EXHIBIT 10.4
MARKETING, SALES AND DISTRIBUTION AGREEMENT
This MARKETING, SALES AND DISTRIBUTION AGREEMENT ("Agreement"), dated as of
December 17, 1997 is entered into by and between Xxxxxx Healthcare Corporation,
a Delaware corporation having its principal place of business at 0000 Xxxx Xxxx
Xxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("Baxter") and BIT ACQUISITION CORP., a Delaware
corporation having its principal place of business at Nine Xxxxxx, Xxxxxx,
Xxxxxxxxxx 00000 ("Newco").
RECITALS
X. Xxxxxx and VIMRx Pharmaceuticals Inc., a Delaware corporation
("VIMRx"), have agreed to enter into a strategic alliance in the ex vivo cell
therapies business and have formed Newco for that purpose, pursuant to that
certain Asset Purchase Agreement dated as of October 10, 1997, by and among
Baxter, Newco and VIMRx (the "Acquisition Agreement").
B. Pursuant to the Acquisition Agreement, Baxter has transferred to Newco
certain Isolex(R) and Maxsep(R) Technology (as that capitalized terms is defined
in the Hardware and Disposables Manufacturing Agreement) as well as other IT
Assets (as that capitalized term is defined in the Hardware and Disposables
Manufacturing Agreement) relating to Isolex(R) and Maxsep(R) Products (as that
capitalized term is defined below).
C. Pursuant to the Acquisition Agreement, Baxter and Newco have entered
into that certain sublicense of even date herewith relating to CD34+ cell
population and related antibody and method patents licensed from Becton,
Xxxxxxxxx and Company to Baxter (the "First BD Sublicense"); that certain
sublicense of even date herewith relating to B cell antibodies licensed from
Becton, Xxxxxxxxx and Company to Baxter (the "Second BD Sublicense"); that
certain sublicense of even date herewith relating to breast cancer antibodies
licensed from Cetus Oncology corporation, d/b/a Chiron Therapeutics, to Baxter
(the "Chiron Sublicense"); and that certain sublicense of even date herewith
relating to B cells licensed from Xxxx. Xxxxx Xxxxxx to Xxxxxx Deutschland GmbH
(the "Dorken Sublicense") (the First BD Sublicense, the Second BD Sublicense,
the Chiron Sublicense and the Dorken Sublicense) are collectively referred to
herein as the "Sublicense Agreements") pursuant to which Baxter has granted to
Newco licenses to the Licensed Technology (as that capitalized term is defined
in each of the Sublicense Agreements) as described therein.
X. Xxxxxx has agreed to manufacture for Newco certain antibodies pursuant
to the terms of that certain Antibody Manufacturing and Storage Agreement of
even date herewith (the
"Antibody Manufacturing and Storage Agreement"), which are components of certain
of the Reagent Kits (as that capitalized term is defined below).
X. Xxxxxx has agreed to supply to Newco certain other products and
components which are utilized in connection with the Isolex(R) and Maxsep(R)
Products pursuant to the terms of that certain Hardware and Disposables Supply
Agreement of even date herewith (the "Hardware and Disposables Supply
Agreement").
X. Xxxxxx has also agreed to manufacture for Newco the Isolex(R) and
Maxsep(R) Products pursuant to the terms of that certain Hardware and
Disposables Manufacturing Agreement of even date herewith (the "Hardware and
Disposables Manufacturing Agreement") and certain prototype products for the
research market pursuant to the terms of that certain Services Agreement of even
date herewith (the "Services Agreement").
G. Newco desires that Baxter market, sell and distribute Isolex(R) and
Maxsep(R) Products and Reagent Kits as described herein and subject to the terms
hereof and Baxter is willing to market, sell and distribute Isolex(R) and
Maxsep(R) Products and Reagent Kits as described herein and subject to the terms
hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, Baxter and Newco hereby agree as follows:
1. DEFINITIONS.
1.1 Terms Defined in Preamble and Recitals: As used herein, all
capitalized terms defined in the Preamble and Recitals of this Agreement shall
bear the meanings ascribed to such terms as set forth therein.
1.2 Terms Defined in License Agreements: Unless otherwise defined herein,
as used herein all capitalized terms defined in the License Agreements shall
bear the meanings ascribed to such terms as set forth therein.
1.3 Other Terms: As used herein, the following capitalized terms shall
have the following meanings:
A. "Affiliate" of a party shall mean any entity (i) which
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with, the party or (ii) fifty
percent (50%) or more of the voting capital stock (or in the case of an
entity which is not a corporation, fifty percent (50%) or more of the
equity interest) of which
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is beneficially owned or held by a party or any of such party's
Subsidiaries. The term "Control" means the posses sion, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of an entity (other than a natural person), whether through
the ownership of voting capital stock, by contract or otherwise.
B. "Agreement Year" shall mean each calendar year, and the
partial calendar years that begin on the date hereof and end on the date of
termination, during the term of this Agreement.
C. "Xxxxxx Region" means, individually and collectively, the
geographical regions of (1) Western and Eastern Europe; (2) North America
(United States and Canada); (3) Japan; and, (4) the rest of the world.
D. "Ex Vivo Cell Processing" shall mean the active selection, and
any subsequent modification, genetic alteration, activation and/or
expansion, of nucleated cells outside the body for therapeutic purposes
such as cellular therapy or gene therapy. For the purpose of this
definition, "active selection" shall mean processing involving the action
of a biological component, such as an antibody or modified antibody, a
lectin, or a ligand, to selectively and specifically bind to a particular
molecule on the surface of the cells to be selected so as to confer
specificity or selectivity for such cells in the cell selection process.
E. "FDA" means the United States Food and Drug Administration.
F. "Field of Distribution" means the market in connection with
the Maxsep(R) and/or Isolex(R) Products used for the selection of cells
with one or more of the XX00, X Xxxx, X Cell or breast cancer antibodies
for the treatment, mitigation, prophylaxis or selection of/for cancer,
including the research market; and any product used for the treatment,
mitigation, prophylaxis or selection of/for cancer based upon the selection
or use of CD34+ cells, including the research market; but excluding the
genetic manipulation of such cells.
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G. "Fully Loaded Cost" means, for either party, such party's cost
of manufacturing, performing or acquiring any items or services, in
accordance with generally accepted accounting principles, consistently
applied ("GAAP"), and, with respect to each party, in accordance with such
party's normal accounting policies, all consistently applied, including any
royalties payable by such party in connection with manufacturing,
performing or acquiring any items or services, but excluding, in the case
of Xxxxxx'x Fully Loaded Cost, any royalty obligations of Baxter that are
paid or reimbursed by Newco pursuant to the Sublicense Agreements. Fully
Loaded Cost shall not include general corporate allocations or other
allocations which are not directly related to the manufacture, performance
or acquisition of the item or service, however designated. A charge for
the cost of funding the party's working capital needs for such manufacture,
performance or acquisition of items or services, including capital
expenditures for facilities and/or equipment and capitalized manufacturing
costs, will be included in Fully Loaded Cost, which charge will be made at
the interest rate paid by Baxter on its then most recent issuance of
commercial paper; provided, however, that no charge shall be made for any
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cost of, or the cost of funding any, changes in the site of manufacturing
any Manufactured Products. In the event any item is acquired or any
service is provided for a party from or by an Affiliate of such party, the
cost of acquiring such items or services shall be deemed to mean such
Affiliate's actual cost of manufacturing, performing or acquiring such
items or services in accordance with the principles set forth in this
definition of "Fully Loaded Cost." Current costs of developing any items
or services shall be included in Fully Loaded Cost, but in no event shall
any historic development costs be included in Fully Loaded Cost. An
example of the calculation of Fully Loaded Cost is attached hereto, for
illustrative purposes, as Schedule 1.
