Exhibit 10.35
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Portions of this exhibit were omitted and filed separately with the Securities
and Exchange Commission pursuant to an application for confidential treatment
filed with the Commission pursuant to Rule 24b-2 under the Securities Exchange
Act of 1934. Such portions are marked by asterisks.
COPROMOTION AND CODEVELOPMENT AGREEMENT
This Copromotion and Codevelopment Agreement (together with all Exhibits, this
"Agreement"), effective as of September 9, 2001, is made by and between
ViroPharma Incorporated, a Delaware corporation (hereinafter "ViroPharma"), with
primary offices located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Aventis
Pharmaceuticals Inc., a Delaware corporation (hereinafter "Aventis"), with
offices located at ▇▇▇▇▇ ▇▇▇-▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
ViroPharma and Aventis may be referred to herein as a "Party" or collectively as
"Parties."
WHEREAS, ViroPharma has certain exclusive rights under the SaSy Patents and the
ViroPharma Patents and the Trademarks in the Territory (as each is hereinafter
defined); and
WHEREAS, ViroPharma intends to seek regulatory approval to market, distribute
and sell VP Products (as hereinafter defined) in the Territory; and
WHEREAS, ViroPharma and Aventis each desire to collaborate with the other in the
development and marketing of VP Products in the Territory pursuant to the terms
set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the foregoing and the
representations, covenants and agreements contained herein, ViroPharma and
Aventis, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
1.1 "13D Group" means any group of Persons formed for the purpose of
acquiring, holding, voting or disposing of Voting Securities which
would be required under Section 13(d) of the Exchange Act and the
rules and regulations thereunder to file a statement on Schedule 13D
with the SEC as a "person" within the meaning of Section 13(d)(3) of
the Exchange Act. Ownership of Voting Securities shall be determined
in accordance with Rule l3d-3 of the Exchange Act as currently in
effect.
1.2 "Additional Indications" means either or both of:
1.2.1 Prevention of VRI in patients with asthma and reduction in
associated lower respiratory tract morbidity (the "Asthma
Indication"); or
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Page 1
1.2.2 Prevention of VRI in patients with chronic obstructive
pulmonary disease and reduction in associated lower respiratory
tract morbidity (the "COPD Indication").
1.3 "Adverse Drug Experience" means any of: an "adverse drug experience,"
a "life-threatening adverse drug experience," a "serious adverse drug
experience," or an "unexpected adverse drug experience," as those
terms are defined at either 21 C.F.R. (S) 312.32 or 21 C.F.R.
------
(S) 314.80.
1.4 "Affiliate" means any person or entity that directly or indirectly
controls or is controlled by or is under common control with
ViroPharma or Aventis, as the case may be, but only for so long as
said control shall continue. As used herein the term "control" means:
1.4.1 the direct or indirect ownership of over fifty percent (50%) of
the outstanding voting securities of an entity or person (or,
such lesser percentage which is the maximum allowed to be owned
by a foreign corporation in a particular jurisdiction), or
1.4.2 the right to receive over fifty percent (50%) of the profits or
earnings of an entity or person (or, such lesser percentage
which is the maximum allowed to be owned by a foreign
corporation in a particular jurisdiction), or
1.4.3 such other relationship as in fact gives such individual or
entity the power or ability to control the management, business
and affairs of an entity or person.
1.5 "Assigned Sales Force Effort" shall mean the number and type of PDEs
to be performed by a Party for a VP Product in the Territory in each
month during any Calendar Quarter, as assigned by the Marketing
Subcommittee under the then applicable Commercialization Plan and
Budget and in accordance with Section 5.4.
1.6 "Aventis Competitor" means:
1.6.1 an entity which, together with its Affiliates is among the top
twenty (20) pharmaceutical products companies in North America
based on annual revenues from North American sales of
pharmaceutical products in the Calendar Year immediately
preceding the Change of Control of ViroPharma, as reported by
IMS Health Incorporated;
1.6.2 an entity that sells a pharmaceutical product which is a direct
competitor of one of Aventis' top (15) pharmaceutical products
based on annual global revenues from such pharmaceutical
product, provided that such competing product has achieved a
North American market share of at least seven and one-half
percent (7.5%) for the Calendar Year immediately preceding the
Change of Control of ViroPharma based on total
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Page 2
prescription sales, as reported in the corresponding IMS ATC II
or III category; or
1.6.3 an entity that is an Affiliate of one of the foregoing.
1.7 "Aventis Interest" means Aventis' interest in both its rights and
obligations pursuant to this Agreement, including, without limitation,
with respect to, (a) the prescription market for VP Product, taking
into account pending NDA filings and any ongoing development
activities for any VP Product, in each case considering the likelihood
of success, actual and the likelihood of potential competition from
generic drugs, the likelihood that any Regulatory Authority would
require that any VP Products be sold without prescription labeling
restrictions, and the likelihood that actual or effective exclusivity
could be maintained or extended as a result of the issuance of patents
under then-pending additional patent applications, pursuant to
litigation to assert pre-existing rights, or in any other manner
consistent with Laws, and in each case considering actual and
potential competition from any Third Party prescription or over-the-
counter pharmaceutical product, (b) any VP Product Exclusivity Unit
that a Regulatory Authority required to be sold without prescription
labeling restrictions before the expiration of the VP Product
Exclusivity Period for such VP Product Exclusivity Unit, as described
in Section 2.7.2, and (c) any VP Exclusivity Unit for which there was
a Voluntary OTC Switch, as described in Section 2.7.3, but excluding:
1.7.1 the effect of ViroPharma's exercise of its right under Section
2.7.5(b);
1.7.2 any element of value arising from the accomplishment or
expectation of any Change in Control, including, without
limitation, any Patents or other intellectual property rights
owned or Controlled by any Third Party involved in such Change
of Control before the completion of such Change of Control; and
1.7.3 any economic benefits or rights accruing to Aventis from the
Effective Date to the date immediately preceding the date of
any closing of a purchase and sale of the Aventis Interest
pursuant to either of Section 2.7.5 or 12.5 (including, without
limitation, the right to receive payments pursuant to this
Agreement).
1.8 "Aventis Know-How" means all know-how, processes, materials,
information, data and analyses including copyright and trade secret
related thereto owned or Controlled by Aventis to the extent necessary
to develop, or permit the use, sale, or offering for sale of VP
Products.
1.9 "Aventis Logo" means the Aventis name logo set forth on Exhibit 1.9,
and all copyright and trademarks relating thereto.
1.10 "Aventis Product Target Prescribers" means the list of approximately
****** (******) prescribing physicians developed by Aventis and
provided to ViroPharma to whom the Detailing of Aventis Product(s)
shall be performed.
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Page 3
1.11 "Aventis Technology" means the Aventis Know-How and the Aventis Logo.
1.12 "Aventis Trade Policy" means the Aventis policy governing the sale
and return of products, which is attached to this Agreement as
Exhibit 1.12, without giving effect to the provision in such policy
permitting Aventis unilaterally to alter such policy to the extent
such alteration would be material, but including any material changes
to such policy affecting the treatment of VP Product returns and
refunds approved in advance by the JSC.
1.13 "Beneficial Ownership" of securities means having "beneficial
ownership" of such securities (as determined pursuant to Rule l3d-3
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing.
1.14 "Calendar Quarter" means each or any of the three month periods
ending March 31, June 30, September 30 and December 31, except that
the first Calendar Quarter shall be the period from the Effective
Date until the earliest of the immediately following March 31, June
30, September 30 and December 31.
1.15 "Calendar Year" means each twelve month period of the Agreement
ending on December 31, except that the first Calendar Year shall be
the period from the Effective Date until the immediately following
December 31.
1.16 "Call" means a face-to-face contact (and, subject to the approval of
the JSC, a live video presentation) of either a ViroPharma or Aventis
sales representative, including permitted representatives of contract
sales organizations (to the extent permitted under Section 5.5.3),
with medical professional(s) with prescribing authority during which
Details are performed.
1.17 "Canada" means Canada and its territories, commonwealths and
possessions.
1.18 "Change of Control" means an event where:
1.18.1 any Person, group of Persons acting jointly on the basis of
an agreement or understanding with each other relating to the
exercise of voting rights, or 13D Group in each case not
including any Affiliates of either Party, acquires (whether
by direct acquisition, merger, consolidation or similar
transaction) directly or indirectly, control of more than
fifty percent (50%) of the Total Voting Power of all Voting
Securities of ViroPharma or any of its Affiliates that is
either a sublicensee or assignee of all or substantially all
of ViroPharma's rights or obligations under this Agreement or
of Aventis S.A. or Aventis or any of their respective
Affiliates that is either a sublicensee or assignee of all or
substantially all of Aventis' rights or obligations under
this Agreement, as the case may be;
1.18.2 Aventis S.A. or Aventis, or ViroPharma, as the case may be,
directly or indirectly, sells or otherwise transfers to any
Person or group of Persons
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Page 4
who are not Affiliates of such Party, all or substantially
all of its properties and assets.
1.18.3 In the case of ViroPharma, any other transaction within the
meaning of a "change in control" pursuant to the SaSy
Agreement.
1.19 "Collaboration Royalties" means all royalties and other amounts paid
to Third Parties for patent or technology licenses that the JSC
agrees are necessary or desirable in order to develop, make or have
made, use, sell, or offer for sale in the Territory, or import into
the Territory any VP Product, but shall not include SaSy Royalties or
other royalties and amounts paid by ViroPharma to Third Parties
pursuant to Section 10.2.5(c).
1.20 "Combination Product" means a product composed of VP Compound or VP
Product and at least one other therapeutically or prophylactically
active pharmaceutical ingredient that is not a VP Compound or VP
Product.
1.21 "Commercialization Expenses" means the following:
1.21.1 Detail Cost of VP Product, but in no event shall
Commercialization Expenses include the costs of training each
Party's respective sales force dedicated to promoting VP
Product, or the costs of sales meetings;
1.21.2 the Cost of Goods sold;
1.21.3 the cost of obsolete VP Compound, the costs to dispose of
obsolete VP Compound, and the cost to dispose of obsolete VP
Product, to the extent such costs are not allocated to
ViroPharma alone under this Agreement;
1.21.4 Cost of Goods of Samples;
1.21.5 Cost of Goods of VP Product used in any Phase 3b Studies or
Phase 4 Studies;
1.21.6 SaSy Royalties;
1.21.7 Collaboration Royalties;
1.21.8 costs for the creation, review, production and distribution
of Promotional Materials;
1.21.9 costs for promotional and educational meetings;
1.21.10 costs for medical and professional education;
1.21.11 costs for opinion leader and advocacy development;
1.21.12 costs for public relations related to a VP Product;
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Page 5
1.21.13 costs for the development, conduct and analysis of market
research studies and data;
1.21.14 costs for activities related to obtaining reimbursement from
payors;
1.21.15 costs for distribution of Samples to each Party's
distribution center (but not including the costs of
distribution of Samples from such distribution centers to
each Party's sales representatives, the tracking and auditing
of Samples after receipt at each Party's distribution center,
the costs of Sample receipt forms and other costs of
compliance with the PDMA);
1.21.16 costs for medical affairs services for VP Product as
described in Section 7.7;
1.21.17 costs for Phase 3b Studies and Phase 4 Studies;
1.21.18 costs for handling orders and booking sales pursuant to
Section 5.10;
1.21.19 costs for launch meetings held jointly by the Parties,
excluding the lodging and travel costs of each Party's
attendees at such launch meetings;
1.21.20 costs incurred in connection with post-approval regulatory
matters other than post-approval labeling enhancement;
1.21.21 a reasonable allowance for doubtful accounts receivable;
1.21.22 costs for Distribution of VP Product;
1.21.23 freight, insurance and other transportation charges for VP
Product to the extent not included in the invoice price;
1.21.24 any other costs identified as Commercialization Expenses in
this Agreement;
1.21.25 any other costs approved in writing by the Marketing
Subcommittee before such cost is charged to a Party's
Commercialization Account;
incurred for a VP Product after the Effective Date of this Agreement,
and actually paid to Third Parties or accrued therefor, net of any
credits or refunds made on account thereof by such Third Party, as
provided for in an approved Commercialization Plan and Budget, or as
otherwise approved in writing by the JSC before such cost is charged
to a Party's Commercialization Account. "Commercialization Expenses"
shall not include any internal costs of commercialization activities
unless the JSC has specifically authorized the charging of such
internal costs to a Party's Commercialization Account in writing
before such cost is charged to a Party's Commercialization Account.
Notwithstanding anything to the contrary in this Section 1.21, the
internal costs associated with Detail Costs of VP Product, and any
amounts deducted from gross
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Page 6
sales to obtain Net Sales as set forth in Section 1.61 shall not be
included in "Commercialization Expenses," and in no event shall a
single expense be charged more than once as a Commercialization
Expense.
1.22 "Commercialization Plan and Budget" means the Commercialization Plans
and Budgets described in Section 5.3.
1.23 "Compound" means a chemical compound or substance together with all
complexes, mixtures and other combinations, prodrugs, metabolites,
enantiomers, salt forms, racemates, and isomers thereof.
1.24 "Confidential Information" means all secret, confidential or
proprietary information or data, whether provided in written, oral,
graphic, video, computer or other form, provided by one Party (the
"Disclosing Party") to the other Party (the "Receiving Party")
pursuant to this Agreement or the Mutual Non-Disclosure Agreement
between the Parties dated March 1, 2001, or generated pursuant to this
Agreement, including but not limited to information relating to the
Disclosing Party's existing or proposed research, development efforts,
patent applications, business or products, the terms of this
Agreement, the terms of the SaSy Agreement, and any other materials
that have not been made available by the Disclosing Party to the
general public. Notwithstanding the foregoing sentence, Confidential
Information shall not include any information or materials that:
1.24.1 were already known to the Receiving Party or its Affiliates
(other than under an obligation of confidentiality), at the
time of disclosure by the Disclosing Party to the extent such
Receiving Party has documentary evidence to that effect;
1.24.2 were generally available to the public or otherwise part of the
public domain at the time of its disclosure to the Receiving
Party or its Affiliates;
1.24.3 became generally available to the public or otherwise part of
the public domain after its disclosure or development, as the
case may be, and other than through any act or omission of a
Party or its Affiliates in breach of such Party's or such
Party's Affiliates confidentiality obligations under this
Agreement;
1.24.4 were disclosed to a Party or its Affiliates, other than under
an obligation of confidentiality, by a Third Party who had no
obligation to the Disclosing Party not to disclose such
information to others; or
1.24.5 were independently discovered or developed by or on behalf of
the Receiving Party or its Affiliates without the use of the
Confidential Information belonging to the other Party and the
Receiving Party has documentary evidence to that effect.
1.25 "Control" or "Controlled" means with respect to any (a) item of
information, or (b) intellectual property right, the possession
(whether by ownership or license,
________________________________________________________________________________
Page 7
other than pursuant to this Agreement) by a Party of the ability to
grant to the other Party access and/or a license to such item or right
without violating the terms of any agreement or other arrangements
with any Third Party existing before or after the Effective Date.
1.26 "Cost of Goods" means, the total cost to produce VP Product in final
form for sale or for use as a Sample actually paid to Third Parties,
including, but not limited to, the costs of bulk material or VP
Compound, the cost of micronization and other processing, the cost of
excipients, the cost to manufacture final product, the cost of fill
and finish, quality control, labeling, packaging and shipping to a
Party or its Affiliate or contractor, and the cost of storage.
Notwithstanding the foregoing, any payments made by Aventis for
Finished VP Products to ViroPharma or to a Product Supplier of
Finished VP Product shall be deemed a "Cost of Goods" and shall be
charged to Aventis' Commercialization Account when sold, and
ViroPharma shall not charge its costs or payments to Third Parties to
produce such Finished VP Products to its Commercialization Account. If
Aventis manufactures VP Compounds or VP Products, then the definition
of "Cost of Goods" shall be revised as mutually agreed to by the
Parties.
1.27 "Curable ViroPharma Breach" means the breach by ViroPharma of any
material representation, warranty, covenant or agreement set forth
herein, that is curable by either Party hereunder, and that remains
uncured by ViroPharma following the cure period(s) set forth in
Section 13.7.1.
1.28 "Detail" means a face-to-face contact (and, subject to the approval of
the JSC, a live video presentation) of either a ViroPharma or Aventis
sales representative, including permitted representatives of contract
sales organizations (to the extent permitted under Section 5.5.3),
with medical professional(s) with prescribing authority, during which
a complete VP Product or Aventis Product presentation, as defined from
time to time by the Marketing Subcommittee or Aventis, as applicable,
is communicated, but may include leaving with such medical
professional such promotional materials as are designated by the
Marketing Subcommittee or Aventis, as applicable and product samples
in quantities designated by the Marketing Subcommittee or Aventis, as
applicable. In each case a Detail shall be as measured by each Party's
internal recording of such activity consistent with the methodology
established by the Marketing Subcommittee pursuant to Section 5.7.1,
or by Aventis, as applicable. When used as a verb, "Detail" means to
perform a Detail.
1.29 "Detail Cost of Aventis Product(s)" means, unless otherwise agreed to
by the JSC:
1.29.1 during such time as ViroPharma is promoting and Detailing only
Aventis Products as a contract sales organization on behalf of
Aventis (i.e., prior to the Launch Date), $****** per Call,
which Call shall include one Primary and one Secondary Detail
of Aventis Products; and
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Page 8
1.29.2 during such time as ViroPharma is promoting and Detailing any
VP Product and an Aventis Product, $****** per Secondary
---
Detail of Aventis Product (where, for the sake of clarity,
this amount was calculated on the basis of a $****** FTE Rate,
for a sales representative performing ****** calls per year,
and allocating ******% to the Secondary Detail);
in each case adjusted annually for inflation by the Finance
Subcommittee beginning with respect to Calendar Year 2003 to an amount
equal to such amount listed above in this Section 1.29, multiplied by
the U.S. Department of Labor's Consumer Price Index for All Urban
Consumers (CPI-U) ("CPI") at the time of the adjustment ("CPI
\\New\\"), divided by the CPI on January 1, 2002 ("CPI\\Base\\").
Represented arithmetically, the new Detail Cost shall be:
Old Detail Cost x (CPI\\New\\/CPI\\Base\\).
1.30 "Detail Cost of VP Product" means, unless otherwise agreed to by the
JSC:
1.30.1 in the case of ViroPharma, during such time as ViroPharma is
promoting and Detailing one or more VP Products, $****** per
Primary Detail and $****** per Secondary Detail of VP Product
(where, for the sake of clarity, these amounts were calculated
on the basis of a $****** FTE Rate, for a sales representative
performing ****** calls per year, and allocating ******% to
Primary and ******% to Secondary Detail); and
1.30.2 in the case of Aventis, $****** per Primary Detail and $******
per Secondary Detail of VP Product (where, for the sake of
clarity, these amounts were calculated on the basis of a
$****** FTE Rate, for a sales representative performing ******
calls per year, and allocating ******% to Primary and ******%
to Secondary Detail);
in each case adjusted annually for inflation by the Finance
Subcommittee beginning with respect to Calendar Year 2003 to an amount
equal to such amount listed above in this Section 1.30, multiplied by
the U.S. Department of Labor's Consumer Price Index for All Urban
Consumers (CPI-U) ("CPI") at the time of the adjustment ("CPI
\\New\\"), divided by the CPI on January 1, 2002 ("CPI\\Base\\").
Represented arithmetically, the new Detail Cost shall be:
Old Detail Cost x (CPI\\New\\/CPI\\Base\\).
1.31 "Development Expenses" means the actual cost of each of the following
for VP Product incurred on or after the Effective Date of this
Agreement, in each case to the extent provided for in an approved
Development Plan and Budget, or otherwise approved in writing by the
JSC before such cost is charged to a Party's Development Account:
1.31.1 all actual payments made to Third Parties or accrued therefor,
and all Development FTE Costs associated with:
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Page 9
(A) any preclinical or clinical study of VP Product for use in
the Field, including without limitation Phase 3a Studies,
but excluding any ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇,
(▇) obtaining VP Product used in any preclinical or clinical
study of VP Product for use in the Field, including
without limitation Phase 3a Studies, but excluding any
Phase 3b Studies or Phase 4 Studies,
(C) regulatory filings and other regulatory expenses
associated with any preclinical or clinical study of VP
Product for use in the Field, including without limitation
Phase 3a Studies, but excluding any Phase 3b Studies or
Phase 4 Studies;
(D) the preparation of an NDA, and for NDA filing costs and
fees;
(E) all post-approval expenses resulting from labeling
enhancements of VP Products;
(F) adverse experience reporting pursuant to Section 7.4;
(G) any clinical study to be performed which is requested by
the FDA as a condition of approval of a VP Product;
(H) any other costs identified as Development Expenses in this
Agreement;
(I) any other activities provided for in the Development Plan
and Budget or approved in writing by the Development
Subcommittee or the JSC before such cost is charged to a
Party's Development Account; and
1.31.2 the Cost of Goods of any VP Product used in any preclinical or
clinical study of VP Product for use in the Field, including
without limitation Phase 3a Studies, but excluding any Phase 3b
Studies or Phase 4 Studies.
In no event shall a single expense be charged more than once as a
Development Expense.
1.32 "Development FTE Costs" means the product of: (a) the respective
Party's Development FTE Rate, and (b) the actual number of FTEs, not
to include administrative support personnel, utilized by such Party in
performing activities in accordance with the Development Plan and
Budget, or for other activities, but only to the extent the JSC has
specifically authorized such other activities in writing before the
Development FTE Costs of such other activities are charged to a
Party's Development Account, measured in accordance with a tracking
system substantially similar to that in effect on the Effective Date,
or as otherwise approved by the FSC.
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Page 10
1.33 "Development FTE Rate of ViroPharma" means the FTE rate of ******
U.S. dollars (U.S. $******) per person per year, adjusted annually
for inflation by the Finance Subcommittee beginning in Calendar
Year 2003 to an amount equal to the product of such amount, and the
U.S. Department of Labor's Consumer Price Index for All Urban
Consumers (CPI-U) ("CPI") at the time of the adjustment
("CPI\\New\\") divided by the CPI on January 1, 2002
("CPI\\Base\\"). Represented arithmetically, the new Development
FTE Rate shall be:
Old Development FTE Rate x (CPI\\New\\/CPI\\Base\\).
1.34 "Development FTE Rate of Aventis" means the FTE rate amount, per
person per year, as determined in writing by the JSC for the
respective development activity to be performed by Aventis, as
adjusted annually for inflation by the Finance Subcommittee to an
amount equal to the product of such amount, and the U.S. Department
of Labor's Consumer Price Index for All Urban Consumers (CPI-U)
("CPI") at the time of the adjustment ("CPI\\New\\") divided by the
CPI on the date such FTE rate amount is first selected
("CPI\\Base\\"). Represented arithmetically, the new Development
FTE Rate shall be:
Old Development FTE Rate x (CPI\\New\\/CPI\\Base\\).
1.35 "Development Plan and Budget" means the Initial Development Plan
and Budget and each of the subsequent plans and budgets described
in Section 4.4. 1.36 "Development Subcommittee" or "DSC" means the
committee described in Section 3.5.
1.37 "Distribution" of Finished VP Product means shipping, storing,
selling or offering for sale of Finished VP Product, but not
promoting or Detailing of VP Product, and shall include the receipt
and storage of VP Product of the Aventis Launch Batches.
1.38 "Effective Date" means September 9, 2001.
1.39 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor federal statute and the rules and
regulations of the SEC promulgated thereunder, all as the same
shall be in effect from time to time.
1.40 "FDA" means the United States Food and Drug Administration and any
successor thereto.
1.41 "FD&C Act" means the Federal Food, Drug, and Cosmetic Act, as
amended, and all applicable regulations thereunder.
1.42 "Field" means the use of a prescription pharmaceutical product to
prevent or treat picornavirus infections in humans.
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Page 11
1.43 "Finance Subcommittee" or "FSC" means the committee described in
Section 3.6.
1.44 "Finished VP Product" means VP Product in finished packaged form
(Sample or trade product), labeled and ready for sale or sampling
and distribution in the Territory, and is used for the sake of
clarity in provisions regarding or related to the Distribution or
supply of VP Product for final sale.
1.45 "First Indication" means the treatment of VRI in patients eighteen
(18) years of age or older, i.e., adults.
----
1.46 "FTE" means a full time equivalent person performing any activities
under this Agreement, based on one thousand eight hundred eighty
(1880) hours each year.
1.47 "IND" means an investigational new drug application as defined in
the FD&C Act.
1.48 "Indication Development Budget Milestone" means for each Additional
Indication, and for each Other Indication for which Aventis has
elected to fund development activities pursuant to Section
4.5.1(c)(ii), the amount proposed by the Development Subcommittee,
approved by the JSC and included in the Development Plan and Budget
representing the total expected costs of developing a VP Product
for such Additional Indication or Other Indication.
1.49 "Initial Supply Period" means the period starting from the
Effective Date and ending twelve (12) months after the Launch Date.
1.50 "Intellectual Work Product" means any and all data, regulatory
filings, writings, research and test results, processes,
formulations, reports, findings, conclusions, improvements,
inventions, discoveries, methods of making or using VP Compounds or
VP Product, work papers, notebook records, and any other
information arising directly or indirectly from activities under
this Agreement whether made or discovered by Aventis or any of its
Affiliates, ViroPharma or any of its Affiliates, or any Third Party
individually, or by any of the Parties and/or their Affiliates
and/or such Third Parties jointly, except that know-how developed
solely by ViroPharma to support prospective PCT applications
filings or national or regional applications filed in relation
thereto, which in any case claim priority to any U.S. provisional
application filed before the Effective Date will be deemed
ViroPharma Know-How.
1.51 "IWP Patents" means any and all Patents claiming Intellectual Work
Product.
1.52 "Joint Steering Committee" or "JSC" means the committee described
in Section 3.3.
1.53 "Lapse Quarter" for a Party means, on a VP Product-by-VP Product
basis in the Territory, any Calendar Quarter (beginning with the
first full Calendar Quarter following the occurrence of Sale Force
Parity) in which: (a) the Party's
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Page 12
Percentage of Assigned Effort is less than ****** percent
(******%), and (b) such Percentage of Assigned Effort is at least
****** (******) ****** lower than the other Party's Percentage of
Assigned Effort.
1.54 "Lapse Year" for a Party means, on a VP Product-by-VP Product basis
in the Territory, any Calendar Year in which such Party has ******
(******) or more Lapse Quarters.
1.55 "Launch Date" means the date on which the first VP Product is first
shipped in commercial quantities for commercial sale to Third
Parties other than contractors of a Party in the Territory.
1.56 "Laws" means all laws, statutes, rules, regulations and ordinances
(including Good Clinical Practice, Good Laboratory Practice and
Good Manufacturing Practice) in effect in any jurisdiction of the
Territory.
1.57 "Major Company" means an entity which, as of December 31 of the
Calendar Year immediately preceding a Change of Control of
ViroPharma, had cash or cash equivalents (as reflected on its
balance sheet), that combined with those of ViroPharma, are
together in excess of five hundred million dollars
(U.S.$500,000,000); provided, however, if an entity is not legally
obligated to cover any indemnifiable claim Aventis may have related
to the Termination Challenge as a result of such entity's corporate
relationship with ViroPharma, then such entity shall not be a
"Major Company" unless it provides adequate assurance, which is
reasonably satisfactory to Aventis, that it will provide financial
support to cover any indemnifiable claim Aventis may have related
to the Termination Challenge.
1.58 "Marketing Subcommittee" or "MSC" means the committee described in
Section 3.4.
1.59 "NDA" means a new drug application as defined in the FD&C Act, and
includes a supplemental new drug application. 1.60 "Net Profits
(Losses)" for a VP Product means Net Sales of such VP Product less
Commercialization Expenses.
1.61 "Net Sales" of a VP Product means the gross invoiced sales of such
VP Product by a Party or its Affiliates to Third Parties other than
contractors of a Party in the Territory after deducting:
1.61.1 trade, cash and/or quantity discounts not already reflected
in the amount invoiced;
1.61.2 excise, sales and other consumption taxes and custom duties
to the extent included in the invoice price;
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Page 13
1.61.3 freight, insurance and other transportation charges to the
extent included in the invoice price;
1.61.4 amounts repaid or credited by reason of rejections,
defects, recalls or returns (including in each case the
costs to destroy VP Product) or because of chargebacks,
refunds or billing errors, in each case to the extent
consistent with the Aventis Trade Policy;
1.61.5 retroactive price reductions, and
1.61.6 compulsory payments and rebates directly related to the
sale of VP Products, accrued, paid or deducted pursuant to
agreements (including, but not limited to, managed care
agreements) or governmental regulations.
If a VP Product is sold as part of a Combination Product, the Net
Sales of the VP Product, for the purposes of this Agreement, shall
be equal to the Net Sales of the Combination Product multiplied by
the amount AX/(AX + BY), where A is the weighted average net sales,
defined as gross invoiced sales of the VP Product by a Party or its
Affiliates to Third Parties other than contractors of a Party after
deducting the amounts described in Sections 1.61.1-6, divided by
the number of milligrams of VP Compound in such VP Product, B is
the weighted average net sales, defined as gross invoiced sales of
the other product to Third Parties other than contractors of a
Party after deducting the amounts described in Sections 1.61.1-6,
divided by the number of milligrams of therapeutically or
prophylactically active ingredient(s) that is/are not a VP Compound
in such product(s), X is the number of milligrams of VP Compound
included in the Combination Product, and Y is the number of
milligrams of the other therapeutically or prophylactically active
ingredient(s) that is/are not a VP Compound in the Combination
Product. For the sake of illustration and clarity only, a sample
calculation is provided in Exhibit 1.61. If either variable A or B
cannot be determined, the Net Sales of the VP Product as part of
the Combination Product for purposes of this Agreement shall be
agreed by the JSC based on the relative value contributed by each
component, and such agreement shall not be unreasonably withheld.
1.62 "Non-Serious Adverse Drug Experience" means any Adverse Drug
Experience that is not a Serious Adverse Drug Experience.
1.63 "Other Indication" means any indication in the Field other than the
First Indication, the Second Indication or any Additional
Indication, provided, however, that the indication of general
prophylaxis of VRI shall be considered an Other Indication only if
the JSC has approved such indication as an Other Indication
pursuant to Section 4.4.2(e).
1.64 "Patent" means any and all (a) patents, (b) pending patent
applications, including, without limitation, all provisional
applications, substitutions, continuations, continuations-in-part,
divisions, renewals, and all patents granted
________________________________________________________________________________
Page 14
thereon, and (c) all patents-of-addition, reissues, reexaminations
and extensions or restorations by existing or future extension or
restoration mechanisms, including, without limitation,
supplementary protection certificates or the equivalent thereof.
1.65 "Percentage of Assigned Effort" for a Party means the average of
the percentage for each month of a Calendar Quarter (each monthly
percentage not to exceed 100%) of Details assigned to such Party as
Assigned Sales Force Effort for such month that such Party actually
delivers in each such month.
1.66 "Person" means any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated
organization, government or department or agency of a government or
other entity.
1.67 "Phase 3a Study" means any study of a VP Product relating to an
indication formulation, dose, course of therapy and patient
population for which an NDA has been filed, conducted after the
filing of such NDA, but which study is required to be performed by
the Regulatory Authority before Regulatory Approval can be granted
for such indication formulation, dose, course of therapy and
patient population.
1.68 "Phase 3b Study" means any study of a VP Product relating to an
indication, formulation, dose, course of therapy and patient
population for which an NDA has been filed, conducted after the
filing of such NDA, which study is not required to be performed by
the Regulatory Authority before Regulatory Approval can be granted
for such indication formulation, dose, course of therapy and
patient population, and which such study does not retroactively
become a Phase 3a Study.
1.69 "Phase 4 Study" means any study of a VP Product relating to an
indication, formulation, dose, course of therapy and patient
population for such VP Product, conducted after having received
Regulatory Approval for such indication, formulation, dose, course
of therapy and patient population.
1.70 "Pleconaril" means the Compound pleconaril, 3-[3,5-dimethyl-4-[3-
(3-methyl-5-isoxazolyl)propoxy]phenyl]-5-(trifluoromethyl)-1,2,4-
oxadiazole, with CAS No. 153168-05-9, also known as VP 63843 and
also named 5-{3-[2,6-dimethyl-4-(5-trifluoromethyl-1,2,4-ozadiazol-
3-yl)phenoxy]propyl}-3-methylisoxazole in U.S. Patent No.
5,464,848.
1.71 "Primary Detail" means a Detail in which at least sixty percent
(60%) of the total time of a Call is spent on a presentation of a
VP Product or Aventis Product.
1.72 "Primary Detail Equivalent" or "PDE" means either one Primary
Detail or two Secondary Details.
1.73 "Product Supplier" means a manufacturer or processor of VP Compound
or VP Product for promotion and sale in the Territory, which
manufacturer or processor is approved by the JSC, on the
recommendation of the SCSC, and, to the extent necessary under the
SaSy Agreement, SaSy.
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Page 15
1.74 "Promotional Material" has the meaning set forth in Section 5.11.1.
1.75 "Regulatory Approval" means the technical, medical and scientific
licenses, registrations, authorizations and approvals (including,
without limitation, approvals of NDAs, supplements and amendments,
pre- and post-approvals, pricing approvals, and labeling approvals)
of any national, supra-national, regional, state or local
regulatory agency, department, bureau, commission, council or other
governmental entity, necessary for the commercial manufacture,
Distribution, marketing, promotion, offer for sale, use, import,
export and sale of VP Product in a regulatory jurisdiction of the
Territory.
1.76 "Regulatory Authority" means any court, tribunal, arbitrator,
agency, commission, official or other instrumentality of any
federal, state, county, city or other political subdivision,
domestic or foreign, including, without limitation, any authority
over the development, manufacture, marketing or commercialization
of VP Product.
1.77 "Sales Force Parity" means the earlier of:
1.77.1 the first day of the first Calendar Quarter in which the
number of PDEs allocated to ViroPharma for VP Products is
at least 95% of the number of PDEs assigned to Aventis for
VP Products, or
1.77.2 if the Aventis representatives on the JSC have not voted in
favor of the request of ViroPharma to increase the number
of PDEs allocated to ViroPharma in a Calendar Quarter for
VP Products to a number that is at least 95% of the number
of PDEs assigned to Aventis for VP Products, then the date
of the Regulatory Approval in the United States of an NDA
for VP Product for the Second Indication.
1.78 "Sample" means VP Product or Aventis Product, as applicable, to be
determined by the MSC, that is not intended to be sold and is
intended to promote the sale of such VP Product or Aventis
Product. "Sample" shall mean a sample of VP Product, except in
Article 9, where it shall mean a sample of Aventis Product, or
unless otherwise specified.
1.79 "SaSy" means Sanofi-Synthelabo, a corporation organized and
existing under the laws of France.
1.80 "SaSy Agreement" means that certain Amended and Restated Agreement
dated February 27, 2001, between ViroPharma and SaSy, as amended
from time to time hereinafter, but only as approved by Aventis.
1.81 "SaSy Patents" means all of the U.S. Patents owned by SaSy and
Controlled by ViroPharma, which Patents are listed in Exhibit 1.81.
1.82 "SaSy Royalties" means any royalties required to be paid by
ViroPharma to SaSy under the SaSy Agreement without regard to any
deductions to such royalties
________________________________________________________________________________
Page 16
resulting from the payment by ViroPharma of any royalties
or other amounts to Third Parties as provided in the SaSy
Agreement, e.g., in connection with licensing certain
rights in order to practice SaSy Patents.
1.83 "SEC" means the United States Securities and Exchange
Commission and any successor thereto.
1.84 "Second Indication" means the treatment of VRI in patients
under eighteen (18) years old.
1.85 "Second Indication Subset" means the treatment of VRI in
children between the ages of six (6) and twelve (12) years
old with a suspension formulation.
1.86 "Secondary Detail" means a Detail in which at least thirty-
five percent (35%) of the total time of a Call is spent on
the presentation of VP Product or Aventis Product.
1.87 "Serious Adverse Drug Experience" means any Adverse Drug
Experience that is fatal or life-threatening, is
permanently disabling, requires in-patient hospitalization,
or is a congenital anomaly, cancer or overdose, or any
other event which would constitute a "serious adverse drug
experience" within either of the definitions set forth at
21 C.F.R. (S) 314.80 and 21 C.F.R. (S) 312.32.
1.88 "Shelf Life" means the period of time approved by FDA for
use in labeling for expiration dating of a VP Product.
1.89 "Standstill Agreement" means that certain letter agreement
dated as of April 17, 2001 between Aventis and ViroPharma.
1.90 "Supply Chain Subcommittee" or "SCSC" means the committee
described in Section 3.7.
1.91 "Territory" means the United States.
1.92 "Third Part(y/ies)" means any Person other than Aventis,
ViroPharma or their respective Affiliates.
1.93 "Total Voting Power" means at any time the total combined
voting power in the general election of directors or
individuals with similar responsibilities of all the Voting
Securities then outstanding.
1.94 "Trademarks" means those trademarks identified in, and the
trademark registrations issuing from, the applications
listed in Exhibit 1.94.
1.95 "Uncurable ViroPharma Breach" means the breach, other than
a Curable ViroPharma Breach, by ViroPharma of:
1.95.1 Sections 2.6, or 2.7; or
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Page 17
1.95.2 any representation, warranty or covenant by or of
ViroPharma that has a material adverse effect on
the ability of Aventis to continue to develop,
promote, Detail and/or Distribute VP Products
consistent with the Development Plan and Budget or
the Commercialization Plan and Budget,
in each case, to the extent that ViroPharma has not
disputed the existence of a breach in good faith.
1.96 "United States" or "U.S." means the United States of
America and its territories, commonwealths and possessions.
1.97 "Valid Claim" means a claim of any unexpired United States
or foreign patent, that has not been donated to the public,
disclaimed, nor held invalid or unenforceable by a court or
government agency of competent jurisdiction in an
unappealed or unappealable decision.
1.98 "ViroPharma Know-How" means all know-how, processes,
materials, information, data and analyses including any
copyright and trade secret related thereto to the extent
necessary or useful to develop, or to the extent necessary
to use, sell, or offer for sale VP Compounds or VP Products
in the Field, and that are owned or Controlled by
ViroPharma on the Effective Date or during the term of this
Agreement.
1.99 "ViroPharma Logo" means the ViroPharma name logo set forth
on Exhibit 1.99, and all copyright and trademarks relating
thereto.
1.100 "ViroPharma Patents" means any and all U.S. Patents owned
or Controlled by ViroPharma on the Effective Date covering
any VP Compound or VP Product other than SaSy Patents and
IWP Patents, which ViroPharma Patents are listed in Exhibit
1.100, and any other Patents owned or Controlled by
ViroPharma covering ViroPharma Know-How other than SaSy
Patents and IWP Patents.
1.101 "ViroPharma Technology" means the ViroPharma Patents, SaSy
Patents, ViroPharma Know-How, the Trademarks and the
ViroPharma Logo.
1.102 "Voting Securities" means at any time shares of any class
of capital stock of a Person which are then entitled to
vote generally in the election of directors.
1.103 "VP 68881" means the Compound 5-(difluoromethyl)-3-[4-
[3-(5-ethyl-1,3,4-thiadiazol-2-yl)propoxy]-3,5-
dimethylphenyl]-1,2,4-oxadiazole, with CAS No. 172495-02-2,
and also named 2-ethyl-5-[3-[4-(5-difluoromethyl-1,2,4-
oxadiazol-3-yl)-2,6-dimethylphenoxy]propyl]-1,3,4-
thiadiazole in U.S. Patent No. 5,453,433.
1.104 "VP Compound" means:
1.104.1 Pleconaril; and
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1.104.2 VP 68881.
1.105 "VP Product(s)" means any finished pharmaceutical
formulation, including bulk material, and Finished VP
Product, where applicable, for use in the Field that
contains a VP Compound as an active ingredient, and
includes any VP Product Exclusivity Unit.
1.106 "VP Product Exclusivity Period" means for any VP Product
Exclusivity Unit sold in the Territory:
1.106.1 the period during which the Distribution and/or
promotion of the applicable VP Product
Exclusivity Unit in the Territory by any Person,
in the absence of a license granted by
ViroPharma, or in the case of IWP Patents,
ViroPharma and Aventis, to such Person, would
directly infringe one or more ViroPharma Patents,
SaSy Patents or IWP Patents, and
1.106.2 the period during which a Regulatory Authority
may not review or approve an application for
Regulatory Approval from a Third Party which
application relies on or refers to data included
in the NDA for such VP Product Exclusivity Unit,
which period immediately follows the expiration
of the period described in Section 1.106.1
without interruption.
