<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1997 Commission File Number 0-19373
BIOMATRIX, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3058261
(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
65 Railroad Avenue, Ridgefield, N.J. 07657
(Address of principal executive offices) (Zip Code)
(201)945-9550
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
(1) Yes X No ____
----
The number of shares outstanding of the issuer's common stock as of the latest
practicable date:
<TABLE>
<CAPTION>
Class March 31, 1997
----- --------------
<S> <C>
Common stock, $ 0.0001 par value 10,755,644
</TABLE>
<PAGE> 2
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
10.1 United States License Agreement dated February 7, 1997 between
Biomatrix, Inc. and American Home Products Corporation.
(Confidential treatment requested. Confidential portions have
been omitted and filed separately with the Commission.)
10.2 International License Agreement dated February 7, 1997 between
Biomatrix, Inc. and American Home Products Corporation.
(Confidential treatment requested. Confidential portions have
been omitted and filed separately with the Commission.)
10.3 Supply Agreement dated February 7, 1997 between Biomatrix,
Inc. and American Home Products Corporation. (Confidential
treatment requested. Confidential portions have been omitted
and filed separately with the Commission.)
10.4 Trademark License Agreement dated February 7, 1997 between
Biomatrix, Inc. and American Home Products Corporation.
(Confidential treatment requested. Confidential portions have
been omitted and filed separately with the Commission.)
*11 Computation of Earnings Per Share
*27 Financial Data Schedule
B. REPORTS ON FORM 8-K
* Incorporated by reference to registrant's quarterly report on Form 10-Q
filed with the Securities and Exchange Commission on May 15, 1997.
<PAGE> 3
BIOMATRIX, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by
the undersigned thereunto duly authorized.
DATE: November 24,1998 BIOMATRIX, INC.
By: /s/ Rory B. Riggs
---------------------------
Rory B. Riggs
President
<PAGE> 1
UNITED STATES LICENSE AGREEMENT
THIS AGREEMENT is made as of the 7th day of February 1997 by and
between BIOMATRIX, INC., a Delaware corporation, having its principal office at
65 Railroad Avenue, Ridgefield, New Jersey 07657, U.S.A. ("Biomatrix") and
AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation having its principal
office at Five Giralda Farms, Madison, New Jersey 07990, U.S.A., acting through
its unincorporated Wyeth-Ayerst Laboratories division (such entities are
together defined herein as "Wyeth").
WHEREAS, Biomatrix is engaged in the development and manufacture of the
Products (as hereinafter defined);
WHEREAS, Wyeth desires to enter into an exclusive (except as provided
herein) license to market and sell Products and Extended Products (as
hereinafter defined) in the Territory (as hereinafter defined), and Biomatrix is
willing to grant such rights to Wyeth;
WHEREAS, on the terms and subject to the conditions set forth in the
Supply Agreement (as hereinafter defined), Wyeth desires to purchase from
Biomatrix, and Biomatrix desires to sell to Wyeth, Wyeth's requirements of
Products and Extended Products in the Territory; and
WHEREAS, as of the date hereof, Biomatrix and Wyeth are entering into
the International Agreement (as defined below), the Supply Agreement (as defined
below) and the Trademark Agreement (as defined below);
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants of the parties hereto, it is hereby agreed as follows:
1. DEFINITIONS. In this Agreement, the following words and expressions
shall have the following meanings:
1.1. "Additional Period" shall mean that term as defined in Section
3.1.
1.2. "Affiliate" shall mean, with respect to any party, any Person
that, directly or indirectly, is controlled by, controls or is under common
control with such party, but only for so long as such relationship exists.
1.3. "Commercial Sales" means those sales by Wyeth or its Affiliates to
non-affiliated third-party purchasers that shall have commenced with defined
prices and are supported by normal sales promotion activities.
<PAGE> 2
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1.4. "Competing Product" shall mean any
*
1.5. "Confidential Information" shall mean that term as defined in
Section 8.1.
1.6. "Contract Quarter" shall mean, with respect to the Territory, the
three (3) month period commencing on the first day of the first fiscal quarter
beginning immediately after the Launch Date in the Territory (unless the Launch
Date is the first day of a fiscal quarter, in which case the first Contract
Quarter shall commence on such day) and ending on the last day of the fiscal
quarter and each fiscal quarter thereafter throughout the term of this
Agreement.
1.7. "Contract Year" shall mean, with respect to the Territory, the
twelve (12) month period commencing on the first day of the first fiscal quarter
beginning immediately after the Launch Date in the Territory (unless the Launch
Date is the first day of a fiscal quarter, in which case the first Contract Year
shall commence on such day) and each separate successive twelve (12) month
period thereafter.
1.8. "Designee" shall mean a designee contract field sales force.
1.9. "Development Program" shall mean the development program as set
forth in Section 6 hereof.
1.10. "Effective Date" shall have the meaning set forth in Section 25
hereof.
1.11. "Employment Costs" shall mean, with respect to any employee of
Biomatrix, for any period, the aggregate amount of
*
1.12. "Extended Product" shall mean
*
1.13. "Field" shall mean the
*
1.14. "Improvements" shall mean
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 3
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1.15. "Initial Product" shall mean hylan gel-fluid 20 (hylan G-F 20)
Synvisc currently approved as a device with a CE mark for the intra-articular
treatment by viscosupplementation of osteoarthritis of the knee, to be supplied
in pre-filled syringes packaged ready for use, complying with Product Approvals
in the Territory as a device.
1.16. "Initial Product Specifications" shall mean the specifications
for the Initial Product set forth in Exhibit A, as such specifications may be
modified from time to time by agreement of the parties to reflect Improvements.
1.17. "Launch Date" shall mean, with respect to the Territory, the date
of national introduction for commercial sale of the Product by Wyeth or an
Affiliate of Wyeth in the Territory.
1.18. "Net Revenues" shall mean for a specified period the total gross
invoice price received from the sale of all Products and Extended Products by
Wyeth and its Affiliates in the Territory during such period to non-Affiliated
wholesalers, hospitals, retail pharmacies, patients and other third party
purchasers,
*
Such amounts shall be determined from the books and records of Wyeth and its
Affiliates maintained in accordance with generally accepted accounting
principles, consistently applied.
1.19. "New Product" shall mean
*
1.20. "Non-competition Period" shall mean the period commencing on the
Effective Date and continuing until
*
thereafter.
1.21. "Patents" shall mean Letters Patent or similar statutory rights
relating to any Products (including any continuation-in-part, continuation or
division thereof or substitute thereof), and patent applications which are
pending as of the Effective Date, in each case as set forth in Exhibit B hereto,
together with any grant of patent term extensions therefor if and when such are
granted.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 4
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1.22. "Person" or "person" shall mean an individual, a corporation, a
partnership, a trust, an unincorporated organization or a government or any
agency or political subdivision thereof.
1.23. "Product Approvals" shall mean those regulatory approvals
required for promotion, pricing, marketing and sale of a Product or Extended
Product in the Territory.
1.24. "Product(s)" shall mean the Initial Product, together with any
Improvements (as defined in Section 1.14) to the Initial Product.
1.25. "Product Specialist" shall mean that terms as defined in Section
9.10.
1.26. "Reimbursement Approvals" shall mean any and all governmental and
other approvals necessary for the buyer of Products or Extended Products to
claim reimbursement for the purchase of the Products or Extended Products from
private or public health insurance organizations in the Territory.
1.27. "Supply Agreement" shall mean the Supply Agreement of even date
herewith by and between Biomatrix (or one of its Affiliates) and Wyeth (or one
of its Affiliates) as the same may be amended, supplemented, modified or
restated and as in effect from time to time, and any replacement supply
agreement with respect to Products and Extended Products by and between
Biomatrix (or one of its Affiliates) and Wyeth (or one of its Affiliates).
1.28. "Territory" shall mean the United States and its possessions.
1.29. "Trademarks" shall mean (i) the trademark Synvisc(R) and each
other mark, trademark or service mark described on Exhibit B hereto, and (ii)
any other marks, trademarks or service marks, as may be agreed upon in writing
from time to time by the parties hereto for use by Wyeth in connection with the
promotion, marketing and sale of the Product under this Agreement.
1.30. "Trademark Agreement" shall mean the Trademark License Agreement
of even date herewith by and between Biomatrix (or one of its Affiliates) and
Wyeth (or one of its Affiliates) as the same may be amended, supplemented,
modified or restated and as in effect from time to time, and any replacement
Trademark License Agreement by and between Biomatrix and Wyeth.
1.31. "Unit" shall mean, with respect to the Initial Product, a 2.0 ml
syringe of the Initial Product.
1.32. "International Agreement" shall mean the agreement of even date
herewith by and between Biomatrix (or one of its Affiliates) and Wyeth (or one
of its Affiliates)
<PAGE> 5
-5-
relating to the marketing of Products and Extended Products in the Regions as
defined therein, as the same may be amended, supplemented, modified or restated
and as in effect from time to time.
1.33. "United States Consumer Price Index" shall mean the Consumer
Price Index, All Items, United States, as published by the Bureau of Labor
Statistics.
1.34. "U.S. Dollars" and "US$" shall mean the lawful currency of the
United States of America.
2. GRANT OF RIGHTS; ACCEPTANCE; EXCLUSIVITY; CERTAIN PAYMENTS.
2.1. Grant of License.
(a) Subject to the terms and conditions hereinafter set forth,
Biomatrix hereby grants to Wyeth an exclusive (except as to Biomatrix's right to
promote, market and sell the Products and Extended Products as set forth in
Sections 2.3 and 9.10) license (without the right to appoint sub-licensees,
sub-agents or subdistributors) under the Patents to import, promote, market,
offer for sale and sell Products and Extended Products for use in the Field
within the Territory. Such Products and Extended Products shall be packaged and
supplied by Biomatrix or an Affiliate of Biomatrix to Wyeth pursuant to the
Supply Agreement.
(b) Except as specifically provided to the contrary herein, the
foregoing license shall not be construed (i) to effect any sale of proprietary
Biomatrix technology, (ii) to grant any license relating to Biomatrix's
proprietary methods of formulating, fabricating and manufacturing the Products
and Extended Products, (iii) to grant Wyeth any rights in or to the use of any
proprietary technology or Patents, or Trademarks of Biomatrix by implication or
otherwise. During the term of this Agreement Wyeth shall neither seek customers
for the Products or Extended Products outside the Territory except as provided
in the International Agreement, nor establish any branch or maintain any
distribution facilities outside the Territory for the promotion, marketing, sale
or distribution of Products or Extended Products outside the Territory except as
provided in the International Agreement.
2.2. Acceptance of Obligations; Commercially Reasonable Efforts
(a) Wyeth hereby accepts the license granted in section 2.1 above and
hereby agrees to use Commercially Reasonable Efforts (as defined below), at all
times during the term of this Agreement, to import, promote, market, offer for
sale and sell the Products and Extended Products in the Territory.
"Commercially Reasonable Efforts" in this Agreement shall mean that Wyeth shall
use generally the * and shall be such as are commercially reasonable after
taking into account the establishment of the Product or Extended Product in the
marketplace and the * of the Product or Extended Product. * is not intended to
be a substitute for determining the Commercially Reasonable Efforts of Wyeth
under this Section 2.2.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 6
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Wyeth shall promote the sale of Products and Extended Products through its sales
force, which shall receive training and support and have skills and resources
commensurate with those of Wyeth's sales force for other products which are of a
similar nature as the Products and Extended Products. Wyeth has no authority to
appoint any subagent, subdistributor, or other person to promote the sale of the
Products or Extended Products or to otherwise perform any of Wyeth's obligations
hereunder and agrees to refrain from using any such subagents, subdistributors
or other persons.
(b) Subject to delivery to Wyeth by Biomatrix of Wyeth's (i) launch
quantities as set forth on Exhibit C to the Supply Agreement and (ii)
*
of the first Contract Year sample quantities of the Initial Product, each
ordered in accordance with the terms of this Agreement and the Supply Agreement,
the Launch Date shall occur within
*
of the Effective Date or Product Approval date, whichever is later.
2.3. Conversion to Co-promotion or Co-exclusive License.
(a)
*
then Biomatrix may, at its option, elect to co-promote the Products and Extended
Products in the Territory either itself (or through an Affiliate) or with a
Designee selling for Wyeth's account.
*
If Biomatrix elects to convert this Agreement to a co-promotional arrangement
pursuant to the provisions of this Section 2.3, then Biomatrix (or an Affiliate)
or its Designee shall be compensated as follows:
*
If Biomatrix elects to co-promote the Products and Extended Products in the
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 7
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Territory under this Section 2.3(a), then Biomatrix (or an Affiliate) or its
Designee may co-promote under the Trademark in the Territory.
(b)
*
shall fail to exceed,
*
then Biomatrix may elect (i) to co-promote the Products and Extended Products
under the Trademark for Wyeth's account itself (or through an Affiliate) or
through the use of a Designee in the Territory or (ii) to convert Wyeth's
license rights in the Territory to co-exclusive and co-market the Products and
Extended Products itself (or through an Affiliate) in the Territory, and/or
appoint a Designee in the Territory and sell Products and Extended Products
under a Trademark that is not similar to the Trademark. Biomatrix shall make any
such election within
*
If Biomatrix elects to co-promote the Products and Extended Products itself (or
through an Affiliate) or through a Designee pursuant to the provisions of this
Section 2.3(b), then Biomatrix and/or its Designee shall be compensated on one
of the following basis:
*
2.4. [RESERVED].
2.5. Development Payments. As an inducement for and in consideration of
the agreement of Biomatrix to actively participate in and support the
Development Program as set forth in Section 6 herein, Wyeth hereby agrees to
make the following additional non-refundable payments to Biomatrix:
(a)
*
payable within five (5) days after
*
(b)
*
payable within five (5) days after
*
(c)
*
payable within five (5) days after the last day of the month in which * of
Products and Extended Products for any * period in the Territory exceed * in the
aggregate during the period from the Launch Date to * after the Launch Date;
provided, however, that if such milestone is not achieved then Wyeth shall pay *
within * after the last day of the month in which Net Revenues from sales of
Products and Extended Products for any * period in the Territory exceed * in the
aggregate during the period from the Launch Date to * after the Launch Date.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 8
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(d)
*
payable within five (5) days after the last day of the month in which
(e)
*
payable within five (5) days after the last day of the month in which
*
For the avoidance of doubt, the performance milestones and payments set
forth in paragraphs (c), (d) and (e) of this Section 2.5 shall be
*
2.6. Payments. In consideration for its license rights hereunder Wyeth
will compensate Biomatrix for the use of its Trademarks, and the Patent and
know-how components of the Products as follows:
(a) Initial Term. During the Initial Term (as defined in the Supply
Agreement), Wyeth will pay Biomatrix for Products according to the provisions of
the Supply Agreement.
(b) Exclusive Additional Period. During any Additional Period in which
*
Wyeth will pay Biomatrix for Products for sale in the Territory according to the
provisions of the Supply Agreement
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 9
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*
2.7. Nature of Payments. Each of the payments referred to in Sections
2.5 and 2.6 hereof are independent of each other payment hereunder and shall not
be deemed satisfied by the making of any other payment hereunder. All payments
to be made pursuant to Sections 2.5 and 2.6 or under the Supply Agreement shall
be made in U.S. Dollars.
2.8. Operations and Expenses. Except as otherwise set forth in this
Agreement, the operations of Wyeth under this Agreement are subject to the sole
control and management of Wyeth. Wyeth shall be responsible for all of its own
expenses and employees. Wyeth shall provide, at its own expense, such office
space and facilities, and hire and train such personnel, as may be required to
carry out its obligations under this Agreement. Wyeth agrees that it shall incur
no expense chargeable to Biomatrix, except as may be specifically authorized in
advance in writing in each case by Biomatrix.
2.9 Independent Purchaser and Seller. Neither party shall be considered
an agent or legal representative of the other party for any purpose, and neither
party nor any director, officer, agent or employee thereof shall be, or be
considered, an agent or employee of the other party. Neither party is granted
nor shall exercise the right or authority to assume or create any obligation or
responsibility, including without limitation contractual obligations and
obligations based on warranties or guarantees, on behalf of or in the name of
the other party.
3. TERM AND TERMINATION.
3.1. Term.
(a) Initial Term. Unless this Agreement is sooner terminated in
accordance with the provisions of this Agreement, this Agreement shall commence
on the Effective Date and shall end with respect to Products on the later to
occur of (i) the fifteenth (15th) anniversary of the Launch Date or (ii) the
date of the expiration of the last to expire of the Patents in the Territory
(the "Initial Term"); provided, however, that payments on account of the
Trademark Royalty under Section 2.6(c) shall continue at all times when Wyeth is
utilizing the Trademark under the terms set forth in the Trademark Agreement.
(b) Additional Periods. This license shall be renewable following the
expiration of the Initial Term for further additional
*
under the provisions of either Section 2.6(b) or Section 2.6(c) (each such
additional term, an "Additional Period"). The parties shall Agree in writing
upon whether the Additional Period shall be
*
at least
*
prior to the commencement of any such Additional Period. Biomatrix shall
continue to
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 10
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supply Products
*
as mutually agreed, until such time as Wyeth elects not to renew this license.
3.2.
*
3.3. Insolvency. This Agreement may be immediately terminated by either
party, upon giving written notice to the other party, in the event that the
other party shall become insolvent or be declared bankrupt by a court of
competent jurisdiction or shall be the subject of any reorganization (other than
a corporate reorganization effected in the ordinary course of business and not
arising out of any insolvency) or winding up, receivership or dissolution,
bankruptcy or liquidation proceeding, or any proceeding or action similar to one
or more of the above, in which case termination shall be effective upon such
written notice. The failure of either party to give notice of termination upon
obtaining knowledge of any such event shall not be interpreted as a waiver of
such party's rights under this Section 3.3, and such party reserves the right to
exercise any such rights at any time after the occurrence of any such event.
3.4. Breach. This Agreement may be terminated by either party if the
other party shall commit a material breach of any provision hereof and shall not
cure such breach within
*
after a written notice by the other party to cure the breach; provided, that in
the case of a payment breach such cure period shall be equal to
*
after written notice.
*
3.5. Wyeth Termination. Wyeth may terminate this Agreement with
respect the Territory in its sole discretion at any time upon one (1) year
written notice to Biomatrix; provided, however, that in such event (subject to
Wyeth's rights set forth in Section 3.2(a):
(a) Biomatrix may accelerate such termination to any date after
receipt of such termination notice;
(b) Wyeth's rights under the Trademark Agreement and Supply Agreement
shall terminate with respect to the Territory; and
(c) Wyeth shall not sell a Competing Product (as defined in Section
7.1) in the Territory for a period of * after the effectiveness of termination
of this Agreement.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 11
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3.6. Certain Rights Upon Termination. (a) Upon termination of this
Agreement for any reason whatsoever, other than pursuant to Section 3.1,
Biomatrix shall have the unrestricted right to review, access, use and permit
others to review, access and use, either directly or by cross-reference or
incorporation or otherwise, all information, data, investigations, preclinical
and clinical protocols (including without limitation, marketing information and
information relating to laboratory, animal and human studies), and related
regulatory approvals pertaining to the Products (the "Information") which are
possessed or controlled by Wyeth or any of its Affiliates, or which Wyeth or any
of its Affiliates has a right to review, access or use. Wyeth unconditionally
agrees promptly to take any action and to execute and deliver to Biomatrix any
documents or instruments reasonably requested by Biomatrix to permit Biomatrix
to make full use of such unrestricted rights. In addition, Wyeth agrees that it
shall, upon the request of Biomatrix, immediately inform all relevant regulatory
authorities that Wyeth is no longer a licensee of the Products and shall take
all action and execute and deliver all documents and instruments necessary in
order to transfer all Product Approvals, Reimbursement Approvals and price
approvals and other relevant documents relating to Products to Biomatrix or any
Person designated by Biomatrix.
(b) Notwithstanding the provisions of Section 3.6(a), both parties in
good faith shall take whatever action necessary to clarify the relationship
between Wyeth and Biomatrix during an Additional Period.
3.7. Effects of Termination.
(a) Subject to Wyeth's rights set forth in Section 3.2(a), upon
termination of this Agreement for any reason, other than pursuant to Section
3.1, Wyeth shall discontinue using the Trademarks or making any representations
regarding its status as a licensee of Biomatrix and shall cease conducting any
activities with respect to the marketing, promotion, sale or distribution of the
Products in the Territory and shall take such action as is necessary to
terminate Wyeth's registration as Biomatrix's licensee with any governmental
authority.
(b) Termination of this Agreement shall not affect obligations of
either party that may have accrued prior to the effective date of termination or
any obligation
<PAGE> 12
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specifically stated to survive termination. Except to the extent limited by
Section 3.8, termination of this Agreement shall be in addition to, and shall
not be exclusive of or prejudicial to, any other grounds for termination or
rights or remedies at law or in equity which either party may have on account of
any default of the other party.
3.8. Waiver. Wyeth and Biomatrix hereby waive, to the extent they are
able to do so under applicable law, any statutory rights they may have or
acquire under the laws of the Territory in respect of the termination of the
relationship established hereby pursuant to the terms hereof, and agree that the
rights available to them hereunder in the event of such termination are adequate
and reflect the agreement of the parties. Neither Wyeth nor Biomatrix nor any of
their respective Affiliates shall have any right to claim any indemnity for
goodwill or loss thereof, lost profits, loss of prospective compensation,
expenditures, investments, leases or any type of commitment made in connection
with the business of such party in reliance on the existence of this Agreement
or any damages arising from the termination of this Agreement by the other party
in accordance with the terms hereof.
4. PAYMENTS; EXCHANGE RATE. All payments hereunder shall be made in
U.S. Dollars. Payments to Biomatrix shall be wired to an account in a bank
designated by Biomatrix and the costs of any such remittance shall be borne by
Wyeth.
5. WITHHOLDING. All payments to be made by Wyeth under this Agreement
shall be made in full, free and clear of and without any deduction of or
withholding for or on account of any taxes levied in the Territory or elsewhere;
provided that if Wyeth shall be required by law to make any deduction or
withholding from any payment to Biomatrix then:
(i) Wyeth shall ensure that such deduction or withholding does not
exceed the minimum legal liability therefor;
(ii) at least thirty (30) days prior to the first deduction or
withholding, Wyeth shall notify Biomatrix thereof, and the
parties shall negotiate in good faith adjustments to the
payments hereunder in order to minimize or eliminate such
deduction or withholding, provided that the total payments by
Wyeth shall not increase; and
(iii) Wyeth shall forward to Biomatrix such documentary evidence as
may be available in respect of each deduction, withholding or
payment together with each payment or promptly thereafter.
6. DEVELOPMENT PROGRAM
6.1. General. Commencing upon receipt of the necessary Product
Approvals for the sale of the Initial Product in the United States, during any
period in which Wyeth is the exclusive licensee of Products in the Territory,
the parties shall maintain a fund (the
<PAGE> 13
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"Development Fund") for the purpose of funding research and clinical trials
relating to the marketing, sales and development of Improvements and Extended
Products and any post-marketing study required by the FDA as part of the Initial
Product approval (the "Development Program").
