EXECUTION COPY
SUPPLY AGREEMENT dated as of
January 8, 1997 (this "Agreement"), by and
between BAYER AG, BAYER CORPORATION
("Bayer US" and together with Bayer AG,
"Bayer"), BARR LABORATORIES, INC. ("Barr")
and HOECHST MARION ROUSSEL, INC. ("HMR").
WHEREAS Bayer AG, Bayer US and Barr entered into a
Settlement Agreement and Mutual Release dated as of the date
hereof (the "Barr Settlement Agreement"), in the matter of
litigation relating to United States Patent No. 4,670,444
(the "`444 Patent"), which claims, inter alia, the novel
compound commonly known as ciprofloxacin ("ciprofloxacin"),
then pending in the United States District Court for the
Southern District of New York (the "District Court"), in
which litigation Bayer AG and Bayer US were the plaintiffs
and Barr was the defendant;
WHEREAS HMR and Rugby Laboratories, Inc. have
maintained co-control with Barr of the defense against
Bayer's claims in the litigation and have paid or reimbursed
Barr for a portion of its cost of defending against Bayer's
claims in the litigation;
WHEREAS Bayer AG, Bayer US, HMR and Rugby
Laboratories, Inc. entered into a Settlement Agreement and
Mutual Release dated as of the date hereof (the "HMR
Settlement Agreement");
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WHEREAS the parties are entering into this
Agreement as required by the Barr Settlement Agreement and
the HMR Settlement Agreement;
WHEREAS, in certain circumstances more fully
described herein, Bayer will manufacture and supply Barr and
HMR (the "Purchasers") with the Product (as defined below)
as finished product for sale by Purchasers; and
WHEREAS Purchasers wish Bayer to make Product
available to them for purchase according to the provisions
of this Agreement.
NOW, THEREFORE, Bayer AG, Bayer US and Barr and
HMR agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. The following terms
shall have the following meanings:
"Adjustment Date" shall mean the date that is six
months prior to the Final Expiration Date.
"*** Settlement Agreement" shall have the
meaning set forth in the recitals.
"Barr" shall mean Barr Laboratories, Inc.
"Barr Escrow Account" shall mean the escrow
account of Barr at Citibank N.A., or any other responsible
institution, established to receive payments due to Barr
under the Barr Settlement Agreement and this Agreement.
"Barr Settlement Agreement" shall have the meaning
set forth in the recitals.
"Barr's Aggregate Costs" shall have the meaning
set forth in Section 3.06(d).
"Barr's Costs" shall have the meaning set forth in
Section 3.06(d).
"Bayer" shall mean Bayer AG and Bayer US.
"Bayer Option" shall have the meaning set forth in
Section 4.02.
"Bayer US" shall mean Bayer Corporation.
"Breaching Party" shall have the meaning set forth
in Section 16.02(b).
"Calendar Quarter" shall mean each consecutive
three-month period beginning on either January 1, April 1,
July 1 or October 1 of any given year.
"Determination Date" shall mean the earlier of
(i) the Invalidity Date and (ii) the Generic Date.
"District Court" shall have the meaning set forth
in the recitals.
"Final Expiration Date" shall have the meaning set
forth in Section 7.01.
"Generic Date" shall mean the date of launch of a
generic product in the United States containing
ciprofloxacin by a third party that is not licensed by Bayer
after the '444 Patent becomes invalid or unenforceable on a
final and nonappealable basis as to such third party other
than due to the Invalidity Date.
"HMR" shall have the meaning set forth in the
recitals.
"HMR Settlement Agreement" shall have the meaning
set forth in the recitals.
"Invalidity Date" shall mean the date of a final
and nonappealable judgment or a final and nonappealable
declaration that the `444 Patent is invalid or unenforceable
as to all persons in the United States.
"Net Revenues" shall have the meaning set forth in
Section 3.06(d).
"Net Sales" shall have the meaning set forth in
Section 3.06(d).
"Net Selling Price" shall mean, ***
*** during such relevant period.
"Option Date" shall mean the date specified in the
Option Notice as the date on which Bayer's obligation to
supply Product to Purchasers shall commence, unless Bayer
revokes the Option Notice in accordance with Section 4.02.
