EXHIBIT 10.1
Dated March 23, 2005
FERRING PHARMACEUTICALS INC.
and
SAVIENT PHARMACEUTICALS, INC.
COPROMOTION AGREEMENT
1
INDEX
1. DEFINITIONS
2. LIAISON TEAM
3. SAVIENT SALES FORCE
4. SAVIENT'S FINANCIAL COMMITMENT
5. AUDITS AND INSPECTIONS
6. FERRING'S OBLIGATION
7. PHARMACOVIGILANCE AND REGULATORY AFFAIRS
8. CONFIDENTIALITY
9. REVENUE SHARE
10. PAYMENT TERMS
11. JOINT INVENTIONS AND DISCOVERIES; COPYRIGHT MATERIAL
12. INTELLECTUAL PROPERTY AND INFRINGEMENT
13. TRADEMARKS
14. TERM AND TERMINATION
15. INDEMNIFICATIONS
16. ASSIGNMENT
17. INDEPENDENT CONTRACTOR
18. NOTICES
19. ENTIRE AGREEMENT
20. SEVERABILITY
21. REGISTRATIONS
22. GOVERNING LAW AND DISPUTE RESOLUTION
23. EXECUTION IN COUNTERPARTS
2
This agreement (hereinafter "Agreement") is made as of the 23rd day of March,
2005
BETWEEN
(1) Ferring Pharmaceuticals Inc., having its registered office at 400 Rella
Boulevard, Suite 300, Suffern, NY 10901 USA (hereinafter "Ferring")
AND
(2) Savient Pharmaceuticals, Inc., a company duly organised under the laws
of Delaware and having its registered office at One Tower Center, 14th
floor, East Brunswick, NJ 08816, USA (hereinafter "Savient")
WITNESSES THAT
WHEREAS:
(A) Ferring has acquired the rights to market and sell the Product in the
Territory
(B) Savient is prepared, at its own expense, to undertake certain
co-promotional activities with a view to a future share in the
commercial returns of the said Product.
NOW THEREFORE, in consideration of the covenants and obligations expressed below
and intending to be legally bound.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS
1.01 ADVERSE EVENT
Any untoward medical occurrence in a patient or clinical investigation
subject administered a pharmaceutical product and which does not
necessarily have to have a causal relationship with this treatment.
1.02 AFFILIATE
Any corporation, firm or other entity whether de jure or de facto which
directly or indirectly owns, is owned by or is under common control
with a party to this Agreement to the extent of at least 50% of the
equity (or such less a percentage which is the maximum allowed to be
owned by a foreign corporation in a particular jurisdiction) having the
right to vote on or direct the affairs of the entity.
1.03 CONFIDENTIAL INFORMATION
Any and all information regarding a party's technology, products,
business information or objectives disclosed to the other party in
connection with the performance of this Agreement. Notwithstanding the
foregoing, Confidential Information shall not include information that:
3
(a) was known or used by the receiving party or its Affiliates
prior to its date of disclosure to the receiving party as
demonstrated by contemporaneous written records (not including
information relating to the Product or the business sold by
Savient to Ferring and/or its Affiliates that was known or
used by Savient at the time of such sale);
(b) either before or after the date of the disclosure to the
receiving party is lawfully disclosed to the receiving party
or its Affiliates by sources other than the disclosing party
rightfully in possession of such information and not bound by
confidentiality obligations to the disclosing party, provided
that, with respect to such information disclosed to Savient,
such disclosure occurs after the sale to Ferring and/or its
Affiliates of the Product or business sold by Savient to
Ferring and/or its Affiliates;
(c) is independently developed by or for the receiving party or
its Affiliates without reference to or reliance upon the
Confidential Information of the disclosing party as
demonstrated by contemporaneous written records (not including
information relating to the Product or the business sold by
Savient to Ferring and/or its Affiliates that was known or
used by Savient at the time of such sale); or
(d) either before or after the date of the disclosure to the
receiving party or its Affiliates is or becomes published or
otherwise is or becomes part of the public domain without any
breach of this Agreement on the part of the receiving party or
its Affiliates.
1.04 EFFECTIVE DATE
The Closing Date, as defined in the Share Purchase Agreement of even
date herewith, between Savient and Ferring B.V., a Dutch corporation.
1.05 LAUNCH DATE
With respect to any Product and to any country the date on which such
Product was made available to the medical community other than by way
of participation in a clinical trial.
1.06 LIAISON TEAM
Savient and Ferring marketing and sales staff and other appropriate
personnel assembled in accordance with Clause 2.01.
1.07 LICENSE INCOME
4
All amounts received by Ferring and/or its Affiliates from third
parties in connection with or related to the licensing to such third
parties of marketing or sales rights to the Product, including without
limitation (a) all fees, milestone payments and royalties, (b) transfer
pricing amounts paid in respect of Products supplied to such third
parties, (c) investments in securities and (d) research and development
funding, but (notwithstanding the foregoing) excluding:
(i) transfer pricing amounts equal to Ferring's and/or its
Affiliates' actual costs in respect of Products supplied to
such third parties,
(ii) amounts received by Ferring and/or its Affiliates from such
third parties as the purchase price for Ferring's and/or its
Affiliates' debt or equity securities at prices not in excess
of the then-current market price of such securities or, if
such securities are not publicly traded, the then-current fair
market value of such securities, and
(iii) amounts received by Ferring and/or its Affiliates for future
research and development activities undertaken for, or in
collaboration with, such third parties at rates not to exceed
the fair market value of such services.
If non-monetary consideration is received from third parties by Ferring
and/or its Affiliates, then a commercially reasonable monetary value
will be assigned for purposes of calculating License Income.
