EXHIBIT 10.34
CONFIDENTIAL TREATMENT REQUESTED
Confidential Portions Of This Agreement
Which Have Been Redacted Are Marked
With Brackets ("[***]"). The Omitted Material
Has Been Filed Separately With The Securities
And Exchange Commission.
DISTRIBUTORSHIP AGREEMENT
This Agreement is entered into and effective as of December 12, 2001 by and
between Xxxxx XX, having its principal place of business at X-00000 Xxxxxxxxxx,
Xxxxxxx Xxxxxxxx of Germany (hereinafter: "BAYER").
And
First Horizon Pharmaceutical Corporation having its principal place of business
at 000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, XXX (hereinafter: "FIRST
HORIZON).
WHEREAS, BAYER and Zeneca Limited, UK had concluded on a Distributorship
Agreement on different strengths of a drug containing the active
ingredient Nisoldipine (INN) marketed under BAYER`s trademark Sular(R)
in the United States of America;
WHEREAS, AstraZeneca Limited, UK, the legal successor of Zeneca Limited -
hereinafter referred to as AZ - has decided, and - subject to certain
conditions - BAYER has agreed thereto, to divest its business
concerning the PRODUCTS to FIRST HORIZON; and
WHEREAS, the cooperation of the parties under this Distributorship Agreement
("AGREEMENT") is established with the intent of governing the exclusive
marketing, distribution, use and sales of Nisoldipine (INN) coat-core
tablets in the United States of America by FIRST HORIZON.
Now, therefore, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this AGREEMENT the following words, when written in capitals,
shall have the following meaning:
1.1 ACT shall mean the Federal Food Drug and Cosmetics Act of the
United States of America, United States Code Title 21, Chapter I, as amended.
1.2 AE(s) (adverse event) shall mean any untoward medical
occurrence in a patient or clinical investigation subject to whom a
pharmaceutical product has been administered and which does not necessarily have
to have a causal relationship with this treatment. AE can therefore be any
unfavorable and unintended sign (including an abnormal laboratory finding, for
example), symptom, or disease temporarily associated with the use of a medicinal
product, whether or not considered related to the medicinal product. [ICH;
Guideline on Clinical Safety Data Management: Definitions and Standards for
Expedited Reporting March1 , 1995; Federal Register Vol. 60, No. 40, p. 11285;
CPMP: Note for Guidance - "Clinical Safety Data Management) - Definitions and
Standards for Expedited Reporting 111/3375/93 - Final.]
1.3 AFFILIATE shall mean any business entity which directly or
indirectly controls, is controlled by, or is under common control with either
PARTY to this Agreement. A business entity shall be deemed to "control" another
business if it owns, directly or indirectly, in excess of fifty percent of the
outstanding voting securities or capital stock of such business entity or other
comparable equity or owner ship interest.
1.4 APPOINTMENT means BAYER'S appointment of FIRST HORIZON set
forth in Section 2.1.
1.5 cGMP means United States of America current Good Manufacturing
Practices as established from time to time by the FDA.
1.6 COMMERCIAL INFORMATION shall mean information relating to
sales forecasts, PRODUCTS orders, actual NET SALES, NET SALES payments (as
defined in Article 10.6, below), sample usage and similar information relating
to sales and marketing of FINISHED PRODUCTS as may be exchanged pursuant to this
AGREEMENT.
1.7 COMMERCIALLY REASONABLE EFFORTS shall mean efforts and
resources normally used by a Party for a compound or product owned by it or to
which it has rights, which is of similar market potential at a similar stage in
its product life, taking into account the competitiveness of the marketplace,
the proprietary position of the compound or product, the regulatory structure
involved, the profitability of the applicable products, and other relevant
factors.
1.8 DATE OF AGREEMENT shall mean the date first written above.
1.9 EFFECTIVE DATE means the date upon which the following
conditions have been satisfied: (i) First Horizon (or an AFFILIATE thereof)
consummates its acquisition of the assets of AZ relating to the PRODUCT and (ii)
the respective GOVERNMENTAL AUTHORITIES of the TERRITORY, including the Federal
Trade Commission and the FDA, have approved, to the extent required, the
transactions contemplated hereby. The PARTIES agree to provide copies of these
approvals to each other prior to the EFFECTIVE DATE and to inform AZ
accordingly.
1.10 EURO shall mean the Euro, the official currency of the
European Union.
1.11 FDA means the United States Food & Drug Administration.
1.12 FINISHED PRODUCTS shall mean the finished pharmaceutical
preparations for human use in cardiovascular indications containing ready for
sale PRODUCTS, as hereinafter defined and including samples thereof.
1.13 GOVERNMENTAL AUTHORITY shall mean (i) any domestic or foreign
national, federal, provincial, state, municipal or other government or body,
(ii) any international or multilateral body, (iii) any subdivision, ministry,
department, secretariat, bureau, agency, commission, board, instrumentality or
authority of any of the foregoing governments or bodies, (iv) any
quasi-governmental or private body exercising any regulatory, expropriation or
taxing authority under or for the account of any of the foregoing governments or
bodies, or (v) any domestic, foreign, international, multilateral, or
multinational judicial, quasi-judicial, arbitration or administrative court,
grand jury, tribunal, commission, board or panel.
1.14 INN shall mean International Non-Proprietary Name.
1.15 LAWS shall mean (i) all constitutions, treaties, laws,
statutes, codes, ordinances, orders, decrees, rules, regulations, and municipal
by-laws, whether domestic, foreign or international; (ii) all judgments, orders,
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writs, injunctions, decisions, rulings, decrees, and awards of any GOVERNMENTAL
AUTHORITY; and (iii) all policies, practices and guidelines of any GOVERNMENTAL
AUTHORITY; in each case binding on or affecting the PARTY referred to in the
context in which such word is used; and LAW shall mean any one of them.
1.16 NDA shall mean the New Drug Application filed with the FDA for
FINISHED PRODUCTS, as defined in the ACT and the REGULATIONS.
1.17 NET SALES shall mean the gross sales of the FINISHED PRODUCTS
in the TERRITORY by FIRST HORIZON, to unrelated third parties, including but not
limited to, pharmaceutical wholesalers, pharmacies, hospitals, hospital GPOs,
Health Maintenance Organizations, Preferred Provider Organization, Individual
Practice Associations, Pharmacy Services Administrative Organizations, Pharmacy
Benefit Companies, or dispensing physicians, less, as properly evidenced, any of
the following charges or expenses that are incurred in connection with the sales
of FINISHED PRODUCTS:
(I) any statutory or contractual liability for rebates to
be paid to any governmental entity including, but not limited to, rebates to be
paid pursuant to the Medicaid Rebate legislation and state and local government
rebate programs;
(II) cash discounts made at the rate in effect at the time
of sale;
(III) any adjustments accrued for: allowances or credits
for returned FINISHED PRODUCTS, free FINISHED PRODUCTS, damaged FINISHED
PRODUCTS, commercial rebates, or trade discounts, whether or not such commercial
rebates, or trade discounts are paid directly to the customer and any adjustment
granted for any brokerage fees paid;
(IV) the sum of two percent (2%) of gross sales to reflect
the cost of handling, distribution including freight, and insurance;
(V) any sales, use, excise or similar taxes or duties
included in the gross sales price involved.
1.18 PARTY (PARTIES) shall mean BAYER and/or FIRST HORIZON
1.19 PATENTS means those patents and patent applications covering
PRODUCTS and FINISHED PRODUCTS in the TERRITORY including, but not limited to,
those listed in Appendix 2, and any and all reissues, reexaminations,
extensions, substitutions, confirmations, registrations, revalidations,
additions, continuations, continuations-in-part or divisions of or to any of the
aforesaid patents or patent applications.
1.20 PRODUCTS shall mean the pharmaceutical preparation in bulk
tablets containing Nisoldipine (INN) as the sole active ingredient as specified
in Appendix 1 hereto.
1.21 PURCHASED AMOUNT means the amount of PRODUCTS purchased by
FIRST HORIZON from BAYER or a third party appointed by or affiliated with BAYER.
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1.22 REGULATIONS shall mean regulations and guidelines adopted or
promulgated pursuant to the ACT.
1.23 QUALITY AGREEMENT shall mean the Quality Assurance Agreement
to be entered into between BAYER and FIRST HORIZON prior to the EFFECTIVE DATE
and made an integral part of this AGREEMENT.
