AGREEMENT
HEALTH REGISTRATION, TRADEMARK, ASSETS AND STOCK TRANSFER
This Agreement (hereinafter Agreement) dated as of the 27th of June, 2000 is
entered in Madrid (Spain) by and
BETWEEN
FABRICA DE PRODUCTOS QUIMICOS Y FARMACEUTICOS ABELLO, S.A. a company organized
under the laws of Spain and having its legal address at Josefa Valcarcel 38,
28027 Madrid (hereinafter referred to as SELLER)
AND
LABORATORIOS BELMAC, S.A., a company organized and existing under the laws of
Spain and having its principal office at c/Montearagon 9, 1a pta., 28033 Madrid
(hereinafter referred to as PURCHASER)
WITNESSETH
WHEREAS, SELLER owns the health Registrations ("the Health Registrations") for
the human prescription pharmaceutical products containing the chemical substance
`Codeine phosphate' as sole active ingredient ("the Products") in Spain and
sells the Products under the registered trademark CODEISAN ("the Trademark").
The Health Registration, the Product and the Trademark are defined in Schedule A
hereto.
WHEREAS, SELLER owns the machinery and equipment for the manufacturing of the
Products ("the Assets") as defined in Schedule B hereto.
WHEREAS, SELLER wishes to assign and PURCHASER wishes to obtain the Health
Registrations and the Trademark for the Products under the conditions
established in this document.
WHEREAS, SELLER wishes to sell and PURCHASER wishes to purchase SELLER's stock
of Products, Products related inventory and Assets, under the conditions
established in this document.
NOW THEREFORE, in consideration of the premises and mutual covenants hereinafter
set forth, the parties hereto agree as follows:
ARTICLE 1. - ASSIGNMENT OF HEALTH REGISTRATIONS
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1.1 SELLER hereby assigns to PURCHASER and PURCHASER accepts, all rights to
and in the Health Registrations (defined in Schedule A hereto) with all
their rights and obligations, for the consideration of Pesetas two
million (2,000,000.-Ptas) VAT excluded, each Health Registration, which
amounts to a total of Pesetas Four Million (4,000,000.-Ptas.) VAT
excluded, payable by certified check to the order of SELLER on the date
the Health Registration transfer is formalized in the Notary deed
mentioned in Article 7.1 below.
1.2 PURCHASER shall bear all the expenses, taxes and other charges related
to the transfer of the Health Registrations as provided herein.
ARTICLE 2. - MARKET SUPPLY
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2.1 SELLER undertakes to supply regularly to the market all the
requirements of finished form Products until the date the Health
Registration transfer to PURCHASER is duly authorized by the Spanish
Health Ministry ("Transfer Date").
2.2 After the Transfer Date, PURCHASER shall have any and all
responsibilities for the Products, and expressly defend, indemnify and
hold SELLER harmless from any and all liability which concerns such
Products, Trademark or the Health Registrations and which may arise
from events occurring subsequent to the Transfer Date. Notwithstanding
the before mentioned, provisions from Article 5 and 6 in this Agreement
shall be applied.
ARTICLE 3. - ASSIGNMENT OF TRADEMARK
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3.1 At the Transfer Date SELLER shall assign to PURCHASER and PURCHASER
shall accept, all rights to and in the Trademark (as defined in
Schedule A hereto) with all their rights and obligations, for the
consideration of Pesetas Eight hundred and forty six million
(846,000,000.-Ptas) VAT excluded, payable by certified check to the
order of SELLER on the date the Trademark transfer is formalized in the
Notary deed mentioned in Article 7.2 below.
ARTICLE 4. - TRANSFER OF ASSETS
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4.1 At the Transfer Date SELLER shall sell to PURCHASER and PURCHASER shall
buy, the Assets (as defined in Schedule B hereto) with all their rights
and obligations, for the consideration of Pesetas two million and seven
hundred fifty thousand (2,750,000.-Ptas) VAT excluded, payable by
certified check to the order of SELLER no later than fifteen days from
SELLER's invoice.
4.2 Delivery will be in SELLER's affiliate facility in Alcala de Ilenares
(Madrid). SELLER will assist PURCHASER with transportation to PURCHASER
facility in Zaragoza and with installing the assets. Transportation
costs will be paid by SELLER.
ARTICLE 5. - TRANSFER OF GOODS IN INVENTORY
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5.1 At the Transfer Date, both parties hereto will jointly take a physical
count of Product related inventory in SELLER's warehouse. PURCHASER
will assume ownership of all SELLER's stock on that moment. Forecasts
of inventories are defined in Schedule C hereto.
5.2 SELLER agrees to defend, indemnify and hold PURCHASER harmless from any
loss claim or damage to the extent that such loss, claim or damage
arises out of SELLER's defective manufacture of Product related stock
purchased by PURCHASER under this Agreement.