"Option Notice" shall mean the notice delivered by
Bayer to Representative pursuant to Section 4.02 of this
Agreement informing Representative of Bayer's intention to
exercise the Bayer Option.
"'444 Patent" shall have the meaning set forth in
the recitals.
"Patents" shall mean the '444 Patent and all the
other patents and patent applications and any divisions,
continuations, continuations-in-part, reissues or extensions
derived therefrom, related to the synthesis, manufacture,
compound or precursors to ciprofloxacin and any
pharmaceutical formulation containing ciprofloxacin existing
in the United States as of the date of this Agreement that
are owned by Bayer or any of its subsidiaries.
"Product" shall have the meaning set forth in
Article II.
"Product Specifications" shall have the meaning
set forth in Article II.
"Put Price" shall have the meaning set forth in
Section 3.06(a)(i).
"Quality Assurance Specifications" shall have the
meaning set forth in Section 3.05(b).
"Representative" shall have the meaning set forth
in Section 9.02.
"Settlement Agreement" shall have the meaning set
forth in the recitals.
"Settlement Agreements" shall have the meaning set
forth in the recitals.
A "SKU" shall mean a given package size of a given
strength of Product.
"Stub Period" shall mean the period from the
earlier of the Option Date and the Adjustment Date until the
earliest of the next March 31, June 30, September 30 or
December 31.
A "subsidiary", with respect to a party, shall
mean any corporation, partnership, limited liability company
or other entity the voting interests in which are owned 50%
or more by that party.
"Supply Period" shall mean the period that
(i) commences with the earlier of ***
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"Termination Date" shall have the meaning set
forth in Section 7.01.
"Trade Discounts" shall mean prompt payment
discounts given by Bayer to encourage payment of trade
receivables prior to the net payment date.
"Trade Discount Percentage" shall mean, for a
particular Calendar Quarter, the percentage that is ***
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ARTICLE II
Product
For purposes of this Agreement, the term "Product"
shall mean all oral dosage forms of ciprofloxacin presently
or subsequently marketed by Bayer or any of its subsidiaries
in the United States under a New Drug Application or a
Supplemental New Drug Application of Bayer or any of its
subsidiaries and pursuant to or under the authority of
(i) the Patents or (ii) the Patents and other patents owned
by Bayer or any of its subsidiaries, which conform to
product specifications as approved from time to time by the
Food and Drug Administration (the "FDA"), except that during
any period of market exclusivity for a particular SKU
granted by the FDA pursuant to the Patent Term Restoration
Act of 1984, as amended, the term "Product" shall not
include such SKU. The term "Product" shall not include any
oral dosage forms of ciprofloxacin marketed pursuant to a
New Drug Application or Supplemental New Drug Application
that employs patented technology of a third party. Within
60 days of the date of this Agreement, Bayer will provide to
the Purchasers the current product specifications for the
Product (the "Product Specifications").
ARTICLE III
Manufacture and Supply of Product
SECTION 3.01. Purchase and Sale of Product.
Subject to the terms and conditions of this Agreement, Bayer
shall supply Purchasers with Product. Purchasers shall
purchase and accept all of Purchasers' requirements for
Product from Bayer and shall have the right to sell Product
purchased from Bayer only in the United States and Puerto
Rico and not elsewhere under a single trademark of the
Purchasers; provided, that such trademark shall not be
similar to CIPRO or any other trademark or tradename of
Bayer AG or any of its subsidiaries. Product shall be
manufactured and packaged in accordance with Bayer's Product
Specifications. Bayer's Product Specifications may be
altered from time to time without the necessity of amending
this Agreement.
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SECTION 3.02. Product To Be Supplied by Bayer.
(a) Bayer will use its reasonable best efforts to supply
Purchasers with the quantities of Product ordered by
Representative in accordance with the terms of this
Agreement; provided, however, that Bayer may supply
Purchasers with quantities of Product that vary no more than
*** the quantities stipulated in Representative's firm
order; provided, further, that Bayer shall redress *** when
supplying subsequent orders.