1.24 SERIOUS ADVERSE EVENT (SAE) shall mean any adverse drug
experience occurring at any dose that results in any of the following outcomes:
Death, a life-threatening adverse drug experience, inpatient hospitalization or
prolongation of existing hospitalization, a persistent or significant
disability/incapacity, or a congenital anomaly/birth defect. Important medical
events that may not result in death, be life-threatening, or require
hospitalization may be considered a serious adverse drug experience when, based
upon appropriate medical judgment, they may jeopardize the patient or subject
and may require medical or surgical intervention to prevent one of the outcomes
listed in this definition. Examples of such medical events include allergic
bronchospasm requiring intensive treatment in an emergency room or at home,
blood dyscrasias or convulsions that do not result in inpatient hospitalization,
or the development of drug dependency or drug xxxxx [00 XXX Parts 20, 310, 312,
314, and 600-Expedited Safety Reporting Requirements for Human Drug and
Biological Products; Federal Register Xxx. 00, Xx. 000, pp. 52237-52253;
Tuesday, October 7, 1997.]
1.25 SPECIFICATIONS shall mean the specifications for PRODUCTS
attached hereto as Exhibit 1.
1.26 TECHNICAL INFORMATION means proprietary materials, documents,
data and other scientific, medical and technical information, including all
pre-clinical and clinical testing and studies, including, but not limited to,
all data or information, whether or not published, regarding procedures, tests,
dosage, criteria for patient selection and safety and efficacy and other study
protocols, validation reports now owned or hereinafter acquired by BAYER, or
which BAYER does not own, but is entitled to transfer, or thereafter acquired
with the right to transfer by either PARTY and related to Nisoldipine, PRODUCTS
and FINISHED PRODUCTS to the extent relevant for the execution and performance
of the AGREEMENT. TECHNICAL INFORMATION shall comprise, but shall not be limited
to documentation and data required for the quality control of FINISHED PRODUCT,
as contemplated in the QUALITY AGREEMENT and the NDA including SPECIFICATIONS
and Packaging Information for FINISHED PRODUCTS. TECHNICAL INFORMATION shall not
include pricing, marketing or promotional information developed by FIRST HORIZON
except as may be required pursuant to Article 10.
1.27 TERRITORY shall mean the United States of America and its
territories and possessions, including Puerto Rico.
1.28 $US means United States Dollars, the official currency of the
United States of America.
ARTICLE 2
APPOINTMENT
2.1 BAYER hereby appoints FIRST HORIZON exclusively to have
PRODUCTS packaged and to sell and distribute FINISHED PRODUCTS in the TERRITORY
under the provisions, terms and conditions
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stipulated in this AGREEMENT and with the reservations made hereinafter. FIRST
HORIZON accepts the appointment and undertakes to safeguard BAYER's interests in
every reasonable respect and, in particular, to use COMMERCIALLY REASONABLE
EFFORTS to promote the sale of FINISHED PRODUCTS in the TERRITORY. BAYER during
the term of this AGREEMENT shall not directly or indirectly sell or cause any
third party to sell FINISHED PRODUCTS or PRODUCTS in the TERRITORY.
FIRST HORIZON undertakes to promote the FINISHED PRODUCTS with
COMMERCIALLY REASONABLE EFFORTS in a priority consistent with FIRST HORIZON's
practice for products coming from FIRST HORIZON'S own research and development.
2.2 BAYER hereby grants to FIRST HORIZON the exclusive right and
license, including the right to grant sublicenses, in the TERRITORY, to use,
have used, package, and have packaged, sell, and have sold PRODUCTS and FINISHED
PRODUCTS under the PATENTS and the TECHNICAL INFORMATION. In accordance with
Article 2.1 above, FIRST HORIZON shall promote, sell and distribute the FINISHED
PRODUCTS in the TERRITORY as a distributor, namely in its own name and on its
own account.
2.3 In consideration for the rights and the APPOINTMENT granted
under this Article 2, FIRST HORIZON shall pay to BAYER, within thirty (30) days
after EFFECTIVE DATE, the sum of Ten Millions Dollars ($US 10,000,000) (the
"Lump Sum Payment").
2.4 Following the initial transfer of TECHNICAL INFORMATION to
FIRST HORIZON from BAYER and/or AZ, the PARTIES shall thereafter during the term
of this Agreement mutually exchange available TECHNICAL INFORMATION.
ARTICLE 3
SALE OF OTHER PRODUCTS
3.1 While this Agreement is in effect, the representation and sale
of any pharmaceutical product containing Nisoldipine other than PRODUCTS or
FINISHED PRODUCTS pursuant to this AGREEMENT may be undertaken by FIRST HORIZON
in the TERRITORY only after having obtained BAYER's prior written approval in
each individual case, which consent shall not unreasonably be withheld or
delayed.
ARTICLE 4
NDA/TECHNICAL INFORMATION
4.1 During the term of this AGREEMENT each PARTY will update the
TECHNICAL INFORMATION as soon as such update is available to the respective
PARTY. The PARTIES shall discuss the legal consequences of such updates and
their impact to the NDA.
4.2 BAYER and FIRST HORIZON shall in advance communicate with each
other in respect of future clinical studies relating solely to the PRODUCT or
FINISHED PRODUCT in the TERRITORY. BAYER and FIRST HORIZON shall have the right
to comment on such future clinical studies of the other PARTY.
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4.3 Within thirty (30) days after the DATE OF AGREEMENT the
parties shall each appoint a medical affairs liaison ("the MEDICAL AFFAIRS
LIAISON") to communicate with each other regarding information required to be
furnished by each party pursuant to this Article 4.
ARTICLE 5
REPORTING OF ADVERSE EVENTS/RECALL
5.1 Adverse Event Reporting
Each PARTY shall ensure that, in the marketing of the PRODUCTS and the FINISHED
PRODUCTS all AE's and SAE's are recorded, investigated, summarized and reviewed.
With regard to information required pursuant to this Article, each
PARTY shall report to:
for BAYER: Xxxxx XX
Pharmaceuticals Business Group
Global Drug Safety (GDS)
Tel.: + 00-000-00-0000
Fax: + 00-000-00-0000
E-mail: xxx.xx-xxxxxxxxxxxxxx@xxxxx-xx.xx
for FIRST HORIZON: First Horizon Pharmaceutical Corporation
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000, XXX
Attn: Director of Regulatory Affairs
Tel.: x0-000-000-0000
Fax: x0-000-000-0000
In order that each PARTY may be fully informed of the hereinabove
referred experiences, each PARTY shall report hereunder to the other PARTY all
SAEs and AEs occurred anywhere in the world. Either PARTY may change its
information for notice under this Section by written notice to the other PARTY.
5.1.1 Serious Adverse Events (SAEs)
BAYER and FIRST HORIZON shall use the CIOMS-I form or Form FDA 3500A as
standard for expedited SAE reporting. Each PARTY shall use all reasonable
efforts to exchange SAE information by e-mail.
Clinical Trials
All SAEs shall be reported within such timeframe as to allow BAYER or
FIRST HORIZON sufficient time to evaluate, process and comply with worldwide
regulatory requirements; FIRST HORIZON shall report within two (2) calendar days
for fatal or life-threatening AE reports (initial and follow-up) and within four
(4) calendar days for all other serious AEs of receipt of the information by
FIRST HORIZON or any agent of FIRST HORIZON to BAYER. BAYER will send the
assessed report from these events to FIRST HORIZON within day six (6) from clock
start for fatal or life-threatening AEs and on day thirteen (13) for all other
SAEs for notification to the FDA of the TERRITORY. All other SAEs from in or
outside the TERRITORY will be notified by BAYER to FIRST HORIZON for information
only.
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Spontaneous reports
All SAEs shall be reported within such timeframe as to allow BAYER or
FIRST HORIZON sufficient time to evaluate, process and comply with worldwide
regulatory requirements; FIRST HORIZON shall report usually within four (4)
calendar days for SAE reports (initial and follow-up) of receipt of the
information by FIRST HORIZON or any agent of FIRST HORIZON to BAYER. BAYER will
send the assessed report to FIRST HORIZON on day thirteen (13) for notification
to the National Health Authorities. All other SAEs from in or outside the
TERRITORY will be notified by BAYER to FIRST HORIZON for information only.
5.1.2 Non-Serious Adverse Events
Clinical Trials
Non-serious AEs are sent after termination of the clinical trial within
the clinical trial report without delay, that is, immediately after completion
of the clinical trial report.
Spontaneous Reports
Non-serious AEs from spontaneous source are sent as separate
line-listing within the respective "Periodic Safety Update Report" (see 5.1.3.).
