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SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 17, 1996
Atrix Laboratories, Inc.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
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Delaware 0-18231 84-1043826
-------------- ------------ -------------------
(State of (Commission (IRS Employer
incorporation) File Number) Identification No.)
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2579 Midpoint Drive, Fort Collins, Colorado 80525
----------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (970) 482-5868
Not Applicable
--------------
(Former Name or Former Address, if Change Since Last Report)
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Item 5. Other Events.
See the Press Release attached hereto as Exhibit 20.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
10 Agreement between the Registrant and Block Drug
Corporation dated December 16, 1996 **
20 Press Release dated December 17, 1996 regarding
agreement with Block Drug Company *
__________________________________
* Previously filed.
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed with
the Securities and Exchange Commission.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATRIX LABORATORIES, INC.
Date: May 18, 1998 By: /s/ Brian Richmond
-----------------------------------
Brian Richmond, Vice President,
Finance and Assistant Secretary
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EXHIBIT INDEX
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Exhibit No. Exhibit Description
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10 Agreement between the Registrant and Block Drug Corporation dated December 16, 1996**
20 Press Release dated December 17, 1996 regarding agreement with Block Drug Company*
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__________________________________
* Previously filed.
** Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment. The omitted portions have been separately filed with
the Securities and Exchange Commissions.
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EXHIBIT 10
- --------------------------------------------------------------------------------
AGREEMENT
BETWEEN
ATRIX LABORATORIES, INC.
AND
BLOCK DRUG CORPORATION
---------------------------
DECEMBER 16, 1996
---------------------------
- --------------------------------------------------------------------------------
Certain portions of this Exhibit have been omitted based upon a request
for confidential treatment. The omitted portions have been separately
filed with the Securities and Exchange Commission
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II LICENSE AND PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.01. License Grant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.02. International Option. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.03. Purchase. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.04. Occurrence of First Commercial Sale by Block. . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE III PAYMENTS AND ROYALTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.01. Initial Purchase Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.02. Milestone Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.03. Goodwill Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.04. Royalty Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.05. Inflation Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.06. Payment of International Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.07. Reimbursement for Patent Maintenance Expense. . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV ROYALTY REPORTS AND ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.01. Reports, Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.02. Audits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.03. Confidential Financial Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.01. Payment Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.02. Payment Method. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.03. Late Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI ATRIX CO-MARKETING RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6.01. Co-Marketing Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6.02. Reduction in Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6.03. Trademark and Trade Dress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.01. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.02. Termination By Block. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.03. Termination After First Commercial Sale. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.04. Termination By Atrix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7.05. Exhaustion of Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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Section 7.06. Termination Upon Certain Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 7.07. Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 7.08. Rights and Obligations Upon Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII STEERING COMMITTEE AND DEVELOPMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.01. Establishment of Steering Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.02. Committee Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.03. Approval of Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.04. Payment of Development Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.05. New Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.06. Location of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.07. Frequency of Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.08. Responsibility for Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.09. Resolution of Scientific Disputes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8.10. Written Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.11. Material Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.12. No Solicitation of Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.13. Use of Clinical Research. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8.14. Rights to Developments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IX MANUFACTURE, SUPPLY AND PURCHASE OF PRODUCT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.01. Product Requirements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.02. Price. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.03. Shipping Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 9.04. Payment Due. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.05. Forecasts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.06. Shipment Subject to Approval. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.07. Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.08. Product Recall or Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.09. Training Samples. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 9.10. Purchase Orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE X ALTERNATE MANUFACTURE AND SUPPLY OF PRODUCT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.01. Inspection and Observation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 10.02. Unable or Unwilling to Fill Orders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.03. Escrow of Know-How and Proprietary Information. . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.04. Royalty Due. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE XI REPRESENTATIONS AND WARRANTIES OF ATRIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 11.01. Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 11.02. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 11.03. Product to Meet Specifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 11.04. Product Not Misbranded or Adulterated. . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 11.05. Full Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 11.06. Good, Usable, Saleable and Merchantable. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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Section 11.07. No Process Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 11.08. Patents, Know-How and Proprietary Information. . . . . . . . . . . . . . . . . . . . . . . . 27
Section 11.09. Pending Litigation and Other Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.10. Settled Litigation and Other Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.11. Patent and Product Related Files . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.12. No Finder Fee Due. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.13. No Encumbrances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 11.14. Accuracy of Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XII REPRESENTATIONS AND WARRANTIES OF BLOCK. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.01. Corporate Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.02. Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.03. Finders' Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.04. Litigation and Complaints. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 12.05. Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.06. Contractual Ability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 12.07. Accuracy of Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XIII COVENANTS OF ATRIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.01. Manufacturing Capability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.02. Disclosure of Specifications and Test Methods. . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.03. Sampling and Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.04. Use of Block Trademarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.05. Liability Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.06. Access to Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.07. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XIV COVENANTS OF BLOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 14.01. Domestic A&S Spending Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 14.02. International A&S Spending Levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14.03. Variances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14.04. Cash Alternatives. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14.05. Minimum Size of Detail Force . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14.06. Domestic Detail Calls. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14.07. Access to Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14.08. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 14.09. No Sale of Competitive Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 14.10. Marketing Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 14.11. Best Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XV INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.01. Block Indemnified by Atrix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 15.02. Atrix Indemnified by Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 15.03. Threshold for Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 15.04. Prompt Notice Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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Section 15.05. Indemnitor May Settle. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XVI PATENTS AND TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 16.01. Maintenance of Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 16.02. Filing of Additional Patent Applications . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 16.03. Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 16.04. Atrix to Prosecute Infringement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 16.05. Infringement Claimed by Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 16.06. Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 16.07. Marketing and Instructional Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 16.08. Publication. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XVII DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 17.01. Disputes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 17.02. Demand for a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 17.03. Dispute Resolution Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 17.04. Notice Required. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 17.05. Umpire Selection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 17.06. Neutral with Special Expertise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17.07. Notice of Dispute Hearing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17.08. Venue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17.09. Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XVIII CONFIDENTIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 18.01. Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 18.02. Broadest Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 18.03. No Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 18.04. Public Domain Exclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 18.05. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE XIX NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 19.01. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 19.02. Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 19.03. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.04. Entire Agreement/Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.05. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.06. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.07. No Waiver of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.08. Force Majeure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.09. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 19.10. Assignment and Sub-License . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 19.11. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 19.12. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 19.13. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 19.14. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C> <C>
Section 19.15. No Strict Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 19.16. US Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 19.17. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 19.18. Independent Contractors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>
Schedule 1 Patents
Schedule 6.01(b) International Sales Minimums
Schedule 11.08 Patents, Know-How and Proprietary Information
Exhibit 3.01 Escrow Agreement
Exhibit 10.03 Escrow Agreement
v
<PAGE> 7
AGREEMENT
This AGREEMENT is made as of December 16, 1996 by and between Atrix
Laboratories, Inc., a Delaware corporation ("Atrix"), with its principal place
of business located at 2579 Midpoint Drive, Fort Collins, Colorado 80525-4417
and Block Drug Corporation, a New Jersey corporation ("Block"), with its
principal place of business located at 105 Academy Street, Jersey City, New
Jersey, 07302-9988. Atrix and Block are sometimes referred to collectively
herein as the "Parties" and individually as a "Party."
WHEREAS, Atrix owns certain Proprietary Information, intellectual
property, Patents and Know-How, and possesses manufacturing capabilities for
Atridox(TM), Atrisorb(R) and Atrisorb(R) with Doxycycline, and subject to the
terms of this Agreement, Atrix desires to grant to Block an exclusive license
to market and sell Atridox(TM) and Atrisorb(R) with Doxycycline and any and all
Improvements thereon for use in the field of dentistry including all its
specialties in the Territory; and
WHEREAS, Block desires to obtain from Atrix an exclusive license to
advertise, promote, market, distribute, detail and sell the Licensed Products;
and
WHEREAS, Atrix is willing to grant such rights and licenses to Block
under the terms and conditions hereinafter set forth; and
WHEREAS, Block desires to purchase from Atrix certain rights with
respect to Atrisorb(R); and
WHEREAS, Atrix is willing to sell such rights to Block under the terms
and conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the Parties mutually agree as follows:
ARTICLE I
DEFINITIONS
The following terms as used in the Agreement shall, unless the context
clearly indicates to the contrary, have the meaning set forth below:
"Act" means the United States Food, Drug and Cosmetic Act, as amended,
and all regulations thereunder.
"ADR Proceeding" shall have the meaning set forth in Section 17.08.
"Agreement" means this Agreement and any written amendments, addendums
or modifications hereto.
1
<PAGE> 8
"Affiliate" means any entity which directly or indirectly controls, is
controlled by or is under common control with either Block or Atrix. The term
"control" means the power to direct or control the affairs of such entity by
reason of ownership of at least fifty percent (50%) of such entity by voting
stock, equity interest, contract or otherwise.
"Approvable Letter" means a letter issued by the FDA indicating the
pending approval of an NDA relating to a product, as defined in 21 CFR Section
314.110.
"Approval Letter" means a letter issued by the FDA indicating approval
of a product, as defined in 21 CFR Section 314.105.
"Atridox(TM)" means the Atrigel(R) drug delivery system containing
doxycycline for the subgingival therapy of periodontal disease.
"Atridox(TM) NDA" shall have the meaning set forth in Section 3.02.
"Atrigel(R)" means Atrix's proprietary drug delivery system consisting
of flowable compositions (e.g., solutions, gels, pastes and putties) of
biodegradable polymers and biocompatible solvents.
"Atrisor(R)" means the biodegradable guided tissue regeneration
("GTR") barrier for periodontal surgery, based on the Atrigel(R) drug delivery
system.
"Atrisor(R) with Doxycycline" means the Atrisorb(R) barrier containing
doxycycline for localized control of infections at the site of GTR surgery.
"A&S" *
"Clearance Letter" means an order issued by the FDA that the subject
of a 510(k) pre-market approval has been cleared for marketing, as defined in
21 CFR Section 807.100(a)(i).
"Clinical Research Support" means any study intended to expand the
appropriate use of the previously approved and cleared Products, other than
those studies (*) to be conducted in order to obtain governmental approval of
the Products regardless of whether new label claims are obtained.
"Competitive Product" shall have the meaning set forth in Section
14.09.
"Confidential Information" means that information as more fully
defined in Article XVIII.
"Dental Detail Force" means Block's Oral Health Care Division field
force of full-time dental consultants, divisional and regional managers who
make sales and product recommendation calls on Dental Professionals.
__________________________________
* Confidential treatment has been requested.
2
<PAGE> 9
"Dental Professionals" means Dentists, dental practitioners, dental
school staffs and dental hygienists.
"Dentist" means any professional having a D.D.S. or D.M.D. degree,
including, but not limited to, general practitioners, dental specialists,
endodontists, oral surgeons and periodontists.
"Detail Call" means a sales and product recommendation call by the
Dental Detail Force on Dental Professionals.
"Development" or "Developments" shall have the meaning set forth in
Section 8.01.
"Development Expenses" shall have the meaning set forth in Section
8.04.
"Discloser" shall have the meaning set forth in Section 18.01.
"Documented Technology" shall have the meaning set forth in Section
10.03.
"Domestic" means the United States.
"Domestic A&S" shall have the meaning set forth in Section 14.01.
"Effective Date" shall have the meaning set forth in Section 7.01.
"Escrow Agent" shall have the meaning set forth in Section 10.03.
"Escrow Agreement" shall have the meaning set forth in Section 10.03.
"Exclusivity Shortfall Payment" shall have the meaning set forth in
Section 6.01.
"FDA" means the United States Food and Drug Administration.
"First Commercial Sale" shall mean with respect to the Product the
date of the first invoice to a Dental Professional or an unrelated third party
reflecting a shipment of the Product from Block to any customer.
"Force Majeure" shall have the meaning set forth in Section 19.08.
"GAAP" means generally accepted accounting principles, consistently
applied.
"GBR" shall have the meaning set forth in Section 14.09.
"cGCPs" means current good clinical practices as specified by the FDA.
"cGLPs" means current good laboratory practices as specified by the
FDA.
"cGMPs" means current good manufacturing practices as specified by the
FDA.
"GNP" means gross national product.
3
<PAGE> 10
"Governmental Approval" means all permits, licenses and authorizations
required by the FDA or any other Governmental Authority as a prerequisite to
the manufacturing, packaging, marketing and selling of the Products or the
Units.
"Governmental Authority" means any foreign, federal, state, local or
other government, administrative or regulatory agency, authority, body,
commission, court, tribunal or similar entity.
"Group I" means *
"Group II" means *
"Group III" means *
"Improvement" or "Improvements" shall mean any change in the design,
composition, packaging, method of manufacturing, method of delivery or
instructions for use of the Products, which change does not involve a new
regulatory submission to the FDA supported by pivotal human safety and efficacy
studies.
"IND" means an investigational new drug application as more fully
defined in 21 CFR Section 312.
"Indemnitee" shall have the meaning set forth in Section 15.04.
"Indemnitor" shall have the meaning set forth in Section 15.04.
"Index" shall have the meaning set forth in Section 3.05.
"International" or "Internationally" means the Group I, II and III
countries.
"International A&S" shall have the meaning set forth in Section 14.02.
"Know-How" means all factual knowledge and Proprietary Information
pertaining to the Products and used or useful in the development of the
Products of a nature normally held in the industry as trade secrets or
otherwise as confidential information, including, without limitation, all
pharmacological, preclinical, clinical, chemical, biochemical, toxicological,
pharmacokinetics, manufacturing, business, financial, formulation and
scientific research data or information, whether or not capable of precise
separate description.
"Law" means any federal, state, local or foreign law, statute, rule,
regulation, ordinance, standard, requirement, administrative ruling, order or
process (including, without limitation, any zoning or land use law or
ordinance, any building code and any environmental, securities, blue sky, civil
rights or occupational health and safety law or regulation), and any court or
arbitrator's order or process.
__________________________________
* Confidential treatment has been requested.
4
<PAGE> 11
"License" means the exclusive license granted to Block pursuant to
Article II.
"Licensed Product" or "Licensed Products" means Atridox(TM) and
Atrisorb(R) with Doxycycline, as the context may indicate, and Improvements
thereon for use in the field of dentistry, including all of its specialties.
"Loss" shall have the meaning set forth in Section 15.01.
"Milestone Payments" means those payments specified in Section 3.02.
"NDA" means a New Drug Application, and all amendments and supplements
thereto, filed or to be filed, with the FDA seeking authorization and approval
to manufacture, package, ship and sell a product as more fully defined in 21
CFR Section 314.5 et seq.
"NDA Approval" means FDA approval of the manufacturing, packaging,
shipping and selling of a product in accordance with an NDA as evidenced by an
Approval Letter issued pursuant to 21 CFR Section 314.105.
"Net Selling Price" during a given period shall mean the Net Sales of
Product during such period divided by the Net Units sold during such period.
"Net Sales" means the invoice price to customers of Block for sales of
Products in the ordinary course of business, as recorded in Block's audited
financial statements in accordance with GAAP, which includes deductions for:
(a) refunds for rejected or returned Product, (b) excise, use, value added and
sales taxes, (c) customs duties and other imposts, (d) normal and customary
quantity and cash discounts, (e) off-invoice allowances other than co-op
advertising allowances, (f) credits on account of retroactive price reductions
and (g) rebates required by government rule, regulation, program or fiat, all
to the extent that any of the foregoing may be paid or allowed by Block. In
determining the international Net Selling Price in each country, on a
country-by-country basis, the foreign currency shall be converted monthly in
accordance with Block's audited financial statements and GAAP. For purposes of
this definition: (i) Net Selling Price shall not be imputed for samples and
free goods which are dispensed by Block without charge in order to induce sales
of the Products; and (ii) Atrix will not be entitled to any royalties on Block
intra-company sales but shall be entitled to royalties upon the subsequent
resale to a third party.
"Net Units Sold" means the aggregate number of Units sold during a
given period less the number of Units for which a customer receives an
allowance for breakage, spoilage or rejected or returned goods during such
period, provided such allowance is credited to such customer.
"New Products" means any change to the Products which involves new
regulatory submissions to the FDA supported by pivotal human safety and
efficacy studies and either the alteration or addition of any active ingredient
other than the current active ingredients in the Product, or the significant
alteration of the polymer or biocompatible carrier.
5
<PAGE> 12
"Notice" means a formal written communication given by one Party to
the other in compliance with the provisions of Section 19.01.
"Notice of Dispute" shall have the meaning set forth in Section 17.04.
