EXHIBIT 2.01
ASSET TRANSFER AND LICENSE AGREEMENT
(AGGRASTAT(R))
Between
MERCK & CO., INC.,
a New Jersey corporation
with an address at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
and
GUILFORD PHARMACEUTICALS INC.
a Delaware corporation
with an address at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
EXECUTION COPY
ASSET TRANSFER AND LICENSE AGREEMENT
ASSET TRANSFER AND LICENSE AGREEMENT made effective this 28th day of October,
2003, by and between
MERCK & CO., INC.,
a New Jersey corporation
with an address at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
("Merck")
and
GUILFORD PHARMACEUTICALS INC.
a Delaware corporation
with an address at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Guilford")
RECITALS:
WHEREAS, Merck desires to sell, convey, assign and transfer the Acquired
Assets (as defined in Section 1.1 hereof) to Guilford (or its designee, Artery
LLC) in accordance with the terms and conditions hereof and Guilford desires to
acquire and purchase (or to cause its designee, Artery LLC, to acquire and
purchase) the Acquired Assets in accordance with the terms and conditions
hereof; and
WHEREAS, Guilford's willingness to enter into this Agreement is
conditioned on Merck's entering into the Supply Agreement (as defined herein)
and the Transition Services Agreement (as defined herein) contemporaneously with
this Agreement.
EXECUTION COPY
NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises and conditions set forth herein and intending to be legally bound
hereby, hereby covenant and agree as follows:
1 DEFINITIONS
The following terms as used in this Agreement shall have the meanings
set forth below:
1.1 "ACQUIRED ASSETS" means all right, title and interest in and to
(a) the Trademark, together with the goodwill of the business
symbolized by the Trademark and any registrations or
applications for registration of the Trademark, (b) the Assigned
Patents, (c) the NDA, (d) the IND, (e) the Documentation, (f)
the Marketing Materials, (g) the Logo, (h) the Clinical Data and
Materials, and (i) the Acquired Domain Name.
1.2 "ACQUIRED DOMAIN NAME" means the domain name "▇▇▇▇▇▇▇▇▇.▇▇."
1.3 "AFFILIATE" of a Person means (i) any corporation or business
entity of which fifty (50%) percent or more of the voting stock
or other equity interest is owned directly or indirectly by such
Person; or (ii) any corporation or business entity which
directly or indirectly owns fifty (50%) percent or more of the
voting stock or other equity interest of such Person; or (iii)
any corporation or business entity under the direct or indirect
control of a Person described in clause (i) or (ii), or (iv) any
corporation or business entity under common control with a
Person described in clause (i) or (ii).
1.4 "AGREEMENT" or "THIS AGREEMENT" means this Asset Transfer and
License Agreement, including all Schedules hereto.
1.5 "API" shall have the meaning given such term in the Supply
Agreement.
2
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
1.6 "APPLICABLE FOREIGN LAWS" means, with respect to any Foreign
Patent held by Merck in any country outside the Territory, all
applicable provisions of the generally applicable statutes,
laws, rules and regulations of that country.
1.7 "APPLICABLE LAWS" means, collectively, Applicable US Laws and
Applicable Foreign Laws.
1.8 "APPLICABLE US LAWS" shall mean all applicable provisions of the
United States federal, state, territorial or local
constitutions, statutes, laws, rules, regulations and orders of
all Governmental Authorities and all applicable orders, rules
and decrees of United States courts and arbitrators.
1.9 "ARTERY LLC" means Artery LLC, a limited liability company
organized and existing under the laws of the State of Delaware.
1.10 "ASSIGNED PATENTS" means those United States patents, patent
applications and statutory invention registrations, specifically
described in Schedule 1.10 which, for the purpose of this
Agreement, will be deemed to include any reissues, divisions,
continuations, continuations-in-part, extensions and
reexaminations thereof.
1.11 "ASSUMED LIABILITIES" means, exclusively, all claims and
complaints (including, without limitation, all damages, losses,
expenses, adverse reactions, recalls, product and packaging
complaints and other liabilities) made or brought after the
Effective Date and arising out of the sale, purchase,
consumption or use of the Product in the Territory; provided
that if each of the sale, purchase, consumption or use of the
Product out of which any such claim or complaint arises shall
have occurred prior to the Effective Date, such claim or
complaint shall not constitute an Assumed Liability.
Notwithstanding the foregoing, Assumed Liabilities shall not
include any claim or complaint arising from any Product that can
be shown,
3
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
by reference to lot numbers or other documentary evidence, to
have been sold by Merck on or prior to the Effective Date except
to the extent that (A) such claim is based in whole or in part
on the failure of Guilford to give Required Information or the
giving by Guilford of Required Information inaccurately or
improperly or in a misleading fashion after the Effective Date
or (B) such claim is based in whole or in part on the failure of
Merck to give Required Information or the giving by Merck of
Required Information inaccurately or improperly or in a
misleading fashion on or prior to the Effective Date if and only
if the Required Information that was or should have been given
by Merck is different from the information or warning that would
have been Required Information under the same circumstances
immediately prior to the Effective Date. For purposes of this
Section 1.11, "Required Information" means any information or
warning with respect to which the failure to give it to any
Person, or the giving of it to any Person inaccurately or
incompletely or in a misleading fashion, results under
Applicable Law in a valid claim or complaint against the
manufacturer and/or seller of the Product. Without limiting the
foregoing, "Assumed Liabilities" does not include any claims or
complaints which have given rise to litigation (or some other
form of dispute resolution) prior to the Effective Date or as to
which Merck has Recorded Information as of the Effective Date
that litigation (or some other form of dispute resolution) has
been threatened; and provided further that Assumed Liabilities
shall not include liabilities for defective Manufacture of the
Product by Merck prior to the Effective Date.
1.12 "CLINICAL DATA AND MATERIALS" means the items described in
Schedule 1.12.
1.13 "CONFIDENTIAL INFORMATION" shall mean any and all confidential
or proprietary information, trade secrets, know-how and data,
whether oral, written or graphical,
4
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
disclosed or provided (prior to, on or after the Effective Date)
by one party or its Affiliates, employees, attorneys, financial
advisors, lenders or agents to the other party or its
Affiliates, employees, attorneys, financial advisors, lenders or
agents (including any analysis, materials, product or
conclusions drawn or derived therefrom) or which may be derived
from or related to any visits by personnel of one party to the
location of the other or may be otherwise known to one party
through its visits or contacts with the other.
1.14 "CONTRACTS" means the contracts listed in Schedule 1.14.
1.15 "COPYRIGHT LICENSE" shall have the meaning set forth in Section
2.4.
1.16 "COVERED INDICATION" means any platelet-mediated cardiovascular
indication for the Product, existing prior to, on or after the
Effective Date, including without limitation coronary artery
disease, cerebrovascular disease and peripheral vascular
disease.
1.17 "DOCUMENTATION" means the items described in Schedule C hereto.
1.18 "DOMAIN NAMES" means, collectively, the domain names
"▇▇▇▇▇▇▇▇▇.▇▇▇," "▇▇▇▇▇▇▇▇▇.▇▇▇▇," "▇▇▇▇▇▇▇▇▇.▇▇▇,"
"▇▇▇▇▇▇▇▇.▇▇▇▇" and "▇▇▇▇▇▇▇▇.▇▇▇" and the "DOMAIN NAME LICENSE"
means the mutual licenses granted in Section 2.17.
1.19 "DUPONT AGREEMENT" means the Termination and License Agreement
by and between Merck, Merck and Company, Incorporated (a
Delaware corporation), and DuPont Pharmaceuticals Company dated
as of March 7, 2000. A copy of the DuPont Agreement has been
provided to Guilford.
1.20 "EFFECTIVE DATE" means the date of this Agreement.
1.21 "EXCLUDED ASSETS" means all assets, property, rights and
interests of Merck and its Affiliates other than the Acquired
Assets and any copyrights licensed under the Copyright License,
including, without limitation, all patents other than the
5
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Assigned Patents (including without limitation the Related
Patents, other than to the extent of the Related Patent
License), information, data, Marks (other than the Trademark and
the Logo), copyrights, trade names, good will, intellectual
property and proprietary rights, new drug applications and their
equivalents, investigational new drug applications and their
equivalents, NDC numbers and their equivalents, product
registrations and other assets of Merck or its Affiliates not
transferred as Acquired Assets hereunder.
1.22 "EXCLUDED LIABILITIES" means all liabilities and obligations of
Merck or its Affiliates other than Assumed Liabilities.
1.23 "FDA" means the United States Food and Drug Administration.
1.24 "FINAL ORDER" has the meaning set forth in Section 2.8.
1.25 "FULLY ALLOCATED COST" shall have the meaning set forth in the
Supply Agreement.
1.26 "GENENTECH AGREEMENT" means the Research Agreement by and
between Merck and Genentech, Inc. dated as of January 10, 2000.
A copy of the Genentech Agreement has been provided to Guilford.
1.27 "GOVERNMENTAL AUTHORITY" shall mean any foreign or domestic
federal, territorial, state or local governmental authority,
quasi-governmental authority or court, and any regulatory,
administrative or other agency, or any political or other
subdivision, department or branch, of any of the foregoing.
1.28 "GUILFORD CONFIDENTIAL INFORMATION" shall mean (A) Confidential
Information disclosed by Guilford or its Affiliates, employees,
attorneys, financial advisors, lenders or agents to Merck or its
Affiliates, employees, attorneys, financial advisors, lenders or
agents, and (B) all Confidential Information and material
contained in the Acquired Assets other than Manufacturing
Information (including,
6
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
without limitation, the CMC section of the NDA), and (C) the
terms and conditions of this Agreement and the other Transaction
Documents set forth on Schedule 10.
1.29 "HEADQUARTER SALES" shall mean the gross amounts invoiced by
Merck on all direct sales of Product (including, but not limited
to, hospital sales and sales to governmental entities,
wholesalers, retailers and medical institutions), in the
Territory during the applicable measurement period by Merck in
arm's length sales to independent third parties in the trade, as
per invoices, net of returns.
1.30 "HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1974, as amended, 15 U.S.C. 18A.
1.31 "IND" means the investigational new drug application for the
Product described in Schedule B including any amendments or
supplements thereto, reports, correspondence and other
submissions related thereto and the regulatory and clinical
files and data pertaining to the foregoing in the possession or
control of Merck or its Affiliates as of the Effective Date.
including any and all information, data, know-how, formulations,
assays, good will or intellectual property contained in the IND.
1.32 "JOINT CONFIDENTIAL INFORMATION" shall mean all Manufacturing
Information (including, without limitation, the CMC section of
the NDA) contained in the Acquired Assets.
1.33 "LIENS AND ENCUMBRANCES" means, with respect to the Acquired
Assets, any mortgage, lien, license, pledge, charge, security
interest or encumbrance of any kind, including, without
limitation, the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
7
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
1.34 "LOGO" means the graphic pattern associated with the Trademark
as set forth in Schedule 1.34.
1.35 "MANUFACTURE/MANUFACTURING/MANUFACTURED" shall have the meaning
set forth in the Supply Agreement.
1.36 "MANUFACTURING INFORMATION" means all data, information,
specifications or certifications related to or useful in the
Manufacture of the Product.
1.37 "▇▇▇▇" means a trademark, service ▇▇▇▇, name, logo, design or
trade dress.
1.38 "MARKETING MATERIALS" means the materials listed in Schedule
1.38.
1.39 "MERCK CONFIDENTIAL INFORMATION" shall mean (A) Confidential
Information disclosed by Merck or its Affiliates, employees,
attorneys, financial advisors, lenders or agents to Guilford or
its Affiliates, employees, attorneys, financial advisors,
lenders or agents other than Guilford Confidential Information
and Joint Confidential Information and (B) the terms and
conditions of this Agreement and the other Transaction Documents
set forth on Schedule 10.
1.40 "MSD IRELAND" means Merck ▇▇▇▇▇▇ & Dohme (Ireland) Limited, a
corporation organized and existing under the laws of Bermuda.
1.41 "NET SALES" means the gross amounts invoiced by Guilford or its
successors or assigns on all sales of Product (including, but
not limited to, hospital sales and sales to governmental
entities, wholesalers, retailers, medical institutions and
product sold through Merck pursuant to the Transition Services
Agreement) during the applicable Calendar Year, less returns,
allowances, chargebacks, GPO administrative fees, rebates and
discounts actually paid to unaffiliated customers in arm's
length transactions in the ordinary course of business.
1.42 "NEW DRUG APPLICATION" and "NDA" means, collectively, the two
new drug applications for the Product described in Schedule B
including any amendments
8
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
or supplements thereto, reports, correspondence and other
submissions related thereto and the regulatory and clinical
files and data pertaining to the foregoing in the possession or
control of Merck or its Affiliates as of the Effective Date,
including any and all information, data, know-how, formulations,
assays, good will or intellectual property contained in the NDA.
1.43 "NON-COVERED INDICATION" means any indication or claim for the
Product other than a Covered Indication.
1.44 "PATENT LICENSE" means the license granted to Merck in Section
2.13.
1.45 "PATENT RIGHTS" means patents and patent applications owned by
or licensed to Merck, which claim, cover or relate to the
Product.
1.46 "PCI CLAIM" means a claim or indication for percutaneous
coronary intervention.
1.47 "PCI CLINICAL RESEARCH" shall have the meaning set forth in
Section 9.13.
1.48 "PCI DATA" means the results, information and data generated
from PCI Clinical Research and included in the NDA and/or the
IND.
1.49 "PERSON" means an individual, a corporation, a partnership, an
association, a trust, or other entity or organization, including
a government or political subdivision or an agency or
instrumentality thereof.
1.50 "PROCESS PATENTS" means those United States patents and patent
applications listed on Schedule 1.50.
1.51 "PRODUCT" means:
(a) the chemical compound tirofiban hydrochloride, and
(b) the formulated solutions for intravenous injection or
infusion containing tirofiban hyrdrochloride as marketed
by Merck in the Territory prior to the Effective Date
under the trademark AGGRASTAT(R), and
9
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(c) any formulation of tirofiban hydrochloride, or any
derivative thereof (including but not limited to any
stereoisomers, either separated or combined, any
hydrates, any salts, any solvates and any crystal forms)
as monotherapy or in combination with any other
substance, that is distributed, marketed or sold in the
Territory after the Effective Date.
1.52 "QUALITY AGREEMENT" means the Quality Agreement to be entered
into by and between Merck and Guilford within thirty (30) days
after the Effective Date, as such agreement may be amended,
supplemented or otherwise modified.
1.53 "REBATE" shall mean any discount, rebate, charge, cost, refund
or credit required under any contract or by operation of law,
including without limitation any rebate payable to a managed
care organization pursuant to an agreement and any rebate or
payment required under Federal law pursuant to the "Best Price"
provisions of the Social Security Act, 42 U.S.C. Section 1398r-8
and related provisions.
1.54 "RECORDED INFORMATION" means information or data that is
physically recorded or stored in a readable or retrievable form,
including, without limitation, any information or data recorded
in or on any writing, microfiche, computer disk, or electronic
or optical storage media.
1.55 "RELATED PATENTS" means those United States patents specifically
described in Schedule 1.55, consisting of "LICENSED RELATED
PATENTS" and "NON-LICENSED RELATED PATENTS" as set forth in
Schedule 1.55.
1.56 "RELATED PATENTS LICENSE" means the license granted to Guilford
(or its designee, Artery LLC) in Section 2.26.
1.57 "RETURNED PRODUCT" means (A) any Product sold by Merck before
the Effective Date and returned to Guilford or to Merck within
the time allowed for returns
10
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
under Merck's standard terms and conditions, and (B) any Product
sold after the Effective Date by Guilford (including without
limitation Product sold through Merck pursuant to the Transition
Services Agreement) and returned to Guilford or to Merck within
the time allowed for return under Merck's standard terms and
conditions.
1.58 "RPR AGREEMENT" means, collectively, the Supplies Agreement
dated June 19, 1998 by and between Merck and ▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇
Pharmaceuticals, Inc. and the Supplies Agreement dated September
22, 1999 by and between Merck and ▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇
Pharmaceuticals, Inc. A copy of the RPR Agreement has been
provided to Guilford.
1.59 "SECURITIES LAWS" means the United States Securities Act of
1933, as amended, the United States Securities Exchange Act of
1934, as amended, and any other similar law or regulation of a
Governmental Authority in the Territory, or any successor to any
such laws or regulations, together with any generally applicable
rules, regulations or listing standards of any national or
international securities exchange or The NASDAQ Stock Market.
1.60 "SERIOUS" means, with respect to any experience or reaction, one
which is fatal or life threatening, results in persistent or
significant disability, requires inpatient hospitalization or
prolongation of existing inpatient hospitalization, is a
congenital anomaly, cancer, or the result of an overdose, or is
another important medical event (even if not life-threatening,
resulting in death, or requiring hospitalization) if, based upon
appropriate medical judgments, such medical event may jeopardize
the patient's or subject's health or may require medical or
surgical intervention to prevent one of the other outcomes
listed previously.
11
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
1.61 "SUPPLIED PRODUCT" shall have the meaning given such term in the
Supply Agreement.
1.62 "SUPPLY AGREEMENT" means the Supply Agreement by and between MSD
Ireland and Guilford executed contemporaneously herewith.
1.63 "TACTICS" means the clinical trial that compared the cost of the
application of the Product in early invasive treatment versus
early conservative treatment of acute coronary syndrome.
1.64 "TARGET" means the head-to-head clinical trial that compared the
Product to ReoPro, with the intended purpose of showing that the
Product was non-inferior to ReoPro in a PCI setting such that a
PCI Claim could be obtained for the Product.