(b) Bayer shall offer for sale to Purchasers
Product packed in containers in the standard packaging and
labeling for, and made in the sizes, shapes, and colors and
to the other specifications as, the Product offered at such
time by Bayer to Bayer's other customers except that nothing
herein shall require Bayer to sell the Product or any
packaging to the Purchasers with the trademark CIPRO or
Bayer's NDC number for CIPRO.
(c) ***
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SECTION 3.03. Estimates, Orders and Delivery
Variances. (a) At least *** before the
beginning of each Calendar Quarter in which Bayer is
obligated to supply Purchasers with Product pursuant to this
Agreement, Representative shall provide Bayer with a rolling
*** forecast of its requirements of Product broken down by
calendar months. This forecast will specify package size.
The *** calendar months of this forecast shall
represent a firm order, which shall be supplied by Bayer to
Purchasers in accordance with Representative's purchase
orders. Purchase orders must be delivered to Bayer by
Representative at least *** days prior to the shipment date
requested in such purchase order. The requirements of the
Stub Period and the first firm order appear in paragraph (b)
which follows.
(b) At least *** prior to the
anticipated first date of receipt of Product by the
Purchasers hereunder ***, representatives of Bayer and
Representative shall meet pursuant to Section 9.01(a) and
negotiate in good faith the quantities and delivery dates of
Product to be supplied in the Stub Period and the first
Calendar Quarter thereafter. If Product is to be delivered
by Bayer *** or upon occurrence of the Adjustment Date or
pursuant to Section 3.06(c), Bayer shall use its reasonable
best efforts
to supply the Purchaser with Product that Representative
determines to be the Purchasers' reasonable requirement for
the Stub Period and the first Calendar Quarter thereafter.
In all other cases, Bayer shall use its reasonable best
efforts to supply the Purchasers with the quantities of
Product that Representative and Bayer determine to be the
Purchasers' requirements for the Stub Period and the first
Calendar Quarter thereafter. Representative shall place the
first firm order at least *** in advance of the
anticipated first date of receipt of Product (or as soon as
reasonably practicable if *** is not possible); ***
***.
(c) As soon as is reasonably practicable prior to
the reasonably likely start of the Supply Period,
representatives of Bayer and the Representative shall meet
pursuant to Section 9.01(a) and negotiate in good faith the
quantity and delivery dates of Product to be supplied during
the first *** of the Supply Period. Bayer shall
use its reasonable best efforts to supply the Purchasers
with the quantities of Product that Bayer and the
Representative determine to be the Purchasers' requirements
for such *** period. ***
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SECTION 3.04. Government Approvals. (a) Bayer
has and will maintain with the FDA its existing New Drug
Applications, and will maintain with the FDA any
subsequently approved New Drug Applications, relating to the
Product.
(b) The parties shall promptly and fully advise
each other of any instructions, recommendations or
specifications required by any government regulatory agency
concerning the Product. Bayer shall notify Representative
and Representative shall notify Bayer of any actions that
Bayer or Representative, as the case may be, intends to take
in response to government regulatory agency requirements
concerning the Product. Disclosures by any party to the
other parties may be modified to protect such disclosing
party's proprietary information and technology.
(c) The Purchasers shall immediately notify Bayer
of all contacts with the FDA or other regulatory agencies
concerning Product. If the Purchasers are required by the
FDA to take any action with respect to Product without delay
or without any element of discretionary action or decision,
the Purchasers shall immediately notify Bayer. Purchasers
shall promptly provide Bayer with copies of all material
that it submits to the FDA concerning Product and all other
communications with the FDA concerning Product.
(d) Each Purchaser will utilize an NDC number in
the form of XXXX-YYYY-ZZ for such Purchaser's sales and
distribution of Product. Either Purchaser may change its
NDC number with the consent of Bayer, which consent shall
not be unreasonably withheld.
SECTION 3.05. Manufacture and Packaging of
Product. (a) Bayer shall manufacture and package the
Product in finished dosage units in conformity with the
Product Specifications. All Product sold by a Purchaser
shall have a label of that Purchaser stating an equivalent
of "Manufactured by Bayer Corporation" and displaying the
trademark of the Purchasers, and not displaying the mark
CIPRO or any other trademark or tradename of Bayer AG or any
of its subsidiaries.