5.1.3 Periodic Safety Update Report (PSUR) and Safety Requests from
Health Authority
PSURs
BAYER and FIRST HORIZON shall use the ICH format as standard for the
compilation of PSURs [ICH Topic E 2 C; Clinical Safety Data Management: Periodic
Safety Update Reports for Marketed Drugs; Step 4, Consensus Guideline, 6
November 1996; Note for Guidance on Clinical Safety Data Management: Periodic
Safety Update Reports for Marketed Drugs (CPMP/ICH/288/95); Date for coming into
operation: 18 June 1997]. BAYER and FIRST HORIZON shall provide each other with
copies of all PSURs at time of submission. During the preparation of the report,
if significant safety issues arise, BAYER and FIRST HORIZON will telephone each
other in order to discuss these issues. The agreed reporting intervals for PSURs
are periodically according to the legal requirements by BAYER to submit a PSUR
in the TERRITORY and to ensure that FIRST HORIZON will be able to fulfill the
legal requirements for the NDA renewals in the TERRITORY in a timely manner.
Safety Requests from Health Authorities
BAYER and FIRST HORIZON shall immediately provide each other with
copies of the Health Authority requests. Proposed answers will be exchanged
between PARTIES before submission. The answer will be submitted by the PARTY who
initially received the request from the Health Authority.
5.1.4 Complaints and Regulatory Actions
Each PARTY shall promptly notify the other PARTY of any complaints
received by it in sufficient detail and in sufficient time to allow such PARTY
to comply with any and all applicable laws and regulations imposed upon it.
Without prejudice of the provisions of Article 4 hereinunder, BAYER shall also
advise FIRST HORIZON of any regulatory action (e.g. proposed labeling or other
registrational dossier changes, and recalls) which would affect any PRODUCT
and/or FINISHED PRODUCT in any country. These procedures may be modified from
time to time by written agreement of the PARTIES.
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5.1.5 FIRST HORIZON and BAYER agree to consult in general no less
frequently than annually on the need for changes in the particular appearance in
labeling of packaging and containers of FINISHED PRODUCTS or in the FINISHED
PRODUCT information supplied to end users, the medical profession or patients.
In addition to the annual review an emergency review can be implemented
at any time at the request of FIRST HORIZON or BAYER. FIRST HORIZON and BAYER
agree to negotiate in good faith to their mutual benefit with respect to such
changes and FIRST HORIZON shall promptly, in advance, communicate to BAYER the
basis for any proposed changes to the local label in the TERRITORY and BAYER
shall have the right to comment on any such changes in advance. In addition,
BAYER shall be able to propose changes to the local label in the TERRITORY for
FIRST HORIZON's consideration.
5.1.6 BAYER and FIRST HORIZON shall keep each other informed in
advance of any scheduled meetings or discussions with regulatory authorities
that involve product safety. Each PARTY shall cooperate with the other by
providing, promptly upon request, the appropriate statistics concerning FINISHED
PRODUCT use so as to permit calculations of increased frequency of AEs as
required by actual regulations and laws.
5.1.7 Articles 5.1.1 through 5.1.7 may be modified through written
agreement of the PARTIES to this AGREEMENT as necessary to assure that both
PARTIES are able to comply with worldwide regulations. Safety information
involving other formulations of Nisoldipine marketed by BAYER or agents of BAYER
anywhere in the world, e.g., immediate release shall be provided by BAYER if
required by the ACT and REGULATIONS (e.g. 21 CFR, part 312 and 314.80).
5.2 Product Recall
5.2.1 In the event that either PARTY decides for a medical reason at
its free discretion or the FDA requires a recall, or takes any other action, in
connection with FINISHED PRODUCTS promoted by FIRST HORIZON, FIRST HORIZON shall
effect such recall. However, if a recall of FINISHED PRODUCTS is to be effected
upon the discretion of either PARTY, the PARTY desiring to initiate the recall
shall thoroughly consult with the other PARTY prior to the recall, to the extent
reasonably possible under the circumstances.
5.2.2 In the event that any FINISHED PRODUCTS are recalled as a
result of an event that is attributable to an act or omission of BAYER, BAYER
shall bear all costs and expenses of such recall, including, without limitation,
expenses or obligations to third parties, the cost of notifying end users and
costs associated with shipment of any recalled FINISHED PRODUCTS from end users
and destruction of such FINISHED PRODUCTS.
5.2.3 In the event that any FINISHED PRODUCTS are recalled as a
result of an event that is attributable to an act or omission of FIRST HORIZON,
then FIRST HORIZON shall bear all costs and expenses of such recall, including,
without limitation, expenses or obligations to third parties, the cost of
notifying end users and costs associated with shipment of any recalled FINISHED
PRODUCTS from end users and destruction of such FINISHED PRODUCTS.
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5.2.4 In the event a recall of FINISHED PRODUCTS is necessary for
reasons attributable in part to each of the PARTIES, then FIRST HORIZON and
BAYER shall be responsible for a proportionate share of such recall costs to be
agreed between FIRST HORIZON and BAYER.
5.2.5 In the event of a recall of FINISHED PRODUCTS, each PARTY
shall cooperate in a manner which is appropriate and reasonable under the
circumstances. Each PARTY shall notify the other as soon as possible but in no
event later than (a) forty-eight (48) hours after receipt of any contract or
communication from the FDA or other governmental or regulatory authority in the
Territory and (b) five (5) business days after receipt of any contract or
communication with any other third party in the Territory which in any way
suggests the need for a recall of the Finished Product or otherwise calls into
question the quality or safety of the Finished Product.
5.3 FIRST HORIZON shall maintain complete and accurate records for
such periods as may be required by the ACT and the REGULATIONS, but in no event
for less than three (3) years for all FINISHED PRODUCTS sold by it, including
distribution data related to sales of FINISHED PRODUCTS to end users by lot
number; provided that in satisfying its obligations under this Section 5.3,
FIRST HORIZON may rely on the records of BAYER, as manufacturer, and other third
parties to the extent such reliance is reasonable.
5.4 FIRST HORIZON shall be entitled to discontinue its
distribution and sale of FINISHED PRODUCTS or to take other reasonable action,
in case that new toxicity and/or safety findings or side effects of PRODUCTS or
FINISHED PRODUCTS shall occur that are so severe as to warrant such
discontinuation or other action. If FIRST HORIZON deems it necessary to stop
marketing FINISHED PRODUCTS in the TERRITORY because of the reasons mentioned
above, the PARTIES will analyze the situation and will try to find an amicable
solution. If, however, BAYER does not reasonably agree with FIRST HORIZON's
decision to discontinue permanently the distribution of FINISHED PRODUCTS, FIRST
HORIZON, if requested by BAYER, will use COMMERCIALLY REASONABLE EFFORTS to sell
its rights under this AGREEMENT including the NDA in the TERRITORY without any
charge to BAYER. BAYER will indemnify FIRST HORIZON for all loss, damage, cost
or expense reasonably incurred by FIRST HORIZON, including reasonable attorneys'
fees, arising out of or relating to PRODUCTS or FINISHED PRODUCTS manufactured,
marketed or sold by BAYER or a partner of BAYER in the TERRITORY after receipt
of FIRST HORIZON's notice of discontinuation.
5.5 Except as may be expressly provided in this Agreement
including without limitation any indemnification obligations hereunder, no claim
for compensation, losses or damages including incidental or consequential
damages may be made between the PARTIES hereto under this AGREEMENT as a result
of any act arising under this Article 5.
ARTICLE 6
SUPPLY AND PURCHASE
6.1 FIRST HORIZON shall purchase from BAYER and BAYER shall sell
to FIRST HORIZON FIRST HORIZON's requirements according to FIRST HORIZON's
orders of PRODUCTS.
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6.2 The PRODUCTS shall be manufactured, stored and shipped by
BAYER in accordance with all applicable LAWS and in accordance with the
SPECIFICATIONS and cGMP. BAYER represents and warrants that the SPECIFICATIONS
comply in all material respects with all applicable FDA rules and regulations.
Except as required by any appropriate GOVERNMENTAL AUTHORITY, such
SPECIFICATIONS shall remain the same throughout the term of this Agreement
unless any change thereof is mutually agreed to in writing by both PARTIES
hereto and approved by the FDA and any other appropriate GOVERNMENTAL AUTHORITY.
The PARTIES will report such change as required by the FDA and/or any
GOVERNMENTAL AUTHORITY of the TERRITORY. Unless otherwise specifically required
by LAW, all such changes to the SPECIFICATIONS shall be approved in writing by
each of the PARTIES at least sixty (60) days prior to their implementation.
6.3 Subject to Section 6.4, in the case where BAYER selects a
third party to manufacture, analyze or store PRODUCTS, BAYER will commit such
third party to the supply provisions of this AGREEMENT and the QUALITY AGREEMENT
and shall be fully responsible for the proper compliance of such entity.
