EXHIBIT 10.9
EXCLUSIVE DISTRIBUTION AGREEMENT
THIS EXCLUSIVE DISTRIBUTION AGREEMENT (this "Agreement"), dated as of
August 13, 2004 (the "Effective Date") is entered into between XXXXXX HEALTHCARE
CORPORATION with its principal place of business at Xxx Xxxxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000-0000 ("Baxter"), and HALOZYME, INC. with its principal
place of business at 00000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 00, Xxx Xxxxx, Xxxxxxxxxx
00000 ("Halozyme").
WHEREAS the parties entered into the non-binding letter effective as of
April 27, 2004 (the "Letter"), pursuant to which the parties contemplated
negotiation of this Agreement, and for purposes of this Agreement, "Product"
shall have the meaning set forth in Section 1 of the Letter;
WHEREAS, Halozyme wishes to have Baxter promote, market, distribute and
sell the Product and Baxter wishes to promote, market, distribute and sell the
Product for Halozyme in the Territories as defined below;
NOW, THEREFORE, in consideration of the premises and the undertakings,
terms, conditions and covenants set forth below, the parties hereto agree as
follows:
1. Appointment and Scope.
1.1 Appointment. As of the Effective Date and subject to the terms
and conditions and for the term of the Agreement, Halozyme hereby appoints
Xxxxxx as its exclusive distributor of the Products and its Improvements (as
hereinafter defined) in the Territories (as defined below). Baxter hereby
accepts such appointment and shall use its commercially reasonable efforts to
promote, market, distribute and sell the Product after the Approval Date (as
defined below). Baxter may extend such exclusive distribution rights to any of
its Affiliates or sub-distributors in Xxxxxx'x customary distribution system for
its other products, provided that such Affiliates or sub-distributors shall be
bound by the terms of this Agreement. For the avoidance of doubt, during the
term of the Agreement Halozyme shall not, and shall not enable, assist or
appoint any third party (other than Baxter) to, sell or import Product, or any
product that directly competes with the Product (as determined by its labeled
indications), in the Territories. Notwithstanding the foregoing (but subject to
Section 4.2), Halozyme retains the right jointly with Baxter, to promote and
market (but not to sell) the Product. Notwithstanding the foregoing (but subject
to Section 4.2), Baxter shall have the right to continue to manufacture or have
manufactured, market and distribute any products that Baxter currently
manufactures, markets or distributes or has under development. "Improvements"
shall mean such enhancements to the Product ***, including line extensions of
the Product, packaging of the Product, labeling of the Product, developments in
the Product itself, and Product as produced by newly developed manufacturing
methods.
1.2 Territories. "Territories" shall mean the Initial Territory and
each Additional Territory (as each is defined below). The "Initial Territory"
shall mean the United States and its territories, possessions and Puerto Rico.
An "Additional Territory" shall mean a geographic territory (other than the
Initial Territory) that may be added to this Agreement from time to time in
*** Confidential material redacted and submitted separately to the Securities
and Exchange Commission.
accordance with the following. If Halozyme desires the distribution of Product
in a territory that is not yet part of the Territories (other than any territory
that was part of the Territories at one time but has been excluded pursuant to
Section 1.3), Halozyme shall provide written notice to Baxter of each such
territory. In addition to the rights set forth in Section 1.6 below, Baxter
shall have the right for a period of six (6) months following the date of such
written notice to designate such territory as an Additional Territory by
notifying Halozyme in writing during such six (6) months period. Upon Xxxxxx'x
written notice to Halozyme in such six (6) month period, such territory shall be
an Additional Territory under this Agreement. If Baxter does not provide such
written notice during the applicable six (6) month period, such territory shall
not be an Additional Territory and Baxter shall have no rights under this
Agreement to promote, market, distribute or sell Products in such territories.
1.3 Diligence. Baxter will promote, market, distribute and sell the
Products in the Territories using commercially reasonable efforts, assuming all
necessary regulatory approvals are obtained. If Baxter fails to use such efforts
in a country-by-country basis for the countries within the Territory and subject
to the cure period set forth in Section 8.2, Halozyme shall have the right upon
written notice to terminate this Agreement with respect to such country.
1.4 Independent Purchaser Status. Baxter shall be an independent
purchaser and seller of the Product. Baxter shall not act as an agent or legal
representative of Halozyme, nor shall Baxter have any right or power to act for
or bind Halozyme in any respect or to pledge its credit. Except as expressly set
forth herein, Baxter shall be free to resell the Product on such terms as it
may, in its sole discretion, determine, including price, marketing, advertising,
promotion, returns, credits and discounts. The detailed operations of Baxter
under the Agreement are subject to the sole control and management of Baxter.