1.08 NET SALES
(a) The worldwide gross invoiced sales of the Product by Ferring,
its Affiliates and its licensees to unrelated third party
customers, to any national or local governments, hospitals,
drug wholesalers, pharmacies, and other third party customers
(such as distributors, agents or surgicenters and other
institutions, the primary business of which is providing
medical care), less the following deductions ("Deductions"):
(i) direct or indirect credits and allowances or adjustments
(consistent with United States generally accepted accounting
principles, to the extent applicable) granted to such
customers on account of price adjustments, government or other
rebates (e.g. Medicare or Medicaid rebates), rejections,
recalls or returns in respect of the Product previously sold;
(ii) any trade and cash discounts (including any discounts for
prompt payment), rebates, and charge-backs granted to
customers in the case of sales by drug wholesalers where there
are no direct shipments by Ferring, and its Affiliates, to
such customers, and administrative fees paid during the
relevant time period to group purchasing organisations or to
third parties such as pharmaceutical benefit management
companies who are not customers but who are involved in the
acquisition dispensing, utulization or management of
prescriptions, in each case pursuant to this clause (ii) to
the extent and only to the extent such amounts relate to, and
only to, specific sales of the Product; (iii) bad debt amounts
included in Net Sales in prior periods that have remained
uncollected for more than one hundred eighty (180) days
(provided that if such bad debt amounts are subsequently
collected, such amounts will be included in Net Sales in the
period in which they are collected) and (iv) any sales or
other like taxes imposed upon the sale of the Product to the
extent included in the gross sales price (e.g. Value Added
Tax), but excluding any taxes on Ferring's or its Affiliates'
or licensees' income. In the event that Ferring or its
Affiliates obtain marketing authorisation for any Product
other than the Product authorised for sale in the USA under
the tradename NUFLEXXA as of the Effective Date, the parties
shall in good faith negotiate an adjustment to the calculation
of Net Sales for such new Product that excludes any
incremental portion of the sales price of the new Product
fairly attributable to value-adding component(s) or additional
cost of goods such as in relation to a premium delivery
device.
5
1.09 PRODUCT
The injectable product containing 1% sodium hyaluronate authorised for
sale in the USA under the tradename NUFLEXXA and as may be approved for
sale in any other country of the world under that or any other
tradename, on application by Ferring, an Affiliate of Ferring or a
third party so authorised to make such application by Ferring or an
Affiliate of Ferring, as well as any new formulations, dosage
strengths, combination products based on such product, and products
sold in combination with premium delivery devices.
1.10 REASONABLE COMMERCIAL EFFORTS
Such commercial efforts as are consistent with the commercial efforts
generally applied to products of similar potential at similar stages in
their life cycles by pharmaceutical companies of a similar size to the
Ferring affiliate having management responsibility for the particular
country under consideration.
1.11 SERIOUS ADVERSE EVENT
A Serious Adverse Event is an Adverse Event that fulfils one or more of
the following criteria: o fatal o immediately life threatening o
results in persistent or significant disability/incapacity o results in
in-patient hospitalisation or prolongs an existing hospitalisation o
congenital abnormality/birth defect o cancer o manifested signs and
symptoms caused by overdose
1.12 TERRITORY
United States of America, its territories and dependents.
6
1.13 THRESHOLD
The worldwide Net Sales in United States Dollars which must be exceeded
in any particular year for any revenue share to be due to Savient,
being in 2006 USD 20 million, in 2007 USD 30 million and in 2008 USD 40
million.
2. LIAISON TEAM
2.01 The parties will each promptly after the date hereof appoint three
members of staff to a Liaison Team. The Liaison Team shall meet as
required at the reasonable request of either party until termination of
this Agreement but in any case at least twice per year. It is the
intention of the parties that the Liaison Team establish the mode,
method and frequency of communications between the parties with respect
to the activities under this Agreement. The parties will endeavour to
maintain continuity in the staffing of the Liaison Team; however, the
choice of members shall be a matter for the sole discretion of the
appointing party. The Liaison Team will be chaired by a member of
Ferring's staff, who shall have a casting vote in the event of any tied
vote. In the event of a decision being made by a casting vote, any
member of the Liaison Team may request that the decision be reviewed by
the senior management of both parties before such decision is given
effect. This Agreement may only be modified in accordance with Clause
19.01 and not by the decision of the Liaison Team or the exercise of a
casting vote.
2.02 The Liaison Team will manage and allocate resources for the creation
and implementation of all promotional and educational programmes for
the Product in the Territory including all aspects of design and
implementation of such programmes and including spending for
advertising, promotion, medical education, sales forces, Product
samples and related matters. Such promotional and educational
programmes shall be updated annually and provided to the senior
management of each party for review. In managing and allocating
resources for such programmes, the Liaison Team shall be guided by the
principle that Reasonable Commercial Efforts are to be made to maximize
the sales of the Product in the Territory.
3 SAVIENT SALES FORCE
3.01 Subject to the terms and conditions of this Agreement, Ferring hereby
grants Savient the right to promote the Product in the Territory.
Savient will establish a dedicated rheumatology sales force, which
shall include a sufficient number of sales representatives to perform
the call plan for such sales force established in accordance with
Clause 2.02; provided that such obligations shall in no event require
Savient to expend more financial resources in any given year than its
financial commitment for such year pursuant to Clause 4. This sales
force will promote the Product primarily to rheumatologist physicians
treating osteoarthritis of the knee in the Territory. Savient shall be
permitted to utilise the sales force to promote other products;
provided that the Product shall in such cases be promoted in the
primary promotion position and the Product must continue to be detailed
with the agreed upon call reach and frequency as directed by the
Liaison Team. Savient shall ensure that no products manufactured by any
other person, firm or company which compete directly with the Product
are included in any detail in which the Product is included.
