LICENSE AGREEMENT
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Agreement, dated as of March 31, 1997, between PFIZER INC. ("Pfizer
Inc."), a Delaware corporation, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
and XXXXXXX LABORATORIES INC. ("Xxxxxxx"), a New Jersey corporation, Meridian
Center II, 0 Xxxxxxxxxx Xxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
WHEREAS, Pfizer has discovered and developed a compound called
sampatrilat, and is the owner of valuable know-how and patents concerning
sampatrilat;
WHEREAS, Xxxxxxx desires to take a license from Pfizer to make, have
made, use and sell sampatrilat and related compounds and formulations of the
foregoing; and
WHEREAS, Pfizer is willing to grant such license to Xxxxxxx under certain
terms and conditions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
provided herein Pfizer and Xxxxxxx hereby agree as follows:
SECTION 1 - Definitions
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1.1 "Active Ingredient" shall mean an ingredient that is listed in
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standard reference works, such as the Merck Index, as having a
therapeutic use and that, when combined with the Licensed Products
as a single entity, creates a Combination Product that is an
improvement (therapeutically or commercially) over the Licensed
Products as a single entity.
1.2 "Affiliate" shall mean, with respect to any party to this
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Agreement any person, firm, partnership, trust, company or other
entity which directly or indirectly, (i) owns or controls said
party, or (ii) is owned or controlled by such party or by any
person, firm, partnership, trust, company or other entity which
owns or controls, directly or indirectly, said party. For purposes
of this Section 1.2 "owned" or "owns" shall
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mean the legal or beneficial ownership of more than fifty percent
(50%) of the issued and voting capital stock or other share
participation, and "controls" or "controlled" shall mean the power
to vote or direct more than fifty percent (50%) of the voting power
or otherwise to direct the affairs thereof, but only for so long as
said ownership or control shall continue.
1.3 "Compound" shall mean sampatrilat and related compounds claimed
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by the patents referred to in Section 1.7 (a).
1.4 "Combination Products" shall mean products which contain a
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Compound and one or more other Active Ingredients.
1.5 "Dollars" or "$" shall mean U.S. dollars.
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1.6 "IND" shall mean the application filed with the appropriate
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regulatory authority for permission to perform clinical
investigations of a Licensed Product.
1.7 "Licensed Patents" shall mean:
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(a) all patents listed in Exhibit 1.7(a), annexed hereto and made
a part hereof, and any patents which may issue from the
applications listed in Exhibit 1.7(a);
(b) all other patents and applications anywhere in the Territory,
now owned by or on behalf of Pfizer, which related to the
Licensed Products or methods of use or manufacturing
processes for the Licensed Products;
(c) all patents and applications anywhere in the Territory
hereafter acquired during the term of this Agreement by or on
behalf of Pfizer, provided that such patents and applications
(i) claim inventions conceived during the term of this
Agreement as a result of research funded by Pfizer and (ii)
relate to the Licensed Products or methods of use or
manufacturing processes for the
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Licensed Products; and
(d) divisionals, continuations, continuations-in-part, patents of
addition, and extensions (including supplementary protection
certificates) and reissues of the patents and applications
referred to in Clauses (a) through (c) of this Section 1.7
1.8 "Licensed Products" shall mean any Compound and any
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pharmaceutical compositions and dosage forms containing the
Compound either alone or in combination with other Active
Ingredients.
1.9 "NDA" shall mean (i) with respect to the United States, an
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application filed with the U.S. Food and Drug Administration for
approval to make and sell commercially the Licensed Products, and
(ii) with respect to any country other than the United States, an
application or series of applications filed with regulatory or
other authorities for approval to make and sell commercially the
Licensed Products in such country including price approvals.
1.10 "Net Sales" shall mean: (i) with respect to a Licensed
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Product, the gross amount invoiced by Xxxxxxx or a sublicensee to a
third party for a final dosage form of the Licensed Product less
the following deductions:
(a) Trade, quantity and cash discounts actually given or allowed;
(b) Rebates, allowances, Medicaid and Medicare reimbursements,
chargebacks and similar deductions;
(c) Any tax imposed on the sale, delivery or use of a Licensed
Product (other than taxes based on income); and
(d) Allowances or credits for returned goods or rejections of any
Licensed Product which is unsalable; and
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(ii) in the case of Combination Products, (x) in the event
Xxxxxxx, an Affiliate or a sublicensee is currently selling
the Licensed Product as a single entity, "Net Sales" for any
Payment Computation Period for any country shall be computed
as follows: aggregate net sales in such country during such
period of the Licensed Product as a single entity (determined
in accordance with clause (i) hereof) shall be divided by the
aggregate number of grams of Licensed Product contained
therein, and the result thereof shall be multiplied by the
aggregate number of grams of Licensed Product contained in
the Combination Products sold in such country during such
Payment Computation Period; or (y) in the event Xxxxxxx, an
Affiliate or a sublicensee is not currently selling in such
country the Licensed Product as a single entity, "Net Sales"
shall be computed as follows: aggregate net sales of the
Combination Product (determined in accordance with clause (i)
hereof) shall be multiplied by a fraction, the numerator
being Xxxxxxx', its Affiliate's or its sublicensee's cost of
the Licensed Product in such Combination Product and the
denominator being Xxxxxxx', its Affiliate's or sublicensee's
total cost of all Active Ingredients in such Combination
Product. Cost shall be based on Xxxxxxx', its Affiliate's or
its sublicensee's accounting procedures which shall be in
accordance with generally accepted accounting practices.
1.11 "Payment Computation Period" shall mean each three (3) month
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period, or any portion thereof, ending on the last day of March,
June, September and December of a given year.
1.12 "Pfizer" shall mean Pfizer Inc. and its Affiliates.
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1.13 "Major Countries" shall mean the United Kingdom, France,
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Germany, Italy, Spain and Japan.
1.14 "Phase III Clinical Trials" shall have the meaning ascribed in
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Section 312.21(c) of Title 21 of the U.S.
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Code of Federal Regulations as amended from time to time.
1.15 "Xxxxxxx" shall mean Xxxxxxx Laboratories Inc. and its
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Affiliates.
1.16 "TI Delivery Date" means the date on which Pfizer has delivered
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to Xxxxxxx all of the Technical Information specified in the list
attached as Exhibit 3.1(b).