Halozyme shall reasonably support Xxxxxx'x sales and promotional activities,
including but not limited to, referring to Baxter all orders and inquiries from
customers and providing Baxter with any existing marketing materials and
documents relating to the marketing authorizations for the Products.
1.5 Failure to Supply. Each party shall use its commercially
reasonable efforts to ensure a steady supply of Product or to resolve any
associated supply issues with their respective contractors.
1.6 Right of First Refusal for Other Products. Halozyme hereby
grants Baxter a right of first refusal to negotiate for an exclusive license
within the Territories on commercially reasonable terms to distribute, offer to
sell and sell any new products (other than Improvements described in the last
sentence of Section 1.1) for use in ***, if such products are developed or
produced by Halozyme and are labeled for use in ***. Baxter shall have the right
for a period of six (6) months following the date of such written notice to
designate such other product as a product to be distributed pursuant to the
terms of this Agreement by notifying Halozyme in writing during such six (6)
month period. Upon Xxxxxx'x written notice to Halozyme in such six (6) month
period, such other product will be deemed a Product under this Agreement. If
Baxter does not provide such written notice during the applicable six (6) month
period, such other product will not be added to this Agreement and Baxter shall
have no rights under this Agreement to promote, market, distribute or sell such
other product in the Territory.
2
2. Financial Considerations. Supply of Product.
2.1 *** Profit Calculation. "*** Profit" shall mean, with respect to
a calendar quarter, all actual invoiced sales of Product and bovine
hyaluronidase as set forth in Section 4.2 received by Baxter, its affiliates or
their respective sublicensees from the sale of Products in such calendar quarter
less (a) *** for the Product (as mutually agreed by the parties), (b)(i) ***
reasonably allocable to such sales of the Product; (ii) returns, recalls,
breakage, uncollected debt, credits or allowances, if any, given or made in the
ordinary course of business consistent with past practice; (iii) sales, use,
value added or other excise taxes, if any, imposed on the sale by any
governmental entity; and (iv) freight and insurance costs incurred in
transporting Product from Xxxxxx'x distribution center in Memphis, Tennessee or
such other distribution center in the Territory as may be designated by Baxter
to the customer, (c) royalties owed by Halozyme to licensors of Halozyme owned
or controlled intellectual property for the sale of such Product by Baxter or
its Affiliates (***), and (d) *** owed by Baxter to licensors of Baxter owned or
controlled intellectual property for the sale of such Product by Baxter or its
Affiliates (***). Baxter and Halozyme shall exercise commercially reasonable
care to maintain any such licenses which cover Product, and or its sale, offer
for sale, distribution, promotion, importation, exportation, or use, in good
standing, and Baxter or Halozyme shall promptly notify the other party if any
such license is terminated. Baxter shall pay to Halozyme, or to Halozyme's
licensor as Halozyme shall direct, the amounts described in clause (c) above
concurrently with Halozyme's payment of its share of Gross Profit, and shall pay
the amounts described in clause (d) above directly to the licensors of Baxter.
2.1.1 *** Profit Product. Baxter shall pay to Halozyme in USD,
with respect to each sale of the Product, *** of *** Profits for such Product.
2.1.2 *** Profit *** hyaluronidase. Baxter shall pay to
Halozyme in USD, with respect to each sale of *** in said Territory a percentage
of *** Profits as follows: (i) For the one (1) year period after the first (1st)
year anniversary of the Approval Date *** of *** Profit for *** as set forth
above in this section using the same production costs as for the Product, (ii)
for the one (1) year period after the second (2nd) year anniversary of the
Approval Date and each successive year thereafter, *** of *** Profit for *** as
set forth above in this section using the same production costs as for the
product, (iii) *** percentage of *** Profit on *** shall be paid for any period
Halozyme loses its regulatory Approval in said Territory or for any period
beyond three (3) months in which it cannot supply API for Product in said
Territory.
2.2 Other Market(s): In the event Baxter and Halozyme mutually
decide to promote this Product ***, and the marketing of such further
indications shall require additional clinical studies after regulatory approval
for sale of the Product for sale in the country of the Territory in which the
Product is to be promoted for the further indications, the Parties will agree to
an annual budget for such clinical studies, marketing materials and sales force
time and shall deduct such actual expenses from the *** Profit before the ***
split.
