CONFIDENTIAL TREATMENT REQUESTED BY ▇▇▇▇ ▇▇▇▇▇ ▇.▇.
EXHIBIT 4(A)
LICENSE AND COLLABORATION AGREEMENT
dated October 20, 2003
by and between
ORGANON (IRELAND) LTD.
and
PFIZER INC.
TABLE OF CONTENTS
Page
ARTICLE 1 - DEFINITIONS.................................................... 1
ARTICLE 2 - SCOPE OF THE COLLABORATION..................................... 18
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES................................. 20
ARTICLE 4 - PRODUCT DEVELOPMENT............................................ 24
ARTICLE 5 - MANUFACTURING AND SUPPLY....................................... 28
ARTICLE 6 - COMMERCIALIZATION.............................................. 30
ARTICLE 7 - REGULATORY MATTERS............................................. 40
ARTICLE 8A - REPORTS....................................................... 43
ARTICLE 8 - MILESTONES..................................................... 45
ARTICLE 9 - REVENUE SHARING AND ROYALTIES.................................. 47
ARTICLE 10 - DECISION MAKING............................................... 52
ARTICLE 11 -INTELLECTUAL PROPERTY.......................................... 60
ARTICLE 12 - CLAIMS........................................................ 65
ARTICLE 13 - TERM AND TERMINATION.......................................... 69
ARTICLE 14 - CONFIDENTIALITY............................................... 78
ARTICLE 15 - DISPUTE RESOLUTION............................................ 80
ARTICLE 16 - MISCELLANEOUS................................................. 81
SCHEDULE 1.2 - [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]...................... 86
SCHEDULE 1.15 - [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]...................... 87
SCHEDULE 1.26 - DESCRIPTION OF COMPOUND.................................... 88
SCHEDULE 1.33 - CO-PROMOTION COUNTRIES..................................... 89
SCHEDULE 1.40 - MINIMUM DETAIL REQUIREMENTS................................ 92
SCHEDULE 1.94 - ORGANON PATENT RIGHTS...................................... 93
SCHEDULE 1.114 - PRODUCT PROFILE........................................... 97
1
SCHEDULE 1.133 - ROYALTIES TO [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]........ 98
SCHEDULE 3.1(viii) - THIRD PARTY DEVELOPMENT AND MANUFACTURE AGREEMENTS.... 99
SCHEDULE 4.1 - DEVELOPMENT PLAN............................................ 100
SCHEDULE 4.8 - METHODOLOGY FOR TRACKING SALES FOR NEW INDICATIONS.......... 101
SCHEDULE 6.3 - MARKETING COSTS............................................. 102
SCHEDULE 6.4 - REDUCTION OF DETAILING REQUIREMENTS AND MARKETING COST
OBLIGATIONS................................................................ 104
SCHEDULE 9.8 - CURRENT MANUFACTURING PROCESS............................... 105
SCHEDULE 13.5(II)(A) -[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]............ 106
SCHEDULE 16.14 - JOINT PRESS RELEASE....................................... 107
2
LICENSE AND COLLABORATION AGREEMENT
This License and Collaboration Agreement (hereinafter the "Agreement"), is made
this 20th day of October, 2003, by and between:
Organon (Ireland) Ltd., an Irish company, having an address at ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ (hereinafter "Organon"),
and
Pfizer Inc., a corporation organized under the laws of the State of Delaware,
having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(hereinafter "Pfizer").
WHEREAS, Organon is the owner of confidential data and know-how in relation to
a pharmaceutical compound known as asenapine with the potential application, if
successfully developed, approved by Regulatory Authorities (as defined below)
and commercialized in product form, in the treatment of schizophrenia and
bipolar disorders;
WHEREAS, Organon has identified the need for additional technical, commercial
and financial resources which are not available within its own organization in
order to carry out and complete the successful development, obtain Regulatory
Approval and commercialize the Product (as defined below) and thus requires the
collaboration of a party with appropriate expertise, resources and reputation
in the central nervous system ("CNS") field;
WHEREAS, Pfizer has considerable experience in the research, development and
commercialization of pharmaceutical products, particularly in the CNS field,
and has the technical, commercial and financial resources to collaborate with
Organon on the development of the Product, to obtain Regulatory Approval for
and Launch (as defined below) the Product in accordance with the terms of this
Agreement; and
WHEREAS, Organon and Pfizer have agreed to collaborate on the development and
commercialization of the Product, all as more particularly described in, and
subject to the terms and conditions of this Agreement.
NOW THEREFORE, the Parties mutually agree as follows:
ARTICLE 1
DEFINITIONS
Whenever used in this Agreement, unless otherwise clearly required by the
context, the following terms will have the following meanings and will include
both the singular and the plural.
1.1 "Act" means both the United States Food, Drug and Cosmetic Act, as
amended from time to time, and the regulations promulgated under the foregoing.
1.2 "[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]" means the clinical study described
in Schedule 1.2 to this Agreement.
1
1.3 "Affiliate" of a Party means any entity which, through ownership of a
majority of shares or otherwise, either directly or indirectly, is in control
of, controlled by or under common control with such Party, and for so long as
such control shall continue. For the avoidance of doubt, neither of the Parties
to this Agreement shall be deemed to be an "Affiliate" of the other solely as a
result of their entering into this Agreement.
1.4 "Agreement" means this document, including the Schedules hereto, each
of which is incorporated by reference herein.
1.5 "Alliance Agreements" means this Agreement, the Xanax Agreement, the
Intermediate Supply Agreement, the Primary Packaged Product Supply Agreement,
the Finished Product Supply Agreement and the Guaranty.
1.6 "Application for Regulatory Approval" means the foreign equivalent to
an NDA in Countries of the Territory other than the United States.
1.7 "Bankruptcy Code" means 11 U.S.C par. 101-1330, as amended.
1.8 "beneficial ownership" (and other correlative terms) by a Person
means, with respect to any security: (i) such Person or any of such Person's
subsidiaries directly or indirectly owns such security; (ii) such Person or any
of such Person's subsidiaries has the right to acquire such security (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; or (iii) ownership, direct or indirect, by
any other Person with which such Person or any of such Person's subsidiaries
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of such security; provided, however, that a Person
shall not be deemed to have beneficial ownership of any security by virtue of
an agreement, arrangement or understanding to vote such security that arises
solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Securities Exchange Act of 1934, as
amended.
1.9 "Business Day" means a day that is not a Saturday, Sunday or a day on
which banking institutions in New York, New York or Geneva, Switzerland, are
authorized by Law to remain closed.
1.10 "Calendar Quarter" means each of the periods ending on March 31,
June 30, September 30 and December 31.
1.11 "CCC" means the Country Commercialization Committees described in
Article 10.6.
1.12 "CDRC" means the Clinical Development/Regulatory Committee described
in Article 10.3.
1.13 "cGMP" means the then-current Good Manufacturing Practices (i) in
the Country where such manufacture occurs and (ii) in all of the Countries in
which a Party is Developing, Co-Promoting and/or otherwise marketing and
selling the Product, as promulgated by the FDA and/or other Regulatory
Authorities.
1.14 "Change in Control" means, with respect to a Party, an event
described in (i), (ii), (iii) or (iv) where:
(i) Creation of New Control Person:
2
(a) solely with respect to Pfizer, any Person or group of
Persons acquires beneficial ownership of Voting Stock of Pfizer
entitling the holder(s) thereof to at least [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]% of the voting power of the
then outstanding Voting Stock of Pfizer; and
(b) solely with respect to Organon, any Person or group of
Persons (other than Organon Parent and its subsidiaries) acquires
or possesses beneficial ownership of Voting Stock of Organon or of
any Organon Group Parent entitling the holder(s) thereof to at
least [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]% of the
voting power of the then outstanding Voting Stock of Organon or
such Organon Group Parent other than pursuant to a Permitted
Transaction.
(ii) Loss of Existing Control: solely with respect to Organon:
(a) Organon Parent ceases to beneficially own Voting Stock of
Organon or of any Organon Group Parent which has a [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] of the voting power of the
outstanding Voting Stock of Organon or such Organon Group Parent,
other than pursuant to a Permitted Transaction or Qualified Split
Off Transaction, and Organon or such Organon Group Parent, as
applicable, is not Listed; or
(b) If Organon or any Organon Group Parent is Listed (in
either case a "Listed Organon Entity") and such Listed Organon
Entity enters into a merger, consolidation, reorganization or
similar transaction (including a series of related transactions)
with another Person as a result of which, immediately following
such transaction (or series of transactions), less than a majority
of the voting power of the then outstanding Voting Stock of the
surviving entity of such transaction is beneficially owned by
Persons who beneficially owned Voting Stock of such Listed Organon
Entity immediately prior to such transaction or series of related
transactions; provided, that (x) a Permitted Transaction shall not
be deemed a "Change in Control" under this Article 1.14(ii) and (y)
for purposes of this Article 1.14(ii) if any specific shares of
Voting Stock which are beneficially owned by Organon Parent are
also beneficially owned by any entity which is not a subsidiary of
Organon Parent, then Organon Parent shall not be deemed to
beneficially own such shares of Voting Stock.
(iii) Asset Sale: the Party sells to any Third Party in one or more
related transactions properties or assets representing all or
substantially all of the properties and assets of such Party or all or
substantially all of its properties and assets relating to the business
to which this Agreement pertains; it being understood and agreed that, if
within any two-year period, the Organon Group was involved in any asset
sale, share sale, merger or other transfer whereby at least [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]% of the Organon Group (as measured from the
beginning to the end of such two-year period based upon assets, net sales
and/or net income under GAAP) was sold or otherwise transferred to any
Third Party, then Organon shall be deemed to have undergone a "Change in
Control" under this Article 1.14(iii); or
(iv) Organon Parent Change of Control: solely with respect to
Organon
(a)(1) any Person or group of Persons acquires or possesses
beneficial ownership of Voting Stock of Organon Parent entitling
the holder(s) thereof to at least [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED
3
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]% of the
voting power of the then outstanding Voting Stock of Organon Parent
or otherwise obtains (whether pursuant to any shareholder
agreement, articles or other applicable constitutional documents or
otherwise) the power to elect a majority of the board of directors
(or other comparable body) of Organon Parent or obtains the right
or power to nominate or elect directors (or other comparable
persons) having, in the aggregate, a majority of the voting power
of all directors (or comparable persons) on the board of directors
(or other comparable body), of Organon Parent; or
(2) Organon Parent enters into a merger, consolidation,
reorganization or similar transaction (including a series of
related transactions) with another Person as a result of which,
immediately following such transaction, less than a [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] of the number of shares or the
voting power of the then outstanding Voting Stock of the surviving
entity of such transaction is beneficially owned by Persons who
were shareholders of Organon Parent immediately prior to such
transaction or series of related transactions; and
(b) (1) within 18 calendar months after such event such
Person or group of Persons is or becomes a Competitor or becomes an
Affiliate of a Competitor, or
(2) within 18 calendar months after such event any of
the following occur, or Organon Parent or the acquiring or
surviving entity, as applicable, publicly announces that any of the
following is expected to occur:
(X) the resignation or removal of any two of the following
individuals: President, Organon International,
President, Organon USA Inc., Executive Vice President,
Global Manufacturing and Quality Affairs or Senior Vice
President, Global Research, as such positions are
operationally defined from time to time within the
Organon Group;
(Y) the divestiture of any material part of the Organon
Group other than pursuant to a Permitted Transaction or
a Qualified Split Off Transaction; or
(Z) actual pharmaceutical-specific research and development
spending by the Organon Group, as a percentage of sales
of the Organon Group, for the twelve month period
following such event is less than such spending for the
twelve month period immediately preceding such event by
more than [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]%.
1.15 [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] means the Product Study described on
Schedule 1.15.
1.16 "Clinical Supplies" means Product for purposes of the Development of
the Product, including placebo.
1.17 "Code" or "Codes" means the Code on Interactions with Healthcare
Professionals promulgated by the Pharmaceutical Research and Manufacturers of
America (PhRMA), the American Medical Association Guidelines on Gifts to
Physicians, and the Department of Health and Human Services Office of Inspector
General Compliance Program Guidance for Pharmaceutical Manufacturers, released
April, 2003, as any of the foregoing may be amended, from time to time, and any
comparable codes or guidelines in effect in each Country in the Territory.
4
1.18 "Co-Market" or "Co-Marketing" means, with respect to the Product,
the separate marketing and sale in a Co-Marketing Country of the Product by
Organon and Pfizer under separate and distinct trademarks.
1.19 "Co-Marketing Country" means each Country other than a Pfizer
Exclusive Country or an Organon Exclusive Country in which Co-Promotion is not
permitted under local Law, but in which Co-Marketing is permitted under local
Law.
1.20 "Collaboration Intellectual Property" means all Technical
Information and all confidential business and commercial information and trade
secrets, in each case developed or acquired by either Party, or jointly by the
Parties, or by their respective Affiliates, in the course of the Parties' and
their respective Affiliates' activities pursuant to this Agreement.
1.21 "Collaboration Inventions" means any and all patentable inventions
and discoveries, conceived and reduced to practice during the Term and arising
out of the activities of the Parties or their respective Affiliates pursuant to
this Agreement.
1.22 "Combination Product" means any Product which contains, in addition
to the Compound, one or more other therapeutically active ingredients.
1.23 "Commercially Reasonable Efforts" means, those efforts and resources
that Organon or Pfizer, respectively, would use were it developing,
manufacturing, promoting and detailing its own pharmaceutical products which
are of similar market potential as the Product, taking into account product
labelling, market potential, past performance, economic return, the regulatory
environment and competitive market conditions in the therapeutic area, all as
measured by the facts and circumstances at the time such efforts are due. For
the avoidance of doubt, in evaluating economic return, Pfizer shall not
consider the Initial Fee, Event Milestone Payments and Performance Milestone
Payments payable to Organon under this Agreement.
1.24 "Competing Product" means any prescription antipsychotic that is
approved by FDA or EMEA for the treatment of schizophrenia or bipolar disorder
other than (i) the Product, (ii) Geodon, and (iii) on a Country-by-Country
basis prior to the initial Launch of the Product in a Country, and provided
that Organon is then-detailing [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] in such
Country, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION].
1.25 "Competitor" means (a) a company having an interest in the
pharmaceutical business that sells a Competing Product with aggregate annual
sales, as reported by IMS or such other reliable third party data provider, of
more than $[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] in the last full calendar year prior
to any event described in Article 1.14(iv)(b) or that has a Competing Product
with that sales potential in Phase III development, or (b) any pharmaceutical
company that, together with its affiliates, has in excess of $[CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] of net sales, calculated on a worldwide basis, in the last
full calendar year prior to any event described in Article 1.14(iv)(b).
1.26 "Compound" means the active pharmaceutical ingredient called
asenapine as described in Schedule 1.26 in any chemical form, including without
limitation, salts, solvates, metabolites, prodrugs, polymorphs and enantiomers.
1.27 "Confidential Information" means all trade secrets or other
proprietary information, including without limitation any proprietary data and
materials (whether or not patentable or protectable as
5
a trade secret), regarding a Party's technology, products, business or
objectives or regarding the Product, or Xanax or any improvements or changes to
either product, that is disclosed by a Party to the other Party pursuant to the
Alliance Agreements. Notwithstanding the foregoing, there shall be excluded
from the foregoing definition of Confidential Information any of the foregoing
that:
(i) was known by the receiving Party prior to its date of
disclosure to the receiving Party as shown by the receiving Party's
written records; or
(ii) either before or after the date of the disclosure to the
receiving Party is lawfully disclosed to the receiving Party by a Third
Party not in violation of any obligation to the disclosing Party; or
(iii) either before or after the date of the disclosure to the
receiving Party becomes published or generally known to the public
through no fault or omission on the part of the receiving Party or its
Affiliates; or
(iv) is independently developed by or for the receiving Party
without reference to or reliance upon the Confidential Information as
demonstrated by contemporaneous written records of the receiving Party;
or
(v) is required to be disclosed by the receiving Party to comply
with applicable Laws, to defend or prosecute litigation or to comply with
governmental regulations or the regulations or requirements of any
internationally-recognized stock exchange or NASDAQ, provided that the
receiving Party provides prior notice of such disclosure to the other
Party (and takes reasonable and lawful actions to avoid and/or minimize
the degree of such disclosure).
For the purpose of this Article 1.27 "Party" shall include Affiliates of
such Party.
1.28 "Consensus Matter" means a matter that requires a decision by mutual
agreement of the Parties pursuant to this Agreement.
1.29 "Control" or "Controlled" means, with respect to any intellectual
property right, the possession (whether by ownership or license) by a Party (or
by any Affiliate of a Party) of the ability to grant to the other Party a
license under such right without violating the terms of any agreement with any
Third Party.
1.30 "Conversion Date" shall have the meaning set forth in Article
6.8(ii)(a).
1.31 "Conversion Date Statement" shall have the meaning set forth in
Article 6.8(iii).
1.32 "Co-Promotion" or "Co-Promote" means the joint marketing and
promotion, including without limitation Detailing, of the Product under a
single Trademark (where one Party is making sales) in the Co-Promotion
Countries undertaken by a Party pursuant to the then-current Global Marketing
Plan.
1.33 "Co-Promotion Criteria" means that, in any Country, a Party:
(i) has Sales Representatives able to provide no less than
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]% of the agreed-upon Details for
such Country as specified in the relevant Country Marketing Plan; and
(ii) has a local Affiliate with the ability to provide sales,
marketing, medical, and other pharmaceutical product support services as
is usual and customary in the pharmaceutical industry for such Country.
6
1.34 "Co-Promotion Country" or "Co-Promotion Countries" means those
Countries listed on Schedule 1.33 as may be amended from time to time by the
Parties in accordance with this Agreement; provided, however, that if either
Party is prohibited by Law from doing business in any Country listed on
Schedule 1.33, then, for so long as such prohibition remains in place, the
other Party (provided that the other Party is not so prohibited) shall have the
exclusive right to commercialize the Product in such Country.
1.35 "Cost of Goods" means (i) Manufacturing Costs, plus or minus, as
applicable, (ii) Manufacturing Cost variances between the standard cost
components of Manufacturing Costs and the actual costs incurred that such
standard cost component(s) are intended to cover, (iii) Out-of-Pocket Costs
directly related to shipping of finished Product to the final warehouse prior
to sale of such Product to an unaffiliated Third Party in a Co-Promotion
Country; and (iv) non-standard other cost of sales items such as process
improvements (other than process development for the initial manufacturing
process for the Product described in Schedule 9.8), obsolete inventory,
inventory revaluation, and expense portion of capital projects, provided that
such costs described in this subparagraph (iv) are agreed upon by the MSC.
1.36 "Country" or "Countries" means all of the countries in the Territory
whether a Co-Promotion Country, Co-Marketing Country, Organon Exclusive
Country, or Pfizer Exclusive Country; it being understood and agreed, in the
event that any such Country is subdivided or otherwise partitioned, the
definition of "Country" will include each such subdivided and/or partitioned
geographical area and, for purposes of this Agreement, Details, Net Sales, and
other obligations will be appropriately adjusted.
1.37 "Country Marketing Plan" means the marketing plan prepared by the
CCC for the applicable Co-Promotion Country or group of Co-Promotion Countries.
1.38 "Current Product" means the Product in the current formulation which
Product is currently being used by Organon in clinical trials and is being
developed for the Initial Indications, all as of the Effective Date.
1.39 "Detail" means a face-to-face contact of either an Organon Sales
Representative or a Pfizer Sales Representative, as the case may be, with a
medical professional with prescribing authority during which scientific and/or
medical information about the Product is discussed. A Detail does not include a
reminder or sample drop. Details shall be measured by each Party's internal
recording of such activity; provided that, such measurement shall be on the
same basis as the recording Party's measurement for its sales representatives
detailing of such recording Party's other products, consistently applied
throughout the Term. When used as a verb, the term "Detailing" means to engage
in the activity of a Detail.
1.40 "Detail Requirement" means the number of Details that each Party's
Sales Representatives are required to perform in each Co-Promotion Country in
each Year of the Term pursuant to the Global Marketing Plan or Country
Marketing Plan then in effect, subject to Schedule 1.40.
1.41 "Development" means, with respect to the Product, the performance of
all pre-clinical, clinical and regulatory activities required to obtain
Regulatory Approval of the Product in the Territory, all in accordance with the
Development Plan. When used as a verb "Develop" means to engage in any such
activities.
1.42 "Development Costs" means all Out-of-Pocket Costs incurred by a
Party in connection with Product Studies pursuant to the Development Plan,
including, without limitation, the following:
(i) the cost of materials used in the development of the Product
(including clinical supplies, chemicals, animals and lab supplies);
7
(ii) the costs for outside professional services, including, but
not limited to, toxicology studies or clinical studies performed by Third
Parties;
(iii) costs incurred in connection with regulatory submissions; and
(iv) costs for process development of the manufacturing process
for the Product described in Schedule 9.8.
1.43 "Development Plan" means the written annual development plan which
currently has as one of its goals the development of the Product with
attributes as described in the Product Profile, including preclinical and
clinical study plans and a corresponding budget for each such study, which plan
may be amended from time to time in accordance with Article 10.3.
1.44 "Distribution Costs" means the direct, Out-of-Pocket Costs accrued
or paid by Organon in connection with the shipment by Organon or its Affiliate
of finished packaged Product to unaffiliated Third Parties in the Co-Promotion
Countries.
1.45 "DOJ" means the United States Department of Justice.
1.46 "Effective Date" means the HSR Clearance Date.
1.47 "EMEA" means the European Agency for Evaluation of Medicinal
Products, or any successor agency thereto.
1.48 "Estimated Development Costs" shall have the meaning set forth in
Article 4.4.
1.49 "FDA" means the United States Food and Drug Administration, or any
successor agency thereto.
1.50 "Finished Product Supply Agreement" means the agreement between
Pfizer Export Company and Organon executed simultaneously with this Agreement
by which Organon shall sell finished, packaged Product to Pfizer Export Company
for sale by Pfizer Export Company or its Affiliate in the Pfizer Exclusive
Countries and Co-Marketing Countries.
1.51 "FTC" means the United States Federal Trade Commission.
1.52 "GAAP" means, with respect to Pfizer, US generally accepted
accounting principles, consistently applied, and with respect to Organon,
International Financial Reporting Standards, consistently applied. All
financial determinations made under this Agreement shall be made in accordance
with GAAP.
1.53 "GCC" means the Global Commercial Committee described in Article
10.4.
1.54 "Generic Competition" shall exist during a given Pfizer Quarter or
Calendar Quarter with respect to the Product in any Pfizer Exclusive Country,
or Organon Exclusive Country in the Territory if, during such Pfizer Quarter or
Calendar Quarter, one or more Generic Products shall be commercially available
in such Country and shall have, in the aggregate in such Country, a
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%)
or more share of total sales of the aggregate of the Product and Generic
Products based on data provided by IMS International, or if such data is not
available, such other reliable data source as reasonably determined by Pfizer
(or, in the Organon Exclusive Countries, reasonably determined by Organon) and
agreed by
8
Organon (or, in the Organon Exclusive Countries, agreed by Pfizer) (such
agreement not to be unreasonably withheld) as measured by unit sales.
1.55 "Generic Products" means any pharmaceutical products (other than the
Product commercialized by Organon and Pfizer pursuant to this Agreement) that
contain the Compound and can reasonably be or are reasonably used for the same
indication or indications as the Product.
1.56 "Geodon" means any human pharmaceutical product containing as an
active ingredient the compound generically known as ziprasidone including,
without limitation, the product presently promoted or sold under either the
Geodon (R) or Zeldox (R) trademark.
1.57 "Global Marketing Costs" means Marketing Costs that are not incurred
pursuant to a Country Marketing Plan and relate to cross-border activities
including, but not limited to, cross-border advertising, Phase IIIb/Phase IV
Product Studies (excluding Local Phase IIIb/ IV Product Studies) and are
incurred by, the Parties centrally.
1.58 "Global Marketing Plan" means the proposed plan for
commercialization of the Product in the Co-Promotion Countries, including,
without limitation: (a) general strategies for the Detailing and marketing of
the Product and allocation of responsibilities for marketing activities between
the Parties; (b) each Party's Detail Requirement (subject to Schedule 1.40) and
sampling activities, if any; (c) market and sales forecasts; (d) pricing and
discounting analysis; (e) advertising, public relations and other promotional
programs, including professional symposia and speaker and activity programs to
be used in the Co-Promotion of the Product; (f) Phase IIIb/IV Product Studies;
and (g) an annual budget for the activities described in the Global Marketing
Plan.
1.59 "Governmental Authority" means any court, agency, department or
other instrumentality of any foreign, federal, state, county, city or other
political subdivision.
1.60 "group" will have the meaning as the term "group" is interpreted
pursuant to Rule 13d-5 under the Securities Exchange Act of 1934, as amended.
1.61 [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]
1.62 "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (15 U.S.C. Sec. 18a), and the rules and regulations
promulgated thereunder.
1.63 "HSR Clearance" means either (a) early termination of the applicable
waiting period under the HSR Act with respect to the HSR Filings; or (b)
expiration of the applicable waiting period under the HSR Act with respect to
the HSR Filings.
1.64 "HSR Clearance Date" means, with respect to the HSR Filings, the
earlier of (a) the date on which the FTC or DOJ shall notify Organon and Pfizer
of early termination of the applicable waiting period under the HSR Act; or (b)
the day after the date on which the applicable waiting period under the HSR Act
expires.
1.65 "HSR Filings" means the filings by Pfizer and Organon with the FTC
and the Antitrust Division of the DOJ of a Notification and Report Form for
Certain Mergers and Acquisitions (as that term is defined in the HSR Act) with
respect to the matters set forth in this Agreement, together with all required
documentary attachments thereto.
1.66 "Improved Product" means any and all new developments or versions to
the Current Product, that are made by or on behalf of either Party, including,
but not limited to, Combination Products,
9
New Indications, new formulations, new dosage forms, or new regimens and
developments intended to enhance the safety and/or efficacy of the Product.
1.67 "Initial Indications" means the treatment of schizophrenia and
bipolar disorders (including, without limitation, acute manic episodes
associated with bipolar disorder) in humans.
1.68 "Interim Statement" shall have the meaning set forth in Article
6.8(iii).
1.69 "Intermediate" means the chemical substance designated as compound
"[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]" on Schedule 9.8; provided, however that if
the Parties agree that the chemical substance designated as compound
"[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]" on such schedule is sufficiently stable to
be shipped to Pfizer (or its Affiliate), then the Parties will discuss whether
the Intermediate should be compound "[CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]" rather
than compound "[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]".
1.70 "Intermediate Supply Agreement" means the agreement between Pfizer
Ireland Pharmaceuticals and Organon executed simultaneously with this Agreement
by which Organon shall sell Intermediate to Pfizer Ireland Pharmaceuticals.
1.71 "JOC" means the Joint Operating Committee described in Article 10.7.
1.72 "Key EU Country" means any of the United Kingdom, France, Germany,
Spain or Italy.
1.73 "Law" or "Laws" means all laws, statutes, rules, Codes, regulations,
orders, decrees, judgments and/or ordinances of any Governmental Authority.
1.74 "Launch" means, on a Country by Country basis, the first shipment
after the first Regulatory Approval and Price Approval of a Product in
commercial quantities for commercial sale by a Party to an unaffiliated Third
Party.
1.75 "Listed" means, with respect to any entity, shares of common equity
of such entity are listed for trading on any internationally-recognized stock
exchange or authorized for trading on NASDAQ ; provided that the market value
of shares of such common equity held by Persons that are not Affiliates of such
entity is at least $[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION].
1.76 "Local Phase IIIb/IV Product Studies" mean those Phase IIIb/IV
Product Studies conducted solely in a Country and intended to be primarily used
to support local marketing.
1.77 "Managed Care and Institutional Customers" means systems that
integrate the financing and delivery of health care services to covered members
including but not limited to: PBMs, HMOs, PPOs, Independent Physicians
Associations (IPAs), Integrated Health Delivery System (IHDS), VA, DoD, GPOs.
1.78 "Major Market Countries" means the United States, France, Germany,
Italy, United Kingdom, Spain, Japan and Canada.
1.79 "Major Market Country Forecast" means the forecast of Net Sales in
each Major Market Country for each Year as initially determined by the Parties
within 180-days after the Effective Date.
10
1.80 "Manufacturing Costs" means costs that relate to (i) Product
supplied by an unaffiliated Third Party; or (ii) Product manufactured directly
by a Party or an Affiliate of a Party. In the case of (i), Manufacturing Costs
shall be a "standard cost" per unit, (calculated for each Year of the Term)
which standard cost shall include (a) the amount paid to such Third Party, plus
(b) the manufacturing Party's (i.e., the Party responsible for overseeing the
manufacturing of the Third Party) direct and identifiable Internal Costs and
Out-of Pocket Costs, which amounts shall be subject to the other Party's
reasonable approval, incurred by the manufacturing Party in connection with
quality assurance, supply chain management and similar activities comprising
the manufacturing Party's oversight of the manufacturing process of the Third
Party. In the case of (ii), Manufacturing Costs shall be a "standard cost" per
unit, (calculated Yearly and at a time to align with the Parties internal
budget processes) which standard cost shall include the cost of raw materials,
labor, and other direct and identifiable variable costs and appropriate costs
for equipment pools, plant operations and plant support services. The costs for
plant operations and support services would include utilities, maintenance,
engineering, safety, human resources, finance, plant management and other
similar activities. The plant operations and support services costs would be
allocated on a mutually agreed basis consistent with GAAP. Costs which cannot
be identified to a specific activity supporting Product manufacturing, such as
charges for corporate overhead which are not controllable by the manufacturing
plant, shall not be included in standard cost. "Internal Costs" in
Manufacturing Costs means a Party's and/or its Affiliate's costs and expenses
related solely to direct and identifiable personnel compensation and benefits.
1.81 "Marketing Costs" means all Out-of-Pocket Costs paid or accrued by a
Party pursuant to the Global Marketing Plan or a Country Marketing Plan and
directly related to the Co-Promotion of the Products in the Co-Promotion
Countries, including those in connection with:
(i) Phase III(b)/IV Product Studies;
(ii) materials and programs used for ongoing training of Sales
Representatives and of sales trainers;
(iii) advertising for the Products (including agency fees);
(iv) materials used in promoting the Products (including detail
aids, leave-behinds and all other similar materials);
(v) patient samples and starter kits; and
(vi) marketing the products through any means (including, but not
limited to, consumer directed advertising, journals, newspaper, radio,
internet or place-based advertisements, promotional literature, market
research, patient education, field and headquarters' grants, exhibits,
direct mail, advisory boards, symposia, congress activities and dinner
programs).
All other Out-of-Pocket Costs incurred in the Co-Promotion of the Products in
the Co-Promotion Countries, but not specifically identified above, but which
have been approved by the GCC or provided for in the Global Marketing Plan or a
Country Marketing Plan, shall be accounted for and deemed Marketing Costs for
all purposes of this Agreement
1.82 "Material Default" means:
(i) any default by any Party hereto of its representations or
warranties or covenants, agreements or other performance obligations
under this Agreement (other than a payment obligation) that, when
aggregated with any other such uncured defaults by such Party, is (a)
material to this Agreement taken as a whole, and (b) shall have continued
for 60 days after written notice thereof was provided to the alleged
defaulting Party by the non-defaulting Party (or, if such default cannot
be cured within such 60 day period, if the alleged defaulting Party does
not promptly commence and diligently continue all reasonable actions to
cure such defaults during such 60 day period or does not cure in full
such default within 90 days after written notice thereof was provided to
the alleged defaulting Party); or
11
(ii) any default by any Party hereto of its payment obligations
hereunder that shall have continued for 15 days after written notice
thereof was provided to the alleged defaulting Party by the non-
defaulting Party; provided that, in the event of a good faith payment
dispute, such 15 day cure period shall be extended through the fifteenth
day following the date on which such dispute is resolved if the alleged
defaulting Party paid all undisputed amounts when due and provided the
non-defaulting Party with a reasonably detailed written explanation of
the alleged defaulting Party's basis for disputing the payment obligation
within the 15 day period following the written notice of the default by
the non-defaulting Party.