7
3.02 The sale representatives utilised by Savient will in each case be
employees or agents of Savient and Savient shall manage all obligations
in respect of their employment, including without prejudice to the
foregoing generality, their salary, bonuses and other benefits, social
security obligations, accommodation and subsistance. Notwithstanding
the foregoing, any bonus plan shall be reasonably designed, consistent
with industry norms, to incentivize Savient's sales representatives to
promote the Product. Savient shall ensure that its staff engaged in
carrying out any activities hereunder work at all times in full
compliance with all applicable laws, regulations and codes of ethical
conduct including the Prescription Drug Marketing Act of 1987. Savient
shall be responsible for all disciplinary matters relating to its sales
representatives; however, Savient shall give reasonable consideration
to any request by Ferring that Savient replace any sales represenative
whom Ferring believes is underperforming or who fails to promote the
Product in a professional and competent manner.
3.03 Savient shall ensure that its staff has an adequate level of training
and knowledge of the Product, and company strategy to carry out its
obligations hereunder and shall provide such specific training for the
disease area and Product as the Liaison Team shall direct.
3.04 Savient will cooperate with respect to any training meetings, fairs and
exhibitions approved by the Liaison Team and shall ensure that its
sales force use only marketing material developed and expressly
approved by Ferring and shall make no claims for the Product beyond
those contained in the marketing authorisation and expressly approved
by Ferring. During the term of this Agreement Savient shall furnish
Ferring with those periodic forecasts reports and work plans as may be
agreed by the Liaison Team from time to time.
3.05 During the term of this Agreement and for a period of one (1) year
thereafter, neither party shall solicit sales representatives employed
or otherwise engaged by the other party for activities under this
Agreement to seek employment or other engagement with such first party;
however, neither party shall be prohibited from engaging any sales
representatives of the other party who independently seek employment
with such first party or who respond to a public advertisement placed
by such first party.
3.06 Savient shall be responsible for sample accountability for its sales
representatives, who shall provide samples to physicians as directed by
the annual marketing plan agreed by the Liaison Team.
3.07 All documents, data and other records obtained by Savient from Ferring
as a result of the Agreement, including any promotional or training
materials, will be and remain the property of Ferring. Such documents,
data and other records shall be kept safely and securely and, with the
exception of those distributed or otherwise used up in the course of
Savient's performance hereunder, shall be promptly returned to Ferring
together with all remaining samples upon expiry or termination of the
Agreement.
8
4 SAVIENT'S FINANCIAL COMMITMENT
Savient hereby commits to an expenditure of USD 20 million during the
period between the Effective Date and December 31, 2006 (which
expenditures during such period shall be allocated by the Liaison Team
with the intent of applying such expenditures to the effective
promotion of the Product) and USD 10 million per year during the
remainder of the term of this Agreement. This shall include the cost of
creating and maintaining the sales force detailed above in Section 3
and Savient's reasonable and documented internal costs reasonably
allocated to Savient's performance of obligations hereunder, with any
sales force costs pro rated for any additional products the Savient
sales force may promote. To the extent that Savient spends less than
its expenditure commitment (as described above in this Clause 4) in any
period, Savient shall contribute the balance of such expenditure
commitment towards the advertising, promotion and medical education
spend for the Product in the Territory as directed by the Liaison Team.
In exceptional circumstances the Liaison Team may agree that a spending
commitment for one period may be carried forward into the following
period. Notwithstanding the foregoing, if the Effective Date of this
Agreement occurs after July 31, 2005, the Liaison Team will discuss and
agree upon changes, if any, to the timing (but not the amounts) of
Savient's financial commitments under this Section 4 required based on
any resulting delay in the commencement of activities under this
Agreement.
5. AUDITS AND INSPECTIONS:
Ferring or its agents shall be entitled during the term of this
Agreement and for six months thereafter in its absolute discretion to
audit or inspect, not more than once per calendar year, the conduct by
Savient of any work undertaken hereunder and Savient's associated
expenditure. Such audits and inspections shall take such form as
Ferring may reasonably think fit and shall include without prejudice to
the foregoing generality the right to inspect any facility being used
by Savient or any subcontractor in relation to such work and to examine
and make copies of any procedures and records both commercial and
financial, relating to the work, always provided that such audits and
inspections are not incompatible with local laws, that such audits and
inspections do not cause unreasonable disruption to the operations of
Savient and that such audits and inspections are undertaken during
normal working hours. Ferring shall give not less than 5 days prior
notice to Savient of its intention to audit or inspect as aforesaid. No
such auditing or inspecting by Ferring shall relieve Savient of any of
its obligations hereunder.
9
With respect to audits or inspections required by third parties, such
as regulatory or governmental authorities, the parties agree to give
each other such notice as is reasonably practicable of any such audit
or inspection of which they become aware and shall grant the other such
access to data, personnel or facilities as may be reasonably necessary
to comply with such audit or inspection. Savient will advise Ferring
promptly of any adverse action by regulatory authorities in relation to
its sales and marketing activities, whether or not the relevant action
is in relation to the work hereunder. The rights of access and
information granted under this Clause 5 shall be without prejudice to
the obligations of confidentiality and rights of ownership contained
elsewhere in the Agreement.
In addition, Ferring shall have the right to monitor the performance
and activities of the Savient sales force in accordance with a plan
approved by the Liaison Team.
6. FERRING'S OBLIGATIONS
6.01 Ferring will commit to a spending level during the term of the
Agreement sufficient to support the sales and marketing effort
necessary to ensure that Reasonable Commercial Efforts are utilised to
maximise sales of the Product in the Territory taking into account the
efforts of Savient's sale force under Clause 3 above and Savient's
financial commitment under Clause 4 above. Outside the Territory
Ferring will ensure that its Affiliates are offered the Product for
each of the countries in which they are active and will launch the
Product themselves or license the rights to third party to launch the
Product if it is commercially reasonable to do so however the decision
as to whether or not a such launch or outlicensing is commercially
reasonable shall be in the sole discretion of the Affiliate concerned
as shall any decisions relating to any subsequent marketing or
promotion of the Product in any such countries outside the Territory.