"Notice of Meeting" shall have the meaning set forth in Section 17.02.
"Option Fees" shall have the meaning set forth in Section 2.02.
"Patent" means those patents, collectively or individually as may be
inferred from the context, listed on Schedule 1 hereof, any extensions,
continuations, continuations-in-part, re-examination, re-issues, and
divisionals thereof as such pertain exclusively to the Products.
"Product" or "Products" means the Licensed Products and Atrisorb(R),
respectively, and Improvements thereon for use in the field of dentistry,
including all of its specialties.
"Proprietary Information" means all of the Parties' Confidential
Information, trade secrets, research and results thereof, technology, know-how,
techniques, data, methods, processes, instructions, formulae, INDs and NDAs
(including, without limitation, all materials relating thereto and all
amendments and supplements thereof), protocols and studies (clinical or
otherwise), laboratory notes, records, drawings and specifications (whether or
not such items have been reduced to written, computer-readable or other
tangible form) and other information and materials of every kind and character
relating to or useful in the research or development of the Products.
"Recall" shall have the meaning set forth in Section 9.09.
"Recipient" shall have the meaning set forth in Section 18.01.
"Royalty Payment Date" shall have the meaning set forth in Section
5.01.
"Royalty Statement" shall have the meaning set forth in Section 4.01.
"Sales Milestones" shall have the meaning set forth in Section 3.03.
"Steering Committee" shall have the meaning set forth in Section 8.01.
"Term" shall have the meaning set forth in Section 7.01.
"Territory" means (i) with respect to Atridox(TM), the United States
and such Group I countries, Group II countries, and Group III countries, for
which Block has paid the Option Fees provided for in Section 2.02, and (ii)
with respect to Atrisorb(R) and Atrisorb(R) with Doxycycline, the United States
and Canada.
"Training Samples" shall have the meaning set forth in Section 9.10.
6
<PAGE> 13
"Unit" means (i) with respect to Atridox(TM), a complete treatment kit
consisting of a syringe of Atrigel(TM) delivery system, a syringe of
doxycycline hyclate and a cannula in a moisture proof pouch and instructions
for use, as such kit may be changed or reformulated by Atrix from time to time;
(ii) with respect to Atrisorb(R), a complete treatment kit consisting of a
barrier forming case, three (3) unit dose packs of sterile saline, a dose pack
of Atrisorb(R) formulation and instructions for use, as such kit may be changed
or reformulated by Atrix from time to time; and (iii) with respect to
Atrisorb(R) with Doxycycline, Improvements or New Products, such package or kit
as Atrisorb(R) with Doxycycline, Improvement or New Product, respectively,
shall be packaged for sale. The number of doses per Unit and the number of
uses per Unit cannot be modified without Block's prior consent.
"United States" means the fifty (50) states, the District of Columbia,
all territories, possessions and commonwealths of the United States, Puerto
Rico, Guam and the U.S. Virgin Islands.
ARTICLE II
LICENSE AND PURCHASE
Section 2.01. LICENSE GRANT.
(a) In consideration for the payments to be made by Block
to Atrix pursuant to this Agreement and subject to the provisions of
this Agreement, Atrix hereby grants, and Block hereby accepts:
(i) An exclusive license to market, promote,
advertise, distribute, commercialize, and under certain
conditions manufacture, the Licensed Products within the
Territory during the Term. The License shall apply only to
the Licensed Products in the countries in the Territory for
which Block acquires rights through the payment of the license
fees as set forth in Article II and III hereof.
(ii) Subject to the provisions of Article VIII
hereof, exclusive rights to any and all Improvements to the
Licensed Products for use in the field of dentistry, including
all of its specialties.
(b) Upon termination of the Agreement, Block shall have
on a country-by-country basis, a fully paid, fully transferable,
perpetual non-exclusive license to use, manufacture, have
manufactured, advertise, sell or promote, or authorize others to use,
manufacture, have manufactured, advertise, sell or promote the
Licensed Products on a product-by-product and country-by-country
basis; provided, however, Atrix shall be under no obligation to
disclose any manufacturing Know-How nor be required to provide Block
with any training or assistance in the methods or process of
manufacturing the Licensed Products.
Section 2.02. INTERNATIONAL OPTION. Block shall have the option to
acquire from Atrix an exclusive license in each country in Group I, II and III,
on a country by country basis, to market,
7
<PAGE> 14
promote, advertise, distribute and commercialize Atridox(TM) upon the payment
of the following option fees (the "Option Fees") within six (6) months of the
Effective Date:
(a) *
(b) *
(c) *
Failure by Block to exercise the option by payment of the Option Fees
shall be deemed to be the termination of that part of the option for which the
Option Fees were not paid.
Section 2.03. PURCHASE.
(a) In consideration for the payments to be made by Block
pursuant to this Agreement and subject to the provisions of this
Agreement, Block hereby purchases:
(i) the goodwill and trademark of Atrisorb(R) in
the Territory.
(ii) subject to the provisions of Article VIII
hereof, exclusive rights to any and all Improvements to
Atrisorb(R) for use in the field of dentistry, including all
of its specialties.
(b) Upon termination of the Agreement, Block shall have
in the Territory, a fully paid, fully transferable, perpetual
non-exclusive license to use, manufacture, have manufactured,
advertise, sell or promote, or authorize others to use, manufacture,
have manufactured, advertise, sell or promote Atrisorb(R) in the
Territory; provided, however, Atrix shall be under no obligation to
disclose any manufacturing Know-How nor be required to provide Block
with any training or assistance in the methods or process of
manufacturing Atrisorb(R).
Section 2.04. OCCURRENCE OF FIRST COMMERCIAL SALE BY BLOCk.
(a) Domestic and Canada. The First Commercial Sale of
Atridox(TM) and Atrisorb(R) with Doxycycline by Block in the United
States and Canada must occur no later than one hundred twenty (120)
days after Atrix has obtained Governmental Approval to sell the
Products in the respective country, provided Atrix has obtained the
required Governmental Approval necessary to sell the Units in the
respective country and has Units available in commercial quantities
ready for shipment to Block in accordance with Block's forecasts as
provided in Section 9.06. The First Commercial Sale of Atrisorb(R) by
Block in the Territory must occur no later than March 1, 1997.
(b) International. The First Commercial Sale within each
country for which Block has exercised its option in Section 2.02 must
occur no later than six (6) months
__________________________________
* Confidential treatment has been requested.
8
<PAGE> 15
after Atrix has obtained Governmental Approval to sell Atridox(TM) in
each country on a country-by-country basis, provided Atrix has
obtained the required Governmental Authority to sell the Units in the
particular country in the Territory and has Units available in
commercial quantities ready for shipment to Block in accordance with
Block's forecasts as provided in Section 9.06. Atrix shall provide to
Block, on a semiannual basis, with respect to those countries that
Block has timely paid the Option Fees, a list of countries in which
approvals are expected within the next six months, based upon a good
faith belief, and Block shall provide Atrix with a forecast in
accordance with the requirements of Section 9.06.
ARTICLE III
PAYMENTS AND ROYALTIES
Section 3.01. INITIAL PURCHASE PRICE. Within five (5) calendar days
from the date of execution of this Agreement, Block shall pay to Atrix the sum
of seven million dollars ($7,000,000) as the purchase price for goodwill and
the trademark to Atrisorb(R) in the Territory. Such purchase price shall be
paid in escrow to be released to Atrix on January 31, 1997 in accordance with
the terms of the Escrow Agreement in the form of Exhibit 3.01 attached hereto.
Section 3.02. MILESTONE PAYMENTS.
(a) Atridox(TM) Milestone Payments. Block shall pay to
Atrix, as prepaid licensing fees, the following milestone payments
within ten (10) calendar days after the specified milestone event
occurs:
(i) * following receipt by Block of Notice from
Atrix *
(ii) * following receipt by Block of Notice from
Atrix *
(iii) * after the close of the calendar quarter in
which Block makes the *
(b) Atrisorb(R) with Doxycycline Milestone Payments.
Block shall pay to Atrix the following Milestone Payments within ten
(10) calendar days after the specified milestone event occurs:
(i) * following receipt by Block of Notice from
Atrix *
(ii) * after the close of the calendar quarter in
which Block makes the *
__________________________________
* Confidential treatment has been requested.
9
<PAGE> 16
(c) Block shall pay to Atrix the following milestone
payments within forty-five (45) days after the end of the first
calendar year in which the following milestone events occur:
(i) * when combined cumulative Net Sales of the
Products in the United States reach *
(ii) * when combined cumulative Net Sales of the
Products in the United States reach *
(iii) * when combined cumulative Net Sales of the
Products in the United States reach *
(iv) * when combined cumulative Net Sales of the
Products in the United States reach *
(v) * when combined cumulative Net Sales of the
Products in the United States reach *
(vi) * when combined cumulative Net Sales of the
Products in the United States reach *
Section 3.03. GOODWILL PAYMENTS. Block will pay Atrix the following
payments:
(a) In the first calendar year in which Block's combined
annual Net Sales of the Products equal or exceed either (i) * in the
United States, or (ii) * worldwide (collectively the "Sales
Milestone"), Block shall pay Atrix the sum of *. Said payment shall
be due within twenty (20) days after the end of the quarter in which
the Sales Milestone is reached; and
(b) On the date that is twelve (12) months following the
payment of the * payment provided for in Section 3.03(a) above, Block
shall pay Atrix an additional *.
Section 3.04. ROYALTY PAYMENTS. Block will pay Atrix the following
royalties based on Net Sales of the Products:
(a) * on the first * of Block's combined annual worldwide
Net Sales of the Products; then
(b) * of that portion of Block's combined annual
worldwide Net Sales of the Products that are in excess of *; then
__________________________________
* Confidential treatment has been requested.
10
<PAGE> 17
(c) * of that portion of Block's combined annual
worldwide Net Sales of the Products that are in excess of * but not
more than *; then
(d) * of that portion of Block's combined annual
worldwide Net Sales of the Products that are in excess of *.
For purposes of calculating royalties the ranges of Net Sales of
Products will be adjusted at the end of each calendar year to reflect fifty
percent (50%) of any change in COLA as defined in Section 3.05. Solely for the
purposes of determining royalties, Net Sales of Products in any country in
which there is no patent protection, or the patent is unenforceable, shall not
be included in determining Block's combined annual worldwide Net Sales of
Products.
Section 3.05. INFLATION ADJUSTMENt. The Net Sales ranges upon which
royalties are payable shall be adjusted each year for inflation using a
cost-of-living adjustment based on the "Consumer Price Index for All Urban
Consumers (Consumer Prices - All Urban Consumers, 1982-84=100)" as published by
the "Bureau of Labor Statistics of the Department of Labor of the United States
Department of Commerce" (the "Index"). In the event the base period for said
Index ("1982-84=100") is changed, the Parties shall make appropriate
compensating adjustments in the Index calculations hereunder, if necessary, to
take such change into account. In the event said Index is discontinued, the
index published by the United States Government, or any agency thereof, which
most closely approximates such Index shall be substituted.
Section 3.06. PAYMENT OF INTERNATIONAL EXPENSES. Block and Atrix *
basis international expenses which shall include all documented expenses
actually incurred and payable by the Parties to third parties which are
verified by Block, including, but not limited to, any filing fees or
registration fees incurred or payable to obtain any international governmental
approvals. Each party will pay *of the cost of all Developments approved by
the Steering Committee. The Steering Committee will solicit bids from Atrix
and from third parties and will determine which is the most appropriate and
award the contract for the Development to the successful bidder.
Section 3.07. REIMBURSEMENT FOR PATENT MAINTENANCE EXPENSE.
Beginning December 31, 1996 and within forty-five (45) days after the end of
each subsequent calendar year throughout the Term, Block will, for so long as
any U.S. patents are valid and enforceable and Block is selling a Product
covered by such patents, pay Atrix the sum of * per annum as reimbursement for
patent maintenance expenses incurred by Atrix.
ARTICLE IV
ROYALTY REPORTS AND ACCOUNTING
Section 4.01. REPORTS, EXCHANGE RATES. Block shall furnish to Atrix
a quarterly written report showing in reasonably specific detail, on a product
by product and country by country basis, (a) the calculation of Net Sales; (b)
royalties payable in U.S. dollars, if any, which shall
__________________________________
* Confidential treatment has been requested.
11
<PAGE> 18
have accrued hereunder based upon Net Sales; (c) withholding taxes, if any,
required by law to be deducted with respect to such sales; (d) the dates of the
First Commercial Sales of any Products in any country in the Territory during
the reporting period; and (e) the exchange rates used to determine the amount
of U.S. dollars (the "Royalty Statement"). Reports shall be due on the
forty-fifth (45th) day following the close of each quarter.
Block shall maintain detailed and accurate business and financial
records containing information sufficient to verify the completeness and
accuracy of the information presented in each Royalty Statement for a period of
two years after the period to which such Royalty Statement relates. Block
shall permit Atrix to inspect those financial records that relate to the Net
Sales of the Products for the sole purpose of verifying the completeness and
accuracy of the Royalty Statements and the calculation of the Net Selling Price
and A&S. Such inspection shall be at Atrix's expense and shall be subject to
reasonable advance notice to Block, during Block's usual business hours, and
shall take place at the place at which such records are normally kept. No
inspection shall be conducted more than two years after the close of the
relevant fiscal year and no reinspection of records for a period already
inspected shall be permitted. Inspections may be conducted by employees of
Atrix or other representatives selected by Atrix and reasonably acceptable to
Block. *
Section 4.02. AUDITS. Upon the written request of Atrix and not more
than once in each calendar year, Block shall permit an independent certified
public accounting firm of nationally recognized standing selected by Atrix and
reasonably acceptable to Block, at Atrix's expense, to have access during
normal business hours to each of the records of Block as may be reasonable and
necessary to verify the accuracy of the royalty reports hereunder for any year
ending. Not more than thirty (30) days after the date of such request, the
accounting firm shall disclose to Atrix only whether the records are correct or
not and the specific details concerning any discrepancies. No other
information shall be shared.
If such accounting firm concludes that additional royalties were owed
during such period Block shall pay the additional royalties within ten (10)
days of the date Atrix delivers to Block such accounting firm's written report
so concluding and Block agrees with such findings. The fees charged by such
accounting firm shall be paid by Atrix; provided however, if the audit
discloses that the royalties payable by Block for the audited period are more
than one hundred and ten percent (110%) of the royalties actually paid for such
period, then Block shall pay the reasonable fees and expenses charged by such
accounting firm.
Section 4.03. CONFIDENTIAL FINANCIAL INFORMATION. Atrix shall treat
all financial information subject to review under this Article IV as
confidential and shall cause its accounting firm to retain all such financial
information in confidence.
__________________________________
* Confidential treatment has been requested.
12
<PAGE> 19
ARTICLE V
PAYMENTS
Section 5.01. PAYMENT TERMS. Royalties shown to have accrued by each
Royalty Statement provided for under Article IV of this Agreement shall be due
and payable forty-five (45) days after the end of each calendar quarter
following the First Commercial Sale of the Product (the "Royalty Payment
Date"). Payment of royalties, in whole or in part, may be made in advance of
such due date.
Section 5.02. PAYMENT METHOD. Except as otherwise agreed between the
Parties, all royalties and other payments due hereunder shall be paid in U.S.
dollars and shall be originated from an United States bank located in the
United States and shall be made by bank wire transfer in immediately available
funds to such account as Atrix shall designate before such payment is due.
Section 5.03. LATE PAYMENTS. Unless otherwise provided in this
Agreement, upon the failure of Block to pay any amount due under this Agreement
within five (5) days after receipt of Notice by Block that such amount has
become due and payable and has not been paid, Block shall pay interest to Atrix
on such amount from the date such amount is due under this Agreement at a rate
per annum equal to the lesser of the prime rate of interest as reported by
Bank of America NOT&SA in San Francisco, California, from time to time, plus
two percent (2%), or the highest rate permitted by applicable law, calculated
on the number of days such payment is delinquent.
ARTICLE VI
ATRIX CO-MARKETING RIGHTS
Section 6.01. CO-MARKETING RIGHTS. Atrix may either directly or
through a third party:
(a) Co-market Atridox(TM) in the United States in the
event Block's annual unit sales of Atrido(TM) in the United States
during *.
(b) Co-market Atridox(TM) in any individual country in
Group I, II or III in which Block's sales of Atrido(TM) in such
country *. The unit target for each country is set forth in Schedule
6.01(b).