Notwithstanding anything to the contrary contained herein, for purposes
of determining the existence of any "Material Default," no Party shall be
deemed to be in material breach or material default if its actions or
omissions resulted from (x) compliance with any decision of a committee
or subcommittee under this Agreement that is mutually agreed to by the
Parties, or (y) compliance with any Law or the express terms of this
Agreement, or (z) any such Party's use of Commercially Reasonable
Efforts.
1.83 "MSC" means the Manufacturing and Supply Committee described in
Article 10.5.
1.84"NDA" means a New Drug Application filed with the FDA with respect to
the Product.
1.85 "Net Sales" means the gross sales of the Product that is due, or
otherwise received by, a Party, or its Affiliates from unaffiliated Third
Parties for such Product, less:
(i) credited allowances actually granted to such Third Party
customers for spoiled, damaged, rejected, recalled, outdated and returned
Product and for reasonable retroactive price reductions;
(ii) the amounts of trade and cash discounts actually allowed, to
the extent such trade and cash discounts are specifically allowed on
account of the purchase of the Product;
(iii) sales taxes, value added taxes, excise taxes, use taxes and
import/export duties actually due or incurred in connection with the
sales of the Product to any Third Party, and freight and insurance (to
the extent that the Party bears the cost of freight and insurance for the
Product); and
(iv) actual bad debts relating to the Product; adjustments,
reimbursements, administration fees, discounts, chargebacks and rebates,
in each case actually granted to Third Parties, including, but not
limited to, rebates actually given to health care organizations or other
Third Parties, and any bona fide payment made in respect of any sales of
Product to any governmental or quasi-governmental body or agency,
accruing on sales that took place during the Term.
Net Sales shall be determined from books and records maintained in
accordance with GAAP, and shall not arise from sales of Product among
either Party or their Affiliates or between its Affiliates and
subcontractors.
1.86 "New Indication" means any indication for the Product other than the
Initial Indications.
1.87 "New Indication Development Costs" means all Out-of-Pocket Costs
incurred by Organon in connection with New Indication Development Studies
1.88 "New Indication Development Studies" means pre-clinical and clinical
studies, including formulation studies, that are designed to support approval
for marketing of a New Indication in the US Territory and/or any other Major
Market Country.
12
1.89 "Noncompete Term" shall have the meaning set forth in Article 6.10.
1.90 "Organon Exclusive Countries" means all Countries in the Territory
in which Organon has the exclusive right to make, use, sell, offer for sale,
Detail and promote the Product.
1.91 "Organon Group" means the group of Affiliates of ▇▇▇▇ ▇▇▇▇▇ ▇.▇.
which are engaged in the ethical pharmaceutical business activities (known as
the Organon business unit), but explicitly excluding those businesses primarily
devoted to vaccines (known as Nobilon), animal health (known as Intervet) and
active pharmaceutical ingredients and biotech (known as Diosynth). As of the
date hereof, the Organon Group consists of Organon USA Inc., Organon
International Inc., N.V. Organon, Organon Nederland B.V., Organon Europe B.V.,
Horus B.V. and Organon Holding B.V and each of their respective direct and
indirect subsidiaries.
1.92 "Organon Group Parent" means any of the following: Organon
International Inc., Organon Espanola S.A., Organon Italia S.p.A., Organon USA
Inc., N.V. Organon, Organon S.A., Organon GmbH and Organon Laboratories Ltd.,
and any successors to and assigns of all or substantially all of the business
or assets of any such entity.
1.93 "Organon Parent" means ▇▇▇▇ ▇▇▇▇▇ ▇.▇. and its successors; provided
that, following a Qualified Split Off Transaction, Organon Parent shall mean
the Split Off Parent.
1.94 "Organon Patent Rights" means all Patent Rights, now or hereafter
during the Term, Controlled by Organon or its Affiliates, including without
limitation Organon's interest in any Collaboration Inventions, relating to, or
useful in connection with, the manufacture, use or sale of the Compound or the
Product, including without limitation, the patents and patent applications set
forth on Schedule 1.94.
1.95 "Organon Technical Information" means all scientific or technical
information and related know-how and trade secrets now or hereafter during the
Term Controlled by Organon or its Affiliates relating to the Compound or the
Product or any developments or changes thereof (such as New Indications) or
otherwise developed or acquired by Organon or its Affiliates in the course of
the activities of Organon or its Affiliates under this Agreement, including but
not limited to: (i) medical, clinical, toxicological, pharmacological, or other
scientific data, and (ii) processes and analytical methodology used in the
development, testing, analysis, manufacture or packaging of the Compound or the
Product or any developments or changes thereto.
1.96 "Out-of-Pocket Costs" means costs and expenses paid or accrued to
Third Parties, other than Affiliates or employees, by either Party after the
Effective Date.
1.97 "Parent" means any corporation or other Person which, directly or
indirectly, beneficially owns (i) at least [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]% of
the voting power of all outstanding capital stock or other ownership interests
of any Organon Group entity or (ii) the right to receive at least [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]% of the net assets of any Organon Group entity available
for distribution to the holders of capital stock or other ownership interests
upon a liquidation or dissolution of any Organon Group entity.
1.98 "Party" or "Parties" means Organon and Pfizer.
1.99 "Patent Rights" means the rights and interest in and to all issued
patents and pending patent applications in any Country, including, without
limitation, all divisionals, continuations, renewals, continuations-in-part,
patents of addition, supplementary protection certificates, extensions,
registration or confirmation patents and reissues thereof.
13
1.100 "Permitted Transaction" means a transaction as a result of which a
Person or group of Persons (other than Organon Parent and its subsidiaries)
acquires [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]% or more of the voting power of the
outstanding Voting Stock of Organon or any Organon Group Parent, but such
Person or group of Persons (x) does not acquire or at any time possess
beneficial ownership of Voting Stock of Organon or of such Organon Group Parent
having more voting power than the Voting Stock of Organon or such Organon Group
Parent than that beneficially owned by Organon Parent, and (y) does not
otherwise obtain or at any time possess (whether pursuant to any shareholder
agreement, articles or other applicable constitutional documents or otherwise)
the power to elect a greater number of directors (or other comparable persons)
than that possessed by Organon Parent and/or any subsidiaries of Organon Parent
or the right or power to nominate or elect directors (or other comparable
persons) having, in the aggregate, any greater voting rights than the aggregate
voting rights of the directors that Organon Parent and/or subsidiaries of
Organon Parent have the right or power to elect or nominate.
1.101 "Person" means any natural person or any corporation, company,
partnership, joint venture, firm or other entity, including without limitation
a Party.
1.102 "Pfizer Exclusive Countries" means all Countries in the Territory
that, as of the Effective Date, are neither Co-Promotion Countries nor Co-
Marketing Countries, until such time, if at all, that such Countries become
Organon Exclusive Countries.
1.103 "Pfizer Patent Rights" means all Patent Rights, if any, hereafter
during the Term, Controlled by Pfizer or its Affiliates, including without
limitation Pfizer's interest in any Collaboration Inventions, in each case
relating to the Product, the Compound or the manufacturing thereof, that
contain claims that would be infringed by the manufacture, use, sale, offer for
sale, or importation of the Compound, Product, or any component thereof.
1.104 "Pfizer Technical Information" means all scientific or technical
information and related know-how and trade secrets hereafter during the Term
Controlled by Pfizer or its Affiliates relating to the Compound or the Product
or any developments or changes thereof (such as New Indications) or otherwise
developed or acquired by Pfizer or its Affiliates in the course of the
activities of Pfizer or its Affiliates under this Agreement, including but not
limited to: (i) medical, clinical, toxicological, pharmacological, or other
scientific data and (ii) processes and analytical methodology used in the
development, testing, analysis, manufacture or packaging of the Compound or the
Product or any developments or changes thereto.
1.105 "Pfizer Quarter" means, in the US Territory, each of the four (4)
thirteen (13) week periods as used by Pfizer in its audited financial reports,
the first commencing on January 1 of any Year, and (b) outside the US
Territory, each of the four (4) thirteen (13) week periods as used by Pfizer in
its audited financial reports, the first commencing on December 1 of any Year.
1.106 "Pharmaceutical Company" means, with respect to any time at which
the "Change in Control" is assessed, any of the leading 100 pharmaceutical
companies as measured by trailing twelve (12) month sales of prescription
pharmaceutical products and reported by IMS in the most recent global review of
the pharmaceutical market.
1.107 "Phase III Clinical Study" means a Product Study with study design
and statistical power intended to meet the requirement for Regulatory Approval.
1.108 "Phase IIIb/IV Product Study" means a clinical study designed to
support the Product but not intended to be included as the basis of any
regulatory filing for Regulatory Approval for marketing of
14
the Product, or conducted as a condition of the Regulatory Approval from any
Regulatory Authority for marketing of the Product.
1.109 "Price Approval" means, in Countries where governmental or
regulatory authorities authorize for reimbursement, or approve or determine
pricing for pharmaceutical products for reimbursement or otherwise, such
authorization, approval or determination.
1.110 "Primary Packaged Product Supply Agreement" means the agreement
between Pfizer Ireland Pharmaceuticals and Organon executed simultaneously with
this Agreement, by which Pfizer Ireland Pharmaceuticals shall sell finished
Product in primary packaging to Organon.
1.111 "Proceeding" means any suit, action or proceeding relating to this
Agreement.
1.112 "Product" means, subject to Article 4.9, all human pharmaceutical
formulations and dosage forms which contain the Compound either alone or in
combination with other therapeutically active ingredients.
1.113 "Production Agreements" means the Intermediate Supply Agreement,
the Primary Packaged Product Supply Agreement, and the Finished Product Supply
Agreement, each of which is being entered into for the purpose of effectuating
the worldwide collaboration between Pfizer and Organon as described in this
Agreement.
1.114 "Product Profile" means the Product profile described in Schedule
1.114 hereto.
1.115 "Product Specifications" means the specifications for the
manufacture and packaging of the Product consistent with the NDA and other
Regulatory Approvals.
1.116 "Product Studies" means clinical, preclinical, safety, and other
studies that are designed to support FDA or other Regulatory Authority approval
for marketing of the Product. For the avoidance of doubt, Product Studies
shall not include Phase IIIb/IV Product Studies.
1.117 "Qualified Split Off Transaction" means any transaction or series
of related transactions in which the Organon Group is separated, in whole or in
part, from ▇▇▇▇ ▇▇▇▇▇ ▇.▇. (either as a stand-alone business unit or as part of
or together with other business units of ▇▇▇▇ ▇▇▇▇▇ ▇.▇. being so separated in
such transaction or series of transactions) and, immediately after giving
effect thereto,
(i) no Person or group of Persons other than ▇▇▇▇ ▇▇▇▇▇ ▇.▇. and
its subsidiaries beneficially owns Voting Stock of the Split Off Parent
entitling the holder(s) thereof to at least [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]% of the voting power of the then outstanding Voting Stock of
the Split Off Parent except as contemplated by the definition of
Permitted Transaction; and
(ii) ▇▇▇▇ ▇▇▇▇▇ ▇.▇. does not beneficially own less than a
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] of the voting power of the
outstanding Voting Stock of the Split Off Parent except as contemplated
by the definition of Permitted Transaction, unless the Split Off Parent
is Listed.
1.118 "[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]" mean the [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] presently being performed by Organon.
15
1.119 "Regulatory Approval" means authorization granted by a Regulatory
Authority to market and sell the Product in a Country in the Territory that is
required before the Product may be commercially marketed and sold in such
Country.
1.120 "Regulatory Authority" means any Governmental Authority with
responsibility for granting any licenses or approvals necessary for the
marketing and sale of pharmaceutical products including, without limitation,
the FDA and any drug regulatory authority of countries of the European Union,
and Japan, and where applicable any ethics committee or any equivalent review
board.
1.121 [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] means [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION], formely [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION].
1.122 "[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement" mean the
License and Development Agreement between [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] and
Organon dated March 27, 1997.
1.123 "[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Patent Rights" means
those Patent Rights owned or licensed by [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] and
are the subject of the license under the [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
Agreement.
1.124 "Sales Representative" means an individual employee of a Party who
engages in Detailing and other promotional efforts in the field with respect to
the Product and who has been trained by either Party.
1.125 "Split Off Parent" means the ultimate Parent of any entities
formerly within the Organon Group following a Qualified Split Off Transaction.
1.126 "Standstill Period" shall mean the period commencing on the
Effective Date of this Agreement and terminating on the [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] anniversary of such date.
1.127 "Steering Committee" means the Steering Committee described in
Article 10.8.
1.128 "Supporting Information" means, with respect to each New
Indication, the following:
(i) the NDA or other Application for Regulatory Approval, as
applicable, including draft or final labelling, as the case may be, for
such New Indication; and
(ii) all other material information regarding the toxicology, CMC
data, safety and efficacy of such New Indication; status of discussions
with FDA or any Governmental Authorities directly relating thereto; and
any relevant patent information, all as of the date of the applicable
Opt-In-Notice provided by Organon to Pfizer under Article 4.7; and
(iii) all Third Party Licenses relating to such New Indication.
16
1.129 "Technical Information" means Organon Technical Information or
Pfizer Technical Information.
1.130 "Territory" means all territories and Countries of the world.
1.131 "Third Party" means any entity or person other than Pfizer or
Organon or any of their respective Affiliates.
1.132 "Third Party License" means any agreement with a Third Party
necessary to obtain a license or right to any intellectual property right owned
or controlled by a Third Party in order to make, have made, use, sell, offer to
sell, or import, the Product or, as applicable under Article 4.5, an Improved
Product.
1.133 "Third Party License Fees" means any fees, royalties and/or other
amounts paid to any Third Party under a Third Party License. For the avoidance
of doubt, all consideration paid or due to [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] and
specified in Schedule 1.133 shall be deemed to be Third Party License Fees.
1.134 "Trademark" or "Trademarks" means, the trademark or trademarks
selected by the JOC for use on the Product and/or accompanying logos, trade
dress and/or indicia of origin, in each case as selected by the JOC.
1.135 "US Territory" means the United States, its territories,
possessions and Puerto Rico.
1.136 "Valid Claim" means any claim from an issued and unexpired patent
included within the Organon Patent Rights which has not been revoked or held
unenforceable or invalid by a decision of a court or other Governmental
Authority of competent jurisdiction, and which has not been disclaimed, denied
or admitted to be invalid or unenforceable through reissue or disclaimer or
otherwise.
1.137 "Voting Stock" means, with respect to any Person, any capital stock
or other ownership interest in such Person which entitles the holder thereof to
vote for the election of directors (or other comparable persons) of such
Person.
1.138 "Year" means, with respect to the first Year, the period beginning
on the Effective Date and ending on December 31 of such calendar year (the
"First Year"), and (b) with respect to each subsequent Year the twelve (12)
month period beginning on the day following the end of the First Year and each
succeeding twelve (12) month period thereafter.
1.139 "Xanax" means the human pharmaceutical product containing as the
sole active ingredient the compound generically known as alprazolam (in an
extended-release formulation) presently promoted and sold in the United States
under the XANAX XR{reg-trade-▇▇▇▇} trademark.
1.140 "Xanax Agreement" means the agreement between Pfizer Inc. and
Organon USA Inc., executed simultaneously with this Agreement and providing for
the detailing of Xanax by Organon Pharmaceuticals USA Inc. pursuant to the
terms of such agreement.
17
ARTICLE 2
SCOPE OF THE COLLABORATION
2.1 Organon Grants. Subject to the terms of this Agreement, Organon
hereby grants to Pfizer, and Pfizer hereby accepts:
(i) an exclusive license under the Organon Patent Rights and
Organon Technical Information, and under Organon's rights in
Collaboration Intellectual Property, solely to develop, use, sell, offer
for sale, import, and have imported Products in the Co-Promotion
Countries and the Pfizer Exclusive Countries;
(ii) a co-exclusive (with Organon) license under the Organon Patent
Rights and Organon Technical Information, and under Organon's rights in
Collaboration Intellectual Property, to make or have made Products in the
Territory, provided, however, that Pfizer's right to make or have made
the Product in the Organon Exclusive Countries shall be limited to
Product made in such Organon Exclusive Country for sale outside of the
Organon Exclusive Countries; and
(iii) a co-exclusive license (with Organon) under the Organon
Patent Rights and Organon Technical Information, and under Organon's
rights in Collaboration Intellectual Property, to develop, use, sell,
offer for sale, import, and have imported Products in the Co-Marketing
Countries.
2.2 Pfizer Grants. Subject to the terms of this Agreement, Pfizer hereby
grants to Organon, and Organon hereby accepts:
(i) the exclusive right to Develop and Co-Promote (including the
right to sell) the Product together with Pfizer in the Co-Promotion
Countries in addition to any rights under the Organon Patent Rights,
Organon Technical Information and Organon's rights in Collaboration
Intellectual Property as may be necessary for Organon to perform its
obligations under and enjoy the benefits of this Agreement;
(ii) a co-exclusive right (with Pfizer) and license under the
Pfizer Patent Rights and Pfizer Technical Information, and under Pfizer's
rights in Collaboration Intellectual Property, solely to exercise
Organon's rights and perform Organon's obligations under this Agreement
with respect to the Product in the Co-Promotion Countries and
Co-Marketing Countries; and
(iii) an exclusive license under the Pfizer Patent Rights and
Pfizer Technical Information, and under Pfizer's rights in Collaboration
Intellectual Property, solely to develop, use, sell, offer for sale,
import, and have imported Products in the Organon Exclusive Countries.
2.3 Sublicenses. Either Party may sublicense any of its rights or
obligations under this Agreement, directly or indirectly, in whole or in part
to any of its Affiliates as it deems appropriate; provided that any such
sublicensee must agree to be bound by the provisions of this Agreement.
Notwithstanding the foregoing, the sublicensing Party shall remain fully
responsible for all its obligations hereunder.
2.4 Distribution and Booking of Sales. Organon shall have title to all
inventory of Product in the Co-Promotion Countries and be responsible for
packaging such Product in final packaging, and distribution, invoicing, credit
and collection for the Product in the Co-Promotion Countries. Organon will have
the right to book all sales of Products in the Co-Promotion Countries.
18
2.5 Contract Sales Forces. Without the consent of the other Party,
neither Pfizer nor Organon may use any contract sales force to Co-Promote
(including to Detail) the Product in the Co-Promotion Countries.
2.6 Compliance With Law and Codes. Both Pfizer and Organon will market,
promote and Detail the Products in accordance with applicable Law, the terms of
this Agreement and, with the then-current Global Marketing Plan. Neither Party
shall be required to undertake any action or inaction (including without
limitation any Product Launch), or to incur expenditures in connection with any
such action or inaction under this Agreement that it believes, in good faith,
may violate any Law.
2.7 Training.
(i) Pfizer and Organon shall, each at its own expense, comply
with any reasonable training plan contained in any Global Marketing Plan
or Country Marketing Plan.
(ii) No later than eighteen (18) months before the first
anticipated Product Launch in a Major Market Country which permits Co-
Promotion, Pfizer and Organon will jointly develop sales training
materials. Pfizer and Organon will thereafter cause their training
personnel to train such persons with such training materials and
Promotional Materials (as defined in Article 2.9 below). The Parties
shall each receive reasonable quantities of training materials for
marketing, Detailing and promoting the Product consistent with their
Detail Requirements.
2.8 Product-Related Meetings. If a Party organizes Product-related
meetings of its employees (such as launch meetings or periodic briefings of its
Sales Representatives), it will make reasonable efforts to keep the Product-
related portions of such meetings independent from other matters and to give
the other Party advance notice of such meetings. If requested by the other
Party, the Party organizing such meeting will permit representatives of the
other Party to attend and participate in such meetings or such portions thereof
which relate to the promotion of the Product, in either case at the other
Party's sole cost and expense.
2.9 Promotional Materials. The Party's respective Sales Representatives
will only utilize promotional, advertising, communication and educational
materials (including all written, graphic, electronic, audio and video pieces
and including journal advertisements, direct mail, direct to consumer
advertising, internet postings, broadcast advertisements and sales aids (pens,
cups, note pads and the like)) relating to the Product (collectively
"Promotional Materials") and only conduct promotional activities for the
Product which, in each case, have been approved in the Global Marketing Plan, a
Country Marketing Plan, or otherwise by the GCC. All Promotional Materials must
be consistent with the Global Marketing Plan and approved by the applicable
CCC. In addition, promptly after the Effective Date, for the US Territory, and,
as mutually agreed upon by the Parties, for other Co-Promotion Countries, the
Parties will mutually agree upon procedures whereby designated representatives
of each Party representing the marketing, legal, medical and regulatory
functions, will meet, whether in person, by telephone, or by videoconference,
in order to conduct a review of all promotional activities (other than
Detailing) and Promotional Materials prior to final approval thereof.
Promotional Materials shall be allotted to each Party according to that Party's
Detail Requirement for the applicable Year. All promotional activities
conducted by the Parties' Sales Representatives shall be consistent with the
Promotional Materials so approved and the then-current Global Marketing Plan.
2.10 Samples. Following Launch of the Product, Organon shall provide
Pfizer with Product samples as required in the applicable Global Marketing Plan
or Country Marketing Plan. Samples will be allocated fairly between the Organon
sales force and Pfizer sales force in accordance with the number of Details the
respective field forces are required to undertake as set forth in the Global
Marketing Plan or Country Marketing Plan. Organon shall ship such samples to a
central location designated by Pfizer. Organon and Pfizer shall use samples
strictly in accordance with the then-current Global Marketing Plan or Country
Marketing Plan and shall store and distribute all samples in full compliance,
and otherwise fully comply, with all applicable Laws, including, in the US
Territory, the requirements of the Prescription Drug Marketing Act of 1987, as
amended (the "PDMA"). Pfizer and Organon each will maintain those records
required by the PDMA and all other Laws with respect to the samples allocated
to each of them.
19
Organon and Pfizer shall be responsible for the filing of any necessary reports
to FDA or other Regulatory Authorities in connection with the PDMA and other
applicable Laws with respect to the samples allocated to each of them. Each
Party will destroy any samples not distributed by its Sales Representatives at
its sole expense.
2.11 Medical Inquiries. The GCC and CDRC will provide the Parties with
information and materials relevant or appropriate to allow the Parties' medical
and sales professionals, as appropriate, to respond to those medical questions
or inquiries from the medical and paramedical professions and consumers
relating to any FDA (or other Regulatory Authority) approved use of the
Product. Each of the Parties will only use these materials, which shall be
consistent with the relevant approved Product labeling, when answering such
questions and inquiries so as to ensure that medical and sales professionals
from both Parties are responding to such questions or inquiries in the same
manner. The GCC and CDRC will provide the Parties with information, materials
and instructions to allow medical professionals from both Parties to respond to
medical questions or inquiries concerning matters not consistent with FDA (or
other Regulatory Authority) approved Product labelling in accordance with the
procedures for responding to unsolicited medical inquiry requests on off-label
use, which procedures shall be agreed upon by the Parties.
2.12 Collaboration Principles. It is the intention of the Parties, as
expressed in this Agreement and the Production Agreements, that, other than
with respect to certain Development Costs as set forth in Article 4.4, each
Party shall be responsible for [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]%) of the Marketing Costs, Distribution
Costs, Development Costs and Cost of Goods in the Co-Promotion Countries, and
will each be entitled to receive [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]%) of the Net Sales of the Product in the
Co-Promotion Countries.
2.13 Commercially Reasonable Efforts. The Parties covenant and agree to
use Commercially Reasonable Efforts with respect to carrying out each of their
respective obligations under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Organon. Organon hereby represents,
warrants as of the date hereof to Pfizer that:
(i) Organon (a) is a company validly existing and in good
standing under the Laws of the Republic of Ireland, (b) is duly qualified
and in good standing under the Laws of each jurisdiction where its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified would not
have a material adverse effect on its financial condition or its ability
to perform its obligations hereunder including any adverse effect on the
Organon Patent Rights, Organon Technical Information, the Compound or the
Current Product (an "MAE"), (c) has the requisite power and authority and
the legal right to conduct its business as now conducted and hereafter
contemplated to be conducted, (d) has or will obtain all necessary
licenses, permits, consents and approvals from or by, and has made or
will make all necessary filings with, all Governmental Authorities having
jurisdiction over Organon, to the extent required for the ownership and
operation of its business, except where the failure to obtain such
licenses, permits, consents or approvals, or to make such notices, would
not have an MAE, and (e) is and its Affiliates are in compliance with its
applicable charter documents, with the
20
power and authority to enter into each Alliance Agreement to which it is
a party and to perform its obligations under such agreements;
(ii) The execution, delivery and performance of the Alliance
Agreements to which it is a party by Organon and each of its Affiliates
and all instruments and documents to be delivered by Organon hereunder
and the consummation of the transactions contemplated hereby and thereby
(a) are within the corporate power of Organon or the applicable
Affiliate, (b) have been duly authorized by all necessary or proper
action, (c) do not conflict with any provision of Organon's or the
applicable Affiliate's charter documents, (d) will not violate any Law or
regulation or any order or decree of any court or Governmental Authority,
(e) except for filings pursuant to HSR Act, will not require any filing,
permit, authorization, consent or other approval from any Governmental
Authority or from any other person, firm or corporation, and (f) will not
violate or conflict with any terms of any indenture, mortgage, deed of
trust, lease, agreement, or other instrument (A) to which Organon or its
applicable Affiliate is a party, or by which Organon or its applicable
Affiliate or any of its or its applicable Affiliate's property is bound
(including the Organon Patent Rights, Organon Technical Information, the
Compound or the Current Product, but excluding the [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION] Patent Rights), or (B) to the actual knowledge
of Organon and its Affiliates ("Organon's knowledge"), to which
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] is a party which relates to
Organon Patent Rights, Organon Technical Information, the Compound or the
Current Product, which violation would have an MAE;
(iii) This Agreement has been duly executed and delivered by
Organon and constitutes the valid, binding and enforceable obligation of
Organon;
(iv) (a) The Organon Patent Rights, as set forth on Schedule
1.94, and Organon Technical Information licensed hereunder constitute all
of the intellectual property and know-how under its and its Affiliates'
control with respect to the manufacture, use, sale, offer to sell or
import of the Compound and the Current Product; (b) Organon is the legal
and beneficial owner of all Organon Patent Rights (other than the
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] Patent Rights) and all Organon
Technical Information, and no other person, firm, corporation or other
entity has any right, interest or claim in or to, and Organon has not
entered any agreement (other than the [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] Agreement) granting any right, interest or claim in or to,
the Organon Patent Rights or Organon Technical Information; and (c) none
of the Organon Patent Rights (other than the [CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] Patent Rights) (and to Organon's knowledge, none of the
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]Patent Rights) are currently
involved in any interference, reissue, reexamination, or opposition
proceeding, and neither Organon nor any of its Affiliates has received
any written notice from any Third Party of any actual or threatened claim
or assertion to the contrary;
(v) To Organon's knowledge: (a) no Third Party is infringing any
claims of any issued patents encompassed within the Organon Patent Rights
with respect to the Product; and (b) the manufacture, use sale, offer to
sell or import by Pfizer or Organon of the Compound or the Current
Product does not and will not infringe the intellectual property rights
of any Third Party. Neither Organon nor any of its Affiliates has
received a notice, claim or assertion from any Third Party to the effect
thereof, or that challenges or questions the right of Organon or its
Affiliates to use any of the Organon Patent Rights or Organon Technical
Information to manufacture, use, sell, offer to sell or import the
Compound or the Current Product. Organon has furnished to Pfizer all
material information in its possession requested by Pfizer as to the
foregoing statements. The
21
Organon Patent Rights include claims that by their terms would be
infringed by making, having made, using, selling and having sold the
Current Product in the Countries covered by the Organon Patent Rights. To
Organon's knowledge, the issued or granted claims in the Organon Patent
Rights and the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Patent Rights are
valid and enforceable.
(vi) None of the rights granted (or intended to be granted) to
Pfizer by Organon hereunder, including without limitation the Organon
Patent Rights (other than the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
Patent Rights) and the Organon Technical Information, are subject to any
lien, charge, claim, pledge, security interest, charge, conditional sale
agreement or other title retention agreement, lease, mortgage, security
agreement, option or other encumbrance (including without limitation the
filing of, or agreement to give, any financing statement under the
Uniform Commercial Code of any jurisdiction in the US Territory or other
comparable filing in any other Country in the Territory);
(vii) Schedule 1.94 sets forth a true and complete list of all
Organon Patent Rights (other than the [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] Patent Rights), and to the Organon's knowledge, a true and
complete list of the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Patent
Rights;
(viii) Schedule 3.1(viii) contains a complete list of all material
agreements with Third Parties relating to the development and manufacture
of the Product. Organon has previously disclosed and provided complete
copies to Pfizer of all such agreements, none of which have been
modified, supplemented or amended;
(ix) There is no Proceeding pending with respect to the Organon
Patent Rights (other than the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
Patent Rights), Organon Technical Information, the Compound or the
Current Product, including without limitation to the conduct of any
clinical trials, manufacturing activities or other activities relating to
the transactions contemplated by the Alliance Agreements, or to Organon's
knowledge, pending with respect to the [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] Patent Rights. To Organon's knowledge, there is no
Proceeding threatened against Organon or [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION], or either of their Affiliates, with respect to the Organon
Patent Rights, Organon Technical Information, the Compound or the Current
Product, including without limitation to the conduct of any clinical
trials, manufacturing activities or other activities relating to the
transactions contemplated by the Alliance Agreements;
(x) The [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement
heretofore delivered by Organon to Pfizer together with all Development
Programmes to the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement
(which have not been amended in any respect) represents the complete
agreement between and among [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] and
Organon and its Affiliates relating to the Compound and the Product
including, without limitation, the manufacturing thereof. The
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] Agreement is in full force and
effect, all payments to date required to be made thereunder by Organon
and its Affiliates, as applicable, have been made,
22
and no default exists under the [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] Agreement;
(xi) Organon has disclosed to Pfizer all material information
known to Organon or its Affiliates relating to (i) the safety and
efficacy of the Product and the Compound, (ii) the drug quality,
including stability, variability, impurities and delivery performance in
each case relating to the Compound, and (iii) the status of discussions
with FDA or any Governmental Authorities directly relating to the Product
and the Compound;
(xii) All manufacturing operations conducted by Organon and its
Affiliates (or by Third Parties on their behalf) relating to the
manufacturing of the clinical supplies of the Current Product are being
conducted in material compliance with cGMP and other applicable
requirements and standards of any Governmental Authority in which such
manufacturing is being conducted; and
(xiii) Organon represents and warrants that Organon together with
the entities listed in the definition of "Organon Group Parent" represent
the companies through which Organon conducts its most significant
marketing and research activities, and in the aggregate, comprise at
least [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] ([CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]%) of the Organon Group (as measured from the beginning to the
end of the most recently completed fiscal year based upon assets, net
sales and/or net income under GAAP).
