1
EXHIBIT 10.14
CONFIDENTIAL TREATMENT REQUESTED
Confidential Portions of This Agreement Which Have Been Redacted Are
Marked With Brackets ([***]). The Omitted Material Has Been Filed Separately
With The Securities And Exchange Commission.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is entered into as of the 29th
day of January, 1999, by and between HORIZON PHARMACEUTICAL CORPORATION, a
company incorporated under the laws of Delaware, with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Horizon"),
and AMERICAN HOME PRODUCTS CORPORATION, a company incorporated under the laws of
Delaware, with its principal place of business at Five Giralda Farms, Madison,
New Jersey 07940, USA ("AHP"). Both Horizon and AHP are referred to herein
individually as a "Party" and collectively as the "Parties".
WHEREAS, AHP has rights to certain Know-How (as hereinafter defined)
and Trademarks (as hereinafter defined) relating to the Products (as hereinafter
defined);
WHEREAS, Horizon is qualified to market pharmaceutical products in the
Territory (as hereinafter defined);
WHEREAS, Horizon desires to engage AHP's or its Affiliate's (as
hereinafter defined) facilities and services to manufacture (a) the Product for
distribution and sale by Horizon, and AHP is willing to enter into a separate
manufacturing and supply agreement contemporaneously herewith; and
WHEREAS, AHP desires to grant and transfer to Horizon and Horizon
desires to receive a license and other rights and assets under the terms and
conditions set forth herein;
NOW THEREFORE, in consideration of the foregoing premises and the
mutual promises, covenants and conditions contained in this Agreement, the
Parties agree as follows:
1. DEFINITIONS.
For the purposes of this Agreement, the capitalized terms hereunder
shall have the meanings defined below:
1.1 "AFFILIATE(S)" shall mean, in the case of either Party, any
corporation, joint venture, or other business entity which
directly or indirectly controls, is controlled by, or is under
common control with that Party. "Control", as used in this
Section 1.1, shall mean having the power to direct, or cause
the direction of, the
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management and policies of an entity, whether through
ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, for purposes of this Agreement,
the term "Affiliate" shall not include subsidiaries in which a
Party or its Affiliates owns a majority of the ordinary voting
power to elect a majority of the board of directors but is
restricted from electing such majority by contract or
otherwise, until such time as such restrictions are no longer
in effect.
1.2 "CLOSING" shall have the meaning set forth in Section 3.3
hereof.
1.3 "COMMERCIALLY REASONABLE EFFORTS" shall mean efforts and
resources normally used by a Party for a compound or product
owned by it or to which it has rights, which is of similar
market potential at a similar stage in its product life,
taking into account the competitiveness of the marketplace,
the proprietary position of the compound or product, the
regulatory structure involved, the profitability of the
applicable products, and other relevant factors.
1.4 "CUSTOMER CONTRACTS" shall mean those contracts and
outstanding bids listed in Exhibit A hereto, between AHP or
its Affiliates and certain Third Parties pursuant to which
such Third Parties, inter alia, purchase Products from AHP or
such Affiliates in the Territory.
1.5 "EFFECTIVE DATE" shall mean the date on which the Closing
occurs in accordance with Section 3.3 hereof.
1.6 "FIELD" shall mean use in humans, excluding injectable forms
of the Substance for human use.
1.7 "HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations
promulgated thereunder.
1.8 "KNOW-HOW" shall mean all proprietary technical and clinical
information, data and know-how relating to the Products,
whether or not patentable, owned as of the Effective Date or
acquired during the term of this Agreement, by AHP or its
Affiliates. Know-How shall include, without limitation, all
processes, formulas, discoveries and inventions whether
relating to biological, chemical, pharmacological,
toxicological, pharmaceutical, physical and analytical safety,
quality control and clinical data, including, without
limitation, phase IV clinical study data. Know-How shall also
include relevant medical information relating to the Products
(such as customer questions, responses thereto and adverse
drug event (ADE) history) in AHP's possession. The term
"Know-How", however, shall not include (i) any know-how,
processes, information and data which is, as of the Effective
Date or later becomes, generally available to the public or
(ii) any general manufacturing know-how not specific to the
Products.
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1.9 "LETTER OF INTENT" shall mean that certain Letter of Intent
which (i) is dated as of December 14, 1998 and (ii) relates to
the transaction contemplated by this Agreement.
1.10 "NET SALES" shall mean amounts invoiced for sales of the
Products by Horizon, its Affiliates and sublicensees to Third
Parties in the Territory, less the sum of (i) trade, quantity
and cash discounts actually allowed or paid, (ii) credits or
allowances given or made for return of previously sold
products, (iii) rebates and chargebacks specifically
identified to the sale of the Products by Horizon, its
Affiliates and sublicensees, and (iv) taxes, duties or other
governmental charges levied on or measured by the billing
amount, as adjusted for rebates and refunds. Such amounts
shall be determined from the books and records of Horizon, its
Affiliates and sublicensees which shall be maintained in
accordance with generally accepted accounting principles.
Sales of Products by and between Horizon, its Affiliates and
sublicensees are not sales to Third Parties and shall be
excluded from Net Sales calculations for all purposes.
1.11 "PRODUCT(S)" shall mean those Products listed in Exhibit B,
for use in the Field, each of which have been marketed by AHP
as of the date this Agreement was signed by the Parties.
1.12 "PRODUCT SUPPLY AGREEMENT" shall have the meaning set forth in
Section 7.1 hereof.
1.13 "REGULATORY APPROVAL" shall mean all authorizations by the
appropriate Regulatory Authorities which are required for the
manufacture (other than manufacturing facilities licenses,
approvals or authorizations) marketing, promotion, pricing and
sale of the Products in the Territory, including an approved
New Drug Application(s) for the Product(s) which are owned by
AHP or its Affiliates.
1.14 "REGULATORY AUTHORITY" shall mean any national,
supra-national, regional, state or local regulatory agency,
department, bureau, commission, council or other governmental
entity in the Territory involved in the granting of Regulatory
Approvals for the Product including, without limitation, the
United States Food and Drug Administration ("FDA").
1.15 "SUBSTANCE" shall mean the chemical substance
3-[(cyclopentylhydroxy phenyl acetyl) oxy] -1, 1-dimethyl
(pyrrolidinium bromide, otherwise known as glycopyrrolate).
1.16 "SUPPLY PRICE" shall mean the price paid by Horizon to AHP
under the Product Supply Agreement for the purchase of a unit
of Product.
1.17 "SYSTEMS TRANSFER PLAN" shall have the meaning set forth in
Section 3.2 hereof.
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1.18 "TERRITORY" shall mean the United States of America, its
territories and possessions, and the Commonwealth of Puerto
Rico.
1.19 "THIRD PARTY(IES)" shall mean any person(s) or entity(ies)
other than Horizon, AHP, or their respective Affiliates.
1.20 "TRADEMARKS" shall mean the trademarks listed on Exhibit C
hereto, which, as of the date this Agreement was signed by the
Parties, has been used by AHP in connection with the
promotion, marketing and sale of the Products.
1.21 "TRANSACTION AGREEMENTS" shall mean this Agreement and the
Product Supply Agreement.
1.22 "$" shall mean United States Dollars.
2. RIGHTS GRANTED.
2.1 LICENSES.
2.1.1 LICENSE OF KNOW-HOW. Subject to the terms and
conditions contained in this Agreement, AHP, as of
the Effective Date, hereby grants to Horizon an
exclusive license (exclusive, even as to AHP, subject
to the provisions of Section 2.3), under the Know-How
to make, have made, use, market, distribute, offer
for sale and sell the Product in the Territory.
Horizon accepts all the obligations set forth in this
Agreement and agrees to use the Know-How only in
connection with the manufacture, sale and promotion
of the Products in the Territory, only for so long as
the licenses granted under this Section 2.1.1 remain
in effect.
2.1.2 LICENSE OF TRADEMARK. Subject to the terms and
conditions contained in this Agreement, AHP, as of
the Effective Date, hereby grants to Horizon an
exclusive license (exclusive, even as to AHP), to use
the Trademark only in connection with the
manufacture, sale and promotion of the Products in
the Territory. Horizon accepts all the obligations
set forth in this Agreement and agrees to use the
Trademark in the Territory, only for so long as the
license granted under this Section 2.1.2 remains in
effect.
2.1.3 SUBLICENSES. Horizon may grant one or more Affiliates
or Third Parties sublicenses under the licenses
granted to Horizon under Sections 2.1.1 and 2.1.2 in
the Territory, provided that:
(a) Horizon obtains AHP's prior written consent,
such consent not to be unreasonably
withheld;
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(b) The parties to and the economic terms of any
such agreement shall be fully disclosed to
AHP, and the terms of such agreement shall
be consistent with all of the relevant terms
and provisions of this Agreement;
(c) To the extent that any such Third Party is
to Perform any obligation of Horizon under
this Agreement, Horizon shall remain liable
for such performance; and
(d) Horizon shall pay AHP the trademark
royalties on all Net Sales of Product by
such Affiliate or Third Party, as set forth
in Section 4.2.1.
2.2 ASSIGNMENT OF REGULATORY APPROVALS. Subject to the terms and
conditions contained in this Agreement, AHP shall assign to
Horizon at the Closing ownership of all its right, title and
interest in and to the Regulatory Approvals in the Territory.
