UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act Of 1934
Date of Report (Date of earliest event reported): August 17, 2009
BRISTOL-MYERS SQUIBB COMPANY
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 1-1136 | 22-079-0350 | ||
|
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
345 Park Avenue
New York, NY, 10154
(Address of Principal Executive Office)
Registrant’s telephone number, including area code: (212) 546-4000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 8.01. | Other Events. |
On August 17, 2009, in response to a comment from the staff of the Securities and Exchange Commission (the “Commission”), the Company filed material agreements relating to its alliance with sanofi-aventis regarding the codevelopment and cocommercialization of PLAVIX ® / ISCOVER ® (clopidogrel bisulfate) and its alliance with Otsuka Pharmaceutical Co., Ltd. regarding the codevelopment and cocommercialization of ABILIFY ® (aripiprazole).
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| 10.1 | Bylaws (Statuts) of Sanofi Pharma Bristol-Myers Squibb, a partnership (societe en nom collectif) organized under French law, dated as of June 6, 1997. English Translation. | |
| 10.2 | Internal Regulation (Reglement Interieur) of Sanofi Pharma Bristol-Myers Squibb dated as of June 6, 1997 and effective as of January 1, 1997. English Translation. † | |
| 10.3 | Partnership Agreement of Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership between Sanofi Pharmaceuticals, Inc. and Bristol-Myers Squibb Company Investco, Inc. dated as of January 1, 1997. † | |
| 10.4 | Territory A Alliance Support Agreement between Sanofi and Bristol-Myers Squibb Company dated as of January 1, 1997. † | |
| 10.5 | Amendment No. 1 to the Territory A Alliance Support Agreement between Sanofi-Synthelabo and Bristol-Myers Squibb Company dated as of October 17, 2001. † | |
| 10.6 | Territory B Alliance Support Agreement between Sanofi and Bristol-Myers Squibb Company dated as of January 1, 1997. † | |
| 10.7 | Amendment No. 1 to the Territory B Alliance Support Agreement between Sanofi-Synthelabo and Bristol-Myers Squibb Company dated as of October 17, 2001. † | |
| 10.8 | Clopidogrel Intellectual Property License and Supply Agreement between Sanofi and Sanofi Pharma Bristol-Myers Squibb dated as of January 1, 1997. † | |
| 10.9 | Clopidogrel Intellectual Property License and Supply Agreement between Sanofi and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership dated as of January 1, 1997. † | |
| 10.10 | Product Know-How License Agreement among Sanofi, Bristol-Myers Squibb Company and Sanofi Pharma Bristol-Myers Squibb dated as of January 1, 1997. † | |
| 10.11 | Product Know-How License Agreement among Sanofi, Bristol-Myers Squibb Company and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership dated as of January 1, 1997. † | |
| 10.12 | Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company dated as of October 23, 2001. † | |
| 10.13 | Amendment No. 3 to the Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company dated as of September 25, 2006. † | |
| 10.14 | Amendment No. 5 to the Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company effective as of April 4, 2009. † | |
| † | Confidential treatment has been requested for certain portions which are omitted in the copy of the exhibit electronically filed with the Commission. The omitted information has been filed separately with the Commission pursuant to the Company’s application for confidential treatment. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BRISTOL-MYERS SQUIBB COMPANY | ||||||||
| Dated: August 17, 2009 | By: | /s/ Sandra Leung | ||||||
| Name: | Sandra Leung | |||||||
| Title: |
Senior Vice President, General Counsel and Corporate Secretary |
|||||||
EXHIBIT INDEX
|
Exhibit No. |
Description |
|
| 10.1 | Bylaws (Statuts) of Sanofi Pharma Bristol-Myers Squibb, a partnership (societe en nom collectif) organized under French law, dated as of June 6, 1997. English Translation. | |
| 10.2 | Internal Regulation (Reglement Interieur) of Sanofi Pharma Bristol-Myers Squibb dated as of June 6, 1997 and effective as of January 1, 1997. English Translation. † | |
| 10.3 | Partnership Agreement of Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership between Sanofi Pharmaceuticals, Inc. and Bristol-Myers Squibb Company Investco, Inc. dated as of January 1, 1997. † | |
| 10.4 | Territory A Alliance Support Agreement between Sanofi and Bristol-Myers Squibb Company dated as of January 1, 1997. † | |
| 10.5 | Amendment No. 1 to the Territory A Alliance Support Agreement between Sanofi-Synthelabo and Bristol-Myers Squibb Company dated as of October 17, 2001. † | |
| 10.6 | Territory B Alliance Support Agreement between Sanofi and Bristol-Myers Squibb Company dated as of January 1, 1997. † | |
| 10.7 | Amendment No. 1 to the Territory B Alliance Support Agreement between Sanofi-Synthelabo and Bristol-Myers Squibb Company dated as of October 17, 2001. † | |
| 10.8 | Clopidogrel Intellectual Property License and Supply Agreement between Sanofi and Sanofi Pharma Bristol-Myers Squibb dated as of January 1, 1997. † | |
| 10.9 | Clopidogrel Intellectual Property License and Supply Agreement between Sanofi and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership dated as of January 1, 1997. † | |
| 10.10 | Product Know-How License Agreement among Sanofi, Bristol-Myers Squibb Company and Sanofi Pharma Bristol-Myers Squibb dated as of January 1, 1997. † | |
| 10.11 | Product Know-How License Agreement among Sanofi, Bristol-Myers Squibb Company and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership dated as of January 1, 1997. † | |
| 10.12 | Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company dated as of October 23, 2001. † | |
| 10.13 | Amendment No. 3 to the Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company dated as of September 25, 2006. † | |
| 10.14 | Amendment No. 5 to the Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company effective as of April 4, 2009. † | |
| † | Confidential treatment has been requested for certain portions which are omitted in the copy of the exhibit electronically filed with the Commission. The omitted information has been filed separately with the Commission pursuant to the Company’s application for confidential treatment. |
Exhibit 10.1
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
SANOFI PHARMA BRISTOL-MYERS SQUIBB
Commercial partnership with capital of 50,000 francs
Headquarters: 32-34, rue Marbeuf, 75008 Paris, France
Register of Commerce and Companies of Paris B 408 017 929
BYLAWS
Updated June 6, 1997
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
| ARTICLE 1 | ||||
| CORPORATE FORM | ||||
| ARTICLE 1 Corporate Form | 1 | |||
| ARTICLE 2 | ||||
| CORPORATE NAME | ||||
| ARTICLE 2 Corporate Name | 1 | |||
| ARTICLE 3 | ||||
| CORPORATE PURPOSE | ||||
| ARTICLE 3 Corporate Purpose | 1 | |||
| ARTICLE 4 | ||||
| HEADQUARTERS | ||||
| ARTICLE 4 Headquarters | 2 | |||
| ARTICLE 5 | ||||
| TERMS | ||||
| ARTICLE 5 Terms | 2 | |||
| ARTICLE 6 | ||||
| DEFINITIONS | ||||
| ARTICLE 6.1 Terms Defined | 2 | |||
| ARTICLE 6.2 Additional Terms Defined | 3 | |||
| ARTICLE 7 | ||||
| CONTRIBUTIONS – HOLDINGS | ||||
| ARTICLE 7.1 Initial Capital Contributions | 3 | |||
| ARTICLE 7.2 Holdings: Capital | 3 | |||
| ARTICLE 7.3 Capital Increase | 4 | |||
| ARTICLE 8 | ||||
| REPRESENTATION OF THE SHARES – | ||||
| INDIVISIBILITY RIGHTS AND OBLIGATIONS OF THE PARTNERS | ||||
| ARTICLE 8.1 Representation of the shares | 4 | |||
| ARTICLE 8.2 Indivisibility of the shares | 4 | |||
| ARTICLE 8.3 Rights and obligations of the Partners | 4 | |||
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
ii
| ARTICLE 9 | ||||
| DISTRIBUTIONS TO THE PARTNERS | ||||
| ARTICLE 9 Distributions to the Partners | 4 | |||
| ARTICLE 10 | ||||
|
ACCOUNTING – AUDITORS – CORPORATE ACCOUNTS – APPROVAL OF THE ANNUAL ACCOUNTS |
||||
| ARTICLE 10.1 Books and Records | 4 | |||
| ARTICLE 10.2 Place and Right of Inspection | 5 | |||
| ARTICLE 10.3 Fiscal Year | 5 | |||
| ARTICLE 10.4 Auditors | 5 | |||
| ARTICLE 10.5 Financial Statements | 5 | |||
| ARTICLE 10.6 Bank Accounts and Investment | 5 | |||
| ARTICLE 11 | ||||
| MANAGEMENT OF THE COMPANY | ||||
| ARTICLE 11 Management of the Company | 5 | |||
| ARTICLE 12 | ||||
| DECISIONS OF THE PARTNERS | ||||
| ARTICLE 12.1 General Meeting | 6 | |||
| ARTICLE 12.2 Amendments of Bylaws | 6 | |||
| ARTICLE 12.3 Invitation | 6 | |||
| ARTICLE 13 | ||||
| TRANSFERS OF SHARES | ||||
| ARTICLE 13.1 No Transfer | 6 | |||
| ARTICLE 13.2 New Partners | 7 | |||
| ARTICLE 13.3 Effective Date of the Transfer | 7 | |||
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
iii
| ARTICLE 14 | ||||
| DISSOLUTION | ||||
| ARTICLE 14.1 Dissolution | 7 | |||
| ARTICLE 14.2 Effects of the Dissolution | 7 | |||
| ARTICLE 14.3 Liquidating Partner | 8 | |||
| ARTICLE 15 | ||||
| MISCELLANEOUS | ||||
| ARTICLE 15.1 Tax Status | 8 | |||
| ARTICLE 15.2 Disputes | 8 | |||
| ARTICLE 15.3 Publications | 8 | |||
| ARTICLE 15.4 Internal Regulation | 8 | |||
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
BETWEEN THE UNDERSIGNED:
| 1. | Sanofi Participations, a corporation with capital of 250,000 francs headquartered at 32-34, rue Marbeuf, 75008 Paris, France, recorded with the Register of Commerce and Companies of Paris under number B 407 571 725 (“ Partner Sanofi ”), a subsidiary indirectly held wholly by Sanofi, a corporation with capital of 2,624,217,125 francs headquartered at 32-34 rue Marbeuf, 75008 Paris, France, recorded with the Register of Commerce and Companies of Paris under number B 732 059 332 (“ Sanofi ”), and |
| 2. | BMS Investco S.A.S., a simplified corporation with capital of 250,000 francs, headquartered at 1, Parvis de la Defense, La Grande Arche Nord, 92800 Puteaux, recorded with the Register of Commerce and Companies of Nanterre under number B 407 846 195 (“ Partner BMS ”), a subsidiary directly and indirectly held wholly by Bristol-Myers Squibb Company, a company of the State of Delaware (United States of America) headquartered at 345 Park Avenue, New York, New York 10022 (“ BMS ”). |
ARTICLE 1 – CORPORATE FORM
The Partners form a commercial partnership (the “ Company ”) governed by the Bylaws and by law No. 66-537 of July 24, 1996 and decree No. 67-236 of March 23, 1967, and by any other legal or regulatory provisions in force. The form of the Company may be modified by a unanimous decision of the Partners; it being understood that such modification will not lead to the creation of a new legal person.
ARTICLE 2 – CORPORATE NAME
The corporate name of the Company is: SANOFI PHARMA BRISTOL-MYERS SQUIBB. The name must be preceded or immediately followed by the words “commercial partnership” or the initials “SNC” in all acts and documents issued by the Company and intended for third parties. The activity of the Company may be conducted under any other corporate name determined in writing by the Partners in accordance with applicable laws.
ARTICLE 3 – CORPORATE PURPOSE
The purpose of the Company will be (a) to conduct all activities related to the development, manufacture and marketing of Products in Territory A and (b) to conclude, make and execute all contracts and other commitments and engage in all activities that may be necessary or desirable in order to pursue its corporate purpose.
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
2
ARTICLE 4 – HEADQUARTERS
The headquarters of the Company is located at 32-34, rue Marbeuf, 75008 Paris, France. The headquarters may be transferred to another place in the same department or in a neighboring department by a simple decision of the Manager(s), it being understood, however , that the headquarters cannot be transferred to any other place without the unanimous agreement of the Partners.
ARTICLE 5 – TERM
The term of the Company is 99 years from June 6, 1997, barring early or anticipated dissolution or extension decided upon by the Partners at the latest 24 months before its expiration.
ARTICLE 6 – DEFINITIONS
| 6.1 | Terms Defined . When used in the Bylaws, the following terms will have the meaning indicated: |
“ Partners ” means Partner Sanofi and Partner BMS and each of their successors and assignees; with the understanding, however, that any Partner who has no participation will be presumed to have withdrawn from the Company as a Partner.
“ Clopidogrel ” means the new chemical molecule discovered and patented by Sanofi and known under the code SR 25990C whose unregistered international name is Clopidogrel Hydrogenosulphate.
“ Irbesartan ” means the new chemical molecule discovered and patented by Sanofi known under the code SR 47436 whose unregistered international name is Irbesartan.
“ Person ” means any individual, partnership , company, including an association or commercial association, joint venture, association, trust or any other entity or any government, agency, or their political subdivisions as well as any syndicate or group presumed to be a person under Section 13(d) of the US Securities and Exchange Act of 1934 as amended.
“ Product ” means a Clopidogrel Product or an Irbesartan Product and “ Products ” means a Clopidogrel Product and an Irbesartan Product.
“ Clopidogrel Product ” means the product or products whose active principle is Clopidogrel or any salt, ester, metabolite or pro-drug thereof.
“ Irbesartan Product ” means the product or products whose active principle is Irbesartan or any salt, ester, metabolite or pro-drug thereof.
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
3
“ Subsidiary ”, referring to a Person, means any other Person who controls, is controlled or is under common control with such Person; however, it is understood that concerning Sanofi, the definition of Subsidiary excluded Elf Aquitaine and any person not controlled by Sanofi which would be a Subsidiary of Sanofi by the mere fact of its being controlled by Elf Aquitaine. For the purposes of this definition “ control ” means (a) the direct or indirect power to guide the management of a Person or to veto any significant decision related to the management of a Person, in each of these cases, be it by exercising voting rights, by contract or by any other means, (b) direct or indirect possession of holdings (excluding shares in a partnership) representing at least 40% of the voting rights of a Person or (c) possession of at least 50% of the shares of an association. The Partners confirm that each Co-Promotion Entity of Territory A must be considered a Subsidiary of Sanofi.
“ Bylaws ” means these bylaws, as amended, if applicable.
“ Territory A ” means the countries and geographic zones described in Annex 1.1. enclosed herewith.
| 6.2 | Additional Terms Defined . The following additional terms defined will have the meaning indicated in the articles of the Bylaws listed below: |
|
Term Defined |
Definition Article |
|
| Partners’ Meeting | 10.5 | |
| General Meeting | 12.1 | |
| Partner BMS | Recitals | |
| Partner Sanofi | Recitals | |
| BMS | Recitals | |
| Fiscal year | 10.3 | |
| Manager / Managers | 11.1 | |
| Sanofi | Recitals | |
| Company | Article 1 | |
| Transfer | 13.1 |
ARTICLE 7 – CONTRIBUTIONS – HOLDINGS
| 7.1 | Initial Capital Contributions . Upon the registration of the Company on July 10, 1996, Partner BMS and Partner Sanofi made a cash contribution, respectively, of 24,950 francs and 25,050 francs. |
| 7.2 |
Holdings: Capital . The holding of Partner Sanofi is 50.1 % and the holding of Partner BMS is 49.9%. The aforementioned contributions indicate that the Capital of the Company is 50,000 francs, allocated to |
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
4
|
each Partner according to its holding. It is divided into 50,000 shares with a par value of 1 franc each allocated to each Partner according to its contribution, i.e.: |
- 25,050 shares for Partner Sanofi,
- 24,950 shares for Partner BMS.
| 7.3 | Capital Increase . The capital may be increased by a decision of the Partners made in Partners’ Meeting at the proposal of the Manager(s). |
ARTICLE 8 REPRESENTATION OF THE SHARES – INDIVISIBILITY – RIGHTS AND OBLIGATIONS OF THE PARTNERS
| 8.1 | Representation of the shares . The shares cannot be represented by negotiable certificates. |
| 8.2 | Indivisibility of the shares . The shares are indivisibles concerning the Company which acknowledges only one owner for each of them. |
| 8.3 | Rights and obligations of the Partners , Each Partner has a proportional right to its holding in the capital of the Company, in the profits of the Company and all the assets. Each Partner responds indefinitely and jointly for the corporate debts. However, in the relations between them, each of the Partners responds for the corporate debts only in proportion to its holding in the capital. |
ARTICLE 9 DISTRIBUTIONS TO THE PARTNERS
The Partners may, upon proposal of the Manager(s), distribute the distributable profits and decide on the distribution of amounts taken from the reserves available when these amounts are not necessary for the continued operation of the Company.
ARTICLE 10 – ACCOUNTING – AUDITORS – CORPORATE ACCOUNTS – APPROVAL OF THE ANNUAL ACCOUNTS
| 10.1 | Books and Records . At any time during the term hereof, the Manager(s), at the expense of the Company, will keep (i) accounting books and records to reflect accurately and fairly, with reasonable detail, all issues relating to the Company, including, without limitation, all income, expenses, assets and liabilities and (ii) an adequate system of internal control of the accounts. The accounts of the Company will be held in accordance with the French accounting plan and reprocessed in accordance with the U.S. GAAP. The Company will not maintain its accounts for a period exceeding ten years (except for records to be kept for a longer period under the law). |
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
5
| 10.2 | Place and Right of Inspection . The books and records of the Company will be kept and maintained at all times in France, in one or more locations approved by the Manager(s). Each Partner and its authorized representatives will have the right to inspect, examine, copy and audit the books, registers, records, securities and other documents of the Company at any reasonable time, for any purpose reasonably related to the holding of such Partner. The Company does not charge a Partner for any inspection, review, copy or audit other than the current costs of the Company caused by them. |
| 10.3 | Fiscal Year . The fiscal year of the Company (“ Fiscal Year ”) will start on January 1 and end on December 31 of each year. |
| 10.4 | Auditors . The Partners may or must, if they are forced by law, appoint one or more auditors from one or several internationally renowned audit companies selected by the Manager(s). Each auditor will be appointed for a period of six (6) Fiscal Years expiring at the close of the Partners’ Meeting held to review the accounts of the sixth Fiscal Year. |
| 10.5 | Financial Statements . The Manager(s) will draw up, in accordance with applicable laws and regulations, an inventory and the financial statements of the Company (balance sheet, income statement and annex) and a written management report to be submitted for approval at the Partners’ Meeting within six (6) months after the close of each of the Fiscal Years (the “ Partners’ Meeting ”). The financial statements, management report and the text of the resolutions submitted to the Partners’ Meeting will be sent to the Partners at least fifteen (15) days before the Partners’ Meeting. During the same period, the inventory will be made available to the Partners at the headquarters of the Company. |
| 10.6 | Bank Accounts and Investment . The funds of the Company will be deposited into an account or accounts in one or more French banks selected by the Manager(s). Withdrawals will be made by persons designated by the Partners. The funds of the Company whose disbursement is not provided will be invested by the Manager(s) in accordance with and under the guidance of the Partners. |
ARTICLE 11 – MANAGEMENT OF THE COMPANY
(a) The Company will be managed and administered by one or more Managers appointed by the Partners among candidates nominated by Partner Sanofi and chosen among the Subsidiaries of Sanofi, and in regard to the head pharmacist Manager only among employees and/or officers of Sanofi. The term “ Manager ” and “ Managers ” as used in these bylaws means individuals and legal persons, if applicable, Partners or not, appointed under this article 11.1.
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
6
| (b) | If the activities of the Company require the appointment of a head pharmacist, the Partners will designate a Manager, natural person, who will be the head pharmacist of the Company and will have only the necessary powers to make decisions to substantially meet the applicable regulations. |
| (c) | The Manager(s) will be responsible for the daily management of the Company. In relations with third parties, the Manager(s) will have the power to execute all management acts within the corporate purpose of the Company as defined in article 3 hereof. |
| (d) | Each Manager will be appointed for a renewable term of one year. The dismissal or resignation of a Manager will not cause the dissolution of the Company. |
ARTICLE 12 DECISIONS OF THE PARTNERS
| 12.1 | General Meeting . The will of the Partners is expressed by the collective decisions made in General Meeting (hereinafter referred to as the “ General Meeting ”). Unless otherwise specified in the law on companies or these bylaws, these decisions will be valid if adopted by simple majority. In addition, except for those relating to the approval of the annual accounts which must be made in General Meeting, all other decisions may be validly made by written consultation of the Partners. |
| 12.2 | Amendments of Bylaws . Unless expressly set forth otherwise in the Bylaws, any amendment of the Bylaws may be made only by the General Meeting deciding unanimously. |
| 12.3 | Invitation . The General Meeting is called by the Manager(s) by registered letter with acknowledgement of receipt, sent at least 15 business days before the meeting to each of the Partners and containing the indication of the day, time and place and the agenda of the meeting. It may be called under the same conditions by any Partner. It is validly held upon verbal invitation if all Partners are present or legally represented. |
ARTICLE 13 – TRANSFERS OF SHARES
| 13.1 | No Transfer . No share of the Company may be sold, assigned, transferred, pledged or encumbered with surety, in full or in part, directly or indirectly, by operation of law or otherwise (including, without limitation thereto, by merger or distribution) (any such sale, assignment, transfer, pledge or surety being hereinafter referred to as a “ Transfer ”), without the prior unanimous agreement of the Partners (which will not be unreasonably withheld). Unless otherwise agreed by the Partners, any Transfer of any proposed holding in violation of this article 13 will be null and void. |
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
7
| 13.2 | New Partners . No Person will become Partner within the meaning and under the terms hereof unless such Person is ready to expressly assume and agree to be bound by all stipulations of the Bylaws. All costs and expenses reasonably incurred by the Company and related to a Transfer and, if applicable, for the admission of a Person as Partner following these bylaws will be paid by the transferor. |
| 13.3 | Effective Date of the Transfer . Any Transfer under this article 13 will be made in writing and will be enforceable against the Company only after notification to it or after its acceptance by notarized document under the conditions set forth in article 1690 of the Civil Code. Such Transfer will be effective against third parties only after application of the procedures required by applicable law and registration of such Transfer in the Register of Commerce and Companies with jurisdiction. |
ARTICLE 14 – DISSOLUTION
| 14.1 | Dissolution . The Company will be dissolved and its business liquidated in the event of the first of the following events: |
| (i) | written agreement of each of the Partners to dissolve the Company; |
| (ii) | suspension of the marketing of any Products for safety problems; and |
| (iii) | expiration of the term of the Company in accordance with article 5 hereof. |
| 14.2 | Effects of the Dissolution . In all cases of dissolution of the Company, the business of the Company will be completed and the Company will be dissolved as soon as practicable thereafter and the following operations will be carried out: |
(a) the liquidator appointed by Partner Sanofi will prepare a report outlining the remaining assets and liabilities of the Company at the date of dissolution, a copy of which must be delivered to each Partner;
(b) the net proceeds of the liquidation, after covering corporate liabilities and charges, are used to reimburse the accounts of the Partners, if any, and the amount of their rights in the capital; and
(c) the balance, if any, constituting the liquidation surplus and distributed between the Partners in proportion to their holding in the Company and, if the results show liquidation losses, they will be borne by the Partners in the same proportion.
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
8
| 14.3 | Liquidating Partner . Partner Sanofi will designate the liquidator. |
ARTICLE 15 – MISCELLANEOUS
| 15.1 | Tax Status. The Company will not opt for its liability to tax on companies. |
| 15.2 | Disputes . All the disputes among the partners which arise from the present bylaws will be definitively adjudicated following the regulation of the International Chamber of Commerce by three (3) arbitrators named in accordance with this regulation. The arbitration procedure will be conducted in English in Paris, France. The president of the arbitral tribunal will be neither a citizen of the United States of America nor of France. |
| 15.3 | Publications . All powers are given by the partners to the bearer of an original copy of the present bylaws in order to carry out all the formalities of publication that will be necessary. |
| 15.4 | Internal Regulation . The bylaws will be, by mutual agreement among the partners, completed and made explicit by an interior regulation. |
Signed in Canne, France, on June 6, 1997.
| SANOFI PARTICIPATIONS | ||
| by |
/s/ [signature illegible] |
|
| BMS INVESTCO S.A.S. | ||
| by |
/s/ [signature illegible] |
|
171319v8
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
ANNEX 1.1
TERRITORY A 1
|
Europe :
Albania Germany Andorra Austria Belgium Bulgaria Cyprus Denmark Spain Finland France (including Martinique, Guadeloupe, French Guinea, New Caledonia, French Polynesia, Reunion and other departments and overseas territories) Gibraltar Greece Greenland Hungary Ireland Iceland Italy Latvia Lithuania Liechtenstein Luxembourg Malta and Gozo Monaco Norway Netherlands Poland Portugal Republic of Ireland |
Czech Republic Romania United Kingdom (England, Wales, Scotland, Isle of Man, Alderney, Northern Ireland, Channel Islands) San Marino Slovakia Sweden Switzerland former USSR (Europe) Russia Ukraine Belarus Moldova Estonia Latvia Lithuania Vatican (State and City) Former Yugoslavia (including Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia)
Africa :
Algeria Angola Benin Botswana Burkina Faso Burundi Cameroon Cape Verde Comoros Congo Ivory Coast Djibouti |
| 1 |
Territory A is considered to include any new territory created by division, consolidation or change in the name of the countries listed below. |
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
2
|
Africa (continued)
Egypt Eritrea Ethiopia Gabon Gambia Ghana Guinea Guinea-Bissau Equatorial Guinea Kenya Lesotho Liberia Libya Madagascar Malawi Mali Morocco Mauritania Mayotte Republic of Mauritius Mozambique Namibia Niger Nigeria Central African Republic Rwanda Western Sahara St. Helena Ascension Tristan Da Cunha Sao Tome & Principe Senegal Seychelles Sierra Leone Somalia South Africa Presídios Espagnole: Ceuta Melilla Sudan Swaziland Tanzania Chad Togo Tunisia |
Africa (continued)
Uganda Zaire Zambia Zimbabwe
Asia :
Afghanistan Bahrain Bangladesh Bhutan Brunei China (including Tibet, Taiwan, Macao) South Korea Hong Kong India Indonesia Israel Jordan Cambodia Kuwait Laos Lebanon Malaysia Maldives Mongolia Myanmar Nepal Oman Pakistan Philippines Qatar Saudi Arabia Singapore Sri Lanka Syria Thailand Turkey United Arab Emirates Former USSR (RSFSR, Armenia, (Hayastan), Azerbaijan, Georgia, Turkmenistan, Uzbekistan, Tajikistan, Kazakhstan, Kyrgyzstan) Vietnam Yemen |
Exhibit 10.2
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This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
|
SANOFI PHARMA BRISTOL-MYERS SQUIBB
Commercial partnership with capital of 50,000 francs
Headquarters: 32-34, rue Marbeuf, 75008 Paris, France Register of Commerce and Companies of Paris B 408 017 929
INTERNAL REGULATION
of June 6, 1997 effective January 1, 1997 |
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
TABLE OF CONTENTS
| ARTICLE 1 | ||||
| DEFINITIONS | ||||
| ARTICLE 1.1 | Terms Defined | 1 | ||
| ARTICLE 1.2 | Additional Terms Defined | 5 | ||
| ARTICLE 2 | ||||
| TERRITORY MANAGEMENT COMMITTEE | ||||
| ARTICLE 2.1 | Territory Management Committee | 6 | ||
| ARTICLE 2.2 | Composition and Decision Making | 7 | ||
| ARTICLE 2.3 | Delegation | 7 | ||
| ARTICLE 3 | ||||
| POWERS AND OBLIGATIONS OF THE MANAGER(S) | ||||
| ARTICLE 3.1 | Powers | 7 | ||
| ARTICLE 3.2 | Financial Statements | 7 | ||
| ARTICLE 3.3 | Actions for Patents and Trademarks | 9 | ||
| ARTICLE 4 | ||||
| EXPLOITATION MODALITIES | ||||
| ARTICLE 4.1 | Distribution | 9 | ||
| ARTICLE 4.2 | Marketing Strategy | 10 | ||
| ARTICLE 4.3 | Non-Promotional Countries | 11 | ||
| ARTICLE 4.4 | Administrative and Exploitation Services | 11 | ||
| ARTICLE 4.5 | Development Services | 11 | ||
| ARTICLE 5 | ||||
| ADVERSE EVENT REPORTING | ||||
| ARTICLE 5.1 | Reporting Obligation | 11 | ||
| ARTICLE 5.2 | Reporting Procedure | 12 | ||
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* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
BETWEEN THE UNDERSIGNED:
| 1. | Sanofi Participations, a corporation with capital of 250,000 francs headquartered at 32-34 rue Marbeuf, 75008 Paris, France, recorded with the Register of Commerce and Companies of Paris under number B 407 571 725 (“ Partner Sanofi ”), a subsidiary indirectly held wholly by Sanofi; a corporation with capital of 2,624,217,125 francs headquartered at 32-34 rue Marbeuf, 75008 Paris, France, recorded with the Register of Commerce and Companies of Paris under number B 732 059 332 (“ Sanofi ”), and |
| 2. | BMS Investco S.A.S., a simplified corporation with capital of 250,000 francs, headquartered at 1, Parvis de la Defense, La Grande Arche Nord, 92800 Puteaux, recorded with the Register of Commerce and Companies of Nanterre under number B 407 846 195 (“ Partner BMS ”), a subsidiary directly and indirectly held wholly by Bristol-Myers Squibb Company, a company of the State of Delaware (United States of America) headquartered at 345 Park Avenue, New York, New York 10022 (“ BMS ”). |
RECITALS
The Partners constituted between them the commercial partnership Sanofi Pharma Bristol-Myers Squibb (the “ Company ”).
As part of an operation intended for the joint development and marketing, by the two Partners of the Company, of pharmaceutical products obtained from two new molecules Irbesartan and Clopidogrel, which were discovered and patented by Sanofi and developed by BMS, the Partners completely amended the Bylaws of the Company in order to allow for the performance of this new activity.
The Partners decided by mutual consent, under the terms of article 15.4 of the Bylaws of the Company, to issue this internal regulation whose object is to complete and explain the Bylaws (hereinafter the “ Internal Regulation ”).
ARTICLE 1 – DEFINITIONS
| 1.1 | Terms Defined . When used in the Internal Regulation, the following terms will have the meaning indicated: |
“ Territory A Framework Agreement ” means the Territory A Framework Agreement between BMS, Sanofi and Sterling dated July 29, 1993 for the marketing of the Products in Territory A.
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“ Puerto Rico Purchase and Sale Agreement ” means the Purchase and Sale Agreement to be executed between the Company and the Subsidiary (Subsidiaries) of BMS for the sale of the chemically active substances to such Subsidiary (Subsidiaries) and the purchase of finished packaged products from such Subsidiary (Subsidiaries).
“ Development Agreement ” means the Development Agreement between BMS, Sanofi and Sterling dated July 29, 1993.
“ Supply Agreement for Irbesartan ” means the Supply Agreement for Irbesartan to be executed between the Company, Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership, a partnership of the State of Delaware, BMS and Sanofi for the supply of the chemically active substances of Irbesartan.
“ License and Supply Agreement for Clopidogrel ” means the License Agreement of Intellectual Property and Supply of Clopidogrel dated today between the Company and Sanofi concerning the license of certain patents, trademarks and know-how for Clopidogrel and the Clopidogrel Products of Sanofi to the Company and the supply of the chemically active substances of Clopidogrel in exchange for payment to Sanofi of the Royalty for Discovery and Payment of the Supply (as such terms are defined therein).
“ Know-How License Agreement ” means the Know-How License Agreement of the Product dated today between the Company, Sanofi and BMS concerning the license of the know-how developed by Sanofi and BMS pursuant to the Development Agreement, the use of corporate names by the Company and the development of Irbesartan and Clopidogrel as of the date hereof in exchange for the payment of the Royalty for Discovery (as the term is defined therein).
“ License Agreement for Irbesartan ” means the License Agreement of Intellectual Property dated today between the Company and Sanofi concerning the license of certain patents, trademarks and know-how for Irbesartan and the Irbesartan Products of Sanofi to the Company in exchange for the payment to Sanofi of the Royalty for Discovery (as this term is defined therein).
“ Toll Manufacturing Agreements ” means (i) the Toll Manufacturing Irbesartan Agreement to be executed for the production of chemically active substances of Irbesartan into finished, packaged Irbesartan Products, if applicable and (ii) the Toll Manufacturing Clopidogrel Agreement to be executed for the production of Clopidogrel chemically active substances into finished, packaged Clopidogrel Products, if applicable.
“ Alliance Support Agreement ” means the Alliance Support Agreement of Territory A between Sanofi and BMS dated as of today.
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3
“ Partners ” means Partner Sanofi and Partner BMS and each of their successors and assignees; with the understanding, however, that any Partner who has no participation will be presumed to have withdrawn from the company as a Partner.
“ Government Authority ” means any state, administrative, or judicial, local, national, or supra-national authority.
“ Clopidogrel ” means the new chemical molecule discovered and patented by Sanofi and known under the code SR 25990C whose unregistered international name is Clopidogrel Hydrogenosulphate.
“ Co-Marketing ” means for each Product and for each country of Territory A, the marketing of this Product in this country under two or several trademarks by the Marketing Entities concerned.
“ Finance Committee ” has the meaning given in the Alliance Support Agreement .
“ License Steering Committee ” has the meaning presented in the Know-How License Agreement.
“ Functional Committees ” means the Functional Committees of the Alliance (as defined in the Alliance Support Agreement ) and the Functional License Committees (as defined in the Know-How License Agreement).
“ Strategic Alliance Committee ” has the meaning given in the Alliance Support Agreement .
“ Co-Promotion ” means, for each product and for each country of Territory A, the marketing of this Product in this country under a single trademark by the Marketing Entity concerned.
“ Application for New Drug ” means the application to be filed with the competent government authority in any country in order to obtain marketing authorization for a new drug in that country.
“ Elf Aquitaine ” means Société Nationale Elf Aquitaine, a corporation under French law.
“ Adverse Events ” means any negative symptom experienced while or after taking a Product, known to one of the Partners or one of its Subsidiaries, whether or not considered to be triggered by a drug, including without limitation thereto any side effect, injury, poisoning or allergic reaction, or significant failure of an expected pharmacological action, and symptomatic overdose case, or reactions of abuse or withdrawal.
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4
“ Serious Adverse Events ” means any Side Effect endangering life to the extent that such Side Effect exposes the patient to a deadly risk requiring or extending hospitalization or causing permanent disability, birth defect, cancer or death.
“ Marketing Work Group ” has the meaning presented in the Know-How License Agreement.
“ Irbesartan ” means the new chemical molecule discovered and patented by Sanofi known under the code SR 47436 whose unregistered international name is Irbesartan.
“ Non-Promotional Countries ” means the countries in Territory A where the use of the individual promotion by sales personnel is not a significant factor in order to achieve the consumption of the product or make sales, or in which sales are made by tender or by a comparable non-promotional sales method, as determined from time to time by the Finance Committee.
“ Person ” means any individual, partnership , company, including an association or commercial association, joint venture, association, trust or any other entity or any government, agency, or their political subdivisions as well as any syndicate or group presumed to be a person under Section 13(d) of the US Securities and Exchange Act of 1934 as amended.
“ Safety Problem ” as well as the reference to the “safety problem” in article 14.1 of the Bylaws, has the meaning presented in the Alliance Support Agreement.
“ Product ” means a Clopidogrel Product or an Irbesartan Product and “ Products ” means a Clopidogrel Product and an Irbesartan Product.
“ Clopidogrel Product ” means the product or products whose active principle is Clopidogrel or any salt, ester, metabolite or pro-drug thereof.
“ Irbesartan Product ” means the product or products whose active principle is Irbesartan or any salt, ester, metabolite or pro-drug thereof.
“ Subsidiary ”, referring to a Person, means any other Person who controls, is controlled or is under common control with such Person; however, it is understood that concerning Sanofi, the definition of Subsidiary excludes Elf Aquitaine and any person not controlled by Sanofi which would be a Subsidiary of Sanofi by the mere fact of its being controlled by Elf Aquitaine. For the purposes of this definition “ control ” means (a) the direct or indirect power to guide the management of a Person or to veto any significant decision related to the management of a Person, in each of these cases, be it by exercising voting rights, by contract or by any other means, (b) direct or indirect possession of holdings
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(excluding shares in a partnership) representing at least 40% of the voting rights of a Person or (c) possession of at least 50% of the shares of an association. The Partners confirm that each Co-Promotion Entity of Territory A must be considered a Subsidiary of Sanofi.
“ Bylaws ” means the Bylaws of the Company updated on June 6, 1997.
“ Sterling ” means Sterling Winthrop, Inc., a company of the State of Delaware.
“ Territory A ” means the countries and geographic zones described in Annex 1.1. enclosed herewith.
“ Net Sales ” means, for any given period and for any Product, the gross amounts billed by the Marketing Entities to any Person (except for transfers between any Party and its Subsidiaries only for purposes of resale, the use for promotional purposes or clinical tests), less (i) quantity and/or price rebates, deductions and/or discounts actually granted or given, (ii) freight carriage and insurance expenses for shipping (if they are identified separately in invoices), (iii) sales taxes related directly to the sale to the extent that they are included in the gross billing price (but not including the taxes based on revenue arising from these sales) and (iv) the amounts paid back or credited for rejection, expiration or return of such Product.
| 1.2 | Additional Terms Defined . The following additional terms defined will have the meaning indicated in the articles of the Internal Regulation listed below: |
|
Term Defined |
Definition Article | |
| Distribution Agreements | 4.2 (c) | |
| Co-Marketing Distribution Agreement | 4.2 (c) | |
| Co-Promotion Distribution Agreement | 4.2 (b) | |
| Development Service Agreement | 4.5 | |
| Marketing and Exploitation Service Agreement | 4.2 (b) | |
| Service Agreement with the Company | 4.4 | |
| Partner BMS | Recitals | |
| Notification Partner | 5.2 | |
| Partner Sanofi | Recitals | |
| BMS | Recitals | |
| Territory Management Committee | 2.1 | |
| Co-Promotion Entity | 4.2 (b) | |
| Marketing Entity | 4.1 | |
| Notifications | 7.1 |
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Annual Budget Objectives |
3.2 | |
|
Marketing Plan |
4.2 | |
|
Long-Term Plans |
3.2 | |
|
Revised Projection |
3.2 | |
|
Internal Regulation |
Recitals | |
|
Sanofi |
Recitals | |
|
Company |
Recitals |
ARTICLE 2 – TERRITORY MANAGEMENT COMMITTEE
| 2.1 | Territory Management Committee . Subject to the general control and decisions of the Strategic Alliance Committee, of the License Steering Committee and of the Functional Committees, pursuant to this article 2.1, the strategy for the management and exploitation of the Company will be determined by the Partners in a Territory Management Committee (the “ Territory Management Committee ”) which will be responsible for: |
| (i) | following and ensuring the application of the policies and strategies approved by the Strategic Alliance Committee and the License Steering Committee and the Functional Committees and ensuring that the action of the Company and its beneficiaries and sub-licensees is compliant with these policies and strategies; |
| (ii) | providing indications and ensuring the coordination of the Co-Promotion Entities and the other Marketing Entities concerning the matters of policy and Production; |
| (iii) | accumulating the Annual Budget Objectives and the Long-Term Plans of the Co-Promotion Entities in a form that is substantially that of Annexes 3.2 (a)(ii)-1 and 3.2 (a)(ii)-2 enclosed; |
| (iv) | following up on the accumulated budgets of the Co-Promotion Entities within a [*] variation margin and informing the two Partners of any differential outside this variation margin; |
| (v) | following up on the sales and market shares of each of the Products in each country of Territory A; |
| (vi) | checking the Marketing plans of the Marketing Entities and production and supply plans for Territory A; and |
| (vii) | approving the distribution of the sales effort between the local Subsidiaries of the Partners in each country where there is Co-Promotion, such as that offered by such local Subsidiaries. |
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| 2.2 | Composition and Decision Making . (a) The Territory Management Committee will permanently have ten (10) members, five (5) of whom will be appointed by the Sanofi Partner and five (5) will be appointed by the BMS Partner. The members appointed by the Sanofi Partner will be persons filling the positions of (i) President of Sanofi Winthrop, (ii) President of Sanofi Region A, (iii) President of Sanofi Region B, (iv) Controller of Sanofi Pharma, and (v) Vide President of Alliance Management, Sanofi Pharma. The members appointed by the BMS Partner will be the persons filling the positions of (i) President of BMS France; (ii) President of BMS International Pharmaceutical Group, (iii) President, BMS European Pharmaceutical Group, (iv) Vice President, Finance, BMS U.S. Pharmaceutical Group, and (v) Vice President Alliance Management. If one of these positions was modified or eliminated, the Partner concerned will appoint a person whose position is substantially similar to the position modified or eliminated. |
(b) The Territory Management Committee will adopt procedural rules substantially in the form of Annex 2.2(b) enclosed, which will govern the international operations of the Territory Management Committee. These rules may be modified only by the unanimous vote of the members of the Territory Management Committee unless otherwise set forth herein or in these rules, in the event of deadlock or tie in the vote in the Territory Management Committee due to the controlling participation of the Sanofi Partner in the Company, a member appointed by the Sanofi Partner will have deciding vote, with the understanding that any decision concerning article 2.1(a)(vii) hereof will be made only by consensus between the representatives of the Sanofi Partner and BMS Partner members of the Territory Management Committee.
| 2.3 | Delegation . By express decision voted upon unanimously, the Territory Management Committee may establish any subcommittee and delegate its powers to such subcommittee under the conditions it deems appropriate; it is understood, however , that each of the Partners will have the right to appoint an equal number of members in each subcommittee. |
ARTICLE 3 POWERS AND OBLIGATIONS OF THE MANAGER(S)
| 3.1 | Powers . The manager(s) will be responsible for the implementation of the decisions, under the control of the Partners acting by simple majority, and will perform his (their) obligations under the control of the Partners acting by simple majority, which will be subject to the control of the Territory Management Committee. |
| 3.2 | Financial Statements . (a) The manager(s) will prepare and deliver to the Partners, with the help of the latter, pursuant to the applicable laws and regulations, at the expense of the Company: |
| (i) |
within 30 days after the end of each calendar month, a declaration listing for the previous months and for the corporate Financial Year until the last day of that month (x) financial statements accumulated country by country for the Co-Promotion Entities of Territory A, (y) and the Net Sales of Products in the |
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countries of Territory A where there is no Co-Marketing of the Products and (z) the marketing and development expenses covered by the Company in the Territory; |
| (ii) | at the latest by November 15 of each Financial Year, (x) the total annual budgets accumulated for the following Financial Year for the sales and profits before taxes for Co-Promotion entities (the “ Annual Budget Objectives ”) for each Product and projections for accumulated sales and accumulated profits before taxes for the Co-Promotion Entities for the three following Financial Years (the “ Long Term Plans ”) for each Product, which budget objectives and projections will be substantially in the form of Annex 3.2 (a) (ii)-1 and 3.2 (a) (ii)-2 enclosed; with the understanding that the profit before taxes must be calculated by accumulating the profits before taxes of the Co-Promotion Entities for each Product and the Net Sales will be calculated by accumulating the sales of the Co-Promotion Entities for each Product according to the accounting method established by the Finance Committee; and (y) a statement listing, (1) for each of the countries where there is Co-Promotion of Products, the Net Sales and profits before taxes expected for each Product for the following Financial Year and the projections of Net Sales and profits before taxes for each Product for the three following Financial Years, and (2) for each country where there is Co-Marketing of Products, the Net Sales of each Product expected for the following Financial Year and the projections for each Product for the three Financial Years to come and (z) the annual budget of the Company; |
| (iii) | during the months of April, July, and October of each Financial Year, a statement providing the revised annual projections of the accumulated sales and profits before taxes of the Co-Promotion Entities for each Product for that Financial Year (which will be calculated in the same fashion as and by comparison to the Annual Budget Objectives for said Financial Year approved by the Strategic Alliance Committee), revised, if necessary, to take into account the actual results of the ongoing year as at the date of preparation and all other pertinent factors as well as an explanation of any substantial revision in projections concerning the amounts of the budgets approved by the Strategic Alliance Committee (each a “ Revised Projection ”); |
| (iv) | as soon as possible and in any case within sixty (60) days from the end of each Financial Year, a copy of the annual accumulated and audited financial statements of the Company; and |
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| (v) | as soon as possible and in any case within thirty (30) days from the end of each tax quarter, a copy of the unaudited quarterly financial statements of the Company; |
with the understanding that concerning paragraph (i) above, the Manager(s) will provide, under the control of the Partners acting by simple majority, to the Strategic Alliance Committee the data, but only for information and concerning paragraphs (ii) and (iii) above, the Manager(s) will provide, under the control of the Partners acting by simple majority, the data to the Strategic Alliance Committee, which will have only the power to approve the Annual Budget Objectives, the Long Term Plans and the budget of the Company.
(b) Each Partner will provide, as soon as possible, (i) all additional financial information to the Company as requested by the other Partner for the preparation of its tax returns; and (ii) the other information reasonably requested in writing by the other Partner, including any information requested by this Partner or its Subsidiaries for the needs or legal requirements of notification imposed under American or French law, securities or other applicable laws.
(c) The Manager(s) will also report as soon as possible to the Partners and the latter will transmit to the Strategic Alliance Committee that it appears from the Revised Projection (or if they reach this conclusion at any time), that the accumulated annual profit before tax of the Co-Promotion Entities of Territory A will be lower than [*] or more than [*] of the accumulated annual profit before tax projected by the Annual Budget Objective approved by the Strategic Alliance Committee.
| 3.3. | Actions for Patents and Trademarks . The Manager(s), at the request of one or the other of the Partners, must file suit or act in the name of the Company (i) for counterfeit against a third party for impairment of any patent or any trademark given under license [by] the Company, (ii) to defend against an action filed by a third party against the Company, a Partner or one of their respective Subsidiaries for counterfeit of a patent and/or trademark related to Irbesartan, Clopidogrel or one of the two Products in Territory A or (iii) to defend against any action filed by a third party because of the invalidity or nullity of a patent filed in the name of the Company. The costs and expenses of such action or defense will be paid by the Company and any settlement will be decided upon by mutual consent between the Partners. |
ARTICLE 4 – EXPLOITATION MODALITIES
| 4.1 |
Distribution . In each country of Territory A (other than Non-Promotional Countries), one or several entities selected by the Strategic Alliance Committee (each being a “ Marketing Entity ”) will be responsible for the marketing, promotion, sale and distribution of the Products. Each Marketing Entity will buy the finished Products of the Company under a distribution agreement |
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pursuant to article 4.2(b)-(c) hereof with the modifications required by local law and commercial practice including, without limitation thereto, any requirement of the local law under which a Marketing Entity is prohibited from buying finished products and may purchase only chemically active substances and will place the products on the market directly or using the services of the local Subsidiaries of the Partners. |
| 4.2 | Marketing Strategy . |
(a) The marketing strategy of each Product in each country of Territory A will be presented in a marketing plan (the “ Marketing Plan ”) prepared by the Marketing Entity in this country in accordance with and pursuant to the policies and strategies established by the Marketing Work Group (including and without limitation thereto those presented in the general marketing plan centrally financed for each Product developed by the Marketing Work Group) and reviewed by the Territory Management Committee not later than thirty (30) days after the registration date of the Application for New Drug in the country, in the case of the Clopidogrel Products and as soon as possible after the date hereof in the case of the Irbesartan Products. Each Marketing Plan will contain a description of the basic marketing strategy in said country, provisional annual budgets and statements of profit and loss for the Product over the first three (3) calendar years after the launch, provisions for the detailing of the Product, marketing strategy and provisions for the contribution of the Partners and their Subsidiaries to sales resources.
(b) Should the Strategic Alliance Committee determine that there will be Co-Promotion of the Products in the country of Territory A, a Marketing Entity in the form of joint venture (a “ Co-Promotion Entity ”) will be established in this country. The form and structure of each Co-Promotion entity will be determined by the Finance Committee. 50.1% of the voting rights, profit and losses of each Co-Promotion entity will be the property of the Subsidiary directly or indirectly held with a majority by Sanofi, and 49.9% of the voting rights, profits and losses of each Co-Promotion Entity will be the property of a Subsidiary directly or indirectly held with majority by BMS. Each Co-Promotion Entity will be the exclusive distributor of the Products in its territory and will enter into a distribution contract with the Company in the form agreed upon by the Partners (a “ Co-Promotion Distribution Agreement ”) and will hire the local Subsidiaries of Sanofi and BMS to provide marketing and exploitation services pursuant to a Marketing and Exploitation Service Agreement in a form agreed upon between the Partners (a “ Marketing and Exploitation Service Agreement ”) each with the modifications required by local law and commercial practices, including, without limitation thereto, any requirement of the local law under which a marketing entity is prohibited from buying finished products and may buy only chemically active substances.
(c) Should the Strategic Alliance Committee determine that there will be Co-Marketing of the Products in the countries of Territory A, the Strategic Alliance Committee will designate the Subsidiaries directly or indirectly held with majority
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by Sanofi and BMS to be co-exclusive distributors of the Products in said country and each of those Subsidiaries will enter into a distribution agreement with the Company in the form agreed between the Partners (the “ Co-Marketing Distribution Agreement ” and, with the “ Co-Promotion Distribution Agreement ,” the “ Distribution Agreements ”) each with the modifications required by local law and commercial practices, including, without limitation thereto, any requirement of the local law under which a Marketing Entity is prohibited from buying finished Products and can buy only chemically active ingredients. In any country of Territory A where there is Co-Marketing, the Co-Marketing Distribution Agreements to be executed with the Co-Marketing Entities will be identical (except for the parties) and will be executed simultaneously. Where possible, each Partner will exclusively use the sales, marketing, promotion and distribution resources or those of its Subsidiaries in each country of Territory A where there is Co-Marketing of Products.
(d) The Strategic Alliance Committee may determine that there will be no Co-Promotion or Co-Marketing of the Products in any country in Territory A and, to the extent that special circumstances so require, may consider the promotion in that country by a Subsidiary of a single Partner, a sub-license to a third party, the distribution or any other agreements.
| 4.3 | Non-Promotional Countries . In Non-Promotional Countries, the local Subsidiaries of the Partners will not be obligated to execute Distribution Agreements to market and sell the Products in that country, but if they execute similar agreements, they will have the right to receive a fair compensation for the use of their resources. The Finance Committee will prepare and submit to the Territory Management Committee for implementation a decision concerning the alternative distribution agreements with the local Subsidiaries for these countries including, without limitation thereto, the rate of such fair compensation. |
| 4.4 | Administrative and Exploitation Services . The administrative and exploitation services needed by the Company will be provided pursuant to a service agreement to be executed between the Company and a Subsidiary of the Partner Sanofi in a form to be agreed upon by the Partners (the “ Service Agreement with the Company ”). |
| 4.5 | Development Services . The development services required for the Products will be provided under a Development Service Agreement to be executed between the Company, a Subsidiary of the Partner Sanofi and a Subsidiary of the Partner BMS in a form to be agreed upon by the Partners (the “ SNC Service Agreement ”) (the “ Development Service Agreement ”). |
ARTICLE 5 – ADVERSE EVENT REPORTING
| 5.1 |
Reporting Obligation . The Partner BMS and the Partner Sanofi will each make sure, in the marketing of the Products in Territory A, themselves and their respective Subsidiaries will examine and analyze all Adverse |
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Events and Serious Adverse Events. Each Partner will require from its Subsidiaries, sub-licensees and distributors compliance with all requirements of the local law related to the reporting and of the Adverse Events and Serious Adverse Events and each Partner will require its Subsidiaries, sub-licensees and distributors to keep it informed of these events. |
| 5.2 | Reporting Procedure . (a) In order to inform each Partner of these events, each Partner will report: |
| (i) | In the case of the Clopidogrel Products, to Sanofi at: |
Sanofi Pharma
82, avenue Raspail
94255 Gentilly Cedex, France
Attention: [omitted]
Fax: [omitted]
| (ii) | In the case of the Irbesartan Products, to BMS at: |
Bristol-Myers Squibb Company
P.O. Box 4000
Route 206 & Province Line Road
Princeton, NJ 08543 USA
Attention: Vice President, Worldwide Safety and Surveillance
Fax: [omitted]
all Adverse Events and Serious Adverse Events anywhere in the world, with the understanding that the les Serious Adverse Events will be reported to the Person concerned, as indicated above, within three (3) business days after the time a Partner becomes aware of such event (a “ Reporting Partner ”) and must be reported by fax as indicated above. The Reporting Partner must communicate the other Adverse Events every month. The Reporting Partner will quickly notify the Person concerned, as indicated above, of any claim received by him, sufficiently detailed and within sufficient time to allow the Person concerned to comply with all regulatory requirements imposed on such person in any country. Each Partner will also notify the Person concerned of any regulatory development (for example, proposed recalls, labeling and other changes in the fields of registration) affecting any of the Products in any country of Territory A. Both the Partner Sanofi and the Partner BMS will have the right to review and/or request copies of all information and reporting forms issued or received by the Person concerned. The procedures may be modified from time to time by the Regulation Committee (as this term is defined in the Know-How License Agreement).
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13
(b) Pursuant to the Alliance Support Agreement , BMS will determine the reporting procedure of the Adverse Events and Serious Adverse Events concerning the Irbesartan Products to the appropriate Government Authorities and Sanofi will determine the reporting procedure of the Adverse Events and Serious Adverse Events concerning the Clopidogrel Products to the appropriate Government Authorities.
ARTICLE 6 – DISSOLUTION
| 6.1 | Dissolution . Notwithstanding the causes of dissolution set forth in the Bylaws, the Company will also dissolve and its activity liquidated when suspending the marketing of the two Products for Safety Problems according to Section 7.04 of the Alliance Support Agreement . |
| 6.2 | End of the Marketing of a Product . If the marketing of a Product ends in Territory A by the action of Sanofi or BMS pursuant to Section 7.04 of the Alliance Support Agreement , the Partners will amend the Bylaws of the Company to eliminate any reference to the development, purchase, sale, marketing, promotion or commercialization of this Product. |
| 6.3 | The effects of the Dissolution: Cancellation . Notwithstanding the effects of the dissolution described in the Bylaws, in case of dissolution of the Company, |
(a) the Partners must cancel and guarantee the cancellation by their respective Subsidiary(ies) of the Service Agreement of the Company, the Development Agreement, as well as the agreements of the Marketing Entities concerning the Products (including, without limitation, the Distribution Agreements between the Company and each Marketing Entity) and except in the event of dissolution due to a Security Problem, the Company will assign or give under license all remaining assets of the Company as well as its rights and obligations under the License and Supply Agreement of Clopidogrel, the License Agreement of Irbersartan, the Supply Agreement of Irbersartan, the Know-How License Agreement, the Puerto Rico Purchase and Sale Agreement and the Toll Manufacturing Agreement, except for the rights on the corporate names and trademarks, including the terms “Sanofi,” “BMS,” or “Bristol-Myers Squibb,” with the understanding, however , that the obligations to supply chemically active substances or finished Products established in said agreements will continue to be applied for one year after the assignment or license;
(b) the proceeds of this sale will be allocated as follows in the priority order indicated:
| (i) | to the payment of the debts and liabilities of the Company and liquidation expenses; |
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14
| (ii) | the balance, if any, to the placement in escrow of the amounts that the Partners deem reasonably necessary for contingent liabilities not liquidated or not foreseen or the obligations of the Company or Partners arising from or related to the Company. By mutual decision of the partners, these amounts may be deposited in a bank chosen by them and authorized to act as escrow agent for withdrawals intended to cover the debts and obligations described above, and at the expiration of this period as established by the Partners to distribute the balance as indicated in paragraph (iii) below; and |
| (iii) | the balance, if any, to the Partners proportionally to their respective holding. |
ARTICLE 7 – MISCELLANEOUS
| 7.1 | Notifications . All notifications, claims, requests, warnings and other communications (hereinafter collectively called the “ Notifications ”) must be in writing and will be delivered in person, by courier, by fax (against receipt) or by registered letter (with acknowledgment of receipt) to the Persons and addresses below: |
In the case of the Company, to:
Sanofi Pharma Bristol-Myers Squibb
32-34 rue Marbeuf
75008 Paris, France
| Attention: | Legal Director | |
| Fax: | [omitted] | |
| Attention: | Assistant Legal Director | |
| Fax: | [omitted] | |
| Attention: | Vice President, Alliance Management | |
| Fax: | [omitted] |
In the case of the Partner BMS, to:
| BMS lnvestco S.A.S. | ||
| La Grande Arche Nord | ||
| 92044 Paris La Defense Cedex, France | ||
| Attention: | President | |
| Fax: | [omitted] | |
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15
In the case of the Partner Sanofi, to:
| Sanofi | ||
| 32-34 rue Marbeuf | ||
| 75008 Paris, France | ||
| with copy to: | ||
| Cleary, Gottlieb, Steen & Hamilton | ||
| 41 avenue de Friedland | ||
| 75008 Paris, France | ||
| Attention: | [omitted] | |
| Fax: | [omitted] | |
Each of the Partners may designate another addressee (and/or change its address) for Reporting by a Reporting made according to this article. All Reportings made according to this article will be reputed to have been made on the date of their receipt in the event of personal delivery by overnight courier or fax, or ten (10) business days after mailing in the event of registered letter or mailing with acknowledgment of receipt.
| 7.2 | Governing law . This Internal Regulation, as well as the related rights and obligations, are subject to French law. |
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16
| 7.3 | Forced Performance . Each of the Partners acknowledges that the lack of performance of one of the obligations hereunder will cause irreparable damage. Consequently, the forced performance of these obligations may be required to the full extent allowed by law ; it is understood, however, that the powers of the arbitrators (under this article 7.3) will be limited to enforcing the obligations set forth in this Internal Regulation in its current language. |
| 7.4 | Disputes . Any disagreements between the Partners arising from the Internal Regulation will be finally settled according to the Regulation of the International Chamber of Commerce by three (3) arbitrators appointed according to this Regulation. The arbitral proceedings will be conducted in English in Paris, France. The President of the arbitral tribunal will be neither a US nor a French citizen. |
| 7.5 | Headings . All headlines and subheadings of the Internal Regulation are for convenience only, and none of them will be reputed to affect the meaning or influence the interpretation hereof. |
| 7.6 | Relative effect . The Internal Regulation is not binding or benefiting for any party except the Partners and their successors and authorized assignees, and no express or implicit provision is intended or will be reputed to give rights, advantages or any remedy to any person, of any nature whatsoever |
| 7.7 | Severability . Should one of the legal and regulatory conditions [sic], the validity and application of the other conditions and provisions of the Internal Regulation will not be affected and will remain fully valid and in effect provided the substance of the transactions hereunder is not materially affected. Whenever it is determined that one of the conditions or provisions of the Internal Regulation is null, contrary or incompatible with legal and regulatory provisions, the Partners undertake to negotiate in good faith the modification of the Internal Regulation in order to achieve as reliably as possible the original intent of the Partners in order to conduct the transactions hereunder according to the initial intent of the Partners. |
| 7.8 | Transfer . This agreement may be assigned by one of the Partners only to a Subsidiary of Sanofi or BMS in case of reorganization (including to an entity that becomes a Subsidiary as part of such reorganization) causing the takeover of all or almost all marketing and/or production functions of this Partner in Territory A, in which case the rights may be assigned and the obligations may be delegated to this Subsidiary. |
| 7.9 | Acceptances . All acceptances or authorizations of the acts or issues required by the Internal Regulation must be given in writing and concern only the specific act or issue for which the consent or authorization is given, and may not relieve one of the Partners from the obligation to obtain, if applicable, the consent or authorization required by the Internal Regulation for another act or another issue. |
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17
| 7.10 | Whole Agreement . The Internal Regulation with the Bylaws expressing the whole agreement between the Partners as to its object, they cancel and replace all prior contracts concerning this object and not indicated herein or in the Bylaws. |
| 7.11 | Waivers and Modifications . No modification of the Internal Regulation is valid unless it is in writing and signed by the two Partners and refers expressly to the Internal Regulation or Bylaws mentioning the intent of the Partners to modify the Internal Regulation or the Bylaws. Any waiver of any of the conditions hereof must be made in writing, signed by the Partner intending to waive, referring expressly to the condition waived by it, and no waiver may constitute waiver of any other violation of the same condition or of any other condition or provision hereof. |
| 7.12 | Exclusion of Creditors . The provisions of the Internal Regulation are deemed to govern the relations between the Partners and the relations between the Partners and the Company. The Internal Regulation is not deemed to benefit the creditors which are not Partners and no right may be given to non-Partner creditors hereunder. |
| 7.13 | Duplicates . The Internal Regulation may be signed in several counterparts, each constituting an original, but the whole will constitute a single instrument. |
| 7.14 | Effective Date . The Internal Regulation will enter into effect on January 1, 1997 even though it is signed on June 6, 1997. |
| 7.15 | Applicable Language . The Partners acknowledge that the Internal Regulation may be translated into English. The Partners agree that the French version of the Internal Regulation will be the decisive version for any issue. |
| 7.16 | Terms Starting with a Capital Letter . The terms starting with capital letters not defined in this Internal Regulation will have the meaning given to them in the Bylaws. |
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This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
18
Made in Cannes, France, on June 6, 1997, effective as of 1997.
| SANOFI PARTICIPATIONS | ||
| by |
/s/ [signature illegible] |
|
| BMS INVESTCO S.A.S. | ||
| by |
/s/ [signature illegible] |
|
172486v4
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This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
ANNEX 1.1
TERRITORY A 1
|
Europe :
Albania Germany Andorra Austria Belgium Bulgaria Cyprus Denmark Spain Finland France (including Martinique, Guadeloupe, French Guinea, New Caledonia, French Polynesia, Reunion and other departments and overseas territories) Gibraltar Greece Greenland Hungary Ireland Iceland Italy Latvia Lithuania Liechtenstein Luxembourg Malta and Gozo Monaco Norway Netherlands Poland Portugal Republic of Ireland |
Czech Republic Romania United Kingdom (England, Wales, Scotland, Isle of Man, Alderney, Northern Ireland, Channel Islands) San Marino Slovakia Sweden Switzerland former USSR (Europe) Russia Ukraine Belarus Moldova Estonia Latvia Lithuania Vatican (State and City) Former Yugoslavia (including Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia)
Africa :
Algeria Angola Benin Botswana Burkina Faso Burundi Cameroon Cape Verde Comoros Congo Ivory Coast Djibouti |
| 1 |
Territory A is considered to include any new territory created by division, consolidation or change in the name of the countries listed below. |
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|
Africa (continued)
Egypt Eritrea Ethiopia Gabon Gambia Ghana Guinea Guinea-Bissau Equatorial Guinea Kenya Lesotho Liberia Libya Madagascar Malawi Mali Morocco Mauritania Mayotte Republic of Mauritius Mozambique Namibia Niger Nigeria Central African Republic Rwanda Western Sahara St. Helena Ascension Tristan Da Cunha Sao Tome & Principe Senegal Seychelles Sierra Leone Somalia South Africa Presídios Espagnole: Ceuta Melilla Sudan Swaziland Tanzania Chad Togo Tunisia |
Africa (continued)
Uganda Zaire Zambia Zimbabwe
Asia :
Afghanistan Bahrain Bangladesh Bhutan Brunei China (including Tibet, Taiwan, Macao) South Korea Hong Kong India Indonesia Israel Jordan Cambodia Kuwait Laos Lebanon Malaysia Maldives Mongolia Myanmar Nepal Oman Pakistan Philippines Qatar Saudi Arabia Singapore Sri Lanka Syria Thailand Turkey United Arab Emirates Former USSR (RSFSR, Armenia, (Hayastan) Azerbaijan, Georgia, Turkmenistan, Uzbekistan, Tajikistan, Kazakhstan, Kyrgyzstan) Vietnam Yemen |
|
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This text is a free translation from the French language and is supplied solely for information purposes.
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ANNEX 2.2(b)
Rules of the Territory Management Committee
The following rules were adapted according to the bylaws updated on January 1, 1997 between Partner Sanofi and Partner BMS (the “ Bylaws ”) concerning the operation of the Territory Management Committee (the “ Committee ”) and may not be amended or modified other than by unanimous vote of the Committee only. All terms starting with a capital letter but not defined in this document will have the meaning given to them in the bylaws, as amended from time to time.
| 1. | President and Co-President . The meetings of the Committee will be presided over by a president (the “ President ”) and in his absence by a co-president (the “ Co-President ”). Partner Sanofi and Partner BMS will appoint, respectively, the President and the Co-President. |
| 2. | Ordinary Meetings . The Committee will provide in the resolutions for the holding of ordinary meetings and will establish the time and place of these meetings; however, it is understood that these meetings will be held once per calendar quarter. It is not necessary to give notice of ordinary meetings; however, it is understood that if the time or place of ordinary meetings are established or changed, a notice in this regard will quickly be sent by mail to each member of the Committee who was not present at the meeting where the decision was made, sending it to such member at his usual place of activity, at the most, 10 days after the date of the meeting during which the decision was made. The meetings will take place in Paris, New York, or any other place reasonably chosen by the President. |
| 3. | Extraordinary Meetings . The extraordinary meetings of the Committee will be held upon invitation from or by decision of the President or Co-President or any two members of the Committee. Unless otherwise agreed by all members of the Committee, a notice of each extraordinary meeting will be sent by fax (with confirmed acknowledgment of receipt) to each member of the Committee addressing it to this member at his usual place of activity at the latest 10 days before the date scheduled for the meeting. This notice must indicate the time, place, and agenda of the meeting. Unless otherwise provided, any member of the Committee who attends a meeting in person will be presumed to have waived receiving notice of such meeting. Extraordinary meetings will be held in Paris, New York, or any other place reasonably chosen by the President. |
| 4. |
Quorum and Decision Making Method . In each meeting of the Committee, the presence of a majority of the members of the Committee, including at least three (3) members appointed by Partner Sanofi and at least three (3) members appointed by Partner BMS will be necessary to constitute a quorum for the operations. In the absence of the quorum, the majority of those present at the time and place of any meeting may postpone the meeting from date to date but not beyond 30 days after the date of this |
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2
|
meeting, by written notice to the absent members, until a quorum is present, and the postponed meeting is held. Unless otherwise agreed by all the members of the Committee or as specified in the Association Agreement, the majority vote of all the members of the Committee present or represented in any meeting in which a quorum is present is necessary to decide on any issue mentioned in the meeting. |
| 5. | Resignation of the Members of the Committee . Any member of the Committee may resign at any time with written notice of resignation to the President and Co-President. Unless otherwise set forth in this notice, this resignation takes effect upon its receipt by the President and the Co-President and the acceptance of the resignation will not be necessary for it to become effective. |
| 6. | Revocation of a Member of the Committee . Either one of the Partners will have the right, with written notice to the other Partner, at any time, to replace any or all the members designated by it in the Committee or fill any vacancies left by a member designated by it, without the consent of the other Prater; with the understanding, however, that any newly appointed person will be the person replacing the member of the Committee revoked in the position listed in article 11.2 (a) of the bylaws which was filled by this member of the Committee or, if one of these positions was modified or eliminated, in a position substantially similar to the position modified or eliminated. |
| 7. | Remuneration of the Members of the Committee . The members of the Committee will not receive any remuneration for their services as such, be it in the form of salary or fixed payment to attend the meetings. No stipulation hereof will be interpreted as a prohibition for a member of the Committee to serve the Partner represented by him on the Committee in another capacity for remuneration from such Partner for this purpose. |
| 8. | Decisions without Meeting . Subject to the stipulations (a) of the bylaws and (b) of the applicable laws and regulations, any decision which could not be made according to these rules by a vote of the members of the Committee in a meeting of the Committee may be made without meeting if all the members of the Committee consent and the document(s) is (are) entered in the minutes of the Committee. |
| 9. | Telephone Meetings and Videoconferences . The committee may hold, and any member of the Committee may participate in, a Meeting of the Committee by teleconference, videoconference with similar communication allowing all the members participating in the Meeting to hear and speak to each other and the participation in a meeting according to this paragraph 9 will constitute a case of presence in person at the Meeting. |
| 10. | Powers of Attorney . Any member of the Committee may, to the extent authorized by the applicable law, authorize another person belonging to the senior management of Sanofi or BMS to act in its stead by a power of attorney duly signed and by the presence of such authorized person which will be equivalent to his own presence in person at the meeting. |
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3
| 11. |
Minutes . The Committee will have written records in good and due form of the outcome of its meetings and will report on them to each member of the Committee. These written records will be kept in English. A written report on each meeting of the Committee, including the main recommendations, will be delivered to all the members of the Committee and all persons designated by the Partners within 30 days following the date of the meeting and will be presumed approved in the absence of an objection by the 15 th day following the date of delivery. |
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This text is a free translation from the French language and is supplied solely for information purposes.
Only the original version in the French language has legal force.
ANNEX 3.2(a)(ii)-1
ANNUAL BUDGET OBJECTIVES 2
|
PROCEEDS ($000s) |
Total Territory |
Company
5
Territory A |
Total Local
Joint Ventures |
Country 1 2 | Country 2 2 | Country 3 2 | Country 4 2 | |||||||||
|
Net Sales 34 |
||||||||||||||||
|
Standard Cost of Sales |
||||||||||||||||
|
Other Cost of Sales |
||||||||||||||||
|
ICP |
||||||||||||||||
|
Management Cost of Sales |
||||||||||||||||
|
Management Gross Margin |
||||||||||||||||
|
Distribution |
||||||||||||||||
|
Management Gross Margin |
||||||||||||||||
|
Direct Product Expenses |
||||||||||||||||
|
Samples |
||||||||||||||||
|
Advertising/Promotion |
||||||||||||||||
|
Clinicals |
||||||||||||||||
|
Salesforce |
||||||||||||||||
|
Other Direct Costs |
||||||||||||||||
|
Allocated Costs |
||||||||||||||||
|
Marketing |
||||||||||||||||
|
Medical |
||||||||||||||||
|
Administration |
||||||||||||||||
|
Other Income/Expense |
||||||||||||||||
|
Interest |
||||||||||||||||
|
Other |
||||||||||||||||
|
JV Profit/Loss Before Selling |
||||||||||||||||
|
Effort Remuneration |
||||||||||||||||
|
Selling Effort Remuneration |
||||||||||||||||
|
JV Profit/Loss |
| 1 |
Was prepared by management for information. |
| 2 |
Transmitted for information only. |
| 3 |
Only these elements are submitted for approval. |
| 4 |
Information on sales will also be provides for the countries in which Co-Marketing is carried out. |
| 5 |
Includes Central R&D , central marketing, and other direct costs of the company. |
| * | To be filled out. |
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ANNEX 3.2(a)(ii)-2
LONG TERMS PLANS 1
TERRITORY A
|
PROCEEDS ($000s) |
Budget
1997 |
1998 |
Projection
1999 |
2000 | ||||||
|
Net Sales 23 |
||||||||||
|
Standard Cost of Sales |
||||||||||
|
Other Cost of Sales |
||||||||||
|
ICP |
||||||||||
|
Management Cost of Sales |
||||||||||
|
Management Gross Margin |
||||||||||
|
Distribution |
||||||||||
|
Management Gross Margin |
||||||||||
|
Direct Product Expenses |
||||||||||
|
Samples |
||||||||||
|
Advertising/Promotion |
||||||||||
|
Clinicals |
||||||||||
|
Salesforce |
||||||||||
|
Other Direct Costs |
||||||||||
|
Allocated Costs |
||||||||||
|
Marketing |
||||||||||
|
Medical |
||||||||||
|
Administration |
||||||||||
|
Other Income/Expense |
||||||||||
|
Interest |
||||||||||
|
Other |
||||||||||
|
JV Profit/Loss Before Selling |
||||||||||
|
Effort Remuneration |
||||||||||
|
Selling Effort Remuneration |
||||||||||
|
JV Profit/Loss |
| 1 |
Was prepared by management for information. |
| 2 |
Only these elements are submitted for approval. |
| 3 |
Includes Central R&D , central marketing, and other direct costs of the company. |
| * | To be filled out. |
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Exhibit 10.3
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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PARTNERSHIP AGREEMENT
OF
BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING PARTNERSHIP
between
SANOFI PHARMACEUTICALS, INC.
and
BRISTOL-MYERS SQUIBB COMPANY INVESTCO, INC.
dated as of January 1, 1997
TABLE OF CONTENTS
| Page | ||||
| ARTICLE I | ||||
| DEFINITIONS | ||||
| SECTION 1.01. | Defined Terms | 2 | ||
| SECTION 1.02. | Additional Defined Terms | 7 | ||
| SECTION 1.03. | Accounting Terms | 8 | ||
| ARTICLE II | ||||
| ORGANIZATION OF THE PARTNERSHIP | ||||
| SECTION 2.01. | The Partnership | 8 | ||
| SECTION 2.02. | Name | 8 | ||
| SECTION 2.03. | Purpose | 8 | ||
| SECTION 2.04. | Principal Place of Business | 9 | ||
| SECTION 2.05. | Term | 9 | ||
| SECTION 2.06. | Registered Office and Agent | 9 | ||
| SECTION 2.07. | Powers | 9 | ||
| ARTICLE III | ||||
|
CAPITAL CONTRIBUTIONS, PARTNERSHIP INTERESTS AND CAPITAL ACCOUNTS |
||||
| SECTION 3.01. | Initial Capital Contributions | 9 | ||
| SECTION 3.02. | Partnership Interests | 9 | ||
| SECTION 3.03. | Additional Capital Contributions | 9 | ||
| SECTION 3.04. | Capital Accounts | 10 | ||
| SECTION 3.05. | Partnership Property | 10 | ||
| ARTICLE IV | ||||
| ALLOCATIONS | ||||
| SECTION 4.01. | Allocations | 10 | ||
SS_NYL2/121210 19 (PA_79524 2)
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| Page | ||||
| ARTICLE V | ||||
| DISTRIBUTIONS | ||||
| SECTION 5.01. | Distributions to the Partners | 11 | ||
| SECTION 5.02. | Withdrawals of Capital | 11 | ||
| SECTION 5.03. | Withholding | 11 | ||
| ARTICLE VI | ||||
|
ACCOUNTING, INCOME TAX RETURNS, TAX ELECTIONS |
||||
| SECTION 6.01. | Books and Records | 11 | ||
| SECTION 6.02. | Location and Rights of Inspection | 12 | ||
| SECTION 6.03. | Fiscal Year | 12 | ||
| SECTION 6.04. | Audit | 12 | ||
| SECTION 6.05. | Statements of Financial Condition | 12 | ||
| SECTION 6.06. | Bank Accounts and Investments | 14 | ||
| SECTION 6.07. | Tax Matters Partner | 14 | ||
| SECTION 6.08. | Duties of the Tax Matters Partner | 14 | ||
| ARTICLE VII | ||||
| MANAGEMENT OF THE PARTNERSHIP | ||||
| SECTION 7.01. | Territory Management Committee | 15 | ||
| SECTION 7.02. | Composition and Decision-Making | 16 | ||
| SECTION 7.03. | Delegation | 16 | ||
| ARTICLE VIII | ||||
| CERTAIN OPERATING ARRANGEMENTS | ||||
| SECTION 8.01. | Distribution | 17 | ||
| SECTION 8.02. | Commercialization Strategy | 17 | ||
| SECTION 8.03. | Non-Promotional Countries | 18 | ||
| SECTION 8.04. | Administrative and Operating Services | 19 | ||
| SECTION 8.05. | Development Services | 19 | ||
| SECTION 8.06. | Irbesartan Know-How License | 19 | ||
| SECTION 8.07. | Patent and Trademark Actions | 19 | ||
SS_NYL2/121210 19 (PA_79524 2)
ii
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| Page | ||||
| ARTICLE IX | ||||
| TRANSFER OF PARTNERSHIP INTERESTS | ||||
| SECTION 9.01. | No Transfer | 19 | ||
| SECTION 9.02. | Transfers to Affiliates | 20 | ||
| SECTION 9.03. | New Partners | 20 | ||
| ARTICLE X | ||||
| ADVERSE EVENT REPORTING | ||||
| SECTION 10.01. | Reporting Obligation | 20 | ||
| SECTION 10.02. | Reporting Procedure | 20 | ||
| ARTICLE XI | ||||
| TERMINATION | ||||
| SECTION 11.01. | Dissolution | 21 | ||
| SECTION 11.02. | Product Termination | 22 | ||
| SECTION 11.03. | Effect of Dissolution; Termination | 22 | ||
| SECTION 11.04. | Liquidating Partner | 23 | ||
| ARTICLE XII | ||||
| MISCELLANEOUS | ||||
| SECTION 12.01. | Notices | 23 | ||
| SECTION 12.02. | Governing Law | 25 | ||
| SECTION 12.03. | Specific Performance | 25 | ||
| SECTION 12.04. | Dispute Resolution | 25 | ||
| SECTION 12.05. | Headings | 25 | ||
| SECTION 12.06. | No Third Party Beneficiaries | 25 | ||
| SECTION 12.07. | Severability | 25 | ||
| SECTION 12.08. | Assignment | 26 | ||
| SECTION 12.09. | Consents | 26 | ||
| SECTION 12.10. | Entire Agreement | 26 | ||
| SECTION 12.11. | Waivers and Amendments | 26 | ||
| SECTION 12.12. | Not for Benefit of Creditors | 26 | ||
| SECTION 12.13. | Counterparts | 27 | ||
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SCHEDULES
| Schedule 1.01 | Territory B | |
| Schedule 7.01(a)(iii)-l | Annual Budgetary Target Summary | |
| Schedule 7.01(a)(iii)-2 | Annual Long-Range Plan Summary | |
| Schedule 7.02(b) | By-Laws of the Territory Management Committee |
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PARTNERSHIP AGREEMENT dated as of January 1, 1997 between Sanofi Pharmaceuticals, Inc., a Delaware corporation (“ Sanofi Partner ”) and an indirect wholly owned subsidiary of Sanofi, a société anonyme organized under the laws of the French Republic (“ Sanofi ”), and Bristol-Myers Squibb Company Investco, Inc. (“ BMS Partner ” and, together with Sanofi Partner, the “ Partners ” and, individually, each a “ Partner ”), a Delaware corporation and a direct wholly owned subsidiary of Bristol-Myers Squibb Company, a Delaware corporation (“ BMS ”).
W I T N E S S E T H :
WHEREAS, BMS, Sanofi and Sterling Winthrop Inc., a Delaware corporation (“ Sterling ”), entered into a Development Agreement dated as of July 29, 1993 (the “ Development Agreement ”) concerning the development of two new chemical entities discovered and patented by Sanofi, one known as SR 47436, with the international non-proprietary name Irbesartan (“ Irbesartan ”) and one known as SR 25990C, with the international non-proprietary name Clopidogrel Hydrogenosulphate (“ Clopidogrel ”), each with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;
WHEREAS, BMS, Sanofi and Sterling entered into a Master Territory B Agreement dated as of July 29, 1993 (the “ Master Territory B Agreement ”) for the commercialization of the Products in Territory B (as such terms are defined herein);
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30, 1994 among Eastman Kodak Company, Sanofi and Sterling, Sanofi acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Master Territory B Agreement and the Development Agreement;
WHEREAS, in accordance with Section 4.1.1 of the Master Territory B Agreement, BMS and Sanofi agreed to determine an appropriate legal structure to be implemented for the commercialization of the Products in Territory B;
WHEREAS, as of the date hereof, BMS and Sanofi have entered into a Territory B Alliance Support Agreement (the “ Alliance Support Agreement ”) and certain other agreements for the commercialization of the Products in Territory B; and
WHEREAS, in determining such appropriate legal structure, BMS and Sanofi have agreed that the United States of America would no longer be included within the definition of Territory B solely with respect to Irbesartan and Irbesartan Products (as defined herein) and intend to enter into a license agreement concerning the manufacture, sale and commercialization of Irbesartan Products in the United States of America (the “ U.S. Irbesartan License ”);
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NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions contained herein, and for other good, valuable and binding consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms . As used in this Agreement, the following terms shall have the following meanings:
“ Act ” means the Delaware Uniform Partnership Law, set forth as Title 6 of the Delaware Code Annotated, as amended from time to time, and any applicable successor statutes thereto.
“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Product of which any Partner or any of its Affiliates becomes aware, whether or not considered drug related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.
“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however, that, with respect to Sanofi, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Sanofi that would be an Affiliate of Sanofi solely by reason of its being controlled by Elf Aquitaine. For the purposes of this definition, “ control ” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person or to veto any material decision relating to the management or policies of a Person, in each case whether through the ownership of voting securities, by contract or otherwise, (b) the beneficial ownership, directly or indirectly, of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial ownership of at least 50% of the partnership interests of a general partnership. The Partners confirm that each Co-Promotion Entity in Territory B shall be considered to be an Affiliate of BMS.
“ Agreement ” means this Partnership Agreement, as originally executed and as amended, modified, supplemented or restated from time to time, in accordance with Section 12.11 hereof.
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“ Alliance Strategic Committee ” has the meaning set forth in the Alliance Support Agreement.
“ beneficial owner ” has the meaning set forth in Rule 13d-3 of the U.S. Securities Exchange Act of 1934, as amended,
“ Capital Account ” means, with respect to each Partner, the capital account maintained for such Partner as set forth in Article III hereof.
“ Capital Contribution ” means, with respect to each Partner, the amount of money contributed to the Partnership by such Partner (or such Partner’s predecessors in interest) with respect to the Partnership Interest held by such Partner.
“ Clopidogrel License and Supply Agreement ” means the Clopidogrel Intellectual Property License and Supply Agreement dated as of the date hereof between the Partnership and Sanofi for the license of certain patent, trademark and know how rights for Clopidogrel and Clopidogrel Products from Sanofi to the Partnership and the supply of active substance chemical bulk for Clopidogrel in exchange for the payment to Sanofi of the Discovery Royalty and the Supply Payment (as such terms are defined therein).
“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof.
“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
“ Co-Marketing ” means, for each Product and for any country in Territory B, the marketing of such Product in such country under two or more trademarks by the applicable Marketing Entities.
“ Co-Promotion ” means, for each Product and for any country in Territory B, the marketing of such Product in such country under one trademark by the applicable Marketing Entity.
“ Elf Aquitaine ” means Société Nationale Elf Aquitaine, a société anonyme organized under the laws of the French Republic.
“ Finance Committee ” has the meaning set forth in the Alliance Support Agreement.
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“ Functional Committees ” means the Alliance Functional Committees (as defined in the Alliance Support Agreement) and the License Functional Committees (as defined in the Know-How License Agreement).
“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.
“ Irbesartan License Agreement ” means the Irbesartan Intellectual Property License Agreement dated as of the date hereof between the Partnership and Sanofi for the license of certain patent, trademark and know-how rights for Irbesartan and Irbesartan Products from Sanofi to the Partnership in exchange for the payment to Sanofi of the Discovery Royalty (as S uch term is defined therein).
“ Irbesartan Product ” means the product or products having as an active ingredient Irbesartan or any salt, ester, metabolite or pro-drug thereof.
“ Irbesartan Supply Agreement ” means the Irbesartan Supply Agreement to be entered into among BMS, Sanofi, the Partnership and Sanofi Pharma Bristol-Myers Squibb, a société en nom collectif organized under the laws of the French Republic, for the supply of active substance chemical bulk for Irbesartan.
“ Know-How License Agreement ” means the Product Know-How License Agreement dated as of the date hereof among the Partnership, Sanofi and BMS for the license of know-how developed by Sanofi and BMS pursuant to the Development Agreement, the use of corporate names by the Partnership and the development of Irbesartan and Clopidogrel on or after such date in exchange for the payment of the Development Royalty (as such term is defined therein) by the Partnership.
“ License Steering Committee ” has the meaning set forth in the Know-How License Agreement.
“ Marketing Working Group ” has the meaning set forth in the Know-How License Agreement.
“ Net Income ” and “ Net Loss ” mean, for each Fiscal Year, an amount equal to the Partnership’s taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(l) shall be included in taxable income or loss), with the following adjustments:
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(i) Any income of the Partnership that is [*] and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “ Net Income ” and “ Net Loss ” shall be [*] to such taxable income or loss;
(ii) Any expenditures of the Partnership [*]or treated as [*], and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of “ Net Income ” and “ Net Loss ”, shall be [*] from such taxable income or loss; and
(iii) any Termination Gain or Termination Loss shall be [*] from the calculation of Net Income and Net Loss.
“ Net Sales ” means, for any given period and with respect to any Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any transfers between any Party and its Affiliates for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outdating or the return of such Product.
“ New Drug Application ” means the application required to be filed with the relevant Governmental Authority in any country in order to obtain approval to market commercially a new drug in such country.
“ Non-Promotional Countries ” means the countries in Territory B where the utilization of personal promotion by sales personnel is not a significant factor in obtaining product usage and achieving sales or where selling is by tender or comparable non-promotional method of sale, as determined from time to time by the Finance Committee.
“ Partners ” means each of the BMS Partner and the Sanofi Partner and each of their permitted successors and assigns; provided, however, that any Partner that holds no Partnership Interest shall be deemed to have withdrawn as a Partner of the Partnership.
“ Partnership Interest ” means, for each Partner, all of such Partner’s interest as a Partner of the Partnership, including, without limitation, such Partner’s rights to profits, losses and voting rights in the Partnership and any and all benefits to which it
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may be entitled under this Agreement, together with the obligations of such Partner hereunder.
“ Person ” means any individual, partnership, firm, corporation, société anonyme, société en nom collectif, société en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.
“ Puerto Rico Purchase and Sale Agreement ” means the Purchase and Sale Agreement to be entered into among the Partnership and Affiliate(s) of BMS for the sale of active substance chemical bulk to such Affiliate(s) and the purchase of finished Products packaged, if applicable, from such Affiliate(s).
“ Product ” means a Clopidogrel Product or an Irbesartan Product, and “ Products ” means a Clopidogrel Product and an Irbesartan Product.
“ Regulations ” means the United States Federal Income Tax Regulations, including temporary regulations, promulgated under the Code, as amended, modified or supplemented from time to time.
“ Safety Problem ” has the meaning set forth in the Alliance Support Agreement.
“ Serious Adverse Event ” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.
“ Termination Gain ” or “ Termination Loss ” means any gain or loss realized by the Partnership on the sale or other disposition of assets pursuant to Section 11.03(c) hereof (including any gain or loss realized by the Partnership in connection with [*] pursuant to Section [*] hereof).
“ Territory B ” means the countries and geographic areas described and listed in Schedule 1.01 attached hereto, which shall not include the United States of America for Irbesartan Products.
“ Third Party ” means a Person who or which is neither a Party nor an Affiliate of a Party.
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“ Toll Manufacturing Agreements ” means (i) the Irbesartan Toll Manufacturing Agreement to be entered into for the contract manufacturing of active substance chemical bulk for Irbesartan into finished Irbesartan Products packaged, if applicable, and (ii) the Clopidogrel Toll Manufacturing Agreement to be entered into for the contract manufacturing of active substance chemical bulk for Clopidogrel into finished Clopidogrel Products packaged, if applicable.
“ United States of America ” means any State or Commonwealth of the United States of America, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and any other territory, possession or military base of the United States of America.
“ U.S. GAAP ” means generally accepted accounting principles in the United States of America in effect from time to time applied consistently throughout the periods involved.
SECTION 1. 02. Additional Defined Terms . The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:
|
Defined Term |
Section Where Defined | |
|
Alliance Support Agreement |
Recitals | |
|
Annual Budgetary Targets |
6.05(a)(ii) | |
|
BMS |
Preamble | |
|
BMS Partner |
Preamble | |
|
Certificate of Partnership |
2.01 | |
|
Clopidogrel |
Recitals | |
|
Co-Marketing Distribution Agreement |
8.02(c) | |
|
Co-Promotion Distribution Agreement |
8.02(b) | |
|
Co-Promotion Entity |
8.02(b) | |
|
Development Agreement |
Recitals | |
|
Development Services Agreement |
8.05 | |
|
Distribution Agreements |
8.02(c) | |
|
Effective Date |
2.01 | |
|
Fiscal Year |
6.03 | |
|
Irbesartan |
Recitals | |
|
Long-Range Plans |
6.05(a)(ii) | |
|
Marketing and Operating Services Agreement |
8.02(b) | |
|
Marketing Entity |
8.01 | |
|
Marketing Plan |
8.02(a) | |
|
Master Territory B Agreement |
Recitals | |
|
Notices |
12.01 |
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|
Partner |
Preamble | |
|
Partnership |
2.01 | |
|
Partnership Services Agreement |
8.04 | |
|
Reporting Partner |
10.02(a) | |
|
Revised Projection |
6.05(a)(iii) | |
|
Sanofi |
Preamble | |
|
Sanofi Partner |
Preamble | |
|
Sterling |
Recitals | |
|
Tax Matters Partner |
6.07 | |
|
Termination Date |
11.01 | |
|
Territory Management Committee |
7.01 (a) | |
|
Transfer |
9.01 | |
|
U.S. Irbesartan License |
Recitals |
SECTION 1.03. Accounting Terms . Except as otherwise specifically provided herein or as otherwise agreed by the Partners, all terms herein that relate to accounting matters shall be interpreted in accordance with U.S. GAAP.
ARTICLE II
ORGANIZATION OF THE PARTNERSHIP
SECTION 2.01. The Partnership. The Partners do hereby form the partnership (the “ Partnership ”) by executing this Agreement with the intent to form the Partnership with effect as of January 1, 1997, the effective date of this Agreement (the “ Effective Date ”), and shall register the name of the Partnership and those of the Partners with the Prothonotary’s office in the State of Delaware.
SECTION 2.02. Name . The name of the Partnership is Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership. The business of the Partnership may be conducted under any other name designated in writing by the Partners in compliance with applicable law.
SECTION 2.03. Purpose . The businesses and purposes of the Partnership shall be (a) to carry on all activities related to the development, manufacturing, commercialization and sale of the Products in Territory B, specifically excepting the commercialization and sale of Irbesartan Products in the United States of America and (b) to enter into, make and perform all such contracts and other undertakings, and to engage in all such activities and transactions, as may be necessary or desirable to conduct such businesses and activities.
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SECTION 2.04. Principal Place of Business . The principal place of business of the Partnership shall be located at P.O. Box 4000, Route 206 and Province Line Road, Princeton, NJ 08543, United States of America, or at such other place in the United States of America as may be agreed by the Partners. The Partnership may maintain such other offices at such other places as the Partners deem advisable.
SECTION 2.05. Term . The Partnership shall continue in effect through December 2096, unless earlier terminated as provided in Section 11.01 hereof or extended by written agreement of each of the Partners not later than 24 months prior to such date.
SECTION 2.06. Registered Office and Agent . The name and address of the registered agent of the Partnership for service of process on the Partnership, as well as the registered office of the Partnership, in the State of Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, United States of America.
SECTION 2.07. Powers . The Partnership shall have the full power and authority to engage in all activities necessary, appropriate or incidental to any of the purposes of the Partnership described in Section 2.03 hereof, including, without limitation, the full power and authority to engage in all activities permitted to be conducted by a general partnership under Delaware law.
ARTICLE III
CAPITAL CONTRIBUTIONS, PARTNERSHIP INTERESTS
AND CAPITAL ACCOUNTS
SECTION 3.01. Initial Capital Contributions . Upon the execution and delivery of the Agreement, the BMS Partner and the Sanofi Partner shall each contribute to the Partnership cash in the amounts of $[*] and $[*], respectively, and the Partnership shall credit such amounts to the Capital Accounts of the BMS Partner and the Sanofi Partner.
SECTION 3.02. Partnership Interests . The Partnership Interest of the BMS Partner shall be 50.1%, and the Partnership Interest of the Sanofi Partner shall be 49.9%.
SECTION 3.03. Additional Capital Contributions . If it is determined by the Finance Committee that additional Capital Contributions are needed to cover development, launch and other costs or expenditures for which the Partnership’s own funds are not otherwise sufficient, each of the Partners shall contribute to the Partnership, as additional Capital Contributions, at the time and in the manner so determined by the Finance
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Committee, an amount equal to [*] multiplied by [*] to cover such costs or expenditures.
SECTION 3.04. Capital Accounts . (a) A separate Capital Account shall be maintained in respect of each Partner. Subsequent to the Effective Date, each Partner’s Capital Account shall be credited with:
(i) the amount of cash contributed by such Partner (or its predecessor in interest) to the Partnership in accordance with Sections 3.01 and 3.03 hereof; and
(ii) the amount of any Net Income and Termination Gain allocated to such Partner pursuant to Section 4.01 hereof;
and there shall be charged against each Partner’s Capital Account:
(x) the amount of any Net Losses and Termination Losses allocated to such Partner pursuant to Section 4.01 hereof; and
(y) the amount of cash distributed by the Partnership to such Partner pursuant to Section 5.01 hereof.
(b) In the event all or any portion of a Partnership Interest is transferred in accordance with Article IX hereof, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred Partnership Interest.
SECTION 3.05. Partnership Property . All property and assets owned by or contributed to the Partnership (including, without limitation, the property and assets contributed to the Partnership pursuant to this Article III), whether real or personal, shall be (and shall be deemed to be) owned by the Partnership as an entity, and no Partner shall individually have any right, title or interest in any such property or assets or proceeds thereof, irrespective of whether any such property or asset is formally in the name of the Partnership or of any Partner (or any trade name or division thereof), any such property or asset being held by such Partner as a nominee of the Partnership for the benefit of the Partnership.
ARTICLE IV
ALLOCATIONS
SECTION 4.01. Allocations . The Partnership’s Net Income or Net Loss shall be allocated to the Partners pro rata in accordance with their respective Partnership Interests.
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The Partnership’s Termination Gain or Termination Loss shall be allocated to the Partners such that each Partner’s Capital Account shall equal the amount such Partner is entitled to receive pursuant to Section ll.03(d)(iii) hereof.
ARTICLE V
DISTRIBUTIONS
SECTION 5.01. Distributions to the Partners . The Partnership shall distribute to the Partners in proportion to their Partnership Interests (a) all cash that is not required for the ongoing business operations of the Partnership, as determined by the Finance Committee, and (b) such other amounts as the Partners collectively shall agree.
SECTION 5.02. Withdrawals of Capital . Except as otherwise provided herein, no portion of the capital of the Partnership may be withdrawn at any time without the approval of each of the Partners.
SECTION 5.03. Withholding. To the extent required by any law, the Partnership shall withhold from any income or gain allocated to each Partner and from amounts distributed to each Partner any amounts required to be remitted by the Partnership pursuant to such law and shall remit the amount withheld to the appropriate taxing authority by the due date for such remittance. The amounts so withheld shall be treated for purposes of this Agreement as having been distributed to such Partner. As between the Partners and the Partnership, any tax imposed on a Partner, whether collected by withholding or otherwise, shall remain the liability of such Partner, whether or not the Partnership properly withheld such tax, and such Partner shall in all cases indemnify and hold harmless the Partnership and each other Partner for the amount of such tax and any interest, penalties or additions to tax with respect thereto.
ARTICLE VI
ACCOUNTING, INCOME TAX
RETURNS, TAX ELECTIONS
SECTION 6.01. Books and Records . At all times during the term hereof, the BMS Partner, at the Partnership’s expense, shall maintain or cause to be maintained (i) books and records of account which accurately and fairly reflect, in reasonable detail, all matters relating to the Partnership, including, without limitation, all income, expenditures, assets and liabilities thereof and (ii) an adequate system of internal accounting controls. Such books and records of account shall be maintained in accordance with U.S. GAAP, unless otherwise
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agreed by the Partners, and shall be maintained for at least ten years following the date of each transaction to which they relate or for any longer period as required by applicable law, unless the Partners otherwise agree; provided, however, that the Partnership shall not be required to maintain any such records for a period in excess of ten years from the date of the making or receipt thereof (except for those records, if any, required to be kept for a longer period under applicable law).
SECTION 6.02. Location and Rights of Inspection . The Partnership’s books and records of account shall be kept and maintained at all times at the place or places within the United States of America approved by the BMS Partner. Each Partner and their authorized representatives shall have the right to inspect, examine, copy and audit the books, records, files, securities and other documents of the Partnership at all reasonable times for any purpose reasonably related to such Partner’s interest in the Partnerership. No charges shall be made to a Partner by the Partnership for any such inspection, examination, copying and audit other than for out-of-pocket costs of the Partnership occasioned thereby.
SECTION 6.03. Fiscal Year . The fiscal year of the Partnership for both accounting and tax purposes (the “ Fiscal Year ”) shall begin on January 1 and end on December 31 of each year.
SECTION 6.04. Audit . The books of account, financial records and annual financial statements of the Partnership shall be audited annually at the Partnership’s expense by an internationally-recognized independent accounting firm selected by the BMS Partner.
SECTION 6.05. Statements of Financial Condition . (a) The BMS Partner and the Sanofi Partner shall jointly prepare, and the BMS Partner shall have the final authority to determine and to deliver to the Sanofi Partner in accordance with applicable law and regulations and at the Partnership’s expense:
(i) within 30 days after the end of each calendar month, a statement listing, for the preceding month and for the Fiscal Year through the last day of such month (x) country-by-country and aggregate territorial financial statements for the Co-Promotion Entities in Territory B, (y) Net Sales of the Products in the countries in Territory B in which there is Co-Marketing of the Products and (z) Territory-wide marketing and developmental expenses incurred by the Partnership;
(ii) by November 15 of each Fiscal Year, (x) the aggregate of annual budgets for the upcoming Fiscal Year for sales and pre-tax profits for the Co-Promotion Entities (the “ Annual Budgetary Targets ”) for each Product and projections for aggregate sales and aggregate pre-tax profits for the Co-Promotion Entities for the subsequent three Fiscal Years (“ Long-Range Plans ”) for each Product, which budgetary targets and projections shall be substantially in the form of Schedules
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7.01(a)(iii)-l and 7.01(a)(iii)-2 attached hereto; it being agreed that pre-tax profits shall be calculated by [*], and sales shall be calculated by [*], each in accordance with the methodology established by the Finance Committee, (y) a statement listing, (1) for each country where there is Co-Promotion of the Products, the expected Net Sales and pre-tax profits for each Product for the upcoming Fiscal Year, and projections for Net Sales and pre-tax profits of each Product for the subsequent three Fiscal Years and (2) for each country where there is Co-Marketing of the Products, the expected Net Sales of each Product for the upcoming Fiscal Year, and projections for Net Sales of each Product for the subsequent three Fiscal Years and (z) the annual budget for the Partnership;
(iii) during April, July and October of each Fiscal Year, a statement providing revised annual projections of aggregate sales and pre-tax profits for such Co-Promotion Entities for each Product for such Fiscal Year (which shall be calculated in the same manner as, and compared to, the Annual Budgetary Targets for such Fiscal Year approved by the Alliance Strategic Committee), revised, if necessary, to take into account the actual year-to-date results and any other relevant factors, together with an explanation of any material revisions in the projections relative to the budgeted amounts thereof approved by the Alliance Strategic Committee (each, a “ Revised Projection ”);
(iv) as promptly as reasonably practicable and in any event within 60 days of the end of each Fiscal Year, a copy of the aggregate audited annual financial statements for the Partnership; and
(v) as promptly as reasonably practicable and in any event within 30 days of the end of each fiscal quarter, a copy of the unaudited quarterly financial statements for the Partnership;
provided, however, that, with respect to sub-section (i) above, the BMS Partner shall provide such information to the Alliance Strategic Committee for information only and, with respect to subsections (ii) and (iii) above, the BMS Partner shall also provide such information to the Alliance Strategic Committee, which shall have the sole authority to approve the Annual Budgetary Targets, the Long-Range Plans and the budget of the Partnership.
(b) Each Partner shall provide, as promptly as reasonably practicable, (i) any additional financial information relating to the Partnership that is requested by the other Partner for preparation of such Partner’s income tax returns; and (ii) such other information that is reasonably requested in writing by the other Partner, including, without
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limitation, any information required by such Partner or its Affiliates for reporting or statutory purposes under U.S. or French securities or other applicable laws.
(c) The BMS Partner shall, in addition, advise the Sanofi Partner and the Alliance Strategic Committee promptly if the Revised Projection shows, or BMS concludes, at any time, that the annual aggregate pre-tax profits of the Co-Promotion Entities in Territory B will fall short of the annual aggregate pre-tax profit amount in the relevant Annual Budgetary Target approved by the Alliance Strategic Committee by [*]of such annual aggregate pre-tax profit.
SECTION 6.06. Bank Accounts and Investments . Funds of the Partnership shall be deposited in an account or accounts of a type, in form and name and in an institution or institutions within the United States of America, in each case as approved by the BMS Partner. Withdrawals from bank accounts shall be made by persons approved in writing by the Partners. Any funds of the Partnership that are not required to be disbursed shall be invested by the BMS Partner in accordance with and pursuant to guidelines therefor established by the Partners.
SECTION 6.07. Tax Matters Partner . [*] shall be designated as the Partnership’s tax matters partner (the “ Tax Matters Partner ”), as defined in section 6231(a)(7) of the Code, and shall have all of the powers and obligations of a tax matters partner pursuant to the Code and under this Agreement. All expenses incurred by the Tax Matters Partner in serving in such capacity (including, without limitation, [*]) shall be treated as [*] expenses and shall be paid by the Partnership. The Tax Matters Partner shall incur no liability to the Partnership or to [*] for actions taken in its capacity as the Tax Matters Partner, including, without limitation, any liability for any additional taxes (including withholding taxes), interest or penalties owed by the [*] due to adjustments of Partnership items of income, gain, loss or deduction at the Partnership level, except for actions that constitute gross negligence, fraud or willful misconduct. The Partnership shall indemnify the Tax Matters Partner (including the officers and directors of a corporate Tax Matters Partner) against judgments, fines, amounts paid in settlement and reasonable expenses (including reasonable attorneys’ fees) incurred in any civil or investigative proceeding in which the Tax Matters Partner is involved or threatened to be involved by reason of being the Tax Matters Partner, except to the extent that it is finally judicially determined that such judgments, fines, amounts and expenses arose out of or were related to actions or omissions of the Tax Matters Partner constituting gross negligence, fraud or willful misconduct.
SECTION 6.08. Duties of the Tax Matters Partner . The Tax Matters Partner shall cooperate with [*] and shall promptly provide the [*] with copies of notices or other materials from, and inform the [*] of discussions engaged in with, the Internal Revenue Service or state or local tax authorities and shall
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provide [*] with notice of all scheduled administrative proceedings, including, without limitation, meetings with Internal Revenue Service agents, technical advice, conferences and appellate hearings, as soon as possible after receiving notice of the scheduling of such proceedings. The Tax Matters Partner shall not agree to [*] with respect to Partnership items of income, gain loss or deduction, without the prior written consent of the [*]. The Tax Matters Partner may request extensions to file any tax return or statement without the written consent of, but shall so inform, the [*]. The provisions of this Agreement regarding the Partnership’s tax returns shall survive the termination of the Partnership and the transfer of either Partner’s interest in the Partnership and shall remain in effect for the period of time necessary to resolve any and all matters regarding the federal, state and local income taxation of the Partnership and items of Partnership income, gain, loss or deduction. The Tax Matters Partner shall cause the Partnership to elect to deduct research and development expenses pursuant to Section 174 of the Code.
ARTICLE VII
MANAGEMENT OF THE PARTNERSHIP
SECTION 7.01. Territory Management Committee . (a) Subject to the general oversight and decisions of the Alliance Strategic Committee, the License Steering Committee and the Functional Committees, and in accordance with this Article VII, the business and operational policies of the Partnership shall be managed by a Territory Management Committee (the “ Territory Management Committee ”), which shall be responsible for:
(i) monitoring and ensuring implementation of the policies and strategies approved by the Alliance Strategic Committee and the License Steering Committee and the Functional Committees and ensuring that the actions of the Partnership and its assigns and sub-licensees are consistent with such policies and strategies;
(ii) providing direction to and ensuring the coordination of the Co-Promotion Entities and other Marketing Entities regarding policy and Product issues;
(iii) aggregating the Annual Budgetary Targets and Long-Range Plans of the Co-Promotion Entities substantially in the form of Schedules 7.01(a)(iii)-l and 7.01(a)(iii)-2 attached hereto;
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(iv) monitoring the aggregate budgets of the Co-Promotion Entities within a [*] variance and informing both Partners of any deviation therefrom;
(v) monitoring the sales and market shares of each of the Products in each country in Territory B, specifically excepting Irbesartan Products in the United States of America;
(vi) reviewing the marketing plans of the Marketing Entities and the manufacturing and sourcing plans for Territory B, specifically excepting Irbesartan Products with respect to the United States of America; and
(vii) approving the selling effort allocation between the Partners’ local Affiliates in each country in which there will be Co-Promotion, as proposed by such local Affiliates.
SECTION 7.02. Composition and Decision-Making . (a) The Territory Management Committee shall at all times consist of eight (8) members, four (4) of whom shall be appointed by the BMS Partner and four (4) of whom shall be appointed by the Sanofi Partner. The members appointed by the BMS Partner shall be those persons serving from time to time as (i) President, BMS U.S. Pharmaceutical Group, (ii) President, BMS Canada and Latin American Pharmaceutical Group, (iii) Vice President Finance, BMS U.S. Pharmaceutical Group, and (iv) Vice President, Alliance Management. The members appointed by the Sanofi Partner shall be those persons serving from time to time as (i) President, Sanofi Pharmaceuticals, Inc., (ii) President, Sanofi Latin American Region, (iii) Controller, Sanofi Pharma, and (iv) Vice President, Alliance Management, Sanofi Pharma. If any such position has been modified or eliminated, the Partner so affected shall appoint an individual whose position is substantially similar to the position so modified or eliminated.
(b) The Territory Management Committee shall adopt by-laws substantially in the form of Exhibit 7.02(b) attached hereto, which by-laws shall govern the internal operations of the Territory Management Committee. Such by-laws may be amended solely by the unanimous vote of the members of the Territory Management Committee. Unless otherwise provided herein or in the attached by-laws, in the event of a deadlock or tie vote of the Territory Management Committee, a member appointed by the BMS Partner shall have the deciding or casting vote in furtherance of the BMS Partner’s controlling interest in the Partnership; provided, however, that any decision concerning Section 7.01(a)(vii) hereof shall be made only by a consensus of the representatives of the BMS Partner and the Sanofi Partner on the Territory Management Committee.
