EXHIBIT 10.26
CO-PROMOTION AGREEMENT
BETWEEN
XXXXXX LABORATORIES INC.
AND
SANGSTAT MEDICAL CORPORATION
MAY 7, 1999
Table of Contents
1. Definitions 1
2. Purpose of the Agreement 6
2.1 Purpose 6
2.2 Appointment 7
2.3 Agent for Managed Care Organizations Contracting 7
2.4 [ ]* 7
2.5 Exclusivity 7
3. Co-Promotion Activities 7
3.1 SangStat's Marketing Obligations 7
3.1.1 Co-Promotion Sales Force and Management 7
3.1.2 Product Launches 7
3.1.3 SangStat Detailing Commitment 7
3.1.4 Failure to Achieve SangStat Detailing Commitment 7
3.1.5 Additional Obligations 8
3.2 Xxxxxx'x Marketing Obligations 8
3.2.1 Sales Force 8
3.2.2 Product Launches 8
3.2.3 Abbott Detailing Commitment 8
3.2.4 Failure to Achieve Abbott Detailing Commitment 8
3.2.5 Information 9
3.2.6 Additional Obligations 9
3.3 Mutual Marketing Obligations 9
3.3.1 Training 9
3.3.2 Market Research 9
3.3.3 Incentives 10
3.3.4 Sampling 10
3.3.5 Indigent Programs 10
3.3.6 Development of Promotional Materials 10
3.3.7 Promotional and Marketing Costs 10
3.3.8 Detailing 11
3.3.9 Managed Care Organizations 11
4. Distribution Activities 12
4.1 Distribution 12
4.2 Service Level 12
5. Management of Relationship 12
5.1 Co-Promotion Committee 12
5.1.1 Product Manager 12
5.1.2 Co-Promotion Committee 12
5.2 Development Committee 12
5.3 Executive Steering Committee 13
5.3.1 General 13
5.3.2 Quarterly Meetings 13
5.3.3 Authority 13
5.3.4 Dispute Resolution 13
6. Payments 14
6.1 Milestone Payments 14
6.1.1 Signing of Agreement 14
6.1.2 SangCya 14
6.1.3 Gengraf 14
6.1.4 Regulatory Approval - Capsule Product 14
6.2 Loan 14
6.3 Stock Purchase Agreement 14
6.4 Supplemental Fee 15
6.4.1 Definition 15
6.4.2 Calendar Year 2000 15
6.4.3 Calendar Year 2001 and After 15
(a) Base Rate 15
(b) Increases to Base Rate based on Net Sales of Gengraf 15
6.5 Commissions 16
6.5.1 Sang-2000 Commission Rate 16
6.5.2 SangCya Commission Rate 16
6.5.3 CycloTech Commission Rate 17
6.5.4 Other Cyclosporine Product Commission Rate 17
6.6 Calculation of Supplemental Fees and/or Commissions 17
6.7 Reports 17
6.7.1 Gengraf [ ]*Capsule Product 17
6.7.2 Sang-2000 [ ]* Capsule Product 18
6.8 Pricing 18
6.8.1 Product Price 18
6.8.2 Wholesale Acquisition Cost (WAC) 18
6.8.3 Rebates, Administrative Fees and Chargebacks 18
6.8.4 Medicaid Rebates 19
6.9 Product Shortage 19
6.10 Timing of Payments 19
6.10.1 Payment of Product Price 19
(a) Gengraf - Ninety Days following Initial Sale 19
(b) Gengraf - More than Ninety Days following Initial Sale 20
(c) Sang-2000 20
6.10.2 Payment of Supplemental Fee and Commissions 20
6.11 Payment Details 20
6.12 Late Payments 20
6.13 Records/Audits 20
6.14 Product Supplied for Clinical Trials, Promotional and
Humanitarian Uses 21
7. Product Development 21
7.1 Development Obligations 21
7.1.1 CycloStat System 21
7.1.2 Products 21
7.2 Development Costs 21
7.2.1 Sang-2000 21
7.2.2 Gengraf 21
7.2.3 SangCya and CycloTech 21
7.2.4 1999 and 2000 Budgets 21
7.3 Obligations 22
7.4 Regulatory Approvals 22
8. Trademarks 22
9. Supply of Finished Capsule Product 22
9.1 Exclusivity 22
9.2 Forecasting/Ordering. 23
9.2.1 Gengraf 23
9.2.2 Sang-2000 23
9.2.3 Limitation 23
9.3 Manufacturing Capacity. 23
9.3.1 Gengraf 23
9.3.2 Sang-2000 24
9.3.3 Additional Suppliers 24
10. Inventory of Products 24
11. Supply of Bulk Product By Abbott 24
12. Ownership and Confidentiality 24
12.1 Ownership 24
12.2 Covenant Not to Xxx 24
12.3 Proprietary Information 25
13. Limited Liability 25
14. Term and Termination 25
14.1 Term 25
14.2 For Cause 25
14.2.1 Ceases to do Business 25
14.2.2 Material Breach 26
14.2.3 Bankruptcy 26
14.3 Regulatory Issues 26
14.4 Certain Acquisitions 26
14.5 Effect of Termination 26
14.6 Pending Orders and Inventory 26
14.7 Effect of Termination for Breach 27
14.8 Effect of Termination for Failure to Obtain Regulatory Approval 27
14.9 Right to Promote Capsule Product 27
14.10 Repayment of Loan 27
14.11 Additional Remedies 27
14.12 Accrued Rights and Obligations 27
15. Warranty and Warranty Disclaimers 27
15.1 Abbott 27
15.1.1 Supplied Product 28
15.1.2 No Infringement 28
15.1.3 Regulatory 28
15.1.4 Title 28
15.1.5 No Violation 28
15.2 SangStat 28
15.2.1 Supplied Product 28
15.2.2 No Infringement 28
15.2.3 Regulatory 28
15.2.4 Title 28
15.2.5 No Violation 28
15.3 Promotional 29
16. Indemnification 29
16.1 Abbott Indemnity 29
16.1.1 Infringement 29
16.1.2 Product Liability 29
16.1.3 General 29
16.2 SangStat Indemnity 30
16.2.1 Infringement 30
16.2.2 Product Liability 30
16.2.3 General 30
17. Adverse Events, Recalls and other Regulatory Matters 30
17.1 Adverse Reaction Reporting 30
17.2 Product Information Requests 31
17.3 Governmental Reports 31
17.4 Product Recall 31
17.5 Procedures 31
17.6 Governmental Contact Reporting 31
17.7 Product Registration 32
17.8 Records Retention 32
18. General 32
18.1 Entire Agreement 32
18.2 Modifications in Writing 32
18.3 No Waiver 32
18.4 Governing Law 32
18.5 Headings 32
18.6 Notices 32
18.7 Severability 33
18.8 Independent Contractor 33
18.9 Assignability 33
18.10 Public Statements 33
18.11 Force Majeure 33
18.12 Remedies 33
18.13 Alternative Dispute Resolution 34
18.14 Compliance with Laws 34
18.15 Counterparts 34
* Confidential Treatment requested
CO-PROMOTION AGREEMENT
THIS CO-PROMOTION AGREEMENT is entered as of May 7, 1999 (the "Effective
Date") by and between XXXXXX LABORATORIES INC. ("Abbott"), an Illinois
corporation, with a place of business at 000 Xxxxxx Xxxx Xxxx, Xxxxxx
Xxxx, Xxxxxxxx 00000-0000, and SANGSTAT MEDICAL CORPORATION ("SangStat") a
Delaware corporation, with a place of business at 0000 Xxxxx Xxxxx, Xxxxx
Xxxx, Xxxxxxxxxx 00000.
WHEREAS, Abbott and SangStat are each developing a generic capsule
formulation of cyclosporine which capsule is intended to be AB-rated
equivalent to Neoral (as defined below);
WHEREAS, SangStat is currently marketing an oral solution
cyclosporine product known as SangCya (Cyclosporine Oral Solution, USP
[Modified]) that is AB-rated equivalent to Neoral;
WHEREAS, by combining SangStat's strengths in the transplant market,
its portfolio of transplant-related products already on the market, and
its technology in the field of at-home testing devices with Xxxxxx'x
strengths in managed care and its technology in the field of assay
development; Abbott and SangStat will create a stronger competitor to
Novartis (as defined below), the market leader, than would otherwise
prevail in the absence of this Agreement thereby enhancing competition;
WHEREAS, Abbott wishes SangStat to co-promote and sell Xxxxxx'x
generic capsule formulation of cyclosporine under the terms and conditions
set forth herein; and
WHEREAS, SangStat wishes Abbott to co-promote SangStat's generic
capsule formulation of cyclosporine, along with SangCya and CycloTech (as
defined below), under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, of the mutual
covenants and undertakings contained herein, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties intending to be legally bound hereby agree as
follows:
1. DEFINITIONS
1.1 "Abbott Detailing Commitment" has the meaning set
forth in Section 3.2.3.
1.2 "Acquiror" has the meaning set forth in Section 14.4.
1.3 "Adverse Ruling" has the meaning set forth in Section
14.2.2.
1.4 "Affiliate" means an entity controlling, controlled
by, or under common control with a party to this Agreement. For purposes
of this definition, "control" or any correlative form thereof, means the
ownership of more than fifty percent of the voting stock of such entity,
or if such entity is not a corporation, the ability to control the day-to-
day operations and business of such entity.
1.5 "ANDA" means an Abbreviated New Drug Application as
such is defined by the FDA.
1.6 "Base Rate" has the meaning set forth in Section 6.4.
1.7 "Capsule Product" means a Party's, or any of its
Affiliate's, generic capsule or tablet dosage form for which such Party
either intends to seek, is seeking or has received Regulatory Approval and
is an AB-rated product equivalent to [ ]*. The
current expected Capsule Products are more particularly described
in Exhibit A hereto.
1.8 "Commercially Reasonable Efforts" means, with respect
to each Party, efforts which are consistent with those utilized by such
Party for its own internally-developed or in-licensed pharmaceutical
products of similar market potential, at a similar stage of its product
life, taking into account the existence of other competitive products in
the market place or under development, the proprietary position of the
product, the profitability of the product and other relevant factors.
1.9 "Commission" means any commission due Abbott on
SangCya, Sang-2000 or CycloTech.
1.10 "Co-Promotion Committee" has the meaning set forth in
Section 5.1.2.
1.11 "Co-Promotion Plan" means, for any period, a written
plan developed by SangStat and Abbott for such period that has been
approved by the Executive Steering Committee and that sets forth the key
elements of the sales and marketing strategy for the Products, including,
without limitation, plans for promotional materials, clinical trials and
studies, trade show participation, and advertising, which may include the
elements set forth on Exhibit B.
1.12 "CycloStat System" means the combination of the [ ]* and
[ ].*
1.13 "CycloTech" means the dispensing device used in
conjunction with SangCya, and which received 510(k) approval from the FDA
on August 18, 1998, and which is more particularly described in Exhibit A.
1.14 "CycloTech Commission Rate" has the meaning set forth
in Section 6.5.3.
1.15 "DDMAC" means the FDA's Division of Drug Marketing,
Advertising and Communications.
1.16 "Detailing" means the act of promoting a Product in
the Territory through Physician Details and Sales Calls.
1.17 "Detail Year" means, with respect to the Products, the
calendar year. The first Detail Year shall commence on the earlier of
Xxxxxx'x Launch Date for SangCya or ninety (90) days after the Effective
Date and end December 31, 1999.
1.18 "Development Committee" has the meaning set forth in
Section 5.2.
1.19 "Development Costs" means, with respect to a Product,
the costs and expenses incurred by a Party in connection with [ ]*
The initial budget for Development Costs is set forth in Section 7.2.4.
[ ]*
1.20 "Development Plan" has the meaning set forth in
Section 5.2.
1.21 "Distribution Expenses" for a period includes, with
respect to each Product only the following costs (as determined in
accordance with U.S. generally accepted accounting principles):[ ]*
1.22 "Distributor" means the Party appointed to sell the
Products to third parties as set forth in this Agreement, in particular in
Article 2.
1.23 "Executive Steering Committee" has the meaning
specified in Section 5.3 below.
1.24 "FDA" means the U.S. Food and Drug Administration and
any successor entity thereto.
1.25 "Gengraf" means the Capsule Product that is being
developed by Abbott or its Affiliates for which Abbott or its Affiliates
is seeking [ ]* as is more particularly
described in Exhibit A.
1.26 "Initial Sale" has the meaning set forth in Section
6.10.1(a).
1.27 "Launch Date" means with respect to the applicable
Product, the date the full scale Physician Detail effort commences.
1.28 "Legal Requirements" means any and all federal, state
and local laws, regulations, ordinances, orders and requirements,
applicable to the co-promotion, distribution or sale of the Products or
other obligations of the Parties hereunder, including, without limitation,
the Prescription Drug Marketing Act of 1987, the Federal Food, Drug and
Cosmetic Act, and all regulations and other requirements of the FDA. In
the event of any conflict between the foregoing sources of authority, U.S.
federal law and regulations shall be given priority.
