Exhibit 10.1
SETTLEMENT AGREEMENT AND RELEASE
THIS SETTLEMENT AGREEMENT AND RELEASE (this "Settlement
Agreement") is made this August 1, 2002, by and among VIROPHARMA INCORPORATED, a
Delaware corporation ("ViroPharma"), VCO INCORPORATED, a Delaware corporation
and wholly-owned subsidiary of ViroPharma ("VCO"), and AVENTIS PHARMACEUTICALS,
INC., a Delaware corporation ("Aventis"). For convenience, each of ViroPharma,
VCO and Aventis may be referred to in this Settlement Agreement as a "Party" and
collectively as "Parties."
Background
ViroPharma and Aventis are parties to that certain Copromotion
and Codevelopment Agreement, effective as of September 9, 2001, as amended (the
"Copromotion Agreement"). ViroPharma and Aventis are also parties to that
certain Stock Purchase Agreement, dated as of September 9, 2001 (the "Stock
Purchase Agreement"). Pursuant to that certain Sublicense and Subcontract
Agreement between ViroPharma and VCO, dated December 31, 2001 (the "VCO
Subcontract Agreement"), ViroPharma subcontracted and sublicensed to VCO certain
of ViroPharma's obligations and rights under the Copromotion Agreement.
As a result of developments that have occurred since the
Effective Date of the Copromotion Agreement, the Parties have determined in good
faith to terminate such Copromotion Agreement and the Stock Purchase Agreement
without the payment of a termination fee.
In consideration of the mutual covenants and releases contained
in this Settlement Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, hereby agree as follows:
1. Certain Capitalized Terms. Capitalized terms used in this
Settlement Agreement shall have the respective meanings ascribed to such terms
in the Copromotion Agreement and in this Settlement Agreement.
2. Settlement and Termination of the Copromotion Agreement and
Stock Purchase Agreement. ViroPharma and Aventis hereby settle and resolve all
claims that they may have against each other under the Copromotion Agreement and
terminate each of the Copromotion Agreement and Stock Purchase Agreement in all
respects (including, without limitation, Sections 13.10 and 13.11 of the
Copromotion Agreement) effective as of the date of this Settlement Agreement,
and no further amounts shall be due or payable by Aventis or ViroPharma to the
other under or in connection with either or both of the Copromotion Agreement or
the Stock Purchase Agreement and neither Aventis nor ViroPharma shall have any
continuing or further obligation with respect to any representation, warranty,
obligation, covenant or agreement under either or both of the Copromotion
Agreement or the Stock Purchase Agreement except in each case as otherwise
provided in (a) Section 1 of this Settlement Agreement with respect to certain
capitalized terms, (b) Section 5 of this Settlement Agreement, and (c) Section
10(a) of this Settlement Agreement.
3. Mutual Releases.
(a) By ViroPharma. Subject to Section 3(c) of this
Settlement Agreement, ViroPharma, for itself and anyone claiming by, through or
under ViroPharma, including, without limitation, VCO, hereby knowingly and
voluntarily releases and forever discharges Aventis and its Affiliates, and
their past and present shareholders, partners, directors, officers, employees,
agents and attorneys of any of the foregoing, and the predecessors, successors,
assigns, heirs and personal representatives of any of the foregoing, and all
insurers of any of the foregoing (collectively with Aventis, the "Aventis
Parties") of and from any and all claims, duties, obligations, liabilities,
debts, demands, expenses, costs, actions, and causes of action, whether at law
or in equity, known or unknown, accrued or unaccrued, matured or unmatured,
individually or derivatively, that ViroPharma or anyone claiming by, through or
under ViroPharma had, may have, or now have under, or that might subsequently
accrue or arise out of, or concern, either or both of the Copromotion Agreement
and the Stock Purchase Agreement.
(b) By Aventis. Subject to Section 3(c) of this Settlement
Agreement, Aventis, for itself and anyone claiming by, through or under Aventis,
hereby knowingly and voluntarily releases and forever discharges ViroPharma and
its Affiliates, and their past and present shareholders, partners, directors,
officers, employees, agents and attorneys of any of the foregoing, and the
predecessors, successors, assigns, heirs and personal representatives of any of
the foregoing, and all insurers of any of the foregoing (collectively with
ViroPharma, the "ViroPharma Parties") of and from any and all claims, duties,
obligations, liabilities, debts, demands, expenses, costs, actions, and causes
of action, whether at law or in equity, known or unknown, accrued or unaccrued,
matured or unmatured, individually or derivatively, that Aventis or anyone
claiming by, through or under Aventis had, may have, or now have under, or that
might subsequently accrue or arise out of, or concern, either or both of the
Copromotion Agreement and the Stock Purchase Agreement.
(c) Exceptions. Nothing contained in this Settlement
Agreement shall settle, release, discharge or otherwise affect any of the
Parties' respective representations, warranties, obligations, agreements and
covenants under this Settlement Agreement.