2.3 Payment Reports. Within sixty (60) days after the end of each
calendar quarter during the term of this Agreement, and within sixty (60) days
following the expiration or termination of this Agreement, Baxter shall furnish
to Halozyme a written report showing in reasonably specific detail, on a
Product-by-Product and country-by-country basis, (a) the calculation
3
of Gross Profit; (b) the withholding taxes, if any, required by law to be
deducted with respect to such sales; and (c) the exchange rates, if any, used in
determining the amount of United States dollars. Within six (6) months after the
end of the annual period, Baxter shall provide to Halozyme a "true-up"
calculation that reconciles any credits or debits arising during such calendar
year (in accordance with Section 2.1 above) that have not previously been
accounted for, or were inaccurately accounted for, in the quarterly reports for
the annual period. All amounts in any such written report shall be expressed in
United States dollars. With respect to sales of Products invoiced in a currency
other than United States dollars, all such amounts shall be expressed both in
the currency in which the distribution is invoiced and in the United States
dollar equivalent. The United States dollar equivalent shall be calculated using
the average of the exchange rate (local currency per US$1) published in The Wall
Street Journal, Western Edition, under the heading "Currency Trading" on the
last business day of each month during the applicable calendar quarter. Baxter
shall keep complete and accurate records in sufficient detail to enable the
amounts payable hereunder to be determined.
2.4 Audits. Upon the written request of Halozyme and not more than
once in each calendar year, Baxter shall permit an independent certified public
accounting firm of nationally recognized standing, selected by Halozyme and
reasonably acceptable to Baxter, at Halozyme's expense, to have access during
normal business hours to such of the records of Xxxxxx as may be reasonably
necessary to verify the accuracy of the payment reports hereunder for any year
ending not more than thirty-six (36) months prior to the date of such request.
If such accounting firm concludes that additional amounts were owed during the
audited period, then the parties agree to meet and discuss the calculation of
the additional amounts. If it is determined that Baxter still owes the
additional amounts, then Baxter shall pay such additional amounts within thirty
(30) days of the date Halozyme delivers to Baxter such accounting firm's written
report so concluding. The fees charged by such accounting firm shall be paid by
Halozyme; provided, however, if the audit discloses that the amounts payable by
Baxter for such period are more than one hundred five percent (105%) of the
amounts actually paid for such period (after the true-up described in Section
2.3 above), then Baxter shall pay the reasonable fees and expenses charged by
such accounting firm.
2.5 Payment Terms. All amounts shown to have accrued by each payment
report provided for under Section 2.3 above shall be payable on the date such
payment report is due. Payment of amounts in whole or in part may be made in
advance of such due date.
2.6 Payment Method. All payments by a party to the other party under
this Agreement shall be paid in United States dollars and all such payments
shall be originated from a United States bank located in the United States and
made by bank wire transfer in immediately available funds to such account as the
payee shall designate before such payment is due.
2.7 Supply of Product. Halozyme agrees to release and supply or
cause to be supplied to Baxter, at no additional charge, the quantities of
Product as reasonably ordered by Baxter by the delivery dates specified in
Xxxxxx'x purchase orders. Baxter shall ship or arrange for shipment of the
Product specified in any purchase order from the site of manufacture for the
Product to Xxxxxx'x distribution facility in Memphis, Tennessee or such other
distribution center in the Territory as may be designated by Baxter.
3. Warranty, Representations.
4
3.1 Halozyme warrants that it possesses good and marketable title to
the Product sold to Baxter hereunder and complies with all regulatory
requirements for such Product in the Territory. With respect to all Product sold
to Baxter hereunder that is not manufactured by Baxter or its Affiliates,
Halozyme warrants that (i) such Product complies or will comply with all
applicable regulatory requirements for such Product in the Territory, (ii) such
Product will be manufactured in accordance with the applicable specifications
therefor, the regulatory approval in the Territory and Good Manufacturing
Practices as applicable to such Product in the Territory and in compliance with
approved quality control processes and standards, which processes and standards
will meet the minimum requirements of applicable laws and regulations in the
Territory, (iii) such Product will be free from defects in workmanship and
material, and (iv) it shall provide at its own expense all packaging and
labeling for such Product that conform with the regulatory requirements in the
Territory and are suitable for sale in the Territory and such labels are
available in the appropriate languages for the Territory. For purposes of
subparagraph (ii) above, each batch such Product supplied by Halozyme, will
include a "Certificate of Analysis," which will include testing results, and
shall be sent to Baxter by mail and fax or e-mail, indicating that the batch has
been manufactured and released according to applicable Good Manufacturing
Practices and the applicable specifications therefor. Halozyme shall indemnify,
defend and hold harmless Baxter, its Affiliates, its sublicensees and
distributors, and their respective directors, officers, employees and agents,
from and against any and all liabilities, damages, losses, costs and expenses
(including the reasonable fees of attorneys and other professionals) incurred
from any claims, actions or proceedings by any third party to the extent
resulting from a breach of the foregoing warranty.