1.107 "VP Product Exclusivity Unit" means for any single
formulation of a VP Product, each combination of
indication, dose, dosing regimen, and, if applicable,
patient subpopulation, for which such formulation of VP
Product has received Regulatory Approval.
1.108 "VP Product Target Prescribers" means a list of prescribing
physicians, developed by both Parties in conjunction with a
Third Party pharmaceutical marketing consultant acceptable
to both Parties, to whom the Detailing of VP Product will
optimize the value of such VP Product in the marketplace,
without regard to the effect of aligning a sales force to
such VP Product or the alignment of such sales force to
other products in either Party's portfolio, and which list
is based on an analysis of, among other things, physician
behavior, forecasted sales of VP Product, actual sales of
VP Product, if available, or of any other relevant product,
including, but not limited to, relevant products in either
Party's portfolio, and historical prescription data.
1.109 "VRI" means viral respiratory infection.
1.110 Additional Definitions. Each of the following definitions
is set forth in the Section of the Agreement indicated
below:
Definition Section
---------- -------
Audited Party.............................. 8.11.2
Auditing Party............................. 8.11.2
Aventis.................................... Preamble
Aventis Indemnitees........................ 15.1
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Page 19
Aventis Product........................................ 9.2.1
Commercialization Account.............................. 5.8.2
CSO.................................................... 5.5.3(a)
Development Account.................................... 4.5.2
Disclosing Party....................................... 1.24
Force Majeure.......................................... 17.4
Form of Award.......................................... 16.3.5
Guidelines............................................. 5.16
Indemnified Party...................................... 15.3.1
Indemnifying Party..................................... 15.3.1
Initial Commercialization Plan and Budget.............. 5.3.1
Initial Development Plan and Budget.................... 4.4.1
******................................................. 8.1.2
Litigation Conditions.................................. 15.3.2
Notified Party......................................... 17.4
OTC Lock-Out Period.................................... 2.7.4
Party(ies)............................................. Preamble
PDMA................................................... 5.13.1
Receiving Party........................................ 1.24
SaSy Breach Dispute.................................... 10.6.1(b)
SaSy Dispute........................................... 10.6.3(b)
Section 10.6.2 Breach Challenge........................ 10.6.2(c)
Termination Challenge.................................. 12.4.2
Third Party Claim...................................... 15.3.1
ViroPharma............................................. Preamble
ViroPharma Indemnitees................................. 15.2
2. LICENSES.
2.1 License to Aventis. Subject to the terms of this Agreement, ViroPharma
hereby grants to Aventis the royalty-free, non-sublicensable, except as
set forth in Sections 2.3, 2.4, 2.5, 2.7.2, and 2.7.3 right and license
in the Territory and in the Field to use the ViroPharma Technology only
to the extent necessary to:
2.1.1 develop and use VP Compounds;
2.1.2 promote and Detail VP Products;
2.1.3 import Finished VP Product from a Product Supplier of Finished
VP Product into the Territory;
2.1.4 export to Canada, but only if ViroPharma or any of its
Affiliates has entered into a written copromotion agreement for
VP Product for Canada with a Canadian Affiliate of Aventis, VP
Compounds or VP Products; and
2.1.5 Distribute VP Products;
________________________________________________________________________________
Page 20
in each case only to the extent provided in this Agreement,
which right and license shall be exclusive, except as to
ViroPharma and its Affiliates for Sections 2.1.1, 2.1.2,
2.1.3, and 2.1.4, and exclusive even as to ViroPharma and
its Affiliates for Section 2.1.5, except as otherwise
provided in this Agreement. Except as otherwise provided in
this Agreement, Aventis shall have no right or license
hereunder to make, have made, or repackage in the Territory
any VP Product or VP Compound.
2.2 License to ViroPharma. Subject to the terms of this
Agreement, and as permitted by any agreement between
Aventis and a Third Party in effect as of the Effective
Date, Aventis hereby grants to ViroPharma the royalty-free,
non-exclusive, and non-sublicensable, except as set forth
in Section 2.5, right and license in the Territory to use
the Aventis Technology, but only to the extent necessary to
develop, make, have made, use, Detail, import, or export VP
Compounds or VP Products pursuant to this Agreement.
2.3 Aventis Sublicensing of Distribution to Aventis Affiliates
and Third Parties. ViroPharma hereby grants to Aventis the
right to sublicense Aventis' Distribution, importation into
the Territory from a Product Supplier of VP Product or
exportation to Canada, but only if ViroPharma or any of its
Affiliates has entered into a written copromotion agreement
for VP Product for Canada with a Canadian Affiliate of
Aventis, of VP Product in the Territory to one or more of
Aventis' Affiliates in the Territory or to Third Parties
that perform such activities for Aventis' top fifteen (15)
prescription pharmaceutical products in the Territory.
2.4 Sublicensing of Detailing, Marketing and Promotion to
Affiliates and Third Parties. Either Party may sublicense
its Detailing, marketing or promotion of VP Products to an
Affiliate of such Party and to Third Parties, as provided
for herein. Notwithstanding the foregoing, the Party
selecting an Affiliate to perform tasks under this
Agreement shall be solely responsible for activities
performed by such Affiliate, and the selection and use of
an Affiliate shall not relieve such Party of its
obligations hereunder.
2.5 Sublicensing/Subcontracting to Third Parties.
2.5.1 Either Party may select a Third Party to perform
certain tasks under this Agreement, including,
without limitation, any development, marketing,
sales, Detailing, or Distribution if and only to the
extent as provided for in this Agreement. The Party
entering into a contract with such Third Party for
the performance of such services, may, as part of
such contract, grant to such Third Party a
nonexclusive, nontransferable, non-sublicensable
license or sublicense, as applicable, under the
ViroPharma Technology and Aventis Technology, only
to the extent and only for so long as such license
or sublicense is necessary for such Third Party to
perform such tasks. Notwithstanding the foregoing,
the Party selecting a Third Party to perform tasks
under this Agreement shall be solely responsible for
________________________________________________________________________________
Page 21
activities performed by such Third Party, and the selection
and use of a Third Party shall not relieve such Party of
its obligations hereunder.
2.5.2 As a condition to entering into such sublicense or
subcontract:
(a) a Party shall exercise commercially reasonable
efforts to obtain a provision in such sublicense or
subcontract stating that such sublicense or
subcontract shall be freely assignable to the other
Party, and the first Party shall notify the other
Party if the first Party was unable to obtain such a
provision, and the Parties shall consult on how to
proceed, but in no case shall such inability to
obtain an assignability provision, notwithstanding
the exercise of commercially reasonable efforts,
prevent such first Party from entering into the
agreement; and
(b) the sublicensor/subcontractor must undertake in
writing obligations of confidentiality and non-use
regarding the other Party's Confidential Information
which are at least as restrictive with regard to such
sublicensor/subcontractor as those undertaken by
Aventis or ViroPharma pursuant to Article 11 hereof.
2.6 Exclusive Relationship. Notwithstanding the licenses granted under
Sections 2.1 and 2.2 hereof, the Parties expressly understand and
agree that during the term of this Agreement:
2.6.1 Neither Party shall directly or indirectly make, have made,
develop, use, sell, or offer for sale in the Territory, or
import into the Territory any VP Compound or VP Product,
except in collaboration with the other Party as set forth
in this Agreement.
2.6.2 Neither Party shall directly or indirectly make, have made,
develop, use, sell, or offer for sale (or sell or license
to an Affiliate or Third Party the right to make, have
made, develop, use, sell or offer for sale) in the
Territory, or import into the Territory a Compound or
product (other than a VP Compound or VP Product) in the
Field for any indication that is the First Indication or
the Second Indication ****** except in collaboration with
the other Party as set forth in this Agreement.
2.6.3 Subject to Section 2.6.2, neither Party shall directly or
indirectly make, have made, develop, use, sell, or offer
for sale (or sell or license to an Affiliate or Third Party
the right to make, have made, develop, use, sell or offer
for sale) in the Territory, or import into the Territory a
Compound or product (other than a VP Compound or VP
Product) in the Field for any or all of the following
indications:
(a) an indication for which the Parties are ******,
(b) an indication for which the Parties ****** pursuant to
a ******,
________________________________________________________________________________
Page 22
(c) an indication for which the Parties ****** pursuant to and
as set forth in a ******;
unless (i) either (a) for indications ******, such Party
proposes to the JSC and the other Party's representatives on
the JSC ****** within sixty (60) days of such proposal or (b)
the JSC has decided to ******, and (ii) ****** is at least
****** by the Parties to ******, after ****** described in
******.
2.6.4 Aventis shall not directly or indirectly export out of the
Territory any VP Compound or VP Product, except in
collaboration with ViroPharma, and shall not directly or
indirectly develop, use, sell, offer for sale, have sold, make
and have made, import and export, any VP Product or VP Compound
outside the Territory, except under a license from SaSy as
contemplated by Section 2.8, and only to the extent of such
license.
For the sake of clarity, nothing in this Section 2.6 shall prevent
either Party from performing any preclinical research on any
Compounds.
2.7 OTC Rights.
2.7.1 Exclusion. Except as set forth in Sections 2.7.2 and 2.7.3, it
is expressly understood that this Agreement grants Aventis no
rights to directly or indirectly make, have made, develop, use
sell or offer for sale in the Territory, or import into the
Territory, or export from one part to another part of the
Territory, or export out of the Territory, or share in any
revenue from the sale of any VP Compound or VP Product for use
or sale as other than a prescription pharmaceutical product,
and that ViroPharma retains all such rights.
2.7.2 Forced OTC Switch. If a Regulatory Authority requires that any
VP Product Exclusivity Unit be sold in the Territory without
prescription labeling restrictions before the expiration of the
VP Product Exclusivity Period for such VP Product Exclusivity
Unit, (a "Forced OTC Switch") then the right and license to
such VP Product Exclusivity Unit granted to Aventis under
Section 2.1 shall include using, developing, Distributing,
promoting, Detailing, importing from a Product Supplier of VP
Product into the Territory, or exporting to Canada, but in the
case of exporting, only if ViroPharma or any of its Affiliates
has entered into a written copromotion agreement for VP Product
for Canada with a Canadian Affiliate of Aventis, such VP
Product Exclusivity Unit for the indication of such VP Product
Exclusivity Unit, without regard to prescription or over-the-
counter status. Upon a Forced OTC Switch, the JSC shall decide
whether or not to commercialize such VP Product Exclusivity
Unit in the OTC market, and whether or not to continue
commercializing any related VP Product Exclusivity Unit in the
prescription market. Neither Party shall be obligated to
commercialize such VP Product Exclusivity Unit
________________________________________________________________________________
Page 23
itself, to the extent such Party does not have OTC
commercialization abilities; and the JSC shall agree on any
Third Party that shall perform the commercialization activities
for such VP Product Exclusivity Unit on behalf of either or
both Parties. The JSC shall then amend the then-current
Commercialization Plan and Budget to reflect such decision, and
the Parties shall negotiate in good faith any required
amendments to this Agreement, provided that (a) the Net Profits
from the sales of such VP Product Exclusivity Unit shall
continue to be divided as set forth in Section 8.4, and (b) the
Development Expenses and Commercialization Expenses shall
continue to be divided as set forth in this Agreement. The
provision of this Section 2.7.2 shall apply to each VP Product
Exclusivity Unit that is subject to a Forced OTC Switch before
the expiration of such VP Product Exclusivity Unit's VP Product
Exclusivity Period. Notwithstanding any other provision of this
Agreement, ViroPharma shall not be entitled to exercise its
buy-out rights under Section 2.7.5 from and after the
occurrence of a Forced OTC Switch.
2.7.3 Voluntary OTC Switch. If the JSC decides to sell any VP Product
Exclusivity Unit in the Territory without prescription labeling
restrictions (a "Voluntary OTC Switch"), then the right and
license to such VP Product Exclusivity Unit granted to Aventis
under Section 2.1 shall include using, developing,
Distributing, promoting, Detailing, importing from a Product
Supplier of VP Product into the Territory, or exporting to
Canada, but in the case of exporting, only if ViroPharma or any
of its Affiliates has entered into a written copromotion
agreement for VP Product for Canada with a Canadian Affiliate
of Aventis, such VP Product Exclusivity Unit for the indication
of such VP Product Exclusivity Unit, without regard to
prescription or over-the-counter status. Neither Party shall be
obligated to commercialize such VP Product Exclusivity Unit
itself, to the extent such Party does not have OTC
commercialization abilities; and the JSC shall agree on any
Third Party that shall perform the commercialization activities
for such VP Product Exclusivity Unit on behalf of either or
both Parties. The JSC shall then amend the then-current
Commercialization Plan and Budget to reflect such decision, and
the Parties shall negotiate in good faith any required
amendments to this Agreement, provided that (a) the Net Profits
from the sales of such VP Product Exclusivity Unit shall
continue to be divided as set forth in Section 8.4, and (b) the
Development Expenses and Commercialization Expenses shall
continue to be divided as set forth in this Agreement. This
Section 2.7.3 shall apply to each VP Product Exclusivity Unit
that is subject to a Voluntary OTC Switch before the expiration
of such VP Product Exclusivity Unit's VP Product Exclusivity
Period.
2.7.4 Restriction. Except as set forth in Section 2.7.2, 2.7.3 or
2.7.5, ViroPharma shall not directly or indirectly sell or
offer for sale (or license to an Affiliate or Third Party the
right to sell or offer for sale) as an over-the-counter
pharmaceutical product in the Territory any VP Product
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Page 24
Exclusivity Unit, until the date ****** (******) ****** before
the expiration of the applicable VP Product Exclusivity Period
covering such VP Product Exclusivity Unit (the "OTC Lock-Out
Period"). Except as set forth in Section 2.7.2, or 2.7.3, for
each VP Product Exclusivity Unit, after the OTC Lock-Out
Period, ViroPharma shall not directly or indirectly sell or
offer for sale (or license to an Affiliate or Third Party the
right to sell or offer for sale) as an over-the-counter
pharmaceutical product in the Territory such VP Product
Exclusivity Unit unless such VP Product Exclusivity Unit ******
at any time during the ****** (******) ****** before the
expiration of the applicable VP Product Exclusivity Period.
2.7.5 Rx Tail Buyout.
(a) Right of First Negotiation. Subject to Section 2.7.5(c),
if ViroPharma intends to directly or indirectly sell or
offer for sale any VP Product Exclusivity Unit as an over-
the-counter pharmaceutical product in the Territory after
the expiration or termination of the OTC Lock-Out Period
in the U.S., but during the term of this Agreement, then
no sooner than ****** (******) ****** before the
expiration of the applicable VP Product Exclusivity Period
in the U.S. covering such VP Product Exclusivity Unit,
ViroPharma shall give Aventis written notice of such
intention, and for the sixty (60) day period following the
date of such notice, the Parties shall negotiate
exclusively with each other, commercial terms under which
Aventis and ViroPharma would commercialize such VP Product
Exclusivity Unit over-the-counter. Neither Party shall be
obligated to agree upon any such terms or to accept any
terms proposed by the other Party.
(b) Rx Tail Buyout. If ViroPharma decides to sell any VP
Product as an over-the-counter pharmaceutical product in
the Territory, then, after the completion of the sixty
(60) day period set forth in Section 2.7.5(a), and no
earlier than ****** (******) ****** before the expiration
of the first to expire VP Product Exclusivity Period in
the U.S. covering any VP Product Exclusivity Unit that
****** at any time during the ****** (******) ******
before the expiration of the applicable VP Product
Exclusivity Period in the Territory, ViroPharma shall
provide Aventis with written notice of such decision,
causing a valuation of the Aventis Interest, as of the
date ****** (******) ****** before the expiration of the
first to expire VP Product Exclusivity Period in the U.S.
or such later date specified by ViroPharma (either, the
"ViroPharma OTC Launch Date"), pursuant to the procedures
set forth in Sections 12.5.3-4. Such valuation of the
Aventis Interest shall be the "Rx Tail Buyout Price." On
the ViroPharma OTC Launch Date, ViroPharma shall pay
Aventis the Rx Tail Buyout Price in readily available U.S.
________________________________________________________________________________
Page 25
Dollars. Upon the payment to Aventis of the Rx Tail Buyout
Price, this Agreement shall terminate.
(c) This Section 2.7.5 shall terminate and no longer be in
force or effect upon the earlier to occur of:
(i) A Forced OTC Switch, or
(ii) A Voluntary OTC Switch in which Aventis is
performing substantially all of the
commercialization activities for the VP Product
Exclusivity Unit(s) subject to the Voluntary OTC
Switch.
2.8 Extra-Territorial Licensing. ViroPharma shall use its commercially
reasonable efforts to assist Aventis, at Aventis' expense for
ViroPharma's pre-approved and documented out-of-pocket costs, in
acquiring from SaSy rights for Aventis to: (a) develop, use, sell,
offer for sale, have sold, make and have made, import and export, any
VP Product in Japan, and (b) market and/or promote any VP Product
outside the Territory and Japan. Upon, and to the extent of, the
acquisition from SaSy, by Aventis, of rights to make and have made VP
Compounds or VP Products outside the Territory, then to the extent
permitted by SaSy, by the SaSy Agreement and any agreement with a
Product Supplier, and to the extent not unreasonably disruptive to
ViroPharma, ViroPharma will use commercially reasonable efforts to
transfer technology for manufacturing VP Compounds and VP Products
from Product Suppliers or ViroPharma to Aventis. Aventis shall
reimburse ViroPharma's pre-approved and documented out-of-pocket costs
for such technology transfer.
2.9 Section 365(n) of the Bankruptcy Code. All rights and licenses granted
under or pursuant to any section of this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code, licenses of rights to "intellectual property" as
defined under Section 101(35A) of the Bankruptcy Code. The Parties
shall retain and may fully exercise all of their respective rights and
elections under the Bankruptcy Code. Upon the bankruptcy of any Party
to which 365(n) applies, the non-bankrupt Party shall further be
entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property to which it is otherwise
entitled under this Agreement, and such, if not already in its
possession, shall be promptly delivered to the non-bankrupt Party,
unless the bankrupt Party elects to continue, and continues, to
perform all of its obligations under this Agreement.
3. MANAGEMENT OF COLLABORATION.
3.1 Compliance with Laws. The Parties shall perform all activities under
this Agreement in compliance with all Laws and with any applicable
professional standards.
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Page 26
3.2 Cooperative Activities Generally. Subject to the other provisions of
this Agreement, each Party shall use commercially reasonable efforts
to perform each of its obligations under this Agreement including,
without limitation, the intent of maximizing the financial return to
the Parties hereunder, and acting in a manner that is otherwise in the
best interests of the collaboration formed hereunder. Each Party shall
perform its obligations under this Agreement in good faith and with
fair dealing.
3.3 Joint Steering Committee.
3.3.1 The Parties shall establish a Joint Steering Committee which
shall have as its overall purpose the development,
implementation and management of commercial planning activities
and research and development programs with respect to VP
Compounds and VP Products, each consistent with the other. The
Joint Steering Committee shall have such subcommittees (in
addition to the Marketing Subcommittee, the Development
Subcommittee, the Finance Subcommittee and the Supply Chain
Subcommittee described below) as the Parties or the JSC may
mutually agree from time to time hereafter. The JSC shall
consist of a number of from two (2) to ten (10) representatives
from each Party drawn from among such Party's senior managers.
Within thirty (30) days after the Effective Date each Party
shall appoint two (2) members to the JSC. Either Party may
replace one or more of its members on the JSC by providing
notice to the other Party. The JSC shall, in addition to such
other responsibilities as are assigned to it herein, review the
activities of the Marketing Subcommittee, the Development
Subcommittee, the Finance Subcommittee, the Supply Chain
Subcommittee and any other subcommittees formed from time to
time, and seek to resolve any matter upon which any such
subcommittee is unable to make a decision, except as otherwise
provided herein. Among its other responsibilities, but without
limitation, the JSC solely shall be responsible for:
(a) approving any proposed Commercialization Plan and Budget,
including the long term forecast made pursuant to Section
6.4.10, and Development Plan and Budget submitted to it by
the Marketing Subcommittee or the Development
Subcommittee,
(b) approving any proposed material amendment to any
Commercialization Plan and Budget, including the long term
forecast made pursuant to Section 6.4.10, and Development
Plan and Budget submitted to it by the Marketing
Subcommittee or the Development Subcommittee,
(c) managing the VP Product life cycle and intellectual
property protection, and identifying the extent to which
any Intellectual Work Product likely to result from
development activities being
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Page 27
considered by the JSC would be subject to ownership or
Control by a Third Party, consistent with Section 10.1.2;
(d) approving any and all prices for VP Product throughout the
Territory proposed by the MSC including any and all ranges
of discount amounts within which the MSC shall have
discretion to operate, and any material changes to the
Aventis Trade Policy affecting the treatment of VP Product
returns and refunds,
(e) approving the list of VP Product Target Prescribers, the
allocation of Details to be performed by each Party among
VP Product Target Prescribers, and any material changes to
such allocation,
(f) approving the Launch Date proposed by the MSC, and the
date of launch of any subsequent VP Product Exclusivity
Unit throughout the Territory,
(g) reviewing and approving any plans and budgets prepared
jointly by the MSC and the DSC for any Phase 3b Studies,
Phase 4 Studies, or health outcome studies for VP Product,
(h) approving any study protocol and any material amendment
thereto for any phase 3 study (including Phase 3a Studies
and Phase 3b Studies) for the Second Indication;
(i) for any Other Indication and any Additional Indication,
approving any clinical study protocol, and material
amendments thereto for phase 2 or phase 3 study activities
performed under this Agreement,
(j) approving the recommendation of the SCSC for new Product
Suppliers, subject to approval by SaSy,
(k) for any Other Indication and any Additional Indication,
approving any INDs and NDAs to be submitted to Regulatory
Authority and any material labeling changes to any VP
Product.
3.4 Marketing Subcommittee.
3.4.1 Formation and Meetings. The JSC shall establish a Marketing
Subcommittee which shall have as its overall purpose the
development and implementation of commercialization activities
for VP Products in the Territory. The Marketing Subcommittee
shall consist of a number of from two (2) to four (4), as
determined by the JSC, representatives from each Party drawn
from among such Party's senior sales and marketing managers.
Each Party shall assign members to the Marketing Subcommittee
at the request of the JSC, and each Party may replace one or
more of such members by providing notice to the other Party.
________________________________________________________________________________
Page 28
3.4.2 Duties. The Marketing Subcommittee shall:
(a) prepare, and review on a quarterly basis, the
Commercialization Plan and Budget, subject to the final
approval of the Commercialization Plan and Budget by the
JSC; and
(b) subject to, and within the constraints of, any approved
Commercialization Plan and Budget:
(i) oversee the implementation of the Commercialization
Plan and Budget, and ensure that each Party
executes its responsibilities described in such
Commercialization Plan and Budget;
(ii) develop and discuss strategies for the Detailing
and marketing of VP Products in the Territory,
including allocation of responsibility for
marketing activities, and support through
professional education;
(iii) in collaboration with the DSC, deciding whether to
perform, and then preparing any plans and budgets
for any ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Studies, and
health outcome studies for VP Product;
(iv) propose to the JSC the Launch Date, and the date of
launch for any subsequent VP Product;
(v) propose to the JSC the price for VP Product
throughout the Territory and any and all ranges of
discount amounts within which the MSC shall have
discretion to operate, and any material changes to
the Aventis Trade Policy affecting the treatment of
VP Product returns and refunds, and establish the
conditions of distribution and sale of VP Product;
(vi) propose to the JSC the list of VP Product Target
Prescribers and the allocation of Details to be
performed by each Party among VP Product Target
Prescribers, or material changes to such
allocations previously approved by the JSC;
(vii) develop and agree upon strategies and procedures
for, and give approval to, the use of Third Parties
to perform commercialization activities other than
Distribution, manufacturing, and with respect to
the use of CSOs, subject to Section 5.5.3;
(viii) review progress of commercialization activities
against the current Commercialization Plan and
Budget;
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Page 29
(ix) review the rate of spending on commercialization
activities against the budget for such activities
in the Commercialization Plan and Budget;
(x) propose the long term forecasts of VP Product
needs pursuant to Section 6.4.10 for approval by
the JSC;
(xi) prepare short term forecasts of VP Product needs
pursuant to Section 6.4.11;
(xii) compare actual VP Product sales against sales
forecasts and targets set out in the
Commercialization Plan and Budget;
(xiii) consider, and propose to the JSC, potential
amendments to the Commercialization Plan and
Budget;
(xiv) establish working groups to implement the
Commercialization Plan and Budget;
(xv) present the results of commercialization efforts
to the JSC;
(xvi) undertake all other activities necessary to manage
the marketing and sale of VP Product in the
Territory;
(xvii) any other duties that are delegated to the
Marketing Subcommittee by the JSC; and
(c) review and comment on the semi-annual report on the
Parties' commercialization activities under this Agreement
prepared by ViroPharma, for submission to SaSy.
3.5 Development Subcommittee.
3.5.1 Formation and Meetings. The JSC shall establish a Development
Subcommittee which shall have as its overall purpose the
development, implementation and management of development
activities for VP Compounds and VP Products in the Territory.
The Development Subcommittee shall consist of a number of from
two (2) to four (4), as determined by the JSC, representatives
from each Party drawn from among such Party's senior
development managers. Each Party shall assign members to the
Development Subcommittee at the request of the JSC, and each
Party may replace one or more of such members by providing
notice to the other Party.
3.5.2 Duties. The Development Subcommittee shall:
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(a) prepare, and review on a quarterly basis, the Development
Plan and Budget, subject to the final approval of the
Development Plan and Budget by the JSC;
(b) subject to, and within the constraints of any approved
Development Plan and Budget, and to the extent applicable
to Sections 3.5.2(b)(ii-iii), any approved
Commercialization Plan and Budget:
(i) oversee the implementation of the Development Plan
and Budget, and ensure that each Party executes its
responsibilities described in such Development Plan
and Budget;
(ii) in collaboration with the MSC, decide whether to
perform, and then prepare any plans and budgets for
any ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇ Studies, and health
outcome studies for VP Product
(iii) implement, and review the progress of studies of VP
Product, including Phase 3b ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇
Studies, and health outcome studies;
(iv) review the rate of spending on development
activities against the budget for such activities
in the Development Plan and Budget;
(v) review the filing of any INDs and submission of
protocols to such INDs;
(vi) review the filing of any NDAs, to the extent
provided for in Section 7.1.1;
(vii) present the results of development efforts to the
JSC;
(viii) undertake all other activities necessary to manage
the development of VP Product in the Territory; and
(ix) consider, and propose to the JSC, potential
amendments to the Development Plan and Budget; and
(x) any other duties that are delegated to the
Development Subcommittee by the JSC;
(c) review and comment on the semi-annual report on the
Parties' development activities under this Agreement
prepared by ViroPharma, for submission to SaSy.
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Page 31
3.6 Finance Subcommittee.
3.6.1 Formation and Meetings. The JSC shall establish a Finance
Subcommittee which shall have as its overall purpose the
management of finance and accounting matters for activities of
the Parties under this Agreement. The Finance Subcommittee
shall consist of two (2) representatives from each Party with
financial and accounting expertise assigned to such
subcommittee by each Party. Each Party may replace one or more
of such members by providing notice to the other Party.
3.6.2 Duties. The Finance Subcommittee shall:
(a) assure the prompt sharing between the Parties of accurate
financial information regarding activities under this
Agreement;
(b) provide advice to the JSC and other subcommittees of the
JSC regarding the allocation of resources by the Parties;
(c) establish a method for recording the Development Costs and
Commercialization Expenses attributable to the development
and commercialization of VP Product for each indication;
(d) agree on the application as appropriate of United States
Generally Accepted Accounting Principles to the accounting
of the Parties with respect to activities under the
Agreement;
(e) to the extent applicable, agree on the inclusion in
Commercialization Expenses of the cost for the Product
Supplier of Finished VP Product to ▇▇▇▇ for the full Cost
of Goods for Finished VP Product, including costs of
manufacturing activities not performed by such final
Product Supplier;
(f) provide input and review all budgets proposed by any other
subcommittee under this Agreement;
(g) review the rate of spending by the Parties compared to the
applicable budget for such activities; and
(h) establish performance goals and requirements and perform
reviews to determine if the Parties meet the applicable
performance goals and requirements.
3.7 Supply Chain Subcommittee.
3.7.1 Formation and Meetings. The JSC shall establish a Supply Chain
Subcommittee which shall have as its overall purpose the
management of
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Page 32
the supply of VP Product to the Parties under this Agreement.
The Supply Chain Subcommittee shall consist of a number of from
two (2) to four (4) representatives from each Party with
manufacturing and supply expertise assigned to such
subcommittee by each Party. Each Party may replace one or more
of such members by providing notice to the other Party.
3.7.2 Duties. Subject to the terms of this Agreement, except as
otherwise provided in Section 6.2, the Supply Chain
Subcommittee shall:
(a) oversee and manage the ordering, manufacture and supply of
Finished VP Product to the Parties in accordance with the
forecast supplied by the MSC,
(b) prepare a supply plan coordinating the entire supply chain
to support the Development Plan and Budget and the
Commercialization Plan and Budget,
(c) propose new Product Suppliers to the JSC for approval;
(d) oversee all manufacturing of VP Compound, all micronizing
of VP Compound, and all manufacturing and packaging of VP
Product,
(e) make all necessary adjustments to the manufacturing
schedules to ensure meeting the requirements of the
Commercialization Plan and Budget with respect to supply
of Finished VP Product,
(f) schedule the shipment of Finished VP Product to Aventis,
(g) manage all inventory levels of VP Compound and VP Product,
(h) manage any and all rejections of VP Compound or VP Product
along the entire supply chain,
(i) identify and take actions to prevent potential
interruptions of VP Product supply,
(j) perform capacity analysis,
(k) plan and implement process improvements, cost reduction
initiatives, logistics initiatives, and environmental
health and safety initiatives, and
(l) oversee and implement all Quality Assurance, Quality
Control and GMP activities.
________________________________________________________________________________
Page 33
3.8 Meetings.
3.8.1 Chairperson and Secretary. The chairperson of the JSC and of each
subcommittee shall be selected from among the members of the JSC or
the subcommittee, as applicable, and shall serve a one-year term.
ViroPharma will select the first chairperson of the JSC, the
Development Subcommittee, and the Supply Chain Subcommittee, and
Aventis will select the first chairperson of the Marketing
Subcommittee and Finance Subcommittee, and the selection of
chairpersons shall alternate annually between the Parties
thereafter. The chairperson will be responsible for scheduling
meetings of the committee or subcommittee, preparing agendas for
meetings, and sending all committee or subcommittee members notices
of all regular meetings and agendas for such meetings at least five
(5) business days before such meetings. The chairperson shall
appoint a secretary for the committee or subcommittee who shall not
be a member thereof, and who will record the minutes of each
meeting, circulate copies of meeting minutes to the Parties and each
committee or subcommittee member promptly following the meeting for
review, comment and approval and finalize approved meeting minutes
before the next meeting.
3.8.2 Attendance, Voting and Authority. Meetings of the JSC or one of its
subcommittees shall be effective only if at least one representative
of each Party designated to represent such Party on the JSC or such
subcommittee is in attendance or participating in the meeting.
Members of the JSC and its subcommittees shall have the right to
participate in meetings by telephone. Representatives of either
Party who are not members of the JSC or any subcommittee may attend
meetings of such committee or subcommittee with the consent of the
committee members of the other Party. Third Parties may attend or
present at meetings of the JSC or any subcommittee only with the
prior consent of the entire committee or subcommittee. Each Party
shall have one (1) vote at meetings of the JSC or any of its
subcommittees.
3.8.3 Frequency of Meetings; Timing of Meetings. The JSC and each
subcommittee shall meet with such frequency and at such times and at
such places as the members of the JSC or such subcommittee shall
determine, but not less often than twice per Calendar Year for the
JSC and DSC, and at least quarterly for the MSC, FSC and SCSC.
3.8.4 Expenses. Each Party shall be responsible for lodging and travel
expenses incurred by its employees and its members of the JSC and
subcommittees attending or otherwise participating in such meetings.
Any common expenses for such meetings shall be shared equally
between the Parties.
3.9 Budgets. The initial process to begin preparing each budget required under
this Agreement shall begin sufficiently early so that a draft budget can be
submitted to the JSC for review no later than August 31 of the year
preceding the Calendar
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Page 34
Year to which such budget applies. Each Party will reasonably cooperate
with each other to finalize the budgets in a time period consistent with
the Parties' internal budgeting process; provided, however, that each
budget shall be finalized and approved by the JSC no later than December
15 of the year in which such budget is submitted to the JSC. Each budget
required under this Agreement shall be subject to the review of the
Finance Subcommittee.
3.10 Decision Making and Dispute Resolution.
3.10.1 Subcommittees.
(a) MSC. All decisions of the MSC shall be made consistent with,
and within the financial constraints of, the then-applicable,
approved Commercialization Plan and Budget. All decisions of
the MSC shall be made by unanimous decision of the Parties,
except that if the MSC is unable to reach unanimous decision
on any issue, the Aventis representatives on the MSC shall
have the deciding vote, except:
(i) for such matters as are reserved for the approval of the
JSC, and
(ii) as otherwise provided for in Section 3.10.6.
Notwithstanding the foregoing, except for Sections
3.10.1(a)(i-ii), day-to-day operational activities required
to be performed in the ordinary course may be implemented by
Aventis without the prior consent of the MSC so long as
consistent with and within the financial and operational
constraints of the then-applicable approved Commercialization
Plan and Budget.
(b) DSC. All decisions of the DSC shall be made consistent with,
and within the financial constraints of, the then-applicable,
approved Development Plan and Budget. All decisions of the
DSC shall be made by unanimous decision of the Parties,
except that if the DSC is unable to reach unanimous decision
on any issue, the ViroPharma representatives on the DSC shall
have the deciding vote, except
(i) for such matters as are reserved for the approval of
the JSC,
(ii) as to the outsourcing to Third Parties of development
activities for amounts greater than ****** (******) per
contract, and
(iii) as otherwise provided in Section 3.10.6.
Notwithstanding the foregoing, except for Sections
3.10.1(b)(i-ii),
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Page 35
day-to-day operational activities required to be performed in
the ordinary course may be implemented by ViroPharma without
the prior consent of the DSC so long as consistent with and
within the financial and operational constraints of the then-
applicable approved Development Plan and Budget.
(c) JSC, Finance Subcommittee, and Supply Chain Subcommittee. All
decisions of the JSC, the Finance Subcommittee and the Supply
Chain Subcommittee shall be made by unanimous decision of the
Parties.
3.10.2 JSC. If for any reason a subcommittee of the JSC is unable to
reach a decision that requires unanimity in accordance with
Section 3.10.1 within a reasonable period of time, but in no event
to exceed thirty (30) days, the matter shall be referred to the
JSC for resolution. All decisions of the JSC shall be made by
unanimous decision of the Parties.
3.10.3 Heads of Commercial Operations. If for any reason the Joint
Steering Committee cannot reach a unanimous decision on any matter
within a reasonable period of time, but in no event to exceed
thirty (30) days, or if the JSC cannot reach a decision on any
matter referred to it pursuant to Section 3.10.2 within thirty
(30) days of such matter being referred to it, then the matter
shall be referred to ViroPharma's head of Commercial Operations
and Aventis' head of U.S. Commercial Operations for good faith
resolution, except as otherwise provided in Section 3.10.6.
3.10.4 Final Internal Dispute Resolution. If for any reason ViroPharma's
head of Commercial Operations and Aventis' head of U.S. Commercial
Operations cannot resolve a matter referred to them by the JSC
within thirty (30) days of such matter being referred to them,
then the matter shall be referred to ViroPharma's CEO and the Head
of Aventis North America for good faith resolution.
3.10.5 Arbitration. If for any reason ViroPharma's CEO and the Head of
Aventis North America cannot resolve a matter referred to them by
ViroPharma's head of Commercial Operations and Aventis' head of
U.S. Commercial Operations within thirty (30) days of such matter
being referred to them, then the matter will be referred for
binding arbitration as set forth in Article 16, except as
otherwise provided in Section 3.10.6.
3.10.6 Exceptions.
(a) If the DSC or the JSC is unable to decide any issue with
regard to the activities to be performed and the amounts to
be spent under the Initial Development Plan and Budget and
the amounts to be spent under Section 4.1.2(c), then such
items shall be implemented as written in this Agreement and
such issues shall not be subject to
________________________________________________________________________________
Page 36
the dispute resolution provisions of Sections 3.10.3, 3.10.4
or 3.10.5.
(b) If the MSC or the JSC is unable to decide any issue with
regard to the amounts to be spent pursuant to Section 5.3.1,
or the number of PDEs to be performed pursuant to Section
5.4.1, then such items shall be implemented as written in
this Agreement and such issues shall not be subject to the
dispute resolution provisions of Sections 3.10.3, 3.10.4 or
3.10.5, except that issues regarding the allocation of PDEs
between Aventis and ViroPharma and/or the number of PDEs to
be performed in the event that Section 5.4.1 does not apply
because ******, shall be subject to the dispute resolution
-----
provisions of Sections 3.10.3, 3.10.4 and 3.10.5.
(c) If ViroPharma concludes that any Promotional Material does
not comply with the FD&C Act, then the Parties shall not use
such Promotional Material, Aventis' representatives on the
MSC shall not have the deciding vote on such matter, and such
matter shall not be subject to the dispute resolution
provisions of Sections 3.10.2, 3.10.3, 3.10.4 or 3.10.5.
(d) If ViroPharma's CEO and the head of Aventis North America are
unable to reach agreement on:
(i) the price to be charged for any VP Product in the
Territory, any range of discounts to be applied to such
price, or any material changes to the Aventis Trade
Policy affecting the treatment of VP Product returns or
refunds,
(ii) the selection after the Effective Date of any Product
Supplier other than those listed in Exhibit 6.4.7(a),
(iii) whether or not to initiate, continue or discontinue the
development of any VP Product for the First Indication,
the Second Indication, or any Other Indication or the
approval of any items in the Development Plan and
Budget (or any amendments to such plan and budget)
relating to such initiation or continued development,
except to the extent addressed in Section 3.10.6(a),
(iv) whether or not to implement a Voluntary OTC Switch,
(v) whether to initiate any study that would cause the
total Development Expenses spent for the Additional
Indications to exceed ****** dollars ($******) for a
single Additional Indication or ****** dollars
($******) for both Additional Indications or the
approval of any items in the Commercialization Plan and
Budget or the Development
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Plan and Budget (or any amendments to such plan and
budgets) relating to such initiation,
then neither Party shall have the sole right to make the
final decision and such issue shall not be subject to the
dispute resolution provisions of Sections 3.10.5.
4. DEVELOPMENT.
4.1 Development Program.
4.1.1 Generally. ViroPharma will perform all development activities
assigned to it in the Development Plan and Budget, either
itself, or through an Affiliate or, subject to Sections 2.5 and
3.10.1(b)(ii), a Third Party contractor, including, without
limitation, clinical or preclinical studies in order to obtain
initial Regulatory Approval of any VP Product and to support
future labeling changes or new indications of VP Products in
accordance with the Development Plan and Budget, and Phase 3b
Studies, Phase 4 Studies, and health outcome studies in order
to further the commercialization of VP Products in accordance
with the Commercialization Plan and Budget. The Development
Subcommittee will manage and oversee the implementation of
development activities under the Development Plan and Budget
and will select those indications and labeling enhancements to
be pursued under the Development Plan and Budget.
4.1.2 First, Second and Additional Indications. Notwithstanding
anything to the contrary in any Development Plan and Budget,
the Parties agree to develop the First Indication, the Second
Indication and Additional Indications as follows:
(a) First Indication. The Parties shall perform the studies
and other activities described in the Initial Development
Plan and Budget for VP Product for the First Indication.
(b) Second Indication. The Parties shall perform the
development activities through the end of the phase 2
studies described in the Initial Development Plan and
Budget for VP Product for the Second Indication. If such
phase 2 studies ****** in the United States ******, then
the JSC shall review the results from such studies ******.
If the JSC ******in the United States ******.
(c) Additional Indications. After the Effective Date, the JSC
shall approve an Indication Development Budget Milestone
of ****** dollars ($******) for the first Additional
Indication to receive Regulatory Approval in the U.S. and
******dollars ($******) for the second Additional
Indication to receive Regulatory Approval in the U.S. and
a Development Plan and Budget reflecting such
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Indication Development Budget Milestones. If an arbitrator
does not require the Parties to perform studies for the
Additional Indications, or if Aventis refuses to initiate
any study that would cause the total Development Expenses
spent for the Additional Indications to exceed ******
dollars ($******) for a single Additional Indication or
****** dollars ($******) for both Additional Indications,
then ViroPharma shall ******, and such ****** subject
****** under ******.
4.2 Development Efforts. To the extent development activities have been
delegated to a Party under the Development Plan and Budget, such Party
shall use commercially reasonable efforts to achieve the objectives and
milestones set forth in the Development Plan and Budget within the
timeframe set forth therein and to develop the VP Compounds into VP
Products. In furtherance of the foregoing, each Party shall deploy
sufficient personnel and other resources to achieve such milestones and
objectives set forth in the Development Plan and Budget.