1.17 "Technical Information": shall mean all know-how, trade
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secrets, data, technology and scientific and technical information
owned by Pfizer that relate to or are useful in connection with the
Licensed Products, including but not limited to: (a) medical,
clinical, toxicological or other scientific data, (b) processes and
analytical methodology used in development, testing, analysis,
manufacture and packaging of the Licensed Products and (c) the
contents of any IND's or similar regulatory filings for Licensed
Products.
1.18 "Territory" shall mean all countries of the world.
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1.20 "444 Patent" means U.S. Patent No. 4,975,444, which claims all
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forms of the Compound and expires on August 25, 2009.
1.21 "Amorphous Patents" means collectively the '444 Patent and all
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foreign counterparts of the '444 Patent.
1.22 "Amorphous Licensed Products" means Licensed Products that
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are claimed by the Amorphous Patents but are not claimed by the
Polymorphic Patents.
1.23 "First Option Period Negotiations" means the
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negotiations described in Section 16.1.
1.24 "First Conversion Option" means the option described in Section
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16.2.
1.25 "First Option Commencement Date" means February 25, 2007.
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1.26 "First Option Expiration Date" means the date that is ninety
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(90) days after the First Option Commencement Date.
1.27 "First Option Period" means the period of time beginning on the
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First Option Commencement Date and ending on the First Option
Expiration Date.
1.28 "750 Patent Application" means U.S. Patent Application serial
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number 08/648,001, which claims the polymorphic form of the
Compound, was filed on May 28, 1996 and claims priority from PCT/EP
94/0375 filed on November 9, 1994.
1.29 "Polymorphic Patents" means collectively all patents issuing on
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the '750 Patent Application and all foreign counterparts of such
patents.
1.30 "Polymorphic Licensed Products" means Licensed Products that
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are claimed by the Polymorphic Patents.
1.31 "Second Option Period Negotiations" means the negotiations
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described in Section 16.3.
1.32 "Second Conversion Option" means the option described in
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Section 16.4
1.33 "Second Option Commencement Date" means November 9, 2010.
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1.34 "Second Option Expiration Date" means the date that is ninety
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(90) days after the Second Option Commencement Date.
1.35 "Second Option Period" means the period of time beginning on
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the Second Option Commencement Date and ending on the Second Option
Expiration Date.
1.36 "Reimbursable Development Costs Amount" means the sum of (a)the
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out-of-pocket costs occurred worldwide by Xxxxxxx (including any
and all payments made under Section 3 of this Agreement) in
connection with its development of Licensed Products and efforts to
obtain
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NDA approval thereof through the date on which Pfizer and Xxxxxxx
consummate the agreement referred to in Sections 16.1 (c) or 16.3
(c) as appropriate, including without limitation the costs of
clinical studies, formulation development and manufacturing process
improvements and (b) interest upon all such costs, compounded from
the last day of the year in which such costs are accrued through the
date on which such agreement is consummated at a monthly variable
rate of one percent above the prime lending rate of Citibank, N.A.,
New York, New York.
SECTION 2 - Grant of Licenses
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2.1 Subject to the terms of this Agreement, Pfizer hereby grants to
Xxxxxxx, and Xxxxxxx hereby accepts, (a) a royalty bearing,
exclusive license, including the right to sublicense, under the
Licensed Patents to make, have made, use, offer to sell, sell, and
import Licensed Products in the Territory, and (b) a royalty
bearing exclusive license, including the right to sublicense, to
use Technical Information in connection with the manufacture, use,
offer to sell, sale and importation of Licensed Products in the
Territory. It is understood that the foregoing exclusive licenses
grant to Xxxxxxx the rights enumerated to the exclusion of all
other parties, including Pfizer, except for the right of Pfizer,
for purely experimental and research purposes only, to make and use
Licensed Products under the Licensed Patents and to use Technical
Information in connection therewith. Pfizer shall consult with
Xxxxxxx before initiating any studies involving the Licensed
Products.
2.2 Notwithstanding Section 2.1, this Agreement does not xxxxx Xxxxxxx
any license to make, have made, use, offer to sell, sell or import
the Licensed Products in the Territory in connection with the
development or commercialization of Licensed Products for use in
treating, preventing or curing diseases in non-humans. Pfizer
retains all rights to develop and commercialize the Licensed
Products for use in non-humans.
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SECTION 3 - License and Due Diligence Payments
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3.1 In partial consideration of the licenses granted to Xxxxxxx in this
Agreement, Xxxxxxx shall pay to Pfizer license fees in the total
amount of either $13,000,000 or $11,000,000, payable as follows:
(a) $1,000,000 upon execution of this Agreement by both parties:
(b) $2,000,000 within 30 days after the delivery to Xxxxxxx of
all of the Technical Information specified in the list
attached as Exhibit 3.1 (b):
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(c) $2,000,000 within 30 days after the date on which Xxxxxxx'
IND first becomes effective in the U.S. or a Major Country;
(d) $2,000,000 upon the earlier of the following two dates: (i)
the date that is six (6) months after the first submission by
Xxxxxxx of an NDA in the U.S. or in or for a Major Country,
or (ii) the date that is 30 days after the earlier of FDA
acceptance for filing of an NDA submitted by Xxxxxxx in the
U.S., or comparable action in or for a Major Country.
(e) If prior to the sixth anniversary of the TI Delivery Date
either the FDA has accepted for filing an NDA submitted by
Xxxxxxx in the U.S. or comparable action is taken prior to
such anniversary in a Major Country, (i) $3,000,000 within 30
days after the earlier of (A) the date on which the first NDA
submitted by Xxxxxxx is approved in the U.S. or (B) the date
on which an NDA or NDAs permitting sale in at least two Major
Countries is or are first approved and (ii) an additional
$3,000,000 within twelve months after the earlier of the
dates referred to in Clauses (A) and (B).
(f) If prior to the sixth anniversary of the TI Delivery Date an
NDA submitted by Xxxxxxx in the
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U.S. has not been accepted for filing nor has comparable
action been taken in or for a Major Country, $4,000,000 within
30 days after the earlier of (i) the date on which the first
NDA submitted by Xxxxxxx is approved in the U.S. or (ii) the
date on which an NDA or NDAs permitting sale in at least two
Major Countries is or are first approved.