3.2 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
HALOZYME MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCT.
HALOZYME DISCLAIMS ALL OTHER WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
4. Covenants of Baxter.
4.1 No Bundling. Baxter shall not condition the sale or transfer of
the Product with the sale or transfer of any other product or the use of any
service unless the price for the Product is separately itemized on the
applicable invoice and is the same price charged by Baxter for the Product when
sold separately. Notwithstanding the foregoing, for purposes of calculating ***
Profit under Section 2.1, the "***" under clause (b)(i) shall include an evenly
apportioned share of the year-end rebate pursuant to a customary *** reasonably
allocated to sales of Product under such program.
4.2 Exclusivity. Within *** following the date the FDA gives
marketing approval or clearance for a Product (the "Approval Date"), and for so
long as this Agreement is in effect, Baxter shall not promote, market or sell in
the Territory any product that constitutes *** or any other product sold solely
for the labeled indications of Products previously or contemporaneously sold by
Baxter; provided, however, that Baxter may continue to sell *** in said
Territory if a *** is available from other commercial sources in said Territory
and Baxter pays to Halozyme, with respect to each sale of *** in said Territory
a percentage of *** Profit according to the terms set forth in section 2.1.2.
5
5. Regulatory Filings.
5.1 Baxter shall comply with all applicable regulatory requirements
in any country in which Baxter promotes, markets or sells the Products or any
products resulting from, in whole or in part, the Products. In order for
Halozyme to comply with 21 CFR 310.305, 314.80 and 314.98 as promulgated by FDA
and other regulatory authorities, Baxter must report to Halozyme any serious
adverse events immediately and any adverse events and product complaints
regarding the Product, consistent with the Quality Agreement. Halozyme must
report to Baxter ACC any serious adverse events immediately and any adverse
events and product complaints regarding the Product, in each case in accordance
with the Quality Agreement.
5.2 Halozyme shall be responsible at its own cost and expense for
maintaining all marketing authorizations within the Territories for the term of
this Agreement. Halozyme shall duly inform the regulatory authorities of Baxter
being the exclusive distributor of the Product in the Territories.
6. Confidentiality.
6.1 Confidentiality. During the term of this Agreement, and for a
period of five (5) years following the expiration or earlier termination hereof,
each party shall maintain in confidence all Confidential Information (as defined
below) disclosed by the other party, and shall not use, grant the use of or
disclose to any third party the Confidential Information of the other party
other than as expressly permitted by this Agreement. Each party shall notify the
other promptly upon discovery of any unauthorized use or disclosure of the other
party's Confidential Information. As used herein, "Confidential Information"
shall mean all information and data that (a) is provided by one party to the
other party under this Agreement, and (b) if disclosed in writing or other
tangible medium is marked or identified as confidential at the time of
disclosure to the recipient, or is acknowledged at the time of disclosure to be
confidential, or otherwise should reasonably be deemed to be confidential.
Notwithstanding the foregoing, Confidential Information of a party shall not
include that portion of such information and data which, and only to the extent,
the recipient can establish by written documentation: (i) is known to the
recipient as evidenced by its written records before receipt thereof from the
disclosing party, (ii) is disclosed to the recipient free of confidentiality
obligations by a third person who has the right to make such disclosure, (iii)
is or becomes part of the public domain through no fault of the recipient, or
(iv) the recipient can reasonably establish is independently developed by
persons on behalf of recipient without access to or use of the information
disclosed by the disclosing party.
6.2 Permitted Disclosures. Either party may disclose Confidential
Information of the disclosing party (a) on a need-to-know basis, to such party's
directors, officers and employees to the extent such disclosure is reasonably
necessary in connection with such party's activities as expressly authorized by
this Agreement, and (b) to those affiliates, agents and consultants who need to
know such information to accomplish the purposes of this Agreement
(collectively, "Permitted Recipients"); provided such Permitted Recipients are
bound to maintain such Confidential Information in confidence to the same extent
as set forth in Section 6.1.