6.4 In case of BAYER's intended election of a third party for the
manufacture, analysis or storage of PRODUCTS for use in the TERRITORY this
election shall be executed only following consultation with and written approval
of FIRST HORIZON, which approval shall not unreasonably be withheld; provided,
however, that any such third party must provide FIRST HORIZON, prior to
undertaking any responsibility from BAYER, with evidence, reasonably
satisfactory to FIRST HORIZON, that it has obtained any and all FDA and other
GOVERNMENTAL AUTHORITY approvals necessary to provide any of the services to be
delegated to it by BAYER.
ARTICLE 7
FORECASTS AND PURCHASE ORDERS
7.1 BAYER, agrees to manufacture and supply such quantities of the
PRODUCTS as are specified in the Despatch List submitted by FIRST HORIZON in
accordance with Article 7.5.
7.2 On the EFFECTIVE DATE and thereafter during the first ten (10)
working days in each calendar month FIRST HORIZON shall provide BAYER with a
forecast of FIRST HORIZON's requirement for each presentation of the PRODUCTS,
including resale and sample quantities, in respect of each of the following
twelve (12) months. BAYER shall use all reasonable endeavors to meet FIRST
HORIZON's request and in any event shall give notice to FIRST HORIZON within
thirty four (34) days of receipt of the forecast of its ability to meet the
forecast.
During the first two (2) weeks of July in each calendar year FIRST
HORIZON shall submit to BAYER its non binding midterm forecast of FIRST
HORIZON's estimated requirement for each presentation of the PRODUCTS for the
following [five (5) years] or the remaining portion of this AGREEMENT, whichever
is shorter. Such annual forecast will be broken down to calendar quarters for
the calendar year to follow.
7.3 If FIRST HORIZON wishes to increase its requirements of the
PRODUCTS between agreed forecasting updates beyond those limits referred to as
'OP' and binding in Article 7.5 or below those referred to in Article 7.5 under
'FP' and 'PL', FIRST HORIZON shall provide BAYER with an ad hoc revision to
forecast outlining FIRST HORIZON's new requirements. BAYER shall use its
COMMERCIALLY REASONABLE EFFORTS but is not committed to meet FIRST HORIZON's
request and in any event shall give notice to
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FIRST HORIZON within two (2) weeks of receipt of the ad hoc revision to forecast
of its ability to meet the new requirement.
7.4 FIRST HORIZON respects the need to ensure manufacturing
stability at BAYER and undertakes to provide a schedule (the "Despatch List")
with clearly defined manufacturing orders, including, but not limited to,
delivery dates, delivery destinations, shipping instructions and any special
handling requests. The Despatch List will also identify the following:
'OP' Open Manufacturing orders required for delivery in the following four
(4) months. These orders are fixed.
'FP' Firm Planned orders scheduled for delivery in months five (5), six (6)
and seven (7), to follow. These are orders which have high probability of
remaining firm at subsequent updates, eventually becoming 'OP' orders. FIRST
HORIZON shall be obligated to purchase at least 70% of its forecast 'FP' orders
and BAYER shall be obligated to supply up to 130% of such orders unless
otherwise agreed.
'PL' Planned Orders scheduled for delivery in months eight (8), nine (9),
ten (10), eleven (11) and twelve (12). These are provisional orders which are
likely to materialize as 'FP' orders but the quantity and timing may be
different at each scheduled update. FIRST HORIZON shall be obligated to purchase
at least 50% of its 'PL' orders and BAYER shall be obligated to supply up to
150% of such orders, unless otherwise agreed.
7.5 BAYER shall deliver FIRST HORIZON's requirements of PRODUCTS
to FIRST HORIZON nominated delivery points within the period defined and
confirmed by BAYER as 'OP' according to Article 7.5 above.
7.6 BAYER shall schedule its production to enable BAYER to deliver
to FIRST HORIZON's requirements of the PRODUCTS on or before the delivery date
as notified in the relevant Despatch List mentioned in Article 7.5 above and
confirmed by BAYER according to Articles 7.3 and 7.4.
7.7 BAYER shall regard each "OP" manufacturing order as notified
in the relevant Despatch List mentioned in Article 7.5 above to be a firm
purchase order of FIRST HORIZON's requirements. Orders in respect of PRODUCT to
be used for samples shall be separately identified from orders of PRODUCT for
resale.
7.8 FIRST HORIZON shall express its requirements to BAYER [in
thousands ("000's) of tablets and kilograms] of PRODUCT (one kg representing an
amount of tablets of each presentation of PRODUCT as determined in Appendix 3).
Shipments will be made by BAYER only on the basis of the kg-amount indicated by
FIRST HORIZON.
7.9 In case BAYER cannot, e. g. due to FORCE MAJEURE (as defined
in Article 21.1), fulfill 'OP' or 'FP' orders placed by FIRST HORIZON within
FIRST HORIZON's forecast to the full extent or in the delivery time agreed,
BAYER shall use all COMMERCIALLY REASONABLE EFFORTS to fulfill such orders to
the maximum extent possible such that manufacture of PRODUCTS is accorded at
least as much significance by BAYER as if PRODUCTS were to be manufactured and
sold solely for BAYER's account. Such efforts shall include, but shall not be
limited to, allocating such raw materials or manufacturing capacity as may be
available to BAYER pro rata among all products manufactured by BAYER at the site
at which the PRODUCTS are manufactured based upon previous usage of such raw
materials or manufacturing capacity in the preceding
11
twelve (12) months or in the case of inability to perform during the first
twelve months of this AGREEMENT, based upon forecasted usage.
ARTICLE 8
SHIPPING TERMS/NON-CONFORMING PRODUCTS
8.1 All shipments of PRODUCTS shall be made by BAYER CIF to a
destination nominated by FIRST HORIZON(INCOTERMS 2000).
8.2 BAYER shall provide to FIRST HORIZON at the time of each
shipment of PRODUCTS a certificate of analysis as specified in the QUALITY
AGREEMENT for each batch of PRODUCTS shipped.
8.3 Non-Conforming PRODUCT
8.3.1 FIRST HORIZON shall inspect each shipment of PRODUCT
received hereunder as soon as practicable following receipt thereof. FIRST
HORIZON shall be deemed to have accepted delivery of the PRODUCT in good order
and condition, unless FIRST HORIZON has notified BAYER in writing of any short
delivery or nonconformity in respect of a shipment of PRODUCT with thirty (30)
days following receipt of same. Notwithstanding the foregoing, in the case of
any nonconformity which is not readily apparent or discoverable upon reasonable
inspection within such thirty (30) day period, any claim of nonconformity with
respect thereto shall not be deemed waived and delivery of the PRODUCT shall not
be deemed to have been accepted if FIRST HORIZON notifies BAYER as soon as
practicable, but no later than fifteen (15) days, following the date on which
FIRST HORIZON learns of such nonconformity.
8.3.2 Any claim of nonconformity hereunder shall be
accompanied by a report of analysis of the allegedly nonconforming PRODUCT,
which report shall be prepared by or on behalf of FIRST HORIZON. If, after
analyzing a sample of such PRODUCT, BAYER, confirms FIRST HORIZON's claim of
nonconformity, BAYER shall, replace the nonconforming PRODUCT with conforming
PRODUCT at BAYER's expense. Pursuant to written directions from BAYER, FIRST
HORIZON shall either return the nonconfirming PRODUCT to BAYER, or destroy same,
in each case, at BAYER's expense. If BAYER's analysis does not confirm FIRST
HORIZON's claim of nonconformity, the PARTIES shall commence good faith
discussions with a view to resolving the issue. In the event the issue cannot be
resolved within thirty (30) days following the start of such discussions, a
sample of the PRODUCT in dispute shall be submitted to an independent
laboratory, mutually accepted by the PARTIES, for testing. The results of such
testing shall be binding upon the PARTY. The PARTY whose assertion as to the
PRODUCT in question was not borne out by the results of the testing by the
independent laboratory shall bear all costs relating to such testing.
8.3.3 Notwithstanding anything to the contrary contained in
this Article 8, BAYER's warranties and indemnification obligations hereunder for
latent defects of PRODUCTS shall survive the failure by FIRST HORIZON to reject
any shipment of PRODUCT.
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[***] - CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 9
PURCHASE PRICE/PAYMENT
9.1 The purchase price per tablet of PRODUCTS ordered by FIRST
HORIZON (hereinafter "PRICE") shall be initially set by the PARTIES and shall be
in effect for PRODUCTS ordered for delivery to FIRST HORIZON on a calendar year
basis. The PRICE shall be paid in Euros. The PRICE is determined by the PARTIES
on the basis of estimated NET SALES of FINISHED PRODUCTS.