6.02 Within the Territory Ferring will primarily promote the Product to
orthopaedic surgeons and high prescribing physicians treating
osteoarthritis of the knee.
7. PHARMACOVIGILANCE AND REGULATORY AFFAIRS
7.01 During the term of this Agreement, Ferring shall be responsible for
reporting Adverse Events with respect to the Product to the appropriate
regulatory authorities in accordance with the laws and regulations of
the relevant countries and authorities; however, in the event that
Savient becomes aware of an Adverse Event or Serious Adverse Event it
shall report such information to Ferring's Director of Regulatory
Affairs as follows:
1. Fatal unexpected Adverse Events by telephone or facsimile
within one (1) working day of receipt.
2. All other Serious Adverse Events in writing within five (5)
working days of receipt.
10
3 A summary of all Adverse Events, including Serious Adverse
Events in writing on a monthly basis and giving as far as
reasonably possible a considered interpretation of all such
events, and indicating those cases which have previously been
reported to Ferring. Further information received on any
Serious Adverse Event (or any information which changes an
Adverse Event from an Adverse Event to a Serious Adverse
Event) will also be reported to Ferring within one (1) or five
(5) working days of receipt, according to the above criteria.
Savient's sales representatives shall provide to the physicians they
call upon the telephone number to Ferring's Adverse Event reporting
line (such telephone number to be provided to Savient by Ferring) to
which all Adverse Event reports are to be made. Ferring shall provide
to Savient a bi-monthly summary of Adverse Events reported to Ferring
as well as a copy of each annual safety report that Ferring submits to
the FDA.
7.02 Ferring shall have sole responsibility for contacts with the FDA and
all other regulatory authorities and, except as otherwise required by
applicable law or regulation, Savient shall refer all FDA enquiries
regarding the Product to Ferring. Similarly Savient shall, except as
otherwise required by applicable law or regulation, refer all medical
enquiries regarding the Product to Ferring.
8. CONFIDENTIALITY
8.01 Neither party will disclose or use, at any time during or subsequent
to the term of this Agreement, any Confidential Information of the
other party, its Affiliates or its commercial partners obtained by
such first party in the course of performing its obligations
hereunder, except as required in connection with such first party's
performance of obligations pursuant to this Agreement or with the
other party's prior written approval.
Each party shall only disclose Confidential Information of the other
party to its employees or agents as reasonably required for the
purposes contemplated under this Agreement. Each party shall be
responsible for the acts and omissions of its employees and agents
who have received Confidential Information of the other party, as if
such were such first party's own acts or omissions.
Neither party's obligation of confidence and limitation on use
hereunder shall apply to information that is required by law to be
disclosed; provided that, in the event of any such legal requirement,
the party subject to such requirement shall give prompt notice of the
requirement to the other party so that it may seek appropriate relief
to prevent or limit such disclosure; provided further that any such
legally required disclosure shall be only to the extent so required.
Each party agrees, in addition, not to make any statement on the
other party's behalf or concerning the other party to the press,
media, investors, brokers, banks, financial analysts and/or any other
third party without the prior approval of the other party. Neither
party will use the name of the other party or that of the other
party's staff for advertising or publicity purposes without their
respective consents, except that each may include in its promotional
material or otherwise, references to and quotations from
publications. Notwithstanding anything to the contrary in this Clause
8, either party shall have the right to disclose such information
about the subject matter of this Agreement as such party reasonably
determines is necessary to comply with applicable securities laws or
regulations or the rules of any stock exchange or NASDAQ. This Clause
8 will survive any expiry or termination of this Agreement.
11
9. REVENUE SHARE
9.01 Ferring shall book all the worldwide sales of the Product. Commencing
with the 2006 calendar year, Savient shall be entitled to receive 50%
of the worldwide Net Sales of the Product for all indications exceeding
the applicable annual Threshold.
9.02 In the event that, subject to Clause 6.01, Ferring or an Affiliate of
Ferring licenses the marketing and sales rights to the Product to a
third party outside the Territory, all License Income received by
Ferring or its Affiliate with respect to such licence (and not the
licensee's Net Sales) shall be deemed to constitute Net Sales for the
purpose of determining the parties' sharing of Net Sales pursuant to
Clause 9.01. For the avoidance of doubt, Ferring shall not license the
marketing or sales rights to the Product in the Territory, or in any
other way sell or dispose of the marketing or sales rights to the
Product in the Territory, during the term of this Agreement.
9.03 All payments made to Savient pursuant to this Clause 9 are in
consideration for Savient's performance of promotional obligations in
the Territory. Therefore, the parties acknowledge that no foreign
withholding tax or similar tax based on foreign source economic
activity shall be withheld from any amount payable to Savient pursuant
to this Clause 9.
10. PAYMENT TERMS
10.01 Commencing with the 2006 calendar year, beginning in the calendar
quarter in which the relevant Threshold has been reached for any
calendar year during the term of this Agreement, payments due under
Clause 9 above shall be calculated quarterly on a calendar basis and
shall be payable within thirty (30) days after the end of the relevant
quarter. Each remittance shall be accompanied by a true accounting of
all Net Sales, sales by licensees or co-promoters and License Income
received by Ferring and its Affiliates and any other relevant
information. In addition, during the term of this Agreement, Ferring
shall report all Net Sales, sales by licensees or co-promoters and
License Income received by Ferring and its Affiliates on a monthly
basis to Savient within ten (10) days after the end of each calendar
month.