(c) Co-market Atrisorb(R) and Atrisorb(R) with
Doxycycline in the United States and Canada in the event Block's
combined annual units sales of Atrisor(R) and/or Atrisorb(R) with
Doxycycline during *.
__________________________________
* Confidential treatment has been requested.
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provided however, (i) in the event Block's combined annual Net Sales of the
Products in the United States has reached * under Section 3.03, Atrix shall not
have the right to co-market under paragraphs (a) or (c) above.
In the event that Unit sales on which Atrix has received royalties are
less than the minimum Units sales required by this Section 6.01 on a
product-by-product basis, Block shall have the right, but not the obligation,
to maintain exclusivity in the Territory on a product-by-product basis by
paying to Atrix the difference between the royalties due Atrix based on actual
Net Sales and the royalties which would have been due Atrix had Net Sales
attained the unit targets specified above plus *.
Section 6.02. REDUCTION IN PAYMENT. Subject to Section 6.01, in the
event Atrix elects to co-market a Product either directly or through a third
party, all payments with respect to that Product will terminate, including
without limitation, all payments for that particular Product for that
particular country, other than: (i) payment by Block to Atrix for purchase of
the Product; and (ii) payment of sums which are already due and payable.
Section 6.03. TRADEMARK AND TRADE DRESS. In the event Atrix elects
to co-market Atridox(TM) in the Territory, either directly or indirectly
through a third party, Atrix agrees, and will cause such third party, to use a
trademark and trade dress which are not confusingly similar to the trademark
and trade dress being used by Block for Atridox(TM) in the Territory.
ARTICLE VII
TERM AND TERMINATION
Section 7.01. TERM. This Agreement will take effect upon the
execution by both Parties (the "Effective Date") and will expire on a
product-by-product and a country-by-country basis upon the expiration of the
last applicable Patent or loss of patent protection for the Product in a given
country (the "Term").
Section 7.02. TERMINATION BY BLOCK. Block may terminate the
Agreement by Notice to Atrix as follows:
(a) at any time with or without cause upon 12 months
prior Notice to Atrix;
(b) at any time, with or without cause, upon twelve (12)
months' prior Notice to Atrix, its rights and obligations with regard
to a specific Product in a specific country;
(c) if Atrix shall commit any willful and material breach
of the provisions of this Agreement;
(d) if Atrix shall cease to manufacture or supply the
Products to Block pursuant to this Agreement, except as may be
provided for herein;
__________________________________
* Confidential treatment has been requested.
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provided however, that with respect to Sections 7.02(c) and (d) that: (i)
Block has first given Atrix notice specifying the details of the material
breach, and (ii) Atrix has not cured such material breach within ninety (90)
days of the effective date of Notice of the material breach.
Section 7.03. TERMINATION AFTER FIRST COMMERCIAL SALE. In the event
Block terminates this Agreement after the First Commercial Sale pursuant to
Section 7.02, Block shall be required to purchase from Atrix the Units
manufactured for Block in accordance with the Unit requirements forecasted
through the effective date of termination specified in the Notice to Atrix.
Section 7.04. TERMINATION BY ATRIX. Atrix may terminate this
Agreement by Notice to Block, upon any of the following conditions:
(a) if Block shall fail to make any payments to Atrix on
the date on which such payments are due hereunder and such failure
continues for more than ten (10) business days after Notice;
(b) if Block shall fail to deliver to Atrix a Royalty
Statement within forty-five (45) days after any Royalty Payment Date
and shall fail to cure such default within forty-five (45) days after
notice from Atrix with respect thereto;
(c) if Block shall make any willful and material
misrepresentation or false statement in any Royalty Statement;
(d) if Block shall commit any willful and material breach
of the provisions of this Agreement;
(e) if Block shall cease to offer the Product for
distribution to its customers, except as may be provided for herein;
(f) Subject to the provisions of Section 14.09(f), if
Block markets, distributes or sells a Competitive Product; or
(g) if Block does not accept the indication for the
Atridox(R) NDA within the time periods set forth in Section 3.02(a)(i)
and (ii), respectively, then Atrix may, at its sole option, terminate
this Agreement with respect to Atrido(TM);
provided however, that with respect to Sections 7.04(c), (d) and (f) that: (i)
Atrix has first given Block notice specifying the details of the material
breach, and (ii) Block has not cured such material breach within ninety (90)
days of the effective date of Notice of the material breach.
Section 7.05. EXHAUSTION OF INVENTORY. Notwithstanding the
termination of this Agreement for any reason, Block shall have the absolute
right to donate, upon Notice setting forth the quantity and recipient of the
donation, or sell in the ordinary course of business in the Territory, all
Units which Block has in inventory and which have been purchased in accordance
with Section 7.03.
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Section 7.06. TERMINATION UPON CERTAIN EVENTS. This Agreement may be
terminated by the Party specified below forthwith upon prior written Notice to
the other Party of the occurrence of either of the following events:
(a) by either Party upon a cessation of operations of the
other Party or the institution by or against such Party as debtor of
any proceeding (whether voluntary or involuntary) in bankruptcy or for
dissolution, liquidation, reorganization, arrangement or the
appointment of a receiver, trustee or judicial administrator (or the
equivalent thereof in the jurisdiction in question) or any other
proceeding under the law for the relief of debtors, if, in the case of
an involuntary proceeding, the same shall not have been dismissed or
stayed within thirty (30) days after its institution; or
(b) by either Party if the other Party makes an
assignment for the benefit of, or arrangement with, its creditors or
becomes unable to pay its debts as they become due.
A Party's failure to terminate this Agreement for any of the reasons
specified in this Section 7.06 shall not in any way be deemed a waiver of such
Party's rights in respect thereof or otherwise limit its rights to enforce the
obligations hereunder.
Section 7.07. EFFECT OF TERMINATION. The expiration or prior
termination of this Agreement for any reason shall not limit or otherwise
affect those provisions which by their terms or nature are to continue.
In the event of termination of this Agreement for any cause
whatsoever, at Block's option, Atrix will deliver to Block as soon as
practicable but in any event within thirty (30) business days of the date of
such termination any finished Product in good condition which shall then be in
the possession of Atrix and which shall be subject to a purchase order. If
requested by Block, any Product in the process of being manufactured shall be
finished by Atrix and delivered to Block as soon as practicable, and, in any
case, not later than sixty (60) business days after the effective date of such
termination.
Upon termination by Block and provided that the quantity of Units is
covered by the forecast as set forth in Section 9.06, Block will (a) pay Atrix,
at Atrix's actual cost, for all the raw and packing materials which Atrix has
purchased or produced exclusively for the production of the Product, and which
materials are still in good condition, and remain in Atrix's possession; (b)
have Atrix convert the raw material into finished Product and purchase the same
in accordance with Article IX; and (c) with respect to Development Expenses,
pay Atrix the lesser of (i) the balance of Block's share of Development
Expenses as of the date the Agreement terminates, or (ii) the amount of
Development Expenses that Atrix has paid as of the date the Agreement
terminates.
Section 7.08. RIGHTS AND OBLIGATIONS UPON TERMINATION.
(a) Subject to Section 7.05, upon termination of this
Agreement by either Atrix or Block, the licenses granted under Article
II of this Agreement shall terminate, and Block shall immediately
cease all distribution of the Products. Upon such
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termination, all rights and obligations of the Parties under this
Agreement shall cease except (i) those that by their terms survive
termination; and (ii) that Block shall remain obligated to make any
payment due or to become due under this Agreement, including without
limitation, Sections 8.03 and 8.04; provided, however, that this
Section shall not apply when this Agreement expires in accordance with
its terms.
(b) In the event Atrix shall cause this Agreement to be
terminated other than pursuant to its right of termination set forth
in this Article VII, Block shall have the right to purchase at
depreciated net book value the assets dedicated by Atrix to the
manufacture of the Products.
ARTICLE VIII
STEERING COMMITTEE AND DEVELOPMENTS
Section 8.01. ESTABLISHMENT OF STEERING COMMITTEE. Atrix and Block
shall create within thirty (30) business days after the Effective Date, a
steering committee (the "Steering Committee"). The activities of the Parties
under this Agreement shall be supervised by the Steering Committee only to the
extent set forth herein. The Steering Committee shall perform the following
functions:
(a) be responsible for overseeing any and all proposed
Improvements, Clinical Research Support and New Product concepts
(hereinafter referred to as a "Development" or the "Developments");
(b) coordinate and direct activities of the Parties to
develop and market Products hereunder;
(c) establish a subordinate governing structure to carry
out the provisions of this Agreement;
(d) establish minimally acceptable indications for NDA
Approval, as appropriate, for New Products; and
(e) perform such other functions as appropriate for the
purposes of this Agreement as determined by the Parties.
Section 8.02. COMMITTEE MEMBERS. The Steering Committee shall
consist of six (6) persons, three (3) to be appointed by each Party. The
Steering Committee may unanimously elect to delegate its power, or any portion
thereof, but not its obligation, to any officers or employees of either Party,
to any committee or to such other person or persons as the Steering Committee
may deem appropriate.
Section 8.03. APPROVAL OF DEVELOPMENTS.
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(a) All Developments conceived by Atrix will be presented
to Block for possible incorporation into the Agreement. Prior to
commencing implementation of such Developments, Atrix will present to
Block Atrix's best estimate of the development costs related thereto.
Block, in its sole discretion, will have sixty (60) days from the
submission of any Developments and the projected costs thereof, in
which to elect whether to include the additional Developments within
the scope of this Agreement.
(b) In the event Block elects to include a Development
within the scope of this Agreement, Block will reimburse Atrix for
expenses as set forth in Section 8.04.
(c) Atrix agrees that Block is not obligated to pursue or
participate in New Products during the first twelve (12) months
following the Effective Date and that Atrix will not present any New
Products to third parties during the first twelve (12) months
following the Effective Date. Thereafter Atrix will present New
Product ideas to the Steering Committee, along with a development plan
and budget for each New Product. If Block does not approve the
development plan and budget for each New Product, then Atrix shall
have the sole right to develop and market such New Product.
(d) The Steering Committee will review and monitor the
progress of all Developments. Where the Steering Committee finds that
true costs of a Development exceed the costs approved by Block, then
the Steering Committee must gain approval for additional funding from
Block or must modify the Development as required to meet the approved
budget. If the Steering Committee fails to obtain additional funding
from Block then the party executing the project under the Development
shall either incur the expense of the additional costs or reduce the
scope of the activities to stay within the approved budget. If
additional or subsequent changes to, modifications of or cancellation
of a Development are required for any reason, then the approval of the
Steering Committee must be obtained, including the approval by Block
of budgets thereby requiring additional funds.
(e) Notwithstanding anything herein to the contrary, in
the event Block elects to maintain exclusivity in the Territory by
paying the Exclusivity Shortfall Payment for a Product pursuant to
Section 6.01 hereof, from the date of such payment Atrix, shall not be
required to present products that compete with Products for which the
Exclusivity Shortfall Payment was made to Block or the Steering
Committee and Atrix will have the sole right to develop and market
such New Product; provided, however, that New Product projects in
process shall continue to be subject to the terms of this Agreement.
Section 8.04. PAYMENT OF DEVELOPMENT EXPENSES.
(a) Each party will pay * of the cost of all Developments
approved by Block (the "Development Expenses"). The Steering
Committee will solicit bids from Atrix and from third parties and will
determine which is the most appropriate and award the contract for the
Development to the successful bidder.
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(b) If Block elects not to reimburse Atrix for * of the
Development Expenses for a New Product, Atrix will have the right to
market such New Product to third parties unless Block is currently
supporting dental product research and development activities with
Atrix at the rate of at least * per year (total of all reimbursements
for Developments).
(c) Block's total reimbursement obligations for
Improvements and Clinical Research Support shall be limited to* during
the first 24 months from the Effective Date.
(d) All reimbursements will be paid by Block to Atrix
within thirty (30) days after the close of each calendar quarter.
Section 8.05. NEW PRODUCTS. If during the Term a New Product is
developed Atrix shall own the rights to such New Product and the Parties agree
to negotiate in good faith the terms and conditions of any agreement with
respect to such New Product.
Section 8.06. LOCATION OF MEETINGS. The meetings of the Steering
Committee shall be held at alternating locations at the principal business
offices of Atrix and Block, or at such other site as may be mutually convenient
and agreeable. Meetings may be held by telephone conference or by such other
means and at such places as accomplishes the objectives of this Agreement.
Section 8.07. FREQUENCY OF MEETING. The Steering Committee shall
meet on a monthly basis to review Developments. By mutual agreement of the
Parties, the meetings may be scheduled less frequently than monthly, but in no
event shall such meetings be held less frequently than quarterly. Irrespective
of the meeting schedule, either Party may call an emergency meeting on no less
than ten (10) business days notice as may be necessary to expedite the success
of the program.
Section 8.08. RESPONSIBILITY FOR REGULATORY MATTERS. Atrix shall be
solely responsible for making all necessary or desirable declarations, filings
(including, without limitation, the NDA and all supplements thereto and reports
thereunder) and registrations with, and obtaining all necessary or desirable
Governmental Approvals (including, without limitation, the FDA) relating to the
Product and the Units; provided, however, that Block shall have the right to
attend all meetings with the FDA or other similar Governmental Authority as a
silent observer and Atrix shall immediately provide to Block copies of all
correspondence and other documentation reflecting communications between Atrix
and the FDA or other similar Governmental Authority.
Section 8.09. RESOLUTION OF SCIENTIFIC DISPUTES. Notwithstanding the
provisions of Article XVII, in the event Block and Atrix are in good faith
unable to agree upon any aspect of the Developments, or any other scientific
matter, the dispute will be resolved by a three (3) member panel of independent
scientists. One member of that panel will be appointed by Atrix, one member
appointed by Block, and the third appointed by those two appointees. The
decision of the majority of that panel shall be binding upon both Atrix and
Block and shall be made
__________________________________
* Confidential treatment has been requested.
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within ninety (90) days from the submission of the dispute to the panel, except
for disputes arising out of Sections 3.02(a)(i) and 3.02(a)(ii) hereof.
Section 8.10. WRITTEN REPORTS. No less than every three (3) months
Atrix shall provide the Steering Committee with a written summary of any
results with respect to Developments. Such reports shall be utilized by the
Steering Committee to evaluate the degree of success of Developments, and to
determine the future direction and activities with respect to Developments.
Atrix and Block shall maintain the reports as Confidential Information. In
furtherance of the Steering Committee's review of Developments, Atrix and Block
shall make available at their offices for review by members of the Steering
Committee, during each of such Party's regular business hours and upon
reasonable Notice, true and complete copies of all records and test results,
including, without limitation, all clinical data in support of the safety and
efficacy of Developments, clinical testing results for all Developments to date
and status reports with respect to all submissions made to, and approvals,
notices or other responses received from, the FDA or other Governmental
Authorities.
Section 8.11. MATERIAL INFORMATION. Each Party shall immediately
notify the other by facsimile of any adverse reaction reports or other material
information concerning the Products.
Section 8.12. NO SOLICITATION OF EMPLOYEES. During the Term and for
a period of three (3) years thereafter, neither Party nor any of their
respective Affiliates shall, without the prior consent of the other Party,
solicit the employment of any Person who during the course of employment with
the other Party or any of its Affiliates was involved with activities under the
Agreement and who when solicited is a current employee of the other Party.
Section 8.13. USE OF CLINICAL RESEARCH. During the Term each Party
may grant to the other Party a royalty free license to use clinical research
and the results thereof created or used pursuant to Sections 8.03 and 8.04
outside the Territory.
Section 8.14. RIGHTS TO DEVELOPMENTS. In the event that any
invention, development or improvement (whether patentable or not) to the
Products is conceived, reduced to practice or produced by the Parties during
the course of this Agreement or as a result of either Party's work hereunder,
such invention, development or improvement to the Products shall be owned by
Atrix. Block shall cooperate with Atrix in obtaining patents on any such
invention, development or improvement. The expense of obtaining and
maintaining any such patent shall be borne by Atrix, subject to the provisions
of Section 3.07. If any such invention, development or improvement is useful
in the development, improvement or commercialization of Products in the
Territory, it shall be subject to the terms of this Agreement. Subject to the
provisions of Section 2.01(b), Atrix shall grant to Block a perpetual,
royalty-free, non-exclusive license to any such invention, development or
improvement in the Territory.