1.29 "Loan" has the meaning set forth in Section 6.1.4.
1.30 "Managed Care Organization" means health maintenance
organizations, hospitals, group purchasing organizations, integrated
health systems, physician management groups, pharmacy benefit managers,
mail order, retail pharmacy chains, and government entities.
1.31 "Manufacturing Cost" includes, with respect to the
Products manufactured by or for a Party, only the following (as determined
in accordance with such Party's standard principles for calculating
manufacturing cost to the extent that such principles are in accordance
with U.S. generally accepted accounting principles): [ ]* With
respect to Gengraf, the maximum Manufacturing Cost for finished Gengraf
[ ]* during the term of this Agreement is as follows: [ ]* per
kilogram during the first year after the Launch Date, [ ]*
per kilogram during the second and third year after the Launch Date, and
[ ]* per kilogram thereafter. Abbott shall
exercise Commercially Reasonable Efforts to reduce Manufacturing Costs during
the term of this Agreement. With respect to the finished Sang-2000, the
maximum Manufacturing Cost for the finished Sang-2000 [ ]*
during the term of this Agreement is as follows: [ ]* per
kilogram during the first year after the Launch Date, (ii) [ ]*
per kilogram during the second and third year after the Launch Date, and
[ ]* per kilogram thereafter. With respect to CycloTech, the maximum
Manufacturing Cost during the term of this Agreement is as follows: (i)
[ ]* per unit and (ii) [ ]* for
each disposable fluid path. With respect to SangCya, the maximum Manufacturing
Cost during the term of this Agreement shall be [ ]* per
vial.
1.32 "Market Research" has the meaning set forth in Section
3.3.2.
1.33 "Marketing Party" has the meaning set forth in Section
6.5.4.
1.34 "Marketing Reports" has the meaning set forth in
Section 3.3.2.
1.35 "Marketing Rights" has the meaning set forth in
Section 6.1.4.
1.36 "NDA" means a New Drug Application as such is defined
by the FDA.
1.37 "Neoral" means Neoral* (cyclosporine for
microemulsion) capsules and oral solution, the labeling of which the FDA
has ordered changed to Neoral* (Cyclosporine Capsules or Oral Solution,
USP [Modified]), which is currently marketed by Novartis.
1.38 "Net Distribution Margin" for a period means, with
respect to each Product, the Net Sales for such Product less [ ]*
"Net Sales" for a period means, with respect to each Product, [ ] *
1.39 "Non-Reporting Party" has the meaning set forth in
Section 6.8.4.
1.40 "Novartis" means Novartis A.G. or any of its
Affiliates.
1.41 "Orders" has the meaning set forth in Section 6.9.
1.42 "Other Cyclosporine Product" [ ]*
1.43 "Party" or "Parties" means, as applicable, Abbott or
SangStat or both.
1.44 "Payment Report" has the meaning set forth in Section
6.7.
1.45 "Physician Detail" means a face-to-face sales
presentation in the Territory by an Sales Representative during which
presentation one or more Product is promoted in accordance with the terms
hereof to a licensed medical physician, a resident, intern or other health
care professional who has lawful authority to write prescriptions for the
Products and who specializes in transplantation or nephrology.
1.46 "Primary Market Research" has the meaning set forth in
Section 3.3.2.
1.47 "Primary Physician Detail" means a Physician Detail in
which the Product being detailed is the product most emphasized, and
usually the first product presented, during the Physician Detail.
1.48 "Prime Rate" means the prime rate of interest for the
Bank of America as announced in the Wall Street Journal as of the relevant
date.
1.49 "Product" means [ ]*
1.50 "Product Manager" has the meaning set forth in Section
5.1.1.
1.51 "Product Price" shall mean the price for any Product
which is supplied by a Supplier to a Distributor in accordance with
Section 6.8.1 of this Agreement.
1.52 "Product Shortage" has the meaning set forth in
Section 6.9.
1.53 "Promotional and Marketing Costs" means, with respect
to a Product, the costs and expenses incurred by a party hereto in
connection with a promotional or marketing activity for such Product that
has been approved by the Executive Steering Committee. The initial budget
for Promotional and Marketing Costs is set forth in Section 3.3.7.
Promotional and Marketing Costs shall include the costs of [ ]*
1.54 "Proprietary Information" has the meaning set forth in
Section 12.3.
1.55 "Regulatory Approval" means the ANDA approval required
by the FDA to commercially market a Product in the Territory.
1.56 "Reporting Party" has the meaning set forth in Section
6.8.4.
1.57 "Sales Call" means a presentation regarding the
purchase of the Product(s) to a Managed Care Organization.
1.58 "Sales Representative" means, with respect to each
Party, an individual (i) who is regularly employed by such Party on a
full-time basis as a member of one of its sales forces; and (ii) who is
appropriately qualified and experienced in pharmaceutical product
promotion; and (iii) has been trained by such Party to make effective
sales presentations with respect to the applicable Product.
1.59 [ ] *
1.60 "Sandimmune" means Sandimmune soft gelatin capsules
(cyclosporine capsules, USP), oral solution (cyclosporine oral solution,
USP) and injection (cyclosporine concentrate for injection, USP), which is
currently marketed by Novartis.
1.61 "Sang-2000" means the Capsule Product that is being
developed by SangStat or its Affiliates and for which SangStat or an
Affiliate expects to submit an application for ANDA approval on or before
[ ]* as is more particularly described
in Exhibit A.
1.62 "Sang-2000 Commission Rate" has the meaning set forth
in Section 6.5.1.
1.63 "SangCya" means the oral solution cyclosporine product
known as SangCyaT (Cyclosporine Oral Solution, USP [Modified]) that was
approved by the FDA on October 31, 1998 as AB rated to Neoral, as is more
particularly described in Exhibit A, whether sold under the SangCya
trademark or any other trademark.
1.64 "SangCya Commission Rate" has the meaning set forth in
Section 6.5.2.
1.65 "SangStat Detailing Commitment" has the meaning set
forth in Section 3.1.2.
1.66 "Secondary Market Research" has the meaning set forth
in Section 3.3.2.
1.67 "Service Level Commitment" has the meaning set forth
in Section 4.2.
1.68 "Stock Package Request Units" means a packaged and
labeled container of a Product intended for distribution free of charge on
the written request of a physician.
1.69 "Stock Package Request Program" means the program
under which Stock Package Request Units are distributed.
1.70 "Supplemental Fees" has the meaning set forth in
Section 6.4.
1.71 "Supplier" [ ]*
1.72 "Territory" means the United States of America,
including Puerto Rico.
1.73 "WAC" has the meaning set forth in Section 6.8.2.
2. PURPOSE OF THE AGREEMENT
2.1 Purpose. The purpose of the Agreement is to enhance the
ability of the Parties to market, promote and distribute the Products
within the Territory through coordinated marketing efforts and a refined
distribution channel.
2.2 Appointment. SangStat hereby appoints Abbott as its
exclusive co-promotion partner for SangCya and CycloTech throughout the
term of the Agreement in the Territory. [ ] *
2.3 Agent for Managed Care Organizations Contracting.
SangStat hereby appoints Abbott as its agent in the Territory for entering
into contracts with Managed Care Organizations for SangCya and CycloTech.
[ ] *
2.4 [ ]*
2.5 Exclusivity. During the term of this Agreement, neither
Party nor any of its Affiliates shall directly or indirectly promote,
market, distribute or sell (or license or permit any other party to do so)
[ ]* in the Territory except pursuant
to the terms of this Agreement.
3. CO-PROMOTION ACTIVITIES
3.1 SangStat's Marketing Obligations
3.1.1 Co-Promotion Sales Force and Management. SangStat
shall market and co-promote the Products in the Territory using a minimum
of [ ]* SangStat Sales Representatives who
are dedicated full-time to the transplant market, and [ ]* Managed
Care Organization account representatives. SangStat shall have at least
one employee dedicated full-time to act as Product Manager for the
Products.
3.1.2 Product Launches. SangStat shall use Commercially
Reasonable Efforts to initiate the Physician Details and Sales Calls for
the Products as follows: (a) CycloTech in [
]* , (b) [ ]* The Parties acknowledge
that SangStat has launched SangCya as of the Effective Date.
3.1.3 SangStat Detailing Commitment. During the term of
this Agreement, SangStat shall conduct Physician Details, Sales Calls and
otherwise promote the sale of Products in the Territory in accordance with
the terms of this Agreement, the then-current Co-Promotion Plan for such
Product, and all Legal Requirements. For each Product, SangStat Sales
Representatives shall perform at least the number and types of Physician
Details set forth on Exhibit C attached hereto (the "SangStat Detailing
Commitment"). In addition, the SangStat Managed Care Organization
account representatives shall use Commercially Reasonable Efforts to
conduct Sales Calls. SangStat shall perform the SangStat Detailing
Commitment for each Detail Year on a pro-rata basis over the four (4)
calendar quarters in such Detail Year. SangStat may perform, but Abbott
shall have no obligation to compensate SangStat for, any of SangStat's
Physician Details in excess of the SangStat Detailing Commitment for each
Detail Year. SangStat shall provide Abbott within thirty (30) days
following the end of each calendar quarter a report on the number of
Primary Physician Details conducted by SangStat Sales Representatives for
such calendar quarter.
3.1.4 Failure to Achieve SangStat Detailing Commitment.
If SangStat fails to achieve at least [ ]* of the
SangStat Detailing Commitment in any calendar quarter, then [ ]*
If SangStat fails to achieve at least [ ]* of the SangStat Detailing
Commitment in any [ ]* consecutive calendar
quarters, then Abbott may terminate this Agreement pursuant to Section 14.2.2.
3.1.5 Additional Obligations. In addition to (and
without in any way limiting) the foregoing, SangStat shall undertake and
perform, without limitation, all SangStat obligations set forth in the Co-
Promotion Plan approved by the Executive Steering Committee. Such Co-
Promotion Plan may include all of the activities listed on Exhibit B. The
Executive Steering Committee may revise the Co-Promotion Plan obligations
at any time and from time to time, provided that any such amendment must
be in writing and signed by the Parties.
3.2 Xxxxxx'x Marketing Obligations
3.2.1 Sales Force. Xxxxxx shall market and co-promote
the Products in Territory, using (i) the equivalent of [ ]*
full-time equivalent Managed Care Organization account representatives, and
(ii) [ ]* Xxxxxx Sales Representatives who
are dedicated to the hospital setting and the transplant market. Xxxxxx shall
have at least one employee dedicated to act as Product Manager for the
Products.
3.2.2 Product Launches. Xxxxxx shall use Commercially
Reasonable Efforts to launch (a) its Physician Detail effort for SangCya
in the Territory within ninety (90) days after the Effective Date, (b) its
Sales Calls effort for SangCya with respect to Managed Care Organizations
within thirty (30) days after the Effective Date, (c) its Physician Detail
and Sales Calls effort for CycloTech within thirty (30) days after launch
of CycloTech by SangStat, but with no obligation to launch before [ ]*,
and (d) [ ]*
3.2.3 Xxxxxx Detailing Commitment. During the term of
this Agreement, Xxxxxx shall conduct Physician Details, Sales Calls and
otherwise promote the sale of Products in the Territory in accordance with
the terms of this Agreement, the then-current Co-Promotion Plan for such
Product, and all Legal Requirements. For each Product, Xxxxxx Sales
Representatives shall perform at least the number and types of Physician
Details set forth on Exhibit C attached hereto (the "Xxxxxx Detailing
Commitment"). In addition, the Xxxxxx Managed Care Organization account
representatives shall use Commercially Reasonable Efforts to conduct Sales
Calls. Xxxxxx shall perform the Xxxxxx Detailing Commitment for each
Detail Year on a pro-rata basis over the four (4) calendar quarters in
such Detail Year. Xxxxxx may perform, but SangStat shall have no
obligation to compensate Xxxxxx for, any of Xxxxxx'x Physician Details in
excess of the Xxxxxx Detailing Commitment for each Detail Year. Xxxxxx
shall provide SangStat within thirty (30) days following the end of each
calendar quarter a report on the number of Primary Physician Details
conducted by Xxxxxx Sales Representatives for such calendar quarter.
3.2.4 Failure to Achieve Xxxxxx Detailing Commitment.
If Xxxxxx fails to achieve at least [ ]* of the Xxxxxx
Detailing Commitment in any calendar quarter, then [ ]* If
Xxxxxx fails to achieve at least [ ]* of the Xxxxxx
Detailing Commitment in any three consecutive calendar quarters, then SangStat
may terminate this Agreement pursuant to Section 14.2.2.
