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EXHIBIT 10.1
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
DISTRIBUTION AND LICENSE AGREEMENT
THIS AGREEMENT, dated as of July 19, 1999 (the "Effective Date") by
and between WOMEN FIRST HEALTHCARE, INC., a Delaware corporation having its
principal place of business at 00000 Xx Xxxxxx Xxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxxxxxx 00000 ("WFHC"), and LABORATOIRES XXXXXXXX X.X., a French
corporation having its principal place of business at 00 xxx xx Xxxxxxx, 00000
Xxxxxxx, Xxxxxx ("Xxxxxxxx"),
W I T N E S S E T H:
WHEREAS, WFHC is in the business of, inter alia, developing, marketing,
distributing and selling medical, consumer and educational products; and
WHEREAS, Xxxxxxxx or its Affiliates (as hereinafter defined) own rights
in and to certain Products (as hereinafter defined); and
WHEREAS, WFHC desires to license from Xxxxxxxx, and Xxxxxxxx desires to
license to WFHC, certain rights to the Products in the Territory (as hereinafter
defined);
NOW, THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto mutually agree as follows:
Article 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Section shall
have the meanings specified below:
1.1 "Affiliate" shall mean any corporation or other entity which
controls, is controlled by, or is under common control with a party. A
corporation or other entity shall be regarded as in control of another
corporation or entity if it owns or directly or indirectly controls more than
fifty percent (50%) of the voting stock or other ownership interest of the other
corporation or entity, or if it possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the corporation
or other entity or the power to elect or appoint fifty percent (50%) or more of
the members of the governing body of the corporation or other entity.
1.2 "Average Floor Price" shall mean the amount in euro calculated by
(i) multiplying the Floor Price of each Product form by the number of patches of
that form sold by Seller during the last calendar quarter, (ii) adding together
the multiplication results, and (iii) dividing the total by the aggregate number
of patches
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sold by Seller during said calendar quarter. Any Product form for which no Floor
Price shall have been determined yet shall not be considered in this
calculation.
1.3 "Change of Control" shall mean, with respect to a party, any event
resulting in a change of the corporation, person or entity that controls such
party according to any of the control criteria set forth in Section 1.1 above.
1.4 "CST" shall mean Cross Site Technologies SA, an Affiliate of
Xxxxxxxx as of the date hereof.
1.5 "Discount" shall mean a reduction in the price of the Samples, such
reduction being * * * for the first Sales Year, * * * for the second Sales Year,
and * * * for the third Sales Year.
1.6 "Distributor" shall mean an entity to whom WFHC has contracted out
distribution of the Product.
1.7 "Estimated Net Selling Price" shall, for each Product form, mean the
Net Selling Price for the most recent calendar quarter as available to both WFHC
and Xxxxxxxx.
1.8 "FDA" shall mean the US Food and Drug Administration or any
successor thereto.
1.9 "First Commercial Sale" shall mean the first sale of a Product
form by Seller to an independent customer.
1.10 "Floor Price" shall have the meaning set forth in Section 3.3
hereof.
1.11 "Initial Purchase Order" shall mean WFHC's first purchase order for
the Product attached hereto as Appendix 2. The "delivery dates" therein
specified shall mean the dates Xxxxxxxx ships the Product.
1.12 "Minimal Amount" shall have the meaning set forth in Section 3.7
hereof.
1.13 "NDC number" or "National Drug Code number" shall mean the complete
identifying drug number maintained by the FDA, including labeler code, product
code and package size code.
1.14 "Net Sales" shall mean the gross invoiced sales of the Product
billed to independent customers by Seller, less, to the extent such amounts are
included in the invoiced sales price, actual credited allowances to such
independent customers for the Product which was spoiled, damaged or returned and
less actual (a) freight, postage, shipping and insurance costs incurred in
transporting such Product to such customers (but only to the extent that said
costs are separately delineated in Seller's
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applicable invoice); (b) customary quantity and other trade discounts, rebates
and chargebacks actually allowed and taken in connection with the Product; (c)
VAT and other sales taxes assessed on the royalty-bearing sale of the Product;
provided that the aggregate of any deductions made pursuant to subparagraphs (a)
and (b) above shall never exceed * * * of said gross invoiced sales on an annual
basis.
1.15 "Net Selling Price" shall mean, with respect to any calendar
quarter, and for each dosage form of the Product, the Net Sales for such period
divided by the number of units sold during such period.
1.16 "Patent Rights" shall mean all patent applications heretofore or
hereafter filed or having legal force in the Territory owned by or licensed to
Xxxxxxxx or to which Xxxxxxxx otherwise acquires rights, which claim a Product
or the process of manufacture or use of a Product, together with any and all
patents that have issued or in the future issue therefrom, including utility
model and design patents, extensions or restorations, certificates of invention
and any and all divisions, continuations, continuations-in-part, reissues or
additions to any of the aforesaid patents and patent applications; all to the
extent and only to the extent that Xxxxxxxx now has or hereafter will have the
right to grant licenses, immunities or other rights thereunder.
1.17 "Placebo Sample" shall mean a Sample for demonstration purposes
which contains no estradiol.
1.18 "Product(s)" shall mean the Esclim(TM) estrogen transdermal system,
consisting of a twice weekly patch in strengths of 25(mu)g/24h, 37.5(mu)g/24h,
50(mu)g/24h, 75(mu)g/24h and 100(mu)g/24h, as currently approved by the FDA,
together with any new dosage form thereof and a seven-day Esclim(TM) patch
(provided that Xxxxxxxx makes no representation and gives no warranty that such
new forms or seven-day patch will be developed and FDA-approved), but excluding
any * * *.
1.19 "Quality Assurance Agreement" shall have the meaning set forth in
Section 7.4 hereof.
1.20 "Sample" shall mean a unit of Product that is not intended to be
sold but is intended to promote the sale of such Product.
1.21 "Sales Year" shall mean a period of twelve months commencing on
the first day of the first full calendar month following the First Commercial
Sale of the first form of Product, or on an anniversary thereof.
1.22 "Seller" shall mean WFHC or any WFHC Affiliate, sublicensee or
Distributor.
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1.23 "Shipping Costs" shall mean the cost of shipping the Product from
Xxxxxxxx'x storage facility in Xxxxxxxx-les-Dijon, France to WFHC's distribution
facility in Newark, Delaware, i.e. the freight and freight insurance costs and
the fees and expenses of Xxxxxxxx'x forwarding agent.
1.24 "Term" shall mean seven (7) years from the later of (i) the date
of the First Commercial Sale of the first form of the Product, or (ii) January
1, 2000.
1.25 "Territory" shall mean the United States of America, including
its territories and possessions and the Commonwealth of Puerto Rico.
1.26 "Valid Patent Claim" shall mean either (a) a claim of an issued
and unexpired patent included within the Patent Rights, which has not been held
permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted by the patent
holder to be invalid or unenforceable through reissue or disclaimer or otherwise
or (b) a claim of a pending patent application included within the Patent
Rights, which claim was filed in good faith and has not been abandoned or
finally disallowed without the possibility of appeal or refiling of said
application.
Article 2. REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Xxxxxxxx.
(a) Corporate Power. Xxxxxxxx is duly organized, validly existing and in
good standing under the laws of its place of incorporation and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof.
(b) Due Authorization. Xxxxxxxx is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder. The person
executing this Agreement on Xxxxxxxx' behalf has been duly authorized to do so
by all requisite corporate action.
(c) Binding Agreement; No Conflicts. This Agreement is a legal and valid
obligation binding upon Xxxxxxxx and enforceable in accordance with its terms.
The execution, delivery and performance of this Agreement by Xxxxxxxx does not
conflict with any agreement, instrument or understanding, oral or written, to
which it is a party or by which it may be bound, nor violate any material law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it. Xxxxxxxx is not a party to any contract the terms
of which would conflict with the terms of this Agreement or under which a
default or violation would arise as a result of the execution, entering into or
performance of this Agreement. Xxxxxxxx has not
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currently granted any third party any rights which would conflict with the
rights granted to WFHC hereunder.