1.65 "TARGET MATERIALS" means the Recorded Information described in
Schedule 1.65.
1.66 "TERRITORY" means the United States of America and its
territories and possessions, including without limitation the
Commonwealth of Puerto Rico, Guam and the U.S. Virgin Islands.
1.67 "TRADEMARK" means the United States trademark and trademark
registration for the Product as set forth in Schedule A and all
amendments thereto, but does not include the names "Merck,"
"Merck, Sharp & Dohme," "MSD," "MMD" or any other Marks
belonging to Merck.
1.68 "TRANSACTION DOCUMENTS" means this Agreement, the Supply
Agreement, the Transition Services Agreement, the Quality
Agreement, any agreements or documents prepared or executed
pursuant to the transactions contemplated by such agreements,
any exhibits or attachments to any of the foregoing and any
other written agreement signed by Merck and Guilford that is
expressly identified
12
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
as a Transaction Document, as any of the foregoing may be
amended, supplemented or otherwise modified from time to time.
1.69 "TRANSITION PERIOD" shall have the meaning given such term in
the Transition Services Agreement.
1.70 "TRANSITION SERVICES AGREEMENT" means the Transition Services
Agreement between Merck and Guilford executed contemporaneously
herewith as such agreement may be amended, supplemented or
otherwise modified.
1.71 "UNEXPECTED" means, with respect to any condition or
development, one which is not listed in the then-current
FDA-approved labeling for the Product, and includes those
experiences or reactions that show a significant increase in
incidence or severity over what appears on the labeling for the
Product, or in NDA trials, or that reflect or suggest a failure
of the Product to achieve claimed activity.
2 AGREEMENTS OF PARTIES
2.1 PURCHASE AND SALE OF ACQUIRED ASSETS. On and subject to the
terms and conditions set forth in Section 2.3 and elsewhere in
this Agreement, Merck agrees to sell, convey, assign and
transfer to Guilford (or its designee, Artery LLC) and Guilford
agrees to acquire and purchase (or to cause its designee, Artery
LLC, to acquire and purchase) on the Effective Date, the
Acquired Assets; provided, however, that any information, data,
know-how, formulas, assays, good will, or intellectual property
contained in the IND or the NDA as of the Effective Date shall
be used by Guilford or Artery LLC, as the case may be, and their
respective successors and assigns, only for the purpose of (i)
researching, developing, making, having made and commercializing
the Product for (x)
13
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Covered Indications or (y) Non-Covered Indications for which
Guilford has obtained first Marketing Authorization in
accordance with Section 2.15, and (ii) any other activities
performed by Guilford or its Affiliates prior to obtaining
Marketing Authorization for a Non-Covered Indication that are
reasonably and necessarily aimed at obtaining such Marketing
Authorization and after obtaining Marketing Authorization to
support commercialization in the Territory for such Non-Covered
Indication.
2.2 COVENANT NOT TO ▇▇▇ WITH RESPECT TO NON-LICENSED RELATED PATENTS
AND NEW PATENTS.
(a) Merck covenants that it will not initiate or prosecute
legal or regulatory action asserting claims seeking to
prohibit, limit or recover damages resulting from the
making, having made, using, selling, offering for sale
or promotion of the Product by Guilford, its Affiliates
partners, co-venturers, successors or permitted assigns
in the Territory based on the Non-Licensed Related
Patents under any Applicable Laws in the Territory
seeking either damages or equitable relief against
Guilford or its Affiliates, partners, co-venturers,
customers, successors or permitted assigns (i) with
respect to Covered Indications or (ii) with respect to
Non-Covered Indications for which Guilford has exclusive
rights pursuant to Section 2.15; provided, however, that
the foregoing covenant shall not apply to (x) making,
using, selling or offering to sell the API or (y)
making, using, selling or offering to sell any compound
on which Merck holds a patent or patent application in
the Territory other than the Product, and shall not
preclude Merck from seeking either damages or equitable
relief for any infringement of the Process Patents.
Merck shall require that any
14
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
assignee of its interest in the Non-Licensed Related
Patents shall be bound by the foregoing covenant.
(b) Merck covenants that it will not initiate or prosecute
legal or regulatory action asserting claims seeking to
prohibit, limit or recover damages resulting from the
making, having made, using, selling, offering for sale
or promotion of the Product by Guilford, its Affiliates,
partners, co-venturers, successors or permitted assigns
in the Territory based on any new patents or patent
applications on the Product other than process patents
("Merck New Patents") under any Applicable Laws in the
Territory seeking either damages or equitable relief
against Guilford or its Affiliates, partners,
co-venturers, customers, successors or permitted assigns
(i) with respect to Covered Indications or (ii) with
respect to Non-Covered Indications for which Guilford
has exclusive rights pursuant to Section 2.15; provided,
however, that the foregoing covenant shall not apply to
making, using, selling or offering to sell the API and
shall not preclude Merck from seeking either damages or
equitable relief for any infringement of the Process
Patents. Merck shall require that any assignee of its
interest in the Merck New Patents shall be bound by the
foregoing covenant.
(c) Guilford covenants that it will not initiate or
prosecute legal or regulatory action asserting claims
based on any new patents or patent applications on the
Product ("Guilford New Patents") under any Applicable
Laws in the Territory seeking either damages or
equitable relief against Merck or its Affiliates,
partners, co-venturers or customers seeking to prohibit,
limit or recover damages resulting from (i) Merck's use
of the Patent License
15
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
granted pursuant to Section 2.13, or (ii) the making,
having made, using, selling, offering for sale or
promotion of the Product by Merck, its Affiliates,
partners or co-venturers in the Territory with respect
to Non-Covered Indications for which Merck has exclusive
rights pursuant to Section 2.15, or (iii) making and
having made the Product in the Territory for sale to
Guilford for the Territory or for sale by Merck, Merck's
Affiliates or a third party outside the Territory;
provided that Merck and its Affiliates will not sell,
market or distribute Product to any Person that Merck
knows intends to resell, market or distribute in the
Territory except to the extent expressly permitted by
Section 2.15 with respect to any Non-Covered Indication
for which Merck has obtained first Marketing
Authorization. Guilford shall require that any assignee
of its interest in the Guilford New Patents shall be
bound by the foregoing covenant.
(d) For purposes of subsections (b) and (c) above, "Merck
New Patents" and "Guilford New Patents" shall not
include patents or patent applications obtained by Merck
or Guilford, as the case may be, through purchase,
licensing, merger or consolidation or through the
acquisition of an Affiliate that obtained such patents
or patent applications prior to becoming an Affiliate,
if such patents or patent applications (x) relate to
Covered Indications and come into existence after the
Effective Date or (y) relate to Non-Covered Indications
regardless of when such patents or patent applications
come into existence; it being understood that the
limitation on the application of subsections (a) and (b)
above set forth in this subsection (c) shall not apply
to any patents or patent applications
16
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
existing as of the Effective Date to the extent that
such patents or patent applications relate to Covered
Indications.
2.3 CONDITIONS AND RESERVATIONS.
(a) Guilford hereby grants to Merck a perpetual,
royalty-free, non-revocable, non-exclusive license in
the IND and the NDA, as each exists on the Effective
Date, to research the Product (including the performance
of clinical trials) inside or outside the Territory for
any purpose or indication, including Covered Indications
and Non-Covered Indications.
(b) The license described in subsection 2.3(a) shall be
inseparable from the NDA and the IND and shall run with
the NDA and IND in the event of any future transfer of
the NDA and/or IND.
(c) Merck reserves and retains the non-exclusive right to
use and reference the IND and the NDA and any
information, data, know-how, formulas, assays, good
will, or intellectual property contained in the IND or
the NDA as of the Effective Date for any purpose
(subject only to the restrictions on Merck's
post-Effective Date activities set forth in Section 6.1
and the payment requirement for reference and use of PCI
Data set forth in Section 9.13). For purposes of
clarification, it is acknowledged and agreed that the
right to use and reference information, data, know-how,
formulas, assays, good will or intellectual property
contained in the IND and the NDA retained by Merck
pursuant to this Section 2.3(c) relates solely to the
information, data, know-how, formulations, assays, good
will and intellectual property contained in the IND and
the NDA as of the Effective Date, and does not include
any such information, data, know-how, formulations,
assays, good will or intellectual property developed,
17
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
discovered, invented or otherwise included in the IND or
the NDA after the Effective Date.
(d) Merck hereby grants to Guilford a non-exclusive,
perpetual, non-revocable and royalty free license to any
clinical research conducted by Merck pursuant to Section
2.3(a) to the extent such research is applicable to
Covered Indications in the Territory; provided, however,
that in the event that the total cost of such clinical
research exceeds $10,000,000 and Guilford desires to
exercise its rights under such license, Guilford shall
notify Merck of such desire, and Merck shall then inform
Guilford of the total cost to Merck of such clinical
research. In consideration of the license granted
pursuant to the preceding sentence, Guilford shall pay
to Merck up to one-half of such total cost, the specific
amount of which shall be agreed to by the parties in
good faith in light of the proposed use by Guilford.
(e) Guilford shall have the right, through an independent
accounting firm that is reasonably acceptable to Merck,
to audit Merck upon reasonable notice in order to verify
the information provided to Guilford pursuant to Section
2.3(d). Such audit will be at Guilford's expense unless
it is determined that the cost figures provided to
Guilford overstated the actual cost by ten percent (10%)
or more, in which case the cost of the audit will be
paid by Merck.
2.4 COPYRIGHT LICENSE. Merck has claimed an unregistered copyright
in the product circular and labeling for the Product in the
Territory and in certain of the Marketing Materials used for the
Product in the Territory,
18
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
* or as part of the Acquired Assets. However, Merck makes no
representation or warranty that such copyrights are valid or
existing or that Merck is the holder of any valid registered or
unregistered copyrights relating to the Product that would be
useful or necessary to Guilford in the promotion and sale of the
Product in the Territory (it being understood that many of the
Marketing Materials were created by third parties who may claim
a copyright or other rights in such materials). To the extent,
if any, that any such copyrights exist and are valid and that
Merck holds an interest in such copyrights, Merck hereby grants
to Guilford a non-exclusive, perpetual, royalty-free license
under such copyrights in the Territory solely in connection with
the Manufacture, marketing, distribution, sale and promotion of
the Product in the Territory (the "Copyright License");
provided, however, that the Copyright License shall have no
effect outside the Territory, including with respect to foreign
copyrights that are owned by Merck and may be considered
derivative of the copyrights licensed under the Copyright
License.
2.5 RESERVATION OF RIGHTS OUTSIDE THE TERRITORY. Subject to Article
11, Merck reserves and retains all rights with respect to
registrations, sales and all other property and activities
relating to the Product outside the Territory. Nothing in this
Agreement restricts Merck from making or having made (i) the
Product, inside or outside the Territory, for sale outside the
Territory, (ii) the API inside or outside the Territory, or
(iii) the Product inside the Territory for sale to Guilford.
2.6 RESERVATION OF RIGHTS: PROCESS PATENTS AND OTHER EXCLUDED
ASSETS. Guilford shall not acquire pursuant to this Agreement
any rights in the Process Patents. Merck shall retain the
Excluded Assets.
19
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
2.7 RESERVATION OF RIGHTS: FOREIGN PATENTS. Subject to Article 11,
it is understood that Guilford receives no rights by virtue of
this Agreement in any countries outside the Territory. For
greater certainty but without limiting the generality of
anything otherwise contained herein, it is expressly understood
and agreed that Merck and/or its Affiliates hold patents on or
related to the Product in various countries outside the
Territory ("Foreign Patents").
2.8 GUILFORD COVENANTS REGARDING PROCESS PATENTS AND FOREIGN
PATENTS. After the Effective Date and so long as Merck or any of
its Affiliates shall hold a valid Foreign Patent or a valid
Process Patent on the Product, Guilford and its Affiliates will
not (A) sell, market or distribute the Product in any country
(other than the Territory) in which a Foreign Patent is held by
Merck or any of its Affiliates or (B) sell, market or distribute
Product to any Person that Guilford or its Affiliates knows
intends to resell, market or distribute in any country (other
than the Territory) in which a Foreign Patent is held by Merck
or any of its Affiliates, except to the extent Guilford or its
Affiliates shall be compelled to sell, market or distribute any
such Product by Applicable Laws; provided that Guilford shall
promptly notify Merck if Guilford (or its Affiliates) shall
determine that it is so compelled, or (C) infringe, take any
action to intentionally invalidate, or cooperate with any third
party in any action to infringe or invalidate, any Foreign
Patent or Process Patent held by Merck or any of its Affiliates.
For purposes of this Section 2.8, Merck or its Affiliate shall
be deemed to hold a valid Process Patent on the Product until
the earlier to occur of (a) expiration of such Process Patent
under Applicable Law or (b) entry of a Final Order of a court
having jurisdiction of the subject matter thereof declaring that
such Process Patent is invalid; and Merck or its Affiliate shall
be deemed to hold a valid Foreign Patent on the
20
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Product until the earlier to occur of (a) expiration of such
Foreign Patent under Applicable Foreign Law or (b) entry of a
Final Order of a court having jurisdiction of the subject matter
thereof declaring that such Foreign Patent is invalid. A "Final
Order" means a dispositive order which is non-appealable, or as
to which the time for appeal has expired, or which (if such
order has been appealed) has been affirmed by the highest court
to which such order may be appealed. In the event Guilford or
its Affiliates shall be compelled by Applicable Laws to sell,
market or distribute Product to any Person that Guilford or such
Affiliate knows intends to resell, market or distribute in any
country (other than the Territory) in which a Foreign Patent is
held by Merck or any of its Affiliates, Guilford shall indemnify
Merck for damages suffered as a result thereof, which damages
shall be limited to Guilford's (or its Affiliate's) profits on
any such sales.
2.9 MERCK COVENANTS REGARDING ASSIGNED PATENTS. After the Effective
Date and so long as Guilford or its Affiliates shall hold a
valid Assigned Patent on the Product, Merck and its Affiliates
will not (A) sell, market or distribute the Product in the
Territory except to the extent expressly permitted under Section
2.15 with respect to any Non-Covered Indication for which Merck
has obtained first Marketing Authorization, (B) sell, market or
distribute Product to any Person that Merck or its Affiliates
knows intends to resell, market or distribute in the Territory
except (i) to the extent expressly permitted by Section 2.15
with respect to any Non-Covered Indication for which Merck has
obtained first Marketing Authorization or (ii) to the extent
Merck or its Affiliates shall be compelled to sell, market or
distribute such Product by Applicable Laws; provided that Merck
shall promptly notify Guilford if Merck (or any of its
Affiliates) shall determine that it is so compelled, or (C)
infringe, take any action to intentionally invalidate, or
21
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
cooperate with any third party in any action to infringe or
invalidate, any Assigned Patent held by Guilford or any of its
Affiliates. For purposes of this Section 2.9, an Assigned Patent
shall be deemed valid until the earlier to occur of (a)
expiration of such Assigned Patent under Applicable Law or (b)
entry of a Final Order of a court having jurisdiction of the
subject matter thereof declaring that such Assigned Patent is
invalid. In the event Merck or its Affiliates shall be compelled
by Applicable Laws to sell, market or distribute Product to any
Person that Merck or its Affiliates knows intends to resell,
market or distribute in the Territory, Merck shall indemnify
Guilford for damages suffered as a result thereof, which damages
shall be limited to Merck's (or its Affiliate's) profits on any
such sales.
2.10 RESERVATION OF RIGHTS: MARKS OUTSIDE THE TERRITORY. Guilford is
not acquiring any rights outside the Territory, and Merck and
its Affiliates (and their successors and assigns) shall retain
all rights outside the Territory, to the name "AGGRASTAT," the
Logo and any other Marks used on or with the Product and all
associated trademarks, service marks, trademark and service ▇▇▇▇
registrations and good will including without limitation the
right to use, sell, alter, abandon or otherwise dispose of such
name, trademarks, service marks, registrations and good will as
Merck or its Affiliates may desire.
2.11 *
2.12 ACQUIRED ASSETS SUBJECT TO RPR AGREEMENT AND GENENTECH
AGREEMENT. Guilford acquires the Acquired Assets hereunder
subject to the RPR Agreement and the Genentech Agreement to the
extent contemplated in this Section 2.12 and agrees to be bound,
as the holder of the NDA after the Effective Date, by the
following obligations: (i) the obligation to send, upon written
request of RPR, a
22
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
letter or letters to the FDA authorizing the FDA to
cross-reference the NDA or the IND to the extent pertaining to
the Study (as defined in the RPR Agreement), (ii) the obligation
to send, upon written request of Genentech, notification to the
FDA and each Agency (as defined in the Genentech Agreement)
authorizing the FDA or any such Agency to cross-reference the
NDA or the IND as necessary for the purposes of the Study (as
defined in the Genentech Agreement) but not for any other
purpose, (iii) the obligation to grant to Genentech the right to
cross-reference the NDA or the IND, to the extent necessary for
regulatory purposes, for the purpose of obtaining the Study's
IND (as defined in the Genentech Agreement) and for such other
purposes as authorized in the Genentech Agreement. Merck shall
promptly notify Guilford of any requests for notification
contemplated in this Section 2.12 received by Merck under the
RPR Agreement and/or the Genentech Agreement, as the case may
be, and Guilford shall promptly take all reasonable commercial
actions to comply with such obligations.
2.13 GRANT OF PATENT LICENSE.
(a) Subject to Section 2.15, Guilford hereby grants to Merck
a non-exclusive, perpetual license (the "Patent
License"), which shall be non-revocable and royalty
free, under the Assigned Patents (i) for research
purposes within the Territory, provided that such
research does not support commercialization of the
Product in the Territory, and (ii) for such purposes as
are reasonably necessary to support Merck's scientific
and commercial efforts outside the Territory.
