FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 30, 1996
WARNER-LAMBERT COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-3608 22-1598912
(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification
incorporation) No.)
201 Tabor Road, Morris Plains, New Jersey 07950
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 540-2000
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Item 5. Other Events.
On July 1, 1996, the Registrant issued a press release
announcing that the Company had purchased Glaxo Wellcome plc's U.S.
and European interests in the Warner Wellcome over-the-counter joint
ventures (formed in 1994 with Wellcome plc). Purchase agreements for
Glaxo Wellcome's interest in Canada, Mexico, Australia and New Zealand
are expected to be signed in the third quarter, 1996. The purchase
price for the entire transaction is $1.05 billion.
The Registrant also announced the restructuring of Warner-
Lambert's joint venture arrangements with Glaxo Wellcome to market
Glaxo Welcome's Rx to OTC switch products. The joint venture
arrangements will now include Wellcome's Rx to OTC products.
The foregoing summary is qualified in its entirety by the
complete text of the press release and the Amended and Restated Global
Principles Agreement dated as of June 30, 1996, each of which is
attached hereto.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits
(10) Material contracts.
(a) Amended and Restated Global Principles Agreement, dated
as of June 30, 1996, between Warner-Lambert Company and Glaxo Wellcome
plc.
(99) Additional Exhibits.
(a) Press Release dated July 1, 1996.
<PAGE>
SIGNATURES
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.
WARNER-LAMBERT COMPANY
(Registrant)
Date: July 1, 1996 By: /s/ Joseph E. Lynch
-------------------------
JOSEPH E. LYNCH
Vice President and
Controller
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Exhibit Index
Exhibit No. Exhibit Page No.
- ----------- --------------------------- --------
(10) Material contracts.
(a) Amended and Restated
Global Principles Agreement,
dated as of June 30, 1996,
between Warner-Lambert
Company and Glaxo Wellcome
plc.
(99) Additional Exhibits.
(a) Press Release dated
July 1, 1996.
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AMENDED AND RESTATED GLOBAL PRINCIPLES AGREEMENT
between
WARNER-LAMBERT COMPANY
and
GLAXO WELLCOME plc
---------------------------
Dated as of June 30, 1996
---------------------------
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<PAGE>
TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT
ARTICLE I
Definitions
SECTION 1.01. Definitions...................................... 2
SECTION 1.02. Other Definitions ............................... 10
SECTION 1.03. Statutory Provisions ............................ 11
SECTION 1.04. Schedules ....................................... 11
ARTICLE II
Closing
SECTION 2.01. Closing ......................................... 11
SECTION 2.02. Action at the Closing of This Agreement.......... 12
SECTION 2.03. Subsequent Closings ............................. 12
ARTICLE III
Management of JV Entities; Funding
SECTION 3.01. General Manager ................................. 12
SECTION 3.02. Governing Boards; Membership .................... 12
SECTION 3.03. Responsibility of the Governing Boards........... 13
SECTION 3.04. Actions of the Governing Boards ................. 14
SECTION 3.05. Meetings of the Governing Boards;
Notice; Quorum ................................ 14
SECTION 3.06. Deadlock ........................................ 15
SECTION 3.07. Subcommittees of the Governing Boards .......... 15
SECTION 3.08. Development Committee............................ 15
SECTION 3.09. Coordination Committees ......................... 16
SECTION 3.10. Removal of Representatives ...................... 17
SECTION 3.11. No Remuneration ................................. 17
SECTION 3.12. Other Positions of Representatives .............. 17
SECTION 3.13. Annual Operating Plan ........................... 18
SECTION 3.14. Funding ......................................... 18
SECTION 3.15. Deliberations ................................... 18
SECTION 3.16. Reserved Matters ................................ 18
SECTION 3.17. Exports ......................................... 19
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Page
ARTICLE IV
Operations; JV Entities
SECTION 4.01. General ......................................... 19
SECTION 4.02. Establishment of Other JV Entities .............. 19
SECTION 4.03. Form and Structure of JV Entities ............... 19
SECTION 4.04. Management of JV Entities ....................... 21
SECTION 4.05. Operations To Be Conducted in
Accordance with Annual Operating
Plan and Direction of Governing
Board ......................................... 21
SECTION 4.06. Litigation....................................... 21
ARTICLE V
JV Products
SECTION 5.01. General ......................................... 22
SECTION 5.02. Ranitidine Products in the United
States......................................... 22
SECTION 5.03. Zovirax OTC Products in Cream Form............... 23
SECTION 5.04. Other Products and/or Other Countries............ 24
SECTION 5.05. Right of First Refusal........................... 27
SECTION 5.06. GW Marketing Rights.............................. 28
SECTION 5.07. Licenses and Services............................ 33
SECTION 5.08. Representations and Warranties................... 40
SECTION 5.09. Non-Compete...................................... 41
SECTION 5.10. Japan............................................ 42
SECTION 5.11. Finland.......................................... 42
ARTICLE VI
Related Transactions
SECTION 6.01. Development and Strategic Plans.................. 42
SECTION 6.02. Marketing Plans; Services To Be Provided
by W-L in Respect of Ranitidine
Products and Zovirax OTC Products.............. 43
SECTION 6.03. Other Services To Be Provided by W-L............. 45
SECTION 6.04. Supply........................................... 45
SECTION 6.05. Manufacture of JV Products....................... 46
SECTION 6.06. Financial and Other Information; Audit........... 47
SECTION 6.07. U.S. Export Controls/International Boycott....... 48
SECTION 6.08. Technology....................................... 48
SECTION 6.09. Regulatory Approvals; Recalls and
Withdrawals.................................... 49
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Page
ARTICLE VII
Further Covenants of W-L
SECTION 7.01. Allocation of Resources.......................... 50
SECTION 7.02. W-L Affiliates................................... 50
SECTION 7.03. Safety Information............................... 50
SECTION 7.04. Approvals and Consents........................... 51
SECTION 7.05. Use of JV Regulatory Documentation............... 51
SECTION 7.06. Tax Matters...................................... 51
SECTION 7.07. Further Assurances............................... 52
ARTICLE VIII
Further Covenants of GW
SECTION 8.01. Information Relating to Potential
JV Products.................................... 52
SECTION 8.02. Regulatory....................................... 52
SECTION 8.03. GW Affiliates.................................... 52
SECTION 8.04. Safety Information............................... 52
SECTION 8.05. Approvals and Consents........................... 53
SECTION 8.06. Use of JV Regulatory Documentation............... 53
SECTION 8.07. Tax Matters...................................... 54
SECTION 8.08. Further Assurances............................... 54
ARTICLE IX
Representations and Warranties of W-L
SECTION 9.01. Organization; Good Standing...................... 54
SECTION 9.02. Authority; No Violation.......................... 54
SECTION 9.03. Certificate of Incorporation and By-Laws......... 55
SECTION 9.04. Certain Litigation............................... 55
SECTION 9.05. Compliance....................................... 55
SECTION 9.06. Finder........................................... 56
SECTION 9.07. Transactions Contemplated by W-L
Relevant Agreements............................ 56
ARTICLE X
Representations and Warranties of GW
SECTION 10.01. Organization; Good Standing...................... 56
SECTION 10.02. Authority; No Violation.......................... 56
SECTION 10.03. Certificate of Incorporation and
Memorandum and Articles of Association......... 57
SECTION 10.04. Intellectual Property Rights..................... 57
SECTION 10.05. Certain Litigation............................... 58
SECTION 10.06. Product Liability................................ 59
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Page
SECTION 10.07. Compliance....................................... 59
SECTION 10.08. Finder........................................... 60
SECTION 10.09. GW Regulatory Documentation...................... 60
SECTION 10.10. Transactions Contemplated by GW Relevant
Agreements..................................... 60
ARTICLE XI
Conditions to Closing
SECTION 11.01. Certain Action................................... 60
SECTION 11.02. Governmental Approvals and Consents.............. 60
SECTION 11.03. Representations and Warranties................... 61
SECTION 11.04. Performance of Covenants......................... 62
SECTION 11.05. Authorization of Agreements...................... 62
SECTION 11.06. Operative Documents.............................. 62
SECTION 11.07. Certificate of Compliance........................ 62
ARTICLE XII
Transfer of JV Interest;
Permitted Transfers
SECTION 12.01. Limitation on Right to Transfer Parties'
Interests...................................... 62
SECTION 12.02. Permitted Transfers.............................. 63
SECTION 12.03. Change of Control................................ 64
ARTICLE XIII
Indemnification
SECTION 13.01. Indemnification by the JV Entities............... 66
SECTION 13.02. Indemnification by W-L........................... 66
SECTION 13.03. Indemnification by GW............................ 67
SECTION 13.04. Indemnification Generally........................ 67
SECTION 13.05. Survival of Representations and
Warranties..................................... 68
ARTICLE XIV
Term and Termination
SECTION 14.01. Term of Agreement................................ 69
SECTION 14.02. Liquidation; Breach; Optional
Termination.................................... 69
SECTION 14.03. Continued Arrangements........................... 71
SECTION 14.04. Winding Up and Liquidation....................... 72
SECTION 14.05. Survival of Rights............................... 72
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Page
ARTICLE XV
General
SECTION 15.01. Expenses......................................... 72
SECTION 15.02. Assignment and Binding Effect.................... 73
SECTION 15.03. Inability To Agree upon Value.................... 73
SECTION 15.04. Corporate Names.................................. 73
SECTION 15.05. Governing Law; Jurisdiction; Consent to
Service of Process; Agent for Service.......... 73
SECTION 15.06. Notices.......................................... 75
SECTION 15.07. Parties in Interest.............................. 76
SECTION 15.08. Press Releases................................... 76
SECTION 15.09. Headings......................................... 76
SECTION 15.10. Entire Agreement; Amendment; Termination
of Existing Arrangements; Severability......... 76
SECTION 15.11. Waiver and Compliance............................ 77
SECTION 15.12. Confidentiality.................................. 77
SECTION 15.13. Specific Enforcement............................. 78
SECTION 15.14. Counterparts..................................... 78
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<PAGE>
AMENDED AND RESTATED GLOBAL PRINCIPLES
AGREEMENT dated as of June 30, 1996 (the
"Agreement"), by and between
WARNER-LAMBERT COMPANY, a Delaware cor-
poration ("W-L"), and GLAXO WELLCOME
plc, a company incorporated in England
and Wales ("GW"), amending and restating
the Global Principles Agreement dated as
of December 10, 1993 (the "Original
Agreement") by and between W-L and GW
PRELIMINARY STATEMENT
W-L and GW (under its previous name of Glaxo Holdings
p.l.c.), previously entered into the Original Agreement and, pursuant
thereto, agreed upon certain principles for the development and
marketing of Ranitidine Products and certain other consumer health
care products in the United States and in other countries throughout
the world (except in Japan) and established certain JV Entities.
Additionally, W-L and Wellcome plc, a company incorporated in England
and Wales ("Wellcome"), previously entered into the Wellcome GPA
and, pursuant thereto, agreed upon certain principles for the
development and marketing of certain consumer health care products,
including those sold under the trademark Zovirax(R), in the United
States and in other countries throughout the world and formed
certain joint ventures. Between March and June 1995, GW acquired all
of the issued share capital of Wellcome. W-L and GW intend to
terminate the Wellcome GPA and wish to amend and restate the Original
Agreement in order to include therein, inter alia, certain principles
for the development and marketing of Zovirax OTC Products in countries
throughout the world (except in Japan) and implement additional joint
ventures. While the specific form of the joint ventures implemented to
date pursuant to the Original Agreement or to be implemented may vary
in different countries, it is the intention of the Parties by this
Agreement to agree upon certain principles which will govern the
strategic development and marketing of all such products.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, agreements, representations and warranties herein
contained, and for other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, hereby agree that the Original
Agreement be and is hereby amended and restated in its entirety,
except as provided in Section 15.10, as follows:
<PAGE>
ARTICLE I.
Definitions
SECTION 1.01. Definitions. The following capitalized terms
shall have the following definitions:
"Acyclovir" shall mean the pharmaceutical compound
9-(2-hydroxyethoxymethyl) guanine and all pharmaceutically acceptable
salts thereof.
"Affiliate," with respect to any Person, shall mean any
other Person controlling, controlled by or under direct or indirect
common control with such Person. A Person shall be deemed, for the
purposes of this Agreement, to control a corporation (or other
entity) if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such
corporation (or other entity), whether through the ownership of voting
securities, by contract or otherwise. For the purposes of this
Agreement, a JV Entity shall not be deemed to be an Affiliate of W-L
or GW.
"Business Day" shall mean a day of the year in which banks
are not required or authorized to close in New York City or in the
City of London.
"Closing Documents" shall mean this Agreement, the JV
Implementation Agreements for the products and in the countries listed
on Schedule 1.01(a) and the other Operative Documents listed on
Schedule 1.01(b).
"Development Agreements" shall mean the development
agreements among the Parties, their Affiliates and the JV Entities
or any of them relating to the JV Businesses, as the same may be
entered into, amended or modified from time to time.
"Existing Zovirax Countries" shall mean (i) initially,
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland,
Ireland, Italy, Liechtenstein, Luxembourg, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, the United Kingdom and the
United States and (ii) from and after the date on which W-L or its
Affiliates acquires consumer healthcare products of GW or its
Affiliates in Australia, Canada and New Zealand, all the countries
referred to in clause (i) and this clause (ii).
"FDA" shall mean the United States Federal Food and Drug
Administration or any successor agency of the United States.
<PAGE>
"Fully Allocated Cost" shall mean all costs, including
materials, direct and indirect labor, services and an appropriate
allocation of fixed and variable overhead expenses, but excluding any
intercompany profits relating thereto, the determination of which
shall, in respect of manufacturing, be in accordance with Schedule
1.01(c), and shall otherwise be as agreed between the Parties or their
Affiliates in the relevant Operative Document or otherwise.
"Going Concern Value" shall mean the value of a non-
prescription consumer health care product business, or an interest
therein, as the case may be, as if such business were freely tradeable
in the open market (and, for the avoidance of doubt, taking into
consideration any continuing arrangements pursuant to Section 14.03
hereof). Such valuation will not reflect either a premium for control
or a discount for lack of marketability. The primary basis for
arriving at such valuation will be commonly employed valuation
multiples of selected non-prescription consumer health care product
businesses generally deemed comparable to such business.
"Governing Board" shall mean, in respect of any JV Entity,
the Governing Board established pursuant to Section 3.02 of this
Agreement and the relevant JV Implementation Agreements to oversee the
management of that JV Entity.
"GW Inc." shall mean Glaxo Wellcome Inc., a North Carolina
corporation, which is an indirect wholly owned Affiliate of GW.
"GW OTC" shall mean Glaxo Wellcome OTC Inc., a Delaware
corporation, which is an indirect wholly owned Affiliate of GW.
"GW Participant" shall mean, in respect of each JV Entity,
GW or such direct or indirect wholly owned Affiliate of GW as may from
time to time be the partner or other equity participant in such JV
Entity in accordance with this Agreement.
"GW Products" shall mean, as at the Closing of this
Agreement, the products in the countries listed on Schedule 1.01(d),
and shall also have the meanings set forth in Section 5.08.
"GW Regulatory Documentation" shall mean all regulatory
documents, clinical studies and tests in the possession or control of
GW or any of its Affiliates relating to a particular product or
compound including, without limitation, all new drug applications,
abbreviated new drug applications, drug master
<PAGE>
files, correspondence with appropriate regulatory agencies
(registrations and licenses, regulatory drug lists, advertising and
promotion documents), adverse event files, complaint files and
manufacturing records but excluding proprietary chemical data.
"GW Services" shall mean Glaxo Services Inc., a Nevada
corporation, which is an indirect wholly owned Affiliate of GW.
"JV Business" shall mean, with respect to any JV Entity in
any country, the business of such JV Entity.
"JV Entity" shall mean, in respect of the United States, the
U.S. Partnership, in respect of the United Kingdom and certain other
countries, the U.K. Partnership, and in respect of any other country
or territory, such Person as the Parties may establish for the purpose
of conducting the JV Business in that country or territory and shall
also mean such other Person as the Parties may otherwise establish in
connection with the relevant JV Business.
"JV Implementation Agreement" shall mean, in respect of any
JV Entity, the agreement (or agreements) that establish the structure
of the JV Entity and provide for the JV Business to be conducted in
the relevant country, as the same may be entered into, amended or
modified from time to time.
"JV Products" shall mean all products developed, marketed,
sold or distributed by any JV Entity pursuant to the arrangements
contemplated by this Agreement and the other Operative Documents.
"JV Regulatory Documentation" shall mean all regulatory
documents, clinical studies and tests in the possession or control of
any JV Entity, relating to a particular product or compound, including
without limitation all new drug applications, abbreviated new drug
applications, drug master files, correspondence with appropriate
regulatory agencies (registrations and licenses, regulatory drug
lists, advertising and promotion documents), adverse event files,
complaint files and manufacturing records.
"Launch Date" shall mean, in respect of a JV Product in a
particular country, the date of first sale of that product by the
relevant JV Entity for use or consumption by the general public (other
than sales resulting from regional test marketing) in such country;
provided, that if such date is not the first day
<PAGE>
of a calendar month, the Launch Date shall mean the first day of the
next following calendar month.
"License Agreements" shall mean the license agreements among
the Parties, their Affiliates and the JV Entities or any of them
relating to the JV Businesses, as the same may be entered into,
amended or modified from time to time.
"Lien" shall mean any lien, mortgage, pledge, security
interest, charge or encumbrance of any kind (including, without
limitation, any conditional sales or other title retention agreement,
any lease in the nature thereof and any agreement to give any security
interest).
"Net Sales" shall mean gross invoice amounts on sales of
products to customers less the following deductions: off invoice
(i.e., non-performance discounts), quantity (including bracket
pricing) and cash discount and any other adjustments, including but
not limited to those granted on account of price adjustments, billing
errors, rejected goods, damaged goods, recalls, returns, rebates,
charge-backs and prime vendor rebates, reimbursements or similar
payments granted or given to wholesalers or other distributors,
buying groups, health care insurance carriers or other institutions,
freight and insurance charges billed to the customer, custom or excise
duties, sales taxes and other taxes (except income taxes) or duties
relating to sales of products, and any bona fide payment made in
respect of any sale of products to any governmental or
quasi-governmental body or agency.
"NDA" shall mean a New Drug Application, including any
amendments or supplements thereto, filed with the FDA pursuant to the
Federal Food, Drug & Cosmetic Act, 21 U.S.C. 321 et seq., any
amendments or supplements thereto, including any future amendments
or supplements, or any regulations promulgated or adopted thereunder.
"NDA Approval" shall mean the receipt of final approval from
the FDA of an NDA with labeling mutually acceptable to the Parties to
make, use and sell in the United States a subject product.
"Non-U.S. Country" shall mean any country other than the
United States.
"Operating Profit or Loss" shall mean, with respect to any
JV Entity, (i) the Net Sales of such JV Entity and any other income of
such JV Entity less (ii) the sum of (x) the Fully
<PAGE>
Allocated Cost of goods sold by such JV Entity, (y) the charges to
such JV Entity provided for in Sections 5.07, 6.01, 6.02 and 6.03 and
(z) the Fully Allocated Cost of any other expenses of such JV Entity.
"Operative Documents" shall mean the Closing Documents, the
JV Implementation Agreements, the License Agreements, the Supply
Agreements and all ancillary documents referred to herein or therein.
"OTC Classification" shall mean, in respect of any version
of a drug product in any country, all classifications, approvals,
permits and consents necessary to enable such version of a drug
product to be sold to consumers without the necessity of a
prescription in that country in accordance with applicable law.
"OTC Switch Product" shall mean, in respect of any country,
a version of a Prescription Product which may be sold to consumers
without the necessity of a prescription in accordance with applicable
law other than a Ranitidine Product and shall be deemed to include any
product meeting the definition of Zovirax OTC Product in respect of
such country.
"Other Ranitidine Products" shall mean, in respect of any
country, any version of a drug product which contains Ranitidine which
may be sold to consumers without a prescription in that country (other
than Ranitidine OTC Products).
"Partnership Agreement" shall mean the Amended and Restated
Partnership Agreement relating to the U.S. Partnership to be executed
at the Closing of this Agreement between W-L and GW OTC as the same
may be amended or modified from time to time.
"Party" shall mean W-L or GW or any other Person which
becomes a party to this Agreement.
"Permitted Liens" shall mean (i) any Lien for current Taxes
not delinquent or Taxes being contested in good faith by appropriate
proceedings and (ii) other Liens incidental to the conduct of the
business or the ownership of the property and assets which were not
incurred in connection with the borrowing of money or the obtaining of
advances or credit, and which do not in the aggregate materially
detract from the value of the property or assets or materially
impair the use thereof in the operation of the business.
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"Permitted Transfer" shall mean a transfer of all or part of
a Party's or its Affiliates' individual interest in this Agreement,
any of the Operative Documents, any JV Business or any JV Entity or in
any entity which holds an interest therein, made pursuant to and in
accordance with Article XII of this Agreement.
"Person" shall mean any individual or corporation, company,
partnership, trust, incorporated or unincorporated association, joint
venture or other entity of any kind.
"Prescription Product" shall mean, in respect of any
country, any product which is dispensed to consumers only against a
prescription and which has not been given an OTC Classification in
such country.