At the Closing, all of AHP's obligations under this Agreement
with respect to such Regulatory Approvals shall immediately
terminate (with the exception of reporting, as required under
Section 6.2 hereof, to Horizon significant safety and efficacy
issues relating to Product or Substance of which AHP is aware
and which are required for NDA reporting in the United States)
and thereafter, AET shall have no further right in or to such
Regulatory Approvals in the Territory, except as provided in
Section 6.1.2 hereof Subject to the notice and cure provisions
of Section 11.2.2, if Horizon fails to pay to AHP the entire
amount of the License Fee when due, Horizon shall immediately
reassign the Regulatory Approvals to AHP.
2.3 RETAINED RIGHTS. Notwithstanding the licenses granted to
Horizon under Section 2.1, after the Closing, AHP shall retain
ownership of and all rights to (i) the current NDC numbers and
Product Codes it uses for each of the Products (subject to
Horizon's right to sell Product under Section 2.7 of the
Product Supply Agreement), (ii) the real and personal property
(including, without limitation, all equipment) and general
manufacturing know-how used by AHP in manufacturing the
Products (either before, during or after the term of this
Agreement) other than Know-How, (iii) all accounts receivable
from sales of the Products by or on behalf of AHP, and (iv)
all inventories of the Products that have not otherwise been
purchased by Horizon pursuant to Section 7.1 hereof and the
Product Supply Agreement. Additionally, AHP retains ownership
of and the right to use the Know-How (i) to manufacture
Products for Horizon pursuant to Section 7.1 hereof and the
Product Supply Agreement; (ii) to manufacture Products for
sale outside of the Territory (including, without limitation,
for sale to AHP's Affiliates or Third Parties in the
Territory, for final distribution and sale outside of the
Territory); (iii) to manufacture products containing Substance
for use or sale, both in and outside of the Territory, as
veterinary pharmaceutical products and as injectable product
for human use; and (iv) to manufacture, use and sell Products
in the Territory if this Agreement is terminated by AHP
pursuant to Section 11.2.2 hereof and all payments due to AHP
pursuant to Section 4.1.1 have not been fully paid to AHP.
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2.4 HORIZON'S COVENANT NOT TO COMPETE. Horizon agrees that, during
the term of this Agreement, Horizon and its Affiliates will
not utilize the Know-How, Regulatory Approvals or Trademarks
in any manner to make, have made, use, market, offer to sell
or sell any product containing the Substance as a
pharmaceutically active ingredient for use as a veterinary
pharmaceutical agent or for injectable dosage forms for human
use.
3. PRE-CLOSING ACTIVITIES; CLOSING.
3.1 GOVERNMENT APPROVALS. Each of Horizon and AHP shall use its
good faith efforts to eliminate any concern on the part of any
court or government authority regarding the legality of the
proposed transaction, including, if required by state
antitrust authorities, promptly taking all steps to secure
government antitrust clearance, including, without limitation,
cooperating in good faith with any government investigation
including the prompt production of documents and information
demanded by a second request for documents and of witnesses if
requested. Horizon and AHP will cooperate and use respectively
all reasonable efforts to make all registrations, filings and
applications, to give all notices and to obtain by the Closing
all governmental or other consents, transfers, approvals,
orders, qualifications, authorizations, permits and waivers,
if any, and to do all other things necessary or desirable for
the consummation of the transactions as contemplated hereby.
Neither Party shall be required, however, to divest products
or assets or materially change its business if doing so is a
condition of obtaining approval under the governmental
approvals of the transactions contemplated by this Agreement.
3.2 SYSTEMS TRANSFER. During the time period between the signing
of this Agreement by the Parties and the Closing, the Parties
will develop a mutually acceptable post Closing operation plan
substantially in the form of Exhibit D hereto (the "Systems
Transfer Plan") to transfer the processing of chargebacks,
government rebates, returns (including the processing of
customer credits), obligations under Customer Contracts,
customer service functions, and regulatory reporting functions
from AHP to Horizon and Know-How necessary to enable Horizon
to use, market, distribute and sell Product in the Territory.
Such plan shall be reduced to writing by Horizon and approved
by both Parties and shall be implemented by the Parties as
soon as practicable after the Closing.
3.3 THE CLOSING.
3.3.1 TIME AND PLACE. The Closing of the transactions
contemplated hereby shall take place at 10:00 A.M.
(local time) on January 29, 1999 at the offices of
Wyeth-Ayerst Laboratories Division of American Home
Products Corporation, St Davids, Pennsylvania, or at
such other time and place as the Parties may agree.
The Closing shall be effective as of midnight on the
Effective Date.
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[***] - CONFIDENTIAL TREATMENT REQUESTED
3.3.2 PAYMENT OF LICENSE FEE. At the Closing, Horizon shall
make the payment required by Section 4.1(i) hereof,
which payment shall be made by wire transfer in funds
immediately available to such bank account as AHP may
designate at least three (3) business days in
advance.
3.3.3 CUSTOMER INFORMATION. To the extent the following
items have not previously been provided to Horizon,
AHP, at the Closing, will deliver to Horizon
(a) complete and accurate copies of AHP's
relevant customer lists including relevant
sales data for the Products; and
(b) copies of current and pending customer sales
contracts for the Product, which contracts
shall be redacted for purposes of deleting
information that is not related to the
Product and other confidential information.
3.3.4 OTHER AGREEMENTS. At the Closing, Horizon and AHP
shall each execute and deliver to the other the
Systems Transfer Plan and the Product Supply
Agreement in the form attached hereto as Exhibit F.
3.3.5 CERTIFICATIONS OF REPRESENTATIONS AND WARRANTIES. At
the Closing, each Party shall certify to the other
that the representations and warranties set forth in
Article 10 hereof remain true and in effect as of the
day of Closing. In the event that one or more of the
representations and warranties do not remain true and
in effect as of the day of Closing, the Party
receiving such certification shall have the option to
(i) complete the Closing (and such Party shall be
required to expressly waive its rights under the
specific representation and warranty which is no
longer true and/or in effect as of the day of
closing) or (ii) terminate this Agreement as provided
in Section 11.2.1.
3.4 CONDUCT OF BUSINESS FROM SIGNING TO CLOSING. AHP covenants and
agrees that, during the period between the signing of this
Agreement and Closing, it will use its Commercially Reasonable
Efforts to conduct the business relating to Product in a
manner consistent with its prior practices.
4. CONSIDERATION.
4.1 LICENSE FEE. In partial consideration of the licenses granted
to Horizon under Section 2.1 hereof and the other rights and
assets transferred to Horizon hereunder, Horizon shall pay AHP
a nonrefundable, noncreditable license fee (the "License Fee")
as follows (i) four million dollars ($4,000,000) which shall
be due and payable at the Closing and (ii) eight calendar
quarter payments each in the
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[***] - CONFIDENTIAL TREATMENT REQUESTED
amount of two hundred twenty five thousand dollars ($225,000)
due May 1, 1999; August 1, 1999; November 1, 1999; February 1,
2000; May 1, 2000; August 1, 2000; November 1, 2000; and
February 1, 2001, for a total of one million eight hundred
thousand dollars ($1,800,000) in addition to the payment due
under Section 4.1(i) above.
4.2 ROYALTIES.
4.2.1 ROYALTY RATES. In further consideration of the
trademark license granted to Horizon under Section
2.1.2 hereof, during the term of this Agreement,
Horizon shall pay AHP royalties in the amount of
(a) [***] of the Net Sales for all Products sold
by or on behalf of Horizon, its Affiliates
and sublicensees prior to the [***]
anniversary of the Effective Date up to
annual Net Sales of $[***]; and
(b) [***] of the Net Sales for all Products sold
by or on behalf of Horizon, its Affiliates
and sublicensees prior to the [***]
anniversary of the Effective Date of Net
Sales above annual Net Sales of $[***]; and
(c) [***] of the Net Sales for all Products sold
by or on behalf of Horizon, its Affiliates
and sublicensees after the [***] anniversary
of the Effective Date.
4.2.2 MINIMUM ROYALTIES. During the period from the
Effective Date to the fifth anniversary of the
Effective Date, Horizon shall pay a minimum royalty
to AHP each calendar quarter of [***] dollars
($[***]).
4.2.3 SCOPE OF ROYALTY OBLIGATIONS. No royalties shall be
due upon the sale or other transfer among Horizon and
its Affiliates, but in such cases the royalty shall
be due and calculated upon Horizon's or its
Affiliates' Net Sales to the first independent Third
Party.
4.2.4 ROYALTIES PAID QUARTERLY. For each calendar quarter,
or part thereof, in which Horizon sells Product and
is obligated to pay to AHP royalties with respect to
such sales pursuant to this Section 4.2, Horizon
shall, for the first four calendar quarters following
the Effective Date within forty five (45) calendar
days, and for each calendar quarter thereafter within
thirty (30) calendar days, following the close of
each such calendar quarter furnish to AHP a written
report for the calendar quarter showing (i) the
number of units of each Product (by NDC number) sold
by Horizon, its Affiliates and sublicensees in the
Territory during such calendar quarter, (ii) the Net
Sales of Product (by NDC number) sold by Horizon, its
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Affiliates and sublicensees in the Territory during
such calendar month, and (iii) the royalties payable
under this Agreement for such calendar quarter.
Simultaneously with the submission of the written
report, Horizon shall pay to AHP a sum equal to the
aggregate royalty due for such calendar quarter
calculated in accordance with this Agreement
(reconciled for any previous overpayments,
underpayments or credits).
4.3 METHOD OF PAYMENT. All payments to be made by Horizon to AHP
pursuant to Section 4.2 hereof shall be made in United States
dollars by wire transfer simultaneously with the submission of
the report required under Section 4.2.4 hereof.