Notwithstanding the foregoing, it is agreed and
understood that no rights are granted to Merck under the
Assigned Patents pursuant to this Section 2.13 (except
for such purposes as are reasonably necessary to support
Merck's scientific and commercial efforts outside the
Territory) to
23
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
make, have made, use, sell, offer to sell or import the
Product or to develop, patent or otherwise seek
regulatory authorization for any derivatives of the
Product, where the derivative is itself claimed by the
Assigned Patents for Covered Indications.
(b) Merck hereby grants to Guilford a non-exclusive,
perpetual, non-revocable and royalty free license to any
clinical research conducted by Merck pursuant to Section
2.13(a) to the extent such research is applicable to
Covered Indications in the Territory.
2.14 MANUFACTURING INFORMATION.
Guilford is not acquiring any Patent Rights related to process
or manufacture of the Product inside or outside the Territory.
Except as otherwise provided in the Supply Agreement and subject
to the terms and conditions set forth therein, Merck shall have
no obligation to provide any Manufacturing Information to
Guilford or provide any other assistance to Guilford related to
Manufacture of the Product, on the Effective Date or at any time
in the future.
2.15 RESEARCH ON NON-COVERED INDICATIONS.
(a) If either party commences research on the Product with
respect to any Non-Covered Indication, such party will
promptly inform the other party generally about such
research, without any obligation to disclose proprietary
information about such research. In the event that
research conducted by either party leads to such party
obtaining Marketing Authorization (as defined below)
with respect to tirofiban hydrochloride for a
Non-Covered Indication, the party obtaining such
Marketing Authorization will have the exclusive right to
commercialize tirofiban hydrochloride in the Territory
for such Non-Covered Indication.
24
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(b) Guilford hereby grants to Merck an exclusive, perpetual
license, which license shall be non-revocable and
royalty free, to the Assigned Patents for use and
commercialization of tirofiban hydrochloride in the
Territory for any Non-Covered Indication for which Merck
shall have obtained Marketing Authorization pursuant to
and in accordance with Section 2.15(a), without any
further action on the part of Guilford or Merck;
provided, that the license contemplated by this Section
2.15(b) shall not be effective unless and until Merck
shall obtain Marketing Authorization pursuant to Section
2.15(a). Such license shall be limited to any
Non-Covered Indication for which Marketing Authorization
has been obtained by Merck and shall be further subject
to any prior Marketing Authorization obtained by
Guilford for such Non-Covered Indication.
(c) For purposes of this Section 2.15, "Marketing
Authorization" of a Non-Covered Indication shall mean
the approval by the FDA of a new drug application for
the development, Manufacture, marketing, sale and
distribution of tirofiban hydrochloride in the Territory
for such Non-Covered Indication.
(d) Guilford covenants that it or its Affiliates will not
initiate or prosecute any legal or regulatory action
asserting claims based on the NDA or the Assigned
Patents, the Related Patents, or the New Guilford
Patents under any Applicable Laws in the Territory
seeking either damages or equitable relief to prohibit,
limit or recover damages resulting from any research or
other activities performed by Merck or its Affiliates
prior to obtaining Marketing Authorization for a
Non-Covered Indication that are reasonably and
necessarily aimed at obtaining such Marketing
25
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Authorization and after obtaining Marketing
Authorization to support commercialization in the
Territory for such Non-Covered Indication. Guilford
shall require that any assignee of its interest in the
Assigned Patents, the Related Patents or the Guilford
New Patents shall be bound by the foregoing covenant.
2.16 TRANSFER OF RIGHTS IN LOGO. It is understood and agreed that the
Logo is not a registered trademark in the Territory. Merck has
used the Logo in association with the Trademark but Merck does
not represent that it has any rights whatsoever in the Logo in
the Territory. To the extent, if any, that Merck may have
acquired any rights in the Logo in the nature of a common law
▇▇▇▇, Merck shall assign such rights in the Territory to
Guilford in the Trademark Assignment to be delivered to Guilford
on the Effective Date pursuant to Section 3.1. Such assignment
is in the nature of a quitclaim and carries no representations
or warranties of any kind whatsoever.
2.17 RIGHTS IN DOMAIN NAMES. Merck shall retain ownership of the
Domain Names inside and outside the Territory. Merck shall have
the exclusive right to maintain websites and web addresses using
the Domain Names. Any such websites or web addresses shall be
maintained so that a user who arrives at the website shall first
encounter a screen in which the user is given a choice between
"Aggrastat(R) in the United States" and "Aggrastat(R) Outside
the United States." Users choosing "Aggrastat(R) in the United
States" shall have the opportunity to click on a link to a
website owned and maintained by Guilford. Merck shall maintain
the "▇▇▇▇▇▇▇▇▇.▇▇▇" domain name and the website and web address
associated therewith in the manner contemplated above without
charge to Guilford for so long as Merck markets the Product
outside the Territory under the
26
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
name "Aggrastat," provided that Merck shall have the right (A)
to abandon any of the Domain Names at any time and in such event
Merck shall notify Guilford and offer to sell its rights in any
such Domain Names to Guilford for $1.00, and (B) to transfer any
of the Domain Names to another party that purchases Merck's
rights in the Product in any country or countries outside the
Territory (subject to Guilford's rights set forth in this
Section 2.17 and Sections 11.1 and 11.2 hereof) and in such
event Merck shall require such party to agree to perform Merck's
obligations with respect to the Domain Names under this Section
2.17. Guilford hereby grants to Merck a royalty-free,
non-revocable, non-exclusive license in the Trademark and the
name "Aggrastat" in the Territory for the limited purpose of
using such Trademark and name in the Domain Names and on the
websites identified with the Domain Names; such license will
last as long as Merck owns the Domain Names and shall be
sub-licensable (subject to Sections 11.1 and 11.2) to any party
that purchases Merck's rights in the Product in any country or
countries outside the Territory. Merck hereby represents that
except for the Domain Name "▇▇▇▇▇▇▇▇▇.▇▇▇," the Domain Names are
inactive as of the Effective Date and that there are no active
websites or web addresses associated with any such Domain Names.
Except as otherwise provided above with respect to the
"▇▇▇▇▇▇▇▇▇.▇▇▇" domain name, nothing in this Agreement shall
require Merck to maintain the Domain Names as active domain
names or to activate websites accessible through such Domain
Names.
2.18 ASSUMPTION OF LIABILITIES. On the terms and subject to the
conditions of this Agreement, as of the Effective Date, Guilford
shall assume the Assumed Liabilities and Merck shall remain
responsible and liable for the Excluded Liabilities.
27
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
2.19 INITIAL PURCHASE PRICE AND ROYALTY PAYMENTS.
(a) Initial Purchase Price. Subject to adjustment in accordance
with Section 2.19(b), in partial consideration for the transfer
of the Acquired Assets and the licenses granted to Guilford by
Merck hereunder, Guilford shall pay Merck the sum of eighty
million, three hundred thousand dollars ($80,300,000.00) plus
(A) $11,000 for certain IMS Data previously provided to
Guilford, and (B) $150,000 for certain administrative services
to be performed by Merck, and less (i) $62,500.00 representing
50% of the fee paid to the Federal Trade Commission by Guilford
pursuant to the HSR Act, and (ii) the amount of any adjustments
pursuant to Section 2.19(b) (the "Initial Purchase Price").
(b) Adjustment to Initial Purchase Price in the event of
Unanticipated Sales. The Initial Purchase Price will be reduced
by a proportionate share of Net Unanticipated October Sales, if
any, determined based on the number of days elapsed in October
as of the Effective Date.
Definitions:
"Unanticipated October Sales" means the amount, if any,
by which Headquarter Sales during October 2003 exceeds
$2,500,000.00; provided that in the event the Effective
Date shall occur prior to October 31, 2003, the
$2,500,000.00 threshold shall be proportionately reduced
based upon the number of days in October elapsed as of
the Effective Date.
"Net Unanticipated October Sales" means Unanticipated
October Sales reduced by (A) chargebacks, GPO
administrative fees, rebates and
28
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
discounts granted or accrued with respect to
Unanticipated October Sales and (B) the Fully Allocated
Cost of Unanticipated October Sales.
(c) Payment of Initial Purchase Price. On the Effective Date,
Guilford shall pay the Initial Purchase Price, less any
adjustment required by Section 2.19(b), by wire transfer as set
forth in Section 2.20. Merck shall certify at the Effective Date
the Net Unanticipated October Sales, if any, in such detail as
shall be reasonably requested by Guilford.
(d) Royalty Payments.
(i) In further consideration for the transfer of the Acquired
Assets and the licenses granted to Guilford by Merck hereunder,
Guilford shall pay royalty payments to Merck on Net Sales in
each Calendar Year commencing with 2004 and continuing until the
earlier of (i) expiration of the last to expire of the Assigned
Patents, or (ii) the date of entry of a Final Order of a court
in the Territory having jurisdiction of the subject matter
thereof declaring the last of the Assigned Patents invalid under
Applicable US Law ("Royalty Payments"), calculated as a
percentage of Net Sales in such Calendar Year, as follows:
Royalty Payments for Calendar Years 2004, 2005 and 2006
0% of Net Sales up to $40,000,000 ("Initial Threshold");
10% of Net Sales in excess of $40,000,000 and less than
$50,000,000;
12% of Net Sales in excess of $50,000,000 and less than
$75,000,000;
14% of Net Sales in excess of $75,000,000 and less than
$100,000,000; and
20% of Net Sales over $100,000,000.
29
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Royalty Payments for Calendar Years 2007 and succeeding Calendar
Years
5% of Net Sales up to $28,000,000;
10% of Net Sales in excess of $28,000,000 and less than
$50,000,000;
12% of Net Sales in excess of $50,000,000 and less than
$75,000,000;
14% of Net Sales in excess of $75,000,000 and less than
$100,000,000; and
20% of Net Sales over $100,000,000.
(ii) Royalty Payments shall be payable not more than forty-five
(45) days following the end of each calendar quarter, provided
however that with respect to 2004, 2005 and 2006, Royalty
Payments shall be payable not more than forty-five (45) days
following the end of (x) the calendar quarter in which Net Sales
first exceed the Initial Threshold and (y) each succeeding
calendar quarter. Royalty Payments will be accompanied by a
Quarterly Statement as provided in Section 3.13.
(e) Royalty Payments for Combination Product. In the event that
Guilford markets, distributes or sells a formulation in which
tirofiban hydrochloride or any derivative thereof is present in
combination with another substance ("Combination Product"), the
Royalty Payment payable on account of Net Sales of such Product
shall be based on the amount of tirofiban hydrochloride (or any
derivative thereof) in the Combination Product, as follows:
First, the amount of tirofiban hydrochloride (or any derivative
thereof) in the Combination Product shall be compared to the
amount in each available monotherapy Product in order to
identify the available monotherapy Product that comes closest to
having the
30
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
same amount of tirofiban hydrochloride (or any derivative
thereof) (the "Benchmark Product"); second, the number of
milliliters of tirofiban hydrochloride (or any derivative
thereof) in the Combination Product shall be divided by the
number of milliliters of tirofiban hydrochloride (or any
derivative thereof) in the Benchmark Product, and the resulting
fraction shall be multiplied by the Royalty Payment that would
be due for the same number of units of the Benchmark Product.
For example, if Guilford currently sells a monotherapy Product
containing 100mL of tirofiban hydrochloride and another
monotherapy Product containing 250mL of tirofiban hydrochloride,
and the Combination Product contains 125mL of tirofiban
hydrochloride, then the Benchmark Product would be the 100mL
dosage formulation, and the Royalty Payment for the Combination
Product would be 125/100 or 125% of the Royalty Payment for the
same number of units of the Benchmark Product.
2.20 FORM OF PAYMENTS.
(a) The Initial Purchase Price shall be paid by Guilford to
Merck by *; Reference: Sale of Aggrastat(R) to Guilford
Pharmaceuticals Inc., October 28, 2003.
(b) Royalty Payments shall be paid by Guilford to Merck by
Federal wire of funds in the manner set forth in paragraph (a)
for the Initial Purchase Price or otherwise as may be specified
in writing by Merck from time to time.
2.21 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ COMPLIANCE
Prior to the execution of this Agreement, Merck and Guilford
have notified the Federal Trade Commission ("FTC") of the
transaction which forms the basis of this Agreement in
accordance with the requirements of the HSR Act. Guilford
31
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
and Merck shall equally share the fee required for such
notification, which is stipulated and agreed to be $125,000, 50%
of which shall be deducted from the Initial Purchase Price
pursuant to Section 2.19(a). Each party shall be responsible for
the payment of its own attorney fees in connection with any HSR
filing or other activities pursuant to the HSR Act.
2.22 ALLOCATION
The parties shall make reasonable efforts in good faith to agree
upon the allocation of the purchase price for all tax purposes
and in any and all filings, declarations and reports with the
Internal Revenue Service (the "IRS") in respect thereof,
including the reports required to be filed under Section 1060 of
the Internal Revenue Code, as amended, if applicable, it being
understood that neither party can assure the other that
agreement can be reached upon such allocation. If agreement is
reached upon such allocation, then in any proceeding related to
the determination of any tax, neither party shall, except to the
extent required by Applicable Laws (for example, if previously
unknown information affecting such allocation, or mathematical
errors underlying such allocation, should be learned), contend
or represent that such allocation is incorrect.
2.23 *
*:
(a) *;
(b) *; and
(c) *.
*.
*:
32
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(a) *;
(b) *;
(c) *; or
(d) *.
*
2.24 IDENTIFICATION OF SCHEDULED ACQUIRED ASSETS
Merck prepared each of the Schedules setting forth the Acquired
Assets (the "Acquired Assets Schedules") so as to identify those
types of assets in the possession or control of Merck and its
Affiliates used in the distribution, use, sale, offer for sale
and marketing (but not the manufacture) of the Product in the
Territory. In the event that after the Effective Date it is
determined that an asset of such type should have been included
in the Acquired Assets but was inadvertently omitted from the
Acquired Assets Schedules, Merck and Guilford shall negotiate in
good faith an amendment to the relevant Acquired Asset Schedule
to incorporate such asset thereon.
2.25 RIGHTS TO PRODUCT IN THE TERRITORY
The Parties acknowledge and agree that GUILFORD shall have the
sole and exclusive right from and after the Effective Date to
represent to third parties that GUILFORD has acquired all rights
to, and is the successor to Merck with respect to, the Product
in the Territory, without reservation by Merck of any lien,
security interest or right of reversion therein.
2.26 LICENSE TO LICENSED RELATED PATENTS. Merck hereby grants to
Guilford a perpetual, royalty-free, exclusive license in the
Territory under the Licensed Related Patents to use, sell, offer
to sell or import Product in the Territory solely
33
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
for (i) Covered Indications, (ii) Non-Covered Indications for
which Guilford has obtained first Marketing Authorization in
accordance with Section 2.15, and (iii) any other activities
performed by Guilford or its Affiliates prior to obtaining
Marketing Authorization for a Non-Covered Indication that are
reasonably and necessarily aimed at obtaining such Marketing
Authorization and after obtaining Marketing Authorization to
support commercialization in the Territory for such Non-Covered
Indication. Notwithstanding anything contained in this
Agreement, Merck shall have no obligation to maintain any of the
Related Patents; provided that in the event Merck shall abandon
any of the Related Patents, Merck shall provide prior written
notice to Guilford and Guilford shall have the right to elect,
upon written notice to Merck, to assume maintenance of such
Related Patents, including payment of any maintenance fees
associated therewith.
2.27 SUBLICENSE TO DUPONT AGREEMENT, RPR AGREEMENT AND GENENTECH
AGREEMENT. Solely to the extent permitted by each of the DuPont
Agreement, the Genentech Agreement and the RPR Agreement, Merck
grants to Guilford a non-exclusive, non-transferable,
non-sublicensable license in the Territory of any sub-licensable
rights granted to Merck under the foregoing Agreements to use,
sell, offer to sell and import Product in the Territory solely
for (i) Covered Indications, (ii) Non-Covered Indications for
which Guilford has obtained first Marketing Authorization in
accordance with Section 2.15, and (iii) any other activities
performed by Guilford or its Affiliates prior to obtaining
Marketing Authorization for a Non-Covered Indication that are
reasonably and necessarily aimed at obtaining such Marketing
Authorization and after obtaining Marketing Authorization to
support commercialization in the Territory for such Non-Covered
Indication. Notwithstanding anything contained in this
Agreement, Merck shall
34
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
have no obligation to prevent the lapse or termination of its
rights including but not limited to its right to sublicense
rights under the foregoing Agreements; provided, that Merck
shall not take any affirmative action to waive or otherwise
terminate any such rights.
2.28 *
*
2.29 *
*
2.30 *
(a) *
(b) *
(c) *
3 EFFECTIVE DATE, EFFECTIVENESS, DELIVERY OF ACQUIRED ASSETS
EFFECTIVE DATE
3.1 The parties hereby acknowledge the execution and delivery to the
other of the Supply Agreement and the Transition Services
Agreement contemporaneously with this Agreement.
3.2 Guilford hereby acknowledges the execution and/or delivery by
Merck to Guilford (or its designee) of the following
contemporaneously with this Agreement except as otherwise noted
below:
(a) an appropriately executed Trademark Assignment in the
form of Schedule D (the "Trademark Assignment"),
(b) an appropriately executed Patent Assignment for the
Assigned Patents in the form of Schedule E (the "Patent
Assignment"),
35
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(c) an assignment and ▇▇▇▇ of sale for the NDA, the IND, the
Documentation, the Marketing Materials, the Clinical
Data and Materials and the Acquired Domain Name in the
form attached hereto as Schedule F.