(d) Validity. Xxxxxxxx is aware of no action, suit or inquiry or
investigation instituted by any governmental agency which questions or threatens
the validity of this Agreement.
(e) Consents. No consent, approval, waiver or other action by any person
under any contract, agreement, indenture, lease, instrument or other document to
which Xxxxxxxx is a party or by which it is bound is required or necessary for
the execution, delivery and performance of this Agreement by Xxxxxxxx or the
consummation of the transactions contemplated hereby.
(f) Patents and other Proprietary Assets.
(i) To the best of its knowledge, Xxxxxxxx (1) owns or has the
right to use, free and clear of all liens, claims and restrictions, all patents,
patent applications, trademarks, service marks, trade names, inventions, trade
secrets, copyrights, licenses and rights with respect to the foregoing, used in
or necessary for the transaction proposed to be conducted by it under this
Agreement, (2) in France and the Territory is not infringing and will not during
the Term infringe on the right or claimed right of any person or entity under or
with respect to any patent, trademark, service xxxx, trade name, invention,
trade secret, copyright, license or other intellectual property or right with
respect thereto.
(ii) To the best of Xxxxxxxx'x knowledge, Xxxxxxxx or its
Affiliates own and have the unrestricted right to use all Product rights,
manufacturing rights, trade secrets, know-how, methods, techniques, processes,
inventions, designs, computer programs and technical data and all information
from which independent economic value is derived, not being substantially
available to the public or known by competitors and which Xxxxxxxx has taken
reasonable steps to maintain in secret (all of the foregoing of which are
collectively referred to herein as "intellectual property") required for the
transactions to be conducted by it under this Agreement, free and clear of any
material right, lien or claim of others.
(iii) Since their organization, Xxxxxxxx and CST have taken (and
will hereafter take) reasonable security measures to protect the secrecy,
confidentiality and value of all intellectual property developed and the rights
granted to WFHC hereunder.
(iv) As of the date hereof, Xxxxxxxx is not aware that any of
Xxxxxxxx'x employees, advisors or consultants who have knowledge of intellectual
property or portion thereof is or will be in violation of his or her
confidentiality agreement or duty, and Xxxxxxxx shall use reasonable efforts to
prevent any such violation. Xxxxxxxx is not aware that any of Xxxxxxxx'
employees or consultants is obligated under any contract (including licenses,
covenants or commitments of any
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nature) or other agreement, or subject to any judgment, decree or other of any
court or administrative agency, that would conflict with the transactions
contemplated by this Agreement.
(v) Xxxxxxxx has not currently granted, and will not grant, any
license or right to use its proprietary information or intellectual property
inconsistent with WFHC's rights hereunder.
(g) Product. Xxxxxxxx warrants (a) that in manufacturing or causing CST
to manufacture the Product it or CST, as the case may be, will comply with all
manufacturing instructions and the specification set forth in the New Drug
Application filed for the Product with the United States Food and Drug
Administration (the "FDA"); (b) that the Product will be produced in
accordance with such instructions and specifications and in compliance with the
Good Manufacturing Practices and Quality System Regulations of the FDA and other
applicable laws, rules and regulations; and (c) that the Product being delivered
will comply with said specification, will not be adulterated or misbranded, will
not have been misused, contaminated, tampered with or otherwise altered,
mishandled, subjected to negligence, and will have not less than the minimal
shelf life stated in Articles 3.5 and 3.6 hereof.
2.2 Representations and Warranties of WFHC.
(a) Corporate Power. WFHC 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 to enter into this Agreement and carry out
the provisions hereof.
(b) Due Authorization. WFHC is duly authorized to execute and deliver
this Agreement and to perform its obligations hereunder. The person executing
this Agreement on WFHC's behalf has been duly authorized to do so by all
requisite corporate action.
(c) Binding Agreement. No Conflicts. This Agreement is a legal and valid
obligation binding upon WFHC, and enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by WFHC does not conflict
with any agreement, instrument or understanding, oral or written, to which it is
a party or by which it may be bound, nor violate any material law or regulation
of any court, governmental body or administrative or other agency having
jurisdiction over it. WFHC is not a party to any contract the terms of which
would conflict with the terms of this Agreement or under which a default or
violation would arise as a result of the execution, entering into or performance
of this Agreement. WFHC has not accepted from any third party any obligation
which would conflict with the obligations taken by WFHC hereunder, nor has WFHC
granted any third party any right so conflicting.
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(d) Validity. WFHC is aware of no action, suit or inquiry or
investigation instituted by any United States federal or state governmental
agency which questions or threatens the validity of this Agreement.
(e) Consents. No consent, approval, waiver or other action by any person
under any contract, agreement, indenture, lease, instrument or other document to
which WFHC is a party or by which it is bound is required or necessary for the
execution, delivery and performance of this Agreement by WFHC or the
consummation of the transactions contemplated hereby.
2.3 Disclaimer of Warranties. EXCEPT AS SPECIFICALLY SET FORTH HEREIN,
NEITHER PARTY MAKES ANY REPRESENTATIONS OR GIVES ANY WARRANTY, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. EXCEPT AS A RESULT OF A BREACH OF ARTICLE 6 HEREOF,
NEITHER PARTY TO THIS AGREEMENT SHALL BE ENTITLED TO RECOVER FROM THE OTHER ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES.
Article 3. LICENSE; ROYALTIES AND OTHER CONSIDERATION
3.1 License Grants to WFHC. (a) Xxxxxxxx hereby grants to WFHC, and WFHC
hereby accepts, an exclusive (subject to Sections 3.11 and 3.12 hereof),
unrestricted (save as provided herein), irrevocable (except as provided in
Section 3.9 and Article 9 hereof) license, without the right to grant
sublicenses (except with the prior written consent of Xxxxxxxx), to market, use,
distribute and sell Product in the Territory. (b) Xxxxxxxx hereby grants to
WFHC, and WFHC hereby accepts, an exclusive (subject to Sections 3.11 and 3.12
hereof), unrestricted (save as provided herein), irrevocable (except as provided
in Sections 3.9 and Article 9 hereof) license, without the right to grant
sublicenses (except with the prior written consent of Xxxxxxxx), to use the
trademark "Esclim(TM)" (the "Trademark"), in connection with the Product in
the Territory. Xxxxxxxx covenants that it will not use or license any trademarks
confusingly similar to the Trademark in the Territory during the term of this
Agreement.
3.2 Initial License Fee. In consideration of the license granted to WFHC
herein, WFHC shall pay to Xxxxxxxx a non-refundable initial license fee equal to
one million four hundred fifty thousand US dollars ($1,450,000), of which
$700,000 shall be conditional, payable as follows:
(a) $250,000 upon execution of this Agreement (provided that
the $250,000 payment made by WFHC on July 1, 1999 shall be
credited against this first installment); and
(b) $250,000 by July 31, 1999; and
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(c) $250,000 upon shipment by Xxxxxxxx of the Product to be
shipped on November 5, 1999 as specified in Appendix 2;
and
(d) $350,000 within thirty (30) days after the close of the
first Sales Year if Seller has sold not less than * * *
patches of the Product in the Territory during that Sales
Year; and
(e) $350,000 within thirty (30) days after the close of the
second Sales Year if Seller has sold not less than * * *
patches of the Product in the Territory during that Sales
Year.
In the event that a delay in the shipment of the first Product
consignment is attributable to WFHC's negligence or willful
default, the $250,000 payment referred to in Subparagraph (c)
above shall be due and payable on November 22, 1999,
irrespective of the shipment of said Product, and without
prejudice to Xxxxxxxx'x other rights and remedies.
3.3 Royalties and Product Price. WFHC shall
(i) in further consideration of the license granted to WFHC herein pay
to Xxxxxxxx a royalty quarterly during the Term equal to the greater of
(a) * * * of Net Sales or (b) * * * per patch ("Floor Royalty"), based on the
Product sold during the applicable quarter (including a patent royalty equal to
* * * of Net Sales), and
(ii) in consideration of the supply of Product pay to Xxxxxxxx the
Shipping Costs and the greater of (a) * * * of Net Sales of the Product sold
during the applicable quarter or (b) the Floor Price (as defined below).