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H. "Isolex(R) and Maxsep(R) Products" means, individually and
collectively, the products listed on Schedule 2 attached hereto, which
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includes Isolex(R) and Maxsep(R) instruments and Isolex(R) and Maxsep(R)
disposable sets, in each case as currently produced by Baxter utilizing the
Isolex(R) and Maxsep(R) Technology. From time to time, the products
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listed on Schedule 2 will be changed by the parties to add new products,
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line extensions and improvements as are currently under development, are in
research, or have been identified as proposed new products in Schedule 1 of
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the Hardware and Disposables Manufacturing Agreement, or that Baxter may
agree to develop pursuant to the Services Agreement, in each case as
consistent with the nature of the Isolex(R) and Maxsep(R) Products existing
at the date of this Agreement and with Xxxxxx'x legal obligations and
technological capabilities (including, without limitation, regulatory
requirements applicable to Baxter) during the term of this Agreement, and
such new products, line extensions and improvements added to Schedule 2
shall thereafter be treated as Isolex(R) and Maxsep(R) Products for all
purposes of this Agreement.
I. "Isolex(R) and Maxsep(R) Technology" means automated systems
for positive and negative immunomagnetic cell selection.
J. "Products" means, collectively, the finished goods of the
Isolex(R) and Maxsep(R) Products and Reagent Kits and other goods used in
conjunction with Isolex(R) and Maxsep(R) Products. as indicated in Schedule
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2 attached hereto.
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K. "Product Code" means number and/or letter designations
individually assigned to Products and Reagent Kits, as indicated in
Schedule 2 attached hereto.
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L. "Product Field" means the treatment, mitigation or prophylaxis
of diseases including research into such activities, through Ex Vivo Cell
Processing.
M. "Reagent Kits" means the reagent kits specified in Schedule 1
attached to the Antibody Manufacturing and Storage Agreement and such other
reagent kits as may be used from time to time in connection with the
Isolex(R) and Maxsep(R) Products. A current direction insert of a sample
Reagent Kit is included as Schedule 3 attached hereto.
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N. "Regulatory Approval" means (1) in the United States, approval
from the FDA and any other United States governmental authority (or agency
or other political
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subdivision thereof) necessary for the right to market, sell or distribute
the Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products in
the United States to the public at large, for use in the Field of
Distribution, and (2) outside the United States, an analogous order by a
non-U.S. governmental authority (or agency or other political subdivision
thereof) necessary for the right to market, sell or distribute, and the
right to be paid or reimbursed for, the Isolex(R) and Maxsep(R) Products,
Reagent Kits and other Products in a country (other than the United States)
to the public at large, for use in the Field of Distribution.
O. "Total Net Sales" means the Total Net Sales projection shown
in the "Plan A" Projections attached hereto as Schedule 6.
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2. TERM OF AGREEMENT.
2.1 Duration: The term of this Agreement (the "Term"), unless
earlier terminated as provided below, shall be eleven (11) years, commencing on
the date hereof. The Term may be extended upon the mutual written agreement of
the parties.
2.2 Early Termination: A non-breaching party may terminate this
Agreement if any of the following events (each is herein referred to as a
"Material Breach") occur:
A. A party fails to pay any amount owing under this Agreement, on
the date(s) specified for such payment and such failure shall continue for
sixty (60) days after written notice of such failure by the other party to
this Agreement;
B. A party shall default in the performance of or compliance with
any covenant contained in this Agreement (other than a failure to make a
payment described in Section 2.2A above or a default the liability for
which is excused under Section 5.4 or Section 13 hereof) which shall
continue uncured beyond the applicable grace period therefor;
C. A receiver, conservator, custodian, liquidator or trustee of a
party or of all or any of the property of a party, is appointed by court
order and such order remains in effect for more than ninety (90) days; or
an order for relief is entered under the federal bankruptcy laws with
respect to a
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party; or any of the material property of a party is sequestered by court
order and such order remains in effect for more than ninety (90) days; or a
petition is filed against a party under the bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
law of any jurisdiction, whether now or hereafter in effect, and is not
dismissed within ninety (90) days after such filing;
D. A party files a petition in voluntary bankruptcy or seeking
relief under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, or consents to the filing
of any petition against it under any such law;
E. A party makes an assignment for the benefit of its creditors,
or admits in writing its inability to pay its debts generally as they
become due, or consents to the appointment of a receiver, conservator,
custodian, liquidator or trustee of the party, or of all or any part of its
property; or
F. Prior to a Qualified Public Offering (as that capitalized term
is defined in that certain Stockholders Agreement by and among VIMRx,
Baxter and Newco, among others, of even date herewith), Baxter and VIMRx do
not, collectively, have the power to control Newco.
2.3 Continued Purchase and Supply: Despite early termination of
this Agreement under Section 2.2 above, Baxter will continue to purchase from
Newco and Newco will continue to supply and fill Xxxxxx'x orders of any Product
until the entire supply of any Product specifically inventoried or being
prepared for Baxter shall be depleted; however, Baxter shall not be required to
purchase, after the termination of this Agreement, any Product inventory in
excess of its average two (2) months' requirement based on prior purchases
during the last full Agreement Year.
3. APPOINTMENT.
3.1 Exclusive Appointment: Subject to the terms and conditions
contained in this Agreement, and subject to Newco's right to market and co-
promote as described in Section 8, Newco appoints Baxter as its exclusive
worldwide marketing, sales and distribution entity for the Isolex(R) and
Maxsep(R) Products, Reagent Kits and other Products in the Field of
Distribution. Baxter accepts such an appointment.
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3.2 Right of First Offer: Baxter shall have a right of first
offer with respect to acquiring marketing, sales and distribution rights for
other products developed or acquired by Newco using the Isolex(R) and Maxsep(R)
Technology in the Product Field ("Future Opportunity"). After Newco notifies
Baxter of a Future Opportunity, Baxter will have sixty (60) days to respond to
Newco and to negotiate the material terms and conditions of an appointment to
market, sell and distribute such Future Opportunity prior to Newco discussing
the Future Opportunity with any and all third entities. The terms and
conditions of Xxxxxx'x appointment to distribute any such Future Opportunity
shall be negotiated by Newco and Baxter, bargaining in good faith, and
documented in a written agreement, signed by authorized representatives of both
parties. If, after notice to Baxter and expiration of sixty (60) days without
completed negotiation of the material terms of an agreement for marketing, sale
and distribution of such Future Opportunity, Newco desires to enter into an
agreement on a Future Opportunity with a third entity on terms or conditions
that are less favorable to Newco than the terms and conditions offered by or to
Baxter in connection with Xxxxxx'x right of first offer (a "New Offer"), then
Newco must give Baxter notice and an additional thirty (30) days to respond to
the offer on substantially the same terms and conditions as those of the New
Offer.
4. ADMINISTRATION, OVERSIGHT AND GOVERNANCE
4.1 Marketing Committee:
A. Administration of this Agreement will be accomplished by the
establishment of a "Marketing Committee." The Marketing Committee will
consist of representatives selected by each of Newco and Baxter, who
typically would include such representatives as Newco's Vice President for
Global Marketing, Xxxxxx'x Region Marketing Vice Presidents, and one or
more of Newco's Vice President of Product Development, Vice President of
Medical Affairs and Vice President of Finance and Product Managers. Each
party shall notify the other party of such selections and any changes
thereto. The Marketing Committee will meet in person or by teleconference
at least once in each calendar quarter to review the progress of Newco and
Baxter in the execution of their responsibilities under this Agreement and
to develop, review and agree on specific marketing plans and programs. At
least once annually prior to each Agreement Year the Marketing Committee
will prepare, review, agree upon and present to the Oversight Committee the
following: (a) a global, annual marketing plan, (b) a 12-month, global
sales forecast by month and product code (c) a 12-month marketing resources
commitment schedule ("Marketing Resource Plan"), and (d) a five-year global
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strategic plan, including a five-year global sales forecast by year and
product group. Regardless of the number of representatives selected by
each of Newco and Baxter for service on the Marketing Committee, the
representatives of each party shall have, in the aggregate, a single vote
in all matters to be decided by the Marketing Committee. If, in the course
of administering the activities contemplated in this Agreement, the
Marketing Committee cannot resolve a matter of difference between Baxter
and Newco representatives, or cannot reach agreement on a matter within its
area of responsibility under the terms of this Agreement, the Marketing
Committee shall promptly refer the matter to the Oversight Committee for
resolution in accordance with this Agreement.