9.2
9.2.1 The PARTIES agree that until December 31st, 2003, the
PRICE for PRODUCTS shall be fixed at Euro [***] per tablet. Thereafter, the
PRICE for PRODUCTS shall be the greater of EURO [***] per tablet or [***] of NET
SALES, as determined for the 12-month-period from December 1 to November 30th of
the preceding calendar year (hereinafter MEASUREMENT PERIOD) for which the
Purchase Price is being set, divided by the number of tablets sold in the
MEASUREMENT PERIOD, but only if the resulting price is more than five (5)%
greater than EURO [***]; provided, however, that in the event a generic
equivalent to the PRODUCTS has been introduced or is expected to be introduced
in the forecasted calendar year, then the PARTIES shall meet and renegotiate the
Purchase Price in good faith.
9.2.2 FIRST HORIZON shall, by January 15th of 2004 and
thereafter by January 15th of each succeeding calendar year, provide BAYER the
NET SALES price per tablet of the MEASUREMENT PERIOD. together with an
explanation of such calculation.
9.2.3 Unless BAYER raises significant complaints for such
calculation within fourteen (14) days of receipt thereof, such NET SALES price
calculation shall be the basis for the PRICE in the calendar year following the
MEASUREMENT PERIOD. If no agreement can be reached between the PARTIES on such
calculation on the NET SALES price, it is agreed that half of the difference
between the current PRICE and the new estimated NET SALES price provided by
FIRST HORIZON shall be added to the current PRICE and shall prevail for the
following year.
9.2.4 The new PRICE shall be effective on a calendar year
basis.
9.3 The PRICE shall never be below Euro [***] per tablet of
PRODUCTS and is hereinafter referred to as the FLOOR PRICE (except as may be
agreed to by the PARTIES pursuant to the last proviso of Section 9.2.1).
9.4 If BAYER, in its reasonable judgment, determines that an audit
of FIRST HORIZON's books and records relevant to NET SALES is necessary to
verify the payments made by FIRST HORIZON as provided above, then BAYER's
designee, provided such designee is (i) a chartered public accountant and (ii)
reasonably acceptable to FIRST HORIZON, shall have the right, at BAYER's cost
and after reasonable notice to FIRST HORIZON, to perform an audit of the
relevant books and records of FIRST HORIZON relating to the PRODUCTS once each
year. Before beginning such audit, BAYER's designee shall execute an
undertaking, in a form reasonably acceptable to FIRST HORIZON, providing that
such auditor shall keep strictly confidential all information reviewed during
such audit, provided that it may disclose to BAYER its conclusions regarding
13
[***] - CONFIDENTIAL TREATMENT REQUESTED
any payments owed to or by BAYER. FIRST HORIZON shall receive a copy of such
auditor's report promptly after it is completed. If such auditor determines that
payments are owed to BAYER, FIRST HORIZON shall pay net the additional amounts
and the costs and expenses of the BAYER designee within 30 days of the date such
auditor's written report is delivered to FIRST HORIZON. If the auditor
determines that FIRST HORIZON's payments are in excess of those required under
this AGREEMENT, BAYER shall remit the difference net to FIRST HORIZON within
thirty (30) days of the date such auditor's report is delivered to BAYER.
9.5 The PRICE for PRODUCTS shall be paid by FIRST HORIZON against
invoices supported by shipping documents and such payments will be made net
within sixty (60) days after receipt of invoice.
9.6 In the event of late payment of all or part of the PRODUCTS
invoiced by BAYER to the FIRST HORIZON an interest for late payment at an
annualized rate of five (5) percentage points above the European Inter Bank
Offering Rate (EURIBOR) of the unpaid price or part of such price shall be
automatically due and become payable by the FIRST HORIZON without further
notice.
9.7 Success Fee
9.7.1 Should the NET SALES during any 12-month period
within the term of the AGREEMENT surpass US$ [***] FIRST HORIZON shall pay a
one-time success fee of US$ 10,000,000 (ten million) to BAYER. Each calendar
month FIRST HORIZON shall provide BAYER with a monthly report of NET SALES
within forty-five (45) days following each calendar month. Such report shall
also cover the NET SALES of the past 12 month period to verify whether the
payment stipulated according to this Article 9.6.1 is due. Such payment shall be
due within fifteen (15) days following the receipt of the first monthly report
of NET SALES of the past twelve months above US$ [***].
9.7.2 FIRST HORIZON is only entitled to withhold from the
LUMP SUM PAYMENT and the success fee payable to BAYER under Article 9.7.1 the
taxes levied or assessed thereon in as far as BAYER shall receive a tax-credit
for such payments in the Federal Republic of Germany.
FIRST HORIZON shall provide BAYER as soon as reasonably practicable
with certified tax receipts required by the German tax authorities for the taxes
deducted from the payments hereunder and paid to the tax authority.
Each PARTY undertakes to cooperate with the other PARTY to achieve
within the regulatory provisions being applicable the tax arrangements which are
most favorable for both PARTIES.
9.7.3 In no event shall FIRST HORIZON be obligated to pay
BAYER any amounts in connection with the sale of inventory of FINISHED PRODUCTS
or PRODUCTS which FIRST HORIZON acquired from AZ.
14
[***] - CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 10
WARRANTED MINIMUM PURCHASES
10.1 FIRST HORIZON commits itself to purchase from BAYER the
following minimum quantities of PRODUCTS for packaging into FINISHED PRODUCTS
for commercial sale equivalent to the total annual value according to the PRICE
(as determined in Article 9) in each 12-month period commencing with the month
(which first month shall consist of any partial month in which the first
commercial sale takes place plus the entire following month) of the first
commercial sale of PRODUCT by FIRST HORIZON (hereinafter referred to as
COMMERCIAL YEAR):
COMMERCIAL YEAR 1 2 3 4 5
--------------------- --------- ---------- ---------- ---------- ----------
Total paid amount for [***] [***] [***] [***] [***]
PRODUCTS purchased
from BAYER in USD
PURCHASED AMOUNTS in any COMMERCIAL YEAR which are in excess of the
foregoing minimum purchases of PRODUCTS for such COMMERCIAL YEAR may, at FIRST
HORIZON's option, be applied to satisfy the minimum purchase requirements for
subsequent years(s).
10.2 In the event FIRST HORIZON's PURCHASED AMOUNTS in any of the
given years should fall short of the warranted figures above, the PARTIES within
45 days following the expiry of the respective year shall convene and shall
analyse the reasons for such shortfall and any strategies to regain performance.
In determining whether FIRST HORIZON has satisfied its obligations to purchase
minimum quantities of PRODUCT, both PARTIES shall discuss in good faith the
amount of credit, if any, to be given to FIRST HORIZON against the minimum
purchase requirements set forth in Article 10.1 for COMMERCIAL YEAR 1 for the
inventory levels of PRODUCTS and FINISHED PRODUCTS that FIRST HORIZON purchased
from AZ based upon historical inventory levels consistent with ordinary course
of business. For avoidance of doubt, unless FIRST HORIZON has failed to use
COMMERCIALLY REASONABLE EFFORTS to promote the sale of FINISHED PRODUCTS, such
shortfall of sales shall not be deemed to be a breach of this AGREEMENT.
10.3 Subject to Section 10.4, in the event that FIRST HORIZON'S
PURCHASED AMOUNTS in any of the given years should fall short of the minimum
purchases as contemplated in the preceding Article 10.1, FIRST HORIZON shall pay
to BAYER the difference between the sum of purchases of PRODUCTS actually made
and the minimum purchases as defined in Article 10.1.
Such payment shall be due to BAYER within six (6) weeks following the
lapse of any of the given years.
10.4 FIRST HORIZON's commitment in Article 10.1 is contingent upon:
(I) BAYER's compliance with all material terms of this
AGREEMENT;
(II) BAYER fulfilling all FIRST HORIZON supply orders
pursuant to the terms hereunder,
(III) the FINISHED PRODUCTS not being withdrawn from the
TERRITORY;
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[***] - CONFIDENTIAL TREATMENT REQUESTED
(IV) no unexpected and significant deterioration in the
demand for FINISHED PRODUCTS occurring due to events beyond the reasonable
control of FIRST HORIZON including, but not limited to, the introduction of a
generic equivalent to the FINISHED PRODUCT;
(V) there not having been any recall of the PRODUCT or
FINISHED PRODUCT.