The Floor Price shall be (i) * * * per patch for the 25(mu)g, 37.5(mu)g and
50(mu)g dosage forms of the Product, and (ii) * * * per patch for the 75(mu)g
and 100(mu)g dosage forms of the Product. The Floor Price and the Floor Royalty
with respect to new dosage forms and the seven-day patch will be reasonably
determined by Xxxxxxxx. The Floor Price for any Product form may be reasonably
adjusted by Xxxxxxxx, not more than once per calendar year, in the event of a
change in its or CST's manufacturing costs. In the event Xxxxxxxx desires to
make such an adjustment, it shall notify WFHC and the parties shall meet and use
reasonable efforts to agree on the amount of such adjustment. If the parties are
unable to agree notwithstanding such efforts, WFHC may at its expense designate
an independent public accountant reasonably acceptable to Xxxxxxxx to review any
information which may justify such adjustment. The accountant shall report to
WFHC whether the information justifies the adjustment, but shall not disclose to
WFHC the content of any non-public information disclosed by Xxxxxxxx or CST
during such review. If the accountant reports that the information justifies the
proposed adjustment or a smaller adjustment, the Floor Price shall be adjusted
accordingly. If (i) the parties are unable to agree notwithstanding said
efforts, and (ii) the aggregate of the royalty and
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the new Average Floor Price as proposed by Xxxxxxxx exceed * * * of the most
recent quarterly Net Sales as available to WFHC and Xxxxxxxx on the date
Xxxxxxxx first proposes the adjustment, either party may by giving not less than
three (3) months' prior written notice to the other terminate this Agreement.
During such notice period, all rights and licenses of WFHC hereunder shall be
deemed to be non-exclusive.
3.4 Responsibilities of Parties.
(a) Xxxxxxxx. Xxxxxxxx, by itself or through CST, shall be solely
responsible for the manufacture of the Product, including the identification,
contracting and sublicensing of any third parties to formulate, manufacture or
package the Product, and shall be solely responsible for all quality assurance,
quality control and other aspects of manufacturing the Product, provided that
Xxxxxxxx shall after payment of the second installment of the above license fee
transfer to WFHC responsibility for the New Drug Application (the "NDA") filed
with the FDA with respect to the Product. In the event that Xxxxxxxx or CST
believes that there will be some delay in shipping any purchase order for
Product, Xxxxxxxx, by itself or through CST, shall provide a monthly report as
to the manufacturing status of each lot. The report shall describe any issues
that could impact delivery dates.
(b) WFHC. WFHC shall be solely responsible for US Customs
clearance, sales, marketing, advertising, distribution of the Product, GMP
compliance of the distribution facility, and for handling product complaints and
other regulatory matters with respect to the Product (other than NDA submissions
for new Product forms) in the Territory. WFHC shall not manufacture any Product,
except that it shall assume responsibility for the final packaging of the
Samples (subject to appropriate NDA changes). WFHC may entrust Xxxxxxxx (under
separate terms) or a third party with such Sample packaging. WFHC acknowledges
that Xxxxxxxx will not be under any obligation to disclose any manufacturing
information or data to WFHC, except (i) as is necessary for final Sample
packaging if not performed by Xxxxxxxx or CST, or (ii) as required by applicable
law or regulation. WFHC shall sell, distribute and promote the Product under the
Trademark, to the exclusion of any other trademark (except WFHC's own corporate
name and, as the case may be, that of its sublicensees).
3.5 Supply of Products. Xxxxxxxx shall supply Product to WFHC in
trade packs in finished form, packaged ready for sale and labeled in the English
language, C.I.F. WFHC's distribution facility in Newark, Delaware. WFHC will, at
its sole cost and expense, provide NDC numbers and designs for all labeling,
packaging and package inserts, subject to Xxxxxxxx'x and CST's production and
packaging constraints. As part of such constraints, each cardboard box of
Product shall contain eight (8) patches, one (1) patient package insert and one
(1) physician package insert, and the text printed onto each patch may be
modified only after mutual agreement on the effective date of the modification,
such date to be no later than February 1, 2000. All Product shipped to WFHC
shall have a minimum shelf life of eighteen (18) months. Xxxxxxxx shall provide
a certificate of analysis to WFHC for its review and records with each shipment
of Products to WFHC.
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3.6 Samples. Xxxxxxxx shall supply WFHC with a reasonable quantity of
Samples (to be agreed upon by the parties in good faith) for promotional
purposes, in the form of individual sachets containing one patch, for a price of
* * * per sachet (one patch), plus Shipping Costs and (as the case may be) final
packaging costs, C.I.F. WFHC's distribution facility in Newark, Delaware, for
the 25(mu)g, 37.5(mu)g and 50(mu)g dosage forms. For those quantities of Samples
which do not exceed the yearly aggregate amount set forth in Appendix 1 hereof
and are shipped during the first three Sales Years, the Discount shall apply to
the amount invoiced, unless Xxxxxxxx is required to supply a quantity of 50(mu)g
Samples that exceeds 30% of the total Sample quantity in any binding purchase
order.. With respect to any Sales Year other than the first three ones, WFHC and
Xxxxxxxx shall meet and consider possible discounts for such Year. All Samples
shipped to WFHC, including Placebo Samples, shall have a minimum shelf life of
twelve (12) months. The Sample price with respect to new dosage forms and the
seven-day patch will be reasonably determined by Xxxxxxxx. The Sample price for
any Sample form may be reasonably adjusted by Xxxxxxxx, in good faith, in the
event of a change in its or CST's manufacturing costs. In the event Xxxxxxxx
desires to make such an adjustment, it shall notify WFHC and the parties shall
meet and agree on the amount of such adjustment. If the parties are unable to
agree, WFHC may at its expense designate an independent public accountant
reasonably acceptable to Xxxxxxxx to review any information asserted by Xxxxxxxx
to justify such adjustment. The accountant shall report to WFHC whether the
information justifies the adjustment, but shall not disclose to WFHC the content
of any non-public information disclosed by Xxxxxxxx or CST during such review.
All Samples received shall be kept separate from other Products, shall be used
for Product promotion only and shall not be packaged or re-packaged for sale
purposes. Upon not less than five (5) working days' prior written notice, and no
more frequently than once each calendar year, WFHC shall permit, and shall cause
its Affiliates, sublicensees, subcontractors and Distributors to permit,
representatives of Xxxxxxxx to have access, at all reasonable times during
regular business hours, to such records and warehouses as may be necessary to
verify compliance with these provisions.
Xxxxxxxx shall, subject to regulatory requirements, supply WFHC with a
reasonable quantity of Placebo Samples (to be agreed upon by the parties in good
faith) for promotional purposes, in the form of individual sachets containing
one patch, for a price of * * * for 100,000 sachets (patches), plus Shipping
Costs and (as the case may be) final packaging costs, C.I.F. WFHC's distribution
facility in Newark, Delaware, for the 11cm(2) form of the Product. This price
shall be subject to adjustment as set forth above. The Discount shall not apply
to the price of Placebo Samples. Each order and each shipment for such Placebo
Samples shall amount to 100,000 sachets or an integral multiple of this amount.
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3.7 Forecasts and Orders. WFHC shall provide Xxxxxxxx a written twelve
(12) month rolling forecast at least ten (10) days prior to the first day of
each calendar month ("M"), such forecast to specify the requested quantity and
shipment dates for each Product form, including Samples and Placebo Samples.