(d) a written notice to the FDA executed by Merck,
substantially in the form attached hereto as Schedule
3.2(d), of the transfer of title to the NDA and the IND
from Merck to Guilford (or its designee),
(e) a true and complete copy of the TARGET Data and the
TARGET Materials, except for the redaction of specific
patient information as required to protect patient
privacy,
(f) the certificate regarding Net Unanticipated October
Sales as contemplated in Section 2.19(b),
(g) those Acquired Assets specifically identified on
Schedule 3.2(g) as necessary for delivery on the
Effective Date, and
(h) if available on the Effective Date, all Acquired Assets
other than those identified as necessary for delivery on
the Effective Date ("Additional Deliverables"). In the
event that the Additional Deliverables have not been
delivered on the Effective Date, Merck shall cause the
delivery thereof to occur within thirty (30) days of the
Effective Date pursuant to Section 3.6.
3.3 Merck hereby acknowledges the execution and/or delivery by
Guilford to Merck of the following:
(a) the Initial Purchase Price as set forth in Section 2.19,
and
(b) a written notice to the FDA executed by Guilford,
substantially in the form attached hereto as Schedule
3.3, of the transfer of title to the NDA and the IND
from Merck to Guilford.
36
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
3.4 Guilford shall pay or cause to be paid any and all transfer,
stamp, sales or other similar taxes or duties payable in
connection with the sale or transfer of the Acquired Assets to
Guilford (or its designee), as well as any and all third-party
costs and expenses relating to the transfer and assignment to
Guilford (or its designee) of the Trademark and the Assigned
Patents, including, without limitation, all costs and taxes with
respect to recordation of transfer. Recordation of transfer and
assignment of the Trademark and the Assigned Patents shall be
the responsibility of Guilford.
STEPS TO BE TAKEN AFTER THE EFFECTIVE DATE
3.5 On or immediately following the Effective Date, and in any event
within one (1) business day after the Effective Date, Guilford
and Merck shall each deliver to the FDA written notices,
substantially in the forms attached hereto as Schedules 3.2(d)
and 3.3, of the transfer of title to the NDA and the IND from
Merck to Guilford.
3.6 As soon as practicable on or after the Effective Date, and in no
event later than thirty (30) days after the Effective Date,
Merck shall deliver to Guilford any Additional Deliverables
(other than those to be delivered pursuant to Section 2.30) not
delivered on the Effective Date, by shipment to a destination in
the United States specified by Guilford. Copying and shipment of
any Acquired Assets shall be at Merck's expense. Notwithstanding
any provision of this Agreement to the contrary, Merck shall
have the right to retain the original TARGET database and one
copy of the other Additional Deliverables for its records,
subject to the provisions of Section 10.2 hereof.
3.8 Any information regarding Adverse Experiences for the Product
received by Merck before the Effective Date but not yet reported
to the FDA as of the
37
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Effective Date shall be provided to Guilford as soon as
practicable, and no event later than fifteen (15) days, after
the Effective Date.
3.9 Merck will, immediately after the Effective Date, and in any
event within two (2) days of the Effective Date, distribute to
the other parties to the Contracts a letter in the form attached
hereto as Schedule 3.9. Any other notices to such parties or
other customers will be the responsibility of Guilford.
FURTHER ASSURANCES
3.10 Each of Merck and Guilford shall, at any time or from time to
time after the Effective Date, at the request and expense of the
other, execute and deliver to the other all such instruments and
documents or further assurances as the other party may
reasonably request in order to sell, assign and transfer to
Guilford the Acquired Assets as contemplated hereby; provided,
however, that after the Effective Date, apart from such
customary further assurances, Merck shall have no other
obligations (including without limitation any obligation to
provide technical or other assistance to Guilford) except as
specifically set forth and described herein or in the Supply
Agreement or the Transition Services Agreement.
COOPERATION WITH RESPECT TO ACQUIRED ASSETS AND ASSUMED LIABILITIES
3.11 From and after the Effective Date, each party shall make
available to the other party during normal business hours and
upon reasonable prior written notice, but without unreasonably
disrupting its business, all records as to the Acquired Assets
and Assumed Liabilities held by it and reasonably necessary to
permit the defense or investigation of any litigation, hearing,
regulatory proceeding or investigation directly relating to any
of such assets or liabilities and shall preserve
38
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
and retain all such records for the length of time contemplated
by their standard record retention policies and schedules;
provided, however, that in no event shall Merck be required to
supply any Manufacturing Information to Guilford or to assist
Guilford in any validation process or other regulatory process
or proceeding related to the Manufacture of the Product or any
other product except as specifically set forth herein or in any
of the other Transaction Documents. Each party will give prompt
written notice to the other party of any litigation or
regulatory proceeding (including without limitation any
investigation, inspection or other administrative review of any
Governmental Authority) in which such party is involved as a
party that directly concerns, and might materially and adversely
affect, the Product or the Acquired Assets or Guilford's rights
in the same.
3.12 MERCK RECORDKEEPING REQUIREMENTS; GUILFORD AUDIT RIGHTS. During
the period when Merck provides administrative functions pursuant
to Article 9, Merck shall keep complete, accurate and detailed
records (in addition to any records required to be kept pursuant
to the Transition Agreement) of all matters within Merck's
administration under Article 9 (including chargebacks, GPO
administrative fees, discounts and rebates, product returns and
accounts payable and receivable) and shall retain such records
for a reasonable time thereafter. Such records shall be kept in
sufficient detail to permit independent audit of such records.
Merck shall, at Guilford's request and expense, make such
records available for examination upon reasonable notice during
normal business hours by Guilford or its independent certified
public accountants or auditors designated by Guilford and
approved by Merck, which approval shall not be unreasonably
withheld or delayed.
39
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
3.13 GUILFORD RECORDKEEPING AND REPORTING REQUIREMENTS; MERCK AUDIT
RIGHTS; QUARTERLY STATEMENTS.
(a) Guilford recordkeeping requirements; Merck audit rights.
Guilford shall keep complete and accurate books and records of
all Net Sales of the Product and all items necessary to
accurately calculate Net Sales in accordance with generally
accepted accounting practices consistently applied (except to
the extent that the computation of Net Sales in accordance with
Section 1.36 requires recordkeeping on a cash rather than
accrual basis), including without limitation records of the
gross amounts invoiced on all sales of Product, the prices in
effect from time to time, the gross revenue derived from sales
of the Product, returns, allowances, chargebacks, GPO
administrative fees, rebates and discounts actually paid to
unaffiliated customers in arm's length transactions in the
ordinary course of business, and all other information used or
necessary to be used in computing Net Sales or Royalty Payments,
and shall retain such records for a reasonable time. Guilford
shall, at Merck's request and expense, make all such records
available for examination (not more often than once every two
years) upon reasonable notice during normal business hours by
Merck or its independent certified public accountants or
auditors designated by Merck and approved by Guilford, which
approval shall not be unreasonably withheld or delayed;
provided, however, that any claim for unpaid or inadequate
Royalty Payments will not be deemed to arise until the date when
Merck shall have discovered such shortfall or lack of payment.
(b) Quarterly statements. Not more than forty-five (45) days after
the end of each calendar quarter after the Effective Date
(regardless of whether a Royalty Payment is payable with respect
to such calendar quarter), Guilford shall furnish
40
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
to Merck a statement which shall contain the following
information: total gross sales of Product in the Territory
during such calendar quarter; the unit price for Product in
effect in the Territory from time to time during such calendar
quarter; all returns, allowances, chargebacks, GPO
administrative fees, rebates and discounts actually paid to
unaffiliated customers in arm's length transactions in the
ordinary course of business during such calendar quarter; and
any other information used or necessary to be used in computing
Net Sales or Royalty Payments for such calendar quarter.
4 MERCK'S REPRESENTATIONS AND WARRANTIES
4.1 Merck represents and warrants as of the Effective Date, that:
(a) Merck is a corporation duly organized, validly existing
and in good standing under the laws of the State of New
Jersey.
(b) The execution, delivery and performance by Merck of this
Agreement and each of the Transaction Documents to which
Merck is a party are within Merck's corporate power,
have been duly authorized by all necessary corporate
action and do not contravene or constitute a default
under any provision of the certificate of incorporation
or by-laws of Merck or any provision of Applicable Law
or regulation or of any judgment, injunction, order or
decree binding upon Merck or to which any Acquired Asset
is subject, or any indenture, bank loan, credit, or
other agreement binding upon Merck or to which any
Acquired Asset is subject. This Agreement and each of
the Transaction Documents to which Merck is a party is a
legal, valid and binding agreement of Merck enforceable
in accordance with its terms.
41
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(c) Except for the requirement that both Guilford and Merck
provide written notice to the FDA of the transfer of the
NDA from Merck to Guilford, the execution, delivery and
performance by Merck of this Agreement and the other
Transaction Documents, and the consummation by Merck of
the transactions contemplated hereby and thereby,
require no action by or in respect of, or filing with,
any governmental body, agency or official or any other
consent of any Person, firm or other entity.
(d) Merck is the legal and beneficial owner of the Acquired
Assets (other than the Logo, with respect to which Merck
makes no representations), free and clear of all Liens
and Encumbrances.
(e) The Marketing Materials consist of, in addition to all
promotional materials submitted to the FDA which are
included on Schedule C, (1) at least one copy of all
promotional materials used by Merck sales
representatives in 2002 (subject to certain notations
included on the hard copies thereof), (2) all clinical
reprints used in promotion of the Product in 2002, (3)
all available materials used for training of sales
representatives, (4) all available syndicated market
research, (5) sales records for the period 1998-2002
(including account level sales data for 2000-2002) and
(6) customer lists for 2002.
(f) The TARGET Materials consist of (1) a copy of the TARGET
database (redacted to delete patient-identifiable
information), (2) to the extent existing in WORF as of
the Effective Date, completed case report forms (or
copies thereof) completed in connection with the TARGET
trial (redacted to delete patient-identifiable
information), (3) all analysis and correspondence
between Merck and the FDA relating to the TARGET
42
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
study (except to the extent included in the NDA, it
being understood that Merck believes all such analysis
and correspondence is included in the NDA), and (4) the
two Statistical Analysis Software ("SAS") Codes
necessary to access the TARGET database. Except for the
redaction of specific patient information as required to
protect patient privacy, the copy of the TARGET database
and the other TARGET Materials provided to Guilford on
the Effective Date represents a complete, true and
accurate copy of all such materials (it being understood
and agreed that if completed case report forms (or
copies thereof) completed in connection with the TARGET
trial do not exist in the WORF, Merck will cooperate
with Guilford to attempt to obtain a copy thereof from
the Cleveland Clinic).
(g) The Clinical Data and Materials, together with the
TARGET Materials, the NDA and the IND, include, except
for the TACTICS Materials and the Clinical Research
Materials, (i) all documentation or other written
evidence of ongoing research and development with
respect to the Product as of the Effective Date in the
WORF or specifically set forth on Schedule 1.12, and
(ii) the results of all clinical trials or studies
conducted by Merck with respect to the Product prior to
the Effective Date (including all Recorded Information
related thereto) in the WORF or specifically set forth
on Schedule 1.12.
(h) The Documentation includes those documents,
instrumentation, files and records relating to the
Trademark and Assigned Patents (including all patent
prosecution files for Assigned Patents and the original
issued patent certificates therefor), FDA regulatory
processes relating to the
43
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
promotion of the Product, litigation files, and medical
inquiries and responses, in each case relating to the
Product in the Territory in the possession and control
of Merck or its Affiliates as of the Effective Date,
that Merck in its reasonable judgment believes to be
material to the sale, market or use of the Product in
the Territory.
(i) Merck is the owner of the Assigned Patents, the
Trademark, the NDA, the IND, the Marketing Materials,
the TARGET Data and the TARGET Materials, the Clinical
Data and Materials, the Documentation and the Related
Patents and has the right to assign or license, as
applicable, such assets to Guilford without the consent
of any third Person.
(j) Except as set forth on Schedule 4.1(j), there is no
claim pending or, to the knowledge of Merck based on
Recorded Information, threatened, that the use of the
Assigned Patents, the Trademark, the NDA, the IND, the
Marketing Materials, the TARGET Materials, the TARGET
Data, the Clinical Data and Materials, the Documentation
the Logo or the Acquired Domain Name in the manner
heretofore used by Merck and its Affiliates in
connection with the distribution, sale and promotion of
the Product in the Territory infringes upon or conflicts
with any patent or other intellectual property rights of
any third party or that Guilford, by practicing under
the Assigned Patents in the Territory as of the
Effective Date would violate any intellectual property
rights of any third party.
(k) As of the Effective Date, the Trademark is valid and
enforceable, and free and clear of all Liens and
Encumbrances. There is no claim pending or, to the
knowledge of Merck based on Recorded Information,
threatened, that the use of the Trademark in the manner
heretofore used by Merck
44
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
and its Affiliates in connection with the distribution,
sale and promotion of the Product in the Territory
infringes upon or conflicts with any the rights of any
third party.
(l) Merck has not given notice to any third parties in the
two (2) years prior to the Effective Date, asserting
infringement by such third party of the Trademark or any
of the Assigned Patents or the Related Patents.
(m) Except as set forth on Schedule 4.1(m), or as otherwise
specifically set forth in this Agreement, as of the
Effective Date neither Merck nor any of its Affiliates
has executed or granted to any third party any license
or other right to market, distribute, sell or offer for
sale the Product or any generic substitutes therefor, in
or into the Territory.
(n) Merck has provided Guilford with the opportunity to
review the true, accurate and complete NDA and IND for
the Product prior to the Effective Date (except for
redaction of confidential patient information). Merck
and its Affiliates have no new drug applications or
investigational new drug applications in the Territory
pertaining to the Product, whether issued, pending,
abandoned, withdrawn, or in draft form other than the
NDA and the IND. Merck (i) has complied in all material
respects with all Applicable US Laws in connection with
the preparation and submission to the FDA of each of the
NDA and IND and (ii) has filed with the FDA all required
notices, supplemental applications, and annual and other
reports, including Adverse Experience reports, with
respect to each NDA and IND. The NDA has been approved
and remains in effect in the United States, and as of
the Effective Date, Merck has all the legal rights of a
holder of an approved new drug application with respect
to the
45
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Product in the United States. There is no action or
proceeding by any Governmental Authority in the
Territory pending or, to the knowledge of Merck based on
Recorded Information, threatened, seeking revocation or
suspension of the NDA or the IND.
(o) To the knowledge of Merck based on Recorded Information,
no recall or withdrawal for the Product in the Territory
is pending or threatened.
(p) Except as set forth on Schedule 4.1(p) hereof, there are
no claims or complaints made or brought against Merck in
the Territory prior to the Effective Date relating to
the Product or the Acquired Assets, other than (i)
litigation and claims listed on Schedule 4.1(p), and
(ii) the claims, complaints, adverse reactions or
experiences, recalls, and product and packaging
complaints contained or disclosed in the NDA or included
in Schedule 4.1(q). (For reasons of patient privacy, the
names of claimants have been redacted from the claims
described in Schedule 4.1(p)).
(q) Schedule 4.1(q) sets forth all Adverse Experiences
existing with respect to the Product that have not yet
been reported to the FDA.
(r) The assignments and transfer documents to be delivered
to Guilford pursuant to Section 3.2 will be in
appropriate form and sufficient to sell, assign and
transfer to Guilford all right, title and interest in
and to the Acquired Assets free and clear of any Liens
or Encumbrances.
(s) The IND is true, accurate and complete, and contains all
of the information posted to the IND over the life of
the Product.
(t) The NDA is true, accurate and complete, and contains all
of the information posted to the NDA over the life of
the Product and all information concerning side effects,
injury, toxicity or sensitivity reaction,
46
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
or unexpected incidents, whether or not Serious or
Unexpected, relating to the Product ("Adverse
Experiences"), that Merck has reported to the FDA during
the time from the original filing of the NDA until the
Effective Date (except as set forth in paragraph (q)).
(u) Except as listed in Schedule 1.14, there are no
Contracts between Merck or any of its Affiliates and any
third parties (including Governmental Authorities, GPOs,
hospitals, health maintenance organizations and other
buyers of Product in the Territory) directly relating to
or affecting the sale of the Product in the Territory.
Merck has made available to Guilford complete and
correct copies of the Contracts. Each of the Contracts
is in effect as of the Effective Date and constitutes a
legal, valid and binding agreement, enforceable in
accordance with its terms, of Merck and the other
parties thereto. Neither Merck nor any other party
thereto has failed to perform or is otherwise in breach
in any material respect of any of the Contracts.
However, Merck has informed Guilford that such Contracts
are not assignable without the consent of the other
parties and that Merck intends to terminate all
Contracts in accordance with Section 3.9.
(v) Merck has not negotiated with or through any broker or
finder in connection with this Agreement or the subject
matter hereof. No broker's commission or finder's fee
will be payable by either party as a result of this
Agreement.
(w) Merck has complied and will comply in all material
respects with the requirements of the HSR Act.
(x) Merck is the holder of the Assigned Patents and the
Related Patents set forth in Schedules 1.10 and 1.55,
respectively.
47
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(y) Schedule 4.1(y) sets forth a list of all ongoing
clinical trials conducted by Merck involving the Product
in Covered Indications. As of the Effective Date, Merck
has no existing research program, nor does the senior
management of its research division currently intend to
commence any such research programs, with respect to any
purpose or indication for the Product other than Covered
Indications.