4. No Admission. The entry into this Settlement Agreement by
ViroPharma and VCO, on the one hand, and Aventis, on the other hand, does not
constitute an admission by any of them as to the merit or lack of merit of any
claims brought or that could have been brought against the other or any defenses
asserted or that could have been asserted with respect thereto, nor does it
constitute an admission by any of the Parties for any other purpose. Rather,
each of the Parties is entering into this Settlement Agreement without making
any admissions, and is doing so solely to avoid the expense that would be
involved in proceeding any further with their dispute regarding the Copromotion
Agreement.
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5. Payment for ViroPharma Commercialization and Development
Expenses; Details and Calls; Accelerated Refund; and Stock Purchase.
(a) Payment for Commercialization and Development Expenses.
Notwithstanding anything to the contrary in this Settlement Agreement, Sections
8.5.1, 8.5.2, 8.5.3, 8.5.4, 8.6, 8.8, 8.9 and 8.10 of the Copromotion Agreement
shall survive the termination of the Copromotion Agreement until the date that
the Parties make final payment pursuant to Section 8.5.4 of the Copromotion
Agreement with respect to the period ending on the date of this Settlement
Agreement, and Section 8.11 shall survive until the third anniversary of this
Settlement Agreement.
(b) Detail of Aventis Product. With respect to the
continued Detailing of Aventis Products after the date of this Settlement
Agreement the following shall apply:
(i) Continued Detailing of Aventis Products.
Article 9 of the Copromotion Agreement shall survive the termination of the
Copromotion Agreement until August 31, 2002, and, for the sake of clarity,
ViroPharma shall continue to have the right and license to perform Details and
Calls with respect to the Aventis Products in accordance with the terms and
subject to the conditions set forth in Article 9 of the Copromotion Agreement
and to perform all other activities described therein (and VCO may continue to
act as ViroPharma's sublicensee and contractor under the VCO Subcontract
Agreement with respect thereto) until August 31, 2002.
(ii) Payment for Details and Calls Through August 31,
2002. Notwithstanding anything to the contrary in this Settlement Agreement,
Section 9.4.3 and 9.6.3 of the Copromotion Agreement shall survive the
termination of the Copromotion Agreement until the date that the Parties make
final payment pursuant to Sections 9.4.3 of the Copromotion Agreement with
respect to the period ending on August 31, 2002.
(iii) Manner of Payments. Aventis shall pay all
amounts to be paid to ViroPharma under this Section 5(b) in United States
Dollars by wire transfer in immediately available funds to the same bank account
to which Aventis made previous payments to ViroPharma under the Copromotion
Agreement.
(iv) Late Payments. If any payment under this Section
5(b) is not made when due, interest shall accrue on the past due amount at a
rate per annum equal to the lower of (i) the highest interest rate permitted by
applicable law and (ii) the prime rate for the first date on which such payment
was delinquent, as quoted in the "Money Rates" Section of the Wall Street
Journal, in either case, calculated on an actual/360 basis.
(v) Non-applicability of Section 9.5.2. For the sake
of clarity, ViroPharma and Aventis confirm that since the Parties agree
hereunder to terminate the Copromotion Agreement as a whole, Section 9.5.2 of
the Copromotion Agreement does not apply and that Aventis shall in any event not
be required to make a payment as described in Section 9.5.2 of the Copromotion
Agreement.
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(c) Accelerated Refund. Sections 8.1.1(a-b) of the
Copromotion Agreement are hereby implemented as if the dates written therein
were in each instance August 1, 2002 such that the aggregate amount of twenty
million U.S. dollars (U.S. $20,000,000) described in such Sections 8.1.1(a-b) is
hereby made due and payable as of the date of this Settlement Agreement.
(d) Stock Purchase. Aventis shall purchase from ViroPharma
and ViroPharma shall issue to Aventis on the date of this Settlement Agreement a
total of three million (3,000,000) fully paid and non-assessable shares of
ViroPharma's common stock, par value $0.002 per share (collectively, the
"Shares") at a price equal to $1.53 per Share, for a total of four million, five
hundred ninety thousand U.S. dollars (U.S. $4,590,000), which amount shall be
due and payable on the date of this Settlement Agreement. The Shares have been
registered on a Form S-3, File No. 333-64482, which registration statement has
been declared effective by the Securities and Exchange Commission. The Shares,
when delivered, will be free of restrictive legends. ViroPharma shall deliver a
prospectus supplement pursuant to Rule 424(b)(2) under the Securities Act of
1933, as amended, regarding the sale of the Shares prior to issuance of the
Shares to Aventis. The Shares shall be issued, and a stock certificate
evidencing the Shares delivered, to Aventis promptly following the filing of
such supplement by ViroPharma. Within forty-five (45) days after the date of
this Settlement Agreement, ViroPharma shall also file a new registration
statement on Form S-3 (or post-effective amendment to the Form S-3 referenced
above, if eligible) to enable Aventis to sell the Shares pursuant to a resale
prospectus to be included in such registration statement, pursuant to the terms
and conditions of the Registration Rights Agreement executed by ViroPharma and
Aventis simultaneously with this Settlement Agreement.