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ARTICLE IX
MANUFACTURE, SUPPLY AND PURCHASE OF PRODUCT
Section 9.01. PRODUCT REQUIREMENTS. Subject to the provisions of
this Article IX, Block shall purchase all requirements for the Products from
Atrix, and subject to the provisions of Article VI Atrix will supply the
Products within the Territory exclusively to Block.
Section 9.02. PRICE. Atrix shall sell, and Block shall purchase, the
Products at a price which shall be equivalent to *:
(a) * per Atridox(TM) Unit, which shall be reduced to *
per Atridox(TM) Unit in the event Atrix elects to co-market
Atridox(TM), or if Atrix elects to license a third party to co-market
Atridox(TM), then the price at which Block would purchase the Licensed
Product would be the lesser of (i) *, or (ii) *.
(b) * per Atrisorb(R) Unit, which shall be reduced to *
per Atrisorb(R) Unit in the event Atrix elects to co-market
Atrisorb(R), or if Atrix elects to license a third party to co-market
Atrisorb(R), then the price at which Block would purchase the Product
would be the lesser of (i) *, or (ii) *.
(c) * per Atrisorb(R) with Doxycycline Unit, which shall
be reduced to * per Atrisorb(R) with Doxycycline Unit in the event
Atrix elects to co-market Atrisor(R) with Doxycycline, or if Atrix
elects to license a third party to co-market Atrisorb(R) with
Doxycycline, then the price at which Block would purchase the Product
would be the lesser of (i) *, or (ii) *.
The lowest purchase price for the Products will be adjusted at the end
of each calendar year to reflect fifty percent (50%) of any change in COLA for
that calendar year. COLA means a Cost-of-Living Adjustment based on the
"Consumer Price Index for All Urban Consumers (Consumer Prices - All Urban
Consumers, 1982-84=100)" as published by the "Bureau of Labor Statistics of the
Department of Labor of the United States Department of Commerce." In the event
the base period for said Index ("1982-84=100") is changed, the Parties shall
make appropriate compensating adjustments in COLA calculations hereunder, if
necessary, to take such change into account. In the event said Index is
discontinued, the index published by the United States Government, or any
agency thereof, which most closely approximates such Index shall be
substituted.
Section 9.03. SHIPPING TERMS.
(a) During the term of this Agreement, Product will be
shipped to the location(s) in the United States designated by Block,
F.O.B. Fort Collins, Colorado. Block shall pay all costs of shipping
from Atrix's Fort Collins, Colorado facilities to locations directed
or designated by Block. Atrix shall use reasonable efforts to deliver
__________________________________
* Confidential treatment has been requested.
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Product on the dates specified by Block. Title to the Licensed
Product and the Units and all risk of loss and responsibility therefor
shall pass to Block upon delivery to the carrier designated by Block.
Any and all claims by or against carriers are the responsibility of
Block.
(b) During the term of this Agreement, Licensed Product
will be shipped to locations in Group I, II and III countries
designated by Block, C.I.F. Fort Collins, Colorado. Block shall pay
all costs of shipping from Atrix's Fort Collins, Colorado facilities
to locations directed or designated by Block. Block shall be
responsible for all actions necessary to obtain clearance to import
Product into the Territory. Atrix shall use reasonable efforts to
deliver Product on the dates specified by Block. Any and all claims
by or against carriers are the responsibility of Block. Title shall
pass to Block upon delivery at the destination designated by Block.
Section 9.04. PAYMENT DUE. Atrix will be paid net twenty (20) days
from receipt of an invoice from Atrix, said invoice shall not be dated or
transmitted earlier than the date of shipment of the Licensed Product to Block.
Section 9.05. FORECASTS. If Atrix is manufacturing Products for
Block, Block will provide Atrix with a twelve (12) month forecast of Block's
requirements of each Product, including Training Samples (as defined in Section
9.10). Such forecasts shall be provided on a quarterly basis, no less than
thirty (30) days prior to the beginning of each calendar quarter. Said
requirements will be based on standard production planning parameters including
but not limited to sales forecasts, sales demand forecasts, promotional
forecasts, inventory requirements, and the like. The first six (6) months of
the twelve (12) month forecast will be stated in monthly requirements. The
second six (6) months of the twelve (12) month forecast will be total
requirement by stock keeping unit. The first three (3) months of the twelve
(12) month forecast will be firm orders. The second three (3) months will be
allowed to be flexed by plus or minus twenty five (25) percent on a monthly
basis until fixed, not to exceed a total adjustment of fifty (50) percent of
the original quantity. The last six (6) months total quantities will be an
estimate and not binding. All orders will be for full batch quantities. It is
understood that Atrix will not maintain Product inventory in excess of the
forecast, but will produce Product upon receipt of that portion of Block's
forecasts that constitute firm orders. The above periods whether fixed or
flexible will be adjusted based upon existing lead times at time of start up.
Block will commit to carry sufficient inventory to allow for fluctuations in
sales demand so as to allow Atrix reasonable lead time to meet increased
demand.
The first forecast to include initial production requirements for
Atridox(TM) prior to NDA Approval and first year requirements will be submitted
to Atrix six (6) months prior to the projected NDA Approval date or as required
by longest lead time for either raw materials, packaging materials or process
lead time. Furthermore, at the expense and request of Block, Atrix shall begin
production of Atridox(TM) prior to the date of NDA Approval and shall store
Atridox(TM) at the Atrix establishment or under Atrix's control pending
approval. In such case, Block shall reimburse Atrix for Atrix's actual cost
and all other costs reasonably incurred by
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Atrix in producing and storing Atridox(TM), if such products are not
subsequently delivered to Block, but such reimbursement shall not include any
of the capital costs of Atrix's facility.
Section 9.06. SHIPMENT SUBJECT TO APPROVAL. All shipments and
deliveries of Units shall be accompanied by a Certificate of Analysis and shall
be subject to Block's inspection, testing, approval and acceptance within
thirty (30) days of delivery to the Block facility to which the shipment was
made. If Atrix does not receive written notice from Block within thirty (30)
days after any Product has been received by Block, then such Product shall be
deemed to have met the specifications. Upon receipt of any such written notice
of non-conformance, Atrix shall either acknowledge that the subject Product
does not meet the specifications or resample the lot or batch of the Product in
question and have such samples tested by an independent laboratory mutually
agreeable to the Parties. If such samples fail to meet the specifications,
then Atrix shall, at Block's option, either replace the non-conforming Licensed
Product at no additional cost to Block as soon as reasonably possible or refund
Block's payment for said non-conforming Product. Block shall, at any time
prior to shipment, have the right to inspect, upon reasonable notice during
normal business hours, Units in Atrix's facilities. Block's inspection under
this Section shall not affect Block's right to reject Units hereunder. Block
shall be entitled to reject any shipment, or portion thereof if Block
determines that such shipment or portion thereof fails to conform to the
specifications applicable to such shipment or portion thereof. Any shipment,
or portion thereof, rejected by Block shall be returned to Atrix, upon the
prior written authorization by Atrix, except where there is no bona fide
dispute, in which event Atrix shall assume the expenses of returning rejected
shipments or portions thereof and shall also assume the risk of loss during the
return of rejected shipments or portions thereof. The payment by Block of an
invoice for any shipment delivered at the Block facility to which the shipment
was made prior to actual inspection and acceptance of that shipment shall not
be deemed as an act of acceptance by Block.
Section 9.07. TITLE. Title to the Units and all the risk of loss or
damage thereto shall vest in Block upon delivery to Block in accordance with
the provisions in Section 9.04. In the event in a defect in quality, title to
the Units and all risk of loss or damage to the Units shall revert to Atrix
upon any particular shipment being returned to Atrix's facility.
Section 9.08. PRODUCT RECALL OR WITHDRAWAL. In the event that Atrix
or Block shall be required, or, in the exercise of their reasonable business
judgment, shall mutually agree to recall or withdraw (collectively, "Recall")
the Products, whether or not such Recall shall have been ordered or requested
by the FDA or any Governmental Authority, the following principles shall apply:
(a) if such Recall shall be due to tampering or other
cause, other than a manufacturer's defect, but not due to the
negligence or misconduct of Atrix or Block, then Block and Atrix shall
each bear fifty percent (50%) of the costs and expenses incurred by
Block in connection with such Recall, including, without limitation,
all product credits and returns, freight and shipping costs and
product disposal expenses;
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(b) if such Recall shall be due to manufacturer's defect
or the negligence or misconduct of Atrix, all such costs and expenses
shall be borne and paid solely by Atrix; and
(c) if such Recall shall be due to the negligence or
misconduct of Block, all such costs and expenses shall be borne and
paid solely by Block.
Section 9.09. TRAINING SAMPLES. Atrix shall supply to Block such
quantities of Units as Block may reasonably request to be used solely for
training purposes, which Units shall be designated as "training samples, for
demonstration purposes only, not for human use" ("Training Samples"), for so
long as Block retains exclusive marketing rights in the specific territory in
which Block either intends or actually uses such Training Samples. Training
Samples shall be sold by Atrix to Block at the lowest purchase price specified
in Section 9.02; provided, however, that Training Samples unfit for sale shall
be sold by Atrix to Block at fifty percent (50%) of the lowest purchase price
specified in Section 9.02. Block agrees not to use or sell the Training
Samples for any purpose other than as set forth in this Section.
Section 9.10. PURCHASE ORDERS. Purchase orders, purchaser order
releases, confirmations, acceptances, advise and similar documents submitted by
either Party in conducting the activities contemplated under this Agreement are
for administration purposes only and shall not add to or modify the terms of
the Agreement. To the extent of any conflict or inconsistency between this
Agreement and any such document, the terms of this Agreement shall govern.
ARTICLE X
ALTERNATE MANUFACTURE AND SUPPLY OF PRODUCT
Section 10.01. INSPECTION AND OBSERVATION. Block shall have the
right, during Atrix's regular business hours and upon fifteen (15) business
days prior Notice, to inspect the manufacturing, laboratory and warehousing
facilities used by Atrix in the manufacturing, storage, testing, shipping or
receiving of the Units or their components. Such inspections may include cGCPs,
cGLPs and cGMPs inspections and systems audits. Under normal and standard
operating conditions, Block shall have the right to conduct no more than two
such inspections in any calendar year. Upon the declaration of an emergency by
the Steering Committee or a material breach by Atrix, if such breach has not
been cured, Block shall have the right to inspect such facilities on an
"as-needed" basis; provided, that such inspections shall not interfere with
Atrix's performance of its duties under this Agreement or its normal
operations. In the event that Atrix shall receive notice of a pending
inspection of such facilities by a Governmental Authority, and such inspection
shall be specifically related to the Products or the Units, Atrix shall
immediately notify Block of such inspection and inform such Governmental
Authority that Block may desire to be present at such inspection; provided that
Block's right to be present is subject to approval by such Governmental
Authority and subject to Block being available at the time and date established
by such Governmental Authority, Atrix shall provide Block with true and
complete copies of any reports received by Atrix in connection with any such
inspection.
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Section 10.02. UNABLE OR UNWILLING TO FILL ORDERS.
(a) Atrix shall immediately notify Block if Atrix is
unable or unwilling to fill any order placed by Block pursuant to
Article IX. Upon receipt of such notice, Block shall be entitled to
manufacture the specific Product or to have the specific Product
manufactured by a third party of Block's choosing. Atrix will provide
Block with all technical assistance, for the specific Product which
Atrix is unable or unwilling to fill any order, which Block deems
necessary to enable Block to commence manufacturing without delay
subject to Section 10.03(d). When Atrix is again able or willing to
supply the specific Product to Block according to this Agreement,
Atrix will regain its exclusive right to manufacture and supply the
specific Product to Block.
Notwithstanding the foregoing, Atrix shall not be deemed to be
unable or unwilling to fill any order placed by Block as
follows:
(i) if Atrix's inability to fill any order arises
as a result of a fifty percent (50%) increase in Block's order
over Block's prior forecast; or
(ii) in the event that Atrix must purchase
additional equipment or construct a new facility in order to
expand its capacity in order meet purchase orders hereunder,
Atrix will be deemed to have satisfied this paragraph by
placing a purchase order for such equipment or signing a
contract for such construction within sixty (60) days of
Atrix's receipt of Block's purchase order showing quantities
in excess of Atrix's capacity; provided that Atrix diligently
pursues and completes within a reasonable time thereafter such
purchase or construction.
(b) Subject to Atrix's prior written approval, such
approval not to be unreasonably withheld, Block shall have the right
to commit to a specified period of time for a third party to
manufacture and Block shall continue to purchase the specific Product
for which Atrix was unable or unwilling to fill any order from such
third party manufacturer for the balance of the term and thereafter
Atrix's exclusive right to manufacture and supply such Product to
Block shall be restored. Block shall use its good faith best efforts
to limit such agreement to as short a period of time as commercially
reasonable.
Section 10.03. ESCROW OF KNOW-HOW AND PROPRIETARY INFORMATION.
(a) Atrix shall, upon execution of this Agreement,
promptly document and videotape all technology, Know-How, standard
operating procedures and any other information that is necessary (the
"Documented Technology") to enable Block or Block's designee to
manufacture, produce, test and qualify the Product and the Units for
sale and shall deliver such Documented Technology within ninety (90)
business days from the Effective Date to an escrow agent mutually
acceptable to the Parties (the "Escrow Agent"), to be held in escrow,
in accordance with an Escrow Agreement in the form of Exhibit 10.03
attached hereto (the "Escrow Agreement"). Any material Improvements
to such technology and Know-How shall be documented by Atrix within
forty-five (45)
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business days of such Improvements being made and shall be promptly
delivered to the Escrow Agent to be held in escrow in accordance with
the Escrow Agreement, and shall be deemed part of the Documented
Technology upon receipt by the Escrow Agent.
(b) In the event Atrix is unable or unwilling to supply
Product to Block in the amounts or at the times requested by Block in
accordance with the procedures set forth above in Section 9.06 for any
reason (including, but not limited to, a Force Majeure) for more than
sixty (60) days after Atrix's receipt of Notice from Block of an
unacceptable sufficiency of supply, Block or Atrix may instruct the
Escrow Agent to release the Documented Technology to Block in
accordance with and subject to the terms of the Escrow Agreement and
Block shall have a limited non-exclusive license to manufacture, have
manufactured by a third party, and use the Know-How, Proprietary
Information and practice the Patent to manufacture the Product and the
Units using the Documented Technology.
(c) Block hereby agrees that it shall require any Person
to whom it releases the Documented Technology for purposes of
manufacturing the Product or the Unit hereunder to agree in writing to
manufacture Product or the Unit only for sale to Block and that it
will keep the Documented Technology confidential to the same extent
provided in Article XVIII hereof.
(d) In the event Atrix resumes its ability or willingness
to supply the Product or the Unit in accordance with Section 10.02,
Atrix shall notify Block thereof and such limited non-exclusive
license shall terminate automatically upon the expiration (or earlier
termination without penalty to Block) of any supply agreement then in
effect, if any, between Block and a third party with respect to the
manufacture of the Product or the Units. Promptly upon termination of
such limited non-exclusive license, Block shall return all Documented
Technology and any copies thereof to the Escrow Agent.
Section 10.04. ROYALTY DUE. In the event Block manufactures the
Product, or contracts with a third party to have the Product manufactured on
behalf of Block, pursuant to this Article X, Block shall continue to pay to
Atrix royalties under Section 3.04 hereof.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF ATRIX
Section 11.01. CORPORATE EXISTENCE. Atrix is a corporation duly
incorporated and validly existing under the laws of the State of Delaware and
has the corporate power to own, license or lease its properties and assets and
to carry on its business as now conducted Atrix is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the conduct or nature of Atrix's business or the ownership or leasing
of its properties or assets requires it to be so qualified, admitted or
otherwise authorized.
Section 11.02. AUTHORIZATION. Atrix has full corporate power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. Atrix has duly
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authorized the execution and delivery of this Agreement and the transactions
contemplated hereby, and no other corporate action, is necessary to authorize
this Agreement and the transactions contemplated hereby. This Agreement has
been duly executed and delivered by a duly authorized officer of Atrix and
constitutes the valid and binding obligation of Atrix, enforceable in
accordance with its terms, except that enforceability may be limited by general
principles of equity and the exercise of judicial discretion in particular
cases. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in a
breach of the terms or conditions of, or constitute a default under, or an
event which with notice or lapse of time or both would become a default, or
violate, or require, as the case may be: (a) any provision of any law,
regulation or ordinance, (b) the Certificate of Incorporation or Bylaws of
Atrix, (c) any agreement, lease, mortgage or other instrument or undertaking,
to which Atrix is a party or by which it or its property or assets is or may be
bound or affected or (d) any judgment, order, writ, injunction or decree of any
court, administrative agency or governmental body.