Each forecast shall be binding upon WFHC with respect to orders forecast for the
Product (including Samples and Placebo Samples) to be delivered in the calendar
months M+3, M+4, M+5 and M+6. WFHC shall issue firm purchase orders for its
requirements of Product not less than ninety (90) days prior to the date of
requested shipment. Xxxxxxxx shall not be obligated to ship a Product by the
shipment date set forth in any purchase order which is received by Xxxxxxxx less
than ninety (90) days prior to such shipment date. Any firm purchase order for
each Product form (except Placebo Samples) shall amount to either (i) the
Minimal Amount (as defined below), (ii) an amount higher than the Minimal
Amount, or (iii) zero (0), but such order may be split into two or three
separate shipments within the M+3 through M+6 firm forecast period. In any case,
any order for the Product (except Placebo Samples) shall approximate 6,000,000
cm(2) (i.e. one manufacturing run) or an integral multiple thereof, in aggregate
for all Product forms including Samples but excluding Placebo Samples. Xxxxxxxx
may by not more than 10% adjust the amounts of Product to be delivered, so that
such amounts correspond with one manufacturing run or an integral number
thereof. None of WFHC's standard terms of purchase and none of Xxxxxxxx'x
standard terms of sale or supply shall govern any supply of Product (including
Samples and Placebo Samples) under this Agreement, nor shall such terms
supplement or modify any terms and conditions thereof, despite possible
inclusion in any purchase order, order confirmation or other document.
The term "Minimal Amount" as used in this Section shall mean:
- for the 25(mu)g dosage form of Product * * * patches
- for the 37.5(mu)g dosage form of Product * * * patches
- for the 50(mu)g dosage form of Product * * * patches
- for the 75(mu)g dosage form of Product * * * patches
- for the 100(mu)g dosage form of Product * * * patches
- for any new dosage form of Product
or the 7 day patch amount to be reasonably determined
by Xxxxxxxx
3.8 Diligence. During the term of this Agreement WFHC will use
commercially reasonable best efforts to maximize the sales of the Product in the
Territory. WFHC shall develop a marketing and sales policy to this effect. WFHC
shall use reasonable commercial efforts to make the First Commercial Sale of the
Product in the Territory no later than forty-five (45) days after the date WFHC
receives the first consignment of Product. In the event that WFHC has not made
such First Commercial Sale within said forty-five day period notwithstanding
such efforts, WFHC shall make such First Commercial Sale as soon as reasonably
possible thereafter, but no later than ninety (90) days after the date WFHC
receives
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the first consignment of Product. The parties shall establish a joint marketing
committee to review marketing strategy for the Product so as to achieve
reasonable consistency in marketing strategy among the markets for the Product.
The committee shall consist of four (4) persons, with WFHC and Xxxxxxxx each
being entitled to designate two (2) individuals. Each party shall bear the costs
and expenses of its designated members that are incurred in connection with
committee meetings. This committee shall meet not less than twice per Sales
Year, unless otherwise agreed.
3.9 Minimum Sales and Calls. A good faith sales forecast for each of the
first three (3) Sales Years is attached hereto as Appendix 1 and made an
integral part hereof. For each subsequent Sales Year, WFHC shall provide
Xxxxxxxx, no later than sixty (60) days prior to the beginning of the relevant
Sales Year, with a good faith sales forecast for such Sales Year. WFHC shall
sell during each of the first two (2) Sales Years no less than thirty percent
(30%) of the sales forecast for the relevant Sales Year, and shall sell during
the first three (3) Sales Years, in the aggregate, at least fifty percent (50%)
of the sales forecast for such three (3) year period. In the event WFHC fails to
achieve such minimum sales in any Sales Year (or in the aggregate in first three
(3) Sales Years), Xxxxxxxx may, upon six (6) months' written notice to WFHC, and
at its sole option, either terminate this Agreement or convert this Agreement
into a non-exclusive license. This termination or conversion right shall be
Xxxxxxxx'x sole and exclusive remedy for such failure, unless such failure
derives from WFHC's willful default.
During each of the four (4) calendar quarters immediately following the calendar
quarter in which the First Commercial Sale of the first form of Product was
made, WFHC shall carry out not less than * * * Calls (as defined and measured
below) and shall use commercially reasonable best efforts to carry out not less
than * * * Calls. In all such four (4) calendar quarters, WFHC shall carry out
not less than * * * Calls in the aggregate. If, according to WFHC's good-faith
records of the number of occasions on which a Sample of the Product was signed
for by a health care professional with prescribing authority, WFHC fails to
achieve either (a) * * * Calls in any one (1) of such calendar quarters or (b)
an aggregate of * * * Calls in all such four (4) calendar quarters, Xxxxxxxx may
by written notice immediately terminate this Agreement or, at its sole option,
immediately convert this Agreement into a non-exclusive license. WFHC shall
within thirty (30) days after the end of each calendar quarter provide Xxxxxxxx
with a written list of the health care professionals to whom a Sample has been
given during such quarter, such list to include the name of such professionals,
the date of each relevant Call and such other information as retained pursuant
to WFHC's Standard Operating Procedure under applicable FDA requirements. WFHC
shall permit Xxxxxxxx representatives to have access, once in each calendar
quarter upon not less than five (5) business days' prior written notice, to the
original Sample distribution forms signed by such health care professionals as
Xxxxxxxx may designate. This right of access shall lapse six (6) months after
the close of the last calendar quarter in which WFHC must perform such minimum
Calls. Failure by WFHC to provide Xxxxxxxx with such list or original forms
shall be deemed to be evidence of a failure to perform the relevant Calls.
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
13
For purposes of the preceding Paragraph, a "Call" shall mean a face-to-face
meeting between a health care professional with prescribing authority and a
professional representative of WFHC during which a verbal presentation of the
key Product attributes is made to such health care professional and one or more
Samples are given to such health care professional.
In the event that Xxxxxxxx elects to convert this Agreement into a non-exclusive
license pursuant to this Section, WFHC's license shall remain exclusive with
respect to the Esclim trademark, and WFHC shall at Xxxxxxxx'x request permit
Xxxxxxxx'x other licensees or distributors to cross-reference the NDA held by
WFHC.
3.10 Marketing and Sales. Xxxxxxxx will, to the extent that it has the
right to do so (including but not limited to the appropriate copyright), provide
WFHC with a copy of such documents in the English language as are used by the
relevant Xxxxxxxx Affiliate to train its sales force in Canada. WFHC shall be
solely responsible for any use thereof in the Territory. WFHC shall be
responsible for conducting all sales training of its sales force. At WFHC's
request and expense, Xxxxxxxx will provide WFHC with reasonable assistance for
such training. WFHC shall define a marketing and sales plan for the Product on
an annual basis and shall submit each such plan to Xxxxxxxx in writing no later
than eight (8) weeks prior to (i) the First Commercial Sale of the first form of
Product in the Territory, or (ii) the beginning of the implementation period of
such plan. Xxxxxxxx shall have the right to reject such plan only if, in its
reasonable opinion, such plan significantly conflicts with Xxxxxxxx'x marketing
strategy outside the Territory, provided that Xxxxxxxx shall exercise this right
no later than four (4) weeks after Xxxxxxxx receives such plan, and provided
further that at the time Xxxxxxxx exercises such right it shall give WFHC a
written statement articulating its reasons for rejecting such plan.
WFHC shall within thirty (30) days after the close of each calendar month
provide Xxxxxxxx with a written report of all Product sales effected by Seller
in the Territory during that calendar month. This report shall show such sales
by volume and value for each Product form.
WFHC shall at its cost and expense prepare all advertisement and promotional
materials, documents and campaigns for the Product in the Territory, in
accordance with FDA requirements. WFHC shall, within ten (10) days of receipt of
a written request by Xxxxxxxx, provide Xxxxxxxx with a copy of such materials,
documents and campaign plans (including but not limited to any Internet document
and other electronic materials which refer to the Product) as were, are being or
will be used by WFHC or its Affiliates or sublicensees in the Territory.
3.11 Xxxxxxxx'x Co-Promotion Rights. Xxxxxxxx shall have the right to
co-promote the Product in the Territory upon reasonable co-promotion terms to be
14
negotiated in good faith with WFHC after Xxxxxxxx'x decision to exercise this
right. Xxxxxxxx may assign this right to an Affiliate or a corporation,
partnership or other entity in respect of which Xxxxxxxx or its Affiliates hold
not less than thirty percent (30%) of the stock or other ownership interest.
The term "co-promote" or "co-promotion" as used in this Section shall mean
marketing, promotion and advertisement of the Product under (a) the relevant
existing NDA and (b) the existing trademark.
