EXHIBIT 10.13
TERMINATION AGREEMENT
Termination Agreement (hereinafter this "Agreement"), dated as of April 1,
1998, by and between COLUMBIA LABORATORIES, INC., a Delaware corporation with
its principal place of business at 0000 Xxxxx Xxxxxxxx Xxxxx, XX0X, Xxxxx,
Xxxxxxx 00000 ("Licensor"), and XXXXXX-XXXXXXX COMPANY, a Delaware corporation
with its principal place of business at 000 Xxxxx Xxxx, Xxxxxx Xxxxxx, Xxx
Xxxxxx 00000 ("Licensee").
RECITALS
WHEREAS, Licensor and Licensee are parties to the license and supply
agreement dated as of December 5, 1991 (the "License Agreement"); and
WHEREAS, the parties hereto have determined that it is advisable to
terminate the License Agreement upon the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, including the mutual
promises contained herein, the parties hereto hereby agree as follows:
Section 1. CAPITALIZED TERMS. Capitalized terms utilized herein and not
defined herein shall have the respective meanings ascribed to such terms in the
License Agreement.
Section 2. REAFFIRMATION AND SURVIVAL OF CERTAIN PROVISIONS OF LICENSE
AGREEMENT. The parties hereto hereby explicitly reaffirm as of the date hereof
their respective agreements and obligations contained in Section 9 with respect
to claims of
- 1 -
third parties and Section 19(b) of the License Agreement, and each of the
parties hereto acknowledges that such obligations shall continue beyond and
survive the termination of the License Agreement.
Section 3. CONTINUING OBLIGATIONS UNDER LICENSE AGREEMENT. Except as
amended herein, the License Agreement shall remain in full force and effect from
the date hereof through the Termination Date (as hereinafter defined) and shall
only cease to remain in full force and effect at the Termination Date if the
condition specified in Section 8 hereof shall be satisfied in accordance with
the terms specified herein.
Section 4. TERMINATION OF LICENSE AGREEMENT. Notwithstanding the terms and
provisions of the License Agreement, upon the fulfillment by Licensor of the
condition specified in Section 8 hereof, the License Agreement shall
automatically terminate on the Termination Date. Upon the termination of the
License Agreement (i) all rights of Licensee to sell, market, advertise and
distribute the Replens Product and any line extensions thereof shall
automatically terminate and all licenses and/or sublicenses to use the Patents,
the Replens Technology and the Trademark to make, have made, use, sell and
market the Replens Product and any line extensions thereof and any other
ancillary rights directly related to the foregoing in the Territory previously
granted to Licensee shall revert back to Licensor on the Termination Date; and
(ii) all options relating to the Replens Product granted under the License
Agreement shall expire on the Termination Date. Notwithstanding the foregoing,
the agreements and obligations of the respective parties set forth in this
Agreement and those provisions of the License Agreement specified in Section 2
of this Agreement shall survive the termination of the License Agreement.
- 2 -
Section 5. CONSIDERATION. In consideration for the termination of the
License Agreement and Licensee's rights thereunder, Licensor agrees pay to
Licensee the aggregate sum of Four Million Six Hundred Thousand Dollars
($4,600,000) (the "Consideration") on the Termination Date. Such payment shall
be made by electronic wire transfer in accordance with the wire transfer
instructions specified on Exhibit A attached hereto.
Section 6. INVENTORY PRIOR TO AND AT TERMINATION. From the date hereof
through April 9, 1998 (the "Termination Date"), Licensee shall not order any
Replens Product from Licensor. Licensee shall calculate Licensee's inventory
level of Replens Product on the Termination Date (the "Inventory"). On the
Termination Date, Licensee shall deliver to Licensor a written statement
summarizing the Inventory at said date and the aggregate purchase price paid by
Licensee therefor. Licensee shall deliver the Inventory to Licensor, at
Licensee's expense, within (10) days of the Termination Date (the "Delivery
Date") to a destination specified in writing by Licensor no later than the
Termination Date. Licensor shall pay to Licensee an amount equal to the
aggregate purchase price originally paid by Licensee for the Inventory (the
"Inventory Purchase Price"). The Inventory Purchase Price shall be due and
payable on the Delivery Date. Title to the Inventory shall pass to Licensor at
the time Licensee has received the Inventory Purchase Price. Risk of loss shall
pass to Licensor upon delivery of the Inventory to the destination specified by
Licensor.