6.3 Litigation and Governmental Disclosure. Each party may disclose
Confidential Information hereunder to the extent such disclosure is reasonably
necessary for
6
prosecuting or defending litigation, complying with applicable governmental
regulations or conducting pre-clinical or clinical trials, provided that if a
party is required by law or regulation to make any such disclosure of the other
party's Confidential Information it will, except where impractical for necessary
disclosures, for example in the event of a medical emergency, give reasonable
advance notice to the other party of such disclosure requirement and will use
good faith efforts to assist such other party to secure a protective order or
confidential treatment of such Confidential Information required to be
disclosed.
6.4 Limitation of Disclosure. The parties agree that, except as
otherwise may be required by applicable laws, regulations, rules or orders,
including without limitation the rules and regulations promulgated by the United
States Securities and Exchange Commission, and except as may be authorized in
this Section 6, no information concerning this Agreement and the transactions
contemplated herein shall be made public by either party without the prior
written consent of the other.
6.5 Publicity and SEC Filings. The parties agree that the public
announcement of the execution of this Agreement shall only be by one or more
press releases mutually agreed to by the parties. The failure of a party to
return a draft of a press release with its proposed amendments or modifications
to such press release to the other party within ten business (10) days of such
party's receipt of such press release shall be deemed as such party's approval
of such press release as received by such party. Each party agrees that it shall
cooperate fully and in a timely manner with the other with respect to all
disclosures to the Securities and Exchange Commission and any other governmental
or regulatory agencies, including requests for confidential treatment of
Confidential Information of either party included in any such disclosure.
7. Intellectual Property Rights.
7.1 Patent Rights. Except as expressly set forth in this Agreement,
including but not limited to rights and permissions implied in the appointment
of Baxter and its Affiliates as exclusive distributor(s) pursuant to Section 1.1
of this Agreement, Halozyme does not, by this agreement, either expressly or
impliedly, grant any other licenses to Baxter under any patents or other
intellectual property owned or controlled by Halozyme or under which Halozyme
has any rights. Halozyme warrants that it owns, controls or has licenses to all
intellectual property rights implied in the appointment of Baxter and its
Affiliates as exclusive distributor(s) pursuant to Section 1.1 of this
Agreement. Halozyme represents that it is not otherwise a party to any agreement
that would inhibit or prevent Halozyme from licensing or otherwise conveying any
of these intellectual property rights to Baxter. Halozyme warrants that the use
of the trademarks referenced in 7.2 below shall be delivered free of any claim
of any third party for any infringement of any trademark rights of such third
party.
7.2 Trademarks and Trade Names.
(a) Baxter shall not use any of Halozyme's trademarks, or any
xxxx or name confusingly similar thereto, as part of its corporate or business
name or in any other manner, except that (a) Baxter may identify itself as an
authorized distributor of Halozyme, (b) (i) if reasonably feasible, taking into
account the final size of the Product as determined by Baxter in good faith,
Baxter shall prominently xxxx on the Product vial, in addition to Xxxxxx'x own
trade
7
dress, any brand name of the applicable Product "Manufactured for Halozyme
Therapeutics, Inc., San Diego, California" and (ii) Baxter shall prominently
xxxx on the package insert and Product packaging "Manufactured for Halozyme
Therapeutics, Inc., San Diego, California", and (c) Xxxxxx shall not register
any trade xxxx or trade name (including any company name) which is identical to
or confusingly similar to or incorporates any trade xxxx or trade name which
Halozyme or any associated company owns or claims rights in.
(b) Halozyme hereby grants to Baxter an exclusive right in the
Territories for the term of this Agreement to use Halozyme's trademark "Enhanze
SC(TM)" solely for use with the distribution of the Product. Any other
use of Halozyme's trademarks shall be subject to written prior approval from
Halozyme. Within thirty (30) days after the Approval Date, Halozyme shall supply
Baxter with written guidelines concerning Halozyme's preferences and
restrictions for trade dress or trademarks used in the marketing, promotion or
distribution of the Product. Halozyme shall have the right to approve any trade
dress or trademarks used by Baxter with the marketing, promotion or distribution
of the Product, which approval shall not be unreasonably withheld. Such right of
Halozyme to approve shall be exercised by notifying Baxter in writing of
Halozyme's desire to approve such trade dress or trademarks. After such
notification, Baxter shall supply Halozyme with layouts and/or specimens of any
such trade dress or trade xxxx usage at least fifteen (15) business days prior
to any anticipated use of such. Halozyme shall have ten (10) business days to
review any such layouts and/or specimens, and shall be deemed to approve use of
such if Baxter is not notified in writing of Halozyme's objection to such use by
the end of the ten (10) business day period. Halozyme may suspend such right of
approval, without affecting its right to reactivate such right of approval, by
written notice to Baxter.