3.12 * * * Xxxxxxxx and/or CST are currently developing
* * * * * *. If and when any such * * * has been approved by the Food and Drug
Administration or any successor thereto for marketing in the Territory, Xxxxxxxx
and/or CST may, at its sole option, either (a) enter into good faith
negotiations with WFHC for the purpose of granting WFHC marketing rights to such
system in the Territory and agreeing upon terms therefor, or (b) select another
licensee or distributor for such system in the Territory. In the (a) case, WFHC
shall be required to pay half of the research and development costs and expenses
relating to such system, and Xxxxxxxx shall, with respect to such system, have
the same assignable co-promotion right as set forth in Article 3.11 hereof. In
the (b) case, Xxxxxxxx shall so notify WFHC in writing, and WFHC's rights and
licenses hereunder shall immediately become non-exclusive. For the avoidance of
doubt, (i) the term "another licensee or distributor" as used above shall
include but shall not be limited to any Affiliate of Xxxxxxxx, (ii) Xxxxxxxx
will not during the term of this Agreement license any trademarks confusingly
similar to the Trademark to another licensee or distributor in the Territory,
and (iii) Xxxxxxxx may identify and select another licensee or distributor at
any time prior to FDA approval of the * * * , provided that such
licensee or distributor shall not sell the Product in the Territory prior to
said approval and notification. WFHC shall at Xxxxxxxx'x request permit such
licensee or distributor to cross-reference the NDA held by WFHC.
3.13 No Competition. During the term of this Agreement neither WFHC nor
its Affiliates or sublicensees shall in the Territory develop, manufacture,
sell, distribute or promote any transdermal patch containing estradiol as the
sole active ingredient, provided that if WFHC wants to obtain marketing or
licensing rights with respect to a * * *, WFHC grants Xxxxxxxx a
right of first negotiation so that Xxxxxxxx may have priority in proposing its
* * * . For the avoidance of doubt, the word "distribute" as used
in this Section 3.13 shall not include the dispensing of a product by a
pharmacy.
3.14 Provisional Product Price and Reconciliation. WFHC shall pay the
Shipping Costs and the greater of (i) * * * of the Estimated Net Selling Price
or (ii) the Floor Price (as defined in Section 3.3 hereof) to Xxxxxxxx for each
shipment and each form of Product within thirty (30) days of shipment. For the
first two calendar quarters in which such Product form is sold, WFHC shall pay
the Floor Price and the Shipping Costs. The provisional price as set forth above
and the
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
15
final Product price as set forth in Section 3.3 hereof shall be reconciled after
the close of each calendar quarter on the basis of the Net Sales of that
quarter, and the difference (if any) shall be paid by WFHC to Xxxxxxxx within
forty-five (45) days of the close of that quarter (if reconciliation shows that
such difference is due to Xxxxxxxx) or credited against future payments owed to
Xxxxxxxx (if reconciliation shows that such difference is due to WFHC).
Notwithstanding the foregoing, within thirty (30) days after receipt of the
report provided for under Section 4.1 hereof in respect of the last calendar
quarter in each calendar year, Xxxxxxxx shall pay WFHC the net amount of any
such credits related to such calendar year which have not been set off against
actual deliveries.
3.15 Licensed Territory. WFHC shall refrain, and shall cause its
Affiliates, sublicensees and Distributors to refrain, from selling and promoting
any Product outside the Territory.
Article 4. ROYALTY REPORTS AND ACCOUNTING
4.1 Reports, Exchange Rates. During the term of this Agreement following
the First Commercial Sale of the first form of Product, WFHC shall for each
calendar quarter furnish to Xxxxxxxx a written report showing (i) the gross
sales by value and volume of each form of Product sold by WFHC and its
Affiliates, sublicensees and Distributors in the Territory during that calendar
quarter and the detailed calculation of Net Sales from such gross sales; (ii)
the royalties and the Product price (including reconciliation adjustments)
payable in United States dollars, which shall have accrued hereunder in respect
of such sales; (iii) withholding taxes, if any, required by law to be deducted
in respect of such sales, provided that WFHC will take reasonable action to seek
to minimize any withholding taxes payable by Xxxxxxxx and provided further that
WFHC shall secure proof of payment of such taxes and provide Xxxxxxxx with
appropriate receipts so that Xxxxxxxx may credit such taxes against its own
income tax according to the applicable international tax convention; (iv) the
date of the First Commercial Sale of any Product in the Territory during the
reporting period; and (v) the exchange rates used in determining the amount of
United States dollars payable, where conversion is necessary according to the
provisions hereof. The conversion of euro to United States dollars shall be made
at the average of the rate published in the Wall Street Journal for the close of
business in New York for the last thirty (30) days of the calendar quarter for
which the payments are set. Reports shall be due on the forty-fifth (45th) day
following the close of each respective calendar quarter. If no royalty is due
for any royalty period hereunder, WFHC shall so report. WFHC shall keep accurate
records in sufficient detail to enable the royalties and prices payable
hereunder to be determined.
16
4.2 Audits.
(a) Upon the written request of Xxxxxxxx at Xxxxxxxx' expense and not
more than once in each calendar year, WFHC shall permit an independent public
accountant selected by Xxxxxxxx and reasonably acceptable to WFHC, to have
access during normal business hours to such of the records of WFHC and its
Affiliates, sublicensees and Distributors as may be reasonably necessary to
verify the accuracy of the royalty and price reports hereunder.
(b) In the event such accountant concludes that additional royalties or
amounts were owed during such period, the additional royalty or price shall be
paid within thirty (30) days of the date Xxxxxxxx delivers to WFHC such
accountant's written report so concluding. The fees charged by such accountant
shall be paid by Xxxxxxxx unless the audit discloses that the royalties payable
by WFHC for the audited period are more than one hundred five percent (105%) of
the royalties actually paid for such period, in which case WFHC shall pay the
reasonable fees and expenses charged by the accountant.
(c) If WFHC grants a sublicense pursuant to Section 3.1 of this
Agreement, or sells the Product through a Distributor, WFHC shall include in the
sublicense or distribution agreement a provision requiring the sublicensee or
Distributor to make reports to WFHC, to keep and maintain records of sales made
pursuant to such sublicense or distribution and to grant access to such records
by Xxxxxxxx'x independent accountant to the same extent required of WFHC under
this Agreement.
(d) Upon the expiration of forty-eight (48) months following the end of
any calendar year, the calculation of any royalties and Product price payable
with respect to such year shall be binding and conclusive upon Xxxxxxxx, and
WFHC and its sublicensees and Distributors shall be released from any liability
with respect to such royalties and adjustments for such year, except in case of
fraud.
4.3 Confidential Financial Information. Xxxxxxxx agrees that all
information subject to review under this Article 4 or under any sublicense
agreement is confidential and that Xxxxxxxx shall cause its accountant to retain
all such information in confidence, subject to exceptions similar to those set
forth in Article 6.1 hereof.
4.4 Payment Terms. Royalties and Product price reconciliation
adjustments shown to have accrued by each report provided for under Section 4.1
hereof shall be due and payable on the date such report is due. Royalties
determined to be owing, and any overpayments to be credited, with respect to any
prior quarter shall be added, together with interest thereon under Section 4.7
below from the date of the report for the quarter for which such amounts are
owing, or credited, as the case may be, to the next quarterly payment hereunder.
4.5 Exchange Control. All royalties due and other payments hereunder
shall be paid in United States dollars. Any conversion of euro to US dollars
which
17
may be necessary hereunder, other than that made pursuant to Section 4.1 hereof,
shall be made at the average of the rate published in the Wall Street Journal
for the close of business in New York on the last thirty (30) days of the
calendar month immediately preceding the month in which the relevant payment is
made. If at any time legal restrictions prevent the prompt remittance of part or
all royalties, payment shall be made through such lawful means or methods as the
parties may determine.
4.6 Payment Method. Except as provided in Section 4.5, all payments by
WFHC to Xxxxxxxx under this Agreement shall be made by bank wire transfer in
immediately available funds to such accounts as Xxxxxxxx specify to WFHC before
such payment is due.
4.7 Interest. If either party fails to pay any amount owed and payable
to the other party hereunder, such amount shall without notice bear interest
from the date it is due until payment is made to the other party at the base
rate of Bank of America NT & SA plus two (2) percentage points, without
prejudice to any other right or remedy available to that other party hereunder
or otherwise.