B. During the first twelve (12) months of the Term hereof, the
Marketing Committee will (i) develop a transition plan for the satisfaction
of long-term customer agreements in place on the date hereof and
determination of appropriate pricing adjustments, if any, for products
purchased from Newco to satisfy such agreements; and (ii) develop a plan
for the transition to sales and marketing by Newco with respect to existing
Baxter customers for Newco products that will not be marketed, sold or
distributed by Baxter hereunder.
4.2 Oversight Committee: The "Oversight Committee" will consist
of one representative each from Newco and Baxter, the President of Newco and the
designee of the President of Baxter Biotech Group. The Oversight Committee will
meet once a year prior to each Agreement Year, or more often as necessary to
carry out its responsibilities hereunder, to review and approve the plans,
programs and recommendations prepared by the Marketing Committee. When the
Marketing Committee cannot agree on decisions and responsibilities under its
authority, the Oversight Committee will review and evaluate the issue under
dispute and come to an agreement or decision. When the Oversight Committee
cannot agree on the resolution of any matter within its area of responsibility
hereunder, it shall promptly refer the matter to the Corporate Committee for
resolution in accordance with this Agreement.
4.3 Corporate Committee: The "Corporate Committee" will consist
of one representative each from VIMRx and Baxter, who ordinarily will be the
President and CEO of VIMRx and the President of the Fenwal Division of Baxter,
respectively. The Corporate Committee will meet only as needed to resolve any
dispute under this Agreement or to decide any otherwise undecided matter
referred to it by the Oversight Committee. If the Marketing Committee cannot
agree upon the Marketing Resource Plan for any Agreement Year, and the Oversight
Committee and the Corporate Committee cannot resolve the dispute, then Baxter
will
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determine the Marketing Resource Plan for such Agreement Year, subject to the
provisions of Section 8 of this Agreement.
4.4 Responsibilities: Newco and Baxter will diligently execute
their separate responsibilities to assure successful marketing of products
contemplated under this Agreement. For guidance and illustrative purposes, a
list of the various functional responsibilities to be performed by Newco and
Baxter for purposes of this Agreement are attached as Schedule 4. If and when
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individual functions and responsibilities not previously identified or assumed
by either Newco or Baxter become evident, the Oversight Committee shall assign
such functions or responsibilities.
5. MANUFACTURE AND SUPPLY.
5.1 Obligation to Supply: Newco shall exercise its reasonable
efforts to manufacture and supply the Isolex(R) and Maxsep(R) Products, Reagent
Kits, other Products and spare parts or make satisfactory arrangements for the
manufacture and supply of the Isolex(R) and Maxsep(R) Products, Reagent Kits,
other Products and spare parts for Baxter, provided that Newco shall have no
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obligation to supply the T Cell antibody, or any Reagent Kits containing the T
Cell antibody, unless and until Baxter or a third party undertakes the
manufacturing of such T Cell antibody after the date of this Agreement. Newco
shall make the investment required to enable it to manufacture and supply or
make satisfactory arrangements for the same, as required. Newco, or its
contract manufacturer, shall comply with the regulations of the country of
manufacture and the country of sale as related to the production of the
Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products (for example,
Quality System Regulation ("QSR") of the FDA).
5.2 Changes to Suppliers, Manufacturers or Specifications:
Newco may change suppliers, contract manufacturers or the specifications of
Isolex(R) and Maxsep(R) Products, Reagent Kits, other Products and spare parts
without notice to or approval of Baxter, provided that any such change has been
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presented for review and approval by the Marketing Committee at least ninety
(90) days before it becomes effective, and has been approved by the Marketing
Committee, and provided, further, that Newco will be responsible for obtaining
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any required Regulatory Approval with respect to such changes and, subject to
the provisions of the Hardware and Disposables Manufacturing Agreement, the
Antibody Manufacturing and Storage Agreement and the Hardware and Disposables
Supply Agreement, will be responsible for all costs associated with such change,
including without limitation the cost of field upgrades.
5.3 Forecasting: Prior to the beginning of each calendar month
during the term of this Agreement, Baxter shall provide Newco with a rolling
eighteen month forecast of the orders it expects to place for the Isolex(R) and
Maxsep(R) Products, Reagent Kits, and other Products during the next eighteen
(18) months. Forecasting activities under this Agreement will be coordinated
with the forecasting activity occurring under the provisions of the Hardware and
Disposables Manufacturing, Antibody Manufacturing and Storage, and Hardware and
Disposables Supply Agreements, and will be reviewed with the Marketing
Committee. The forecast for the
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first two months of each eighteen month forecast will constitute binding orders.
The forecast for the first of the eighteen months in such eighteen month
forecast must be the same as the forecast for the second month in the previous
eighteen month forecast; and the forecast for the second of the eighteen months
in such eighteen month forecast may not increase the number of orders shown in
the forecast for such month in the previous eighteen month forecast by more than
[Confidential Information Omitted]. The parties shall cooperate in good faith in
creating and providing other, longer range forecasts which shall be used in
budget planning for the parties. The initial forecast for the eighteen month
period beginning on the date hereof was delivered to Newco on the date hereof.
5.4 Fill Rate Commitment: After the first twelve (12) months of
the Term hereof, Newco agrees to achieve and maintain an overall first delivery
"fill rate" on Xxxxxx'x orders for Products of at least [Confidential
Information Omitted]. For the purpose of this Agreement, "fill rate" shall be
defined as lines of product shipped on the date specified in Xxxxxx'x purchase
order, divided by lines of product ordered, times 100. Fill rate will be
monitored by Newco and Baxter and reviewed by the Marketing Committee. If, after
the first twelve (12) months of the Term hereof, Newco's fill rate over the
course of two (2) consecutive calendar quarters should fall below [Confidential
Information Omitted], then the Marketing Committee shall create a remedial plan
to handle backorders of the Products and to assist Newco in reestablishing the
[Confidential Information Omitted] fill rate. Subject to Section 15
and Section 16, Newco will be responsible for cost and expenses incurred by
Baxter as a result of Newco's shortfall, provided that, in the event such
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shortfall is caused by a manufacturing defect or by a manufacturing or supply
delay of Baxter under any of the Hardware and Disposables Manufacturing
Agreement, the Antibody Manufacturing and Storage Agreement, the Hardware and
Disposables Supply Agreement or the Services Agreement, Newco shall have no
responsibility for any cost, expense, liability, loss or damage incurred by
Baxter as a result of such shortfall and provided further that Newco shall have
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no responsibility for any such cost, expense, liability, loss or damage incurred
by Baxter during the first twelve (12) months of the Term hereof. The
[Confidential Information Omitted] fill rate commitment established pursuant to
this Section may be adjusted by the parties during the Term hereof as may be
appropriate to reflect actual manufacturing experience.
5.5 Discontinuance of Product Line: Subject to Section 5.6
below, if Newco wishes to discontinue a product line which includes any
Isolex(R) and Maxsep(R) Products, Reagent Kits or other Products, the parties
will negotiate appropriate closure conditions which provide for recovery by
Baxter of any related overhead costs, any related investment and related direct
out-of-pocket expenses.