(z) Merck has provided Guilford with the opportunity to
review the true, accurate and complete copies of the
DuPont Agreement, the Genentech Agreement, the RPR
Agreement and Merck's third party manufacturing
contracts related to the Product in the Territory,
together with any and all amendments, supplements or
other modifications relevant to such agreements.
(aa) As of the Effective Date, to the knowledge of Merck's
senior management, Merck and its Affiliates do not have
any existing research program, nor do they currently
intend to commence any research program, with respect to
the Product or any IIb/IIIa inhibitor. Merck has
disclosed to Guilford that it has rights in a direct
thrombin inhibitor.
(bb) Headquarter Sales during September 2003 did not exceed
$2,500,000.
4.2 DISCLAIMERS. Except for the representations and warranties set
forth in Section 4.1 and in the other agreements executed by
Merck or any of its Affiliates in connection herewith, Merck
does not make any representation or warranty, and specifically
disclaims any warranty:
(a) That it is the holder of any unexpired Patent Rights for
the Product in the Territory except the Assigned
Patents, the Related Patents and the Process Patents. No
Patent Rights for the Product are being assigned,
48
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
transferred, licensed or sublicensed to Guilford under
this Agreement, except the Assigned Patents, the
Licensed Related Patents and any Patent Rights licensed
to Guilford pursuant to Section 2.27.
(b) Merck makes no representations or warranties concerning
the manufacturing process, or the efficacy, efficiency
or adequacy of the Acquired Assets for the purpose of
manufacturing, marketing or selling the Product either
before or after the Effective Date.
(c) Concerning the efficacy or safety for human use of the
Product, whether in the formulation heretofore
Manufactured and sold under the name "AGGRASTAT" or in
the form of any other formulation or stereoisomer or
other derivative.
(d) Concerning legal and regulatory requirements that must
be satisfied by Guilford before Guilford will be able
lawfully to Manufacture, market and sell the Product in
the Territory or any other country.
(e) That any medical information provided by Merck to
Guilford concerning the use of the Product is in
accordance with sound medical practice or may be relied
on by Guilford or any other Person for any purpose.
(f) That the Marketing Materials are current or in
accordance with Product Labeling or can be used for any
purpose other than historical reference.
(g) That the Contracts are assignable to Guilford without
the consent of the other parties to the Contracts or
that the other parties will consent to such assignment,
enter into contracts with Guilford, purchase the Product
from Guilford or do business in any manner with
Guilford. To the contrary, Merck has informed Guilford
that the Contracts are not assignable without the other
parties' consent, that certain additional parties (i.e.,
group
49
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
purchasing organizations) may need to consent to any
such assignment or any new contract with such other
parties, and that Merck's communication with such other
parties regarding the Product and Guilford will be
limited to the letter described in Section 3.9.
4.3 LIMITATION ON MERCK'S REPRESENTATIONS AND WARRANTIES. GUILFORD
ACKNOWLEDGES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
EXPRESSLY CONTAINED IN THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTION DOCUMENTS, MERCK HAS MADE NO REPRESENTATION OR
WARRANTY WHATSOEVER AND GUILFORD HAS NOT RELIED ON ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, EXCEPT THOSE
EXPRESSLY SET FORTH IN THIS AGREEMENT. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, GUILFORD ACKNOWLEDGES THAT, EXCEPT
AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR ANY OF THE OTHER
TRANSACTION DOCUMENTS, GUILFORD IS ACQUIRING THE ACQUIRED ASSETS
ON AN "AS IS, WHERE IS" BASIS WITHOUT ANY EXPRESS OR IMPLIED
WARRANTIES AS TO THE FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY OR CONDITION OF THE ACQUIRED ASSETS OR AS TO ANY
OTHER MATTER.
5 GUILFORD'S REPRESENTATIONS AND WARRANTIES
5.1 Guilford represents and warrants as of the Effective Date that:
(a) Guilford is a corporation duly organized and validly
existing under the laws of the State of Delaware.
(b) The execution, delivery and performance by Guilford of
this Agreement and each of the documents contemplated
hereby to which Guilford is a
50
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
party are within Guilford's power, have been duly
approved and authorized by all necessary action and do
not contravene or constitute a default under the
constitutive documents of Guilford or of Applicable Law
or regulation or of any agreement, judgment, injunction,
order, decree or other instrument binding upon Guilford.
This Agreement is a legal, valid and binding agreement
of Guilford enforceable in accordance with its terms.
(c) Except for the requirement that both Guilford and Merck
provide written notice to the FDA of the transfer of the
NDA and the IND from Merck to Guilford and compliance
with the requirements of the HSR Act, the execution,
delivery and performance by Guilford of this Agreement
and each of the documents contemplated hereby to which
Guilford is a party require no action by or in respect
of, or filing with, any governmental body, agency or
official, or any other consent.
(d) Guilford has complied and will comply in all material
respects with the requirements of the HSR Act.
(e) Guilford has not negotiated with or through any broker
or finder in connection with this Agreement or the
subject matter hereof. No broker's commission or
finder's fee will be payable by either party as a result
of this Agreement.
(f) As of the Effective Date, Guilford has no existing
research program with respect to any purpose or
indication for the Product other than Covered
Indications.
51
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(g) As of the Effective Data, Guilford has no existing plans
or intention to effect or experience a "Change of
Control" as defined in the Supply Agreement.
(h) Guilford will not use any of the Marketing Materials in
any way that violates Applicable Law or causes any
liability to Merck.
6 POST-EFFECTIVE DATE ACTIVITIES OF MERCK
6.1 After the Effective Date and until the expiration of the
Assigned Patents, neither Merck nor any of its Affiliates nor
any of their respective successors or assigns shall:
(a) directly or indirectly make, have made, use, market,
sell, offer to sell, import or distribute tirofiban
hyrdrochloride in the Territory (i) for Covered
Indications (except for any sales to Guilford pursuant
to the Supply Agreement or any sales for use outside of
the Territory), or (ii) for Non-Covered Indications for
which Guilford has exclusive rights under Section 2.15;
or
(b) directly or indirectly make, have made, use, market,
sell, offer to sell, import or distribute tirofiban
hyrdrochloride in the Territory (except for any sales to
Guilford pursuant to the Supply Agreement, any sales for
use outside of the Territory, or any manufacture,
formulation or use as a comparator in clinical trials
permitted by Section 6.2(c) below) for any indication in
the following dosage forms and package presentations:
100 mL pre-mixed bag (containing 5mg tirofiban); 250 mL
pre-mixed bag (containing 12.5 mg tirofiban); 50 ▇▇ ▇▇▇▇
(concentrate, containing 12.5 mg tirofiban); or
52
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(c) acquire or submit any investigational new drug
application, new drug application or abbreviated new
drug application, patent application, or request for
approval of any Governmental Authority with respect to
tirofiban hyrdrochloride in the Territory for the
Covered Indications or for Non-Covered Indications for
which Guilford has exclusive rights under Section 2.15.
6.2 Notwithstanding anything contained herein to the contrary,
nothing in this Agreement shall be construed as restricting the
ability of Merck or its Affiliates:
(a) to Manufacture (whether such Manufacturing is performed
inside or outside the Territory) the Product (i)
pursuant to the Supply Agreement, or (ii) for marketing,
distribution and sale outside the Territory, or (iii)
for Non-Covered Indications for which Merck has
exclusive rights under Section 2.15; or
(b) from exercising its rights under the licenses granted
pursuant to Sections 2.3(a), 2.13 and 2.15 in accordance
with the terms, conditions and limitations of such
licenses; or
(c) to Manufacture, formulate and use tirofiban
hyrdrochloride inside or outside the Territory solely
for the purpose of using such compound as a comparator
in one or more clinical studies inside or outside the
Territory; or
(d) to research, use, Manufacture, market, distribute or
sell any pharmaceuticals, biologicals or chemical
entities other than tirofiban hyrdrochloride inside or
outside the Territory; or
53
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(e) to use any information, data, know-how, good will or
intellectual property contained in the NDA and the IND
in a manner consistent with Article 2 hereof.
6.3 Merck shall from and after the Effective Date and during the
Transition Period cooperate with Guilford in the transition of
the Product from Merck to Guilford through the Joint Committee.
6.4 Merck shall prepare and deliver to Guilford, on or before
November 24, 2003, unaudited financial statements with respect
to the Product in the Territory for calendar years 2000, 2001
and 2002 which are compliant with the rules and regulations of
the United States Securities and Exchange Commission (and for
the period ended on the Effective Date). Merck shall permit
Guilford's independent auditors such access to books, records,
work-papers, personnel and other materials at reasonable times
and upon reasonable advance notice in order that such auditors
may audit such financial statements in accordance with
Securities Laws. Such audit shall commence upon receipt of such
unaudited financial statements and shall be concluded on or
before December 23, 2003. Merck shall cooperate with, and assist
to the extent necessary, Guilford's independent auditor in the
performance of such audit.
7 REGULATORY AFFAIRS
NDA
7.1 At all times after the Effective Date and until the first to
occur of (a) the date when Guilford transfers the Acquired
Assets in accordance with Article 11 hereof or (b) two years
after the expiration or termination of the Assigned Patents,
Guilford will use reasonable commercial efforts to maintain the
NDA and the IND for the Product, valid and in good standing and
authorizing Guilford to manufacture and
54
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
sell tirofiban hydrochloride in the Territory under the name
"AGGRASTAT." During such period: (a) Guilford shall not alter or
impair the NDA or the IND in any manner that would impair
Merck's ability to Manufacture API or the Product in accordance
with its rights under this Agreement and the Supply Agreement,
and (b) Guilford will promote the Product in a manner consistent
with the Product's current labeling as in effect from time to
time.
REGULATORY COMPLIANCE
7.2 Within the time permitted under applicable regulations, each of
Guilford and Merck shall file or cause to be filed with the FDA
all notices, assignments, documents and/or other materials
required by Applicable Law to be filed in connection with this
Agreement, including without limitation the notices in the forms
of Schedule 3.3 and FDA Form 356h. At all later times, each
party shall make promptly any further filings and take any
actions reasonably required to consummate the transactions
contemplated hereby.
7.3 From and after the Effective Date, except to the extent
otherwise provided in the Supply Agreement or the Transition
Services Agreement, Guilford will be responsible for developing
at its own expense, new product labeling (including without
limitation new NDC numbers), package inserts, imprinting and
packaging data as appropriate, for the Product.
7.4 From and after the Effective Date, except as set forth in
Section 7.8, Guilford will be responsible for all regulatory
compliance activities with respect to the Product in the
Territory.
MEDICAL INQUIRIES
55
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
7.5 Until the first to occur of (A) sixty (60) days after the
Effective Date or (B) the date when Guilford notifies Merck that
Guilford is prepared to assume responsibility for medical
inquiries, Merck shall continue to respond to questions and
inquiries relating to the Product raised by health care
professionals and customers in the manner in which it responded
to such questions prior to the Effective Date. Commencing
promptly after the Effective Date, Guilford will establish and
implement effective procedures and mechanisms for responding to
such questions and inquiries and will notify Merck when such
procedures and mechanisms are in place; provided, however, that
in no event shall Merck have responsibility for such questions
and inquiries more than sixty (60) days after the Effective
Date, except in the case of medical emergency.
7.6 On the Effective Date (except as provided in Section 7.5),
Guilford shall assume all responsibility for all correspondence
and communication with physicians and other health care
professionals in the Territory relating to the Product. Guilford
shall keep such records and make such reports as shall be
reasonably necessary to document such communications in
compliance with all applicable regulatory requirements.
ADVERSE EXPERIENCE AND REACTION REPORTING
7.7 Effective on the Effective Date, and continuing as long as the
NDA for the Product is active with the FDA, Guilford and Merck
shall be responsible for reporting Adverse Experiences and
reactions in accordance with Section 9.1 of the Supply
Agreement.
REGULATORY REPORTING
7.8 After the Effective Date, Guilford shall have full
responsibility for completing and filing the annual report and
all other required reports in the Territory for the
56
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Product; provided, however, that Merck has filed or will file
the annual report for 2003 for the Product and the IND annual
progress report; and provided that Merck will cooperate in good
faith to provide Guilford with any information relating to the
Product in the Territory and reasonably requested by Guilford as
necessary to comply with its obligations under Applicable US
Laws.
7.9 After the Effective Date and so long as Merck sells tirofiban
hyrdrochloride outside the Territory, Guilford shall send to
Merck, within 30 days after filing with the FDA, a copy of each
annual report for the NDA and the IND and any other filing in
connection with the NDA or the IND, and any changes made to the
product circular or product labeling for the Product free of
charge.
7.10 CHANGE OF CONTROL. Section 11.3 of the Supply Agreement is
incorporated herein to the extent applicable to this Agreement.
Notwithstanding any provision of this Agreement or the Supply
Agreement to the contrary, in the event of a transfer or Change
of Control to a non-affiliated party such that the Resulting
Entity is a Qualified Successor, Guilford shall be released from
any further obligations under this Agreement; provided, however,
that in the event of a transfer or Change of Control to a
non-affiliated party such that the Resulting Entity is not a
Qualified Successor, Guilford shall retain all of its
obligations under this Agreement. Within thirty (30) days after
the Effective Date, Guilford shall inform Merck in writing of
(1) its net worth as of the date immediately following the
Effective Date and (2) its debt rating as of the date
immediately following the Effective Date.
7.11 CUSTOMER COMPLAINTS
Merck and Guilford shall cooperate in good faith after the
Effective Date to establish a procedure for the investigation of
and response to customer
57
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
complaints with respect MSD Ireland Image Product (as defined in
the Supply Agreement) sold prior to, on and after the Effective
Date.
8 POST EFFECTIVE DATE USE OF MARKS
8.1 Beginning on the Effective Date, but except to the extent
otherwise provided in the Transition Services Agreement and/or
the Supply Agreement, Guilford shall ▇▇▇▇ clearly all units of
the Product Manufactured, packaged or distributed by Guilford to
indicate Guilford's ownership of the Product and will not use
the words, names or combined letters "Merck", "Merck & Co.,
Inc.", "MMD", "Merck Manufacturing Division", "Merck Sharp &
Dohme", "MSD," or any variation thereof or other word, name or
letter combination substantially similar thereto, or any other
trade name, trademark or trade dress substantially similar to
that used by Merck in connection with the Product or otherwise,
or as part of the name of Guilford or any Affiliate of Guilford,
after the Effective Date. Except to the extent otherwise
provided in the Supply Agreement, Guilford shall not give the
impression to the public, to physicians or to the pharmaceutical
marketplace that the Product is a product of Merck or in any way
connected with Merck (except in a public announcement permitted
under Section 10.9 or in accordance with Section 2.25).
Notwithstanding the foregoing or any other provision of this
Agreement or any of the other Transaction Documents to the
contrary, Merck hereby grants to Guilford a non-exclusive,
non-revocable, royalty free license, (i) which shall be in
effect only during the Transition Period and thereafter only so
long as necessary for Guilford to sell and distribute any MSD
Ireland Image Product (as defined in the Supply Agreement) that
is purchased by Guilford but not sold prior to the end of the
Transition Period, in and to any and all Marks
58
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
owned by Merck and used on or with the Product in the Territory,
to the extent reasonably necessary to permit Guilford to market,
promote, sell and distribute the MSD Ireland Image Product in
accordance with the Transition Services Agreement and (ii) which
shall be in effect indefinitely, for historical reference as
necessary to identify Guilford as Merck's successor with respect
to the Product in the Territory.
8.2 Nothing in this Agreement gives to Merck any right to use the
Trademark in association with, or for, any goods or services
sold, offered for sale, marketed or advertised in the Territory
except as set forth in Section 2.12 or in the Transition
Services Agreement. However, Merck and its Affiliates shall have
the right to use the Trademark in association with the Product;
provided that the Product is only sold, marketed or advertised
outside the Territory; and provided further that no such Product
is knowingly sold, offered for sale, marketed or advertised
outside the Territory for use in the Territory.
8.3 Until the later to occur of (i) two years after termination or
expiration of the Supply Agreement and (ii) the earlier of (A)
expiration of all Foreign Patents for the Product, and (B) the
date of entry of a Final Order of a court having jurisdiction of
the subject matter thereof declaring the last of the Foreign
Patents for the Product invalid:
(a) Guilford will not use the Trademark in association with
any drug, product, item or service other than the
Product, without Merck's specific written consent which
shall not be unreasonably withheld or delayed; and
(b) If Guilford intends to use, Manufacture, distribute or
sell the Product in the form of a stereoisomer or other
derivative other than the formulation
59
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
heretofore Manufactured and sold by Merck under the name
"AGGRASTAT," Guilford shall notify Merck not less than
six (6) months prior to such proposed use, Manufacture,
distribution or sale; and
(c) Guilford will not market, distribute or sell the Product
outside the Territory.
9 MANUFACTURE AND MARKETING OF PRODUCT AFTER EFFECTIVE DATE
9.1 SUPPLY OF PRODUCT
During the term of the Supply Agreement, MSD Ireland will
Manufacture and/or supply the Product and the API in accordance
with the terms and conditions of the Supply Agreement.
9.2 RETURNED PRODUCT
(a) Merck shall be responsible for and shall give credit for
all Returned Products sold or distributed on or prior to
the Effective Date (determined by reference to lot
number such that Merck shall be responsible for all lots
sold or distributed in their entirety prior to the
Effective Date) to (i) customers who purchased such
Returned Products from Merck and return such Returned
Products to Merck and (ii) Guilford if Guilford provides
documentation that it provided credit to a customer who
purchased such Returned Products from Merck and returned
such Returned Products to Guilford.