"Prescription Ranitidine Products" shall mean, in respect of
any country, any Prescription Product making use of Ranitidine.
"Ranitidine" shall mean the pharmaceutical compound
N-[2-[[[5-[(dimethylamino)methyl]-2furanyl]methyl]thio]ethyl]
- -N'-methyl-2-nitro-1,1-ethenediamine and its hydrochloride salt;
provided, however, that for the avoidance of doubt, this definition
shall not encompass Ranitidine Bismuth Citrate.
"Ranitidine Bismuth Citrate" shall mean N-[2-[[[5-
[(dimethylamino) methyl]-2-furanyl]methylthio]ethyl]-N'-methyl-
2-nitro-1, 1-ethenediamine 2-hydroxy-1,2,3propanetricarboxylate
bismuth (3+) complex.
"Ranitidine OTC" shall mean, in the case of a tablet, a
formulation containing less than 150 milligrams of Ranitidine or, in
the case of other presentations, a formulation containing less than
the equivalent strength, in either case in which Ranitidine alone is
the active ingredient and having an initial indication different from
the principal indications of the Prescription Ranitidine Product
available in the United States as of the date of the Original
Agreement (e.g., healing of ulcers).
"Ranitidine OTC Products" shall mean, in respect of any
country, any drug product which has been given an OTC Classification
in such country and which contains Ranitidine OTC.
"Ranitidine Products" shall mean Ranitidine OTC Products
and Other Ranitidine Products.
"Regulatory Approval" shall mean the receipt of final
approval from all relevant governmental and other authorities to
<PAGE>
make, use and sell in a relevant territory a subject product together
with all appropriate pricing approvals.
"Supplemental Document Package" shall mean those Schedules
and Exhibits the form of which has been agreed upon and marked for
identification by the Parties.
"Supply Agreements" shall mean the bulk ingredient and
finished product supply agreements among the Parties, their Affiliates
and the JV Entities or any of them relating to the JV Businesses, as
the same may be entered into, amended or modified from time to time.
"Taxes" shall mean taxes or other levies and assessments
including income, excise, sales, use, transfer, registration, value
added, franchise, capital, withholding, property, payroll or other
governmental levies, including any penalties or interest thereon.
"Third Party" shall mean any Person other than a Party or an
Affiliate thereof but shall not include any JV Entity.
"UK Partnership" shall mean Glaxo Wellcome Warner Lambert
(UK) OTC, a partnership established under the laws of England and
Wales.
"United Kingdom" or "UK" shall mean the United Kingdom of
Great Britain (including the Channel Islands) and Northern Ireland.
"United States" or "U.S." shall mean the fifty states of the
United States of America, the District of Columbia, Puerto Rico, and
any territory thereof and U.S. military bases worldwide.
"U.S. Partnership" shall mean Glaxo Wellcome Warner-Lambert
OTC G.P., a New York general partnership.
"Valid Claim" means a claim which, but for licenses to be
granted under a License Agreement, would be infringed by a JV Entity's
manufacture, use or sale of a JV Product in any form, and which is in
an unexpired issued patent included within the Patent Rights (as
defined in such License Agreement) which has not been held invalid or
unenforceable by a decision of a court of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and
which has not been admitted to be invalid by the owner through reissue
or disclaimer. If there should be two or more decisions which are
conflicting with
<PAGE>
respect to the invalidity of the same claim, the decision of the
higher or highest tribunal shall thereafter control; however, should
the tribunals be of equal dignity, then the decision or decisions
holding the claim valid shall prevail where the conflicting
decisions are equal in number, and the majority of decisions shall
prevail where the conflicting decisions are unequal in number.
"Wellcome GPA" shall mean the Global Principles Agreement
dated December 17, 1993, between W-L and Wellcome.
"W-L Participant" shall mean, in respect of each JV Entity,
W-L or such of W-L's direct or indirect wholly owned Affiliates as may
from time to time be the partner or other equity participant in such
JV Entity in accordance with this Agreement.
"W-L Services Agreements" shall mean the services agreements
between W-L or its Affiliates and the JV Entities or any of them
relating to the JV Businesses, as the same may be entered into,
amended or modified from time to time.
"Zantac" shall mean the product containing Ranitidine as
sold by GW or its Affiliates under the Zantac Trademark.
"Zantac Trademark" shall mean (i) the trademark Zantac(R)
and the registrations thereof, (ii) in respect of the United States
and the United Kingdom, the distinctive five-sided form and the colors
of the prescription product sold by GW and its Affiliates under the
Zantac(R) trademark in the United States or the United Kingdom, as the
case may be, and (iii) to the extent that GW, at its sole discretion,
agrees to license the same to the relevant JV Entity or Entities, such
other trade dress, brand marks, brand names and logos relating thereto
and such unregistered rights as may exist through use.
"Zovirax OTC Product" shall mean, in respect of any country,
any version of a drug product which contains Acyclovir which may be
sold to consumers without a prescription.
"Zovirax Third Party Contracts" shall mean the contracts
set forth on Schedule 1.01(e).
"Zovirax Trademark" shall mean (i) the trademark Zovirax(R)
and the registrations thereof and (ii) other trade dress, brand marks,
brand names and logos relating thereto and unregistered rights as may
exist through use.
<PAGE>
SECTION 1.02. Other Definitions. The following terms are
defined in the Sections indicated:
Term Section
Acquisition Notice 12.03(a)
Affected Party 12.03(a)
Alternate Representative 3.02
Annual Operating Plan 3.13
Change of Control 12.03(a)
Claim 13.01
Closing 2.01
Closing Date 2.01
Comparable Product 5.06(a)(iii)
Continuation 14.03
Coordination Committee 3.09
Deadlock 3.06
Development Committee 3.08
Effective Date 14.02(a)(iv)
Entitled Party 14.02(b)
EU 5.03(e)
Exclusivity 6.01(b)
Existing Products 14.02(e)
Exited Party 15.04
General Manager 4.04
GW Notice 5.05(a)
GW Offer 5.04(b)
GW Relevant Agreements 10.02; 11.03(c)
GW Relevant Country 5.06(a)(i)
GW Rights 10.04
Identified Party 14.02(a)(i)
Indemnified Party 13.04(a)
Indemnifying Party 13.04(a)
JV Election 5.05(b)
JV Equity 12.03(a)(x)
Legal Requirements 9.05
Management Fee 6.02(b)
Marketing Notice 5.06(a)(i)
Mass Media 5.06(a)(ii)
Non-Affected Party 12.03(a)
Occurrence 10.06(b)
150 mg Tablet Product 5.07(c)(v)
Permits 9.05
Permitted Affiliates 5.06(a)
Potential JV Product 8.01
Proceedings 9.04
Ranitidine Expiry Date 5.07(c)(ii)
Ranitidine OTC U.S. Expiry Date 5.07(c)(i)
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Reclassified Product 5.06(c)
Relevant Country 5.05(a)
Relevant Matters 6.06(b)
Relevant Party 14.02(a)(ii)
Relevant Prescription Product 5.06(a)
Relevant Product 5.06(a)
Representative 3.02
Specified Country 5.04(b)(i)
Strategic Plan 6.01(h)
Wholesaling Rights 5.07(a)
W-L Relevant Agreements 9.02; 11.03(c)
Zovirax Expiry Date 5.07(c)(iv)
SECTION 1.03. Statutory Provisions. References in this
Agreement to any provision of any enactment, statute or any other
legislation or to any rules or regulations promulgated thereunder or
other subordinate legislation include any modification, amendment or
re-enactment of that provision for the time being in force.
SECTION 1.04. Schedules. References in this Agreement to any
Schedule shall, unless the context otherwise requires, mean the
relevant Schedule contained in the Supplemental Document Package;
provided that any Schedule identified in the Supplemental Document
Package as being the same as the corresponding schedule to the
Original Agreement need not be redelivered pursuant to this Agreement.
ARTICLE II.
Closing
SECTION 2.01. Closing. The execution of this Agreement, and
the subsequent closing or closings of the transactions contemplated by
this Agreement (each being a "Closing") shall take place at the
offices of either Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth
Avenue, New York, New York or McKenna & Co., Mitre House, 160
Aldersgate Street, London, England or at such other place as the
Parties may agree on a date or dates to be agreed upon by the Parties
and, in the case of such subsequent closing or closings, as promptly
as practicable following the satisfaction or waiver of all of the
conditions set forth in Article XI hereof, but in no event later than
10 Business Days thereafter, or such later date as the Parties may
agree (in respect of each Closing, the "Closing Date").
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SECTION 2.02. Action at the Closing of This Agreement. The
Closing of this Agreement, subject to the simultaneous consummation of
the transactions contemplated by the purchase agreements listed on
Schedule 2.02 and the satisfaction or waiver of the conditions set
forth in Article XI hereof, shall take place immediately following the
execution and delivery of this Agreement whereupon each of the Parties
shall execute and deliver those of the other Closing Documents to
which it is specified to be a party and shall cause each of their
Affiliates and the applicable JV Entities to execute and deliver the
same to the extent that they are specified to be parties thereto.
SECTION 2.03. Subsequent Closings. Subsequent Closings to
establish, pursuant to the terms hereof, additional JV Entities and
the Governing Boards, Development Committees and Coordination
Committees thereof, and to contribute new products to existing JV
Entities, will be held, in accordance with Section 2.01, following
satisfaction of the closing conditions set forth in Article XI hereof
in respect of the relevant JV Entity and/or the product in question.
The Parties agree that the Operative Documents to be executed in
connection with the establishment of any additional JV Entities shall
be substantially in the form of the Operative Documents relating to JV
Entities established in the United States and the United Kingdom, with
such changes as are contemplated hereby or required by local
regulations and circumstances.
ARTICLE III.
Management of JV Entities; Funding
SECTION 3.01. General Manager. Subject to the oversight
responsibilities of each Governing Board set forth in Section 3.03, to
the requirements of local law and the rights reserved to the Parties
pursuant to Section 3.16, the day-to-day operations of each JV Entity
shall be managed by a General Manager in accordance with Section 4.04.
SECTION 3.02. Governing Boards; Membership. The number of
members constituting any Governing Board shall be an even number
determined from time to time by the Parties. Unless otherwise
determined by the Parties, each Governing Board shall consist of eight
members. In respect of each Governing Board, each of the W-L
Participant and GW Participant shall, by written notice to the other,
designate half of the members (being in respect of that JV Entity, the
"Representatives") of that Governing Board and may from time to
time, by like notice, designate
<PAGE>
one or more alternate representatives to act in the absence of any
Representative (being, in respect of that JV Entity, the "Alternate
Representatives"). All such individuals appointed by the W-L
Participant or the GW Participant shall be directors, officers or
senior employees of W-L or GW, as the case may be, or their respective
Affiliates. The participation and acts (including, without
limitation, the execution of any document) by any Alternate
Representative shall, for all purposes, be deemed to be the act of the
Representative for which the Alternate Representative is acting and
references herein to "Representative" shall be construed accordingly.
In the event of the removal, resignation or death of any
Representative or Alternate Representative, the vacancy thereby
created shall be filled, by written notice to the W-L Participant or
the GW Participant, as the case may be, by the participant which
designated the Representative or Alternate Representative so removed,
resigning or deceased.
SECTION 3.03. Responsibility of the Governing Boards. Subject
to the rights reserved to the Parties pursuant to Section 3.16, the
Governing Board of each JV Entity shall be responsible for
overseeing the JV Business and the operations of that JV Entity and
shall, in particular, have sole jurisdiction to approve the following
matters:
(a) all Strategic Plans and the Annual Operating Plan for
the JV Entity and any material changes to such Plans;
(b) material transactions, or a series of related
transactions which taken together would be material, between the
JV Entity and W-L, GW, or any of their respective Affiliates,
other than any transaction specifically contemplated by this
Agreement, the relevant JV Implementation Agreements or any other
Operative Document;
(c) material changes in accounting practices or tax
procedures relating to the JV Entity;
(d) material acquisitions or divestitures by the JV Entity;
(e) appointments and removals of the General Manager and the
other senior officers or managers of the JV Entity and the scope
of their responsibilities;
(f) material capital expenditures, or a series of related
capital expenditures which taken together would be material, by
the JV Entity;
<PAGE>
(g) subject to Section 3.14 and the terms of the relevant JV
Implementation Agreement, all proposals for the continuing
financing of the JV Entities;
(h) any distributions by the JV Entity;
(i) any license to be granted by the JV Entity to a Third
Party or by a Third Party to the JV Entity or the appointment by
the JV Entity of any distributor; and
(j) such other matters as may be mutually agreed between the
Parties or which are specified in any Operative Document to be
subject to such approval.
For purposes of clauses (b), (d) and (f) of this Section 3.03, only
those transactions, acquisitions, divestitures or capital expenditures
involving a purchase price or expenditure, or, in the case of a
license transaction, payments other than those calculated on the basis
of product sales (e.g., up-front fees and milestone payments), in
excess of the lesser of $5 million or 5% of Net Sales of the relevant
JV Entity for the relevant JV Entity's preceding fiscal year shall be
deemed material.
SECTION 3.04. Actions of the Governing Boards. Each
Governing Board shall act only upon the unanimous written consent of
the Representatives without a meeting or upon the majority vote of the
Representatives present at a duly convened meeting thereof at which at
least a quorum of the Representatives is present and in respect of
which at least one Representative appointed by each of the W-L
Participant and the GW Participant voted in favor of the matter under
consideration.
SECTION 3.05. Meetings of the Governing Boards; Notice;
Quorum. Meetings of each Governing Board shall, unless otherwise
determined by it, be held at least quarterly on such dates as the
relevant Governing Board may determine. In addition, any
Representative may call a meeting of the Governing Board of which it
is a member by giving written notice of such meeting (which may be
waived by the Persons who would otherwise receive such notice) to each
of the other Representatives (to the address of the W-L Participant or
the GW Participant appointing such Representatives) at least ten
Business Days prior to the meeting or such lesser period as to which
all the Representatives may agree. Meetings of each Governing Board
may consist of a conference between Representatives who are not all in
one place, but in which each is able (directly or by telephonic
communication) to speak to the others, and to be heard by each of
the others. The presence of at least one more than half of the
<PAGE>
Representatives shall be necessary to constitute a quorum for the
transaction of business at any meeting of a Governing Board.
SECTION 3.06. Deadlock. If any Governing Board is unable to
agree on a course of action at a duly convened meeting at which at
least a quorum of Representatives is present (the "Deadlock"), then
the Chief Executive Officers of W-L and GW shall meet to attempt to
resolve the Deadlock. If the Deadlock is not resolved within 45
calendar days of the Governing Board meeting at which such Deadlock
arose, then, unless the relevant Governing Board otherwise agrees, no
action will be taken with respect to the matter which is the subject
of the Deadlock. In the event that the Deadlock relates to any
proposed Annual Operating Plan, then the relevant JV Business will
continue to be operated on the basis of the Annual Operating Plan last
approved by the relevant Governing Board.
SECTION 3.07. Subcommittees of the Governing Boards. Each
Governing Board may establish one or more subcommittees to advise it
on such specific projects or matters as shall be requested by the
relevant Governing Board or to act on such projects or matters as
shall be delegated by action of the relevant Governing Board to such
subcommittees; provided, however, that representation of each of the
W-L Participant and the GW Participant on each subcommittee shall be
equal. Subcommittees shall conduct their business on such terms as the
relevant Governing Board may determine.
SECTION 3.08. Development Committee. 1. The number of members
constituting any Development Committee shall be an even number as
determined, with respect to a Development Committee being formed prior
to the establishment of the related JV Entity, by W-L and GW, and with
respect to a Development Committee being formed for an existing JV
Entity, by the Governing Board of such JV Entity. Unless otherwise so
determined, each Development Committee shall consist of ten members.
In respect of each Development Committee, the W-L Participant and the
GW Participant (or W-L and GW, with respect to a Development Committee
being formed prior to the establishment of the related JV Entity)
shall, by written notice to the other, designate half of the members
of that committee. All such individuals appointed by W-L or GW or
their respective Affiliates shall be directors, officers or senior
employees of W-L or GW, as the case may be, or their respective
Affiliates. In the event of the removal, resignation or death of any
member, the vacancy thereby created shall be filled, by written notice
to W-L or GW or the W-L Participant or the GW Participant, as the case
may be, by the Party or participant who designated the member so
removed,
<PAGE>
resigning or deceased. Each Development Committee shall conduct its
business as it sees fit and shall report to the relevant Governing
Board on a regular basis or as that Governing Board may direct. Each
Development Committee shall have only those powers to bind the
relevant JV Entity as the Governing Board of that JV Entity may grant
it, and such Governing Board shall have absolute discretion as to
whether to accept and follow any reports or recommendations submitted
by such Development Committee.
(b) At reasonable intervals, and in any event at least once
in each calendar year, the Development Committee for each JV Entity
shall meet to discuss and identify potential OTC Switch Products or
Ranitidine Products for such JV Entity and shall prepare and present
to the relevant Governing Board a report thereon, and the Parties
shall consult and cooperate fully with the Development Committee in
respect of such process; provided, however, that GW shall not be
required to offer any OTC Switch Product or Ranitidine Product to any
JV Entity except pursuant to the provisions of Article V. Either W-L
or GW may suggest OTC Switch Product or Ranitidine Product development
work to the Development Committee for any JV Entity, including
formulations, line extensions and new indications. GW shall have
primary responsibility for the preparation of development plans which
will cover the cost, feasibility and timing of such development work,
which development plans will be reviewed and agreed by such
Development Committee and approved by the Governing Board.
SECTION 3.09. Coordination Committees. The Parties have
established, in the case of existing JV Entities, or shall establish,
in contemplation of the establishment of new JV Entities, a committee
to coordinate marketing and related activities in connection with
the business of such JV Entity (each a "Coordination Committee"). The
number of members constituting any Coordination Committee shall be an
even number as determined, with respect to a Coordination Committee
being formed prior to the establishment of the related JV Entity, by
W-L and GW, and with respect to a Coordination Committee being formed
for an existing JV Entity, by the Governing Board of such JV Entity.
Unless otherwise so determined, each Coordination Committee shall
consist of eight members. In respect of each Coordination Committee,
the W-L Participant and the GW Participant (or W-L and GW, with
respect to a Coordination Committee being formed prior to the
establishment of the related JV entity) shall, by written notice to
the other, designate half of the members of that committee. All such
individuals appointed by W-L or GW or their respective Affiliates
shall be directors, officers or senior employees of W-L or GW, as the
case may be, or their respective Affiliates. In the event of the
removal, resignation
<PAGE>
or death of any member, the vacancy thereby created shall be filled,
by written notice to W-L or GW or the W-L Participant or the GW
Participant, as the case may be, by the Party or participant who
designated the member so removed, resigning or deceased; provided that
members of the Coordination Committee and their alternates shall have
appropriate management responsibility. The General Manager of each JV
Entity shall be one of the members of the Coordination Committee
appointed by W-L or the W-L Participant, as the case may be, and he or
she shall chair meetings of the Coordination Committee but shall not
be entitled to a second or casting vote in the case of equality of
votes. In the event of the removal or resignation of such individual
as General Manager he or she shall automatically be deemed to have
been removed from, or to have resigned from, the Coordination
Committee, without prejudice to W-L's right to reappoint such
individual as one of the other members appointed by it to the
Coordination Committee. The provisions relating to the appointment and
participation by alternate representatives, the procedure for taking
decisions and actions, the frequency of meetings, notice of meetings,
the quorum required for a meeting and subcommittees set forth in this
Article III in relation to the Governing Board shall apply equally to
the Coordination Committee. Each Coordination Committee shall conduct
its business as it sees fit and shall report to the relevant Governing
Board on a regular basis or as that Governing Board may direct. Each
Coordination Committee shall have only those powers to bind the
relevant JV Entity as the Governing Board of that JV Entity may grant
it, and such Governing Board shall have absolute discretion as to
whether to accept and follow any reports or recommendations submitted
by the Coordination Committee.
SECTION 3.10. Removal of Representatives. W-L and GW, or the
W-L Participant and the GW Participant, as the case may be, may at any
time, by written notice to the other, remove (with or without cause)
one or more of the members of any Governing Board, any subcommittee
thereof, any Development Committee or any Coordination Committee
designated by it and may, by like notice, designate new members to
serve in their place.
SECTION 3.11. No Remuneration. Unless the Parties otherwise
agree, no Person shall be entitled to any fee, remuneration or
compensation from any JV Entity in connection with their serving as a
member of any Governing Board, any subcommittee thereof, any
Development Committee or any Coordination Committee.
SECTION 3.12. Other Positions of Representatives. Any Person
may act in one or more of the capacities of Representative,
Alternate Representative, member of any subcommittee, any
<PAGE>
Development Committee or any Coordination Committee, or officer,
director, manager or employee of any JV Entity or any Party or
any Affiliate of any Party, notwithstanding that they act in any
other such capacity.
SECTION 3.13. Annual Operating Plan. The W-L Participant
in each JV Entity shall cause to be submitted to the Governing Board
of that JV Entity, not later than December 1 (or such other date as
the Parties may agree) in each year, for review and approval an annual
operating plan for the forthcoming calendar year covering, among other
things, projections and budgets with respect to sales, operating and
capital expenditures, financing, development and marketing (in respect
of each JV Entity, as so reviewed and agreed, the "Annual Operating
Plan"). The Annual Operating Plans shall be based on the Strategic
Plans and shall include marketing and development sections that have
been approved by the Coordination Committee and the Development
Committee pursuant to Sections 6.02(a) and 3.08(b), respectively.
