EXHIBIT 10.21
SERVICE AGREEMENT
This Service Agreement (this "Agreement") is made and entered into as
of July 16, 2003 (the "Effective Date"), by and among aaiPharma Inc., a Delaware
corporation with offices located in Wilmington, North Carolina ("AAI") and
Athlon Pharmaceuticals, Inc., a Mississippi corporation with offices located in
Birmingham, Alabama ("Athlon").
RECITALS
AAI has need of certain services from Athlon described in this
Agreement.
Athlon and AAI desire to enter into an agreement under which Athlon
will provide such services to AAI.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, it is agreed as follows:
1. DEFINITIONS:
"AAI Products" has the meaning set forth in Section 3.1 of this Agreement.
"Affiliate" means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such Person. "Control" and, with correlative meanings,
the terms "controlled by" and "under common control with" means the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract, resolution, regulation
or otherwise.
"Law" means any national, supranational federal, state or local law, statute or
ordinance, or any rule, regulation, or published guidelines promulgated by any
Governmental or Regulatory Authority, including all regulations and guidances of
the FDA (including its current good manufacturing practices, or cGMP) or the
DEA.
"Net Sales of the Products" means the gross amount invoiced by AAI or its
Affiliates for sales of the AAI Products to third persons (not including an
Affiliate of AAI), less (i) cash discounts actually taken, (ii)
Medicaid/Medicare rebates, and (iii) actual AAI Product returns. Notwithstanding
the foregoing, in no event will cash discounts, Medicare/Medicaid rebates and
AAI Product returns exceed seven percent (7%) of the gross amount invoiced by
AAI to third parties. Such amounts will be determined from AAI Financial
Information maintained in accordance with U.S. Generally Accepted Accounting
Principles.
"Party" means each of AAI and Athlon and "Parties" mean AAI and Athlon
collectively.
"Person" means any natural person, corporation, general partnership, limited
partnership, limited liability company, joint venture, proprietorship, other
business organization, trust, union, association, or other entity.
2. TERM: The Agreement shall be in effect as of the Effective Date and shall
remain in effect until the expiration of the Services Period (as defined in
Section 3, below), unless sooner terminated in accordance with this Agreement
(the "Term").
3. SCOPE OF SERVICES AND PROFESSIONALISM AND COMPLIANCE
3.1 The Scope of Services.
During the period beginning January 1, 2004 and ending December 31,
2006 (the "Services Period"), Athlon shall provide at least 125 sales
representatives (the "Sales Representatives") who shall promote the AAI Products
in first and second detail position (the "Services"). Athlon shall use the
following targets in performing the first and second details during the Services
Period:
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Per Business Day Per Calendar Month Per Calendar Year
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Number of First Details 500 10,000 120,000
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Number of Second Details 500 10,000 120,000
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Total Details 1000 20,000 240,000
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Athlon shall use its best efforts to perform the Services as described
herein and to meet the targets for number of details per business day, calendar
month and calendar year as described above. For purposes of this Agreement, "AAI
Products" shall mean any AAI product with 100 mg of propoxyphene napsylate
combined with between 1 and 649 mg of acetaminophen and any product not approved
by the FDA as of the Effective Date that contains a combination of propoxyphene
hydrochloride (65 mg) and acetaminophen (1mg to 649 mg). By way of
clarification, "AAI Products" shall not include Darvocet N(R) 100 (propoxyphene
napsylate (100 mg) and acetaminophen (650 mg)).
Within 15 days of the end of each calendar month during the Services
Period, Athlon shall deliver to AAI a report detailing the number of details
performed by Sales Representatives during the prior calendar month (the "Monthly
Report").
Athlon shall detail the specific AAI Product(s) to physicians (as
agreed upon by both Parties) in the specific geographical areas, all as
designated by AAI in writing from time to time, provided that such geographical
areas are already being serviced by Athlon. AAI shall, at AAI's expense, deliver
to Athlon all physician target data, sales reporting data, detail aids,
including AAI Product samples, that AAI intends to be used by Sales
Representatives in the performance of the Services.