(b) Guilford shall be responsible for all Returned Products
sold on or after the Effective Date (determined with
reference to lot number such that Guilford shall be
responsible for all lots sold or distributed in whole or
in part on or after the Effective Date) to (i) customers
who purchased such Returned
60
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Products from Merck or Guilford, as the case may be, and
return such Returned Products to Guilford and (ii) Merck
if Merck provides documentation that it provided credit
to a customer who purchased such Returned Products from
Merck or Guilford, as the case may be, and returned such
Returned Products to Merck.
(c) With respect to any lot some (but not all) of which has
been sold or distributed by Merck prior to the Effective
Date, the parties shall, within 30 days of the Effective
Date, negotiate a credit to reflect Guilford's
undertaking of responsibility with respect to returns
out of that portion of such lots which were sold or
distributed by Merck on or prior to the Effective Date,
based on the portion of such lot sold prior to the
Effective Date as compared to the portion sold after the
Effective Date.
(d) From and after the Effective Date, Merck shall keep
adequate records of any Returned Product received by
Merck and shall promptly notify Guilford of receipt of
any Returned Product. Merck shall destroy such Returned
Product in which event Merck shall provide such
certifications regarding the destruction and cost of
destruction of such Returned Product as Guilford shall
reasonably require. Destruction by Merck of Returned
Product for which Merck shall be responsible pursuant to
Section 9.2(a) shall be at Merck's expense, and
destruction by Merck of Returned Product for which
Guilford shall be responsible pursuant to Section 9.2(b)
shall be at Guilford's expense. Guilford shall have the
right to be present at such destruction upon request if
such request is made a reasonable time in advance of
such destruction.
61
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(e) From and after the Effective Date and until the
expiration of the time allowed for return of any
Returned Products sold prior to the Effective Date,
Guilford shall keep adequate records of any Returned
Product received by Guilford and shall promptly notify
Merck of receipt of any Returned Product that is subject
to Section 9.2(a). Guilford shall destroy all such
Returned Product and shall provide such certifications
regarding the destruction and cost of destruction of
such Returned Product as Merck shall reasonably require.
Destruction by Guilford of Returned Product for which
Merck shall be responsible pursuant to Section 9.2(a)
shall be at Merck's expense, and destruction by Guilford
of Returned Product for which Guilford shall be
responsible pursuant to Section 9.2(b) shall be at
Guilford's expense. Merck shall have the right to be
present at such destruction upon request if such request
is made a reasonable time in advance of such
destruction.
9.3 CHARGEBACKS AND GPO ADMINISTRATIVE FEES.
(a) Merck and Guilford acknowledge that the Contracts may
not remain in place throughout the Transition Period.
However, as provided in the letter attached as Schedule
3.9, during the Transition Period Guilford will make
available to previously contracted customers the same
discounts on the same terms and conditions as have been
available under the Contracts immediately prior to the
Effective Date. The payment of such discounts involves
the administration and payment of chargebacks and the
payment of administrative fees to certain group
purchasing organizations. Merck will continue to
administer the chargeback system during the Transition
Period. Guilford shall have the right to make changes
consistent with the
62
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
existing structure in the discounts available to up to
fifty (50) customers at no additional charge upon
written notice to Merck, it being understood that
Guilford shall be responsible for customer interface in
connection with any such changes. If Guilford desires to
make more than the fifty (50) changes contemplated by
the previous sentence, it may do so but shall be
obligated to reimburse Merck $3,000 per change. Any such
changes shall become effective in accordance with
Merck's standard procedures but in no event prior to ten
(10) days following such notice. Guilford will be
responsible for all discounts and GPO administrative
fees paid by Merck in accordance with this Section 9.3
in the manner set forth in the Transition Agreement.
(b) Merck shall be responsible for processing all
chargebacks arising from sales of Product bearing
Merck's NDCs by wholesalers to customers in the
Territory through the Transition Period. Merck shall be
responsible for payment of all such chargeback claims
submitted prior to the Effective Date and through thirty
(30) days after the Effective Date. Guilford shall be
responsible for payment of all such chargeback claims
submitted more than thirty (30) days after the Effective
Date (including without limitation chargeback claims
arising from sales of any Supplied Product sold by Merck
as distributor for Guilford pursuant to the Transition
Services Agreement). Merck shall maintain and provide to
Guilford accurate and complete records of all chargeback
claims submitted prior to and through thirty (30) days
after the Effective Date.
(c) Merck shall be responsible for payment of all group
purchasing organization ("GPO") administrative fees
relating to sales of Product
63
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
bearing Merck's NDCs occurring prior to the Effective
Date and through the Effective Date. Guilford shall be
responsible for payment of all such administrative fees
relating to sales of Product occurring after the
Effective Date (including without limitation any
Supplied Product sold by Merck as distributor for
Guilford pursuant to the Transition Services Agreement).
Merck shall maintain and provide to Guilford accurate
and complete records necessary for Guilford to validate
GPO administrative fee invoices.
9.4 [INTENTIONALLY OMITTED]
9.5 MEDICAID REBATES. Merck shall be responsible for processing all
Medicaid Rebates for Product bearing Merck's NDCs. Guilford will
cooperate as necessary to facilitate the processing of Medicaid
Rebate claims by Merck. Merck shall be responsible for payment
of all such Medicaid Rebates with respect to Product dispensed
prior to the Effective Date and through forty-five (45) days
after the Effective Date. Guilford shall reimburse Merck for all
Medicaid Rebates paid by Merck with respect to Product dispensed
more than forty-five (45) days after the Effective Date.
9.6 GUILFORD NDC NUMBERS. Guilford shall at all times have sole and
exclusive responsibility for the processing and payment of any
and all Rebates arising from or with respect to Product bearing
Guilford's NDC numbers.
9.7 MEDICAID INFORMATION.
(a) With respect to any Product sold after the Effective
Date which bears an NDC number of Merck (including
without limitation Product sold by Merck as distributor
for Guilford under the Transition Services Agreement),
Merck shall determine, in accordance with all applicable
laws, the
64
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
following information: (a) the "best price" (as defined
under the Social Security Act, 42 U.S.C. Section
1396r-8(c)(1)(C)) for each formulation and package size
of Product identified by NDC number, (b) the "average
manufacturer price" (as defined under the Social
Security Act, 42 U.S.C. Section 1396r-8(k)(1)) ("best
price" and "average manufacturer price" are collectively
referred to as the "Drug Pricing Information"), and (c)
the number of sales units and net dollars including
discounts and rebates for each product and class of
trade, each identified by NDC number (the "Utilization
Information"). Merck shall use the Drug Pricing
Information and the Utilization Information in Merck's
reporting to the Centers for Medicare and Medicaid
Services. Guilford agrees to provide to Merck any
additional data or other information in Guilford's
possession regarding sales or pricing of the Product
which Merck reasonably requests as necessary for the
calculation of the rebates or the Drug Pricing
Information or Utilization Information as contemplated
in this Section 9.7 (including without limitation all
relevant information about Product sold by Guilford and
all discounts, price reductions and other applicable
adjustments). Merck shall compute and report the Drug
Pricing Information and Utilization Information in
accordance with all applicable laws, including, but not
limited to, 42 U.S.C. Section 1396r-8.
(b) With respect to Product sold by Guilford after the
Effective Date which bears an NDC number of Guilford, in
accordance with Section 9.6 of this Agreement, Guilford
shall be responsible for all Rebates and for compliance
with all requirements regarding the reporting of Drug
Pricing Information. Merck shall provide to Guilford the
baseline average
65
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
manufacturer price and any assumptions with respect to
the calculation thereof for the Product. In the event
that the Social Security Act or applicable regulations
are amended or interpreted to require different or
additional information, Merck shall supply such
information as Guilford may reasonably request in order
to satisfy such requirements.
9.8 FEDERAL SUPPLY SCHEDULE.
(a) Merck and Guilford shall work together with the Veterans
Administration National Acquisition Center to agree upon
a mutually acceptable date to remove the Product from
the Merck Federal Supply Schedule (the "MFSS") and add
the Product to the Guilford Federal Supply Schedule. For
any period after the Effective Date during which the
Product is on the MFSS, Merck will process all
chargebacks arising from purchases of Product by
entities purchasing off the MFSS from and after thirty
(30) days after the Effective Date and Merck will
continue to perform such processing services for the
Product as long as required by Applicable Laws;
provided, however, that notwithstanding any provision
hereof to the contrary, (A) Guilford will be responsible
for all chargebacks, GPO administrative fees, rebates
and discounts paid or credited by Merck to entities
purchasing off the MFSS with respect to purchases more
than thirty (30) days after the Effective Date, (B) if
Merck is required under Applicable Laws to continue to
list the Product on the MFSS after the supply of MSD
Ireland Image Product (as defined in the Supply
Agreement) has been depleted, Guilford will supply Merck
with sufficient Product bearing its own image and NDC
numbers ("Guilford Image Product") for Merck to
discharge all its obligations under Applicable Law
66
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
with respect to the Product and the MFSS, and (C)
Guilford will hold Merck harmless with respect to any
claim, harm or liability arising from Merck's activities
required under this paragraph, including without
limitation Merck's supplying of Guilford Image Product
under the MFSS.
(b) With respect to any Product sold after the Effective
Date which bears an NDC number of Merck (including
without limitation Product sold by Merck as distributor
for Guilford under the Transition Services Agreement),
Merck shall determine the "non-Federal Average
Manufacturer's Price" (as defined in Section 8126(h)(5)
of Section 603 of the Veterans Healthcare Act of 1992,
P.L.102-585) for each formulation and package size of
Product identified by NDC number. Guilford agrees to
provide Merck any additional information in Guilford's
possession regarding sales or pricing of the Product
which Merck reasonably requests as necessary for the
calculation of pricing required to maintain Products on
Merck's Federal Supply Schedule. Merck shall use all
such information in Merck's reporting to the Veterans
Administration National Acquisition Center. Merck shall
compute and report the non-Federal Average
Manufacturer's Price in accordance with all applicable
laws, including, but not limited to, P.L.102-585.
(c) With respect to Product sold after the Effective Date
which bears an NDC number of Guilford, Guilford will be
responsible for reporting all necessary information to
the Veterans Administration National Acquisition Center.
Merck shall provide to Guilford the necessary baseline
information required by Guilford to establish the
Products bearing Guilford's NDCs on Guilford's Federal
Supply Schedule. Notwithstanding anything in this
67
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Agreement to the contrary, however, Merck shall be
responsible for reporting the 2004 non-Federal Average
Manufacturer's Price for the Products to the Veterans
Administration National Acquisition Center.
9.9 SECTION 340B PRICING. Merck shall be responsible for all Section
340B reporting relating to Product bearing Merck's NDCs. Merck
shall provide Guilford with the necessary pricing information
for Guilford to include the Product bearing Guilford's NDCs on
Guilford's Section 340B contract executed with the Office of
Drug Pricing.
9.10 JOINT COMMITTEE. (a) After the Effective Date, a joint committee
consisting of Merck and Guilford staff (both technical and
commercial) will meet regularly in person or via teleconference
to share insights, data and opinions regarding Guilford's
development and execution of clinical and commercial plans with
regard to the Product in the Territory and Merck's development
and execution of clinical and commercial plans with regard to
the Product outside the Territory. Neither party will have the
right to interfere with or veto the other party's plans with
respect to such other party's geography (i.e., in the Territory
for Guilford, outside the Territory for Merck). The initial
members of the Joint Committee will be (i) for Merck, ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, M.D., and (ii) for Guilford, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D. and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇. The initial
meeting of the Joint Committee will take place within thirty
(30) days of the Effective Date.
(b) Notwithstanding any provision hereof to the contrary, in the
event of a Change of Control (as defined in the Supply
Agreement), regardless of whether Merck consents to such Change
of Control or terminates the Supply Agreement, at
68
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Merck's option, Sections 9.10 and 9.11 hereof will no longer
have any force or effect.
9.11 CLINICAL DATA
(a) Merck will be the owner of any new data relating to the
Product that is obtained or generated through studies or
research conducted or paid for, in whole or in part, by
Merck (collectively "Merck Data"). *. Guilford will be
the owner of any new data relating to the Product that
is obtained or generated through studies or research
conducted or paid for, in whole or in part, by Guilford
("Guilford Data"). (Merck Data and Guilford Data are
hereinafter collectively referred to as "Data".)
(b) Guilford will make any Guilford Data available to Merck
through the Joint Committee. Merck will make any Merck
Data available to Guilford through the Joint Committee.
When Data is to be used in regulatory filings, the party
supplying such Data to the other party will supply the
Data in the format to be utilized for the filing,
including the raw data in electronic format, and will
work, in cooperation with the other party, towards a
simultaneous global filing. All Data will be disclosed
to the other party (subject to appropriate
confidentiality provisions as determined by the
disclosing party) not less than ten business days prior
to any release by the disclosing party to the medical
community or the general public. After Data is made
public by the party owning such Data, the other party
will be able to use such Data for marketing and
promotion
69
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
within its own geography (i.e., Guilford in the
Territory, Merck outside the Territory).
9.12 PUBLICATIONS AND ABSTRACTS
(a) Merck hereby grants to Guilford a license, which shall
be perpetual and royalty-free, to use any Merck Data
solely for publications and abstracts subject to the
following restriction: Guilford shall submit to Merck
for prior Merck approval all manuscripts of publications
or abstracts using Merck Data as far in advance as
practicable and in no event less than forty-five (45)
days before such publications, and at least thirty (30)
days before such abstracts, are published or released to
the medical community or the general public. If Merck in
its reasonable discretion determines to reject the
proposed use of such Merck Data, then Guilford shall not
use or include such Merck Data in any publication or
abstract disseminated to the medical community or
general public.
(b) Guilford hereby grants to Merck a license, which shall
be perpetual and royalty-free, to use any Guilford Data
solely for publications and abstracts subject to the
following restriction: Merck shall submit to Guilford
for prior Guilford approval all manuscripts of
publications or abstracts using Guilford Data as far in
advance as practicable and in no event less than
forty-five (45) days before such publications, and at
least thirty (30) days before such abstracts, are
published or released to the medical community or the
general public. If Guilford in its reasonable discretion
determines to reject the proposed use of such Guilford
Data, then Merck shall not use or include such Guilford
Data in any publication or abstract disseminated to the
medical community or general public.
70
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(c) The licenses granted by the Parties to each other in
Section 9.11(b) shall be in addition to the rights
granted elsewhere in this Agreement or in the Supply
Agreement or Transition Services Agreement.
9.13 PCI CLINICAL RESEARCH
(a) Performance of PCI Clinical Research by Guilford. If
commercially REASONABLE, Guilford will perform a clinical study
program of Guilford's design, including clinical trials, aimed
at securing a PCI Claim for the Product ("PCI Clinical
Research"). For illustrative purposes, a trial of the scale and
cost of TARGET would fit the definition of "commercially
reasonable" if Guilford had a reasonable basis for believing or
expecting that in the view of the FDA the Guilford protocol,
including the end point(s), was adequate to conduct a study
aimed at obtaining a PCI Claim. The design and conduct of the
PCI Clinical Research will be consistent with industry standards
for studies of this type. Guilford will be solely responsible
for and will fund the PCI Clinical Research and any future
clinical development for the Product in the Territory. Guilford
will afford Merck an opportunity to review and comment on
Guilford's protocols for the PCI Clinical Research and
publications generated by Guilford relating to the Product in
connection with the PCI Clinical Research, but shall have no
obligation to implement any of Merck's comments into the design
of such Guilford protocols.
(b) Milestones. It is understood that the PCI Clinical Research
could benefit both parties and that Guilford's obligation to
perform such research is a material consideration for this
Agreement. Thus, if commercially reasonable as described above,
Guilford will conduct the PCI Clinical Research according to the
following timetable:
71
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Provide first Guilford protocol to Merck for review
within 30 days prior to its
scheduled meeting with the FDA;
Meet with the FDA by January 2005; and
Enroll first patient by January 2006.
Although Guilford will use all reasonable efforts to meet the
foregoing milestones, its success in doing so is dependent upon
receipt of FDA approval and all required regulatory
authorizations. To the extent that action or inaction by the FDA
results in delays in scheduling the above-referenced meeting
with the FDA or the commencement of the PCI Clinical Research,
the foregoing milestones will be adjusted accordingly.
(c) Merck's right of reference to PCI Data. Merck will have the
right to receive all PCI Data in accordance with Section 9.11
and will have the right of reference to all PCI Data for
research (including the performance of clinical trials) for any
purpose or indication (including Covered Indications and
Non-Covered Indications) and for any other purpose that is
consistent with Merck's obligations under Section 6.1 hereof. If
Merck, at its option, desires to use any PCI Data for purposes
of regulatory submissions to procure an expanded label outside
the Territory, Merck shall have and Guilford hereby grants,
subject to payment by Merck as contemplated by the last sentence
of this Section 9.13(c), a perpetual, royalty-free license to
use and reference any and all PCI Data and any and all data and
know-how in the NDA relating to the PCI Clinical Research and
the PCI Data for the purpose of regulatory development and
commercialization of the Product outside the Territory. In the
event that Merck desires to exercise its rights under such
license, Merck shall notify Guilford of such desire, and
Guilford shall then inform Merck of the total cost to
72
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Guilford of the PCI Clinical Research. In consideration of the
license granted pursuant to the preceding sentence, Merck shall
pay to Guilford up to one-half of such total cost, the specific
amount of which shall be agreed to by the parties in good faith
in light of the proposed use by Merck.
(d) Merck audit right. Merck shall have the right, through an
independent accounting firm that is reasonably acceptable to
Guilford, to audit Guilford upon reasonable notice in order to
verify the information provided to Merck pursuant to this
Section 9.13. Such audit will be at Merck's expense unless it is
determined that the cost figures provided to Merck overstated
the actual cost by ten percent (10%) or more, in which case the
cost of the audit will be paid by Guilford.
