EXHIBIT 10.29
PROMOTION AGREEMENT
BETWEEN
MGI PHARMA, INC.
AND
SCHEIN PHARMACEUTICAL, INC.
DATED
MARCH 11, 1997
TABLE OF CONTENTS
Article 1 INTRODUCTORY PROVISIONS ......................................... 1
1.1 Defined Terms .............................................. 1
1.2 Other Rules of Interpretation .............................. 3
Article 2 REPRESENTATIONS AND WARRANTIES .................................. 4
2.1 Schein Warranties .......................................... 4
2.2 MGI Warranties ............................................. 4
Article 3 APPOINTMENT OF MGI .............................................. 4
3.1 Appointment of MGI ......................................... 4
3.2 Exclusivity and Retained Rights ............................ 5
3.3 Covenant ................................................... 5
3.4 Rights of the Parties ...................................... 5
3.5 Additional Product ......................................... 5
Article 4 MANAGEMENT OF PROMOTION ......................................... 6
4.1 Establishment of Marketing and Development
Committee .................................................. 6
4.2 Functions of the Committee ................................. 6
4.3 Preparation and Submission of Development and
Marketing Plans ............................................ 7
4.4 Dispute Resolution ......................................... 7
4.5 Contact Person ............................................. 7
Article 5 PRODUCT DEVELOPMENT ............................................. 8
5.1 Product Development ........................................ 8
5.2 Costs of Product Development ............................... 8
5.3 Overall Development Responsibility ......................... 8
Article 6 MANUFACTURE, DISTRIBUTION AND REGULATORY MATTERS ................ 8
6.1 Manufacture, Supply and Distribution of Product ............ 8
6.2 Pricing .................................................... 8
6.3 Regulatory Compliance ...................................... 8
6.4 Product Recall ............................................. 9
Article 7 PROMOTIONAL ACTIVITIES ......................................... 9
7.1 Promotional Obligation ..................................... 9
7.2 Training ................................................... 9
7.3 Promotional Materials ......................................10
7.4 Advisory Board .............................................10
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7.5 Conduct of MGI Sales Force ................................10
7.6 Overall Marketing Responsibility ...........................11
7.7 Costs of Co-Promotion ......................................11
7.8 Reports on Promotional Activities ..........................11
Article 8 JOINT OBLIGATIONS ...............................................11
8.1 Assistance and Notifications to Other Party ................11
8.2 Market Surveys .............................................12
8.3 Withdrawal of Product ......................................12
Article 9 COMPENSATION ....................................................12
9.1 Determination of Profits ...................................12
9.2 Promotion Fee ..............................................13
9.3 Payments and Sales Reports .................................14
9.4 Books and Records ..........................................14
Article 10 INDEMNIFICATION .................................................15
10.1 Indemnification by MGI ....................................15
10.2 Indemnification by Schein .................................16
10.3 Insurance .................................................17
10.4 Survival ..................................................17
Article 11 CONFIDENTIALITY AND NON-HIRE ....................................17
11.1 Non-Use and Non-Disclosure ................................17
11.2 Marking ...................................................17
11.3 Exclusions ................................................17
11.4 Duration; Surviving Obligation ............................18
11.5 Prior Agreements ..........................................18
11.6 Non-Hire Obligation .......................................18
Article 12 TERM AND TERMINATION ............................................19
12.1 Term ......................................................19
12.2 Termination for Cause .....................................19
12.3 Termination for Withdrawal of the Product .................19
12.4 Rights and Obligations on Termination or Expiration .......20
12.5 No Compensation ...........................................21
Article 13 GENERAL PROVISIONS ..............................................21
13.1 Entire Agreement .........................................21
13.2 LIMITATION OF LIABILITY ...................................21
13.3 Assignment ................................................21
13.4 Amendment .................................................21
13.5 Severability ..............................................21
13.6 Notices ...................................................22
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13.7 Waiver ....................................................22
13.8 Counterparts ..............................................23
13.9 Governing Law .............................................23
13.10 Force Majeure .............................................23
13.11 Relationship ..............................................23
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PROMOTION AGREEMENT
THIS AGREEMENT is made as of March 11, 1997 (the "Effective Date") and
between MGI PHARMA, INC. ("MGI"), 300E Opus Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and Schein Pharmaceutical, Inc. ("Schein"), ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
Recitals
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A. MGI acquires, develops and markets pharmaceuticals that it believes
address currently unmet medical needs or significantly improve upon current
therapies and has experience in promoting pharmaceuticals for oncological
indications.
▇. ▇▇▇▇▇▇ has certain rights and know-how relating to the Product (as
hereinafter defined) and is currently manufacturing and marketing the Product.
C. The intent of this Promotion Agreement is to increase sales of the
Product in the oncology sector in the U.S. by using MGI's experience. MGI
desires to co-promote the Product in the oncology sector in the United States,
and Schein desires to grant to MGI the right, which shall be exclusive as to
third parties and semi-exclusive as to Schein, to co-promote the Product in such
field and territory, all upon the intent, terms and conditions set forth in this
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto have agreed as follows:
ARTICLE 1 INTRODUCTORY PROVISIONS
-----------------------
1.1 Defined Terms. The following terms, when used in capitalized form in this
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Agreement, shall have the meanings set forth below:
(a) "Accounts and Physicians" shall mean those accounts and physicians
which are on the agreed list for MGI's promotional efforts hereunder,
as determined by the Committee and to be attached hereto as Exhibit A.
(b) "Affiliate" when used with reference to either party shall mean any
entity controlling, controlled by or under common control with the
said party. For purposes hereof, "control" shall mean ownership,
directly or indirectly, of more than fifty percent (50%) of the
securities having the right to vote for the election of directors, in
the case of a corporation, and more than fifty percent (50%) of the
beneficial interest
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in the capital, in the case of a business entity other than a corporation.
(c) "Best Efforts" shall mean those efforts that would be made by a
reasonably prudent business person acting in good faith, in the
exercise of reasonable commercial judgment and in a manner consistent
with the applicable party's overall business strategy.
(d) "Committee" shall have the meaning set forth in Section 4.1 hereof.
(e) "Confidential Information" shall mean all proprietary or confidential
information of a party, including, without limitation, any information
on the markets, customers, suppliers, patents or patent applications,
inventions, products, procedures, designs, formulas, business plans,
financial projections, organizations, employees or consultants or any
other similar aspects of a party's present or future business, the
secrecy of which confers a competitive advantage upon that party.