SECTION 7.03. Delegation . The Territory Management Committee may, by unanimous vote, expressly and by written resolution establish any sub-committee and
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delegate its powers to such sub-committee on such terms as it deems appropriate; provided, however, that each of the Partners shall have the right to appoint an equal number of members on each sub-committee.
ARTICLE VIII
CERTAIN OPERATING ARRANGEMENTS
SECTION 8.01. Distribution . In each country in Territory B (other than Non-Promotional Countries), one or more entities as selected by the Alliance Strategic Committee (each, a “ Marketing Entity ”) shall be responsible for the marketing, promotion, sale and distribution of the Products. Each Marketing Entity shall purchase the finished Products from the Partnership pursuant to a distribution agreement, in accordance with Sections 8.02(b)-(c) hereof, with such changes as are required by local law and market practice, including, without limitation, any requirement of local law pursuant to which a Marketing Entity is prohibited from purchasing any finished Product and may purchase only active substance chemical bulk, and shall market the Products either directly or using the services of local Affiliates of the Partners.
SECTION 8.02. Commercialization Strategy . (a) The commercialization strategy for each Product in each country in Territory B, specifically excepting Irbesartan Products in the United States of America, shall be set forth in a marketing plan (the “ Marketing Plan ”) prepared by the Marketing Entity in such country, in accordance and consistent with the policies and strategies determined by the Marketing Working Group (including, without limitation, those set forth in the overall centrally funded marketing plan for each Product developed by the Marketing Working Group), and reviewed by the Territory Management Committee not later than 30 days after the date of the filing of the New Drug Application in such country, in the case of Clopidogrel Products, and as soon as practicable following the date hereof, in the case of Irbesartan Products. Each Marketing Plan shall contain a description of the basic commercialization strategy for such country, projected annual budgets and profit and loss statements for the Product for the first three calendar years after launch, provisions for the detailing of the Product, marketing strategy and provisions for the selling resource contributions of the Partners and their Affiliates.
(b) If the Alliance Strategic Committee determines that there will be Co-Promotion of the Products in any country in Territory B, a joint venture Marketing Entity (a “ Co-Promotion Entity ”) shall be established in such country. The form and structure of each Co-Promotion Entity shall be determined by the Finance Committee. 50.1 % of the voting power, profits and losses of each Co-Promotion Entity shall be owned by a direct or indirect majority-owned subsidiary of BMS, and 49.9% of the voting power, profits and losses of each such Co-Promotion Entity shall be owned by a direct or indirect majority-
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owned subsidiary of Sanofi. Each Co-Promotion Entity shall be the exclusive distributor of the Products in its country and shall enter into a distribution agreement with the Partnership, in a form to be agreed by the Partners (a “ Co-Promotion Distribution Agreement ”), and each Co-Promotion Entity shall engage local Affiliates of BMS and Sanofi to provide it with marketing and operating services pursuant to a Marketing and Operating Services Agreement in a form to be agreed by the Partners (a “ Marketing and Operating Services Agreement ”), each with such changes as are required by local law and market practice, including, without limitation, any requirement of local law pursuant to which a Marketing Entity is prohibited from purchasing any finished Product and may purchase only active substance chemical bulk.
(c) If the Alliance Strategic Committee determines that there will be Co-Marketing of the Products in any country in Territory B, the Alliance Strategic Committee shall designate direct or indirect majority-owned subsidiaries of BMS and Sanofi to be the co-exclusive distributors of the Products in such country, and each such subsidiary shall enter into a distribution agreement with the Partnership in a form to be agreed by the Partners (a “ Co-Marketing Distribution Agreement ” and, together with the Co-Promotion Distribution Agreement, the “ Distribution Agreements ”), with such changes as are required by local law and market practice, including, without limitation, any requirement of local law pursuant to which a Marketing Entity is prohibited from purchasing finished Product and may purchase only active substance chemical bulk. In any country in Territory B in which there will be Co-Marketing, the Co-Marketing Distribution Agreements to be entered into with the Marketing Entities shall be identical (except for the parties thereto) and shall be entered into concurrently. To the extent possible, each Partner shall rely exclusively on its or its Affiliates’ sales, marketing, promotion and distribution resources in each country in Territory B in which there will be Co-Marketing of the Products.
(d) The Alliance Strategic Committee may determine that there will be neither Co-Promotion nor Co-Marketing of the Products in any country in Territory B and, to the extent that special circumstances so dictate, may consider the promotion in such country by an Affiliate of only one Partner, sub-license with a Third Party, distribution or other arrangements.
SECTION 8.03. Non-Promotional Countries . In Non-Promotional Countries, the local Affiliates of the Partners shall not be required to enter into Distribution Agreements in order to market and sell the Products in such countries but, if they enter into any similar arrangement, shall be entitled to receive a fair return for the use of their resources. The Finance Committee shall prepare, and submit to the Territory Management Committee for its implementation, a decision as to the terms and conditions of the alternate distribution arrangements with such local Affiliates for such countries, including, without limitation, the rate of such fair return.
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SECTION 8.04. Administrative and Operating Services . The administrative and operating services required by the Partnership shall be provided pursuant to a partnership services agreement to be entered into between the Partnership and E.R. Squibb & Sons, Inc. in a form to be agreed to by the Partners (the “ Partnership Services Agreement ”).
SECTION 8.05. Development Services . The development services required for the Products shall be provided pursuant to a development services agreement to be entered into among the Partnership, E.R. Squibb & Sons, Inc. and an Affiliate of the Sanofi Partner in a form to be agreed to by the Partners (the “ Development Services Agreement ”).
SECTION 8.06. Irbesartan Know-How License . The Partnership shall grant BMS a [*], license, in a form to be agreed to by the Partners, for the use and commercialization of Irbesartan Products in the United States of America and for the term of the U.S. Irbesartan License, under any know-how concerning Irbesartan or Irbesartan Products funded, in whole or in part, by the Partnership.
SECTION 8.07. Patent and Trademark Actions . Either the BMS Partner or the Sanofi Partner, upon written notice to the Partnership, may cause the Partnership to (i) institute an infringement action against any Third Party based on any patent or trademark licensed to the Partnership, (ii) defend any suit by a Third Party against the Partnership, either Partner or any of their respective Affiliates for patent and/or trademark infringement involving Irbesartan, Clopidogrel or any Product in Territory B or (iii) defend any suit brought by a Third Party based on the invalidity or nullity of any patent licensed to the Partnership. The costs and expenses of such action or defense shall be borne by [*], and the settlement of any such action or defense shall be decided [*].
ARTICLE IX
TRANSFER OF PARTNERSHIP INTERESTS
SECTION 9.01. No Transfer . No Partnership Interest or beneficial interest therein may be sold, assigned, transferred, pledged or otherwise encumbered, in whole or in part, directly or indirectly, by operation of law or otherwise (including, without limitation, by merger, consolidation, dividend or distribution) (any such sale, assignment, transfer, pledge or encumbrance being hereinafter referred to as a “ Transfer ”), except as provided in Section 9.02 hereof, without the prior written consent of the other Partner (which consent may be given or withheld by such other Partner in its sole discretion). Any purported Transfer of any Partnership Interest or any beneficial interest therein in violation of this Article IX shall be null and void. No Partner shall, without the prior written consent of the other Partner (which consent may be given or withheld by such other Partner in its sole
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discretion), retire or withdraw from the Partnership except as a result of the final adjudication of such Partner as a bankrupt.
SECTION 9.02. Transfers to Affiliates . Notwithstanding anything to the contrary contained in Section 9.01 hereof, a Partner may Transfer any or all of its rights hereunder, including all or a portion of its Partnership Interest, to BMS or Sanofi or any Affiliate of BMS or Sanofi; provided, however, that the transferor shall remain liable for all of its obligations under this Agreement.
SECTION 9.03. New Partners . No Person shall become a Partner hereunder under any of the provisions hereof unless such Person shall expressly assume, and agree to be bound by, all of the terms and conditions of this Agreement. All reasonable costs and expenses incurred by the Partnership in connection with any Transfer and, if applicable, the admission of a Person as a Partner hereunder, shall be paid by the transferor. Upon compliance with all provisions hereof applicable to such Person becoming a Partner, the other Partner agrees to execute and deliver such amendments hereto as are necessary to constitute such Person as a Partner of the Partnership.
ARTICLE X
ADVERSE EVENT REPORTING
SECTION 10.01. Reporting Obligation . The BMS Partner and the Sanofi Partner shall each ensure that, in the marketing of the Products in Territory B, it and each of its respective Affiliates shall record, investigate, summarize and review all Adverse Events and Serious Adverse Events. Each Partner shall require that its Affiliates, sub-licensees and distributors adhere to all requirements of local law which relate to the reporting and investigation of Adverse Events and Serious Adverse Events, and each Partner shall require that its Affiliates, sub-licensees and distributors keep such Partner informed of such experiences.
SECTION 10.02. Reporting Procedure . (a) In order that each Partner may be fully informed of these experiences, each Partner shall report:
| (i) | In the case of Clopidogrel Products, to Sanofi at: |
Sanofi Pharma
82, avenue Raspail
94255 Gentilly Cedex, France
Attention: [omitted]
Facsimile: [omitted]
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| (ii) | In the case of Irbesartan Products, to BMS at: |
Bristol-Myers Squibb Company
P.O. Box 4000
Route 206 & Province Line Road
Princeton, NJ 08543 USA
Attention: Vice President, Worldwide Safety and Surveillance
Facsimile: [omitted]
all Adverse Events and Serious Adverse Events anywhere in the world; provided, however, that Serious Adverse Events shall be reported to the relevant Person, as set forth above, within three (3) working days of a Partner’s becoming aware of such an event (a “ Reporting Partner ”) and shall be reported by facsimile as provided above. The Reporting Partner shall report all other Adverse Events on a monthly basis. The Reporting Partner shall promptly notify the relevant Person, as provided above, of any complaint received by it in sufficient detail and in sufficient time to allow the relevant Person to comply with any and all regulatory requirements imposed upon it in any country. Each Partner shall also advise the relevant Person of any regulatory developments (e.g., proposed recalls, labeling and other registrational dossier changes, etc.) affecting either Product in any country in Territory B. Each of the BMS Partner and the Sanofi Partner shall have the right to review and/or request copies of any and all information and reporting forms generated or received by the relevant Person set forth above. These procedures may be modified from time to time by the Regulatory Committee (as such term is defined in the Know-How License Agreement).
(b) The Partners agree that, pursuant to the Alliance Support Agreement, BMS shall be responsible for making all determinations as to how Adverse Events and Serious Adverse Events concerning Irbesartan Products will be reported to the appropriate Governmental Authorities. The Partners agree that Sanofi shall be responsible for making all determinations as to how Adverse Events and Serious Adverse Events concerning Clopidogrel Products will be reported to the appropriate Governmental Authorities.
ARTICLE XI
TERMINATION
SECTION 11.01. Dissolution . The Partnership shall be dissolved and its business wound up upon the first to occur of any of the following events (the date of such occurrence being the “ Termination Date ”):
(a) the written agreement of each of the Partners to dissolve the Partnership;
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(b) a good faith determination by one or both Partners that the commercialization of both Products should be suspended because of Safety Problems in accordance with Section 7.04 of the Alliance Support Agreement; or
(c) expiration of the term of this Agreement in accordance with Section 2.05 hereof.
SECTION 11.02. Product Termination . In the event that the commercialization of one Product is terminated throughout Territory B by either BMS or Sanofi in accordance with Section 7.04 of the Alliance Support Agreement, then the Partners shall amend and restate this Agreement to delete any reference to the development, purchase, sale, marketing, promotion or commercialization of such Product.
SECTION 11.03. Effect of Dissolution; Termination . In all cases of dissolution of the Partnership, the business of the Partnership shall be wound up, and the Partnership terminated as promptly as practicable thereafter, and each of the following shall be accomplished:
(a) The BMS Partner shall cause to be prepared a statement setting forth the assets and liabilities of the Partnership as of the date of dissolution, a copy of which statement shall be furnished to all of the Partners;
(b) The Parties shall, and shall cause their respective Affiliates to, terminate the Partnership Services Agreement and the Development Services Agreement, as well as all arrangements and agreements of the Marketing Entities with respect to the Products (including, without limitation, all Distribution Agreements between the Partnership and each Marketing Entity), and, except in the case of termination relating to a Safety Problem, the Partnership shall sell, license or otherwise dispose of the Partnership’s remaining assets, rights and obligations under the Clopidogrel License and Supply Agreement, the Irbesartan License Agreement, the Irbesartan Supply Agreement, the Know-How License Agreement, the Puerto Rico Purchase and Sale Agreement and the Toll Manufacturing Agreements, other than the rights to use the corporate names and trademarks containing the words “BMS”, “Bristol-Myers Squibb” or “Sanofi”; provided, however, that any obligation to supply active substance chemical bulk or finished Products set forth in any such agreement shall terminate on the first anniversary of such sale, license or other disposition;
(c) Any gain or loss realized by the Partnership upon such sale shall be allocated to the Partners in the manner set forth in Article IV hereof; and
(d) The proceeds of such sale shall be applied and distributed as follows and in the following order of priority:
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(i) To the payment of the debts and liabilities of the Partnership and the expenses of liquidation;
(ii) To the setting up of any reserves which the Partners shall determine to be reasonably necessary for contingent, unliquidated or unforeseen liabilities or obligations of the Partnership or the Partners arising out of, or in connection with, the Partnership. Such reserves may, as mutually decided by the Partners, be paid over to a national bank selected by them and authorized to conduct business as an escrowee to be held by such bank as escrowee for the purposes of disbursing such reserves to satisfy the liabilities and obligations described above, and at the expiration of such period as the Partners deem advisable, distributing any remaining balance as provided in clause (iii) below; and
(iii) The balance, if any, to the Partners in accordance with their Partnership Interests.
SECTION 11.04. Liquidating Partner . The BMS Partner is hereby irrevocably appointed as the true and lawful attorney of the Partnership in the name, place and stead of each of the Partners, such appointment being coupled with an interest, to make, execute, sign, acknowledge and file with respect to the Partnership all papers which shall be necessary or desirable to effect the dissolution and termination of the Partnership in accordance with the provisions of this Article XI. Without limiting the foregoing, the BMS Partner shall, upon the final dissolution of the Partnership, file an appropriate certificate to such effect in the proper governmental office or offices under the Act as then in effect. Notwithstanding the foregoing, each Partner, upon the request of the BMS Partner, shall promptly execute, acknowledge and deliver all such documents, certificates and other instruments as the BMS Partner shall reasonably request to effectuate the proper dissolution and termination of the Partnership, including the winding up of the business of the Partnership.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Notices . All notices, requests, claims, demands and other communications hereunder (collectively, “ Notices ”) shall be in writing, shall be in the English language, and shall be given or made by delivery in person, by courier service, by facsimile (with receipt confirmed) or by registered or certified mail (return receipt requested, with postage prepaid), to the respective Persons at the following addresses:
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If to the Partnership or the BMS Partner, to:
Bristol-Myers Squibb Company Investco, Inc.
P.O. Box 4000
Route 206 & Province Line Road
Princeton, NJ 08543-4000 USA
| Attention: | Vice President and Senior Counsel, |
| Pharmaceutical Research Institute, and |
| Worldwide Franchise Management and |
| Business Development |
| Facsimile: | [omitted] |
| Attention: | Vice President, Alliance Management |
| Facsimile: | [omitted] |
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022 USA
| Attention: | [omitted] |
| Facsimile: | [omitted] |
If to the Sanofi Partner, to:
Sanofi Pharmaceuticals, Inc.
90 Park Avenue
New York, NY 10016 USA
| Attention: | Senior Vice President and General Counsel |
| Facsimile: | [omitted] |
with a copy to:
Sanofi
32-34, rue Marbeuf
75008 Paris, France
| Attention: | Directeur Juridique |
| Facsimile: | [omitted] |
| Attention: | Directeur Juridique Adjoint |
| Facsimile: | [omitted] |
| Attention: | Vice President, Alliance Management |
| Facsimile: | [omitted] |
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Cleary, Gottlieb, Steen & Hamilton
41, avenue de Friedland
75008 Paris, France
| Attention: | [omitted] |
| Facsimile: | [omitted] |
Any Partner may designate another addressee (and/or change its address) for Notices hereunder by a Notice given pursuant to this Section 12.01. All Notices given to any Partner in accordance with the provisions of this Section 12.01 shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile, or on the date ten business days after dispatch by certified or registered mail (postage prepaid) if mailed.
SECTION 12.02. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts executed and performed entirely in that state.
SECTION 12.03. Specific Performance . Each Partner agrees that its respective Partnership Interest is unique, and that a failure by any Partner to perform its obligations under this Agreement will result in irreparable damage, and that specific performance of such obligations may be obtained without the posting of any bond or other security; provided, however, that the powers of the arbitrators under this Section 12.03 shall be limited to enforcing the obligations provided for in this Agreement as drafted.
SECTION 12.04. Dispute Resolution . All disputes between the Partners arising in connection with this Agreement shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with such Rules with the proceedings conducted in the English language in Paris, France. The president of any arbitral tribunal shall not be a citizen either of the United States of America or the French Republic.
SECTION 12.05. Headings . All titles or captions contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
SECTION 12.06. No Third Party Beneficiaries . This Agreement shall be binding upon and inure solely to the benefit of the Partners and permitted assigns, and nothing herein, express or implied, is intended to, or shall confer upon, any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.
SECTION 12.07. Severability . If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any applicable law
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or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Partner. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Partners hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Partners as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
SECTION 12.08. Assignment . This Agreement may be assigned by a Partner only to an Affiliate of Sanofi or BMS in the event of a corporate reorganization (including to an entity that becomes an Affiliate in connection with such reorganization) involving the assumption of all or substantially all of such Partner’s marketing or manufacturing functions in Territory B by such Affiliate, in which event rights may be assigned and obligations may be delegated to such Affiliate, except in accordance with a Transfer permitted by Section 9.02 hereof.
SECTION 12.09. Consents . Any consent or approval to any act or matter required under this Agreement must be in writing and shall apply only with respect to the particular act or matter to which such consent or approval is given, and shall not relieve any Partner from the obligation to obtain the consent or approval, as applicable, wherever required under this Agreement to any other act or matter.
SECTION 12.10. Entire Agreement . This Agreement constitutes the entire agreement of the Partners with respect to the subject matter contained herein and all prior agreements relative thereto which are not contained herein are terminated.
SECTION12.11. Waivers and Amendments . No modification of or amendment to this Agreement shall be valid unless in a writing signed by both Partners referring specifically to this Agreement and stating the Partners’ intention to modify or amend the same. Any waiver of any term or condition of this Agreement shall be in a writing signed by the Partner sought to be charged with such waiver referring specifically to the term or condition to be waived, and no such waiver shall be deemed to constitute the waiver of any other term or condition of this Agreement.
SECTION 12.12. Not for Benefit of Creditors . The provisions of this Agreement are intended only for the regulation of relations between the Partners and relations between the Partners and the Partnership. This Agreement is not intended for the benefit of non-Partner creditors, and no rights are granted to non-Partner creditors hereunder.
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SECTION 12.13. Counterparts . This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts., each of which when executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Partners have duly executed this Agreement as of the day and year first above written.
|
BRISTOL-MYERS SQUIBB COMPANY INVESTCO, INC. |
||
| BY: | /s/ [signature illegible] | |
| Name: | ||
| Title: | ||
| SANOFI PHARMACEUTICALS, INC. | ||
| BY: | /s/ [signature illegible] | |
| Name: | ||
| Title: | ||
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Schedule 1.01
TERRITORY B 1
|
North America
|
Oceania
|
|
| Canada | Australia | |
| Mexico | Fiji | |
| United States of America (including, without | Kiribati | |
|
limitation, Puerto Rico, the |
Mariana, Caroline and | |
|
U.S. Virgin Islands, Guam and |
Marshall Islands | |
|
American Samoa) for Clopidogrel |
Nauru | |
|
only |
New Zealand | |
| Papua New Guinea | ||
| Pitcairn Islands | ||
| Central America and the West Indies | Samoa (non-U.S.) | |
| Solomon Islands | ||
| Tonga | ||
| Anguilla | Tuvalu | |
| Antigua | Vanuatu | |
| Aruba | ||
| Bahamas | ||
| Barbados | South America | |
| Belize | ||
| Bermuda | Argentina | |
| Cayman Islands | Bolivia | |
| Cosia Rica | Brazil | |
| Dominica | Chile | |
| Dominican Republic | Colombia | |
| Grenada | Ecuador | |
| Guatemala | Falkland Islands | |
| Haiti | Guyana | |
| Honduras | Paraguay | |
| Jamaica | Peru | |
| Montserrat | Surinam | |
| Netherlands Antilles | Uruguay | |
| Nicaragua | Venezuela | |
| Panama | ||
| St. Kitts-Nevis | ||
| St. Lucia | ||
| St. Vincent and the Grenadines | ||
| El Salvador | ||
| Trinidad and Tobago | ||
| Turks and Caicos Islands | ||
| Virgin Islands (British) |
| 1 |
Territory B will be deemed to include any country created by the division consolidation or change of name of the countries listed above. |
79606/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 7.01(a)(iii)-1
ANNUAL BUDGETARY TARGETS 1
TERRITORY B
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PRODUCT |
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($000s) |
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Total
Territory |
Territory B
Partnership 5 |
Total
Local JVs |
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Net Sales 3 4 |
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Standard Cost of Sales |
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Other Cost of Sales |
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ICP |
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Management Cost of Sales |
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Management Gross Margin |
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Distribution |
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Management Gross Margin |
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Direct Product Expenses |
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Samples |
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Advertising/Promotion |
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Clinicals |
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Salesforce |
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Other Direct Costs |
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Variable Product Contribution |
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Allocated Costs |
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Marketing |
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Medical |
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Administration |
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Other Income/Expense |
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Interest |
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Other |
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JV Profit/Loss Before Selling |
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Effort Remuneration |
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Selling Effort Remuneration |
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JV Profit/Loss 5 |
| 1 |
To be prepared on a management information basis. |
| 2 |
Provided for information only |
| 3 |
Only these items are subject to approval. |
| 4 |
Sales information will also be provided for countries in which there is Co-Marketing. |
| 5 |
Includes central R&D, central marketing and other direct costs of the Territory B Partnership. * Provide Detail. |
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 7.01(a)(iii)-2
LONG-RANGE PLANS 1
TERRITORY B
| PRODUCT | ||||||||||
| ($000s) | ||||||||||
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Budget
1997 |
1998 |
Projection
1999 |
2000 | |||||||
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Net Sales 2 3 |
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Standard Cost of Sales |
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Other Cost of Sales |
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ICP |
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Management Cost of Sales |
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Management Gross Margin |
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Distribution |
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Management Gross Margin |
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Direct Product Expenses |
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Samples |
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Advertising/Promotion |
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Clinicals |
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Salesforce |
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Other Direct Costs |
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Variable Product Contribution |
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Allocated Costs |
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Marketing |
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Medical |
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Administration |
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Other Income/Expense |
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Interest |
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Other |
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JV Profit/Loss Before Selling |
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Effort Remuneration |
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|
Selling Effort Remuneration |
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| JV Profit/Loss 3 |
| 1 |
To be prepared on a management information basis. |
| 2 |
Only these items are subject to approval. |
| 3 |
Sales information will also be provided for countries in which there is Co-Marketing. |
| * |
Provide detail |
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 7.02(b)
BY-LAWS OF THE
TERRITORY MANAGEMENT COMMITTEE
The following rules are adopted in accordance with the Partnership Agreement dated as of January 1, 1997 between the BMS Partner and the Sanofi Partner (the “ Partnership Agreement ”) with respect to the operation of the Territory Management Committee (the “ Committee ”), and may be amended or modified solely by the unanimous vote of the Committee. All capitalized terms used but not defined herein shall have the meaning assigned to them in the Partnership Agreement, as the same may be amended from time to time.
1. Chairman and Co-Chairman . The meetings of the Committee shall be presided over by a chairman (the “ Chairman ”) and, in his or her absence, by a co-chairman (the “ Co-Chairman ”). The BMS Partner and the Sanofi Partner shall appoint, respectively, the Chairman and the Co-Chairman.
2. Regular Meetings . The Committee by resolution shall provide for the holding of regular meetings and shall fix the times and places at which such meetings shall be held; provided, however, that such meetings shall be held not less than once each calendar quarter. Notice of regular meetings shall not be required to be given; provided, however, that whenever the time or place of regular meetings shall be fixed or changed, notice of such action shall be mailed promptly to each Committee member who shall not have been present at the meeting at which such action was taken, addressed to such member at his or her usual place of business, not more than 10 days after the date of the meeting at which such action was taken. Meetings shall be held in Paris, New York or such other place as the Chairman shall reasonably designate.
3. Special Meetings . Special meetings of the Committee shall be held upon call by or at the direction of the Chairman or the Co-Chairman, or any two Committee members. Except as otherwise agreed by all of the Committee members, notice of each special meeting shall be sent by facsimile (with confirmed receipt) to each Committee member, addressed to such member at his or her usual place of business, at least 10 days before the day on which the meeting is to be held. Such notice shall state the time, place and agenda of such meeting. Any Committee member who shall attend a meeting in person shall be deemed to have waived notice of such meeting, unless expressly stated otherwise. Special meetings shall be held in Paris, New York or such other place as the Chairman shall reasonably designate.
4. Quorum and Manner of Acting . At each meeting of the Committee, the presence of a majority of the members of the Committee, which majority shall include at least two members appointed by the Sanofi Partner and at least two members appointed by the BMS Partner, shall be necessary to constitute a quorum for the transaction of business. In the absence
79606/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
2
of a quorum, a majority of those present at the time and place of any meeting may adjourn the meeting from time to time, but not beyond 30 days following the date of such meeting, upon written notice to the absent members, until a quorum shall be present and the meeting may be held as adjourned. Except as otherwise agreed by all of the Committee members, or as set forth in the Partnership Agreement, the majority vote of all Committee members present or represented at any meeting at which a quorum is present is required to decide any question brought before such meeting.
5. Resignation of Committee Members . Any Committee member may resign at any time by giving written notice of such resignation to the Chairman and the Co-Chairman. Unless otherwise specified in such notice, such resignation shall take effect upon receipt thereof by the Chairman and the Co-Chairman, and the acceptance of such resignation shall not be necessary to make it effective.
6. Removal of Committee Member . By written notice to the other Partner, either Partner shall have the right, at any time, to replace any or all of the members designated by it on the Committee or fill any vacancy occurring with respect to those it designated, without the consent of the other Partner; provided, however, that any new appointee shall be the person replacing the removed Committee member in the position enumerated in Section 7.02(a) of the Partnership Agreement in which such removed Committee member served or, if any such position has been modified or eliminated, in a position that is substantially similar to the position so modified or eliminated.
7. Compensation of Committee Members . Committee members shall not receive compensation for their services as such, whether in the form of salary or a fixed fee for attendance at meetings. Nothing herein contained shall be construed to preclude any Committee member from serving the Partner he or she represents on the Committee in any other capacity and receiving compensation therefor from such Partner.
8. Action Without a Meeting . Subject to the terms of (a) the Partnership Agreement and (b) applicable law, any action which might have been taken under these by-laws by vote of the Committee members at any meeting of the Committee may be taken without a meeting if all the Committee members consent thereto in writing, and the writing or writings are filed with the minutes of the Committee.
9. Telephone Meetings and Video Conferences . The Committee may hold, and any Committee member may participate in, a meeting of the Committee by means of conference telephone, video conference or similar communication equipment which enables all Committee members participating in the meeting to hear and speak to each other, and participation in a meeting pursuant to this paragraph 9 shall constitute presence in person at the meeting.
79606/PA1
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3
10. Proxies . Each member of the Committee may, to the extent permitted by applicable law, authorize another person belonging to the senior management of BMS or Sanofi or of their respective Affiliates to act for him or her by duly executed proxy, and presence of such authorized person shall constitute presence of such member in person at a meeting.
11. Minutes . The Committee shall keep suitable written records of the relevant results of its meetings and report the same to each Committee member. Such written records shall be kept in English. Written reports of each meeting of the Committee, including major recommendations, shall be delivered to all Committee members and all persons designated by the Partners within 30 days following the date of such meeting, and shall be deemed to have been approved in the absence of an objection on the 15th day after the date of such delivery.
79606/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Exhibit 10.4
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
TERRITORY A
ALLIANCE SUPPORT AGREEMENT
between
SANOFI
and
BRISTOL-MYERS SQUIBB COMPANY
dated as of January 1, 1997
|
TABLE OF CONTENTS
|
||||
| Page | ||||
|
ARTICLE I
DEFINITIONS |
||||
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SECTION 1.01. |
Defined Terms | 3 | ||
|
SECTION 1.02. |
Additional Defined Terms | 8 | ||
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SECTION 1.03. |
Accounting Terms | 9 | ||
|
ARTICLE II
REPRESENTATIONS AND WARRANTIES |
||||
|
SECTION 2.01. |
BMS Representations | 9 | ||
|
SECTION 2.02. |
Sanofi Representations | 11 | ||
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ARTICLE III
MANAGEMENT OF THE ALLIANCE |
||||
|
SECTION 3.01. |
Alliance Strategic Committee | 12 | ||
|
SECTION 3.02. |
Alliance Functional Committees | 13 | ||
|
SECTION 3.03. |
Finance Committee | 13 | ||
|
SECTION 3.04. |
Manufacturing and Sourcing Committee | 13 | ||
|
SECTION 3.05. |
Committee Composition and Decision Making | 14 | ||
|
SECTION 3.06. |
Deadlock Resolution | 14 | ||
|
SECTION 3.07. |
Alliance Management | 16 | ||
|
SECTION 3.08. |
Cross-Territory Issues | 16 | ||
|
SECTION 3.09. |
Implementation of Decisions | 17 | ||
|
SECTION 3.10. |
Delegation | 17 | ||
|
ARTICLE IV
BUDGETARY PROCESS |
||||
|
SECTION 4.01. |
Budgetary Development | 17 | ||
|
SECTION 4.02. |
Budgetary Deadlocks | 18 | ||
|
SECTION 4.03. |
Out-of-Budget Situations | 18 | ||
SS_NYL2/171613 2 (PA_1/79522 2)
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| Page | ||||
| ARTICLE V | ||||
| ADDITIONAL AGREEMENTS | ||||
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SECTION 5.01. |
Termination of Master Territory A Agreement | 18 | ||
|
SECTION 5.02. |
Non-Competition | 19 | ||
|
SECTION 5.03. |
Confidentiality | 19 | ||
|
SECTION 5.04. |
Insurance | 20 | ||
|
SECTION 5.05. |
Further Assurances | 20 | ||
|
SECTION 5.06. |
Adverse Event Reporting | 20 | ||
|
SECTION 5.07. |
Registration; Labeling | 22 | ||
|
SECTION 5.08. |
Selling Efforts | 22 | ||
|
SECTION 5.09. |
Transfer of the SNC Partnership | 24 | ||
| ARTICLE VI | ||||
| INDEMNIFICATION | ||||
|
SECTION 6.01. |
General Indemnification | 24 | ||
|
SECTION 6.02. |
Special Indemnities | 24 | ||
|
SECTION 6.03. |
Indemnification Procedures | 25 | ||
| ARTICLE VII | ||||
| TERM AND TERMINATION | ||||
|
SECTION 7.01. |
Term; Expiration | 27 | ||
|
SECTION 7.02. |
Right of Country Termination | 27 | ||
|
SECTION 7.03. |
Consequences of Country Termination | 28 | ||
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SECTION 7.04. |
Right of Product Termination Throughout Territory A | 30 | ||
|
SECTION 7.05. |
Consequences of Product Termination Throughout Territory A | 30 | ||
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SECTION 7.06. |
Right of Alliance Termination | 33 | ||
|
SECTION 7.07. |
Consequences of Alliance Termination | 34 | ||
|
SECTION 7.08. |
Special Put Option | 35 | ||
|
SECTION 7.09. |
Interim Termination Period | 36 | ||
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SS_NYL2/171613 2 (PA_1/79522 2) |
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* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
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ARTICLE VIII
MISCELLANEOUS |
||||
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SECTION 8.01. |
Notices | 37 | ||
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SECTION 8.02. |
Governing Law | 38 | ||
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SECTION 8.03. |
Specific Performance | 38 | ||
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SECTION 8.04. |
Dispute Resolution | 38 | ||
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SECTION 8.05. |
Headings | 38 | ||
|
SECTION 8.06. |
No Third Party Beneficiaries | 39 | ||
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SECTION 8.07. |
Severability | 39 | ||
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SECTION 8.08. |
Assignment | 39 | ||
|
SECTION 8.09. |
Consents | 39 | ||
|
SECTION 8.10. |
Entire Agreement | 39 | ||
|
SECTION 8.11. |
Waivers and Amendments | 39 | ||
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SECTION 8.12. |
Expenses | 40 | ||
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SECTION 8.13. |
No Partnership or Joint Venture | 40 | ||
|
SECTION 8.14. |
Counterparts | 40 | ||
SCHEDULES
| Schedule 1.01 (a) | Alliance Agreements | |
| Schedule 1.01(b) | Territory A | |
| Schedule 1.01(c) | Territory B | |
| Schedule 4.01(a)-l | Template for Annual Budgetary Targets | |
| Schedule 4.01(a)-2 | Template for Long-Range Plans | |
| Schedule 5.07(b) | Trademarks to Be Used in Territory A | |
| Schedule 5.08(c) | “[*]” Formula | |
| Schedule 7.03 | “[*]” Formula |
|
SS_NYL2/171613 2 (PA_1/79522 2) |
iii |
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
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TERRITORY A ALLIANCE SUPPORT AGREEMENT dated as of January 1, 1997 between Sanofi, a socièté anonyme organized under the laws of the French Republic (“ Sanofi ”), and Bristol-Myers Squibb Company, a Delaware corporation (“ BMS ” and, together with Sanofi, the “ Parties ” and, individually, each a “ Party ”);
W I T N E S S E T H :
WHEREAS, BMS, Sanofi and Sterling Winthrop Inc., a Delaware corporation (“ Sterling ”), entered into a Development Agreement dated as of July 29, 1993 (the “ Development Agreement ”) concerning the development of two new chemical entities discovered and patented by Sanofi, one known as SR 47436, with the international non-proprietary name Irbesartan (“ Irbesartan ”) and one known as SR 25990C with the international non-proprietary name Clopidogrel Hydrogenosulphate (“ Clopidogrel ”), each with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;
WHEREAS, BMS, Sanofi and Sterling entered into a Master Territory A Agreement dated as of July 29, 1993 (the “ Master Territory A Agreement ”), for the commercialization of the Products in Territory A (as such terms are defined herein);
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30, 1994 among Eastman Kodak Company, Sanofi and Sterling, Sanofi acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Master Territory A Agreement and the Development Agreement;
WHEREAS, in accordance with Section 4.1.1 of the Master Territory A Agreement, BMS and Sanofi have determined an appropriate legal structure to be implemented for the commercialization of the Products in Territory A;
WHEREAS, Sanofi and BMS have formed, through their indirect wholly owned subsidiaries, Sanofi Pharma Bristol-Myers Squibb, a société en nom collectif organized under the laws of the French Republic (the “ SNC Partnership ”), to effectuate certain of the transactions outlined in the Master Territory A Agreement and, in furtherance thereof, the SNC Partnership will, among other things, procure the active substance chemical bulk used in the Products, enter into arrangements for the processing of such active substance chemical bulk and the packaging, if applicable, of the finished Products into bottles and blister packs, pay royalties for the use of certain patents, trademarks and know-how necessary for the Products, coordinate the maintenance of adequate supplies of such active substance chemical bulk and finished Products, arrange for the distribution of finished Products by the Marketing Entities (as defined herein), ensure the quality of finished Products, coordinate the local marketing of finished Products and further develop the Products in Territory A;
SS_NYL2/171613 2 (PA_1/79522 2)
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
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WHEREAS, in furtherance of commercializing the Products in Territory A, the Parties and their respective Affiliates intend to enter into the following agreements:
(a) Amended and Restated Status (the “ SNC By-Laws” ) between BMS Investco and Sanofi Participations for the SNC Partnership and Règlement Intérieur (the “ Règlement Intérieur ”) for the SNC Partnership and its managing body, the Territory Management Committee (the “ Territory Management Committee ”);
(b) a Clopidogrel Intellectual Property License and Supply Agreement (the “ Clopidogrel License and Supply Agreement ”) between the SNC Partnership and Sanofi for the license of certain patent, trademark and know-how rights for Clopidogrel and Clopidogrel Products from Sanofi to the SNC Partnership and the supply of active substance chemical bulk for Clopidogrel in exchange for the payment to Sanofi of the Discovery Royalty and the Supply Payment (as such terms are defined therein);
(c) an Irbesartan Intellectual Property License Agreement (the “ Irbesartan License Agreement ”) between the SNC Partnership and Sanofi for the license of certain patent, trademark and know-how rights for Irbesartan and Irbesartan Products (as defined herein) from Sanofi to the SNC Partnership in exchange for the payment to Sanofi of the Discovery Royalty (as such term is defined therein);
(d) an Irbesartan Supply Agreement (the “ Irbesartan Supply Agreement ”) among BMS, Sanofi, the SNC Partnership and their respective Affiliates for the supply of active substance chemical bulk for Irbesartan;
(e) a Product Know-How License Agreement (the “ Know-How License Agreement ”) among the SNC Partnership, Sanofi and BMS for the license of know-how developed by Sanofi and BMS pursuant to the Development Agreement, the use of corporate names by the SNC Partnership and the development of Irbesartan and Clopidogrel on or after January 1, 1997 in exchange for the payment of the Development Royalty (as such term is defined therein) to each of Sanofi and BMS;
(f) a Development Services Agreement (the “ Development Services Agreement ”) among the SNC Partnership and Affiliates of Sanofi and BMS pursuant to which such Affiliates will provide services to the SNC Partnership in connection with the continuing development of the Products;
(g) an Irbesartan Toll Manufacturing Agreement (the “ Irbesartan Toll Manufacturing Agreement ”) for the contract manufacturing of active substance chemical bulk for Irbesartan into Irbesartan Products;
SS_NYL2/171613 2 (PA_1/79522 2)
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(h) a Clopidogrel Toll Manufacturing Agreement (the “ Clopidogrel Toll Manufacturing Agreement ” and, together with the Irbesartan Toll Manufacturing Agreement, the “ Toll Manufacturing Agreements ”) for the contract manufacturing of active substance chemical bulk for Clopidogrel into Clopidogrel Products;
(i) a Purchase and Sale Agreement (the “ Puerto Rico Purchase and Sale Agreement ”) among the SNC Partnership and Affiliate(s) of BMS for the sale of active substance chemical bulk to such Affiliate(s) and the purchase of finished Products; and
(j) a Partnership Services Agreement (the “ Partnership Services Agreement ”) between the SNC Partnership and an Affiliate of Sanofi for the provision of administrative and operating services to the SNC Partnership; and
WHEREAS, the Parties wish to enter into this Agreement to support the general framework for the commercialization and development of the Products in Territory A;
NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions contained herein, and for other good, valuable and binding consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Product of which any Party or any of its Affiliates becomes aware, whether or not considered drag related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.
“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however, that, with respect to Sanofi, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Sanofi that would be an Affiliate of Sanofi solely by reason of its being controlled by Elf Aquitaine. For the purposes of
SS_NYL2/171613 2 (PA_1/79522 2)
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this definition, “ control ” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person or to veto any material decision relating to the management or policies of a Person, in each case whether through the ownership of voting securities, by contract or otherwise, (b) the beneficial ownership, directly or indirectly, of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial ownership of at least 50% of the partnership interests of a general partnership. The Parties confirm that each Co-Promotion Entity in Territory A shall be considered to be an Affiliate of Sanofi.
“ Agreement ” means this Territory A Alliance Support Agreement, as originally executed and as amended, modified, supplemented or restated from tune to time, in accordance with Section 8.11 hereof.
“ Alliance Agreements ” means the agreements listed in Schedule 1.01(a) attached hereto, as well as any other agreement entered into by any Affiliate of BMS or Sanofi, as the case may be, in furtherance of the development and/or commercialization of any Product in Territory A.
“ Beneficial owner ” has the meaning set forth in Rule 13d-3 of the U.S. Securities Exchange Act of 1934, as amended.
“ BMS Affiliate ” means an Affiliate of BMS.
“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof.
“ Co-Marketing ” means, for each Product and for any country in Territory A, the marketing of such Product in such country under two or more trademarks by the applicable Marketing Entities.
“ Co-Promotion ” means, for each Product and any country in Territory A, the marketing of such Product in such country under one trademark by me applicable Marketing Entity.
“ Competing Product ” means, with respect to any Product, any other product that [*], but which is not [*]set forth in Schedule [*] or selected for [*] by [*].
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“ Damages ” means any liability (whether arising out of [*] or otherwise), obligation, loss, fine, damages, arbitration award, settlement amount, penalty, claim, cost or expense (including, without limitation, [*], fees and expenses [*], but excluding any [*]). Damages shall include, without limitation, [*] liability,[*] liability (including, without limitation, any liability relating to [*] and damages for [*].
“ Development Committee ” has the meaning set forth in the Know-How License Agreement.
“ Elf Aquitaine ” means Société Nationale Elt Aquitaine, a société anonyme organized under the laws of the French Republic.
“ Encumbrance ” means any security interest, pledge, mortgage, lien (including, without limitation, tax liens), charge, encumbrance, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.
“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.
“ Irbesartan Product ” means the product or products having as an active ingredient Irbesartan or any salt, ester, metabolite or pro-drug thereof.
“ License Functional Committee ” has the meaning set forth in the Know-How License Agreement.
“ License_Steering Committee ” has the meaning set forth in the Know-How License Agreement.
“ License Strategic Decision ” has the meaning set forth in the Know-How License Agreement.
“ Line Extension ” means, for each Product and with respect to development conducted on or after January 1, 1997, any new dosage or new form of administration of such Product.
SS_NYL2/171613 2 (PA_1/79522 2)
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“ Loss of Exclusivity ” means the loss of exclusivity of a Product in any country in Territory A upon the occurrence of all of the three following conditions: (i) such Product shall have lost its marketing exclusivity (whether by virtue of compulsory license under, or expiration, invalidity or unenforceability of, the patents covering such Product, loss or expiration of any exclusivity conferred de facto or de jure by any statutory marketing or data exclusivity or any other cause); (ii) one or more Competing Products shall have been legally marketed in such country by one or more Third Parties; and (iii) Net Sales of such Product in such country over any period of [*] (after the conditions set forth in sub-clauses (i) and (ii) above shall have been satisfied) shall have [*] the level of Net Sales of such Product in such country over the immediately preceding period of [*]).
“ Major A Country ” means France, Germany, Italy, Spain and the United Kingdom, and any country in Territory A representing at least [*] of aggregate Net Sales of both Products in Territory A, as determined from time to time by [*].
“ Market Penetration ” means, with respect to one or more, Competing Products in any given country in Territory A, the number of units of such Competing Products sold in such country, expressed as a percentage of the sum of (i) the [*] with respect to which [*] constitute [*]and (ii) [*], in each case over a period of [*], as reported by [*].
“ Marketing Entity ” has the meaning set forth under the definition Entité de Marketing in the Règlement Intérieur.
“ Net Sales ” means for any given period and with respect to any Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any transfers between any Party and its Affiliates for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outdating or the return of such Product.
“ New Indication ” means, for each Product and with respect to development conducted on or after January 1, 1997, any new therapeutic use or application of such Product.
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“ Person ” means any individual, partnership, firm, corporation, société anonyme, société en nom collectif, société en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.
“ Product ” means a Clopidogrel Product or an Irbesartan Product, and “ Products ” means both a Clopidogrel Product and an Irbesartan Product.
“ Sanofi Affiliate ” means an Affiliate of Sanofi.
“ Sanofi Pharma ” means Sanofi Pharma, a société anonyme organized and existing under the laws of the French Republic.
“ Selling Effort Remuneration ” means, for each country in which there is Co-Promotion of the Products, the aggregate remuneration paid by the Co-Promotion Entity in such country to the local Affiliates of the Parties to compensate them for their selling efforts, which shall be an amount equal to [*] of Net Sales of the Products in such country, subject to adjustment, or as otherwise determined by [*].
“ Serious Adverse Event ” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.
“ Territory ” means either Territory A or Territory B and “ Territories ” means both Territory A and Territory B.
“ Territory A ” means the countries and geographic areas described and listed in Schedule 1.01(b) attached hereto.
“ Territory B ” means the countries and geographic areas described and listed in Schedule l.01(c) attached hereto. which shall not include the United States of America for Irbesartan Products.
“ Third Party ” means a Person who or which is neither a Party nor an Affiliate of a Party.
“ United States of America ” means any State or Commonwealth of the United States of America, the District of Columbia, Puerto Rico, the U.S. Virgin Islands,
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Guam, American Samoa and any other territory, possession or military base of the United States of America.
“
U.S. GAAP
” means generally accepted accounting principles in the United States of America in effect from time to time
SECTION 1.02. Additional Defined Terms. The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:
|
Defined Term |
Section Where Defined | |
|
Alliance Functional Committees |
3.02 | |
|
Alliance Management |
3.07 | |
|
Alliance Strategic Committee |
3.01 | |
|
Alliance Strategic Decisions |
3.01 | |
|
Annual Budgetary Targets |
4.01(a) | |
|
BMS |
Preamble | |
|
Breaching Party |
7.06(iii) | |
|
Clopidogrel |
Recitals | |
|
Clopidogrel License and Supply Agreement |
Recitals | |
|
Clopidogrel Toll Manufacturing Agreement |
Recitals | |
|
Concerned Party |
7.05(b) | |
|
Confidential Information |
5.03(a) | |
|
Co-Promotion Entity |
4.01(a) | |
|
Country Non-Terminating Party |
7.03 | |
|
Country Terminating Party |
7.03 | |
|
Covered Activities |
6.02(a) | |
|
Development Agreement |
Recitals | |
|
Development Services Agreement |
Recitals | |
|
Finance Committee |
3.02 | |
|
First Party |
6.02(a) | |
|
Indemnified Party |
6.03(a) | |
|
Indemnifying Party |
6.03(a) | |
|
Indemnity Notice |
6.03(d) | |
|
Independent Firm |
7.08(a)(i) | |
|
Irbesartan |
Recitals | |
|
Irbesartan License Agreement |
Recitals | |
|
Irbesartan Supply Agreement |
Recitals | |
|
Irbesartan Toll Manufacturing Agreement |
Recitals | |
|
Know-How License Agreement |
Recitals | |
|
Long-Range Plans |
4.01(a) |
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|
Manufacturing and Sourcing Committee |
3.02 | |
|
Master Territory A Agreement |
Recitals | |
|
Multiple |
7.08(a) | |
|
Non-Concerned Party |
7.05(b)(ii) | |
|
Non-Renewal Valuation |
7.08(a) | |
|
Notices |
8.01 | |
|
Partnership Services Agreement |
Recitals | |
|
Party |
Preamble | |
|
Proposed Multiple |
7.08(a)(i) | |
|
Puerto Rico Purchase and Sale Agreement |
Recitals | |
|
Réglement Intérieur |
Recitals | |
|
Reporting Party |
5.06(b) | |
|
Revised Projection |
4.03 | |
|
Safety Expert |
7.05(b)(ii) | |
|
Safety Problem |
7.04(ii) | |
|
Sanofi |
Preamble | |
|
SNC By-Laws |
Recitals | |
|
SNC Partnership |
Recitals | |
|
Sterling |
Recitals | |
|
Territory A Budget |
4.01(a) | |
|
Territory Management Committee |
Recitals | |
|
Third Party Claim |
6.03(a) | |
|
Toll Manufacturing Agreements |
Recitals | |
|
Unsatisfactory Final Outcome |
3.06(b) |
SECTION 1.03. Accounting Terms . Except as otherwise specifically provided herein, all terms herein that relate to accounting matters shall be interpreted in accordance with U.S. GAAP.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. BMS Representations . BMS represents and warrants each of the following:
(a) Organization: Powers . BMS (i) is a corporation duly organized and in good standing under the laws of the State of Delaware and (ii) has the corporate power to execute and deliver, and to perform its obligations under, this Agreement. Each of the BMS Affiliates that is, or will be, a party to any of the Alliance Agreements (i) is, or will be on the date of execution of such Alliance Agreement, a
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corporation, general partnership or other entity duly organized and validly existing under the laws of its jurisdiction of organization and (ii) has, or will have on the date of execution of such Alliance Agreement, the power to execute and deliver, and to perform its obligations, under such Alliance Agreement.
(b) Authorization . The execution and delivery by BMS, the performance by it of its obligations under this Agreement, the execution and delivery by each BMS Affiliate of each Alliance Agreement entered into on the date hereof or hereafter and the performance by each BMS Affiliate of its obligations under such Alliance Agreement to which it is, or will be, a party (i) have been, or will be on the date of execution of such Alliance Agreement, duly authorized by all necessary action by BMS and each such BMS Affiliate and do not, or will not on the date of execution of such Alliance Agreement, require the consent or approval of the stockholders or creditors of BMS or any such BMS Affiliate, except such consents as have been obtained, and (ii) do not, or will not on the date of execution of such Alliance Agreement, (A) violate (x) any material provision of law, statute, rule or regulation, (y) the certificate of incorporation or by-laws or other constituent documents of BMS or such BMS Affiliate or (z) any order of any court or other Governmental Authority binding upon BMS or such BMS Affiliate or (B) violate, be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any material provisions of any indenture, agreement or other instrument to which BMS or such BMS Affiliate is a party of by which BMS or such BMS Affiliate or any of their properties or assets is bound.
(c) Enforceability . This Agreement and each Alliance Agreement have been, or will be on the date of execution of such Alliance Agreement, duly executed and delivered by BMS and each BMS Affiliate that is, or will be, a party to any Alliance Agreement and constitute, or will constitute on the date of execution of such Alliance Agreement, legal, valid and binding obligations of BMS and each such BMS Affiliate, enforceable against BMS and each such BMS Affiliate in accordance with their respective terms.
(d) Ownership of Capital Stock . BMS owns, beneficially or of record, a majority of the aggregate voting power of the issued and outstanding voting securities, or otherwise has the right to elect a majority of members to the Board of Directors or similar governing body, of each BMS Affiliate that is, or will be, a party to any Alliance Agreement or that has, or will have, a direct or indirect majority interest in a party to any Alliance Agreement and all such voting securities are fully paid, nonassessable and are owned free and clear of any Encumbrance.
(e) Efficacy and Safety . BMS and each BMS Affiliate that is or will be a party to any Alliance Agreement, to their best knowledge and belief, have not made
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any statement to Sanofi or any Sanofi Affiliate that is or will be a party to any Alliance Agreement regarding the efficacy or safety of any Product or any process for manufacturing, processing or finishing such Product that is in any material respect untrue or misleading, nor has BMS or such BMS Affiliate omitted to disclose to Sanofi or such Sanofi Affiliates any material fact or information regarding the efficacy or safety of any such process or Product.
SECTION 2.02. Sanofi Representations . Sanofi represents and warrants, as of the date hereof, each of the following:
(a) Organization: Powers . Sanofi (i) is a société anonyme duly organized and validly existing under the laws of the French Republic and (ii) has the corporate power to execute and deliver, and to perform its obligations under, this Agreement. Each of the Sanofi Affiliates that is, or will be, a party to any of the Alliance Agreements (i) is, or will be on the date of execution of such Alliance Agreement, a société anonyme, société en nom collectif or other entity duly organized and validly existing under the laws of its jurisdiction of organization and (ii) has, or will have on the date of execution of such Alliance Agreement, the power to execute and deliver, and to perform its obligations, under such Alliance Agreement.
(b) Authorization . The execution and delivery by Sanofi, the performance by it of its obligations under this Agreement, the execution and delivery by each Sanofi Affiliate of each Alliance Agreement entered into on the date hereof or hereafter and the performance by each Sanofi Affiliate of its obligations under such Alliance Agreement to which it is, or will be, a parry (i) have been, or will be on the date of execution of such Alliance Agreement, duly authorized by all necessary action by Sanofi and each such Sanofi Affiliate and do not, or will not on the date of execution of such Alliance Agreement, require the consent or approval of the stockholders or creditors of Sanofi or any such Sanofi Affiliate, except such consents as have been obtained, and (ii) do not, or will not on the date of execution of such Alliance Agreement, (A) violate (x) any material provision of law, statute, rule or regulation, (y) the statuts or other constituent documents of Sanofi or such Sanofi Affiliate or (z) any order of any court or other Governmental Authority binding upon Sanofi or such Sanofi Affiliate or (B) violate, be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any material provisions of any indenture, agreement, or other instrument to which Sanofi or such Sanofi Affiliate is a party or by which Sanofi or such Sanofi Affiliate or any of their properties or assets is bound.
(c) Enforceability . This Agreement and each Alliance Agreement have been, or will be on the date of execution of such Alliance Agreement, duly executed and delivered by Sanofi and each Sanofi Affiliate that is, or will be, a party to any
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Alliance Agreement and constitute, or will constitute on the date of execution of such Alliance Agreement, legal, valid and binding obligations of Sanofi and each such Sanofi Affiliate, enforceable against Sanofi and each such Sanofi Affiliate in accordance with their respective terms.
(d) Ownership of Capital Stock . Sanofi owns, beneficially or of record, a majority of the aggregate voting power of the issued and outstanding voting securities, or otherwise has the right to elect a majority of members to the Board of Directors or similar governing body, of each Sanofi Affiliate that is, or will be, a party to any Alliance Agreement or that has, or will have, a direct or indirect majority interest in a party to any Alliance Agreement and all such voting securities are fully paid, nonassessable and are owned free and clear of any Encumbrance.
(e) Efficacy and Safety . Sanofi and each Sanofi Affiliate that is or will be a party to any Alliance Agreement, to their best knowledge and belief, have not made any statement to BMS or any BMS Affiliate that is or will be a party to any Alliance Agreement regarding the efficacy or safety of any Product or any process for manufacturing, processing or finishing such Product that is in any material respect untrue or misleading, nor has Sanofi or such Sanofi Affiliate omitted to disclose to BMS or such BMS Affiliates any material fact or information regarding the efficacy or safety of any such process or Product.
ARTICLE III
MANAGEMENT OF THE ALLIANCE
SECTION 3.01. Alliance Strategic Committee . In order to ensure the implementation of the agreements set forth herein and in the Alliance Agreements, Sanofi and BMS shall be represented by an Alliance Strategic Committee (the “ Alliance Strategic Committee ”), which shall be responsible for the following decisions (collectively, the “ Alliance Strategic Decisions ”):
(i) approval of Annual Budgetary Targets and Long-Range Plans, substantially in the form of Schedules 4.01(a)-l and 4.01(a)-2 attached hereto, as well as the Territory A Budget;
(ii) establishment of a manufacturing plan for Territory A and coordination of such manufacturing plan with the manufacturing plan for Territory B;
(iii) selection of the commercial structures (i.e., Co-Marketing vs. Co-Promotion) and entities to market the Products in Territory A; and
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(iv) resolution of any disagreement of the Territory Management Committee concerning the allocation of selling responsibilities of the local Affiliates of the Parties in any country where there is Co-Promotion of a Product.
SECTION 3.02. Alliance Functional Committees . Subject to the general oversight and authority of the Alliance Strategic Committee, the following functional committees (the “ Alliance Functional Committees ”) are hereby established and shall be maintained and empowered as hereinafter provided: (i) a finance committee (the “ Finance Committee ”) and (ii) a manufacturing and sourcing committee (the “ Manufacturing and Sourcing Committee ”).
SECTION 3.03. Finance Committee . The Finance Committee shall be responsible for (i) proposing, implementing and modifying, as necessary, the appropriate legal and tax operating arrangements and structures for the marketing of the Products in each country in Territory A, (ii) establishing a calculation methodology for allocating the Selling Effort Remuneration between the Affiliates of the Parties in countries where there is Co-Promotion of the Products in Territory A, (iii) proposing, implementing and modifying, as necessary, the appropriate consolidation, reporting and sharing procedures relating to the commercialization of the Products in Territory A, (iv) selecting the names for the Co-Promotion Entities, (v) determining the method and amount of financing for the SNC Partnership and the Co-Promotion Entities, (vi) determining which countries are Major A Countries, (vii) determining the terms and conditions for distribution arrangements in Non-Promotional Countries (as such term is defined in the Règlemet Intérieur) in Territory A and (viii) implementing the decisions of the Alliance Strategic Committee in Territory A. The Finance Committee shall report and make its recommendations to the Alliance Strategic Committee.
SECTION 3.04. Manufacturing and Sourcing Committee . The Manufacturing and Sourcing Committee shall be responsible for (i) subject to Section 3.08(b) hereof, assuring the supply of active substance chemical bulk for Irbesartan on the most favorable terms then available and negotiating contracts for such supply with appropriate manufacturer(s), (ii) in the event Sanofi ceases to be the exclusive supplier of the active substance chemical bulk for Clopidogrel, selecting one or more alternate sources of supply for such active substance chemical bulk, (iii) setting the manufacturing fee and the other terms and conditions for the processing of active substance chemical bulk into finished Products, (iv) coordinating the supply of active substance chemical bulk and finished Products in Territory A, Territory B and, with respect to Irbesartan and Irbesartan Products, the United States of America, (v) implementing the decisions of the Alliance Strategic Committee and (vi) making recommendations concerning the establishment of a manufacturing plan for Territory A and the coordination of such plan with the manufacturing plan for Territory B. The Manufacturing and Sourcing Committee shall report and make its recommendations concerning the establishment of a manufacturing plan under clause (vi)
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above to the Alliance Strategic Committee and shall report and make all other recommendations and decisions to Alliance Management, who shall then decide whether such recommendations should be reported to the Alliance Strategic Committee or directly to the Territory Management Committee.
SECTION 3.05. Committee Composition and Decision Making. (a) The Alliance Strategic Committee shall at all times consist of six (6) representatives, three (3) of whom shall represent BMS and three (3) of whom shall represent Sanofi. The representatives of BMS shall be the persons serving from time to time as (i) President, Worldwide Medicines Group, (ii) Senior Vice President, Worldwide Franchise Management and (iii) Vice President, Alliance Management. The representatives of Sanofi shall be the persons serving from time to time as (i) President and Executive Director, Sanofi Pharma, (ii) Senior Vice President, Strategy, Sanofi Pharma and (iii) Vice President, Alliance Management, Sanofi Pharma. If any such position has been modified or eliminated, the Party so affected shall appoint an individual whose position is substantially similar to the position so modified or eliminated. The Alliance Strategic Committee shall have the sole power, by a consensus of the representatives of Sanofi and BMS, to make any and all Alliance Strategic Decisions and to resolve any deadlock or conflict arising among or within the Alliance Functional Committees that has not been resolved by Alliance Management.
(b) Each of the Manufacturing and Sourcing Committee and the Finance Committee shall at all times consist of any equal number of representatives of BMS and Sanofi. All representatives of each Alliance Functional Committee shall be senior management personnel of Sanofi, BMS or their respective Affiliates. All recommendations and decisions made by each Alliance Functional Committee shall be made by a consensus of the representatives of Sanofi and BMS thereon. Each Alliance Functional Committee shall be authorized only to make recommendations to the Alliance Strategic Committee unless, and only to the extent that, it shall have received a specific written delegation of greater authority from the Alliance Strategic Committee pursuant to Section 3.10 hereof; provided, however, that each Alliance Functional Committee shall have the authority, by a consensus of the representatives of Sanofi and BMS thereon, to make decisions on issues within such Alliance Functional Committee’s specific scope of responsibilities as set forth in Sections 3.03 and 3.04 hereof, respectively.
SECTION 3.06. Deadlock Resolution. (a) Each Alliance Functional Committee and each License Functional Committee shall inform Alliance Management of any disagreements existing within such Functional Committee and/or with any other Functional Committee within 10 business days of such disagreement and Alliance Management shall attempt to resolve any such disagreement by consensus. If Alliance Management is unable to resolve any such disagreement by consensus within 15 business days after being informed of such disagreement, Alliance Management shall submit the matter(s) in dispute to the Alliance Strategic Committee or the License Steering Committee, as the case may be.
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(b) If (i) the Alliance Strategic Committee is unable to agree on any Alliance Strategic Decision, (ii) the License Steering Committee is unable to agree on any License Strategic Decision, (iii) the Alliance Strategic Committee is unable to resolve any disagreement arising within any Alliance Functional Committee or among the Alliance Functional Committees or (iv) the License Steering Committee is unable to resolve any disagreement arising within any License Functional Committee or among the License Functional Committees, as evidenced, in each case, by the relevant committee’s failure to agree unanimously following two consecutive attempts at consensus, with the second attempt following the first by not less than 10 business days (in any such case, an “ Unsatisfactory Final Outcome ”), then such committee may agree unanimously to submit such Unsatisfactory Final Outcome to non-binding arbitration on such terms as it may unanimously agree, or either Sanofi or BMS may terminate its participation in the commercialization of the Product to which the Unsatisfactory Final Outcome relates in accordance with Article VII hereof:
(i) in the country(ies) affected by such Unsatisfactory Final Outcome pursuant to Section 7.02(i) hereof;
(ii) throughout Territory A if the Unsatisfactory Final Outcome affects the commercialization of such Product in France and any two of the other Major A Countries pursuant to Section 7.04(i) hereof;
provided, however, that any such termination may also be elected by either Party following the outcome of any such non-binding arbitration.
(c) Notwithstanding anything to the contrary contained in this Article III, no Unsatisfactory Final Outcome shall be deemed to have occurred as a result of the failure by the representatives on the Alliance Strategic Committee, the License Steering Committee, any Alliance Functional Committee or any License Functional Committee to agree on (i) [*] unless the actions required by [*] are no longer permitted as a result of [*] and such change is [*] or (ii) any other matter [*], unless it would [*], in accordance with the terms of this Agreement and the Alliance Agreements, without [*] with respect to such matter. In the event of the failure by the representatives on such committee to reach agreement on [*], such committee’s [*] shall not be [*] or [*] with respect to such matter, as the case may be, and the [*] in accordance with the framework established by such committee’s [*] until such agreement shall have been reached, to the extent permitted by applicable law.
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SECTION 3.07. Alliance Management. The Alliance Strategic Committee shall be assisted in its management of this Agreement and the Alliance Agreements by an alliance management (the “ Alliance Management ”), which shall be responsible for (i) coordinating and managing processes and interfaces to ensure that integrated business systems are in place and fully functional for the commercialization of the Products, (ii) informing the Alliance Strategic Committee of milestones, recommendations and decisions made by the Alliance Functional Committees and the License Functional Committees, (iii) ensuring appropriate liaison among the Alliance Strategic Committee, the Alliance Functional Committees, the License Steering Committee, the License Functional Committees, the Territory Management Committee and, to the extent necessary, with each of their respective counterparts in Territory B, (iv) being the formal point of first recourse for reaching a consensual solution for any disagreement arising among or within any Alliance Functional Committee or any License Functional Committee and (v) ensuring that minutes of each meeting of each Alliance Functional Committee, each License Functional Committee and the Territory Management Committee are finalized and circulated to all appropriate Persons and committees in a timely manner. The Alliance Management shall not be a separate committee, but shall consist of an equal number of representatives of each of BMS and Sanofi. The initial membership of Alliance Management shall consist of the two persons serving from time to time as Vice President, Alliance Management for each of BMS and Sanofi Pharma. Such positions shall not be eliminated prior to the termination of this Agreement.
SECTION 3.08. Cross-Territory Issues. (a) The Alliance Strategic Committee, the License Steering Committee, any Alliance Functional Committee or any License Functional Committee may agree with its counterpart committee in Territory B that certain studies, programs or plans will benefit the sale of the Products in Territory B as well as Territory A. In such case, such committee shall negotiate in good faith with its counterpart committee in Territory B to allocate any expenses related to such studies, programs or plans between the two Territories, with the expectation that, unless otherwise agreed, such expenses shall be split evenly between the two Territories.
(b) To the extent feasible, matters within the scope of responsibilities of the Manufacturing and Sourcing Committee relating solely to Territory A shall be the sole responsibility of the Manufacturing and Sourcing Committee; provided, however, that manufacturing and sourcing issues also having an impact on the-supply of the Products in Territory B, the commercialization of Irbesartan Products in the United States of America or the supply of active substance chemical bulk containing Irbesartan shall be coordinated with the manufacturing and sourcing committee for Territory B.
(c) Each of Sanofi and BMS shall, or shall cause their respective Affiliates to, supply approximately [*], in the aggregate, of the active substance chemical bulk for Irbesartan required by the Parties and their Affiliates for the manufacturing of Irbesartan
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Products in Territory A, Territory B and the United States of America; provided, however, that [*] shall be the [*] supplier of such bulk in Territory B and the United States of America and the [*] supplier of such bulk in Territory A; provided, further, that [*] shall be the [*] supplier of such bulk in Territory A and the [*] supplier of such bulk in Territory B and the United States of America.
SECTION 3.09. Implementation of Decisions . Each of BMS and Sanofi shall, and shall cause their respective Affiliates (including, without limitation, the SNC Partnership and its manager(s)) to, implement and ensure that their actions are consistent with the decisions of the Alliance Strategic Committee, the License Steering Committee, each Alliance Functional Committee, each License Functional Committee and the Territory Management Committee and, furthermore, not to dissolve the SNC Partnership other than in accordance with the terms and conditions of the SNC By-Laws and the Règlement Intérieur.
SECTION 3.10. Delegation . The Alliance Strategic Committee may, by a consensus of the representatives of Sanofi and BMS thereon, expressly and by written resolution establish any other functional committee and delegate its powers to such functional committee and/or to any then existing Alliance Functional Committee on such terms as it deems appropriate.
ARTICLE IV
BUDGETARY PROCESS
SECTION 4.01. Budgetary Development . (a) Sanofi shall prepare and submit, or cause to be prepared and submitted, to the Alliance Strategic Committee, (x) the aggregate of the annual budgets for the upcoming calendar year for sales and pre-tax profits (the “ Annual Budgetary Targets ”) for each Product for the Marketing Entities in countries in Territory A that were established for the Co-Promotion of one or both Products (each, a “ Co-Promotion Entity ”) and projections for aggregate sales and aggregate pre-tax profits of the Co-Promotion Entities for the subsequent three calendar years (the “ Long-Range Plans ”) for each Product, which budgetary targets and projections shall be substantially in the form of Schedules 4.01 (a)-1 and 4.01 (a)-2 attached hereto, and (y) the annual budget for the SNC Partnership (the “ Territory A Budget ”). The Finance Committee shall prepare such budget, budgetary targets and projections; provided, however, that Sanofi shall have final authority to determine the budget, budgetary targets and projections to be submitted to the Alliance Strategic Committee. Pre-tax profits shall be calculated by [*] for each Product, and sales shall be calculated by [*], each in accordance with the methodology to be established by [*].
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(b) The Alliance Strategic Committee may require Sanofi to submit any financial information reasonably necessary for determining whether to approve the Territory A Budget, any Annual Budgetary Target or any Long-Range Plan for any Product.
SECTION 4.02. Budgetary Deadlocks. The Alliance Strategic Committee shall consider and unanimously approve, by December 15 of each calendar year, the Annual Budgetary Targets for each Product, the Long-Range Plans for each Product and the Territory A Budget. In accordance with Section 3.06 hereof, if the Alliance Strategic Committee cannot reach agreement with respect to any Annual Budgetary Target, Long-Range Plan or the Territory A Budget submitted by Sanofi, the Annual Budgetary Targets and the Territory A Budget for the current calendar year shall carry over to the next calendar year, and the Long-Range Plans shall remain unchanged, until the Annual Budgetary Targets, the Territory A Budget and the Long-Range Plans for the current calendar year shall have been approved.
SECTION 4.03. Out-of-Budget Situations. During April, July and October of each calendar year, Sanofi shall submit to the Alliance Strategic Committee a statement providing revised annual projections of aggregate sales and pre-tax profits for the Co-Promotion Entities for each Product for such calendar year (which shall be calculated in the same manner as, and compared to, the Annual Budgetary Targets for such calendar year approved by the Alliance Strategic Committee) revised, if necessary, to take into account the actual year-to-date results and any other relevant factors, together with an explanation of any material revisions in the projections relative to the budgeted amounts thereof approved by the Alliance Strategic Committee (the “ Revised Projection ”). To the extent that a Revised Projection shows (or Sanofi advises BMS) that the annual aggregate pre-tax profits of the Co-Promotion Entities in Territory A for any Product will fall short of the annual aggregate pre-tax profit amount in the relevant Annual Budgetary Target for such Product approved by the Alliance Strategic Committee by [*] of such Annual Budgetary Target, BMS may, within 30 days of receipt of such Revised Projection or such notice, require Sanofi to secure the Alliance Strategic Committee’s approval of either (i) [*]; or (ii) [*].
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Termination of Master Territory A Agreement. This Agreement and the Alliance Agreements cancel and supersede the Master Territory A Agreement, which shall terminate with effect as of the date upon which this Agreement shall have been executed.
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SECTION 5.02. Non-Competition . During the period from and after the date hereof until [*], each Party shall not, and shall cause its Affiliates not to, directly or indirectly, [*].
SECTION 5.03. Confidentiality . (a) During the period from and after the date hereof until the [*] of the expiration or early termination of this Agreement, each of the Parties shall, and shall cause their respective Affiliates and its and their officers, employees and advisors to, keep confidential all information acquired from the other Party or its Affiliates, in connection with this Agreement or the Alliance Agreements and the transactions contemplated hereby and thereby, including the contents of this Agreement and the Alliance Agreements, other than any information that (i) is or hereafter becomes generally available to the public other than by reason of any default with respect to a confidentiality obligation; (ii) was already known to the recipient as evidenced by prior written documents in its possession; or (iii) is disclosed to the recipient by a Third Party who is not in default of any confidentiality obligation to the disclosing Party (such information being “ Confidential Information ”).
(b) The provisions of Section 5.03(a) hereof shall not apply to Confidential Information that (i) is submitted by the recipient to Governmental Authorities to facilitate the issuance of marketing approvals for a Product, provided, however, that reasonable measures shall have been taken to ensure confidential treatment of such information, (ii) is provided by the recipient to Third Parties under appropriate terms and conditions, including confidentiality provisions equivalent to those in this Agreement, for consulting, manufacturing development, manufacturing, external testing and marketing trials, or (iii) is otherwise required to be disclosed in compliance with applicable laws or regulations or order by a court or other regulatory body having competent jurisdiction.
(c) Each Party shall, and shall cause its Affiliates and its and their officers, employees and advisors to, use any Confidential Information obtained by it from the other Party or its Affiliates in connection with this Agreement and the Alliance Agreements, solely in connection with the commercialization of the Products and the transactions contemplated hereby and thereby.
(d) Except as required by applicable law, neither of the Parties shall issue a press release or make a public announcement that has, as its major focus, any aspect of the commercialization of the Products, without the prior written approval of the other Party, which approval shall not be unreasonably withheld.
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SECTION 5.04. Insurance. Each of the Parties shall maintain, or shall cause to be maintained with respect to itself and each of its Affiliates that is a party to any of the Alliance Agreements, such types and levels of insurance (including, without limitation, general and product liability and environmental liability insurance), which may include self-insurance, as are customary in the pharmaceutical industry to provide coverage for the activities contemplated hereby and thereby. Each Party shall keep the other Party informed of the general parameters of its liability insurance program and any proposed substantive change therein.
SECTION 5.05. Further Assurances. (a) Each Party agrees to, and to cause its Affiliates to, execute, acknowledge, deliver, file, record and publish such further certificates, amendments to certificates, instruments and documents, and do all such other acts and things as may be required by law, or as may he required to carry out the intent and purposes of this Agreement and the Alliance Agreements.
(b) No later than September 30, 1997, BMS shall, and shall cause its Affiliates to, assign to Sanofi all of their rights, title and interests in and to any patent and patent application related to Irbesartan, Clopidogrel or the Products, existing as of June 6, 1997, and shall take all reasonable actions to ensure the filing of such assignment as soon as practicable thereafter.
SECTION 5.06. Adverse Event Reporting. (a) BMS and Sanofi shall each ensure that, in the marketing of the Products in Territory A, it and each of its respective Affiliates shall record, investigate, summarize and review all Adverse Events and Serious Adverse Events. Each Party shall require that its Affiliates, sub-licensees and distributors adhere to all requirements of local law which relate to the reporting and investigation of Adverse Events and Serious Adverse Events, and each Party shall require that its Affiliates, sub-licensees and distributors keep such Party informed of such experiences.
(b) In order that each Party may be folly informed of these experiences, each Party shall report:
| (i) | In the case of Clopidogrel Products, to Sanofi, at: |
Sanofi Pharma
82, avenue Raspail
94255 Gentilly Cedex, France
Attention: [omitted]
Facsimile: [omitted]
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| (ii) | In the case of Irbesartan Products, to BMS, at: |
Bristol-Myers Squibb Company
P.O. Box 4000
Route 206 & Province Line Road
Princeton, NJ 08543 USA
Attention: Vice President, Worldwide Safety and Surveillance
Facsimile: [omitted]
all Adverse Events and Serious Adverse Events anywhere in the world; provided, however, that Serious Adverse Events shall be reported to the relevant Person within three (3) working days of a Party’s becoming aware of such an event (a “ Reporting Party ”) and shall be reported by facsimile as provided above. The Reporting Party shall report all other Adverse Events on a monthly basis. The Parties shall agree on an Adverse Event reporting form that may be used by the Reporting Party as a basis for such reports. Each Party shall promptly notify the relevant Person of any complaint received by such Party or any of its Affiliates in sufficient detail and in sufficient time to allow the relevant Person to comply with any and all regulatory requirements imposed upon it in any country. Each Party shall also advise the relevant Person of any regulatory developments (e.g., proposed recalls, labeling and other registrational dossier changes, etc.) affecting either Product in any country in Territory A. Each Party shall have the right to review and/or request copies of any and all information and reporting forms generated or received by the relevant Person set forth above.
(c) These procedures may be modified from time to time by the Regulatory Committee (as such term is defined in the Know-How License Agreement). In the event that the definitions of “adverse event” and/or “serious adverse event” are modified in the United States of America and the European Union, in accordance with the harmonization standards of the World Health Organization or otherwise, the Parties shall, and shall cause their respective Affiliates to, modify such definition(s) accordingly in this Agreement and each Alliance Agreement.
(d) BMS shall be responsible for making all determinations as to how Adverse Events and Serious Adverse Events concerning Irbesartan Products will be reported to the appropriate Governmental Authorities and, absent manifest error, the reporting by Sanofi and its Affiliates to such Governmental Authorities shall conform to such determinations. Sanofi shall be responsible for making all determinations as to how Adverse Events and Serious Adverse Events concerning Clopidogrel Products will be reported to the appropriate Governmental Authorities and, absent manifest error, the reporting by BMS and its Affiliates to such Governmental Authorities shall conform to such determinations.
(e) During the term of this Agreement, BMS and Sanofi shall, and shall cause their respective Affiliates to, disclose to the other Party any material fact or
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information concerning the efficacy or safety of any Product or any process for manufacturing, processing or finishing such Product and shall not omit to disclose to the other Party any material fact or information concerning the efficacy or safety of any such process or Product.
SECTION 5.07. Registration: Labeling. (a) The marketing registration for each Product shall be made in the name of Sanofi (or its designees) in each country in Territory A where such registration is required by applicable law, except (i) in those countries where there will be Co-Marketing of the Products as determined by the Alliance Strategic Committee, in which case, if required by applicable law or regulation in such country, one registration shall be made in the name of a Sanofi Affiliate and the other in the name of a BMS Affiliate, (ii) such registration would preclude product labeling pursuant to Section 5.07(b) hereof, or (iii) such registration would be incompatible with the allocation of regulatory reporting and compliance responsibilities between the Parties as determined by the Regulatory Committee.
(b) The Parties shall ensure that the label for each Product bears the name of (i) a Co-Promotion Entity, (ii) both Parties or (iii) the Party(ies) whose sales force is used in connection with the commercialization of such Product pursuant to the marketing plan reviewed by the Territory Management Committee; provided, however, that in the event only one Party’s name can appear on a label, the name of the Marketing Entity for the Product shall be used. Notwithstanding the above, all Product labels that otherwise do not refer to “Sanofi” shall contain the words “Sanofi patent” or other words to the same effect. In any country in Territory A where there is Co-Promotion of a Product, the trademark shall be the trademark most often used by Sanofi for that Product in all of Territory A; provided, however, that the Parties shall, or shall cause their Affiliates to, use the trademarks listed on Schedule 5,07(b) attached hereto in the commercialization of the Products in Territory A.
SECTION 5.08. Selling Efforts. (a) Subject to sub-clause (b) below, the Parties shall, or shall cause their respective Affiliates to, transfer to each Co-Promotion Entity, directly or indirectly, or shall otherwise cause to be made available to each Co-Promotion Entity, through appropriate contractual arrangements, the resources necessary for the marketing, promotion, sale and distribution of the Products by such Co-Promotion Entity.
(b) For each country in Territory A where there is Co-Promotion of a Product, the local Affiliates of the Parties shall propose, and the Territory Management Committee shall determine, the amount of selling efforts and the allocation thereof that each such local Affiliate will be required to provide in connection with the commercialization of such Product; provided, however, that such determination shall be subject to the right of each such local Affiliate to elect act to make part or all of its selling resources available for one or both Products in such country. Such determination shall be reviewed, and if necessary revised, on an annual basis to take into account the evolution of such local Affiliates’
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respective selling resources. In each country, the allocation and amount of proposed selling efforts shall be determined on the basis of the following criteria, in the following order of priority:
(i) primary consideration shall be given to devising a selling force and strategy that will be the most effective from a commercial and economic perspective;
(ii) each local Affiliate shall be entitled to provide selling efforts on a [*] basis; it being understood that any such local Affiliate may elect not to make [*] of its selling resources available for one or both Products; and
(iii) in any country where the relevant selling resources of such local Affiliates do not allow a [*] of selling efforts, the proposed resources of such local Affiliate with [*] resources in such country shall be used to the [*], but only up to [*] of such resources that are made available by such local Affiliate for such Product.
(c) For each country in Territory A where there is Co-Promotion of a Product, the Finance Committee shall determine the calculation methodology for allocating Selling Effort Remuneration between the Parties’ local Affiliates in proportion to the actual selling efforts of such local Affiliates in each calendar year and shall set forth such methodology in a marketing and operating services agreement among the Co-Promotion Entity for such country and such local Affiliates; provided, however, that [*] of Selling Effort Remuneration shall be [*] to any such local Affiliate for that portion of the selling efforts undertaken by such local Affiliate in excess of [*] for such local Affiliate; provided, further, that such methodology shall include a [*] formula set forth in Schedule 5.08(c) attached hereto to [*] in the allocation of Selling Effort Remuneration between such local Affiliates and to take into account [*]; provided, further, that upon Loss of Exclusivity of a Product in any country in Territory A, the Selling Effort Remuneration attributable to such country which had been [*] to each such local Affiliate shall be [*] on the basis of [*]:
[*]
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SECTION 5.09. Transfer of the SNC Partnership . Each Party shall cause its Affiliate that is a partner of the SNC Partnership to consent to the transfer by any other partner therein of any or all of such partner’s rights under the SNC By-Laws, including all or a portion of such partner’s participation therein, and under the Règlement Intérieur to Sanofi, BMS or any of their respective Affiliates; provided, however, that in any such event the transferor shall remain liable for the obligations of the transferee under the SNC By-Laws and the Règlement Intérieur.
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. General Indemnification. Each Party shall indemnify and hold harmless the other Party and its Affiliates against any Damages (whether or not incurred in connection with a Third Party Claim) arising out of or resulting from (i) any inaccuracy of any representation or any breach of any warranty of such Party contained in Article II hereof or (ii) the failure by such Party or its Affiliates to comply in any material respect with any of the covenants or agreements of this Agreement, the Development Agreement or any of the Alliance Agreements. The indemnity in this Section 6.01 shall be the exclusive remedy for any matter referred to in clause (i) above.
SECTION 6.02. Special Indemnities. (a) From and after July 29, 1993, subject to Section 6.02(b) hereof, each Party (the “ First Party ”) shall indemnify and hold harmless the other Party or any of its Affiliates for [*] of any Damages incurred by such other Party or its Affiliates to any Third Party in any country in Territory A in connection with (i) the preparation of the commercialization of a Product, (ii) the manufacture of the active substance chemical bulk used in the Products, (iii) the manufacture of the Products ( i.e ., the transformation of the active substance chemical bulk into finished, packaged and labeled Products), (iv) the marketing, promotion, sale and distribution of the Products or (v) any other activity undertaken by such other Party or its Affiliates in connection with the transactions contemplated by this Agreement (collectively, the “ Covered Activities ”), but, in each case, only to the extent relating to the Products; provided, however, that the indemnification provisions of this Section 6.02(a) shall not apply to Damages arising out of, or resulting from, (x) [*] in which [*] or (y) any claim relating to [*] in any given country based on facts arising during the period in which [*].
(b) No indemnity shall be due or payable pursuant to Section 6.02(a) hereof to the extent that fee Damages for which an indemnity is sought are attributable to (i) the negligence, bad faith, or willful misconduct of the Party seeking the indemnity (or of
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any of its Affiliates (which, solely for the purposes of this Section 6.02(b)(i), shall not include the proviso in the first sentence of the definition of “Affiliate”)), (ii) the failure by such Party (or any of its Affiliates) to comply with the terms of this Agreement or any of the Alliance Agreements or any other agreement entered into pursuant hereto or thereto or (iii) any inaccuracy of any representation or any breach of any warranty made by such Party in Article II hereof.
(c) From and after July 29, 1993, the First Party shall indemnify and hold harmless the other Party or any of its Affiliates for all Damages incurred by such other Party or its Affiliates in any country in Territory A to the extent such Damages are attributable to (i) the business and operations of the First Party and its Affiliates that are not related to, or used in connection with, the Covered Activities, (ii) acts or omissions of the First Party and its Affiliates occurring prior to July 29, 1993 or (iii) a condition of the business and operations of the First Party or its Affiliates existing prior to July 29, 1993.
SECTION 6.03, Indemnification Procedures . All claims for indemnification under this Agreement shall be asserted and resolved as follows:
(a) A Party or an Affiliate of a Party claiming indemnification under this Agreement (the “ Indemnified Party ”) shall promptly notify the Party from whom indemnification is sought (the “ Indemnifying Party ”) of any claim by a Third Party or claims asserted against the Indemnified Party that could give rise to a right of indemnification under this Agreement (a “ Third Party Claim ”). The Indemnifying Party shall have the right to defend, at its sole cost and expense, such Third Party Claim, on its own behalf and on behalf of the Indemnified Party, by all appropriate proceedings, which proceedings shall be prosecuted diligently by the Indemnifying Party to a final conclusion or settled at the discretion of the Indemnifying Party; provided, however, that the Indemnifying Party may not enter into any compromise or settlement that involves equitable relief against the Indemnified Party unless the Indemnified Party consents thereto, which consent shall not be unreasonably withheld. If requested by the Indemnifying Party, the Indemnified Party shall agree, at the sole cost and expense of the Indemnifying Party (excluding the internal costs and expenses of the Indemnified Party), to cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim that the Indemnifying Party elects to contest, including, without limitation, the making of any related counterclaim against the Person asserting the Third Party Claim or any cross-complaint against such Person.
(b) Notwithstanding the Indemnifying Party’s election to assume the defense of any Third Party Claim, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such Third Party Claim, and shall bear the costs and expenses of such separate counsel, if (i) the use of counsel chosen by the Indemnifying Party to represent both the Indemnifying Party
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and the Indemnified Party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such Third Party claim include both the Indemnifying Party and the Indemnified Party, and the Indemnified Party shall have reasonably concluded that there may be a legal defense available to it which is different from or additional to the defenses available to the Indemnifying Party (in which case the Indemnifying Party shall not have the right to assume the defense of such Third Party Claim on behalf of the Indemnified Party), (iii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such Third Party Claim or (iv) the Indemnifying Party authorizes the Indemnified Party to employ separate counsel at its own cost and expense.
(c) If the Indemnifying Party fails to notify the Indemnified Party within 30 days after receipt of notice in accordance with Section 6.03(a) hereof that the Indemnifying Party elects to defend the Indemnified Party pursuant to this Section 6.03, or if the Indemnifying Party elects to defend the Indemnified Party pursuant to this Section 6.03 but fails to defend or settle the Third Party Claim diligently and promptly, then the Indemnified Party shall have me right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be promptly and vigorously defended by the Indemnified Party to a final conclusion or settled at the discretion of the Indemnified Party.
(d) In the event that any Indemnified Party shall have a claim against any Indemnifying Party under Section 6.01 or 6.02(c) that does not involve a Third Party Claim or knowledge of facts which could give rise to such a claim, the Indemnified Party shall provide the Indemnifying Party with a written notice (the “ Indemnity Notice ”) describing in reasonable detail the nature of the claim, an estimate, if reasonably practicable, of the amount of Damages attributable to such claim and the basis of the Indemnified Party’s request for indemnification under this Agreement. If the Indemnifying Party does not contest the Indemnity Notice within 60 days from its receipt, then the claim specified in the Indemnity Notice shall be deemed a liability of the Indemnifying Party; provided, however, that if the Indemnifying Party contests such claim within 60 days of its receipt, such dispute shall be resolved by arbitration in accordance with Section 8,04 hereof.
(e) Notwithstanding anything to the contrary in this Article VI, no claim may be asserted of any action commenced against either Party for the inaccuracy of any representation or warranty or the breach of any covenant or agreement contained herein, unless written notice of such claim or action is received by the Indemnifying Party describing in reasonable detail the facts and circumstances with respect to the
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subject matter of such claim or action on or prior to the second anniversary of the expiration or early termination of this Agreement.
ARTICLE VII
TERM AND TERMINATION
SECTION 7.01. Term: Expiration . (a) The term of this Agreement, with respect to each Product, shall commence on the date hereof and shall expire on the later of (i) the 15th anniversary of the first commercial sale of such Product and (ii) such date as the last patent relating to such Product effective in any country in Territory A shall have expired and all other de jure exclusivity available for such Product shall have ended. Thereafter, the term of this Agreement may be renewed with respect to such Product for successive three-year terms, by the mutual agreement of the Parties, no later than 24 months prior to the expiration of the term then in effect.
(b) Notwithstanding anything to the contrary contained herein, this Agreement shall automatically terminate upon the earliest of (i) termination of the commercialization of both Products throughout Territory A pursuant to Section 7.06 hereof, (ii) termination of the commercialization of both Products throughout Territory A as the result of a Safety Problem affecting both Products, (iii) the mutual written consent of the Parties or (iv) the purchase and sale of the rights and interests specified in the special put option pursuant to Section 7.08 hereof.
(c) Expiration or early termination of this Agreement pursuant to this Article VII shall be without prejudice to any rights which shall have accrued to the benefit of any Party prior to such expiration or early termination. Such expiration or early termination shall not relieve any Party from its obligations which are expressly indicated to survive the expiration or early termination of this Agreement. All of the Parties’ rights and obligations under this Article VII and under Sections 5.02, 5.03, 5.06, 6.01, 6.02, 6.03, 8.02, 8.03, 8.04 and 8.12 shall survive such expiration or early termination for the applicable period, if any.
SECTION 7.02. Right of Country Termination . Either Party may cause the termination of the commercialization of any Product(s) in any country(ies) in Territory A, by Notice to the other Party, in the event of:
(i) the occurrence of an Unsatisfactory Final Outcome affecting such country (ies), in accordance with Section 3.06 hereof;
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(ii) the adjustment of the Discovery Royalty pursuant to the Clopidogrel License and Supply Agreement and the Irbesartan License Agreement, as the case may be; provided, however, that the sum of the Discovery Royalty and the Cost of Bulk and/or the Supply Payment (as such terms are defined therein and in the Irbesartan Supply Agreement) for such Product in such country(ies) (computed over [*] and expressed as a percentage of [*]) represents, in the case of Clopidogrel Products, [*] of Net Sales thereof in such country(ies) or, in the case of Irbesartan Products, [*] of Net Sales thereof in such country (ies), in each case computed over such [*].
SECTION 7.03. Consequences of Country Termination. In the event that one Party (the “Country Terminating Party”) exercises its right to terminate the commercialization of any Produc(s) in any country(ies) pursuant to Section 7.02 hereof, the other Party (the “Country Non-Terminating Party”) may, by Notice to the Country Terminating Party, elect:
(i) also to terminate its participation in the commercialization of such Product(s) in such country(ies), in which event:
(A) the Parties shall, and shall cause their respective Affiliates to, amend and restate this Agreement and each Alliance Agreement to terminate (1) the commercialization of such Product(s) in such country(ies) and the grant of rights with respect thereto and (2). all arrangements for such Product(s) existing between and among the SNC Partnership, the Marketing Entity(ies) in such country(ies) and the local Affiliate(s) of BMS and Sanofi in such country(ies) (including, without limitation, all distribution arrangements);
(B) the Parties shall, and shall cause their respective Affiliates to, sell, license or otherwise dispose of to the highest offeror (which could include either Party): (1) all intellectual property rights owned by or licensed to the SNC Partnership (with a right to sub-license to its Affiliates and, with the Parties’ prior consent (which shall not be unreasonably withheld), to Third Parties) to make, have made, use and sell such Product(s) in such country(ies) for the duration of all relevant patents for such Product(s) in such country(ies), and (2) a right to a sufficient supply of active substance chemical bulk or finished goods for such Produc(s) for such country(ies) from Sanofi, BMS, their respective Affiliates or Third Parties [*], each on terms and conditions to be determined by [*] and/or [*]; and
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(C) the proceeds, if any, of such sale, license or other disposition shall be distributed to the Parties in accordance with [*] with the amounts pertaining only to [*] being considered.
(ii) to proceed alone with the commercialization of such Product(s) in such country(ies), in which event:
(A) the Parties shall, and shall cause their Affiliates to amend and restate this Agreement and each Alliance Agreement to terminate (1) the commercialization of such Product(s) in such country(ies) and the grant of rights with respect thereto and (2) all arrangements for such Product(s) existing between and among the SNC Partnership, the Marketing Entity(ies) in such country(ies) and the local Affiliate(s) of BMS and Sanofi in such country(ies) (including, without limitation, all distribution arrangements);
(B) the Parties shall, and shall cause their respective Affiliates to, grant the Country Non-Terminating Party an exclusive license under all intellectual property rights owned by or licensed to the SNC Partnership (with a right to sub-license to its Affiliates and, with the Country Terminating Party’s prior consent (which consent shall not be unreasonably withheld), to Third Parties) to make, have made, use and sell the Product(s) in such country(ies) for the duration of all relevant patents in such country(ies), as well as provide the Country Non-Terminating Party with the right to a sufficient supply of active substance chemical bulk or finished goods for such Product(s) for such country(ies) from Sanofi, BMS, their respective Affiliates or Third Parties on economic terms substantially similar to those then applicable to the Marketing Entity(ies) for such country(ies), each on terms and conditions to be determined by the Finance Committee and/or the Manufacturing and Sourcing Committee;
(C) the Country Non-terminating Party shall pay directly to the Country Terminating Party [*] of such Product(s) in such country(ies); provided, however, that (i) no [*] shall be payable during the [*] immediately following the launch of such Product(s) in such country(ies), (ii) [*] shall be reduced by [*], following the Loss of Exclusivity of such Product(s) in such country(ies) pursuant to the Irbesartan License Agreement or the Clopidogrel License and Supply Agreement, as the case may be, and (iii) [*] shall be in lieu of [*] other amounts otherwise payable to the Country Non-Terminating Party or its Affiliates with respect to such Product(s) in such country(ies) pursuant to this Agreement or
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any Alliance Agreement; provided, however, that, if [*] or any of its successors or assigns is the Country Terminating Party, [*] shall pay to [*] (or any such successor or assign) [*] for such Product(s) in such country(ies) (as such term is defined in the Irbesartan License Agreement or the Clopidogrel License and Supply Agreement, as the case may be); and
(D) the Country Non-Terminating Party shall also pay to the applicable supplier of active substance chemical bulk of finished goods for such Product(s) an amount to be determined by [*] and [*] in accordance with this Section 7.03(ii).
SECTION 7.04. Right of Product Termination Throughout Territory A. Either Party may cause the termination of the commercialization of any Product throughout Territory A, by Notice to the other Party, in the event of:
(i) the occurrence of an Unsatisfactory Final Outcome that affects the commercialization of such Product in France and any two of the other Major A Countries; or
(ii) a determination by either Party that the commercialization of such Product should be suspended for safety reasons that it believes in good faith justify such suspension (a “Safety Problem”), subject to Section 7.05(b) hereof.
SECTION 7.05. Consequences of Product Termination Throughout Territory A. (a) In the event of termination of the commercialization of any Product throughout Territory A as a result of an Unsatisfactory Final Outcome with respect to such Product:
(i) the Parties shall, and shall cause their Affiliates to, amend and restate this Agreement and each Alliance Agreement to terminate the commercialization of such Product in Territory A, including all decision-making by the Alliance Strategic Committee, the License Steering Committee, the Alliance Functional Committees and the License Functional Committees with respect to such Product;
(ii) the Parties shall, and shall cause their respective Affiliates to, terminate all arrangements for such Product existing between and among the SNC Partnership, the Marketing Entities in Territory A and the local Affiliates of BMS and Sanofi in Territory A (including, without limitation, all distribution arrangements);
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(iii) the Parties shall, and shall cause their respective Affiliates to, sell, license or otherwise dispose of to the highest offeror (which could include either Party), on terms and conditions to be determined by the Finance Committee and/or the Manufacturing and Sourcing Committee (A) all intellectual property rights owned by or licensed to the SNC Partnership (with a right to sub-license to its Affiliates and, with the Parties’ prior consent (which shall not be unreasonably withheld), to Third Parties) to make, have made, use and sell such Product in Territory A for the duration of all relevant patents for such Product in Territory A and (B) at the option of such offeror, an assignment of the rights and obligations for the supply of active substance chemical bulk under the Clopidogrel License and Supply Agreement or the Irbesartan Supply Agreement, as the case may be, which supply obligation shall continue for one year following such assignment;
(iv) in the event the highest offeror is any Person other than Sanofi or its Affiliates, the Know-How License Agreement, the Irbesartan License Agreement, the Irbesartan Supply Agreement and/or the Clopidogrel License and Supply Agreement, as the case may be, shall each be amended, on terms and conditions reasonably acceptable to Sanofi, to provide for those terms and conditions that are then customary in the pharmaceutical industry for such agreements, including, without limitation, provisions for confidentiality, indemnification and termination for material breach, as well as a diligence requirement that the offeror use reasonable commercial efforts to actively promote such Product (and the remedy for breach of such diligence requirement shall be termination of such amended and restated agreement); and
(v) the proceeds of such sale, license or other disposition shall be distributed to the Parties in accordance with the formula set forth in Schedule 7.03 attached hereto with the amounts pertaining only to such Product in Territory A being considered.
(b) In the event that one Party (the “ Concerned Party ”) determines that the commercialization of any Product should be suspended because of a Safety Problem, if:
(i) the other Party also agrees that such Safety Problem justifies such termination, then the Parties (A) shall discontinue the commercialization of such Product by any means anywhere in the world and (B) shall, and shall cause their respective Affiliates to, amend and restate this Agreement and each Alliance Agreement to delete any reference to the manufacture, development or commercialization of such Product; it being understood that this sub-clause (i) also shall be available to such other Party after the non-binding determination of the Safety Expert pursuant to sub-clause (ii) below; or
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(ii) the other Party (the “ Non-Concerned Party ”) does not agree that such Safety Problem exists with respect to such Product, the Parties shall promptly seek the non-binding advice of an independent expert mutually selected by the Parties (the “ Safety Expert ”) and if:
(A) the Safety Expert determines that such Safety Problem, if any, does not justify termination of the commercialization of such Product, then the Concerned Party shall be deemed to have elected to terminate its participation in the commercialization of such Product throughout Territory A and, if the Non-Concerned Party elects to continue its commercialization of such Product, (1) the Parties shall, and shall cause their respective Affiliates to, amend and restate this Agreement and each Alliance Agreement to delete any reference to the manufacture, development or commercialization of such Product and the grant of rights with respect thereto and to terminate the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement and/or the Irbesartan License Agreement, as the case may be, and shall grant the Non-Concerned Party an exclusive license under all intellectual property rights owned by or licensed to the SNC Partnership (with a right to sub-license to its Affiliates and, with the Concerned Party’s prior written consent (which shall not be unreasonably withheld), to Third Parties) to make, have made, use and sell such Product in Territory A for the duration of all relevant patents for such Product in Territory A, (2) the Non-Concerned Party shall pay the Concerned Party [*] of such Product in Territory A; provided, however, that (a) no [*] shall be payable during the [*] immediately following the first commercial sale of such Product in Territory A, (b) [*] shall be reduced following the Loss of Exclusivity of such Product by [*] set forth in the Irbesartan License Agreement or the Clopidogrel License and Supply Agreement, as the case may be, (c) [*] shall be in lieu of [*] other amounts otherwise payable or attributable with respect to such Product in Territory A and (3) the Concerned Party shall pay [*]; provided, further, that, if [*] or any of its successors or assigns is the Concerned Party, [*] shall pay to [*] (or any such successor or assign) [*] (as such term is defined in the Irbesartan License Agreement or the Clopidogrel License and Supply Agreement, as the case may be) for such Product; or
(B) the Safety Expert determines that the Safety Problem justifies termination of the commercialization of such Product, then the Non-Concerned Party shall (1) have the option to also terminate its participation in the commercialization of such Product or (2) elect to proceed alone in which event the provisions of Section 7.05(b)(ii)(A) hereof shall apply.
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SECTION 7.06. Right of Alliance Termination . Either Party may cause the termination of the commercialization of both Products throughout Territory A, by Notice to the other Party, in the event of:
(i) the other Party or any of its Affiliates that is a party or owns a direct or indirect majority interest in a party to any of this Agreement, the SNC By-Laws, the Irbesartan License Agreement, the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement or the Know-How License Agreement shall have (A) voluntarily commenced any proceeding or filed any petition seeking relief under Title 11 of the United Sates Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States of America, any state thereof or the French Republic or any other applicable jurisdiction, (B) applied for or consented to the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (C) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (D) made a general assignment for the benefit of creditors of all or substantially all of its assets, (E) become unable to generally, or admitted in writing its inability to, pay all or substantially all of its debts as they become due or (F) taken corporate action for the purpose of effecting any of the foregoing;
(ii) an involuntary proceeding shall have been commenced or any involuntary petition shall have been filed in a court of competent jurisdiction seeking (A) relief in respect of the other Party or any of its Affiliates that is a party or owns a direct or indirect majority interest in a party to any of this Agreement, the SNC By-Laws, the Irbesartan License Agreement, the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement or the Know-How License Agreement, or of their property, under Title 11 of the United Sates Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States of America, any state thereof or the French Republic or any other applicable jurisdiction, (B) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for such other Party or Affiliate or for all or substantially all of its property or (C) the winding-up or liquidation of such other Party or Affiliate; and such proceeding or petition shall have continued undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall have continued unstayed and in effect for thirty (30) days;
(iii) a material breach by a Party or any of its Affiliates (the “ Breaching Party ”) of any material obligation contained in this Agreement, the SNC By-Laws, the Irbesartan License Agreement, the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement and the Know-How License Agreement, taken as a
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whole; provided, however, that (A) the material breach has continued for 30 days from the date of receipt by the Breaching Party of a written notice of such breach and (B) the Breaching Party shall not have cured such breach to the reasonable satisfaction of the other Party or, where such breach cannot be cured during such 30-day period, shall not have taken prompt and diligent steps within such period to cure such breach as promptly as practicable; or
(iv) the occurrence of an Unsatisfactory Final Outcome affecting the commercialization of both Products in France and in any two of the other Major A Countries.
SECTION 7.07. Consequences of Alliance Termination. Upon the expiration of this Agreement pursuant to Section 7.01 hereof (other than in the event BMS exercises the special put option specified in Section 7.08 hereof or of a bilateral Safety Problem termination pursuant to Section 7.05(b) hereof) or the early termination hereof pursuant to Section 7.06 hereof:
(i) each Party shall be entitled to retain the intellectual property rights owned by it, including, without limitation, the right to receive all amounts payable to such Party under the Irbesartan License Agreement, the Clopidogrel License and Supply Agreement and the Know-How License Agreement, and such Party’s other assets used in the commercialization of the Products in Territory A, subject to the provisions of this Section 7.07;
(ii) the Parties shall, and shall cause their respective Affiliates to, terminate the Development Services Agreement, the Partnership Services Agreement, as well as all arrangements and agreements of the Marketing Entities with respect to the Products (including, without limitation, all distribution agreements between each Marketing Entity and the SNC Partnership) and dissolve the Alliance Strategic Committee, the License Steering Committee, each Alliance Functional Committee and each License Functional Committee;
(iii) the Parties shall cause to be sold, licensed or otherwise disposed to the highest offeror (which could include either Party) all of the partnership interests in the SNC Partnership, which shall indirectly include, without limitation, the rights and obligations of the SNC Partnership under the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement, the Irbesartan License Agreement, the Know-How License Agreement, the Puerto Rico Purchase and Sale Agreement and the Toll Manufacturing Agreements, other than the rights to use the corporate names and trademarks containing the words “BMS”, “Bristol-Myers Squibb” or “Sanofi”; provided, however, that any obligation to supply active, substance chemical bulk or
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finished Products set forth in any such agreement shall continue for one year following such sale, license or other disposition; and
(iv) in the event the highest offeror is any Person other than Sanofi or its Affiliates, the Know-How License Agreement, the Irbesartan License Agreement, the Irbesartan Supply Agreement and the Clopidogrel License and Supply Agreement shall each be amended, on terms and conditions reasonably acceptable to Sanofi, to provide for those terms and conditions that are then customary in the pharmaceutical industry for such agreements, including, without limitation, provisions for confidentiality, indemnification and termination for material breach, as well as a diligence requirement that the offeror use reasonable commercial efforts to actively promote the Products (and the remedy for breach of such diligence requirement shall be termination of such amended and restated agreement); and
(v) the proceeds of such sale shall be distributed to the Parties in accordance with the formula set forth in Schedule 7.03 attached hereto.
SECTION 7.08. Special Put Option . (a) In the event of the expiration of the term of this Agreement pursuant to Section 7.01 (a) hereof prior to December 31, 2020 following a request by BMS to extend the term of this Agreement that is not accepted by Sanofi, BMS shall have the right, exercisable by delivery of Notice to Sanofi, to require Sanofi to purchase from BMS and from the relevant Affiliates of BMS, all of the rights and interests of BMS and its Affiliates to Irbesartan, Clopidogrel, the Products and New Indications and Line Extensions thereof, including, without limitation, BMS’s and its Affiliates’ interests in the SNC Partnership, the Development Agreement and the Co-Promotion Entities and BMS’s and its Affiliates’ intellectual property rights in Irbesartan, Clopidogrel, the Products and New Indications and Line Extensions thereof, for a price (the “ Non-Renewal Valuation ”) equal to [*]. In the event that the Parties fail to agree on [*] within 60 days of such notice of exercise:
(i) each Party shall, within 15 days of the expiration of such 60-day period, submit to an investment banking firm not having any substantial relationship with either Party, and reasonably acceptable to each Party (an “ Independent Firm ”), a proposed [*], together with documentation supporting such [*] (each such submission, a “[*]”);
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(ii) if the difference between the two [*] is [*], the [*] shall be [*];
(iii) in all other cases, the Independent Firm shall select, within 15 days of receipt of the [*] and supporting documentation, one of the [*] submitted to it as the [*] and shall not select any other number as the [*], and such [*] shall be the [*] used in determining the Non-Renewal Valuation and shall not be subject to contest; and
(iv) the fees and expenses of the Independent Firm shall be split equally between the Parties.
(b) On the date that has been mutually agreed to by the Parties, which shall be no later than sixty (60) days after the final determination of the [*] in accordance with this Section 7.08, (i) Sanofi shall pay an amount equal to the Non-Renewal Valuation by wire transfer, in immediately available funds, to the bank account of BMS notified to Sanofi at least two business days prior to the date of such purchase and sale, (ii) BMS shall deliver or assign, to Sanofi or its designated Affiliates, its and all of its Affiliates’ rights and interests in Irbesartan, Clopidogrel, the Products, New Indications and Line Extensions thereof, the SNC Partnership and each Co-Promotion Entity, together with duly executed written instruments of transfer or assignment with respect thereto, in form and substance reasonably satisfactory to Sanofi, (iii) the Irbesartan Supply Agreement shall be amended and restated (x) to require BMS and its Affiliates to supply no more than such amount of active substance chemical bulk containing Irbesartan that was supplied by BMS and its Affiliates during the [*] immediately preceding such date and (y) to terminate automatically, and without further action by any party thereto, on the first anniversary of such date and (iv) this Agreement, the Development Agreement and each Alliance Agreement (other than the Irbesartan Supply Agreement) shall be deemed to be terminated with effect as of such date.
SECTION 7.09. Interim Termination Period . During the period between the occurrence of any termination event described in this Article VII and the implementation of the consequences of such termination event, the Parties shall, and shall cause their respective Affiliates to, continue to perform their obligations under this Agreement and each Alliance Agreement in the ordinary course of business consistent with prior practice.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices . All notices, requests, claims, demands and other communications hereunder (collectively, “ Notices ”) shall be in writing, shall be in the English language and shall be given or made by delivery in person, by courier service, by facsimile (with receipt confirmed) or by registered or certified mail (return receipt requested, with postage prepaid), to the respective Parties at the following addresses:
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| Attention: | Directeur Juridique Adjoint | |
| Facsimile: | [omitted] | |
| Attention: | Vice President, Alliance Management | |
| Facsimile: | [omitted] | |
|
with a copy to:
Cleary, Gottlieb, Steen & Hamilton 41, avenue de Friedland 75008 Paris, France |
||
| Attention: | [omitted] | |
| Facsimile: | [omitted] | |
Any Party may designate another addressee (and/or change its address) for Notices hereunder by a Notice given pursuant to this Section 8,01. All Notices given to any Party in accordance with the provisions of this Section 8.01 shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile, or on the date ten business days after dispatch by certified or registered mail (postage prepaid) if mailed.
