Exhibit 4.1
[DRAXIS LETTERHEAD]
CONFIDENTIAL
DELIVERED BY HAND
November 12, 1997
Dr. Martin Barkin
Chairman
DAHI Animal Health Inc.
7101 College Boulevard, Suite 580
Overland Park, KS 66210
U.S.A
Dear Martin:
RE: PFIZER INC. ("PFIZER") TRANSACTION
Reference is made to a Distribution Agreement for Canada entered into between
DAHI Animal Health Inc. and DAHI Animal Health (Ontario) Inc., both
wholly-owned subsidiaries of Draxis Health Inc. (collectively "Draxis") and
Deprenyl Animal Health, Inc. ("DAHI") dated as of January 9, 1996 (the
"Canadian Distribution Agreement"). Reference is also made to a Master
Agreement between Draxis, DAHI and Pfizer, a License Agreement between
DAHI and Pfizer, a Research Agreement between Draxis, DAHI and Pfizer
two Manufacturing and Supply Agreements between Pfizer and Draxis all dated
as of November 12, 1997 (collectively the "Pfizer Agreements" or the "Pfizer
Transaction"). Terms capitalized and not otherwise defined herein shall have
the meanings ascribed thereto in the Pfizer Agreements.
The following will set out the terms and conditions upon which Draxis shall
transfer to DAHI the rights under the Canadian Distribution Agreement and
thereby terminate the Distribution Agreement for purposes of the Pfizer
Transaction immediately prior to the Effective Date of the Pfizer Agreements:
1. DAHI shall pay to Draxis US$2.2 million immediately following the
Effective Date of the Pfizer Agreements;
2. DAHI shall cause Pfizer to enter into the Supply and Manufacturing
Agreement for Anipryl-Registered Trademark- with Draxis;
3. Draxis shall guarantee all of the obligations of DAHI under the Pfizer
Agreements by signing the Pfizer Agreements or by way of separate
guarantee;
4. Draxis shall arrange for the release of the security interest in DAHI
assets held by the Royal Bank of Canada and Royal Bank Capital
Corporation contemporaneously with the closing of the Pfizer Transaction;
5. Draxis shall ensure, on DAHI's behalf, that DAHI's obligations under the
Chinoin Agreement dated as of October 1, 1990 and amended as of July 5,
1995 to purchase selegiline hydrocloride are satisfied;
6. DAHI shall sell to Draxis Health Inc. all inventory of
Anipryl-Registered Trademark- currently held by DAHI immediately prior
to the closing of the Pfizer Transaction. The purchase price for such
inventory shall be DAHI's inventory carrying value and shall be paid to
DAHI immediately following closing of the Pfizer Transaction;
7. For greater certainty, DAHI shall be responsible for its out-of-pocket
transaction costs incurred in connection with the Pfizer Agreements,
including investment banking fees of Salomon Brothers Inc., legal fees,
etc.; and
8. Immediately following the Pfizer Transaction, DAHI shall pay to Draxis
US$1 million on account of management and advisory services provided in
connection with the Pfizer Transaction, including negotiating,
structuring and preparing or settling the Pfizer Agreements and
accounting, tax and legal advice.
If you are in agreement with the foregoing, please sign in the space provided
below.
Yours very truly
DRAXIS HEALTH INC. DAHI ANIMAL HEALTH INC.
Per: /s/ Jim Garner Per: /s/ Martin Barkin
------------------------- ------------------------
Jim Garner Martin Barkin
The foregoing is acknowledged and agreed to:
DEPRENYL ANIMAL HEALTH, INC. DAHI ANIMAL HEALTH (ONTARIO) INC.
Per: /s/ Martin Barkin Per: /s/ Martin Barkin
------------------------- ----------------------------
Martin Barkin Martin Barkin
/II
c. David Stevens
Jacqueline Le Saux
Laura Saylor
MASTER AGREEMENT
Dated November 12, 1997
Among
Draxis Health Inc.
Deprenyl Animal Health Inc.
and
Pfizer Inc.
1. DEFINITIONS....................................................... 1
2. TRANSFER OF CANADIAN REGISTRATIONS, U.S. CUSHINGS DISEASE
REGISTRATIONS, TRADEMARKS AND TRADENAMES; EXCLUSIVE LICENSES.......... 3
3. TRANSFER OF ADDITIONAL REGISTRATIONS; PAYMENT THEREFOR, ETC....... 3
4. CLOSING........................................................... 4
5. PROMOTIONAL COMMITMENTS........................................... 5
5.1. PROMOTION OF THE PRODUCT..................................... 5
5.2. MARKETING PLANS.............................................. 6
5.3. MONTHLY REPORTING............................................ 6
5.4. INVENTORY.................................................... 6
5.5. PERSONNEL.................................................... 6
5.6. CUSTOMER VISITS; SALES AND MARKETING MATERIALS............... 7
5.7. DETAILING ACTIVITY........................................... 7
5.8. PROMOTIONAL EXPENSES AND FIELD FORCE ALLOCATION.............. 7
5.9. PRICE CHANGES................................................ 8
6. DISTRIBUTOR AGREEMENTS............................................ 9
7. LIAISONS.......................................................... 9
8. REGISTRATIONS; REGULATORY MATTERS................................. 9
9. TOLLING...........................................................12
10. TRADEMARK.........................................................13
11. REPRESENTATIONS AND WARRANTIES....................................13
12. FURTHER COVENANTS.................................................15
13. INDEMNITIES.......................................................16
14. PUBLICITY.........................................................18
15. RECORDS; INSPECTION...............................................18
16. TERM, ETC.........................................................18
17. NOTICES...........................................................19
18. BINDING EFFECT....................................................19
19. COUNTERPARTS......................................................19
20. INDEPENDENT AGREEMENTS............................................19
21. AMENDMENTS........................................................19
22. NO THIRD PARTY BENEFICIARIES; INDEPENDENT CONTRACTORS.............20
23. ASSIGNMENT AND SUCCESSORS.........................................20
24. WAIVERS...........................................................20
25. FORCE MAJEURE.....................................................20
26. SEVERABILITY......................................................20
27. FURTHER ASSURANCES................................................20
28. CONFIDENTIALITY...................................................20
29. GOVERNING LAW.....................................................21
30. ENTIRE AGREEMENT..................................................21
31. HEADINGS..........................................................21
EXHIBIT 1 - LIST OF MAJOR COUNTRIES...................................23
EXHIBIT 2 - DESCRIPTION OF PFIZER'S METHOD OF MEASURING RELATIVE
DETAILING ACTIVITY....................................................24
EXHIBIT 3 - DESCRIPTION OF PROMOTIONAL EXPENSE AND FIELD FORCE
ALLOCATION............................................................25
EXHIBIT 4 - DISTRIBUTOR AGREEMENTS....................................26
EXHIBIT 5 - DESCRIPTION OF REGISTRATIONS EITHER OBTAINED OR PENDING
ON THE EFFECTIVE DATE.................................................27
EXHIBIT 6 - DESCRIPTION OF PRODUCT DOSSIERS...........................28
EXHIBIT 7 - DESCRIPTION OF TECHNICAL ASSISTANCE AND TRAINING..........29
MASTER AGREEMENT
Master Agreement, dated November 12, 1997 among Draxis Health Inc.
("Draxis"), a Canada corporation and Deprenyl Animal Health, Inc. ("DAHI"), a
Louisiana corporation and a wholly owned subsidiary of Draxis, on the one
hand, and Pfizer Inc. ("Pfizer"), a Delaware corporation, on the other hand.
Draxis, DAHI and Pfizer hereby agree as follows:
1. Definitions. Capitalized terms used herein without definition shall have
the meanings specified in the other Agreements.
"Affiliate" means, with respect to any party, its respective direct or
indirect ultimate parent company, if any, and any company, firm or other
entity more than fifty (50) percent (or such lesser percentage as which is
the maximum allowed to be owned by a foreign corporation in a particular
jurisdiction) of whose issued and voting capital or share participation is
owned or controlled, directly or indirectly, by said party or by its parent
company, but only for so long as said ownership or control shall continue.