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3.2 Professionalism and Compliance.
Athlon shall perform the Services to the best of its ability and shall
require each Sales Representative to perform the Services (i) in a professional
manner consistent with industry standards; and (ii) in conformance with that
level of care and skill ordinarily exercised by professional contract sales
organizations in similar circumstances. In addition, Athlon shall perform the
Services and shall require each Sales Representative to perform the Services in
compliance with all Laws.
4. COMPENSATION AND REIMBURSEMENT
4.1 Compensation.
As full compensation to Athlon under this Agreement, AAI will pay to
Athlon (i) on the Effective Date Three Million Three Hundred Fifty Thousand
Dollars ($3,350,000) for purposes of building its sales force to perform the
Services, and (ii) One Million Two Hundred Thousand Dollars ($1,200,000) per
calendar month during the Services Period for the performance of the Services
(each, a "Calendar Payment"). All currency set forth in this Agreement shall be
United States Dollars. Such payments shall be due and payable whether or not AAI
launches the AAI Products; provided, however, that in the event AAI fails to
launch the AAI Products for reasons beyond AAI's reasonable control (including,
but not limited to the FDA's failure to approve the ANDA for the AAI Products)
AAI may substitute any of its propoxyphene based pharmaceutical products for AAI
Products, in which case, Athlon Sales Representatives shall detail such
substitute product in accordance with the terms of this Agreement. AAI shall pay
a Calendar Payment attributable to a calendar month within five (5) days after
the end of such calendar month.
AAI shall not be obligated to pay for any expenses incurred by Athlon
or the Sales Representatives in the performance of the Services.
4.2 Sales Achievement Incentives.
AAI will pay to Athlon the following sales achievement incentive
payments (each referred to herein as a "Incentive Payment" and collectively
referred to herein as the "Incentive Payments" upon AAI achieving the respective
sales thresholds:
Sales Achievements Sales Incentive Payment
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1. The first, and only the first, time that One Million Dollars
Net Sales of the AAI Products exceed ($1,000,000).
$50 Million.
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2. The first, and only the first, time that Two Million Five Hundred
Net Sales of the AAI Products exceed Thousand Dollars ($2,500,000)
$100 Million.
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3. The first, and only the first, time that Five Million Dollars
Net Sales of the AAI Products exceed ($5,000,000)
$200 Million.
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4. The first, and only the first, time that Five Million Dollars
Net Sales of the AAI Products exceed ($5,000,000)
$300 Million.
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By way of clarification, in no event will AAI be obligated to pay
Incentive Payments in the aggregate in excess of Thirteen Million Five Hundred
Thousand Dollars ($13,500,000). AAI will pay an Incentive Payment in immediately
available funds by wire transfer into a bank account or accounts designated by
Athlon no later than two business days prior to the due date for such Incentive
Payment. An Incentive Payment shall be due within thirty (30) days of the date
that a sales threshold has been reached.
4.3 Inspection Right.
Upon prior written notice and at mutually agreeable times, but not more
than two (2) times per calendar year, AAI shall have the right to inspect the
books and records of Athlon which relate to this Agreement for the purpose of
auditing the documents and Monthly Reports with respect to the Services provided
hereunder.
4.4 Training.
All training of Sales Representatives for purposes of providing the
Services described hereunder will be paid for or provided by AAI, and in either
case, all training shall be held on the premises of Athlon's regular business
office unless otherwise agreed by the Parties.
5. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
5.1 Athlon Representations and Warranties.
Athlon represents and warrants that:
a. It shall perform the Services and cause its Sales
Representatives to perform the Services in substantially the same manner that
it would promote Athlon's own products.
b. Athlon has all necessary power and authority to enter into
this Agreement and to carry out the transactions contemplated hereby. Athlon has
taken all action required by Law, its certificate of incorporation, by-laws or
otherwise to be taken by it to authorize the execution and delivery of this
Agreement by Athlon and the consummation of the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Athlon and, when duly authorized, executed and delivered by AAI, will constitute
a legal, valid and binding obligation of Athlon enforceable against it in
accordance with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other laws of
general application affecting enforcement of creditors' rights generally.