6. Confidentiality; Return/Destruction of Confidential Information.
(a) General Prohibition on Disclosure and Use. Except to
the extent expressly authorized by this Settlement Agreement, or otherwise
agreed in writing by the Parties, for a time period of ten (10) years as of the
date of this Settlement Agreement, each Party shall, and shall cause any
Affiliate to, maintain in confidence with at least the same degree of care it
uses for such Party's own confidential information, but no less than reasonable
care, and shall not use any Confidential Information (as defined in Section 6(d)
of this Settlement Agreement) of the other Party for any purpose other than
archival purposes. Each Party will promptly notify the other Party upon
discovery of any unauthorized use or disclosure of such other Party's
Confidential Information. Any breach of this obligation of confidentiality or
non-use by any Affiliate, director, officer, employee, agent, consultant, or
sublicensee of a Party or any of such Party's Affiliates shall be deemed a
breach by that Party.
(b) Permitted Disclosure and Use. Notwithstanding Section
6(a) of this Settlement Agreement, a Party may disclose Confidential Information
belonging to the other Party only to the extent such disclosure is reasonably
necessary to:
(i) enforce the provisions of this Settlement
Agreement; or
(ii) comply with any requirements of law or of any
court, or arbitration panel, or any federal, state, local or foreign
governmental body, regulator, agency, commission, bureau, or authority; or
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(iii) comply with the requirements of the SaSy
Agreement.
If a Party deems it necessary to disclose Confidential Information of the other
Party pursuant to this Section 6(b)(ii), then such Party shall give reasonable
advance notice of such disclosure to the other Party to permit such other Party
sufficient opportunity to object to such disclosure or to take measures to
ensure confidential treatment of such information.
(c) Return/Destruction of Confidential Information. Without
limitation to the other provisions of this Section 6, each Party shall either
(i) return to the other Party all Confidential Information of such other Party
or (ii) destroy all Confidential Information of the other Party and all copies
of any documents, items and materials which includes or contains any such
Confidential Information or summaries, compilations or analyses thereof and
provide the other Party with a written certified statement that all such
documents, items and materials have been so destroyed and that such Party and
its Affiliates are no longer in possession or control of any such documents,
items and materials, in each case, within thirty (30) days after the date of
this Settlement Agreement. Notwithstanding the foregoing, each Party's legal
counsel may retain one (1) copy of all Confidential Information and such
documents, items and materials solely for archival purposes.
(d) Confidential Information Defined. As used in this
Settlement Agreement, "Confidential Information" shall mean all secret,
confidential or proprietary information or data, whether provided in written,
oral, graphic, video, computer or other form, provided by one Party (the
"Disclosing Party") to the other Party (the "Receiving Party") pursuant to this
Settlement Agreement, the Copromotion Agreement, or that certain Mutual
Non-Disclosure Agreement between ViroPharma and Aventis, dated March 1, 2001
(the "March 2001 Confidentiality Agreement"), or generated pursuant to the
Copromotion Agreement, including, without limitation, information relating to
the Disclosing Party's existing or proposed research, development efforts,
patent applications, business or products, the terms of this Settlement
Agreement, the terms of the SaSy Agreement, and any other materials that have
not been made available by the Disclosing Party to the general public.
Notwithstanding the foregoing sentence, Confidential Information shall not
include any information or materials that:
(i) were already known to the Receiving Party or its
Affiliates (other than under an obligation of confidentiality), at the time of
disclosure by the Disclosing Party to the extent such Receiving Party has
documentary evidence to that effect;
(ii) were generally available to the public or
otherwise part of the public domain at the time of its disclosure to the
Receiving Party or its Affiliates;
(iii) became generally available to the public or
otherwise part of the public domain after its disclosure or development, as the
case may be, and other than through any act or omission of a Party or its
Affiliates in breach of such Party's or such Party's Affiliates confidentiality
obligations under any of the March 2001 Confidentiality Agreement, the
Copromotion Agreement or this Settlement Agreement;
(iv) were disclosed to a Party or its Affiliates,
other than under an obligation of confidentiality, by a person or entity that is
not an Affiliate of such Party or such
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Party's Affiliates who had no obligation to the Disclosing Party not to disclose
such information to others; or
(v) were independently discovered or developed by or
on behalf of the Receiving Party or its Affiliates without the use of the
Confidential Information belonging to the other Party and the Receiving Party
has documentary evidence to that effect.
7. Intellectual Work Product; Promotional Materials; Assignment.
(a) Ownership of Intellectual Work Product.
(i) ViroPharma Ownership. Notwithstanding anything
to the contrary contained in Section 10.1 of the Copromotion Agreement, Aventis
hereby acknowledges that ViroPharma owns all right, title and interest in
and to all of the Intellectual Work Product to the extent that it relates to VP
Compound or, VP Product, except for Intellectual Work Product relating to VP
Compound or VP Product developed by ViroPharma or employees or agents of
ViroPharma and not disclosed to Aventis pursuant to the Copromotion Agreement
("Undisclosed IWP"), but in any event Aventis shall not be entitled to use such
Undisclosed IWP in connection with VP Compounds or VP Products for the duration
of patent protection of such compound or product]. For clarity, Intellectual
Work Product not relating to VP Compound or VP Product.