12
10.02 Savient with respect to any payment due hereunder shall have the right
at its own expense (save as provided below) for an independent
certified public accountant or like person reasonably acceptable to
Ferring to examine all records, including those held by licensees and
co-promoters, relating to Net Sales, sales by licensee and co-promoters
and License Income received by Ferring and its Affiliates and any other
relevant information during regular business hours during the life of
this Agreement and for one (1) year after its termination, provided
however that such examination shall not take place more than once a
year and shall not cover such records for more than the preceding two
(2) years and, provided further that such accountant shall report to
Savient only as to the accuracy of the payments made to it by Ferring
under this Agreement. In the event that such inspection reveals a
discrepancy in payments made in excess of 5% for any calendar quarter,
Ferring shall pay Savient's reasonable costs incurred in connection
with the inspection. Any sums found to be owing to either party as a
result of the inspection shall be paid over promptly with interest as
set forth in Clause 10.05; provided that Savient shall not be required
to pay interest on any overpayment by Ferring discovered as a result of
such inspection.
10.03 All payments due under this Agreement shall be payable in United States
Dollars.
10.04 Monetary conversion of Net Sales into United States Dollars shall be
calculated in accordance with the rates and methodology utilised by
Ferring in preparing its own monthly accounts as verified by Ferring's
auditors.
10.05 Either party shall, without prejudice to its other rights, be entitled
to charge the other interest on overdue payments of 2% (two percent)
per annum above the EURIBOR accruing at a daily rate from the date
payment becomes due until payment is made.
11. JOINT INVENTIONS AND DISCOVERIES; COPYRIGHT MATERIAL
Any invention, discovery or know-how (whether patentable or not) made
jointly by the parties in the course of activities under this Agreement
shall be jointly owned by the parties; provided that any such joint
invention or discovery that is incorporated into or otherwise applied
to the Product shall not be incorporated into or applied to any product
that competes with the Product by either party.
Any copyright material which may be created by Savient or to which
Savient may contribute under this Agreement will belong absolutely to
Ferring, provided that such copyright material is created in the course
of fulfilling Savient's obligations hereunder. Savient will at
Ferring's request and expense, assign to Ferring its title to any such
copyright material.
No royalty or other payment will be due by either party to the other in
respect of any such joint invention, discovery or know-how, or by
Ferring to Savient in respect of any such copyright material.
13
12. INTELLECTUAL PROPERTY AND INFRINGEMENT
12.01 Savient shall promptly inform Ferring of any information that comes to
its attention involving actual or apparent infringements or
misappropriations of patents, know-how or trademarks by any third party
or any claims of intellectual infringement made by any third party
regarding the manufacture, import, offer for sale, sale or use of the
Product. In the event of such infringement by a third party, it shall
be a matter for Ferring's sole discretion whether and what action to
take in response to any such information but in the event that Ferring
decides to initiate any action or proceeding against an alleged
infringer Savient will provide all such reasonable support and
assistance as Ferring may request all at Ferring's expense. In the
event of any claim of intellectual infringement made by any third party
regarding the manufacture, import, offer for sale, sale or use of the
Product, Ferring shall indemnify and hold harmless Savient, its
officers, directors, shareholders, employees, successors and assigns
from any loss, damage or liability including reasonable attorneys' fees
resulting from such claim and any related complaint, suit, proceeding
or cause of action; provided that Ferring shall not have any obligation
to indemnify or hold harmless Savient for any matter as to which
Savient has an obligation to indemnify Ferring or any Affiliate of
Ferring pursuant to the agreement under which Savient transferred
ownership rights in the Product to an Affiliate of Ferring.
12.02 Any compensation awarded from third parties as a result of Ferring's
enforcement of its rights shall, after deduction of Ferring's costs and
expenses incurred in relation to obtaining such compensation, be
retained by Ferring, save for any portions of any award that are
reasonably attributable to lost sales, which portions shall be deemed
to constitute Net Sales for the purpose of determining the parties'
sharing of Net Sales pursuant to Clause 9.01.
13. TRADEMARKS
13.01 In connection with its co-promotion function hereunder Savient shall be
entitled to use the trademarks of Ferring and/or its Affiliates in the
form in which they are displayed on the labels, packaging and
advertising provided or approved by Ferring. Savient shall not acquire
any property rights whatsoever in Ferring's trademarks nor shall it use
any other trademark in relation to the use or marketing of the Product.
14. TERM AND TERMINATION
14.01 Notwithstanding anything to the contrary herein, neither party shall
have any obligations under this Agreement (other than Sections 2 and 8)
until the Effective Date. This Agreement shall become effective on the
Effective Date (except for Sections 2 and 8, which shall become
effective on the date hereof) and shall, unless earlier terminated,
remain in effect until 31 December 2008. Savient shall be entitled to
terminate this Agreement effective as of 31 March 2007 in the event
that worldwide Net Sales of the Product fail to exceed USD 20 million
during 2006. For each calendar quarter commencing after 31 December
2006, Savient may also terminate this Agreement effective as of the
close of the next ensuing calendar quarter, in the event that worldwide
Net Sales of the Product during such calendar quarter do not meet or
exceed the sum of (a) one quarter of the Threshold set for the
applicable calendar year plus (b) USD 5 million. Savient's notice of
its intention to terminate must in each case be provided to Ferring no
less than ten (10) days after Savient's receipt, pursuant to Clause
10.01, of (i) with respect to 2006, the Net Sales report for the fourth
quarter of 2006 and (ii) with respect to any subsequent calendar
quarter, the Net Sales report for such calendar quarter.