"Agreements" means this Master Agreement and the License Agreement (the
"License Agreement", between DAHI and Pfizer), the Manufacturing and Supply
Agreements (the "Manufacturing Agreements",) each between Draxis and Pfizer,
and the Research Agreement (the "Research Agreement"), among Draxis, DAHI and
Pfizer, each dated the date hereof.
"Chinoin Agreement" means the Supply Agreement between Chinoin Pharmaceutical
and Chemical Works Co. Ltd. ("Chinoin"), a wholly owned subsidiary of
Sanofi., and DAHI, dated as of October 1, 1990, and amended and supplemented
as of July 5, 1995.
"Chinoin Process" means a process for manufacturing selegiline hydrochloride,
which process would infringe at least one of the following patents: Canadian
No. 1,215,394 and U.S. No. 4,564,706 and foreign equivalents, as set forth in
Appendix A of the Chinoin Agreement.
"Cognitive Disease Registration" has the meaning specified in the definition
of Registration.
"Compound" means the chemical compound known as selegiline hydrochloride,
having the chemical formula (-)-N-alpha-dimethyl-N-2-propylbenzene-ethanamine
and any salts and derivatives thereof.
"Confidential Information" means all information which is disclosed by one
party to another party and designated "Confidential" in writing by the
disclosing party or parties at the time of disclosure to the other party or
parties, to the extent that such information as of the date of disclosure was
(i) demonstrably known to receiving party or parties, other than by virtue of
a prior confidential disclosure to by the disclosing party or parties; or
(ii) disclosed in published literature or otherwise known to the public
through no fault or omission of the receiving party or parties; or (iii)
obtained by the receiving party or parties from a non-Affiliate free from any
obligation of confidentiality to the disclosing party or parties; or (iv)
derived independently by the receiving party or parties, which it or they can
demonstrate was so derived without reference to any disclosure by the
disclosing party or parties.
"Cushings Disease Registration" has the meaning specified in the definition
of Registration.
"Disclosure Book" means a book, dated the Effective Date and certified as
complete and correct by an appropriate corporate officer of each of Draxis and
DAHI Draxis containing the
agreements, patents, and registrations and other documents referred to herein
as appearing therein.
"Distributor Agreements" has the meaning specified in Section 6(a).
"dollar amounts". All dollar amounts contained herein shall refer to United
States dollars.
"Effective Date" shall mean the closing date specified in Section 4(a) below.
"Field" shall mean the animal health field excluding the human health field.
"Field Force Allocation" means the amount spent by Pfizer for Direct Selling
Expenses, which includes salaries, benefits, travel and entertainment and
similar expenses for the Animal Health Division's sales representatives and
supervisors in the United States and the cost of sales meetings and
automobile fleet expenses incurred by such representatives and supervisors,
as those costs and expense are allocated by Pfizer in the ordinary course of
its business to the promotion of various Animal Health products in the United
States, on a basis consistent with its current allocation practice.
*
"License Agreement" has the meaning specified in the definition of Agreement.
"Major Countries" shall mean the countries listed in Exhibit 1.
"Manufacturing Agreements" shall have the meaning specified in the definition
of Agreements.
"Other Registration" shall mean the commercial marketing approval of any
Product (including the associated dossier, if any) by the relevant
governmental regulatory authority (a) for countries specifically referred to
in Sections 2(a) and 3(b) other than a Cushings Disease Registration, a
Cognitive Dysfunction Syndrome Registration or an * and (b)
for any other country, any Registration for any Product, including a Cushings
Disease Registration, a Cognitive Dysfunction Syndrome Registration or an
* ; an Other Registration shall become a "Registration" if
substituted for a surrendered Registration, as provided in Section 8(i) hereof.
"Patents" shall have the meaning specified in the License Agreement.
"Products" means any or all compositions containing Compound as a
therapeutically active ingredient used or useful in the Field.
"Promotion Expenses" means direct costs of advertising by any media,
including, but not limited to television, radio and publications, seminars,
symposiums, field days, promotional literature, product samples, product
promotional items and market support trials.
"Registration shall mean the commercial marketing approval of any Product
(including the associated product registration dossiers, if any) by the
relevant governmental regulatory authority, for one or more of the following
indications or substantially similar indications in any country specifically
referred to in Sections 2(a) or 3(b):
(a) Cushings Disease (a "Cushings Disease Registration"): Approval
for use in the control of canine pituitary-dependent
hyperadrenocorticism or the clinical signs associated with canine
pituitary-dependent hyperadrenocorticism.
* Material has been omitted and filed separately with the Securities and
Exchange Commission
(b) Cognitive Dysfunction Syndrome (a "Cognitive Disease
Registration"): Approval for use in the management of behavior
problems associated with clinical, geriatric, canine learning and
memory functions.
*
"Research Program" shall have the meaning specified in the Research Agreement.
"Sanofi" shall mean Sanofi Sante Animale S.A., a France Societe Anonyme.
"Research Agreement" shall have the meaning specified in the definition of
Agreements.
"Technical Information" shall have the meaning specified in the License
Agreement.
"Trademarks" shall have the meaning specified in the License Agreement.
"Tradenames" shall have the meaning specified in the License Agreement.
"U.S. Approval" shall have the meaning specified in Section 5.7.
2. Transfer of Canadian Registrations, U.S. Cushings Disease Registrations,
Trademarks and Tradenames; Exclusive Licenses.
(a). In consideration of the payment of $15,090,000 by Pfizer to
DAHI on the Effective Date, DAHI hereby transfers to Pfizer all its
right, title and interest in and to the Canadian Cushings Disease
Registration, the Canadian Cognitive Dysfunction Syndrome Registration
and the United States Cushings Disease Registration.
(b) In further consideration of such payment, DAHI grants to
Pfizer the exclusive world-wide licenses contained in the License
Agreement, subject to the terms of the License Agreement.
3. Transfer of Additional Registrations; Payment Therefor, Etc.
(a) Subject to the applicability of Section 8(i) and in
consideration of the amounts specified below, Draxis and DAHI will
obtain in the name of Pfizer or in the name of an Affiliate of Pfizer
(as Pfizer may request) or will transfer to Pfizer or to an Affiliate
(as Pfizer may request) all its right, title and interest in any
Registrations or in any Other Registrations it may obtain in the
future in the Field.
(b) Within 30 days following the obtaining of a Registration in any
of the following countries (provided that DAHI shall have transferred
or be actively transferring such Registration to Pfizer), Pfizer will
pay DAHI the following amounts:
U.S. Cognitive Dysfunction Syndrome Registration $10 million.
* Material has been omitted and filed separately with the
Securities and Exchange Commission
First Cushings Disease Registration or Cognitive Dysfunction Syndrome
Registration in each of:
Australia $ 2 million
France $ 2 million
Germany $ 2 million
Japan $ 2 million
United Kingdom $ 2 million
Any one of the Latin American Countries $ 100 thousand
Second Cushings Disease Registration or Cognitive Dysfunction Syndrome
Registration in each of:
Australia $ 1 million
France $ 1 million
Germany $ 1 million
Japan $ 2 million
United Kingdom $ 1 million
The first Registration in a country must be for either Cushings Disease or
Cognitive Dysfunction Syndrome; the second Registration must be for the other
indication. (I.E. no payment would be due on the second Cushings Disease
Registration in a country). There shall be no payment for any Cushings
Disease Registration or any Cognitive Dysfunction Syndrome Registration in
any other country of the world.
* in each of:
Australia $ 1 million
France $ 1 million
Germany $ 1 million
Japan $ 1 million
United Kingdom $ 1 million
United States $ 3 million
There shall be no payment for any * in any other country of the world.
Except for the payments for Other Registrations as provided below with
respect to surrendered Registrations, there shall be no payment by Pfizer
to either Draxis or DAHI for any Other Registration, whether obtained by
Pfizer, Draxis or DAHI;
4. Closing. (a) The closing of the transactions contemplated by this
Agreement shall take place on December 12, 1997, or on such other date as the
parties hereto may agree at the offices of Pfizer at 235 East 42nd Street,
New York, New York.
(b) The closing under this Agreement is conditioned upon the following:
(i) The waiting period under the Hart-Scott Rodino Antitrust
Improvements Act of 1976, including any extensions thereof, shall
have expired and any investigations that may have been opened by
either the United States Department of Justice or the United
States Federal Trade Commission (by means of a request for
additional information or otherwise) shall have been terminated.