Article 5. INFRINGEMENT ACTIONS BY THIRD PARTIES
If Xxxxxxxx or WFHC, or any Indemnitee (as defined in Article 10
hereof) shall be named as defendants, either jointly or individually in a legal
proceeding by a third party or shall be joined in the same litigation for
infringement of a patent or trademark because of the manufacture, use or sale of
Products, Xxxxxxxx shall be entitled to control the defense of such suit. WFHC
shall have the right to be represented by counsel of its own selection, but at
its sole expense, and shall cooperate fully in the defense of such suit and
furnish to Xxxxxxxx all evidence and assistance in its control. WFHC shall have
the right to consult with Xxxxxxxx with respect to the defense of such suit and
to receive copies of all pleadings, correspondence and other documents relating
to such suit. Xxxxxxxx shall not be entitled to settle such suit or otherwise
consent to an adverse judgment in such suit without the express written consent
of WFHC if such settlement or adverse judgment diminishes any right or interest
of WFHC hereunder, provided that such consent shall not be unreasonably
withheld.
Article 6. CONFIDENTIALITY
6.1 Nondisclosure Obligations. Except as otherwise provided in this
Article 6, and subject to Article 7 hereof, during the term of this Agreement
and for a period of ten (10) years thereafter, each party ("Recipient") shall
maintain in confidence and use only for purposes of this Agreement any
technical, scientific or business information and data relating to the other
party's research, development, inventions, products, production, manufacturing,
finances, marketing, customers, or business plans, including, but not limited
to, trade secrets, know-how, clinical and non-clinical
18
data, formulas, processes, or other intellectual property, that is or has been
disclosed to or otherwise received or obtained by Recipient, whether or not in
connection with or pursuant to this Agreement.
For purposes of this Article 6, information and data described above
shall be referred to as "Information." To the extent it is reasonably
necessary or appropriate to fulfill its obligations or exercise its rights under
this Agreement, a party may disclose Information it is otherwise obligated under
this Section not to disclose to its Affiliates, sublicensees, consultants,
outside contractors and clinical investigators, on a need-to-know basis on
condition that such entities or persons agree to keep the Information
confidential for the same time periods and to the same extent as such party is
required to keep the Information confidential; and a party or its sublicensees
may, on a confidential basis wherever reasonably possible, disclose such
Information to government or other regulatory authorities to the extent that
such disclosure is reasonably necessary to obtain authorizations to conduct
clinical trials with and to commercially market the Product. The obligation not
to disclose and use Information shall not apply to any party of such Information
that (i) is or becomes available to the public other than by acts of Recipient
or its Affiliates or sublicensees in contravention of this Agreement; or (ii) is
lawfully disclosed to Recipient or its Affiliates or sublicensees by a third
party, provided such Information was not obtained by such third party directly
or indirectly from the other party under this Agreement or its Affiliates; or
(iii) prior to disclosure under this Agreement, was already in the possession of
Recipient or its Affiliates or sublicensees, provided such Information was not
obtained directly or indirectly from the other party under this Agreement or its
Affiliates; or (iv) can be shown by written documents to have been independently
developed by Recipient or its Affiliates without breach of any of the provisions
of this agreement.
6.2 Terms of This Agreement. Xxxxxxxx and WFHC each agrees not to
disclose any terms or conditions of this Agreement to any third party during the
term thereof without the prior consent of the other party, except as required by
applicable law or to persons with whom WFHC or Xxxxxxxx has entered into or
proposes to enter into a business relationship and who reasonably need to know
such terms or conditions for the purposes of such relationship or tentative
relationship, provided that any such disclosure shall be made on a confidential
basis if legally possible. Notwithstanding the foregoing, prior to execution of
this Agreement, WFHC and Xxxxxxxx shall agree upon the substance of information
that can be used to describe the terms of this transaction, and WFHC and
Xxxxxxxx may disclose such information, as modified by mutual agreement from
time to time, without the other party's consent.
19
Article 7. TRIALS, ADVERSE EVENTS, RELATIONS WITH FDA, QUALITY
ASSURANCE, RECALLS
7.1 Trials. WFHC shall not perform or sponsor any clinical or
non-clinical trial or test on or with any Product, nor permit its Affiliates or
sublicensees to do so, unless Xxxxxxxx'x prior written consent has been
obtained. As an exception, WFHC and its authorized Affiliates and sublicensees
may without Xxxxxxxx'x prior consent perform or sponsor in the Territory any
phase IV clinical trials which do not require IND approval by the FDA and are
not meant to support any future IND. WFHC shall promptly provide Xxxxxxxx with a
copy of all documents (including but not limited to draft protocols, signed
protocols, investigator's reports, draft publications and publications) and data
relating to or provided from any trial or test on or with any Product.
Notwithstanding the provisions of Article 6 hereof, such documents and data may
be used, disclosed or published by Xxxxxxxx, its Affiliates or licensees for
purposes of Product promotion, subject to (i) WFHC's exclusive rights hereunder,
and (ii) third party rights.
In the event that WFHC wishes to publish the results of any clinical trial
performed or sponsored by WFHC on or with the Product, WFHC shall provide
Xxxxxxxx with a copy of the draft publication and shall not make any submission
for publication unless Xxxxxxxx'x prior written approval has been obtained,
provided that such approval shall not be unreasonably withheld, and provided
further that any failure by Xxxxxxxx to respond within one (1) month of receipt
shall be considered acceptance of the relevant publication. In the event that
Xxxxxxxx wishes to publish the results of any clinical trial performed or
sponsored by Xxxxxxxx on or with the Product in any British, Canadian or
American reputable scientific periodical, Xxxxxxxx shall provide WFHC with a
copy of the draft publication prior to submission.
7.2 Adverse Events. Each party shall, during the term of this Agreement,
have a continuing obligation to notify the other party immediately and within
the reporting period imposed by any applicable governmental authority of any
adverse reaction or complaint reported to such party resulting from the use of a
Product.
During the term of this Agreement, WFHC shall be responsible for completion and
submission to the FDA of any report involving an adverse reaction involving a
Product. Xxxxxxxx shall timely provide to WFHC any and all data relating to a
Product sold by Xxxxxxxx or any Affiliate, licensee or distributor of Xxxxxxxx,
which data is necessary for WFHC to timely complete and submit such report. WFHC
shall, simultaneously with the submission of such report to the FDA, provide
Xxxxxxxx with a copy of such report. The parties shall execute a detailed
Standard Operating Procedure for purposes of adverse event reporting.
7.3 Dealings with FDA. WFHC shall, during the term of this Agreement and
for a period of ten (10) years after the date of termination of this Agreement,
immediately forward to Xxxxxxxx a copy of any correspondence, information,
report or notification that it receives from the FDA or other governmental
authority relating to
20
any Product. Except where precluded by any deadline imposed by the FDA, WFHC
shall consult with Xxxxxxxx prior to any meeting or other contact with the FDA
and shall immediately forward to Xxxxxxxx a copy of any letter, notification or
report which is sent by WFHC to the FDA. Xxxxxxxx and its designated Affiliate
shall have the right to attend any meeting between WFHC and the FDA relating to
the Product.
In the event WFHC proposes, or is requested or directed by the FDA, to make any
change in the registration files for any Product, including, but not limited to,
a change in the labeling or package inserts, WFHC shall immediately notify
Xxxxxxxx of such proposed change and, prior to requesting or accepting such
change, obtain Xxxxxxxx'x prior written approval (which approval shall not be
unreasonably withheld).
WFHC shall diligently file with the FDA any NDA amendments which Xxxxxxxx has
prepared and may reasonably require in connection with the manufacturing of the
Product, including but not limited to any change in the suppliers of materials
or the manufacturing. In the event that the FDA requires any additional clinical
trial, the parties shall meet and decide whether such trial may reasonably be
performed and how the cost thereof will be allocated, as the case may be.