4.4 MAINTENANCE OF RECORDS BY HORIZON; AUDITS.
4.4.1 RECORD KEEPING BY HORIZON. Horizon and its Affiliates
shall, and shall cause its sublicensees to, keep
accurate books and accounts of record in connection
with the sale by or on behalf of Horizon, its
Affiliates and sublicensees of the Products in
sufficient detail (i) to permit accurate
determination of all figures necessary for
verification of payments required to be paid
hereunder and (ii) to verify compliance with the
provisions of Section 8.3 hereof. Horizon, its
Affiliates and sublicensees shall maintain such
records for a period of three (3) years after the end
of the year in which they were generated.
4.4.2 AUDIT BY AHP. AHP, through an independent certified
public accountant reasonably acceptable to Horizon,
shall have the right, at its own expense, to access
the books and records of Horizon, its Affiliates and
sublicensees as may be reasonably necessary (i) to
verify the accuracy of the royalty reports and all
payments made hereunder and (ii) to verify compliance
with the provisions of Section 8.3 hereof, including,
without limitation, the determination of any
additional payments that may be due to AHP pursuant
to Section 8.3 hereof. Such access shall be conducted
after reasonable prior written notice to Horizon and
during ordinary business hours and shall not be more
frequent than once per calendar year, in respect of
any calendar year ending not more than thirty (30)
months prior to the date of such notice. Upon the
expiration of the thirty (30) month period described
in the immediately preceding sentence, the
calculation of amounts payable with respect to such
time periods shall be binding and conclusive upon
AHP, and Horizon, its Affiliates and sublicensees
shall be released from any liability or
accountability with respect to payments for such time
periods. The parties agree that such independent
certified public accountant shall disclose to AHP
only whether the royalty reports are correct or
incorrect, the specific details concerning any
discrepancies in such reports, whether the provisions
of Section 8.3 hereof have been complied with and the
specific details concerning any noncompliance with
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the provisions of Section 8.3 hereof. AHP agrees to
keep in strict confidence all information learned in
the course of such audit, except when it is necessary
to reveal such information in order to enforce its
rights under this Agreement.
4.4.3 UNDERPAYMENTS/OVERPAYMENTS. If such independent
certified public accountant's report shows any
underpayment, Horizon shall remit or shall cause its
Affiliates and sublicensees to remit to AHP within
thirty (30) days after AHP's receipt of such report,
(i) the amount of such underpayment (ii) interest on
such underpayment at the prime rate quoted by Chase
Manhattan Bank N.A. from the date payment was first
due until the date of payment of such underpayment
and (iii) if such underpayment exceeds five percent
(5%) of the total amount owed for the calendar year
then being audited, the reasonable fees and expenses
of such independent certified public accountant
performing the audit. Any overpayments, less the
reasonable fees and expenses of such independent
certified public accountant, shall be fully
creditable against amounts payable in subsequent
payment periods.
4.5 TAXES AND WITHHOLDING. All taxes levied or incurred on account
of any payments from Horizon to AHP accruing under this
Agreement, by national, state or local governments, will be
assumed and paid by Horizon, except taxes levied thereon as
income to AHP and if such taxes are required to be withheld by
Horizon they will be deducted from payments due to AHP and
will be timely paid by Horizon to the proper taxing authority
for the account of AHP, a receipt or other proof of payment
therefor secured and sent to AHP as soon as practicable.
5. DISCLOSURE OF KNOW-HOW; ASSUMPTION OF OBLIGATIONS
5.1 DISCLOSURE OF KNOW-HOW. At or immediately after the Closing,
in accordance with Section 3.2, AHP shall promptly disclose to
Horizon that Know-How currently utilized by or on behalf of
AHP or its Affiliates which is necessary to enable Horizon to
use, market, distribute and sell the Product in accordance
with the Transaction Agreements.
5.2 CUSTOMER CONTRACTS. A complete and accurate list of each of
the current and pending Customer Contracts pursuant to which
AHP or an AHP Affiliate is, with respect to the current
Customer Contracts immediately prior to the date of this
Agreement, selling Products, along with other products of AHP
and its Affiliates, to Third Party buyers is attached hereto
as Exhibit A. AHP agrees that between the date of signing of
this Agreement and Closing, no new Customer Contracts shall be
executed without first consulting with Horizon. AHP further
agrees that between the date of signing of this Agreement and
Closing, no new bids shall be made without first consulting
with and obtaining the written consent of Horizon. The parties
agree that bids outstanding as of the date of the signing of
this
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Agreement shall be handled in AHP's normal course of
business. The Parties understand and agree that
because the right to sell Product is being
transferred to Horizon pursuant to this Agreement, as
of the Effective Date AHP will no longer have the
right to sell or, except as provided below, adjust
the price of Product under the Customer Contracts,
provided, however, that Horizon agrees that it will
continue to honor all of AHP's commitments made in
each such Customer Contract with respect to supplying
the Product, including, without limitation, the sale
prices as adjusted in accordance with such Customer
Contracts, for the Products throughout the term of
each such Customer Contract. After the Closing, upon
Horizon's request, AHP and Horizon will request each
Third Party to the Customer Contracts to relieve AHP
of its obligations to provide Product under each such
Customer Contract. In addition, to the extent that
AHP and Horizon are unable to obtain a release from a
Third Party of AHP's obligations to supply the
Product under such Customer Contract, then upon the
request of Horizon, AHP shall use its Commercially
Reasonable Efforts to take actions that are permitted
under the terms of such Customer Contract to minimize
the commitment for Product thereunder, including
without limitation, adjusting Product prices,
reducing the term of such Customer Contract solely
with respect to the Product and terminating AHP's
obligations with respect to Product under any such
Customer Contract, provided, however, that AHP shall
not be required to either (i) adjust prices or terms
relating to products other than Products, (ii) make
any payments to such Third Party in consideration for
making such price adjustments or modifications to the
Customer Contract or (iii) terminate any such
Customer Contract with respect to products other than
Products. AHP agrees that following the signing of
this Agreement, it will not take any action with
respect to any Customer Contract which will extend
the term of such Customer Contract for any Product or
otherwise adversely affect Horizon with respect to
any Product, without the prior written consent of
Horizon. All sales of the Product after the Closing
shall be booked by Horizon.
5.3 CHARGEBACKS. As of the Closing, Horizon will be responsible
for all customer chargebacks for Product sold in the
Territory, provided, however, that, with respect to such
Product sales, AHP, for a period of [***] after the Effective
Date, will reimburse Horizon for all qualified customer
chargebacks having Activity Dates prior to the Effective Date.
For purposes of this Section 5.3, the "Activity Date" is the
date a wholesaler ships the Product to a customer under terms
of a customer sales contract or pursuant to a purchase order
issued by such customer.
5.4 REBATES. As of the Closing, Horizon will be fully responsible
for all Federal, State and Third Party rebate programs for
Product sold in the Territory under Horizon's NDC numbers,
including all reporting activities associated with such
programs. Additionally, as of the Closing, Horizon will be
financially responsible for all Federal, State and Third Party
rebate programs for Product sold in the Territory under AHP's
label, provided, however, that with respect to such Product
sales, AHP will continue to prepare the appropriate Federal
and State rebate
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reports and process Federal and State rebates for the sale of
such Product and Horizon will reimburse AHP for (i) 50% of all
such rebates paid which have a Report Date after the Closing
and on or before March 31, 1999 and (ii) one hundred percent
(100%) of all such rebates paid which have a Report Date after
March 31, 1999. For purposes of this Section 5.4, the "Report
Date" is the date a qualified rebate invoice is issued under
applicable Federal or State Rebate Programs.
5.5 RETURNS. As of the Effective Date, Horizon will be responsible
for all returns of Product sold in the Territory, provided,
however, that AHP will reimburse Horizon for all qualified
returns of such Product sold by AHP to Third Parties prior to
the Effective Date. The Parties agree to track sales and
returns of Product by lot number to determine whether such
Product was sold to Third Parties by AHP prior to the
Effective Date or by Horizon after the Effective Date. AHP's
liability pursuant to this Section 5.5 for such returns shall
not exceed twenty five thousand dollars ($25,000.00) and all
returns in excess of such limitation shall be borne solely by
Horizon.
5.6 REIMBURSEMENT. AHP shall reimburse Horizon for chargebacks,
rebates and returns according to Sections 5.3, 5.4 and 5.5 as
follows: Horizon agrees to provide AHP with an invoice for
amounts due under Sections 5.3, 5.4 and 5.5 within thirty (30)
days after the end of each calendar month with the
documentation required to verify the same. AHP agrees to
reimburse Horizon in accordance with Sections 5.3, 5.4 and 5.5
hereof within thirty (30) days after the receipt of the
invoice and all required documentation.
6. REGULATORY MATTERS.
6.1 HORIZON RESPONSIBILITIES.
6.1.1 DISCLOSURE OF REGULATORY APPROVALS. Within thirty
(30) days after the Effective Date, AHP shall provide
Horizon with a copy of all correspondence or other
documents reasonably related to such Regulatory
Approvals. Additionally, within such thirty (30) day
period, AHP shall provide to Horizon a current list
of suppliers for Materials used in the manufacture of
Products.
6.1.2 RIGHT OF REFERENCE. Horizon irrevocably grants to AHP
the right to reference the Regulatory Approvals to
support AHP's Product related activities outside of
the Territory and to support any veterinary
pharmaceutical products containing Substance or any
injectable products for human use, which AHP
currently markets or sells or may, in the future,
market or sell. Horizon shall not amend the
Regulatory Approvals without the prior written
consent of AHP, such consent not to be unreasonably
withheld, and AHP shall respond to Horizon's request
for consent within thirty (30) days from such
request.