* Material has been omitted and filed separately with the
Securities and Exchange Commission
(ii) Draxis and DAHI shall have furnished Pfizer with evidence
reasonably satisfactory to Pfizer as to the release from the
security interests under any Security Agreements affecting all of the
Patents, Trademarks, Tradenames, and Registrations.
(iii) Draxis and DAHI shall have furnished Pfizer with the
Disclosure Book and all enclosures contained therein, all of such
enclosures to have been furnished to Pfizer not more than one week
before the Effective Date, and the Disclosure Book and all of its
contents shall be reasonably satisfactory to Pfizer on the
Effective Date. If Pfizer shall object to any portion of the
Disclosure Book, it shall do so immediately after receipt of such
portion from Draxis or DAHI (and in any event within two business
days of such receipt), and shall furnish Draxis and DAHI with a
detailed explanation of the basis for its objections.
(iv) Draxis and DAHI, on the one hand, and Pfizer, on the other
hand, shall deliver to the other certificates signed by their
Presidents or, in the case of Pfizer, the Animal Health Group
President, and attested by a corporate officer, repeating and
confirming each of the representations and warranties contained in
this Agreement and any other Agreement, and certifying that each
condition of closing hereunder has been fulfilled as contemplated
hereby.
(c) Upon the fulfillment of such conditions, Pfizer shall transfer
$15,090,000 to Draxis and DAHI by wire transfer in New York Clearing House
funds to
Citibank, New York,
ABA#: 021000089,
For benefit of Dean Witter Reynolds,
Beneficiary account# 40611172,
For further credit to Deprenyl Animal Health, Inc.,
Account#: 620040972-029;
Personal Contact: Else Grech: (905)677-5500, ext. 250.
5. Promotional Commitments.
5.1. Promotion of the Product. Pfizer shall, at its own expense, use
reasonable efforts in each Major Country where there exists a Registration
or Other Registration to (i) vigorously and aggressively promote, within the
bounds set by any applicable statute or regulation, the distribution of the
Product on a worldwide basis, and (ii) realize the maximum sales potential
for the Product in the Field; in all other countries, Pfizer shall use
reasonable commercial efforts within the country to so distribute and sell
the Product in the Field. In each country for which the necessary
Registration or Other Registration to market the Product has been obtained
and subject to the delivery of the Product by Draxis to Pfizer under the
Manufacturing Agreements pursuant to the terms thereof, Pfizer shall
undertake a bona fide launch of the Product and shall commence marketing
the Product (either through an Affiliate, a sublicensee or one or more
distributors) within three months (x) following the date on which any such
Registration or Other Registration is effective or (y), if the U.S.
Cognitive Dysfunction Syndrome Registration is not then effective, within
three months of the date on which the U.S. Cognitive Dysfunction Syndrome
Registration is approved. Draxis and DAHI shall promptly notify Pfizer,
and Pfizer shall promptly notify Draxis and DAHI, when approval of each
Registration and Other Registration is obtained, by Draxis, DAHI or Pfizer,
as the case may be. Pfizer shall promptly notify Draxis and DAHI when
marketing is commenced in each country with respect to each Registration
obtained. If Pfizer shall fail to undertake a bona fide launch of the Product
and commence marketing the Product within the time required following
approval of a Registration or Other Registration in any country other than
the
United States (as to which specific provision is set forth in this Agreement
in Section 5.7), Pfizer will within 30 days reassign or transfer ownership of
the Registration or Other Registration (and any other Registrations and
Other Registrations in such country) and all rights under the License
Agreement to Draxis or DAHI, as Draxis and DAHI shall specify, all as set
forth in Section 8(i) below (dealing with the surrender of Registrations),
and thereafter, Draxis or DAHI, as the case may be, shall thereafter hold
all rights to commercialize the Product in such country. THE PARTIES AGREE
THAT A FAILURE BY PFIZER TO LAUNCH THE PRODUCT IN ANY PARTICULAR COUNTRY
(EXCEPT THE U.S.) WITHIN THE SPECIFIED TIME PERIOD SET FORTH IN THIS SECTION
5.1 (AS SUCH TIME PERIOD MAY BE EXTENDED BY THE OCCURRENCE OF AN EVENT OF
FORCE MAJEURE AND A REASONABLE PERIOD OF TIME TO RECOVER FROM SUCH EVENT)
IS NOT CURABLE UNDER THIS AGREEMENT.
5.2. Marketing Plans. Within sixty days after the Effective Date, Pfizer
shall provide Draxis and DAHI with a written report detailing the
marketing activities Pfizer will pursue with respect to the Product during
1998, including without limitation, budgets and resource commitments.
Thereafter, during the term of this Agreement, Pfizer shall provide Draxis
and DAHI with quarterly written reports regarding Pfizer's marketing
activities and marketing plans for the Product, and Draxis and DAHI shall
have the right to review and comment on such activities and plans. Pfizer
will consider such comments in good faith, but shall retain the sole right
and responsibility, in its sole discretion, to carry out such activities and
plans.
5.3. Monthly Reporting. Pfizer shall provide to Draxis and DAHI within 30
days following the end of each month during the term of the Agreement:
(a). A monthly Inventory Report, setting forth Pfizer's inventory
of Units on hand in the United States on the last day of each of
Pfizer's fiscal accounting periods (four or five weeks), including
Product Lot numbers; and
(b). A Monthly Sales Report, setting forth Pfizer's Product sales
in Major Countries for the preceding fiscal accounting period, by
geographic region, and number of Product Units sold, which report may
be submitted in electronic or magnetic media form, and shall be
subject to verification upon request by Draxis or DAHI.
5.4. Inventory. Subject to the delivery of Product to Pfizer by Draxis on a
timely basis as provided in the Manufacturing Agreements and the existence of
a Registration or an Other Registration in the Major Country, Pfizer shall,
at its expense, maintain a sufficient inventory of the Product at all times
during the term of this Agreement as necessary in order to meet the
requirements of any customer or potential customer within any Major
Country within 48 hours after receipt by Pfizer of an inquiry or purchase
order from such customer or potential customer; in all other countries in
which there exists a Registration or an Other Registration, Pfizer shall
maintain inventories sufficient to meet the requirements of any customer or
potential customer within a commercially reasonable period within each such
country after receipt by Pfizer of an inquiry or purchase order from such
customer or potential customer.
5.5. Personnel. The parties agree that the Product cannot be effectively
marketed, supported or maintained in the United States unless Pfizer hires,
trains and supports sufficient sales and technical staff to meet its
obligations under this Agreement. Therefore, Pfizer shall:
(a) employ a sufficient number of full time animal health sales
personnel, but in no event less than fifty, to promote the Product
and to maximize sales in the United States; it is agreed that such
sales personnel may promote other products for Pfizer in the Field.
At the present time, Pfizer employs more than 50 such
sales personnel, and it is its present intention to continue to do so, but
Pfizer, in its sole discretion, may increase or decrease the number of
such sales personnel. Pfizer shall equip its sales personnel with
adequate training, marketing, technical and sales literature, including
such materials as may be made available by Draxis or DAHI and approved by
Pfizer;
(b) employ a sufficient number of full time technical staff, but in no
event less than three, having the knowledge and training necessary to meet
Pfizer's obligations to maintain and support the Products distributed in
the United States.
5.6. Customer Visits; Sales and Marketing Materials. DAHI technical
representatives may, but have no obligation, to visit existing and potential
customers with Pfizer sales personnel. Pfizer will furnish Draxis and DAHI
with copies of all advertising and marketing materials for use in the United
States, and during the first two years after the Effective Date and to the
extent reasonably practicable, drafts of promotional materials.
5.7. Detailing Activity.
(a) Pfizer's U.S. Companion Animal field force will detail
Anipryl-Registered Trademark- more than any other product detailed by such
field force (i) for the first two months during 1998 after launch by Pfizer
of the Product in the U.S. for Cushings Disease and (ii) for the first four
months after launch by Pfizer of the Product in the U.S. for Cognitive
Dysfunction Syndrome ("U.S. Approval"). If the U.S. Approval is received
on or before July 1, 1999, Pfizer will launch the Product for Cognitive
Dysfunction Syndrome within 90 days after U.S. Approval. If the U.S.