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c. This Agreement and performance hereunder does not violate
or constitute a breach under any organizational document of Athlon or any
contract, other form of agreement, or judgment or order to which Athlon is a
party or by which it is bound.
5.2 AAI Representations and Warranties.
AAI represents and warrants that:
a. AAI has all necessary power and authority to enter into
this Agreement and to carry out the transactions contemplated hereby. AAI has
taken all action required by Law, its organizational documents, or otherwise to
be taken by it to authorize the execution and delivery of this Agreement by AAI
and the consummation of the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by AAI and, when duly authorized,
executed and delivered by Athlon, will constitute a legal, valid and binding
obligation of AAI enforceable against it in accordance with its terms except as
limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other laws of general application affecting
enforcement of creditors' rights generally.
b. This Agreement and performance hereunder does not violate
or constitute a breach under any organizational document of AAI or any contract,
other form of agreement, or judgment or order to which AAI is a party or by
which it is bound.
c. There is no pending proceeding that has been commenced
against AAI that may have the effect of preventing, delaying, making illegal or
otherwise interfering with AAI's duty to make any payments to Athlon pursuant to
Section 4 of this Agreement. To the knowledge of AAI, no such proceeding has
been threatened and AAI has no knowledge of any other contingent or undisclosed
liability that could effect AAI's ability to perform its obligations under
Section 4 of this Agreement.
5.3 Disclaimers. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THIS
AGREEMENT, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE
OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR
STATUTORY WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY,
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE AND WARRANTY OF NON-INFRINGEMENT.
6. INSURANCE
6.1 Athlon Insurance.
Athlon shall maintain the following insurance during the Term and five
(5) years thereafter:
Comprehensive General Liability - $5 million single/aggregate annual
Deductible or SIR limit up to $50,000
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Product Liability $10 million single/aggregate annual
limit up to $50,000
Workers Compensation - $2 million (except in States which
require purchase of state insurance
plan coverage; in those states the
policy limits are whatever is
provided by the State Plan).
Automobile Liability Insurance - $1 million/occurrence
$1 million/accident for bodily
injury, including death and
property damage
6.2 AAI Insurance.
AAI shall maintain the following insurance during the Term and five (5)
years thereafter:
Comprehensive General Liability - $5 million single/aggregate annual
Deductible or SIR limit up to $50,000
Product Liability $10 million single/aggregate annual
limit up to $50,000
Errors and Omissions $5 million single/aggregate annual
Deductible or SIR limit up to $50,000
Workers Compensation - $2 million (except in States which
require purchase of state insurance
plan coverage; in those states the
policy limits are whatever is
provided by the State Plan).
Automobile Liability Insurance - $1 million/occurrence
$1 million/accident for bodily
injury, including death and
property damage
6.3 Each Party will provide the other Party with evidence of it's
insurance. Each Party will name the other Party as an additional insured under
such Party's insurance policy (except that Athlon shall have no obligation to
name AAI as an additional insured on its Product Liability policy), and will
provide to the other Party at least thirty (30) days prior written notice of any
change or cancellation to the such Party's insurance program.
7. CONFIDENTIALITY:
The Confidentiality Agreement between the Parties, dated June 6, 2003
(the "Confidentiality Agreement"), is hereby incorporated herein by reference
and shall continue in full force and effect except that (i) AAI is released from
its obligations thereunder that pertain to the AAI Products and any assets
related to the AAI Products, and (ii) all information pertaining to the AAI
Products and any assets related to the AAI Products will be deemed to be
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Confidential Information of AAI as of the Effective Date and Athlon shall have
the obligations of confidentiality, non-disclosure and non-use set forth in the
Confidentiality Agreement with respect thereto; provided, however, that (i) the
Purpose defined therein will be deemed to also include the exchange or
observation of Confidential Information related to this Agreement and the
consummation of the transactions described herein; and (ii) the obligations of
the Parties under the Confidentiality Agreement will extend until the tenth
(10th) anniversary of the Effective Date.