(f) "Co-Promotion Date" shall mean the date on which MGI commences co-
promoting hereunder. MGI shall give Schein written notice of such
date.
(g) "Cost of Goods" shall mean Schein's current manufacturing costs for
the Product, accounted for in accordance with full absorption costing
and Generally Accepted Accounting Principles, consistently applied.
(h) "Development Plans" shall have the meaning set forth in Section 4.3
hereof.
(i) "DMF" shall mean the Drug Master File required to manufacture, market
and sell the Product in bulk form in the United States.
(j) "FDA" shall mean the United States Food and Drug Administration.
(k) "Field" shall mean use in the treatment of anemia in connection with
oncology.
(l) "Incremental Sales Volume" shall mean ***
(m) "Marketing Plan" shall have the meaning set forth in Section 4.3.
*** Denotes confidential information that has been omitted from the
exhibit and filed separately, accompanied by a confidential treatment
request, with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.
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(n) "Net Sales" shall mean the invoiced amount billed to independent third
parties by Schein (but not including invoices relating to transactions
between Schein and its Affiliates) with respect to the Product in the
Territory, less trade discounts, chargebacks, terms, administrative
fees, credits or allowances including those granted on account of
price adjustments, returns or rebates, if any, incurred or granted.
(o) "Net Oncology Sales" shall mean ***
(p) "NDA" shall mean the new drug application required to manufacture,
market and sell Product in finished dosage form in the United States.
(q) "Product" shall mean that injectable iron product known as InFeD (iron
dextran for injection, USP).
(r) "Profits" shall mean ***
(s) "Territory" shall mean the United States.
1.2 Other Rules of Interpretation. Unless the context clearly indicates
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otherwise, the following rules shall govern the interpretation of this
Agreement:
(a) The definitions of all terms defined herein shall apply equally to the
singular, plural, and possessive forms of such terms;
(b) All references herein to "days" shall mean calendar days;
(c) All references to "quarters" shall mean calendar quarters; and
*** Denotes confidential information that has been omitted from the
exhibit and filed separately, accompanied by a confidential treatment
request, with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.
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(d) All references to "Sections" shall mean the corresponding Sections of
this Agreement and all references to "Articles" shall mean the
corresponding Articles of this Agreement.
ARTICLE 2 REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 Schein Warranties. Schein represents and warrants to MGI that:
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(a) it has the legal right and power to enter into this Agreement;
(b) it has taken all necessary corporate action to authorize and perform
this Agreement;
(c) it has not entered into any inconsistent prior obligations that would
impair the rights being granted to MGI hereunder; and
(d) it knows of no third party claims that would challenge or impair the
exercise of the rights granted to MGI herein.
2.2 MGI Warranties. MGI represents and warrants to Schein that:
---------------
(a) it has the legal right and power to enter into this Agreement;
(b) it has taken all necessary corporate action to authorize and perform
this Agreement;
(c) it has not entered into any inconsistent prior obligations that would
impair its ability to perform its obligations hereunder; and
(d) it knows of no third party claims that would challenge or impair its
ability to perform its obligations hereunder.
ARTICLE 3 APPOINTMENT OF MGI
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3.1 Appointment of MGI. Schein hereby appoints MGI, and MGI hereby accepts
------------------
such appointment, as its exclusive agent to detail and promote the Product in
the Field within the Territory during the term of the Agreement. The parties
acknowledge and agree that MGI shall be entitled to promote the Product to any
physician who treats anemia in oncology patients, whether such physician is a
generalist or a radiologist, oncologist, hematologist or other specialist. The
parties further acknowledge and agree that the rights granted herein shall not
preclude Schein from detailing and promoting the Product in the Field within the
Territory.
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3.2 Exclusivity and Retained Rights. Schein shall not grant the right to
-------------------------------
promote Product in the Field and in the Territory to any other entity during the
term of the Agreement. Except as otherwise expressly provided in this
Agreement, Schein shall be responsible for maintaining (or, to the extent
permissible under existing contracts with third parties, causing such third
parties to maintain) all rights in and to the Product including, but not limited
to, the NDA for the Product, the Drug Master File for the Product, and all
manufacturing, distribution, patent, copyright and trademark rights relating to
the Product.
3.3 Covenant. During the term of this Agreement and for the twelve (12) month
--------
period following expiration or termination of this Agreement, MGI shall not
prepare product registrations or conduct research or development, license,
promote or market any injectable iron products, other than the Product, in the
Territory.
3.4 Rights of the Parties. Schein shall retain all proprietary and property
---------------------
interests in the Product until the point of sale and in all supporting sales,
promotional and training materials. MGI will not have nor represent that it has
any control over, or proprietary or property interests in, the Product or in any
sales, promotional or training materials. Nothing contained herein shall be
deemed to grant MGI, either expressly or impliedly, a license or other right or
interest in any patent, trademark or other intellectual property of Schein or
its Affiliates except as may be necessary for MGI to promote and detail the
Product as provided in this Agreement. MGI acknowledges that Schein shall
retain all copyrights in and to all sales, promotional and training materials
created or used in connection with the promotion of the Product.
3.5 Additional Products. During the term of this Agreement, including any
------------------
extensions or renewal terms, Schein shall promptly inform MGI if it develops any
other injectable iron products for use in the Field ("Additional Products") and
shall further notify MGI in writing whether Schein intends to market any
Additional Product itself or to co-promote the Additional Product with a third
party. If Schein intends to market such Additional Product exclusively itself,
or license or otherwise transfer ownership or distribution rights to a third
party at any time (including a co-promotion right as set forth below), MGI shall
have the right to terminate this Agreement upon ninety (90) days' written notice
to Schein and MGI shall be entitled to post-termination compensation as set
forth in Section 9.1. Such termination shall not be deemed a breach of this
Agreement. If Schein intends to co-promote such Additional Product with a third
party, MGI shall have an exclusive right of first negotiation with respect to
such rights to such Additional Product, exercisable upon written notice to
Schein not later than thirty (30) days after receipt of Schein's notice. If
MGI so exercises such right of first negotiation, the parties shall negotiate
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in good faith for a period of ninety (90) days the terms of such co-promotion.