3.2 Representations and Warranties of Pfizer. Pfizer hereby represents,
warrants as of the date hereof to Organon that:
(i) Pfizer (a) is a company validly existing and in good standing
under the Laws of the State of Delaware, (b) is duly qualified and in
good standing under the Laws of each jurisdiction where its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not have
a material adverse effect on its financial condition or its ability to
perform its obligations hereunder, (c) has the requisite power and
authority and the legal right to conduct its business as now conducted
and hereafter contemplated to be conducted, (d) has or will obtain all
necessary licenses, permits, consents, or approvals from or by, and has
made or will make all necessary notices to, all Governmental Authorities
having jurisdiction over Pfizer, to the extent required for the ownership
and operation of its business, except where the failure to obtain such
licenses, permits, consents or approvals, or to make such notices, would
not have a material adverse effect on its financial condition or its
ability to perform its obligations hereunder, and (e) is in compliance
with its charter documents, with the power and authority to enter into
the Alliance Agreements and to perform its obligations under such
agreements;
(ii) The execution, delivery and performance of the Alliance
Agreements by Pfizer and all instruments and documents to be delivered by
Pfizer hereunder and the consummation of the transactions contemplated
hereby and thereby (a) are within the corporate power of Pfizer, (b) have
been duly authorized by all necessary or proper action, (c) do not
conflict with any provision of Pfizer's charter documents, (d) will not
violate any Law or regulation or any order or decree of any court or
Governmental Authority, (e) except for filings pursuant to the HSR Act,
will not require any filing, permit, authorization, consent or other
approval from any Governmental Authority or from any other person, firm
or corporation, and (f) will not violate or conflict with any terms of
any indenture, mortgage, deed of trust, lease, agreement, or other
instrument to which Pfizer is a party, or by which Pfizer or any of its
property is bound, which violation would have a material adverse effect
on its financial condition or on its ability to perform its obligations
hereunder; and
23
(iii) This Agreement has been duly executed and delivered by Pfizer
and constitutes the valid, binding and enforceable obligation of Pfizer.
3.3 Additional Covenants. Organon covenants and agrees with Pfizer that
Organon shall maintain the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement in
good standing and shall not take any actions (or omit or fail to take any
actions) which would result in a material breach of the [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] Agreement. Organon agrees that (i) it shall not amend,
modify or supplement the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement, or
(ii) agree to or consent to any amendment, modification or supplement to the
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] Agreement in either case without the
consent of Pfizer, which consent will not be unreasonably withheld. In
addition, Organon shall not sell, assign, convey, pledge, hypothecate or
otherwise transfer the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement or Organon's
rights or obligations thereunder, or otherwise make any commitments in a manner
that conflicts with Pfizer's rights hereunder without the consent of Pfizer,
which consent will not be unreasonably withheld. Organon shall immediately
notify Pfizer upon receipt by Organon or its Affiliates of any notice from
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] of [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]'s
intent to terminate the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement,
exercise its respective rights or remedies thereunder, or otherwise take any
action which may affect Pfizer's rights under this Agreement. Organon shall
cause each of its Affiliates to comply with this Agreement and meet the
obligations that such Affiliates may have to Pfizer.
3.4 Disclaimer of Warranties. NEITHER PARTY MAKES ANY REPRESENTATION OR
WARRANTY OTHER THAN THOSE EXPRESSLY PROVIDED HEREUNDER AND EACH PARTY HEREBY
DISCLAIMS ALL SUCH OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE PRODUCT. THE PARTIES UNDERSTAND AND AGREE THAT, NOTWITHSTANDING
ANY OF THE REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN, THERE ARE INHERENT
RISKS ATTENDANT TO PHARMACEUTICAL PRODUCT DEVELOPMENT AND THEREFORE THERE CAN
BE NO ASSURANCES THAT THE PRODUCT WILL RECEIVE REGULATORY APPROVAL IN ANY
COUNTRY IN THE TERRITORY; IT BEING UNDERSTOOD AND AGREED, HOWEVER, THAT THIS
SENTENCE SHALL NOT BE DEEMED TO ALTER OR OTHERWISE MODIFY ANY OF THE
REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN IN ANY WAY.
ARTICLE 4
PRODUCT DEVELOPMENT
4.1 Development Plan and Budgets. The Parties will jointly pursue the
Development of the Product to attain the attributes as described in the Product
Profile in accordance with the Development Plan, as such Product Profile may be
revised by mutual agreement of the Parties pursuant to Article 10. The draft
of the initial Development Plan is attached to this Agreement as Schedule 4.1.
Such plan will be reviewed and modified as deemed appropriate by the CDRC
commencing promptly after the Effective Date. Thereafter, the Development Plan
will be reviewed by the CDRC at least every six (6) months and updated on at
least an annual basis (or more frequently as may be determined by the CDRC).
The Parties agree that beginning on the Effective Date, they will discuss those
activities that are reasonably
24
necessary for the Development of the Product, with Pfizer taking the lead and
having the right to [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION].
4.2 Completed and Ongoing Studies. Promptly after the Effective Date,
Organon shall provide to Pfizer a list of the Product Studies that have been
completed to date on the Product, as well as a list of those Product Studies
that are in the process of being conducted.
4.3 Budget Planning. The Parties will on or before October 31 of each
Year (commencing with the Second Year) determine the budget to be included in
the Development Plan for the subsequent Year, and agree on a non-binding
forecast for the subsequent Year.
4.4 Development Costs.
(i) Subject to this Article 4.4, all Development Costs incurred
by the Parties in the Development of the Product, including Development
Costs incurred by Organon prior to the Effective Date, will be shared
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) by Pfizer and [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) by
Organon, provided, however, that Pfizer's share of Development Costs
incurred by Organon prior to the Effective Date (the "Prior Development
Costs") shall not exceed $[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] USD in
total. Promptly after execution of this Agreement, Organon shall provide
Pfizer with supporting information setting forth, in detail, the then-
current Prior Development Costs incurred by Organon and a forecast of
additional Prior Development Costs that Organon expects to incur prior to
the Effective Date. Within five (5) Business Days after the Effective
Date, Organon shall provide Pfizer with a final accounting of the Prior
Development Costs, and Pfizer shall have fifteen (15) Business Days to
review such accounting. Within twenty (20) Business Days of receipt of
such accounting, Pfizer shall pay, in accordance with Article 9.5, its
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) share of all such Prior Development Costs that
are not in good faith disputed by Pfizer.
(ii) If Pfizer declines to exercise its rights to terminate this
Agreement either under (x) Article 13.5(i)(c) based on the results of the
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]; or (y) Article 13.5(ii)(a) based
on the results of the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION], then,
commencing with the date on which all of Pfizer's termination rights
under those Articles have expired (the "Adjustment Date"), Development
Costs for the Current Product for the Initial Indications will be shared
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) by Pfizer and [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO
25
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) by Organon, and such adjustment will also
apply retroactively, subject to the limitation described in Article
4.4(i), for all Development Costs for the Current Product for the Initial
Indications incurred by the Parties prior to the Adjustment Date.
(iii) If Pfizer has declined to exercise its right to terminate
this Agreement under (x) Article 13.5(i)(c); and (y) Article13.5(ii)(a),
then, within ten (10) Business Days of the Adjustment Date, Pfizer will
send a written notice to that effect to Organon which notice shall
identify any amounts due as a result of the retroactive application of
the adjustment to the Parties' sharing of Development Costs set forth in
subparagraph (ii) above (the "Adjustment Amount"). Within ten (10)
Business Days of the date of such notice, Pfizer will pay Organon the
Adjustment Amount in accordance with the provisions of Article 9.5.
(iv) The Parties have determined that the total Development Costs
required to obtain a Regulatory Approval for a Product meeting the
Product Profile in the Major Market Countries is [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION] (US$[CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]) (the
"Estimated Development Costs"). The Parties agree that either Party may
exceed the Estimated Development Costs by up to [CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) if such
excess expenditure is necessary to comply with such Party's obligations
under the then-current Development Plan, provided, however, that unless
mutually agreed-upon by the Parties, neither Party shall be required to
reimburse the other for any Development Costs incurred by the other Party
in excess of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]%) of such Party's share of the
Estimated Development Costs.
4.5 Development of Improved Products. At the request of either Party, the
Parties shall in good faith meet and discuss jointly developing Improved
Products where preclinical and/or clinical results provide a reasonable basis
for pursuing such additional development or the pursuit of such additional
development is otherwise potentially commercially attractive. If the Parties
agree to pursue such additional development, the Parties shall amend the
Development Plan accordingly. If the Parties do not agree to pursue such
additional development, then, neither Party shall have the right to pursue such
development other than Organon's right to pursue development of a New
Indication in accordance with Articles 4.6, 4.7 and 4.8.
4.6 New Indications. With respect to development of any New Indication
that the Parties do not agree to develop jointly pursuant to Article 4.5,
Organon shall have the right to pursue the development of such New Indication
at its sole expense; provided, however, that (i) Organon's development of any
such New Indication would not, based on the best available scientific evidence,
be reasonably likely to have a materially adverse effect on the Product then
being Co-Promoted by the Parties; and (ii) the Product for any such New
Indications is sold under a trademark or trademarks other than the Trademark(s)
(unless prohibited by the FDA or other Regulatory Authority, in which case the
Trademark(s) may be used) and is developed and sold in a formulation and dosage
strength that does not create a reasonable potential that the Product for such
New Indication could be substituted by prescribers, dispensers and/or Third
Party payers for any Product being Co-Promoted by the Parties (the
"Substitution Product"). For the avoidance of doubt, it is understood that
"reasonable potential" may include situations where the Substitution Product is
marketed, promoted, distributed or sold for use other
26
than for use in the Initial Indications (or any other indication then being
Co-Promoted by the Parties), utilizing a different trademark from the
Trademark(s), and where the Substitution Product is labeled for use in
indications that are solely outside the field of psychiatric disorders. In
furtherance of, but without otherwise limiting Organon's obligations pursuant
to this Article 4.6, Organon covenants and agrees that during the Term in each
Country in the Territory, Organon shall not, and shall ensure that its
Affiliates and licensees shall not, market, promote, distribute or sell any
Product for a New Indication in a [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] or
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] formulation with a [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] mg, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] mg,
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] mg, [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] mg,
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] mg or [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] mg
dosage strength.
4.7 Pfizer Opt-In Right. Subject to Article 4.8, if Organon or any of its
Affiliates intends to directly or indirectly, market, sell, detail, promote or
distribute the Product for a New Indication in any Country in the Territory at
any time during the applicable Term, then, Organon shall provide Pfizer with
notice to that effect (the "Opt-In Notice") within: (x) sixty (60) days after
filing by Organon or any of its Affiliates of the first NDA or other
Application for Regulatory Approval for such New Indication with FDA or other
Regulatory Authority, as applicable; or (y) sixty (60) days after the
acquisition by Organon or any of its Affiliates, whether by merger,
acquisition, license, or other similar transaction, of the rights to the
Product for a New Indication for which an NDA or other Application for
Regulatory Approval, as applicable, has already been filed with or approved by
the FDA or other Regulatory Authority. Such Opt-In Notice shall include the
Supporting Information with respect to the New Indication as well as a detailed
statement of the New Indication Development Costs. Pfizer shall have the
option, exercisable at its sole discretion, but in no event later than ninety
(90) days after Pfizer's receipt of the Opt-In Notice to notify Organon whether
Pfizer elects to Co-Promote such New Indication with Organon in the Co-
Promotion Countries (the "Election Notice"). If Pfizer elects to Co-Promote
such New Indication with Organon in the Co-Promotion Countries:
(i) then Pfizer shall pay Organon [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of the
New Indication Development Costs for such New Indication as of the date
of the Opt-In Notice in two (2) equal installments, the first within
thirty (30) days of Organon's receipt of the Election Notice, and the
second within 12-months after payment of the first installment; and
(ii) such New Indication shall be deemed a Product for all
purposes under this Agreement and Co-Promoted under the same terms and
conditions as the Current Product.
4.8 Sales for New Indications. If Pfizer does not elect to Co-Promote the
Product for a particular New Indication with Organon pursuant to Article 4.5 or
Article 4.7, and Organon Launches the Product for such New Indication in a
Country in the Territory, Organon acknowledges that Launch of the Product for
such New Indication may require that the Parties distinguish sales of the
Product for such New Indication from sales of the Product for the Initial
Indications (or any other indication for which the Parties are then Co-
Promoting the Product). In order to allow for such distinction where
necessary, after
27
the Effective Date but prior to the Launch in the Territory of the first New
Indication, the Parties will mutually agree upon a Third Party vendor (e.g.,
IMS, Verispan, etc.) which Third Party vendor shall periodically, but no less
often than calendar monthly, measure, as accurately as is reasonably possible,
in accordance with Schedule 4.8, sales of the Product in the Territory for New
Indications. The agreement as to such Third Party shall not be unreasonably
withheld or delayed by either Party and the Third Party named in Schedule 4.8
is hereby deemed approved by both Parties. For purposes of calculating
Organon's payments to Pfizer pursuant to Article 9.1, Net Sales of the Product
will be reduced by the percentage of Product sales reported for the applicable
accounting period by such Third Party vendor as representing sales for New
Indications not being Co-Promoted by the Parties. The determination of the
Third Party as to the sales for any such New Indication shall be final and
binding on the Parties, absent manifest error, and shall not be subject to
audit under this Agreement. If due to changes made by Third Party vendors,
available information, or other unforeseen circumstances, the methodology set
forth on Schedule 4.8 cannot be employed by the Parties, then the Parties shall
mutually agree upon the use of an alternative vendor or methodology, as
applicable, in order to accomplish the purpose described in this Article, and
neither Party will unreasonably withhold or delay its agreement to any such
alternative.
4.9 If the Parties do not agree to jointly develop the Product for a
specific New Indication pursuant to Article 4.5 and Pfizer does not thereafter
elect to Co-Promote the Product with Organon for such New Indication pursuant
to Article 4.7, then, effective as of such time as Pfizer elects not to Co-
Promote the Product for the specific New Indication in accordance with Article
4.7 (the "Organon-Only Product"), such Organon-Only Product will be excluded
from the definition of "Product" hereunder (other than with respect to the
calculation of payments owed to Pfizer pursuant to Article 9.1 as described
above in Article 4.8 and other than with respect to the applicable provisions
necessary for purposes of such calculation including, without limitation,
Article 8A).
ARTICLE 5
MANUFACTURING AND SUPPLY
5.1 Production Agreements. The Parties acknowledge that on the date
hereof each of them or their respective Affiliates are entering into the
Production Agreements for, among other things, the manufacture of Products in
accordance with the respective terms of the Production Agreements.
5.2 Supply Allocation. At any time following Launch in more than one
Country, in the event that (a) the GCC and MSC agree that the availability of
the Product shall be insufficient whether due to a shortage of Intermediate, or
the Compound or otherwise, to meet the forecasted need for Product for the
following Calendar Quarter as determined by the CCCs and aggregated by the GCC,
or (b) availability of Product is in fact insufficient to fill orders on an
ongoing basis, then the GCC and MSC shall confer to resolve such insufficiency.
In the event the GCC and MSC cannot resolve such insufficiency, then (i) there
shall be no further Launches of Product in any Country until the insufficiency
is eliminated, (ii) to the extent the insufficiency continues, then all safety
stock and sampling in any Country where the Product is sold will be utilized in
sales in such Country, and (iii) to the extent the insufficiency still
continues, then unless otherwise agreed, the available Product shall be
allocated to the Countries where the Product is sold in proportion with the
then-current forecasted sales for the Product in each such Country.
5.3 [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] Plans. The Parties shall work
together to monitor future requirements and the [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] capabilities of Organon and Pfizer to ensure the timely and
adequate [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] of the Intermediate and the Product. In
order to help ensure adequate [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
28
COMMISSION] of the Intermediate and the Product, the Parties shall, within
ninety (90) days of the Effective Date, agree upon the existing development
plan for the processes for [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] the Compound
and the Product for the initial Launch of the Product (such [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION], the "First Generation [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]",
and such plan, the "First Generation [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Plan"). The
First Generation [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Plan will include,
without limitation, all information required to support submission of the First
Generation [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] to the FDA and other Regulatory
Authorities in accordance with the timeline agreed upon by the Parties. In
addition, the Parties shall, within one hundred and eighty (180) days of the
Effective Date, explore options for a commercially viable and technically
feasible alternative [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] and then agree upon a
corresponding [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] plan for establishing an
improved, or "second generation," process for [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] the Compound (such [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION], the "Second
Generation [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]", and such plan, the "Second
Generation [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] Plan"). The Second Generation
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] Plan will have, as one of its objectives,
the completion of work by the Parties, as such work is allocated in the Second
Generation [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] Plan, on the Second Generation
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION], no later than the first date of an action
by FDA or another Regulatory Authority which action could result in a
Regulatory Approval for the Product. Each of the First Generation [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] Plan and the Second Generation [CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] Plan shall allocate responsibilities for accomplishing the tasks
set forth in such plan between Pfizer and Organon, and the Parties shall use
all reasonable and diligent efforts to cooperate with each other, including,
without limitation, sharing any of its Technical Information with the other
Party, in order to successfully execute the applicable plan. Without limiting
the foregoing, either Party may, at its own expense, undertake additional work
on the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] for the Compound or the Product. If the
Parties successfully develop a Second Generation [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] that is acceptable to each Party, then the Parties will discuss
sourcing strategies for implementing the Second Generation [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] with the goals of (i) maintaining consistency with the
principles set forth in the Production Agreements; and (ii) arriving at the
most cost-effective [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] reasonable achievable
under the circumstances.
29
5.4 Capacity Plans. Promptly after the Effective Date, the MSC will (i)
develop a standard for measuring Intermediate and Compound capacity at the
Parties' (or their Affiliates' or subcontractors') manufacturing facilities,
and (ii) develop a plan (the "Capacity Plan") designed to ensure that the
capacity of the manufacturing facilities at which Organon or Pfizer or their
respective Affiliates intends to manufacture or have manufactured the
Intermediate and the Compound have optimum capacity to meet the forecasts set
by the GCC and safety stocks agreed by the MSC. Unless otherwise established
by the MSC, the following safety stocks will be kept: (a) six (6) months of
Intermediate; (b) nine (9) months of Compound; and (c) two (2) months of
Primary Packaged Product. Pfizer or its Affiliate will own title to and will
keep the safety stocks of Intermediate, Compound and Primary Packaged Product.
Pfizer will have the right to keep the safety stocks of Primary Packaged
Product at a warehouse facility owned or leased by Organon or its Affiliates.
The Capacity Plan will include timelines and milestone dates by which the
Parties must establish that the Intermediate, Compound and Primary Packaged
Product can be manufactured at the forecasted scale. Each Party shall be
responsible for having the agreed-upon capacity installed at those
manufacturing locations owned by such Party, its Affiliate or subcontractor,
provided, however, that the Parties shall mutually agree upon investments in
capacity at [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]. In addition, each Party or its
Affiliate will be responsible for securing commercial and/or quality
agreements, as applicable, for raw materials or services, as necessary under
the circumstances, in order for such Party or its Affiliate to carry out its
obligations under the Production Agreements.
5.5 Release Testing. Each Party will be responsible for release testing
and the release of the Product (or component thereof), for that portion of the
supply chain for which such Party is responsible.
ARTICLE 6
COMMERCIALIZATION
6.1 Co-Promotion. Upon obtaining Regulatory Approval and Price Approval
in a Co-Promotion Country, the Parties shall use Commercially Reasonable
Efforts to Launch and Co-Promote the Product in such Co-Promotion Country in
accordance with the Global Marketing Plan and the applicable Country Marketing
Plan.
6.2 Detail Requirements. Subject to Schedule 1.40 to this Agreement, the
Global Marketing Plan, and the applicable Country Marketing Plan, the Parties
will develop, review and mutually agree upon appropriate Detailing efforts
regarding targets, call frequency, and other sales force deployment issues in
order to achieve sales objectives consistent with the forecasts developed by
the GCC with input from the CCCs. Such efforts are to be reviewed and updated
by the Parties at least on an annual basis. Commencing with the first Launch of
the Product in the US Territory until the second anniversary of such Launch,
Pfizer Sales Representatives in the US Territory will be instructed to Detail
the Product in the first or second position to all prescribers who are in the
top [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%)
of prescribers of antipsychotic drugs as determined by Pfizer, through the use
of reputable third party data, consistent with the manner in which Pfizer makes
such determinations for its own similar products (the "High Prescribers").
However, during the initial [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] after first
Launch of the Product in the US Territory, such Pfizer Sales Representatives
may be instructed to Detail the Product to such High Prescribers in the third
position provided that such instructions are based on Pfizer's reasonable
judgment that Detailing the Product in the third position would give such
Detail the greatest emphasis during the particular call.
6.3 Marketing Costs. In each Co-Promotion Country during each Year of the
Term, Pfizer will be responsible for [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED
30
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]%) of the Marketing Costs, and Organon will be responsible
for [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%)
of the Marketing Costs. Such Marketing Costs shall be reflected in the Parties'
Quarterly Marketing Cost Reports pursuant to Article 8A.1. Pfizer shall be
solely responsible for all Out-of-Pocket Costs and other costs solely related
to the marketing and promotion of Product in any Pfizer Exclusive Country, and
Organon shall be solely responsible for all Out-of- Pocket Costs and other
costs solely related to the marketing and promotion of Product in any Organon
Exclusive Country. In each Co-Marketing Country, each Party shall be
responsible for one hundred percent (100%) of its respective Marketing Costs.
Parties are only responsible for payments related to those Marketing Costs
defined in the Global Marketing Plan or a Country Marketing Plan, or otherwise
approved by the GCC or CCC. Unless otherwise agreed as a Consensus Matter, each
Party agrees that the Global Marketing Plan and Country Marketing Plans shall
require each Party to spend up to its share of the minimum Marketing Costs (by
Country or region, as applicable) as reflected on Schedule 6.3 plus the Excess
Marketing Expenditure described in the next sentence. Absent mutual agreement
of the Parties, however, neither Party shall be responsible for (and shall not
be reimbursed by the other Party for) any cost or expense that exceeds the
annual budgeted Marketing Costs for the applicable Country by more than
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) percent
of such budgeted amounts (the "Excess Marketing Expenditure").
6.4 Reduction of Detailing Requirements and Marketing Costs in the Major
Market Countries.
(i) Each of Pfizer and Organon shall have the right, upon one
hundred (180) days prior notice to the other Party given prior to the end
of the second consecutive Year described below, to reduce its Detailing
Requirements in the Major Market Countries and its Marketing Cost
obligations if in any two consecutive Years after (a) the second Year
after the Launch of the Product in such Major Market Country, if such
Launch occurs on or before June 30 of the calendar year, or (b) the third
Year after such Launch, if the Launch occurs after June 30 of the
calendar year, Net Sales in any such Major Market Country are less than
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) of the applicable Major Market Country
Forecast for such Major Market Country; provided that such notifying
Party is not then (i) in Material Default of its obligations under this
Agreement, (ii) is not a Shortfall Party in such Major Market Country,
(iii) is not a Detail Breaching Party in such Major Market Country, and
(iv) there is no Force Majeure in such Major Market Country that is
continuing at such time and provided further that such notice shall only
be effective if such percentage is not actually achieved by the end of
the second consecutive Year. The notice provided to the other Party shall
specify the amount in percentage terms by which it intends to so reduce
its obligations. In the event such notice provided above is given, the
other Party shall be permitted to give notice, no later than sixty (60)
days prior to the end of such Year, of its intention to reduce its
Detailing and Marketing Cost obligations, which notice shall also
describe in percentage terms the amount by which it intends to reduce its
Detailing and Marketing Cost obligations. If the Net Sales in a Major
Market Country are less than said [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) in such
second consecutive Year, each Party's Detailing and Marketing Cost
obligations in each subsequent Year in such Major Market Country shall be
reduced by the
31
amount corresponding to the percentage specified in such Party's notice,
but in no event shall either Party's respective Detailing and Marketing
Cost obligations be reduced below the product of (a) such Party's
Detailing Requirement and Marketing Cost obligations applicable under
this Agreement for the then current Year, without giving effect to this
Article 6.4(i), and (b) a fraction, the numerator of which is the mean
average Net Sales for such Country during the two consecutive Years
referred to in the first sentence, and the denominator of which is the
mean average Major Market Country forecast for such Country during such
Years, as illustrated on Schedule 6.4.
(ii) Other Readjustments in the Major Market Countries. In the
event Net Sales in any Major Market Country shall be between
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]% and [CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]% of the Major Market Country Forecast for such Major Market
Country, either Party shall have the right to initiate discussions as to
the appropriate readjustment in the terms of such Party's participation
in commercialization in such Major Market Country; provided, however
(a) mutual agreement of the Parties will be required to make any
amendments or adjustments to the terms of this Agreement; and (b) no
Party shall have any obligation of any kind to make any such amendments
or adjustments or in connection with failing to make any such amendments
or adjustments.
(iii) Adjustments for Detailing Requirements and Marketing Costs in
Other Co-Promote Countries. Each of Pfizer and Organon shall have the
right, provided such Party is not then in Material Default of its
obligations under this Agreement and is not a Shortfall Party or a Detail
Breaching Party, and there is no Force Majeure which is continuing at
such time, upon ninety (90) days prior notice to the other Party given
prior to the end of such Year described below, on a Country-by-Country
basis with respect to all Co-Promotion Countries, other than Major Market
Countries ("Other Countries"), to reduce its Detailing Requirements and
the amount of Marketing Costs as provided in this Article 6.4. In each
Other Country, the adjustment will only become effective after the end of
the third full Year after Launch, and the procedure set forth herein
shall be applied for each subsequent Year (starting with the Fifth Year)
until expiration of the Term for each such Other Country:
(a) For the first eight months during each Year (January 1
through August 31) the Net Product Sales during such eight month
period ("8 Month Sales") will be determined and compared to the Net
Sales forecast for such period ("8 Month Forecast") as set forth
in the applicable Country Marketing Plan. If the 8 Month Sales are
less than [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of the 8
Month Forecast, then the ratio ("Ratio") shall be determined by
dividing the 8 Month Sales by the 8 Month Forecast, and the
resulting Ratio shall be used (as specified in subsection (b)
below) to determine the Detailing Requirements and the amount of
Marketing Costs for the following Year.
(b) To determine the Detailing Requirements and the amount of
Marketing Costs, the then applicable Detailing Requirement and
Marketing Cost number would be multiplied by the Ratio, and the
result would be the Detailing Requirement and Marketing Cost
obligations for the following Year.
6.5 Co-Promotion Resources. It is the intention of Organon and Pfizer
that, during the Term in each Co-Promotion Country, each of Organon and Pfizer
will devote adequate resources to the Co-Promotion of the Product in the Co-
Promotion Countries and to otherwise discharge its obligations
32
under this Agreement. If Organon and Pfizer agree that one Party should provide
more than [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]%) of the Details in a Co-Promotion Country, whether because
additional Detailing is necessary beyond that contemplated in this Agreement or
otherwise, or one Party is requested to devote other resources in excess of its
appropriate share, the Parties shall first determine fair compensation to such
Party for its additional efforts. Without limiting the foregoing, other than as
set forth in Article 6.5A below with respect to each of the United Kingdom,
Spain, Germany, France and Canada, each Party must be willing, in the
applicable Country Marketing Plan, to undertake to perform at least
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%)
of the total Product Details in each Co-Promotion Country in each Year of the
applicable Term (the "Minimum Detail Percentage"). Subject to Article 2.5,
Organon may engage a contract sales force in Japan in order to satisfy the
Minimum Detail Percentage, and Pfizer's consent to such engagement shall not be
unreasonably withheld. If either Party (the "Nonperforming Party") is not
willing to undertake to perform the Minimum Detail Percentage in a Co-Promotion
Country in any Year, then (i) if Pfizer is the Nonperforming Party, Organon
shall have the right to terminate this Agreement pursuant to Article 13.3
solely with respect to such Co-Promotion Country; and (ii) if Organon is the
Nonperforming Party, Pfizer shall have the right to convert such Co-Promotion
Country from a Co- Promotion Country to a Pfizer Exclusive Country.
6.5A Co-Promotion in Canada and Certain Key EU Countries.
(i) Notwithstanding the provisions of Article 6.5 above, the
Parties agree that, the Minimum Detail Percentage shall not apply in each
of the United Kingdom, Spain, Germany, France and Canada (the "Big 5
Countries"). In each of the Big 5 Countries, the applicable CCC shall
determine each Party's Detail Requirement for each Year of the Term, and
each Party shall have the right to perform [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of the
Details in each such Country in each Year. If either Party (the "Low
Detailing Party") elects to perform fewer than [CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of the
total Details determined by the CCC to be warranted in one or more of the
Big 5 Countries in any Year, then (a) the other Party may, in its sole
discretion, elect to perform the Details that the Low Detailing Party was
not able to perform; and (b) the Low Detailing Party's share of the Net
Sales of the Product in such Country for such Year shall be reduced by
applying the following formula:
N = P - [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] - R)
N = The Low Detailing Party's new Net Sales share under this Agreement
P = The Low Detailing Party's original Net Sales share under this
Agreement (i.e., for Organon, P=[CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] and for Pfizer, P=[CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION])
33
R = the fraction (expressed as a percentage) the numerator of which is
number of Details that the Low Detailing Party has agreed to perform in
such Country in the applicable Year and the denominator of which is the
total Details agreed to be performed by the Parties in such Country in
the applicable Year.
6.6 Co-Marketing.
(i) In the event the Parties are legally unable to Co-Promote the
Product in a particular Co-Promotion Country in which they are both in
agreement that the Product should be commercialized, the Parties will
endeavor to decide whether such Country will be a Pfizer Exclusive
Country or an Organon Exclusive Country. In the absence of such
agreement, the Parties will be entitled to Co-Market the Product
independently in the Country. For the Co-Marketing Countries, Pfizer and
Organon shall each have access to all Promotional Materials developed
jointly by the Parties. If a single Trademark is used for the Product in
the Co-Promotion Countries, Organon shall have the right to use such
Trademark in the Co-Marketing Countries. Each Party shall market the
Product in a manner substantially consistent with the general strategies
expressed in the Global Marketing Plan, but shall otherwise be free to
market the Product in such Co-Marketing Country as it deems appropriate
in its sole discretion. Organon and Pfizer shall each bear all of its
own costs and expenses in advertising and promoting the Product in the
Co-Marketing Countries. Each Party shall retain all revenues accrued by
such Party (or its relevant local Affiliate) on its sales of any Product
in each Co-Marketing Country. Within sixty (60) days following the end
of each Calendar Quarter following Product Launch in any Co-Marketing
Country, each Party shall provide the JOC with a detailed report of Net
Sales made by the Party or its local Affiliate in Co-Marketing Countries.
The format of such reports shall be mutually agreed-upon by the JOC.
(ii) In the event that the Parties mutually agree to convert a Co-
Marketing Country to a Pfizer Exclusive Country, Pfizer shall pay Organon
a royalty of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]%) of Net Sales in such Country,
in lieu of the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]%) royalty set forth in Article
9.2. Such [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]%) royalty shall be subject to
adjustment pursuant to Articles 9.2(i) and 9.2(ii).
6.7 Exclusive Countries. Pfizer and Organon shall each have access to all
Promotional Materials developed jointly by the Parties for the Co-Promotion
Countries and shall bear all of its own costs and expenses in advertising and
promoting the Product in the Pfizer Exclusive Countries and the Organon
Exclusive Countries, respectively. In the Pfizer Exclusive Countries and the
Organon Exclusive Countries, each of Pfizer and Organon, as applicable, shall
conduct its business consistent with the Global Marketing Plan and the
Development Plan.
