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EXHIBIT 10.3
DISTRIBUTORSHIP AGREEMENT
This Distributorship Agreement ("Agreement"), is entered into as of March 26,
1999, between:
LIGAND PHARMACEUTICALS, INCORPORATED, a corporation organized and existing under
the laws of the State of Delaware, U.S.A., with its principal place of business
at 10275 Science Center Drive, San Diego, California, U.S.A. and SERAGEN, INC. a
Delaware corporation having its principle place of business at 97 South Street,
Hopkinton, Massachusetts (collectively referred to herein as "Ligand")
and
FERRER INTERNACIONAL , S.A, a corporation organized and existing under the laws
of Spain with its principal place of business at Gran Via Carlos III, 94,
Barcelona, Spain ("Distributor")
W I T N E S S E T H:
A. Ligand is a leading researcher, developer and manufacturer of
biopharmaceutical products, including the Products, and is the exclusive
owner or licensee of proprietary rights in such Products.
B. Distributor is engaged in the marketing of pharmaceutical products and
has represented to Ligand that it has the facilities, personnel and
technical expertise to market and distribute the Products in the
Territory.
C. Ligand is willing to exclusively sell Products in the Territory to
Distributor on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "Affiliate" means any corporation or business entity which, directly or
indirectly, is controlled by, controls, or is under common control with
Ligand or Distributor, as applicable. For this purpose, "control"
includes, but is not limited to, direct or indirect ownership of more
than fifty percent (50%) of the voting shares or stock of such
corporation or business entity.
1.2 "Approvals" means and includes all filings, approvals,
registrations, permits, licenses and authorizations related to Product
pricing or marketing activities which
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are necessary or which, in the reasonable opinion of Ligand, are
desirable, to be made with or obtained from any Governmental Authority
for the sale of the Products in the Territory, including, without
limitation, any pricing approvals, government reimbursement approvals,
import permits and approvals concerning Distributor's facilities, but
excluding Product Authorizations.
1.3 "Base Price" means, with respect to each Product, the price set forth
in Attachment B.
1.4 "Confidential Information" means any and all data, trade secrets,
confidential knowledge, specifications, clinical data and protocols and
other proprietary information, not in the public domain, relating to
the Products and/or the business or affairs of either party (the
"Disclosing Party"). Confidential Information shall also include the
present Agreement and the terms set forth herein to the extent that it
has not been placed into the public domain by the Disclosing Party.
Confidential Information may be communicated to the other party (the
"Receiving Party") orally, visually, in writing, or in any other
recorded or tangible form. All data and information will be considered
to be Confidential Information hereunder (1) if the Disclosing Party
has marked them as such, (2) if the Disclosing Party, orally or in
writing, has advised the Receiving Party of the confidential nature,
provided that, if disclosed orally, the Disclosing Party confirms such
confidential nature in writing within two weeks thereafter; or (3) if,
due to their character or nature, a reasonable person in a like
position and under like circumstances as the Receiving Party would
treat them as secret and confidential.
1.5 "Dealer" means a sub-distributor, agent or marketing representative of
Distributor.
1.6 "Effective Date" means the date of this Agreement as designated in
preamble to this Agreement on the first page.
1.7 "Ex-Distributor Price" means the actual price at which Distributor sells
each Product to customers of Distributor, less:
(a) freight, shipping and insurance with respect to such Products;
(b) sales, excise or similar taxes imposed on the sale of the
Products;
(c) any mandatory or industry standard discounts or rebates to the
competent Governmental Authorities and/or Social Security Systems
pursuant to the regulations and/or agreements in force; and
(d) cash and trade discounts and allowances as customarily applied to
products of a similar kind in the pharmaceutical industry in the
relevant country within the Territory;
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but in each case only if paid by Distributor or actually charged
against Distributor and evidenced in Distributor's books and records of
account and the reports
provided to Ligand pursuant to Clause 9.3 hereof.
1.8 "Governmental Authority" means and includes all governmental and
regulatory bodies, agencies, departments or entities, whether or not
located in the Territory, which regulate, direct or control commerce in
or with the Territory.
1.9 "Intellectual Property Rights" means and includes all copyrights,
designs, databases, mask works, patents, trademarks, trade names and
other proprietary rights, and all registrations and applications
therefor, which Ligand may at any time own, adopt, use, license or
register with respect to a Product or its business, and includes the
Trademarks.
1.10 "Net Sale Price" means the amount equal to the percentage of the
Ex-Distributor Price for each Product in accordance with the pricing
schedule set forth in Appendix C.
1.11 "Person" means and includes any agency, association, company,
individual, or other entity regardless of the type or nature thereof.
1.12 "Product Authorizations" means and includes all filings, approvals,
registrations and authorizations relating to pharmaceutical or
medicinal products which are necessary or which, in the reasonable
opinion of Ligand, are desirable, to be made with or obtained from any
Governmental Authority in order for Distributor to lawfully market,
promote, offer for sale and sell the Products in the Territory,
including, without limitation, authorizations required from the
European MEA ("EMEA"), but excluding Approvals.
1.13 "Products" means the biopharmaceutical products manufactured by or on
behalf of Ligand, for the indications and applications specified, which
are listed in Appendix A, as amended by Ligand from time to time by
written notice to Distributor; and shall include all line extensions
and modified or improved versions of such products from time to time.
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1.14 "Resale Price" means the price from the Distributor to the wholesalers
in each respective country of the Territory, in the case of Spain as
determined by the Spanish Governmental Authorities ("Precio de Venta
Laboratorio") or, in the case of any other country of the Territory, as
determined by the competent Governmental Agency in such country, as
reduced by:
(a) freight, shipping and insurance with respect to such Products;
(b) sales, excise or similar taxes imposed on the sale of the
Products;
(c) any mandatory or industry standard discounts or rebates to the
competent Governmental Authorities and/or Social Security Systems
pursuant to the regulations and/or agreements in force; and
(d) cash and trade discounts and allowances as customarily applied to
products of a similar kind in the pharmaceutical industry in the
relevant country within the Territory;
but in either case only if paid by Distributor or actually charged
against Distributor and evidenced in Distributor's books and records of
account and the reports provided to Ligand pursuant to Clause 9.3
hereof.
1.15 "Technical Assistance" means and includes advice, training, information
and other support regarding the manufacture, specifications, clinical
trials and marketing specifically related to the Products.
1.16 "Term" means the term of this Agreement as determined in accordance
with Clause 3.1 and, where the context permits, includes the extensions
as per Clause 3.2.
1.17 "Territory" means the geographic area comprising the countries of
Spain, Portugal and Greece.
1.18 "Trademarks" means the trademarks owned or licensed and designated by
Ligand for the Products in Appendix D, as well as any substitute marks
that are used for the Products in accordance with Clause 12.2.
2. GRANT OF RIGHTS
2.1 Distribution Rights: Subject to the terms and conditions of this
Agreement, Ligand grants to Distributor, and Distributor accepts, the
exclusive right to market the Products in the Territory. Right to
market under this Agreement shall mean the Distributor's right (1) to
hold itself out as Ligand's exclusive authorized Distributor in the
Territory; (2) to acquire the Products from Ligand for resale to
customers on its own account in the Territory; and (3) to appoint
Affiliates of Distributor, or other third parties (deemed) approved by
Ligand, as Dealers in the Territory; provided, however, that (a)
Distributor shall obtain an executed copy of a sub-
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distributor or dealer agreement, in a form containing terms and
conditions substantially similar to the terms and conditions of this
Agreement, from the relevant Dealer; and (b) Distributor shall notify
Ligand in writing of the desired appointment of any third party Dealer
and, at Ligand's request, provide Ligand with adequate background
information on such Dealer. Unless Ligand reasonably objects to such
appointment within thirty calendar days after its receipt of such
notice and information, Ligand shall be deemed to have given the
requisite approval to the appointment.
2.2 Additional Rights: Ligand further grants Distributor the royalty-free
and (except as to Ligand) exclusive right to use the Confidential
Information, the assistance and information related thereto pursuant to
Clause 4.4, and the Trademarks solely to the extent reasonably
necessary for the distribution and marketing of the Products within the
Territory in accordance with this Agreement.
2.3 Independent Contractors: The relationship of Ligand and Distributor
established by this Agreement is of seller and buyer, or independent
contractors, and nothing in this Agreement shall be construed: (1) to
give either party the power to direct or control the daily activities
of the other party, or (2) to constitute the parties as principal and
agent, partners, or otherwise as participants in a joint undertaking.
Ligand shall have no obligation or authority, express or implied, to
exercise any control whatsoever over the employees or the business
affairs of Distributor. Except as specifically provided in this
Agreement, Distributor shall have no power or authority to make or give
any representation or warranty or to incur any liability or obligation,
or to waive any right, on Ligand's behalf.