SECTION 3.14. Funding. W-L and GW hereby agree to
contribute, or to cause the W-L Participant or the GW Participant,
as the case may be, to contribute, in accordance with and subject to
sound commercial principles, equally (or as the Parties or such
participants may otherwise agree), such funds as may be necessary for
the conduct of the relevant JV Business whether for working capital or
capital expenditures. All such funds shall, unless the Parties
otherwise agree, be contributed to the relevant JV Entity as
additional equity.
SECTION 3.15. Deliberations. The deliberations of each
Governing Board, each Development Committee, each Coordination
Committee and each subcommittee thereof shall not extend to any
business activity of the Parties other than as may be necessary to
perform their responsibilities in connection with the relevant JV
Business.
SECTION 3.16. Reserved Matters. Except as otherwise
specifically provided in this Agreement or the other Operative
Documents, and without prejudice to any other such provision requiring
the consent or agreement of both Parties, the following matters shall
be subject to the agreement of both Parties:
(a) expansion of the JV Business into any new country;
(b) all prices for the sale of products between, or the
provision of services by either of, the Parties (or their
Affiliates), on the one hand, and any JV Entity, on
<PAGE>
the other hand, or between any two or more JV Entities, with
respect to the JV Businesses; and
(c) any license to be granted by a JV Entity to another JV
Entity.
SECTION 3.17. Exports. GW shall not, and shall not permit
any of its Affiliates to, package any products in packaging which is
confusingly similar to the packaging used by the JV Entities for
Ranitidine Products or OTC Switch Products and no JV Entity shall
package any products in packaging which is confusingly similar to
the packaging used by GW or any of its Affiliates for products that
it is otherwise permitted to market pursuant to this Agreement;
provided that where such packaging is used by GW or its Affiliates or
a JV Entity, as the case may be, at the date hereof, this restriction
shall apply only to any change to such packaging after the date of
this Agreement which increases or is likely to increase the risk of
confusion; provided, further, that this restriction shall not apply
with respect to packaging that GW and its Affiliates are permitted to
use pursuant to Section 6.08(b).
ARTICLE IV.
Operations; JV Entities
SECTION 4.01. General. The businesses contemplated by this
Agreement and by the other Operative Documents shall be implemented by
JV Entities to be established from time to time by the Parties in
accordance with this Agreement.
SECTION 4.02. Establishment of Other JV Entities. Following
(i) acceptance by W-L, on behalf of the relevant JV Entity (formed or
to be formed), of a GW Offer pursuant to Section 5.04, or (ii) the
making by W-L of a JV Election pursuant to Section 5.05(b), the
Parties shall, if necessary, promptly establish a JV Entity in the
relevant Non-U.S. Country in order to conduct the JV Business which is
the subject of such acceptance or election in accordance with this
Article IV (unless, taking into account all relevant matters including
those set forth in Section 4.03(a), the Parties agree that a JV Entity
in another country should conduct such business).
SECTION 4.03. Form and Structure of JV Entities. The Parties
agree that:
<PAGE>
(a) the nature of the entity constituting each JV Entity
shall be determined by the Parties taking into consideration
relevant tax, accounting and legal issues;
(b) subject to Article XII, the equity of the U.S.
Partnership shall be owned by W-L and GW OTC in the proportions
provided in the Partnership Agreement;
(c) subject to Article XII, the equity of each other JV
Entity shall be owned equally by W-L (or such of its direct or
indirect wholly owned Affiliates as W-L may nominate) and GW
(or such of its direct or indirect wholly owned Affiliates as GW
may nominate) and, subject to such principle, the Parties shall
use their reasonable efforts to organize each such entity in such
manner as will permit it to be classified for U.S. Federal income
tax purposes as a partnership or otherwise permit it to avoid
being classified as an "uncontrolled Section 902 corporation"
with respect to W-L within the meaning of Section 904(d)(2)(E)(i)
of the Internal Revenue Code of 1986, as amended; provided,
however, that such action shall not, in GW's reasonable
judgment, have an adverse financial effect on GW or any of its
Affiliates;
(d) the Operating Profit and Loss with respect to each JV
Entity shall be shared equally by the Parties, and, to the extent
necessary or appropriate to achieve that objective, adjustments
shall be made to the interests of the W-L Participant and the GW
Participant in the profit or loss of the JV Entity so as to take
into account any amounts in excess of Fully Allocated Cost
realized by either Party (or any of its Affiliates) from the
supply of goods or services to, or use of property by, the JV
Entity, other than the charges provided for in Sections 5.07,
6.01, 6.02 and 6.03, and after offsetting such amounts by any
fees, commissions, allowances or other payments made pursuant to
Section 6.04 in respect of such supply of goods or services, or
use of property, by such Party (or any of its Affiliates). In
addition, to the extent necessary to fully achieve this
objective, such adjustments as are necessary shall be made to
such amounts, fees, commissions, allowances or other payments;
(e) the amounts to be charged by the Parties and their
Affiliates to each JV Entity in respect of management fees and
royalty payments shall be determined in accordance with Sections
5.07(c), 6.02 and 6.03; and
<PAGE>
(f) the membership of all statutory or legal governing
bodies of each JV Entity shall be kept to the minimum permitted
by all applicable laws (or as the relevant Governing Board may
otherwise determine); provided, however, that the relevant W-L
Participant and GW Participant shall be equally represented on
each such governing body.
SECTION 4.04. Management of JV Entities. The W-L Participant
shall nominate, subject to the approval of the relevant Governing
Board pursuant to Section 3.03(e), a General Manager of each JV Entity
who will have day-to-day operational responsibility for such JV Entity
(each a "General Manager").
SECTION 4.05. Operations To Be Conducted in Accordance with
Annual Operating Plan and Direction of Governing Board. The day-to-day
operations of each JV Entity shall be conducted under the direction of
its General Manager in accordance with the Annual Operating Plan and
otherwise in accordance with the directions of the relevant Governing
Board. For the avoidance of doubt, the Parties agree that none of the
actions and matters referred to in Sections 3.03 and 3.16 shall be
taken without the prior consent of the relevant Governing Board or the
Parties, as the case may be, and the Parties shall ensure that the
General Manager of each JV Entity is fully aware of the actions which
require such prior consent and that his or her authority does not
extend to such transactions or matters and shall ensure that the
General Manager does not take any such actions.
SECTION 4.06. Litigation. Except as provided in the other
Operative Documents, the management of any litigation involving a JV
Entity, including, without limitation, decisions relating to the
institution, compromise or settlement of such litigation, shall be the
responsibility of the JV Entity. In managing such litigation, the JV
Entity shall afford GW and WL equal opportunity to give advice and
counsel concerning any decision relating to such litigation and such
decisions shall be made based on the consensus reached by GW and WL.
Any dispute between GW and WL with respect to decisions relating to
such litigation shall be resolved by the Governing Board of the JV
Entity. Each of the Parties and their Affiliates shall fully cooperate
with respect to any litigation involving any JV Entity, including, if
required in order to bring an action, the furnishing of a power of
attorney or, to the extent possible, consenting to become a party.
Subject to the other provisions of this Section 4.06, each of the
Parties shall have the right to have separate counsel and to
participate in any litigation involving any JV Entity. The relevant JV
Entity shall bear all costs relating to any litigation affecting the
interest or rights of a
<PAGE>
JV Entity, except that the fees and expenses of any separate counsel
retained by a Party shall be paid for by such Party.
ARTICLE V.
JV Products
SECTION 5.01. General. Except as provided by this Article V,
GW and its Affiliates shall be free to develop, manufacture, market,
sell or distribute any products in any country.
SECTION 5.02. Ranitidine Products in the United States. (a)
The U.S. Partnership shall continue developing, manufacturing,
marketing, selling and distributing Ranitidine OTC Products in the
United States.
(b) GW may, in its sole discretion, from time to time offer
to grant to W-L on behalf of the U.S. Partnership the marketing,
selling and distribution rights (and, if the Parties agree, the
development and manufacturing rights) with respect to Other Ranitidine
Products in the United States. In the event that GW decides, in its
sole discretion, to offer to the U.S. Partnership the rights to any
such product, GW shall offer, by written notice to W-L, to grant to
the U.S. Partnership the exclusive right (subject to Section 5.06(a))
to market, sell and distribute such product in the United States (and,
if the Parties agree, to develop and manufacture such product
therefor) and to grant the U.S. Partnership a license in accordance
with Section 5.07(a) and (b) in respect thereof, in each case in
consideration for the royalties payable in respect of the license to
be negotiated in accordance with Section 5.07(c) and it shall be a
term of such offer that W-L shall be entitled to provide the U.S.
Partnership with services, and to be reimbursed therefor, in each
case in accordance with Section 6.02.
(c) Following the making of an offer in accordance with
Section 5.02(b), W-L shall as soon as reasonably practicable and in
any event within six months either accept or decline such offer on
behalf of the U.S. Partnership by written notice to GW, and:
(i) GW shall, during such six-month period, provide W-L with
such further information relating to the matters which are the
subject of such offer, including access to all GW Regulatory
Documentation relating to the relevant product which is the
subject of such offer and copies thereof, each
<PAGE>
as W-L may reasonably request and shall update such information
promptly from time to time;
(ii) in the event of such offer being accepted by W-L, W-L,
on behalf of the U.S. Partnership, and GW shall use their best
efforts to negotiate and execute as soon as reasonably
practicable and in any event within three months the relevant
Operative Documents (to be in accordance with the principles
referred to in Section 5.04(b), Article VI and otherwise as the
Parties may agree); and
(iii) in the event of such offer being declined by W-L, W-L,
on behalf of the U.S. Partnership, shall at the time the offer is
declined provide GW with a full statement of reasons for
declining such offer and shall afford GW the opportunity of
discussing fully such reasons for refusal.
(d) Except as provided by Section 5.06(a), GW shall not, and
shall ensure that its Affiliates do not, market, sell or distribute or
grant any license or other similar right to any Third Party to market,
sell or distribute any Ranitidine Product in the United States.
SECTION 5.03. Zovirax OTC Products in Cream Form. (a) In the
Existing Zovirax Countries, the JV Entities that have been formed in
such countries or W-L, on behalf of a JV Entity, have and shall
continue to have the exclusive right, subject to the Zovirax Third
Party Contracts, to market, sell and distribute Zovirax OTC Products
in cream form and has been or will be granted a license incorporating
the provisions of Section 5.07(a) and (b) in respect thereof. The
royalties payable in respect of the license shall be equivalent to the
royalties payable in accordance with Sections 5.07(a) and 5.07(c) and
W-L is or shall be entitled to provide the relevant JV Entity or
Entities with services, and to be reimbursed therefor, in each case in
accordance with Section 6.02.
(b) In the event that a product in cream form containing
Acyclovir is given an OTC Classification in any Existing Zovirax
Country, W-L and GW shall use their best efforts to negotiate and
execute as soon as reasonably practicable, and in any event within
three months, the relevant Operative Documents (to be in accordance
with this Article V and Article VI and otherwise as the Parties may
agree).
(c) Except as provided in Section 5.06(a) and subject to the
Zovirax Third Party Contracts, GW shall not, and shall ensure that its
Affiliates do not, market, sell or distribute or
<PAGE>
grant any license or other similar right to any Third Party to market,
sell or distribute any Zovirax OTC Products in cream form in the
Existing Zovirax Countries.
SECTION 5.04. Other Products and/or Other Countries. (a)
General. GW may, in its sole discretion, from time to time offer to
W-L to grant to a JV Entity or Entities (formed or to be formed) in a
particular country the marketing, selling and distribution rights
(and, if the Parties agree, the development and manufacturing rights)
with respect to a particular Ranitidine Product in a Non-U.S. Country
or any OTC Switch Product (other than Zovirax OTC Products in cream
form in the Existing Zovirax Countries).
(b) The GW Offer. If GW desires to grant to any Third Party
any right to market, sell or distribute:
(i) any Ranitidine Product in any Non-U.S. Country other
than the countries set forth on Schedule 5.04(b)(i) (the
"Specified Countries") or under the terms, as at the date of this
Agreement, of the agreements set forth on Schedule 5.04(d); or
(ii) any OTC Switch Product in any country other than the
Specified Countries (other than Zovirax OTC Products in cream
form in the Existing Zovirax Countries);
GW shall offer, by written notice to W-L (the "GW Offer"), to grant to
a JV Entity or Entities (formed or to be formed) the exclusive right
(subject to Section 5.06) to market, sell and distribute such product
in the relevant country (and, if the Parties agree, to develop and
manufacture such product therefor) and to grant such JV Entity or
Entities a license in accordance with Section 5.07(a) and (b) in
respect thereof, in each case in consideration for the royalties
payable in respect of the license to be negotiated in accordance with
Sections 5.07(c) and it shall be a term of such offer that W-L shall
be entitled to provide the relevant JV Entity or Entities with
services, and to be reimbursed therefor, in each case in accordance
with Section 6.02 or 6.03, as applicable; provided, however, that no
GW Offer shall be required to be made, and the restrictions in
Sections 5.04(d) and 5.05 hereof shall not apply, if:
(x) at the time that a GW Offer would be required to be made
(or, if Section 5.05(a)(ii) is applicable, at the time that a GW
Notice would be required to be made) W-L or any of its Affiliates
or any Third Party on their behalf (other than pursuant to a
license under which W-L or its
<PAGE>
Affiliates are only entitled to receive royalties and other- wise
only have rights consistent with passive license arrangements)
are developing, manufacturing, marketing, selling or
distributing (or have entered into any agreement, other than such
a license, to do the same with respect to) any non-prescription
product in such country which would in the reasonable opinion of
GW directly compete with the Ranitidine Product or OTC Switch
Product which is the subject of the GW Offer or the GW Notice, as
the case may be, it being agreed by the Parties that a
non-prescription product will directly compete with a Ranitidine
OTC Product only if it contains an H2 antagonist or a proton pump
inhibitor and, except as aforesaid, if the Parties cannot agree
whether any such non-prescription product will directly compete
with a Ranitidine Product or an OTC Switch Product the Parties
shall seek to resolve the issue by negotiation; and
(y) GW shall have notified W-L in writing that a GW Offer
(or, if Section 5.05(a)(ii) is applicable, a GW Notice) would
be made but for the terms of paragraph (x) of this proviso and
W-L shall not have undertaken in writing to GW, within three
months of receipt of such written notice, to terminate the
development, manufacturing, marketing, sale or distribution of
any such competing product prior to the Launch Date for the
relevant Ranitidine Product or OTC Switch Product.
(c) Acceptance of GW Offer. Following the making of a GW
Offer, W-L shall as soon as reasonably practicable, and in any event
within six months, either accept or decline such offer on behalf of
the relevant JV Entity or Entities by written notice to GW, and:
(i) GW shall, during such six-month period, provide W-L with
such further information relating to the matters which are the
subject of the GW Offer, including access to all GW Regulatory
Documentation relating to the relevant product which is the
subject of the GW Offer and copies thereof, each as W-L may
reasonably request and shall update such information promptly
from time to time; and
(ii) in the event of the GW Offer being accepted by W-L, W-L
and GW shall use their best efforts to negotiate and execute as
soon as reasonably practicable, and in any event within three
months, the relevant Operative Documents (to be in accordance
with the principles referred to in
<PAGE>
Section 5.04(b), Article VI and otherwise as the Parties may
agree); or
(iii) in the event of the GW Offer being declined, or not
being accepted by W-L within six months of the GW Offer, GW or
its Affiliates shall then, and only then, be entitled to grant a
license, on terms taken as a whole no more favorable than those
last offered to W-L pursuant to this Section 5.04, to a Third
Party to develop, manufacture, market, sell or distribute the
product which is the subject of the GW Offer in the country
referred to therein.
(d) Restrictions on GW and GW Affiliates. Except as provided
in Section 5.06 or under the terms, as at the date of this Agreement,
of the agreements set forth on Schedule 5.04(d), GW shall not and
shall ensure that its Affiliates do not themselves market, sell or
distribute without the prior written consent of W-L, and, except as
further provided in Section 5.04(c)(iii) and Section 5.05, GW shall
not and shall ensure that its Affiliates do not grant any license or
other similar right to any Third Party to market, sell or distribute:
(i) any Ranitidine Product in any Non-U.S. Country other
than the Specified Countries; or
(ii) any OTC Switch Product in any country other than the
Specified Countries (but not Zovirax OTC Products in cream form
in the Existing Zovirax Countries).
(e) Certain Offers Relating to the European Union. In the
event (i) a Specified Country accedes to the Treaty (the "Treaty")
establishing the European Union (the "EU") or (ii) rules substantially
equivalent to the rules concerning the free movement of goods
contained in Articles 9 to 36 and 95 of the Treaty come into full
force and effect as regards general trade, including pharmaceuticals,
between the EU and any Specified Country, and consumer healthcare
products manufactured in or manufactured for sale in such Specified
Country enjoy Effective Free Movement rights, such country shall no
longer be deemed a Specified Country and GW shall offer to W-L on
behalf of a JV Entity (formed or to be formed) the rights in such
country with respect to Ranitidine Products and OTC Switch Products
applicable to countries other than Specified Countries (other than
Zovirax OTC Products in cream form in the Existing Zovirax Countries)
in accordance with the procedures set forth above in this Section
5.04. With respect to any Ranitidine Products and OTC Switch Products
previously marketed by GW in such country, the Parties shall negotiate
in good faith the amount of reimbursement, if
<PAGE>
any, to GW for certain past development, launch and marketing expenses
incurred by GW with respect to such products and shall consider the
possible utilization of any existing sales force of GW available for
marketing such products. If the parties cannot agree on whether
reimbursement is due or, if due, on the amount of such reimbursement,
such issues will be decided pursuant to an independent arbitration
process that is consistent with Section 15.03. For the avoidance of
doubt, the rules referred to in clause (ii) of the first sentence of
this Section 5.04(e) shall not be considered to have come into full
force and effect until the expiration of any transitional period
provided for the elimination of all custom duties and quantitative
restrictions or measures of equivalent effect between the EU and the
relevant Specified Country. For the purpose of this Section 5.04(e)
consumer healthcare products manufactured in or manufactured for sale
in a Specified Country shall be considered to enjoy Effective Free
Movement Rights when the requirements and procedures for the grant by
an EU member state of a marketing authorization for their importation
and sale in that EU member state are no more onerous than such as
would have applied if such consumer healthcare products had been
manufactured in another EU member state.
SECTION 5.05. Right of First Refusal. (a) The GW Notice. If:
(i) following the making of a GW Offer which is not accepted
by W-L pursuant to Section 5.04(c), GW desires to grant pursuant
to Section 5.04(c)(iii) to any Third Party the right to market,
sell or distribute the products which are the subject of the GW
Offer in the country referred to in the GW Offer on terms taken
as a whole more favorable than those last offered to W-L pursuant
to Section 5.04; or
(ii) GW desires to grant a license to any Third Party to
market, sell or distribute any Ranitidine Product or OTC Switch
Product in any Specified Country (other than Zovirax OTC Products
in cream form in the Existing Zovirax Countries); provided,
however, that the provisions of this Section 5.05(a)(ii) shall
not, for the avoidance of doubt, include any wholesale agreement
or other similar customer arrangement typically entered into in
such country by pharmaceutical companies and third parties who
fulfill a wholesale function ("Wholesaling Rights");
GW shall first give written notice (the "GW Notice") to W-L specifying
the relevant country ("Relevant Country"), a description of the
products intended to be marketed in such country and
<PAGE>
in respect of which such license is intended to be granted and the
principal terms on which such license is proposed to be granted and GW
shall, and shall ensure that its Affiliates, only grant such a license
if permitted to do so by Section 5.05(d).
(b) The JV Election. W-L shall as soon as reasonably
practicable, and in any event within one month of receipt of a GW
Notice (if the GW Notice is given pursuant to Section 5.05(a)(i)) or
three months of receipt of a GW Notice (if the GW Notice is given
pursuant to Section 5.05(a)(ii)), by notice in writing to GW, either
elect that the marketing, sale and distribution of the products
specified in the GW Notice in the Relevant Country shall be
exclusively conducted by a JV Entity (the "JV Election") or waive its
right to make such an election. Following the making of a JV Election,
the Parties shall use their best efforts to negotiate and execute as
soon as reasonably practicable, and in any event within three months,
Operative Documents having the same principal terms as those proposed
in the GW Notice and otherwise as W-L and GW shall agree.
(c) Information. Following the giving of a GW Notice, GW
shall, during the period in which W-L may make a JV Election pursuant
to Section 5.05(b) but has not done so or waived its right to do so,
provide W-L with such further information relating to the matters
required to be included therein, including access to all GW Regulatory
Documentation relating to the relevant product which is the subject
of the GW Notice and copies thereof, each as W-L may reasonably
request and shall update such information promptly from time to time.