4.3 Development Regulatory Activities. ViroPharma shall be solely responsible
for seeking and obtaining Regulatory Approval from Regulatory Authorities
to perform activities under the Development Plan and Budget, including,
without limitation, filing any INDs and submitting protocols to such INDs
as approved by the JSC as necessary. ViroPharma shall use commercially
reasonable efforts to extend the VP Product Exclusivity Period for each VP
Product. Within twenty (20) days after submission to FDA, ViroPharma shall
provide Aventis with copies of all material final submissions to such INDs
for studies performed under the Development Plan and Budget. Consistent
with Laws, up to three (3) Aventis representatives shall be permitted to
attend all meetings and conferences with any Regulatory Authority in the
Territory concerning VP Compounds or VP Products.
4.4 Development Plan and Budgets.
4.4.1 Initial Development Plan and Budget. The Development Plan and Budget
for all development activities for the First Indication and Second
Indication is attached to this Agreement as Exhibit 4.4.1 (the
"Initial Development Plan and Budget").
4.4.2 Subsequent Development Plan and Budgets. As early as necessary in
each year beginning with the first full Calendar Year after the
Effective Date, the Development Subcommittee shall commence the
process of preparing the Development Plan and Budget for the
following Calendar Year so that it can submit such proposed
Development Plan and Budget to the JSC no later than August 31 of
such year for review. In no event shall later Development Plans and
Budgets conflict with the Initial Development Plan and Budget
without the unanimous consent of the JSC. Each Development Plan and
Budget shall contain at minimum:
(a) a comprehensive VP Product development strategy;
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(b) a list and timeline for the performance of studies in support
of the development activities;
(c) an overall budget for development activities during the
relevant Calendar Year;
(d) a phase 3b and phase 4 clinical development plan established in
collaboration with the MSC, and in compliance with the
Commercialization Plan and Budget;
(e) a statement setting out for which, if any, of the Other
Indications the Parties intend to initiate or continue
development of VP Product during the relevant Calendar Year,
defining with specificity each such Other Indication; and
(f) a complete and comprehensive budget for the development of:
(i) each Additional Indication, and
(ii) each Other Indication, and
(iii) for each Other Indication for which ******, the
Indication Development Budget Milestone for such Other
Indication.
4.5 Development Funding.
4.5.1 Division of Expenses Generally. The Parties shall share the
Development Expenses as follows:
(a) First Indication and Second Indication. Aventis shall be
responsible for fifty percent (50%) and ViroPharma shall be
responsible for fifty percent (50%) of the Development Expenses
incurred in connection with the development of any VP Product
for the First Indication or for the Second Indication.
(b) Additional Indications. ViroPharma shall initially bear ******
the Development Expenses incurred in connection with the
development of any VP Product for any Additional Indication.
Upon Regulatory Approval of such VP Product for an Additional
Indication, Aventis shall pay ViroPharma the Indication
Development Budget Milestone for such Additional Indication as
set forth in Section 8.3. In addition, within thirty (30) days
of the payment of any Indication Development Budget Milestone:
(i) ViroPharma shall pay Aventis ****** (******) of the
amount by which the Indication Development Budget
Milestone exceeds the actual Development Expenses for
development activities provided for in the Development
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Plan and Budget or otherwise approved in advance by the
JSC for the development of the VP Product for the
Additional Indication for which the Indication
Development Budget Milestone was paid; and
(ii) Aventis shall pay ViroPharma ****** (******) of the
amount by which the actual Development Expenses for
development activities provided for in the Development
Plan and Budget or otherwise approved in advance by the
JSC for the development of the VP Product for the
Additional Indication for which the Indication
Development Budget Milestone was paid exceed the
Indication Development Budget Milestone. If Regulatory
Approval for such VP Product for such Additional
Indication is obtained after ******, the amount to be
paid by Aventis under this Section 4.5.1(b)(ii) shall be
reduced to the following percentages of the total set
forth in the previous sentence (the "Base Amount"):
Calendar Year During Which
Regulatory Approval of VP Percentage of the Base Amount
Product for Additional to be Paid by Aventis to
Indication Is Obtained ViroPharma
--------------------------- ------------------------
****** ******%
****** ******%
****** ******%
****** ******%.
(c) Other Indications. Before the JSC's approval of a Development
Plan and Budget that includes development activities of a VP
Product for any Other Indication, as such Other Indication has
been identified and defined by the Development Committee in
such Development Plan and Budget as set forth in Section
4.4.2(e), Aventis shall choose one of the two following funding
methods, which choice may not later be changed, and shall
notify the Finance Subcommittee of its choice, and if Aventis
has not notified the FSC of such choice by the date on which
the JSC approves the applicable Development Plan and Budget,
then Aventis shall be deemed to have chosen the funding method
described in Section 4.5.1(c)(ii):
(i) Aventis shall be responsible for ****** percent (******%)
and ViroPharma shall be responsible for ****** percent
(******%) of the Development Expenses incurred in
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connection with the development of such VP Product for
such Other indication; or
(ii) ViroPharma shall ****** bear ****** the Development
Expenses for such VP Product for such Other Indication,
and upon Regulatory Approval of such VP Product for such
Other Indication, Aventis shall pay ViroPharma the
Indication Development Budget Milestone for such Other
Indication as set forth in Section 8.3. In addition,
within thirty (30) days of the payment of any Indication
Development Budget Milestone:
a. ViroPharma shall pay Aventis ****** of the amount by
which the Indication Development Budget Milestone
exceeds the actual Development Expenses for
development activities provided for in the
Development Plan and Budget or otherwise approved in
advance by the JSC for the development of such VP
Product for such Other Indication for which the
Indication Development Budget Milestone was paid; and
b. Aventis shall pay ViroPharma ****** of the amount by
which the actual Development Expenses for development
activities provided for in the Development Plan and
Budget or otherwise approved in advance by the JSC
for the development of such VP Product for such Other
Indication for which the Indication Development
Budget Milestone was paid exceed the Indication
Development Budget Milestone.
4.5.2 Payment of Expenses; Development Account. Subject to
reconciliation as provided in Section 8.5, each Party shall be
responsible and pay for all Development Expenses incurred in
performing its obligations in connection with any development
activities under the Development Plan and Budget. Each Party
shall charge all such expenses so incurred to a separate
account created by it on its books and records solely for the
purpose of tracking Development Expenses, identifying all
Development Expenses by the VP Product and indication being
developed (the "Development Account").
4.5.3 Cost Overruns. Each month ViroPharma shall review Development
Expenses actually charged or to be charged to its Development
Account against the applicable Development Plan and Budget. In
the event that ViroPharma determines that any such actual or
anticipated expenses relating to the approved activities in the
Development Plan and Budget
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Page 42
will exceed the applicable Development Plan and Budget, it
shall promptly notify the DSC which shall meet as soon as
reasonably possible. The DSC shall review the reasonableness of
such expenses in light of the overall Development Plan and
Budget and shall propose an appropriate amendment, if
necessary, to the Development Plan and Budget to the JSC for
approval.
5. COMMERCIALIZATION.
5.1 General. Under the terms and conditions set forth herein and pursuant
to the licenses granted in Article 2, ViroPharma and Aventis shall
collaborate in the promotion, Detailing and Distribution of VP
Products in the Territory, including, without limitation, performing
epidemiological modeling, pharmacoeconomic, actual use and any other
Phase 3b Studies or Phase 4 Studies, subject to the Commercialization
Plan and Budget and the oversight of the Marketing Subcommittee.
5.2 Commercialization Efforts. To the extent commercialization activities
have been delegated to a Party under the Commercialization Plan and
Budget, such Party shall use commercially reasonable efforts to
achieve the objectives and milestones set forth in the
Commercialization Plan and Budget within the timeframe set forth
therein and to commercialize the VP Products. In furtherance of the
foregoing, each Party shall deploy sufficient personnel and other
resources to achieve such milestones and objectives set forth in the
Commercialization Plan and Budget.
5.3 Commercialization Plans and Budgets.
5.3.1 Initial Commercialization Plan and Budget. The Marketing
Subcommittee shall propose to the JSC a Commercialization Plan
and Budget for all marketing, sales and educational activities
up to the Launch Date within three (3) months after the
Effective Date (the "Initial Commercialization Plan and
Budget"). The Initial Commercialization Plan and Budget adopted
by the JSC shall provide for minimum funding by the Parties of
promotional activities, not including PDEs, as follows:
(a) at least ****** U.S. dollars (U.S. $******) from the
Effective Date through the end of Calendar Year ******,
(b) at least ****** U.S. dollars (U.S. $******) from ******
until ******,
(c) at least ****** U.S. dollars (U.S. $******) from ******
until the date ****** (******) ****** after ******.
If the Initial Commercialization Plan and Budget is not
finalized in accordance with this Section 5.3.1, then the
amounts described herein shall constitute such budget.
Notwithstanding the foregoing, if VP
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Page 43
Product to be launched on the Launch Date ******, then neither
party shall be required to spend the amounts set forth in this
Section 5.3.1, and instead, each Party shall be required to
spend the amounts determined by the JSC.
5.3.2 Subsequent Commercialization Plans and Budgets. As early as
necessary in each Calendar Year, the Marketing Subcommittee
shall begin the process of preparing a revised four-year
Commercialization Plan and Budget which shall include an
additional Calendar Year, so that it can submit such proposed
Commercialization Plan and Budget to the JSC no later than
August 31 of such year for review. Each Commercialization Plan
and Budget shall contain at minimum:
(a) a comprehensive market development, marketing, product
positioning, sales, supply, and distribution strategy for
VP Products in the Territory;
(b) the most recent long term forecasts of VP Product needs
prepared pursuant to Section 6.4.10;
(c) a budget for commercialization activities during the
relevant Calendar Years, including, without limitation,
allocations for advertising, promotional and educational
meetings and activities, Detail Cost of VP Product, field
force micro-marketing, alignment and direction,
distribution of Samples, and Phase 3b and Phase 4 Studies;
(d) the number and positioning of Details to be performed by
each Party in each month of each Calendar Quarter of such
Calendar Year in the Territory consistent with Section
5.4, and the number of Details on VP Product Target
Prescribers called upon;
(e) VP Product pricing and contracting strategies;
(f) a phase 3b and phase 4 clinical development plan
established in collaboration with the DSC;
(g) the managed care strategy and deployment plan; and
(h) the VP Product positioning and key message strategy.
5.4 Assigned Sales Force Effort. The MSC shall determine the number of
Details to be performed, the type of Details to be performed, and
shall allocate Details on VP Product Target Prescribers between
Aventis and ViroPharma for each Calendar Quarter in the Territory
consistent with the allocation set out in each approved
Commercialization Plan and Budget, and with the following standards:
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Page 44
5.4.1 Launch Details. Unless otherwise agreed to by the JSC, and
provided that quantities of VP Product and VP Product Samples
are available, the Parties shall perform, ******, if (i)
either (x) no sooner than three (3) months before the expected
Regulatory Approval of an NDA for VP Product for the Second
Indication, ViroPharma has requested that the JSC increase the
number of PDEs allocated to ViroPharma in a Calendar Quarter
for VP Products to a number that is at least 95% of the number
of PDEs assigned to Aventis for VP Products, or (y) the JSC
has approved an allocation of PDEs to ViroPharma that is at
least 95% of the number of PDEs assigned to Aventis for VP
Products, and (ii) ViroPharma has sufficient sales
representatives to perform such PDEs or (b) ******, if the
conditions in Section 5.4.1(a)(i-ii) are not met , in each
case ******. Notwithstanding the foregoing, if a VP Product
******, then ****** required to ****** set forth in this
Section 5.4.1 ****** each Party shall be required to ******.
At least ****** percent (******%) of the Primary Details of VP
Product required to be performed by either Party pursuant to
this Section 5.4.1 shall be made to VP Product Target
Prescribers.
5.4.2 Targeting. Each Party shall perform Details of VP Product
allocated to it by the Commercialization Plan and Budget only
to VP Product Target Prescribers that does not require a
geographical realignment of the sales representatives of such
Party, unless otherwise determined by the JSC.
5.4.3 Managed Care and Other National Account Allocation. Aventis
shall, using commercially reasonable efforts, perform all
visits to managed care accounts, trade accounts, government
accounts, and other national accounts.
5.4.4 Suspension for Low Pipeline Supply. If and for so long as, at
any time after the Launch Date, there is less than one week's
supply of VP Product in the pipeline at the wholesale level as
reported by IMS Pipeline, then the obligation to perform
Details, as set forth herein, shall be suspended, unless
otherwise determined by the MSC.
5.5 Detailing Effort.
5.5.1 Efforts. Each Party shall deploy sufficient sales
representatives to promote and Detail each VP Product in the
Territory effectively in accordance with the terms of this
Agreement and the applicable Commercialization Plan and
Budget. In conducting such promotion and Detailing, both
Aventis and ViroPharma shall use at least commercially
reasonable efforts consistent with the efforts it applies to
prescription drug products of comparable peak sales potential
in the U.S., and if the ****** of such VP Product ******,
consistent with the efforts it applies to prescription drug
products, with comparable ******, of comparable peak sales
potential in the U.S.
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Page 45
5.5.2 Beginning of Detailing. Each Party shall give prompt written notice
to the other of the date on which its sales representatives begin
Detailing any VP Product in the Territory.
5.5.3 Sales Representatives.
(a) All Details performed by each Party under this Agreement shall
be performed by sales representatives who are employees of such
Party or of such Party's Affiliates in the Territory, except
that either Party may use the services of a contract sales
organization ("CSO") to assist such Party in performing Details
as follows:
(i) If ViroPharma is promoting and Detailing an Aventis
Product pursuant to Article 9, ViroPharma may use a CSO
to perform PDEs in excess of ****** per year,
(ii) Aventis may use a CSO to perform PDEs in excess of ******
per year,
(iii) Any sales representative of such CSO performing Details
for either Party shall have at least six (6) months
experience performing Details in the pharmaceutical
industry and shall have received training comparable to
the training provided by a Party to its own sales
representatives.
Any Detail performed by an employee of such CSO consistent with
a Party's allocation under Section 5.4, this Section 5.5.3(a),
and the Commercialization Plan and Budget shall be considered a
Detail performed by such Party.
(b) Unless ****** before the Launch Date, then beginning on the
later of ****** or ******, at least ****** percent (******%) of
the Details performed by ViroPharma under this Agreement shall
be performed by sales representatives who have worked for
ViroPharma or its Affiliates in the Territory for at least six
(6) months. In the case of Aventis, beginning on the Launch
Date, at least ****** percent (******%) of the Details
performed by Aventis shall be performed by sales
representatives of Aventis who have worked for Aventis or its
Affiliates in the Territory in a primary care sales force for
at least six (6) months.
5.6 Detailing Performance Incentive. If either Party performs less than
******% of the PDEs assigned to it in any Calendar Quarter, such
Party shall pay to the other Party an amount equal to ****** (the
"Missed Detail Payment"). If a Party performs ******% or more, but
less than 100%, of the PDEs assigned to it, in lieu of paying the
Missed Detail Payment, such Party may make up such shortfall by
performing the same type and number of Details in another Calendar
Quarter selected by the non-defaulting Party. If such Party fails to
make up 100% of the
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Page 46
shortfall of PDEs in such other Calendar Quarter, then such Party
shall pay to the other Party the Missed Detail Payment for each PDE
that it failed to perform in such Calendar Quarter. Payments by a
Party under this Section 5.6 shall be made directly to the other
Party within sixty (60) days of the end of the applicable Calendar
Quarter. Any Missed Detail Payment shall not be treated as a
Commercialization Expense.
5.7 Detailing Reports and Record Retention.
5.7.1 Detail Metrics. The number of Details actually performed by
either Party shall be determined according to Detail
reporting mechanisms and methodology that are approved and
applied consistently by the Marketing Subcommittee.
Notwithstanding the foregoing, a Party shall be credited with
performing a Detail only if such Detail is performed in
accordance with the Commercialization Plan and Budget, the
Party's allocation under Section 5.4, and this Agreement
generally.
5.7.2 Reports.
(a) First Twelve Weeks. For the first twelve (12) weeks
after the Launch Date, each Party shall provide to the
other both a preliminary and final report of the number
of Details carried out by its representatives during
each week in such period. Preliminary reports shall be
delivered to the other Party no later than three (3)
weeks after the end of the applicable week and final
reports shall be delivered no later than six (6) weeks
after the end of the applicable week.
(b) First Two Years. After the end of the reporting period
of Section 5.7.2(a) and through the end of the first
full Calendar Year after the Launch Date, each Party
shall provide the other both a preliminary and final
report of the number of Details carried out by its
representatives during each month. Preliminary reports
shall be delivered to the other Party no later than
three (3) weeks after the end of the applicable month
and final reports shall be delivered no later than six
(6) weeks after the end of the applicable month.
(c) Thereafter. Beginning after the first full Calendar Year
after the Launch Date, for the Term of the Agreement,
each Party shall provide the other both a preliminary
and final report of the number of Details carried out by
its representatives during each Calendar Quarter.
Preliminary reports shall be delivered to the other
Party within three (3) weeks of the end of the
applicable Calendar Quarter and final reports shall be
delivered six weeks after the end of the applicable
Calendar Quarter.
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5.7.3 Detail Records. Each Party shall keep accurate and complete
records of each Detail performed by such Party, its Affiliates,
or permitted contract sales organizations under this Agreement
and shall make such records available for inspection, review
and audit by an independent certified public accountant
appointed by the other Party and reasonably acceptable to such
Party for the purpose of verifying the number of Details made
by such Party.
5.8 Commercialization Expenses; Funding.
5.8.1 Commercialization Expenses. Subject to the terms of this
Agreement, Aventis shall pay fifty-five percent (55%) and
ViroPharma shall pay forty-five percent (45%) of all
Commercialization Expenses incurred by either Party in the
Territory.
5.8.2 Payment of Expenses; Commercialization Accounts. Subject to
reconciliation as provided in Section 8.5, each Party shall be
responsible and pay for the Commercialization Expenses incurred
for any VP Product in the Territory. Each Party shall charge
all such expenses so incurred by it or its Affiliates to a
separate account created by such Party on its books and records
solely for the purpose of tracking Commercialization Expenses
incurred in connection with any VP Product in the Territory (a
"Commercialization Account"). Each Party shall submit to the
other Party a written summary of all Commercialization Expenses
incurred by it for any VP Product in the Territory as described
in Section 8.5.1.
5.8.3 Reimbursement of Commercialization Expenses.
(a) Reimbursement Principles. Within the timeframe described
in Sections 8.5.3 and 8.5.4, Commercialization Expenses:
(i) properly charged by such Party to its
Commercialization Account,
(ii) reported to the other Party in accordance with this
Section 8.5.1, and
(iii) on a VP Product-by-VP Product basis, attributable to
the sale of such VP Product in the Territory,
shall be reimbursed in accordance with the principles of
Sections 8.5.3 and 8.5.4.
5.9 Sales Force Compensation.
5.9.1 Compensation Plan. Each Party shall pay incentive compensation
to its sales representatives having primary responsibility for
Detailing VP Products with respect to sales of VP Product in
the Territory. Each Party
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Page 48
shall implement an incentive product weighting for its sales
representatives for VP Product in its sales force incentive
plan ("SICP") generally consistent with incentive weighting
given to its sales representatives for its other primary care
products which are assigned the same product Detail position
as the VP Product is assigned in the Commercialization Plan
and Budget.
5.10 Customer Orders and Distribution.
5.10.1 Generally. Except as contemplated or set forth elsewhere in
this Agreement, including, without limitation, Article 6,
Aventis shall have the sole right to:
(a) receive, accept and fill orders for Finished VP Product
(b) control invoicing, order processing and collection of
accounts receivable for Finished VP Product sales,
(c) record Finished VP Product inventory in its books of
account,
(d) record Finished VP Product sales in its books of
account,
(e) perform all activities required for the Distribution of
any Finished VP Product, and
(f) establish and modify the commercial terms and conditions
with respect to the Distribution of Finished VP Product,
other than the price for Finished VP Product including
any and all ranges of discount amounts within which the
MSC shall have discretion to operate, and any material
changes to the Aventis Trade Policy affecting the
treatment of Finished VP Product returns and refunds.
5.10.2 Misdirected Customer Orders. If, for any reason, ViroPharma
receives customer orders for Finished VP Product, ViroPharma
shall forward such orders to Aventis, or if directed by
Aventis to Aventis' wholesalers, as soon as practicable.
5.10.3 VP Product Returns. If any quantities of Finished VP Product
are returned to ViroPharma, ViroPharma shall immediately
notify Aventis and ship them to the facility designated by
Aventis. All returns of Samples used by ViroPharma's field
force shall first be returned to ViroPharma who shall ship
them to Aventis.
5.11 Promotional Materials.
5.11.1 Development and Production. The Marketing Subcommittee shall
create and develop advertising, promotional, educational and
communication materials for marketing, advertising and
promotion of VP
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Product for Distribution to independent Third Parties
(including medical professionals) and to ViroPharma's and
Aventis' respective sales forces in accordance with the terms
of the Commercialization Plan and Budget (the "Promotional
Materials"). A committee consisting of representatives of
each of the legal, regulatory and medical departments of
ViroPharma, and of Aventis, if requested by Aventis, (the
"LRMC") shall review such Promotional Materials to confirm
their compliance with Laws. Promotional Materials shall be
approved by the LRMC only by the unanimous consent of the
representative on the LRMC. The MSC shall only release for
marketing, advertising and promotion of VP Product such
Promotional Materials approved by the LRMC. The Marketing
Subcommittee shall ensure that adequate Promotional Materials
are provided to each Party's respective sales forces.
5.11.2 Limitation. Each Party shall use only Promotional Materials,
labels and labeling relating to VP Product created and
approved in accordance with Section 5.11.1. Neither Party may
independently create, distribute or use Promotional
Materials, labels or labeling relating to VP Product without
the prior written consent of either the Marketing
Subcommittee or the other Party.
5.11.3 Recalls and Corrections of Promotional Materials. The Parties
shall share equally all costs resulting from the failure of
Promotional Materials approved by the LRMC to comply with
Laws. Any such costs, including, without limitation, costs
for recalls of, or other corrections of, any Promotional
Materials shall be treated as a Commercialization Expense.
5.12 Promotional Claims. Each Party shall limit the claims of safety and
efficacy that such Party or its sales force makes for VP Product to
those that are consistent with the approved labeling for such VP
Product in the Territory. Neither Party may add, delete or modify
claims of efficacy or safety in its promotion of VP Product in the
Territory nor make any changes in Promotional Materials created and
approved in accordance with Section 5.11.1.
5.13 Samples of VP Product.
5.13.1 General. Samples shall be allocated between the Parties based
on the number and type of Details each Party is required to
undertake pursuant to the Commercialization Plan and Budget.
Aventis and ViroPharma shall use Samples strictly in
accordance with the then current Commercialization Plan and
Budget and shall distribute Samples in full compliance with
all applicable Laws, including, without limitation, the
requirements of the Prescription Drug Marketing Act of 1987,
as amended (the "PDMA"). Each Party, or a Third Party chosen
by such Party, shall maintain those records required by the
PDMA and all other Laws. ViroPharma shall be solely
responsible for filing any necessary reports to FDA in
connection with the PDMA.
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5.13.2 Cost of Samples. The cost per Sample distributed in each
Calendar Quarter shall be calculated consistent with the
definition of Cost Of Goods.
5.13.3 Return of Samples. Within thirty (30) days after the
termination or expiration of this Agreement for any reason,
Aventis shall return, or otherwise dispose of in accordance
with instructions from ViroPharma, all remaining Samples and
will provide ViroPharma with a certified statement that all
remaining Samples have been returned or otherwise properly
disposed of and that Aventis is no longer in possession or
Control of any such Samples in any form or fashion.
5.14 Training and Sales Meetings.
5.14.1 Training of Sales Representatives. Each Party shall be
responsible for the training of its own sales representatives
at its own costs, in accordance with the training requirements
and training programs and using training materials approved by
the Marketing Subcommittee, and shall require each of its
professional sales representatives to attend sales training
for VP Product before their promotion of such VP Product in
the Territory. After the initial training meeting, each Party
shall periodically provide additional training, in accordance
with the training requirements and training programs and using
training materials approved by the Marketing Subcommittee, to
each of its professional sales representatives promoting VP
Product hereunder. At the discretion and upon approval of the
Marketing Subcommittee, any such training meetings may be held
jointly by the Parties. In any case, either Party may send
representatives to observe training provided by the other
Party to such other Party's sales representatives.
5.14.2 Launch Meetings. The Parties shall make reasonable efforts to
hold a joint launch meeting for the launch of VP Product.
5.15 Compliance. In detailing and promoting VP Product in the Territory,
each Party shall comply and shall cause each of its employees,
representatives and agents, including, without limitation, each of its
professional sales representatives, to comply with all Laws and all
professional requirements including, without limitation, FDA's
regulations and guidelines concerning the advertising of prescription
drug products, the American Medical Association's Guidelines on Gifts
to Physicians, the PhRMA Guidelines for Marketing Practices, the ACCME
Standards for Commercial Support of Continuing Medical Education, and
the then current Commercialization Plan and Budget for VP Product.
Neither Party shall do anything that such Party knows or reasonably
should know would jeopardize the goodwill or reputation of either
Party or the reputation of VP Product.
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5.16 Commercialization Trademark Usage Guidelines. Before the Launch Date,
Aventis and ViroPharma shall consult with SaSy on the adoption of
guidelines for correct Trademark usage (the "Guidelines"). The final
content of the Guidelines shall be at the discretion of SaSy.
ViroPharma and Aventis shall conform to the Guidelines in using the
Trademarks. Upon SaSy's request, such request not to be made more
than two times in any Calendar Year, or if ViroPharma and Aventis
propose to use the Trademarks other than in conformance with the
Guidelines, ViroPharma shall submit to SaSy samples of any
Promotional Materials, labels or labeling bearing the Trademarks.
Upon notification by SaSy within fifteen (15) days after SaSy's
receipt of such samples of any improper usage of Trademarks therein,
ViroPharma and Aventis shall make reasonable modifications to correct
such improper Trademark usage. Following such modifications, or if
SaSy has not issued a notification as provided above, ViroPharma and
Aventis may use such Promotional Materials, labels or labeling in
connection with VP Product, and may modify the same provided that
there is no change in the usage of the Trademark. The Parties
acknowledge that SaSy owns the Trademarks and that SaSy may require
modifications to packaging and promotional materials to the extent
necessary to ensure Trademark usage in accordance with the
Guidelines. All use by ViroPharma and Aventis of the Trademark shall
inure solely to SaSy.
5.17 Combination Products. The Parties acknowledge that the development
and/or commercialization of a Combination Product is subject to the
prior approval of SaSy under the SaSy Agreement. If the Parties
desire to develop and/or commercialize a Combination Product,
ViroPharma agrees to use commercially reasonable efforts to obtain
the consent of SaSy to such development and/or commercialization by
ViroPharma and Aventis under this Agreement.
6. VP PRODUCT SUPPLY.
6.1 Supply of VP Product, Pursuant to the terms of this Agreement:
6.1.1 ViroPharma agrees to have manufactured and packaged Finished
VP Product for sale and Distribution by Aventis and sampling
by the Parties in the Territory in such quantities as is equal
to actual orders of Finished VP Product accepted by ViroPharma
or a Product Supplier for Finished VP Product, and
6.1.2 Aventis agrees to purchase for sale, sampling and Distribution
in the Territory from ViroPharma, or a Product Supplier(s) for
Finished VP Product, such quantities of Finished VP Product.
6.2 Special Provisions to Apply During the Initial Supply Period. This
provision 6.2 shall apply during the Initial Supply Period only and
this Section 6.2 shall cease to have effect after the Initial Supply
Period:
6.2.1 Firm Orders Before and After the Launch Date.
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(a) Before and after the Launch Date approved by the JSC, at least
five (5) days before the first day of each month, Aventis shall
order from Product Supplier(s) of Finished VP Product or from
ViroPharma, as applicable, Finished VP Product (by SKU) for
delivery to Aventis by the end of the second month after such
month (i.e., three (3) months and five (5) days after such
----
order), or such later date as is specified by Aventis (each such
order, an "Order"), but in the case of Orders made before the
Launch Date, in no event for delivery before the later of (i) the
Launch Date, and (ii) the date four (4) weeks after the date of
Regulatory Approval by the FDA of such VP Product. For the sake
of clarity, except as set forth in Section 6.2.3, Aventis shall
only be obligated to accept Finished VP Product.
(b) ViroPharma shall, or shall cause its Product Supplier of Finished
VP Product to, accept, or reject, as permitted in this Section
6.2.1, within five (5) business days any Order received from
Aventis and shall, or shall cause its Product Supplier of
Finished VP Product, to accept any Order for a number of units of
Finished VP Product up to ****** per cent (******%) of the number
of units of Finished VP Product forecasted in the short term
forecast to be delivered in the month of delivery, ******
(******) ****** prior to the date of delivery of such Order (the
"Maximum Order"). (For example, if in January the MSC forecasts a
required delivery of 100 units in ******, then the total of Firm
Orders for ****** placed five (5) days before ****** shall not
obligate ViroPharma to deliver more than ****** units by the end
of ******.) ViroPharma shall, or shall cause its Product Supplier
of Finished VP Product to, exert commercially reasonable efforts
to supply such quantities ordered by Aventis, which exceed the
Maximum Order. However ViroPharma or its designated Product
Supplier of Finished VP Product shall not be obligated to fulfill
such orders in excess of the Maximum Order by drawing down from
the ViroPharma safety stock of VP Compound, unless the SCSC
agrees thereto. The number of units ordered up to and including
the Maximum Order and, to the extent accepted by ViroPharma, any
number of units ordered in excess of the Maximum Order, shall be
a "Firm Order".
(c) Notwithstanding any other provisions of this Agreement,
ViroPharma shall not be obligated to accept Orders, including
Maximum Orders, for or supply quantities of Finished VP Product
in excess of the maximum amounts contractually required to be
manufactured by Product Suppliers of VP Compound, VP Product or
Finished VP Product.
6.2.2 Supply Failure.
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(a) Failure.
(i) ****** Supply Failure. If for any ****** (******) ****** in
any ****** (******) ****** the number of units (SKU) of
Finished VP Product delivered in each of such ****** is
less than ****** percent (******%) of the number of units
(SKU) in each Firm Order to be delivered in each such
******, then ViroPharma shall ****** after such ******
(******) ******, in which the amount of VP Product
delivered ****** is less than ****** percent (******%) of
the amount of the Firm Order to be delivered ******.
(ii) ****** Supply Failure. If for any ****** (******) ******
the number of units of Finished VP Product delivered in
each of such ****** is less than ****** percent (******%)
of the number of units (SKU) in each Firm Order to be
delivered in such ****** then ViroPharma shall ****** after
such ****** (******) ****** in which the amount of VP
Product delivered in ****** is less than ****** percent
(******%) of the amount of the Firm Order to be delivered
******, but only until such failure is remedied as set
forth in Section 6.2.2(b).
(iii) ******. ViroPharma shall be required to make no more ******
under this Section 6.2.2(a) in any ******, and such ******.
ViroPharma shall ****** such ****** within ****** for which
******.
(b) Remedy of ****** Supply Failure. A supply failure of the type
described in Section 6.2.2(a)(ii) shall be remedied after
******(******) ****** in which the amount of VP Product delivered
is ****** percent (******%) or more of the units (SKU) ordered in
Firm Orders to be delivered in each of such ******, and this
Section 6.2.2 shall cease to be in effect, until such time as
another Supply Failure occurs.
6.2.3 Purchase of Launch Stocks of VP Product. At any time after December
31, 2001, but prior to the Launch Date for the First Indication as
approved by the JSC, at ViroPharma's written request, Aventis shall
purchase from ViroPharma up to such amounts of VP Product in finished
packaged form ready for sale or sampling and distribution in the
Territory by Aventis, but without the product information insert or
outsert, which VP Product results from nine (9) batches of VP
Compound, each batch being approximately ****** (******) kg (the
"Aventis Launch Batches"), at the Cost of Goods (excluding the
validation costs) for such VP Product.
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Either a Product Supplier agreed to by ViroPharma and Aventis, or
Aventis, at its option, shall attach to or insert into such VP Product
any product information insert or outsert for such VP Product before
the Launch Date, subject to the overall rework coordination of
ViroPharma. The costs of such activity shall be charged to the
Commercialization Account of either Party, as applicable. ViroPharma
shall take, promptly after the Effective Date, those actions necessary
to permit Aventis to perform the activities described in this Section
6.2.3, including without limitation, listing Aventis in the NDA for
such VP Product.
6.2.4 Return of Aventis Launch Batches. If
(a) at any time before the Launch Date, (i) the remaining period of
time before the expiration date of the VP Product in the Aventis
Launch Batches is less than ****** (******) ******, or (ii) the
remaining period of time before the expiration date of any
Samples of VP Product in the Aventis Launch Batches is less than
****** (******) ******, or
(b) after the Launch Date, Aventis is not able to (i) sell the VP
Product in the Aventis Launch Batches before the remaining period
of time before the expiration date of the VP Product in the
Aventis Launch Batches is less than ****** (******) ******, or
(ii) distribute Samples of VP Product in the Aventis Launch
Batches before the date which is ****** (******) ******before the
expiration date of such VP Product,
then ViroPharma shall at Aventis' request, repurchase from Aventis
such VP Product or Samples of such VP Product at ******, and shall pay
for such repurchased VP Product or Samples of VP Product within thirty
(30) days after the later of receipt or invoicing. ViroPharma shall
bear the cost of destruction or return of such VP Product or Samples
of such VP Product. None of the amounts expended by ViroPharma
pursuant to this Section 6.2.4 shall be charged to ViroPharma's
Commercialization Account.
6.2.5 Shelf Life. During the Initial Supply Period, ViroPharma shall bear
all costs associated with Finished VP Product and Samples of Finished
VP Product rejected by Aventis pursuant to Section 6.4.2, and shall
not charge such costs to its Commercialization Account.
6.2.6 Product Suppliers.
(a) To the extent permitted under a contract of ViroPharma (or any of
its Affiliates) with a Product Supplier or as expressly agreed to
by the Product Supplier, Aventis shall be invited to attend all
material
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Page 55
meetings, audits and inspections between ViroPharma and such
Product Supplier.
(b) Without the prior written consent of Aventis, ViroPharma shall
not:
(i) Make any election or exercise any right or option to
terminate in whole or in part any agreement with a
Product Supplier; or
(ii) Make any election (or fail to elect), exercise any right or
option (or fail to so exercise) or give any consent or
approval (or fail to give such consent or approval) under
any agreement with a Product Supplier which would
reasonably be expected to result in an increase in the Cost
of Goods of any VP Product.
6.3 After Initial Supply Period. After the Initial Supply Period, unless
otherwise provided for herein,
6.3.1 the Parties will collaborate on the management of the supply
chain of VP Compound, VP Product and Finished VP Product,
6.3.2 Aventis shall order from the Product Supplier of Finished VP
Product such number of units of Finished VP Product as
determined by the SCSC,
6.3.3 ViroPharma shall order such amounts of VP Compound as determined
by the SCSC,
6.3.4 the cost of any Finished VP Product rejected by Aventis under
Section 6.4.2 shall be shared as a Commercialization Expense,
but only to the extent that Section 6.4.12 does not apply,
6.3.5 only if the SCSC instructs ViroPharma to manufacture a certain
amount of VP Compound and VP Product, and if such amount of VP
Compound or VP Product, which was usable at the time of its
receipt by or on behalf of ViroPharma, becomes unusable before
it is converted into Finished VP Product, other than because of
loss or damage, then upon the date that such amount of VP
Compound or VP Product becomes unusable, ViroPharma shall be
permitted to charge the cost of such amount of VP Compound or VP
Product to its Commercialization Account,
6.3.6 the Parties shall share as a Commercialization Expense, the
risks and associated costs of any decisions made unanimously by
the SCSC,
To the extent any issue regarding the supply chain of VP Compound, VP
Product and Finished VP Product is not specifically addressed in this
Agreement, the
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SCSC shall collaborate to address and resolve such issue in a
reasonable and adequate manner.
6.4 General Provisions to Apply Throughout the Term of this Agreement. The
provisions of this Section 6.4 shall apply throughout the term of this
Agreement:
6.4.1 Generally. Aventis shall make payments to Product Supplier(s)
of Finished VP Product, or ViroPharma, as applicable, in U.S.
dollars within thirty (30) days after the later of receipt of
Finished VP Product or invoicing for such Finished VP Product,
and shall have the sole right and responsibility to hold all
inventory of such Finished VP Product. Aventis shall charge
all payments for Finished VP Product or VP Product of the
Aventis Launch Batches and/or Cost of Goods to its
Commercialization Account when such Finished VP Product or VP
Product of the Aventis Launch Batches is sold to Third
Parties.
6.4.2 Shelf Life. Aventis shall be entitled to reject any Finished
VP Product for which the remaining period of time before the
expiration date for such Finished VP Product on the date of
receipt by Aventis of such Finished VP Product is (a) less
than ****** (******) ****** if the Shelf Life for such VP
Product is at least ****** (******) ******, or (b) less than
****** (******) ****** if the Shelf Life for such Finished VP
Product is at least ****** (******) ******. Aventis shall
notify ViroPharma of its decision to reject or accept Finished
VP Product as provided for in this Section 6.4.2 within ten
(10) business days from receipt of such Finished VP Product.
If Aventis fails to notify ViroPharma of any such rejection
within such ten (10) business days, Aventis shall be deemed to
have accepted such Finished VP Product.
6.4.3 Invoicing. The Product Supplier of Finished VP Product or
ViroPharma, as applicable, shall invoice Aventis for the full
Cost of Goods of Finished VP Product ordered by Aventis
pursuant to Article 6.
6.4.4 Title and Risk of Loss. Title to, and risk of physical loss of
or damage to Finished VP Product or VP Product in the Aventis
Launch Batches shall pass to Aventis upon acceptance of tender
of delivery of such Finished VP Product or VP Product in the
Aventis Launch Batches to Aventis' facility or to any Third
Party's facility designated by Aventis. Title to, and risk of
physical loss of or damage to Finished VP Product or VP
Product in the Aventis Launch Batches shall remain with
ViroPharma before acceptance of tender of delivery of such
Finished VP Product or VP Product in the Aventis Launch
Batches to Aventis' facility or to any Third Party's facility
designated by Aventis. Any costs associated with physical loss
of or damage to Finished VP Product or VP Product in the
Aventis Launch Batches shall not be charged to either Party's
Commercialization Account.
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6.4.5 Receipt. Within five (5) days of receiving any shipment of VP
Product, Aventis shall inventory such shipment and confirm the
receipt of VP Product in the Aventis Launch Batches, and the amount
of Finished VP Product ordered in a Firm Order. Aventis shall
promptly notify ViroPharma of any discrepancies.
6.4.6 Release. ViroPharma shall be solely responsible for releasing
Finished VP Product to the market. ViroPharma shall perform or have
performed on ViroPharma's behalf any release testing on any Finished
VP Product or VP Product of Aventis Launch Batches and shall release
such Finished VP Product or VP Product of Aventis Launch Batches
prior to shipment to Aventis.
6.4.7 Suppliers
(a) Selection of Suppliers. The SCSC shall, without unreasonable
delay after the Effective Date, agree on the criteria for the
selection and qualification of Product Suppliers. On the basis
of such criteria the SCSC shall recommend to the JSC for
approval any Product Suppliers needed after the Effective Date
in addition to the suppliers listed in Exhibit 6.4.7(a)
attached hereto. All other decisions and actions to be taken
concerning Product Suppliers shall be made by the SCSC and no
Party shall take any unilateral actions with respect to any
such Product Supplier except as determined by the SCSC, and
except during the Initial Supply Period. ViroPharma shall
provide Aventis with copies of all draft agreements with
Product Suppliers for prompt review and comment by Aventis.
Notwithstanding anything to the contrary in this Section
6.4.7(a), ViroPharma shall be permitted unilaterally to enter
into an agreement with a Product Supplier listed in Exhibit
6.4.7(a), provided that ViroPharma makes good faith efforts to
incorporate reasonable comments provided by Aventis to
ViroPharma. ViroPharma may not become a manufacturer of VP
Compound, VP Product, or Finished VP Product without the prior
written approval of Aventis.