ARTICLE 11
NEW FORMS OF PRODUCTS
11.1 If, during the term of this AGREEMENT, BAYER plans to
introduce inside or outside the TERRITORY a new form of products which contains
Nisoldipine, BAYER shall notify FIRST HORIZON of its plans to introduce such new
form and, unless BAYER is legally (as opposed to contractually) prevented to
provide an offer, FIRST HORIZON shall be entitled to distribute such new form in
the TERRITORY on terms to be negotiated in good faith by the PARTIES. If the
PARTIES are not able to negotiate terms agreeable to both within six (6) months
of BAYER's first notification to FIRST HORIZON, and FIRST HORIZON is not then in
compliance with the minimum purchase requirements set forth in Article 10 above,
BAYER shall be free to offer such PRODUCTS to third parties on terms no more
favorable to such third party than have been previously offered to FIRST
HORIZON.
11.2 FIRST HORIZON may, at its option, but with the express prior
written approval of BAYER, which will not be unreasonably withheld, finance
clinical trials to obtain FDA-approval for new cardiovascular indications for
the PRODUCTS (for example, angina). Should FIRST HORIZON receive a NDA-approval
for a new indication, then FIRST HORIZON shall be entitled to deduct from its
annual payments to BAYER in each of the five calendar years following such
approval, (i) ten percent (10%) of the reasonable external costs incurred by
FIRST HORIZON in obtaining such approval (as evidenced by invoices from third
parties) ("External Costs") plus, (ii) an additional 2.5% of such External
Costs (intended to compensate FIRST HORIZON for internal costs), provided that
the maximum deduction by FIRST HORIZON in any year shall be limited to
$[***]. The data created by FIRST HORIZON hereunder shall form TECHNICAL
INFORMATION to which BAYER will have access, and under which BAYER will acquire
a perpetual license with the right to sublicense, free of any charge, for use
outside the TERRITORY.
ARTICLE 12
SAMPLES/PACKAGING LOSSES
12.1 Any quantities of PRODUCTS shipped by BAYER and used by FIRST
HORIZON for sampling in the TERRITORY shall be sold by BAYER to FIRST HORIZON at
a price to be determined separately with the amounts.
12.2 Packaging
16
12.2.1 BAYER agrees to cover any losses, up to a maximum of 2.5%
(two point five percent) of the PRODUCTS, which FIRST HORIZON incurs during
packaging of PRODUCTS to FINISHED PRODUCT in a calendar year provided FIRST
HORIZON properly evidences such losses. Together with the calculation to be
given to BAYER according to Article 9.2.2 FIRST HORIZON will substantiate the
losses of production it incurred in the preceding year and the reasons for such
losses. The losses shall be accounted for in a reconciliation process to be
agreed between the PARTIES.
12.2.2 Any packaging losses exceeding the percentage above will be
fully born and absorbed by FIRST HORIZON. FIRST HORIZON however may purchase
PRODUCTS to recover such additionally evidenced losses by purchasing PRODUCTS
from BAYER at the price prevailing for samples, as referred to above in Article
12.1, provided however such additional losses do not exceed (5%) five percent
of the total quantity of PRODUCTS which FIRST HORIZON packages into FINISHED
PRODUCTS during a calendar year. However; during the first year after launch of
FINISHED PRODUCT such allowance shall be increased to (7.5%) seven point five
percent.
ARTICLE 13
CONFIDENTIALITY
13.1 During the term of this AGREEMENT and for a period of five (5)
years following its termination, the PARTIES shall each hold in confidence all
COMMERCIAL INFORMATION and TECHNICAL INFORMATION received from the other PARTY
shall have first given the other PARTY hereunder or under the Confidentiality
Agreement dated December 4th, 2001 (which is hereby terminated insofar as such
agreement relates specifically to the TERRITORY) and any other confidential
research, development or business information which may be received from the
other PARTY related to the subject matter of this AGREEMENT and shall use the
same only for the purpose of this AGREEMENT, except for (and subject to the
express provisions of this AGREEMENT otherwise)
(A) information which must be disclosed to competent
government agencies;
(B) information which is or becomes part of the public
domain through no fault of the recipient or its AFFILIATES;
(C) information which was known by the recipient as shown
by the written records of the recipient at the time of its disclosure to the
recipient hereunder;
(D) information which is disclosed with the prior written
approval of the supplier of such information;
(E) information which becomes known to a PARTY from a
source other than the other PARTY hereunder without breach of this AGREEMENT by
the recipient, provided that such other source has the right to disclose such
information;
17
(F) information which is disclosed pursuant to the order
or requirement of a court, administrative agency, or other governmental body
provided, however, the disclosing PARTY reasonable notice of such order so as to
allow such other PARTY an opportunity to seek a protective order or similar
relief with respect to the information required to be disclosed; and
(G) information which is independently developed by the
recipient as shown by the written records of the recipient.
13.2 BAYER shall ensure that COMMERCIAL INFORMATION is not
disclosed to employees or agents of BAYER or its AFFILIATES in the TERRITORY,
including Bayer Corporation, which employees have marketing or strategic
responsibility for BAYER's products sold in the TERRITORY under the name Adalat
CC, provided, however, BAYER shall be permitted to disclose, on a need to know
basis, to such employees of BAYER or direct affiliates, net proceeds to BAYER
under this AGREEMENT.
ARTICLE 14
PRODUCT LIABILITY
14.1 BAYER shall indemnify and hold harmless FIRST HORIZON, its
AFFILIATES and officers, agents, directors, employees, attorneys,
representatives, successors and assigns (collectively "FIRST HORIZON
INDEMNITEES") from and against any and all damages, liabilities, settlement
costs, expenses, defense costs and reasonable attorney's fees resulting from
claims or actions for death or personal injury arising from, or relating to the
PRODUCTS or FINISHED PRODUCTS and which are due to:
(I) the negligent acts or omissions of BAYER or any third
party subcontractor of BAYER; or
(II) the willful misconduct of BAYER or any third party
subcontractor of BAYER; or
(III) any breach by BAYER or any third party subcontractor
of BAYER of its obligations pursuant to this AGREEMENT or the QUALITY AGREEMENT
provided however, that the FIRST HORIZON INDEMNITEES shall permit BAYER's
attorneys, at BAYER's cost and upon BAYER'S acknowledgement of its
indemnification obligations, to handle and control the defense and settlement of
any claims or suits covered by this indemnity clause. The FIRST HORIZON
INDEMNITEES shall provide reasonable cooperation to BAYER in the defense of any
such claims or suits, including, but not limited to, affording BAYER complete
access to all relevant records. If any FIRST HORIZON INDEMNITEES receive notice
of any such claims or complaints, they will promptly notify BAYER thereof.
Nothing herein shall prevent the FIRST HORIZON INDEMNITEES from retaining
counsel of their choice, at their expense, to monitor the defense, trial or
settlement of any indemnified matter and BAYER will reasonably cooperate with
such counsel.
14.2 If a claim is brought by FIRST HORIZON against BAYER under
Section 14.1 such claim in no event shall contain claims for FIRST HORIZON's own
consequential or indirect consequential damages (e.g. loss of profit). Such
claims hereby are expressly excluded between the PARTIES.
18
ARTICLE 15
WARRANTIES/INDEMNIFICATION
15.1 FIRST HORIZON represents and warrants that the execution,
delivery and performance of this AGREEMENT is within the corporate powers of
FIRST HORIZON and has been duly authorized by all necessary corporate action.
BAYER represents and warrants that the execution, delivery and performance of
this AGREEMENT is within the corporate power of BAYER and has been duly
authorized by all necessary corporate action. Each PARTY represents and warrants
to the other PARTY that this AGREEMENT constitutes a valid and binding AGREEMENT
between it and the other PARTY.
15.2 FIRST HORIZON represents and warrants that there are no legal
or contractual prohibitions or impediments preventing it from entering into or
performing under this AGREEMENT. BAYER represents and warrants that there are no
legal or contractual prohibitions or impediments preventing it from entering
into and performing under this AGREEMENT.
15.3 FIRST HORIZON and BAYER each undertakes to the other (during
the manufacturing, shipping, packaging, marketing and sale of PRODUCTS and/or
FINISHED PRODUCTS as respectively appropriate) to strictly adhere to all
applicable LAWS and regulations with respect to the PRODUCTS and FINISHED
PRODUCTS including, without limitation, the ACT and the REGULATIONS.
15.4 BAYER represents and warrants that as of the DATE OF
AGREEMENT:
(I) there is neither inside nor outside the TERRITORY any
action, suit, investigation or proceeding, pending or threatened against BAYER
relating to the manufacture, sale or use of the PRODUCTS or the FINISHED
PRODUCTS; and
(II) the FINISHED PRODUCTS and the PRODUCTS have received
all necessary approvals under the ACT and REGULATIONS for sale in the TERRITORY.