2.4 Ligand's Rights: Ligand reserves the right to modify and/or to
discontinue developing or producing the Products at its discretion at
any time either (1) due to legal or regulatory requirements,
administrative or court orders, or safety risks, or (2) so long as the
Product in question is withdrawn from the market throughout the
European Union for a justified and reasonable motive; provided,
however, that Ligand shall notify Distributor as soon as practicable
after any such modification or discontinuance and that Distributor
shall be entitled to market any modified versions of Products pursuant
to the terms of this Agreement. Nothing in this Agreement shall be
deemed to restrict Ligand from selling the Products or other products
to Persons outside the Territory for use within the Territory, nor from
appointing Distributors in countries outside the Territory who may be
permitted, by operation of law, to sell the Products in the Territory,
and Distributor shall receive no compensation for such sales by Ligand
or any other Distributor; provided, however, that Ligand shall impose
upon its other Distributors restrictions on their active marketing of
the Products in the Territory equivalent to restrictions placed upon
Distributor's active marketing of Products outside the Territory in
this Agreement, to the extent such restrictions are legally
permissible.
2.5 Ligand Exclusive Supplier: During the Term, Distributor shall purchase
all of its requirements of the Products from Ligand or any party
designated by Ligand for this purpose.
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3. TERM
3.1 Term: The term of this Agreement shall commence on the Effective Date
and shall continue, with respect to a particular Product, for a period
of ten years from the date of first sale of that particular Product to
Distributor anywhere in the Territory after the Product Authorization
is obtained for such Product, unless the Agreement is earlier
terminated in accordance with Clause 16.
3.2 Extensions: Ligand and Distributor agree that, at least one year before
the expiration of the initial ten-year term of the Agreement, they
shall engage in good faith discussions for a period not to exceed six
months concerning the extension of the term of the Agreement for the
relevant Product(s) for a period of three to five years at commercial
terms and conditions to be negotiated during the six month discussion
period.
4. AUTHORIZATIONS
4.1 Distributor to Use Diligent Efforts to Apply for and Pursue Product
Authorizations: Following the application by Ligand, at Ligand's cost,
and further issuance of any Product Authorization by the EMEA or any
other agency pursuant to a mutual recognition procedure in the
Territory and in consultation with Ligand, Distributor shall be
responsible for, and shall use diligent efforts to, file applications
for, pursue and maintain, in each country within the Territory, during
the Term, all Product Authorizations. All Product Authorizations shall
be in Ligand's name, whenever legally permissible, unless otherwise
agreed to by Ligand. Distributor shall obtain Ligand's prior approval
of all applications and submissions to any Governmental Authority in
respect of any Product Authorization. Distributor shall keep Ligand
informed, in writing, of the status of its applications for Product
Authorizations on a regular basis, and in any event no less frequently
than once every three months, and shall immediately notify Ligand in
writing of any substantial change in the status of any Product
Authorization or any substantive questions received from any
Governmental Authority in respect of such Product Authorizations.
Distributor shall provide copies of all Product Authorizations to
Ligand at its request. If at any time there is a choice in respect of
the appropriate type of such Product Authorization to be obtained or
maintained in respect of any one or more of the Products, Ligand may,
in its sole and absolute discretion, exercise such choice and shall
direct Distributor as to the appropriate Product Authorization to be.
requested. If Ligand, at its sole discretion, informs Distributor that
it does not intend to apply for any requisite Product Authorization in
any country in the Territory, Distributor may give Ligand written
notice of its intention to seek such Product Authorization on its own
and shall have the right to do so, unless Ligand proceeds with or
authorizes the filing on its behalf within thirty calendar days after
its receipt of Distributor's notice. In any given case when Distributor
seeks Product Authorization, Ligand shall provide Distributor with all
reasonably necessary and available clinical data, documentation and
assistance to such effect.
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4.2 Distributor to Apply for Approvals: Distributor, at its cost, shall
file applications for and maintain Approvals for all Products listed on
Appendix A in effect as of the Effective Date in each country in the
Territory during the Term. If Distributor believes that any application
for Approval for any particular future Product or indication that may
be included within the scope of this Agreement is not economically
justified, Ligand may proceed with the application at its own cost and,
upon issuance of the Approval, Distributor shall market the Product in
the country concerned, if Ligand so requests. Distributor shall
immediately notify Ligand in writing of any substantial change in the
status of any Approval or any substantive questions received from any
Governmental Authority in respect of such Approvals. Distributor shall
provide copies of all Approvals to Ligand.
4.3 Pricing Approvals: Without limiting the generality of Clause 4.2, any
applications, submissions, negotiations and agreements with any
Governmental Authority on Product prices will require Ligand's prior
consent provided, however, that in Spain Ligand shall:
(a) give its consent, if the price from the Distributor to the
wholesalers in the relevant country of the Territory, as
determined by the Spanish Governmental Authorities ("Precio de
Venta Laboratorio") amount to not less than *** percent of the
Reference Price;
(b) have the option to either consent to the Precio de Venta
Laboratorio Resale Price or buy back from the Distributor the
exclusive marketing rights in the Territory for the relevant
Product (as listed in Appendix A) at a price of US$ *** each, if
the Resale Price negotiated by Distributor amounts to less than
*** , but more than *** , percent of the Reference Price and
Ligand wishes to withhold its consent to the sale of the
Products at such Resale Price; and
(c) have no obligation to give its consent, if the Precio de Venta
Laboratorio Resale Price negotiated by Distributor amounts to
*** percent or less of the Reference Price, in which case the
marketing rights for the relevant Product shall revert to Ligand
at no cost and Distributor shall be prevented from marketing the
relevant Product in the Territory.
If Ligand exercises its option to buy back the exclusive marketing
rights in the Territory for the relevant Product under clause 4.3 (b)
or Distributor loses its rights under clause 4.3 (c) to distribute the
relevant Product in the Territory, Ligand shall either (i) refrain from
marketing directly or indirectly in the Territory for a period of three
years the relevant Product at a price equal or inferior to the price
that caused the aforesaid transfer of marketing rights to Ligand under
4.3(b) or (c), or (ii) restore Distributor's rights to market the
relevant Product in the Territory under this Agreement.
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For purposes of this Clause 4.3, "Reference Price" shall mean the
average, same distribution level price agreed upon by Ligand or its
other Distributors for the relevant Products with the Governmental
Authorities in the first three European Union Member States outside of
the Territory where the relevant Product is sold. If Product prices
have been approved in fewer than three European Union Member States
when Distributor seeks Ligand's approval, the Reference Price shall be
the average price in such fewer countries or, if there is no such
country, a price mutually agreed upon by the parties. If Ligand
reacquires the marketing rights for any Products pursuant to Clause 4.3
(b) or (c), all obligations of the parties under this Agreement,
including those under Clause 10, shall cease with respect to such
Products.
4.4 Ligand to Provide Assistance: Ligand shall provide such assistance as
Ligand may deem reasonably necessary to Distributor in respect of
Distributor's Product Authorization and Approval obligations under
Clauses 4.1, 4.2 and 4.3, and in particular shall provide:
(a) written materials and information concerning the Products,
including copies, or summaries, of materials prepared for
submission to the United States (or, at Ligand's discretion,
European) Governmental Authorities concerning the Products or
their labeling, to the extent that Ligand is legally and
contractually permitted or required to do so, for Distributor's
use in obtaining Product Authorizations in respect of each of
the Products; and
(b) access to such clinical data and documentation in respect of the
Products generated by research and trials funded by Ligand or to
which Ligand may have access with the right to disclose, as
Ligand may deem reasonably necessary to be relevant and useful
to Distributor in obtaining Product Authorizations in respect of
each Product.
4.5 Distributor to Bear Costs: Subject to Clauses 4.1 and 4.6 below,
Distributor shall be responsible for all costs and expenses associated
with filing for and maintaining Product Authorizations and Approvals ,
including, without limitation, the Base Price of Product supplied by
Ligand and the costs of any clinical trials conducted by or on behalf
of Distributor for the purposes of any Product Authorizations, unless
otherwise agreed in writing between the parties prior to such costs
being incurred.
4.6 Clinical Trial Program: The parties agree to jointly evaluate the
merits of a clinical trial program for one or more of the Products for
severe, recalcitrant, plaque psoriasis vulgaris.
4.7 No Marketing of Products without Product Authorizations: Except to the
extent permitted by law and as may be agreed in writing between the
parties, Distributor shall not market, promote, offer for sale or sell
any one of the Products unless and until Distributor obtains the
appropriate Product Authorizations in respect of such Product. In the
event that Distributor is legally permitted, due to an individual pre-
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approval in respect of any Product, to market any Product prior to
obtaining the relevant Product Authorization, Distributor shall not do
so without obtaining the prior written consent of Ligand, which will
not be unreasonably withheld.