8. INDEPENDENT CONTRACTOR
Athlon and its directors, officers, and the persons providing Services
under the Agreement are at all times independent contractors with respect to
AAI. Persons provided by Athlon to perform Services shall not be deemed
employees of AAI. AAI shall not be responsible for Athlon's acts or the acts of
its officers, agents and employees while performing the Services whether on AAI
premises or elsewhere.
9. OWNERSHIP OF PROPERTY AND DEVELOPMENTS
All materials and documents supplied to either Party during the Term,
by or through the other, which relate to the Services shall be, as between
Athlon and AAI, the sole and exclusive property of the Party supplying such
materials; provided, however, that in all events the assets related to the AAI
Products shall remain the property of AAI. Each Party agrees to hold all such
property and developments, confidential in accordance with Section 7 of this
Agreement.
10. THIRD PARTY EMPLOYMENT
AAI may not employ during the Term and two years thereafter any person
known by AAI to be employed or formerly employed by Athlon to provide Services
under this Agreement without the prior written consent to Athlon. In the event
AAI breaches this Section 10, Athlon's sole remedies shall be to (a) provide AAI
with written notice of such breach, in which case, AAI will be obligated to
terminate such employee within thirty (30) days of receipt of such notice by
AAI, and (b) AAI shall pay Athlon a cash payment of One Hundred Thousand Dollars
($100,000) per such employee hired. AAI agrees to provide notice to Athlon in
the event that AAI is approached by a person known by AAI to be an Athlon
employee, seeking employment by AAI.
11. INDEMNIFICATION
11.1 Athlon Indemnities. Athlon shall indemnify, reimburse, and hold
harmless AAI, its Affiliates, and their respective officers, directors,
employees, agents, successors and assigns from and against any and all costs,
losses, liabilities, damages, pending, threatened or concluded lawsuits,
deficiencies, claims and expenses (including reasonable fees and disbursements
of attorneys) (collectively, the "Damages") to the extent such Damages are
incurred in connection with or arise out of (i) any breach of any covenant or
agreement of Athlon herein; (ii) the breach of any representation or warranty
made by Athlon in this Agreement (without regard to materiality qualifiers
contained in such representations or warranties); (iii) the negligence or
willful misconduct of Athlon, its employees, agents or contractors; (iv) acts or
omissions outside
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the scope of this Agreement; and (v) the Sales Representatives being deemed to
be employees or agents of AAI for Federal or State income tax purposes, under
the Employee Retirement Income Security Act of 1974, as amended, or any employee
benefit plans of AAI.
11.2 AAI Indemnities. AAI shall indemnify, reimburse, and hold harmless
Athlon, its Affiliates and their respective officers, directors, employees,
agents, successors and assigns from and against any and all Damages to the
extent such Damages are incurred in connection with or arise out of (i) any
breach of any covenant or agreement of AAI herein; (ii) the negligence or
willful misconduct of AAI, its employees, agents or contractors (other than
Athlon); (iii) the breach of any representation or warranty made by AAI in this
Agreement (without regard to materiality qualifiers contained in such
representations or warranties) and (iv) any product liability claims regarding
the AAI Products or any other product produced or marketed by AAI, except to the
extent such claims were caused by the breach of this Agreement by Athlon or the
negligence or willful misconduct of Athlon, its employees, agents or
contractors.
11.3 Limitations on Liability. In no event shall any Party be liable
for incidental, indirect, special, punitive, exemplary or consequential damages
(including lost profits), NO MATTER HOW such damages or lost profits are
incurred including a party's, or its employees', agents' or contractors'
negligence, except to the extent that any such Damages or lost profits are
inCurred by any third party for which such party has an obligation to indemnify
hereunder.