15.5 Patents
15.5.1 BAYER represents and warrants that, as of the DATE OF
AGREEMENT, to its actual knowledge after due investigation, there are, and as of
the EFFECTIVE DATE there will be, no patents owned by others or proprietary
rights of others that would be infringed or violated by:
(I) BAYER's sale of the PRODUCTS to FIRST HORIZON as
herein provided; or
(II) FIRST HORIZON's exercise of its rights under the
APPOINTMENT or its packaging, use or sale of the FINISHED PRODUCTS, within the
TERRITORY.
19
(III) BAYER is and shall be, subject to the provisions of
this Agreement, the sole and exclusive owner of the PATENTS all of which are and
shall be unencumbered by any liens, security interest or other rights or claims
of any third party, and no other person or entity, other than FIRST HORIZON as
herein provided, has or shall have any claim of ownership with respect to the
PATENTS.
(IV) As of the date hereof, Appendix 2 contains a full and
complete list of the PATENTS.
(V) BAYER knows of no fact which does or could materially
adversely affect the rights granted to FIRST HORIZON hereunder, including, but
not limited to, the rights conferred by the APPOINTMENT.
(VI) Except as expressly set forth herein, BAYER makes no
other warranties with respect to the PATENTS, the TECHNICAL INFORMATION or
otherwise.
15.6 Each of the representations and warranties made by the PARTIES
as set forth in Section 15.1 through 15.5 shall be reconfirmed by the PARTY
making it as of the EFFECTIVE DATE, such reconfirmation to be evidenced by a
certificate to such effect executed by a duly authorized officer and delivered
to the other PARTY on the EFFECTIVE DATE.
15.7 FIRST HORIZON shall indemnify and hold harmless BAYER, its
AFFILIATES, and their respective officers, agents, employees, directors,
attorneys, representatives, successors and assigns (collectively, "BAYER
INDEMNITEES") from and against any and all damages, settlement costs, defense
costs and reasonable attorney's fees which the BAYER INDEMNITEES become legally
obligated to pay to the extent that such arise out of:
(I) a breach by FIRST HORIZON of any representation or
warranty under Articles 15.1; 15.2; and 15.3;
(II) the packaging, labeling, handling, storage,
promotion, or distribution by FIRST HORIZON of the FINISHED PRODUCTS; or
(III) any negligent acts or omissions of FIRST HORIZON in
the performance of this AGREEMENT, provided however, that FIRST HORIZON shall
not be required to indemnify the BAYER INDEMNITEES in respect of (ii) above
where such liabilities arise out of the negligence or willful misconduct of
BAYER and/or any breach by BAYER of its obligations pursuant to this Agreement
and provided, further that the BAYER INDEMNITEES shall permit FIRST HORIZON's
attorneys, at FIRST HORIZON's cost and upon FIRST HORIZON'S acknowledgement of
its indemnification obligations, to handle and control the defense and
settlement of any claims or suits covered by this indemnity clause. The BAYER
INDEMNITEES shall provide reasonable cooperation to FIRST HORIZON in the defense
of any such claims or suits, including, but not limited to, affording FIRST
HORIZON complete access to all relevant records. If any BAYER INDEMNITEES
receive notice of any such indemnified claims or complaints, they will promptly
notify FIRST HORIZON thereof. Nothing herein shall prevent BAYER INDEMNITEES
from retaining counsel of their choice, at their expense, to monitor the
defense, trial or settlement of any indemnified matter and FIRST HORIZON will
reasonably cooperate with such counsel.
20
15.8 BAYER shall indemnify and hold harmless the FIRST HORIZON
INDEMNITEES, from and against any and all damages, settlement costs, defense
costs and attorney's fees which the FIRST HORIZON INDEMNITEES become legally
obligated to pay to the extent that such arise out of:
(I) a breach by BAYER of any representation or warranty
under Articles 15.1 through 15.5;
(II) the manufacturing and labeling of the PRODUCTS;
(III) any negligent acts or omissions of BAYER in the
performance of this AGREEMENT, provided, however, that the FIRST HORIZON
INDEMNITEES shall permit BAYER's attorneys, at BAYER's cost and upon BAYER'S
acknowledgement of its indemnification obligations, to handle and control the
defense and settlement of any claims or suits covered by this indemnity clause.
The FIRST HORIZON INDEMNITEES shall provide reasonable cooperation to BAYER in
the defense of any such claims or suits, including, but not limited to,
affording BAYER complete access to all relevant records. If any FIRST HORIZON
INDEMNITEES receive notice of any such claims or complaints, they will promptly
notify BAYER thereof. Nothing herein shall prevent the FIRST HORIZON INDEMNITEES
from retaining counsel of their choice, at their expense, to monitor the
defense, trial or settlement of any indemnified matter and BAYER will reasonably
cooperate with such counsel; or
(IV) any action brought by a third party against FIRST
HORIZON for any infringement on any patents arising from FIRST HORIZON'S sales
of the PRODUCT or FINISHED PRODUCTS.
15.9 If a claim is brought by either PARTY against the other PARTY
under this Article 17 such claims in no event shall contain claims for
consequential or indirect consequential damages (e.g., loss of profit) which are
hereby expressly excluded between the PARTIES.
ARTICLE 16
PATENTS
16.1 During the term of this AGREEMENT BAYER shall not enforce any
PATENTS against FIRST HORIZON during marketing and sale of FINISHED PRODUCTS
made from PRODUCTS procured according to the provisions of this AGREEMENT in the
TERRITORY. This shall also apply to customers of FIRST HORIZON in the TERRITORY.
16.2 FIRST HORIZON and BAYER shall each give the other PARTY
immediate notice in writing of any known or presumed counterfeits or imitations
or infringements upon the PATENTS, and of any infringements by third parties of
the benefits accruing to FIRST HORIZON from them. FIRST HORIZON will afford
BAYER full cooperation for the protection of PATENTS. In the event that BAYER
learns of any known or presumed counterfeits or imitations or infringements
through such notice from FIRST HORIZON or otherwise, BAYER at BAYER's cost shall
promptly take such appropriate steps as are determined by BAYER to be necessary
in order to protect the interests of the PARTIES hereunder and the benefits
accruing to the PARTIES hereunder, provided, however, the institution,
prosecution and completion of any and all measures, actions and procedures with
respect to alleged infringers of the PATENTS are reserved exclusively for the
21
decision of BAYER, unless BAYER fails to take action to protect its rights to
the PATENTS within 90 days after notice of any such infringement, in which event
FIRST HORIZON at FIRST HORIZON's cost shall have the right to take such action
as FIRST HORIZON deems necessary to prevent any such infringement and recover
any damages realized by or threatened to FIRST HORIZON as a result of such
infringement, and BAYER agrees to cooperate with and assist FIRST HORIZON in its
so doing.
16.3 If during the term of this AGREEMENT, a patent owned by a
third party would, in the opinion of FIRST HORIZON and BAYER, be necessarily
infringed by the exercise by FIRST HORIZON of the rights granted hereunder in
the TERRITORY, the PARTIES shall confer together with the aim to agree upon the
best means to avoid such infringement and to secure FIRST HORIZON's rights
hereunder. Notwithstanding the above, BAYER shall indemnify and hold FIRST
HORIZON harmless against any and all liability, damage, loss, cost or expense
arising out of suits and claims and regulatory actions and proceedings which are
based upon allegations of misuse or unauthorized use of any third party patents
or TECHNICAL INFORMATION transferred to FIRST HORIZON related to the sale of
PRODUCTS or to the resale by FIRST HORIZON of FINISHED PRODUCTS. Should FIRST
HORIZON receive notice of any such claim, action, suit or proceeding, FIRST
HORIZON will promptly notify BAYER thereof, and at BAYER's cost BAYER shall
handle and control such claims or suits in consultation with FIRST HORIZON.
16.4 BAYER shall at its cost maintain the PATENTS in force in the
TERRITORY.
16.5 FIRST HORIZON shall provide BAYER reasonable assistance and
cooperation in the event BAYER decides to pursue a claim for an extension of the
PATENTS in the TERRITORY.
ARTICLE 17
HARDSHIP
If as a result of unforeseen events or developments in the external
legal, regulatory or commercial environment or through FORCE MAJEURE inequitable
hardship is caused for one or both PARTIES which runs counter to the aim of this
AGREEMENT and which the one PARTY cannot reasonably and in good faith expect the
other PARTY to tolerate, the PARTIES will discuss and seek in good faith to find
equitable ways to amend the AGREEMENT in order to re-establish the basic
economic balance of this AGREEMENT. The PARTIES shall have ninety (90) days,
following receipt of notification that a PARTY wishes to proceed under this
Article, to agree to the revised terms for this AGREEMENT. In the absence of an
agreement, the PARTIES may submit the dispute to arbitration under Article 20.6.