ARTICLE 4 MANAGEMENT OF PROMOTION
-----------------------
4.1 Establishment of Marketing and Development Committee. Within fifteen (15)
----------------------------------------------------
days of the Effective Date, the parties shall establish a Marketing and
Development Committee (the "Committee"), composed of six (6) members, three (3)
representatives chosen by Schein and three (3) representatives chosen by MGI.
Such individuals shall be chosen from the party's senior management team, and
shall have expertise in marketing and sales, business and/or medical and
clinical affairs. The Chair of the Committee shall be a representative of
Schein. The first meeting of the Committee shall be held not more than 30 days
after the Effective Date. Thereafter, the Committee will meet quarterly, or
more or less often as the Committee determines to be appropriate. Such
meetings shall be in person, or by telephone if mutually acceptable by the
parties, and will be scheduled at mutually convenient times. If the meeting is
in person, it shall be held in a place alternately selected by Schein and MGI.
Each party will bear its own costs for attendance at Committee meetings. All
decisions of the Committee must be made by an affirmative vote of a majority of
all voting members of the Committee. Any disputes within the Committee will be
resolved pursuant to Section 4.4.
4.2 Functions of the Committee. The responsibilities of the Committee shall be
--------------------------
to establish projections, detailing goals, marketing plans, promotional and
clinical programs and to make other plans and take such other actions as may be
agreed by the parties. In particular, the Committee will:
(a) establish guidelines to govern the promotion of Product by MGI;
(b) review, comment upon and approve each Development Plan and Marketing
Plan (subject to Schein's final approval);
(c) monitor whether third party or governmental actions (e.g. third party
publication, labeling changes including FDA mandated labeling changes
or label changes that expand indications for Product usage in the
Field, new discovery, new product on the market, industry or medical
guidelines for expanded usage of the Product in the Field,
infringement of trademark rights) are having, or are likely to have, a
material effect on Net Sales or Profits for the Product and suggest
adjustments to the Marketing Plan and/or recommend to the parties
amendments to this Agreement to respond to such third party or
governmental actions;
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(d) develop and update, on a quarterly basis, a rolling 12 month forecast
of projected unit sales of the Product in the Field and the Territory
and estimated Profits and Incremental Sales Volumes for the Territory.
Such forecasts shall be made to assist Schein in planning its Product
production and shall be non-binding; and
(e) approve the proposed list of Accounts and Physicians and determine
which Accounts and Physicians have a high potential for prescribing
the Product in the Field, to be attached hereto as part of Exhibit A,
which may be changed from time to time in writing upon the mutual
agreement of the parties hereto.
4.3 Preparation and Submission of Development and Marketing Plans. The
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Committee shall prepare and adopt a development plan (the "Development Plan")
and a marketing plan (the "Marketing Plan") for each calendar year during the
term of this Agreement. The Development Plan shall set forth the development
strategy for the Product, including proposed clinical trials and protocols and
other development activities to be performed by each of the parties during such
calendar year and timetables for each activity. The Marketing Plan shall set
forth the marketing strategy and tactics to be used in promoting the Product in
the Field and in the Territory for such calendar year. The first draft of each
Development Plan and Marketing Plan shall be prepared by Schein, after
consultation with MGI. Through the Committee, Schein shall consult with MGI on
the Development Plans and Marketing Plans, and MGI shall have the right to
review and comment on such plans, particularly with respect to clinical study
design and placement. Final decisions on the Development Plans and Marketing
Plans will be made by Schein in a manner that is not arbitrary and is consistent
with the intent and goals of the parties as set forth in this Agreement.
4.4 Dispute Resolution. In the event of a disagreement between the parties as
------------------
to any matters within the scope of the responsibilities of the Committee, the
Committee will, diligently and in good faith, seek to resolve the matter in
dispute. Any dispute which the Committee is unable to resolve, despite its good
faith efforts, within thirty (30) days of first being addressed or any dispute
between the parties arising under Section 9.1 of the Agreement shall be promptly
referred to the President of MGI and the President, Retail and Specialty
Products Division of Schein who will discuss and use their Best Efforts to
resolve such dispute.
4.5 Contact Person. MGI and Schein shall each appoint an individual to serve
--------------
as a primary contact to communicate to the other with respect to day-to-day
issues of performance of the parties' obligations under this Agreement. Such
contact persons shall serve as ex-officio members of the Committee if not
appointed thereto.
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ARTICLE 5 PRODUCT DEVELOPMENT
-------------------
5.1 Product Development. Schein may conduct additional clinical studies with
-------------------
respect to the Product, in order to support marketing of the Product in the
Field; provided, that, Schein shall spend no less than one hundred thousand
dollars ($100,000) in each of the first two years after the Effective Date for
clinical studies for Products in the Field. Schein shall consult with MGI and
seek the advice of MGI with respect to all such studies. It is understood and
agreed that any clinical trials relating to the Product that are being conducted
as of the Effective Date are outside of the scope of this Section 5.1.
5.2 Costs of Product Development. Schein shall bear all of its costs and
----------------------------
expenses, and all of MGI's out-of-pocket costs and expenses related to
additional clinical development of the Product; provided that such costs and
expenses are pre-approved in writing by Schein. MGI shall bear its own internal
costs related to such development.
5.3 Overall Development Responsibility. Except as explicitly set forth in this
----------------------------------
Agreement, Schein shall be responsible for all development activities relating
to Product, including, but not limited to, all clinical studies and regulatory
matters.
ARTICLE 6 MANUFACTURE, DISTRIBUTION AND REGULATORY MATTERS
------------------------------------------------
6.1 Manufacture, Supply and Distribution of Product. Schein shall manufacture
-----------------------------------------------
the Product in accordance with good manufacturing practices as the same are or
from time to time shall be established by applicable statute or regulation of
the FDA and by the NDA. Schein shall use its Best Efforts to perform, or cause
to be performed, all manufacturing, labeling, packaging, warehousing,
maintenance of inventory, distribution, order entry, customer services and all
other activities to supply and distribute the Product in order to fill the
orders generated by the activities of MGI hereunder. MGI will promptly forward
to Schein any Product orders that it may receive. All orders for the Product
are subject to acceptance by Schein, in whole or in part.
6.2 Pricing. The decision on selling price, discounts and rebates for the
-------
Product shall be that of Schein. If Schein intends to increase or decrease the
listed selling price, it shall notify MGI simultaneously with notice to its
sales force.