11.4 Time Limitations. Neither Party will have any liability for
indemnification pursuant to Sections 11.1 or 11.2 unless on or before the fourth
anniversary of the termination or expiration of this Agreement (with respect to
all claims other than breaches of covenants) or on or before the later to occur
of the fourth anniversary of the termination or expiration of this Agreement or
four years after the breach of the relevant covenant (with respect to breaches
of covenants), the otherwise liable Party is notified by the other Party of a
claim specifying the factual basis of that claim in reasonable detail to the
extent then known. Any time limitations herein do not apply to payments due to
Athlon pursuant to Sections 4.1 or 4.2 hereof.
11.5 Limitations on Amount. Athlon will have no liability for
indemnification pursuant to Section 11.1 (i), (ii), (iii), (iv) and (v) in
excess of Five Million Dollars ($5,000,000), except to the extent such liability
was caused by fraudulent or criminal conduct. AAI will have no liability for
indemnification pursuant to Section 11.2(i), (ii), (iii) and (iv) in excess of
Five Million Dollars ($5,000,000), except to the extent such liability was
caused by fraudulent or criminal conduct. In addition, neither Party shall have
liability for Damages pursuant to Section 11.1 (i), (ii), (iii), (iv) and/or (v)
in the case of Athlon, and pursuant to Section 11.2(i), (ii), (iii) and (iv) in
the case of AAI, until Damages exceed $50,000 in the aggregate, at which time
such Party shall be liable for all Damages in excess of $50,000. Any limitations
on amount herein do not apply to payments due to Athlon pursuant to Sections 4.1
or 4.2 herein.
11.6 Procedure for Indemnification - Third Party Claims. Promptly after
receipt by an indemnified party under Section 11.1 or 11.2 of notice of
commencement of any proceeding against it by a third party (not a Party or
Affiliate of a Party), such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to the
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indemnifying party of the commencement of such claim. The failure to notify the
indemnifying party within thirty (30) days of receipt of the third party claim
notice will relieve the indemnifying party of any liability that it may have to
any indemnified party with respect to such claim only to the extent the
indemnifying party is actually prejudiced by the failure to provide such timely
notice. If such notice is timely given, the indemnifying party will be entitled
to participate in such proceeding and, to the extent that it wishes, may assume
the defense of such proceeding with counsel satisfactory to the indemnified
party and, after notice from the indemnifying party to the indemnified party of
its election to assume the defense of such proceeding, the indemnifying party
will not be liable to the indemnified party under this Article 11 for any fees
of other counsel or any other expenses with respect to the defense of such
proceeding incurred after such notice. If the indemnifying party assumes the
defense of the proceeding, (1) it will be conclusively established that for
purposes of this Agreement that the claims made in that proceeding are within
the scope of and subject to indemnification; and (2) no compromise or settlement
of such claims may be effected by the indemnifying party without the indemnified
party's consent unless (A) there is no finding or admission of any violation of
legal requirements or any violation of the rights of any person and no effect on
any other claims that may be made against the indemnified party, and (B) the
sole relief provided is monetary damages that are paid in full by the
indemnifying party. If notice is given to an indemnifying party of the
commencement of any proceeding and the indemnifying party does not, within 30
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such proceeding, the
indemnifying party will be bound by any determination made in such proceeding or
any compromise or settlement effected by the indemnified party, provided,
however, that the indemnifying party is otherwise obligated to indemnify the
indemnified party pursuant to this Article 11.
11.7 Procedure for Indemnification - Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
12. TERMINATION
12.1 Immediate Termination
This Agreement may be terminated effective immediately upon giving written
notice as follows:
a. by either Party, in the event that the other Party has committed a
material breach of this Agreement and such breach has not been cured within
thirty (30) days of receipt of written notice from the non-breaching Party of
such breach; or
b. by either Party, in the event that the other Party has become
insolvent or has been dissolved or liquidated, filed or has filed against it, a
petition in bankruptcy and such petition is not dismissed within sixty (60) days
of the filing, makes a general assignment for the benefit of creditors; or has a
receiver appointed for a substantial portion of its assets.