(ii) Delivery of Intellectual Work Product to
ViroPharma. Aventis shall, within thirty (30) days after the date of this
Settlement Agreement, deliver to ViroPharma all copies and tangible embodiments
of all of the Intellectual Work Product solely owned by ViroPharma pursuant to
Section 7(a)(i), including, without limitation all documents, records,
notebooks, files, correspondence, reports, memoranda, computer tapes, computer
discs and other storage media within Aventis' or its Affiliates' possession or
control which contain any Intellectual Work Product. Aventis shall not retain
any copies of any of the Intellectual Work Product solely owned by ViroPharma
pursuant to Section 7(a)(i), except that Aventis' legal counsel may retain one
(1) copy of the Intellectual Work Product solely for archival purposes.
(b) Ownership and Return of Promotional Materials.
(i) ViroPharma Ownership. Notwithstanding anything
to the contrary contained in Section 10.4 of the Copromotion Agreement, Aventis
hereby acknowledges that ViroPharma owns all right, title and interest in and to
all of the Promotional Materials.
(ii) Delivery of Promotional Materials to ViroPharma.
Aventis shall, within thirty (30) days after the date of this Settlement
Agreement, deliver to ViroPharma at least one copy of all Promotional Materials,
communication materials, marketing plans and reports and other materials related
to the promotion of VP Product, that Aventis or its Affiliates have in their
possession on the date of this Settlement Agreement and shall confirm that it
has destroyed all other copies thereof.
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(iii) Return of Promotional Materials relating to
Aventis Products. ViroPharma shall, by October 1, 2002, return to Aventis all
promotional materials, communication materials, marketing plans and reports and
other materials related to the Aventis Products or the Detailing of Aventis
Products and that are still in ViroPharma's possession as of September 1, 2002,
except that ViroPharma and/or VCO shall be entitled to retain for accounting
purposes one copy of any such materials, plans or reports related to amounts
billed to Aventis for Details and Calls performed by ViroPharma or VCO under the
Copromotion Agreement or this Settlement Agreement.
(c) Assignment of Certain Intellectual Work Product and
Promotional Materials. Aventis hereby irrevocably assigns and transfers to
ViroPharma all of Aventis' right, title, goodwill, and interest in and to (i)
all of the Intellectual Work Product that shall be in ViroPharma's sole
ownership pursuant to Section 7(a)(i) above (whether reduced to a written form
or otherwise and whether or not patentable and without regard to form or
medium), and (ii) all of the Promotional Materials, in each case, together with
all copies and tangible embodiments thereof, under all United States and foreign
copyright, patent, trade secret and trademark laws and all other United States
and foreign laws providing for the protection of intellectual property or
similar rights. Aventis shall, at ViroPharma's expense, assist ViroPharma in
acquiring and maintaining copyright, patent, trade secret, trademark, and other
analogous intellectual property protection upon, and confirming ViroPharma's
title to, the Intellectual Work Product and Promotional Materials. Aventis'
assistance shall include, without limitation, signing all applications and any
other documents and instruments, cooperating in legal proceedings and taking
such other actions as ViroPharma considers reasonably necessary or desirable to
effectuate more fully the intents and purposes of this Section 7. In the event
Aventis does not cooperate on or sign any of the documents referenced in the
preceding sentence, or provide a explanation for not doing so within a
reasonable period, in no event to exceed forty-five (45) business days, after
ViroPharma's request therefor, Aventis hereby designates and appoints ViroPharma
and its duly authorized officers and agents as Aventis' agent and
attorney-in-fact, to act for and in its behalf and stead to execute and file any
such documents and to do all other lawfully permitted acts to further the
prosecution and issuance of any such copyright, patent, trade secret, trade
xxxx, or other analogous protection, with the same legal force and effect as if
executed by Aventis. The foregoing power of attorney is coupled with an interest
and shall be irrevocable
8. Return of Samples.
(a) VP Product. Within thirty (30) days after the date of
this Settlement Agreement, Aventis shall return to ViroPharma, or otherwise
dispose of in accordance with instructions from ViroPharma, all remaining VP
Product and Samples of VP Product and provide ViroPharma with a written
certified statement that all such remaining samples have either been returned or
properly disposed of and that Aventis and its Affiliates are no longer in
possession or control of any such VP Product or samples in any form or fashion.
(b) Aventis Product. By August 31, 2002, ViroPharma shall
have the ViroPharma and/or VCO sales representatives conduct a physical
inventory of Samples of Aventis Product, the results of which shall be
transmitted to Aventis by September 3, 2002. ViroPharma shall conduct a
reconciliation of all Aventis Product, and Samples of Aventis
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Product held by ViroPharma or VCO, or the employees of ViroPharma or VCO, as
applicable, on August 31, 2002. By September 30, 2002, ViroPharma shall have
audited any sales representative whose inventory reconciliation falls outside
Aventis' sample variance tolerances and shall provide the results of such
reconciliation and audit to Aventis. ViroPharma shall return to Aventis, or
otherwise dispose of in accordance with instructions from Aventis, all Aventis
Product and Samples of Aventis Product in the possession of ViroPharma or VCO or
the employees of ViroPharma or VCO as of September 1, 2002, by September 16,
2002, and provide Aventis with a written certified statement that all such
remaining Samples have either been returned or properly disposed of and that
ViroPharma and VCO are no longer in possession or control of any such Aventis
Product or Samples of Aventis Products in any form or fashion.