14
14.02 If either party fails or neglects to perform material covenants or
provisions of this Agreement and if such default is not corrected
within sixty (60) days after (or, in the case of payment defaults, ten
(10) days after) receiving written notice from the other party with
respect to such material default, such other party shall have the right
to terminate this Agreement by giving written notice to the party in
default, provided the notice of termination is given within six (6)
months of the default and prior to correction of the default.
14.03 Either party may terminate this Agreement at any time if the other
party shall file in any Court or agency pursuant to any statute or
regulation of any state or country a petition in bankruptcy or
insolvency or for re-organisation (other than for the purposes of
merger or amalgamation) or for an arrangement with its creditors or for
the appointment of a receiver or trustee of the party or of all or a
significant portion of its assets or if that party proposes a written
agreement of composition or extension of its debts or shall be served
with an involuntary petition against it filed in any insolvency
proceeding, and such petition shall not be dismissed within one hundred
twenty (120) days after the filing thereof or if such party shall
propose or be a party to any dissolution or liquidation or shall make
an assignment for the benefit of its creditors.
14.04 Termination of this Agreement shall not affect the rights of either
party accrued up to the date of termination.
14.05 Notwithstanding termination of this Agreement for whatever reason, the
terms of Clauses 1, 5, 6, 8, 10.02, 10.05, 11, 12 15, 18, 20, 22 and 23
shall remain in full force and effect.
15
15. INDEMNIFICATIONS
15.01 Ferring shall indemnify and hold harmless Savient, its officers,
directors, shareholders, employees, successors and assigns from any
loss, damage or liability including reasonable attorneys' fees
resulting from any claim, complaint, suit, proceeding or cause of
action against any of them alleging physical or other injury including
death brought by or on behalf of an injured party, loss of service or
consortium or a similar such claim, complaint, suit, proceeding or
cause of action brought by a friend, spouse, relative or companion of
an injured third party due to such physical injury or death and arising
out of the administration, utilisation and/or ingestion of Product
manufactured, sold or otherwise provided to the injured party by
Ferring (or its Affiliates, co-marketeers, co-promoters, distributors
or licensees). Savient shall indemnify and hold harmless Ferring, its
officers, directors, shareholders, employees, successors and assigns
from any loss, damage or liability including reasonable attorneys' fees
resulting from any claim, complaint, suit, proceeding or cause of
action against any of them alleging physical or other injury including
death brought by or on behalf of an injured third party, loss of
service or consortium or a similar such claim, complaint, suit,
proceeding or cause of action brought by a friend, spouse, relative or
companion of an injured third party due to such physical injury or
death, and arising out of the administration, utilisation and/or
ingestion of Product manufactured, sold or otherwise provided to the
injured third party by Savient or its Affiliates, and arising out of
the negligence, wilful misconduct or unlawful activity of, or promotion
of any claim not expressly approved by Ferring by, Savient or any
member of its staff, its agents or contractors. In either case:
(a) the indemnifying party shall not be obligated under this
clause if it is shown by evidence acceptable in a court of law
having jurisdiction over the subject matter and meeting the
appropriate degree of proof for such action that the injury
was the result of the negligence or wilful misconduct or
unlawful activity of any employee or agent of the other party.
(b) the indemnifying party shall have no obligation under this
clause to the extent:
1. the party seeking indemnification fails to give the
indemnifying party prompt written notice of any claim
or lawsuit or other action for which the party
seeking indemnification seeks to be indemnified under
this Agreement and, as a consequence, the
indemnifying party is prejudiced;
2. the indemnifying party acknowledges that it is
obligated to indemnify and hold harmless the party
seeking indemnification from such lawsuit or other
action and the party seeking indemnification refuses
to grant the indemnifying party full authority and
control over the defence and settlement of such
lawsuit or other action; or
3. the party seeking indemnification fails to co-operate
as reasonably requested by the indemnifying party and
its agents in the defence of the claims or lawsuit or
other action.
(c) The indemnified party shall have the right to participate in
the defence of any such claim, complaint, suit, proceeding or
cause of action referred to in this clause utilising legal
counsel of its choice providing, however, that the
indemnifying party shall have full authority and control to
handle any such claim, complaint, suit, proceeding or cause of
action including any settlement or other disposition thereof
for which indemnification is sought under this clause;
provided that the indemnifying party shall not settle any such
claim, complaint, suit, proceeding or cause of action unless
such settlement includes a full release of all liabilities and
obligations of the party seeking indemnification in connection
therewith other than financial liabilities against which the
indemnifying party will indemnify and hold harmless the party
seeking indemnification.
16
15.02 Each party shall defend, indemnify and hold harmless the other and said
other's officers, directors, shareholders, employees, successors and
assigns from and against any and all third party damages, claims,
costs, law suits, liabilities or expenses including reasonable
professional fees arising out of or resulting from or in connection
with such party's breach of this Agreement or the negligence or wilful
misconduct or unlawful activity of any employee or agent of such party,
provided:
(a) the indemnifying party shall not be obligated under this
clause if it is shown by evidence acceptable in a court of law
having jurisdiction over the subject matter and meeting the
appropriate degree of proof for such action that the injury
was the result of the negligence or wilful misconduct or
unlawful activity of any employee or agent of the other party.
(b) the indemnifying party shall have no obligation under this
clause to the extent:
1. the party seeking indemnification fails to give the
indemnifying party prompt written notice of any claim
or lawsuit or other action for which the party
seeking indemnification seeks to be indemnified under
this Agreement and, as a consequence, the
indemnifying party is prejudiced;
2. the indemnifying party acknowledges that it is
obligated to indemnify and hold harmless the party
seeking indemnification from such lawsuit or other
action and the party seeking indemnification refuses
to grant the indemnifying party full authority and
control over the defence and settlement of such
lawsuit or other action; or
3. the party seeking indemnification fails to co-operate
as reasonably requested by the indemnifying party and
its agents in the defence of the claims or lawsuit or
other action.