3.2.5 Information. In addition to the mutual
obligations set forth in Section 3.3.2, Xxxxxx shall, on a regular basis
provide SangStat with all current marketing and sales information relating
to the subject matter of the Products, including, without limitation,
research, analysis, customer and distribution information and competitive
analysis; provided (i) such research, analyses, and information are
available at Xxxxxx and have already been prepared at Xxxxxx; (ii) Xxxxxx
has no contractual or other obligation which would prevent it from sharing
such information with SangStat; and (iii) Xxxxxx shall not be required to
absorb any internal or external expenses with respect to providing such
information. SangStat will be free to use such information internally for
purposes of this Agreement only and only during the term of this
Agreement. Any such information shall be considered Confidential
Information.
3.2.6 Additional Obligations. In addition to (and
without in any way limiting) the foregoing, Xxxxxx shall undertake and
perform, without limitation, all Xxxxxx obligations set forth in the Co-
Promotion Plan approved by the Executive Steering Committee. Such Co-
Promotion Plan may include all of the activities listed on Exhibit B. The
Executive Steering Committee may revised the Co-Promotion Plan obligations
at any time and from time to time, provided that any such amendment must
be in writing and signed by the Parties.
3.3 Mutual Marketing Obligations
3.3.1 Training. Each Party shall pay all costs
associated with training and re-training its relevant staff to promote
knowledge of the Products and in accordance with the Co-Promotion Plans
and all Legal Requirements; provided, however, that SangStat shall make
available to Xxxxxx the Product-specific training materials that are
currently being used for its Sales Representatives for SangCya and
CycloTech in sufficient quantities to distribute to each Xxxxxx Sales
Representative. The Co-Promotion Committee shall determine who shall
develop the training materials for the Capsule Product and any other
Product, including new training materials for SangCya or CycloTech. The
costs for printing the SangCya and CycloTech specific training materials
for either Xxxxxx or SangStat and for developing and printing Training
Materials for the Capsule Product or any other Product shall be considered
part of Promotional and Marketing Costs.
3.3.2 Market Research. The Co-Promotion Committee shall
determine what market research should be done. Market research shall
consist of Primary and Secondary Market Research ("Market Research").
The Co-Promotion Committee shall assign responsibility for Primary Market
Research between the Parties. "Primary Market Research" shall include
focus group interviews, market research surveys, in-depth interviews with
medical providers, and similar types of market research agreed to by the
Co-Promotion Committee. "Secondary Market Research" shall include
syndicated data from IMS and other representative data sources (the
"Marketing Reports"). The Co-Promotion Committee shall determine the
type of reports to be obtained through Secondary Market Research. The
Marketing Reports shall be shared between the Parties and may be used by
either Party. The costs for Market Research shall be considered part of
Promotional and Marketing Costs. Additional market research or reports
beyond the Marketing Reports shall be the responsibility and cost of the
individual Parties.
3.3.3 Incentives. Each Party shall reward its personnel
for promoting the Products through an incentive-based compensation system
at least to the same extent and in the same manner as such Party would
reward its personnel for the promotion of one of its own products of
comparable commercial value and comparable required detailing effort and
in any event at least equal to the product with the highest level of
incentives which is being promoted by such Sales Representatives. Each
Party shall have the right, at its expense, to audit the other Party's
compliance with this Section 3.3.3 pursuant to the audit provisions set
forth in Section 6.13.
3.3.4 Sampling. The Co-Promotion Committee shall
establish a sampling program pursuant to which one or both of the Parties
shall distribute Stock Package Request Units free of charge to health care
personnel on an ongoing basis in accordance with a Stock Package Request
Program developed by the Co-Promotion Committee for such Product and all
Legal Requirements. Each Party shall maintain all records required
pursuant to the Prescription Drug Marketing Act of 1987, including,
without limitation, maintenance of written requests and delivery receipts
for any units delivered to its sales force for so long as required by such
Act. Each Party shall promptly report to the other Party any thefts or
losses of Stock Package Request Units. The costs related to the
Manufacturing Costs of such Stock Package Request Program shall be
considered Promotional and Marketing Costs.
3.3.5 Indigent Programs. In addition to the sales and
marketing activities covered under this Agreement, the ANDA holder for the
applicable Product shall establish and operate an indigent program for
distribution of its Products to needy individuals and/or the physicians
and other providers serving such needy individuals in the Territory. The
Co-Promotion Committee shall meet and agree upon the details and costs of
such program. The ANDA holder for the applicable Product shall be solely
responsible for administering such programs. The costs related to such
indigent programs shall be considered Promotional and Marketing Costs.
3.3.6 Development of Promotional Materials. The Co-
Promotion Committee shall develop, produce and distribute the Product
promotional materials to the Sales Representatives. All Product
promotional materials shall be subject to final review and approval of the
regulatory department of the Party that holds the ANDA on such Product.
The ANDA holder shall indemnify the other Party for any use of such
approved promotional material in accordance with Article 16, provided the
distribution of such promotional materials by such Party is in accordance
with the terms of this Agreement. SangStat shall provide, at cost, a
reasonable number of copies of its currently existing promotional
materials regarding SangCya and CycloTech as requested by Xxxxxx, for
distribution by Xxxxxx to its Sales Representatives. SangStat's
regulatory department has or shall have approved such promotional
materials. All costs relating to promotional materials for the Products
shall be shared by the Parties as set forth below in Section 3.3.7.
3.3.7 Promotional and Marketing Costs. The Parties
shall share the Promotional and Marketing Costs for each of the Products
as follows: (a) SangStat shall be responsible for [ ]* and
Xxxxxx shall be responsible for [ ]* of the
Promotional and Marketing Costs for [ ]* (b)
SangStat shall be responsible for [ ]* and
Xxxxxx shall be responsible for [ ]* of Promotional
and Marketing Costs for [ ]* and (c)
SangStat shall be responsible for [ ]* and
Xxxxxx shall be responsible for [ ]* of Promotional
and Marketing Costs for [ ]* The total 1999
Calendar Year budget and 2000 Calendar Year budget for Promotional and
Marketing Costs are set forth below:
SangCya Capsule
and CycloTech Product
----------------- -----------------
1999 [ ]* [ ] *
2000 [ ]* [ ] *
The 1999 budget for SangCya and CycloTech shall be pro-rated for the
remainder of the calendar year based on the Effective Date. For example,
if the Effective Date is June 1, 1999, then the calendar year 1999 budget
for Promotional and Marketing Costs for SangCya and CycloTech would be [ ]*
The 1999 calendar year budget for the Capsule Product assumes the
Capsule Product is launched [ ]* If
the Co-Promotion Committee determines that the Capsule Product is not
likely to be launched [ ] * then the 1999
budget for the Capsule Product shall be [
]* If the Capsule Product is not launched on or before [ ]* the
calendar year 2000 budget for the Capsule Product will be pro-rated
monthly for the calendar year based on the Launch Date. For example, if
the Launch Date is April 1, 2000, the calendar year 2000 budget shall be
[ ]* The Executive Steering Committee may revise such budgets. Any such
revision shall be documented and signed by the Parties. Within ninety
(90) days prior to the start of each calendar year beginning with 2001,
the Co-Promotion Committee shall meet and agree upon the budget for the
Promotional and Marketing Costs for SangCya and the Capsule Product for
the upcoming calendar year.
3.3.8 Detailing. The Executive Steering Committee shall
review the Xxxxxx Detailing Commitment and the SangStat Detailing
Commitment on an annual basis to determine whether or not adjustments
should be made to either Party's detailing commitment. Notwithstanding
the foregoing, no changes shall be made to either the Xxxxxx Detailing
Commitment or the SangStat Detailing Commitment unless both Parties agree
in writing.
3.3.9 Managed Care Organizations. Xxxxxx and SangStat
shall work together to develop Product acceptance among Managed Care
Organizations as widely as possible. SangStat shall have the right to
conduct Sales Calls to Managed Care Organizations, either concurrently or
separately from Xxxxxx, and to promote any of the Products in accordance
with the terms of this Agreement. In connection therewith, the Parties
shall share information regarding proposed Sales Calls on Managed Care
Organizations under the supervision of the Co-Promotion Committee to
ensure co-ordination. Xxxxxx shall use Commercially Reasonable Efforts to
promote SangCya and CycloTech to Managed Care Organizations.
4. DISTRIBUTION ACTIVITIES
4.1 Distribution. The distribution of the Products shall be
as set forth in Section 2.2.
4.2 Service Level. The Distributor of the Product [ ]* shall
completely fulfill at least [ ]* of the
orders placed for Products by N.D.C. number within [ ]*
business days of the receipt of such orders by shipping all of the Products
ordered to the customer within such [ ]*
business day period (the "Service Level Commitment"). The Distributor shall
maintain, and provide to the other Party upon request, sufficient, accurate
and complete records to evidence its compliance or noncompliance with this
Service Level Commitment. The obligations of the Distributor under this
Section 4.2 are subject to Supplier timely providing Distributor with
sufficient quantities of Product to fulfill such obligations.
5. MANAGEMENT OF RELATIONSHIP
5.1 Co-Promotion Committee
5.1.1 Product Manager. Each Party shall have a
"Product Manager." Initially, the Product Manager shall be the current
cyclosporine Product Manager for each Party. The Product Managers shall
be responsible for day-to-day communications between the Parties. Either
Party may change its Product Manager at any time and from time to time by
giving the other Party written notice. The Product Managers shall meet
every month to discuss the progress of the development and marketing
efforts and, if applicable, to exchange information. Product Managers are
not authorized to amend, alter or extend this Agreement in any manner. If
the Product Managers disagree on any issue, and cannot resolve it within
14 days, either Product Manager may submit the problem to the Co-Promotion
Committee.
5.1.2 Co-Promotion Committee. The Parties shall form a
Co-Promotion Committee within thirty (30) days after the Effective Date.
The Co-Promotion Committee shall consist of three members from each party.
Each Party may change its members of the Co-Promotion Committee at any
time and from time to time by giving the other Party written notice. The
Co-Promotion Committee shall meet on a calendar quarterly basis or more
frequently if agreed to by both Parties. The Co-Promotion Committee shall
keep minutes of each meeting. In addition to other responsibilities
agreed to by the Parties, the Co-Promotion Committee shall develop,
propose and oversee the implementation of the annual Co-Promotion Plan for
the promotion of such Product, including both an associated budget
therefor and a sampling program for such Product. [ ]* The
budgets for Promotional and Marketing Costs for 1999 and 2000 have been
established and are set forth in Section 3.3.7. The Co-Promotion Committee
may not change any obligation of the Parties established under this Agreement
without written consent of the Parties. Decisions of the Co-Promotion
Committee shall be unanimous, and disagreements within the Co-Promotion
Committee shall be escalated to the Executive Steering Committee.
5.2 Development Committee. The Parties shall form a
Development Committee within thirty (30) days after the Effective Date..
The Development Committee shall consist of three members from each party.
Each Party may change its members of the Development Committee at any time
and from time to time by giving the other Party written notice. The
Development Committee shall meet on a calendar quarterly basis or more
frequently if agreed by the Parties. The Development Committee shall keep
minutes of each meeting. In addition to other responsibilities agreed to
by the Parties, the Development Committee shall develop, propose and
oversee the implementation of an annual plan for the post-approval
development activities for such Product (each a "Development Plan"),
including an associated budget therefor. Section 7.2.4 sets forth the
agreed budget for the Development Plan for both calendar years 1999 and
2000. The Development Committee may not change any obligation of the
Parties established under this Agreement without written consent of the
Parties. Decisions of the Development Committee shall be unanimous, and
disagreements within the Development Committee shall be escalated to the
Executive Steering Committee. The Development Committee shall meet within
ninety (90) days after the Effective Date to develop [ ]*
5.3 Executive Steering Committee
5.3.1 General. The Executive Steering Committee shall
consist of three executives from each party. Each party may change its
members of the Executive Steering Committee at any time and from time to
time by written notice to the other Party. The initial members of the
Executive Steering Committee for each Party are set forth below:
For Xxxxxx For SangStat
Vice President, Commercial Operations, Chief Executive Officer
Pharmaceutical Products Division
Vice President, Commercial Operations, Senior Vice President,
Chemical and Agricultural Products Division Finance
General Manager, HIV and Transplantation, Senior Vice President,
Pharmaceutical Products Division Operations
5.3.2 Quarterly Meetings. The Executive Steering
Committee shall meet each calendar quarter to discuss the status of the
sales and marketing of the Products. The Executive Steering Committee
shall also review quarterly performance versus budget. Twice per year,
the Executive Steering Committee shall adopt or readopt an operating
budget and a Co-Promotion Plan. Within the parameters of this Agreement,
the budget and Co-Promotion Plan will describe the major financial and
non-financial responsibilities of the Parties (e.g., manufacturing, sales,
marketing, development, etc. and major objectives.)
5.3.3 Authority. The Executive Steering Committee may
take action only by the unanimous written consent of all members
identified above.