Section 11.03. PRODUCT TO MEET SPECIFICATIONS. All Units delivered
to Block under this Agreement shall, at the time of delivery to Block be
guaranteed to meet the specifications for the Product by the relevant
registration and marketing approvals for the Products granted in the Territory
to the extent such specifications are indicated or referenced in said granting
registration and approval and be manufactured and tested in accordance with the
applicable NDA or 510(k), cGCPs, cGLPs, cGMPs and other applicable Governmental
Approvals.
Section 11.04. PRODUCT NOT MISBRANDED OR ADULTERATED. All Product
delivered to Block under this Agreement shall, at the time of delivery to Block
be guaranteed not to be misbranded or adulterated within the then current
meaning of the Act or any other Laws.
Section 11.05. FULL COMPLIANCE. All Product delivered to Block under
this Agreement shall, at the time of delivery to Block be in compliance with
all applicable Laws.
Section 11.06. GOOD, USABLE, SALEABLE AND MERCHANTABLE. All Product
delivered to Block under this Agreement shall, at the time of delivery to
Block, be in good, salable, usable and merchantable condition.
Section 11.07. NO PROCESS ALTERATIONS. Atrix shall not, without
prior written Notice to Block, modify, alter, amend, vary or otherwise change
any (a) manufacturing, processing or testing procedures, (b) packaging or raw
material specifications, or (c) source of any ingredient.
Section 11.08. PATENTS, KNOW-HOW AND PROPRIETARY INFORMATION. Atrix
is: (a) the owner of, with all right, title and interest in and to, the
Patents, Know-How or Proprietary Information and the Product and has the right
to the use thereof; (b) is not infringing any of the rights of third parties
concerning any Patent, Know-How or Proprietary Information, nor is Atrix aware
of any facts on which such infringement can be based; and (c) is not a party to
any agreement or license with any other party concerning the Patents or the
Product, except as specifically listed on Schedule 11.08.
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Section 11.09. PENDING LITIGATION AND OTHER PROCEEDINGS. There are
no legal, administrative, arbitration or other proceeding or governmental
investigation pending or, to the best of Atrix's knowledge, threatened against
or affecting Atrix relating to the Product or the transactions contemplated
hereby, and to the best of Atrix's knowledge there has not occurred any event
nor are there any facts upon which any such proceedings or investigations can
be based.
Section 11.10. SETTLED LITIGATION AND OTHER PROCEEDINGS. Atrix has
not settled any material legal, administrative, arbitration or other proceeding
or governmental investigation involving the Patents, Proprietary Information,
Know-How or the Product or the transactions contemplated hereby. Atrix is not
subject to, nor is there outstanding, any material judgment, award, order,
writ, injunction or decree of any court, administrative agency, governmental
body or arbitration tribunal which relate to the Patents or the Product or the
transactions contemplated hereby.
Section 11.11. PATENT AND PRODUCT RELATED FILES. Block has been
provided with access to all Atrix files relating to: (a) recalls, complaints,
correspondence regulatory letters, claims or other regulatory actions ordered
by any federal, state or local agency with respect to the Product; (b) all
litigation or material claims against Atrix seeking damages for injuries
resulting from the manufacture, sale or use of the Patents or the Product; and
(c) all litigation or material claims against Atrix seeking damages or
equitable relief concerning or relating to the Patent or the Product. To the
best of Atrix's knowledge, all of Atrix's files referred to in this Section
11.11 are maintained by Atrix in all material respects in accordance with all
Laws and have been maintained by Atrix in the ordinary course of Atrix's
business.
Section 11.12. NO FINDER FEE DUE. There are no investment bankers,
brokers, finders or other intermediaries which have been retained by, or are
authorized to act on behalf of, Atrix who will be entitled to any fee or
commission from Block upon the consummation of the transactions contemplated
hereby. With respect to any compensation due any investment bankers, brokers,
finders or other intermediaries which have been retained by, or are authorized
to act on behalf of Atrix, such compensation shall be paid by Atrix. Atrix
agrees to indemnify and hold Block harmless from all liabilities, costs and
expenses, including attorney fees, incurred by Block as a result of any claim
made against Block by or on behalf of any third party, for any fee, commission
or other form of compensation allegedly due such claimant as a result of the
execution of this Agreement or any transaction contemplated hereunder.
Section 11.13. NO ENCUMBRANCES. The Atrisor(R) trademark is free and
clear of all mortgages, liens, pledges, security interests, charges, claims,
restrictions and other encumbrances of any nature whatsoever.
Section 11.14. ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Atrix in this Agreement and the Schedules attached hereto
are true, correct and complete in all respects and do not contain and will not
contain as of the Effective Date, any statement which is false or misleading
with respect to any material fact.
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ARTICLE XII
REPRESENTATIONS AND WARRANTIES OF BLOCK
Section 12.01. CORPORATE STANDING. Block is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New Jersey and has the corporate power to own or lease its properties and
assets and to carry on its business as now being conducted. Block is duly
qualified, admitted or otherwise authorized to transact business and in good
standing as a foreign corporation in all jurisdictions in which the conduct or
nature of Block's business or the ownership or leasing of its properties or
assets requires it to be so qualified, admitted or otherwise authorized.
Section 12.02. AUTHORIZATION. Block has full corporate power and
authority to execute and deliver this Agreement, carry out the transactions
contemplated hereunder, and promote, market and sell the Product as of the
Effective Date. The Executive Committee of the Board of Directors of Block has
duly authorized the execution and delivery of this Agreement and the
transactions contemplated hereby, and no other corporate action on the part of
Block is necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly executed and delivered by a
duly authorized officer of Block and constitutes the valid and binding
obligation of Block, enforceable in accordance with its terms, except that
enforceability may be limited by general principles of equity and the exercise
of judicial discretion in particular cases. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in a breach of the terms or conditions of,
or constitute a default under, or an event which with notice or lapse of time
or both would become a default, or violate, or require, as the case may be, (a)
any provision of any law, regulation or ordinance, (b) the Certificate or
Articles of Incorporation or Bylaws of Block, (c) any agreement, lease,
mortgage or other instrument or undertaking, oral or written, to which Block is
a party or by which it or any of its properties or assets is or may be bound or
affected, (d) any judgment, order, writ, injunction or decree of any court,
administrative agency or governmental body or (e) any action of or by, or
filing with, any governmental body, agency or official.
Section 12.03. FINDERS' FEE. There are no investment bankers,
brokers, finders or other intermediaries which have been retained by, or are
authorized to act on behalf of, Block who will be entitled to any fee or
commission from Atrix or any of its Affiliates upon consummation of the
transactions contemplated hereby. With respect to any compensation due any
investment bankers, brokers, finders or other intermediaries which have been
retained by, or are authorized to act on behalf of Block, such compensation
shall be paid by Block. Block agrees to indemnify and hold Atrix harmless from
all liabilities, costs and expenses, including attorney fees, incurred by Atrix
as a result of any claim made against Atrix by or on behalf of any third party,
for any fee, commission or other form of compensation allegedly due such
claimant as a result of the execution of this Agreement or any transaction
contemplated hereunder.
Section 12.04. LITIGATION AND COMPLAINTS. There are no legal,
administrative, arbitration or other proceeding or governmental investigation
pending or, to the best of Block's knowledge, threatened against or affecting
Block relating to the transactions contemplated hereby, and to the
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best of Block's knowledge there has not occurred any event nor are there any
facts upon which any such proceedings or investigations can be based.
Section 12.05. COMPLIANCE. Block shall comply with all applicable
Laws and Governmental Authorities and Governmental Approvals affecting the use,
possession, detailing, distribution, advertising and all forms of promotion in
connection with the sale and distribution of the Licensed Product and the
Units.
Section 12.06. CONTRACTUAL ABILITY. Block has the right to be
granted the license purported to be granted under this Agreement and has made
no commitments inconsistent with he grant of such license or this Agreement.
Section 12.07. ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Block in this Agreement and the Schedules attached hereto
are true, correct and complete in all material respects and do not contain, and
will not contain as of the date hereof, any statement which is false or
misleading with respect to any material fact.
ARTICLE XIII
COVENANTS OF ATRIX
Section 13.01. MANUFACTURING CAPABILITY. Atrix shall maintain
sufficient manufacturing capabilities, including qualifying its pilot facility
located in Fort Collins, Colorado as an alternate manufacturing site, and a
sufficient stock of the necessary raw materials packaging, labeling, inserts
and work-in-process to enable it to meet Block's anticipated demand for the
Product.
Section 13.02. DISCLOSURE OF SPECIFICATIONS AND TEST METHODS. Atrix
shall disclose to Block the test methods and assays to allow Block to perform
its own quality checks and testing of the Product and the Units.
Section 13.03. SAMPLING AND TESTING. All components, ingredients and
raw materials used in the manufacturing and packaging of the Products will be
sampled and tested by Atrix in accordance with the NDA, cGLPs and cGMPs.
Section 13.04. USE OF BLOCK TRADEMARKS. Atrix shall not make any use
of or reference any trademark of Block without the prior written approval of
Block.
Section 13.05. LIABILITY INSURANCE. Atrix shall maintain in full
force and effect (including necessary renewals thereof), or if necessary
obtain, product liability insurance coverage in the amount of * per occurrence
covering Product with respect to any occurrence or event. Atrix shall have
Block named on such policies as an additional insured as Block's interests may
appear.
__________________________________
* Confidential treatment has been requested.
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Section 13.06. ACCESS TO BOOKS AND RECORDS. Atrix shall permit
Block, at Block's expense and during normal business hours, to exercise the
inspection rights under Section 10.01.
Section 13.07. INDEMNIFICATION. Atrix shall indemnify, defend and
hold Block harmless from and against any and all liabilities, claims, demands,
damages, costs, expenses (including attorneys' fees) or money judgments
incurred by or rendered against Block which arise out of:
(a) the negligence or misconduct of Atrix in connection
with any aspect of Atrix's manufacturing, testing, qualifying,
packaging, labeling, warehousing or shipping of the Product or the
Units;
(b) the failure by Atrix, or by any third party acting on
behalf of Atrix, to manufacture and test the Product or the Units in
accordance with the NDA, cGCPs, cGLPs or cGMPs;
(c) the withdrawal, removal or Recall as set forth in
Section 9.10 of the Product or the Units from the market, whether
voluntarily or involuntarily or deemed necessary by Block or Atrix and
which is due to the negligence or misconduct of Atrix;
(d) personal injury or property damage attributable to
the use of the Products or the Units and which is related to the
negligence or misconduct of Atrix; or
(e) the material breach of any or all of the
representations or warranties set forth herein.
ARTICLE XIV
COVENANTS OF BLOCK
Section 14.01. DOMESTIC A&S SPENDING LEVELS. Block's total A&S
spending level in the United States ("Domestic A&S") shall:
(a) for Atridox(TM)be no less than * of Block's Net Sales
of Atridox(TM)in the United States through the first anniversary of
the First Commercial Sale by Block of Atridox(TM)in the United States;
and commencing with the first full calendar quarter following the
first anniversary of the First Commercial Sale each year thereafter
the lesser of *.
(b) for Atrisorb(R) be no less than * of Block's Net
Sales of Atrisorb(R) in the United States through the first
anniversary of the First Commercial Sale by Block of Atrisor(R), in
the United States; and commencing with the first full calendar quarter
following the first anniversary of the First Commercial Sale each year
thereafter the lesser of *.
__________________________________
* Confidential treatment has been requested.
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(c) for Atrisorb(R) with Doxycycline be no less than * of
Block's Net Sales of Atrisorb(R) with Doxycycline in the United States
through the first anniversary of the First Commercial Sale by Block of
Atrisorb(R) with Doxycycline, in the United States; and commencing
with the first full calendar quarter following the first anniversary
of the First Commercial Sale each year thereafter the lesser of *.
(d) Atrix shall have the right to review Block's plan for
A&S spending levels prior to the implementation thereof; provided,
however that final approval and implementation of such plan shall be
Block's responsibility.
Section 14.02. INTERNATIONAL A&S SPENDING LEVELS. International A&S
spending levels for Atrido(TM) in each country, on a country-by-country basis,
shall be equal to the lesser of * of Net Sales of Atridox(TM) in each country,
on a country-by-country basis or an amount to be determined by indexing * to
the ratio of the GNP of the United States to the GNP in each country on a
country-by-country basis ("International A&S").
Section 14.03. VARIANCES. *
Section 14.04. CASH ALTERNATIVES. *
Section 14.05. MINIMUM SIZE OF DETAIL FORCE. Within six (6) months
of Block's receipt of notice from Atrix of the issuance by the FDA of the
Approval Letter for Atridox(TM), Block will have a Dental Detail Force of no
less than * calling on Dentists in the United States.
Section 14.06. DOMESTIC DETAIL CALLS.
(a) Atrisorb(R) will be the subject of * Detail Calls in
the United States during the twelve (12) month period commencing with
the Effective Date and ending on the first (1st) anniversary of the
Effective Date;
(b) Atrisorb(R) with Doxycycline will be the subject of *
Detail Calls in the United States during the twelve (12) month period
beginning within 120 days of receipt of a Clearance Letter; and
(c) Atridox(TM) will be the subject of * Detail Calls in
the United States during the twelve (12) month period beginning within
120 days of receipt of a NDA.
Section 14.07. ACCESS TO BOOKS AND RECORDS. Upon reasonable notice,
Block shall permit Atrix, at Atrix's expense and during normal business hours,
to inspect all financial records that relate to the Product and this Agreement;
provided, however, that with respect to Royalty Statements, Atrix's inspection
rights shall be as described in Article IV.
__________________________________
* Confidential treatment has been requested.
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Section 14.08. INDEMNIFICATION. Block shall indemnify, defend and
hold Atrix harmless from and against any and all liabilities, claims, demands,
damages, costs, expenses (including attorneys' fees) or money judgments
incurred by or rendered against Atrix which arise out of:
(a) the negligence or misconduct of Block in connection
with any aspect of the manufacture, testing, qualifying, packaging,
labeling, warehousing, shipping, detailing, distribution or sale of
the Products or the Units;
(b) the failure by Block, or by any third party acting on
behalf of Block, to manufacture and test the Products or the Units in
accordance with the NDA, cGCPs, cGLPs or cGMPs;
(c) the withdrawal, removal or Recall as set forth in
Section 9.10 of the Products or the Units from the market, whether
voluntarily or involuntarily or deemed necessary by Atrix or Block and
which is due to the negligence or misconduct of Block;
(d) personal injury or property damage attributable to
the use of the Product or the Units and which is related to the
negligence or misconduct of Block; or
(e) the material breach of any or all of the
representations or warranties set forth herein.
Section 14.09. NO SALE OF COMPETITIVE PRODUCTS. *
Section 14.10. MARKETING EXPENSES. Block shall be solely responsible
for the cost and implementation of all marketing, sales, promotional and
related activities concerning the marketing, sale and promotion of the
Products.
Section 14.11. BEST EFFORTS. Block will use its reasonable best
efforts in marketing the Products in the Territory. Block shall comply with
all applicable laws and regulations, including, without limitation, regulations
relating to the export, import, promotions and sale of the Products and shall
as soon as practicable after the end of each calendar year, but in no event
later than forty-five (45) days after the end of each calendar year, provide
Atrix with a marketing summary report the contents of which will be determined
by Block but which will at a minimum enable Atrix to confirm Block's
obligations under this Agreement. Block agrees that it will not sell the
Products outside the Territory and agrees to make all reasonable efforts to
prevent shipment of the Licensed Products sold in the Territory to points
outside the Territory.
ARTICLE XV
INDEMNIFICATION
Section 15.01. BLOCK INDEMNIFIED BY ATRIX. Atrix shall indemnify and
hold Block harmless from and against any liabilities or obligations, damages,
losses, claims, encumbrances,
__________________________________
* Confidential treatment has been requested.