(c) Any goodwill associated with any trade marks affixed or
applied or used in relation to Products sold or otherwise distributed by Baxter
pursuant to this Agreement shall accrue to the sole benefit of Halozyme, except
to the extent that such goodwill is associated with any Baxter owned trademark
not specific to the Product. Nothing in this Agreement shall create an
obligation on Halozyme to register or otherwise maintain in force any
trademarks. However, if Halozyme decides not to maintain the trademark "Enhanze
SC(TM)", Baxter shall have the option as exclusive licensee under the
xxxx to obtain ownership of the trademark "Enhanze SC(TM)" and maintain
the xxxx. Halozyme shall notify Baxter of any such decision not to maintain the
trademark "Enhanze SC(TM)" at least thirty (30) days prior to any action
needed to maintain the xxxx in the Territory, and effect any documents necessary
for transfer of ownership of the xxxx if Baxter exercises the option. Nothing in
this Agreement shall create an obligation on Baxter to register or otherwise
maintain in force any trademarks. Upon termination of this Agreement, ownership
of any trademark registered by Baxter for use only in Product labeling or
advertising shall vest in Halozyme, and Baxter shall execute all documents
necessary to effect such transfer of ownership; however, this sentence shall not
apply to the trademark "Enhanze SC(TM)" if Halozyme decides not to
maintain the trademark, and Baxter exercises its option above. Upon expiration
of this Agreement under Section 8.1 (provided that this Agreement is not
extended by mutual written agreement of the parties) or termination of this
Agreement by Baxter under 8.2(a), Baxter shall have the option to purchase from
Halozyme any trademark used only in Product labeling or advertising, such option
being exercisable by written notice to Halozyme within thirty (30) days of such
expiration or termination of this Agreement. If Baxter exercised this option,
the Parties shall negotiate in good faith the terms of such purchase for at
least ninety (90) days. If, after the ninety (90) day period the parties have
not agreed to terms of such purchase, Baxter shall have a right of first refusal
on such
8
trademarks. Under this right of first refusal, Halozyme shall offer to Baxter
any such trademarks that are offered for sale, license, or transfer to any
non-Affiliate third party under terms which are the same as the offer to the
third party. Baxter shall have sixty (60) days to accept or reject such terms.
Despite any use of Xxxxxx'x general trade dress, trademarks or servicemarks
denoting Xxxxxx as the source of Product in connection with the packaging,
labeling, advertising, or promotion of Product, Halozyme shall have no license,
express or implied, to use such general trade dress, trademarks or service marks
after the termination of this Agreement.
7.3 Intellectual Property Infringement Litigation. Baxter shall
inform Halozyme immediately upon becoming aware of: (i) any infringements or
risk of infringements by a third party of Halozyme's intellectual property
(including but not limited to brands, trademarks, copyrights, and patents), and
(ii) any allegations of infringements or risk of infringements by the Products
of a third party's intellectual property or claims of such by a third party.
(a) In the event of any such infringement under (i), *** shall
allow *** of any claim of intellectual property right infringement by or against
a third party in *** shall not compromise, settle or negotiate or make any
statement on behalf ***, Baxter shall cooperate with *** with any such
infringement defense or prosecution.
(b) In the event of any allegations of infringement or risk or
infringement under (ii), the Party first having notice of an infringement claim
shall promptly notify the other Party in writing. The notice shall set forth the
facts of the infringement claim in reasonable detail. The party being sued or
threatened under (ii) *** shall consult with the other party, ***, (2) the other
party shall cooperate with such party to the extent allowed by law; and (3) such
party shall *** to the extent permitted *** an infringement claim under (ii),
including ***
(c) ***. In the event that the use, sale, offer for sale or
importation of a Product is alleged to infringe a Third Party Patent or a Third
Party trademark (collectively, "Third Party IP"), the Parties will cooperate to
*** for ***. If the Parties determine that *** is appropriate, and *** to such
Third Party IP ***, the Parties agree that *** shall be *** for ***, when such
Third Party IP ***, and that *** shall be *** for *** shall include a *** when
such Third Party IP ***. The Parties shall *** such Third Party IP ***.
7.4 Copyrights. Xxxxxx hereby acknowledges that Halozyme has
claimed, or may claim, copyright protection with respect to certain parts of the
Products and the labels, inserts and other materials regarding the Products.