9. Representations and Warranties.
(a) By ViroPharma and VCO. ViroPharma and VCO, as
applicable, hereby represent and warrant to Aventis as follows:
(i) Existence; Good Standing. Each of ViroPharma and
VCO is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has full corporate power and authority and
legal right to execute, deliver and perform this Settlement Agreement.
(ii) Due Authorization; Noncontravention. Each of
ViroPharma's and VCO's execution, delivery and performance of this Settlement
Agreement has been duly authorized by all corporate action required to be taken
on the part of ViroPharma and VCO, as applicable, and will not violate, conflict
with or result in a default (with or without notice or lapse of time or both)
under (A) ViroPharma's or VCO's charter or bylaws, as applicable, (B) any law,
rule or regulation applicable to ViroPharma or VCO or any of their respective
properties, as applicable, (C) any provision of any order, injunction, judgment
or decree of any court or governmental instrumentality entered against or
binding upon ViroPharma or VCO or any of their respective properties, as
applicable, or (D) any material mortgage, indenture, contract or agreement or
instrument to which ViroPharma or VCO, as applicable, is a party or by which
ViroPharma or VCO or any of their respective properties, as applicable, is
legally bound.
(iii) Enforceability. This Settlement Agreement is a
legal, valid and binding obligation of ViroPharma and VCO, as applicable,
enforceable against ViroPharma and VCO, as applicable, in accordance with its
terms.
(iv) Ownership of Released Claims. Neither ViroPharma
nor VCO has assigned any part of the claims subject to the settlement and
releases provided for by ViroPharma and VCO in this Settlement Agreement, and no
party that is not bound by this Settlement Agreement owns any interest in any of
such claims.
(v) Disclosure of Material Intellectual Work
Product. ViroPharma does not have in its possession any material Intellectual
Work Product that it has not disclosed to Aventis under the Copromotion
Agreement, and ViroPharma has complied with its
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obligations under the Copromotion Agreement to disclose material Intellectual
Work Product to Aventis.
(b) By Aventis. Aventis hereby represents and warrants to
Aventis as follows:
(i) Existence and Good Standing. Aventis is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full corporate power and authority and legal
right to execute, deliver and perform this Settlement Agreement.
(ii) Due Authorization; Noncontravention. Aventis'
execution, delivery and performance of this Settlement Agreement has been duly
authorized by all corporate action required to be taken on the part of Aventis
and will not violate, conflict with or result in a default (with or without
notice or lapse of time or both) under (A) Aventis' charter or bylaws, (B) any
law, rule or regulation applicable to Aventis or any of its properties, (C) any
provision of any order, injunction, judgment or decree of any court or
governmental instrumentality entered against or binding upon Aventis or any of
its properties, or (D) any material mortgage, indenture, contract or agreement
or instrument to which Aventis is a party or by which Aventis or any of its
properties is legally bound.
(iii) Enforceability. This Settlement Agreement is a
legal, valid and binding obligation of Aventis, enforceable against Aventis in
accordance with its terms.
(iv) Ownership of Released Claims. Aventis has not
assigned any part of the claims subject to the settlement and releases provided
for by Aventis in this Settlement Agreement, and no party that is not bound by
this Settlement Agreement owns any interest in any of such claims.
(v) Intellectual Work Product; Promotional
Materials.
(A) Aventis does not have in its possession any
material Intellectual Work Product that it has not disclosed to ViroPharma under
the Copromotion Agreement, and Aventis has complied with its obligations under
the Copromotion Agreement to disclose material Intellectual Work Product to
ViroPharma.
(B) Aventis owns and has good and valid title to
Aventis' interest in the Intellectual Work Product that shall be solely owned by
ViroPharma pursuant to Section 7(a)(i) above and in the Promotional Materials,
free and clear of all encumbrances. Neither Aventis nor any of Aventis'
Affiliates has filed any patent, copyright or trademark registrations with
respect to, or applications to register, any of the Intellectual Work Product or
any of the Promotional Materials in any country or jurisdiction.
(c) Survival of Representations and Warranties. The
respective rights of the Parties to assert any claim for indemnification under
Section 10(b)(i) and Section 10(c)(i) of this Settlement Agreement for breach
of any of the representations and warranties of the other Party contained in
this Section 9 shall survive the execution and delivery of this Settlement
Agreement for a period (the "Survival Period") beginning on the date of this
Settlement
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Agreement and ending on the thirtieth (30/th/) day after the expiration of the
statute of limitations applicable to the subject matter addressed under the
relevant representation and warranty (the "Survival Period"), and thereafter
shall terminate and expire, except with respect to liabilities for any item as
to which, on or before the close of business on the last day of the Survival
Period, a Party shall have asserted a claim in writing against the other Party,
in which case, the liability for such claim shall continue until it shall have
been finally settled or adjudicated.
