TRANSITION SERVICES AGREEMENT IDENIX PHARMACEUTICALS, INC., IDENIX (CAYMAN) LIMITED NOVARTIS PHARMA AG
Exhibit 10.2
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
CONFIDENTIAL
IDENIX PHARMACEUTICALS, INC.,
IDENIX (CAYMAN) LIMITED
NOVARTIS PHARMA AG
28 September, 2007
This Transition Services Agreement (“Transition Agreement”) is made as of 28 September
2007 between Idenix Pharmaceuticals, Inc. of 00 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000,
XXX (“Idenix U.S.”), Idenix (Cayman) Limited c/o Walkers SPV Limited, Xxxxxx House, Xxxx
Street, Xxxxxx Town, Grand Cayman, Cayman Islands (“Idenix Cayman” and, together with
Idenix U.S., “Idenix”), and Novartis Pharma AG of Forum 0, Xxxxxxxx Xxxxxx, 0000 Xxxxx,
Xxxxxxxxxxx (“Novartis”).
INTRODUCTION
Novartis and Idenix are parties to the Development, License and Commercialization Agreement
made as of May 8, 2003, as amended by Amendment No. 1 dated as of April 30, 2004, Amendment No. 2
dated as of December 21, 2004, Amendment No. 3 dated as of February 27, 2006, and Amendment No. 4
dated as of even date as this Transition Agreement (as amended and updated, the “DLC
Agreement”).
Under Amendment No. 4 to the DLC Agreement (“Amendment No. 4”), Novartis and Idenix
revised certain terms and conditions of the DLC Agreement to give effect to the Parties’ agreement
that Novartis will take over control of the Development, Commercialization and Manufacture of the
LdT Product and related matters, on a worldwide basis from the Amendment Effective Date (as defined
under Amendment No. 4).
The Parties desire to provide for the efficient transition of the full control of the
Development, Commercialization and Manufacture of the LdT Product and related matters to Novartis.
The Parties have agreed that Idenix will provide services to Novartis to facilitate the
transition in accordance with this Transition Agreement.
IN CONSIDERATION of the mutual covenants in this Transition Agreement, Idenix and
Novartis agree:
1. Definitions. Initial capitalized terms used but not defined in this Transition
Agreement have the meanings given to them in the DLC Agreement, including as defined or amended by
the terms of Amendment No. 4. In addition, for purposes of this Transition Agreement, the Parties
agree to the following additional definitions:
“Additional Services” means additional services set out in a Statement of Work
that Novartis and Idenix agree in writing to include as Transition Services.
“Contact Person” means a person designated as a contact person for each Schedule
and Statement of Work.
“Incentivised Employees” means the Idenix employees listed in items 3 and 4 of
Schedules 1 and 2 of this Transition Agreement, who Idenix would have terminated on the
Amendment Effective Date, but retains to provide the Transition Services, and includes US
Incentivised Employees and EU Incentivised Employees.
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“Schedules” means the schedules attached to this Transition Agreement, setting
out the transition services agreed to as of the Effective Date with respect to the particular
subject matter.
“Scheduled Transition Services” means the services set out in the Schedules.
“Statement of Work” means a description of the additional services to be
performed, the obligations of each Party, any special terms for the particular Additional
Services such as the specified person to carry out the work and any time requirement, and the
Contact Persons for each Party.
“Term” means the period from 1 October 2007 to the date specified in the
Schedules with respect to the particular Transition Services, or another date to which the
Parties agree to extend that period.
“Transition Coordinator” means a person designated by a Party as transition
coordinator in accordance with this Transition Agreement.
“Transition Services” means the Scheduled Transition Services, the Additional
Services, and services in relation to Third Party Agreements.
2. Services.
2.1 Scheduled Transition Services. Idenix will provide to Novartis the
Scheduled Transition Services for the Term. Idenix will use Commercially Reasonable Efforts
to ensure that all work in the Schedules is completed by the dates specified in the
Schedules. Where all the work under a “description” field in the Schedule is not completed
by the dates referred to above, Idenix will ensure completion of the work, and will continue
to perform the Transition Services beyond the date specified, using the employees specified
in the Schedules if still employed by Idenix, and consult with and keep Novartis informed of
progress.
2.2 Additional Transition Services. Novartis may request Idenix to provide
additional transition services. Idenix will try to meet any reasonable request in good
faith. The Parties will discuss each request in good faith and on agreement, prepare a
Statement of Work for the agreed Additional Services.
