge that the covenants in Article XII of this
Agreement in respect of the Confidential Information it obtains hereunder are
unique and integral to this Agreement and that monetary damages would be an
inadequate remedy at law in the event of a breach. For that reason, the Parties
consent that such covenants shall be enforceable in a court of equity by
temporary or permanent injunction, restraining order or a decree of specific
performance. The remedies provided above shall be cumulative and not exclusive,
and in addition to any other remedies which the other Party may have under this
Agreement or applicable law.
ARTICLE XVII
------------
GENERAL REPRESENTATIONS AND WARRANTIES
17.1 Representation and Warranties of OrthoLogic. OrthoLogic hereby
represents and warrants to Sanofi that:
26
17.1.1 it is a corporation duly organized, validly existing
and in good standing under the laws of the state and country of its
incorporation and has the corporate power to own its assets and properties and
to carry on its business as now being and heretofore conducted;
17.1.2 OrthoLogic is duly authorized to execute and deliver
this Agreement and to perform its obligations hereunder;
17.1.3 the execution, delivery and performance of this
Agreement have been duly authorized, do not violate its certificate of
incorporation, by laws or similar governing instruments or applicable law and do
not, and with the passage of time will not, materially conflict with or
constitute a breach under any other agreement, judgment or instrument to which
it is a party or by which it is bound; and
17.1.4 it shall promote, market, and sell the Product only in
accordance with the term of this Agreement (including, but not limited to,
Article 14.2 of this Agreement and the Marketing Plan), and shall not take
customer orders or distribute the Product except as expressly provided
hereunder.
17.2 Representation and Warranties of Sanofi. SANOFI hereby represents
and warrants to OrthoLogic that:
17.2.1 it is a corporation duly organized, validly existing
and in good standing under the laws of the state and country of its
incorporation and has the corporate power to own its assets and properties and
to carry on its business as now being and heretofore conducted;
17.2.2 Sanofi is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder;
17.2.3 the execution, delivery, and performance of this
Agreement have been duly authorized, do not violate its certificate of
incorporation, by-laws or similar governing instruments or applicable law and do
not, and with the passage of time will not, materially
27
conflict with or constitute a breach under any other agreement, judgment or
instrument to which it is a party or by which it is bound;
17.2.4 to the best of Sanofi's knowledge, the Product and the
Trademark, and their use as permitted or contemplated hereunder, do not infringe
upon any Third Party intellectual property rights, including, without
limitation, any Patent, trademark, copyright or trade secret; and
17.2.5 that Sanofi has taken commercially reasonable efforts
to secure a source of supply of the Product under the License Agreement for
purposes of this Agreement.
17.3 Joint Representations of the Parties. Sanofi and OrthoLogic hereby
represent and warrant the following:
17.3.1 that Fidia is a third party beneficiary with respect to
payment of the milestone payments described in Article 6.2.1 of this
Agreement. The Parties agree that upon written request by Fidia, Sanofi
shall assign to Fidia, without recourse, all right, title and interest
of Sanofi in said milestone payments, including any cause of action
arising thereunder against OrthoLogic.
ARTICLE XVIII
-------------
FORCE MAJEURE
18.1 Neither Party shall be liable for any default or delay in such
Party's performance if such default or delay is caused by any event beyond the
reasonable control of such Party, including, but not limited to, acts of God,
fire, explosion, weather, disease, war, insurrection, civil strife, riots,
government action, power failure or other similar event; provided, however, that
such performance shall be excused only to the extent of and during such
disability. The Party so affected will give prompt notice of such event, and
shall use its commercial reasonable effort to avoid, remove, or alleviate such
causes of nonperformance and shall
28
continue performance hereunder with the utmost dispatch whenever such causes are
removed.
ARTICLE XIX
-----------
SUCCESSORS AND ASSIGNMENT
19.1 This Agreement shall be binding upon and inure to the benefit of
the Parties hereto and their respective successors and permitted assigns. Except
as stated herein, neither Party shall assign any rights or obligations under
this Agreement without the prior written consent of the other Party. Any
purported assignment in violation of the preceding sentence shall be void.