6.3 Regulatory Compliance. Unless otherwise required by law, Schein will
---------------------
retain exclusive authority and responsibility for complying with all regulatory
requirements and maintaining all government agency contacts relating to the
8
Product, including, but not limited to, maintaining and updating the NDA for the
Product; the development and submission of regulatory filings regarding new
indications (if any, and at its sole discretion); the reporting of any adverse
drug reactions to the FDA; the filing of promotional materials with the FDA; and
the payment of Medicaid and other governmental rebates which in Schein's sole
judgment are due and owing. All Product complaints shall be handled in
accordance with the "Complaint Handling Procedures" attached hereto as Exhibit
B.
6.4 Product Recall. In the event that (i) Schein determines that an event,
--------------
incident or circumstance has occurred which may result in the need for a recall
or other removal of the Product or any lot or lots thereof from the market in
the Territory, (ii) the FDA requires a recall of the Product or (iii) the FDA
requires distribution of a "Dear Doctor" letter, Schein shall promptly advise
MGI with respect thereto. With respect to (i), Schein shall, in its sole
discretion, have the right to order a recall or other removal after such
notification. With respect to (ii) and (iii), Schein shall order such recall or
distribute such "Dear Doctor Letter" after such notification. Schein shall bear
all costs associated with any actions taken pursuant to this Section 6.4.
ARTICLE 7 PROMOTIONAL ACTIVITIES
----------------------
7.1 Promotional Obligation. MGI shall use its Best Efforts to promote the
----------------------
Product in the Field and in the Territory to the Accounts and Physicians,
consistent with the parties' marketing plan. MGI shall use Best Efforts to meet
the annual detailing requirements set forth in Exhibit A. MGI further agrees to
use its Best Efforts to make at least *** of the required detail calls in the
primary position to those Accounts and Physicians which the Committee determines
may have a high potential for prescribing the Product in the Field. The
Committee may, from time to time, approve a different proportion of required
details or a different call position to such group of high potential
prescribers.
7.2 Training. Schein will provide adequate training to MGI's sales force prior
--------
to the commencement of promotion by MGI. The initial training will take place
at either MGI's facilities or another agreed upon location and will be scheduled
so as to have the training of the MGI sales force completed not later than
ninety (90) days after the Effective Date. Subsequent to such initial training,
Schein will invite the MGI sales force to attend any training sessions which are
provided by Schein for the purpose of upgrading information relating to sales of
the Product. It is understood that such subsequent training sessions (i) will
be provided on an as-needed basis by Schein after discussions between MGI and
Schein regarding the content and format of such sessions and (ii) are subject to
the approval of the Committee. Schein and MGI shall each bear its respective
out-of-pocket expenses incurred in connection
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
9
with such training. Schein will supply members of the MGI sales force, without
charge to MGI, with copies of adequate sales training material relating to
Product.
7.3 Promotional Materials. Schein shall have the primary responsibility for
---------------------
developing promotional materials in the Field, in consultation with MGI. Schein
shall coordinate development of such materials with advertising agencies. All
promotional materials for use of the Product in the Field shall include MGI's
name and Schein's name, as practicable. Promotional materials for use of the
Product outside of the Field shall include Schein's name only. Schein shall
provide reasonable quantities of copies of its promotional materials for the
Product, at no cost to MGI.
7.4 Advisory Board. Schein will expand the medical education activities of its
--------------
existing Advisory Board with respect to use of the Product in the Field. MGI
shall have the right to attend all meetings of the Advisory Board that have
oncologists in participation. As to any other sessions of the Advisory Board,
MGI shall be able to so attend only upon Schein's previous approval which
approval shall not be unreasonably withheld. MGI shall have the right to review
and comment on the board's medical education activities, and shall have access
to members of the board for speaker's bureau purposes and for other promotional
activities for the Product in the Field and Territory. All expenses related to
the activities of the Advisory Board will be borne by Schein except that MGI
shall bear the costs of its attendance at Advisory Board meetings.
7.5 Conduct of MGI Sales Force. In accordance with the Marketing Plan and the
--------------------------
terms and conditions of this Agreement, and subject to the Federal Food, Drug
and Cosmetic Act, all regulations promulgated pursuant thereto and any and all
applicable state laws and regulations, MGI shall use its Best Efforts to direct
its MGI sales force to detail the Product in the Field and the Territory to so
persuade such appropriate physicians, to prescribe and use the Product. The MGI
sales force shall conduct details and shall execute the programs set forth in
the Marketing Plan. Schein may, from time to time and upon reasonable prior
notice, request that a Schein employee be allowed to work jointly with the MGI
sales force for certain details. Upon the authorization of MGI sales
management, such authorization not to be unreasonably withheld, MGI will
accommodate such request, provided that Schein shall be responsible for bearing
all costs associated with its employee engaging in such activity. MGI shall
cause its sales force, and all other employees, agents and representatives of
MGI, to comply with all applicable laws, regulations and guidelines in
connection with the marketing, advertising and promotion of the Product,
including the Medicare/Medicaid Anti-Kickback Statute and the Federal Food, Drug
and Cosmetic Act and the regulations promulgated thereunder, including, without
limitation, the Prescription Drug Marketing Act.
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7.6 Overall Marketing Responsibility. Except as explicitly set forth in this
--------------------------------
Agreement, Schein shall be responsible for all marketing activities relating to
the Product, including, but not limited to, all regulatory matters,
communications with physicians and approval of all marketing materials and the
substantive content of all marketing scripts.
7.7 Costs of Co-Promotion. Except as otherwise expressly set forth in this
---------------------
Agreement, (i) the parties shall each bear the costs and expenses of their
respective sales forces (including salaries, commissions and the like) and their
own internal marketing costs and (ii) Schein and MGI shall share equally all
other out-of-pocket expenses incurred in co-promoting the Product, excluding
such sales force and internal marketing costs. Upon request, MGI and Schein
shall provide each other with invoices and other written documentation in order
to document such expenses. MGI will implement a bonus system for the Product
for MGI's sales force that is proportional to MGI's total bonus system for its
sales force, based on a ratio, the numerator of which is *** and the
denominator of which is MGI's total details for such calendar year.
7.8 Reports on Promotional Activities. MGI shall provide Schein with a
---------------------------------
quarterly written report of its promotional activities in the form set forth in
Exhibit C hereto, such reports to be submitted no less often than forty-five
(45) days of the end of each calendar quarter.
