TERMINATION AND MUTUAL RELEASE AGREEMENT
EXHIBIT
10.51
This
TERMINATION AND MUTUAL RELEASE AGREEMENT (this “Agreement”) is made
and entered into by and between Alfacell Corporation, a Delaware corporation
(“Alfacell”),
and Par Pharmaceutical, Inc., a Delaware corporation (“Par”), effective as
of September 8, 2009 (the “Effective
Date”). Each of Alfacell and Par are referred to herein as a
“Party” and
collectively as the “Parties”. Capitalized
terms used but not defined herein shall have the meanings ascribed to such terms
in Article I of that certain License Agreement by and between the Parties, dated
as of January 14, 2008 (the “License
Agreement”).
WHEREAS, Alfacell and Par are
parties to the License Agreement and the Supply Agreement dated as of January 14,
2008 (collectively, the “Alfacell/Par
Agreements”);
WHEREAS, the Parties wish to
terminate the Alfacell/Par Agreements; and
WHEREAS, the agreement by each
Party to terminate the Alfacell/Par Agreements is conditioned upon the Parties
entering into this Agreement to, among other things, set forth certain
understandings with respect to the post-termination rights and obligations of
each Party.
NOW, THEREFORE, in
consideration of the premises and of the mutual agreements and covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:
ARTICLE
I
DEFINITIONS;
INTERPRETATION
1.1 Certain
Definitions. For purposes of this Agreement, the definitions
set forth below shall be applicable.
“Alfacell Seller”
means any of Alfacell, its successors, assignees (by sale of the Product or
otherwise), licensees or sub-distributors, as the case may be, that distributes
or sells the Product.
“Claims” means any and
all claims, demands, obligations, losses, judgments, damages, causes of action,
costs, expenses, attorneys’ fees and liabilities of any nature whatsoever,
whether based on contract, tort, statutory or other legal or equitable theory of
recovery, whether known or unknown, suspected or claimed.
“Product” means any
pharmaceutical product containing Ranpirnase for parenteral administration
developed by Alfacell or any Third Party (as defined in the License Agreement)
on Alfacell’s behalf, including any generically-labeled version of such
product.
“Third Party” means
any person or entity other than an Alfacell Seller or an Affiliate of an
Alfacell Seller.
1.2. Construction. As
used in this Agreement, unless the context otherwise requires, words denoting
any gender shall include all genders, words describing the singular shall
include the plural and vice versa, the words “hereof”, “herein” and “hereunder”
and words of similar import shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, words denoting natural persons shall
include corporations, partnerships and other entities, and vice versa; and the
words “includes” or “including” shall mean “including without
limitation.” Unless otherwise specified herein, all references to
Articles and Sections refer to articles and sections of this
Agreement.
ARTICLE
II
TERMINATION
OF PRIOR AGREEMENTS; PAYMENTS TO PAR
2.1 Termination of
Alfacell/Par Agreements. The
Parties agree and confirm that, except in respect of this Agreement, including
the Surviving Provisions (as defined in this Section 2.1), any and all
contracts, agreements and understandings, whether written or oral, including the
Alfacell/Par Agreements, are hereby terminated and are of no further force and
effect. Each of the Parties agrees that, except for Articles I and
VIII of the License Agreement (the “Surviving
Provisions”), none of the terms, conditions or obligations of such
contracts, agreements and understandings shall survive termination, that all
rights and licenses granted to Par under the License Agreement shall
automatically and immediately terminate and shall revert to Alfacell as of the
Effective Date and that this Agreement supersedes any of the terms of such
contracts, agreements and understandings. The Parties agree that the
confidentiality obligations of the Parties contained in Article VIII of the
License Agreement shall apply to all Confidential Information of a Party
disclosed to the other Party pursuant to this Agreement as if such Confidential
Information had been disclosed under the License Agreement, that all references
to “this Agreement” in Article VIII of the License Agreement shall be deemed to
include this Agreement, and that the Confidentiality obligations of the Parties
contained in Article VIII of the License Agreement shall remain binding on both
Parties during the period commencing as of the Effective Date and ending upon
the later of the expiration of the Royalty Period (as defined in Section 2.3
herein) and January 1, 2020.