Approval is received after July 1, 1999 and if Pfizer launches another
major companion animal health product in the United States during the four
month period after U.S. Approval, such commitment to detail Cognitive
Dysfunction Syndrome may be delayed for up to 120 days after U.S.
Approval; and Pfizer's commitment to detail for four months at the number
one level may be separated into two 2-month segments of detailing at the
number one level.
(b) During the second twelve month period following commencing such
detailing for Cognitive Dysfunction Syndrome, Pfizer's U.S. Companion
Animal field force will detail Anipryl-Registered Trademark- no less than
in the fourth position.
(c) Such detailing activity will be measured in accordance with Pfizer's
ordinary methods of measuring relative detailing activity. Draxis and DAHI
each acknowledge that Pfizer has described its methods of measuring
relative promotional activity; a description of such methods appears as
Exhibit 2; and Draxis and DAHI accept those methods for the purposes of
this Agreement. PFIZER SHALL HAVE FOUR MONTHS (SUBJECT TO ANY EXTENSION OF
TIME ARISING FROM AN EVENT OF FORCE MAJEURE AS PROVIDED IN SECTION 25 OF
THIS AGREEMENT) AFTER RECEIPT OF NOTICE FROM DRAXIS OR DAHI OF CLAIMED
BREACH OF THIS SECTION TO CURE ANY ACTUAL BREACH OF THIS SECTION 5.7.
5.8. Promotional Expenses and Field Force Allocation. (a) Until world wide Net
Sales exceed $50 million in any one year, Pfizer will spend on Promotional
Expenses and Field Force Allocation in the United States for the Product at
least the following percentages of Net Sales in the United States made in that
year:
Year Percentage
1998
1999
2000 *
2001-2004
2005-2009
(b) If the approval for Cognitive Dysfunction Syndrome in the United
States is received after October 1, 1999, the percentage for 1999 shall
be * the percentage for 2000 and until such approval is received shall
be * through 2004 and * during 2005 through 2009, and after such
approval is obtained, the following percentages shall be applicable for
each year commencing on the first calendar quarter after such approval:
Year Percentage
First
Second *
Third
Such percentage shall be * , after the third year and until no later
than the end of 2004, and shall be * for the period 2005 through 2009.
(c) On or before April 1 in each year commencing April 1, 1999, Pfizer
shall deliver a report to Draxis and DAHI, certified by the Vice
President of Finance, Pfizer Animal Health Group, certifying for the
previous year the world-wide Net Sales and the U.S. Net Sales, the
Promotional Expenses and the Field Force Allocation for the Product in the
United States. Examples of the computations described hereunder are set
forth in Exhibit 3.
(d) After world wide Net Sales exceed $50 million in any one year or if
the Cognitive Dysfunction Syndrome Registration is not obtained before
January 1, 2002, this Section 5.8 shall be of no further force or effect.
(e) If Pfizer shall fail to expend the amounts specified under this
Section 5.8 in any year and can demonstrate that it has a reasonable
commercial basis for so doing, the applicable percentage for each
succeeding year shall be the applicable percentage for the previous year,
provided that Pfizer may take advantage of this Section 5.8(e) in only
one year. THE PARTIES AGREE THAT A SECOND BREACH OF THIS COVENANT IS NOT
CURABLE UNDER THIS AGREEMENT.
5.9. Price Changes. If Pfizer elects to take any action with respect to the
price of the Product in any country referred to specifically in Section 2(a)
or 3 (excluding all Latin American countries) that will adversely affect the
aggregate amount of the royalties or other payments (including payments for
goods) made by Pfizer to Draxis and DAHI as compared to a scenario with
Pfizer taking no such action, then not less than 30 days before the effective
date of such action, or if such action is considered immediately necessary by
Pfizer in the exercise of best commercial judgment, as soon as practicable
before or after taking such action, Pfizer will provide Draxis and DAHI under
strict confidentiality, Pfizer's reasons, with reasonably detailed supporting
documentation, for so acting. Draxis and DAHI may provide comments to Pfizer,
provided however, that it is expressly understood and agreed by all of the
parties to this Agreement the all decisions with respect to the price of the
Product are and shall remain solely in Pfizer's unilateral control.
* Material has been omitted and filed separately with the
Securities and Exchange Commission
6. Distributor Agreements.
(a) Exhibit 4 hereto describes as of the Effective Date all agreements
(the "Distributor Agreements") between Draxis and DAHI or either of
them, on the one hand, and any non-Affiliated third party for the
distribution or sale of any Product.
(b) As of the Effective Date, Draxis and DAHI each hereby assign all
their right, title and interest in and to each Distributor Agreement to
Pfizer.
(c) Between the date of this Agreement and the Effective Date, neither
Draxis nor DAHI will take any action under any of the Distributor
Agreements without the prior written consent of Pfizer.
(d) On and after the date of this Agreement, Draxis and DAHI shall
co-operate with Pfizer in dealing with the third parties under each
Distributor Agreement, as Pfizer shall reasonably request.
7. Liaisons. Each of Pfizer, on the one hand, and Draxis and DAHI, on the
other hand, will appoint a single person for each company or companies to
serve as a liaison between Pfizer and its Affiliates, on one hand, and Draxis
and DAHI and their Affiliates, on the other hand, in implementing the
provisions of the Agreements. Each party will authorize their respective
liaisons to act on behalf of the party and its Affiliates for any matter,
subject to all necessary corporate approvals, if any. Each party will upon
request furnish the other with reasonable evidence of the corporate authority
of its liaison to act on any particular matter.
8. Registrations; Regulatory Matters.
(a) Ownership Pfizer shall have exclusive ownership of all existing
and future Registrations and Other Registrations. Unless otherwise
agreed by the parties with respect to any Registration or Other
Registration, Draxis and DAHI shall, without delay after the Effective
Date, register Pfizer as the sponsor or marketing authorization holder
for all existing or pending Registrations and Other Registrations,
provided that Pfizer shall be responsible for any governmental charges
related to making any such transfer. As the owner of the Registrations
and Other Registrations, Pfizer shall perform all activities necessary
to lawfully and adequately administer, manage, maintain, supplement, and
amend the Registrations and Other Registrations.
(b) Obtaining Registrations and Other Registrations; Costs Thereof.
Draxis and DAHI shall obtain at their sole expense all the Registrations
for the countries referred to specifically in each Major Country, except
for the Registrations in Japan and Korea. Draxis and DAHI or Pfizer may,
but shall have no obligation to, obtain any Registration in Korea. Pfizer
shall obtain at its sole expense all Registrations in Japan. None of
Draxis nor DAHI nor Pfizer shall be required to obtain any Registrations
in any other country or any Other Registrations, provided that if a party,
in its sole discretion decides to obtain a Registration in any such other
country or an Other Registration in any country, it shall be obtained in
the name of Pfizer or transferred to Pfizer and the party obtaining the
Other Registration shall pay all of the expense obtaining and transferring
such Registrations or Other Registrations.
(c) Registrations and Other Registrations Obtained by Draxis or DAHI.
Draxis and DAHI shall provide Pfizer with a reasonable opportunity to
review, comment upon, and approve all product registration dossiers
prior to submission to any governmental regulatory authority, other
than those filed prior to the Effective Date. Pfizer, acting reasonably,
shall provide Draxis and DAHI with any comments on such dossiers within 30
business days of receipt thereof, and shall respond to Draxis's and DAHI's
responses, if any, within seven days thereafter. Draxis and DAHI will
furnish Pfizer with an
opportunity to review and comment on any correspondence or other
formal communication with any regulatory agency with respect to
any pending product registration dossiers; Pfizer will respond to
any such draft communication within seven working days. Draxis and
DAHI will provide Pfizer with prior notice of all meetings,
conferences or discussions scheduled with any governmental regulatory
authority concerning and pending or issued Registration. At all such
meetings, conferences or discussions, Pfizer shall have the right to
attend and participate, either in person or by telephone. Draxis, and
Pfizer shall agree in advance in a timely manner on the agenda for all
such meetings, conferences and discussions. Draxis, DAHI and Pfizer
shall agree the criteria for any Registrations or Other Registrations
which have not been filed on the Effective Date (but not for any
Registrations for Cushings Disease or Cognitive Dysfunction Syndrome
in the United States, the United Kingdom or in any other country in
the European Community). The Registrations which have been obtained
or for which approval is currently being sought are described in
Exhibit 5. Any deviations from the existing criteria for any pending
Registration proposed by Draxis or DAHI shall be approved by Pfizer
to qualify for a payment under Section 3(b); provided, however, such
approval by Pfizer shall not be unreasonably withheld. Pfizer will not
require any additional clinical trials in order to obtain any
Registration in a country specifically referred to in Section 3(b)
unless required by the relevant regulatory authorities. Pfizer at its
expense and upon the reasonable request of Draxis or DAHI, will assist
Draxis or DAHI in obtaining Registrations; and Other Registrations;
Draxis and DAHI, at their expense and upon the reasonable request of
Pfizer, will assist Pfizer in obtaining Other Registrations.