5. ORDERS AND FORECASTS
5.1 Forecasts: In order to permit Ligand and its suppliers to allocate
their manufacturing capacity, Distributor shall provide Ligand with
written 4-quarter rolling forecasts of its Product requirements. Such
forecast shall be broken down by Product, quantities, and shipping
dates, and shall be delivered to Ligand not later than one hundred
twenty days prior to the beginning of each calendar quarter (commencing
after Distributor has obtained the first Product Authorization and
Approval in respect of any Product). Ligand shall either accept or
reasonably reject such forecasts within thirty days after receipt. Any
forecast accepted by Ligand or not rejected within that period shall be
binding on the Parties as follows: Unless otherwise agreed, Distributor
shall order, and Ligand shall supply, one hundred percent of the
quantities forecast for the first calendar quarter and between eighty
and one hundred twenty percent of the quantities forecast for the next
quarter. Quantities forecasts for subsequent quarters shall be
non-binding indications for production schedules, only, until included
in subsequent quarterly forecasts.
5.2 Orders: Purchase of Products by Distributor hereunder shall be made
only pursuant to written orders executed by Distributor, and shall be
for a minimum of the Distributor's quarterly requirements for the
Territory. The orders of Panretin(TM) Gel, Ontak(TM) and Targretin(TM)
Gel shall separately specify the labeling requirements so as to allow
Ligand to label those products before shipment. The orders shall be
accepted in writing by Ligand at the offices specified in Clause 19.7.
Subject to Clause 5.1 above, no order shall be binding upon Ligand
until accepted by Ligand in writing. Subject to Clause 5.1 above,
Ligand reserves the right to accept or reject any order, offer or
request for Products in its sole discretion. The terms and conditions
of this Agreement shall apply to all orders placed by Distributor and
shall override and supersede any different or additional terms on
orders from or any general conditions maintained by Distributor. All
orders must be received by Ligand from Distributor at least 120 days
prior to the desired shipment date. If any order for quarters 2, 3 or 4
of a forecast exceeds the forecasts for that calendar quarter provided
by Distributor under Clause 5.1 hereof by more than twenty percent
(20%), Ligand shall use its reasonable efforts, but shall not be
obligated, to ship the requested quantities of Products, with the
normal lead time stated above. If the order cannot be fully shipped,
Ligand will notify Distributor by the end of that period, and the
parties will jointly determine an appropriate shipment schedule.
5.3 Shipment Frequency: The Products shall be shipped at a frequency no
greater than once per month with a minimum purchase price to
Distributor of $ *** U.S provided, however, that Distributor may
request shipments at a frequency greater than once per month at the
same minimum purchase price during the first year of the
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Agreement.
5.4 Inventory Requirements: Distributor shall maintain a reasonable supply
of Products adequate to serve the appropriate customer base in each
country of the Territory from time to time. For the first six months
beginning with the first sale of a Product, such inventory shall be
sufficient to cover not less than a three month supply of Ontak(TM),
Panretin(TM) and Targretin(TM) Products based on Distributor's
forecasts. Thereafter, the inventory may be reduced to a two months
supply.
5.5 Cancellation and Rescheduling. Ligand will use its reasonable best
efforts to honor any request of Distributor to reschedule shipment of
any order accepted by Ligand. For Panretin(TM) and Targretin(TM)
capsules, orders for bulk capsules or capsules in unlabeled bottles
accepted by Ligand may be canceled by Distributor, provided that
Distributor cancels the order at least forty five (45) days in advance
of the shipment date and pays a cancellation charge equal to *** of the
order price. No cancellation shall be allowed for any other Products
once a firm order has been accepted by Ligand.
5.6 Terms of Shipment and Transfer of Title. All shipments of Products
shall be made in Ligand's standard shipping packages CIF Distributor's
designated port of entry in Spain or such other port of entry agreed
upon by the parties. Unless otherwise agreed in writing between the
parties, Ligand shall select the method of shipment and the carrier,
and Distributor shall be responsible for all actions and documents
necessary to obtain clearance to import the Products into the
Territory. Ligand shall retain title to the Products until full payment
of the Base Price for the Products is irrevocably credited to Ligand's
bank account, and Distributor shall store all Products in its
facilities so that they are readily identifiable as Ligand's Products.
5.7 Product Availability. Ligand will use its reasonable efforts to deliver
to Distributor the Products in the quantities and at the dates
specified on the orders submitted by Distributor and accepted by
Ligand; provided, however, that Ligand (1) reserves the right to
allocate the Products equitably among its customers in the event of a
shortage of any Products; and (2) shall not be liable to Distributor
for any delay in delivery without Ligand being at fault.
6. REGISTRATION SERVICES AND PAYMENTS
6.1 Initial Service Reimbursement. On execution of this Agreement
Distributor shall make a non-refundable initial payment to Ligand in
the sum of US$ *** as reimbursement for services rendered in the
registration of the Products in the Territory.
6.2 Additional Service Reimbursement: On either (a) the date on which
Distributor obtains the first Product Authorization in any country in
the Territory in respect of any Product; or (b) September 30, 1999,
whichever is the earlier, Distributor shall
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make a non-refundable payment to Ligand in the sum of US$ *** as
reimbursement for services rendered in the registration of the Products
in the Territory.
6.3 Final Service Reimbursement: Within thirty days of the date on which a
Product Authorization is first obtained in any country in the Territory
for a breast cancer indication for Targretin(TM) capsules,Distributor
shall pay to Ligand US$ *** as reimbursement for services rendered in
the registration of Targretin(TM) for such indication.
6.4 Product Pricing: Ligand shall supply the Products CIF to the port of
entry designated pursuant to Clause 5.6. For all Products supplied,
Distributor shall pay to Ligand the higher of: (1) the Base Price, or
(2) the Net Sale Price. All payments under this Agreement shall be made
in United States dollars. Where payment must be converted into U.S.
dollars from another currency, the conversion shall be made based on
the applicable exchange rate as published on the European Central
Bank's Web Site for the date of Ligand's invoice.
6.5 Payment of Base Price: Unless otherwise agreed in writing by Ligand,
Distributor shall pay the invoiced estimated Base Price for each order
of Products under this Agreement within forty-five calendar days' net
by international wire transfer to the bank identified by Ligand from
time to TIME. If Distributor at any time has become delinquent, Ligand
shall have the right to make sales contingent upon Distributor's
payment by irrevocable letter of credit confirmed by a major US
merchant bank and payable in United States Dollars (US$) by draft at
sight against delivery of bill of lading (which may be marked "freight
collect" and which shall permit transshipments and partial shipments),
commercial invoice and packing list.
6.6 Payment Reconciliation: Within ninety (90) days of the end of each
calendar quarter (commencing after Distributor has made the first sale
of any product), the amounts paid by Distributor to Ligand under clause
6.5 shall be adjusted as follows:
(a) First, Distributor or Ligand, as the case may be, shall pay or
credit to the other, the amount, if any, by which the estimated
Base Prices paid by Distributor to Ligand under clause 6.5
differ from the Base Prices payable by Distributor after
deducting the deductionsactually paid or charged against
Distributor pursuant to Clause 1.14 (a)-(d) during that quarter.
(b) Second, Distributor shall pay to Ligand, the amount, if any, by
which the aggregate net sales prices for all products purchased
from Ligand and sold by Distributor during that quarter exceeds
the aggregate Base Prices payable to Ligand pursuant to clause
6.6 (a), above.
6.7 Late Payments: Whenever a late payment is due to a cause attributable
to a party, all amounts not paid to the other party when due shall
accrue interest daily at the lesser of an annual rate of twelve percent
(12%) or the highest rate permissible by
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law on the unpaid balance until paid in full.
6.8 Taxes. All amounts payable to Ligand under this Agreement are exclusive
of any income, sales, use, property, ad valorem, value added or other
taxes, levies, imposts, duties, charges or withholdings of any nature
(collectively, "Taxes"), arising out of any transaction contemplated by
this Agreement and imposed against or the Products by any taxing
authority in the Territory (excluding, however, any Taxes on, or
measured solely by, the net income of Ligand and Taxes imposed on
Ligand in the United States). Distributor shall pay all applicable
Taxes or provide Ligand with a certificate of exemption acceptable to
the relevant taxing authority, and shall also be liable for all bank
charges levied in connection with payments made to Ligand (excluding,
however, any bank charges levied by Ligand's bank). In the event that
any payments to Ligand under this Agreement are subject to any
withholding taxes, Distributor shall promptly provide all tax
certificates, applications and related documents to Ligand. If Ligand
is required to pay any Taxes in the Territory, other than Taxes imposed
upon the payments under Clause 6.1 or 6.2, Distributor shall promptly
reimburse Ligand upon written request therefor.