5.3.4 Dispute Resolution. If an issue remains
unresolved after consideration by the Executive Steering Committee, any
Executive Steering Committee member may escalate it to the President,
Pharmaceutical Products Division, for Xxxxxx, but in the case of a dispute
relating to the supply of Gengraf, then to the President, Chemical and
Agricultural Products Division, for Xxxxxx, and the Chief Executive
Officer, for SangStat for resolution. If an issue still remains
unresolved, either Party may refer to Section 18.13 for resolution.
6. PAYMENTS
6.1 Milestone Payments
6.1.1 Signing of Agreement. Within ten (10) business
days after the Effective Date, Xxxxxx shall pay SangStat a non-refundable
(except as provided in Section 14.4) seven million dollar (U.S.
$7,000,000) milestone.
6.1.2 SangCya. In consideration of the right to co-
promote SangCya, Xxxxxx shall pay SangStat a non-refundable (except as
provided in Section 14.4) milestone payment of [ ]* payable
as follows:
(a) Ninety (90) days after the Effective Date,
Xxxxxx shall pay SangStat six million dollars (U.S. $6,000,000);
(b) Ninety (90) days after the Xxxxxx Launch Date
for SangCya, Xxxxxx shall pay SangStat [ ]* and
(c) One hundred and eighty (180) days after the
Xxxxxx Launch Date for SangCya, Xxxxxx shall pay SangStat [ ]*
6.1.3 Gengraf. In consideration of the right to co-
promote Gengraf, SangStat shall pay Xxxxxx a non-refundable milestone
payment of [ ]* payable by [ ]*
6.1.4 Regulatory Approval - Capsule Product. Within ten
(10) business days after Regulatory Approval of the [ ]*
Capsule Product, Xxxxxx shall pay SangStat a non-refundable (except as
provided in Section 14.4) milestone of [ ]*
6.2 Loan. Within ten (10) business days of the Effective
Date, Xxxxxx shall pay SangStat sixteen million dollars (U.S. $16,000,000)
(the "Loan"). The Loan shall bear simple interest calculated annually
at [ ]* Interest is payable annually on
whatever interest is accrued, starting December 31, 1999 and each December
31st thereafter until December 31, 2004. The Loan shall be secured by a
security interest in the exclusive United States marketing rights for
SangCya, including all necessary license rights to manufacture, promote
and sell SangCya in the United States (the "Marketing Rights").
SangStat may repay the Loan, together with accrued interest at any time,
but in no event with respect to the principal and accrued but unpaid
interest, by later than December 31, 2004. SangStat shall execute such
instruments as are reasonably necessary so that Xxxxxx may perfect its
security interest in the Marketing Rights.
6.3 Stock Purchase Agreement. Concurrent with execution of
this Agreement, the Parties shall enter into a Stock Purchase Agreement
and related agreements in the form attached hereto as Exhibit G pursuant
to which Xxxxxx shall purchase from SangStat and SangStat shall issue to
Xxxxxx certain securities of SangStat.
6.4 Supplemental Fee
6.4.1 Definition. If [ ]* Xxxxxx shall
pay to SangStat as a supplemental fee a percentage share
of Net Distribution Margin on Gengraf as described in this Section 6.4
(the "Supplemental Fee").
6.4.2 Calendar Year 2000. From the Launch Date and
through calendar year 2000, the Supplemental Fee shall equal [ ]*
6.4.3 Calendar Year 2001 and After
(a) Base Rate. For calendar years 2001 and
beyond, the base rate percentage for the Supplemental Fee shall be fixed
using Matrix A below based on the date on which Xxxxxx receives Regulatory
Approval for Gengraf (the "Base Rate").
Matrix A
Supplemental Fee - SangStat's Base Rate
Date of Regulatory Approval of Gengraf
[ ]* [ ]* [ ]* [ ]* [ ]* [ ]*
SangStat's [ ]* [ ]* [ ]* [ ]* [ ]* [ ]*
Percentage
Share of
Net
Distribution
Margin
(b) Increases to Base Rate based on Net Sales of
Gengraf. In addition, SangStat's percentage share of Net Distribution
Margin shall be increased from the Base Rate, by (i) [ ]* on
all sales of Gengraf if Net Sales of Gengraf for such calendar year are more
than [ ]* but less than [ ]*
(ii) [ ]* on all sales of Gengraf if Net Sales of
Gengraf for such calendar year are more than [ ]* but no more
than [ ]* and (iii) [ ]*
on all sales of Gengraf if Net Sales of Gengraf for such calendar year are
more than [ ]* The additional percentage
points set forth in clauses (i), (ii) and (iii) above shall apply to all
sales of Gengraf for such calendar year during which the minimum Net Sales
thresholds described above in this paragraph have been exceeded. For
example, if Gengraf is approved [ ]* the Supplemental Fee
shall be [ ]* for all calendar years
beginning with 2001. Each calendar year that the Gengraf Net Sales are
greater than [ ]* the Parties shall
adjust the Supplemental Fee based on the amount of the Gengraf Net Sales.
For example, if the Gengraf Net Sales for calendar year 2001 are
[ ]* then for calendar year 2001, the Supplemental
Fee shall be increased from [ ]* to
[ ]*
6.5 Commissions
6.5.1 Sang-2000 Commission Rate. [ ]*
SangStat shall pay Xxxxxx a commission equal to a percentage of the Net
Distribution Margin of Sang-2000 as set forth below (the "Sang-2000
Commission Rate"). The Sang-2000 Commission Rate shall be determined based
upon the timing of the Sang-2000 Regulatory Approval as set forth below:
Sang-2000 Sang-2000
Regulatory Approval Date Commission Rate
(a) [ ]* [ ]*
(b) [ ]* [ ]*
(c) [ ]* [ ]*
(d) [ ]* [ ]*
(e) [ ]* See Matrix B below
In addition, the Sang-2000 Commission Rate shall be adjusted as provided
in Matrix B below if the Sang-2000 Regulatory Approval occurs (i) [ ]*
prior to Regulatory Approval of Gengraf, and (ii) on or after [ ]* If
(i) and (ii) are satisfied, the Sang-2000 Commission Rate shall be increased
to the percentage specified in Matrix B below, based on the date that
Sang-2000 receives Regulatory Approval:
Matrix B
Sang-2000 Commission Rate
( )
Date of Regulatory Approval of Sang-2000
[ ]* [ ]* [ ]* [ ]* [ ]*
Xxxxxx'x
Share of [ ]* [ ]* [ ]* [ ]* [ ]*
Net
Distribution
Margin
[ ] *
6.5.2 SangCya Commission Rate. As additional
consideration, SangStat shall pay Xxxxxx a commission equal to a
percentage of Net Distribution Margin as set forth below in Matrix C (the
"SangCya Commission Rate") from the sales of SangCya. However, if [ ]*
then the Commission Rate for SangCya shall be limited to [ ]*
In addition, if [ ]* then the
SangCya Commission Rate shall be limited to [ ]*
Matrix C
SangCya Commission Rate
[ ]*
Date
[ ]* [ ]* [ ]*
Commission Rate
(Measured as a [ ]* [ ]* [ ]*
Percentage of Net
Distribution Margin
of SangCya)
6.5.3 CycloTech Commission Rate. If SangStat elects to
sell CycloTech for use with SangCya in the Territory, SangStat shall pay
Xxxxxx a commission on the sales of such CycloTech devices that is a
percentage of the Net Distribution Margin on such devices and which is
calculated in the same manner as the then applicable SangCya Commission
Rate set forth in Matrix C above (the "CycloTech Commission Rate").
However, if [ ]* then the CycloTech Commission Rate
shall be limited to [ ]* In addition,
if [ ]* then the CycloTech Commission
Rate shall be limited to [ ]*
6.5.4 Other Cyclosporine Product Commission Rate. In
consideration for the mutual covenant contained in Section 2.5, if a Party
or any of its Affiliates sells in the Territory an Other Cyclosporine
Product (the "Marketing Party"), the Marketing Party shall pay to the
other Party on each Other Cyclosporine Product sold, a commission of
[ ]* of Net Sales received by the
Marketing Party from the sale of the Other Cyclosporine Product in the
Territory, until the earlier of (a) December 31, 2004, or (b) such time as
the Marketing Party has paid to the other Party [ ]*
in respect of such Net Sales of such Other Cyclosporine Product, or (c)
termination of this Agreement pursuant to Section 14.2 due to a breach by the
non-Marketing Party; or (d) termination of this Agreement pursuant to Section
14.3 or Section 14.4.
6.6 Calculation of Supplemental Fees and/or Commissions.
[ ]* SangStat shall at the end of each
calendar quarter calculate Net Sales and Net Distribution Margins to
determine (i) the commission due SangStat for SangCya and (ii) the
Supplemental Fee due SangStat for Gengraf. [
]*, Xxxxxx shall at the end of each calendar quarter calculate Net Sales
and Net Distribution Margin to determine the commission due Xxxxxx for
Sang-2000.
6.7 Reports
6.7.1 Gengraf [ ]*Capsule Product. [ ]*
Xxxxxx shall provide to SangStat its Manufacturing Costs for Gengraf,
and any applicable deductions needed to calculate Net Sales of Gengraf
(including, for example, rebates, administrative fees or chargebacks
incurred), quarterly by the thirtieth (30th) day after each calendar
quarter. SangStat shall provide to Xxxxxx its Distribution Expense for
Gengraf and SangCya and its Manufacturing Cost for SangCya quarterly by
the thirtieth (30th) day after each calendar quarter. SangStat shall
provide Xxxxxx with a Net Distribution Margin report for each Product (a
"Payment Report") by the forty-fifth (45th) day after each calendar
quarter. In addition, the Payment Report shall include a report
delineating, for each entity contributing to Net Distribution Margin:
(a) the number and types of Products sold during the applicable period,
(b) the calculation of Net Sales of such Product; (c) the calculation of
Net Distribution Margin for such Product, and (d) the calculation of the
amount due to Xxxxxx or SangStat, as the case may be.
6.7.2 Sang-2000 [ ]*Capsule
Product. [ ]* then SangStat shall provide to Xxxxxx its
Manufacturing Costs for Sang-2000, and any applicable deductions needed to
calculate Net Sales of Sang-2000 (including, for example, rebates,
administrative fees or chargebacks incurred) to Xxxxxx quarterly by the
thirtieth (30th) day after each calendar quarter. Xxxxxx shall provide to
SangStat its Distribution Expense for Sang-2000 quarterly by the thirtieth
(30th) day after each calendar quarter. Xxxxxx shall provide SangStat
with a Payment Report for Sang-2000 by the forty-fifth (45h) day after
each calendar quarter. SangStat shall continue to provide Xxxxxx the
Payment Reports for SangCya and CycloTech as set forth in Section 6.7.1.
6.8 Pricing
6.8.1 Product Price. In the case of Capsule Product,
Supplier shall sell Capsule Product to Distributor, and Distributor agrees
to purchase the Capsule Product from Supplier at a price equal to [ ]*
6.8.2 Wholesale Acquisition Cost (WAC). The Distributor
shall establish the wholesale acquisition cost ("WAC") for each Product
sold by the Distributor. Within ten (10) days after the first Capsule
Product receives Regulatory Approval, each Party shall deliver a letter(s)
to the First Databank informing First Databank that the Distributor shall
be solely authorized to utilize the N.D.C. number for the Product to
establish the WAC for such Product throughout the Term, unless the
Distributor's rights to distribute such Product expire or are terminated
hereunder. Distributor shall cooperate with Supplier in executing such
letters to be sent to First Databank as may be necessary to permit
Distributor to establish the WAC for each Product.
6.8.3 Rebates, Administrative Fees and Chargebacks.
Xxxxxx shall be solely responsible for paying any rebates and
administrative fees and processing chargebacks due thereunder for the
Products. Xxxxxx shall not include SangCya or Sang-2000 in a contract
with a Managed Care Organization covering any of Xxxxxx'x other products.
SangStat shall maintain and provide to Xxxxxx upon request sufficient,
accurate and complete records to permit Xxxxxx to validate chargebacks and
other contract sales, including sales to Managed Care Organizations.
Xxxxxx shall be solely responsible for the terms and conditions of any
Managed Care Organization contracts for Gengraf Capsule Product. All
rebates, administrative fees and chargebacks paid to Managed Care
Organizations shall be included in the calculation of Net Sales, subject
to the restrictions contained in the definition of Net Sales.
6.8.4 Medicaid Rebates. The Parties anticipate that the
holder of the ANDA for each Product (the "Reporting Party") shall be
responsible both for paying any Medicaid rebates owed to the government on
the sales of such Product, and filing any required reports with the
government with respect to such rebates. The Party that is not the
Reporting Party (the "Non-Reporting Party") shall provide any
information that is reasonably requested by the Reporting Party in order
to prepare such government reports on a calendar quarterly basis. The
Reporting Party, in its sole discretion, shall determine the calculation
of any Medicaid rebate due on its Product(s); the Non-Reporting Party
shall reimburse the Reporting Party for the financial liability resulting
from any inaccurate or incomplete provision of information to the
Reporting Party. Any other liability relating to the Reporting Party's
calculation of the Medicaid rebate shall be the Reporting Party's
responsibility.