7.4 QA Agreement. The parties hereto shall as soon as reasonably
possible after execution hereof execute a Quality Assurance Agreement specifying
the pharmaceutical rules and procedures applicable to the supply of Product
hereunder. The terms of this Agreement shall prevail over any conflicting terms
contained in such Quality Assurance Agreement. Such Quality Assurance Agreement
may be updated, or superseded by a new version thereof, at all reasonable times
by mutual agreement.
7.5 QA Audits. Each party shall secure the right for the other party to
inspect any facility where the Product is manufactured, packaged or stored, at
all reasonable times during regular business hours and upon not less than five
(5) working days' prior written notice. Such inspections shall be for regulatory
and quality assurance purposes only.
7.6 Recalls. In the event either party has reason to believe that one or
more batches of any Product should be recalled or withdrawn from distribution,
such party shall immediately notify the other party. In the event a recall of a
Product is required because of any act or omission of, or a breach of this
Agreement by, WFHC, Seller or any third party acting on behalf of WFHC or
Seller, including, but not limited to, the handling, storage or distribution of
such Product, WFHC shall (i) immediately notify Xxxxxxxx of such recall and (ii)
take such steps as may be necessary to effect such recall or as may be required
by any governmental authority. In the event a recall is required as a result of
a failure of a Product manufactured by Xxxxxxxx or CST to conform to the
criteria set forth in Section 2.1 (g) hereof or a breach by Xxxxxxxx of its
obligations hereunder, WFHC shall, after consultation with Xxxxxxxx, take such
reasonable steps as may be necessary to effect such recall, and Xxxxxxxx shall
reimburse WFHC for any reasonable documented costs associated
21
with such recall. Upon request of WFHC, Xxxxxxxx shall reasonably assist in such
recall, except that such assistance shall not impose, or be deemed to impose,
any liability on Xxxxxxxx. In the event a recall is required because of an act
or omission of both parties, then the parties shall negotiate in good faith
which party shall undertake the recall and an appropriate allocation of the
costs and expenses of such recall.
Article 8. PATENTS AND TRADEMARK
8.1 No Technology Rights. Except as otherwise provided in this
Agreement, under no circumstances shall a party hereto, as a result of this
Agreement, obtain any ownership interest or other right in any technology,
know-how, patents, pending patent applications, trademarks, pending trademark
applications or products, including items owned, controlled or developed by the
other, or transferred by the other to said party at any time pursuant to this
Agreement. It is understood and agreed by the parties that this Agreement does
not grant to either party any license or other right in basic technology of the
other party except to the extent necessary to enable the parties to carry out
their party of this Agreement.
8.2 Enforcement of Patent Rights and Trademark. Xxxxxxxx and WFHC shall
promptly notify the other in writing of any alleged or threatened infringement
of Patent Rights or Trademark in the Territory of which they become aware.
Xxxxxxxx or its relevant Affiliate shall have the right to prosecute any
infringement described in this Section 8.2. If Xxxxxxxx elects not to proceed
with enforcement activity within (i) ninety (90) days following the notice of
alleged infringement or (ii) ten (10) days before the time limit, if any, set
forth in the appropriate laws and regulations for the filing of such actions,
whichever comes first, then WFHC may act in its own name to commence litigation
with respect to the alleged or threatened infringement. In the event a party
brings an infringement action, the other party shall cooperate fully, including,
if required to bring such action, the furnishing of a power of attorney. If
Xxxxxxxx or its relevant Affiliate brings an infringement action, WFHC and its
authorized sublicensees shall have the right to join in such action in order to
recover damages for injury to WFHC or such sublicensees resulting from the
infringement. Neither party shall have the right to settle any patent or
trademark infringement litigation under this Section 8.2 in a manner that
diminishes the rights or interests of the other party without the express
written consent of such other party, such consent not to be unreasonably
withheld.
The costs of any litigation commenced pursuant to this Section 8.2,
including attorneys' fees and expenses, shall be borne by the party commencing
such litigation, unless (i) the parties agree to a different cost sharing
arrangement in any particular matter, or (ii) WFHC or its authorized
sublicensees elect to join in an action instituted by Xxxxxxxx or a Xxxxxxxx
Affiliate, in which case WFHC and such sublicensees shall bear the fees and
expenses of their own legal counsel. Except as otherwise agreed to by the
parties as part of a cost sharing arrangement, any
22
recovery realized as a result of any litigation under this Section 8.2 (except
joint action) shall be retained by the party who brought the infringement
action. In the event of a joint infringement action as aforesaid, the court
shall decide on the allocation of any compensatory damages, and any punitive
damages shall be shared equally by the parties.
Article 9. TERM, TERMINATION
9.1 Expiration. Unless terminated earlier pursuant to Sections 3.9, 9.2
or 9.3 hereof, this Agreement shall expire on the expiration of the Term.
9.2 Termination for Cause. Either party may terminate this Agreement
upon the occurrence of any of the following:
(a) Bankruptcy.
Either party may, in addition to any other remedies available to
it by law or in equity, terminate this Agreement by written notice to the other
party (the "Bankrupt Party") with immediate effect in the event there shall
have been appointed a trustee or receiver of the Bankrupt Party or for all or a
substantial part of its property, or any case or proceeding shall have been
commenced or other action taken by or against the Bankrupt Party in bankruptcy
or seeking reorganization, liquidation, dissolution, winding-up arrangement,
composition or readjustment of its debts or any other relief under any
bankruptcy, insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect, or there shall have been issued a
warrant of attachment, execution, distraint or similar process against any
substantial part of the property of the Bankrupt Party, and any such event shall
have continued for thirty (30) days undismissed, unbound and undischarged.
(b) Default. Upon the failure of either party to comply with any
material obligation set forth in this Agreement (a "Default"), the
non-defaulting party shall give to the defaulting party written notice (the
"Notice of Default") specifying the nature of the Default and requesting that
the defaulting party cures such Default within sixty (60) days. If the
defaulting party shall dispute the existence, extent or nature of any Default
set forth in a Notice of Default, the parties shall use good faith efforts to
resolve the dispute. In the event any Default shall not be cured within sixty
(60) days of the defaulting party's receipt of a Notice of Default, the
non-defaulting party shall be entitled to terminate this Agreement in its
entirety and the licenses granted hereunder by giving written notice to the
other party with immediate effect.
(c) Upon a Change of Control of the other party, on ninety (90) days'
written notice to such other party. This termination right may be exercised by a
party each time there is a Change of Control, whether or not exercised with
respect to an earlier Change of Control. The party subjected to a Change of
Control shall promptly notify the other party thereof in writing, giving all
relevant particulars of the Change of
23
Control, and that other party may exercise this termination right within ninety
(90) days of receipt of such notice.
9.3 Immediate Termination.
(a) This Agreement may be terminated immediately by a party by
written notice if the other party: (i) admits in writing its inability to
fulfill its obligations as they become due, (ii) ceases or threatens to cease to
carry on business, whether hereunder or generally, or (iii) cannot maintain the
required insurance coverage under Section 10.4 hereof. This Agreement may be
terminated immediately by Xxxxxxxx by written notice if WFHC fails to pay to
Xxxxxxxx any of the amounts referred to in Section 3.2 (b), (c), (d) and (e)
hereof on the date such payment is due.
(b) This Agreement may be terminated immediately by WFHC by
written notice in the event that the shipment by Xxxxxxxx of the amount of
Product specified for shipment November 5th, 1999 in Appendix 2 has not been
completed by November 5, 1999.
This termination right shall lapse on December 31, 1999.
9.4 Effect of Termination. Expiration or termination of this Agreement
shall not relieve the parties of any obligation accruing prior to such
expiration or termination and the provisions of Article 4, Article 6, Section
7.3, Article 10 and Section 11.5 (b) shall survive the termination or expiration
of this Agreement.
9.5 Remedies. Subject to section 11.5(b) hereof, the rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided by law or equity.
9.6 Other Consequences of Termination.
(a) Upon termination or expiration of this Agreement, WFHC shall,
within thirty (30) days from the date of receipt of a request from Xxxxxxxx,
transfer, free of charge, to Xxxxxxxx or such third party as Xxxxxxxx may
designate each open IND and NDA held or obtained by WFHC or any Affiliate or
sublicensee of WFHC in connection with the Product. Failure by WFHC to promptly
transfer, without good cause, such IND or NDA in accordance with this Section
9.6 (a) shall entitle Xxxxxxxx to seek any and all remedies to which Xxxxxxxx is
entitled by law or in equity.