ARTICLE 8 JOINT OBLIGATIONS
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8.1 Assistance and Notifications to Other Party. Each party agrees to provide
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to the other reasonable assistance and to take actions reasonably requested by
the other party that are necessary to enable the other party to comply with its
obligations hereunder and with any law or regulation applicable to the Product,
including, but not limited to, Schein's meeting its reporting and other
obligations under Sections 6.3. and 6.4. Such assistance and actions shall
include, among other things: (i) MGI promptly reporting to Schein adverse drug
reactions of which it becomes aware, so as to permit Schein to meet its FDA
reporting and other obligations in a timely fashion in accordance with Exhibit
B; (ii) Schein carrying out any FDA-mandated notifications relating to the
Product in accordance with Exhibit B; (iii) Schein immediately notifying MGI of
any inquiry or other contact by the FDA or any other governmental agency or
authority with Schein or its Affiliates relating to the Product, except that
Schein will notify MGI only of such inquiries or contacts which may materially
affect MGI's performance of its obligations relating to the Product under this
Agreement or which may adversely affect Schein's ability to manufacture and
supply the Product; and (iv) Schein promptly notifying MGI of any adverse drug
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
11
reactions to the Product or any regulatory action with respect to Product.
Schein will make available to MGI all FDA-authorized procedures and forms
necessary for MGI to meet its obligations hereunder.
8.2 Market Surveys. Each party hereto may, at its discretion and expense,
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undertake such market surveys, research or analyses relating to the Product as
it deems fit, and such surveys, research or analyses shall remain the property
of the party undertaking same. Each party shall make such surveys, research and
analyses specifically relating to the Product available to the other party at no
cost to that other party. Schein may request that MGI undertake market surveys,
research or analyses relating to the Product and MGI may, in its sole
discretion, elect to undertake such surveys, research or analyses.
8.3 Withdrawal of Product. Each party agrees to notify the other immediately
---------------------
of any pending or threatened event which may lead to withdrawal of Product from
the market, including, without limitation: (i) actual or threatened regulatory
action by the FDA or other governmental entity, including, but not limited to,
the loss by Schein of any right necessary to market Product; or (ii) safety
concerns relating to Product. The final decision as to whether to so withdraw
Product shall be within Schein's sole discretion. In the event of such
withdrawal of Product, the rights of the parties shall be governed by Section
12.3 hereof.
ARTICLE 9 COMPENSATION
------------
9.1 Determination of Profits. The parties shall determine Profits for the
------------------------
Product for the applicable quarter as follows:
(a) Prior to the Co-Promotion Date, the parties shall determine the
quarterly baseline for Net Oncology Sales of the Product in the Field
and in the Territory (the "Baseline"), as follows: ***
*** Denotes confidential information that has been omitted from the
exhibit and filed separately, accompanied by a confidential treatment
request, with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.
12
(b) The intent of the parties is to share the Profits from all sales of
Product to the Field, according to the percentages set forth in
Section 9.2. ***
Within sixty (60) days of the Effective Date, the parties shall use
their Best Efforts to agree upon a more accurate multiplier ***. If
such a multiplier is agreed upon, the parties shall amend this
Agreement in writing as appropriate to implement the revised
multiplier. If the parties fail to agree on a revised multiplier for
determining Profits, the *** multiplier shall be used, until such time
as the parties agree in writing to an alternative system for tracking
Profits. In the event that either party determines that the definition
of Net Oncology Sales or the provisions of Section 9.1 are operating
in a materially unfair manner to such party according to the intent of
this Agreement, the parties agree to attempt to resolve such
unfairness according to the provisions of Section 4.4.
(c) Incremental Sales Volume and Profits shall be determined using such
Baseline and Net Oncology Sales figures. MGI shall be entitled to
receive the portion of such Profits as provided in Section 9.2. ***
9.2 Promotion Fee. Schein and MGI shall share *** the Profits for sales of
-------------
the Product made during the first two years following the Co-Promotion Date. For
sales of the Product made during any renewal terms or extensions of this
Agreement, MGI shall receive *** of Profits up to the level of the Incremental
Sales Volume achieved during the second year following the Co-Promotion Date,
plus *** of the Profits above such level of Incremental Sales Volume. In
addition, subject to Section 12.4(b), upon any termination or expiration of this
Agreement, MGI shall be entitled to receive for
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
13
sales of Product made during the first twelve (12) months following such
termination or expiration, a payment equal to *** of Profits that would have
been payable to MGI hereunder had the Agreement not expired or been terminated,
provided however that such payment shall not exceed an amount greater than ***
times the total payments received by MGI from Schein in the twelve (12) month
period immediately preceding the termination or expiration of this Agreement.
9.3 Payments and Sales Reports. Schein shall pay MGI on a quarterly basis
--------------------------
MGI's share of Profits for the quarter then ending. Schein shall make such
quarterly payments within forty-five (45) days of the end of the applicable
quarters. Each payment shall be accompanied by a report setting forth the basis
for the payment, including the Profits, Incremental Sales Volume, Net Oncology
Sales, Net Sales and Cost of Goods for such quarter, for the Product. Schein
shall also provide MGI with (a) monthly report of actual sales of the Product in
the Territory, including quarter-to-date sales and (b) detailed quarterly
reports of actual sales of the Product in the Territory.
9.4 Books and Records.
-----------------
(a) Schein shall keep adequate and complete books and records related to
the Product according to its internal record retention policy. Such
books and records shall include all information necessary to verify
the total amount and computation of the Net Oncology Sales, Net Sales,
Cost of Goods, Incremental Sales Volume and Profits hereunder. Upon
request, but no more than once per calendar year, Schein shall
provide MGI with access, during regular business hours and upon
reasonable prior notice, and subject to the confidentiality
undertakings contained in this Agreement, to Schein's books and
records relating to the Product solely for the purpose of verifying
the accuracy of the calculations hereunder for the calendar year then
ended.
(b) MGI shall keep adequate and complete books and records related to its
co-promotional activities hereunder for a period of not less than five
(5) years following completion of the fiscal year in which such
activities occurred. Such books and records shall include all
information necessary to verify MGI's co-promotional activities
hereunder. Upon request, but no more than once per calendar year, MGI
shall provide Schein with access, during regular business hours and
upon reasonable prior notice, and subject to the confidentiality
undertakings contained in this Agreement, to MGI's books and records
relating to its co-promotional activities solely for verifying such
activities for the
*** Denotes confidential information that has been omitted from the
exhibit and filed separately, accompanied by a confidential treatment
request, with the Securities and Exchange Commission pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.