Either Party may assign any rights or obligations under this Agreement without
the written consent of the other Party to, an Affiliate or to a purchaser of all
or substantially all of the assets to which this Agreement relates, whether by
merger or acquisition. Any permitted assignee shall assume all obligations of
its assignor under this Agreement.
ARTICLE XX
----------
ENTIRE AGREEMENT - MODIFICATIONS
20.1 This Agreement sets forth and constitutes the entire agreement and
understanding between the Parties with respect to the subject matter hereof, and
supersedes any and all prior agreements, understandings, promises and
representations, whether written or oral, between the Parties with respect to
the subject matter hereof. This Agreement may not be released, discharged,
amended or modified in any manner except by an instrument in writing, making
specific reference to this Agreement, and signed duly by authorized
representatives of both Parties.
ARTICLE XXI
-----------
COMPLIANCE WITH LAW
21.1 Each Party shall comply with, and shall not be in violation of,
any valid applicable, federal, state or local statutes, laws, ordinances, rules,
regulations, or other governmental orders including, without limitation, those
of the FDA which materially affect the
29
research, purchase, promotion, sale, manufacture, shipment, distribution or
storage of the Product in the Territory.
ARTICLE XXII
------------
SEVERABILITY
22.1 If and solely to the extent that any provision of this Agreement
shall be invalid or unenforceable, or shall render this entire Agreement to be
unenforceable or invalid, such offending provision shall be of no effect and
shall not affect the validity of the remainder of this Agreement or any of its
provisions; provided, however, that the Parties shall use their respective
reasonable efforts to renegotiate the offending provisions to best accomplish
the original intentions of the Parties.
ARTICLE XXIII
-------------
DISPUTE RESOLUTION AND GOVERNING LAW
23.1 Dispute Resolution. The Parties agree that any disputes between
them concerning this Agreement shall be resolved by a meeting or meetings
between the senior executives of Sanofi and OrthoLogic and other Parties
familiar with this Agreement as determined by such senior executives. In the
event that Sanofi and OrthoLogic are unable to satisfactorily resolve the
dispute(s) as specified herein within 30 calendar days, then such disputes shall
be finally settled in accordance with Articles 23.2, 23.3 and 23.4.
23.2 Governing Law. This Agreement is a New York contract. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without reference to the choice of law doctrine of such state.
23.3 Consent to Jurisdiction.
23.3.1 Any claim, suit, action or proceeding arising out of or
in any way relating to this Agreement shall be adjudicated by a court of
competent jurisdiction in the Xxxxx Xxx Xxxx, Xxxx xx Xxx Xxxx, Xxxxxx of New
York,
30
with respect to any claim, suit, action or proceeding arising out of or in any
way relating to this Agreement, and undertake to bring any such claim, suit,
action or proceeding against the other Party only in said courts in the State of
New York, City of New York, County of New York.
23.3.2 Each Party hereto irrevocably waives, to the fullest
extent permitted by applicable law, any defense or objection it may now or
hereafter have to the laying of venue of any proceeding hereunder brought in the
courts of the State of New York or of the United States sitting in the Borough
of Manhattan and any claim that any proceeding hereunder brought in any such
court has been brought in an inconvenient forum.
23.4 Jury Waiver. Sanofi and OrthoLogic hereby waive trial by jury in
any judicial proceeding involving, directly or indirectly, any matter (whether
in tort, contract or otherwise) in any way arising out of, related to, or
connected with this Agreement or the relationship established hereunder.
ARTICLE XXIV
------------
WAIVER
24.1 No waiver of any right under this Agreement shall be deemed
effective unless contained in writing and signed by the Party charged with such
waiver, and no waiver of any right shall be deemed to be a waiver of any future
right or any other right arising under this Agreement. All rights, remedies,
undertakings, obligations and agreements contained in this Agreement shall be
cumulative and none of them shall be a limitation of any other remedy, right,
undertaking, obligation, or agreement.