6.9 Product Shortage. With respect to any Product that is
the subject of a Product Shortage, the Parties shall each receive [ ]*
of Net Distribution Margin for such Product during the [ ]*
in which such Product Shortage is in effect. Immediately following
termination of a Product Shortage, the Net Distribution Margin for such
Product shall be re-established at the percentages in effect immediately
prior to the calendar quarter in which the Product Shortage first occurs.
For purposes of this Section, a "Product Shortage" means any calendar
quarter in which Supplier fails to supply, for any reason except for Force
Majeure, at least [ ]* of all firm
orders of a Product (the "Orders") for such calendar quarter, but if and
only if such Orders (i) do not exceed the most recent forecast for such
calendar quarter, (ii) are no greater than the level required to fill
Product prescriptions dispensed in the Territory during such calendar
quarter. If, however, Supplier fills all pending and new Orders which have
been placed in accordance with the terms of this Agreement during the
calendar quarter immediately following the calendar quarter in which such
Product Shortage occurred, Supplier shall be deemed to have remedied the
Product Shortage and no change in the Net Distribution Margin percentages
will occur with respect to such Product Shortage. However, the first
calendar quarter for which the Parties shall apply the Product Shortage
test shall be the third calendar quarter after the calendar quarter in
which the Launch Date for such Product occurs.
6.10 Timing of Payments
6.10.1 Payment of Product Price
(a) Gengraf - Ninety Days following Initial Sale.
[ ]* with respect to shipments delivered before SangStat's
first sale of Gengraf to the market (the "Initial Sale") or within
ninety (90) days thereafter, SangStat shall pay to Xxxxxx the Product
Price for such Capsule Product within ninety (90) days of receipt of
invoice; provided, however, that SangStat may defer payments on each
shipment until one hundred and twenty (120) days after receipt of invoice
without being in breach of this Agreement if SangStat pays interest to
Xxxxxx at the Prime Rate on the amount of the payment that remains
outstanding on the ninety-first (91st) day after receipt of such invoice
and after one hundred and twenty (120) days in accordance with Section
6.12. After one hundred and twenty (120) days, however, SangStat shall be
in material breach of this Agreement for failure to pay until SangStat
makes such payment and all accrued interest.
(b) Gengraf - More than Ninety Days following Initial Sale.
[ ]* with respect to shipments
delivered more than ninety (90) days after the Initial Sale of the Capsule
Product, SangStat shall pay to Xxxxxx the Product Price for such Capsule
Product within sixty (60) days of receipt of invoice; provided, however,
that SangStat may defer payments on each shipment until ninety (90) days
after receipt of invoice without being in breach of this Agreement if
SangStat begins to pay interest to Xxxxxx at the Prime Rate on the amount
of the payment that remains outstanding on the 61st day after receipt of
such invoice and after ninety (90) days in accordance with Section 6.12.
After one hundred and twenty (120) days, however, SangStat shall be in
material breach of this Agreement for failure to pay until SangStat makes
such payment and all accrued interest.
(c) Sang-2000. [ ]* with respect to
Sang-2000 shipped to Xxxxxx hereunder, Xxxxxx shall pay to SangStat the
Product Price for such product within forty-five (45) days after the date
Xxxxxx receives such shipment. 6.10.2 Payment of Supplemental Fee and
Commissions. The Supplemental Fee and the Commissions due pursuant to this
Article 6 shall be paid within forty-five (45) days after the end of the
calendar quarter in which they are accrued by each Party.
6.11 Payment Details. All such payments are to be made in US
dollars in the United States.
6.12 Late Payments. Late payments by either Party to the
other Party shall bear interest at the lower of: (i) the Prime Rate plus
2% or (ii) the maximum rate allowed by law.
6.13 Records/Audits. Each Party shall keep complete and
accurate records reflecting all information necessary or useful in
verifying the accuracy of each Payment Report, as well as records
reflecting all information necessary or useful to verify the accuracy of
each Party's Supplemental Fees, Commissions, Net Distribution Margins, Net
Sales, Manufacturing Costs, Distribution Expenses, Development Costs,
Promotional and Marketing Costs, Physician Details, and Service Level
Commitment (collectively, the "Audited Information"). Each Party shall
have the right to hire an independent certified public accountant to
inspect the Audited Information (which accountant shall agree in writing
to keep all Audited Information confidential except as needed to disclose
any discovered discrepancies); provided, such audit: (i) is conducted
during normal business hours, (ii) is conducted no more often then once
per year (unless a discrepancy greater than five percent (5%) is
discovered in favor of the auditing party), and (iii) is conducted only
after the auditing party has given thirty (30) days' prior written notice.
The auditing party shall bear the full cost and expense of such audit,
unless a discrepancy in excess of five percent (5%) in favor of the
auditing party is discovered, in which event the audited party shall bear
the full cost and expense of such audit. Regardless of the amount of
discrepancy discovered, all discrepancies (and interest thereon) shall be
due and payable within thirty (30) days after the Party receives notice
thereof.
6.14 Product Supplied for Clinical Trials, Promotional and
Humanitarian Uses. The Executive Steering Committee shall determine the
quantity of each Product to be used for clinical trials and
investigational IND's (as that term is defined by the FDA). Product
supplied for such purposes shall be without charge hereunder except as
provided in this Section 6.14. Such Product shall be supplied at its [ ]*
7. PRODUCT DEVELOPMENT
7.1 Development Obligations
7.1.1 CycloStat System. Xxxxxx Pharmaceutical Products
Division shall introduce and facilitate discussions between SangStat and
Xxxxxx Diagnostic Division with respect to co-development, marketing and
promotion of the CycloStat System.
7.1.2 Products. As directed by the Executive Steering
Committee, the Parties shall conduct Phase IV marketing support trials for
the Products (after obtaining Regulatory Approval of such Products) to
enhance the marketing and development of the Products in the Territory.
7.2 Development Costs. The Parties shall share the
Development Costs for the Products as set forth below. Except as set
forth in this Section 7.2, no payments for Development Costs shall be
incurred with respect to a Product until [ ]*
7.2.1 Sang-2000. Beginning in calendar year 2000,
SangStat shall be responsible for [ ]*
and Xxxxxx shall be responsible for [ ]* of
post-Regulatory Approval Development Costs for Sang-2000 [ ]*
7.2.2 Gengraf. Beginning in calendar year 2000 SangStat
shall be responsible for [ ]* and
Xxxxxx shall be responsible for [ ]* of
Development Costs for Gengraf [ ]*
Notwithstanding the foregoing, SangStat shall be responsible for [ ]*
of Development Costs for Gengraf up to a maximum amount of [ ]*
If Gengraf does not have Regulatory Approval by [ ]*
SangStat shall have no further obligation to pay for any Development
Costs for Gengraf until Gengraf obtains Regulatory Approval and then on a
pro-rata basis for the remainder of calendar year 2000 using the
percentages set forth in this Section 7.2.2.
7.2.3 SangCya and CycloTech. In calendar year 1999,
SangStat shall be responsible for [ ]*
and Xxxxxx shall be responsible for [ ]* of
Development Costs for SangCya and CycloTech. Beginning in calendar year
2000, SangStat shall be responsible for [ ]* and
Xxxxxx shall be responsible for [ ]* of Development Costs for
SangCya and CycloTech. Beginning in calendar year 2001 and thereafter,
SangStat shall be responsible for [ ]*
and Xxxxxx shall be responsible for [ ]*
of Development Costs for SangCya and CycloTech.
7.2.4 1999 and 2000 Budgets. The calendar year 1999 and
calendar year 2000 budget for Development Costs are set forth below:
Oral Solution Capsule
Product/CycloTech Product
1999 [ ]* [ ]*
2000 [ ]* [ ]*
The 1999 budget for SangCya and CycloTech shall be pro-rated for the
calendar year based on the Effective Date. For example, if the Effective
Date is June 1, 1999, then the calendar year 1999 budget for Development
Costs for SangCya and CycloTech would be [ ]*
The Executive Steering Committee may revise such budgets based on the
written agreement of the Parties. Any such revision shall be documented
and signed by the Parties. Except for the calendar year 1999 and calendar
year 2000 budgets, which are set forth above, the Executive Steering
Committee shall meet and agree upon the budget for the Development Costs
for SangCya, CycloTech and the Capsule Product for the upcoming calendar
year within ninety (90) days prior to the end of each calendar year.
7.3 Obligations. Each party may, upon mutual agreement of
the Parties, support the other by performing on the other's behalf certain
of the other's obligations under Section 7.1.2, as applicable. The
Parties also shall keep each other informed of expected dates of
Regulatory Approvals for the Products as soon as they become aware of such
information, in order to allow planning and co-ordination of pre-launch
activities and Product manufacturing planning.
7.4 Regulatory Approvals. Except as expressly agreed upon
by the Executive Steering Committee, or otherwise expressly set forth in
this Agreement, each Party shall be fully responsible for obtaining all
necessary and applicable legal and regulatory approvals, including the
Regulatory Approvals, and for compliance with all Legal Requirements
necessary to manufacture and commercially market, (i) with respect to
Xxxxxx, Gengraf, and (ii) with respect to SangStat, SangCya, CycloTech and
Sang-2000.
8. TRADEMARKS
[ ]*
9. SUPPLY OF FINISHED CAPSULE PRODUCT
9.1 Exclusivity. [ ]*
then in accordance with the terms of this Agreement, Xxxxxx shall fill
SangStat's orders for Gengraf for the Territory. Xxxxxx shall be the
exclusive supplier of Gengraf in the Territory, including all bulk
cyclosporine to be manufactured for use in such Gengraf. [ ]*
then SangStat shall fill Xxxxxx'x orders for Sang-2000 for the Territory.
SangStat shall be Xxxxxx'x exclusive supplier of Sang-2000 in the Territory.
Neither Xxxxxx nor its Affiliates shall manufacture or have manufactured
any Product (whether or not it receives Regulatory Approval) for
distribution or sale by any other party (including Xxxxxx and its
Affiliates) within the Territory except pursuant to this Agreement. Neither
SangStat nor its Affiliates shall manufacture or have manufactured any
Product (whether or not it receives Regulatory Approval) for distribution or
sale by any other party (including SangStat and its Affiliates) within the
Territory except pursuant to this Agreement, provided however the Parties
recognize that SangStat shall distribute SangCya and CycloTech pursuant to
the terms of this Agreement. This Section 9.1 shall not apply with respect
to CycloTech for use with products other than (i) Products or (ii) Other
Cyclosporine Products.
9.2 Forecasting/Ordering
9.2.1 Gengraf. SangStat shall develop jointly with
Xxxxxx (i) at least three (3) full calendar quarters prior to the calendar
quarter in which the first commercial sale of Gengraf is projected to
occur, a non-binding, good faith forecast of SangStat's quantity
requirements for Gengraf for the calendar quarter in which the first
commercial sale of Gengraf is projected to occur and (ii) a non-binding,
good faith forecast of its quantity requirements for Gengraf for the
subsequent three (3) calendar quarters. At least one (1) full calendar
quarter prior to the calendar quarter in which the first commercial sale
of Gengraf is projected to occur, SangStat's shall deliver to Xxxxxx (i)
its firm order and requested delivery dates for Gengraf for such calendar
quarter and (ii) a non-binding, good faith forecast of its quantity
requirements for Gengraf for the subsequent three (3) calendar quarters.
SangStat shall deliver to Xxxxxx within ten (10) days after the beginning
of each calendar quarter, SangStat's firm order and requested delivery
dates for Gengraf for the next calendar quarter and its binding, good
faith forecast of its quantity requirements for Gengraf for the subsequent
three (3) calendar quarters.
9.2.2 Sang-2000. [ ]* Xxxxxx shall
develop jointly with SangStat (i) at least three (3) full calendar quarters
prior to the calendar quarter in which the first commercial sale of
Sang-2000 is projected to occur, a non-binding, good faith forecast of
Xxxxxx'x quantity requirements for Sang-2000 for the calendar quarter in
which the first commercial sale of Sang-2000 is projected to occur and (ii)
a non-binding, good faith forecast of its quantity requirements for
Sang-2000 for the subsequent three (3) calendar quarters. At least one (1)
full calendar quarter prior to the calendar quarter in which the first
commercial sale of Sang-2000 is projected to occur, Xxxxxx shall deliver to
SangStat (i) its firm order and requested delivery dates for Sang-2000 for
such calendar quarter and (ii) a non- binding, good faith forecast of its
quantity requirements for Sang-2000 for the subsequent three (3) calendar
quarters. Xxxxxx shall deliver to SangStat within ten (10) days after the
beginning of each calendar quarter, Xxxxxx'x firm order and requested
delivery dates for Sang-2000 for the next calendar quarter and its binding,
good faith forecast of its quantity requirements for Sang-2000 for the
subsequent three (3) calendar quarters.