6.2. Funding. (a) The Development Program and Development Fund shall be
maintained and administered by the Committee.
(b) The Development Fund shall not, unless otherwise agreed by the
parties, exceed in the aggregate during its existence
*
At such time as the Development Fund has reached
*
the funding obligations of the parties for the Development Fund shall cease.
(c) The Development Program shall be funded as follows:
(i) Wyeth shall be obligated to contribute an amount
equal to
*
under this Agreement and the International License
Agreement annually, up to an aggregate of
*
per Contract Year, subject to subparagraph (iii)
below, commencing the first Contract Year after
receipt of the necessary Product Approvals for sale
of the Initial Product in the United States; and
(ii) Biomatrix shall be obligated to contribute an amount
equal to
*
under this Agreement and the International
License Agreement annually, up to an aggregate of
*
per Contract Year, commencing the first Contract Year
after receipt of the necessary Product Approvals for
sale of the Initial Product in the United States; and
(iii) In the event the amounts required to be contributed
by Wyeth and Biomatrix under subparagraphs (i) and
(ii) above are less than the amount needed to fund
the Development Program as determined by the
Committee,
*
Amounts advanced to the Development Fund
*
6.3. Development Program Projects.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 14
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(a) Both parties will, as the Committee shall determine, perform such
research and experimentation as the Committee shall determine toward the goal of
advancing the Development Program.
(b) The Committee shall meet periodically to review and discuss in
detail the progress of the Development Program. The parties shall use their best
efforts to have the appropriate personnel attend and participate in each of such
meetings.
(c) Each party acknowledges and agrees that, subject to the provisions
of Section 6 hereof, this Agreement is not an agreement for the development of
products other than Improvements and Extended Products; and, either party may
work, either independently or with one or more third parties, outside the scope
of this Agreement to develop other products, notwithstanding that such other
products may be directly competitive with and/or superior to any Products or
Extended Products developed hereunder.
6.4. Expenses. Unless otherwise directed by the Committee, expenses for
Development Projects shall be charged as follows:
(a) No senior management time of either Party shall be billed;
(b) Actual third-party expenses shall be billed as incurred;
(c) For services of Wyeth, including without limitation statistical and
monitoring services, for which there would be a clinical grant or which would
normally be performed by a third party, the parties agree that the amount
expensed by Wyeth shall be an amount equal to the clinical grant amount;
provided that such amount shall not exceed the amount that an independent third
party would charge to perform such services.
(d) For services of Biomatrix, including without limitation
pre-clinical or statistical/regulatory activities, the parties agree that the
amount expensed by Biomatrix shall not exceed the amount an independent third
party would charge to perform such services.
6.5. Ownership. (a) Biomatrix shall own all proprietary rights to all
Improvements and Extended Products (and any improvements thereto) that are
developed under the Development Program and/or using the Development Fund. To
the extent that employees of Wyeth may be inventors or joint inventors of any
Improvements or Extended Products or any other inventions under the Development
Program, Wyeth and its employees shall execute any and all necessary documents,
including without limitation, applications for letters patent and assignments,
to give effect to the intent of the parties that Biomatrix shall own all of the
foregoing properties. To the extent that Biomatrix employees are the only
inventors of any of these properties, then Biomatrix shall have the right to
apply for patent protection on these properties in its own name.
<PAGE> 15
-15-
(b) Extended Products shall be encompassed within the terms of this
Agreement and the International License Agreement, the Supply Agreement and the
Trademark Agreement as they relate to Products. The parties agree that there
shall be no additional milestone payments relating to any such Extended Products
and that the Minimum Prices and Transfer Prices applicable to any such Extended
Products would be substantially equivalent to the Minimum Price and Transfer
Price applicable to the Initial Product unless the cost of manufacture of any
such Extended Products is materially different than the cost to manufacture the
Initial Product. If the parties are unable to agree upon any terms relating to
Extended Products, the matter shall be submitted for resolution under the
provisions of Section 9.9.
(c) The parties agree that any Extended Products (to the extent that
the parties are able to negotiate terms for an Extended Product) shall have
their own Contract Years, Initial Term and Additional Periods separate and
distinct from the Contract Years, Initial Term and Additional Periods relating
to the Products on a country-by-country basis within the Territory.
7. COMPETING PRODUCTS.
7.1. Non-competition by Wyeth. In recognition of the rights granted by
Biomatrix to Wyeth and the other obligations of Biomatrix hereunder, Wyeth
agrees that it shall not, directly or indirectly (alone or with others), and it
shall ensure that its Affiliates shall not, directly or indirectly (alone or
with others), during the Non-competition Period, manufacture, sell, market,
distribute or promote a Competing Product in the Territory;
*
If Wyeth
*
Wyeth agrees
*
Wyeth acknowledges and agrees that, in the event of a breach or threatened
breach by Wyeth of its obligations under this Section 7.1, Biomatrix will have
no adequate remedy at law, and accordingly shall be entitled to injunctive or
other appropriate equitable remedies against such breach or threatened breach in
addition to any other remedies which Biomatrix may have.
7.2. New Products. Notwithstanding any provision in this Agreement or
in the International License Agreement to the contrary, if Biomatrix develops a
New Product and Wyeth is an exclusive licensee of any Product or Extended
Product in a country, Biomatrix shall not commercialize any such New Product in
any country in which Wyeth is an exclusive licensee under this Agreement of any
Product or Extended Product until the following conditions have been satisfied:
(i) Biomatrix has made a commercially reasonable written offer
to Wyeth to participate with Biomatrix in the development and
marketing of such New Product;
(ii) Wyeth has failed to accept such written offer or make its
own commercially reasonable written offer within * of its
receipt of such offer; and
(iii) The parties shall have negotiated in good faith to attempt
to reach agreement based upon Biomatrix's and/or Wyeth's offer for
a period *
In the event that the parties fail to reach an agreement pursuant to
this Section 7.2 within * of Wyeth's receipt of Biomatrix's first written
offer, then Biomatrix shall not be restricted by this Agreement or the
International License Agreement in the exercise of any rights that Biomatrix
might otherwise have to develop and/or commercialize any New Product to which
such offer relates; provided that *
Nothing in this Section 7.2 shall be construed, by implication or
otherwise, (i) to effect any sale or license of proprietary Biomatrix technology
(including any new Products), (ii) to grant any license relating to Biomatrix's
proprietary methods of formulating, fabricating and manufacturing Products,
Extended Products or New Products, or (iii) to grant Wyeth any rights in or to
any proprietary technology or Patents or Trademarks of Biomatrix.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 16
-16-
*
8. CONFIDENTIAL INFORMATION; PUBLIC ANNOUNCEMENTS.
8.1. Confidential Information. All information acquired by either party
(the "Recipient") from the other party or any of its Affiliates (the
"Discloser") during the term of this Agreement or prior to the Effective Date,
relating directly or indirectly to the present or potential business,
operations, corporate, technical or financial situation of the Discloser, or to
manufacturing know-how, patents, data, test results, techniques, processes,
procedures, raw materials, dealer, supplier and customer lists, the Information
described in Section 3.6, pre-clinical and clinical protocols or any
improvements thereof of the Discloser ("Confidential Information") is
confidential, and shall be held in trust by the Recipient for the exclusive
benefit of the Discloser. Unless otherwise agreed to in writing by the
Discloser, the Recipient shall not at any time, either during or subsequent to
the term of this Agreement, use for itself (other than in accordance with the
terms of this Agreement) or any other Person, or disclose or divulge to any
Person, other than to those of its employees and advisors and Affiliates who
require the same for the purposes hereof
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 17
-17-
and who are bound by the same obligations of confidentiality, non-disclosure and
non-use as set forth herein, any Confidential Information or any other
confidential or proprietary information of the Discloser of which the Recipient
may acquire knowledge; provided, however, that the confidentiality,
non-disclosure and non-use provisions contained in this Section 8.1 shall not
apply to any information or data to the extent that the Recipient:
(i) shall demonstrate by written evidence that such information or
data is known generally to persons in the trade through no act
or omission of the Recipient or any of its Affiliates;
(ii) is required by any government authority to disclose such
information or data, including without limitation for the
purposes of obtaining and maintaining any Product Approvals
under this Agreement; or
(iii) shall demonstrate by its written records that such information
or data was disclosed to or created by it or its Affiliates on
a non-confidential basis from a source other than the
Discloser or its Affiliates and that such disclosure or
creation did not constitute a breach of any applicable
confidentiality obligations.
All Confidential Information shall be immediately returned to the Discloser upon
termination of this Agreement, along with any copies, reproductions, digests,
abstracts or the like of all or any part thereof in the Recipient's possession
or under the Recipient's control, and upon such return any computer entries or
the like relating thereto shall, to the extent legally permissible, be
destroyed. The Recipient shall then attest to the Discloser in writing as to the
return and/or destruction of the Confidential Information. Such return (and
destruction) will not affect the Recipient's obligations hereunder, which shall
survive indefinitely or, if a definite period is required under applicable law,
until five (5) years after termination or expiration of this Agreement.
Notwithstanding anything herein to the contrary, the provisions of this Section
8.1 shall be subject to Biomatrix's rights under Section 3.6.
8.2. Public Announcement. Except as shall be necessary for governmental
notification purposes or to comply with applicable laws and regulations, and
except as otherwise agreed to by the parties hereto in writing, the parties
agree to keep the existence of this Agreement, and the transactions contemplated
hereby, strictly confidential. The parties shall agree upon the text of an
initial public announcement relating to the transactions contemplated by this
Agreement as soon as possible after the Effective Date. Any subsequent public
announcements regarding this Agreement or the transactions contemplated herein
shall also be agreed upon in writing between the parties prior to any release
thereof.
9. INTELLECTUAL PROPERTY; AGREEMENT PRODUCT MARKING; PROMOTIONAL
INFORMATION; REGULATORY MATTERS.
<PAGE> 18
-18-
9.1. PATENTS. (a) Biomatrix shall be responsible, at its cost and
expense, for prosecuting to issuance in the Territory all patent applications,
for filing and prosecuting all patent reissues and reexaminations, for applying
for and obtaining any patent term extensions, and for paying all maintenance,
fees on a large entity basis, on all patents, and all such applications and
patents shall constitute Patents under this Agreement.
(b) Upon Wyeth's request, Biomatrix shall provide Wyeth with a copy of
the prosecution file wrapper histories of each patent constituting Patents under
this Agreement.
9.2. Trademarks. The Trademark Agreement sets forth the terms and
conditions of Wyeth's use of the Trademarks. Upon termination of this Agreement,
all rights set forth herein with respect to the Trademarks shall terminate and
the rights and obligations set forth in the Trademark Agreement shall govern the
use of the Trademarks.
9.3. Notice of Infringement. Each party hereto agrees to notify the
other in writing promptly (but not later than thirty (30) days) after obtaining
knowledge of any infringements or imitations of the Trademarks or Patents by
third parties. Further, Wyeth agrees to notify Biomatrix immediately after it
becomes aware that any of the Products or Extended Products sold in the
Territory are thereafter sold or transported outside the Territory.
9.4. Labelling and Promotional Materials. Wyeth shall provide Biomatrix
with labelling masters, instructions, specifications and copies of all
marketing, labelling and promotional material it intends to use relating to the
Products or Extended Products. All such labelling, packaging and promotional
material that include claims or items impacting regulatory approvals shall be
consistent with all relevant regulatory requirements and shall be reviewed by
Biomatrix and shall be subject to its written approval prior to use. All other
major promotional materials for launches and subsequent promotions shall be
provided by Wyeth to Biomatrix within a reasonable time prior to their use in
order to allow Biomatrix to comment on such materials. Wyeth shall provide
Biomatrix with all other promotional materials as promptly as practicable.
9.5. Legend. Subject to applicable laws and regulations in the
Territory, all relevant packaging and promotional material for the Products and
Extended Products used or sold by Wyeth shall contain (i) all applicable
markings needed to keep the Trademarks enforceable throughout the Territory as
specified in writing by Biomatrix to Wyeth, and (ii) a legend which shall be
displayed in a reasonably conspicuous manner on all packaging of such Products
and Extended Products containing the corporate identification logo of Biomatrix
in at least equal prominence as that of Wyeth, and indicating that such Product
or Extended Product has been developed and manufactured by Biomatrix, Inc., and
its affiliates, 65 Railroad Avenue, Ridgefield, New Jersey, 07657 U.S.A. or
similar statement in such form as is consistent with Biomatrix's practices in
distributing the Product through other distribution arrangements in other
territories.
<PAGE> 19
-19-
9.6. Promotional Support.
(a) Samples. Wyeth will be allowed to purchase up to a maximum of
*
respectively, solely for the purposes of promotion of the Initial Product in the
Territory. Biomatrix agrees to sell such samples to Wyeth for a price equal to
*
for each such Unit.
(b) Exchange of Information. Biomatrix and Wyeth shall provide to each
other on an ongoing basis and without charge (to the extent not prevented by law
or contract from doing so) all marketing, medical, scientific and other
information relating to the Products and Extended Products (including summary
data from studies, clinical trials and the like as well as information regarding
adverse events associated with the use of the Products and Extended Products),
the proceedings of all symposia on the Products and Extended Products and all
promotional information that is available to such party relating to the Products
and Extended Products. In addition, Biomatrix and Wyeth shall provide each other
with access to such primary data and information in its possession as the other
may reasonably request regarding the results of the studies contained in such
summary data referred to above. Each party shall have the right to use the
marketing, promotional, medical, scientific and other information of the other
party as long as such use is not restricted or limited by any other provision in
this Agreement.
(c) Reference to Viscosupplementation and Biomatrix. Subject to
applicable laws and regulations in the Territory, Wyeth shall ensure that all
trade literature, publications and promotional materials relating to the
Products and Extended Products produced by or on behalf of Wyeth or any of its
Affiliates shall, in a reasonably conspicuous manner, refer to
viscosupplementation. In major promotional materials, and other material where
appropriate, Wyeth shall, in a reasonably conspicuous manner, reference that the
concept and the name viscosupplementation have been conceived and introduced by
the founders of Biomatrix. The product positioning for the Initial Product shall
be the same as is currently used by Biomatrix, as redefined from time to time by
Biomatrix based upon current and new scientific, medical or marketing
information obtained.
9.7. Customer Service. In connection with sales of Products and
Extended Products in the Territory, Wyeth shall carry out, at its expense, all
order entry, sales reporting, accounts receivable and collections and costs
related thereto.
9.8. Marketing Plan. Three months prior to the end of the
*
Agreement Year, Wyeth shall prepare at its own expense and deliver to Biomatrix
a
*
forecast of its sales of Products and Extended Products in the Territory (the
"Marketing Plan") setting forth (i) its projections of Net Revenues for the
Territory for each of the
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 20
-20-
(ii) its projected marketing efforts in the Territory during such
*
period, and its projections of the cost thereof, and (iii) its projected
marketing mix. Wyeth shall prepare the Marketing Plan in good faith and shall
use Commercially Reasonable Efforts in such preparation.
9.9. Development, Marketing and Sales Steering Committee. The parties
shall establish a development, marketing and sales steering committee (the
"Committee") comprised of three (3) voting representatives designated by each
party. The Committee will be administered by a chairman appointed from the
members, alternating yearly among representatives of Biomatrix and Wyeth. The
Committee will meet at least twice annually, or more often if necessary as
requested by either party, and written minutes of each meeting shall be kept. In
addition to any specific powers granted to the Committee in this Agreement and
the Supply Agreement, the Committee shall oversee the continued development of
the Improvements and Extended Products with respect to label extensions, product
reimbursement approvals, the marketing and sale of the Products and Extended
Products, and the development of promotional programs and the preparation of
marketing studies. The Committee shall not have the authority to change the
responsibilities of either party under this Agreement. Decisions of the
Committee shall be made by consensus (a majority of the members designated by
each party). If, after a period of thirty (30) days (or earlier at the election
of either party), a matter is still not resolved, it shall be referred to the
CEO of Biomatrix and the Executive Officer of American Home Products Corporation
responsible for its global pharmaceutical operations, or their designees, to
resolve in a period of thirty (30) days through good faith discussions, or if
still unresolved, to promptly agree upon a binding third party dispute
resolution mechanism intended to promptly and fairly resolve the matter in
dispute. The Committee will have no control over the marketing, sales or
development budget of either party.
9.10. Co-Promotion. Promptly following the receipt of the Product
Approval for the Initial Product in the Territory, Biomatrix shall hire and
train as employees of Biomatrix (at Wyeth's expense)
*
sales representatives to assist Wyeth with the marketing and sale of the
Products (the "Product Specialists"). The Product Specialists shall co-promote
the Products and Extended Products in cooperation with Wyeth's marketing and
sales force in accordance with marketing plans approved by the Committee. All
sales of the Products in the Territory made by the Product Specialists during
the term hereof shall be
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 21
-21-
*
Beginning in the
*
Biomatrix shall have the right to require that the Product Specialists be
permitted to market, promote and sell other products manufactured by Biomatrix
for the account of Biomatrix. Biomatrix shall have the right to assign up to a
total of
*
of the Product Specialists under this Agreement and the International Agreement
toward the promotion of Products and Extended Products
*
9.11. Customer Lists. Wyeth shall maintain a master customer list
containing relevant information on sales of the Products and Extended Products
and shall deliver copies of such list to Biomatrix on a quarterly basis.
9.12 Product Vigilance System. Wyeth shall be responsible for
maintaining medical device vigilance systems, as established for the Products
and Extended Products by applicable regulatory requirements, and shall promptly
provide Biomatrix with notice of all product related events and complaints,
including medical complaints. The parties shall develop a mutually agreed
procedure to comply with applicable regulatory requirements and the policies of
each party. Biomatrix shall be solely responsible for processing, analyzing and,
if necessary, reporting medical complaints to regulatory authorities. Wyeth
shall provide all necessary support to Biomatrix for carrying out such
activities.
9.13. Recalls of Products.
(a) If, in accordance with the * either party in good faith
determines that a * such party shall immediately notify the other party in
writing and shall advise such other party of the * The parties shall consult
with each other as to any action to be taken *
(b) Except as otherwise provided in (c) below, in the event of a
recall of a Product or Extended Product, Biomatrix shall correct any deficiency
relating to its manufacturing, packaging, testing, labelling, storing or
handling of the Product or Extended Product for which it is responsible, if
applicable, and shall at its cost replace such defective Product or Extended
Product recalled.
(c) Biomatrix shall reimburse Wyeth for all direct costs and
expenses (including without limitation shipping, quality control testing and
notification costs) incurred by Wyeth and its Affiliates as a result of any
recall, except where such recall (i) is the result of the failure of Wyeth or
its Affiliates to comply with their obligations under this Agreement and/or
(ii) was opposed by Biomatrix and proved to be unwarranted; in either case
Wyeth shall reimburse Biomatrix for all direct costs and expenses (including
without limitation shipping, quality control testing and notification costs)
incurred by Biomatrix and its Affiliates as a result of such recall.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 22
-22-
*
9.14. Compliance. Wyeth shall, at its expense, comply with any and all
governmental laws, regulations, and orders that may be applicable to Wyeth by
reason of its execution of this Agreement including any requirement to be
registered as Biomatrix's reseller of products with any governmental authority,
and including all laws, regulations or orders that govern or affect the
ordering, shipment, import, sale (including government procurement), delivery,
or redelivery of Products and Extended Products in the Territory. Wyeth shall
furnish Biomatrix with such documentation as Biomatrix may request to confirm
Wyeth's compliance with this Section 9.14 and agrees that it shall not engage in
any course of conduct that, in Biomatrix's reasonable belief, would cause
Biomatrix to be in violation of the laws of any jurisdiction.
9.15. Local Laws. Each party shall notify the other party of the
existence and content of any provision of law in the Territory or any other
applicable law that conflicts with any provision of this Agreement at the time
of its execution or thereafter.
9.16. Questionable Payments. Wyeth shall not, directly or indirectly,
in the name of, on behalf of, or for the benefit of Biomatrix offer, promise or
authorize to pay, or pay any compensation or give anything of value to, any
official, agent or employee of any government or governmental agency, or to any
political party or officer, employee or agent thereof in connection with the
promotion or sale of Products and Extended Products.
10. SUPPLY OF PRODUCTS. The Supply Agreement sets forth the terms and
conditions for sale of Products by Biomatrix (or its Affiliates) to Wyeth.
11. INDEMNIFICATION; LIMITATION ON LIABILITY
11.1. Indemnification from Wyeth. Subject to the provisions of Section
11.3, Wyeth shall defend, indemnify and hold Biomatrix and its Affiliates and
their respective directors, officers, agents and employees harmless from and
against any and all liabilities, claims, damages and expenses (including without
limitation actual court costs and reasonable attorneys' fees regardless of
outcome) resulting from or arising out of or in connection with:
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 23
-23-
(a) any failure * by Wyeth to act in accordance with the terms of
this Agreement, the Supply Agreement, the Trademark Agreement and/or any
applicable laws and regulations in the Territory in connection with the
Products, including without limitation any unauthorized representations,
warranties or guarantees given by Wyeth;
(b) *
(c) any activities of Wyeth relating to the promotion, marketing,
sale and distribution of Products and Extended Products; and/or
(d) any * on the part of Wyeth or its Affiliates in connection with
Products and Extended Products.
11.2. Indemnification from Biomatrix. Subject to the provisions of
Section 11.3, Biomatrix shall defend, indemnify and hold Wyeth and its
Affiliates and their respective directors, officers, agents and employees
harmless from and against any and all liabilities, claims, damages and expenses
(including without limitation actual court costs and reasonable attorneys' fees
regardless of outcome) resulting from or arising out of or in connection with:
(a) any failure * by Biomatrix to act in accordance with the terms of
this Agreement and/or to act in accordance with applicable laws and regulations
in the Territory in connection with the Products and Extended Products;
(b) *
(c) any breach by Biomatrix or any of its Affiliates of a
representation, warranty or covenant made by or on its behalf in this
Agreement; and/or
(d) any * on the part of Biomatrix or its Affiliates in connection
with Products and Extended Products.
11.3. Limitation on Liability.
NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN SECTIONS 11.1 AND 11.2
ABOVE, OR ANY OTHER PROVISION OF THIS AGREEMENT, THE SUPPLY AGREEMENT, OR THE
TRADEMARK AGREEMENT, IN NO EVENT (INCLUDING THE FAULT, NEGLIGENCE OR STRICT
LIABILITY OF EITHER PARTY) SHALL EITHER PARTY BE LIABLE
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 24
-24-
TO THE OTHER PARTY OR ANY THIRD PARTY, INCLUDING ANY PURCHASER OF PRODUCTS OR
EXTENDED PRODUCTS, FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY
DAMAGES OTHER THAN TO THE EXTENT NECESSARY TO REIMBURSE SUCH OTHER PARTY FOR
DAMAGES ACTUALLY PAID TO A NON-AFFILIATED THIRD PARTY, PROVIDED THAT SUCH
DAMAGES ARE OTHERWISE COVERED BY THE PROVISIONS OF SECTION 11.1 OR SECTION 11.2,
AS THE CASE MAY BE.