Purchasers may make changes to the Product
Specifications relating to packaging and/or labeling after
meeting with Bayer under Section 9.01 in order to reach
agreement on implementation procedures; provided that any
such changes (i) must comply with all FDA requirements and
(ii) must be approved by Bayer, which approval shall not be
unreasonably withheld. Purchasers shall reimburse Bayer for
all extra costs incurred by Bayer for making any such
changes, including the cost of destroying obsolete
packaging, labeling or related materials.
Nothing contained herein shall prevent Bayer from
modifying its manufacturing or packaging specifications or
the Product labeling, so long as such changes conform to FDA
requirements and the NDAs relating to the Product. Bayer
shall notify Representative promptly following a final
decision to make or, if FDA approval is required, to seek
approval for such changes, but in no event shall
Representative be given less than forty-five (45) days
advance written notice of the fact and specifics of such
modification, unless a shorter time is required to comply
with FDA requirements.
(b) Bayer's quality assurance procedures and
in-plant quality assurance checks after the manufacture of
Product shall be applied in conformity with the requirements
of the FDA and with the quality assurance specifications for
the Product (which may be modified to the extent necessary
to protect Bayer's proprietary information) (the "Quality
Assurance Specifications") to be supplied by Bayer to the
Purchasers within 60 days of the date of this Agreement, and
which shall thereafter be modified as required by applicable
government regulation.
(c) Representative shall have the right once per
year, upon thirty (30) days' prior written notice, to
arrange for an inspection by an independent mutually
acceptable inspector, during regular business hours, of
Bayer's production facilities used, or to be qualified for
use, in connection with the manufacture of Product for
Representative. Such inspection shall be limited to Bayer's
compliance with then current GMP regulations in the
production, testing and storage of the Product. The
inspection report contents shall be limited to advising
whether Bayer does, or does not, comply with such
regulations. Any such inspector shall be required to
execute a confidentiality agreement consistent with this
Section 3.05(c) and in the form reasonably requested by
Bayer prior to any such inspection.
(d) Quality assurance and analytical records will
be maintained by Bayer as required by relevant regulatory
agencies, and copies thereof will be made available to
Representative if requested.
(e) Each Product container shall show the lot
number(s), clearly distinct from all other numerical
identifications, and such lot number(s) shall be on the
shipping documents.
SECTION 3.06. Pricing. ***
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(c) Bayer reserves the right to enter into
license or supply agreements with other persons for the sale
of Product in the United States. In this connection,
"Private Label Distributor" shall mean a person (other than
the Purchasers) which markets Product in the United States
under a tradename or trademark which is not CIPRO (or such
other tradename or trademark under which Bayer is marketing
the Product). Bayer agrees that the Purchasers shall have
at ***
*** before Bayer may allow a Private Label Distributor to
enter the market. ***
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SECTION 3.07. Payment. ***
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(c) Product shall be made available for shipping
F.O.B., Bayer's designated facility within the continental
United States or Puerto Rico. Bayer shall arrange for
shipping of Product from the continental United States or
Puerto Rico to each Purchaser's facilities designated in
Representative's weekly shipping schedule, at that
Purchaser's expense, and title and risk of loss shall pass
upon delivery to the carrier.
(d) Notwithstanding anything to the contrary
herein, if any Purchaser is more than 90 days in arrears in
its payments to Bayer for Product, Bayer may suspend future
shipments of Product until such time as such payments are
made current, unless the total amount in arrears is being
disputed in good faith by such Purchaser.
SECTION 3.08. Requirements. Each Purchaser shall
purchase from Bayer 100% of its requirements for the Product
to be sold in the United States and Puerto Rico.
SECTION 3.09. Floor Stock Price Protection.