(b) Qualification of Suppliers. At the direction of the SCSC,
ViroPharma, and Aventis if Aventis so desires and to the extent
consistent with Aventis' rights under this Agreement, shall
enter into supply agreements with Product Suppliers. At the
direction of the SCSC, ViroPharma shall be solely responsible
for transferring technology to such Product Suppliers, and for
obtaining any necessary Regulatory Approval by the FDA for the
use of such Product Suppliers.
(c) Product Supplier Breach. If either Party believes that a
Product Supplier has breached any term of its agreement to
supply VP
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Compound, VP Product or Finished VP Product, the Party shall
promptly notify the SCSC. The SCSC shall consider whether to
take any action to enforce any rights under such agreement. At
the direction of the SCSC, ViroPharma shall use commercially
reasonable efforts to enforce such agreement. The Parties shall
share equally the costs of any activities under this Section
6.4.7(c) and any amounts received from Third Parties as a
result of such activities.
6.4.8 Finished VP Product Supplier Liaison and Ordering. Consistent with
Sections 6.2 and 6.3, Aventis shall order Finished VP Product from
a Product Supplier of Finished VP Product, except that, if
otherwise required, ViroPharma shall transmit such orders from
Aventis to a Product Supplier of Finished VP Product, and
ViroPharma shall be the liaison between the Parties and the Product
Supplier.
6.4.9 VP Compound Supplier Liaison. Consistent with Sections 6.2 and 6.3,
ViroPharma shall order VP Compound as required to fulfill Aventis'
orders of Finished VP Product.
6.4.10 Long-Term Forecasting. At least ninety (90) days prior to the
beginning of each Calendar Year (other than the Calendar Year
covering the period of time from the Effective Date through
December 31, 2001), the MSC shall submit to the JSC for approval a
forecast by Calendar Quarters of the quantities of Finished VP
Product (by SKU) that are needed to support the applicable
Commercialization Plan and Budget for each Calendar Quarter during
the three (3) Calendar Years period commencing with the upcoming
Calendar Year (or, if shorter, the remainder of the term of this
Agreement), for the Territory. Such forecasts shall be provided to
the SCSC. The Parties acknowledge that such long-term forecasts
shall represent reasonable good faith estimates for planning
purposes, but shall not be used for purchase or supply commitments.
6.4.11 Short-Term Forecasting. On a monthly basis, the MSC shall prepare a
rolling monthly forecast, of the quantities of VP Product (by SKU)
that are needed to support the applicable Commercialization Plan
and Budget for each month during the following twenty-four (24)
month period (or, if shorter, the remainder of the term of this
Agreement), for the Territory. Such forecasts shall be provided to
the SCSC.
6.4.12 Limitation on Charges to Commercialization Account of VP Product.
Except as provided in Section 6.3.5, any inventory of VP Compound,
VP Product or Finished VP Product held by ViroPharma shall be
included in Cost of Goods only to the extent that it is converted
into Finished VP Product and delivered to and accepted by Aventis,
and only in accordance with the definition of Cost of Goods, and
only then may it be charged to a Commercialization Account.
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6.4.13 Repackaging and Relabeling. Notwithstanding anything to the contrar
in this Agreement, Aventis shall have no right to repackage or
relabel any VP Product without the prior written consent of
ViroPharma or except as otherwise provided in Section 6.2.3.
6.4.14 Aventis' Option to Supply. At any time during the term of this
Agreement, if Aventis makes an offer on commercially reasonable
terms to become a Product Supplier, ViroPharma agrees to negotiate
in good faith to permit Aventis to become a Product Supplier with
respect to any or all of the steps required to manufacture VP
Compound, VP Products or Finished VP Products. ViroPharma shall not
unreasonably reject Aventis' offer to become a Product Supplier.
The Parties shall enter into a separate agreement if Aventis is
chosen to become a Product Supplier, subject to the consent of
SaSy, and/or shall amend this Agreement to the extent necessary.
6.4.15 Specifications, Analytical Methods, Testing. Throughout the term of
this Agreement, ViroPharma shall:
(a) develop or have developed (i) product specifications and (ii)
analytical test methods for VP Compound, VP product and
Finished VP Product,
(b) complete or have completed (i) routine stability testing and
(ii) product testing and release of VP Compound, VP Product
and Finished VP Product and
(c) be responsible for product specification change control of VP
Compound, VP Product and Finished VP Product.
6.4.16 Aventis Costs. The reasonable internal personnel cost and
associated out-of-pocket cost incurred by Aventis to complete
assessments of the Product Suppliers listed in Exhibit 6.4.7(a) and
to become familiar with the manufacturing processes, product
specifications, and laboratory procedures of VP Compound, VP
Product and Finished VP Product shall be charged to Aventis'
Commercialization Account, and the JSC shall be deemed to have
agreed to such charges.
6.4.17 Costs of Rejected Finished VP Product. The cost of Finished VP
Product properly rejected by Aventis because such Finished VP
Products does not conform to ViroPharma's representations and
warranties in Section 14.2.1(a-c).
6.4.18 Costs of Supply Chain Management. Either Party shall charge the
reasonable out-of-pocket cost incurred by such parties for
activities required for the joint management of the supply chain as
provided for in Section 6.3, to the extent approved by the SCSC.
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7. REGULATORY MATTERS.
7.1 Communication with Regulatory Authorities.
7.1.1 General. ViroPharma shall consult with Aventis through the
Development Subcommittee on the regulatory strategy to be
pursued for VP Compounds and VP Products. ViroPharma shall be
solely responsible for maintaining and seeking in its own name
Regulatory Approvals for VP Product, including all NDAs and all
additional or supplemental Regulatory Approvals, provided any
filings for Regulatory Approvals submitted after the Effective
Date are not inconsistent with the decisions of the Joint
Steering Committee or its subcommittees. ViroPharma shall be
solely responsible for filing all reports required to be filed
in order to maintain any Regulatory Approvals granted for VP
Product, including, without limitation, Adverse Drug Experience
reports. ViroPharma shall not make any submissions to any
Regulatory Authority concerning an NDA that are intended to
materially change or modify the label or labeling for, or the
indication of VP Product without first notifying and obtaining
the input of the full DSC. ViroPharma shall not make any
material submissions to any Regulatory Authority of an NDA, or
concerning an NDA, for VP Product for an Other Indication
without the approval of the JSC. At least thirty (30) days
before making any material submission to any Regulatory
Authority of an NDA, or concerning any NDA, for VP Product for
the Second Indication or any Additional Indication, ViroPharma
shall provide the JSC with a copy of such submission, and
ViroPharma shall adopt reasonable suggestions made by the JSC
to the extent feasible. Aventis shall cooperate with ViroPharma
as needed in preparing and filing all such reports and, upon
ViroPharma's request, provide ViroPharma with any information
in Aventis' possession or control that ViroPharma reasonably
deems to be relevant to any such reports.
7.1.2 ViroPharma Notification of Significant Regulatory Information.
ViroPharma shall promptly notify the Aventis members of the DSC
as soon as material information and data generated in the
course of the development program become available to
ViroPharma. ViroPharma will promptly provide the members of the
DSC with all such material information and data in order to
evaluate this progress in the development program.
7.1.3 Aventis Meeting Attendance. Consistent with Laws, Aventis shall
have the right to have up to three (3) of its representatives
attend all meetings and conferences and participate in all
material telephone discussions with any Regulatory Authority in
the Territory concerning VP Compounds or VP Products.
ViroPharma shall promptly provide Aventis' members on the DSC
with copies of all correspondence between ViroPharma and a
Regulatory Authority regarding VP Products or VP Compound, or
regarding the activities under this Agreement at least seven
(7) days before
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the submission of such correspondence, to the extent reasonably
feasible. ViroPharma shall adopt all reasonable material
suggestions and recommendations of Aventis concerning such
correspondence, to the extent feasible.
7.1.4 Inspections & Inquiries. If either Party or any of their
respective Affiliates is inspected by or receives inquiries
from a Regulatory Authority regarding activities under this
Agreement with regard to VP Compound, VP Product, or Finished
VP Product, such Party or the applicable Affiliate shall
promptly notify the other Party, but in no event more than
forty-eight (48) hours after such inspection or inquiry. The
inspected Party or its Affiliate shall provide the other Party
with a written report of any such inspection, noting with
specificity any record or document reviewed by the regulatory
inspector. When a copy of a document or record is supplied to
the inspector on request, that fact will be noted in the
report. The inspected Party or its Affiliate shall keep copies
of each of these records or documents in a separate inspection
file and, on the other Party's request, will provide such other
Party with copies of any or all of these documents or records.
7.1.5 Aventis Communications with Regulatory Authorities. If Aventis
reasonably concludes, after consultation with its regulatory
counsel, that Aventis must communicate with a Regulatory
Authority regarding Aventis' activities under this Agreement,
then Aventis shall so advise ViroPharma, and provide ViroPharma
with copies of all correspondence between Aventis and the
Regulatory Authority. Aventis shall provide ViroPharma with
copies of all correspondence, documents and materials received
from a Regulatory Authority concerning VP Compounds, VP
Products or any activities under this Agreement. Aventis shall
provide ViroPharma with copies of any proposed correspondence
to a Regulatory Authority that relates to VP Compounds, VP
Products, or any activities under this Agreement at least seven
days before the submission of such correspondence. Aventis
shall adopt all reasonable suggestions and recommendations of
ViroPharma concerning any meeting or written or oral
communication with such Regulatory Authority.
7.2 Regulatory Cooperation.
7.2.1 Each Party shall provide the other with all reasonable
assistance and take all actions reasonably needed to enable
such other Party to comply with any Law applicable to such
other Party's activities under this Agreement. Such assistance
and actions shall include, without limitation, informing the
other Party within forty-eight (48) hours of receiving any
information that:
(a) raises any material concerns regarding the safety or
efficacy of any VP Product;
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(b) indicates or suggests a potential material liability for
either Party to Third Parties arising in connection with
any VP Product;
(c) is reasonably likely to lead to a recall or market
withdrawal of any VP Product; or
(d) concerns any ongoing or potential investigation,
detention, seizure or injunction involving any VP Product
by any Regulatory Authority,
including, without limitation, receipt of a warning letter
relating to any VP Compounds or VP Products; and an initiation
of any governmental or regulatory authority investigation,
detention, seizure or injunction concerning any VP Compound or
VP Product.
7.2.2 ViroPharma shall have the sole right and responsibility to
determine whether subsequent notification to a Regulatory
Authority is required, and to provide such notification to the
Regulatory Authority in compliance with Law.
7.2.3 To the extent consistent with the Commercialization Plan and
Budget and the Development Plan and Budget, ViroPharma shall
apply for and maintain the NDA and all other Regulatory
Approvals necessary to promote, Detail and Distribute VP
Products.
7.3 Labeling and Promotional Materials. ViroPharma shall be solely
responsible for obtaining any approval from a Regulatory Authority of
any label, labeling, package inserts, packaging, and Promotional
Materials used in connection with VP Product, and for determining
whether the same requires approval from a Regulatory Authority.
ViroPharma shall use commercially reasonable efforts to establish and
maintain the resources to perform its duties under this Section 7.3.
As permitted by applicable Laws, ViroPharma and Aventis shall be given
equal exposure and prominence on all VP Product labels, labeling,
package inserts, packaging, and Promotional Materials used or
distributed in connection with VP Product under this Agreement; except
that either Party may request that its name not be used, to the extent
permitted by applicable Laws. As permitted by applicable Laws, the
Parties shall attempt to have the appearance of VP Product labels,
labeling, package inserts, packaging, and Promotional Materials used
or distributed in connection with VP Product under this Agreement
conform with the guidelines and requirements of each Party. Each
package or label of VP Product shall bear the statement "Under license
from SANOFI-SYNTHELABO", or such other statement that SaSy may
reasonably request, including, without limitation, references to
patent numbers, provided that such wording otherwise complies with all
Laws applicable to such labeling. ViroPharma shall use commercially
reasonable efforts to ensure that any markings requested by SaSy to
appear on the label or packaging of VP Products are reasonable, and
are consistent with the decisions made by the MSC or the JSC regarding
such packaging or labeling.
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7.4 Adverse Drug Experiences.
7.4.1 Notification of Parties.
(a) Serious Adverse Drug Experiences. Each Party shall notify
the other of any Serious Adverse Drug Experience within
forty-eight (48) hours of the time such Serious Adverse
Drug Experience becomes known to such Party or any of its
Affiliates, with written confirmation of such notification
no more than forty-eight (48) hours later.
(b) Non-Serious Adverse Drug Experiences. Each Party shall
notify the other Party in writing of any Non-Serious
Adverse Drug Experience within ten (10) days after the end
of any Calendar Quarter, listing the Non-Serious Adverse
Drug Experience that become known to such Party or any of
its Affiliates.
(c) Complaints. Aventis shall refer any complaints, including
medical complaints, that it receives concerning any VP
Product to ViroPharma within ninety-six (96) hours of
receiving such complaint; provided that all complaints
concerning suspected or actual VP Product tampering,
contamination or any VP Product that is out-of-
specification shall be delivered within forty-eight (48)
hours of receiving such Complaint.
7.4.2 Notification of SaSy. ViroPharma shall provide SaSy with all
data and information about Adverse Drug Experiences and
complaints related to VP Product as soon as such data and
information are available, and Aventis shall assist in
providing such data and information to the extent necessary.
7.4.3 Regulatory Reporting. ViroPharma shall be responsible for
making all reports to any Regulatory Authority regarding
Adverse Drug Experiences.
7.4.4 Disclosure. Except as required by applicable Laws, Aventis
shall not disclose any information concerning any Adverse Drug
Experience or any complaint concerning any VP Product to any
Third Party without the prior consent of ViroPharma. ViroPharma
shall be solely responsible for determining whether any
complaint or Adverse Drug Experience must be reported to any
Regulatory Authority and to provide such notification in
compliance with applicable Laws.
7.4.5 Sharing of Information. Within five (5) days of submission,
ViroPharma shall provide Aventis with a copy of any 15 day
"Alert Reports" relating to any VP Product submitted to FDA in
accordance with 21 C.F.R. (S) 314.80(c)(1) and any periodic
adverse drug experience report relating to any VP Product
submitted in accordance with 21 C.F.R. (S) 314.80(c)(2).
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7.4.6 Additional Agreements. The Parties shall enter into such
additional agreements governing the sharing and reporting of
data and information on adverse drug experiences and complaints
related to VP Product as the JSC deems necessary.
7.5 Recalls or Other Corrective Action of VP Product. ViroPharma shall be
solely responsible for and shall make any final decisions with respect
to any recall, market withdrawals or any other corrective action
related to VP Product in the Territory. Before making any such recall
decision, to the extent possible ViroPharma shall notify and consult
with Aventis. ViroPharma shall promptly notify Aventis of any such
actions planned to be taken by ViroPharma that are reasonably likely
to materially and adversely affect the marketability of VP Products in
the Territory or could be reasonably foreseen to materially damage or
materially adversely affect Aventis' reputation as a pharmaceutical
company. In the event of any such proposed actions, Aventis shall have
the right to review and comment upon such proposed actions and, if
appropriate, participate in any statements to the extent feasible
under the circumstances. At ViroPharma's request, Aventis shall
provide reasonable assistance to ViroPharma in conducting such recall,
market withdrawal or other corrective action, including, without
limitation, providing all of Aventis' pertinent records that
ViroPharma may reasonably request to assist in effecting such recall,
marketing withdrawal or other corrective action.
7.6 Cost of Recalls or Other Corrective Actions. Except as expressly
otherwise provided below in this Section 7.6, the Parties shall share
equally all costs of a recall, marketing withdrawal or other
corrective action of a VP Product in the Territory. Notwithstanding
the foregoing, a Party shall bear any and all costs of a recall,
market withdrawal or other corrective action of a Finished VP Product
in the Territory to the extent such recall, market withdrawal or other
corrective action results solely from:
7.6.1 in the case of ViroPharma:
(a) a negligent or reckless act or omission or intentional
misconduct on the part of ViroPharma, its Affiliates or
contractors and not from a negligent or reckless act or
omission or intentional misconduct on the part of Aventis,
its Affiliates or contractors,
(b) the failure of a VP Compound or VP Product to be
manufactured in compliance with all Laws and in accordance
with its applicable specifications,
(c) the failure of a VP Product or VP Compound to be held and
shipped in compliance with all Laws and in accordance with
its applicable specifications before its delivery to
Aventis pursuant to Section 6.4.4,
________________________________________________________________________________
Page 65
(d) the failure of ViroPharma to comply with any Law in
connection with its responsibilities under this Agreement;
and
7.6.2 in the case of Aventis:
(a) a negligent or reckless act or omission or intentional
misconduct on the part of Aventis, its Affiliates or
contractors and not from a negligent or reckless act or
omission or intentional misconduct on the part of
ViroPharma, its Affiliates or contractors,
(b) the failure of a VP Compound or VP Product manufactured by
Aventis to be manufactured in compliance with all Laws and
in accordance with its applicable specifications, if and
to the extent that Aventis in fact manufactures VP
Product,
(c) the failure of a VP Product to be held, shipped or
Distributed in compliance with all Laws and in accordance
with its applicable specifications, from and after its
delivery to Aventis pursuant to Section 6.4.4,
(d) the failure of Aventis to comply with any Law in
connection with its responsibilities under this Agreement.
A Party shall have no obligation to reimburse or otherwise compensate
the other Party for any lost profits or income that may arise in
connection with any such recall or market withdrawal.
7.7 Medical Inquiries. ViroPharma shall be solely responsible for
responding to medical questions or inquiries from members of the
medical and paramedical professions and consumers regarding VP
Product, either itself, through a Third Party contractor, or, subject
to the agreement of Aventis, through a contract with Aventis to
perform such activities. Aventis shall refer all such questions about
VP Product that it receives to ViroPharma, unless Aventis has been
made responsible for performing such activities with the Agreement of
the JSC.
8. CONSIDERATION, PROFIT & COST SHARING.
8.1 Aventis Milestone Payments. In consideration for the rights granted to
Aventis under this Agreement, Aventis shall pay ViroPharma the
following amounts:
8.1.1 Signing. Twenty-five million U.S. dollars (U.S. $25,000,000.00)
upon the signing of this Agreement, the following amounts of
which shall be refunded by ViroPharma to Aventis as follows:
(a) ****** U.S. dollars (U.S. $******) if Regulatory Approval
of an NDA for VP Product for the First Indication has not
been granted in the United States by ******; and
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(b) ****** U.S. dollars (U.S. $******) if Regulatory Approval
of an NDA for VP Product for the First Indication has not
been granted in the United States by ******.
If before the first Regulatory Approval in the United States of
an NDA for VP Product for the First Indication, ViroPharma's
****** U.S. dollars ($******), ViroPharma shall ****** U.S.
dollars (U.S. $******) ******, and ****** U.S. dollars (U.S.
$******) ******.
8.1.2 First Indication. ****** U.S. dollars ($******) upon the first
Regulatory Approval in the United States of an NDA for VP
Product for the First Indication ****** for the First
Indication ******:
(a) ******, except that this Section 8.1.2(a) shall not apply
if, on the date of Regulatory Approval of the respective
indication, ******; or
(b) ****** or ******; or
(c) ******:
(i) ******, or
(ii) ******;
(collectively, "******").
8.1.3 Second Indication Subset.
(a) General. Upon the Regulatory Approval in the United States
of an NDA for VP Product that includes the Second
Indication Subset:
(i) ****** U.S. dollars (U.S. $******) if such Regulatory
Approval is obtained on or before ******; or
(ii) ****** U.S. dollars (U.S. $******) if such Regulatory
Approval is obtained after ****** but on or before
******.
(b) Exceptions. No payment shall be due under Section 8.1.3(a)
if:
(i) the ****** for such VP Product for the Second
Indication Subset ****** that such VP Product is
indicated for the Second Indication Subset ******,
and on the date of Regulatory Approval of the Second
Indication that includes the Second Indication
Subset, ******, or
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(ii) Regulatory Approval in the United States of an NDA
for VP Product for the Second Indication Subset is
obtained after ******.
8.1.4 Labeling - Otitis Media. ****** U.S. dollars (U.S.
$******) upon the first Regulatory Approval in the United
States of an NDA for VP Product for which the labeling
contains a positive description of the efficacy of such VP
Product with respect to Otitis Media that can be promoted
by a sales representative in accordance with the FD&C Act,
and for which VP Product the ****** regarding Otitis Media
******.
8.1.5 Additional Indication - Asthma. ****** U.S. dollars (U.S.
$******) upon the first Regulatory Approval in the United
States of an NDA for VP Product for the Asthma Indication,
for which VP Product ******. If the first Regulatory
Approval for such VP Product for such Additional
Indication is obtained after ******, the amount to be paid
by Aventis under this Section 8.1.5 ****** (the "******"):
Calendar Year During Which ******
Regulatory Approval of VP to be Paid by Aventis to
Product for Additional ViroPharma
Indication Is Obtained ------------------------
--------------------------
****** ******
****** ******
****** ******
****** ******
8.1.6 Additional Indication - COPD. ****** U.S. dollars (U.S.
$******) upon the first Regulatory Approval in the United
States of an NDA for VP Product for the COPD Indication,
******. If the first Regulatory Approval for such VP
Product for such Additional Indication is obtained after
******, the amount to be paid by Aventis under this
Section 8.1.6 ****** (the "******"):
Calendar Year During Which ******
Regulatory Approval of VP to be Paid by Aventis to
Product for Additional ViroPharma
Indication Is Obtained ------------------------
--------------------------
****** ******
****** ******
****** ******
****** ******
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8.1.7 Other Indications. ****** U.S. dollars (U.S. $******) upon the
first Regulatory Approval of an NDA for each Other Indication
for which:
(a) ******,
(b) Aventis has chosen to ******, as such Other Indication has
been defined by the Development Committee in the
Development Plan and Budget as set forth in Section
4.4.2(e), and
(c) the development of such Other Indication was approved by
the JSC.
8.1.8 Sales Level Payments.
(a) Net Sales - $******. One time payment of ****** U.S.
dollars (U.S. $******) upon first achieving Net Sales
totaling ****** U.S. dollars ($******) or more in the
United States in any twelve (12) consecutive calendar
months;
(b) Net Sales - $******. One time payment of ****** U.S.
dollars (U.S. $******) upon first achieving Net Sales
totaling ****** U.S. dollars ($******) or more in the
United States in any twelve (12) consecutive calendar
months;
(c) Net Sales - $******. One time payment of ****** U.S.
dollars (U.S. $******) upon first achieving Net Sales
totaling ****** U.S. dollars ($******) or more in the
United States in any twelve (12) consecutive calendar
months;
(d) Net Sales - $******. One time payment of ****** U.S.
dollars (U.S. $******) upon first achieving Net Sales
totaling ****** U.S. dollars ($******) or more in the
United States in any twelve (12) consecutive calendar
months.
8.2 Aventis Equity Purchase. On the Effective Date, Aventis or an Aventis
Affiliate and ViroPharma shall enter into the Stock Purchase Agreement
attached to this Agreement as Exhibit 8.2.
8.3 Indication Development Budget Milestones. Upon Regulatory Approval for
any Additional Indication, or for any Other Indication for which
Aventis has chosen to ******, as such Other Indication has been
defined by the Development Committee in the Development Plan and
Budget as set forth in Section 4.4.2(e), Aventis shall pay ViroPharma
the Indication Development Budget Milestone for such Additional
Indication or Other Indication as set forth in Section 4.5.1(b) and
(c). In the case of an Additional Indication, if the Regulatory
Approval for such VP Product for such Additional Indication is
obtained after ******, the amount to be paid by Aventis under this
Section 8.3 ****** (the "******"):
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Calendar Year During Which
Regulatory Approval of VP ******
Product for Additional to be Paid by Aventis to
Indication Is Obtained ViroPharma
----------------------------- ---------------------------------
****** ******
****** ******
****** ******
****** ******
8.4 Profit Sharing. For so long as the Parties are commercializing any VP
Product under this Agreement, (a) ViroPharma shall receive forty-five
percent (45%) of the Net Profits (Losses) obtained from the sale of VP
Product as a prescription pharmaceutical product, or as an over-the-
counter pharmaceutical product in the case of either a Forced OTC Switch
or a Voluntary OTC Switch in a Calendar Quarter in the Territory
("ViroPharma's Allocation of Net Profits") and (b) Aventis shall receive
fifty-five percent (55%) of the Net Profits (Losses) obtained from the
sale of VP Product as a prescription pharmaceutical product, or as an
over-the-counter pharmaceutical product in the case of either a Forced
OTC Switch or a Voluntary OTC Switch in a Calendar Quarter in the
Territory ("Aventis' Allocation of Net Profits").
8.5 Profit & Expense Reports and Payments.
8.5.1 Statements of Estimated Amounts for Purposes of Accruals. No later
than the last business day of each Calendar Quarter:
(a) ViroPharma shall prepare and deliver to Aventis a report for
Aventis' internal accounting needs setting forth its good
faith estimate of:
(i) Development Expenses incurred or to be incurred by it
with respect to a VP Compound or VP Product pursuant to
Sections 4.5.1(a) and 4.5.1(c)(i); and
(ii) Commercialization Expenses incurred or to be incurred by
it with respect to VP Products subject to expense
limitations set forth in Section 8.6;
in such Calendar Quarter; and
(b) Aventis shall prepare and deliver to ViroPharma a report for
ViroPharma's internal accounting needs setting forth its good
faith estimate of:
________________________________________________________________________________
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(i) Development Expenses incurred or to be incurred by it
with respect to a VP Compound or VP Product pursuant
to Sections 4.5.1(a) and 4.5.1(c)(i);
(ii) Commercialization Expenses incurred or to be incurred
by it with respect to VP Products subject to expense
limitations set forth in Section 8.6,
(iii) Net Sales of each VP Product in the Territory achieved
or to be achieved in such Calendar Quarter.
8.5.2 Statement of Actual Accounts. Within forty-five (45) days of the
end of each Calendar Quarter, each Party shall prepare and
deliver to the other Party a report setting forth the actual
amount of each amount reported to the other Party pursuant to
Section 8.5.1 for such Calendar Quarter. Within twenty-one (21)
days after the end of the fourth Calendar Quarter, each Party
will provide a revision of the estimate of the amounts reported
to the other Party pursuant to Section 8.5.1 for such Calendar
Quarter, or a confirmation that as of such date no data available
to such Party require that such estimate be revised.
8.5.3 Reconciliation. Within sixty (60) days of the end of each
Calendar Quarter, based on the statements delivered pursuant to
Section 8.5.2 above, Aventis shall prepare a report setting forth
the amount of the payment that one Party is required to make to
the other as follows:
(a) the product of ViroPharma's Allocation of Net Profits and
the Net Sales of VP Products in the Territory; less
----
(b) the product of ViroPharma's Allocation of Net Profits and
Commercialization Expenses incurred by Aventis in the
Territory; plus
----
(c) the product of Aventis' Allocation of Net Profits and
Commercialization Expenses incurred by ViroPharma in the
Territory; plus
----
(d) ****** percent (******%) of Development Expenses incurred by
ViroPharma pursuant to Sections 4.5.1(a) and 4.5.1(c)(i);
less
----
(e) ****** percent (******%) of Development Expenses incurred by
Aventis pursuant to Sections 4.5.1(a) and 4.5.1(c)(i).
8.5.4 Payment. If the amount calculated by Aventis pursuant to Section
8.5.3 is greater than zero, Aventis shall, within five (5) days
of its delivery to ViroPharma of the report pursuant to Section
8.5.3, deliver to ViroPharma
________________________________________________________________________________
Page 71
a payment in such amount. In the event such amount is less than
zero, within five (5) days of ViroPharma's receipt of such
report, ViroPharma shall deliver to Aventis a payment equal to
the absolute value of such amount.
8.5.5 SaSy Royalty Reconciliation and Payment. Notwithstanding the
foregoing Sections 8.5.1 through 8.5.4, no later than fifty-five
(55) days after the end of each Calendar Quarter, Aventis shall
send ViroPharma:
(a) a report of the amount of the SaSy Royalty due on account of
Net Sales of VP Product in such Calendar Quarter in the
Territory
(b) a statement of the amount of such SaSy Royalty owed by
ViroPharma and Aventis respectively as Commercialization
Expenses in the Territory,
(c) payment to ViroPharma for the full amount of such SaSy
Royalty owed by both Parties in readily available U.S.
dollars.
ViroPharma shall be solely responsible for transmitting full
payment of the SaSy Royalty to SaSy.
8.6 Expense Limitation on Commercialization Expenses. The aggregate
Commercialization Expenses other than Cost of Goods charged by either Party
to its Commercialization Account in accordance with Section 5.8, shall not
exceed one hundred ten percent (110%) of the aggregate amount included for
such expenses in the then current Commercialization Plan and Budget, unless
the JSC approves such excess expenses.
8.7 Credit for Payments made by SaSy to ViroPharma. If ViroPharma receives from
SaSy a royalty pursuant to Section 5.1(a)(iii) of the SaSy Agreement or a
payment pursuant to Section 5.1(a)(iv) of the SaSy Agreement, within
fifteen (15) days of ViroPharma's receipt of any such payment, ViroPharma
shall pay to Aventis ****** percent (******%) of the amount of such
payments. The Parties shall renegotiate such percentage, but in any case to
a percentage of at least ****** percent (******%), in a timely fashion and
in good faith if either:
8.7.1 SaSy receives Regulatory Approval to market a VP Product for any
Additional Indication or any Other Indication outside the
Territory, or
8.7.2 The actual amounts spent after the Effective Date to obtain
Regulatory Approval of the First Indication and the Second
Indication in the Territory exceed ****** U.S. dollars ($******).
In addition, if Aventis obtains from SaSy exclusive or co-exclusive rights
to develop, use, sell, offer for sale, have sold, make and have made,
import and export, any VP Product in Japan, ViroPharma shall no longer be
obligated to pay
________________________________________________________________________________
Page 72
Aventis any part of the royalty or other amount received by ViroPharma from
SaSy pursuant to the SaSy Agreement in respect of Japan.
8.8 Manner of Payments.
8.8.1 Wire Transfer. All sums due to either Party shall be payable in
United States dollars by bank wire transfer in immediately
available funds to such bank account in the Territory as each of
Aventis and ViroPharma shall designate. Aventis shall notify
ViroPharma's Chief Financial Officer, and ViroPharma shall notify
Aventis' Treasurer by facsimile of the date and amount of any
such wire transfer at least one (1) business day before such
transfer.
8.8.2 Taxes and Withholding. All payments under this Agreement will be
made without any deduction or withholding for or on account of
any tax unless such deduction or withholding is required by
applicable Laws. If the paying Party is so required to deduct or
withhold, such Party will: (a) promptly notify the other Party of
such requirement, (b) pay to the relevant authorities the full
amount required to be deducted or withheld promptly upon the
earlier of determining that such deduction or withholding is
required or receiving notice that such amount has been assessed
against the other Party, and (c) promptly forward to the other
Party an official receipt (or certified copy) or other
documentation reasonably acceptable to the other Party evidencing
such payment to such authorities.
8.9 Set-Off. In making payments to the other Party hereunder, neither Party
shall have the right to set-off or recoup any other payments due to it by
the other Party except as explicitly provided in Section 8.5.3, and except
that Aventis shall have the right to set-off for any amounts due to it from
ViroPharma for:
8.9.1 obsolete launch stocks required to be repurchased pursuant to
Section 6.2.4,
8.9.2 the amount of any payments under Section 10.6.2(b),
10.6.2(c)(iv), 12.4.3(f), 13.7.3(a) and 13.7.3(b)(vi).
8.10 Interest on Late Payments. If any payment under this Article 8 is late,
interest shall accrue on the past due amount at a rate equal to the lower
of the (a) highest lawful interest rate in the Territory, and (b) the prime
rate effective for the first date on which the payment was delinquent,
calculated on an actual/360 basis, as quoted in The Wall Street Journal.
-----------------------
8.11 Financial Records.
8.11.1 Records. Each Party shall keep and maintain accurate and complete
records of all figures and transactions known to it that are
necessary to determine accurately, under U.S. Generally Accepted
Accounting
________________________________________________________________________________
Page 73
Principles , the sums due to each Party under this Agreement,
which shall include, but not be limited to, in the case of
Aventis, Net Sales, Net Profits (Losses), and Aventis' and
Aventis' Affiliates' Commercialization Expenses, and in the case
of ViroPharma, ViroPharma's and ViroPharma's Affiliates'
Development Expenses and Commercialization Expenses. Each Party
shall maintain and cause its Affiliates to maintain such records
for a period of at least three (3) years after the end of the
Calendar Year in which they were generated.
8.11.2 Audits. During the Term of this Agreement and three (3) years
thereafter, upon thirty (30) days prior written notice from a
Party (the "Auditing Party"), the other Party (the "Audited
Party") shall permit an independent certified public accounting
firm of nationally recognized standing selected by the Auditing
Party and reasonably acceptable to the Audited Party, to examine,
at the Auditing Party's sole expense, the relevant books and
records of the Audited Party and its Affiliates as may be
reasonably necessary to verify the accuracy of the reports
submitted by the Audited Party in accordance with Section 8.5,
including without limitation, the accuracy of Development
Expenses charged to a Party's Development Account,
Commercialization Expenses and Detail Cost of VP Product charged
to a Party's Commercialization Account, and the number and type
of Details performed, the calculation of Net Sales, and the
calculation and allocation of Net Profits (Losses). An
examination by a Party under this Section 8.11.2 shall occur not
more than once in any Calendar Year and shall be limited to the
pertinent books and records for any Calendar Year ending not more
than thirty-six (36) months before the date of the request. The
accounting firm shall be provided access to such books and
records at the Audited Party's facility(ies) where such books and
records are normally kept and such examination shall be conducted
during the Audited Party's normal business hours. The Audited
Party may require the accounting firm to sign a standard non-
disclosure agreement before providing the accounting firm access
to the Audited Party's facilities or records. Upon completion of
the audit, the accounting firm shall provide each Party with a
written report disclosing whether the reports submitted by the
Audited Party are correct or incorrect, whether the calculation
of Net Sales, the calculation and allocation of Net Profits
(Losses) is correct or incorrect, and, in each case, the specific
details concerning any discrepancies.
8.11.3 Underpayments/Overpayments. If such accounting firm concludes
that additional payments were due to a Party, the other Party
shall make such payments, together with any interest that may be
due thereon as provided in Section 8.10 within thirty (30) days
of the date such other Party receives such accountant's written
report so correctly concluding. If such underpayment exceeds five
percent (5%) of the amount actually paid to the Auditing Party,
the Audited Party also shall reimburse the Auditing Party for the
out-of-pocket expenses incurred in conducting the audit,
________________________________________________________________________________
Page 74
except in the event that such underpayment was due to any
inaccurate information provided by the Auditing Party.
8.11.4 Confidentiality. All financial information of a Party that
is subject to review under this Section 8.11 shall be deemed
to be Confidential Information subject to the provisions of
Article 11.
9. CONTRACT PROMOTION OF AVENTIS PRODUCT.
9.1 Aventis Product Detailing Right and License. Aventis hereby grants
ViroPharma the royalty free, non-exclusive, non-sublicensable right
and license under any Patents, trademarks, copyrights, trade secrets
or other intellectual property covering Aventis Product(s) owned or
Controlled by Aventis to the extent necessary to perform the
activities described in this Article 9.
9.2 Selection of Aventis Product.
9.2.1 Products Available for Selection. The Aventis Product(s)
shall be selected by Aventis in its sole discretion from
among the following prescription pharmaceutical products:
(a) ****** (******)******,
(b) the ****** brand of products including, but not limited
to:
(i) ****** (****** and ******) ******, and
(ii) ****** (******) ******,
Aventis may request that ViroPharma distribute Samples
for more than a single ****** product for any Details
performed for the ****** brand of products, provided
that Aventis reimburses ViroPharma for all incremental
costs, if any, incurred by ViroPharma as a result of
distributing Samples for more than one ****** product,
and
(c) any other prescription pharmaceutical product owned or
Controlled by Aventis for which the prescriber
population to which such product is Detailed
substantially overlaps with the prescriber population
to which VP Product will be Detailed such that a
geographical realignment of ViroPharma's force of sales
representatives will not be required for the Detailing
of VP Product,
in each case to the extent and for so long as Aventis owns
or Controls the right to permit ViroPharma to Detail such
product. Each product selected under Section 9.2.3, as may
be changed from time to time consistent with Section 9.2.3,
shall be deemed the "Aventis Product."
________________________________________________________________________________
Page 75
9.2.2 Detailing Right. Beginning on January 1, 2002, and
continuing until the termination of ViroPharma's right to
promote Aventis Products as set forth in Section 9.5.2,
ViroPharma shall Detail Aventis Products using a sales force
as set forth in Sections 9.4.1 and 9.4.2.
9.2.3 Selection and Change. On or before November 30, 2001,
Aventis shall notify ViroPharma in writing which two (2)
Aventis Products shall be licensed to ViroPharma to promote.
At least thirty (30) days before the Launch Date, Aventis
shall provide ViroPharma with notice of which Aventis
Product ViroPharma shall no longer Detail following the
Launch Date. After the Launch Date, but subject to Section
9.5, ViroPharma hereby agrees to Detail one (1) Aventis
Product. Aventis shall have the right on ninety (90) days'
prior written notice to change its selection of Aventis
Product(s) from among those listed in Section 9.2.1. In
addition, if Aventis should lose ownership or Control of the
right to permit ViroPharma to Detail an Aventis Product then
currently licensed to ViroPharma, then Aventis shall no
later than sixty (60) days after such loss, select a new
product from among those listed in Section 9.2.1 that
ViroPharma shall be licensed to promote. Until such new
product has been made available to ViroPharma for Detailing,
Aventis shall continue to pay ViroPharma the applicable
Detail Costs for Aventis Products for the maximum number of
Details that ViroPharma would have been permitted to perform
if Aventis had not lost ownership or Control of the right to
permit ViroPharma to Detail such Aventis Product.
Notwithstanding the provisions of Section 9.2.1(c), if
Aventis should lose ownership or Control of the right to
permit ViroPharma to Detail an Aventis Product then
currently licensed to ViroPharma, and if Aventis has no
product meeting the requirements of Section 9.2.1(c), then
ViroPharma agrees to accept as an Aventis Product a primary
care product from Aventis' product portfolio.
9.2.4 Tertiary Sampling or Merchandising. After the Launch Date,
at Aventis' election and sole cost for Samples of Aventis
Products and promotional materials, the distribution of such
Samples and materials, and all incremental costs relating to
required Sample accountability activities in addition to
those related to other scheduled Details, but with no
additional payment required to ViroPharma, during the period
that ViroPharma is Detailing Aventis Product(s), Aventis may
require ViroPharma to perform a Sample or merchandising drop
in association with any already scheduled Details. Such
Sample or merchandising drop shall account for no more than
five percent (5%) of the total time of such call.
9.3 Detailing Preparation and Support.
9.3.1 Training for Aventis Product Detailing. Aventis shall be
solely responsible for providing training facilities,
trainers and all content to train
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ViroPharma's sales representatives on the Aventis
Product(s), the relevant disease states, and the procedures
for communication and monitoring pursuant to Section
9.6.7(a), in preparation for the promotion of the Aventis
Product(s). Aventis shall use commercially reasonable
efforts to make its corporate lodging rate available to
ViroPharma for the lodging of ViroPharma's sales
representatives attending training under this Section 9.3.1.
Aventis shall permit ViroPharma to send representatives to
attend and observe such training. ViroPharma shall pay and
be solely responsible for traveling and accommodation
expenses incurred by ViroPharma's sales representatives.
9.3.2 Samples and Promotional Materials. Aventis shall at its own
cost provide adequate supplies of promotional materials for
use in Detailing directly to each of ViroPharma's sales
representatives Detailing Aventis Product. Aventis shall at
its own cost provide adequate supplies of Aventis Product
Samples for use in Detailing to a central distribution
facility designated by ViroPharma. Subject to Sections
9.2.1(b) and 9.2.4, ViroPharma shall bear the costs of
distributing such Samples to its sales representatives, and
all Sample accountability costs for such Samples from the
distribution center.
9.3.3 Promotional Budget. Aventis shall provide ViroPharma's sales
representatives with a nominal promotional budget for
activities such as "Lunch and Learn" programs for use in
support of such sales representatives' Detailing.