3.2 Due Diligence Payments
In addition, Xxxxxxx shall pay Pfizer the following if the
specified conditions are met:
(a) $1,000,000 within 30 days after the second anniversary of the
TI Delivery Date if Xxxxxxx has not initiated Phase III
Clinical Trials of the Licensed Product by such anniversary.
(b) $2,000,000 within 30 days after the sixth anniversary of the
TI Delivery Date, if an NDA in the U.S. is not accepted for
filing by the FDA nor has comparable action been taken in a
Major Country by such anniversary.
3.3 Xxxxxxx will immediately inform Pfizer by telephone and in writing
of the achievement of each milestone referred to in Section 3.1(b)
through (f). Xxxxxxx shall also provide Pfizer with a written
status report of the development progress of all Licensed Products
by March 1 and September 1 of every year in which this Agreement is
in effect.
SECTION 4 - Royalty Payments
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4.1 In partial consideration of the licenses granted to Xxxxxxx in this
Agreement, and the disclosure to Xxxxxxx of Technical Information
hereunder, Xxxxxxx shall pay to Pfizer royalties based on Net Sales
of Licensed Products during each Payment Computation Period as
follows:
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(a) At the rate of seven percent (7%) of the first $100,000,000
of worldwide Net Sales in any given year;
(b) At the rate of ten percent (10%) of all worldwide Net Sales
over $100,000,000 in any given year.
4.2 The duration of royalty payments under Section 4.1 shall be
determined on a country-by-county basis and shall continue in each
country until the earlier of (a) the expiration of the last to
expire of the Licensed Patents (if any) in such country with claims
directed to the Licensed Product sold in such country by Xxxxxxx or
its sublicensees, or (b) fifteen (15) years from the date of first
commercial sale of Xxxxxxx or its sublicensees of any Licensed
Product for use in humans in such country. After the expiration of
Xxxxxxx' royalty obligations in a country, the licenses then in
effect (as modified under Section 16) shall be fully paid-up.
4.3 Once Xxxxxxx launches a Licensed Product, Xxxxxxx agrees to use its
best efforts to maximize Net Sales of the Licensed Product.
SECTION 5 - Payment Procedures, Reports, Records, Taxes, Auditing
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5.1 Sales between or among Xxxxxxx, its Affiliates and its
sublicensees shall not be subject to royalties under Section 4, but
in such cases royalties shall be calculated upon Net Sales to an
independent third party. Xxxxxxx Pharmaceutical Corporation shall
be responsible for payment of any royalties accrued on sales of
Licensed Products to such independent third party through its
affiliates or sublicensees.
5.2 Xxxxxxx shall pay to Pfizer royalties on Net Sales during each
Payment Computation Period within sixty (60) days after the end of
each such Payment Computation Period, and each payment shall be
accompanied by a report identifying the Licensed Product, the Net
Sales, and the royalties payable to Pfizer, as well as computation
thereof.
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5.3 All payments to be made by Xxxxxxx to Pfizer under this Agreement
shall be made and reported in Dollars. The rate of exchange to be
used in computing the amount of Net Sales and the Dollars due
Pfizer shall be calculated using Xxxxxxx' then current standard
exchange rate methodology, which methodology is used by Xxxxxxx in
the translation of its foreign currency operating results for
external reporting; is consistent with United States generally
accepted accounting principles and is reviewed and approved by
Xxxxxxx' independent certified public accountants.
5.4 Taxes required to be paid or withheld by Xxxxxxx, or its
sublicensees for the account of Pfizer on amounts payable to Pfizer
under this Agreement shall be deducted from the amounts due
hereunder at the rates specified by applicable law. In addition,
Xxxxxxx shall provide promptly to Pfizer receipts from the
government or taxing authority evidencing payment of such taxes.
5.5 Xxxxxxx and its sublicensees shall keep full and accurate books and
records setting forth gross sales, Net Sales, and amounts payable
to Pfizer hereunder. Xxxxxxx shall permit Pfizer, at Pfizer's
expense, by independent certified public accountants employed by
Pfizer and reasonably acceptable to Xxxxxxx upon written notice to
Xxxxxxx and no more than once a year, to examine such books and
records at any reasonable time, but not later than five (5) years
following the rendering of any such reports, accountings and
payments. Such independent accountants shall not disclose to
Pfizer any of Xxxxxxx' cost data. The opinion of said independent
accountants regarding such reports, accountings and payments shall
be binding on the parties hereto. All amounts of Net Sales shall
be determined from the books and records of Xxxxxxx maintained in
accordance with United States generally accepted accounting
principles, consistently applied.
5.6 Xxxxxxx shall pay interest to Pfizer upon any and all amounts
payable under Section 3 and 4 (including royalties that are
contested or overlooked but later
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paid) that are at any time overdue and payable to Pfizer at a
monthly variable interest rate of 1% above the prime lending rate of
Citibank, N.A., New York, New York which was in effect on the first
day of the preceding calendar month, such interest accruing from the
date when such royalties are due and payable as provided herein to
the date of payment.
SECTION 6 - Disclosure of Information
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6.1 Pfizer shall deliver photocopies or originals of all of the
Technical Information listed on Exhibit 3.1(b) within six (6)
months after the execution of this Agreement. Within ten (10)
calendar days after such delivery, Xxxxxxx shall either confirm its
receipt of all such Technical Information or specify which of such
Technical Information it has not received. All such Technical
Information is subject to the disclaimers and caveats set forth on
Exhibit 3.1(b).
6.2 During the term of this Agreement or if this Agreement is
terminated by Xxxxxxx or Pfizer, for five (5) years after such
termination hereof, Xxxxxxx shall keep confidential and not
disclose to others or use for any purpose, other than in connection
with the discharge of its obligations or exercise of its rights
under this Agreement, any Technical Information supplied in writing
by Pfizer or its Affiliates; provided, however, that the foregoing
obligations of confidentiality and non-use shall not apply to the
extent that any such information (a) already known to Xxxxxxx at
the time of disclosure hereunder or hereafter developed by Xxxxxxx
independent of any disclosure hereunder as Xxxxxxx can demonstrate
by competent proof; or (b) is or becomes publicly known prior to or
after disclosure other than through acts or omissions of Xxxxxxx or
its employees or (c) is disclosed in good faith to Xxxxxxx by a
third party under a reasonable claim of right. Any disclosure of
Technical Information to third parties shall be subject to
confidentiality obligations consistent with the provisions of this
Section 6.2, to the extent possible under applicable law. Nothing
herein shall be deemed to prevent Xxxxxxx investigators
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from publishing the results of their work.