7. MARKETING AND PROMOTION
7.1 Marketing Plans: At least six (6) months prior to the anticipated date
on which the relevant Product Authorization and Approval shall be
issued in respect of each Product, Ligand and Distributor shall consult
in good faith to determine an appropriate marketing plan in respect of
each Product for the Territory. All such marketing plans shall be
harmonized with, and shall not prejudice, Ligand's global and regional
marketing strategies covering the Territory. Distributor shall be
responsible for implementing such marketing plans and for advertising
and promoting each Product within the Territory from the dates on which
it obtains the relevant Product Authorization and Approval for each
Product. Distributor shall at all times adhere to the policies set by
Ligand in the execution of mutually agreed upon annual marketing plans
for the Products, including any marketing plans which Ligand wishes to
implement among its Distributors in other territories and which are set
by Ligand and agreed to by Distributor in good faith, ; provided,
however, that Distributor, at its sole discretion (but in accordance
with any relevant Approvals in the Territory in respect of pricing),
may determine the Resale Prices for the Products and the terms and
conditions of distribution.
7.2 Marketing Materials. In the promotion and marketing of the Products,
Distributor shall develop sales literature and promotional materials
provided to Distributor by Ligand pursuant to Clause 7.3. Distributor
shall have the right to prepare other product descriptions and other
promotional and marketing materials relating to the Products; provided
however, that (1) all costs and expenses incurred by Distributor in the
preparation and distribution of such product descriptions and other
promotional and marketing materials shall be borne solely by
Distributor; and (2) all such product descriptions and other
promotional and marketing materials shall not be released by
Distributor until approved in writing by Ligand, such
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approval not to be unreasonably withheld. Distributor shall submit
samples of final copy for all key product descriptions and other
promotional and marketing materials it proposes to use in respect of
the Products for Ligand's approval within sixty (60) days prior to the
first date of anticipated use of such materials. Ligand shall use its
reasonable efforts to respond to any such request for approval within
thirty (30) days of its receipt thereof. If no written response is
given by Ligand denying such request within the aforesaid term, then
Ligand's approval shall be deemed granted.
7.3 Product Literature: To the extent that it is legally and contractually
permitted to do so, Ligand will share with Distributor samples of
product descriptions, sales aids and advertising and promotional
materials developed and used by Ligand, its other Distributors or
licensees (collectively "Promotional Materials") in respect of each
Product as soon as practicable. Distributor shall bear all costs of
reproducing and/or adapting such Promotional Materials for use within
the Territory, and shall not use any adaptations of such Promotional
Materials without Ligand's prior approval of such adaptations.
Likewise, Distributor agrees to share samples of its Promotional
Materials with Ligand and Ligand's other Distributors and licensees.
7.4 Rights to Reproductions: All translations, reproductions, adaptations
and creations of derivative works of all of Ligand's Promotional
Materials (collectively "Reproductions") created by Distributor will be
created as "works made for hire" with Ligand as the hirer, and
copyright and all other proprietary rights in all of the Reproductions
shall vest in Ligand from the date of completion thereof by
Distributor. To the extent that any Reproductions do not qualify as
"works made for hire", then Distributor hereby assigns to Ligand all
copyrights and all other proprietary rights in the Reproductions to
Ligand. In this event, Distributor will, at Ligand's request, execute
any assignment or "work made for hire" documents and shall take all
other steps as necessary or appropriate to perfect copyrights and all
other proprietary rights in the Reproductions in the name of Ligand.
If, notwithstanding the foregoing, Ligand, for any reason, is deemed
not to own all rights, title, and interest in and to the Reproductions,
Distributor shall be automatically considered to have granted to Ligand
a royalty-free, perpetual and transferable license to use, distribute,
translate and reproduce the Reproductions. Such license shall be
exclusive to Ligand and shall survive the expiration or termination of
this Agreement for any reason whatsoever.
7.5 Sales Assistance: Whenever Ligand considers it reasonably necessary in
order to maintain or increase the volume of sales of Products in the
Territory, Ligand shall be entitled to send, at its own cost,
representatives to visit Distributor or Distributor's customers or
prospective customers. Ligand shall keep Distributor informed of
promotional methods and techniques used by Ligand in respect of the
Products.
8. OBLIGATIONS OF DISTRIBUTOR
8.1. Diligent Efforts: Distributor shall use its diligent efforts to market
and sell the
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Products within the Territory at its own expense, including but not
limited to professional sales calls on target medical audiences (e.g.
physicians, hospitals, pharmacists, etc.), advertising the Products in
appropriate media and participating in trade shows, conferences,
expositions, and promotional seminars, all with due consideration for
the local marketing environment in the Territory. Distributor shall
conduct its marketing activities in a lawful manner with the highest
standards of pharmaceutical product promotional practices, fair trade,
fair competition, and business ethics, and shall cause its employees
and Dealers to do the same.
8.2. Offices and Personnel. Distributor shall maintain offices adequate to
market and support the Products in the Territory and shall retain and
have at its disposal at all times an adequate staff of trained and
qualified personnel to perform its obligations under this Agreement.
8.3. Dealers: Distributor may only appoint Affiliates or other third parties
pursuant to the terms and conditions set forth in Clause 2.1. Any such
appointment shall be made in writing and only in the name and for the
account of Distributor, and shall terminate upon the expiration,
non-renewal, or termination of this Agreement for any reason; provided,
however, that:
(a) Distributor shall not undertake to grant to any Dealer any rights
greater than those which are granted by Ligand to Distributor
under this Agreement;
(b) In order to protect the goodwill of Ligand and the Products in
the Territory, Distributor shall secure the agreement of each and
every Dealer that it shall assume the same obligations as have
been assumed by Distributor under this Agreement; and
(c) Distributor shall defend, indemnify and hold Ligand harmless
against any claim, loss, liability or expense (including
attorney's fees and court costs) arising out of or based upon (1)
any act or omission of any Dealer, or (2) any claim made by any
Dealer against Ligand.
8.4 Alterations: Distributor shall ensure that the Products are
distributed, sold, and advertised in the form and with the labeling or
marking designated by Ligand and in accordance with the applicable
regulations in the Territory and, in particular, shall not alter,
remove, or deface any Trademark. Distributor acknowledges that it shall
have no right to sell any products under Ligand's name or trademark if
they were not originally manufactured or supplied by, or on behalf of,
Ligand.
8.5 Clinical Evaluations: Prior to conducting any clinical evaluation of
any of the Products, Distributor shall furnish to Ligand, for its prior
review and written approval, the protocols for such evaluation written
in the English language. Ligand shall use its reasonable efforts to
respond to any such written request for approval within ninety (90)
days of its receipt thereof, granting its approval or, if duly and
reasonably justified, denying it. If no written notice is given by
Ligand denying its approval within the aforesaid term, then Ligand's
approval shall be deemed
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granted. Results from any such clinical evaluation shall not be
publicly disclosed or disclosed in confidence to any third party
without Ligand's prior written approval, such approval not to be
unreasonably withheld.
8.6 Insurance. Both parties shall obtain and at all times during the term
of this Agreement maintain, and bear the cost of, liability insurance
which, in the judgment of Ligand, is adequate to cover their respective
obligations under this Agreement . A certificate of insurance and any
other documentation necessary to prove compliance with this provision
will be provided to the other party upon request.
9. REPORTING OBLIGATIONS
9.1 Foreign Laws and Regulations: In addition to its obligations under
Clauses 4.1, 4.2 and 4.3 to provide Product Authorization and Approval
information, Distributor shall advise Ligand of any legislation, rule,
regulation or other law (including but not limited to any customs, tax,
foreign exchange or foreign trade, antimonopoly, pharmaceutical
products or intellectual property law) which is in effect or which may
come into effect in the Territory after the date of this Agreement and
which may affect the importation of the Products into the Territory or
the use of the Products or the protection of Ligand's Intellectual
Property Rights therein.
9.2 Record Keeping: At all times during the term of this Agreement,
Distributor shall maintain at its principal place of business full,
complete and accurate books of account and records with regard to its
activities under this Agreement, including, without limitation, records
of all sales of the Products including the names of customers to whom
Products are sold and total gross sales and net sales for each calendar
quarter. Upon reasonable notice, and not more than twice a year,
Distributor shall grant Ligand or its representatives access during
normal business hours to any premises of Distributor in order that
Ligand, at its expense, may inspect Distributor's books and premises
related to the Products for the sole purpose of verifying and enforcing
compliance by Distributor with its obligations under this Agreement;
provided, however, that Distributor shall reimburse Ligand for the full
amount of the inspection costs if any inspection under this Clause 9.2
reveals any substantial breach by Distributor of this Agreement,
provided that Ligand shall have the burden of establishing any such
substantial breach.