(a) This Section 3.09(a) shall apply ***
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ARTICLE IV
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SECTION 4.02. Bayer Option. On ***
prior written notice to Representative, Bayer may elect, in
its sole discretion, to cease making the payments to the
*** set forth in Schedule 4.01 (the "Bayer Option").
***
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ARTICLE V
Labeling and Medical Information
Bayer shall supply to Representative such medical
and labeling information as is reasonably required by a
diligent pharmaceutical company to support the registration
of the Product and to ensure that Purchasers can undertake
and fulfill their legal, regulatory and medical
responsibilities relating to its sale of the Product. For
the same reason, Bayer shall supply copies of its
promotional materials (but with no element of pricing
information) to Representative to assist Purchasers in
ensuring that their own promotional materials are consistent
and not capable of introducing ambiguities or differences of
interpretation in the marketplace.
Bayer shall ensure that Representative has
reasonable access to Bayer's medical information and
summaries of safety and effectiveness data provided to the
FDA in connection with the Product at the time of Product
approval, as supplemented from time to time. Bayer shall
provide such additional information and materials reasonably
requested by Representative relating to the foregoing,
including labeling, package inserts and product packaging.
Bayer shall arrange meetings to take place between
Representative and Bayer's representatives as soon as
practicable before Purchasers commence sales of Product to
discuss medical and regulatory information concerning the
Product.
ARTICLE VI
Warranties
SECTION 6.01. Bayer agrees that all Product
delivered to Purchasers pursuant to this Agreement shall
not, at the time of delivery, be adulterated or misbranded
within the meaning of the Federal Food, Drug and Cosmetic
Act of the United States of America, as amended, as such
Act is constituted and effective at the time of delivery,
and the Product will not be an article which may not, under
the provisions of Sections 404 and 505 of such Act, be
introduced into interstate commerce.
SECTION 6.02. Bayer warrants that Product
delivered to Purchasers pursuant to this Agreement shall
conform with the Product Specifications, as amended from
time to time, and the Quality Assurance Specifications, as
amended from time to time, and shall conform to the relevant
FDA requirements. BAYER MAKES NO OTHER WARRANTIES, EXPRESS
OR IMPLIED, WITH RESPECT TO THE PRODUCT. ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY
BAYER. Except for damages which arise out of or are
attributable to any act or omission on the part of Bayer,
Bayer shall not be liable for indirect damages resulting
from Product sold under this Agreement.
SECTION 6.03. Bayer shall indemnify and hold
Purchasers harmless from and against all claims, causes of
action, settlement costs including reasonable attorneys'
fees, losses or liabilities and expenses of whatever nature
which arise from or are attributable to:
(a) any Product characteristic or any
manufacturing defect or failure to meet the Product
Specifications and Quality Assurance Specifications
during or as a result of manufacture of the Product by
Bayer; or
(b) any negligent act or omission on the part of
Bayer's employees, agents or representatives.
In the event of any such claim against a Purchaser or any
Purchaser affiliate or any agent, director, officer or
employee, that Purchaser shall promptly notify Bayer in
writing of the claim and Bayer shall manage and control, at
its sole expense, the defense of the claim and its
settlement. That Purchaser shall cooperate with Bayer and
may, at its option and expense, participate in any such
action or proceeding.
SECTION 6.04. Each Purchaser shall indemnify and
hold Bayer harmless from and against all claims, causes of
action, settlement costs, including reasonable attorneys'
fees, losses or liabilities and expenses of any kind
asserted by third persons which arise out of or are
attributable to any negligent act or omission on the part of
that Purchaser or its employees, agents or representatives.
In the event of any such claim against Bayer, or
any Bayer affiliate or any agent, director, officer or
employee, Bayer shall promptly notify the relevant Purchaser
in writing of the claim, and that Purchaser shall manage and
control, at its sole expense, the defense of the claim and
its settlement. Bayer shall cooperate with that Purchaser
and may, at its option and expense, participate in any such
action or proceeding.
SECTION 6.05. In the event that the FDA requires
withdrawal of Product from the market, or as soon as any
party is required to recall or is considering the recall of
the Product, it shall immediately advise the other and, at
the same time, provide the other with all information
leading to the need for such recall or the consideration of
it. Such party will use its reasonable efforts to ensure
that the others are given ample opportunity to participate
in all meetings with the FDA, and to the extent possible,
the parties shall together use their good faith efforts to
remedy the cause of the withdrawal or recall. It is
intended by the parties, by inclusion of this provision,
that there are no arbitrary one-sided decisions to recall
the Product in the United States or Puerto Rico, without
first ensuring well-informed and co-operative discourse
among the parties.