6.3 In connection with the furnishing by Pfizer of Technical
Information hereunder, Pfizer agrees, at the request of Xxxxxxx, to
allow personnel of Xxxxxxx to visit facilities of Pfizer and its
Affiliates and to consult with their personnel, at mutually
agreeable times, to discuss and review such information. In
addition, Pfizer agrees, at the request of Xxxxxxx and at Xxxxxxx'
expense, to allow personnel of Pfizer or its Affiliates to visit
Xxxxxxx' manufacturing and research facilities, at mutually
agreeable times to discuss and review such information.
6.4 During the term of this Agreement and for five (5) years after
expiration or termination hereof (except in case of termination by
Pfizer under Section 13), Pfizer shall keep confidential and not
disclose to others or use for any purpose, other than in connection
with the discharge of its obligations or exercise of its rights
under this Agreement, any know-how, data or information that are
owned by Xxxxxxx, directed to Licensed Products and disclosed in
writing by Xxxxxxx and marked "confidential"; provided, however,
the foregoing obligations of confidentiality and non-use shall not
apply to the extent that such know-how, data and information is:
(a) already known to Pfizer at the time of disclosure hereunder or
hereafter developed by Pfizer independent of any disclosure
hereunder as Pfizer can demonstrate by competent proof; or (b)
publicly known prior to or after disclosure hereunder other than
through acts or omissions of Pfizer or its employees; or (c)
disclosed in good faith to Pfizer by a third party under a
reasonable claim of right. Nothing herein shall be deemed to
prevent Pfizer investigators from publishing the results of their
work.
6.5 All Technical Information heretofore disclosed by Pfizer to Xxxxxxx
and any know-how, data and information disclosed by Xxxxxxx to
Pfizer shall be deemed to have been disclosed pursuant to this
Agreement and shall be subject to the provisions of
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this Agreement, including but not limited to Sections 6.3 and 6.4
SECTION 7 - Supply of Bulk Sampatrilat
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7.1 Except as specified below, Xxxxxxx alone will be responsible for
manufacturing all Licensed Product needed to meet its developmental
and commercial requirements. Pfizer will supply Xxxxxxx with
approximately 20 kilograms of bulk sampatrilat and will use
reasonable efforts to extend the period during which such bulk
sampatrilat may be used under U.S. law and regulations in clinical
studies such as by extending the shelf life of such bulk
sampatrilat. The outcome of Pfizer's efforts to extend such period
is not assured and will have no impact on either parties' rights or
obligations under this Agreement.
7.2 PFIZER EXPRESSLY DISCLAIMS ALL IMPLIED AND EXPRESS WARRANTIES
(INCLUDING WITHOUT LIMITATION THE WARRANTY OF MERCHANTABILITY) WITH
RESPECT TO THE BULK SAMPATRILAT IT SUPPLIES TO XXXXXXX UNDER
SECTION 7.1
SECTION 8 - Prosecution, Maintenance and Extension of Patents
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8.1 Pfizer and Xxxxxxx shall cooperate in connection with the continued
prosecution by Pfizer of the patent applications listed in Exhibit
1.7(a). Such cooperation shall include, without limitation: (a)
Xxxxxxx shall have full access to all documentation, filings and
communications to or from the respective patent offices, and shall
be kept fully advised as to the status of all pending applications;
(b) Pfizer, its agents and attorneys will use their reasonable
efforts to secure grant of all the Licensed Patents and will
consult with Xxxxxxx in the event that any country rejects any of
the patent applications constituting Licensed Patents; and (c)
Pfizer, its agents and attorneys will give due consideration to all
suggestions and comments of Xxxxxxx regarding any aspect of such
patent prosecutions.
8.2 In addition, Pfizer shall take all necessary steps and
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pay all expenses necessary to maintain for the full life thereof all
Licensed Patents. Pfizer and Xxxxxxx shall consult with each other
during the term of this Agreement to determine a worldwide patent
filing strategy. Xxxxxxx shall use reasonable efforts to reduce or
eliminate patent prosecution and maintenance costs related to the
Licensed Patents in countries where Xxxxxxx has no reasonable
expectation of actively making, using or selling the Licensed
Products.
8.3 Unless Pfizer elects to do so, Xxxxxxx shall have the right, upon
consultation with Pfizer, to file on behalf of and as agent for
Pfizer all applications and filings and take all actions necessary
to obtain the benefits under the Drug Price Competition and Patent
Term Restoration Act of 1984 and any amendments thereof. Pfizer
agrees to sign such further authorizations and instruments and take
such further actions as may be requested by Xxxxxxx to implement
the foregoing.
8.4 Pfizer and Xxxxxxx shall cooperate to obtain Supplementary
Protection Certificates in Europe where possible and for this
purpose Xxxxxxx shall inform Pfizer promptly of any country which
grants regulatory approval for Licensed Products and, upon request,
shall provide Pfizer with a summary of the registration documents
or any other documents reasonably required by Pfizer for such
purpose.
8.5 If any claim of a Licensed Patents becomes, within any country in
the Territory, the subject of a judgment, decree or decision of a
court, tribunal, or other authority of competent jurisdiction,
which judgment, decree, or decision is or becomes final (there
being no further right of review) and adjudicates the validity,
enforceability, scope, or infringement of the same, the
construction of such claim in such judgment, decree or decision
shall be followed thereafter in such country in determining whether
a product is licensed hereunder, not only as to such claim but also
as to all other claims to which such construction reasonably
applies. If at any time there are two or more conflicting final
judgments, decrees, or decisions with respect to the
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same claim, the decision of the higher tribunal shall thereafter
control, but if the tribunal be of equal rank, then the final
judgment, decree, or decision more favorable to such claim shall
control unless and until the majority of such tribunals of equal
rank adopt or follow a less favorable final judgment, decree, or
decision, in which event the latter shall control.