(d) GW's Rights If No JV Election. If W-L shall waive its
right to make a JV Election in accordance with Section 5.05(b) or, in
any event, if following the expiry of the one or three month period
referred to in Section 5.05(b) W-L shall not have made a JV Election,
GW and its Affiliates shall then, and only then, be free to license
(on terms taken as a whole no more favorable than those set forth in
the GW Notice) the marketing, sale and distribution rights to the
products specified in the GW Notice in the Relevant Country; provided,
however, that such marketing, selling or distribution commences within
two years of (x) such waiver or (y) the expiry of such one or three
month period, as the case may be, or such longer period as may be
necessary solely because of any regulatory delays not attributable
to any omission, negligence or otherwise due to a lack of reasonable
diligence by GW or the proposed licensee.
SECTION 5.06. GW Marketing Rights. (a) Notwithstanding
anything in this Article V to the contrary, GW, any direct or
<PAGE>
indirect wholly owned Affiliate of GW, any Affiliate set forth on
Schedule 5.06(a) hereof and any future Affiliate of GW which is not a
wholly owned Affiliate of GW and which has not been established and
is not being used for the purpose of circumventing the restrictions of
this Agreement on the grant of licenses by GW and its Affiliates to
Third Parties (all such Affiliates being "Permitted Affiliates") shall
each be free to itself market, sell or distribute in the United States
or in any Non-U.S. Country, a version of a drug product (the "Relevant
Product"), other than in the United States a product in oral form
containing Acyclovir, having the same indications or dosage strength
as a then existing Prescription Product of GW or its Affiliates
marketed in the relevant country (the "Relevant Prescription Product")
if the Relevant Product is given an OTC Classification in the relevant
country; provided, however, that:
(i) GW shall first have given written notice (a "Marketing
Notice") to W-L of its intention so to market, sell or distribute
the Relevant Product, giving details of the Relevant Product
including its indications, dosage strength, brand names, trade
names and trademarks and the relevant country (the "GW Relevant
Country") not less than 90 calendar days prior to the
commencement of such marketing, selling or distribution;
(ii) such marketing, sale or distribution shall not involve
the use of Mass Media directed to consumers unless, in the GW
Relevant Country, use of Mass Media with respect to the Relevant
Prescription Product has been lawfully carried out by GW or its
Affiliates prior to the Relevant Product being given an OTC
Classification in that country and such use of Mass Media was not
carried out with the purpose of avoiding the restrictions of this
paragraph (ii); for the purposes of this Section 5.06(a)(ii) and
Section 5.06(b), "Mass Media" shall mean television, radio,
outdoor advertising, direct mail or lay newspapers, magazines or
journals;
(iii) in the event that a JV Entity has begun developing a
Ranitidine Product (if the Relevant Product is a Ranitidine
Product) or (in any other case) a product containing the same
principal active ingredients as the Relevant Product
("Comparable Products") for marketing, sale or distribution in
the GW Relevant Country but has not begun marketing, selling or
distributing the Comparable Product in such country:
<PAGE>
(A) W-L and GW shall discuss in good faith the
viability of developing or continuing to develop a
Ranitidine Product or a Comparable Product, as the case may
be, for marketing, sale or distribution by a JV Entity in
the GW Relevant Country and/or the establishment of a
co-promotion or co-marketing arrangement with respect to the
marketing, sale or distribution of the Relevant Product in
the GW Relevant Country,
(B) if the Parties fail to agree on satisfactory
arrangements for such development of a Ranitidine Product or
a Comparable Product or such a co-promotion or co-marketing
arrangement with respect to the Relevant Product, GW shall
first have reimbursed, on an after-tax basis, all relevant
JV Entities and/or W-L and the W-L Participant (with the
principle being that W-L and the W-L Participant be made
whole) for all costs (including reimbursement costs)
expended or incurred by them or for which they are, or will
with the passage of time become, liable in connection with
the development of Ranitidine Products or Comparable
Products, as the case may be, specifically for marketing,
sale or distribution in the GW Relevant Country, and
(C) immediately following the reimbursement of
development costs pursuant to clause (B) above, any license
granted to any JV Entity in respect of such product shall
terminate without further action of the Parties;
(iv) in the event that a JV Entity shall have commenced
marketing, selling or distributing Ranitidine Products (if the
Relevant Product is a Ranitidine Product) or a Comparable
Product (in any other case) in the GW Relevant Country, and
without prejudice to GW's and its Permitted Affiliates' rights to
market, sell or distribute the Relevant Product in the Relevant
Country, W-L and GW shall discuss and negotiate in good faith
arrangements with respect to the marketing, sale and distribution
of the Relevant Product and the relevant Ranitidine Product or
the Comparable Product, as the case may be, in the GW Relevant
Country including the establishment of co-promotion or
co-marketing arrangements with respect to such products; and
(v) in the event that a JV Entity shall have commenced
marketing, selling or distributing Ranitidine Products (if the
Relevant Product is a Ranitidine Product) or Comparable
<PAGE>
Products (in any other case) in the Relevant Country, the
Relevant Product shall only be marketed, sold or distributed (by
GW or its Permitted Affiliates) under trademarks, trade dress,
brand marks, brand names and logos being used by GW or its
Affiliates in respect of their prescription business in the
Relevant Country as it relates to the Relevant Prescription
Product or such other trademarks, trade dress, brand marks, brand
names or logos which are different than, and not confusingly
similar to, those granted to the JV Entity.
(b) In the event that GW intends that it or any Permitted
Affiliate will market, sell or distribute any Relevant Product
pursuant to Section 5.06(a) and such product would be suitable for
promotion by Mass Media but is not permitted to be so promoted by
Section 5.06(a)(ii), W-L and GW shall discuss in good faith the
desirability of establishing a co-promotion or co-marketing
arrangement in respect of that product.
(c) Notwithstanding anything herein to the contrary but
subject to Section 5.06(d), GW, any direct or indirect wholly owned
Affiliate of GW, any Affiliate set forth on Schedule 5.06(a) hereto
and any future Affiliate of GW which is not a wholly owned Affiliate
of GW and which has not been established and is not being used for the
purpose of circumventing the restrictions of this Agreement on the
grant of licenses by GW and its Affiliates to Third Parties shall not
be required to offer to a JV Entity any Prescription Product of GW or
any such Affiliate which is given an OTC Classification solely as a
result of government initiated action in a country other than the
United States, Canada or Mexico (a "Reclassified Product") and which
meets the following criteria and GW or such Affiliates will be
allowed, in such a country, to itself market, sell and distribute such
Reclassified Product using Mass Media as defined in Section
5.06(a)(ii) without any restriction on such use of Mass Media by GW,
if such Reclassified Product:
(i) contains the same principal active ingredient as the
Prescription Product;
(ii) has the same dosage strength as the Prescription
Product;
(iii) has one or more indications that are the same as one or
more indications of the Prescription Product; and
(iv) is limited by its applicable regulation for sale solely
to medical or pharmacy outlets in such country; for
<PAGE>
purposes of this Section 5.06(c), "medical or pharmacy outlets"
shall mean any outlets where consumers purchase products
distributed under the responsibility of a medically or
pharmaceutically qualified person.
GW and its Affiliates shall be required to offer to a JV
Entity a Reclassified Product whose sale is not limited by its
applicable regulation solely to medical or pharmacy outlets in
accordance with the terms otherwise set forth in this Agreement.
(d) Notwithstanding the above Section 5.06(c), upon receipt
of an OTC Classification for a cream form of a Zovirax OTC Product, GW
shall be required to offer such Zovirax OTC Product to a JV Entity on
the same terms as rights with respect to Zovirax OTC Products in cream
form are granted pursuant to Section 5.03.
(e) If, in a circumstance described in paragraph (c) above,
the Reclassified Product contains the same principal active ingredient
and is to be marketed under the same or a substantially similar
trademark as a JV Product which then has received Regulatory Approval
in the country in question, GW will involve the JV Entity in the
marketing of the Reclassified Product and will negotiate in good faith
to establish an appropriate financial return relating to the
services being performed by the JV Entity. If the parties cannot agree
on terms, the terms will be decided pursuant to an independent
arbitration process that is consistent with Section 15.03.
(f) If, in a circumstance described in paragraph (c) above,
a JV Entity has not received Regulatory Approval to market a product
with the same principal active ingredient as the Reclassified Product
and GW elects not to offer the Reclassified Product to such JV Entity,
GW shall offer the JV Entity the opportunity to co-market the
Reclassified Product under a different trademark and trade dress,
which trade dress may in appropriate circumstances include the color
and shape of the Reclassified Product. The parties shall negotiate the
terms of such co-marketing arrangements in good faith, recognizing
the need for both parties to receive an adequate return with respect
to such co-marketing arrangement.
(g) For the avoidance of doubt, in a circumstance described
in paragraph (c) above, GW shall have the option of complying either
with paragraphs (a) and (b) above or with paragraphs (c) through (f)
above.
<PAGE>
(h) For the avoidance of doubt, the provisions of this
Section 5.06 do not in any way apply to or restrict the marketing,
selling or distribution of the Relevant Product by GW or any of its
Affiliates on or after the date of this Agreement in any Specified
Country (i) except to the extent that a JV Entity is developing,
marketing, selling or distributing an OTC version of the Relevant
Prescription Product in any such Specified Country and (ii) except for
the marketing, selling or distribution by GW or any of its Affiliates
of Zovirax OTC Products in cream form in the Existing Zovirax
Countries.
SECTION 5.07. Licenses and Services. (a) Grant of License.
In respect of each country where any products are to be developed,
manufactured, marketed, sold or distributed by a JV Entity, GW shall
promptly on request by W-L grant, or cause its Affiliates to grant, to
the relevant JV Entity or JV Entities an exclusive license (even as to
GW and its Affiliates, but in any event subject to Section 5.06 and
subject to the rights, if any, granted by the terms, as at the date
hereof, of the Zovirax Third Party Contracts and the Agreements set
forth on Schedule 5.04(d) and Wholesaling Rights that exist prior to
such time rights to such product are offered to a JV Entity in
accordance with this Agreement):
(i) to use, in the non-prescription health care market,
all patent and other intellectual property rights owned by GW or
any of its Affiliates as may be necessary for the development,
manufacture, marketing, sale and distribution of such products by
or on behalf of the relevant JV Entity or JV Entities; and
(ii) to use the heritage trademark, such as, in the case of
a Ranitidine Product, the Zantac Trademark (or, if the Zantac
Trademark is not used in that country, the prescription
trademark so used in that country) in connection with products in
the non-prescription health care market in the relevant country;
provided, however, that GW shall not be required so to grant or
to cause the grant of an exclusive license to use in the
non-prescription health care market the heritage trademark (or
such other prescription trademark) in respect of any Non-U.S.
Country if it can demonstrate, to the reasonable satisfaction of
W-L on behalf of the relevant JV Entity (formed or to be formed),
a compelling commercial reason why such trademark should not be
used in such Non-U.S. Country, in which case, GW shall not itself
use the heritage trademark and shall not grant to any Person a
license to use the heritage trademark in connection with the
marketing, sale or distribution of any non-pre-
<PAGE>
scription consumer health care product in the relevant Non-U.S.
Country.
In addition, in the event the trademark to be used on any Ranitidine
Product or Zovirax OTC Product in a given country does not incorporate
the trademark used on the heritage prescription product in such
country, the royalty, if any, to be paid in respect of such Product to
GW, W-L or their Affiliates for such country shall be negotiated by
the parties on a case-by-case basis.
(b) Terms of License. Each license shall provide for the
payment by the relevant JV Entities of royalties to be determined in
accordance with Section 5.07(c), shall continue until terminated in
accordance with this Agreement (under Section 5.06(a)(iii)(C) or
Article XIV) and shall otherwise be on such other non-financial terms
that are substantially the same as those contained in the licenses
previously granted by GW to the JV Entities, with such additional
changes as are contemplated hereby or required by local regulations
and circumstances; and provided, however, that unless GW otherwise
agrees, no JV Entity shall promote, sample or sell JV Products through
marketing channels, including but not limited to managed care
organizations, principally targeted at physicians, other medical
practitioners or pharmacists in the relevant country.
(c) Royalties Payable by the JV Entities.
(i) Ranitidine OTC in the United States. The Parties agree
that in consideration for the grant, in accordance with Sections
5.07(a) and (b), of a license by GW or its Affiliates to use patents
and the Zantac Trademark in connection with the development,
manufacture, marketing, sale and distribution of Ranitidine OTC and
Ranitidine OTC Products in or in respect of the United States, the
U.S. Partnership and/or any other relevant JV Entities shall pay to GW
or its Affiliates a royalty at the following rates:
(A) in respect of the period beginning on the Launch
Date of a Ranitidine OTC Product in or in respect of the
United States to (but not including) the first anniversary
thereof, 15% of the U.S. Partnership's Net Sales of such
Ranitidine OTC Product;
(B) in respect of the period beginning on the date of
the first anniversary of such Launch Date to (but not
including) the date upon which both of GW's U.S. patents
(including all divisions, extensions,
<PAGE>
reissues, renewals, continuations and continuations in part
thereof) listed on Schedule 5.07(c)(i)(B) shall have expired
or shall cease to contain a Valid Claim (the "Ranitidine OTC
U.S. Expiry Date"), 20% of the U.S. Partnership's Net Sales
of such Ranitidine OTC Product; and
(C) in respect of the period beginning on the
Ranitidine OTC U.S. Expiry Date, 15% of the U.S. Part-
nership's Net Sales of such Ranitidine OTC Product;
provided, however, that in the event that such royalty when aggregated
with the Fully Allocated Cost (x) of manufacturing (determined in
accordance with Schedule 1.01(c)) bulk Ranitidine supplied to any JV
Entity in respect of the development, manufacture, marketing, sale
and distribution of such Ranitidine OTC Product by the U.S.
Partnership and (y) incurred in manufacturing and finishing such
Ranitidine OTC Product exceeds (1) in respect of the twelve-month
period ending on the day preceding the first anniversary of the Launch
Date of such Ranitidine OTC Product by the U.S. Partnership, 26% of
the U.S. Partnership's Net Sales of such Ranitidine OTC Product, (2)
in respect of each following twelve-month period, or part thereof,
prior to the Ranitidine OTC U.S. Expiry Date, 30% of the U.S.
Partnership's Net Sales of such Ranitidine OTC Product, and (3) in
respect of each following twelve-month period, or part thereof, ending
on the day prior to the anniversary of the Launch Date of such
Ranitidine OTC Product by the U.S. Partnership, 26% of the U.S.
Partnership's Net Sales of such Ranitidine OTC Product, none of the
U.S. Partnership, any relevant JV Entity and W-L shall be required to
compensate GW or its Affiliates for any amounts in excess of such
applicable percentage unless such Fully Allocated Cost (excluding any
such royalty) exceeds such percentage, in which case the U.S. Partner-
ship and/or any relevant JV Entity shall compensate GW and its
Affiliates for such Fully Allocated Cost but none of the U.S.
Partnership, any relevant JV Entity and W-L shall be required to pay
the applicable royalty and the Governing Board of the relevant JV
Entity shall review such Fully Allocated Cost; provided, further, that
if (following adjustments, if any, made in accordance with the
foregoing proviso) the U.S. Partnership incurs a loss with respect to
such Ranitidine OTC Product (by reference to profit before tax as
calculated in accordance with United States generally accepted
accounting principles) in the twelve-month period ending on the day
preceding the second anniversary of such Launch Date, the Parties
shall discuss, in good faith, an adjustment to such royalty and the
Management Fee.
<PAGE>
(ii) Other Ranitidine Products in the United States and
Ranitidine Products in Non-U.S. Countries. The Parties agree that in
consideration for the grant, in accordance with Sections 5.07(a) and
(b), of a license by GW or its Affiliates to use patents and the
Zantac Trademark in connection with the development, manufacture,
marketing, sale and distribution of Other Ranitidine Products in or in
respect of the United States by the U.S. Partnership and Ranitidine
Products in or in respect of any Non-U.S. Country by any relevant JV
Entity, the U.S. Partnership and/or any relevant JV Entity shall pay
to GW or its Affiliates royalties at the following rates:
(A) in respect of the period beginning on the Launch
Date of any Other Ranitidine Product in or in respect of the
United States or the period beginning on the Launch Date of
any Ranitidine Products in or in respect of a Non-U.S.
Country to (but not including) the first anniversary
thereof, 15% of the U.S. Partnership's or the relevant JV
Entity's Net Sales of such Other Ranitidine Product in or in
respect of the United States or such Ranitidine Product in
or in respect of such country, as applicable;
(B) in respect of the period beginning on the date of
the first anniversary of such Launch Date to (but not
including) the date upon which the patents of GW or its
Affiliates identified on Schedule 5.07(c)(ii)(B)
(including all divisions, extensions, reissues, renewals,
continuations, and continuations in part thereof) relating
to such Other Ranitidine Product in or in respect of the
United States or such Ranitidine Product in or in respect of
such country shall have expired or shall cease to contain a
Valid Claim (each, a "Ranitidine Expiry Date"), 20% of the
U.S. Partnership's or the relevant JV Entity's Net Sales
of such Other Ranitidine Product in or in respect of the
United States or such Ranitidine Product in or in respect of
such country, as applicable; and
(C) in respect of the period beginning on the
Ranitidine Expiry Date, 15% of the U.S. Partnership's or the
relevant JV Entity's Net Sales of such Other Ranitidine
Product in or in respect of the United States or such
Ranitidine Product in or in respect of such country, as
applicable;
provided, however, that in the event that such royalty when aggregated
with the Fully Allocated Cost (x) of manufacturing
<PAGE>
(determined in accordance with Schedule 1.01(c)) bulk Ranitidine
supplied to the U.S. Partnership or the relevant JV Entity in respect
of the development, manufacture, marketing, sale and distribution of
such Other Ranitidine Product in or in respect of the United States by
the U.S. Partnership or such Ranitidine Product in or in respect of
any Non-U.S. Country by the relevant JV Entity and (y) incurred in
manufacturing and finishing such Other Ranitidine Product or such
Ranitidine Product, as applicable, exceeds (1) in respect of the
twelve-month period ending on the day preceding the first anniversary
of the Launch Date of such Other Ranitidine Product in or in respect
of the United States by the U.S. Partnership or the twelve-month
period ending on the day preceding the Launch Date of such Ranitidine
Product in or in respect of such Non-U.S. Country by the relevant JV
Entity, 26% of the U.S. Partnership's or the relevant JV Entity's Net
Sales of such Other Ranitidine Product in or in respect of the United
States or such Ranitidine Product in or in respect of such Non-U.S.
Country, as applicable, (2) in respect of each following twelve-month
period, or part thereof, prior to the Ranitidine Expiry Date, 30% of
the U.S. Partnership's or the relevant JV Entity's Net Sales of such
Other Ranitidine Product in or in respect of the United States or such
Ranitidine Product in or in respect of such non-U.S. Country, as
applicable, and (3) in respect of each following twelve-month period,
or part thereof, ending on the day prior to the anniversary of the
Launch Date of such Other Ranitidine Product by the U.S. Partnership
or such Ranitidine Product by the applicable JV Entity, 26% of the
U.S. Partnership's or the relevant JV Entity's Net Sales of such Other
Ranitidine Product in or in respect of the United States or such
Ranitidine Product in or in respect of such Non-U.S. Country, as
applicable, none of the U.S. Partnership, any relevant JV Entity and
W-L shall be required to compensate GW or its Affiliates for any
amounts in excess of such applicable percentage unless such Fully
Allocated Cost (excluding any such royalty) exceeds such percentage,
in which case the U.S. Partnership and/or the relevant JV Entity shall
compensate GW for such Fully Allocated Cost but none of the U.S.
Partnership, any relevant JV Entity and W-L shall be required to pay
the applicable royalty and the Governing Board of the relevant JV
Entity shall review such Fully Allocated Cost; provided, further, that
if (following adjustments, if any, made in accordance with the
foregoing proviso) the relevant JV Entity incurs a loss with respect
to such Other Ranitidine Product in or in respect of the United States
or Ranitidine Product in or in respect of any Non-U.S. Country (other
than any Ranitidine Product marketed on the date of this Agreement by
a JV Entity in or in respect of the United Kingdom) (by reference to
profit before tax as calculated in accordance with the applicable
generally accepted accounting
<PAGE>
principles) in the twelve-month period ending on the day preceding
the second anniversary of such Launch Date, the Parties shall discuss,
in good faith, an adjustment to such royalty and the Management Fee.
(iii) 150 mg. Tablet Product. Notwithstanding paragraphs
(i) or (ii) above, in the event GW decides to offer, and a JV Entity
in a given country decides to accept, a tablet formulation of a
product containing 150 mg. of ranitidine hydrochloride as an OTC
Switch Product (the "150 mg. Tablet Product"), and if a tablet
formulation of a Ranitidine OTC Product is then approved or later is
approved for marketing in such country, the Fully Allocated Cost of
manufacturing and the royalties payable on Net Sales of such tablet
formulation of such Ranitidine OTC Product and such 150 mg. Tablet
Product will be aggregated for purposes of calculating whether the
applicable percentage limitation on Fully Allocated Cost and royalties
in such country has been exceeded.
(iv) Zovirax OTC Products. The Parties agree that in
consideration for the grant, in accordance with Sections 5.07(a) and
(b), of a license by GW or its Affiliates to use patents and the
Zovirax Trademark in connection with the development, manufacture,
marketing, sale and distribution of Zovirax OTC Products in or in
respect of any country, any relevant JV Entity shall pay to GW or its
Affiliates royalties at the following rates:
(A) in respect of the period beginning on the Launch
Date of a Zovirax OTC Product in or in respect of such
country to (but not including) the first anniversary
thereof, 15% of the relevant JV Entity's Net Sales of such
Zovirax OTC Product in or in respect of such country;
(B) in respect of the period beginning on the date of
the first anniversary of such Launch Date to (but not
including) the date upon which the patents of GW or its
Affiliates identified on Schedule 5.07(c)(iv)(B)
(including all divisions, extensions, reissues, renewals,
continuations and continuations in part hereof) relating to
such Zovirax OTC Product in or in respect of such country
shall have expired or shall cease to contain a Valid Claim
(the "Zovirax Expiry Date"), 20% of the relevant JV Entity's
Net Sales of such Zovirax OTC Product in or in respect of
such country; and
<PAGE>
(C) in respect of the period beginning on the Zovirax
Expiry Date, 15% of the relevant JV Entity's Net Sales of
such Zovirax OTC Product in or in respect of such country;
provided, however, that in the event that such royalty when aggregated
with the Fully Allocated Cost (x) of manufacturing (determined in
accordance with Schedule 1.01(c)) bulk Acyclovir supplied to any JV
Entity in respect of the development, manufacture, marketing, sale
and distribution of such Zovirax OTC Product in or in respect of any
country by such JV Entity and (y) incurred in manufacturing and
finishing such Zovirax OTC Product exceeds (1) in respect of the
twelve-month period ending on the day preceding the first anniversary
of the Launch Date of such Zovirax OTC Product in or in respect of
such country by the relevant JV Entity, 26% of the relevant JV
Entity's Net Sales of such Zovirax OTC Product in or in respect of
such country, (2) in respect of each following twelve-month period, or
part thereof, prior to the Zovirax Expiry Date, 30% of the relevant JV
Entity's Net Sales of such Zovirax OTC Product in or in respect of
such country, and (3) in respect of each following twelve-month
period, or part thereof, ending on the day prior to the anniversary
of the Launch Date of such Zovirax OTC Product in or in respect of
such country by the relevant JV Entity, 26% of the relevant JV
Entity's Net Sales of such Zovirax OTC Product in or in respect of
such country, neither the relevant JV Entity nor W-L shall be required
to compensate GW or its Affiliates for any amounts in excess of such
applicable percentage unless such Fully Allocated Cost (excluding any
such royalty) exceeds such percentage, in which case the applicable
JV Entity shall compensate GW or its Affiliates for such Fully
Allocated Cost but neither any relevant JV Entity nor W-L shall be
required to pay the applicable royalty and the Governing Board of
the relevant JV Entity shall review such Fully Allocated Cost.
Notwithstanding anything to the contrary contained in this Section
5.07(c)(iv), if the Launch Date for an OTC Zovirax Product in an
Existing Zovirax Country occurred
(aa) at least twelve months prior to the Closing Date,
the provisions of Section 5.07(c)(iv)(A) shall not apply in
determining the royalty payable with respect to such Zovirax
OTC Product in such Existing Zovirax Country, or
(bb) less than twelve months prior to the Closing Date,
the provisions of Section 5.07(c)(iv)(A) shall apply in
determining the royalty payable with respect to such Zovirax
OTC Product in such Existing Zovirax
<PAGE>
Country only to the unexpired portion, as of the Closing
Date, of the twelve-month period that commenced on the
Launch Date of such Product.
(v) OTC Switch Products (other than Zovirax OTC Products).
The royalties to be charged to JV Entities in respect of OTC Switch
Products (other than Zovirax OTC Products) shall, with regard to the
trademarks and patents licensed by GW to any relevant JV Entity, be
such royalties as GW may in good faith offer to the relevant JV Entity
or otherwise as the Parties may agree.
(vi) Promotional Expenses. For the purposes of this Section
5.07(c), the incremental cost of stand-alone promotional packs, or the
additional promotional elements in the case of combined packs, will be
charged to promotional expenses. This will include, inter alia, the
cost of samples and giveaways, whether or not attached to a standard
price pack, special promotional packs, providing the product in bulk
shippers for packing into display units and the cost of filling all
special offer coupons. All costs incurred in connection with these
promotional packs or activities will similarly be charged to
promotional expense.
(vii) Annual Operating Plan. All promotional expenses
referred to in Section 5.07(c)(vi) will be included in each Annual
Operating Plan to be approved by the Governing Board.
(viii) Returns. For the purposes of calculating the limit on
the total of Fully Allocated Cost of manufacturing and royalties
payable to GW or its Affiliates pursuant to this Section 5.07(c), the
Fully Allocated Cost attributable to any packs returned by customers
which are not resaleable and have to be destroyed and the costs of
destruction, or the cost of any reworking of packs returned which are
then subsequently sold, shall be excluded from the calculation of
Fully Allocated Cost of manufacturing.
(d) Services. W-L shall be entitled to provide each JV
Entity with services and shall be entitled to be reimbursed therefor
in accordance with Sections 6.02 and 6.03.
SECTION 5.08. Representations and Warranties. With respect
to any Ranitidine Product or OTC Switch Product to be developed,
marketed, sold or distributed by any JV Entity pursuant to this
Article V (other than Ranitidine OTC Products to be developed,
marketed, sold or distributed by the U.S. Partnership pursuant to
Section 5.02(a)), GW shall deliver to W-L and the
<PAGE>
relevant JV Entity on the date of execution of the relevant JV
Implementation Agreement (if a new JV Entity is being established)
or the relevant License Agreement (in any other case), a certificate
confirming that the representations and warranties set forth in
Sections 10.02(b), 10.04 to 10.07 and 10.09 are true and correct as at
the date of such certificate subject only to such exceptions thereto
as GW may detail in such certificate (such exceptions to be limited to
specific factual matters); provided, however, that:
(a) for the purposes of such certificate and the
representations and warranties made therein, references to "GW
Products" as used in Sections 10.02(b), 10.04 to 10.07 and 10.09
shall mean the relevant Ranitidine Product or OTC Switch Product
to be developed, manufactured, marketed, sold or distributed by
the relevant JV Entity in the relevant country;
(b) where the participant in the relevant JV Entity is not a
Party but is an Affiliate of a Party, such representations and
warranties shall, for the purposes of this Section 5.08, be
construed as if references therein to such Party were references
to both that Party and the Affiliate of such Party which is the
participant in the relevant JV Entity; and
(c) references therein to the "GW Relevant Agreements" shall
mean the JV Implementation Agreement (if a new JV Entity is being
established) or the relevant License Agreement (in any other
case) in connection with which such representations and
warranties are being confirmed pursuant to this Section 5.08, and
all other Operative Documents being entered into in connection
therewith, in each case to which GW or any of its Affiliates is a
party.
SECTION 5.09. Non-Compete. Except as expressly permitted by
Article V, each of W-L and GW agrees that it will not, and will cause
its Affiliates not to introduce, or participate in the introduction
of, any product in the non-prescription consumer health care market
(other than a JV Product pursuant to the terms of this Agreement) in
any country if such product would, in the reasonable opinion of the
other Party, directly compete with any JV Product being marketed, sold
or distributed in that country, or which is being developed for
marketing, sale or distribution, by a JV Entity in such country. The
Parties agree that a product will directly compete with a Ranitidine
Product only if it contains an H2 antagonist or a proton pump
inhibitor. Except as aforesaid, if the Parties cannot agree
<PAGE>
whether any product will directly compete with a JV Product they shall
seek to resolve the issue by negotiation.
SECTION 5.10. Japan. The provisions of this Agreement do not
in any way apply to or restrict the development, marketing, selling
or distribution by either Party (or their respective Affiliates) of
any product in Japan.
SECTION 5.11. Finland. In addition, notwithstanding anything
herein to the contrary, GW shall not be required to offer to a JV
Entity Ranitidine Products in Finland and the provisions of this
Agreement do not in any way apply to or restrict the development,
marketing, selling or distribution by GW or its Affiliates of any
Ranitidine Products in Finland.
ARTICLE VI.
Related Transactions
SECTION 6.01. Development and Strategic Plans. The Parties
agree (in respect of Ranitidine Products and OTC Switch Products)
that:
(a) development costs in the United States shall be funded
as set forth in the Partnership Agreement;
(b) subject to clause (a) above, the relevant JV Entity
shall reimburse the Parties' and their Affiliates' Fully
Allocated Costs incurred after the date of the Original
Agreement in respect of the development of Ranitidine Products
and the development of OTC Switch Products which the Parties have
determined to develop in connection with the business of any JV
Entity;
(c) W-L shall not be compensated for any development costs
(including administration costs) incurred by W-L except as
explicitly set forth in an approved Annual Operating Plan or as
otherwise agreed by GW in writing;
(d) amounts charged to any JV Entity in respect of the
development of JV Products shall be charged to the relevant JV
Entity pursuant to this Section 6.01 taking into account any
special credits or any special tax benefits in excess of a
deduction for 100% of the expenditure to which the Party making
such charge is entitled (other than by flow-through of such
credit or tax benefit to such Party as a
<PAGE>
partner or owner of such JV Entity) by virtue of the nature of
the expenditure;
(e) following the review and approval of Ranitidine Product
and OTC Switch Product development work by the Governing Board of
the relevant JV Entity, GW shall have the responsibility for
conducting such development work pursuant to the applicable
Development Agreement, both before and after NDA Approval, in the
case of the United States, or Regulatory Approval, in the case of
any Non-U.S. Country, of any Ranitidine Product or OTC Switch
Product, with active participation by W-L;
(f) upon acceptance pursuant to Article V by W-L on behalf
of the relevant JV Entity of an OTC Switch Product or a
Ranitidine Product for development by a JV Entity, GW shall have
primary responsibility for establishing the launch timing and
Launch Date for such OTC Switch Product or Ranitidine Product,
with active participation by W-L, which launch timing and Launch
Date shall be reviewed by, and is subject to the approval of, the
Coordination Committee and the Governing Board of the relevant JV
Entity;
(g) GW shall have primary responsibility for developing
and recommending the pricing/sizing, indications and claims for
Ranitidine Products and OTC Switch Products, with active
participation by W-L, which pricing/sizing, indications and
claims shall be reviewed for approval by the relevant
Coordination Committee. The Governing Board shall review for
approval recommendations of the Coordination Committee regarding
such pricing/sizing, indications or claims as part of the Annual
Operating Plan approval process, or at such other times as
necessary; and
(h) GW and W-L shall have joint responsibility for
developing all strategic plans relating to Ranitidine Products
and OTC Switch Products (each, a "Strategic Plan"). Not later
than July 1 (or such other date as the Parties may agree) in each
year, a Strategic Plan for a three-year period commencing with
the following fiscal year of the relevant JV Entity shall be
submitted to the Governing Board of each JV Entity for final
review and approval. The marketing plans described in
subparagraph (a) of Section 6.02 shall be based on such Strategic
Plans.
SECTION 6.02. Marketing Plans; Services To Be Provided by
W-L in Respect of Ranitidine Products and Zovirax OTC Products.
(a) W-L shall have primary responsibility for developing,
<PAGE>
coordinating and writing all marketing plans for OTC Switch Products
and Ranitidine Products, with active participation by GW (based on the
decisions, if made at such time, taken with respect to pricing/sizing,
indications and claims), which plans shall be reviewed for approval by
the relevant Coordination Committee. As part of its participation, GW
shall take primary responsibility for developing, coordinating and
writing the product/sizing, claims and indications and, if required,
the physician portion of the professional section of the marketing
plans, with active participation by W-L. W-L shall have primary
responsibility for the pharmacy portion of the professional section of
the marketing plans, with active participation by GW. For purposes of
this Section 6.02(a), "physician" shall mean any doctor, hospital,
clinic or similar medical outlet where the ultimate consumer can only
secure the relevant product when it has been prescribed and "pharmacy"
shall mean any outlet where the ultimate consumer may, at his or her
own initiative, self-select or request to purchase the relevant
product in a form which may be sold to consumers without a
prescription. The Coordination Committee of each JV Entity shall be
responsible for ensuring that marketing claims for Ranitidine Products
and OTC Switch Products are made consistent with the medical and
regulatory claims that have been approved by GW. The Governing Board
shall review and approve recommendations of the Coordination Committee
as part of the Annual Operating Plan approval process. Following the
approval of the Governing Board, W-L shall have the responsibility for
execution of the plans pursuant to the applicable W-L Services
Agreement.
(b) Subject to and as set forth in the applicable W-L
Services Agreement the Parties agree that in respect of the
development, marketing, selling and distribution by any JV Entity of
Ranitidine Products and Zovirax OTC Products, W-L shall provide such
JV Entity with the services set forth on Schedule 6.02(a) in
consideration for the Fully Allocated Costs of such services, other
than the services marked with an asterisk on such Schedule, and an
additional fee to be calculated as set forth on, with respect to the
U.S. Partnership, Schedule 6.02(b) and, with respect to other JV
Entities, Schedule 6.02(c) (the aggregate of such Fully Allocated
Costs and such fee being called the "Management Fee"); provided,
however, that such additional fee (other than with respect to the
United States) shall be reviewed after five years from the date of
this Agreement to ensure that such fee represents the Fully Allocated
Costs of the services that are compensated by such fee; provided,
further, that in respect of the provision by W-L of the services
referenced on Schedule 6.02(a) under "General Administration" and
"Corporate Allocations" prior to the Launch Date of a Ranitidine
Product or
<PAGE>
Zovirax OTC Product, W-L shall only be reimbursed its Fully Allocated
Costs to the extent such costs are direct and readily identifiable;
and provided, further, that in the event that GW grants to a JV Entity
in a given country either the right to market an Other Ranitidine
Product that is a formulation containing 150 milligrams of
Ranitidine and such JV Entity is already marketing Ranitidine OTC
Products in such country or the right to market a Ranitidine OTC
Product and such JV Entity is already marketing an Other Ranitidine
Product that is a formulation containing 150 milligrams of Ranitidine
in such country, the additional fee to be charged with respect to the
sale of the new product shall be equal to the Fully Allocated Costs of
the services marked with an asterisk and set forth on Schedule
6.02(a) to the extent such costs are direct, readily identifiable
and incremental to the costs incurred by such JV Entity in connection
with the Ranitidine Product already being marketed by such JV Entity
in such country.
(c) GW shall not be compensated for any marketing (including
administration) costs incurred by GW except as explicitly set forth
in an approved Annual Operating Plan or as otherwise agreed by W-L
in writing.
SECTION 6.03. Other Services To Be Provided by W-L. With
respect to the marketing, selling and distribution by the JV Entities
of JV Products (other than Ranitidine Products and Zovirax OTC
Products), the Parties shall negotiate in good faith the services to
be provided by W-L or its Affiliates to the relevant JV Entity and any
costs to be reimbursed, and fees to be paid, to W-L or its Affiliates
in respect thereof. The Parties agree that such services and related
costs and fees shall be broadly similar to the services provided by
W-L or its Affiliates, and the related costs and fees receivable by
W-L or its Affiliates, pursuant to the W-L Services Agreements,
subject to such changes as W-L and GW agree are appropriate to reflect
the cost to W-L or its Affiliates of the services to be provided by it
and local market conditions.
SECTION 6.04. Supply. (a) In order to protect their
respective interests in the License Agreements and to assure the
uniform quality of JV Products, the Parties agree that, except in the
circumstances set forth in Section 6.04(b), all Ranitidine and any
other active ingredient in a JV Product required for the manufacture
of Ranitidine Products or other JV Products to be marketed, sold or
distributed by any JV Entity in accordance with this Agreement and the
Operative Documents shall be supplied by GW or its Affiliates to the
relevant JV Entity or JV Entities at prices to be agreed by the
Parties and, in consideration thereof,
<PAGE>
GW or its Affiliates shall pay to such JV Entity or JV Entities or to
W-L or its Affiliates such fees, commissions, allowances or similar
payments as the Parties shall determine. All other compounds and/or
related finished products to be supplied by the Parties or any of
their Affiliates required for the manufacture of JV Products shall be
supplied to the relevant JV Entity on terms to be negotiated. The
Party supplying such compounds and/or related finished products shall
pay to the other Party or to the JV Entity or Entities such fees,
commissions, allowances or similar payments as the Parties may
determine.
(b) It shall be a term of all License Agreements relating to
Ranitidine and any other active ingredient in a JV Product that in the
event that GW or its Affiliates fail to supply Ranitidine or such
other active ingredient in accordance with Section 6.04(a) or the
relevant Supply Agreement for a period of three months, and for so
long as such failure by GW or its Affiliates continues unbroken
(except for periods of four weeks or less), the relevant JV Entity or
Entities shall be entitled to conduct bulk manufacturing of Ranitidine
or such other active ingredient.
SECTION 6.05. Manufacture of JV Products. (a) Except as
provided in Section 6.04(b) above, GW shall determine all
manufacturing sites for Ranitidine Products and any other OTC Switch
Products, with active participation by W-L. After an initial five (5)
year manufacturing term for a Ranitidine Product or OTC Switch
Product, the Governing Board of the relevant JV Entity may agree to
seek lower cost alternative secondary manufacturing sources, which
meet, at a minimum, financial, quality and regulatory criteria
mutually agreed upon by GW and W-L.
(b) In the event the price to be paid by a JV Entity for
Ranitidine Products and other OTC Switch Products supplied by GW or
its Affiliates actually increases as a result of an internal GW
decision relating to relocation of production or product
rationalization, and such relocation or rationalization reduces the
total production volume of such facility unrelated to the Ranitidine
Products and/or OTC Switch Products volume, such actual increase in
price to the extent it relates to such reduction shall not exceed
the percentage increase in the agreed rate of inflation for the
preceding twelve month period in the country of manufacture. In the
event that the aggregate OTC Switch Products and/or Ranitidine
Products volume at any such facility increases or decreases, the
purchase prices for such OTC Switch Products and/or Ranitidine
Products supplied shall be as otherwise provided in this Agreement
and the relevant Supply Agreement.
<PAGE>
SECTION 6.06. Financial and Other Information; Audit. (a)
Subject to any limitations required by applicable law, GW and W-L
shall share all information with respect to Ranitidine Products and
OTC Switch Products and shall share financial information with respect
to the development, manufacture and marketing of Ranitidine Products
and OTC Switch Products and the operation of the JV Entities,
including, without limitation, the information set forth on Schedule
6.06(a).
(b) In respect of any matters for which the Parties, or
their Affiliates, shall, under the terms of this Agreement or any of
the other Operative Documents, be entitled to any payment from any JV
Entity ("Relevant Matters"), (i) the Parties shall and shall cause
their Affiliates and the JV Entities to maintain such books, accounts
and records as may be necessary to determine rights to such payment,
(ii) the JV Entities shall give the other Party, its Affiliates, any
relevant JV Entity and each of their respective independent
accountants, and the Parties and their respective Affiliates shall
give the independent accountants of the other Party, its respective
Affiliates and any relevant JV Entity, reasonable access thereto
(after written notice not in any event to be less than five Business
Days, and in the case of independent accountants, after execution of a
confidentiality agreement between the Parties permitting such access and
such independent accountants) during normal business hours and allow
such Person not more than once in any calendar year (or portion
thereof in the case of calendar year 1996) nor more than once in
respect of any calendar year (or portion thereof in the case of
calendar year 1996) to audit such books, accounts and records as the
same relate to the Relevant Matters, in respect of any calendar year
ending not more than 24 months prior to the notice relating to such
audit, at the sole expense of the Party, Affiliate or JV Entity
requesting such audit. Upon the expiration of 24 months following the
end of any calendar year, the calculation of the amount of any such
payment made to a Party or its Affiliate or with respect to which a
Party or its Affiliate is entitled with respect to such year shall be
binding and conclusive upon the other Party and its Affiliates (and
any relevant JV Entity), unless an audit requested by such other
Party, Affiliate or JV Entity prior to the expiration of such 24 month
period has not yet been completed. In addition, each of the Parties,
their Affiliates and their respective independent accountants shall
have reasonable access to the books of each JV Entity (after written
notice not in any event to be less than five Business Days, and in the
case of independent accountants, after execution of a confidentiality
agreement between the relevant JV Entity and such independent
accountants) during normal business hours and shall have the
opportunity not more than once in any calendar
<PAGE>
year (or portion thereof in the case of calendar year 1996) nor more
than once in respect of any calendar year (or portion thereof in the
case of calendar year 1996) to audit such books and the procedures of
each JV Entity, at the sole expense of the Party or Affiliate
requesting such audit. Each Party shall and shall cause its Affiliates
and any relevant JV Entity to provide information on a timely basis
as required by each JV Entity to meet the requirements of Section 4.03(d).
SECTION 6.07. U.S. Export Controls/International Boycott.
The Parties understand that the products to be sold by a JV Entity may
be subject to export controls to permit resales and/or transfers to
other countries and parties, including authorizations required from
the appropriate U.S. government agency under the laws and regulations
of the United States. No JV Entity is, or shall be, authorized to act
in violation of Part 769 of the Export Administration Regulations of
the U.S. Department of Commerce and/or agree to engage in boycott
participation as defined in Section 999 of the U.S. Internal Revenue
Code of 1986, as amended. Each of the Parties and their appropriate
Affiliates will assist the JV Entity, as requested and where
practicable, in seeking U.S. government authorizations for
transactions subject to U.S. export control regulations.
SECTION 6.08. Technology. (a) Neither Party nor any of their
Affiliates shall be obligated to make available to any JV Entity any
technology, data, patents or other intellectual property rights owned
by the relevant Party or its Affiliates in connection with, and for
the purposes of, the business of the relevant JV Entity unless
satisfactory terms therefor have been agreed between the relevant
Party or Affiliate and the relevant JV Entity.
(b) In the event that a Party or any of its Affiliates
desires to use, with respect to a product in any country where (i) a
JV Entity has not been established and (ii) an Affiliate of a Party
has not been appointed by a JV Entity to act as a distributor for
such JV Entity in such country, development materials or rights
(e.g., patents and know-how, technology and technical information,
including, but not necessarily limited to, all biological, chemical,
biochemical, toxicological, pharmacological and metabolic material and
information and data relating thereto and formulation, clinical,
analytical and stability information and data), including product
licenses and dossiers, and any filings for Regulatory Approvals that
use or contain such development materials or rights, developed by,
owned by or licensed to a JV Entity (other than any such development
materials or rights licensed to a JV Entity by such Party or its
<PAGE>
Affiliates pursuant to this Agreement), but excluding any commercial,
marketing, advertising or promotional materials or rights, including,
but not limited to, all packaging, design, trademarks, brand names,
market research, positioning and promotional campaigns (all of which
such Party and its Affiliates shall be permitted to use without the
payment of a royalty), the Party desiring to use such development
materials or rights shall, or shall cause its relevant Affiliate to,
pay to such JV Entity a development and marketing royalty, in respect
of the period beginning on the date of the first sale of such product
by such Party or relevant Affiliate (other than sales resulting from
regional test marketing) in such country and ending on the tenth
anniversary of such date, equal to 5% of the Party's or its relevant
Affiliate's Net Sales of such product in such country. This Section
6.08(b) shall not permit a Party and its Affiliates to use any
development, commercial, marketing, advertising or promotional
materials or rights to the extent that such Party and its Affiliates
would otherwise be prevented from doing so under the terms of this
Agreement and the Operative Documents.
SECTION 6.09. Regulatory Approvals; Recalls and Withdrawals.
(a) GW and its Affiliates shall have sole responsibility for
obtaining all Regulatory Approvals and making all filings related
thereto with respect to JV Products that have been approved by the
Governing Board of a JV Entity, and shall have a lead role with the
FDA or other similar governmental authority in connection with
obtaining such approvals or making such filings, with active
participation by W-L, including the reasonable opportunity to attend
all meetings with such governmental authorities, which the Parties
have agreed are relevant for W-L to attend.
(b) The process for review and approval of Ranitidine
Product and OTC Switch Product labeling, advertising and promotional
materials shall be determined by GW and W-L and their Affiliates on a
country-by-country basis taking into account local regulatory
concerns; provided, however, that in the event that any such materials
are required to be approved by the relevant government authorities or
GW reasonably believes, after discussion with W-L, should be
voluntarily submitted to the relevant government authorities for
approval, in order to safeguard GW's or one of its Affiliates'
regulatory interests with respect to its prescription business in a
country, GW or its Affiliate shall negotiate such materials with the
relevant government authorities, with active participation in such
negotiation by W-L or its Affiliates, including the reasonable
opportunity to attend all meetings with the relevant governmental
authorities; provided, however, the Parties may agree that W-L or
<PAGE>
one of its Affiliates is the appropriate Party to negotiate such
materials in certain jurisdictions.
(c) GW and its Affiliates shall have sole responsibility
for all decisions regarding, and shall assume all regulatory
responsibility for, the recall or market withdrawal of any Ranitidine
Product or OTC Switch Product, with active participation in such
decision process by W-L. For purposes of this paragraph (c),
regulatory responsibility shall include monetary losses resulting from
the failure to recall or withdraw from the market any product if W-L
or its Affiliates has notified GW in writing that it believes such
product should be recalled or withdrawn and such monetary losses (i)
consist of a penalty or fine imposed by a regulatory authority or (ii)
arise from any third party claim relating to injuries resulting from
the failure to recall or withdraw such product. After a decision has
been made to recall or withdraw any such Product, the relevant JV
Entity shall act as a recall coordinator and shall promptly implement
the recall or withdrawal of such Product.
ARTICLE VII.
Further Covenants of W-L
SECTION 7.01. Allocation of Resources. W-L agrees that,
notwithstanding any other commitments it may have under additional
joint venture or other arrangements relating to consumer health
products, it will, in accordance with sound commercial principles,
devote sufficient resources to each JV Entity to maximize each JV
Entity's potential in accordance with its obligations hereunder and
under the Operative Documents and in accordance with its Annual
Operating Plan and the determinations of the relevant Governing
Board.
SECTION 7.02. W-L Affiliates. Subject to Article XII, W-L
shall, during the term of this Agreement and for so long as any
Affiliate of W-L shall own equity in any JV Entity, own and continue
to own, legally and beneficially, directly or indirectly, a majority
of the issued and outstanding share capital or other equity interest
of such Affiliate, and shall not permit any Lien, other than Permitted
Liens, to be created, granted or to arise in respect of such share
capital or equity interest and shall otherwise continue to be able to
exercise the direction of the management and policies of such
Affiliate.
SECTION 7.03. Safety Information. W-L shall cause the JV
Entities to promptly disclose in writing to GW any information
<PAGE>
which they acquire which relates to the safety of any JV Product or
any constituent compounds including, inter alia, all side effects,
injury, toxicity or sensitivity reactions including unexpected or
increased incidence and severity thereof associated with commercial or
clinical uses, studies, investigations or tests with any such JV
Product or any such constituent compound. The Parties shall agree upon
standard operating procedures for reporting such information to each
other and the Development Committee of the relevant JV Entity.
SECTION 7.04. Approvals and Consents. (a) W-L shall use its
reasonable efforts to (i) obtain all governmental approvals and
consents (including all Regulatory Approvals), if any, necessary or
desirable for the consummation of the transactions contemplated by
this Agreement, the Partnership Agreement and the other Operative
Documents, and (ii) make or cause to be made any and all declarations,
filings and registrations with governmental authorities, which
approvals, consents, declarations, filings and registrations are
necessary or desirable for the consummation of the transactions
contemplated hereby or thereby.
(b) Once a JV Product has been approved by the Governing
Board of a JV Entity, W-L shall use reasonable diligence consistent
with sound commercial principles and GW's rights to determine launch
timing and the Launch Date in accordance with Section 6.01(f) to
assist such JV Entity in obtaining all Regulatory Approvals required
to market and sell such JV Product in the applicable country at the
earliest possible time.
SECTION 7.05. Use of JV Regulatory Documentation. W-L hereby
agrees that it and its Affiliates shall not be entitled to use for
themselves or any Third Party, for any purpose, any JV Regulatory
Documentation unless and to the extent GW shall have agreed to allow
the use of such JV Regulatory Documentation; it being anticipated that
the appropriate JV Entity shall be reasonably compensated for any such
use upon terms to be negotiated between GW and W-L.
SECTION 7.06. Tax Matters. W-L will, and will cause each of
its Affiliates to, cooperate fully with and assist GW, its Affiliates
and each JV Entity (a) in obtaining all desirable rulings or consents
of the relevant and appropriate tax authorities in order to obtain
all appropriate tax benefits, exemptions or exclusions for the Parties
and the respective JV Entities as contemplated herein and in the other
Operative Documents; and (b) by doing all things necessary to make all
tax elections which would be beneficial to the respective JV Entities;
provided, however, that such actions described in (a) or (b) above do
not
<PAGE>
in the reasonable judgment of W-L have adverse tax consequences for
W-L or its Affiliates.
SECTION 7.07. Further Assurances. W-L shall use all
reasonable efforts to take or cause to be taken any appropriate action
and to do or cause to be done all things necessary, proper and
advisable to consummate and make effective the transactions
contemplated hereby and by the Operative Documents and shall, in
particular, cause its Affiliates and the Persons designated by it to
be Representatives or Alternate Representatives on each Governing
Board or representatives on any subcommittee thereof or on any
Development Committee or any Coordination Committee to take all such
actions and to do all such things.
ARTICLE VIII.
Further Covenants of GW
SECTION 8.01. Information Relating to Potential JV Products.
In connection with any Ranitidine Product or OTC Switch Product being
considered for development, marketing, sale or distribution by any JV
Entity, or in respect of which a GW Offer or GW Notice is served
pursuant to Article V (a "Potential JV Product") GW shall promptly on
request provide W-L with such information as W-L may reasonably
request in respect of the Potential JV Product, including (without
limitation) access to all GW Regulatory Documentation relating thereto
and copies thereof, each as W-L may reasonably request.
SECTION 8.02. Regulatory. GW shall give the relevant JV
Entity access to, and the right to reference, all of the GW Regulatory
Documentation in respect of the JV Products.
SECTION 8.03. GW Affiliates. Subject to Article XII GW
shall, during the term of this Agreement, and for so long as any
Affiliate of GW shall own equity in any JV Entity, own and continue to
own, legally and beneficially, directly or indirectly, a majority of
the issued and outstanding share capital or other equity interest of
such Affiliate and shall not permit any Lien, other than a Permitted
Lien, to be created, granted or to arise in respect of such share
capital or equity interest and shall otherwise continue to be able to
exercise the direction of the management and policies of such
Affiliate.
SECTION 8.04. Safety Information. GW shall promptly disclose
in writing to W-L any information it, or its Affiliates, acquires
which relates to the safety of any prescription product
<PAGE>
sold by GW and/or its Affiliates, a version of which is a JV Product
or is being developed by any JV Entity, or any constituent compound
including, inter alia, all side effects, injury, toxicity or
sensitivity reactions including unexpected or increased incidence
and severity thereof associated with commercial or clinical uses,
studies, investigations or tests with any such product or any
constituent compounds. The Parties shall agree upon standard operating
procedures for reporting such information to each other and the
Development Committee of the relevant JV Entity.
SECTION 8.05. Approvals and Consents. (a) GW shall use its
reasonable efforts to (i) obtain all governmental approvals and
consents including all Regulatory Approvals, if any, necessary or
desirable for the consummation of the transactions contemplated by
this Agreement, the Partnership Agreement and the other Operative
Documents, and (ii) make or cause to be made any and all declarations,
filings and registrations with governmental authorities, which
approvals, consents, declarations, filings and registrations are
necessary or desirable for the consummation of the transactions
contemplated hereby or thereby.
(b) Once a JV Product has been approved by the Governing
Board of a JV Entity, GW shall use reasonable diligence consistent
with sound commercial principles and GW's rights to determine launch
timing and the Launch Date in accordance with Section 6.01(f) to
assist such JV Entity in obtaining all Regulatory Approvals required
to market and sell such JV Product in the applicable country at the
earliest possible time.
SECTION 8.06. Use of JV Regulatory Documentation. GW and its
Affiliates shall be entitled to use JV Regulatory Documentation for
support of their Prescription Products without compensation to the
relevant JV Entity. GW and its Affiliates shall also be entitled to
use for themselves any JV Regulatory Documentation for the purpose of
developing any product other than a Prescription Product; provided,
however, that, prior to the Launch Date of such product, the
appropriate JV Entity shall be reasonably compensated by GW or its
Affiliates for any such use upon terms to be negotiated between GW and
W-L; and provided, further, that this Section 8.06 shall not restrict
the use by GW and its Affiliates of any GW Regulatory Documentation
other than any such documentation which has been purchased by W-L or
any JV Entity or which has been contributed to any JV Entity pursuant
to the Ranitidine Rights Agreement dated as of December 10, 1993
between GW Inc. (formerly Glaxo Inc.), GW OTC (formerly Glaxo OTC
Inc.), W-L and the Partnership or otherwise.
<PAGE>
SECTION 8.07. Tax Matters. GW will, and will cause each of
its Affiliates to, cooperate fully with and assist W-L, its Affiliates
and each JV Entity (a) in obtaining all desirable rulings or consents
of the relevant and appropriate tax authorities in order to obtain
all appropriate tax benefits, exemptions or exclusions for the Parties
and the respective JV Entities as contemplated herein and in the other
Operative Documents; and (b) by doing all things necessary to make all
tax elections which would be beneficial to the respective JV Entities;
provided, however that such actions described in (a) or (b) above do
not in the reasonable judgment of GW have adverse tax consequences for
GW or its Affiliates.
SECTION 8.08. Further Assurances. GW shall use all
reasonable efforts to take or cause to be taken any appropriate action
and to do or cause to be done all things necessary, proper and
advisable to consummate and make effective the transactions
contemplated hereby and by the Operative Documents and shall, in
particular, cause its Affiliates and the Persons designated by it to
be Representatives or Alternate Representatives on each Governing
Board or representatives on any subcommittee thereof or on any
Development Committee or any Coordination Committee to take all such
actions and to do all such things.
ARTICLE IX.
Representations and Warranties of W-L
W-L hereby represents and warrants to GW as follows:
SECTION 9.01. Organization; Good Standing. W-L is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. No order has been made or
petition presented or resolution passed for the winding up of W-L and
no distress, execution or other process has been levied on any of its
assets.
SECTION 9.02. Authority; No Violation. (a) Each of W-L and
its Affiliates has full corporate power and authority to execute,
deliver and perform its obligations under this Agreement and each of
the other Operative Documents to which it is party (this Agreement and
all such Operative Documents being the "W-L Relevant Agreements") and
the execution and delivery of each of the W-L Relevant Agreements and
the consummation of the transactions contemplated thereby have been
duly and validly approved by the Board of Directors of W-L or such of
its Affiliates which is a party thereto, as the case may be, and no
other corporate
<PAGE>
proceedings on the part of W-L, or any such Affiliate, are necessary
in connection with the consummation of the transactions contemplated
hereby and thereby. Each of the W-L Relevant Agreements has been duly
and validly executed and delivered by W-L or such of its Affiliates
which is a party thereto, as the case may be, and, assuming due
authorization, execution and delivery by each of the other parties
thereto, constitutes a valid and binding obligation of W-L or such
Affiliate, as the case may be, enforceable against W-L or such
Affiliate, as the case may be, in accordance with its terms.
(b) Neither the execution and delivery of the W-L Relevant
Agreements by W-L, or such of its Affiliates which is a party thereto,
nor the consummation by W-L, or such Affiliate, of the transactions
contemplated thereby, nor compliance by W-L, or such Affiliate, with
any of the terms or provisions thereof, will (i) violate any provision
of its certificate of incorporation or by-laws or (ii) violate any
material statute, code, ordinance, rule, regulation, judgment, order,
writ, decree or injunction applicable to W-L or such Affiliate.
SECTION 9.03. Certificate of Incorporation and By-Laws. A
complete and correct copy of W-L's certificate of incorporation and
by-laws in effect as of the date of this Agreement are attached hereto
as Schedule 9.03.
SECTION 9.04. Certain Litigation. Except as set forth on
Schedule 9.04 there is no claim, action, suit, proceeding,
arbitration, investigation, inquiry, or hearing or notice of hearing
(collectively, the "Proceedings") which is existing, pending or, to
the best knowledge of W-L, threatened, before any court, arbitrator,
panel, agency or other governmental, administrative or judicial
authority or private arbitration tribunal against or relating to the
transactions contemplated by the W-L Relevant Agreements which could
materially adversely affect the transactions contemplated thereby.
SECTION 9.05. Compliance. Except as set forth in Schedule
9.05, W-L and its Affiliates possess all franchises, licenses,
permits, waivers, registrations, certificates, consents, approvals
or authorizations (collectively, "Permits") required by any applicable
laws, ordinances, codes, rules, statutes, policy, guidelines,
regulations, standards, judgments, decrees, writs, rulings,
injunctions, orders or any other requirements of any governmental,
administrative or judicial entities ("Legal Requirements") relating in
any way or applicable in any manner to the execution and delivery of
the W-L Relevant Agreements or the performance by W-L and its
Affiliates of their
<PAGE>
obligations thereunder, and W-L has no reason to believe that it or
its Affiliates will be unable to obtain any Permits which are required
for the performance of their future obligations thereunder except,
in each case, where the failure to do so would not have a materially
adverse effect on the transactions contemplated by the W-L Relevant
Agreements.
SECTION 9.06. Finder. Except for Bear Stearns & Co., Inc.,
neither W-L, its Affiliates nor any of their respective officers or
directors has employed any broker or finder or other firm,
corporation, agency or other Person that is entitled to a finder's fee
or any type of brokerage commission or fee in relation to or in
connection with the transactions contemplated by the W-L Relevant
Agreements.
SECTION 9.07. Transactions Contemplated by W-L Relevant
Agreements. In connection with the Closing of this Agreement only,
references in this Article IX to transactions contemplated by, or
the performance of obligations under, the W-L Relevant Agreements or
this Agreement, or similar references, shall be construed to mean all
transactions or obligations contemplated by this Agreement (other than
transactions or obligations contemplated by this Agreement which will
arise under Operative Documents other than the Closing Documents) and
each of the other Closing Documents.
ARTICLE X.
Representations and Warranties of GW
GW hereby represents and warrants to W-L as follows:
SECTION 10.01. Organization; Good Standing. GW is a
corporation duly organized and validly existing under the laws of
England and Wales and has complied, in all material respects, with the
provisions of the United Kingdom's Companies Acts 1985 and 1989 and
all returns, particulars, resolutions and other documents required to
be filed with or delivered to the registrar of companies or to any
other authority whatsoever by GW have been correctly and properly
prepared and so filed or delivered. No order has been made or petition
presented or resolution passed for the winding up of GW and no
distress, execution or other process has been levied on any of its
assets.
SECTION 10.02. Authority; No Violation. (a) Each of GW and
its Affiliates has full corporate power and authority to execute,
deliver and perform its obligations under this Agreement
<PAGE>
and each of the other Operative Documents to which it is party (this
Agreement and all such Operative Documents being together the "GW
Relevant Agreements") and the execution and delivery of each of the GW
Relevant Agreements and the consummation of the transactions
contemplated thereby have been duly and validly approved by the Board
of Directors of GW or such of its Affiliates which is a party
thereto, as the case may be, and no other corporate proceedings on the
part of GW, or any such Affiliate, are necessary in connection with
the consummation of the transactions contemplated thereby. Each of
the GW Relevant Agreements has been duly and validly executed and
delivered by GW or such of its Affiliates which is a party thereto, as
the case may be, and, assuming due authorization, execution and
delivery by each of the other parties thereto, constitutes a valid and
binding obligation of GW or such Affiliate, as the case may be,
enforceable against GW or such Affiliate, as the case may be, in
accordance with its terms.
(b) Neither the execution and delivery of the GW Relevant
Agreements by GW, or such of its Affiliates which is a party thereto,
nor the consummation by GW, or such Affiliate, of the transactions
contemplated thereby, nor compliance by GW, or such Affiliate, with
any of the terms or provisions thereof, will (i) violate any provision
of its memorandum of association, articles of association or other
organizational documents; (ii) violate any material statute, code,
ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to GW, or such Affiliate, any of the GW Products
or the GW Rights; or (iii) violate, conflict with, result in a breach
of any provision of, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under,
result in the termination of, accelerate the performance required by,
or result in the creation of any Lien upon the GW Products or the GW
Rights or any of them under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, collective bargaining agreement, agreement or other
instrument or obligation or by which the GW Products or the GW Rights
or any of them may be bound or affected.
SECTION 10.03. Certificate of Incorporation and Memorandum
and Articles of Association. A complete and correct copy of GW's
certificate of incorporation, memorandum of association and articles
of association in effect as of the date of this Agreement is attached
hereto as Schedule 10.03.
SECTION 10.04. Intellectual Property Rights. (a) Schedule
10.04 contains a complete and correct list of all
<PAGE>
patents, patent applications, licenses, trademarks, trade names, and
similar rights currently owned, used or proposed to be used in
connection with the GW Products (collectively, "GW Rights") indicating
the registered and beneficial owner, the registration number and the
expiration date thereof. Except as set forth in Schedule 10.04, GW or
its Affiliates owns or possesses exclusive licenses and all other
valid rights to use (without the making of any payment to any Person
or the obligation to grant rights to any Person) all GW Rights and the
GW Rights constitute all such rights which are presently used in, or
necessary to the conduct of GW's or its Affiliates' business relating
to the GW Products; neither the validity of such items nor the use
thereof by GW or its Affiliates is the subject of any litigation to
which GW or an Affiliate is a party; nor, to the best knowledge of GW,
is any such litigation threatened nor do any facts exist which may
have any material adverse effect on the use of, or the validity of,
the GW Rights; the use by GW or its Affiliates of the GW Rights does
not conflict with valid rights of others in any way which materially
adversely effects or could materially adversely effect the GW Products
or any of them or the transactions contemplated by the GW Relevant
Agreements.
(b) Except as set forth on Schedule 10.04, GW does not know
of any use that has been or is now being made of any GW Rights, except
by GW and by its Affiliates.
(c) Except as set forth on Schedule 10.04, none of the GW
Rights are subject to any Liens.
(d) Except as set forth on Schedule 10.04, to the best
knowledge of GW, none of the GW Rights are under threat of
cancellation or suspension for any reason nor is there any basis for
cancellation or suspension. The GW Rights and the consummation of
the transactions contemplated by the GW Relevant Agreements do not
infringe any trademark, patent, trade name, copyright or other right
of any Third Party. There are no unexpired patents owned by a Third
Party having claims covering any GW Products or covering any method
employed by GW in developing or manufacturing the GW Products or which
could materially adversely affect the GW Products or the transactions
contemplated by the GW Relevant Agreements.
SECTION 10.05. Certain Litigation. Except as set forth on
Schedule 10.05, there are no Proceedings which are existing, pending
or, to the best knowledge of GW, threatened, before any court,
arbitrator, panel, agency or other governmental, administrative or
judicial authority or private arbitration tribunal against or relating
to the GW Rights, the GW Products or
<PAGE>
the transactions contemplated by the GW Relevant Agreements which
could materially adversely affect the GW Products or the transac-
tions contemplated by the GW Relevant Agreements.
SECTION 10.06. Product Liability. (a) Except as set forth on
Schedule 10.06, (i) there is no notice, demand, claim, action, suit,
inquiry, hearing, proceeding, notice of violation or investigation of
a civil, criminal or administrative nature by or before any court or
governmental or other regulatory or administrative agency, commission
or authority against or involving GW or any of its Affiliates (past
or present) concerning any GW Product which is pending or, to the best
knowledge of GW, threatened, relating to or resulting from an alleged
defect in design, manufacture, materials, or workmanship of any GW
Product, or any alleged failure to warn, or from an alleged breach of
express or implied warranties or representations; (ii) there has not
been any Occurrence (as hereinafter defined), which could materially
adversely affect the GW Products; and (iii) there has not been any GW
Product recall, rework, retrofit or post-sale warning by GW or any of
its Affiliates (past or present), or, to the best of GW's knowledge,
any investigation or consideration relating thereto.
(b) For purposes of this Section 10.06 the term "Occurrence"
shall mean any accident, happening or event which is caused or
allegedly caused by any alleged hazard or alleged defect in
manufacture, design, materials or workmanship including, without
limitation, any alleged failure to warn or any breach of express or
implied warranties or representations with respect to, or any such
accident, happening or event otherwise involving, a GW Product which
results or is alleged to have resulted in injury or death to any
person or damage to or destruction of property, or other
consequential damages, at any time.
SECTION 10.07. Compliance. (a) Except as set forth on
Schedule 10.07, GW and its Affiliates possess all Permits required by
any Legal Requirements relating in any way or applicable in any
manner to the execution and delivery of the GW Relevant Agreements or
the performance by GW and its Affiliates of their obligations
thereunder contemplated to be performed at the date these
representations and warranties are given, and GW has no reason to
believe that it or its Affiliates will be unable to obtain any Permits
which are required for the performance of their future obligations
thereunder except, in each case, where the failure to do so would not
have a materially adverse effect on the transactions contemplated by
the GW Relevant Agreements.
<PAGE>
(b) Except as set forth on Schedule 10.07, all of the GW
Products, all of the formulae and ingredients processes, and know-how
used in connection with the manufacture by GW and its Affiliates of
any of the GW Products conform in all material respects to all Legal
Requirements.
SECTION 10.08. Finder. Except for JP Morgan & Co. Inc.,
neither GW, its Affiliates nor any of their respective officers or
directors has employed any broker or finder or other firm,
corporation, agency or other Person that is entitled to a finder's fee
or any type of brokerage commission or fee in relation to or in
connection with the transactions contemplated by the GW Relevant
Agreements.
SECTION 10.09. GW Regulatory Documentation. GW has afforded
W-L full access to all GW Regulatory Documentation relating to the GW
Products.
SECTION 10.10. Transactions Contemplated by GW Relevant
Agreements. In connection with the Closing of this Agreement only,
references in this Article X to transactions contemplated by, or the
performance of obligations under, the GW Relevant Agreements or this
Agreement, or similar references, shall be construed to mean all
transactions or obligations contemplated by this Agreement (other than
transactions or obligations contemplated by this Agreement which will
arise under Operative Documents other than the Closing Documents),
each of the other Closing Documents and the Ranitidine Supply
Agreement.
ARTICLE XI.
Conditions to Closing
Closing of the transactions contemplated by this Agreement
and by each JV Implementation Agreement or other Operative Document
shall be subject to the satisfaction at or prior to such Closing of
the following conditions:
SECTION 11.01. Certain Action. At the Closing Date, no suit,
action, investigation or other proceeding will have been instituted by
any governmental agency of any country or any Person in which it is
sought to restrain, prohibit, invalidate or set aside the transaction
contemplated by the relevant JV Implementation Agreement and/or
other Operative Documents.
SECTION 11.02. Governmental Approvals and Consents. At the
Closing Date, all necessary notifications and filings, if
<PAGE>
any, required to be made in or with respect to any relevant country
will have been made and all necessary governmental approvals, if any,
shall have been received and the prescribed waiting periods will have
expired or been terminated. No government entity shall have
indicated its objection to, or its intent to challenge as violative of
any federal, state or foreign laws, any of the transactions
contemplated by the relevant JV Implementation Agreement and/or
other Operative Documents. In the event a government entity places a
condition on its approval of the transactions as contemplated by any
of the Operative Documents which has a material effect on the existing
or proposed business of the relevant JV Entity or the transactions
contemplated by the Operative Documents, the Parties shall attempt to
negotiate a mutually agreeable modification to the appropriate
Operative Documents.
SECTION 11.03. Representations and Warranties. As of the
relevant Closing Date, the representations and warranties of the
Parties contained in this Agreement shall (subject to the schedules
referred to in Articles IX and X as the relevant Party may deliver to
the other Party prior to such Closing under cover of a notice
specifying that such delivery is made with reference to such Closing
and pursuant to this Section 11.03) be true and correct in all
material respects and the W-L Participant and the GW Participant shall
represent and warrant in writing to the other to the effect set forth
in Articles IX or X; provided, however, that:
(a) references to "GW Products" as used in Article X shall
mean the relevant Ranitidine Product or OTC Switch Product to be
developed, manufactured, marketed, sold or distributed by the
relevant JV Entity in the relevant country;
(b) where a participant in the relevant JV Entity is not a
Party but is an Affiliate of a Party, such representations and
warranties shall, for the purposes of this Section 11.03, be
construed as if references therein to such Party were references
to both that Party and the Affiliate of such Party which is the
participant in the relevant JV Entity; and
(c) references in Articles IX and X to "W-L Relevant
Agreements" or "GW Relevant Agreements" shall mean the Operative
Documents to which W-L or GW, as the case may be, or its
Affiliates is a party which are being entered into in connection
with the relevant Closing.
<PAGE>
SECTION 11.04. Performance of Covenants. Each Party, and
each of their respective Affiliates, shall have performed and complied
in all material respects with each and every covenant, agreement and
condition contemplated by the relevant JV Implementation Agreement
and/or other Operative Documents to be performed or complied with by
it prior to or on the Closing Date.
SECTION 11.05. Authorization of Agreements. All action on
the part of each Party and their respective Affiliates necessary to
authorize the execution, delivery and performance of the relevant JV
Implementation Agreement and/or other Operative Documents, and the
consummation of the transactions contemplated therein, shall have been
duly and validly taken by each of W-L and GW and their respective
Affiliates and each Party shall have been furnished with a certificate
of the Secretary or an Assistant Secretary of the other Party,
setting forth copies of the resolutions or other instruments
authorizing the relevant JV Implementation Agreements and the
Operative Documents and the transactions contemplated therein.
SECTION 11.06. Operative Documents. All Operative Documents
required in order to permit the appropriate JV Entity to conduct JV
Business in the relevant country shall have been executed and
delivered and shall be fully effective in all respects.
SECTION 11.07. Certificate of Compliance. Each of the
Parties shall have delivered to the other Party a certificate signed
by an authorized officer of such Party, representing, warranting and
certifying compliance with the conditions set forth in Sections 11.03,
11.04 and 11.05.
ARTICLE XII.
Transfer of JV Interest; Permitted Transfers
SECTION 12.01. Limitation on Right to Transfer Parties'
Interests. No Party or any Affiliate may sell, assign, pledge,
hypothecate or otherwise transfer in any manner, all or any part of
its individual interest in this Agreement, any of the Operative
Documents, any JV Business, or any JV Entity or in any entity which
holds an interest therein unless such transfer (i) is consented to in
writing by each of the other Parties (in their sole discretion), with
specific reference to this Section 12.01 or (ii) is otherwise
permitted under this Article XII or Article XIV of this Agreement. For
the avoidance of doubt, in
<PAGE>
this Article XII, references to "transfer" shall not include the
appointment of any distributor.
SECTION 12.02. Permitted Transfers. (a) Nothing in this
Article XII shall prevent the transfer:
(i) by any Party of all of its individual interest in this
Agreement, any of the Operative Documents, any JV Business or any
JV Entity if such individual interest is transferred to, and for
so long as such transferee is, a direct or indirect wholly owned
Affiliate of W-L or GW, as the case may be; or
(ii) by any Person to whom a transfer is made pursuant to
clause (i) above to W-L or GW, as the case may be, or to, and for
so long as such Person is, a direct or indirect wholly owned
Affiliate of W-L or GW, as the case may be;
provided, however, that:
(v) notwithstanding the provisions of clause (x) below,
following any transfer permitted by this Section 12.02(a), the
references in clauses (i) and (ii) above to W-L and to GW shall
not be construed as being references to any Person other than the
respective parties to this Agreement at the date hereof;
(w) no transfer may be made pursuant to this Section
12.02(a) unless the proposed transferee shall have agreed to
assume, by express written agreement with the other Parties (in
form and substance satisfactory to them), all of the obligations
of the transferor in respect of the interest being transferred,
and no such transfer shall relieve the transferor of its
obligations under this Agreement or the Operative Documents or
otherwise in respect of the JV Businesses and the JV Entities;
(x) any Person to whom a transfer is made pursuant to and in
accordance with this Section 12.02(a) shall be joined as an
additional party hereto and to the relevant Operative Documents
and shall be deemed to have irrevocably covenanted with the other
Parties hereto to transfer to a Person who is a permitted
transferee under clauses (i) and (ii) of this Section 12.02(a)
all of its interest in this Agreement, the Operative Documents,
all JV Businesses and all JV Entities
<PAGE>
immediately prior to such Person ceasing to be such a permitted
transferee;
(y) not less than all of a Party's interest in any
particular JV Entity may be transferred pursuant to this Section
12.02(a); and
(z) the Parties may agree to restrict such transfers to the
extent they deem necessary or appropriate to allow a JV Entity to
be classified as a partnership for U.S. Federal income tax
purposes.
(b) Notwithstanding the terms of this Section 12.02 and the
ability of the Parties to make Permitted Transfers hereunder, the
Parties hereby agree that, if the terms of this Section 12.02 have
disadvantageous tax consequences to one or both of the Parties in
respect of its or their interest in any JV Entity, the Parties shall
negotiate with each other in good faith modifications to this Section
12.02 insofar as it applies to such JV Entity.
SECTION 12.03. Change of Control. (a) In the event that (i)
a Third Party acquires beneficial ownership (as defined below) of 30%
or more of the voting capital of either GW on the one hand or W-L on
the other hand (the "Affected Party") ("Change of Control"), then W-L
or GW (as the case may be) (the "Non-Affected Party") shall, if it
believes in good faith that such Change of Control is prejudicial to
its JV Interest, have the right within 30 calendar days following
receipt of written notice of, or public announcement of, the
occurrence of the Change in Control at its option and in its sole and
absolute discretion by written notice (the "Acquisition Notice")
either:
(x) to require the Affected Party to, and to cause its
Affiliates to, sell, transfer and convey the whole of the
Affected Party's and such Affiliates' equity interest in all JV
Entities (together the "JV Equity") to the Non-Affected Party, or
as it may direct, at a price to be agreed between GW and W-L or,
if they are unable to agree upon such price within 90 calendar
days, at the Going Concern Value of the relevant JV Equity
determined in accordance with Section 15.03 and taking into
account the arrangements contemplated by Section 12.03(b);
provided, however, that for the purposes of calculating such
Going Concern Value, each Operative Document shall be deemed to
continue for a period of 5 years from the acquisition pursuant to
this clause (x); or
<PAGE>
(y) to require the Affected Party to purchase and accept
conveyance from the Non-Affected Party and its Affiliates of
the whole of their JV Equity at a price to be agreed between GW
and W-L or, if they are unable to agree upon such price within 90
calendar days, at the Going Concern Value of the relevant JV
Equity determined in accordance with Section 15.03 and taking
into account the arrangements contemplated by Section 12.03(b)
and Section 14.03.
For the purposes of this Section 12.03(a), a Person shall be
deemed to have "beneficial ownership" of, and shall be deemed to
"beneficially own", any securities which such Person or any of
its Affiliates is deemed to "beneficially own" within the meaning
of Rule 13d-3 under the Securities Exchange Act of 1934 and the
rules and regulations thereunder.
(b) In the event that the Non-Affected Party elects to
exercise its option under either clause (x) or clause (y) of Section
12.03(a) then:
(i) subject to Section 14.03 hereof, the Parties shall
negotiate in good faith such arrangements as may be required to
ensure the continued operation of the JV Businesses;
(ii) the Affected Party shall, as the case may be, be bound
either (A) to, and to cause its Affiliates to, sell, transfer and
convey the Affected Party's, and such Affiliates', JV Equity to
the Non-Affected Party, or as it may direct, pursuant to clause
(x) above or (B) to purchase and accept conveyance from the
Non-Affected Party and its Affiliates of their JV Equity
pursuant to the terms of clause (y) above;
(iii) each of the Operative Documents (other than this
Agreement) shall, to the extent they relate to any Ranitidine
Product or OTC Switch Product which is then being marketed by any
JV Entity or is being developed therefor, continue in full force
and effect and shall be binding upon each of the Parties or their
respective Affiliates, as the case may be, subject only to the
provisions of Section 14.03; and
(iv) this Agreement, and (save as provided in clause (iii)
above) the other Operative Documents, and the Parties rights and
obligations hereunder and thereunder shall, save as provided by
Sections 14.05 and 15.12, immediately be terminated.
<PAGE>
(c) Without prejudice to the generality of Section 15.12 of
this Agreement but in accordance with the terms thereof, the Parties
agree to keep confidential the terms of this Section 12.03. Each Party
further agrees (i) not to give any indication to any Third Party as to
whether any action, or what circumstances, would give rise to a
Change of Control, (ii) not to inform, directly or indirectly, any
Third Party of what action such Party would or would not take in the
event of a Change of Control, until such time as such Change of
Control has occurred and (iii) to inform the other Party immediately
of any request by any Third Party for information which it would be
prohibited by this Section from divulging.
ARTICLE XIII.
Indemnification
SECTION 13.01. Indemnification by the JV Entities. W-L and
GW shall be indemnified and held harmless by each JV Entity in respect
of all claims, liabilities, damages, losses, expenses (including,
without limitation, legal fees), obligations, liens, assessments,
judgments and fines (all of the foregoing being a "Claim") made by or
owed to any Person to the extent any of the foregoing are for bodily
injuries or damages suffered, or for obligations or liabilities, which
arose out of the conduct of the JV Business of the relevant JV Entity.
Such Claims shall also include, but not be limited to, all Taxes of
any kind, interest, penalties, fines due by any JV Entity in relation
to which W-L or GW may be jointly liable for payment with such JV
Entity and it shall be a term of each JV Implementation Agreement
that the relevant JV Entity agrees to indemnify the Parties under the
terms of this Section 13.01.
SECTION 13.02. Indemnification by W-L. (a) W-L agrees to
indemnify and hold GW harmless from all Claims suffered or paid as a
result of (i) the failure of any of the representations or
warranties made by W-L in this Agreement, any other Operative Document
or pursuant to Section 11.07 to be true and correct in all material
respects as of the relevant Closing Date, (ii) any breach by W-L or
any of its Affiliates of the terms of this Agreement or any of the
Operative Documents, or (iii) Claims made by a Third Party which, if
successful, would constitute a breach of a representation, warranty,
covenant or agreement made by W-L or any of its Affiliates in this
Agreement, any Operative Document or pursuant to Section 11.07.
<PAGE>
(b) W-L agrees to indemnify and hold GW and each of the JV
Entities harmless in respect of Claims made by or owed to any Person
to the extent such Claims are for bodily injuries or damages suffered,
or for obligations or liabilities which arose, in connection with
products developed, marketed, sold or distributed by W-L or any of
its Affiliates (other than products so developed, marketed, sold or
distributed as part of the JV Businesses) except to the extent that
any JV Entity is liable to indemnify the Parties in respect thereof
pursuant to Section 13.01.
SECTION 13.03. Indemnification by GW. (a) GW agrees to
indemnify and hold W-L harmless from all Claims suffered or paid as a
result of (i) the failure of any of the representations or warranties
made by GW in this Agreement, any other Operative Document or pursuant
to Sections 5.08 or 11.07 to be true and correct in all material
respects as of the relevant Closing Date, (ii) any breach by GW or any
of its Affiliates of any terms of this Agreement or any of the
Operative Documents, and (iii) Claims made by a Third Party which, if
successful, would constitute a breach of a representation, warranty,
covenant or agreement made by GW or any of its Affiliates in this
Agreement or any Operative Document or pursuant to Sections 5.08 or
11.07.
(b) GW agrees to indemnify and hold W-L and each of the JV
Entities harmless in respect of Claims made by or owed to any Person
to the extent such Claims are for bodily injuries or damages suffered,
or for obligations or liabilities which arose, in connection with
products developed, marketed, sold or distributed by GW or any of
its Affiliates (other than products so developed, marketed, sold or
distributed as part of the JV Businesses) except to the extent that
any JV Entity is liable to indemnify the Parties in respect thereof
pursuant to Section 13.01.
SECTION 13.04. Indemnification Generally. (a) Any
indemnification of W-L, GW, the JV Entities or their Affiliates
hereunder or under any other Operative Document, shall include and
extend to the benefit of their respective Affiliates and their
respective directors and employees. Any Person that may be entitled to
indemnification under this Agreement or under any other Operative
Document (an "Indemnified Party") shall give notice to the Person
obligated to indemnify it (an "Indemnifying Party") with reasonable
promptness upon becoming aware of the claim or other facts upon which
a claim for indemnification will be based; the notice shall set forth
such information with respect thereto as is then reasonably available
to the Indemnified Party. The Indemnifying Party shall, upon
agreeing irrevo-
<PAGE>
cably in a form and substance reasonably satisfactory to the
Indemnified Party to be liable for all Claims in respect thereof, have
the right to undertake the defense of any such Claim asserted by a
Third Party with counsel reasonably satisfactory to the Indemnified
Party and the Indemnified Party shall cooperate in such defense and
make available all records and materials requested by the Indemnifying
Party in connection therewith at the Indemnifying Party's expense. If
the Indemnifying Party shall have assumed the defense of the claim
with counsel reasonably satisfactory to the Indemnified Party, the
Indemnifying Party shall not be liable to the Indemnified Party for
any legal or other expenses (other than for reasonable costs of
investigation) subsequently incurred by the Indemnified Party in
connection with the defense thereof. The Indemnifying Party shall
not be liable for any Claim settled without its consent, which consent
may not be unreasonably withheld or delayed.
(b) Where any indemnity is claimed by a Party hereunder,
or under any other Operative Document, and the indemnity is in respect
of any claim, loss, liability or obligation owed by one Party to the
other, the Party claiming such indemnity shall take all reasonable
steps (the cost of which shall be borne by the Indemnifying Party) to
mitigate such claim, loss, liability or obligation.
(c) Any indemnification hereunder, or under any other
Operative Document, shall be made on an after tax basis and net of any
insurance proceeds recovered by the relevant Indemnified Party;
provided, however, that if, following the payment to an Indemnified
Party of any amount under this Article XIII, or under any other
Operative Document, such Indemnified Party recovers any insurance
proceeds in respect of the Claim for which such indemnification
payment was made, the Indemnified Party shall promptly pay an amount
equal to the amount of such proceeds (but not exceeding the amount of
such indemnification payment) to the Indemnifying Party.
SECTION 13.05. Survival of Representations and Warranties.
The representations and warranties contained herein shall survive (i)
in respect of the representations and warranties set forth in Sections
10.02(b), 10.04, 10.05, 10.06, 10.07 and 10.09, to the extent such
representations and warranties relate to GW Products or GW Rights, one
year from the relevant Launch Date or, if development work in respect
of that Ranitidine Product or OTC Switch Product in connection with
which such representations and warranties were given is terminated
prior to any such sale, one year from such termination or (ii) in
respect of all other representations and warranties two years from the
date of this
<PAGE>
Agreement; provided, however, that a claim may be brought in respect
of any breach of representation or warranty after the date which is
one year from the date of such commercial sale or termination or two
years from the date of this Agreement, as the case may be, if the
Person seeking to make such claim shall have given written notice to
the person against whom such claim is sought to be made prior to such
date specifying the breach complained of.
ARTICLE XIV.
Term and Termination
SECTION 14.01. Term of Agreement. Except in those
circumstances referred to in Sections 12.03(b)(iv) and 14.02 it is
understood and agreed by each of the Parties that this Agreement is
intended to continue without interruption until specifically
terminated by unanimous consent of the Parties, and that upon
termination the rights and obligations of the Parties hereunder shall
continue to be in effect until the final distribution of the assets
of all JV Entities to the Parties.
SECTION 14.02. Liquidation; Breach; Optional Termination.