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6.1.3 RESPONSIBILITIES. After the Effective Date, Horizon
shall be solely responsible for conducting all
activities in connection with such Regulatory
Approvals, including, without limitation,
communicating and preparing and filing all reports
(including, without limitation, adverse drug
experience reports) with the appropriate Regulatory
Authorities in the Territory and interacting with any
Third Parties with respect to Products sold or
distributed in the Territory; provided, however, that
for up to sixty (60) days after the Effective Date,
AHP shall assist and cooperate in the transition of
such activities to Horizon. Additionally, to the
extent that Horizon is obligated, under applicable
laws and regulations, to report to the Regulatory
Authorities in the Territory, adverse drug
experiences associated with Product sold by or on
behalf of AHP outside of the Territory, AHP shall
provide Horizon with information about such adverse
drug experiences in accordance with the provisions of
Section 6.2 hereof and to the extent that, AHP is
obligated under applicable laws and regulations to
report adverse drug experiences associated with
Product sold by or on behalf of Horizon inside the
Territory, Horizon shall provide AHP with information
about such adverse drug experiences in accordance
with the provisions of Section 6.2 hereof. Upon
written request of Horizon, AHP shall provide Horizon
with all additional written information in AHP's
possession which directly relates to the Products in
the Field as AHP shall have developed and which would
be useful in supporting the Regulatory Approvals.
6.1.4 PAYMENT OF FEES. After the Effective Date, Horizon
shall pay all NDA maintenance fees and any
establishment license fees of Horizon, its Affiliates
or Third Parties which must be paid with respect to
facilities used in the manufacture of Product by or
on behalf of Horizon. Notwithstanding the foregoing,
for so long as AHP is supplying Product to Horizon in
accordance with the Product Supply Agreement, AHP
shall pay any establishment license fees which must
be paid with respect to AHP's, its Affiliate's or
subcontractor's facilities used for the manufacture
of such Product.
6.2 ADVERSE DRUG EXPERIENCE REPORTING. In order for the Parties to
comply with their respective responsibilities under this
Article 6 and otherwise relating to the reporting of adverse
drug experiences, to the extent either Party receives any
information regarding adverse drug experiences related to the
use of the Product, whether such use is within or outside of
the Territory, such Party shall promptly provide the other
Party with such information in accordance with the Adverse
Event Reporting Procedures (as may be amended from time to
time upon mutual agreement) set forth in Exhibit E.
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[***] - CONFIDENTIAL TREATMENT REQUESTED
7. SUPPLY.
7.1 SUPPLY OF PRODUCT BY AHP. For the term set forth in the
Product Supply Agreement, AHP, either directly or through one
or more subcontractors, shall manufacture and supply Products
to Horizon for sale in the Territory and Horizon shall
purchase from AHP its entire requirements of Products for sale
in the Territory, all in accordance with the terms and
conditions of the Product Supply Agreement, in the form
attached hereto as Exhibit F, to be entered into by the
Parties at the Closing.
7.2 SUPPLY OF PRODUCT BY HORIZON. Following the term set forth in
the Product Supply Agreement and thereafter:
(a) Horizon shall be responsible, at its own expense, for
manufacturing its requirements of Product, either by
itself or through a Third Party;
(b) Upon AHP's request, Horizon shall purchase from AHP
(i) reasonable quantities of AHP's residual
inventories of Products having not less than twelve
months remaining dating at the then current purchase
price and (ii) reasonable quantities of AHP's
useable, residual inventories of Product specific
Materials (as defined in the Product Supply
Agreement), including, without limitation, all labels
and other Product specific packaging materials at
AHP's fully-absorbed manufacturing costs;
(c) Upon AHP's request, Horizon would supply AHP's
requirements of Products for sale by AHPC outside the
Territory at Horizon's then fully-absorbed
manufacturing cost plus a [***] ▇▇▇▇-up, which
purchase prices shall be increased once each year by
[***].
(d) Upon AHP's request, Horizon will use its Commercially
Reasonable Efforts to facilitate discussions between
AHP and any Third Party manufacturer with which
Horizon may be in discussions regarding the
manufacture of the Product following the term of the
Product Supply Agreement.
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7.3 SUPPLY OF SUBSTANCE BY HORIZON. Following the term set forth
in the Product Supply Agreement, and thereafter:
(a) Horizon shall be responsible, at its own expense,
for manufacturing its requirements of bulk
Substance, either by itself or through a Third
Party;
(b) Upon AHP's request, Horizon shall purchase from AHP
(i) reasonable quantities of AHP's residual
inventories of the bulk Substance and (ii) reasonable
quantities of AHP's residual inventories of Substance
specific Materials (as defined in the Substance
Supply Agreement), including without limitation, all
labels and other Substance specific packaging
materials, in each case at AHP's fully-absorbed
manufacturing costs; and
(c) Upon AHP's request, Horizon will use its Commercially
Reasonable Efforts to facilitate discussions between
AHP and any Third Party manufacturer with which
Horizon may be in discussions regarding the
manufacture of the Substance following the term of
the Product Supply Agreement.
8. PROMOTION, MARKETING AND SALE OF PRODUCTS.
8.1 DILIGENCE. As of the Closing, Horizon shall be solely
responsible for and shall use its Commercially Reasonable
Efforts to promote, market, sell and distribute the Products
in the Territory.
8.2 MATERIALS AND PROMOTIONAL CLAIMS. Horizon at all times shall
be solely responsible for complying with all applicable laws
and regulations in its promotion and marketing of the
Products.
8.3 TIMING OF SALES. Horizon agrees that it and its Affiliates
shall not, by any action or act of omission cause sales of
Products that would have otherwise occurred prior to the end
of the fifth anniversary of the Effective Date, to occur after
the fifth anniversary of the Effective Date.
Such actions or acts of omission may include, without
limitation, announcing or implementing changes in the price of
Products, or delaying the filling of orders. AHP shall have
the right to audit, in accordance with Section 4.5.2 hereof
all of Horizon's records reasonably necessary to verify
compliance with this Section and if AHP determines that either
Horizon or its Affiliates has taken any such actions or
committed any such act of omission then, for purposes of the
payment of royalties under Section 4.2 hereof, the Net Sales
of Product made during the three months after the fifth
anniversary of the Effective Date shall be treated as if such
sales occurred prior to the fifth anniversary of the Effective
Date.
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9. TRADEMARKS.
9.1 USE OF TRADEMARKS. Horizon agrees to use the Trademarks only
in connection with the Products and in the manner and style
which shall have the prior written approval of AHP. Horizon
shall submit to AHP samples of all commercial materials
containing any of the Trademarks. AHP, within thirty (30) days
of its receipt of such materials, shall have the right to
reasonably comment on the usage of the Trademarks in such
materials and Horizon, at its own cost and expense, will
promptly correct any improper usage of the Trademarks. Horizon
agrees not to claim or to assert any right of ownership in or
to such Trademarks or the goodwill associated therewith and
shall take no action which may destroy, damage or impair in
any way the ownership or rights of AHP in and to such
Trademarks. Horizon shall not register anywhere in the world
in its own name, or on behalf of any other person or entity,
any trademark, trade dress, brands, labeling, designs or other
indicia of ownership identical to, or confusingly similar to,
the Trademarks, and shall not associate the Trademarks with
any articles other than the Products and shall, at the request
of AHP, do all such acts and things and execute all such
documents as AHP shall in its reasonable discretion consider
necessary or proper to register or maintain the registration
of the Trademarks in any country of the Territory. Should
usage of the Trademarks in any country vest title thereto in
Horizon, then Horizon shall at AHP's request, immediately
assign and transfer such title to AHP.
9.2 QUALITY CONTROL. Horizon will not permit the quality of
Products to deteriorate while in its possession so as to
adversely affect the goodwill associated with the Trademarks.
Horizon shall upon request of AHP, from time to time furnish
AHP, without charge, specifications and samples of Products
for quality review by AHP. AHP or an authorized representative
thereof shall have the right, at all reasonable times, to
inspect the finished goods in relation to which the Trademarks
are to be used, as part of appropriate quality control.
9.3 INFRINGEMENT OF TRADEMARKS. In the event that, either Horizon
or AHP learn that any of the Trademarks pertaining to Products
is being infringed in the Territory by any Third Party, it
shall promptly notify the other Party of such infringement.
AHP shall have the right, but not the obligation, to act to
terminate any such Third Party infringement, including,
without limitation, prosecuting a lawsuit or other legal
proceeding, at AHP's own expense. In the event that AHP takes
any such action to terminate such infringement, Horizon may,
at its sole option, take appropriate steps to join AHP in such
action and share equally in the costs thereof. If and only if
Horizon joins such action as stated in the preceding sentence,
AHP and Horizon shall share equally in any recovery which may
be received as a result of such action less the reimbursement
of each Party for the out-of-pocket expenses incurred in
taking, joining and prosecuting such action. Notwithstanding
the foregoing, Horizon shall fully cooperate with AHP in any
action AHP takes to terminate such infringement and, to the
extent AHP recovers
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damages from such Third Party, through settlement or
otherwise, shall be reimbursed by AHP for all reasonable
expenses incurred in connection therewith. If AHP fails to
take any action within sixty (60) days after Horizon's
request, Horizon shall have the right to act as it sees fit to
terminate the infringement, including without limitation,
prosecuting a lawsuit or other legal proceeding, at Horizon's
own expense. Horizon may deduct its costs and expenses for
such action from trademark royalties accruing under Section
4.2 after the date of filing of such action. In the event that
Horizon takes any such action to terminate such infringement,
AHP may, at its sole option, take appropriate steps to join
Horizon in such action and share equally in the costs thereof.