8.6 Xxxxxxx shall xxxx all Licensed Products made, used or sold under
the terms of this Agreement, or their containers, in accordance
with the patent laws of the country where made, used or sold.
SECTION 9 - Infringement Of Licensed Patents
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9.1 Xxxxxxx shall give Pfizer prompt notice of any infringement,
potential infringement or suspected infringement of the Licensed
Patents that may come to Xxxxxxx' attention. Pfizer shall give
Xxxxxxx prompt notice of its intent to bring legal action against a
party for infringing the Licensed Patents. Promptly after any such
notice, the party receiving the notice shall consult and cooperate
fully with the other to determine a course of action, including,
but not limited to, the commencement of legal action by one or both
parties, to cause such infringement, potential infringement or
suspected infringement to be terminated. Each party, at its
option, may elect to participate in or commence such a legal
action. In the event of a joint action in which both parties agree
to participate, the parties will share in the costs and the recovery
of the agreed upon course of action in a manner to be agreed upon.
Failing agreement on a course of action to xxxxx infringement,
potential infringement or suspected infringement within thirty (30)
days of the time such infringement, potential or suspected
infringement becomes known to both parties, either party shall have
the right, at its own expense, (a) to initiate and prosecute an
action against the infringer and retain whatever damages are
recovered and (b) to take whatever other steps it shall deem
advisable. In the event Xxxxxxx is unable to initiate and prosecute
any such action solely in its own name, Pfizer will
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execute all documents necessary for Xxxxxxx to initiate and
prosecute such action and cooperate in such action, at the cost and
expense of Xxxxxxx, and vice versa. Neither party will enter into
any settlement of any action referred to in this Section 9.1 without
the other party's prior consent, which consent shall not be
unreasonably withheld.
9.2 Xxxxxxx and Pfizer shall, at the other's request, take all action
necessary to assist in suits initiated under Section 9.1 (including
joining as a party).
SECTION 10 - Representations, Warranties and Covenants
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10.1 Pfizer hereby represents and warrants to Xxxxxxx as follows:
(a) Pfizer has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder, and the execution, delivery and performance of
this Agreement by Pfizer have been duly and validly
authorized and approved by proper corporate action on the
part of Pfizer, and Pfizer has taken all other action
required by law, its corporate statutes, certificate of
incorporation or by-laws or any agreement to which it is a
party or to which it may be subject required to authorize
such execution, delivery and performance. Assuming due
authorization, execution and delivery on the part of Xxxxxxx,
this Agreement constitutes a legal, valid and binding
obligation of Pfizer, enforceable against Pfizer in
accordance with its terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws of general application
relating to creditors' rights.
(b) To the best of Pfizer's knowledge, the execution and delivery
of this Agreement by Pfizer and the performance by Pfizer
contemplated hereunder will not violate any ordinance, law,
decree or government regulation or any order of any court or
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other governmental department, authority, agency or
instrumentality thereof.
(c) To the best of Pfizer's knowledge, as of the date hereof the
issued Licensed Patents are valid and enforceable patents and
are not being infringed. In addition, Pfizer is the legal
and beneficial owner of all the Licensed Patents and all of
the Technical Information, and no other person, firm,
corporation or other entity has any right, interest or claim
in or to the Licensed Patents or Technical Information.
(d) Neither the execution and delivery of this Agreement nor the
performance hereof by Pfizer requires Pfizer to obtain any
permits, authorizations or consents from any governmental
body or from any other persons, firm or corporation, and such
execution, delivery and performance will not result in the
breach of or give rise to any termination of any agreement or
contract to which Pfizer may be a party or which otherwise
relates to the Licensed Patents, Technical Information or the
Licensed Products.
10.2 Xxxxxxx hereby represents and warrants to Pfizer as follows:
(a) Xxxxxxx has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder, and the execution, delivery and performance of
this Agreement by Xxxxxxx has been duly and validly
authorized and approved by proper corporate action on the
part of Xxxxxxx, and Xxxxxxx has taken all other action
required by law, its certificate of incorporation or by-laws
or any agreement to which it is a party or to which it may be
subject required to authorize such execution and delivery.
Assuming due authorization, execution and delivery on the
part of Pfizer, this Agreement constitutes a legal, valid and
binding obligation of Xxxxxxx, enforceable against Xxxxxxx in
accordance with its
-19-
terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or other
similar laws of general application relating to creditors'
rights.
(b) To the best of Xxxxxxx' knowledge, the execution and delivery
of this Agreement and the performance by Xxxxxxx contemplated
hereunder will not violate any state, federal or other
statute or regulation or any order of any court or other
governmental department, authority, agency or instrumentality
of the United States.
(c) Neither the execution and delivery of this Agreement nor the
performance hereof by Xxxxxxx requires Xxxxxxx to obtain any
permits, authorizations or consents from any governmental
body or from any other persons, firm or corporation, and such
execution, delivery and performance will not result in the
breach of or give rise to any termination of any agreement or
contract to which Xxxxxxx may be a party.
10.3 Pfizer disclaims any implied warranty that Licensed Products made
in accordance with Licensed Patents have commercial utility.
SECTION 11 - Indemnification
----------------------------
11.1 Xxxxxxx agrees to indemnify, defend and hold Pfizer and its
directors, officers, agents and employees (the "Pfizer Parties")
harmless from all loss, damage, liability, claim of loss, lawsuit,
action, cost, fees (including reasonable attorneys' fees),
expenses, and other claims asserted against them or any of them for
any damage, injury or death arising directly or indirectly as a
result of the clinical or animal testing or use, manufacturing,
processing, packaging, marketing, sale, distribution or disposal of
Licensed Products, or the disposal of wastes produced in the course
of any of the foregoing activities in each case by Xxxxxxx or its
sublicensees; provided, however, (a) such loss, damage, liability,
claim, lawsuit or action
-20-
shall not be the result of the gross negligence or intentional
misconduct on the part of the Pfizer Parties, and (b) that Pfizer
shall give Xxxxxxx notice as soon as practicable of any such claim
or action and that Xxxxxxx shall have the right to participate in
any compromise, settlement or defense hereof.