11.4 Indemnification Procedure. The party claiming indemnification
("Indemnitee"), after being advised of any assertions of any such third party
claims or suits or upon the bringing or filing of such claims or suits by any
third party against the Indemnitee, shall promptly notify the party from which
indemnification is sought ("Indemnitor") thereof; provided, that the failure to
promptly notify shall not affect the Indemnitor's obligations hereunder except
to the extent the Indemnitor is prejudiced by the delay in notification. The
Indemnitee shall permit the Indemnitor's attorneys to handle and control the
defense of such claims or suits at the Indemnitor's cost. The Indemnitee shall
co-operate with the Indemnitor in the defense of such claims or suits. The
parties agree that there shall be no settlements, whether agreed to in court or
out of court, without the prior written consent of the Indemnitor.
12. REPRESENTATIONS OF BIOMATRIX. Biomatrix represents, warrants and
covenants as follows:
12.1. Biomatrix is a corporation duly organized and validly existing
under the laws of the state of Delaware with the full power to conduct its
affairs as currently conducted and contemplated hereunder. All necessary action
has been taken to enable it to execute and deliver this Agreement and perform
its obligations hereunder.
12.2. This Agreement is a valid and binding obligation of Biomatrix
enforceable in accordance with its terms. Biomatrix has the unencumbered right
to enter into this Agreement and to fulfill its duties hereunder. It is not and
will not become a party to any agreement in conflict herewith. Accordingly,
Biomatrix has the right to grant Wyeth the exclusive license granted hereunder
in the Territory in accordance with the terms of this Agreement and such grant
will not constitute a breach of any existing contractual or other arrangements
between Biomatrix and any Affiliated or non-Affiliated third party, nor shall it
infringe on the rights of any Affiliated or non-Affiliated third party.
12.3 No approval, consent, order, authorization or license by, giving
notice to or taking any other action with respect to, any governmental or
regulatory authority is required in connection with the execution and delivery
of this Agreement by Biomatrix and the performance by Biomatrix of its
obligations hereunder, other than the Product Approvals contemplated herein and
any required approvals under Section 25.
<PAGE> 25
-25-
13. REPRESENTATIONS OF WYETH. Wyeth represents, warrants and covenants
as follows:
13.1. Wyeth is a corporation duly organized and validly existing under
the laws of the State of Delaware with the full power to conduct its affairs as
currently conducted and contemplated hereunder. All necessary action has been
taken to enable it to execute and deliver this Agreement and perform its
obligations hereunder.
13.2. This Agreement is Wyeth's valid and binding obligation
enforceable in accordance with its terms. Wyeth has the unencumbered right to
enter into this Agreement and to fulfill its obligations hereunder. It is not
and will not become a party to any agreement in conflict herewith. Accordingly,
Wyeth has the right to act as the exclusive licensee of the Products and
Extended Products in the Territory in accordance with the terms of this
Agreement and the performance of its obligations hereunder will not constitute a
breach of any existing contractual or other arrangements between Wyeth and any
Affiliated or non-Affiliated third party, nor shall it infringe the rights of
any Affiliated or non-Affiliated third party.
13.3. No approval, consent, order, authorization or license by, giving
notice to or taking any other action with respect to any governmental or
regulatory authority is required in connection with the execution and delivery
of this Agreement by Wyeth and the performance by Wyeth of its obligations
hereunder, other than the Product Approvals contemplated herein and any required
approvals under Section 25.
14. INSURANCE.
(a) Biomatrix shall maintain comprehensive general liability insurance
coverage including products liability with a minimum limit of not less than
*
(b) Wyeth warrants that it is self-insured for the first
*
of product liability exposure on an annual aggregate basis and purchases excess
insurance above such self-insurance amount.
15. INFRINGEMENT. Each of Wyeth and Biomatrix will promptly notify the
other party in writing of any infringement of a Patent or Trademark or the
know-how or unauthorized disclosure or use of any Confidential Information, of
which it becomes aware in the Territory. Biomatrix shall have the exclusive
right at its own cost to take all legal action in the Territory it deems
necessary or advisable to eliminate or minimize the consequences of such
infringement of a Patent or Trademark or the know-how in the Territory. For the
purpose of taking any such legal action, Biomatrix shall have the right, to use
the name of Wyeth and/or any Affiliate of Wyeth as plaintiff, either solely or
jointly in accordance with the applicable rules of procedure. Wyeth shall
promptly furnish Biomatrix with whatever written authority may be required in
order to enable Biomatrix to
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 26
-26-
use Wyeth's name in connection with any such legal action, and shall otherwise
cooperate fully and promptly with Biomatrix in connection with any such action.
All proceeds realized upon any judgment or settlement regarding such action
shall belong exclusively to Biomatrix.
16. REGULATORY ACTIVITIES.
16.1. GENERAL.
(a) Approvals. (i) Biomatrix shall, at its cost, be solely responsible
for obtaining and maintaining Product Approvals for the Initial Product in the
Territory. (ii) Wyeth shall, at its cost, obtain and maintain all Reimbursement
Approvals in the Territory.
(b) Review by Biomatrix. Biomatrix shall be entitled to assist in
developing the strategy and content of all applications for Product Approvals
and Reimbursement Approvals and the content of all such applications shall be
subject to Biomatrix's prior written approval. All Product and Reimbursement
Approvals shall be held as the exclusive property of and in the name of
Biomatrix except to the extent that applicable law requires that such approvals
be held in the name of Wyeth, or unless otherwise agreed in writing by the
parties. Any filings for reimbursement or regulatory approval in the Territory
shall be subject to the prior written approval of each of the parties.
(c) Mutual support. Wyeth and Biomatrix shall provide reasonable advice
and assistance to each other as may be necessary to obtain and maintain Product
Approvals and, if applicable, satisfactory Reimbursement Approvals for Products
in the Territory.
(d) Transfer of approvals. In the event that the Product Approvals or
the Reimbursement Approvals (if any) relating to any Product or Extended Product
in the Territory is in the name of Wyeth or any of its Affiliates, it shall be
transferred to Biomatrix immediately upon termination of the Agreement.
(e) Reporting on Agreement Product. During the term of this Agreement,
each party shall immediately notify the other in writing in the event that such
party becomes aware of any failure of the Products or Extended Products to
comply with any of the requirements therefor specified in any Product Approval.
(f) Ongoing information exchange. Each party shall keep the other
advised of regulatory interactions, activities and correspondence and the
registration status of Products on a quarterly basis, except that matters
requiring more immediate attention shall be communicated as soon as practicable.
16.2. CLINICAL TRIALS; PUBLICATION OF RESULTS.
<PAGE> 27
-27-
(a) Wyeth shall be responsible, at its own cost, for conducting and
managing any clinical trials which may be required in order to obtain or
maintain Product Approvals and Reimbursement Approvals in the Territory;
provided that the protocols for all such clinical trials shall be subject to
Biomatrix's prior written approval and Biomatrix shall have the right to audit
the performance of any such clinical studies.
*
(b) Wyeth shall provide the completed data resulting from all clinical
trials conducted in accordance with this Section 16.2 to Biomatrix, and
Biomatrix shall be allowed to assist in analysis of the completed data and in
preparing the final reports relating to such clinical trial data. Biomatrix and
its Affiliates shall be free to use the results of any or all such clinical
trials in the promotion, marketing and product licensing of Products and
Extended Products outside the Territory. The results of any such studies will
not be published or publicized in any way without the prior written approval of
Biomatrix.
17. FURTHER ASSURANCES. The parties hereto agree to execute such
further or other documents and assurances as are necessary from time to time in
order to give effect to the provisions of this Agreement.
18. ASSIGNMENT. The rights and obligations of the parties hereto shall
inure to the benefit of and shall be binding upon the authorized successors and
permitted assigns of each party. Neither party may, without the prior written
consent of the other party, take any of the following actions (collectively
referred to hereby as an "Assignment"): (i) assign or transfer its rights or
obligations under this Agreement, (ii) license or sublicense any of its rights
or obligations under this Agreement, or (iii) designate another person to
perform all or part of its obligations under this Agreement or have all or part
of its rights and benefits under this Agreement; provided, however, that a party
may make Assignments to Affiliates of such party or to a successor, by merger or
acquisition; and provided, further that in the case of an Assignment to an
Affiliate the assigning party shall promptly notify the other party in writing
of such Assignment and shall remain liable (both directly and as guarantor) with
respect to all obligations so assigned and the other party will not be in a
direct contractual relationship with such Affiliate. In the event of any
permitted Assignment or in the event that an Affiliate of either party shall
exercise rights and/or perform obligations hereunder pursuant to the terms of
this Agreement, the assignee or Affiliate, as the case may be, shall
specifically assume and be bound by the provisions of the Agreement by executing
and agreeing to an assumption agreement satisfactory to the other party hereto.
19. GOVERNING LAW; INJUNCTIVE RELIEF.
(a) This Agreement and the respective rights and obligations of the
parties shall be governed by and construed in accordance with the internal and
substantive laws of
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 28
-28-
the State of New Jersey, United States of America (without regard to principles
of conflicts of laws). In the event of any dispute touching or concerning this
Agreement, the parties hereby agree to submit such dispute to their respective
chief executive officers or their designees by notice delivered in accordance
with the provisions of Section 24 hereof. Each of the parties agrees that any
suit relating to this Agreement may be brought in the courts of the State of New
Jersey or any federal court sitting therein and consents to the non-exclusive
jurisdiction of such court and service of process in any such suit being made by
mail at the address specified in Section 24. Each party hereby waives any
objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court.
(b) Each of the parties hereto acknowledges and agrees that damages
will not be an adequate remedy for any material breach or violation of this
Agreement if such material breach or violation would cause immediate and
irreparable harm (an "Irreparable Breach"). Accordingly, in the event of a
threatened or ongoing Irreparable Breach, each party hereto shall be entitled to
seek, in any state or federal court in the State of New Jersey, equitable relief
of a kind appropriate in light of the nature of the ongoing threatened
Irreparable Breach, which relief may include, without limitation, specific
performance or injunctive relief; provided, however, that if the party bringing
such action is unsuccessful in obtaining the relief sought, the moving party
shall pay the non-moving party's reasonable costs, including attorney's fees,
incurred in connection with defending such action. Such remedies shall not be
the parties' exclusive remedies, but shall be in addition to all other remedies
provided in this Agreement.
20. SEVERABILITY. In the event that any provision of this Agreement
shall be held by a court of competent jurisdiction or by any governmental body
to be invalid or unenforceable, such provision shall be deemed severable and the
remaining parts and provisions of this Agreement shall remain in full force and
effect.
21. FORCE MAJEURE. Each of the parties shall be excused from the
performance of its obligations hereunder in the event such performance is
prevented by force majeure, and such excuse shall continue as long as the
condition constituting such force majeure continues. For the purpose of this
Agreement, force majeure is defined as contingencies beyond the reasonable
control of either party, including, without limitation, acts of God, judicial or
regulatory action, war, civil commotion, destruction of production facilities or
materials by fire, earthquake or storm and labor disturbances (whether or not
any such labor disturbance is within the power of the affected party to settle)
or unavailability of supply materials. The party affected by force majeure shall
provide the other party with full particulars thereof as soon as it becomes
aware of the same (including its best estimate of the likely extent and duration
of the interference with its activities), and will use its reasonable endeavors
to overcome the difficulties created thereby and to resume performance of its
obligations as soon as practicable.
<PAGE> 29
-29-
22. INTEREST. Any overdue amounts payable by either party hereunder
shall bear interest compounded monthly at the prime lending rate for U.S.
Dollars published from time to time in The Wall Street Journal plus
*
per annum, or, if lower, the highest rate permissible by applicable law, from
the due date until the date of payment.
23. NO PARTNERSHIP; AGENCY OR FRANCHISE. This Agreement and the
relations hereby established by and between Biomatrix and Wyeth do not
constitute a partnership, joint venture, agency, franchise or contract of
employment between them.
24. NOTICES. All communications in connection with this Agreement shall
be in writing and sent by postage prepaid first class mail, courier, or telefax,
and if relating to default, late payment or termination, by certified mail,
return receipt requested, telefax or courier, addressed to each party at the
address above, in the case of Biomatrix, Attn: Chief Executive Officer, with a
copy to: Justin P. Morreale, Esq., Bingham, Dana & Gould LLP, 150 Federal
Street, Boston, Massachusetts 02110, U.S.A., and in the case of Wyeth, 555 East
Lancaster Avenue, St. Davids, Pennsylvania 19087, Attn: Senior Vice President,
Global Business Development, with a copy to American Home Products Corporation,
5 Giralda Farms, Madison, New Jersey 07990, U.S.A., Attn: Senior Vice President
and General Counsel or to such other address as the addressee shall last have
designated by notice to the communicating party. The date of giving any notice
shall be the date of its actual receipt.
25. HART-SCOTT-RODINO. If required by law, the parties will, at their
own expense (other than any required filing fees which shall be paid by Wyeth),
prepare and make appropriate filings under Title II of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (16 C.F.R. 801.1 et. seq.) (the "Act") as soon as
reasonably practicable. The parties shall cooperate in the antitrust clearance
process and agree to furnish promptly to the FTC and the Antitrust Division of
the Department of Justice any additional information reasonably requested by
them in connection with such filings. This provision shall bind Biomatrix and
Wyeth upon execution but the other provisions of the Agreement shall not become
effective until the waiting period provided by the Act shall have terminated or
shall have expired without any action by any government agency or challenge to
the transaction (the "Effective Date"). In the event the expiration of the
waiting period does not occur within three (3) months after the date of
signature of this Agreement by both parties, the parties shall revert to their
status prior to signing this Agreement.
26. SURVIVAL. The provisions of Sections 3.2, 3.5, 3.6, 3.7, 3.8, 8.1,
8.2, 9.2, 11.1, 11.2, 11.3, 11.4 and 16.1(d) of this Agreement shall survive the
termination or expiration of this Agreement (as the case may be) and shall
remain in full force and effect. The provisions of this Agreement that do not
survive termination or expiration hereof (as the case may be) shall,
nonetheless, be controlling on, and shall be used in construing and
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 30
-30-
interpreting the rights and obligations of the parties hereto with regard to,
any dispute, controversy or claim which may arise under, out of, or in
connection with this Agreement.
27. MISCELLANEOUS. This Agreement, the International License Agreement,
the Supply Agreement and the Trademark Agreement together set forth the entire
agreement between the parties with respect to the transactions and arrangements
contemplated hereby and supersede all prior oral or written arrangements between
the parties. This Agreement may be modified or amended only by a written
instrument executed and delivered by both parties. None of the provisions of
this Agreement shall be deemed to have been waived by any act or acquiescence on
the part of either party except by an instrument in writing signed and delivered
by the party executing the waiver. This Agreement may be executed in several
identical counterparts, each of which shall be an original, but all of which
constitute one instrument, and in making proof of this Agreement it shall not be
necessary to produce or account for more than one such counterpart. The English
language version of this Agreement shall govern and control any translations of
the Agreement into any other language. References herein to Sections and
Exhibits are to Sections of and Exhibits to this Agreement. The title of this
Agreement and the section headings contained herein are for convenience of
reference only and shall not define or limit the provisions hereof.
[signature page to follow]
<PAGE> 31
-31-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Fred Hassan
-------------------------
Name: Fred Hassan
Title: Executive Vice President
BIOMATRIX, INC.
/s/ Endre A. Balazs
-------------------------
Endre A. Balazs
Chief Executive Officer
<PAGE> 32
-32-
EXHIBITS
Exhibit A - Initial Product Specifications
Exhibit B - Patents and Trademarks
<PAGE> 33
-33-
EXHIBIT A
Initial Product Specifications
U.S. AGREEMENT PRODUCT SPECIFICATIONS
SPECIFICATION OF SYNVISC(R)
(HYLAN G-F 20)
Test Specifications
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 34
-2-
EXHIBIT B
Patents and Trademarks
I. SYNVISC RELATED UNITED STATES PATENTS
*
II. SYNVISC(R)
<TABLE>
<CAPTION>
Country Registration No. Term Expiration Date
------- ---------------- ---- ---------------
<S> <C> <C> <C>
</TABLE>
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 1
INTERNATIONAL LICENSE AGREEMENT
THIS AGREEMENT is made as of the 7th day of February 1997 by and
between BIOMATRIX, INC., a Delaware corporation, having its principal office at
65 Railroad Avenue, Ridgefield, New Jersey 07657, U.S.A. ("Biomatrix") and
AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation having its principal
office at Five Giralda Farms, Madison, New Jersey 07990, U.S.A., acting through
its unincorporated Wyeth-Ayerst Laboratories division (such entities are
together defined herein as "Wyeth").
WHEREAS, Biomatrix is engaged in the development and manufacture of the
Products (as hereinafter defined);
WHEREAS, Wyeth desires to enter into an exclusive (except as provided
herein) license to market and sell Products and Extended Products (as
hereinafter defined) in the Territory (as hereinafter defined), and Biomatrix is
willing to grant such rights to Wyeth;
WHEREAS, on the terms and subject to the conditions set forth in the
Supply Agreement (as hereinafter defined), Wyeth desires to purchase from
Biomatrix, and Biomatrix desires to sell to Wyeth, Wyeth's requirements of
Products and Extended Products in the Territory; and
WHEREAS, as of the date hereof, Biomatrix and Wyeth are entering into
the U.S. Agreement (as defined below), the Supply Agreement (as defined below)
and the Trademark Agreement (as defined below);
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants of the parties hereto, it is hereby agreed as follows:
1. DEFINITIONS. In this Agreement, the following words and expressions
shall have the following meanings:
1.1. "Additional Period" shall mean that term as defined in Section
3.1.
1.2. "Affiliate" shall mean, with respect to any party, any Person
that, directly or indirectly, is controlled by, controls or is under common
control with such party, but only for so long as such relationship exists.
1.3. "Applicable Currency" shall mean, with respect to a country in the
Territory, the lawful currency of such country.
<PAGE> 2
-2-
1.4. "Commercial Sale" means that sales by Wyeth or its Affiliates to
non-affiliated third-party purchasers shall have commenced with defined prices
and are supported by normal sales promotion activities.
1.5. "Competing Product" shall mean any
*
1.6. "Confidential Information" shall mean that term as defined in
Section 7.1.
1.7. "Contract Quarter" shall mean, with respect to a country in the
Territory, the three (3) month period commencing on the first day of the first
fiscal quarter beginning immediately after the Launch Date in such country
(unless the Launch Date is the first day of a fiscal quarter, in which case the
first Contract Quarter shall commence on such day) and ending on the last day of
the fiscal quarter and each fiscal quarter thereafter throughout the term of
this Agreement.
1.8. "Contract Year" shall mean, with respect to a country in the
Territory, the twelve (12) month period commencing on the first day of the first
fiscal quarter beginning immediately after the Launch Date in such country
(unless the Launch Date is the first day of a fiscal quarter, in which case the
first Contract Year shall commence on such day) and each separate successive
twelve (12) month period thereafter.
1.9. "Development Program" shall mean the development program as set
forth in the U.S. Agreement.
1.10. "Effective Date" shall mean the date of this Agreement.
1.11. "Employment Costs" shall mean, with respect to any employee of
Biomatrix, for any period, the aggregate amount of
*
1.12. "Extended Product" shall mean
*
1.13. "Field" shall mean the
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 3
-3-
1.14. "Improvements" shall mean
*
1.15. "Initial Product" shall mean hylan gel-fluid 20 (hylan G-F 20)
Synvisc currently approved as a device with a CE mark for the intra-articular
treatment by viscosupplementation of osteoarthritis of the knee, to be supplied
in pre-filled syringes packaged ready for use, complying with Product Approvals
in the Territory as a device.
1.16. "Initial Product Specifications" shall mean the specifications
for the Initial Product set forth in Exhibit A, as such specifications may be
modified from time to time by agreement of the parties to reflect Improvements.
1.17. "Launch Date" shall mean, with respect to a country in the
Territory, the date of national introduction for commercial sale of the Product
by Wyeth or an Affiliate of Wyeth in such country.
1.18. "Net Revenues" shall mean for a specified period the total gross
invoice price received from the sale of all Products and Extended Products by
Wyeth and its Affiliates in the Territory during such period to non-Affiliated
wholesalers, hospitals, retail pharmacies, patients and other third party
purchasers,
*
Such amounts shall be determined from the books and records of Wyeth and its
Affiliates maintained in accordance with generally accepted accounting
principles, consistently applied.
1.19. "Non-competition Period" shall mean the period commencing on the
Effective Date and continuing until
*
thereafter.
1.20. "Patents" shall mean Letters Patent, or similar statutory rights
relating to any Products (including any continuation-in-part, continuation or
division thereof or substitute thereof), and patent applications which are
pending as of the Effective Date, in each case as set forth in Exhibit B hereto,
together with any supplementary or complementary protection certificates
therefor if and when such are granted.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 4
-4-
1.21. "Person" or "person" shall mean an individual, a corporation, a
partnership, a trust, an unincorporated organization or a government or any
agency or political subdivision thereof.
1.22. "Product Approvals" shall mean, for any country in the Territory,
those regulatory approvals required for importation, promotion, pricing,
marketing and sale of a Product or Extended Product in such country.
1.23. "Product(s)" shall mean the Initial Product, together with any
Improvements (as defined in Section 1.14) to the Initial Product.
1.24. "Product Specialist" shall mean that term as defined in Section
8.10.
1.25. "Reimbursement Approvals" shall mean any and all governmental and
other approvals necessary in any country in the Territory for the buyer of
Products or Extended Products to claim reimbursement for the purchase of the
Products or Extended Products from private or public health insurance
organizations in such country.
1.26. "Region" shall mean any one of the following groups of countries:
*
1.27. "Supply Agreement" shall mean the Supply Agreement of even date
herewith by and between Biomatrix (or one of its Affiliates) and Wyeth (or one
of its Affiliates) as the same may be amended, supplemented, modified or
restated and as in effect from time to time, and any replacement supply
agreement with respect to Products and Extended Products by and between
Biomatrix (or one of its Affiliates) and Wyeth (or one of its Affiliates).
1.28. "Territory" shall mean all of the countries set forth under
Section 1.26 above, subject to adjustment as set forth in Section 2.1(d).
1.29. "Trademarks" shall mean (i) the trademark Synvisc(R) and each
other mark, trademark or service mark described on Exhibit B hereto, and (ii)
any other marks, trademarks or service marks, as may be agreed upon in writing
from time to time by the parties hereto for use by Wyeth in connection with the
promotion, marketing and sale of the Product under this Agreement.
1.30. "Trademark Agreement" shall mean the Trademark License Agreement
of even date herewith by and between Biomatrix and Wyeth as the same may be
amended, supplemented, modified or restated and as in effect from time to time,
and any replacement Trademark License Agreement by and between Biomatrix and
Wyeth.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 5
-5-
1.31. "Unit" shall mean, with respect to the Initial Product, a 2.0ml
syringe of the Initial Product.