14
calendar year then ended.
(c) Such audit may be performed by the auditing party or by its
independent auditors. If such audit shows any underpayment or
overpayment, a correcting payment or refund, together with interest at
the current prime lending rate established by leading New York banks
as published in The Wall Street Journal shall be made within thirty
-----------------------
(30) days of completion of such audit and submission of the results
thereof, with details of the calculations included therein. The costs
of such audit shall be borne by the auditing party; provided that the
audited party shall reimburse the auditing party its actual out-of-
pocket expenses of such audit, if such audit reveals any underpayment
of amounts owing hereunder of more than Ten Thousand Dollars ($10,000)
or five percent (5%), whichever is greater, for any period covered by
such audit.
(d) All information obtained in the course of such audits shall be deemed
to be Confidential Information of the audited party, and in addition
to the restrictions imposed by Article 11, the auditing party shall
not be entitled to make copies of any of the books and records of the
audited party nor to take such books and records (or any copies
thereof) from the audited party's premises.
ARTICLE 10 INDEMNIFICATION
---------------
10.1 Indemnification by MGI.
----------------------
(a) MGI hereby indemnifies and holds harmless Schein and its Affiliates (a
"Schein Indemnified Party") from and against all liabilities, damages,
losses, costs and expenses (including reasonable attorney's fees)
arising out of: (i) claims, suits or proceedings brought by a third
party arising out of the promotion of the Product by MGI hereunder,
including, without limitation, the negligence, gross negligence or
willful misconduct of MGI in connection with its promotion of the
Product hereunder; or (ii) breach by MGI of its warranties, covenants
or agreements made herein or any misrepresentation by MGI in or in
connection with this Agreement.
(b) Whenever a Schein Indemnified Party becomes aware of a claim, suit or
proceeding as to which it believes it is entitled to indemnification
under this Article 10, such Schein Indemnified Party shall give notice
in writing to MGI, shall permit MGI to assume exclusive control of the
15
defense or settlement of the matter, and shall provide, at the expense
of MGI, all authority, information and assistance which MGI may
reasonably request for purposes of such defense; notwithstanding the
foregoing, MGI shall not settle, offer to settle or admit liability in
any claim, action, suit or proceeding in which it controls the defense
if such settlement, offer or admission could impose any liability on
Schein without the written consent of an officer of Schein, which
consent will not be unreasonably withheld. If a single law firm
engaged by MGI would be subject to any material conflict of interest
in representing one or more of such Parties, MGI shall not be required
to waive such conflict and may, instead, request separate
representation of the Schein Indemnified Party by an independent law
firm at the expense of MGI. A Schein Indemnified Party may engage its
own counsel, at its own expense, to monitor the defense of any such
matter.
10.2 Indemnification by Schein.
-------------------------
(a) Schein hereby indemnifies and holds harmless MGI and its Affiliates
(an "MGI Indemnified Party") from and against all liabilities,
damages, losses, costs and expenses (including reasonable attorney's
fees) arising out of: (i) claims, suits or proceedings brought by a
third party arising out of the manufacture, advertising, promotion,
use or sale of the Product by Schein, including, without limitation,
products liability and intellectual property infringement (except to
the extent subject to MGI's indemnification obligation under Section
10.1(a)); or (ii) breach of any warranty, covenant or agreement of
Schein contained in this Agreement or any misrepresentation by Schein
in or in connection with this Agreement.
(b) Whenever an MGI Indemnified Party becomes aware of a claim, suit or
proceeding as to which it believes it is entitled to indemnification
under this Article 10, it shall give notice in writing to Schein,
shall permit Schein to assume exclusive control of the defense or
settlement of the matter, and shall provide, at the expense of Schein,
all authority, information and assistance which Schein may reasonably
request for purposes of such defense; notwithstanding the foregoing,
Schein shall not settle, offer to settle or admit liability in any
claim, action, suit or proceeding in which it controls the defense if
such settlement, offer or admission could impose any liability on MGI
without the written consent of an officer of MGI, which consent will
not be unreasonably withheld. If a single law firm engaged by Schein
would be subject to any material conflict of interest in representing
one or more of such
16
Parties, Schein shall not be required to waive such conflict and may,
instead, request separate representation of the MGI Indemnified Party
by an independent law firm at the expense of Schein. An MGI
Indemnified Party may engage its own counsel, at its own expense, to
monitor the defense of any such matter.
10.3 Insurance. Each party shall obtain and maintain, at its sole expense,
---------
broad form comprehensive general liability insurance, including products
liability in the case of Schein, in amounts which are commercially reasonable in
light of such party's business and activities hereunder, but in no event less
than $10 million, providing insurance coverage for claims and suits arising from
the development, manufacture, promotion, use, distribution or sale of the
Product, as appropriate, in the Territory.
10.4 Survival. The parties' obligations under this Article 10 shall survive the
--------
termination of this Agreement for any reason.
ARTICLE 11 CONFIDENTIALITY AND NON-HIRE
----------------------------
11.1 Non-Use and Non-Disclosure. Each party acknowledges and agrees that all
--------------------------
the other party's Confidential Information is confidential and proprietary to
the disclosing party. Each party shall not use or disclose to any third party
the other party's Confidential Information without the other party's prior
written consent for any purpose other than as permitted or required hereunder.
Each party shall take the same reasonable measures necessary to prevent any
disclosure by its employees, agents, contractors, sublicensees, or consultants
of the other party's Confidential Information as it applies to the protection of
its own Confidential Information.
11.2 Marking. To be entitled to protection as Confidential Information, all
-------
Schein or MGI documents containing that party's Confidential Information shall
be appropriately and clearly marked as "Proprietary," "Secret," "Confidential,"
or other words to similar effect. If a disclosure of Confidential Information
is made orally, as in a meeting, the disclosing party shall indicate the nature
of that information at the time of its disclosure and shall confirm such
designation in writing within ten (10) days of the date of such disclosure to
the receiving party.