(a) W-L or GW may terminate this Agreement by written notice to the
other:
(i) if proceedings shall be commenced or a petition shall be
filed in a court of competent jurisdiction seeking (x) relief in
respect of GW (in the case of a notice given by W-L) or W-L (in
the case of a notice given by GW) as the case may be (in this
clause (i), the "Identified Party"), or of a substantial part of
the property or assets of the Identified Party, under Title 11 of
the United States Code, as now constituted or hereafter amended,
or any other provision of Federal or state bankruptcy,
insolvency, receivership or similar law in any jurisdiction
(including Part II of the United Kingdom's Insolvency Act 1986),
(y) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official of the Identified
Party, or a substantial part of its property or assets or (z) the
winding-up or liquidation of the Identified Party; and such
proceedings or petition shall continue undismissed for 60 days,
or an order or decree approving or ordering any of the foregoing
shall be entered;
(ii) if a Party (in this clause (ii) and Section 14.02(b),
the "Relevant Party") shall be in breach or de-
<PAGE>
fault in the performance of any obligation under this Agreement
or any of the Operative Agreements and such breach is not
remedied within six months of receipt by the Relevant Party of
written notice specifying, in reasonable detail, the breach or
default complained of, referring specifically to this Section
14.02 and requiring that such breach or default be remedied
within six months of receipt; provided, however, that such notice
is given within 60 calendar days of the date on which the Party
giving such notice first knew, or should, in all the
circumstances, reasonably have known of the relevant breach; and
provided, further, that failure to remedy such breach or default
would have a materially adverse affect on the JV Businesses as
a whole;
(iii) effective on the 20th anniversary of the Launch Date
of a Ranitidine Product by the U.S. Partnership or any subsequent
fifth anniversary thereof; provided, however, that such written
notice of termination shall have been provided not less than 5
years and not more than 6 years prior to the effective date of
such termination; or
(iv) effective on the 25th anniversary of the Launch Date of
a Ranitidine Product by the U.S. Partnership or any subsequent
fifth anniversary thereof (the "Effective Date"); provided,
however, that such written notice of termination shall have been
provided not less than 5 years and not more than 6 years prior to
the Effective Date.
(b) In the event that a Party is entitled to terminate this
Agreement pursuant to Section 14.02(a)(ii) and, at that time, any
Ranitidine Product or OTC Switch Product is then being marketed by any
JV Entity or is being developed therefor, such Party (the "Entitled
Party") shall be entitled to elect, in the written notice given
pursuant to Section 14.02(a), that the JV Entities and the JV
Businesses in respect of such products and this Agreement and the
other Operative Documents shall continue (subject to Section 14.03)
only in respect of such products and this Agreement and the other
Operative Documents shall otherwise immediately be terminated.
(c) In connection with the making of an election pursuant to
Section 14.02(b), the Parties shall negotiate in good faith such
arrangements as may be required to ensure the continued operation of
the JV Businesses.
(d) If notice is given pursuant to Section 14.02(a)- (iii)
and any Ranitidine Product or OTC Switch Product is then being
marketed by any JV Entity or is being developed therefor:
<PAGE>
(i) the JV Entities and the JV Businesses, this Agreement
and the other Operative Documents shall continue in respect of
all such products until such time as the arrangements or
agreements are terminated pursuant to this Agreement or until
such time as both Parties may agree otherwise and this Agreement
shall in all other respects immediately be terminated; and
(ii) the Parties shall negotiate in good faith such
arrangements to ensure the continued operation of the JV
Businesses with respect to such products.
(e) If notice is given pursuant to Section 14.02(a)(iv) by
GW and any Ranitidine Product or OTC Switch Product (the "Existing
Product") is then being marketed by any JV Entity or is being
developed therefor, GW shall, on the Effective Date, purchase and
accept conveyance from W-L and its Affiliates of the whole of W-L's
and its Affiliates' JV Equity at a price to be agreed between the
Parties or, if they are unable to agree upon such price within 90
calendar days, at the Going Concern Value of the relevant JV Equity as
of the Effective Date determined in accordance with Section 15.03,
provided, however, that for the purposes of calculating such Going
Concern Value, each Operating Document relating to the Existing
Product or Products and the JV Business relating thereto shall be
deemed to continue for a period of 15 years from the Effective Date.
(f) If notice is given pursuant to Section 14.02(a)(iv) by
W-L, all JV Entities, JV Businesses and all Operative Documents shall
immediately terminate and W-L shall not be entitled to any
compensation therefor.
SECTION 14.03. Continued Arrangements. If any JV Entities or
JV Businesses, and the provisions of any Operative Documents, are to
continue in accordance with Sections 12.03(b) or 14.02(b) (a
"Continuation") the then existing Operative Documents relating to the
Ranitidine Products and OTC Switch Products then being marketed by any
JV Entity or being developed therefor shall continue as set forth in
those Sections except as may otherwise be agreed by the relevant
Parties and except that in the case of any Continuation pursuant to
Section 12.03(b) or 14.02(b), each existing license agreement,
services agreement, supply agreement or other Operative Document which
is so to continue shall only continue, for a period of 5 years from
the date of the Acquisition Notice or the notice given pursuant to
Section 14.02(a) provided, however, that any such Operative
Documents may be terminated by the Non-Affected Party or the
<PAGE>
Entitled Party, as the case may be, at any time on reasonable
notice (not to be less than 3 months).
SECTION 14.04. Winding Up and Liquidation. During the
six-month period following receipt of a notice of termination pursuant
to Section 14.02, and pending the distribution and payments required
by Section 14.02 and subject to any continuing business under Sections
12.03(b) and 14.02(b) and the other rights of the Parties under those
Sections, the JV Entities shall continue solely for the purposes of
winding up their affairs in an orderly manner, liquidating such JV
Entities and their respective assets, and satisfying the claims of
their creditors and no Party shall take any action that is
inconsistent with, unnecessary to or inappropriate for such
purposes. During the period of winding up, the rights and obligations
set forth in this Agreement with respect to the management of the JV
Entities will continue and the Governing Board of each JV Entity shall
continue to make all decisions relating to the conduct of any business
or operations, including, without limitation, any decisions relating
to the sale or other disposition of that JV Entity's assets.
SECTION 14.05. Survival of Rights. For the avoidance of
doubt any exercise by any of the Parties of their rights to terminate
this Agreement and/or the Operative Documents under Article XII or
this Article XIV shall be without prejudice to any other rights
(including, without limitation, any of the remedies set forth in
Section 15.13) the Parties may have in respect of any breach or
default by the other Party or any of its Affiliates of its obligations
hereunder or under the Operative Documents, or otherwise.
ARTICLE XV.
General
SECTION 15.01. Expenses. Except as expressly provided
herein, each Party shall bear its own expenses, fees, costs and
disbursements, and those of its Affiliates, incurred in connection
with this Agreement and the Operative Documents and the consummation
of the transactions contemplated hereby and thereby and preparation
therefor, including:
(a) in respect of W-L, all expenses, fees, costs and
disbursements of Bear Stearns & Co. Inc. arising in connection
with the transactions contemplated by this Agreement;
<PAGE>
(b) in respect of GW, all expenses, fees, costs and
disbursements of JP Morgan & Co. Inc. arising in connection with
the transactions contemplated by this Agreement; and
(c) all Taxes incurred in connection with the assignment
and transfer of assets to any JV Entity; provided, however, that,
to the extent legally able to do so, each Party shall, and shall
cause its Affiliates and the JV Entities to, deliver to any other
Party or any Affiliate of any Party or JV Entity that is required
by law to collect any Taxes exemption certificates in form and
substance satisfactory to such Party, Affiliate or JV Entity, as
the case may be, with respect to such Taxes.
SECTION 15.02. Assignment and Binding Effect. Except as
provided in Article XII or Section 14.02(e), none of the rights or
obligations hereunder shall be assignable by any Party without the
prior written consent of the other Parties. This Agreement shall be
binding upon and inure to the benefit of the Parties and their
respective permitted successors and assigns.
SECTION 15.03. Inability To Agree Upon Value. In the event
the Parties cannot agree on any determination of compensation or
value required by Sections 5.04(e), 5.06(e), 12.03(a) or 14.02(e)
within such period as this Agreement may provide for such agreement to
be reached by the Parties, each of W-L and GW shall choose an
investment banker to determine such compensation or value, which value
shall be the average of the two values determined by such investment
bankers, unless such values vary by more than ten percent, in which
case the compensation or value shall be one or the other of such
values as decided by an investment banker selected by the first two
investment bankers.
SECTION 15.04. Corporate Names. In the event of the
transfer by any Party (the "Exited Party") of the whole of its
and its Affiliates' JV Interest to any Third Party or to the
other Party or its Affiliates pursuant to Section 12.02 or to the
other Party or its Affiliates pursuant to Article XIV, the
successor to such JV Interest and the other Party shall cease,
and shall ensure that each of their Affiliates and each of the JV
Entities cease, to use any corporate name or logo of the Exited
Party, or any colorable imitation thereof, in connection with the
JV Businesses or otherwise.
SECTION 15.05. Governing Law; Jurisdiction; Consent to
Service of Process; Agent for Service. (a) This Agreement shall be
governed, construed and enforced in accordance with the law of
<PAGE>
the State of New York without regard to principles of conflicts of
law.
(b) Each of the Parties hereby irrevocably and uncon-
ditionally submits, for itself and its property, to the jurisdiction
of any New York State court sitting in New York County or any Federal
court of the United States sitting in the Borough of Manhattan in the
City of New York, and any appellate court from any such court, in any
suit, action or proceeding arising out of or relating to this
Agreement or any of the Operative Documents, or for recognition or
enforcement of any judgment, and each of the Parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of
any such suit, action or proceeding may be heard and determined in
such New York State court or, to the extent permitted by law, by
removal or otherwise, in such Federal court. It shall be a condition
precedent to each Party's right to bring any such suit, action or
proceeding that such suit, action or proceeding, in the first
instance, be brought in such New York State court or, to the extent
permitted by law, by removal or otherwise, in such Federal court
(unless such suit, action or proceeding is brought solely to obtain
discovery or to enforce a judgment), and if each of such New York
State court and such Federal court refuses to accept jurisdiction with
respect thereto, such suit, action or proceeding may be brought in any
other court with jurisdiction. Neither Party may move to (i) transfer
any such suit, action or proceeding from such New York State court or
Federal court to another jurisdiction, (ii) consolidate any such suit,
action or proceeding brought in such New York State court or Federal
court with a suit, action or proceeding in another jurisdiction or
(iii) dismiss any such suit, action or proceeding brought in such New
York State court or Federal court for the purpose of bringing the same
in another jurisdiction. Each Party agrees that a final judgment in
any such suit, action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any
other manner provided by law.
(c) Each of the Parties hereby irrevocably and uncon-
ditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of
or relating to this Agreement or any of the Operative Documents in any
New York State court sitting in New York County or any Federal court
sitting in the Borough of Manhattan in the City of New York. Each
Party hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such
suit, action or proceeding in any such court and further waives the
right to
<PAGE>
object, with respect to such suit, action or proceeding, that
such court does not have jurisdiction over such Party.
(d) Each Party irrevocably consents to service of process on
it or any agent for service appointed from time to time (including
agents for service appointed pursuant to clause (e) of this Section
15.05) in the manner provided for notices in Section 15.06 with
respect to any action or proceeding in a New York State court sitting
in New York County or any Federal court sitting in the Borough of
Manhattan in the City of New York. Nothing in this Agreement shall
affect the right of either Party to serve process in any other manner
permitted by law.
(e) GW hereby designates and appoints Glaxo Wellcome
Americas Inc., and such other persons (reasonably satisfactory to W-L)
hereafter selected by it, irrevocably agreeing in writing so to serve,
as its agent to receive on its behalf service of all process in any
proceedings referred to in clause (b) of this Section 15.05, such
service being hereby acknowledged by GW to be effective and binding
service in every respect.
SECTION 15.06. Notices. All notices, demands, requests and
other communications required or permitted to be given hereunder shall
be in writing and deemed duly given on the date delivered by hand,
mailed by registered or certified mail, postage prepaid, or by
overnight courier or by facsimile transmission the receipt of which
is confirmed by telephone, to the respective Parties at the following
addresses (or at such other address for a Party as shall be specified
by like notice):
if to W-L or any W-L Participant:
Warner-Lambert Company
201 Tabor Road
Morris Plains, New Jersey 07950
United States
Attn: (1) Vice President, Planning
Investment and Development
and (2) Vice President and General
Counsel
Facsimile: 201-540-3927
<PAGE>
if to GW or any GW Participant:
Glaxo Wellcome plc
Lansdowne House
Berkeley Square
London W1X 6BQ
England
Attn: Company Secretary
Facsimile: 0171-408-0228
SECTION 15.07. Parties in Interest. Nothing in this
Agreement, express or implied, is intended or shall be construed to
confer upon or give to any Person other than the Parties any rights,
benefits or remedies of any nature whatsoever under or by reason of
this Agreement, all of which shall be for the sole and exclusive
benefit of the Parties.
SECTION 15.08. Press Releases. All press releases or other
public communication relating to the terms of this Agreement, the JV
Entities and the other Operative Documents (other than announcements,
summaries or reports of previously disclosed information) shall be
subject, except as otherwise required by law (in which case the
relevant Party will if practicable allow the other Party an
opportunity to review a draft thereof prior to release), to the prior
approval of each of W-L and GW, which approval shall not be
unreasonably withheld.
SECTION 15.09. Headings. The headings of the Sections and
Articles of this Agreement are inserted as a matter of convenience and
for reference purposes only, and are of no binding effect.
SECTION 15.10. Entire Agreement; Amendment; Termination of
Existing Arrangements; Severability. (a) As at the Closing Date of
this Agreement, this Agreement (including the Schedules hereto) and
the Operative Documents represent the entire understanding and
agreement between the Parties with respect to the subject matter
hereof; provided, however, that (i) the Original Agreement and the
other Operative Documents (as defined in the Original Agreement) shall
continue to govern with respect to all periods prior to the date of
this Agreement, (ii) the Standstill Agreement (as defined in the
Original Agreement) shall remain unamended and in full force and
effect and (iii) the other Operative Documents (as defined in the
Original Agreement) shall, unless specifically terminated or amended
hereby or pursuant hereto, remain unamended and in full force and
effect. This Agreement can be amended, modified, supplemented,
extended, terminated (except as provided in Article XII or XIV
<PAGE>
hereof), discharged or charged only by an agreement in writing which
makes specific reference to this Section and which is signed by all
the Parties.
(b) If and to the extent that any court of competent
jurisdiction holds any provision (or any part thereof) of this
Agreement to be invalid or unenforceable, such holding shall not
affect the validity of the remainder of this Agreement.
SECTION 15.11. Waiver and Compliance. Any failure of GW or
W-L to comply with any obligation, covenant, agreement or condition
herein contained may be expressly waived, in writing only, by the
other Party and such waiver shall be effective only in the specific
instance and for the specific purpose for which made or given.
SECTION 15.12. Confidentiality. (a) Neither Party shall, or
shall permit their Affiliates to, disclose to any Third Party any
information (that is not publicly available or generally known other
than by breach of the provisions of this Agreement or made available
by a Third Party which is not in breach of an obligation of
confidentiality):
(i) regarding the terms of this Agreement and of the other
Operative Documents and in particular the terms of the provisions
relating to a Change of Control contained in Section 12.03 hereof
or in any other of the Operative Documents; or
(ii) obtained by such Party or its Affiliates pursuant to or
in connection with the negotiation, delivery and performance of
this Agreement or the other Operative Documents or the
consummation of the transactions contemplated thereby to any
Person, other than its Affiliates;
except in each case:
(v) with the prior written consent of the other Party;
(w) to the extent necessary to comply with the
requirements of the Securities and Exchange Commission, the London
Stock Exchange and other regulatory authorities, in which event
the Party making such disclosure shall so notify the other Party
as promptly as practicable (and if possible, prior to making such
disclosure) and shall seek confidential treatment of such
information;
<PAGE>
(x) to the extent necessary to comply with law or the valid
order of a court of competent jurisdiction, in which event the
Party making such disclosure shall so notify the other Party as
promptly as practicable (and if possible, prior to making such
disclosure) and shall seek confidential treatment of such
information;
(y) in connection with enforcement of such Party's rights
hereunder; or
(z) to a professional advisor to such Party or its
Affiliates in connection with the performance by such Party or
its Affiliates of its obligations hereunder or thereunder.
(b) Upon termination of this Agreement or any Permitted
Transfer to a Third Party, each Party will return all documents,
work papers and other material of the other Party, specifically
requested to be returned by a Party in writing, relating to the
transactions contemplated hereby and by the Operative Documents, and
all copies of such materials, whether so obtained before or after the
execution hereof, to the Party furnishing the same. The obligations of
the Parties under this Section 15.12 shall survive the termination of
this Agreement.
SECTION 15.13. Specific Enforcement. Each Party acknowledges
and agrees that the other Party would be irreparably damaged in the
event any of the provisions of this Agreement or the Operative
Documents were not performed by it in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that each
Party shall be entitled to an injunction or injunctions to prevent
breaches of such provisions and specifically to enforce such
provisions, in addition to any other remedy to which such Party may be
entitled, at law or in equity.
SECTION 15.14. Counterparts. This Agreement may be executed
in counterparts, and by different Parties on separate or the same
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the Parties have caused this Agreement
to be duly executed in their respective names and on their behalf, all
as of the date first above written.
WARNER-LAMBERT COMPANY,
By /s/ C. M. Costa
-----------------------------------
Name: C. M. Costa
Title:
GLAXO WELLCOME plc,
By /s/ Paul A. Holcombe, Jr.
-----------------------------------
Name: Paul A. Holcombe, Jr.
Title:
Warner-Lambert Purchases Glaxo Wellcome's Interest in
Warner Wellcome OTC Joint Venture
Joint Venture for Rx to OTC Switch Products Restructured
Morris Plains, N.J., July 1, 1996 -- Warner-Lambert Company
announced today that it has purchased Glaxo Wellcome's U.S. and
European interest in the Warner Wellcome joint venture. Purchase
agreements for Glaxo Wellcome interests in Canada, Mexico,
Australia and New Zealand are expected to be signed in the third
quarter, 1996. The purchase price for the entire transaction is
$1.05 billion. The new name of the expanded Warner-Lambert OTC
(over-the-counter) business will be Warner-Lambert Consumer
Healthcare.
This purchase solidifies Warner-Lambert's position as one of
the world's largest OTC marketers, bringing a variety of
well-known OTC products, such as Sudafed, Actifed, Neosporin, and
Nix, directly under the Warner-Lambert name.
Melvin R. Goodes, chairman and chief executive officer,
stated, "This purchase is strategically important for the
long-term, worldwide growth of Warner-Lambert's consumer health
care business. It represents a giant step on the path to achieving
our goal of becoming the leading OTC marketer by the end of the
decade."
more...
<PAGE>
Warner-Lambert Purchases Glaxo Wellcome's Interest in
Warner Wellcome OTC Joint Venture
Joint Venture for Rx to OTC Switch Products Restructured
Of the 22 consumer product categories in which the Company
competes, Warner-Lambert will now directly hold the number one or
number two position in 17 of them. The Company will now assume the
number one position in the OTC upper respiratory products category
in the U.S. and the U.K., in addition to the first aid and lice
treatment categories in the U.S. This purchase complements
existing market leadership positions in allergy relief, anti-itch
products, cough tablets, denture cleanser tablets and mouthwash.
Upon completion of the transactions in the Canada and Australia,
the Company will also assume the number one position in OTC upper
respiratory products category in these countries.
The Company also announced today the restructuring of the
50/50 joint venture agreement with Glaxo Wellcome to market Glaxo
Wellcome's Rx to OTC switch products. The restructuring now
includes Wellcome's Rx to OTC switch products. Under the terms of
this agreement, Zovirax OTC, which was previously marketed in
certain countries under the Warner Wellcome joint venture, will
now be marketed under the Rx to OTC switch joint venture. Switch
products currently marketed include Zantac 75 (in the U.S. and
U.K.) for the treatment of heartburn, acid indigestion and sour
stomach; Beconase (in the U.K.) for the treatment of hay fever;
and Zovirax (in a number of European markets) for the treatment of
cold sores.
more...
<PAGE>
Warner-Lambert Purchases Glaxo Wellcome's Interest in
Warner Wellcome OTC Joint Venture
Joint Venture for Rx to OTC Switch Products Restructured
Warner-Lambert is a worldwide company devoted to discovering,
developing, manufacturing, and marketing quality consumer health
care, pharmaceutical, and confectionery products. It employs
approximately 37,000 people.
NOTE TO EDITORS: Warner-Lambert's news releases are available
at no charge through PR Newswire's Company News On-Call fax
service. For a menu of Warner-Lambert news releases or to retrieve
a specific release, call 800-758-5804, extension 958887 or
htt://www.prnewswire.com/cnoc/exec/menu?958887 on the Internet. A
free corporate logo to accompany this story is available
immediately via Wieck Photo Database to any media with telephoto
receiver or electronic darkroom (PC or MacIntosh) capable of
accepting overhead transmissions. Call 214-392-0888 to retrieve
logo./
###
Contact: Stephen J. Mock, 201-540-6696, Jeff Baum,
201-540-2145 or Jennifer Mann, 201-540-4268 (media); and George
Shields, 201-540-6916 or Jack Howarth 201-540-4874 (investors)./
###