Reasonable costs (but not including loss of
profits) associated with any recall or withdrawal of Product
hereunder, including the replacement Product manufactured by
Bayer, shall be borne by the party whose acts or omissions
resulted in the need for the recall or withdrawal.
If the recall or withdrawal of Product hereunder
arises from an act or omission of Bayer, Bayer shall
immediately replace, at Bayer's expense, the Product so
recalled or withdrawn, so that the Purchasers' businesses
are interrupted as little as possible.
SECTION 6.06. Each party will advise the others
within five (5) working days of the details of any
significant Product complaint which it may receive as to the
safety or efficacy of the Product, or significant and/or
repetitive adverse reactions to the Product.
ARTICLE VII
Term and Termination
SECTION 7.01. This Agreement shall terminate on
the date (the "Termination Date") that is the earlier of the
date of final expiration of the `444 Patent (the "Final
Expiration Date") and the expiration of the Supply Period;
provided, however, that such date shall be extended if
necessary to permit the Supply Period to have a length of
six months.
SECTION 7.02. Termination or expiration of this
Agreement by any means and for any reason shall not relieve
the parties of any obligation accruing concurrently
therewith or prior thereto and shall be without prejudice to
the rights and remedies of any party with respect to any
breach of any of the provisions of this Agreement.
ARTICLE VIII
Force Majeure
SECTION 8.01. Any delay in the performance of any
of the duties or obligations of either party hereto (except
the payment of money) shall not be considered a breach of
this Agreement and the time required for performance shall
be extended for a period equal to the period of such delay;
provided that such delay has been caused by or is the result
of any acts of God; acts of the public enemy; insurrections;
riots; embargoes; labor disputes, such as strikes, lockouts
or boycotts; fires; explosions; floods; earthquakes;
mudslides; or other unforeseeable causes beyond the control
and without the fault or negligence of the party so
affected. The party so affected shall give prompt notice to
the other party of such cause, and shall take whatever
reasonable steps are necessary to relieve the effect of such
cause as rapidly as possible.
SECTION 8.02. Should any event of force majeure
interrupt or reduce the manufacturing capacity of Bayer so
as to limit Bayer's ability to produce sufficient Product
for its and for Purchasers' requirements hereunder, then the
quantity of Product which still can be produced by Bayer (if
any) shall be allocated between the parties in such
proportions as recognizes the share in the volume of Product
manufactured by Bayer during *** represented by Purchasers'
purchases of Product during such period (if Product has been
***, the Purchasers' *** forecast of its requirements (that
was delivered to Bayer pursuant to Section 3.03) shall be
deemed to be the volume of Purchasers' purchases of Product
during *** for purposes of this calculation).
ARTICLE IX
Additional Covenants
SECTION 9.01. Meetings. (a) On a regularly
scheduled basis, representatives of Bayer and Representative
shall meet to confer on the implementation of the
transactions contemplated by this Agreement.
(b) ***, through meetings held pursuant to
Section 9.01(a), Representative will coordinate with Bayer
to resolve all labeling, tooling, brochure and packaging
issues. The Purchasers shall promptly reimburse Bayer for
all reasonable startup costs including expenses related to
tooling and dies incurred by Bayer to prepare for supplying
Product to the Purchasers.
***
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SECTION 9.02. Appointment of Representative for
the Purchasers. Barr and HMR hereby appoint Barr as their
representative (the "Representative") to act on behalf of
each of them as set forth herein. Barr and HMR may replace
the Representative by delivery of notice to Bayer AG and
Bayer US of their replacement of the Representative, which
notice shall contain such replacement Representative's name,
address and fax number. Barr and HMR agree to form a joint
venture partnership no later than July 1, 1997, and to
appoint that partnership to be the Representative promptly
thereafter.