9.3 Reports: Distributor shall provide Ligand with quarterly operation
reports of Distributor's activities to register, develop and market the
Products in the Territory, and shall provide to Ligand copies of all
such reports received by Distributor from Dealers. Each such report
shall be due within thirty (30) days after the end of the period to
which it relates. Each report shall include:
(a) a monthly compilation of all Products distributed by Distributor,
including the revenues derived therefrom and a breakdown of the
prices charged in respect of each Product; and
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(b) a monthly list of the amount of inventory on hand; and
(c) monthly gross and net sales on a per Product, per country basis
in local currency and U.S. dollars, using the average exchange
rate set forth in the European Central Bank's Web Site for the
month.
9.4 Annual Statements: Distributor shall provide Ligand with annual
statements within thirty (30) days after the end of each calendar year
showing annual sales figures and the amount of inventory on hand as at
December 31 of each year, and shall provide to Ligand copies of all
such annual statements received by Distributor from Dealers. Such
annual statements shall also contain a summary of all promotional
activities undertaken by Distributor with respect to the Product during
the preceding calendar year, and current credit references.
9.5 Exchange of Adverse Event Information: The recipient of Adverse Event
(AE) reports and/or data, either Distributor or Ligand, will mutually
exchange and promptly provide in writing, using the latest applicable
International Conference on Harmonization of Technical Requirements for
Registration of Pharmaceuticals for Human Use (ICH) and Council for
International Organizations of Medical Sciences (CIOMS) guidelines for
reporting, any adverse event information obtained by the receiving
party associated with the use of the Products either as a result of
marketed use or from investigational clinical trials:
(a) Without limiting the foregoing, the party that is the original
recipient of AE information relating to incidents of serious and
unexpected reactions and/or events associated with the use of
any of the Products, as defined by the ICH and/or CIOMS
guidelines, shall make an initial written report of that
information to the other party, via facsimile, not more than 72
hours following receipt of that information. A full written
report, following the content and format guidelines indicated in
the applicable current ICH and CIOMS guidelines, is to be sent
to and received by the other party within seven (7) days
following the date the initial recipient receives such AE
information.
(b) Distributor shall also provide Ligand with routine quarterly and
annual adverse event reports and/or safety data received from
any source in the Territory, using the ICH guidelines for the
content and format for these types of reports. These reports are
intended to be used for and incorporated into Periodic Safety
Update Reports [PSUR] as defined by ICH guidelines. Ligand will
provide a copy of each of the Products' complete PSUR to the
Distributor within five (5) days of submission of the applicable
Product's PSUR to the U.S. regulatory authorities.
(c) Distributor shall be responsible for submitting the adverse
event/ medical safety (safety surveillance) reports in the
countries of the Territory as required by the regulatory
authorities. Ligand will hold and maintain the Central AE/
safety database for the Products and reports based on this
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database, as necessary to meet the requirements of regulatory
authorities in the Territory, will be made available to
Distributor during the agreement life. Without limiting the
generality of the foregoing, Distributor shall cooperate with
Ligand for the development of standard operating procedures for
exchange of information concerning Adverse Events and Product
safety information derived from Products use in the Territory
and each party shall at all times comply with the procedures so
developed.
(d) For all of the reports specified above, the language of all
exchange between and among the Parties will be English.
Distributor will provide Ligand all of the above-required AE
reports to the following address: Ligand Medical Safety Ligand
Pharmaceuticals Inc. 10275 Science Center Drive San Diego,
California 92121 U. S. A. Tel: 1 (619) 550-7588 Fax: 1 (619)
550-1860
Ligand will provide Distributor all of the above-required AE
reports to the following address:
Ferrer Group
Pharmacoepidemiology and Safety
Medical Department
Gran Via Carlos III, 86
08028 Barcelona Spain
Tel: +34 93 330 61 11
Fax: +34 93 490 70 78
9.6 Recall Procedures: Ligand will provide Distributor with a copy of
Ligand's standard operating procedure for recalls of products.
Distributor acknowledges the importance of the development and the
observance of correct procedures in case of recalls. Distributor shall
cooperate with Ligand for the development of recall standard operating
procedures and shall at all times comply with the procedures so
developed and adhere to Ligand's instructions from time to time and
always in accordance with mandatory requirements applicable in the
Territory.
10. PRODUCT AUTHORIZATIONS AND BUY BACK OF RIGHTS
10.1 Distributor acknowledges that Ligand cannot and does not guarantee the
issuance of any Product Authorization for any or all of the Products in
any country in the Territory and that Ligand will have satisfied its
contractual obligations to Distributor concerning Product
Authorizations once it has submitted complete registration dossiers for
Products subject to the following provisions:
(a) Within a period of *** the Effective Date, Ligand shall have the
option of either (1) submitting a complete registration dossier
for
- ----------
*** Portions of this page have been omited pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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Product Authorization via central EMEA or mutual recognition procedures
for at least *** Products (one of them being Targretin(TM) capsules);
or (2) offering to buy-back from the Distributor the exclusive
marketing rights for Products which Ligand has not submitted a complete
registration dossier at a price of US$ *** for each such Product.
(b) If, within *** the Effective Date, Ligand has filed
registration dossiers for at least *** Products, but has been
unable to obtain Product Authorizations for Spain for at least
*** Products (one of them being Targretin(TM) capsules),
Distributor shall have the option, exercisable by written
notice to Ligand within three months after the expiration of
the *** period, either to:
(1) (Re)submit the registration dossier for *** Products, in
which case Ligand will provide Distributor with reasonable
assistance and all product data in its possession or
available to it with the right to disclose that may be
required for the registration process; and acquire, at no
additional cost to Distributor, the exclusive marketing
rights for all Products in the Philippines for a period of
ten years from the date of Distributor's notice under the
terms and conditions specified in this Agreement; or to
(2) Sell back to Ligand the exclusive marketing rights in the
Territory for all unapproved Products in exchange, at
Distributor's option, for (i) Ligand's waiver of its
rights under Clause 6.3; or (ii) a payment of US$ *** in
the aggregate.
(c) If, within *** from the Effective Date, Ligand and Distributor
have been unable to obtain the Product Authorization in Spain
for at least one Product and Distributor has not previously
exercised either option granted under Clause 10.1 (b),
Distributor shall have the further option, exercisable by
written notice to Ligand within *** after the expiration of the
*** period, to take one of the steps described in Clause 10.1
(b); provided that the price payable by Ligand under Clause
10.1(b)(2)(ii) would be increased to US$ *** .
11. COVENANTS OF DISTRIBUTOR
11.1 Restrictions: To the extent permissible by law, Distributor is
prohibited from:
(a) Advertising, circulating price lists or otherwise soliciting
orders for the Products, and from establishing or maintaining
branches, sales offices or distribution depots, outside the
Territory for the distribution of the Products;
(b) During the term of this Agreement, seeking the Approval for, or
marketing, (a) any products of a third party for a registration
indication of CTCL or,
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(b) any oral or topical product of a third party for a
registration indication of Kaposi's Sarcoma, except as agreed
by the parties.
12. INTELLECTUAL PROPERTY RIGHTS
12.1 Acknowledgment: Distributor acknowledges Ligand's exclusive right,
title and interest in and to any and all Intellectual Property Rights
pertaining to the Products. Distributor shall not at any time during or
after the term of this Agreement take any act or step impairing the
Intellectual Property Rights or do anything that may otherwise
adversely affect the Intellectual Property Rights, provided that any
good faith legal challenge shall not be deemed to be such an act or
step.
12.2 Notices, Trademarks and Name. Distributor shall have the royalty-free
and (except as to Ligand) exclusive, right to use in the Territory, and
shall use where available, the trademarks in Appendix D designated by
Ligand for each Product. If no trademark in Appendix D is available for
a Product in a country of the Territory and Ligand is unable or elects
not to provide an alternative trademark, then Distributor shall have
the right to secure, in Ligand's name and for its benefit, trademark
rights to a substitute mark for the Products in the relevant country
and Ligand will reimburse Distributor for the pre-approved expenses of
securing such rights. The rights to the substitute mark shall remain
with the Product it is used for and shall be transferred accordingly in
the event that corresponding Product rights are transferred.
Distributor shall not alter, deface, remove, cover, mutilate, or add
to, in any manner whatsoever, any patent notice, copyright notice,
trademark, trade name, serial number, model number or brand name that
Ligand may attach or affix to the Products. Distributor shall not
market the Products under any name, sign or logo other than the
Trademarks approved by Ligand. Distributor may use the Trademarks
solely in connection with the distribution of the Products and in
accordance with Ligand's instructions and quality control standards
from time to time, and will execute any document reasonably requested
by Ligand in connection with the use and maintenance of the Trademarks
in the Territory. Distributor acknowledges and agrees that it shall not
have any rights in respect of the Trademarks except to the extent
expressly granted in this Agreement, and that all use of the Trademarks
in the Territory and all goodwill in the Trademarks shall inure to the
benefit of Ligand.