10. Indemnification.
(a) Indemnification of Pre-Termination Third Party Claims.
Sections 15.1, 15.2, 15.3, 15.4, and 15.6 of the Copromotion Agreement, shall
survive the termination of the Copromotion Agreement solely with respect to
claims brought by parties other than ViroPharma, Aventis, or either of their
Affiliates, except for any such claims relating to VP Compound or VP Product
brought by SaSy, its successors or assigns, based on events occurring before the
date of this Settlement Agreement.
(b) Indemnification by ViroPharma and VCO. ViroPharma and
VCO shall indemnify and hold harmless Aventis and any of Aventis' Affiliates and
each of their respective shareholders, directors, officers, agents and employees
(collectively, "Aventis Indemnified Persons") from and against any and all
losses, costs, claims, liabilities, demands, fines, judgments, penalties,
damages and expenses, including reasonable attorneys' fees and expenses
(collectively, the "Losses") that the Aventis Indemnified Person may be required
to pay one or more persons or entities other than any Aventis Affiliate arising
out of or resulting from:
(i) any breach of any of the representations or
warranties made by ViroPharma and VCO, respectively, in Section 9(a) of this
Settlement Agreement;
(ii) any breach by ViroPharma or VCO, respectively,
of any of the covenants or agreements made by ViroPharma and VCO in this
Settlement Agreement[;
(iii) VP Compound or VP Product in any way, including,
without limitation, claims relating to death or personal injury;
(iv) any material misrepresentation or failure to
disclose information concerning the development or commercialization of VP
Compound or VP Product by ViroPharma;
except, in each case, to the extent caused by the negligence, recklessness, or
willful misconduct of an Aventis Indemnified Person.
(c) Indemnification by Aventis. Aventis shall indemnify and
hold harmless ViroPharma and VCO and any of ViroPharma's and VCO's respective
Affiliates and each of their respective shareholders, directors, officers,
agents and employees (collectively, "ViroPharma Indemnified Persons") from and
against any and all Losses that the ViroPharma Indemnified Person may be
required to pay one or more persons or entities other than any ViroPharma
Affiliate arising out of or resulting from:
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(i) any breach of any of the representations or
warranties made by Aventis, respectively, in Section 9(b) of this Settlement
Agreement;
(ii) any breach by Aventis of any of the covenants or
agreements made by Aventis in this Settlement Agreement;
(iii) Aventis Product in any way, including, without
limitation, claims relating to death or personal injury; and
(iv) any infringement of any issued patents based on
the use or Detailing of Aventis Product;
except, in each case, to the extent caused by the negligence, recklessness, or
willful misconduct of a ViroPharma Indemnified Person.
(d) Procedures.
(i) After receipt by any Aventis Indemnified Party
or any ViroPharma Indemnified Party, as applicable (the "Indemnified Party") of
any claim in respect of which such Indemnified Party will seek indemnification
from the Party required to provide such indemnification under this Section 10
(the "Indemnifiying Party"), the Indemnified Party must, as a condition to the
Indemnified Party's right to indemnification under this Section 10, provide
prompt written notice thereof to the Indemnifying Party (the "Claim Notice");
provided that any delay in providing such Claim Notice shall not relieve the
Indemnifiying Party from any liability that it may have to the Indemnified Party
under this Section 10 except to the extent that the Indemnified Party is
materially prejudiced by such delay. The Claim Notice shall (A) specify in
reasonable detail and in good faith the nature of the claim, (B) specify the
amount or in good faith the estimate of the Losses being asserted and (C) state
the basis under this Settlement Agreement for seeking such indemnification. In
no event (whether or not the Indemnified Party is controlling the defense,
compromise or settlement of such claim) will the Indemnified Party admit any
responsibility or liability with respect to any such claim and the Indemnifying
Party shall have no liability to the Indemnified Party with respect to such
claim if the Indemnified Party makes any such admission.
(ii) Subject to Section 10(d)(iii) and Section
10(d)(iv) of this Settlement Agreement, the Indemnifying Party may undertake the
defense, compromise and settlement of such claim by representatives of its own
choosing reasonably acceptable to the Indemnified Party. The assumption of the
defense, compromise and settlement of any such claim by the Indemnifying Party
shall not be an acknowledgment of the obligation of the Indemnifying Party to
indemnify such Indemnified Party with respect to such claim. If the Indemnified
Party desires to participate in, but not control, any such defense, compromise
and settlement, it may do so at its sole cost and expense. The Indemnified Party
shall have the right to undertake the defense, and, subject to Section
10(d)(iii) and Section 10(d)(iv) of this Settlement Agreement, compromise and
settlement of such claim with counsel of its own choosing, and the costs and
expenses of the Indemnified Party in connection therewith shall be included as a
part of the indemnification obligations of the Indemnifying Party under this
Section
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10, unless the Indemnifying Party, within thirty (30) days (or in the case of
litigation, fifteen (15) days) after written notice of such claim has been given
to the Indemnifying Party by the Indemnified Party, both: (i) expressly
acknowledges in writing to the Indemnified Party that that, as between the
Indemnified Party and the Indemnifying Party, the Indemnifying Party shall be
solely obligated to satisfy or discharge the obligations set forth in the Claim
Notice, and (ii) takes all reasonable and appropriate steps to affirmatively
undertake the defense of such claim.