9.4 Aventis Product Detailing.
9.4.1 Allocation of Calls and Details for Aventis Product(s).
(a) Before the Launch Date. Before the Launch Date, the
following will apply to Calls and Details of Aventis
Product performed by ViroPharma: During the period in
which ViroPharma is Detailing two (2) Aventis Products,
without the prior written consent of Aventis,
ViroPharma shall not perform more than ****** Primary
Details and ****** Secondary Details per month
(together, the "Detail Maximum"), pro-rated for any
partial month based on the number of days elapsed in a
month of 30 days. Aventis shall pay ViroPharma for the
Details actually made to Aventis Product Target
Prescribers, except as otherwise provided in Section
9.2.3, but in any event for no more Details than the
Detail Maximum. ViroPharma shall perform Details in the
manner and schedule reasonably provided by Aventis,
including without limitation, the Aventis Product
Target Prescribers and the positions (i.e., Primary or
Secondary) in which each Aventis Product will be
Detailed. All of the Calls regarding Aventis Products
performed by ViroPharma shall be to Aventis Product
Target Prescribers. The ViroPharma
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sales representatives who are Detailing Aventis Product
shall not Detail any product (including any product
controlled by an Affiliate or Third Party) other than
an Aventis Product.
(b) After the Launch Date. After the Launch Date, the
following will apply to Details of Aventis Product
performed by ViroPharma: ViroPharma shall have the
right to perform up to ****** Secondary Details per
month to Detail the single Aventis Product to Aventis
Product Target Prescribers; provided, that such Aventis
Product Target Prescribers are within the top ******
(******) deciles for Aventis Product Target Prescribers
as determined by a Third Party pharmaceutical marketing
consultant acceptable to both Parties, pursuant to
Section 9.2.3. Notwithstanding anything to the contrary
in this Article 9, for any month, Aventis shall not be
obligated to pay ViroPharma for any Secondary Details
of Aventis Product to other than the Aventis Product
Target Prescribers, which Details are in excess of
******% of the total number of Secondary Details of
Aventis Product performed by ViroPharma in such month.
Such Details of Aventis Product shall be recorded as a
Secondary Detail using the sales tracking method then
in use by ViroPharma consistent with Section 5.7.3.
9.4.2 Tranche Launch Plan and Compensation to ViroPharma for
Details.
(a) First Tranche. ViroPharma will have at least ******
(******) sales representatives ready to Detail Aventis
Product(s) on January 1, 2002. If on January 1, 2002,
ViroPharma does not have at least ****** (******)
ViroPharma sales representatives ready to Detail
Aventis Product(s), ViroPharma ******, Aventis Product.
If, at any time after January 1, 2002, ViroPharma has
at least ****** (******) sales representatives ready to
Detail Aventis Product, then ****** ViroPharma the
****** for each Detail or call performed by ******
(******) ViroPharma sales representatives.
(b) Second Tranche. In addition to the sales
representatives described in Section 9.4.2(a),
ViroPharma will have at least an additional ******
(******) sales representatives ready to Detail Aventis
Product(s) on February 1, 2002. If on February 1, 2002,
ViroPharma does not have at least ****** (******)
ViroPharma sales representatives ready to Detail
Aventis Product(s), Aventis ****** Aventis Product
performed by ****** (******) ViroPharma sales
representatives. Subject to Section 9.5.2(b-c), if, at
any time after February 1, 2002, ViroPharma has at
least ****** (******) sales representatives ready to
Detail Aventis Product, then Aventis ****** ViroPharma
the applicable ****** for each
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Detail or call performed by up to ****** (******)
ViroPharma sales representatives.
(c) Representatives. ViroPharma shall, at its sole expense,
recruit, interview and hire as its employees all sales
representatives required under this Section 9.4.2. The
ViroPharma sales representatives shall be suitably
educated and trained and shall be professional in
manner and appearance. On Aventis' reasonable request,
consistent with Laws, ViroPharma shall remove from the
Detailing of Aventis Products any sales representative
Detailing Aventis Products, provided that such removal
can be appropriately justified and documented.
9.4.3 Reconciliation. ViroPharma shall invoice Aventis, with
appropriate detail, for the costs of Details or Calls, as
applicable, for Aventis Products, made pursuant to this
Article 9, within fifteen (15) days of the end of each
month. Aventis shall pay any such invoice within thirty (30)
days of receipt.
9.5 Term of Aventis Product Detailing Right.
9.5.1 Extension. ViroPharma's right and license under Section 9.1
may be renewed by Aventis for successive one (1) year terms
by giving ViroPharma, not later than September 1 of any
Calendar Year, written notice of Aventis' proposal to renew
ViroPharma's right and license for the following Calendar
Year. ViroPharma may reject such renewal by providing
Aventis with written notice of such rejection within thirty
(30) days of receiving Aventis' notice of proposed
extension.
9.5.2 Termination.
(a) ViroPharma's right and license under Section 9.1 shall
terminate upon the termination or expiration of this
Agreement for any reason.
(b) Aventis shall have the right, but shall not be
required, to terminate ViroPharma's right and license
under Section 9.1 by providing written notice to
ViroPharma if, as of ******, ******. The right to
terminate under this Section 9.5.2(b) shall expire upon
the first day that ViroPharma has employed ******
(******) ******.
(c) Aventis shall have the right to terminate ViroPharma's
right and license under Section 9.1 by providing
ViroPharma with written notice of termination of such
right by ******, which termination shall become
effective on ******. If Aventis exercises its right to
terminate ViroPharma's promotion of Aventis Product
pursuant to this Section 9.5.2(c), then at ViroPharma's
option, either:
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(i) Aventis shall pay ViroPharma ****** U.S. dollars
(U.S. $******) no later than five (5) days after
(x) the effective date of such termination, or (y)
******, if the first Regulatory Approval in the
United States of an NDA for a VP Product for the
First Indication has not been granted before
******, provided that Aventis has not terminated
this Agreement prior to ******, which amount shall
be fully creditable against the payment to be made
under Section 8.1.8(a), except that ViroPharma
shall not be permitted to exercise its option to
receive, and Aventis shall not be required to pay
such amount if Aventis has already paid the
milestone set forth in Section 8.1.8(a), or
(ii) Aventis shall make no such payment, the rights and
licenses granted under Section 9.1 shall
terminate, and no amount shall be credited against
the payment to be made under Section 8.1.8(a).
9.6 Scope of Activities with Respect to Aventis Products.
9.6.1 Field Evaluation. On Aventis' reasonable request and with
reasonable advance notice, ViroPharma shall cause its sales
force managers to:
(a) accompany sales representatives on calls, and
(b) conduct meaningful field evaluations.
At Aventis' request, ViroPharma shall allow Aventis'
designated representative to accompany ViroPharma sales
representatives on such calls. Aventis reserves the right to
conduct field call and/or call report audits.
9.6.2 Surveys. On a regular basis, and otherwise at Aventis'
reasonable request, ViroPharma shall permit Aventis to
conduct satisfaction surveys, in a mutually acceptable form,
of physicians with whom ViroPharma sales representatives
have interacted and promptly share the results with
ViroPharma.
9.6.3 Reports. On or before the twentieth (20th)day of each month,
on Aventis' standard and customary forms as provided to
ViroPharma , ViroPharma shall provide Aventis with the
following periodic reports relating to the previous month:
(a) a monthly executive summary for Aventis Products and
market and competitive intelligence,
(b) a monthly turnover report, and
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(c) a periodic listing of territory personnel and days/week
filled and unfilled.
9.6.4 Promotional Material. Aventis shall be solely responsible
for determining the content, quantity and method of
distribution to Detail recipients of the Aventis Product
promotional materials. In connection with the Detailing of
the Aventis Product, the ViroPharma sales representatives
shall use only the product labeling and promotional
materials provided by Aventis.
9.6.5 Product Claims. ViroPharma shall instruct and require its
sales representatives to limit their statements and claims
regarding the Aventis Products, including statements and
claims concerning safety and efficacy, to those that are
consistent with the Aventis Product labeling and the Aventis
Product promotional materials. No ViroPharma sales
representative may add, delete, or modify claims of efficacy
or safety in the Detailing of Aventis Products, nor make any
changes in the Aventis Product promotional materials, nor
shall any ViroPharma sales representative make any
disparaging, untrue or misleading statements about Aventis
or any of its products, or take any other action that would
jeopardize the goodwill or reputation of the Aventis Product
or Aventis.
9.6.6 Supervision of Personnel. ViroPharma shall be responsible
for initiating and implementing all actions regarding
hiring, promotion, discipline, discharge, compensation,
processing of grievances and monitoring of the professional
appearance, demeanor and conduct of its sales
representatives.
9.6.7 Communications; Monitoring.
(a) Communications from Third Parties. ViroPharma and its
sales representatives shall forward to Aventis all
comments, statements, requests and inquiries from the
medical profession or any other Third Party relating to
the Aventis Products, which comments, statements,
requests and inquiries are:
(i) out of the ordinary,
(ii) not covered by product labeling, or
(iii) safety-related.
All responses to the medical profession or other Third
Parties shall be handled solely by Aventis.
(b) Adverse Event Reports. ViroPharma shall notify Aventis
as soon as practicable of receipt of any Adverse Drug
Experience, and in any event, no later than forty-eight
(48) hours after ViroPharma
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receives notice of a Serious Adverse Drug Experience,
and no later than ten (10) days after ViroPharma
receives a Non-Serious Adverse Drug Experience.
ViroPharma shall submit all Adverse Drug Experience
reports on MEDWATCH 3500A forms and transmit such forms
via facsimile to Aventis' Drug Product Safety Division
at the address an fax number provided to ViroPharma by
Aventis in writing.
(c) Threatened Agency Action. ViroPharma shall notify
Aventis as soon as practicable after ViroPharma learns
of any threatened or pending action by any Regulatory
Authority which may materially and adversely affect the
Aventis Product. ViroPharma shall, at the request and
sole expense of Aventis, cooperate with Aventis in
formulating a procedure for taking appropriate action.
9.6.8 Return/Recall.
(a) Returned Products. ViroPharma may not authorize the
return of any Aventis Product without the prior written
approval of Aventis. All Aventis Products returned to
ViroPharma shall be shipped to Aventis in accordance
with Aventis' returned goods policy, at Aventis' sole
cost.
(b) Recall. At Aventis' reasonable request and sole cost,
ViroPharma shall provide reasonable assistance to
Aventis in (i) obtaining and receiving any Aventis
Product that has been recalled, and (ii) performing all
other field corrections resulting from compliance
issues. Aventis shall reimburse all direct documented
costs incurred by ViroPharma with respect to
participating in any such recall or field corrections.
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10. INTELLECTUAL PROPERTY.
10.1 Inventions, Improvements, and Data. Aventis and ViroPharma shall be
the joint owners of Intellectual Work Product. Each Party shall
promptly disclose to the other Party all Intellectual Work Product
and the Parties shall have no claim for additional compensation for
the Intellectual Work Product. The Parties agree to execute any
documents or undertake any further actions as may be reasonably
necessary to effectuate the foregoing.
10.1.1 Post Agreement Term License in U.S. and Canada. Effective
upon expiration or termination of this Agreement, Aventis
hereby grants to ViroPharma a perpetual, irrevocable,
exclusive, even as to Aventis, royalty-free and
sublicenseable license, in and to Aventis' interest in the
Intellectual Work Product but only to the extent such
Intellectual Work Product covers the use of a pharmaceutical
product to prevent or treat picornavirus infections in humans
in the U.S. and Canada.
10.1.2 Licenses to Comply with the SaSy Agreement. The Parties shall
take the following steps to assure appropriate licensing of
Intellectual Work Product constituting inventions or
discoveries relating to VP Compound and/or VP Product
considered to be developed by ViroPharma or on behalf of
ViroPharma under the SaSy Agreement (the "SaSy IP") to SaSy:
(a) Before beginning any development activities that may
result in SaSy IP, on an invention-by-invention and
discovery-by-discovery basis, the Parties shall agree on
the commercially reasonable market terms as between the
Parties for the license to be granted by Aventis to
ViroPharma regarding the use of such SaSy IP outside the
U.S. and Canada for the term of the SaSy Agreement, as
and to the extent necessary for ViroPharma to comply
with its obligations to license such SaSy IP to SaSy
under the SaSy Agreement (each a "SaSy IP License"), and
upon agreement on such commercial terms, the Parties
shall enter into such SaSy IP License.
(B) If the Parties could not in a timely manner, or have not
agreed, on an invention-by-invention and discovery-by-
discovery basis, on the commercial terms of a SaSy IP
License as set forth in Section 10.1.2(a) permitting
ViroPharma to comply with its licensing obligations with
respect to SaSy IP under the SaSy Agreement, then after
receipt of notice of the existence of such SaSy IP from
ViroPharma, Aventis shall be deemed to have granted a
respective SaSy IP License as, and to the extent
necessary for ViroPharma to comply with its licensing
obligations with respect to SaSy IP under the SaSy
Agreement, and the Parties shall in good faith negotiate
the commercially reasonable market terms for such SaSy
IP License promptly after the making of such license.
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10.2 VP Patent Rights.
10.2.1 Prosecution and Maintenance of the SaSy Patents.
(a) SaSy Patents for which SaSy has Primary Responsibility.
ViroPharma shall make, or shall use best efforts to
ensure that SaSy makes adequate filings for, and
prosecutes and maintains, all SaSy Patents and related
applications in the Territory that are material to the
matters contemplated in this Agreement, and for which
SaSy has the first right to prosecute and maintain such
patents in the Territory under the SaSy Agreement.
ViroPharma shall use best efforts to ensure that SaSy
files applications and takes any other actions necessary
to obtain patent extensions and supplementary protection
certificates, where available in the Territory, for SaSy
Patents in the Territory that are material to the
matters contemplated in this Agreement, and for which
SaSy has the first right to obtain patent extensions and
supplementary protection certificates for such patents
in the Territory under the SaSy Agreement.
(b) SaSy Patents for which ViroPharma has Primary
Responsibility. ViroPharma shall prosecute and maintain
all SaSy Patents and related pending applications in the
Territory that are material to the matters contemplated
in this Agreement, and for which ViroPharma has the
first right to prosecute and maintain such patents in
the Territory under the SaSy Agreement. ViroPharma shall
file all applications and take any other actions
necessary to obtain patent extensions and supplementary
protection certificates for SaSy Patents where available
in the Territory for SaSy Patents in the Territory that
are material to the matters contemplated in this
Agreement, and for which ViroPharma has the first right
to obtain patent extensions and supplementary protection
certificates for such patents in the Territory under the
SaSy Agreement.
(c) Notifications. ViroPharma shall consult with Aventis
upon ViroPharma's receipt of notice from SaSy that SaSy
contemplates abandoning any SaSy Patents or related
applications that are material to the matters
contemplated in this Agreement. ViroPharma shall consult
with Aventis before making any decision to abandon any
SaSy Patents or related applications that are material
to the matters contemplated in this Agreement, to the
extent that ViroPharma has such right. At Aventis'
reasonable request ViroPharma shall advise Aventis of
the status of pending applications, shall provide
Aventis with copies of documentation concerning such
applications, to the extent that ViroPharma has such
right. ViroPharma shall consult with Aventis before
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ViroPharma or SaSy, as applicable, and with respect to
SaSy, as feasible and permitted, takes any action
materially affecting the scope of patent coverage
relating to any VP Compound or VP Product.
10.2.2 Prosecution and Maintenance of the ViroPharma Patents.
ViroPharma shall make adequate filings for and prosecute and
maintain all ViroPharma Patents and related applications in
the Territory, if any, unless ViroPharma and Aventis mutually
determine that any such ViroPharma Patent or related
application is not material to the matters contemplated in
this Agreement. ViroPharma and Aventis shall mutually agree
before ViroPharma abandons any ViroPharma Patents or related
applications that relate to the matters contemplated in this
Agreement. At Aventis' reasonable request, ViroPharma shall
advise Aventis of the status of pending applications, shall
provide Aventis with copies of documentation concerning such
applications and ViroPharma and Aventis shall mutually agree
before ViroPharma takes any action materially affecting the
scope of patent coverage relating to any VP Compound or VP
Product. ViroPharma shall file all applications and take any
other actions necessary to obtain patent extensions and
supplementary protection certificates for ViroPharma Patents
where available in the Territory unless ViroPharma and
Aventis mutually determine that any such ViroPharma Patent or
application is not material to the matters contemplated by
this Agreement.
10.2.3 IWP Patents. ViroPharma shall have the first right and
option, and to the extent that ViroPharma does not make use
of such option, the Aventis shall be permitted to make, on
behalf of both Parties, adequate filings for, and to
prosecute, maintain and obtain any extensions or
supplementary protection certificates for all IWP Patents and
related applications. The Parties shall agree on the content
of any IWP Patents to be filed, and on any other action
materially affecting the scope of patent coverage relating to
any IWP Patent. The prosecuting Party shall advise the other
Party of the status of pending applications for IWP Patents
and shall promptly provide Aventis with copies of all
documentation concerning such applications. The JSC shall
determine whether to abandon any IWP Patents. The Parties
shall share equally all the costs, other than internal costs,
incurred under this Section 10.2.3.
10.2.4 Enforcement. If either Party becomes aware of any
infringement in the Territory of any issued Patent among the
SaSy Patents, the ViroPharma Patents, or the IWP Patents, it
shall promptly notify the other Party in writing.
(a) SaSy Patents. With respect to any SaSy Patent,
ViroPharma shall use commercially reasonable efforts to
ensure that SaSy takes, appropriate action to obtain a
discontinuance of such infringement, or to bring suit
against the Third Party infringer. If SaSy elects
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pursuant to the SaSy Agreement to permit ViroPharma to
undertake appropriate action to obtain a discontinuance
of such infringement, then the JSC shall determine what
actions to undertake, and ViroPharma shall use
commercially reasonable efforts to obtain a
discontinuance of such infringement by performing such
actions. The Parties shall share equally the costs of
any such activities and any amounts received from Third
Parties as a result of such activities.
(b) ViroPharma Patents. With respect to any ViroPharma
Patent, the JSC shall consider whether to take any
action to obtain a discontinuance of such infringement,
and whether to bring suit against the Third Party
infringer. The JSC may designate either Party to take
any action against the Third Party infringer, which
Party shall use commercially reasonable efforts to
obtain a discontinuance of such infringement by taking
such action. If the JSC designates Aventis to take such
action then ViroPharma shall ensure that Aventis
receives the rights, other than ownership rights in the
underlying intellectual property, necessary to take the
aforementioned action. The Parties shall share equally
the costs of any activities under this Section 10.2.4(b)
and any amounts received from Third Parties as a result
of such activities.
(c) IWP Patents. With respect to any IWP Patent in the Field
and in the Territory, the JSC shall determine the
appropriate action to obtain a discontinuance of such
infringement, and may designate either Party to bring
suit against the Third Party infringer. The Parties
shall consult before taking any such appropriate action
to obtain a discontinuance of such infringement, and
before bringing suit against the Third Party infringer.
The Parties shall share equally the costs of any
activities under this Section 10.2.4(c) and any amounts
received from Third Parties as a result of such
activities, except that if either Party in its
reasonable discretion, determines not to take any action
to obtain a discontinuance of such infringement, or to
bring suit against the Third Party infringer, the other
Party's sole remedy shall be to take such action at its
own cost and risk and any financial benefit resulting
from such action shall be such other Party's alone. The
first Party then shall ensure that the other Party
receives the rights necessary to take the aforementioned
action. The first Party shall reasonably assist the
other Party in taking such action at the other Party's
expense.
10.2.5 Alleged Infringement of Third Party Patents.
(a) Notice. If the making, having made, importing,
exporting, using, distributing, marketing, promoting,
offering for sale or selling any
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VP Compound and/or VP Product, under this Agreement, is
alleged by a Third Party to infringe such Third Party's
patent, the Party becoming aware of such allegation
shall promptly notify the other Party. Additionally, if
either Party determines that, based upon the review of a
Third Party's patent or patent application, it may be
desirable to obtain a license from such Third Party with
respect thereto so as to avoid any potential suit
between either Party and such Third Party, such Party
shall promptly notify the other Party of such
determination, subject to the Parties' entering into a
joint privilege agreement.
(b) Negotiation and Litigation. Subject to any limitations
or rights contained in the SaSy Agreement, ViroPharma
shall have the right to negotiate with said Third Party
for a suitable license or assignment. If a Third Party
sues either of the Parties asserting that the Parties'
promotion and sales of VP Product under this Agreement
infringes or will infringe such Third Party's Patents in
the Field, ViroPharma shall control the defense of such
action and any discussions relating to the settlement or
compromise of such action. ViroPharma shall not enter
into any settlement that would adversely affect Aventis'
rights under this Agreement without the prior written
consent of Aventis.
(c) Coverage of Costs. Any royalties or other amounts
required to be paid to a Third Party to obtain a
suitable license pursuant to Section 10.2.5(b) above to
use, sell, offer for sale, make, have made, import or
export, (i) any VP Compound or (ii) the VP Product
formulation for which NDA 21-245 was submitted to the
FDA on July 31, 2001, shall be at the sole cost and
responsibility of ViroPharma and shall not be deemed a
Commercialization Expense (except to the extent that the
SaSy Royalties are reduced to the same extent by any
such payment, in which case, any such payment shall be
deemed a SaSy Royalty.) Notwithstanding anything to the
contrary herein, the Parties shall share equally any
responsibility for any Third Party patent infringement
action concerning a Combination Product to the extent
that the claim of infringement alleges use of the VP
Compound in connection with any other Compound or
product.
10.3 Trademarks and Logos.
10.3.1 Trademark Selection, Ownership and Use. VP Product shall be
promoted and sold under Trademarks selected by ViroPharma and
SaSy in their sole discretion. If VP Product is not promoted
and sold under the trademark PICOVIR, ViroPharma shall obtain
Aventis' agreement before proposing to SaSy any of the other
Trademarks, or before selecting any new trademark, to be used
in promoting and selling VP Product. The
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Parties understand that SaSy is the sole owner of the
Trademarks and any goodwill pertaining therein. Aventis shall
use the Trademarks only to the extent explicitly permitted by
this Agreement and only in the manner provided in this
Agreement, including without limitation Section 5.16. Upon
the termination of Aventis' right to promote VP Product,
including without limitation, the termination of this
Agreement for any reason, Aventis shall immediately stop
using the Trademarks in any way.
10.3.2 Trademark Prosecution and Maintenance. ViroPharma shall use
reasonable efforts to ensure that the trademark PICOVIR may
be used for the promoting and selling of VP Product.
Consistent with Laws, ViroPharma shall make, or shall use
reasonable efforts to ensure that SaSy makes, adequate
filings for, and prosecute and maintain, all Trademarks in
the Territory unless ViroPharma reasonably believes that any
such Trademark is not material to the matters contemplated in
this Agreement. ViroPharma shall consult with Aventis before
abandoning, or upon ViroPharma's receipt of notice from SaSy
that SaSy contemplates abandoning, any Trademarks that are
material to the matters contemplated in this Agreement. At
Aventis' reasonable request ViroPharma shall advise Aventis
of the status of pending applications, shall provide Aventis
with copies of documentation concerning such applications and
shall consult with Aventis before taking any action
materially affecting the Trademarks that are used for
promoting VP Product. The provisions of this Section 10.3.2
shall be subject to any limitations or rights contained in
the SaSy Agreement.
10.3.3 Aventis Logo and ViroPharma Logo. Each Party hereby grants to
the other Party the right to use, and the other Party hereby
agrees to use to the extent requested by the first Party and
as agreed to by the JSC, the first Party's Logo on labeling,
package inserts and packaging materials for VP Product, all
Promotional Materials, Samples and any other materials used
in connection with the performance of this Agreement during
the Term of this Agreement and until the exhaustion of any
such materials existing on the expiration or termination of
this Agreement; provided, however, such use shall be
consistent with the uses approved by the first Party's
representatives on the Joint Steering Committee, or the
Marketing Subcommittee thereof, such approval not to be
unreasonably withheld and in accordance with such first
Party's guidelines for the use of such Logo. Neither Party
shall have any rights under this Agreement in or to the other
Party's Logo or the goodwill pertaining thereto except as
specifically provided for herein.
10.3.4 Notice of Infringement. If either Party becomes aware of any
infringement in the Territory of any Trademark, it shall
promptly notify the other Party in writing.
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10.3.5 Aventis shall not register or attempt to register in the
Territory any trade name, trademark, service ▇▇▇▇,
certification ▇▇▇▇, or logo that is confusingly similar to,
or that contains elements that are confusingly similar to,
any of the Trademarks. ViroPharma shall not register or
attempt to register in the Territory any trade name,
trademark, service ▇▇▇▇, certification ▇▇▇▇, or logo that is
confusingly similar to, or that contains elements that are
confusingly similar to or any trademark covering an Aventis
Product.
10.4 Promotional Material Copyrights. ViroPharma and Aventis shall jointly
own all right, title and interest in and to any Promotional Materials
that are directed to any VP Product, whether generated by Aventis or
its Affiliates, ViroPharma or its Affiliates, or any Third Parties,
or by any of the Parties and/or their Affiliates and/or such Third
Parties jointly, including all applicable copyrights. Aventis and
ViroPharma shall retain all rights, including, without limitation,
copyrights and trademarks, to all of their respective existing
programs and materials in all formats (print, video, audio, digital,
computer, etc.) regarding sales training, patient education and
disease management programs currently owned by each, as well as any
modifications of such programs each may develop in the future which
are not specific to any VP Product. Aventis and ViroPharma shall,
from time to time, each notify the other as to the identity of such
proprietary programs. Each Party grants the other the royalty-free,
sublicensable right and license in the Territory to use in any
labeling, package inserts and packaging materials for VP Product, all
Promotional Materials, Samples and any other materials used in
connection with the performance of this Agreement any program or
material that has been specifically adapted for, or directed to, any
VP Product, during the Term of this Agreement and until the earlier
of the first anniversary of the termination or expiration of this
Agreement, and the exhaustion of any such materials existing on the
expiration or termination of this Agreement.
10.5 SaSy Agreement. Under no circumstances shall ViroPharma terminate the
SaSy Agreement without the prior written consent of Aventis.
ViroPharma shall promptly provide Aventis with: (a) a description of
any oral conversations with SaSy that materially affect either the
SaSy Agreement or this Agreement (b) copies of all correspondence
either delivered by or received by ViroPharma, to or from SaSy, which
relate to or affect either the SaSy Agreement or this Agreement
(including, without limitation, any notification, whether orally or
in writing, concerning the termination of the SaSy Agreement), and
(c) any written materials and other information prepared in
connection with any meeting with SaSy prior to any such meeting
(collectively, "SaSy Information"); but in each case excluding any
information which ViroPharma is not entitled to disclose to Aventis.
To the extent that ViroPharma does not have the right to disclose to
Aventis any SaSy Information and to the extent such SaSy Information
materially adversely effects Aventis' right pursuant to this
Agreement, ViroPharma shall use commercially reasonable efforts to
obtain the right to disclose such SaSy Information to Aventis.
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10.6 Mutual Covenant Upon SaSy Breach.
10.6.1 SaSy Breach. In the event of any breach or threatened breach
of the SaSy Agreement by SaSy:
(a) The Parties shall promptly consult with each other as to
the appropriate course of action.
(b) If the Parties mutually agree to give or initiate any
notices, actions, challenges, proceedings or
negotiations to, against or with SaSy with respect to
such breach or alleged breach of the SaSy Agreement (a
"SaSy Breach Dispute"):
(i) The Parties will jointly control such SaSy Breach
Dispute;
(ii) Each Party shall cooperate fully with the other
and act in a reasonable manner and in the best
interests of the collaboration formed hereunder
with respect to all matters regarding such SaSy
Breach Dispute, including, without limitation,
bringing together any suits that may be brought
against SaSy;
(iii) Before contacting SaSy or making any response to
SaSy with respect to such SaSy Breach Dispute, a
Party shall consult with the other Party and
neither Party shall undertake any discussion with
SaSy without the participation of the other Party;
(iv) Each Party shall have the right to participate in
all discussions with SaSy regarding such SaSy
Breach Dispute;
(v) Each Party shall bear its own expenses with
respect to such SaSy Breach Dispute; and
(vi) Any economic benefit received by the Parties in
connection with any SaSy Breach Dispute shall be
shared equally by the Parties, after reimbursement
of each Party's reasonable out-of-pocket expenses
incurred in connection with such SaSy Breach
Dispute.
(c) Neither Party shall enter into any settlement agreement
with SaSy without the prior written consent of the other
Party which consent shall not be unreasonably withheld
or delayed.
10.6.2 Non-Aventis Breach. If ViroPharma receives notice from SaSy
with respect to ViroPharma's breach or alleged breach of the
SaSy Agreement
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Page 90
and ViroPharma acknowledges that if such breach in fact
occurred as alleged by SaSy, then such breach was caused
solely by ViroPharma:
(a) ViroPharma Cure. ViroPharma shall promptly take all
appropriate actions to cure such breach or alleged
breach and shall keep Aventis informed of all such
actions taken.
(b) Aventis Option to Cure. In its sole discretion and at
any time upon notice to ViroPharma, Aventis shall have
the right (but not the obligation), to the extent
possible, to cure any and all breaches by ViroPharma of
the SaSy Agreement. In furtherance of the foregoing, to
the broadest extent permitted under the SaSy Agreement
without requiring the prior written consent of SaSy,
ViroPharma hereby grants to Aventis any and all rights
and non-exclusive licenses necessary in order for
Aventis to cure such breach. Aventis shall charge the
actual amounts reasonably incurred by it in curing such
breach to its Development Account or Commercialization
Account (the "Cure Amount"), as appropriate, and in
addition ViroPharma shall pay Aventis an amount equal to
the Cure Amount, which shall not be charged to either
Party's Development Account or Commercialization
Account.
(c) Aventis Control of Actions. Aventis shall have the right
(but not the obligation), exercisable within thirty (30)
days (fifteen (15) days in the event of litigation) of
the notice described above in this Section 10.6.2, to
initiate, control, or participate in any notices,
actions, challenges, proceedings or negotiations to,
against or with SaSy with respect to any breach or
alleged breach of the SaSy Agreement subject to this
Section 10.6.2 (a "Section 10.6.2 Breach Challenge"), as
follows:
(i) If Aventis elects to initiate or control any such
Section 10.6.2 Breach Challenge, ViroPharma shall,
at its sole cost and expense, cooperate fully with
Aventis and its counsel, join in any such suits
that Aventis brings, and make itself available at
Aventis' reasonable request to assist in any such
Section 10.6.2 Breach Challenge. Before contacting
or making any material response to SaSy with
respect to the substance or settlement of such
Section 10.6.2 Breach Challenge, Aventis shall
consult with ViroPharma and ViroPharma shall have
the right to participate in, and Aventis shall not
engage in without ViroPharma, any material
discussions with SaSy regarding the substance or
settlement of such Section 10.6.2 Breach Challenge.
(ii) If Aventis fails to elect within the time frame
described above in this Section 10.6.2(c), or
elects not to initiate or
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control any such Section 10.6.2 Breach Challenge,
Aventis shall, at ViroPharma's sole cost and
expense, cooperate fully with ViroPharma and its
counsel, join in any such suits that ViroPharma
brings, and make itself available at ViroPharma's
reasonable request to assist in any such Section
10.6.2 Breach Challenge. Before contacting or
making any response to SaSy with respect to such
Section 10.6.2 Breach Challenge, ViroPharma shall
consult with Aventis and Aventis shall have the
right to participate in, and ViroPharma shall not
engage in without Aventis, any material
discussions with SaSy regarding substance or
settlement of such Section 10.6.2 Breach
Challenge. At any time, upon notice to
ViroPharma, Aventis may assume control of such
Section 10.6.2 Breach Challenge.
(iii) Each Party shall perform all activities with
respect to any Section 10.6.2 Breach Challenge in
a reasonable manner, and in the best interests of
the collaboration formed hereunder, and shall
adopt all reasonable suggestions and
recommendations of the other Party with respect
to such Section 10.6.2 Breach Challenge. Neither
Party shall enter into any settlement agreement
with SaSy without the other Party's prior written
consent, which consent shall not be unreasonably
withheld or delayed.
(iv) Whether or not Aventis assumes control of any
Section 10.6.2 Breach Challenge, ViroPharma
shall:
a. Reimburse Aventis for all reasonable out-of-
pocket costs and expenses incurred by Aventis
in connection with such Section 10.6.2 Breach
Challenge.
b. Assume and bear full responsibly for or
otherwise reimburse Aventis for any amounts
required to be paid to SaSy or any Third
Party on behalf of SaSy in settlement of the
Section 10.6.2 Breach Challenge, including,
without limitation, any royalties or other
payments, and any such amounts shall not be
treated as a Commercialization Expense or
Development Expense hereunder.
(d) If:
(i) The breach or alleged breach of the SaSy
Agreement subject to this Section 10.6.2 is
cured,
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Page 92
(ii) The Parties obtain a final non-appealable judgment
terminating the Section 10.6.2 Breach Challenge,
(iii) There is a judgment regarding the Section 10.6.2
Breach Challenge that SaSy and the Parties agree
not to appeal; or
(iv) The Parties enter into a binding agreement
settling the Section 10.6.2 Breach Challenge,
in which case, or as a result of which the SaSy
Agreement continues to be in full force and effect, then
the provision of this Section 10.6.2 (other than payment
obligations or liabilities incurred prior to such time)
shall cease to be in effect until the next occurrence of
an event triggering the provisions of this Section
10.6.2.
10.6.3 Other Breach. If ViroPharma receives notice from SaSy with
respect to ViroPharma's breach or alleged breach of the SaSy
Agreement, other than a breach subject to Section 10.6.2:
(a) The Parties shall consult with each other promptly as
to the appropriate course of action.
(b) If the Parties agree to give or initiate any notices,
actions, challenges, proceedings or negotiations to,
against or with SaSy with respect to such breach or
alleged breach of the SaSy Agreement (a "SaSy
Dispute"):
(i) The Parties will jointly control such SaSy
Dispute.
(ii) Each Party shall cooperate fully with the other
and perform all activities with respect to such
SaSy Dispute in a reasonable manner, and in the
best interests of the collaboration formed
hereunder, including, without limitation, joining
in any suits which may be brought against SaSy,
and shall adopt all reasonable suggestions and
recommendations of the other Party with respect
to such SaSy Dispute.
(c) Each Party shall bear its own expenses with respect to
such SaSy Dispute.
(d) Each Party shall have the right to participate in, and
neither Party shall undertake, without the other Party,
any discussions with SaSy regarding such SaSy Dispute.
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Page 93
(e) Neither Party shall enter into any settlement agreement with
SaSy without the prior written consent of the other Party
which consent shall not be unreasonably withheld or delayed.
11. CONFIDENTIALITY.
11.1 Confidential Information.
11.1.1 General Prohibition on Disclosure and Use. Except to the
extent expressly authorized by this Agreement, or otherwise
agreed in writing, during the longer of (a) the term of this
Agreement and for five (5) years thereafter, (b) the term of
the SaSy Agreement and for five (5) years thereafter, (c)
perpetually for trade secrets, and (d) until the issuance of
a relevant patent for material in a patent application, each
Party shall, and shall cause its Affiliates to, maintain in
confidence with at least the same degree of care it uses for
its own confidential information, but no less than reasonable
care, and shall use all Confidential Information disclosed by
the other Party only for purposes of this Agreement.
11.1.2 Permitted Disclosure and Use for Purposes of Agreement.
Notwithstanding the foregoing Section 11.1.1, a Party may
disclose the other Party's Confidential Information to those
of its Affiliates, directors, officers, employees, agents,
consultants and sublicensees that have a need to know such
Confidential Information in order to achieve the purposes of
this Agreement, provided that such Party obtains prior
assurances of confidential treatment from such disclosees at
least as restrictive as those set forth herein. Each Party
will promptly notify the other upon discovery of any
unauthorized use or disclosure of the other Party's
Confidential Information. Any breach of this obligation of
confidentiality by an Affiliate, director, officer, employee,
agent, consultant, or sublicensee of a Party shall be deemed
a breach by that Party.
11.1.3 Other Permitted Disclosure and Use. Notwithstanding Section
11.1.1, a Party may disclose Confidential Information
belonging to the other Party only to the extent such
disclosure is reasonably necessary to:
(a) obtain Regulat ory Approval of VP Product;
(b) enforce the provisions of this Agreement;
(c) comply with Laws; or
(d) comply with the requirements of the SaSy Agreement.
If a Party deems it necessary to disclose Confidential
Information of the other Party pursuant to this Section
11.1.3, such Party shall give reasonable advance notice of
such disclosure to the other Party to permit
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Page 94
such other Party sufficient opportunity to object to such
disclosure or to take measures to ensure confidential
treatment of such information.
11.1.4 Disclosure of this Agreement. ViroPharma shall provide SaSy
with a copy of this Agreement upon its execution, and such
action shall not be a breach of this Agreement.
11.2 Publications. Each Party shall submit to the other Party for review
and approval all proposed academic, scientific and medical
publications and public presentations relating to the VP Compounds,
VP Product, or any research or development activities under this
Agreement for review in connection with preservation of Patent
rights, and trade secrets and/or to determine whether Confidential
Information should be modified or deleted from the proposed
publication or public presentation. Written copies of such proposed
publications and presentations shall be submitted to the
nonpublishing Party no later than sixty (60) days before submission
for publication or presentation and the non-publishing Party shall
provide its comments with respect to such publications and
presentations within ten (10) business days of its receipt of such
written copy. The review period may be extended for an additional
thirty (30) days if the nonpublishing Party can demonstrate a
reasonable need for such extension including, but not limited to, the
preparation and filing of patent applications. By mutual agreement,
this period may be further extended. The Parties will each comply
with standard academic practice regarding authorship of scientific
publications and recognition of contribution of other parties in any
publications relating to the VP Compounds, VP Product, or any
research or development activities under this Agreement.
Notwithstanding anything to the contrary in this Section 11.2, this
Section 11.2 shall apply to material intended to be disclosed at the
Interscience Conference on Antimicrobial Agents and Chemotherapy
("ICAAC"), September 22-25, 2001, and the Annual Meeting of the
Infectious Diseases Society of America, October 25-28, 2001, only to
the extent feasible.
11.3 Public Announcements.
11.3.1 Except as may be expressly permitted under Section 11.2 or
required by applicable Laws, neither Party will make any
public announcement of any information regarding this
Agreement, the VP Compounds, VP Product, or any research or
development activities under this Agreement without the prior
written approval of the other Party. Once any written
statement is approved for disclosure by the Parties or
information is otherwise made public in accordance with the
preceding sentence, either Party may make a subsequent public
disclosure of the contents of such statement without further
approval of the other Party.
11.3.2 Aventis acknowledges that ViroPharma will file this Agreement
with the SEC, and agrees that such filing shall not be a
breach of this Agreement provided that the Agreement as filed
shall be redacted such that the extent of disclosure shall be
limited to that which is legally required to be
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Page 95
disclosed, while not adversely affecting the promptness with
which ViroPharma can obtain the SEC's clearance of such
redaction. ViroPharma will provide Aventis with a copy of any
redaction proposed to be submitted with the SEC within a
reasonable time prior to submission to the SEC and will adopt
reasonable suggestions made by Aventis to the extent
consistent with this Section 11.3.2.
12. CHANGE OF CONTROL.
12.1 Notice of Change of Control Transactions. Subject to applicable Law,
ViroPharma shall promptly notify Aventis in the event that ViroPharma
(a) has entered into an agreement for a Change of Control or (b)
learns of the initiation of any transaction of the type described in
Section 12.2.2.
12.2 Termination of Standstill Agreement. The Standstill Agreement shall
terminate and be of no further force and effect and Aventis shall
have the right to acquire any securities of ViroPharma in the event
that:
12.2.1 ViroPharma has entered into an agreement for a Change of
Control; or
12.2.2 a tender or exchange offer is made by any Person, other than
Aventis or any of its Affiliates, or 13D Group, of which none
of Aventis or any of its Affiliates is a party, to acquire
Voting Securities of ViroPharma which, if added to the Voting
Securities of ViroPharma (if any) already owned by such
Person or 13D Group, would result, if consummated in
accordance with its terms, in the Beneficial Ownership by
such Person or 13D Group of more than fifty percent (50%) of
the Total Voting Power of all Voting Securities of ViroPharma
then outstanding.
12.3 Maintenance of SaSy Agreement. Before ViroPharma consummates a Change
of Control or, to the extent practicable, before it recommends to its
stockholders a tender or exchange offer of the type described in
Section 12.2.2, in either case, ViroPharma shall use commercially
reasonable efforts to ensure that the SaSy Agreement shall continue
and that the scope and term of Aventis' rights hereunder shall remain
unaffected and continue on identical economic terms.
12.4 SaSy Notice of Termination. If any of the events set forth in
Sections 12.2.1 or 12.2.2, or a Change of Control occurs, and SaSy
has threatened to terminate or has given written notice of its
termination of the SaSy Agreement pursuant to Section 12.4(a) of the
SaSy Agreement, then ViroPharma shall notify Aventis thereof and:
12.4.1 The Parties shall consult with each other promptly as to the
appropriate course of action.