12.3 Third Party Claims: Distributor shall promptly notify Ligand of any
claims or objections that its use of the Intellectual Property Rights
in connection with the marketing, support or service of the Products
may or will infringe the copyrights, patents, trademarks or other
proprietary rights of another Person ("Third Party Claim"). If
Distributor is served with a legal action or otherwise forced to
respond in a legal proceeding due to a Third Party Claim, Distributor
shall (1) without delay, tender the defense of such Third Party Claim
to Ligand; and (2) render Ligand all reasonable assistance, at Ligand's
expense, in connection with the defense of any such third party claim
or objection, whether in the courts, before administrative agencies, or
otherwise. If Ligand refuses to assume the defense of a
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Third Party Claim, Distributor shall have the right to defend itself
against such Third Party Claim, in which case Ligand shall render
Distributor all reasonable assistance, at Ligand's expense. Distributor
shall not, except as required by law, knowingly make any admission to
jeopardize, compromise or otherwise limit the validity of Intellectual
Property Rights.
12.4 Infringement of Intellectual Property Rights: Distributor shall
promptly notify Ligand of any infringement or suspected infringement of
Intellectual Property Rights in the Territory relating to the Products
of which it becomes aware, and provide Ligand with any available
evidence of such infringement or suspected infringement.
(a) Enforcement by Ligand: Ligand, at its option, shall be entitled
to institute enforcement proceedings ("Enforcement Proceedings")
in respect of any infringement or unauthorized use of
Intellectual Property Rights in the Territory. Distributor
agrees to provide all reasonable co-operation and assistance to
Ligand in relation to any such Enforcement Proceedings (and
agrees to be named as a party if legally required). Any
reasonable fees and costs borne by Distributor shall be
reimbursed by Ligand. Ligand shall be entitled to deduct its
reasonable expenses in relation to such Enforcement Proceedings
(including reasonable attorney's fees and expenses and
reimbursements to Distributor) from any recovery and any
remaining amount shall be distributed pro rata among the parties
in which Distributor shall receive 50% of any remaining recovery
and Ligand shall receive 50% of any remaining recovery.
(b) Enforcement by Distributor: If, after six (6) months of receipt
of credible evidence of infringement or unauthorized use of
Intellectual Property Rights in the Territory or such lesser
period of time if further delay would result in a loss of right
to bring an Enforcement Proceeding, Ligand elects not to
institute or continue an already instituted, Enforcement
Proceeding then Distributor, using attorneys of Distributor's
choosing reasonably acceptable to Ligand, can undertake or
continue such Enforcement Proceeding at Distributor's expense.
In such event, Distributor shall keep Ligand fully and timely
informed of the action so as to enable Ligand to provide input
which Distributor shall reasonable consider. Distributor may not
enter into any settlement agreement or consent to judgement
relating to the invalidity, unenforceability or noninfringement
of the Intellectual Property Rights without Ligand's prior
written consent. Ligand agrees to provide all reasonable
co-operation and assistance to Distributor in relation to any
such Enforcement Proceeding at Distributor's expense and agrees
to be named as a party in any Enforcement Proceeding. Any
reasonable fees and costs borne by Ligand shall be reimbursed by
Distributor. If Distributor enforces Intellectual Property
Rights in the Territory in accordance with this paragraph,
Distributor shall be entitled to deduct its reasonable expenses
in relation to such Enforcement Proceeding (including reasonable
attorney's fees and expenses and reimbursements to Ligand)
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from any recovery and any remaining amount shall be distributed
pro rata among the parties in which Distributor shall receive
50% of any remaining recovery and Ligand shall receive 50% of
any remaining recovery.
13. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
13.1 Non-Disclosure Obligations: During the term of this Agreement, the
Disclosing Party will disclose certain Confidential Information to the
Receiving Party to permit the Receiving Party to perform its
obligations under this Agreement. The Receiving Party shall refrain
from using or exploiting any and all Confidential Information for any
purposes or activities other than those expressly authorized in this
Agreement. The Receiving Party agrees that such Confidential
Information shall be kept secret by the Receiving Party during the term
of this Agreement and after the expiration hereof. The Receiving Party
shall disclose Confidential Information only to its agents,
representatives or employees with a need to know and shall implement
appropriate security measures in order to avoid the disclosure or
misappropriation of such Confidential Information.
13.2 Confidentiality Agreements: Both parties shall cause each of their
directors, officers and employees and the directors, officers and
employees of, respectively, Distributor's Dealers and agents, and
Ligand's assignee's, who will receive Confidential Information pursuant
to Clause 13.1 to enter into a Confidentiality Agreement in a form
approved by both parties. The Distributor and Ligand, respectively,
shall at their own expense undertake the enforcement of any such
Confidentiality Agreement in the event of any breach thereof. Execution
of Confidentiality Agreements by the parties shall not, however, be
construed as limiting their duties or obligations hereunder.
13.3 Ownership of Ligand's Materials. All files, lists, records, documents,
drawings, specifications and records, whether in written or electronic
form, which incorporate or refer to all or a portion of Ligand's
Confidential Information shall remain the sole property of Ligand. Such
materials shall be promptly returned (1) upon Ligand's reasonable
request, or (2) in accordance with Clause 17.2 of this Agreement upon
termination of this Agreement, whichever is earlier.
13.4 Exceptions. The provisions of this Clause 13 shall not apply, or cease
to apply, to information supplied by Ligand if it (1) was already known
to Distributor; (2) came into the public domain without breach of
confidence by Distributor or any other Person; (3) was received by
Distributor from a third party without restrictions on their use in
favor of Ligand; or (4) is required to be disclosed pursuant to any
statutory or regulatory provision or court order; provided that
Distributor shall have the burden of establishing any of the foregoing
exceptions.
14. LIGAND WARRANTY, INDEMNITY, AND LIMITATIONS OF LIABILITY
14.1 Non-Infringement. To the best of Ligand's knowledge, the sale and use
of the Products does not infringe the proprietary rights of any third
party in the Territory,
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and no court proceedings or any other procedure for infringement of
patent, copyright, trademark, trade secret or any other property rights
have been brought against Ligand with respect to the Products as of the
effective date of this Agreement. Ligand makes no warranty or
representation, implied or otherwise, that the Products and/or their
sale or use will not infringe the property rights of any third party in
the Territory.
14.2 Products Warranty: Ligand warrants that all Products supplied hereunder
shall (1) conform to the products specifications therefor, as published
by Ligand from time to time consistent with the data contained in the
Product Authorizations, and (2) have a shelf life of one year or more
(or in the case of Ontak, nine months or more) from the date of
shipment to Distributor. The aforementioned shelf life terms shall be
proportionally increased from time to time in accordance with improved
stability data.
14.3 Indemnity: Ligand shall defend, indemnify and hold Distributor and its
shareholders, managers, officers, directors, agents and employees
harmless against any and all losses, damages, claims, liabilities,
costs and expenses (including reasonable attorney's fees) resulting
solely from the personal injury or death caused by the defective design
and/or manufacture of the Products when supplied to Distributor by
Ligand or by Ligand's appointee, provided that Distributor promptly
notifies Ligand in writing of any claim, action or suit potentially
giving rise to the indemnification obligation hereunder. Ligand shall
have the sole and absolute control of, and discretion in, the handling
of the defense and/or settlement of any such claim, action or suit,
including, without limitation, the selection of defense counsel, and
Distributor shall fully cooperate with Ligand in the defense and
settlement of all such claims, actions or suits, provided, however,
that Distributor may take any appropriate action necessary to preserve
or avoid prejudice to its interests, or the interests of Ligand as
indemnitor, in the event that (1) notice to Ligand cannot be given in
sufficient time for Ligand to take action, or (2) Ligand, after prompt
notice and inquiry from Distributor, fails to acknowledge its
obligation to indemnify Distributor under this clause.
14.4 DISCLAIMERS. TO THE FULL EXTENT PERMITTED BY LAW, APART FROM THE
FOREGOING WARRANTIES AND INDEMNITY, LIGAND MAKES NO ADDITIONAL
REPRESENTATIONS OR WARRANTIES AND HEREBY DISCLAIMS ALL WARRANTIES,
REPRESENTATIONS, AND LIABILITIES, WHETHER EXPRESS OR IMPLIED, ARISING
FROM CONTRACT OR TORT (EXCEPT FRAUD), IMPOSED BY STATUTE OR OTHERWISE,
RELATING TO THE PRODUCTS AND/OR ANY PATENTS OR TECHNOLOGY USED OR
INCLUDED IN THE PRODUCTS, INCLUDING ANY WARRANTIES AS TO
MERCHANTABILITY, FITNESS FOR PURPOSE, CORRESPONDENCE WITH DESCRIPTION,
OR NON-INFRINGEMENT.