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12.2 Survival
Termination or expiration of this Agreement shall not relieve the
Parties of any obligation accruing prior to such termination or expiration or
any breach of any term of this Agreement prior to such termination. The rights
and obligations of the Parties under Sections 1, 4.1, 4.2, 5, 6, 7, 9, 10, 11,
12.2, 14 and 15 of this Agreement shall survive the expiration or termination of
this Agreement; provided, however, that, notwithstanding the foregoing, Section
4.1 shall not survive in the event AAI terminates this Agreement as a result of
Athlon's breach of Section 5.1.a, which breach will be deemed to be a material
breach of this Agreement.
13. PERFORMANCE OF DUTIES
If Athlon is willing and able to proceed and perform its duties under
this Agreement, and AAI launches the AAI Products and thereafter discontinues
marketing the AAI Products at any time during the Services Period, then all
compensation payable pursuant to Section 4.1 herein will nevertheless continue;
provided, however, that AAI may substitute any of its propoxyphene based
pharmaceutical products for AAI Products provided that AAI discontinues
marketing the AAI Products for reasons beyond AAI's reasonable control, in which
case, Athlon Sales Representatives shall detail such substitute product in
accordance with the terms of this Agreement.
14. ATHLON COVENANTS
Athlon agrees that as of the Effective Date and for and until December
31, 2006, Athlon will not market, promote, sell, export, import or distribute
pharmaceutical products containing propoxyphene or any analog, derivative,
improvement or variation of propoxyphene (each a "Competing Product"), anywhere
in the world.
In the event Athlon receives an offer from a third party to purchase a
Competing Product during the period beginning as of the Effective Date and
ending December 31, 2006, before Athlon accepts an offer from a third party to
purchase the Competing Product Assets, Athlon will provide written notice to AAI
of such offer (the "Competing Product Notice"), with such Competing Product
Notice including the name of the proposed third party and the material terms,
including price, of the proposed transaction (the "Material Terms"). AAI will
have thirty (30) days after receipt of the Competing Product Notice (the
"Negotiation Period") to notify Athlon of its interest in purchasing such
Competing Product named in the Competing Product Notice by providing written
notice to Athlon (the "Third Party Negotiation Notice"). The Parties shall
negotiate in good faith during the Negotiation Period the terms, other than the
Material Terms (which shall be fixed), for the purchase of such Competing
Product Assets. In the event AAI does not deliver a timely Acceptance Notice or
the Parties are unable to agree on non-Material Terms prior to the end of the
Negotiation Period, Athlon shall be entitled to sell the Competing Product
Assets to a third party on terms no more favorable to the third party than the
Material Terms and the non-Material Terms that AAI indicated it could accept
during the Negotiation Period.
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15. MISCELLANEOUS
15.1 Notices
All notices, requests and other communications hereunder must
be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission with answer back
confirmation or mailed (postage prepaid by certified or registered mail, return
receipt requested) or by nationally recognized overnight courier that maintains
records of delivery to the Parties at the following addresses or facsimile
numbers:
If to AAI to:
aaiPharma LLC
2320 Scientific Park Drive
Wilmington, NC 28405
Attn: David Hurley, President
Telephone: (910) 254-7000
Facsimile: (910) 815-2387
With a copy to:
aaiPharma Inc.
2320 Scientific Park Drive
Wilmington, NC 28405
Attn.: General Counsel
Telephone: (910) 254-7000
Facsimile: (910) 815-2387
If to Athlon to:
Athlon Pharmaceuticals
P. O. Box 26708
Birmingham, AL 35260
Attn: Bobby Joe King, Jr.