If and only if AHP joins such action as stated in the
preceding sentence, AHP and Horizon shall share equally in any
recovery which may be received as a result of such action less
the reimbursement of each Party for the out-of-pocket expenses
incurred in taking, joining and prosecuting such action.
Notwithstanding the foregoing, AHP shall fully cooperate with
Horizon in any action Horizon takes to terminate such
infringement, including without limitation, agreeing to be
joined as party plaintiff and approving any reasonable
settlement agreement achieved by Horizon, and to the extent
Horizon receives damages from such Third Party, through
settlement or otherwise, shall be reimbursed by Horizon for
all reasonable expenses incurred in connection therewith and
deductions from trademark royalties pursuant to this Section
9.3.
10. REPRESENTATIONS AND WARRANTIES.
10.1 REPRESENTATIONS AND WARRANTIES OF EACH PARTY. As of the
signing of this Agreement, each of Horizon and AHP hereby
represents, warrants and covenants to the other Party hereto
as follows:
(a) it is a corporation or entity duly organized and
validly existing under the laws of the state or other
jurisdiction of incorporation or formation;
(b) the execution, delivery and performance of this
Agreement by such Party has been duly authorized by
all requisite corporate action and do not require any
shareholder action or approval;
(c) it has the power and authority to execute and deliver
this Agreement and to perform its obligations
hereunder;
(d) 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 (i) a
loan agreement, guaranty, financing agreement,
agreement affecting a product or other agreement or
instrument binding or affecting it or its property;
(ii) the provisions of its charter or operative
documents or bylaws; or (iii) any order, writ,
injunction or decree of any court or governmental
authority entered against it or by which any of its
property is bound; and
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(e) it shall at all times comply with all applicable
material laws and regulations relating to its
activities under this Agreement.
10.2 REPRESENTATIONS AND WARRANTIES OF AHP. As of the signing of
this Agreement, AHP hereby represents and warrants to Horizon
as follows:
(a) Except as listed in Exhibit G, there are no (i)
pending or, to AHP's knowledge, threatened product
liability, breach of warranty or other claims,
actions, arbitrations, administrative or other
proceedings regarding the Product or the Trademarks,
to which AHP is a party in the Territory; or (ii)
pending or, to AHP's knowledge, overtly threatened
claim against AHP asserting that any of the Know-How
infringes or violates the rights of Third Parties.
(b) AHP is the sole owner of the Trademarks, the Know-How
and the Regulatory Approvals for the Product in the
Territory and AHP has not sublicensed, pledged,
encumbered, assigned, transferred or granted any
rights or interest therein to any Third Party
inconsistent with the rights granted to Horizon under
the Transaction Agreements, and prior to the Closing,
AHP will enter into no such agreement with any
Affiliate or Third Party.
(c) AHP has furnished Horizon with access to a complete
copy of the Regulatory Approvals, including all
material amendments and supplements thereto. To the
best of AHP's knowledge, the Regulatory Approvals are
in good standing and nothing has come to the
attention of AHP which has, or reasonably should
have, led AHP to believe that the Regulatory
Approvals are not in good standing. To the best of
AHP's knowledge, there is no pending or overtly
threatened action by the FDA which will have a
material adverse effect on the Regulatory Approvals.
(d) AHP represents and warrants that the list of Customer
Contracts provided herein is accurate and complete
with respect to current Customer Contracts and is, to
the best of AHP's knowledge, accurate and complete
with respect to pending Customer Contracts.
(e) AHP has not given any notice to any Third Parties
asserting misappropriation of trade secrets relating
to the Know-How.
(f) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT OR IN THE PRODUCT SUPPLY AGREEMENT, AHP
MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, EITHER
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE PRODUCTS OR
THE TRADEMARKS OR HORIZON'S USE THEREOF.
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10.3 REPRESENTATIONS AND WARRANTIES OF HORIZON. As of the signing
of this Agreement, Horizon represents and warrants to AHP that
it has properly determined that the net present value of the
transactions contemplated by this Agreement is less than
fifteen million dollars ($15,000,000) and no HSR filing is
required in connection with the transactions contemplated
hereby.
10.4 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 which
drafted such terms and provisions.
11. TERM AND TERMINATION.
11.1 TERM. This Agreement shall be effective as of the Effective
Date and, unless terminated earlier by mutual written
agreement of the Parties or pursuant to this Article 11, shall
remain in full force and effect for so long as Horizon sells
Product in the Territory (the "Term"). Notwithstanding the
foregoing, upon the payment of all amounts due pursuant to
Section 4.1 hereof the Know-How license granted to Horizon
pursuant to Section 2.1.1 hereof shall become a fully paid-up,
perpetual exclusive (exclusive except as to veterinary
pharmaceutical products and injectable human uses by AHP and
its Affiliates neither of which shall have the right to
sublicense) license.
11.2 TERMINATION.
11.2.1 CERTIFICATIONS OF REPRESENTATION AND WARRANTIES.
Either Party may terminate this Agreement if, in
accordance with Section 3.3.5 hereof, the other Party
certifies that one or more of its representations and
warranties set forth in Article 10 hereof do not
remain true and in effect as of the day of Closing.
11.2.2 TERMINATION FOR CAUSE BOTH PARTIES. This Agreement
may be terminated by written notice by either Party
(subject to the provisions of Section 11.2.3) at any
time during the Term of this Agreement:
(a) for material breach by the other Party,
which breach remains uncured for thirty (30)
days in the case of nonpayment of any amount
due and ninety (90) days for all other
breaches, each measured from the date
written notice of such breach is given to
the breaching Party, or, if such breach is
not susceptible of cure within such ninety
(90) day period and the breaching Party uses
diligent good faith efforts to cure such
breach, for one hundred eighty (180) days
after written notice to the breaching Party;
or
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(b) upon the filing or institution of
bankruptcy, reorganization, liquidation or
receivership proceedings, or upon an
assignment of a substantial portion of the
assets for the benefit of creditors by the
other Party, or in the event a receiver or
custodian is appointed for such Party's
business, or if a substantial portion of
such Party's business is subject to
attachment or similar process; provided,
however, that in the case of any involuntary
bankruptcy proceeding such right to
terminate shall only become effective if the
proceeding is not dismissed within ninety
(90) days after the filing thereof.
11.2.3 EFFECT OF TERMINATION FOR CAUSE ON LICENSE.
(a) In the event that Horizon breaches this
Agreement pursuant to Section 11.2.2 then it
shall be AHP's sole option:
(i) to terminate this Agreement, in
which case all rights to the
Know-How, the Regulatory Approvals
and the Trademarks shall revert to
AHP (unless all payments under
Section 4.1 have been fully paid to
AHP) and Horizon shall remain
obligated to make all payments under
Sections 4.1 and 4.2 which have
accrued as of the date of
termination; or
(ii) to accelerate the payments required
under Section 4.1 so that they shall
become immediately due and payable,
in which case this Agreement shall
remain in full force and effect, and
Horizon shall remain obligated to
make all payments required under
Sections 4.1 and 4.2; or
(iii) to pursue all legal and equitable
remedies available to it, in which
case the Agreement shall remain in
full force and effect and Horizon
shall remain obligated to make all
payments required under Sections 4.1
and 4.2.
(b) In the event that AHP breaches this
Agreement pursuant to Section 11.2.2 then it
shall be Horizon's sole option:
(i) to terminate this Agreement, in
which case all rights to the
Know-How and the Regulatory
Approvals shall be vested in
Horizon (if all payments under
Section 4.1 have been fully paid to
AHP) and the license under the
Trademarks shall be deemed to be
fully paid-up and Horizon shall
remain obligated to make only those
payments under Section 4.2 which
have accrued as of the date of
termination; or
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(ii) to pursue all legal and equitable
remedies available to it, in which
case the Agreement shall remain in
full force and effect and Horizon
shall remain obligated to make all
payments required under Sections 4.1
and 4.2.
11.3 SURVIVAL. The provisions of Articles 1, 2, 6, 12 and 13 and
Sections 4.4, 4.5, 11.2.3, 14.2.3, 14.6, 14.7, 14.8, 14.9, and
14.10 shall survive expiration or any earlier termination of
this Agreement. Any payments that become due and payable prior
to expiration, which have not been paid, shall survive
expiration or any earlier termination of this Agreement.
12. INDEMNIFICATION.
12.1 NOTICE AND ASSISTANCE. Each Party shall promptly notify the
other, in writing, if it learns of any litigation, claim,
administrative or criminal proceedings (collectively
"Actions"), related to the Product, the Substance, the
Trademark, or any Regulatory Approval, asserted or threatened
against such Party (the "Defending Party"). With respect to
any Actions relating to the Product, the Substance, the
Trademark or any Regulatory Approval asserted against a
Defending Party, the other Party shall, at no out-of-pocket
expense to it except as otherwise provided in this Article 12,
reasonably cooperate with and provide such reasonable
assistance to such Defending Party as such Defending Party may
reasonably request in connection with its defense against such
Actions. Such reasonable assistance may include, without
limitation, providing copies of all relevant correspondence
and other materials that the Defending Party may reasonably
request, provided, however, that any Confidential Information
so provided shall be treated in accordance with the provisions
of Article 13 hereof.