(c) The indemnified party shall have the right to participate in
the defence of any such claim, complaint, suit, proceeding or
cause of action referred to in this clause utilising legal
counsel of its choice providing, however, that the
indemnifying party shall have full authority and control to
handle any such claim, complaint, suit, proceeding or cause of
action including any settlement or other disposition thereof
for which indemnification is sought under this clause;
provided that the indemnifying party shall not settle any such
claim, complaint, suit, proceeding or cause of action unless
such settlement includes a full release of all liabilities and
obligations of the party seeking indemnification in connection
therewith other than financial liabilities against which the
indemnifying party will indemnify and hold harmless the party
seeking indemnification.
17
16. ASSIGNMENT
16.01 This Agreement and the licences herein granted shall be binding upon
and inure to the benefit of the successors in interest of the
respective parties.
16.02 Neither party shall assign any of its rights or obligations under this
Agreement without the prior written consent of the other party, save
that either party may assign its rights and obligations under this
Agreement to any of its respective Affiliates or to any company with
which it may merge or consolidate or to any company to whom it may
transfer all or substantially all of its assets or to any company by
which it may be acquired (including in each case any company created as
a new vehicle upon any such merger, transfer or acquisition), provided
that such company undertakes directly to the other original party under
this Agreement to be bound by the terms of this Agreement.
17. INDEPENDENT CONTRACTORS
17.01 The parties are independent contractors under this Agreement and no
other relationship is intended, including without limitation any
partnership, joint venture or agency relationship. Neither party shall
act in a manner that expresses or implies a relationship other than of
independent contractor nor bind the other party except as otherwise
expressly provided in this Agreement. Nothing in this Agreement shall
be deemed to infer any direct relationship between Savient and any
Affiliate of Ferring.
18. NOTICES
18.01 Any notice required or permitted under this Agreement shall be sent by
air mail, postage pre-paid to the following addresses of the parties
(except as otherwise provided by Clause 7.01).
Ferring Pharmaceuticals Inc. 400 Rella Boulevard, Suite 300
Suffern, New York 10901 USA
(Attention President)
with a copy to
Ferring International Center SA Avenue de Rhodanie 60
1007 Lausanne
Switzerland
(Attention: General Counsel)
Savient Pharmaceuticals, Inc. One Tower Center, 14th floor
East Brunswick, NJ 08816 USA
(Attention: General Counsel)
18
with a copy to
Wilmer Cutler Pickering
Hale and Dorr LLP 399 Park Avenue
New York, New York 10022 USA
Attention: David E. Redlick, Esq.
18.02 Any notice required or permitted to be given concerning this Agreement
shall be effective upon receipt by the party to whom it is addressed.
19. ENTIRE AGREEMENT
19.01 This Agreement constitutes the entire Agreement between the parties
relating to the subject matter hereof and supersedes all previous
writings and understandings. No terms or provisions of this Agreement
shall be varied or modified in any prior or subsequent statement,
conduct or act of either of the parties, except that the parties may
amend this Agreement by written instruments executed on behalf of both
parties and making express reference to this Agreement.
20. SEVERABILITY
20.01 In the event any portion of this Agreement shall be held illegal, void
or ineffective, the remaining portions hereof shall remain in full
force and effect.
20.02 If any of the terms or provisions of this Agreement are in conflict
with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may
conflict therewith and shall be deemed to be modified to conform with
such statute or rule of law.
20.03 In the event that the terms and conditions of this Agreement are
materially altered as a result of Clause 20.01 or 20.02 above, the
parties will renegotiate the terms and conditions of this Agreement to
resolve any inequities.
21. REGISTRATION
21.01 Either party shall have the right at any time to record, register or
otherwise notify this Agreement to appropriate governmental or
regulatory offices having first given thirty (30) days' written notice
to the other party of its intention so to do. The other party shall
provide reasonable assistance in effecting such recording, registering
or notifying.
19
22. GOVERNING LAW AND DISPUTE RESOLUTION
22.01. This Agreement shall be governed by the laws of State of New York
(excluding any rules of conflicts of laws that would apply the
substantive laws of any other jurisdiction). Any disputes arising from
this Agreement, which can not be resolved through good faith
discussions, shall be referred to and finally settled by in accordance
with the procedure set out in Appendix A.
23. EXECUTION IN COUNTERPARTS
23.01 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above.
FERRING PHARMACEUTICALS INC.
By: /s/ Wayne C. Anderson
-------------------------------------------
Name: Wayne C. Anderson
Title: President & CEO
SAVIENT PHARMACEUTICALS, INC.
By: /s/ Philip K. Yachmetz
---------------------------------------------
Name: Philip K. Yachmetz
Title: Senior Vice President -
Corporate Strategy & General
Counsel
20
APPENDIX A
DISPUTE RESOLUTION MECHANISM
The parties recognise that a bona fide dispute as to certain matters may arise
from time to time during the term of this Agreement that relates to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute ("ADR") provision, a party first must send written notice of
the dispute to the other party for attempted resolution by good faith
negotiations between the parties. In the event that the parties fail to reach a
negotiated resolution within fourteen (14) days after written notice of the
dispute, the matter shall be referred to their respective Chief Executive
Officers.
If the matter has not been resolved by the parties' respective Chief Executive
Officers within fourteen (14) days after referral to such Chief Executive
Officers, either party may initiate an ADR proceeding as provided herein. The
parties shall have the right to be represented by counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the
other party of the issues to be resolved by ADR. Within fourteen (14) days
after its receipt of such notice, the other party may, by written notice to
the party initiating the ADR, add additional issues to be resolved within
the same ADR.