(iii) Notwithstanding the provisions of Section
10(d)(ii) of this Settlement Agreement to the extent that (A) any claim or the
litigation or resolution thereof (x) seeks an equitable remedy, or (y) is
asserted against both the Indemnifying Party and the Indemnified Party and the
Indemnified Party reasonably concludes that there are defenses available to
Indemnified Party which are different or additional to those of the Indemnifying
Party, or (B) upon petition by the Indemnified Party, an appropriate court rules
that the Indemnifiying Party failed or is failing to defend such claim
diligently, then the Indemnified Party shall have the right to control the
defense, and subject to Section 10(d)(iv) of this Settlement Agreement, the
compromise and settlement of such claim and the costs and expenses of the
Indemnifying Party in connection therewith shall be included as part of the
indemnification obligations of the Indemnifying Party under this Section 10. If
the Indemnified Party elects to exercise such right, then the Indemnifying Party
shall have the right to participate in, but not control, the defense, compromise
and settlement of such claim at the Indemnifying Party's sole cost and expense.
(iv) Neither the Indemnified Party nor the
Indemnifying Party shall settle or compromise any such claim, regardless of
whether it is controlling the defense, settlement or compromise thereof without
the prior written consent of the other (which consent shall not be unreasonably
withheld, delayed or conditioned).
(v) At the expense of the Indemnifying Party, the
Indemnifying Party and the Indemnified Party shall cooperate with and render to
each other such assistance as may reasonably be requested in order to insure the
proper and adequate defense of any such claim or proceeding which assistance
shall include making appropriate personnel reasonably available for any
investigation, discovery, hearing or trial.
11. Miscellaneous.
(a) Expenses. Each of the Parties shall each pay their own
respective fees, expenses and disbursements, including the fees and expenses of
their respective counsel, accountants and other experts, in connection with the
subject matter of this Settlement Agreement and all other costs and expenses
incurred in performing and complying with all obligations to be performed under
this Settlement Agreement.
(b) Specific Performance. Without limiting the rights and
remedies available to the respective Parties, whether under this Settlement
Agreement, at law, in equity or otherwise, all of which shall be cumulative,
each Party acknowledges that damages at law will be an insufficient remedy in
view of the irrevocable harm which will be suffered if such Party violates such
Party's covenants and obligations under this Settlement Agreement, and such
Party
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agrees that the other Parties may apply in any court of competent jurisdiction
for, and shall be entitled as a matter of right to, injunctive relief
specifically to enforce any of such obligations upon the breach or threatened
breach of any such provision.
(c) Publicity.
(i) The Parties will consult with each other and
provide the other with the opportunity to review the portions of any completed
proposed press release or other written public statement, other than the Press
release agreed among the Parties and issued on August 1, 2002, concerning any
terms or conditions of this Settlement Agreement or the transactions
contemplated hereunder before issuing such press release or making such public
statement unless such consultation is not timely feasible in light of the
requirements of applicable law or any applicable stock exchange or NASDAQ
regulations, and no Party shall issue any such press release or make any such
public statement regarding any of the terms of conditions of this Settlement
Agreement or the transactions contemplated by this Settlement Agreement without
the consent of the other Party, except as may be required by applicable law or
any applicable stock exchange or NASDAQ regulations.
(ii) Aventis acknowledges that ViroPharma will file
this Settlement Agreement with the Securities and Exchange Commission (the
"SEC") and agrees that such filing shall not be a breach of this Settlement
Agreement.
(iii) Aventis acknowledges that ViroPharma will
provide a copy of this Settlement Agreement to SaSy and agrees that ViroPharma
will not be in breach of this Settlement Agreement by doing so.
(d) Voluntary Act; No Reliance. Each of the Parties is
entering into this Settlement Agreement voluntarily, without duress or undue
influence. Each of the Parties acknowledges that (i) such Party has been
represented in the negotiations for, and in the preparation of this Settlement
Agreement by counsel or other professionals of their own respective choice, (ii)
such Party has read this Settlement Agreement and has had this Settlement
Agreement fully explained to it by such counsel or professionals, (iii) that
such Party is fully aware of the contents of this Settlement Agreement and of
this Settlement Agreement's legal effect; and (iv) such Party is not relying
upon and has not relied upon any representations, warranties and statements made
by any of the other Parties in connection with such Party's execution, delivery
and performance of this Settlement Agreement other than the representations,
warranties and statements expressly made by such other Party in Section 9(a)
and Section 9(b) of this Settlement Agreement.