SECTION 12 - Termination
------------------------
12.1 This Agreement shall be effective as of the date first set forth
above and shall remain in effect for so long as Xxxxxxx is
obligated to make payments to Pfizer under Sections 3 and 4, unless
earlier terminated as provided herein. The provisions of Sections
6 and 11 shall survive the expiration or termination of this
Agreement. In addition, the provisions of the last sentence of
Section 4.2 with respect to the fully paid-up Technical Information
license shall survive the expiration of this Agreement.
SECTION 13 - Termination
------------------------
13.1 Xxxxxxx shall have the exclusive option at any time to terminate
this Agreement in full for whatever reason upon ninety (90) days'
prior written notice to Pfizer.
13.2 If either Xxxxxxx or Pfizer materially breaches or defaults in the
performance or observance of any of the provisions of this
Agreement, and such breach or default is not cured within sixty
(60) days after the giving of notice by the other party specifying
such breach or default, the other party shall have the right to
terminate this Agreement upon a further thirty (30) days notice.
If any representation or warranty of any party as contained in this
Agreement shall be materially incorrect or inaccurate, such shall
be deemed to be a material breach or default of this Agreement by
such party.
13.3 Termination of this Agreement for any reason shall be without
prejudice to: (i) the rights and obligations of the parties as
provided in Sections 6 and 11; (ii) Pfizer's right to receive all
payments accrued under
-21-
Sections 3 and 4 prior to the effective date of such termination;
and (iii) any other remedies which either party may otherwise have.
13.4 Upon any termination by Pfizer under Section 13.2, and to the
extent requested by Pfizer, Xxxxxxx shall, at its sole expense,
transfer to Pfizer all Technical Information delivered to Xxxxxxx
hereunder, all scientific and technical information developed by
Xxxxxxx regarding Licensed Products, all INDs, NDAs and other
governmental health registrations and approvals regarding Licensed
Products; provided, however, Pfizer shall not be entitled to any
rights under any Xxxxxxx patents or scientific or technical
information to the extent such do not relate to Licensed Products
as a single entity.
SECTION 14 - Force Majeure
--------------------------
14.1 Neither party shall be liable to the other for loss or damages or
shall have any right to terminate this Agreement for any default or
delay attributable to any force majeure event, including but not
limited to acts of God, acts of government, fire, flood, earthquake,
strikes, labor, disputes, and the like, if the party affected shall
give prompt notice of any such cause to the other party. The party
giving such notice shall thereupon be excused from such of its
obligations hereunder as it is thereby disabled from performing for
so long as it is so disabled and for 60 days thereafter; provided,
however, that such affected party commences and continues to take
reasonable and diligent actions to cure such cause. Notwithstanding
the foregoing, nothing in this Section 14.1 shall excuse or suspend
the obligation to make any payment due hereunder in the manner and
at the time provided. If a party's performance cannot be resumed
within 180 days of its suspension, this Agreement may be terminated
by the other party upon 30 days advance written notice.
SECTION 15 - Assignment
-----------------------
15.1 Except as expressly provided herein, neither party may
-22-
assign its rights and obligations under this Agreement except to an
Affiliate without the prior written consent of the other, except a
party may make such an assignment without the other party's consent
in connection with any merger or sale of all or substantially all of
its assets to which this Agreement relates. This Agreement shall be
binding upon and inure to the benefit of the successors and
permitted assignees of the parties hereto. If any assignment of this
Agreement occurs, the assignor shall remain liable for all payments
and obligations hereunder of the assignee.
SECTION 16 - Option Rights Retained by Pfizer
---------------------------------------------
16.1 First Option Period Negotiations
--------------------------------
(a) Evaluation Period. At any time during the First Option
-----------------
Period, if Pfizer is interested in initiating the
negotiations referred to in Section 16.1(c), Pfizer may elect
to initiate an evaluation period by giving written notice to
Xxxxxxx of its desire to initiate such evaluation period.
(b) Xxxxxxx' Obligations during the Evaluation Period. If
-------------------------------------------------
Pfizer elects to initiate the evaluation period pursuant to
Section 16.1(a), Xxxxxxx shall (i) give Pfizer access to any
INDs or NDAs maintained by Xxxxxxx with respect to the
Amphorous Licensed Products, (ii) make available personnel
qualified to respond to any Pfizer questions concerning such
filings, and (iii) notify Pfizer of its estimate of the
Reimbursable Development Costs Amount, assuming consummation
of the agreement referred to in Section 16.1(c) on the last
day of the First Option Period. For each day that elapses
after the date on which Pfizer initiates the evaluation
period and the date on which Xxxxxxx first complies with its
obligations under the preceding sentence, the First Option
Period shall be extended by a day. Pfizer may use any
information disclosed to Pfizer under this Section 16.1(b)
-23-
solely in connection with its evaluation and negotiations
under this Section 16.1.
(c) Initiation of First Option Period Negotiations. At any
----------------------------------------------
time during the First Option Period, upon Pfizer's written
request, Xxxxxxx will enter into good faith negotiations with
Pfizer aimed at the consummation of an agreement under which
(i) the exclusive licenses under the Amorphous
Patents and the Technical Information granted in
Section 2.1 shall be converted automatically to
non-exclusive licenses;
(ii) Pfizer and any licensees it selects shall have
automatically the right to make, have made, use,
offer to sell, sell and import the Amorphous
Licensed Products under the Amorphous Patents and
using the Technical Information under brand names
that are different from the brand names used by
Xxxxxxx for the Licensed Products;
(iii) Xxxxxxx will furnish Pfizer immediately with a
complete copy of Xxxxxxx' INDs and NDAs for
Amorphous Licensed Products;
(iv) Xxxxxxx shall xxxxx Pfizer immediately the right
to refer to Xxxxxxx' INDs and NDAs in connection
with any applications by Pfizer for INDs or NDAs
for Amorphous Licensed Products;
(v) Pfizer shall automatically have a non-exclusive
worldwide license from Xxxxxxx, with the right to
sublicense, to use the contents of such INDs and
NDAs in connection with the manufacture, use,
offer to sell, sale and importation
-24-
of the Amorphous Licensed Products;
(vi) In full consideration of the rights and license
referred to in Section 16.1(d) (iv) and (v),
within thirty (30) days after the date on which
Pfizer enters into the agreement with Xxxxxxx,
Pfizer shall pay Xxxxxxx a fair percentage of the
Reimbursable Development Costs Amount, which as
of this date the parties estimate to be 50%;
(vii) Xxxxxxx will supply all of Pfizer or any
licensee's developmental and commercial
requirements of Amorphous Licensed Products;
(viii) Upon commercial launch by Pfizer or any of its
licensees of any Amorphous Licensed Products in
any country, the royalty rates applicable to
sales in such country under Section 4 shall be
reduced automatically by a fair percentage, which
as of this date the parties estimate to be
seventy-five percent (75%);
(ix) The parties shall establish promptly a mutually
acceptable procedure for exchanging information
regarding adverse experiences with respect to the
Licensed Products.