1.32. "U.S. Agreement" shall mean the agreement of even date herewith
by and between Biomatrix and Wyeth relating to the marketing of Products and
Extended Products in the United States, as the same may be amended,
supplemented, modified or restated and as in effect from time to time.
1.33. "U.S. Dollars" and "US$" shall mean the lawful currency of the
United States of America.
2. GRANT OF RIGHTS; ACCEPTANCE; EXCLUSIVITY; CERTAIN PAYMENTS.
2.1. Grant of License. (a) Subject to the terms and conditions
hereinafter set forth, Biomatrix hereby grants to Wyeth an exclusive (except as
to Biomatrix's right to promote, market and sell the Products and Extended
Products as set forth in Sections 2.3 and 8.10) license (without the right to
appoint sub-licensees, sub-agents or subdistributors) under the Patents to
import, promote, market, offer for sale and sell Products and Extended Products
for use in the Field within the Territory. Such Products and Extended Products
shall be packaged and supplied by Biomatrix or an Affiliate of Biomatrix to
Wyeth pursuant to the Supply Agreement.
(b) Except as specifically provided to the contrary herein, the
foregoing license shall not be construed (i) to effect any sale of proprietary
Biomatrix technology, (ii) to grant any license relating to Biomatrix's
proprietary methods of formulating, fabricating and manufacturing the Products
and Extended Products, (iii) to grant Wyeth any rights in or to the use of any
proprietary technology or Patents, or Trademarks of Biomatrix by implication or
otherwise. During the term of this Agreement Wyeth shall neither seek customers
for the Products or Extended Products outside the Territory, nor establish any
branch or maintain any distribution facilities outside the Territory for the
promotion, marketing, sale or distribution of Products or Extended Products
outside the Territory.
(c) It is understood by the parties that through the Development
Program Improvements and Extended Products may be developed. The parties agree
that the provisions relating to the Development Program are hereby incorporated
into this Agreement and any rights relating to Improvements and Extended
Products under the Development Program shall be incorporated into this
Agreement.
(d) The parties agree that Wyeth shall develop during the
*
period immediately following the Effective Date business plans for the marketing
and sale of Products in the Middle East Region and the ECE Region, and during
the
*
period following the Effective Date a business plan for the marketing and sale
of Products in Spain. After the delivery of such business plans to Biomatrix:
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 6
-6-
*
2.2. Acceptance of Obligations; Commercially Reasonable Efforts
*
(a) Wyeth hereby accepts the license granted in section 2.1 above and
hereby agrees to use Commercially Reasonable Efforts (as defined below), at all
times during the term of this Agreement, to import, promote, market, offer for
sale and sell the Products and Extended Products in the Territory. "Commercially
Reasonable Efforts" in this Agreement shall mean that Wyeth shall use generally
the * and shall be such as are commercially reasonable after taking into account
the establishment of the Product or Extended Product in the marketplace and the
* of the Product or Extended Product. * is not intended to be a substitute for
determining the Commercially Reasonable Efforts of Wyeth under this Section 2.2.
Wyeth shall promote the sale of Products and Extended Products through its sales
force, which shall receive training and support and have skills and resources
commensurate with those of Wyeth's sales force for other products which are of a
similar nature as the Products and Extended Products. Wyeth has no authority to
appoint any subagent, subdistributor, or other person to promote the sale of the
Products or Extended Products or to otherwise perform any of Wyeth's obligations
hereunder and agrees to refrain from using any such subagents, subdistributors
or other persons.
(b) Subject to delivery to Wyeth by Biomatrix of Wyeth's (i) launch
quantities as set forth on Exhibit C to the Supply Agreement and (ii)
*
of the First Contract Year sample quantities of the Initial Product, each
ordered in accordance with the terms of this Agreement and the Supply Agreement,
the Launch Date with respect to each country in the Territory
*
of the later of (i)
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 7
-7-
Effective Date or (ii) Product Approval date.
*
2.3. Conversion to Co-promotion or Co-exclusive License.
(a) Failure to Meet
*
Sales Goals. In the event that Wyeth's cumulative Net Revenues from sales of
Products in the
*
with respect to any Region set forth on Exhibit C shall fail to exceed the
*
set forth opposite such Region on Exhibit C, then Biomatrix may,
at its option, elect to co-promote the Products and Extended Products or any
Improvement in such Region either itself (or through an Affiliate) or with a
designee (a "Designee") selling for Wyeth's account. Such co-promotion may be
either on a fixed cost reimbursement or performance/incentive basis as agreed
upon by the parties. Biomatrix shall make any such elections within
*
after delivery to Wyeth of a notice of any such failure to meet such
*
The parties agree that they will in good faith adjust such amounts on Exhibit
C if Wyeth can demonstrate that parallel imports of Products or other factors
such as competitive products being introduced, lower than anticipated reimbursed
price approval and other material external market factors had a material adverse
impact on its ability to achieve such amounts in any such Region. If Biomatrix
elects to convert this Agreement to a co-promotional arrangement with respect to
one or more Regions pursuant to the provisions of this Section 2.3, then
Biomatrix (or an Affiliate) or its Designee shall be compensated as follows:
*
If Biomatrix elects to co-promote the Products and Extended Products in any
Region, then Biomatrix (or an Affiliate) or its Designee may co-promote under
the Trademark in such Region.
(b) Failure to Meet Marketing Plan Goals. In the event that Wyeth's Net
Revenue from sales of Products in any Region in the Territory during the
*
shall fail to exceed,
*
of the projected Net Revenue set forth in the marketing plan prepared in
accordance with Section 8.8 for such Region, then Biomatrix may elect (i) to
co-promote the Products and Extended Products under the Trademark for Wyeth's
account itself (or through an Affiliate) in such Region, and/or appoint one
Designee (other than Wyeth or any of its Affiliates) in such Region, or (ii) to
convert Wyeth's license rights in such Region to co-exclusive and co-market the
Products and Extended Products itself (or through an Affiliate) in such Region,
and/or appoint one Designee (other than Wyeth or any of its Affiliates) in such
Region, under a trademark that is not similar to the Trademark.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 8
-8-
Biomatrix shall make any such election with respect to any such Region within
*
with respect to such Region. If Biomatrix elects to co-promote the Products or
Extended Products itself (or through an Affiliate or Designee) with respect to
one or more Regions pursuant to the provisions of this Section 2.3(b), then
Biomatrix (or an Affiliate or Designee) shall be compensated on one of the
following bases:
*
If Biomatrix elects to convert Wyeth's rights in such Region(s) to co-exclusive
and co-market the Products and Extended Products ) (or through an Affiliate)
itself or in conjunction with a Designee with respect to one or more Regions
pursuant to the provisions of this Paragraph 2.3(b), then neither party shall
have any financial obligations to the other in connection with any sales by
Biomatrix (or an Affiliate) or its Designee under such co-marketing arrangement
(other than any obligations under the Supply Agreement and/or the Trademark
Agreement).
2.4 [RESERVED]
2.5. Development Payments. As an inducement for and in consideration of
the agreement of Biomatrix to actively participate in and support the
Development Program as set forth in Section 6 of the U.S. Agreement, Wyeth
hereby agrees to make the following non-refundable payments to Biomatrix:
(a) On the Effective Date Wyeth shall pay Biomatrix the amount of Four
Million U.S. Dollars ($4,000,000).
(b)
*
payable within five (5) days of
*
(c)
*
payable within five (5) days after the last day of the month in which
*
in the Territory exceed
*
in the aggregate.
2.6. Payments. In consideration for its license rights hereunder Wyeth
will compensate Biomatrix for the use of its Trademarks, and the Patent and
know-how components of the Products as follows:
(a) Initial Term. During the Initial Term (as defined in the Supply
Agreement), Wyeth will pay Biomatrix for Products according to the provisions of
the Supply Agreement.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 9
-9-
(b) Exclusive Additional Period. During any Additional Period in which
*
Wyeth will pay Biomatrix for Products for sale in such country according to the
provisions of the Supply Agreement
*
2.7. Nature of Payments. Each of the payments referred to in Sections
2.4, 2.5 and 2.6 hereof are independent of each other payment hereunder and
shall not be deemed satisfied by the making of any other payment hereunder. All
payments to be made pursuant to Sections 2.5 and 2.6 or under the Supply
Agreement shall be made in U.S. Dollars. Net Revenues denominated in an
Applicable Currency used in determining whether a payment is due shall be
converted to U.S. Dollars in accordance with Section 4.
2.8. Operations and Expenses. Except as otherwise set forth in this
Agreement, the operations of Wyeth under this Agreement are subject to the sole
control and management of Wyeth. Wyeth shall be responsible for all of its own
expenses and employees. Wyeth shall provide, at its own expense, such office
space and facilities, and hire and train such personnel, as may be required to
carry out its obligations under this Agreement. Wyeth agrees that it shall incur
no expense chargeable to Biomatrix, except as may be specifically authorized in
advance in writing in each case by Biomatrix.
2.9 Independent Purchaser and Seller. Neither party shall be considered
an agent or legal representative of the other party for any purpose, and neither
party nor any director, officer, agent or employee thereof shall be, or be
considered, an agent or employee of the other party. Neither party is granted
nor shall exercise the right or authority to assume or create any obligation or
responsibility, including without limitation contractual obligations and
obligations based on warranties or guarantees, on behalf of or in the name of
the other party.
3. TERM AND TERMINATION.
3.1. Term.
(a) Initial Term. Unless this Agreement is sooner terminated in
accordance with the provisions of this Agreement, this Agreement shall commence
on the Effective Date and shall end with respect to Products, on a
country-by-country basis, on the later to
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 10
-10-
occur of (i) the fifteenth (15th) anniversary of the Launch Date in such country
or (ii) the date of the expiration of the last to expire of the Patents in such
country (the "Initial Term"); provided, however, that payments on account of the
Trademark Royalty under Section 2.6(c) shall continue at all times when Wyeth is
utilizing the Trademark under the terms set forth in the Trademark Agreement.
(b) Additional Periods. This license shall be renewable following the
expiration of the Initial Term for further additional
*
under the provisions of either Section 2.6(b) or Section 2.6(c) (each such
additional term, an "Additional Period"). The parties shall agree in writing
upon whether the Additional Period shall be
*
at least
*
prior to the commencement of any such Additional Period. Biomatrix shall
continue to supply Products,
*
as mutually agreed, until such time as Wyeth elects not to renew this license.
3.2. Inventory. (a) Upon termination of this Agreement for any
reason, Wyeth and Wyeth Affiliates shall have the right to market and sell all
Products and Extended Products in inventory for a period *
(b) Subject to Wyeth's rights set forth in Section 3.2(a), upon
termination of this Agreement for any reason, Biomatrix shall have the right
but not the obligation to (i) repurchase all of the inventory of the Products
and Extended Products held by Wyeth or its Affiliates * (ii) assume title to
all such inventory, and (iii) become entitled to sell and distribute for the
benefit of Biomatrix such inventory *
*
3.3. Insolvency. This Agreement may be immediately terminated by either
party, upon giving written notice to the other party, in the event that the
other party shall become insolvent or be declared bankrupt by a court of
competent jurisdiction or shall be the subject of any reorganization (other than
a corporate reorganization effected in the ordinary course of business and not
arising out of any insolvency) or winding up, receivership or dissolution,
bankruptcy or liquidation proceeding, or any proceeding or action similar to one
or more of the above, in which case termination shall be effective upon such
written notice. The failure of either party to give notice of termination upon
obtaining knowledge of any such event shall not be interpreted as a waiver of
such party's rights under this Section 3.3, and such party reserves the right to
exercise any such rights at any time after the occurrence of any such event.
3.4. Breach. This Agreement may be terminated by either party if the
other party shall commit a material breach of any provision hereof and shall not
cure such breach within
*
after a written notice by the other party to cure the breach; provided, that
in the case of a payment breach such cure period shall be equal to
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 11
-11-
after written notice.
*
3.5. Wyeth Termination. Wyeth may terminate this Agreement with
respect to any country in the Territory in its sole discretion at any time upon
one (1) year written notice to Biomatrix; provided, however, that in such event
(subject to Wyeth's rights set forth in Section 3.2(a)):
(a) Biomatrix may accelerate such termination to any date
after receipt of such termination notice;
(b) if such termination notice is with respect to less than
all countries in a Region then Biomatrix may, upon notice
to Wyeth immediately terminate this Agreement with respect
to any or all countries in the Region *
(c) Wyeth's rights under the Trademark Agreement and Supply
Agreement shall terminate with respect to any country with
respect to which this Agreement terminates; and
(d) Wyeth shall not sell a Competing Product (as defined in
Section 6.1) in any such country for a period of * after
the effectiveness of termination of this Agreement with
respect to such country.
3.6. Certain Rights Upon Termination. Upon termination of this
Agreement for any reason whatsoever, other than pursuant to Section 3.1,
(a) Biomatrix shall have the unrestricted right to review, access, use
and permit others to review, access and use, either directly or by
cross-reference or incorporation or otherwise, all information, data,
investigations, preclinical and clinical protocols (including without
limitation, marketing information and information relating to laboratory, animal
and human studies), and related regulatory approvals pertaining to the Products
(the "Information") which are possessed or controlled by Wyeth or any of its
Affiliates, or which Wyeth or any of its Affiliates has a right to review,
access or use. Wyeth unconditionally agrees promptly to take any action and to
execute and deliver to Biomatrix any documents or instruments reasonably
requested by Biomatrix to permit Biomatrix to make full use of such unrestricted
rights In addition, Wyeth agrees that it shall, upon the request of Biomatrix,
immediately inform all relevant regulatory authorities that Wyeth is no longer a
licensee of the Products and shall take all action and execute and deliver all
documents and instruments necessary in order to transfer all Product Approvals,
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 12
-12-
Reimbursement Approvals and price approvals and other relevant documents
relating to the Products to Biomatrix or any Person designated by Biomatrix.
(b) Notwithstanding the provisions of Section 3.6(a), both parties in
good faith shall take whatever action necessary to clarify the relationship
between Wyeth and Biomatrix during an Additional Period.
3.7. Effects of Termination.
(a) Subject to Wyeth's rights set forth in Section 3.2(a), upon
termination of this Agreement for any reason, other than pursuant to Section
3.1, Wyeth shall discontinue using the Trademarks or making any representations
regarding its status as a licensee of Biomatrix and shall cease conducting any
activities with respect to the marketing, promotion, sale or distribution of the
Products in the Territory and shall take such action as is necessary to
terminate Wyeth's registration as Biomatrix's licensee with any governmental
authority.
(b) Termination of this Agreement shall not affect obligations of
either party that may have accrued prior to the effective date of termination or
any obligation specifically stated to survive termination. Except to the extent
limited by Section 3.8, termination of this Agreement shall be in addition to,
and shall not be exclusive of or prejudicial to, any other grounds for
termination or rights or remedies at law or in equity which either party may
have on account of any default of the other party.
3.8. Waiver. Wyeth and Biomatrix hereby waive, to the extent they are
able to do so under applicable law, any statutory rights they may have or
acquire under the laws of any country in the Territory in respect of the
termination of the relationship established hereby pursuant to the terms hereof,
and agree that the rights available to them hereunder in the event of such
termination are adequate and reflect the agreement of the parties. Neither Wyeth
nor Biomatrix nor any of their respective Affiliates shall have any right to
claim any indemnity for goodwill or loss thereof, lost profits, loss of
prospective compensation, expenditures, investments, leases or any type of
commitment made in connection with the business of such party in reliance on the
existence of this Agreement or any damages arising from the termination of this
Agreement by the other party in accordance with the terms hereof.
4. PAYMENTS; EXCHANGE RATE.
(a) All payments hereunder shall be made in U.S. Dollars and at the
exchange rates set forth in this Section 4. Payments to Biomatrix shall be wired
to an account in a bank designated by Biomatrix and the costs of any such
remittance shall be borne by Wyeth.
<PAGE> 13
-13-
(b) All amounts denominated in an Applicable Currency shall be
converted to U.S. Dollars using the consistently applied method of conversion
utilized by Wyeth at the corporate level for financial reporting purposes, which
method shall be in accordance with generally accepted accounting principles.
5. WITHHOLDING. All payments to be made by Wyeth under this Agreement
shall be made in full, free and clear of and without any deduction of or
withholding for or on account of any taxes levied in any country of the
Territory or elsewhere; provided that if Wyeth shall be required by law to make
any deduction or withholding from any payment to Biomatrix then:
(i) Wyeth shall ensure that such deduction or withholding does not
exceed the minimum legal liability therefor;
(ii) at least thirty (30) days prior to the first deduction or
withholding, Wyeth shall notify Biomatrix thereof, and the
parties shall negotiate in good faith adjustments to the
payments hereunder in order to minimize or eliminate such
deduction or withholding, provided that the total payments by
Wyeth shall not increase; and
(iii) Wyeth shall forward to Biomatrix such documentary evidence as
may be available in respect of each deduction, withholding or
payment together with each payment or promptly thereafter.
6. COMPETING PRODUCTS.
6.1. Non-competition by Wyeth. In recognition of the rights granted by
Biomatrix to Wyeth and the other obligations of Biomatrix hereunder, Wyeth
agrees that it shall not, directly or indirectly (alone or with others), and it
shall ensure that its Affiliates shall not, directly or indirectly (alone or
with others), during the Non-competition Period, manufacture, sell, market,
distribute or promote a Competing Product in the Territory;
*
If Wyeth
*
Wyeth agrees that (a) it shall not expand the market where it sells such
Competing Product into any country in the Territory in which such Competing
Product is not currently sold at the time of any such acquisition and (b) Wyeth
shall
*
Wyeth acknowledges and agrees that, in the event of a breach or threatened
breach by Wyeth of its obligations under this Section 6.1, Biomatrix will have
no adequate remedy at law, and accordingly shall be entitled to injunctive or
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 14
-14-
other appropriate equitable remedies against such breach or threatened breach in
addition to any other remedies which Biomatrix may have.
6.2. New Products. Notwithstanding any provision in this Agreement or
in the U.S. License Agreement to the contrary, if Biomatrix develops a New
Product and Wyeth is an exclusive licensee of any Product or Extended Product
in a country, Biomatrix shall not commercialize any such New Product in any
country in which Wyeth is an exclusive licensee under this Agreement of any
Product or Extended Product until the following conditions have been satisfied:
(i) Biomatrix has made a commercially reasonable written
offer to Wyeth to participate with Biomatrix in the development
and marketing of such New Product;
(ii) Wyeth has failed to accept such written offer or make
its own commercially reasonable written offer within * of its
receipt of such offer; and
(iii) The parties shall have negotiated in good faith to
attempt to reach agreement based upon Biomatrix's and/or Wyeth's
offer for a period *
In the event that the parties fail to reach an agreement pursuant to
this Section 6.2 within * of Wyeth's receipt of Biomatrix's first written
offer, then Biomatrix shall not be restricted by this Agreement or the U.S.
License Agreement in the exercise of any rights that Biomatrix might otherwise
have to develop and/or commercialize any New Product to which such offer
relates; provided that *
Nothing in this Section 6.2 shall be construed, by implication or
otherwise, (i) to effect any sale or license of proprietary Biomatrix technology
(including any New Products), (ii) to grant any license relating to Biomatrix's
proprietary methods of formulating, fabricating and manufacturing Products,
Extended Products or New Products, or (iii) to grant Wyeth any rights in or to
any proprietary technology or Patents or Trademarks of Biomatrix.
7. CONFIDENTIAL INFORMATION; PUBLIC ANNOUNCEMENTS.
7.1. Confidential Information. All information acquired by either party
(the "Recipient") from the other party or any of its Affiliates (the
"Discloser") during the term of this Agreement or prior to the Effective Date,
relating directly or indirectly to the
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 15
-15-
present or potential business, operations, corporate, technical or financial
situation of the Discloser, or to manufacturing know-how, patents, data, test
results, techniques, processes, procedures, raw materials, dealer, supplier and
customer lists, the Information described in Section 3.5, pre-clinical and
clinical protocols or any improvements thereof of the Discloser ("Confidential
Information") is confidential, and shall be held in trust by the Recipient for
the exclusive benefit of the Discloser. Unless otherwise agreed to in writing by
the Discloser, the Recipient shall not at any time, either during or subsequent
to the term of this Agreement, use for itself (other than in accordance with the
terms of this Agreement) or any other Person, or disclose or divulge to any
Person, other than to those of its employees and advisors and Affiliates who
require the same for the purposes hereof and who are bound by the same
obligations of confidentiality, non-disclosure and non-use as set forth herein,
any Confidential Information or any other confidential or proprietary
information of the Discloser of which the Recipient may acquire knowledge;
provided, however, that the confidentiality, non-disclosure and non-use
provisions contained in this Section 7.1 shall not apply to any information or
data to the extent that the Recipient:
(i) shall demonstrate by written evidence that such information or
data is known generally to persons in the trade through no act
or omission of the Recipient or any of its Affiliates;
(ii) is required by any government authority to disclose such
information or data, including without limitation for the
purposes of obtaining and maintaining any Product Approvals
under this Agreement; or
(iii) shall demonstrate by its written records that such information
or data was disclosed to or created by it or its Affiliates on
a non-confidential basis from a source other than the
Discloser or its Affiliates and that such disclosure or
creation did not constitute a breach of any applicable
confidentiality obligations.
All Confidential Information shall be immediately returned to the Discloser upon
termination of this Agreement, along with any copies, reproductions, digests,
abstracts or the like of all or any part thereof in the Recipient's possession
or under the Recipient's control, and upon such return any computer entries or
the like relating thereto shall, to the extent legally permissible, be
destroyed. The Recipient shall then attest to the Discloser in writing as to the
return and/or destruction of the Confidential Information. Such return (and
destruction) will not affect the Recipient's obligations hereunder, which shall
survive indefinitely or, if a definite period is required under applicable law,
until five (5) years after termination or expiration of this Agreement.
Notwithstanding anything herein to the contrary, the provisions of this Section
7.1 shall be subject to Biomatrix's rights under Section 3.5.
7.2. Public Announcement. Except as shall be necessary for governmental
notification purposes or to comply with applicable laws and regulations, and
except as
<PAGE> 16
-16-
otherwise agreed to by the parties hereto in writing, the parties agree to keep
the existence of this Agreement, and the transactions contemplated hereby,
strictly confidential. The parties shall agree upon the text of an initial
public announcement relating to the transactions contemplated by this Agreement
as soon as possible after the Effective Date. Any subsequent public
announcements regarding this Agreement or the transactions contemplated herein
shall also be agreed upon in writing between the parties prior to any release
thereof.
8. INTELLECTUAL PROPERTY; AGREEMENT PRODUCT MARKING; PROMOTIONAL
INFORMATION; REGULATORY MATTERS.
8.1. PATENTS. (a) Biomatrix shall be responsible, at its cost and
expense, for prosecuting to issuance in the Territory all patent applications,
for filing and prosecuting all patent reissues and reexaminations, for applying
for and obtaining any Supplementary Protection Certificates, and for paying all
annuities, on all patents, and all such applications and patents shall
constitute Patents under this Agreement.