2. Within twenty-one (21) days following receipt of the original ADR notice,
the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are
unable to agree on a mutually acceptable neutral within such period, either
party may request the President of the CPR Institute for Dispute Resolution
("CPR"), 366 Madison Avenue, 14th Floor, New York, NY 10017, to select a
neutral pursuant to the following procedures:
(a) The CPR shall submit to the parties a list of not less than five (5)
candidates within fourteen (14) days after receipt of the request,
along with a Curriculum Vitae for each candidate. No candidate shall
be an employee, director, or shareholder of either party or any of
their subsidiaries or Affiliates.
(b) Such list shall include a statement of disclosure by each candidate of
any circumstances likely to affect his or her impartiality.
(c) Each party shall number the candidates in order of preference (with
the number one (1) signifying the greatest preference) and shall
deliver the list to the CPR within seven (7) days following receipt of
the list of candidates. If a party believes a conflict of interest
exists regarding any of the candidates, that party shall provide a
written explanation of the conflict to the CPR along with its list
showing its order of preference for the candidates. Any party failing
to return a list of preferences on time shall be deemed to have no
order of preference.
21
(d) If the parties collectively have identified fewer than three (3)
candidates deemed to have conflicts, the CPR immediately shall
designate as the neutral the candidate for whom the parties collective
have indicated the greatest preference. If a tie should result between
two (2) candidates, the CPR may designate either candidate. If the
parties collectively have identified three (3) or more candidates
deemed to have conflicts, the CPR shall review the explanations
regarding conflicts and, in its sole discretion, may either (i)
immediately designate as the neutral the candidate for whom the
parties collectively have indicated the greatest preference, or (ii)
issue a new list of not less than five (5) candidates, in which case
the procedures set forth in subparagraphs 2(a) - 2(d) shall be
repeated.
3. No earlier than twenty-eight (28) days or later than fifty-six (56) days
after selection, the neutral shall hold a hearing to resolve each of the
issues identified by the parties. The ADR proceeding shall take place at a
location agreed upon by the parties. If the parties cannot agree, the
neutral shall designate a location other than the principal place of
business of either party or any of their subsidiaries or Affiliates.
4. Each party to the proceeding shall be entitled to make one (1) document
request to the other party, limited to no more than five (5) specific
requests, subject to the right of the neutral to rule on any objection to
such request, which shall not be subject to appeal. Any such document
request shall be delivered no later than twenty-four (24) days prior to the
hearing. Documents in response to such requests shall be provided within
ten (10) days of the request. Each party may also take up to three (3)
depositions, subject to the right of the neutral to rule on any objection
to such deposition, which shall not be subject to appeal.
5. At least seven (7) days prior to the hearing, each party shall submit the
following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely in any oral
or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the hearing, and
a short summary of the anticipated testimony of each witness;
(c) a pre-hearing brief setting forth the party's factual and legal
contentions, as well as its contentions on damages claimed. The brief
shall not exceed twenty (20) pages. This page limitation shall apply
regardless of the number of issues raised in the ADR proceeding.
6. The hearing shall be conducted on two (2) consecutive days and shall be
governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each party has
had the five (5) hours to which it is entitled.
22
(b) Each party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or
other evidence, to cross-examine witnesses, and to make a closing
argument. Cross-examination of witnesses shall occur immediately after
their direct testimony, and cross-examination time shall be charged
against the party conducting the cross-examination.
(c) The party initiating the ADR shall begin the hearing and, if it
chooses to make an opening statement, shall address not only issues it
raised but also any issues raised by the responding party. The
responding party, if it chooses to make an opening statement, also
shall address all issues raised in the ADR. Thereafter, the
presentation of regular and rebuttal testimony and documents, other
evidence, and closing arguments shall proceed in the same sequence.
(d) Except when testifying, witnesses shall be excluded from the hearing
until closing arguments.
(e) Settlement negotiations, including any statements made therein, shall
not be admissible under any circumstances. Affidavits prepared for
purposes of the ADR hearing also shall not be admissible. As to all
other matters, the neutral shall have sole discretion regarding the
admissibility of any evidence.
7. Within seven (7) days following completion of the hearing, each party may
submit to the other party and the neutral a post-hearing brief in support
of its contentions, provided that such brief shall not contain or discuss
any new evidence and shall not exceed ten (10) pages. This page limitation
shall apply regardless of the number of issues raised in the ADR
proceeding.
8. The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its
entirety the proposed ruling and remedy of one of the parties on each
disputed issue but may adopt one party's proposed rulings and remedies on
some issues and the other party's proposed rulings and remedies on the
other issues. The neutral shall not issue any written opinion or otherwise
explain the basis of the ruling.
9. The neutral shall be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the fees
and expenses of a court reporter, and any expenses for a hearing room,
shall be paid as follows:
(a) If the neutral rules in favour of the one party on all disputed issues
in the ADR, the losing party shall pay one hundred percent (100%) of
such fees and expenses.
(b) If the neutral rules in favour of one party on some issues and the
other party on other issues, the neutral shall issue with the rulings
a written determination as to how such fees and expenses shall be
allocated between the parties. The neutral shall allocate fees and
expenses in a way that bears a reasonable relationship to the outcome
of the ADR, with the party prevailing on more issues, or on issues of
greater value or gravity, recovering a relatively larger share of its
legal fees and expenses.
23
10. The rulings of the neutral, including rulings on the allocation of fees and
expenses, shall be binding, non-reviewable, and non-appealable, and may be
entered as a final judgement in any court having jurisdiction.
11. Except as provided in paragraph 10 or as required by law, the existence of
the dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings and briefs), and the
rulings shall be deemed Confidential Information. The neutral shall have
the authority to impose sanctions for unauthorised disclosures of
Confidential Information.
25