11.3 Exclusions. Information shall not be considered Confidential Information
----------
hereunder if it:
(a) was already in the possession of the receiving party prior to its
receipt from the disclosing party, as shown by the receiving party's
books and records;
17
(b) is, or becomes, part of the public knowledge or literature through no
fault, act or omission of the receiving party, provided, however, that
Confidential Information shall not be deemed to have entered the
public domain by reason of its having been filed with the FDA or any
other applicable governmental agency;
(c) is, or becomes, available to the receiving party from a source other
than the disclosing party, which source has rightfully obtained the
same information and has no obligation of confidentiality to the
disclosing party with respect to it;
(d) is made available on an unrestricted basis by the disclosing party to
a third party unaffiliated with the disclosing party; or
(e) is required to be revealed pursuant to law, provided, however, the
receiving party which is under any such requirement of law shall give
reasonable notice (pursuant to the provisions of Section 13.6) to the
disclosing party of such requirement and shall cooperate with the
disclosing party in reasonable legal efforts to limit or mitigate any
such revelation so as to preserve the proprietary nature of any
Confidential Information contained therein.
11.4 Duration; Surviving Obligation. Each party's obligations of non-use and
------------------------------
non-disclosure of the other party's Confidential Information shall apply during
the term of this Agreement and shall also survive for a period of five (5) years
after its termination or expiration for any reason.
11.5 Prior Agreements. The non-disclosure and non-use provisions of this
----------------
Agreement hereby supersede the provisions of the Confidential Disclosure
Agreement dated November 5, 1996, provided, however, that this Article 11 shall
be deemed retroactive to the effective date of the Confidential Disclosure
Agreement.
11.6 Non-Hire Obligation. Each of Schein and MGI agrees that during the term of
-------------------
this Agreement and for a period of one year after the termination of this
Agreement for whatever reason, neither it nor any of its Affiliates shall,
except with the prior written consent of the other party, offer employment to or
employ any person in the other party's sales force if such person was involved
in promoting the Product under this Agreement.
18
ARTICLE 12 TERM AND TERMINATION
--------------------
12.1 Term. Unless earlier terminated in accordance with Section 12.2 or 12.3,
----
this Agreement shall be in effect from the Effective Date until the second (2nd)
anniversary of the Co-Promotion Date, and shall thereafter renew automatically
for additional one (1) year periods unless either party provides the other party
with one (1) year's advance written notice of its non-renewal of this Agreement.
12.2 Termination for Cause.
---------------------
(a) Either party may terminate this Agreement at any time by giving notice
in writing to the other party, which shall be effective immediately,
if the other party files a petition of any type as to its bankruptcy,
is declared bankrupt, becomes insolvent, makes an assignment for the
benefit of creditors, goes into liquidation or receivership, or
otherwise loses legal control of its business.
(b) Schein may terminate this Agreement at any time by giving notice in
writing to MGI, which shall be effective ninety (90) days after
receipt thereof by MGI, if (i) MGI fails to meet at least ninety
percent (90%) of its pro rata quarterly detailing requirements as set
forth in Exhibit A for two (2) consecutive quarters or (ii) MGI meets
less than one hundred percent (100%) but more than ninety percent
(90%) of its pro rata quarterly detailing requirements as set forth in
Exhibit A for two (2) consecutive quarters and thereafter fails to
achieve such percentage of such detailing requirements for the two (2)
immediately subsequent quarters so that MGI has met its aggregate
detailing requirements for such four (4) quarter period.
(c) Either party may terminate this Agreement at any time by giving notice
in writing to the other party, if the other party is in material
breach of this Agreement and has failed to cure such breach within
thirty (30) days after its receipt of written notice of breach from
the non-breaching party therefor, in the case of breach of any
obligation to make payment as and when due hereunder, or within sixty
(60) days of the receipt of written notice of breach from the non-
breaching party in the case of any other material obligation
hereunder.
12.3 Termination for Withdrawal of the Product. This Agreement may be
-----------------------------------------
terminated at any time, without advance notice by either party, if the Product
is withdrawn from the market in the Territory pursuant to Section 6.4 above.
19
12.4 Rights and Obligations on Termination or Expiration. If this Agreement is
---------------------------------------------------
terminated or expires for any reason, the parties shall have the following
rights and obligations:
(a) Termination or expiration of this Agreement shall not release either
party from the obligation to make payment of all amounts then due and
payable;
(b) MGI shall be entitled to receive its share of Profits accruing prior
to the effective date of such termination or expiration and for the
one (1) year period thereafter, as set forth in Section 9.1 above;
provided, however, that if Schein terminates this Agreement for (i)
MGI's failure to meet at least ninety percent (90%) of its pro rata
quarterly detailing requirements as set forth in Exhibit A for two (2)
consecutive quarters or (ii) MGI's misbranding or misrepresentation of
the Product or other action or failure to act by MGI, which
misbranding, misrepresentation, action or failure to act has a
material adverse impact on Net Sales in the Field, the following shall
apply: (A) if MGI has made less than eighty percent (80%) of the
detail calls required hereunder in the twelve (12) month period
immediately preceding termination or if MGI has misbranded or
misrepresented the Product or otherwise committed an act or failed to
act, which misbranding, misrepresentation, action or failure to act
has had a material adverse impact on Net Sales in the Field, MGI shall
not be entitled to receive its share of Profits for such one (1) year
period after termination, and (B) if MGI has made less than ninety
percent (90%) but more than eighty percent (80%) of the detail calls
required during such twelve (12) month period, MGI shall be entitled
to receive its share of Profits for such one (1) year period, but such
amount shall be reduced by one percent (1%) for each percentage by
which MGI's actual detailing efforts are less than one hundred percent
(100%) of MGI's detailing requirements for such period all in
accordance with the provisions of Section 9.3;
(c) Each party's respective obligations of non-use and non-disclosure
under Article 11 shall survive as provided in Section 11.4;
(d) Each party's respective obligations of indemnification under Article
10 (as provided in Section 10.3) and rights and obligations under
Section 9.4 shall survive such termination or expiration of this
Agreement; and
(e) Upon any termination or expiration of this Agreement, MGI shall
20
transfer and assign to Schein all of MGI's right, title and interest in and
to any sales or promotional materials for the Product (including, without
limitation, any copyrights therein) upon reimbursement by Schein of MGI's
out-of-pocket expenses for such materials.
12.5 No Compensation. The parties agree that, subject to the above provisions
---------------
of Section 12.4, and without prejudice to any other remedies at law or in equity
that either party may have in respect of any breach of this Agreement, neither
party shall be entitled to or claim that it is entitled to any consequential or
incidental damages as a result of or arising out of any termination in
accordance with this Article 12, whether claimed as loss of good will, foregone
profits, lost investments, or otherwise.