(d) Registrations by Pfizer in Japan. Within four months of the
Effective Date, Pfizer will furnish Draxis and DAHI with a
comprehensive plan of action to obtain the Registrations in Japan;
Draxis and DAHI at their expense and upon the reasonable request
of Pfizer, will assist Pfizer in developing such plan of action.
As soon as practicable thereafter, Pfizer will use its reasonably
diligent efforts to obtain such Registrations, including, without
limitation, conducting such clinical trials as Pfizer deems
necessary and reasonable to obtain such Registrations. Draxis and
DAHI at their expense and upon the reasonable request of Pfizer,
will assist Pfizer in obtaining such Registrations.
(e) Assistance Generally. Draxis and DAHI and Pfizer and each of
their Affiliates will each provide the other party hereto with
assistance and will take all reasonable action requested by the
other party to comply with any law or regulatory requirement
applicable to the manufacture, packaging, distribution, marketing,
or sale of any Product including reporting and other obligations
necessary to maintain and update new animal drug approvals and
marketing authorizations for the Product.
(f) Sharing of Information and Safety Reporting.
(i) Draxis and DAHI shall each use its reasonably diligent
efforts to promptly investigate, collect and provide to
Pfizer information concerning any complaints about the
safety or effectiveness of any Product and information
about any adverse events of any Product associated with
the use or its safety or efficacy from any source
throughout the world and any information that may be
required from Pfizer by or for the U.S. Food and Drug
Administration or other similar regulatory agencies
outside the United States.
(ii) Pfizer shall provide written notification to Draxis
and DAHI of regulatory information relating to any
Product, required by or for FDA and other regulatory
agencies and the required reporting schedule(s). After
receipt of any notification of any complaint described in
Section 7(f)(i), including information about any adverse
events associated with the use of any Product or other
complaints or
information about its safety or effectiveness, Draxis and
DAHI shall provide the required regulatory information to
Pfizer promptly so as to allow Pfizer a reasonable
opportunity to assess, evaluate, and report the
information to such regulatory agencies in a timely
manner. Pfizer shall determine whether complaints and
reports relating to any adverse drug experience must be
reported to FDA or any other regulatory agency.
(iii) Draxis and DAHI shall notify Pfizer immediately upon
receiving information from FDA or any other regulatory
authority or any other person concerning the possibility
of a material problem with the safety or effectiveness of
any Product, or any complaint concerning suspected or
actual product tampering or the contamination or mix-up
with or in the ingredients in any batch, package or
container of Product. Further, Draxis and DAHI shall
provide to Pfizer, immediately upon its receipt of such
information, copies of all communications with or from a
governmental regulatory authority about the manufacture,
sale, promotion, distribution, or clinical investigation
of any Product and any governmental review or inquiry
about any Product, the need for a recall or withdrawal of
one or more batches of any Product from the market, the
initiation of a government investigation, detention,
seizure or injunction of any Product, the initiation of a
government inspection of the facilities used in
conjunction with the manufacturing or distribution of any
Product, or the receipt of any complaint concerning
suspected or actual product tampering or the contamination
or mix-up with or in the ingredients in any batch,
package, or container of any Product.
(iv) Draxis and DAHI shall provide to Pfizer, within 48
hours of its receipt of such information, copies of all
reports of unexpected side effects, injuries, toxicities,
or sensitivity reactions associated with the clinical use
of any Product or with studies, investigations, or tests
involving any Product, whether or not determined to be
attributable to such Product, all reports of any
unexpected incidence or severity of such side effects,
injuries, toxicities, or sensitivity reaction, and all
veterinarian, customer, or user complaints about such
Product.
(v) Pfizer will furnish Draxis and DAHI within 30 days
after receipt with all information of the type described
in Section 8(f) (iii) and (iv).
(g) Post-Approval Regulatory Responsibility.
(i) Pfizer shall have exclusive authority and
responsibility to obtain, maintain and seek any revisions
to any Registration and any Other Registration, except
that Draxis and DAHI shall be authorized to obtain
supplemental Registrations in accordance with the
provisions of this Agreement, and Draxis and DAHI may
comment on all such initiatives prior to any submission by
Pfizer for such governmental or regulatory approvals.
Pfizer shall also have the exclusive authority and
responsibility to obtain, maintain and seek any revisions
to Registrations of any Product, anywhere in the world,
and Draxis and DAHI may comment on all such initiatives
prior to any submission by Pfizer for such governmental or
regulatory approvals; this provision shall not apply to
new marketing authorizations and marketing authorizations for
additional indications for the Product, which DAHI shall
be authorized to obtain in accordance with the provisions
of this Agreement.
(ii) Draxis and DAHI shall notify Pfizer of all changes
made in conjunction with the manufacturing, processing,
packaging, labeling, or holding of any Product and shall
obtain Pfizer's acceptance, in writing, before
implementing such changes. Pfizer shall have exclusive
authority and responsibility to seek and/or obtain any
necessary approvals of such changes.
(iii) Pfizer shall have exclusive authority and
responsibility to develop, manufacture and distribute
promotional materials relating to any Product and to seek
regulatory approval of such materials.
(h) Recalls or Other Corrective Actions.
(i) Pfizer shall be responsible for making all decisions
with respect to any recall, market withdrawal or other
corrective action related to any Product. Further, at
Pfizer's request, Draxis and DAHI shall provide all
reasonable assistance in effectuating any recall, market
withdrawal or other corrective action. In so doing, Pfizer
agrees to reimburse Draxis and DAHI for any documented,
direct, out-of-pocket costs incurred by Draxis or DAHI in
such recall, market withdrawal or other corrective action.
(ii) Pfizer will, to the extent possible under the
circumstances, promptly notify Draxis and DAHI of any such
market withdrawal or other corrective action, and if
possible under the circumstances, meet and consult with
Draxis and DAHI with respect thereto.
(i) Surrender of Registrations. With respect to any Registration
for any country specified in Section 3 (other than the United
States), Pfizer may at any time before such Registration issues, or
within 60 days after the date of issue of such Registration,
surrender to Draxis or DAHI such Registration or its rights to such
Registration, as well as any other Registrations in that country.
Such surrender will be deemed complete upon written notice being
delivered to Draxis and DAHI, notwithstanding that effectiveness
may necessitate further correspondence with the relevant regulatory
agency. Pfizer shall then be relieved of any obligation to make the
payment for such Registration provided for in Section 3(b),
provided that Pfizer shall be required to apply any unpaid
milestone payments to other Major Countries and provided further
that neither Draxis nor DAHI shall be obligated to refund any
milestone payments already received for any Registration for that
country. If Pfizer exercises it rights under this Section for
France, the total milestone payments for France for each
Registration shall be divided by two, and applied to Registrations
in Spain and Italy. In determining substitutions for Registration
milestone under Section 3(a) hereof, the substituted countries shall
represent in the aggregate approximately the same size of companion
animal health market and to the extent possible, shall be in the
same geographical region; the milestone payment shall be prorated
among the substitute countries based on the relative size of their
companion animal health markets.