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costs or expenses (including attorneys' fees) (any or all of the foregoing
herein referred to as "Loss") insofar as a Loss or actions in respect thereof,
whether existing or occurring prior to, on or subsequent to the date hereof,
arises out of or is based upon (a) any misrepresentation (or alleged
misrepresentation) or breach (or alleged breach) of any of the warranties,
covenants or agreements made by Atrix in this Agreement; (b) Atrix's ownership,
use or operation of the Product or the Patents, or manufacture, packaging or
sale, distribution or promotion of the Product prior to the Effective Date; (c)
all Product which is identifiable as having been manufactured by Atrix; or (d)
for any and all losses incurred by Block due to the inability of Atrix to
deliver the Product in accordance with the procedure set forth in Section 9.07.
Section 15.02. ATRIX INDEMNIFIED BY BLOCK. Block shall indemnify and
hold harmless Atrix from and against any Loss insofar as such Loss or actions
in respect thereof occurs subsequent to the Effective Date, whether existing or
occurring prior to, on or subsequent to the date hereof, arises out of or is
based upon (a) any misrepresentation (or alleged misrepresentation) or breach
(or alleged breach) of any of the warranties, covenants or agreements made by
Block in the Agreement; (b) Block's manufacture, packaging or sale,
distribution or promotion of the Product after the Effective Date; (c) any
purchase or use by third parties after the Effective Date of the Product to be
acquired by Block in connection herewith; or (d) all Product which is
identifiable as having been manufactured by Block, or by a third party for
Block.
Section 15.03. THRESHOLD FOR CLAIMS. No individual claim for less
than two thousand five hundred dollars ($2,500) shall be permitted and no claim
for indemnification shall be permitted unless and until, and only to the extent
that, the aggregate of the amount for which indemnification is claimed exceeds
five thousand dollars ($5,000).
Section 15.04. PROMPT NOTICE REQUIRED. No claim for indemnification
hereunder shall be valid unless notice of the matter which may give rise to
such claim is given in writing by the indemnitee (the "Indemnitee") to the
persons against whom indemnification may be sought (the "Indemnitor") as soon
as reasonably practicable after such Indemnitee becomes aware of such claim,
provided that the failure to notify the Indemnitor shall not relieve it from
any liability which it may have to the Indemnitee otherwise than under this
Article XV. Such notice shall state that the Indemnitor is required to
indemnify the Indemnitee for a Loss and shall specify the amount of Loss and
relevant details thereof. The Indemnitor shall notify Indemnitee no later than
sixty (60) days from such notice of its intention to assume the defense of any
such claim. In the event the Indemnitor fails to give such notice within that
time the Indemnitor shall no longer be entitled to assume such defense.
Section 15.05. INDEMNITOR MAY SETTLE. The Indemnitor shall at its
expense, have the right to settle and defend, through counsel reasonably
satisfactory to the Indemnitee, any action which may be brought in connection
with all matters for which indemnification is available. In such event the
Indemnitee of the Loss in question and any successor thereto shall permit the
Indemnitor full and free access to its books and records and otherwise fully
cooperate with the Indemnitor in connection with such action, provided that
this Indemnitee shall have the right fully to participate in such defense at
its own expense. The defense by the Indemnitor of any
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such actions shall not be deemed a waiver by the Indemnitor of its right to
assert a claim with respect to the responsibility of the Indemnitor with
respect to the Loss in question. The Indemnitor shall have the right to settle
or compromise any claim against the Indemnitee without the consent of the
Indemnitee provided that the terms thereof: (a) provide for the unconditional
release of the Indemnitee; (b) require the payment of compensatory monetary
damages only; and (c) expressly state that neither the fact of settlement nor
the settlement agreement shall constitute, or be construed or interpreted as,
an admission by the Indemnitee of any issue, fact, allegation or any other
aspect of the claim being settled. No Indemnitee shall pay or voluntarily
permit the determination of any liability which is subject to any such action
while the Indemnitor is negotiating the settlement thereof or contesting the
matter, except with the prior written consent of the Indemnitor, which consent
shall not be unreasonably withheld or delayed. If the Indemnitor fails to give
Indemnitee notice of its intention to defend any such action as provided
herein, the Indemnitee involved shall have the right to assume the defense
thereof with counsel of its choice, at the Indemnitor's expense, and defend,
settle or otherwise dispose of such action. With respect to any such action
which the Indemnitor shall fail to promptly defend, the Indemnitor shall not
thereafter question the liability of the Indemnitor hereunder to the Indemnitee
for any Loss (including counsel fees and other expenses of defense).
ARTICLE XVI
PATENTS AND TRADEMARKS
Section 16.01. MAINTENANCE OF PATENTS. Atrix shall, at Atrix's
expense, comply with all necessary administrative formalities to maintain the
Patents, provided however; that upon written request by Atrix, Block shall
provide such assistance as may be necessary to enable Atrix to comply with the
administrative formalities necessary to maintain any Patent.
Section 16.02. FILING OF ADDITIONAL PATENT APPLICATIONS. In the
event the Steering Committee determines that additional patents for the
Products are desirable in countries in the Territory for which Block has a
License, but Atrix refuses to file the necessary applications, Block may
prepare, file and prosecute such patent applications in Block's name and at
Block's own expense. Atrix shall cooperate with Block and shall take all
necessary steps to obtain the cooperation of employees and former employees of
Atrix. Block shall own any patent which issues as the result of an application
filed under this Section 16.02.
Section 16.03. COOPERATION. Each Party shall make available to the
other Party or its authorized attorneys, agents or representatives, its
employees, agents or consultants necessary or appropriate to enable the
appropriate Party to file, prosecute and maintain patent applications for a
period of time sufficient for such Party to obtain the assistance it needs from
such personnel. Where appropriate, each Party shall sign or cause to have
signed all documents relating to said patent or patent applications at no
charge to the other Party.
Section 16.04. ATRIX TO PROSECUTE INFRINGEMENT. During the Term,
each Party shall give notice to the other of any third party act which may
infringe the Patents. Atrix shall, at its sole expense, prosecute the judicial
or administrative proceedings against such third party
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infringement. Block shall, at no cost or expense to Block, provide such
assistance and cooperation as may be necessary to successfully prosecute any
action against third party infringement.
Section 16.05. INFRINGEMENT CLAIMED BY THIRD PARTIES. In the event a
third party commences, or threatens to commence, a judicial or administrative
proceeding against a Party to this Agreement and such proceeding pertains to a
Patent, the Party against whom such proceeding is threatened or commenced shall
give prompt notice to the other Party. The Parties agree to confer together in
such event and consult with one another with respect to the action to be taken.
Section 16.06. TRADEMARKS. The Products shall be sold in the
Territory under trademarks owned by Block.
Section 16.07. MARKETING AND INSTRUCTIONAL MATERIALS.
(a) Instructional Materials. Atrix shall cooperate with
Block in the creation of instructional materials for the customers of
Block to enable the customers of Block to use the Products correctly.
The copyright for all such materials shall be owned exclusively by
Block. Upon (i) termination of this Agreement (ii) breach or default
by Block under this Agreement or (iii) in the event, pursuant to the
terms of this Agreement, Atrix has the right to manufacture and sell
the Products to persons other than Block, then to the extent required,
Block hereby grants a royalty-free license to Atrix under such
copyrighted materials in order that Atrix may use the substance of
such materials (other than any tradename, trademark or similar device)
for use in instructional materials accompanying the Products. This
grant shall only be effective upon (a) or (b) hereof and not upon the
expiration of this Agreement according to its terms. In addition,
Block grants Atrix a royalty free license under such copyrighted
materials in order that Atrix may use such materials in those
countries in the Territory in which Block has not exercised its option
and in all other countries outside of the Territory.
(b) Marketing Materials. Block agrees that Atrix may use
any and all marketing, promotional and advertising materials
("Marketing Materials") created or used by Block in marketing or
promoting the Products in those countries in the Territory in which
Block has not exercised its option and in all other countries outside
of the Territory. All Marketing Materials will be sold by Block to
Atrix at actual cost plus ten percent (10%). Atrix agrees that it
will not use Marketing Materials in any country in which Block has
exclusive rights to sell the Product.
Section 16.08. PUBLICATION. The Parties recognize the importance of
publishing the information developed in the studies undertaken by the Parties
under the provisions of this Agreement. Therefore, the non-publishing Party
will endeavor to provide the publishing Party with its response at the
publishing Party's request for consent to publish any paper, abstract or
presentation within thirty (30) calendar days of receipt of such request. The
failure of the non- publishing Party to respond to such request within such
thirty (30) days shall be deemed to be an
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<PAGE> 43
approval of such request and the publishing Party shall then be free to
disclose such information, paper, abstract or presentation.
ARTICLE XVII
DISPUTE RESOLUTION
Section 17.01. DISPUTES. Except for scientific disputes involving
Developments and other disputes pertaining to the process necessary to obtain
NDA Approval or other Governmental Approval, which shall be resolved in
accordance with the provisions of Section 8.10, all other disputes relating to
or arising out of this Agreement or its subject matter shall be resolved as set
forth in this Article XVII.
Section 17.02. DEMAND FOR A MEETING. Notice of demand for a meeting
of the Parties to discuss and settle a dispute(s) ("Notice of Meeting") may be
given by either Atrix or Block. Such notice shall be in writing, and shall set
a date no more than ten (10) business days from the date of the Notice of
Meeting on which the Parties shall meet during normal business hours in Chicago
or at such other site mutually agreed to by the Parties. If within five (5)
business days after the date of the meeting the Parties have not resolved their
dispute(s) then the Parties shall proceed as provided below. Notwithstanding
anything in this Article XVII to the contrary, Block and Atrix shall have the
ability to seek equitable and injunctive remedies in any state or federal court
in New Jersey or Colorado.
Section 17.03. DISPUTE RESOLUTION ACT. Any Dispute not resolved
pursuant to Section 17.02 shall be resolved by means of alternative dispute
resolution, as provided in the New Jersey Alternative Procedure for Dispute
Resolution Act. Other than as set forth herein to the contrary, the Parties
expressly waive the right to resolve all claims, disputes and issues arising
out of or relating to this Agreement by means of traditional litigation
including the right to appeal except as provided in the Act. Except as
otherwise provided in this Agreement, the Act shall govern the procedures and
methods for any ADR Proceeding.
Section 17.04. NOTICE REQUIRED. Notice of a demand for resolution of
a dispute under the Act (a "Notice of Dispute") given by either Party shall be
in writing specifying the issue or issues in dispute.
Section 17.05. UMPIRE SELECTION. Within fifteen (15) business days
after a Notice of Dispute is given each Party shall select two (2) prospective
umpires from among: (a) any retired judge of the United States District Court;
(b) any retired managing senior partner of a law firm with no less than
twenty-five (25) partners; or (c) such other persons with such qualifications
upon which the Parties agree. The umpires shall be free from bias and conflict
of interest with respect to either Party and shall be in a position to
immediately hear the dispute and render a prompt resolution, but in no event
later than six (6) months from the date of the Notice of Dispute. Within
fifteen (15) business days after each Party has selected its prospective
umpires the Parties shall agree to one (1) umpire from among the four (4)
prospective umpires to hear the dispute. In the event that the Parties do not
agree on an umpire, the prospective umpires shall name the umpire.
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Section 17.06. NEUTRAL WITH SPECIAL EXPERTISE. In the event of a
dispute between the Parties relating to the calculation of any royalties or the
amount of other consideration payable under this Agreement (including, without
limitation, the results of any audit conducted on behalf of a Party pursuant to
this Agreement), then, in addition to the procedure set forth in Section 17.05
above, the umpire shall be a partner or full member of an internationally
recognized certified public accounting firm which is not an auditing firm for
either Party and has not provided material services to either Party during the
last two (2) year period prior to the date of the Notice of Dispute.
Section 17.07. NOTICE OF DISPUTE HEARING. The umpire(s) shall hold a
hearing to resolve the issues within one hundred twenty (120) business days
after selection. Each Party may be represented by counsel. Prior to the
hearing the Parties shall be entitled to engage in discovery under procedures
of the Federal Rules of Civil Procedure, provided, however, that a Party may
not submit more than fifty (50) written interrogatories or take more than four
(4) depositions. There shall not be any, and the umpire(s) shall not permit,
any discovery within thirty (30) days of the hearing. The umpire(s) shall have
sole discretion regarding the admissibility of evidence and conduct of the
hearing. At least five (5) business days prior to the hearing, each Party
shall submit to the other Party and the umpire(s) a copy of all exhibits on
which such Party intends to rely at the hearing, a pre-hearing brief (up to 20
pages), and a proposed disposition of the dispute (up to 5 pages). The
proposed disposition shall be limited to proposed rulings and remedies on each
issue, and shall contain no argument on or analysis of the facts or issues;
provided, however, that the Parties will not present proposed monetary
remedies. Within five (5) business days after close of the hearing, each Party
may submit a post-hearing brief (up to 5 pages) to the umpire(s).
Section 17.08. VENUE. The proceeding for the alternative resolution
of a dispute (the "ADR Proceeding") shall be held in Chicago, Illinois or at
such other site mutually agreed to by the Parties and shall commence no later
than forty (40) business days after the Notice of Dispute is given.
Section 17.09. FEES AND EXPENSES. The fees payable to the umpire
shall be the usual hourly rate of such umpire(s) for consulting or dispute
resolution services. All fees and expenses associated with the ADR Proceeding,
including the reasonable attorney fees and disbursements incurred by the
prevailing Party, shall be borne by the Party against whom the decision is
rendered. No Party shall be liable for consequential, punitive, special or
indirect or incidental damages, including, without limitation, loss of profits
or revenues.
ARTICLE XVIII
CONFIDENTIALITY
Section 18.01. CONFIDENTIAL INFORMATION. The Parties hereto
acknowledge that the sharing of information prior to and during the term of
this Agreement included, and will include, providing to a Party (the
"Recipient") certain information which the disclosing Party (the
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"Discloser") considers to be proprietary or confidential (as further defined in
Section 18.02 below, the "Confidential Information").
Section 18.02. BROADEST CONSTRUCTION. For purposes of this Article
XVIII, Confidential Information shall include any and all confidential, secret
or proprietary information which is in any way connected with, derived from or
related to the business of the Product or the Units, including without
limitation, any business and financial records, reports prepared by or for the
Steering Committee, computer program, engineering, technical or other data,
invention, specification, formula, pattern, list, compilation, composition,
program, plan, device, compound, description, blueprint, drawing, method,
technique, process, design, theory, concept or idea, whether or not patentable,
and any Improvements thereof, Proprietary Information or Know-How related
thereto, and any other information which relates to the Product or the Units,
including but not limited to, pricing or marketing policies, suppliers or
customers of the Discloser. Without limiting the foregoing, all of the
manufacturing process and marketing data and other information provided by
Atrix to Block, or by Block to Atrix, pursuant to this Agreement, without
limitation, shall be deemed to be and construed as Confidential Information.
Section 18.03. NO DISCLOSURES. The Recipient shall not, except in
connection with the performance of its obligations under this Agreement, (a)
use the Confidential Information or (b) disclose or permit to be disclosed the
Confidential Information to any person, other than its representatives, without
the prior consent of the Discloser. Before the Recipient shall disclose any
Confidential Information to any of its representatives, it shall advise them of
its obligations under this Article XVIII. To the extent that the Recipient is
required by Law or by a Governmental Authority to disclose any Confidential
Information, the Recipient shall seek appropriate protective and other
available limiting orders. If the Discloser requests in writing that the
Recipient return any Confidential Information to it that is not necessary or
desirable for the performance of the Recipient's obligations under this
Agreement, the Recipient shall promptly return such Confidential Information to
the Discloser in the same physical form in which it was originally received,
and shall not retain any copies thereof except as may be required by Law.
Section 18.04. PUBLIC DOMAIN EXCLUSION. Notwithstanding the
foregoing provisions of this Article XVIII to the contrary, the obligations of
the Recipient under this Article XVIII shall not apply to: (a) any Confidential
Information which is in the public domain at the time of its disclosure by the
Discloser to the Recipient; (b) any Confidential Information which, after its
disclosure by the Discloser to the Recipient, becomes part of the public domain
due to no fault of the Recipient; (c) any Confidential Information which was in
the possession of or known by the Recipient at the time it is disclosed to it
by the Discloser as evidenced by written records maintained by Recipient in the
ordinary course of Recipient's business; (d) any Confidential Information which
the Recipient receives in good faith from a third party which is under no legal
duty to the Discloser not to disclose such Confidential Information to the
Recipient; and (e) any Confidential Information which the Recipient develops
independent of the Confidential Information disclosed to it by the Discloser as
evidenced by written records maintained by Recipient in the ordinary course of
Recipient's business.