ARTICLE X
Notices
Any certificate, notice or notification to any
party required, permitted or contemplated hereunder will be
in writing, will be addressed to the party or parties to be
notified at the address set forth below, or at such other
address as each party may designate for itself from time to
time by notice hereunder, and will be deemed to have been
validly served, given or delivered (i) the fifth business
day after such notice was delivered to a regularly scheduled
overnight delivery carrier with delivery fees either prepaid
or an arrangement, satisfactory to such carrier, made for
the payment of such fees, or (ii) upon receipt of notice
given by telecopy, mailgram, telegram, telex, or personal
delivery:
To Bayer AG: Bayer AG
D-51368 Leverkusen
Konzernbereich Recht,
Patente/Lizenzen und
Versicherungen
Germany
Attention: General Counsel
Fax: 49-214-30-50848
To Bayer US: Bayer
Corporation
One Mellon Bank Center
Pittsburgh, PA 15219-2507
Attention: General Counsel
Fax: 412-394-5580
With a copy to: Bayer
Corporation
Pharmaceuticals Division
400 Morgan Lane
West Haven, CT 06516-4175
Attention: General Counsel
Fax: 203-812-2795
To Barr: Barr Laboratories, Inc.
2 Quaker Road
Pomona, NY 10970
Attention: General Counsel
Fax: 914-353-8419
To HMR: Hoechst Marion Roussel, Inc.
10236 Marion Park Drive
Kansas City, MO 64134-0627
Attention: General Counsel
Fax: 816-966-3805
To Representative: Barr Laboratories, Inc.
2 Quaker Road
Pomona, NY 10970
Attention: General Counsel
Fax: 914-353-8419
With a copy to: Hoechst Marion Roussel, Inc.
10236 Marion Park Drive
Kansas City, MO 64134-0627
Attention: General Counsel
Fax: 816-966-3805
All notices to Bayer must be delivered to Bayer AG and to
Bayer US.
ARTICLE XI
Limited License
SECTION 11.01. (a) The Purchasers are herein
granted a license that is limited to enabling them to
perform those activities permitted hereunder with respect to
Product for sale in the United States or Puerto Rico;
provided, however, that such license shall not be construed
as permitting, explicitly or implicitly, any action or
activity by the Purchasers either (i) outside the United
States or Puerto Rico or (ii) that is not specifically
authorized by this Agreement.
(b) Following the termination of this Agreement,
unless said termination is due to a breach of this Agreement
by a Breaching Party as determined by a court of competent
jurisdiction or by arbitration as provided herein, the
Purchasers may manufacture and distribute Product in the
same sizes, shapes and colors as Product offered for sale by
Bayer in the United States or Puerto Rico as of the date of
termination (but no license is granted as to the containers
in which Product is sold), subject to any patent rights of
Bayer or its subsidiaries that are in force at such time.
For the avoidance of doubt, the Purchasers shall have no
right to use any trademark (other than trademarks relating
to size, shape or color of the Product), tradename, patents,
proprietary technology or logo used by Bayer or its
subsidiaries.
SECTION 11.02.***
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ARTICLE XII
Applicable Law
This Agreement will be interpreted and the rights
and liabilities of the parties hereto determined in
accordance with the local law of the State of New York,
excluding any conflicts of law or choice of law, rule or
principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of
another jurisdiction. The parties expressly exclude the
application of any provisions of the United Nations
Convention on Contracts for the International Sale of Goods
to this Agreement.
ARTICLE XIII
Confidentiality; Publicity
SECTION 13.01. Confidentiality. With the
intention to keep the terms of this Agreement confidential,
Bayer AG, Bayer US, Barr and HMR, on their own behalf and on
behalf of their respective officers, directors, employees,
agents, affiliates, attorneys and advisors, hereby agree to
use their respective reasonable best efforts not to disclose
the terms of this Agreement, except as required by law,
regulation governmental authority or stock exchange
regulation.
SECTION 13.02. Publicity. Except as the parties
have agreed in the Settlement Agreements or may otherwise
agree in writing, the parties shall not make any disclosures
concerning the terms of this Agreement, except in conformity
with Section 13.01.