(d) The outcome of the First Option Period Negotiations is not
assured, Xxxxxxx not being under any obligation other than
the obligation to negotiate in good faith.
16.2 First Conversion Option
-----------------------
(a) Exercise of First Conversion Option. In lieu of
-----------------------------------
exercising any of its rights under Section 16.1, at any time
during the Fist Option Period, Pfizer
-25-
may elect to exercise the First Conversion Option by giving
written notice to Xxxxxxx of such exercise.
(b) Effect of Exercise of First Conversion Option. Upon
---------------------------------------------
Pfizer's exercise of the First Conversion Option, the
following provisions shall apply automatically:
(i) the exclusive licenses under the Amorphous
Patents and the Technical Information granted to
Xxxxxxx in Section 2.1 shall be converted
automatically to non-exclusive licenses;
(ii) Pfizer and any licensees selected by Pfizer shall
have automatically the right to make, have made,
use, offer to sell, sell and import the Amorphous
Licensed Products under the Amorphous Patents and
using the Technical Information under brand names
that are different from the brand names used by
Xxxxxxx for the Licensed Products;
(iii) Upon Pfizer's request, Xxxxxxx and Pfizer will
enter into good faith negotiations aimed at the
consummation of a supply agreement under which
Xxxxxxx would supply all of the developmental and
commercial requirements of Amorphous Licensed
Products of Pfizer or its licensees;
(iv) Upon commercial launch by Pfizer or any of its
licensees of any Amorphous Licensed Products in
any country, the royalty rates set forth in
Section 4 shall be reduced automatically by
seventy-five percent (75%) for sales in such
country;
(v) The parties shall establish promptly a
-26-
mutually acceptable procedure for exchanging
information regarding adverse experiences with
respect to the Licensed Products.
16.3 Second Option Period Negotiations
---------------------------------
(a) Evaluation Period. At any time during the Second Option
-----------------
Period, if Pfizer is interested in initiating the
negotiations referred to in Section 16.3(c), Pfizer may elect
to initiate an evaluation period by giving written notice to
Xxxxxxx of its desire to initiate such evaluation period.
(b) Xxxxxxx' Obligations during the Evaluation
------------------------------------------
Period. If Pfizer elects to initiate the evaluation period
------
pursuant to Section 16.1(a), Xxxxxxx shall (i) give Pfizer
access to any INDs or NDAs maintained by Xxxxxxx with respect
to the Polymorphic Licensed Products, (ii) make available
personnel qualified to respond to any Pfizer questions
concerning such filings, and (iii) notify Pfizer of its
estimate of the Reimbursable Development Costs Amount,
assuming consummation of the agreement referred to in Section
16.3(c) on the last day of the Second Option Period. For
each day that elapses after the date on which Pfizer
initiates the evaluation period and the date on which Xxxxxxx
first complies with its obligations under the preceding
sentence, the Second Option Period shall be extended by a
day. Pfizer may use any information disclosed to Pfizer
under this Section 16.1(b) solely in connection with its
evaluation and negotiations under this Section 16.3.
(c) Initiation of Second Option Period Negotiations. At any
-----------------------------------------------
time during the Second Option Period, upon Pfizer's written
request, Xxxxxxx will enter into good faith negotiations with
Pfizer aimed at the consummation of an agreement under which
-27-
(i) the exclusive licenses under the Polymorphic
Patents and the Technical Information granted in
Section 2.1 shall be converted automatically to
non-exclusive licenses;
(ii) Pfizer and any licensees it selects shall have
automatically the right to make, have made, use,
offer to sell, sell and import the Polymorphic
Licensed Products under the Polymorphic Patents
and using the Technical Information under brand
names that are different from the brand names
used by Xxxxxxx for the Licensed Products;
(iii) Xxxxxxx will furnish Pfizer immediately with a
complete copy of Xxxxxxx' INDs and NDAs for
Polymorphic Licensed Products;
(iv) Xxxxxxx shall grant Pfizer immediately the right
to refer to Xxxxxxx' INDs and NDAs in connection
with any applications by Pfizer for INDs or NDAs
for Polymorphic Licensed Products;
(v) Pfizer shall automatically have a non-exclusive
worldwide license from Xxxxxxx, with the right to
sublicense, to use the contents of such INDs and
NDAs in connection with the manufacture, use,
offer to sell, sale and importation of the
Polymorphic Licensed Products;
(vi) In full consideration of the rights and license
referred to in Section 16.1(d)(iv) and (v), and
so long as the agreement referred to in Section
16.1(c) has not been consummated and the First
Conversion Option has not been exercised, within
thirty (30) days after the date on which Pfizer
exercises the
-28-
Second Hybrid Option, Pfizer shall pay Xxxxxxx a
fair percentage of the Reimbursable Development
Costs Amount, which as of this date the parties
estimate to be 50%.
(vii) Xxxxxxx will supply all of Pfizer or any
licensee's developmental and commercial
requirements of Polymorphic Licensed Products;
(viii) Upon commercial launch by Pfizer or any of its
licensees of any Polymorphic Licensed Products in
any country, and so long as the royalty rates
have not already been reduced in such country,
the royalty rates applicable to sales in such
country under Section 4 shall be reduced
automatically by a fair percentage, which as of
this date the parties estimate to be seventy-five
(75%).
(ix) The parties shall establish promptly a mutually
acceptable procedure for exchanging information
regarding adverse experiences with respect to the
Licensed Products.
(d) The outcome of the Second Option Period Negotiations is not
assured, Xxxxxxx not being under any obligation other than
the obligation to negotiate in good faith.