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Section 18.05. SURVIVAL. The obligations of the Parties hereto under
this Article XVIII shall survive any termination of this Agreement, and shall
continue for a period of five (5) years from and after the date of termination
or until the expiration of this Agreement of any proprietary right applicable
to the Product, the Unit or Proprietary Information, whichever is later.
ARTICLE XIX
NOTICES
Section 19.01. NOTICES. Any notice, request, demand, waiver,
consent, approval or other communication which is required or permitted
hereunder shall be in writing and shall be deemed given only if delivered
personally, or sent by telegram or facsimile or by registered or certified
mail, postage prepaid, as follows:
If to Block: Senior Vice President and General
Counsel
Block Drug Corporation
105 Academy Street
Jersey City, New Jersey 07302
Facsimile: 201-333-3585
Telephone: 201-434-3000 (ext. 1463)
If to Atrix: Vice Chairman and Chief Executive
Officer
Atrix Laboratories, Inc.
2579 Midpoint Drive
Fort Collins, Colorado 80525-4417
Facsimile: 303-482-9735
Telephone: 303-482-5868
With a copy to: Kutak Rock
Suite 2900
717 Seventeenth Street
Denver, Colorado 80202-3329
Facsimile: 303-292-7799
Telephone: 303-297-2400
Attention: Warren L. Troupe, Esq.
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as
of the date so delivered, with respect to telegraph or facsimile, upon
confirmation of receipt by the recipient, or if mailed then five (5) days after
mailing.
Section 19.02. SECTION HEADINGS. The titles, headings or captions of
sections and paragraphs in this Agreement do not define, limit, extend, explain
or describe the scope or extent
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of this Agreement or any of its terms or conditions and therefore shall not be
considered in the interpretation, construction or application of this
Agreement.
Section 19.03. SEVERABILITY. Whenever possible, each clause,
subclause, provision or condition of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
clause, subclause, provision or condition of this Agreement should be
prohibited or invalid under applicable law, such clause, subclause, provision
or condition shall be considered separate and severable from this Agreement to
the extent of such prohibition or invalidity without invalidating the remaining
clauses, subclauses, provisions and conditions of this Agreement.
Section 19.04. ENTIRE AGREEMENT/MERGER. This Agreement sets forth
the entire agreement between the Parties hereto pertaining to the subject
matter hereof and supersedes all negotiations, preliminary agreements,
memoranda or letters of proposal or intent, discussions and understandings of
the Parties hereto in connection with the subject matter hereof. All
discussions between the Parties have been merged into this Agreement, and
neither Party shall be bound by any definition, condition, understanding,
representation, warranty, covenant or provision other than as expressly stated
in or contemplated by this Agreement or as subsequently shall be set forth in
writing and executed by a duly authorized representative of the Party to be
bound thereby.
Section 19.05. AMENDMENT. No amendment, change or modification of
any of the terms, provisions or conditions of this Agreement shall be effective
unless made in writing and signed on behalf of the Parties hereto by their duly
authorized representatives.
Section 19.06. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original document,
but all such separate counterparts shall constitute only one and the same
instrument.
Section 19.07. NO WAIVER OF RIGHTS. No waiver of any term,
provision, or condition of this Agreement, whether by conduct or otherwise, in
any one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such term, provision, or condition of this Agreement.
Section 19.08. FORCE MAJEURE. Neither Party shall be liable
hereunder to the other Party nor shall be in breach for failure to deliver,
provided failure to deliver is no greater than the delay in time caused by
circumstances beyond control for either Party, including but not limited to
acts of God, fires, floods, riots, wars, civil disturbances, sabotage,
accidents, labor disputes, shortages, government actions (including but not
limited to priorities, requisitions, allocations and price adjustment
restrictions) and inability to obtain material, equipment, labor or
transportation (collectively, "Force Majeure").
Section 19.09. FURTHER ASSURANCES. The Parties hereto shall each
perform such acts, execute and deliver such instruments and documents and do
all such other things as may be reasonably necessary to accomplish the
transactions contemplated in this Agreement.
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Section 19.10. ASSIGNMENT AND SUB-LICENSE. Neither this Agreement
nor any of the rights, interests, options or obligations hereunder may be
assigned, sublicensed or delegated by either of the Parties without the prior
written consent of the other Party, provided, however, that either Block or
Atrix may, without such consent, assign this Agreement and its rights and
obligations hereunder in connection with the transfer or sale of all or
substantially all of its business pertaining to this Agreement, or in the event
of its merger or consolidation or change in control or similar transaction.
Any permitted assignee shall assume all obligations of its assignor under this
Agreement or that Party may assign or sublicense any and all of its rights,
interests, options, and delegate all obligations hereunder, to any Affiliate of
such Party (and such Affiliate may further assign or sublicense this Agreement
to such Party or any other Affiliate of such Party) without the consent of the
other Party. In the event of an assignment or sublicense to an Affiliate, the
assigning Party shall guarantee the performance of such assignee or
sub-licensee. The assignment or sublicense to an Affiliate shall not operate
to discharge the assignor or sub-licensor from any obligation under this
Agreement. Any assignment which contravenes this Section 19.10 shall be void ab
initio.
Section 19.11. EXPENSES. The Parties hereto shall each bear their
own costs and expenses (including attorneys' fees) incurred in connection with
the negotiation and preparation of this Agreement and consummation of the
transactions contemplated hereby.
Section 19.12. BINDING EFFECT. This Agreement, and all of the terms,
provisions and conditions hereof, shall be binding upon and shall inure to the
benefit of the Parties hereto and their respective permitted successors and
assigns.
Section 19.13. GOVERNING LAW. This Agreement shall be construed and
interpreted accordance with the laws of the State of New Jersey.
Section 19.14. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
statements contained herein, or in any schedule hereto, shall be considered a
representation, warranty or covenant of the Party making such statement. All
representations, warranties, covenants contained herein, or in any schedule
hereto, shall survive the closing of this transaction.
Section 19.15. NO STRICT CONSTRUCTION. This Agreement has been
prepared jointly and shall not be strictly construed against either Party.
Section 19.16. US DOLLARS. All dollar amounts referred to in this
Agreement are United States dollars.
Section 19.17. PUBLIC ANNOUNCEMENTS. Except as required by
applicable Law, listing requirements of any exchange upon which the Parties'
securities are listed or traded, or as appropriate in the reasonable judgement
of either Party to satisfy the disclosure requirements of any applicable
securities law or regulation, or judicial order, neither Atrix nor Block, nor
any of their respective representatives, successors or assigns, shall issue any
press release or make any public announcement or disclosure with respect to
this Agreement or the transactions contemplated hereby without the prior
consent of the other Party hereto.
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Section 19.18. INDEPENDENT CONTRACTORS. The status of the Parties
under this Agreement shall be that of independent contractor. No Party shall
have the right to enter into any agreements on behalf of the other Party nor
shall it represent to any Person that it has such right or authority.
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IN WITNESS WHEREOF the Parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the Effective Date.
BLOCK DRUG CORPORATION
By
----------------------------------
Michael C. Alfano, Senior
Vice President
Research and Technology
ATRIX LABORATORIES, INC.
By
----------------------------------
John E. Urheim, Vice
Chairman and Chief Executive
Officer
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SCHEDULE 6.01(B)
UNIT TARGETS FOR
EUROPEAN COUNTRIES
<TABLE>
<S> <C>
GROUP I COUNTRIES Unit Target (000)
----------------- -----------------
* *
GROUP II COUNTRIES Unit Target (000)
------------------ -----------------
* *
GROUP III COUNTRIES Unit Target (000)
------------------- -----------------
* *
</TABLE>
__________________________________
* Confidential treatment has been requested.
45
<PAGE> 52
EXHIBIT A
ATRIX PATENTS AND PATENT APPLICATIONS
U.S. Patent No. 4,938,763
U.S. Patent No. 5,278,201
U.S. Patent No. 5,278,202
U.S. Patent No. 5,324,519
U.S. Patent No. 5,340,849
U.S. Patent No. 5,487,897
Australian Patent No. 644,581
Australian Patent No. 666,050
Australian Patent No. 666,676
Israeli Patent No. 91850
Israeli Patent No. 107393
Mexican Patent No. 173,182
New Zealand Patent No. 232,107
South African Patent No. 89/7511
*
__________________________________
* Confidential treatment has been requested.
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EXHIBIT 3.01
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is dated as of this
19th day of December, 1996, by and among Atrix Laboratories, Inc., a Delaware
corporation ("Atrix"), with its principal place of business located at 2579
Midpoint Drive, Fort Collins, Colorado 80525-4417, Block Drug Corporation, a
New Jersey corporation ("Block"), with its principal place of business located
at 105 Academy Street, Jersey City, New Jersey, 07302-9988 and BankOne -
Colorado N.A., as escrow agent (the "Escrow Agent"), with its principal place
of business at 1125 17th Street, 4th Floor, Denver, Colorado. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Agreement (as defined below).
PRELIMINARY STATEMENTS
A. Pursuant to the terms and subject to the conditions of an
Agreement dated as of December 16, 1996 (the "Agreement"), by and between Atrix
and Block, Atrix has agreed to grant to Block an exclusive license to market
and sell Atridox(TM) and Atrisorb(R) with Doxycycline and any and all
Improvements thereon for use in the field of dentistry including all its
specialties in the Territory and to sell Block certain rights with respect to
Atrisorb(R) in exchange for the payments set forth in the Agreement, including
an initial payment of Seven Million Dollars ($7,000,000)(the "Initial
Payment").
B. In accordance with the terms and conditions of the Agreement,
the parties hereto are required to enter into this Escrow Agreement, pursuant
to which Block will deposit the Initial Payment with the Escrow Agent within
five (5) days of the Effective Date (as said amount may increase or decrease as
a result of investment thereof and as said amounts may be reduced by charges
thereto and payments and setoffs therefrom to compensate or reimburse Escrow
Agent for amounts owing to it pursuant hereto, collectively, the "Escrow
Funds").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein and in the Agreement and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. APPOINTMENT OF AND ACCEPTANCE BY ESCROW AGENT. Atrix
and Block hereby appoint and designate the Escrow Agent to act as escrow agent
for the purposes set forth herein, and the Escrow Agent does hereby accept such
appointment and designation under the terms and conditions set forth herein.
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Section 2. ESTABLISHMENT OF ESCROW ACCOUNT. Simultaneously with
the execution of this Escrow Agreement, there shall be established, and at all
times thereafter until terminated in accordance with this Escrow Agreement
there shall be maintained, with the Escrow Agent an account which shall be
entitled the "Escrow Account." Block shall deposit into the Escrow Account,
within five (5) days of the Effective Date, the Initial Payment which shall be
held in the Escrow Account, to be released pursuant to the terms and conditions
of Section 3 of this Escrow Agreement.
Section 3. PROCEDURES FOR RELEASE FROM ESCROW ACCOUNT. On
January 31, 1997 (the "Release Date"), the Escrow Funds will be released and
delivered to Atrix in immediately available funds to a bank account designated
by Atrix, by notice to the Escrow Agent, no later than three (3) business days
prior to the Release Date, with no further action required on the part of Atrix
or Block.
Section 4. INVESTMENT OF DEPOSIT. Escrow Agent shall hold all
moneys received by Escrow Agent hereunder in accordance with the terms hereof.
Subject to and in accordance with the terms and conditions hereof, Escrow Agent
agrees that it shall receive, hold in escrow, invest and release or distribute
the Escrow Funds. It is hereby expressly stipulated and agreed that all
interest and other earnings on the Escrow Funds shall be paid to Atrix and that
all losses resulting from the investment thereof from time to time and all
amounts charged thereto to compensate or reimburse the Escrow Agent from time
to time for amounts owing to it hereunder shall from the time of such loss or
charge no longer constitute part of the Escrow Funds.
Escrow Agent shall invest the Escrow Funds in accordance with written
instructions from Atrix. Escrow Agent shall not be liable for failure to
invest funds absent sufficient written direction. It is expressly agreed and
understood by the parties hereto that Escrow Agent shall not in any way
whatsoever be liable for losses on any investments, including, but not limited
to, losses from market risks due to premature liquidation, or resulting from
other actions taken pursuant to this Escrow Agreement, unless such loss is the
result of the gross negligence or willful misconduct of the Escrow Agent.
Section 5. ESCROW AGENT. In addition to the foregoing, the
parties hereto further agree as follows with respect to the Escrow Agent:
(a) Ministerial Nature of Duties. The parties
acknowledge and agree that the duties of the Escrow Agent arising
pursuant to this Escrow Agreement are purely ministerial in nature and
that Atrix and Block shall not seek to impose any liability against
Escrow Agent in connection with this Escrow Agreement except for gross
negligence or willful misconduct on the part of Escrow Agent. Escrow
Agent is not a principal, participant or beneficiary in any
transaction underlying this Escrow Agreement and shall have no duty to
inquire beyond the terms and provisions hereof. Escrow Agent shall
have no responsibility or obligation of any kind in connection with
this Escrow Agreement or the Escrow Funds and shall not be required to
deliver the Escrow Funds or any part thereof or take any action with
respect to any matters that may arise in connection therewith, other
than to receive, hold, invest, reinvest and deliver the Escrow
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Funds as herein provided. Without limiting the generality of the
foregoing, it is hereby expressly agreed and stipulated by the parties
hereto that Escrow Agent shall not be required to exercise any
discretion hereunder and shall have no investment or management
responsibility and, accordingly, shall have no duty to, or liability
for its failure to, provide investment recommendations or investment
advice to Atrix and Block or any of them. It is the intention of the
parties hereto that Escrow Agent shall never be required to use,
advance or risk its own funds or otherwise incur financial liability
in the performance of any of its duties or the exercise of any of its
rights and powers hereunder.
(b) Indemnification. Atrix and Block, jointly and
severally, shall indemnify Escrow Agent for any claim, expense or
liability, including but not limited to attorneys' fees, arising from
Escrow Agent's performance of this Escrow Agreement, except as may
arise with respect to a claim based on Escrow Agent's gross negligence
or willful misconduct.
(c) Documents. Escrow Agent shall have no responsibility
to determine the genuineness or validity of any document or notice
received by Escrow Agent pursuant to this Escrow Agreement which to
the Escrow Agent reasonably appears to be genuine and valid. The
Escrow Agent may at all times rely on any written notice which it in
good faith believes was executed by Atrix and/or Block. Escrow Agent
shall be responsible for holding, investing, reinvesting and
disbursing the Escrow Funds pursuant to this Escrow Agreement;
provided, however, that Escrow Agent shall have no liability for any
loss arising from any cause beyond its control, including, but not
limited to, the following: (i) acts of God, force majeure, including,
without limitation, war (whether or not declared or existing),
revolution, insurrection, riot, civil commotion, accident, fire,
explosion, stoppage of labor, strikes and other differences with
employees; (ii) the act, failure or neglect of Atrix and Block; (iii)
any delay, error, omission or default of any mail, courier, telegraph,
cable or wireless agency or operator; or (iv) the acts or edicts of
any government or governmental agency or other group or entity
exercising governmental powers. Escrow Agent is not responsible or
liable in any manner whatsoever for the sufficiency, correctness,
genuineness or validity of the subject matter of this Escrow Agreement
or any part hereof or for the transaction or transactions requiring or
underlying the execution of this Escrow Agreement, the form or
execution hereof or for the identity or authority of any person
executing this Escrow Agreement or any part hereof or depositing the
Escrow Funds.
(d) Instructions from Atrix and Block. In the event that
Escrow Agent is unsure of the course of action to be taken by it
hereunder, Escrow Agent may request instructions from Atrix and Block
and to the extent that Escrow Agent follows such instructions in good
faith, it shall not be liable to any person.
(e) Legal Proceedings. Escrow Agent shall have no
obligation to institute a legal proceeding of any nature in connection
with this Escrow Agreement, but may do so as provided herein.
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<PAGE> 56
(f) Right to Interplead. In the event of a dispute
arising under the terms of this Escrow Agreement, the Escrow Agent
shall be entitles to Interplead the Escrow Funds in the District Court
for the City and County of Denver, State of Colorado, and to recover
therefrom its costs and attorneys' fees incurred as a result of such
action. Upon such interpleading, the Escrow Agent shall be relieved
of any further responsibility, obligation or duty hereunder.
(g) Successors. The term "Escrow Agent" shall mean the
Escrow Agent and any successor escrow agent. Further, any corporation
resulting from any merger or consolidation to which Escrow Agent is a
party, or any corporation or association in any manner succeeding to
all or substantially all of the business of the Escrow Agent, shall be
deemed the Escrow Agent hereunder without the execution or filing of
any document or any further act on the part of any of the parties
hereto.