5.6 Right of First Offer: In the event Newco elects to abandon
and/or discontinues substantially all efforts to develop or market (or to have
developed or marketed) the Isolex(R) or Maxsep(R) Products, Reagent Kits and
other Products, or any of them (the "Discontinued Products"), within the Product
Field or any sub-field thereof, and Newco elects to sell Newco's right to make,
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have made, use and sell the Discontinued Products in the Product Field or any
sub-field thereof, to a third party, Baxter shall have right of first offer to
obtain an exclusive, worldwide license under the Isolex(R) and Maxsep(R)
Technology to make, have made, use and sell, in such Product Field or sub-field,
those Discontinued Products. After Newco notifies Baxter of
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Newco's intention to sell such right, Baxter will have sixty (60) days to
respond to Newco and to negotiate the material terms and conditions of such a
license. The terms and conditions of such a license shall be negotiated by
Newco and Baxter, bargaining in good faith, and documented in a written
agreement, signed by authorized representatives of both parties. If, after
notice to Baxter and expiration of sixty (60) days without completed negotiation
of the material terms of a license agreement, Newco desires to enter into an
agreement with a third party on terms and conditions that are less favorable to
Newco than the terms and conditions offered by or to Baxter (a"New Offer"), then
Newco must give Baxter notice and an additional thirty (30) days to respond to
Newco's offer on substantially the same terms and conditions as those of the New
Offer. The culmination of any transaction pursuant to this Section 5.6 is
subject to the parties entering into a definitive agreement on terms which are
agreeable to each of the parties, in their sole discretion.
6. PURCHASE OF PRODUCT.
6.1 Product Pricing: Newco will recommend to Xxxxxx a suggested
price for the Products to be sold in the Field of Distribution ("Suggested
Retail Price"). Such Suggested Retail Price will be provided by Product Code
and by Xxxxxx Region and Newco may specify separate Suggested Retail Prices for
use in connection with long-term contracts, industrial accounts and reagent
rental agreements. Newco will provide Suggested Retail Prices no later than
March 31, 1998. In the interim, Suggested Retail Prices will be as set forth on
Schedule 5. After March 31, 1998, Newco may adjust the Suggested Retail Price
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annually after considering factors such as historical sales data and instrument
placements, regulatory environment and status of Regulatory Approval, outcome
data relative to the Isolex(R) and Maxsep(R) Technology and certain disease
states, reimbursement conditions and general acceptance of the Isolex(R) and
Maxsep(R) Technology by the medical community, and the status of Newco's
achievement of certain milestones as described in the Acquisition Agreement,
provided that no single annual adjustment shall exceed the sum of (i)
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anticipated increases in Newco's Fully Loaded Cost of the Product in question
and (ii) a percentage of the Suggested Retail Price for the immediately
preceding Agreement Year, which percentage is equal to the percentage increase
in the United States Consumer Price Index or the equivalent published inflation
index generally applied in the Xxxxxx Region for which a Suggested Retail Price
is being adjusted. In the event that there is no published inflation index
generally applied in the Xxxxxx Region in question, the percentage in clause
(ii) above shall be equal to the weighted average of the inflation rates for the
immediately preceding year in each of the countries in such Xxxxxx Region,
weighted by sales volume and price for such immediately preceding year. Annual
adjustments to the Suggested Retail Price will be delivered to the Marketing
Committee for use in its preparation of the global, annual marketing plan prior
to each Agreement Year, and shall be delivered to Xxxxxx no later than sixty
(60) days before the end of each Agreement Year. In addition, Newco may review
and adjust the Suggested Retail Price during an Agreement Year, provided that
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adjustments during an Agreement Year may not exceed the amount of anticipated
increases during the Agreement Year in Newco's Fully Loaded Cost of the Product
in question.
6.2 Xxxxxx Purchase Price: Except as provided in Section 6.3,
the price of the sale of Products to Xxxxxx will be a percentage of Newco's
Suggested Retail Price
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determined in accordance with the following schedule (based on the extent to
which Xxxxxx is able to meet or exceed the sales projections contained in the
"Plan A" projections attached hereto as Schedule 6):
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Percentage of Newco's Suggested Retail Price
Portion of Sales
(Percentage of
"Plan A" Total Agreement Agreement Agreement Years
Net Sales) Years 1-3 Years 4-5 6 and Later
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[Confidential Information Omitted]
When Total Net Sales during any Agreement Year equal [Confidential Information
Omitted] of Total Net Sales for such Year shown in the "Plan A" Projections,
the price of the sale of Products to Xxxxxx shall be adjusted to the percentage
of Suggested Retail Price shown in the above schedule for the next incremental
portion of sales, and further adjustments will be made where indicated in the
above schedule when Total Net Sales during the Agreement Year equal
[Confidential Information Omitted] and [Confidential Information Omitted] of
Total Net Sales for such Year shown in the "Plan A" Projections.
Xxxxxx is solely responsible for establishing the price for sale to the customer
of Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products.
6.3 "Cost Recovery" Product: Newco recognizes that, prior to
regulatory approval in certain countries, the Products can only be provided to
customers under "Cost Recovery" programs. For such programs, the price of the
Products to Xxxxxx will be the greater of (i) a percentage of the cost recovery
price to the end user that is the same as the percentage determined in
accordance with the schedule in Section 6.2 above, or (ii) Newco's Fully Loaded
Cost for the Products. Xxxxxx will provide and distribute the Products prior to
regulatory approval to the end user at the cost recovery price.
6.4 "Minimal" or "No Charge" Sales Transactions with Customers: The
parties may, from time to time, agree to make specified Isolex(R) and Maxsep(R)
Products, Reagent Kits and other Products available to customers with a minimal
charge or at no charge, as part of an advertising and promotion program. The
Marketing Committee shall be responsible for developing and approving any such
program and shall determine the amount, if any, to be paid to Newco for such
Products in connection with the Marketing Committee's development of a
promotional program budget.
13
6.5 "Plan A" Projections means the Projected Total Net Sales shown in
Schedule 6, and represent sales goals for Xxxxxx'x worldwide sales of the
----------
Isolex(R) and Maxsep(R) Products and Reagent Kits in the Field of Distribution.
6.6 Payment and Shipping Terms: Newco shall xxxx Xxxxxx as of
the end of each calendar month for Products shipped to customers during the
month and for sales and marketing expenses for the month pursuant to Section
8.1(B). Xxxxxx shall pay such invoices within sixty (60) days of Xxxxxx'x
receipt thereof. Isolex(R) and Maxsep(R) Products, Reagent Kits and other
Products are to be shipped F.O.B. to Xxxxxx'x destination designated in the
purchase order. Xxxxxx'x designated destination may include a Xxxxxx facility or
a customer's facility. Unless otherwise agreed in writing, Newco shall pay all
freight charges. Xxxxxx will be solely responsible for meeting export/import
requirements, arranging for the appropriate documentation and licenses and
paying associated fees for shipments made outside the U.S. Newco will cooperate
with Xxxxxx as necessary to meet appropriate export/import regulations.
6.7 Acceptance of Shipment/Return of Goods: Baxter may inspect
or audit the Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products
for integrity and adherence to the product specifications. If any of the
Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products of a
continuous production run or shipment (a "Lot") are not manufactured or supplied
by Xxxxxx under any of the Hardware and Disposables Manufacturing Agreement, the
Hardware and Disposables Supply Agreement or the Antibody Manufacturing and
Storage Agreement and fail to meet Newco's warranties or to conform to product
specifications, Xxxxxx shall notify Newco in writing within 120 days, and
thereafter Xxxxxx may return such Lot and, at Xxxxxx'x option and at Newco's
expense, Xxxxxx shall receive a credit, refund or replacement for such Products.
If Newco so requests, Xxxxxx will return any such Products to Newco at Newco's
expense.
6.8 Controlling Document: Newco shall acknowledge receipt of
each Xxxxxx purchase order in writing within ten (10) business days after
receipt thereof and confirm delivery dates to destinations specified by Xxxxxx.
All sales of Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products
shall be subject to the terms and conditions of this Agreement and, to the
extent they specify quantities, destinations and delivery dates, to Xxxxxx
purchase orders. This Agreement shall not be subject to the terms, conditions
or provisions of any business form of Newco; any confirmation of Newco is
subject to this Agreement.