SECTION 8.02. Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed and performed entirely in that state.
SECTION 8.03. Specific Performance . Each Party agrees that a failure by any Party to perform its obligations under this Agreement will result in irreparable damage, and that specific performance of such obligations may be obtained without the posting of any bond or other security; provided , however , that the powers of the arbitrators under this Section 8.03 shall be limited to enforcing the obligations provided for in this Agreement as drafted,
SECTION 8.04. Dispute Resolution . All disputes between the Parties arising in connection with this Agreement (other than those explicitly specified in Section 3.06, 7.05(b)(ii) or 7.08 hereof) shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with such Rules with the proceedings conducted in the English language in Paris, France. The president of any arbitral tribunal shall not be a citizen of either the United States of America or the French Republic.
SECTION 8.05. Headings . All titles or captions contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
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SECTION 8.06. No Third Party Beneficiaries . Except for the provisions of Article VI hereof relating to Indemnified Parties, this Agreement shall be binding upon, and inure solely to the benefit of, the Parties hereto and permitted assigns, and nothing herein, express or implied, is intended to, or shall, confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.
SECTION 8.07. Severability . If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any applicable law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon the determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
SECTION 8.08. Assignment . This Agreement, and any or all of the rights and obligations hereunder, may be assigned by a Party only to an Affiliate of BMS or Sanofi in the event of a corporate reorganization (including to an entity that becomes an Affiliate in connection with such reorganization) involving the assumption of all or substantially all of such Party’s marketing or manufacturing functions in Territory A by such Affiliate, in which event rights may be assigned and obligations may be delegated to such Affiliate.
SECTION 8.09. Consents . Any consent or approval to any act or matter required under this Agreement must be in writing and shall apply only with respect to the particular act or matter to which such consent or approval is given, and shall not relieve any Party from the obligation to obtain the consent or approval, as applicable, wherever required under this Agreement to any other act or matter.
SECTION 8.10. Entire Agreement . This Agreement, the Development Agreement and the Alliance Agreements constitute the entire agreement of the Parties with respect to the subject matter contained herein and all prior agreements relative thereto which are not contained herein are terminated.
SECTION 8.1l. Waivers and Amendments . No modification of or amendment to this Agreement shall be valid unless in a writing signed by both Parties referring specifically to this Agreement and stating the Parties’ intention to modify or amend the same. Any waiver of any term or condition of this Agreement shall be in a writing signed by the Party sought to be charged with such waiver referring specifically to the term or condition to be waived, and no such waiver shall be deemed to constitute the waiver of any other term or condition of this Agreement.
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SECTION 8.12. Expenses. Each Party shall bear its own expenses in connection with the negotiation and execution of this Agreement and the Alliance Agreements.
SECTION 8.13. No Partnership or Joint Venture . This Agreement is not intended to create, and nothing contained herein shall be construed to create, an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on or with regard to the other Party. Each Party shall be severally responsible for its own covenants, obligations and liabilities as herein provided. No Party shall be under the control of, or shall be deemed to control any other Party. No Party is the legal representative, agent, joint venturer or employee of the other Party with respect to this Agreement for any purpose whatsoever, and no Party shall have the right or power to bind the other Party. No Party has the right or authority to assume or create any obligations of any kind or to make any representation or warranty on behalf of any other Party, whether express or implied, or to bind any other Party in any respect whatsoever. The provisions of this Agreement are intended only for the regulation of relations between the Parties, This Agreement is not intended for the benefit of non-Party creditors, and no rights are granted to non-Party creditors under this Agreement.
SECTION 8.14. Counterparts. This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which when taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the day and year first above written.
| BRISTOL-MYERS SQUIBB COMPANY | ||||
| By: | /s/ [signature illegible] | |||
| Name: | ||||
| Title: | ||||
| SANOFI | ||||
| By: | /s/ [signature illegible] | |||
| Name: | ||||
| Title: | ||||
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Schedule l.0l(a)
ALLIANCE AGREEMENTS
| 1. | SNC By-Laws |
| 2. | Règlement Intérieur |
| 3. | Clopidogrel License and Supply Agreement |
| 4. | Irbesartan License Agreement |
| 5. | Irbesartan Supply Agreement |
| 6. | Know-How License Agreement |
| 7. | Development Services Agreement |
| 8. | Toll Manufacturing Agreements |
| 9. | Puerto Rico Purchase and Sale Agreement |
| 10. | Partnership Services Agreement |
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Schedule l.0l(b)
TERRITORY A 1
|
Europe
|
Switzerland the United Kingdom (including England, Wales, Scotland, Isle of Man, Alderney, Northern Ireland, Channel Islands) |
|
| Albania | ||
| Andorra | ||
| Austria | ||
| Belgium |
Former USSR (Europe) (including Russia, Ukraine, Belorus, Moldavia, Estonia, Latvia, Lithuania) |
|
| Bulgaria | ||
| Cyprus | ||
| The Czech Republic | Vatican City State | |
| Slovakia | Former Yugoslavia (including Bosnia- | |
| Denmark |
Herzegovina, Croatia, Macedonia |
|
| Finland |
Montenegro, Serbia, Slovenia) |
|
|
France (including Martinique, Guadeloupe, French Guyana, French Polynesia, New Caledonia, Reunion and the other Overseas Departments and Territories) |
||
|
Africa
|
||
| Algeria | ||
| Angola | ||
| Germany | Benin | |
| Gibraltar | Botswana | |
| Greece | Burkina Faso | |
| Greenland | Burundi | |
| Hungary | Cambodia | |
| Iceland | Cameroon | |
| Irish Republic | Cape Verde Islands | |
| Italy | Central African Republic | |
| Liechtenstein | Chad | |
| Luxembourg | Comoros | |
| Malta and Gozo | Congo | |
| Monaco | Djibouti | |
| Netherlands | Egypt | |
| Norway | Equatorial Guinea | |
| Poland | Eritrea | |
| Portugal | Ethiopia | |
| Romania | Gabon | |
| San Marino | Gambia | |
| Spain | Ghana | |
| Sweden | Guinea |
| 1 |
Territory A will be deemed to include any country created by the division, consolidation or change of name of the countries listed above. |
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|
Africa (continued)
|
Asia
|
|
| Guinea-Bissau | Afghanistan | |
| Ivory Coast | Bahrain | |
| Kenya | Bangladesh | |
| Lesotho | Bhutan | |
| Liberia | Brunei | |
| Libya | Cambodia | |
| Madagascar | China (including Tibet, Taiwan, Macao) | |
| Malawi | Hong Kong | |
| Mali | India | |
| Mauritania | Indonesia | |
| Mayotte | Israel | |
| Mauritius, etc. | Jordan | |
| Morocco | South Korea | |
| Mozambique | Kuwait | |
| Namibia | Laos | |
| Niger | Lebanon | |
| Nigeria | Malaysia | |
| Occidental Sahara | Maldive Islands | |
| Rwanda | Mongolia | |
| St. Helena | Myanmar | |
|
Ascension |
Nepal | |
|
Tristan de Cunha |
Oman | |
| Sao Tome & Principe | Pakistan | |
| Senegal | Philippines | |
| Seychelles | Qatar | |
| Sierra Leone | Saudi Arabia | |
| Somalia | Singapore | |
| South Africa | Sri Lanka | |
| Spanish Presidios (including Ceuta, Melilla) | Syria | |
| Sudan | Thailand | |
| Swaziland | Turkey | |
| Tanzania | United Arab Emirates | |
| Togo | Former USSR (Asia) (including RSFSR | |
| Tunisia |
(Asia), Armenia (Hyastan), |
|
| Uganda |
Azerbaidjan, Georgia, Turkmenistan, |
|
| Zaire |
Uzbekistan, Tadjikistan, Kazakhstan, |
|
| Zambia |
Kirghizia) |
|
| Zimbabwe | Vietnam | |
| Yemen |
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Schedule 1.01 (c)
TERRITORY B 1
| North America | Oceania | |
| Canada | Australia | |
| Mexico | Fiji | |
| United States of America (including, | Kiribati | |
|
without, limitation, Puerto Rico, |
Mariana, Caroline and | |
|
the U.S. Virgin Islands, Guam, |
Marshall Islands |
|
|
American Samoa) for Clopidogrel |
Nauru | |
|
Only |
New Zealand | |
|
Papua New Guinea |
||
| Central America and the West Indies | Pitcairn Islands | |
|
Samoa (non-U.S.) |
||
| Anguilla | Solomon Islands | |
| Antigua | Tonga | |
| Aruba | Tuvalu | |
| Bahamas | Vanuatu | |
| Barbados | ||
| Belize | South America | |
| Bermuda | ||
| Cayman Islands | Argentina | |
| Costa Rica | Bolivia | |
| Dominica | Brazil | |
| Dominican Republic | Chile | |
| Grenada | Colombia | |
| Guatemala | Ecuador | |
| Haiti | Falkland Islands | |
| Honduras | Guyana | |
| Jamaica | Paraguay | |
| Montserrat | Peru | |
| Netherlands Antilles | Surinam | |
| Nicaragua | Uruguay | |
| Panama | Venezuela | |
| St. Kitts-Nevis | ||
| St. Lucia | ||
| St. Vincent and the Grenadines | ||
| EI Salvador | ||
| Trinidad and Tobago | ||
| Turks and Caicos Islands | ||
| Virgin Islands (British) | ||
| 1 |
Territory B will be deemed to include any country created by the division, consolidation or change of name of the countries listed above. |
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Schedule 4.01(a)-l
ANNUAL BUDGETARY TARGETS 1
TERRITORY A
|
PRODUCT: |
||||||||||||||||
|
($000s) |
||||||||||||||||
|
Total
Territory |
Terr. A SNC
Partnership 5 |
Total
Local JVs |
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Medical |
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Other Income/Expense |
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Interest |
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Other* |
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JV Profit/Loss Before Selling |
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Effort Remuneration |
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Selling Effort Remuneration |
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JV Profit/Loss 3 |
| 1 |
To be prepared on a management information basis. |
| 2 |
Provided for information only. |
| 3 |
Only these items are subject to approval. |
| 4 |
Sales information will also be provided for countries in which there is Co-Marketing. |
| 5 |
Includes central R&D, central marketing and other direct costs of the Territory A SNC Partnership. |
| * | Provide Detail. |
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 4.02(a)-2
LONG-RANGE PLANS 1
TERRITORY A
| PRODUCT: | ||||||||||
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Budget
1997 |
1998 |
Projection
1999 |
2000 | |||||||
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Distribution |
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Management Gross Margin |
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Direct Product Expenses |
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Samples |
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Advertising/Promotion |
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Clinicals |
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Salesforce |
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Other Direct Costs |
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Variable Product Contribution |
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Allocated Costs |
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Marketing |
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Medical |
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Administration |
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Other Income/Expense |
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Interest |
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Other * |
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JV Profit/Loss Before Selling |
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Effort Remuneration |
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Selling Effort Remuneration |
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JV Profit/Loss 3 |
| 1 |
To be prepared on a management information basis. |
| 2 |
Only these items are subject to approval. |
| 3 |
Sales information will also be provided for countries in which there is Co-Marketing. |
| * | Provide detail |
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 5.07(b)
TRADEMARKS TO BE USED IN TERRITORY A
| I. | IRBESARTAN |
|
Form of Marketing |
Trademark
|
|
|
Co-Promotion |
Aprovel
|
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Co-Marketing (Sanofi)
|
Aprovel
|
|
|
Co-Marketing (BMS) |
Karvea |
| II. | CLOPIDOGREL |
|
Form of Marketing
|
Trademark
|
|
|
Co-Promotion
|
Plavix
|
|
|
Co-Marketing (Sanofi)
|
Plavix |
|
|
Co-Marketing (BMS)
|
Iscover |
79604/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 5.08(c)
“[*]” FORMULA
[*]
79604/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 7.03
“[*]” FORMULA
| [*] | [Note: Approximately two pages of text are omitted.] |
79604/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Exhibit 10.5
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
EXECUTION COPY
Amendment No. 1
to the Territory A
Alliance Support Agreement
This AMENDMENT No. 1 (this “ Amendment No. 1 ”). dated as of October 17, 2001 and effective as of October 1, 2001 (the “ Effective Date ”) to the Territory A Alliance Support Agreement dated as of January 1, 1997 is hereby made by and between Sanofi-Synthélabo, a soci é t é anonyme organized and existing under the laws of the French Republic (“ SSBO ”) as the successor in interest to Sanofi, a soci é t é anonyme organized under the laws of the French Republic, and Bristol-Myers Squibb Company, a Delaware corporation (“ BMS ” and, together with SSBO, the “ Parties ” and, individually, each a “ Party ”).
W I T N E S S E T H :
WHEREAS, the Parties have entered into a Territory A Alliance Support Agreement dated as of January 1, 1997, as formerly amended or modified (the “ Agreement ”); and
WHEREAS, the Parties wish to amend the non-competition provisions of the Agreement with respect to the commercialization of Irbesartan Products or any other product having substantially the same mechanism of action.
NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants and the terms and conditions set forth herein, the Parties hereby agree as follows:
1. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Agreement.
| 2. | (a) Article I of the Agreement shall be amended by the addition of the following defined terms to Section 1.01: |
“ Alliance Support Agreements ” means this Agreement, the Territory B Alliance Support Agreement dated as of January 1, 1997 by and between each of the Parties and the U.S. Alliance Support Agreement dated as of October 17,2001 by and between each of the Parties, in each case as amended, modified, supplemented or restated from time to time.
“ Business ” means the commercialization, directly or indirectly, of any Irbesartan Product or any other product having substantially the same mechanism of action as any Irbesartan Product (including, without limitation, through the granting of a license to any intellectual property related to Irbesartan or Irbesartan Products).
“ Compliance Period ” means the period commencing on the Effective Date and ending upon [*] of the date on which the [*] Alliance Support Agreements expires or terminates.
“ Corresponding Percentage ” means (i) 50.1% if the Non-Acquisition Party is SSBO, and (ii) 49.9% if the Non-Acquisition Party is BMS.
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
“ SSBO ” means Sanofi-Synthélabo, a soci é t é anonyme organized and existing under the laws of the French Republic and the successor in interest to Sanofi.
(b) Article I of the Agreement shall be further amended by the addition of the following defined terms to Section 1.02:
|
Defined Term |
Section Where Defined | |
|
Acquisition Party |
9.02 | |
|
Competing Business |
9.02(a) | |
|
Competitive Activities |
9.01 | |
|
Covered Enterprise |
9.01 | |
|
Non-Acquisition Party |
9.02 |
3. Section 5.02 of the Agreement shall be amended by deleting Section 5.02 in its entirety and replacing it with the following paragraph:
Section 5.02 Non-Competition . (a) During the period from and after the date hereof until [*], each Party shall not, and shall cause its Affiliates not to, directly or indirectly, except through the SNC Partnership, [*].
(b) Notwithstanding anything to the contrary contained herein, the restrictions of Section 5.02(a) hereof shall not apply (i) with respect only to any terminated country(ies), to the highest offeror (and its Affiliates) under Section 7.03(i) hereof; (ii) with respect only to any terminated country(ies), to the Country Non-Terminating Party (and its Affiliates) which proceeds alone with the commercialization of any Clopidogrel Product in such country(ies) pursuant to Section 7.03(ii) hereof; (iii) with respect only to any Clopidogrel Product subject to an Unsatisfactory Final Outcome, to the highest offeror (and its Affiliates) under Section 7.05(a)(iii) hereof; (iv) with respect only to any Clopidogrel Product subject to a Safety Problem, to the Non-Concerned Party (and its Affiliates) which continues commercializing such Clopidogrel Product in accordance with Section 7.05(b)(ii) hereof; (v) following expiration or early termination of this Agreement, to the highest offeror (and its Affiliates) under Section 7.07(iii) hereof; and (vi) upon payment of the Non-Renewal Valuation following exercise of the special put option under Section 7.08 hereof, to SSBO and its Affiliates.
4. Section 7.01(c) of the Agreement shall be amended by deleting the last sentence thereof and replacing it with the following sentence:
All of the Parties’ rights and obligations under this Article VII and under Sections 5.02, 5.03, 5.06, 6.01, 6.02, 6.03, 8.02, 8.03, 8.04 and 8.12 and Article IX shall survive such expiration or early termination for the applicable period, if any.
2
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
5. The Agreement shall be amended by the addition of the following Article IX:
ARTICLE IX
NON-COMPETITION
Section 9.01 Non-Competition Covenants . Each Party agrees not to, and to cause each of its Affiliates not to, directly or indirectly (other than to or through its direct or indirect participation in the SNC Partnership), at any time during the Compliance Period, engage in or undertake any Competitive Activities anywhere within Territory A. “ Competitive Activities ” shall mean (i) [*], or (ii) [*] (each such Person, a “ Covered Enterprise ”).
Section 9.02 Acquisition of Ownership Interest in a Covered Enterprise . Section 9.01 hereof shall in no event be deemed to prevent or restrict or apply to the acquisition by a Party or its Affiliates (the “ Acquisition Party ”, with the remaining Party being the “ Non-Acquisition Party ”) of an ownership interest (regardless of whether such interest is a minority interest, a majority interest or a controlling interest) in a Covered Enterprise and/or to the exercise of corresponding operational, management or control rights with respect to such Covered Enterprise, except that if at any time following the first anniversary of the acquisition by the Acquisition Party of ownership interests representing in the aggregate more than [*] of the total equity in a Covered Enterprise the Non-Acquisition Party demonstrates to the Acquisition Party that such acquisition has had a material adverse effect on the commercialization of Irbesartan Products by the SNC Partnership in the portion of Territory A where such Covered Enterprise engages in or undertakes the Business, the Acquisition Party shall, at its option, either:
(a) cause the Covered Enterprise to divest itself of the Business (the “ Competing Business ”) within twelve (12) months of such demonstration by the Non-Acquisition Party; or
(b) offer to the Non-Acquisition Party the right to acquire the Corresponding Percentage of the Acquisition Party’s ownership interest in the Competing Business at a valuation which, taking into account the percentage of the gross annual revenues of the Covered Enterprise that are represented by the Competing Business, is in proportion to the price paid by the Acquisition Party for the Covered Enterprise, in the understanding that should the Non-Acquisition Party decline to acquire such a participation in the Competing Business the Non-Acquisition Party shall have no further rights under this Article IX to challenge such acquisition.
Section 9.03 Exceptions to Non-Competition Covenants . Sections 9.01 and 9.02 hereof shall not prevent or restrict or apply to:
(a) A Party that elects to proceed alone with the commercialization of Irbesartan Products in any country within Territory A or in all of Territory A pursuant to:
3
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
(i) Section 7.03(ii) hereof, but solely with respect to such Party’s (or its Affiliates’) Competitive Activities in the countries in Territory A where such Party has elected to proceed alone; or
(ii) Section 7.05(b)(ii) hereof;
in the understanding that the other Party shall remain subject to Sections 9.01 and 9.02 hereof in any such countries and in the remaining countries in Territory A.
(b) A Party that acquires the right to commercialize Irbesartan Products in any country within Territory A or in all of Territory A from the SNC Partnership (and/or the other Party and its Affiliates) pursuant to:
(i) Section 7.03(i) hereof, but solely with respect to such Party’s (or its Affiliates’) Competitive Activities in the countries in Territory A with respect to which such rights were acquired;
(ii) Section 7.05(a)(iii) hereof;
(iii) Section 7.07(iii) hereof; or
(iv) Section 7.08 hereof;
in the understanding that the other Party shall remain subject to Sections 9.01 and 9.02 hereof in any such countries and in the remaining countries in Territory A.
(c) Either Party after the date on which a Third Party acquires the right to commercialize Irbesartan Products in any country within Territory A or in all of Territory A from the SNC Partnership (and/or the Parties and their Affiliates) pursuant to:
(i) Section 7.03(i) hereof, but solely with respect to the Competitive Activities of the Parties or their Affiliates in the countries in Territory A with respect to which such rights were acquired;
(ii) Section 7.05(a)(iii) hereof; or
(iii) Section 7.07(iii) hereof.
Section 9.04 Survival . The expiration or early termination of this Agreement pursuant to Article VII hereof expressly shall not relieve any Party from its obligations under this Article IX, which Article shall survive until the end of the Compliance Period.
Section 9.05 Breach . Without otherwise limiting the remedies available to any Party, a breach by a Party or any of its Affiliates of any obligation under this Article IX shall not constitute a material breach under Section 7.06(iii) hereof.
4
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Section 9.06 Lost Profits and Consequential Damages . In no event shall a Party be liable to the other Party for lost profits or for any consequential damages that such other Party may suffer under or in connection with this Article IX.
Section 9.07 Consideration and Inducement . Each Party acknowledges and agrees that (i) each of the covenants of the Parties set forth in Sections 9.01 and 9.02 hereof has been agreed following extensive negotiations among the Parties, (ii) the Parties have bargained for the benefit of such covenants in order to protect their investment in the SNC Partnership, (iii) each of the covenants of the Parties set forth in Sections 9.01 and 9.02 hereof is an essential element of the transactions contemplated by the Parties to protect their investment in the SNC Partnership and (iv) it has independently consulted with its counsel and, after such consultation, agrees that the covenants set forth in Sections 9.01 and 9.02 hereof are reasonable and proper.
Section 9.08 Deemed Amendment . The Parties’ covenants contained in Sections 9.01 and 9.02 hereof with respect to the Business, specified time period and geographic area are separate and several. Each Party acknowledges that the limitations and restrictions set forth in Sections 9.01 and 9.02 hereof are reasonable to protect the legitimate commercial interests of each of the Parties and their Affiliates, and in particular, to protect the investment in the SNC Partnership, and that such covenants are given for valuable consideration and are valid and enforceable against each Party, and each Party hereby waives all defenses (other than fraud and misrepresentation and other defenses similar thereto) to the maximum extent possible regarding the strict enforcement of such covenants. If any court of competent jurisdiction determines that the definition of Business, the specified time period or the geographic area are unreasonable, arbitrary, too broad in description or scope, or against public policy, the shorter or smaller time period or geographic area, or reduced scope of business, as the case may be, determined by such court to be reasonable, non-arbitrary, sufficiently narrow or not against public policy, may be enforced against each Party. Notwithstanding the foregoing, each Party agrees to honor the provisions of Sections 9.01 and 9.02 hereof, including the definition of Business, the time period and the geographic area as specified herein and not to contest the enforceability of such definition of Business, time period or geographic area. If any covenant or provision in this Article IX is determined to be void or unenforceable, in whole or in part, such determination shall not affect or impair, or be deemed to affect or impair, the validity or enforceability of any other covenant or provision of this Article IX or of this Agreement.
6. Each Party shall cause its Affiliates that are parties to any local agreements containing non-competition provisions inconsistent with or contrary to the provisions of this Amendment No. 1 to amend such local agreements to be in accordance with these provisions.
7. Except as explicitly amended hereby, other provisions of the Agreement (as otherwise amended, modified, supplemented or restated prior to the Effective Date) shall remain unchanged.
8. This Amendment No. 1 shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed and performed entirely in that state.
5
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
9. This Amendment No. 1 shall be effective as of the Effective Date, notwithstanding its execution on the date hereof.
6
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
IN WITNESS WHEREOF, the Parties have duly executed this Amendment No. 1 to the Territory A Alliance Support Agreement as of the day and year first written above.
| SANOFI-SYNTHÉLABO | ||||
| By: | /s/ Jean-Pierre KERJOUAN | |||
| Name: | Jean-Pierre KERJOUAN | |||
| Title: | Senior Vice President General Counsel | |||
| By: | /s/ Jean-Claude LEROY | |||
| Name: | Jean-Claude LEROY | |||
| Title: | Senior Vice President Strategy and Business Development | |||
| BRISTOL-MYERS SQUIBB COMPANY | ||||
| By: | /s/ Richard J. Lane | |||
| Name: | Richard J. Lane | |||
| Title: | Executive Vice President | |||
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Exhibit 10.6
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
TERRITORY B
ALLIANCE SUPPORT AGREEMENT
between
SANOFI
and
BRISTOL-MYERS SQUIBB COMPANY
dated as of January 1, 1997
TABLE OF CONTENTS
| Page | ||||
| ARTICLE I | ||||
| DEFINITIONS | ||||
| SECTION 1.01. | Defined Terms | 4 | ||
| SECTION 1.02. | Additional Defined Terms | 9 | ||
| SECTION 1.03. | Accounting Terms | 10 | ||
| ARTICLE II | ||||
| REPRESENTATIONS AND WARRANTIES | ||||
| SECTION 2.01. | BMS Representations | 10 | ||
| SECTION 2.02. | Sanofi Representations | 12 | ||
| ARTICLE III | ||||
| MANAGEMENT OF THE ALLIANCE | ||||
| SECTION 3.01. | Alliance Strategic Committee | 13 | ||
| SECTION 3.02. | Alliance Functional Committees | 14 | ||
| SECTION 3.03. | Finance Committee | 14 | ||
| SECTION 3.04. | Manufacturing and Sourcing Committee | 14 | ||
| SECTION 3.05. | Committee Composition and Decision Making | 15 | ||
| SECTION 3.06. | Deadlock Resolution | 15 | ||
| SECTION 3.07. | Alliance Management | 17 | ||
| SECTION 3.08. | Cross-Territory Issues | 17 | ||
| SECTION 3.09. | Implementation of Decisions | 18 | ||
| SECTION 3.10. | Delegation | 18 | ||
| ARTICLE IV | ||||
| BUDGETARY PROCESS | ||||
| SECTION 4.01. | Budgetary Development | 18 | ||
| SECTION 4.02. | Budgetary Deadlocks | 19 | ||
| SECTION 4.03. | Out-of-Budget Situations | 19 | ||
SS_NYL2/121582 19 (PA_79523 2)
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
| Page | ||||
| ARTICLE V | ||||
| ADDITIONAL AGREEMENTS | ||||
| SECTION 5.01. | Termination of Master Territory B Agreement | 19 | ||
| SECTION 5.02. | Non-Competition | 20 | ||
| SECTION 5.03. | Confidentiality | 20 | ||
| SECTION 5.04. | Insurance | 21 | ||
| SECTION 5.05. | Further Assurances | 21 | ||
| SECTION 5.06. | Adverse Event Reporting | 21 | ||
| SECTION 5.07. | Registration; Labeling | 23 | ||
| SECTION 5.08. | Selling Efforts | 23 | ||
| ARTICLE VI | ||||
| INDEMNIFICATION | ||||
| SECTION 6.01. | General Indemnification | 25 | ||
| SECTION 6.02. | Special Indemnities | 25 | ||
| SECTION 6.03. | Indemnification Procedures | 26 | ||
| ARTICLE VII | ||||
| TERM AND TERMINATION | ||||
| SECTION 7.01. | Term; Expiration | 28 | ||
| SECTION 7.02. | Right of Country Termination | 28 | ||
| SECTION 7.03. | Consequences of Country Termination | 29 | ||
| SECTION 7.04. | Right of Product Termination Throughout Territory B | 31 | ||
| SECTION 7.05. | Consequences of Product Termination Throughout Territory B | 31 | ||
| SECTION 7.06. | Right of Alliance Termination | 34 | ||
| SECTION 7.07. | Consequences of Alliance Termination | 35 | ||
| SECTION 7.08. | Special Put Option | 36 | ||
| SECTION 7.09. | Interim Termination Period | 37 | ||
SS_NYL2/121582 19 (PA_79523 2)
ii
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
| Page | ||||
| ARTICLE VIII | ||||
| MISCELLANEOUS | ||||
| SECTION 8.01. | Notices | 38 | ||
| SECTION 8.02. | Governing Law | 39 | ||
| SECTION.8.03. | Specific Performance | 39 | ||
| SECTION 8.04. | Dispute Resolution | 39 | ||
| SECTION 8.05. | Headings | 39 | ||
| SECTION 8.06. | No Third Party Beneficiaries | 40 | ||
| SECTION 8.07. | Severability | 40 | ||
| SECTION 8.08. | Assignment | 40 | ||
| SECTION 8.09. | Consents | 40 | ||
| SECTION 8.10. | Entire Agreement | 40 | ||
| SECTION 8.11. | Waivers and Amendments | 40 | ||
| SECTION 8.12. | Expenses | 41 | ||
| SECTION 8.13. | No Partnership or Joint Venture | 41 | ||
| SECTION 8.14. | Counterparts | 41 | ||
SCHEDULES
| Schedule 1.01(a) | Alliance Agreements | |
| Schedule 1.01(b) | Territory A | |
| Schedule l.01(c) | Territory B | |
| Schedule 4.01(a)-1 | Template for Annual Budgetary Targets | |
| Schedule 4.01(a)-2 | Template for Long-Range Plans | |
| Schedule 5.07(b) | Trademarks to Be Used in Territory B | |
| Schedule 5.08(c) | “[*]” Formula | |
| Schedule 7.03 | “[*]” Formula |
SS_NYL2/121582 19 (PA_79523 2)
iii
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
TERRITORY B ALLIANCE SUPPORT AGREEMENT dated as of January 1, 1997 between Sanofi, a sotiété anonyme organized under the laws of the French Republic (“ Sanofi ”), and Bristol-Myers Squibb Company, a Delaware corporation (“ BMS ” and, together with Sanofi, the “ Parties ” and, individually, each a “ Party ”);
W I T N E S S E T H :
WHEREAS, BMS, Sanofi and Sterling Winthrop Inc., a Delaware corporation (“ Sterling ”), entered into a Development Agreement dated as of July 29, 1993 (the “ Development Agreement ”) concerning the development of two new chemical entities discovered and patented by Sanofi, one known as SR 47436, with the international non-proprietary name Irbesartan (“ Irbesartan ”) and one known as SR 25990C with the international non-proprietary name Clopidogrel Hydrogenosulphate (“ Clopidogrel ”), each with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;
WHEREAS, BMS, Sanofi and Sterling entered into a Master Territory B Agreement dated as of July 29, 1993 (the “ Master Territory B Agreement ”), for the commercialization of the Products in Territory B (as such terms are defined herein);
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30, 1994 among Eastman Kodak Company, Sanofi and Sterling, Sanofi acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Master Territory B Agreement and the Development Agreement;
WHEREAS, in accordance with Section 4.1.1 of the Master Territory B Agreement, BMS and Sanofi have determined an appropriate legal structure to be implemented for the commercialization of .the Products in Territory B;
WHEREAS, Sanofi and BMS have formed, through their indirect wholly owned subsidiaries, Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership, a Delaware general partnership (the “ Territory B Partnership ”), to effectuate certain of the transactions outlined in the Master Territory B Agreement (specifically excepting the manufacture, sale and commercialization of Irbesartan Products (as defined herein) in the United States of America) and, in furtherance thereof, the Territory B Partnership will, among other things, procure the active substance chemical bulk used in the Products, enter into arrangements for the processing of such active substance chemical bulk and the packaging, if applicable, of the finished Products into bottles and blister packs, pay royalties for the use of certain patents, trademarks and know-how necessary for the Products, coordinate the maintenance of adequate supplies of such active substance chemical bulk and finished Products, arrange for the distribution of finished Products by the Marketing Entities
SS_NYL2/121582 19 (PA_1/79523 2)
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
2
(as defined herein), ensure the quality of finished Products, coordinate the local marketing of finished Products and further develop the Products in Territory B;
WHEREAS, in determining such appropriate legal structure, BMS and Sanofi have agreed that the United States of America would no longer be included within the definition of Territory B solely with respect to Irbesartan and Irbesartan Products and intend to enter into a license agreement concerning the manufacture, sale and commercialization of Irbesartan Products in the United States of America (the “ U.S. Irbesartan License ”);
WHEREAS, in furtherance of commercializing the Products in Territory B, the Parties and their respective Affiliates intend to enter into the following agreements;
(a) a Partnership Agreement (the “ Territory B Partnership Agreement ”) between Bristol-Myers Squibb Company Investco, Inc. and Sanofi Pharmaceuticals, Inc. for the Territory B Partnership and its governing committee, the Territory Management Committee (the “ Territory Management Committee ”);
(b) a Clopidogrel Intellectual Property License and Supply Agreement (the “ Clopidogrel License and Supply Agreement ”) between the Territory B Partnership and Sanofi for the license of certain patent, trademark and know-how rights for Clopidogrel and Clopidogrel Products from Sanofi to the Territory B Partnership and the supply of active substance chemical bulk for Clopidogrel in exchange for the payment to Sanofi of the Discovery Royalty and the Supply Payment (as such terms are defined therein);
(c) an Irbesartan Intellectual Property License Agreement (the “ Irbesartan License Agreement ”) between the Territory B Partnership and Sanofi for the license of certain patent, trademark and know-how rights for Irbesartan and Irbesartan Products from Sanofi to the Territory B Partnership in exchange for the payment to Sanofi of the Discovery Royalty (as such term is defined therein);
(d) an Irbesartan Supply Agreement (the “ Irbesartan Supply Agreement ”) among BMS, Sanofi and their respective Affiliates for the supply of active substance chemical bulk for Irbesartan;
(e) a Product Know-Know License Agreement (the “ Know-How License Agreement ”) among the Territory B Partnership, Sanofi and BMS for the license of know-how developed by Sanofi and BMS pursuant to the Development Agreement, the use of corporate names by the Territory B Partnership and the development of Irbesartan and Clopidogrel on or after January 1 , 1997 in exchange for the payment of the Development Royalty (as such term is defined therein) to each of Sanofi and BMS;
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(f) a Development Services Agreement (the “ Development Services Agreement ”) among the Territory B Partnership, an Affiliate of Sanofi and E.R. Squibb & Sons, Inc. pursuant to which such Affiliate of Sanofi and E.R. Squibb & Sons, Inc. will provide services to the Territory B Partnership in connection with the continuing development of the Products;
(g) an Irbesartan Toll Manufacturing Agreement (the “ Irbesartan Toll Manufacturing Agreement ”) for the contract manufacturing of active substance chemical bulk for Irbesartan into Irbesartan Products;
(h) a Clopidogrel Toll Manufacturing Agreement (the “ Clopidogrel Toll Manufacturing Agreement ” and, together with the Irbesartan Toll Manufacturing Agreement, the “ Toll Manufacturing Agreements ”) for the contract manufacturing of active substance chemical bulk for Clopidogrel into Clopidogrel Products;
(i) a Purchase and Sale Agreement (the “ Puerto Rico Purchase and Sale Agreement ”) among the Territory B Partnership and Affiliate(s) of BMS for the sale of active substance chemical bulk to such Affiliate(s) and the purchase of finished Products; and
(j) a Partnership Services Agreement (the “ Partnership Services Agreement ”) between the Territory B Partnership and E.R. Squibb & Sons, Inc. for the provision of administrative and operating services to the Territory B Partnership; and
WHEREAS, the Parties wish to enter into this Agreement to support the general framework for the commercialization and development of the Products in Territory B, specifically excepting the commercialization of Irbesartan Products in the United States of America;
NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions contained herein, and for other good, valuable and binding consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Product of which any Party or any of its Affiliates becomes aware, whether or not considered drug related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.
“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however, that, with respect to Sanofi, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Sanofi that would be an Affiliate of Sanofi solely by reason of its being controlled by Elf Aquitaine. For the purposes of this definition, “ contro l” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person or to veto any material decision relating to the management or policies of a Person, in each case whether through the ownership of voting securities, by contract or otherwise, (b) the beneficial ownership, directly or indirectly , of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial ownership of at least 50% of the partnership interests of a general partnership. The Parties confirm that each Co-Promotion Entity in Territory B shall be considered to be an Affiliate of BMS.
“ Agreement ” means this Territory B Alliance Support Agreement, as originally executed and as amended, modified, supplemented or restated from time to time, in accordance with Section 8.11 hereof.
“ Alliance Agreements ” means the agreements listed in Schedule 1.01 (a) attached hereto, as well as any other agreement entered into by any Affiliate of BMS or Sanofi, as the case may be, in furtherance of the development and/or commercialization of any Product in Territory B, specifically excepting any agreements related to the manufacture, sale or commercialization of Irbesartan Products in the United States of America.
“ beneficial owner ” has the meaning set forth in Rule 13d-3 of the U.S. Securities Exchange Act of 1934, as amended.
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“ BMS Affiliate ” means an Affiliate of BMS.
“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof,
“ Co-Marketing ” means, for each Product and for any country in Territory B, the marketing of such Product in such country under two or more trademarks by the applicable Marketing Entities.
“ Co-Promotion ” means, for each Product and any country in Territory B, the marketing of such Product in such country under one trademark by the applicable Marketing Entity.
“ Competing Product ” means, with respect to any Product, any other product that [*], but which is not [*] set forth in Schedule [*]or selected for [*] by [*].
“ Damages ” means any liability (whether arising out of [*]or otherwise), obligation, loss, fine, damages, arbitration award, settlement amount, penalty, claim, cost or expense (including, without limitation, [*], fees and expenses [*], but excluding [*]). Damages shall include, without limitation, [*] liability, [*] liability (including, without limitation, any liability relating to [*]) and damages for [*].
“ Development Committee ” has the meaning set forth in the Know-How License Agreement.
“ Elf Aquitaine ” means Société Nationale Elf Aquitaine, a société anonyme organized under the laws of the French Republic.
“ Encumbrance ” means any security interest, pledge, mortgage, lien (including, without limitation, tax liens), charge, encumbrance, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.
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“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.
“ Irbesartan Product ” means the product or products having as an active ingredient Irbesartan or any salt, ester, metabolite or pro-drug thereof,
“ License Functional Committee ” has the meaning set forth in the Know-How License Agreement.
“ License Steering Committee ” has the meaning set forth in the Know-How License Agreement.
“ License Strategic Decision ” has the meaning set forth in the Know-How License Agreement.
“ Line Extension ” means, for each Product and with respect to development conducted on or after January 1,1997, any new dosage or new form of administration of such Product.
“ Loss of Exclusivity ” means the loss of exclusivity of a Product in any country in Territory B upon the occurrence of both of the following conditions: (i) such Product shall have lost its marketing exclusivity (whether by virtue of compulsory license under, or expiration, invalidity or unenforceability of, the patents covering such Product, loss or expiration of any exclusivity conferred de facto or de jure by any statutory marketing or data exclusivity or in any other cause) and (ii) one or more Competing Products shall have been legally marketed in such country by one or more Third Parties.
“ Major B Country ” means any country in Territory B representing at least [*] of aggregate Net Sales of Irbesartan Products in Territory B, as determined from time to time by the Finance Committee.
“ Market Penetration ” means, with respect to one or more Competing Products in any given country in Territory B, the number of units of such Competing Products sold in such country, expressed as a percentage of the sum of (i) the [*] with respect to which [*] constitute [*] and (ii) the [*], in each case over a period of [*], as reported by [*].
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“ Marketing Entity ” has the meaning set forth in the Territory B Partnership Agreement.
“ Net-Sales ” means for any given period and with respect to any Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any transfers between any Party and its Affiliates for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outdating or the return of such Product.
“ New Indication ” means, for each Product and with respect to development conducted on or after January 1, 1997, any new therapeutic use or application of such Product.
“ Person ” means any individual, partnership, firm, corporation, société anonyme, société en nom collectif, société en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.
“ Product ” means a Clopidogrel Product or an Irbesartan Product, and “ Products ” means both a Clopidogrel Product and an Irbesartan Product.
“ Sanofi Affiliate ” means an Affiliate of Sanofi.
“ Sanofi Pharma ” means Sanofi Pharma, a société anonyme organized and existing under the laws of the French Republic.
“ Selling Effort Remuneration ” means, for each country in which there is Co-Promotion of the Products, the aggregate remuneration paid by the Co-Promotion Entity in such country to the local Affiliates of the Parties to compensate them for their selling efforts, which shall be an amount equal to [*] of Net Sales of the Products in such country, subject to adjustment, or as otherwise determined by [*].
“ Serious Adverse Event ” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization,
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prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.
“ Territory ” means either Territory A or Territory B and “ Territories ” means both Territory A and Territory B.
“ Territory A ” means the countries and geographic areas described and listed in Schedule 1.01 (b) attached hereto.
“ Territory B ” means the countries and geographic areas described and listed in Schedule 1.01(c) attached hereto, which shall not include the United States of America for Irbesartan Products.
“ Third Patty ” means a Person who or which is neither a Party nor an Affiliate of a Party.
“ United States of America ” means any State or Commonwealth of the United States of America, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and any other territory, possession or military base of the United States of America.
“ U.S. GAAP ” means generally accepted accounting principles in the United States of America in effect from time to time applied consistently throughout the periods involved.
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SECTION 1.02. Additional Defined Terms. The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:
|
Defined Term |
Section Where Defined | |
|
Alliance Functional Committees |
||
|
Alliance Management |
3.02 | |
|
Alliance Strategic Committee |
3.07 | |
|
Alliance Strategic Decisions |
3.01 | |
|
Annual Budgetary Targets |
3.01 | |
|
BMS |
4.01(a) | |
|
Breaching Party |
Preamble | |
|
Clopidogrel |
7.06 (iii) | |
|
Clopidogrel License and Supply Agreement |
Recitals | |
|
Clopidogrel Toll Manufacturing Agreement |
Recitals | |
|
Concerned Party |
Recitals | |
|
Confidential Information |
7.05(b) | |
|
Co-Promotion Entity |
5.03(a) | |
|
Country Non-Terminating Parry |
4.01(a) | |
|
Country Terminating Party |
7.03 | |
|
Covered Activities |
7.03 | |
|
Development Agreement |
6.02(a) | |
|
Development Services Agreement |
Recitals | |
|
Finance Committee |
Recitals | |
|
First Party |
3.02 | |
|
Indemnified Party |
6.02(a) | |
|
Indemnifying Parry |
6.03(a) | |
|
Indemnity Notice |
6.03(a) | |
|
Independent Firm |
6.03(d) | |
|
Irbesartan |
7.08(a)(i) | |
|
Irbesartan License Agreement |
Recitals | |
|
Irbesartan Supply Agreement |
Recitals | |
|
Irbesartan Toll Manufacturing Agreement |
Recitals | |
|
Know-How License Agreement |
Recitals | |
|
Long-Range Plans |
Recitals | |
|
Manufacturing and Sourcing Committee |
4.01(a) | |
|
Master Territory B Agreement |
3.02 | |
|
Multiple |
Recitals | |
|
Non-Concerned Parry |
7.08(a) | |
|
Non-Renewal Valuation |
7.05(b)(ii) | |
|
Notices |
08(a) | |
|
Partnership Services Agreement |
8.01 | |
| Recitals |
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|
Party |
Preamble | |
|
Proposed Multiple |
7.08(a)(i) | |
|
Puerto Rico Purchase and Sale Agreement |
Recitals | |
|
Reporting Party |
5.06(b) | |
|
Revised Projection |
4.03 | |
|
Safety Expert |
7.05(b)(ii) | |
|
Safety Problem |
7.04(iii) | |
|
Sanofi |
Preamble | |
|
Sterling |
Recitals | |
|
Territory B Budget |
4.01 (a) | |
|
Territory B Partnership |
Recitals | |
|
Territory B Partnership Agreement |
Recitals | |
|
Territory Management Committee |
Recitals | |
|
Third Party Claim |
6.03(a) | |
|
Toll Manufacturing Agreements |
Recitals | |
|
Unsatisfactory Final Outcome |
3.06(b) | |
|
U.S. Irbesartan License |
Recitals |
SECTION 1.03. Accounting Terms . Except as otherwise specifically provided herein, all terms herein that relate to accounting matters shall be interpreted in accordance with U.S. GAAP.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.01. BMS Representations . BMS represents and warrants each of the following:
(a) Organization: Powers . BMS (i) is a corporation duly organized and in good standing under the laws of the State of Delaware and (ii) has the corporate power to execute and deliver, and to perform its obligations under, this Agreement, Each of the BMS Affiliates that is, or will be, a party to any of the Alliance Agreements (i) is, or will be on the date of execution of such Alliance Agreement, a corporation, general partnership or other entity duly organized and validly existing under the laws of its jurisdiction of organization and (ii) has, or will have on the date of execution of such Alliance Agreement, the power to execute and deliver, and to perform its obligations, under such Alliance Agreement.
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(b) Authorization . The execution and delivery by BMS, the performance by it of its obligations under this Agreement, the execution and delivery by each BMS Affiliate of each Alliance Agreement entered into on the date hereof or hereafter and the performance by each BMS Affiliate of its obligations under such Alliance Agreement to which it is, or will be, a party (i) have been, or will be on the date of execution of such Alliance Agreement, duly authorized by all necessary action by BMS and each such BMS Affiliate and do not, or will not on the date of execution of such Alliance Agreement, require the consent or approval of the stockholders or creditors of BMS or any such BMS Affiliate, except such consents as have been obtained, and (ii) do not, or will not on the date of execution of such Alliance Agreement, (A) violate (x) any material provision of law, statute, rule or regulation, (y) the certificate of incorporation or by-laws or other constituent documents of BMS or such BMS Affiliate or (z) any order of any court or other Governmental Authority binding upon BMS or such BMS Affiliate or (B) violate, be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any material provisions of any indenture, agreement or other instrument to which BMS or such BMS Affiliate is a party or by which BMS or such BMS Affiliate or any of their properties or assets is bound.
(c) Enforceability . This Agreement and each Alliance Agreement have been, or will be on the date of execution of such Alliance Agreement, duly executed and delivered by BMS and each BMS Affiliate that is, or will be, a party to any Alliance Agreement and constitute, or will constitute on the date of execution of such Alliance Agreement, legal, valid and binding obligations of BMS and each such BMS Affiliate, enforceable against BMS and each such BMS Affiliate in accordance with their respective terms.
(d) Ownership of Capital Stock . BMS owns, beneficially or of record, a majority of the aggregate voting power of the issued and outstanding voting securities, or otherwise has the right to elect a majority of members to the Board of Directors or similar governing body, of each BMS Affiliate that is, or will be, a party to any Alliance Agreement or that has, or will have, a direct or indirect majority interest in a party to any Alliance Agreement and all such voting securities are fully paid, nonassessable and are owned free and clear of any Encumbrance.
(e) Efficacy and Safety . BMS and each BMS Affiliate that is or will be a party to any Alliance Agreement, to their best knowledge and belief, have not made any statement to Sanofi or any Sanofi Affiliate that is or will be a party to any Alliance Agreement regarding the efficacy or safety of any Product or any process for manufacturing, processing or finishing such Product that is in any material respect untrue or misleading, nor has BMS or such BMS Affiliate omitted to disclose to
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Sanofi or such Sanofi Affiliates any material fact or information regarding the efficacy or safety of any such process or Product.
SECTION 2.02. Sanofi Representations . Sanofi represents and warrants, as of the date hereof, each of the following:
(a) Organization: Powers . Sanofi (i) is a société anonyme duly organized and validly existing under the laws of the French Republic and (ii) has the corporate power to execute and deliver, and to perform its obligations under, this Agreement, Each of the Sanofi Affiliates that is, or will be, a party to any of the Alliance Agreements (i) is, or will be on the date of execution of such Alliance Agreement, a société anonyme, société en nom collectif or other entity duly organized and validly existing under the laws of its jurisdiction of organization and (ii) has, or will have on the date of execution of such Alliance Agreement, the power to execute and deliver, and to perform its obligations, under such Alliance Agreement.
(b) Authorization . The execution and delivery by Sanofi, the performance by it of its obligations under this Agreement, the execution and delivery by each Sanofi Affiliate of each Alliance Agreement entered into on the date hereof or hereafter and the performance by each Sanofi Affiliate of its obligations under such Alliance Agreement to which it is, or will be, a party (i) have been, or will be on the date of execution of such Alliance Agreement, duly authorized by all necessary action by Sanofi and each such Sanofi Affiliate and do not, or will not on the date of execution of such Alliance Agreement, require the consent or approval of the stockholders or creditors of Sanofi or any such Sanofi Affiliate, except such consents as have been obtained, and (ii) do not, or will not on the date of execution of such Alliance Agreement, (A) violate (x) any material provision of law, statute, rule or regulation, (y) the statuts or other constituent documents of Sanofi or such Sanofi Affiliate or (z) any order of any court or other Governmental Authority binding upon Sanofi or such Sanofi Affiliate or (B) violate, be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any material provisions of any indenture, agreement, or other instrument to which Sanofi or such Sanofi Affiliate is a party or by which Sanofi or such Sanofi Affiliate or any of their properties or assets is bound.
(c) Enforceability . This Agreement and each Alliance Agreement have been, or will be on the date of execution of such Alliance Agreement, duly executed and delivered by Sanofi and each Sanofi Affiliate that is, or will be, a party to any Alliance Agreement and constitute, or will constitute on the date of execution of such Alliance Agreement, legal, valid and binding obligations of Sanofi and each such Sanofi Affiliate, enforceable against Sanofi and each such Sanofi Affiliate in accordance with their respective terms.
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(d) Ownership of Capital Stock . Sanofi owns, beneficially or of record, a majority of the aggregate voting power of the issued and outstanding voting securities, or otherwise has the right to elect a majority of members to the Board of Directors or similar governing body, of each Sanofi Affiliate that is, or will be, a party to any Alliance Agreement or that has, or will have, a direct or indirect majority interest in a party to any Alliance Agreement and all such voting securities are fully paid, nonassessable and are owned free and clear of any Encumbrance.
(e) Efficacy and Safety . Sanofi and each Sanofi Affiliate that is or will be a party to any Alliance Agreement, to their best knowledge and belief, have not made any statement to BMS or any BMS Affiliate that is or will be a party to any Alliance Agreement regarding the efficacy or safety of any Product or any process for manufacturing, processing or finishing such Product that is in any material respect untrue or misleading, nor has Sanofi or such Sanofi Affiliate omitted to disclose to BMS or such BMS Affiliates any material fact or information regarding the efficacy or safety of any such process or Product.
ARTICLE III
MANAGEMENT OF THE ALLIANCE
SECTION 3.01. Alliance Strategic Committee . In order to ensure the implementation of the agreements set forth herein and in the Alliance Agreements, Sanofi and BMS shall be represented by an Alliance Strategic Committee (the “ Alliance Strategic Committee ”), which shall be responsible for the following decisions (collectively, the “ Alliance Strategic Decisions ”):
(i) approval of Annual Budgetary Targets and Long-Range Plans, substantially in the form of Schedules 4.01(a)-l and 4.01(a)-2 attached hereto, as well as the Territory B Budget;
(ii) establishment of a manufacturing plan for Territory B and coordination of such manufacturing plan with the manufacturing plan for Territory A;
(iii) selection of the commercial structures (i.e., Co-Marketing vs. Co-Promotion) and entities to market the Products in Territory B; and
(iv) resolution of any disagreement of the Territory Management Committee concerning the allocation of selling responsibilities of the local Affiliates of the Parties in any country where there is Co-Promotion of a Product.
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SECTION 3.02. Alliance Functional Committees . Subject to the general oversight and authority of the Alliance Strategic Committee, the following functional committees (the “ Alliance Functional Committees ”) are hereby established and shall be maintained and empowered as hereinafter provided: (i) a finance committee (the “ Finance Committee ”) and (ii) a manufacturing and sourcing committee (the “ Manufacturing and Sourcing Committee ”).
SECTION 3.03. Finance Committee . The Finance Committee shall be responsible for (i) proposing, implementing and modifying, as necessary, the appropriate legal and tax operating arrangements and structures for the marketing of the Products in each country in Territory B, (ii) establishing a calculation methodology for allocating the Selling Effort Remuneration between the Affiliates of the Parties in countries where there is Co-Promotion of the Products in Territory B, (iii) proposing, implementing and modifying, as necessary, the appropriate consolidation, reporting and sharing procedures relating to the commercialization of the Products in Territory B, (iv) selecting the names for the Co-Promotion Entities, (v) determining the method and amount of financing for the Territory B Partnership and the Co-Promotion Entities, (vi) determining which countries are Major B Countries, (vii) determining the terms and conditions for distribution arrangements in Non-Promotional Countries (as such term is defined in the Territory B Partnership Agreement) in Territory B and (viii) implementing the decisions of the Alliance Strategic Committee in Territory B. The Finance Committee shall report and make its recommendations to the Alliance Strategic Committee.
SECTION 3.04. Manufacturing and Sourcing Committee The Manufacturing and Sourcing Committee shall be responsible for (i) subject to Section 3.08(b) hereof, assuring the supply of active substance chemical bulk for Irbesartan on the most favorable terms then available and negotiating contracts for such supply with appropriate manufacturer(s), (ii) in the event Sanofi ceases to be the exclusive supplier of the active substance chemical bulk for Clopidogrel, selecting one or more alternate sources of supply for such active substance chemical bulk, (iii) setting the manufacturing fee and the other terms and conditions for the processing of active substance chemical bulk into finished Products, (iv) coordinating the supply of active substance chemical bulk and finished Products in Territory A, Territory B and, with respect to Irbesartan and Irbesartan Products, the United States of America, (v) implementing the decisions of the Alliance Strategic Committee and (vi) making recommendations concerning the establishment of a manufacturing plan for Territory B and the coordination of such plan with the manufacturing plan for Territory A. The Manufacturing and Sourcing Committee shall report and make its recommendations concerning the establishment of a manufacturing plan under clause (vi) above to the Alliance Strategic Committee and shall report and make all other recommendations and decisions to Alliance Management, who shall then decide whether such recommendations should be reported to the Alliance Strategic Committee or directly to the Territory Management Committee.
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SECTION 3.05. Committee Composition and Decision Making . (a) The Alliance Strategic Committee shall at all times consist of six (6) representatives, three (3) of whom shall represent BMS and three (3) of whom shall represent Sanofi. The representatives of BMS shall be the persons serving from time to time as (i) President, Worldwide Medicines Group, (ii) Senior Vice President, Worldwide Franchise Management and (iii) Vice President, Alliance Management. The representatives of Sanofi shall be the persons serving from time to time as (i) President and Executive Director, Sanofi Pharma, (ii) Senior Vice President, Strategy, Sanofi Pharma and (iii) Vice President, Alliance Management, Sanofi Pharma. If any such position has been modified or eliminated, the Party so affected shall appoint an individual whose position is substantially similar to the position so modified or eliminated. The Alliance Strategic Committee shall have the sole power, by a consensus of the representatives of Sanofi and BMS, to make any and all Alliance Strategic Decisions and to resolve any deadlock or conflict arising among or within the Alliance Functional Committees that has not been resolved by Alliance Management.
(b) Each of the Manufacturing and Sourcing Committee and the Finance Committee shall at all times consist of any equal number of representatives of BMS and Sanofi. All representatives of each Alliance Functional Committee shall be senior management personnel of Sanofi, BMS or their respective Affiliates. All recommendations and decisions made by each Alliance Functional Committee shall be made by a consensus of the representatives of Sanofi and BMS thereon. Each Alliance Functional Committee shall be authorized only to make recommendations to the Alliance Strategic Committee unless, and only to the extent that, it shall have received a specific written delegation of greater authority from the Alliance Strategic Committee pursuant to Section 3.10 hereof; provided, however, that each Alliance Functional Committee shall have the authority, by a consensus of the representatives of Sanofi and BMS thereon, to make decisions on issues within such Alliance Functional Committee’s specific scope of responsibilities as set forth in Sections 3.03 and 3.04 hereof, respectively.
SECTION 3.06. Deadlock Resolution. (a) Each Alliance Functional Committee and each License Functional Committee shall inform Alliance Management of any disagreements existing within such Functional Committee and/or with any other Functional Committee within 10 business days of such disagreement and Alliance Management shall attempt to resolve any such disagreement by consensus. If Alliance Management is unable to resolve any such disagreement by consensus within 15 business days after being informed of such disagreement, Alliance Management shall submit the matter(s) in dispute to the Alliance Strategic Committee or the License Steering Committee, as the case may be.
(b) If (i) the Alliance Strategic Committee is unable to agree on any Alliance Strategic Decision, (ii) the License Steering Committee is unable to agree on any License Strategic Decision, (iii) the Alliance Strategic Committee is unable to resolve any disagreement arising within any Alliance Functional Committee or among the Alliance
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Functional Committees or (iv) the License Steering Committee is unable to resolve any disagreement arising within any License Functional Committee or among the License Functional Committees, as evidenced, in each case, by the relevant committee’s failure to agree unanimously following two consecutive attempts at consensus, with the second attempt following the first by not less than 10 business days (in any such case, an “ Unsatisfactory Final Outcome ”), then such committee may agree unanimously to submit such Unsatisfactory Final Outcome to non-binding arbitration on such terms as it may unanimously agree, or either Sanofi or BMS may terminate its participation in the commercialization of the Product to which the Unsatisfactory Final Outcome relates in accordance with Article VII hereof:
(i) in the country(ies) affected by such Unsatisfactory Final Outcome pursuant to Section 7.02(i) hereof;
(ii) throughout Territory B, (x) in the case of an Unsatisfactory Final Outcome concerning Irbesartan, if the Unsatisfactory Final Outcome affects the commercialization of Irbesartan Products in two Major B Countries pursuant to Section 7.04(i) hereof and (y) in the case of an Unsatisfactory Final Outcome concerning Clopidogrel, if the Unsatisfactory Final Outcome affects the commercialization of Clopidogrel Products in the United States of America pursuant to Section 7.04(ii) hereof;
provided, however, that any such termination may also be elected by either Party following the outcome of any such non-binding arbitration.
(c) Notwithstanding anything to the contrary contained in this Article III, no Unsatisfactory Final Outcome shall be deemed to have occurred as a result of the failure by the representatives on the Alliance Strategic Committee, the License Steering Committee, any Alliance Functional Committee or any License Functional Committee to agree on (i) [*] unless the actions required by [*] are no longer permitted as a result of [*] and such change is [*] or (ii) any other matter [*], unless it would [*], in accordance with the terms of this Agreement and the Alliance Agreements, without [*] with respect to such matter. In the event of the failure by the representatives on such committee to reach agreement on any such modification or any such matter, such committee’s [*] shall not be [*] or [*] with respect to such matter, as the case may be, and the [*] in accordance with the framework established by such committee’s [*] until such agreement shall have been reached, to the extent permitted by applicable law.
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SECTION 3.07. Alliance Management . The Alliance Strategic Committee shall be assisted in its management of this Agreement and the Alliance Agreements by an alliance management (the “Alliance Management”), which shall be responsible for (i) coordinating and managing processes and interfaces to ensure that integrated business systems are in place and fully functional for the commercialization of the Products, (ii) informing the Alliance Strategic Committee of milestones, recommendations and decisions made by the Alliance Functional Committees and the License Functional Committees, (iii) ensuring appropriate liaison among the Alliance Strategic Committee, the Alliance Functional Committees, the License Steering Committee, the License Functional Committees, the Territory Management Committee and, to the extent necessary, with each of their respective counterparts in Territory A, (iv) being the formal point of first recourse for reaching a consensual solution for any disagreement arising among or within any Alliance Functional Committee or any License Functional Committee and (v) ensuring that minutes of each meeting of each Alliance Functional Committee, each License Functional Committee and the Territory Management Committee are finalized and circulated to all appropriate Persons and committees in a timely manner. The Alliance Management shall not be a separate committee, but shall consist of an equal number of representatives of each of BMS and Sanofi. The initial membership of Alliance Management shall consist of the two persons serving from time to time as Vice President, Alliance Management for each of BMS and Sanofi Pharma. Such positions shall not be eliminated prior to the termination of this Agreement.
SECTION 3.08. Cross-Territory Issues. (a) The Alliance Strategic Committee, the License Steering Committee, any Alliance Functional Committee or any License Functional Committee may agree with its counterpart committee in Territory A that certain studies, programs or plans will benefit the sale of the Products in Territory A as well as Territory B. In such case, such committee shall negotiate in good faith with its counterpart committee in Territory A to allocate any expenses related to such studies, programs or plans between the two Territories, with the expectation that, unless otherwise agreed, such expenses shall be split evenly between the two Territories.
(b) To the extent feasible, matters within the scope of responsibilities of the Manufacturing and Sourcing Committee relating solely to Territory B shall be the sole responsibility of the Manufacturing and Sourcing Committee; provided, however, that manufacturing and sourcing issues also having an impact on the supply of the Products in Territory A, the commercialization of Irbesartan Products in the United States of America or the supply of active substance chemical bulk containing Irbesartan shall be coordinated with the manufacturing and sourcing committee for Territory A.
(c) Each of Sanofi and BMS shall, or shall cause their respective Affiliates to, supply approximately [*], in the aggregate, of the active substance chemical bulk for Irbesartan required by the Parties and their Affiliates for the manufacturing of Irbesartan
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Products in Territory A, Territory B and the United States of America; provided, however, that [*] shall be the [*] supplier of such bulk in Territory B and the United States of America and the [*] supplier of such bulk in Territory A: provided, further, that [*] shall be the [*] supplier of such bulk in Territory A and the [*] supplier of such bulk in Territory B and the United States of America.
SECTION 3.09. Implementation of Decisions . Each of BMS and Sanofi shall, and shall cause their respective Affiliates (including, without limitation, the Territory B Partnership) to, implement and ensure that their actions are consistent with the decisions of the Alliance Strategic Committee, the License Steering Committee, each Alliance Functional Committee and each License Functional Committee and, furthermore, not to dissolve the Territory B Partnership other than in accordance with the terms and conditions of the territory B Partnership Agreement.
SECTION 3.10. Delegation . The Alliance Strategic Committee may, by a consensus of the representatives of Sanofi and BMS thereon, expressly and by written resolution establish any other functional committee and delegate its powers to such functional committee and/or to any then existing Alliance Functional Committee on such terms as it deems appropriate.
ARTICLE IV
BUDGETARY PROCESS
SECTION 4.01. Budgetary Development. (a) BMS shall prepare and submit, or cause to be prepared and submitted, to the Alliance Strategic Committee, (x) the aggregate of the annual budgets for the upcoming calendar year for sales and pre-tax profits (the “ Annual Budgetary Targets ”) for each Product for the Marketing Entities in countries in Territory B that were established for the Co-Promotion of one or both Products (each, a “Co-Promotion Entity”) and projections for aggregate sales and aggregate pre-tax profits of the Co-Promotion Entities for the subsequent three calendar years (the “Long-Range Plans”) for each Product, which budgetary targets and projections shall be substantially in the form of Schedules 4.01(a)-l and 4.01(a)-2 attached hereto, and (y) the annual budget for the Territory B Partnership (the “Territory B Budget”). The Finance Committee shall prepare such budget, budgetary targets and projections; provided, however, that BMS shall have final authority to determine the budget, budgetary targets and projections to be submitted to the Alliance Strategic Committee. Pre-tax profits shall be calculated by [*] for each Product, and sales shall be calculated by [*] for each Product, each in accordance with the methodology to be established by [*].
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(b) The Alliance Strategic Committee may require BMS to submit any financial information reasonably necessary for determining whether to approve the Territory B Budget, any Annual Budgetary Target or any Long-Range Plan for any Product.
SECTION 4.02. Budgetary Deadlocks . The Alliance Strategic Committee shall consider and unanimously approve, by December 15 of each calendar year, the Annual Budgetary Targets for each Product, the Long-Range Plans for each Product and the Territory B Budget. In accordance with Section 3.06 hereof, if the Alliance Strategic Committee cannot reach agreement with respect to any Annual Budgetary Target, Long-Range Plan or the Territory B Budget submitted by BMS, the Annual Budgetary Targets and the Territory B Budget for the current calendar year shall carry over to the next calendar year, and the Long-Range Plans shall remain unchanged, until the Annual Budgetary Targets, the Territory B Budget and the Long-Range Plans for the current calendar year shall have been approved.
SECTION 4.03. Out-of-Budget Situations . During April, July and October of each calendar year, BMS shall submit to the Alliance Strategic Committee a statement providing revised annual projections of aggregate sales and pre-tax profits for the Co-Promotion Entities for each Product for such calendar year (which shall be calculated in the same manner as, and compared to, the Annual Budgetary Targets for such calendar year approved by the Alliance Strategic Committee) revised, if necessary, to take into account the actual year-to-date results and any other relevant factors, together with an explanation of any material revisions in the projections relative to the budgeted amounts thereof approved by the Alliance Strategic Committee (the “ Revised Projection ”). To the extent that a Revised Projection show’s (or BMS advises Sanofi) that the annual aggregate pre-tax profits of the Co-Promotion Entities in Territory B for any Product will fall short of the annual aggregate pre-tax profit amount in the relevant Annual Budgetary Target for such Product approved by the Alliance Strategic Committee by [*] of such Annual Budgetary Target, Sanofi may, within 30 days of receipt of such Revised Projection or such notice, require BMS to secure the Alliance Strategic Committee’s approval of either (i) [*]; or (ii) [*].
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Termination of Master Territory B Agreement . This Agreement and the Alliance Agreements cancel and supersede the Master Territory B Agreement, which shall terminate with effect as of the date upon which this Agreement shall have been executed.
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SECTION 5.02. Non-Competition. During the period from and after the date hereof until [*], each Party shall not, and shall cause its Affiliates not to, directly or indirectly, [*].
SECTION 5.03. Confidentiality. (a) During the period from and after the date hereof until the [*] of the expiration or early termination of this Agreement, each of the Parties shall, and shall cause their respective Affiliates and its and their officers, employees and advisors to, keep confidential all information acquired from the other Party or its Affiliates, in connection with this Agreement or the Alliance Agreements and the transactions contemplated hereby and thereby, including the contents of this Agreement and the Alliance Agreements, other than any information that (i) is or hereafter becomes generally available to the public other than by reason of any default with respect to a confidentiality obligation; (ii) was already known to the recipient as evidenced by prior written documents in its possession; or (iii) is disclosed to the recipient by a Third Party who is not in default of any confidentiality obligation to the disclosing Party (such information being “ Confidential Information ”).
(b) The provisions of Section 5.03(a) hereof shall not apply to Confidential Information that (i) is submitted by the recipient to Governmental Authorities to facilitate the issuance of marketing approvals for a Product, provided, however, that reasonable measures shall have been taken to ensure confidential treatment of such information, (ii) is provided by the recipient to Third Parties under appropriate terms and conditions, including confidentiality provisions equivalent to those in this Agreement, for consulting, manufacturing development, manufacturing, external testing and marketing trials, or (iii) is otherwise required to be disclosed in compliance with applicable laws or regulations or order by a court or other regulatory body having competent jurisdiction.
(c) Each Parry shall, and shall cause its Affiliates and its and their officers, employees and advisors to, use any Confidential Information obtained by it from the other Party or its Affiliates in connection with this Agreement and the Alliance Agreements, solely in connection with the commercialization of the Products and the transactions contemplated hereby and thereby.
(d) Except as required by applicable law, neither of the Parties shall issue a press release or make a public announcement that has, as its major focus, any aspect of the commercialization of the Products, without the prior written approval of the other Party, which approval shall not be unreasonably withheld.
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SECTION 5.04. Insurance . Each of the Parties shall maintain, or shall cause to be maintained with respect to itself and each of its Affiliates that is a party to any of the Alliance Agreements, such types and levels of insurance (including, without limitation, general and product liability and environmental liability insurance), which may include self-insurance, as are customary in the pharmaceutical industry to provide coverage for the activities contemplated hereby and thereby. Each Party shall keep the other Party informed of the general parameters of its liability insurance program and any proposed substantive change therein.
SECTION 5.05. Further Assurances . (a) Each Party agrees to, and to cause its Affiliates to, execute, acknowledge, deliver, file, record and publish such further certificates, amendments to certificates, instruments and documents, and do all such other acts and things as may be required by law, or as may be required to carry out the intent and purposes of this Agreement and the Alliance Agreements.
(b) No later than September 30, 1997, BMS shall, and shall cause its Affiliates to, assign to Sanofi all of their rights, title and interests in and to any patent and patent application related to Irbesartan, Clopidogrel or the Products, existing as of June 6, 1997, and shall take all reasonable actions to ensure the filing of such assignment as soon as practicable thereafter.
SECTION 5.06. Adverse Event Reporting . (a) BMS and Sanofi shall each ensure that, in the marketing of the Products in Territory B, it and each of its respective Affiliates shall record, investigate, summarize and review all Adverse Events and Serious Adverse Events. Each Party shall require that its Affiliates, sub-licensees and distributors adhere to all requirements of local law which relate to the reporting and investigation of Adverse Events and Serious Adverse Events, and each Party shall require that its Affiliates, sub-licensees and distributors keep such Parry informed of such experiences.
(b) In order that each Party may be fully informed of these experiences, each Party shall report:
| (i) | In the case of Clopidogrel Products, to Sanofi, at: |
Sanofi Pharma
82, avenue Raspail
94255 Gentilly Cedex, France
Attention: [omitted]
Facsimile: [omitted]
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| (ii) | In the case of Irbesartan Products, to BMS, at: |
Bristol-Myers Squibb Company
P.O. Box 4000
Route 206 & Province Line Road
Princeton, NJ 08543 USA
Attention: Vice President, Worldwide Safety and Surveillance
Facsimile: [omitted]
all Adverse Events and Serious Adverse Events anywhere in the world; provided, however, that Serious Adverse Events shall be reported to the relevant Person within three (3) working days of a Party’s becoming aware of such an event (a “ Reporting Party ”) and shall be reported by facsimile as provided above. The Reporting Party shall report all other Adverse Events on a monthly basis. The Parties shall agree on an Adverse Event reporting form that may be used by the Reporting Party as a basis for such reports. Each Party shall promptly notify the relevant Person of any complaint received by such Party or any of its Affiliates in sufficient detail and in sufficient time to allow the relevant Person to comply with any and all regulatory requirements imposed upon it in any country. Each Party shall also advise the relevant Person of any regulatory developments (e.g., proposed recalls, labeling and other registrational dossier changes, etc.) affecting either Product in any country in Territory B. Each Party shall have the right to review and/or request copies of any and all information and reporting forms generated or received by the relevant Person set forth above.
(c) These procedures may be modified from time to time by the Regulatory Committee (as such term is defined in the Know-How License Agreement). In the event that the definitions of “ adverse event ” and/or “ serious adverse event ” are modified in the United States of America and the European Union, in accordance with the harmonization standards of the World Health Organization or otherwise, the Parties shall, and shall cause their respective Affiliates to, modify such definition(s) accordingly in this Agreement and each Alliance Agreement.
(d) BMS shall be responsible for making all determinations as to how Adverse Events and Serious Adverse Events concerning Irbesartan Products will be reported to the appropriate Governmental Authorities and, absent manifest error, the reporting by Sanofi and its Affiliates to such Governmental Authorities shall conform to such determinations. Sanofi shall be responsible for making all determinations as to how Adverse Events and Serious Adverse Events concerning Clopidogrel Products will be reported to the appropriate Governmental Authorities and, absent manifest error, the reporting by BMS and its Affiliates to such Governmental Authorities shall conform to such determinations.
(e) During the term of this Agreement, BMS and Sanofi shall, and shall cause their respective Affiliates to, disclose to the other Party any material fact or
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information concerning the efficacy or safety of any Product or any process for manufacturing, processing or finishing such Product and shall not omit to disclose to the other Party any material fact or information concerning the efficacy or safety of any such process or Product.
SECTION 5.07. Registration: Labeling . (a) The marketing registration for each Product shall be made in the name of Sanofi (or its designees) in each country in Territory B where such registration is required by applicable law, except (i) in those countries where there will be Co-Marketing of the Products as determined by the Alliance Strategic Committee, in which case, if required by applicable law or regulation in such country, one registration shall be made in the name of a Sanofi Affiliate and the other in the name of a BMS Affiliate, (ii) such registration would preclude product labeling pursuant to Section 5.07(b) hereof, or (iii) such registration would be incompatible with the allocation of regulatory reporting and compliance responsibilities between the Parties as determined by the Regulatory Committee.
(b) The Parties shall ensure that the label for each Product bears the name of (i) a Co-Promotion Entity, (ii) both Parties or (iii) the Party(ies) whose sales force is used in connection with the commercialization of such Product pursuant to the marketing plan reviewed by the Territory Management Committee; provided, however, that in the event only one Party’s name can appear on a label, the name of the Marketing Entity for the Product shall be used. Notwithstanding the above, all Product labels that otherwise do not refer to “Sanofi” shall contain the words “Sanofi patent” or other words to the same effect. In any country in Territory B where there is Co-Promotion of a Product, the trademark shall be the trademark most often used by Sanofi for that Product in all of Territory B; provided, however, that the Parties shall, or shall cause their Affiliates to, use the trademarks listed on Schedule 5.07(b) attached hereto in the commercialization of the Products in Territory B.
SECTION 5.08. Selling Efforts . (a) Subject to sub-clause (b) below, the Parties shall, or shall cause their respective Affiliates to, transfer to each Co-Promotion Entity, directly or indirectly, or shall otherwise cause to be made available to each Co-Promotion Entity, through appropriate contractual arrangements, the resources necessary for the marketing, promotion, sale and distribution of the Products by such Co-Promotion Entity.
(b) For each country in Territory B where there is Co-Promotion of a Product, the local Affiliates of the Parties shall propose, and the Territory Management Committee shall determine, the amount of selling efforts and the allocation thereof that each such local Affiliate will be required to provide in connection with the commercialization of such Product; provided, however, that such determination shall be subject to the right of each such local Affiliate to elect not to make part or all of its selling resources available for one or both Products in such country. Such determination shall be reviewed, and if necessary revised, on an annual basis to take into account the evolution of such local Affiliates’
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respective selling resources. In each country, the allocation and amount of proposed selling efforts shall be determined on the basis of the following criteria, in the following order of priority:
(i) primary consideration shall be given to devising a selling force and strategy that will be the most effective from a commercial and economic perspective;
(ii) each local Affiliate shall be entitled to provide selling efforts on a [*] basis; it being understood that any such local Affiliate may elect not to make [*] of its selling resources available for one or both Products; and
(iii) in any country where the relevant selling resources of such local Affiliates do not allow a [*] of selling efforts, the proposed resources of such local Affiliate with [*] resources in such country shall be used to the [*], but only up to [*] of such resources that are made available by such local Affiliate for such Product.
(c) For each country in Territory B where there is Co-Promotion of a Product, the Finance Committee shall determine the calculation methodology for allocating Selling Effort Remuneration between the Parties’ local Affiliates in proportion to the actual selling efforts of such local Affiliates in each calendar year and shall set forth such methodology in a marketing and operating services agreement among the Co-Promotion Entity for such country and such local Affiliates; provided, however, that [*] of Selling Effort Remuneration shall be [*] to any such local Affiliate for that portion of the selling efforts undertaken by such local Affiliate in excess of [*] for such local Affiliate; provided, further, that such methodology shall include a [*] formula set forth in Schedule 5.08(c) attached hereto to [*] in the allocation of Selling Effort Remuneration between such local Affiliates and to take into account [*]; provided, further, that upon Loss of Exclusivity of a Product in any country in Territory B, the Selling Effort Remuneration attributable to such country which had been payable to each such local Affiliate shall be [*] by [*] and shall thereafter be further [*] on the basis of [*]:
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[*]
ARTICLE VI
INDEMNIFICATION
SECTION 6.01. General Indemnification. Each Party shall indemnify and hold harmless the other Party and its Affiliates against any Damages (whether or not incurred in connection with a Third Party Claim) arising out of or resulting from (i) any inaccuracy of any representation or any breach of any warranty of such Party contained in Article II hereof or (ii) the failure by such Party or its Affiliates to comply in any material respect with any of the covenants or agreements of this Agreement, the Development Agreement or any of the Alliance Agreements. The indemnity in this Section 6.01 shall be the exclusive remedy for any matter referred to in clause (i) above.
SECTION 6.02. Special Indemnities. (a) From and after July 29, 1993, subject to Section 6.02(b) hereof, each Party (the “ First Party” ) shall indemnify and hold harmless the other Party or any of its Affiliates for [*] of any Damages incurred by such other Party or its Affiliates to any Third Party in any country in Territory B in connection with (i) the preparation of the commercialization of a Product, (ii) the manufacture of the active substance chemical bulk used in the Products, (iii) the manufacture of the Products ( i.e. , the transformation of the active substance chemical bulk into finished, packaged and labeled Products), (iv) the marketing, promotion, sale and distribution of the Products or (v) any other activity undertaken by such other Party or its Affiliates in connection with the transactions contemplated by this Agreement (collectively, the “ Covered Activities” ), but, in each case, only to the extent relating to the Products; provided, however, that the indemnification provisions of this Section 6.02(a) shall not apply to Damages arising out of, or resulting from, (x) [*] in which [*] or (y) any claim relating to [*] in any given country based on facts arising during the period in which [*].
(b) No indemnity shall be due or payable pursuant to Section 6.02(a) hereof to the extent that the Damages for which an indemnity is sought are attributable to (i) the negligence, bad faith, or willful misconduct of the Party seeking the indemnity (or of
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any of its Affiliates (which, solely for the purposes of this Section 6.02(b)(i), shall not include the proviso in the first sentence of the definition of “Affiliate”), (ii) the failure by such Party (or any of its Affiliates) to comply with the terms of this Agreement or any of the Alliance Agreements or any other agreement entered into pursuant hereto or thereto or (iii) any inaccuracy of any representation or any breach of any warranty made by such Party in Article II hereof.
(c) From and after July 29, 1993, the First Party shall indemnify and hold harmless the other Party or any of its Affiliates for all Damages incurred by such other Party or its Affiliates in any country in Territory B to the extent such Damages are attributable to (i) the business and operations of the First Party and its Affiliates that are not related to, or used in connection with, the Covered Activities, (ii) acts or omissions of the First Party and its Affiliates occurring prior to July 29, 1993 or (iii) a condition of the business and operations of the First Party or its Affiliates existing prior to July 29, 1993.
SECTION 6.03. Indemnification Procedures. All claims for indemnification under this Agreement shall be asserted and resolved as follows:
(a) A Party or an Affiliate of a Party claiming indemnification under this Agreement (the “ Indemnified Party ”) shall promptly notify the Party from whom indemnification is sought (the “ Indemnifying Party ”) of any claim by a Third Party or claims asserted against the Indemnified Party that could give rise to a right of indemnification under this Agreement (a “ Third Party Claim ”). The Indemnifying Party shall have the right to defend, at its sole cost and expense, such Third Party Claim, on its own behalf and on behalf of the Indemnified Party, by all appropriate proceedings, which proceedings shall be prosecuted diligently by the Indemnifying Party to a final conclusion or settled at the discretion of the Indemnifying Party; provided, however, that the Indemnifying Party may not enter into any compromise or settlement that involves equitable relief against the Indemnified Party unless the Indemnified Party consents thereto, which consent shall not be unreasonably withheld. If requested by the Indemnifying Party, the Indemnified Party shall agree, at the sole cost and expense of the Indemnifying Party (excluding the internal costs and expenses of the Indemnified Party), to cooperate with the Indemnifying Party and its counsel in contesting any Third Party Claim that the Indemnifying Party elects to contest, including, without limitation, the making of any related counterclaim against the Person asserting the Third Party Claim or any cross-complaint against such Person.
(b) Notwithstanding the Indemnifying Party’s election to assume the defense of any Third Party Claim, the Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such Third Party Claim, and shall bear the costs and expenses of such separate counsel, if (i) the use of counsel chosen by the Indemnifying Party to represent both the Indemnifying Party
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and the Indemnified Party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such Third Party claim include both the Indemnifying Party and the Indemnified Party, and the Indemnified Party shall have reasonably concluded that there may be a legal defense available to it which is different from or additional to the defenses available to the Indemnifying Party (in which case the Indemnifying Party shall not have the right to assume the defense of such Third Party Claim on behalf of the Indemnified Party), (iii) the Indemnifying Party shall not have employed counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of the institution of such Third Party Claim or (iv) the Indemnifying Party authorizes the Indemnified Party to employ separate counsel at its own cost and expense.
(c) If the Indemnifying Party fails to notify the Indemnified Party within 30 days after receipt of notice in accordance with Section 6.03(a) hereof that the Indemnifying Party elects to defend the Indemnified Party pursuant to this Section 6.03, or if the indemnifying Party elects to defend the Indemnified Party pursuant to this Section 6.03 but fails to defend or settle the Third Party Claim diligently and promptly, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be promptly and vigorously defended by the Indemnified Party to a final conclusion or settled at the discretion of the Indemnified Party.
(d) In the event that any Indemnified Party shall have a claim against any Indemnifying Party under Section 6.01 or 6.02(c) that does not involve a Third Party Claim or knowledge of facts which could give rise to such a claim, the Indemnified Party shall provide the Indemnifying Party with a written notice (the “ Indemnity Notice ”) describing in reasonable detail the nature of the claim, an estimate, if reasonably practicable, of the amount of Damages attributable to such claim and the basis of the Indemnified Party’s request for indemnification under this Agreement. If the Indemnifying Party does not contest the Indemnity Notice within 60 days from its receipt, then the claim specified in the Indemnity Notice shall be deemed a liability of the Indemnifying Party; provided, however, that if the Indemnifying Party contests such claim within 60 days of its receipt, such dispute shall be resolved by arbitration in accordance with Section 8.04 hereof.
(e) Notwithstanding anything to the contrary in this Article VI, no claim may be asserted or any action commenced against either Party for the inaccuracy of any representation or warranty or the breach of any covenant or agreement contained herein, unless written notice of such claim or action is received by the Indemnifying Parry describing in reasonable detail the facts and circumstances with respect to the
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subject matter of such claim or action on or prior to the second anniversary of the expiration or early termination of this Agreement.
ARTICLE VII
TERM AND TERMINATION
SECTION 7.01. Term: Expiration. (a) The term of this Agreement, with respect to each Product, shall commence on the date hereof and shall expire on the later of (i) the 15th anniversary of the first commercial sale of such Product and (ii) such date as the last patent relating to such Product effective in any country in Territory B shall have expired and all other de jure exclusivity available for such Product shall have ended. Thereafter, the term of this Agreement may be renewed with respect to such Product for successive three-year terms, by the mutual agreement of the Parties, no later than 24 months prior to the expiration of the term then in effect.
(b) Notwithstanding anything to the contrary contained herein, this Agreement shall automatically terminate upon the earliest of (i) termination of the commercialization of both Products throughout Territory B pursuant to Section 7.06 hereof, (ii) termination of the commercialization of both Products throughout Territory B as the result of a Safety Problem affecting both Products, (iii) the mutual written consent of the Parties or (iv) the purchase and sale of the rights and interests specified in the special put option pursuant to Section 7.08 hereof.
(c) Expiration or early termination of this Agreement pursuant to this Article VII shall be without prejudice to any rights which shall have accrued to the benefit of any Party prior to such expiration or early termination. Such expiration or early termination shall not relieve any Party from its obligations which are expressly indicated to survive the expiration or early termination of this Agreement. All of the Parties’ rights and obligations under this Article VII and under Sections 5.02, 5.03, 5.06, 6.01, 6.02, 6.03, 8.02, 8.03, 8.04 and 8.12 shall survive such expiration or early termination for the applicable period, if any.
SECTION 7.02. Right of Country Termination. Either Party may cause the termination of the commercialization of any Product(s) in any country(ies) in Territory B, by Notice to the other Party, in the event of:
(i) the occurrence of an Unsatisfactory Final Outcome affecting such country(ies), in accordance with Section 3.06 hereof;
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(ii) the adjustment of the Discovery Royalty pursuant to the Clopidogrel License and Supply Agreement and the Irbesartan License Agreement, as the case may be; provided, however, that the sum of the Discovery Royalty and the Cost of Bulk and/or the Supply Payment (as such terms are defined therein and in the Irbesartan Supply Agreement) for such Product in such country(ies) (computed over [*] and expressed as a percentage of [*]) represents, in the case of Clopidogrel Products, [*] of Net Sales thereof in such country(ies) or, in the case of Irbesartan Products, [*] of Net Sales thereof in such country(ies), in each case computed over such [*].
SECTION 7.03. Consequences of Country Termination. In the event that one Party (the “ Country Terminating Party ”) exercises its right to terminate the commercialization of any Product(s) in any country(ies) pursuant to Section 7.02 hereof, the other Party (the “Country Non-Terminating Party”) may, by Notice to the Country Terminating Party, elect:
(i) also to terminate its participation in the commercialization of such Product(s) in such country(ies), in which event:
(A) the Parties shall, and shall cause their respective Affiliates to, amend and restate this Agreement and each Alliance Agreement to terminate (1) the commercialization of such Product(s) in such country(ies) and the grant of rights with respect thereto and (2) all arrangements for such Product(s) existing between and among the Territory B Partnership, the Marketing Entity(ies) in such country(ies) and the local Affiliate(s) of BMS and Sanofi in such country(ies) (including, without limitation, all distribution arrangements);
(B) the Parties shall, and shall cause their respective Affiliates to, sell, license or otherwise dispose of to the highest offeror (which could include either Party): (1) all intellectual property rights owned by or licensed to the Territory B Partnership (with a right to sub-license to its Affiliates and, with the Parties’ prior consent (which shall not be unreasonably withheld), to Third Parties) to make, have made, use and sell such Product(s) in such country(ies) for the duration of all relevant patents for such Product(s) in such country(ies), and (2) a right to a sufficient supply of active substance chemical bulk or finished goods for such Product(s) for such country(ies) from Sanofi, BMS, their respective Affiliates or Third Parties [*], each on terms and conditions to be determined by [*] and/or [*]; and
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(C) the proceeds, if any, of such sale, license or other disposition shall be distributed to the Parties in accordance with [*] with the amounts pertaining only to [*] being considered.
(ii) to proceed alone with the commercialization of such Product(s) in such country(ies), in which event:
(A) the Parties shall, and shall cause their Affiliates to amend and restate this Agreement and each Alliance Agreement to terminate (1) the commercialization of such Product(s) in such country(ies) and the grant of rights with respect thereto and (2) all arrangements for such Product(s) existing between and among the Territory B Partnership, the Marketing Entity(ies) in such country(ies) and the local Affiliate(s) of BMS and Sanofi in such country(ies) (including, without limitation, all distribution arrangements);
(B) the Parties shall, and shall cause their respective Affiliates to, grant the Country Non-Terminating Party an exclusive license under all intellectual property rights owned by or licensed to the Territory B Partnership (with a right to sub-license to its Affiliates and, with the Country Terminating Party’s prior consent (which consent shall not be unreasonably withheld), to Third Parties) to make, have made, use and sell the Product(s) in such country(ies) for the duration of all relevant patents in such country(ies), as well as provide the Country Non-Terminating Party with the right to a sufficient supply of active substance chemical bulk or finished goods for such Product(s) for such country(ies) from Sanofi, BMS, their respective Affiliates or Third Parties on economic terms substantially similar to those then applicable to the Marketing Entity(ies) for such country(ies), each on terms and conditions to be determined by the Finance Committee and/or the Manufacturing and Sourcing Committee;
(C) the Country Non-Terminating Party shall pay directly to the Country Terminating Party [*] of such Product(s) in such country(ies); provided, however, that (i) no [*] shall be payable during the [*] immediately following the launch of such Product(s) in such country(ies), (ii) [*] shall be reduced by [*] , following the Loss of Exclusivity of such Product(s) in such country(ies) pursuant to the Irbesartan License Agreement or the Clopidogrel License and Supply Agreement, as the case may be, and (iii) [*] shall be in lieu of [*] other amounts otherwise payable to the Country Non-Terminating Party or its Affiliates with respect to such Product(s) in such country(ies) pursuant to this Agreement or
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any Alliance Agreement; provided, however, that, if [*] or any of its successors or assigns is the Country Terminating Party, [*] shall pay to [*] (or any such successor or assign) [*] for such Product(s) in such country(ies) (as such term is defined in the Irbesartan License Agreement or the Clopidogrel License and Supply Agreement, as the case may be); and
(D) the Country Non-Terminating Party shall also pay to the applicable supplier of active substance chemical bulk of finished goods for such Product(s) an amount to be determined by [*] and [*] in accordance with this Section 7.03(ii).
SECTION 7.04. Right of Product Termination Throughout Territory B . Either Party may cause the termination of the commercialization of any Product throughout Territory B, by Notice to the other Party, in the event of:
(i) with respect to Irbesartan, the occurrence of an Unsatisfactory Final Outcome that affects the commercialization of Irbesartan Products in two Major B Countries;
(ii) with respect to Clopidogrel, the occurrence of an Unsatisfactory Final Outcome that affects the commercialization of Clopidogrel Products in the United States of America; or
(iii) a determination by either Party that the commercialization of such Product should be suspended for safety reasons that it believes in good faith, justify such suspension (a “ Safety Problem ”), subject to Section 7.05(b) hereof.
SECTION 7.05. Consequences of Product Termination Throughout Territory B . (a) In the event of termination of the commercialization of any Product throughout Territory B as a result of an Unsatisfactory Final Outcome with respect to such Product:
(i) the Parties shall, and shall cause their Affiliates to, amend and restate this Agreement and each Alliance Agreement to terminate the commercialization of such Product in Territory B, including all decision-making by the Alliance Strategic Committee, the License Steering Committee, the Alliance Functional Committees and the License Functional Committees with respect to such Product;
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(ii) the Parties shall, and shall cause their respective Affiliates to, terminate all arrangements for such Product existing between and among the Territory B Partnership, the Marketing Entities in Territory B and the local Affiliates of BMS and Sanofi in Territory B (including, without limitation, all distribution arrangements);
(iii) the Parties shall, and shall cause their respective Affiliates to, sell, license or otherwise dispose of to the highest offeror (which could include either Party), on terms and conditions to be determined by the Finance Committee and/or the Manufacturing and Sourcing Committee (A) all intellectual property rights owned by or licensed to the Territory B Partnership (with a right to sub-license to its Affiliates and, with the Parties’ prior consent (which shall not be unreasonably withheld), to Third Parties) to make, have made, use and sell such Product in Territory B for the duration of all relevant patents for such Product in Territory B and (B) at the option of such offeror, an assignment of the rights and obligations for the supply of active substance chemical bulk under the Clopidogrel License and Supply Agreement or the Irbesartan Supply Agreement, as the case may be, which supply obligation shall continue for one year following such assignment;
(iv) in the event the highest offeror is any Person other than Sanofi or its Affiliates, the Know-How License Agreement, the Irbesartan License Agreement, the Irbesartan Supply Agreement and/or the Clopidogrel License and Supply Agreement, as the case may be, shall each be amended, on terms and conditions reasonably acceptable to Sanofi, to provide for those terms and conditions that are then customary in the pharmaceutical industry for such agreements, including, without limitation, provisions for confidentiality, indemnification and termination for material breach, as well as a diligence requirement that the offeror use reasonable commercial efforts to actively promote such Product (and the remedy for breach of such diligence requirement shall be termination of such amended and restated agreement);; and
(v) the proceeds of such sale, license or other disposition shall be distributed to the Parties in accordance with the formula set forth in Schedule 7.03 attached hereto with the amounts pertaining only to such Product in Territory B being considered.
(b) In the event that one Party (the “ Concerned Party ”) determines that the commercialization of any Product should be suspended because of a Safety Problem, if:
(i) the other Party also agrees that such Safety Problem justifies such termination, then the Parties (A) shall discontinue the commercialization of such
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Product by any means anywhere in the world and (B) shall, and shall cause their respective Affiliates to, amend and restate this Agreement and each Alliance Agreement to delete any reference to the manufacture, development or commercialization of such Product; it being understood that this sub-clause (i) also shall be available to such other Party after the non-binding determination of the Safety Expert pursuant to sub-clause (ii) below; or
(ii) the other Party (the “ Non-Concerned Party ”) does not agree that such Safety Problem exists with respect to such Product, the Parties shall promptly seek the non-binding advice of an independent expert mutually selected by the Parties (the “ Safety Expert ”) and if:
(A) the Safety Expert determines that such Safety Problem, if any, does not justify termination of the commercialization of such Product, then the Concerned Party shall be deemed to have elected to terminate its participation in the commercialization of such Product throughout Territory B and, if the Non-Concerned Party elects to continue its commercialization of such Product, (1) the Parties shall, and shall cause their respective Affiliates to, amend and restate this Agreement and each Alliance Agreement to delete any reference to the manufacture, development or commercialization of such Product and the grant of rights with respect thereto and to terminate the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement and/or the Irbesartan License Agreement, as the case may be, and shall grant the Non-Concerned Party an exclusive license under all intellectual property rights owned by or licensed to the Territory B Partnership (with a right to sub-license to its Affiliates and, with the Concerned Party’s prior written consent (which shall not be unreasonably withheld), to Third Parties) to make, have made, use and sell such Product in Territory B for the duration of all relevant patents for such Product in Territory B, (2) the Non-Concerned Party shall pay the Concerned Party [*] of such Product in Territory B; provided, however, that (a) no [*] shall be payable during the [*] immediately following the first commercial sale of such Product in Territory B, (b) [*] shall be reduced following the Loss of Exclusivity of such Product by [*] set forth in the Irbesartan License Agreement or the Clopidogrel License and Supply Agreement, as the case may be, (c) [*] shall be in lieu of [*] other amounts otherwise payable or attributable with respect to such Product in Territory B and (3) the Concerned Party shall pay [*]; provided, further, that, if [*] or any of its successors or assigns is the Concerned Party, [*] shall pay to [*] (or any such successor or assign) [*] (as such term is
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defined in the Irbesartan License Agreement or the Clopidogrel License and Supply Agreement, as the case may be) for such Product; or
(B) the Safety Expert determines that the Safety Problem justifies termination of the commercialization of such Product, then the Non-Concerned Party shall (1) have the option to also terminate its participation in the commercialization of such Product or (2) elect to proceed alone in which event the provisions of Section 7.05(b)(ii)(A) hereof shall apply.
SECTION 7.06. Right of Alliance Termination . Either Party may cause the termination of the commercialization of both Products throughout Territory B, by Notice to the other Party, in the event of:
(i) the other Party or any of its Affiliates that is a party or owns a direct or indirect majority interest in a party to any of this Agreement, the Territory B Partnership Agreement, the Irbesartan License Agreement, the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement or the Know-How License Agreement shall have (A) voluntarily commenced any proceeding or filed any petition seeking relief under Title 11 of the United Sates Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States of America, any state thereof or the French Republic or any other applicable jurisdiction, (B) applied for or consented to the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (C) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (D) made a general assignment for the benefit of creditors of all or substantially all of its assets, (E) become unable to generally, or admitted in writing its inability to, pay all or substantially all of its debts as they become due or (F) taken corporate action for the purpose of effecting any of the foregoing;
(ii) an involuntary proceeding shall have been commenced or any involuntary petition shall have been filed in a court of competent jurisdiction seeking (A) relief in respect of the other Party or any of its Affiliates that is a party or owns a direct or indirect majority interest in a party to any of this Agreement, the Territory B Partnership Agreement, the Irbesartan License Agreement, the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement or the Know-How License Agreement, or of their property under Title 11 of the United Sates Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States of America, any state thereof or the French Republic or any other applicable jurisdiction, (B) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator
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or similar official for such other Party or Affiliate or for all or substantially all of its property or (C) the winding-up or liquidation of such other Party or Affiliate; and such proceeding or petition shall have continued undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall have continued unstayed and in effect for thirty (30) days;
(iii) a material breach by a Party or any of its Affiliates (the “ Breaching Party ”) of any material obligation contained in this Agreement, the Territory B Partnership Agreement, the Irbesartan License Agreement, the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement and the Know-How License Agreement, taken as a whole; provided, however, that (A) the material breach has continued for 30 days from the date of receipt by the Breaching Party of a written notice of such breach and (B) the Breaching Party shall not have cured such breach to the reasonable satisfaction of the other Party or, where such breach cannot be cured during such 30-day period, shall not have taken prompt and diligent steps within such period to cure such breach as promptly as practicable; or
(iv) the occurrence of an Unsatisfactory Final Outcome affecting the commercialization of Irbesartan Products in two Major B Countries and the commercialization of Clopidogrel Products in the United States of America.
SECTION 7.07. Consequences of Alliance Termination. Upon the expiration of this Agreement pursuant to Section 7.01 hereof (other than in the event BMS exercises the special put option specified in Section 7.08 hereof or of a bilateral Safety Problem termination pursuant to Section 7.05(b) hereof) or the early termination hereof pursuant to Section 7.06 hereof:
(i) each Party shall be entitled to retain the intellectual property rights owned by it, including, without limitation, the right to receive all amounts payable to such Party under the Irbesartan License Agreement, the Clopidogrel License and Supply Agreement and the Know-How License Agreement, and such Party’s other assets used in the commercialization of the Products in Territory B, subject to the provisions of this Section 7.07;
(ii) the Parties shall, and shall cause their respective Affiliates to, terminate the Development Services Agreement, the Partnership Services Agreement, as well as all arrangements and agreements of the Marketing Entities with respect to the Products (including, without limitation, all distribution agreements between each Marketing Entity and the Territory B Partnership) and dissolve the Alliance Strategic Committee, the License Steering Committee, each Alliance Functional Committee and each License Functional Committee;
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(iii) the Parties shall cause to be sold, licensed or otherwise disposed to the highest offeror (which could include either Party) all of the partnership interests in the Territory B Partnership, which shall indirectly include, without limitation, the rights and obligations of the Territory B Partnership under the Clopidogrel License and Supply Agreement, the Irbesartan Supply Agreement, the Irbesartan License Agreement, the Know-How License Agreement, the Puerto Rico Purchase and Sale Agreement and the Toll Manufacturing Agreements, other than the rights to use the corporate names and trademarks containing the words “BMS”, “Bristol-Myers Squibb” or “Sanofi”; provided, however, that any obligation to supply active substance chemical bulk or finished Products set forth in any such agreement shall continue for one year following such sale, license or other disposition;
(iv) in the event the highest offeror is any Person other than Sanofi or its Affiliates, the Know-How License Agreement, the Irbesartan License Agreement, the Irbesartan Supply Agreement and the Clopidogrel License and Supply Agreement shall each be amended, on terms and conditions reasonably acceptable to Sanofi, to provide for those terms and conditions that are then customary in the pharmaceutical industry for such agreements, including, without limitation, provisions for confidentiality, indemnification and termination for material breach, as well as a diligence requirement that the offeror use reasonable commercial efforts to actively promote the Products (and the remedy for breach of such diligence requirement shall be termination of such amended and restated agreement);; and
(v) the proceeds of such sale shall be distributed to the Parties in accordance with the formula set forth in Schedule 7.03 attached hereto.
SECTION 7.08. Special Put Option. (a) In the event of the expiration of the term of this Agreement pursuant to Section 7.01 (a) hereof prior to December 31, 2020 following a request by BMS to extend the term of this Agreement that is not accepted by Sanofi, BMS shall have the right, exercisable by delivery of Notice to Sanofi, to require Sanofi to purchase from BMS and from the relevant Affiliates of BMS, all of the rights and interests of BMS and its Affiliates to Irbesartan, Clopidogrel, the Products and New Indications and Line Extensions thereof, including, without limitation, BMS’s and its Affiliates’ interests in the Territory B Partnership, the Development Agreement and the Co-Promotion Entities and BMS’s and its Affiliates’ intellectual property rights in Irbesartan, Clopidogrel, the Products and New Indications and Line Extensions thereof, for a price (the “Non-Renewal Valuation”) equal to [*]. In the event that the Parties fail to agree on [*] within 60 days of such notice of exercise:
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(i) each Party shall, within 15 days of the expiration of such 60-day period, submit to an investment banking firm not having any substantial relationship with either Party, and reasonably acceptable to each Party (an “ Independent Firm ”), a proposed [*], together with documentation supporting such [*] (each such submission, a “[*]”);
(ii) if the difference between the two [*] is [*], the [*] shall be [*];
(iii) in all other cases, the Independent Firm shall select, within 15 days of receipt of the [*] and supporting documentation, one of the [*] submitted to it as the [*] and shall not select any other number as the [*], and such [*] shall be the [*] used in determining the Non-Renewal Valuation and shall not be subject to contest; and
(iv) the fees and expenses of the Independent Firm shall be split equally between the Parties.
(b) On the date that has been mutually agreed to by the Parties, which shall be no later than sixty (60) days after the final determination of the [*] in accordance with this Section 7.08, (i) Sanofi shall pay an amount equal to the Non-Renewal Valuation by wire transfer, in immediately available funds, to the bank account of BMS notified to Sanofi at least two business days prior to the date of such purchase and sale, (ii) BMS shall deliver or assign, to Sanofi or its designated Affiliates, its and all of its Affiliates’ rights and interests in Irbesartan, Clopidogrel, the Products, New Indications and Line Extensions thereof, the Territory B Partnership and each Co-Promotion Entity, together with duly executed written instruments of transfer or assignment with respect thereto, in form and substance reasonably satisfactory to Sanofi, (iii) the Irbesartan Supply Agreement shall be amended and restated (x) to require BMS and its Affiliates to supply no more than such amount of active substance chemical bulk containing Irbesartan that was supplied by BMS and its Affiliates during the [*] immediately preceding such date and (y) to terminate automatically, and without further action by any party thereto, on the first anniversary of such date and (iv) this Agreement, the Development Agreement and each Alliance Agreement (other than the Irbesartan Supply Agreement) shall be deemed to be terminated with effect as of such date.
SECTION 7.09. Interim Termination Period . During the period between the occurrence of any termination event described in this Article VII and the implementation of the consequences of such termination event, the Parties shall, and shall cause their respective Affiliates to, continue to perform their obligations under this Agreement and each Alliance Agreement in the ordinary course of business consistent with prior practice.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Notices . All notices, requests, claims, demands and other communications hereunder (collectively, “ Notices ”) shall be in writing, shall be in the English language and shall be given or made by delivery in person, by courier service, by facsimile (with receipt confirmed) or by registered or certified mail (return receipt requested, with postage prepaid), to the respective Parties at the following addresses:
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| Attention: | Directeur Juridique Adjoint | |
| Facsimile: | [omitted] | |
| Attention: | Vice President, Alliance Management | |
| Facsimile: | [omitted] | |
| with a copy to: | ||
| Cleary, Gottlieb, Steen & Hamilton | ||
| 41, avenue de Friedland | ||
| 75008 Paris, France | ||
| Attention: | [omitted] | |
| Facsimile: | [omitted] | |
Any Party may designate another addressee (and/or change its address) for Notices hereunder by a Notice given pursuant to this Section 8.01. All Notices given to any Party in accordance with the provisions of this Section 8.01 shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile, or on the date ten business days after dispatch by certified or registered mail (postage prepaid) if mailed.
SECTION 8.02. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed and performed entirely in that state.
SECTION 8.03. Specific Performance. Each Party agrees that a failure by any Party to perform its obligations under this Agreement will result in irreparable damage, and that specific performance of such obligations may be obtained without the posting of any bond or other security; provided, however, that the powers of the arbitrators under this Section 8.03 shall be limited to enforcing the obligations provided for in this Agreement as drafted.
SECTION 8.04. Dispute Resolution. All disputes between the Parties arising in connection with this Agreement (other than those explicitly specified in Section 3.06, 7.05(b)(ii) or 7.08 hereof) shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with such Rules with the proceedings conducted in the English language in Paris, France. The president of any arbitral tribunal shall not be a citizen of either the United States of America or the French Republic.
SECTION 8.05. Headings. All titles or captions contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
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SECTION 8.06. No Third Party Beneficiaries. Except for the provisions of Article VI hereof relating to Indemnified Parties, this Agreement shall be binding upon, and inure solely to the benefit of, the Parties hereto and permitted assigns, and nothing herein, express or implied, is intended to, or shall, confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.
SECTION 8.07. Severability. If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any applicable law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either Party. Upon the determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
SECTION 8.08. Assignment . This Agreement, and any or all of the rights and obligations hereunder, may be assigned by a Party only to an Affiliate of BMS or Sanofi in the event of a corporate reorganization (including to an entity that becomes an Affiliate in connection with such reorganization) involving the assumption of all or substantially all of such Party’s marketing or manufacturing functions in Territory B by such Affiliate, in which event rights may be assigned and obligations may be delegated to such Affiliate.
SECTION 8.09. Consents. Any consent or approval to any act or matter required under this Agreement must be in writing and shall apply only with respect to the particular act or matter to which such consent or approval is given, and shall not relieve any Party from the obligation to obtain the consent or approval, as applicable, wherever required under this Agreement to any other act or matter.
SECTION 8.10. Entire Agreement . This Agreement, the Development Agreement and the Alliance Agreements constitute the entire agreement of the Parties with respect to the subject matter contained herein and all prior agreements relative thereto which are not contained herein are terminated.
SECTION 8.1l. Waivers and Amendments. No modification of or amendment to this Agreement shall be valid unless in a writing signed by both Parties referring specifically to this Agreement and stating the Parties’ intention to modify or amend the same. Any waiver of any term or condition of this Agreement shall be in a writing signed by the Party sought to be charged with such waiver referring specifically to the term or condition to be waived, and no such waiver shall be deemed to constitute the waiver of any other term or condition of this Agreement.
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SECTION 8.12. Expenses Each Party shall bear its own expenses in connection with the negotiation and execution of this Agreement and the Alliance Agreements.
SECTION 8.13. No Partnership or Joint Venture . This Agreement is not intended to create, and nothing contained herein shall be construed to create, an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on or with regard to the other Party. Each Party shall be severally responsible for its own covenants, obligations and liabilities as herein provided. No Party shall be under the control of, or shall be deemed to control any other Party. No Party is the legal representative, agent, joint venturer or employee of the other Party with respect to this Agreement for any purpose whatsoever, and no Party shall have the right or power to bind the other Party No Party has the right or authority to assume or create any obligations of any kind or to make any representation or warranty on behalf of any other Party, whether express or implied, or to bind any other Party in any respect whatsoever. The provisions of this Agreement are intended only for the regulation of relations between the Parties. This Agreement is not intended for the benefit of non-Party creditors, and no rights are granted to non-Party creditors under this Agreement.