3. Incentives for Retention.
3.1 Incentivised Employees. In respect of Incentivised Employees, Idenix will,
immediately after Idenix announces its signing of this Amendment No. 4:
(a) inform each Incentivised Employee orally that s/he will continue to be employed by
Idenix to provide Transition Services to Novartis and (if applicable), that Novartis or its
Affiliate wishes to interview him/her for possible employment.
(b) provide each Incentivised Employee with personalized written communication
informing him/her of:
(i) the Transition Services that s/he has been nominated to provide;
(ii) the duration of the Transition Services and that Idenix will provide him/her with
employment for the duration s/he is engaged in providing those Transition Services to
Novartis; and
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(iii) the amounts of the severance payment and retention incentive (as applicable)
Idenix will pay to that Incentivised Employee under clause 3.2 (a) and (b) where the
conditions under those clauses are fulfilled.
3.2 Payment. Idenix will pay to each Incentivised Employee, after expiry of the
forty-five (45) day review period, and seven (7) day revocation period under the US Federal
Age Discrimination in Employment Act (“ADEA”) (where relevant), and receipt from each
Incentivised Employee of a signed written release compliant with all US Federal and State
employment laws, including the ADEA and Older Worker Benefits Protection Act, and relevant
Law in the applicable Major EU Countries (the form of which has been agreed with Novartis in
advance), the following:
(a) for an US Incentivised Employee:
(i) if s/he is offered employment and enters into an employment agreement with
Novartis or its Affiliate by the later of the end of the Transition Services Term
for which s/he is nominated in the Schedules, or [**], then the payment will
comprise a severance payment equivalent to [**] salary of that Incentivised Employee
as at the Amendment Effective Date (“US Severance Payment”); and
(ii) if s/he is not offered employment or does not take up employment with
Novartis or its Affiliate in the period mentioned above, and has completed all the
work in each “description” field for which s/he is nominated in the Schedules to
Novartis’ reasonable satisfaction by the specified time, then the payment will
comprise the US Severance Payment plus for a retention incentive payment equivalent
to [**] salary of that Incentivised Employee as at the Amendment Effective Date
(“US Retention Incentive Payment”); and
(b) for an EU Incentivised Employee:
(i) if s/he is offered employment and enters into an employment agreement with
Novartis or its Affiliate by [**], then the payment will comprise a severance
payment (inclusive of notice period) equivalent to [**] salary of that Incentivised
Employee as at the Amendment Effective Date (“Type 1 EU Severance Payment”);
and
(ii) if s/he is not offered employment or does not take up employment with
Novartis or its Affiliate, then the payment will comprise a severance payment
(inclusive of notice period) equivalent to [**] salary of that Incentivised Employee
as at the Amendment Effective Date (“Type 2 EU Severance Payment”).
3.3 Claim for Reimbursement. Idenix will:
(a) provide to Novartis a copy of the release signed by each Incentivised Employee it
has paid under clause 3.2; and
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(b) invoice Novartis for the US Retention Incentive Payments for all Incentivised
Employees paid under clause 3.2(a)(ii).
3.4 Reimbursement. Novartis will reimburse Idenix for the US Retention
Incentive Payment paid within [**] days of receipt of the required releases and invoices
under clause 3.3.
4. Provision of Transition Services.
4.1 Contact Person and Transition Coordinator.
(a) Contact Person. Each Party will designate a Contact Person for each
Schedule and Statement of Work. The Schedule will set out the names of the Contact Persons
designated to be responsible for each Party from the Effective Date.
(b) Transition Coordinator. Each Party will designate one/more Transition
Coordinators to be responsible for overseeing the overall transition process. As of the
Effective Date:
| (i) | the Transition Coordinators for Novartis are: | ||
| Overall: [**] Human Resources: [**] Development: [**] Commercial: [**] |
|||
| (ii) | the Transition Coordinator for Idenix are: | ||
| Overall: [**] Human Resources: [**] Development: [**] Commercial: [**]. |
(c) Changes. Idenix will change its Contact Persons, Transition Coordinator,
or other Idenix employees nominated in the Schedule or Statement of Work only by prior
agreement with Novartis. A Party will notify the other Party of change of the designated
Contact Persons, Transition Coordinators, or employee at least [**] days before the change,
unless due to an exigency (i.e. death, disability or resignation). Inability to provide
Transition Services due to an exigency will not be a breach of this Transition Agreement.