9.2.3 Limitation. No Supplier shall be required to
accept a purchase order for any calendar quarter to the extent that it is
in excess of one hundred and twenty-five percent (125%) of the most recent
forecast for such calendar quarter. The Parties shall work together to
manage any significant increase in wholesaler orders as a result of Year
2000 loading of Products.
9.3 Manufacturing Capacity
9.3.1 Gengraf. In order to fulfill SangStat's orders
for Gengraf under this Agreement, Xxxxxx shall use Commercially Reasonable
Efforts to secure sufficient manufacturing capacity to launch and market
Gengraf in the Territory with approximately [ ]* tons of bulk
cyclosporine capacity available on an annual basis for Gengraf for
distribution and sale in the Territory by [ ]*
9.3.2 Sang-2000. [ ]* then SangStat
shall use Commercially Reasonable Efforts to secure sufficient manufacturing
capacity to launch and market Sang-2000 in the Territory with approximately
[ ]* tons of bulk cyclosporine capacity
available on an annual basis for Sang-2000 for distribution and sale in the
Territory by [ ]*.
9.3.3 Additional Suppliers. The Parties shall work to
determine additional sources of supply of cyclosporine to address any
unexpected increase in the forecast or market for the Capsule Product [ ]*
In particular, SangStat shall endeavor to arrange for the Parties to meet
with SangStat's primary supplier of bulk cyclosporine for the purposes of
ensuring that the Parties have access to additional quantities of bulk
cyclosporine.
10. INVENTORY OF PRODUCTS
Supplier shall be responsible for maintaining adequate inventories
of the Capsule Product based on the good faith forecast agreed to by the
Parties in accordance with Section 9.2; Distributor shall be responsible
for maintaining adequate inventories of Products for distribution to
customers as provided hereunder. For purposes of this Section, "adequate
inventories" shall mean inventories of such Product that are consistent
with current practices for such Party's other currently marketed products.
11. SUPPLY OF BULK PRODUCT BY XXXXXX
Pursuant to the terms of the Amended and Restated Supply Agreement
attached hereto as Exhibit F, Xxxxxx shall supply bulk cyclosporine to
SangStat for use in the manufacture of Cyclosporine Formulations (as
defined in the Amended and Restated Supply Agreement).
12. OWNERSHIP AND CONFIDENTIALITY
12.1 Ownership. As between the Parties, each party will be
the sole owner of the intellectual property rights in any invention of
which only its employees and its third party contractors are inventors and
each party will jointly own the intellectual property rights in all
inventions of which its and the both Parties employees or contractors are
joint inventors. Any assignments necessary to accomplish the foregoing
are hereby made and each party will execute such further documents as may
be reasonably requested by the other with respect thereto. Jointly owned
inventions may be exploited and non-exclusively licensed to third parties
by either party without accounting to or further approval of the other
party either during the term of this Agreement or thereafter. Neither
party will be obligated under this Agreement to obtain intellectual
property licenses from third parties.
12.2 Covenant Not to Xxx. Neither Party nor its Affiliates
shall during the term of this Agreement and thereafter assert any claim
against the other Party or any of its Affiliates that the sale of such
other Party's (or its Affiliate's) Product(s) or Other Cyclosporine
Product(s) in the Territory infringes such Party's intellectual property.
12.3 Proprietary Information. Each Party agrees that all
inventions, processes, materials, chemicals, know-how and ideas and all
other business, technical and financial information they obtain from the
other are the confidential property of the disclosing party ("Proprietary
Information" of the disclosing party). Except as expressly allowed in
this Agreement, the receiving Party will hold in confidence and not use or
disclose any Proprietary Information of the disclosing Party and shall
similarly bind its employees in writing. The receiving Party shall not be
obligated under this Section 12.3 (i) beyond five years after termination
of this Agreement, or (ii) with respect to information the receiving Party
can document:
(a) is or has become readily publicly available
through no fault of the receiving Party or its employees or agents; or
(b) is received from a third party lawfully in
possession of such information and lawfully empowered to disclose such
information and provided the receiving party abides by all restrictions
imposed by such third party; or
(c) was rightfully in the possession of the
receiving party prior to its disclosure by the disclosing party without
restriction; or
(d) was independently developed by employees or
consultants of the receiving party who did not have access to such
Proprietary Information; or
(e) was required to be disclosed by law, provided
that the receiving party gave the disclosing party notice of any required
disclosure, and the opportunity to limit such disclosure as permitted
under applicable law and regulation.
13. LIMITED LIABILITY
NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE,
NEITHER PARTY WILL BE LIABLE TO THE OTHER WITH RESPECT TO ANY SUBJECT
MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY
OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES, UNLESS SUCH DAMAGES ARE AWARDED UNDER A CLAIM FOR WHICH SUCH
PARTY HAS AGREED TO INDEMNIFY THE OTHER.
14. TERM AND TERMINATION
14.1 Term. Unless terminated earlier as provided herein,
this Agreement will have an initial term commencing on the Effective Date
and ending December 31, 2004.
14.2 For Cause. This Agreement may be terminated in its
entirety by a Party for cause immediately upon the occurrence of any of
the following events:
14.2.1 Ceases to do Business. If the other Party
ceases to do business, or otherwise terminates its business operations;
14.2.2 Material Breach. If the other Party commits
a material breach of a material provision of this Agreement, subject to
following the following procedures: it is the Parties' express intent
that consideration shall first and foremost be given to remedying any
breach of this Agreement through the payment of monetary damages or such
other legal or equitable remedies as shall be appropriate under the
circumstances and that there shall only be a limited right to terminate
this Agreement under the following circumstances as a matter of last
resort. In the event that the Neutral, in accordance with the procedures
set forth in Exhibit E, has rendered a ruling that a Party has materially
breached a material provision of this Agreement, which ruling specified
the remedies imposed on such breaching Party for such breach and such
remedies did not include termination (the "Adverse Ruling"), and the
breaching Party has failed to comply with the terms of the Adverse Ruling
within the time period specified therein for compliance, where Xxxxxx has
been found to have breached a material obligation under this Agreement and
has failed to comply with the Adverse Ruling, SangStat may terminate this
Agreement by delivering written notice to Xxxxxx after the expiration of
the period to comply; where SangStat has been found to have breached a
material obligation under this Agreement and has failed to comply with the
Adverse Ruling, Xxxxxx may, upon written notice to SangStat after the
expiration of the period to comply, Xxxxxx may terminate this Agreement by
delivering written notice to SangStat after the expiration of the period
to comply.
14.2.3 Bankruptcy. If the other Party shall seek
protection under any bankruptcy, receivership, trust deed, creditors
arrangement, composition or comparable proceeding, or if any such
proceeding is instituted against the other Party.
14.3 Regulatory Issues. Either party may terminate this
Agreement without cause upon sixty (60) days' prior written notice if no
Capsule Product has obtained U.S. Regulatory Approval by [ ]*.
14.4 Certain Acquisitions. Either party may terminate this
Agreement without cause upon thirty (30) days prior written notice should
the other party either be acquired (whether by acquisition of stock,
assets or otherwise) or announce that it will be acquired by
[ ]* If SangStat is acquired by the
Acquiror within twenty-four (24) months after the Launch Date of the first
Capsule Product, then upon SangStat becoming an Affiliate of such
Acquiror, SangStat shall pay to Xxxxxx an amount equal to [ ]*
previously paid to SangStat by Xxxxxx under this Agreement.
14.5 Effect of Termination. The following provisions shall
survive the termination or expiration of this Agreement: Sections 1
(Definitions), the last sentence of 3.1.3 and 3.2.3 (with respect to any
final report of Physician Details only), the seventh sentence of 3.3.2,
12, 13,14.5, 14.6, 14.7, 14.8, 14.10, 14.11, 14.12, 16, 17.2, 17.3, 17.4,
17.8, 18.4, 18.5, 18.12 and 18.13. Each party will promptly return all
Proprietary Information of the other (and all copies and abstracts
thereof) that it is not entitled to use under the surviving terms of this
Agreement. Any termination of this Agreement does not affect the status
of Amended and Restated Supply Agreement attached as Exhibit F and the
Stock Purchase Agreement and related documents attached as Exhibit G.
14.6 Pending Orders and Inventory. The Party exercising its
right to terminate this Agreement or the ANDA holder of the Product in the
case of expiration of this Agreement may, at its option, either (i) cancel
any pending firm orders, or (ii) elect to supply and/or purchase Product,
as the case may be, under a firm order. In addition, such Party (the ANDA
holder, in the case of expiration, and the terminating Party in all other
cases), may repurchase all inventory of Product (if any) from the other
Party or allow the other Party to sell off such remaining inventory at
commercially reasonable prices. The Parties shall grant each other any
necessary rights to sell off the inventory of Product.
14.7 Effect of Termination for Breach. If the Agreement is
terminated by Xxxxxx for breach pursuant to Section 14.2, SangStat shall
pay as minimum damages [ ]* concurrent with the termination
of the Agreement by Xxxxxx following the procedures set forth in Section
14.2. In addition, Xxxxxx may pursue the collection of any additional
damages, including all milestones paid whether or not identified as non-
refundable, pursuant to the dispute resolution procedures of Exhibit E.
14.8 Effect of Termination for Failure to Obtain Regulatory
Approval. In the event of termination of this Agreement without cause
pursuant to Section 14.3, SangStat shall pay to Xxxxxx [ ]*
within sixty (60) days following termination of the Agreement.
14.9 Right to Promote Capsule Product. Unless this Agreement
terminates earlier in accordance with its terms, the Parties may,
commencing no earlier than [ ]* each elect to promote
(but not sell or distribute) [ ]*
during the remainder of the term of this Agreement; provided, however,
that each Party must continue to meet its obligations under this Agreement
including but not limited to the Xxxxxx Detailing Commitment and the
SangStat Detailing Commitment, as the case may be.
14.10 Repayment of Loan. If this Agreement terminates prior
to December 31, 2004 for any reason other than due to breach of the
Agreement by Xxxxxx, and there remains principal and accrued interest due
under the Loan, the Loan (including all outstanding principal and accrued
interest) shall be due and payable sixty (60) days following termination
of the Agreement. If the Agreement terminates due to breach of the
Agreement by Xxxxxx, then interest and principal under the Loan shall
remain payable in accordance Section 6.2.
14.11 Additional Remedies. Termination is not the sole remedy
under this Agreement and, whether or not termination is effected, all
other remedies will remain available, subject to being awarded pursuant to
the dispute resolution procedures of Exhibit E.
14.12 Accrued Rights and Obligations. Termination of this
Agreement shall not relieve the Parties hereto of any liability that
accrued hereunder prior to the effective date of such termination and
shall not prejudice either Party's right to obtain performance of any
obligation provided for in this Agreement which expressly survives
termination.
15. WARRANTY AND WARRANTY DISCLAIMERS
15.1 Xxxxxx. Xxxxxx warrants that:
15.1.1 Supplied Product. Gengraf will conform in
all respects to the specifications therefor included in the Regulatory
Approval, as then in effect (which, upon such approval shall be attached
hereto as an exhibit), and shall be manufactured in accordance with
current Good Manufacturing Practices. Such warranty does not apply to
Products that have been mishandled, mistreated or maintained or stored
other than in conformity with Xxxxxx'x instructions.
15.1.2 No Infringement. To the best of its
knowledge, the manufacture, distribution or use of Gengraf in the
Territory will not infringe or otherwise violate any intellectual or
proprietary rights of any person.
15.1.3 Regulatory. [ ]*
15.1.4 Title. To the best of its knowledge, after
due investigation, Xxxxxx has sufficient title and ownership of all
patents, trademarks, service marks, trade names, copyrights and other
proprietary rights necessary for the business covered by this Agreement as
now conducted without conflict with or violation of the rights of others.
15.1.5 No Violation. Xxxxxx has not received any
communication alleging that Xxxxxx has violated or, by conducting its
business in the Territory as proposed, would violate any cyclosporine-
related patents, trademarks, service marks, trade names, copyrights or
trade secrets or other proprietary rights of any third party.
15.2 SangStat. SangStat warrants that:
15.2.1 Supplied Product. SangCya, CycloTech, and
Sang-2000 will conform in all respects to the specifications therefor
included in the Regulatory Approval, as then in effect (which, upon such
approval shall be attached hereto as an exhibit), and shall be
manufactured in accordance with current Good Manufacturing Practices.
Such warranty does not apply to Products that have been mishandled,
mistreated or maintained or stored other than in conformity with
SangStat's instructions.