6.8 Conversion of Countries
(i) Initial Conversion from Co-Promotion Country to Pfizer
Exclusive Country. As soon as is practicable following the Effective
Date but in no event later than November 15, 2004, Organon shall provide
Pfizer with a list of each Co-Promotion Country in which Organon does not
intend to Co-Promote the Product with Pfizer. Upon Pfizer's receipt of
such notice, the
34
Co-Promotion Country or Co-Promotion Countries identified in such notice
shall be designated a Pfizer Exclusive Country.
(ii) Conversion from a Pfizer Exclusive Country to a Co-Promotion
Country or Co-Marketing Country.
(a) Notwithstanding anything to the contrary contained in
this Agreement, if Organon can demonstrate to Pfizer the
Co-Promotion Criteria for a Pfizer Exclusive Country, then at any
time from the Effective Date through and including the period
ending three (3) years from the date of Product Launch in such
Pfizer Exclusive Country, Organon may elect, upon not less than one
hundred eighty (180) days written notice to Pfizer, to convert any
Pfizer Exclusive Country to a Co-Promotion Country or, if the
applicable Law in such Country does not permit the conversion into
a Co- Promotion Country, to a Co-Marketing Country. During the one
hundred eighty (180) days following the receipt of Organon's notice
of election, the Parties shall undertake the development of a joint
marketing plan for such Country. Any such conversion shall be
effective as of the close of business on the date which is one
hundred eighty (180) days from the date of such notice (the
"Conversion Date").
(b) In the event that Organon is unable to demonstrate its
ability to conduct a Co-Promotion in any Co-Promotion Country, that
Country shall continue to be designated as a Pfizer Exclusive
Country.
(c) The Parties agree to amend Schedule 1.33 to reflect the
updated list of Co-Promotion Countries, respectively.
(iii) If a Pfizer Exclusive Country is converted into a Co-
Promotion Country within three (3) years of Product Launch in such
Country, then no later than two (2) months prior to the Conversion Date,
Pfizer shall deliver to Organon a statement (the "Interim Statement")
setting forth, in reasonable detail (a) itemized Development Costs and
Marketing Costs attributable to such Country ("Exclusive Country Costs")
for the Product for all periods ending three (3) months prior to the
Conversion Date, and (b) Pfizer's Net Sales of the Product in the Country
for the nine (9) month period ending on the date that is three (3) months
prior to the Conversion Date. Organon shall pay to Pfizer, within thirty
(30) days following receipt of the Interim Statement, an amount equal to
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) of the Exclusive Country Costs, and
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) of the foregoing Net Sales (if applicable),
all as shown on the Interim Statement. No later than thirty (30) days
following the Conversion Date, Pfizer shall deliver to Organon a
statement (the "Conversion Date Statement") setting forth, in reasonable
detail, Exclusive Country Costs for the Product during the three (3)
month period ending on and including the Conversion Date and Pfizer's Net
Sales of the Product in the Country (if any) for the three (3) month
period ending on the Conversion Date. Organon shall pay to Pfizer,
within thirty (30) days following receipt of the Conversion Date
Statement, an amount equal to [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of the Exclusive
Country Costs and [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN
35
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]%) of the Net Sales (if applicable), all as shown on the
Conversion Date Statement.
(iv) Beginning on the Conversion Date, Products in the applicable
Country shall be treated as a Product in a Co-Promotion Country;
provided, however, that for a reasonable transition period of up to one
hundred and eighty (180) days, Pfizer shall be entitled to continue to
purchase Product and book sales thereof but shall then pay Organon
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) of such Net Sales as a Co-Promotion fee during
such transition period, in lieu of any royalty payments due under Article
9.2. In the event that Organon's local Affiliate is not capable of
booking sales of the Product in a particular Co-Promotion Country by the
end of such transition period, then the local Pfizer Affiliate shall be
entitled to continue book such sales.
(v) If a Pfizer Exclusive Country is converted into a Co-
Marketing Country, then, no later than two (2) months prior to the
Conversion Date, Pfizer shall deliver to Organon an Interim Statement
setting forth, in reasonable detail, Exclusive Country Costs for the
Product for all periods ending three (3) months prior to the Conversion
Date, all Internal Costs incurred by Pfizer in relation to the Country in
question directly related to complying with the registration requirements
of the Country for the Product for all periods ending three (3) months
prior to the Conversion Date ("Internal Registration Costs"), and
Pfizer's Net Sales of the Product in the Country for the nine (9) month
period ending on the date that is three (3) months prior to the
Conversion Date. Organon shall pay to Pfizer, within thirty (30) days
following the receipt of the Interim Statement an amount equal to
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) of such Internal Registration Costs,
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) of such Exclusive Country Costs and
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) of Net Sales, all as shown on the Interim
Statement. No later than thirty (30) days following the Conversion Date,
Pfizer shall deliver to Organon a Conversion Date Statement setting
forth, in detail, Exclusive Country Costs for the Product and all
Internal Registration Costs incurred by Pfizer in relation to the Country
in question during the three (3) month period ending on and including the
Conversion Date and Pfizer's Net Sales of the Product in the Country for
the three (3) month period ending on the Conversion Date. Organon shall
pay to Pfizer, within thirty (30) days following the receipt of the
Conversion Date Statement, an amount equal to [CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of such
Internal Registration Costs, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of such Exclusive
Country Costs and [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE
36
COMMISSION]%) of Net Sales, all as shown on the Conversion Date
Statement. The license granted by Organon to Pfizer pursuant to Article
2.1 will remain applicable with respect to such Country, any and all
ongoing Development Costs shall be shared by the Parties in accordance
with Article 4.4, and Marketing Costs shall be borne independently by the
Parties.
(vi) In the event that each Party is required by Law to operate
through a local distributor in a Co-Promotion Country then such Country
shall remain a Co-Promotion Country; provided, however, that the
distributor for the Product in such Country shall be selected (x) by the
Party that maintains management services in such Country through its own
employees, or (y) if both Parties maintain management services in such
Country then as mutually agreed to by the Parties.
(vii) Conversion to Organon Exclusive Country. If Pfizer (a) does
not file for Regulatory Approval in a Pfizer Exclusive Country within
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] after Launch of the Product in
the US Territory (or, if Regulatory Approval in such Pfizer Exclusive
Country requires that the Product receive Regulatory Approval in a
particular Country other than the US Territory, such as the Country of
manufacture of the Product or a Key EU Country, then within [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION] after Launch in such Country), or (b) fails to
Launch the Product in such Pfizer Exclusive Country within [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION] of receipt of both Regulatory Approval and Price
Approval in such Country, then Organon may request, and Pfizer shall
agree, to convert such Country into an Organon Exclusive Country. To the
extent that Pfizer has taken steps in such Country to obtain Regulatory
Approval, Pfizer shall in such event, at Organon's sole expense, provide
transitional assistance to Organon as may be reasonably necessary with
the Regulatory Authorities in the relevant Country to facilitate Organon
to obtain Regulatory Approvals in such Country.
6.9 Detail Shortfalls
(i) In the event that either Party fails to perform (such Party,
a "Shortfall Party") at least [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of its Detail
Requirement in any Year as reported pursuant to Article 8A.6 or verified
pursuant to Article 8A.7 in any of the Major Market Countries, the
Shortfall Party shall pay to the other Party as liquidated damages an
amount equal to the Detail Cost, multiplied by the applicable factor set
forth below (the "Shortfall Factor") multiplied by the total number of
Details in the shortfall (the Detail Cost, multiplied by the number of
Details in the shortfall, multiplied by the Shortfall Factor, the "Detail
Shortfall Payment Amount"), on an incremental basis as set forth below:
Detail Shortfall Level Shortfall
Factor
For such * [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED [CONFIDENTIAL INFORMATION
portion of SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]% but < HAS BEEN OMITTED AND FURNISHED
shortfall [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
which is: SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] AND EXCHANGE COMMISSION]
% of Detail Requirement
37
For such * [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED [CONFIDENTIAL INFORMATION
portion of SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]% but < HAS BEEN OMITTED AND FURNISHED
shortfall [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
which is: SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] AND EXCHANGE COMMISSION]
% of Detail Requirement
For such * [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED [CONFIDENTIAL INFORMATION
portion of SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]% but < HAS BEEN OMITTED AND FURNISHED
shortfall [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
which is: SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] AND EXCHANGE COMMISSION]
% of Detail Requirement
For such < [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED [CONFIDENTIAL INFORMATION
portion of SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] HAS BEEN OMITTED AND FURNISHED
shortfall % of Detail Requirement SEPARATELY TO THE SECURITIES
which is: AND EXCHANGE COMMISSION]
For purposes of this Article 6.9, "Detail Cost" for the U.S. means
$[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION], and Detail Cost for the other Major Market
Countries means $[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]. If a Party wishes to
verify the Details performed by the other Party in any Year, such Party shall
give notice to the other Party that the notifying Party wishes to verify
Details pursuant to Article 8A.7 within forty-five (45) days after receipt of
the other Party's last Detailing Report set forth in Article 8A.6 for such
Year.
(ii) With respect to any Year in which only one of the Parties was
a Shortfall Party, the Shortfall Party shall, within sixty (60) days
after the end of such Year (or within thirty (30) days after completion
of any verification(s) of Details pursuant to Article 8A.7 conducted
pursuant to Article 6.9(i) for such Year, if such verification(s) have
not been completed within thirty (30) days after the end of such Year),
pay the Detail Shortfall Payment Amount to the other Party.
(iii) With respect to any Year in which both Parties are Shortfall
Parties, the Party having performed the highest percentage of its Detail
Requirement in such Year (the "Highest Performing Party") shall be deemed
not to be a Shortfall Party and the percentage of such Party's Detail
Requirement performed by such Party shall be deemed to equal one hundred
percent
38
(100%) of that Party's Detail Requirement in such Year. The
other Party shall continue to be required to pay a Detail Shortfall
Payment Amount in accordance with Article 6.9(ii); provided, however,
such Detail Shortfall Payment Amount to be paid by such other Party shall
be reduced by (a) multiplying such other Party's Detail Requirement for
such Year by the percentage of the Highest Performing Party's Detail
Requirement actually performed by the Highest Performing Party during
such Year, and (b) recalculating such other Party's Detail Shortfall
Payment Amount using the reduced Detail Requirement for such other Party
calculated in accordance with the immediately preceding clause (a).
(iv) In the event that either Party fails to perform at least
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) of its aggregate Detail Requirement (such
Party, the "Detail Breaching Party") in any Co-Promotion Country for any
two (2) consecutive Years during the Term in such Country (a "Detail
Shortfall Period"), then:
(a) If Pfizer is the Detail Breaching Party, Organon shall
have the right, in addition to the remedies provided for in Article
6.9(ii) and 6.9(iii) above, exercisable upon notice to Pfizer given
within sixty (60) days after the end of such Detail Shortfall
Period (or within thirty (30) days after completion of any
verification of Pfizer's Details pursuant to Article 8A.7 conducted
at Organon's request pursuant to Article 6.9(i) for such Detail
Shortfall Period, if such verification has not been completed
within thirty (30) days after the end of such Detail Shortfall
Period), such notice to be effective sixty (60) days after the date
of such notice to Pfizer (or thirty (30) days after completion of
any verification of Pfizer's Details for such Detail Shortfall
Period requested by Organon, if later), to terminate Pfizer's
rights under this Agreement with respect to the Co-Promotion
Countries in which such Detail Shortfall has occurred. For
purposes of this Agreement, such termination shall be treated as a
termination pursuant to Article 13.3; and
(b) If Organon is the Detail Breaching Party, Pfizer shall
have the right, in addition to the remedies provided for in Article
6.9(ii) and 6.9(iii) above, exercisable upon notice to Organon
given within sixty (60) days after the end of such Detail Shortfall
Period (or within thirty (30) days after completion of any
verification of Organon's Details pursuant to Article 8A.7
conducted at Pfizer's request pursuant to Article 6.9(i) for such
Detail Shortfall Period, if such verification has not been
completed within thirty (30) days after the end of such Detail
Shortfall Period), such notice to be effective sixty (60) days
after the date of such notice to Organon (or thirty (30) days after
completion of any verification of Organon's Details for such Detail
Shortfall Period requested by Pfizer, if later), to convert the Co-
Promotion Country(ies) in which such Detail Shortfall has occurred
from a Co-Promotion Country to a Pfizer Exclusive Country.
(v) The Parties understand and agree that the Detail Shortfall
Payment Amount shall be paid as liquidated damages and not as a penalty
and that such sum represents a pre-estimate of the loss the Parties
believe would be suffered as a result of Detail shortfalls. In the event
of any Detail shortfall under Article 6.9, the remedies and compensation
as provided herein shall govern, and neither Party shall have any further
claim for breach of this Agreement on account of such Detail shortfall.
..
6.10 Non-Compete
(i) Neither Party (nor their respective Affiliates) shall, from
the Effective Date, on a Country-by-Country basis, until the earlier of
(a) the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] anniversary of the
first receipt of a Regulatory Approval for the Product in each Country in
the Territory, and (b) the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
39
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
anniversary of the first receipt of a Regulatory Approval for the Product
in the US Territory, (the "Noncompete Term"), market or sell any
Competing Product in such Country without the prior written consent of
the other Party.
(ii) Notwithstanding the foregoing, it is understood and agreed
that the non-compete restriction set forth in Article 6.10(i) does not
prohibit either Party or their Affiliates from marketing or selling a
Competing Product (a "De minimis Product") where such Party has
(a) acquired a business from a Third Party as part of a larger
transaction where the business has a Competing Product, or (b) entered
into a merger or other business combination with a Third Party, where the
Third Party has a Competing Product, in each of (a) and (b) above, only
if the sales of the Competing Product represent less than [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]% of the aggregate sales revenue of the entire
business that is the subject of such larger transaction or of the Third
Party (based on the most recently-available twelve (12) months of sales
of such Third Party as of the date of the announcement of such
transaction), and provided further that sales in such twelve (12) month
period of the Competing Product, as the sales of such Competing Product
are reported by IMS, do not exceed USD $[CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION].
(iii) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
.
ARTICLE 7
REGULATORY MATTERS
7.1. Regulatory Matters in Co-Marketing Countries. The Parties shall
cause the development of the Product in the Co-Marketing Countries to be
conducted in a manner allowing Pfizer and Organon to each secure Regulatory
Approvals for the Product issued contemporaneously and under the same terms and
conditions, including without limitation maintaining bio-equivalence of the
Parties' respective Products.
7.2. Regulatory Matters in the Co-Promotion Countries. This Article 7.2
shall apply to regulatory matters relating to the Product in the Co-Promotion
Countries.
(i) All NDAs and other Applications for Regulatory Approvals
within the Co-Promotion Countries relating to the Product shall be the
property of Organon and held in the name of Organon or its designated
Affiliates. Organon's designated representative shall serve as the
designated regulatory official for Product in the Co-Promotion Countries
for purposes of receiving communications from Regulatory Authorities.
Notwithstanding the foregoing, each Party will have the exclusive right
to and will be responsible for interacting with Regulatory Authorities on
matters concerning each Party's manufacturing site(s) that are involved
in the manufacture of the Intermediate, Compound or the Product pursuant
to the Alliance Agreements. In the event that applicable Law requires
that Organon respond to a Regulatory Authority in the Territory on behalf
of Pfizer, then Organon may do so provided, however, that Pfizer and
Organon mutually agree on Organon's response to such Regulatory
Authority.
(ii) Organon will provide Pfizer with copies, which copies may be
in draft form, of all substantive submissions (subject to the last
sentence of this Article 7.2(ii)) to Regulatory Authorities through the
CDRC. Organon will provide Pfizer with such copies at least twenty (20)
Business Days prior to planned submission to the FDA or other Regulatory
Authority by Organon,
40
whereupon Pfizer shall provide comments to Organon regarding such
submission at least ten (10) days prior to such planned submission, and,
subject to the determination of the CDRC, Organon shall incorporate the
comments given by Pfizer prior to making such submission. With respect to
any NDA, supplemental NDA, or other Application for Regulatory Approval,
the CDRC (and, with respect to the Chemistry, Manufacturing and Controls
("CMC") section of the NDA, and comparable sections in other Applications
for Regulatory Approval in the Co- Promotion Countries, the MSC) will
agree upon a separate review schedule in order to take into account the
volume and scope of such submissions.
(iii) Organon shall provide notice to Pfizer within two (2)
Business Days of: (a) discovery by Organon of any event that triggers an
FDA (or other Regulatory Authority) filing requirement promptly after the
discovery of such an event; and (b) any FDA requirements which FDA may
impose with respect to the Regulatory Approval, (including without
limitation, additional clinical studies) and of all FDA (or other
Regulatory Authority) inquiries requiring a response. Organon shall
promptly provide copies of any correspondence, and copies of all FDA (or
other Regulatory Authority) contact reports produced by Organon, or other
submission relating to this Article 7.2(iii) to the Parties'
representatives on the regulatory working group of the CDRC, and such
representatives shall discuss in good faith, and on a timely basis
determine, the most effective and expeditious means of responding to such
FDA (or other Regulatory Authority) filing requirement.
(iv) In connection with Articles 7.2(i), (ii) and (iii) above,
Organon shall provide Pfizer with notice of all meetings, conferences,
and discussions (including without limitation, advisory committee
meetings and any other meeting of experts convened by FDA or other
Regulatory Authorities concerning any topic relevant to the Product)
scheduled with FDA or such other Regulatory Authority concerning any
pending NDA, Application for Regulatory Approval, or other regulatory
matters relating to the Product within two (2) Business Days after
Organon receives notice of the scheduling of such meeting, conference, or
discussion. Pfizer shall be entitled to have appropriate representation
present at all such meetings as determined by the CDRC. Organon and
Pfizer, through the CDRC, shall agree in advance on the scheduling of
such meetings and on the objectives to be accomplished at such meetings,
conferences, and discussions and the agenda and strategy for the
meetings, conferences, and discussions with FDA or other Regulatory
Authority.
7.3. Regulatory Matters in the Pfizer Exclusive Countries. This Article
7.3 shall apply to clinical and regulatory matters relating to Product in the
Pfizer Exclusive Countries.
(i) After the Effective Date, Pfizer will assume sole ownership,
control of and responsibility for all regulatory filings in the Pfizer
Exclusive Countries, and Organon shall cooperate with Pfizer in
connection with such filings as reasonably requested by Pfizer and at
Pfizer's sole cost and expense. Organon shall be responsible for
providing Pfizer with Product samples for use in connection with
regulatory filings relating to Product in the Pfizer Exclusive Countries
at Pfizer's sole cost and expense.
(ii) All Regulatory Approvals in the Pfizer Exclusive Countries
relating to the Product shall be deemed the property of Pfizer and held
in Pfizer's or its Affiliate's name. Upon termination of Pfizer's rights
in any Pfizer Exclusive Country prior to the end of the applicable Term,
Pfizer will promptly transfer to Organon or its designee, all Regulatory
Approvals, Price Approvals and other approvals relating to the Product in
the applicable Country as may be required by Organon or such party to
market the Product in such Country. The transfer fees and any fees
assessed by any Governmental Authorities for such transfer will be borne
by Organon.
(iii) Pfizer will provide Organon with (a) notice of any
revocations of Product Regulatory Approvals and any Product recalls in
the Pfizer Exclusive Countries; and
41
(b) responses to reasonable inquiries by Organon regarding the regulatory
approval and commercialization processes for the Product in the Pfizer
Exclusive Countries.
7.4. Inquiries, Adverse Events, etc.
(i) Organon and Pfizer shall be responsible for the surveillance,
receipt, evaluation, and reporting of Product complaints and reports of
adverse drug experiences, for the Product in, as to Organon, the Co-
Promotion Countries and Organon Exclusive Countries, and, as to Pfizer,
in the Pfizer Exclusive Countries, in accordance with Article 7.5 below.
In addition, each of Organon and Pfizer will be responsible for such
matters with respect to any Regulatory Approvals that they own in any Co-
Marketing Countries.
(ii) Organon shall be responsible for promptly investigating
Product complaints and reports of adverse drug experiences and other
required safety information (e.g., PSURs and annual safety reports)
associated with the use of any Product in the Co-Promotion Countries and
Organon Exclusive Countries. As to each Product, Organon shall submit
reports of all adverse drug experiences associated with the use of the
Product and other required safety information to the FDA or other
Regulatory Authority and, where appropriate, clinical investigators, in
accordance with applicable Law. Organon shall submit a copy of each such
report to Pfizer contemporaneously with its submission of the report to
FDA or the applicable Regulatory Authority, or in advance of such
submission if, and as, reasonably necessary to permit Pfizer to comply
with any Law applicable to it, if practicable.
(iii) Pfizer shall promptly investigate Product complaints and
reports of adverse drug experiences and other required safety information
(e.g., PSURs and annual safety reports) associated with the use of any
Product in the Pfizer Exclusive Countries. As to the Product, Pfizer
shall submit reports of all adverse drug experiences associated with the
use of the Product and other required safety information to the
applicable Governmental Authorities and, where appropriate, clinical
investigators in the Pfizer Exclusive Countries in accordance with
applicable Law. Pfizer shall submit a copy of each such report to
Organon for inclusion in the global database contemporaneously with its
submission of the report to the applicable Regulatory Authority in the
Pfizer Exclusive Countries, or in advance of such submission if, and as,
reasonably necessary to permit Organon to comply with any Law applicable
to it, if practicable.
(iv) Organon shall have the sole responsibility for implementing
decisions of the CDRC and revising the Product labeling for the Co-
Promotion Countries, the Organon Exclusive Countries, and for Regulatory
Approvals owned by Organon in Co-Promotion Countries accordingly, and
Pfizer shall have sole responsibility for revising the Product labeling
for the Pfizer Exclusive Countries and for Regulatory Approvals owned by
Pfizer in Co-Marketing Countries, subject to review by the CDRC, as
needed, to adequately warn of the potential risks identified by reports
of adverse drug experiences associated with the use of the Product and
from Product complaints.
(v) Each Party shall notify the other Party within two (2)
Business Days after it receives information about the initiation of any
investigation, review or inquiry by FDA or other Governmental Authority
concerning the distribution, promotion or sale of the Product, not
otherwise described above.
7.5. Product Surveillance. The Parties will cooperate in the
collection, review, assessment, tracking and filing of information related to
adverse events associated with the Product in accordance with 21 CFR 312.32,
314.80, or comparable Laws in other Countries. As soon as reasonably
practicable after the Effective Date, and subject to the oversight of the CDRC,
the pharmacovigilance departments of both Parties shall meet and determine the
approach to be taken for the collection, review, assessment, tracking and
filing of information related to adverse events associated with the Product,
which shall be documented in a separate drug safety exchange agreement between
the Parties. In the event of any
42
conflict between the terms of Articles 7.4 and 7.5 of this Agreement and the
terms of such separate drug safety agreement as those terms relate to adverse
events relating to the Product, the terms of such separate drug safety
agreement shall control. Until such time as the Parties have agreed upon such
adverse event exchange procedures, without limiting the terms of Article 7.4
above, each Party will notify the other Party of fatal/life-threatening serious
clinical trial adverse event involving the Product within 96 hours following
receipt by the Party. All other serious clinical trial adverse event reports
involving the Product will be exchanged within fifteen (15) calendar days of
receipt by the Party. Organon shall be responsible for maintaining a global
safety database for the Product consistent with pharmaceutical industry
practice and all applicable Laws.
7.6. Data Sharing. Each Party shall provide to the other Party, on a
timely basis copies of all pre-clinical and clinical data and all regulatory
filings, applications and registrations in the Territory concerning the
Product. Such data, filings and other information received from a Party shall
be treated by the other Party as Confidential Information of the disclosing
Party. Each Party agrees to identify non-material, routine, regulatory filings
which such Party will not have to provide, pursuant to this Article 7.6.
7.7. Product Recalls. Any decision to initiate a recall or withdrawal of
Product in the Co-Promotion Countries shall be made by the Steering Committee.
Before the Steering Committee initiates a recall or withdrawal, and upon the
request for a recall or withdrawal by either Party, the Parties shall promptly
and in good faith discuss the reasons therefor. Under no circumstances shall
either Party unreasonably object to a recall or withdrawal requested by the
other Party, and neither Party shall have any right to object to a recall or
withdrawal requested by the other Party for failure of a Product to meet the
Specifications, for material safety concerns or for noncompliance with the Act,
and such recall shall be initiated by the Party that requested the recall (the
"Requesting Party"). In the event of any recall or withdrawal, the Requesting
Party shall implement any necessary action, with assistance from the other
Party as reasonably requested. In addition, and except as set forth in Article
12, the Parties shall bear equally all costs and expenses of any such recall or
withdrawal, including, without limitation, documented and direct Out-of-Pocket
Costs incurred in relation thereto, expenses and other costs or obligations to
Third Parties, the cost and expense of notifying customers and the costs and
expenses associated with shipment of the recalled Product and the cost and
expense of destroying the Product removed from the market, if necessary.
ARTICLE 8A
REPORTS
8A.1 Marketing Cost Reports. Within 30-days after the end of each
Calendar Quarter or Pfizer Quarter as applicable, each Party shall provide the
other Party and the GCC with a detailed, activity-based statement of Marketing
Costs on a Country-by-Country basis, if any, incurred by such Party during such
Calendar Quarter or Pfizer Quarter, as applicable, for each Co-Promotion
Country, as well as the details of any adjustments to be made to the amounts
submitted for the previous Calendar Quarter or Pfizer Quarter, as applicable
(such report the "Quarterly Marketing Cost Report" which shall be in a format
to be agreed-upon by the GCC promptly after the Effective Date).
8A.2 Development Cost Reports. Within 30-days after the end of each
Calendar Quarter or Pfizer Quarter, as applicable, during the Term, each Party
shall provide the other Party and the CDRC with a detailed, activity-based
statement of Development Costs on a Country-by-Country basis, if any, incurred
during such Calendar Quarter or Pfizer Quarter, as applicable, for each Co-
Promotion Country, as well as the details of any adjustments to be made to the
amounts submitted for the previous Calendar
43
Quarter or Pfizer Quarter, as applicable (such report the "Quarterly
Development Cost Report" which shall be in a format to be agreed-upon by the
CDRC promptly after the Effective Date).
8A.3 Distribution Cost Reports. Within 30-days after the end of each
Calendar Quarter during the Term, Organon shall provide Pfizer with a detailed
statement of Distribution Costs on a Country-by-Country basis, if any, incurred
during such Calendar Quarter for each Co-Promotion Country (such report the
"Quarterly Distribution Cost Report" which shall be in a format to be agreed-
upon by the MSC promptly after the Effective Date).
8A.4 Net Sales Reports. Each Party shall itself report (or shall cause
its Affiliates to report on its behalf) to the other Party or its Affiliates on
a Country-by-Country basis with respect to each Co-Promotion Country and
Organon Exclusive Country (in the case of Organon) or each Pfizer Exclusive
Country (in the case of Pfizer) in the applicable local currency within thirty
(30) days following the end of each Calendar Quarter or Pfizer Quarter, as
applicable, the Net Sales for each calendar month of such Calendar Quarter or
Pfizer Quarter, as applicable, together with information in sufficient detail
(including itemization of the gross sales and any deductions thereto that each
Party is entitled to take pursuant to Article 1.85) in order to allow the other
Party to calculate Net Sales.
8A.5 Reconciliation. Within 45-days after the end of each Calendar
Quarter, Organon shall submit to Pfizer a written report (the "Reconciliation
Report") setting forth in a format to be agreed-upon by the Parties promptly
after the Effective Date, the calculations of any amounts owed by Organon to
Pfizer or by Pfizer to Organon, as the case may be, in order to ensure the
appropriate sharing of Marketing Costs, and Development Costs, in accordance
with this Agreement.
8A.6 Detail Reports. Each of Organon and Pfizer shall maintain an
adequate internal system (and necessary records) for the reporting of Details
by its Sales Representatives. Each Party shall provide to the appropriate CCC
in each Co-Promotion Country a report within forty-five (45) days following the
end of each month setting forth the number of Details (provided that neither
Party shall be required to identify any of its other pharmaceutical products in
such report) made by such Party's Sales Representatives. Each Party's report
of Details shall also include a calculation of such Party's Details for such
Year ended for the purposes of reporting compliance with Article 6.9.
8A.7 Detail Verification. As soon as is practical after the Effective
Date, Pfizer and Organon shall meet to discuss their respective current methods
of accounting for Details, in order to establish (in a manner mutually
agreeable to each Party) a mutually beneficial, objective and efficient method
of recording, maintaining and verifying the number of Details reported by each
Party. Both Parties shall keep accurate and complete records of each Detail
carried out by its Sales Representatives under this Agreement consistent with
the procedures described in the relevant Country Marketing Plan and mutually
agreed to by the Parties. If within one-hundred and twenty (120) days of
receipt of the Detail report set forth in Article 8A.6 delivered following the
end of each respective Year, a Party wishes to verify whether the number of
Details of the Party providing such report (the "Detail Reporting Party") are
consistent with the requirements of this Agreement, the Detail Reporting Party
shall make its records available for inspection and review by an independent
accountant that is recognized as having expertise in the pharmaceutical
industry, selected by the Party wishing to verify the other Party's number of
Details (as to which firm the other Party has no reasonable objection) for the
purpose of so verifying the number of Details performed by such Party. All
costs and expenses incurred in connection with any such verification shall be
paid by the Party requesting such verification, provided, that the Detail
Reporting Party shall pay
44
such costs and expenses if the number of Details determined by the independent
accountant is at least ten percent (10%) lower than the number of Details
reported by the Detail Reporting Party under Article 8A.6 for such Year. Such
independent accountant shall not reveal to the Party seeking verification the
details of its review, except for such information as is required to be
disclosed under this Agreement or to determine compliance with this Agreement.
Such independent accountant must agree to be subject to confidentiality
obligations consistent with the provisions of Article 14. The independent
accountant shall deliver its report to each Party within thirty (30) days of
receipt of all relevant materials from the Detail Reporting Party. The report
of the independent accountant shall be final and binding. If upon verification
by the independent accountant, it is determined at the end of the applicable
Year that the Detail Reporting Party is a Shortfall Party then within thirty
(30) days of receipt of such audit report, the Shortfall Party shall make
payment to the other Party of all amounts due under Article 6.9.
ARTICLE 8
MILESTONES
8.1 Initial Fee. Pfizer shall pay to Organon an initial fee of one
hundred million US Dollars (USD $100,000,000) ("Initial Fee"), payable within
ten (10) days after the Effective Date. Also within ten (10) days after the
Effective Date, Pfizer will pay to Organon interest on the Initial Fee from the
date that is five (5) Business Days after signing of this Agreement to the date
of payment, at the ninety (90) day U.S. dollar LIBOR rate as published in The
Financial Times effective for the date that is five (5) Business Days after
signing of this Agreement, and computed on an actual/360 day basis.
8.2 Event Milestone Payments. Subject to the terms and conditions of this
Agreement, Pfizer shall pay Organon a milestone payment (each, an "Event
Milestone Payment") in respect of each of the following events (each, an "Event
Milestone") in the particular amounts specified below no later than thirty (30)
days after the occurrence of the corresponding Event Milestone:
(i) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollars (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon acceptance of filing of an
NDA with the FDA for the Product for schizophrenia;
(ii) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollars (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon acceptance of filing of an
NDA with the FDA for the Product for bipolar disorder;
(iii) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollars (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon receipt of Regulatory
Approval from the FDA for the Product for schizophrenia;
(iv) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollars (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon receipt of Regulatory
Approval from the FDA for the Product for bipolar disorder;
45
(v) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollars (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon acceptance of filing of an
Application for Regulatory Approval in the first Key EU Country or
application validation of an Application for Regulatory Approval filed
centrally with EMEA, in either case for the Product for schizophrenia;
(vi) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollars (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon acceptance of filing of an
Application for Regulatory Approval in the first Key EU Country or
application validation of an Application for Regulatory Approval filed
centrally with EMEA, in either case for the Product for bipolar disorder;
(vii) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollar (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon the Launch of the Product
for schizophrenia in the first Key EU Country;
(viii)[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollars (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon the Launch of the Product
for bipolar disorder in the first Key EU Country; and
(ix) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] US Dollars (USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]) upon Launch of the Product for
schizophrenia in Japan.