6.9 Xxxxxx shall provide monthly sales reports as customarily
generated by Xxxxxx with standard detailing of the sales volume. These reports
shall be adequate for reporting any royalties payable by Newco pursuant to the
terms of the License Agreements, shall be delivered to the attention of Xxxxx
Xxxxx--Finance at Newco within thirty (30) days after the end of each month, and
shall be reviewed by the Marketing Committee.
7. COMPLIANCE WITH REGULATORY REQUIREMENTS.
14
7.1 Regulatory Requirements: Except as provided below, and except
for those regulatory responsibilities allocated to Xxxxxx pursuant to the other
Transaction Documents (as such, capitalized term is defined in the Acquisition
Agreement) between Newco and Xxxxxx, Newco shall be responsible for meeting
regulatory requirements and for obtaining reimbursement pertaining to the
manufacturing, marketing, sales, distribution and utilization of the Isolex(R)
and Maxsep(R) Products, Reagent Kits and other Products. Newco's obligation is
applicable to each country, state, region or locality in which Xxxxxx either
markets, sells and distributes or plans to market, sell and distribute the
Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products. To assist
Newco in meeting this obligation, Xxxxxx shall be diligent in advising Newco of
its plans to enter, remain active, or depart from specific countries, states,
regions or localities relative to the marketing, sales and distribution of the
Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products. Further,
Xxxxxx will be obligated to meet all applicable regulations relative to its role
as exclusive seller and distributor of the Isolex(R) and Maxsep(R) Products,
Reagent Kits and other Products. Newco's regulatory responsibilities include
conducting any necessary clinical trials to gather safety and effectiveness data
to support marketing applications to FDA or other governmental or quasi-
governmental authorities, while Xxxxxx shall be responsible for conducting
marketing studies. Initiation of clinical studies will be coordinated between
Xxxxxx Regions and Newco to assure minimal impact to Xxxxxx'x sales to
established customers where Xxxxxx has previously installed an Isolex(R) or
Maxsep(R) instrument. Initiation of marketing studies will be coordinated
between Xxxxxx Regions and Newco for continuity.
7.2 Regulatory Actions: Newco's and Xxxxxx'x responsibilities
for all regulatory actions related to the Products or components thereof
manufactured or supplied by or on behalf of Xxxxxx will be determined in
accordance with the terms of the Hardware and Disposables Manufacturing
Agreement, the Antibody Manufacturing and Storage Agreement and the Hardware and
Disposables Supply Agreement, as the case may be. For all other Products, Newco
shall be responsible for all regulatory actions and incur all costs of such
actions, Xxxxxx will cooperate and assist Newco, at Newco's expense, with any
regulatory action, and Xxxxxx will maintain and provide Newco with a current
customer list as needed solely for regulatory actions. As used in this
paragraph, "regulatory actions" mean: mandatory notifications, repairs,
replacements and refunds; safety alerts; "cease distribution and notification"
and mandatory recall actions; voluntary recalls, market withdrawals or stock
recoveries; and device removals and corrections, as defined or understood under
law or FDA policy, or related or analogous actions.
7.3 Product Complaints: Xxxxxx shall complete product complaint
forms provided by Newco to Xxxxxx and forward any product complaint information
to Newco's post quality assurance group. Newco and Xxxxxx will work together to
manage product complaints in an effective and responsive manner. Should Xxxxxx
or its customers receive significant amounts of defective Product, Newco will
issue to Xxxxxx, or to a customer if directed to do so by Xxxxxx, a refund for
such Product or, at Xxxxxx'x option, replacement Product.
15
7.4 Distributor MDR Responsibilities: To the extent required by law,
Baxter shall comply with distributor medical device reporting (MDR)
responsibilities as set forth in 21 C.F.R. Part 804 relative to the Isolex(R)
and Maxsep(R) Products, Reagent Kits and other Products.
8. MARKETING OF PRODUCT.
8.1 Obligation to Market:
X. Xxxxxx shall strive to achieve and exceed Total Net Sales figures shown
in the "Plan A" Projections of Schedule 6. Xxxxxx agrees to follow the
----------
Marketing Resource Plan as approved and revised by the Marketing Committee
from time to time and subject to the provisions of Section 4 of this
Agreement; and Xxxxxx further agrees that following the receipt of Regulatory
Approval in the United States for the Isolex(R) 300SA, Xxxxxx will expend at
least the following minimum budgeted amounts (expressed below as a percentage
of projected Total Net Sales shown in the "Plan A" Projections) for expenses
of sales and marketing of the Isolex(R) and Maxsep(R) Products and Reagent
Kits hereunder, provided that such amount shall not be less than [Confidential
--------
Information Omitted] per calendar year for each of the first four (4)
Agreement Years of the Term (a pro rata portion of such amount for 1997, the
--- ----
first Agreement Year hereunder, or, if such Regulatory Approval is not
obtained in 1997, for any subsequent Agreement Year during which such
Regulatory Approval is obtained)(the "Budgeted Expenses"):
Agreement Year Percentage of Projected Total Net Sales
-------------- ---------------------------------------
1997 [Confidential Information Omitted]
1998 [Confidential Information Omitted]
1999 [Confidential Information Omitted]
2000 [Confidential Information Omitted]
2001 [Confidential Information Omitted]
2002 [Confidential Information Omitted]
Budgeted Expenses, for this purpose, will include (a) direct,
indirect and allocated expenses (as allocated in accordance with Xxxxxx'x
standard practices applied consistently to all Xxxxxx'x divisions and
businesses) of Xxxxxx for the sales and marketing of Products, and (b)
certain co-marketing expenses of Newco as provided in Section 8.1(B) below.
The portion of Budgeted Expenses comprising Baxter expenses includes, but
is not limited to, expenses associated with salaries, benefits,
training,installation
16
of instruments, customer services, customer
operations/administration, selling and promotional
activities, warehousing, freight and delivery of Products,
field service, clinical education, documentation, reprint
acquisition and other materials and equipment such as
telephone lines and 800 number telephone services. Xxxxxx'x
sales and marketing efforts, which will comply with
regulatory requirements, may include the development of
promotional materials, certain customer letters,
sales calls, presentations and other documentation in
support of marketing and sales personnel representation of
the Isolex(R) and Maxsep(R) Products and Reagent Kits.
Xxxxxx shall coordinate the production of promotional
materials with Newco so that the parties' marketing efforts
are complementary and so that Newco may comply with
regulatory requirements as may apply to such materials.
Xxxxxx'x efforts may also include, at its sole discretion,
the funding of marketing studies relating to the Isolex(R)
and Maxsep(R) Products and Reagent Kits in the Field of
Distribution. Xxxxxx will coordinate the initiation and
completion of such marketing studies with Newco.
B. Newco shall provide sales and marketing personnel to perform
sales and marketing functions as specified in the Marketing
Resource Plan, to assist Xxxxxx in marketing the Products in
the Field of Distribution. Identified in the Marketing
Resource Plan and included in the minimum Budgeted Expenses
set forth in Section 8.1(A) above, will be a mutually agreed
portion of Budgeted Expenses for product detailing to be
conducted by Newco, and related advertising expenses
(hereinafter, the "Newco Marketing Budget"). Xxxxxx shall
pay to Newco the amount of the Newco Marketing Budget in
equal monthly installments billed to Xxxxxx by Newco in
accordance with Section 6.6.