5.3 Payment of the referenced purchase shall be made against SELLER's
invoice for the total amount of the purchased inventory, according to
the following payment schedule; one third of the total amount, not
later than 30 days from the date of SELLER's invoice; one third on
later than 60 days after invoice date; and the final third of the total
amount, no later than 90 days from the SELLER's invoice date. Payments
shall be effective by certified check to the order of SELLER.
5.4 The above-mentioned inventory, to be purchased by PURCHASER is made up
of the following, and will be purchased at PURCHASER's warehouse prices
set forth below and in Schedule B hereto.
Finished form products (per pack):
125 ml. Jarabe = 131 ptas.
30 mg. 10 comprimedos = 70 ptas.
30 mg. 20 comprimidos = 118 ptas.
ARTICLE 6. - TRADE RETURNS
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6.1 Finished form Products purchased by PURCHASER pursuant to Article 5
above will be identified on the Transfer Date by their batch number.
PURCHASER will be fully responsible for any returns from customers
regarding such Products unless the return is due to faulty manufacture
on SELLER's part.
6.2 With respect to Products sold by SELLER in the market prior to the
final transfer of ownership to PURCHASER, the parties agree as follows:
(a) For a period of one (1) year starting with the actual date on
which PURCHASER undertakes the sale of the Products, PURCHASER
will accept and bear the cost of replacement of all sales
returns related to the Product, provided that the sales and
return level of the Products accounted in units of products
for the period of six (6) Months prior to the actual date of
the transfer of ownership, do not substantially exceed those
of the same period of the preceding year - i.e. no
overstocking has taken place and provided furthermore that the
returns are not due to SELLER's fault. For these purposes,
SELLER shall provide PURCHASER with information on Products
returned in year 1999.
(b) Any sales returns received and cleared by SELLER during this
period and which are not related to SELLER's quality problems,
will be resent to and accepted by PURCHASER. For these returns
SELLER will charge PURCHASER the amount actually credited to
the customer.
6.3 In any event PURCHASER and SELLER agree to assist each other with
respect to trade returns in order to minimize the loss for either
party.
ARTICLE 7. - NOTARY DEED
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7.1 For the purpose of the registration and acceptance by the Spanish
authorities of the Health Registrations in a Notary deed, such
notarized document will not constitute a novation of this Agreement.
7.2 Within three days from the Transfer Date, both parties hereto shall
formalize the transfer of the Trademark in a Notary deed. Such
notarized document will not constitute a novation of this Agreement.
ARTICLE 8. - COOPERATION
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8.1 Both parties hereto shall fully cooperate to accomplish in an expedient
manner the registration and acceptance by the Spanish authorities of
the Health Registration transfer herein agreed, and to fulfill any
other of the provisions of this Agreement.
ARTICLE 9. - TERMINATION
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9.1 SELLER may terminate this Agreement effective immediately upon written
notice to PURCHASER, at any time from November 1, 2000, if the
authorization of the Spanish Health Ministry ("Transfer Date") pursuant to
article 2 above has not yet been obtained.
9.2 Upon such termination, transfer of Health Registration will become
automatically null. Each party shall assign, transfer and/pr return to the
other any and all rights, documents, papers, records and/or payments as
might have been made up to the termination date, and shall also execute any
and all documents as necessary arising from such termination. Each party
will assume its own costs and expenses incurred up to termination and/or
those coming from such termination.
ARTICLE 10. - ARBITRATION
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10.1 This Agreement shall be interpreted by and construed according to the laws
of Spain. In the event of any dispute or claim arising out of or relating
to any provision of the Agreement or breach thereof, the parties shall try
to settle those amicably between themselves.
10.2 Should they fail to agree, the matter in dispute shall be referred for
final arbitration to the Camara de Comercio e Industria de Madrid, which
will administer, govern and conduct the arbitration and the designation of
English speaking arbitrators in accordance with its Regulations and
Statues.
10.3 The parties expressly commit themselves to comply with the award rendered
by such arbitration.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in two originals by their duly authorized representatives.
LABORATORIOS BELMAC S.A. FABRICA DE PRODUCTOS QUIMICOS Y
FARMACEUTICOS ABELLO, S.A.
/s/ James R. Murphy /s/ Ramiro Fandino Vazquez
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Name: James R. Murphy Name: Ramiro Fandino Vazquez
Title: Consejero Delegado Title: Director
Date: Date:
INDEX OF SCHEDULES
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SCHEDULE A - HEALTH REGISTRATION, TRADEMARK AND
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PRODUCT DESCRIPTIONS
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SCHEDULE B - MACHINERY AND EQUIPMENT
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SCHEDULE C - PRODUCT INVENTORY
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