Xxxxxx further acknowledges the validity of Halozyme's right to claim copyright
protection with respect to such items. Xxxxxx further acknowledges that Halozyme
has the exclusive right (to the exclusion of all others) to claim the copyright
protection with respect to all such items. Halozyme herein gives Xxxxxx express
permission to copy and distribute to its sales representatives Product
advertising, literature and other materials prepared by or on behalf of Halozyme
for the purpose of fulfilling Xxxxxx'x obligations under the Agreement.
8. Term and Termination.
8.1 Term and Renewal. This Agreement, and the obligations of the
parties hereunder, shall commence on the Effective Date and continue for the
life of the *** patents. Thereafter, the Agreement will be automatically
extended for additional one year periods until either
9
party notifies the other party in writing not less than twenty-four (24) months
prior of that party's intent to terminate the Agreement.
8.2 Termination for Cause.
(a) Except as otherwise provided in Section 9.2, below, either
party may terminate the Agreement upon or after the breach of any material
provision of the Agreement by the other party if the other party has not cured
such breach within sixty (60) days after notice thereof from the nonbreaching
party.
(b) Except as otherwise provided in Section 9.2 and 8.2(d),
below, Halozyme shall have the right to terminate this Agreement upon sixty (60)
days written notice to Xxxxxx if Xxxxxx receives notice that all regulatory and
commercial approvals to market the Product in a country in the Territory have
been obtained, and either (i) does not commence commercial sales within six (6)
months of such approval in such country, or (ii) discontinues or suspends sales
of the Product in such country for sixty (60) days; provided, however, that (A)
such occurrence was not a result of Halozyme's failure to supply API to Xxxxxx
or maintain regulatory approval, and (B) Xxxxxx has not resumed sales within the
sixty (60) day notice period; provided, further, that if Halozyme gives notice
to Xxxxxx under this Section 8.2(b) twice in any twelve (12) month period, then
Xxxxxx shall not have the right to cure under clause (B) above following such
second notice.
(c) Either party may terminate immediately in the event of the
insolvency of the other party or its inability to pay its debts in the ordinary
course of business or the appointment of a liquidator, receiver or
administrator.
(d) In the event of a bona fide allegation or claim of
infringement under Section 7.3 (ii), Xxxxxx shall have the option to suspend
distribution of Product (subject to the rights of Halozyme under Section
8.2(b)), or terminate this Agreement, by written notice to Halozyme.
(e) Xxxxxx shall have the right to terminate this Agreement by
giving 30 days advance written notice to Halozyme in the event that FDA approval
for the Product in the Territory is not obtained by Halozyme by December 31,
***.
(f) If Xxxxxx determines in good faith that continuing sales
in any country in the Additional Territory is not commercially reasonable, then
Xxxxxx shall give express written notice to Halozyme thereof, and on the date
thirty (30) days after such written notice, (i) such country shall be removed
from the Additional Territory, and (ii) the parties shall have no further rights
or obligations to each other with respect to such country (other than final
accounting, payments and audit rights and obligations for sales prior to the
date such country was removed from the Additional Territory).
8.3 Effect of Expiration and Termination. Expiration or termination
of the Agreement shall not relieve the parties of any obligation accruing prior
to such expiration or termination. The provisions of Sections 6, 7.2(c) and 9
shall survive the expiration or termination of the Agreement. Upon the
expiration or termination of the Agreement, Xxxxxx shall have the right to sell
the remaining stock of Products for a period of twelve (12) months following
such expiration or termination.
10
9. Miscellaneous.
9.1 Notices. All notices hereunder shall be delivered by facsimile
(confirmed by overnight delivery), or by overnight delivery with a reputable
overnight delivery service, to the following address of the respective parties:
If to Halozyme: Halozyme, Inc.
00000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 00
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: President
Fax: (000) 000-0000
Phone: (000) 000-0000
With a copy to: Xxxx Xxxx Xxxx & Freidenrich LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
If to Xxxxxx: Xxxxxx Healthcare Corporation
00 Xxxxxx Xxxxxx
Xxx Xxxxxxxxxx, XX 00000
Attn: General Manager
Fax: (000) 000-0000
Phone: (000) 000-0000
With a copy to: Xxxxxx Healthcare Corporation
Xxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
Phone: (000) 000-0000
Notices shall be effective on the day of receipt. A party may change its
address listed above by notice to the other party given in accordance with this
Section 9.1.