4.2 Provision of Transition Services. Idenix and/or its Affiliates:
(a) will provide the Transition Services using the employees specified (except where
there is an exigency); and
(b) will not subcontract or assign any part of this Transition Agreement without
Novartis’ prior written consent.
Subject to clause 6, employees of a Party involved in the provision or receipt of the
Transition Services will, during the Term of this Transition Agreement, remain employees of the
same respective Party which they were employed before the Amendment Effective Date, and that Party
solely will be responsible for the payment of all wages, bonuses, compensation, commissions and
employee
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benefit plans, programs or arrangements, and any other terms or conditions of employment
relating to its own employees.
4.3 Standard. Idenix warrants that it will provide the Transition Services in
accordance with the terms of this Transition Agreement. Idenix further warrants that it will
provide the Transition Services in a professional and timely manner, with the level of care and
skill ordinarily exercised to the standard applied in the provision of the relevant services under
the DLC Agreement up to the Amendment Effective Date, and in compliance with all applicable Laws.
4.4 Cooperation. The Parties will use Commercially Reasonable Efforts to cooperate
with each other in all matters relating to the provision and receipt of the Transition Services,
including exchanging information, performing true-ups and adjustments, and obtaining all Third
Party consents, licenses, sublicenses or approvals necessary to allow the other Party to perform
its obligations under this Transition Agreement. The cost of obtaining Third Party consents,
licenses, sublicenses or approvals will be borne by Idenix. Idenix will maintain, in accordance
with its standard document retention procedures (or if it has no standard document retention
policy, for a period of at least [**]), documentation supporting the information relevant to cost
calculations of the Transition Services and cooperate with Novartis in making such information
available as needed after the Term.
4.5 Error Correction and Accounting. The Parties will agree on a reasonable process
and procedure for conducting reviews and making adjustments to charges as a result of Novartis
taking full responsibility and control over the Development, Manufacture and Commercialization of
the LdT Product. The Parties will use best endeavours to complete the processes and procedures
within [**] days after completion or termination of the Transition Services.
5. Confidentiality. The Parties agree that all information concerning the other Party
or Third Parties disclosed or derived in connection with this Transition Agreement will be governed
by the confidentiality provisions contained in the DLC Agreement.
6. Intellectual Property. The Parties agree that all inventions made by a Party or
its Affiliates or their employees, agents or consultants in connection with the provision of
Transition Services will be owned exclusively by Novartis and will be Novartis Sole Inventions for
the purposes of the DLC Agreement. To the extent required for the above purpose, and at no
additional cost to Novartis, Idenix hereby assigns (and will cause its Affiliates and their
employees, agents and consultants to assign), all right, title and interest in the inventions to
Novartis, and will provide all reasonable assistance and execute all documents that may be
necessary for Novartis to obtain and secure Novartis’ rights.
7. Financial.
7.1 Fees for Scheduled Transition Services. Novartis will pay Idenix in accordance
with the rates set in clause 7.3 for the Scheduled Transition Services.
7.2 Fees for Other Transition Services. For Transition Services that are not listed
in a Schedules, Novartis will pay Idenix the amounts set out in the relevant Statement of Work.
7.3 Default Fees. To the extent the Parties do not specify the amounts due for any
Transition Services in the relevant Schedule or Statement of Work, Novartis will pay Idenix:
(a) for 100% Development Expenses; and
(b) for the work performed at the FTE rate of USD [**] per annum, prorated:
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(i) the percentage of time the Idenix Employee is engaged in the provision of
Transition Services rather than other Idenix projects; and
(ii) the period of the relevant Transition Services are being provided..
The above is provided that Idenix has Novartis’ prior written consent to do the work and incur
the payment, which consent takes the place of JSC approval, and references to the Development
Plan and Development Budget in the definition of Development Expense.
7.4 Hire of Idenix Employee. Novartis may (but is under no obligation to) discuss
with any employee designated as an employee Novartis may wish to interview in the Schedules, their
resignation from Idenix and entering a new employment agreement with Novartis.
7.5 . Fees Applicability. The dates and periods specified in Schedules are
estimates only. The fees under this Transition Agreement will cease to be payable to Idenix on
the earliest of:
(a) an Idenix employee named in a Schedule or Statement of Work becoming a Novartis
employee; or
(b) the completion or the termination of the specific Transition Service.