12.4.2 The Parties shall promptly give and initiate any notices,
actions, challenges, proceedings or negotiations to, against
or with SaSy to oppose
________________________________________________________________________________
Page 96
such actual or threatened termination of the SaSy Agreement
(a "Termination Challenge"):
(a) The Parties will jointly control such Termination
Challenge.
(b) Each Party shall cooperate fully with the other and
perform all activities with respect to such Termination
Challenge in a reasonable manner, and in the best
interests of the collaboration formed hereunder,
including, without limitation, joining in any suits
which may be brought against SaSy or ViroPharma, and
shall adopt all reasonable suggestions and
recommendations of the other Party with respect to such
Termination Challenge.
(c) Each Party shall bear its own expenses with respect to
such Termination Challenge.
(d) Each Party shall have the right to participate in, and
neither Party shall undertake, without the other Party,
any discussions with SaSy regarding such Termination
Challenge.
(e) Neither Party shall enter into any settlement agreement
with SaSy without the prior written consent of the other
Party which consent shall not be unreasonably withheld
or delayed, provided, however, that:
(i) If ViroPharma unreasonably withholds or delays its
consent to any settlement agreement that Aventis
wishes to accept:
a. Notwithstanding Section 12.4.2(c), ViroPharma
shall reimburse Aventis for all of Aventis'
costs and expenses (including reasonable
attorneys fees) with respect to such
Termination Challenge incurred from the date
that ViroPharma unreasonably withholds or
delays such consent and, thereafter, ViroPharma
shall be responsible for all such costs and
expenses; and
b. If, (x) the Parties obtain a final non-
appealable judgment regarding the Termination
Challenge; (y) there is a judgment in favor of
SaSy which the Parties mutually agree not
appeal or (z) the Parties enter into a binding
agreement settling the Termination Challenge,
which in any case results in the SaSy Agreement
being terminated, ViroPharma shall reimburse
Aventis for its investment in the transactions
contemplated by this Agreement (other than the
transaction contemplated by the Stock Purchase
Agreement) (the "Investment") plus a
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Page 97
****** percent (******%) return on investment
compounded annually, less all ******
distributed to or retained by Aventis or its
Affiliates pursuant to this Agreement
(together, the "Reimbursement Payment"). The
Investment shall be measured on the basis of
payments made by Aventis pursuant to Sections
8.1 and 8.3, and Aventis' share of Development
Expenses and Commercialization Expenses
incurred through the date of termination of the
SaSy Agreement. The Reimbursement Payment shall
be made within thirty (30) days of the
effective date of the termination of the SaSy
Agreement.
(ii) Aventis shall be deemed to have consented to such
settlement agreement if:
a. Aventis' rights under this Agreement are not
materially adversely affected by such
settlement agreement;
b. The economic impact of the proposed settlement
agreement can be determined with reasonable
certainty, such that ViroPharma's obligation
under Section 12.4.2(e)(iii) can be
implemented without dispute.
(iii) ViroPharma shall assume and bear full responsibly
for or otherwise reimburse Aventis for any amounts
required to be paid to SaSy under the settlement
agreement, including, without limitation, any
royalties or other payments, and any such amounts
shall not be treated as a Development Expense or a
Commercialization Expense hereunder.
12.4.3 Temporary Expansion of Aventis Rights. Upon the earlier of (x)
the receipt from SaSy of written notice of SaSy's termination
of the SaSy Agreement pursuant to Section 12.4(a) of the SaSy
Agreement, or (y) the threat from SaSy of an intent to
terminate the SaSy Agreement pursuant to Section 12.4(a) of
the SaSy Agreement that ViroPharma agrees should effect an
expansion of Aventis' rights under this Section 12.4.3, then
Aventis shall have the right (but not the obligation)
effective upon written notice to ViroPharma, and to the
broadest extent permitted under the SaSy Agreement without
requiring the prior written consent of SaSy, to increase the
extent of its licenses and rights to permit Aventis to perform
any or all, at Aventis' option, of ViroPharma's development,
manufacturing and marketing of VP Compounds and VP Product
under this Agreement as follows:
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Page 98
(a) To the broadest extent permitted under the SaSy Agreement
without requiring the prior written consent of SaSy
ViroPharma grants to Aventis the royalty-free, non-
sublicensable, except as set forth in Sections 2.3, 2.4
and 2.5, right and license in the Territory and in the
Field to use the ViroPharma Technology to make or have
made VP Compounds or VP Products. ViroPharma will, at
Aventis' request, use its commercially reasonable efforts
to obtain any consents necessary from SaSy to effectuate
the foregoing, or otherwise cooperate with Aventis in
effectuating any of the foregoing.
(b) ViroPharma shall suspend its development, manufacturing
and marketing of VP Compounds and VP Product under this
Agreement to the extent that Aventis has selected and
started performing any such activities (except with
respect to manufacturing as may be required pursuant to
the SaSy Agreement).
(c) Aventis shall have the sole right to perform the
activities it has selected and started to perform with
respect to development, manufacturing and marketing of VP
Compounds and VP Product (except with respect to
manufacturing as may be required pursuant to the SaSy
Agreement).
(d) ViroPharma shall use its best efforts to maintain
Aventis' supply of VP Compounds or VP Products.
(e) ViroPharma shall, on a Regulatory Approval-by Regulatory
Approval basis, and at the direction of and in
consultation with Aventis, use its best efforts to
maintain the effectiveness of such Regulatory Approvals
or any successors thereto.
(f) ViroPharma's rights and obligations pursuant to Sections
8.1, 8.2, 8.3, 8.4 and 8.5 shall continue, and, in
addition, ViroPharma shall pay Aventis any reasonable
amounts by which Aventis' costs to perform any activities
undertaken by Aventis pursuant to this Section 12.4.3
exceed the amounts budgeted for such activities in the
applicable Development Plan and Budget or
Commercialization Plan and Budget, and any such
additional payment by ViroPharma shall not be a
Development Expense or Commercialization Expense. For the
sake of clarity, ViroPharma's obligation to pay its
portion of Development Expenses and Commercialization
Expenses shall continue under this Section 12.4.3(f).
(g) Aventis acknowledges that this Section 12.4.3 in no way
grants to Aventis any rights under the SaSy Agreement,
and gives Aventis
________________________________________________________________________________
Page 99
no interest in the Intellectual Work Product, the IWP
Patents, the SaSy Patents, or the ViroPharma Technology,
except as otherwise expressly set forth in this
Agreement.
(h) Aventis shall take no action that materially adversely
affects the SaSy Agreement, the SaSy Patents, the
ViroPharma Technology, the Intellectual Work Product, or
the IWP Patents.
(i) The Parties agree to exert commercially reasonable
efforts to assure a smooth transition for any activities
undertaken by Aventis under this Section 12.4.3, and
suspended by ViroPharma pursuant to Section 12.4.3(b).
(j) During the time that Aventis has expanded its right under
this Section 12.4.3, (x) ViroPharma's participation on
the JSC and any of its subcommittees shall be suspended
and Aventis shall be the sole participant thereon, and
(y) Aventis shall have a royalty-free right and license
(but not the obligation) under ViroPharma's rights to
perform all such activities no longer being performed by
ViroPharma.
(k) If (i) the Parties obtain a final non-appealable judgment
regarding the Termination Challenge; (ii) there is a
judgment regarding the Termination Challenge that SaSy
and the Parties agree not to appeal; or (iii) the Parties
enter into a binding agreement settling the Termination
Challenge, in each case, as a result of which the SaSy
Agreement continues to be in full force and effect, then
the provisions of Section 12.4.3 shall cease to be in
effect, other than payment obligations or liabilities
incurred before such time.
The provisions of this Section 12.4.3 shall be subject to and
implemented in accordance with any ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ filing
requirements.
12.4.4 Suspension of Activities. If a Change of Control of ViroPharma
that would enable Aventis to expand temporarily its rights
pursuant to Section 12.4.3 does not involve a Major Company,
instead of temporarily expanding its rights pursuant to
Section 12.4.3, Aventis shall have the right (but not the
obligation) upon written notice to ViroPharma, to suspend its
promotion, Detailing and Distribution of VP Products until the
earlier of:
(a) an agreement has been reached with SaSy permitting the
continued promotion, Detailing and Distribution of VP
Products by Aventis and ViroPharma,
(b) a final, non-appealable judgment has been entered to the
effect that the promotion, Detailing and Distribution of
VP Products does not infringe SaSy's Patents in the
Field, or
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Page 100
(c) the Parties (i) obtain a final non-appealable judgment
regarding the Termination Challenge; (ii) there is a
judgment regarding the Termination Challenge that SaSy
and the Parties agree not to appeal; or (iii) enter into
a binding agreement settling the Termination Challenge,
in each case, as a result of which the SaSy Agreement
continues to be in full force and effect.
During the time that Aventis has suspended any activities
under this Section 12.4.4, (x) Aventis' participation on the
JSC and any of its subcommittees shall also be suspended and
ViroPharma shall be the sole participant thereon, and (y)
ViroPharma shall have a royalty-free right and license (but
not the obligation) under Aventis' rights to perform all such
activities no longer being performed by Aventis, and Aventis
shall have no right to share in the Net Profits from such VP
Products.
12.4.5 Resumption of Activities. Upon the occurrence of any of the
events described in Section 12.4.4(a-c), Aventis shall resume
the promotion, Detailing and Distribution of VP Products
suspended pursuant to Section 12.4.4 and, if ViroPharma
exercised its right and license to perform all activities no
longer being performed by Aventis, then, unless ViroPharma has
ceased performing commercialization activities, Aventis shall
pay ViroPharma an amount equal to ****** percent (******%) of
any reasonable amounts by which ViroPharma's costs to perform
any activities undertaken by ViroPharma pursuant to Section
12.4.4 exceed the amounts budgeted for such activities in the
applicable Development Plan and Budget or Commercialization
Plan and Budget, and any such payment by Aventis shall not be
a Development Expense or Commercialization Expense (the "Buy-
in Amount"). Payment of the Buy-in Amount shall be made
through Aventis' payment to ViroPharma of a percentage of the
amount of Net Profits from sales of VP Product due to Aventis
as set forth below, which paid amount shall be credited
against the Buy-in Amount, until the complete payment of such
Buy-in Amount:
Calendar Quarters after Percentage of Net Profits from
the Occurrence of Any of sales of VP Product due to
the Events Described in Aventis Required to be Paid to
Section 12.4.4(a-c) ViroPharma
------------------------- ------------------------------
****** ******%
****** ******%
****** ******%
****** ******%
****** ******%
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12.5 Aventis Put Option; ViroPharma Call Option.
12.5.1 If at any time during the term of this Agreement there shall
occur a Change of Control of ViroPharma involving an Aventis
Competitor, then within forty-five (45) days after the date
of such event, Aventis may by written notice delivered to
ViroPharma elect to cause a valuation of the Aventis Interest
pursuant to Section 12.5.3. If Aventis makes such election,
then Aventis shall sell to ViroPharma the Aventis Interest in
accordance with Section 12.5.5.
12.5.2 If at any time during the Term there shall occur a Change of
Control of Aventis or Aventis, S.A., involving a Person that:
(a) sells a pharmaceutical product that is a direct
competitor of VP Product that has achieved a North
American market share of at least seven and one-half
percent (7.5%) for the Calendar Year immediately
preceding the Change of Control based on total
prescription sales, as reported in the corresponding IMS
ATC II or III category,
(b) sells a prescription or OTC pharmaceutical product that
is an indirect competitor of VP Product that has
achieved a North American market share of at least seven
and one-half percent (7.5%) for the Calendar Year
immediately preceding the Change of Control based on
total sales, as reported in the corresponding IMS ATC II
or III category,
(c) sells other prescription pharmaceutical products such
that VP Product was among the top ten (10) products in
the product portfolio of Aventis for the Calendar Year
immediately preceding the Change of Control based on
total prescription sales, as reported in the
corresponding IMS ATC II or III category, and VP Product
will not be among the top ten (10) products in the
product portfolio of such combined entity by Net Sales
for the Calendar Year immediately preceding the Change
of Control based on total prescription sales, as
reported in the corresponding IMS ATC II or III
category,
then within forty-five (45) days after the date of such
event, ViroPharma may by written notice delivered to Aventis
elect to cause a valuation of the Aventis Interest pursuant
to Section 12.5.3. If ViroPharma makes such election, then
ViroPharma shall purchase from Aventis the Aventis Interest
in accordance with Section 12.5.5.
12.5.3 If Aventis elects to cause a valuation of the Aventis
Interest pursuant to Section 12.5.1 or ViroPharma elects to
cause a valuation of the Aventis Interest pursuant to Section
2.7.5(b), or 12.5.2, the price (the "Aventis
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Interest Price") to be paid for the Aventis Interest shall be
conclusively determined by two internationally recognized
investment banking firms, one of which shall be retained and
paid by Aventis and one of which shall be retained and paid
by ViroPharma; provided that, if either Party fails to
deliver notice to the other Party of its selection of an
investment banking firm within twenty (20) days after notice
by the other Party that it has selected an investment banking
firm (which notice shall identify such firm), the
determination shall be rendered by the single investment
banking firm so selected (whose fees, in such case, shall be
borne equally by the Parties). Aventis and ViroPharma shall
promptly notify each other of its respective selections. The
investment banking firms selected in accordance with the
foregoing procedure shall each determine the fair market
value of the Aventis Interest as contained in written reports
prepared in accordance with this Section 12.5.3 and shall
submit their determinations of such value to Aventis and
ViroPharma within thirty (30) days following their selection.
Each value of the Aventis Interest Price determined under
this Section 12.5.3 for the Aventis Interest shall be an
amount that, on the basis of market and other conditions
prevailing at such time, could reasonably be expected to be
paid therefor by a Third Party in an arm's-length
transaction, assuming that the buyer and seller are under no
compulsion to buy or sell, it being understood and agreed
that all intellectual property rights and other assets
licensed, leased or otherwise made available by the Parties
and their respective Affiliates hereunder shall only be
valued on a going concern basis in terms of such availability
and use under this Agreement.
12.5.4 The Aventis Interest Price shall be the amount equal to the
sum of such fair market values for the Aventis Interest
determined by the two (2) investment banking firms divided by
two (2), except that if there is more than a ten percent
(10%) difference between such values, a third investment
banking firm (which is a "top-tier" or "bulge-bracket"
investment banking firm) selected by the first two investment
banking firms (or, if the two investment banking firms are
unable to select such a third investment banking firm within
twenty (20) days following submission of the two initial
valuations, then the two initial investment banking firms
within twenty (20) days thereafter each shall submit the
names of three investment banking firms (each of which is a
"top-tier" or "bulge-bracket" investment banking firm)
willing to act as the third investment banking firm
hereunder, one of which firms shall be selected by lot by the
Parties) shall determine such fair market value by selecting
one (but only one) of the two values previously determined by
the first two investment banking firms pursuant to this
Section 12.5.4. The cost of such third investment banking
firm shall be borne one half (50%) by Aventis and one half
(50%) by ViroPharma.
12.5.5 Any purchase and sale of the Aventis Interest pursuant to
this Section 12.5 shall be consummated at closing at the
principal offices of Aventis on a
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business day within ninety (90) days following the
determination of the Aventis Interest Price on such date as
the Parties shall mutually agree; provided that such period
shall be extended for such period of time as shall be
necessary in order to obtain requisite governmental or
regulatory approvals with respect to such transaction. At
such closing, ViroPharma shall pay the Aventis Interest Price
by wire transfer of immediately available funds.
12.5.6 Upon the closing of the transactions contemplated by this
Section 12.5, the Parties shall take all commercially
reasonable steps to transition the performance of Aventis'
obligations under this Agreement to ViroPharma and execute
such other documents as are necessary to transfer all of the
Aventis Interest in order to release Aventis from all
obligations under this Agreement effective as of the time of
such sale (except as expressly provided herein).
13. TERM & TERMINATION.
13.1 Term.
13.1.1 Initial Term. The initial term of this Agreement will begin
on the Effective Date and, unless terminated earlier in
accordance with this Article 13, will extend for each VP
Product Exclusivity Unit, until the expiration of the
applicable VP Product Exclusivity Period, unless renewed
pursuant to Section 13.1.2 below.
13.1.2 Renewal. For each VP Product Exclusivity Unit, the initial
term and any subsequent renewal terms of this Agreement shall
be extended by consecutive renewal terms of one year each
unless:
(a) Aventis provides notice to ViroPharma of its intent not
to renew the term of this Agreement for such VP Product
Exclusivity Unit at least six (6) months before the date
of such renewal, or
(b) the initial or renewal term of this Agreement is
terminated earlier in accordance with this Article 13.
13.2 Restriction on Termination Right. Notwithstanding anything to the
contrary in this Article 13, neither Party may exercise any of the
termination rights set forth in this Article 13 if such Party is then
in breach of this Agreement, which breach has not been timely cured
by such Party, or waived by the other Party in writing.
13.3 Termination for Failure to Perform Details. If a Party incurs two (2)
Lapse Years in any consecutive three (3) Calendar Year period, and
the other Party incurs no Lapse Year during this period, then the
Party incurring no Lapse Years may, at its discretion, within thirty
(30) days of confirming the occurrence of such other Party's Lapse
Years, terminate this Agreement upon thirty (30) days written notice.
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13.4 Termination for Failure of Supply. If during the Initial Supply
Period:
13.4.1 for any six (6) consecutive months the number of units of
Finished VP Product delivered in each of such months is less
than ****** percent (******%) of the number of units (SKU) in
each Firm Order to be delivered in such month, or
13.4.2 for any ten (10) months in any consecutive twelve (12) months
the number of units (SKU) of Finished VP Product delivered in
each of such months is less than ****** percent (******%) of
the number of units (SKU) in each Firm Order to be delivered
in each such month
then within thirty (30) days of the occurrence of either of the
events described in Section 13.4.1 or 13.4.2, Aventis may terminate
this Agreement upon thirty (30) days written notice. The failure to
supply VP Product subject to Section 6.2.2 shall not be a material
breach of this Agreement other than for the purposes of Section 13.4
and Aventis shall not be entitled to any damages other than those
amounts specifically provided for in Section 6.2.2.
13.5 Termination for Buy-Out. This Agreement shall terminate upon the
closing date of:
13.5.1 ViroPharma's exercise of its option under Section 2.7.5(b),
or
13.5.2 either Party's exercise of its put-call rights under Section
12.5.
13.6 Aventis Termination Right.
13.6.1 Lack of Regulatory Approval. If the first Regulatory Approval
in the United States of an NDA for a VP Product for the First
Indication has not been granted before ******, Aventis may
terminate this Agreement by providing written notice of such
termination to ViroPharma not later than ******, which
termination shall become effective immediately upon
ViroPharma's receipt of such notice.
13.6.2 Sales Based. If in Calendar Year ******, Net Sales of VP
Products are not at least ****** U.S. dollars (U.S. $******)
then no later than ******, Aventis may terminate this
Agreement by providing written notice of such termination to
ViroPharma, which termination shall become effective one
hundred eighty (180) days after such notice. Thereafter, if
Net Sales of VP Product in any Calendar Year set forth below
are not at least the corresponding amounts set forth below
then at any time in the January immediately following such
Calendar Year, Aventis may terminate this Agreement by
providing written notice of such termination to ViroPharma,
which termination shall become effective one hundred eighty
(180) days after such notice:
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Calendar Net Sales of VP Product Below
Year Which Termination Right is Triggered
---- ------------------------------------
****** U.S. $******
****** U.S. $******
****** U.S. $******
13.6.3 Other. If at any time during this Agreement any of the
following events occurs, Aventis may terminate this
Agreement at any time during the sixty (60) day period after
such event first occurs by providing written notice of such
termination to ViroPharma, which termination shall become
effective one hundred eighty (180) days after such notice:
(a) FDA requires that the labeling for VP Product contain a
boxed warning relating to a serious hazard associated
with the use of VP Product;
(b) Either (i) FDA withdraws Regulatory Approval of an NDA
for VP Product, for reasons of safety or efficacy, or
(ii) ViroPharma withdraws an NDA for, or either of the
Parties ceases the marketing of, a VP Product under the
reasonable threat of, or to avoid an, FDA withdrawal of
the Regulatory Approval of the applicable NDA, for
reasons of safety or efficacy.
13.7 Consequences of Breach.
13.7.1 Generally. This Agreement may be terminated effective
immediately by written notice by either Party at any time
during the term of this Agreement for breach by the other
Party of any material representation, warranty, covenant or
agreement set forth herein, which breach remains uncured for
thirty (30) days in the case of nonpayment of any amount due
(unless there exists a bona fide dispute as to whether such
payment is owing, in which case the thirty (30) day period
shall begin on the resolution of such dispute) and thirty
(30) days for all other breaches, as may be extended by the
non-breaching Party, each measured from the date written
notice of such breach is given to the breaching Party;
provided, however, that if such breach is not susceptible of
cure within the stated period and the breaching Party uses
diligent good faith efforts to cure such breach, the stated
period will be extended by an additional thirty (30) days.
In the case of an Uncurable ViroPharma Breach, Section
13.7.3(b) shall apply.
13.7.2 Exception. The failure of a Party to perform PDEs or Details
assigned to it shall not be a material breach of this
Agreement other than for the purposes of Section 13.2.
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13.7.3 Aventis Alternative Right upon ViroPharma Breach. In lieu of
exercising the right of termination set forth in Section
13.7.1 and seeking damages:
(a) Curable ViroPharma Breach. In its sole discretion,
Aventis shall have the right (but not the obligation),
to the extent possible, to cure any Curable ViroPharma
Breach that remains uncured following the cure
period(s) set forth in Section 13.7.1. In furtherance
of the foregoing, to the broadest extent permitted
under the SaSy Agreement without requiring the prior
written consent of SaSy, ViroPharma hereby grants to
Aventis any and all rights and non-exclusive licenses
necessary in order for Aventis to cure such breach or
alleged breach. Aventis shall charge the actual amounts
reasonably incurred by it in curing such breach to its
Development Account or Commercialization Account (the
"Cure Amount"), as appropriate, and in addition
ViroPharma shall pay Aventis an amount equal to ******,
which shall not be charged to either Party's
Development Account or Commercialization Account.
(b) Uncurable ViroPharma Breach or Multiple Curable
ViroPharma Breaches; Expansion of Aventis Rights. In
the event of an Uncurable ViroPharma Breach or ******
Curable ViroPharma Breaches in any ****** for each of
which Aventis exercises its right pursuant to Section
13.7.3(a), Aventis may elect by written notice to
ViroPharma that, to the broadest extent permitted under
the SaSy Agreement without requiring the prior written
consent of SaSy:
(i) ViroPharma grants to Aventis the royalty-free,
non-sublicensable, except as set forth in
Sections 2.3, 2.4 and 2.5, right and license in
the Territory and in the Field to use the
ViroPharma Technology to make or have made VP
Compounds or VP Products, which right shall be
exclusive, except to the extent required to
fulfill the intent of Section 13.7.3(b)(ii) or
13.7.3(b)(iii) even as to ViroPharma and its
Affiliates. ViroPharma will, at Aventis' request,
use its commercially reasonable efforts to obtain
any consents necessary for SaSy to effectuate the
foregoing, or otherwise cooperate with Aventis in
effectuating any of the foregoing.
(ii) ViroPharma shall suspend researching, developing,
manufacturing or commercializing VP Compounds and
VP Products (except with respect to manufacturing
as may be required pursuant to the SaSy
Agreement).
(iii) Aventis shall have the sole right to perform any
of the activities performed by either Party
pursuant to this
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Agreement with respect to VP Compounds and VP
Products under the Agreement (except with respect
to manufacturing as may be required pursuant to
the SaSy Agreement).
(iv) ViroPharma shall, on an agreement-by-agreement
basis, either (i) assign to Aventis agreements
relating to the supply of VP Compounds or VP
Products or (ii) use its best efforts to maintain
Aventis' supply of VP Compounds of VP Products,
and in each case Aventis shall grant to
ViroPharma a license to make or have made VP
Compounds or VP Products solely to the extent
required to achieve the purposes of this clause
(iv).
(v) ViroPharma shall, on a Regulatory Approval-by
Regulatory Approval basis, and at the direction
of and in consultation with Aventis, either (i)
assign to Aventis Regulatory Approvals concerning
VP Compounds and VP Products as soon as practical
and at ViroPharma's expense or (ii) use its best
efforts to maintain the effectiveness of such
Regulatory Approvals or any successors thereto.
(vi) From and after the date Aventis exercises its
right pursuant to this Section 13.7.3(b),
ViroPharma's rights to receive payments pursuant
to Sections 8.1, 8.2, 8.3, 8.4, and 8.5 shall
continue, and Aventis shall charge the actual
incremental amounts reasonably incurred by it in
performing the development and commercialization
activities previously allocated to ViroPharma to
its Development Account or Commercialization
Account (the "Replacement Amount"), as
appropriate, and in addition ViroPharma shall pay
Aventis an amount equal to the Replacement
Amount, which shall not be charged to either
Party's Development Account or Commercialization
Account. For the sake of clarity, ViroPharma's
obligation to pay its portion of Development
Expenses and Commercialization Expenses shall
continue under this Section 13.7.3(b).
(vii) Aventis acknowledges that this Section 13.7.3 in
no way grants to Aventis any rights under the
SaSy Agreement, and gives Aventis no interest in
the Intellectual Work Product, the IWP Patents,
the SaSy Patents, or the ViroPharma Technology,
except as otherwise expressly set forth in this
Agreement.
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(viii) Aventis shall take no action that materially
adversely affects the SaSy Agreement, the SaSy
Patents, the ViroPharma Technology, the
Intellectual Work Product, or the IWP Patents.
(ix) During the time that Aventis has expanded its
right under this Section 13.7.3, (x)
ViroPharma's participation on the JSC and any
of its subcommittees shall be suspended and
Aventis shall be the sole participant thereon,
and (y) Aventis shall have a royalty-free right
and license (but not the obligation) under
ViroPharma's rights to perform all such
activities no longer being performed by
ViroPharma.
13.8 Termination for Insolvency. To the extent permitted by Law, either
Party may terminate this Agreement if, at any time, the other Party
shall file in any court or agency pursuant to any statute or
regulation of any state or country, a petition in bankruptcy or
insolvency or for reorganization or for an arrangement or for the
appointment of a receiver or trustee of the Party or of its assets,
or if the other Party proposes a written agreement of composition or
extension of its debts, or if the other Party shall be served with an
involuntary petition against it, filed in any insolvency proceeding,
and such petition shall not be dismissed within sixty days after the
filing thereof, or if the other Party shall propose or be a party to
any dissolution or liquidation, or if the other Party shall make an
assignment for the benefit of creditors.
13.9 Termination of the SaSy Agreement. This Agreement shall automatically
terminate upon the termination or expiration of the SaSy Agreement
for any reason.
13.10 General Consequences of Termination or Expiration. Upon the
expiration or termination of this Agreement for any reason, except as
otherwise limited by Laws:
13.10.1 Survival of Accrued Rights. The rights of either Party
against the other accrued or accruing under this Agreement
or under Laws before termination, including, without
limitation, the obligations to pay any amounts, and the
consequences resulting from the termination of the SaSy
Agreement shall be unaffected.
13.10.2 Licenses. The Party which is ceasing selling and promoting
VP Product hereby grants to the other Party for the
Territory, for the period terminating immediately upon the
earlier of (i) such other Party's Distribution of all the VP
Product in its possession on the date of expiration or
termination of this Agreement or (ii) one (1) year from the
date of expiration or termination of this Agreement, a non-
exclusive, limited, royalty-free license under the granting
Party's rights to its name and logo to the extent the such
name and logo is incorporated in any
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Promotional Materials or the labeling for any VP Product
solely to the extent reasonably necessary for the other
Party to distribute such VP Product and such Promotional
Materials in connection with selling and promoting VP
Product.
13.10.3 Return of Confidential Information. Subject to the terms of
Article 11, each Party shall destroy and shall not retain
any copies of the other Party's Confidential Information,
except for one copy to be retained by legal counsel solely
for archival purposes.
13.10.4 Return of Materials. Aventis shall within thirty (30) days
of such termination or expiration deliver to ViroPharma all
VP Product, Samples, Promotional Materials, communications
materials, marketing plans and reports and other materials
related to the Promotion of VP Product.
13.11 Continuing Obligations. Upon termination or expiration of this
Agreement for any reason, the provisions of the following Articles
and Sections 7.4.1(c), 7.5, 7.6, 8.11, 10.1, 10.4, 11, 13.10, 13.11,
14.2.13, 14.3.5, 14.4, 15.1, 15.2, 15.4, 15.6, 17.2, 17.6, 17.9,
17.11shall survive in accordance with their respective terms without
limitation; it being further understood and agreed that the rights
and obligations of a Party with respect to any breach of this
Agreement, including, without limitation, any breach of this
Agreement resulting in the termination of the SaSy Agreement, or any
termination of the SaSy Agreement due to a Change of Control of
ViroPharma, prior to such termination of this Agreement shall survive
termination of this Agreement without limitation.
14. REPRESENTATIONS, WARRANTIES & COVENANTS.
14.1 Representations, Warranties of Each Party. As of the Effective Date,
each of ViroPharma and Aventis hereby represents, warrants, and
covenants to the other Party hereto as follows:
14.1.1 It is a corporation or entity duly organized and validly
existing under the laws of the state or other jurisdiction
of its incorporation or formation.
14.1.2 The execution, delivery and performance of this Agreement by
such Party has been duly authorized by all requisite
corporate action and does not require any shareholder action
or approval or the consent of any Third Party.
14.1.3 It has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
14.1.4 The execution, delivery and performance by such Party of
this Agreement and its compliance with the terms and
provisions hereof does not and will not conflict with or
result in a breach of any of the terms and provisions of or
constitute a default under: (a) a loan agreement, guaranty,
financing agreement, or other agreement or instrument
binding or affecting it or its
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property; (b) the provisions of its charter or operative
documents or bylaws; or (c) any Laws, order, writ,
injunction or decree of any court or governmental authority
entered against it or by which any of its property is bound.
14.1.5 As of the Effective Date, there are no actions, suits,
proceedings or claims, pending against it or any of its
Affiliates, or, to the best of its knowledge, threatened
against it or any of its Affiliates, at law or in equity, or
before or by any court or Regulatory Authority relating,
directly or indirectly, to any of the matters contemplated
under this Agreement, or to the research, development,
marketing or sale of any of its pharmaceutical products. To
the best of its knowledge, there are no investigations,
pending or threatened against it or any of its Affiliates,
at law or in equity, or before or by any Regulatory
Authority relating, directly or indirectly, to the matters
contemplated under this Agreement, or to the research,
development, marketing or sale of any of its pharmaceutical
products, or which would otherwise materially adversely
affect its ability to perform its obligations hereunder.
14.1.6 It shall use commercially reasonable diligence in performing
all of the activities under this Agreement.
14.1.7 It shall at all times comply with all applicable Laws
relating to its activities under this Agreement.
14.1.8 It has the full right, power and authority to grant all of
the right, title and interest in the licenses granted to the
other Party under this Agreement.
14.2 ViroPharma Representations, Warranties and Covenants. ViroPharma
hereby represents, warrants, covenants and agrees as follows:
14.2.1 As of the Effective Date hereof, Exhibit 1.81 contains a
correct and complete list of all Patents issued or pending
in the Territory relating to Pleconaril that are licensed to
ViroPharma from SaSy. Exhibit 1.100 contains a correct and
complete list of all ViroPharma Patents issued or pending in
the Territory. To the best of ViroPharma's knowledge, all of
the Patents listed in Exhibits 1.81 and 1.100 issued as of
the date hereof are valid and in full force.
14.2.2 As of the date hereof, to the best of ViroPharma's
knowledge, the manufacture, use or sale of (a) VP Compounds
or (b)the VP Product formulation for which NDA 21-245 was
submitted to the FDA on July 31, 2001 will not infringe any
valid, enforceable Third Party Patents. ViroPharma makes no
representation or warranty as to any Combination Product, or
as to the use of VP Compound or of the VP Product
formulation for which NDA 21-245 was submitted to the FDA on
July 31, 2001, in combination with other ingredients.
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14.2.3 ViroPharma agrees to comply with and observe in all material
respects its obligations under the SaSy Agreement.
14.2.4 ViroPharma agrees not to terminate or amend or otherwise
modify or waive any of the terms of the SaSy Agreement in
any way adversely affecting Aventis' rights under this
Agreement without the prior written consent of Aventis.
14.2.5 Other than as may be due under the SaSy Agreement, as of the
Effective Date, no other Royalties would be payable by
ViroPharma to any other Third Party with respect to the sale
of any VP Product if sales of VP Products were to take place
on the Effective Date.
14.2.6 The ViroPharma Technology that ViroPharma owns is owned free
from any material liens or restrictions, except as otherwise
set forth in the SaSy Agreement.
14.2.7 The SaSy Agreement is in full force and effect in accordance
with its terms, and is free and clear of any material liens
or restrictions, except for those set forth in the SaSy
Agreement, and except where the failure to be free from such
liens or restrictions would not materially and adversely
affect the ability of ViroPharma to conduct its business as
presently conducted or proposed to be conducted hereunder.
14.2.8 There is no claim or demand of any person or entity
pertaining to, or any proceeding which is pending or, to the
knowledge of ViroPharma, threatened, that challenges the
rights of ViroPharma in respect of any ViroPharma
Technology, or that claims that any default exists under any
license with respect to ViroPharma Technology to which
ViroPharma is a party, except where such claim, demand or
proceeding would not materially and adversely affect the
ability of ViroPharma to carry out its obligations under
this Agreement.
14.2.9 Other than confidentiality agreements and a letter agreement
dated March 1998 in respect of amounts due SaSy under the
predecessor agreement to the SaSy Agreement , the SaSy
Agreement is the only oral or written contract or agreement
between ViroPharma or any of its Affiliates on the one hand,
and SaSy or any of its Affiliates on the other hand.
ViroPharma is not in default or breach of the SaSy
Agreement, nor has it received any notice of any defaults,
breaches or violation thereunder. To the best of
ViroPharma's knowledge, SaSy is not in default or breach of
the SaSy Agreement.
14.2.10 With respect to each submission to the FDA or other
Regulatory Authority regarding a VP Compound or VP Product,
neither ViroPharma, nor any officer, employee or agent of
ViroPharma has made an untrue statement of a material fact
or fraudulent statement to the FDA or other Regulatory
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Authority, or knowingly failed to disclose a material fact
required to be disclosed to any Regulatory Authority.
14.2.11 Each unit of Finished VP Product delivered to Aventis
pursuant to this Agreement will:
(a) Be manufactured, packaged, tested, stored, and shipped
by ViroPharma in conformance with Laws, including,
without limitation, with all applicable regulations of
the FDA,
(b) Meet specifications for such Finished VP Product
applicable at the time of receipt of such Finished VP
Product by Aventis,
(c) Not be adulterated within the meaning of the FD&C Act,
and not be an article which may not under the
provisions of the FD&C Act be introduced into
interstate commerce, at the time of delivery of such
Finished VP Product to Aventis,
(d) Be free and clear of all liens, security interests and
other encumbrances at the time of receipt of such
Finished VP Product by Aventis;
14.2.12 The documents delivered or made available by ViroPharma to
Aventis or their attorneys or agents in connection the
transactions contemplated hereby do not contain any untrue
statement of a material fact nor, to ViroPharma's knowledge,
omit to state a material fact necessary in order to make the
statements contained herein or therein, in light of the
circumstances under which such statements were made, not
misleading. To ViroPharma's knowledge, there are no facts
that (individually or in the aggregate) materially adversely
affect the transactions contemplated hereby that have not
been made available to Aventis or their attorneys or agents
in connection herewith.
14.2.13 Upon termination of the SaSy Agreement as a result of a
Change in Control, or as a result of a breach of the SaSy
Agreement caused by ViroPharma, ViroPharma hereby covenants
and agrees that, for a period of three years following the
termination of the SaSy Agreement, it shall not enter into
any agreement with SaSy or its Affiliates relating to, and
shall not otherwise develop, promote for sale, or sell a VP
Product or VP Compound in the Territory, in the Field.
14.2.14 ViroPharma shall negotiate with Aventis or any of its
Affiliates in good faith and on an exclusive basis for
ninety (90) days after the Effective Date an agreement
regarding the commercialization of VP Compounds and VP
Product in Canada.
14.3 Aventis' Representations, Warranties and Covenants. Aventis hereby
represents, warrants, covenants and agrees as follows:
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14.3.1 As of the Effective Date hereof, to the best of Aventis'
knowledge, there are no Aventis Patents that contain claims
or could contain claims that would be infringed by using,
selling, offering for sale, making, having made, importing
or exporting any VP Compound or the VP Product formulation
for which NDA 21-245 was submitted to the FDA on July 31,
2001.
14.3.2 As of the date on which Aventis selects the Aventis Product,
to the best of Aventis' knowledge, the manufacture, use or
sale of the Aventis Product does not infringe any patents of
Third Parties.
14.3.3 Aventis shall comply with ViroPharma's reasonable
instructions to ensure compliance with ViroPharma's
obligations under the SaSy Agreement.
14.3.4 Neither Aventis nor any of its Affiliates is a party to or
otherwise bound by any oral or written contract or agreement
that will result in any Person obtaining any interest in, or
that would give to any Person any right to assert any claim
in or with respect to, any of Aventis' rights under this
Agreement.
14.3.5 Upon termination of the SaSy Agreement (a) as a result of a
Change in Control of ViroPharma which occurs after the date
on which (i) Aventis, (ii) any entity which controls (within
the meaning of Section 1.4) Aventis or (iii) any of its
Affiliates that is a sublicensee or assignee of all or
substantially all of Aventis' rights or obligations under
this Agreement, becomes an Affiliate of SaSy or any of
SaSy's Affiliates, or (b) as a result of a breach of the
SaSy Agreement caused by Aventis, Aventis hereby covenants
and agrees that, for a period of three years following the
termination of the SaSy Agreement, neither Aventis nor any
of its Affiliates shall enter into any agreement with SaSy
or its Affiliates relating to, nor shall Aventis or its
Affiliates otherwise develop, make, have made, promote for
sale, or sell a VP Product or VP Compound in the Territory,
in the Field.
14.3.6 Aventis shall make commercially reasonable efforts to retain
ownership or Control of the right to permit ViroPharma to
promote or Detail any Aventis Product.
14.3.7 The Aventis Technology that Aventis owns is owned free and
clear from any material lien or restriction.
14.3.8 There is no claim or demand of any person or entity
pertaining to, or any proceeding which is pending or, to the
knowledge of Aventis, threatened, that challenges the rights
of Aventis in respect of any Aventis Technology, or that
claims that any default exists under any license with
respect to Aventis Technology to which Aventis is a party,
except where such claim,
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demand or proceeding would not materially and adversely
affect the ability of Aventis to carry out its obligations
under this Agreement.
14.3.9 Aventis shall exercise commercially reasonable efforts to
assist in causing Aventis S.A. or such other Affiliate, to
enter into an agreement with ViroPharma within the ninety
(90) day period contemplated by Section 14.2.14 regarding
the commercialization of VP Compounds and VP Product in
Canada.
14.4 Disclaimer. THE WARRANTIES OF EACH PARTY IN THIS ARTICLE 14 ARE IN
LIEU OF ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED WARRANTIES OF NONINFRINGEMENT, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR ANY IMPLIED WARRANTIES OF FITNESS FOR
A PARTICULAR PURPOSE ALL OF WHICH ARE HEREBY SPECIFICALLY EXCLUDED AND
DISCLAIMED.
15. INDEMNIFICATION & INSURANCE.
15.1 Indemnification of Aventis. ViroPharma shall indemnify, defend and
hold harmless Aventis, its Affiliates, and each of its and their
respective employees, officers, directors and agents (the "Aventis
Indemnitees") from and against any and all liability, loss, damages,
expense (including reasonable attorneys' fees and expenses) and costs
that the Aventis Indemnitee may be required to pay one or more Third
Parties not including Aventis Indemnitees, and in the case of Section
15.1.3, half of such costs, resulting from or arising out of:
15.1.1 any misrepresentation or breach of any representation,
warranty, covenant or agreement made by ViroPharma in this
Agreement;
15.1.2 any act or omission of negligence, recklessness or willful
misconduct of ViroPharma or any of its Affiliates;
15.1.3 death or bodily injury resulting from the use of VP Product
that is in fact manufactured in accordance with Laws, and with
the applicable specifications for such VP Product in effect at
the time of manufacture, to the extent not resulting from the
events set forth in Section 15.1.1-2;
15.1.4 the infringement of any Third Party issued patent rights in
existence as of the Effective Date in the Territory based on
(a) the use of VP Compound, including the use of VP Compound
in connection with the sale of a Combination Product, but not
to the extent that the claim of infringement alleges use of
the VP Compound in connection with any other Compound or
product, or (b) the use, Detailing or Distribution of the VP
Product formulation for which NDA 21-245 was submitted to the
FDA on July 31, 2001, in each case, except to the extent that
the activities causing infringement are based on Intellectual
Work Product hereunder; and
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15.1.5 death or bodily injury resulting from the failure of VP
Product to be manufactured in accordance with Laws, and with
the applicable specifications for such VP Product in effect
at the time of manufacture, except to the extent that Aventis
has exercised its rights in respect of manufacturing under
Sections 12.4.3(c) or 13.7.3,
except, in each case, to the extent caused by any act or omission of
negligence, recklessness or willful misconduct of any of the Aventis
Indemnitees.