(j) Reassignment or Transfer. Upon any termination of this
Agreement or upon the surrender of any Registration by Pfizer to
Draxis or DAHI hereunder, Pfizer shall use its best efforts to
immediately reassign or transfer ownership, without delay, of all
Registrations and Other Registrations (in the case of termination)
or all Registrations or Other Registrations in the country in which
a Registration is surrendered (in the case of surrender) to Draxis
or DAHI or as they may specify. Thereafter, Draxis or DAHI, as the
case may be, shall thereafter hold all rights to commercialize the
Product in such country. The parties will also modify and amend the
License Agreement as appropriate to effectuate the surrender of all
rights to the Product and Technology with respect to the relevant
countries, including patent, trademark, tradename, technology and
other intellectual property rights. All costs of the transfers and
assignments made pursuant to this Section shall be borne by Pfizer.
9. Tolling. Draxis shall notify Pfizer when Draxis has a facility in Canada
that is operating and is approved by the FDA, and thereafter the parties
will evaluate in good faith whether there are any opportunities for Draxis to
toll human or animal health pharmaceutical products for Pfizer on
mutually agreed upon terms; provided, however, neither Draxis nor Pfizer
shall be under any obligation to enter into any such tolling agreement.
10. Trademark. Pfizer shall, to the extent commercially reasonable, use the
trademark Anipryl-Registered Trademark- in the marketing and sale of any
Product. If the trademark Anipryl-Registered Trademark- is not available in
any country, any of Draxis, DAHI or Pfizer may, at its expense, obtain a
substitute trademark, which shall be reasonably satisfactory to each of the
other parties; each such substitute trademark shall be obtained in the name
of, or assigned to, DAHI for no consideration; each such trademark shall
thereafter constitute a Trademark for all purposes under the License
Agreement and shall be licensed to Pfizer pursuant to the terms thereof. If
Pfizer determines that it would be commercially reasonable to use a trademark
other than Anipryl-Registered Trademark- with respect to the marketing and
sale of any Product in any country, each such trademark shall be obtained by
Pfizer at its expense, shall be assigned by Pfizer to DAHI for no
consideration and shall be registered in the name of Draxis or DAHI, as they
may elect; at Pfizer's expense; each such trademark shall thereafter
constitute a Trademark for all purposes under the License Agreement and shall
be licensed to Pfizer pursuant to the terms thereof.
11. Representations and Warranties. Draxis and DAHI, on the one hand, and
Pfizer, on the other hand, each represents and warrants on the date of
this Agreement and as of the Effective Date, as follows:
(a) Organization. Each represents and warrants that it is a corporation
duly organized, validly existing and is in good standing under the laws of
the state or Government of its incorporation, is qualified to do business and
is in good standing as a foreign corporation in each jurisdiction in which
the conduct of its business or the ownership of its properties requires such
qualification and has all requisite power and authority, corporate or
otherwise, to conduct its business as now being conducted, to own, lease and
operate its properties and to execute, deliver and perform each Agreement to
which it is a party.
(b) Authorization. Each represents and warrants that the execution, delivery
and performance by it of each Agreement to which it is a party has been duly
authorized by all necessary corporate action and does not and will not
(i) require any consent or approval of its stockholders, except in the case of
DAHI, which consent has been obtained, (ii) violate any provision of any law,
rule, regulations, order, writ, judgment, injunctions, decree, determination
award presently in effect having applicability to it or any provision of its
certificate of incorporation or by-laws or (iii) result in a breach of or
constitute a default under any material agreement, mortgage lease, license,
permit or other instrument or obligation to which it is a Party or by which
it or its properties may be bound or affected.
(c) Binding Agreement. Each represents and warrants that each Agreement to
which it is a party is its legal, valid and binding obligation, enforceable
against it in accordance with each such Agreement's terms and conditions,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws, from time to time in
effect, affecting creditor's rights generally.
(d) No Conflict. Each represents and warrants that it is not under any
obligation to any person or entity, contractual or otherwise, that is
conflicting or inconsistent in any respect with the terms of this Agreement
or that would impede the diligent and complete fulfillment of its obligations
under any Agreement to which it is a party.
(e) No Guarantee of Success. Each makes no express or implied warranties,
statutory or otherwise, concerning the success of the Research Program or the
obtaining of Registrations as contemplated by this Agreement or except as
expressly set forth herein or in any of the other Agreements, the quality,
validity, commercial utility or any other characteristics of any Product.
(f) DAHI Ownership of Patents, etc. Draxis and DAHI each represent and
warrant that the Exhibits to this Agreement or the License Agreement (i)
identify all Registrations and all Other Registrations owned by or applied
for with respect to any Product by Draxis or DAHI; (ii) identify all Patents,
whether issued or pending, and all Trademarks, whether issued or pending,
with respect to any Product and owned by or licensed to Draxis or DAHI; and
(iii) identify all Tradenames used by Draxis or DAHI with respect to any
Product. Draxis and DAHI each represents and warrants (i) that, except for
the rights granted to Pfizer under the Agreements and to the best of its
knowledge and belief on the Effective Date, DAHI has, and each of Draxis and
DAHI shall use its reasonable diligent efforts to retain, all right, title
and interest in and to the Registrations (in the name of Pfizer), the
Technical Information, the Patents, the Trademarks and the Trade Names, that
exist on the Effective Date, provided that Pfizer acknowledges that Draxis
and DAHI shall not be required to undertake any action which Pfizer is
unwilling to undertake to retain any such right, title or interest in any
such Patent, Trademark or Tradename; (ii) that DAHI owns the entire right,
title and interest in Patents and Technical Information, excluding any
technology relating to the manufacture of the Compound and has the right to
enter into this Agreement; and (iii) to the best of its knowledge and belief
on the Effective Date, DAHI has no present knowledge from which it can be
inferred that Patents are invalid or that their exercise would infringe
patent rights of third parties.
(g) No non-Affiliate Infringement. Draxis and DAHI each represents and
warrants that as of the Effective Date (i) it has no knowledge that making,
using or selling Products in the Field may or does infringe the patent rights
of any non-Affiliate, except as the manufacture of bulk selegiline may
infringe the patents described in Schedule A of the Chinoin Agreement, and
(ii) it has no knowledge that any non-Affiliate may be or is infringing the
Patents, except that Sanofi is believed to be selling a selegiline product in
the Field in Belgium and France; a court of competent jurisdiction could
determine that such sales constitute an infringement of one or more of the
Patents. In this connection, Draxis and DAHI have brought to Pfizer's
attention Patent Numbers 930504 and 931222 in France, No. 5,547,995 in the
U.S., 2,122,780 in Canada and 623,344 in the European Patent Office and
additional information contained in the Disclosure Book.
(h) Research Pipeline. Pfizer represents and warrants that neither Pfizer nor
any of its Affiliates has any Non-Compound Product candidate in clinical
trials as of the Effective Date.
(i) No non-Affiliate Rights to Products. Draxis and DAHI each represents and
warrants that as of the Effective Date it has no agreements, understandings
or undertakings with any non-Affiliate or entities regarding ownership or
disposition of any Products, except for the Distributor Agreements and as set
forth in the Disclosure Book; the Disclosure Book contains true and correct
copies of the Distributor Agreements and true and correct copies of all
documents relating thereto.
(j) Product Registrations. (i) Draxis and DAHI each represents and warrants
that, as of the date of this Agreement, Exhibit 5 sets forth the complete
list of all product registrations granted to either of them by any
governmental regulatory authority relating to any Product, that DAHI is the
sole and exclusive owner of each such registration, and that DAHI has not
authorized any right of reference with respect to any such registration.
(k) Product Dossiers. Draxis and DAHI each represents and warrants that, as
of the date of this Agreement, Exhibit 6 sets forth the complete list of all
dossiers that it has submitted to any governmental regulatory authority
relating to any Product, that DAHI is the sole and exclusive owner of each
such dossier, and that DAHI has not authorized any right of reference with
respect to any such dossier.
(l) Regulatory Compliance. Draxis and DAHI each represents and warrants that
there has been no material adverse change in the status of or circumstances
surrounding any of the issued
Registrations from each of the Registration dates, as set forth in Exhibit 5
and the date of this Agreement, except as described in Exhibit 5.
(m) Pending Registrations. Draxis and DAHI each represents and warrants that
there has been no material adverse change in the status of or circumstances
surrounding any of the pending Registrations, between the date that each
Product Dossier was submitted, as set forth in Exhibit 5 and the date of this
Agreement, except as described in Exhibit 5.