2.2 Payments to
Par. In
consideration for Par’s agreement to terminate the Alfacell/Par Agreements,
during the Royalty Period (as defined in Section 2.3), Alfacell shall pay to
Par, two percent (2%) of Alfacell Net Sales (as hereinafter
defined). For purposes of this Agreement, “Alfacell Net Sales”
means, in respect of any Product, the gross amounts actually invoiced by any
Alfacell Seller to all Third Party distributors or customers for sales of such
Product in the Field in the Territory, less the sum of the following items
relating to such sales which are allowed and taken, to the extent such
deductions are in accordance with GAAP (the “Royalty”):
(i)
trade, quantity and cash discounts and rebates given by such Alfacell
Seller;
(ii)
adjustments for price adjustments (including shelf stock adjustments in the case
of a generically-labeled version of the Product supplied and sold by an Alfacell
Seller), billing errors, rejected goods, returns, Product recalls and damaged
goods (excluding goods damaged while under the control of an Alfacell
Seller);
(iii)
credits, charge-backs, rebates, reimbursements, and similar payments provided to
wholesalers and other distributors, buying groups, health care insurance
carriers, pharmacy benefits management companies, health maintenance
organizations, other institutions or health care organizations or other
customers;
(iv)
rebates or other price reductions provided to any Governmental Authority with
respect to any state or federal Medicare, Medicaid, or similar
programs;
(v) any
invoiced charge for freight, insurance, handling, or other transportation costs
directly related to delivery of the Product; and
(vi)
credits or discounts related to sales promotions such as trade show discounts
and stocking allowances.
The
foregoing deductions set forth in paragraphs (i) through to (vi) of this Section
2.2, shall only be deducted once and only to the extent not otherwise deducted
from the gross amounts actually invoiced.
2.3 Royalty
Period.
The payment of the Royalty by Alfacell to Par, shall commence upon the first
sale of the Product by an Alfacell Seller to a Third Party in the Field in the
Territory following the first Regulatory Approval obtained for any Indication
and shall terminate upon the later to occur of: (i) in respect of any
Indication, the 12th anniversary of the first sale of the Product by an Alfacell
Seller to a Third Party for such Indication and (ii) the date of expiration of
the last Valid Claim within the Alfacell Patents (“Royalty
Period”).
ARTICLE
III
MUTUAL
RELEASE OF ALL CLAIMS
3.1 Release by
Alfacell.
Subject to the terms and conditions of this Agreement, Alfacell, on behalf of
itself, its affiliates, subsidiaries, officers, directors, employees, agents,
attorneys, accountants, insurers, representatives, successors and assigns,
hereby releases and forever discharges Par and its past and present affiliates,
subsidiaries, officers, directors, partners, principals, equityholders,
employees, agents, attorneys, accountants, insurers, representatives,
successors, heirs and assigns (collectively, the “Par Released
Parties”), from any and all Claims that Alfacell or any Affiliate of
Alfacell has, had or claims to have against any or all of the Par Released
Parties arising directly or indirectly from any act, omission, event or
transaction occurring on or prior to the Effective Date that relate to, arise
from, or are in any manner connected to the Alfacell/Par Agreements, whether
accrued or not; provided, however, that nothing
in this Section 3.1 shall be deemed to affect the enforceability of, or the
parties’ rights and obligations under this Agreement.
3.2 Release by
Par.
Subject to the terms and conditions of this Agreement, Par, on behalf of itself,
its affiliates, subsidiaries, officers, directors, employees, agents, attorneys,
accountants, insurers, representatives, successors and assigns, hereby releases
and forever discharges Alfacell and its past and present affiliates,
subsidiaries, officers, directors, partners, principals, equityholders,
employees, agents, attorneys, accountants, insurers, representatives,
successors, heirs and assigns (collectively, the “Alfacell Released
Parties”), from any and all Claims which any Par or an Affiliate of Par
has, had or claims to have against any or all of the Alfacell Released Parties
arising directly or indirectly from any act, omission, event or transaction
occurring on or prior to the Effective Date that relate to, arise from, or are
in any manner connected to the Alfacell/Par Agreements, whether accrued or not;
provided, however, that nothing
in this Section 3.2 shall be deemed to affect the enforceability of, or the
parties’ rights and obligations under this Agreement.