15.2 Indemnification of ViroPharma. Aventis shall indemnify, defend and
hold harmless ViroPharma, its Affiliates, and each of its and their
respective employees, officers, directors and agents (the "ViroPharma
Indemnitees") from and against any and all liability, loss, damages,
expense (including reasonable attorneys' fees and expenses) and costs
that the ViroPharma Indemnitee may be required to pay one or more
Third Parties not including ViroPharma Indemnitees, and in the case
of Section 15.2.3, half of such costs, resulting from or arising out
of:
15.2.1 any misrepresentation or breach of any representation,
warranty, covenant or agreement made by Aventis in this
Agreement;
15.2.2 any act or omission of negligence, recklessness or willful
misconduct of Aventis or any of its Affiliates;
15.2.3 death or bodily injury resulting from the use of VP Product
that is in fact manufactured in accordance with Laws, and
with the applicable specifications for such VP Product in
effect at the time of manufacture, to the extent not
resulting from the events set forth in Section 15.2.1-2;
15.2.4 the infringement of any Third party issued patent rights in
existence as of the Effective Date in the Territory based on
the use, Detailing or Distribution of the Aventis Product;
and
15.2.5 death or bodily injury resulting from the failure of Aventis
Product to be manufactured in accordance with Laws, and with
the applicable specifications in effect at the time of
manufacture,
15.2.6 with respect to any VP Product manufactured by or on behalf
of Aventis during any period during which Aventis has
exercised its rights in respect of manufacturing under
Sections 12.4.3(c) or 13.7.3, death or bodily injury
resulting from the failure of VP Product to be manufactured
in accordance with Laws, and with the applicable
specifications for such VP Product in effect at the time of
manufacture, except to the extent that
except, in each case, to the extent caused by any act or omission of
negligence, recklessness or willful misconduct of any of the
ViroPharma Indemnitees.
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15.3 Procedure for Indemnification.
15.3.1 Notice. Each Party will notify promptly the other if it
becomes aware of a Third Party claim (a "Third Party Claim")
for which indemnification may be sought hereunder and will
give such information with respect there as the other Party
shall reasonably request. If any proceeding (including any
governmental investigation) is instituted involving any Party
regarding which indemnity may be sought pursuant to this
Article 15, such Party (the "Indemnified Party") shall not
make any admission concerning such claim, but shall promptly
notify the other Party (the "Indemnifying Party") in writing
and the Indemnifying Party and Indemnified Party shall meet
to discuss how to respond to any claims that are the subject
matter of such proceeding. The Indemnifying Party shall not
be obligated to indemnify the Indemnified Party to the extent
any admission made by the Indemnified Party or any failure by
such Party to notify the Indemnifying Party of the claim
materially prejudices the defense of such claim.
15.3.2 Defense of Claim. If the Indemnifying Party elects to defend
a Third Party Claim pursuant to Section 15.3.1, it shall give
notice to the Indemnified Party within fifteen (15) days
after the receipt of the notice from the Indemnified Party of
the potential indemnifiable claim which involves (and
continues to involve) solely monetary damages; provided, that
(a) the Indemnifying Party expressly agrees in such notice
that, as between the Indemnifying Party and the Indemnified
Party, the Indemnifying Party shall be solely obligated to
satisfy and discharge the Third Party Claim, subject to the
terms, conditions and limitations of this Agreement (the
"Litigation Conditions"), and (b) the Indemnifying Party has
the ability, whether though its own resources or insurance to
satisfy the full amount of any adverse monetary judgment that
may result such conditions, the "Litigation Conditions").
Subject to compliance with the Litigation Conditions, the
Indemnifying Party shall retain counsel reasonably
satisfactory to the Indemnified Party to represent the
Indemnified Party and shall pay the fees and expenses of such
counsel related to such proceeding. In any such proceeding,
the Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be
at the expense of the Indemnified Party unless: (a) the
Indemnifying Party and the Indemnified Party shall have
mutually agreed to the retention of such counsel, or (b) the
named parties to any such proceeding (including any impleaded
parties) include both the Indemnifying Party and the
Indemnified Party and representation of both Parties by the
same counsel would be inappropriate due to actual or
potential differing interests between them. All such fees and
expenses shall be reimbursed as they are incurred. If the
Litigation Conditions are not satisfied within thirty (30)
days after notice of the Third Party Claim was provided to
the Indemnifying Party, then the Indemnified Party shall have
the right to control the defense of such Third Party Claim
and the Indemnifying Party shall have the right to
participate in such defense at
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the Indemnifying Party's own expense. The Indemnified Party
shall not settle any claim for which it is seeking
indemnification without the prior consent of the Indemnifying
Party which consent shall not be unreasonably withheld,
delayed or conditioned. The Indemnified Party shall, if
requested by the Indemnifying Party, cooperate in all
reasonable respects in the defense of such claim that is
being managed and controlled by the Indemnifying Party. The
Indemnifying Party shall not, without the written consent of
the Indemnified Party (which consent shall not be
unreasonably withheld), effect any settlement of any pending
or threatened proceeding in respect of which the Indemnified
Party is, or arising out of the same set of facts could have
been, a Party and indemnity could have been sought hereunder
by the Indemnified Party, unless such settlement includes an
unconditional release of the Indemnified Party from all
liability on claims that are the subject matter of such
proceeding.
15.4 Right to Counsel. Notwithstanding anything to the contrary contained
herein, an Indemnified Party shall be entitled to assume the defense
of any Third Party Claim with respect to the Indemnified Party, upon
written notice to the Indemnifying Party pursuant to this Section
15.4, in which case the Indemnifying Party shall be relieved of
liability under Section 15.1 or 15.2, as applicable, solely for such
Third Party Claim.
15.5 Insurance. Each Party shall obtain and maintain, at its sole cost and
expense, during the term of this Agreement, Commercial General
Liability Insurance, including Products Liability Insurance, with
reputable and financially secure insurance carriers to cover its
indemnification obligations under Sections 15.1 or 15.2, as
applicable, with limits of not less than (a) in the case of
ViroPharma, (i) prior to the Launch Date, six million dollars
($6,000,000) per occurrence and in the aggregate and (ii) from and
after the Launch Date, twenty-five million dollars ($25,000,000) per
occurrence and fifty million dollars ($50,000,000) in the aggregate
and (b) in the case of Aventis, twenty-five million dollars
($25,000,000) per occurrence and fifty million dollars ($50,000,000)
in the aggregate. Each Party shall, upon the other Party's reasonable
request from time to time, produce evidence that such insurance
policies are valid, kept up to date and in full force and effect and
are kept in accordance with any local insurance laws or regulations
from time to time in force. A Party's liability to the other is in no
way limited to the extent of the Party's insurance coverage. In the
event of duplicate coverage, the insurance policy of the Party whose
fault causes the need for reimbursement under an insurance policy
shall be primary and the other Party's secondary. Notwithstanding the
foregoing, Aventis may satisfy its obligations under this Section
15.5 through self-insurance to the same extent.
15.6 Limitation. NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE
CONTRARY, IN NO EVENT SHALL EITHER PARTY, ITS DIRECTORS, TRUSTEES,
OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER
PARTY FOR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
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WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY,
NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT
OF THIS AGREEMENT, EXCEPT TO THE EXTENT ACTUALLY PAID BY A PARTY
PURSUANT TO A THIRD PARTY CLAIM IN ACCORDANCE WITH THIS AGREEMENT.
16. ARBITRATION.
16.1 General. If the Parties are unable to resolve any dispute within
twenty (20) days of its being referred for resolution in accordance
with Section 3.10.4, then, in accordance with Section 3.10.5, either
Party may submit the dispute to final and binding confidential
arbitration by filing a demand for arbitration with the other Party.
Except for actions seeking emergency or preliminary injunctive
relief, arbitration shall be the sole and exclusive method for
resolving any dispute, controversy or claim arising out of or
relating to any dispute that is not resolved pursuant to Section
3.10.4. If a Party does move for emergency or preliminary injunctive
relief, that Party shall also begin arbitration in accordance with
this Article 16 so as to permit the prompt resolution of the merits
of the dispute in arbitration after a court resolves the petition for
emergency or temporary relief. Notwithstanding anything else
contained herein to the contrary, the Parties hereto agree that the
dispute resolutions set forth herein shall not apply to (a) the
disputes listed in Section 3.10.6, (b) any claim by a Party that the
other breached any representation, warranty, covenant or agreement
contained herein or (c) any claim for indemnification under Article
15.
16.2 Notice. In no event may a demand for arbitration be filed more than
one year after the date the claim, dispute, controversy, or other
matter in question first arose, or more than ninety (90) days after
the claim, dispute, controversy, or other matter in question was
first referred for resolution pursuant to Section 3.10.4. If a demand
for arbitration is not timely filed, the claim, dispute, controversy,
or other matter in question referenced in the demand shall be deemed
released, waived, barred, and unenforceable for all time, and barred
as if by statute of limitations. Unless otherwise advised in writing,
notice shall be addressed as provided for notices under the
Agreement.
16.3 Procedures for Arbitration. The arbitration shall be conducted in
accordance with the following procedures:
16.3.1 Selection of Arbitrator(s).
(a) The Parties shall attempt to agree on a single
arbitrator within fifteen (15) days of the demand for
arbitration.
(b) If the Parties fail to agree on a single arbitrator
within the fifteen (15) days set forth in Section
16.3.1(a), then within ten (10) further
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days each Party shall select a single arbitrator, who
shall together within ten (10) further days select a
third arbitrator.
The single arbitrator, or the three arbitrators selected in
accordance with this Section 16.3.1 shall preside over the
arbitration. Before any proceedings hereunder, the Parties shall
obtain the agreement of the arbitrator(s) to maintain in
confidence the substance and result of arbitration hereunder, and
any materials disclosed under arbitration hereunder.
16.3.2 Location, Language and Timing. Unless otherwise agreed by the
Parties within fifteen (15) days of the demand for arbitration,
the arbitration shall take place in the English language in
Philadelphia, Pennsylvania, within sixty (60) days of when the
arbitrator(s) are appointed. The arbitration hearing shall be
held on consecutive business days without interruption to the
maximum extent practicable.
16.3.3 Evidence, Exhibits, Depositions and Discovery. Each Party shall
provide the other Party with a list of exhibits, witnesses, and
expert witnesses, if any, at least thirty (30) days before the
arbitration hearing. Either Party may take no more than two (2)
depositions in addition to any witness identified by the other
Party. Unless otherwise agreed to by the Parties, no other
discovery shall be permitted. Charts, graphs, and summaries shall
be used to present voluminous data, provided that the underlying
data is made available to the opposing Party at least thirty (30)
days before the arbitration hearing, and that the preparer of
each chart, graph, or summary is available for explanation and
live cross-examination in person. Discovery disputes shall be
decided by the arbitrator(s). The arbitrator(s) are empowered to
issue subpoenas to compel compliance with requirements for pre-
hearing exchange of witness lists and documents or deposition
discovery, and to enforce the discovery rights and obligations of
the Parties.
16.3.4 Hearing. Unless otherwise agreed to by the Parties, the
arbitration shall include the presentation of evidence and
examination of witnesses at an oral hearing. The hearing shall be
conducted to preserve its privacy and to allow reasonable
procedural due process. Rules of evidence need not be strictly
followed, and the hearing shall be streamlined. Documents shall
be self-authenticating, subject to valid objection by the
opposing Party. Expert reports, witness biographies, depositions,
and affidavits may be utilized, subject to the opposing Party's
right to a live cross-examination of the witness in person. The
arbitrator(s) shall control the scheduling and conduct of the
proceedings.
16.3.5 Request for Relief. On the last day of the arbitration hearing,
each Party shall submit to the arbitrator(s) and to each other a
form of award, stating completely and in detail the relief sought
in the arbitration, which may
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include an award of specific performance or injunctive relief
(each a "Form of Award").
16.4 Arbitrator's Decision.
16.4.1 The arbitrator(s) shall make their decision promptly and, unless
otherwise mutually agreed to by the Parties in writing, no later
than ten (10) days from the date of closing of the hearings or if
oral hearings have been waived, from the date of transmitting the
final statements and proofs to the arbitrator(s). The
arbitrator's discretion to make their decision is limited to
entering, without modification, the Form of Award submitted by
one or the other Party. The award rendered by the arbitrator(s)
shall be final, shall not constitute a basis for collateral
estoppel as to any issue, and shall not be subject to vacation or
modification except as provided under the Federal Arbitration
Act. Judgment may be entered upon the award in a United States
District Court of competent jurisdiction.
16.4.2 Notwithstanding any other provision in this Agreement, if the
Parties submit to arbitration any disputes concerning whether or
not to incur any additional expenses for Additional Indications
in excess of ****** dollars ($******) for the first Additional
Indication, ****** dollars ($******) for the second Additional
Indication (i.e., ****** dollars ($******) for both Additional
Indications), the arbitrator(s) shall base his/her decision as to
whether to spend such additional monies on whether any VP Product
for such Additional Indications is commercially viable for both
Parties, in accordance with each Party's own objective criteria
for commercial viability, and not considering the commercial
viability relative to other of the Party's products. In addition,
in determining commercial viability, the arbitrator shall
consider the probability of obtaining Regulatory Approval for
such Additional Indication, and the anticipated date of obtaining
Regulatory Approval, in light of the VP Exclusivity Period.
Notwithstanding the foregoing in this Section 16.4.2, the
arbitrator may not require the Parties to spend more than ******
dollars ($******) for a single Additional Indication and ******
dollars ($******) for both Additional Indications.
16.5 Costs.
16.5.1 Generally. The Parties shall share equally the arbitrator(s) fees
for the arbitration. Each Party shall be responsible for all
costs and expenses such Party incurs in connection with
arbitration.
16.5.2 Exception for Bad Faith. Notwithstanding the foregoing, if the
arbitrator(s) determine that one of the Parties did not proceed
in good faith with respect to the matters submitted for
arbitration, that Party shall bear fully both Party's expenses of
arbitration.
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16.6 Governing Law of Arbitration. This arbitration provision shall be
governed by, and all rights and obligations specifically enforceable
under and pursuant to, the Federal Arbitration Act. Enforcement shall
be sought only in a United States District Court of competent
jurisdiction.
16.7 Consolidation. No arbitration shall include, by consolidation,
joinder, or in any other manner, any additional person not a Party to
this Agreement, except by written consent of both Parties containing
a specific reference to this Agreement. No counterclaims may be
brought in the arbitration, unless those claims were the subject of
the Parties' dispute resolution procedure set forth in Sections 3.10.
16.8 Confidentiality. The substance and result of arbitration hereunder,
and any materials disclosed in arbitration hereunder, shall be deemed
Confidential Information within the meaning of Section 1.24.
17. MISCELLANEOUS.
17.1 Relationship of the Parties. Each Party shall bear its own costs
incurred in the performance of its obligations hereunder without
charge or expense to the other except as expressly provided in this
Agreement. Neither Party shall have any responsibility for the
hiring, termination or compensation of the other Party's employees or
for any employee benefits of such employee. No employee or
representative of a Party shall have any authority to bind or
obligate the other Party to this Agreement for any sum or in any
manner whatsoever, or to create or impose any contractual or other
liability on the other Party without said Party's approval. Both
Parties are independent contractors under this Agreement. Nothing
herein contained shall be deemed to create an employment, agency,
joint venture or partnership relationship between the Parties hereto
or any of their agents or employees, or any other legal arrangement
that would impose liability upon one Party for the act or failure to
act of the other Party.
17.2 No Solicitation. During the Term of this Agreement and for the two
(2) years thereafter, a Party may not actively solicit an employee of
the other Party to leave the employment of the other Party and accept
employment with the first Party. Active solicitation shall not be
deemed to include general advertisement not directed specifically to
any employee or class of employees of the other Party.
17.3 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as
may be necessary or appropriate in order to carry out the purposes
and intent of the Agreement.
17.4 Force Majeure. The occurrence of an event which materially interferes
with the ability of a Party to perform its obligations or duties
hereunder which is not within the reasonable control of the Party
affected, not due to malfeasance, and which could not with the
exercise of due diligence have been avoided ("Force Majeure"),
including, but not limited to, fire, accident, labor difficulty,
strike, riot, civil commotion, act of God, shall not excuse such
Party from the performance of
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its obligations or duties under this Agreement, but shall merely
suspend such performance during the continuation of Force Majeure.
The Party prevented from performing its obligations or duties because
of Force Majeure shall promptly notify the other Party hereto (the
"Notified Party") of the occurrence and particulars of such Force
Majeure and shall provide the Notified Party, from time to time, with
its best estimate of the duration of such Force Majeure and with
notice of the termination thereof. The Party so affected shall use
reasonable efforts to avoid or remove such causes of nonperformance,
provided, however, that a Party shall not be required to settle any
labor dispute or disturbance. Upon termination of Force Majeure, the
performance of any suspended obligation or duty shall promptly
recommence. Neither Party shall be liable to a Notified Party for any
direct, indirect, consequential, incidental, special, punitive,
exemplary or other damages arising out of or relating to the
suspension or termination of any of its obligations or duties under
this Agreement by reason of the occurrence of Force Majeure.
17.5 Specific Performance. Each of the Parties acknowledges and agrees
that the other Party will be damaged irreparably if any of the
provisions of Sections 2.6, 2.7, 6.2.6, 10.1, 10.2, the first
sentence of Section 10.5, Article 11, and 12 of this Agreement are
not performed in all material respects or otherwise are breached.
Accordingly and notwithstanding anything herein to the contrary, each
of the Parties agrees that the other Party shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of
Sections 2.6, 2.7, 6.2.6, 10.1, 10.2, the first sentence of Section
10.5, Article 11, and 12of this Agreement and to enforce specifically
such provisions of this Agreement and the terms and provisions
thereof in any action instituted in any court or tribunal having
jurisdiction over the Parties and the matter in addition to any other
remedy to which it may be entitled, at law or in equity.
17.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the Commonwealth of Pennsylvania, without
regard to the conflict of law principles of Pennsylvania or any other
jurisdictions. Each Party hereby irrevocably and unconditionally
submits for itself and its property in any legal action or proceeding
relating to or arising out of this Agreement, or any of the
transactions contemplated hereby, to the non-exclusive general
jurisdiction of the Courts of the Commonwealth of Pennsylvania, the
courts of the United States of America for the Eastern District of
Pennsylvania, and appellate courts from any thereof, and agrees that
any such action or proceeding shall be brought only in such courts.
17.7 Assignment. Neither Party may assign or transfer this Agreement or
any righs or obligations hereunder without the prior written consent
of the other Party, except that a Party may make such an assignment
without the other Party's consent to Affiliates, however, and such
assignment to an Affiliate shall not relieve such Party of its
obligations under this Agreement to the extent not performed by such
Affiliate, or to a successor to all or substantially all of the
related business assets of such Party relating to this Agreement,
whether by way of a merger, sale of
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stock, sale of assets or other similar transaction. Notwithstanding
the foregoing, in no event shall either Party have the right or power
to assign this Agreement or any rights or obligations hereunder to
any Person that is not domiciled in the United States.
17.8 Notices. All demands, notices, consents, approvals, reports, requests
and other communications hereunder must be in writing and will be
deemed to have been duly given only if delivered personally or by
facsimile transmission or by mail (first class, postage prepaid) to
the Parties at the following addresses or facsimile numbers:
If to ViroPharma: ViroPharma Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Vice President, Commercial Operations
with a copy to: Vice President and General Counsel
If to Aventis: Aventis Pharmaceuticals Inc.
▇▇▇▇▇ ▇▇▇-▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇.
Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇
Attention: Vice President, Legal Department
or to such other address as the addressee shall have last furnished
in writing to the addressor in accord with this provision.
17.9 Severability.
17.9.1 If any provision of this Agreement is held to be illegal,
invalid or unenforceable under any applicable present or
future Law, and if the rights or obligations of either Party
hereto under this Agreement will not be materially and
adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced
as if such illegal, invalid or unenforceable provision had
never comprised a part hereof, (c) the remaining provisions
of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom, and (d) in lieu of
such illegal, invalid or unenforceable provision, there will
be added automatically as a part of this Agreement, a legal,
valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be
possible.
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17.9.2 If any right or obligation of either Party under this
Agreement contravenes any provision of the SaSy Agreement (a
"Conflicting Obligation"), the Parties shall consult and
agree in good faith to amend this Agreement in a
commercially reasonable manner so that such right or
obligation no longer contravenes the SaSy Agreement. Neither
Party shall seek damages resulting from the breach of a
Conflicting Obligation other than, (a) damages which were
incurred before the date on which one Party has given notice
to the other Party that such Conflicting Obligation
conflicts with the SaSy Agreement, or (b) thereafter,
damages which such other Party could not reasonably have
avoided.
17.10 Headings. The descriptive headings of this Agreement are for
convenience only, and shall be of no force or effect in construing
or interpreting any of the provisions of this Agreement.
17.11 Waiver and Remedies. Any term or condition of this Agreement may be
waived at any time by the Party that is entitled to the benefit
thereof, but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the Party or
Parties waiving such term or condition. No waiver by any Party of
any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any future
occasion. All remedies, either under this Agreement or by law or
otherwise afforded, will be cumulative and not alternative.
17.12 Entire Agreement. This Agreement and the Stock Purchase Agreement
between the Parties dated the date hereof constitute the entire
agreement between the Parties hereto with respect to the within
subject matter and supersede all previous agreements, whether
written or oral, except that the Standstill Agreement shall remain
in full force and effect, except as expressly provided in Section
12.2.
17.13 Amendment. This Agreement may be altered, amended or changed only by
a writing making specific reference to this Agreement and signed by
duly authorized representatives of ViroPharma and Aventis.
17.14 No Implied License. Nothing in this Agreement shall be deemed to
constitute the grant of any license or other right in either Party
to or in respect of any product, patent, trademark, Confidential
Information, trade secret or other data or any other intellectual
property of the other Party except as expressly set forth herein.
17.15 Third Party Beneficiaries. None of the provisions of this Agreement
shall be for the benefit of or enforceable by any Third Party,
except for the Aventis Indemnitees and the ViroPharma Indemnitees to
the extent expressly provided in Article 15, including, without
limitation, any creditor of either Party hereto. No such Third Party
shall obtain any right under any provision of this Agreement or
________________________________________________________________________________
Page 125
shall by reasons of any such provision make any claim in respect of
any debt, liability or obligation (or otherwise) against either
Party hereto.
17.16 Wording. Unless the context of this Agreement otherwise requires,
(a) words of either gender include each other gender; (b) words
using the singular or plural number also include the plural or
singular number, respectively; (c) the terms "hereof," "herein,"
"hereby," and derivative or similar words refer to this entire
Agreement; and (d) the terms "Article" and "Section" refer to the
specified Article and Section of this Agreement. Whenever this
Agreement refers to a number of days, unless otherwise specified,
such number shall refer to calendar days.
17.17 Representation by Legal Counsel. Each Party hereto represents that
it has been represented by legal counsel in connection with this
Agreement and acknowledges that it has participated in the drafting
hereof. In interpreting and applying the terms and provisions of
this Agreement, the Parties agree that no presumption shall exist or
be implied against the Party that drafted such terms and provisions.
17.18 Debarment. Each Party agrees that it will not use, in any capacity,
in connection with any of its obligations to be performed under this
Agreement any individual who has been debarred under the FD&C Act or
the Generic Drug Enforcement Act.
17.19 Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an
original and all of which together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, ViroPharma and Aventis, by their duly authorized officers,
have executed this Agreement as of the date first written above.
VIROPHARMA INCORPORATED AVENTIS PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ Belle
------------------- ---------------
Michel de ▇▇▇▇▇ ▇▇▇▇▇ Belle
President and Chief Executive Officer President and Chief Executive
Officer
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Page 126
Exhibit 1.9
Aventis Logo
________________________________________________________________________________
Page 1
Exhibit 1.12
Aventis Trade Policy
AVENTIS PHARMACEUTICALS
TRADE POLICIES
Policy Effective July 1, 2000
________________________________________________________________________________
Page 2
TRADE POLICIES - AVENTIS
________________________________________________________________________________
Page 3
Trade Sales Policy
We will sell direct to franchised warehousing customers who meet the provisions
listed within our Franchised Trade Agreement, including the key criteria listed
below:
. Have the capability to place orders electronically
. Meet minimum order requirements
. Meet credit requirements
We will also sell to those tax-supported entities who are precluded by
law/policy/procedure from purchasing from any source other than the original
manufacturer (i.e., city/county/state hospitals, prisons, universities, health
centers, etc.) and hospitals with specific purchasing needs.
For products that have special distribution requirements, Aventis maintains the
right to establish separate criteria for direct status.
Terms
-----
2% 30 days, date of invoice
NET 31 days, date of invoice
EFT Terms:
2% 34 days, date of invoice
NET 35 days, date of invoice
Pricing
-------
All direct prices will be at NET LIST PRICE, as listed in our current price
list. We will also include our MANUFACTURER'S SUGGESTED PRICE in our sales
catalog.
Minimum Order Requirements
--------------------------
The minimum order acceptable for shipment is $10,000 NET. Products must be
ordered in unit packs as listed on our current price list. All orders not
meeting the dollar minimum and/or not meeting the unit pack multiples will not
be processed. The only exceptions to this policy will be initial orders for new
product introductions and products with special distribution needs (i.e.,
refrigerated products, etc.).
Drop Shipment Policy
--------------------
Orders that meet minimum order requirements of $10,000 NET can be drop-shipped
to approved accounts.
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Return Goods Policy and Procedures
----------------------------------
Aventis will provide credit for all product returns that meet the following
criteria:
Returns Criteria
Returnable Products:
--------------------
. Product returned within 6 months of expiration
. Product returned that is no more than 12 months past expiration
. Product returned in the original container
. Product returns valued at more than $25,000 require preauthorization
. Partials except for liquids, lotions, ampules, syringes or gels
Damaged or shortage claims must be filed within 15 days of customer's receipts
of product.
Non- returnable Products:
------------------------
. Products returned more than 1 full year past expiration date
. Products damaged by fire and/or water
. Repackaged products
. Professional samples
. Distressed merchandise obtained through a bankruptcy or sacrifice sale, a
going-out-of-business sale, or other merchandise considered under the
classification of "distressed merchandise"
. Merchandise obtained illegally or via diverted means; this includes products
being imported from countries outside the United States
. Partial liquids, lotions, ampules, syringes or gels
Controlled Substances
---------------------
Controlled substances should be packaged separately from other returns.
Miscellaneous
-------------
Customers should return product to the Aventis designated third-party return
goods processor. Call the Aventis Customer Service Department with any
questions.
. Freight should be prepaid by customer
. Reimbursement
. Direct customers will be reimbursed via credit memo
. Direct customers will receive credit through their wholesaler
. Non-direct accounts that return product directly to the Aventis designated
third-party return goods processor will be reimbursed via check
. All returns will be credited at current NET LIST PRICE unless purchased at
a contract price, with credit being given at the contract price
. Qualified partials will be credited for the exact count returned
________________________________________________________________________________
Page 2
Aventis reserves the right, prior to credit or refund, to verify the original
purchase documents as proof that the product being returned has been through the
normal distribution channels of Aventis and to determine purchase price. Aventis
also reserves the right to destroy ineligible items with no credits.
Freight Charges
---------------
Postage or shipping charges will be prepaid and FOB destination on all orders
where routing is done by Aventis. If special routing is requested by the direct
account, the entire freight and handling charge will be billed to the customer.
All drop shipments will be prepaid.
Natural Disaster Policy -
-------------------------
Retail Outlets
--------------
Aventis will support a natural disaster policy for retail outlets. The criteria
is as follows:
. Aventis will expedite a disaster protection pack in the event of natural
disaster (fire, flood, hurricane, tornado, etc.)
. Aventis will replace the loss on a unit-per-unit basis
. Documentation of disaster must be obtained prior to shipment (newspaper
clipping, fire inspection report or similar documentation)
. Aventis will only cover noninsured products
This policy does not apply to warehouses.
New Warehouse Dating Policy
---------------------------
Aventis will provide our direct customers 30 additional days' dating (maximum 2%
60days, date of invoice, NET 61) on their initial order when opening a new
distribution facility.
. Policy does not provide for expansion or consolidation of existing
facilities
. Policy does not provide for new business shipped through existing
facilities
. Authorization must be obtained through Aventis
Exception
---------
Aventis reserves the right to make exceptions to this policy due to business
needs.
________________________________________________________________________________
Page 3
Exhibit 1.61
Sample Calculation of Net Sales of a Combination Product
Background:
----------
Jurgenex(TM) is a combination product containing 20 mg of Compound V (a VP
Compound) and 25 mg of Compound A (a non-VP Compound). In Calendar Year 0, Net
Sales of Jurgenex were $100,000,000.
Compound V is sold in three different formulations which were sold at the
following volumes and prices in Calendar Year 0:
Mg Compound V Number of Retail
Formulation per Retail Unit Units Sold Price per Retail Unit
----------- --------------- ---------------- ---------------------
Formulation A 100 mg 50,000 $125
100 mg 55,000 $115
100 mg 70,000 $112
Formulation B 80 mg 45,000 $110
80 mg 48,000 $108
Formulation C 65 mg 10,000 $180
Compound A is sold in a single formulation containing 150 mg per retail unit,
which sold for $60 per retail unit in a volume of 100,000 retail units in
Calendar Year 0.
For purposes of this example, the price per retail unit will be assumed to be
the gross invoiced sales price to Third Parties other than contractors of a
Party, less the deductions described in Sections 1.61.1-6.
Calculation:
-----------
Compound V: The weighted average price per mg of Compound V in product
containing Compound V only is:
((($125/100mg) x 50,000 units) + (($115/100mg) x 55,000 units) +
(($112/100mg) x 70,000 units) + (($110/80mg) x 45,000 units) + (($108/80mg)
x 48,000 units) + (($180/65mg) x 10,000 units)) / (50,000 units + 55,000
units + 70,000 units + 45,000 units + 48,000 units + 10,000 units) =
$1.29/mg.
Compound A: The weighted (and unweighted) average price per mg of Compound A in
product containing Compound A only is: ((($60/150mg) x 100,000 units)) / 100,000
units = $0.40/mg.
Net Sales of Compound V in Jurgenex(TM): The Net Sales of Compound V in
Jurgenex(TM) is the Net Sales of Jurgenex(TM) multiplied by AX/(AX +BY), where A
is the weighted average price per
________________________________________________________________________________
Page 1
mg of Compound V, X is the number of mg of Compound V in Jurgenex(TM), B is the
weighted average price per mg of Compound A, and Y is the number of mg of
Compound a in Jurgenex(TM), or:
$100,000,000 x ($1.29/mg x 20mg) / (($1.29/mg x 20mg) + ($0.40/mg x 25mg))
= $72,067,039.11.
________________________________________________________________________________
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Exhibit 1.81
SaSy Patents
PATENT FILING GRANT
COUNTRY (Application) DATE DATE STATUS
---------------------------------------------------------------------------
U.S. 5,175,177 07/17/91 12/29/92 in force
U.S. 5,643,929 05/19/95 07/01/97 in force
U.S. 5,175,178 06/04/90 12/29/92 in force
U.S. 5,567,719 06/07/95 10/22/96 in force
U.S. 5,650,419 08/30/96 07/22/97 in force
U.S. 5,821,257 03/31/98 10/13/98 in force
U.S. 4,857,539 06/16/87 08/15/89 in force
U.S. 5,110,821 06/07/90 05/05/92 in force
U.S. 5,514,679 05/13/94 05/07/96 in force
U.S. 5,464,848* 10/01/93 11/07/95 in force
U.S. 5,453,433* 05/13/94 09/26/95 in force
* Patents for which SaSy has primary responsibility.
________________________________________________________________________________
Page 1
Exhibit 1.94
Trademarks
▇▇▇▇ Country Trademark No. Filing Date Registration Status
(Application No.) Date
------------------------------------------------------------------------------------------------------
NUVIX U.S.A. (75/597,640) 12/02/98 N/A Pending
----------------------------------------------------------------------------------------------------
PICOVIR U.S.A. (75/597,699) 12/02/98 N/A Pending
----------------------------------------------------------------------------------------------------
VIRNAX U.S.A. (75/597,698) 12/02/98 N/A Pending
----------------------------------------------------------------------------------------------------
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Page 1
Exhibit 1.99
ViroPharma Logo
[LOGO]
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Page 1
Exhibit 1.100
ViroPharma Patents
PATENT FILING GRANT
COUNTRY APPLICATION DATE DATE STATUS
--------------------------------------------------------------------
****** ****** ****** ****** ******
****** ****** ****** ****** ******
****** ****** ****** ****** ******
--------------------------------------------------------------------
******
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Page 1
Exhibit 4.4.1
Initial Development Plan and Budget
Picovir(TM)
Development Plan
Exhibit 6.4.7(a)
Initial Product Suppliers
1. API Manufacturers
F.I.S. (Fabbrica Italiano Sintetici)
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇
PCAS (Produits Chemiques Auxilliares et de Synthese)
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
2. Micronizer
Micron Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
3. Finished Product Manufacturer
Patheon, Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
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Page 1
Exhibit 8.2
STOCK PURCHASE AGREEMENT--Form of Agreement to be Signed
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of September 9,
2001, by and between ViroPharma Incorporated ("ViroPharma"), a Delaware
corporation with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Aventis Pharma Inc., a Canadian corporation with its
principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇ ("Aventis").
RECITALS
--------
WHEREAS, ViroPharma and an Affiliate of Aventis have entered into that
certain Copromotion and Codevelopment Agreement dated September 9, 2001 (the
"Copromotion and Codevelopment Agreement"); and
WHEREAS, in connection with the execution of the Copromotion and
Codevelopment Agreement, ViroPharma desires to sell to Aventis and Aventis
desires to purchase from ViroPharma shares of common stock of ViroPharma on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and agreements contained herein, the Parties hereto, intending to be
legally bound, do hereby agree as follows:
1. Definitions. The capitalized terms used herein shall have the meanings
-----------
ascribed to them below, provided that capitalized terms used herein that are not
defined herein shall have the meanings ascribed to them in the Copromotion and
Codevelopment Agreement:
1.1 "Affiliate" means any person or entity that directly or indirectly
---------
controls or is controlled by or is under common control with ViroPharma or
Aventis, as the case may be, but only for so long as said control shall
continue. As used herein the term "control" means the direct or indirect
ownership of over fifty percent (50%) of the outstanding voting securities of an
entity, or the right to receive over fifty percent (50%) of the profits or
earnings of an entity (or, in either case, such lesser percentage which is the
maximum allowed to be owned by a foreign corporation in a particular
jurisdiction). Such other relationship as in fact gives such individual or
entity the power or ability to control the management, business and affairs of
an entity shall also be deemed to constitute control.
1.2 "Closing" has the meaning ascribed to it in Section 3.1 hereof.
-------
1.3 "Closing Date" means the day on which the transaction that is the
------------
subject of such Closing is consummated.
1.4 "Common Stock" means the common stock of ViroPharma, par value $0.002
------------
per share.
________________________________________________________________________________
Page 1
1.5 "Deemed Market Price" has the meaning ascribed to it in Section 2
-------------------
hereof.
1.6 "Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
together with the rules and regulations promulgated thereunder.
1.7 "Excluded Registration Statements" means (a) Registration Statements
--------------------------------
on Form S-8 (or any successor or similar form) relating to employee benefit
plans, (b) Registration Statements on Form S-4 (or any successor or similar
form) relating to corporate reorganizations or other transactions under Rule 145
of the Securities Act, or (c) Registration Statements covering shares of
ViroPharma's capital stock issued pursuant to that certain Investment Agreement
(the "Perseus Shares") dated May 5, 1999 between ViroPharma and PSV, LP
(previously known as Perseus-▇▇▇▇▇ BioPharmaceutical Fund, LP) (the "Perseus
Agreement"), and any Common Stock issued upon conversion of the Perseus Shares
or upon exercise of warrants issued pursuant to the Perseus Agreement.
1.8 "GAAP" means generally accepted accounting principles in the United
----
States.
1.9 "Holder" means each person owning of record Registrable Securities
------
that have not been sold to the public.
1.10 "Intellectual Property" means trademarks, trade names, trade dress,
---------------------
service marks, copyrights, and similar rights (including registrations and
applications to register or renew the registration of any of the foregoing),
patents and patent applications, trade secrets, and any other similar
intellectual property rights.
1.11 "Intellectual Property License" means any license, permit,
-----------------------------
authorization, approval, contract or consent granted, issued by or with any
Person relating to the use of Intellectual Property.
1.12 "Knowledge" means the knowledge of such party, assuming that such
---------
party engaged in reasonable inquiry or investigation with respect to the
relative subject matter.
1.13 "Material Adverse Effect" on or with respect to an entity (or group
-----------------------
of entities taken as a whole) means any state of facts, event, change or effect
that has had, or that might be reasonably expected to have, a material adverse
effect on the business, properties, results of operations or financial condition
of such entity (or of such group of entities taken as a whole).
1.14 "Nasdaq" means the Nasdaq Stock Market, Inc.
------
1.15 "Party" means a party to this Agreement.
-----
1.16 "Purchase Price" has the meaning ascribed to it in Section 2.1.
--------------
1.17 "Person" means any individual, firm, corporation, partnership,
------
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company,
________________________________________________________________________________
Page 2
government (or an agency or political subdivision thereof) or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
1.18 "Register," "Registered," and "Registration" refer to a registration
-------- ---------- ------------
effected by preparing and filing a Registration Statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
Registration Statement or document by the SEC.
1.19 "Registrable Securities" means (a) the Shares; and (b) any shares of
----------------------
Common Stock of ViroPharma or other securities issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, the Shares by way of stock dividend, stock split or in
connection with a combination of shares, recapitalization or other
reorganization or otherwise. Notwithstanding the foregoing, as to any particular
Shares or other securities described above, once issued they shall cease to be
Registrable Securities when (x) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (y) they shall have been distributed pursuant to Rule 144 (or any
successor provision) under the Securities Act, or (z) they shall have been
otherwise transferred in a private transaction in which the rights under this
Section 7 hereof have not been assigned.
1.20 "Registration Expenses" means all expenses incurred by ViroPharma in
---------------------
complying with Section 7.1 hereof, including, without limitation, registration
and filing fees, printing and reproduction expenses, fees and disbursement of
counsel for ViroPharma, blue sky fees and expenses, messenger and delivery
expenses, the expenses of any special audits or "comfort letters" incident to or
required by any such registration and any fees and disbursements of underwriters
customarily paid by issuers or seller of securities, but excluding Selling
Expenses.
1.21 "Registration Statement" means a Registration Statement filed
----------------------
pursuant to the Securities Act.
1.22 "Rights Agreement" means that certain Rights Agreement dated
----------------
September 10, 1998 between ViroPharma and StockTrans, Inc.
1.23 "SEC Documents" means ViroPharma's Form S-3 filed with the SEC on
-------------
July 3, 2001, its Annual Report on Form 10-K for the year ended December 31,
2000, its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2001
and March 31, 2001, and its Proxy Statement for its Annual Meeting of
Stockholders held on June 11, 2001, each as filed with the SEC, but shall not
include any portion of any document which is not deemed to be filed under
applicable SEC rules and regulations.
1.24 "SEC" means the U.S. Securities and Exchange Commission.
---
1.25 "Securities Act" means the Securities Act of 1933, as amended,
--------------
together with the rules and regulations promulgated thereunder.
________________________________________________________________________________
Page 3
1.26 "Selling Expenses" shall mean all underwriting discounts and selling
----------------
commissions applicable to the sale, and all fees and expenses of counsel
exclusively for Aventis, if any.
1.27 "Shares" means the shares of Common Stock to be acquired by Aventis
------
hereunder.
1.28 "Transaction Documents" means this Agreement, the Copromotion and
---------------------
Codevelopment Agreement, and any other agreement or instrument executed by
ViroPharma in connection with the foregoing.
1.29 "Triggering Event" means Regulatory Approval of an NDA in the United
----------------
States for a VP Product for the First Indication.