C. From time to time, Newco may elect, in its sole discretion,
to engage in, and to advance the cost of ("Additional
Expenses"), sales and marketing activities, in addition to
those conducted by Xxxxxx and Newco in accordance with
Sections 8.1(A) and 8.1(B) above, related to the Products
being distributed by Xxxxxx within the Field of
Distribution. In the event that Xxxxxx does not expend at
least the minimum Budgeted Expenses for any of the first six
Agreement Years, then the positive difference between (i)
the minimum Budgeted Expenses for such Agreement Year as set
forth in Section 8.1(A) above, and (ii) the amounts actually
expended by Xxxxxx for sales and marketing expenses
hereunder during such Agreement
17
Year (including amounts paid to Newco pursuant to Section
8.1(B) above) (the "Xxxxxx Marketing Expense Shortfall")
shall be applied to reimburse Newco's Additional Expenses
described in the preceding sentence of this Section 8.1(C).
Additional Expenses for this purpose, will include direct,
indirect and allocated expenses of the sales and marketing
of Isolex(R) and Maxsep(R) Products in the Field of
Distribution . During the first six (6) Agreement Years,
both the amount, if any, of Newco's unreimbursed Additional
Expenses and the amount, if any, of the Xxxxxx Marketing
Expense Shortfall that is not applied to the reimbursement
of Newco Additional Expenses for any Agreement Year, shall
be cumulative and carried over for use in the succeeding
Agreement Years; and the negative difference between (a) the
minimum Budgeted Expenses for such Agreement Year as set
forth in Section 8.1(A) above, and (ii) the amounts actually
expended by Xxxxxx for sales and marketing expenses
hereunder during such Agreement Year (including amounts paid
to Newco pursuant to Section 8.1(B) above) (the "Xxxxxx
Marketing Expense Surplus") shall be cumulative and carried
over to offset any Xxxxxx Marketing Shortfall(s) in
succeeding Agreement Years.
8.2 Technical Materials & Medical Inquiries: Newco will be
responsible for developing, publishing and revising, as appropriate, all
technical and educational materials (for example, technical articles, abstracts,
publications) relating to the Isolex(R) and Maxsep(R) Products, Reagent Kits and
other Products. These technical and educational materials will be provided to
Xxxxxx and Xxxxxx'x customers free of charge. Newco shall retain a Medical
Affairs staff to handle the medical inquiries from Xxxxxx and Xxxxxx'x
customers. Xxxxxx may, from time to time, request Newco to prepare certain
technical or educational materials and Newco shall meet such requests as are
reasonable.
8.3 Newco's Right to Market, Sell and Distribute: Newco
shall be solely responsible for its own marketing, selling and distribution
efforts for the Isolex(R) and Maxsep(R) Products, Reagent Kits and other
Products outside the Field of Distribution. Newco shall apprise Xxxxxx on a
periodic basis of its activities in this regard so that the parties' marketing
and selling efforts are complementary.
8.4 Customer Feedback: As either party develops, surveys or
otherwise receives feedback from customers, operators and others relative to the
Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products, it will share
the results and data obtained with the other. The parties may choose to jointly
seek customer feedback or use similar data to agree upon changes or improvements
to the Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products, to the
delivery, installation and maintenance of the Isolex(R) and Maxsep(R) Products,
Reagent Kits
18
and other Products, the training of operators or the technical presentation of
the Isolex(R) and Maxsep(R) Products, Reagent Kits and other Products.
8.5 Use of Trademarks: Either party may use the trademarks,
trade names, service marks and corporate logos of the other party on a non-
exclusive royalty-free, worldwide basis solely in connection with the marketing,
sales and distribution of the Isolex(R) and Maxsep(R) Products, Reagent Kits and
other Products. No other use of the trademarks, trade names or corporate logos
is permitted. Nothing herein shall give either party any right, title or
interest in or to the other party's trademarks or trade names. Neither party
shall at any time assert any claim to any goodwill, reputation or ownership of
the other party's trademarks, trade names or corporate logo. All uses of a
party's trademarks or trade names shall inure to the benefit of that party. The
parties agree that the Isolex(R) and Maxsep(R) Products, Reagent Kits and other
Products as well as promotional materials will, after a reasonable transition
period of time, be labeled and primarily referred to as products of Newco and
will bear Newco's name. Xxxxxx'x name and logo may be used, particularly if and
when required by regulatory guidelines, to indicate Xxxxxx'x exclusive
appointment as the marketer, seller and distributor of the Product in the Field
of Distribution and Xxxxxx'x manufacture of any Product or component thereof.
The parties also agree that Xxxxxx may continue to use and deplete its existing
stock of promotional materials relating to the Isolex(R) and Maxsep(R) Products,
Reagent Kits and other Products.
8.6 Service Contracts: Xxxxxx may market and sell service
contracts for maintenance and repair of the Isolex(R) and Maxsep(R) Products
sold by Xxxxxx hereunder and will manufacture, maintain an inventory of, and
sell or otherwise distribute, spare parts in connection therewith. All revenues
from such service contracts shall be retained by Xxxxxx and all costs and
expenses incurred by Xxxxxx in maintaining an inventory of spare parts,
marketing and performing pursuant to such service contracts shall be borne
solely by Xxxxxx.
9. INSTALLATION, TRAINING AND MAINTENANCE OF INSTRUMENT PRODUCT.
9.1 Operator Training: Newco will develop, publish and
revise as needed all technical operational materials (for example, operator
manuals) relating to the Isolex(R) and Maxsep(R) instruments. Further, Newco
shall train Xxxxxx personnel and provide technical customer support as requested
by Baxter free of charge. The costs of technical customer support activities as
requested by Baxter and performed by Newco will be part of the Newco Marketing
Budget to be mutually agreed and paid in accordance with Section 8.1(B) above.
9.2 Installation and Maintenance: Xxxxxx will be responsible
for the installation and servicing of the Isolex(R) and Maxsep(R) Products, as
well as customer training, where Baxter has manufactured the Products under the
Hardware and Disposables Manufacturing Agreement. Baxter will also be
responsible for customer support to include customer phone hotline coverage to
handle initial customer inquiries and complaints. In addition, Baxter will
offer to customers service and maintenance contracts for Isolex(R) and Maxsep(R)
instruments for post-
19
warranty servicing of the instruments, provided Baxter has manufactured the
Products under the Hardware and Disposables Manufacturing Agreement.
10. FOREIGN CURRENCY CONVERSION. Where calculations of Xxxxxx'x
Fully Loaded Cost, Newco's Fully Loaded Cost or Newco's Suggested Retail Price
relate to currency other than United States dollars, all such calculations shall
be made pursuant to Xxxxxx'x then current accounting policies and practices, as
consistently applied.
11. WITHHOLDING TAXES. Where required to do so by applicable law,
Xxxxxx shall withhold taxes required to be paid to a taxing authority on account
of any payments to Newco hereunder, and Xxxxxx shall furnish Newco with
satisfactory evidence of such withholding and payment in order to permit Newco
to obtain a tax credit or other such relief as may be available under applicable
laws. Xxxxxx shall cooperate with Newco in obtaining exemption from withholding
taxes wherever available under applicable law.
12. INTEREST ON OVERDUE PAYMENTS. Interest shall accrue and be
payable on all overdue payments owing by a party under this Agreement from the
date due at the rate of [Confidential Information Omitted] per month (or the
highest rate allowed by law, if lower), compounded annually, until fully paid
(including full payment of such interest).
13. WARRANTIES.
13.1 Warranty: Newco shall warrant or shall obtain such
warranty from its suppliers and contract manufacturers that the Isolex(R) and
Maxsep(R) Products, Reagent Kits and other Products delivered to or at the
direction of Xxxxxx hereunder (i) will have been manufactured in accordance with
the applicable specifications, procedures and product drawings/blueprints and
all applicable laws and (ii) are free from defects in workmanship. This
warranty shall be continuing and shall be binding on Newco, its suppliers and
contract manufacturers and Newco's permitted successors and assigns and shall
inure to the benefit of Xxxxxx and its permitted successors and assigns. Xxxxxx
shall represent to its customers that any product which it distributes on behalf
of a manufacturer other than Xxxxxx is warranted by the manufacturer and not
Xxxxxx.