ARTICLE
IV
INDEMNIFICATION
4.1 Indemnification by
Alfacell.
Alfacell shall defend, indemnify and hold harmless each of the Par Released
Parties from and against any and all liabilities, damages, settlements,
penalties, fines, costs or expenses (including reasonable attorneys’ fees)
(collectively, “Losses”), arising as a result of Third Party claims made or
lawsuits brought against any Par Released Party related to, or in connection
with, the development, use or Commercialization of the Product following the
Effective Date.
4.2 Indemnification
Procedures. If
a Par Released Party intends to claim indemnification under this Article IV, it
shall promptly notify Alfacell in writing of any such alleged Losses promptly
after it becomes aware of the basis for such
indemnification. Alfacell shall have the right to control the defense
or settlement of such Claims with counsel of its choice, provided, however, that
such counsel is reasonably acceptable to such Par Released Party; and provided,
further, that such Par Released Party shall have the right to retain its own
counsel at its own expense, for any reason, including if representation of such
Par Released Party would be inappropriate due to actual or potential differing
interests between such Par Released Party and any other Party reasonably
represented by such counsel in such proceeding. Alfacell shall not be
responsible for any legal fees or other costs incurred other than as provided
herein. The Par Released Parties shall reasonably cooperate with
Alfacell and its legal representatives in the investigation of any Losses
covered by this Section 4.2. The obligations of this Section 4.2
shall not apply to amounts paid in settlement of any claim, demand, action or
other proceeding if such settlement is effected without the consent of Alfacell,
which consent shall not be withheld, conditioned or delayed
unreasonably. The failure to deliver prompt written notice to
Alfacell shall relieve Alfacell of any obligation to the Par Released Party of
liability under this Section 4.2 only to the extent it is materially
prejudiced thereby. It is understood that only Par may claim
indemnity under this Article IV (on its own behalf or on behalf of Par
Released Parties), and other Par Released Parties may not directly claim
indemnity hereunder.
ARTICLE
V
REPRESENTATIONS
AND WARRANTIES
5.1 Representations and
Warranties.
Each Party hereby represents and warrants to the other Party that: (i) such
Party has full power and authority to enter into this Agreement and to perform
its obligations hereunder; and (ii) the execution, delivery and performance of
this Agreement do not conflict with any other agreement or arrangement to which
such Party is a party or by which it is or its assets are bound or any law,
regulation or order to which such Party is subject.
ARTICLE
VI
MISCELLANEOUS
PROVISIONS
6.1
Notices.
Any notices given under this Agreement shall be in writing, addressed to the
Parties at the following addresses, and delivered by person, by facsimile
transmission followed by U.S. Mail, return receipt requested, or by FedEx or
other reputable national courier service. Any such notice shall be
deemed to have been given as of the day of personal delivery, on the day sent by
facsimile transmission with electronic confirmation of successful transmission
(if before 5:00 p.m. local time on a business day, and otherwise it shall be
deemed given on the subsequent business day), or on the day of delivery to the
other Party confirmed by the courier service.
|
In
the case of Alfacell:
|
Alfacell
Corporation
000
Xxxxxx Xxxxx
Xxxxxxxx,
XX 00000
Attention: Chief
Executive Officer
Facsimile: (000)
000-0000
|
|
with
a copy (which shall not constitute notice) to:
|
Xxxxxxx
Procter LLP
000
Xxxxxx Xxxxxx
Xxx
Xxxx, XX 00000
Attention: Xxxxx
X. Xxxxxxx, Esq.
Facsimile: (000)
000-0000
|
|
In
the case of Par:
|
Par
Pharmaceutical, Inc.