(b) Upon request of Wyeth, Biomatrix shall provide Wyeth with a copy of
the prosecution file wrapper histories of each patent and application
constituting Patents under this Agreement.
8.2. Trademarks. The Trademark Agreement sets forth the terms and
conditions of Wyeth's use of the Trademarks. Upon termination of this Agreement,
all rights set forth herein with respect to the Trademarks shall terminate and
the rights and obligations set forth in the Trademark Agreement shall govern the
use of the Trademarks.
8.3. Notice of Infringement. Each party hereto agrees to notify the
other in writing promptly (but not later than thirty (30) days) after obtaining
knowledge of any infringements or imitations of the Trademarks or Patents by
third parties. Further, Wyeth agrees to notify Biomatrix immediately after it
becomes aware that any of the Products or Extended Products sold in the
Territory are thereafter sold or transported outside the Territory.
8.4. Labelling and Promotional Materials. Wyeth shall provide Biomatrix
with labelling masters, instructions, specifications and copies of all
marketing, labelling and promotional material it intends to use relating to the
Products or Extended Products. All such labelling, packaging and promotional
material that include claims or items impacting regulatory approvals shall be
consistent with all relevant regulatory requirements and shall be reviewed by
Biomatrix and shall be subject to its written approval prior to use. All other
major promotional materials for launches and subsequent promotions shall be
provided by Wyeth to Biomatrix within a reasonable time prior to their use in
order to allow Biomatrix to comment on such materials. Wyeth shall provide
Biomatrix with all other promotional materials as promptly as practicable.
<PAGE> 17
-17-
8.5. Legend. Subject to applicable laws and regulations in the
Territory, all relevant packaging and promotional material for the Products and
Extended Products used or sold by Wyeth shall contain (i) all applicable
markings needed to keep the Trademarks enforceable throughout the Territory as
specified in writing by Biomatrix to Wyeth, and (ii) a legend which shall be
displayed in a reasonably conspicuous manner on all packaging of such Products
and Extended Products containing the corporate identification logo of Biomatrix
in at least equal prominence as that of Wyeth, and indicating that such Product
or Extended Product has been developed and manufactured by Biomatrix, Inc., and
its affiliates, 65 Railroad Avenue, Ridgefield, New Jersey, 07657 U.S.A. or
similar statement in such form as is consistent with Biomatrix's practices in
distributing the Agreement Product through other distribution arrangements in
other territories.
8.6. Promotional Support.
(a) Samples. Wyeth will be allowed to purchase up to a maximum of
*
respectively, solely for the purposes of promotion of the Initial Product in the
Territory. Biomatrix agrees to sell such samples to Wyeth for a price equal to
*
for each such Unit.
(b) Exchange of Information. Biomatrix and Wyeth shall provide to each
other on an ongoing basis and without charge (to the extent not prevented by law
or contract from doing so) all marketing, medical, scientific and other
information relating to the Products and Extended Products (including summary
data from studies, clinical trials and the like as well as information regarding
adverse events associated with the use of the Products and Extended Products),
the proceedings of all symposia on the Products and Extended Products and all
promotional information that is available to such party relating to the Products
and Extended Products. In addition, Biomatrix and Wyeth shall provide each other
with access to such primary data and information in its possession as the other
may reasonably request regarding the results of the studies contained in such
summary data referred to above. Each party shall have the right to use the
marketing, promotional, medical, scientific and other information of the other
party as long as such use is not restricted or limited by any other provision in
this Agreement.
(c) Reference to Viscosupplementation and Biomatrix. Subject to
applicable laws and regulations in the Territory, Wyeth shall ensure that all
trade literature, publications and promotional materials relating to the
Products and Extended Products produced by or on behalf of Wyeth or any of its
Affiliates shall, in a reasonably conspicuous manner, refer to
viscosupplementation. In major promotional materials, and other material where
appropriate, Wyeth shall in a reasonably conspicuous manner reference that the
concept and the name viscosupplementation have been conceived and introduced by
the founders of Biomatrix. The product positioning for the Initial Product shall
be the same as is currently used by Biomatrix, as redefined from time to time by
*Confidential portions have been omitted and filed separately
with the Commission.
<PAGE> 18
-18-
Biomatrix based upon current and new scientific, medical or marketing
information obtained.
8.7. Customer Service. In connection with sales of Products and
Extended Products in the Territory, Wyeth shall carry out, at its expense, all
order entry, sales reporting, accounts receivable and collections and costs
related thereto.
8.8. Marketing Plan. Three months prior to the end of the
*
Agreement Year, Wyeth shall prepare at its own expense and deliver to
Biomatrix a
*
forecast of its sales of Products and Extended Products in the Territory on a
Region by Region basis (the "Marketing Plan") setting forth (i) its projections
of Net Revenues for each country in the Territory for each of the
*
(ii) its projected marketing efforts in the Territory during such
*
period, and its projections of the cost thereof, and (iii) its projected
marketing mix. Wyeth shall prepare the Marketing Plan in good faith and shall
use Commercially Reasonable Efforts in such preparation.
8.9. Development, Marketing and Sales Steering Committee. The parties
shall establish a development, marketing and sales steering committee (the
"Committee") comprised of three (3) voting representatives designated by each
party. The Committee will be administered by a chairman appointed from the
members, alternating yearly among representatives of Biomatrix and Wyeth. The
Committee will meet at least twice annually, or more often if necessary as
requested by either party, and written minutes of each meeting shall be kept. In
addition to any specific powers granted to the Committee in this Agreement and
the Supply Agreement, the Committee shall oversee the continued development of
the Improvements and Extended Products with respect to label extensions, product
reimbursement approvals, the marketing and sale of the Products and Extended
Products, and the development of promotional programs and the preparation of
marketing studies. The Committee shall not have the authority to change the
responsibilities of the parties under this Agreement. Decisions of the Committee
shall be made by consensus (a majority of the members designated by each party).
The Committee will have no control over the marketing and sales budget of either
party. If, after a period of thirty (30) days (or earlier at the election of
either party), a matter is still not resolved, it shall be referred to the CEO
of Biomatrix and the Executive Officer of American Home Products Corporation
responsible for its global pharmaceutical operations, or their designees, to
resolve in a period of thirty (30) days through good faith discussions, or if
still unresolved, to promptly agree upon a binding third party dispute
resolution mechanism intended to promptly and fairly resolve the matter in
dispute. The Committee will have no control over the marketing, sales or
development budget of either party.
8.10. Co-Promotion.
*
Biomatrix shall hire and train as employees of Biomatrix (at Wyeth's expense)
*
sales representatives for
*
active in marketing and sale of the Products (the "Product Specialists"). The
Product Specialists shall co-promote the
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 19
-19-
Products and Extended Products in cooperation with Wyeth's marketing and sales
force in accordance with marketing plans approved by the Committee. All sales of
the Products in the Territory made by the Product Specialists during the term
hereof shall be
*
Beginning in the
*
Biomatrix shall have the right to require that the Product Specialists be
permitted to market, promote and sell other products manufactured by Biomatrix
for the account of Biomatrix. Subject to applicable
*
laws, Biomatrix shall consider for employment current employees of Wyeth as
Product Specialists. Biomatrix shall have the right to assign up to a total of
*
of the Product Specialists under this Agreement and the U.S. Agreement toward
the promotion of Products and Extended Products
*
8.11. Customer Lists. Wyeth shall maintain a master customer list
containing relevant information on sales of the Products and shall deliver
copies of such list to Biomatrix on a quarterly basis for Germany, Spain,
Portugal, Austria and Greece or promptly on the request of Biomatrix but not
more than annually with respect to other countries in the Territory.
8.12 Product Vigilance System. Wyeth shall be responsible for
maintaining medical device vigilance systems, as established for the Products
and Extended Products by applicable regulatory requirements, and shall promptly
provide Biomatrix with notice of all product related events and complaints,
including medical complaints. The parties shall develop a mutually agreed
procedure to comply with regulatory requirements and the policies of each party.
Biomatrix shall be solely responsible for processing, analyzing and, if
necessary, reporting medical complaints to regulatory authorities. Wyeth shall
provide all necessary support to Biomatrix for carrying out such activities.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 20
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8.13. Recalls of Products.
(a) * the * either party in good faith determines that a * such
party shall immediately notify the other party in writing and shall advise such
other party of the * The parties shall consult with each other as to any action
to be taken in *
(b) Except as otherwise provided in (c) below, in the event of
a recall of a Product or Extended Product, Biomatrix shall correct any
deficiency relating to its manufacturing, packaging, testing, labelling,
storing or handling of the Product or Extended Product for which it is
responsible, if applicable, and shall at its cost replace such defective
Product or Extended Product recalled.
(c) Biomatrix shall reimburse Wyeth for all direct costs and
expenses (including without limitation shipping, quality control testing and
notification costs) incurred by Wyeth and its Affiliates as a result of any
recall, except where such recall (i) is the result of the failure of Wyeth or
its Affiliates to comply with their obligations under this Agreement and/or
(ii) was opposed by Biomatrix and proved to be unwarranted, in either case
Wyeth shall reimburse Biomatrix for all direct costs and expenses (including
without limitation shipping, quality control testing and notification costs)
incurred by Biomatrix and its Affiliates as a result of such recall.
8.14. Compliance. Wyeth shall, at its expense, obtain any and all
import licenses that may be necessary to permit the sale by Biomatrix and the
purchase by Wyeth of the Products and Extended Products hereunder, obtain such
approvals from the banking and other governmental authorities in the Territory
for payment of all amounts due hereunder to Biomatrix in U.S. Dollars, and
comply with any and all governmental laws, regulations, and orders that may be
applicable to Wyeth by reason of its execution of this Agreement including any
requirement to be registered as the Biomatrix's reseller of products with any
governmental authority, and including all laws, regulations or orders that
govern or affect the ordering, export, shipment, import, sale (including
government procurement), delivery, or redelivery of Products and Extended
Products in the Territory. Wyeth shall furnish Biomatrix with such documentation
as Biomatrix may request to confirm Wyeth's compliance with this Section 8.14
and agrees that it shall not engage in any course of conduct that, in
Biomatrix's reasonable belief, would cause Biomatrix to be in violation of the
laws of any jurisdiction.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 21
-21-
8.15. Local Laws. Each party shall notify the other party of the
existence and content of any provision of law in the Territory or any other
applicable law that conflicts with any provision of this Agreement at the time
of its execution or thereafter.
8.16. Questionable Payments. Wyeth shall not, directly or indirectly,
in the name of, on behalf of, or for the benefit of Biomatrix offer, promise or
authorize to pay, or pay any compensation or give anything of value to, any
official, agent or employee of any government or governmental agency, or to any
political party or officer, employee or agent thereof in connection with the
promotion or sale of Products and Extended Products.
9. SUPPLY OF PRODUCTS. The Supply Agreement sets forth the terms and
conditions for sale of Products by Biomatrix (or its Affiliates) to Wyeth.
10. INDEMNIFICATION; LIMITATION ON LIABILITY
10.1. Indemnification from Wyeth. Subject to the provisions of Section
10.3, Wyeth shall defend, indemnify and hold Biomatrix and its Affiliates and
their respective directors, officers, agents and employees harmless from and
against any and all liabilities, claims, damages and expenses (including without
limitation actual court costs and reasonable attorneys' fees regardless of
outcome) resulting from or arising out of or in connection with:
(a) any failure * by Wyeth to act in accordance with the terms
of this Agreement, the Supply Agreement, the Trademark Agreement and/or
any applicable laws and regulations in the Territory in connection with
the Products, including without limitation any unauthorized
representations, warranties or guarantees given by Wyeth;
(b) any breach by Wyeth or any of its Affiliates of a
representation, warranty or covenant made by it or on its behalf in
this Agreement, the Trademark Agreement or in the Supply Agreement;
(c) any activities of Wyeth relating to the promotion,
marketing, sale and distribution of Products and Extended Products;
and/or
(d) any * on the part of Wyeth or its Affiliates in connection
with Products and Extended Products.
10.2. Indemnification from Biomatrix. Subject to the provisions of
Section 10.3, Biomatrix shall defend, indemnify and hold Wyeth and its
Affiliates and their respective directors, officers, agents and employees
harmless from and against any and all liabilities, claims, damages and expenses
(including without limitation actual court costs and reasonable attorneys' fees
regardless of outcome) resulting from or arising out of or in connection with:
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 22
-22-
(a) any failure * by Biomatrix to act in accordance with the
terms of this Agreement and/or to act in accordance with applicable
laws and regulations in the Territory in connection with the Products
and Extended Products;
(b) *
(c) any breach by Biomatrix or any of its Affiliates of a
representation, warranty or covenant made by or on its behalf in this
Agreement; and/or
(d) any * on the part of Biomatrix or its Affiliates in
connection with Products and Extended Products.
10.3. Limitation on Liability.
NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN SECTIONS 10.1 AND 10.2
ABOVE, OR ANY OTHER PROVISION OF THIS AGREEMENT OR THE SUPPLY AGREEMENT, IN NO
EVENT (INCLUDING THE FAULT, NEGLIGENCE OR STRICT LIABILITY OF EITHER PARTY)
SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY, INCLUDING
ANY PURCHASER OF PRODUCTS OR EXTENDED PRODUCTS, FOR INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES OTHER THAN TO THE EXTENT NECESSARY
TO REIMBURSE SUCH OTHER PARTY FOR DAMAGES ACTUALLY PAID TO A NON-AFFILIATED
THIRD PARTY, PROVIDED THAT SUCH DAMAGES ARE OTHERWISE COVERED BY THE PROVISIONS
OF SECTION 10.1 OR SECTION 10.2, AS THE CASE MAY BE.
10.4 Indemnification Procedure. The party claiming indemnification
("Indemnitee"), after being advised of any assertions of any such third party
claims or suits or upon the bringing or filing of such claims or suits by any
third party against the Indemnitee, shall promptly notify the party from which
indemnification is sought ("Indemnitor") thereof; provided, that the failure to
promptly notify shall not affect the Indemnitor's obligations hereunder except
to the extent the Indemnitor is prejudiced by the delay in notification. The
Indemnitee shall permit the Indemnitor's attorneys to handle and control the
defense of such claims or suits at the Indemnitor's cost. The Indemnitee shall
co-operate with the Indemnitor in the defense of such claims or suits. The
parties agree that there shall be no settlements, whether agreed to in court or
out of court, without the prior written consent of the Indemnitor.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 23
-23-
11. REPRESENTATIONS OF BIOMATRIX. Biomatrix represents, warrants and
covenants as follows:
11.1. Biomatrix is a corporation duly organized and validly existing
under the laws of the state of Delaware with the full power to conduct its
affairs as currently conducted and contemplated hereunder. All necessary action
has been taken to enable it to execute and deliver this Agreement and perform
its obligations hereunder.
11.2. This Agreement is a valid and binding obligation of Biomatrix
enforceable in accordance with its terms. Biomatrix has the unencumbered right
to enter into this Agreement and to fulfill its duties hereunder. It is not and
will not become a party to any agreement in conflict herewith. Accordingly,
Biomatrix has the right to grant Wyeth the exclusive license granted hereunder
in the Territory in accordance with the terms of this Agreement and such grant
will not constitute a breach of any existing contractual or other arrangements
between Biomatrix and any Affiliated or non-Affiliated third party, nor shall it
infringe on the rights of any Affiliated or non-Affiliated third party.
11.3. No approval, consent, order, authorization or license by, giving
notice to or taking any other action with respect to, any governmental or
regulatory authority is required in connection with the execution and delivery
of this Agreement by Biomatrix and the performance by Biomatrix of its
obligations hereunder, other than the Product Approvals contemplated herein.
12. REPRESENTATIONS OF WYETH. Wyeth represents, warrants and covenants
as follows:
12.1. Wyeth is a corporation duly organized and validly existing under
the laws of the State of Delaware with the full power to conduct its affairs as
currently conducted and contemplated hereunder. All necessary action has been
taken to enable it to execute and deliver this Agreement and perform its
obligations hereunder.
12.2. This Agreement is Wyeth's valid and binding obligation
enforceable in accordance with its terms. Wyeth has the unencumbered right to
enter into this Agreement and to fulfill its obligations hereunder. It is not
and will not become a party to any agreement in conflict herewith. Accordingly,
Wyeth has the right to act as the exclusive licensee of the Products and
Extended Products in the Territory in accordance with the terms of this
Agreement and the performance of its obligations hereunder will not constitute a
breach of any existing contractual or other arrangements between Wyeth and any
Affiliated or non-Affiliated third party, nor shall it infringe the rights of
any Affiliated or non-Affiliated third party.
12.3. No approval, consent, order, authorization or license by, giving
notice to or taking any other action with respect to any governmental or
regulatory authority is required in connection with the execution and delivery
of this Agreement by Wyeth and
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 24
-24-
the performance by Wyeth of its obligations hereunder, other than the Product
Approvals contemplated herein.
13. INSURANCE. (a) Biomatrix shall maintain comprehensive general
liability insurance coverage including products liability with a minimum limit
of not less than
*
(b) Wyeth warrants that it is self-insured for the first
*
of product liability exposure on an annual aggregate basis and purchases excess
insurance above such self-insurance amount.
14. INFRINGEMENT. Each of Wyeth and Biomatrix will promptly notify the
other party in writing of any infringement of a Patent or Trademark or the
know-how or unauthorized disclosure or use of any Confidential Information, of
which it becomes aware in the Territory. Biomatrix shall have the exclusive
right at its own cost to take all legal action in the Territory it deems
necessary or advisable to eliminate or minimize the consequences of such
infringement of a Patent or Trademark or the know-how in the Territory. For the
purpose of taking any such legal action, Biomatrix shall have the right, to use
the name of Wyeth and/or any Affiliate of Wyeth as plaintiff, either solely or
jointly in accordance with the applicable rules of procedure. Wyeth shall
promptly furnish Biomatrix with whatever written authority may be required in
order to enable Biomatrix to use Wyeth's name in connection with any such legal
action, and shall otherwise cooperate fully and promptly with Biomatrix in
connection with any such action. All proceeds realized upon any judgment or
settlement regarding such action shall belong exclusively to Biomatrix.
15. REGULATORY ACTIVITIES.
15.1. GENERAL.
(a) Approvals.
(i) Biomatrix shall, at its cost, be solely responsible for
maintaining the Initial Product Product Approvals in all
countries in the Territory where the Initial Product is
approved as of the Effective Date.
(ii) Wyeth shall, at its cost, obtain and maintain Product
Approvals in all countries in the Territory except those
approvals described in Section 15.1(a)(i). All such Product
Approvals are subject to Biomatrix's rights under section
15.1(b).
(iii) Wyeth shall, at its cost, obtain and maintain all
Reimbursement Approvals in each country in the Territory,
subject to Biomatrix's rights under Section 15.1(b).
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 25
-25-
(b) Review by Biomatrix. Biomatrix shall be entitled to assist in
developing the strategy and content of all applications for Product Approvals
and Reimbursement Approvals and the content of all such applications shall be
subject to Biomatrix's prior written approval. All Product and Reimbursement
Approvals shall be held as the exclusive property of and in the name of
Biomatrix except to the extent that applicable law requires that such approvals
be held in the name of Wyeth, or unless otherwise agreed in writing by the
parties. Any filings for reimbursement or regulatory approval in the Territory
shall be subject to the prior written approval of each of the parties.
(c) Mutual support. Wyeth and Biomatrix shall provide reasonable advice
and assistance to each other as may be necessary to obtain and maintain Product
Approvals and, if applicable, satisfactory Reimbursement Approvals for Products
in the Territory.
(d) Transfer of approvals. In the event that the Product Approvals and
the Reimbursement Approvals (if any) relating to any Product or Extended Product
in any country in the Territory is in the name of Wyeth or any of its
Affiliates, it shall be transferred to Biomatrix immediately upon termination of
the Agreement.
(e) Reporting on Agreement Product. During the term of this Agreement,
each party shall immediately notify the other in writing in the event that such
party becomes aware of any failure of the Products or Extended Products to
comply with any of the requirements therefor specified in any Product Approval.
(f) Ongoing information exchange. Each party shall keep the other
advised of regulatory interactions, activities and correspondence and the
registration status of Products on a quarterly basis, except that matters
requiring more immediate attention shall be communicated as soon as practicable.
15.2. CLINICAL TRIALS; PUBLICATION OF RESULTS.
(a) Wyeth shall be responsible, at its own cost, for
conducting and managing any clinical trials which may be required in order to
obtain or maintain Product Approvals and Reimbursement Approvals in the
Territory; provided that the protocols for all such clinical trials shall be
subject to Biomatrix's prior written approval and Biomatrix shall have the right
to audit the performance of any such clinical studies.
*
(b) Wyeth shall provide the completed data resulting from all clinical
trials conducted in accordance with this Section 15.2 to Biomatrix, and
Biomatrix shall be allowed to assist in analysis of the completed data and in
preparing the final reports relating to such clinical trial data. Biomatrix and
its Affiliates shall be free to use the results of any or all such clinical
trials in the promotion, marketing and product licensing of Products and
Extended Products outside the Territory. The results of any such studies
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 26
-26-
will not be published or publicized in any way without the prior written
approval of Biomatrix.
16. FURTHER ASSURANCES. The parties hereto agree to execute such
further or other documents and assurances as are necessary from time to time in
order to give effect to the provisions of this Agreement.
17. ASSIGNMENT. The rights and obligations of the parties hereto shall
inure to the benefit of and shall be binding upon the authorized successors and
permitted assigns of each party. Neither party may, without the prior written
consent of the other party, take any of the following actions (collectively
referred to hereby as an "Assignment"): (i) assign or transfer its rights or
obligations under this Agreement, (ii) license or sublicense any of its rights
or obligations under this Agreement, or (iii) designate another person to
perform all or part of its obligations under this Agreement or have all or part
of its rights and benefits under this Agreement; provided, however, that a party
may make Assignments to Affiliates of such party or to a successor, by merger or
acquisition; and provided, further that in the case of an Assignment to an
Affiliate the assigning party shall promptly notify the other party in writing
of such Assignment and shall remain liable (both directly and as guarantor) with
respect to all obligations so assigned and the other party will not be in a
direct contractual relationship with such Affiliate. In the event of any
permitted Assignment or in the event that an Affiliate of either party shall
exercise rights and/or perform obligations hereunder pursuant to the terms of
this Agreement, the assignee or Affiliate, as the case may be, shall
specifically assume and be bound by the provisions of the Agreement by executing
and agreeing to an assumption agreement satisfactory to the other party hereto.