13.2 Xxxxxx Indemnity: Subject to Section 16 below, Xxxxxx
agrees to indemnify Newco and hold it harmless from any liability, loss,
expense, cost, claim or judgment arising out of any claim for property damage,
personal injury or death which is caused by Xxxxxx'x failure to meet its
obligations with respect to regulatory compliance as set forth in section 7.1,
regulatory actions as set forth in section 7.2, product complaints as set forth
in section 7.3, distributor responsibilities as set forth in section 7.4, or
which arises out of Xxxxxx'x performance of service contracts or sales and
marketing activities performed by Xxxxxx personnel. At Xxxxxx'x expense, Newco
shall cooperate fully with Xxxxxx in defending or otherwise resolving any such
claim. Xxxxxx shall have full control of any litigation brought against Newco
with respect to any
20
claim that is indemnifiable by Xxxxxx hereunder; but Newco may at its expense,
also be represented by its own counsel in any such litigation.
13.3 Newco Indemnity: Subject to Section 16 below, Newco
agrees to indemnify Xxxxxx and hold it harmless from any liability, loss,
expense, cost, claim or judgment arising out of any claim for property damage,
personal injury or death which is caused by defects in the products, design,
specifications, procedures, product drawings/blueprints, label copy, or
resulting from the use of the Isolex(R) and Maxsep(R) Products, Reagent Kits and
other Products or which arises out of sales and marketing activities performed
by Newco personnel, provided, however, that Newco shall have no liability to
-------- -------
Xxxxxx whatsoever with respect to any liability, loss, expense, cost, claim or
judgment arising out of any claim for property damage, personal injury or death
which is caused by defects in the designs, specifications, procedures, or
product drawings/blueprints acquired by Newco from Xxxxxx pursuant to the
Acquisition Agreement, except defects in modifications to such designs,
specifications, procedures, or product drawings/blueprints made by Newco
subsequent to its acquisition thereof. At Newco's expense, Xxxxxx shall
cooperate fully with Newco in defending or otherwise resolving any such claim.
Newco shall have full control of any litigation brought against Xxxxxx with
respect to any claim that is indemnifiable by Newco hereunder; but Xxxxxx may at
its expense, also be represented by its own counsel in any such litigation.
14. INDEMNIFICATION FOR INFRINGEMENT. Subject to Section 16 below,
Newco shall defend, indemnify and hold Baxter harmless with respect to any
liability incurred by Xxxxxx as a result of activities under this Agreement with
respect to any claim of patent, trade name, trademark or copyright infringement
or misuse (i) with respect to any Isolex(R) and Maxsep(R) Products, Reagent Kits
or other Products which are not being manufactured or supplied by Xxxxxx (or its
third party subcontractor) for or to Newco under this Agreement or an agreement
having the same date as this Agreement (or an extension or renewal thereof); or
(ii) arising from any modification to product designs, specifications,
procedures, or product drawings/blueprints made by Newco subsequent to its
acquisition thereof from Xxxxxx. At Newco's expense, Xxxxxx shall cooperate
fully with Newco in defending or otherwise resolving any such charges of
infringement or misuse. Newco shall have full control of any litigation brought
against Xxxxxx alleging such infringement or misuse; but Xxxxxx may at its
expense, also be represented by its own counsel in any such litigation.
15. FORCE MAJEURE. Neither party to this Agreement shall be liable
for delay or failure in the performance of any of its obligations hereunder if
such delay or failure is due to causes beyond its reasonable control, including
acts of God, fires, earthquakes, strikes and labor disputes, acts of war, civil
unrest or intervention of any governmental authority, but any such delay or
failure shall be remedied by such party as soon as is reasonably possible.
16. LIMITATION OF LIABILITY. IN NO EVENT, WHETHER AS A RESULT OF
BREACH OF CONTRACT, TORT LIABILITY (INCLUDING NEGLIGENCE), OR
21
OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL,
PUNITIVE, EXEMPLARY OR LIQUIDATED DAMAGES.
17. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION. If this Agreement
or any associated transaction is required by the law of any nation to be either
approved or registered with any governmental authority, or any agency or
political subdivision thereof, Newco shall assume all legal obligations to do
so.
18. NOTICES. All notices required under this Agreement shall be in
writing, and all such notices and other written communications (including
purchase orders) shall be delivered either by hand, by a nationally recognized
overnight delivery service (with delivery charges prepaid), by first class,
registered or certified United States mail (postage prepaid), or by facsimile
transmission (provided that in the case of facsimile transmission, a
confirmation copy of the notice shall be delivered by hand, by a nationally
recognized overnight delivery service (with delivery charges prepaid), or by
first class, registered or certified United States mail (postage prepaid) within
two (2) days of facsimile transmission), addressed to each party as follows:
If to Xxxxxx, such notices shall be delivered to:
President
Xxxxxx Biotech Group
with a copy to: General Counsel
Xxxxxx Healthcare Corporation
If to Xxxxxx, other written communications shall be delivered to:
President
Venture Management
Baxter Biotech Group
with a copy to: Associate General Counsel
Xxxxxx Healthcare Corporation
If to Newco, such notices shall be delivered to:
President
BIT Acquisition Corp.
with a copy to: Xxxxxxx Xxxxxx & Green, P.C.
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxx, Esq.
If to Newco, other written communications shall be delivered to:
President
BIT Acquisition Corp.
22
with a copy to: Vice President
BIT Acquisition Corp.
or such other address as any such party may designate in writing and delivered
to the other party hereto pursuant to this Section 18. All such notices or
other written communications shall be deemed to have been received by the
addressee if delivered by: hand or by a nationally recognized overnight
delivery service (with delivery charges prepaid) at the time of delivery; by
first class, registered or certified United States mail (postage prepaid), three
(3) business days after delivery thereof to the United States Postal Service; or
by facsimile transmission, at the time of transmission.
19. CHOICE OF LAW AND JURISDICTION. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Delaware,
without application of conflicts of law principles, and, subject to Section 26
below, each party hereby submits to the jurisdiction and venue of any state or
federal court in the State of Delaware. To the extent permissible by law, each
of the parties hereby waives, releases and agrees not to assert, and agrees to
cause its Affiliates to waive, release and not assert, any rights such party or
its Affiliates may have under any foreign law or regulation that would be
inconsistent with the terms of this Agreement as governed by Delaware law.
20. PROVISIONS CONTRARY TO LAW/SEVERABILITY. In performing this
Agreement, the parties hereto shall comply with all applicable laws. Nothing in
this Agreement shall be construed so as to require the violation of any law, and
wherever there is any conflict between and provision of this Agreement and any
applicable law, the applicable law shall prevail. In the event any provision of
this Agreement conflicts with any applicable law or is otherwise determined by
an arbitrator or court having valid jurisdiction thereof to be unenforceable,
the affected provision of this Agreement shall be deemed to have been modified
to the extent necessary so as not to conflict with the applicable law or to be
unenforceable or, if such modification is not possible, such provision shall be
deemed to have been deleted herefrom, without affecting, impairing or
invalidating the remaining provisions of this Agreement.
21. ENTIRE AGREEMENT. This Agreement, together with any schedules
attached hereto, constitutes the entire agreement between the parties as to the
subject matter hereof, and all prior negotiations, representations, agreements
and understandings are merged into, extinguished by and completely expressed by
this Agreement.
22. WAIVERS AND MODIFICATIONS. The failure of any party to insist on
the performance of any obligation hereunder shall not be deemed to be a waiver
of such obligation. Waiver of any breach of any provision hereof shall not be
deemed to be a waiver of any other breach of such provision or any other
provision. No waiver, modification, release or amendment of any obligation
under or provision of this Agreement shall be valid or effective unless in
writing signed by the party to be bound by such waiver, modification, release or
amendment.