000
Xxxx Xxxxxxxxx
Xxxxxxxxx
Xxxx, XX 00000
Attn: General
Counsel’s Office
Fax: (000)
000-0000
|
|
with
a copy (which shall not constitute notice) to:
|
Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP
000
Xxxxx Xxxxxx
Xxx
Xxxx, XX 00000-0000
Attn:
X. Xxxx Milling, Jr., Esq.
Fax:
(000) 000-0000
|
6.2 Return or Destruction of
Confidential Information.
Each Party shall, within a commercially reasonable period of time following the
Effective Date, return to the other Party, or certify the destruction of, all
Confidential Information of the other Party received prior to the Effective
Date.
6.3 Parties to Bear Own
Costs and Attorneys’ Fees.
Except as otherwise set forth herein, each Party will bear its own costs and
expenses, including attorneys’ fees, incurred by it in the negotiation of this
Agreement and the transactions and other agreements contemplated hereby, and
such costs and expenses shall not be reimbursed by the Company.
6.4 Entire
Agreement.
This Agreement represents and contains the entire agreement and understanding
among the Parties with respect to the subject matter of this Agreement, and
supersedes any and all prior oral and written agreements and understandings
relating thereto. No representation, warranty, condition,
understanding or agreement of any kind with respect to the subject matter shall
be relied upon by the Parties except those contained herein. This
Agreement may not be amended or modified except by a written agreement signed by
each Party.
6.5 Advice of
Counsel.
Each Party acknowledges and represents that it has sought and obtained the legal
advice of its own chosen attorneys and that the terms of this Agreement have
been completely read and are fully understood and voluntarily accepted by
it.
6.6
Counterparts.
This Agreement may be executed in any number of counterparts and by facsimile,
pdf or electronic signature, each of which shall be deemed an original, and all
of which together shall be deemed one and the same instrument.
6.7 Attorneys’
Fees. In
the event litigation is necessary to enforce a provision or provisions of this
Agreement, all reasonable, out-of-pocket costs, expenses and attorneys’ fees
shall be paid by the non–prevailing party or parties to the prevailing party or
parties, in each case as determined by a court of competent jurisdiction in a
final, non-appealable order.
6.8 Binding
Effect.
This Agreement will be binding on and inure to the benefit of the Parties and
their respective heirs, legal representatives, successors and
assigns.
6.9 Governing
Law.
This Agreement is governed by and will be construed in accordance with the laws
of the State of New York, excluding any conflict-of-laws rule or principle
(whether under the laws of New York or any other jurisdiction) that might refer
the governance or the construction of this Agreement to the law of another
jurisdiction.
6.10
Headings.
Headings of the Articles, Sections and subsections of this Agreement are for
reference purposes only and do not constitute terms or conditions of this
Agreement and shall not limit or affect the terms and conditions
hereof.
6.11
Severability. If
any provision of this Agreement or its application to any Person or circumstance
is held invalid or unenforceable to any extent, the remainder of this Agreement
and the application of such provision to other Persons or circumstances will not
be affected thereby, and such provision will be enforced to the greatest extent
permitted by law.
6.12 Further
Assurances. In
connection with this Agreement and the transactions contemplated thereby, each
Party will execute and deliver any additional documents and instruments and
perform any additional acts that may be reasonably necessary or appropriate to
effectuate and perform the provisions of this Agreement and such
transactions.
6.13
Effectiveness.
This Agreement shall become effective upon the Effective Date.
IN
WITNESS WHEREOF, the undersigned Parties have executed this Agreement effective
as of the Effective Date.
ALFACELL
CORPORATION
By: /s/ Xxxxxxx
Xxxxx
Name: Xxxxxxx
Xxxxx
Title: President
PAR
PHARMACEUTICAL, INC.
By: /s/ Xxxx
XxxXxxx
Name: Xxxx
XxxXxxx
Title: President,
Strativa Pharmaceuticals,
a division of Par Pharmaceutical,
Inc.