(e) Amendment, Severability, Parties in Interest. This
Settlement Agreement may be amended, modified or supplemented only by a written
instrument duly executed by each of the Parties. If any provision of this
Settlement Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof, and this Settlement Agreement shall
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be construed as if such invalid, illegal or unenforceable provision had never
been contained herein. This Settlement Agreement shall be binding upon and inure
to the benefit of and be enforceable by the successors and assigns of the
Parties. Nothing in this Settlement Agreement, express or implied, is intended
to confer on any Person other than: (i) the Parties, (ii) the Aventis Parties
with respect to ViroPharma's release under Section 3(a) of this Settlement
Agreement, (iii) the Aventis Indemnified Parties with respect to ViroPharma's
and VCO's indemnification obligations under Section 10 of this Settlement
Agreement, (iii) the ViroPharma Parties with respect to Aventis' release under
Section 3(b) of this Settlement Agreement, and (iv) the ViroPharma Indemnified
Parties with respect to Aventis' indemnification obligations under Section 10 of
this Settlement Agreement, and or their respective successors and assigns,
heirs, administrators and personal representatives, any rights, remedies,
obligations or liabilities under or by reason of this Settlement Agreement.
(f) Waivers. Any term or provision of this Settlement
Agreement may be waived at any time by the Party entitled to the benefit thereof
by a written instrument expressly stated to be a waiver and duly executed by
such Party. The failure of any Party at any time or times to require performance
of any provision of this Settlement Agreement shall in no manner affect the
right of such Party at a later time to enforce the same or any other provision
of this Settlement Agreement. The waiver of any condition or of the breach of
any provision of this Settlement Agreement in one or more instances shall not
operate or be construed as a waiver of any other condition or subsequent breach.
(g) Notices. All notices that are required or permitted
under this Settlement Agreement shall be in writing and shall be deemed
sufficiently given if: (i) sent by registered or certified mail, return receipt
requested, proper postage prepaid, (ii) by reputable overnight delivery service,
proper charges prepaid, or (iii) by facsimile (with a copy sent by any of the
methods of delivery described in clauses (i) or (ii) above within twenty-four
(24) hours after sending by facsimile). Any notices shall be deemed received (A)
the third business day after the date when sent by registered or certified mail,
return receipt requested, (B) the business day after the date when sent by
reputable overnight delivery service, and (C) the day sent when sent by
facsimile (provided, that the Party sending the notice by facsimile sends such
notice pursuant to any of the methods of delivery described in clauses (i) or
(ii) above with twenty-four (24) hours after sending by facsimile), in each
case, to the address set forth below, unless such address is changed by notice
given in accordance with this Section 11(g):
If to ViroPharma or VCO, ViroPharma Incorporated
to: 000 Xxxxxxxxx Xxxxxxxxx
Xxxxx, XX 00000
Facsimile No.: 000-000-0000
Attention: Vice President and General Counsel
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If to Aventis, to: Aventis Pharmaceuticals Inc.
000 Xxxxxxxx Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxxxx, XX 00000-0000, X.X.X.
Facsimile: 000-000-0000
Attention: Vice President, Legal Corporate
Development
(h) Entire Agreement. This Settlement Agreement (including
the Schedules to this Settlement Agreement), sets forth the entire agreement and
understanding of the Parties hereto with respect to the matters set forth in
this Settlement Agreement and supersedes all prior agreements or understandings,
oral and written, among the Parties or otherwise with respect to such matters.
(i) Governing Law. This Settlement Agreement shall be
governed by and construed in accordance with the law of the Commonwealth of
Pennsylvania, without regard to the conflict of law principles of Pennsylvania
or any other jurisdictions.
(j) Counterparts. This Settlement Agreement may be executed
in two or more counterparts, each of which shall be binding as of the date first
written above, and all of which shall constitute one and the same instrument.
Each such copy shall be deemed an original, and it shall not be necessary in
making proof of this Settlement Agreement to produce or account for more than
one such counterpart. This Settlement Agreement shall not be effective unless
and until it has been signed by each of the Parties hereto.
(k) Offset. Except for any amounts due by a Party hereto
pursuant to Sections 5(a-b) and any indemnification due for third party claims,
including, without limitation, those provided for in Section 10 of this
Settlement Agreement,
(i) Aventis shall be entitled to offset any amounts
due to VCO against any amounts due from VCO or ViroPharma and offset any amounts
due to ViroPharma against any amounts due from VCO or ViroPharma, and
(ii) VCO and ViroPharma shall each be entitled to
offset any amounts due to Aventis against any amounts due from Aventis.
[Signature Page Follows]
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Exhibit 10.1
IN WITNESS WHEREOF, the Parties have caused their respective duly
authorized representatives to execute this Settlement Agreement on the date
first written above.
VIROPHARMA INCORPORATED
By: /s/ Xxxxxx xx Xxxxx
----------------------------------------
Xxxxxx xx Xxxxx
President, CEO & Chairman of the Board
VCO INCORPORATED
By: /s/ Xxxxxx xx Xxxxx
----------------------------------------
Xxxxxx xx Xxxxx
President
AVENTIS PHARMACEUTICALS, INC.
By: /s/ Xxxxx Belle
----------------------------------------
Xxxxx Belle
President and Chief Executive Officer
[Signature Page to Settlement Agreement and Release]