9.2 Force Majeure. Any delay in the performance of any of the duties
or obligations of either party hereto (except the payment of money), to the
extent caused by an event outside the affected party's reasonable control, shall
not be considered a breach of this Agreement, and unless provided to the
contrary herein, the time required for performance shall be extended for a
period equal to the period of such delay. Such events shall include without
limitation, acts of God; acts of public enemies; insurrections; riots;
injunctions; embargoes; labor disputes, including strikes,
11
lockouts, job actions, or boycotts; fires; explosions; floods; shortages of
material or energy; delays in the delivery of raw materials; acts or orders of
any government or agency thereof or other unforeseeable causes beyond the
reasonable control and without the fault or negligence of the party so affected.
The party so affected shall give prompt written notice to the other party of
such cause and a good faith estimate of the continuing effect of the force
majeure condition and duration of the affected party's nonperformance, and shall
take whatever reasonable steps are appropriate to relieve the effect of such
causes as rapidly as possible. If the period of nonperformance by Xxxxxx because
of force majeure conditions exceeds ninety (90) calendar days, Halozyme may
terminate this Agreement by written notice to Xxxxxx. If the period of
nonperformance by Halozyme because of force majeure conditions exceeds ninety
(90) calendar days, Xxxxxx may terminate this Agreement by written notice to
Halozyme.
9.3 Assignment. Neither party shall assign this Agreement or any
part hereof or any interest herein to any non-affiliated third party (or use any
subcontractor) without the written approval of the other party; provided,
however, that either party may assign this Agreement without such consent to an
Affiliate or in the case of a merger, consolidation, change in control or sale
of all or substantially all of the assets of the party seeking such assignment
or transfer and such transaction relates to the business covered by this
Agreement and the resulting entity assumes all of the obligations under this
Agreement. No assignment shall be valid unless the permitted assignee(s) assumes
all obligations of its assignor under this Agreement. No assignment shall
relieve any party of responsibility for the performance of its obligations
hereunder. Any purported assignment in violation of this Section 9.3 shall be
void.
9.4 Entire Agreement. The parties hereto acknowledge that this
Agreement, together with the Confidentiality Agreement signed by Halozyme and
Xxxxxx on August 14, 2003 (as amended to date) and the Letter (but only for
purposes of the definition of the Product), sets forth the entire agreement and
understanding of the parties and supersedes all prior written or oral agreements
or understandings with respect to the subject matter hereof. No modification of
any of the terms of this Agreement, or any amendments thereto, shall be deemed
to be valid unless in writing and signed by an authorized agent or
representative of both parties hereto. No course of dealing or usage of trade
shall be used to modify the terms and conditions herein.
9.5 Waiver. None of the provisions of this Agreement shall be
considered waived by any party hereto unless such waiver is agreed to, in
writing, by authorized agents of such party. The failure of a party to insist
upon strict conformance to any of the terms and conditions hereof, or failure or
delay to exercise any rights provided herein or by law shall not be deemed a
waiver of any rights of any party hereto.
9.6 Obligations to Third Parties. Each party warrants and represents
that this Agreement does not conflict with any contractual obligations,
expressed or implied, undertaken with any third party.
9.7 Independent Contractor. Xxxxxx and Halozyme are acting under
this Agreement as independent contractors and neither shall be considered an
agent of, or joint venturer with, the other. Unless otherwise provided herein to
the contrary, each party shall furnish all expertise, labor, supervision,
machining and equipment necessary for the performance of its
12
obligations hereunder and shall obtain and maintain all building and other
permits and licenses required by public authorities.
9.8 Governing Law. In any action brought regarding the validity,
construction and enforcement of this Agreement, it shall be governed in all
respects by the laws of the State of New Jersey, without regard to the
principles of conflicts of laws. The courts of the State of California shall
have jurisdiction over the parties hereto in all matters arising hereunder and
the parties hereto agree that venue shall be a state or federal court in
California.
9.9 Severability. If any term or provision of this Agreement shall
for any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof, and this Agreement shall be interpreted and construed as if
such term or provision, to the extent the same shall have been held to be
invalid, illegal or unenforceable, had never been contained herein.
9.10 Headings, Interpretation. The headings used in this Agreement
are for convenience only and are not part of this Agreement.
9.11 Counterparts. The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have each caused this
Exclusive Distribution Agreement to be executed by their duly-authorized
representatives as of the Effective Date above written.
HALOZYME, INC. XXXXXX HEALTHCARE
CORPORATION
By: /s/ Xxxxxxxx Xxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------- -------------------------------------
Name: Xxxxxxxx Xxx Name: Xxxxx X. Xxxxxxx, Xx.
Title: President and CEO Title: General Manager
13