8.3 Performance Milestones.
(i) Subject to the terms and conditions of this Agreement, Pfizer
shall pay to Organon the following payments (each, a "Performance
Milestone Payment") in respect of each of the following milestone events
(each, a "Performance Milestone"):
Milestone Event Payment Amount
(a) In the event Net Sales in the Territory equal or exceed $[CONFIDENTIAL $[CONFIDENTIAL INFORMATION
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES HAS BEEN OMITTED AND
AND EXCHANGE COMMISSION] in any Year. FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE
COMMISSION]
46
(b) In the event Net Sales in the Territory equal or exceed $[CONFIDENTIAL $[CONFIDENTIAL INFORMATION
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES HAS BEEN OMITTED AND
AND EXCHANGE COMMISSION] in any Year. FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE
COMMISSION]
The Parties understand and agree that each of the Event Milestone
Payments referenced under Article 8.2, and each of the Performance
Milestone Payments referenced in this Article 8.3(i) shall be payable
only once, upon the first occurrence of the applicable Event Milestone or
Performance Milestone, and are subject to the terms and conditions set
forth in Article 8.2 and Article 8.3(ii), as applicable.
(i) Performance Milestone Payments shall be due and owing, on or
before the date sixty (60) days after the end of the applicable Year.
8.4 Fee Conditions. Each and every payment made under this Article 8
shall be independent, cumulative, non-refundable, and shall not be considered
an advance or credit on any royalties or other obligation received or owed. In
addition, except as provided under this Agreement, neither Party shall be
entitled to reimbursement of any of its Development Costs or Marketing Costs.
8.5 Notice of Termination.
(i) In the event that a Party has given the other Party notice of
termination of this Agreement in its entirety, no further Event Milestone
Payments or Performance Milestone Payments shall become due during such
notice period, and Net Sales of the Product during such notice period
shall not be counted in determining whether a Performance Milestone has
been attained.
(ii) In the event that a Party has given the other Party notice of
termination of this Agreement with respect to a Country or Countries, no
further Event Milestone Payments pertaining to such Country or Countries
shall become due, and Net Sales of the Product in such Country or
Countries during such notice period shall not be counted in determining
whether a Performance Milestone has been attained.
47
ARTICLE 9
REVENUE SHARING AND ROYALTIES
9.1 Organon Co-Promotion Payments to Pfizer. During the Term and subject
to the terms and conditions hereof, Organon shall pay to Pfizer for each Co-
Promotion Country, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]%) of Net Sales of the Product in such Co-Promotion Country
(the "Co-Promotion Payment"). Payments by Organon to Pfizer of such amounts
shall be made in accordance with the procedures set forth below in this Article
9.
9.2 Pfizer Royalties to Organon. Subject to Articles 9.2(i) and (ii)
below, and provided that Organon is not in Material Default of its obligations
under this Agreement, Pfizer shall pay to Organon a royalty of [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of such Net
Sales in each Pfizer Exclusive Country.
(i) Royalty Adjustments for Generic Products. If, during a given
Pfizer Quarter, there is Generic Competition in any Pfizer Exclusive
Country in the Territory, then, for each such Country in which there is
Generic Competition, the royalties payable to Organon for the Net Sales
of the Product in such Country during such Pfizer Quarter will be reduced
by one percent for each percentage of market share (as measured by unit
sales) of Generic Products for such Pfizer Quarter, in such Country,
subject to a maximum royalty reduction of [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%).
(ii) Revenue Share Term. Royalty payments under Article 9.2 shall
continue on a Country-by-Country basis for the applicable Term; provided
that during portions of any Term in which no Valid Claim exists with
respect to a Product in a Pfizer Exclusive Country, the royalty set forth
in Article 9.2 (as it may be reduced pursuant to subsection (i) above)
shall be reduced by [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]%).
(iii) Limitation on Royalty Adjustment. Notwithstanding
subsections (i) and (ii) above, in no event shall the royalty payable
pursuant to this Article 9.2 be less than [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%).
9.2A Organon Royalties to Pfizer. Subject to Articles 9.2A(i) and (ii)
below, and provided that Pfizer is not in Material Default of its obligations
under this Agreement, Organon shall pay to Pfizer a royalty of [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) of such Net
Sales in each Organon Exclusive Country.
48
(i) Royalty Adjustments for Generic Products. If, during a given
Calendar Quarter, there is Generic Competition in any Organon Exclusive
Country in the Territory, then, for each such Country in which there is
Generic Competition, the royalties payable to Pfizer for the Net Sales of
the Product in such Country during such Calendar Quarter will be reduced
by one percent for each percentage of market share (as measured by unit
sales) of Generic Products for such Calendar Quarter, in such Country,
subject to a maximum royalty reduction of [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%).
(ii) Revenue Share Term. Royalty payments under Article 9.2A
shall continue on a Country-by-Country basis for the applicable Term,
subject to subsection (iii) below; provided that during portions of any
Term in which no Valid Claim exists with respect to a Product in an
Organon Exclusive Country, the royalty set forth in Article 9.2A (as it
may be reduced pursuant to subsection (i) above) shall be reduced by
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%).
(iii) Limitation on Royalty Adjustment. Notwithstanding
subsections (i) and (ii) above, in no event shall the royalty payable
pursuant to this Article 9.2A be less than [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%).
(iv) Limitation on Royalties in Organon Exclusive Countries.
Pfizer's right to receive royalty payments under Article 9.2A in a
particular Country above shall terminate when the aggregate of all
royalty payments made by Organon to Pfizer pursuant to this Article 9.2A
equals the Exclusive Country Costs accrued or paid by Pfizer for such
Country together with interest which shall accrue thereon at the rate of
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) per annum, compounded quarterly, from the date
such costs were incurred until the effective date of the conversion of
such Country to an Organon Exclusive Country.
9.3 Payments.
(i) Organon shall make payments arising under Article 9.1 to
Pfizer in the currency or currencies as the Parties mutually agree (and,
if the Parties are unable to agree, in the applicable local currency) for
each Co-Promotion Country for each Calendar Quarter, within sixty (60)
days following the end of the applicable Calendar Quarter, in accordance
with the terms of Article 9.5.
(ii) Pfizer shall make payments to Organon arising under
Article 9.2 for each Pfizer Quarter for each Pfizer Exclusive Country in
Euros sixty (60) days following the end of the applicable Pfizer Quarter,
and Organon shall make payments to Pfizer arising under Article 9.2A for
each Calendar Quarter for each Organon Exclusive Country in US dollars
sixty (60) days following the end of the applicable Calendar Quarter.
49
(iii) Any Development Costs payment due from one Party to the other
Party pursuant to the Reconciliation Report shall be paid in U.S dollars
within sixty (60) days following the end of the applicable Calendar
Quarter.
(iv) Any Distribution Cost payment due from Pfizer to Organon
pursuant to the Quarterly Distribution Cost Report shall be paid in U.S
dollars within sixty (60) days following the end of the applicable
Calendar Quarter.
(v) Subject to the last sentence of this Article 9.3(v) Marketing
Costs due from one Party (or its local Affiliate) to the other Party (or
its local Affiliate) pursuant to the Reconciliation Report shall be paid
at a local level in the Country in which the Marketing Costs were
incurred, in the applicable functional currency of the local Affiliate of
the Party required to make such payment, within sixty (60) days following
the end of the applicable Calendar Quarter. Global Marketing Costs due
from one Party to the other Party shall be paid from one Party to the
other Party in U.S. dollars within sixty (60) days following the end of
the applicable Calendar Quarter.
9.4 Currency Conversion.
(i) Royalties. For the purposes of determining the amount of
royalties due to Organon or to Pfizer pursuant to Article 9.3(ii) for the
relevant Pfizer Quarter or Calendar Quarter, as applicable, the amount of
Net Sales in any foreign currency shall be computed by (a) converting
such amount for the relevant Pfizer Quarter or Calendar Quarter, as
applicable, into Euros or US Dollars, as applicable, at the spot rate of
exchange for purchasing Euros or US Dollars, with such currency as
published in the Financial Times five (5) Business Days before the date
payment is made.
(ii) Performance Milestones. For the purposes of determining
whether the applicable Performance Milestones have been met, the amount
of Net Sales in any foreign currency will be computed by converting such
amount for the relevant Year into U.S. dollars at the Average Exchange
Rate for the Year. The "Average Exchange Rate for the Year" means, for
each Country in each Year, the weighted average calculated by dividing
(a) the sum of the amounts calculated for each month of that Year as the
product of 1) the average of the spot U.S. dollar exchange rates for such
Country's local currency in effect each day of such calendar month as
published by the Board of Governors of the Federal Reserve System in
Statistical Release G.5 (▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇▇/▇▇/) and
2) Net Sales of the Product in local currency in such month by (b) Net
Sales of the Product in local currency in such Year.
(iii) Co-Promotion Payments. For the purpose of determining the
amount of any Co-Promotion payment due from Organon to Pfizer that is to
be paid, by mutual agreement of the Parties, in some currency other than
the local currency of the applicable Co-Promotion Country, the amount of
the Co-Promotion Payment due shall first be computed in the relevant
local currency and shall then be converted into the currency of payment
at the spot rate of exchange for purchasing such payment currency with
such local currency as published in the Financial Times five (5) Business
Days before the date payment is made.
(iv) Development Costs. For the purpose of determining the amount
of Development Costs to be shared by the Parties, Development Costs
incurred in any currency other than U.S. dollars shall be converted into
U.S. dollars at the spot rate of exchange for purchasing U.S. dollars
with such currency as published in the Financial Times two (2) Business
Days before the applicable Reconciliation Report is issued
50
9.5 Method of Payments. All payments under this Agreement shall be made
on or before the due date by electronic transfer in immediately available funds
to the respective account designated in writing by each Party at least two (2)
Business Days before the payment is due. Pfizer shall notify Organon's
Treasurer, or such other Organon representative as Organon's Treasurer shall
designate in writing, by facsimile transmission as to the date and amount of
any payment that Pfizer shall make at least two (2) Business Days prior to such
transfer. Organon shall notify Pfizer's Treasurer, or such other Pfizer
representative as Pfizer's Treasurer shall designate in writing, by facsimile
transmission as to the date and amount of any payment that Organon shall make
at least two (2) Business Days prior to such transfer. All payments under this
Agreement shall bear interest from the date due until paid at a rate equal to
the prime rate of the Bank of America as announced on the date such payment was
due plus three percent (3%). In addition, the Party liable for late payment
shall reimburse the other Party for all reasonable costs and expenses,
including without limitation reasonable attorneys' fees and legal expenses,
incurred in the collection of late payments.
9.6 Records. Each of Pfizer and Organon (the "Payor") shall, and shall
cause its Affiliates and sublicensees to, keep full and accurate books and
records setting forth Development Costs, Cost of Goods, Marketing Costs, gross
sales, Net Sales, and any amounts payable to the other Party (the "Payee").
The Payor shall permit the Payee, at the Payee's sole expense, by an
internationally recognized independent accountant selected by the Payee (as to
which the Payor has no reasonable objection), to examine such books and records
upon at least thirty (30) days' advance written notice during normal business
hours and in a manner that does not materially interfere with the Payor's
business, but not later than three (3) years following the rendering of any
such reports, accountings and payments. The foregoing right of review may be
exercised only once with respect to each such periodic report and payment.
Such independent accountant may be required by the Payor to enter into a
reasonably acceptable confidentiality agreement, and in no event shall such
independent accountant reveal to the Payee the details of its review except
insofar as is necessary to verify the accuracy of reports and payments made or
due hereunder. The results of any such audit shall be delivered in writing to
each Party. Any underpayment determined by such audit shall promptly be paid
or refunded by the Payor. If the Payor has underpaid amounts due under this
Agreement by more than five percent (5%) over any reporting period, the Payor
shall also reimburse the Payee for the cost of such audit (with the cost of the
audit to be paid by the Payee in all other cases), plus interest at the
interest rate set forth in Article 9.5, from the date of any such underpayment.
9.7 Withholding Tax.
(i) Any taxes required to be paid or withheld by either Party or
its Affiliates for the account of the other Party on amounts payable
under this Agreement shall be deducted from the amounts payable at the
rates specified by applicable Law. In addition, the paying Party shall
provide promptly to the other Party receipts from the government or
taxing authority-evidencing payment of such taxes.
(ii) Each Party shall be indemnified against and held harmless by
the other Party (or its assignee) from any incremental tax liability
(including but not limited to VAT or withholding taxes) imposed on such
Party as the result of an assignment by the other Party of its rights or
obligations under this Agreement pursuant to Article 16.5. In the event
of any such assignment, (a) the assignee shall gross up any payments it
makes to the extent necessary so that the net payment received by the
non-assigning Party after any such incremental tax liability equals the
amount the non-assigning Party would have received if no assignments had
made by the other Party or its Affiliates under this Agreement; and
(b) for the avoidance of doubt, the non-assigning Party shall not be
required to pay any gross up or other amounts to the assigning Party on
account of any taxes (including but not limited to VAT or withholding
taxes) that would not have been imposed but for such assignment. The
Parties further agree that if the non-assigning Party
51
uses a tax credit to reduce its taxes within five (5) years and as a
result of any incremental tax liability related to such assignment and
paid by the assigning party pursuant to the preceding sentence, the
non-assigning Party shall reimburse the assigning Party the amount of
such realized tax credit.
(iii) For the avoidance of doubt, the Initial Fee, Event Milestone
Payments and Performance Milestones Payments made by Pfizer to Organon
under this Agreement shall be exclusive of VAT. The Parties agree that
at the date of this Agreement all payments due hereunder are outside the
scope of VAT. Organon agrees to inform Pfizer if Organon concludes that
there is a change in VAT law or practice that requires it to account for
VAT on any payments due pursuant to this Agreement at any time after the
execution date. In the event of any such change in VAT law or practice,
Organon shall pay VAT on behalf of Pfizer and Pfizer shall prior thereto
assign to Organon Pfizer's refund claim in respect thereof, and Pfizer
shall co-operate with Organon in securing a refund to Organon of the full
amount of such VAT payment.
9.8 Third Party License Fees. Organon shall be responsible for all Third
Party License Fees relating to (i) the Current Product and (ii) the
manufacturing process identified in Schedule 9.8, provided however that Third
Party License Fees payable to [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] as set forth on
Schedule 1.133 hereto shall be shared [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]%) by Pfizer and [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) by Organon.
Unless otherwise agreed, the Parties shall share [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) by Pfizer and
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%)
by Organon all other Third Party License Fees relating to (x) all Products
other than the Current Product, and (y) the Current Product as a result of a
change to the manufacturing process identified in Schedule 9.8. With respect to
Pfizer's responsibility for [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]%) of the royalties payable by Organon to
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION], Organon shall send Pfizer a Calendar
Quarterly invoice that shall be based on Organon's Calendar Quarterly report of
Net Sales pursuant to Article 8A.4 and shall reflect the amounts due from
Pfizer under this Article 9.8. Pfizer shall, within fifteen (15) days after
its receipt of such invoice, make payment under such invoice by electronic
transfer in immediately available funds to the account designated in writing by
Organon, which designation shall take place at least two (2) Business Days
before the payment is due.
9.9 Adjustment of Commercial Terms. It is agreed by the Parties that the
Parties' Co-Promotion of a Combination Product may require a change to the
applicable financial terms of this Agreement with respect to the sharing of Net
Sales of such Combination Product Accordingly, upon the request of either
Party, the Parties shall undertake good faith negotiations to reasonably adjust
the same in accordance with the principles set forth in this Agreement.
52
ARTICLE 10
DECISION MAKING
10.1 Committees/subcommittees. In order to fulfill the objectives of this
Agreement, the Parties agree to establish a Steering Committee, Joint Operating
Committee ("JOC"), a Clinical Development/Regulatory Committee ("CDRC"), a
Global Commercialization Committee ("GCC"), a Manufacturing and Supply
Committee ("MSC"), Country Commercialization Committees, and such other
committees and subcommittees as may be established by mutual consent of Organon
and Pfizer. Each committee and subcommittee shall have two co-chairpersons,
one designated by each of Organon and Pfizer. All decisions of the committees
and subcommittees shall be by a vote of the chairpersons, each co-chairperson
having one vote, and unless otherwise stated herein, all decisions shall be by
unanimous consent of the co-chairpersons.
10.2 Meetings. The chairperson(s) of the Steering Committee, JOC, CDRC,
GCC, MSC, or any other committee or subcommittee established pursuant to
Article 10, shall call meetings when deemed by the co-chairpersons to be
appropriate, but not less often than Calendar Quarterly (except that the
Steering Committee shall meet not less often than semi-annually). The meetings
may be held in person, by telephone, or by video conference call. Each Party
shall use all reasonable efforts to cause their members on each committee and
subcommittee to attend any meeting called by the chairpersons of that committee
or subcommittee. Subject to the foregoing, a quorum will consist of at least
two (2) members appointed by each Party. The location of the meetings of each
committee or subcommittee shall alternate between sites selected by each co-
chairperson. The hosting Party of committee or subcommittee meetings shall keep
accurate minutes of its meetings, including all actions recommended or taken.
The Parties shall bear their respective expenses in attending committee or
subcommittee meetings. In addition to formal committee or subcommittee
meetings, the members of each committee or subcommittee shall communicate on an
as needed basis, as they may determine including telephone conference calls.
Additional participants may be invited by any representative to attend meetings
where appropriate (e.g., personnel from regulatory affairs or outside
consultants). Such additional participants shall not be deemed to have, or
have any rights or responsibilities of, a member of such committee or
subcommittee. The Parties shall cause their respective representatives on the
committees to use diligent efforts, acting in good faith, to resolve all
matters presented to them as expeditiously as possible.
10.3 Clinical Development/Regulatory Committee. The CDRC shall consist of
research and development, commercial, regulatory and marketing/medical managers
(as needed) from each of Organon and Pfizer, each of which will confirm to the
other its designees.
(i) The CDRC will be responsible for, among other activities
relating to the Development of the Product, the following, which
activities shall, in the first instance, before reference to the entire
CDRC, be performed by a clinical development working group:
(a) Creating the Development Plan and sending the Development
Plan to the JOC for review;
(b) Implementing the Development Plan including allocation of
responsibilities between the Parties;
(c) Proposing clinical trials (including, in coordination
with the GCC, Phase IIIb/Phase IV Product Studies to be conducted
for the Initial Indications and any New Indications);
53
(d) Overseeing and monitoring the progress of, the clinical
issues relating to Product Studies and Phase IIIb/IV Product
Studies, including specifying timelines and priorities and which
Party, or whether a Third Party, is to be responsible for such
activity, and, with respect to Product Studies, reviewing costs and
activities against the Development Plan; provided, however, that as
between the Parties, only Pfizer is expected to engage in or
contract for such activities absent subsequent agreement of the
Parties to the contrary;
(e) Assessing the therapeutic relevance of clinical trials;
(f) Providing updates on its activities to the JOC;
(g) Recommending, in conjunction with the GCC, New
Indications and new formulations or dosage forms for the Product;
and
(h) Such other matters as the Parties may assign to the
clinical development working group of the CDRC from time to time.
(ii) The CDRC will also be responsible for, among other activities
relating to regulatory activities concerning the Product, the following,
which activities shall, in the first instance, before reference to the
entire CDRC, be performed by a regulatory working group:
(a) Conducting the necessary activities to obtain and
maintain Regulatory Approvals in the Co-Promotion Countries at the
earliest practicable date;
(b) Overseeing, monitoring and coordinating all regulatory
issues with the relevant Regulatory Authorities, including, but not
limited to, communications, filings, submissions, labeling
(including development of such label), and other regulatory
actions;
(c) Facilitating the exchange and use of relevant data to
prepare and file applications for Regulatory Approvals;
(d) Providing recommendations for the filing of any NDA or
other Application for Regulatory Approval for the Product;
(e) Coordinating preparation for and attendance at Regulatory
Authority meetings;
(f) Coordinating responses to Regulatory Authority
requirements and inquiries;
(g) Recommending a regulatory strategy and plan for obtaining
Regulatory Approvals for the Products in the Territory;
(h) Facilitating the exchange of information in conjunction
with Articles 7.4 and 7.5 of this Agreement in order to ensure that
significant issues concerning adverse event information and safety
issues are addressed consistently among Regulatory Authorities in
the Territory;
(i) Providing updates on its activities to the JOC; and
(j) Such other matters as the Parties may assign to the
regulatory working group of the CDRC from time to time.
54
(iii) Neither Party shall make any change to any annual Development
Plan without the prior approval of the CDRC, and all Development Plans
and Development Costs provided therein shall be consistent with the terms
of this Agreement.
(iv) If the CDRC is unable to reach a decision on any issue within
ten (10) Business Days after presentation, Pfizer shall have the final
decision-making authority if such issue relates to the clinical and
preclinical development of the Product. With respect to any other issues
for which the CDRC is unable to reach a decision on any issue within ten
(10) Business Days after presentation, either Party may refer such issue
to the JOC for resolution.
10.4 Global Commercialization Committee.
(i) The GCC shall consist of members from each of Organon and
Pfizer, each of which shall confirm to the other its designees. The GCC
will be responsible for the following:
(a) Preparing and implementing annually the Global Marketing
Plan for the Co-Promotion Countries, including reviewing and making
recommendations for the Parties' sales, promotional and marketing
activities in the Co-Promotion Countries. To the extent feasible,
the GCC shall allocate responsibilities equally between Pfizer and
Organon. The Parties shall prepare the initial Global Marketing
Plan within 180-days of the Effective Date;
(b) Developing positioning and marketing strategies for the
Product in the Co-Promotion Countries consistent with the Global
Marketing Plan subject to local requirements, including making
recommendations to develop New Indications;
(c) Establishing long and short term forecasts for worldwide
Product sales and coordinating such forecasts with the MSC in order
to facilitate the operations of the Parties and their Affiliates
under the Production Agreements;
(d) Developing global promotional and advertising materials
for use in marketing the Product in the Co-Promotion Countries,
designing packaging and overseeing educational and professional
symposia and speaker and activity programs for the Product in the
Co-Promotion Countries;
(e) Providing technical and medical support for the sales and
marketing of the Product in the Co-Promotion Countries;
(f) Discussing the prices at which the Product will be sold
to unaffiliated Third Parties throughout the Co-Promotion Countries
and developing core materials and tools to enable each CCC to
develop strategies and documentation to gain reimbursement and
product access and listing in the Co-Promotion Countries;
(g) Coordinating with the CDRC with respect to regulatory
issues and the development of New Indications to be undertaken
pursuant to a Development Plan and proposing Phase IIIb/IV Product
Studies;
(h) Obtaining clearance of publications relating to the
Product;
(i) Developing strategies for obtaining listing on managed
care formularies in the Co-Promotion Countries;
55
(j) Facilitating, to the extent legally permissible, the
exchange of information with respect to the sales and marketing of
Product in the Pfizer Exclusive Countries, Organon Exclusive
Countries and Co-Marketing Countries; and
(k) such other matters as the Parties may mutually assign the
GCC from time to time.
(ii) All Global Marketing Plans shall be consistent with the terms
of this Agreement.
(iii) If the GCC is unable to reach a decision on any issue within
ten (10) Business Days after presentation, either Party may refer such
issue to the JOC for resolution.
10.5 Manufacturing and Supply Committee.
(i) The MSC shall consist of members from each of Organon and
Pfizer, each of which shall confirm to the other its designees.
Consistent with the Production Agreements, the MSC shall be responsible
for:
(a) Overseeing manufacturing activities underway as of the
Effective Date, including stability studies and management of
clinical supplies of the Product;
(b) Establish the adequacy of, and periodically (no less than
once per Calendar Quarter) review and monitor, all development
plans relating to manufacture of the Intermediate and the Compound;
establish the adequacy of, and periodically (no less than once per
Calendar Quarter) review and monitor, all development plans
relating to manufacture of the Intermediate and the Compound,
including the First Generation Process Plan and Second Generation
Process Plan; Overseeing the manufacturing of registration batches
of Product; reviewing the CMC section of the NDA for the Product;
reviewing and approving Specifications for purposes of the NDA and
other Applications for Regulatory Approval and for Launch;
overseeing the preparation for and execution of any pre-approval
inspections of the Product manufacturing sites; and monitoring the
manufacture of validation lots;
(c) Monitoring worldwide quality assurance efforts and
ensuring that the Intermediate, the Compound, and all Products are
manufactured in accordance with the Parties' quality standards; and
overseeing any routine or non-routine inspections by FDA and other
Regulatory Authorities and ensuring adherence to compliance
standards following Product approval;
(d) Monitoring the manufacture of the Intermediate, the
Compound and the Product;
(e) Determining methods of obtaining cost efficiency,
including by developing more efficient manufacturing processes, and
reviewing sourcing alternatives of Product components;
(f) Coordinating with the GCC and CDRC as appropriate;
(g) Evaluating the forecasts provided in each Global
Marketing Plan as well as inventory levels for the Intermediate,
the Compound and the Product;
56
(h) Establish a method for measuring the Parties' respective
manufacturing capacity for the Intermediate, the Compound and the
Product, and periodically review and monitor all capacity expansion
plans; overseeing the Capacity Plan; and
(i) Providing updates on the MSC's activities and
achievements to the JOC.
(ii) The MSC shall establish, at a minimum, the following
subcommittees: (a) Supply Chain Subcommittee, (b) Quality Subcommittee,
(c) Technical Subcommittee, and (d) Finance Subcommittee. Each
subcommittee will report its decisions to the MSC, which shall have
jurisdiction over all matters handled initially at the subcommittee
level. In addition to the functions described below, the subcommittees
will lead the functions outlined in this Article 10.5 and other matters
as agreed by the MSC.
(a) The Supply Chain Subcommittee will be responsible for
preparation of Product forecasts, the determination of orders for
Product and Intermediate, and the logistics of Product supply.
(b) The Quality Subcommittee will be responsible for
preparation of quality agreements between the Parties, overseeing
the execution of such quality agreements, and managing matters
relating to Product quality such as change control, Product
complaint investigations and Product recalls.
(c) The Development Subcommittee will be responsible for
development of manufacturing processes for the active
pharmaceutical product and finished Product for Launch and for
continued improvement to those processes.
(d) The Finance Subcommittee will be responsible for
establishing and managing processes between the manufacturing
finance groups of Pfizer and Organon, including, without
limitation, matters relating to payments and reconciliations under
the Production Agreements.
(iii) If the MSC is unable to reach a decision on any issue within
ten (10) Business Days after presentation, either Party may refer the
issue to the JOC for resolution.
10.6 Country Commercialization Committee. The Parties agree to establish
a CCC in each Co-Promotion Country or group of Co-Promotion Countries as
appropriate and agreed upon by the Parties. The general manager/country
manager, or a senior-level member of the general manager's/country manager's
leadership team, in each applicable Co-Promotion Country will be included in
the relevant CCC. The general managers/country managers will include other
representatives from each Party, as needed.
(i) CCC Commercialization Responsibilities. Subject to the
provisions of this Agreement and the Global Marketing Plan, each CCC will
oversee the Co-Promotion in the relevant Co-Promotion Country or groups
of Co-Promotion Countries, as the case may be. In addition, each CCC
will be responsible for the following:
(a) Designate the individuals responsible for preparing the
Country Marketing Plan for the relevant Co-Promotion Country or
group of Co-Promotion Countries each consistent with the Global
Marketing Plan;
(b) Develop forecasts, on a at least an annual basis, for the
Product in the relevant Co-Promotion Country or group of Co-
Promotion Countries
57
(c) Prepare and submit the Country Marketing Plan for the
relevant Country or group of Co-Promotion Countries and submit any
deviation in the budget from the Global Marketing Plan, and/or any
material change in the Country Marketing Plan to the GCC for
approval;
(d) Monitor compliance with the relevant Country Marketing
Plan and approve any immaterial change in the relevant Country
Marketing Plan;
(e) Review and approve expenses for inclusion as Marketing
Costs;
(f) Adapting GCC-approved advertising materials and
strategies and promotional materials for the relevant Co-Promotion
Country or group of Co-Promotion Countries, and otherwise
developing local Promotional Materials consistent with the Global
Marketing Plan;
(g) Adapting GCC-approved packaging for the relevant Co-
Promotion Country or group of Co-Promotion Countries;
(h) Develop and discuss strategies for the Detailing and
marketing of the Product in the relevant Co-Promotion Country or
group of Co-Promotion Countries including allocation of
responsibility for marketing activities;
(i) Plan and conduct educational and professional symposia in
the relevant Co-Promotion Country or group of Co-Promotion
Countries;
(j) Suggest to the GCC appropriate marketing-oriented
clinical trials and monitor implementation in the relevant
Co-Promotion Country or group of Co-Promotion Countries;
(k) Monitor advertising placement and market responses in the
relevant Co-Promotion Country or group of Co-Promotional Countries;
(l) Define and establish a set of procedures to forecast and
order Product (including samples) in the relevant Co-Promotion
Country or group of Co-Promotion Countries, with responsibility for
recommendation of production and supply activities;
(m) Initiate and monitor market research in the relevant Co-
Promotion Country or group of Co-Promotion Countries;
(n) Develop local pricing and reimbursement strategies and
strategies related to obtaining listing on managed care formularies
for the relevant Co-Promotion Country, which strategies must be
consistent with the Global Marketing Plan; and
(o) Establish the number of Details to be made by each
Party's Sales Representatives in the relevant Co-Promotion Country
or group of Co-Promotion Countries for each Calendar Quarter, which
shall be similar to the number of Details provided in the
pharmaceutical industry in such Co-Promotion Country or group of
Co-Promotion Countries for products with similar potential and
magnitude in light of prevailing market conditions and the
competitive landscape.
(ii) CCC Product Development Responsibilities Subject to the
provisions of this Agreement and the Development Plan, each CCC shall
implement the relevant Development
58
Plan insofar as it relates to the relevant Co-Promotion Country or group
of Co-Promotion Countries. In particular, each CCC shall:
(a) Facilitate the exchange of all development information
and data;
(b) Submit recommendations for the Development Plan to the
CDRC;
(c) Review local activities against the Development Plan;
(d) Recommend allocation of development activities to the
CDRC; and
(e) Monitor, directly or indirectly, all local regulatory
activities.
(iii) If the CCC is unable to reach a decision on any issue within
ten (10) Business Days after presentation, such issues shall be referred
to the CDRC or GCC, as applicable.
10.7 Joint Operating Committee. The JOC shall consist of the chairpersons
of the CDRC, GCC, and MSC, and, as the co-chairpersons of the JOC, each Party
will designate a senior-level executive with responsibility for the applicable
therapeutic area in such Party's organization. The JOC will be responsible for
the following:
(i) Establishing the strategic objectives and general directions
for the Co-Promotion and Detailing of the Product in the Co-Promotion
Countries
(ii) Review and approval of the Global Marketing Plan and review
of the Development Plan;
(iii) Making go/no go decisions with respect to filing NDA's, other
Applications for Regulatory Approvals, and other significant regulatory
filings;
(iv) Resolution of disputes which cannot be resolved at the
subcommittees;
(v) To raise disputes which cannot be resolved by the JOC to the
Steering Committee; and
(vi) Such other matters as the Parties may mutually assign the JOC
from time to time.