ARTICLE XXV
-----------
SURVIVABILITY
25.1 The provisions of this Agreement that are expressly or by their
sense and context intended to survive the termination of this Agreement shall do
so.
31
ARTICLE XXVI
------------
NOTICES
26.1 Any notice, consent or approval permitted or required under this
Agreement shall be in writing and shall be sent by registered or certified mail,
postage prepaid, or by recognized domestic overnight courier or by facsimile to
the addresses set forth below or to such other address in the USA as the Party
to whom notice is to be given has furnished in writing to the other Party. A
notice of change in address shall not be deemed to have been given until
received by the addressee.
If to OrthoLogic: OrthoLogic Corp.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Chairman/CEO
Fax: (000) 000-0000
with copy to:
Xxxxxxx & Xxxxx
Xxx Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
If to Sanofi: Sanofi Pharmaceuticals, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: President
Fax: (000) 000-0000
with copy to:
Sanofi, Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
Fax- (000) 000-0000
All notices shall be deemed to be effective on the date of receipt.
32
ARTICLE XXVII
-------------
HEADINGS
27.1 The descriptive headings in this Agreement are inserted for
convenience only, and do not constitute a part of this Agreement.
ARTICLE XXVIII
--------------
LANGUAGE
28.1 The governing language of this Agreement is English. In the event
of any dispute concerning the construction or meaning of this Agreement,
reference shall be made only to this Agreement as written in English and not to
any translation into any other language.
ARTICLE XXIX
------------
EXHIBITS AND SCHEDULES
29.1 Each of the exhibits and schedules to this Agreement forms an
integral part hereof and is incorporated herein by reference.
ARTICLE XXX
-----------
NO THIRD PARTY RIGHTS
30.1 Except as otherwise provided herein, this Agreement is intended to
be solely for the benefit of the Parties and is not intended to confer any
benefits upon, or create any rights in favor of, any Person other than the
Parties hereto.
ARTICLE XXXI
------------
COUNTERPARTS
31.1 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
a single instrument.
33
ARTICLE XXXII
-------------
CURRENCY
32.1 In this Agreement, unless expressly stated otherwise, all
references to money payments mean lawful currency of the USA and payment in that
currency.
34
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
ORTHOLOGIC CORP. SANOFI PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------------ --------------------------------
Name: Xxxxx X. Xxxxxxxxx Name: Xxxxxx X. Xxxxxxx
---------------------------- ------------------------------
Title: Chairman/CEO Title: President and CEO
--------------------------- -----------------------------
35
Scheduled A
Minimum Promotional Amount
($000)
1997(1) 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
Promotional
Spend $ 750 $1,500 $2,000 $2,750 $2,750 $2,750
(1) Launch Period (Effective Date to December 31, 1997).
Schedule B(1)
OrthoLogic Compensation Schedule for Illustrative Purposes Only
(Example: $100.00 WAC, 1000 Units Sold, 4% Returns)
Price Units Sales OCU
Sold
-------------------------------------------------------------------------------------------
Wholesaler Acquisition Cost (WAC): $ 100.00
Quantity Discounts 0%
Free Goods 0%
Gross Sales Invoice: ("GSI"): $ 100.00 1000 $100,000
Less:
Distribution (% GSI) 7% $ 7,000
Rebates (% GSI) 5% $ 5,000
Returns (% GSI) 4% 40 $ 4,000
Discounts (% GSI) 3% $ 3,000
Net Selling Price Per Unit "NSP": $ 81.00 960 $ 81,000 $ 84.38
Less:
Trade Transfer Price (% of NSP) $ 18.00 960 $ 17,280 $ 18.00
Nonsalable Returns 18.00 10 $ 180 $ 0.19
Overhead to Sanofi 6.75 960 $ 6,480 $ 6.75
Royalty to Sanofi (% of Net Sales) 10% 8,100 $ 8.44
Payment to OrthoLogic: $ 48,960 $ 51.00
(1) The referenced Net Sales deductions are consistent with and reflect the
entirety of the deductions contained in the Net Sales definition.