16.4 Second Conversion Option
------------------------
(a) Exercise of Second Conversion Option. In lieu of
------------------------------------
exercising any of its rights under Section 16.3, at any time
during the Second Option Period, Pfizer may elect to exercise
the Second Conversion Option by giving written notice to
Xxxxxxx of such exercise.
-29-
(b) Effect of Exercise of Second Conversion Option. Upon
----------------------------------------------
Pfizer's exercise of the Second Conversion Option, the
following provisions shall apply automatically:
(i) the exclusive licenses under the Polymorphic
Patents and the Technical Information granted to
Xxxxxxx in Section 2.1 shall be converted
automatically to non-exclusive licenses;
(ii) Pfizer and any licensees selected by Pfizer shall
have automatically the right to make, have made,
use, offer for sale, sell and import the
Polymorphic Licensed Products under the
Polymorphic Patents and using the Technical
Information under brand names that are different
from the brand names used by Xxxxxxx for the
Licensed Products;
(iii) Upon Pfizer's request, Xxxxxxx and Pfizer will
enter into good faith negotiations aimed at the
consummation of a supply agreement under which
Xxxxxxx would supply all of the developmental and
commercial requirements of Polymorphic Licensed
Products of Pfizer or its licensees;
(iv) Upon commercial launch by Pfizer or any of its
licensees of any Polymorphic Licensed Products in
any country, and so long as the royalty rates
have not already been reduced in such country,
the royalty rates set forth in Section 4 shall be
reduced automatically by seventy-five percent
(75%) for sales in such country.
(v) The parties shall establish promptly a mutually
acceptable procedure for exchanging information
regarding adverse
-30-
experiences with respect to the Licensed
Products.
16.5 Condition for Exercise of Options. Pfizer may elect to
---------------------------------
initiate the evaluation periods and negotiations referred to in
Sections 16.1 and 16.3, or exercise the options referred to in
Sections 16.2 and 16.4, only if during the then most recent twelve
month period for which independent audited prescription drug sales
data are available, the Licensed Products have collectively
accounted for at least six percent (6%) of all worldwide sales of
pharmaceuticals sold for the treatment of hypertension in humans.
16.6 Environmental Information Disclosure. Upon Pfizer's request in
------------------------------------
connection with the exercise of its rights under this Section 16,
Xxxxxxx will furnish Pfizer with information (if any) reasonably
needed by Pfizer to assess the environmental, health and safety
requirements associated with the manufacture of Licensed Products.
SECTION 17 - Miscellaneous
--------------------------
17.1 Governing Law - This Agreement shall be governed by and
-------------
construed under the law of the State of New York, regardless of the
choice of law principles of New York or any other jurisdiction.
17.2 Notices - Any notice required under this Agreement shall be in
-------
writing sent by (a) certified mail, postage prepaid with return
receipt requested (b) Fed Ex or another reliable courier service or
(c) telefax (confirmed by such mail or courier service), addressed
as follows:
If to Xxxxxxx: If to Pfizer:
Xxxxxxx Pharmaceutical Pfizer Inc.
Corporation 000 Xxxx 00xx Xxxxxx
Xxxxxxxx Xxxxxx XX Xxx Xxxx, XX 00000
0 Xxxxxxxxxx Xxx Xxxx Xxxxxxxxx: General Counsel
Xxxxxxxxx, XX 00000
-31-
Attention: Xxxxxxx X. Xxxxxx
Telefax: (000) 000-0000 Telefax: (000) 000-0000
All notices shall be deemed to be effective on the date sent. In
case any party changes its addresses at which notice is to be
received, written notice of such change shall be given without
delay to the other party.
17.3 Entire Agreement - This Agreement sets forth the entire
----------------
agreement and understanding between the parties hereto as to the
subject matter hereof and has priority over all documents, verbal
consents or understandings made between Pfizer and Xxxxxxx before
the conclusion of this Agreement with respect to the subject matter
hereof. None of the terms of this Agreement shall be amended or
modified except in a writing signed by the parties hereto.
17.4 Waivers - A waiver by any party of any term or condition of
-------
this Agreement in any one instance shall not be deemed or construed
to be a waiver of such term or condition for any similar instance
in the future or of any subsequent breach hereof. All rights,
remedies, undertakings, obligations and agreements contained in
this Agreement shall be cumulative and none of them shall be a
limitation of any other remedy, right, undertaking, obligation or
agreement of any party.
17.5 Independent Contractor Status - Both parties shall act as
-----------------------------
independent contractors, and nothing in this Agreement shall be
construed to give either party the power or authority to act for,
bind or commit the other party.
17.6 Consents and Approvals - Whatever provision is made in this
----------------------
Agreement for either party to secure the consent or approval of the
other, that consent or approval shall not be unreasonably withheld,
and whenever in this Agreement provisions are made for one party to
object to or disapprove a matter, such objection or
-32-
disapproval shall not be exercised unreasonably.
17.7 Public Statements - Neither party shall make any public
-----------------
statement or issue any press release expressly or implicitly
specifying the financial terms of this Agreement without first
obtaining the consent of the other party (which consent shall not
be unreasonably withheld), except that consent of the other party
shall not be required as to any such public statement or other
communication (i) which is reasonably believed to be required by
law, or (ii) which has already been publicly disclosed and is still
accurate. In addition, Xxxxxxx agrees not to use the name of
Pfizer or any of its subdivisions in any advertising or promotion
relating to the sale of Licensed Products.
17.8 Headings and Sections - Headings in this Agreement are included
---------------------
herein for ease of reference only and have no legal effect.
References to Sections are to Sections of this Agreement unless
specified otherwise.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their duly authorized officers.
Pfizer Inc. Xxxxxxx Laboratories Inc.
Signature not determined /s/ Xxxxxx X. Xxxxxxxx
By:___________________________ By:___________________________
President
In order to induce Pfizer Inc. to execute this Agreement, Xxxxxxx
Pharmaceutical Corporation, the owner of all of the outstanding shares of
Xxxxxxx Laboratories Inc., hereby guarantees the full and timely performance of
all of the obligations of Xxxxxxx Laboratories Inc. under this Agreement.
Xxxxxxx Pharmaceutical Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
President