If the JOC is unable to resolve any issue within ten (10) Business Days
after presentation, either Party's co-chairperson on the JOC may refer
the issue to the Steering Committee for resolution.
10.8 Steering Committee. The Steering Committee shall consist of four (4)
executives, two (2) from each of Organon and Pfizer, each of which shall
confirm to the other its designees. In addition, the co-chairpersons of the JOC
shall attend meetings of the Steering Committee in order to participate in
Steering Committee discussions, but shall not have the right to vote. The
Steering Committee shall have general oversight and review of the activities of
the JOC and shall be responsible for resolving any issues referred by the JOC.
(i) In the event of a tied vote of the Steering Committee, the
chairperson designated by Pfizer shall have the final decisionmaking
authority with respect to the following subject matters:
(a) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
59
(b) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
(c) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
(ii) In the event of a tied vote of the Steering Committee, the
chairperson designated by Organon shall have the final decisionmaking
authority with respect to [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
(iii) Except as otherwise provided in this Agreement, all other
matters within the purview of the Committees or subcommittees shall be
Consensus Matters.
10.9 Alliance Managers. In addition to the committees and subcommittees,
the Parties will each appoint a senior representative with a general
understanding of the clinical, regulatory, manufacturing and commercial issues
relating to the Product to act as an alliance manager ("Alliance Manager"). It
is envisioned that the Alliance Managers will serve as a single focal point for
all information in order to maintain a complete overview of the alliance and to
serve as the main contact within each Party with responsibility for
facilitating communication and collaboration between the Parties. The Alliance
Managers shall attend committee and subcommittee meetings. The Alliance
Managers will work together to resolve such issues or potential disputes, and
to enable the committees to reach decisions with the intent of averting the
escalation of such issues or potential disputes.
ARTICLE 11
INTELLECTUAL PROPERTY
11.1 Ownership of Collaboration Inventions. As between Organon and
Pfizer, (i) Organon shall solely own all Collaboration Inventions invented
solely by Organon's employees and agents, (ii) Pfizer shall solely own all
Collaboration Inventions invented solely by Pfizer's employees and agents, and
(iii) the Parties shall jointly own all Collaboration Inventions invented by
employees and agents of both Parties. The Parties agree that inventorship shall
be determined in accordance with United States patent law, provided, however,
that, without limiting the foregoing, in preparing patent applications for
Collaboration Inventions, each Party shall follow the Laws of the Country in
which such application is being filed. Each Party shall have the first right to
prosecute and maintain Patent Rights included in the Collaboration Inventions
solely owned by such Party. Neither Party shall abandon any Patent Rights
included in the Collaboration Inventions that such Party has the first right to
prosecute and maintain without at least 90 days' prior written notice of such
abandonment to the other Party. If a Party decides to abandon any such Patent
Rights, the other Party shall have the option to continue the prosecution and
maintenance of such Patent Rights in the name(s) of the Party or Parties owning
such Patent Rights and at such other Party's expense. The costs of prosecuting
and maintaining Patent Rights included in the Collaboration Inventions shall be
shared equally by the Parties in each Co- Promotion Country and Co-Marketing
Country, Pfizer will bear all such costs in the Pfizer Exclusive Countries,
Organon will bear all such costs in the Organon Exclusive Countries, and
provided that either Party may elect not to pay such costs with respect to any
given Patent Rights included in the Collaboration Inventions being prosecuted
and/or maintained by the other Party incurred from and after such time as such
Party notifies the other Party of such election, and thereafter any licenses
granted in this Agreement by the other Party to the Party making such election
shall exclude such Patent Rights. Such costs of prosecuting and maintaining
Patent Rights included in the Collaboration Inventions in the Co-Promotion
Countries shall be shared equally by the Parties and included in the Parties'
Quarterly Marketing Cost Reports pursuant to Article 8A.1 of this Agreement.
Pfizer shall reimburse Organon for all such costs of prosecuting and
maintaining
60
Patent Rights included in the Collaboration Inventions in the Pfizer Exclusive
Countries incurred by Organon within thirty (30) days after receiving any
invoice from Organon for such costs.
11.2 Jointly Owned Collaboration Inventions. With respect to any
Collaboration Inventions that are jointly owned by the Parties, the Parties
shall consult with each other regarding the filing, prosecution and maintenance
of any such Patent Rights, and responsibility for such activities shall belong
to Organon. Organon shall undertake such filings, prosecutions and maintenance
in the names of both Parties as co-owners. Organon shall have the following
obligations with respect to the filing, prosecution and maintenance of Patent
Rights in jointly owned Collaboration Inventions: (i) Organon shall permit
Pfizer to review and comment at least two (2) weeks prior to the filing of any
priority patent application by Organon; (ii) Organon shall notify Pfizer within
thirty (30) days after the filing of a patent application by Organon; (iii)
Organon shall notify Pfizer within six (6) months from the filing of the
priority patent application whether and in which Countries it intends to file
convention patent applications; (iv) Organon shall provide Pfizer promptly with
copies of all communications received from or filed in patent offices with
respect to such filings; and (v) Organon shall provide Pfizer, a reasonable
time prior to taking or failing to take action that would affect the scope or
validity of rights under any patent applications or Patents (including but not
limited to substantially narrowing or canceling any claim without reserving the
right to file a continuing or divisional patent application, abandoning any
Patent or not filing or perfecting the filing of any patent application in any
country), with notice of such proposed action or inaction so that Pfizer has a
reasonable opportunity to review and make comments, and take such actions as
may be appropriate in the circumstances. In the event that Organon materially
breaches the foregoing obligations and such breach is not cured within thirty
(30) days of a written notice from Pfizer to Organon describing such breach, or
in the event that Organon fails to undertake the filing of a patent application
within ninety (90) days of a written request by Pfizer to do so, Pfizer may
assume Organon's responsibility for filing, prosecution and maintenance of any
such jointly owned Patent Right in the manner described in Article 11.6.
11.3 Collaboration Intellectual Property. All Collaboration Intellectual
Property shall be jointly owned by the Parties, and each Party shall have the
right freely to use all Collaboration Intellectual Property for all purposes
and uses.
11.4 Cooperation. Each Party agrees to cooperate with the other with
respect to the preparation, filing, prosecution and maintenance of patents and
patent applications pursuant to this Article 11 including, without limitation,
the execution of all such documents and instruments and the performance of such
acts (and causing its relevant employees to execute such documents and
instruments and to perform such acts) as may be reasonably necessary in order
to permit the other Party to continue any preparation, filing, prosecution or
maintenance of any Patent Rights that such Party has elected not to pursue as
provided for in Article 11.2. Organon shall recommend to the JOC which of the
Organon Patent Rights for which to seek an extension of term in Co-Promotion
Countries in which any such extension is available. Upon confirmation of the
recommendation of Organon with respect to patent term extension by the JOC,
Organon will file for said patent term extension, and the Parties shall bear
equally the costs thereof.
11.5 Notification. If either Party during the Term makes a Collaboration
Invention, such Party promptly shall make or cause disclosure to the other of
such Collaboration Invention.
11.6 Maintenance of Patent Rights other than Jointly Owned Patent Rights.
(i) Organon will maintain in full force and effect all Organon
Patent Rights. Organon shall cooperate with Pfizer in the continued
prosecution and maintenance by Organon or the licensor or sublicensor, as
applicable, of the Organon Patent Rights. After the Effective Date,
Organon shall not, without Pfizer's consent, enter into any Third Party
license agreement relating to Patent Rights that Organon proposes to
license from a Third Party and that Organon reasonably foresees would,
upon the execution of such Third Party license agreement, result in
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the creation of any Pfizer obligation pursuant to this Agreement to share
in or pay any portion of the royalties or other amounts payable under
such Third Party license agreement.
(ii) Organon shall not abandon any Organon Patent Rights with
respect to which Organon or any of its Affiliates controls prosecution
and maintenance activities, either directly or through step-in rights
granted to Organon in any Third Party license agreement, without at least
90 days' prior notice of such abandonment to Pfizer. If Organon decides
to abandon any such Patent Rights, Pfizer shall have the option to
continue the prosecution and maintenance of such Patent Rights in
Organon's name at Pfizer's expense, subject to any limitations set forth
in Organon's agreements with Organon's licensors and sublicensors. If
Pfizer desires that Organon file any application for a patent in a
specific Country or Countries, or file any patent applications on
improvements and variations upon inventions disclosed in the Organon
Patent Rights set forth on Schedule 1.94 or otherwise relating to the
Compound or the Product, Pfizer shall advise Organon of such Country or
Countries or improvements, variations or inventions, as the case may be.
Organon shall consider Pfizer's request in good faith and shall not
unreasonably decline to file the requested patent application and, if
Organon files the patent applications as requested, Pfizer shall pay
fifty percent (50%) of all reasonable expenses, including reasonable fees
for patent counsel, for filing and for prosecuting such requested patent
applications. If Organon declines to file the patent applications as
requested, Pfizer may, at its sole expense, file and prosecute such
applications. Pfizer shall have reasonable access to all documentation,
filings and communications to or from the respective patent offices and
shall be kept advised as to the status of all pending applications to the
extent pertaining to the Compound or the Product. Unless otherwise
explicitly set forth above in this Article 11.6, the Parties shall each
be responsible for 50% of the Parties' patent prosecution and maintenance
costs relating to the Organon Patent Rights. Organon shall include all
such costs in Organon's Quarterly Marketing Cost Reports pursuant to
Article 8A.1 of this Agreement.
11.7 Trademarks and Corporate Logos.
(i) Subject to the provisions of this Article 11.7, each Party
shall retain all right, title and interest in and to its respective
corporate name and logo.
(ii) In the Co-Promotion Countries, the Product shall be promoted
and sold solely under the Trademark(s) and shall use a trade dress
mutually agreed by the Parties that includes Pfizer's and Organon's
logos. In the Co-Promotion Countries, subject to the requirements of
Law, Organon and Pfizer shall be identified and given equal exposure and
prominence on all Product package inserts, trade packages, packaging,
samples, and Promotional Materials; provided, however, that if Organon or
Pfizer cannot be given equal exposure and prominence on all Product
package inserts, trade packages, packaging, samples, and promotional
materials in one or more Co-Promotion Countries as a result of the
requirements of applicable Law, then Organon or Pfizer, as the case may
be, shall be given as close to equal exposure and prominence as possible,
consistent with applicable Law. In the Pfizer Exclusive Countries,
Pfizer will promote and sell the Product under a Trademark, but shall
have the sole right and obligation to determine the trade dress and
packaging for the Product, provided that it makes such determinations in
a manner consistent with the Global Marketing Plan. In the Organon
Exclusive Countries, Organon will promote and sell the Product under a
Trademark, but shall have the sole right and obligation to determine the
trade dress and packaging for the Product, provided that it makes such
determinations in a manner consistent with the Global Marketing Plan.
(iii) It is the Parties' intention to utilize a single trademark
for the Product throughout the Territory other than in the Co-Marketing
Countries where the Product must be marketed and sold by the Parties
under different Trademarks by operation of local Law; provided, however,
if any Governmental Authority in the Territory fails to approve the
Trademark as an acceptable trademark for the Product, or if either Party
reasonably determines that use of the Trademark in a particular Country
may violate the rights of any Third Party in such Country, then the
Parties shall select an alternative Trademark for the Product in such
Country or Countries. In either event,
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Organon shall be solely responsible for registering and maintaining such
alternative Trademark in the Pfizer Exclusive Countries and shall be the
owner thereof. Pfizer shall not register or seek to register the
Trademark or any alternative Trademark selected by the Parties in any
Country of the Territory.
(iv) During the Term, Pfizer grants to Organon the non-exclusive
right, free of charge, to use the Pfizer name and logo in the Co-
Promotion Countries solely for the purpose of Co-Promoting of the
Products in accordance with the terms of this Agreement, and Organon
grants to Pfizer the non-exclusive right, free of charge, to use the
Organon name and logo in the Co-Promotion Countries solely for the
purpose of Co-Promotion of the Products in accordance with the terms of
this Agreement; provided that such rights shall be exercised, and all
Products bearing such names and/or logos shall be manufactured, in
accordance with the quality standards established by the GCC.
(v) During the Term, and thereafter as provided in Article 13.8,
Organon grants to Pfizer the non-exclusive right to use the Trademarks in
connection with the marketing, promotion and sale of the Product in (a)
the Pfizer Exclusive Countries and, (b) other than the Trademark being
used by Organon in each such Co-Marketing Country, the Co-Marketing
Countries.
(vi) Organon shall remain the owner of the Organon name and logo
and the Trademark(s) and the goodwill pertaining thereto. Organon shall
be solely responsible for registering and maintaining the Trademark(s) in
the Territory and shall remain the owner thereof. Except as contemplated
herein, Organon shall have no rights in or to the Pfizer name or logo or
the goodwill pertaining thereto. Except as contemplated herein, Pfizer
shall have no rights in the Trademark(s) in the Territory or to the
Organon name or logo, or the goodwill pertaining thereto.
(vii) Organon and Pfizer shall each be responsible for fifty
percent (50%) of the cost of registering and maintaining the Trademark(s)
in the Territory. Organon shall include all such Territory costs in
Organon's Quarterly Marketing Cost Reports pursuant to Article 8A.1.
(viii) Copyrights and Proprietary Programs. The Parties shall
jointly own all copyrights relating to Promotional Materials developed
for use in the Co-Promotion Territory for the Product. Pfizer and
Organon shall each retain all rights including, without limitation,
copyrights and trademarks, to all of their respective existing programs
and materials in all formats (print, video, audio, digital, computer,
etc.) regarding sales training, patient education and disease management
programs owned by each of them as of the Effective Date, as well as any
modifications each may develop in the future which are not specific to
the Product. Organon and Pfizer shall, from time to time, endeavor to
each notify the other as to the identity of such existing programs and
materials. In addition, all new programs regarding sales training,
patient education and disease management jointly developed by Organon and
Pfizer for the Products pursuant to this Agreement shall be jointly owned
by Organon and Pfizer, and each Party shall have the right to use and
exploit such developed programs freely without any need to obtain the
consent of the other Party and without any duty to account to the other
Party for such use or exploitation. Each Party hereby assigns to the
other Party all rights, title and interests, including all intellectual
property rights, in and to such Promotional Materials and programs as
necessary to give effect to the provisions of this Article 11.7.
(ix) Domain Names. Organon shall be solely responsible for
registering and maintaining domain names comprising the Trademark(s) in
the Territory and shall be the owner thereof. Organon and Pfizer shall
each be responsible for fifty percent (50%) of the costs for registering
and maintaining the domain names comprising the Trademark(s). Organon
shall include all such costs in Organon's Quarterly Marketing Cost
Reports pursuant to Article 8A.1.
(x) Copyrights and Internet Sites. The Parties shall jointly own
all copyrights relating to internet sites jointly developed by Organon
and Pfizer for use in the Territory pursuant to this
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Agreement. Organon and Pfizer shall each be responsible for fifty percent
(50%) of the costs of registering and maintaining such copyrights and
internet sites.
11.8 Disclosure. Organon shall disclose to Pfizer the complete texts of
all patent applications within the Organon Patent Rights filed by Organon, or
by Organon's licensors to the extent Organon is permitted to provide such texts
to Pfizer under the terms of Organon's agreements with such licensors, as well
as information received concerning the institution or possible institution of
any interference, opposition, re-examination, reissue, revocation or any
official proceeding involving patents and patent applications within the
Organon Patent Rights prosecuted and/or maintained by Organon, or by Organon's
licensors to the extent Organon receives such information, anywhere in the
Territory. Pfizer shall have the right to review all such pending applications
and other proceedings and make recommendations to Organon, and to Organon's
licensors if permitted under the terms of Organon's agreements with such
licensors, concerning such applications and proceedings and their conduct.
Organon agrees, subject to any limitations set forth in Organon's agreements
with Organon's licensors, to keep Pfizer promptly and fully informed of the
course of such patent prosecution and other proceedings including, without
limitation, by providing Pfizer with copies of all substantive communications
submitted to or received from patent offices throughout the Territory. The
provisions of this Article 11.8 also shall be deemed to apply in all respects
to Pfizer as it relates to Pfizer Patent Rights in Collaboration Inventions.
11.9 Patent Term Extensions. The Parties shall cooperate, if necessary
and appropriate, with each other in gaining patent term extensions wherever
applicable to Organon Patent Rights. The Parties shall, if necessary and
appropriate, use reasonable efforts to agree upon a joint strategy relating to
patent term extensions, but, in the absence of mutual agreement with respect to
any extension such, and subject to Law, a patent shall be extended if either
Party elects to extend such patent. The Parties shall each be responsible for
fifty percent (50%) of the costs of seeking and/or obtaining patent term
extensions relating to the Organon Patent Rights in the Territory. Organon
shall include all such costs in Organon's Marketing Cost Reports pursuant to
Article 8A.1 of this Agreement.
11.10 Infringement, Unauthorized Use and Challenge. If either Party
becomes aware that a Third Party is or may be infringing or otherwise making
unauthorized use of, or challenge to, any Organon Patent Rights, Patent Rights
in jointly owned Collaboration Inventions, Trademarks or Organon Technical
Information, the Party learning of such infringement or unauthorized use or
challenge shall promptly notify the other Party and provide it with any
available evidence of such possible infringement or unauthorized use or
challenge. In the Pfizer Exclusive Countries, Pfizer shall have the first right
to bring suit and to take action against such infringer or unauthorized user or
challenger in its own name, or in the name of Organon where necessary, in which
case Pfizer shall control the prosecution of any such suit or claim, including
without limitation the choice of counsel, and shall have the exclusive right to
settle or dispose of any such suit or claim. In the Organon Exclusive Countries
and the Co-Marketing Countries, Organon shall have the first right to bring
suit and to take action against such infringer or unauthorized user or
challenger in its own name, in which case Organon shall control the prosecution
of any such suit or claim, including without limitation the choice of counsel,
and shall have the exclusive right to settle or dispose of any such suit or
claim. In the Co-Promotion Countries, as between Pfizer and Organon, and
subject to any rights retained by Organon's licensors, Organon shall have the
first right to bring suit and to take action against such infringer or
unauthorized user or challenger in its own name, in which case Organon shall
control the prosecution of any such suit or claim, including without limitation
the choice of counsel, and shall have the exclusive right to settle or dispose
of any such suit or claim. Notwithstanding anything to the contrary in this
Article 11.10, if a Party fails to initiate a suit or take other appropriate
action that it has the initial right to initiate or take pursuant to this
Article 11.10 or the Parties fail to agree on the initiation or taking thereof
within ninety (90) days after becoming aware of the basis for such suit or
action, then the other Party shall have the right, in its discretion, to
initiate a suit or take other appropriate action that it believes is reasonably
required to protect the intellectual property rights at issue. Notwithstanding
the foregoing provisions of this Article 11.10, in the case of an infringement
action pursuant to Section 505(b) of the Act, subject to any legal obligations
of Organon to its licensors with respect to Organon Patent Rights, if the Party
that has the initial right to initiate such action fails to notify the other
Party, at least fifteen (15) days prior to such Party's deadline under the Act
for bringing such action, that such Party will bring such action, then the
other Party may, in its discretion, initiate such action after giving
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written notice of such election to the Party with the initial right to initiate
such action. The proceeds of any recovery, court award or settlement of such
action shall, after any required payments to Organon's licensors, first be
applied to reimburse the Parties for the costs and expenses of such prosecution
and the balance shall be paid 50% to Pfizer and 50% to Organon. The Parties
shall cooperate and take action to assist the other as is reasonably necessary
in relation to all suits or claims brought under this Article 11.10.
11.11 [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement. Organon covenants and
agrees with Pfizer that Organon: (a) shall not execute any amendment,
modification or waiver of the license(s) contained in the [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] Agreement without the prior written consent of Pfizer, (b)
shall not make any election or exercise any right or option (or omit to take
any action) that would terminate or relinquish in whole or in part the
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] Agreement, (c) shall comply with all of its
obligations under the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement in all material
respects, (d) shall take such reasonable actions as shall be necessary to keep
in full force and effect the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement, and
(e) shall give prompt notice to Pfizer, together with a summary of outstanding
issues if Pfizer so requests and of any actual or alleged defaults, breaches,
violations, proposed amendments or proposed modifications of, or any proposed
waivers under, the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement by any party to
the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] Agreement.
ARTICLE 12
CLAIMS
12.1 Notice from the Parties. Each Party shall promptly notify the other
Party in writing of any potential or actual litigation or governmental activity
in the Territory relating to the Intermediate, the Compound or the Product.
12.2 Indemnification by Organon. Organon shall indemnify and hold
harmless Pfizer and its Affiliates and their respective directors, officers and
employees (the "Pfizer Parties") from and against any and all Losses (as
defined below) arising from or relating to any claim, demand, lawsuit, action
or proceeding (a "Claim") arising from or relating to:
(i) any violation of Law Organon or its Affiliates;
(ii) the storage, promotion, sale or distribution or use of the
Product based on the gross negligence or intentionally wrongful conduct
of Organon or its Affiliates;
(iii) any actual or alleged infringement, misappropriation or other
violation of a Third Party's intellectual property rights arising out of
or related to the Organon Patent Rights, the Organon Technical
Information and/or the manufacture (by the process described on Schedule
9.8), use, sale, offer for sale, or importation of the Current Product or
any Organon-Only Product;
(iv) Organon's or any of its Affiliates' failure to manufacture
and package in accordance with the Production Agreements, or to cause
Third Parties to manufacture, the Product in accordance with (A) the
then-existing Product Specifications as determined in accordance with the
terms of this Agreement, or (B) cGMP;
65
(v) Organon's use, sale, offer for sale, or importation of any
Organon-Only Product; or
(vi) any breach by Organon or any of its Affiliates of any
representation, warranty or covenant given in any of the Alliance
Agreements.
Notwithstanding anything to the contrary contained herein, none of the
indemnities in this Article 12.2 shall apply to the extent that any Loss
is the result of any breach of this Agreement by Pfizer or of any willful
misconduct of Pfizer Parties.
12.3 Indemnification by Pfizer. Pfizer shall indemnify and hold harmless
Organon and its Affiliates and their respective directors, officers and
employees (the "Organon Parties") from and against any and all Losses arising
from or relating to any Claim arising from or relating to:
(i) any violation of Law by Pfizer or its Affiliates; or
(ii) the storage, promotion, sale or use of the Product based on
the gross negligence or intentionally wrongful conduct of Pfizer or its
Affiliates;
(iii) any breach by Pfizer or any of its Affiliates of any
representation or warranty given in any of the Alliance Agreements; or
(iv) Pfizer's or any of its Affiliates' failure to manufacture in
accordance with the Production Agreements, or to cause Third Parties to
manufacture, Products in accordance with (A) the then-existing Product
Specifications as determined in accordance with the terms of this
Agreement, or (B) cGMP (other than, in all cases, any failures which are
the subect of Article 12.2(iv)).
Notwithstanding anything to the contrary contained herein, none of the
indemnities in this Article 12.3 shall apply to the extent that any Loss
is the result of any breach of this Agreement by Organon or of any
willful misconduct of Organon Parties or is the subject of the indemnity
contained in Article 12.2 (including without limitation Article 12.2(v)).
12.4 Co-Indemnification.
(i) Product Liability. Organon shall indemnify, defend and hold
the Pfizer Parties harmless from and against one hundred percent (100%)
of the amount of any and all Losses arising out of or resulting from any
Third Party Claim involving death, bodily injury or property damage
actually or allegedly arising out of or resulting from the manufacture,
packaging, distribution, marketing, use and/or sale of the Product (other
than with respect to the matters for which one Party is obligated to
indemnify the other Party pursuant to Article 12.2 or 12.3 above) (any
and all such Losses, "Product Liability") up to, in the aggregate, the
Threshold Amount with respect to all Product Liability Occurences in the
Territory after the date hereof and prior to the initial Launch of the
Product on a Country-by-Country basis. Organon shall indemnify, defend
and hold the Pfizer Parties harmless from and against fifty percent (50%)
of the amount of any and all Product Liability (a) prior to the initial
Launch of the Product in each Country, in excess of the Threshold Amount
or (b) with respect to any Product Liability Occurrences after the
initial Launch of the Product in a Country, and Pfizer shall indemnify,
defend and hold Organon Parties harmless from and against fifty percent
(50%) of the amount of any and all of such Product Liability (a) prior to
the initial Launch of the Product in each Country, in excess of the
Threshold Amount or (b) with respect to any Product Liability Occurrences
after the initial Launch of the Product in a Country. For purposes of
this Article 12: (A) "Threshold Amount" shall mean the aggregate sum of
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] U.S. Dollars ($[CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
66
THE SECURITIES AND EXCHANGE COMMISSION]) of Product Liability determined
on a first-to- be incurred or discovered basis (whichever is earlier),
and (B) "Product Liability Occurences" means, with respect to all Product
Liability, the initial time of sale or other provision to the plaintiff
of the relevant Product for which any Product Liability relates based
upon available records or other reliable means.
(ii) Organon shall indemnify, defend and hold the Pfizer Parties
harmless from and against fifty percent (50%) of the amount of any and
all Losses arising out of or resulting from any Third Party Claim
involving any actual or alleged infringement, misappropriation or other
violation of a Third Party's intellectual property rights arising out of
or related to the Organon Patent Rights, the Organon Technical
Information and/or use, promotion, manufacture, commercialization,
distribution, offering for sale, sale or importation of the Product (but
in all cases excluding Losses for which one Party is obligated to
indemnify the other Party pursuant to this Article 12, including without
limitation, Article 12.2(iii) above) (any and all such Losses, the "IP
Liability"), and Pfizer shall indemnify, defend and hold Organon Parties
harmless from and against fifty percent (50%) of the amount of any and
all of such IP Liability; it being understood and agreed that the purpose
of the provisions of this sentence is that Pfizer and Organon shall pay
for and otherwise share the cost of the IP Liability equally.
(iii) For the avoidance of doubt, the reference to "Product" in
this Article 12.4 excludes Organon-Only Product.
12.5 Procedures for Third Party Claims.
(i) In the event that any Third Party asserts a Claim with
respect to any matter for which a Party (the "Indemnified Party") is
entitled to indemnification hereunder (a "Third Party Claim"), then the
Indemnified Party shall promptly notify the Party obligated to indemnify
the Indemnified Party (the "Indemnifying Party") thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party
from any obligation hereunder unless (and then only to the extent that)
the Indemnifying Party is prejudiced thereby.
(ii) The Indemnifying Party shall have the right, exercisable by
written notice to the Indemnified Party within ten (10) days of receipt
of notice from the Indemnified Party of the commencement of or assertion
of any Third Party Claim, to assume the defense of such Third Party
Claim; provided, however, that (A) the Third Party Claim seeks (and
continues to seek) solely monetary damages and the Indemnifying Party
expressly agrees in such notice that, as between the Indemnifying Party
and the Indemnified Party, the Indemnifying Party shall be solely
obligated to satisfy and discharge the Third Party Claim (or, in the case
of matters which are the subject of Article 12.4, such amounts as
required in accordance with Article 12.4), (B) the defense of such Third
Party Claim by the counsel representing the Indemnifying Party does not,
in the reasonable judgment of the Indemnified Party, constitute a
conflict of interest under the applicable cannons or rules of legal
professional ethics, (C) in such case as Pfizer or another of the Pfizer
Parties is the Indemnified Party, such Third Party Claim does not relate,
directly or indirectly, to Geodon, Xanax, or any other product under
development by Pfizer, its Affiliates or licensees, and (D) the
Indemnifying Party makes reasonably adequate provision to ensure the
Indemnified Party of the ability of the Indemnifying Party to satisfy the
full amount of any adverse monetary judgment that would reasonably be
expected to result therefrom (the conditions set forth in clauses (A),
(B), (C) and (D) are collectively referred to as the "Litigation
Conditions"). In no event shall Organon have the right to control any
Third Party Claim to the extent such Third Party Claim relates, directly
or indirectly, to Geodon, Xanax, or any other product (other than the
Product) being developed or commercialized by Pfizer, its Affiliates or
licensees. If both Parties are Indemnifying Parties pursuant to co-
indemnification obligations under Article 12.4 with respect to the same
Third Party Claim, the Parties shall determine by mutual agreement,
within twenty (20) days following their receipt of notice of commencement
or assertion of such Third Party
67
Claim (or such lesser period of time as may be required to properly
respond to such claim), which Party shall assume the lead role in the
defense thereof. Should the Parties be unable to mutually agree on which
Party shall assume the lead role in the defense of such Third Party
Claim, both Parties shall be entitled to participate in such defense
through counsel of their respective choosing; provided that in the case
of any Third Party Claim with respect to which (i) both Parties are
Indemnifying Parties pursuant to co-indemnification obligations under
Article 12.4 and (ii) the Parties are unable to agree upon which Party
shall assume the lead role in the defense of such claim, then the Parties
agree to discuss strategies for defending such claim and will, to the
extent reasonably practicable, coordinate such defense through their
respective counsel.
(iii) Within ten (10) days after the Indemnifying Party has given
notice to the Indemnified Party of its intended exercise of its right to
defend a Third Party Claim, the Indemnified Party shall give notice to
the Indemnifying Party of any objection thereto based upon the Litigation
Conditions. If the Indemnified Party reasonably so objects, the
Indemnified Party shall continue to defend the Third Party Claim, at the
expense of the Indemnifying Party, until such time as such objection is
withdrawn. If no such notice is given, or if any such objection is
withdrawn, the Indemnifying Party shall be entitled, at its sole cost and
expense, to assume and conduct such defense, with counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnified Party,
until such time as the Indemnified Party shall give notice that any of
the Litigation Conditions, in its reasonable judgment, are no longer
satisfied.
(iv) During such time as the Indemnifying Party is controlling the
defense of such Third Party Claim, the Indemnified Party shall cooperate,
and cause its Affiliates and agents to cooperate, to the extent
commercially reasonable, upon request of the Indemnifying Party in the
defense or prosecution of the Third Party Claim, including by furnishing
such records, information and testimony and attending such conferences,
discovery proceedings, hearings, trials or appeals as may reasonably be
requested by the Indemnifying Party.
(v) In the event that the Indemnifying Party fails to satisfy the
Litigation Conditions or does not notify the Indemnified Party in writing
of the Indemnifying Party's intent to defend any Third Party Claim within
ten (10) days after notice thereof, the Indemnified Party may (without
further notice to the Indemnifying Party) undertake the defense thereof
with counsel of its choice and at the Indemnifying Party's expense
(including attorneys' fees and costs and expenses of enforcement or
defense).
(vi) The Indemnifying Party or the Indemnified Party, as the case
may be, shall have the right to join in (including the right to conduct
discovery, interview and examine witnesses and participate in all
settlement conferences), but not control, at its own expense, the defense
of any Third Party Claim which the other Party is defending as provided
in this Agreement.
(vii) The Indemnifying Party, if it shall have assumed the defense
of any Third Party Claim as provided in this Agreement, shall not consent
to a settlement of, or the entry of any judgment arising from, any such
Third Party Claim without the prior written consent of the Indemnified
Party (which consent shall not be unreasonably withheld or delayed). The
Indemnifying Party shall not, without the prior written consent of the
Indemnified Party, enter into any compromise or settlement which commits
the Indemnified Party to take, or to forbear to take, any action. The
Indemnified Party shall have the sole and exclusive right to settle any
Third Party Claim, on such terms and conditions as it deems reasonably
appropriate, to the extent such Third Party Claim involves equitable or
other non-monetary relief, and shall not have the right to settle such
Third Party Claim to the extent such Third Party Claim involves monetary
damages without the prior written consent of the Indemnifying Party.