9.14 LIMITATION OF LIABILITY FOR ACTIONS AFTER THE EFFECTIVE DATE.
The Parties acknowledge and agree that after the Effective Date,
notwithstanding any provision of this Agreement, they will
remain as independent contractors and will not be engaged in a
partnership, joint venture or fiduciary relationship by virtue
of any activities contemplated by this Agreement, and they will
have no liability to each other arising from or under this
Agreement except as specifically set forth herein or in the
Supply Agreement, the Quality Agreement or the Transition
Services Agreement. Without limiting the foregoing,
participation by the Parties on the Joint Committee shall not be
deemed to create a partnership, joint venture or fiduciary
relationship and any such participation, and all acts or
omissions with respect to the Joint Committee and all
communications made by either party as a member of or the Joint
Committee or otherwise pursuant to Section 9.10 or 9.11 hereof
(including all Data disclosed by one party to another), shall be
deemed to be as a volunteer without consideration or obligation
of any kind whatsoever, and no such actions or communications
shall give rise to any
73
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
liability in contract or tort unless except to the extent that
such action or communication is illegal or constitutes willful
misconduct or violates the confidentiality provisions set forth
in Article 10.
74
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
10 CONFIDENTIALITY
10.1 Guilford will preserve, and will cause each of its Affiliates,
employees and agents to preserve, the confidentiality of the
Merck Confidential Information and the Joint Confidential
Information; provided that (i) Guilford may disclose such
information to its employees, attorneys, financial advisors,
lenders, agents and Affiliates on a need-to-know basis and, with
respect to Joint Confidential Information and the terms and
conditions of this Agreement and the other Transaction Documents
(including those set forth on Schedule 10), to accredited
potential investors in financings or related capital raising
transactions by Guilford or its Affiliates for purposes of such
financings or related capital raising transactions; provided
that Guilford shall not use or disclose any such Confidential
Information for the Manufacture of Product for sale or use
outside the Territory (Guilford represents and warrants that all
such Persons will be bound by this Article 10 or otherwise
subject to confidentiality obligations for the benefit of Merck
and that such Persons will use such Confidential Information
solely for the purposes on which the need to know was
established and will not disclose such Confidential Information
to any other Person), and (ii) Guilford and its Affiliates may
use and disclose any Merck Confidential Information and Joint
Confidential Information which has been publicly disclosed
(other than directly or indirectly by Guilford or any of its
employees, attorneys, financial advisors, lenders, agents and/or
Affiliates) or which is otherwise permitted to be disclosed
under this Agreement (including without limitation in accordance
with the terms of Section 2.23) or the other Transaction
Documents, and (iii) to the extent that Guilford or any
Affiliate may become legally compelled or required under
Applicable US Laws or Securities Laws to disclose any of such
Merck Confidential Information or Joint
75
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Confidential Information, Guilford or such Affiliate may (to the
extent so compelled or required) disclose such Confidential
Information if it shall have first used reasonable efforts in
good faith, and shall have afforded Merck the opportunity, to
obtain an appropriate protective order, or other satisfactory
assurance of confidential treatment, for the Merck Confidential
Information or Joint Confidential Information required to be so
disclosed.
10.2 Merck will preserve, and will cause each of its Affiliates,
employees and agents to preserve, the confidentiality of the
Guilford Confidential Information and the Joint Confidential
Information and will use and disclose such information only for
the purposes contemplated by this Agreement and the other
Transaction Documents (for avoidance of doubt, Merck may use and
disclose Joint Confidential Information for any purpose related
to Manufacturing the Product or for any other purpose subject to
the restrictions on Merck's post-Effective Date activities set
forth in Section 6.1), provided that (i) Merck may disclose such
information to its attorneys, financial advisors, lenders,
agents and Affiliates on a need-to-know basis and that such
persons will not use such information except for the purposes
contemplated by this Agreement and the other Transaction
Documents, (Merck represents and warrants that all such persons
will be bound by this Article 10 or otherwise subject to
confidentiality obligations for the benefit of Guilford and that
such Persons will use such Confidential Information solely for
the purposes on which the need to know was established and will
not disclose such Confidential Information to any other Person),
and (ii) Merck and its Affiliates may use and disclose any
Guilford Confidential Information and Joint Confidential
Information which has been publicly disclosed (other than
directly or indirectly by Merck or any of its employees,
attorneys, financial advisors, lenders,
76
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
agents and/or Affiliates) or which is otherwise permitted to be
disclosed under this Agreement or the Supply Agreement, provided
that, if such Confidential Information is Joint Confidential
Information, Merck will, and will cause any Affiliate or third
party manufacturer to, maintain its confidentiality only to the
extent that maintenance of its confidentiality does not
unreasonably interfere with Merck's or its Affiliates' or third
party manufacturer's ability to Manufacture the Product or to
use, market or sell the Product outside the Territory or
manufacture, use, market or sell any or all of the Excluded
Assets; and (iii) to the extent that Merck or any Affiliate may
become legally compelled to disclose any of such Guilford
Confidential Information or Joint Confidential Information,
Merck or such Affiliate may (to the extent so compelled)
disclose such Guilford Confidential Information if it shall have
first used reasonable efforts in good faith, and shall have
afforded Guilford the opportunity, to obtain an appropriate
protective order, or other satisfactory assurance of
confidential treatment, for the Guilford Confidential
Information or Joint Confidential Information required to be so
disclosed. Nothing in this Section 10.2 shall limit Merck's (or
its Affiliates') ability to use or disclose Joint Confidential
Information to Manufacture, have Manufactured, use and/or sell
the Product outside the Territory or manufacture, have
manufactured, use and/or sell any other product, including the
registration of the Product or any other product with any health
authority outside the Territory.
10.3 Notwithstanding any provision of this Agreement, the Supply
Agreement or any of the Transaction Documents to the contrary,
any Person with respect to whom participation, in any capacity,
in the transactions contemplated by this Agreement or the other
Transaction Documents has been discussed (and each employee,
representative, or other agent of such Person) may disclose to
any and all other
77
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Persons, without limitation of any kind, the tax treatment and
tax structure of the transactions contemplated by this Agreement
and the other Transaction Documents and all materials of any
kind (including opinions or other tax analyses) that are
provided to such Person relating to such tax treatment and tax
structure. The foregoing is intended solely to comply with the
presumption set forth in Treasury Regulation Section
1.6011-4(b)(3)(iii) and is not intended to permit the disclosure
of any information to the extent such disclosure is not required
in order to avoid any transaction contemplated by any of the
Transaction Documents being treated as a "reportable
transaction" within the meaning of Treasury Regulation Section
1.6011-4(b). This Section 10.3 shall not be construed as a
waiver of the attorney-client privilege or any other privileges,
including under Section 7525 of the Internal Revenue Code.
10.4 Notwithstanding the provisions of this Article 10, Merck
acknowledges and agrees that Guilford may be required to
disclose some or all of the Confidential Information included in
this Agreement and/or the other Transaction Documents, including
Joint Confidential Information or Merck Confidential Information
and the terms and conditions of the Transaction Documents, in
order to comply with its obligations under Securities Laws in
the Territory and Guilford shall not be deemed to be prohibited
from so doing; provided, however, that Guilford shall use
commercially reasonable efforts to seek confidential treatment
of all Merck Confidential Information and Joint Confidential
Information and the terms and conditions of the Transaction
Documents set forth on Schedule 10, and provided, further, that
to the extent permitted under Applicable US Laws and Securities
Laws, all Merck Confidential Information and Joint Confidential
Information shall be redacted from any publication of such
agreement or agreements. It is
78
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
understood and agreed that the Merck Confidential Information
contains confidential, competitive and proprietary information,
the public release of which would be seriously detrimental to
Merck. Guilford shall provide prompt written notice to Merck if
Guilford shall determine that any Merck Confidential Information
and/or Joint Confidential Information must be made public under
Applicable US Law or Securities Laws in the Territory,
specifically identifying such Merck Confidential Information
and/or Joint Confidential Information and the reason why it must
be made public, and in such event Merck shall have the right to
seek protection of the Merck Confidential Information and/or
Joint Confidential Information, as the case may be. Guilford
shall provide to Merck reasonable assistance in order to secure
available protections to limit the disclosure of Merck
Confidential Information and/or Joint Confidential Information,
as the case may be.
10.5 The obligations of confidentiality and non-use contained in this
Article 10 shall not extend or apply to Confidential Information
that:
(i) is in or enters the public domain without breach of this
Asset Agreement or the other Transaction Documents; or
(ii) is disclosed to the receiving party without restriction by
a third party having the right to disclose the same.
In addition, the obligations of confidentiality and non-use
contained in this Article 10 shall not extend or apply to
Confidential Information that (i) is first disclosed after the
Effective Date and (ii) can be shown to have been known by the
receiving party prior to such disclosure or is independently
developed by the receiving party.
79
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
10.6 Nothing in this Article 10 shall be interpreted to limit the
ability of either party to disclose its own Confidential
Information (not including Joint Confidential Information or the
terms and conditions of the Transaction Documents listed on
Schedule 10) to any other Person on such terms and subject to
such conditions as such party deems advisable or appropriate.
10.7 Unless otherwise agreed by the parties in a subsequent written
agreement, in the event of cancellation, termination or
expiration of the Supply Agreement, each party shall immediately
return to the other party (or at the option of the disclosing
party destroy and certify to the destruction of) all of the
other party's Confidential Information furnished in connection
with the Supply Agreement, including all copies or summaries
thereof.
10.8 The obligations of confidentiality and non-use contained in this
Article 10 relating to Joint Confidential Information shall
continue until the cancellation, termination or expiration of
the Supply Agreement; provided, however, that (i) if the Supply
Agreement is terminated pursuant to (A) Section 11.2 thereof by
Merck or (B) Section 11.7 thereof by Guilford, then the
obligations of confidentiality and non-use relating to Joint
Confidential Information with respect to Guilford (and its
Affiliates and agents) only shall continue for a period of ten
(10) years following such termination of the Supply Agreement
and (ii) if the Supply Agreement is terminated pursuant to
Section 11.2 thereof by Guilford, then the obligations of
confidentiality relating to Joint Confidential Information with
respect to Merck (and its Affiliates and agents) only shall
continue for a period of ten (10) years following such
termination of the Supply Agreement. The obligations of
confidentiality and non-use contained in this Article 10 with
respect to Guilford Confidential Information and Merck
Confidential Information shall continue until
80
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
ten (10) years following the cancellation, termination or
expiration of the Supply Agreement.
10.9 For a period of thirty (30) days after the Effective Date, no
press release or public announcement regarding the terms of this
Agreement or the Supply Agreement shall be made by either party
without the prior written consent (which shall not be
unreasonably withheld and shall be provided or denied within 48
hours of the date such consent to any such press release, public
announcement or other communication to the public is requested
by the requesting party) of the other party with respect to the
form, content, timing and means of dissemination of such press
release, public announcement or other communication to the
public (other than Product advertising, provided that Guilford
shall not use the word "Merck" or the other words or names
referred to in Section 8.1 except to the extent otherwise
permitted in the Transaction Documents); provided, that (i)
public announcements substantially in the forms attached hereto
as Schedules 10.9(a) and 10.9(b) and (ii) letters to
wholesalers, doctors, GPOs and other customers substantially in
the form reviewed by Merck prior to the Effective Date, in each
case are hereby approved by both parties.
10.10 Notwithstanding any obligation contained in this Agreement
and/or the Supply Agreement to the contrary, Merck shall not be
required to disclose any information of a third party
manufacturer to the extent (in Merck's reasonable judgment) that
the disclosure of such information is prohibited by an agreement
as to confidentiality with such third party manufacturer;
provided, that Merck shall cooperate with Guilford in obtaining
such third party consent; but shall not be held liable for
failure to obtain such consent.
11 RIGHT OF FIRST NEGOTIATION; RIGHT OF FIRST REFUSAL FOR CANADA
81
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
11.1 RIGHT OF FIRST NEGOTIATION.
(a) If at any time prior to expiration of the Assigned Patents Merck
chooses to sell or license the rights to promote, market and
sell the Product (i) in any countries or group of countries
outside the Territory except to the extent Canada is included
among such countries (in which case Section 11.2 shall apply) or
(ii) in any one specific country outside the Territory unless
that country is Canada (in which case Section 11.2 shall apply),
Guilford will have a right of first negotiation with respect to
the purchase or license of all but not less than all of such
rights from Merck. Such right of first negotiation shall be
exercised as follows: Merck will provide Guilford with written
notice of such negotiation opportunity prior to initiating
discussions with any third party. Such notice shall include a
data sheet (the "Data Sheet") setting forth the proposed
territory, the proposed indication, applicable patent rights and
expiration dates, sales in such proposed territory for the last
five (5) years by month and year and sales/promotional support
information. From the date of delivery of such written notice
and Data Sheet and for a period of up to sixty (60) days
thereafter, Guilford shall have the exclusive right to enter
into negotiations with Merck for such sale or license and Merck
shall negotiate in good faith with Guilford during such period,
subject to the following. If Guilford desires to engage in
discussions with respect to such Data Sheet, it shall notify
Merck of such desire within ten (10) business days of receipt of
the Data Sheet and Merck and Guilford shall cause a meeting of
their respective management representatives within ten (10)
business days of Guilford providing such notice. Within ten (10)
business days after such meeting, Guilford shall notify Merck
whether it desires to continue such discussions and, if not,
whether Guilford in good faith would be interested in future
discussions regarding
82
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
any one or a subset of the countries in the proposed territory.
If Guilford notifies Merck that it desires to continue
discussions regarding the Data Sheet, Merck and Guilford shall
negotiate in good faith the terms and conditions of such sale or
license for the remaining portion of such sixty (60) day period.
If after engaging in such discussions for the remainder of such
period the parties are unable to reach a mutually acceptable
agreement, Merck shall have the right to freely negotiate with
third parties for the sale or license of the rights to promote,
market and sell the Product (i) in all countries or any group of
countries outside the Territory (other than Canada) that were
included in the Data Sheet or (ii) in any one specific country
outside the Territory (other than Canada) that was included in
the Data Sheet; provided, however, that if Merck elects to
proceed with the sale or license of such rights in some, but not
all, of the countries in the proposed territory contemplated by
the Data Sheet, it may do so but Guilford shall retain the right
of first negotiation contemplated by this Section 11.1(a) to the
extent of any country with respect to which (i) Guilford
indicated it was interested in future discussions and (ii) Merck
has not sold or licensed the rights in the Product in accordance
with this Section 11.1(a) in such country(ies).
(b) If at any time prior to expiration of the Assigned Patents,
Guilford chooses to sell or license any of the Acquired Assets
or the rights acquired thereunder to a third party, Merck shall
have a right of first negotiation with respect to the purchase
or license of all but not less than all of such Acquired Assets
or rights from Guilford. Such right of first negotiation shall
be exercised as follows: Guilford will provide Merck with
written notice of such negotiation opportunity prior to
initiating discussions with any third party. From the date of
delivery of such written notice and for a period of up to sixty
(60) days thereafter, Merck shall have the
83
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
exclusive right to enter into negotiations with Guilford for
such sale or license and Guilford shall negotiate in good faith
with Merck during such period, subject to the following. Within
ten (10) business days of the receipt of such notice, Merck
shall provide written notice of whether it desires to exercise
its right of first negotiation. In the event Merck provides
notice that it desire to exercise its right of first
negotiation, Guilford and Merck shall cause a meeting of their
respective management representatives within ten (10) business
days to negotiate in good faith the terms and conditions of such
sale or license. If after engaging in such discussions for such
sixty (60) business day period the parties are unable to reach a
mutually acceptable agreement, Guilford shall have the right to
freely negotiate with third parties for the sale or license of
the Acquired Assets and to consummate any such sale.
11.2 RIGHTS OF FIRST NEGOTIATION AND FIRST REFUSAL WITH RESPECT TO
CANADA.
If at any time prior to expiration of the Assigned Patents Merck
chooses to sell or license the rights to promote, market and
sell the Product in Canada, Guilford will have both a right of
first negotiation and a right of first refusal with respect to
the purchase or license of all but not less than all of such
rights from Merck. Such rights of first negotiation and first
refusal shall be exercised as follows. Merck will provide
Guilford with written notice of such negotiation opportunity
prior to initiating discussions with any third party. Such
notice shall include a data sheet (the "Canada Data Sheet")
setting forth the proposed indication, applicable patent rights
and expiration dates, sales in such territory for the past five
(5) years by month and year and sales/promotional support
information. From the date of delivery of such written notice
and Canada Data Sheet and for a period of up to sixty (60) days
thereafter, Guilford shall have the exclusive right to enter
84
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
into negotiations with Merck for such sale or license and Merck
shall negotiate in good faith with Guilford during such period,
subject to the following. If Guilford desires to engage in
discussions with respect to such Canada Data Sheet, it shall
notify Merck of such desire within ten (10) business days of
receipt of the Canada Data Sheet and Merck and Guilford shall
cause a meeting of their respective management representatives
within ten (10) business days of Guilford providing such notice.