SECTION 8.14. Counterparts . This Agreement may be executed in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which when taken together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the day and year first above written.
| BRISTOL-MYERS SQUIBB COMPANY | ||
| By: | /s/ [signature illegible] | |
| Name: | ||
| Title: | ||
| SANOFI | ||
| By: | /s/ [signature illegible] | |
| Name: | ||
| Title: | ||
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Schedule 1.01(a)
ALLIANCE AGREEMENTS
| 1. | Territory B Partnership Agreement |
| 2. | Clopidogrel License and Supply Agreement |
| 3. | Irbesartan License Agreement |
| 4. | Irbesartan Supply Agreement |
| 5. | Know-How License Agreement |
| 6. | Development Services Agreement |
| 7. | Toll Manufacturing Agreements |
| 8. | Puerto Rico Purchase and Sale Agreement |
| 9. | Partnership Services Agreement |
79607/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule l.01(b)
TERRITORY A 1
| Europe | Switzerland | |
|
the United Kingdom (including England. |
||
| Albania |
Wales, Scotland, Isle of Man, |
|
| Andorra |
Alderney, Northern Ireland, Chan |
|
| Austria |
Islands) |
|
| Belgium | Former USSR (Europe) (including Russia | |
| Bulgaria |
Ukraine, Belorus, Moldavia, Estor |
|
| Cyprus |
Latvia, Lithuania) |
|
| The Czech Republic | Vatican City State | |
| Slovakia | Former Yugoslavia (including Bosnia- | |
| Denmark |
Herzegovina, Croatia, Macedonia, |
|
| Finland |
Montenegro, Serbia, Slovenia) |
|
| France (including Martinique, | ||
|
Guadeloupe, French Guyana, French |
Africa | |
|
Polynesia, New Caledonia, Reunion |
||
|
and the other Overseas Departments |
Algeria | |
|
and Territories) |
Angola | |
| Germany | Benin | |
| Gibraltar | Botswana | |
| Greece | Burkina Faso | |
| Greenland | Burundi | |
| Hungary | Cambodia | |
| Iceland | Cameroon | |
| Irish Republic | Cape Verde Islands | |
| Italy | Central African Republic | |
| Liechtenstein | Chad | |
| Luxembourg | Comoros | |
| Malta and Gozo | Congo | |
| Monaco | Djibouti | |
| Netherlands | Egypt | |
| Norway | Equatorial Guinea | |
| Poland | Eritrea | |
| Portugal | Ethiopia | |
| Romania | Gabon | |
| San Marino | Gambia | |
| Spain | Ghana | |
| Sweden | Guinea |
| 1 |
Territory A will be deemed to include any country created by the division, consolidation or change of name of the countries listed above. |
79607/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
2
| Africa (continued) | Asia | |
| Guinea-Bissau | Afganistan | |
| Ivory Coast | Bahrain | |
| Kenya | Bangladesh | |
| Lesotho | Bhutan | |
| Liberia | Brunei | |
| Libya | Cambodia | |
| Madagascar | China (including Tibet, Taiwan, Macao) | |
| Malawi | Hong Kong | |
| Mali | India | |
| Mauritania | Indonesia | |
| Mayotte | Israel | |
| Mauritius, etc. | Jordan | |
| Morocco | South Korea | |
| Mozambique | Kuwait | |
| Namibia | Laos | |
| Niger | Lebanon | |
| Nigeria | Malaysia | |
| Occidental Sahara | Maldive Islands | |
| Rwanda | Mongolia | |
| St. Helena | Myanmar | |
|
Ascension |
Nepal | |
|
Tristan de Cunha |
Oman | |
| Sao Tome & Principe | Pakistan | |
| Senegal | Philippines | |
| Seychelles | Qatar | |
| Sierra Leone | Saudi Arabia | |
| Somalia | Singapore | |
| South Africa | Sri Lanka | |
| Spanish Presidios (including Ceuta, Melilla) | Syria | |
| Sudan | Thailand | |
| Swaziland | Turkey | |
| Tanzania | United Arab Emirates | |
| Togo | Former USSR (Asia) (including RSFSR | |
| Tunisia |
(Asia), Armenia (Hyastan), |
|
| Uganda |
Azerbaidjan, Georgia, Turkmenistan, |
|
| Zaire (Congo) |
Uzbekistan, Tadjikistan, Kazakhstan, |
|
| Zambia |
Kirghizia) |
|
| Zimbabwe | Vietnam | |
| Yemen |
79607/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule l.01(c)
TERRITORY B 1
| North America | Oceania | |
| Canada | Australia | |
| Mexico | Fiji | |
| United States of America (including, without | Kiribati | |
|
limitation, Puerto Rico, |
Mariana, Caroline and | |
|
the U.S. Virgin Islands, Guam, |
Marshall Islands |
|
|
American Samoa) for Clopidogrel only |
Nauru | |
| New Zealand | ||
| Central America and the West Indies | Papua New Guinea | |
| Pitcairn Islands | ||
| Anguilla | Samoa (non-U.S.) | |
| Antigua | Solomon Islands | |
| Aruba | Tonga | |
| Bahamas | Tuvalu | |
| Barbados | Vanuatu | |
| Belize | ||
| Bermuda | South America | |
| Cayman Islands | ||
| Costa Rica | Argentina | |
| Dominica | Bolivia | |
| Dominican Republic | Brazil | |
| Grenada | Chile | |
| Guatemala | Colombia | |
| Haiti | Ecuador | |
| Honduras | Falkland Islands | |
| Jamaica | Guyana | |
| Montserrat | Paraguay | |
| Netherlands Antilles | Peru | |
| Nicaragua | Surinam | |
| Panama | Uruguay | |
| St. Kitts-Nevis | Venezuela | |
| St. Lucia | ||
| St. Vincent and the Grenadines | ||
| El Salvador | ||
| Trinidad and Tobago | ||
| Turks and Caicos Islands | ||
| Virgin Islands (British) |
| 1 |
Territory B will be deemed to include any country created by the division, consolidation or change of name of the countries listed above. |
79607/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 4.01(a)-1
ANNUAL BUDGETARY TARGETS 1
TERRITORY B
| PRODUCT: | ||||||||||||||||
|
($000s) |
||||||||||||||||
|
Total
Territory |
Territory B
Partnership 5 |
Total
Local JVs |
Country 1 2 | Country 2 2 | Country 3 2 | Country 4 2 | ||||||||||
|
Net Sales 3 4 |
||||||||||||||||
|
Standard Cost of Sales |
||||||||||||||||
|
Other Cost of Sales |
||||||||||||||||
|
ICP |
||||||||||||||||
|
Management Cost of Sales |
||||||||||||||||
|
Management Gross Margin |
||||||||||||||||
|
Distribution |
||||||||||||||||
|
Management Gross Margin |
||||||||||||||||
|
Direct Product Expenses |
||||||||||||||||
|
Samples |
||||||||||||||||
|
Advertising/Promotion |
||||||||||||||||
|
Clinicals |
||||||||||||||||
|
Sales force |
||||||||||||||||
|
Other Direct Costs |
||||||||||||||||
|
Variable Product Contribution |
||||||||||||||||
|
Allocated Costs |
||||||||||||||||
|
Marketing |
||||||||||||||||
|
Medical |
||||||||||||||||
|
Administration |
||||||||||||||||
|
Other Income/Expense |
||||||||||||||||
|
Interest |
||||||||||||||||
|
Other |
||||||||||||||||
|
JV Profit/Loss Before Selling |
||||||||||||||||
|
Effort Remuneration |
||||||||||||||||
|
Selling Effort Remuneration |
||||||||||||||||
|
JV Profit/Loss 3 |
||||||||||||||||
| 1 |
To be prepared on a management information basis. |
| 2 |
Provided for information only. |
| 3 |
Only these items are subject to approval. |
| 4 |
Sales information will also be provided for countries in which there is Co-Marketing. |
| 5 |
Includes central R&D, central marketing and other direct costs of the Territory B Partnership. |
| * | Provide Detail |
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 4.02(a)-2
LONG-RANGE PLANS 1
TERRITORY B
| PRODUCT | ||||||||||
|
($000s) |
||||||||||
|
Budget
1997 |
1998 |
Projection
1999 |
2000 | |||||||
|
Net Sales 2 3 |
||||||||||
|
Standard Cost of Sales |
||||||||||
|
Other Cost of Sales |
||||||||||
|
ICP |
||||||||||
|
Management Cost of Sales |
||||||||||
|
Management Gross Margin |
||||||||||
|
Distribution |
||||||||||
|
Management Gross Margin |
||||||||||
|
Direct Product Expenses |
||||||||||
|
Samples |
||||||||||
|
Advertising/Promotion |
||||||||||
|
Clinicals |
||||||||||
|
Salesforce |
||||||||||
|
Other Direct Costs |
||||||||||
|
Variable Product Contribution |
||||||||||
|
Allocated Costs |
||||||||||
|
Marketing |
||||||||||
|
Medical |
||||||||||
|
Administration |
||||||||||
|
Other Income/Expense |
||||||||||
|
Interest |
||||||||||
|
Other |
||||||||||
|
JV Profit/Loss Before Selling |
||||||||||
|
Effort Remuneration |
||||||||||
|
Selling Effort Remuneration |
||||||||||
|
JV Profit/Loss 3 |
||||||||||
| 1 |
To be prepared on a management information basis. |
| 2 |
Only these items are subject to approval. |
| 3 |
Sales information will also be provided for countries in which there is Co-Marketing. |
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 5.07(b)
TRADEMARKS TO BE USED IN TERRITORY B
| I. | IRBESARTAN |
|
Form of Marketing
|
Trademark
|
|
|
Co-Promotion
|
Avapro
|
|
|
Co-Marketing (Sanofi)
|
Aprovel |
|
|
Co-Marketing (BMS)
|
Avapro |
| II. | CLOPIDOGREL |
|
Form of Marketing
|
Trademark
|
|
|
Co-Promotion
|
Plavix*
|
|
|
Co-Marketing (Sanofi)
|
Plavix
|
|
|
Co-Marketing (BMS)
|
Iscover
|
| * | This may be subject to change for the United States of America. |
79607/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 5.08(c)
[*] FORMULA
[*]
79607/PA1
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Schedule 7.03
“[*]” FORMULA
| [*] | [Note: Approximately two pages of text are omitted.] |
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Exhibit 10.7
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
EXECUTION COPY
Amendment No. 1
to the Territory B
Alliance Support Agreement
This AMENDMENT No. 1 (this “ Amendment No. 1 ”), dated as of October 17, 2001 and effective as of October 1, 2001 (the “ Effective Date ”) to the Territory B Alliance Support Agreement dated as of January 1, 1997 is hereby made by and between Sanofi-Synthélabo, a soci é t é anonyme organized and existing under the laws of the French Republic (“ SSBO ”) as the successor in interest to Sanofi, a soci é t é anonyme organized under the laws of the French Republic, and Bristol-Myers Squibb Company, a Delaware corporation (“ BMS ” and, together with SSBO, the “ Parties ” and, individually, each a “Party”).
W I T N E S S E T H :
WHEREAS, the Parties have entered into a Territory B Alliance Support Agreement dated as of January 1, 1997, as formerly amended or modified (the “ Agreement ”); and
WHEREAS, the Parties wish to amend the non-competition provisions of the Agreement with respect to the commercialization of Irbesartan Products or any other product having substantially the same mechanism of action.
NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants and the terms and conditions set forth herein, the Parties hereby agree as follows:
1. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Agreement.
| 2. | (a) Article I of the Agreement shall be amended by the addition of the following defined terms to Section 1.01: |
“ Alliance Support Agreements ” means this Agreement, the Territory A Alliance Support Agreement dated as of January 1, 1997 by and between each of the Parties and the U.S. Alliance Support Agreement dated as of October 17, 2001 by and between each of the Parties, in each case as amended, modified, supplemented or restated from time to time.
“ Business ” means the commercialization, directly or indirectly, of any Irbesartan Product or any other product having substantially the same mechanism of action as any Irbesartan Product (including, without limitation, through the granting of a license to any intellectual property related to Irbesartan or Irbesartan Products).
“ Compliance Period ” means the period commencing on the Effective Date and ending upon [*] of the date on which the [*] Alliance Support Agreements expires or terminates.
“ Corresponding Percentage ” means (i) 50.1% if the Non-Acquisition Party is BMS, and (ii) 49.9% if the Non-Acquisition Party is SSBO.
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
“ SSBO ” means Sanofi-Synthélabo, a soci é t é anonyme organized and existing under the laws of the French Republic and the successor in interest to Sanofi.
(b) Article I of the Agreement shall be further amended by the addition of the following defined terms to Section 1.02:
|
Defined Term |
Section Where Defined | |
|
Acquisition Party |
9.02 | |
|
Competing Business |
9.02(a) | |
|
Competitive Activities |
9.01 | |
|
Covered Enterprise |
9.01 | |
|
Non-Acquisition Party |
9.02 |
3. Section 5.02 of the Agreement shall be amended by deleting Section 5.02 in its entirety and replacing it with the following paragraph:
Section 5.02 Non-Competition . (a) During the period from and after the date hereof until [*], each Party shall not, and shall cause its Affiliates not to, directly or indirectly, except through the Territory B Partnership, [*].
(b) Notwithstanding anything to the contrary contained herein, the restrictions of Section 5.02(a) hereof shall not apply (i) with respect only to any terminated country(ies), to the highest offeror (and its Affiliates) under Section 7.03(i) hereof; (ii) with respect only to any terminated country(ies), to the Country Non-Terminating Party (and its Affiliates) which proceeds alone with the commercialization of any Clopidogrel Product in such country(ies) pursuant to Section 7.03(ii) hereof; (iii) with respect only to any Clopidogrel Product subject to an Unsatisfactory Final Outcome, to the highest offeror (and its Affiliates) under Section 7.05(a)(iii) hereof; (iv) with respect only to any Clopidogrel Product subject to a Safety Problem, to the Non-Concerned Party (and its Affiliates) which continues commercializing such Clopidogrel Product in accordance with Section 7.05(b)(ii) hereof; (v) following expiration or early termination of this Agreement, to the highest offeror (and its Affiliates) under Section 7.07(iii) hereof; and (vi) upon payment of the Non-Renewal Valuation following exercise of the special put option under Section 7.08 hereof, to SSBO and its Affiliates.
4. Section 7.01(c) of the Agreement shall be amended by deleting the last sentence thereof and replacing it with the following sentence:
All of the Parties’ rights and obligations under this Article VII and under Sections 5.02, 5.03, 5.06, 6.01, 6.02, 6.03, 8.02, 8.03, 8.04 and 8.12 and Article IX shall survive such expiration or early termination for the applicable period, if any.
2
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
5. The Agreement shall be amended by the addition of the following Article IX:
ARTICLE IX
NON-COMPETITION
Section 9.01 Non-Competition Covenants . Each Party agrees not to, and to cause each of its Affiliates not to, directly or indirectly (other than to or through its direct or indirect participation in the Territory B Partnership), at any time during the Compliance Period, engage in or undertake any Competitive Activities anywhere within Territory B. “ Competitive Activities ” shall mean (i) [*], or (ii) [*] (each such Person, a “ Covered Enterprise ”).
Section 9.02 Acquisition of Ownership Interest in a Covered Enterprise . Section 9.01 hereof shall in no event be deemed to prevent or restrict or apply to the acquisition by a Party or its Affiliates (the “ Acquisition Party ”, with the remaining Party being the “ Non-Acquisition Party ”) of an ownership interest (regardless of whether such interest is a minority interest, a majority interest or a controlling interest) in a Covered Enterprise and/or to the exercise of corresponding operational, management or control rights with respect to such Covered Enterprise, except that if at any time following the first anniversary of the acquisition by the Acquisition Party of ownership interests representing in the aggregate more than [*] of the total equity in a Covered Enterprise the Non-Acquisition Party demonstrates to the Acquisition Party that such acquisition has had a material adverse effect on the commercialization of Irbesartan Products by the Territory B Partnership in the portion of Territory B where such Covered Enterprise engages in or undertakes the Business, the Acquisition Party shall, at its option, either:
(a) cause the Covered Enterprise to divest itself of the Business (the “ Competing Business ”) within twelve (12) months of such demonstration by the Non-Acquisition Party; or
(b) offer to the Non-Acquisition Party the right to acquire the Corresponding Percentage of the Acquisition Party’s ownership interest in the Competing Business at a valuation which, taking into account the percentage of the gross annual revenues of the Covered Enterprise that are represented by the Competing Business, is in proportion to the price paid by the Acquisition Party for the Covered Enterprise, in the understanding that should the Non-Acquisition Party decline to acquire such a participation in the Competing Business the Non-Acquisition Party shall have no further rights under this Article IX to challenge such acquisition.
Section 9.03 Exceptions to Non-Competition Covenants . Sections 9.01 and 9.02 hereof shall not prevent or restrict or apply to:
(a) A Party that elects to proceed alone with the commercialization of Irbesartan Products in any country within Territory B or in all of Territory B pursuant to:
3
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
(i) Section 7.03(ii) hereof, but solely with respect to such Party’s (or its Affiliates’) Competitive Activities in the countries in Territory B where such Party has elected to proceed alone; or
(ii) Section 7.05(b)(ii) hereof;
in the understanding that the other Party shall remain subject to Sections 9.01 and 9.02 hereof in any such countries and in the remaining countries in Territory B.
(b) A Party that acquires the right to commercialize Irbesartan Products in any country within Territory B or in all of Territory B from the Territory B Partnership (and/or the other Party and its Affiliates) pursuant to:
(i) Section 7.03(i) hereof, but solely with respect to such Party’s (or its Affiliates’) Competitive Activities in the countries in Territory B with respect to which such rights were acquired;
(ii) Section 7.05(a)(iii) hereof;
(iii) Section 7.07(iii) hereof; or
(iv) Section 7.08 hereof;
in the understanding that the other Party shall remain subject to Sections 9.01 and 9.02 hereof in any such countries and in the remaining countries in Territory B.
(c) Either Party after the date on which a Third Party acquires the right to commercialize Irbesartan Products in any country within Territory B or in all of Territory B from the Territory B Partnership (and/or the Parties and their Affiliates) pursuant to:
(i) Section 7.03(i) hereof, but solely with respect to the Competitive Activities of the Parties or their Affiliates in the countries in Territory B with respect to which such rights were acquired;
(ii) Section 7.05(a)(iii) hereof; or
(iii) Section 7.07(iii) hereof.
Section 9.04 Survival . The expiration or early termination of this Agreement pursuant to Article VII hereof expressly shall not relieve any Party from its obligations under this Article IX, which Article shall survive until the end of the Compliance Period.
Section 9.05 Breach . Without otherwise limiting the remedies available to any Party, a breach by a Party or any of its Affiliates of any obligation under this Article IX shall not constitute a material breach under Section 7.06(iii) hereof.
4
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Section 9.06 Lost Profits and Consequential Damages . In no event shall a Party be liable to the other Party for lost profits or for any consequential damages that such other Party may suffer under or in connection with this Article IX.
Section 9.07 Consideration and Inducement . Each Party acknowledges and agrees that (i) each of the covenants of the Parties set forth in Sections 9.01 and 9.02 hereof has been agreed following extensive negotiations among the Parties, (ii) the Parties have bargained for the benefit of such covenants in order to protect their investment in the Territory B Partnership, (iii) each of the covenants of the Parties set forth in Sections 9.01 and 9.02 hereof is an essential element of the transactions contemplated by the Parties to protect their investment in the Territory B Partnership and (iv) it has independently consulted with its counsel and, after such consultation, agrees that the covenants set forth in Sections 9.01 and 9.02 hereof are reasonable and proper.
Section 9.08 Deemed Amendment . The Parties’ covenants contained in Sections 9.01 and 9.02 hereof with respect to the Business, specified time period and geographic area are separate and several. Each Party acknowledges that the limitations and restrictions set forth in Sections 9.01 and 9.02 hereof are reasonable to protect the legitimate commercial interests of each of the Parties and their Affiliates, and in particular, to protect the investment in the Territory B Partnership, and that such covenants are given for valuable consideration and are valid and enforceable against each Party, and each Party hereby waives all defenses (other than fraud and misrepresentation and other defenses similar thereto) to the maximum extent possible regarding the strict enforcement of such covenants. If any court of competent jurisdiction determines that the definition of Business, the specified time period or the geographic area are unreasonable, arbitrary, too broad in description or scope, or against public policy, the shorter or smaller time period or geographic area, or reduced scope of business, as the case may be, determined by such court to be reasonable, non-arbitrary, sufficiently narrow or not against public policy, may be enforced against each Party. Notwithstanding the foregoing, each Party agrees to honor the provisions of Sections 9.01 and 9.02 hereof, including the definition of Business, the time period and the geographic area as specified herein and not to contest the enforceability of such definition of Business, time period or geographic area. If any covenant or provision in this Article IX is determined to be void or unenforceable, in whole or in part, such determination shall not affect or impair, or be deemed to affect or impair, the validity or enforceability of any other covenant or provision of this Article IX or of this Agreement.
6. Each Party shall cause its Affiliates that are parties to any local agreements containing non-competition provisions inconsistent with or contrary to the provisions of this Amendment No. 1 to amend such local agreements to be in accordance with these provisions.
7. Except as explicitly amended hereby, other provisions of the Agreement (as otherwise amended, modified, supplemented or restated prior to the Effective Date) shall remain unchanged.
5
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
8. This Amendment No. 1 shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts executed and performed entirely in that state.
9. This Amendment No. 1 shall be effective as of the Effective Date, notwithstanding its execution on the date hereof.
6
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
IN WITNESS WHEREOF, the Parties have duly executed this Amendment No. 1 to the Territory B Alliance Support Agreement as of the day and year first written above.
| SANOFI-SYNTHÉLABO | ||||
| By: | /s/ Jean-Pierre KERJOUAN | |||
| Name: | Jean-Pierre KERJOUAN | |||
| Title: |
Senior Vice President General Counsel |
|||
| By: | /s/ Jean-Claude LEROY | |||
| Name: | Jean-Claude LEROY | |||
| Title: |
Senior Vice President Strategy and Business Development |
|||
| BRISTOL-MYERS SQUIBB COMPANY | ||||
| By: | /s/ Richard J. Lane | |||
| Name: | Richard J. Lane | |||
| Title: | Executive Vice president | |||
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
Exhibit 10.8
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
CLOPIDOGREL
INTELLECTUAL PROPERTY LICENSE
AND
SUPPLY AGREEMENT
between
SANOFI
and
SANOFI PHARMA BRISTOL-MYERS SQUIBB
dated as of January 1, 1997
TABLE OF CONTENTS
| ARTICLE 1 | ||||
| DEFINITIONS | ||||
| SECTION 1.1 | Defined Terms | 2 | ||
| SECTION 1.2 | Additional Defined Terms | 6 | ||
| ARTICLE 2 | ||||
| GRANT OF LICENSE | ||||
| SECTION 2.1 | License Grant | 7 | ||
| SECTION 2.2 | No Transfer | 7 | ||
| SECTION 2.3 | No Implicit Rights | 7 | ||
| SECTION 2.4 | Goodwill | 7 | ||
| SECTION 2.5 | Improvements | 7 | ||
| ARTICLE 3 | ||||
| SUPPLY OF ACTIVE SUBSTANCE CHEMICAL BULK | ||||
| SECTION 3.1 | Supply during the Exclusive Supply Period | 8 | ||
| SECTION 3.2 | Supply after the Exclusive Supply Period | 8 | ||
| SECTION 3.3 | Terms and Conditions of Supply | 8 | ||
| SECTION 3.4 | Samples | 8 | ||
| SECTION 3.5 | Manufacturing Improvements | 9 | ||
| ARTICLE 4 | ||||
| SUB-LICENSE | ||||
| SECTION 4.1 | General Sub-License | 9 | ||
| SECTION 4.2 | Sub-License for Alliance Agreements | 9 | ||
| SECTION 4.3 | Termination of Sub-License | 9 | ||
| ARTICLE 5 | ||||
| PROVISION OF DOCUMENTS | ||||
| 10 | ||||
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
ii
|
ARTICLE 6 CONSIDERATION |
||||
| SECTION 6.1 | Discoverer’s Remuneration | 10 | ||
| SECTION 6.2 | Adjustment to the Discovery Royalty | 10 | ||
| SECTION 6.3 | Payment | 11 | ||
| SECTION 6.4 | Method of Payment | 11 | ||
| SECTION 6.5 | Records | 11 | ||
| SECTION 6.6 | Payment Reports | 11 | ||
| SECTION 6.7 | Taxes | 12 | ||
|
ARTICLE 7 ADVERSE EVENT REPORTING |
||||
| SECTION 7.1 | Adverse Event Reporting | 12 | ||
| SECTION 7.2 | Reporting Procedure | 12 | ||
|
ARTICLE 8 TRADEMARKS; PATENTS; INFRINGEMENT |
||||
| SECTION 8.1 | Maintenance | 13 | ||
| SECTION 8.2 | Registration | 13 | ||
| SECTION 8.3 | Undertaking of the SNC Partnership | 13 | ||
| SECTION 8.4 | Compliance | 13 | ||
| SECTION 8.5 | Quality Standards | 14 | ||
| SECTION 8.6 | Quality Control | 14 | ||
| SECTION 8.7 | Failure to Meet Standards | 14 | ||
| SECTION 8.8 | Patent and Trademark Infringement | 14 | ||
| SECTION 8.9 | Notification of Infringement | 15 | ||
| SECTION 8.10 | Invalidity or Nullity | 15 | ||
| SECTION 8.11 | Licensor’s Representations | 15 | ||
|
ARTICLE 9 TERM; TERMINATION |
||||
| SECTION 9.1 | Term; Termination | 16 | ||
| SECTION 9.2 | Consequences of Termination | 17 | ||
|
ARTICLE 10 CONFIDENTIALITY |
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| 18 | ||||
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ARTICLE 11 MISCELLANEOUS |
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| SECTION 11.1 | Notices | 18 | ||
| SECTION 11.2 | Governing Law | 19 | ||
| SECTION 11.3 | Dispute Resolution | 19 | ||
| SECTION 11.4 | Specific Performance | 20 | ||
| SECTION 11.5 | No Third Party Beneficiaries | 20 | ||
| SECTION 11.6 | Assignment | 20 | ||
| SECTION 11.7 | Severability | 20 | ||
| SECTION 11.8 | Waivers and Amendments | 21 | ||
| SECTION 11.9 | Headings | 21 | ||
| SECTION 11.10 | Entire Agreement | 21 | ||
| SECTION 11.11 | No Partnership or Joint Venture | 21 | ||
| SECTION 11.12 | Governing Language | 21 | ||
| SECTION 11.13 | Force Majeure | 21 | ||
| SECTION 11.14 | Counterparts | 22 | ||
|
SCHEDULES |
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| SCHEDULE 1A | COST OF BULK | |
| SCHEDULE 1B | LICENSED PATENTS | |
| SCHEDULE 1C | LICENSED TRADEMARKS | |
| SCHEDULE 1D | TERRITORY A | |
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This CLOPIDOGREL INTELLECTUAL PROPERTY LICENSE AND SUPPLY AGREEMENT (this “ Agreement ”) dated as of January 1, 1997 is hereby made by and between:
Sanofi, a socièté anonyme organized and existing under the laws of the French Republic (“Licensor”); and
Sanofi Pharma Bristol-Myers Squibb, a socièté en nom collectif organized and existing under the laws of the French Republic (the “ SNC Partnership ” and, together with Licensor, the “ Parties ” and, individually, each a “ Party ”).
W I T N E S S E T H :
WHEREAS, Licensor has discovered and patented a new chemical entity known as SR 25990C with the international non-proprietary name Clopidogrel Hydrogenosulphate (“Clopidogrel”), with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;
WHEREAS, Licensor, Bristol-Myers Squibb Company, a Delaware corporation (“SMS”), and Sterling Winthrop, Inc., a Delaware corporation (“ Sterling ”) entered into a Development Agreement dated July 29, 1993 (the “ Development Agreement ”) for, among other things, the development of Clopidogrel;
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30, 1994 among Eastman Kodak Company, Licensor and Sterling, Licensor acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Development Agreement;
WHEREAS, Licensor and BMS have entered into a Territory A Alliance Support Agreement dated as of the date hereof (the “ Alliance Support Agreement ”) and have formed through their indirect wholly owned subsidiaries the SNC Partnership pursuant to the statuts to be amended and restated as of June 6, 1997 (the “ SNC By-Laws ”) for, among other things, the commercialization of Clopidogrel Products in Territory A (as such terms are defined herein);
WHEREAS, Licensor, BMS and the SNC Partnership have entered into a Product Know-How License Agreement for Territory A dated as of the date hereof (the “Know-How License Agreement”), pursuant to which Licensor and BMS have granted to the SNC Partnership a license to use certain know-how for the commercialization of Clopidogrel Products and which was developed by Licensor and BMS under the Development Agreement;
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WHEREAS, Licensor owns or has acquired independent of BMS certain intellectual property, including certain patents, trademarks and know-how, for the commercialization of Clopidogrel Products in Territory A;
WHEREAS, Licensor is willing to grant to the SNC Partnership, and the SNC Partnership is willing to accept, a license under such intellectual property for the commercialization of Clopidogrel Products in Territory A on the terms and conditions set forth herein;
WHEREAS, Licensor and its Affiliates have the exclusive right, subject to the terms and conditions set forth in this Agreement, to provide the active substance chemical bulk containing Clopidogrel (the “ Clopidogrel Bulk ”) that is required for the development, clinical testing and manufacturing of Clopidogrel Products in Territory A; and
WHEREAS, Licensor, either directly or through its Affiliates, is willing to sell to the SNC Partnership, and the SNC Partnership is willing to purchase on an exclusive basis from Licensor or its Affiliates, the Clopidogrel Bulk on the terms and conditions set forth in this Agreement
NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions set forth herein, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Clopidogrel Product of which any Party or any of its Affiliates becomes aware, whether or not considered drug, related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.
“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however , that, with respect to Licensor, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Licensor that would be an Affiliate of Licensor solely by reason of its being controlled by Elf Aquitaine. For the purposes of this definition, “ control ” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person or to veto any material decision relating to the management of policies of a Person in each case whether through the ownership of voting securities, by contract or otherwise, (b) the beneficial ownership, directly or indirectly, of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial ownership of at least 50% of the partnership interests of a general partnership. The Parties
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confirm that each Co-Promotion Entity (as defined in the Alliance Support Agreement) in Territory A shall be considered to be an Affiliate of Licensor.
“ Alliance Agreements ” has the meaning set forth in the Alliance Support Agreement.
“ Alliance Strategic Committee ” has the meaning set forth in the Alliance Support Agreement.
“ BMS Partner ” means BMS Investco S.A.S., a partner in the SNC Partnership.
“ Clopidogrel Intellectual Property ” means the Clopidogrel Know-How and that part of the Licensed Patents relating to Clopidogrel.
“ Clopidogrel Know-How ” means any and all technical data, information, material and other know-how that relate to the manufacturing and purification of the Clopidogrel Bulk, including, without limitation, any analytical methodology, chemical, procedures, protocols, techniques and results of experimentation and testing, solely owned, developed or acquired by Licensor and its Affiliates as of the date hereof.
“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof.
“ Competing Product ” means any product that [*], but which is not [*] set forth in Schedule [*]or selected for [*] by [*].
“ Cost of Bulk ” means (i) during the Exclusive Supply Period, [*] of the Clopidogrel Bulk used in the manufacture of Clopidogrel Products, as more fully described in Schedule 1A attached hereto, and (ii) following the Exclusive Supply Period, [*] for the supply of the Clopidogrel Bulk after the Manufacturing and Sourcing Committee shall have assured the supply of such Clopidogrel Bulk.
“ Development Committee ” has the meaning set forth in the Know-How License Agreement.
“ Exclusive Supply Period ” means the period of time during which Licensor, either directly or through its Affiliates, is the exclusive supplier of the Clopidogrel Bulk to the SNC Partnership.
“ Finance Committee ” has the meaning set forth in the Alliance Support Agreement.
“ Functional Committee ” means any Alliance Functional Committee (as such term is defined in the Alliance Support Agreement) or any License Functional Committee (as such term is defined in the Know-How License Agreement).
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“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.
“ License Steering Committee ” has the meaning set forth in the Know-How License Agreement
“ Licensed Intellectual Property ” means the Clopidogrel Intellectual Property and the Product Intellectual Property.
“ Licensed Know-How ” means the Clopidogrel Know-How and the Product Know-How.
“ Licenced Patents ” means the patents and patent applications of Licensor and its Affiliates existing on the date hereof relating to Clopidogrel and Clopidogrel Products, including, without limitation, those listed on Schedule 1B attached hereto and all reissues, renewals, divisions, continuations, continuations-in-part, reexaminations, patent term restorations, patents of additions and extensions thereof.
“ Licensed Trademarks ” means the trademarks and registered trademarks and applications for registered trademarks listed on Schedule 1C attached hereto, and the trademarks, the registered trademarks and applications for registered trademarks selected by the Marketing Working Group.
“ Line Extension ” has the meaning set forth in the Know-How License Agreement.
“Loss of Exclusivity” means the loss of exclusivity in any country in Territory A upon the occurrence of all of the three following conditions: (i) a Clopidogrel Product shall have lost its marketing exclusivity (whether by virtue of compulsory license under, or expiration, invalidity or unenforceability of, the patents covering such Clopidogrel Product, loss or expiration of any exclusivity conferred de facto or de jure by any statutory marketing or data exclusivity or any other cause), (ii) one or more Competing Products shall have been legally marketed in such country by one or more Third Parties and (iii) Net Sales of such Clopidogrel Product in such country over any period of [*] (after the conditions set forth in sub-clauses (i) and (ii) above shall have been satisfied) shall have [*] the level of Net Sales of such Clopidogrel Product in such country over the immediately preceding period of [*].
“ MAA ” means any marketing authorizations, licenses, approvals, registrations, certificates and exemptions submitted to or granted by or pending with any Governmental Authority for the purpose of allowing the manufacture, production, supply, marketing, distribution or sale of any Clopidogrel Product in a particular country.
“ Manufacturing and Sourcing Committee ” has the meaning set forth in the Alliance Support Agreement.
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“ Market Penetration ” means, with respect to one or more Competing Products in any given country in Territory A, the number of units of such Competing Products sold in such country, expressed as a percentage of the sum of (i) the [*]with respect to which [*]constitute [*] and (ii) the [*], in each case over a period of [*], as reported by [*].
“ Marketing Entity ” has the meaning set forth under the definition of Entilé de Marketing in the Règlement Intérieur.
“ Marketing Working Group ” has the meaning set forth in the Know-How License Agreement.
“ Net Sales ” means for any given period and with respect to any Clopidogrel Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any transfers between any Party and its Affiliates solely for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outdating or the return of such Clopidogrel Product.
“New Drug Application” means the application required to be filed with the relevant Governmental Authority in any country in order to obtain approval to market commercially any Clopidogrel Product in such country.
“ New Indication ” has the meaning set forth in the Know-How License Agreement.
“ Person ” means any individual, partnership, firm, corporation, Société anonyme, Société en nom collectif, Société en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.
“ Product Intellectual Property ” means the Product Know-How, the Licensed Trademarks and that part of the Licensed Patents relating to Clopidogrel Products.
“ Product Know-How ” means any and all technical data, information, material and other know-how that relate to the formulation of Clopidogrel Products, including, without limitation, any analytical methodology, chemical, toxicological, pharmacological and clinical data, formulae, procedures, protocols, techniques and results of experimentation and testing, solely owned, developed or acquired by Licensor as of the date hereof.
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“ Réglement Intérieur ” means the réglement int é rieur to be entered into between the Sanofi Partner and the BMS Partner with effect as of the date hereof.
“ Safety Problem ” has the meaning set forth in the Alliance Support Agreement.
“ Sanofi Partner ” means Sanofi Participations, a partner in the SNC Partnership.
“ Serious Adverse Event ” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.
“ Territory A ” means the countries and geographic areas described and listed in Schedule 1D attached hereto,
“ Third Party ” means a Person who or which is neither a Party nor an Affiliate of a Party.
1.2 Additional Defined Terms. The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:
|
Defined Term |
Section Where Defined | |
|
Agreement |
Preamble | |
|
Alliance Support Agreement |
Recitals | |
|
BMS |
Recitals | |
|
Clopidogre1 |
Recitals | |
|
Clopidogrel Bulk |
Recitals | |
|
Development Agreement |
Recitals | |
|
Discovery Royalty |
6.1 | |
|
Discoverer’s Remuneration |
6.1 | |
|
Force Majeure |
11.13 | |
|
Know-How License Agreement |
Recitals | |
|
License Termination Date |
9.2(a) | |
|
Licensor |
Preamble | |
|
Notices |
11.1 | |
|
Party |
Preamble | |
|
Payment Report |
6.3 | |
|
Quality Standards |
8.5 | |
|
Reporting Party |
7.2 | |
|
SNC By-Laws |
Recitals | |
|
SNC Partnership |
Preamble | |
|
Sterling |
Recitals | |
|
Supply Payment |
6.1 |
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ARTICLE 2
GRANT OF LICENSE
2.1 License Grant . Subject to the terms and conditions of this Agreement, Licensor hereby grants to the SNC Partnership, and the SNC Partnership hereby accepts:
| (i) | an exclusive license for the term hereof under the Product Intellectual Property (a) to make, have made, sell, offer for sale and import Clopidogrel Products in Territory A, (b) to develop Clopidogrel Products for Territory A, including, without limitation, New Indications and Line Extensions thereof, and (c) with the prior approval of the Manufacturing and Sourcing Committee, to make, have made and export the Clopidogrel Products outside of Territory A; provided, however, that such exclusivity shall not apply to Sanofi and BMS with respect to the Ongoing Studies (as such term is defined in the Know-How License Agreement), which are being conducted by Sanofi and BMS under the Development Agreement; and |
| (ii) | after the Exclusive Supply Period, an exclusive license for the term hereof under the Clopidogrel Intellectual Property solely for the purpose of making and having Clopidogrel made to produce Clopidogrel Products for Territory A by the entity(ies) approved by Licensor (which approval shall not be unreasonably withheld), which shall include the entity(ies) selected by the Manufacturing and Sourcing Committee. |
2.2 No Transfer . The SNC Partnership hereby acknowledges and agrees that this Agreement does not, and shall not be deemed to, transfer any proprietary ownership interest whatsoever to the SNC Partnership in or to the Licensed Intellectual Property. Nothing herein shall give the SNC Partnership any right, title or interest in or to any of the Licensed Intellectual Property, except the rights granted pursuant to this Agreement.
2.3 No Implicit Rights . All of the rights granted hereunder are explicitly stated herein and nothing in this Agreement shall be construed to grant any implied rights whatsoever to the SNC Partnership in or to the Licensed Intellectual Property.
2.4 Goodwill . The SNC Partnership hereby acknowledges that all goodwill connected with the Licensed Trademarks shall inure to the benefit of Licensor, and the SNC Partnership shall not take any action that may be detrimental to such goodwill.
2.5 Improvements . Any new or useful invention, process or improvement, patentable or unpatentable, relating to the formulation of any Clopidogrel Product under the Clopidogrel Intellectual Property developed or acquired by the SNC Partnership during the term hereof shall be the property of the SNC Partnership, which shall have all ownership rights thereto.
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ARTICLE 3
SUPPLY OF ACTIVE SUBSTANCE CHEMICAL BULK
3.1 Supply during the Exclusive Supply Period. During the Exclusive Supply Period, Licensor shall supply, or shall cause one or more of its Affiliates to supply, as exclusive supplier to the SNC Partnership, the Clopidogrel Bulk required for the development, clinical testing and manufacturing of Clopidogrel Products for Territory A. The price to be paid by the SNC Partnership for the Clopidogrel Bulk shall be based on the Cost of Bulk and shall be paid to Licensor pursuant to Article 6 hereof.
3.2 Supply after the Exclusive Supply Period . (a) The Exclusive Supply Period shall end sixty (60) days following the earlier of:
| (x) | Licensor shall have given the SNC Partnership and BMS written notice that Licensor’s or its Affiliates’ [*] in Territory A (or in such other geographic area as [*] may identify from time to time) represents or appears likely to represent [*] in Territory A (or in such other geographic area), computed over the [*] immediately preceding the date of such notice; or |
| (y) | Competing Products shall have reached, in the aggregate, [*] in Territory A as determined by the [*] (computed over the [*] immediately preceding the date of such determination). |
(b) Promptly after delivery of the notice or determination described in subclause (a) above, the Manufacturing and Sourcing Committee shall ensure the supply of the Clopidogrel Bulk from Licensor, BMS, their respective Affiliates and/or qualified Third Parties and, for the period after the Exclusive Supply Period, shall award, to the extent practicable, the right to supply the Clopidogrel Bulk to the Person(s) that will supply the Clopidogrel Bulk (i) for the lowest price, (ii) in substantially identical quality and quantity to the Clopidogrel Bulk previously supplied by Licensor or its Affiliates and (iii) pursuant to a supply commitment of at least [*]. Notwithstanding the foregoing, upon and after the occurrence of the event described in sub-clause (y) above, Licensor shall continue to be the exclusive supplier thereof for so long as Licensor offers to supply the Clopidogrel Bulk, either directly or through its Affiliates, at a price that is [*]with respect thereto.
3.3 Terms and Conditions of Supply . The Parties shall agree on the other terms and conditions for the supply of the Clopidogrel Bulk during the Exclusive Supply Period, including, without limitation, the payment mechanism thereof.
3.4 Samples. Clopidogrel Products and the Clopidogrel Bulk used as promotional samples shall be sold on a basis to be determined by the Finance Committee.
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3.5 Manufacturing Improvements . (a) For so long as Licensor, directly or through its Affiliates, is the exclusive supplier of the Clopidogrel Bulk pursuant to Section 3.1 hereof, BMS shall notify Licensor of any proposal to improve the manufacturing process used for the Clopidogrel Bulk and shall offer Licensor, by written notice, the right to participate in the development of such improvement by financing [*] of all development costs incurred after the receipt of such notice.
(b) If Licensor elects to participate in the development of such improvement within ninety (90) days after receipt of such notice and such development results in the issuance of a process patent, (i) the Parties and BMS shall amend and restate this Agreement so that BMS and Licensor shall share equally the economic benefit resulting from such patent and (ii) such patent shall be registered in the name of (x) BMS (who shall grant a license to Licensor with respect to such patent), if the patented process has applications other than in the manufacture of the Clopidogrel Bulk or (y) Licensor, if the patented process has applications only in the manufacture of the Clopidogrel Bulk.
(c) If Licensor does not elect to participate in such development within ninety (90) days after receipt of such notice and the proposed process has applications only in the manufacture of the Clopidogrel Bulk, then BMS shall not undertake any development work on such manufacturing process (whether directly, by licensing, or by transferring its know-how to, a Third Party) until termination of the Exclusive Supply Period.
ARTICLE 4
SUB-LICENSE
4.1 General Sub-License . Except as permitted under Section 4.2 hereof, the SNC Partnership shall not, without the prior written consent of Licensor, sub-license any of its rights and obligations under this Agreement; provided, however, that if the representatives of Licensor on any Functional Committee, the Alliance Strategic Committee or the License Steering Committee consensually agree to sub-license any of the SNC Partnership’s rights or obligations hereunder, such agreement shall be deemed to be Licensor’s consent for the purposes of this Section 4.1. No such sub-license shall relieve the SNC Partnership of its obligations hereunder.
4.2 Sub-License for Alliance Agreements . The SNC Partnership shall sub-license those of its rights and obligations under this Agreement, to any Affiliate of Licensor or BMS that is a party to any Alliance Agreement, solely for the purposes of permitting such Affiliate to perform its obligations under such Alliance Agreement.
4.3 Termination of Sub-License . Licensor shall have the right to require the SNC Partnership to terminate any sub-license hereunder in the event that the sub-licensee fails to comply in any material respect with, or takes any action contrary to, the terms of such sub-license or any decision made by any Functional Committee, the Alliance Strategic Committee or the License Steering Committee, and such sub-licensee has failed to remedy such non-compliance within thirty (30) days from its receipt of written notice thereof from Licensor or the SNC Partnership.
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ARTICLE 5
PROVISION OF DOCUMENTS
As promptly as practicable following the date hereof, Licensor shall make available to the SNC Partnership copies of all relevant data, studies and materials comprising Licensed Know-How in Licensor’s possession that shall be available as of such date.
ARTICLE 6
CONSIDERATION
6.1 Discoverer’s Remuneration . In consideration of the rights and licenses granted and the services provided hereunder, the SNC Partnership shall pay, or shall cause to be paid, directly to Licensor for the term hereof an aggregate amount equal to [*] of Net Sales of Clopidogrel Products in Territory A (the “ Discoverer’s Remuneration ”), which shall be subject to adjustment in accordance with Section 6.2 hereof. The Discoverer’s Remuneration shall include (i) a discovery royalty (the “ Discovery Royalty ”) and (ii) during the Exclusive Supply Period, payment for the supply of the Clopidogrel Bulk calculated pursuant to Section 3.1 hereof (the “Supply Payment”). For each country in Territory A, the SNC Partnership shall determine the breakdown of the Discoverer’s Remuneration into the Discovery Royalty and the Supply Payment
6.2 Adjustment to the Discovery Royalty . (a) Following the Exclusive Supply Period, the Discoverer’s Remuneration shall cease to include the Supply Payment and shall thereafter consist solely of the Discovery Royalty. The Discovery Royalty shall then be reset, and shall subsequently be subject to periodic positive or negative adjustments (but not more than once every two (2) consecutive calendar quarters), as described below:
The rate of the Discovery Royalty shall be [*] of Net Sales of Clopidogrel Products in Territory A, [*] an amount equal to [*],which shall be determined as follows:
[*]
(the Cost of Bulk being computed over the [*] immediately preceding the calculation date and expressed as a percentage of Net Sales); provided, however, that, except as provided in paragraph (b) of this Section 6.2., the Discovery Royalty shall in no event be reduced below [*] of Net Sales of Clopidogrel Products in Territory A.
(b) From and after the Loss of Exclusivity of a Clopidogrel Product in any given country in Territory A, Licensor shall receive a trademark royalty of [*] of Net Sales of such Clopidogrel Product in such country, if and for so long as the Licensed Trademarks are used by a Marketing Entity in such country, and any [*] in the rate of the Discovery Royalty attributable to such country remaining after [*] (if applicable) shall be [*], on the basis of [*]:
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[*]
(c) The Loss of Exclusivity shall be measured by the Marketing Working Group on a quarterly basis.
6.3 Payment For the term of this Agreement, the SNC Partnership shall pay or cause to be paid to Licensor all amounts due hereunder on a quarterly basis within sixty (60) days of the end of each calendar quarter. Each such payment shall be accompanied by an accurate statement of the amount of Net Sales of Clopidogrel Products during such calendar quarter, the calculation of all payments to be made to Licensor for such calendar quarter and a report on Competing Products and on any actual or potential Market Penetration (each a “Payment Report”).
6.4 Method of Payment . (a) All payments to be made hereunder shall be made by wire transfer in immediately available funds, and shall be made in French francs to the bank account of Licensor as notified to the SNC Partnership, unless the Parties agree to settle such payments through other means.
(b) Amounts due from the SNC Partnership to Licensor in respect of sales based on a currency other than French francs shall be converted to French francs using the methodology determined for such purpose by the Finance Committee.
6.5 Records . The SNC Partnership shall maintain (i) books, records and accounts which accurately and fairly reflect, in reasonable detail, the Net Sales of Clopidogrel Products and (ii) an adequate system of internal accounting controls. All books, records and accounts referred to in clause (i) above shall be maintained for not less than three (3) years, or for such longer period if and as required by applicable law, following the date of the sales constituting the Net Sales and shall be made available for reasonable review upon request by Licensor or the BMS Partner.
6.6 Payment Reports . (a) At the request of the BMS Partner, the SNC Partnership shall, and shall if applicable cause its sub-licensees to, permit BMS or an independent, certified public accountant not having any significant relation to either BMS or Licensor, as appointed by BMS, at reasonable times and upon reasonable notice, to examine the books and records of the SNC Partnership as may be necessary to (i) determine, with respect to any calendar quarter ending not more than two (2) years prior to the related request, the correctness of any Payment Report or payment made under this Agreement or any Alliance Agreement or (ii) obtain information as to the amount payable for any such calendar quarter in the case of failure on the part of the SNC Partnership to report or pay pursuant to this Agreement or on the part of any party to any Alliance Agreement; provided, however, that BMS shall not have the right to make such audit request more than once every twelve
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(12) calendar months. The results of any such audit shall be promptly made available to BMS, Licensor and the SNC Partnership.
(b) BMS shall bear the full cost and expense of any such audit, unless such audit discloses that the amount due to Licensor is less than the amount paid by [*] of the amount due, in which case Licensor shall bear the full cost and expense of such audit.
(c) The determination by an independent, certified public accountant pursuant to this Section 6.6 as to the amount due and payable by the SNC Partnership shall be conclusive and binding on the Parties hereto.
6.7 Taxes. All payments due under this Agreement shall be paid in full without deduction, except for taxes (if any) required to be withheld by applicable law in Territory A with respect to such payments. In the event the SNC Partnership is required under applicable law to withhold any tax to the revenue authorities in any country in Territory A regarding any payment to Licensor, the amount of such tax shall be deducted by the SNC Partnership and paid to the relevant revenue authority, and the SNC Partnership shall notify Licensor thereof and shall promptly furnish to Licensor all copies of any tax certificate or other documentation evidencing such withholding. In the event that any such tax shall subsequently be found to be due, payment of such tax shall be the responsibility of Licensor.
ARTICLE7
ADVERSE EVENT REPORTING
7.1 Adverse Event Reporting . Licensor, the SNC Partnership and the BMS Partner shall each ensure that, in the marketing of the Clopidogrel Products in Territory A, it and each of its respective Affiliates record, investigate, summarize and review all Adverse Events and Serious Adverse Events. Each Party shall require that its Affiliates, sub licensees and distributors adhere to all requirements of local law which relate to the reporting and investigation of Adverse Events and Serious Adverse Events, and each Party shall require that its Affiliates, sub-licensees and distributors keep such Party informed of such experiences.
7.2 Reporting Procedure . In order that each Party may be fully informed of these experiences, each Party shall report to:
Sanofi Pharma 82,
avenue Raspail
94255 Gentilly Cedex, France
Attention: [omitted]
Facsimile: [omitted]
all Adverse Events and Serious Adverse Events anywhere in the world; provided, however, that Serious Adverse Events shall be reported to the Person set forth above within three (3) working days of a Party’s becoming aware of such an event (a “ Reporting Party ”) and shall be reported by facsimile as provided above. The Reporting Party shall report all other
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
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Adverse Events on a monthly basis. Each Party shall promptly notify the Person set forth above of any complaint received by it in sufficient detail and in sufficient time to allow the Person set forth above to comply with any and all regulatory requirements imposed upon it in any country. Each Party shall also advise the Person set forth above of any regulatory developments (e.g., proposed recalls, labeling and other registrational dossier changes) affecting any Clopidogrel Product in any country in Territory A. Each Party and the BMS Partner shall have the right to review and/or request copies of any and all information and reporting forms generated or received by the Person set forth above with respect to Adverse Events and Serious Adverse Events. These procedures may be modified from time to time by the Regulatory Committee (as such term is defined in the Know-How License Agreement).
ARTICLE 8
TRADEMARKS; PATENTS; INFRINGEMENT
8.1 Maintenance . Licensor shall maintain in full force and effect all Licensed Patents and Licensed Trademarks for the term of this Agreement and shall bear all costs and expenses related thereto. In the event that Licensor or the SNC Partnership becomes aware of a registration for or an application to register a trademark which it believes is reasonably likely to conflict with any Licensed Trademark, it shall promptly inform the other Party and the BMS Partner in writing of the same, giving particulars thereof. Licensor shall have the first right to commence an opposition or cancellation proceeding against such trademark application or registration. If Licensor decides not to commence an opposition or cancellation proceeding, it shall promptly inform the SNC Partnership in writing of the same and the SNC Partnership shall have the right, but not the obligation to commence an opposition or cancellation proceeding against the trademark application or registration. The cost and expenses of any such opposition or cancellation proceeding commenced by either Licensor or the SNC Partnership shall be borne by the SNC Partnership. Each Party shall execute all necessary and proper documents and take such actions as shall be appropriate to assist the other Party in commencing and prosecuting such opposition or cancellation proceeding.
8.2 Registration . The Licensed Trademarks in Territory A shall be filed and maintained in the name of Licensor. The SNC Partnership shall execute and deliver to Licensor, in such form as Licensor shall reasonably request, any and all documents which may be necessary or desirable to assist Licensor in registering or renewing the Licensed Trademarks, or in recording the SNC Partnership as a registered user of the Licensed Trademarks, if necessary.
8.3 Undertaking of the SNC Partnership . The SNC Partnership agrees not to register or attempt to register in any country in Territory A any trade name, trademark, service mark, certification mark or logo that is confusingly similar to, or that contains elements that are confusingly similar to, any Licensed Trademark.
8.4 Compliance . The SNC Partnership shall comply with all notice and marking requirements under applicable intellectual property laws and labeling requirements under applicable law that are necessary or advisable for the protection and enforcement of the Licensed Trademarks or the Licensed Patents. The SNC Partnership shall further comply
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with all applicable laws and regulations related to the manufacture, marketing, distribution and sale of Clopidogrel Products in Territory A.
8.5 Quality Standards , The SNC Partnership shall make or have made Clopidogrel Products according to the quality standards established in accordance with the New Drug Applications and MAAs (the “Quality Standards”). All promotional and packaging materials to be used in connection with Clopidogrel Products shall be submitted to Licensor so that Licensor may ensure the correct Use of the Licensed Trademarks thereon, and the SNC Partnership shall not use any such promotional or packaging materials without the prior consent of Licensor (which consent shall not be unreasonably withheld); provided, however, that such consent shall be deemed to have been given if Licensor shall not have provided Notice to the SNC Partnership of its objection to any such promotional or packaging material within fifteen (15) days after its receipt thereof.
8.6 Quality Control . If the SNC Partnership uses manufacturers other than Licensor, BMS or their respective Affiliates, the SNC Partnership shall carry out quality control tests that are customary in the pharmaceutical industry to determine that all Clopidogrel Products and packaging related thereto sold by or on behalf of the SNC Partnership conform to the Quality Standards. The SNC Partnership shall keep full and complete testing records, which shall be made available for reasonable review upon request by Licensor. Upon reasonable request, the SNC Partnership shall permit Licensor to inspect the manufacturing facilities used by or on behalf of the SNC Partnership and, during such inspection, Licensor shall have the right to make such tests as it deems necessary to ensure that the Quality Standards are being maintained.
8.7 Failure to Meet Standards . The SNC Partnership agrees that Clopidogrel Products not meeting the Quality Standards shall not be labeled or used or offered for sale under the Licensed Trademarks. Unless otherwise agreed, any products that are not Clopidogrel Products, including, without limitation, Competing Products, may not be advertised or otherwise promoted, directly or indirectly, by the SNC Partnership with any reference to the Licensed Trademarks, and the SNC Partnership shall instruct its distributors to comply with this restriction.
8.8 Patent and Trademark Infringement During the term of this Agreement, if the SNC Partnership or Licensor becomes aware of the infringement or threatened infringement of any Licensed Patent or Licensed Trademark, it shall promptly notify the other Party and the BMS Partner in writing of the same, giving particulars thereof. Licensor shall have the first right to institute an action based on such infringement or threatened infringement and shall be responsible for the conduct of such action. The SNC Partnership shall assist and cooperate with Licensor to the extent necessary in the conduct of such action, if Licensor notifies me SNC Partnership in writing that it does not propose to take action against me infringer, or if within two (2) months of notification of the infringement or threatened infringement, Licensor has taken no demonstrable action to enjoin or address such infringement or threatened infringement against the infringer, the SNC Partnership shall have the right, but not the obligation, to Institute an infringement action. The costs and expenses of any such infringement action (including, without limitation, fees of attorneys and other professionals) shall be borne by the SNC Partnership. Each Party shall execute all necessary and proper documents and take such actions as shall be appropriate to
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allow the other Party to institute and prosecute such infringement actions and Licensor shall, if required, lend its name to enable the SNC Partnership to conduct the proceedings. Any award or other consideration paid by Third Parties as a result of an infringement action (whether by way of settlement or otherwise) shall be allocated between Licensor and BMS on the basis of [*] applied to the date as of which the award or other consideration is received.
8.9 Notification of Infringement . In the event of the institution of any suit by a Third Party against either Party or any of their respective Affiliates for patent and/or trademark infringement and/or infringement of any other intellectual property rights involving Clopidogrel or Clopidogrel Products in Territory A , such Party shall promptly notify the other Party and the BMS Partner in writing of such suit Licensor shall have the first right to conduct the defense of any such suit Licensor shall notify the SNC Partnership and the BMS Partner within a reasonable amount of time after notification of the institution of such a suit if it elects not to defend such suit. If Licensor does not elect to defend such suit, the SNC Partnership shall have the right, but not the obligation, to conduct the defense of such suit. The costs and expenses of any such suit (including, without limitation, fees of attorneys and other professionals) shall be borne by the SNC Partnership. Each Party hereby agrees to assist and cooperate with the other Party, to the extent necessary, in the defense of such suit. Any award or other consideration paid by a Third Party as a result of such suit (whether by way of settlement or otherwise) shall be allocated between Licensor and BMS on the basis of [*] applied to the date as of which the award or other consideration is received.
8.10 Invalidity or Nullity . Licensor shall have the first right to conduct the defense of any suit brought by a Third Party based on the invalidity or nullity of a Licensed Patent other than an action instituted by way of counterclaim in an action for infringement of a Licensed Patent, in which case the Party conducting the infringement action shall have the right to conduct the defense. The SNC Partnership shall assist and cooperate with Licensor to the extent necessary in the defense of such suit. If Licensor notifies the SNC Partnership and the BMS Partner in writing that it does not propose to conduct the defense of such suit, or if within two (2) months of notification of such suit, Licensor has taken no demonstrable action to conduct the defense of such suit, the SNC Partnership shall have the right, but not the obligation, to conduct the defense of such suit The costs and expenses of any such action (including, without limitation, fees of attorneys and other professionals) shall be borne by the SNC Partnership. Each Party shall execute all necessary and proper documents and take such actions as shall be appropriate to allow the other Party to conduct the defense of such suit and Licensor shall, if required, lend its name to enable the SNC Partnership to conduct the proceedings. Any award or other consideration paid by a Third Party as a result of such suit (whether by way of settlement or otherwise) shall be allocated between Licensor and BMS on the basis of [*] applied to the date as of which the award or other consideration is received.
8.11 Licensor’s Representations. Licensor represents and warrants to the SNC Partnership that: (i) except as set forth in Schedule 1B attached hereto with respect to the Licensed Patents to be assigned by BMS to Sanofi, it has, and at all times during the term of this Agreement will have, the right, power and authority to license the Licensed Intellectual Property for the purposes hereunder and to perform its other obligations
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hereunder, (ii) Licensor is not aware of any asserted or unasserted claims or demand of any Third Party it believes to be enforceable against the Licensed Intellectual Property and (iii) to the best of Licensor’s knowledge and belief, the SNC Partnership’s practice of any invention claimed in the Licensed Patents or its exercise of any right to the Licensed Intellectual Property, each as contemplated by this Agreement, will not infringe any patent or other intellectual property right of any Third Party.
ARTICLE 9
TERM; TERMINATION
9.1 Term: Termination . (a) The term of this Agreement shall commence on the date hereof and shall expire on the later of (x) the 15th anniversary of the first commercial sale of a Clopidogrel Product and (y) such date as the last Licensed Patent effective in any country in Territory A shall have expired and all other de jure exclusivity available for a Clopidogrel Product shall have ended. Thereafter, the term of this Agreement may be renewed for successive three-year terms, respectively, by the mutual agreement of the Parties no later than 24 months prior to the expiration of the term then in effect.
(b) Notwithstanding the foregoing, this Agreement shall automatically expire upon the earlier of (i) the termination by both Parties of the commercialization of Clopidogrel Products throughout Territory A as the result of a Safety Problem pursuant to Section 7.04(ii) of the Alliance Support Agreement and (ii) the exercise by BMS of the special put option pursuant to Section 7.08 of the Alliance Support Agreement.
(c) This Agreement may be terminated by the mutual written consent of each of Licensor, the Sanofi Partner and the BMS Partner.
(d) Licensor shall have the right to declare termination of this Agreement upon Notice to the SNC Partnership, following the first to occur of:
(i) the BMS Partner shall have (A) voluntarily commenced any proceeding or filed any petition seeking relief under Title 11 of the United States Code, French Law No. 84-148 of March 1,1984, French Law No. 85-98 of January 25 , 1985 or any other bankruptcy, insolvency or similar law of the United States, any state thereof, the French Republic or any other applicable jurisdiction, (B) applied for or consented to the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (C) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (D) made a general assignment for the benefit of creditors of all or substantially all of its assets, (E) become unable generally, or admitted in writing its inability to, pay all or substantially all of its debts as they become due or (F) taken, corporate, action for the, purpose of effecting any of the foregoing; or
(ii) an involuntary proceeding shall have been commenced or any involuntary petition shall have been filed in a court of competent jurisdiction seeking (A) relief in respect of the BMS Partner, or of its property, under Title 11 of the
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United States Code, French Law No. 84-148 of March 1,1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States, any state thereof, the French Republic or any other applicable jurisdiction, (B) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for the BMS Partner or for all or substantially all of its property or (C) the winding-up or liquidation of the BMS Partner; and such proceeding or petition shall have continued undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall have continued unstayed and in effect for thirty (30) days,
9.2 Consequences of Termination . (a) Upon the expiration or early termination of this Agreement pursuant to Section 9.1 hereof (the “ License Termination Date ”):
(i) the terms and conditions of Section 7.07 of the Alliance Support Agreement shall apply, except in the event of early termination pursuant to Section 9.1(b) hereof;
(ii) the SNC Partnership shall cease, and shall cause each sub-licensee (if any) to cease, all activities related to the Licensed Intellectual Property; and
(iii) the SNC Partnership shall pay in full all amounts due to Licensor hereunder within ten (10) days after the final determination of Net Sales for such period, including the License Termination Date, pursuant to Sections 6.3, 6.4 and 6.6 hereof which shall survive until the full payment of all amounts under this clause (iii).
(b) In the event of the termination of the commercialization of the Clopidogrel Products in any country(ies) of Territory A pursuant to Section 7.02 of the Alliance Support Agreement:
(i) the terms and conditions of Section 9.2(a)(ii)-(iii) hereof shall apply, mutatis mutandis, with respect to such country(ies); and
(ii) all rights and licenses granted by Licensor hereunder with respect to such country (ies) shall revert to Licensor, subject to Section 7.03 of the Alliance Support Agreement.
(c) Expiration or early termination of this Agreement pursuant to this Article 9 shall be without prejudice to any rights which shall have accrued to the benefit of any Party prior to such expiration or termination. Such expiration or termination shall not relieve any Party from its obligations which are expressly indicated to survive the expiration or termination of this Agreement. All of the Parties’ rights and obligations under this subclause (c) and under Sections 6.5, 6.7, 7.1, 7.2, 9.2 and 11.2-11.4 and Article 10 hereof shall survive such expiration or termination for the applicable period.
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ARTICLE 10
CONFIDENTIALITY
All of the data, material and information exchanged by the Parties hereunder or related hereto (including, without limitation, the Licensed Intellectual Property) shall be subject to the confidentiality provisions of the Alliance Support Agreement as set forth in Section 5.03 thereof.
ARTICLE 11
MISCELLANEOUS
11.1
Notices.
All notices, requests or other communications hereunder (collectively, “
Notices
”) shall be in
writing, shall be in the English language and shall be given or made by delivery in person, by courier service, by facsimile (with receipt confirmed) or by registered or certified mail (return receipt requested with postage prepaid) to the
If to Licensor, to:
| Sanofi | ||
| 32-34, rue Marbeuf | ||
| 75008 Paris, France | ||
| Attention: | Directeur Juridique | |
| Facsimile: | [omitted] | |
| Attention: | Directeur Juridique Adjoint | |
| Facsimile: | [omitted] | |
| Attention: | Vice President, Alliance Management | |
| Facsimile: | [omitted] | |
| with a copy to: | ||
| Cleary, Gottlieb, Steen & Hamilton | ||
| 41, avenue de Friedland | ||
| 75008 Paris, France | ||
| Attention: | [omitted] | |
| Facsimile: | [omitted] | |
If to the SNC Partnership, to:
Sanofi Pharma Bristol-Myers Squibb
32-34, rue Marbeuf
75008 Paris, France
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or to such other address or facsimile number as hereafter shall be furnished as provided in this Section 11.1 by any Party hereto to the other Party hereto. All Notices given to any Party in accordance with this Section 11.1 shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile, or on the date ten (10) business days after dispatch by certified or registered mail (postage prepaid) if mailed.
11.2 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the choice of law principles that might otherwise be applied in such jurisdiction.
11.3 Dispute Resolution . All disputes between the Parties arising in connection with this Agreement (other than those specifically referred to in Section 6.6 hereof) shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce, and the number of arbitrators shall be three. Each of Licensor (acting on its own behalf and on behalf of the SNC Partnership) and the BMS Partner shall designate one arbitrator and the two so appointed arbitrators shall jointly designate the third arbitrator. If such designation is not made within fifteen days of the designation of the second party-designated arbitrator, the Secretary General of the
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International Court of Arbitration of the International Chamber of Commerce shall designate the third arbitrator. The proceedings shall be conducted in the English language in Paris, France. The president of any arbitral tribunal shall not be a citizen of either the United States of America or the French Republic.
11.4 Specific Performance . Each Party agrees that the Licensed Intellectual Property is unique, and that a failure by any Party to perform its obligations under this Agreement will result in irreparable damage, and that specific performance of such obligations may be obtained without the posting of any bond or other security; provided, however, that the powers of the arbitrators under this Section 11.4 shall be limited to enforcing the obligations provided for in this Agreement as drafted.
11.5 No Third Party Beneficiaries . This Agreement shall be binding upon and inure solely to the benefit of the Parties (including the Sanofi Partner and the BMS Partner, each in its capacity as a partner of the SNC Partnership) and permitted sub-licensees and assigns, and nothing herein, express or implied, is intended to, or shall confer upon, any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.
11.6 Assignment . (a) This Agreement may be assigned by a Party only to an Affiliate of Licensor or BMS in the event of a corporate reorganization (including an entity that becomes an Affiliate in connection with such reorganization) involving the assumption of all or substantially all of such Party’s marketing or manufacturing functions in Territory A by such Affiliate, in which event the rights may be assigned and the obligations may be delegated to such Affiliate.
(b) Notwithstanding anything to the contrary contained in subclause (a) above, this Agreement may be assigned, in whole or in part, by, or on behalf of, the SNC Partnership as a result of a termination event under either Section 7.04 or Section 7.06 of the Alliance Support Agreement or as a result of the dissolution of the SNC Partnership (other than for a Safety Problem) and in any such event shall be deemed to be amended and restated (i) to delete Section 4.2 hereof, as well as any reference to the Alliance Support Agreement, (ii) to insert those terms and conditions that are then customary in the pharmaceutical industry for an intellectual property license agreement, including, without limitation, provisions for confidentiality, indemnification and termination for material breach, as well as a diligence requirement that the assignee shall use reasonable commercial efforts to actively promote Clopidogrel Products (and the remedy for breach of such diligence requirement shall be termination of such amended and restated agreement) and (iii) to require the supplying entity(ies) to supply Clopidogrel Bulk to such assignee until, and for no longer than, the first anniversary of such assignment.
11.7 Severability . If any term or other provision hereof is held to be invalid, illegal or incapable of being enforced by applicable law or public policy, all other terms and provisions hereof shall, nevertheless remain in full force and effect so long as the economic effect or legal substance of the transactions contemplated hereby is not effected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as
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possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
11.8 Waivers and Amendments . No modification of or amendment to this Agreement shall be valid unless in a writing signed by both Parties referring specifically to this Agreement and stating the Parties’ intention to modify or amend the same. Any waiver of any term or condition of this Agreement shall be in a writing signed by the Party sought to be charged with such waiver referring specifically to the term or condition to be waived, and no such waiver shall be deemed to constitute the waiver of any other breach of the same or of any other provision hereof.
11.9 Headings . All titles and captions contained in this Agreement are for the convenience of reference only and shall not affect in any way the meaning or interpretation hereof.
11.10 Entire Agreement . This Agreement constitutes the entire agreement of the Parties with respect to the subject matter contained herein and all prior agreements relative thereto which are not contained herein are hereby terminated.
11.11 No Partnership or Joint Venture . This Agreement is not intended to create, and nothing contained herein shall be construed to create an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on or with regard to the other Party. Each Party shall be severally responsible for its own covenants, obligations and liabilities as herein provided. Other than the SNC Partnership: (i) no Party shall be under the control of, or shall be deemed to control any other Party; (ii) no Party is the legal representative, agent, joint venturer or employee of the other Party with respect to this Agreement for any purpose whatsoever, and no Party shall have the right or power to bind the other Party; and (iii) no Party has the right or authority to assume or create any obligations of any kind or to make any representation or warranty on behalf of any other Party, whether express or implied, or to bind any other Party in any respect whatsoever. The provisions of this Agreement are intended only for the regulation of relations between the Parties. This Agreement is not intended for the benefit of non-Party creditors, and no rights are granted to non-Party creditors under this Agreement.
11.12 Governing,Language . The Parties acknowledge that this Agreement may be translated into the French language. The Parties agree that this English language version shall in all respects be the controlling version of this Agreement.
11.13 Force Majeure. No Party shall be in default under this Agreement, or shall have any obligation to the other Party, if such Party is unable to perform under this Agreement by reason of act of God, fire, flood, strike, national emergency or other contingency beyond its reasonable control (a “Force Majeure”). Such Party shall give the other Party prompt notice of any interruption of performance on account of Force Majeure, and of the resumption of such performance, and shall keep the other Party informed on a current basis as to the steps being taken to remove, and the anticipated time of removal of, the circumstances resulting in such Force Majeure. Notwithstanding the foregoing, nothing in this Section 11.13 shall excuse or suspend the obligation to make any payment due under this Agreement in the manner and at the time provided herein.
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11.14 Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the day and year first written above.
| SANOFI | SANOFI PHARMA BRISTOL-MYERS SQUIBB | |||||||||||
| By: | /s/ [signature illegible] | Represented by: | ||||||||||
| Name: | SANOFI PHARMA, as Manager | |||||||||||
| Title: | ||||||||||||
| By: | /s/ [signature illegible] | |||||||||||
| Name: | ||||||||||||
| Title: | ||||||||||||
|
Witnessed by: BMS INVESTCO S.A.S., a Partner |
||||||||||||
| By: | /s/ [signature illegible] | |||||||||||
| Name: | ||||||||||||
| Title: | ||||||||||||
161956
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SCHEDULE 1A
COST OF BULK
[*] Cost of Active Substance Chemical Bulk (“Cost of Bulk”)
It will result from the addition of the various costs described hereunder.
[*]
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SCHEDULE 1B
LICENSED PATENTS
[*] [Note: Approximately fifteen pages of text are omitted.]
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SCHEDULE 1C
LICENSED TRADEMARKS
[*] [Note: Approximately eighteen pages of text are omitted.]
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SCHEDULE 1D
TERRITORY A 1
| Europe: | ||
| Albania |
the United Kingdom |
|
| Andorra |
(including England, Wales, |
|
| Austria |
Scotland, Isle of Man, Alderney, |
|
| Belgium |
Northern Ireland, Channel Islands) |
|
| Bulgaria | Former USSR (Europe) | |
| Cyprus |
Russia |
|
| The Czech Republic |
Ukraine |
|
| Slovakia |
Belorus |
|
| Denmark |
Moldavia |
|
| Finland |
Estonia |
|
| France (including Martinique, Guadeloupe, |
Latvia |
|
|
French Guyana, French Polynesia, |
Lithuania |
|
|
New Caledonia, Reunion and the |
Vatican City State | |
|
Other Overseas Departments and |
Former Yugoslavia | |
|
Terriories) |
(including Bosnia-Herzegovina, |
|
| Germany |
Croatia, Macedonia, Montenegro, |
|
| Gibraltar |
Serbia and Slovenia) |
|
| Greece | ||
| Greenland | ||
| Hungary | Africa | |
| Iceland | ||
| Irish Republic | Algeria | |
| Italy | Angola | |
| Liechtenstein | Benin | |
| Luxembourg | Botswana | |
| Malta and Gozo | Burkina Faso | |
| Monaco | Burundi | |
| Netherlands | Cameroon | |
| Norway | Cape Verde Island | |
| Poland | Central African Republic | |
| Portugal | Chad | |
| Romania | Comoros | |
| San Marino | Congo | |
| Spain | Djibouti | |
| Sweden | Egypt | |
| Switzerland | Equatorial Guinea | |
| Eritrea |
| 1 | Territory A will be deemed to include any new country created by the division, consolidation or name change of the countries listed below. |
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| Africa (continued): | Asia: | |
| Ethiopia | Afghanistan | |
| Gabon | Bahrain | |
| Gambia | Bangladesh | |
| Ghana | Bhutan | |
| Guinea | Brunei | |
| Guinea –Bissau | Cambodia | |
| Ivory Coast | China (including Tibet) | |
| Kenya |
Taiwan |
|
| Lesotho |
Macao |
|
| Liberia | Hong Kong | |
| Libya | India | |
| Madagascar | Indonesia | |
| Malawi | Israel | |
| Mali | Jordan | |
| Mauritania | South Korea | |
| Mayotte | Kuwait | |
| Mauritius, etc. | Laos | |
| Morocco | Lebanon | |
| Mozambique | Malaysia | |
| Namibia | Maldive Island | |
| Niger | Mongolia | |
| Nigeria | Myanmar | |
| Occidental Sahara | Nepal | |
| Rwanda | Oman | |
| St Helena | Pakistan | |
|
Ascension |
Philippines | |
|
Tristan de Cunha |
Qatar | |
| Sao Tome & Principe | Saudi Arabia | |
| Senegal | Singapore | |
| Seychelles | Sri Lanka | |
| Sierra Leone | Syria | |
| Somalia | Thailand | |
| South Africa | Turkey | |
| Spanish Presidios: | United Arab Emirates | |
|
Ceuta |
Former USSR (Asia) | |
|
Melilla |
RSFSR (Asia) |
|
| Sudan |
Armenia (Hyastan) |
|
| Swaziland |
Azerbaidjan |
|
| Tanzania |
Georgia |
|
| Togo |
Turkmenistan |
|
| Tunisia |
Uzbekistan |
|
| Uganda |
Tadjikistan |
|
| Zaire |
Kazakhstan |
|
| Zambia |
Kirghizia |
|
| Zimbabwe | ||
| Vietnam | ||
| Yemen |
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Exhibit 10.9
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CLOPIDOGREL
INTELLECTUAL PROPERTY LICENSE
AND
SUPPLY AGREEMENT
between
SANOFI
and
BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING PARTNERSHIP
dated as of January 1, 1997
TABLE OF CONTENTS
| ARTICLE 1 | ||||
| DEFINITIONS | ||||
|
SECTION 1.1 |
Defined Terms | 2 | ||
|
SECTION 1.2 |
Additional Defined Terms | 6 | ||
| ARTICLE 2 | ||||
| GRANT OF LICENSE | ||||
|
SECTION 2.1 |
License Grant | 7 | ||
|
SECTION 2.2 |
No Transfer | 7 | ||
|
SECTION 2.3 |
No Implicit Rights | 7 | ||
|
SECTION 2.4 |
Goodwill | 7 | ||
|
SECTION 2.5 |
Improvements | 7 | ||
| ARTICLE 3 | ||||
| SUPPLY OF ACTIVE SUBSTANCE CHEMICAL BULK | ||||
|
SECTION 3.1 |
Supply during the Exclusive Supply Period | 8 | ||
|
SECTION 3.2 |
Supply after the Exclusive Supply Period | 8 | ||
|
SECTION 3.3 |
Terms and Conditions of Supply | 8 | ||
|
SECTION 3.4 |
Samples | 8 | ||
|
SECTION 3.5 |
Manufacturing Improvements | 9 | ||
| ARTICLE 4 | ||||
| SUB-LICENSE | ||||
|
SECTION 4.1 |
General Sub-License | 9 | ||
|
SECTION 4.2 |
Sub-License for Alliance Agreements | 9 | ||
|
SECTION 4.3 |
Termination of Sub-License | 9 | ||
| ARTICLE 5 | ||||
| PROVISION OF DOCUMENTS | ||||
| 10 | ||||
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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ARTICLE 6 CONSIDERATION |
||||
|
SECTION 6.1 |
Discoverer’s Remuneration | 10 | ||
|
SECTION 6.2 |
Adjustment to the Discovery Royalty | 10 | ||
|
SECTION 6.3 |
Payment | 11 | ||
|
SECTION 6.4 |
Method of Payment | 11 | ||
|
SECTION 6.5 |
Records | 11 | ||
|
SECTION 6.6 |
Payment Reports | 11 | ||
|
SECTION 6.7 |
Taxes | 12 | ||
| ARTICLE 7 | ||||
| ADVERSE EVENT REPORTING | ||||
|
SECTION 7.1 |
Adverse Event Reporting | 12 | ||
|
SECTION 7.2 |
Reporting Procedure | 12 | ||
|
ARTICLE 8 TRADEMARKS; PATENTS; INFRINGEMENT |
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|
SECTION 8.1 |
Maintenance | 13 | ||
|
SECTION 8.2 |
Registration | 13 | ||
|
SECTION 8.3 |
Undertaking of the Partnership | 13 | ||
|
SECTION 8.4 |
Compliance | 13 | ||
|
SECTION 8.5 |
Quality Standards | 14 | ||
|
SECTION 8.6 |
Quality Control | 14 | ||
|
SECTION 8.7 |
Failure to Meet Standards | 14 | ||
|
SECTION 8.8 |
Patent and Trademark Infringement | 14 | ||
|
SECTION 8.9 |
Notification of Infringement | 15 | ||
|
SECTION 8.10 |
Invalidity or Nullity | 15 | ||
|
SECTION 8.11 |
Licensor’s Representations | 15 | ||
|
ARTICLE 9 TERM; TERMINATION |
||||
|
SECTION 9.1 |
Term; Termination | 16 | ||
|
SECTION 9.2 |
Consequences of Termination | 17 | ||
|
ARTICLE 10 CONFIDENTIALITY |
||||
| 18 | ||||
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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ARTICLE 11 MISCELLANEOUS |
||||
|
SECTION 11.1 |
Notices | 18 | ||
|
SECTION 11.2 |
Governing Law | 19 | ||
|
SECTION 11.3 |
Dispute Resolution | 19 | ||
|
SECTION 11.4 |
Specific Performance | 20 | ||
|
SECTION 11.5 |
No Third Party Beneficiaries | 20 | ||
|
SECTION 11.6 |
Assignment | 20 | ||
|
SECTION 11.7 |
Severability | 20 | ||
|
SECTION 11.8 |
Waivers and Amendments | 21 | ||
|
SECTION 11.9 |
Headings | 21 | ||
|
SECTION 11.10 |
Entire Agreement | 21 | ||
|
SECTION 11.11 |
No Partnership or Joint Venture | 21 | ||
|
SECTION 11.12 |
Governing Language | 21 | ||
|
SECTION 11.13 |
Force Majeure | 21 | ||
|
SECTION 11.14 |
Counterparts | 22 | ||
| SCHEDULES | ||
| SCHEDULE 1A | COST OF BULK | |
| SCHEDULE 1B | LICENSED PATENTS | |
| SCHEDULE 1C | LICENSED TRADEMARKS | |
| SCHEDULE 1D | TERRITORY B |
,
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
This CLOPIDOGREL INTELLECTUAL PROPERTY LICENSE AND SUPPLY AGREEMENT (this “ Agreement ”) dated as of January 1, 1997 is hereby made by and between:
Sanofi, a société anonyme organized and existing under the laws of the French Republic (“ Licensor ”); and
Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership, a Delaware partnership (the “ Partnership ” and, together with Licensor, the “ Parties ” and, individually, each a “ Party ”).
W I T N E S S E T H :
WHEREAS, Licensor has discovered and patented a new chemical entity known as SR 25990C with the international non-proprietary name Clopidogrel Hydrogenosulphate (“ Clopidogrel ”). with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;
WHEREAS, Licensor, Bristol-Myers Squibb Company, a Delaware corporation (“ BMS ”), and Sterling Winthrop, inc., a Delaware corporation (“ Sterling ”) entered into a Development Agreement dated July 29 , 1993 (the “ Development Agreement ”) for, among other things, the development of Clopidogrel;
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30, 1994 among Eastman Kodak Company, Licensor and Sterling, Licensor acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Development Agreement;
WHEREAS, Licensor and BMS have entered into a Territory B Alliance Support Agreement dated as of the date hereof (the “ Alliance Support Agreement ”) and have formed through their indirect wholly owned subsidiaries the Partnership pursuant to the partnership agreement dated as of the date hereof (the “ Partnership Agreement ”) for, among other things, the commercialization of Clopidogrel Products in Territory B (as such terms are defined herein);
WHEREAS, Licensor, BMS and the Partnership have entered into a Product Know-How License Agreement for Territory B dated as of the date hereof (the “ Know-How License Agreement ”), pursuant to which Licensor and BMS have granted to the Partnership a license to use certain know-how for the commercialization of Clopidogrel Products and which was developed by Licensor and BMS under the Development Agreement;
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
2 .
WHEREAS, Licensor owns or has acquired independent of BMS certain intellectual property, including certain patents, trademarks and know-how, for the commercialization of Clopidogrel Products in Territory B;
WHEREAS, Licensor is willing to grant to the Partnership, and the Partnership is willing to accept, a license under such intellectual property for the commercialization of Clopidogrel Products in Territory B on the terms and conditions set forth herein;
WHEREAS, Licensor and its Affiliates have the exclusive right, subject to the terms and conditions set forth in this Agreement, to provide the active substance chemical bulk containing Clopidogrel (the “ Clopidogrel Bulk ”) that is required for the development, clinical testing and manufacturing of Clopidogrel Products in Territory B; and
WHEREAS, Licensor, either directly or through its Affiliates, is willing to sell to the Partnership, and the Partnership is willing to purchase on an exclusive basis from Licensor or its Affiliates, the Clopidogrel Bulk on the terms and conditions set forth in this Agreement
NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions set forth herein, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms . As used in this Agreement, the following terms shall have the following meanings:
“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Clopidogrel Product of which any Party or any of its Affiliates becomes aware, whether or not considered drug related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.
“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however, that, with respect to Licensor, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Licensor that would be an Affiliate of Licensor solely by reason of its being controlled by Elf Aquitaine. For the purposes of this definition, “ control ” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person of to veto any material decision relating to the management or policies of a Person, in each case whether through the ownership of voting securities, by contract or otherwise, (b) the beneficial ownership, directly or indirectly, of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
3 .
ownership of at least 50% of the partnership interests of a general partnership. The Parties confirm that each Co-Promotion Entity (as defined in the Alliance Support Agreement) in Territory B shall be considered to be an Affiliate of BMS.
“ Alliance Agreements ” has the meaning set forth in the Alliance Support Agreement.
“ Alliance Agreements ” has the meaning set forth in the Alliance Support Agreement.
“ BMS Partner ” means Bristol-Myers Squibb Company Investco, Inc., a partner in the Partnership.
“ Clopidogrel Intellectual Property ” means the Clopidogrel Know-How and that part of the Licensed Patents relating to Clopidogrel.
“ Clopidogrel Know-How ” means any and all technical data, information, material and other know-how that relate to the manufacturing and purification of the Clopidogrel Bulk, including, without limitation, any analytical methodology, chemical, procedures, protocols, techniques and results of experimentation and testing, solely owned, developed or acquired by Licensor and its Affiliates as of the date hereof.
“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof.
“ Competing Product ” means any product that [*], but which is not [*] set forth in Schedule [*] or selected for [*] by [*].
“ Cost of Bulk ” means (i) during the Exclusive Supply Period, [*] of the Clopidogrel Bulk used in the manufacture of Clopidogrel Products, as more fully described in Schedule 1A attached hereto, and (ii) following the Exclusive Supply Period, [*] for the supply of the Clopidogrel Bulk after the Manufacturing and Sourcing Committee shall have assured the supply of such Clopidogrel Bulk.
“ Development Committee ” has the meaning set forth in the Know-How License Agreement.
“ Exclusive Supply Period ” means the period of time during which Licensor, either directly or through its Affiliates, is the exclusive supplier of the Clopidogrel Bulk to the Partnership.
“ Finance Committee ” has the meaning set forth in the Alliance Support Agreement.
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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“ Functional Committee ” means any Alliance Functional Committee (as such term is defined in the Alliance Support Agreement) or any License Functional Committee (as such term is defined in the Know-How License Agreement).
“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.
“ License Steering Committee ” has the meaning set forth in the Know-How License Agreement.
“ Licensed IntellectuaI Property ” means the Clopidogrel Intellectual Property and the Product Intellectual Property.
“ Licensed Know-How ” means the Clopidogrel Know-How and the Product Know-How.
“ Licensed Patents ” means the patents and patent applications of Licensor and its Affiliates existing on the date hereof relating to Clopidogrel and Clopidogrel Products, including, without limitation, those listed on Schedule 1B attached hereto and all reissues, renewals, divisions, continuations, continuations-in-part, reexaminations, patent term restorations, patents of additions and extensions thereof.
“ Licensed Trademarks ” means the trademarks and registered trademarks and applications for registered trademarks listed on Schedule 1C attached hereto, and the trademarks, the registered trademarks and applications for registered trademarks selected by the Marketing Working Group.
“ Line Extension ” has the meaning set forth in the Know-How License Agreement.
“ Loss of Exclusivity ” means the loss of exclusivity in any country in Territory B upon the occurrence of both of the following conditions: (i) a Clopidogrel Product shall have lost its marketing exclusivity (whether by virtue of compulsory license under, or expiration, invalidity or unenforceability of, the patents covering such Clopidogrel Product, loss or expiration of any exclusivity conferred de facto or de jure by any statutory marketing or data exclusivity or any other cause) and (ii) one or more Competing Products shall have been legally marketed in such country by one or more Third Parties.
“ MAA ” means any marketing authorizations, licenses, approvals, registrations, certificates and exemptions submitted to or granted by or pending with any Governmental Authority for the purpose of allowing the manufacture, production, supply, marketing, distribution or sale of any Clopidogrel Product in a particular country.
“ Manufacturing and Sourcing Committee ” has the meaning set forth in the Alliance Support Agreement.
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“ Market Penetration ” means, with respect to one or more Competing Products in any given country in Territory B, the number of units of such Competing Products sold in such country, expressed as a percentage of the sum of (i) the [*] with respect to which [*] constitute [*] and (ii) the [*], in each case over a period of [*], as reported by [*].
“ Marketing Entity ” has the meaning set forth in the Partnership Agreement.
“ Marketing Working Group ” has the meaning set forth in the Know-How License Agreement.
“ Net Sales ” means for any given period and with respect to any Clopidogrel Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any transfers between any Party and its Affiliates solely for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outstanding or the return of such Clopidogrel Product.
“ New Drug Application ” means the application required to be filed with the relevant Governmental Authority in any country in order to obtain approval to market commercially any Clopidogrel Product in such country.
“ New Indication ” has the meaning set forth in the Know-How License Agreement.
“ Person ” means any individual, partnership, firm, corporation, société anonyme, société en nom collectif, société en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.
“ Product Intellectual Property ” means the Product Know-How, the Licensed Trademarks and that part of the Licensed Patents relating to Clopidogrel Products.
“ Product Know-How ” means any and all technical data, information, material and other know-how that relate to the formulation of Clopidogrel Products, including, without limitation, any analytical methodology, chemical, toxicological, pharmacological and clinical data, formulae, procedures, protocols, techniques and results of experimentation and testing, solely owned, developed or acquired by Licensor as of the date hereof.
“ Safety Problem ” has the meaning set forth in the Alliance Support Agreement.
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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“ Sanofi Partner ” means Sanofi Pharmaceuticals, Inc., a partner in the Partnership.
“ Serious Adverse Event ” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.
“ Territory B ” means the countries and geographic areas described and listed in Schedule 1D attached hereto.
“ Third Party ” means a Person who or which is neither a Party nor an Affiliate of a Party.
1.2 Additional Defined Terms . The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:
|
Defined Term |
Section Where Defined | |
|
Agreement |
Preamble | |
|
Alliance Support Agreement |
Recitals | |
|
BMS |
Recitals | |
|
Clopidogrel |
Recitals | |
|
Clopidogrel Bulk |
Recitals | |
|
Development Agreement |
Recitals | |
|
Discovery Royalty |
6.1 | |
|
Discoverer’s Remuneration |
6.1 | |
|
Force Majeure |
11.13 | |
|
Know-How License Agreement |
Recitals | |
|
License Termination Date |
9.2(a) | |
|
Licensor |
Preamble | |
|
Notices |
11.1 | |
|
Partnership Agreement |
Recitals | |
|
Partnership |
Preamble | |
|
Party |
Preamble | |
|
Payment Report |
6.3 | |
|
Quality Standards |
8.5 | |
|
Reporting Party |
7.2 | |
|
Sterling |
Recitals | |
|
Supply Payment |
6.1 |
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ARTICLE 2
GRANT OF LICENSE
2.1 Licence Grant . Subject to the terms and conditions of this Agreement, Licensor hereby grants to the Partnership, and the Partnership hereby accepts:
(i) an exclusive license for the term hereof under the Product Intellectual Property (a) to make, have made, sell, offer for sale and import Clopidogrel Products in Territory B, (b) to develop Clopidogrel Products for Territory B, including, without limitation, New Indications and Line. Extensions thereof, and (c) with the prior approval of the Manufacturing and Sourcing Committee, to make, have made and export the Clopidogrel Products outside of Territory B; provided however, that such exclusivity shall not apply to Sanofi and BMS with respect to the Ongoing Studies (as such term is defined in the Know-How License Agreement), which are being conducted by Sanofi and BMS under the Development Agreement; and
(ii) after the Exclusive Supply Period, an exclusive license for the term hereof under the Clopidogrel Intellectual Property solely for the purpose of making and having Clopidogrel made to produce Clopidogrel Products for Territory B by the entity(ies) approved by Licensor (which approval shall not be unreasonably withheld), which shall include the entity(ies) selected by the Manufacturing and Sourcing Committee.
2.2 No Transfer . The Partnership hereby acknowledges and agrees that this Agreement does not, and shall not be deemed to, transfer any proprietary ownership interest whatsoever to the Partnership in or to the Licensed Intellectual Property. Nothing herein shall give the Partnership any right, title or interest in or to any of the Licensed Intellectual Property, except the rights granted pursuant to this Agreement.
2.3 No Implicit Rights . All of the rights granted hereunder are explicitly stated herein and nothing in this Agreement shall be construed to grant any implied rights whatsoever to the Partnership in or to the Licensed Intellectual Property.
2.4 Goodwill . The Partnership hereby acknowledges that all goodwill connected with the Licensed Trademarks shall inure to the benefit of Licensor, and the Partnership shall not take any action that may be detrimental to such goodwill.
2.5 Improvements . Any new or useful invention, process or improvement, patentable or unpatentable, relating to the formulation of any Clopidogrel Product under the Clopidogrel Intellectual Property developed or acquired by the Partnership during the term hereof shall be the property of the Partnership, which shall have all ownership rights thereto.
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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ARTICLE 3
SUPPLY OF ACTIVE SUBSTANCE CHEMICAL BULK
3.1 Supply during the Exclusive Supply Period . During the Exclusive Supply Period, Licensor shall supply, or shall cause one or more of its Affiliates to supply, as exclusive supplier to the Partnership, the Clopidogrel Bulk required for the development clinical testing and manufacturing of Clopidogrel Products for Territory B. The price to be paid by the Partnership for the Clopidogrel Bulk shall be based on the Cost of Bulk and shall be paid to Licensor pursuant to Article 6 hereof.
3.2 Supply after the Exclusive Supply Period . (a) The Exclusive Supply Period shall end sixty (60) days following the earlier of:
(x) Licensor shall have given the Partnership Notice that Licensor’s or its Affiliates’ [*] in Territory B (or in such other geographic area as [*] may identify from time to time) represents or appears likely to represent more than [*] of Net Sales of Clopidogrel Products in Territory B (or in such other geographic area), computed over the [*] immediately preceding the date of such Notice; or
(y) Competing Products shall have reached, in the aggregate, [*] in Territory B as determined by the [*] (computed over [*] immediately preceding the date of such determination).
(b) Promptly after delivery of the Notice or determination described in subclause (a) above, the Manufacturing and Sourcing Committee shall ensure the supply of the Clopidogrel Bulk from Licensor, BMS, their respective Affiliates and/or qualified Third Parties and, for the period after the Exclusive Supply Period, shall award, to the extent practicable, the right to supply the Clopidogrel Bulk to the Persons) that will supply the Clopidogrel Bulk (i) for the lowest price, (ii) in substantially identical quality and quantity to the Clopidogrel Bulk previously supplied by Licensor or its Affiliates and (iii) pursuant to a supply commitment of [*]. Notwithstanding the foregoing, upon and after the occurrence of the event described in sub-clause (y) above, Licensor shall continue to be the exclusive supplier thereof for so long as Licensor offers to supply the Clopidogrel Bulk, either directly or through its Affiliates, at a price that is [*] with respect thereto.
3.3 Terms and Conditions of Supply . The Parties shall agree on the other terms and conditions for the supply of the Clopidogrel Bulk during the Exclusive Supply Period, including, without limitation, the payment mechanism thereof.
3.4 Samples . Clopidogrel Products and the Clopidogrel Bulk used as promotional samples shall be sold on a basis to be determined by the Finance Committee.
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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3.5 Manufacturing Improvements. (a) For so long as Licensor, directly or through its Affiliates, is the exclusive supplier of the Clopidogrel Bulk pursuant to Section 3.1 hereof, BMS shall notify Licensor of any proposal to improve the manufacturing process used for the Clopidogrel Bulk and shall offer Licensor, by written notice, the right to participate in the development of such improvement by financing [*] of all development costs incurred after the receipt of such notice.
(b) If Licensor elects to participate in the development of such improvement within ninety (90) days after receipt of such notice and such development results in the issuance of a process patent, (i) the Parties and BMS shall amend and restate this Agreement so that BMS and Licensor shall share equally the economic benefit resulting from such patent and (ii) such patent shall be registered in the name of (x) BMS (who shall grant a license to Licensor with respect to such patent), if the patented process has applications other than in the manufacture of the Clopidogrel Bulk or (y) Licensor, if the patented process has applications only in the manufacture of the Clopidogrel Bulk.
(c) If Licensor does not elect to participate in such development within ninety (90) days after receipt of such notice and the proposed process has applications only in the manufacture of the Clopidogrel Bulk, then BMS shall not undertake any development work on such manufacturing process (whether directly, by licensing, or by transferring its know-how to, a Third Party) until termination of the Exclusive Supply Period.
ARTICLE 4
SUB-LICENSE
4.1 General Sub-License. Except as permitted under Section 4.2 hereof, the Partnership shall not, without the prior written consent of Licensor, sub-license any of its rights and obligations under this Agreement; provided, however, that if the representatives of Licensor on any Functional Committee, the Alliance Strategic Committee or the License Steering Committee consensually agree to sub-license any of the Partnership’s rights or obligations hereunder, such agreement shall be deemed to be Licensor’s consent for the purposes of this Section 4.1. No such sub-license shall relieve the Partnership of its obligations hereunder.
4.2 Sub-License for Alliance Agreements. The Partnership shall sub-license those of its rights and obligations under this Agreement, to any Affiliate of Licensor or BMS that is a party to any Alliance Agreement, solely for the purposes of permitting such Affiliate to perform its obligations under such Alliance Agreement.
4.3 Termination of Sub-License . Licensor shall have the right to require the Partnership to terminate any sub-license hereunder in the event that the sub-licensee fails to comply in any material respect with, or takes any action contrary to, the terms of such sub-license or any decision made by any Functional Committee, the Alliance Strategic Committee or the License Steering Committee, and such sub-licensee has failed to remedy such non-compliance within thirty (30) days from its receipt of written notice thereof from Licensor or the Partnership.
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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ARTICLE 5
PROVISION OF DOCUMENTS
As promptly as practicable following the date hereof, Licensor shall make available to the Partnership copies of all relevant data, studies and materials comprising Licensed Know-How in Licensor’s possession that shall be available as of such date.
ARTICLE 6
CONSIDERATION
6.1 Discoverer’s Remuneration. In consideration of the rights and licenses granted and the services provided hereunder, the Partnership shall pay, or shall cause to be paid, directly to Licensor for the term hereof an aggregate amount equal to [*] of Net Sales of Clopidogrel Products in Territory B (the “Discoverer’s Remuneration”), which shall be subject to adjustment in accordance with Section 6.2 hereof. The Discoverer’s Remuneration shall include (i) a discovery royalty (the “ Discovery Royalty ”) and (ii) during the Exclusive Supply Period, payment for the supply of the Clopidogrel Bulk calculated pursuant to Section 3.1 hereof (the “ Supply Payment ”). For each country in Territory B, the Partnership shall determine the breakdown of the Discoverer’s Remuneration into the Discovery Royalty and the Supply Payment.
6.2 Adjustment to the Discovery Royalty. (a) Following the Exclusive Supply Period, the Discoverer’s Remuneration shall cease to include the Supply Payment and shall thereafter consist solely of the Discovery Royalty. The Discovery Royalty shall then be reset, and shall subsequently be subject to periodic positive or negative adjustments (but not more than once every two (2) consecutive calendar quarters), as described below:
The rate of the Discovery Royalty shall be [*] of Net Sales of Clopidogrel Products in Territory B, [*] an amount equal to [*], which shall be determined as follows:
[*]
(the Cost of Bulk being computed over the [*] immediately preceding the calculation date and expressed as a percentage of Net Sales); provided, however, that, except as provided in paragraph (b) of this Section 6.2 , the Discovery Royalty shall in no event be reduced below [*] of Net Sales of Clopidogrel Products in Territory B.
(b) From and after the Loss of Exclusivity of a Clopidogrel Product in any given country in Territory B, Licensor shall receive a trademark royalty of [*] of Net Sales of such Clopidogrel Product in such country, if and for so long as the Licensed Trademarks are used by a Marketing Entity in such country, and any [*] in the rate of the Discovery Royalty attributable to such country remaining after [*] (if applicable) shall be [*] as follows: upon the Loss of Exclusivity, such balance shall be [*] by [*], and thereafter shall be further [*], on the basis of [*]:
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
11 .
[*]
(c) The Loss of Exclusivity shall be measured by the Marketing Working Group on a quarterly basis.
6.3 Payment For the term of this Agreement, the Partnership shall pay or cause to be paid to Licensor all amounts due hereunder on a quarterly basis within sixty (60) days of the end of each calendar quarter. Each such payment shall be accompanied by an accurate statement of the amount of Net Sales of Clopidogrel Products during such calendar quarter, the calculation of all payments to be made to Licensor for such calendar quarter and a report on Competing Products and on any actual or potential Market Penetration (each a “ Payment Report ”).
6.4 Method of Payment . (a) All payments to be made hereunder shall be made by wire transfer in immediately available funds, and shall be made in US dollars to the bank account of Licensor as notified to the Partnership, unless the Parties agree to settle such payments through other means.
(b) Amounts due from the Partnership to Licensor in respect of sales based on a currency other than US dollars shall be converted to US dollars using the methodology determined for such purpose by the Finance Committee.
6.5 Records. The Partnership shall maintain (i) books, records and accounts which accurately and fairly reflect, in reasonable detail, the Net Sales of Clopidogrel Products and (ii) an adequate system of internal accounting controls. All books, records and accounts referred to in clause (i) above shall be maintained for not less than three (3) years, or for such longer period if and as required by applicable law, following the date of the sales constituting the Net Sales and shall be made available for reasonable review upon request by Licensor.
6.6 Payment Reports. (a) At the request of Licensor, the Partnership shall, and shall if applicable cause its sub-licensees to, permit Licensor or an independent, certified public accountant not having any significant relation to either BMS or Licensor, as appointed by Licensor, at reasonable times and upon reasonable notice, to examine the books and records of the Partnership as may be necessary to (i) determine, with respect to any calendar quarter ending not more than two (2) years prior to the related request, the correctness of any Payment Report or payment made under this Agreement or any Alliance Agreement or (ii) obtain information as to the amount payable for any such calendar quarter in the case of failure on the part of the Partnership to report or pay pursuant to this Agreement or on the part
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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of any party to any Alliance Agreement; provided, however, that Licensor shall not have the right to make such audit request more than once every twelve (12) calendar months. The results of any such audit shall be promptly made available to BMS, Licensor and the Partnership.
(b) Licensor shall bear the full cost and expense of any such audit, unless such audit discloses that the amount due to Licensor is more than the amount paid by [*] of the amount due, in which case BMS shall bear the full cost and expense of such audit.
(c) The determination by an independent, certified public accountant pursuant to this Section 6.6 as to the amount due and payable by the Partnership shall be conclusive and binding on the Parties hereto.
6.7 Taxes. All payments due under this Agreement shall be paid in full without deduction, except for taxes (if any) required to be withheld by applicable law in Territory B with respect to such payments. In the event the Partnership is required under applicable law to withhold any tax to the revenue authorities in any country in Territory B regarding any payment to Licensor, the amount of such tax shall be deducted by the Partnership and paid to the relevant revenue authority, and the Partnership shall notify Licensor thereof and shall promptly furnish to Licensor all copies of any tax certificate or other documentation evidencing such withholding. In the event that any such tax shall subsequently be found to be due, payment of such tax shall be the responsibility of Licensor.
ARTICLE 7
ADVERSE EVENT REPORTING
7.1 Adverse Event Reporting . Licensor and the Partnership shall each ensure that, in the marketing of the Clopidogrel Products in Territory B, it and each of its respective Affiliates record, investigate, summarize and review all Adverse Events and Serious Adverse Events. Each Party shall require that its Affiliates, sub-licensees and distributors adhere to all requirements of local law which relate to the reporting and investigation of Adverse Events and Serious Adverse Events, and each Party shall require that its Affiliates, sub-licensees and distributors keep such Party informed of such experiences.
7.2 Reporting Procedure. In order that each Party may be fully informed of these experiences, each Party shall report to:
Sanofi Pharma
82, avenue Raspail
94255 Gentilly Cedex, France
Attention: [omitted]
Facsimile: [omitted]
all Adverse Events and Serious Adverse Events anywhere in the world; provided, however, that Serious Adverse Events shall be reported to the Person set forth above within three (3) working days of a Party’s becoming aware of such an event (a “ Reporting Party ”) and shall
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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be reported by facsimile as provided above. The Reporting Party shall report all other Adverse Events on a monthly basis Each Party shall promptly notify the Person set forth above of any complaint received by it in sufficient detail and in sufficient time to allow the Person set forth above to comply with any and all regulatory requirements imposed upon it in any country Each Party shall also advise the Person set forth above of any regulatory developments (e g proposed recalls labeling and other registrational dossier changes) affecting any Clopidogrel Product in any country in Territory B Each Party shall have the right to review and/or request copies of any and all information and reporting forms generated or received by the Person set forth above with respect to Adverse Events and Serious Adverse Events These procedures may be modified from time to time by the Regulatory Committee (as such term is defined in the Know-How License Agreement)
ARTICLE 8
TRADEMARKS; PATENTS; INFRINGEMENT
8.1 Maintenance Licensor shall maintain in full force and effect all Licensed Patents and Licensed Trademarks for the term of this Agreement and shall bear all costs and expenses related thereto In the event that Licensor or the Partnership becomes aware of a registration for or an application to register a trademark which it believes is reasonably likely to conflict with any Licensed Trademark, it shall promptly inform the other Party in writing of the same, giving particulars thereof Licensor shall have the first right to commence an opposition or cancellation proceeding against such trademark application or registration If Licensor decides not to commence an opposition or cancellation proceeding it shall promptly inform the Partnership in writing of the same and the Partnership shall have the right, but not the obligation to commence an opposition or cancellation proceeding against the trademark application or registration The cost and expenses of any such opposition or cancellation proceeding commenced by either Licensor or the Partnership shall be borne by the Partnership Each Party shall execute all necessary and proper documents and take such actions as shall be appropriate to assist the other Party in commencing and prosecuting such opposition or cancellation proceeding
8.2 Registration The Licensed Trademarks in Territory B shall be filed and maintained in the name of Licensor The Partnership shall execute and deliver to Licensor, in such form as Licensor shall reasonably request, any and all documents which may be necessary or desirable to assist Licensor in registering or renewing the Licensed Trademarks, or in recording the Partnership as a registered user of the Licensed Trademarks if necessary
8.3 Undertaking of the Partnership The Partnership agrees not to register or attempt to register in any country in Territory B any trade name, trademark, service mark certification mark or logo that is confusingly similar to, or that contains elements that are confusingly similar to any Licensed Trademark
8.4 Compliance The Partnership shall comply with all notice and marking requirements under applicable intellectual property laws and labeling requirements under applicable law that are necessary or advisable for the protection and enforcement of the
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Licensed Trademarks or the Licensed Patents. The Partnership shall further comply with all applicable laws and regulations related to the manufacture, marketing, distribution and sale of Clopidogrel Products in Territory B.
8.5 Quality Standards. The Partnership shall make or have made Clopidogrel Products according to the quality standards established in accordance with the New Drug Applications and MAAs (the “ Quality Standards ”). Al1 promotional and packaging materials to be used in connection with Clopidogrel Products shall be submitted to Licensor so that Licensor may ensure the correct use of the Licensed Trademarks thereon, and the Partnership shall not use any such promotional or packaging materials without the prior consent of Licensor (which consent shall not be unreasonably withheld); provided, however, that such consent shall be deemed to have been given if Licensor shall not have provided Notice to the Partnership of its objection to any such promotional or packaging material within fifteen (15) days after its receipt thereof.
8.6 Quality Control . If the Partnership uses manufacturers other than Licensor, BMS or their respective Affiliates, the Partnership shall carry out quality control tests that are customary in the pharmaceutical industry to determine that all Clopidogrel Products and packaging related thereto sold by or on behalf of the Partnership conform to the Quality Standards. The Partnership shall keep full and complete testing records, which shall be made available for reasonable review upon request by Licensor. Upon reasonable request, the Partnership shall permit Licensor to inspect the manufacturing facilities used by or on behalf of the Partnership and, during such inspection, Licensor shall have the right to make such tests as it deems necessary to ensure that the Quality Standards are being maintained.