ARTICLE XIV
Assignment
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ARTICLE XV
Effectiveness
This Agreement shall become effective upon the
entry by the District Court of the Consent Judgment. If
such entry does not occur, this Agreement shall be null and
void and of no force and effect.
ARTICLE XVI
Dispute Resolution
SECTION 16.01. (a) General. The parties
recognize that a bona fide dispute as to certain matters may
arise from time to time during the term of this Agreement
that may relate to the parties' rights and/or obligations
hereunder. The parties agree that they shall use all
reasonable efforts to resolve any dispute that may arise in
an amicable manner.
(b) Management Resolution. If the parties are
unable to resolve such a dispute within thirty (30) days,
any party may, by notice to the other parties, have such
dispute referred to the respective nominees of the parties.
Such nominees shall attempt to resolve the referred dispute
by good faith negotiations within thirty (30) days after
such notice is received. If the designated nominees are not
able to resolve such dispute within such thirty (30) day
period, then the parties shall select a mediator to aid them
in resolving such dispute through the Center for Public
Resources. If the parties do not agree to pursue mediation
or, pursuant to such mediation the parties do not resolve
their dispute, the parties shall at such time initiate
arbitration under the Rules of the American Arbitration
Association then in effect. The arbitration proceedings
shall be held in New York, New York.
SECTION 16.02. Injunctive Relief and Damages.
(a) Notwithstanding Section 16.01 above, the complaining
party reserves the right to seek injunctive or other legal
or equitable relief, in a court of competent jurisdiction,
if, at its election, the complaining party reasonably
believes that such relief is necessary. In the event of a
breach by any party of any of its obligations under this
Agreement, in addition to being entitled to exercise all
rights granted by law, any other party to this Agreement
will be entitled to specific performance of its rights
hereunder. Each party agrees that monetary damages would
not be adequate compensation for any loss incurred by reason
of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action
for specific performance in respect of such breach, it shall
waive the defense that a remedy at law would be adequate.
In addition, in the event that any party breaches any of its
obligations under this Agreement, any other party is
entitled to any damages from the breaching party resulting
from that breach that it proves in litigation to enforce or
terminate this Agreement.
(b) A breach of a provision of this Agreement or
a Settlement Agreement by a party to any such agreement
other than Bayer (a "Breaching Party") that results in a
material adverse effect on the value to Bayer of the Patents
taken as a whole either in the United States or worldwide
shall constitute a breach of this Agreement. In such event,
Bayer may pursue its remedies for such breach against the
Purchasers, except that Bayer may not pursue remedies for
money damages against any party other than the Breaching
Party.
(c) Upon a breach of this Agreement, the
Breaching Party (or if the Breaching Party is not a
Purchaser, the Purchaser that is an affiliate of the
Breaching Party) shall reimburse Bayer for Bayer's cost of
all supplies purchased and on hand or on irrevocable order,
if such supplies were ordered by Bayer based on firm
purchase orders and such supplies cannot be reasonably used
by Bayer for other purposes. Bayer shall invoice the
Breaching Party for amounts due hereunder within sixty
(60) days.
ARTICLE XVII
Waiver--Modification of Agreement
No waiver or modification of any of the terms of
this Agreement shall be valid unless in writing and signed
by authorized representatives of the parties hereto.
Failure by either party to enforce any rights under this
Agreement shall not be construed as a waiver of such rights
nor shall a waiver by a party in one or more instances be
construed as constituting a continuing waiver or as a waiver
in other instances.
ARTICLE XVIII
Severability
If any term or provision of this Agreement shall
for any reason be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability
shall not affect any other term or provision hereof, and
this Agreement shall be interpreted and construed as if such
term or provision, to the extent the same shall have been
held to be invalid, illegal or unenforceable, had never been
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ARTICLE XIX
Headings
The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
ARTICLE XX
VAT
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The parties intending to be bound by the terms and
conditions hereof have caused this Agreement to be signed by
their duly authorized representatives on the date first
above written.
BARR LABORATORIES, INC.
by
Name:
Title:
HOECHST MARION ROUSSEL, INC.,
by
Name:
Title:
BAYER AG,
by
____________________
Name:
Title:
BAYER CORPORATION,
by
Name:
Title: