UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) December 22, 1999
Salix Pharmaceuticals, Ltd.
(Exact name of registrant as specified in its charter)
British Virgin Islands 000-23265 94-3267443
(State of other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
3600 West Bayshore Road, Palo Alto, California 94303
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (650) 849-5900
Not applicable
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
Attached as Exhibit 99.1 is a press release issued by Salix
Pharmaceuticals, Ltd., dated December 22, 1999, announcing that it had
entered into the following agreements with Astra AB: (1) Termination and
Settlement Agreement dated as of December 22, 1999, by and between Astra
and Salix Pharmaceuticals, Inc. (a wholly owned subsidiary of Salix
Pharmaceuticals, Ltd.), attached as Exhibit 10.22; and (2) Agreement
dated December 22, 1999, between Glycyx Pharmaceuticals, Ltd (a wholly
owned subsidiary of Salix) and Astra, attached as Exhibit 10.23.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
10.22 Termination and Settlement Agreement dated as of December 22,
1999, by and between Astra AB and Salix Pharmaceuticals, Inc.
(a wholly owned subsidiary of Salix Pharmaceuticals, Ltd.)
10.23 Agreement dated December 22, 1999, between Glycyx
Pharmaceuticals, Ltd (a wholly owned subsidiary of Salix
Pharmaceuticals, Ltd.) and Astra AB.
99.1 Press Release dated December 22, 1999
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 22, 1999
Salix Pharmaceuticals, Ltd.
By: /s/ Robert P. Ruscher
Robert P. Ruscher
President and Chief Executive Officer
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
10.22 Termination and Settlement Agreement dated as of December 22, 1999,
by and between Astra AB and Salix Pharmaceuticals Inc. (a wholly
owned subsidiary of Salix Pharmaceuticals, Ltd.)
10.23 Agreement dated December 22, 1999, between Glycyx Pharmaceuticals,
Ltd (a wholly owned subsidiary of Salix Pharmaceuticals, Ltd.) and
Astra AB.
99.1 Press Release dated December 22, 1999
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EXHIBIT 10.22
TERMINATION AND SETTLEMENT AGREEMENT
This Termination and Settlement Agreement (the "TERMINATION AGREEMENT")
is entered into effective as of the 22nd day of December, 1999, by and between
Astra AB, a Swedish corporation ("ASTRA"), and Salix Pharmaceuticals, Inc., a
California corporation ("SALIX").
W I T N E S S E T H:
WHEREAS, Astra and Salix are parties to that certain Co-Participation
Agreement dated as of April 30, 1993 (the "CO-PARTICIPATION AGREEMENT"), as
amended from time to time in accordance with its terms or otherwise varied by
agreement between the parties, including, without limitation, Amendment No. 1 to
Co-Participation Agreement dated September 30, 1992, that certain letter
agreement dated October 16, 1998 and that certain letter agreement dated 21st
September, 1992 regarding Clause 6.6 of the Research and Development Agreement
dated 21st September 1992 between Astra and Glycyx Pharmaceuticals, Ltd. (all
such agreements and amendments with respect to the Co-Participation Agreement or
otherwise with respect to Balsalazide and/or products containing Balsalazide in
the United States are hereafter collectively referred to as the "AGREEMENTS"),
and all capitalized terms not otherwise defined herein are used as defined in
the Agreements;
WHEREAS, Salix has given Astra notice under Section 6.5 of the
Co-Participation Agreement that Salix has incurred actual costs in excess of the
total amount under Article 6.1 of the Co-Participation Agreement (US
$5,500,000), and that Salix is unwilling to incur additional expenses in excess
of such amount to complete the Project in accordance with the terms of the
Agreements;
WHEREAS, Astra is unwilling to make available additional funds to
complete the Project;
WHEREAS, under the terms of the Agreements, the Agreements will
consequently terminate;
WHEREAS, the parties hereto wish to clarify their respective rights and
obligations in connection with the termination of the Agreements, including the
provision of mutual releases of claims relating thereto;
NOW, THEREFORE, in consideration of the above mentioned premises, the
mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
<PAGE>
1. Termination of the Agreements. The parties hereby agree that the
Agreements and any and all licenses and other rights granted by Salix to Astra
thereunder have terminated in their entirety, effective as of the date hereof;
provided, however that Astra's obligations of confidentiality and non-use set
forth in Section 20.1 of the Co-Participation Agreement shall survive for a
period of ten (10) years from the date hereof.
2. Transfer of Materials. Within ninety (90) days after the date
hereof, Astra shall, at no cost to Salix except as otherwise set forth in
Section 2(c):
(a) provide Salix access to, and one copy of, all information and
data of whatsoever nature developed by or on behalf of Astra
relating to Balsalazide or the Product (other than
correspondence between Salix and Astra) which Astra may have
in its possession or under its control including but not
limited to all scientific, medical and safety data, pricing
analyses, sales forecasts, marketing plans, market research
and other marketing information directly relating to
Balsalazide or the Product, provided that Astra shall be
entitled to delete information subject to applicable
confidentiality privileges and for protection of proprietary
information of Astra that is not related to the development,
formulation, manufacture, commercialization, sale or use of
Balsalazide or the Product;
(b) at the option of Salix, either destroy in a manner
satisfactory to Astra and Salix or return to Salix all Product
Information and confidential information provided by or on
behalf of Salix to Astra pursuant to or in connection with the
Agreements; provided, however, that the general counsel for
Astra may retain one copy of such confidential information in
such counsel's possession solely for archival purposes to
evidence the scope of Astra's confidentiality obligation; and
(c) devote sufficient resources (including personnel) during the
aforementioned ninety (90)-day period to ensure a smooth and
businesslike transfer of any and all such materials; provided
that Salix shall bear any of Astra's reasonable out-of-pocket
costs for travel, hotel and related costs directly incurred in
providing such assistance.
Following the aforementioned ninety (90)-day period, Astra shall forward to
Salix any materials, in the nature of those set forth above, subsequently
received or identified by Astra or its affiliates.
3. Payments. Within two (2) business days after the execution hereof,
Astra shall pay Salix by wire transfer of immediately available funds the sum of
One Million Dollars (US $1,000,000). Such wire transfer shall be made to the
Salix Pharmaceuticals, Inc. General Checking Account, c/o Bank of America,
Account No. 14936-04546,
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Routing No. 121 000 358. All payments made by Astra to Salix under this
Termination Agreement shall be made free and clear of, and shall not be reduced
or offset by any non-US. withholding taxes, which shall be the sole
responsibility of Astra. Astra shall make all such required payments and, upon
request, shall provide Salix with a certificate evidencing payment of any such
withholding tax. The payments set forth in this Section 3 shall be in full
satisfaction of all payment and other obligations of Astra to Salix, and of
Salix to Astra, relating to or arising out of, under, or in connection with the
Agreements, or their termination (except to the extent that such other
obligations specifically survive pursuant to this Termination Agreement).
4. Right to Compete. Subject to the terms of this Termination Agreement
and the Co-Participation Agreement with respect to the use of confidential
information, the parties hereby acknowledge and agree that nothing contained in
this Termination Agreement or the Agreements shall limit or prevent or hinder in
any manner the ability of either party to compete with the other party in the
United States or to pursue any and all activities in connection with the
development and/or commercialization of one or more products that may compete
with Balsalazide or the Product in the United States.
5. Mutual Release of Claims. Each party hereby releases the other
party, its predecessors, successors, assigns, and its present and former
officers, directors, partners, shareholders, employees, agents, parent
companies, affiliates and subsidiaries from any and all past, present and future
claims, demands, obligations, liabilities and causes of action of any kind or
nature, whether known or unknown, accrued or unaccrued (collectively, "CLAIMS")
whatsoever relating to or arising under, out of, or in connection with the
Agreements or their termination; provided, however, that neither party hereby
releases the other from any Claims arising under this Termination Agreement.
6. Covenant Not to Sue. Each party to this Termination Agreement
covenants and agrees not to commence, aid, prosecute or cause to be commenced or
prosecuted any action or other proceeding, based upon any claims, demands,
obligations, or causes of action relating to, arising under, out of, or in
connection with the matters subject to mutual release as set forth in Section 5,
and each party further covenants and agrees to hold harmless and indemnify the
other party in respect of all losses, claims, damages, liabilities, fees,
penalties or related costs or expenses (including, but not limited to, court
costs and attorneys' fees), suffered, sustained, incurred, or required to be
paid by such other party from or in connection with any such action or
proceeding.
7. Compromise Agreement. This Termination Agreement is, in part, a
compromise and settlement of claims and is not intended to be, nor shall be
construed as, any admission of liability or wrongdoing by any party hereto or
any other person or entity.
8. Authorization. Each party represents and warrants to the other that
(i) it has the full right and authority to enter into this Termination Agreement
and perform its obligations hereunder; (ii) it has not assigned, conveyed or
otherwise transferred any or all of such party's rights or obligations under the
Agreements; (iii) it is not under any
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obligation to any entity or person, contractual or otherwise, that is in
conflict with the terms hereof; and (iv) this Termination Agreement has been
duly authorized by all necessary corporate action of such party and is a legal,
valid and binding obligation of such party, enforceable against it in accordance
with the terms hereof.
9. Press Release; Disclosure. Promptly following the execution hereof,
Salix shall issue to major newswires a press release substantially in the form
of Exhibit A attached hereto, announcing the termination of the Agreements. No
other public disclosure about the content or termination of the Agreements shall
be made by either party without the prior written approval of the other party,
which approval shall not be unreasonably withheld or delayed; provided that
nothing herein contained shall preclude a party from disclosing information:
(a) which is contained in Exhibit A,
(b) which the parties agree in writing may be disclosed,
(c) which is in the public domain otherwise than as the result of
any breach of obligation of confidentiality by such party,
(d) which is required to be disclosed by law or by any regulatory
body or recognised stock-exchange, or
(e) which Salix wishes to disclose to any licensor, investor or
potential investor in Salix or any affiliate of Salix where
such third party shall have accepted obligations of
confidentiality in respect of the information disclosed.
Notwithstanding the foregoing, each party may publicly disclose without the
prior written approval of the other party that the Agreements were terminated
because Astra elected not to make available additional funds to complete the
Project.
10. Transfers. Astra shall in connection with this Termination
Agreement and in the future execute any agreements or instruments of assignment
or transfer reasonably requested by Salix relating to the transfer to Salix of
property developed by or on behalf of Astra, or its affiliates or assigns, which
is or was transferable to Salix under the terms of the Agreements or this
Termination Agreement.
11. Successors and Assigns. The provisions of this Termination
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
12. Entire Agreement. This Termination Agreement embodies the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements with respect thereto.
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13. Governing Law. This Termination Agreement shall be governed by and
construed in accordance with the laws of the State of New York, excluding any
choice of law rules which may direct the application of the law of any other
jurisdiction.
14. Counterparts. This Termination Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
15. No Waiver. Failure to insist on compliance with any term, covenant
or condition contained in this Termination Agreement shall not be deemed a
waiver of that term, covenant or condition, nor shall any waiver or
relinquishment of any right or power contained in this Termination Agreement at
any one time or more times be deemed a waiver or relinquishment of any right or
power at any other time or times.
16. Amendment. This Termination Agreement may not be modified or
terminated orally and no modification, termination or waiver shall be valid
unless in writing and signed by all of the parties hereto.
17. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing in English and sufficient if delivered
personally, sent by telecopier (and promptly confirmed by personal delivery,
registered or certified mail or overnight courier), sent by nationally
recognized overnight courier or sent by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to Salix, to: Salix Pharmaceuticals, Inc.
7808 Hardwick Drive
Raleigh, NC 27615
Telecopier No.: 919-676-6859
ATTN: President
With a copy to: Salix Pharmaceuticals, Inc.
3600 West Bayshore, #205
Palo Alto, CA 94303
Telecopier No.: 650-856-1555
ATTN: Randy W. Hamilton
If to Astra, to: c/o AstraZeneca LP
725 Chesterbrook Blvd.
Wayne, PA 19087-5677
Telecopier No.: 610-644-0418
ATTN: Russell L. Gantt
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With a copy to: c/o AstraZeneca LP
1800 Concord Pike
P.O. Box 15438
Wilmington, DE 19850
Telecopier No.: 302-886-1578
ATTN: General Counsel
or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered if personally
delivered or sent by telecopier on a business day, on the business day after
dispatch if sent by nationally-recognized overnight courier and on the third
business day following the date of mailing if sent by mail.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Termination Agreement as of the date first set forth above.
ASTRA AB SALIX PHARMACEUTICALS, INC.
(publ)
By: _____________________________ By: _____________________________
Name: __________________________ Name: __________________________
Title: ___________________________ Title: ___________________________
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FOR IMMEDIATE RELEASE CONTACT: Robert P. Ruscher
650-849-5900
SALIX PHARMACEUTICALS, LTD. ANNOUNCES RETURN OF COLAZIDE(R)
MARKETING AND DISTRIBUTION RIGHTS FROM ASTRAZENECA
PALO ALTO, CA, DECEMBER 22, 1999 - Salix Pharmaceuticals, Ltd. (TSE: SLX ) today
announced the return to Salix of the marketing and distribution rights for
Colazide(R) (balsalazide disodium) previously held by AstraZeneca. Under prior
agreements, AstraZeneca had held marketing and distribution rights to the
product worldwide, excluding Italy, Spain, Portugal, Greece, Japan, Korea and
Taiwan.
AstraZeneca will continue to distribute the product in the United Kingdom,
Sweden and Denmark for an interim period while Salix pursues alternatives for
marketing and distribution in these countries. AstraZeneca will return to Salix
all rights, intellectual property and information relating to Colazide, and
future milestone payments from AstraZeneca will be terminated. AstraZeneca has
agreed to make a US$1 million payment to Salix, representing previously earned
research and development funding, and to make a loan to Salix of up to
US$500,000 under certain conditions.
"AstraZeneca has been a good partner throughout our relationship. Nevertheless,
we believe termination of the Colazide distribution arrangement presents an
unexpected opportunity for Salix," stated Robert Ruscher, President and Chief
Executive Officer of Salix. "We have regained the rights to Colazide throughout
most of the world, which opens new partnering possibilities for Salix."
As of December 15, 1999, Salix had cash, cash equivalents and short term
investments of approximately US$1,588,000. Salix believes that its cash
reserves, together with projected funds from product sales and corporate
partners, should be sufficient to satisfy the cash requirements of Salix's
operations through at least June 2000.
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Salix Pharmaceuticals, Ltd. develops and markets prescription pharmaceutical
products for the treatment of gastrointestinal diseases. Salix's strategy is to
in-license proprietary therapeutic drugs with an existing database of positive,
late-stage clinical data in humans, complete the development and market these
products. Salix's lead product is Colazide, a treatment for ulcerative colitis.
The product was first approved by the United Kingdom Medicines Control Agency in
July 1997 as a treatment for acute ulcerative colitis and has since also been
approved for use in the maintenance of remission of ulcerative colitis. Colazide
has also been approved in Argentina, Austria, Belgium, Czech Republic, Denmark,
Italy, Luxembourg, Norway, Sweden and Switzerland. Salix submitted a New Drug
Application (NDA) to the United States FDA for the use of balsalazide disodium
as a treatment for acute ulcerative colitis and received an approvable letter
from the FDA in June 1998.
Additionally, Salix is in Phase III clinical development of rifaximin, a
broad-spectrum gastrointestinal specific antibiotic, licensed from Alfa
Wassermann, S.p.A., an Italian company. Rifaximin has been marketed in Italy by
Alfa Wassermann for several years and is used for several gastrointestinal
conditions including hepatic encephalopathy, infectious diarrhea and prophylaxis
prior to bowel surgery.
The statements in this press release that are not purely statements of
historical fact are forward-looking statements, and actual results may differ
materially from those anticipated. With respect to Salix, important factors that
could cause results to differ include risks associated with funding of
operations, product development and commercialization activities, and regulatory
decisions. These and other factors are described in more detail in Salix's
reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and
Exchange Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Salix
assumes no obligation to update the information in this release.
- end -
A-2
EXHIBIT 10.23
DATED 22 DECEMBER 1999
GLYCYX PHARMACEUTICALS, LTD (1)
ASTRA AB (2)
----------------------------------------------------------
AGREEMENT
----------------------------------------------------------
The information below marked by [ * ] has been omitted
pursuant to a request for confidential treatment filed with the SEC.
<PAGE>
AGREEMENT dated 22 December 1999
BETWEEN:
(1) GLYCYX PHARMACEUTICALS, LTD a company incorporated under the laws of
Bermuda (company registration number EC17200) and whose registered
office is at Milner House, 18 Parliament Street, Hamilton, HM12,
Bermuda ("GLYCYX"); and
(2) ASTRA AB a company incorporated under the laws of Sweden (company
registration number 556011-7482) and whose principal place of business
is at SE-151 85 Sodertalje, Sweden and which is in the process of
changing its name to AstraZeneca AB ("ASTRA").
WHEREAS:
A. Biorex Laboratories Limited ("BIOREX") has developed a therapeutic
pharmaceutical product for treatment and maintenance of colitis based
upon the compound Balsalazide and by an agreement between Biorex and
Glycyx dated 17 September 1992 (replacing an earlier agreement dated 18
March 1992) Biorex granted to Glycyx the exclusive right and licence to
manufacture, use and sell products incorporating Balsalazide.
B. On 21 September 1992, Glycyx and Astra entered into (i) a Research and
Development Agreement (the "RESEARCH AGREEMENT") under which they
agreed to collaborate in a programme of product development and
creation of a master dossier for submission to regulatory authorities
and (ii) a Distribution Agreement (the "DISTRIBUTION AGREEMENT")
whereby Glycyx granted to Astra the exclusive sales right in respect of
Balsalazide in all countries in the World, excluding Italy, Spain,
Portugal, Greece, USA, Japan, Taiwan and Korea.
C. Glycyx and Astra have agreed (i) to confirm the termination of the
Research Agreement; and (ii) to terminate the Distribution Agreement,
upon the terms set out in this Agreement.
D. Astra has agreed for a limited period of time to continue to distribute
Balsalazide in the territories of United Kingdom, Sweden and Denmark
only, upon the terms and conditions of this Agreement.
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NOW IT IS AGREED as follows:
1. DEFINITIONS
1.1 In this Agreement the following words shall have the following meanings:
"APPLICATIONS" means use for the treatment of and the maintenance
of remission of ulcerative colitis in humans.
"ASSOCIATE" means in relation to each Party any company which is a
holding company or subsidiary of such Party and any other
subsidiary of any such holding company or subsidiary and for this
purpose:
(i) a company shall be deemed to be a "subsidiary" of another if
that other either:
(a) is a member of it and controls the
composition of its board of directors (and
for such purpose the composition of a
company's board of directors is deemed to be
controlled by another company if that other
company by the exercise of some power
exerciseable by it without the consent or
concurrence of any other person can appoint
or remove all or a majority of the
directors); or
(b) holds more than half in nominal value of its
equity share capital; and
(ii) a company is deemed to be another's holding company if the
other is its subsidiary.
"ASTRA CONFIDENTIAL INFORMATION" means any information, data and
know-how of a confidential or proprietary nature, whether oral,
written or in any other form, owned by or within the control of
Astra or any Astra Associate as at the Effective Date or otherwise
during the term of this Agreement relating to the development,
formulation, manufacture, sale or use of Balsalazide or the
Product, including for the
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avoidance of doubt all such information in respect of any Astra
Intellectual Property, Astra Product Information and Astra
Regulatory Data.
"ASTRA INTELLECTUAL PROPERTY" means all know-how, copyright,
patents (or applications therefor) (other than the Astra Patents)
and other intellectual property rights owned by or within the
control of Astra or any Astra Associate as at the Effective Date
or otherwise during the term of this Agreement relating to
Balsalazide, the Product or any formulation of Balsalazide or the
Product or any process for the manufacture or formulation of
Balsalazide or the Product, including any intellectual property
rights owned by or within the control of Astra or any Astra
Associate in Astra Product Information and Astra Regulatory Data
but excluding only any such rights in respect of any Astra
proprietary name or logo.
"ASTRA IP INFORMATION" means Astra Confidential Information
relating exclusively to the Astra Intellectual Property or
contained in the Astra Product Information and Astra Regulatory
Data.
"ASTRA PATENTS" means the patent and applications for patent
listed in Schedule 2.
"ASTRA PRODUCT INFORMATION" means (in written or in any other
form, including electronic format):
(i) correspondence with the Regulatory Authorities relating to
Balsalazide or the Product;
(ii) marketing information used to support the marketing and
distribution of Balsalazide or the Product (including,
without limitation, sales training materials, promotional
materials and customer lists);
(iii) manufacturing know-how relating to the manufacture of
Balsalazide or the Product; and
(iv) information relating exclusively to the prosecution and
maintenance of the Astra Patents,
owned by or within the control of Astra or any Astra Associate as
at the Effective Date or otherwise during the term of this
Agreement.
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"ASTRA REGULATORY DATA" means any documents or data filed or
required to be filed (either written or in any other form,
including electronic format) in connection with the Product
Registrations and any adverse event database in respect of the
Product owned by or within the control of Astra or any Astra
Associate as at the Effective Date or otherwise during the term of
this Agreement.
"ASTRA TERRITORY" means the United Kingdom, Sweden and Denmark.
"BALSALAZIDE" means 5-[4 (2- carboxyethylcarbamoyl) - phenylazo] -
salicylic acid including all salts, primary metabolites, or
isomers thereof.
"BIOREX" means Biorex Laboratories Limited a company incorporated
in England under Company Registration Number 390233 whose
registered office is at 2 Crossfield Chambers, Gladbeck Way,
Enfield, Middlesex EN2 7HT.
"BIOREX AGREEMENT" means the agreement between Biorex and Glycyx
dated 17 September 1992 (replacing an earlier agreement dated 18
March 1992) as amended from time to time in accordance with its
terms.
"BIOREX/ASTRA AGREEMENTS" means two agreements entered into
between Biorex and Astra dated 21 September 1992 and 30 April 1993
respectively as amended from time to time in accordance with their
terms.
"DISTRIBUTION AGREEMENT" means the Distribution Agreement between
Glycyx and Astra AB dated 21 September 1992 as amended from time
to time in accordance with its terms or otherwise varied by
agreement in writing between the Parties.
"EFFECTIVE DATE" means 22 December 1999.
"FORCE MAJEURE" means in relation to either Party any
circumstances beyond the reasonable control of that Party,
including strike, lock out or other form of industrial action, act
of God, war, riot, accident, breakdown in plant or machinery,
fire, flood, explosion or government action.
"GLYCYX CONFIDENTIAL INFORMATION" means any information, data and
know-how of
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a confidential or proprietary nature, whether oral, written or in
any other form, disclosed by or on behalf of Glycyx (or any Glycyx
Associate) to Astra (or any Astra Associate) under or in
connection with the Research Agreement, the Distribution Agreement
or this Agreement or otherwise, relating to the development,
formulation, manufacture, sale or use of Balsalazide or the
Product and, with effect from the Effective Date, all information,
data and know-how of a confidential or proprietary nature relating
to the Astra Patents insofar as it relates exclusively to
Balsalazide.
"GLYCYX INTELLECTUAL PROPERTY" means all know-how, copyright and
other intellectual property rights owned by or licensed to Glycyx
relating to the Product (excluding only the Patents and Trade
Mark).
"GLYCYX TERRITORY" means all the countries in the world excluding
Italy, Spain, Portugal, Greece, United States of America, Japan,
Taiwan and Korea and excluding the Astra Territory.
"NET RECEIPTS" means
(A) all capital sums, royalties, fees, commissions or
other consideration in money or money's worth received
by Glycyx or any Glycyx Associate from a Third Party
Licensee in respect of rights granted by Glycyx or
such Associate to such Third Party Licensee in or to
products containing Balsalazide excluding (for the
avoidance of doubt) sums paid in respect of
prospective bona fide research and development costs
and sales receipts for products sold to Third Party
Licensees; and
(B) net profit made by Glycyx or any Glycyx Associate
on the sale of products containing Balsalazide to such
Third Party Licensee provided that "NET PROFIT" shall
be calculated as the aggregate gross invoice price of
product sold to such Third Party Licensee on arm's
length terms after deducting the following items to
the extent they are actually paid or allowed:
(i) Sales or value added or other direct taxes
actually incurred and paid in connection with the sale
or delivery of product to such
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Third Party Licensee;
(ii) Normal discounts actually granted;
(iii) Credit actually allowed for product returned or
not accepted by such Third Party Licensee;
(iv) Rebates, chargebacks and other post-sale
performance-related rebates and retroactive price
reductions; LESS
(v) all costs incurred by Glycyx in the manufacture
and supply of the product to such Third Party
Licensee; and
(vi) all sums payable by Glycyx to Biorex in respect
of such product under the Biorex Agreement.
Provided that:
(vii) for the avoidance of doubt "net profit" shall
not include any sums received by Glycyx under
subclause (A) above; and
(viii) where product is sold on other than arm's
length basis and the gross invoice price is less than
would be achieved on normal trade terms then the gross
invoice price for the purpose of this Clause shall be
deemed to be the price that would have been achieved
had the product been sold on an arm's length basis.
Product supplied and used in clinical trials or for
other research and development purposes or for
commercial sampling shall be ignored for the purpose
of calculating Net Receipts; and
(ix) for the purpose of calculating the Net Receipts
on bundled products, deductions shall be apportioned
across all products in the bundle on a fair and
reasonable basis Provided that the percentage rebate
or discount apportioned to the product
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containing Balsalazide shall not exceed the percentage
rebate or discount applied in total to the bundled
products. Similarly the total price payable for a
bundled product shall be apportioned between product
containing Balsalazide and other product within the
bundle on a fair and reasonable basis; and
(x) in the event that Glycyx or its Associate sells
product containing Balsalazide to a Third Party
Licensee who also purchases other products or services
from Glycyx or its Associates and if Glycyx or its
Associate discounts the purchase price of the product
containing Balsalazide to a greater degree than Glycyx
or its Associate, respectively, generally discounts
the price of its other products or services to such
customer then in such case the Net Receipts for the
sale of product containing Balsalazide to such Third
Party Licensee shall be calculated by applying the
weighted average discount granted by Glycyx or its
Associate to such customer. For the purposes of this
provision "discounting" includes establishing the list
price at a lower than normal level.
"NET SALES PRICE" means the gross invoice price of each Product
sold to an independent third party on arm's length terms by Astra
or any Astra Associate after deducting the following items to the
extent they are actually paid or allowed:
(i) Sales or value added or other direct taxes
actually incurred and paid in connection with the sale
or delivery of Product to such third parties;
(ii) Normal discounts actually granted;
(iii) Credit actually allowed for Product returned or
not accepted by customers;
(iv) Rebates, chargebacks and other post-sale
performance-related rebates and retroactive price
reductions.
Provided that:
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(v) where Product is sold on other than arm's length
basis and the gross invoice price is less than would
be achieved on normal trade terms then the gross
invoice price for the purpose of this Clause shall be
deemed to be the price that would have been achieved
had the Product been sold on an arm's length basis.
Product supplied and used in clinical trials or for
other research and development purposes or for
commercial sampling shall be ignored for the purpose
of calculating Net Sales Price; and
(vi) for the purpose of calculating the Net Sales
Price on bundled products, deductions shall be
apportioned across all products in the bundle on a
fair and reasonable basis Provided that the percentage
rebate or discount apportioned to the Product shall
not exceed the percentage rebate or discount applied
in total to the bundled products. Similarly the total
price payable for a bundled product shall be
apportioned between Product and other product within
the bundle on a fair and reasonable basis; and
(vii) in the event that Astra or its Associate sells
Product to a third party who also purchases other
products or services from Astra or its Associates and
if Astra or its Associate discounts the purchase price
of the Product to a greater degree than Astra or its
Associate, respectively, generally discounts the price
of its other products or services to such customer
then in such case the Net Sales Price for the sale of
Product to such third party shall be calculated by
applying the weighted average discount granted by
Astra or its Associate to such customer. For the
purposes of this provision "discounting" includes
establishing the list price at a lower than normal
level.
"PATENTS" means the patents and applications for patents relating
to Balsalazide listed in Schedule 1, all patent applications which
may hereafter be filed by or on behalf of the owners of such
patents or patent applications or by Glycyx or its Associates and
which either are based on or claim priority from any of the said
patents or patent applications and all patents which may be
granted pursuant to any of such patent applications and any
Supplemental Protection Certificate(s) relating to Balsalazide and
any such patents or patent applications.
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"PRODUCT" means a pharmaceutical preparation in capsule form
containing Balsalazide for the Applications.
"PRODUCT REGISTRATIONS" means all product licenses or approvals,
marketing approvals and pricing or reimbursement approvals granted
to Astra or any Astra Associate by any Regulatory Authority or any
applications (whether prepared, but not submitted, pending or
withdrawn or rejected) for any of the same in respect of the
Product.
"REGULATORY AUTHORITY" means any body responsible for the grant of
product licences or approvals, marketing approvals or pricing or
reimbursement approvals or for determination of Good Manufacturing
Practice within Europe.
"RESEARCH AGREEMENT" means the Research and Development Agreement
between Glycyx and Astra dated 21 September 1992 as amended from
time to time in accordance with its terms or otherwise varied by
agreement in writing between the Parties.
"SALIX" means Salix Pharmaceuticals, Inc a company incorporated
under the laws of California, whose registered office is at 3600
W. Bayshore Road, Suite 205, Palo Alto, California 94303 USA, a
Glycyx Associate.
"THIRD PARTY LICENSEE" means a third party (whether or not a
licensee) granted rights by Glycyx or any Glycyx Associate to
distribute, market and/or sell any product containing Balsalazide
in any part of the Glycyx Territory and/or the Astra Territory.
"TRADE MARK" means each and all of:
(i) the trade mark "Colazide" registered as a trade
mark for use on pharmaceutical preparations in the
United Kingdom;
(ii) the trade mark "Colazid" registered as a trade
mark for use on pharmaceutical preparations in Sweden;
and
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(iii) the trade mark "Colazid" and "Premid" each
registered as a trade mark for use on pharmaceutical
preparations in Denmark.
1.2 In this Agreement, where appropriate, words denoting the masculine
gender shall include the feminine and neuter genders and vice
versa; words denoting a singular number shall include the plural
and vice versa; references to the definite article shall include
the indefinite article and vice versa; references to persons shall
include firms, companies and other organisations and vice versa;
and words such as "include" or "including" are to be construed
without limiting the generality of the preceding words.
1.3 In this Agreement, references to the Parties shall mean Glycyx and
Astra.
1.4 In this Agreement, references to requirements of law shall include
the requirement of any applicable court or arbitral order or any
applicable and relevant regulatory body.
1.5 The headings in this Agreement are for convenience only and shall
not affect its interpretation.
2. TERMINATION OF RESEARCH AGREEMENT AND DISTRIBUTION AGREEMENT
2.1 Upon the Effective Date each of the Research Agreement and the
Distribution Agreement and all (if any) other agreements between
the Parties and/or their Associates relating to Balsalazide and/or
products containing Balsalazide throughout the world excluding
only the USA, shall terminate, and, save only in respect of any
claim under the provisions of Clause 9 or 16 of the Distribution
Agreement in respect of Product delivered prior to the Effective
Date or in respect of any claim concerning a breach of the
provisions of Clause 17 of the Distribution Agreement occurring
prior to the Effective Date ("a Product Claim"):
2.1.1 each Party hereby releases the other Party, its
predecessors, successors, assigns and its present and former
officers, directors, partners, shareholders, employees,
agents, parent companies and Associates from any and all
past, present and future claims, demands, obligations,
liabilities and causes of action of any kind or nature,
whether known or unknown, accrued or unaccrued
(collectively, "Claims") whatsoever relating to or
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arising under, out of, or in connection with such agreements
or the termination of such agreements Provided Always that
neither Party hereby releases the other from any Claims
arising under the terms of this Agreement or from any
Product Claim; and
2.1.2 each Party to this Agreement covenants and agrees not to
commence, aid, prosecute or cause to be commenced or
prosecuted any action or other proceeding based upon any
claims, demands, obligations, or causes of action relating
to, arising under, out of, or in connection with the matters
subject to mutual release as set out in Clause 2.1.1; and
2.1.3 the provisions of this Clause 2 and other provisions of this
Agreement are in part a compromise and settlement of claims
and are not intended to be, nor shall be construed as, any
admission of liability or wrongdoing by any Party hereto or
any other person or entity.
2.2 Termination of the Distribution Agreement shall not terminate the
continuing obligations of Astra to Glycyx:-
2.2.1 to make payment in respect of deliveries of Product effected
prior to the Effective Date; and
2.2.2 to account in accordance with the provisions of Clause 14.4
of the Distribution Agreement for the Trade Mark license fee
in respect of all Product bearing the Trade Mark supplied by
Glycyx to Astra (or any Astra Associate) prior to the
Effective Date (whether supplied by Astra or any Astra
Associate to any third party either before or after the
Effective Date).
2.3
2.3.1 It is acknowledged that Glycyx is currently seeking a
marketing partner to assume development, distribution,
marketing and sale of the Product in the Glycyx Territory
and, subject always to the terms of this Agreement, in the
Astra Territory. Astra undertakes to provide Glycyx with
reasonable and timely access to relevant employees of Astra
and any Astra
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Associate who are familiar with Balsalazide and the Product
or otherwise have material information in connection with
(a) the development, formulation, manufacturing,
distribution, marketing and sale of
Balsalazide or Product; or
(b) the Product Registrations
to assist in a smooth transfer of development, distribution,
marketing and sales rights to Glycyx or any such new marketing
partner of Glycyx, in respect of the Glycyx Territory and the
Astra Territory and to assist in a smooth transfer of all Product
Registrations and in connection with matters arising in respect of
such Product Registrations prior to the date of transfer, such
access to be free of charge except that Glycyx shall bear any
travel, hotel or other out of pocket expenses reasonably and
solely incurred by Astra in providing such assistance.
2.3.2 The Parties shall establish a Joint Committee to liaise
regularly and to coordinate the access to and assistance of
Astra under Clause 2.3.1 and in respect of the matters
specified in Clause 4. Such Committee shall meet in Sweden
or London, unless otherwise agreed, and shall liaise
regularly by telephone and other communication. It is
proposed that the initial members of the Joint Committee
shall be:
Astra: David Price, Gunilla Nygard, Paul Brennan
Glycyx: John Brough, Lorin Johnson, Randy Hamilton.
Each Party shall use reasonable endeavours to maintain effective
membership of the committee and, if a person shall cease to be a
member of the committee, shall replace him with a suitably
qualified replacement.
2.4 Astra hereby warrants and undertakes that:
2.4.1 the Product has been launched under the terms of the Distribution
Agreement only in the Astra Territory and only under the Trade
Marks and has not prior to
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the Effective Date been sold or supplied by Astra or any Astra
Associate otherwise than for the purposes of clinical development
outside the Astra Territory; and
2.4.2 Astra (or any Astra Associate) has applied for and obtained
only such Product Registrations as are specified on the full
and complete list to be provided by Astra to Glycyx within
10 days of the Effective Date.
2.5 Astra undertakes to deliver to Glycyx as at the Effective Date
duly executed for and on behalf of Astra a letter addressed to
Biorex in the agreed form in connection with the Biorex/Astra
Agreements and Glycyx undertakes to deliver to Astra as at the
Effective Date a copy of such letter in the agreed form
countersigned by Biorex confirming its unconditional acceptance of
the terms of such letter with effect from the Effective Date.
3. GRANT OF RIGHTS
3.1 With effect from the Effective Date and in accordance with the
terms and conditions contained in this Agreement, Glycyx hereby
appoints Astra as its distributor for the Product within and
throughout the Astra Territory only.
3.2 The rights granted hereunder to Astra shall be in respect of the
Product only and Astra shall have no rights in respect of any
indications or applications for Balsalazide other than the
Applications.
4. ASTRA INTELLECTUAL PROPERTY AND ASTRA REGULATORY DATA
4.1 Astra undertakes within 60 (sixty) days of the Effective Date to
deliver free of charge to Glycyx (or as it may direct) copies of
all Astra Product Information and Astra Regulatory Data Provided
that Astra shall be entitled to make deletions from such copies of
information subject to applicable confidentiality privileges or
required for the protection of proprietary information of Astra
not related to the development, formulation, manufacture,
commercialisation, sale or use of Balsalazide or the Product.
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4.2 Astra hereby undertakes to assign to Glycyx free of any charge or
payment and free of any third party right, claim or license in
respect of all or any part thereof all its rights in and to the
Product Registrations relating to any part of the world excluding
only the USA and the Astra Territory. Astra undertakes to provide
to Glycyx free of charge such assistance as may be reasonably
required in connection with the transfer of such Product
Registrations. In the case of non-European Union countries the
Parties shall seek to effect such transfers as soon as practicable
and not later than 31 March 2000. In the case of European Union
countries, the transfers shall be effected not later than the last
date of transfer of the Product Registrations in the Astra
Territory. In the case of any country where the Product
Registration is pending, prior to the transfer being effected it
shall be the responsibility of Glycyx to prepare and compile all
data required for responses to the Regulatory Authority and Astra
shall file such responses with the Regulatory Authority.
4.3 In respect of Astra Intellectual Property which relates
exclusively to Balsalazide or the Product, forthwith on the
Effective Date Astra hereby assigns to Glycyx free of any charge
or payment, and free of any third party right, claim or license in
respect of all or any part thereof, all its right, title and
interest therein and Glycyx on the Effective Date hereby grants to
Astra a non-exclusive royalty-free perpetual licence to use the
same (with the right to sub-license) Provided that Astra shall not
prior to 30 September 2012 use the same or grant to any other
person any right to use the same in any manner in connection with
Balsalazide or the Product except in the exercise of its rights
and performance of its obligations under this Agreement.
4.4 In respect of Astra Intellectual Property which does not relate
exclusively to Balsalazide or the Product, forthwith on the
Effective Date Astra hereby grants to Glycyx a royalty-free
perpetual license to use the same in the development, manufacture,
formulation, use or exploitation of Balsalazide and/or the Product
only (with the right to sub-license) and Astra undertakes that it
will not prior to 30 September 2012 use the same or grant to any
other person any right to use the same in the development,
manufacture , formulation, use or exploitation of Balsalazide
and/or the Product except in the exercise of its rights and
performance of its obligations under this Agreement.
4.5 Astra hereby undertakes to Glycyx with effect from the Effective
Date that it will not prior to 30 September 2012 use or grant to
any other person any right to use the Astra IP
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Information in any manner in connection with Balsalazide or the
Product except in the exercise of its rights and performance of
its obligations under this Agreement.
4.6 Each Party undertakes to execute such further documents in
connection with such assignment or licensing of the Astra
Intellectual Property or the transfer of the Product Registrations
under Clause 4.2 as may reasonably be required from time to time
by the other Party.
4.7 Forthwith on the Effective Date, Astra hereby assigns to Glycyx
the Astra Patents free of any third party license. Astra
undertakes to execute such further documents as Glycyx shall
reasonably require for the purpose of assigning the Astra Patents
to Glycyx or its designee, all external costs relating to the
assignment of the Astra Patents and registration of Glycyx or its
designee as the proprietor thereof being borne by Glycyx. It is
agreed that Glycyx shall have no obligation to take any assignment
of any Astra Patent and that from the Effective Date neither Party
shall have any obligation to maintain the Astra Patents in force
Provided that forthwith on the Effective Date Astra shall notify
Glycyx in writing of any time deadlines in respect of the
prosecution or maintenance of the Astra Patents which will occur
on or prior to 29 February 2000 and shall at Glycyx's written
request pay any renewal fees or other sums which shall be payable
to the patent registration authorities in relation to such
deadlines, and such sums shall be repayable by Glycyx to Astra
within 14 days of written demand. For so long as the Astra Patents
remain in force Glycyx hereby grants to Astra a non-exclusive
royalty-free license under the Astra Patents (with the right to
sub-license) to manufacture, sell and use any products other than
products containing Balsalazide.
4.8 Astra warrants as at the Effective Date that so far as its Patent
Department is aware:
4.8.1 such Patent Department has not received any written notice
alleging that the Astra Patents infringe any rights of any
third party;
4.8.2 such Patent Department has not received any written
notification indicating that any Astra Patent application
has been rejected; and
4.8.3 all actions and payments required prior to the Effective
Date in connection with the
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prosecution, maintenance or renewal of the Astra Patents
have been taken or made in accordance with the requirements
of any relevant authority.
Save only as expressly provided in Clauses 4.7 and 4.8, Astra
gives no warranty or representation as to the validity or value of
the Astra Patents or Astra Intellectual Property.
4.9 Subject to the other provisions of this Agreement, including
without limitation Clauses 4.2, 4.3, 4.4, 4.5 and Clause 14 the
Parties hereby acknowledge and agree that nothing contained in
this Agreement or in any agreements terminated under Clause 2.1
shall limit or prevent or hinder in any manner the ability of
either Party to compete with the other Party in the Astra
Territory and the Glycyx Territory or to pursue any and all
activities in connection with the development and/or
commercialisation of one or more products that may compete with
Balsalazide or the Products.
5. PRODUCT DATABASE AND ADVERSE REACTIONS REPORTING
5.1 Glycyx shall maintain or cause to be maintained a database of all
adverse and other reactions or events in connection with the
Product occurring in any part of the Glycyx Territory and shall
use reasonable commercial endeavours to procure that any such
adverse and other reactions are notified to it in a timely manner
by any sub-licensee and/or distributor of the Product.
5.2 Astra shall maintain a database of all adverse and other reactions
or events in connection with the Product occurring within the
Astra Territory and shall use all reasonable commercial endeavours
to procure that any such adverse and other reactions are notified
to it in a timely manner by its sub-licensees and/or distributors
of the Product in the Astra Territory.
5.3 Astra undertakes to notify Glycyx:
5.3.1 forthwith (or in any event in sufficient time to allow
Glycyx to report such information in compliance with
applicable law) in the event that it becomes aware of any
serious or previously unknown adverse reaction
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or contra indications to the Product; and
5.3.2 on a quarterly basis (within three months of the end of each
quarter) (or in any event in sufficient time to allow Glycyx
to report such information in compliance with applicable
law) of other adverse reactions or contra indications to the
Product.
5.4 Glycyx undertakes to notify Astra:
5.4.1 forthwith (or in any event in sufficient time to allow Astra
to report such information in compliance with applicable
law) in the event that it becomes aware of any serious or
previously unknown adverse reaction or contra indications to
the Product; and
5.4.2 on a quarterly basis (within three months of the end of each
quarter) (or in the event in sufficient time to allow Astra
to report such information in compliance with applicable
law) of other adverse reactions or contra indications to the
Product.
5.5 In the event that Glycyx or any third party shall conduct clinical
studies in support of any promotional or marketing activities of
Glycyx or such third party in respect of the Product within the
Astra Territory or the Glycyx Territory, Glycyx shall use
reasonable endeavours to grant or procure the grant to Astra of
full unrestricted access to the results of such trials so that
Astra shall be entitled to use such results in connection with the
marketing, sale and use of the Product in the Astra Territory
only.
6. ASTRA'S UNDERTAKINGS
6.1 Astra shall use reasonable commercial endeavours to distribute the
Product in the Astra Territory. Astra shall not disparage
Balsalazide or the Product to any material extent and shall use
all reasonable endeavours to procure that no Astra Associate and
no employee of Astra or any Astra Associate shall disparage
Balsalazide or the Product to any material extent, but Astra shall
have no obligation to promote or market the Product in the Astra
Territory.
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6.2 Astra shall distribute the Product in the Astra Territory entirely
in accordance with the terms of any product license, price
approval (where applicable), and other restrictions and
regulations for the Product as may be relevant and applicable in
each country within the Astra Territory.
6.3 Astra further undertakes:
6.3.1 to distribute the Product in each part of the Astra
Territory under the relevant Trade Mark only and not to use
any other trade name, trade mark or logo for or on the
Product, provided that the name "Balsalazide" may be used
but only as a generic name for the Product in accordance
with and as required by applicable laws and regulations;
6.3.2 to enter into Trade Mark user agreements and such other
agreements (whether relating to the Trade Mark, Technical
Standards or otherwise) as may reasonably be required by
Glycyx or is required by applicable regulations in any part
of the Astra Territory in connection with the exploitation
by Astra of the Product and/or the use by Astra of the Trade
Mark;
6.3.3 to notify Glycyx immediately of any improper or wrongful use
of the Trade Mark, the Patents, Glycyx Intellectual Property
or Glycyx Confidential Information coming to Astra's
knowledge;
6.3.4 forthwith to refer to Glycyx all enquiries for the supply of
the Product received from potential distributors or
sub-licensees of Product whether within or outside the Astra
Territory;
6.3.5 not actively to seek customers for the Product outside the
Astra Territory;
6.3.6 not to use any misleading statements or misrepresentations
on the Product packaging or use any defective packaging
materials and to comply in all respects with all local
regulations and laws in connection with the Product
packaging and the information provided thereon;
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6.3.7 in its sale and use of the Product in each part of the
Astra Territory to comply with all relevant regulatory
health and pricing regulations and approvals in such part
of the Astra Territory. For the avoidance of doubt Glycyx
shall not be responsible or liable in any manner whatsoever
for Astra's compliance with any such regulations and
approvals (whether or not it shall have assisted Astra in
or approved the sale or use of the Product by Astra in such
part of the Astra Territory);
6.3.8 not to use any packaging which may adversely affect the
Product in any way, including the Product's approved
shelf-life;
6.3.9 not to incur any liability on behalf of Glycyx or in any
manner, pledge or purport to pledge Glycyx's credit or
accept any order or make any contract binding on Glycyx or
give or make any representation or warranty with reference
to the Product on behalf of Glycyx and in all
correspondence and dealings with third parties shall
clearly indicate that it is acting as principal;
6.3.10 to be solely responsible for the acts and omissions of its
employees and representatives in connection with the
performance of its rights and obligations hereunder; and
6.3.11 promptly upon request provide at the expense of Glycyx such
assistance as Glycyx may reasonably require in connection
with obtaining any extension, renewal or Supplementary
Protection Certificate of or in respect of any Patent in
the Astra Territory.
6.4 Astra shall be solely responsible for effecting (at its sole cost
and expense) such amendments and translations to any Astra
Regulatory Data as may be required to procure that such Astra
Regulatory Data complies with and satisfies the requirements of
any Regulatory Authority within any particular part of the Astra
Territory Provided that Astra shall not be obliged to conduct any
further test or development work required in connection therewith.
In the event that Astra becomes aware that any such further test
or development work is required by any such Regulatory Authority,
Astra
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undertakes promptly to notify Glycyx. Glycyx shall not be
obliged to incur any cost or conduct any further test or
development work or otherwise amend or translate any such Astra
Regulatory Data but shall be entitled at its own cost to conduct
any such test or development work if it wishes to do so. Whilst
Astra shall remain the owner of the Product Registrations, it
shall file with the Regulatory Authority data derived from such
test or development work provided to it by Glycyx for filing.
6.5 Astra shall be responsible for the collection of debts due to it
and shall bear all losses owing to its failure so to do.
7. SUPPLY OF PRODUCT
7.1 Astra shall notify Glycyx in writing of its forecast monthly
requirements for quantities of the Product during the period of 12
months following the date of such forecast. Such forecasts shall
be delivered as at the Effective Date and subsequently on January
1st, April 1st, July 1st and October 1st in each year. Any
subsequent forecast shall contain revised forecasts for the
subsequent 12 month period. Such forecasts shall be prepared in
good faith but shall be non-binding and shall not be construed as
constituting any representation by Astra that it will not exercise
its right to terminate this Agreement during any such 12 month
period.
7.2 Glycyx shall use all reasonable endeavours to fulfil on a timely
basis all written orders placed on it by Astra for the Product in
accordance with the previous forecast delivered, including the
outstanding orders details of which including current estimated
delivery dates are listed in Schedule 4 ("Outstanding Orders").
7.3 Subject to Clause 7.2, Astra undertakes to take delivery and
effect payment in accordance with the terms of this Agreement of
all Product specified in the Outstanding Orders.
7.4 Glycyx hereby warrants and undertakes that all quantities of the
Product supplied to Astra after the Effective Date shall as at the
date of delivery be supplied fully in accordance with the Bulk
Product Specification and the Finished Product Specification
contained in Schedule 3 and shall have been manufactured in
accordance with the European Community Good Manufacturing Practice
and the Drug Master File for the Product.
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7.5 Upon receipt of any delivery of the Product from Glycyx, Astra
shall test such Product (in accordance with the Quality Test
Procedures agreed and incorporated as Schedule 3 to this
Agreement) and in the event that such Quality Test Procedures
reveal any breach of the warranty given in Clause 7.4, Astra shall
be entitled to reject the full shipment of the Product within 45
days of receipt of such shipment, by notice in writing to Glycyx.
7.6 In the event of any dispute between the Parties concerning any
allegation of breach of the warranty contained in Clause 7.4 or
concerning any rejection or purported rejection of any shipment of
the Product, a sample quantity of the Product in question shall
(at the joint cost and expense of the Parties) be delivered to an
independent laboratory (nominated by the agreement of the Parties
or in the absence of agreement on the application of either Party
by the President by the time being of the Royal Pharmaceutical
Society of Great Britain) which shall be supplied with copies of
the Bulk Product Specification, the Finished Product Specification
and the Drug Master File and shall carry out testing in accordance
with the Quality Test Procedures and whose decision as to the
quality of such Product and as to any breach of warranty by such
Product, shall in the absence of manifest error be final and
binding on the Parties.
7.7 The terms and conditions relating to the supply of the Product by
Glycyx to Astra after the Effective Date (including for the
avoidance of doubt all Product specified in the Outstanding
Orders) shall be as set out in this Agreement and each written
order placed on Glycyx by Astra shall form a separate contract for
the supply of the Product.
7.8 Astra will not take any action to transfer or change any part or
aspect of any product license(s) and/or marketing authorisation(s)
for the Product (including, without limitation, any aspect of any
Drug Master File, manufacturing method or specification), nor to
allow piggyback or similar licenses with respect thereto, to the
extent such actions reasonably affect the ability of Glycyx to
manufacture and supply the Product to Astra, without the prior
written consent of Glycyx (such consent not to be unreasonably
withheld).
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7.9 So long as Astra remains owner of the Product Registrations it
shall file with the Regulatory Authorities in the Astra Territory
and other European Union countries such applications for
amendments and variations to the Product Registrations as Glycyx
shall request:
7.9.1 to obtain approval of additional suppliers and bulk
manufacturers of Balsalazide or the Product; or
7.9.2 to reflect changes in the manufacturing process to the
extent Astra is not materially adversely affected by such
changes.
7.10 Astra will use reasonable endeavours to procure that UCB S.A. in
respect of its premises at Chemin de Foriest, B-1420 Braine
L'Alleud, Belgium and Omnichem S.A. in respect of its premises at
Rue du Fonds Jean Paques 8, B-1438 Louvain-la Neuve, Belgium and
at Cooppallaan 91 B-9230 Wetteren Belgium are added on relevant
Product Registrations in the Astra Territory and other European
Union countries. It shall be the responsibility of Glycyx to
prepare and compile all data required for the purpose of such
applications and Astra shall act in accordance with Clause 7.9 in
respect of such request.
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8. PRICE AND PAYMENT
8.1 The price charged for the Product by Glycyx to Astra shall be
established in pounds sterling as follows:
8.1.1 The price for the Product delivered during the period of
seven full calendar months after the Effective Date shall be
[ * ] pence per capsule;
8.1.2 Thereafter the price for the Product delivered during each
succeeding six calendar months shall be equal to [ * ]% of
the weighted average Net Sales Price for the Product in the
Astra Territory during the said six calendar months and it
is agreed that:
(i) if this Agreement shall terminate on a date
other than the final day of any such period
of six calendar months, the last period shall
be reduced accordingly;
The information above marked by [ * ] has been omitted
pursuant to a request for confidential treatment filed with the SEC.
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(ii) the price shall be finally determined within
three months after the end of each such
period of six or fewer calendar months. Prior
to such final determination of the price for
each such period, Astra shall pay on account
the price applicable in respect of the
immediately preceding period; and
(iii) for the conversion of the relevant currencies
into pounds sterling under Clause 8.1.2, the
closing mid point exchange rates for the sale
and purchase of foreign currency as published
in the Financial Times, London edition on the
last banking day of the period in question
shall be applied.
8.2 Payment of the sums due to Glycyx under Clause 8.1 and Clause 11
and any reimbursement due to Astra under Clause 8.1.2 shall be net
cash within 30 days from the date of invoice payable in pounds
sterling. Payment should be made by express payment through the
banking system into such bank account as the payee shall designate
for such purpose.
8.3 If payment is not made as set out in Clause 8.2:
8.3.1 interest will be charged at the rate of 2% (two percent) per
annum above the base rate for the time being of Barclays
Bank Plc on the unpaid balance (such interest to accrue on a
day to day basis from the date of payment as well after as
before any judgment); and
8.3.2 in the event of default by Astra, Glycyx shall be entitled
to require payment in advance for any delivery of the
Product made prior to receipt of such payment in full.
8.4 Astra shall keep full proper and up-to-date books of account and
records showing clearly all transactions relating to the
calculation of the Net Sales Price.
8.5 Astra shall allow an independent accountant appointed by Glycyx
and approved by Astra, such approval not to be unreasonably
withheld or delayed, to inspect the financial records
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of Astra or any Astra Associate in order to verify the Net Sales
Price and the prices payable by Astra for the supply of Product
under this Clause 8. Such verification shall be undertaken at the
sole cost and expense of Glycyx provided that in the event that
any such verification shall reveal an under reporting and/or
accounting in respect of Net Sales Price or the price per Product
payable hereunder in excess of 3% the cost and expense of such
verification shall be borne by Astra.
9. DELIVERY
9.1 Delivery of the Product to Astra by Glycyx shall be Ex Works any
of the approved manufacturing plants designated by Glycyx
(Incoterms 1990) and otherwise as agreed in writing between the
Parties.
9.2 The Product shall be shipped to Astra by such method of transport
as Astra shall nominate and such transport shall be arranged and
paid for by Astra. Glycyx shall not be liable for any loss of or
damage to the Product after delivery and whilst in transit.
9.3 Risk in the Product shall pass to Astra on delivery and Astra
shall be responsible for insuring the Product from the date of
delivery and in transit at its own cost and expense.
10. PRODUCT LIABILITY
10.1 Glycyx hereby agrees to indemnify Astra against any action, claim,
loss and damage suffered by or awarded against Astra in connection
with any claim against Astra from a third party arising from any
breach by Glycyx (or its subcontractors or nominees) of the
warranty and undertaking contained in Clause 7.4 Provided Always
that such indemnity shall not extend to any liability, cost,
expense or damage, suffered or incurred by reason of any defect in
any Product which was detected or should have been detected by
Astra by means of the Quality Test Procedures applied (or which
should have been applied) by Astra within 45 days of the date of
delivery of the Product under the provisions of Clause 9.1.
10.2 Astra undertakes to indemnify and hold Glycyx harmless against all
and any loss, damage, claim or liability suffered or incurred by
Glycyx in respect of Product distributed or sold by Astra on or
after the Effective Date, save only where Glycyx is liable under
Clause 10.1.
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11. CONSIDERATION
11.1 In consideration of the agreed termination of the Distribution
Agreement Astra agrees to pay to Glycyx a fee of [ * ] pence per
capsule in respect of all deliveries of Product to Astra effected
by Glycyx after the Effective Date during the period of seven
calendar months after the Effective Date.
12. LOAN
12.1 Glycyx shall use reasonable commercial efforts to enter into an
agreement with a Third Party Licensee under which Net Receipts of
not less than US $500,000 (five hundred thousand US dollars) are
paid to Glycyx by the Third Party Licensee on or before 1 April
2000. If Glycyx shall not receive such minimum Net Receipts on or
before 1 April 2000, Astra shall advance to Glycyx the sum of US
$500,000 (five hundred thousand US dollars) (less the amount of
any Net Receipts received by Glycyx from any Third Party Licensees
on or before 1 April 2000) ("the Loan Sum") such loan to be made
by Astra to Glycyx on 1 April 2000 by express payment to such bank
account as Glycyx may designate for such purpose.
12.2 Whilst Astra shall remain under any actual or contingent
obligation to pay the Loan Sum to Glycyx or whilst any part of the
Loan Sum shall remain outstanding, Glycyx shall provide Astra with
such financial information with respect to any agreements entered
into by Glycyx or Glycyx's Associates with Third Party Licensees
as shall be sufficient to inform Astra of the time, manner and
amounts in which the Loan Sum is anticipated to be paid out of Net
Receipts under such agreements.
The information above marked by [ * ] has been omitted
pursuant to a request for confidential treatment filed with the SEC.
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12.3 The Loan Sum shall be advanced as an unsecured and non-interest
bearing loan and Glycyx shall effect repayment of the Loan Sum by
paying or procuring the payment to Astra of [ * ]% of all Net
Receipts until the total of the Loan Sum has been repaid or at any
time at Glycyx's sole option by payment to Astra of any of the
amount of the Loan Sum then outstanding Provided that the Loan Sum
shall become immediately repayable in full on demand in writing by
Astra in the following circumstances:
(i) if Glycyx shall enter into liquidation; or
(ii) if Glycyx shall commit any act or omit to perform any
obligation in consequence whereof there shall cease
to be any reasonable prospect of Net Receipts being
received by Glycyx to cause the Loan Sum to be
repayable in full under the provisions of this Clause
12.3.; or
(iii) if Glycyx shall fail to effect repayment of any part
of the Loan Sum on or before the due date for payment
set out in Clause 12.4.
12.4 So long as any part of the Loan Sum shall remain outstanding
Glycyx shall keep true and accurate records of Net Receipts and
Glycyx shall within thirty (30) days of the end of each period of
three months ending on 31 March, 30 June, 30 September and 31
December send to Astra a full report and statement of the
calculation of all sums due and owing to Astra under the terms of
this Clause 12 and with such statement shall effect payment of the
sums due in respect of Net Receipts in the preceding quarter.
12.5 So long as any part of the Loan Sum shall be outstanding Glycyx
shall allow an independent accountant appointed by Astra and
approved by Glycyx, such approval not to be unreasonably withheld
or delayed, to inspect the financial records of Glycyx in order to
verify the accuracy and calculation of any statement delivered
under Clause 12.4. Such verification shall be undertaken at the
sole cost and expense of Astra
The information above marked by [ * ] has been omitted
pursuant to a request for confidential treatment filed with the SEC.
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Provided that in the event that any such verification shall reveal an under
reporting and/or accounting of Net Receipts and the sums due hereunder in
repayment of the Loan Sum in excess of 3% of the sums actually repaid the cost
and expense of such verification shall be borne solely by Glycyx.
12.6 In the event of any dispute between the Parties concerning the
calculation of any sum due under Clause 8.1 or Clause 12.3, an
independent auditor shall be appointed by agreement of the Parties
or in the absence of agreement at the request of either Party by
the President for the time being of the Institute of Chartered
Accountants in England and Wales who acting as an expert and not
as an arbitrator shall have full and free access to all relevant
information and data and shall be asked to determine and settle
any such dispute and in the absence of manifest error his decision
shall be final and binding on the Parties. The independent
auditor's fees shall be paid by the Parties in such proportions as
he shall direct.
12.7 All sums due by either Party to the other Party under the terms of
this Agreement are, unless otherwise expressly stated, exclusive
of any valued added tax or equivalent sales tax which shall be
payable (if applicable) upon submission of valued added tax
invoices in respect thereof.
13. TRADE MARK LICENCE
13.1 Glycyx hereby grants to Astra an exclusive royalty-free licence to
use the Trade Mark on the Product and in connection with the
marketing and exploitation of the Product in the Astra Territory
only, but for no other purpose.
13.2 Glycyx confirms that it has procured or shall procure the grant by
Biorex as owner (if appropriate) of the Trade Mark of such rights
and licences as may be required to give effect to Clause 13.1 and
undertakes to procure (if applicable) that Biorex shall execute
such agreements as are referred to in Clause 6.3.2.
13.3 Astra hereby confirms and acknowledges that it is licensed to use
the Trade Mark only as set out in this Agreement and further
acknowledges:
13.3.1 that all goodwill in the Trade Mark in any part of the
Astra Territory (whether or not
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generated by the activities of Astra under this Agreement)
shall vest in Glycyx or its designee;
13.3.2 that any application for registration of any Trade Mark
shall be made in the name of Glycyx or its designee only;
and
13.3.3 that it will transfer and assign to Glycyx or its designee
any right, title or interest of Astra in any Trade Mark
necessary for registration of the Trade Mark in any part of
the Astra Territory in the name of Glycyx or its designee
and for all goodwill in any Trade Mark in the Astra
Territory to vest in Glycyx or its designee.
14. CONFIDENTIAL INFORMATION
14.1 Astra undertakes to Glycyx that it will hold and maintain in
confidence all Glycyx Confidential Information and will not
disclose to any third party or use Glycyx Confidential Information
except to the extent necessary to exercise its rights and perform
its obligations under this Agreement or as required by law. If
required by law to disclose any Glycyx Confidential Information,
Astra shall promptly notify Glycyx in writing in order to provide
Glycyx with the opportunity to challenge such disclosure
obligation. Astra further undertakes to Glycyx that it will
exercise all reasonable precautions (being no less than it uses to
protect its own Confidential Information) to prevent and restrain
the unauthorised disclosure or use of any Glycyx Confidential
Information and shall ensure that all employees, consultants or
contractors of Astra who shall obtain any Glycyx Confidential
Information in connection with the performance of this Agreement
or shall have obtained any Glycyx Confidential Information prior
to the Effective Date in connection with any agreement terminated
under Clause 2.1 shall be bound and continue to be bound by
obligations of confidentiality substantially similar to the
obligations set out in this Clause.
14.2 Glycyx undertakes to Astra that it will hold and maintain in
confidence all Astra Confidential Information and will not
disclose to any third party or use Astra Confidential Information
except in connection with the development, formulation,
manufacture, sale or use of Balsalazide or the Product, the
exercise of rights granted to Glycyx under this Agreement or as
required by law. If required by law to disclose any Astra
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Confidential Information, Glycyx shall promptly notify Astra in
writing in order to provide Astra with the opportunity to
challenge such disclosure obligation. Glycyx further undertakes to
Astra that it will exercise all reasonable precautions (being no
less than it uses to protect its own Confidential Information) to
prevent and restrain the unauthorised disclosure or use of any
Astra Confidential Information and shall ensure that all
employees, consultants or contractors of Glycyx who shall obtain
Astra Confidential Information in connection with the performance
of this Agreement or shall have obtained any Astra Confidential
Information prior to the Effective Date in connection with any
agreement terminated under Clause 2.1 shall be bound and continue
to be bound by obligations of confidentiality substantially
similar to the obligations set out in this Clause.
14.3 Both Parties recognise the importance of keeping all material
information relating to the Product confidential and shall use all
reasonable endeavours to make sure that no such information is
made public or otherwise made available to third parties (save as
expressly contemplated by this Agreement) in any manner which
would materially jeopardise the value of the rights of the Parties
in respect of the Product.
14.4 The restrictions on disclosure and use set out in Clauses 14.1,
14.2 and 14.3 shall not apply to information:
14.4.1 which was available to the public or part of the public
domain at the time of disclosure by the disclosing Party,
or
14.4.2 which becomes available to the public or part of the public
domain through no fault of the receiving Party after such
disclosure, or
14.4.3 which the receiving Party can establish by competent proof
was already known to the receiving Party prior to
disclosure by the disclosing Party without restriction on
disclosure or use, or
14.4.4 which the receiving Party can establish by competent proof
was received by the receiving Party from a third party
without restriction on disclosure or use, or
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14.4.5 which the receiving Party can establish by competent proof
was independently developed by the receiving Party without
the use of confidential information of the disclosing
Party.
14.5 The restrictions set out in this Clause 14 shall be enforceable
until 30 September 2012 or in connection with any Glycyx
Confidential Information relating to the Astra Patents, if later,
until expiry of the last to expire of the Astra Patents.
15. INTELLECTUAL PROPERTY
15.1 Astra acknowledges that save as expressly stated herein Astra
shall have no right, title, interest or licence in or to the
Patents, the Glycyx Intellectual Property or other intellectual
property rights of Biorex or Glycyx in Balsalazide or the Product.
15.2 In the event that either Party becomes aware of any infringement
by any third party within the Astra Territory of any Glycyx
Intellectual Property or other intellectual property rights of
Glycyx and/or Biorex in the Patents, Balsalazide, the Product or
the Trade Mark it shall forthwith notify the other Party. Glycyx
shall be entitled to take such action (or procure such action by
Biorex) as it shall consider appropriate against any such third
party infringer, provided that:
15.2.1 Astra shall give such assistance as Glycyx may reasonably
require in connection with any such action subject to
reimbursement by Glycyx of all costs reasonably incurred by
Astra; and
15.2.2 Glycyx shall keep Astra informed of the conduct and
progress of such action but shall be entitled to conduct,
pursue and settle such action in such manner as it shall
reasonably consider appropriate and to retain any damages
awarded against any such infringer.
In the event that such infringement shall continue and Glycyx
shall fail to take or procure any action to prevent any continuing
infringement Astra may in its sole discretion and at its sole
expense initiate and pursue such action as it considers
appropriate to prevent any continuing infringement, provided that:
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15.2.3 Glycyx shall give (and shall use reasonable commercial
endeavours to procure from Biorex) such assistance as Astra
may reasonably require in connection with any such action
subject to reimbursement by Astra of all costs reasonably
incurred by Glycyx and/or Biorex; and
15.2.4 Astra shall keep Glycyx informed of the conduct and
progress of such action but shall be entitled to conduct,
pursue and settle such action in such manner as it shall
reasonably consider appropriate having regard to the
continuing value of any such intellectual property rights
to Glycyx and/or Biorex and the effect which any such
infringement shall have had or will have on the
exploitation in the Astra Territory by Astra of the Product
and shall be entitled to retain any damages awarded against
any such infringer.
15.3 In the event that any claim is made against Astra by any third
party alleging infringement of any rights of any third party by
the use and exploitation of the Product by Astra, Astra shall be
entitled at its sole cost and expense to defend any such claim in
such manner as it shall consider appropriate, provided that:
15.3.1 Glycyx shall give (and shall use reasonable commercial
endeavours to procure from Biorex) such assistance as Astra
may reasonably require in such action subject to
reimbursement by Astra of all costs reasonably incurred by
Glycyx and/or Biorex;
15.3.2 Astra shall keep Glycyx informed of the conduct and
progress of such action but shall be entitled to conduct,
pursue and settle such action in such manner as it shall
reasonably consider appropriate having regard to the
continuing value of any such intellectual property rights
to Glycyx and/or Biorex and the effect which any such
alleged infringement shall have had or will have on the
exploitation in the Astra Territory by Astra of the Product
and shall be entitled to retain any damages awarded against
any such infringer; and
15.3.3 Glycyx shall not be liable in any manner whatsoever to
Astra for any loss or damages suffered, incurred or awarded
against Astra in connection with
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any such claim.
16. SUB-CONTRACTORS AND DISTRIBUTORS
16.1 Astra shall not be entitled to appoint any sub-contractors,
sub-licensees or distributor for the Product in the Astra
Territory Provided that Astra may use an Astra Associate within
the Astra Territory for the performance of all or part of its
obligations hereunder.
16.2 Astra shall ensure that any Astra Associate performing any Astra
obligations hereunder exercises its rights and performs its
obligations in accordance with the provisions of this Agreement
and notwithstanding any such appointment Astra shall remain solely
liable for the performance of its obligations hereunder in each
part of the Astra Territory.
17. TERMINATION
17.1 This Agreement shall come into effect on the Effective Date and
shall continue thereafter until terminated in accordance with
Clauses 17.2 or 17.3 or 17.4 and 18.
17.2 Glycyx may at any time serve notice of termination in writing on
Astra in respect of all or any part of the Astra Territory.
17.3 Astra may at any time after the expiry of seven months from the
Effective Date serve notice of termination in writing on Glycyx in
respect of all or any part of the Astra Territory.
17.4 Either Party shall be entitled at any time to give notice of
termination in writing to the other in the event that:
17.4.1 the other Party shall fail to pay any sum due hereunder on
the due date and shall fail to remedy such breach within
(30) thirty days of being required in writing so to do;
17.4.2 the other Party shall commit a material breach of any of
the terms or conditions of this Agreement and shall fail to
remedy the same (if capable of remedy) within ninety (90)
days of being required in writing so to do Provided
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that such right of termination shall not arise in the event
of any breach by Glycyx of its obligations under Clause 7.4
unless Glycyx shall fail within a reasonable period of time
to replace the defective Product;
17.4.3 the other Party shall enter into liquidation (either
voluntary or compulsory) or shall be the subject of any
petition for winding up;
17.4.4 the other Party shall make any assignment or arrangement
for the benefit of its creditors or shall cease or threaten
to cease to carry on its business in the ordinary course;
17.4.5 a receiver, administrative receiver, or receiver and
manager, or judicial manager or administrator shall be
appointed over the whole or any part of the assets of the
other Party or if any Court proceedings are commenced for
the appointment of an administrator or receiver to either
Party; or
17.4.6 the other Party shall become unable to pay its debts as
they become due in the ordinary course of business or shall
otherwise become subject to or seek relief under any law
relating to insolvency in any jurisdiction relevant to such
other Party.
17.5 Neither Party shall be liable to the other Party under or in
connection with this Agreement for any indirect or consequential
loss or damage suffered by the other Party, howsoever caused,
including any claim for damages based upon loss of profits or loss
of goodwill.
17.6 Any waiver by either Party of a breach of any provision of this
Agreement shall not be considered as a waiver of any subsequent
breach of the same provision or of any breach of any other
provision of this Agreement.
17.7 Any termination of this Agreement shall be without prejudice to
the right of either Party to recover any monies due to it under
this Agreement or the rights or remedies of either Party in
respect of any breach prior to the date of termination of this
Agreement.
18. CONSEQUENCES OF TERMINATION
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18.1 In the event of notice of termination of this Agreement being
served under Clauses 17.2, 17.3 or 17.4 in respect of all or any
part of the Astra Territory, the Parties shall within 30 days
apply to the relevant Regulatory Authorities for the transfer of
the Product Registrations in the Astra Territory (or such part
thereof) from Astra to Glycyx or its designee. Glycyx shall be
responsible for providing Astra with such information concerning
the transferee as Astra shall need for the purpose of making such
applications and Astra shall be responsible for filing such
applications. Each Party shall thereafter promptly take all such
further action as may reasonably be required to effect such
transfers with the object that Glycyx or any Third Party Licensee
shall be able to assume marketing, distribution and sale of the
Product in the Astra Territory (or any part thereof) without
interruption of supply to customers. In the event of notice of
termination of this Agreement being served under Clauses 17.2,
17.3 or 17.4 in respect of all of the Astra Territory, the
provisions of this Clause 18.1 shall also apply in respect of
Product Registrations outside the Astra Territory.
18.2 Upon completion of the transfer of the Product Registrations in
any part of the Astra Territory or cancellation of the Product
Registrations in accordance with Clause 18.3 in any part of the
Astra Territory this Agreement shall terminate in respect of such
part of the Astra Territory and upon completion of the transfer or
cancellation of all Product Registrations in the Astra Territory
this Agreement shall terminate in full, subject to Clause 18.7.
18.3 If either Party ("First Party") shall commit any default in the
performance of its obligations under Clause 18.1 the other Party
("Second Party") may by not less than 30 days' notice in writing
specifying such default require that such default shall be
rectified. If such default shall not be rectified within such
period, Second Party shall be entitled by further notice in
writing to First Party to require specific performance of its
obligations under Clause 18.1 Provided that in the event of
default by Glycyx under Clause 18.1 Astra shall be entitled by
such further notice to require that Glycyx be named as transferee
in the performance of its obligations under Clause 18.1 and,
(regardless of whether Astra shall so require), if Glycyx's
default in the performance of its obligations under Clause 18.1
shall continue for more than 30 days after the date of service of
such further notice, Astra shall be entitled thereafter to cancel
any Product Registrations which are still registered in the name
of Astra or any Astra Associate.
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18.4 Upon termination of this Agreement becoming effective under Clause
18.2 in respect of all or any part of the Astra Territory, Astra
shall (in respect of all or such part of the Astra Territory):
18.4.1 forthwith cease all manufacture and distribution of the
Product (save only as expressly provided in Clause 18.4.6);
18.4.2 immediately telegraphically transfer all monies due and
payable to Glycyx as at the date of termination into
Glycyx's bank account designated under Clause 8.2;
18.4.3 immediately return to Glycyx all information and data of
whatsoever nature provided by or on behalf of Glycyx or any
Glycyx Associate relating to Balsalazide or the Product
which Astra or any Astra Associate may have in its
possession or under its control together with all copies
thereof but excluding any correspondence between Glycyx and
Astra and provided that Astra shall be entitled to keep one
copy of such information and data for regulatory purposes
and for dealing with any claims in respect of Product only
and Astra acknowledges that such retained copy shall not be
used for any other purpose whatsoever;
18.4.4 immediately cease use of any Glycyx Confidential
Information, Glycyx Intellectual Property, Patents or Trade
Mark;
18.4.5 forthwith deliver to Glycyx free of charge copies of any
Astra Product Information and Astra Regulatory Data
described in Clause 4.1 not previously delivered under
Clause 4.1, subject to the proviso contained in Clause 4.1;
18.4.6 if so required by Glycyx, sell to Glycyx all or part of
such stocks of the Product as Astra shall still have in its
possession once it has fulfilled all orders outstanding as
at the date of termination at a price calculated as cost
price to Astra (excluding cost of packaging), provided that
Glycyx shall
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not purchase any of the stocks of the Product which do not
have at least two-thirds of their approved shelf life
unexpired or do not comply with the specification of the
Product as at such date and provided further that in the
event of Glycyx not purchasing all stocks of the Product in
Astra's possession, Astra shall be entitled to continue to
sell its remaining stock in accordance with the terms of
this Agreement only in the Astra Territory only upon
substantially the same terms (as to price, delivery and
liability) as previously applied by Astra to sales of
Product under the terms of this Agreement and Glycyx shall
grant to Astra free of charge a licence to use all
intellectual property rights owned by or within the control
of Glycyx or any Glycyx Associate for the purpose of
enabling Astra to sell such stock;
18.4.7 grant to Glycyx free of charge a licence to use any Astra
trademark or tradename or logo or marking appearing on the
Product for the period reasonably required to enable Glycyx
to use all existing stocks, raw materials and work in
progress (other than packaging materials) and to effect
necessary changes to its manufacturing processes.
18.5 Upon termination of this Agreement becoming effective Glycyx shall
immediately telegraphically transfer all monies due and payable to
Astra as at the date of termination into such bank account as
Astra shall have designated in accordance with Clause 8.2 Provided
for the avoidance of doubt that such monies shall not include the
repayment of the Loan Sum unless the Loan Sum in accordance with
Clause 12.3 shall then be repayable.
18.6 Upon termination of this Agreement becoming effective, the
provisions of Clauses 4.3, 4.4 and 4.6 shall apply mutatis
mutandis in respect of any Astra Intellectual Property acquired or
created by Astra after the Effective Date.
18.7 Notwithstanding termination the provisions of Clauses 2.1, 4.3,
4.4, 4.5, 4.6, 4.7, 10, 12, 14, 17, 18, 22 and 23.5 shall continue
in accordance with their terms.
19. ASSIGNMENT
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19.1 Subject to Clause 19.2, either Party may assign all or any of its
rights or obligations under this Agreement to an Associate without
the prior written consent of the other Party Provided that such
assignment shall not result in adverse tax consequences for the
other Party, but in all other cases any transfer or assignment by
any Party of any of its rights or obligations hereunder shall
require the prior written consent of the other Party, which shall
not be unreasonably withheld or delayed. After such assignment to
an Associate has taken place, in the event that it is reasonably
anticipated that any assignee may cease to be an Associate of the
original Party, prior to the assignee so ceasing to be an
Associate of the original Party, the original Party shall reassume
the rights or obligations hereunder which were so assigned to the
Associate and shall procure that all such rights and obligations
shall be assigned back to the original Party.
19.2 Either Party hereto may satisfy any of its obligations hereunder
through any of its Associates Provided that:
(i) each Party shall guarantee the performance of any of
such Party's obligations so delegated pursuant to
this Clause;
(ii) such delegation shall not relieve the delegating
Party of its obligations in this Agreement; and
(iii) such delegation shall not result in adverse tax
consequences for the other Party.
20. FORCE MAJEURE
20.1 If the performance of any obligations under this Agreement by
either Party is affected by Force Majeure it shall forthwith
notify the other Party of the nature and extent thereof.
20.2 Neither Party shall be deemed to be in breach of this Agreement or
otherwise be liable to the other by reason of any delay in
performance or non-performance of any of its obligations hereunder
to the extent that such delay or non-performance is due to any
Force Majeure which has been notified to the other Party in
writing.
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21. COSTS
21.1 Each Party hereto shall bear its own costs in relation to the
negotiation, drafting, preparation and execution of this
Agreement.
22. CONFIDENTIALITY
22.1 Each Party undertakes to keep confidential and not to disclose to
any third party (without the prior written consent of the other
Party) the contents of the Research Agreement, the contents of the
Distribution Agreement or this Agreement, negotiations pertaining
to the Research Agreement, the Distribution Agreement or this
Agreement or otherwise any matters arising in connection with the
conduct of the Research Agreement and the Distribution Agreement
or this Agreement Provided that nothing herein contained shall
preclude a Party from disclosing information:
(i) which is contained in press releases agreed between
the Parties,
(ii) which the Parties agree in writing may be disclosed,
(iii) which is in the public domain otherwise than as the
result of any breach of obligation of confidentiality
by such Party,
(iv) which is required to be disclosed by law or by any
regulatory body or recognised stock-exchange,
(v) which is reasonably required in writing by Glycyx to
be disclosed by employees of Astra in the performance
of their obligations under Clause 2.3, or
(vi) which Glycyx wishes to disclose (subject to
confidentiality obligations) to any licensor,
licensee or investor or potential licensor, licensee
or investor of or in Glycyx or any Glycyx Associate
or to any Glycyx Associate.
23. NATURE OF THE AGREEMENT
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23.1 Nothing in this Agreement shall create or be deemed to create any
partnership or joint venture or the relationship of principal and
agent between the Parties.
23.2 Each Party acknowledges that in entering into this Agreement it
does not do so on the basis of and does not rely on any
representation or warranty or other provision (except as expressly
provided herein) and all conditions, warranties or other terms
implied by statute or common law are hereby excluded to the
fullest extent permitted by law.
23.3 This Agreement constitutes the entire understanding and agreement
between the Parties with respect to the subject matter hereof and
supersedes all prior agreements, negotiations and discussions
between the Parties relating thereto.
23.4 This Agreement may not be released, discharged, abandoned, changed
or modified in any manner except by an instrument in writing
signed by a duly authorised officer or representative of each of
the Parties.
23.5 This Agreement shall be governed by and construed in all respects
in accordance with the laws of England and each Party hereby
submits to the exclusive jurisdiction of the English Courts. Each
Party agrees to maintain as its respective agent for service of
process in connection with any action commenced before the High
Court in England the following agent or such other agent as it
shall from time to time by notice in writing to the other Party
appoint in place of such agent and the Parties agree that the
service of process or any other papers upon such agent by
registered mail at its address set out below or at such other
address as the appointing Party shall subsequently notify to the
other Party as its agent's address for service shall be deemed
proper and effective service on the appointing Party.
Glycyx: Glycyx Pharmaceuticals, Ltd
17 - 18 Coach House Cloisters
Hitchin Street
Baldock
Herts SG7 6AE
Astra: AstraZeneca UK Limited
15 Stanhope Gate
London W1Y 6LN
41
<PAGE>
24. NOTICES
24.1 All notices to be served by the Parties shall be served only in
the English language.
24.2 Notices shall be sufficiently served if dispatched by express
courier to the address of the receiving Party set out below:
Glycyx: Milner House
18 Parliament Street
Hamilton
HM12, Bermuda
FAO: President
With a copy to: Salix Pharmaceuticals, Ltd
3600 W Bayshore Road
Suite 205
Palo Alto
CA 94303 USA
FAO: President
Astra: SE-151 85 Sodertalje
Sweden
F.A.O: President
Any modification to this address must be notified in writing to
the other Party in accordance with the terms of this Clause.
24.3 In the absence of proof to the contrary notices properly sent
hereunder shall be deemed to have been duly served 4 days after
the date of dispatch.
24.4 Copies of any notices dispatched in accordance with Clause 24.2
may be sent by facsimile transmission and for this purpose the
following fax numbers below shall apply:
42
<PAGE>
24.4.1 in the case of Glycyx at (+441) 296 5749 and marked for the
attention of President with a copy to Salix Pharmaceuticals, Ltd
at (+1) 650 856 1555 marked for the attention of the President;
24.4.2 in the case of Astra at (+46) 8 553 29000 and marked for the
attention of the President.
AS WITNESS the hands of the duly authorised representatives of the Parties
hereto the day and year first above written.
SIGNED for and on behalf of SIGNED for and on behalf of
GLYCYX PHARMACEUTICALS, LTD ASTRA AB
(PUBL)
- -------------------------- --------------------------
- -------------------------- --------------------------
43
EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Robert P. Ruscher
650-849-5900
SALIX PHARMACEUTICALS, LTD. ANNOUNCES RETURN OF COLAZIDE(R)
MARKETING AND DISTRIBUTION RIGHTS FROM ASTRAZENECA
PALO ALTO, CA, DECEMBER 22, 1999 - Salix Pharmaceuticals, Ltd. (TSE: SLX ) today
announced the return to Salix of the marketing and distribution rights for
Colazide(R) (balsalazide disodium) previously held by AstraZeneca. Under prior
agreements, AstraZeneca had held marketing and distribution rights to the
product worldwide, excluding Italy, Spain, Portugal, Greece, Japan, Korea and
Taiwan.
AstraZeneca will continue to distribute the product in the United Kingdom,
Sweden and Denmark for an interim period while Salix pursues alternatives for
marketing and distribution in these countries. AstraZeneca will return to Salix
all rights, intellectual property and information relating to Colazide, and
future milestone payments from AstraZeneca will be terminated. AstraZeneca has
agreed to make a US$1 million payment to Salix, representing previously earned
research and development funding, and to make a loan to Salix of up to
US$500,000 under certain conditions.
"AstraZeneca has been a good partner throughout our relationship. Nevertheless,
we believe termination of the Colazide distribution arrangement presents an
unexpected opportunity for Salix," stated Robert Ruscher, President and Chief
Executive Officer of Salix. "We have regained the rights to Colazide throughout
most of the world, which opens new partnering possibilities for Salix."
As of December 15, 1999, Salix had cash, cash equivalents and short term
investments of approximately US$1,588,000. Salix believes that its cash
reserves, together with projected funds from product sales and corporate
partners, should be sufficient to satisfy the cash requirements of Salix's
operations through at least June 2000.
-more-
<PAGE>
-2-
Salix Pharmaceuticals, Ltd. develops and markets prescription pharmaceutical
products for the treatment of gastrointestinal diseases. Salix's strategy is to
in-license proprietary therapeutic drugs with an existing database of positive,
late-stage clinical data in humans, complete the development and market these
products. Salix's lead product is Colazide, a treatment for ulcerative colitis.
The product was first approved by the United Kingdom Medicines Control Agency in
July 1997 as a treatment for acute ulcerative colitis and has since also been
approved for use in the maintenance of remission of ulcerative colitis. Colazide
has also been approved in Argentina, Austria, Belgium, Czech Republic, Denmark,
Italy, Luxembourg, Norway, Sweden and Switzerland. Salix submitted a New Drug
Application (NDA) to the United States FDA for the use of balsalazide disodium
as a treatment for acute ulcerative colitis and received an approvable letter
from the FDA in June 1998.
Additionally, Salix is in Phase III clinical development of rifaximin, a
broad-spectrum gastrointestinal specific antibiotic, licensed from Alfa
Wassermann, S.p.A., an Italian company. Rifaximin has been marketed in Italy by
Alfa Wassermann for several years and is used for several gastrointestinal
conditions including hepatic encephalopathy, infectious diarrhea and prophylaxis
prior to bowel surgery.
-more-
<PAGE>
-3-
The statements in this press release that are not purely statements of
historical fact are forward-looking statements, and actual results may differ
materially from those anticipated. With respect to Salix, important factors that
could cause results to differ include risks associated with funding of
operations, product development and commercialization activities, and regulatory
decisions. These and other factors are described in more detail in Salix's
reports on Form 10-K, Form 10-Q and Form 8-K filed with the Securities and
Exchange Commission. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. Salix
assumes no obligation to update the information in this release.
# # #
PLEASE NOTE: THIS PRESS RELEASE CONTAINS PROJECTIONS AND OTHER FORWARD-LOOKING
STATEMENTS REGARDING FUTURE EVENTS. SUCH STATEMENTS ARE JUST PREDICTIONS AND ARE
SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE ACTUAL EVENTS OR RESULTS
TO DIFFER MATERIALLY. THE READER IS REFERRED TO THE DOCUMENTS THAT THE COMPANY
FILES FROM TIME TO TIME WITH APPLICABLE CANADIAN SECURITIES, REGULATORY
AUTHORITIES AND WITH THE SECURITIES AND EXCHANGE COMMISSION, IN PARTICULAR THE
COMPANY'S REGISTRATION STATEMENT ON FORM S-1 IN CONNECTION WITH THE COMPANY'S
MOST RECENT PUBLIC OFFERING AND THE SECTION ENTITLED "RISK FACTORS" AND ITS
QUARTERLY REPORTS ON FORM 10-Q AND 10-K.