Within ten (10) business days after such meeting, Guilford shall
notify Merck whether it desires in good faith to continue such
discussions. If Guilford does not indicate it desires to
continue such discussions or, after engaging in such discussions
for such sixty (60) day period the parties are unable to reach a
mutually acceptable agreement, Merck shall have the right to
freely negotiate with third parties for the sale or license of
the rights to promote, market and sell the Product in Canada;
provided, that notwithstanding the foregoing, Merck shall not
execute an agreement with a third party for the sale or license
of the rights to promote, market and sell the Product in Canada
unless Merck shall provide Guilford a right of first refusal as
follows: If Merck receives a bona fide, third party offer to
purchase such rights in Canada (the "Offer"), Merck shall
provide written notice to Guilford setting forth in reasonable
detail the terms and conditions of the Offer between Merck and
such third party. Upon receipt of such Offer and for a period of
thirty (30) days thereafter, Guilford shall have the right to
provide Merck notice that it desires to enter into negotiations
on the same terms and conditions as contained in the Offer. In
such event, Merck and Guilford shall negotiate in good faith to
reach definitive agreements within thirty (30) days of such
notice from Guilford. In the event that Guilford does not elect
to proceed with negotiations or the parties are unable to reach
definitive
85
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
agreements within such thirty (30) day period, then Merck shall
have the right to enter into an agreement with such third party
substantially on the terms and conditions reflected in the Offer
presented to Guilford pursuant to this Section 11.2. In the
event that the terms and conditions of the Offer between Merck
and such third party shall materially change after delivery of
the Offer to Guilford, Guilford shall have a separate right of
first refusal as to such revised Offer for ten (10) business
days following receipt of such notice in accordance with this
Section 11.2.
12 SURVIVAL; REMEDIES
12.1 All representations and warranties of the parties contained
herein shall survive the Effective Date until the last to occur
of (a) ten (10) years after the Effective Date or (b) two years
after the expiration or termination of the Assigned Patents. The
covenants and agreements of Merck and Guilford hereunder that
require by their terms performance or compliance on and after
the Effective Date shall continue in force thereafter in
accordance with their terms or if no term is specified,
indefinitely. After the Effective Date all licenses and rights
of reference granted hereunder to either party shall survive
expiration or termination of this Agreement.
MATERIAL BREACH; EQUITABLE REMEDIES
12.2 The parties recognize that material breach by a party of any of
the obligations set forth in Article 10 of this Agreement would
require a different remedy than other possible material breaches
of this Agreement. In the event that such a material breach
occurs or is threatened, damages to the non-breaching party will
not be readily ascertainable, irreparable harm to the such party
may occur, and such party will not have an adequate remedy at
law. The parties therefore stipulate
86
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
and agree that in the event a material breach of any of the
obligations set forth under Article 10 of this Agreement occurs
or is threatened, the non-breaching party may seek equitable
relief from any competent court in New Jersey or in the
jurisdiction where the breach occurs or is threatened (including
without limitation a temporary restraining order and/or
preliminary and permanent injunction) notwithstanding the
arbitration provisions set forth in Section 15.12 hereof.
13 INDEMNIFICATION
13.1 INDEMNIFICATION BY MERCK. Merck shall indemnify and hold
harmless Guilford, its Affiliates and its and their directors,
officers, shareholders, employees and agents, and their
respective successors and permitted assigns (the "Guilford
Indemnitees"), against, and defend the Guilford Indemnitees
against, any and all claims, actions, causes of action, suits,
proceedings, damages, losses, liabilities and expenses
(including, without limitation, reasonable attorneys' fees and
expenses) (collectively "Claims") and the cost of remedial
action under Applicable Laws and regulations incurred or
suffered by Guilford Indemnitees arising out of (i) any
misrepresentation or breach of covenant, agreement,
representation or warranty of Merck contained in this Agreement
or (ii) any Excluded Liability; provided, however, that Guilford
shall not be entitled to any indemnification under this Section
13.1 or any other basis of action (including without limitation
common law tort and indemnity law), except for claims based on
gross negligence or willful misconduct arising under this
Agreement, unless and until the amount of claims for which
Guilford is entitled to be indemnified exceeds in the aggregate
US $250,000 (the "Basket"); and further provided that the total
and aggregate liability of Merck for indemnity of Guilford
Indemnitees
87
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
under this Section 13.1 (and the comparable provisions of the
other Transaction Documents) or any other basis of action
(including without limitation common law tort and indemnity
law), except for claims based on gross negligence or willful
misconduct arising under this Agreement, shall not exceed the
aggregate of (i) US $84,000,000.00, plus (ii) any and all
Royalty Payments paid to Merck through the date when a payment
pursuant to this Section 13.1 becomes due (the "Maximum"); and
provided further that the indemnification by Merck pursuant to
this Section 13.1 shall relate exclusively to Claims arising
under this Agreement and shall not relate to any damage, loss,
liability and expense or other matter arising under any
representation, warranty, covenant or agreement in the Supply
Agreement or the Transition Services Agreement.
13.2 INDEMNIFICATION BY GUILFORD. Guilford shall indemnify and hold
harmless Merck, its Affiliates and its and their directors,
officers, shareholders, employees and agents, and their
respective successors and permitted assigns (the "Merck
Indemnitees"), against, and defend Merck Indemnitees against any
and all Claims and the cost of remedial action under Applicable
Laws and regulations incurred or suffered by Merck Indemnitees
arising out of (i) any misrepresentation or breach of covenant,
agreement, representation or warranty of Guilford contained in
this Agreement, or (ii) subject to the accuracy of the
representations and warranties contained in Section 4.1, any
Assumed Liability; provided, however, that the total and
aggregate liability of Guilford for indemnity of Merck
Indemnitees under this Section 13.2 or any other basis of action
(including without limitation common law tort and indemnity
law), except for claims based on gross negligence or willful
misconduct arising under this Agreement, shall not exceed the
Maximum.
88
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
13.3 INDEMNIFICATION; NOTICE AND SETTLEMENTS. A party seeking
indemnification pursuant to Section 13.1 or 13.2 (an
"indemnified party") shall give prompt notice to the party from
whom such indemnification is sought (the "indemnifying party")
of the assertion of any claim, or the commencement of any action
or proceeding, in respect of which indemnity may be sought
hereunder. The indemnifying party shall have the right to, and
shall at the request of the indemnified party, assume the
defense, with counsel reasonably satisfactory to the indemnified
party, of any such suit, action or proceeding at its own
expense; provided, that in the event any such indemnifying party
shall assume the defense of any such claim, such indemnifying
party may reserve its rights as to its ultimate liability with
respect to the Claim but in such event, and until the
indemnifying party shall assume liability for such Claim as an
indemnified claim under this Article 13, the indemnified party
shall have the right to participate in such defense and to
consent to any proposed settlement. An indemnifying party shall
not be liable under Section 13.1 or 13.2 for any settlement
effected without its consent of any claim, litigation or
proceeding in respect of which indemnity may be sought
hereunder, which consent shall not be unreasonably withheld.
13.4 GUILFORD INSURANCE. At all times until the later of (a) ten
years after the Effective Date or (b) two years after the date
when Merck has proffered the last Products which it is obligated
to proffer to Guilford under the Supply Agreement and the Supply
Agreement is no longer in effect, Guilford shall maintain
standard products/liability/completed operations insurance
covering all claims against Guilford whatsoever and howsoever
arising from the Manufacture, distribution, sale or use of the
Product by Guilford, its servants, employees, agents and
assigns, with coverage limits of not less than $10,000,000 per
occurrence and in
89
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
the aggregate a deductible of not more than $1,000,000 for all
claims made within any year (the "Insurance"). Without
limitation of the foregoing, the Insurance obtained by Guilford
shall be effective commencing on the Effective Date and shall
cover Merck as an additional insured with respect to such
claims. Guilford shall continue to make premium payments on the
Insurance for as long as necessary to keep the Insurance in full
force and effect during the required period. If Guilford fails
for any reason to make such premium payments in a timely
fashion, Merck shall have the right to make such payments at the
expense of Guilford. Guilford shall request its insurer or its
agent give Merck prompt written notice if Guilford fails to make
a required premium payment in a timely fashion such that Merck
shall have not less than ten (10) business days after receipt of
such notice to make such premium payments. Guilford shall
immediately notify Merck of any change in the status of the
Insurance and shall, at Merck's request, provide Merck with a
certificate of insurance attesting that the Insurance remains in
full force and effect.
14 MISCELLANEOUS
14.1 NOTICES. All notices, requests and other communications to any
party hereunder shall be in writing and shall be sent by fax and
by first class mail or nationally recognized overnight delivery
service:
If to Merck to:
Merck & Co., Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Executive Director, USHH Business Development
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
90
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Legal Department UG4A-45
Merck & Co., Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Guilford, to:
Guilford Pharmaceuticals Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Guilford Pharmaceuticals Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as such party may hereafter specify by
written notice to the other party. Each such notice, request or
other communication shall be effective when received at the
address specified in this Section 14.1.
14.2 EXPENSES. All legal and other costs and expenses incurred in
connection herewith and the transactions contemplated hereby
shall (except as otherwise provided herein) be paid by the party
incurring such expenses.
14.3 BULK SALES STATUTES. Guilford hereby waives compliance by Merck
with any applicable bulk sales statutes in any jurisdiction in
connection with the transactions under this Agreement. In
consideration of such waiver, Merck will indemnify and hold
Guilford harmless for any claim asserted by a third party
against Guilford arising from any alleged lack of compliance
with any applicable bulk sales statutes.
91
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
14.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective
successors and assigns. This Agreement may not be assigned by
either party without the prior written consent of the other
party hereto, which consent shall not be unreasonably withheld
or delayed; provided, that (i) Guilford shall have the right to
grant a security interest in or collaterally assign this
Agreement to the extent required in connection with its
financing arrangements relating to the transactions contemplated
by this Agreement and the Transaction Documents upon written
notice to Merck, such grant or assignment to include the right
of the grantee or the assignee to foreclose upon such security
interests as collateral upon default by Guilford and, in such
event, to sell, assign, license or otherwise dispose of such
security interest or collateral to a third party; provided,
however, that any such sale, assignment, license or other
disposal shall be subject to the provisions of Section 11.3 of
the Supply Agreement to the extent applicable, and (ii) each of
Guilford and Merck shall have the right to assign this Agreement
to any of their respective Affiliates without the prior written
consent of the other party, provided that no such assignment of
this Agreement shall relieve the assignor of any of its
obligations or liabilities under this Agreement. Any attempted
assignment in violation of this Section 14.4 shall be void.
Notwithstanding the foregoing, the prohibition on assignment set
forth in this Section 14.4 shall not apply to any assignment
that constitutes a Change of Control, which shall be governed by
the provisions of Section 7.10.
14.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement, including, without
limitation, the Schedules hereto, together with the other
Transaction Documents, embodies the entire agreement of the
parties hereto with respect to the subject matter
92
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
hereof and supersedes any and all prior agreements with respect
thereto. No waiver, amendment or modification of any provision
hereof or of any right or remedy hereunder shall be effective
unless in writing and signed by the party against whom such
waiver, amendment or modification is sought to be enforced.
14.6 RELATIONSHIP OF SUPPLY AGREEMENT, QUALITY AGREEMENT AND
TRANSITION SERVICES AGREEMENT. Notwithstanding Section 14.5
above or any other provision of this Agreement or the Supply
Agreement, Quality Agreement or the Transition Services
Agreement to the contrary, the Supply Agreement, Quality
Agreement, the Transition Services Agreement and this Agreement
shall each stand as independent agreements between the parties.
Without limitation of the foregoing, the provisions of this
Agreement, the Supply Agreement, Quality Agreement and the
Transition Services Agreement with respect to indemnification by
Guilford and Merck shall remain independently effective and none
of such contracts shall be deemed to supersede, augment or limit
the indemnification obligations imposed on Guilford or Merck by
the other, except that the Maximum shall be cumulative under all
such agreements.
14.7 CAPTIONS; CONSTRUCTION. Captions herein are inserted for
convenience of reference only and shall be ignored in the
construction or interpretation of this Agreement. Unless
otherwise specified, the words "herein", "hereof" and terms of
like import shall be deemed to refer to the Agreement as a whole
and not merely to a single part thereof.
14.8 GOVERNING LAW. This Agreement shall be governed by, interpreted
and construed, and all claims and disputes, whether in tort,
contract or otherwise be resolved in accordance with the
substantive laws of the State of New Jersey without reference to
any rules of conflict of laws thereof.
93
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
JURISDICTION; VENUE; ARBITRATION AND OTHER REMEDIES
14.9 JURISDICTION. In the event of any controversy or claim arising
out of or relating to this Agreement, performance hereunder,
termination hereof, or relationship created hereby, each party
irrevocably submits to the exclusive jurisdiction of the courts
of the State of New Jersey and the Federal courts of the United
States District Court for the District of New Jersey for the
purposes of any suit, action or other proceeding arising out of
this Agreement or transactions contemplated hereby. Each party
irrevocably and unconditionally waives any objection to the
laying of venue in the state and Federal courts of New Jersey as
stated above and that any such action was brought in an
inconvenient forum. Notwithstanding the foregoing:
14.10 INJUNCTION. In the event of a threatened disclosure in violation
of this Agreement, either party shall have the right
(notwithstanding Section 14.11 below) to seek injunctive relief
from any competent court in New Jersey or in the jurisdiction
where the disclosure is threatened to prevent such disclosure
pending resolution of the merits of the dispute;
14.11 ARBITRATION. Subject to Sections 12.2 and 14.10, any
controversy, claim or dispute between the parties hereto arising
out of or relating to the performance, construction,
interpretation or enforcement of this Agreement shall be
submitted to binding confidential arbitration pursuant to the
Federal Arbitration Act, 9 U.S.C. Section 1 et seq. in
accordance with the Rules of Commercial Arbitration of the
American Arbitration Association or its successor. Any
arbitration pursuant to this Agreement shall be conducted in New
Jersey by three neutral arbitrators selected by the American
Arbitration Association. The judgment upon the award rendered in
any such arbitration shall be final and binding upon the parties
and
94
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
may be entered in any court having jurisdiction thereof. All
fees and expenses of the arbitrators and all other expenses of
the arbitration, except for attorney's fees, shall be shared
equally by the parties. Each party shall bear its own attorneys
fees and costs.
14.12 CONSENT AND WAIVER REGARDING SERVICE OF PROCESS AND PERSONAL
JURISDICTION. In any action, suit, arbitration or proceeding to
enforce the rights of either party under this Agreement or
otherwise arising out of this Agreement or from any acts,
omissions or activities of either party arising from or related
in any way to this Agreement or the transactions contemplated
hereby, each party, by execution and delivery of this Agreement,
expressly and irrevocably consents to the service of any
complaint, summons, notice or other process relating to any such
action, suit, arbitration or proceeding by delivery thereof to
it by hand or by any other manner provided for in Section 14.1
hereof. Each party hereby expressly and irrevocably waives any
claim or defense in any such action, suit, arbitration or
proceeding based on any alleged lack of personal jurisdiction,
improper venue, forum non conveniens or any similar doctrine or
theory.
14.13 WAIVER OF JURY TRIAL. In any action, suit, arbitration or
proceeding to enforce the rights of either party under this
Agreement or otherwise arising out of this Agreement or from any
acts, omissions or activities of either party arising from or
related in any way to this Agreement or the transactions
contemplated hereby, the parties hereto, by execution and
delivery of this Agreement, expressly and irrevocably waive
their right to a jury trial and stipulate that any such action,
suit or proceeding shall be tried to the court (or arbitrator if
the proceeding is under Section 14.12 hereof).
95
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
14.14 WAIVER. No waiver by any party in one or more instances of any
of the provisions of this Agreement or the breach thereof shall
establish a precedent for any other instance with respect to
that or any other provision. Furthermore, in case of waiver of a
particular provision, all other provisions of this Agreement
will continue in full force and effect.
14.15 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable, all other provisions shall
nevertheless continue in full force and effect.
14.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute but one and the same
instrument.
14.17 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement, express
or implied, is intended to confer upon any third party any
rights, remedies, obligations or liabilities.
14.18 COMPLIANCE WITH LAWS AND REGULATIONS. In performing their
obligations pursuant to this Agreement, the parties hereto agree
and covenant that they will comply with all applicable federal,
state, and local laws and regulations.
14.19 NO PRESUMPTION. There shall not be any presumption against
either party hereto on the ground that such party was
responsible for drafting or preparing the term sheet or this
Agreement or any part of either of such documents.
96
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
IN WITNESS WHEREOF, this Agreement has been signed by authorized
representatives on behalf of each of the parties hereto as of the day and year
first above written.
MERCK & CO., INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman, President and Chief Executive Officer
GUILFORD PHARMACEUTICALS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
Title: Chairman, President and Chief Executive Officer
97
EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
INDEX TO SCHEDULES
Schedule A Trademark
Schedule B NDA and IND
Schedule C Documentation
Schedule D Form of Trademark Assignment
Schedule E Form of Patent Assignment
Schedule F Form of Assignment and ▇▇▇▇ of Sale
Schedule 1.10 Assigned Patents
Schedule 1.12 Clinical Data and Materials
Schedule 1.14 Contracts
Schedule 1.34 Logo
Schedule 1.38 Marketing Materials
Schedule 1.50 Process Patents
Schedule 1.55 Related Patents
Schedule 1.65 TARGET Materials
Schedule 3.2(d) Form of FDA notice (Merck)
Schedule 3.2(g) Assets to be Delivered on Effective Date
Schedule 3.3 Form of FDA notice (Guilford)
Schedule 3.9 Form of Contract Notice
Schedule 4.1(j) Pending or Threatened Claims
Schedule 4.1(m) Licenses
Schedule 4.1(p) Litigation
Schedule 4.1(q) Unreported Adverse Experiences
Schedule 4.1(v) Consents, Approvals and Rights of Third Parties
Schedule 4.1(y) Clinical Trials
Schedule 10 Confidential Information
Schedules 10.9(a) and 10.9(b) Approved Public Announcements
#The Company has omitted certain schedules in accordance with Regulation S-K
601(b)(2). The Company will furnish the omitted schedules to the Commission
upon request.