14.5 LIMITATION. IN NO EVENT WILL LIGAND BE LIABLE FOR CONSEQUENTIAL,
INCIDENTAL OR SPECIAL DAMAGES, INCLUDING
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ANY LOSS OF PROFITS, EVEN IF LIGAND HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
14.6 LIABILITY CAP. IN NO EVENT SHALL LIGAND'S LIABILITY TO DISTRIBUTOR
EXCEED AN AMOUNT EQUAL TO THE AGGREGATE BASE PRICES PAID BY DISTRIBUTOR
TO LIGAND FOR PRODUCTS DURING THE LAST CALENDAR QUARTER, except that
this liability limitation shall not apply to Ligand's indemnity
obligation under section 14.3 arising from personal injury or death
caused by the defective design and/or manufacture of the Products when
supplied to Distributor by Ligand or by Ligand's appointee.
15. DISTRIBUTOR'S WARRANTIES, INDEMNITY AND LIMITATIONS OF LIABILITY
15.1 Warranties: Distributor represents and warrants to Ligand that:
(a) Distributor is a corporation duly organized, validly existing
and in good standing under the laws of Spain and has the
corporate power to execute this Agreement and to perform its
obligations hereunder;
(b) the person or persons executing this Agreement on behalf of
Distributor have been duly authorized to do so by all requisite
corporate or other actions of Distributor;
(c) this Agreement is the legal, valid and binding obligation of
Distributor, enforceable in accordance with its terms;
(d) the execution, delivery and performance of this Agreement by
Distributor does not and will not conflict with or result in a
breach of any agreement, instrument or understanding, oral or
written, to which Distributor is a party or by which Distributor
may be bound, nor violate any law or regulation of any court or
Governmental Authority having jurisdiction over Distributor;
(e) Distributor will maintain at all times during this Agreement all
necessary Approvals, according to Clause 4.2; and
(f) all Affiliates of Distributor are duly organized, validly
existing and in good standing under the laws of the country in
which they operate and have the power to perform all obligations
under this Agreement that they are assigned by Distributor.
15.2 Indemnity: Distributor shall indemnify and hold Ligand and its
shareholders, managers, officers, directors, agents and employees
harmless against any and all losses, damages, claims, liabilities,
costs and expenses (including reasonable attorneys' fees) resulting
from any breach by Distributor of this Agreement so declared by a court
of competent jurisdiction or as agreed between the parties, or
resulting from any claim that may be made by reason of any damage
caused by an
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act or omission of Distributor or any of its shareholders, managers,
officers, directors, agents or employees whenever such act or omission
is in connection with this Agreement, contrary to the law and is so
declared by a court of competent jurisdiction or as agreed between the
parties.
15.3 LIMITATION. IN NO EVENT WILL DISTRIBUTOR BE LIABLE FOR CONSEQUENTIAL,
INCIDENTAL OR SPECIAL DAMAGES, INCLUDING ANY LOSS OF PROFITS, EVEN IF
DISTRIBUTOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
16. TERMINATION
16.1 Termination by Ligand: Ligand may terminate this Agreement, at its sole
discretion: (1) in its entirety; or (2) in respect of any specified
part of the Territory and/or any one or more of the Products only, by
giving Distributor thirty (30) days written notice of termination,
effective on the date such notice is received, in the event that:
(a) Distributor breaches any of its material obligations under this
Agreement, and fails to cure such breach within thirty (30) days
of receiving a written notice from Ligand specifying such breach
and requiring it to be cured;
(b) Distributor takes any act or step impairing the Intellectual
Property Rights or does anything that may otherwise adversely
affect the Intellectual Property Rights of Ligand, provided,
however, that Ligand may exercise its rights of termination
pursuant to this Clause 16.1(b) whether or not the Distributor's
legal challenge of Ligand's rights is in good faith;
(c) Distributor enters into insolvency or bankruptcy or is unable to
pay its debts as they fall due, or a trustee or receiver or the
equivalent is appointed to Distributor, or proceedings are
instituted against Distributor in the Territory relating to
dissolution, liquidation, winding up, bankruptcy, insolvency or
the relief of creditors, if such proceedings are not terminated
or discharged within thirty days;
(d) there is a change of control of Distributor, beyond its
corporate structure and owners on the Effective Date, or a sale
or disposition by Distributor to a third party other than its
owners and companies in its corporate structure on the Effective
Date of substantially all of its assets, without the prior
written approval of Ligand, which approval may be given or
withheld in Ligand's sole discretion. For the purposes of this
Clause 16.1(d), the transfer (whether direct or indirect) of all
or a majority of the capital stock of Distributor or the merger,
consolidation or reorganization of Distributor beyond its
corporate structure and owners on the Effective Date shall be
considered a "change in control" of Distributor;
(e) any event of Force Majeure, as defined in Clause 19.6 hereof,
occurs and
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prevents Distributor from performing its obligations
under this Agreement for a period of 90 days or more, provided
there is no commercially reasonable alternative;
(f) Distributor ceases to carry on business in the marketing of
pharmaceutical products in the Territory;
(g) any law, decree, or regulation is enacted within the Territory
which would substantially impair or restrict (1) Ligand's right
to terminate or elect not to renew this Agreement as herein
provided; (2) Ligand's right, title or interest in the Products
or the Intellectual Property Rights therein; or (3) Ligand's
right to collect the purchase prices for the Products as set
forth in this Agreement; or
(h) an adverse event occurs which has substantially impaired the
ability of Distributor to continue to perform its obligations
hereunder and Distributor is unable to provide Ligand with
adequate assurance of future performance.
16.2 Termination by Distributor: Distributor may terminate this Agreement,
at its sole discretion: (1) in its entirety; or (2) in respect of any
specified part of the Territory and/or any one or more of the Products
only, by giving Ligand thirty (30) days written notice of termination,
effective on the date such notice is received, in the event that:
(a) Ligand breaches any of its material obligations under this
Agreement, and fails to cure such breach within thirty (30) days
of receiving a written notice from Distributor specifying such
breach and requiring it to be cured;
(b) any event of Force Majeure, as defined in Clause 19.6 hereof,
occurs and prevents Ligand from performing its obligations under
this Agreement for a period of 90 days or more, provided there
is no commercially reasonable alternative ;
(c) the Governmental Authorities have not issued the requisite
Product Authorization or Approval for any Product for any
country in the Territory;
(d) any law, decree, or regulation is enacted within the Territory
which would substantially impair or restrict (1) Distributor's
right to terminate or elect not to renew this Agreement as
herein provided; (2) Ligand's right, title or interest in the
Products or the Intellectual Property Rights therein; or (3)
Distributor's right to market and distribute the Products in
accordance with this Agreement; or
(e) an adverse event occurs which has substantially impaired
Ligand's ability to continue to perform its obligations
hereunder and Ligand is unable to provide Distributor with
adequate assurance of future performance.
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17. RIGHTS AND OBLIGATIONS UPON TERMINATION/NONRENEWAL
17.1 Cessation of Rights: Upon expiration or termination (collectively, the
"Termination") of this Agreement for any reason whatsoever as provided
herein all rights and obligations of the parties hereunder shall cease,
except as provided in Clauses 17.5 of this Agreement; provided,
however, that Termination of this Agreement shall not relieve the
parties hereto of any obligations accrued prior to said Termination.
Distributor, following notice of Termination by Ligand, shall be
entitled to purchase under the terms and conditions of this Agreement,
any Products the orders for which were accompanied by payment and which
were accepted by Ligand prior to the effective date of Termination,
even though shipment of the Products may be made subsequent to the date
of Termination, provided that Distributor has paid all outstanding
obligations to Ligand. Upon Termination by Ligand pursuant to Clauses
16.1, Distributor shall immediately cease to use any advertising or
promotional materials relating to the Products and discontinue any
previously authorized use of the Trademarks and Confidential
Information (except for activities permitted by the last sentence of
Clause 17.3), and shall cease all conduct that might cause any Person
to believe that Distributor is a Distributor of the Products or
otherwise connected with Ligand.
17.2 Return of Materials and Customer List: Upon Termination, Distributor
shall promptly return to Ligand, or deliver to a third party designated
by Ligand, and shall cause its Dealers and employees to return or
deliver, all sales materials, Confidential Information in written,
recorded or other tangible form and other items in Distributor's
possession, which Ligand has furnished or supplied to Distributor, or
which Distributor has furnished to its Dealers and employees, and all
customer lists for Ligand Products. If Distributor purchased any such
materials or other items, Distributor shall be reimbursed in an amount
equal to the net price paid by Distributor for the same.