8.7 Failure to Meet Standards. The Partnership agrees that Clopidogrel Products not meeting the Quality Standards shall not be labeled or used or offered for sale under the Licensed Trademarks. Unless otherwise agreed, any products that are not Clopidogrel Products, including, without limitation, Competing Products, may not be advertised or otherwise promoted, directly or indirectly, by the Partnership with any reference to the Licensed Trademarks, and the Partnership shall instruct its distributors to comply with this restriction.
8.8 Patent and Trademark Infringement . During the term of this Agreement, if the Partnership or Licensor becomes aware of the infringement or threatened infringement of any Licensed Patent or Licensed Trademark, it shall promptly notify the other Party in writing of the same, giving particulars thereof. Licensor shall have the first right to institute an action based on such infringement or threatened infringement and shall be responsible for the conduct of such action. The Partnership shall assist and cooperate with Licensor to the extent necessary in the conduct of such action. If Licensor notifies the Partnership in writing that it does not propose to take action against the infringer, or if within two (2) months of notification of the infringement or threatened infringement, Licensor has taken no demonstrable action to enjoin or address such infringement or threatened infringement against the infringer, the Partnership shall have the right, but not the obligation, to institute an infringement action. The costs and expenses of any such infringement action (including, without limitation, fees of attorneys and other professionals) shall be borne by the Partnership. Each Party shall execute all necessary and proper documents and take such actions as shall be appropriate to allow the other Party to institute and prosecute such
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infringement actions and Licensor shall, if required, lend its name to enable the Partnership to conduct the proceedings. Any award or other consideration paid by Third Parties as a result of an infringement action (whether by way of settlement or otherwise) shall be allocated between Licensor and BMS on the basis of [*] applied to the date as of which the award or other consideration is received.
8.9 Notification of Infringement . In the event of the institution of any suit by a Third Party against either Party or any of their respective Affiliates for patent and/or trademark infringement and/or infringement of any other intellectual property rights involving Clopidogrel or Clopidogrel Products in Territory B, such Party shall promptly notify the other Party in writing of such suit. Licensor shall have the first right to conduct the defense of any such suit. Licensor shall notify the Partnership within a reasonable amount of time after notification of the institution of such a suit if it elects not to defend such suit. If Licensor does not elect to defend such suit, the Partnership shall have the right, but not the obligation, to conduct the defense of such suit. The costs and expenses of any such suit (including, without limitation, fees of attorneys and other professionals) shall be borne by the Partnership. Each Party hereby agrees to assist and cooperate with the other Party, to the extent necessary, in the defense of such suit. Any award or other consideration paid by a Third Party as a result of such suit (whether by way of settlement or otherwise) shall be allocated between Licensor and BMS on the basis [*] applied to the date as of which the award or other consideration is received.
8.10 Invalidity or Nullity . Licensor shall have the first right to conduct the defense of any suit brought by a Third Party based on the invalidity or nullity of a Licensed Patent other than an action instituted by way of counterclaim in an action for infringement of a Licensed Patent, in which case the Party conducting the infringement action shall have the right to conduct the defense. The Partnership shall assist and cooperate with Licensor to the extent necessary in the defense of such suit. If Licensor notifies the Partnership in writing that it does not propose to conduct the defense of such suit, or if within two (2) months of notification of such suit, Licensor has taken no demonstrable action to conduct the defense of such suit, the Partnership shall have the right, but not the obligation, to conduct the defense of such suit. The costs and expenses of any such action (including, without limitation, fees of attorneys and other professionals) shall be borne by the Partnership. Each Party shall execute all necessary and proper documents and take such actions as shall be appropriate to allow the other Party to conduct the defense of such suit and Licensor shall, if required, lend its name to enable the Partnership to conduct the proceedings. Any award or other consideration paid by a Third Party as a result of such suit (whether by way of settlement or otherwise) shall be allocated between Licensor and BMS on the basis of [*] applied to the date as of which the award or other consideration is received.
8.11 Licensor’s Representations. Licensor represents and warrants to the Partnership that: (i) except as set forth in Schedule 1B attached hereto with respect to the Licensed Patents to be assigned by BMS to Sanofi, it has, and at all times during the term of this Agreement will have, the right, power and authority to license the Licensed Intellectual Property for the purposes hereunder and to perform its other obligations hereunder,
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(ii) Licensor is not aware of any asserted or unasserted claims or demand of any Third Party it believes to be enforceable against the Licensed Intellectual Property and (iii) to the best of Licensor’s knowledge and belief, the Partnership’s practice of any invention claimed in the Licensed Patents or its exercise of any right to the Licensed Intellectual Property, each as contemplated by this Agreement, will not infringe any patent or other intellectual property right of any Third Party.
ARTICLE 9
TERM; TERMINATION
9.1 Term; Termination. (a) The term of this Agreement shall commence on the date hereof and shall expire on the later of (x) the 15th anniversary of the first commercial sale of a Clopidogrel Product and (y) such date as the last Licensed Patent effective in any country in Territory B shall have expired and all other de jure exclusivity available for a Clopidogrel Product shall have ended. Thereafter, the term of this Agreement may be renewed for successive three-year terms, respectively, by the mutual agreement of the Parties no later than 24 months prior to the expiration of the term then in effect.
(b) Notwithstanding the foregoing, this Agreement shall automatically expire upon the earlier of (i) the termination by both Parties of the commercialization of Clopidogrel Products throughout Territory B as the result of a Safety Problem pursuant to Section 7.04 (iii) of the Alliance Support Agreement and (ii) the exercise by BMS of the special put option pursuant to Section 7.08 of the Alliance Support Agreement.
(c) This Agreement may be terminated by the mutual written consent of each of Licensor, the Sanofi Partner and the BMS Partner.
(d) Licensor shall have the right to declare termination of this Agreement upon Notice to the Partnership, following the first to occur of:
(i) the BMS Partner shall have (A) voluntarily commenced any proceeding or filed any petition seeking relief under Title 11 of the United States Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States, any state thereof, the French Republic or any other applicable jurisdiction, (B) applied for or consented to the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (C) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (D) made a general assignment for the benefit of creditors of all or substantially all of its assets, (E) become usable generally, or admitted in writing its inability to, pay all or substantially all of its debts as they become due or (F) taken corporate action for the purpose of effecting any of the foregoing; or
(ii) an involuntary proceeding shall have been commenced or any involuntary petition shall have been filed in a court of competent jurisdiction seeking (A) relief in respect of the BMS Partner, or of its property, under Title 11 of the
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17 .
United States Code, French Law No. 84-148 of March 1 , 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States, any state thereof, the French Republic or any other applicable jurisdiction, (B) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for the BMS Partner or for all or substantially all of its property or (C) the winding-up or liquidation of the BMS Partner; and such proceeding or petition shall have continued undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall have continued unstayed and in effect for thirty (30) days.
9.2 Consequences of Termination . (a) Upon the expiration or early termination of this Agreement pursuant to Section 9.1 hereof (the “ License Termination Date ”):
(i) the terms and conditions of Section 7.07 of the Alliance Support Agreement shall apply, except in the event of early termination pursuant to Section 9. l(b) hereof;
(ii) the Partnership shall cease, and shall cause each sub-licensee (if any) to cease, all activities related to the Licensed Intellectual Property; and
(iii) the Partnership shall pay in full all amounts due to Licensor hereunder within ten (10) days after the final determination of Net Sales for such period, including the License Termination Date, pursuant to Sections 6.3, 6.4 and 6.6 hereof which shall survive until the full payment of all amounts under this clause (iii).
(b) In the event of the termination of the commercialization of the Clopidogrel Products in any country(ies) of Territory B pursuant to Section 7.02 of the Alliance Support Agreement:
(i) the terms and conditions of Section 9.2(a)(ii)-(iii) hereof shall apply, mutatis mutandis, with respect to such country(ies); and
(ii) all rights and licenses granted by Licensor hereunder with respect to such country(ies) shall revert to Licensor, subject to Section 7.03 of the Alliance Support Agreement.
(c) Expiration or early termination of this Agreement pursuant to this Article 9 shall be without prejudice to any rights which shall have accrued to the benefit of any Party prior to such expiration or termination. Such expiration or termination shall not relieve any Party from its obligations which are expressly indicated to survive the expiration or termination of this Agreement. All of the Parties’ rights and obligations under this subclause (c) and under Sections 6.5, 6.7, 7.1, 7.2, 9.2 and 11.2-11.4 and Article 10 hereof shall survive such expiration or termination for the applicable period.
.
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ARTICLE 10
CONFIDENTIALITY
All of the data, material and information exchanged by the Parties hereunder or related hereto (including, without limitation, the Licensed Intellectual Property) shall be subject to the confidentiality provisions of the Alliance Support Agreement as set forth in Section 5.03 thereof.
ARTICLE 11
MISCELLANEOUS
11.1
Notices
. All notices, requests or other communications hereunder (collectively, “
Notices
”) shall be in
writing, shall be in the English language and shall be given or made by delivery in person, by courier service, by facsimile (with receipt confirmed) or by registered or certified mail (return receipt requested, with postage prepaid) to the
If to Licensor, to:
| Sanofi | ||
| 32-34, rue Marbeuf | ||
| 75008 Paris, France | ||
| Attention: | Directeur Juridique | |
| Facsimile: | [omitted] | |
| Attention: | Directeur Juridique Adjoint | |
| Facsimile: | [omitted] | |
| Attention | Vice President, Alliance Management | |
| Facsimile: | [omitted] | |
| with a copy to: | ||
| Cleary, Gottlieb, Steen & Hamilton | ||
| 41, avenue de Friedland | ||
| 75008 Paris, France | ||
| Attention: | [omitted] | |
| Facsimile: | [omitted] | |
If to the Partnership, to:
| Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership | ||
| P.O. Box 4000 | ||
| Route 206 & Province Line Road | ||
| Princeton, NJ 08543-4000, USA | ||
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19 .
or to such other address or facsimile number as hereafter shall be furnished as provided in this Section 11.1 by any Party hereto to the other Party hereto. All Notices given to any Party in accordance with this Section 11.1 shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile, or on the date ten (10) business days after dispatch by certified or registered mail (postage prepaid) if mailed.
11.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the choice of law principles that might otherwise be applied in such jurisdiction.
11.3 Dispute Resolution. All disputes between the Parties arising in connection with this Agreement (other than those specifically referred to in Section 6.6 hereof) shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce, and the number of arbitrators shall be three. Each of Licensor and the Partnership shall designate one arbitrator and the two so appointed arbitrators shall jointly designate the third arbitrator. If such designation is not made within fifteen days of the designation of the second party-designated arbitrator, the Secretary General of the International Court of Arbitration of the International Chamber of Commerce
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20 .
shall designate the third arbitrator. The proceedings shall be conducted in the English language in Paris, France. The president of any arbitral tribunal shall not be a citizen of either the United States of America or the French Republic.
11.4 Specific Performance. Each Party agrees that the Licensed Intellectual Property is unique, and that a failure by any Party to perform its obligations under this Agreement will result in irreparable damage, and that specific performance of such obligations may be obtained without the posting of any bond or other security; provided, however, that the powers of the arbitrators under this Section 11.4 shall be limited to enforcing the obligations provided for in this Agreement as drafted.
11.5 No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the Parties (including the Sanofi Partner and the BMS Partner, each in its capacity as a partner of the Partnership) and permitted sub-licensees and assigns, and nothing herein, express or implied, is intended to, or shall confer upon, any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.
11.6 Assignment. (a) This Agreement may be assigned by a Party only to an Affiliate of Licensor or BMS in the event of a corporate reorganization (including an entity that becomes an Affiliate in connection with such reorganization) involving the assumption of all or substantially all of such Party’s marketing or manufacturing functions in Territory B by such Affiliate, in which event the rights may be assigned and the obligations may be delegated to such Affiliate.
(b) Notwithstanding anything to the contrary contained in subclause (a) above, this Agreement may be assigned, in whole or in part, by, or on behalf of, the Partnership as a result of a termination event under either Section 7.04 or Section 7.06 of the Alliance Support Agreement or as a result of the dissolution of the Partnership (other than for a Safely Problem) and in any such event shall be deemed to be amended and restated (i) to delete Section 4.2 hereof, as well as any reference to the Alliance Support Agreement, (ii) to insert those terms and conditions that are then customary in the pharmaceutical industry for an intellectual property license agreement, including, without limitation, provisions for confidentiality, indemnification and termination for material breach, as well as a diligence requirement that the assignee shall use reasonable commercial efforts to actively promote Clopidogrel Products (and the remedy for breach of such diligence requirement shall be termination of such amended and restated agreement) and (iii) to-require the supplying entity(ies) to supply Clopidogrel Bulk to such assignee until, and for no longer than, the first anniversary of such assignment.
11.7 Severability. If any term or other provision hereof is held to be invalid, illegal or incapable of being enforced by applicable law or public policy, all other terms and provisions hereof shall nevertheless remain in full force and effect so long as the economic effect or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
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21 .
11.8 Waivers and Amendments. No modification of or amendment to this Agreement shall be valid unless in a writing signed by both Parties referring specifically to this Agreement and stating the Parties’ intention to modify or amend the same. Any waiver of any term or condition of this Agreement shall be in a writing signed by the Party sought to be charged with such waiver referring specifically to the term or condition to be waived, and no such waiver shall be deemed to constitute the waiver of any other breach of the same or of any other provision hereof.
11.9 Headings. All titles and captions contained in this Agreement are for the convenience of reference only and shall not affect in any way the meaning or interpretation hereof.
11.10 Entire Agreement This Agreement constitutes the entire agreement of the Parties with respect to the subject matter contained herein and all prior agreement relative thereto which are not contained herein are hereby terminated.
11.11 No Partnership or Joint Venture. This Agreement is not intended to create, and nothing contained herein shall be construed to create an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on or with regard to the other Party. Each Party shall be severally responsible for its own covenants, obligations and liabilities as herein provided. Other than the Partnership: (i) no Party shall be under the control of, or shall be deemed to control any other Party; (ii) no Party is the legal representative, agent, joint venturer or employee of the other Party with respect to this Agreement for any purpose whatsoever, and no Party shall have the right or power to bind the other Party; and (iii) no Party has the right or authority to assume or create any obligations of any kind or to make any representation or warranty on behalf of any other Party, whether express or implied, or to bind any other Party in any respect whatsoever. The provisions of this Agreement are intended only for the regulation of relations between the Parties. This Agreement is not intended for the benefit of non-Party creditors, and no rights are granted to non-Party creditors under this Agreement.
11.12 Governing Language. The Parties acknowledge that this Agreement may be translated into the French language. The Parties agree that this English language version shall in all respects be the controlling version of this Agreement.
11.13 Force Majeure . No Party shall be in default under this Agreement, or shall have any obligation to the other Party, if such Party is unable to perform under this Agreement by reason of act of God, fire, flood, strike, national emergency or other contingency beyond its reasonable control (a “ Force Majeure ”). Such Party shall give the other Party prompt notice of any interruption of performance on account of Force Majeure, and of the resumption of such performance, and shall keep the other Party informed on a current basis as to the steps being taken to remove, and the anticipated time of removal of, the circumstances resulting in such Force Majeure. Notwithstanding the foregoing, nothing in this Section 11.13 shall excuse or suspend the obligation to make any payment due under this Agreement in the manner and at the time provided herein.
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11.14 Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the day and year first written above.
| SANOFI |
BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING PARTNERSHIP |
|||||||
| By: | /s/ [signature illegible] | Represented by: | ||||||
| Name: | BRISTOL-MYERS SQUIBB | |||||||
| Title: | INVESTCO INC., as General Partner | |||||||
| By: | /s/ [signature illegible] | |||||||
| Name: | ||||||||
| Title: | ||||||||
| Witnessed by: | ||||||||
| SANOFI PHARMACEUTICALS, INC., a Partner | ||||||||
| By: | /s/ [signature illegible] | |||||||
| Name: | ||||||||
| Title: | ||||||||
171024
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SCHEDULE 1A
COST OF BULK
[*] Cost of Active Substance Chemical Bulk (‘Cost of Bulk’)
It will result from the addition of the various costs described hereunder
[*]
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SCHEDULE 1B
LICENSED PATENTS
[*] [Note: Approximately nine pages of text are omitted.]
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 1C
LICENSED TRADEMARKS
[*] [Note: Approximately eight pages of text are omitted.]
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SCHEDULE 1D
TERRITORY B 1
| North America: | Oceania: | |
| Canada | Australia | |
| Mexico | Fiji | |
| United States of America | Micronesia | |
|
(including Puerto Rico, US Virgin |
(including Caroline Kiribati |
|
|
Islands, Guam, American Samoa) |
Mariana and Marshall Islands) |
|
| Nauru | ||
| New Zealand | ||
| Central America and the West Indies: | Papua New Guinea | |
| Pitcaim Islands | ||
| Anguilla | Samoa (non-US) | |
| Antigua | Solomon Islands | |
| Aruba | Tonga | |
| Bahamas | Tuvalu | |
| Barbados | Vanuatu | |
| Belize | ||
| Bermuda | ||
| Cayman Islands | South America: | |
| Costa Rica | ||
| Dominica | Argentina | |
| Dominican Republic | Bolivia | |
| Grenada | Brazil | |
| Guatemala | Chile | |
| Haiti | Colombia | |
| Honduras | Ecuador | |
| Jamaica | Falkland Islands | |
| Montserrat | Guyana | |
| Netherlands Antilles | Paraguay | |
| Nicaragua | Peru | |
| Panama. | Surinam | |
| St Kitts-Nevis | Uruguay | |
| St Lucia | Venezuela | |
| St Vincent and the Grenadines | ||
| El Salvador | ||
| Trinidad and Tobago | ||
| Turks and Caicos Islands | ||
| Virgin Islands (British) |
| 1 |
Territory B will be deemed to include any country created by the division, consolidation or name change of the countries listed below |
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Exhibit 10.10
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PRODUCT KNOW-HOW LICENSE AGREEMENT
among
SANOFI
BRISTOL-MYERS SQUIBB COMPANY
and
SANOFI PHARMA BRISTOL-MYERS SQUIBB
dated as of January 1,1997
| TABLE OF CONTENTS | ||||
|
ARTICLE 1 DEFINITIONS |
||||
|
SECTION 1.1 |
Defined Terms | 2 | ||
|
SECTION 1.2 |
Additional Defined Terms | 5 | ||
|
ARTICLE 2 GRANT OF LICENSE |
||||
|
SECTION 2.1 |
License Grant | 5 | ||
|
SECTION 2.2 |
No Transfer | 6 | ||
|
SECTION 2.3 |
No Implicit Rights | 6 | ||
|
SECTION 2.4 |
Corporate Name Authorization | 6 | ||
|
SECTION 2.5 |
Goodwill | 6 | ||
|
SECTION 2.6 |
Representations and Warranties | 6 | ||
|
SECTION 2.7 |
Improvements | 6 | ||
|
ARTICLE 3 SUB-LICENSE |
||||
|
SECTION 3.1 |
General Sub-License | 7 | ||
|
SECTION 3.2 |
Sub-License for Alliance Agreements | 7 | ||
|
SECTION 3.3 |
Termination of Sub-License | 7 | ||
|
ARTICLE 4 PROVISION OF DOCUMENTS |
||||
|
SECTION 4.1 |
Initial Exchange | 7 | ||
|
SECTION 4.2 |
Continuing Exchange | 7 | ||
|
ARTICLE 5 CONSIDERATION |
||||
|
SECTION 5.1 |
Development Royalty | 7 | ||
|
SECTION 5.2 |
Payment | 8 | ||
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SECTION 5.3 |
Method of Payment | 8 | ||
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SECTION 5.4 |
Records | 8 | ||
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SECTION 5.5 |
Payment Reports | 8 | ||
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SECTION 5.6 |
Taxes | 9 | ||
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ARTICLE 6 LICENSE STEERING COMMITTEE |
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SECTION 6.1 |
License Steering Committee | 9 | ||
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SECTION 6.2 |
License Functional Committees | 10 | ||
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SECTION 6.3 |
Marketing Working Group | 10 | ||
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SECTION 6.4 |
Development Committee | 10 | ||
|
SECTION 6.5 |
Regulatory Committee | 10 | ||
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SECTION 6.6 |
Committee Composition and Decision Making | 11 | ||
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SECTION 6.7 |
Committee Dispute Resolution | 11 | ||
|
SECTION 6.8 |
Cross-Territory Issues | 11 | ||
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SECTION 6.9 |
Delegation | 12 | ||
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ARTICLE 7 NEW INDICATION OR LINE EXTENSION SOLE RISK SCENARIO |
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SECTION 7.1 |
Sole Development | 12 | ||
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SECTION 7.2 |
Commercialization of Resulting Products | 12 | ||
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SECTION 7.3 |
[*] | 12 | ||
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SECTION 7.4 |
Election to Participate in Development | 13 | ||
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SECTION 7.5 |
Period of Exclusivity | 13 | ||
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SECTION 7.6 |
Safety and Other Problems | 13 | ||
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ARTICLE 8 ADVERSE EVENT REPORTING |
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|
SECTION 8.1 |
Adverse Event Reporting | 14 | ||
|
SECTION 8.2 |
Reporting Procedure | 14 | ||
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ARTICLE 9 TERM; TERMINATION |
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SECTION 9.1 |
Term; Termination | 15 | ||
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SECTION 9.2 |
Consequences of Termination | 16 | ||
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ARTICLE 10 CONFIDENTIALITY |
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| 16 | ||||
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ARTICLE 11 MISCELLANEOUS |
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SECTION 11.1 |
Notices | 17 | ||
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SECTION 11.2 |
Governing Law | 19 | ||
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SECTION 11.3 |
Dispute Resolution | 19 | ||
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SECTION 11.4 |
Specific Performance | 19 | ||
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SECTION 11.5 |
No Third Party Beneficiaries | 19 | ||
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SECTION 11.6 |
Assignment | 19 | ||
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SECTION 11.7 |
Severability | 20 | ||
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SECTION 11.8 |
Waivers and Amendments | 20 | ||
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SECTION 11.9 |
Headings | 20 | ||
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SECTION 11.10 |
Entire Agreement | 20 | ||
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SECTION 11.11 |
No Partnership or Joint Venture | 20 | ||
|
SECTION 11.12 |
Governing Language | 20 | ||
|
SECTION 11.13 |
Counterparts | 21 | ||
SCHEDULES
| SCHEDULE 1A | TERRITORY A | |
| SCHEDULE 1B | TERRITORY B |
EXHIBITS
| EXHIBIT 6.1-A | RECOMMENDED PRODUCT PROFILES, CLAIM STRUCTURES AND DOSAGES FOR FILE SUBMISSIONS | |
| EXHIBIT 6.1-B | CORE POSITIONING STRATEGIES / KEY MESSAGES | |
| EXHIBIT 6.1-C | CENTRALLY FUNDED PROGRAMS AND EXPENSES | |
| EXHIBIT 6.1-D | OVERALL PRICING GUIDELINES | |
| EXHIBIT 6.1-E | PHASES IIIB STUDIES, DIFFERENTIATION PROGRAMS AND STUDIES FOR NEW INDICATIONS AND LINE EXTENSIONS | |
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This PRODUCT KNOW-HOW LICENSE AGREEMENT (this “ Agreement ”) dated as of January 1, 1997 is hereby made by and among:
Sanofi, a société anonyme organized and existing under the laws of the French Republic (“ Sanofi ”);
Bristol-Myers Squibb Company, a corporation organized and existing under the laws of the State of Delaware, United States of America (“BMS”); and
Sanofi Pharma Bristol-Myers Squibb, a société en nom collectif organized and existing under the laws of the French Republic (the “ SNC Partnership ” and, together with Sanofi and BMS, the “ Parties” and, individually, each a “ Party” ).
WITNESSETH :
WHEREAS, Sanofi has discovered and patented two new chemical entities, one known as SR 47436 with the international non-proprietary name Irbesartan (“ Irbesartan ”) and one known as SR 25990C with the international non-proprietary name Clopidogrel Hydrogenosulphate (“ Clopidogrel ”), with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;
WHEREAS, Sanofi, BMS and Sterling Winthrop Inc., a Delaware corporation (“ Sterling ”) entered into a Development Agreement dated July 29, 1993 (the “ Development Agreement ”) for, among other things, the development of Irbesartan and Clopidogrel;
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30, 1994 among Eastman Kodak Company, Sanofi and Sterling, Sanofi acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Development Agreement;
WHEREAS, Sanofi and BMS have entered into a Territory A Alliance Support Agreement dated as of the date hereof (the “ Alliance Support Agreement ”) and have formed through their indirect wholly owned subsidiaries the SNC Partnership pursuant to the statuts to be amended and restated as of June 6, 1997 (the “ SNC By-Laws ”) for, among other things, the commercialization of the Products in Territory A (as such terms are defined herein);
WHEREAS, Sanofi and the SNC Partnership have entered into an Irbesartan Intellectual Property License Agreement (the “ Irbesartan License Agreement ”) and a Clopidogrel Intellectual Property License and Supply Agreement dated as of the date hereof, pursuant to which Sanofi has granted a license to use certain patents, trademarks and know-how for the commercialization of the Products in Territory A that neither were developed with nor are owned by BMS;
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WHEREAS, Sanofi and BMS have developed certain know-how under the Development Agreement for the commercialization of the Products in Territory A and, as a result, each has an undivided one-half direct ownership interest in the Developed Know-How (as such term is defined herein); and
WHEREAS, Sanofi and BMS are willing to grant to the SNC Partnership, and the SNC Partnership is willing to accept, a license under the Developed Know-How for the commercialization of the Products in Territory A on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions set forth herein, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall have the following meanings:
“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Product of which any Party or any of its Affiliates becomes aware, whether or not considered drug related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.
“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however, that, with respect to Sanofi, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Sanofi that would be an Affiliate of Sanofi solely by reason of its being controlled by Elf Aquitaine. For the purposes of this definition, “ control ” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person or to veto any material decision relating to the management or policies of a Person, in each case whether through the ownership of voting securities, by contract or otherwise, (b) the beneficial ownership, directly or indirectly, of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial ownership of at least 50% of the partnership interests of a general partnership. The Parties confirm that each Co-Promotion Entity (as defined in the Alliance Support Agreement) in Territory A shall be considered to be an Affiliate of Sanofi.
“ Alliance Agreements ” has the meaning set forth in the Alliance Support Agreement.
“ Alliance Strategic Committee ” has the meaning set forth in the Alliance Support Agreement.
“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof.
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“ Competing Product ” means, with respect to any Product, any other product that [*], but which is not [*] set forth in Schedule [*] or selected for [*] by [*].
“ Developed Know-How ” means any and all technical data, information, material and other know-how that relate to the formulation of the Products, including, without limitation, any analytical methodology, chemical, toxicological, pharmacological and clinical data, formulae, procedures, protocols, techniques and results of experimentation and testing, developed by Sanofi and BMS under the Development Agreement.
“Finance Committee ” has the meaning set forth in the Alliance Support Agreement.
“Functional Committee ” means any Alliance Functional Committee (as such term is defined in the Alliance Support Agreement) or any License Functional Committee.
“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.
“ Irbesartan Product ” means the product or products having as an active ingredient Irbesartan or any salt, ester, metabolite or pro-drug thereof.
“ Lead ” means the right to initiate proposals and implement, or cause the implementation of, recommendations and decisions.
“ Line Extension ” means, for each Product and with respect to development conducted on or after January 1, 1997, any new dosage or new form of administration of such Product.
“ MAAs ” means, with respect to each Product, any marketing authorizations, licenses, approvals, registrations, certificates and exemptions submitted to or granted by or pending with any Governmental Authority for the purpose of allowing the manufacture, production, supply, marketing, distribution or sale of such Product in a particular country.
“ Major A Countries ” means France, Germany, Italy, Spain and the United Kingdom, and any other country in Territory A representing at least [*]of aggregate Net Sales of both Products in Territory A, as determined from time to time by [*] .
“ Manufacturing and Sourcing Committee ” has the meaning set forth in the Alliance Support Agreement
“ Marketing Entity ” has the meaning set forth under the definition of Entité de Marketing in the Réglement Intérieur.
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“ Net Sales ” means for any given period and with respect to any Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any transfers between any Party and its Affiliates solely for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outdating or the return of such Product.
“ New Indication ” means, for each Product and with respect to development conducted on or after January 1, 1997, any new therapeutic use or application of such Product.
“ Non-Promotional Countries ” means the countries in Territory A where the utilization of personal promotion by sales personnel is not a significant factor in obtaining product usage and achieving sales or where selling is by tender or comparable non-promotional method of sale, as determined from time to time by the Finance Committee.
“ Person ” means any individual, partnership, firm, corporation, société anonyme, société en nom collectif, société en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.
“ Product ” means a Clopidogrel Product or an Irbesartan Product and “ Products ” means both a Clopidogrel Product and an Irbesartan Product.
“ Réglement Intérieur ” means the réglement intérieur to be entered into between BMS Investco S. A.S. and Sanofi Participations with effect as of the date hereof.
“ Safety Problem ” has the meaning set forth in the Alliance Support Agreement.
“ Sanofi Pharma ” means Sanofi Pharma, a société anonyme organized and existing under the laws of the French Republic.
“ Serious Adverse Event ” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.
“ Territory ” means either Territory A or Territory B and “ Territories ” means both Territory A and Territory B.
“ Territory A ” means the countries and geographic areas described and listed in Schedule 1A attached hereto.
“ Territory B ” means the countries and geographic areas described and listed in Schedule 1B attached hereto.
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“ Third Party ” means a Person who or which is neither a Party nor an Affiliate of a Party.
1.2 Additional Defined Terms . The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:
|
Defined Term |
Section Where Defined |
|
|
Agreement |
Preamble | |
|
Alliance Support Agreement |
Recitals | |
|
BMS |
Preamble | |
|
Clopidogrel |
Recitals | |
|
Development Agreement |
Recitals | |
|
Development Committee |
6.2 | |
|
Development Royalty |
5.1 | |
|
Irbesartan |
Recitals | |
|
Irbesartan License Agreement |
Recitals | |
|
License Functional Committees |
6.2 | |
|
License Steering Committee |
6.1 | |
|
License Strategic Decisions |
6.1 | |
|
License Termination Date |
9.2 | |
|
Marketing Working Group |
6.2 | |
|
Notices |
11.1 | |
|
Ongoing Studies |
2.1 | |
|
Other Party |
7.1 | |
|
Party |
Preamble | |
|
Payment Report |
5.2 | |
|
Proposing Party |
7.1 | |
|
Regulatory Committee |
6.2 | |
|
Reporting Party |
8.2 | |
|
Sanofi |
Preamble | |
|
SNC By-Laws |
Recitals | |
|
SNC Partnership |
Preamble | |
|
Sterling |
Recitals |
ARTICLE 2
GRANT OF LICENSE
2.1 License Grant . Subject to the terms and conditions of this Agreement, Sanofi and BMS each separately grant to the SNC Partnership an exclusive license for the term hereof in their respective undivided one-half direct ownership interest in the Developed Know-How, and the SNC Partnership hereby accepts, an exclusive license for the term hereof under the Developed Know-How (i) to make, have made, sell, offer for sale and import the Products in Territory A, (ii) subject to Article 7 hereof, to develop Irbesartan Products and Clopidogrel Products for Territory A, including, without limitation, New Indications and Line Extensions thereof, and (iii) with the prior approval of the Manufacturing and Sourcing Committee, to make, have made, and export the Products outside of Territory A; provided, however, that such
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exclusivity shall not apply to Sanofi and BMS with respect to any ongoing studies that are being conducted by Sanofi and BMS under the Development Agreement (the “Ongoing Studies”).
2.2 No Transfer. The SNC Partnership hereby acknowledges and agrees that this Agreement does not, and shall not be deemed to, transfer any proprietary ownership interest whatsoever to the SNC Partnership in or to the Developed Know-How. Nothing herein shall give the SNC Partnership any right, title or interest in or to any of the Developed Know-How, except the rights granted pursuant to this Agreement.
2.3 No Implicit Rights. All of the rights granted hereunder are explicitly stated herein and nothing in this Agreement shall be construed to grant any implied rights whatsoever to the SNC Partnership in or to the Developed Know-How.
2.4 Corporate Name Authorization. The SNC Partnership shall he permitted to use both the Sanofi and BMS corporate names, on a [*] basis for the term hereof, solely (i) as part of its corporate name and (ii) in connection with any promotional, advertising or marketing necessary or desirable for the commercialization of the Products in Territory A in accordance with this Agreement and the Alliance Support Agreement. The grant of rights pursuant to this Section 2.4 shall automatically terminate upon the earlier of (i) the expiration or early termination of this Agreement and (ii) the expiration or early termination of the Alliance Support Agreement.
2.5 Goodwill. The SNC Partnership hereby acknowledges that all goodwill connected with the Sanofi and BMS corporate names shall inure to the benefit of Sanofi and BMS, as the case may be, and the SNC Partnership shall not take any action that may be detrimental to such goodwill.
2.6 Representations and Warranties. Each of BMS and Sanofi represents and warrants to the other Parties hereto that: (i) it has, and will at all times during the term of this Agreement have, the right, power and authority to license the Developed Know-How and to perform its other obligations hereunder, (ii) it is not aware of any asserted or unasserted claims or demand of any Third Party it believes to be enforceable against the Developed Know-How and (iii) to the best of such Party’s knowledge and belief, the SNC Partnership’s exercise of any right to the Developed Know-How, as contemplated by this Agreement, will not infringe any intellectual property right of any Third Party.
2.7 Improvements. Any new or useful invention, process or improvement, patentable or unpatentable, relating to the formulation of any Product under the Developed Know-How developed or acquired by the SNC Partnership during the term hereof, shall be the property of the SNC Partnership which shall have all ownership rights thereto, subject to Article 7 hereof.
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ARTICLE 3
SUB-LICENSE
3.1 General Sub-License . Except as permitted under Section 3.2 hereof, the SNC Partnership shall not, without the prior written consent of both Sanofi and BMS, sub -license any of its rights and obligations under this Agreement; provided, however , that if the representatives of Sanofi and BMS on any Functional Committee, the Alliance Strategic Committee or the License Steering Committee, consensually agree to sub-license any of the SNC Partnership’s rights or obligations hereunder, such agreement shall be deemed to be the consent of Sanofi and BMS for the purposes of this Section 3.1. No such sub-license shall relieve the SNC Partnership of its obligations hereunder.
3.2 Sub-License for Alliance Agreements. The SNC Partnership shall sub-license those of its rights and obligations under this Agreement, to any Affiliate of Sanofi or BMS that is a party to any Alliance Agreement, solely for the purposes of permitting such Affiliate to perform its obligations under such Alliance Agreement.
3.3 Termination of Sub-License. Sanofi and BMS each shall have the right to require the SNC Partnership to terminate any sub-license of rights hereunder in the event that the sub-licensee fails to comply in any material respect with, or takes any action contrary to, the terms of such sub-license or any decision made by any Functional Committee, the Alliance Strategic Committee or the License Steering Committee, and such sub-licensee has failed to remedy such non-compliance within thirty (30) days from its receipt of written notice thereof from Sanofi, BMS or the SNC Partnership.
ARTICLE 4
PROVISION OF DOCUMENTS
4.1 Initial Exchange . As promptly as practicable following the date hereof, each of Sanofi and BMS shall make available to the SNC Partnership copies of all relevant data, studies and materials comprising Developed Know-How in such Party’s possession that shall be available as of such date.
4.2 Continuing Exchange . During the term of this Agreement, each of Sanofi and BMS shall make available to the SNC Partnership, from time to time, copies of all relevant data, studies and materials comprising subsequently developed or acquired Developed Know-How in such Party’s possession as soon as practicable after the development or acquisition thereof.
ARTICLE 5
CONSIDERATION
5.1 Development Royalty . In consideration of the rights and licenses granted hereunder, the SNC Partnership shall pay, or shall cause to be paid, for the term of this Agreement the following aggregate amounts as a development royalty (each a “ Development Royalty ”):
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(i) To [*], an amount equal to [*] of Net Sales of Irbesartan Products in Territory A; and
(ii) To [*], an amount based on Net Sales of Clopidogrel Products in Territory A, which shall be determined by [*] no later than sixty (60) days after the first commercial sale of any Clopidogrel Product in Territory A.
5.2 Payment. For the term of this Agreement, the SNC Partnership shall pay or cause to be paid to each of Sanofi and BMS all amounts due hereunder on a quarterly basis within sixty (60) days of the end of each calendar quarter. Each such payment shall be accompanied by an accurate statement of the amount of Net Sales of the Products, broken down Product-by-Product, during such calendar quarter and the calculation of all payments to be made to each of Sanofi and BMS for such calendar quarter (each a “ Payment Report ”).
5.3 Method of Payment. (a) All payments to be made hereunder shall be made by wire transfer in immediately available funds, and shall be made in French francs to the respective bank accounts of Sanofi and BMS as notified to the SNC Partnership by the relevant Party, unless the Parties agree to settle such payments through other means.
(b) Amounts due from the SNC Partnership to BMS or Sanofi in respect of sales based on a currency other than French francs shall be converted to French francs using the methodology determined for such purpose by the Finance Committee.
5.4 Records . The SNC Partnership shall maintain (i) books, records and accounts which accurately and fairly reflect, in reasonable detail, the Net Sales of the Products and (ii) an adequate system of internal accounting controls. All books, records and accounts referred to in clause (i) above shall be maintained for not less than three (3) years, or for such longer period if and as required by applicable law, following the date of the sales constituting the Net Sales and shall be made available for reasonable review upon request by Sanofi and/or BMS.
5.5 Payment Reports. (a) At the request of BMS, the SNC Partnership shall, and shall if applicable cause its sub-licensees to, permit BMS or an independent, certified public accountant not having any significant relation to either BMS or Sanofi, as appointed by BMS, at reasonable times and upon reasonable notice, to examine the books and records of the SNC Partnership as may be necessary to (i) determine, with respect to any calendar quarter ending not more than two (2) years prior to the related request, the correctness of any Payment Report or payment made under this Agreement or any Alliance Agreement or (ii) obtain information as to the amount payable for any such calendar quarter in the case of failure on the part of the SNC Partnership to report or pay pursuant to this Agreement or on the part of any party to any’ Alliance Agreement; provided, however, that BMS shall not have the right to make such audit request more than once every twelve (12) calendar months. The results of any such audit shall be promptly made available to BMS, Sanofi and the SNC Partnership.
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(b) BMS shall bear the full cost and expense of any such audit, unless such audit discloses that the amount due to BMS is more than the amount paid by [*] of the amount due, in which case Sanofi shall bear the full cost and expense of such audit.
(c) The determination by an independent, certified public accountant pursuant to this Section 5.5 as to the amount due and payable by the SNC Partnership shall be conclusive and binding on the Parties hereto.
5.6 Taxes. All payments due under this Agreement shall be paid in full without deduction, except for taxes (if any) required to be withheld by applicable law in Territory A with respect to such payments. In the event the SNC Partnership is required under applicable law to withhold any tax to the revenue authorities in any country in Territory A regarding any payment to Sanofi and/or BMS, the amount of such tax shall be deducted by the SNC Partnership and paid to the relevant revenue authority, and the SNC Partnership shall notify the relevant Party thereof and shall promptly furnish to such Party all copies of any tax certificate or other documentation evidencing such withholding. In the event that any such tax shall subsequently be found to be due, payment of such tax shall be the responsibility of Sanofi or BMS, as the case may be.
ARTICLE 6
LICENSE STEERING COMMITTEE
6.1 License Steering Committee. In order to ensure the proper use of the Developed Know-How by the SNC Partnership for the commercialization and further development of the Products, Sanofi and BMS shall be represented by a License Steering Committee (the “ License Steering Committee ”), which shall be responsible for the following decisions (collectively, the “ License Strategic Decisions ”):
(i) recommended Product profiles, claim structures and dosages for file submissions using the form set forth in Exhibit 6.1 -A attached hereto;
(ii) the core positioning strategies and key messages with respect to the commercialization of the Products using the form set forth in Exhibit 6.1-B attached hereto;
(iii) approval of the centrally funded budget for certain programs and expenses using the form set forth in Exhibit 6.1 -C attached hereto;
(iv) overall pricing guidelines using the form set forth in Exhibit 6.1-D attached hereto; and
(v) overall strategy and expenses for Phase IIIB studies, differentiation programs and studies for New Indications and Line Extensions using the form set forth in Exhibit 6 . 1-E attached hereto.
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6.2 License Functional Committees. Subject to the general oversight and authority of the License Steering Committee, the following functional committees (the “ License Functional Committees”) are hereby established and shall be maintained and empowered as hereinafter provided: (i) a marketing working group (the “ Marketing Working Group ”), (ii) a development committee (the “ Development Committee”) and (iii) a regulatory committee (the “ Regulatory Committee ”).
6.3 Marketing Working Group. (a) The Marketing Working Group shall be responsible for (i) developing and seeking approval for the centrally funded budget for certain programs and expenses using the form set forth in Exhibit 6.1-C attached hereto, (ii) implementing such centrally funded budget, (iii) allocating marketing responsibilities among Sanofi, BMS and their respective Affiliates under such centrally funded budget, (iv) the modification or substitution (if any) of the trademarks for the Products set forth in Schedule 5.07(b) of the Alliance Support Agreement, (v) developing and coordinating opinion leader support in Territory A, (vi) analyzing the competitive market and developing centrally funded programs to implement differentiation strategies in Territory A, (vii) directing centrally funded market and outcomes research, (viii) directing Product-related public relations and communications strategies and (ix) monitoring the sales of the Products and each Product’s market share in Territory A. The Marketing Working Group shall report and make its recommendations to the License Steering Committee.
(b) The Marketing Working Group also shall be responsible for developing and ensuring the implementation of the Territory-wide centrally funded marketing plan for each Product, and for ensuring that such plan is accurately and fully communicated to the local entities. Within the Marketing Working Group, Sanofi shall have the Lead for Clopidogrel Products and BMS shall have the Lead for Irbesartan Products; provided, however, that, notwithstanding the above, all recommendations and decisions made by the Marketing Working Group shall be jointly made pursuant to Section 6.6(b) hereof.
6.4 Development Committee. The Development Committee shall be responsible for (i) implementing the decisions made by the License Steering Committee, (ii) establishing the general strategy for New Indications and Line Extensions and (iii) overseeing the development of New Indications and Line Extensions, if such development is conducted jointly by Sanofi and BMS or their respective Affiliates. Within the Development Committee, Sanofi shall have the Lead for Clopidogrel Products and BMS shall have the Lead for Irbesartan Products; provided, however, that, notwithstanding the above, all recommendations and decisions made by the Development Committee shall be jointly made pursuant to Section 6.6(b) hereof. The Development Committee shall report and make its recommendations to the License Steering Committee.
6.5 Regulatory Committee . The Regulatory Committee shall be responsible for (i) implementing the decisions made by the License Steering Committee, (ii) the optimal regulatory filing strategies for the Products, (iii) developing and implementing the regulatory plan for the Products, (iv) liaison activities with regulatory authorities during the development and initial file review through approval or registration in each country for the Products, (v) regulatory activities relating to the development, approval and registration of New Indications and Line Extensions for the Products and (vi) coordinating activities related to post-approval safety and surveillance of the Products. Within the Regulatory Committee, Sanofi shall have the
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Lead for Clopidogrel Products and BMS shall have the Lead for Irbesartan Products; provided, however, that, notwithstanding the above, all recommendations and decisions made by the Regulatory Committee shall be jointly made pursuant to Section 6.6(b) hereof. The Regulatory Committee shall report and make its recommendations to the License Steering Committee.
6.6 Committee Composition and Decision Making. (a) The License Steering Committee shall at all times consist of six (6) representatives, three (3) of whom shall represent Sanofi and three (3) of whom shall represent BMS. The representatives of Sanofi shall be the persons serving from time to time as the (i) President and Executive Director, Sanofi Pharma (ii) Senior Vice President, Strategy, Sanofi Pharma and (iii) Vice President, Alliance Management, Sanofi Pharma. The representatives of BMS shall be the persons serving from to time as the (i) President, Worldwide Medicines Group (ii) Senior Vice President, Worldwide Franchise Management and (iii) Vice President, Alliance Management. If any such position has been modified or eliminated, the Party so affected shall appoint an individual whose position is substantially similar to the position so modified or eliminated. The License Steering Committee shall have the sole power, by a consensus of the representatives of Sanofi and BMS, to make any and all License Strategic Decisions and to resolve any deadlock or conflict arising among or within the License Functional Committees that has not been resolved pursuant to the Alliance Support Agreement.
(b) Each of the Marketing Working Group, the Development Committee and the Regulatory Committee shall at all times consist of any equal number of representatives of Sanofi and BMS. All representatives of each License Functional Committee shall be senior management personnel of Sanofi and BMS, respectively, or of their respective Affiliates. All recommendations and decisions made by each License Functional Committee shall be made by a consensus of the representatives of Sanofi and BMS thereon. Each License Functional Committee shall be authorized only to make recommendations to the License Steering Committee unless, and only to the extent that, it shall have received a specific written delegation of greater authority from the License Steering Committee pursuant to Section 6.9 hereof; provided, however, that each License Functional Committee shall have the authority, by a consensus of the representatives of Sanofi and BMS thereon, to make decisions on issues within such License Functional Committee’s specified scope of responsibilities as set forth in Sections 6.3-6.5 hereof, respectively.
6.7 Committee Dispute Resolution. All disputes arising within the License Steering Committee, within any License Functional Committee or among the License Functional Committees shall be resolved pursuant to Section 3.06 of the Alliance Support Agreement; provided, however, that if agreement cannot be reached with respect to [*] programs and expenses for any fiscal year pursuant to Section 3.06 of the Alliance Support Agreement, [*] programs and expenses for the previous fiscal year shall carry over to the next fiscal year, until [*] programs and expenses for the next fiscal year shall have been approved.
6.8 Cross-Territory Issues . The License Steering Committee or any License Functional Committee may agree with its counterpart committee in Territory B that certain studies, programs or plans will benefit the commercialization or development of the Products in Territory A as well as Territory B. In such case, such committee shall negotiate in good faith with its counterpart committee in Territory B to allocate any expenses related to such studies,
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programs of plans between the two Territories, with the expectation that, unless otherwise agreed, such expenses shall be [*].
6.9 Delegation. The License Steering Committee may, by a consensus of the representatives of Sanofi and BMS thereon, expressly and by written resolution establish any other functional committee and delegate its powers to such newly established functional committee and/or to any then existing License Functional Committee on such terms as it deems appropriate.
ARTICLE 7
NEW INDICATION OR LINE EXTENSION
SOLE RISK SCENARIO
7.1 Sole Development. If either Sanofi or BMS wishes to pursue the development of any New Indication or Line Extension, such Party (the “ Proposing Party ”‘) shall propose such development to the other Party (the “ Other Party ”) in the context of the Development Committee. If the Other Party decides not to pursue such development, as evidenced by its negative vote in the Development Committee with respect to such development and irrespective of whether such Party has the Lead for the Product with respect to which such development is proposed, then the Development Committee shall submit such proposal to the License Steering Committee, which shall decide whether the Proposing Party may proceed alone with such development. If the License Steering Committee agrees to permit such sole development, the Proposing Party shall be entitled to undertake such development at its sole cost and expense.
7.2 Commercialization of Resulting Products. If the Proposing Party proceeds alone with such development pursuant to Section 7.1 hereof, the Proposing Party and the Other Party shall, and shall cause their respective Affiliates, to grant the rights for the development of such New Indication or Line Extension, as the case may be, to the Proposing Party (with the right to sub-license to its Affiliates with the consent of the Other Party (which such consent shall not be unreasonably withheld)) solely for the purposes of pursuing such development in accordance with the terms of this Agreement. In the event the Proposing Party successfully develops such New Indication or Line Extension, the Proposing Party hereby acknowledges and agrees that (i) pursuant to Section 2.1 hereof, solely the SNC Partnership shall have the right to commercialize such New Indication or Line Extension in Territory A and (ii) such commercialization shall be fully subject to and performed in accordance with the decisions and recommendations of the Alliance Strategic Committee, the License Steering Committee and the Functional Committees in accordance with this Agreement and the Alliance Support Agreement.
7.3 [*] . In the event of such sole development, the Proposing Party shall be entitled to receive [*] for such development equal to [*], which shall be [*] payable to such Party pursuant to Article 5 hereof. In the event that the Finance Committee cannot agree upon a method of [*], including the [*] under Section [*] hereof,
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the Proposing Party and the Other Party shall [*]. The [*], and the fees and expenses of [*] shall be [*].
7.4 Election to Participate in Development . The Other Party may reverse its election not to pursue such development, by Notice to the Proposing Party, at any time prior to the registration of such New Indication or Line Extension in the first country in Territory A in which registration is made, subject to the reimbursement of [*] of [*] costs incurred by the Proposing Party with respect to such New Indication or Line Extension as of the date on which such Notice is made. In the event of such reimbursement, the Proposing Party and the Other Party shall thereafter share [*] costs incurred after the date on which such Notice is made with respect to such development, and the [*] set forth in Section [*] hereof shall be [*] by [*], from [*] to [*]of Net Sales of such Product in Territory A attributable to such New Indication or Line Extension; provided, however, that only the Proposing Party shall be entitled to [*].
7.5 Period of Exclusivity. If the development undertaken by the Proposing Party results in (i) an additional period of legal and de facto exclusivity for either Product as a whole or (ii) the issuance of a new patent for such New Indication or Line Extension developed through such development resulting in legal and de facto exclusivity for such New Indication or Line Extension, then the Proposing Party also shall be entitled to [*] for additional development determined by the Finance Committee, which shall not be less than [*] nor more than [*] of Net Sales of such Product in Territory A attributable to the New Indication or Line Extension. [*] shall be payable in accordance with Article 5 hereof (x) after the date legal or de facto exclusivity of such Product would otherwise have ended until the date on which the legal or de facto exclusivity obtained as a result of the sole development terminates (whichever terminates first), in the case referred to in clause (i) above, and (y) during the life of the relevant patent, in the case referred to in clause (ii) above. This [*] shall not exceed [*] of Net Sales of such Product in Territory A, even if the conditions in both clauses (i) and (ii) above are satisfied, and shall not be reduced even if the Other Party exercises its right under Section 7.4 hereof to reverse its election not to participate in such development.
7.6 Safety and Other Problems . Notwithstanding anything to the contrary in this Article 7 or in Section 7.05(b) of the Alliance Support Agreement, if either Sanofi or BMS determines that the development of a New Indication or Line Extension should be suspended for a safety reason that it believes in good faith justifies such suspension, or reasonably believes that such development would have a material adverse effect on the overall development of Irbesartan or Clopidogrel, as the case may be, or the overall commercial viability of the resulting Product(s), such Party shall have the unilateral right to veto the development by the other Party of such New Indication or Line Extension.
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ARTICLE 8
ADVERSE EVENT REPORTING
8.1 Adverse Event Reporting. BMS, Sanofi and the SNC Partnership shall each ensure that, in the marketing of the Products in Territory A, it and each of its respective Affiliates record, investigate, summarize and review all Adverse Events and Serious Adverse Events. Each Party shall require that its Affiliates, sub-licensees and distributors adhere to all requirements of local law which relate to the reporting and investigation of Adverse Events and Serious Adverse Events, and each Party shall require that its Affiliates, sub-licensees and distributors keep such Party informed of such experiences.
8.2 Reporting Procedure. In order that each Party may be fully informed of these experiences each Party shall report:
| (i) | In the case of Irbesartan Products, to BMS at: |
Bristol-Myers Squibb Company
P.O. Box 4000
Route 206 & Province Line Road
Princeton, NJ 08543
United States of America
Attention: Vice President, Worldwide Safety and Surveillance
Facsimile: [omitted]
| (ii) | in the case of Clopidogrel Products, to Sanofi at: |
Sanofi Pharma
82, avenue Raspail
94255 Gentilly Cedex, France
Attention: [omitted]
Facsimile: [omitted]
all Adverse Events and Serious Adverse Events anywhere in the world; provided, however, that Serious Adverse Events shall be reported to the relevant Person within three (3) working days of a Party’s becoming aware of such an event (a “ Reporting Party ”) and shall be reported by facsimile as provided above. The Reporting Party shall report all other Adverse Events on a monthly basis. The Parties shall agree on an Adverse Event reporting form that may be used by the Reporting Party as a basis for such reports. Each Party shall promptly notify the relevant Person of any complaint received by it in sufficient detail and in sufficient time to allow such Person to comply with any and all regulatory requirements imposed upon it in any country. Each Party shall also advise the relevant Person of any regulatory developments ( e.g., proposed recalls, labeling and other registrational dossier changes, etc.) affecting such Product in any country in Territory A. Each Party shall have the right to review and/or request copies of any and all information and reporting forms generated or received by the relevant Person with respect to Adverse Events and Serious Adverse Events. These procedures may be modified from time to time by the Regulatory Committee.
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ARTICLE 9
TERM; TERMINATION
9.1 Term: Termination. (a) The term of this Agreement, with respect to each Product, shall commence on the date hereof and shall expire on the later of (x) the 15th anniversary of the first commercial sale of such Product and (y) such date as the last patent relating to such Product effective in any country in Territory A shall have expired and all other de jure exclusivity available for such Product shall have ended. Thereafter, the term of this Agreement may be renewed with respect to such Product for successive three-year terms, respectively, by the mutual agreement of the Parties no later than 24 months prior to the expiration of the term then in effect.
(b) Notwithstanding the foregoing, this Agreement shall automatically expire upon the earlier of (i) the termination by both Parties of the commercialization of both Products throughout Territory A as the result of a Safety Problem pursuant to Section 7.04(ii) of the Alliance Support Agreement and (ii) the exercise by BMS of the special put option pursuant to Section 7.08 of the Alliance Support Agreement.
(c) The Parties may cause the early termination of this Agreement by the mutual written consent of each of the Parties.
(d) Either BMS or Sanofi shall have the right to declare termination of this Agreement upon Notice to the other Parties, following the first to occur of:
(i) such other Party shall have (A) voluntarily commenced any proceeding or filed any petition seeking relief under Title 11 of the United States Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States, any state thereof, the French Republic or any other applicable jurisdiction, (B) applied for or consented to the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (C) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (D) made a general assignment for the benefit of creditors of all or substantially all of its assets, (E) become unable generally, or admitted in writing its inability to, pay all or substantially all of its debts as they become due or (F) taken corporate action for the purpose of effecting any of the foregoing; or
(ii) an involuntary proceeding shall have been commenced or any involuntary petition shall have been filed in a court of competent jurisdiction seeking (A) relief in respect of such other Party, or of its property, under Title 11 of the United States Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States, any state thereof, the French Republic or any other applicable jurisdiction, (B) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for such other Party or for all or substantially all of its property or (C) the winding-up or liquidation of such other Party; and such proceeding or petition shall have continued undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall have continued unstayed and in effect for thirty (30) days.
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9.2 Consequences of Termination. (a) Upon the expiration or early termination of this Agreement pursuant to Section 9.1 hereof (the “ License Termination Date ”):
(i) the terms and conditions of Section 7.07 of the Alliance Support Agreement shall apply, except in the event of early termination pursuant to Section 9.1(b) hereof;
(ii) the SNC Partnership shall cease, and shall cause each sub-licensee (if any) to cease, all activities related to the Developed Know-How; and
(iii) the SNC Partnership shall pay in full all amounts due to Sanofi and/or BMS hereunder within ten (10) days after the final determination of Net Sales for such period, including the License Termination Date, pursuant to Sections 5.2, 5.3 and 5.5 hereof which shall survive until the full payment of all amounts under this clause (iii).
(b) In the event of the termination of the commercialization of any Product throughout Territory A pursuant to Section 7.04 of the Alliance Support Agreement (other than a bilateral termination of such Product as the result of a Safety Problem), the provisions of Section 9.2(a)(ii)-(iii) hereof shall apply, mutatis mutandis, with respect to such Product.
(c) In the event of the termination of the commercialization of any Product in any country(ies) of Territory A pursuant to Section 7.02 of the Alliance Support Agreement:
(i) the terms and conditions of Section 9-2(a)(ii)-(iii) hereof shall apply, mutatis mutandis, with respect to such Product in such country(ies); and
(ii) all rights and licenses granted by Sanofi and BMS hereunder with respect to such Product in such country(ies) shall revert to Sanofi and BMS, respectively, subject to Section 7.03 of the Alliance Support Agreement.
(d) Expiration or early termination of this Agreement pursuant to this Article 9 shall be without prejudice to any rights which shall have accrued to the benefit of any Party prior to such expiration or termination. Such expiration or termination shall not relieve any Party from its obligations which are expressly indicated to survive the expiration or termination of this Agreement. All of the Parties’ rights and obligations under this subclause (d) and under Sections 5.4, 5.6, 8.1, 8.2, 9.2 and 11.2-11.4 and Article 10 hereof shall survive such expiration or termination for the applicable period.
ARTICLE 10
CONFIDENTIALITY
All of the data, material and information exchanged by the Parties hereunder or related hereto (including, without limitation, the Developed Know-How) shall be subject to the confidentiality provisions of the Alliance Support Agreement as set forth in Section 5.03 thereof.
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ARTICLE 11
MISCELLANEOUS
11.1 Notices. All notices, requests or other communications hereunder (collectively,
“Notices”) shall be in writing, shall be in the English language and shall be given or made by delivery in person, by courier service, by facsimile (with receipt confirmed) or by registered or certified mail (return receipt requested, with
If to Sanofi, to:
| Sanofi | ||
| 32-34, rue Marbeuf | ||
| 75008 Paris, France | ||
| Attention: | Directeur Juridique | |
| Facsimile: | [omitted] | |
| Attention: | Directeur Juridique Adjoint | |
| Facsimile: | [omitted] | |
| Attention: | Vice President, Alliance Management | |
| Facsimile: | [omitted] | |
| with a copy to: | ||
| Cleary, Gottlieb, Steen & Hamilton | ||
| 41, avenue de Friedland | ||
| 75008 Paris, France | ||
| Attention: | [omitted] | |
| Facsimile: | [omitted] | |
If to BMS, to:
| Bristol-Myers Squibb Company | ||
| P.O. Box 4000 | ||
| Route 206 & Province Line Road | ||
| Princeton, NJ 08543-4000 USA | ||
| Attention: |
Vice President and Senior Counsel, Pharmaceutical Research Institute, and Worldwide Franchise Management and Business Development |
|
| Facsimile: | [omitted] | |
| Attention: | Vice President, Alliance Management | |
| Facsimile: | [omitted] | |
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| with a copy to: | ||
| Shearman & Sterling | ||
| 599 Lexington Avenue | ||
| New York, NY 10022 USA | ||
| Attention: | [omitted] | |
| Facsimile: | [omitted] | |
If to the SNC Partnership, to:
or to such other address or facsimile number as hereafter shall be furnished as provided in this Section 11.1 by any Party hereto to the other Parties hereto. All Notices given to any Party in accordance with this Section 11.1 shall be deemed to have been given on the date of receipt if
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delivered by hand or overnight courier service or sent by facsimile, or on the date ten (10) business days after dispatch by certified or registered mail (postage prepaid) if mailed.
11.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the choice of law principles that might otherwise be applied in such jurisdiction.
11.3 Dispute Resolution. All disputes between the Parties arising in connection with this Agreement (other than those specifically referred to in Sections 5.5, 6.7 or 7.3 hereof) shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce, and the number of arbitrators shall be three. Each of Sanofi (acting on its own behalf and on behalf of the SNC Partnership) and BMS shall designate one arbitrator and the two so appointed arbitrators shall jointly designate the third arbitrator. If such designation is not made within fifteen days of the designation of the second party designated arbitrator, the Secretary General of the International Court of Arbitration of the International Chamber of Commerce shall designate the third arbitrator. The proceedings shall be conducted in the English language in Paris, France. The president of any arbitral tribunal shall not be a citizen of either the United States of America or the French Republic.
11.4 Specific Performance. Each Party agrees that the Developed Know-How is unique, and that a failure by any Party to perform its obligations under this Agreement will result in irreparable damage and that specific performance of such obligations may be obtained without the posting of any bond or other security; provided, however, that the powers of the arbitrators under this Section 11.4 shall be limited to enforcing the obligations provided for in this Agreement as drafted.
11.5 No Third Party Beneficiaries . This Agreement shall be binding upon and inure solely to the benefit of the Parties (including the partners of the SNC Partnership, each in its capacity as partner thereof) and permitted sub-licensees and assigns, and nothing herein, express or implied, is intended to, or shall confer upon, any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.
11.6 Assignment (a) This Agreement may be assigned by a Party only to an Affiliate of Sanofi or BMS in the event of a corporate reorganization (including an entity that becomes an Affiliate in connection with such reorganization) involving the assumption of all or substantially all of such Party’s marketing or manufacturing functions in Territory A by such Affiliate, in which event the rights may be assigned and the obligations may be delegated to such Affiliate.
(b) Notwithstanding anything to the contrary contained in subclause (a) above, this Agreement may be assigned, in whole or in part, by, or on behalf of, the SNC Partnership as a result of a termination event under either Section 7.04 or Section 7.06 of the Alliance Support Agreement or as a result of the dissolution of the SNC Partnership (other than for a Safety Problem), and in any such event shall be deemed to be amended and restated (i) to delete Sections 2.4, 2.5, 3.2 and 6.1-6.9 and Articles 7 and 10 hereof, as well as any reference to the Alliance Support Agreement and (ii) to insert those terms and conditions that are then customary in the pharmaceutical industry for an intellectual property license agreement, including, without limitation, provisions for confidentiality, indemnification and termination for
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material breach, as well as a diligence requirement that the assignee shall use reasonable commercial efforts to actively promote the Product(s) assigned (and the remedy for breach of such diligence requirement shall be termination of such amended and restated agreement),
11.7 Severability. If any term or other provision hereof is held to be invalid, illegal or incapable of being enforced by applicable law or public policy, all other terms and provisions hereof shall nevertheless remain in full force and effect so long as the economic effect or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
11.8 Waivers and Amendments. No modification of or amendment to this Agreement shall be valid unless in a writing signed by the Parties referring specifically to this Agreement and starting the Parties’ intention to modify or amend the same. Any waiver of any term or condition of this Agreement shall be in a writing signed by the Party sought to be charged with such waiver referring specifically to the term or condition to be waived, and no such waiver shall be deemed to constitute the waiver of any other breach of the same or of any other provision hereof.
11.9 Headings. All titles and captions contained in this Agreement are for the convenience of reference only and shall not affect in any way the meaning or interpretation hereof.
11.10 Entire Agreement. This Agreement and the Alliance Support Agreement constitute the entire agreement of the Parties with respect to the subject matter contained herein and all prior agreements relative thereto which are not contained herein are hereby terminated.
11.11 No Partnership or Joint Venture. This Agreement is not intended to create, and nothing contained herein shall be construed to create an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on or with regard to the other Party. Each Party shall be severally responsible for its own covenants, obligations and liabilities as herein provided. Other than the SNC Partnership: (i) no Party shall be under the control of, or shall be deemed to control any other Party; (ii) no Party is the legal representative, agent, joint venturer or employee of the other Party with respect to this Agreement for any purpose whatsoever, and no Party shall have the right or power to bind the other Party; and (iii) no Party has the right or authority to assume or create any obligations of any kind or to make any representation or warranty on behalf of any other Party, whether express or implied, of to bind any other Party in any respect whatsoever. The provisions of this Agreement are intended only for the regulation of relations between the Parties. This Agreement is not intended for the benefit of non-Party creditors, and no rights are granted to.non-Party creditors under this Agreement.
11.12 Governing Language. The Parties acknowledge that this Agreement may be translated into the French language. The Parties agree that this English language version shall in all respects be the controlling version of this Agreement.
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11.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the day and year first written above.
| SANOFI | SANOFI PHARMA BRISTOL-MYERS SQUIBB | |||||||
| By: | /s/ [signature illegible] | Represented by: | ||||||
| Name: | SANOFI PHARMA, as Manager | |||||||
| Title: | ||||||||
| BRISTOL-MYERS SQUIBB COMPANY | By: | /s/ [signature illegible] | ||||||
| Name: | ||||||||
| Title: | ||||||||
| By: | /s/ [signature illegible] | Witnessed by: | ||||||
| Name: | BMS INVESTCO S.A.S., a Partner | |||||||
| Title | ||||||||
| By: | /s/ [signature illegible] | |||||||
| Name: | ||||||||
| Title: | ||||||||
160816
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SCHEDULE 1A
TERRITORY A 1
Europe
| Albania |
the United Kingdom (including |
|
| Andorra |
England, Wales, Scotland, Isle of |
|
| Austria |
Man, Alderney, Northern Ireland, |
|
| Belgium |
Channel Islands) |
|
| Bulgaria | ||
| Cyprus | Former USSR (Europe) | |
| The Czech Republic |
Russia |
|
| Slovakia |
Ukraine |
|
| Denmark |
Belorus |
|
| Finland |
Moldavia |
|
| France (including Martinique, |
Estonia |
|
|
Guadeloupe, French Guyana, |
Latvia |
|
|
French Polynesia, New Caledonia, |
Lithuania |
|
|
Reunion and the other Overseas |
Vatican City State | |
|
Departments and Territories) |
Former Yugoslavia | |
| Germany |
(including Bosnia-Herzegovina, |
|
| Gibraltar |
Croatia, Macedonia, Montenegro, |
|
| Greece |
Serbia and Slovenia) |
|
| Greenland | ||
| Hungary | ||
| Iceland | Africa | |
| Irish Republic | ||
| Italy | Algeria | |
| Liechtenstein | Angola | |
| Luxembourg | Benin | |
| Malta and Gozo | Botswana | |
| Monaco | Burkina Faso | |
| Netherlands | Burundi | |
| Norway | Cameroon | |
| Poland | Cape Verde Islands | |
| Portugal | Central African Republic | |
| Romania | Chad | |
| San Marino | Comoros | |
| Spain | Congo | |
| Sweden | Djibouti | |
| Switzerland | Egypt | |
| Equatorial Guinea | ||
| Eritrea |
| 1 | Territory A will be deemed to include any new country created by the division, consolidation or name change of the countries listed below. |
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IA-2
| Africa (continued): | Asia | |
| Ethiopia | Afghanistan | |
| Gabon | Bahrain | |
| Gambia | Bangladesh | |
| Ghana | Bhutan | |
| Guinea | Brunei | |
| Guinea-Bissau | Cambodia | |
| Ivory Coast | China (including Tibet) | |
| Kenya |
Taiwan |
|
| Lesotho |
Macao |
|
| Liberia | Hong Kong | |
| Libya | India | |
| Madagascar | Indonesia | |
| Malawi | Israel | |
| Mali | Jordan | |
| Mauritania | South Korea | |
| Mayotte | Kuwait | |
| Mauritius, etc, | Laos | |
| Morocco | Lebanon | |
| Mozambique | Malaysia | |
| Namibia | Maldive Islands | |
| Niger | Mongolia | |
| Nigeria | Myanmar | |
| Occidental Sahara | Nepal | |
| Rwanda | Oman | |
| St Helena | Pakistan | |
|
Ascension |
Philippines | |
|
Tristan de Cunha |
Qatar | |
| Sao Tome & Principe | Saudi Arabia | |
|
Senegal Seychelles Sierra Leone Somalia South Africa Spanish Presidios: Ceuta Melilla Sudan Swaziland Tanzania Togo Tunisia Uganda Zaire Zambia Zimbabwe |
Singapore Sri Lanka
Syria Thailand Turkey United Arab Emirates
Former USSR (Asia) RSFSR (Asia) Armenia (Hyastan) Azerbaidjan Georgia Turkmenistan Uzbekistan Tadjikistan Kazakhstan Kirghizia Vietnam Yemen |
|
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SCHEDULE 1B
TERRITORY B 2
| North America: | Oceania: | |
| Canada | Australia | |
| Mexico | Fiji | |
| United States of America | Micronesia | |
|
(including Puerto Rico, US Virgin |
(including Caroline, Kiribati, |
|
|
Islands, Guam, American Samoa) for |
Mariana and Marshall Islands) |
|
|
Clopidogrel only |
Nauru | |
| New Zealand | ||
| Central America and the West Indies: | Papua New Guinea | |
| Pitcairn Islands | ||
| Anguilla | Samoa (non-US) | |
| Antigua | Solomon Islands | |
| Aruba | Tonga | |
| Bahamas | Tuvalu | |
| Barbados | Vanuatu | |
| Belize | ||
| Bermuda | ||
| Cayman Islands | ||
| Costa Rica | South America: | |
| Dominica | ||
| Dominican Republic | Argentina | |
| Grenada | Bolivia | |
| Guatemala | Brazil | |
| Haiti | Chile | |
|
Honduras Jamaica |
Colombia Ecuador |
|
|
Netherlands Antilles Nicaragua |
Falkland Islands Guyana |
|
| Panama | Paraguay | |
| St. Kitts-Nevis | Peru | |
| St Lucia | Surinam | |
| St Vincent and the Grenadines | Uruguay | |
| El Salvador | Venezuela | |
| Trinidad and Tobago | ||
| Turks and Caicos Islands | ||
| Virgin Islands (British) | ||
| 2 |
Territory B will be deemed to include any country created by the division, consolidation or name change of the countries listed below. |
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EXHIBIT 6.1-A
RECOMMENDED PRODUCT PROFILES, CLAIM STRUCTURES
AND DOSAGES
FOR FILE SUBMISSIONS
Description: Recommended indications, major claims and dosage
PRODUCT :
Product Profile:
Indications:
Major Claims:
Dosage:
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EXHIBIT 6.1-B
CORE POSITIONING STRATEGIES / KEY MESSAGES 3
Description: Outline of core position and key messages
PRODUCT :
Core Positioning Strategy:
Key Messages:
| 3 |
Promotional messages may be developed in each country to address local needs and conditions so long as they are consistent with the core positioning strategies and key messages. |
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EXHIBIT 6.1-C
CENTRALLY FUNDED PROGRAMS AND EXPENSES
PRODUCT :
|
U.S.$ 000 |
1996
Projection |
1997 Budget |
1997
Total |
1998
Estimate |
||||||||||
| 1st Q | 2nd Q | 3rd Q | 4th Q | |||||||||||
|
Meetings / Symposia / Roundtables |
||||||||||||||
|
Advertising |
||||||||||||||
|
Advisory Boards/Consultants |
||||||||||||||
|
Agency Fees |
||||||||||||||
|
Regulatory Fees |
||||||||||||||
|
Phase IIIB/IV (1) |
||||||||||||||
|
Phase V Trials (1) |
||||||||||||||
|
Total |
||||||||||||||
| (1) | Includes all costs: tablets, investigators, etc. |
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EXHIBIT 6.1-D
OVERALL PRICING GUIDELINES
Description: Range and rationale for recommended pricing guidelines
PRODUCT :
Overall pricing guidelines:
Rationale:
Comparative competitive products:
Market conditions:
Product differentiation:
Other:
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EXHIBIT 6.1-E
PHASE IIIB STUDIES, DIFFERENTIATION PROGRAMS
AND STUDIES FOR NEW INDICATIONS AND LINE EXTENSIONS
Description:
PRODUCT :
Priority Studies
|
Study |
Objective |
Start Date |
Completion Date |
Total Cost |
||||
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Exhibit 10.11
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PRODUCT KNOW-HOW LICENSE AGREEMENT
among
SANOFI
BRISTOL-MYERS SQUIBB COMPANY
and
BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING PARTNERSHIP
dated as of January 1, 1997
TABLE OF CONTENTS
|
ARTICLE 1 DEFINITIONS |
||||
| SECTION 1.1 | Defined Terms | 2 | ||
| SECTION 1.2 | Additional Defined Terms | 5 | ||
|
ARTICLE 2 GRANT OF LICENSE |
||||
| SECTION 2.1 | License Giant | 5 | ||
| SECTION 2.2 | No Transfer | 6 | ||
| SECTION 2.3 | No Implicit Rights | 6 | ||
| SECTION 2.4 | Corporate Name Authorization | 6 | ||
| SECTION 2.5 | Goodwill | 6 | ||
| SECTION 2.6 | Representations and Warranties | 6 | ||
| SECTION 2.7 | Improvements | 6 | ||
|
ARTICLE 3 SUB-LICENSE |
||||
| SECTION 3.1 | General Sub-License | 6 | ||
| SECTION 3.2 | Sub-License for Alliance Agreements | 7 | ||
| SECTION 3.3 | Termination of Sub-License | 7 | ||
|
ARTICLE 4 PROVISION OF DOCUMENTS |
||||
| SECTION 4.1 | Initial Exchange | 7 | ||
| SECTION 4.2 | Continuing Exchange | 7 | ||
|
ARTICLE 5 CONSIDERATION |
||||
| SECTION 5.1 | Development Royalty | 7 | ||
| SECTION 5.2 | Payment | 8 | ||
| SECTION 5.3 | Method of Payment | 8 | ||
| SECTION 5.4 | Records | 8 | ||
| SECTION 5.5 | Payment Reports | 8 | ||
| SECTION 5.6 | Taxes | 8 | ||
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ii
|
ARTICLE 6 LICENSE STEERING COMMITTEE |
||||
| SECTION 6.1 | License Steering Committee | 9 | ||
|
SECTION 6.2 |
License Functional Committees | 9 | ||
| SECTION 6.3 | Marketing Working Group | 9 | ||
| SECTION 6.4 | Development Committee | 10 | ||
| SECTION 6.5 | Regulatory Committee | 10 | ||
| SECTION 6.6 | Committee Composition and Decision Making | 10 | ||
| SECTION 6.7 | Committee Dispute Resolution | 11 | ||
| SECTION 6.8 | Cross-Territory Issues | 11 | ||
| SECTION 6.9 | Delegation | 11 | ||
|
ARTICLE 7 NEW INDICATION OR LINE EXTENSION SOLE RISK SCENARIO |
||||
| SECTION 7.1 | Sole Development | 12 | ||
| SECTION 7.2 | Commercialization of Resulting Products | 12 | ||
| SECTION 7.3 | [*] | 12 | ||
| SECTION 7.4 | Election to Participate in Development | 12 | ||
| SECTION 7.5 | Period of Exclusivity | 13 | ||
| SECTION 7.6 | Safety and Other Problems | 13 | ||
|
ARTICLE 8 ADVERSE EVENT REPORTING |
||||
| SECTION 8.1 | Adverse Event Reporting | 13 | ||
| SECTION 8.2 | Reporting Procedure | 14 | ||
|
ARTICLE 9 TERM; TERMINATION |
||||
| SECTION 9.1 | Term; Termination | 14 | ||
| SECTION 9.2 | Consequences of Termination | 15 | ||
|
ARTICLE 10 CONFIDENTIALITY |
||||
| 16 | ||||
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iii
|
ARTICLE 11 MISCELLANEOUS |
||||
| SECTION 11.1 | Notices | 16 | ||
| SECTION 11.2 | Governing Law | 18 | ||
| SECTION 11.3 | Dispute Resolution | 19 | ||
| SECTION 11.4 | Specific Performance | 19 | ||
| SECTION 11.5 | No Third Party Beneficiaries | 19 | ||
| SECTION 11.6 | Assignment | 19 | ||
| SECTION 11.7 | Severability | 20 | ||
| SECTION 11.8 | Waivers and Amendments | 20 | ||
| SECTION 11.9 | Headings | 20 | ||
| SECTION 11.10 | Entire Agreement | 20 | ||
| SECTION 11.11 | No Partnership or Joint Venture | 20 | ||
| SECTION 11.12 | Governing Language | 20 | ||
| SECTION 11.13 | Counterparts | 21 | ||
SCHEDULES
| SCHEDULE 1A | TERRITORY A | |
| SCHEDULE 1B | TERRITORY B |
EXHIBITS
| EXHIBIT 6.1-A | RECOMMENDED PRODUCT PROFILES, CLAIM STRUCTURES AND DOSAGES FOR FILE SUBMISSIONS | |
| EXHIBIT 6.1-B | CORE POSITIONING STRATEGIES / KEY MESSAGES | |
| EXHIBIT 6.1-C | CENTRALLY FUNDED PROGRAMS AND EXPENSES | |
| EXHIBIT 6.1-D | OVERALL PRICING GUIDELINES | |
| EXHIBIT 6.1-E | PHASES IIIB STUDIES, DIFFERENTIATION PROGRAMS AND STUDIES FOR NEW INDICATIONS AND LINE EXTENSIONS | |
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This PRODUCT KNOW-HOW LICENSE AGREEMENT (this “ Agreement ”) dated as of January 1,1997 is hereby made by and among:
Sanofi, a société anonyme organized and existing under the laws of the French Republic (“ Sanofi ”):
Bristol-Myers Squibb Company, a corporation organized and existing under the laws of the State of Delaware, United States of America (“ BMS ”); and
Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership, a Delaware partnership (the “ Partnership ” and, together with Sanofi and BMS, the “ Parties ” and, individually, each a “ Party ”).
W I T N E S S E T H:
WHEREAS, Sanofi has discovered and patented two new chemical entities, one known as SR 47436 with the international non-proprietary name Irbesartan (“ Irbesartan ”) and one known as SR 25990C with the international non-proprietary name Clopidogrel Hydrogenosulphate (“ Clopidogrel ”), with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;
WHEREAS, Sanofi, BMS and Sterling Winthrop Inc., a Delaware corporation (“Sterling”) entered into a Development Agreement dated July 29, 1993 (the “ Development Agreement ”) for, among other things, the development of Irbesartan and Clopidogrel;
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30,1994 among Eastman Kodak Company, Sanofi and Sterling, Sanofi acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Development Agreement;
WHEREAS, Sanofi and BMS have entered into a Territory B Alliance Support Agreement dated as of the date hereof (the “ Alliance Support Agreement ”) and have formed through their indirect wholly owned subsidiaries the Partnership pursuant to the partnership agreement dated as of the date hereof (the “ Partnership Agreement ”) for, among other things, the commercialization of the Products in Territory B (as such terms are defined herein);
WHEREAS, Sanofi and the Partnership have entered into an Irbesartan Intellectual Property License Agreement (the “ Irbesartan License Agreement ”) and a Clopidogrel Intellectual Property License and Supply Agreement dated as of the date hereof, pursuant to which Sanofi has granted a license to use certain patents, trademarks and know-how for the commercialization of the Products in Territory B that neither were developed with nor are owned by BMS;
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2
WHEREAS, Sanofi and BMS have developed certain know-how under the Development Agreement for the commercialization of the Products in Territory B and, as a result, each has an undivided one-half direct ownership interest in the Developed Know-How (as such term is defined herein); and
WHEREAS, Sanofi and BMS are willing to grant to the Partnership, and the Partnership is willing to accept, a license under the Developed Know-How for the commercialization of the Products in Territory B on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions set forth herein, the Parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms . As used in this Agreement, the following terms shall have the following meanings:
“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Product of which any Party or any of its Affiliates becomes aware, whether or not considered drug related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.
“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however, that, with respect to Sanofi, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Sanofi that would be an Affiliate of Sanofi solely by reason of its being controlled by Elf Aquitaine. For the purposes of this definition, “ control ” shall refer to the possession, directly or indirectly, of the power to direct the management or policies of a Person or to veto any material decision relating to the management or policies of a Person, in each case whether through the ownership of voting securities, by contract or otherwise, the beneficial ownership, directly or indirectly, of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial ownership of at least 50% of the partnership interests of a general partnership. The Parties confirm that each Co-Promotion Entity (as defined in the Alliance Support Agreement) in Territory B shall be considered to be an Affiliate of BMS.
“ Alliance Agreements ” has the meaning set forth in the Alliance Support Agreement.
“ Alliance Strategic Committee ” has the meaning set forth in the Alliance Support Agreement.
“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof.
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“ Competing Product ” means, with respect to any Product, any other product that [*], but which is not [*] set forth in Schedule [*] or selected for [*] by [*].
“ Developed Know-How ” means any and all technical data, information, material and other know-how that relate to the formulation of the Products, including, without limitation, any analytical methodology, chemical, toxicological, pharmacological and clinical data, formulae, procedures, protocols, techniques and results of experimentation and testing, developed by Sanofi and BMS under the Development Agreement.
“ Finance Committee ” has the meaning set forth in the Alliance Support Agreement.
“ Functional Committee ” means any Alliance Functional Committee (as such term is defined in the Alliance Support Agreement) or any License Functional Committee.
“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.
“ Irbesartan Product ” means the product or products having as an active ingredient Irbesartan or any salt, ester, metabolite or pro-drug thereof.
“ Lead ” means the right to initiate proposals and implement, or cause the implementation of, recommendations and decisions.
“ Line Extension ” means, for each Product and with respect to development conducted on or after January, 1 1997, any new dosage or new form of administration of such Product.
“ MAAs ” means, with respect to each Product, any marketing authorizations, licenses, approvals, registrations, certificates and exemptions submitted to or granted by or pending with any Governmental Authority for the purpose of allowing the manufacture, production, supply, marketing, distribution or sale of such Product in a particular country.
“ Major B Countries ” means any country in Territory B representing at least [*] of aggregate Net Sales of both Products in Territory B, as determined from time to time by [*].
“ Manufacturing and Sourcing Committee ” has the meaning set forth in the Alliance Support Agreement.
“ Marketing Entity ” has the meaning set forth in the Partnership Agreement.
“ Net Sales ” means for any given period and with respect to any Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any
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transfers between any Party and its Affiliates solely for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outdating or the return of such Product.
“ New Indication ” means, for each Product and with respect to development conducted on or after January 1, 1997, any new therapeutic use or application of such Product.
“ Non-Promotional Countries ” means the countries in Territory B where the utilization of personal promotion by sales personnel is not a significant factor in obtaining product usage and achieving sales or where selling is by tender or comparable non-promotional method of sale, as determined from time to time by the Finance Committee.
“ Person ” means any individual, partnership, firm, corporation, soci é t é anonyme, soci é t é en nom collectif, soci é t é en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.
“ Product ” means a Clopidogrel Product or an Irbesartan Product and “ Products ” means both a Clopidogrel Product and an Irbesartan Product.
“ Safety Problem ” has the meaning set forth in the Alliance Support Agreement.
“ Sanofi Pharma ” means Sanofi Pharma, a soci é t é anonyme organized and existing under the laws of the French Republic.
“Serious Adverse Event” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.
“ Territory ” means either Territory A or Territory B and “ Territories ” means both Territory A and Territory B.
“ Territory A ” means the countries and geographic areas described and listed in Schedule 1A attached hereto.
“ Territory B ” means the countries and geographic areas described and listed in Schedule 1 B attached hereto.
“ Third Party ” means a Person who or which is neither a Party nor an Affiliate of a Party.
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1.2 Additional Defined Terms. The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:
|
Defined Term |
Section Where Defined | |
|
Agreement |
Preamble | |
|
Alliance Support Agreement |
Recitals | |
|
BMS |
Preamble | |
|
Clopidogrel |
Recitals | |
|
Development Agreement |
Recitals | |
|
Development Committee |
6.2 | |
|
Development Royalty |
5.1 | |
|
Irbesartan |
Recitals | |
|
Irbesartan License Agreement |
Recitals | |
|
License Functional Committees |
6.2 | |
|
License Steering Committee |
6.1 | |
|
License Strategic Decisions |
6.1 | |
|
License Termination Date |
9.2 | |
|
Marketing Working Group |
6.2 | |
|
Notices |
11.1 | |
|
Ongoing Studies |
2.1 | |
|
Other Party |
7.1 | |
|
Partnership Agreement |
Recitals | |
|
Partnership |
Preamble | |
|
Party |
Preamble | |
|
Payment Report |
5.2 | |
|
Proposing Party |
7.1 | |
|
Regulatory Committee |
6.2 | |
|
Reporting Party |
8.2 | |
|
Sanofi |
Preamble | |
|
Sterling |
Recitals |
ARTICLE 2
GRANT OF LICENSE
2.1 License Grant . Subject to the terms and conditions of this Agreement, Sanofi and BMS each separately grant to the Partnership an exclusive license for the term hereof in their respective undivided one-half direct ownership interest in the Developed Know-How, and the Partnership hereby accepts, an exclusive license for the term hereof under the Developed Know-How (i) to make, have made, sell, offer for sale and import the Products in Territory B, (ii) subject to Article 7 hereof, to develop Irbesartan Products and Clopidogrel Products for Territory B, including, without limitation, New Indications and Line Extensions thereof, and (iii) with the prior approval of the Manufacturing and Sourcing Committee, to make, have made, and export the Products outside of Territory B; provided, however, that such exclusivity shall not apply to Sanofi and BMS with respect to any ongoing studies that are being conducted by Sanofi and BMS under the Development Agreement (the “ Ongoing Studies ”).
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2.2 No Transfer . The Partnership hereby acknowledges and agrees that this Agreement does not, and shall not be deemed to, transfer any proprietary ownership interest whatsoever to the Partnership in or to the Developed Know-How. Nothing herein shall give the Partnership any right, title or interest in or to any of the Developed Know-How, except the rights granted pursuant to this Agreement.
2.3 No Implicit Rights . All of the rights granted hereunder are explicitly stated herein and nothing in this Agreement shall be construed to grant any implied rights whatsoever to the Partnership in or to the Developed Know-How.
2.4 Corporate Name Authorization . The Partnership shall be permitted to use both the Sanofi and BMS corporate names, on a [*] basis for the term hereof, solely (i) as part of its corporate name and (ii) in connection with any promotional, advertising or marketing necessary or desirable for the commercialization of the Products in Territory B in accordance with this Agreement and the Alliance Support Agreement. The grant of rights pursuant to this Section 2.4 shall automatically terminate upon the earlier of (i) the expiration or early termination of this Agreement and (ii) the expiration or early termination of the Alliance Support Agreement.
2.5 Goodwill . The Partnership hereby acknowledges that all goodwill connected with the Sanofi and BMS corporate names shall inure to the benefit of Sanofi and BMS, as the case may be, and the Partnership shall not take any action that may be detrimental to such goodwill.
2.6 Representations and Warranties . Each of BMS and Sanofi represents and warrants to the other Parties hereto that: (i) it has, and will at all times during the term of this Agreement have, the right, power and authority to license the Developed Know-How and to perform its other obligations hereunder, (ii) it is not aware of any asserted or unasserted claims or demand of any Third Party it believes to be enforceable against the Developed Know-How and (iii) to the best of such Party’s knowledge and belief, the Partnership’s exercise of any right to the Developed Know-How, as contemplated by this Agreement, will not infringe any intellectual property right of any Third Party.
2.7 Improvements . Any new or useful invention, process or improvement, patentable or unpatentable, relating to the formulation of any Product under the Developed Know-How developed or acquired by the Partnership during the term hereof, shall be the property of the Partnership which shall have all ownership rights thereto, subject to Article 7 hereof.
ARTICLE 3
SUB-LICENSE
3.1 General Sub-License . Except as permitted under Section 3.2 hereof, the Partnership shall not, without the prior written consent of both Sanofi and BMS, sub-license any of its rights and obligations under this Agreement; provided, however, that if the representatives of Sanofi and BMS on any Functional Committee, the Alliance Strategic Committee or the License Steering Committee, consensually agree to sub-license any of the Partnership’s rights or
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obligations hereunder, such agreement shall be deemed to be the consent of Sanofi and BMS for the purposes of this Section 3.1. No such sub-license shall relieve the Partnership of its obligations hereunder.
3.2 Sub-License for Alliance Agreements . The Partnership shall sub-license those of its rights and obligations under this Agreement, to any Affiliate of Sanofi or BMS that is a party to any Alliance Agreement, solely for the purposes of permitting such Affiliate to perform its obligations under such Alliance Agreement.
3.3 Termination of Sub-License . Sanofi and BMS each shall have the right to require the Partnership to terminate any sub-license of rights hereunder in the event that the sub-licensee fails to comply in any material respect with, or takes any action contrary to, the terms of such sub-license or any decision made by any Functional Committee, the Alliance Strategic Committee or the License Steering Committee, and such sub-licensee has failed to remedy such non-compliance within thirty (30) days from its receipt of written notice thereof from Sanofi, BMS or the Partnership.
ARTICLE 4
PROVISION OF DOCUMENTS
4.1 Initial Exchange . As promptly as practicable following the date hereof, each of Sanofi and BMS shall make available to the Partnership copies of all relevant data, studies and materials comprising Developed Know-How in such Party’s possession that shall be available as of such date.
4.2 Continuing Exchange . During the term of this Agreement, each of Sanofi and BMS shall make available to the Partnership, from time to time, copies of all relevant data, studies and materials comprising subsequently developed or acquired Developed Know-How in such Party’s possession as soon as practicable after the development or acquisition thereof.
ARTICLE 5
CONSIDERATION
5.1 Development Royalty . In consideration of the rights and licenses granted hereunder, the Partnership shall pay, or shall cause to be paid, for the term of this Agreement the following aggregate amounts as a development royalty (each a “ Development Royalty ”):
(i) To [*], an amount equal to [*]of Net Sales of Irbesartan Products in Territory B; and
(ii) To [*], an amount based on Net Sales of Clopidogrel Products in Territory B, which shall be determined by [*] no later than sixty (60) days after the first commercial sale of any Clopidogrel Product in Territory B.
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5.2 Payment . For the term of this Agreement, the Partnership shall pay or cause to be paid to each of Sanofi and BMS all amounts due hereunder on a quarterly basis within sixty (60) days of the end of each calendar quarter. Each such payment shall be accompanied by an accurate statement of the amount of Net Sales of the Products, broken down Product-by-Product, during such calendar quarter and the calculation of all payments to be made to each of Sanofi and BMS for such calendar quarter (each a “ Payment Report ”).
5.3 Method of Payment . (a) All payments to be made hereunder shall be made by wire transfer in immediately available funds, and shall be made in US dollars to the respective bank accounts of Sanofi and BMS as notified to the Partnership by the relevant Party, unless the Parties agree to settle such payments through other means.
(b) Amounts due from the Partnership to BMS or Sanofi in respect of sales based on a currency other than US dollars shall be converted to US dollars using the methodology determined for such purpose by the Finance Committee.
5.4 Records . The Partnership shall maintain (i) books, records and accounts which accurately and fairly reflect, in reasonable detail, the Net Sales of the Products and (ii) an adequate system of internal accounting controls. All books, records and accounts referred to in clause (i) above shall be maintained for not less than three (3) years, or for such longer period if and as required by applicable law, following the date of the sales constituting the Net Sales and shall be made available for reasonable review upon request by Sanofi and/or BMS.
5.5 Payment Reports . (a) At the request of Sanofi, the Partnership shall, and shall if applicable cause its sub-licensees to, permit Sanofi or an independent, certified public accountant not having any significant relation to either BMS or Sanofi, as appointed by Sanofi, at reasonable times and upon reasonable notice, to examine the books and records of the Partnership as may be necessary to (i) determine, with respect to any calendar quarter ending not more than two (2) years prior to the related request, the correctness of any Payment Report or payment made under this Agreement or any Alliance Agreement or (ii) obtain information as to the amount payable for any such calendar quarter in the case of failure on the part of the Partnership to report or pay pursuant to this Agreement or on the part of any party to any Alliance Agreement; provided, however, that Sanofi shall not have the right to make such audit request more than once every twelve (12) calendar months. The results of any such audit shall be promptly made available to BMS, Sanofi and the Partnership.
(b) Sanofi shall bear the full cost and expense of any such audit, unless such audit discloses that the amount due to Sanofi is more than the amount paid by [*] of the amount due, in which case BMS shall bear the full cost and expense of such audit
(c) The determination by an independent, certified public accountant pursuant to this Section 5.5 as to the amount due and payable by the Partnership shall be conclusive and binding on the Parties hereto.
5.6 Taxes . All payments due under this Agreement shall be paid in full without deduction, except for taxes (if any) required to be withheld by applicable law in Territory B with respect to such payments. In the event the Partnership is required under
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applicable law to withhold any tax to the revenue authorities in any country in Territory B regarding any payment to Sanofi and/or BMS, the amount of such tax shall be deducted by the Partnership and paid to the relevant revenue authority, and the Partnership shall notify the relevant Party thereof and shall promptly furnish to such Party all copies of any tax certificate or other documentation evidencing such withholding. In the event that any such tax shall subsequently be found to be due, payment of such tax shall be the responsibility of Sanofi or BMS, as the case may be.
ARTICLE 6
LICENSE STEERING COMMITTEE
6.1 License Steering Committee . In order to ensure the proper use of the Developed Know-How by the Partnership for the commercialization and further development of the Products, Sanofi and BMS shall be represented by a License Steering Committee (the “ License Steering Committee ”), which shall be responsible for the following decisions (collectively, the “ License Strategic Decisions ”):
(i) recommended Product profiles, claim structures and dosages for file submissions using the form set forth in Exhibit 6.1-A attached hereto;
(ii) the core positioning strategies and key messages with respect to the commercialization of the Products using the form set forth in Exhibit 6.1-B attached hereto;
(iii) approval of the centrally funded budget for certain programs and expenses using the form set forth in Exhibit 6.1 - C attached hereto;
(iv) overall pricing guidelines using the form set forth in Exhibit 6.1-D attached hereto; and
(v) overall strategy and expenses for Phase IIIB studies, differentiation programs and studies for New Indications and Line Extensions using the form set forth in Exhibit 6.1-E attached hereto.
6.2 License Functional Committees . Subject to the general oversight and authority of the License Steering Committee, the following functional committees (the “ License Functional Committees ”) are hereby established and shall be maintained and empowered as hereinafter provided: (i) a marketing working group (the “ Marketing Working Group ”), (ii) a development committee (the “ Development Committee ”) and (iii) a regulatory committee (the “ Regulatory Committee ”).
6.3 Marketing Working Group. (a) The Marketing Working Group shall be responsible for (i) developing and seeking approval for the centrally funded budget for certain programs and expenses using the form set forth in Exhibit 6.1-C attached hereto, (ii) implementing such centrally funded budget, (iii) allocating marketing responsibilities among Sanofi, BMS and their respective Affiliates, under such centrally funded budget, (iv) the modification or substitution (if any) of the trademarks for the Products set forth in
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Schedule 5.07(b) of the Alliance Support Agreement, (v) developing and coordinating opinion leader support in Territory B, (vi) analyzing the competitive market and developing centrally funded programs to implement differentiation strategies in Territory B, (vii) directing centrally funded market and outcomes research, (viii) directing Product-related public relations and communications strategies and (ix) monitoring the sales of the Products and each Product’s market share in Territory B. The Marketing Working Group shall report and make its recommendations to the License Steering Committee.
(b) The Marketing Working Group also shall be responsible for developing and ensuring the implementation of the Territory-wide centrally funded marketing plan for each Product, and for ensuring that such plan is accurately and fully communicated to the local entities. Within the Marketing Working Group, Sanofi shall have the Lead for Clopidogrel Products and BMS shall have the Lead for Irbesartan Products; provided, however, that, notwithstanding the above, all recommendations and decisions made by the Marketing Working Group shall be jointly made pursuant to Section 6.6 (b) hereof.
6.4 Development Committee . The Development Committee shall be responsible for (i) implementing the decisions made by the License Steering Committee, (ii) establishing the general strategy for New Indications and Line Extensions and (iii) overseeing the development of New Indications and Line Extensions, if such development is conducted jointly by Sanofi and BMS or their respective Affiliates. Within the Development Committee, Sanofi shall have the Lead for Clopidogrel Products and BMS shall have the Lead for Irbesartan Products; provided, however, that, notwithstanding the above, all recommendations and decisions made by the Development Committee shall be jointly made pursuant to Section 6.6(b) hereof. The Development Committee shall report and make its recommendations to the License Steering Committee.
6.5 Regulatory Committee . The Regulatory Committee shall be responsible for (i) implementing the decisions made by the License Steering Committee, (ii) the optimal regulatory filing strategies for the Products, (iii) developing and implementing the regulatory plan for the Products, (iv) liaison activities with regulatory authorities during the development and initial file review through approval or registration in each country for the Products, (v) regulatory activities relating to the development, approval and registration of New Indications and Line Extensions for the Products and (vi) coordinating activities related to post-approval safety and surveillance of the Products. Within the Regulatory Committee, Sanofi shall have the Lead for Clopidogrel Products and BMS shall have the Lead for Irbesartan Products; provided, however, that, notwithstanding the above, all recommendations and decisions made by the Regulatory Committee shall be jointly made pursuant to Section 6.6(b) hereof. The Regulatory Committee shall report and make its recommendations to the License Steering Committee.
6.6 Committee Composition and Decision Making. (a) The License Steering Committee shall at all times consist of six (6) representatives, three (3) of whom shall represent Sanofi and three (3) of whom shall represent BMS. The representatives of Sanofi shall be the persons serving from time to time as the (i) President and Executive Director, Sanofi Pharma (ii) Senior Vice President, Strategy, Sanofi Pharma and (iii) Vice President, Alliance Management, Sanofi Pharma. The representatives of BMS shall be the persons serving from to time as the (i) President, Worldwide Medicines Group (ii) Senior Vice President, Worldwide Franchise Management and (iii) Vice President, Alliance Management. If any such position has
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been modified or eliminated, the Party so affected shall appoint an individual whose position is substantially similar to the position so modified or eliminated. The License Steering Committee shall have the sole power, by a consensus of the representatives of Sanofi and BMS, to make any and all License Strategic Decisions and to resolve any deadlock or conflict arising among or within the License Functional Committees that has not been resolved pursuant to the Alliance Support Agreement.
(b) Each of the Marketing Working Group, the Development Committee and the Regulatory Committee shall at all times consist of any equal number of representatives of Sanofi and BMS. All representatives of each License Functional Committee shall be senior management personnel of Sanofi and BMS, respectively, or of their respective Affiliates. All recommendations and decisions made by each License Functional Committee shall be made by a consensus of the representatives of Sanofi and BMS thereon. Each License Functional Committee shall be authorized only to make recommendations to the License Steering Committee unless, and only to the extent that, it shall have received a specific written delegation of greater authority from the License Steering Committee pursuant to Section 6.9 hereof; provided, however, that each License Functional Committee shall have the authority, by a consensus of the representatives of Sanofi and BMS thereon, to make decisions on issues within such License Functional Committee’s specified scope of responsibilities as set forth in Sections 6.3-6.5 hereof, respectively.
6.7 Committee Dispute Resolution . All disputes arising within the License Steering Committee, within any License Functional Committee or among the License Functional Committees shall be resolved pursuant to Section 3.06 of the Alliance Support Agreement; provided, however, that if agreement cannot be reached with respect to [*] programs and expenses for any fiscal year pursuant to Section 3.06 of the Alliance Support Agreement, [*] programs and expenses for the previous fiscal year shall carry over to the next fiscal year, until [*] programs and expenses for the next fiscal year shall have been approved.
6.8 Cross-Territory Issues . The License Steering Committee or any License Functional Committee may agree with its counterpart committee in Territory A that certain studies, programs or plans will benefit the commercialization or development of the Products in Territory B as well as Territory A. In such case, such committee shall negotiate in good faith with its counterpart committee in Territory A to allocate any expenses related to such studies, programs or plans between the two Territories, with the expectation that, unless otherwise agreed, such expenses shall be [*].
6.9 Delegation . The License Steering Committee may, by a consensus of the representatives of Sanofi and BMS thereon, expressly and by written resolution establish any other functional committee and delegate its powers to such newly established functional committee and/or to any then existing License Functional Committee on such terms as it deems appropriate.
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ARTICLE 7
NEW INDICATION OR LINE EXTENSION
SOLE RISK SCENARIO
7.1 Sole Development . If either Sanofi or BMS wishes to pursue the development of any New Indication or Line Extension, such Party (the “ Proposing Party ”) shall propose such development to the other Party (the “ Other Party ”) in the context of the Development Committee. If the Other Party decides not to pursue such development, as evidenced by its negative vote in the Development Committee with respect to such development and irrespective of whether such Party has the Lead for the Product with respect to which such development is proposed, then the Development Committee shall submit such proposal to the License Steering Committee, which shall decide whether the Proposing Party may proceed alone with such development. If the License Steering Committee agrees to permit such sole development, the Proposing Party shall be entitled to undertake such development at its sole cost and expense.
7.2 Commercialization of Resulting Products . If the Proposing Party proceeds alone with such development pursuant to Section 7.1 hereof, the Proposing Party and the Other Party shall, and shall cause their respective Affiliates, to grant the rights for the development of such New Indication or Line Extension, as the case may be, to the Proposing Party (with the right to sub-license to its Affiliates with the consent of the Other Party (which such consent shall not be unreasonably withheld)) solely for the purposes of pursuing such development in accordance with the terms of this Agreement In the event the Proposing Party successfully develops such New Indication or Line Extension, the Proposing Party hereby acknowledges and agrees that (i) pursuant to Section 2.1 hereof, solely the Partnership shall have the right to commercialize such New Indication or Line Extension in Territory B and (ii) such commercialization shall be fully subject to and performed in accordance with the decisions and recommendations of the Alliance Strategic Committee, the License Steering Committee and the Functional Committees in accordance with this Agreement and the Alliance Support Agreement.
7.3 [*] . In the event of such sole development, the Proposing Party shall be entitled to receive [*] for such development equal to [*], which shall be [*] payable to such Party pursuant to Article 5 hereof. In the event that the Finance Committee cannot agree upon a method of [*], including the [*] under Section [*] hereof, the Proposing Party and the Other Party shall [*]. The [*], and the fees and expenses of [*] shall be [*].
7.4 Election to Participate in Development . The Other Party may reverse its election not to pursue such development, by Notice to the Proposing Party, at any time prior to the registration of such New Indication or Line Extension in the first country in Territory B in which registration is made, subject to the reimbursement of [*] of [*] costs incurred by the Proposing Party with respect to
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such New Indication or Line Extension as of the date on which such Notice is made. In the event of such reimbursement, the Proposing Party and the Other Party shall thereafter share [*] costs incurred after the date on which such Notice is made with respect to such development, and the [*] set forth in Section [*] hereof shall be [*] by [*], from [*] to [*] of Net Sales of such Product in Territory B attributable to such New Indication or Line Extension; provided, however, that only the Proposing Party shall be entitled to [*].
7.5 Period of Exclusivity . If the development undertaken by the Proposing Party results in (i) an additional period of legal and de facto exclusivity for either Product as a whole or (ii) the issuance of a new patent for such New Indication or Line Extension developed through such development resulting in legal and de facto exclusivity for such New Indication or Line Extension, then the Proposing Party also shall be entitled to [*]for additional development determined by the Finance Committee, which shall not be less than [*] nor more than [*] of Net Sales of such Product in Territory B attributable to the New Indication or Line Extension. [*] shall be payable in accordance with Article 5 hereof (x) after the date legal or de facto exclusivity of such Product would otherwise have ended until the date on which the legal or de facto exclusivity obtained as a result of the sole development terminates (whichever terminates first), in the case referred to in clause (i) above, and (y) during the life of the relevant patent, in the case referred to in clause (ii) above. This [*] shall not exceed [*] of Net Sales of such Product in Territory B, even if the conditions in both clauses (i) and (ii) above are satisfied, and shall not be reduced even if the Other Party exercises its right under Section 7.4 hereof to reverse its election not to participate in such development.
7.6 Safety and Other Problems . Notwithstanding anything to the contrary in this Article 7 or in Section 7.05(b) of the Alliance Support Agreement, if either Sanofi or BMS determines that the development of a New Indication or Line Extension should be suspended for a safety reason that it believes in good faith justifies such suspension, or reasonably believes that such development would have a material adverse effect on the overall development of Irbesartan or Clopidogrel, as the case may be, or the overall commercial viability of the resulting Product(s), such Party shall have the unilateral right to veto the development by the other Party of such New Indication or Line Extension.
ARTICLE 8
ADVERSE EVENT REPORTING
8.1 Adverse Event Reporting . BMS, Sanofi and the Partnership shall each ensure that, in the marketing of the Products in Territory B, it and each of its respective Affiliates record, investigate, summarize and review all Adverse Events and Serious Adverse Events. Each Party shall require that its Affiliates, sub-licensees and distributors adhere to all requirements of local law which relate to the reporting and investigation of Adverse Events and Serious Adverse Events, and each Party shall require that its Affiliates, sub-licensees and distributors keep such Party informed of such experiences.
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8.2 Reporting Procedure. In order that each Party may be fully informed of these experiences each Party shall report:
| (i) | In the case of Irbesartan Products, to BMS at: |
Bristol-Myers Squibb Company
P.O. Box 4000
Route 206 & Province Line Road
Princeton, NJ 08543.
United States of America
Attention: Vice President, Worldwide Safety and Surveillance
Facsimile: [omitted]
| (ii) | In the case of Clopidogrel Products, to Sanofi at: |
Sanofi Pharma
82, avenue Raspail
94255 Gentilly Cedex, France
Attention: [omitted]
Facsimile: [omitted]
all Adverse Events and Serious Adverse Events anywhere in the world; provided, however, that Serious Adverse Events shall be reported to the relevant Person within three (3) working days of a Party’ s becoming aware of such an event (a. “ Reporting Party ”) and shall be reported by facsimile as provided above. The Reporting Party shall report all other Adverse Events on a monthly basis. The Parties shall agree on an Adverse Event reporting form that may be used by the Reporting Party as a basis for such reports. Each Party shall promptly notify the relevant Person of any complaint received by it in sufficient detail and in sufficient time to allow such Person to comply with any and all regulatory requirements imposed upon it in any country. Each Party shall also advise the relevant Person of any regulatory developments (e.g., proposed recalls, labeling and other registrational dossier changes, etc.) affecting such Product in any country in Territory B. Each Party shall have the right to review and/or request copies of any and all information and reporting forms generated or received by the relevant Person with respect to Adverse Events and Serious Adverse Events. These procedures may be modified from time to time by the Regulatory Committee.
ARTICLE 9
TERM; TERMINATION
9.1 Term; Termination . (a) The term of this Agreement, with respect to each Product, shall commence on the date hereof and shall expire on the later of (x) the 15th anniversary of the first commercial sale of such Product and (y) such date as the last patent relating to such Product effective in any country in Territory B shall have expired and all other de jure exclusivity available for such Product shall have ended. Thereafter, the term of this
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Agreement may be renewed with respect to such Product for successive three-year terms, respectively, by the mutual agreement of the Parties no later than 24 months prior to the expiration of the term then in effect.