(viii) The Indemnified Party shall be entitled to reimbursement for
all costs and expenses, including attorneys' fees and costs and expenses
of enforcement or defense, on an "as incurred" basis. The Indemnifying
Party will reimburse the Indemnified Party for such amounts within
fifteen (15) days after receiving an invoice from the Indemnified Party
therefor.
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12.6 Losses. For purposes of Articles 11 and 12, "Losses" shall mean any
and all (a) claims, losses, liabilities, damages, fines, royalties,
governmental penalties or punitive damages, deficiencies, interest, awards, and
judgments, and (b) with respect to Third Parties, settlement amounts and all of
the items referred to in clause (a) above which, in accordance with Article
12.7, include special, indirect, incidental and consequential damages
(including without limitation lost profits), and (c) in connection with all of
the items referred in clauses (a) and (b) above, any and all costs and expenses
(including reasonable attorneys' fees and all other expenses reasonably
incurred in investigating, preparing or defending any litigation or proceeding,
commenced or threatened). Notwithstanding anything to the contrary, the Parties
understand and agree that no Losses for which one Party has agreed to indemnify
any of the the other Party under this Agreement shall be included in
Development Costs, Cost of Goods or Marketing Costs or shall be applied as a
reduction in the calculation of Net Sales.
12.7 Limitation on Damages. IN NO EVENT SHALL PFIZER OR ORGANON BE LIABLE
FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, LOSS OF PROFITS) SUFFERED BY ANY ORGANON PARTIES OR ANY PFIZER
PARTIES, RESPECTIVELY UNDER THE ALLIANCE AGREEMENTS, EXCEPT (A) TO THE EXTENT
OF ANY SUCH DAMAGES PAID TO A THIRD PARTY AS PART OF A THIRD PARTY CLAIM, AND
(B) FOR PURPOSES OF INDEMNIFICATION PURSUANT TO ARTICLE 12, IN THE EVENT OF AN
INTENTIONAL AND WILLFUL BREACH IN BAD FAITH OF ANY REPRESENTATION, WARRANTY,
COVENANT OR AGREEMENT BY ORGANON OR PFIZER (AS THE CASE MAY BE) OF THIS
AGREEMENT, AND (C) AS PROVIDED IN ARTICLE 12.8 BELOW. EXCEPT AS EXPRESSLY
PROVIDED IN THIS AGREEMENT, INDEMNIFICATION PURSUANT TO THIS ARTICLE 12 SHALL
BE THE SOLE AND EXCLUSIVE REMEDY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
LEGAL THEORY) AVAILABLE TO ORGANON OR PFIZER FOR ANY MISREPRESENTATION UNDER OR
BREACH OF THIS AGREEMENT.
12.8 Available Damages. Notwithstanding anything to the contrary
contained in this Agreement, in the case of any claim by Pfizer alleging any
breach of this Agreement by Organon, the following in each case will not be
considered as constituting special, incidental, indirect or consequential
damages under this Agreement: (x) payments due to Pfizer pursuant to Article 6
or Article 9 of this Agreement, and (y) Losses as and to the extent such Losses
aggregate up to the sum of all amounts previously paid to Organon by Pfizer
under any of the Alliance Agreements.
ARTICLE 13
TERM AND TERMINATION
13.1 Term. Unless terminated sooner pursuant to this Article 13 hereof
and except as otherwise provided herein, this Agreement shall become effective
as of the Effective Date and shall continue in full force and effect, on a
Country-by-Country basis in each Country of the Territory for a period equal to
the longer of (A) fifteen (15) years following Launch of the Product in such
Country, and (B) such date the Product is no longer embraced within any Valid
Claim under Organon Patent Rights in such Country (the "Term").
13.2 Bilateral Termination. This Agreement may be terminated at any time
by written consent of each of the Parties. Such termination will be effective
thirty (30) days following such written consent.
13.3 Material Default. Organon shall have the rights set forth below in
this Article 13.3 by notice to Pfizer, and Pfizer shall have the rights set
forth below in this Article 13.3 by notice to Organon:
(i) Upon Organon's notice to Pfizer that a Material Default by
Pfizer has occurred, the Parties will meet to discuss in good faith
whether a plan to remedy the Material Default can be mutually agreed. If
the Parties fail to so agree within thirty (30) days after the date of
such notice, Article 13.3(ii) below shall apply. Notwithstanding the
foregoing provisions of this Article 13.3(i),
69
in the case of a payment default, the provisions of Article 13.3(ii)
below shall apply without any obligation to meet to discuss remedies
pursuant to this Article 13.3(i).
(ii) Subject to the terms hereof, upon the occurrence of any
Material Default by Pfizer, Organon may, upon ninety (90) days prior
written notice, terminate this Agreement, provided, however, that in case
of a default of a payment obligation such notice will lapse without
effect if Pfizer cures such default within thirty (30) days after receipt
of such notice. Organon may give the notice specified in this Article
13.3(ii) concurrently with the notice specified in Article 13.3(i) and
shall not give the notice specified in this Article 13.3(ii) later than
sixty (60) days after the date of the notice specified in Article
13.3(i).
(iii) Upon Pfizer's notice to Organon that a Material Default by
Organon has occurred, the Parties will meet to discuss in good faith
whether a plan to remedy the Material Default can be mutually agreed. If
the Parties fail to so agree within thirty (30) days after the date of
such notice, Article 13.3(iv) below will apply. Notwithstanding the
foregoing provisions of this Article 13.3(iii), in the case of a payment
default, the provisions of Article 13.3(iv) below shall apply without any
obligation to meet to discuss remedies pursuant to this Article
13.3(iii).
(iv) Subject to the terms hereof, upon the occurrence of any
Material Default by Organon, Pfizer may, upon ninety (90) days prior
notice, terminate this Agreement, provided, however, that in case of a
default of a payment obligation such notice will lapse without effect if
Organon cures such default within thirty (30) days after receipt of such
notice. Pfizer may give the notice specified in this Article 13.3(iv)
concurrently with the notice specified in Article 13.3(iii) and shall not
give the notice specified in this Article 13.3(iv) later than sixty (60)
days after the date of the notice specified in Article 13.3(iii).
(v) Notwithstanding Organon's right of termination described in
this Article 13.3, Organon acknowledges that it shall have no claim
whatsoever against Pfizer under this Agreement, and no right to terminate
this Agreement, for any breach or alleged breach by Pfizer of the
Alliance Agreements other than this Agreement, and that, under those
circumstances, this Agreement shall remain in full force and effect
according to its terms.
13.4 Change in Control. Organon may terminate this Agreement by written
notice to Pfizer in the event of a Change in Control of Pfizer, or in the event
that Pfizer assigns this Agreement to a Third Party in violation of Article
16.5 below. Pfizer may terminate this Agreement by written notice to Organon in
the event of a Change in Control of Organon, or in the event that Organon
assigns this Agreement to a Third Party in violation of Article 16.5 below.
13.5 Pfizer Termination Rights.
(i) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Pfizer may
terminate this Agreement in its entirety as follows:
(a) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] If during the
three (3) year period commencing with the second anniversary of the
Launch of the Product in the US Territory, [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] then Pfizer may elect, at any
time within 120 days following determination of [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] to terminate this Agreement in
its entirety upon one hundred and eighty (180) days notice to
Organon; or
70
(b) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Pfizer may
terminate this Agreement in its entirety by giving Organon one
hundred and eighty (180) days prior written notice at any time, but
in no event later than twenty (20) days after the earlier of
receipt of (x) an approvable letter in respect of the Product from
the FDA, and (y) Regulatory Approval of the Product in the US
Territory, in the event that Pfizer, in the exercise of its
reasonable judgment based on the data and results from the Product
Studies under the Development Plan, concludes in good faith that
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] will not be, or has not
been, as applicable, achieved at the time of such approvable letter
or Regulatory Approval (and in connection with any such termination
pursuant to this Article 13.5(i)(b), Pfizer agrees to
contemporaneously provide Organon with a written summary of the
reasons for its conclusion); or
(c) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Pfizer may
terminate this Agreement in its entirety by giving Organon one
hundred and eighty (180) days prior written notice in the event
that within thirty (30) days following Pfizer's receipt of the
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]
(ii) Termination for [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] and
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]; at Will. Pfizer may terminate
this Agreement as follows:
(a) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Pfizer may
terminate this Agreement in its entirety by giving Organon ninety
(90) days prior written notice in the event that, within thirty
(30) days following (x) Pfizer's receipt of the [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] or (y) Pfizer's [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] engaged by Organon in
connection with each of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
as applicable, the results of any of the foregoing studies fail to
satisfy the endpoints described in Schedule 1.2, with respect to
the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION], or the
endpoints described in Schedule 13.5(ii)(a), with respect to
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] or
(b) At Will. Pfizer may terminate this Agreement in its
entirety upon (x) twelve (12) months prior written notice to
Organon from Pfizer of termination of this Agreement pursuant to
this Article 13.5(ii)(b) if such notice is given prior to the first
Launch of a Product in the US Territory, (y) nine (9) months prior
written notice to Organon from Pfizer of termination of this
Agreement pursuant to this Article 13.5(ii)(b) if such notice is
given prior to the third anniversary of the first Launch of a
Product in the US Territory or (z) six (6) months prior written
notice to Organon from Pfizer of termination of this Agreement
pursuant to this Article 13.5(ii)(b) if such notice is given
71
after the third anniversary of the first Launch of a Product in the
US Territory. Pfizer shall be entitled to submit the above notice
from time to time in its absolute and sole discretion. Without
limiting the foregoing:
(1) if the effective date of termination pursuant to
this Article 13.5(ii)(b) is expected to fall after the first
Launch of the Product in the US Territory but prior to the
first anniversary of such Launch, then Organon may, at its
option, on written notice to Pfizer given no more than thirty
(30) days after the date of Pfizer's notice of termination,
(A) shorten the applicable notice period so that this
Agreement terminates one (1) month prior to such Launch; or
(B) extend the notice period so that this Agreement
terminates on the first anniversary of such Launch; and
(2) if the effective date of termination pursuant to
this Article 13.5(ii)(b) is expected to fall prior to the
first Launch of the Product in the US Territory, then Organon
may, at its option, on written notice to Pfizer given no more
than thirty (30) days after the date of Pfizer's notice of
termination, extend the effective date of such termination by
an additional one hundred and eighty (180) days (the
"Additional Notice Period"), during which time Pfizer will
continue its role in connection with the clinical development
of the Product in the same manner as it was conducting such
clinical development activities prior to giving such notice
of termination, and will continue to be responsible for its
share of any Development Costs incurred or accrued during the
Additional Notice Period related to such clinical development
activities applicable pursuant to Article 4.4 and with such
cost sharing percentage in effect at the time of Pfizer's
notice of termination (the "Additional Development Costs"),
but Pfizer will be relieved of all of its other obligations
(including payment obligations) under this Agreement. Pfizer
will provide Organon with a report setting forth such
Additional Development Costs within sixty (60) days after the
end of the Additional Notice Period.
13.1 Bankruptcy. Each Party may, in addition to any other remedies
available to it by law or in equity, exercise the rights set forth below by
written notice to the other Party, which in the case of Organon, shall refer to
the Organon Group (the "Insolvent Party"), in the event the Insolvent Party
shall have become insolvent or bankrupt, or shall have made a general
assignment for the benefit of its creditors, or there shall have been appointed
a trustee or receiver of the Insolvent Party or for all or a substantial part
of its property, or any case or proceeding shall have been commenced or other
action taken by or against the Insolvent Party in bankruptcy or seeking
reorganization, liquidation, dissolution, winding-up arrangement, composition
or readjustment of its debts or any other relief under any bankruptcy,
insolvency, reorganization or other similar act or law of any jurisdiction now
or hereafter in effect, and any such event shall have continued for sixty (60)
days undismissed, unbonded and undischarged. All rights and licenses granted
under or pursuant to this Agreement by Organon and Pfizer are, and shall
otherwise be deemed to be, for purposes of Article 365(n) of the U.S.
Bankruptcy Code, licenses of rights to "intellectual property" as defined under
Article 101 of the U.S. Bankruptcy Code. The Parties agree that the Parties as
licensees of such rights under this Agreement shall retain and may fully
exercise all of their rights and elections under the U.S. Bankruptcy Code. The
Parties further agree that, in the event of the commencement of a bankruptcy
proceeding by or against either Party under the U.S. Bankruptcy Code, the other
Party shall be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in their possession, shall be
promptly delivered to it (i) upon any such commencement of a bankruptcy
proceeding upon its written request therefore, unless the Party subject to such
proceeding elects to continue to perform all of its obligations under this
Agreement or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of the Party subject to such proceeding upon written
request therefore by the other Party.
72
13.7 Termination Upon HSR Denial or Failure to Satisfy Conditions. This
Agreement may be terminated by either Party, effective upon notice to the other
Party, if the HSR Clearance Date shall not have occurred on or prior to the
date 180 days after the Parties make their respective HSR Filings pursuant to
the terms and conditions of this Agreement.
13.8 Rights of Pfizer and Organon Upon Expiration. Subject to the other
terms and conditions herein,
(i) Upon the expiration of all of Pfizer's payment obligations to
Organon under Article 9.2 of this Agreement in a particular Pfizer
Exclusive Country, or upon the expiration of the Term in a Co-Marketing
Country, Pfizer shall have a fully paid-up non-exclusive license under
the Organon Patent Rights, Organon Technical Information and the
Trademarks, and under Organon's rights in Collaboration Intellectual
Property solely to make, have made, sell, offer for sale, use and import
the Product in each such Pfizer Exclusive Country or Co-Marketing
Country; and
(ii) Upon the expiration of all of Organon's payment obligations
to Pfizer under Article 9.1 of this Agreement in a particular Co-
Promotion Country, Organon shall have a fully paid-up non-exclusive
license under the Pfizer Patent Rights and Pfizer Technical Information,
and under Pfizer's rights in Collaboration Intellectual Property solely
to make, have made, sell, offer for sale, use and import the Product in
each such Co-Promotion Country.
(iii) Upon the expiration of all of Organon's payment obligations
to Pfizer under Article 9.1 of this Agreement in a particular Co-
Promotion Country, Pfizer shall have a fully paid-up non-exclusive
license under the Organon Patent Rights and Organon Technical
Information, and under Organon's rights in Collaboration Intellectual
Property, solely to make, have made, sell, offer for sale, use and import
the Product in each such Co-Promotion Country.
13.9 Residual Royalty. Subject to the other terms and conditions herein,
upon termination of this Agreement:
(i) by Organon pursuant to Article 13.3(ii) (Material Default) or
by Pfizer pursuant to Article 13.5(ii)(a) [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] Pfizer shall [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] royalty
regarding Net Sales of the Product in any Country during the Post-
Termination Period described below;
(ii) by Pfizer pursuant to Article 13.5(ii)(b) (At Will), Pfizer
shall [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] royalty regarding
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] of the Product during the Post-
Termination Period described below, provided, however, that, within sixty
(60) days of the first Launch of the Product in a Major Market Country,
Organon shall [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Pfizer for any
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]
(iii) by Pfizer pursuant to Article 13.3(iv) (Material Default),
Organon shall pay Pfizer a royalty equal to [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] ([CONFIDENTIAL
73
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) percent of Net Sales of the Product in each
Country in the Territory as provided herein during the Post-Termination
Period described below;
(iv) by Pfizer pursuant to Article 13.5(i)(a) [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION] Organon shall pay Pfizer a royalty with respect
to Net Sales of the Product in each Country in the Territory as provided
herein during the Post-Termination Period described below as follows:
(A) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] ([CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]%) percent of the aggregate of the Net Sales in all Countries
up to [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] dollars ($[CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]) for the initial 12-month period commencing on
the effective date of termination pursuant to Article 13.5(i)(a) and for
each 12-month period thereafter, and (B) [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]%) percent of the
aggregate of Net Sales in all Countries in excess of [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION] dollars ($[CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]) for the initial 12-month period commencing on the effective
date of termination pursuant to Article 13.5(i)(a) and for each 12-month
period thereafter; and
(v) by Pfizer pursuant to Article 13.5(i)(b) ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]) or pursuant to Article [CONFIDENTIAL INFORMATION
HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] Organon shall pay Pfizer a royalty equal to [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION]%) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent of
Net Sales of the Product in each Country in the Territory as provided
herein during the Post-Termination Period described below, provided,
however, that, such royalty shall terminate when the aggregate of all
royalty payments made by Organon to Pfizer pursuant to this Article
13.9(iv) equals the sum of all Development Costs and Marketing Costs paid
or accrued by Pfizer pursuant to this Agreement, and all amounts paid or
accrued by Pfizer under Production Agreements (other than amounts paid or
accrued in connection with improvements or expansions in manufacturing
facilities owned by Pfizer or its Affiliates), in all cases together with
interest which shall accrue thereon at the rate of [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]%) per annum, compounded quarterly, from the date such payments
were made or costs were incurred until the effective date of termination.
The Parties understand and agree that all payments by Organon to Pfizer
of the royalties required under this Article 13: (x) shall be calculated
and made in accordance with the procedures set forth in this Article 13
and Article 9 as if this Agreement had not otherwise terminated, and (y)
shall be calculated and apply, on a Country-by-Country basis, in each
Country of the Territory for the period ("Post-Termination Period"),
subject to the limitation set forth in Article 13.9(iv), commencing on
the effective date of termination and ending on the later of (A) fifteen
(15) years following Launch of the Product in such Country, and (B) such
date the Product is no longer
74
embraced within any Valid Claim under Organon Patent Rights in such
Country (assuming all of the defined terms and related provisions used in
this clause (y) survived termination of this Agreement); and (z) shall
remain due and owing without regard to the expiration of the
Post-Termination Period referred to in clause (y) of this sentence.
13.10 Survival of Rights and Obligations upon Termination or Expiration.
Upon expiration or termination of this Agreement, the rights and obligations of
the Parties hereunder shall cease, except as follows:
(i) The obligations set forth in Article 14 (Confidentiality)
shall survive for the period provided therein;
(ii) The obligations set forth in Article 11 (Intellectual
Property), Article 12 (Claims), Article 13 (Term and Termination) and
Article 15 (Dispute Resolution) shall survive without limitation.
(iii) The Parties shall not be relieved of any obligations accruing
prior to such applicable expiration or termination under this Agreement
(including without limitation all payment obligations which relate to all
periods on or prior to such expiration or termination), other than as set
forth in Article 8; and
(iv) The terminated Party under this Article 13 shall be obligated
to pay any amounts otherwise reimbursable or due to the other Party under
this Agreement in accordance with the terms hereof, including, without
limitation, pursuant to the then most current, as applicable Development
Plan or Global Marketing Plan, but only to the extent such amounts were
actually incurred or accrued by either Party under any Third Party
contract arising in accordance with the terms of such Third Party
contract prior to the date of the notice of termination. The terminated
Party under this Article 13 shall, at the other Party's expense, use its
reasonable efforts to assist in the transition of any activities or
obligations which were being performed by such Party to the other Party
or its designee.
(v) Upon termination of this Agreement by Pfizer pursuant to
Article 13.3, 13.4 or 13.5, the license and the other rights granted to it
under this Agreement shall terminate and it shall have no further right to
develop, use, sell, offer for sale, import and have imported Products in
the Territory. In such case, where applicable the Regulatory Filings
and/or Regulatory Approvals shall be assigned and transferred promptly by
Pfizer to Organon or any other party designated by Organon. This transfer
upon termination shall be arranged promptly, but in any event within one
hundred and eighty (180) days after termination.
(vi) Upon termination of this Agreement, Pfizer shall assign, and
Organon shall accept assignment of, all of Pfizer's rights and obligations
under any tolling or similar agreement between Pfizer or its Affiliate and
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION] or its Affiliate, regarding the
manufacture of the Product, and Organon shall purchase from Pfizer, at
Pfizer's book value, any equipment or other similar items purchased by
Pfizer directly in connection with Pfizer's or its Affiliate's obligations
under the Production Agreements installed and primarily used in the
manufacture of the Compound and/or Product.
13.11 Consequences of a Change in Control.
(i) (a) If at any time during any Term of this Agreement, there
shall occur a Change in Control with respect to Organon, then, within
forty-five (45) days after the closing or other effective date of such
event Pfizer may by written notice delivered to Organon elect to cause a
valuation of the entire interests, rights and obligations of Pfizer under
this Agreement but
75
excluding in all cases the Excepted Rights (the "Pfizer Interest") and
the entire interests, rights and obligations of Organon under this
Agreement but excluding in all cases the Excepted Rights (the "Organon
Interest") under the provisions of this Article 13.11. Within 15 days
following such valuation, Pfizer shall make the further election to do
any of the following: (1) sell to Organon the Pfizer Interest in
accordance with Article 13.11(ii), or (2) purchase the Organon Interest
in accordance with Article 13.11(ii), or (3) elect not to terminate this
Agreement (in which case, from and after the closing or other effective
date of the Change in Control, Pfizer shall have final decision-making
authority for all Consensus Matters with respect to manufacturing,
Product positioning and, prior to first filing an application for
Regulatory Approval in a Major Market Country, regulatory matters) or (4)
terminate this Agreement in accordance with Article 13.4.
(b) If at any time during the Term of this Agreement, there
shall occur a Change in Control with respect to Pfizer, then within
forty-five (45) days after the closing or other effective date of such
event Organon may by written notice delivered to Pfizer elect to cause a
valuation of the entire interests, rights and obligations of the "Organon
Interest" and the Pfizer Interest under the provisions of Article
13.11(ii). Within 15 days following such valuation, Organon shall make
the further election to do any of the following: (1) sell to Pfizer the
Organon Interest in accordance with Article 13.11(ii) or (2) purchase the
Pfizer Interest in accordance with Article 13.11(ii) or (3) elect not to
terminate this Agreement (in which case, from and after the closing or
other effective date of the Change in Control, Organon shall have final
decision-making authority for all Consensus Matters with respect to
manufacturing, Product positioning and, prior to first filing an
application for Regulatory Approval in a Major Market Country, regulatory
matters) or (4) terminate this Agreement in accordance with Article 13.4.
(ii) (a) The price (the "Organon Price" and the "Pfizer Price",
respectively) to be paid to purchase the Organon Interest or the Pfizer
Interest, as the case may be, under this Agreement, shall be conclusively
determined by two internationally recognized investment banking firms,
one of which shall be retained and paid by Organon and one of which shall
be retained and paid by Pfizer; provided that, if either Party fails to
deliver notice to the other Party of its selection of an investment
banking firm within twenty (20) days after notice by the other Party that
it has selected an investment banking firm (which notice shall identify
such firm), the determination shall be rendered by the single investment
banking firm so selected (whose fees, in such case, shall be borne
equally by the Parties). Organon and Pfizer shall promptly notify each
other of its respective selection. The investment banking firms selected
in accordance with the foregoing procedure shall each independently
determine the fair market value of the Organon Interest and the Pfizer
Interest as contained in written reports prepared in accordance with
Article 13.11 and shall submit their determinations of such value to
Organon and Pfizer within thirty (30) days after their selection, which
value shall be an amount that, on the basis of market and other
conditions prevailing at such time, could reasonably be expected to be
paid therefor by a Third Party in an arm's-length transaction, assuming
that the buyer and seller are under no compulsion to buy or sell; it
being further understood and agreed that the Organon Price and the Pfizer
Price shall be the same except for differences resulting from the ability
of Pfizer to commercialize the Product in Pfizer Exclusive Countries and
resulting from the ability of Organon to commercialize the Product in the
Organon Exclusive Countries .
(b) The Organon Price or the Pfizer Price, as the case may
be, shall be the amount equal to the sum of such fair market values for
the Organon Interest or the Pfizer Interest, respectively, determined by
each investment banking firm divided by two (2) or if only one investment
banking firm is involved as contemplated above, such individual fair
market values, except that if there is more than a ten percent (10%)
difference between such values for either the Organon Interest or the
Pfizer Interest, as applicable, a third investment banking firm (which is
independent of both Organon and Pfizer and has not been retained by
either Pfizer or Organon or any of their respective Affiliates as a
financial advisor within the two (2) prior years) selected by the first
two investment banking firms shall determine such fair market value by
selecting one (but only one (1)) of the two (2) pairs of values
previously determined by the first two investment
76
banking firms pursuant to this Article 13.11(ii). The cost of such third
investment banking firm shall be borne one-half by Organon and one-half
by Pfizer.
(iii) Any purchase and sale of an Organon Interest or Pfizer
Interest pursuant to this Article 13.11 shall be transferred free and
clear of all liens and other encumbrances and shall be consummated at
closing at the principal offices of Pfizer, in the case of an event under
Article 13.11(i)(a), or Organon, in the case of an event under Article
13.11(i)(b), on a business day within forty-five (45) days following the
last determination of the Organon Price and the Pfizer Price, as the case
may be, and upon at least 5 business days' prior notice by Pfizer or
Organon, as the case may be, to the other Party; provided that such
period shall be extended for ninety (90) additional days, or such shorter
period of time, as shall be necessary in order to obtain requisite
governmental or regulatory approvals with respect to such transaction.
At such closing, the buying Party shall pay the selling Party the Organon
Price or the Pfizer Price, as the case may be, by wire transfer of
immediately available funds.
(iv) Upon the closing of the transactions contemplated by this
Article 13.11, the Parties shall use their respective commercially
reasonable efforts to perform such matters and to execute such other
documents as are necessary to transfer all of the Organon Interest or
Pfizer Interest, as the case may be, to (x) the buying Party in order to
ensure that the buying Party or its designee shall be able to enjoy the
benefits contemplated by this Agreement, and (y) the selling Party in
order to release the selling Party from all obligations under the
Agreement effective as of the time of such sale (other than with respect
to any obligations under this Agreement then due and owing and other than
with respect to all obligations, whether or not due and owing, pursuant
to Article 12, all of which shall remain obligations of the selling
Party). Pfizer agrees that, if it is the buyer of the Organon Interest,
Pfizer shall not for a period of eighteen months following any such
purchase terminate any of the manufacturing activities for which Organon
has contracted Diosynth to perform in accordance with the terms of the
Alliance Agreements. As used herein, "Excepted Rights" means any rights
of any of the Parties to receive payments under this Agreement
immediately prior to the date of any closing contemplated by this Article
13.11 and shall, in all events, exclude all intellectual property and
other rights which relate to Geodon and any changes to or improvements
thereon.
13.12 Standstill. Pfizer hereby agrees that, during the Standstill
Period, unless the restrictions set forth in this Article 13.12 have been
specifically waived in writing by Organon, Pfizer shall not (and shall cause
its direct and indirect subsidiaries not to):
(i) acquire or agree or make any public announcement to acquire,
directly or indirectly, by purchase or otherwise, ownership (including
beneficial ownership) of (a) more than five (5%) percent of the
outstanding voting securities, or direct or indirect rights or options to
acquire more than five (5%) percent of the outstanding voting securities,
of Organon or any successor, or (b) more than five (5%) percent of the
outstanding voting securities, or direct or indirect rights or options to
acquire more than five (5%) percent of the outstanding voting securities,
of ▇▇▇▇ ▇▇▇▇▇ ▇.▇. for so long as ▇▇▇▇ ▇▇▇▇▇ ▇.▇. is a Parent of
Organon, or (c) all or substantially all of the assets of Organon or any
successor (other than with respect to the matters contemplated by this
Agreement); or
(ii) engage in any "solicitation" (as soliciting party) of
"proxies" (as such terms are used in the proxy rules of the Securities
and Exchange Commission) or consent to vote any voting securities of ▇▇▇▇
▇▇▇▇▇ ▇.▇. or, commencing at such time as ▇▇▇▇ ▇▇▇▇▇ ▇.▇. is no longer
the Parent of Organon, Organon or any successor; or
(iii) submit a proposal for, or offer of (with or without
conditions), any extraordinary transaction involving all or substantially
all of the assets of Organon or ▇▇▇▇ ▇▇▇▇▇ ▇.▇., other
77
than pursuant to a confidential communication to management or the Board
of Management of ▇▇▇▇ ▇▇▇▇▇ ▇.▇.; or
(iv) make a public announcement with respect to any of the
foregoing; or
(v) form, join or in any way participate in a "group" (as defined
under the ▇▇▇▇ ▇▇▇) with respect to any acquisition by any such person of
securities of Organon or enter into any discussions or arrangements with
any Third Party with respect to any of the foregoing prohibited matters.
(vi) Notwithstanding the foregoing provisions of this Article
13.12, neither Pfizer nor any of its Affiliates will be subject to any of
the restrictions set forth above in this Article 13.12: (a) if Organon
or ▇▇▇▇ ▇▇▇▇▇ ▇.▇. announces publicly that it is seeking any purchaser
for a controlling interest in its business or enters into negotiations
for the sale of such controlling interest which negotiations are publicly
announced, or (b) if it is publicly announced that (1) another person or
group has offered or proposed to acquire, directly or indirectly, by
purchase, tender offer, merger, consolidation or otherwise, a controlling
interest in Organon or ▇▇▇▇ ▇▇▇▇▇ ▇.▇. or, alternatively, assets
representing at least thirty (30%) percent of the market capitalization
of ▇▇▇▇ ▇▇▇▇▇ ▇.▇. or Organon, or (2) that Akzo Nobel or Organon has
entered into an agreement in principle or definitive agreement providing
for a transaction described in the immediately preceding clause (1), or
(c) if a party unaffiliated with ▇▇▇▇ ▇▇▇▇▇ ▇.▇. shall have publicly
announced an intention to seek a change of control of the governing board
of ▇▇▇▇ ▇▇▇▇▇ ▇.▇ through the solicitation of proxies or otherwise, or
(d) with respect to the matters described in the last sentence of this
Article 13.12, or (e) with respect to any acquisition of any assets or
securities of Organon or any Parent, as debtor, in a transaction subject
to the approval of the United States Bankruptcy Court pursuant to
proceedings under the United States Bankruptcy Code, or (f) with respect
to matters required or permitted by this Agreement. For the purposes of
this Article the term "controlling interest" shall mean the possession,
through ownership of voting securities or otherwise, of the ability to
direct the management and affairs of ▇▇▇▇ ▇▇▇▇▇ ▇.▇. or Organon, and,
without limitation, shall be conclusively presumed to be present in the
case of the direct or indirect ownership of a majority of the voting
securities and/or equity interests of ▇▇▇▇ ▇▇▇▇▇ ▇.▇. or Organon, as
applicable, without precluding the existence of control in the case of
the ownership of a lesser amount of such securities.
(vii) Notwithstanding anything to the contrary contained herein,
the prohibitions set forth in this Article 13.12 shall not apply to (a)
any investment in any securities of Organon or ▇▇▇▇ ▇▇▇▇▇ ▇.▇. by or on
behalf of any pension or employee benefit plan or trust, including
without limitation (1) any direct or indirect interests in portfolio
securities held by an investment company registered under the Investment
Company Act of 1940, as amended, or (2) interests in securities
comprising part of a mutual fund or broad based, publicly traded market
basket or index of stocks approved for such a plan or trust in which such
plan or trust invests; or (b) securities of Organon or ▇▇▇▇ ▇▇▇▇▇ ▇.▇.
held by a Person acquired by Pfizer on the date such Person first entered
into an agreement to be acquired by Pfizer or acquired after such Person
was acquired by Pfizer pursuant to an agreement requiring (but only to
the extent requiring) such Person to acquire such securities, which
agreement was in effect on the date such Person first entered into an
agreement to be acquired by Pfizer, or (c) any sale by Pfizer of
securities in a tender or exchange offer initiated by a Person other than
Pfizer and/or any vote securities owned by it in favor of or against any
such sale.