12.2 INDEMNIFICATION BY AHP. AHP shall indemnify, defend and hold
harmless Horizon, its Affiliates or its permitted
sublicensees, and each of its and their respective employees,
officers, directors and agents (each, a "Horizon Indemnified
Party") from and against any and all liability, loss, damage,
cost, and expense (including reasonable attorneys' fees)
(collectively, a "Liability") which the Horizon Indemnified
Party may incur, suffer or be required to pay resulting from
or arising in connection with (i) the breach by AHP of any
representation or warranty contained in this Agreement, (ii)
the manufacture, promotion, distribution, testing, use,
marketing, sale or other disposition of the Substance or
Products by AHP outside of the Territory and Field, whether
before or after the Effective Date; (iii) the manufacture,
promotion, distribution, testing, use, marketing, sale or
other disposition of the Substance or Products by AHP within
the Territory and Field before the Effective Date; or (iv) the
use of the Trademarks by AHP or its Affiliates within or
outside the Territory, whether before or after the Effective
Date. Notwithstanding the foregoing, AHP shall have no
obligation under this Agreement to indemnify, defend or hold
harmless any
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Horizon Indemnified Party with respect to claims, demands,
costs or judgments which result from willful misconduct or
negligent acts or omissions of Horizon, its Affiliates, its
permitted sublicensees, or any of their respective employees,
officers, directors or agents.
12.3 INDEMNIFICATION BY HORIZON. Horizon shall indemnify, defend
and hold harmless AHP and its Affiliates, and each of its and
their respective employees, officers, directors and agents
(each, an "AHP Indemnified Party") from and against any
Liability which the AHP Indemnified Party may incur, suffer or
be required to pay resulting from or arising in connection
with (i) the breach by Horizon of any representation or
warranty contained in this Agreement; (ii) the manufacture
(but only upon the commencement of Horizon's manufacturing the
Products pursuant to the Product Supply Agreement), promotion,
distribution, testing, use, marketing, sale or other
disposition of Products by Horizon, its Affiliates, its
permitted sublicensees or their respective subcontractors; or
(iii) the use of the Trademark by Horizon, its Affiliates, its
permitted sublicensees or their respective subcontractors.
Notwithstanding the foregoing, Horizon shall have no
obligation under this Agreement to indemnify, defend, or hold
harmless any AHP Indemnified Party with respect to claims,
demands, costs or judgments which result from willful
misconduct or negligent acts or omissions of AHP, its
Affiliates, its permitted sublicensees or any of their
respective employees, officers, directors or agents.
12.4 CONDITIONS TO INDEMNIFICATION. The obligations of the
indemnifying Party under Sections 12.2 and 12.3 are
conditioned upon the delivery of written notice to the
indemnifying Party of any potential Liability promptly after
the indemnified Party becomes aware of such potential
Liability. The indemnifying Party shall have the right to
assume the defense of any suit or claim related to the
Liability if it has assumed responsibility for the suit or
claim in writing; however, if in the reasonable judgment of
the indemnified Party, such suit or claim involves an issue or
matter which could have a materially adverse effect on the
business operations or assets of the indemnified Party, the
indemnified Party may waive its rights to indemnity under this
Agreement and control the defense or settlement thereof, but
in no event shall any such waiver be construed as a waiver of
any indemnification rights such Party may have at law or in
equity. If the indemnifying Party defends the suit or claim,
the indemnified Party may participate in (but not control) the
defense thereof at its sole cost and expense.
12.5 SETTLEMENTS. Neither Party may settle a claim or action
related to a Liability without the consent of the other Party,
if such settlement would impose any monetary obligation on the
other Party or require the other Party to submit to an
injunction or otherwise limit the other Party's rights under
this Agreement or otherwise. Except as otherwise expressly set
forth in this Article 12, any payment made by a Party to
settle any such claim or action shall be at its own cost and
expense.
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12.6 LIMITATION OF LIABILITY. With respect to any claim by one
Party against the other arising out of the performance or
failure of performance of the other Party under this
Agreement, the Parties expressly agree that the liability of
such Party to the other Party for such breach shall be limited
under this Agreement or otherwise at law or equity to direct
damages only and in no event shall a Party be liable for
punitive, exemplary or consequential damages. The limitations
set forth in this Section 12.6 shall not apply with respect to
the obligations of either Party to indemnify the other under
Sections 12.2 or 12.3 hereof in connection with a Liability to
a Third Party.
12.7 INSURANCE. Horizon shall obtain and maintain at all times
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 Section 12.3, with
limits of not less than five million dollars ($5,000,000) per
occurrence and ten million dollars ($10,000,000) in the
aggregate. Horizon shall provide AHP with a Certificate of
Insurance evidencing this coverage within thirty (30) days
after the Closing. Such insurance policy shall name AHP as an
additional insured and Horizon shall use its Commercially
Reasonable Efforts to ensure that such insurance policy
contains a provision requiring ten (10) day advance
notification to AHP in the event of its cancellation or
termination. AHP shall maintain self-insurance and/or obtain
insurance from a Third Party insurer in amounts sufficient to
cover its obligations under Section 12.2. Upon Horizon's
written request, AHP shall provide Horizon with evidence of
such insurance coverage.
13. CONFIDENTIALITY.
13.1 NONDISCLOSURE OBLIGATION. Each of Horizon and AHP shall use
only in accordance with this Agreement and shall not disclose
to any Third Party any information including, without
limitation, Know-How, received by it from the other Party (the
"Information"), without the prior written consent of the other
Party. The foregoing obligations shall survive the expiration
or earlier termination of the last of the Transaction
Agreements to so expire or to be so terminated for a period of
five (5) years. These obligations shall not apply to
Information that:
(i) is known by the receiving Party at the time
of its receipt, and not through a prior
disclosure by the disclosing Party, as
documented by business records;
(ii) is at the time of disclosure or thereafter
becomes published or otherwise part of the
public domain without breach of this
Agreement by the receiving Party;
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(iii) is subsequently disclosed to the receiving
Party by a Third Party who has the right to
make such disclosure;
(iv) is developed by the receiving Party
independently of the Information received
from the disclosing Party and such
independent development can be documented by
the receiving Party, or
(v) is required by law, regulation, rule, act or
order of any governmental authority or
agency to be disclosed by a Party, provided
that notice is promptly delivered to the
other Party in order to provide an
opportunity to seek a protective order or
other similar order with respect to such
Information and thereafter the disclosing
Party discloses to the requesting entity
only the minimum Information required to be
disclosed in order to comply with the
request, whether or not a protective order
or other similar order is obtained by the
other Party.
13.2 PERMITTED DISCLOSURES. Information may be disclosed to
employees, agents, consultants, sublicensees or suppliers of
the recipient Party or its Affiliates, but only to the extent
required to accomplish the purposes of this Agreement and only
if the recipient Party obtains prior agreement from its
employees, agents, consultants, sublicensees, suppliers or
Third Party manufacturers to whom disclosure is to be made to
hold in confidence and not make use of such Information for
any purpose other than those permitted by this Agreement. Each
Party will use at least the same standard of care as it uses
to protect proprietary or confidential information of its own
to ensure that such employees, agents, consultants,
sublicensees, suppliers or Third Party manufacturers do not
disclose or make any unauthorized use of the Information.
13.3 DISCLOSURE OF AGREEMENT. Neither Horizon nor AHP shall release
to any Third Party or publish in any way any non-public
information with respect to the terms of this Agreement or
concerning their cooperation without the prior written consent
of the other, which consent will not be unreasonably withheld
or delayed, provided, however, that either Party may disclose
the terms of this Agreement to the extent required to comply
with applicable laws, including, without limitation the rules
and regulations promulgated by the United States Securities
and Exchange Commission, provided, however, that prior to
making any such disclosure, the Party intending to so disclose
the terms of this Agreement shall (i) provide the
nondisclosing Party with written notice of the proposed
disclosure and a opportunity to review and comment on the
intended disclosure which is reasonable under the
circumstances and (ii) shall seek confidential treatment for
as much of the disclosure as is reasonable under the
circumstances, including, without limitation, seeking
confidential treatment of any information as may be requested
by the other Party. Notwithstanding any other provision of
this
-24-
25
Agreement, each Party may disclose the terms of this Agreement
to lenders, investment bankers and other financial
institutions of its choice solely for purposes of financing
the business operations of such Party either (i) upon the
written consent of the other Party or (ii) if the disclosing
Party uses reasonable efforts to obtain a signed
confidentiality agreement with such financial institution with
respect to such information on terms substantially similar to
those contained in this Article 13.
13.4 PUBLICITY. Subject to Section 13.3, all publicity, press
releases and other announcements relating to this Agreement or
the transactions contemplated hereby shall be reviewed in
advance by, and shall be subject to the approval of, both
Parties.
14. MISCELLANEOUS.
14.1 FORCE MAJEURE. Neither Party shall be liable to the other for
delay or failure in the performance of the obligations on its
part contained in this Agreement if and to the extent that
such failure or delay is due to circumstances beyond its
control (including, without limitation, AHP's inability to
obtain, from a Third Party, sufficient quantities of the raw
materials needed for the manufacture of Substance to meet its
manufacturing obligations under Article 7) which it could not
have avoided by the exercise of reasonable diligence. It shall
notify the other Party promptly should such circumstances
arise, giving an indication of the likely extent and duration
thereof and shall use all Commercially Reasonable Efforts to
resume performance of its obligations as soon as practicable.
14.2 ASSIGNMENT.
14.2.1 ASSIGNMENT BY HORIZON. Horizon may assign any or all
of its rights or obligations under this Agreement in
the Territory to any of its Affiliates, for so long
as they remain Affiliates. In addition, Horizon may
assign any or all of its rights or obligations under
this Agreement in the Territory in conjunction with a
merger or acquisition of Horizon or its Affiliates.
Horizon may not otherwise assign any of its rights or
obligations under this Agreement without AHP's prior
written consent, not to be unreasonably withheld. AHP
shall respond to such requests by Horizon for
assignment within thirty (30) days from such request.