(n) Research Project. Draxis, DAHI and Pfizer each represents and warrants
that all research conducted or to be conducted by or for Draxis, DAHI or
Pfizer under the Research Agreement will comply with all applicable laws and
regulations.
(o) Chinoin Agreement. The Disclosure Book contains, or on the Effective Date
will contain, true and correct copies of the Chinoin Agreement, and all
documents related thereto.
(p) Hoechst Due Diligence Materials. The Disclosure Book contains, or on the
Effective Date will contain, true and correct copies of the all documents
furnished to Hoechst in connection with its due diligence of the Product.
(q) Brokers. Draxis, DAHI and Pfizer each represents and warrants that no
broker or finder is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this
Agreement. Draxis and DAHI are solely responsible for the fees and expenses
of Salomon Brothers, Inc. in connection with this transaction. Pfizer is
solely responsible for the fees and expenses of Lizard Ferries in connection
with this transaction.
(r) Pfizer's Investigation. Pfizer acknowledges that neither Draxis nor DAHI,
except as specifically set forth in forth in this the representations and
warranties contained in this Section, in the Exhibits or in the Disclosure
Book or in any of the other Agreements, shall have any liability for any
other representation or warranty, express or implied, in connection with the
transactions contemplated by this Agreement, including without limitation any
representation or warranty as to the accuracy or completeness of any
information disclosed to Pfizer orally with respect to the Product in
connection with Pfizer's due diligence review of the Product.
12. Further Covenants.
(a) Throughout the term of this Agreement, Draxis, DAHI and Pfizer each
shall: maintain and preserve its corporate existence, rights, franchises
and privileges in the jurisdiction of its incorporation and qualify and
remain qualified as a foreign corporation in good standing in each
jurisdiction in which such qualification is from time to time necessary
or desirable in view of their business and operations or the ownership of
their properties; and comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of
any government authority to the extent necessary to conduct the Research
Program and to fulfill their respective obligations under the Agreements,
except for those laws, rules, regulations, and orders it may be contesting
in good faith.
(b) Throughout the term of this Agreement and the Manufacturing
Agreements and until the Chinoin Agreement shall have expired,
terminated or been amended, Draxis and DAHI shall supply Product
for sale in the United States and Canada (and if either is
supplying Pfizer with bulk selegiline under the Manufacturing
Agreements, such bulk selegiline) made only from selegiline
manufactured using bulk material either purchased from Chinoin or,
if not purchased from Chinoin, made by a process other than the
Chinoin Process; and Pfizer shall sell such Product only in the
United States and Canada.
(c) Throughout the term of this Agreement and the Manufacturing
Agreements and until the Chinoin Agreement shall have expired,
terminated or been amended, Draxis and DAHI shall supply Product
for sale outside the United States and Canada (and if either is
supplying Pfizer with bulk selegiline under the Manufacturing
Agreements, such bulk selegiline) made only from selegiline
manufactured using bulk material made by a process other than the
Chinoin Process and purchased from a source other than Chinoin, and
Pfizer shall sell such Product only outside the United States and
Canada.
(d) Throughout the term of this Agreement and the Research
Agreement, Draxis and DAHI shall supply Product or selegiline under
the Research Agreement for the conduct of the clinical trials
contemplated by the Research Project made only from selegiline
purchased from Chinoin.
(e) For up to six months from the date of this Agreement, Draxis
and DAHI will provide Pfizer with technical services assistance and
training as provided in Exhibit 7.
(f) The parties will cooperate and promptly after the Effective
Date will notify the Agreements to the European Commission and will
jointly seek an individual exemption for any provisions that may
require such action. In the event that the Commission declines to
give such an exemption, or such other comfort as the parties may
agree, then the parties will negotiate in good faith to provide
equivalent benefits to those not cleared by the Commission, in a
manner acceptable to the Commission.
13. Indemnities.
(a) Draxis and DAHI shall at all times during and after the term of this
Agreement be jointly and severally responsible for, and shall defend,
indemnify and hold Pfizer, and its officers, employees and agents, harmless
from and against any and all losses, damages, costs, claims, demands, suits,
proceedings, judgments, expenses, recoveries and damages, including
reasonable legal expenses and costs and including attorneys' fees, arising
out of any claim by a third party to the extent that the basis for such claim
shall not be caused in whole or in significant part to the negligence or
intentional wrong doing of Pfizer, its officers, employees or agents:
(i) arising from any breach of a representation or warranty given
to Pfizer under this Agreement by either Draxis or DAHI, and
including, without limitation, any representation and warranty as
to the ability of Draxis or DAHI to enter into any Agreement with
respect to any country other than Canada or the United States;
(ii) asserted by any of the distributors under the Distributor
Agreements and arising from any event occurring before the date of
this Agreement;
(iii) arising from any seizure or recall by the FDA or a similar
regulatory agency in any of any state or Canada of any Product
manufactured before the Effective Date and arising from any failure
to manufacture or test product before the date hereof in accordance
with methods filed with the FDA;
(iv) any supply by Draxis or DAHI of Product or bulk selegiline
otherwise than in accordance with Section 12 (b), (c) or (d);
(v) to the extent such liability results from a product
liability claim for any Product distributed by Draxis or DAHI before
the Effective Date; and
(vi) to the extent such liability results from any aspect of the
performance or failure to perform any term of any Agreement by Draxis
or DAHI or from the negligence or willful misconduct of Draxis or
DAHI;
provided, however, that Pfizer shall give Draxis and DAHI prompt notice of
any such claim or lawsuit and, provided further, that Draxis and DAHI shall
have the right to defend or, with Pfizer's consent, which shall not be
unreasonably withheld, to compromise or settle any such claim or lawsuit.
Pfizer will cooperate with Draxis and DAHI in any such lawsuit, to the extent
Pfizer considers it reasonable so to do.
(b) Pfizer shall at all times during and after the term of this Agreement be
responsible for, and shall defend, indemnify and hold Draxis and DAHI, and
their respective officers, employees and agents, harmless from and against
any and all losses, damages, costs, claims, demands, suits, proceedings,
judgments, expenses, recoveries and damages, including reasonable legal
expenses and costs and including attorneys fees, arising out of any claim by
a third party to the extent that the basis for such claim shall not be caused
in whole or in significant part to the negligence or intentional wrong doing
of Draxis or DAHI or their officers, employees or agents:
(i) arising from any breach of a representation or warranty
given to Draxis and DAHI under this Agreement by Pfizer;
(ii) asserted by any of the distributors under the Distributor
Agreements and arising from any event occurring on or after the date
of this Agreement, including without limitation any claim that a
Distributor Agreement may not be assigned to Pfizer;
(iii) any failure by Pfizer to distribute or sell Product as
required by Section 12 (b), (c) or (d), provided that Pfizer shall
have no responsibility for distribution or sale of Product by any
non-Affiliated person to whom Pfizer shall have sold any Product;
(iv) to the extent such liability results from a product
liability claim for any Product distributed by Pfizer on or after the
Effective Date, except to the extent that Draxis shall have
indemnified Pfizer against such claim under the terms of either
Manufacturing Agreement;
(v) to the extent such liability results from any aspect of the
performance or failure to perform any term of any Agreement or from
the negligence or willful misconduct of Pfizer under any of the
Agreements;
(vi) to any claim with respect to the conduct of the Research
Project as approved by the Research Committee pursuant to the terms
of the Research Agreement;
(vii) to any claim with respect to Pfizer conducting research or
development with respect to any product which is or may be competitive
with any Product or the marketing and sale thereof; and
(viii) to any claim based on Pfizer's labeling of the Product or
its storage, handling, marketing, promotion, distribution and/or
deliver of the Product after title passes to Pfizer pursuant to either
of the Manufacturing Agreements;
provided, however, that Draxis and DAHI shall give Pfizer prompt notice of
any such claim or lawsuit and, provided further, that Pfizer shall have the
right to defend or, with DAHI's and Draxis's consent, which shall not be
unreasonably withheld, to compromise or settle any such claim or lawsuit, and
provided further that Pfizer shall not make any admission of invalidity or
unenforceability of any of the Patents, without the prior written consent of
Draxis and DAHI, such consent not to be unreasonably withheld. Draxis and DAHI
will cooperate with Pfizer in any such lawsuit, to the extent either considers
it reasonable so to do.