15.2.2 No Infringement. To the best of its
knowledge, the manufacture, distribution or use of SangCya in the
Territory does not, and Sang-2000 will not infringe or otherwise violate
any intellectual or proprietary rights of any person. Abbott acknowledges
that it is aware that Novartis has filed a lawsuit against SangStat with
respect to SangCya.
15.2.3 Regulatory. [ ]*
15.2.4 Title. To the best of its knowledge, after
due investigation, SangStat has sufficient title and ownership of all
patents, trademarks, service marks, trade names, copyrights and other
proprietary rights necessary for the business covered by this Agreement as
now conducted without conflict with or violation of the rights of others.
15.2.5 No Violation. Except for litigation
involving Novartis identified in Section 15.2.2, SangStat has not received
any communication alleging that SangStat has violated or, by conducting
its business in the Territory as proposed, would violate any cyclosporine-
related patents, trademarks, service marks, trade names, copyrights or
trade secrets or other proprietary rights of any third party.
15.3 Promotional. [ ]*
SangStat shall not make any claims, representations or warranties directly
or indirectly to any third party about Gengraf except as specified in the
Gengraf labeling. [ ]* Abbott shall
not make any claims, representations or warranties directly or indirectly
to any third party about Sang-2000, SangCya, and CycloTech except as
specified in the applicable labeling therefor.
16. INDEMNIFICATION
16.1 Abbott Indemnity
16.1.1 Infringement. Abbott shall hold SangStat
and its officers, directors, agents and employees harmless from all
liability, costs and damages (including attorneys' fees) arising from or
relating to a claim of infringement by Products, for which Abbott is the
ANDA holder, of any patent, copyright, trademark or misappropriation of
any third party trade secrets, provided Abbott is promptly notified of any
and all threats, claims and proceedings related thereto and given
reasonable assistance and the opportunity to assume sole control over the
defense and all negotiations for a settlement or compromise. Abbott shall
not be responsible for any settlement it does not approve in writing.
16.1.2 Product Liability. Abbott shall hold
SangStat and its officers, directors, agents and employees harmless from
all liability, costs and damages (including attorneys' fees) arising from
or relating to any claim of personal injury or death arising from or
relating to Products for which Abbott is the ANDA holder, provided Abbott
is promptly notified of any and all threats, claims and proceedings
related thereto and given reasonable assistance and the opportunity to
assume sole control over the defense and all negotiations for a settlement
or compromise. Abbott shall not be responsible for any settlement it does
not approve in writing.
16.1.3 General. Abbott shall hold SangStat and its
officers, directors, agents and employees harmless from all liability,
costs and damages (including attorneys' fees) arising from or relating to
(i) Xxxxxx'x breach of any representation, warranty, covenant, or other
obligation provided for in this Agreement; and (ii) the negligence,
recklessness or willful misconduct of Abbott, its Affiliates, their
directors, officers or employees, or Abbott Sales Representatives and/or
managed care executives, including, but not limited to, product liability
claims arising out of out-of-label promotions by Abbott, its Affiliates,
their directors, officers or employees, or Abbott Sales Representatives
and/or managed care executives, and (iii) SangStat's distribution of any
promotional materials approved by Abbott, provided such distribution is in
accordance with the terms of this Agreement, provided Abbott is promptly
notified of any and all threats, claims and proceedings related thereto
and given reasonable assistance and the opportunity to assume sole control
over the defense and all negotiations for a settlement or compromise.
Abbott shall not be responsible for any settlement it does not approve in
writing.
16.2 SangStat Indemnity
16.2.1 Infringement. SangStat shall hold Abbott
and its officers, directors, agents and employees harmless from liability,
costs and damages (including attorneys' fees) arising from or relating to
a claim of infringement by the Products, for which SangStat is the ANDA
holder, of any patent, copyright, trademark or misappropriation of any
third party trade secrets, provided SangStat is promptly notified of any
and all threats, claims and proceedings related thereto and given
reasonable assistance and the opportunity to assume sole control over the
defense and all negotiations for a settlement or compromise. SangStat
shall not be responsible for any settlement it does not approve in
writing.
16.2.2 Product Liability. SangStat shall hold
Abbott and its officers, directors, agents and employees harmless from all
liability, costs and damages (including attorneys' fees) arising from or
relating to any claim of personal injury or death arising from or relating
to the Products for which SangStat is the ANDA holder, provided SangStat
is promptly notified of any and all threats, claims and proceedings
related thereto and given reasonable assistance and the opportunity to
assume sole control over the defense and all negotiations for a settlement
or compromise. SangStat shall not be responsible for any settlement it
does not approve in writing.
16.2.3 General. SangStat shall hold Abbott and its
officers, directors, agents and employees harmless from all liability,
costs and damages (including attorneys' fees) arising from or relating to
(i) SangStat's breach of any representation, warranty, covenant or other
obligation provided for in this Agreement, (ii) the negligence,
recklessness or willful misconduct of SangStat, its Affiliates, their
directors, officer or employees, or SangStat Sales Representatives and/or
managed care representatives, including, but not limited to claims arising
out of out-of-label promotions by SangStat, its Affiliates, their
directors, officers or employees, or SangStat Sales Representatives and/or
managed care representatives, and (iii) Xxxxxx'x distribution of any
promotional materials approved by SangStat, provided such distribution is
in accordance with the terms of this Agreement, provided SangStat is
promptly notified of any and all threats, claims and proceedings related
thereto and given reasonable assistance and the opportunity to assume sole
control over the defense and all negotiations for a settlement or
compromise. SangStat shall not be responsible for any settlement it does
not approve in writing.
17. ADVERSE EVENTS, RECALLS AND OTHER REGULATORY MATTERS
17.1 Adverse Reaction Reporting. Each Party shall inform the
other of information in or coming into its possession or control
concerning side effects, injury, toxicity or sensitivity reaction and
incidents of severity thereof associated with commercial and clinical
uses, studies, investigations or tests of each Product (in humans), in the
Territory, whether or not determined to be attributable to the Product.
During the Term, each Party shall notify the applicable drug surveillance
department of the holder of the ANDA (the Medical Services Department, in
the case of Abbott) for the Product within twenty-four (24) hours, by
facsimile only, and after a responsible employee of such Party first
becomes aware of any adverse drug experience involving Product. In
addition, the holder of the ANDA for each Product shall keep the other
Party advised with respect to information concerning the safety or
efficacy of the Products. On the written request of the Party which is
not the holder of the ANDA with respect to any Product, the holder of the
ANDA shall supply derailed information regarding such safety, efficacy and
medical information issues, including, if requested, copies of safety
reports filed with the FDA.
17.2 Product Information Requests. Information concerning
any complaints, medical inquiries and/or drug information requests from
consumers, physicians or other Third Parties received by a Party regarding
a Product shall be forwarded to the Drug Information Department of the
Party which is the holder of the ANDA for such Product within twenty-four
(24) hours of such Party's receipt of the request. The Drug Information
Department of the holder of the ANDA for such Product shall respond to
such complaints, inquiries and requests, if necessary, in accordance with
such Department's usual and customary procedures. The holder of the ANDA
for a Product shall supply the other Party, for such Party's information
only, with copies of its standard response information for the Products as
well as any updates thereto. Any patient inquires or requests received by
a Party shall be forwarded to the holder of the ANDA with respect to the
Product related to such request.
17.3 Governmental Reports. The holder of the ANDA for each
Product shall be responsible for filing with the FDA adverse reaction
reports that it receives directly from third parties and any adverse
reaction reports it receives from the other Party.
17.4 Product Recall. The Distributor of any Product shall
have an established system to ascertain all recipients of Product by lot
number and quantity. In the event that either Party determines that an
event, incident or circumstance has occurred which may result in the need
for a recall or other removal of any Product, or any lot or lost thereof,
from the market, such Party shall advise the other and the Parties shall
consult with respect thereto. The Party that is the holder of the ANDA
for such Product shall have the sole authority to decide whether a recall
or other removal of such Product shall be made. Except as provided below,
if the holder of such ANDA recalls or otherwise removes such Product or
any lot or lots thereof from the market, such Party shall bear all costs
and expenses of such recall or removal, including, without limitation,
expenses and other costs or obligations to third parties. The cost and
expense of notifying customers and the costs and expenses associated with
the shipment of the recalled Product and the cost and expense of
destroying the Product removed from the market, if necessary. Any such
recall or removal costs, expenses or obligations shall be borne by the
other Party (i.e., the Party which is not the holder of the ANDA for such
Product) only to the extent that the recall or removal results from such
Party's: (i) improper distribution, storage or shipment or the Product,
(ii) improper sampling practices or mishandling of Sample Units; (iii) Co-
Promotion of the Product in a manner inconsistent with the Product's
labeling; or (iv) violation of this Agreement. In the event of a recall,
each Party shall promptly meet and discuss in good faith whether the
Parties' Detailing obligations should be adjusted.
17.5 Procedures. Within thirty (30) days after the Execution
Date, representatives from the drug safety and medical information
departments of each Party shall meet to establish procedures to accomplish
the obligations set forth in this Article 19.
17.6 Governmental Contact Reporting. Each Party shall
promptly notify the other Party, as well as such other Party's general
counsel, as from time to time made know to such Party, upon being
contracted by the FDA or any other federal, state or local governmental
agency for any regulatory purpose pertaining to this Agreement or to the
Products. If practical the Party receiving such contact shall notify the
other Party within twenty-four (24) hours. The Party receiving notice
from such agency shall provide the other Party with prompt written notice
of any inquiries from, or positions taken by, the FDA or any other
federal, state or local governmental agencies which may affect the co-
promotion or distribution of any Product.
17.7 Product Registration. During the Term, the holder of
the ANDA shall, at its own expense, obtain and thereafter maintain all
regulatory approvals necessary for the marketing of each of the Products
in the Territory. The holder of the ANDA shall maintain product and
establishment regulations under 21 C.F.R. Part 207, Subparts C and D, for
the Products.
17.8 Records Retention. Each Party shall keep for five (5)
years (or longer, if required by any regulatory authorities) after
termination of this Agreement records of all Product sales and customers
sufficient to adequately administer a recall of any Product and to fully
cooperate in any decision by the Parties to recall, retrieve and/or
replace any Product.
18. GENERAL
18.1 Entire Agreement. This Agreement, together with the
Exhibits attached hereto and incorporated herein by this reference,
represents the entire understanding as of the Effective Date between the
Parties with respect to the matter hereof, and supersedes all prior
agreements, negotiations, understandings, representations, and statements,
whether written or oral, between the Parties relating thereto. All goods
provided hereunder shall be subject to and governed by the terms and
provisions set forth herein, and none of the terms and conditions
contained on any proposal, purchase order, invoice, or other writing,
shall have any effect or change the provisions of this Agreement.
18.2 Modifications in Writing. No modification, alteration,
waiver, or change in any of the terms of this Agreement shall be valid or
binding upon the Parties hereto unless made in writing and duly executed
by each of the Parties hereto.
18.3 No Waiver. Any waiver on the part of either party of
any breach or any right or interest hereunder shall not imply the waiver
of any subsequent breach or waiver of any other right or interest.
18.4 Governing Law/Attorneys' Fees. This Agreement shall be
governed by and construed under the laws of the State of New York and the
United States without regard to conflicts of law provisions thereof. The
Parties hereby expressly exclude the United Nations Convention on
Contracts for the International Sale of Goods.
18.5 Headings. Headings and captions are for convenience
only and are not to be used in the interpretation of this Agreement.
18.6 Notices. Notices under this Agreement shall be
sufficient only if personally delivered, delivered by a major commercial
overnight courier service or mailed by certified or registered mail,
return receipt requested to a Party at the addresses set forth above or as
amended by notice pursuant to this subsection, to the attention of the
President, CAPD and President, Pharmaceutical Products Division in the
case of Abbott and to the attention of the Chief Executive Officer and
General Counsel in the case of SangStat. If not received sooner, notice
by mail shall be deemed received 5 days after deposit in the U.S. mails
and notice by overnight courier shall be deemed received on the next
business day.
18.7 Severability. If any provision of this Agreement is
held to be illegal or unenforceable, that provision shall be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect and enforceable.
18.8 Independent Contractor. The Parties hereto expressly
understand and agree that the other is an independent contractor in the
performance of each and every part of this Agreement, is solely
responsible for all of its employees and agents and its labor costs and
expenses arising in connection therewith.
18.9 Assignability. This Agreement and the rights and
obligations hereunder are not transferable or assignable without the prior
written consent of the Parties hereto, except for rights to payment and
except for all of its rights and obligations, which may be transferred or
assigned without consent to a person or entity who acquires all or
substantially all of the assets or business of a party, whether by sale,
merger or otherwise, except in the case of an acquisition by an Acquiror.
Notwithstanding the foregoing, either party hereunder may delegate its
rights and obligations to an Affiliate for the period of time during which
such party remains an Affiliate; provided such Party shall remain
responsible for its Affiliates' performance hereunder.