Any permitted assignment shall not relieve Horizon of
its responsibilities for performance of its
obligations under this Agreement. Notwithstanding the
foregoing, Horizon may not assign or otherwise
transfer the Regulatory Approvals to any Third Party
until the later to occur of (i) all payments are made
under Article 4.1, and (ii) termination of the
Product Supply Agreement.
14.2.2 ASSIGNMENT BY AHP. AHP may assign any or all of its
rights or obligations under this Agreement to any of
its Affiliates or to any Third
-25-
26
Party, provided, however, that AHP may assign all or
part of its obligations to a Third Party only after
receiving Horizon's prior written consent, which
consent shall not be unreasonably withheld or
delayed; provided, further, that such assignment
shall not relieve AHP of its responsibilities for
performance of its obligations under this Agreement.
Notwithstanding the foregoing, Horizon's consent
shall not be required for any assignment made by AHP
in connection with a merger or similar reorganization
of AHP or its parent company or the sale of all or
substantially all of AHP's or AHP's parent company's
pharmaceutical assets.
14.2.3 BINDING NATURE OF ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the
successors and permitted assigns of the Parties. Any
assignment not in accordance with this Article 14
shall be void.
14.3 NO WAIVER. The failure of either Party to require performance
by the other Party of any of that other Party's obligations
hereunder shall in no manner affect the right of such Party to
enforce the same at a later time. No waiver by any Party
hereto of any condition, or of the breach of any provision,
term, representation or warranty contained in this Agreement
whether by conduct or otherwise, in any one or more instances,
shall be deemed to be or construed as a further or continuing
waiver of any such condition or breach, or of any other
condition or of the breach of any other provision, term,
representation or warranty hereof.
14.4 SEVERABILITY. If a court or other tribunal of competent
jurisdiction should hold any term or provision of this
Agreement to be excessive, or invalid, void or unenforceable,
the offending term or provision shall be deleted or revised to
the extent necessary to be enforceable, and, if possible,
replaced by a term or provision which, so far as practicable
achieves the legitimate aims of the Parties.
14.5 RELATIONSHIP BETWEEN THE PARTIES. 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. Neither Party shall have
any express or implied power to enter into any contracts or
commitments or to incur any liabilities in the name of, or on
behalf of, the other Party, or to bind the other Party in any
respect whatsoever.
14.6 CORRESPONDENCE AND NOTICES.
14.6.1 ORDINARY NOTICES. Correspondence, reports,
documentation, and any other communication in writing
between the Parties in the course of ordinary
implementation of this Agreement shall be delivered
by hand,
-26-
27
sent by facsimile, overnight courier or by airmail to
the employee or representative of the other Party who
is designated by such other Party to receive such
written communication.
14.6.2 EXTRAORDINARY NOTICES. Extraordinary notices and
communications (including, without limitation,
notices of termination, force majeure, material
breach, change of address) shall be in writing and
sent by prepaid registered or certified air mail, or
by facsimile confirmed by prepaid registered or
certified air mail letter, and shall be deemed to
have been properly served to the addressee upon
receipt of such written communication.
14.6.3 ADDRESSES. In the case of Horizon, the proper address
for communications and for all payments shall be:
Horizon Pharmaceutical Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and it the case of AHP, the proper address for
communications and for all payments shall be:
Wyeth-Ayerst Laboratories
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Senior Vice President, Global
Business Development
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
American Home Products Corporation
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Senior Vice President and General
Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
14.7 CHOICE OF LAW. This Agreement is subject to and governed by
the laws of the State of Delaware, excluding its conflict of
laws provisions.
14.8 ENTIRE AGREEMENT AMENDMENT. This Agreement, together with the
other Transaction Agreements and the Confidential Disclosure
Agreement between AHP and ▇.▇. Financial Enterprises Inc. (an
equity holder in Horizon) dated April 28, 1998, and all the
covenants, promises, agreements, warranties, representations,
-27-
28
conditions and understandings contained herein and therein
sets forth the complete, full and exclusive agreement between
the Parties and supersedes and terminates all prior and
contemporaneous agreements and understandings between the
Parties, whether oral or in writing. There are no covenants,
promises, agreements, warranties, representations, conditions
or understandings, either oral or written, between the Parties
other than as are set forth in the Transaction Agreements. No
subsequent alteration, amendment, change, waiver or addition
to this Agreement shall be binding upon the Parties unless
reduced to writing and signed by an authorized officer of each
Party. No understanding, agreement, representation or promise,
not explicitly set forth herein, has been relied on by either
Party in deciding to execute this Agreement.
14.9 HEADINGS. The headings and captions used in this Agreement are
solely for the convenience of reference and shall not affect
its interpretation.
14.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be an original and all of
which shall constitute together the same document.
14.11 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all other acts, as
may be necessary or appropriate in order to carry out the
purposes and intent of this Agreement including, without
limitation, any filings with any antitrust agency which may be
required.
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized representatives of the Parties as of the date set forth below.
AMERICAN HOME PRODUCTS HORIZON PHARMACEUTICALS, INC.
CORPORATION
----------------------------- --------------------------------
Name: Name:
Title: Title:
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29
EXHIBIT A
CUSTOMER CONTRACTS
The Customer Contracts are listed on the following two pages.
30
[***] - CONFIDENTIAL TREATMENT REQUESTED
WYETH-AYERST LABORATORIES
BID ANALYSIS SYSTEM
CONTRACT PRODUCT PRICES BY NDC - ACTIVE
-----------------------------------------------------------------------------------------------------------------------------------
NDC: ▇▇▇▇▇-▇▇▇▇-▇▇ ROBINUL TABLETS PKG SIZE: [***]
-----------------------------------------------------------------------------------------------------------------------------------
CTLG PRICE: [***] FACTOR COST: [***] FSS PRICE: [***]
-----------------------------------------------------------------------------------------------------------------------------------
CURRENT BEST: [***] CURRENT NOMINALS: [***] FUTURE BEST: [***] FUTURE NOMINAL: [***]
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
GRP/CUST GRP/CUSTOMER NAME CITY STATE CLS CONTRACT START DATE END DATE SALES PRICE DISC
-----------------------------------------------------------------------------------------------------------------------------------
01 - NON-GUARANTEED TYPE
-----------------------------------------------------------------------------------------------------------------------------------
000000489 PUERTO RICO HOSP GROUP SAN ▇▇▇▇ PR 0000046178 11/01/1997 11/30/1998 [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
791000010 ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇ ▇▇ 0000046045 11/01/1997 11/30/1998 [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
02 - GUARANTEED
-----------------------------------------------------------------------------------------------------------------------------------
000000344 PHS BETHESDA MD 0000058826 10/01/1998 12/31/1998 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
000000340 VETERANS STATE HOME HINES IL 0000046309 01/01/1998 11/30/1998 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
000000355 PHS FEDERAL GOVT ACCTS WASHINGTON DC 0000046308 01/01/1998 11/30/1998 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
000000406 MILITARY RADNOR PA ▇▇▇▇▇▇▇▇▇▇ 01/01/1998 11/30/1998 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
000000310 VA PRIME VENDOR RADNOR PA 00000046196 01/01/1998 11/30/1998 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
000000164 ISD (INTERNAL SVCS DEPT) LOS ANGELES CA ▇▇▇▇▇▇▇▇▇▇ 02/01/1998 01/31/1999 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
000000195 ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ 0000037145 09/15/1997 09/30/2000 [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
0000002003 STATE OF ARKANSAS LITTLE ROCK AR 0000043007 01/01/1998 12/31/1998 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
0000000027 MINNESOTA MULTI-STATE ST. ▇▇▇▇ MN 0000046643 05/01/1998 04/30/1999 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
0000002046 STATE OF SOUTH CAROLINA COLUMBIA SC 0000046472 05/01/1998 04/30/1999
-----------------------------------------------------------------------------------------------------------------------------------
0000009585 NEW PUERTO RICO HOSP ST. DAVIDS PA 0000047764 04/30/1998 04/27/1999 [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ HEALTHCARE DALLAS TX 0000022284 09/01/1998 08/31/1999 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
000000309 HEALTH SERVS CORP AMER BRIDGETON MO 0000024878 10/01/1998 09/30/1999 [***] [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
0000002004 STATE OF CALIFORNIA SACRAMENTO CA ▇▇▇▇▇▇▇▇▇▇ 10/05/1998 09/30/2000 [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
0000002048 STATE OF TENNESSEE NASHVILLE TN 0000060276 10/22/1998 07/31/1999 [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
04 - GUARANTEED W/OUT-CLAUSE
-----------------------------------------------------------------------------------------------------------------------------------
0000009341 MICH STATE UNIV AFFIL EAST LANSING MI 0000046646 02/01/98 01/31/99 [***] [***]
-----------------------------------------------------------------------------------------------------------------------------------
31
05 - GUAR W/PRC ESC & OUT CLS
-------------------------------------------------------------------------------------------------------------------------------
GRP/CUST GRP/CUSTOMER NAME CITY STATE CLS CONTRACT START DATE END DATE SALES PRICE DISC %
-------------------------------------------------------------------------------------------------------------------------------
000000407 ▇▇▇▇ HEALTHCARE HOUSTON TX 0000031263 07/01/1998 03/31/2000 [***] [***] [***]
-------------------------------------------------------------------------------------------------------------------------------
000000418 PACT (C/MEDMGNT) PLYMOUTH MN 0000046216 07/01/1998 03/31/2000 [***] [***]
-------------------------------------------------------------------------------------------------------------------------------
32
EXHIBIT B
PRODUCTS
Country NDC No. Strength Dosage Form Package Size
------- ------- -------- ----------- ------------
USA 7824-63 1 mg tablets bottles of 100
USA 7840-63 2 mg tablets bottles of 100
33
EXHIBIT C
TRADEMARKS
Country Trademark Registration No. Renewal Date
------- --------- ---------------- ------------
United States Robinul 728,458 03/13/2002
34
EXHIBIT D
SYSTEMS TRANSFER PLAN
Pursuant to Section 3.2 of that certain License Agreement entered into
by and between Horizon Pharmaceutical Corporation ("Horizon") and American Home
Products Corporation, acting through its Wyeth-Ayerst Laboratories Division
("AHP") on January 29, 1999 (the "License Agreement"), Horizon and AHP, by
signing below, each agree that the documents identified below and attached
hereto constitute the Systems Transfer Plan. Horizon and AHP each further agree
that to the extent any of the attached documents are inconsistent with the
License Agreement or the Product Supply Agreement which also was entered into by
Horizon and AHP on January 29, 1999, the terms and conditions of the License
Agreement or the Product Supply Agreement, as applicable, shall control. The
Parties recognize that this document serves as a guideline for the transition of
responsibilities for the Product from AHP to Horizon and that, to the extent
that this Systems Transfer Plan imposes timelines which are not expressly stated
within the License Agreement or the Product Supply Agreement, the failure to
strictly adhere to any such timelines set forth in this Systems Transfer Plan
shall not constitute a breach of either the License Agreement or the Product
Supply Agreement
Attachments
1. Initial inventory shipment; Outstanding sales orders; Initial
forecast; On-going purchase orders
2. Product/Quality Complaints
3. Labeling, Product Inserts, Tooling
4. Customer Contracts
5. Rebates
6. Manufacturing Plant Services
7. Regulatory
8. Returns
9. Chargebacks
HORIZON PHARMACEUTICAL AMERICAN HOME PRODUCTS
CORPORATION CORPORATION acting through its
Wyeth-Ayerst Laboratories Division
By: By:
---------------------------- -----------------------------
Name: Name:
-------------------------- ---------------------------
Title: Title:
------------------------- --------------------------
Date: Date:
-------------------------- ---------------------------
35
EXHIBIT E
ADVERSE DRUG EVENT REPORTING PROCEDURE
The Parties hereby agree that the following terms will govern
disclosures of each Party to the other with respect to adverse event reporting
relating to the Product or Substance as clinically tested or marketed by or on
behalf of either Party.