(c) No party shall be liable to any other party for any consequential
damages, including without limitation, loss of profits.
14. Publicity. Except as required by law and as otherwise expressly provided
in Section 16 of the Research Agreement (dealing with publication of research
results), neither Draxis nor DAHI nor Pfizer shall disclose the terms of any
Agreement without the written consent of the other parties, which consent
shall not be unreasonably withheld; the parties expressly consent to the
issuance of the press releases issued by Draxis and Pfizer on the date of
this Agreement.
15. Records; Inspection. Pfizer shall keep complete, true and accurate books
of account and records for the purpose of determining the amounts payable
Draxis and DAHI under the Agreements. Such books and records shall be kept at
Pfizer's principle place of business for at least three years following the
end of the fiscal quarter to which they pertain. Such records will be open
for inspection during such three year period by a public accounting firm to
whom Pfizer has no reasonable objection, solely for the purpose of verifying
amounts due Draxis or DAHI under any of the Agreements. Such inspections may
be made no more than once each calendar year, at reasonable times and on
reasonable notice. Inspections conducted under this Section 15 shall be at
the expense of Draxis and DAHI; provided, in the event the inspection reveals
an underpayment of five percent (5%) or more in any period, Pfizer shall pay
the costs of such inspection. The public accounting firm employees shall sign
a customary confidentiality agreement as a condition precedent to their
inspection.
16. Term, etc.
(a) Term. Unless sooner terminated or extended, this Agreement
shall expire upon the termination of the last of the Agreements.
(b) Event of Termination. Each of the following events shall
constitute an event of termination ("Event of Termination"): Draxis,
DAHI or Pfizer shall fail in any material respect to perform or
observe this Agreement or any of the other Agreements, and any such
failure shall remain unremedied for thirty days (or such longer
period as may be expressly provided in this Agreement or any of the
other Agreements with respect to any such failure) after written
notice to the failing Party.
(c) Termination. Upon the occurrence of any Event of Termination,
any party not responsible may by notice to the other parties,
terminate this Agreement and the other Agreements.
(d) Surviving Rights and Obligations. Termination of this
Agreement for any reason shall be without prejudice to DAHI's right
to re-assignment or transfer of all Registrations, Other Registrations
and any Technology licensed to or in the possession of Pfizer, the
right of any party to receive all payments accrued under
any Agreement and any other remedies which any party may otherwise
have.
17. Notices. All notices shall be in writing mailed via certified mail,
return receipt requested, courier, or facsimile transmission addressed as
follow, or to such other address as may be designated from time to time:
If to Draxis:
Draxis Health Inc.
6870 Goreway Drive
Mississauga, Ontario H4S 1W6
Canada
Attention: President
With a copy to: General Counsel
If to DAHI:
Depreny Animal Health, Inc.
7101 College Boulevard
Suite 580
Overland Park, Kansas 66210
Attention: President
If to Pfizer:
Pfizer Inc.
235 East 42nd Street
New York NY 10017-5755
Attention: President, Animal Health Group
With a copy to: Office of the General Counsel
Notices shall be deemed given as of the date mailed.
18. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective legal representatives, successors
and permitted assigns.
19. Counterparts. This Agreement may be executed in three or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Independent Agreements. Except as specifically provided herein, if for
any reason or under any circumstances any or all of the Agreements shall
terminate or shall no longer be in effect or enforceable, such shall in no way
affect the validity or enforceability of this Agreement which shall continue
in full force and effect according to its terms.
21. Amendments. Any modification, amendment or supplement to this Agreement
or any of the other Agreements shall be in writing and shall be signed by
duly authorized representatives of each party to the amended Agreement.
22. No Third Party Beneficiaries; Independent Contractors. No third party,
including any employee of any party to this Agreement, shall have or acquire
any rights by reason of this Agreement. Draxis, DAHI and Pfizer shall be
deemed to be independent contractors, and neither this Agreement nor any of
the other Agreements shall be construed to create between or among any of
Draxis, DAHI or Pfizer any other relationship such as, by way of example only,
that of employer and employee, principal and agent, joint-venturer, partner
or co-partner or any similar relationship, the existence of which is
expressly denied by the parties.
23. Assignment and Successors. None of the Agreements may be assigned by any
of the parties hereto without the consent of the other parties, except that
each party may assign the Agreements and the rights and interests of such
party, in whole or in part, to any of its Affiliates, or and, in the case of
Pfizer, to any purchaser of all or substantially all of its animal health
business, provided that Pfizer shall assign all of the Agreements to any such
purchaser.
24. Waivers. A waiver by any party of any term or condition of this Agreement
in any one instance shall not be deemed or construed to be a waiver of such
term or condition for any similar instance in the future or of any
subsequent breach hereof. All rights, remedies, undertakings, obligations
and agreements contained in this Agreement shall be cumulative and none of
them shall be a limitation of any other remedy, right, undertaking,
obligation or agreement.
25. Force Majeure. Neither Draxis nor DAHI nor Pfizer shall be liable for
failure of or delay in performing any of its obligations set forth in this
Agreement or any of the other Agreements, and none of them shall be deemed in
breach of its obligations, if such failure or delay is due to natural
disasters or any causes reasonably beyond the control of Draxis or DAHI or
Pfizer, as the case may be, including, but not limited to, strikes or other
labor disturbances, lockouts, riots, wars, fires, floods or storms, provided
that any such delay in performance shall continue only so long as performance
is prevented by any such disaster or cause and any reasonable period as may
be required to recover from such disaster or cause. A party claiming a right
to excused performance under this Section shall immediately notify the other
parties in writing of the extent of its inability to perform, the anticipated
period of time during which it believes it will be unable to perform, and the
reasonable steps it is undertaking to recover from such disaster or cause.
26. Severability. If any provision of this Agreement or any of the other
Agreements is or becomes invalid or is ruled invalid by any court of
competent jurisdiction or is deemed unenforceable it is the intention of the
parties that the remainder of this Agreement and the other Agreements shall
not be affected.
27. Further Assurances. At any time after the Effective Date, Draxis, DAHI
and Pfizer shall promptly execute, acknowledge and deliver any other
assurances or documents reasonably requested by Draxis, DAHI or Pfizer, as
the case may be, and necessary for Draxis, DAHI or Pfizer, as the case may
be, to satisfy their respective obligations hereunder or under any of the
other Agreements or to obtain the benefits contemplated hereby or thereby.
28. Confidentiality. During the term of this Agreement and the Other
Agreements, Draxis and DAHI, on the one hand, and Pfizer, on the other hand,
may disclose its Confidential Information to the other party. To the extent
that the particular disclosure is not covered by specific provisions of any
other Agreement with respect to the Confidential Information in question
(such as the provisions of confidentiality with respect to Technology as set
forth in Section 8 of the License Agreement), the parties will treat any such
disclosure of Confidential Information as follows:
(a) The Confidential Information will be used by the receiving
party or parties only
in connection with the terms of this Agreement and the Other
Agreements.
(b) The receiving party or parties will treat the Confidential
Information as it would its own proprietary information.
(c) The receiving party or parties will take all reasonable
precautions to prevent the disclosure of the Confidential
Information to any non-Affiliate, and shall disclose Confidential
Information to an Affiliate subject to the same obligations of
confidentiality.
(d) All Confidential Information shall be kept in confidence by the
receiving party or parties for a period of seven years after
disclosure.
29. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
30. Entire Agreement. This Agreement, together with the other Agreements, sets
forth the entire agreement and understanding among the parties hereto and
thereto as to the subject matter hereof and thereof and each Agreement
supersedes all previous written or oral negotiations, commitments,
agreements, transactions or understandings with respect to the subject matter
of this Agreement or the other Agreements.
31. Headings. Section headings are inserted for convenience of reference only
and do not form a part of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
DEPRENYL ANIMAL HEALTH, INC.
By: /s/ Martin Barkin
---------------------------
BY:
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DRAXIS HEALTH INC.
By: /s/ J. LeSaux
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By: /s/ James A. Garner
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PFIZER INC.
By: /s/ Robert [ILLEGIBLE]
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By: [ILLEGIBLE]
----------------------------