Section 7. RETURNS AND OUTSTANDING COUPONS.
(a) From the date hereof until the date which is six (6) months
after the Termination Date, Licensor and Licensee shall share equally the costs
and expenses
- 3 -
for returns of Replens Product that bears licensees (or Xxxxx Xxxxx') name on
the label up to a maximum of One Hundred Thousand Dollars ($100,000). All
returns in excess of One Hundred Thousand Dollars ($100,000) during such six
(6) month period and all returns thereafter shall be the sole responsibility
of Licensor.
(b) Notwithstanding Section 7(a) hereof, in the event Licensee receives
returns that bear Licensee's (or Xxxxx Xxxxx') name on the label, which returns
are the sole responsibility of Licensor pursuant to Section 7(a) hereof,
Licensee may, in its sole discretion, elect to credit customers at the price at
which such customers purchased the Replens Product from Licensee. Licensor shall
reimburse Licensee, in full, for the costs and expenses incurred by Licensee for
any such returns within thirty (30) days of receipt by Licensor of a request by
Licensee for payment.
(c) From the date hereof until the date which is six (6) months after the
Termination Date, Licensee agrees to bear the costs and expenses of any
redemptions of outstanding coupons issued by Licensee (or Xxxxx Xxxxx) relating
to the Replens Product (the "Replens Coupons"). Thereafter, Licensor agrees to
bear all costs and expenses of any redemptions of Replens Coupons. Licensee
represents and warrants to Licensor that, on the date hereof, the outstanding
liability, for the Replens Coupons is not in excess of $40,000.
Section 8. CONDITIONS TO RELEASE AND TERMINATION OF LICENSE AGREEMENT. The
mutual releases of the parties set forth in Sections 9 and 10 hereof, and the
termination of the License Agreement as set forth in Section 4 hereof, are
subject to the condition that Licensor shall have paid to Licensee the entire
Consideration on the Termination Date pursuant to Section 5 hereof.
- 4 -
Section 9. RELEASE OF LICENSOR FROM LICENSE AGREEMENT. Upon the fulfillment
by Licensor of the condition specified in Section 8 hereof, Licensee hereby
agrees to release and forever discharge Licensor and its past, present and
future officers, directors, stockholders, agents, affiliates, servants,
employees and legal counsel and their successors and assigns from all claims,
actions, demands, causes of action, suits, debts, obligations, damages and
liabilities of any nature whatsoever, in law or in equity, whether known or
unknown, whether now existing or which may hereafter arise, which it had, has or
claims to have against them with respect to all matters relating to or arising
out of the License Agreement, except for those matters relating to or arising
out of this Agreement and those provisions of the License Agreement specified in
Section 2 hereof, which in each case shall survive termination of the License
Agreement.
Section 10. RELEASE OF LICENSEE FROM LICENSE AGREEMENT. Upon the
fulfillment by Licensor of the condition specified in Section 8 hereof, Licensor
hereby agrees to release and forever discharge Licensee and its past, present
and future officers, directors, stockholders, partners, agents, affiliates,
servants, employees and legal counsel and their successors and assigns from all
claims, actions, demands, causes of action, suits, debts, obligations, damages
and liabilities of any nature whatsoever, in law or in equity, whether known or
unknown, whether now existing or which may hereafter arise, which it had, has or
claims to have against them with respect to all matters relating to or arising
out of the License Agreement, except for those matters relating to or arising
out of this Agreement and those provisions of the License Agreement specified in
Section 2 hereof, which in each case shall survive termination of the License
Agreement.