18. GOVERNING LAW; INJUNCTIVE RELIEF.
(a) This Agreement and the respective rights and obligations of the
parties shall be governed by and construed in accordance with the internal and
substantive laws of the State of New Jersey, United States of America (without
regard to principles of conflicts of laws). The parties hereby agree that the
United Nations Convention on Contracts for the International Sale of Goods shall
not apply to this Agreement or any other document contemplated hereby. In the
event of any dispute touching or concerning this Agreement, the parties hereby
agree to submit such dispute to their respective chief executive officers or
their designees by notice delivered in accordance with the provisions of Section
23 hereof. Each of the parties agrees that any suit relating to this Agreement
may be brought in the courts of the State of New Jersey or any federal court
sitting therein and consents to the non-exclusive jurisdiction of such court and
service of process in any such suit being made by mail at the address specified
in Section 23. Each party hereby waives any objection that it may now or
hereafter have to the venue of any such suit or any such court or that such suit
is brought in an inconvenient court.
<PAGE> 27
-27-
(b) Each of the parties hereto acknowledges and agrees that damages
will not be an adequate remedy for any material breach or violation of this
Agreement if such material breach or violation would cause immediate and
irreparable harm (an "Irreparable Breach"). Accordingly, in the event of a
threatened or ongoing Irreparable Breach, each party hereto shall be entitled to
seek, in any state or federal court in the State of New Jersey, equitable relief
of a kind appropriate in light of the nature of the ongoing threatened
Irreparable Breach, which relief may include, without limitation, specific
performance or injunctive relief; provided, however, that if the party bringing
such action is unsuccessful in obtaining the relief sought, the moving party
shall pay the non-moving party's reasonable costs, including attorney's fees,
incurred in connection with defending such action. Such remedies shall not be
the parties' exclusive remedies, but shall be in addition to all other remedies
provided in this Agreement.
19. SEVERABILITY. In the event that any provision of this Agreement
shall be held by a court of competent jurisdiction or by any governmental body
to be invalid or unenforceable, such provision shall be deemed severable and the
remaining parts and provisions of this Agreement shall remain in full force and
effect.
20. FORCE MAJEURE. Each of the parties shall be excused from the
performance of its obligations hereunder in the event such performance is
prevented by force majeure, and such excuse shall continue as long as the
condition constituting such force majeure continues. For the purpose of this
Agreement, force majeure is defined as contingencies beyond the reasonable
control of either party, including, without limitation, acts of God, judicial or
regulatory action, war, civil commotion, destruction of production facilities or
materials by fire, earthquake or storm and labor disturbances (whether or not
any such labor disturbance is within the power of the affected party to settle)
or unavailability of supply materials. The party affected by force majeure shall
provide the other party with full particulars thereof as soon as it becomes
aware of the same (including its best estimate of the likely extent and duration
of the interference with its activities), and will use its reasonable endeavors
to overcome the difficulties created thereby and to resume performance of its
obligations as soon as practicable.
21. INTEREST. Any overdue amounts payable by either party hereunder
shall bear interest compounded monthly at the prime lending rate for U.S.
Dollars published from time to time in The Wall Street Journal plus
*
per annum, or, if lower, the highest rate permissible by applicable law, from
the due date until the date of payment.
22. NO PARTNERSHIP OR AGENCY. This Agreement and the relations hereby
established by and between Biomatrix and Wyeth do not constitute a partnership,
joint venture, agency or contract of employment between them.
23. NOTICES. All communications in connection with this Agreement shall
be in writing and sent by postage prepaid first class mail, courier, or telefax,
and if relating to
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 28
-28-
default, late payment or termination, by certified mail, return receipt
requested, telefax or courier, addressed to each party at the address above, in
the case of Biomatrix, Attn: Chief Executive Officer, with a copy to: Justin P.
Morreale, Esq., Bingham, Dana & Gould LLP, 150 Federal Street, Boston,
Massachusetts 02110, U.S.A., and in the case of Wyeth, 555 East Lancaster
Avenue, St. Davids, Pennsylvania 19087, Attn: Senior Vice President, Global
Business Development, with a copy to American Home Products Corporation, 5
Giralda Farms, Madison, New Jersey 07990, U.S.A., Attn: Senior Vice President
and General Counsel or to such other address as the addressee shall last have
designated by notice to the communicating party. The date of giving any notice
shall be the date of its actual receipt.
24. EU REGULATIONS. It is the intention of the parties hereto that this
Agreement shall at all times qualify for the exemption from the provisions of
Article 85(1) of the Treaty of Rome dated 25 March, 1957, as amended, which
either (a) is available under EEC Regulation Number 1983/83, or (b) may
otherwise be available under any other regulations or successor regulation
thereto. In the event that any provision of this Agreement is deemed to violate
the conditions for qualifying for the exemption, set out in whichever of those
regulations may be in effect at the relevant time, or if any such regulation is
amended after the date of this Agreement so as to cause this Agreement to fail
to qualify for the exemption, the parties hereto agree that they will, as soon
as it is practicable to do so, enter into good faith negotiations to amend this
Agreement as necessary in order to re-qualify for the exemption or notify the
Agreement.
25. * Biomatrix agrees that it will * with any * prior to * without
the *
26. SURVIVAL. The provisions of Sections 3.2, 3.5, 3.6, 3.7, 7.1, 7.2,
8.2, 10.1, 10.2, 10.3, 10.4 and 15.1(d) of this Agreement shall survive the
termination or expiration of this Agreement (as the case may be) and shall
remain in full force and effect. The provisions of this Agreement that do not
survive termination or expiration hereof (as the case may be) shall,
nonetheless, be controlling on, and shall be used in construing and interpreting
the rights and obligations of the parties hereto with regard to, any dispute,
controversy or claim which may arise under, out of, or in connection with this
Agreement.
27. MISCELLANEOUS. This Agreement, the International License Agreement,
the Supply Agreement and the Trademark Agreement together set forth the entire
agreement between the parties with respect to the transactions and arrangements
contemplated hereby and supersede all prior oral or written arrangements between
the parties. This Agreement may be modified or amended only by a written
instrument executed and delivered by both parties. None of the provisions of
this Agreement shall be deemed to have been waived by any act or acquiescence on
the part of either party except by an instrument in writing signed and delivered
by the party executing the waiver. This Agreement may be executed in several
identical counterparts, each of which shall be an original, but all of which
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 29
-29-
constitute one instrument, and in making proof of this Agreement it shall not be
necessary to produce or account for more than one such counterpart. The English
language version of this Agreement shall govern and control any translations of
the Agreement into any other language. References herein to Sections and
Exhibits are to Sections of and Exhibits to this Agreement. The title of this
Agreement and the section headings contained herein are for convenience of
reference only and shall not define or limit the provisions hereof.
[signature page to follow]
<PAGE> 30
-30-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Fred Hassan
------------------------
Name: Fred Hassan
Title: Executive Vice President
BIOMATRIX, INC.
/s/ Endre A. Balazs
-----------------------
Endre A. Balazs
Chief Executive Officer
<PAGE> 31
-31-
EXHIBITS
Exhibit A - Initial Product Specifications
Exhibit B - Patents and Trademarks
Exhibit C - Minimum
*
Net Revenues
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 32
EXHIBIT A
Initial Product Specifications
EUROPEAN AGREEMENT PRODUCT SPECIFICATIONS
SPECIFICATION OF SYNVISC(R)
(HYLAN G-F 20)
Test Specifications
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 33
EXHIBIT B
Patents and Trademarks
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 34
II. SYNVISC(R)
Country Registration No. Term Expiration Date
------- ---------------- ---- ---------------
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 35
Country Registration No. Term Expiration Date
------- ---------------- ---- ---------------
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 36
EXHIBIT C
Minimum
*
Net Revenues
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 1
SUPPLY AGREEMENT
THIS AGREEMENT is made as of the 7th day of February 1997 by and
between BIOMATRIX, INC., a Delaware corporation, having its principal office at
65 Railroad Avenue, Ridgefield, New Jersey 07657, U.S.A. ("Biomatrix") and
American Home Products Corporation, a Delaware corporation having its principal
office at Five Giralda Farms, Madison, New Jersey 07940, U.S.A, acting on behalf
of itself and its unincorporated and wholly-owned Wyeth-Ayerst Laboratories
division ("Wyeth").
WHEREAS, Biomatrix and Wyeth have entered into a certain License
Agreement dated as of the 7th day of February 1997 with respect to Products (as
hereinafter defined) in the United States of America and its possessions (as
amended from time to time, the "US Agreement");
WHEREAS, Biomatrix and Wyeth have entered into a certain International
License Agreement dated as of the 7th day of February 1997 with respect to
Products in certain countries in Europe and the Middle East (as amended from
time to time, the "International Agreement" and, together with the US Agreement,
the "License Agreements"); and
WHEREAS, Wyeth desires to purchase from Biomatrix Wyeth's requirements
of the Products in the Territory (as defined below), and Biomatrix is willing to
supply such requirements upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants of the parties hereto, it is hereby agreed as follows:
1. DEFINITIONS. In this Agreement, the following words and expressions
shall have the following meanings:
1.1. "Affiliate" shall mean, with respect to any party, any Person
that, directly or indirectly, is controlled by, controls or is under common
control with such party, but only for so long as such relationship exists.
1.2. "Applicable Currency" shall mean, with respect to a country in the
Territory, the lawful currency of such country.
1.3. "Contract Quarter" shall mean for any country in the Territory the
three (3) month period commencing on the first day of the first fiscal quarter
beginning immediately after the Launch Date in such country, (unless the Launch
Date is the first day of a fiscal quarter, in which case the first Contract
Quarter
<PAGE> 2
-2-
shall commence on such day) and ending on the last day of the fiscal quarter and
each fiscal quarter thereafter throughout the term of this Agreement.
1.4. "Contract Year" shall mean, with respect to a country in the
Territory, the twelve (12) month period commencing on the first day of the first
fiscal quarter beginning immediately after the date of the first commercial sale
(the "Launch Date") of the Initial Product in such country (unless such Launch
Date is the first day of a fiscal quarter, in which case the first Contract Year
shall commence on such day) and each separate successive twelve (12) month
period thereafter.
1.5. "Effective Date" shall mean the date of this Agreement.
1.6. "Extended Product" shall mean any Extended Product (as defined in
the U.S. Agreement.
1.7. "Formula Price Percentage" shall mean that term as defined in
Section 4.1(c).
1.8. "Improvements" shall mean extensions of the label claims for the
Initial Product, including new dosage and presentation forms and packaging
improvements for the Initial Product, within the Field.
1.9. "Initial Product" shall mean hylan gel-fluid 20 (hylan G-F 20)
Synvisc currently approved as a device with a CE mark for the intra-articular
treatment by viscosupplementation of osteoarthritis of the knee, to be supplied
in pre-filled syringes packaged ready for use complying with applicable product
approvals as a device.
1.10. "Initial Product Specifications" shall mean the specifications
for the Initial Product set forth on Exhibit A in each of the International and
U.S. License Agreements.
1.11. "Initial Term" shall mean that term as defined in Section 2.1.
1.12. "Long Range Forecast" shall mean that term as defined in Section
5.1.
1.13. "Manufacturing Costs" shall mean the * in accordance with
generally accepted accounting principles and Biomatrix's standard * Such costs
shall include, but not be limited to, all * Products and Extended Products and
the appropriate allocation of all costs * of Products and Extended Products.
The costs associated with * by Biomatrix. Schedule 1.13 attached hereto sets
forth items not directly associated with, but related to, the production of
Products and Extended Products.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 3
-3-
*
1.14. "Minimum Price" shall mean that term as defined in Section
4.1(b).
1.15. "Net Revenues" shall mean for a specified period the total gross
invoice price received from the sale of all Units by Wyeth and its Affiliates in
the Territory during such period to non-Affiliated wholesalers, hospitals,
retail pharmacies, patients and other third party purchasers,
*
Such amounts shall be determined from the books and records of Wyeth and its
Affiliates maintained in accordance with generally accepted accounting
principles, consistently applied.
1.16. "Patents" shall mean Letters Patent or similar statutory rights
relating to any Product (including any continuation-in-part, continuation or
division thereof or substitute thereof), patent applications which are pending
as of the Effective Date, patent term extensions and Supplementary Protection
Certificates, in each case as set forth on Exhibit B hereto, together with any
supplementary or complementary protection certificates therefor if and when such
are granted.
1.17. "Person" or "person" shall mean an individual, a corporation, a
partnership, a trust, an unincorporated organization or a government or any
agency or political subdivision thereof.
1.18. "Per Unit Formula Price" shall mean that term as defined in
Section 4.1(c).
1.19. "Product(s)" shall mean the Initial Product, together with any
Improvements (as defined in Section 1.8) to the Initial Product.
1.20. "Region" shall mean any one of the following groups of countries
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 4
-4-
1.21. "Syringe" shall mean a pre-package 2.0 ml syringe of the Product.
1.22. "Supply Forecast" shall mean that term as defined in Section 5.2.
1.23. The "Supply Price" in effect at any time shall mean the supply
price per unit of a Product or Extended Products to be paid by Wyeth under this
Agreement for resale in the Territory, as determined at such time in accordance
with the provisions of Section 4.1 or, as the case may be, Section 4.2 hereof.
1.24. "Territory" shall mean, collectively, the Territory as defined in
the US License Agreement and the Territory as defined in the International
License Agreement.
1.25. "Trademarks" shall mean (i) the trademark Synvisc(R) and each
other mark, trademark or service mark described on Exhibit B hereto, and (ii)
any other marks, trademarks or service marks, as may be agreed upon in writing
from time to time by the parties hereto for use by Wyeth in connection with the
promotion, marketing and sale of the Products and Extended Products under this
Agreement.
1.26. "Treatment Pack" shall mean a quantity of the Initial Product
sufficient for one treatment course, consisting of three Syringes.
1.27. "Unit" shall mean, with respect to the Initial Product, a 2.0 ml
syringe of the Initial Product.
1.28. "U.S. Dollars" and "US$" shall mean the lawful currency of the
United States of America.
2. TERM AND TERMINATION.
2.1. Term. Unless this Agreement is sooner terminated in accordance
with its provisions, the initial term of this Agreement shall, on a
country-by-country basis commence on the Effective Date and shall end, with
respect to Products or Extended Products, as applicable, on the later to occur
of (i) the fifteenth (15th) anniversary of the Launch Date (as defined in the
applicable License Agreement) in such country or (ii) the date of the expiration
of the last to expire of the Patents in each country (the "Initial Term").
Thereafter, this Agreement shall continue until terminated by either party in
accordance with its provisions.
2.2. Termination.
(a) Breach. This Agreement may be terminated by either party if the
other party shall commit a material breach of any provision hereof and shall not
cure such breach within
*
after a written notice by the other party to
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 5
-5-
cure the breach; provided, that in the case of a payment breach such cure period
shall be equal to
*
after written notice.
*
(b) Insolvency. This Agreement may be immediately terminated, whether
during the Initial Term or any Additional Period (as defined below), by either
party, upon giving written notice to the other party, in the event that the
other party shall become insolvent or be declared bankrupt by a court of
competent jurisdiction or shall be the subject of any reorganization (other than
a corporate reorganization effected in the ordinary course of business and not
arising out of any insolvency) or winding up, receivership or dissolution,
bankruptcy or liquidation proceeding, or any proceeding or action similar to one
or more of the above, in which case termination shall be effective upon such
written notice. The failure of either party to give notice of termination upon
obtaining knowledge of any such event shall not be interpreted as a waiver of
such party's rights under this Section 2.2(b), and such party reserves the right
to exercise any such rights at any time after the occurrence of any such event.
3. SUPPLY OF PRODUCT.
3.1. Initial Term. (a) During the Initial Term, on a country-by-country
basis, Biomatrix agrees to sell, or to cause an Affiliate to sell, Product to
Wyeth, on the terms and subject to the conditions set forth herein, for resale
by Wyeth within a given country in the Territory, and Wyeth shall obtain the
Product for resale in the Territory only from Biomatrix or such Affiliate of
Biomatrix.
(b) The parties agree that Extended Products shall be encompassed
within the terms of this Agreement as it relates to Products. The parties agree
that there shall be
*
relating to any such Extended Products and that the Minimum Prices and Transfer
Prices applicable to any such Extended Products would be substantially
equivalent to
*
In addition,
*
The parties agree to negotiate in good faith with respect to the establishment
of the Initial Term and Additional Periods, Minimum Purchases, and any other
necessary terms relating to the manufacture and sale of Extended Products which
are not contemplated in this Agreement,
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 6
-6-
(c) If the supply of Products becomes non-exclusive with respect to a
country pursuant to Section 2.3(a) of the US Agreement or International
Agreement then the Supply Pricing for Products for such country shall be
determined in accordance with Section 4.2(b).
3.2. Additional Periods.
(a) Within three years prior to the end of each Initial Term and each
Additional Period (as defined below), the parties shall mutually determine in
writing whether the supply of Product during any three year period following the
Initial Term (each an "Additional Period") shall be on an exclusive basis (i.e.
a decision with respect to year sixteen must be made prior to the commencement
of year thirteen and decision with respect to year nineteen, and must be made
prior to the commencement of year sixteen.)
(b) If any Additional Period supply arrangement is determined by the
parties to remain on an exclusive basis in a country in the Territory, then
Biomatrix shall supply Wyeth exclusively and Wyeth shall purchase all of its
requirements for the Product for such country from Biomatrix.
(c) If any Additional Period supply arrangement is determined by either
party to be on a non-exclusive basis in a country in the Territory, then
Biomatrix may supply other parties with the Product for sale in the Territory
(excluding the right to use the Trademark, provided that Wyeth still has the
exclusive right to use the Trademark in any applicable country under either of
the License Agreements) and Wyeth may purchase all or part of its requirements
for the Product from third parties.
3.3 Production Capacity. (a) Biomatrix and its Affiliates shall use
commercially reasonable efforts to ensure that they shall have the manufacturing
capacity to produce quantities of Products in amounts equal to (i) during the
first three years after the Effective Date one hundred fifty percent (150%) of
the amounts in the Long Range Forecast set forth on Exhibit C hereto and (ii)
during each year thereafter one hundred twenty-five percent (125%) of the
amounts in the then current Long Range Forecast.
(b) Biomatrix shall prepare and deliver to Wyeth a Management Plan
within thirty (30) days after the Effective Date. The Management Plan shall
describe in reasonable detail the activities that Biomatrix proposes to
undertake in establishing a second facility in the United States to manufacture
the Initial Product, and shall include information regarding the expected timing
of completion and capacity of the facility.
Thereafter, Biomatrix shall prepare and deliver to Wyeth not less than quarterly
commencing with the quarter ending March 31, 1997,
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 7
-7-
(c) Biomatrix represents and warrants that, as of the Effective Date,
(i) it has sufficient capacity to manufacture Wyeth's launch stocks of the
Initial Product for delivery for sales under the International Agreement on or
before June 30, 1997 as set forth on Exhibit C; (ii) it has sufficient capacity
to manufacture 200,000 Units of the Initial Product for delivery for sales under
the U.S. Agreement on or before September 1, 1997; and (iii) as of March 31,
1997 it will have sufficient manufacturing capacity to produce 500,000 Units of
the Initial Product annually.
4. PRICE AND PAYMENT.
4.1 Supply Price During Initial Term.
(a) Transfer Price. On a country-by-country basis, the "Transfer Price"
per Syringe for sales of the Initial Product
*
(b) Minimum Price. The "Minimum Price" for the
*
(c) Formula Price Percentage. The Formula Price Percentage in the
Initial Term and thereafter will be as follows:
(i) Initial Term Formula Price Percentage. The "Formula Price
Percentage" applicable during the Initial Term shall be determined according to
the following formula for sales of the Products (and Extended Products):
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 8
-8-
*
(ii) Post Initial Term Formula Price Percentage. The "Formula Price
Percentage" applicable during any Contract Year after the Initial Term shall be
determined according to the following Formula for sales of the Products (and
Extended Products):
*
(iii) The "Per Unit Formula Price" for any period shall equal
*
- --------------------
*/ As used in this table "Annual Net Revenues" shall be based on U.S.
dollar equivalents using the exchange rates determined in accordance with -
Section 15.
**/ Rates set forth in this table are marginal rates.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 9
-9-
(d) Annualized Formula Price Percentage Calculation. Within
*
after the close of each Contract Quarter of the Initial Term after the first
Contract Year, the
*
for such Contract Quarter shall be determined. The annualized Formula Price
Percentage applicable to any Contract Quarter of the Initial Term after the
first Contract Year shall be determined by
*
(e) Reconciliation of Transfer Price and Per Unit Formula Price.
(i) Quarterly Reconciliation. Within
*
after the close of each Contract Quarter, the parties
shall calculate the extent to which the
*
for such Contract Quarter exceeds or is below the
Transfer Price paid by Wyeth for the Units used in
calculating
*
with respect to such Contract Quarter. A reconciling
adjustment which equals
*
shall be made and paid by the appropriate party within
*
thereafter.
(ii) Annual Reconciliation. Within
*
after the close of each Contract Year, the parties
shall calculate the extent to which the
*
for such Contract Year exceeds or is below the
Transfer Price paid by Wyeth for the Units used in
calculating
*
with respect to such Contract Year. A reconciling
adjustment which equals
*
shall be made and paid by the appropriate party within
*
thereafter.
(f) Supply Price. On a Contract Year basis, the Supply Price per
Syringe due to Biomatrix from Wyeth during the Initial Term shall be
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 10
-10-
4.2 Supply Price During the Additional Period.
(a) If Supply is Exclusive. During any Contract Year following the
Initial Term in which the supply of the Product is required to be exclusive to
Wyeth, the Supply Price shall be
*
(b) If Supply is Non-Exclusive. (i) If Biomatrix determines
*
to convert the supply of Product to a non-exclusive arrangement in a country,
then the parties shall mutually agree in writing upon a price for Product for
such country which shall not be greater than the
*
(ii)
*
prior to the commencement of any such Contract Year setting forth
*
Wyeth shall be obligated to
*
of Products from Biomatrix. At any time during a non-exclusive supply period
that the Percentage Amount is
*
4.3 Currency of Payments. All payments by Wyeth to Biomatrix for the
purchase of Products or Extended Products hereunder shall be made in U.S.
Dollars at the exchange rate set forth in Section 15.2 hereof within
*
of the invoice date relating thereto.
4.4 Reporting by Wyeth.
(a) Monthly reports. Within
*
following the end of each calendar month in each Agreement Year, Wyeth shall
submit to Biomatrix written reports detailing (i) the Units and value of Wyeth's
and its Affiliates' Unit sales and (ii) Net Revenues of the Products and
Extended Products during the immediately preceding calendar month in a manner
consistent with Wyeth's internal sales reporting.
(b) Yearly reports. Within
*
following the end of each Contract Year, Wyeth shall submit to Biomatrix written
reports detailing Wyeth's and its Affiliates' sales of the Products and Extended
Products during the immediately preceding Contract Year, which reports shall set
forth the Net Revenues from Products and Extended Products in each country in
the Territory from sales during the applicable year to third party purchasers
who are not
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 11
-11-
Affiliates of Wyeth, and the aggregate number of Units sold in the Territory
during the applicable Contract Year.