ARTICLE 18
EFFECTIVE DATE, TERM AND TERMINATION
18.1 Prior to the EFFECTIVE DATE, neither PARTY shall have any
obligation or liability hereunder except as provided for in this Section 18.1.
Prior to the EFFECTIVE DATE, each PARTY shall use its COMMERCIALLY REASONABLE
EFFORTS to take or cause to be taken all actions necessary or desirable
22
to satisfy the conditions set forth in this AGREEMENT and shall cooperate fully
with the other in preparing and filing all notices, applications, submissions,
reports and other documents that are necessary or desirable to obtain the
approval of the respective GOVERNMENTAL AUTHORITY in the TERRITORY with respect
to the transactions contemplated hereby.
18.2 This AGREEMENT shall come into effect and full force on the
EFFECTIVE DATE for a term of ten (10) years. Thereafter, the AGREEMENT will be
automatically extended for consecutive two (2) year periods unless terminated by
FIRST HORIZON giving twelve (12) months prior written notice expiring at the end
of the initial period or any subsequent two (2) year period. Prior to the
commencement of any two (2) year period, the PARTIES may renegotiate the
commercial terms of this AGREEMENT according to the then prevailing situation,
provided that neither PARTY is obligated to engage in such renegotiation.
18.3 Either PARTY may terminate this AGREEMENT at any time by
giving written notice to the other PARTY in the event that:
18.3.1 Any proceeding in bankruptcy or in reorganization
(other than internal re-organization) or for the appointment of a receiver or
trustee or any other proceedings under a law for the relief of debtors shall be
instituted by or against the other PARTY which are not dismissed within sixty
(60) days;
18.3.2 The other PARTY defaults in the performance of any
material obligations imposed on it by this AGREEMENT and such default is not
remedied in all material respects within forty-five (45) days of receipt of
written demand from the notifying PARTY to cure the default.
18.4 This AGREEMENT may be terminated by either PARTY if the
conditions precedent to EFFECTIVE DATE do not occur by July 1st, 2002.
18.5 If this AGREEMENT is terminated such expiration or termination
shall neither release the other PARTY from any obligation to make payments
accrued hereunder prior to the date of such expiration or termination and shall
not release the PARTIES from the secrecy obligations as provided in Article 13
or the indemnity obligations of Articles 14 and 15. FIRST HORIZON, however, is
entitled to sell and/or use all stocks of PRODUCTS received prior to the
effective date of termination hereunder.
18.6 If this AGREEMENT is terminated as a result of FIRST HORIZON's
breach of this Agreement, FIRST HORIZON shall immediately reassign the
NDA-approval No. 20[ ]356 for FINISHED PRODUCTS in the TERRITORY without any
charge to BAYER or to a party designated by BAYER. From the effective date of
any termination hereunder the PARTIES shall cease to use TECHNICAL INFORMATION
or COMMERCIAL INFORMATION received from the other PARTY under this AGREEMENT
and, upon request, shall either destroy or return all copies of such TECHNICAL
INFORMATION or COMMERCIAL INFORMATION received.
The obligation of confidentiality and non use shall survive the
expiration or termination of this AGREEMENT.
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18.7 The termination of this AGREEMENT will not influence any
license granted to BAYER according to Article 11.2, unless, however, termination
of the AGREEMENT has resulted from BAYER's breach of the AGREEMENT.
ARTICLE 19
MISCELLANEOUS
19.1 Neither PARTY shall be liable to the other for any failure or
delay in the performance of any of its obligations under this AGREEMENT for the
time and to the extent such failure or delay is caused by riots, civil
commotions, wars, hostilities between nations, LAWS, embargoes, actions by any
unaffiliated third parties, acts of God, storms, fires, accidents, labor
disputes or strikes, sabotage, terrorism, explosions or other similar or
different contingencies, in each case, beyond the reasonable control of the
respective PARTIES ("FORCE MAJEURE"). The PARTY affected by FORCE MAJEURE shall
provide the other PARTY will full particulars thereof as soon as it becomes
aware of the same (including its best estimate of the likely extent and duration
of the interference with its activities), and will use COMMERCIALLY REASONABLE
EFFORTS to overcome the difficulties created thereby and to resume performance
of its obligations as soon as practicable. If the performance of any obligation
under this AGREEMENT is delayed owing to a FORCE MAJEURE for any continuous
period of more than six (6) months, the PARTIES shall consult with respect to an
equitable solution, including the possible termination hereof.
19.2 Neither PARTY shall be entitled to assign its rights hereunder
to a third party, other than an AFFILIATE (provided that such AFFILIATE
satisfies any applicable FDA requirements), without the express written consent
of the other PARTY hereto which consent shall not unreasonably be withheld.
FIRST HORIZON shall notify BAYER, if it assigns to an AFFILIATE of FIRST HORIZON
parts of its obligations thirty (30) days prior to such assignment. Such
notification shall include the Notice address and the obligation of such
AFFILIATE. BAYER may, according to Article 7.3, appoint a third party to
manufacture PRODUCTS, provided such third party provides FIRST HORIZON with such
evidence as FIRST HORIZON shall reasonably request, that such third party has
obtained any and all FDA approvals necessary to provide the manufacturing,
responsibilities to be delegated to such third party.
19.3 The invalidity or unenforceability of an Article or any part
of an Article of the AGREEMENT in any jurisdiction shall not cause the
invalidity of the whole AGREEMENT as to such jurisdiction, and shall not affect
the validity or enforceability of such Article or such part of an Article in any
other jurisdiction. The PARTIES will replace any Article or part of an Article
found invalid or unenforceable with an alternative which should as nearly as
possible achieve the PARTIES original intent.
19.4 No amendment of this AGREEMENT shall be valid or binding upon
the PARTIES hereto unless made in writing and duly executed on behalf of each
PARTY hereto.
19.5 The PARTIES hereto agree that the validity of this AGREEMENT
and their respective rights and obligations under it shall be governed by the
laws of Germany.
24
19.6 Both PARTIES are obligated to undertake all reasonable efforts
in order to solve in an amicable way any controversy arising in connection with
this AGREEMENT.
Any controversy arising in connection with this AGREEMENT which cannot
be solved in an amicable way shall be referred to and determined by arbitration
by three (3) arbitrators under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce. Such arbitration shall be held at the place
of jurisdiction (New York/Cologne) of the defending PARTY, in the English
language.
19.7 Any notice required to be given hereunder shall be considered
properly given if sent by registered letter or telex or telefax, prepaid, to the
applicable PARTY at the address set forth below:
Any notice to FIRST HORIZON shall be addressed to:
FIRST HORIZON PHARMACEUTICAL CORPORATION
000 Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Fax No.: 00-000-0000
Any notice to BAYER shall be addressed to:
XXXXX XX
Konzernzentrale XXX-00000 Xxxxxxxxxx
Xxxxxxx Xxxxxxxx xx Xxxxxxx
Fax No: (000) 00-00000
or to such other address for such PARTY as it shall have furnished in writing to
the other PARTY. If sent by mail, the date of receipt shall be deemed to be one
week from the date of mailing.
25
IN WITNESS WHEREOF the PARTIES have caused this AGREEMENT to be duly
executed as of the day and year first written above.
Date: December 12, 2001 Date:
XXXXX XX FIRST HORIZON
By: /s/ By: /s/ Xxxxxxxx X. Xxxx
----------------------------------- --------------------------
Its: Legal Department Its: Chief Executive Officer
----------------------------------- --------------------------
Europe
-----------------------------------------
APPENDIX 1
Nisoldipine Coat Core tablet 10 mg
Nisoldipine Coat Core tablet 20 mg
Nisoldipine Coat Core tablet 30 mg
Nisoldipine Coat Core tablet 40 mg
FIRST HORIZON Agreement Appendix 2
Nisoldipine Patents in USA
Subject Xxx.-No. Appl.-No. filing date Expiration Remarks
Process 4 600 778 591614 20.03.84 20.04.2004
Coat core tablet 4 892 741 204056 08.06.88 08.06.2008
* Filing date of parent application
Appendix 3
Sular CC /Number of tablet per kg
Dosage equivalent to 1 kg(no. of tablets)
10 mg 3.003
20 mg 3.003
30 mg 3.048
40 mg 3.030
220390.3