- 5 -
Section 11. TRANSITION OF 800 NUMBER. On or prior to the Termination Date,
Licensor agrees to establish an 800 number to respond to consumer inquiries
regarding the Replens Product. Licensor agrees to accept all consumer inquiries
forwarded by Licensee to Licensor's 800 number.
Section 12. POWER AND AUTHORITY. Each party hereto represents and warrants
that such party has full power and authority to enter into this Agreement and to
perform all covenants and agreements to be performed hereunder.
Section 13. BENEFIT OF COUNSEL. Each party represents and warrants that
such party has read and reviewed this Agreement in its entirety and has sought
and obtained the benefit of full, complete and competent legal advice in
connection with this Agreement and that such party has fully understood the
meaning and intent of every provision hereof.
Section 14. BINDING AGREEMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
Section 15. ENTIRE UNDERSTANDING. This Agreement contains the entire
understanding between the parties hereto concerning the subject matter hereof
and supersedes and replaces all prior negotiations, proposed agreements and
agreements entered into by any of the parties hereto with respect to the subject
matter hereof.
Section 16. AMENDMENTS. Any and all amendments, modifications or
supplements to this Agreement must be in writing and signed by the parties
hereto. This Agreement may not be modified orally and any purported oral
modification shall not be effective.
- 6 -
Section 17. COUNTERPARTS. This Agreement may be executed in multiple
counterparts and, as long as each party has executed one counterpart, this
Agreement is enforceable.
Section 18. CONFIDENTIALITY. Each of the parties hereto hereby agrees that
the terms and conditions, as well as the substance of such terms and conditions,
of the Letter of Intent dated January 9, 1998 between the parties hereto, the
License Agreement and this Agreement, are and shall be hereafter maintained in
the strictest confidence, and shall not be disclosed or revealed by the parties
or their attorneys to anyone except attorneys and accounting firms for the
parties without the other party's prior written consent, and except as required
by any law or disclosure document required by any governmental agency,
commission or department or under compulsion of a subpoena, court order or any
governmental request or in connection with the enforcement of either party's
rights hereunder.
Section 19. PUBLICITY. The parties hereto shall coordinate the preparation
and issuance of any public announcement relating to this Agreement or the
License Agreement. Any such announcement shall comply with relevant Securities
and Exchange Commission requirements and shall take into account reasonable
concerns regarding the trade. The language of such announcement shall be
prepared by Licensor and approved in writing in advance of issuance by Licensee.
Section 20. HEADINGS. All headings contained in this Agreement are for
reference purposes only and shall not be used to interpret this Agreement.
Section 21. APPLICABLE LAW. This Agreement shall be governed by and
construed under the laws of the State of New York, without regard to principles
of
- 7 -
conflicts of law. Except in respect to any action commenced by a third party in
another jurisdiction, the parties hereto agree that any legal suit, action or
proceeding against them arising out of or relating to this Agreement shall be
brought exclusively in the State of New York. Each of the parties hereto hereby
irrevocably consents to the service of process in any action or proceeding in
such courts by the mailing thereof by United States registered or certified mail
postage prepaid to its address set forth herein.
Section 22. NOTICES. Any notice or report required to be given pursuant to
this Agreement shall be delivered in accordance with Section 25 of the License
Agreement except that the address of Licensor under Section 25 of the License
Agreement shall be deemed the address set forth on page 1 of this Agreement.
- 8 -
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the date first set forth above.
COLUMBIA LABORATORIES, INC.
By: /s/ XXXXX X. XXXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
XXXXXX-XXXXXXX COMPANY
By: /s/ S. XXXXXX XXXXXX
----------------------------
Name:
Title:
- 9 -
EXHIBIT A
Bank: Bank of New York, New York, New York
ABA Number: 021 00 00 18
Account To Be Credited: Xxxxxx-Xxxxxxx Consumer Healthcare Products Account
(Acct. No. 890 0085 142)
- 10 -