5. SUPPLY FORECASTS; MINIMUM PURCHASES; RECORDS AND AUDITS.
5.1 Forecasts. Exhibit C attached hereto sets forth
*
sales forecasts for sales of Units of Products in each country in the Territory
for each of the
*
Contract Years. Within
*
after the expiration of each of the
*
during any Contract Year, Wyeth shall provide to Biomatrix a forecast of Units
of Products and Extended Products in each country in the Territory for the
*
period (including a year-by-year breakdown) following the delivery of such
report. Such forecasts shall be prepared by Wyeth in good faith, using
reasonable assumptions applicable to each country in the Territory, regarding
the patient population, market penetration, competition, product label and the
price to third parties resulting from Reimbursement Approvals (as defined in the
License Agreements) in the countries in the Territory. Each such sales forecast
described above is referred to herein as a "Long Range Forecast." Such Sales
Forecast may be
*
5.2 Supply Forecasts. Within
*
after the expiration of each Contract Quarter Wyeth shall provide to Biomatrix
an updated
*
supply forecast (the "Supply Forecast") and the
*
shall be consistent with the firm purchase orders previously delivered pursuant
to Section 7, provided that commencing in
*
after the U.S. Launch Date Biomatrix's obligation to supply Products under the
Supply Forecasts shall not increase
*
The Supply Forecast shall supersede the Long Range Forecast for any applicable
period.
5.3 Minimum Purchases. Wyeth hereby agrees that
*
it shall purchase
*
no less than
*
for Syringes in each Region in the Territory as set forth on Exhibit C as of the
Effective Date.
5.4 Failure to Reach Minimum Purchases. If Wyeth fails to reach any of
the aggregate minimum purchase requirements in a Region in the Territory in any
Contract Year (other than as a result of a failure by Biomatrix to supply the
Product in accordance with the terms hereof), then, notwithstanding such failure
and subject to Wyeth not being in breach of any other provisions of the
applicable agreements, Wyeth shall have the right, in its sole discretion, to
maintain this Agreement, the License Agreements, and the Trademark License
Agreement by paying to Biomatrix within thirty (30) days after the end of such
Contract Year $12 U.S. Dollars for each Unit of Product by which Wyeth failed to
meet the applicable minimum purchase requirement but Biomatrix shall not be
required to deliver any Product in exchange for any such payment. If Wyeth fails
to meet a minimum purchase requirement and, in its sole discretion, chooses not
to make the payment to Biomatrix contemplated by this Section 5.4, then
Biomatrix may at its option upon thirty (30) days prior written notice to Wyeth,
terminate this Agreement and the applicable License Agreement as it applies to
such Region.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 12
-12-
*
5.5 Records and Audits. Wyeth shall maintain books of account with
respect to its sales of the Products and Extended Products in each country in
the Territory. Biomatrix shall have the right, not more than once during each
calendar year, to have an independent accountant selected and retained by
Biomatrix to inspect and examine such books of Wyeth during regular business
hours for the purpose of verifying the statements of the aggregate Net Revenues
resulting from sales of Products and Extended Products and determining the
correctness of the Formula Price Percentages and Per Unit Formula Prices. The
cost of each such audit shall be borne by Biomatrix unless a material error is
discovered in the course of such audit, in which case the cost shall be borne by
Wyeth. As used herein, a "material" error is one which results in an
underpayment to Biomatrix greater than five percent (5%) actually due. Any
additional payments required as a result of such inspection and examination
shall be immediately paid to Biomatrix and shall bear interest from the date
such amount would otherwise have been paid until the date of actual payment at
the rate per annum set forth in Section 23 hereof.
6. SHIPMENT AND DELIVERY. Biomatrix shall arrange for shipment and
invoicing to Wyeth of Product and Extended Products ordered by Wyeth via common
carrier,
*
Wyeth shall pay all customs duties, sales taxes and other governmental charges
relating to the importation and sale of Product and Extended Products, and shall
have all responsibility for storing and clearing Product and Extended Products
through customs and for all other importation requirements. No VAT or customs
duty number shall be assigned to any Product or Extended Products without the
prior written consent of Biomatrix.
7. FIRM ORDERS. Wyeth shall submit a firm purchase order setting forth
the quantities, delivery date and shipping instructions with respect to each
shipment of Product or Extended Product, such purchase orders to be received by
Biomatrix at least
*
prior to the requested delivery date. Such firm purchase orders shall be for
quantities of Product or Extended Product equal to
*
Wyeth shall not submit
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 13
-13-
any purchase order for fewer than
*
Treatment Packs of Products or Extended Products.
8. RISK OF LOSS. Biomatrix shall bear all risk of loss, or damage to,
all units of Products and Extended Products until such Products and Extended
Products have been delivered to the port of entry within the Territory. Wyeth
shall bear all risk of loss of, or damage to, all units of Products after
delivery by Biomatrix to the port of entry.
9. ACCEPTANCE. Biomatrix shall complete a certificate of analysis for
each product batch contained in a shipment to Wyeth in accordance with the test
requirements set forth in the applicable Product Specifications. Biomatrix shall
include each certificate of analysis with the respective shipment to Wyeth.
Should Wyeth notify Biomatrix within
*
of the receipt of any shipment of Product or Extended Product that such Product
or Extended Product does not conform to the applicable Product Specifications
therefor, Biomatrix and Wyeth agree to consult with each other in order to
resolve the discrepancy between each other's determinations regarding any
possible defect. If such consultation does not resolve the discrepancy, the
parties agree to nominate a reputable independent laboratory, acceptable to both
parties, that shall carry out tests on representative samples taken from such
shipment, and the results of such tests shall be binding on the parties, and the
party whose determination was in error as determined by such laboratory shall
pay all costs associated with such testing. Biomatrix shall at its expense
replace any such shipment to the extent that it does not conform to applicable
Product Specifications. All defective Units shall be returned to Biomatrix at
the address set forth above, accompanied or preceded by a reasonably detailed
statement of the claimed defect or non-conformity and proof of date of purchase,
and packed and shipped according to instructions provided by Biomatrix. The
shipping costs of any such returned Units shall be borne by Biomatrix, unless
such Units are determined not to be defective under the terms of this Agreement,
in which case such shipping costs shall be borne by Wyeth.
10. PURCHASE ORDERS. The provisions of this Agreement shall prevail
over any inconsistent statement or provisions contained in any document related
to this Agreement passing between the parties hereto including, but not limited
to, any purchase order, acknowledgment, confirmation or notice.
11. LIMITED WARRANTY; LIMITATION ON LIABILITY; INDEMNIFICATION.
11.1 Limited Warranty. Biomatrix represents and warrants that each
Product and Extended Product supplied to Wyeth hereunder shall:
(i) conform to the applicable Product Specifications; and
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 14
-14-
(ii) be manufactured, labeled, packaged and tested (while in the
possession or control of Biomatrix) in accordance with applicable laws
and regulations in the respective countries in Territory relating to
the manufacture, labeling, packaging and testing of the Product or
Extended Product.
THE FOREGOING WARRANTY IS THE SOLE AND EXCLUSIVE WARRANTY GIVEN BY
BIOMATRIX WITH RESPECT TO PRODUCTS AND EXTENDED PRODUCTS, AND BIOMATRIX GIVES
AND MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
OTHER THAN THE FOREGOING. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, NO
IMPLIED WARRANTY OF MERCHANTABILITY, NO IMPLIED WARRANTY OF FITNESS FOR ANY
PARTICULAR PURPOSE, AND NO IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF
DEALING OR COURSE OF PERFORMANCE IS GIVEN OR MADE BY BIOMATRIX OR SHALL ARISE BY
OR IN CONNECTION WITH ANY SALE OR PROVISION OF PRODUCTS OR EXTENDED PRODUCTS BY
BIOMATRIX, OR WYETH'S USE OR SALE OF PRODUCT, OR BIOMATRIX'S AND/OR WYETH'S
CONDUCT IN RELATION THERETO OR TO EACH OTHER. NO REPRESENTATIVE OF BIOMATRIX IS
AUTHORIZED TO GIVE OR MAKE ANY OTHER REPRESENTATION OR WARRANTY OR TO MODIFY THE
FOREGOING WARRANTY IN ANY WAY.
The limited warranty set forth in this Section 11 does not apply to any
non-conformity of Products or Extended Products resulting from (a) repair,
alteration, misuse, negligence, abuse, accident, mishandling or storage in an
improper environment by any party other than Biomatrix, or (b) use, handling,
storage or maintenance other than in accordance with Product Specifications.
Biomatrix's sole obligation with respect to Units of Products or
Extended Products which do not meet the warranty contained herein is limited to
replacement of such Units of the Products or Extended Products, provided that
such Units of Products or Extended Products are returned to Biomatrix in the
manner set forth in Section 9, and only if, as determined by the procedures set
forth in Section 9, such Units of Products or Extended Products are determined
to have been defective under the terms of this Agreement.
11.2. Limitation on Liability. BIOMATRIX'S LIABILITY, AND THE EXCLUSIVE
REMEDY, IN CONNECTION WITH THE SALE OR USE OF PRODUCTS OR EXTENDED PRODUCTS
(WHETHER BASED ON CONTRACT, NEGLIGENCE, BREACH OF WARRANTY, STRICT LIABILITY OR
ANY OTHER LEGAL THEORY), SHALL BE STRICTLY LIMITED TO BIOMATRIX'S OBLIGATIONS AS
SPECIFICALLY AND EXPRESSLY PROVIDED IN THIS SECTION 11 AND THE LIMITED
INDEMNITIES SET
<PAGE> 15
-15-
FORTH IN SECTION 11.3. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 11 AND IN
SUCH LIMITED INDEMNITIES, BIOMATRIX SHALL HAVE NO LIABILITY, OBLIGATION OR
RESPONSIBILITY OF ANY KIND, IN ANY WAY OR TO ANY EXTENT, FOR ANY DAMAGES,
LOSSES, COSTS, EXPENSES OR LIABILITIES FOR ANY REPRESENTATION OR WARRANTY OF ANY
KIND WITH RESPECT TO PRODUCTS OR EXTENDED PRODUCTS OR THE PERFORMANCE THEREOF,
OR ARISING IN ANY WAY IN CONNECTION WITH THE PURCHASE OR USE OR INABILITY TO USE
PRODUCTS OR EXTENDED PRODUCTS EVEN IF BIOMATRIX HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. IN NO EVENT WHATSOEVER SHALL BIOMATRIX HAVE ANY
LIABILITY, OBLIGATION OR RESPONSIBILITY FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES ARISING IN ANY WAY IN
CONNECTION WITH PRODUCTS OR EXTENDED PRODUCTS OR THEIR SALE OR USE.
11.3 Indemnification.
(a) Biomatrix shall indemnify and hold Wyeth and its officers,
directors, shareholders, agents and employees harmless against any and all
liability, damage, loss, cost or expense resulting from any third party claim
made or suit brought against Wyeth or such persons to the extent such claim
*
Upon the filing of any such claim or suit, Wyeth shall immediately notify
Biomatrix thereof, and shall permit Biomatrix at its cost to handle and control
such claim or suit. Wyeth shall have the right to participate in the defense of
such claim or suit at its own expense.
(b) Wyeth shall indemnify and hold Biomatrix and its officers,
directors, shareholders, agents and employees harmless against any and all
liability, damage, loss, cost or expense resulting from any third party claim
made or suit brought against Biomatrix or such persons to the extent such claim
*
Upon the filing of any such claim or suit, Biomatrix shall immediately notify
Wyeth thereof and shall permit Wyeth at its cost to handle and control such
claim or suit. Biomatrix shall have the right to participate in the defense of
such claim or suit at its own expense.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 16
-16-
12. *
12.1 * If either party in good faith determines that a * such party
shall immediately notify the other party in writing and shall advise such other
party of the * The parties shall consult with each other as to any action to be
taken *
12.2 Corrections. Except as otherwise provided in Section 12.3, * of a
Product or Extended Product, * relating to its manufacturing, packaging,
testing, labeling, storing or handling of the Product or Extended Product for
which *
12.3 * by Wyeth as a result of * Wyeth to * Biomatrix and its
Affiliates as a *
13. LICENSING AND COMPLIANCE; NOTICES; INSPECTION. (a) Wyeth shall, at
its expense, obtain any and all import licenses that may be necessary to permit
the sale by Biomatrix and the purchase by Wyeth of Products or Extended Products
hereunder, comply with all registration requirements in the Territory and comply
with any and all governmental laws, regulations, and orders that may be
applicable to Wyeth by reason of its execution of this Agreement including all
laws, regulations or orders that govern or affect the ordering, shipment,
import, sale (including government procurement), delivery, or redelivery of
Products and Extended Products in the Territory. Wyeth shall furnish Biomatrix
with such documentation as Biomatrix may request to confirm Wyeth's compliance
with this Section 13 and agrees that it shall not engage in any course of
conduct that, in Biomatrix's reasonable belief, would cause Biomatrix to be in
violation of the laws of any jurisdiction.
(b) The manufacturing standards and ingredients for Products will
conform to U.S. Pharmacopoeia Standards, where applicable. All other methods
shall be suitably validated according to acceptance by the FDA, for the approved
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 17
-17-
PMA for Synvisc, or where applicable, according to the standards accepted by the
notified body for the CE mark in the European Economic Area.
(c) Wyeth shall have the right, on reasonable prior notice to
Biomatrix, to inspect Biomatrix's manufacturing, packaging and storage
facilities used in the manufacture, packaging, storage, testing, shipping and
receiving of Products and Extended Products and their components and any Person
conducting any such inspection shall be bound by the confidentiality provisions
of Section 7 of the U.S. Agreement and Section 8 of the International Agreement.
14. LOCAL LAWS. Each party shall notify the other party of the
existence and content of any provision of law in the Territory or any other
applicable law that conflicts with any provision of this Agreement at the time
of its execution or thereafter.
15. PAYMENTS; EXCHANGE RATE.
15.1 Payments. All payments hereunder shall be made in U.S. Dollars and
at the exchange rates set forth in Section 15.2 and paid within
*
unless otherwise agreed by the parties. Payments to Biomatrix shall be wired to
an account in a bank designated by Biomatrix and the costs of any such
remittance shall be borne by Wyeth.
15.2 Exchange Rate. All amounts denominated in an Applicable Currency
shall be converted to U.S. Dollars using the consistently applied method of
conversion utilized by Wyeth at the corporate level for financial reporting
purposes.
16. WITHHOLDING. All payments to be made by Wyeth under this Agreement
shall be made in full, free and clear of and without any deduction of or
withholding for or on account of any taxes levied in any country of the
Territory or elsewhere; provided that if Wyeth shall be required by law to make
any deduction or withholding from any payment to Biomatrix then:
(i) Wyeth shall ensure that such deduction or withholding does not
exceed the minimum legal liability therefor;
(ii) at least thirty (30) days prior to the first deduction or
withholding, Wyeth shall notify Biomatrix thereof, and the parties shall
negotiate in good faith adjustments to the payments hereunder in order to
minimize or eliminate such deduction or withholding, provided that the total
payments by Wyeth shall not increase; and
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 18
-18-
(iii) Wyeth shall forward to Biomatrix such documentary evidence as may
be available in respect of each deduction, withholding or payment together with
each payment or promptly thereafter.
17. QUESTIONABLE PAYMENTS. Wyeth shall not, directly or indirectly, in
the name of, on behalf of, or for the benefit of Biomatrix offer, promise or
authorize to pay, or pay any compensation or give anything of value to, any
official, agent or employee of any government or governmental agency, or to any
political party or officer, employee or agent thereof in connection with the
promotion or sale of Products or Extended Products.
18. FURTHER ASSURANCES. The parties hereto agree to execute such
further or other documents and assurances as are necessary from time to time in
order to give effect to the provisions of this Agreement.
19. ASSIGNMENT. The rights and obligations of the parties hereto shall
inure to the benefit of and shall be binding upon the authorized successors and
permitted assigns of each party. Neither party may, without the prior written
consent of the other party, take any of the following actions (collectively
referred to herein as an "Assignment"): (i) assign or transfer its rights or
obligations under this Agreement, (ii) license or sublicense any of its rights
or obligations under this Agreement, or (iii) designate another person to
perform all or part of its obligations under this Agreement or have all or part
of its rights and benefits under this Agreement; provided, however, that a party
may make Assignments to Affiliates of such party or to a successor, by merger,
and provided, further that in the case of an Assignment to an Affiliate the
assigning party shall promptly notify the other party in writing of such
Assignment and shall remain liable (both directly and as guarantor) with respect
to all obligations so assigned. In the event of any permitted Assignment or in
the event that an Affiliate of either party shall exercise rights and/or perform
obligations hereunder pursuant to the terms of this Agreement, the assignee or
Affiliate, as the case may be, shall specifically assume and be bound by the
provisions of the Agreement by executing and agreeing to an assumption agreement
satisfactory to the other party hereto.
20. GOVERNING LAW; INJUNCTIVE RELIEF.
20.1 Governing Law and Dispute Resolution. This Agreement and the
respective rights and obligations of the parties shall be governed by and
construed in accordance with the internal and substantive laws of the State of
New Jersey, United States of America (without regard to principles of conflicts
of laws). The parties hereby agree that the United Nations Convention on
Contracts for the International Sale of Goods shall not apply to this Agreement
or any other document contemplated hereby. In the event of any dispute touching
or concerning this Agreement, the parties hereby agree to submit such dispute to
their respective chief
<PAGE> 19
-19-
executive officers or their designees by notice delivered in accordance with the
provisions of Section 25 hereof. Each of the parties agrees that any suit
relating to this Agreement may be brought in the courts of the State of New
Jersey or any federal court and service of process in any such suit being made
by mail at the address specified in Section 25. Each party hereby waives any
objection that it may now or hereafter have to the venue of any such suit or any
such court or that such suit is brought in an inconvenient court.
20.2 Injunctive Relief. Each of the parties hereto acknowledges and
agrees that damages will not be an adequate remedy for any material breach or
violation of this Agreement if such material breach or violation would cause
immediate and irreparable harm (an "Irreparable Breach"). Accordingly, in the
event of a threatened or ongoing Irreparable Breach, each party hereto shall be
entitled to seek, in any state or federal court in the State of New Jersey,
equitable relief of a kind appropriate in light of the nature of the ongoing
threatened Irreparable Breach, which relief may include, without limitation,
specific performance or injunctive relief; provided, however, that if the party
bringing such action is unsuccessful in obtaining the relief sought, the moving
party shall pay the non-moving party's reasonable costs, including attorney's
fees, incurred in connection with defending such action. Such remedies shall not
be the parties' exclusive remedies, but shall be in addition to all other
remedies provided in this Agreement.
21. SEVERABILITY. In the event that any provision of this Agreement
shall be held by a court of competent jurisdiction or by any governmental body
to be invalid or unenforceable, such provision shall be deemed severable and the
remaining parts and provisions of this Agreement shall remain in full force and
effect.
22. FORCE MAJEURE. Each of the parties shall be excused from the
performance of its obligations hereunder in the event such performance is
prevented by force majeure, and such excuse shall continue as long as the
condition constituting such force majeure continues. For the purpose of this
Agreement, force majeure is defined as contingencies beyond the reasonable
control of either party, including, without limitation, acts of God, judicial or
regulatory action, war, civil commotion, destruction of production facilities or
materials by fire, earthquake or storm and labor disturbances (whether or not
any such labor disturbance is within the power of the affected party to settle).
The party affected by force majeure shall provide the other party with full
particulars thereof as soon as it becomes aware of the same (including its best
estimate of the likely extent and duration of the interference with its
activities), and will use its best endeavors to overcome the difficulties
created thereby and to resume performance of its obligations as soon as
practicable.
23. INTEREST. Any overdue amounts payable by either party hereunder
shall bear interest compounded monthly at the prime lending rate for U.S.
Dollars
<PAGE> 20
-20-
published from time to time in The Wall Street Journal plus
*
per annum, or, if lower, the highest rate permissible by applicable law, from
the due date until the date of payment.
24. NO PARTNERSHIP OR AGENCY. This Agreement and the relations hereby
established by and between Biomatrix and Wyeth do not constitute a partnership,
joint venture, agency or contract of employment between them.
25. NOTICES. All communications in connection with this Agreement shall
be in writing and sent by postage prepaid first class mail, courier, or telefax,
and if relating to default, late payment or termination, by certified mail,
return receipt requested, telefax or courier, addressed to each party at the
address above, in the case of Biomatrix, Attn: Chief Executive Officer, with a
copy to: Justin P. Morreale, Esq., Bingham, Dana & Gould LLP, 150 Federal
Street, Boston, Massachusetts 02110, U.S.A., and in the case of Wyeth, 555 East
Lancaster Avenue, St. Davids, Pennsylvania 19087, Attn: Senior Vice President,
Global Business Development, with a copy to American Home Products Corporation,
Five Giralda Farms, Madison, New Jersey 07990, Attn: Senior Vice President and
General Counsel or to such other address as the addressee shall last have
designated by notice to the communicating party. The date of giving any notice
shall be the date of its actual receipt.
26. EU REGULATIONS. It is the intention of the parties hereto that this
Agreement shall at all times qualify for the exemption from the provisions of
Article 85(1) of the Treaty of Rome dated 25 March 1957, as amended, which
either (a) is available under EEC Regulation Number 1983/83, or (b) may
otherwise be available under any other regulations or successor regulation
thereto. In the event that any provision of this Agreement is deemed to violate
the conditions for qualifying for the exemption, set out in whichever of those
regulations may be in effect at the relevant time, or if any such regulation is
amended after the date of this Agreement so as to cause this Agreement to fail
to qualify for the exemption, the parties hereto agree that they will, as soon
as it is practicable to do so, enter into good faith negotiations to amend this
Agreement as necessary in order to re-qualify for the exemption or notify the
Agreement.
27. SURVIVAL. The provisions of Sections 11 and 12 of this Agreement
shall survive the termination or expiration of this Agreement (as the case may
be) and shall remain in full force and effect. The provisions of this Agreement
that do not survive termination or expiration hereof (as the case may be) shall,
nonetheless, be controlling on, and shall be used in construing and interpreting
the rights and obligations of the parties hereto with regard to, any dispute,
controversy or claim which may arise under, out of, or in connection with this
Agreement.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 21
-21-
28. MISCELLANEOUS. This Agreement, the Trademark License Agreement and
the License Agreements set forth the entire agreement between the parties with
respect to the transactions and arrangements contemplated hereby and thereby and
supersede all prior oral or written arrangements between the parties. This
Agreement may be modified or amended only by a written instrument executed and
delivered by both parties. None of the provisions of this Agreement shall be
deemed to have been waived by any act or acquiescence on the part of either
party except by an instrument in writing signed and delivered by the party
executing the waiver. This Agreement may be executed in several identical
counterparts, each of which shall be an original, but all of which constitute
one instrument, and in making proof of this Agreement it shall not be necessary
to produce or account for more than one such counterpart. The English language
version of this Agreement shall govern and control any translations of this
Agreement into any other language. References herein to Sections and Exhibits
are to Sections of and Exhibits to this Agreement. The title of this Agreement
and the section headings contained herein are for convenience of reference only
and shall not define or limit the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
AMERICAN HOME PRODUCTS BIOMATRIX, INC.