(b) Notwithstanding the foregoing, this Agreement shall automatically expire upon the earlier of (i) the termination by both Parties of the commercialization of both Products throughout Territory B as the result of a Safety Problem pursuant to Section 7.04(iii) of the Alliance Support Agreement and (ii) the exercise by BMS of the special put option pursuant to Section 7.08 of the Alliance Support Agreement.
(c) The Parties may cause the early termination of this Agreement by the mutual written consent of each of the Parties,
(d) Either Sanofi or BMS shall have the right to declare termination of this Agreement upon Notice to the other Parties, following the first to occur of:
(i) such other Party shall have (A) voluntarily commenced any proceeding or filed any petition seeking relief under Title 11 of the United States Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States, any state thereof, the French Republic or any other applicable jurisdiction, (B) applied for or consented to the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (C) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (D) made a general assignment for the benefit of creditors of all or substantially all of its assets, (E) become unable generally, or admitted in writing its inability to, pay all or substantially all of its debts as they become due or (F) taken corporate action for the purpose of effecting any of the foregoing; or
(ii) an involuntary proceeding shall have been commenced or any involuntary petition shall have been filed in a court of competent jurisdiction seeking (A) relief in respect of such other Party, or of its property, under Title 11 of the United States Code, French Law No. 84-148 of March 1, 1984, French Law No. 85-98 of January 25, 1985 or any other bankruptcy, insolvency or similar law of the United States, any state thereof, the French Republic or any other applicable jurisdiction, (B) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for such other Party or for all or substantially all of its property or (C) the winding-up or liquidation of such other Party; and such proceeding or petition shall have continued undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall have continued unstayed and in effect for thirty (30) days.
9.2 Consequences of Termination . (a) Upon the expiration or early termination of this Agreement pursuant to Section 9.1 hereof (the “ License Termination Date ”):
(i) the terms and conditions of Section 7.07 of the Alliance Support Agreement shall apply, except in the event of early termination pursuant to Section 9.1(b) hereof;
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(ii) the Partnership shall cease, and shall cause each sub-licensee (if any) to cease, all activities related to the Developed Know-How; and
(iii) the Partnership shall pay in full all amounts due to Sanofi and/or BMS hereunder within ten (10) days after the final determination of Net Sales for such period, including the License Termination Date, pursuant to Sections 5.2, 5.3 and 5.5 hereof which shall survive until the full payment of all amounts under this clause (iii).
(b) In the event of the termination of the commercialization of any Product hroughout Territory B pursuant to Section 7.04 of the Alliance Support Agreement (other than a bilateral termination of such Product as the result of a Safety Problem), the provisions of Section 9.2(a)(ii)-(iii) hereof shall apply, mutatis mutandis, with respect to such Product.
(c) In the event of the termination of the commercialization of any Product in any country(ies) of Territory B pursuant to Section 7.02 of the Alliance Support Agreement:
(i) the terms and conditions of Section 9.2(a)(ii)-(iii) hereof shall apply, mutatis mutandis, with respect to such Product in such country(ies); and
(ii) all rights and licenses granted by Sanofi and BMS hereunder with respect to such Product in such country(ies) shall revert to Sanofi and BMS, respectively, subject to Section 7.03 of the Alliance Support Agreement.
(d) Expiration or early termination of this Agreement pursuant to this Article shall be without prejudice to any rights which shall have accrued to the benefit of any Party prior to Such expiration or termination such expiration or termination shall not relieve any Party from its obligations which are expressly indicated to survive the expiration or termination f this Agreement All of the Parties’ rights and obligations under this subclause (d) and under Sections 5.4, 5.6, 8.1, 8.2, 9.2 and 11.2 -11.4 and Article 10 hereof shall survive such expiration or termination for the applicable period.
ARTICLE 10
CONFIDENTIALITY
All of the data, material and information exchanged by the Parties hereunder or related hereto (including, without limitation, the Developed Know-How) shall be subject to the confidentiality provisions of the Alliance Support Agreement as set forth in Section 5.03 thereof.
ARTICLE 11
MISCELLANEOUS
11.1 Notices . All notices, requests or other communications hereunder (collectively, “ Notices ”) shall be in writing, shall be in the English language, and shall be given or made by delivery in person, by courier service, by facsimile (with receipt confirmed) or by registered or certified mail (return receipt requested, with postage prepaid) to the respective Parties at the following addresses:
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If to Sanofi, to:
| Sanofi | ||
| 32-34, rue Marbeuf | ||
| 75008 Paris, France | ||
| Attention: | Directeur Juridique | |
| Facsimile: | [omitted] | |
| Attention: | Directeur Juridique Adjoint | |
| Facsimile: | [omitted] | |
| Attention: | Vice President, Alliance Management | |
| Facsimile: | [omitted] | |
with a copy to:
| Cleary, Gottlieb, Steen & Hamilton | ||
| 41, avenue de Friedland | ||
| 75008 Paris, France | ||
| Attention: | [omitted] | |
| Facsimile: | [omitted] | |
If to BMS, to:
|
Bristol-Myers Squibb Company P.O. Box 4000 Route 206 & Province Line Road Princeton, NJ 08543-4000 USA |
||
| Attention: |
Vice President and Senior Counsel, Pharmaceutical Research Institute, and Worldwide Franchise Management and Business Development |
|
| Facsimile: | [omitted] | |
| Attention.: | Vice President, Alliance Management | |
| Facsimile: | [omitted] | |
with a copy to:
|
Shearman & Sterling 599 Lexington Avenue New York, NY 10022 USA |
||
| Attention: | [omitted] | |
| Facsimile: | [omitted] | |
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If to the Partnership, to:
or to such other address or facsimile number as hereafter shall be furnished as provided in this Section 11.1 by any Party hereto to the other Parties hereto. All Notices given to any Party in accordance with this Section 11.1 shall be deemed to have been given on the date of receipt if delivered by hand or overnight courier service or sent by facsimile, or on the date ten (10) business days after dispatch by certified or registered mail (postage prepaid) if mailed.
11.2 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the choice of law principles that might otherwise be applied in such jurisdiction.
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11.3 Dispute Resolution . All disputes between the Parties arising in connection with this Agreement (other than those specifically referred to in Sections 5.5, 6.7 or 7.3 hereof) shall be finally settled under the Rules of Conciliation and Arbitration of the International Chamber of Commerce, and the number of arbitrators shall be three. Each of BMS (acting on its own behalf and on behalf of the Partnership) and Sanofi shall designate one arbitrator and the two so appointed arbitrators shall jointly designate the third arbitrator. If such designation is not made within fifteen days of the designation of the second party designated arbitrator, the Secretary General of the International Court of Arbitration of the International Chamber of Commerce shall designate the third arbitrator. The proceedings shall be conducted in the English language in Paris, France. The president of any arbitral tribunal shall not be a citizen of either the United States of America or the French Republic.
11.4 Specific Performance . Each Party agrees that the Developed Know-How is unique, and that a failure by any Party to perform its obligations under this Agreement will result in irreparable damage, and that specific performance of such obligations may be obtained without the posting of any bond or other security; provided however, that the powers of the arbitrators under this Section 11.4 shall be limited to enforcing the obligations provided for in this Agreement as drafted.
11.5 No Third Party Beneficiaries . This Agreement shall be binding upon and inure solely to the benefit of the Parties (including the partners of the Partnership, each in its capacity as partner thereof) and permitted sub-licensees and assigns, and nothing herein, express or implied, is intended to, or shall confer upon, any other Person any legal or equitable right, benefit or remedy of any nature whatsoever.
11.6 Assignment (a) This Agreement may be assigned by a Party only to an Affiliate of Sanofi or BMS in the event of a corporate reorganization (including an entity that becomes an Affiliate in connection with such reorganization) involving the assumption of all or substantially all of such Party’s marketing or manufacturing functions in Territory B by such Affiliate, in which event the rights may be assigned and the obligations may be delegated to such Affiliate.
(b) Notwithstanding anything to the contrary contained in subclause (a) above, this Agreement may be assigned, in whole or in part, by, or on behalf of, the Partnership as a result of a termination event under either Section 7.04 or Section 7.06 of the Alliance Support Agreement or as a result of the dissolution of the Partnership (other than for a Safety Problem) and in any such event shall be deemed to be amended and restated (i) to delete Sections 2.4, 2.5, 3.2 and 6.1-6.9 and Articles 7 and 10 hereof, as well as any reference to the Alliance Support Agreement and (ii) to insert those terms and conditions that are then customary in the pharmaceutical industry for an intellectual property license agreement, including, without limitation, provisions for confidentiality, indemnification and termination for material breach, as well as a diligence requirement that the assignee shall use reasonable commercial efforts to actively promote the Product(s) assigned (and the remedy for breach of such diligence requirement shall be termination of such amended and restated agreement).
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11.7 Severability . If any term or other provision hereof is held to be invalid, illegal or incapable of being enforced by applicable law or public policy, all other terms and provisions hereof shall nevertheless remain in full force and effect so long as the economic effect or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify . This Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.
11.8 Waivers and Amendments . No modification of or amendment to this Agreement shall be valid unless in a writing signed by the Parties referring specifically to this Agreement and stating the Parties’ intention to modify or amend the same. Any waiver of any term or condition of this Agreement shall be in a writing signed by the Party sought to be charged with such waiver referring specifically to the term or condition to be waived, and no such waiver shall be deemed to constitute the waiver of any other breach of the same or of any other provision hereof.
11.9 Headings . All titles and captions contained in this Agreement are for the convenience of reference only and shall not affect in any way the meaning or interpretation hereof.
11.10 Entire Agreement. This Agreement and the Alliance Support Agreement constitute the entire agreement of the Parties with respect to the subject matter contained herein and all prior agreements relative thereto which are not contained herein are hereby terminated.
11.11 No Partnership or Joint Venture . This Agreement is not intended to create, and nothing contained herein shall be construed to create an association, joint venture, trust or partnership, or to impose a trust or partnership covenant, obligation or liability on or with regard to the other Party. Each Party shall be severally responsible for its own covenants, obligations and liabilities as herein provided. Other than the Partnership: (i) no Party shall be under the control of, or shall be deemed to control any other Party; (ii) no Party is the legal representative, agent, joint venturer or employee of the other Party with respect to this Agreement for any purpose whatsoever, and no Party shall have the right or power to bind the other Party; and (iii) no Party has the right or authority to assume or create any obligations of any kind or to make any representation or warranty on behalf of any other Party, whether express or implied, or to bind any other Party in any respect whatsoever. The provisions of this Agreement are intended only for the regulation of relations between the Parties. This Agreement is not intended for the benefit of non-Party creditors, and no rights are granted to non-Party creditors under this Agreement.
11.12 Governing Language . The Parties acknowledge that this Agreement may be translated into the French language. The Parties agree that this English language version shall in all respects be the controlling version of this Agreement.
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11.13 Counterparts . This Agreement may be executed in one or more counterparts, each of which when executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the day and year first written above.
| SANOFI | BRISTOL-MYERS SQUIBB SANOFI PHARMACEUTICALS HOLDING PARTNERSHIP | |||||||
| By: | /s/ [signature illegible] | |||||||
| Name: | ||||||||
| Title: | Represented by: | |||||||
| BRISTOL-MYERS SQUIBB COMPANY |
BRISTOL-MYERS SQUIBB COMPANY INVESTCO INC., as General Partner |
|||||||
| By: | /s/ [signature illegible] | BY: | /s/ [signature illegible] | |||||
| Name: | Name: | |||||||
| Title: | Title: | |||||||
| Witnessed by: | ||||||||
|
SANOFI PHARMACEUTICALS, INC., a Partner |
||||||||
| By: | /s/ [signature illegible] | |||||||
| Name: | ||||||||
| Title: | ||||||||
171025
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SCHEDULE 1A
TERRITORY A 1
| Europe: | the United Kingdom | |
| Albania |
(including England, Wales, |
|
| Andorra |
Scotland, Isle of Man, Alderney, |
|
| Austria |
Northern Ireland, Channel Islands) |
|
| Belgium | Former USSR (Europe) | |
| Bulgaria |
Russia |
|
| Cyprus |
Ukraine |
|
| The Czech Republic |
Belorus |
|
| Slovakia |
Moldavia |
|
| Denmark |
Estonia |
|
| Finland |
Latvia |
|
| France (including Martinique, Guadeloupe, French Guyana, |
Lithuania |
|
|
French Polynesia, New Caledonia, Reunion and |
Vatican City State | |
|
the other Overseas Departments and Territories) |
Former Yugoslavia | |
| Germany |
(including Bosnia-Herzegovina, |
|
| Gibraltar |
Croatia, Macedonia, Montenegro, |
|
| Greece |
Serbia and Slovenia) |
|
| Greenland |
Africa :
Algeria Angola Benin Botswana Burkina Faso Burundi Cameroon |
|
| Hungary | ||
| Iceland | ||
| Irish Republic | ||
| Italy | ||
| Liechtenstein | ||
| Luxembourg | ||
| Malta and Gozo | ||
| Monaco | Cape Verde Islands | |
| Netherlands | Central African Republic | |
| Norway | Chad | |
| Poland | Comoros | |
| Portugal | Congo | |
| Romania | Djibouti | |
| San Marino | Egypt | |
| Spain | Equatorial Guinea | |
| Sweden | Eritrea | |
| Switzerland | Ethiopia | |
| Gabon | ||
| Gambia |
| 1 |
Territory A will be deemed to include any new country created by the division, consolidation or name change of the countries listed below. |
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IA-2
|
Africa (continued):
|
Asia | |
| Ghana | Afghanistan | |
| Guinea | Bahrain | |
| Guinea-Bissau | Bangladesh | |
| Ivory Coast | Bhutan | |
| Kenya | Brunei | |
| Lesotho | Cambodia | |
| Liberia | China (including Tibet) | |
| Libya |
Taiwan |
|
| Madagascar |
Macao |
|
| Malawi | Hong Kong | |
| Mali | India | |
| Mauritania | Indonesia | |
| Mayotte | Israel | |
| Mauritius, etc, | Jordan | |
| Morocco | South Korea | |
| Mozambique | Kuwait | |
| Namibia | Laos | |
| Niger | Lebanon | |
| Nigeria | Malaysia | |
| Occidental Sahara | Maldive | |
| Rwanda | Islands | |
| St Helena | Mongolia | |
|
Ascension |
Myanmar | |
|
Tristan de Cunha |
Nepal | |
| Sao Tome & Principe | Oman | |
| Senegal | Pakistan | |
| Seychelles | Philippines | |
| Siena Leone | Qatar | |
| Somalia | Saudi Arabia | |
| South Africa | Singapore | |
| Spanish Presidios: | Sri Lanka | |
|
Ceuta |
Syria | |
|
Melilla |
Thailand | |
| Sudan | Turkey | |
| Swaziland | United Arab Emirates | |
| Tanzania | Former USSR (Asia) | |
| Togo |
RSFSR (Asia) |
|
| Tunisia |
Armenia (Hyastan) |
|
| Uganda |
Azerbaidjan |
|
| Zaire |
Turkmenistan |
|
| Zambia |
Uzbekistan |
|
| Zimbabwe |
Tadjikistan |
|
|
Kazakhstan |
||
|
Kirghizia |
||
| Vietnam | ||
| Yemen |
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SCHEDULE 1B
TERRITORY B 2
| North America: | Oceania: | |
| Canada | Australia | |
| Mexico | Fiji | |
| United States of America | Micronesia | |
|
(including Puerto Rico, US Virgin |
(including Caroline, Kiribati, |
|
|
Islands, Guam, American Samoa) for |
Mariana and Marshall Islands) |
|
|
Clopidogrel only
Central America and the West Indies :
Anguilla Antigua Aruba Bahamas Barbados Belize Bermuda Cayman Islands Costa Rica Dominica Dominican Republic Grenada Guatemala Haiti Honduras Jamaica Montserrat |
Nauru New Zealand Papua New Guinea Pitcairn Islands Samoa (non-US) Solomon Islands Tonga Tuvalu Vanuatu
South America:
Argentina Bolivia Brazil Chile Colombia Ecuador Falkland Islands Guyana Paraguay |
|
| Netherlands Antilles | Peru | |
| Nicaragua | Surinam | |
| Panama | Uruguay | |
| St. Kitts-Nevis | Venezuela | |
| St. Lucia | ||
| St. Vincent and the Grenadines | ||
| El Salvador | ||
| Trinidad and Tobago | ||
| Turks and Caicos Islands | ||
| Virgin Islands (British) |
| 2 | Territory B will be deemed to include any country created by the division, consolidation or name change of the countries listed below. |
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EXHIBIT 6.1-A
RECOMMENDED PRODUCT PROFILES. CLAIM STRUCTURES
AND DOSAGES
FOR FILE SUBMISSIONS
Description: Recommended indications, major claims and dosage
PRODUCT :
Product Profile:
Indications:
Major Claims:
Dosage:
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EXHIBIT 6.1-B
CORE POSITIONING STRATEGIES / KEY MESSAGES 3
Description: Outline of core position and key messages
PRODUCT :
Core Positioning Strategy:
Key Messages:
| 3 | Promotional messages may be developed in each country to address local needs and conditions so long as they are consistent with the core positioning strategies and key messages. |
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EXHIBIT 6.1-C
CENTRALLY FUNDED PROGRAMS AND EXPENSES
PRODUCT :
|
1996
Projection |
1997 Budget |
1997
Total |
1998
Estimate |
|||||||||||
|
U.S.$ 000 |
1st Q | 2nd Q | 3rd Q | 4th Q | ||||||||||
|
Meetings / Symposia / Roundtables |
||||||||||||||
|
Advertising |
||||||||||||||
|
Advisory Boards/Consultants |
||||||||||||||
|
Agency Fees |
||||||||||||||
|
Regulatory Fees |
||||||||||||||
|
Phase IIIB/IV (1) |
||||||||||||||
|
Phase V Trials (1) |
||||||||||||||
|
Total |
||||||||||||||
| (1) | Includes all costs: tablets, investigators, etc. |
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EXHIBIT 6.1-D
OVERALL PRICING GUIDELINES
Description: Range and rationale for recommended pricing guidelines
PRODUCT :
Overall pricing guidelines:
Rationale:
Comparative competitive products:
Market conditions:
Product differentiation:
Other:
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EXHIBIT 6.1-E
PHASE IIIB STUDIES, DIFFERENTIATION PROGRAMS
AND STUDIES FOR NEW INDICATIONS AND LINE EXTENSIONS
Description:
PRODUCT :
Priority Studies
|
Study |
Objective |
Start
|
Completion Date |
Total Cost |
||||
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Exhibit 10.12
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RESTATED
DEVELOPMENT AND COMMERCIALIZATION
COLLABORATION AGREEMENT
between
OTSUKA PHARMACEUTICAL CO., LTD.
and
BRISTOL-MYERS SQUIBB COMPANY
TABLE OF CONTENTS
| Page | ||||||
| 1. | DEFINITIONS | 2 | ||||
| 1.1. | “Affiliate” | 2 | ||||
| 1.2. | “Attributable Bulk” | 2 | ||||
| 1.3. | “BMSLC” | 2 | ||||
| 1.4. | “BMS-OAPI Product Supply Agreement” | 2 | ||||
| 1.5. | “Bulk Tablets” | 2 | ||||
| 1.6. | “Business Days” | 2 | ||||
| 1.7. | “Call” | 2 | ||||
| 1.8. | “Carcinogenicity Study” | 3 | ||||
| 1.9. | “Commercialization” | 3 | ||||
| 1.10. | “Competitive Product” | 3 | ||||
| 1.11. | “Compound” | 3 | ||||
| 1.12. | “Compound Form” | 3 | ||||
| 1.13. | “Co-Promotion” | 3 | ||||
| 1.14. | “Co-Promotion Countries” | 3 | ||||
| 1.15. | “Distributor” | 3 | ||||
| 1.16. | “Effective Date” | 4 | ||||
| 1.17. | “EMEA” | 4 | ||||
| 1.18. | “European Union” | 4 | ||||
| 1.19. | “FDA” | 4 | ||||
| 1.20. | “Field” | 4 | ||||
| 1.21. | “First Commercial Sale” | 4 | ||||
| 1.22. | “Global Floor Price-Based Adjustment” | 4 | ||||
| 1.23. | “Improvements” | 5 | ||||
| 1.24. | “IND” | 5 | ||||
| 1.25. | “JCC” | 5 | ||||
| 1.26. | “Launch Date” | 5 | ||||
| 1.27. | “MAA” | 5 | ||||
| 1.28. | “Marketing Plan(s)” | 5 | ||||
| 1.29. | “NDA” | 5 | ||||
| 1.30. | “Net Sales” | 5 | ||||
| 1.31. | “Neuroscience Indication” | 6 | ||||
| 1.32. | “Non-Commercial Compound Price” | 7 | ||||
| 1.33. | “Non-Patent Country” | 7 | ||||
| 1.34. | “OAPI” | 7 | ||||
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iii
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iv
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| 13. | TRANSITION PROVISIONS | 88 | ||||
| 13.1. | Transfer of Rights; Contract Manufacture | 88 | ||||
| 13.2. | Continued Collaboration | 89 | ||||
| 13.3. | Special Transition in EU/US | 89 | ||||
| 13.4. | Survival | 90 | ||||
| 14. | DISPUTE RESOLUTION | 90 | ||||
| 14.1. | Generally | 90 | ||||
| 14.2. | Injunctive Relief | 90 | ||||
| 15. | MISCELLANEOUS | 90 | ||||
| 15.1. | Compliance With Laws | 90 | ||||
| 15.2. | No-Hire Clause | 91 | ||||
| 15.3. | Force Majeure | 91 | ||||
| 15.4. | Notices | 91 | ||||
| 15.5. | Entire Agreement; Related Agreements | 92 | ||||
| 15.6. | Waivers and Amendments | 92 | ||||
| 15.7. | Severability | 93 | ||||
| 15.8. | No Partnership | 93 | ||||
| 15.9. | Section Headings | 93 | ||||
| 15.10. | Counterparts | 93 | ||||
| 15.11. | Further Assurances | 93 | ||||
| 15.12. | Assignment | 93 | ||||
| 15.13. | Governing Law | 94 | ||||
APPENDICES:
| Appendix A: | List of Patents | |
| Appendix B: | Target Product Profile | |
| Appendix C: | Otsuka Clinical Studies (including Ongoing Clinical Studies) | |
| Appendix D: | Product Development Plan (agreed Full Development and Commercialization Plan to be attached or incorporated by reference) | |
| Appendix E: | Clinical Studies Key to Japanese Approval | |
| Appendix F: | Adverse Event Report Process; Post-Marketing Surveillance |
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RESTATED
DEVELOPMENT AND COMMERCIALIZATION
COLLABORATION AGREEMENT
This Restated Development and Commercialization Collaboration Agreement (this “Agreement”) is made and entered into as of October 23, 2001 (the “Restated Agreement Date”), by and between OTSUKA PHARMACEUTICAL CO., LTD. (“Otsuka”), a corporation organized and existing under the laws of Japan, having a principal place of business at 2-9, Kanda Tsukasa-cho, Chiyoda-ku, Tokyo, Japan, and BRISTOL-MYERS SQUIBB COMPANY (“BMS”), a corporation organized and existing under the laws of Delaware, having a principal place of business at Route 206 and Province Line Road, Princeton, New Jersey 08540, USA. This Agreement amends and restates that certain Development and Commercialization Collaboration Agreement between Otsuka and BMS dated September 20, 1999. The Effective Date of the Agreement, as amended and restated here, remains September 20, 1999.
RECITALS
A. Otsuka has developed a compound known as Aripiprazole (the “Compound”) and possesses certain patent rights, know-how, data and information related to such Compound;
B. BMS has considerable experience developing, obtaining regulatory approval of, and commercializing prescription drugs worldwide;
C. In order to complete the development of the Compound into an approved prescription drug and to bring the product to market at the earliest appropriate time, Otsuka has decided that it is necessary to contract with BMS for drug development and commercialization services on Otsuka’s behalf, and BMS agrees to provide such services, on the terms and conditions set forth in this Agreement; and
D. The parties believe this collaboration is essential to complete the development of the Compound and to optimize its commercial potential, to their financial benefit and to the benefit of human health worldwide.
AGREEMENT
NOW, THEREFORE, Otsuka and BMS agree as follows:
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1. DEFINITIONS
1.1. “Affiliate” of a party shall mean any corporation, firm, association, joint venture, partnership or other entity that directly or indirectly owns or controls, is owned, or controlled by or is under common ownership or control with such party. “Control” of an entity shall mean beneficial ownership of at least fifty percent (50%) of the voting equity or other ownership interests of the entity in question, conferring on the entity who holds such interests the power directly or indirectly to elect a majority of the board of directors or other managing authority of the entity or otherwise to direct the affairs of such corporation, firm, association, joint venture, partnership or other entity.
1.2. “Attributable Bulk” shall have the meaning set forth in Section 5.11.2.
1.3. “BMSLC” shall mean Bristol-Myers Squibb Laboratories Company, a wholly-owned subsidiary of BMS.
1.4. “BMS-OAPI Product Supply Agreement” shall mean, collectively, those certain agreements by which BMS supplies Product for sale in the United States, as described in Section 5.11.6.
1.5. “Bulk Tablets” shall mean the Product containing Compound in tablet form, supplied in bulk (not packaged) quantities, the formulation and specification of such tablets to be as used in the Ongoing Clinical Studies or in such other form(s) as the PDC deems appropriate. For the avoidance of doubt, the Bulk Tablets formulation excludes, and is different from, the Product in the “flash-melt” formulation.
1.6. “Business Days” shall mean the work days (exclusive of weekends and holidays) at the principal place of business of the party burdened with the obligation or undertaking under this Agreement to respond or act within a specified number of Business Days.
1.7. “Call” shall mean a visit by a professional sales representative to a physician or other health care professional licensed to prescribe, dispense or administer prescription drugs, or to an authorized representative of a prospective organizational purchaser of Product, which visit is for the purpose of promoting the sale of Product.
1.8. “Carcinogenicity Study” shall mean that certain two-year carcinogenicity study in rats being conducted by BMS pursuant to a Memorandum of Agreement between BMS and Otsuka effective as of March 29, 1999.
1.9. “Commercialization” shall mean advertising, marketing, promotion, sale and distribution of a product, and activities related thereto, including without limitation those specified in Section 5.3.2(b). When used as a verb, “Commercialize” means to engage in such activities.
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1.10. “Competitive Product” shall have the meaning set forth in Section 7.2.
1.1 1. “Compound” shall mean the chemical compound with the following formula: 7-{4- [4-(2,3-dichlorophenyl)-1-piperazinyl]butoxy}-3,4-dihydro-2(1 H)-quinolinone, in the chemical form as used in the Ongoing Clinical Studies, known as Aripiprazole.
1.12. “Compound Form” shall mean any of the salts, esters, amides, hydrates, solvates and metabolites of the Compound.
1.13. “Co-Promotion” shall mean promotion of the Product by BMS and Otsuka (and their Affiliates) under a single regulatory approval, registration and Trademark. When used as a verb, “Co-Promote” shall mean to engage in such activities.
1.14. “Co-Promotion Countries” shall mean the United States of America and its territories and possessions, France, Spain, Germany and the United Kingdom, and Italy if it becomes legally permissible to Co-Promote in Italy.
1.15. “Distributor” shall have the meaning set forth in Section 5.3.12.
1.16. “Effective Date” shall mean September 20, 1999.
1.17. “EMEA” shall mean the European Agency for the Evaluation of Medicinal Products.
1.18. “European Union” shall mean (i) the member countries of the European Union (i.e., as of the Restated Agreement Date, Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxemburg, Netherlands, Austria, Portugal, Finland, Sweden and the United Kingdom); (ii) those additional countries that here after become members of the European Union; and (iii) for purposes of this Agreement (except to the extent expressly provided otherwise), Norway, Switzerland and Iceland.
1.19. “FDA” shall mean the United States Food and Drug Administration, or the successor thereto.
1.20. “Field” shall mean, in the case of Product containing Compound or a Compound Form, prescription pharmaceutical agents for all uses and indications in humans; in the case of Product containing a Related Compound, “Field” shall mean prescription pharmaceutical agents for all Neuroscience Indications in humans. For the sake of clarification, “Field” excludes, and the scope of the Commercialization rights granted by Otsuka to BMS in this Agreement does not include, any products containing a Related Compound for any uses or indications other than Neuroscience Indications in humans.
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1.21. “First Commercial Sale” shall mean, in each country of the Territory, the date that Product (or a Competitive Product, as applicable in Section 7) is first sold pursuant to an approved NDA or MAA in a commercial transaction intending that Product (or Competitive Product, as the case may be) be used by an end user. For the sake of clarification, Product (or Competitive Product, as the case may be) sold, distributed or used only for clinical trials or experimental purposes shall not establish the date of First Commercial Sale.
1.22. “Global Floor Price-Based Adjustment” shall have the meaning set forth in Section 5.11.3.
1.23. “Improvements” shall have the meaning set forth in Section 4.5.5.
1.24. “IND” shall mean Investigational New Drug Application fled with the FDA.
1.25. “JCC” shall mean the Joint Commercialization Committee described in Section 5.1.
1.26. “Launch Date” shall mean the first date on which the Product is actively detailed in a country in the Territory.
1.27. “MAA” shall mean a Marketing Authorization Application or other application fled with the regulatory authorities of a country, or with an agency representing a group of countries, including the EMEA, outside the United States to obtain marketing authorization for a pharmaceutical product in such country or countries. “MA” shall mean the Marketing Authorization resulting from the approval of an MAA.
1.28. “Marketing Plan(s)” shall have the meaning set forth in Section 5.2.
1.29. “NDA” shall mean a New Drug Application fled with the FDA.
1.30. “Net Sales” in a country or region shall mean, with respect to Product, the gross amount invoiced by Otsuka, BMS or their respective Affiliates (or by BMS’s Sublicenses in the Rest of Territory) to non-Affiliate third-party purchasers for the sale or distribution of Product in such country or region, as the case may be, in the Territory, less the following amounts, but only to the extent included in the invoiced amount:
(i) customary trade, quantity and cash discounts actually allowed (exclusive of discounts given to promote sales of product other than Product); (ii) customary rebates, allowances, chargebacks, credits, refunds and other price adjustments actually granted and made to customers for rejected, returned or recalled goods, or price reductions; (iii) rebates, credits, charge-back and prime vendor rebates, fees, reimbursements or similar payments or credits granted or given to wholesalers and other distributors, buying groups, health care insurance carriers, pharmacy benefit management companies, health maintenance
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organizations or other institutions or health care organizations, and price reductions/adjustments required by law, regulations or contract, including, without limitation, those paid in connection with sale of Product to governmental or regulatory authorities or programs; (iv) transportation and insurance costs incidental to the sale of Product; and (v) any tax, tariff customs duties, excise or other duties or other governmental charge (other than an income tax) levied on the sale, transportation or delivery of Product and borne by the seller thereof. Such deductions shall in each case be related specifically to the Product (except to the extent this is not practicable, in which event such deductions shall be allocated in the ratio of gross sales of the Product to the total gross sales of all products to which such deductions apply) and shall be actually allowed to or taken by non-Affiliate third-party purchasers and not otherwise recovered by or reimbursed from the third-party purchasers to BMS, Otsuka or their Affiliates or Sublicensees. For the sake of clarification, no sales to BMS’s, Otsuka’s or their Affiliates’ or Sublicensees’ distributors or agents shall, unless they are non-Affiliate third-party purchasers, be considered as sales for the purpose of this definition, and only sales (and all sales) to non-Affiliate third-party purchasers shall be the basis for determining the amount of Net Sales; provided that, if BMS, Otsuka or their Affiliates or Sublicensees furnish Product directly or indirectly to an end user in a commercial transaction for which BMS, Otsuka or their Affiliates or Sublicensees receive consideration other than in the form of cash, or if BMS, Otsuka or their Affiliates or Sublicensees are the ultimate commercial end users of Product, the value of Product so furnished or used shall be included in Net Sales; in such case, Net Sales of Product so furnished or used by BMS, Otsuka or their Affiliates or Sublicensees shall be determined by multiplying the quantity of Product so furnished or used during a given calendar quarter by the average selling price of Product to non-Affiliate third-party purchasers in the same country during the same calendar quarter. In the case of a Product containing the Compound, a Compound Form or a Related Compound in combination with other active therapeutic ingredients, Net Sales of such combination product shall be determined as follows: Net Sales as defined above shall be multiplied by a fraction, the numerator of which shall be the average selling price of such quantity of Product as contains one (1) gram of the Compound, the Compound Form or the Related Compound as the sole active therapeutic ingredient, and the denominator of which shall be the average selling price of such quantity of combination Product as contains one (1) gram of the Compound, the Compound Form or the Related Compound.
1.31. “Neuroscience Indication” shall mean any indication for the treatment in humans of schizophrenia, schizo-affective disorder, psychotic disorder, anxiety, panic disorder, attention deficit disorder, Alzheimer’s dementia, bipolar disorder, obsessive-compulsive disorder, Huntington’s Chorea, Tourette syndrome and any other indication that rises from the pharmacological action of Compound, a Compound Form or a Related Compound on the central nervous system.
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1.32. “Non-Commercial Compound Price” shall have the meaning set forth in Section 5.11.2(a)(5).
1.33. “Non-Patent Country” shall mean any country in the Rest of Territory in which no Patent Rights exist on the date of First Commercial Sale of Product in such country covering the Product being sold.
1.34. “OAPI” shall mean Otsuka America Pharmaceutical, Inc., an Affiliate of Otsuka in the United States.
1.35. “Ongoing Clinical Studies” shall mean those clinical studies identified as such in Appendix C. Ongoing Clinical Studies are a subset of Otsuka Clinical Studies.
1.36. “Otsuka-BMS Compound Supply Agreement” shall mean, collectively, those certain agreements by which Otsuka supplies Compound to BMS for formulation into Product for sale in the United States and the Rest of Territory, as described in Section 5.11.5.
1.37. “Otsuka Clinical Studies” are those clinical studies identified in Appendix C, comprised of the Ongoing Clinical Studies listed in Part A of Appendix C and eight (8) additional specified studies listed in Part B of Appendix C.
1.38. “Patent Country” shall mean any country in the Rest of Territory in which a Patent Right exists on the date of First Commercial Sale of Product in such country covering the Product being sold.
1.39. “Patent Rights” shall mean the patents listed in Appendix A and all other patents and patent applications (and patents issuing from such applications) that become owned, solely or jointly, by Otsuka or any of its Affiliates during the term of this Agreement or to which Otsuka or any of its Affiliates otherwise have or acquire the right to grant licenses or sublicenses in the Territory, and which generically or specifically relate to the Compound, Compound Form(s), Related Compound(s) or Product; in each case including all divisionals, continuations, continuations-in-part, reissues, renewals, reexaminations, extensions and substitutions, and all applications therefor, and all counterparts thereof throughout the Territory.
1.40. “PDC” shall mean the Product Development Committee described in Section 4.1.
1.41. “Primary Position” shall mean a product presentation in a Call in which the sales representative promotes a particular product first in the Call and emphasizes and promotes that product more than any other product in the Call.
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1.42. “Product” shall mean any prescription, finished, human pharmaceutical product, in any formulation, in the Field containing Compound, a Compound Form or a Related Compound.
1.43. “Product Development Plan” shall mean that Full Development and Commercialization Plan described in Section 4.2 developed and approved by the PDC, and modifications and updates thereto approved by the PDC from time to time.
1.44. “Purchase Price” shall have the meaning set forth in Section 5.11.2.
1.45. “Quarterly Adjustment” shall have the meaning set forth in Section 5.11.2.
1.46. “Related Agreements” shall mean the Otsuka-BMS Compound Supply Agreement, the BMS-OAPI Product Supply Agreement, and the other agreements described in Section 15.5.
1.47. “Related Compound” shall mean any compound, other than the Compound and Compound Forms, that is covered by U.S. Patent Rights or which, if included in and made, used or sold as products in the United States prior to expiration of the U.S. Patent Rights, would infringe the U.S. Patent Rights.
1.48. “Reserved Territory” shall mean Japan, People’s Republic of China, Republic of China (Taiwan), North Korea, South Korea, The Philippines, Thailand, Indonesia, Pakistan and Egypt, subject to any removal of one or more countries from the Reserved Territory as provided in Section 5.4.2(a).
1.49. “Rest of Territory” shall mean the countries in the Territory outside of the European Union and the United States.
1.50. “Royalty Term” shall mean, with respect to each of the Patent Countries, the period beginning on the date of the First Commercial Sale of Product in such Patent Country and ending either (i) for all Patent Countries taken as a group, and not on a country-by-country basis, on the date when there is no longer any Valid Claim under the Patent Rights covering the Product being sold in any country within the group of Patent Countries, or (ii) on a country-by-country basis within the group of Patent Countries, on the date that is ten (10) years after the last day of the month in which the First Commercial Sale of Product in such country occurred, whichever date occurs later. With respect to each of the Non-Patent Countries, “Royalty Term” shall mean the period beginning on the date of the First Commercial Sale of Product in such Non-Patent Country and ending, on a country-by-country basis within the group of Non-Patent Countries, on the date that is ten (10) years after the last day of the month in which the First Commercial Sale of Product in such country occurred. For purposes of this Section 1.50, “Valid Claim” shall mean a Valid Claim in a Patent Right which would be infringed by the manufacture, use or sale of the Product being sold absent a license under
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such Patent Right. The foregoing applies to royalties due on Net Sales in the Rest of Territory, in accordance with Section 5.9.2(a). Royalties due on Net Sales in the United States shall be paid in accordance with Section 5.11.7.
1.51. “Secondary Position” shall mean a product presentation in a Call in which the sales representative promotes a particular product second in the Call and emphasizes and promotes that product more than any other product in the Call except for the product in the Primary Position.
1.52. “Sublicensee” shall mean any person or entity to which BMS sublicenses any of the rights granted in Section 5.4 of this Agreement pursuant to Sections 5.4.1(b) or 5.4.2.
1.53. “Target Product Profile” shall be as set forth in Appendix B hereto.
1.54. “Tentative Price” shall have the meaning set forth in Section 5.11.2(b).
1.55. “Territory” shall mean the entire world except for the Reserved Territory; provided that hereafter countries may be removed from and added to the Territory in accordance with the provisions of this Agreement.
1.56. “Trademark” shall mean any trademark, trade name, domain name, brand name, logo and design, whether registered or not, used during the term of this Agreement in connection with the identification, promotion, marketing or sale of Product in the Territory.
1.57. “U.S. Patent Rights” shall mean U.S. Patent No. 4,734,416 (including, for the sake of clarification, its divisional: U.S. Patent No. 4,824,840) and U.S. Patent No. 5,006,528, and all divisionals, continuations, continuations-in-part, reissues, renewals, reexaminations, extensions and substitutions, and all applications therefor.
1.58. “Valid Claim” shall mean a claim in a Patent Right which has not expired, lapsed, been canceled or become abandoned and has not been finally found to be invalid or unenforceable by an unreversed or an unappealable final decision or judgment of a court of other governmental authority of competent jurisdiction.
2. BACKGROUND AND SCOPE OF COLLABORATION
Through years of extensive and costly research and development, Otsuka has developed the Compound, which it believes can be developed into Product having considerable worldwide commercial and therapeutic potential. Recognizing the high cost and complexity of necessary further development, and the significant accompanying commercial risks, Otsuka has concluded that, in order to achieve the full potential of the Compound and Product, it is necessary to collaborate with another company. BMS has
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considerable experience developing, obtaining regulatory approval of and commercializing prescription drugs worldwide, and BMS shares Otsuka’s views as to the commercial and therapeutic potential of the Compound and Product.
Accordingly, as provided in this Agreement, Otsuka and BMS agree to collaborate on the continued development and Commercialization of Product. The parties believe this collaboration, on the terms and conditions set forth in this Agreement, is essential to achieve the goal of completing the development of Product and making it available to customers throughout the Territory at the earliest possible time. The parties hope to achieve commercial success through this collaboration, and they also believe that this collaboration will be to the benefit of human health worldwide.
As described in detail in this Agreement, Otsuka hereby retains BMS, as a contract service provider on behalf of Otsuka in the United States and the European Union, to continue the development of Product in collaboration with Otsuka and to Commercialize the Product in collaboration with Otsuka. Otsuka or its Affiliates will be the holder of the Product NDA in the United States and the MA(s) in the European Union, and, to the maximum extent permissible, BMS will Commercialize Product in the United States and the European Union on behalf of Otsuka, under Otsuka Trademark(s), recording Product sales in the name of Otsuka or its Affiliates. Otsuka retains the option to Co-Promote Product in the United States and the other Co-Promotion Countries in the European Union. Otsuka also retains the Reserved Territory for its Commercialization.
As provided below, BMS has an exclusive license to Commercialize Product in the Rest of Territory (countries in the Territory outside the United States and the European Union).
3. MILESTONE PAYMENTS
3.1. Milestone Payments .
In partial consideration of the commercialization rights granted to it in this Agreement, BMS shall pay the following amounts to Otsuka, in accordance with Section 5.9.6, at the times indicated:
3.1.1 Execution of the Agreement .
[*] within ten (10) Business Days of the Effective Date of this Agreement;
3.1.2 NDA .
[*] within thirty (30) days of the filing of the first NDA for Product in the United States.
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3.1.3 MAA .
[*] within thirty (30) days of the fling of the first MAA for Product in the European Union or any country thereof.
3.1.4 NDA Approval .
[*] within thirty (30) days of the first NDA approval for Product in the United States.
3.1.5 MAA Approval .
[*] within thirty (30) days of the first MAA approval for Product in the European Union or any country thereof.
3.2. No Refunds; Other Payments .
Except only as provided in Section 12.2(b) (referring to the refund of certain milestone payments in the event of termination due to QTc problem), under no circumstances are the payments under Section 3.1 refundable to BMS, or creditable against royalties or any other payments due from BMS to Otsuka, or subject to setoff against amounts due from Otsuka to BMS. The payments described in Section 3.1 are in addition to other payments to be made by BMS to Otsuka, and by Otsuka to BMS, as provided elsewhere in this Agreement. Otsuka shall have the right to retain all milestone and other payments received from BMS prior to any early termination of this Agreement, except as provided in Section 12.2(b).
4. PRODUCT DEVELOPMENT; REGULATORY MATTERS
4.1. Product Development Committee .
4.1.1 Formation of the PDC .
Immediately after the Effective Date, BMS and Otsuka formed a Product Development Committee (the “PDC”), which committee shall coordinate, oversee and direct the development efforts and related regulatory matters for Product throughout the Territory and the parties’ efforts and activities in connection therewith. It is intended that each party have equal status, representation and decisionmaking power with respect to all PDC matters.
4.1.2 PDC Composition and Governance .
Each party shall have equal representation and participation on the PDC. Each party shall have (in its discretion) up to seven (7) members on the PDC, shall designate members on the PDC in writing, and shall promptly advise the other party if it substitutes
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any of its members. If one or more members of the PDC are unable to attend by a meeting, the party that appointed the non-attending member or members may designate a substitute or substitutes, as the case may be, to serve in place of the absent member or members. The parties shall each be entitled to cause such other representatives as they may deem necessary or appropriate to attend and participate in PDC meetings from time to time.
The PDC shall be co-chaired by an Otsuka member and a BMS member (each a “Co-Chair”) designated by the respective parties. All decisions of the PDC shall be approved in writing by both Co-Chairs. All decisions shall require the unanimous, affirmative vote of the parties, with each party entitled to one vote on the PDC regardless of the number of members attending the meeting. Each party’s vote shall be cast by its Co-Chair or the Co-Chair’s designee. In the event that the parties fail to reach a unanimous decision on any issue before the PDC, the issue shall be referred to and resolved as quickly as reasonably possible by the joint decision of the respective heads of the parties’ research and development divisions (currently Mr. Kazuhiro Tomita in the case of Otsuka, and Dr. Peter S. Ringrose in the case of BMS); disagreements not resolved at that level shall be referred to and resolved in accordance with Section 14.
The PDC shall establish such PDC subcommittees as it deems appropriate to address the issues falling within its purview, such subcommittees to have equal representation and participation by both parties, with the same governance as described above (each party to appoint a Co-Chair; each Co-Chair to have one vote; decisions to be unanimous, failing which they shall be referred up to the PDC). The PDC shall coordinate closely with the JCC, including (without limitation) with respect to studies to be conducted under the authority of the PDC deemed by the JCC to be advisable to optimize the commercialization of Product.
4.1.3 Meetings .
The PDC shall meet as frequently as either party may reasonably request and at such times and places as they select but, in any event, at least twice yearly throughout the term of this Agreement (unless the parties mutually agree that no further meetings are necessary). Unless the Co-Chairs agree otherwise in writing, the location of meetings of the PDC shall alternate between the offices of BMS and the offices of Otsuka, with the first meeting to be held at BMS’s offices. All costs of participation by each member in the activities of the PDC shall be borne by the party appointing such member. The Co-Chairs shall appoint a secretary who shall maintain the records of the PDC and shall keep minutes of the meetings of the PDC. The records and minutes shall be subject to written ratification by the Co-Chairs, and the secretary shall distribute minutes to all members of the PDC. Any PDC matter may be decided by the Co-Chairs jointly without submission for review by all PDC members.
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4.1.4 Responsibilities of the PDC .
As provided in Section 4.2, the PDC shall meet promptly after the Effective Date in order to approve a plan (the Product Development Plan) for the rapid and orderly continuation of the development of Product in conformity with all applicable regulatory requirements and for the carrying out of clinical studies to be sponsored by BMS and Otsuka, respectively. The PDC shall be an ongoing, operational committee (and not merely an advisory body) responsible for both decisionmaking and supervision of the implementation of all phases of the development process, including post-marketing development, and all related regulatory matters. The PDC shall have final authority regarding necessary or advisable clinical studies to be conducted in order to optimize the Commercialization of Product, shall review the implementation of the Product Development Plan, and shall discuss and agree upon any additions or modifications to the Product Development Plan. In addition (and without limitation), the PDC shall discuss and agree upon the regulatory approval, including product labeling, for Product in the Territory, related strategies, and any issues or questions raised by any governmental agency or regulatory body in the Territory regarding Product or its development or regulation. Further, the PDC shall discuss and approve plans for, and the status of efforts in connection with, the development of new Product indications and formulations. Without limiting the above, the PDC shall have responsibility for decisionmaking regarding, and supervision of the implementation of new indications and formulations; all pre-launch and post-launch clinical studies (including, without limitation, Phase IIIb and Phase IV studies); pharmacoeconomic studies; registration and ongoing regulatory matters (FDA, DDMAC, EMEA or otherwise); product labeling; and chemistry, manufacture and control (CMC; including specifcations for Compound and Product); but excluding government reimbursement pricing, which shall be the responsibility of the JCC.
4.2. Product Development Plan .
After the Effective Date, BMS developed a proposed overall, continuing plan for the development, regulatory approval and continuing study of Product in the Territory. BMS submitted a draft of the plan (the Full Development and Commercialization Plan) to the PDC for its consideration, modification as it deemed appropriate, finalization and approval. After such consideration and modification, the PDC approved the plan (as indicated by the written approval of the Co-Chairs of the PDC). The Full Development and Commercialization Plan approved by the PDC is set forth or incorporated by reference in Appendix D and is hereby incorporated into this Agreement (such plan, as it is approved and as it may hereafter be modified and updated by the PDC, is referred to as the “Product Development Plan”). Each party shall use all commercially reasonable efforts to carry out its respective obligations under the Product Development Plan. The Product Development Plan sets forth, and shall continue to set forth, the detailed outlines and timelines of the scientific, medical, clinical, regulatory and other activities to be
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undertaken for the purpose of obtaining, as soon as reasonably practicable, initial and subsequent marketing approvals, providing market support, and developing any and all indications, formulations, dosage and dosing regimes for Product, all of which activities shall be undertaken by BMS and Otsuka at their respective risk and expense in accordance with the delineation of obligations set forth in Sections 4.3.2 and 4.3.3 (unless the parties mutually agree otherwise in writing). Such timelines shall include, without limitation, projected fling dates for the NDA in the United States and an MAA in the European Union. In developing and modifying the proposed Product Development Plan, and during the course of its implementation, BMS shall take into consideration such of Otsuka’s clinical, regulatory, commercial and scheduling requirements for the development, regulatory approval and marketing of Product in the Reserved Territory as Otsuka communicates to the PDC from time to time. Without limiting the above, BMS recognizes that there will be certain clinical studies, identified in Appendix E, that are essential to regulatory approval of Product in Japan (part of the Reserved Territory), and that may also be required or desirable for the registration or Commercialization of Product in the Territory; to the extent practicable, the parties, in developing and implementing the Product Development Plan, shall give consideration to Otsuka’s desire that BMS expeditiously complete such studies (and analyze the results of, and obtain final reports regarding, such studies); provided, however , if the PDC determines that any study listed in Appendix E is not required or desirable for registration or Commercialization of Product in the Territory, then BMS shall have no obligation to perform or pay for such study. BMS and Otsuka will also cooperate with one another, and with governmental agencies, in complying with requests from such agencies for the verification of clinical data and the inspection of foreign clinical sites relating to the approval and marketing of Product.
4.3. Obligations for Product Development .
4.3.1 Co-Development .
The parties intend that the development of Product be a joint endeavor between them, not only with respect to decisionmaking, but also in the implementation of the Product Development Plan. Accordingly, as provided in greater detail in Section 5.7 below, representatives of Otsuka shall be closely involved in the implementation of the Product Development Plan and all other plans and programs adopted by the PDC and in the activities and deliberations, including at the staff level, leading to the formulation of strategy and plans prior to PDC decisions and thereafter. BMS agrees to involve Otsuka as participant in all activities with respect to planning, development (including protocol development) and implementation of the clinical studies to be carried out by BMS.
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4.3.2 Otsuka Obligations for Product Development .
Otsuka shall be and shall remain (subject to the terms of this Agreement) ultimately and solely responsible for carrying out to completion the Otsuka Clinical Studies listed in Appendix C, at its sole cost, expense and risk. Notwithstanding the foregoing, Otsuka shall be deemed to have completed the Otsuka Clinical Studies upon providing raw datasets, tables and listings to BMS; whereupon BMS shall, at its sole cost, expense and risk, be responsible for data compilation and analysis and preparation of study reports based thereon, in each case with the full participation and involvement of Otsuka. Otsuka shall also fund the Carcinogenicity Study being conducted by BMS.
4.3.3 BMS Obligations for Product Development .
Other than the Otsuka Clinical Studies undertaken by Otsuka as provided in Section 4.3.2, BMS shall be and shall remain (subject to the terms of this Agreement) ultimately and solely obligated, at its expense, to implement all decisions of the PDC relating to the development, clinical studies and regulatory approval and regulatory compliance of Product in the Territory. Without limiting the foregoing, BMS shall be ultimately and solely obligated for carrying out to completion all pre-launch and post-launch clinical studies and all other Product-related studies as the PDC deems appropriate, at its sole cost, expense and risk (including, without limitation, the Olanzapine Comparison Study and the Bipolar Depression Study).
BMS will conduct with due diligence and all commercially reasonable efforts, consistent with the objective of this Agreement as set forth in Sections 2 and 5.10, and with no less a commitment of effort and resources than BMS commits to the development of products with similar market potential, and at its sole risk, responsibility and expense (except for Otsuka’s funding and responsibility in respect of the Otsuka Clinical Studies and its funding of the Carcinogenicity Study), all Product development work and regulatory activities required to obtain and maintain marketing approval in each country of the Territory (including, without limitation, post-marketing surveillance and pharmacovigilance), and any and all additional Product development work (including Phase IIIb and Phase IV), and additional studies for marketing purposes (including pharmacoeconomic studies), that may be necessary or desirable for the optimal Commercialization of Product, all under the direction of the PDC. In addition, at its sole expense, BMS will diligently use all commercially reasonable efforts, through further research and development, to develop new Product indications (including, without limitation, bipolar disorder) and formulations (such as IM, Depot, etc.), to the extent supportable by scientific and clinical data and information, appropriate or desirable for the optimal Commercialization of Product.
Except for Otsuka’s obligations with respect to the Otsuka Clinical Studies and Carcinogenicity Study and the provision of free drug as provided in Section 4.4, all other
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Product development work, studies, regulatory activities and Commercialization activities in the Territory shall be BMS’s obligation and at its sole risk and expense. As part of BMS’s obligation, BMS shall supply all Product required for development, and for all clinical and post-marketing trials and samples, all at no charge to Otsuka subject to Otsuka’s obligations in Sections 4.4 and 5.8.
In fulfilling its obligations under this Agreement, BMS shall closely involve Otsuka in the entire process, including internal BMS staffing meetings related directly to Product issues, as discussed in greater detail in Section 5.7 below.
4.4. Supply of Compound for Product Development .
Otsuka shall supply BMS, free of charge, Compound and/or Bulk Tablets in quantities reasonably necessary to carry out the Product Development Plan, up to a maximum of one thousand kilograms (1,000 kg) of Compound, whether supplied in the form of Compound or as Bulk Tablets, which quantity shall be in addition to the Compound and Bulk Tablets required for the Ongoing Clinical Studies. BMS shall use such supplies to conduct Product development (pre-clinical, clinical and pharmaceutical) for obtaining regulatory approval in each country of the Territory, including completion and sponsorship of Phase IIIb, Phase IV and pharmacoeconomic studies, the development of additional indications and formulations of Product, and as may be necessary for the validation of packaging methods, stability testing or pilot packaging of Product by BMS. BMS shall acquire additional quantities of Compound and Bulk Tablets, beyond the 1,000 kilograms to be provided under this Section 4.4, in accordance with Section 5.11.2(a)(5).
4.5. Data and Information; Improvements and Inventions .
4.5.1 Transfer of Otsuka’s Data, Information and Other Documentation to BMS .
Otsuka shall provide BMS with all relevant pre-clinical, clinical and other Product development data, information and other documentation in Otsuka’s possession or control (in electronic form to the extent available in such form) concerning Compound, Bulk Tablets and Product (and Compound Forms and Related Compounds, if relevant to PDC development efforts), for use by BMS as it becomes fully involved in the clinical program and pursues regulatory approval of the Product throughout the Territory (including the formulation of Compound into Bulk Tablets) at the earliest possible date; provided that Otsuka shall not (except as set forth below) provide data, information or other documentation regarding the manufacture of Compound (or Compound Forms or Related Compounds) to BMS. Otsuka shall only be obligated to provide such manufacturing-related data, information and other documentation as is necessary to enable BMS to file and receive regulatory approval of Product in the Territory. In such case, to the extent possible, Otsuka shall provide such manufacturing-related data,
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information and other documentation in the form of a Drug Master File under seal directly to the appropriate governmental agency, which BMS, its Affiliates and Sublicensees shall be entitled to reference in their regulatory applications, or, if necessary, Otsuka shall provide such data, information and other documentation directly to BMS for inclusion in its regulatory applications, in which case BMS may use such manufacturing-related data, information and other documentation solely for the purpose of filing, receiving and maintaining regulatory approvals of Product in the Territory and for no other purpose.
In addition, Otsuka shall continue during the term of this Agreement to provide BMS with relevant development data, information and other documentation coming into its possession concerning Compound, Bulk Tablets and Product (and Compound Forms and Related Compounds, if relevant), subject to the limitation in the preceding paragraph regarding manufacturing-related data, information and other documentation. Without limiting the scope of data, information and other documentation to be provided by Otsuka to BMS, Otsuka shall provide BMS with all relevant data, information and other documentation in its possession resulting from product development (pre-clinical, clinical and pharmaceutical) related to Product for use by BMS and its Affiliates in the Territory (and its Sublicensees in the Rest of Territory).
4.5.2 Transfer of BMS Data, Information and Other Documentation to Otsuka .
BMS shall provide Otsuka, in electronic form to the extent available in such form, with all data, information and other documentation coming into its possession or control during the term of this Agreement concerning Compound, Bulk Tablets and Product (and Compound Forms and Related Compounds, if any), including, without limitation, all data, information and other documentation relating to the manufacture of Product and any and all data, information and other documentation resulting from product development (pre-clinical, clinical and pharmaceutical, including the Otsuka Clinical Studies, Phase III, Phase IIIb, and Phase IV studies, the Carcinogenicity Study, and other studies conducted in connection with Product development or Commercialization) related to Compound, Bulk Tablets and Product (and Compound Forms and Related Compounds, if any). Subject to the grant of rights to BMS in this Agreement, Otsuka and Otsuka’s Affiliates and sublicensees may use and refer to such data, information and other documentation for development, regulatory and Commercialization purposes in the Reserved Territory, and otherwise as permitted in this Agreement. BMS shall provide the above-described data, information and other documentation to Otsuka on an ongoing basis during the term of this Agreement.
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4.5.3 Ownership of Data, Information and Other Documentation .
Otsuka (and not BMS) owns, and shall continue to own, all data, information and other documentation concerning Compound, Bulk Tablets and Product (and Compound Forms and Related Compounds, if any) transferred by it to BMS during the term of this Agreement, all manufacturing-related data, information and other documentation as described in Section 4.5.1, as well as all data, information and other documentation resulting from the Otsuka Clinical Studies and the Carcinogenicity Study. In addition, Otsuka (and not BMS) shall own all data, information and other documentation (including, without limitation, all scientific, clinical and commercial data, information and documentation) concerning Compound, Bulk Tablets and Product (and Compound Forms and Related Compounds, if any) developed by BMS as the same pertain to the Reserved Territory, the United States and/or the European Union, while BMS shall own the same in the Rest of Territory during the term of the Agreement. In each case, BMS, its Affiliates and Sublicensees shall have the right to use and reference such Otsuka data, information and other documentation for the purposes of fulfilling BMS’s obligations under this Agreement, and for no other purpose. Otsuka and its Affiliates and Sublicensees shall have the right to use and reference all such BMS data, information and other documentation, at no charge, in the Reserved Territory, the United States, the European Union and countries removed from the Territory during the term of this Agreement, and for all purposes following the expiration or termination of this Agreement.
During the term of this Agreement, all data, information and other documentation of either party, to the extent that they relate to Compound, Bulk Tablets and Product (and Compound Forms and Related Compounds, if any), shall be deemed the confidential information of both parties within the meaning of Section 10 (Confidentiality), each party to be deemed the “Receiving Party” of all such data, information and other documentation, permitted to use it only as permitted above. Upon the termination or expiration of this Agreement, all such data, information and other documentation including that owned by BMS during the term of this Agreement-shall be the confidential information of Otsuka, with BMS being deemed to be the Receiving Party within the meaning of Section 10, and neither BMS nor its Affiliates nor Sublicensees shall thereafter have any further right to use or reference it.
4.5.4 Designated Representatives for Transfer of Information .
To facilitate the smooth and efficient transfer of data, information and other documentation between the parties, each party shall designate a representative, and shall notify the other party of such representative, who shall be authorized to request from time to time data, information and other documentation as described above, and who shall also be the authorized recipient of data, information and other documentation transferred by
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the other party hereunder. Either party may, at any time, change its designated representative by notice to the other party.
4.5.5 Improvements and Inventions .
For purposes of this Agreement, “Improvements” shall mean any and all inventions, discoveries, improvements, pharmaceutical formulations, new indications, chemical processes, data (preclinical, clinical or otherwise), information and know-how (whether or not maintained as trade secret), whether or not patented or patentable, relating to the Compound, Compound Forms, Related Compounds, Product or the manufacture or use of any of them.
As a service provider on behalf of Otsuka, BMS will pursue, as part of the Product Development Plan, indications for the Product with respect to the treatment of bipolar disorder and Alzheimer disease-related dementia, other indications, and new formulations, such as IM, Depot and flash-melt, for the administration of Compound for therapeutic use, all in accordance with the Product Development Plan or otherwise in accordance with the written decisions of the PDC. All Improvements made by or on behalf of Otsuka, BMS or any BMS Affiliate (including, for the avoidance of doubt, all patents, patent applications and other intellectual property rights covering the manufacture, use and sale of Improvements) shall be owned by Otsuka; provided, however , that, in the case of patents, patent applications and other intellectual property rights otherwise owned by BMS or its Affiliate(s) covering more than Improvements, such patents, patent applications and other intellectual property rights shall not be deemed to be owned by Otsuka, in which case BMS hereby grants (or shall cause its Affiliate(s) to grant) to Otsuka a perpetual, royalty-free, worldwide, exclusive license (subject to BMS’s exclusive license from Otsuka in the Rest of the Territory during the term of this Agreement), with the right to sublicense, under such patents, patent applications and other intellectual property rights to make, have made, use, sell, import and offer to sell Compound, Compound Forms, Related Compounds and Product incorporating such Improvements.
In the event Commercialization of the Product, including Product incorporating any Improvement, requires a license from a non-Affiliate third party, any amounts due such third party in order to make, use or sell such Product in the Territory shall be split between the parties as follows: BMS shall pay [*] of any such amounts, and Otsuka shall pay [*]of any such amounts. BMS shall consult with Otsuka regarding any such third-party license and the terms thereof. Otsuka may elect, where possible, to be the licensee in the Territory, or it may elect to be a co-licensee with BMS. Otherwise, BMS shall use commercially reasonable efforts (in consultation with Otsuka) to obtain the right to assign or sublicense such license rights to Otsuka so Otsuka has the right to make, use and sell Product (including Product incorporating Improvements) covered by such license in the Territory (and the right to
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sublicense such rights), subject to the terms of this Agreement. BMS shall use its good faith effort to assist Otsuka in obtaining such rights for Otsuka in the Reserved Territory.
The licenses described above shall survive the termination of this Agreement, and, subject to the terms and conditions of the related underlying license agreement between BMS and the third party in question, the term of any sublicenses from BMS to Otsuka of third-party license rights shall continue notwithstanding the termination of this Agreement. BMS shall, upon the reasonable request of Otsuka, during the term of this Agreement and following its expiration or termination, execute appropriate documents and otherwise cooperate with Otsuka in order to vest in Otsuka the title, right and interest in and to the Improvements (including, for the avoidance of doubt the related patents, patent applications and other intellectual property rights) and, where contemplated above, licenses, sublicenses or assignments as described above pertaining to the Product, including Improvements thereto.
Otsuka hereby grants to BMS an exclusive license (insofar as the license under Section 5.4 is and remains in effect) under any and all Improvements owned or controlled by Otsuka to make, have made, use and sell Product (but not to make Compound, Compound Form or any Related Compound) in the Rest of the Territory, subject to the terms and provisions of this Agreement. No additional royalty, other than royalties under Section 5.9.2, shall be payable in respect of such license. Such license to BMS shall include the right to sublicense, but only as an integral part of BMS’s sublicensing pursuant to Section 5.4.1(b).
For the sake of clarification, it is intended that, in connection with any Improvement developed by BMS which has utility other than with respect to Compound, Compound Forms, Related Compounds or Product, BMS’s assignment of ownership rights and interests as provided in the second preceding paragraph and the license granted by Otsuka pursuant to the immediately preceding paragraph shall in each case be limited in scope to use with Compound, Compound Forms, Related Compounds and Product only and shall not be extended to any other product, process or utility.
4.6. Regulatory Matters .
4.6.1 Regulatory Compliance Obligations of BMS .
In the United States and European Union, the NDA and the MAA(s), respectively, shall be filed in the name of Otsuka or its Affiliate (as Otsuka may elect). BMS shall, as an independent contractor, be obligated to provide all necessary and appropriate services to and for Otsuka and its Affiliates in connection with the preparation, fling and maintenance of the NDA, MAA(s) and MA(s), as the case may be, and otherwise as necessary so that Otsuka and its Affiliates fulfill all of their legal and regulatory responsibilities and duties, as holder of the NDA or MA(s), as the case may be, in connection with the development and Commercialization of Product, including, without
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limitation, all obligations with respect to pharmacovigilance and post-marketing surveillance. Such services (including, without limitation, the NDA and MAA fling fees) shall be without cost or expense to Otsuka or its Affiliates, other than the compensation to BMS provided in Section 5.9.1. In the Rest of Territory, BMS shall (as exclusive licensee) fulfill all legal and regulatory responsibilities and duties in connection with the development and Commercialization of Product.
In performing all of its obligations with respect to regulatory compliance, BMS shall be under the authority of the PDC and shall act in accordance with and implement the decisions of the PDC - which, as provided in Section 4.1.2, require the written approval of Otsuka’ s PDC Co-Chair. In performing its obligations hereunder, on Otsuka’s behalf, BMS shall not be authorized to sign any regulatory flings or submissions on behalf of Otsuka or compel Otsuka’s signature on any such flings or submissions. Furthermore, BMS shall perform all of its obligations with respect to regulatory compliance in the United States and the European Union in close collaboration with Otsuka personnel, as described in Section 5.7. BMS shall also be obligated promptly to provide Otsuka with copies of all communications - and written summaries of oral communications - to and from regulatory agencies in the United States and the European Union; shall keep Otsuka fully and promptly advised as to all regulatory issues and affairs; shall consult with Otsuka as to all interactions with regulatory agencies and responses to regulatory issues in the United States and the European Union; and shall give Otsuka advance notice, to the extent possible, of all meetings and communications with regulatory agencies in the United States and the European Union and an opportunity for Otsuka personnel to attend and participate in such meetings and communications. As used in this paragraph, references to regulatory matters in the European Union shall mean regulatory matters pertaining to the entire European Union (except for-as of the Restated Agreement Date-Switzerland) under EMEA centralized procedures; regulatory matters pertaining to Switzerland (which, for purposes of this Agreement, is deemed part of the European Union but, as of the Restated Agreement Date, is not subject to EMEA centralized procedures); regulatory matters pertaining to each Co-Promotion Country in the European Union; and, to the extent potentially affecting the Commercialization of Product in the European Union, regulatory matters pertaining to non-Co-Promotion Countries in the European Union.
4.6.2 Product Registrations .
BMS shall implement the decisions of the PDC regarding obtaining marketing approvals for Product throughout the Territory. BMS shall be obligated to, and as soon as reasonably and appropriately practicable BMS shall, at its expense, prepare and file all applications and supporting documentation necessary to obtain and maintain all regulatory approvals, marketing clearances, and price listings and reimbursement approvals, if any, required for Product in each country of the Territory. BMS shall file and seek to obtain the NDA in Otsuka’s (or its Affiliates) name, with Otsuka’s prompt
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cooperation as reasonably necessary. Similarly, BMS shall file and seek to obtain the MAA(s) in the European Union in Otsuka’s (or its Affiliates) name, with Otsuka’s prompt cooperation as reasonably necessary.
BMS shall file such applications for marketing approval in accordance with the decisions of the PDC and the Schedule set forth in the Product Development Plan, and in any event, in the case of the United States and the centralized fling in the European Union, not later than thirty-six (36) months from the Effective Date of this Agreement (provided Otsuka completes its obligations regarding the Otsuka Clinical Studies in a timely fashion). BMS shall file such applications in all other countries of the Territory in a commercially reasonable time, consistent with the objectives of this Agreement and whatever Schedule may be set forth in the Product Development Plan. BMS shall make commercially reasonable and diligent efforts to obtain approvals of such applications, and also to obtain price listing and reimbursement wherever appropriate, in a timely manner, and to maintain them once approved.
In the event BMS fails to proceed in a timely fashion with the activities necessary to obtain registration, marketing approval, price listing and reimbursement approval of Product in the United States or in any two or more of the other Co-Promotion Countries, the PDC shall immediately meet and discuss the reason(s) for such failure, as well as measures to remedy the situation. If the PDC fails to agree upon measures to remedy the situation, Otsuka may terminate this Agreement pursuant to Section 12.
In preparing and fling applications and supporting documentation necessary to obtain and maintain regulatory approvals and marketing clearances throughout the Territory, BMS shall though it remains ultimately obligated with respect to all such applications and documentation and regulatory compliance in connection therewith - be subject to the direction of the PDC. BMS shall promptly inform Otsuka, through the PDC, of any condition or requirement proposed by a governmental agency or regulatory body as a condition to granting marketing approval of the Product, and the PDC shall have the ultimate authority concerning its response thereto.
BMS and Otsuka shall each, at the other party’s reasonable request, provide the other with copies of all requested regulatory applications and documents and communications to and from governmental/regulatory agencies including, but not limited to, IND, NDA and MAA filings and approvals, price registrations, all related correspondence to and from governmental/regulatory authorities, inspectional observations and warning letters. Each party shall have access to and the right to refer to and cross-reference each other’s filings and supplements thereto consistent with the purposes of this Agreement; provided, however , that BMS shall not have the right to have or use Otsuka’ s manufacturing-related data, information or documentation except as necessary to obtain regulatory approval of Product in the Territory and to formulate the Compound into Bulk Tablets as provided in Section 5.11.1. As contract service provider,
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BMS shall be obligated with respect to all contacts and communications with governmental/regulatory authorities in the Territory, in collaboration with Otsuka as provided above.
4.6.3 Labeling .
The PDC shall have ultimate control of the contents of Product labels, as submitted to regulatory agencies in the Territory, and the ensuing negotiations towards the finalization thereof as approved by regulatory agencies. As contract service provider for Otsuka, BMS shall submit to the PDC for review, discussion and approval, as soon as reasonably practicable and not less than fifteen (15) Business Days prior to submitting it to a governmental/regulatory authority, the proposed label for Product in the United States and the proposed Summary of Product Characteristics (SmPC) in the European Union. BMS shall also submit to the PDC for review, discussion and approval BMS’s draft Corporate Product Label Profile (CPLP), at the same time that the draft thereof is being circulated to its internal Labeling Committee for review and approval. The parties agree to have a coordinated, worldwide labeling program for Product, to the extent legally permissible and commercially advisable. The parties recognize, however, that there may not necessarily be a common dosage and dosing regimen throughout the world.
4.6.4 Adverse Events; Post-Marketing Surveillance; Product Complaints .
BMS (in the United States and European Union, as contract service provider for Otsuka, and as Otsuka’s exclusive licensee in the Rest of Territory) shall adhere to and be obligated to comply with all applicable ethical, legal and regulatory standards in Commercializing Product in the Territory, including the establishment and implementation, at its sole expense, of a comprehensive adverse events reporting and post-marketing surveillance system. Such system shall be in full compliance with all then-current requirements of the FDA, the EMEA, and all other governmental/regulatory agencies in the Territory, and shall be more comprehensive and detailed as the PDC reasonably deems appropriate. In this regard, BMS shall implement and maintain a system for recording and addressing all adverse drug reactions, suspected adverse drug reactions and other medical and technical information relevant to the safety of Product, including scanning all relevant literature. BMS shall also maintain a central computer database incorporating all such information.
BMS (in the United States and European Union, as contract service provider for Otsuka, and as Otsuka’s exclusive licensee in the Rest of Territory) shall be obligated to investigate adverse drug reactions (in consultation with Otsuka as appropriate), and to report them to the relevant regulatory authorities in the Territory, when appropriate, in full compliance with the laws and regulations of the Territory, and to respond to all inquiries from regulatory authorities (also in consultation with Otsuka). Each party shall promptly deliver to the other all correspondence which it receives from regulatory
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authorities relating to the safety of Product except for procedural, non-substantive communications. BMS shall provide to Otsuka copies of its ICH periodic drug safety updates and each CIOMS I expedited adverse drug reaction report relating to Product when BMS files these with relevant regulatory authorities.
4.6.5 Post-Marketing Surveillance .
Following the Effective Date of this Agreement, the parties discussed and agreed upon a system for adverse events reporting and post-marketing surveillance, which agreement is set forth or incorporated by reference in Appendix F, and which is subject to change as the parties mutually deem appropriate or as necessary to remain in compliance with all applicable laws and regulations. Each party hereby agrees to comply with its respective obligations under such agreement (as the parties may agree to modify it from time to time) and to cause its Affiliates and Sublicensees to comply with such obligations.
4.6.6 Product Complaints .
BMS (in the United States and European Union, as contract service provider to Otsuka, and in the Rest of the Territory as Otsuka’s exclusive licensee) shall be obligated to record in a central database and responding to all material complaints regarding Product in the Territory. Otsuka shall promptly refer any product complaints in the Territory of which it becomes aware to BMS for response. The parties shall promptly provide to each other copies of all relevant documentation and information regarding any such complaints.
4.6.7 Product Recall .
If either BMS or Otsuka discovers or becomes aware of any fact, condition, circumstance or event (whether actual or potential) concerning or related to Product that may reasonably require recall or market withdrawal of Product or a “Dear Doctor” letter relating to Product, such party shall communicate such fact, condition, circumstance or event promptly to the other party. In the event (i) any governmental agency or regulatory body issues a request, directive or order that Product be recalled; (ii) a court of competent jurisdiction orders that Product be recalled; or (iii) the PDC (in the Territory) and Otsuka (in the Reserved Territory) reasonably determine, after mutual consultation, that Product should be recalled or withdrawn from the market or that a “Dear Doctor” letter should be sent relating to use of Product, the parties shall take all appropriate remedial actions with respect thereto; provided, however , that Otsuka, in its sole discretion, shall finally determine any recall matters in the Reserved Territory. To the extent that it is necessary or appropriate to communicate with any person or entity in the Territory, including but not limited to any governmental agency or regulatory body, the media or any customer, concerning any such fact, condition, circumstance or event, BMS (in the United States and European Union, as contract service provider of Otsuka, and as Otsuka’ s exclusive
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licensee in the Rest of Territory) shall be the primary contact concerning remedial action. The party that is at fault for giving rise to the fact, condition, circumstance or event resulting in the recall or withdrawal of Product, as determined by an independent testing laboratory or a mutually acceptable regulatory consultant familiar both with the circumstances and with the allocation of responsibilities between the parties under this Agreement, shall bear all expense of the recall or Product withdrawal, including the costs of preparation of customer lists and letters, mailing expenses, media notices and other public announcements and any other necessary notice, destruction or return of the recalled or withdrawn Product, the cost of shipping and freight, and the cost of the recalled or withdrawn Product. If it is determined that the parties share joint responsibility, then they shall share such expense in accordance with their allocated percentage of responsibility.
5. COMMERCIALIZATION
5.1. Joint Commercialization Committee .
5.1.1 Formation of the JCC .
Promptly after the Effective Date, BMS and Otsuka formed a Joint Commercialization Committee (the “JCC”), which committee shall coordinate, oversee and direct the Commercialization efforts (pre-launch and post-launch) for Product throughout the Territory and the parties’ efforts and activities in connection therewith. The JCC shall also have jurisdiction over (i) Product forecasting, ordering, supply and inventory, (ii) price reimbursement and price, and (iii) trademark selection and trade dress.
5.1.2 JCC Composition, Governance and Decisionmaking .
Each party shall have equal representation and participation on the JCC. Each party shall have (in its discretion) up to five (5) members on the JCC, shall designate its standing members on the JCC in writing, and shall promptly advise the other party if it substitutes any of its members. If one or more members of the JCC is unable to attend any meeting, the party that appointed the non-attending member may designate a substitute to participate in lieu of the absent member. The parties shall each be entitled to cause such other representatives as they may deem necessary or appropriate to attend and participate in JCC meetings from time to time.
BMS shall designate one of its JCC members to be Chair of the JCC, and Otsuka shall designate one of its JCC members as the Co-Chair of the JCC. Each party shall have one (1) vote on the JCC, to be cast, respectively, by the Chair and the Co-Chair; provided, however , that, in the event of a tie vote, the Chair’s vote shall prevail, subject to the following limitations:
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(a) Neither the Chair, the JCC nor any Marketing Plan approved by the JCC may impose additional expenses or obligations on Otsuka or its Affiliates beyond those specified in this Agreement without the prior written consent of Otsuka;
(b) The BMS Chair of the JCC shall not have the tie-breaking vote with respect to the following JCC matters, on which Otsuka and BMS shall have equal decisionmaking authority: (i) Trademark selection and trade dress, and (ii) forecasting, ordering, supply and inventory. In the event the JCC Chair and Co-Chair are unable to reach agreement on any such matters, the unresolved issue shall be referred to and resolved as soon as reasonably possible by the President of Otsuka and the President of BMS Worldwide Medicines Group; disputes not resolved at that level shall be referred to and resolved in accordance with Section 14; and
(c) In addition, Otsuka’s written approval of advertising and promotional materials shall be required in accordance with Section 5.6 below.
5.1.3 Meetings .
The JCC shall meet as frequently as either party may reasonably request and at such times and places as they select, but, in any event, it shall meet (i) promptly after the Effective Date, and (ii) at least quarterly thereafter. Unless the Chair and Co-Chair agree otherwise in writing, the location of meetings of the JCC shall alternate between the offices of BMS and the offices of Otsuka, with the first meeting to be held at BMS’s offices. All costs of participation by each member in the activities of the JCC shall be borne by the party appointing such member. The Chair of the JCC shall appoint a secretary who shall maintain the records of the JCC and shall keep minutes of the meetings of the JCC. The records and minutes shall be subject to written ratification by the Chair and Co-Chair of the JCC, and the secretary shall distribute minutes to all members of the JCC. JCC issues arising in the ordinary course of the day-to-day Commercialization of the Product may be decided by the Chair and the Co-Chair without submission for review by all JCC members, as reasonably appropriate to facilitate efficiency. The Chair shall maintain a written record of such decisions and promptly distribute such record to all members of the JCC.
5.1.4 Responsibilities of the JCC .
The JCC shall be an ongoing operational (not merely advisory) committee, and Product shall be Commercialized in accordance with plans and budgets approved by the JCC. The JCC shall be responsible for developing, formulating and directing the overall strategy for the marketing and Commercialization of Product in the Territory and for coordinating the implementation of all approved Marketing Plans for the Territory. The goal of the JCC shall be to develop a strategy and Marketing Plans to position Product as
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the antipsychotic product of choice throughout the Territory, consistent with its approved labeling and Product efficacy and safety profile. The JCC shall have final decisionmaking authority on all key issues regarding Commercialization of Product excluding those governed by the PDC, subject to Section 5.1.2 above; provided, however , that, should applicable law in any country of the Territory prohibit collaboration by the parties on any aspect of the Commercialization of Product, then the parties shall comply fully with such law and modify the conduct and plans of the JCC accordingly; provided, further, however , that, in countries in the European Union where Otsuka elects to have BMS act as a Distributor of Product pursuant to Section 5.3.12, a JCC-approved price shall be only a recommended resale price, and BMS shall be free to make the final determination of such price in such countries.
In addition to its overall responsibility for overseeing and directing Commercialization of Product throughout the Territory in accordance with this Agreement, the JCC shall, in particular, be responsible for:
(a) establishing an overall strategy for the Commercialization of Product in the United States, the European Union, and the Rest of Territory (each area being referred to here as a “Region”) and detailing such strategy in an annual Territory Marketing Plan and in individual Marketing Plans (Region by Region and, within the European Union, specifically as to the United Kingdom, Germany, France, Spain and Italy, and in such other countries as the JCC deems appropriate) under such Territory Marketing Plan, as described in greater detail in Section 5.2;
(b) preparing and proposing interim adjustments to any annual Territory Marketing Plan and individual Marketing Plans thereunder;
(c) preparing sales projections and overseeing the conduct of such market research as may be necessary or appropriate in connection with Commercialization of the Product in the United States, the European Union and the Rest of Territory;
(d) coordinating the development, review and approval of training, sales and promotional materials to be used in the various Regions of the Territory;
(e) addressing pricing, reimbursement issues, rebates, discounts, Product return and customer credit and return matters and safety-related issues as appropriate, and in full compliance with all applicable laws;
(f) selecting advertising and public relations agencies and other vendors, to be retained by BMS, to assist in the development of promotional and press materials and otherwise in connection with the Commercialization of the Product;
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(g) selecting the Trademark(s) and trade dress, to be owned by Otsuka, under which Product shall be marketed and sold throughout the Territory;
(h) approving procedures relating to the ordering, forecasting, supply, packaging and delivery of Compound, Bulk Tablets and Product in the United States, the European Union and the Rest of Territory, and determining appropriate Product inventory levels in each such Region and, as appropriate, individual countries within Regions;
(i) determining Product quantities required for distribution as Product samples;
(j) coordinating closely with the PDC, including (without limitation) with respect to the implementation of research and development programs authorized by the PDC relating to new formulations of Product and new indications for Product;
(k) establishing such JCC subcommittees as appropriate to address specific Commercialization issues falling within the purview of the JCC, such subcommittees to have equal representation and participation of both parties, subject to governance as described above in Section 5.1.2 (the BMS Chair of each subcommittee to have the tie-breaking vote except with respect to the issues, and subject to the limitations, described in Section 5.1.2);
(l) performing such other functions as the parties may decide are appropriate to further the commercial success of the Product in the Territory and the purposes of this Agreement, including the periodic evaluation of actual performance against performance objectives; and
(m) appointing a BMS representative to serve as a liaison to the JCC and to Otsuka regarding Sublicensee issues (if any) in the Rest of Territory.
5.2. Marketing Plans .
As promptly as possible after the Effective Date, the JCC shall consider, modify as it deems appropriate, and approve a detailed marketing plan for the Commercialization of Product throughout the Territory (the “Territory Marketing Plan”) and detailed marketing plans for the United States, the European Union, and the Rest of Territory. When appropriate, closer to the actual commencement of Commercialization, the JCC shall also consider, modify as it deems appropriate, and approve specific marketing plans for each Co-Promotion Country (and other countries it deems appropriate) within the European Union and specific marketing plans for the Rest of Territory as the JCC deems appropriate. The Territory Marketing Plan and each regional and country marketing plan are referred to collectively in this Agreement as the “Marketing Plans.” The Marketing
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Plans shall be confidential information of Otsuka within the meaning of Section 10 of this Agreement. BMS, working in close and ongoing collaboration with Otsuka representatives, shall prepare a draft one-year, three-year and five-year Marketing Plan for each of the above-specified regions and shall submit drafts of the Territory Marketing Plan and the regional and country Marketing Plans, and regular updates thereto throughout the term of this Agreement, to the JCC for its consideration, modification as it deems appropriate, and approval. The JCC shall have final authority and responsibility for the development of the Marketing Plans. The Marketing Plans shall set forth in detail the promotional activities, corresponding investment levels, sales forecasts and marketing strategy, Product positioning and related issues for the time periods and regions in question and shall, among other things, include in detail:
(a) complete market analyses to reflect Product opportunities, strengths and weaknesses, threats, critical promotional issues and trends in the Territory and regions and countries within the Territory, with detailed Product sales and market forecasts;
(b) competitive analyses of existing and potential competitors;
(c) proposals as to marketing goals, objectives and strategies;
(d) proposals regarding the parties’ participation in or sponsorship of opinion leader and medical education programs;
(e) complete strategies and tactics for the promotion, sale and distribution of the Product to all relevant segments of the health care market in the Territory and the regions and countries within the Territory, including to office-and institution-based psychiatrists and other health care providers, pharmacies, government, military and veterans organizations and facilities, and managed care organizations, such strategies and tactics to include promotional plans for each of the Product indications and formulations;
(f) pre-launch promotional activities including (without limitation) publication of key studies prior to Product launch in selected peer reviewed journals; posters/abstracts at key international and U.S. psychiatric meetings; educational symposia to be held in association with key international and U.S. psychiatric meetings each year prior to Product launch; informational exhibits at key international and U.S. psychiatric meetings; and opinion leader development;
(g) proposed pricing and pricing analysis recommendations (except with respect to pricing in countries in the Territory where the parties’ collaborative discussion of pricing for Product would be illegal);
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(h) financial and sales force resource requirements and customer and sales force assignments;
(i) recommendations of sales force targets and other common measures to be used by the parties in determining their respective sales force incentive schemes;
(j) budgets for and other strategies regarding Phase IIIB and Phase IV clinical studies to support Commercialization of Product (these budgets and strategies shall be under the authority and control of the PDC, with which the JCC shall collaborate closely);
(k) descriptions of relevant markets, outcomes and pharmacoeconomic studies concerning Product;
(1) proposals regarding supply, distribution, manufacturing and packaging issues arising with regard to Compound, Bulk Tablets and other formulations of Product;
(m) a rolling five (5) year financial analysis showing anticipated promotional expenditures and Product profit-loss statements.
(n) a rolling five (5) year forecast of sales of Product throughout the Territory and in the various regions and (as the JCC deems appropriate) countries within the Territory;
(o) recommendations regarding the joint handling of promotions to managed care organizations in the United States and the other Co-Promotion Countries;
(p) advertising and other promotional materials to be used in connection with the Commercialization of Product;
(q) promotional sample plans; and
(r) such other matters as the JCC deems appropriate.
5.3. Commercialization in the United States and the European Union .
5.3.1 Overall Structure .
As an essential part of the overall collaboration between Otsuka and BMS - with the goal of completing the development of Product and making it available to customers throughout the Territory at the earliest appropriate time - the parties have agreed to the
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following terms with respect to Commercializing Product in the United States and the European Union:
(a) Otsuka or its Affiliates will be the holder of the Product NDA in the United States and the MA in the European Union. BMS (as contract service provider to Otsuka) shall bear, at its sole expense, all fees and expenses related to filing for, obtaining and maintaining the NDA and the MA;
(b) the MA shall be obtained through the centralized procedure covering all of the European Union member states, Norway and Iceland; a separate MA shall be obtained in Switzerland;
(c) to the extent commercially feasible, there will be one Trademark used throughout the United States and the European Union for Product; Otsuka shall own the Trademark(s);
(d) recognizing the breadth and depth of BMS’ s Commercialization experience in the United States and the European Union, and the importance of such experience to maximizing Product market potential, Otsuka retains BMS under this Agreement to provide a wide range of Product-related services for Otsuka in those markets, including, at BMS’s sole cost and expense, all services (including, e.g., all advertising and promotion expenses) required for the Commercialization of Product except those specifically undertaken by Otsuka in this Agreement;
(e) BMS shall diligently Commercialize Product throughout the United States and the European Union;
(f) Otsuka retains the option, for itself and its Affiliates, to Co Promote Product in the Co-Promotion Countries;
(g) all sales of Product in the United States and the European Union, whether arising from the activities of BMS’s (or its Affiliates’) sales forces or Otsuka’s (or its Affiliates’) sales forces, shall be booked in the name of Otsuka or its Affiliate(s) (as Otsuka may choose), and title to all units of Product shall remain in Otsuka or its Affiliate until sold to customers, except only in the event Otsuka decides, in its sole discretion, that for legal or commercial reasons it is necessary or preferable that sales be made by BMS or a BMS Affiliate in one or more countries within the European Union as Otsuka’s exclusive Distributor and booked in the name of BMS or its Affiliate;
(h) the total fee for BMS’s services to be provided under this Agreement is as provided in Section 5.9.1.
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5.3.2 Commercialization Rights and Obligations of BMS .
(a) Grant of Commercialization Rights .
Otsuka hereby grants to BMS, during the term of this Agreement, the exclusive right, subject to the Co-Promotion rights of Otsuka in the Co-Promotion Countries, to Commercialize Product in the United States and the European Union under Otsuka’s Trademark(s). During the term of this Agreement, so long as BMS’s Commercialization rights remain in effect, neither Otsuka nor an Affiliate of Otsuka will authorize, or grant the right to, any third party (other than, in the case of the Co-Promotion Countries, to Affiliates of Otsuka) to Commercialize Product in such country.
(b) Commercialization Obligations of BMS .
Subject to the provisions of this Agreement, including the obligations of Otsuka specified in the following sentence, BMS shall be and remain responsible, at its sole cost, for Commercializing Product throughout the United States and the European Union for and on behalf of Otsuka; in doing so, BMS shall-without limiting its diligence obligations under Section 5.10 - implement the strategies, Marketing Plans and other decisions and directives of the JCC. Except for Otsuka’s specific obligations with respect to Product development described in Section 4, supply and packaging described in Section 5.11, and the Co-Promotion responsibilities Otsuka may elect to undertake in accordance with Section 5.3.3, BMS shall be obligated to provide - in close collaboration with Otsuka and for and on behalf and in the name, of Otsuka, but at BMS’s sole cost and expense - all other services relating to the development, regulatory compliance and Commercialization of Product, including (without limitation): all government mandated reimbursement pricing; forecasting and ordering of Product; inventory management and control; warehousing and distribution of Product; recordation of sales; invoicing; collection of receivables; sales reports; customer relations and services; preparation of advertising and promotional materials and implementation of marketing and promotional activities and strategies; preparation of training materials and conduct of training sessions; pharmacovigilance; post-marketing surveillance (including adverse event reporting); product recall; and response to regulatory and health authority inquiries and investigations. All such services shall be under the direction of the PDC or the JCC, as appropriate. In addition to Otsuka’s participation on the PDC and the JCC and their subcommittees, and as described in greater detail in Section 5.7, Otsuka shall be closely involved with BMS at all stages of the development, regulatory and Commercialization process and BMS’s provision of the above-described services, including BMS’s internal meetings (subject to the clarification in Section 5.7) relating directly to Product development issues, regulatory issues, strategizing regarding pricing issues (pertaining to pricing in countries in the Territory where the parties’ discussion of pricing is legally permissible), marketing and promotion, and preparation of Marketing Plans and budgets and the implementation thereof.
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5.3.3 Otsuka’s Co-Promotion Option .
(a) Co-Promotion Countries.
Otsuka retains the option, exercisable in its sole discretion, to Co-Promote Product with BMS in the Co-Promotion Countries, which option Otsuka may exercise on a country-by-country basis. In the United States, Otsuka may elect to participate in Co-Promotion by contributing up to [*] sales representatives, regardless of the total number of sales representatives specified in the Marketing Plan for the United States. In each of the Co-Promotion Countries other than the United States, Otsuka may elect to participate in the Co-Promotion of Product by contributing up to [*] of the budgeted sales representatives for such Co-Promotion Country as set forth in the applicable Marketing Plan.
(b) Otsuka Co-Promotion Election and Commitment.
Not later than eighteen (18) months prior to the date projected by the PDC to be the Product Launch Date in each Co-Promotion Country (on a country-by-country basis), BMS will notify Otsuka in writing of the sales force needs in such country, in accordance with the then-current Marketing Plan for such country approved by the JCC. Not later than the date that is twelve (12) months prior to the PDC’s projected Launch Date in such country, or the date that is six (6) months after receipt of BMS’s notice of the sales force needs in such country, whichever is later, Otsuka shall decide whether to participate in Co-Promotion of Product in such country at such time. If Otsuka elects to participate in such Co-Promotion, it will concurrently notify BMS in writing of such election and commit to provide a specific number of sales representatives in such country, which number may be any number up to, but not in excess of the limits specified in Section 5.3.3(a) above. Otsuka’s commitment to Co-Promote Product in such country shall be for at least three (3) years following the Product Launch Date in such country. Should the Marketing Plan’s budgeted number of sales representatives for such country increase or decrease during such three-year period (as determined by the JCC), Otsuka’s commitment of sales representatives shall increase or decrease during the three-year period proportionately with the level of its commitment at the outset. If Otsuka elects to participate in Co-Promotion, BMS or its Affiliates shall meet the sales force needs not satisfied by the sales representatives provided by Otsuka.
If Otsuka elects not to participate in Co-Promotion of Product in any Co-Promotion Country at the time of the Product Launch Date in such country, BMS or its Affiliates will provide the entire sales force needs in such country. Otsuka may subsequently, with eighteen (18) months’ advance written notice to BMS (or a shorter period with BMS’s written consent, which it shall not unreasonably withhold), elect to begin Co-Promoting Product in such country at any time more than three (3) years after the Launch Date in such country. In such case, Otsuka shall notify BMS of such election
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in writing and shall commit to provide a specific number of sales representatives in such country (up to but not in excess of the limits specified in Section 5.3.3(a) above). Otsuka’s commitment at such time shall be for at least two (2) years from the date Otsuka commences such Co-Promotion in such country; as provided above, however, should the Marketing Plan’s budgeted number of sales representatives for such country increase or decrease during such two-year period, Otsuka’ s commitment of sales representatives shall increase or decrease during the two-year period proportionately with the level of its commitment at the outset. Subject to the above, after Otsuka has made a commitment to Co-Promote the Product in a given Co-Promotion Country, it may thereafter, with eighteen (18) months’ advance written notice to BMS (or a shorter period with BMS’s written consent, which it shall not unreasonably withhold) elect to increase (subject to the limitations specified in Section 5.3.3(a) above), decrease or withdraw its Co-Promotion effort in such country (such change to be effective following expiration of the three-year or two-year commitment period described above). Otsuka’s resulting commitment, as so increased, decreased or withdrawn, shall be for at least two (2) years.
If it is legally impermissible for Otsuka to Co-Promote in one or more Co- Promotion countries prior to and on the Launch Date in such country(ies), but it subsequently becomes permissible to Co-Promote, Otsuka may (in its discretion) elect to Co-Promote in such country(ies) at any time after it becomes permissible to do so, following the procedures set forth above (e.g., an initial three-year commitment with twelve (12) month’s prior notice, followed by two-year commitments with eighteen (18) month’s prior notice).
5.3.4 Reimbursement of Otsuka’s Sales Force Expenses .
BMS will reimburse Otsuka for all of Otsuka’s “direct expenses” incurred in connection with the Otsuka sales representatives Otsuka elects to provide to Co-Promote Product, subject to the following (as used in this section, references to “Otsuka” include its Affiliates):
(a) The “direct expenses” for which BMS shall reimburse Otsuka shall be the salary and benefits (including employment taxes) paid or provided to Otsuka’s sales representatives, all bonuses and incentive compensation paid to the sales representatives (Otsuka’s bonus and incentive compensation plan shall be substantially the same as the bonus and incentive compensation paid by BMS (or its Affiliates) to its sales representatives in the country in question), Product sales-related travel and entertainment expenses, automobile expenses and the costs of Product sales-related materials and supplies. The benefits for which BMS shall reimburse Otsuka shall be limited to the kind and amount of benefits paid by BMS or its Affiliates to or for sales representatives in the same country (and shall exclude benefits not paid or provided in the then-current year but which are
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accrued as a future benefit, such as a severance pay obligation or such other benefit that accrues and becomes payable only in the future).
(b) In the United States, BMS shall reimburse Otsuka for the direct expenses of the actual number Otsuka’s sales representatives, but only up to [*] sales representatives; Otsuka shall bear the salaries, costs and expenses for its sales representatives in excess of forty that it elects to provide in the Co-Promotion effort in the United States.
(c) In the Co-Promotion Countries other than the United States, BMS shall reimburse Otsuka for the direct expenses of the actual number of Otsuka sales representatives, but only up to [*]of the total number of sales representatives budgeted in the Marketing Plan for each such country at the time Otsuka committed its sales representatives for that year; Otsuka shall bear the salaries, costs and expenses for its sales representatives in excess of [*] of the budgeted number of sales representatives that it elects to participate in Co-Promotion in such country.
(d) In the event Otsuka elects to commence Co-Promotion at the Launch Date in a given Co-Promotion Country, BMS shall begin reimbursing Otsuka for the direct expenses of Otsuka’s sales representatives at the earlier of either (i) six (6) months prior to the Product Launch Date in such country as forecast by the PDC, or (ii) one (1) month prior to the commencement of sales force training should the JCC determine that sales force training for Product promotion should commence more than six months prior to the forecast Launch Date.
(e) In every Co-Promotion Country in which Otsuka’s sales representatives promote Product and no other products either from Otsuka or a third party, BMS will reimburse [*] of the direct expenses of such sales representatives (subject to the limitations specified above). It shall be entirely in Otsuka’s discretion whether and when its sales representatives promote other products in addition to Product. So long as Otsuka’s sales representatives promoting Product promote no other products either from Otsuka or a third party, and BMS is therefore reimbursing [*] of the direct expenses of such representatives (subject to the limitations specified above), BMS may, with reasonable advance notice to Otsuka, require Otsuka to direct those sales representatives whose direct expenses are being reimbursed by BMS to promote one BMS neuroscience product in the Secondary Position in Calls; provided that such BMS product shall be a product with the same detailing target audience as Product, and it shall be a patent-protected product commercially important to BMS that BMS’s sales representatives promoting Product in the same country(ies) are also promoting. BMS recognizes it is important that all Otsuka
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sales representatives promoting Product in a country have similar sales incentives. Accordingly, should the number of Otsuka sales representatives Co-Promoting Product exceed the number for which BMS is required to reimburse Otsuka (as permitted by Section 5.3.3(a)), BMS agrees to consider in good faith offering to allow the “non-reimbursed” Otsuka sales representatives to promote the same BMS product; in such case BMS and Otsuka shall discuss and agree upon reasonable compensation to be paid by BMS to Otsuka for the services of such sales representatives in promoting BMS’s product.
(f) If Otsuka’ s sales representatives promote Product and one or more additional, non-BMS products, BMS will reimburse [*]of the direct expenses of Otsuka’s sales representatives (subject to the limitations specified above) for so long as Otsuka’s sales representatives promote Product in the Primary Position in Calls.
(g) If Otsuka’s sales representatives promote Product in the Secondary Position in Calls, and promote a non-BMS product in the Primary Position, BMS will reimburse [*] of the direct expenses of Otsuka’s sales representatives (subject to the limitations specified above).
(h) The parties agree that none of Otsuka’s or its Affiliates’ sales representatives participating in the Co-Promotion of Product is an employee of BMS or its Affiliates. Such individuals are not eligible to participate in any employee benefit plans (as defined in Section 3(3) of the United States Employee Retirement Income Security Act of 1974, as amended (ERISA)) sponsored by BMS or its Affiliates. Otsuka specifically agrees that each such individual (i) is engaged solely by Otsuka or its Affiliates and not by BMS or its Affiliates; (ii) will look solely to Otsuka and its Affiliates for any compensation and benefits pertaining to the services provided by such individual; (iii) is not an employee of BMS or its Affiliates; and (iv) is not eligible to participate in any employee benefit plan within the meaning of Section 3(3) of ERISA, nor any other bonus, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance or other similar fringe or employee benefit plan, program or arrangement sponsored at any time by BMS or its Affiliates, even should it subsequently be determined by any court, the Internal Revenue Service or any other governmental agency that such individual may be a common law employee of BMS or its Affiliates.
(i) On a monthly basis, Otsuka shall submit an invoice to BMS for all “direct expenses” to be reimbursed by BMS in accordance with this Section 5.3.4, and BMS shall pay each such invoice within thirty (30) days of its receipt.
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5.3.5 Sales Team Assignments .
Each party shall deploy its sales force in accordance with the Marketing Plan applicable to the country in question, but each party shall retain direct supervision of its own sales force, including the power to hire and fire. The assignment of each party’s sales force within each Co-Promotion Country will be equitable so that the sales force of each party is assigned valuable, productive accounts and an equitable share of responsibility for opinion leaders, large accounts and other more desirable accounts. Both BMS and Otsuka sales representatives will be assigned to cover office-based psychiatrists and psychiatric hospitals. Otsuka representatives will be geographically dispersed in each Co-Promotion Country so as to have equitable representation with the BMS sales representatives in the most productive areas of each such country, based on analysis of prescriber profiles. In geographic areas where both companies have sales representatives, every effort will be made to split the sales targets as equitably as possible. The parties shall attempt to minimize sales force realignments so as not to disrupt representative-to-representative and representative-to-physician relationships. BMS sales representatives will cover other sales targets, including teaching hospitals and influential medical centers, military/veteran accounts, government agencies, long-term care and prisons. BMS will take the lead with respect to managed care organizations, but will give Otsuka meaningful opportunities for collaborative efforts in managing key managed care accounts. BMS’s Medical Science Managers will provide support as needed to secure formulary approval and/or support product acceptance in key institutions. Both BMS and Otsuka representatives may utilize the Medical Science Managers as appropriate. On a monthly basis, each party shall submit to the JCC a detailed written report describing its detailing and promotional activities during the preceding month, on a country-by-country basis.
5.3.6 Training .
BMS will prepare for and hold, at its expense, Product promotion training programs prior to and periodically after the Launch Date in each country to ensure the sales forces are adequately trained. Members of the sales forces of Otsuka and its Affiliates and, in Otsuka’s discretion, their sales force trainers, may attend all such Product-related training programs at no cost, and BMS shall provide such attendees with copies of all BMS training materials at no cost. BMS shall bear the costs and expenses of the training programs, facilities, personnel, services and materials. Otsuka and its Affiliates may, in their discretion, provide additional training, using their own trainers, at their cost and expense. Otsuka and its Affiliates shall have the royalty-free right to reproduce, distribute and otherwise use throughout the world all Product-related training materials prepared by BMS, during and after the term of this Agreement.
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5.3.7 Effective Co-Promotion Practices .
Otsuka and BMS, and their respective Affiliates, shall cooperate to employ and implement effective Co-Promotion practices. Such cooperation shall include the development of a clear understanding of the marketing roles and responsibilities of each party in each Co-Promotion Country and the establishment of effective communications systems and processes to ensure that the promotional activities of the parties’ sales forces are efficient, coordinated and productive.
5.3.8 Exchange of Marketing Information .
BMS will develop and maintain current Call lists, schedules, and other appropriate information for the purpose of determining the psychiatrists and other persons involved in the drug purchase decisionmaking process to whom the BMS and Otsuka sales forces may detail Product, and it shall share such information with Otsuka. Otsuka and its Affiliates shall have the right to reproduce, distribute and otherwise use such information free of charge during and after the term of this Agreement.
5.3.9 Booking of Sales; Distribution of Product; Collection of Receivables; Option of Otsuka to Assume Services .
In the United States and throughout the European Union, including in the Co-Promotion Countries, BMS shall provide, at its expense, all services relating to the recordation of completion of and accounting for Product sales, including (without limitation) Product warehousing and distribution, inventory control and management, the receipt and entry of all orders - all of which shall be accounted for, billed and booked in the name of Otsuka or its Affiliates unless Otsuka elects, in its sole discretion, to have BMS book sales in its name in a given country or countries - invoicing, collection of receivables, handling of Product returns and customer and professional relations. BMS shall provide weekly or monthly reports (as the parties shall mutually agree) to Otsuka stating sales in the United States and the European Union in the prior week or month, as the case may be. To the extent that Otsuka or its Affiliates have, or can procure by subcontracting, the requisite facilities, infrastructure and personnel, Otsuka shall have the option, in its discretion (at its sole cost and expense), to assume responsibility for one or more of such services being provided by BMS (on a country-by-country basis), without altering the financial relationship between the parties unless they otherwise mutually agree in writing. If Otsuka elects to assume responsibility for one or more such services, BMS shall cooperate with Otsuka in the transition of responsibility for such service to Otsuka so as to avoid any disruption or delay in the provision of such service during such transition.
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5.3.10 Countries Added to or Removed from the European Union .
In the event one or more countries are added to the European Union during the term of this Agreement, the parties shall attempt, to the extent legally permissible and commercially practicable, to treat each such country like all other members of the European Union are treated under this Agreement; that is, BMS to Commercialize Product at its sole expense in such country on behalf of Otsuka, booking sales in the name of Otsuka or Otsuka’ s Affiliate (unless Otsuka has elected otherwise), in exchange for the compensation provided in Section 5.9.1. In the event that one or more countries are removed from the European Union during the term of this Agreement, the parties shall attempt, to the extent legally permissible and commercially practicable, to continue to Commercialize the Product in each such country on the same terms and conditions as had prevailed with respect to such country prior to its removal from the European Union (that is, BMS to Commercialize Product at its sole expense in such country, booking sales in the name of Otsuka or Otsuka’s Affiliate (unless Otsuka has elected otherwise), in exchange for the compensation specified above; Otsuka to have the option to Co-Promote the Product in such country if it is a Co-Promotion Country). If such Commercialization of Product in a country added to or removed from the European Union is not legally permissible or commercially practicable on such terms, the parties shall discuss and agree upon alternate terms and conditions for Commercialization as close as reasonably and legally possible to such terms and conditions, from a commercial and financial perspective.
5.3.11 Reimbursement Price Negotiations .
Where applicable, BMS shall endeavor to obtain prompt reimbursement approval for Product throughout the Territory. To the extent legally permissible, BMS will have responsibility for and (as between BMS and Otsuka) control of reimbursement price negotiations in the European Union, such reimbursement price negotiations to be under the direction of the JCC and in close collaboration with Otsuka (as provided in Section 5.7). BMS will keep Otsuka fully and promptly informed as to the status of all such reimbursement price negotiations; BMS will consult with Otsuka prior to engaging in such negotiations with respect to the positions to be taken; and Otsuka will have the opportunity to participate with BMS in all meetings with authorities pertaining to such reimbursement price negotiations. To the extent legally permissible and practicable, the holder of the MA in the European Union (Otsuka or its Affiliate) shall afford BMS or its Affiliate a legal role and standing to act in Otsuka’s (or its Affiliate’s) name in such reimbursement price negotiations, with Otsuka’s full participation. If any aspect of this provision is deemed legally impermissible, the parties shall promptly amend this provision and reassign responsibility for reimbursement price negotiations, so that they and this Agreement are in full compliance with applicable law.
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5.3.12 Distribution Alternative .
In certain countries in the European Union, it may be legally impermissible or commercially impractical for BMS to Commercialize Product and record Product sales in Otsuka’s or its Affiliates’ name. In such countries Otsuka may elect, in its sole discretion, that BMS’s Affiliate shall act as an exclusive distributor (the “Distributor”) of Product, in which case such Distributor shall record Product sales in such country(ies) in its own name, or some other Commercialization alternative mutually agreeable to the parties. In such event, the Purchase Price for Product to be paid by Distributor to Otsuka (or its Affiliates) for Product that Distributor purchases from Otsuka or its Affiliates for sale in such country(ies) shall be as provided in Section 5.11.2(a)(2). In the event Otsuka elects that BMS’s Affiliate shall act as a Distributor of Product in any country(ies), the parties shall adjust their collaborative efforts on the JCC and otherwise in connection with Commercialization of Product in such country(ies) to ensure that they are in full compliance with all applicable laws and regulations in such country. Without limiting the foregoing, BMS’s Affiliate, as a Distributor of Product in such country(ies), shall be solely responsible for determining the price at which it elects to sell Product in such country(ies), though the JCC may (but only to the extent legally permissible) recommend but not impose a suggested price. Should Otsuka elect to appoint BMS’s Affiliate as a Distributor in any country(ies) of the European Union, and should it thereafter become legally permissible in such country(ies) for BMS to Commercialize Product and record Product sales in the name of Otsuka or its Affiliate(s), Otsuka may (in its discretion) terminate BMS’s Affiliate’s distributorship, in which case BMS’s Commercialization rights and obligations under this Agreement in such country(ies) shall thereafter be the same as in the other countries in the European Union.