17.3 Repurchase of Inventory: Ligand shall have the option, exercisable at
its sole discretion by written notice to Distributor within thirty (30)
days after Termination, to repurchase all or part of Distributor's
remaining inventory of Products. The price payable by Ligand upon the
exercise of the option shall be the net price paid by Distributor to
Ligand for the Products, plus the costs of re-shipment to San Diego,
California, or to such other destination within the Territory as Ligand
may designate. Upon receipt of Ligand's notice of exercise of its
option pursuant to this clause, Distributor shall ship its inventory of
Products on hand to such location as Ligand may designate. If Ligand
does not exercise its rights under this clause, Distributor shall have
the right to sell its existing inventory for a period of six months
months following the date of Termination.
17.4 Product Authorizations, Trademarks and other Product rights: Upon
Termination of this Agreement as provided herein for any reason
whatsoever, Distributor shall immediately take all steps necessary to
transfer to Ligand, or to Ligand's designee, any and all rights
Distributor may have to Product Authorizations, Trademarks and any
other rights associated with the Products, to the extent permitted by
applicable
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law and at Distributor's cost. Distributor shall, at the time for
application for Product Authorizations, take all reasonable steps to
ensure that such transfers may later be completed. If such transfer is
not possible, Distributor shall use its best efforts to arrange for
Ligand or its designee to rely upon such Product Authorizations and
shall permit Ligand or its designee to use and reference such Product
Authorizations in its own applications.
17.5 Survival of Non-Disclosure Obligation: Notwithstanding the Termination
of this Agreement, both Parties shall continue to abide by the terms of
its non-disclosure obligations with respect to Confidential Information
under Clause 12 of this Agreement.
17.6 Waiver of Termination Compensation: Neither Party shall be liable for,
and each Party hereby waives, all right to compensation and all claims
of any kind whether on account of the loss by the other of present or
prospective profits, or anticipated orders, or expenditures,
investments, or commitments made in connection with this Agreement,
goodwill created, or on account of any other cause whatsoever.
18. CERTAIN PAYMENTS
18.1 No Payments: Distributor shall not make, offer or agree to offer
anything of value to any government official, political party or
candidate for government office. Distributor undertakes that there is
not now nor will there be any employment of or beneficial ownership of
Distributor by governmental or political officials in the Territory.
Distributor will indemnify and hold harmless Ligand against any and all
losses, costs, expenses or liabilities resulting from any breach by
Distributor of its obligations under this Clause 18.
19. GENERAL PROVISIONS
19.1 Waivers: The waiver by either party of a breach or default in any of
the provisions of this Agreement by the other party shall not be
construed as a waiver of any succeeding breach of the same or other
provisions.
19.2 Entire Agreement and Amendments: This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements between the parties, whether
written or oral, relating to the same subject matter. No modification,
amendments or supplements to this Agreement shall be effective for any
purpose unless in writing, signed by each party.
19.3 Governing Language: This Agreement has been prepared and executed in
the English language. No authorized translation has been prepared or
executed. In the event that any translation is prepared, the English
language version of this Agreement shall govern. All written
correspondence between the parties shall be in the English language.
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19.4 Further Assurances: Each party agrees to do such acts and execute such
further documents as may be necessary or desirable to enable the
performance of and to fulfill the provisions and intent of this
Agreement.
19.5 Assignments: This Agreement is entered into by Ligand in reliance upon
the facilities, personnel and technical expertise of Distributor, and
Distributor may only transfer or delegate the performance of the
Agreement or any part thereof to a Dealer pursuant to the terms and
conditions of Clause 2.1. Nothing herein contained, however, shall
prevent Ligand or Distributor from assigning this Agreement in whole or
in part to, or causing any order or orders to be filled in whole or in
part by, any Affiliate of Ligand or the Distributor, respectively.
Ligand shall also have the right to assign this agreement in amerger or
acquisition in which Ligand is not the surviving entity, or as part of
a transfer of all or substantially all of the assets of its business to
which this Agreement pertains.
19.6 Force Majeure: Neither party shall be liable to the other party for any
delay or omission in the performance of any obligation under this
Agreement, other than the obligation to pay monies, where the delay or
omission is due to any cause or condition beyond the reasonable control
of the party obliged to perform, including, but not limited to, strikes
or other labor difficulties, acts of God, acts of government (in
particular with respect to the refusal to issue necessary import or
export licenses), war, riots, embargoes, or inability to obtain
supplies ("Force Majeure"). If Force Majeure prevents or delays the
performance by a party of any obligation under this Agreement, then the
party claiming Force Majeure shall promptly notify the other party
thereof in writing.
19.7 Notices: Unless otherwise specifically provided, all notices required
or permitted by this Agreement shall be in writing and in English,
effective upon receipt, and may be delivered personally, or may be sent
by facsimile, commercial express courier, or first class air mail,
postage prepaid, addressed as follows:
If to Ligand: Ligand Pharmaceuticals Incorporated
10275 Science Center Drive
San Diego, California 92121
Attention: General Counsel
Facsimile: (+)(1)(619) 550-1825
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If to Distributor: Ferrer Internacional , S.A.
Gran Via Carlos III, 94,
08028 Barcelona, Spain
Attention: Licensing Department (cc. Legal Department)
Facsimile: (+)(34)(3) 330 80 57
20. CHOICE OF LAW AND DISPUTE RESOLUTION
20.1 Choice of Law: This Agreement is governed by, and shall be construed in
accordance with, the laws of the State of California, United States of
America, excluding (a) conflicts of laws rules, and (b) the United
Nations' Convention on Contracts for the International Sale of Goods.
The parties shall endeavor to resolve amicably any and all disputes
arising under or in connection with this Agreement, including but not
limited to the interpretation of this Agreement, its validity and the
performance hereunder.
20.2 Disputes: Any dispute between the parties relating to the validity,
performance, interpretation or construction of this Agreement that
cannot be resolved amicably between the parties shall be submitted to
the exclusive jurisdiction of the courts, including the United States
District Courts, in the State of California. Each party hereto
irrevocably submits to the personal jurisdiction of the courts in
California, for the resolution of all disputes hereunder.
20.3 Right to Judicial Remedies: Nothing in this Clause 20 shall be
construed to impair or restrict either Party's right to judicial
remedies, including preliminary and permanent injunctions from any
court of competent jurisdiction to prevent any infringement of the
Intellectual Property Rights, representation of competitive products,
and/or disclosure of the Confidential Information.
IN WITNESS WHEREOF, each party has caused its duly authorized representative to
execute and deliver this Agreement in reliance on the due authority of the
representative of the other party, to be effective as of March 26, 1999.
DISTRIBUTOR: LIGAND PHARMACEUTICALS, INC.:
By: /s/ R. FOGUET By: /s/ David E. Robinson
-------------------------- ----------------------------------
Title: CEO Title: Chairman, President & CEO
----------------------- ------------------------------
SERAGEN, INC.:
By: /s/ Paul V. Maier
--------------------------
Title: CEO
-----------------------
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APPENDIX A
PRODUCTS
PRODUCT COVERED INDICATIONS
------- -------------------
Panretin(TM) Gel (alitretinoin) All indications
Panretin(TM) Capsules (alitretinoin) All indications
Ontak(TM) (denileukin diftitox) All indications
Targretin(TM) Gel (bexarotene) The treatment, palliation, prevention
and/or remission of cancer and
dermatological diseases
Targretin(TM) Capsules (bexarotene) The treatment, palliation, prevention
and/or remission of cancer and
dermatological diseases
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APPENDIX B
BASE PRICE SCHEDULE
Targretin(TM) products: ***% of Resale Price.
Ontak(TM) products: ***% of Resale Price.
Panretin(TM)products: ***% of Resale Price.
- ----------
*** Portions of this page have been omited pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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APPENDIX C
NET SALE PRICE SCHEDULE
1. Targretin(TM) products: ***% of Ex-Distributor price in the Territory
2. Ontak(TM)(TM) products: ***% of Ex-Distributor price in the Territory
3. Panretin(TM) products: ***% of Ex-Distributor price in the Territory
- ----------
*** Portions of this page have been omited pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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APPENDIX D
LIGAND TRADEMARKS
Trademark Generic Product Name Country Trademark Status
- --------- -------------------- ------- ----------------
Panretin(TM) alitretinoin US Registered
EP (CTM) Pending
Targretin(TM) bexarotene US Registered
EP(CTM) Pending
Ontak(TM) denileukin diftitox US Pending
EP(CTM) Pending
Onact(TM) denileukin diftitox Portugal Registered
Spain Pending
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