Fees are not payable for the period where an Idenix employee named in a Schedule or
Statement of Work is not available to carry out particular Transition Services unless
with Novartis’ prior written agreement, a suitably qualified and experienced Idenix
employee carries out the work in replacement.
7.6 Invoices and Payment. Within [**] days after the end of each calendar month of
the Term, Idenix will invoice Novartis for the Transition Services performed under this Transition
Agreement in the month immediately preceding. Novartis will pay the amount due under each invoice
presented under this Section within [**] days after receipt of the invoice.
8. Term and Termination of Agreement.
8.1 Term. This Transition Agreement will continue until the relevant Transition
Services are completed as contemplated under Section 2.1, unless terminated earlier in accordance
with its terms, or Novartis notifies an earlier end date for specific Transition Services by
specifying such a date in the relevant Transition Service Schedule or Statement of Work or
amendment of the above.
8.2 Extension. This Transition Agreement may be extended in whole or for one or more
of the Transition Services, by the Parties’ agreement in writing. The Parties will be deemed to
have extended this Transition Agreement with respect to the specific Transition Services if by
agreement the Schedule or the Statement of Work for the relevant Transition Services specifies a
completion date beyond the expiry of the Term.
8.3 Termination for Breach. If either Party fails to perform or breaches any
material obligation under this Transition Agreement and fails to cure the breach within [**] days
of its receipt of a written notice from the non-breaching Party, the non-breaching Party may
terminate this Transition Agreement upon written notice. In addition to the above, the
non-breaching Party will have all other rights and remedies available at law or in equity.
9. Indemnification. Section 11.5 (Indemnification) of the DLC Agreement will apply to
this Transition Agreement and will be deemed incorporated by reference into this Transition
Agreement.
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10. Miscellaneous.
10.1 Incorporated Terms. The Miscellaneous provisions included in Sections 13.1
(Choice of Law), 13.2 (Notices), 13.4 (Captions), 13.6 (Dispute Resolution), 13.7 (Independent
Contractors, No Agency), 13.8 (Assignment, Successors), 13.10 (Waivers), 13.11 (No Consequential
or Punitive Damages) and 13.12 (Bankruptcy) of the DLC Agreement will apply to this Transition
Agreement and will be deemed incorporated by reference in this Transition Agreement.
10.2 Counterparts. This Transition Agreement may be executed in any number of
counterparts and by the Parties on separate counterparts. Each counterpart constitutes an
original of this Transition Agreement, and all parts together constitute one agreement.
10.3 Entire Agreement. This Transition Agreement and the DLC Agreement (as amended),
and the documents and agreements between the parties referred to in this Transition Agreement,
constitute the entire agreement between the Parties on the subject of transition services and
supersede all prior agreements and understandings, written and oral, between the Parties on the
subject matter dealt with, and do not confer on any other person other than the Parties any rights
or remedies under this Transition Agreement.
10.4 Severability. In the event that any provision of this Transition Agreement or
its application becomes or is declared by a court of competent jurisdiction to be illegal, void or
unenforceable, the remainder of this Transition Agreement will continue in full force and effect
and the application of the provision to other persons or circumstances will be interpreted so as
reasonably to give effect to the intent of the Parties. The Parties further agree to replace the
void or unenforceable provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purpose of the void or
unenforceable provision.
10.5 Rules of Construction. The Parties agree that they have been represented by
counsel during the negotiation and execution of this Transition Agreement and therefore waive the
application of any law, regulation, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting such agreement or
document.
10.6 Relationship Between the Parties. The relationship between the Parties under
this Transition Agreement is that of independent contractors and neither Party is an employee,
agent, partner, or joint venturer of or with the other.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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EXECUTION Idenix and Novartis execute this Transition Agreement by their authorized
representatives, as of the date first written above.