(b) All purchase orders for Product submitted by WFHC, which have
not been shipped prior to termination or expiration of this Agreement, shall
become automatically null and void, except for such orders which have been
submitted by WFHC to meet firm orders of any customer of WFHC or any Affiliate
of WFHC.
24
(c) Xxxxxxxx shall have the right to repurchase any Product owned
by WFHC, which, at the time of Xxxxxxxx'x request pursuant to Section 9.6 (a)
hereof, is fit for sale and has not less than twelve months' remaining shelf
life, at the price paid by WFHC to Xxxxxxxx for such Product, subject to the
rights of any independent third party to or in such Product which existed prior
to such termination or expiration. Promptly following such termination or
expiration, but in no event later than thirty (30) days after such date of
termination or expiration, WFHC shall provide Xxxxxxxx with a complete and
detailed list of the inventory of the Product (including but not limited to the
remaining shelf life for each unit of Product) and shall allow access of such
inventory by Xxxxxxxx'x representatives to enable Xxxxxxxx to determine what
part, if any, of such inventory Xxxxxxxx may repurchase. Such right of
repurchase shall lapse sixty (60) days after the date of receipt by Xxxxxxxx of
such inventory of Product.
(d) In the event of termination pursuant to Section 9.3 (b)
hereof, WFHC shall within thirty (30) days of termination pay Xxxxxxxx for the
Product (including Samples and Placebo Samples) then produced or then being in
the process of manufacture which had been ordered by WFHC, at the price of EUR
0.12 per patch. Such Product shall not be delivered to WFHC.
Article 10. INDEMNITY
10.1 Xxxxxxxx'x Right to Indemnification. WFHC shall indemnify and hold
harmless Xxxxxxxx, its successors and assigns, CST and the directors, officers,
employees, agents, attorneys and representatives thereof (collectively
"Indemnitee(s)"), from and against any and all liabilities, damages, losses,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees) of whatever kind or
nature, including, without limitation, any claim or liability based upon
negligence, warranty, strict liability, violation of government regulation or
infringement of patent or proprietary rights, fees and damages arising out of or
resulting from WFHC's handling, storage, shipment, promotion, marketing, use or
distribution of the Product, other than claims or liabilities for which Xxxxxxxx
is required to indemnify WFHC pursuant to section 10.2 hereof.
10.2 WFHC's Right to Indemnification. Xxxxxxxx shall indemnify and hold
harmless WFHC, its successors and assigns, and the directors, officers,
employees, agents, attorneys and representatives thereof (collectively
"Indemnitee(s)"), from and against any and all liabilities, damages, losses,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees) of whatever kind or
nature, including, without limitation, any claim or liability based upon
negligence, warranty, strict liability, violation of government regulation or
infringement of patent or other proprietary rights, arising out of or resulting
from (a) the use of or administration of finished Product containing a defect
resulting from Xxxxxxxx'x negligence, willful misconduct or breach of its
warranties set forth in section 2.1 (g) hereof; or (b) infringement of the
Trademark or any third party
25
intellectual property right covering the manufacture of the Product (subject to
Section 3.8 hereof). As used herein, the term "covering" shall mean, with
respect to any act, an act which would, in the absence of a license provided
hereunder, infringe a claim of a pending patent application, if issued as a
patent, or a patent which has not been finally held invalid or unenforceable by
a court of competent jurisdiction.
10.3 Procedure. Any Indemnitee that intends to claim indemnification
under this Article 10 shall promptly notify the other party (the "Indemnitor")
of any loss, claim, damage, liability or action in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor shall
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnitor, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Article 10 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article 10, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article
10. The Indemnitee under this Article 10, its employees and agents, shall
cooperate fully with the Indemnitor and its legal representatives in the
investigation of any action, claim or liability covered by this indemnification.
In the event that each party claims indemnity from the other and one party is
finally held liable to indemnify the other, the Indemnitor shall additionally be
liable to pay the reasonable legal costs and attorneys' fees incurred by the
Indemnitee in establishing its claim for indemnity.
10.4 Insurance. WFHC shall maintain insurance against such risks
(including product liability) and upon such terms (including coverages,
deductible limits and self-insured retentions) as is customary for the
activities to be conducted under this Agreement and is appropriate to cover its
indemnification obligation hereunder. WFHC shall carry comprehensive general
liability insurance, including product liability endorsements, in an amount of
not less than $5,000,000 per occurrence and $10,000,000 in the aggregate.
Article 11. MISCELLANEOUS
11.1 Force Majeure. Neither party shall be held liable or responsible to
the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected party including but not limited to fire, floods,
embargoes, war, acts of war
26
(whether war be declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God or acts, omissions or
delays in acting by any governmental authority.
11.2 Assignment. This Agreement may not be assigned or otherwise
transferred by either party without the consent of the other party. Any
purported assignment in violation of the preceding sentences shall be void. Any
permitted assignee shall assume all obligations of its assignor under this
Agreement.
11.3 Severability. Each party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the parties would not have entered into this Agreement
without the invalid provisions.
11.4 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier) or courier, postage prepaid (where
applicable), addressed to such other party at its address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor and shall be effective upon receipt by the addressee.
If to Xxxxxxxx: Laboratoires Xxxxxxxx X.X.
00 xxx xx Xxxxx,
00000 Xxxx, Xxxxxx
Attention: Vice-President, Pharmaceutical Division
If to WFHC: Women First HealthCare, Inc.
00000 Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President and Chief Executive Officer
27
11.5 Applicable Law; Arbitration.
(a) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the state of New York, without regard
to such state's conflicts of laws principles.
(b) Arbitration. Any disputes arising between the parties relating
to, arising out of or in any way connected with this Agreement or any term or
condition hereof, or the performance by either party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
promptly presented to the Chief Executive Officers of Xxxxxxxx and WFHC for
resolution and if the Chief Executive Officers cannot promptly resolve such
disputes, then such dispute shall be finally resolved by binding arbitration.
Whenever a party shall decide to institute arbitration proceedings, it shall
give written notice to that effect to the other party. The party giving such
notice shall refrain from instituting the arbitration proceedings for a period
of fifteen (15) days following such notice. Any arbitration hereunder shall be
conducted under the Rules of the American Arbitration Association. Each such
arbitration shall be conducted by one (1) arbitrator appointed and acting in
accordance with such rules. Any such arbitration shall be held in New York, New
York. The arbitrator shall have the authority to grant specific performance, and
to allocate between the parties the costs of arbitration in such equitable
manner as he/she determines. Judgment upon the award so rendered may be entered
in any court having jurisdiction or application may be made to such court for
judicial acceptance of any award and an order of enforcement, as the case may
be. Notwithstanding the foregoing, provisional measures may be applied for in
any court having jurisdiction.
11.6 Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof and supersedes all
prior documents, correspondence, agreements, negotiations, offers, proposals,
understandings, warranties and representations, whether oral or written. This
Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by both parties hereto.
11.7 Headings. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
11.8 Independent Contractors. It is expressly agreed that Xxxxxxxx and
WFHC shall be independent contractors and that the relationship between the two
parties shall not constitute a partnership, joint venture or agency. Neither
Xxxxxxxx nor WFHC shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior consent of the party to do so.
28
11.9 Waiver. The waiver by either party hereto of any right hereunder or
the failure to perform or breach by the other party shall not be deemed a waiver
of any other right hereunder of any other breach or failure by said other party
whether of a similar nature or otherwise.
11.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
LABORATOIRES XXXXXXXX X.X WOMEN FIRST HEALTHCARE, INC.
By: /s/ By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Title: VP Pharmaceutical Title: President and Chief
----------------------------- Executive Officer
-----------------------------
29
APPENDIX 1
Sales Year 1 Sales Year 2 Sales Year 3
Sales Forecast * * * * * * * * *
Samples * * * * * * * * *
All by number of patches
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