1. Definitions.
1.1 An Adverse Drug Experience ("ADE") is defined as:
a) any experience which is adverse, including what are
commonly described as adverse or undesirable
experiences, adverse events, adverse reactions, side
effects, or death due to any cause associated with,
or observed in conjunction with the use of a drug,
biological product, or device in humans, whether or
not considered related to the use of that product:
- occurring in the course of the use of a
drug, biological product or device,
- associated with, or observed in conjunction
with product overdose, whether accidental or
intentional
- associated with, or observed in conjunction
with product abuse, and/or
- associated with, or observed in conjunction
with product withdrawal.
b) Any significant failure of expected pharmacological
or biologic therapeutical action (with the exception
of in clinical trials).
1.2 Serious or Non-Serious is defined as:
a) A Serious ADE is any adverse drug experience
occurring at any dose that results in any of the
following outcomes: death, a life-threatening adverse
drug experience, inpatient hospitalization or
prolongation of existing hospitalization, a
persistent or significant disability/incapacity, or a
congenital anomaly/birth defect. Other important
medical events that may not result in death, be
life-threatening, or require hospitalization may be
considered a serious adverse drug experience when,
based upon appropriate medical judgment, they may
jeopardize the patient or subject and may require
medical or surgical intervention to prevent one of
the outcomes listed in this definition. Examples of
such medical events
36
include allergic bronchospasm requiring intensive
treatment in an emergency room or at home, blood
dyscrasias or convulsions that do not result in
inpatient hospitalization, or the development of drug
dependency or drug abuse.
b) A Non-Serious ADE is any ADE which does not meet the
criteria for a serious ADE.
1.3 Life-threatening adverse drug experience is defined as any
adverse drug experience that places the patient, in the view
of the initial reporter, at immediate risk of death from the
adverse drug experience as it occurred, i.e., it does not
include an adverse drug experience that, had it occurred in a
more severe form, might have caused death.
1.4 Disability is defined as a substantial disruption of a
person's ability to conduct normal life functions.
1.5 An Unexpected ADE is defined as any ADE that is not listed in
the current labeling for the drug product. This includes
events that may be symptomatically and pathophysiologically
related to an event listed in the labeling, but differ from
the event because of greater severity or specificity.
1.6 Associated with or related to the use of the drug is defined
as: A reasonable possibility exists that the ADE was caused by
the drug.
1.7 NDA Holder is defined as: An "Applicant" as defined in 21 CFR
Part 314.3(b), for regulatory approval of a Product in any
regulatory jurisdiction, including a holder of a foreign
equivalent thereto.
1.8 IND Holder is defined as: A "Sponsor" as defined in 21 CFR
Part 313.1 (b) of an investigational new drug in any
regulatory jurisdiction, including a holder of a foreign
equivalent thereto.
1.9 Capitalized terms not defined in this Exhibit shall have the
meaning assigned thereto in the Agreement.
2. With respect to the Product or Substance, the Parties agree as follows:
a. All initial reports and any follow-up information (oral or
written) for any and all Serious ADEs as defined above (other
than with respect to animal studies) which become known to
either Party (other than from disclosure by or on behalf of
the other Party) must be communicated by telephone, telefax or
electronically directly to the other Party and/or the NDA
Holder, IND Holder (individually and collectively referred to
as "Holders") within forty-eight (48) hours of receipt of the
information. Written confirmation of the Serious ADE received
by such Party
37
should be sent to the other Party and/or the Holders as soon
as it becomes available, but in any event within forty-eight
(48) hours of initial report of the Serious ADE by such Party.
b. Both Parties shall exchange Medwatch and/or CIOMs forms and
other health authority reports within forty-eight (48) hours
of submission to any Regulatory Authority.
c. All initial reports and follow-up information received for all
Non-Serious ADEs for marketed Product which become known to a
Party (other than from disclosure by or on behalf of the other
Party) must be communicated in writing, by telefax or
electronically to the other Party within ten (10) days, on
Medwatch or CIOMs forms (where possible).
d. Each Party shall coordinate and cooperate with the other
whenever practicable to prepare a single written report
regarding all Serious and/or Non-Serious ADEs, provided,
however, that neither Party shall be obligated to delay
reporting of any ADE in violation of applicable law or
regulations regarding the reporting of ADEs.
3. The Parties further agree that:
a. A written report be forwarded to the other Party within
forty-eight (48) hours of receipt by the Party making the
report, for ADEs for animal studies which suggest a potential
significant risk for humans;
b. Each Party will give the other Party a report via a print-out
or computer disk of all ADEs reported to it and its Affiliates
relating to the Product or Substance within the last year,
within thirty (30) days of receipt of a request from the other
Party but not more often than four (4) times a year;
c. If either Party wishes access to ADE Reports of the other
Party relating to the Product or Substance, upon request of
that Party, the other Party shall make available its ADE
records relating to the Product or Substance (including
computer disks) for viewing and copying by the other Party.
The Parties may discuss the transfer of ADE Reports by
computer disk.
d. Disclosure of information hereunder by a Party to the other
Party shall continue as long as either Party and/or its
Affiliates or designees continue to clinically test or market
Product or Substance.
4. Each Party shall diligently undertake the following further obligations
where both Parties are or will be commercializing the Product or
Substance pursuant to the Agreement and/or performing clinical trials
with respect to the Product or Substance:
38
a. Upon the Effective Date, each Party shall identify individuals
who shall be responsible for identifying all ADE reporting
requirements in all countries of the Territory as set forth in
the Agreement, and any amendments thereto;
b. To immediately consult with the other Party, with respect to
the investigation and handling of any Serious ADE disclosed to
it by the other Party or by a third Party and to allow the
other Party to review the Serious ADE and to participate in
the follow-up investigation;
c. To immediately advise the other Party of any Product and/or
Substance safety communication received from a health
authority and consult with the other Party with respect to any
Product and/or Substance warning, labeling change or change to
an investigators' brochure involving safety issues proposed by
the other Party, including, but not limited to the safety
issues agreed to by the Parties;
d. To diligently handle in a timely manner the follow-up
investigation and resolution of each ADE reported to it;
e. To provide the other Party mutually agreed upon audit rights
of its ADE reporting system and documentation, upon prior
notice, during normal business hours, at the expense of the
auditing Party and under the confidentiality obligations set
forth in the Agreement;
f. To meet in a timely fashion from time to time as may be
reasonably required to implement the adverse event reporting
and consultation procedures described in this Exhibit E,
including identification of those individuals in each Party's
Drug Safety group who will be responsible for reporting to and
receiving ADE information from the other Party, and the
development of a written standard operating procedure with
respect to adverse event reporting responsibilities, including
reporting responsibilities to investigators;
g. Where possible, to transmit all data electronically;
h. To report to each other any addenda, revisions or changes to
the Agreement (e.g., change in territories, local regulations,
addition of new licensors/licensees to the Agreement, etc.)
which might alter the adverse event reporting responsibilities
hereunder;
i. To utilize English as the language of communication and data
exchange between the Parties;
j. To develop a system of exchange of documents and information
in the event that the Agreement involves more than two
Parties;
k. To work together to develop an electronic system to transmit
ADE data.
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39
5. The Parties may meet after the Effective Date of the Agreement to
establish a separate agreement for adverse event exchange which will
supersede this Exhibit E.