78
ARTICLE 14
CONFIDENTIALITY
14.1 Treatment of Confidential Information. Subject to the provisions of
Article 11, and further subject to the terms of this Article 14, during the
Term and for a period of five (5) years thereafter, each of the Parties shall
maintain Confidential Information of the other Party in confidence, and shall
not disclose, divulge or otherwise communicate such Confidential Information to
others (except for agents and advisors under obligations of confidentiality) or
use it for any purpose other than in connection with the development,
manufacture, marketing, promotion, distribution or sale of the Product or Xanax
and any improvements or changes thereto, or as otherwise permitted in this
Agreement and the other Alliance Agreements, and each Party agrees to exercise
reasonable efforts to prevent and restrain the unauthorized disclosure of such
Confidential Information by any of its directors, officers, employees,
consultants, subcontractors, licensees or agents, which reasonable efforts
shall be at least as diligent as those generally used by such Party in
protecting its own confidential and proprietary information.
14.2 Right to Disclose. To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under this
Agreement or any rights which survive termination or expiration hereof, each of
the Parties may consistent with its obligations under the Alliance Agreements
disclose Confidential Information to its Affiliates, consultants, outside
contractors, clinical investigators or other Third Parties on a need to know
basis and on the condition that such entities or persons agree in writing:
(i) to keep the Confidential Information confidential for the
same time periods and to a comparable extent as the disclosing Party is
required to keep the Confidential Information confidential; and
(ii) to use the Confidential Information only for such purposes as
the disclosing Party is entitled to use the Confidential Information.
14.3 Required Disclosures.
(i) To the extent, if any, that a Party concludes in good faith
that it is required to file or register this Agreement (or any other
Alliance Agreement) or a notification thereof with any Governmental
Authority, including without limitation the US Securities and Exchange
Commission, or the US Federal Trade Commission, in accordance with
applicable Laws, such Party may do so. The other Party shall cooperate
in such filing or notification and shall execute all documents reasonably
required in connection therewith. In such situation, the Parties will
request and will use their reasonable efforts to obtain confidential
treatment of all proprietary and other commercially-sensitive provisions
of the Agreement (or other Alliance Agreement, as applicable), all to the
extent permitted by Law. The Parties shall promptly inform each other as
to the activities or inquiries of any such Governmental Authority
relating to the Alliance Agreements, and shall cooperate to respond to
any request for further information therefrom.
(ii) Each Party or its Affiliates may disclose such Confidential
Information to Governmental Authorities to the extent that such
disclosure (a) is reasonably necessary to obtain Regulatory Approvals; or
(b) is otherwise legally required. Without limiting the generality of
the foregoing and notwithstanding anything in this Agreement or in any
other agreement to the contrary, each Party (and each employee,
representative, or other agent of each Party) may (but is not required
to) disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of the transaction contemplated by this
Agreement and the other agreements and instruments to be executed in
connection herewith, as of the earlier of (x) the date of public
79
announcement of discussions relating to the transactions contemplated by
this Agreement, (y) the date of public announcement of such transactions,
or (z) the date of the execution of the agreement to enter into such
transactions; provided, however, that such disclosure shall be prohibited
to the extent required to comply with any applicable federal or state
securities laws; and provided further that the confidentiality provisions
of this agreement and the other agreements and instruments relating to
the transactions between the Parties shall continue to apply to
information that is irrelevant to understanding the tax treatment or tax
structure of the transactions contemplated hereby and thereby (including,
without limitation, the names and other identifying details of any Party
to this Agreement). The preceding sentences are intended to cause the
transaction contemplated herein to be treated as not having been offered
under conditions of confidentiality for purposes of Article 1.6011-
4(b)(3) (or any successor provision) of the Internal Revenue Code
("Code") and shall be construed in a manner consistent with such purpose.
Each Party recognizes that the privilege each has with respect to the
confidentiality of the transaction contemplated by this Agreement or the
confidentiality of a communication relating to such transaction,
including a confidential communication with its attorney or with a
federally authorized tax practitioner under Article 7252 of the Code, is
not intended to be waived by the foregoing.
14.4 Return of Confidential Information. Upon any termination of this
Agreement and the other Alliance Agreements, each Party shall promptly return
to the other Party all written Confidential Information, and all copies
thereof, of such other Party, except that each Party may retain one copy of
such Confidential Information solely to discern its continuing obligations
under this Article 14.
ARTICLE 15
DISPUTE RESOLUTION
15.1 Governing Law. The validity, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive
laws of the State of New York with regard to principles of conflict of laws.
15.2 Negotiation. The Parties will attempt in good faith to resolve
promptly any dispute arising out of or relating to this Agreement by
negotiation. If the matter can not be resolved in the normal course of business
any interested Party may give the other Party written notice of any such
dispute not resolved, after which the dispute will be referred to more senior
executives of both Parties, who will likewise attempt to resolve the dispute.
If the dispute has not been resolved by negotiation within thirty (30) days of
the disputing Party's written notice, or if the Parties fail to meet within
twenty (20) days as from the date of such notice, either Party may commence a
mediation pursuant to Article 15.3 below.
15.3 Mediation. If the dispute has not been resolved by negotiation
within thirty (30) days of the disputing Party's written notice, or if the
Parties fail to meet within twenty (20) days as from such notice, the Parties
will attempt to settle the dispute by non- binding mediation under the
supervision of and in accordance with the CPR Model Mediation Procedures.
Unless otherwise agreed to by the Parties, the CPR will appoint an independent
mediator. The language of mediation will be English and the mediation will take
place in New York, New York. If within thirty (30) days of the commencement of
mediation in accordance with the above procedures, the Parties have not
resolved their dispute, then either Party may commence a Proceeding pursuant to
Article 15.4 below.
15.4 Jurisdiction. With respect to any Proceeding, each Party hereto
irrevocably (i) subject to the final sentence of this Article 15.4, agrees and
consents to be subject to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or any New York state
court sitting in New York, New York, United States of America (any such court,
the "New York Court") and (ii) waives any objection which it may have at any
time to the laying of venue of any Proceeding brought in any such New York
Court and waives any claim that such Proceeding has been brought in an
inconvenient forum
80
and further waives the right to object, with respect to such Proceeding, that
such Court does not have any jurisdiction over such Party. Notwithstanding the
foregoing: (i) each Party shall be entitled to seek injunctive relief and
specific performance (including but not limited to any relief or recovery under
any Alliance Agreement) in any court in the world, and (ii) if the Court
adjudicating such Proceeding refuses for any reason to exercise jurisdiction
over the dispute, either Party shall be free to bring such Proceeding in any
other Court in New York State as provided above and, in the event such other
Court(s) refuse for any reason to exercise jurisdiction over the dispute,
either Party shall be free to bring such Proceeding in any other court. Organon
shall at all times maintain an agent for service of process and any other
documents in proceedings in New York, New York, and hereby designates CT
Corporation System, with offices located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as its agent. Organon shall promptly provide Pfizer with
written notice of any change in the identity of such agent. Any pleading,
judgment or other notice of legal process shall be sufficiently served on
Organon if delivered to its agent at its then-current address.
ARTICLE 16
MISCELLANEOUS
16.1 Force Majeure. Neither Party shall be held liable or responsible to
the other Party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any Term, other than
an obligation to make payments hereunder, when such failure or delay is caused
by or results from fire, floods, embargoes, government regulations,
prohibitions or interventions, war, acts of war (whether war be declared or
not), insurrections, riots, civil commotions, acts of God or any other cause
beyond the reasonable control of the affected Party to anticipate, prevent,
avoid or mitigate (a "Force Majeure Event"); provided, however, that any
failure or delay in fulfilling a term shall not be considered a result of a
Force Majeure Event if it arises from a failure of Pfizer or Organon to comply
with applicable laws and regulations.
16.2 Further Assurances. Each Party hereto agrees to perform such acts,
execute such further instruments, documents or certificates, and provide such
cooperation in proceedings and actions as may be reasonably requested by the
other Party in order to carry out the intent and purpose of this Agreement,
including without limitation the registration or recordation of the rights
granted hereunder.
16.3 Notices. Any notice required or permitted to be given hereunder
shall be in writing and shall be deemed to have been properly given if
delivered in person, or if mailed by registered or certified mail (return
receipt requested) postage prepaid, or by a nationally recognized overnight
courier, or by facsimile (and promptly confirmed by registered, certified mail
or overnight courier), to the addresses given below or such other addresses as
may be designated in writing by the Parties from time to time during the Term.
Any notice sent by registered, certified mail or overnight courier as aforesaid
shall be deemed to have been given when mailed.
In the case of Organon: With a required copy to:
Organon (Ireland) Ltd. Akzo Nobel Legal Affairs - Pharma
Churerstrasse 160b P.O. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ The Netherlands
Attention: Director Facsimile: 41 2 666 373
Facsimile: 41 55 415 1974
81
In the case of Pfizer: With a required copy to:
Pfizer Inc.
Pfizer Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Senior Vice President and General Counsel
Attention: President, Pfizer Global Pharmaceuticals
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.:▇▇▇-▇▇▇-▇▇▇▇
16.5 Assignment. This Agreement may not be assigned or otherwise
transferred by either Party without the written consent of the other Party,
provided, however, that either Party may, without such consent, assign this
Agreement, in whole or in part:
(i) if such Party or its Affiliates is required to, or reasonably
believes that it will be required to, divest either the Product or a
competing product in order to comply with the Law or the order of any
Governmental Authority as a result of a merger or acquisition, provided,
however, that, if permitted by the applicable Governmental Authority, the
other Party shall be invited to submit a bid for the rights to be
assigned;
(ii) to any of its Affiliates (provided the assigning Party
continues at all times to remain liable for all obligations of such Party
under this Agreement without regard to such assignment);
(iii) in connection with the transfer or sale of all or
substantially all of its business related to this Agreement; or
(iv) in accordance with Article 13.11.
Any purported assignment in violation of this Article 16.5 shall be void.
Any permitted assignee shall assume all obligations of its assignor under
this Agreement.
16.6 Non-Solicitation. During the Term, neither Party shall, directly or
indirectly, recruit or solicit any employee of the other Party (including
employee's of Affiliates) with whom such Party has come into contact or
interacted for the purposes of performing this Agreement, without the prior
consent of the other Party, except pursuant to general solicitation not
targeted at such employees.
16.7 Amendment. The Parties hereto may amend, modify or alter any of the
provisions of this Agreement, but only by a written instrument duly executed by
both Parties hereto.
16.8 Entire Agreement. This Agreement, along with the other Alliance
Agreements, contains the entire understanding of the Parties with respect to
the subject matter hereof.
16.9 Waiver. The failure of a Party to enforce at any time for any period
any of the provisions hereof shall not be construed as a waiver of such
provisions or of the rights of such Party thereafter to enforce each such
provisions.
16.10 No Implied Licenses. Except as expressly and specifically provided
under this Agreement, the Parties agree that neither Party is granted any
implied rights to or under any of the other Party's current or future patents,
trade secrets, copyrights, moral rights, trade or service marks, trade dress,
or any other intellectual property rights.
82
16.11 Independent Contractors. The Parties agree that their relationship
established by this Agreement is that of independent contractors. Furthermore,
the Parties agree that this Agreement does not, is not intended to, and shall
not be construed to, establish a partnership or joint venture, and nor shall
this Agreement create or establish an employment, agency or any other
relationship. Except as may be specifically provided herein, neither Party
shall have any right, power or authority, nor shall they represent themselves
as having any authority to assume, create or incur any expense, liability or
obligation, express or implied, on behalf of the other Party, or otherwise act
as an agent for the other Party for any purpose.
16.12 Compliance with Law and Severability. It is the intention of the
Parties in establishing their collaboration pursuant to this Agreement to
comply with all applicable laws and regulations, including all competition
laws. If during the Term there are any changes in factual circumstances of
market conditions affecting the legality of this Agreement or to any applicable
law or regulation (including the expiry or withdrawal of any exemption or
approval) then on written notice from one Party to the other the Parties shall
review their collaboration pursuant to this Agreement. Such review shall
consider such changes as may be required to the structure or operation of the
collaboration, including the terms of this Agreement, which shall then be
negotiated in good faith with the objective of preserving, so far as legally
permissible, the terms set out herein and, in relation to any changes, of
ensuring that the commercial benefits and detriments arising from the required
changes are shared equally between the Parties. Neither Party shall seek to
exploit the requirement to make any such changes to its own commercial
advantage. In addition, if any provision of this Agreement is held
unenforceable by a court or tribunal of competent jurisdiction in a final
unappealable order because it is invalid or conflicts with any Law of any
relevant jurisdiction, then such provision shall be inoperative in such
jurisdiction and the remainder of this Agreement shall remain binding upon the
Parties hereto.
16.13 Registration and Filing of the Agreement. To the extent, if any,
that a Party concludes in good faith that it is required under applicable Laws
to file or register this Agreement or a notification thereof with any
Governmental Authority, including without limitation the US Securities and
Exchange Commission, or the US Federal Trade Commission, in accordance with
applicable Laws, such Party may do so and shall provide the other Party to this
Agreement with a written copy of all proposed filings or registrations to allow
for a reasonably sufficient time for review and comment by the other Party. The
other Party shall cooperate in such filing or notification and shall execute
all documents reasonably required in connection therewith. In such situation,
the Parties will request confidential treatment of sensitive provisions of the
Agreement, to the extent permitted by Law. The Parties shall promptly inform
each other as to the activities or inquiries of any such Governmental Authority
relating to this Agreement, and shall cooperate to respond to any request for
further information therefrom.
16.14 Announcements.
(i) Coordination. The Parties agree on the importance of
coordinating their public announcements respecting the Alliance
Agreements and the subject matter of such agreements. Organon and Pfizer
will, from time to time, and at the request of the other Party discuss
and agree on the general information content relating to this Agreement
and the License Agreement which may be publicly disclosed.
(ii) Announcements. The joint press release announcing the
signing of the transactions contemplated by this Agreement and the
Alliance Agreements is attached hereto as Schedule 16.14 and will be
promptly disseminated following signing.
(iii) The above-referenced releases may be Organon releases or
joint Organon/Pfizer releases at Pfizer's option, and the Parties agree
to jointly draft and agree on the content of such disclosure. Except as
otherwise provided in this Article 16.14, neither Party will make any
public announcement regarding the fact of execution of this Agreement by
the Parties hereof, the terms of or events related this Agreement, and/or
the collaboration without the prior consent of the
83
other. Notwithstanding the foregoing, a Party may make any disclosure
where in a Party's reasonable legal opinion it is required by applicable
Law or applicable stock exchange regulation or order or other ruling of a
competent court, provided that prior to such disclosure, the disclosing
Party shall use reasonable efforts to notify the other Party prior to
making such disclosure, and will provide the other Party with an
opportunity to review and comment prior to release, provided the
disclosing Party shall not be required to delay such disclosures by more
than forty-eight (48) hours to receive and discuss such comments, so long
as the disclosing Party has provided to the other Party as much advance
notice as is reasonably practicable under the circumstances. Each Party
agrees that it shall reasonably cooperate with the other with respect to
all disclosures regarding this Agreement to the Securities Exchange
Commission and any other governmental or regulatory agencies, including
requests for confidential treatment of proprietary information of either
Party included in any such disclosure.
16.15 HSR Filings. Each of Organon and Pfizer shall as promptly as
possible file with the FTC and the Antitrust Division of the DOJ, any HSR
Filing required of it under the HSR Act with respect to the transactions
contemplated by this Agreement, and shall each use commercially reasonable
efforts to make such filing within four (4) weeks of the date of execution of
this Agreement. The Parties shall cooperate with one another to the extent
necessary in the preparation of any HSR Filing required to be filed under the
HSR Act. Each Party shall be responsible for its own costs, expenses, and
filing fees associated with any HSR Filing.
16.16 HSR Cooperation; Further Assurances. Organon and Pfizer agree, and
shall cause each of their respective Affiliates, to cooperate and to use their
respective commercially reasonable efforts to obtain any HSR Clearance required
for the consummation of the transactions contemplated under this Agreement and
to respond to any government requests for information under the HSR Act. The
Parties will consult and cooperate with one another, and consider in good faith
the views of one another, in connection with any analyses, appearances,
presentations, memoranda, briefs, arguments, opinions and proposals made or
submitted by or on behalf of either Party in connection with proceedings under
or relating to the HSR Act. For the avoidance of doubt, it is agreed that
neither Party shall be obligated in any way to (i) sell, transfer or otherwise
dispose of (including without limitation by way on any "hold separate" or
similar arrangement) any asset or product or business, (ii) terminate any
contractual relationship, or (iii) amend, terminate or otherwise modify any
licenses or other intellectual property agreements, in order to obtain HSR
Clearance with respect to the transactions contemplated by this Agreement.
16.17 Activities Prior to the Effective Date. The Parties shall not
engage in any of the activities contemplated by this Agreement, other than
seeking to obtain HSR Clearance, prior to the Effective Date.
16.18 Headings. The Article and Article headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
84
16.19 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date hereof.
ORGANON (IRELAND) LTD. PFIZER INC.
By : _____________________ By : ______________________
Name : _____________________ Name : ______________________
Title : _____________________ Title : ______________________
By : ______________________
Name : ______________________
Title : ______________________
85
SCHEDULE 1.2
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
Summary
Protocol Number [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]
Title
Objectives
Statistical Power
Registration Status
Methods
Major Inclusion Criteria [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]
Major Exclusion Criteria
Design
Duration of Treatment
Dosing regimen
Main Assessments
Reference Therapy
Main Outcome Variables
Main Safety Variables
Endpoints
Planning
Number of Subjects [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]
Study Duration
Expected Start Preparatory
Work
Expected Initiation
Expected Completion
Country
Number of Centers
Subjects per Center
Interim Analysis Required
Special Remarks
Satisfaction of Endpoints for the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] means:
1. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]
2. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]
3. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]
86
SCHEDULE 1.15
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
Summary
Protocol Number [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELYE
TO THE SECURITIES AND EXCHANG COMMISSION]
Title
Objectives
Sample size
Registration Status
Methods [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANG COMMISSION]
Major Inclusion Criteria [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANG COMMISSION]
Major Exclusion Criteria
Design
Duration of Treatment
Dosing regimen
Main Assessments
Reference Therapy
Main Outcome Variables
Main Safety Variables
Endpoints
Planning
Number of Subjects [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION]
Study Duration
Expected Start Preparatory
Work
Expected Initiation
Expected Completion
Country
Number of Centers
Subjects per Center
Interim Analysis Required
Special Remarks
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
87
SCHEDULE 1.26
DESCRIPTION OF COMPOUND
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
88
SCHEDULE 1.33
CO-PROMOTION COUNTRIES
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
Latin America
Argentina
Brazil
Chile
Columbia
Ecuador
Mexico
Venezuela
Peru
Dominican Republic
Costa Rica
Guatemala
Honduras
Nicaragua
Panama
El Salvador
Europe
Belgium
Luxembourg
Germany
Netherlands
United Kingdom
Ireland
Austria
Denmark
Finland
Norway
Sweden
Switzerland
France
Italy (co-marketing)
Spain
Turkey
Greece
Portugal
Russia
Czech Republic
Slovak Republic
Hungary
Poland
Romania
Ukraine
Bulgaria
Croatia
▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇
Lithuania
Macedonia
Slovenia
Serbia-Montenegro
Armenia
Belarus
Georgia
Moldavia
Kazakhstan
Kyrgystan
Tajikistan
Turkmenistan
Uzbekistan
Albania
Middle East/Africa
Morocco
Tunisia
Algeria
Egypt
South Africa
Israel
Ivory Coast
Cameroon
Gabon
Congo
Senegal
Bahrain
Iran
Iraq
Jordan
Kuwait
Lebanon
Libya
Oman
Qatar
Saudi Arabia
Sudan
Syria
United Arab Emirates
Yemen
Palestine
Asia
Japan
Australia
China
India
Indonesia
Bangladesh
Hong Kong
South Korea
Malaysia
Singapore
▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
New Zealand
Vietnam
North Korea
91
SCHEDULE 1.40
MINIMUM DETAIL REQUIREMENTS
-- In each Year of the Term in the US Territory, the Parties will perform, in
the aggregate, a minimum of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Details in
the US Territory.
-- With respect to each of the other Major Market Countries, the applicable
CCC will, at a date that is at least six (6) months prior to the
anticipated Launch of the Product in such Major Market Country, determine
a minimum Detail Requirement for the Term in such Major Market Country.
-- The minimum Detail Requirement for any Year that is not a full calendar
year shall be prorated by multiplying the figure set forth above by a
fraction, the numerator of which is the number of days between the date of
Launch and December 31, and the denominator of which is 365.
Each Party shall be responsible for [CONFIDENTIAL INFORMATION HAS BEEN OMITTED
AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]% of the
total Details in the US Territory during each Year of the Term.
92
SCHEDULE 1.94
ORGANON PATENT RIGHTS
Patent Series ref. 1994.070
Convention priority of EPO application no. 94200521 filed 2 March 1994
Country Application Number Patent Number
Australia 19478/95 692530
Austria 95912188.0 E 167057
Belgium 95912188.0 ▇▇▇▇▇▇▇
▇▇▇▇▇▇ PI 1100625.0 PI1100625.0
Canada 2182981
China 95191906.7 ZL95191906.7
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇/▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ 95912188.0 0746317
European Patent Convention (EP) 95912188.0 0746317
Finland ▇▇▇▇▇▇
▇▇▇▇▇▇ 95912188.0 0746317
Germany 95912188.0 69502939.8
Greece 980401974 3027796
Hong Kong 98109126.1 HK1008417
Hungary P9602383
Ireland 95912188.0 ▇▇▇▇▇▇▇
▇▇▇▇▇ 69698/BE/98 ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇/▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of 96/704774 0330942
Luxembourg 95912188.0 ▇▇▇▇▇▇▇
▇▇▇▇▇▇ 9603713 197583
Monaco 95912188.0 0746317
The Netherlands 95912188.0 0746317
New Zealand 282394 282394
Norway 963639 308772
Poland P316080 180465
Portugal 95912188.0 0746317
Russian Federation 1996/120090 2139051
Spain 95912188.0 ▇▇▇▇▇▇▇
▇▇▇▇▇▇ 95912188.0 0746317
Switzerland 95912188.0 0746317
United Kingdom 95912188.0 0746317
United States of America 08/693064 5763476
Patent Series ref. 2003.789
93
Convention priority of (1) EPO application no. 03076062.3 filed 11 April 2003
and (2) EPO application no. 03102677.6 filed August 29, 2003
Country Application Number Patent Number
European Patent Office 03076062.3
European Patent Office 03102677.6
Patent Series ref. 2003.793
Convention priority of EPO application no. 03101721.3 filed 12 June 2003
Country Application Number Patent Number
European Patent Office 03101721.3
Patent Series ref. 2003.798
Convention priority of EPO application no. 03102124.9 filed 11 July 2003
Country Application Number Patent Number
European Patent Office 03102124.9
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]/Organon contract reference 9
Convention priority US 92 985040 filed 1 Dec 1992
Country Application Number Patent Number*
Australia 94 56545 677030B2
Brazil 9305805A
Canada 93 2129254AA
China 93 121709 1066937B
European Patent Convention (EP) EP94203739 0646367B1
EP94902027 0710101B1
Finland 943537 105149B1
France EP94203739 0646367B1
EP94902027 0710101B1
Germany EP94203739 69311109C0
EP94902027 69318429T2
Greece EP94203739 3023853T3
Hong Kong 98 106782 1007489A1
98 114532 1013245A1
Hungary 9402091 216509B
Ireland EP94902027 EP 0646367B1
Italy EP94902027 EP 0646367B1
EP94203739 EP 0710101B1
Japan WO/GB9302459 ▇▇▇▇▇▇▇▇▇
95 85912 2796578B2
▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of 9472574 227315B
Netherlands EP94203739 EP 0710101B1
New Zealand 93 258600 258600A
Norway 942805 303161B1
Spain EP94203739 2102143T3
EP94902027 2118368T3
Switzerland EP94902027 EP 0710101B1
EP94203739 EP 0646367B1
United Kingdom EP94902027 EP 0646367B1
EP94203739 EP 0710101B1
United States of America 92 985040 5343672A
95 448469 5729958A
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]/Organon contract reference 11
Convention priority US 93 104486 filed 1 Oct 1993, except for last mentioned US
patent.
Country Application Number Patent Number*
Australia 94 78014A1
Austria EP 94928661 197542E
Canada 2149659AA
European Patent Convention (EP) EP 94928661 721325B1
Switzerland EP 94928661 721325B1
Ireland EP 94928661 721325B1
Germany EP 94928661 69426305T2
Italy EP 94928661 721325B1
Spain EP 94928661 2152991T3
Denmark EP 94928661 ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ EP 94928661 721325B1
Portugal EP 94928661 721325T
United Kingdom EP 94928661 721325B1
Greece EP 94928661 ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ 510851 3155554B2
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America 2000 541156 6212791BA
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]/Organon contract reference 10
Convention priority US 92 954888 filed 30 Sept 1992
Country Application Number Patent Number*
Japan WO/GB 9302034 3030422B2
United States of America 94 198644 5358118A
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]/Organon contract reference 7
Convention priority US 90 615489 filed 19 Nov ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇*
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America 90 615489 5046618A
95
SCHEDULE 1.114
PRODUCT PROFILE
Asenapine Product Profile
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION (5 pages have been omitted)]
96
SCHEDULE 1.133
ROYALTIES TO [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
Pursuant to Article 8 of the [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] Agreement,
Organon owes the following royalties to [CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]:
(a) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]%) on net sales subject to
royalty on annual net sales that are less than USD [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION];
(b) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]%) on net sales subject to
royalty on annual net sales that are equal to or greater than USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] but less than USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION];
(c) [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION] percent ([CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]%) on net sales subject to
royalty on annual net sales that are equal to or greater than USD
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY
TO THE SECURITIES AND EXCHANGE COMMISSION].
Organon may credit [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] percent
([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]%) of any license fees and
milestone payments ([CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]) paid to
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION] from the royalties payable.
97
SCHEDULE 3.1(VIII)
THIRD PARTY DEVELOPMENT AND MANUFACTURE AGREEMENTS
-- License and Development Agreement between [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] and N.V. Organon dated March 27, 1997.
98
SCHEDULE 4.1
DEVELOPMENT PLAN
(See Attached)
99
SCHEDULE 4.8
METHODOLOGY FOR TRACKING SALES FOR NEW INDICATIONS
100
SCHEDULE 6.3
MARKETING COSTS
All amounts are expressed in Millions of US dollars.
US Territory
Pre-Launch* First Year Second Year Third Year Fourth Year & Subsequent Years
Fifth Year
Minimum[CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL
INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS
BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND
FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT-
▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT-
IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE
COMMISSION] COMMISSION] COMMISSION] COMMISSION] COMMISSION] COMMISSION]
Maximum[CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL
INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS
BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND
FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT-
▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT-
IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE
COMMISSION] COMMISSION] COMMISSION] COMMISSION] COMMISSION] COMMISSION]
Key EU Countries
101
Pre-Launch* First Year Second Year Third Year Fourth Year & Subsequent Years
Fifth Year
Minimum[CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL
INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS
BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND
FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT-
▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT-
IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE
COMMISSION] COMMISSION] COMMISSION] COMMISSION] COMMISSION] COMMISSION]
Maximum[CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL
INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS INFORMATION HAS
BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND BEEN OMITTED AND
FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT- FURNISHED SEPARAT-
▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT- ▇▇▇ TO THE SECURIT-
IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE IES AND EXCHANGE
COMMISSION] COMMISSION] COMMISSION] COMMISSION] COMMISSION] COMMISSION]
In the event that the Parties are unable to agree upon budgeted Marketing Costs
in the Global Marketing Plan or Country Marketing Plan for a particular Year,
then the applicable Minimum Marketing Costs for such Year shall apply.
For the US Territory, "[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]" means that the minimum
and maximum Marketing Costs are adjusted annually, with the first such
adjustment taking place for Year 4, according to changes in the Consumer Price
Index for All Urban Consumers (CPI-U): U.S. city average, for the preceding
Year.
For the Key EU Countries, "[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]" means the
United Kingdom, "Retail Price Index" as quoted in The Financial Times.
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
102
SCHEDULE 6.4
REDUCTION OF DETAILING REQUIREMENTS AND MARKETING COST OBLIGATIONS
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
103
SCHEDULE 9.8
CURRENT MANUFACTURING PROCESS
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
104
SCHEDULE 13.5(ii)(a)
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION]
105
SCHEDULE 16.14
JOINT PRESS RELEASE
DRAFT
For immediate release:
October XX, 2003
PFIZER AND AKZO NOBEL'S ORGANON ENTER GLOBAL COLLABORATION
FOR POTENTIAL NEW PSYCHOTROPIC TREATMENT
New York, and Arnhem, THE NETHERLANDS Oct. XX -- Pfizer Inc and Organon, the
human pharmaceutical business unit of Akzo Nobel, today announced they have
entered into a global agreement for the exclusive worldwide development and
commercialization of Organon's asenapine, a potential new psychotropic
medication for the treatment of a variety of disorders that is beginning Phase
III trials in schizophrenia and bipolar disorder.
Under terms of the agreement, which is subject to government approval, the
companies will collaborate on the clinical development and manufacturing of
asenapine, and co-promote the product in the United States, European Union,
Japan and other markets. Pfizer will make an initial payment of $100 million
and up to $270 million in milestone payments contingent upon regulatory
approvals and launch of asenapine in the U.S., Europe and Japan as well as
attainment of certain agreed-upon sales levels. Further terms of the agreement
were not disclosed.
"Organon is excited about its partnership with Pfizer to develop and market
asenapine. Phase II clinical trials with asenapine have shown promising
results which could assist patients in treating their psychoses," said ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Organon International Board Member and President of Organon USA. "We
believe this collaboration will provide the appropriate development and
commercial resources necessary to serve the patient population who may benefit
from this treatment," said Toon Wilderbeek, Member of the Akzo Nobel Board of
Management.
"We are very pleased Organon chose Pfizer as its partner to advance the
development of asenapine, which has the potential to help patients live more
productive lives," said ▇▇▇▇▇ ▇▇▇▇▇, President, Pfizer Global Pharmaceuticals.
"As with most drugs in the neuroscience category,
106
psychotropic medications work for only about 70% of individual patients so new
treatments are always needed. We believe asenapine will present additional
options for patients and physicians in the management of psychoses, allow us to
build upon Pfizer's expertise in this area and compliment our current
neuroscience portfolio."
Asenapine is a 5HT2/D2 antagonist that belongs to a class of medicines known as
atypical antipsychotics. These drugs act on both the 5HT2 and D2 receptors and
show superior tolerability and efficacy compared to older antipsychotic
medications that act mainly on D2 receptors. In early clinical studies,
asenapine was well-tolerated and showed statistically superior efficacy when
compared with placebo.
Akzo Nobel's human healthcare unit Organon, headquartered in Roseland, NJ USA,
is a renowned pharmaceutical company with a strong commitment to human health
care. The company develops and produces innovative prescription medicines for
gynecology, psychiatry, cardiovascular diseases, immunology and anesthesia.
Organon products are sold in over 100 countries, more than half of which have
an Organon subsidiary. The company currently employs approximately 13,000
people.
107