23
23. ASSIGNMENT. Newco may assign its rights or obligations under
this Agreement to any Affiliate of Newco without the prior written consent of
Xxxxxx, provided that such Affiliate is owned, directly or indirectly, by Xxxxxx
and VIMRx in substantially the same proportions Newco is owned. Xxxxxx may
assign its rights and obligations hereunder to any Affiliate of Xxxxxx without
prior notice to or consent of Newco. No assignment by Xxxxxx or Newco, or by
any permitted assignee, shall be effective unless and until the assignee shall
have agreed to become bound by the provisions of that certain Non-Competition
and Confidentiality Agreement by and among Xxxxxx, Newco and VIMRx, of even date
herewith, to the same extent and in the same manner as Xxxxxx (in the case of a
Xxxxxx assignee) or Newco (in the case of a Newco assignee) is bound. No party
hereto may assign any of its rights or obligations under this Agreement, unless
and to the extent expressly permitted by this Section 23. Subject to the
foregoing, this Agreement shall inure to the benefit of and be binding on the
parties' permitted successors and assigns.
24. INDEPENDENT PARTIES. By virtue of this Agreement, neither party
constitutes the other as its agent (except as may otherwise be expressly
provided herein), partner, joint venturer, or legal representative and neither
party has express or implied authority to bind the other in any manner
whatsoever.
25. COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all parties had signed the same
document. All such counterparts shall be deemed an original, shall be construed
together, and shall constitute one and the same instrument.
26. DISPUTE RESOLUTION.
26.1 Provisional Remedies: The procedures specified in this
Section 26 shall be the sole and exclusive procedures for the resolution of
disputes between the parties arising out of or relating to this Agreement;
provided, however, that a party, without prejudice to these procedures, may seek
-------- -------
a preliminary injunction or other provisional relief if, in its sole judgment,
such action is deemed necessary to avoid irreparable damage or to preserve the
status quo. During such action, the parties will continue to participate in
good faith in the procedures specified in this Section 26.
26.2 Negotiations Between Executives: The parties will
attempt in good faith to resolve any claim or controversy arising out of or
relating to the execution, interpretation or performance of this Agreement
(including the validity, scope and enforceability of the provisions contained in
this Section 26) promptly by negotiations under the procedures set forth in
Section 4 concerning referral of disputes to the Corporate Committee.
26.3 Arbitration: In the event that any dispute arising out
of or relating to this Agreement or its breach, termination or validity has not
been resolved after good faith negotiation pursuant to the procedures of Section
26.2, such dispute shall upon written notice by
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either party to the other, be finally settled by arbitration administered by the
Center for Public Resources in accordance with the provisions of its Commercial
Arbitration Rules and the United Stated Federal Arbitration Act, as modified
below:
A. The arbitration shall be heard by a panel of three (3)
independent and impartial arbitrators, all of whom shall be selected from a
list of neutral arbitrators supplied by the Center for Public Resources.
From such list, each of Xxxxxx and Newco shall select one (1) arbitrator,
and the arbitrators so selected shall select a third. The panel shall
designate one (1) among them to serve as chair.
B. The arbitration proceedings shall be conducted in Los Angeles
County or Orange County in the State of California.
C. Any party may seek interim or provisional remedies under the
Federal Rules of Civil Procedure and the United States Federal Arbitration
Act as necessary to protect the rights or property of the party pending the
decision of the arbitrators.
D. The parties shall allow and participate in limited discovery
for the production of documents and taking of depositions, which shall be
conducted in accordance with the Commercial Arbitration Rules of the Center
for Public Resources. All discovery shall be completed within sixty (60)
days following the filing of the answer or other responsive pleading.
Unresolved discovery disputes shall be brought to the attention of the
chair of the arbitration panel and may be disposed of by the chair.
E. Each party shall have up to fifty (50) hours to present
evidence and argument in a hearing before the panel of arbitrators,
provided that the chair of the panel of arbitrators may establish such
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longer times for presentations as the chair deems appropriate.
F. The arbitration award shall be rendered by the arbitrators
within fifteen (15) business days after conclusion of the hearing of the
matter, shall be in writing and shall specify the factual and legal basis
for the award. Judgment thereon may be entered in any court having
jurisdiction thereof.
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G. The arbitrators are empowered to order money damages in
compensation for a party's actual damages, specific performance or other
appropriate relief to cure a breach; provided, however, that the
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arbitrators will have no authority to award special, punitive or exemplary
damages, or other money damages that are not measured by the prevailing
party's actual damages.
26.4 Performance During Dispute: Each party is required to
continue to perform its obligations under this Agreement pending final
resolution of any dispute arising out of or relating to this Agreement, unless
to do so would be commercially impossible or impractical under the
circumstances.
27. RULES OF CONSTRUCTION. In this Agreement, unless a clear
contrary intention appears:
A. The singular number includes the plural number and vice versa;
B. Reference to any party includes such party's permitted
successors and assigns;
C. Reference to any gender includes the other gender;
D. Reference to any Section, Exhibit or Schedule means such
section of this Agreement, exhibit to this Agreement or schedule to this
Agreement, as the case may be, and references in any section or definition
to any clause means such clause of such section or definition;
E. "Herein," "hereunder," "hereof," "hereto," and words of
similar import shall be deemed references to this Agreement as a whole and
not to any particular section or other provision of this Agreement;
F. "Including" (and with the correlative meaning "include") means
including without limiting the generality of any description preceding such
term;
G. Relative to the determination of any period of time, "from"
means "from and including," "to" means "to but excluding" and "through"
means "through and including";
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H. Reference to any law (including statutes and ordinances) means
such law as amended, modified, codified or reenacted, in whole or in part,
and in effect from time to time, including rules and regulations
promulgated thereunder;
I. Accounting terms used herein shall have the meanings
historically attributed to them by Xxxxxx International Inc., a Delaware
corporation, and its subsidiaries prior to the date hereof;
J. In the event of any conflict between any of the provisions of
the body of this Agreement and any exhibit or schedule hereto, the
provisions of the body of this Agreement shall control;
K. The headings contained in this Agreement have been inserted
for convenience of reference only, and are not to be used in construing
this Agreement; and
L. Any rule of construction or interpretation which might
otherwise require this Agreement to be construed or interpreted against
either party shall not apply to any construction or interpretation hereof.
28. AUDIT. Either party may audit the books and records of the other
for the purpose of determining compliance with the terms of this Agreement. The
auditing party may use independent outside auditors (who may participate fully
in such audit). In the event that an audit is proposed with respect to
information which the party to be audited wishes not to disclose to the auditing
party ("Restricted Information"), then on the written demand of the party to be
audited the individuals conducting the audit with respect to the Restricted
Information will be limited to the auditing party's independent auditors. In
such event, the party to be audited shall pay the costs of the independent
auditors conducting such audit, but only with respect to that portion of the
audit relating to the Restricted Information. Such independent auditors shall
enter into an agreement with the parties hereto, on terms that are agreeable to
both parties hereto, under which such independent auditors shall agree to
maintain the confidentiality of the information obtained during the course of
such audit and establishing what information such auditors will be permitted to
disclose in reporting the results of any audit of Restricted Information. Any
such audit shall be conducted during regular business hours in a manner that
does not interfere unreasonably with the operations of the party to be audited.
The audits conducted by any party under the provisions of this Agreement, or of
any of the License Agreements, the Hardware and Disposables Manufacturing
Agreement, the Antibody Manufacturing and Storage Agreement, the Hardware and
Disposables Supply Agreement and the Services Agreement shall not, in the
aggregate, be conducted more than once in any twelve (12) month period per
facility unless the next preceding audit disclosed a failure to conform to the
terms of any such Agreement or unless the facility
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received a Form FDA-483 in the twelve (12) months following any audit. Subject
to the foregoing limitations, any such audit shall be conducted when requested
by notice given not less than thirty (30) days prior to the commencement of the
audit.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first set forth above.
XXXXXX HEALTHCARE CORPORATION BIT ACQUISITION CORP.
By:___________________________ By:______________________________
Name: Name:
Title: Title:
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