CORPORATION
By: /s/ Fred Hassan By: /s/ Endre A. Balazs
---------------------------- -----------------------------
Name: Fred Hassan Name: Endre A. Balazs
Title: Executive Vice President Title: Chief Executive Officer
<PAGE> 22
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EXHIBITS
Exhibit A - Initial Product Specifications
Exhibit B - Patents and Trademarks
Exhibit C - Long Range Forecast
SCHEDULES
1.13 - Manufacturing Costs
<PAGE> 23
EXHIBIT A
Initial Product Specifications
U.S. AGREEMENT PRODUCT SPECIFICATIONS
SPECIFICATION OF SYNVISC(R)
(HYLAN G-F 20)
Test Specifications
- ---- --------------
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 24
EXHIBIT B
Patents and Trademarks
I. SYNVISC RELATED UNITED STATES PATENTS
*
II. SYNVISC(R)
Country Registration No. Term Expiration Date
------- ---------------- ---- ---------------
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 25
Exhibit B Patents and Trademarks
I. SYNVISC RELATED GERMAN, SPANISH AND AUSTRIAN PATENTS(1)/
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 26
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II. SYNVISC(R)
Country Registration No. Term Expiration Date
------- ---------------- ---- ---------------
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 27
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Country Registration No. Term Expiration Date
------- ---------------- ---- ---------------
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 28
EXHIBIT C
UNIT (SINGLE SYRINGE) FORECAST
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 29
SCHEDULE 1.13
*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 30
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*
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 1
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT (this "Agreement") is made as of this
7th day of February, 1997 by and between Biomatrix, Inc., a Delaware corporation
having its principal place of business at 65 Railroad Avenue, Ridgefield, New
Jersey, U.S.A. ("Biomatrix"), and American Home Products Corporation, a Delaware
corporation having its principal place of business at Five Giralda Farms,
Madison, New Jersey 07940, U.S.A., acting through its unincorporated
Wyeth-Ayerst Laboratories division (such entities are together defined herein as
"Wyeth").
WHEREAS, Biomatrix and Wyeth are parties to that certain International
License Agreement (the "International License Agreement") and United States
License Agreement (the "U.S. License Agreement"), each dated as of February 7,
1997 (together, the "License Agreements"), pursuant to which (i) Biomatrix
agreed to sell and license to Wyeth, and Wyeth agreed to purchase and license
from Biomatrix, Products (as defined in the License Agreements) and Extended
Products and (ii) Biomatrix granted to Wyeth the right and license to use
certain trademarks owned by Biomatrix in any promotional materials used by Wyeth
to market the Products and Extended Products, all on the terms and conditions
set forth in the License Agreements;
WHEREAS, Biomatrix is the owner of rights in, and the goodwill
associated with, the Trademark (as defined below); and
WHEREAS, Biomatrix and Wyeth desire to enter into this Agreement for
purposes of licensing Wyeth to use the Trademark in the Territory (as defined in
each of the License Agreements, respectively).
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS; RULES OF INTERPRETATION
1.1 Definitions. Unless otherwise specifically provided
herein, all defined terms herein shall have the meanings ascribed them in the
License Agreements in effect on the effective date of this Agreement. For
purposes of this Agreement, the term "Trademark" shall mean (i) the trademark
"Synvisc(R)" and each other mark, trademark or service mark described on Exhibit
A hereto, and (ii) any other marks, trademarks or service marks as may be agreed
upon in writing from time to time by the parties hereto for use by Wyeth in
connection with the promotion, marketing and sale of Products and Extended
Products.
<PAGE> 2
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1.2 Rules of Interpretation.
(a) All definitions (whether set forth herein or by reference)
shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. All references herein
to Sections shall be deemed references to Sections of this Agreement unless
the context otherwise requires.
(b) In the event that any of the terms or provisions of this
Agreement shall be in conflict with or be inconsistent with any of the
terms or provisions of the License Agreements, the terms and provisions of
this Agreement shall govern.
2. GRANT OF LICENSE; ROYALTY.
2.1 License. Subject to the terms and conditions of this Agreement,
Biomatrix grants to Wyeth, and Wyeth accepts from Biomatrix, the exclusive,
right and license (without the right to sublicense), for the term of this
Agreement, to use and display, and Wyeth shall use and display, the Trademark
solely in connection with the sale, distribution, marketing, advertising and
promotion of Products and Extended Products in the Field in the Territory. Wyeth
agrees that it shall not use the Trademark at any time outside the Territory or
use any Trademark for any products other than the Products and Extended Products
within the Territory, or for any other purpose except as provided herein.
2.2 Limitation of Rights. Wyeth shall have the right to use the
Trademark only in the manner and to the extent specifically permitted by this
Agreement. Biomatrix retains all rights not expressly granted to Wyeth in this
Agreement. If Wyeth's license to sell Products or Extended Products terminates
with respect to any country in the Territory then Wyeth's rights to use the
Trademark and all other product specific logos, slogans and other intangibles
used by Wyeth or its Affiliates in association with the sale of Products and
Extended Products (including all registrations relating thereto) shall terminate
with respect to such country and, subject to Wyeth's sell-out rights with
respect to inventory, Wyeth shall (i) immediately with respect to such country
cease using the Trademark and any such logos, slogans, and marketing rights of
Biomatrix or any imitations thereof and (ii) immediately execute and deliver to
Biomatrix any documents or instruments reasonably requested by Biomatrix to give
full effect to the provisions of this Section 2.2.
2.3 Royalty. In consideration of the license granted to Wyeth in
Section 2.1, Wyeth agrees to pay royalties to Biomatrix as follows:
(a) Wyeth shall pay to Biomatrix royalties in an amount equal to
*
*Confidential portions have been omitted and filed separately with
the Commission.
<PAGE> 3
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Exhibit 10.4
*
(b) The amount of royalties due hereunder shall be computed
quarterly. Within
*
after the close of each calendar quarter, Wyeth shall pay to
Biomatrix in cash the royalties owed hereunder with respect to such
quarter. Each such payment shall be accompanied by a statement describing
in reasonable detail the calculation of the amount of the accompanying
royalty payment.
*
(c) All royalty payments shall be made in U.S. Dollars. The amount
of Net Revenues paid in another currency shall be converted into U.S.
Dollars in accordance with Section 4 of the International License
Agreement.
2.4. Intangibles. Biomatrix shall have exclusive ownership rights
to the Trademark and all other product specific logos, slogans and other
intangibles relating to the Products and Extended Products possessed or
controlled by Wyeth or any of its Affiliates.
3. TERM AND TERMINATION. Unless earlier terminated pursuant to this
Paragraph 3, this Agreement shall continue in force, on a country-by-country
basis, as long as Wyeth is selling any Product or Extended Product in such
country in the Territory. Notwithstanding the foregoing, this Agreement may be
terminated by Biomatrix at any time upon written notice thereof to Wyeth upon
the occurrence of any of the following:
(a) Breach of any duty or obligation of Wyeth
hereunder not cured within thirty (30) days after receipt of
written notice thereof from Biomatrix;
(b) Termination of each of the International License
and U.S. License by Biomatrix as a result of Wyeth's breach;
(c) Termination of each of the International License
and U.S. License by Wyeth;
(d) Institution by Wyeth of bankruptcy, insolvency,
liquidation or receivership proceedings, or proceedings for
reorganization under bankruptcy or comparable laws;
(e) Institution against Wyeth of any of the
proceedings listed in (d) above, the effectiveness of which is
not stayed or dismissed within sixty (60) days after such
institution;
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 4
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(f) Wyeth's making of a general assignment for the
benefit of creditors; and
(g) Wyeth's failure to use the Trademark for a
material amount of time in connection with material amounts of
sales of Products or Extended Products.
4. EFFECTS OF TERMINATION.
Wyeth shall not have, and hereby waives, any claim for lost
profits or goodwill relating to the termination of this Agreement. Upon the
expiration or termination of this Agreement, Wyeth shall (i) immediately
discontinue all use of the Trademark, its component parts or any colorable
imitations thereof, by itself or in combination with any other words, letter,
symbols or designs and all other logos, slogans, marketing rights and other
intangibles (or any imitations thereof) relating to the Products or Extended
Products and (ii) immediately take all necessary action and execute and deliver
to Biomatrix any documents and instruments reasonably requested by Biomatrix to
give full effect to the provisions of this Section 4, including without
limitation those necessary to remove Wyeth as a registered user and/or a
recorded licensee of the Trademark.
*
Thereafter, Biomatrix shall have the right, but not the obligation,
*
The termination of this Agreement shall not affect any obligation accruing prior
to such termination. In the event that Wyeth fails promptly upon written request
by Biomatrix to comply with any of its agreements in this Section 4, Wyeth
hereby irrevocably consents to Biomatrix's taking any action necessary to give
effect to such agreements.
5. QUALITY CONTROL
Throughout the term of this Agreement, Wyeth shall maintain
the quality of products manufactured, sold or distributed under the Trademark at
least at the level of quality maintained for products currently sold and
distributed under the Trademark. Any products sold under the Trademark shall be
made strictly to the same specifications as the Product and/or Extended Product
made by Biomatrix under the Supply Agreement between Biomatrix and Wyeth dated
as of February 7, 1997. If any product sold under the Trademark is not
manufactured by Biomatrix, at least
*
prior to use or distribution thereof, Wyeth shall deliver to Biomatrix for
inspection, testing and/or review samples of product to be sold and all new, or
changes to existing, product signs, labels, packaging materials, advertising and
other materials bearing the Trademark; and Wyeth shall not offer for sale, sell,
distribute or use any such new or changed product or materials without
Biomatrix's express prior written approval. Biomatrix' approval
*
In order to determine Wyeth's compliance with this Paragraph 5, Biomatrix or its
authorized representative may inspect and/or test, at reasonable times and
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 5
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under reasonable circumstances, all uses of the Trademark by Wyeth and all
underlying goods. Each product produced or distributed hereunder shall comply
with all applicable laws and regulations and shall conform in all respects to
the sample of such product approved by Biomatrix hereunder. In the event of any
nonconformity or any deterioration in the quality of a product sold under the
Trademark (as determined by Biomatrix in good faith), Biomatrix may, in addition
to other available remedies, by written notice to Wyeth, require that such
product be immediately withdrawn from the market and Wyeth shall promptly cause
such withdrawal.
6. INTELLECTUAL PROPERTY
6.1 Use and Display of the Trademarks. Wyeth shall use and
display the Trademark in a conspicuous manner in connection with all Products
and Extended Products. Without limiting the generality of the foregoing:
(a) Wyeth shall include in all advertising and
promotional material created by or for Wyeth in which the Trademark
appears such legends, markings, and notices (such as "TM" or "(R)"
superscript, as appropriate) as required or permitted by any foreign,
federal, state or local law or regulations.
(b) Subject to applicable laws and regulations in the
Territory, Wyeth shall ensure that all trade literature, publications
and promotional materials relating to any product sold under the
Trademark shall specify the concept of viscosupplementation and that
such concept has been conceived and introduced by Biomatrix.
(c) Wyeth shall not use the Trademark or any marks
confusingly similar thereto (i) in connection with any goods or
services other than products made to the specifications for the
Products or Extended Products or (ii) as part of or in connection with
the legal name of any Person or the tradename of any Person;
(d) Wyeth shall not have the right to use any
variation of the Trademark without Biomatrix's written approval (which
approval shall be in Biomatrix's sole discretion) and, in the event
that Biomatrix approves the use of any variation of a Trademark, such
approved variation shall become a Trademark owned by Biomatrix and
governed by the terms of this Agreement;
(e) Wyeth shall not use the Trademark with any other
trademark or tradename, other than Wyeth's standard "house mark,"
without Biomatrix's prior written approval (which approval shall not be
unreasonably withheld).
6.2 Ownership and Maintenance of Trademark. Biomatrix
expressly reserves the sole and exclusive ownership of the Trademark and all
rights relating thereto. Wyeth hereby acknowledges that Biomatrix is the sole
and exclusive owner of the
<PAGE> 6
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Trademark. Wyeth shall not question or otherwise challenge, either directly or
indirectly, during the term of this Agreement or after its termination or
expiration, Biomatrix's ownership of, and rights in, the Trademark and the
goodwill associated therewith or the validity of this Agreement. All use of the
Trademark by Wyeth shall inure to the benefit of Biomatrix. Upon Biomatrix's
request, whether during or after the term of this Agreement, Wyeth shall provide
necessary samples and information to permit Biomatrix to effect trademark or
service mark registrations and execute and deliver to Biomatrix any documents
required by Biomatrix to confirm Biomatrix's ownership of the Trademark. Wyeth
shall not at any time, either during or after the term of this Agreement, apply
to register the Trademark, or any mark confusingly similar thereto, as a
trademark or service mark anywhere in the world. The parties shall execute a
short form Trademark license agreement to the extent that it is necessary to
record the Trademark license hereunder in any country in the Territory where
Biomatrix deems such recordation to be necessary or desirable.
6.3 No Assignment. It is understood and agreed that nothing in
this Agreement will be deemed in any way to constitute an assignment by
Biomatrix of the Trademark or of the goodwill associated therewith, or to give
Wyeth any right, title, or interest in and to the Trademark or the goodwill
associated therewith (except the right to make use thereof as herein provided).
6.4 Infringements by Third Parties. Wyeth shall notify
Biomatrix promptly of any use by any Person of the Trademark or a mark similar
to the Trademark. Biomatrix in its sole discretion shall decide whether or how
to proceed against a third party infringer. Wyeth shall cooperate fully with
Biomatrix in connection with the prosecution of any claim against any such third
party infringer. If requested by Biomatrix, Wyeth shall join with Biomatrix, at
Biomatrix's expense, in any such action as Biomatrix in its sole discretion may
deem advisable, provided, however, that Wyeth shall have no right to take any
action with respect to the Trademark without Biomatrix's prior written approval,
which approval may be withheld in Biomatrix's sole discretion. The proceeds of
any settlement of, or recovery from, any such action shall belong entirely to
Biomatrix. If Biomatrix declines in writing to bring any action against an
alleged third party infringer, Wyeth may proceed and will bear all expenses of
the action. If necessary for Wyeth to proceed, Biomatrix shall join with Wyeth,
at Wyeth's expense. The proceeds of any settlement of, or recovery from, any
such action initiated by Wyeth shall belong entirely to Wyeth.
7. INDEMNIFICATION
7.1 Indemnification by Biomatrix. Biomatrix agrees to defend,
indemnify and hold harmless Wyeth from and against any and all claims of third
parties and liabilities, judgments, penalties, losses, costs, damages and
expenses resulting therefrom, arising from infringement claims by third parties
by reason of Wyeth's lawful use of the Trademark in accordance with this
Agreement. In the event of any such claim, upon written request by Biomatrix,
Wyeth shall immediately cease and desist from any and all further use or display
of the Trademark.
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 7
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7.2 Indemnification by Wyeth. Wyeth agrees to defend,
indemnify and hold harmless Biomatrix from and against any and all claims of
third parties and liabilities, judgments, penalties, losses, costs, damages and
expenses resulting therefrom, arising by reason of * by Wyeth, its agents,
employees or representatives.
7.3 Procedures for Indemnification. With respect to any claims falling
within the scope of the foregoing indemnifications:
(a) Each party agrees to notify the other promptly
and in writing of such claims, and to keep the other fully advised with
respect to such claims and the progress of any legal actions relating
thereto in which the other party is not a participant.
(b) Biomatrix shall have the sole right to undertake
and control the defense and settlement of any claims relating to the
ownership or validity of the Trademark or of any pending application or
registration of the Trademark. Wyeth shall cooperate fully with
Biomatrix in connection with the defense of any such claims brought by
third parties. If requested by Biomatrix, Wyeth shall join with
Biomatrix, at Biomatrix's expense, in any such action as Biomatrix in
its sole discretion shall deem advisable.
(c) Wyeth shall have the right to participate at its
own expense in the defense of any claim instituted against it, and, if
it does so participate, it shall not have the right to recover against
Biomatrix the costs and expenses (including its attorneys' fees) of its
participation in such suit.
(d) In the event that a party assumes the defense of
a claim against the other party, the party assuming the defense shall
not enter into any compromise or settlement of the claim without the
prior written consent of the other party, which consent shall not be
unreasonably withheld.
8. MISCELLANEOUS PROVISIONS
8.1 Assignment. The rights and obligations of the parties hereto
shall inure to the benefit of and shall be binding upon the authorized
successors and permitted assigns of each party. Neither party may, without the
prior written consent of the other party, take any of the following actions
(collectively referred to herein as an "Assignment"): (i) assign or transfer its
rights or obligations under this Agreement, (ii) license or sublicense any of
its rights or obligations under this Agreement, or (iii) designate another
person to perform all or part of its obligations under this Agreement or have
all or part of its rights and benefits under this Agreement; provided, however,
that a party may make Assignments to Affiliates of such party or to a successor,
by merger, and provided, further that in the case of an Assignment to an
Affiliate the assigning party shall promptly notify the other party in writing
of such
*Confidential portions have been omitted and filed separately with the
Commission.
<PAGE> 8
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Assignment and shall remain liable (both directly and as guarantor) with respect
to all obligations so assigned. In the event of any permitted Assignment or in
the event that an Affiliate of either party shall exercise rights and/or perform
obligations hereunder pursuant to the terms of this Agreement, the assignee or
Affiliate, as the case may be, shall specifically assume and be bound by the
provisions of the Agreement by executing and agreeing to an assumption agreement
satisfactory to the other party hereto.
8.2 Governing Law; Specific Performance. (a) This Agreement
and the respective rights and obligations of the parties shall be governed by
and construed in accordance with the internal and substantive laws of the State
of New Jersey, United States of America (without regard to principles of
conflicts of laws). The parties hereby agree that the United Nations Convention
on Contracts for the International Sale of Goods shall not apply to this
Agreement or any other document contemplated hereby. In the event of any dispute
touching or concerning this Agreement, the parties hereby agree to submit such
dispute to their respective chief executive officers or their designees by
notice delivered in accordance with the provisions of Section 8.6 hereof. Each
of the parties agrees that any suit relating to this Agreement may be brought in
the courts of the State of New Jersey or any federal court and service of
process in any such suit being made by mail at the address specified in Section
8.6. Each party hereby waives any objection that it may now or hereafter have to
the venue of any such suit or any such court or that such suit is brought in an
inconvenient court.
(b) Injunctive Relief. Each of the parties hereto acknowledges and
agrees that damages will not be an adequate remedy for any material breach or
violation of this Agreement if such material breach or violation would cause
immediate and irreparable harm (an "Irreparable Breach"). Accordingly, in the
event of a threatened or ongoing Irreparable Breach, each party hereto shall be
entitled to seek, in any state or federal court in the State of New Jersey,
equitable relief of a kind appropriate in light of the nature of the ongoing
threatened Irreparable Breach, which relief may include, without limitation,
specific performance or injunctive relief; provided, however, that if the party
bringing such action is unsuccessful in obtaining the relief sought, the moving
party shall pay the non-moving party's reasonable costs, including attorney's
fees, incurred in connection with defending such action. Such remedies shall not
be the parties' exclusive remedies, but shall be in addition to all other
remedies provided in this Agreement.
8.3 Section Headings. References herein to sections and
Exhibits are to sections and Exhibits to this Agreement. The title of this
Agreement and the section headings contained herein are for convenience of
reference only and shall not define or limit the provisions hereof.
8.4 Severability. If any term, provision, covenant or
condition of this Agreement is declared to be invalid, void or unenforceable,
the remainder of the provisions shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
<PAGE> 9
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8.5 Waiver. The failure of either party to require the
performance of any provision of this Agreement by the other party shall not be
deemed a waiver and shall not deprive the party of its full right to require
such performance in the particular instance or at any other time.
Any waiver must be in writing executed by the waiving party.
8.6 Notices. All communications in connection with this
Agreement shall be in writing and sent by postage prepaid first class mail,
courier, or telefax, and if relating to default, late payment or termination, by
certified mail, return receipt requested, telefax or courier, addressed to each
party at the address above, in the case of Biomatrix, Attn: Chief Executive
Officer, with a copy to: Justin P. Morreale, Esq., Bingham, Dana & Gould LLP,
150 Federal Street, Boston, Massachusetts 02110, U.S.A., and in the case of
Wyeth, 555 East Lancaster Avenue, St. Davids, Pennsylvania 19087, Attn: Senior
Vice President, Global Business Development, with a copy to American Home
Products Corporation, Five Giralda Farms, Madison, New Jersey 07990, Attn:
Senior Vice President and General Counsel or to such other address as the
addressee shall last have designated by notice to the communicating party. The
date of giving any notice shall be the date of its actual receipt.
8.7 No Agency or Franchise. This Agreement and the relations
hereby established by and between Biomatrix and Wyeth do not constitute a
partnership, joint venture, agency, franchise or contract of employment between
them.
8.8 Complete Agreement. This Agreement, the Supply Agreement
and the License Agreements embody all of the terms and conditions of the
agreement between the parties with respect to the matters set forth herein and
supersedes any and all prior or contemporaneous agreements, representations,
understandings or discussions of any kind between the parties.
8.9 Modifications. This Agreement may not be modified or
amended except by writing which refers specifically to this Agreement signed on
behalf of both parties by their duly authorized officers.
8.10 Other Documents The parties agree to implement this
Agreement by executing or causing to be executed such additional documents and
agreements as may be necessary to fully protect the Trademark and effectively
carry out the terms of this Agreement in accordance with applicable laws and
regulations.
8.11 EU REGULATIONS. It is the intention of the parties hereto
that this Agreement shall at all times qualify for the exemption from the
provisions of Article 85(1) of the Treaty of Rome dated 25 March 1957, as
amended, which either (a) is available under EEC Regulation Number 1983/83, or
(b) may otherwise be available under any other regulations or successor
regulation thereto. In the event that any provision of this Agreement is deemed
to violate the conditions for qualifying for the exemption, set out in whichever
of those regulations may be in effect at the relevant time, or if any such
regulation is amended after the date of this Agreement so as to cause this
Agreement to fail to qualify
<PAGE> 10
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for the exemption, the parties hereto agree that they will, as soon as it is
practicable to do so, enter into good faith negotiations to amend this Agreement
as necessary in order to re-qualify for the exemption or notify the Agreement.
THE PARTIES HERETO, intending to be legally bound, have duly
executed this Agreement on the date first written above.
AMERICAN HOME PRODUCTS CORPORATION
By: /s/ Fred Hassan
---------------------------
Title: Executive Vice President
--------------------------
BIOMATRIX, INC.
By: /s/ Endre A. Balazs
--------------------------
Title: Chief Executive Officer
-------------------------
<PAGE> 11
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Exhibit A
Trademark
II. SYNVISC(R)
<TABLE>
<CAPTION>
Country Registration No. Term Expiration Date
------- ---------------- ---- ---------------
<S> <C> <C> <C>
</TABLE>
*
*Confidential portions have been omitted and filed separately
with the Commission.
<PAGE> 12
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Country Registration No. Term Expiration Date
------- ---------------- ---- ---------------
*
*Confidential portions have been omitted and filed separately
with the Commission.