5.3.13 No Delegation of Responsibilities .
BMS may not assign or sublicense any of its responsibilities, obligations or services to be provided under this Agreement in the United States or the European Union to any person or entity other than an Affiliate of BMS without the prior written approval of Otsuka, which Otsuka may grant or withhold in its sole discretion for any or no reason (but BMS may subcontract certain of the services to be provided hereunder to the extent BMS typically subcontracts such services in the ordinary course of its and its Affiliates’ business).
5.4. Licenses to BMS .
5.4.1 Grant of License to BMS in Rest of Territory; Right to Sublicense .
(a) Grant of License.
Subject to the terms and conditions of this Agreement, including Otsuka’s reservation of rights set forth in Section 5.4.3 and BMS’s royalty obligations under
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Section 5.9.2. and purchase obligations under Section 5.11, Otsuka hereby grants to BMS, and BMS hereby accepts, an exclusive license, under the Patent Rights and Otsuka’s related know-how, data and information, to make and have made (subject to Section 5.4.3(c)), use and sell Product, under Trademark(s) selected by the JCC and owned by Otsuka, and to formulate Compound into Bulk Tablets and other Product, in the Field in the Rest of Territory. For the sake of clarification, and as described in greater detail in Section 1.20, the Field for Product containing a Related Compound is limited to Neuroscience Indications.
This license to BMS excludes the right to manufacture, and BMS shall not have the right to manufacture, Compound, Compound Forms or Related Compounds.
(b) Right to Sublicense.
This license to BMS includes the right of BMS to grant sublicenses to Affiliates and non-Affiliates in the Rest of Territory; provided that, prior to granting any sublicenses under this Agreement (excluding sublicenses to BMS Affiliates), BMS shall notify Otsuka in writing of the identity of each Sublicensee, the rationale for the grant of each sublicense as it relates to BMS’s overall plan for Commercializing Product throughout the Rest of Territory, and the specific Product and countries within the Rest of Territory to which each sublicense will pertain; provided further that BMS shall cause each of its Affiliate Sublicensees to comply, and shall require each non-Affiliate Sublicensee to agree in writing in its sublicense to be bound by and comply, with all the provisions and limitations of this Agreement applicable to BMS that are applicable to the rights sublicensed, and with all provisions and limitations agreed upon by the PDC or JCC related to Product quality and manufacturing practices, including reasonable provisions allowing Otsuka to audit compliance with such provisions; and provided further that BMS hereby guarantees to Otsuka each Sublicensee’s performance of and compliance with all provisions and limitations of this Agreement applicable to BMS. Within thirty (30) calendar days of executing each such sublicense, BMS shall furnish to Otsuka a true and complete copy of each such sublicense to ensure compliance with the provisions of this Section 5.4. The JCC shall appoint a BMS representative to serve as a liaison to the JCC and to Otsuka regarding Sublicensee issues (if any).
5.4.2 Grant of Limited License to BMS in the United States.
Subject to the terms and conditions of this Agreement, including the reservation of rights set forth in Section 5.4.3(c) and the Product supply obligations set forth in Section 5.11.6 and the BMS-OAPI Product Supply Agreement, Otsuka hereby grants to BMS, and BMS hereby accepts, a limited, non-exclusive license, under the Patent Rights and Otsuka’s related know-how, data and information, to make Product in the United States (but not Compound, Compound Form or any Related Compound) solely in order that BMS may fulfill the purposes contemplated in this Agreement or to be set forth in the
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BMS-OAPI Product Supply Agreement and for no other purpose. Product that BMS makes under this license for sale in the United States may only be sold to Otsuka, its Affiliates and designees. This license to BMS includes the right of BMS to grant sublicenses to BMS Affiliates in the United States, but BMS is otherwise expressly prohibited from granting any other sublicense. BMS shall cause each of its Sublicensees to comply with all the provisions and limitations of this Agreement, including this limited license, and the BMS-OAPI Product Supply Agreement applicable to BMS that are applicable to the rights sublicensed, and with all provisions and limitations agreed upon by the PDC or JCC related to Product quality and manufacturing practices, including reasonable provisions allowing Otsuka to audit compliance with such provisions. BMS hereby guarantees to Otsuka each Sublicensee’s performance of and compliance with all provisions and limitations of this Agreement and the BMS-OAPI Product Supply Agreement that are applicable to BMS.
5.4.3 Otsuka’s Reservation of Rights .
Otsuka hereby reserves the following rights, which are excluded from the scope of the licenses granted to BMS in Sections 5.4.1 and 5.4.2.
(a) Reserved Territory.
Otsuka reserves the exclusive rights, which it may exercise itself or with or through its Affiliates (but not non-Affiliates, except in Japan where Otsuka in its discretion, may engage non-Affiliate third parties), to make, have made, use and sell Product, in and out of the Field, in the Reserved Territory. If at any time Otsuka (in its sole discretion) decides not to Commercialize Product in any country in the Reserved Territory, itself or with or through an Affiliate (or non-Affiliate in Japan), Otsuka agrees promptly to notify BMS in writing to that effect, in which case such country shall be deemed removed from Otsuka’s Reserved Territory and added to BMS’s Rest of Territory subject to BMS’s license under Section 5.4.1 and its obligations under the Agreement. In addition, if with respect to any country in the Reserved Territory (other than Japan) (i) the requisite number of certificates of free sale for registering Product in such country appropriate for dosage in the local market have become available, appropriate price listing, if required, for Product has been obtained in such country, and there is no further legal or regulatory impediment to the commencement of the commercial launch of Product in such country, but (ii) within twelve (12) months thereafter, Otsuka has not, itself or through an Affiliate, fled a MAA to register such Product in such country, such country shall be deemed removed from Otsuka’s Reserved Territory and added to BMS’s Rest of Territory subject to BMS’s license under Section 5.4.1 and its other obligations under this Agreement. Japan shall always remain part of Otsuka’s Reserved Territory unless and until Otsuka notifies BMS in writing (in Otsuka’s sole discretion) of Otsuka’s express decision to remove Japan from the Reserved Territory and make it part of BMS’s Rest of Territory. Upon BMS’s receipt of
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such notice, Japan shall be deemed removed from Otsuka’s Reserved Territory and added to BMS’s Rest of Territory subject to BMS’s license under Section 5.4.1 and its obligations under this Agreement.
(b) Animal Products and Human Over-The-Counter Products.
Otsuka reserves, for itself its Affiliates and non-Affiliate sublicensees and contractors, all rights worldwide (including in the Territory) to make, have made, use and sell products containing the Compound, Compound Forms and Related Compounds for use with animals and for use with humans on an over-the-counter (“OTC”) (non prescription) basis; provided that , so long as BMS is the exclusive (other than Otsuka) promoter or Distributor of Product in the United States and the European Union under this Agreement, Otsuka shall neither perform clinical trials of nor Commercialize, nor license others to develop or Commercialize, such products without the prior consent of BMS. As to products for animal use, BMS’s consent shall be at its sole discretion. As to OTC use, however, BMS may withhold its consent only if the proposed development or Commercialization of such products for human OTC use would have a negative impact on the Commercialization or profitability of Product in the Territory; and BMS shall be deemed automatically to have granted its consent as described above unless it notifies Otsuka in writing, within thirty (30) days of receipt of Otsuka’s written request, that BMS is withholding its consent and the reasons therefor.
(c) Manufacture and Purchase of Compound, Compound Forms and Related Compounds; Packaging.
Notwithstanding the provisions of Sections 5.4.1 and 5.4.2, Otsuka reserves the exclusive worldwide right, for itself its Affiliates and non-Affiliate sublicensees and contractors, to manufacture, or have manufactured, Compound, Compound Forms and Related Compounds, as described in greater detail in Section 5.11 (“Supply”).
5.5. Product Position in Sales Calls .
BMS’s and its Affiliates’ sales forces, and Otsuka’s and its Affiliates’ sales forces should Otsuka elect to Co-Promote the Product in some or all of the Co-Promotion Countries, (i) shall promote Product in the Primary Position in all Calls in the United States and each country of the European Union for at least two (2) years following the Launch Date in each such country; (ii) in the third year following the Launch Date in each such country, shall promote Product in the Primary Position in no less than [*] of all Calls on the target group in such country determined by the JCC to be high prescribing psychiatrists (meaning those psychiatrists who are high prescribers of Product or leading competitive products); and (iii) shall never, during the term of this Agreement, promote Product below the Secondary Position in Calls in the United States and the European Union.
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5.6. Advertising and Promotional Materials .
BMS shall bear the entire cost of advertising and promotion of Product throughout the Territory. All advertising and public relations agencies and other relevant suppliers retained to provide advertising and promotional materials or services shall be approved by the JCC. All advertising and promotional materials shall be in full compliance with all applicable laws and regulations. As provided in Section 5.7 below, Otsuka personnel shall have the opportunity to be involved in the preparation and selection of all advertising and promotional materials. Before dissemination, all advertising and promotional materials shall be subject to review by representatives of Otsuka and BMS from the legal, regulatory, medical/clinical research and development disciplines. In the United States and the European Union, where Otsuka will be the holder of the NDA and the MA, respectively, Otsuka’s prior written approval of all advertising and promotional materials must be obtained prior to their dissemination, which approval shall not be unreasonably withheld or delayed. Otsuka or its Affiliates shall have copyright ownership and control of all Product-related advertising and promotional materials, and BMS hereby assigns to Otsuka any and all interest it may have in such materials developed during the term of this Agreement; provided, that, during the term of this Agreement, BMS shall have the royalty-free right to reproduce, distribute and otherwise use in the Territory such advertising and promotional materials, subject to the requirement of Otsuka’s approval set forth above.
5.7. Involvement of Otsuka in Development, Regulatory Affairs and Commercialization Process .
Subject to Otsuka’s Co-Promotion rights, BMS has the ultimate obligation under this Agreement for Commercialization of Product throughout the Territory, at its sole cost except for the specified undertakings of Otsuka set forth in this Agreement. Nevertheless, the parties agree that an essential element of this Agreement, in addition to Otsuka’s participation on the PDC, the JCC and subcommittees of those committees, is Otsuka’s right to have its representatives closely involved with BMS representatives in all stages of the Product development, regulatory affairs and Commercialization process, to the maximum extent legally permissible. This shall include (without limitation) an opportunity for Otsuka representatives to be involved in: all pre-launch and post-launch BMS internal meetings directly related to Product development, regulatory affairs or Commercialization, including all staff activities and deliberations leading to the formulation of the Product Development Plan and the various Marketing Plans (and ongoing modifications of such plans); review and consultation in connection with all study protocols and the progress of ongoing studies; pre-launch and post-launch promotional strategies, tactics and budgets being recommended to the JCC for its approval; regulatory strategy and labeling issues; the implementation of such plans, strategies and tactics; full participation in Product promotional activities (pre-launch and post-launch) in the United States and the European Union; price reimbursement
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deliberations and meetings; the determination and assignment of sales forces; and other issues. The parties shall keep each other advised on an ongoing basis of the specific representatives of each party responsible for various Product-related issues and activities, and BMS shall—to the full extent practicable—contact the appropriate Otsuka representatives prior to meetings regarding various issues and activities, thereby giving the Otsuka representatives an opportunity to attend and participate in such meetings. Where particular issues must be addressed quickly and without opportunity for advance notice, BMS shall contact Otsuka representatives and give them the opportunity to participate in discussions of such issues by telephone. For the sake of clarification, Otsuka’s involvement in internal BMS meetings shall be limited to those meetings directly related to Product matters. Otsuka shall not participate in BMS’s internal meetings or deliberations regarding BMS’s overall product portfolio (in which the Product is one element), including meetings or deliberations regarding BMS’s budget, strategic plan, research and development plan or business operation review of its product portfolio.
5.8. Promotional Samples .
5.8.1 Supply of Promotional Samples .
During the first three (3) years following the Launch Date in the United States, Otsuka will provide BMS (as contract service provider to Otsuka in the United States, as contract service provider to Otsuka in certain countries of the European Union and Distributor in others, and as licensee elsewhere in the Territory) (i) Compound (to be used by BMS to manufacture into promotional samples of Product in certain formulations to be distributed in the United States and the Rest of Territory, and to be used by BMS to manufacture into promotional samples of Product in all formulations other than in the Bulk Tablet formulation to be distributed in the European Union) and (ii) Bulk Tablets (for promotional samples of Product in the Bulk Tablet formulation to be distributed in the European Union). Otsuka shall provide such Compound and Bulk Tablets, for use as promotional samples throughout the Territory, free of charge up to an aggregate total, counting all Compound and Bulk Tablets provided by Otsuka for samples during the entire three-year period, equal to or sufficient to make 26.4 million Bulk Tablets in the dosage approved by the PDC. For promotional samples, in quantities approved by the JCC, that the JCC or BMS (either as contract service provider to Otsuka or as Distributor or licensee) requests after such three-year period or requests at any time in quantities in excess of Compound and/or Bulk Tablets equal to or sufficient to make 26.4 million tablets during the three-year period, BMS will pay the following to Otsuka in partial consideration for the rights granted to BMS in this Agreement and as its contribution to the cost of such promotional samples: (a) U.S. $0.30 per Bulk Tablet, for Bulk Tablets provided by Otsuka for promotional samples, and (b) for Compound provided by Otsuka to BMS that BMS manufactures into promotional samples, BMS shall pay in accordance with the following formula per milligram of Compound: U.S. $0.30 ÷ X, where X equals
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the number of milligrams of Compound contained in one Bulk Tablet as manufactured for sampling purposes.
BMS shall be responsible, at its expense, for finishing and packaging (i) all samples in all formulations (including Bulk Tablets) to be distributed in the United States and the Rest of Territory, and (ii) all samples of Product to be distributed in the European Union other than in the Bulk Tablet formulation. Otsuka shall be responsible for packaging all samples in the Bulk Tablet formulation to be distributed in the European Union; provided that BMS shall reimburse Otsuka for the cost of all such packaging of samples in accordance with Section 5.11.4. In addition, in accordance with Section 5.11.1(c), BMS shall also reimburse Otsuka for Otsuka’s out-of-pocket shipping, customs, insurance and warehousing expenses pertaining to Compound and Bulk Tablets provided for promotional samples.
5.8.2 Distribution of Samples .
Promotional samples shall be distributed in accordance with plans adopted by the JCC. In countries where Otsuka or its Affiliates Co-Promote the Product, BMS shall provide Otsuka’s and its Affiliates’ sales representatives with proportionate quantities of promotional samples for distribution.
5.9. Payments and Disbursement of Proceeds; Reports; Audits .
5.9.1 Fees to BMS .
(a) Fees for Services in the European Union .
In each country in the European Union where BMS and its Affiliates promote and sell Product for the account of Otsuka or its Affiliates as contract service providers to Otsuka and its Affiliates, including collection and disbursing the Product sales proceeds, BMS shall be entitled to fees equal to the portion of the Net Sales in such country remaining after Otsuka receives thirty-five percent (35%) thereof, which amount BMS shall disburse to Otsuka in accordance with Section 5.9.3. When, as and if Otsuka and its Affiliates elect to assume responsibility for the collection and disbursement of sales proceeds from the sale of Product in such country, or the disbursement of sales proceeds collected by BMS, BMS shall be entitled to fees equal to sixty-five percent (65%) of the Net Sales in such country (to be disbursed in accordance with Section 5.9.3). On a country-by-country basis, such fees to BMS shall be deemed to be paid directly to the BMS Affiliate in the country in question that is marketing and selling Product. The Otsuka entity deemed to receive its share of Net Sales (the balance of Net Sales proceeds) shall be as designated by Otsuka.
For the sake of clarification, the foregoing provisions do not apply in any country in the European Union where, at Otsuka’s election, a BMS Affiliate operates as a
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Distributor of Product for Otsuka or its Affiliates in such country, as provided in Section 5.3.12.
(b) Fees for Services in the United States .
In the United States, where BMS sells Product for the account of Otsuka or its Affiliate as a contract service provider to Otsuka and its Affiliate, including collecting and disbursing the Product sales proceeds, BMS shall be entitled to fees equal to the portion of the Net Sales remaining after Otsuka receives a net [*] of Net Sales in the United States (which BMS shall disburse to Otsuka promptly in accordance with Section 5.9.3). Such calculation of Otsuka’s share shall exclude the [*] royalty to be paid by BMS or BMSLC to Otsuka as provided in Section 5.9.2(b), which royalty shall be additional revenue to Otsuka over and above its [*] of Net Sales.
When, as and if Otsuka and its Affiliates elect to assume the collection and disbursement of sales proceeds from the sale of Product in the United States, BMS shall be entitled to [*] of Net Sales in the United States. The Otsuka entity deemed to receive its share of fees shall be as designated by Otsuka. In either case described above, BMS or BMSLC shall, in addition, pay the above-described royalty to Otsuka in the amount of [*] of Net Sales in the United States.
5.9.2 Royalty Payments .
(a) Royalties on Net Sales in the Rest of Territory .
With respect to each country in the Rest of Territory, where Product will be sold for the account of BMS or its Affiliates or Sublicensees, BMS shall pay the following royalty payments to Otsuka:
(i) Royalties on Net Sales in Patent Countries . BMS shall pay Otsuka a royalty equal to [*] on all Net Sales in all Patent Countries for the Royalty Term in the Patent Countries; and
(ii) Royalties on Net Sales in Non-Patent Countries . BMS shall pay Otsuka a royalty equal to [*] on all Net Sales in all Non-Patent Countries, for the Royalty Term in the Non-Patent Countries.
(b) Royalties on Net Sales in the United States .
In consideration for Otsuka’s transfer to BMS of manufacturing rights and know-how (as provided in Sections 5.4.2 and 5.11.6), BMS, through BMSLC, shall pay Otsuka a royalty equal to [*] on all Net Sales in the United States
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attributable to or arising from the sale of any and all Products made by BMS or its Affiliates.
5.9.3 Payments of Amounts Due .
Following the Restated Agreement Date, the parties shall discuss and agree upon reasonable procedures for collecting, depositing and disbursing Product sales proceeds, which procedures shall be consistent with the overall structure of this Agreement and shall be subject to modification from time to time by mutual written agreement of Otsuka and BMS. In determining such procedures, the parties’ goal shall be to disburse Net Sales proceeds in accordance with Section 5.9.1 so that such proceeds are disbursed to the parties in such a way that neither party earns interest on the other party’s share. BMS/BMSLC shall also pay Otsuka royalties due on Net Sales in the United States under Section 5.9.2(b) at the same time(s) BMS, as contract service provider to Otsuka, disburses United States Net Sales proceeds to Otsuka.
The fees and Net Sales proceeds remittances due pursuant to Section 5.9.1, royalty payments due pursuant to Section 5.9.2, Compound Purchase Price payments due pursuant to Section 5.11.2 and the Otsuka-BMS Compound Supply Agreement, the Global Floor Price-Based Adjustment pursuant to Section 5.11.3, Product Purchase Price payments due pursuant to Section 5.11.2 and the BMS-OAPI Product Supply Agreement, and, for each BMS Affiliate acting as a Distributor pursuant to Section 5.3.12, payments by such Distributor for Product purchased by it from Otsuka or its Affiliates, shall all be paid and disbursed in accordance with the procedures agreed upon by the parties and consistent with the overall structure of this Agreement. Such payments shall be reconciled and settled on a calendar quarter-by-calendar quarter basis (provided that, in Otsuka’s discretion, the reconciliation of the Compound Purchase Price and the Global Floor Price-Based Adjustment may be done annually rather than quarterly). The first “quarter” shall commence on the earlier of (i) the First Commercial Sale of Product anywhere in the Territory, (ii) the first placement of an order for Compound under the Otsuka-BMS Supply Agreement, or (iii) the first placement of an order for Product by a BMS Affiliate or Distributor, and shall end on the last day of the calendar quarter in which such event occurs.
BMS shall pay all royalties due on Net Sales in the Rest Territory on a quarterly basis as provided in Section 5.9.4. BMS (on behalf of itself and its Affiliates acting as Distributors) shall, within fifty (50) days of the receipt of each invoice for Product sold to Distributors in the European Union (which shall be issued no earlier than the dispatch of the shipment), pay all such invoices from Otsuka, Otsuka’s Affiliates or its designee, as the case may be, by wire transfer to the bank account designated by Otsuka, Otsuka’s Affiliates or its designee.
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In the event BMS fails to make any payments when due, such payments shall accrue interest at the rate of [*] per annum or the maximum amount permitted by law, whichever is less.
5.9.4 Quarterly Royalty Payments .
In respect of Net Sales in all countries in the Rest of Territory, BMS shall, in accordance with Sections 5.9.2 and 5.9.3, be obligated to Otsuka with respect to payment of royalties on all Net Sales of Product by BMS and its Affiliates and Sublicensees, such payments being due each calendar quarter within sixty (60) days of the end of each such quarter. Each royalty payment shall be made in accordance with Section 5.9.6 and shall be accompanied by a report as described in Section 5.9.8.
BMS shall pay Otsuka, in a single, consolidated payment, all royalties due on Net Sales in the Rest of Territory in a given calendar quarter, such payment to be in United States Dollars. For purposes of calculating the amount of such royalties due, sales of Product made in currencies other than United States Dollars shall be converted to United States Dollars on the basis of BMS’s customary internal corporate monthly exchange rates (as described in Section 5.9.8) for the last month of the calendar quarter for which remittance is made.
5.9.5 Certain Minimum Payments .
Without limiting its royalty obligations as set forth in Section 5.9.2, BMS shall pay Otsuka minimum payments (including payments for royalties and Compound) in respect of Net Sales in the Rest of Territory during each Year of the Royalty Term as follows:
(a) First Year: [*];
(b) Second Year: [*];
(c) Third Year: [*];
(d) Fourth Year: [*]; and
(e) Fifth Year: [*].
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As used in this Section 5.9.5, each “Year” shall be determined as follows: the “First Year” shall mean (a) the period beginning on the First Commercial Sale of Product in Canada or Australia, whichever country where the First Commercial Sale occurs later, through the last day of the calendar quarter in which such First Commercial Sale occurs, plus (b) the three (3) calendar quarters immediately thereafter. The Second Year shall be the next four (4) calendar quarters following the First Year, and so on.
Notwithstanding the above, BMS’s obligation under this Section 5.9.5 to make the minimum payments shall cease when both of the following occur with respect to either Canada or Australia: (i) there ceases to be a Valid Claim covering Product being sold in such country, and (ii) the First Commercial Sale in the same country by another company (which shall be neither an Affiliate nor Sublicensee of BMS) of any generic human pharmaceutical product containing Compound or Compound Form as an active ingredient. In such case, BMS shall make the minimum payment for the Year in which its minimum royalty obligation ceases, the amount of the minimum payment obligation to be determined as set forth above, but prorated to reflect the abbreviated Year.
With respect to a given Year, in the event that [*] of the Net Sales in the Rest of Territory for such Year (the “Reference Amount”) does not equal or exceed the above minimum payment obligation for such Year, BMS shall, within sixty (60) days of the end of such Year, either pay the difference between the Reference Amount for such Year and the minimum payment due under this Section 5.9.5 for such Year, or BMS’s license in the Rest of Territory shall automatically be terminated, notwithstanding Section 5.4.
All payments from either party to the other shall be in United States Dollars or, in lieu thereof, in Japanese yen, Euros or pounds sterling, as the recipient party, in its discretion, shall specify in writing to the paying party. The paying party shall make all payments by wire transfer to the recipient party’s designated bank account. Payments in yen or such currency other than U.S. Dollars as the recipient party shall designate shall be in the amount equivalent to the U.S. Dollar amount of the related payment at the applicable exchange rate (the spot rate of the bank making the payment) prevailing on the date of remittance of the payment by the paying party. In the event that the paying party fails to make any payments when due, such payments shall accrue interest at the rate of [*] per annum or the maximum amount permitted by law, whichever is less. The parties contemplate that all payment obligations due at the same time will be consolidated into a single, lump-sum payment between the parties (with the accompanying report allocating such payment among the various Affiliates as appropriate); provided that , the parties may agree that payments in respect of Net Sales in the United States and European Union, on a country-by-country basis, be made by the local Affiliate of the paying party and to the local Affiliate of the recipient party, in each case as the paying party and the recipient party may elect, in which case the paying party shall remain liable to the recipient party for the full payment.
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5.9.6 Regular Reports Pertaining to the United States and the European Union .
After the First Commercial Sale of Product in the United States or the European Union, to the extent Otsuka and its Affiliates have not elected to collect sales proceeds, BMS (as contract service provider to Otsuka and its Affiliates) shall provide Otsuka with monthly written reports, in form and substance reasonably satisfactory to Otsuka. Such reports shall include a country-by-country summary of the total sales and Net Sales of Product (whether the result of the promotional efforts of BMS, Otsuka or their Affiliates) for the account of Otsuka or its Affiliates during the month in question; the deductions from total sales leading to the calculation of Net Sales; the calculation of the portion (calculated in accordance with Section 5.9.1) of Net Sales due Otsuka and BMS or their respective Affiliates; the calculation of the royalties on Net Sales in the United States due Otsuka in accordance with Section 5.9.2(b); the total sales by Distributors on a country-by-country basis; and the date of First Commercial Sale in the United States and European Union occurring in such month. In addition to the foregoing reports, BMS shall, when, as and if requested by Otsuka, provide such additional reports to Otsuka as BMS regularly prepares in the course of its business and as may be reasonably appropriate and relevant to the transactions contemplated in this Agreement. Sales made in currencies other than United States Dollars shall be converted to United States Dollars on the basis of BMS’s customary internal corporate monthly exchange rates for the month with respect to which the statement is made. For each month and each currency, BMS’s customary internal corporate monthly exchange rate shall equal the arithmetic average of the daily exchange rates (obtained as described below) during the period from (a) the 20th day of the preceding month (or, if such 20th day is not a Business Day, the immediately preceding Business Day) through (b) the 19th day of the current month (or, if such 19th day is not a Business Day, the immediately preceding Business Day); each daily exchange rate is obtained from the Reuters Daily Rate Report or The Wall Street Journal , Eastern U.S. Edition, or, if not so available, as furnished by BMS’s local Affiliates.
When, if and to the extent Otsuka or its Affiliates elect to assume the collection of Product sales proceeds for their own account in the United States or any country in the European Union, Otsuka shall provide BMS with monthly written reports, in form and substance reasonably satisfactory to BMS. Each report shall, with respect to each relevant country, include a country-by-country summary of the total sales and Net Sales of Product during the month in question; the deductions from total sales leading to the calculation of Net Sales; the calculation of the portion (calculated in accordance with Section 5.9.1) of Net Sales due BMS and Otsuka or their respective Affiliates; and the calculation of the royalty on Net Sales in the United States due Otsuka in accordance with Section 5.9.2(b). In addition to the foregoing reports (and also conditioned upon the election of Otsuka or its Affiliates to assume the collection of Product sales proceeds for their own account), Otsuka shall, when, as and if requested by BMS, provide such
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additional reports to BMS as Otsuka regularly prepares in the course of its business and as may be reasonably appropriate and relevant to the transactions contemplated in this Agreement. Sales made in currencies other than United States Dollars shall be converted to United States Dollars on the basis of a monthly exchange rate equal to the arithmetic average of the daily exchange rates in such month (the same days of the month as described in the immediately preceding paragraph) obtained by Otsuka from the Reuters Daily Rate Report, The Wall Street Journal, Eastern U.S. Edition, or The Financial Times, or, if not so available, as furnished by Otsuka’s local Affiliates (unless the parties agree on a different basis for establishing such exchange rates) for the month with respect to which the statement is made.
If necessary, for the purpose of preparing the above-described reports, each party shall promptly furnish the other with all requisite data, information, books, records and other pertinent materials in its control.
In addition to the above-described monthly reports pertaining to the United States and the European Union, BMS (and Otsuka to the extent it assumes responsibility for the functions to be reported upon) shall provide to the other party other information and reports, in mutually agreeable formats, regarding other commercially relevant information, as the JCC deems appropriate.
5.9.7 Quarterly Reports .
BMS shall, in addition to or incorporated with the reports to be prepared in accordance with Section 5.9.6, provide Otsuka with quarterly written reports as described below, in form and substance reasonably satisfactory to Otsuka, within sixty (60) days from the last day of each calendar quarter during the term of this Agreement. Each report shall contain the following, as applicable:
(a) Royalties in the Rest of Territory . After the First Commercial Sale of Product in the Rest of Territory, each report shall include a country-by-country summary of the total sales and Net Sales of Product in the Rest of Territory during the calendar quarter in question; the deductions from total sales leading to the calculation of Net Sales; the calculation of royalties payable on such sales; and the date of First Commercial Sale in each country of the Rest of Territory occurring in such quarter.
(b) Purchase Price for the United States and the Rest of Territory . After the first placement of an order for Compound under the Otsuka-BMS Compound Supply Agreement, with respect to the Purchase Price of Compound supplied by Otsuka or its designee and sold as Product during such quarter in the United States and the Rest of Territory, each report shall include a reconciliation of the Tentative Price of Compound with the Purchase Price of Compound, as provided in Section 5.11.2 and the Otsuka-BMS Compound Supply Agreement.
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(c) Global Floor Price-Based Adjustment . After the First Commercial Sale of Product in the Territory, each report shall include a calculation of the Global Floor Price-Based Adjustment for such quarter as provided in Section 5.11.3.
(d) Purchase Price for European Union . After the First Commercial Sale of Product in any country in the European Union by BMS’s local Affiliate acting as Distributor for Otsuka or its Affiliates in such country, with respect to all such countries, and with respect to the Purchase Price of Product supplied by Otsuka or its Affiliates and sold during such quarter in such countries, each report shall include a reconciliation of the Tentative Price with the Purchase Price, as provided in Section 5.11.2.
(e) Minimum Payment Obligation . With reference to Section 5.9.5, if such quarter is also the fourth (4th) quarter of a Year, each report shall include a reconciliation of the minimum payment obligation and the Reference Amount for such Year as provided therein.
(f) Currency Conversion . For purposes of reports under this Section 5.9.7, sales made in currencies other than United States Dollars shall be converted to United States Dollars on the basis of BMS’s customary internal corporate monthly exchange rates for the last month of the calendar quarter with respect to which the report is made. For each month and each currency, BMS’s customary internal corporate monthly exchange rate shall equal the arithmetic average of the daily exchange rates (obtained as described in Section 5.9.6) during the period from (a) the 20th day of the preceding month (or, if such 20th day is not a Business Day, the immediately preceding Business Day) through (b) the 19th day of the current month (or, if such 19th day is not a Business Day, the immediately preceding Business Day).
5.9.8 Books and Records .
With respect to the United States and European Union, BMS (as contract service provider to Otsuka) shall, and shall cause its Affiliates to, keep full, true and accurate books and records that disclose the total sales and Net Sales of Product on a country-by-country basis accrued by BMS or its Affiliates for the account of Otsuka or its Affiliates, the number of units of Product sold in each country and all matters relating to those sales that are relevant for the purposes of determining the portion (calculated in accordance with Sections 5.9.1 and 5.9.2(b) of Net Sales due to Otsuka and its Affiliates, BMS and its Affiliates and, where BMS’s Affiliates act as Distributor, the Purchase Price of Product due Otsuka and its Affiliates, and, as applicable, the adjustments and reconciliations provided in Section 5.11. Such books and records shall be retained for five (5) years following the occurrence of such sales.
When, as and if Otsuka or its Affiliates elect to assume the collection of Product sales proceeds for their own account in the United States or any country in the European
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Union, Otsuka shall, and shall cause its Affiliates to, with respect to each relevant country, keep full, true and accurate books and records that disclose the total sales and Net Sales of Product on a country-by-country basis, the number of units of Product sold in each country and all matters relating to those sales that are relevant for the purposes of determining the portion (calculated in accordance with Section 5.9. 1, and subject to Section 5.11.7) of Net Sales due to BMS and its Affiliates. Such books and records shall be retained for five (5) years following the occurrence of such sales.
With respect to the Rest of Territory, BMS shall, and shall cause its Affiliates and Sublicensees to, keep full, true and accurate books and records that disclose the total sales and Net Sales of Product on a country-by-country basis, the number of units of Product sold in each country of the Rest of Territory and all matters relating to those sales that are relevant for the purposes of determining the royalties and Purchase Price for Compound to be paid by BMS to Otsuka, and, as applicable, the adjustments and reconciliations provided in Section 5.11. Such books and records shall be retained for five (5) years following the occurrence of such sales.
5.9.9 Audits .
Each party (as recipient party of amounts due to it) shall, at its expense, have the right, during normal business hours on thirty (30) days’ prior written notice to the other party (as paying party of such amounts), and not more than once in any calendar year, to have a recognized independent public accounting firm selected by the recipient party examine the relevant books and records of the paying party, its Affiliates and, in the case of BMS, Sublicensees, for the sole purpose of verifying:
(a) where BMS is the recipient party, the amounts due under Section 5.9.1 in the event Otsuka and its Affiliates have elected to assume the collection or disbursement of sales proceeds; or
(b) where Otsuka is the recipient party, disbursement of sales proceeds in accordance with Section 5.9.1, royalties due under Section 5.9.2, minimum payments due under Section 5.9.5, the adjustments and reconciliations provided in Section 5.11, the Purchase Price due under Section 5.11.2, the Global Floor Price-Based Adjustment under Section 5.11.3, and any other payment-related obligations hereunder.
Each party shall cause its Affiliates to comply fully with such examination of Affiliate books and records.
Such accounting firm shall not disclose to the auditing party any information relating to the audited party’s business except whether the audited party’s fee reports or, in the case of BMS as audited party, the reports under Sections 5.9.6 and 5.9.7 to the auditing party are correct or incorrect, and if incorrect, the specific details concerning any
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discrepancies and the amounts due under this Agreement. If the accounting firm discovers errors in favor of the recipient party of [*] or more, in the aggregate, in the calculation of amount due for any calendar quarter, the paying party shall reimburse the recipient party for the expense of such examination and shall promptly pay the recipient party the deficiency amount (together with interest thereon from the date such amount was originally due). Should the examination reveal an error in favor of the paying party, the amount of such erroneous overpayment shall first be credited against the expense of such examination incurred by the recipient party, and the balance of the erroneous overpayment to the recipient party, if any, shall be credited against the next payment due the recipient party under this Agreement. As a condition to the conduct of the above-described examination, the independent public accounting firm selected by the recipient party shall execute a written agreement, reasonably satisfactory in form and substance to the audited (paying) party, to maintain in confidence all information obtained during the course of any such examination except for disclosure to the recipient party and its representatives as appropriate for the above purpose. The findings of such independent public accounting firm regarding such reports, accounting and payments shall be final and binding on the parties hereto.
5.9.10 Withholding Tax .
Any taxes either party is required by law to withhold from amounts payable to the other party under this Agreement shall be deducted by the paying party from the amounts paid to the recipient party hereunder at the rate(s) required by applicable law and paid to the appropriate governmental agency on behalf of the recipient party. The paying party shall promptly provide to the recipient party receipts from the government or taxing authority evidencing payment of such taxes, if available, or other written proof of payment if official receipts are not available, and shall provide reasonable assistance to the recipient party to obtain tax credits therefor.
5.10. Diligence Standards .
5.10.1 General .
The fundamental objective of this Agreement is to optimize the sales potential of Product throughout the Territory and to promote the therapeutic profile and benefits of Product in the most appropriate commercially rewarding manner consistent with the appropriate labeling of Product. In furtherance of this objective, BMS agrees to, and shall, use all commercially reasonable efforts to develop and perform appropriate clinical studies for Product, obtain and maintain regulatory approvals (including pricing and reimbursement listings) for the marketing of Product throughout the Territory, develop new Product indications and formulations, and Commercialize Product throughout the Territory. Another important objective of this Agreement is to increase the prominence, profile and reputation of Otsuka and its Affiliates in the United States and Europe. In
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performing its obligations under this Agreement, BMS shall comply with all applicable laws and regulations throughout the Territory.
BMS will conduct with due diligence and all commercially reasonable efforts, consistent with the objective of this Agreement as set forth in the immediately preceding paragraph and otherwise in accordance with this Agreement, at its sole risk and expense (except for Otsuka’s undertakings hereunder with respect to the Otsuka Clinical Studies), all Product development work and regulatory activities required to obtain and maintain marketing approval in each country of the Territory, and any and all additional Product development work (including Phase IIIb and Phase IV studies) that may be necessary or desirable for the optimal Commercialization of Product. In addition, and at its sole expense, BMS will diligently use all commercially reasonable efforts, through further research and development, to develop new Product indications (including, without limitation, bipolar disorder) and formulations (such as IM, Depot, etc.), to the extent supportable by scientific and clinical data and information, appropriate or desirable for the optimal Commercialization of Product.
5.10.2 [*].
Without limiting BMS’s obligations under this Agreement, and as one factor for the purpose of assessing the development and Commercialization efforts of BMS in carrying out its obligations under this Agreement, the parties hereby set the following [*]:
[*]
In addition, the following assumptions apply:
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(a) “Product launch” occurs in both the United States and the European Union no later than [*];
(b) As launched, Product will have an indication for the treatment of [*], together with a second indication, being the treatment of [*];
(c) Product meets the Target Product Profile;
(d) [*];
(e) There is no [*]; and
(f) [*] continues to apply to Product.
Should any of the above assumptions not apply, the JCC shall determine [*] for [*] appropriate under the then-prevailing circumstances.
With respect to each of the two regions (the United States and European Union), the JCC shall establish an [*] no later than twelve (12) months prior to [*].
BMS’s development, marketing, promotion and sales efforts for Product shall be consistent at least with [*], it being understood that marketing, promotion and sales efforts may [*]. It is also the parties’ understanding that [*].
5.10.3 Comparable Efforts .
Without limiting Section 5.10.1 or 5.10.2, BMS shall commit development, marketing, promotion and sales efforts to Product no less than what it would to one of its own products with a target detailing audience and sales potential comparable to Product.
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5.10.4 No Undue Delay .
BMS shall commence marketing Product in any country of the Territory within three (3) months of obtaining regulatory approval and (as necessary) full reimbursement or other pricing approval in that country. If BMS fails to commence marketing of Product in any country within such time period, unless such failure is caused by Otsuka’s failure to supply Compound, Bulk Tablets or Product, as the case may be, to BMS in a timely fashion - the parties will immediately meet to discuss the reason(s) for such delay and agree upon measures and a Schedule to remedy the situation. If the parties do not, within a reasonable period of time, agree upon measures to remedy the situation and promptly commence marketing in such country, Otsuka may, in its discretion, remove such country from the Territory; provide that , if such country is the United States or if two (2) such countries are in the European Union, Otsuka may, in its discretion, either remove such country(ies) from the Territory or terminate this Agreement as a whole, in either case, such action shall be effective on thirty (30) days’ written notice to BMS. In such case, this Agreement shall be deemed terminated with respect to such country or as a whole, as the case may be, and the provisions of Sections 12.3, 12.7 and 13 shall apply. In the event that Otsuka removes one or more countries in the European Union pursuant to this Section 5.10.4, BMS may, in its discretion, within ninety (90) days of its receipt of Otsuka’s decision, remove the European Union as a whole (but not in part) from the Territory on thirty (30) days’ written notice to Otsuka. In such case, the Agreement shall be deemed terminated with respect to the entire European Union, and the provisions of Section 12.3, 12.7 and 13 shall apply.
Notwithstanding the immediately preceding paragraph, if BMS fails to commence marketing Product within the above-specified time period due to government-imposed pricing or reimbursement constraints that the JCC reasonably determines would have a substantial adverse effect on its pricing and optimal Commercialization of Product elsewhere in the Territory, the parties shall meet to discuss the situation. Unless the JCC’s determination can be shown to have been commercially unreasonable, through dispute resolution if necessary in accordance with Section 14, Otsuka may not remove such country from the Territory on the basis of BMS’s failure to commence marketing of Product in such country in timely fashion.
5.11. Supply and Packaging of Compound, Bulk Tablets and Product .
5.11.1 Commercial Requirements of Compound and Product .
(a) Otsuka shall be responsible for manufacturing and procuring, for its own account, all of the commercial requirements of Compound and Product for the European Union; provided, however , that, in the case of Product in any formulation other than the Bulk Tablet formulation:
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(1) BMS shall, as contract manufacturer (with respect to formulation through packaging), but without charge to Otsuka, convert Compound provided by Otsuka into Product; in such case, the parties shall discuss, prepare and enter into a manufacturing agreement, which shall be consistent with the applicable provisions of this Agreement, pursuant to which BMS will toll manufacture Product in such other formulations for Otsuka, at no charge to Otsuka, for sale in the European Union; and
(2) notwithstanding clause (1) above, Otsuka retains the option to manufacture such Product, at its own cost and expense.
When, as and if BMS’s Affiliates are acting as Distributor in any country or countries in the European Union (pursuant to Section 5.3.12), Otsuka or its Affiliates shall supply to such BMS Affiliates, and such BMS Affiliates shall purchase exclusively from them (at the Purchase Price as provided in Section 5.11.2), any and all of their requirements of Product for resale in such country or countries.
(b) During the term of this Agreement, for the Purchase Price set forth in Section 5.11.2(a)(1), Otsuka or its designee shall manufacture for and supply to BMS, its Affiliates and Sublicensees, and BMS, its Affiliates and Sublicensees shall purchase exclusively from Otsuka, any and all of their requirements of Compound. Such requirements include commercial requirements for all Product to be sold in the United States (which shall be for the account of Otsuka or its Affiliate) and the Rest of Territory and development and other noncommercial requirements, if any, in excess of those provided by Otsuka pursuant to Section 4.4. The parties’ respective obligations regarding the supply and purchase of Compound shall be set forth in the “Otsuka-BMS Compound Supply Agreement,” described in Section 5.11.5 below.
For the sake of clarification, with respect to all commercial requirements in the United States and the Rest of Territory, BMS, its Affiliates and Sublicensees shall be responsible for formulating (in Bulk Tablet formulation and all other formulations) through packaging, at their expense, Product, and Otsuka shall have no obligation to manufacture the Compound into any form of Product. The parties’ respective obligations with respect to BMS’s supply (through BMS and BMSLC, its subsidiary) and Otsuka’s purchase (through OAPI, its U.S. Affiliate) of Product shall be set forth in the BMS-OAPI Product Supply Agreement, described in Section 5.11.6 below. The Purchase Price for Product sold in the United States shall be as set forth in Section 5.11.2(a)(3).
(c) With respect to all Product sold and distributed in the United States and the European Union, BMS shall reimburse Otsuka for its out-of-pocket
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shipping (including customs duties, if any) and insurance expenses incurred in connection with the shipping of Compound, Bulk Tablets and Product from Japan to the places of formulation, packaging or warehousing and then to the points of distribution throughout the United States and the European Union. BMS shall also bear directly, or reimburse Otsuka for, all out-of-pocket shipping and insurance costs incurred in connection with the shipping of Compound to be formulated into Product for the Rest of the Territory.
(d) Unless the parties mutually agree otherwise in writing, Otsuka shall maintain a rolling inventory of Compound equal to at least three (3) times BMS’s firm order for the then most current quarter.
(e) Where BMS is toll manufacturer of Product for Otsuka in the European Union, as provided in Subparagraph (a) above, and where BMS is Product supplier to Otsuka for Product sold in the United States, as provided in clause (b) above, Otsuka shall (as provided in Section 5.11.2(c)(1)(A)(ii)) bear the cost of Compound consumed as wastage in the ordinary course of the Product manufacturing process, but only up to [*], and BMS shall bear the cost of any additional wastage (which it shall bear by purchasing Compound from Otsuka in the amount of such additional wastage, at the purchase price to be the Non-Commercial Compound Price for Compound as provided in Section 5.11.2(a)(5)).
(f) With respect to Product in any formulation, other than the Bulk Tablet formulation, that Otsuka desires to sell outside the Territory during the term of this Agreement, or anywhere following the expiration or termination of this Agreement, and if (and only if) BMS is then manufacturing such other formulation in commercial quantities, BMS agrees, as a contract manufacturer for Otsuka (with respect to both formulating and packaging), for a reasonable contract manufacturing charge to be agreed upon by the parties, to convert Compound provided by Otsuka into such Product. Such obligation shall expire one (1) year following the expiration or termination of this Agreement). The contract manufacturing agreement between Otsuka and BMS shall be substantially the same as the agreement described in Section 5.11.1(a)(1) above, except that the parties shall agree upon a commercially reasonable contract manufacturing fee that Otsuka shall pay to BMS for its services, and the reference to the manufacturing agreement described in Section 5.11.1(a)(1) (where BMS bears the cost of certain wastage) shall not imply that BMS shall bear any cost of wastage in such other agreement.
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5.11.2 Purchase Price for Compound and Product .
(a) Purchase Price . This section sets forth the purchase price (the “Purchase Price”) to be paid, as the case may be, by BMS, its Affiliates and Sublicensees, on the one hand, or Otsuka and its Affiliates, on the other, for Compound, Compound Form, Related Compound and Product.
(1) The Purchase Price to be paid by BMS, its Affiliates and Sublicensees to Otsuka for (a) Compound sold by Otsuka to BMS or BMSLC (under the Otsuka-BMS Compound Supply Agreement) for formulation into Product sold in the United States and the Rest of Territory shall equal [*] of the Net Sales of Product in the United States and the Rest of Territory.
(2) The Purchase Price to be paid by BMS or its Affiliates to Otsuka or its Affiliates for Product resold by BMS’s Affiliates as Distributors in the European Union (pursuant to Section 5.3.12) shall equal [*] of the Net Sales of Product.
(3) The Purchase Price to be paid by Otsuka’s U.S. Affiliate to BMS and BMSLC for finished and packaged Product sold by BMS and BMSLC to OAPI for sale in the United States (under the BMS-OAPI Product Supply Agreement) shall equal [*] of Net Sales of Product in the United States.
(4) If Otsuka elects to be the supplier of Compound Form or Related Compound, the Purchase Price to be paid by BMS, its Affiliates and Sublicenses to Otsuka therefor shall be as mutually agreed by the parties at the time.
(5) The Purchase Price to be paid by BMS for Compound not sold as Product, including the price to be paid for Compound used for development, clinical trials, post-marketing trials, consumed as wastage or otherwise, shall equal the Non-Commercial Compound Price, to be agreed upon by the parties, subject, however, to the parties’ agreement as to the price of Compound for promotional samples as provided in Section 5.8.1.
In each of the above cases except subparagraph (3) above, the Purchase Price shall always be FOB place of manufacture of Compound, Bulk Tablets or Product, as the case may be, with BMS and its Affiliates and Sublicensees to bear all costs from that point. With respect to subparagraph (3) above, the Purchase Price of Product sold by BMS and BMSLC to OAPI shall, for the benefit of Otsuka/OAPI, be FOB place of destination, so that BMS, not OAPI, bears all Product-related
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costs of shipping, insurance, etc., to and from points of distribution. Payment of the Purchase Price shall be implemented as described in subsections (b) and (c) below:
(b) Tentative Price .
BMS and Otsuka shall confer prior to the beginning of each calendar year to establish a tentative price in U.S. Dollars (per kilogram in the case of Compound, or per unit of Product, by formulation, in the case of Product (the parties shall mutually determine the appropriate “unit”) (collectively, the “Tentative Prices”) at which (1) Otsuka or its designee shall invoice BMS (under the Otsuka-BMS Compound Supply Agreement) upon shipment of Compound to BMS, its Affiliates and Sublicensees (or, if Otsuka elects to be the supplier thereof, Compound Form or Related Compound) during such calendar year; (2) Otsuka or its Affiliates shall invoice BMS upon shipment of Product to BMS’s Affiliates as Distributor in the European Union; and (3) BMS and BMSLC shall invoice Otsuka’s U.S. Affiliate (under the BMS-Otsuka Product Supply Agreement) for Product sold in the United States. In each case, the parties shall attempt in good faith to establish the Tentative Price for Compound and the Tentative Price for Product as close to the anticipated Purchase Price of Compound (or, if Otsuka elects to be the supplier thereof, Compound Form or Related Compound) or Product, as the case may be, as the parties can reasonably estimate for the upcoming calendar year. The Tentative Prices shall be expressed in U.S. Dollars and shall apply to all shipments made during the calendar year to which they pertain.
(c) Quarterly Reconciliation .
On a calendar quarterly basis within sixty (60) days of the end of each quarter (or on an annual basis should Otsuka request annual rather than quarterly reconciliations), the parties shall reconcile in writing the Purchase Price due Otsuka, Otsuka’s Affiliates or its designee, and the Purchase Price due BMS or its Affiliates, as the case may be, in respect of (1) with respect to the United States and the Rest of Territory, Compound (or, if Otsuka elects to be the supplier thereof, Compound Form or Related Compound) sold during such quarter as Product against the Tentative Price paid by BMS, its Affiliates and Sublicensees to Otsuka for such Compound (or, if Otsuka elects to be the supplier thereof, Compound Form or Related Compound); (2) if applicable, with respect to the country or countries in the European Union where BMS’s Affiliates act as Distributor, Product sold during such quarter against the Tentative Price paid by BMS’s Affiliates to Otsuka for such Product; and (3) with respect to Product sold by BMS or BMSLC to OAPI, Product sold in the United States during such quarter against the Tentative Price paid by OAPI to BMS or BMSLC for such Product. The amount due from either party to the other following such reconciliation shall be promptly paid on a quarterly basis. Accordingly:
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(1) BMS shall, within sixty (60) days of the end of each calendar quarter (or on an annual basis should Otsuka request only an annual reconciliation), commencing the calendar quarter during which the First Commercial Sale of Product occurs, submit to Otsuka a written statement showing the calculation of the Quarterly Adjustment (as defined below). With respect to any calendar quarter, “Quarterly Adjustment”, being an amount in U.S. Dollars, payable by BMS to Otsuka or by Otsuka to BMS (as the case may be) to account for the difference between (i) the amounts (a) invoiced by Otsuka and its Affiliates (at the Tentative Price) for the quantities of Compound (or, if Otsuka elects to be the supplier thereof Compound Form or Related Compound) having been sold as Product during such calendar quarter, (b) invoiced by Otsuka and its Affiliates (at the Tentative Price) for the quantities of Product sold as Product during such calendar quarter, and (c) invoiced by BMS and its Affiliates (at the Tentative Price) for the quantities of Product sold as Product during such calendar quarter, and (ii) the Purchase Price, as provided in Subsection (a) of this Section 5.11.2, of such quantities of Compound (or, if Otsuka elects to be the supplier thereof, Compound Form or Related Compound) and Product, shall mean:
(A) With Respect to Compound sold by Otsuka to BMS or BMSLC for the United States and the Rest of Territory :
[*], where:
G = total Net Sales in the United States and the Rest of Territory during such calendar quarter
H = the Attributable Bulk (as defined below) with respect to the quantities of Product sold in the United States and the Rest of Territory during such calendar quarter
I = the Tentative Price paid by BMS in respect of such Attributable Bulk
With respect to any quantity of Product, “Attributable Bulk,” being the amount of Compound (or, if Otsuka elects to be the supplier thereof Compound Form or Related Compound) required to give rise to such quantity of Product, shall be determined by tracing BMS’s consumption of each batch of Compound (or, if Otsuka elects to be the supplier thereof Compound Form or Related Compound) as supplied by Otsuka and on the basis that each [*] kilogram of Compound (or, if Otsuka elects to be the supplier thereof, Compound Form or Related Compound) is convertible into a quantity of Product containing in the aggregate [*] kilograms of active
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Compound (or, if Otsuka elects to be the supplier thereof Compound Form or Related Compound) ingredient, where [*] shall be an amount to account fairly for the amount of Compound (or, if Otsuka elects to be the supplier thereof, Compound Form or Related Compound) lost in the ordinary course during the Product manufacturing process. Therefore, the Attributable Bulk for Product containing in the aggregate [*] kilogram of Compound (or, if Otsuka elects to be the supplier thereof Compound Form or Related Compound) shall be [*] kilograms; provided, however, that, regardless of the actual wastage and other losses in the ordinary course of Product manufacturing process (formulation through packaging):
(i) in the case of Product in the Bulk Tablet formulation for the sale in the Rest of Territory, [*] shall in no event be greater than [*] (it being agreed that BMS shall [*] arising in the ordinary course of the Product manufacturing process in such case in excess of [*]); and
(ii) in the case of all other Product in all formulations in the Territory, excluding only Product in the Bulk Tablet formulation for sale in the Rest of Territory, [*] shall in no event be greater than [*] (it being agreed that BMS shall [*] arising in the ordinary course of the Product manufacturing process in excess of [*] incurred with respect to such Product throughout the Territory).
For the sake of clarification, BMS shall also [*] arising other than in the ordinary course of Product manufacturing process.
(B) With Respect to EU Countries where BMS Affiliates are Distributors :
[*], where:
L = total Net Sales of Product in the country or countries in question during such calendar quarter
M = the total number of units of Product sold in such country or countries during such calendar quarter giving rise to such Net Sales
N = the Tentative Price per unit of Product paid by BMS in respect of such Product
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(C) With Respect to Product Sold by BMS or BMSLC to Otsuka’s U.S. Affiliate :
[*], where:
P = total Net Sales of Product in the United States during such calendar quarter
Q = the total number of units of Product sold in the United States during such calendar quarter giving rise to such Net Sales.
R = the Tentative Price per unit of Product paid by Otsuka’s U.S. Affiliate to BMS or BMSLC in respect of such Product sold in the United States.
(2) The Quarterly Adjustments pursuant to Subsection (c)(1) above shall be established in U.S. Dollars or other currencies agreed upon by the parties. For this purpose, Net Sales for a calendar quarter realized in currencies other than the U.S. Dollar shall be first converted into U.S. Dollars (or such other currencies as the parties agree upon) on the basis of BMS’s customary internal corporate monthly exchange rates for the last month of the calendar quarter in question as provided in Section 5.9.7.
(3) If the aggregate Quarterly Adjustment for any calendar quarter determined as provided in Subsection (c)(1) above shows BMS or its Affiliates owing any amount(s) to Otsuka or its Affiliates, BMS or its Affiliates shall pay Otsuka such amount(s) in U.S. Dollars concurrently with the submission of the related statement referred to therein.
(4) If the aggregate Quarterly Adjustment for any calendar quarter determined as provided in Subsection (c)( 1) above shows Otsuka or its Affiliates owing any amount(s) to BMS or its Affiliates, Otsuka or its Affiliates shall pay BMS such amount(s) in U.S. Dollars within one (1) month of the date of the related statement referred to therein.
5.11.3 Global Floor Price-Based Adjustment .
The parties agree that for each calendar quarter there shall be a Global Floor Price Based Adjustment as follows:
(a) There shall be an imputed per kilogram purchase price for all Compound sold as Product in the entire Territory, which shall equal [*], where:
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A = total Net Sales in the entire Territory during such calendar quarter, expressed in U.S. Dollars
B = total amount in kilograms of Compound contained in Product sold during such calendar quarter giving rise to such Net Sales
(b) Such imputed per kilogram purchase price shall be no less than [*] per kilogram.
(c) Accordingly, in each statement submitted by BMS pursuant to Section 5.11.2(c)(1), BMS shall also show the calculation of the “Global Floor Price-Based Adjustment” equal to:
[*], where A and B are as defined in Subsection 5.11.3(a) above.
(d) If the Global Floor Price-Based Adjustment for any calendar quarter determined as provided in Subsection (c) above is a positive amount, BMS shall pay Otsuka such amount in U.S. Dollars concurrently with the submission of the related statement referred to therein. If otherwise, no payment shall be due from either party to the other party in respect thereof.
5.11.4 Packaging .
BMS shall procure, and shall bear, at its sole expense, the costs of the packaging of Product in all formulations sold in the United States and the Rest of Territory, and the packaging of Product in all formulations other than Bulk Tablets sold throughout the European Union; provide that, if Otsuka elects (for itself or a designee other than BMS or a BMS Affiliate) to manufacture Bulk Tablets sold in the United States, Otsuka shall bear the cost of packaging such Bulk Tablets so long as Otsuka is then Co-Promoting Product in the United States. Otsuka shall procure the packaging of Product in Bulk Tablet formulation sold in the European Union (if Otsuka elects to contract with a BMS Affiliate for such European packaging services, the terms and conditions of such contract, including an appropriate allocation of responsibility for wastage, shall be separately negotiated on commercially reasonable terms); however, the costs of packaging Product in Bulk Tablet formulation for the European Union (including all shipping, customs and insurance expenses) shall be borne by the parties as follows:
(a) With respect to each Co-Promotion Country in the European Union, Otsuka shall bear all costs of packaging Product in Bulk Tablet formulation in final, packaged form sold in such country; provided , however , that, (i) with respect to all promotional samples of Product in Bulk Tablet formulation distributed in Co-Promotion Countries at any time, and, in addition, (ii) with respect to Product in Bulk Tablet formulation in any Co-Promotion Country, during such period (and
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for so long as) Otsuka is not in fact participating in the Co-Promotion of Product therein, BMS shall reimburse Otsuka for Otsuka’s packaging expenses and reasonable internal, fully-burdened costs incurred in connection therewith; and
(b) With respect to Product sold and promotional samples distributed in each other country, BMS shall reimburse Otsuka for Otsuka’s packaging expenses and reasonable internal, fully-burdened costs incurred in connection therewith.
5.11.5 Compound Supply Agreement for the United States and the Rest of Territory .
Otsuka shall procure the commercial requirements of Product for the European Union, including, if applicable, those for resale by BMS’s Affiliates as Distributor, in accordance with decisions of the JCC on inventory, forecasting, ordering and supply, subject, in the case of Product in any formulation other than the Bulk Tablet formulation, to BMS’s obligation, as a contract manufacturer for Otsuka, to manufacture such formulation of Product as provided in Section 5.11.1(a). In addition, as provided in Subsection 5.11.1(b), Otsuka shall supply to BMS, and BMS shall purchase exclusively from Otsuka, BMS’s requirements of Compound (and, if Otsuka elects to be the supplier thereof, Compound Form and Related Compound) for development (including for Product trials), other non-commercial purposes and for formulation (in all formulations, including Bulk Tablets) by BMS into finished and packaged Product for sale and promotional sampling (subject to Section 5.8.1) in the United States and the Rest of Territory. The provisions of this Section 5.11.5, therefore, apply only to BMS’s requirements of Compound (and, if Otsuka elects to be the supplier thereof Compound Form and Related Compound) for development and non-commercial purposes and for formulation by BMS into Product for sale and promotional sampling in the United States and the Rest of Territory.
The parties agree that, as soon as practicable after the Restated Agreement Date, they or their Affiliates shall enter into one or more supply agreements setting forth the parties’ respective obligations regarding Otsuka’s supply of Compound to BMS for Product development, other non-commercial purposes and for formulation by BMS into Product in all formulations for sale and promotional sampling in the United States and the Rest of Territory. Such agreements, which shall be part of the Related Agreements, are referred to here collectively as the “Otsuka-BMS Compound Supply Agreement.” The Otsuka-BMS Compound Supply Agreement shall contain reasonable, customary terms and conditions consistent with the applicable terms and conditions of this Agreement, including the payment terms to be agreed upon by the parties in accordance with Section 5.9.3. BMS shall guarantee the obligations of BMSLC and other BMS subsidiaries in such agreement(s). Such terms and conditions shall include, without limitation, reasonable provisions regarding Otsuka’s obligation as drug manufacturer and the inspection of its facility and reasonable batch-size order limitations specific to Compound
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to be supplied for various formulations of Product. In the event that Compound Form or Related Compound is commercialized in the United States and the Rest of Territory pursuant to this Agreement, and Otsuka elects to be the supplier thereof such supply agreement shall, mutatis mutandis , govern the supply of such Compound Form or Related Compound, as the case may be.
5.11.6 Product Supply Agreement For the United States .
BMS shall supply to OAPI, and OAPI shall purchase from BMS, the commercial requirements of packaged Product (in all formulations, including Bulk Tablet) for sale in the United States. Such commercial requirements of Product shall be in accordance with the decisions of the JCC on inventory, forecasting, ordering and supply.
The parties agree that, as soon as practicable after the Restated Agreement Date, they or their Affiliates shall enter into one or more supply agreements setting forth the parties’ respective obligations regarding BMS’s supply and Otsuka’s purchase (through OAPI) of Product for sale in the United States. Such agreements, which shall be part of the Related Agreements, are referred to here collectively as the “BMS-OAPI Product Supply Agreement.” The BMS-OAPI Product Supply Agreement shall contain reasonable, customary terms and conditions consistent with the applicable terms and conditions of this Agreement. BMS shall guarantee the obligations of BMSLC and other BMS subsidiaries in such agreement, and Otsuka shall guarantee the obligations of OAPI in such agreements. Such terms and conditions shall include, without limitation, reasonable provisions regarding BMS’s and its Affiliates’ obligations as drug manufacturer, quality control and the inspection of their facilities. The BMS-OAPI Product Supply Agreement shall allow OAPI to terminate such agreement, in whole or on a formulation-by-formulation basis, without cause with not less than twenty-four (24) months’ written notice, such termination to take effect at any time after the first five (5) years (sixty (60) full months) following the First Commercial Sale in the United States; such right of termination shall be in addition to the right of OAPI to terminate such agreement sooner, with ninety (90) days’ written notice, in the event of the termination, due to unremedied material breach or otherwise, of such agreement or this Agreement.
5.11.7 Third-Party Intellectual Property That May Be Necessary for the Manufacture, Use or Sale of Product . BMS and Otsuka shall share, [*] to be paid by BMS and [*] to be paid by Otsuka, the costs of any patent or other intellectual property license or rights from a third party (not an Affiliate of either party) required for the manufacture, use or sale of Product in the United States and the European Union. All upfront and milestone payments to any such third-party shall be deemed paid to permit the manufacture, use and sale of Product in the United States and the European Union and shall be split between BMS and Otsuka as provided above. Should such license also be necessary to permit the manufacture, use or sale of Product in the Rest of Territory or the Reserved Territory, the parties shall cooperate to obtain such territories within the
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scope of such license, and Otsuka shall pay any and all royalties due such third party on sales in the Reserved Territory, and BMS and Otsuka shall share, [*] to be paid by BMS and [*] to be paid by Otsuka, any and all royalties due such third party on sales in the Rest of Territory.
5.12. Trademark .
5.12.1 Selection, Ownership and License of Trademark(s) .
The JCC shall select the Trademark(s) used to market Product throughout the Territory, with a view to establishing one single brand name for Product in the entire Territory. All such Trademark(s) shall be owned by Otsuka. Such Trademark(s) in the Rest of Territory shall be licensed exclusively to BMS (for so long as the license under Section 5.4 remains in effect), without any additional compensation, solely for purposes of marketing and selling Product.
5.12.2 Certain Notations .
Product in the Rest of Territory will display an expression such as “Product under license from Otsuka Pharmaceutical Co., Ltd.,” which shall be prominently displayed on the label, and such other legally permissible expressions as the PDC and JCC deem appropriate. Narrative references to Product in all other written materials pertaining to the Rest of Territory (by way of example: promotional and scientific materials, BMS’s company reports, and brochures featuring Product) shall contain expressions to the same effect, in each case to the extent permitted by law. References to Product in the United States and the European Union shall be as deemed appropriate by the PDC and JCC in accordance with this Agreement. All necessary trademark notations, such as ®, shall be used as appropriate.
5.12.3 Reserved Territory .
In the Reserved Territory, Otsuka and its Affiliates (and non-Affiliates in Japan) may use any trademark(s) they choose, including (in their discretion) the Trademark(s) selected by the JCC for use with Product in the Territory.
5.12.4 Maintenance .
Otsuka shall, at its own expense, register, maintain and reasonably enforce the Trademark(s) in the United States and the European Union, and BMS, as licensee of Otsuka’s Trademark(s), shall do the same in the Rest of Territory, at its own expense; provided, however , that BMS, so long as BMS’s Commercialization rights under this Agreement remain in effect in the country in question, shall also have the right to enforce the Trademark(s), after notification to Otsuka and at BMS’s risk and expense (including, without limitation, in actions brought under the Lanham Act in the U.S. and in actions
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based on comparative advertising, commercial libel or similar claims in other countries of the Territory). In any such case, BMS shall solicit the participation and views of Otsuka during each stage of the action and keep Otsuka fully informed with an opportunity to participate in the decisionmaking process. BMS may not settle or compromise such case without the prior written consent of Otsuka. In any such case, Otsuka shall be entitled, at its own expense, to join as a party in pursuing enforcement if legally permissible. Should Otsuka’s direct participation in the legal proceedings be indispensable, BMS shall be entitled to request Otsuka, at BMS’s expense, to pursue remedies (which request Otsuka shall not unreasonably refuse). On an ongoing basis, upon Otsuka’s reasonable request, BMS shall provide Otsuka with copies of all relevant papers, pleadings, correspondence and other documentation in BMS’s possession or control relating to the registration, maintenance or enforcement of Trademark(s).
6. BARTER PRODUCTS
6.1. Generally .
During the term of this Agreement, BMS shall offer to Otsuka an exclusive or semi-exclusive license, as BMS may elect, for development and marketing of a barter product that is [*] in the United States and that BMS believes to be [*]. After completion of [*] for a potential barter product, if BMS decides to offer it as the potential barter product, BMS shall provide to Otsuka: [*]; such other information about the product as Otsuka may reasonably request to evaluate [*] aspects of the potential barter product; and an offer stating the material terms of the license under which BMS would make the potential barter product available to Otsuka for exclusive or semi-exclusive development and marketing. Such offer shall propose commercially reasonable license terms for exclusive or semi-exclusive development and marketing by Otsuka, as BMS may elect, shall specify the territory to be covered by the license (which shall be at least the nation of Japan), and it shall confirm that Otsuka may use its Affiliates to conduct licensed activities and may sublicense thereunder to Affiliates and non-Affiliates. Not later than ninety (90) days after Otsuka’s receipt of all such information, Otsuka shall notify BMS whether it wishes to negotiate a license with BMS pertaining to the proposed barter product. (Otsuka may declare its interest in the potential barter product but reject the offered license terms and propose different license terms for the potential barter product if it wishes to do so.) If Otsuka fails to notify BMS of its decision by such ninetieth (90th) day, Otsuka shall be deemed to have rejected that potential barter product. If Otsuka declares its interest in the potential barter product and its decision to proceed with negotiations, the parties shall
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thereafter negotiate in good faith a definitive license containing commercially reasonable terms and conditions, the period of such negotiation to be as is customary and reasonable, but not less than one hundred twenty (120) days. If a mutually satisfactory definitive license is not executed and delivered within a reasonable period after Otsuka notifies BMS of its decision to proceed with negotiations regarding the potential barter product, Otsuka shall be deemed to have rejected that potential barter product.
6.2. Initial Offer .
The first potential barter product that BMS shall offer to Otsuka shall be [*]. BMS will provide all information required to be provided to Otsuka under Section 6.1 not later than sixty (60) days after completion of [*]. If Otsuka does not declare its interest in [*] as the barter product or the parties do not reach agreement on license terms for that product, BMS will offer Otsuka [*] other potential barter products (which shall not include either [*] or [*]) during the [*] period commencing on the Effective Date.
6.3. Termination .
BMS’s obligation to offer potential barter products shall end upon the earlier to occur of (i) BMS’s offer of [*] potential barter products, in addition to [*], and license terms meeting the requirements of Section 6.1 within the [*] offering period commencing on the Effective Date (such [*] period being subject to extension if BMS fails to offer all [*] potential barter products within such period), and its compliance with its other obligations under this Section 6 with respect to such potential barter products, and (ii) execution and delivery of a definitive license between the parties for exclusive or semi-exclusive development and marketing of a barter product by Otsuka in at least Japan; provided that, in the event this Agreement terminates or expires prior to BMS fulfilling its obligation under this Section 6 to offer all [*] potential barter products, BMS shall be required, following such termination or expiration, to offer [*] potential barter product to Otsuka and comply with its other obligations under this Section 6 as to such potential barter product, at the completion of which BMS shall have no further obligations under this Section 6.
7. COMPETITIVE PRODUCTS
7.1. Generally .
During the term of this Agreement, neither BMS nor its Affiliates nor Sublicensees shall Commercialize a generic product containing [*] anywhere in the Territory. Any such Commercialization shall constitute a material breach of this Agreement.
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Independent of the foregoing obligation, in the event BMS, an Affiliate or a Sublicensee (other than a Non-Affiliate Sublicensee (as defined below)) files an NDA or MAA for any Competitive Product in any country(ies) of the Territory, BMS shall promptly notify Otsuka in writing. BMS shall also promptly notify Otsuka in writing upon the approval of a filed NDA or MAA received by BMS or its Affiliate or Sublicensee (other than a Non-Affiliate Sublicensee) for any Competitive Product in any country(ies) of the Territory. When BMS notifies Otsuka of the fling of an NDA or MAA for any Competitive Product or of the subsequent approval of the NDA or MAA, BMS shall also provide to Otsuka such data and information regarding the Competitive Product as Otsuka may reasonably request to enable Otsuka to make an informed decision whether to exercise the termination rights herein granted. If the Applicable Termination Conditions (as defined below) exist, Otsuka shall have the right, in its discretion, at any time during the period commencing upon its receipt of the notice of approval of an NDA or MAA for a Competitive Product and ending one hundred eighty (180) days following the First Commercial Sale of the Competitive Product in the country(ies) in question, to issue a written notice to BMS that, when effective, will (a) with respect to any such country(ies) in the Rest of Territory, delete such country(ies) from the Territory, thereby terminating BMS’s (and its Affiliates’ and Sublicensees’) rights to make, have made, use and sell Product in such country(ies) and making the provisions of Section 13 applicable to such country(ies); and (b) with respect to the United States, the European Union or any country(ies) in the European Union, as the case may be, delete such country(ies) or the entire European Union (as Otsuka may elect) from the Territory, thereby terminating BMS’s and its Affiliates’ rights to Commercialize Product in the United States, the affected countries in the European Union or throughout the European Union, as the case may be, and making the provision of Section 13 applicable to the United States, the designated countries in the European Union or throughout the European Union. Such written notice from Otsuka to BMS shall be effective thirty (30) days after receipt and, when effective, shall amend this Agreement accordingly, without the need for a further document executed by both parties.
7.2. Definitions .
(a) As used herein, “Competitive Product” means any product, other than Product that is the subject of this Agreement, (i) which [*] approved by the applicable regulatory authority that [*] and (ii) with respect to which product [*]; provided, however , that where the indication in question is the treatment of [*] or, subject to the qualification set forth below, [*] (each [*]), clause (i) shall alone be sufficient to establish that the product constitutes a Competitive Product. For purposes of defining “[*],” an [*]
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[*] that does not encompass [*] shall not be deemed to be a [*].
(b) As used herein, “Applicable Termination Conditions” means: (i) in the case of any Competitive Product, Otsuka has reasonably determined that marketing of the Competitive Product in question would be detrimental to the marketing and/or sales of Product in the country(ies) in question; and (ii) additionally, but in the case of any Competitive Product that carries an approved indication which is also a Target Indication, (A) the NDA or MAA for the Competitive Product in question was approved in the country(ies) in question prior to or within [*] years after the First Commercial Sale of Product in such country(ies), or (B) the total sales of such Competitive Product in such country(ies) in any [*] exceeds [*] of the Net Sales of Product in such country(ies) during such [*].
(c) As used herein, a “Non-Affiliate Sublicensee” is a Sublicensee that is not an Affiliate of BMS and that only co-promotes Product with BMS or an Affiliate in one or more countries in the Rest of Territory under a single regulatory approval, registration and trademark pursuant to a co-promotion agreement between BMS (or its Affiliate) and the Non-Affiliate Sublicensee that in no way restricts the right or incentive of BMS or its Affiliate to vigorously and diligently promote Product to all segments of the market for Product in such country(ies). (If BMS or its Affiliate enters into such a co-promotion agreement during the term of this Agreement, it shall promptly notify Otsuka and provide a copy of such agreement to Otsuka for possible future reference.)
7.3. European Union Provisions .
If Otsuka elects to terminate BMS’s Commercialization rights in any country in the European Union, Otsuka shall also have the right, concurrently therewith, to terminate BMS’s (and its Affiliates’) Commercialization rights in all countries in the European Union. Similarly, within thirty (30) days following its receipt of written notice of Otsuka’s election to terminate BMS’s Commercialization rights in a country in the European Union, BMS may, on thirty (30) days’ written notice to Otsuka, terminate its Commercialization rights and obligations with respect to all of the countries in the European Union. As used in this Section 7.3, the term “European Union” excludes Norway, Switzerland and Iceland for so long as the country in question is not a member of the European Union.
7.4. Representation .
BMS hereby represents and warrants to Otsuka that, as of the Restated Agreement Date, neither it nor any of its Affiliates [*].
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7.5. Development of Competitive Products is Permissible .
Recognizing the extensive time and investment necessary to develop a pharmaceutical product to the point of commercial launch, and recognizing the value of ongoing research and development to worldwide health, Otsuka agrees that nothing in this Section 7, nor in this Agreement as a whole, prohibits BMS from engaging in research and development aimed at the development of Competitive Products.
8. MAINTENANCE OF PATENT; PATENT INFRINGEMENT
8.1. Maintenance of Patent Rights .
Otsuka shall, at its own cost and expense, take reasonable steps as it deems appropriate to prosecute and maintain the Patent Rights in the Territory. Otsuka shall promptly notify BMS in writing of the fling or issuance of any of the Patent Rights. Upon the reasonable written request of BMS, Otsuka shall provide to BMS copies of all actions, amendments and correspondence relating to such Patent Rights, and Otsuka shall otherwise keep BMS reasonably informed of the status of the Patent Rights. In its discretion Otsuka may, and upon the reasonable written request of BMS Otsuka shall, execute and file appropriate applications and related documents to extend the term of the Patent Rights at its own cost and expense. If Otsuka reasonably concludes that it is impracticable or commercially unreasonable to prosecute, obtain, maintain or extend a given Patent Right, it shall notify BMS in writing of such decision, whereupon BMS shall have the right, but not the obligation, to take such action at its own expense. In such case, BMS shall provide to Otsuka copies of all actions, amendments and correspondence relating to such Patent Right, and BMS shall otherwise keep Otsuka reasonably informed of the status of such Patent Right. Otsuka and BMS shall cooperate with each other in connection with prosecuting, obtaining, maintaining and extending the Patent Rights.
8.2. Patent Infringement by Third Party .
8.2.1 Notice of Infringement .
If, during the term of this Agreement, either party becomes aware of any infringement, threatened infringement or suspected infringement by any third party of any Patent Right in the Field in the Territory, such party shall promptly give written notice to the other party thereof, with all available details in its possession. The party involved in any such action or controlling any action under Section 8.2.2 or 8.2.3 shall keep the other party reasonably informed of the status of the action including, but not limited to, the significant developments during the pendency of such action. The controlling party shall endeavor to solicit the participation and views of the other party during each stage of the action and shall reasonably consider such other party’s views, although the controlling party’s judgment shall control except as provided to the contrary in Section 8.2.2.
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8.2.2 BMS’s Right to Pursue Remedies Against Infringement .
With respect to any infringement, threatened infringement or suspected infringement of any Patent Right in the Field in the Territory, BMS shall have the first right, but not the obligation, to take action in its name, or in Otsuka’s name where legally required, and at BMS’s expense, to pursue any and all remedies against such infringer to recover profits and damages. In any such case, Otsuka shall be entitled, at its own expense, to join as a party in pursuing such remedies, if legally permissible. Should Otsuka’s direct participation in the legal proceedings be indispensable (i.e., it is not legally permissible for BMS to pursue remedies in Otsuka’s name), BMS shall be entitled to request Otsuka, at BMS’s expense, to pursue remedies (which request Otsuka shall not unreasonably refuse). BMS shall promptly reimburse Otsuka for its out-of-pocket expenses incurred in so participating, although the expenses borne by BMS shall not include Otsuka’s internal costs.
Otsuka shall cooperate with BMS in all respects in such action and shall cause any of Otsuka’s and its Affiliate’s employees and agents to give depositions or testify when requested by BMS and make available to BMS copies of any and all relevant records, papers, documents, information and specimens, if necessary under an appropriate protective order. BMS shall promptly reimburse Otsuka for its out-of-pocket expenses incurred in providing such cooperation to BMS at BMS’s request.
In all cases, except where Otsuka elects, at its expense, to join as a party, BMS shall have the sole and exclusive right to control prosecution of such action, but with Otsuka being fully informed and participating in the decision making process. BMS may not settle or compromise the action or dispute without the prior written consent of Otsuka. In the event any monetary recovery in connection with such infringement action is obtained, such recovery shall be applied in the following priority: first, to reimburse BMS for its total expenses incurred in prosecuting such action, including fling fees, reasonable attorneys’ fees, reasonable local counsel fees, expert and other witness fees and all other reasonable costs; second, to reimburse Otsuka for its total expenses incurred in connection with such action, including fling fees, reasonable attorney’s fees, reasonable local counsel fees, expert and other witness fees and all other reasonable costs not previously reimbursed by BMS to Otsuka; and third, the balance to be shared [*] to BMS and [*] to Otsuka.
In the event any adverse judgment for monetary liability is imposed on either BMS or Otsuka or both in any such infringement action in favor of a third-party litigant, the burden of all such judgments shall be borne by the parties in the ratio of [*] to [*] (with BMS bearing [*] of such burden), regardless of the name of the party against whom such a monetary liability is imposed.
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8.2.3 Otsuka’s Right to Pursue Remedies Against Infringement .
With respect to any infringement, threatened infringement or suspected infringement of any Patent Right in the Field in the Territory, if BMS decides not to pursue remedies, and in any event if BMS fails to commence appropriate action within one hundred twenty (120) days after Otsuka’ s written request to BMS to do so, Otsuka shall have the right, but not the obligation, to take action in its name, or in BMS’s name where legally required, and at Otsuka’s expense, to pursue any and all remedies against such infringer to recover profits and damages. In any such case, BMS shall be entitled, at its own expense, to join as a party in pursuing such remedies, if legally permissible. Should BMS’s direct participation in the legal proceedings be indispensable (i.e., it is not legally permissible for Otsuka to pursue remedies in BMS’s name), Otsuka shall be entitled to request BMS, at Otsuka’s expense, to pursue remedies (which request BMS shall not unreasonably refuse). Otsuka shall promptly reimburse BMS for its out-of-pocket expenses incurred in so participating, although the expenses borne by Otsuka shall not include BMS’s internal costs.
BMS shall cooperate with Otsuka in all respects in such action and shall cause any of BMS’s and its Affiliate’s and Sublicensee’s employees and agents to give depositions or testify when requested by Otsuka and make available to Otsuka copies of any and all relevant records, papers, documents, information and specimens, if necessary under an appropriate protective order. Otsuka shall promptly reimburse BMS for its out-of-pocket expenses incurred in providing such cooperation to Otsuka at Otsuka’s request.
In all cases, except where BMS elects, at its expense, to join as a party, Otsuka shall have the sole and exclusive right to control prosecution of such action, and the right to settle and compromise such action or dispute, but with BMS being fully informed and participating in the decisionmaking process. In the event any monetary recovery in connection with such infringement action is obtained, such recovery shall be applied in the following priority: first, to reimburse Otsuka for its total expenses incurred in prosecuting such action, including fling fees, reasonable attorneys’ fees, reasonable local counsel fees, expert and other witness fees and all other reasonable costs; second, to reimburse BMS for its total expenses incurred in connection with such action, including filing fees, reasonable attorney’s fees, reasonable local counsel fees, expert and other witness fees and all other reasonable costs not previously reimbursed by Otsuka to BMS; and third, the balance to be shared [*] to Otsuka and [*] to BMS.
In the event any adverse judgment for monetary liability is imposed on either BMS or Otsuka or both in any such infringement action in favor of a third-party litigant, the burden of all such judgments shall be bore by the parties in the ratio of [*] to [*] (with Otsuka bearing [*] of such burden), regardless of the name of the party against whom such a monetary liability is imposed.
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8.3. Infringement Action by Third Parties .
8.3.1 United States and European Union .
In the event of the institution of any suit by a third party against Otsuka, BMS or both for patent infringement involving the manufacture, sale, distribution or marketing of Product in the United States or the European Union, each party shall promptly notify the other party in writing of such suit. In all cases, the parties shall jointly defend such action as represented by common counsel, jointly selected by them. Each party agrees to assist and cooperate with the other party, at its own expense, to the extent necessary in the defense of such suit. Each party may retain, at its own expense, separate counsel to assist it in such defense. All other costs and expenses of such defense (including fees of attorneys and other professionals), the resulting award for damages, or any amount due pursuant to any settlement entered into with such third party (which may not be entered into without both parties’ consent, not to be unreasonably withheld) shall in each case be shared, [*] by BMS and [*] by Otsuka. If as a result of any judgment, award, decree or settlement resulting from an action instituted by a third party, the parties, or either of them, is required to pay a royalty to such third party, such royalty shall be shared, [*] by BMS and [*] by Otsuka.
8.3.2 Rest of Territory .
In the event of the institution of any suit by a third party against BMS or Otsuka for patent infringement involving the manufacture, sale, distribution or marketing of Product in the Rest of Territory, BMS shall promptly notify Otsuka in writing of such suit. BMS shall defend such action as represented by counsel selected by it. Otsuka agrees to assist and cooperate with BMS, at BMS’s expense, to the extent necessary in the defense of such suit. All costs and expenses of such defense (including fees of attorneys and other professionals), the resulting award for damages, or any amount due pursuant to any settlement entered into with such third party shall in each case be borne by BMS. If as a result of any judgment, award, decree or settlement resulting from an action instituted by a third party, BMS is required to pay a royalty to such third party, such royalty shall be borne by BMS.
8.4. [*].
During the term of this Agreement, should BMS or any of its Affiliates or Sublicensees [*], or [*], Otsuka shall immediately be entitled to terminate this Agreement on thirty (30) days written notice to BMS.
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9. REPRESENTATIONS AND WARRANTIES
9.1. Generally .
Each party represents and warrants to the other party as follows: (i) it has full right, power and authority, and has taken all corporate action necessary to execute, deliver and perform this Agreement; (ii) execution and delivery of this Agreement by such party does not, and performance by it of its obligations hereunder will not, constitute a breach of, or conflict with, any agreement, order, judgment, decree or other arrangement, whether written or oral, to which it is a party or by which it is bound as of the Effective Date and the Restated Agreement Date; (iii) this Agreement is its legal, valid and binding obligation, enforceable in accordance with the terms and conditions hereof; (iv) no consent, permit or authorization of any governmental agency or third party is legally required for it to execute, deliver and perform the Agreement except such as have already been obtained; and (v) it is not aware of any impediment that would in any material respect adversely affect its ability to perform its obligations hereunder. Each party further represents and warrants to the other that no person has, or will have as a result of the transaction contemplated by the Agreement any right, interest or valid claim against such person to, in or for a commission, fee or other compensation as a finder or a broker because of any act or omission by or on behalf of such party.
9.2. Otsuka .
Otsuka represents and warrants to BMS that: (i) to the best of its knowledge as of the Effective Date and the Restated Agreement Date, based on the knowledge of Otsuka’s and its Affiliate’s personnel responsible for development of the Compound and Product, the data that it has provided to BMS prior to the Effective Date regarding the efficacy and safety of the Compound and the Product, and that is contained in Otsuka’ s IND and similar flings elsewhere made prior to the Effective Date, neither contain any misstatement of a material fact related to safety or efficacy nor omit to state any material fact in Otsuka’s possession related to safety or efficacy; (ii) it has received no notice from a third party claiming any ownership interest in the Patent Rights or Compound; and (iii) it is unaware of any third-party infringement of the Patent Rights.
9.3. Disclaimers .
Neither party makes any other representations or warranties except those set forth in this Section 9 and elsewhere in this Agreement. Without limiting the generality of the foregoing, neither party makes any warranty as to the likelihood of success of the development or Commercialization of Product. OTSUKA EXPRESSLY DISCLAIMS ANY OTHER WARRANTIES, INCLUDING WARRANTIES AS TO THE MERCHANTABILITY OR FITNESS OF PRODUCT FOR A PARTICULAR USE OR PURPOSE, THE ADEQUACY OR SUITABILITY OF OTSUKA’S PRECLINICAL AND CLINICAL DATA FOR BMS’S PURPOSES, THE VALIDITY OR
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ENFORCEABILITY OF THE PATENT RIGHTS, THE ENFORCEABILITY OF ANY TRADEMARK, OR THAT THE PATENT RIGHTS OR TRADEMARKS DO NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT OF A THIRD PARTY.
9.4. Survival .
This Section 9 shall survive any termination or expiration of this Agreement.
10. CONFIDENTIALITY
10.1. Generally .
Except to the extent permitted by this Agreement or as otherwise agreed by the parties in writing, the parties agree that, at all times during the Extended Period (as hereinafter defined), the party and its Affiliates receiving any data, information and other documentation (the “Receiving Party”) shall keep completely confidential, shall not publish or otherwise disclose and shall not use directly or indirectly for any purpose, any data, information and other documentation furnished to it by the other party or its Affiliates (the “Disclosing Party”) pursuant to this Agreement (including prior to the Effective Date under a confidentiality agreement in contemplation of this Agreement) or otherwise relating to or disclosed during any transaction contemplated hereby, including information heretofore furnished to it, except to the extent that the Receiving Party can demonstrate by competent proof that such information:
(a) was in the public domain at the time it was furnished or becomes part of the public domain thereafter by publication or otherwise through no fault on the part of Receiving Party;
(b) was already in the Receiving Party’s possession at the time it was furnished, provided that the same was not previously obtained, directly or indirectly, from the Disclosing Party;
(c) was independently discovered or invented by personnel of the Receiving Party who did not directly or indirectly access the information provided by the Disclosing Party; or
(d) was subsequently disclosed to the Receiving Party by a third party having the right to lawfully make such disclosure which third party did not obtain the same, directly or indirectly, from the Disclosing Party.
Section 4.5.3 describes the treatment of, and rights in, data, information and other documentation generated or developed by BMS or its Affiliates as service providers on behalf of Otsuka.
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As used herein, “Extended Period” means the period commencing on the Effective Date and ending on the latter to occur of (i) the tenth (10th) calendar anniversary of the date of termination or expiration of this Agreement or (ii) December 31, 2014. Notwithstanding the foregoing, each party may disclose the other party’s information to the extent that such disclosure is reasonably necessary in performing its obligations under this Agreement, pursuing or defending litigation, or complying with applicable law and governmental regulations; provided that, in the case of litigation or compliance with law or regulations, if a Receiving Party intends to make any such disclosure, it shall give reasonable advance written notice to the Disclosing Party of such intention. Furthermore, nothing in the foregoing shall be construed to preclude either party from disclosing such information to such third parties as may be necessary in connection with the development and Commercialization of Product as contemplated by this Agreement, including, without limitation, permitted sublicensing, and co-promotion transactions in connection therewith; provided that the Receiving Party in question shall in each case obtain from the proposed third-party recipient a written confidentiality undertaking containing confidentiality obligations no less onerous than those set forth in the foregoing.
10.2. Public Announcements .
The parties shall simultaneously issue a joint, mutually agreed press release announcing this collaboration. Subject to the foregoing, and except as required by applicable law, neither party shall issue any press release or make any other public announcement concerning this Agreement or the subject matter hereof without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed. In the event of a legally required press release or other public announcement, the party making such release or announcement shall provide the other party with a copy of the proposed text prior to such release or announcement. If either party is required to file this Agreement with any governmental agency, such party will redact the financial terms of this Agreement to the extent possible in order to keep the financial terms of this Agreement confidential to the maximum extent permitted by law.
11. INDEMNIFICATION
11.1. Allocation of Responsibilities .
As between the parties, each party shall be fully responsible for its obligations, actions, omissions and matters within its control, together with the consequences thereof. As to actions, omissions and matters not within either party’s sole control, the parties shall share the responsibilities thereof, and the consequences thereof in accordance with the parties’ respective economic benefit under this Agreement, i.e., BMS shall bear [*], and Otsuka [*], of such responsibilities and consequences. Consistent with such allocation of responsibilities, the parties indemnify each other as provided below in this Section 11.
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11.2. Indemnification by Otsuka .
Otsuka shall indemnify BMS, its Affiliates and their respective directors, officers, employees and agents, and defend and save each of them harmless, from and against any and all suits, investigations, claims, damages, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses; collectively, “Losses”) to the extent that they arise from or occur as a result of (a) the breach of any representation or warranty of Otsuka hereunder; (b) Otsuka’s (or its designee’s) manufacture of Compound and manufacture of Product not in compliance with agreed manufacturing specifications, or fault on the part of Otsuka or its designee in the process of manufacturing Compound or Product (but, for the sake of clarification, excluding Losses resulting from the inherent efficacy or safety of Compound or Product); (c) the failure of Otsuka or its Affiliates to perform any of Otsuka’s duties or obligations set forth in this Agreement; or (d) the gross negligence or intentional misconduct of Otsuka or any of its Affiliates in connection with any action or transaction contemplated by this Agreement. For the sake of clarification, Otsuka’s “designee” as used in this Section 11.2 excludes BMS, its Affiliates and Sublicensees.
11.3. Indemnification by BMS .
BMS shall indemnify Otsuka, its Affiliates and their respective directors, officers, employees and agents, and defend and save each of them harmless, from and against any and all Losses to the extent that they arise from or occur as a result of (a) the breach of any representation or warranty of BMS hereunder; (b) the manufacture of Product by BMS (or its designee) or any of its Affiliates or Sublicensees (whether as a toll manufacturer for or as a supplier to Otsuka or Otsuka’s Affiliates) not in compliance with agreed manufacturing specifications, or fault on the part of BMS or its designee, Affiliates or Sublicensees in the process of manufacturing Product (but, for the sake of clarification, excluding Losses resulting from the inherent efficacy or Safety of Product); (c) the failure of BMS, its Affiliates or Sublicensees to perform any of BMS’s duties or obligations set forth in this Agreement; (d) the implementation of those decisions of the JCC as to which BMS has the tie-breaking vote, including, without limitation, marketing and sales strategies; or (e) the gross negligence or intentional misconduct of BMS or any of its Affiliates or Sublicensees in connection with any action or transaction contemplated by this Agreement.
11.4. Cross-Indemnification .
BMS and Otsuka shall indemnify each other, the other’s Affiliates and their respective directors, officers, employees and agents, and defend and save each of them harmless, from and against any and all Losses to the extent that they arise from or occur as a result of (a) decisions of the PDC, including, without limitation, the development of Product, the inherent efficacy or safety of Compound as a pharmaceutical product and
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contents of Product labels; (b) those decisions of the JCC as to which BMS does not have the tie-breaking vote; and (c) all other actions, omissions and other matters not within either party’s sole control, in order that in each case such Losses will be apportioned [*] to BMS and [*] to Otsuka; provided that, if Losses result not from the decisions of the PDC or the JCC, but from the implementation of those decisions, then the party whose obligation it was to implement the decision(s), and whose manner of implementing or failure to implement resulted in the Losses, shall bear such Losses and shall indemnify the other party therefor.
11.5. Procedures .
A party seeking indemnification (the “Indemnified Party”) under this Section 11 shall: (a) promptly inform the other party (the “Indemnifying Party”) of any claim, suit or demand threatened or filed; (ii) where full indemnification is sought pursuant to Section 11.2 or 11.3, as the case may be, permit the Indemnifying Party to assume direction and control of the defense of claims resulting therefrom (including the right of the Indemnifying Party to settle at its sole discretion, provided that any such settlement shall not result in any remaining obligation or liability on the part of the Indemnified Party); and (iii) at its own cost and expense, cooperate fully as requested in the defense of the claims. Where partial indemnification is sought pursuant to Section 11.4, both the Indemnified Party and the Indemnifying Party shall be entitled to participate in the defense of the claims.
12. TERM AND TERMINATION
12.1. Length of Term .
The term of this Agreement shall commence on the Effective Date and shall, subject to earlier termination pursuant to this Section 12, expire on a country-by-country basis as provided herein. Subject to earlier termination pursuant to Section 12, this Agreement shall expire as to the United States on the tenth (10th) calendar anniversary of the date of First Commercial Sale of Product in the United States; this Agreement shall expire as to each country in the European Union on the tenth (10th) calendar anniversary of the date of First Commercial Sale of Product anywhere in the European Union; and this Agreement shall expire as to any country in the Rest of Territory upon the expiration of the Royalty Term for that country (on a country-by-country basis). Any reference to the “term of this Agreement” (or words of similar import) in this Agreement shall mean the period ending on the date on which there is no country within the Territory still subject to the terms and conditions of this Agreement. Upon the expiration of the term, the parties may elect to extend their collaboration regarding Commercialization of the Product in such countries and on such terms and conditions as the parties may mutually agree at such time.
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12.2. Termination for Significant Development Reasons .
BMS shall have the right to terminate Product development activities, its Commercialization rights and this Agreement under the circumstances and on the terms and conditions as specified below:
(a) BMS shall have the right — which right shall expire upon the approval of either an NDA or MAA for Product in the United States or the European Union — after close consultation with the PDC, to terminate this Agreement as a whole upon sixty (60) days’ prior written notice to Otsuka, for significant scientific, medical and/or regulatory reasons (excluding those reasons described in subparagraph (b) below).
(b) In addition, BMS shall have the right, after close consultation with the PDC, to terminate this Agreement as a whole (and not on a country-by-country basis), upon thirty (30) days’ prior written notice to Otsuka, at any time (i) within thirty-six (36) months of the Effective Date, if the then-available clinical data show that Compound and Product fail to meet any efficacy or safety/tolerability criterion set forth in the Target Product Profile attached as Appendix B to this Agreement; or (ii) within ninety (90) days of the FDA informing BMS either (1) that the NDA for Product is not approvable or (2) that the FDA requires, as a condition to approving such NDA, that the label of Product include an adverse statement regarding Product, the FDA’s decision in the case of either (1) or (2) being attributable to the effect of Compound on the QTc interval as observed in clinical studies. In the case of any termination pursuant to subsection (b)(ii) of this Section 12.2 (but not pursuant to subsection (a) or subsection (b)(i)), Otsuka shall, within thirty (30) days of such termination, refund to BMS in full any and all payments theretofore made by BMS to Otsuka under Section 3.1.2 or 3.1.3, but no other payments.
In the case of termination under this Section 12.2, all of BMS’s rights under this Agreement (and the derivative rights of BMS’s Affiliates and Sublicensees) shall immediately terminate in respect of such country(ies) or the entire Territory, as the case may be, and the provisions of Section 12.7 (General Effects) and Section 13 (Transition Provisions) shall immediately apply.
12.3. Termination for Regulatory or Marketing Reasons .
Otsuka may terminate this Agreement in whole as provided in Section 4.6.2 (Product Registrations), or as to the Rest of Territory as provided in Section 5.9.5 (Certain Minimum Payments), or in whole or in part as provided in Section 5.10.4 (No Undue Delay). BMS may also terminate in part as provided in Section 5.10.4. Otsuka may delete one or more countries from the Territory (and thereby terminate this Agreement as to such countries) pursuant to Sections 7.1 and 7.3 (Competitive Products),
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and BMS may delete all the countries of the European Union from the Territory (and thereby terminate this Agreement as to all such countries) pursuant to Section 7.3 after Otsuka has exercised certain partial termination rights described in Section 7.1. For the sake of clarification, this Section 12.3 is not intended to expand either party’s right of termination beyond that provided for in the applicable provisions. As used in this Section 12.3, the term “European Union” excludes Norway, Switzerland and Iceland for so long as the country in question is not a member of the European Union.
12.4. Termination for Breach or [* ].
(a) Termination for Breach.
This Agreement is subject to early termination in whole by the non-breaching party in the event of a material breach hereof, or a material breach of a Related Agreement to the extent that the Related Agreement specifically provides for cross-default to this Agreement, if such breach has not been cured within ninety (90) days following receipt of written notice thereof, specifying the nature of the purported breach, from the non-breaching party; provided, however , that if such breach cannot be cured within such 90-day period, but the breaching party proposes and has initiated a reasonable course of action to cure the breach and has acted diligently and in good faith to cure the breach but has not cured the breach within the ninety (90)-day period, such period shall be extended as is reasonably necessary to permit the breach to be cured. The party entitled to terminate hereunder may do so by giving the breaching party a second written notice — a notice of termination — which shall be effective thirty (30) days following receipt thereof by the breaching party.
(b) Termination for [*].
Otsuka may terminate this Agreement effective on thirty (30) days written notice to BMS in accordance with Section [*].
12.5. Termination for Insolvency .
A party may, by written notice to the other party, terminate this Agreement in whole if the other party becomes insolvent, makes an assignment for the benefit of creditors, becomes the subject of voluntary or involuntary proceedings in bankruptcy instituted on behalf of or against such other party, or has a receiver or trustee appointed for all or substantially all of its property, and such status impairs the other party’s ability to perform its obligations hereunder; provided, however , that, in the case of an involuntary bankruptcy proceeding, such right to terminate shall become effective only if such other party consents to the involuntary proceeding or such proceeding is not dismissed within ninety (90) days following the fling thereof. The license granted under this Agreement to BMS in the Rest of Territory is for all purposes of Section 365(n) of
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Title 11 of the United States Code (“Title 11”), a license of rights to “intellectual property” as defined in Title 11.
12.6. Termination for BMS Merger .
Subject to the limitations set forth below, Otsuka may, with three (3) months’ prior written notice to BMS, terminate this Agreement in whole if BMS acquires, is acquired by, or otherwise merges with, a third party and (a) the resulting or surviving entity continues to develop (in a [*]) or market a Comparable Product (as defined below) in the Territory; (b) such Comparable Product came from the research and development portfolio or the marketed product portfolio of such third party; and (c) Otsuka reasonably determines that the marketing of such Comparable Product would be detrimental to the marketing and/or sales of Product. For purposes of this Agreement, “Comparable Product” means any product, other than Product, which (i) in the case of a marketed product, carries an indication approved by an applicable authority which indication is [*], and (ii) in the case of a product in development, is being developed for any indication [*]. BMS shall notify Otsuka in writing, no later than ten (10) Business Days after the consummation of such acquisition or merger, if the resulting or surviving entity has a Comparable Product under development (in [*]) or in the market in the Territory, and shall furnish to Otsuka information Otsuka reasonably requests in order to make an informed decision under this section. Notwithstanding the foregoing, Otsuka shall not have the right to terminate this Agreement under this Section 12.6 if both (i) BMS affirmatively states in the aforesaid notice to Otsuka the resulting or surviving entity’s intention to discontinue the development or marketing, as the case may be, of the Comparable Product in the Territory and (ii) the resulting or surviving entity in fact, through out-licensing, sale or otherwise, discontinues development or marketing, as the case may be, of such Comparable Product in the Territory within [*] months after the date of consummation of the acquisition or merger in question. Otsuka’ s rights hereunder to give notice terminating this Agreement on account of a merger or acquisition affecting BMS shall lapse eight (8) months after the date of consummation of said merger or acquisition or after Otsuka’s receipt of the aforesaid notice and the requested information from BMS, whichever occurs later.
12.7. General Effects .
Otsuka has the right, for itself its Affiliates and non-Affiliate sublicensees and contractors, to make, have made, use and sell Product in and out of the Field in any country in the Territory in which BMS’s Commercialization rights or license terminate in accordance with this Agreement. The expiration or early termination of this Agreement, whether in whole or in part as to one or more countries, shall be without prejudice to
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(a) BMS’s continued obligation to make payments and reports, if any, as provided in Section 3.1, Section 5.9 and the Related Agreements, and (b) either party’s (i) obligations that are expressly identified as surviving, or by their nature or context logically survive, expiration or early termination of this Agreement or (ii) rights that accrued hereunder prior to such expiration or termination. For the sake of clarification, an event otherwise giving rise to a milestone payment under Section 3.1 that does not occur until after the termination of the Agreement (either as a whole or as to the United States or the European Union as a whole, as the case may be) shall not create said milestone payment obligation. In addition to the foregoing, the following provisions of this Agreement shall survive expiration or termination of this Agreement, in addition to other provisions that, by their nature or context, logically survive expiration or termination: Sections 3.2, 4.5.3, 4.5.5, 5.9.9, 5.9.10, 6, 9, 10, 11,12.7, 13, 14 and 15.13.
Upon termination or expiration of this Agreement, all data, information and other documentation related to the development or Commercialization of, or regulatory affairs pertaining to, Product, Compound, Compound Forms, Related Compounds and Improvements (to the extent Improvements pertain to Product, Compound, Compound Forms or Related Compounds), including any such data, information and other documentation deemed owned by BMS in Section 4.5.3 - whether developed or produced by Otsuka or its Affiliates, or by BMS or its Affiliates as service providers on behalf of Otsuka in the United States and the European Union, or by BMS or its Affiliates or Sublicensees in connection with BMS’s license rights and obligations in the Rest of Territory shall be the data, information and other documentation of Otsuka. BMS shall transfer to Otsuka all such data, information and other documentation in its or its Affiliates’ possession or control, shall be deemed the Receiving Party of all such data, information and other documentation within the meaning of Section 10, and shall cease all further use for any purpose of all such data, information and other documentation. In addition, Otsuka’s rights to all Improvements, including related patents, patent applications and other intellectual property rights, shall be as set forth in Section 4.5.5.
13. TRANSITION PROVISIONS
13.1. Transfer of Rights; Contract Manufacture .
In the event of the expiration or early termination of this Agreement in whole, as soon as practicable following such termination, BMS shall assign and transfer to Otsuka or to a third party, as Otsuka may direct, at BMS’s expense (i) all data, files and other materials in the possession or under the control of BMS relating to the Compound, Compound Form, Related Compounds, Product and Improvements (to the extent Improvements pertain to Compound, Compound Form, Related Compounds or Product), and the development, regulatory approval and Commercialization thereof (including, without limitation, all ongoing research and development projects and studies, all contracts with clinical research organizations, and all customer-related information), and
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(ii) all of its right, title and interest, if any, in and to all IND’s, NDA’s, MA’s and MAA’s, or their equivalent in the Territory for any Product and all government approvals issued thereon and all files related thereto. In the event of a partial termination of this Agreement as to one or more countries pursuant to Section 12.2 or 12.3, as soon as practicable after such event BMS shall assign and transfer to Otsuka or to a third party, as Otsuka may direct, at BMS’s expense, all of its right, title and interest in and to all of the tangible and intangible property and other rights described in the preceding sentence, but only insofar as they are relevant to the country or countries that are the subject of the partial termination. To effect a transfer of intellectual property and other rights relating to the Product to Otsuka as provided in the foregoing, BMS shall, upon Otsuka’s reasonable request, provide to the competent government agency in each relevant country in the Territory an appropriate consent or authorization directing that all data and information contained in BMS’s applications for testing and marketing approvals in that country for Product shall be promptly incorporated in equivalent applications of Otsuka or its third-party designee, or that such applications be transferred and assigned to Otsuka. Upon expiration or termination of this Agreement as a whole or in part, except as provided below, BMS will cease all display, advertising and use of all Trademarks, shall, if reasonably requested by Otsuka, confirm by executing appropriate documents Otsuka’s exclusive right and title to all Trademarks, and will not thereafter use, advertise or display any name, mark or logo that is, or any part of which is, similar to or confusing with Trademark(s) or other designation associated with Product, anywhere in the world or, in the event of partial termination, in the relevant countries. Upon expiration or termination of this Agreement as a whole or in part, the parties shall cooperate in good faith to ensure that BMS’s personnel (including marketing and sales representatives) and relevant third parties (including publishers, advertising agencies and the like) promptly discontinue the use, dissemination and publication of promotional materials containing the Trademark(s), anywhere in the world or, in the event of partial termination, in the relevant countries, except, in the case of third parties, under the direction of Otsuka. As used in this Section 13.1, “BMS” includes its Affiliates and Sublicensees.
In addition to the above, BMS shall, upon the expiration or termination of this Agreement, provide toll manufacturing services for Otsuka (if requested by Otsuka) as provided, and with the conditions set forth, in Section 5.11.1.
13.2. Continued Collaboration .
Upon expiration of the Royalty Term as to any country in the Rest of Territory or BMS’s Commercialization rights in the United States or the European Union, the parties may, in their discretion, negotiate an agreement for their continued collaboration on mutually agreeable terms. Such agreement shall contain a license to the Trademark(s) then in use, at a royalty rate of [*] of Net Sales.
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13.3. Special Transition in EU/US .
In the event that Commercialization rights granted to BMS hereunder in the United States, the European Union or any country thereof terminate pursuant to Section 12 (but not including expiration at the end of the Term), BMS and its Affiliates shall provide, at Otsuka’s request, the additional transitional services described herein in that country or region for a period of six (6) months following the date of such termination (or nine (9) months if the notice of termination given by either party was three (3) months or less). Upon such a request by Otsuka, BMS and its Affiliates shall continue to provide to Otsuka, following termination, substantially the same goods and services as BMS was obligated to provide prior to termination, so that the level and nature of Commercialization activities by Otsuka and its designee(s) may continue without material interruption during a transition period in that country following the termination of BMS’s Commercialization rights. Otsuka shall pay to BMS a commercially reasonable fee for each of the services requested by Otsuka and delivered by BMS hereunder (such fee to be based on the reasonable cost of the services provided, not based on a percentage of Net Sales). In addition to providing such services, BMS and its Affiliates shall cooperate with Otsuka prior to and following termination or expiration of this Agreement to facilitate the smooth transition to Otsuka of all development, regulatory, manufacturing, supply and Commercialization services being provided by BMS and its Affiliates, so as to avoid or minimize any disruption caused by the expiration or termination of this Agreement.
13.4. Survival .
This Section 13 shall survive the expiration or any early termination of this Agreement.
14. DISPUTE RESOLUTION
14.1. Generally .
The parties shall attempt in good faith to resolve quickly and amicably any dispute arising out of this Agreement. Subject to Section 14.2, any dispute arising out of or related to this Agreement that the parties are unable to resolve through such efforts within a reasonable period of time shall be resolved by binding arbitration, initiated by either party and conducted in accordance with the then-current arbitration rules of the International Chamber of Commerce. The arbitration proceeding shall be held in San Francisco, California, or such other location as the parties shall mutually agree, and shall be conducted in the English language. The proceeding shall be conducted by one (1) arbitrator (appointed pursuant to said rules) unless either party promptly requests three (3) arbitrators, in which event three (3) arbitrators (appointed pursuant to said rules) shall be used. The party substantially prevailing in such proceeding shall recover from the other party the prevailing party’s share of expenses advanced to cover the cost of the
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arbitration, plus all other costs and expenses reasonably incurred in connection with such proceeding and enforcement of the arbitration decision, including (without limitation) its reasonable attorneys’ fees, expert and other witness fees, and all other fees and costs reasonably incurred in connection with such proceeding. The final decision of such arbitrator(s) shall be final and binding on both parties and enforceable in any court of competent jurisdiction in any country in the world.