Telephone: 205-986-1111
Facsimile: 205-942-3074
With a copy to:
Joseph E. Varner, III
Brunini, Grantham, Grower & Hewes, PLLC
P. O. Drawer 119
Jackson, MS 39205
Telephone: 601-948-3101
Facsimile: 601-960-6902
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All such notices, requests and other communications will (a) if
delivered personally to the address as provided in this Section, be deemed given
upon receipt, (b) if delivered by facsimile to the facsimile number as provided
in this Section, be deemed given upon receipt by the sender of the answer back
confirmation and (c) if delivered by mail in the manner described above or by
overnight courier to the address as provided in this Section, be deemed given
upon receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this Section). Any
Party from time to time may change its address, facsimile number or other
information for the purpose of notices to that Party by giving notice specifying
such change to the other Party hereto in accordance with the terms of this
Section.
15.2 Entire Agreement
This Agreement supersedes all prior discussions and agreements, both
written and oral, among the Parties with respect to the subject matter hereof
and contains the sole and entire agreement among the Parties with respect to the
subject matter hereof.
15.3 Waiver
Any term or condition of this Agreement may be waived at any time by
the Party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the Party waiving such term or condition. No waiver by any Party of any term
or condition of this Agreement, in any one or more instances, shall be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement or
otherwise afforded, will be cumulative and not alternative.
15.4 Amendment
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by each Party.
15.5 Third Party Beneficiaries
Except as otherwise expressly set forth in this Agreement, the terms
and provisions of this Agreement are intended solely for the benefit of each
Party and their respective successors or permitted assigns and it is not the
intention of the Parties to confer third-party beneficiary rights or remedies
hereunder or thereunder upon any other Person.
15.6 Assignment; Binding Effect
Neither this Agreement nor any right, interest or obligation hereunder
may be assigned by any Party without the prior written consent of the other
Party; provided, however, that either Party may assign its rights and
obligations under this Agreement, without the prior written consent of the other
Party, to an Affiliate provided that such Affiliate agrees in writing to be
bound by this Agreement. Such consent shall not be unreasonably withheld or
delayed. Any permitted assignee shall assume all obligations of its assignor
under this Agreement. No assignment shall relieve either Party of its
responsibility for the performance of any obligation.
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Athlon may not subcontract any of its obligations hereunder without the prior
written consent of AAI.
15.7 Headings
The headings used in this Agreement have been inserted for convenience
of reference only and do not define or limit the provisions hereof.
15.8 Severability
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective while this Agreement
remains in effect, the legality, validity and enforceability of the remaining
provisions will not be affected thereby.
15.9 Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with
the laws of the State of Georgia applicable to contracts executed and performed
in such state, without giving effect to the conflicts of laws principles. Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any of the parties in the
Courts of the State of Georgia, or, if it has or can acquire jurisdiction, in a
United States District Court in Georgia, and each of the parties consents to the
jurisdiction of such Courts (and of the appropriate appellate courts) in any
such action or proceeding and waives to any objection to venue.
15.10 Expenses
Except as otherwise provided in this Agreement, each Party shall pay
its own expenses and costs incidental to the preparation of this Agreement and
to the consummation of the transactions contemplated hereby.
15.11 Counterparts
This Agreement may be executed in any number of counterparts and by
facsimile, each of which will be deemed an original, but all of which together
will constitute one and the same instrument.
15.12 Promotion and No Substitution. In the event the FDA approves ANDA
#76-429 (the "Initial Product ANDA"), AAI will promote the AAI Product
referenced in the Initial Product ANDA (the "Initial Product") during the
Services Period and will not substitute other AAI Products for Initial Product
under the this Agreement during the Services Period, except as agreed by AAI and
Athlon.
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WHEREFORE, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.
ATHLON PHARMACEUTICALS, INC.
By: /s/ Bobby J. King Jr.
-------------------------
Name: Bobby J. King Jr.
Title: President / CEO
Dated: July 16, 2003
aaiPHARMA INC.
By: /s/ David M. Hurley
-------------------------
Name: David M. Hurley
Title: President
Dated: July 16, 2003
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