1.30 "Voting Stock" means securities of any class or series of a
------------
corporation or association the holders of which are ordinarily, in the absence
of contingencies, entitled to vote generally in matters put before the
shareholders or members of such corporation or association, or securities
convertible or exchangeable into or exercisable for any such securities.
2. Purchase and Sale.
-----------------
2.1 Subject to Section 2.2 below, at the Closing, ViroPharma will sell to
Aventis and Aventis will purchase from ViroPharma, for the aggregate
consideration of $20,000,000, as may be adjusted in Section 2.2 below (the
"Purchase Price"), a number of shares of Common Stock equal to the quotient of
$20,000,000 divided by the Deemed Market Price. For the purposes of this Section
2, the "Deemed Market Price" shall be equal to the average of the closing sales
prices of ViroPharma's Common Stock, as reported by Nasdaq, for those days on
which ViroPharma's Common Stock was traded during the twenty (20) trading days
ending on the trading day immediately preceding the date of the Triggering
Event; provided, however, that if ViroPharma takes the steps contemplated under
Section 9.1(c)(iii), then the Deemed Market Price shall be equal to the average
of the closing sales prices of ViroPharma's Common Stock as reported by Nasdaq
for those days on which ViroPharma's Common Stock was traded during the twenty
(20) trading days immediately following the date that ViroPharma again becomes
listed for trading as contemplated by Section 9.1(c)(iii).
2.2 (a) Notwithstanding the foregoing, the number of shares purchasable
hereunder shall not be in excess of nineteen and nine tenths percent (19.9%) of
the number of shares of Common Stock issued and outstanding on the date hereof,
which number shall be subject to appropriate and equitable adjustment for any
stock split, stock dividend or reclassification of the Common Stock or similar
event (the "Maximum Number of Shares"). Only shares of Common Stock acquired
pursuant to this Agreement will be included in determining whether the
limitation contained herein would be exceeded for purposes of this Section.
(b) In the event the number of shares to be acquired pursuant to
Section 2.1 would exceed the Maximum Number of Shares, then notwithstanding
anything to the contrary in
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Page 4
Section 2.1, at the Closing ViroPharma will sell to Aventis and Aventis will
purchase from ViroPharma the Maximum Number of Shares for an aggregate
consideration equal to the product of the Maximum Number of Shares times the
Deemed Market Price.
3. Closing.
-------
3.1 Closing. The completion of the sale and purchase of the Shares (the
-------
"Closing") shall be held within five (5) business days after the satisfaction of
the closing conditions set forth in Article 6, or on such other date as the
parties shall mutually agree.
3.2 Delivery. At the Closing, subject to the terms and conditions hereof,
--------
Aventis shall deliver to ViroPharma the Purchase Price by wire transfer to an
account designated in writing by ViroPharma no less than two (2) business days
prior to the Closing, and ViroPharma will deliver to Aventis a stock
certificate, in the name of Aventis, representing the Shares purchased at the
Closing, dated as of the Closing Date, against payment of such Purchase Price.
3.3 Location. The Closing shall occur at the offices ViroPharma, unless
--------
otherwise agreed to by the Parties.
4. Representations and Warranties of ViroPharma. ViroPharma hereby represents
--------------------------------------------
and warrants to Aventis as of the date hereof and as of the Closing Date (except
as set forth below), as follows:
4.1 Capitalization. As of August 31, 2001, the authorized capital stock
---------------
of ViroPharma consisted of (a) 100,000,000 shares of Common Stock, of which (i)
18,699,695 shares were issued and outstanding, (ii) up to 690,000 shares have
been reserved for issuance upon exercise of outstanding common stock warrants,
(iii) 3,750,000 shares have been reserved for issuance under ViroPharma's Stock
Option and Restricted Share Plan, (iv) 300,000 shares have been reserved for
issuance under ViroPharma's Employee Stock Purchase Plan, and (v) 1,649,107
shares have been reserved for issuance upon exercise of outstanding six percent
(6%) convertible subordinated notes; and (b) 5,000,000 shares of preferred
stock, none of which is outstanding and 200,000 shares of which have been
designated the Series A Junior Participating Preferred Shares, par vale $.01 per
share, and have been reserved for issuance pursuant to the Rights Agreement. All
issued and outstanding shares of ViroPharma's capital stock have been duly
authorized and validly issued, and are fully paid and nonassessable. As of
August 31, 2001, except as referred to in Exhibit 4.1 attached hereto, there are
no preemptive or similar rights on the part of any holder of any class or
securities of ViroPharma. As of August 31, 2001, except as set forth in the SEC
Documents, as set forth on Exhibit 4.1 attached hereto or as described or
referred to above, there are no securities convertible into or exchangeable for,
or options, warrants, calls subscriptions, rights, contracts or understandings
of any kind to which ViroPharma is a party or by which it is bound obligating
ViroPharma to issue, deliver or sell, or cause to be issued, delivered or sold
additional shares of its capital stock. As of August 31, 2001, except for the
repurchase of shares owned by employees upon termination of employment, there
are no outstanding agreement of ViroPharma to repurchase, redeem or otherwise
acquire any shares of its capital stock. As of August 31, 2001, ViroPharma does
not have any subsidiaries or any equity interest with a value of $250,000 or
more in any corporation or entity.
________________________________________________________________________________
Page 5
4.2 Litigation. There is no action, suit, proceeding nor, to its
----------
Knowledge, any investigation, pending or currently threatened against ViroPharma
that questions the validity of this Agreement or the issuance of the Common
Stock contemplated hereby, nor to its Knowledge, is there any basis therefor. As
of August 31, 2001, there is no other action, suit, or proceeding pending or, to
the Knowledge of ViroPharma, currently threatened against ViroPharma that might,
individually or in the aggregate, result in Material Adverse Effect. As of
August 31, 2001, ViroPharma is not subject to any consents, orders, decrees or
judgments of any governmental entity that, individually or in the aggregate, may
have a Material Adverse Effect.
4.3 Organization and Good Standing. ViroPharma is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to carry on its
business as now conducted. ViroPharma is duly qualified and is in good standing
as a foreign corporation in each jurisdiction in which the properties owned,
leased or operated, or the business conducted, by it requires such qualification
except where the failure to be so qualified or in good standing, individually or
in the aggregate, would not have a Material Adverse Effect.
4.4 Authorization. All corporate action on the part of ViroPharma, its
-------------
officers, directors and stockholders necessary for the authorization, execution
and delivery of the Transaction Documents have been taken. ViroPharma has the
requisite corporate power to enter into the Transaction Documents and to carry
out and perform its obligations thereunder. The Transaction Documents have been
duly authorized, executed and delivered by ViroPharma and, upon due execution
and delivery by Aventis, each Transaction Document will be a valid and binding
agreement of ViroPharma, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by equitable principles.
4.5 No Conflict With Other Instruments. The execution, delivery and
----------------------------------
performance of the Transaction Documents will not result in any violation of, be
in conflict with, cause any acceleration or any increased payments under, or
constitute a default under, with or without the passage of time or the giving of
notice: (a) any provision of ViroPharma's Amended and Restated Certificate of
Incorporation or Bylaws as in effect on the date hereof or at the Closing; (b)
any provision of any judgment, decree or order to which ViroPharma is a party or
by which it is bound, or (c) any note, mortgage, material contract or agreement,
or any license, waiver, exemption, order or permit.
4.6 Disclosure Documents.
--------------------
(a) ViroPharma's SEC Documents: (i) complied in all material
respects with the applicable requirements of the Securities Act or Exchange Act,
as applicable, as such requirements were in effect on the date that such SEC
Document was filed with the SEC, and (ii) when filed with the SEC, did not
contain any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
________________________________________________________________________________
Page 6
(b) The audited financial statements of ViroPharma included in
ViroPharma's SEC Documents comply in all material respects with the published
rules and regulations of the SEC with respect thereto, and such audited
financial statements (i) were prepared from the books and records of ViroPharma,
(ii) were prepared in accordance with GAAP applied on a consistent basis (except
as may be indicated therein or in the notes or schedules thereto) and (iii)
present fairly the financial position of ViroPharma as of the dates thereof and
the results of operations and cash flows for the periods then ended. The
unaudited financial statements included in the SEC Documents comply in all
material respects with the published rules and regulations of the SEC with
respect thereto, and such unaudited financial statements (i) were prepared from
the books and records of ViroPharma, (ii) were prepared in accordance with GAAP,
except as otherwise permitted under the Exchange Act and the rules and
regulations thereunder, on a consistent basis (except as may be indicated
therein or in the notes or schedules thereto) and (iii) present fairly the
financial position of ViroPharma as of the dates thereof and the results of
operations and cash flows (or changes in financial condition) for the periods
then ended, subject to normal year-end adjustments and any other adjustments
described therein or in the notes or schedules thereto
4.7 Absence of Certain Events and Changes. During the period commencing
-------------------------------------
on December 31, 2000 and continuing through August 31, 2001, ViroPharma has
conducted its business in the ordinary course consistent with past practice and
there has not been any event, change or development which, individually or in
the aggregate, would have a Material Adverse Effect, taken as a whole.
4.8 Compliance with Applicable Law. As of August 31, 2001, ViroPharma is
------------------------------
in compliance in all material respects with all material statutes, laws,
regulations, rules, judgments, orders and decrees of all governmental entities
applicable to it that relate to its business, and ViroPharma has not received
any notice alleging noncompliance except, with reference to all the foregoing,
where the failure to be in compliance would not, individually or in the
aggregate, have a Material Adverse Effect taken as a whole.
4.9 Valid Issuance Of Shares. When issued, sold and delivered in
------------------------
accordance with the terms hereof for the consideration expressed herein, the
Shares will be duly and validly authorized and issued, fully paid and
nonassessable and, based in part upon the representations of Aventis in Section
6.3 of this Agreement, will be issued in compliance with all applicable federal
and state securities laws.
4.10 Governmental Consents. No consent, approval, order or authorization
---------------------
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority on the part of ViroPharma is
required in connection with the consummation of the transactions contemplated by
the Transaction Documents, except for notices required or permitted to be filed
with certain state and federal securities commissions, which notices will be
filed on a timely basis.
4.11 No Brokers. Other than Lazard Freres & Co. LLC which will be the
----------
sole obligation of ViroPharma, no broker, finder or investment banker is
entitled to any brokerage,
________________________________________________________________________________
Page 7
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based on arrangements made by ViroPharma.
4.12 Delaware Law. To the extent that Aventis shall be deemed to be an
--------------
"interested stockholder" as defined in Section 203 of the Delaware General
Corporation Law (the "DGCL") solely as a result of the transactions contemplated
by this Agreement, ViroPharma has taken all action necessary to ensure that the
provisions of Section 203 of the DGCL will not be applicable to Aventis or its
Affiliates.
4.13 Intellectual Property. As of August 31, 2001, the Intellectual
---------------------
Property that is owned by ViroPharma is owned free from any material liens or
restrictions (except as otherwise set forth in an Intellectual Property License
in respect of such Intellectual Property), and all material Intellectual
Property Licenses are in full force and effect in accordance with their terms,
and are free and clear of any material liens or restrictions, except (a) where
the failure to be free from such liens or restrictions would not have a Material
Adverse Effect, taken as a whole, or (b) as set forth in such Intellectual
Property License. As of August 31, 2001, to the Knowledge of ViroPharma, the
conduct of the business of ViroPharma, as now conducted and proposed to be
conducted under the Copromotion and Codevelopment Agreement does not infringe or
conflict with the rights of any third party in respect of any Intellectual
Property, and none of the Company Intellectual Property is being infringed by
any third party. As of August 31, 2001, there is no claim or demand of any
person or entity pertaining to, or any proceeding which is pending or, to the
Knowledge of ViroPharma, threatened, that challenges the rights of ViroPharma in
respect of any Company Intellectual Property, or that claims that any default
exists under any Intellectual Property License, except where such claim, demand
or proceeding would not materially affect the ability of ViroPharma to conduct
its business as presently conducted or proposed to be conducted under the
Copromotion and Codevelopment Agreement. For purposes of this Agreement,
"Company Intellectual Property" means the Intellectual Property that is owned by
ViroPharma and the Intellectual Property subject to an Intellectual Property
License pursuant to which its use by ViroPharma is permitted by any third party.
5. Representations And Warranties Of Aventis. Aventis hereby represents and
-----------------------------------------
warrants to ViroPharma as of the date hereof and as of the Closing Date as
follows:
5.1 Legal Power. Aventis has the requisite corporate power to enter into
-----------
the Transaction Documents, to carry out and perform its obligations under the
terms of the Transaction Documents.
5.2 Due Execution. The Transaction Documents have been duly authorized,
-------------
executed and delivered by Aventis, and, upon due execution and delivery by
ViroPharma, each of the Transaction Documents will be a valid and binding
agreement of Aventis, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by equitable principles.
5.3 Ownership. As of the date hereof, Aventis and its Affiliates do not
---------
currently own greater than one percent (1%) of the outstanding Voting Stock of
ViroPharma.
________________________________________________________________________________
Page 8
5.4 Investment Representations. In connection with the offer, purchase
--------------------------
and sale of the Shares, Aventis makes the following representations:
(a) Aventis is acquiring the Shares for its own account, not as
nominee or agent, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act.
(b) Aventis understands that:
(i) the Shares have not been registered under the Securities
Act by reason of a specific exemption therefrom, that such securities may be
required to be held by it indefinitely under applicable securities laws, and
that Aventis must, therefore, bear the economic risk of such investment
indefinitely, unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration;
(ii) each certificate representing such Shares will be
endorsed with the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY
TO THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED."; and
(iii) ViroPharma will instruct its transfer agent not to
register the transfer of the Shares (or any portion thereof) unless the
conditions specified in the foregoing legends are satisfied.
(c) Aventis has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of the
investment in the Shares to be purchased hereunder.
(d) Aventis is an "accredited investor" as such term is defined in
Rule 501(a) of the rules and regulations promulgated under the Securities Act.
6. Conditions To Closing.
---------------------
6.1 Conditions to Obligations of Aventis at the Closing. Aventis's
---------------------------------------------------
obligation to purchase the Shares at the Closing is subject to the fulfillment
to its reasonable satisfaction, on or prior to the Closing, of all of the
following conditions, any of which may be waived by Aventis:
________________________________________________________________________________
Page 9
(a) Representations and Warranties True. The representations and
-----------------------------------
warranties made by ViroPharma in Section 4 hereof shall be true and correct in
all material respects on the date of this Agreement and (except for those
representations and warranties that address matters as of a particular date
which only need be true and correct as of such date) the Closing Date with the
same force and effect as if they had been made on and as of said date, and a
certificate duly executed by an officer of ViroPharma, to the effect of the
foregoing, shall be delivered to Aventis.
(b) Performance of Obligations. ViroPharma shall have performed and
--------------------------
complied with all obligations and conditions herein required to be performed or
complied with by it on or prior to the Closing and a certificate duly executed
by an officer of ViroPharma, to the effect of the foregoing, shall be delivered
to Aventis.
(c) Proceedings and Documents. All corporate and other proceedings
-------------------------
in connection with the transactions contemplated at the Closing and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to Aventis, and Aventis shall have received
all such counterpart originals or certified or other copies of such documents as
it may reasonably request.
(d) Qualifications; Legal Investment. All authorizations,
--------------------------------
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful sale and issuance of the Shares shall have been duly obtained and shall
be effective on and as of the Closing. No stop order or other order enjoining
the sale of the Shares shall have been issued and no proceedings for such
purpose shall be pending or, to the Knowledge of ViroPharma, threatened by the
SEC.
(e) Nasdaq Listing. If required by Nasdaq, the Shares shall have
--------------
been approved for listing on the Nasdaq Stock Market, subject only to official
notice of issuance. In addition, ViroPharma's Common Stock shall be listed for
trading on the Nasdaq National Market or other national securities exchange or
automated quotation system.
6.2 Conditions to Obligations of ViroPharma at the Closing. ViroPharma's
------------------------------------------------------
obligation to issue and sell the Shares at the Closing is subject to the
fulfillment to its reasonable satisfaction, on or prior to the Closing, of the
following conditions, any of which may be waived by ViroPharma:
(a) Representations and Warranties True. The representations and
-----------------------------------
warranties made by Aventis in Section 5 hereof shall be true and correct in all
material respects on the Closing Date with the same force and effect as if they
had been made on and as of said date, and a certificate duly executed by an
officer of Aventis, to the effect of the foregoing, shall be delivered to
ViroPharma.
(b) Performance of Obligations. Aventis shall have performed and
--------------------------
complied with all agreements and conditions herein required to be performed or
complied with by it on or before the Closing, and a certificate duly executed by
an officer of Aventis, to the effect of the foregoing, shall be delivered to
ViroPharma.
________________________________________________________________________________
Page 10
(c) Qualifications; Legal Investment. All authorizations,
--------------------------------
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful sale and issuance of the Shares shall have been duly obtained and shall
be effective on and as of the Closing. No stop order or other order enjoining
the sale of the Shares shall have been issued and no proceedings for such
purpose shall be pending or, to the Knowledge of ViroPharma, threatened by the
SEC.
6.3 Condition to Obligations of each Party at the Closing. The
-----------------------------------------------------
obligations of ViroPharma and Aventis to consummate the transactions
contemplated to occur at the Closing shall be subject to the satisfaction prior
to Closing of the following conditions, each of which may be waived by the other
party only if it is legally permitted to do so.
(a) HSR and Other Approvals. Any applicable waiting period under
-----------------------
the HSR Act relating to the transactions contemplated hereby shall have expired
or been terminated, and all other material authorizations, consents, orders or
approvals of, or regulations, declarations or filings with, or expirations of
applicable waiting periods imposed by, any Governmental Entity (including,
without limitation, any foreign antitrust filing) necessary for the consummation
of the transactions contemplated hereby, shall have been obtained or filed or
shall have occurred.
(b) No Litigation, Injunctions or Restraints. No statute, rule,
----------------------------------------
regulation, executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order enacted, entered, promulgated, enforced or
issued by any governmental entity or other legal restraint or prohibition
preventing the consummation of the transactions contemplated by this Agreement
and the Registration Rights Agreement shall be in effect.
(c) Copromotion and Codevelopment Agreement. The Copromotion and
---------------------------------------
Codevelopment Agreement shall continue to be in full force and effect.
(d) Triggering Event. The Triggering Event shall have occurred.
-----------------
7. Registration Rights.
-------------------
7.1 Piggyback Registrations. ViroPharma shall notify all Holders of
-----------------------
Registrable Securities in writing at least thirty (30) days prior to the filing
of any Registration Statement (the "Registration Notice"), other than an
Excluded Registration Statement, under the Securities Act for purposes of a
public offering of Common Stock of ViroPharma (including, but not limited to,
Registration Statements relating to secondary offerings of Common Stock of
ViroPharma), and will afford each such Holder an opportunity to include in such
Registration Statement (other than an Excluded Registration Statement) all or
part of such Registrable Securities held by such Holder. Each Holder desiring to
include in any such Registration Statement all or any part of the Registrable
Securities held by it shall, within twenty (20) days after receiving the
Registration Notice from ViroPharma, so notify ViroPharma in writing. Such
notice shall state the intended method of disposition of the Registrable
Securities by such Holder. If a Holder does not elect to include all of its
Registrable Securities in any Registration Statement thereafter filed by
ViroPharma, such Holder shall nevertheless continue to have the right to include
any Registrable
________________________________________________________________________________
Page 11
Securities in any subsequent Registration Statement or Registration Statements
as may be filed by ViroPharma with respect to offerings of its securities (other
than an Excluded Registration Statement), all upon the terms and conditions set
forth herein.
(a) Underwriting. If the Registration Statement under which
------------
ViroPharma gives notice under this Section 7.1 is for an underwritten offering,
ViroPharma shall so advise the Holders of Registrable Securities. In such event,
the right of any such Holder to be included in a registration pursuant to this
Section 7.1 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form, reasonably acceptable to such Holder,
with the underwriter or underwriters selected for such underwriting by
ViroPharma, including the indemnification provisions thereof. Notwithstanding
any other provision of the Agreement, if the underwriter determines in good
faith that marketing factors require a limitation of the total number of shares
to be underwritten, ViroPharma and its underwriters shall allocate the number of
Registrable Securities requested to be registered by each of the Holders as
follows: (i) first, to ViroPharma; and (ii) second, to the Holders of
Registrable Securities that have elected to participate in such offering and
such other holders of ViroPharma's capital stock who have been granted
"piggyback" registration rights prior to the date hereof and who have elected to
participate in such offering on a pro rata basis. The Holders of Registrable
Securities acknowledge that the number of securities which may be registered
pursuant to this Section 7 may be reduced to zero. ViroPharma shall have no
obligation under this Section 7 to make any offering of its securities, or to
complete an offering of its securities that it proposes to make, and shall incur
no liability to any Holder for its failure to do so.
(b) Right To Terminate Registration. ViroPharma shall have the
-------------------------------
right to terminate or withdraw any registration initiated by it under this
Section 7.1 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration, provided that any
such termination or withdrawal shall not relieve ViroPharma of its obligation to
pay for the Registration Expenses incurred and shall be without prejudice to the
Holder's rights under this Section 7 to include such securities in a future
Registration Statement.
7.2 Expenses Of Registration. Except as specifically provided herein,
------------------------
all Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 7.1 shall be borne by
ViroPharma, and Selling Expenses incurred in connection with any registration
hereunder shall be borne by the Holders of the securities so registered pro rata
on the basis of the number of securities so registered.
7.3 Obligations Of ViroPharma. The obligations of ViroPharma to effect
-------------------------
the registration of any Registrable Securities pursuant to this Section 7 shall
at all times be subject to the restrictions set forth in Section 8.1. Whenever
required to effect such a registration, ViroPharma shall, as expeditiously as
reasonably possible:
________________________________________________________________________________
Page 12
(a) Prepare and file with the SEC the requisite registration
statement to effect such registration (including such audited financial
statements as may be required by the Securities Act or the rules and regulations
promulgated thereunder) and thereafter use its reasonable efforts to cause such
registration statement to become and remain effective for a period of time
sufficient to permit distribution of the Registrable Securities as provided in
such Registration Statement.
(b) Prepare and file with the SEC such amendments, post-effective
amendments and supplements to such Registration Statement and the prospectus
used in connection therewith as may be necessary to keep such Registration
Statement effective and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement.
(c) Furnish to each Holder of Registrable Securities covered by such
Registration Statement and each underwriter, if any, of the securities being
sold by such Holder such number of conformed copies of such Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits to such Registration Statement), such number of copies of the
prospectus contained in such Registration Statement (including each preliminary
prospectus and any summary prospectus) and any prospectus filed pursuant to Rule
424 under the Securities Act and such other documents, as such Holder and
underwriter, if any, may reasonably request in order to facilitate the public
sale or other disposition of the Registrable Securities owned by such Holder (it
being understood that ViroPharma consents to the use of the prospectus and any
amendments or supplement thereto by each Holder of Registrable Securities
covered by the Registration Statement and the underwriter or underwriters, if
any, in connection with the offering and sale of Registrable Securities covered
by the prospectus or any amendment or supplement thereto).
(d) Use its reasonable efforts to register or qualify all
Registrable Securities under the securities laws or blue sky laws of the
jurisdictions as any Holder thereof and any underwriter of the securities being
sold by such Holder shall reasonably request, to keep such registrations or
qualifications in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary or advisable
to enable such Holder and underwriter to consummate the disposition in such
jurisdictions of the securities owned by such Holder, except that ViroPharma
shall not for any such purpose be required to qualify generally to do business
as a foreign corporation or become subject to taxation in any jurisdiction
wherein it would not, but for the requirements of this subsection (d), be
obligated to be so qualified, or subject to consent to general service of
process in any such jurisdiction.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement. In addition, ViroPharma shall, upon the
request of the managing underwriter, make available appropriate ViroPharma
management to participate in customary selling efforts or "road shows," as
appropriate.
________________________________________________________________________________
Page 13
(f) ViroPharma will notify each Holder of Registrable Securities
covered by such Registration Statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon ViroPharma's
discovery that, or upon the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made, and at
the request of such Holder promptly prepare and furnish to such Holder and each
underwriter, in any, a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
(g) Furnish, at the request of the Holders participating in the
registration, on the date that such Registrable Securities are delivered to the
underwriters for sale: (i) an opinion, dated as of such date, of the counsel
representing ViroPharma for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, and (ii) a letter dated as of such
date, from the independent certified public accountants of ViroPharma, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters.
(h) ViroPharma will cause all Registrable Securities covered by the
Registration Statement to be listed on each securities exchange or traded or
quoted on each market on which the same class of securities issued by ViroPharma
are then listed, traded or quoted.
(i) ViroPharma will provide a transfer agent and a CUSIP number for
all Registrable Securities no later than the effective date of such Registration
Statement.
7.4 Delay Of Registration; Furnishing Information.
---------------------------------------------
(a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 7.
(b) It shall be a condition precedent to the obligations of
ViroPharma to take any action pursuant to Section 7.1 that the selling Holders
shall furnish to ViroPharma such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be legally required under the Securities Act to effect
the registration of their Registrable Securities.
________________________________________________________________________________
Page 14
7.5 Indemnification; Contribution
-----------------------------
(a) ViroPharma shall indemnify and hold harmless each Holder
(including the employees, officers and directors of Aventis) from and against
any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) arising out of or based upon any untrue, or
allegedly untrue, statement of a material fact contained in any Registration
Statement, prospectus or preliminary prospectus or notification or offering
circular (as amended or supplemented if ViroPharma shall have furnished any
amendments or supplements thereto) or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information concerning
such Holder furnished in writing to ViroPharma by such Holder expressly for use
in such Registration Statement.
(b) Each Holder shall indemnify and hold harmless ViroPharma, any
underwriter retained by ViroPharma and their respective directors, officers,
employees and each Person who controls ViroPharma or such underwriter (within
the meaning of the Securities Act and the Exchange Act) from and against any and
all losses, claims, damages, liabilities and expenses (including reasonable
costs of investigation) arising out of or based upon any untrue, or allegedly
untrue, statement of a material fact contained in any Registration Statement,
prospectus or preliminary prospectus or notification or offering circular (as
amended or supplemented if ViroPharma shall have furnished any amendments or
supplements thereto) or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
omission was made in reliance upon and in conformity with any information
concerning such Holder furnished in writing to ViroPharma by such Holder
specifically for use in the preparation of such Registration Statement or
prospectus; provided, however, that the total amount to be indemnified by such
-------- -------
Holder pursuant to this Section 7.5(b) shall be limited to the net proceeds
received by the Holders in the offering to which the Registration Statement or
prospectus relates.
(c) Each Person entitled to indemnification hereunder (the
"Indemnified Party") agrees to give prompt written notice to the indemnifying
party (the "Indemnifying Party") after the receipt by the Indemnified Party of
any written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which the Indemnified Party
intends to claim indemnification or contribution pursuant to this Agreement;
provided, however, that the failure to so notify the Indemnifying Party shall
-------- -------
not relieve the Indemnifying Party of any liability that it may have to the
Indemnified Party hereunder unless, and only to the extent that, such failure
results in the Indemnifying Party's forfeiture of substantive rights or
defenses. If notice of commencement of any such action is given to the
Indemnifying Party as above provided, the Indemnifying Party shall be entitled
to participate in and, to the extent it may wish, jointly with any other
Indemnifying Party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and reasonably satisfactory to such
Indemnified Party. The Indemnified Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the Indemnified Party unless (i) the Indemnifying Party agrees
to pay the same, (ii) the Indemnifying
________________________________________________________________________________
Page 15
Party fails to assume the defense of such action with counsel reasonably
satisfactory to the Indemnified Party in its reasonable judgment or (iii) the
named parties to any such action (including any impleaded parties) have been
advised by such counsel that either (x) representation of such Indemnified Party
and the Indemnifying Party by the same counsel would be inappropriate under
applicable standards of professional conduct or (y) there may be one or more
legal defenses available to it which are different from or additional to those
available to the Indemnifying Party. In either of such cases, the Indemnifying
Party shall not have the right to assume the defense of such action on behalf of
such Indemnified Party. No Indemnifying Party shall be liable for any settlement
entered into without its written consent (other than in the case where the
Indemnifying Party is unconditionally released from liability and its rights are
not adversely effected), which consent shall not be unreasonably withheld.
(d) If the indemnification provided for in this Section 7.5 from the
Indemnifying Party pursuant to applicable law is unavailable to an Indemnified
Party hereunder in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
faults of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such Indemnifying Party or Indemnified Party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Sections 7.5(a), (b)
and (c), any legal or other fees, charges or expenses reasonably incurred by
such party in connection with any investigation or proceeding. The parties
hereto agree that it would not be just and equitable if contribution pursuant to
this Section 7.5(d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person.
7.6 Assignment Of Registration Rights. The rights to cause ViroPharma to
---------------------------------
register Registrable Securities pursuant to this Section 7 may only be assigned
by Aventis to a transferee or assignee of Registrable Securities that is an
Affiliate or a successor (by operation of law or otherwise) to substantially all
the business or assets of Aventis; provided, however (i) Aventis shall, within
ten (10) days after such transfer, furnish to ViroPharma written notice of the
name and address of such transferee or assignee and the securities with respect
to which such registration rights are being assigned, and (ii) such transferee
shall agree to be subject to all restrictions with respect to the Shares set
forth in this Agreement.
7.7 "Market Stand-Off" Agreement. If requested by ViroPharma or the
----------------------------
representative of the underwriters of Common Stock (or other securities) of
ViroPharma, each
________________________________________________________________________________
Page 16
Holder shall agree not to sell or otherwise transfer or dispose of any Common
Stock (or other securities) of ViroPharma held by such Holder (other than those
included in the registration, if any) for a period commencing on the date that
such Holder receives the Registration Notice (but in no case earlier than thirty
(30) days prior to the date of the filing of the applicable Registration
Statement) and continuing for the period specified by the [Brepresentative of
the underwriters not to exceed ninety (90) days following the effective date of
a Registration Statement of ViroPharma filed under the Securities Act, provided
that all executive officers and directors of ViroPharma enter into similar
agreements. Notwithstanding the foregoing, Aventis shall have no obligations
under this Section 7.7: (a) in respect of a private placement by Aventis of any
Common Stock (or other securities) of ViroPharma to the extent that such private
placement occurs prior to the filing of the applicable Registration Statement,
(b) from and after the date that Aventis's registration rights granted hereunder
have terminated in their entirety, or (c) if fifty percent (50%) or more of
Common Stock requested by such Holder to be included in such registration is
excluded under Section 7.1(a).
7.8 Termination Of Registration Rights. This Section 7 and the
----------------------------------
registration rights granted hereunder in respect of the Shares shall terminate
in their entirety on the later of (i) five (5) years from the Closing Date, or
(ii) three (3) months after the Holder ceases to be an "affiliate" (within the
meaning of the Exchange Act or Securities Act) of ViroPharma.
8. Covenants
---------
8.1 Covenant Of Aventis. Aventis hereby covenants and agrees that it
-------------------
shall not exercise the registration rights described in Section 7 during the one
(1) year period following the Closing Date.
8.2 Covenant Of ViroPharma.
----------------------
(a) ViroPharma hereby covenants and agrees that it shall take all
necessary and appropriate actions to ensure that it shall have available under
its Restated Certificate of Incorporation as in effect on the Closing Date
sufficient authorized but unissued shares of its Common Stock to issue and sell
to Aventis all of the Shares.
(b) ViroPharma will file with Nasdaq all documentation required by
Nasdaq, if any, in connection with the issuance of the Shares.
8.3 Rights Agreement. In the event that the purchase of the Shares
----------------
hereunder by Aventis at any Closing would cause Aventis to become an "Acquiring
Person," as such term is defined in the Rights Agreement, because either (a) the
Shares, by themselves, constitute in excess of twenty percent (20%) of then-
outstanding Common Stock of ViroPharma (the "Threshold"), or (b) after the date
hereof but prior to the Closing Date Aventis acquires a third party that owns
capital stock of ViroPharma and whose ownership of capital stock of ViroPharma
is not the primary business purpose of such third party (the "Third Party
ViroPharma Stock"), and when the Shares are added together with Third Party
ViroPharma Stock, Aventis's aggregate beneficial ownership exceeds the
Threshold, then prior to the
________________________________________________________________________________
Page 17
consummation of the Closing, ViroPharma shall cause the Rights Agreement to be
amended to ensure that the acquisition of the Shares at such Closing does not
cause Aventis to become an Acquiring Person. Notwithstanding the foregoing,
nothing in this Section 8.3 shall require ViroPharma to amend the Rights
Agreement if Aventis's purchase of the Shares would result in Aventis becoming
an Acquiring Person because such Shares, when added to any shares of the capital
stock of ViroPharma acquired by Aventis other than under this Agreement or as
specifically described in clause (b) of this Section 8.3, causes Aventis's
ownership to exceed the Threshold.
8.4 Notice of Market Sale. Aventis shall provide ViroPharma with a notice
---------------------
of its intent to sell the Shares pursuant to Rule 144 prior to completing such a
sale in order to provide ViroPharma an opportunity to arrange an orderly
disposition of the Shares. At any point during such thirty (30) day period,
ViroPharma may terminate the remainder of such period and notify Aventis that
Aventis may sell the Shares pursuant to Rule 144. Notwithstanding the foregoing,
Aventis shall have no obligations under this Section 8.4 in respect of a private
placement by Aventis of the Shares.
9 Termination.
-----------
9.1 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing:
(a) by mutual written consent of Aventis and ViroPharma;
(b) by Aventis or ViroPharma:
(i) if the Closing shall not have occurred prior to the
expiration of the one hundred fifteen (115) day period following the date of the
Triggering Event; provided that the right to terminate this Agreement pursuant
to this clause shall not be available to a party whose failure to fulfill an
obligation under this Agreement results in the failure of the Closing to occur;
(ii) if there shall be any statute, law, regulation or rule
that makes consummating the transactions contemplated hereby illegal or if any
court or other Governmental Entity of competent jurisdiction shall have issued
judgment, order, decree or ruling, or shall have taken such other action
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby and such judgment, order, decree or ruling
shall have become final and non-appealable;
(iii) if the Copromotion and Codevelopment Agreement shall have
terminated; or
(iv) the United States Federal Trade Commission ("FTC") and/or
the United States Department of Justice shall seek a preliminary injunction
under the HSR Act against ViroPharma and Aventis to enjoin the transactions
contemplated by this Agreement or the Copromotion and Codevelopment Agreement;
or
________________________________________________________________________________
Page 18
(c) by Aventis:
(i) if ViroPharma shall have (A) failed to perform any of
its material obligations contained herein, or (B) breached any of its material
representations or warranties contained herein, provided that Aventis gives
ViroPharma written notice of such failure to perform or breach and ViroPharma
does not cure such failure to perform or breach within thirty (30) days after
its receipt of such written notice;
(ii) if any of the conditions set forth in Section 6.1 or 6.3
(other than 6.3(a)) shall become impossible to fulfill (other than as a result
of any breach by Aventis of the terms of this Agreement) and shall not have been
waived in accordance with the terms of this Agreement; or
(iii) if the Common Stock shall no longer be listed for
trading on the Nasdaq National Market or other national securities exchange or
automated quotation system; provided however, that Aventis may not terminate
this Agreement pursuant to this Section 8.1(c)(iii): (A) prior to the date of
the Triggering Event; and (B) on or after the date of the Triggering Event, if
ViroPharma shall become listed for trading on the Nasdaq National Market or
other national securities exchange or automated quotation system at any time
during the ninety (90) day period after the date of the Triggering Event.
(d) by ViroPharma:
(i) if Aventis shall have (A) failed to perform any of its
material obligations contained herein, or (B) breached any of its material
representations or warranties contained herein, provided that ViroPharma gives
Aventis written notice of such failure to perform or breach and Aventis does not
cure such failure to perform or breach within thirty (30) days after its receipt
of such written notice; or
(ii) if any of the conditions set forth in Section 6.2 or 6.3
shall become impossible to fulfill (other than as a result of any breach by
ViroPharma of the terms of this Agreement) and shall not have been waived in
accordance with the terms of this Agreement.
9.2 Effect of Termination. In the event of termination of this Agreement
---------------------
by either Aventis or ViroPharma as provided in Section 9.1, this Agreement shall
forthwith become void and have no effect, without any liability or obligation on
the part of Aventis or ViroPharma, other than the provisions of this Section
9.2, and except to the extent that such termination results from a material
breach by a party of its representations, warranties, covenants or agreements
set forth in this Agreement.
10. Miscellaneous.
-------------
10.1 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the Commonwealth of Pennsylvania, without regard to
the choice of law provisions thereof, and the federal laws of the United States.
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Page 19
10.2 Public Statements. Any statement to the public regarding this
-----------------
Agreement shall be approved in advance by ViroPharma and Aventis, except as
otherwise required by law. Notwithstanding the foregoing, Aventis acknowledges
that ViroPharma shall file this Agreement with the SEC.
10.3 Successors And Assigns. Except as otherwise expressly provided
----------------------
herein, the respective rights and obligations of either Party under this
Agreement shall not be assignable in whole or in part by a Party without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the preceding sentence, in
connection with the merger, acquisition, transfer of all or substantially all of
a Party's assets or other change in control of either Party, such Party may
assign its rights and obligations under this Agreement in whole or in part to
such Party's transferee or successor in interest without the prior written
consent of the other Party. This Agreement shall bind and inure to the benefit
of Parties and their permitted successors and assigns.
10.4 Entire Agreement. This Agreement, the Copromotion and Codevelopment
----------------
Agreement and the exhibits thereto, that certain Mutual Non-Disclosure Agreement
dated as of March 1, 2001 between the ViroPharma and Aventis and that certain
Letter Agreement dated April 17, 2001 between ViroPharma and Aventis and the
other documents delivered pursuant hereto, constitute the full and entire
understanding and agreement among the Parties with regard to the subjects hereof
and no Party shall be liable or bound to any other Party in any manner by any
representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any Party, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
10.5 Separability. In the event any provision of this Agreement shall be
------------
invalid, illegal, or unenforceable, it shall to the extent practicable, be
modified so as to make it valid, legal and enforceable and to retain as nearly
as practicable the intent of the Parties, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
10.6 Amendment And Waiver. Except as otherwise provided herein, any term
--------------------
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of ViroPharma and Aventis. Any amendment
or waiver effected in accordance with this Section shall be binding upon any
holder of any securities purchased under this Agreement (including securities
into which such securities have been converted), each future holder of all such
securities, and ViroPharma.
10.7 Notices. All notices, requests, or other communications given
-------
hereunder shall be in writing and shall be deemed to have been duly given if (a)
delivered by hand; (b) mailed by registered or certified mail; (c) sent by air
courier; or (d) sent by cable, telex or facsimile, followed within twenty-four
(24) hours by notification pursuant to (a), (b) or (c) above, in each
________________________________________________________________________________
Page 20
case to the address set forth below or to such other address as a Party may
specify for itself by written notice given as aforesaid.
If to Aventis: Pharma Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Vice-President, Finance
and Information Solutions
with a copy to: Aventis Pharma Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
and to: Aventis Pharmaceuticals Inc.
▇▇▇▇▇ ▇▇▇-▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇.
Facsimile: ▇-▇▇▇-▇▇▇-▇▇▇▇
Attention: Vice President, Legal Department
If to ViroPharma: ViroPharma Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to: ViroPharma Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attention: General Counsel
10.8 Fees And Expenses. ViroPharma and Aventis shall each bear their own
-----------------
expenses and legal fees incurred on their behalf with respect to this Agreement
and the transactions contemplated hereby.
10.9 Titles And Subtitles. The titles of the Sections and subsections of
--------------------
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
________________________________________________________________________________
Page 21
10.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
IN WITNESS WHEREOF, this Stock Purchase Agreement is hereby executed as of the
date first above written.
VIROPHARMA INCORPORATED
By: Exhibit Only - Not For Signature
----------------------------------
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
President and CEO
AVENTIS PHARMA INC.
By: Exhibit Only - Not For Signature
----------------------------------
▇▇▇▇-▇▇▇▇▇▇▇▇ Leprince
President
________________________________________________________________________________
Page 22
Exhibit 4.1 (To the Stock Purchase Agreement)
Exceptions to Capitalization Representation and Warranty
--------------------------------------------------------
Certain preemptive rights were granted pursuant to that certain Investment
Agreement dated May 5, 1999 between ViroPharma Incorporates and PSV, LP (f/k/a
Perseus-▇▇▇▇▇ BioPharmaceutical Fund, LP).
Common Stock subject to sale pursuant to that certain Stock Purchase Agreement
dated as of December 9, 1999 between ViroPharma Incorporated and American Home
Products Corporation.
________________________________________________________________________________
Page 23