18.10 Public Statements. Except to the extent necessary under
applicable laws or for ordinary marketing purposes, the Parties agree that
no press releases or other publicity relating to the substance of the
matters contained herein will be made without joint approval. A press
release announcing this Agreement will be jointly developed and shall be
released by the Parties upon full execution of this Agreement. Each of
the Parties may not use and disclose any information contained in such
press release (or subsequent, agreed upon press releases) without the
prior consent of the other Party. Prior to the submission of this
document to the Securities and Exchange Commission, SangStat shall allow
Abbott an opportunity to review and recommend redactions to the Agreement.
SangStat shall endeavor, in its reasonable discretion, to include Xxxxxx'x
recommendations in its submission. SangStat must receive comments from
Abbott by no later than May 11, 1999.
18.11 Force Majeure. No liability or loss of rights hereunder
shall result to either party from delay or failure in performance (other
than payment) caused by force majeure, that is, circumstances beyond the
reasonable control of the party affected thereby, including, without
limitation, acts of God, fire, flood, war, government action, compliance
with laws or regulations (including, without limitation, those related to
infringement), strikes, lockouts or other serious labor disputes.
18.12 Remedies. Except as otherwise expressly stated in this
Agreement, the rights and remedies of a party set forth herein with
respect to failure of the other to comply with the terms of this Agreement
(including, without limitation, rights of full termination of this
Agreement) are not exclusive, the exercise thereof shall not constitute an
election of remedies and the aggrieved party shall in all events be
entitled to seek whatever additional remedies may be available in law or
in equity.
18.13 Alternative Dispute Resolution. The Parties agree to
effectuate all reasonable efforts to resolve in an amicable manner any and
all disputes between them in connection with this Agreement. The Parties
agree that any dispute that arises in connection with this Agreement,
which cannot be amicably resolved informally shall be finally settled as
set forth in the Alternative Dispute Resolution provisions of Exhibit E.
18.14 Compliance with Laws. Each Party shall comply with all
Legal Requirements in the Territory.
18.15 Counterparts. This Agreement may be executed in any
number of counterparts and may be executed by facsimile. All counterparts
shall collectively constitute one and the same Agreement.
XXXXXX LABORATORIES INC. SANGSTAT MEDICAL CORPORATION
Xxxxxx Xxxxxxx Xxxx-Xxxxxxx Xxxxxxxx
Senior Vice President President and Chief Executive Officer
EXHIBIT A
DESCRIPTION OF PRODUCTS
[ ] *
EXHIBIT B
MARKETING/SALES ACTIVITIES TO BE CONSIDERED
FOR INCLUSION IN THE CO-PROMOTION PLAN
- Conduct marketing research to further define Product positioning.
- Develop and implement a marketing strategy for the Products.
- Promote the Products using all appropriate means, including, but not
limited to, journal advertising, sample placement, consumer advertising
such as direct mail or TV promotion, detailing literature, and store
promotion such as displays and promotional allowances, as determined by
the Co-Promotion Committee.
- Provide Physician Details and Sales Calls to the following audiences
- Applicable Specialists (i.e., Members of the Transplant Team
including Transplant Surgeons, Transplant Physicians, Transplant
Coordinators, Transplant Nurses, and Transplant/Hospital
Pharmacists and Members of Transplant Provider Groups that follow
Transplant Patients outside of Transplant Centers including
Transplant Nephrologists, Cardiologists, Hepatologists, Nurses,
Coordinators, and Pharmacists.)
- Managed Care Organizations
- Consider Physician Details and Sales Calls to the following audiences
- Applicable Primary Care Physicians (GP, FP, IM, DO and
pediatricians)
- Initiate and maintain professional and consumer public relations
programs in order to make healthcare professionals, transplanted
patients, and the general public aware of the Products and their
benefits.
- Develop programs that provide ongoing support and motivation to utilize
the Products in an optimal manner.
- Implement strategies for Product reimbursement in managed care
organizations, government healthcare programs, and other payer and
provider organizations.
- Train sales organization on the Product technology, appropriate
clinical utilization and competition.
- Implement a convention promotion program to generate Product interest.
- Design, implement and publish the results from clinical trials and
studies that answer common questions from healthcare professionals
about the Products, or demonstrate unique features and benefits of the
technology.
- Design, implement and publish the results of ongoing clinical trials
and studies that demonstrate the benefits of the Products from a
clinical, quality of life and economic perspective.
EXHIBIT C
SALES SUPPORT PLAN
Abbott Detailing Commitment
First Detail Year to be Pro-rated Second, Third, Fourth and Fifth
From SangCya Launch Date* Detail Year for Products
---------------------------------- ---------------------------------
Product Primary Physician Total Physician Primary Physician Total Physician
Details Details Details Details
----------------- -----------------
[ ]* [ ]*
Physician
Details [ ]* [ ]*
SangStat Detail Commitment
First Detail Year to be Pro-rated Second, Third, Fourth and Fifth
From SangCya Launch Date* Detail Year for Products
---------------------------------- ---------------------------------
Product Primary Physician Total Physician Primary Physician Total Physician
Details Details Details Details
----------------- -----------------
[ ]* [ ]*
Physician
Details [ ]* [ ]*
- For example, if the SangCya Launch Date is July 1, 1999, then the number
of Primary Physician Details for the First Detail Year shall be [ ] * .
- The Detailing Commitments set forth above shall apply to SangCya and
CycloTech until such time as a Capsule Product is launched, and shall
thereafter apply, in the aggregate, to all Products.
- The numbers set forth above only reflect Physician Details. Abbott and
SangStat Managed Care Organization account representatives shall also
conduct Sales Calls under the direction of the Co-Promotion Committee.
EXHIBIT D
MANAGED CARE ORGANIZATIONS WITH WHOM SANGSTAT HAS ON-GOING NEGOTIATIONS
[ ]*
EXHIBIT E
ALTERNATIVE DISPUTE RESOLUTION
The parties recognize that a bona fide dispute as to certain matters may
arise from time to time during the term of this Agreement that relates to
either party's rights and/or obligations. To have such a dispute resolved
by this Alternative Dispute Resolution ("ADR") provision, a party first
must send written notice of the dispute to the other party for attempted
resolution by good faith negotiations between their respective presidents
(or their equivalents) of the affected subsidiaries, divisions, or
business units within twenty-eight (28) days after such notice is received
(all references to days*in this ADR provision are to calendar days).
If the matter has not been resolved within twenty-eight (28) days of the
notice of dispute, or if the parties fail to meet within such twenty-eight
(28) days, either party may initiate an ADR proceeding as provided herein.
The parties shall have the right to be represented by counsel in such a
proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to
the other party of the issues to be resolved by ADR. Within
fourteen (14) days after its receipt of such notice, the other party
may, by written notice to the party initiating the ADR, add
additional issues to be resolved within the same ADR.
2. Within twenty-one (21) days following receipt of the original ADR
notice, the parties shall select a mutually acceptable neutral to
preside in the resolution of any disputes in this ADR proceeding.
If the parties are unable to agree on a mutually acceptable neutral
within such period, either party may request the President of the
CPR Institute for Dispute Resolution ("CPR"), 000 Xxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to select a neutral pursuant
to the following procedures:
(a) The CPR shall submit to the parties a list of not less
than five (5) candidates within fourteen (14) days after
receipt of the request, along with a Curriculum Vitae
for each candidate. No candidate shall be an employee,
director, or shareholder of either party or any of their
subsidiaries or affiliates.
(b) Such list shall include a statement of disclosure by
each candidate of any circumstances likely to affect his
or her impartiality.
(c) Each party shall number the candidates in order of
preference (with the number one (1) signifying the
greatest preference) and shall deliver the list to the
CPR within seven (7) days following receipt of the list
of candidates. If a party believes a conflict of
interest exists regarding any of the candidates, that
party shall provide a written explanation of the
conflict to the CPR along with its list showing its
order of preference for the candidates. Any party
failing to return a list of preferences on time shall be
deemed to have no order of preference.
(d) If the parties collectively have identified fewer than
three (3) candidates deemed to have conflicts, the CPR
immediately shall designate as the neutral the candidate
for whom the parties collectively have indicated the
greatest preference. If a tie should result between two
candidates, the CPR may designate either candidate. If
the parties collectively have identified three (3) or
more candidates deemed to have conflicts, the CPR shall
review the explanations regarding conflicts and, in its
sole discretion, may either (i) immediately designate as
the neutral the candidate for whom the parties
collectively have indicated the greatest preference, or
(ii) issue a new list of not less than five (5)
candidates, in which case the procedures set forth in
subparagraphs 2(a) - 2(d) shall be repeated.
3. No earlier than twenty-eight (28) days or later than fifty-six (56)
days after selection, the neutral shall hold a hearing to resolve
each of the issues identified by the parties. The ADR proceeding
shall take place at a location agreed upon by the parties. If the
parties cannot agree, the neutral shall designate a location other
than the principal place of business of either party or any of their
subsidiaries or affiliates.
4. At least seven (7) days prior to the hearing, each party shall
submit the following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to
rely in any oral or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at
the hearing, and a short summary of the anticipated
testimony of each witness;
(c) a proposed ruling on each issue to be resolved, together
with a request for a specific damage award or other
remedy for each issue. The proposed rulings and remedies
shall not contain any recitation of the facts or any
legal arguments and shall not exceed one (1) page per
issue.
(d) a brief in support of such party's proposed rulings and
remedies, provided that the brief shall not exceed
twenty (20) pages. This page limitation shall apply
regardless of the number of issues raised in the ADR
proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d), no
discovery shall be required or permitted by any means, including
depositions, interrogatories, requests for admissions, or production
of documents.
5. The hearing shall be conducted on two (2) consecutive days and shall
be governed by the following rules:
(a) Each party shall be entitled to five (5) hours of
hearing time to present its case. The neutral shall
determine whether each party has had the five (5) hours
to which it is entitled.
(b) Each party shall be entitled, but not required, to make
an opening statement, to present regular and rebuttal
testimony, documents or other evidence, to cross-examine
witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately
after their direct testimony, and cross-examination time
shall be charged against the party conducting the
cross-examination.
(c) The party initiating the ADR shall begin the hearing
and, if it chooses to make an opening statement, shall
address not only issues it raised but also any issues
raised by the responding party. The responding party,
if it chooses to make an opening statement, also shall
address all issues raised in the ADR. Thereafter, the
presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall
proceed in the same sequence.
(d) Except when testifying, witnesses shall be excluded from
the hearing until closing arguments.
(e) Settlement negotiations, including any statements made
therein, shall not be admissible under any
circumstances. Affidavits prepared for purposes of the
ADR hearing also shall not be admissible. As to all
other matters, the neutral shall have sole discretion
regarding the admissibility of any evidence.
6. Within seven (7) days following completion of the hearing, each
party may submit to the other party and the neutral a post-hearing
brief in support of its proposed rulings and remedies, provided that
such brief shall not contain or discuss any new evidence and shall
not exceed ten (10) pages. This page limitation shall apply
regardless of the number of issues raised in the ADR proceeding.
7. The neutral shall rule on each disputed issue within fourteen (14)
days following completion of the hearing. Such ruling shall adopt
in its entirety the proposed ruling and remedy of one of the parties
on each disputed issue but may adopt one party's proposed rulings
and remedies on some issues and the other party's proposed rulings
and remedies on other issues. The neutral shall not issue any
written opinion or otherwise explain the basis of the ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These
fees and expenses, along with the reasonable legal fees and expenses
of the prevailing party (including all expert witness fees and
expenses), the fees and expenses of a court reporter, and any
expenses for a hearing room, shall be paid as follows:
(a) If the neutral rules in favor of one party on all
disputed issues in the ADR, the losing party shall pay
100% of such fees and expenses.
(b) If the neutral rules in favor of one party on some
issues and the other party on other issues, the neutral
shall issue with the rulings a written determination as
to how such fees and expenses shall be allocated between
the parties. The neutral shall allocate fees and
expenses in a way that bears a reasonable relationship
to the outcome of the ADR, with the party prevailing on
more issues, or on issues of greater value or gravity,
recovering a relatively larger share of its legal fees
and expenses.
9. The rulings of the neutral and the allocation of fees and expenses
shall be binding, non-reviewable, and non-appealable, and may be
entered as a final judgment in any court having jurisdiction.
10. Except as provided in paragraph 9 or as required by law, the
existence of the dispute, any settlement negotiations, the ADR
hearing, any submissions (including exhibits, testimony, proposed
rulings, and briefs), and the rulings shall be deemed Confidential
Information. The neutral shall have the authority to impose
sanctions for unauthorized disclosure of Confidential Information.
EXHIBIT F
AMENDED AND RESTATED SUPPLY AGREEMENT
EXHIBIT G
STOCK PURCHASE AGREEMENT AND RELATED DOCUMENTS
* Confidential Treatment requested