| IDENIX PHARMACEUTICALS, INC. |
||||
| By: | /s/ Xxxx-Xxxxxx Sommadossi | |||
| Name: | X. X. Xxxxxxxxxx | |||
| Title: | CEO | |||
| IDENIX (CAYMAN) LIMITED |
||||
| By: | /s/ Xxxx Xxxxxxxxxxx | |||
| Name: | X. Xxxxxxxxxxx | |||
| Title: | Director | |||
| NOVARTIS PHARMA AG |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | General Counsel | |||
| Norvartis Pharma AG | ||||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Lead Negotiator, BF IDTI | |||
| Norvartis Pharma AG | ||||
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SCHEDULE 1
Development Transition Services
(includes Regulatory and Pharmacovigilance)
(includes Regulatory and Pharmacovigilance)
| 1. | Idenix Contact Person: [**] | |
| Novartis Contact Person: [**] | ||
| 2. | Start/End Date: The Transition Services are for the dates ascribed adjacent to each item. | |
| 3. | Summary of Transition Services (Describe the service to be provided in appropriate detail.): |
| Country and Site | Type of Services | Description | Start Date | End Date | ||||
US Cambridge |
Clinical | [**] | [**] | [**] | ||||
| Communications | ||||||||
US Cambridge |
Supply TRD | [**] | [**] | [**] | ||||
| Maintenance of drug | ||||||||
| supply for ongoing | ||||||||
| studies including | ||||||||
| 011, 031 and 022, | ||||||||
| CTA updates, | ||||||||
| oversight of | ||||||||
| contract packaging | ||||||||
US Cambridge |
Regulatory Affairs | [**] | [**] | [**] | ||||
US Cambridge |
Pre-clinical/ | [**] | [**] | [**] | ||||
| toxicology | ||||||||
| [**] | [**] | [**] | ||||||
| [**] | [**] | [**] | ||||||
US Cambridge |
Integrated Medical | • [**] | [**] | [**] | ||||
| Safety | ||||||||
US Cambridge |
Drug Metabolism and | [**] | [**] | [**] | ||||
| Pharmacokinetics | ||||||||
| (DMPK) | ||||||||
| [**] | [**] | |||||||
| [**] | [**] | [**] | ||||||
| [**] | [**] | [**] |
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| Country and Site | Type of Services | Description | Start Date | End Date | ||||
US Cambridge |
Research/ Labs | [**] | [**] | [**] | ||||
US Cambridge |
Clinical | [**] | [**] | [**] | ||||
| [**] | [**] | [**] | ||||||
| [**] | [**] | [**] | ||||||
| [**] | [**] | [**] | ||||||
| [**] | [**] | [**] | ||||||
France Montpellier |
Clinical | [**] | [**] | [**] | ||||
US Cambridge |
Clinical | [**] | [**] | [**] | ||||
| [**] | [**] | [**] | ||||||
| [**] | [**] | [**] | ||||||
| [**] | [**] | [**] | ||||||
US Cambridge |
Resistance testing | [**] | [**] | [**] | ||||
US Cambridge |
Investigator | [**] | [**] | [**] | ||||
| brochrochure Update | ||||||||
US Cambridge |
007 report on viral | • [**] | [**] | [**] | ||||
| breakthrough | ||||||||
US Cambridge |
[**] | [**] | [**] |
| 4. | Incentivised Employees (Novartis presently intends to invite for interview*): |
| US Cambridge: [**] |
||
| France, Montpelier: [**] |
||
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SCHEDULE 2
Commercial Transition Services
| 1. | Idenix Contact Person: [**] | |
| Novartis Contact Person: [**] | ||
| 2. | Start/End Date: The Transition Services are for the dates ascribed adjacent to each item. | |
| 3. | Summary of Transition Services (Describe the service to be provided in appropriate detail.): |
| Country and Site | Type of Services | Description | Start Date | End Date | ||||
US Cambridge/Florham Park |
Transfer of inventory | [**] | [**] | [**] | ||||
US
Cambridge/Florham Park |
Transfer of promotional goods | [**] | [**] | [**] | ||||
US Cambridge/Florham Park |
Managed Care Reporting |
• [**] | [**] | [**] | ||||
US Cambridge/Florham Park |
Market Research | [**] | [**] | [**] | ||||
US Cambridge/Florham Park |
Medical Affairs | [**] | [**] | [**] | ||||
Region Europe /Paris
|
Marketing | [**] | [**] | [**] | ||||
France
Paris
|
Marketing | [**] | [**] | [**] | ||||
Global Cambridge /Basel |
Marketing | [**] | [**] | [**] | ||||
Germany
|
Marketing | [**] | [**] | [**] | ||||
UK
|
Medical | [**] | [**] | [**] | ||||
Spain
|
Marketing | [**] | [**] | [**] | ||||
France
|
Medical | [**] | [**] | [**] |
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| 4. | Incentivised Employees (Novartis presently intends to invite for interview*): |
| [**] |
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