14.2. Injunctive Relief
The parties acknowledge that damages at law may be an inadequate remedy for the breach of any of the duties and obligations of the parties contained in this Agreement. Accordingly, before or during any of the dispute resolution proceedings described in Section 14.1, each party shall be entitled, without the need of establishing actual damages, to such injunctive relief as may be necessary and appropriate to prevent, or to enjoin the continuation of, any such breach where damages at law are inadequate.
15. MISCELLANEOUS
15.1. Compliance With Laws .
BMS and Otsuka each covenant to the other that it will comply (and will cause its Affiliates and Sublicensees to fully comply) with all laws and regulations applicable to it (and them) and performance of its (and their) duties hereunder.
15.2. No-Hire Clause .
[*] agrees to [*] so long as [*] and for the period of [*] after [*] has ended. As used herein, “[*]” means [*], who has spent a substantial amount of time [*] or the [*] in connection therewith, and who is named on a list of “[*]” provided by [*] to [*] from time to time.
15.3. Force Majeure .
Neither party shall be liable to the other for loss or damages or shall have any right to terminate this Agreement for any default or delay in the performance of this Agreement attributable to any act of God, flood, fire, explosion, strike, lockout, labor dispute, shortage of raw materials, casualty or accident, war, revolution, civil commotion, act of public enemies, blockage or embargo, injunction, law, order, proclamation, regulation, ordinance, demand or requirement of any government or subdivision,
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authority or representative of any such government, or any other cause beyond the reasonable control of such party if the party affected shall give prompt written notice of any such cause to the other party. The party giving such notice shall thereupon be excused from such of its obligations hereunder as it is thereby disabled from performing for so long as it is so disabled and for 30 days thereafter. Notwithstanding the foregoing, nothing in this Section 15.3 shall excuse or suspend the obligation to make any payment due hereunder in the manner and at the time provided.
15.4. Notices .
Any notice, consent or other communication required or permitted to be given under or in connection with this Agreement shall be deemed to have been sufficiently given if in writing and personally delivered by messenger or sent by internationally recognized express courier service, prepaid, to the party for which such notice is intended, at the address set forth for such party below:
| (a) | In the case of Otsuka, to: |
Otsuka Pharmaceutical Co., Ltd.
3-2-27, Otedori
Chuo-ku
Osaka 541-0045 JAPAN
Attention: Director, International Licensing Department
with a copy to: Director, Legal Affairs Department
| (b) | In the case of BMS to: |
Bristol-Myers Squibb Company
Route 206 & Province Line Road
Princeton, New Jersey 08540 U.S.A.
Attention: Vice President, Licensing
or to such other address for such party as it shall have specified by like notice to the other Party, provided that notices of a change of address shall be effective only upon receipt thereof. If sent by messenger or express courier service, the date of receipt (in the case of personal delivery) or the third business day after the date of dispatch (in the case or courier service) shall be deemed to be the date on which such notice or other communication has been given.
15.5. Entire Agreement; Related Agreements .
This Agreement, including the Appendices hereto and that certain Memorandum of Agreement relating to the Carcinogenicity Studies, together constitute the entire
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agreement between the parties relating to the subject matter hereof and supersede all previous writings and understandings, whether oral or written, relating to such subject matter, including but not limited to that certain Secrecy Agreement dated May 11, 1999, between the parties. In the event of any inconsistency between this Agreement and any ancillary agreement or document contemplated or referenced by this Agreement, the terms of this Agreement shall govern.
After the Restated Agreement Date, in anticipation of the commencement of Product Commercialization, the parties contemplate restating this Agreement into a master agreement and four (4) regional agreements, such regional agreements pertaining, respectively, to the United States, the Rest of Territory, the European Union Co-Promotion Countries and the European Union distribution countries. For the avoidance of doubt, all Related Agreements that the parties contemplate executing after the Restated Agreement Date, including, without limitation, the Otsuka-BMS Compound Supply Agreement, the BMS-OAPI Product Supply Agreement and toll manufacturing agreements as contemplated herein, shall continue to be in full force and effect notwithstanding the future restatement of this Agreement.
15.6. Waivers and Amendments .
Any waiver of any term or conditions of this Agreement, or any amendment, modification or supplementation of this Agreement, shall be effective only if in writing signed by the parties. A waiver of any breach or failure to enforce any of the terms or conditions of this Agreement shall not in any way affect, limit or waive a party’s rights hereunder at any time to enforce strict compliance thereafter with every term or condition of this Agreement.
15.7. Severability .
If any provision of this Agreement is held by an arbitrator, arbitration panel or a court of competent jurisdiction to be invalid or unenforceable, it shall be modified, if possible, to the minimum extent necessary to make it valid and enforceable or, if such modification is not possible, it shall be stricken and the remaining provisions shall remain in full force and effect. If any of the terms or provisions of this Agreement is in conflict with any applicable statute or rule of law in any jurisdiction, then such term or provision shall be deemed inoperative in such jurisdiction or to the extent of such conflict and the parties will renegotiate the affected terms and conditions of this Agreement to achieve the intended purpose of such conflicting or inoperative provisions.
15.8. No Partnership .
Nothing in this Agreement is intended or shall be deemed to constitute a partnership or employer-employee relationship between the parties. No party shall incur
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any debts or make any commitments for the other, except to the extent, if at all, specifically provided herein.
15.9. Section Headings .
The Section headings contained in this Agreement are for the purpose of convenience and are not intended to define or limit the contents of such sections.
15.10. Counterparts .
This Agreement may be executed simultaneously in any number of counterparts, any one of which need not contain the signature of more than one party but all such counterparts taken together shall constitute one and the same agreement.
15.11. Further Assurances .
Each party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the
purposes and intent of this Agreement.
15.12. Assignment .
Neither party shall be entitled to assign its rights hereunder without the prior written consent of the other party. No assignment and transfer shall be valid and effective unless and until the assignee/transferee shall agree in writing to be bound by the provisions of this Agreement.
15.13. Governing Law .
This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware without regard to its choice of law principles.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed and delivered by its duly authorized officer as of the day and year first above written.
| BMS: | Otsuka: | |||||||
| BRISTOL-MYERS SQUIBB COMPANY |
OTSUKA PHARMACEUTICAL CO., LTD. |
|||||||
| By: |
/s/ [signature illegible] |
By: |
/s/ [signature illegible] |
|||||
| Title: | Vice President | Title: | Director, Corporate Planning | |||||
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Restated
APPENDIX A
LIST OF PATENTS
|
Country |
Application No. |
Registration No. |
Expiration Date |
|||
| [*] | [*] | [*] | [*] |
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APPENDIX B
TARGET PRODUCT PROFILE
[*]
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APPENDIX C
OTSUKA CLINICAL STUDIES
[*] [Note: Approximately three pages of text are omitted]
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APPENDIX D
PRODUCT DEVELOPMENT PLAN
[*]
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APPENDIX E
CLINICAL STUDIES KEY TO JAPANESE APPROVAL
[*] [Note: Approximately two pages of text are omitted]
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APPENDIX F
ADVERSE EVENTS REPORT PROCESS;
POST-MARKETING SURVEILLANCE
[*]
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Exhibit 10.13
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 3
TO THE
RESTATED DEVELOPMENT AND COMMERCIALIZATION
COLLABORATION AGREEMENT
THIS AMENDMENT NO. 3 (“Amendment”) to that certain Restated Development and Commercialization Collaboration Agreement dated October 23, 2001 (“Restated Agreement”), is made and entered into as of September 25, 2006 (“3 rd Amendment Effective Date”), by and between Otsuka Pharmaceutical Co., Ltd. (“Otsuka”), a corporation organized and existing under the laws of Japan, having a principal place of business at 2-9, Kanda Tsukasa-cho, Chiyoda-ku, Tokyo, 101-8535 Japan, and Bristol-Myers Squibb Company (“BMS”), a corporation organized and existing under the laws of Delaware, having a principal place of business at 345 Park Avenue, New York, New York 10154, USA.
RECITALS
WHEREAS, Otsuka and BMS have previously entered into the Restated Agreement and an Amendment No. 1 (dated March 28, 2003) and an Amendment No. 2 (dated June 5, 2003) to the Restated Agreement;
WHEREAS, Otsuka and BMS now desire to amend certain terms and conditions of the Restated Agreement as hereinafter specified;
WHEREAS, Otsuka and BMS desire that all other terms and conditions of the Restated Agreement, as previously amended, remain in full force and effect;
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Otsuka and BMS agree as follows:
1. Capitalized terms in this Amendment shall have the same meanings as those in the Restated Agreement, unless specifically defined otherwise in this Amendment. All Section references are in regard to the Restated Agreement. References to the term “Agreement” in the Restated Agreement shall be deemed to include this Amendment.
2. Except as expressly modified herein, the Restated Agreement shall remain in full force and effect in accordance with its terms, as previously amended. To the extent that there are any inconsistencies between this Amendment and the Restated Agreement, as previously amended, the terms of this Amendment shall supersede the Restated Agreement.
3. In consideration for any exercise by Otsuka of its rights under Subsection 8.2.2(a) of the Restated Agreement, as amended by this Amendment, BMS hereby agrees to, and shall, pay Otsuka the sum of [*] within ten (10) days after the 3 rd Amendment Effective Date.
4. Otsuka and BMS hereby amend and restate Section 8.2 of the Restated Agreement in its entirety as follows:
8.2 Patent Infringement by Third Party .
8.2.1 Notice of Infringement .
If, during the term of this Agreement, either party becomes aware of any infringement, threatened infringement or suspected infringement by any third party of any Patent Rights in the Field in the Territory, such party shall promptly give written notice thereof to the other party, with all available details in its possession. The party involved in any such action or controlling any action under Section 8.2.2 or 8.2.3 (the “Active Party”) shall, in each case except as provided to the contrary in Sections 8.2.2 and 8.2.3: (a) keep the other party (the “Inactive Party”) reasonably informed of the status of the action including, but not limited to, significant developments during the pendency of such action; (b) endeavor to solicit the participation and views of the Inactive Party during each stage of the action; and (c) reasonably consider such Inactive Party’s views, although the Active Party’s judgment shall control.
8.2.2. Remedies Against Infringement of Patent Rights in the United States .
(a) Otsuka’s First Right to Pursue Remedies Against Infringement of Patent Rights in the United States .
(i) With respect to any infringement, threatened infringement or suspected infringement of any Patent Rights in the Field in the United States, Otsuka shall have the first right, but not the obligation, to take action, at its expense, to pursue any and all remedies against such infringer to stop such infringement and to recover profits and damages in connection therewith.
(ii) Pursuant to such right of Otsuka, in all actions, disputes and proceedings involving Patent Rights in the United States, Otsuka shall have the sole and exclusive right to control prosecution of such actions, disputes and proceedings (including the right to select counsel in connection therewith) and shall (notwithstanding Section 8.2.1) have no obligation to keep BMS informed regarding any such actions, disputes or proceedings or the prosecution thereof. BMS shall have no right to control, or to participate in, the decision making process with respect to any such actions, disputes or proceedings involving the enforcement of the Patent Rights in the United States, any infringement, threatened infringement, or suspected infringement of the Patent Rights in the United States, or the settlement or compromise thereof. BMS’s consent to the settlement or compromise of any such action, dispute or proceeding pertaining to the Patent Rights shall not be required; provided, however, that Otsuka will not enter into any settlement or compromise of any such action, dispute or proceeding that requires BMS to pay money to a third party or that imposes liability on BMS without BMS’s prior written consent, which BMS shall not unreasonably withhold (such settlement or compromise being referred to in this Section 8.2.2 and in Section 8.2.3 as a “Settlement Requiring
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BMS Consent”). Otsuka shall not be required to inform BMS, or to consult with BMS, in respect of any action, dispute or proceeding, or the settlement or compromise of any action or dispute, pertaining to the infringement, threatened infringement or suspected infringement of the Patent Rights or the enforcement of the Patent Rights in the United States, except only as and to the extent required above with respect to a Settlement Requiring BMS Consent. Further, BMS may not join as a party in any such actions, disputes or proceedings.
(iii) BMS shall cooperate with Otsuka as reasonably requested by Otsuka in connection with such action, dispute or proceeding, shall cause any of BMS’s and its Affiliates’ employees and agents to give depositions or testify in connection with any proceeding regarding the Patent Rights in the United States when requested by Otsuka, and shall make available to Otsuka copies of any and all relevant records, papers, documents, information and specimens. BMS shall bear the out-of-pocket expenses and internal costs incurred by it and its Affiliates in providing such cooperation to Otsuka at Otsuka’s request, in causing such employees and agents to give such depositions or testimony, and in making available copies of such documents or other materials.
(iv) In the event of any monetary recovery by Otsuka in connection with any such action, dispute or proceeding in the United States involving the Patent Rights in the Field, or the settlement or compromise thereof, such recovery shall be entirely retained by Otsuka for its own account and benefit.
(v) In the event that any adverse judgment for monetary liability is imposed on either Otsuka or any of its Affiliates in favor of a third-party litigant in any such action, dispute or proceeding in the United States involving the Patent Rights in the Field, Otsuka shall bear the entirety of such adverse judgment.
(b) BMS’s Back-Up Right to Pursue Remedies Against Infringement of the Patent Rights in the United States .
(i) With respect to any infringement, threatened infringement or suspected infringement of any Patent Rights in the Field in the United States, if (1) Otsuka decides in writing to BMS not to pursue remedies against the alleged or suspected infringer(s), and (2) in any event if Otsuka fails to commence appropriate action with respect to such infringement within one hundred twenty (120) days after BMS’s written request to Otsuka to do so, BMS shall have the right, but not the obligation, to take action in its name, or in Otsuka’s name where legally required, and at BMS’s expense, to pursue any and all remedies against such infringer to stop such infringement and to recover profits and damages. In any such case, Otsuka shall be entitled, at its own expense, to join as a party in pursuing such remedies, if legally permissible. Should Otsuka’s direct participation in the legal proceedings be indispensable (i.e., it is not legally permissible for BMS to pursue remedies in Otsuka’s name), BMS shall be entitled to request Otsuka, at BMS’s expense, to pursue remedies (which request Otsuka shall not unreasonably refuse). BMS shall promptly reimburse Otsuka for Otsuka’s out-of-pocket expenses (but not Otsuka’s internal costs) reasonably incurred in so participating.
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For purposes of determining BMS’s right to pursue remedies under this Subsection 8.2.2(b), in the event of a “Paragraph IV” certification under the Hatch-Waxman Act of 1984, if, by the thirtieth (30th) day following Otsuka’s receipt of the notice required under 21 U.S.C. § 355(j)(2)(B)(i) and (ii), Otsuka (A) has not commenced a patent infringement suit against the putative infringer as contemplated by the relevant regulations; and (B) has not confirmed to BMS that it intends to do so within forty-five (45) days of the date of Otsuka’s receipt of such notice, Otsuka shall be deemed to have decided not to pursue remedies within the meaning of Clause (1) above, thereby enabling BMS to pursue remedies under this Subsection 8.2.2(b).
(ii) Otsuka shall cooperate with BMS as reasonably requested by BMS in connection with such action, dispute or proceeding commenced by BMS in accordance with this Subsection 8.2.2(b), shall cause any of Otsuka’s and its Affiliates’ employees and agents to give depositions or testify in connection with any proceeding regarding the Patent Rights when requested by BMS, and shall make available to BMS copies of any and all relevant records, papers, documents, information and specimens. BMS shall promptly reimburse Otsuka for Otsuka’s out-of-pocket expenses (but not Otsuka’s internal costs) reasonably incurred in providing such cooperation to BMS at BMS’s request, in causing such employees and agents to give such depositions or testimony, and in making available copies of such documents or other materials.
(iii) In all cases where BMS pursues remedies against the infringement, threatened infringement or suspected infringement of the Patent Rights as permitted in this Subsection 8.2.2(b), except where Otsuka elects, at its expense, to join as a party, BMS shall have the sole and exclusive right to control prosecution of such action, but shall keep Otsuka fully informed on an ongoing basis with respect to such action, dispute or proceeding and any settlement or compromise discussions, and shall allow Otsuka to participate in the decision-making process with respect thereto. BMS may not settle or compromise any such action, dispute or proceeding without the prior written consent of Otsuka, which Otsuka shall not unreasonably withhold, In the event of any monetary recovery in connection with such action, dispute or proceeding brought by BMS pursuant to this Subsection 8.2.2(b), or the settlement or compromise thereof, such recovery shall be applied in the following priority: first, to reimburse BMS for its total out-of-pocket expenses reasonably incurred in prosecuting or settling such action, dispute or proceeding (including, without limitation, reasonable attorneys’ fees) (“Total Out-of-Pocket Expenses”); second to reimburse Otsuka for its Total Out-of-Pocket Expenses reasonably incurred in connection with such action, to the extent not previously reimbursed by BMS to Otsuka; and third, the balance to be shared [*] to BMS and [*] to Otsuka.
(iv) In the event any adverse judgment for monetary liability is imposed on either BMS or Otsuka or both (and/or any of their respective Affiliates) in favor of a third-party litigant in any such action, dispute or proceeding commenced in accordance with this Subsection 8.2.2(b), BMS shall bear [*] and Otsuka shall bear [*] of such adverse judgment, regardless of the name of the party against which such adverse judgment is imposed.
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8.2.3. Remedies Against Infringement of Patent Rights Outside the United States .
(a) BMS’s First Right to Pursue Remedies Against Infringement of Patent Rights Outside the United States .
(i) With respect to any infringement, threatened infringement or suspected infringement of any Patent Rights in the Field in the Territory outside the United States, BMS shall have the first right, but not the obligation, to take action in BMS’s name, or in Otsuka’s name where legally required, and at BMS’s expense, to pursue any and all remedies against such infringer to stop such infringement and to recover profits and damages in connection therewith. In any such case, Otsuka shall be entitled, at its own expense, to join as a party in pursuing such remedies, if legally permissible. Should Otsuka’s direct participation in the legal proceedings be indispensable (i.e., it is not legally permissible for BMS to pursue remedies in Otsuka’s name), BMS shall be entitled to request Otsuka, at BMS’s expense, to pursue remedies (which request Otsuka shall not unreasonably refuse). BMS shall promptly reimburse Otsuka for Otsuka’s out-of-pocket expenses (but not Otsuka’s internal costs) reasonably incurred in so participating.
(ii) Otsuka shall cooperate with BMS as reasonably requested by BMS in connection with such action, dispute or proceeding commenced by BMS in accordance with this Subsection 8.2.3(a), shall cause any of Otsuka’s and its Affiliates’ employees and agents to give depositions or testify when requested by BMS, and shall make available to BMS copies of any and all relevant records, papers, documents, information and specimens. BMS shall promptly reimburse Otsuka for Otsuka’s out-of-pocket expenses (but not Otsuka’s internal costs) reasonably incurred in providing such cooperation to BMS at BMS’s request, in causing such employees and agents to give depositions or testimony, and in making available copies of such documents or other materials.
(iii) In all cases where BMS pursues remedies against the infringement, threatened infringement or suspected infringement of the Patent Rights as permitted in this Subsection 8.2.3(a), except where Otsuka elects, at its expense, to join as a party, BMS shall have the sole and exclusive right to control prosecution of such action, but shall keep Otsuka fully informed on an ongoing basis with respect to such action, dispute or proceeding and any related settlement or compromise discussions, and shall allow Otsuka to participate in the decision making process with respect thereto. BMS may not settle or compromise any such action, dispute or proceeding without the prior written consent of Otsuka, which Otsuka shall not unreasonably withhold. In the event any monetary recovery in connection with such infringement action, dispute or proceeding, or the settlement or compromise thereof, is obtained, such recovery shall be applied in the following priority: first, to reimburse BMS for its Total Out-of-Pocket Expenses reasonably incurred in prosecuting or settling such action; second, to reimburse Otsuka for its Total Out-of-Pocket Expenses reasonably incurred in connection with such action, to the extent not previously reimbursed by BMS to Otsuka; and third, the balance to be shared [*] to BMS and [*] to Otsuka.
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(iv) In the event any adverse judgment for monetary liability is imposed on either BMS or Otsuka or both (and/or any of their respective Affiliates) in favor of a third-party litigant in any such action, dispute or proceeding commenced in accordance with this Subsection 8.2.3(a), BMS shall bear [*] and Otsuka shall bear [*] of such adverse judgment, regardless of the name of the party against which such adverse judgment is imposed.
(b) Otsuka’s Back-Up Right to Pursue Remedies Against Infringement of Patent Rights Outside the United States .
(i) With respect to any infringement, threatened infringement or suspected infringement of any Patent Rights in the Field in the Territory outside the United States, if (1) BMS decides in writing to Otsuka not to pursue remedies against the alleged or suspected infringer(s), and (2) in any event if BMS fails to commence appropriate action within one hundred twenty (120) days after Otsuka’s written request to BMS to do so, Otsuka shall have the right, but not the obligation, to take action in its name, or in BMS’s name where legally required, and at Otsuka’s expense, to pursue any and all remedies against such infringer to stop such infringement and to recover profits and damages. In any such case, BMS shall be entitled, at its own expense, to join as a party in pursuing such remedies, if legally permissible. Should BMS’s direct participation in the legal proceedings be indispensable (i.e., it is not legally permissible for Otsuka to pursue remedies in BMS’s name), Otsuka shall be entitled to request BMS, at Otsuka’s expense, to pursue remedies (which request BMS shall not unreasonably refuse). Otsuka shall promptly reimburse BMS for BMS’s out-of-pocket expenses (but not BMS’s internal costs) reasonably incurred in so participating.
(ii) BMS shall cooperate with Otsuka as reasonably requested by Otsuka in connection with such action, dispute or proceeding commenced by Otsuka in accordance with this Subsection 8.2.3(b), shall cause any of BMS’s and its Affiliates’ and Sublicensees’ employees and agents to give depositions or testify when requested by Otsuka, and shall make available to Otsuka copies of any and all relevant records, papers, documents, information and specimens. Otsuka shall promptly reimburse BMS on an ongoing basis for BMS’s out-of-pocket expenses (but not BMS’s internal costs) reasonably incurred in providing such cooperation to Otsuka at Otsuka’s request, in causing such employees and agents to give such depositions or testimony, and in making available copies of such documents or other materials.
(iii) In all cases where Otsuka pursues remedies against the infringement, threatened infringement or suspected infringement of the Patent Rights as permitted in this Subsection 8.2.3(b), except where BMS elects, at its expense, to join as a party, Otsuka shall have the sole and exclusive right to control prosecution of such action and the right (notwithstanding Section 8.2.1) to settle and compromise such action, dispute or proceeding without BMS’s consent; provided that (A) Otsuka shall keep BMS fully informed on an ongoing basis with respect to such action, dispute or proceeding and any related settlement or compromise discussions; and (B) Otsuka may not enter into any Settlement Requiring BMS Consent (as defined above in Section 8.2.2(a)(ii)), without the prior written consent of BMS, which BMS shall not unreasonably withhold. In the event
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* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
of any monetary recovery in connection with such action, dispute or proceeding brought by Otsuka pursuant to this Subsection 8.2.3(b), or the settlement or compromise thereof, such recovery shall be applied in the following priority: first, to reimburse Otsuka for its Total Out-of-Pocket Expenses reasonably incurred in prosecuting such action; second, to reimburse BMS for its Total Out-of-Pocket Expenses reasonably incurred in connection with such action to the extent not previously reimbursed by Otsuka to BMS; and third, the balance to be shared [*] to Otsuka and [*] to BMS.
(iv) In the event any adverse judgment for monetary liability is imposed on either BMS or Otsuka or both (and/or any of their respective Affiliates) in favor of a third-party litigant in any such action, dispute or proceeding commenced in accordance with this Subsection 8.2.3(b), Otsuka shall bear [*] and BMS shall bear [*] of such judgment, regardless of the name of the party against which such judgment is imposed.
8.2.4 Certain Disclaimers .
As between BMS and Otsuka (including their respective Affiliates), (a) neither BMS nor Otsuka, as the case may be, shall have or make any claim or cause of action against the other party in such other party’s capacity as the Active Party, under this Agreement or otherwise, or commence any suit, arbitration or other proceeding against the Active Party, based on, related to or arising out of (i) the Active Party’s conduct, performance or non-performance in response to any alleged or suspected infringement of the Patent Rights: (ii) the enforcement or non-enforcement of the Patent Rights; (iii) the pursuit or non-pursuit of remedies in connection therewith or (iv) any action, dispute, litigation or other legal or regulatory proceeding(s) related to any of the matters referred to in (i), (ii) or (iii) above, or the settlement or compromise of any such action, dispute, litigation or other legal or regulatory proceeding(s); and (b) neither BMS nor Otsuka, as the case may be, in its capacity as the Active Party, shall incur any liability to the other party as a consequence of any such action, dispute, litigation or other proceeding or any unfavorable decision resulting therefrom (including any decision holding any of the Patent Rights invalid or unenforceable), in each case except only to the extent any such claim, cause of action, suit, arbitration or other proceeding is based upon the Active Party’s gross negligence or willful misconduct. The foregoing provisions of this Section 8.2.4 shall be without prejudice to, and shall not limit, any obligation on the part of the Active Party to inform, involve or otherwise include the Inactive Party, to obtain the Inactive Party’s approval or consent, or to reimburse or otherwise to pay the Inactive Party, in each case as and to the extent provided in this Section 8.2. For the avoidance of doubt, the Active Party’s discretionary decision whether to pursue or not pursue an alleged or suspected infringer of the Patent Rights, how to pursue such infringer if it elects to do so, or whether or not to settle or compromise with any such infringer, or on what basis, shall not be a basis upon which the Inactive Party shall be entitled to claim that the Active Party was grossly negligent or engaged in willful misconduct.
In addition, the foregoing provisions of this Section 8.2.4 shall, mutatis mutandis, operate to limit any obligations or liabilities that Otsuka may have to BMS, and any
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claims or causes of action BMS may have against Otsuka, arising from the reexamination of the Patent Rights or the outcome thereof.
IN WITNESS WHEREOF, each of the parties has caused this Amendment No. 3 to be executed and delivered by its duly authorized officer as of the day and year first above written.
| B RISTOL -M YERS S QUIBB C OMPANY | O TSUKA P HARMACEUTICAL C O ., L TD . | |||||||
| By: |
/s/ Sandra Leung |
By: |
/s/ Yoshio Tanabe |
|||||
| Name: | Sandra Leung | Name: | Yoshio Tanabe | |||||
| Title: | VP & Secretary | Title: | Operating Officer & Director | |||||
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Exhibit 10.14
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SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 5
TO THE
RESTATED DEVELOPMENT AND COMMERCIALIZATION
COLLABORATION AGREEMENT
THIS AMENDMENT NO. 5 (“ Amendment ”) to that certain Restated Development and Commercialization Collaboration Agreement dated October 23, 2001 (“ Restated Agreement ”), effective as of April 4, 2009 (“ Amendment Effective Date ”), is by and between Otsuka Pharmaceutical Co., Ltd. (“ Otsuka ”), a corporation organized and existing under the laws of Japan, having a principal place of business at Shinagawa Grand Central Tower, 2-16-4 Konan, Minato-Ku, Tokyo, 108-8242 Japan, and Bristol-Myers Squibb Company (“ BMS ”), a corporation organized and existing under the laws of Delaware, having a principal place of business at Route 206 and Province Line Road, Princeton, New Jersey, 08540, USA.
RECITALS
WHEREAS, Otsuka and BMS have previously entered into the Restated Agreement and an Amendment No. 1 (dated March 28, 2003), an Amendment No. 2 (dated June 5, 2003), an Amendment No. 3 (dated September 25, 2006) and an Amendment No. 4 (dated October 31, 2007), to the Restated Agreement (all such amendments, the “ Prior Amendments ”);
WHEREAS, Otsuka and BMS now desire to further amend and supplement certain terms and conditions of the Restated Agreement (as previously amended) as hereinafter specified;
WHEREAS, Otsuka and BMS desire that all other terms and conditions of the Restated Agreement (as previously amended) remain in full force and effect except to the extent amended by this Amendment;
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Otsuka and BMS agree as follows:
1. Capitalized terms in this Amendment shall have the same meaning as those in the Restated Agreement, unless specifically defined otherwise in this Amendment. All Section references are in regard to the Restated Agreement. References to the term “Agreement” in the Restated Agreement shall be deemed to include the Prior Amendments and this Amendment.
2. Except as expressly modified herein, the Restated Agreement shall remain in full force and effect in accordance with its terms, as previously amended. To the extent that there are any inconsistencies between this Amendment and the Restated Agreement, as previously amended, the terms of this Amendment shall supersede the Restated Agreement.
3. Extension of BMS’ Rights and Obligations . In accordance with Section 12.1 of the Restated Agreement, BMS’ rights under the Restated Agreement in the United States would (but for this Amendment) expire on the tenth calendar anniversary of the date of First Commercial Sale of Product in the United States, which is November 19, 2012. The Parties hereby agree in this Amendment, on the terms and conditions set forth herein, to amend Section 12.1 of the Restated Agreement, as it relates to the term of the Restated
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Agreement in the United States, to extend BMS’ rights and obligations (which rights and obligations BMS may exercise or perform by or through one or more of its Affiliates) under the Restated Agreement to develop and Commercialize Product in the United States and to manufacture Product for sale in the United States until April 20, 2015, subject to earlier termination in accordance with Paragraph 10 or Paragraph 12 of this Amendment or Section 12 of the Restated Agreement. The “U.S. Abilify Extension Term,” as used in this Amendment, means the period commencing on January 1, 2010, and ending April 20, 2015; provided that such period may terminate sooner in accordance with Paragraph 10 or Paragraph 12 of this Amendment; provided further , that if the Restated Agreement terminates early in accordance with the provisions of Section 12 of the Restated Agreement, such period shall also terminate upon the date of termination of the Restated Agreement.
4. Up-Front Extension Payment . In consideration of Otsuka’s agreement in this Amendment to extend the term of BMS’ rights to develop, Commercialize, and manufacture Product for the United States during the U.S. Abilify Extension Term, BMS (itself or through one or more Affiliate(s) of BMS) shall pay, in the aggregate, an up-front payment of Four Hundred Million U.S. Dollars (U.S. $400,000,000) to Otsuka within five (5) Business Days subsequent to the Amendment Effective Date of this Amendment. If one or more of BMS’ Affiliate(s) shall make such payment to Otsuka, BMS shall so notify Otsuka on or about the Amendment Effective Date and shall identify the Affiliate(s) that shall be making such payment. Such amount is non-refundable and non-creditable against any other payments due from BMS to Otsuka.
5. Modifications to Otsuka’s and BMS’ Shares of Product Net Sales in the U.S. During the U.S. Abilify Extension Term .
(a) Background . Under the terms of the Restated Agreement (as amended) prior to this Amendment, the basic allocation of Net Sales of Product in the United States is sixty-five percent (65%) to BMS and thirty-five percent (35%) to Otsuka, allocated as follows:
(i) as provided in Section 5.9.1(a), Otsuka or an Otsuka Affiliate receives [*] of Net Sales in the United States;
(ii) as provided in Section 5.11.2(a)(3), Otsuka or an Otsuka Affiliate pays BMS or a BMS Affiliate [*] of Net Sales in the United States for finished and packaged Product sold to Otsuka’s Affiliates for sale in the United States (under the BMS-OAPI Product Supply Agreement); and
(iii) as provided in Section 5.11.2(a)(1), BMS and its Affiliates pay Otsuka [*] for Compound sold by Otsuka to BMS or BMS’ Affiliates (under the Otsuka-BMS Compound Supply Agreement) for formulation into Product sold in the United States.
The result of these transactions is a split of Net Sales in the United States of sixty-five percent (65%) to BMS and thirty-five percent (35%) to Otsuka.
(iv) In addition to the foregoing 65/35 split, and in accordance with Section 5.9.2(b) of the Restated Agreement, BMS, through one of its Affiliates, pays Otsuka a royalty equal to an additional [*] on all Net Sales in the United
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States attributable to or arising from the sale of any and all Product made by BMS or its Affiliates.
(b) Modified Allocation of Net Sales in the United States between Otsuka and BMS During the U.S. Abilify Extension Term . The Parties hereby agree in this Amendment that, effective January 1, 2010, the apportionment of Net Sales in the United States between Otsuka and BMS shall change as follows:
(i) in calendar year 2010, fifty-eight percent (58%) of Net Sales in the United States shall be allocated to BMS (instead of sixty-five percent (65%)) and forty-two percent (42%) of Net Sales in the United States shall be allocated to Otsuka (instead of thirty-five percent (35%));
(ii) in calendar year 2011, fifty-three and one half percent (53.5%) of Net Sales in the United States shall be allocated to BMS and forty-six and one half percent (46.5%) of Net Sales in the United States shall be allocated to Otsuka;
(iii) in calendar year 2012, fifty-one and one half percent (51.5%) of Net Sales in the United States shall be allocated to BMS and forty-eight and one half percent (48.5%) of Net Sales in the United States shall be allocated to Otsuka; and
(iv) in calendar years 2013 and 2014 and that portion of calendar year 2015 that extends through the end of the U.S. Abilify Extension Term (April 20, 2015), Net Sales in the United States shall be allocated between Otsuka and BMS according to the following tiering structure, the amount of Net Sales and the allocation thereof between BMS and Otsuka being determined on a calendar year-by-calendar year basis:
|
2013-2015 Annual Net Sales Tiers |
% of Net Sales
in Tier to BMS |
% of Net Sales
in Tier to Otsuka |
||||
|
$0 – $2,700,000,000 |
50 | % | 50 | % | ||
|
$2,700,000,001 – $3,200,000,000 |
20 | % | 80 | % | ||
|
$3,200,000,001 – $3,700,000,000 |
7 | % | 93 | % | ||
|
$3,700,000,001 – $4,000,000,000 |
2 | % | 98 | % | ||
|
$4,000,000,001 – $4,200,000,000 |
1 | % | 99 | % | ||
|
In excess of $4,200,000,000 |
20 | % | 80 | % |
(v) For the avoidance of doubt, and as required by Section 5.9.2(b) of the Restated Agreement, BMS shall continue during the U.S. Abilify Extension Term to pay Otsuka the [*] royalty on all Net Sales in the United States attributable to or arising from the sale of any and all Product made by BMS or its Affiliates, which amount shall be in addition to Otsuka’s share of Net Sales as provided above. The Parties agree to effect promptly an amendment to the Restated Agreement and/or the applicable manufacturing agreement(s) between Otsuka (or its applicable Affiliate) and BMS (or its applicable Affiliate) relating to BMS’ manufacturing of Product in standard tablet (swallowable) form for Otsuka for sale in the United States to provide that Otsuka does not
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have the right to terminate such manufacturing rights during the U.S. Abilify Extension Term except in the case of: material breach by BMS; or (as provided in Section 12.4(b) and Section 8.4 of the Restated Agreement) [*]; or the Commercialization by BMS (or any of its Affiliates, licensees or sublicensees) of a U.S. Competitive Product (as defined in Paragraph 11(c) below) in violation of Paragraph 11 of this Amendment; or the early termination of this Amendment or the Restated Agreement in accordance with Paragraph 3 above.
6. Modified Payment Procedures and Purchase Prices in the United States . Section 5.9.3 of the Restated Agreement and Appendix G to the Restated Agreement (which appendix is incorporated into the Restated Agreement as Exhibit 1 to Amendment No. 1) set forth principles and procedures agreed upon by the Parties for collecting, depositing and disbursing Product sales proceeds. Such procedures remain in effect, subject to modification from time to time by mutual written agreement of the Parties consistent with the agreed principles stated in Section 5.9.3. In addition, the Parties shall discuss and amend the purchase prices for Compound and Product set forth in Section 5.11.2(a) by mutual written agreement as they mutually deem appropriate in light of the changed allocations between them of Net Sales in the United States specified above in Paragraph 5 of this Amendment.
7. Commercial Operations in the United States . BMS and Otsuka hereby agree that, commencing January 1, 2010, and for the remainder of the U.S. Abilify Extension Term, the Parties’ specific performance and payment obligations with respect to the advertising, marketing, promotion, sales, distribution of, and provision of medical education for, Product in the United States (“ Commercial Operations ”) shall be as set forth in subparagraphs (a) through (i) of this Paragraph 7.
(a) Definitions . For purposes of this Amendment, the following terms shall have the definitions set forth below:
(i) “Operational Expenses” means the following costs and expenses solely to the extent specifically and directly attributable to conducting Commercial Operations with respect to Product in the U.S. during the U.S. Abilify Extension Term: (i) Commercial Costs; (ii) Distribution Costs; (iii) Medical Education Activities Costs; and (iv) Indirect Costs. For clarity, Operational Expenses shall not include, for example (but without limitation), (1) expenses related to supply, manufacturing, pharmacovigilance, post-marketing surveillance, or Product recall or (2) any allocation of overhead or general and administrative costs. For clarity, each party will bear its own general and administrative expenses, except to the extent that such expenses are included in the FTE Rate for MRs and/or MSLs. In addition, any particular cost or expense meeting any of the criteria set forth above to be included in “Operational Expenses” shall be counted only once in calculating total Operational Expenses for a particular period, notwithstanding that such cost or expense meets or falls within more than one of such criteria.
(ii) “Commercial Costs” means the direct costs that are specifically identifiable to the following sales, marketing and education activities of the Parties relating to Product in the U.S.: (a) activities directed to the advertising and marketing of such Product; (b) launch meetings; (c) costs of advertising, public relations and medical education agencies;
(d) promotional programs and “lunch and learn” meetings; (e) speaker programs, including
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the training of such speakers; (f) development, publication and dissemination of publications relating to such Product; (g) developing, obtaining and providing training packages of such Product, promotional literature, promotional materials and other selling materials; (h) developing and performing market research; (i) developing information and data specifically intended for national accounts, managed care organizations and group purchasing organizations, including reimbursement programs; (j) administration, operation and maintenance of the sales representatives (“ Medical Representatives ” or “ MRs ”) that promote Product in the United States, district and regional sales management, home office personnel who support the sales force, all as included in the FTE Rate; (k) conducting Phase IV Clinical Trials on Product in the U.S.; (l) conducting advisory board meetings or other consultant programs, the purpose of which is to obtain advice and feedback related to the development or commercialization of such Product in the U.S.; and (m) other ancillary services directly related to the foregoing (to the extent not otherwise falling within subparagraphs 7(a)(ii)(a) through (l) above).
(iii) “Distribution Costs” means, with respect to a Product sold in the United States during the U.S. Abilify Extension Term, all direct internal costs and out of pocket costs incurred by BMS or its Affiliates in connection with the following activities involved in distribution of such Product to a Third Party: (i) handling and transportation to fulfill orders (excluding such costs, if any, treated as a deduction in the definition of Net Sales); (ii) customer services, including order entry, billing and adjustments, inquiry and credit and collection; and (iii) direct cost of storage and distribution of the Product.
(iv) “Medical Education Activities Costs” means the direct costs incurred in conducting the following activities designed to ensure or improve appropriate medical use of, conduct medical education of, or further research regarding, a Product sold in the U.S.: (a) maintaining MSLs (as defined below); and (b) development, publication and dissemination of publications relating to such Product in the U.S., as well as medical information services provided in response to inquiries communicated via sales representatives or received by letter, phone call or email.
(v) “Phase IV Clinical Trial” means a product support clinical trial of Product conducted in the United States during the U.S. Abilify Extension Term. A Phase IV Clinical Trial may include epidemiological studies, modeling and pharmacoeconomic studies, and investigator-sponsored clinical trials studying Product that otherwise fit the foregoing definition.
(vi) “FTE Rate” is as defined on Exhibit 2 .
(vii) “Indirect Costs” is as defined on Exhibit 2 .
(b) Baseline Commercial Plan . BMS and Otsuka have agreed on baseline annual performance obligations to be fulfilled by the Parties (or their respective Affiliates) with respect to Commercial Operations in the United States commencing January 1, 2010, including the annual number of Medical Representatives and Medical Science Liaisons (“ MSLs ”) and annual detailing requirements, and on baseline annual expenses to be incurred by the Parties (or their respective Affiliates) for Commercial Operations in the United States commencing January 1, 2010. Such baseline annual performance obligations and baseline annual operating expenses are set forth in a
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written plan mutually agreed by the Parties (the “ Baseline Commercial Plan ”), which plan is attached as Exhibit 1 to this Amendment and is hereby incorporated into the Restated Agreement as Appendix H thereto.
(c) Annual Commercial Plan . At least three (3) months prior to January 1 of each calendar year during the U.S. Abilify Extension Term, commencing prior to calendar year 2010, the JCC (or an Operational Team designated by the JCC) shall consider, modify as it deems appropriate, and approve by mutual agreement a written plan setting forth the Commercial Operations performance obligations and operating expenses for the upcoming calendar year in the United States (the “ Annual Commercial Plan ”). It is understood by the Parties that BMS will continue to perform all Commercial Operations activities, except that Otsuka shall deploy MRs and MSLs (together with BMS, as set forth herein), and shall perform any other Commercial Operations activities agreed by the JCC (in which case the allocation between the Parties of responsibility for performing a particular item or activity will be set forth in the Annual Commercial Plan). The Annual Commercial Plan shall specify the aggregate number of MRs and MSLs to be deployed by the Parties in the United States and the total minimum detailing requirements to be fulfilled by the Parties in the United States for the upcoming calendar year (the “ Annual Resource Commitment ”) and shall include a detailed budget for the operating expenses to be incurred by the Parties (in the aggregate, and also broken down to specific budgets for the individual categories of Commercial Operations covered by the Annual Commercial Plan) in connection with Commercial Operations in the United States for the upcoming calendar year (the “ Annual Commercial Expense Budget ”). For clarity, each Annual Commercial Plan (and any amendment or modification to any Annual Commercial Plan or any part thereof), including the allocation of responsibilities between the Parties with respect to Commercial Operations activities, must be approved by mutual agreement of the JCC (with neither Party having a tie-breaking vote with regard to approval of any Annual Commercial Plan). If the JCC is unable to agree upon and approve the Annual Commercial Plan for any calendar year during the U.S. Abilify Extension Term, then the Baseline Commercial Plan attached as Exhibit 1 to this Amendment shall govern the Parties’ obligations and the total expense budget with respect to Commercial Operations in the United States for such year, and the aggregate number of MRs and MSLs to be deployed by the Parties in the United States and the total detailing requirements to be fulfilled by the Parties in the United States set forth in the Baseline Commercial Plan shall be deemed to be the Annual Resource Commitment for such calendar year, and the aggregate expense budget set forth in the Baseline Commercial Plan shall be deemed to be the Annual Commercial Expense Budget for such year. From time to time during any such calendar year, the JCC may agree to modify or amend the Annual Resource Commitment and/or the Commercial Expense Budget for such year. Notwithstanding Section 5.1.2 of the Restated Agreement (as amended by this Amendment), neither the BMS Chair nor the Otsuka Chair of the JCC shall have the tie-breaking vote with respect to establishing any Annual Commercial Plan or modifying any Annual Resource Commitment or Commercial Expense Budget, which must be mutually agreed to by Otsuka’s Chair and BMS’ Chair on the JCC. For the avoidance of doubt, the JCC shall continue to have final authority and responsibility for development of the Marketing Plans in accordance with Section 5.2 of the Restated Agreement, and each Annual Commercial Plan and the Baseline Commercial Plan shall form part of the Marketing Plans for the United States; provided that, in the event of any inconsistency between the terms of any Marketing Plan and the terms of the Baseline Commercial Plan or any Annual Commercial Plan, the terms of the Baseline Commercial Plan or Annual Commercial Plan (as the case may be) shall govern.
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(d) Otsuka Promotional Efforts . Without limiting its right under Paragraph 7(g) to contribute additional resources (at its expense), Otsuka (or its Affiliate) shall have the right during the period commencing January 1, 2010, and ending June 30, 2014, to deploy [*] MRs and [*]MSLs in the United States in each such year, with the FTE Rates and Indirect Costs (as provided in Exhibit 2 to this Amendment) associated with such MRs and MSLs being allocable between the Parties as Operational Expenses.
At the time the JCC considers the Annual Commercial Plan for each calendar year during the U.S. Abilify Extension Term, and in any event at least six (6) months prior to January 1 of each year during the U.S. Abilify Extension Term, Otsuka shall determine in its discretion, and shall inform BMS of, the number of MRs and MSLs (up to the maximum numbers set forth above in this subparagraph (d)) that Otsuka (or its Affiliate) shall deploy during the upcoming calendar year. The actual number of MRs and MSLs and details that Otsuka commits to deploy in a particular calendar year during the U.S. Abilify Extension Term is referred to in this Amendment as Otsuka’s “ Required Resource Commitment ” for such year. In each calendar year during the U.S. Abilify Extension Term, Otsuka shall fulfill its Required Resource Commitment for such year, and BMS shall fulfill the balance of the Annual Resource Commitment for such year, which shall be the difference between such Annual Resource Commitment and Otsuka’s Required Resource Commitment for the year (such remainder being BMS’ “ Required Resource Commitment ” for such year). Each Party’s Required Resource Commitment for each calendar year during the U.S. Abilify Extension Term shall be set forth in the Annual Commercial Plan for such calendar year.
As provided in greater detail in Exhibit 3 to this Amendment, each Party’s MRs shall be assigned an equitable share of valuable, productive accounts and an equitable share of responsibility for opinion leaders, large accounts and other more desirable accounts and prescribers.
The JCC shall consult in good faith regarding, and shall mutually determine (with neither Party having a tie-breaking vote), a reasonable plan and budget, with a duration of no more than ninety (90) days (the “[*] Plan ”), for the [*] pursuant to this subparagraph (d). The [*] Plan shall also plan for [*]. In making [*] during such transition, the Parties acknowledge that such transition will involve disruption of [*] with respect to Product, but they shall work cooperatively to minimize such disruption and to achieve an efficient and cost-effective transition, and in manner consistent with the ultimate achievement of the above-described equitable allocation of responsibility. The [*] Plan shall be deemed to be an amendment to the applicable Annual Commercial Plan, including the associated Annual Commercial Expense Budget. The Parties acknowledge that such agreed transition arrangements may result in the inclusion in such Annual Commercial Plan and Annual Commercial Expense Budget, and the charging by either or both Parties of, Operational Expenses for [*] with respect to the Product, during the limited period of such transition, than would otherwise have been the case had Otsuka not exercised its right to deploy MRs pursuant to this subparagraph (d).
(e) Co-Promotion Agreement . In furtherance of the terms and conditions set forth in this Paragraph 7, the Parties shall enter into a co-promotion agreement (the “Co-Promotion Agreement” ) to be negotiated in good faith by the Parties and entered into within one hundred
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twenty (120) days subsequent to the Amendment Effective Date. The Co-Promotion Agreement will include the specific terms set forth in Exhibit 3 to this Amendment, along with additional commercially reasonable terms and conditions customary in the industry for an agreement of this type. In the event of any inconsistency between the terms of this Amendment and the terms of the Co-Promotion Agreement, the terms of this Amendment shall prevail (unless the Co-Promotion Agreement specifically states otherwise).
(f) Allocation and Payment of Operational Expenses .
(i) Each Annual Commercial Expense Budget shall itemize the Operational Expenses to be incurred by the Parties in the applicable calendar year, in a detailed manner with respect to each different category of Commercial Operations, including (without limitation) costs of Product-related sales and promotional literature, materials and supplies, costs of advertisements and press materials, costs of educational symposia, conferences and programs, and the cumulative cost of both Parties’ direct expenses for MRs and MSLs (on an FTE basis) budgeted to be incurred in fulfilling each Party’s Required Resource Commitment in the calendar year.
(ii) It is understood and agreed by the Parties that (A) all costs associated with the Parties’ MRs and MSLs are included in the FTE Rates and Indirect Costs set forth on Exhibit 2 , and (B) costs associated with Otsuka’s employees other than MRs and MSLs shall be included in Commercial Operational Expenses only if and to the extent such other Otsuka employees will be performing Commercial Operation activities as provided in any Annual Commercial Plan or as otherwise agreed by the JCC. For clarity, each Party shall bear its own costs of recruiting, relocation and severance relating to MRs and MSLs, and such costs shall not be included in the FTE Rate for MRs or MSLs or Commercial Operational Expenses.
(iii) Each Party shall provide bonuses and/or other incentive compensation to its MRs so as to encourage appropriate maximization of Product sales.
(iv) During each calendar year commencing January 1, 2010, and ending December 31, 2012, Otsuka shall pay thirty percent (30%) and BMS shall pay seventy percent (70%) of the total annual Operational Expenses incurred by the Parties in the United States during the applicable year up to, but not exceeding (except as approved by the JCC, with neither Party having the tie-breaking vote), the total amount set forth in the Annual Commercial Expense Budget for the applicable calendar year (as such budget may be amended by the Sales Force Transition Plan described in subparagraph (d) above), regardless of whether Otsuka’s Required Resource Commitment in a given calendar year is greater or less than thirty percent (30%) of the Annual Resource Commitment in such year.
(v) During each calendar year commencing January 1, 2013, and ending on the expiration or termination of the U.S. Abilify Extension Term, Otsuka and BMS shall each pay fifty percent (50%) of the total annual Operational Expenses incurred by the Parties in the United States for the applicable calendar year up to, but not exceeding (except as approved by the JCC, with neither Party having the tie-breaking vote), the total amount set forth in the Annual Commercial Expense Budget during the applicable calendar year (as such budget may be amended by the Sales Force Transition Plan described in subparagraph (d) above), regardless of whether Otsuka’s Required Resource Commitment in a given calendar
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year is greater or less than fifty percent (50%) of the Annual Resource Commitment in such year.
(g) Additional Expenses . Either Party may, in its discretion, contribute more than its Required Resource Commitment in any calendar year (i.e., either BMS or Otsuka may deploy
more MRs and/or may increase its detailing of Product over and above the obligations set forth in the Annual Commercial Plan (or Baseline Commercial Plan, as the case may be)), and either Party may invest in or conduct additional Commercialization activities that are not included in the applicable Annual Commercial Plan and thus incur associated Operational Expenses in excess of the applicable Annual Commercial Expense Budget (as set forth in subparagraph (c) above) (“ Additional Expenses ”), provided that the JCC reviews and approves such activities and associated Additional Expenses in order to facilitate appropriate coordination of sales calls and consistency with the overall marketing effort of the then-current Marketing Plan (such approval not to be unreasonably withheld or delayed). Additional Expenses incurred by a Party in a calendar year shall be borne one hundred percent (100%) by such Party.
(h) Cost Overruns or Reallocations . If a Party anticipates that, in conducting Commercial Operations activities in the United States, it shall incur Operational Expenses that are in excess of [*] over the amount budgeted for a particular category in the Annual Commercial Expense Budget (i.e., the Patient, Payor, or Professional category), or where a shift in expenses from one such category to another would result in a reallocation between such categories of over [*] in the applicable Annual Commercial Expense Budget, then such Party shall inform the other Party of such anticipated cost overrun or reallocation as soon as possible, and the JCC will meet and discuss the causes of such overrun or reallocation and whether to modify the Annual Commercial Expense Budget to address such possible overrun or reallocation, including the re-allocation of certain expenses in such Annual Commercial Expense Budget from other activities to the activity that is the subject of any such excess, but in any case, with the goal of keeping the aggregate Annual Commercial Expense Budget unchanged (unless the Parties otherwise agree).
(i) Payment of Operational Expenses . Following the Amendment Effective Date, the Parties shall discuss and agree upon reasonable procedures for paying, reimbursing and/or reconciling the Operational Expenses to be incurred and paid by each Party according to the above subparagraphs of this Paragraph 7, which procedures are intended to ensure that each Party will incur and bear its appropriate allocation (as set forth in subparagraph (f) above) of the Annual Commercial Expense Budget for the particular calendar year. Such procedures shall be subject to modification from time to time by mutual written agreement of Otsuka and BMS, as needed or appropriate to ensure accurate and efficient sharing of the Operational Expenses incurred in accordance with the terms of this Paragraph 7.
(j) Amendment of Restated Agreement . The following provisions of the Restated Agreement are hereby amended to the extent necessary to give effect to subparagraphs (a) through (i) above and Exhibit 3: Section 5.2 (Marketing Plans); Section 5.3.1(d) (references to BMS’ sole cost); Section 5.3.2(b) (references to BMS’ obligations, at its sole cost, to prepare advertising and promotional materials and implement marketing and promotional activities and strategies); Section 5.3.3(a) (second sentence); Section 5.3.4 (first paragraph and subsections (a), (b), (e) – (g) as such subsections pertain to reimbursement of Otsuka’s direct expenses incurred in the United States); Section 5.3.5 (Sales Team Assignments) (the sixth, seventh, eighth and ninth
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sentences); Section 5.3.8 (Exchange of Marketing Information); and Section 5.6 (first sentence). Except as so amended, each Party’s respective rights and obligations under the Restated Agreement (as amended) regarding Commercialization of Product in the United States and throughout the Territory remain in full force and effect.
(k) Records and Audits . Each Party shall keep (and cause its Affiliates to keep) complete and accurate books, records and accounts reflecting all Operational Expenses incurred by such Party in the U.S., as are required to determine, in a manner consistent with GAAP and this Agreement, the sums or credits due under this Paragraph 7 of this Amendment. All such books, records and accounts shall be retained by such Party until the later of (a) three (3) years after the end of the period to which such books, records and accounts pertain and (b) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by applicable law. Each Party shall have the right to have an independent certified public accountant, reasonably acceptable to the audited Party, to have access during normal business hours, and upon reasonable prior written notice, to examine only those books, records and accounts of the audited Party (and its Affiliates) as may be reasonably necessary to determine, with respect to any calendar year ending not more than three (3) years prior to such Party’s request, the correctness or completeness of any report, payment or reconciliation made under this Paragraph 7 with respect to the incurrence, payment and allocation of Operational Expenses in the United States The foregoing right of review may be exercised only once per year and only once with respect to each such periodic report and payment. Results of any such examination shall be: (a) limited to information relating to Product in the United States; (b) made available to both Parties; and (c) subject to Section 10.1 of the Restated Agreement (Confidentiality). The Party requesting the audit shall bear the full cost of the performance of any such audit, unless such audit discloses a variance to the detriment of the auditing Party of more than five percent (5%) from the amount of the original report, reconciliation or payment calculation, in which case the audited Party shall bear the full cost of the performance of such audit. The results of such audit shall be final, absent manifest error.
8. JCC Decision Making . BMS and Otsuka agree that, commencing January 1, 2013, and for the remainder of the U.S. Abilify Extension Term, Otsuka shall designate one of its JCC members to be Chair of the JCC, BMS shall designate one of its JCC members to be Co-Chair of the JCC and, in the event of a tie vote on the JCC regarding a matter relating to Commercialization of Product in the United States, and other matters within the authority of the JCC for activities in the U.S., the vote of the Chair designated by Otsuka shall prevail; provided , that (a) neither Party shall have final decision-making authority (but the Parties shall act by mutual agreement) with respect to matters relating to pricing or discounting of Product or key messaging to key customer groups ( i.e., physicians, payors and patients), and (b) neither the Otsuka Chair, the JCC nor any Marketing Plan approved by the JCC may impose additional expenses or obligations on BMS or its Affiliates beyond those specified in the Baseline Commercial Plan without the prior written consent of BMS. Section 5.1.2 of the Restated Agreement and any other provisions in the Restated Agreement that refer to the tie-breaking authority of BMS (such as Section 5.1.4(k)) are hereby amended to the extent necessary to give effect to this Paragraph 8.
9. Co-Promotion in Canada and the Nordic Countries .
(a) Co-Promotion in Canada . Otsuka shall have the right, from time to time, to elect to provide [*] of the total number of MRs in Canada (without requiring BMS’ consent, except in the one instance described below); provided that: (i) any such election by
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Otsuka to co-promote in Canada shall be made no later than thirty (30) days subsequent to a determination by the JCC to increase the number of MRs deployed in Canada, with the first such instance being the determination by the JCC to deploy a total of [*] MRs in Canada; however, notwithstanding the foregoing, if, the first time subsequent to initial launch of Product in Canada, the JCC decides to increase the number of MRs in Canada to a total of less than [*] MRs, then, with BMS’ consent, Otsuka shall have the right to deploy all or part of such incremental number of MRs; (ii) in no case shall the number of Otsuka’s MRs deployed as a result of such election exceed (A) [*] of the total number of MRs the JCC determines to deploy in Canada or (B) [*] of MRs in Canada that is made by the JCC in connection with such determination; (iii) such Otsuka MRs shall be deployed in a manner consistent with a commercialization plan for Canada determined by the JCC and consistent with subparagraph (c) below; and (iv) costs associated with such MRs shall be borne by BMS and paid to Otsuka at an FTE rate agreed by the JFC, which shall be determined by reference to (and shall in no event be less than) the BMS FTE rate for BMS MRs in Canada (which rate shall cover all direct costs of such MRs, including allocation of costs of management and related functions for operating the MR sales force that are not otherwise provided by BMS). As an example, if BMS had [*] MRs in Canada and the JCC decided to add [*] more MRs (for a total of [*] MRs) in Canada, Otsuka would have the right at such time to provide [*] of the additional [*] MRs to be deployed in Canada at such time ([*]), and BMS would provide the balance.
(b) Co-Promotion in Nordic Countries . Otsuka shall have the right to provide [*] MRs, on a country-by-country basis, that are included in any commercial plan for Finland, Norway, Sweden and/or Denmark (collectively, the “Nordic Countries” ), upon twelve (12) months advance written notice to BMS (on a country-by-country basis); provided that (i) such MRs shall be deployed in a manner consistent with the commercialization plan for the applicable Nordic Country determined by the JCC and consistent with subparagraph (c) below, and (ii) the cost of any such MRs shall be borne by Otsuka.
(c) Co-Promotion Agreements for Canada and the Nordic Countries . In furtherance of the terms and conditions set forth in subparagraphs (a) and (b) above, the Parties or their respective Affiliates shall enter into co-promotion agreements covering the co-promotion activities contemplated by such subparagraphs, such agreements to be negotiated in good faith by the Parties and entered into (i) in the case of Canada, within one hundred twenty (120) days subsequent to the Amendment Effective Date and/or (ii) with respect to any given Nordic Countries, no later than hundred twenty (120) days subsequent to Otsuka’s election to co-promote in such Nordic Country, which agreements shall include provisions to implement the terms generally as set forth in this Paragraph 9 and applicable provisions in Exhibit 3 to this Amendment (including, without limitation, those pertaining to equitable assignment of the Parties’ sales forces and the training of Otsuka’s MRs), along with additional commercially reasonable terms and conditions customary in the industry for agreements of this type.
10. Termination for Generic Entry in the United States .
(a) Definitions :
(i) “Generic Sales” means that there are sales of Generic Product to customers (including distributors, retailers, managed care entities, government entities or patients in the United States for FDA-approved use in the Field.
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(ii) “Generic Product” means a pharmaceutical product [*] that is sold by a Third Party in the United States pursuant to either (A) [*], or (B) [*].
(iii) “Date of Generic Sales” means the date that Generic Sales first commence in the United States.
(iv) “Generics Termination” is as defined in Paragraph 10(b) below.
(b) BMS Right of Termination . If there are ongoing Generic Sales during the U.S. Abilify Extension Term, and such Generic Sales have not been caused to cease by issuance of a temporary restraining order or preliminary injunction (or other similar order), or have not otherwise discontinued, within [*] subsequent to the Date of Generic Sales (unless Otsuka agrees to a shorter period), then, on written notice delivered to Otsuka no later than [*] after the date that is the end of the foregoing [*] period (or such shorter period if Otsuka has agreed), BMS may terminate its rights in the United States under this Amendment during the U.S. Abilify Extension Term (“ Generics Termination ”), such termination to be effective upon Otsuka’s receipt of such notice.
(c) Consequences of Generics Termination . Upon Generics Termination, the following shall occur:
(i) Paragraphs 3, 5(b), 6, 7, 11, 12, 13 and 16 of this Amendment will automatically terminate on the effective date of the Generics Termination (except that such termination shall not release a Party from any liability or obligation that already has accrued under such Paragraphs prior to such termination), and the Parties’ rights and obligations in the United States thereafter with respect to Product shall be as stated in the Restated Agreement, as amended prior to this Amendment, but subject to the other provisions of this subparagraph (c) and to the surviving provisions of this Amendment (to the extent applicable to the United States). For the avoidance of doubt, the other Paragraphs in this Amendment not specified above shall continue in full force and effect and shall not be terminated upon Generics Termination. Further for the avoidance of doubt, in the event of Generics Termination, BMS’ rights in the United States under the Restated Agreement with respect to Product shall terminate on the later of the effective date of the Generics Termination or November 19, 2012.
(ii) If the Generics Termination occurs prior to November 20, 2012, then: (1) BMS shall immediately undertake and conduct all of its obligations and responsibilities for conducting and paying for the Commercialization of Product in the United States, and shall continue fulfilling all of its other obligations relating to Product in the United States, under and in accordance with the terms of the Restated Agreement (as amended prior to this Amendment), subject to the other provisions of this subparagraph (ii); (2) the Parties shall work cooperatively and in good faith (through the JCC) to adjust, in a commercially appropriate manner, promptly and efficiently, the ongoing detailing and promotion of Product in the United States to address the changed market conditions resulting from ongoing Generic Sales, subject to the other terms of this subparagraph (ii); provided that, regardless of the Generics Termination, until November 20, 2012 (the date of
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termination of the Restated Agreement in the United States), and consistent with Section 5.3.3(a) and Section 5.3.4 of the Restated Agreement, Otsuka shall have the right to deploy up to [*] MRs promoting Product in United States and BMS shall be obligated to pay Otsuka for the direct expenses of the actual number of Otsuka’s MRs promoting Product in United States up to [*] Otsuka MRs; and (3) the Post-Termination Services Agreement and Post-Termination Supply Agreement entered into by the Parties concurrently with this Amendment (the “ P-T Services Agreement ” and the “ P-T Supply Agreement, ” respectively) shall remain in effect, shall automatically be in force on November 20, 2012, unless Otsuka elects not to obtain services or Product supply in the United States under such agreements, and shall continue in effect until the date that is thirty-six (36) months after the effective date of the Generics Termination unless either such agreement is terminated earlier in accordance with its terms.
(iii) If the Generics Termination occurs on or after November 20, 2012, then: (1) BMS shall fulfill all of its obligations under Section 12.7 and Section 13 of the Restated Agreement (as amended); (2) the Parties shall work cooperatively and in good faith to transition to Otsuka, as quickly as practicable after BMS’ notice of Generics Termination, the ongoing Commercialization of Product in the United States (except as otherwise provided below); and (3) the P-T Services Agreement and the P-T Supply Agreement shall remain in effect and shall automatically be in force on the effective date of the Generics Termination, such that BMS shall continue to provide certain services with respect to the ongoing Commercialization of Product in the United States, such as order processing, inventory control, Product distribution, pharmacovigilance and similar functions, and ongoing manufacture and supply of Product for sale in the United States, in accordance with the terms of such agreements until such time as such agreements terminate, and BMS shall facilitate enabling Otsuka or its designee(s) to provide such services and manufacture Products through the transfer of know-how as requested by Otsuka, in accordance with the terms of such agreements.
(iv) If the Date of Generic Sales occurs prior to [*], then (unless Otsuka disputes that Generics Termination is appropriate under Paragraph 10(b) above) (1) Otsuka shall pay to BMS (or an Affiliate of BMS designated by BMS) a Generics Termination Fee equal to the amount calculated in accordance with Exhibit 4 to this Amendment relating to the Date of Generic Sales, such amount being payable in two installments as follows: (A) fifty percent (50%) of the Generics Termination Fee shall be payable within one hundred twenty (120) days after the effective date of the Generics Termination, and (B) the remaining fifty percent (50%) of the Generics Termination Fee shall be payable on the date that is eighteen (18) months after the effective date of the Generics Termination; and (2) the Oncology Collaboration Agreement shall terminate effective as of the date that BMS (and/or its Affiliate) has paid to Otsuka all Collaboration Fees due Otsuka under the Oncology Collaboration Agreement based on sales of Products (as defined in the Oncology Collaboration Agreement) that are booked through the Date of Generic Sales.
(v) If the Date of Generic Sales occurs on or after [*], but prior to the end of the U.S. Abilify Extension Term, then Otsuka shall not owe BMS any fee in connection with the Generics Termination, but the term of the Oncology Collaboration Agreement shall automatically be deemed to continue until the date that BMS (and/or its Affiliate) has paid to Otsuka all Collaboration Fees due Otsuka under the Oncology Collaboration Agreement based on sales of Products (as defined in the Oncology Collaboration Agreement) that are booked through the date calculated in accordance with Exhibit 4 of this Amendment relating to the Date of Generic Sales, at which time the Oncology Collaboration Agreement will automatically terminate pursuant to Section 12.3(a) of the Oncology Collaboration Agreement.
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11. Competitive Product . Each Party’s rights and obligations with respect to Competitive Product in the European Union and the Rest of Territory remain as set forth in Section 7 (“Competitive Products”) of the Restated Agreement. Section 7 is hereby amended as follows with respect to the Parties’ rights and obligations pertaining to Competitive Product in the United States (Competitive Product being re-defined as “U.S. Competitive Product” for this purpose), which rights and obligations in the United States apply to U.S. Competitive Product (as defined below) and not to Competitive Products as defined in the Restated Agreement:
(a) BMS Right to Commercialize U.S. Competitive Product in the United States . In consideration of the rights granted to BMS by Otsuka under the Restated Agreement (as amended) with regard to the United States, including the Commercialization rights for Product in the United States during the U.S. Abilify Extension Term, BMS covenants and agrees that neither BMS nor any of its Affiliates, licensees or sublicensees (except only to the extent that any licenses or sublicenses to such licensees or sublicensees (1) were entered into prior to January 1, 2009, and (2) granted to such licensees or sublicensees exclusive rights to compounds without BMS retaining the right to co-develop or co-commercialize such compounds (or, where BMS has such right, BMS refrains from exercising any rights with respect thereto)) shall Commercialize (other than the performance of pre-launch activities that are not designed or anticipated to affect sales of Product) any U.S. Competitive Product (as defined below) in the United States at any time prior to [*]; provided that, the foregoing covenant shall not apply to BMS’ licensees or sublicensees to the extent their licenses or sublicenses from BMS grant rights only to research tools or formulation patents that do not relate to any specific compound or specific product. Commencing on [*], BMS and its Affiliates, licensees and sublicensees may Commercialize a U.S. Competitive Product in the United States, subject to BMS’ ongoing fulfillment of all other of its obligations under the Restated Agreement (as amended) through the term of the Restated Agreement (as amended), including, without limitation, those pertaining to Commercialization of Product in the United States (including Commercial Operations and payment of its share of Operational Expenses). Any such Commercialization of a U.S. Competitive Product prior to [*], in the United States shall constitute a material breach of the Restated Agreement (as amended). For the avoidance of doubt, the provisions of the first paragraph of Section 7.1 of the Restated Agreement (pertaining to generic product) continue to apply to BMS and its Affiliates in the United States.
(b) Promotion of U.S. Competitive Product . MRs who are assigned to promote Product during the U.S. Abilify Extension Term shall not, prior to [*], promote any other product that is a U.S. Competitive Product without the other Party’s prior written consent. In the event that a Party does not provide such consent, the other Party shall ensure that its MRs that have direct responsibility on a day-to-day basis for the promotion of Product (but excluding, for clarity, district managers or regional managers) shall be separate from those MRs that are responsible for the promotion of such U.S. Competitive Product.
(c) As used herein , “U.S. Competitive Product” means any product, other than Product, which carries a labeled indication approved by the applicable regulatory authority that is substantially the same as a labeled indication for Product as of the Amendment Effective Date ( e.g. , schizophrenia; bipolar mania, mixed or maintenance; or adjunctive therapy for major depressive disorder) approved by the same regulatory authority; provided that, where a product carries a labeled indication for adjunctive therapy for major depressive disorder (and does not carry any other labeled indication substantially the same as a labeled indication for Product as of the
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Amendment Effective Date), such product shall not be deemed a U.S. Competitive Product if such product is Commercialized by BMS or its Affiliate and contains or comprises a compound that BMS (but not an Affiliate or successor of BMS) was already developing as of the Amendment Effective Date. For clarity, a product that carries a labeled indication for first-line therapy or monotherapy for major depressive disorder, but does not carry a labeled indication substantially the same as a labeled indication for Product as of the Amendment Effective Date, is not a U.S. Competitive Product. Further for clarity, it is agreed that any Otsuka product based on its IM Depot formulation containing Compound is not, and is excluded from the definition of, a “U.S. Competitive Product.”
12. BMS Change of Control . In the event BMS acquires, is acquired by, or otherwise merges or consolidates with a third party, each Party’s rights and obligations outside of the United States shall remain as set forth in Section 12.6 of the Restated Agreement (as amended). If BMS undergoes a Change of Control (as defined in subparagraph (e) below) or if BMS acquires any interest in a Comparable Product through any merger, acquisition, consolidation or other business combination that is not a Change of Control, each Party’s rights and obligations with respect to the United States shall be as set forth in this Paragraph 12, and Section 12.6 of the Restated Agreement is hereby amended as follows with respect to the Parties’ rights and obligations in the United States:
(a) If BMS undergoes a Change of Control, then, except as otherwise provided in subparagraphs (b) , (c) and (d) below, the Restated Agreement (as amended) shall remain in full force and effect, and the Surviving Entity (as defined in subparagraph (e) below) shall continue to perform all obligations under the Restated Agreement (as amended).
(b) If BMS enters into an agreement or transaction, or series of agreements or transactions, with a Third Party Entity that, taken together, constitute or when consummated would constitute a Change of Control (as defined in subparagraph (e) below) and (A) such Third Party Entity is developing or Commercializing an Alternative Product (as defined in subparagraph (e) below) in the United States as of the date that BMS first enters into such agreement(s) or transaction(s), and (B) the Surviving Entity, the Third Party Entity or BMS is required by applicable United States law or regulatory action to divest, as a condition of closing such Change of Control, either Product or such Alternative Product, then BMS shall provide written notice to Otsuka promptly after first being informed by the Federal Trade Commission ( “FTC” ) or other applicable U.S. governmental entity that the Surviving Entity, the Third Party Entity or BMS (as the case may be) is required, as a condition of closing such Change of Control, to divest Product or such Alternative Product, notifying Otsuka of such requirement. As soon as practicable thereafter, but no later than thirty (30) days after first being informed by the FTC or other applicable U.S. governmental entity that the Surviving Entity, the Third Party Entity or BMS (as the case may be) is required, as a condition of closing such Change of Control, to divest Product or such Alternative Product, BMS shall notify Otsuka in writing whether such entity elects to divest its interest in Product or the Alternative Product (such notice, the “BMS Election Notice” ). If the BMS Election Notice notifies Otsuka that the Third Party Entity, the Surviving Entity or BMS (as the case may be) elects to divest its interest in the Alternative Product, then such entity shall divest such Alternative Product and all interests therein promptly and all of the Parties’ respective rights and obligations under the Restated Agreement (including this Amendment) and under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with the terms of such agreements. If the BMS Election Notice notifies Otsuka that the Third Party Entity, the Surviving Entity or BMS (as the case may be) elects to divest its interest in Product, then, within sixty (60) days after its receipt of the BMS Election Notice, Otsuka shall choose between
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Option 1 and Option 2 as described in clause (1) and clause (2) below, by providing written notice of such choice to BMS (such notice, the “Otsuka Election Notice” ).
(1) Option 1 . If Otsuka elects Option 1, all of BMS’ rights to Commercialize Product in the United States shall be terminated, such termination to be effective upon the closing date of the Change of Control (such effective date, the “Reversion Date” ), subject to BMS’ obligations thereafter to ensure a seamless transition to Otsuka as described below. Further, in the event Otsuka elects Option 1, all of Otsuka’s rights under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with the terms of such agreement, and Otsuka shall pay to BMS, [*], the price determined pursuant to the terms of Exhibit 5 of this Amendment based upon the Reversion Date (such price, “Option 1 Termination Price ” ); or
(2) Option 2 . If Otsuka elects Option 2, all of BMS’ rights to Commercialize Product in the United States shall be terminated effective on the Reversion Date, subject to BMS’ obligations thereafter to ensure a seamless transition to Otsuka as described below, and (A) in the event that the Reversion Date occurs prior to [*], all of Otsuka’s rights under the Oncology Collaboration Agreement shall terminate, and Otsuka shall pay to BMS, [*], the price determined pursuant to the terms of Exhibit 5 of this Amendment (“ Option 2 Termination Price ”), or (B) in the event that the Reversion Date occurs on or subsequent to [*], Otsuka shall owe no fee or compensation of any kind to BMS and all of Otsuka’s rights under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with the terms of such agreement until BMS (and/or its Affiliate) has paid to Otsuka [*] calculated in accordance with Exhibit 5 of this Amendment relating to the Reversion Date (the “Option 2 Continuation Date” ).
In the case of either Option 1 or Option 2, (A) BMS shall fulfill all obligations under the Restated Agreement (including this Amendment) through the Reversion Date, including without limitation, all of BMS’ obligations with respect to Commercial Operations and BMS’ Required Resource Commitment as provided in Paragraph 7 above and, without limiting the foregoing, shall use diligent, good faith efforts to Commercialize Product in the United States through the Reversion Date with the goal of avoiding any negative impact on sales of Product in the United States prior to or after the closing of the Change of Control; (B) BMS’ rights in the United States under the Restated Agreement (including this Amendment) shall be terminated, and all rights to Commercialize Product in the United States shall revert to Otsuka as of the Reversion Date in accordance with Section 12.7 and Section 13 of the Restated Agreement (as amended) and the terms of this Amendment; (C) BMS shall use diligent, good faith efforts to ensure a seamless transition to Otsuka of responsibilities and efforts with respect to the Commercialization of Product, including allocation of resources and reasonable assistance during any phase-in or ramp-up of Otsuka’s commercial capabilities, so as to preserve the commercial value of Product, to minimize disruption to Commercialization efforts and to enable the continuity of promotional efforts relating to Product, all subject to, and in accordance with, applicable law and regulatory constraints; and (D) BMS’ obligations under the P-T Services
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Agreement and the P-T Supply Agreement shall remain in effect and shall automatically be in force as of the Reversion Date.
If the BMS Election Notice required above notifies Otsuka that the Third Party Entity, the Surviving Entity or BMS (as the case may be) elects to divest its interest in Product, then BMS shall promptly notify Otsuka in writing of the anticipated closing date of such Change of Control and shall keep Otsuka informed on an ongoing basis of changes to such anticipated closing date. Notwithstanding the above, if in fact there is no closing of the Change of Control described above, with respect to which applicable law or regulatory action required divestiture as a condition of closing such Change of Control, then Otsuka’s obligations under Options 1 and 2 above, regardless of its election, shall be null and void, and the Parties’ respective rights and obligations under the Restated Agreement (as amended) and under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with their terms.
(c)(i) If BMS, prior to [*], undergoes a Change of Control not covered by subparagraph (b) above (that is, there is no governmental requirement of divestiture as a condition of closing such Change of Control) and a Third Party Entity or the Surviving Entity (or an Affiliate of such entity) is Commercializing a Comparable Product in the United States as of the effective date of such Change of Control, the Surviving Entity (whether BMS or a Third Party Entity or any of their respective Affiliates) shall, as soon as practicable prior to the anticipated closing date of such Change of Control and, in any event, no later than ten (10) Business Days after the effective date of such Change of Control, give written notice to Otsuka of such Change of Control, and in such notice, shall describe such Comparable Product ( “BMS Change of Control Notice” ) and shall, promptly thereafter, furnish to Otsuka information that Otsuka reasonably requests regarding such Comparable Product in order to enable Otsuka to make an informed decision as provided below in this subparagraph (c).
(ii) Within sixty (60) days after the effective date of such Change of Control or Otsuka’s receipt of the BMS Change of Control Notice, whichever is later, Otsuka shall choose between one of the following alternatives (at its election) and shall notify the Surviving Entity of such election:
(1) Otsuka may elect to continue the Restated Agreement (including this Amendment) and the Oncology Collaboration Agreement in full force and effect, under the terms and conditions thereof (the “Continuation Option” ), by providing written notice to the Surviving Entity (the “Otsuka Continuation Notice” ). If Otsuka elects the Continuation Option and chooses to continue the Restated Agreement (as amended) in full force and effect, then Otsuka shall owe no fees or compensation of any kind to BMS or the Surviving Entity, and the Surviving Entity (whether BMS or a Third Party Entity or any of their respective Affiliates) and its Affiliates, (A) shall use diligent, good faith efforts to Commercialize Product in the United States throughout the remaining period of the U.S. Abilify Extension Term, with the goal of avoiding any negative impact on sales of Product in the United States relating to or resulting from the Change of Control, and shall otherwise fulfill all obligations of BMS under the Restated Agreement (as amended, including by this Amendment), including without limitation, all of BMS’ obligations with respect to Commercial Operations and BMS’ Required Resource Commitment as provided in Paragraph 7 above; and (B) the promotion, detailing and marketing of Product shall be conducted by sales representatives of the Surviving Entity and its Affiliates who are not involved in the promotion or marketing of the Comparable Product, and the Surviving Entity, its Affiliates and their respective licensees and
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sublicensees, when permitted to Commercialize the Comparable Product in accordance with Paragraph 11 of this Amendment, shall put into place “firewall” protections such that sensitive marketing and commercial information relating to the marketing and sales of Product is not disclosed or available to the employees, agents or consultants of the Surviving Entity or its Affiliates or their licensees or sublicensees who are involved in the planning and/or conduct of the Commercialization of such Comparable Product; and (C) the Parties’ rights and obligations under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with its terms; or
(2) Otsuka may elect to require the Surviving Entity (or the Third Party Entity, or BMS or any of their respective Affiliates, as the case may be) (the “Divesting Entity” ) by written notice (the “Otsuka Notice to Divest” ) to divest either the Comparable Product or Product, at the Divesting Entity’s election. The Divesting Entity shall, within thirty (30) days after its receipt of the Otsuka Notice to Divest, notify Otsuka whether the Divesting Entity elects to divest its interest in Product or the Comparable Product (the “Divesting Entity Election Notice” ) and the Divesting Entity must consummate one or the other such divestiture within the applicable period provided below.
(A) If the Divesting Entity elects to divest its interest in the Comparable Product, then the Divesting Entity shall sell or otherwise divest such Comparable Product to a third party (not an Affiliate), in a transaction such that, upon consummation of such transaction, the Divesting Entity has no control over the Commercialization of such Comparable Product and no ongoing financial interest (royalties, commercial milestones, earn-outs or otherwise) in the commercial performance of such Comparable Product; provided , that the entity purchasing the rights in such Comparable Product from the Divesting Entity shall be permitted to pay the Divesting Entity the agreed purchase price for the Comparable Product [*]. The Divesting Entity shall consummate such divestiture of the Comparable Product, and shall provide reasonable documentation of the consummation of such transaction to Otsuka, within [*] days after the Divesting Entity’s receipt of the Otsuka Notice to Divest. In such case, all of the Parties’ respective rights and obligations under the Restated Agreement (including this Amendment) and under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with the terms of such agreements.
(B) If the Divesting Entity elects to divest its interest in Product, then it must divest Product, and all of its rights in Product, promptly to Otsuka and, in any event not later than [*] days after the Divesting Entity’s receipt of the Otsuka Notice to Divest. In addition, within sixty (60) days after Otsuka’s receipt of the Divesting Entity Election Notice, Otsuka shall choose between Option 1 and Option 2 as described in clause (1) and clause (2) of subparagraph (b) above by providing written notice to the Divesting Entity (such notice, the “Otsuka Election Notice” ). Upon Otsuka’s election, the Parties’ respective rights and obligations shall be as set forth in clause (1) and clause (2) of subparagraph (b) above (as the case may be, depending upon which option Otsuka elects) and as set forth in the two paragraphs in subparagraph (b) immediately following clause (1) and clause (2) above, and as set forth in any other provisions that are referenced in clause (1) and clause (2) above (as the case may be) and in such two other paragraphs; provided that, references in clause (1) and clause (2) of subparagraph (b) above to the “Reversion Date” shall be deemed for this purpose to be the earlier of (i) the effective date of the divestiture of Product to Otsuka or (ii) the date which is [*] days subsequent to the date of the Otsuka Notice to Divest.
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(d) In the event that Otsuka does not provide the Otsuka Election Notice to BMS within the sixty (60) day period described in subparagraph (b) above, Otsuka shall be deemed to have elected to terminate all of BMS’ rights to Commercialize Product in the United States pursuant to Option 2 under subparagraph (b)(2) above. In the event that Otsuka does not provide the Otsuka Continuation Notice or the Otsuka Notice to Divest to the Surviving Entity within the sixty (60) day period described in subparagraph (c)(ii) above, Otsuka shall be deemed to have elected the “Continuation Option” described in subparagraph (c)(ii)(1) above.
(e) Definitions .
(i) “Alternative Product” means a product that is being developed or Commercialized by a Third Party Entity, where BMS or such Third Party Entity or an applicable Surviving Entity is, due to BMS’ Commercialization of Product and as a condition of closing a proposed transaction, required by applicable law or regulatory action to divest either (A) such product or (B) Product.
(ii) “Change of Control” means with respect to BMS:
(1) the acquisition, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person” ) which is not, directly or indirectly, an Affiliate of BMS, of all or substantially all of the property or assets of BMS, other than an acquisition or series of related acquisitions in which BMS or its stockholders receive, directly or indirectly, as consideration for such property or assets, equity securities of such Person (or any Affiliate of such Person) that, taken together with all other equity securities of such Person (and any Affiliate of such Person) owned, beneficially or of record, directly or indirectly, by any Affiliate of BMS, in the aggregate constitute either (i) [*] or more of the outstanding equity securities of such Person or (ii) equity securities representing [*] or more of the Voting Power (as defined below) of such Person (or any Affiliate of such Person);
(2) the acquisition by any Person which is not, directly or indirectly, an Affiliate of BMS, of more than [*] of the Voting Power of BMS, other than an acquisition or series of related acquisitions in which the stockholders of BMS immediately prior to the consummation of such acquisition (or, in the case of a series of related acquisitions, the stockholders of BMS immediately prior to the consummation of the first of such series of acquisitions) receive, an ownership interest, directly or indirectly, beneficially or of record, in equity securities of BMS that, taken together with all other equity securities of BMS owned, directly or indirectly, beneficially or of record, by an Affiliate of BMS, represent an aggregate of either (i) [*] or more of the outstanding equity securities or (ii) equity securities representing [*] or more of the Voting Power of BMS immediately following the consummation of such acquisition (or, in the case of a series of acquisitions, immediately following the consummation of the last of the acquisitions that has been consummated in such series), in any case solely to the extent that such acquisition would require divestiture of either Product or an Alternative Product; or
(3) the consummation of any merger, consolidation or other business combination transaction involving BMS, other than through any transaction or series of related transactions in which the BMS stockholders immediately prior to the consummation of such
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transaction (or, in the case of a series of transactions, the BMS stockholders immediately prior to the consummation of the first of such series of transactions) receive, an ownership interest, directly or indirectly, beneficially or of record, in equity securities of the Surviving Entity (or any Affiliate of the Surviving Entity) that, taken together with all other equity securities of the Surviving Entity (or any Affiliate of the Surviving Entity) owned, directly or indirectly, beneficially or of record, by an Affiliate of BMS, represent an aggregate of either (i) [*] or more of the outstanding equity securities or (ii) equity securities representing [*] or more of the Voting Power of the Surviving Entity (or any Affiliate of the Surviving Entity) immediately following the consummation of such transaction (or, in the case of a series of transactions, immediately following the consummation of the last of the transactions that has been consummated in such series).
Notwithstanding the foregoing, a “Change of Control” shall not have occurred with respect to any transaction otherwise referred to in clauses (1), (2) or (3) above as a Change of Control (other than a transaction in which the consideration does not include equity securities) unless the quotient of (A) the [*] of BMS immediately prior to the public announcement of such transaction (as determined using the [*]), divided by (B) the sum of (1) the [*], plus (2) the [*], is less than [*] (such requirement, the “[*]”); provided, however , that, with respect to any transaction described in clause (2) above that is not approved by the board of directors of BMS or a committee thereof prior to the announcement of such transaction, the [*] shall be calculated using the date of the consummation of such transaction; and provided further, however that if the Counterparty does not have [*], then for purposes of the [*], the Counterparty’s [*] shall be, instead, the [*] as of immediately prior to the public announcement of such transaction, excluding any [*] in connection with such transaction (the “ [*] ” ). If BMS and Otsuka do not agree on the amount of the [*], then such amount shall be determined by expedited arbitration conducted in accordance with Section 14.1 of the Restated Agreement, with either party being able to request such arbitration.
(iii) “Comparable Product” means a product, other than Product, which is being developed for, or carries a labeled indication approved by the applicable regulatory authority, that is [*] approved by the same regulatory authority; provided that, with respect to a Change of Control or Business Combination occurring subsequent to [*], in the case of a product that would otherwise be a Comparable Product solely by virtue of carrying a labeled indication for
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[*], any such product shall not be deemed to be a Comparable Product unless either (A) sales of such product for [*] during the four (4) calendar quarters immediately prior to such Change of Control or Business Combination (or for the period of time in which such product has carried such labeled indication, if less than four (4) calendar quarters) exceed [*] of the total sales of such product during the four (4) calendar quarters immediately prior to such Change of Control or Business Combination (or for the period of time in which such product has carried such labeled indication, if less than four (4) calendar quarters), or (B) sales of such product for [*] during the four (4) calendar quarters immediately prior to such Change of Control or Business Combination exceed [*]. For clarity, if such product carries any other labeled indication (instead of or in addition to [*]) that is substantially the same as a labeled indication for Product as of the Amendment Effective Date, such product shall be deemed a Comparable Product both before and after [*], regardless of the level of such product’s sales for [*]. For further clarity, a product that carries a labeled indication for [*], but does not carry a labeled indication [*], is not a Comparable Product.
(iv) “Surviving Entity” means a Person that is, or is contemplated to be, the surviving Person pursuant to the consummation of a Change of Control transaction.
(v) “Third Party Entity” means a Person with whom BMS consummates a Change of Control transaction (or a definitive agreement to enter into a Change of Control transaction).
(vi) “Voting Power” means the number of votes entitled to be cast in the election of members of the board of directors.
(f) If BMS or an Affiliate acquires, is acquired by, merges or consolidates with, or otherwise enters into a business combination transaction with any Person (collectively, a “ Business Combination” ) that does not constitute a Change of Control, and the resulting or surviving entity (whether BMS, an Affiliate or another Person) or an Affiliate of such entity has an Alternative Product or is Commercializing a Comparable Product, then BMS shall so notify Otsuka as soon as practicable prior to the anticipated closing date of such Business Combination, and in any event no later than ten (10) Business Days of the closing of such Business Combination, and shall, promptly thereafter, furnish to Otsuka information that Otsuka reasonably requests in order to make an informed decision as provided in subparagraph (ii) below. For the avoidance of doubt, the terms of this subparagraph (f) shall apply only in the event of a Business Combination that is not a Change of Control, and if BMS undergoes a Change of Control, the terms of subparagraphs (a), (b), (c) and (d) above, as applicable, shall apply.
(i) If the Federal Trade Commission ( “FTC” ) or other U.S. governmental entity requires BMS, its Affiliate or the resulting or surviving entity (the “Divesting Entity” ) to divest either an Alternative Product or Product as a condition of closing the Business Combination, the Divesting Entity, including BMS, shall provide written notice to Otsuka within thirty (30) days after first being informed by the applicable U.S. governmental entity of such requirement, which notice shall notify Otsuka whether such entity elects to divest its interest in Product or the Alternative
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Product ( “BMS Election Notice” ). If the BMS Election Notice notifies Otsuka that the Divesting Entity (whether BMS or another Person) elects to divest its interest in the Alternative Product, then such entity shall divest such Alternative Product and all interests therein promptly and all of the Parties’ respective rights and obligations under the Restated Agreement (including this Amendment) and under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with the terms of such agreements. If the BMS Election Notice notifies Otsuka that the Divesting Entity (whether BMS or another Person) elects to divest its interest in Product, then, it must divest Product, and all rights in Product to Otsuka, and such divestiture shall be deemed effective on the closing date of the Business Combination (the “Non-CoC Reversion Date” ). Unlike a divestiture to Otsuka in the event of a Change of Control, Otsuka shall owe no fee or compensation of any kind to the Divesting Entity (including BMS) in exchange for such divestiture of Product to Otsuka, and all of Otsuka’s rights under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with the terms of such agreement. BMS’ rights under the Restated Agreement (including this Amendment) shall terminate upon the Non-CoC Reversion Date; provided , that (A) BMS shall fulfill all obligations under the Restated Agreement (including this Amendment) through the Non-CoC Reversion Date, including without limitation, all of BMS’ obligations with respect to Commercial Operations and BMS’ Required Resource Commitment as provided in Paragraph 7 above and, without limiting the foregoing, shall use diligent, good faith efforts to Commercialize Product in the United States through the Non-CoC Reversion Date, with the goal of [*] relating to or resulting from such Business Combination prior to or after the closing of the Business Combination; (B) BMS’ rights in the United States under the Restated Agreement (including this Amendment) shall be terminated, and all rights to Commercialize Product in the United States shall revert to Otsuka as of the Non-CoC Reversion Date in accordance with Section 12.7 and Section 13 of the Restated Agreement (as amended) and the terms of this Amendment; (C) BMS shall use diligent, good faith efforts to ensure a seamless transition of responsibilities and efforts with respect to the Commercialization of Product, including allocation of resources and reasonable assistance during any phase-in or ramp-up of Otsuka’s commercial capabilities, so as to preserve the commercial value of Product, to minimize disruption to Commercialization efforts and to enable the continuity of promotional efforts relating to Product, all subject to, and in accordance with, applicable law and regulatory constraints; and (D) BMS’ obligations under the P-T Services Agreement and the P-T Supply Agreement shall remain in effect and shall automatically be in force as of the date of the BMS Election Notice, subject to applicable law.
(ii) If neither the FTC nor any other U.S. governmental entity requires BMS, its Affiliate or the resulting or surviving entity in a Business Combination that does not constitute a Change of Control to divest either an Alternative Product or Product, and where such Business Combination occurs prior to [*], Otsuka has the option either:
(1) to continue BMS’ and Otsuka’s rights and obligations under the Restated Agreement (including this Amendment) and under the Oncology Collaboration Agreement, in accordance with the terms and conditions thereof, and if Otsuka makes such election, then BMS and its Affiliates and the resulting or surviving entity and its Affiliates shall continue to fulfill all of the obligations set forth in clauses (A) and (B) of subparagraph (c) above; or
(2) to require BMS, its Affiliate or the resulting or surviving entity (the “Divesting Entity” ) by written notice (the “Otsuka Notice to Divest” ) to divest either the Comparable Product or Product, at the Divesting Entity’s election. If the Divesting Entity (including
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BMS) elects to divest Product, it must divest Product, and all of its rights in Product, promptly to Otsuka and, in any event not later than [*] days after receipt of the Otsuka Notice to Divest. Otsuka shall owe no fee or compensation of any kind to the Divesting Entity (including BMS) in exchange for such divestiture of Product to Otsuka, and Otsuka’s rights in the Oncology Collaboration Agreement shall continue in full force and effect in accordance with the terms of such agreement. BMS’ rights under the Restated Agreement (including this Amendment) shall terminate upon the date of such divestiture of Product; provided , that BMS shall continue to fulfill all of the obligations set forth in clauses (A), (B), (C) and (D) of subparagraph (f)(i) above. If the Divesting Entity elects to divest the Comparable Product, then such entity shall, within [*] days after receipt of the Otsuka Notice to Divest, sell, exclusively license or otherwise divest such Comparable Product to a third party (not an Affiliate), in a transaction such that, upon consummation of such transaction, neither the Divesting Entity nor any of its Affiliates has any control over the Commercialization of such Comparable Product or any ongoing financial interest in such Comparable Product (as provided in greater detail in Paragraph 12(c)(ii)(2)(A) above, but with the permission to receive [*] as provided therein). The Divesting Entity shall consummate such divestiture of the Comparable Product and provide reasonable documentation of the consummation of such transaction to Otsuka within such [*] period, and all of the Parties’ respective rights under the Restated Agreement (including this Amendment) and under the Oncology Collaboration Agreement shall continue in full force and effect in accordance with the terms of such agreements.
13. Indemnification . In light of the modifications set forth in this Amendment relating to the Parties’ respective economic benefits from the sale of Product in the United States during the U.S. Abilify Extension Term and to the JCC tie-breaking vote, BMS and Otsuka hereby agree to amend the following indemnification obligations under the Restated Agreement.
(a) The Parties hereby agree that Section 11.2 of the Restated Agreement is hereby amended to provide that, as of January 1, 2013, Otsuka shall indemnify BMS, its Affiliates and their respective directors, officers, employees and agents, and defend and save each of them harmless, from and against any and all Losses to the extent that they arise from or occur as a result of the implementation after January 1, 2013, of those decisions of the JCC as to which Otsuka has exercised its tie-breaking vote; provided that if such Losses result not from the decisions of the JCC as to which Otsuka has exercised its tie-breaking vote, but from the implementation of those decisions, then the Party whose obligation it was to implement the decision(s), and whose manner of implementing or failure to implement resulted in the Losses, shall bear such Losses and shall indemnify the other Party therefor.
(b) BMS and Otsuka hereby reaffirm their intention and agreement to allocate responsibility for actions, omissions and matters that are not within either Party’s sole control in accordance with the Parties’ respective economic benefit under the Restated Agreement (as amended). Accordingly, to reflect the Parties’ agreed change in their respective share of Net Sales of Product in the United State commencing January 1, 2010, as set forth in Paragraph 5 of this Amendment, the Parties hereby agree that Section 11.1 and Section 11.4 of the Restated Agreement are hereby amended to provide that, as of January 1, 2010, Losses that are imposed or incurred in the United States and that arise from or occur as a result of actions, omissions and other matters not within either Party’s sole control (“ No-Fault Matters ”) shall be apportioned in accordance with the Parties’ respective economic benefit as follows: Any and all Losses imposed or incurred in the United States and arising from or occurring as a result of No-Fault Matters that occur in the United States
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prior to January 1, 2010 (regardless of when any claim, suit or demand relating to the same is threatened or filed) shall be apportioned [*] to BMS and [*] to Otsuka, and any and all Losses imposed or incurred in the United States and arising from or occurring as a result of No-Fault Matters that occur in the United States on or after January 1, 2010, shall be apportioned to BMS and Otsuka [*]; provided that, all such Losses imposed or incurred in the United States and arising from or occurring as a result of No-Fault Matters that occur in the United States during the “tiering years” (2013 – 2015) shall be apportioned [*] to BMS and [*] to Otsuka. By way of example, but not in limitation of the foregoing: [*]. For the avoidance of doubt, the applicable percentage to be allocated to each Party for purposes of apportioning Losses in accordance with this Paragraph 13 shall be established based on the date on which the No-Fault Matter occurs (i.e., the occurrence of the action, omission or other matter not within either Party’s sole control) and not based on when the Indemnified Party seeks indemnification or when any claim, suit or demand for Losses is threatened, filed or resolved. Further for the avoidance of doubt, the amendments made to Section 11.1 and Section 11.4 of the Restated Agreement pursuant to this Paragraph 13 apply only to Losses imposed or incurred in the United States resulting from claims, suits or demands threatened or filed in the United States, and nothing in this Paragraph 13 shall modify Section 11.1 or Section 11.4 of the Restated Agreement with respect to Losses imposed or incurred outside the United States.
14. Post-Termination Services and Supply Agreements . BMS and Otsuka hereby agree that, at the request of Otsuka, BMS shall (i) in accordance with the terms of the P-T Services Agreement, perform certain commercial, regulatory, safety and related services after expiration of BMS’ rights in the United States and other countries of the Territory, including, without limitation, distribution, warehousing, inventory control, quality control, order-to-cash services, returns processing, customs and trade functions, regulatory reporting and pharmacovigilance, and (ii) in accordance with the terms of the P-T Supply Agreement, manufacture and supply Product in the United States and other countries of the Territory after expiration of BMS’ rights in the United States and other countries. For the avoidance of doubt, the P-T Supply Agreement shall be deemed to amend and supersede any inconsistent terms set forth in Section 5.11.1(f) of the Restated Agreement.
15. Non-Solicitation . BMS and Otsuka agree that [*]. Accordingly, Section 15.2 of the Restated Agreement is hereby amended to give effect to this Paragraph 15.
16. Allocation of Costs for Third-Party License Rights . Section 5.11.7 of the Restated Agreement, regarding the allocation of costs between Otsuka and BMS for third-party intellectual
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property, remains in effect; provided that the allocation of costs identified therein on the basis of [*] to BMS and [*] to Otsuka, to the extent such costs relate to the sale of Product in the United States, are hereby amended, effective January 1, 2010, [*]. During the “tiering years” (2013-2015), BMS will pay [*] of such costs under Section 5.11.7 and Otsuka will pay [*] of such costs.
17. Definition of “Product”; IM Depot.
(a) The definition of “Product” as set forth in Section 1.42 of the Restated Agreement is hereby amended to read in its entirety:
“Section 1.42. “Product” shall mean any prescription, finished, human pharmaceutical product, in any formulation, in the Field containing Compound; provided that any Otsuka product based on its “IM Depot” formulation containing Compound shall not be deemed Product or a U.S. Competitive Product for purposes of this Agreement.”
(b) Section 4.3.3 of the Restated Agreement is hereby amended to remove BMS’ obligation to diligently develop an IM Depot formulation.
18. Inventory of Compound . Section 5.11.1(d) of the Restated Agreement requires Otsuka to maintain a rolling inventory of Compound equal to at least three (3) times BMS’ firm order for the most recent quarter, unless the Parties otherwise agree. The JCC shall discuss and determine during the U.S. Abilify Extension Term whether it is appropriate to reduce this inventory requirement.
19. Term of Restated Agreement in the Rest of Territory . Section 12.1 of the Restated Agreement is hereby amended to provide that the term of the Restated Agreement in the Rest of Territory shall expire on April 20, 2015 in all countries in the Rest of Territory except in those countries in which there is exclusivity for Product resulting from one or more composition-of-matter patents within the Patent Rights, data exclusivity or other regulatory exclusivity, in which countries the term of the Restated Agreement shall expire upon the loss of such exclusivity or on April 20, 2015, whichever is later.
20. Termination of Co-Promotion Agreement . The Parties hereby agree that certain Co-Promotion Agreement, dated as of June 10, 2008 between E.R. Squibb & Sons, an Affiliate of BMS, and Otsuka America Pharmaceutical, Inc., an Affiliate of Otsuka, shall be terminated effective as of December 31, 2009.
21. Further Amendment . Within one hundred (120) days after the Amendment Effective Date, the Parties shall negotiate in good faith, and use their reasonable best efforts to enter into, a further amendment to the Restated Agreement that shall expand upon the terms set forth in this Amendment, consistent with the Parties’ intentions as reflected herein.
[Signature Page Follows]
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IN WITNESS WHEREOF, Otsuka and BMS agree that this Amendment is effective as of the Amendment Effective Date set forth above.
| OTSUKA PHARMACEUTICAL CO., LTD. | BRISTOL-MYERS SQUIBB COMPANY | |||||||
| By: |
/s/ Taro Iwamoto, Ph.D. |
By: |
/s/ Lamberto Andreotti |
|||||
| Name: | Taro Iwamoto, Ph.D. | Name: | Lamberto Andreotti | |||||
| Title: | President and Representative Director | Title: | President and Chief Operating Officer | |||||
| By: |
/s/ Kazumichi Kobayashi |
|||||||
| Name: | Kazumichi Kobayashi | |||||||
| Title: | Senior Operating Officer, Pharmaceutical Business Division | |||||||
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Exhibit 1
Baseline Commercial Plan
[*]
Exhibit 2
FTE Rates and Indirect Costs
[*]
Exhibit 3
Terms of Co-Promotion Agreement
Without limiting the generality of either Party’s rights and obligations contained in the Amendment, the Co-Promotion Agreement shall, in addition to such other terms as the Parties may agree and as are customary in an agreement of that type, include the following terms and conditions, unless otherwise agreed upon by the Parties:
| Allocation of Commercial Responsibilities |
Pursuant to Paragraph 7 of this Amendment, by October 1 of each year, the Parties shall decide the total primary position detail equivalents ( “PDEs” ) to be performed by the Parties’ MRs, and Annual Resource Commitments of both Parties during the Fiscal year commencing on January 1 of the following year for the promotion of ABILIFY in the U.S. For each year, the total PDEs and Annual Resource Requirements of the respective Parties shall be called “Standard Efforts” for that year. Such Standard Efforts shall be consistent with the aggregate Annual Commercial Plan and Annual Commercial Expense Budget for such year. In the event that a Party’s MRs will promote both Product and another product, the JCC shall agree on an appropriate ratio of primary position details and secondary position details for purposes of determining PDEs.
In accordance with Paragraph 7(d) of this Amendment, during the U.S. Abilify Extension Term, Otsuka shall have the right, at its election, to deploy [*] MRs and [*] MSLs in the Co-Promotion of Product in the United States. All Otsuka sales representatives who will be performing sales calls shall be required to have reasonably similar educational qualifications as BMS requires for its own sales representatives. Additionally, all Otsuka sales representatives, prior to being assigned by Otsuka to ABILIFY, shall have a minimum level of prior experience promoting and detailing pharmaceutical products in the field of neuroscience to specialty physicians (which level of experience shall be set forth in the Co-Promotion Agreement); provided , however, that Otsuka sales representatives that have demonstrated reasonable success in promoting and detailing neuroscience products to primary care physicians shall be deemed to have the foregoing minimum level of prior experience and shall not be required to have experience detailing to specialty physicians.
To the extent that an additional training session for a [*] group of Otsuka MRs and MSLs ([*]) is required as a result of Otsuka’s initial exercise of its Co-Promotion rights or that any additional training session is required thereafter for an increased number of new Otsuka MRs and MSLs of [*], BMS, at Otsuka’s [*] request, shall provide to such initial or subsequent [*] group(s) of new Otsuka MRs and MSLs, and to designated Otsuka individuals who will train additional Otsuka MRs and MSLs in the future, appropriate training regarding [*], specifically; provided that in the event that [*]
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in any such training session, the Parties will [*].
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In addition, BMS shall provide Product-specific training on the Product for all new and current Otsuka MRs and Otsuka MSLs (to the extent that such MRs and MSLs are part of Otsuka’s Required Resource Commitment set forth in the applicable Annual Commercial Plan). Following such initial training, BMS shall also make available additional training for all Otsuka MRs and MSLs when BMS provides such additional training for its own sales force representatives on Product. All costs related to such initial and ongoing product-specific training of Otsuka MRs and MSLs shall be included in Operational Expenses as Indirect Costs.
All Otsuka and BMS sales representatives shall be subject to a reasonable proficiency examination relevant to Product.
As Otsuka deploys its MRs in the Co-Promotion effort in the United States, the assignment of each Party’s sales force will be equitable so that the sales force of each Party is assigned valuable, productive accounts and an equitable share of responsibility for opinion leaders, large accounts and other more desirable accounts and prescribers. Otsuka sales representatives will be geographically dispersed so as to have equitable representation with the BMS sales representatives in the most productive areas of the United States, based on analysis of prescriber profiles. In geographic areas where both companies have sales representatives, reasonable efforts will be made to split the sales targets as equitably as possible. Both BMS and Otsuka sales representatives will be assigned to cover economically valuable accounts, including without limitation (and as an amendment to Section 5.3.5 of the Restated Agreement), teaching hospitals and influential medical centers, military/veteran accounts, long-term care and prisons. Furthermore (and as a further amendment to Section 5.3.5 of the Restated Agreement), (1) Otsuka account executives may continue to call on managed care organizations and government agencies in tandem with BMS account executives, and (2) subsequent to June 30, 2014, Otsuka account executives may independently call on managed care organizations and government agencies, unless such calls are inconsistent with an agreed Annual Commercial Plan.
The Parties shall prepare and implement a [*] Plan in accordance with Paragraph 7(d) of this Amendment.
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| Co-Promotion Agreement |
The Co-Promotion Agreement will be negotiated within one hundred twenty (120) days subsequent to the Amendment Effective Date. The Co-Promotion agreement shall be limited to Commercialization in the U.S. and shall be consistent with the Amendment, including this Exhibit 3.
In the Co-Promotion Agreement, the Parties shall jointly discuss and agree upon detailing thresholds, the cost of each detail (or of FTEs based on details per FTE) for purposes of determining Operational Expenses, and shortfall provisions ( e.g. , the target number of detailing and allocation thereof between the Parties and specific remedies in case of shortfall of the allocated PDEs by a Party, etc.). Otsuka shall adopt reasonable measures of sales performance consistent with BMS’ internal company metrics, and the Parties shall agree on
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a method of communication with respect to sales performance results.
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The allocation of PDEs shall be consistent with each Party’s Standard Efforts commitment as set forth in the Annual Commercial Plan (consistent with Paragraph 7 of the Amendment.)
The Co-Promotion Agreement shall also set forth how each Party’s annual PDE requirements shall be allocated on a quarterly basis (the “Quarterly PDE/Detailing Amount” ) and, in the event a Party delivers in excess of [*] of such Party’s Quarterly PDE/Detailing Amount for a particular Quarter, then the number of such Party’s PDEs in excess of such [*] threshold shall be excluded from the calculation in determining if a Party’s obligations have been met with respect to such Party’s PDE requirements under the Co-Promotion Agreement.
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| Breach |
The Parties shall jointly discuss and agree upon standards and consequences for either Party’s failure to provide its respective share of Standard Efforts during any quarter or year, including, e.g., obligations to deliver PDE shortfall in a given quarter or year, and financial remedies tied to deficits (with increased penalties in the case of a severe or repeated failure), which shall be set forth in the definitive Co-Promotion Agreement.
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Exhibit 4
Generics Termination Fee
[*] [Note: Approximately two pages of text are omitted.]
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Exhibit 5
Termination Price
[*] [Note: Approximately four pages of text are omitted.]
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