ARTICLE 13 GENERAL PROVISIONS
------------------
13.1 Entire Agreement. This Agreement constitutes the entire agreement of the
----------------
parties with respect to the subject matter hereof and thereof and supersede all
the parties' previous correspondence, term sheets, understandings, agreements
and representations, oral or written, including the Confidential Disclosure
Agreement.
13.2 LIMITATION OF LIABILITY. EXCEPT AS PROVIDED IN SECTIONS 2.1, 2.2, ARTICLE
-----------------------
10 OR IN THE EVENT OF A MATERIAL BREACH BY EITHER PARTY OF THE LIMITATIONS SET
FORTH IN ARTICLE 11 ABOVE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
LOSS, EXPENSE OR DAMAGE ARISING OUT OF OR RESULTING FROM THIS AGREEMENT OR FOR
ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGES.
13.3 Assignment. Neither party shall assign or otherwise transfer its rights or
----------
obligations under this Agreement except with the prior written consent of the
other party; provided that no such consent for a transfer to an entity shall be
required and all rights and obligations arising hereunder shall inure to the
benefit of that entity if it is (a) an Affiliate of either party, (b) the
successor in interest of one party by reason of sale, merger or operation of
law, or (c) has acquired all or substantially all of the assets and business of
a party.
13.4 Amendment. This Agreement may not be modified or amended, in whole or in
---------
part, except by a written agreement signed by both parties.
13.5 Severability. If one or more of the provisions of this Agreement is
------------
subsequently declared invalid or unenforceable, this Agreement shall be treated
as though that provision were not in this Agreement, and this shall not affect
the validity or enforceability of the remaining provisions of this Agreement
(unless
21
those provisions that are invalidated or unenforceable are clearly material and
inseparable from the other provisions). The Agreement as modified shall be
applied and construed to reflect substantially the good faith intent of the
parties and to achieve the economic effects originally intended by the terms
hereof.
13.6 Notices. Except as may be otherwise provided in this Agreement, any
-------
notice, demand or request given, made or required to be made shall be in writing
and shall be effective, unless otherwise provided herein, when received after
delivery by (a) registered air mail, postage prepaid; (b) facsimile with
electronic confirmation of receipt; or (c) by express mail or a reputable
courier at the addresses set forth below or to any other address that a party
specifies in writing:
If to MGI: MGI PHARMA, INC.
300E Opus Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇, Vice President,
General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇ & Whitney LLP
Pillsbury Center South
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Schein: Schein Pharmaceutical, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President, Retail and
Specialty Products Division
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: Schein Pharmaceutical, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
13.7 Waiver. Either party's failure or delay in exercising any remedy for
------
default shall not be deemed a waiver of that or any subsequent default of that
provision or
22
of any other provision hereof.
13.8 Counterparts. This Agreement shall be executed in two (2) or more
------------
counterparts, each of which shall be deemed an original.
13.9 Governing Law. This Agreement shall be governed by, and interpreted and
-------------
construed in accordance with, the laws of the State of New York, excluding its
choice of law rules.
13.10 Force Majeure. If performance of this Agreement or of any obligation
-------------
hereunder (except payment of monies due) is prevented, restricted or interfered
with by: fire or other casualty or accident; strikes or labor disputes; war or
other violence; unavailability of or delays in procuring materials, power or
supplies; any law, order, proclamation, regulation, ordinance, demand or
requirement of any governmental or intergovernmental agency or body; or any
other act or condition whatsoever beyond the reasonable control of the party
affected thereby, the party so affected shall be excused from such performance
during the time such prevention, restriction or interference persists so long as
such party takes all actions available to it to limit the duration of such
prevention, restriction or interference.
13.11 Relationship. The parties are independent contractors and shall not
------------
be deemed to have formed any partnership, joint venture or other relationship.
Neither party shall make, or represent to any other person that it has the power
or authority to make, any financial or other commitment on behalf of the other
party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
MGI PHARMA, INC. SCHEIN PHARMACEUTICAL, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------- -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer President, Retail and Specialty
Products Division
23
EXHIBIT A
DETAILING REQUIREMENTS AND TARGETED ACCOUNTS AND PHYSICIANS
1. Annual Detailing Requirements:
*** details to the Accounts and Physicians
At least *** of the required detail calls shall be made in the primary
position to those Accounts and Physicians which the Committee
determines may have a high potential for prescribing the Product in
the Field.
2. Accounts and Physicians (including list of high potential prescribers)
[To be determined by the Committee]
3. Dedicated Cancer Centers
[To be determined by the parties]
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.
24
EXHIBIT B -- COMPLAINT HANDLING PROCEDURES
The purpose of this appendix is to establish written procedures for the
communication and processing of Product complaints received by MGI. Acting in
accord with this Agreement will facilitate compliance with Federal
Requirements as set forth in 21 CFR 211.198 (complaint files) and 21 CFR
310.305/21 CFR 314.80 (postmarketing reporting of adverse drug reactions).
A. Complaint Reporting:
1. Complaints reported directly to MGI will be forwarded to the Supervisor of
Clinical Affairs at Schein; MGI may, at its option, forward summarized
reports or reports in complete form.
2. All adverse drug experience complaints reported to MGI will be communicated
to Schein within three working days of report receipt. Schein will be
responsible for completion and submission to the Food and Drug Administration
of Form FDA-3500A where appropriate.
3. Complaint reports which may meet NDA-Field Alert Report ▇▇▇▇▇▇▇▇ [▇▇ ▇▇▇
314.81(b)(1)] will be promptly communicated to Schein, enabling FDA
notification by Schein within three working days. Schein will advise MGI of
NDA Field Alert Report submission and forward a copy of any such report to
the Complaint Coordinator (see A.1 above) of MGI.
B. Complaint Investigation:
1. Schein will investigate all complaints, including complaints associated with
Product's active or inactive ingredients, container/closure system, general
Product quality, distribution or handling.
C. Communications with Complainant:
1. Schein will be responsible for review of complaint evaluation information and
preparation of a written response.
2. In situations requiring submission of adverse drug experience reports, Schein
will be responsible for any follow-up communications which may be required in
order to facilitate timely completion and submission of FDA Form-3500A's.
D. Product Recall:
1. In carrying out a recall, both parties will fully cooperate in notifying
customers to follow instructions agreed upon by the parties.
25
EXHIBIT C
FORM OF MGI REPORT ON PROMOTIONAL ACTIVITIES
26