(h) Consultation of Legal Counsel. Escrow Agent may
consult with its counsel or other counsel satisfactory to it
concerning any question relating to its duties or responsibilities
hereunder or otherwise in connection herewith and shall not be liable
for any action taken, suffered or omitted by it in good faith upon the
advice of such counsel.
(i) Resignation. Escrow Agent may at any time resign
such position by giving thirty (30) business days written notice to
each of Atrix and Block. Such resignation shall take effect upon the
expiration of such period, or upon the earlier appointment of a
successor to the Escrow Agent by Atrix and Block. If a successor
Escrow Agent is not appointed within such period, Escrow Agent may
petition any court of competent jurisdiction to name a successor
Escrow Agent. Escrow Agent's sole responsibility after such thirty
(30) business day notice period expires shall be to hold the deposit
and the Escrow Funds (without any obligation to reinvest the same) and
to deliver the same to a designated substitute escrow agent, if any,
or in accordance with the directions of a final order or judgment of a
court of competent jurisdiction, at which time of delivery Escrow
Agent's obligations hereunder shall cease and terminate.
(j) Removal. Atrix and Block may remove Escrow Agent for
any reason or for no reason at any time upon ten (10) business days
written notice to the Escrow Agent. Such removal shall take effect
upon the expiration of such period. From and after the effective date
of such removal, the Escrow Agent so removed shall have no obligation
to perform any duties arising pursuant to this Escrow Agreement.
(k) Escrow Agent's Fees. Atrix hereby agrees to pay
Escrow Agent for its services hereunder the amounts stated in the fee
schedules attached hereto from time to time by Escrow Agent and to pay
all expenses incurred by Escrow Agent in connection with the
performance of its duties and enforcement of its rights hereunder and
otherwise in connection with the preparation, operation,
administration and enforcement of this Escrow Agreement, including,
without limitation, attorneys' fees, brokerage costs and related
expenses incurred by Escrow Agent. Atrix shall be solely liable to
Escrow Agent for the payment of all such fees and expenses. In the
event Atrix for any reason fails to
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<PAGE> 57
pay any such fees and expenses as and when the same are due, such
unpaid fees and expenses shall be charged to and set-off and paid from
the Escrow Funds by Escrow Agent without any further notice.
Section 6. NOTICES. All notices, requests, demands and other
communications made hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or sent by registered or certified mail,
postage prepaid, return receipt requested, or by reputable overnight courier
service, charges prepaid to the respective address set forth below or to such
other address as any party may specify by notice to the others in accordance
with this Section 6, or if telecopied to the recipient at such party's telecopy
number set forth below:
If to Block: Senior Vice President and General Counsel
Block Drug Corporation
105 Academy Street
Jersey City, New Jersey 07302
Facsimile: 201-333-3585
Telephone: 201-434-3000 (ext. 1463)
If to Atrix: Vice Chairman and Chief Executive Officer
Atrix Laboratories, Inc.
2579 Midpoint Drive
Fort Collins, Colorado 80525-4417
Facsimile: 303-482-9735
Telephone: 303-482-5868
If to Escrow Agent: BankOne - Colorado N.A.
1125 17th Street, 4th Floor
Denver, Colorado 80202
Facsimile: 303-297-4799
Telephone: 303-297-4254
Attention: Debra Rayman, Vice President
Notice so given shall (in the case of notice so given by mail) be
deemed to be given and received in the fourth calendar day after posting and
(in the case of notice so given by cable, telegram, telecopier, telex or
personal delivery) on the date of actual transmission or (as the case may be)
personal or other delivery.
Section 7. MISCELLANEOUS.
(a) Termination. This Escrow Agreement shall terminate
upon release of all Escrow Funds and the Documented Technology in
accordance with Section 3.
(b) Amendment, Waiver, or Termination. This Escrow
Agreement or any provision hereof may be amended, modified, waived or
terminated only by written instrument duly signed by the parties
hereto or in accordance with Section 7(a) hereof.
5
<PAGE> 58
(c) Severability. If any provision of this Escrow
Agreement is held by a court of competent jurisdiction to be invalid,
void or otherwise unenforceable, the remainder of this Escrow
Agreement shall remain in full force and effect and shall in no way be
invalidated, void or voidable.
(d) Entire Agreement. This Escrow Agreement, and
documents and instruments referred to herein, and any appendices and
exhibits hereto which are incorporated herein by reference, constitute
the entire understanding among the parties with respect to the subject
matter hereof. No modification of this Escrow Agreement shall be
valid unless in a writing signed by each party to this Escrow
Agreement.
(e) No Waiver. The waiver of any term or condition of
this Escrow Agreement by any party shall not be construed as a waiver
of any subsequent breach or failure of the same term or condition, or
a waiver of any other term or condition of this Escrow Agreement.
(f) Applicable Law. This Escrow Agreement shall be
construed under, and governed by, the laws of the State of Colorado.
All of Escrow Agent's rights hereunder are cumulative of any other
rights it may have at law, in equity or otherwise.
(g) Headings. Section and paragraph titles and headings
herein contained are inserted only for convenience and are not
intended to be construed as a part of this Escrow Agreement or as a
limitation on the scope of the particular portions of this Escrow
Agreement to which they refer.
(h) Succession and Assignment. This Escrow Agreement
shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
(i) Several Liability. Unless expressly stated otherwise
in this Escrow Agreement, the liabilities and obligations of any party
hereto are individual with respect to such party and are not joint and
several.
(j) Remedies. The Escrow Account is for the benefit of
Atrix and Block, and the right to use the Escrow Account shall be in
addition to and not in limitation of any other right, power, privilege
and remedy of Atrix or Block, at law or in equity, to cause the other
to satisfy its obligations under the Agreement.
(k) Counterparts. This Escrow Agreement my be executed
in two or more counterparts, each of which shall be deemed an original
but all of which collectively shall constitute one and the same
instrument.
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<PAGE> 59
IN WITNESS WHEREOF, the parties hereto have executed the Escrow
Agreement on the date first above written.
BLOCK DRUG CORPORATION
By
----------------------------------
Michael C. Alfano, Senior
Vice President
Research and Technology
ATRIX LABORATORIES, INC.
By
---------------------------------
John E. Urheim, Vice
Chairman and Chief Executive
Officer
ESCROW AGENT
BANKONE - COLORADO N.A.
By
----------------------------------
Debra Rayman, Vice President
7
<PAGE> 60
EXHIBIT 10.03
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is dated as of this
19th day of December, 1996, by and among Atrix Laboratories, Inc., a Delaware
corporation ("Atrix"), with its principal place of business located at 2579
Midpoint Drive, Fort Collins, Colorado 80525-4417, Block Drug Corporation, a
New Jersey corporation ("Block"), with its principal place of business located
at 105 Academy Street, Jersey City, New Jersey, 07302-9988, and BankOne -
Colorado N.A., as escrow agent (the "Escrow Agent"), with its principal place
of business at 1125 17th Street, 4th Floor, Denver, Colorado. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Agreement (as defined below).
PRELIMINARY STATEMENTS
A. Pursuant to the terms and subject to the conditions of an
Agreement dated as of December 16, 1996 (the "Agreement"), by and between Atrix
and Block, Atrix has agreed to grant to Block an exclusive license to market
and sell Atridox(TM) and Atrisorb(R) with Doxycycline and any and all
Improvements thereon for use in the field of dentistry including all its
specialties in the Territory and to sell Block certain rights with respect to
Atrisorb(R) to Block in exchange for the payments set forth in the Agreement.
B. In accordance with the terms and conditions of the Agreement,
the parties hereto are required to enter into this Escrow Agreement, pursuant
to which Atrix will deposit the Documented Technology with the Escrow Agent
within ninety (90) days of the Effective Date and (ii) Atrix will deposit any
material Improvements to the Documented Technology with the Escrow Agent within
forty-five (45) business days of such Improvements being made and such
Improvements shall be deemed part of the Documented Technology upon receipt by
the Escrow Agent.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein and in the Agreement and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. APPOINTMENT OF AND ACCEPTANCE BY ESCROW AGENT. Atrix
and Block hereby appoint and designate the Escrow Agent to act as escrow agent
for the purposes set forth herein, and the Escrow Agent does hereby accept such
appointment and designation under the terms and conditions set forth herein.
Section 2. ESTABLISHMENT OF ESCROW ACCOUNT. Simultaneously with
the execution of this Escrow Agreement, there shall be established, and at all
times thereafter until terminated in
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<PAGE> 61
accordance with this Escrow Agreement there shall be maintained, with the
Escrow Agent an account which shall be entitled the "Escrow Account." Atrix
shall deposit into the Escrow Account, within ninety (90) days of the Effective
Date, the Documented Technology and any Improvements thereon within forty-five
(45) days of such Improvements being made, which shall be held in the Escrow
Account, to be released pursuant to the terms and conditions of Section 3 of
this Escrow Agreement.
Section 3. PROCEDURES FOR RELEASE FROM ESCROW ACCOUNT.
(a) Release of Documented Technology to Block. The
Escrow Agent shall release the Documented Technology to Block, upon
receipt of a written notice signed by Block or Atrix in the form of
Exhibit A attached hereto.
(b) Release of Documented Technology to Atrix. The
Escrow Agent shall release the Documented Technology to Atrix, upon
receipt of a written notice signed by both Block and Atrix directing
such release.
Section 4. REDEPOSIT OF DOCUMENTED TECHNOLOGY. If the
Documented Technology has been released to Block pursuant to Section 3(a) above
and is later redeposited (the "Redeposited Documented Technology"), with the
Escrow Agent pursuant to the terms of the Agreement, the procedures set forth
in Section 3 above shall apply to the release of the Redeposited Documented
Technology.
Section 5. ESCROW AGENT. In addition to the foregoing, the
parties hereto further agree as follows with respect to the Escrow Agent:
(a) Ministerial Nature of Duties. The parties
acknowledge and agree that the duties of the Escrow Agent arising
pursuant to this Escrow Agreement are purely ministerial in nature and
that Atrix and Block shall not seek to impose any liability against
Escrow Agent in connection with this Escrow Agreement except for gross
negligence or willful misconduct on the part of Escrow Agent. Escrow
Agent is not a principal, participant or beneficiary in any
transaction underlying this Escrow Agreement and shall have no duty to
inquire beyond the terms and provisions hereof. Escrow Agent shall
have no responsibility or obligation of any kind in connection with
this Escrow Agreement or the Documented Technology and shall not be
required to deliver the Documented Technology, or any part thereof or
take any action with respect to any matters that may arise in
connection therewith, other than to receive, hold and deliver the
Documented Technology as herein provided. Without limiting the
generality of the foregoing, it is hereby expressly agreed and
stipulated by the parties hereto that Escrow Agent shall not be
required to exercise any discretion hereunder. It is the intention of
the parties hereto that Escrow Agent shall never be required to use,
advance or risk its own funds or otherwise incur financial liability
in the performance of any of its duties or the exercise of any of its
rights and powers hereunder.
(b) Indemnification. Atrix and Block, jointly and
severally, shall indemnify Escrow Agent for any claim, expense or
liability, including but not limited to attorneys'
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<PAGE> 62
fees, arising from Escrow Agent's performance of this Escrow
Agreement, except as may arise with respect to a claim based on Escrow
Agent's gross negligence or willful misconduct.
(c) Documents. Escrow Agent shall have no responsibility
to determine the genuineness or validity of any document or notice
received by Escrow Agent pursuant to this Escrow Agreement which to
the Escrow Agent reasonably appears to be genuine and valid. The
Escrow Agent may at all times rely on any written notice which it in
good faith believes was executed by Atrix and/or Block. Escrow Agent
shall be responsible for holding and disbursing the Documented
Technology pursuant to this Escrow Agreement; provided, however, that
Escrow Agent shall have no liability for any loss arising from any
cause beyond its control, including, but not limited to, the
following: (i) acts of God, force majeure, including, without
limitation, war (whether or not declared or existing), revolution,
insurrection, riot, civil commotion, accident, fire, explosion,
stoppage of labor, strikes and other differences with employees; (ii)
the act, failure or neglect of Atrix and Block; (iii) any delay,
error, omission or default of any mail, courier, telegraph, cable or
wireless agency or operator; or (iv) the acts or edicts of any
government or governmental agency or other group or entity exercising
governmental powers. Escrow Agent is not responsible or liable in any
manner whatsoever for the sufficiency, correctness, genuineness or
validity of the subject matter of this Escrow Agreement or any part
hereof or for the transaction or transactions requiring or underlying
the execution of this Escrow Agreement, the form or execution hereof
or for the identity or authority of any person executing this Escrow
Agreement or any part hereof or depositing the Documented Technology.
(d) Instructions from Atrix and Block. In the event that
Escrow Agent is unsure of the course of action to be taken by it
hereunder, Escrow Agent may request instructions from Atrix and Block
and to the extent that Escrow Agent follows such instructions in good
faith, it shall not be liable to any person.
(e) Legal Proceedings. Escrow Agent shall have no
obligation to institute a legal proceeding of any nature in connection
with this Escrow Agreement, but may do so as provided herein.
(f) Right to Interplead. In the event of a dispute
arising under the terms of this Escrow Agreement, the Escrow Agent
shall be entitled to Interplead the Documented Technology in the
District Court for the City and County of Denver, State of Colorado,
and to recover therefrom its costs and attorneys' fees incurred as a
result of such action. Upon such interpleading, the Escrow Agent
shall be relieved of any further responsibility, obligation or duty
hereunder.
(g) Successors. The term "Escrow Agent" shall mean
BankOne - Colorado N.A. and any successor Escrow Agent. Further, any
corporation resulting from any merger or consolidation to which Escrow
Agent is a party, or any corporation or association in any manner
succeeding to all or substantially all of the business of the
10
<PAGE> 63
Escrow Agent, shall be deemed the Escrow Agent hereunder without the
execution or filing of any document or any further act on the part of
any of the parties hereto.
(h) Consultation of Legal Counsel. Escrow Agent may
consult with its counsel or other counsel satisfactory to it
concerning any question relating to its duties or responsibilities
hereunder or otherwise in connection herewith and shall not be liable
for any action taken, suffered or omitted by it in good faith upon the
advice of such counsel.
(i) Resignation. Escrow Agent may at any time resign
such position by giving sixty (60) business days written notice to
each of Block and Atrix. Such resignation shall take effect upon the
expiration of such period, or upon the earlier appointment of a
successor to the Escrow Agent by Block and Atrix. If a successor
Escrow Agent is not appointed within such period, Escrow Agent may
petition any court of competent jurisdiction to name a successor
Escrow Agent. Escrow Agent's sole responsibility after such sixty
(60) business day notice period expires shall be to hold the
Documented Technology and to deliver the same to a designated
substitute escrow agent, if any, or in accordance with the directions
of a final order or judgment of a court of competent jurisdiction, at
which time of delivery Escrow Agent's obligations hereunder shall
cease and terminate.
(j) Removal. Block and Atrix jointly may remove Escrow
Agent for any reason or for no reason at any time upon ten (10)
business days written notice to the Escrow Agent. Such removal shall
take effect upon the expiration of such period. From and after the
effective date of such removal, the Escrow Agent so removed shall have
no obligation to perform any duties arising pursuant to this Escrow
Agreement.
(k) Escrow Agent's Fees. As between (i) Atrix on the one
hand and (ii) Block on the other, each of Atrix and Block hereby
agrees to pay Escrow Agent for its services hereunder one-half of the
amounts stated in the fee schedules attached hereto from time to time
by Escrow Agent and to pay one-half of all expenses incurred by Escrow
Agent in connection with the performance of its duties and enforcement
of its rights hereunder and otherwise in connection with the
preparation, operation, administration and enforcement of this Escrow
Agreement, including, without limitation, attorneys' fees, brokerage
costs and related expenses incurred by Escrow Agent. In the event
that Atrix for any reason fails to pay its share of such fees and
expenses when due and Block pays all of such fees and expenses, Atrix
shall promptly reimburse Block for the full amount of such fees and
expenses so paid by Block on Atrix's behalf. In the event that Block
for any reason fails to pay its share of such fees and expenses when
due and Atrix pays all such fees and expenses, Atrix shall promptly
reimburse Block for the full amount of such fees and expenses so paid
by Atrix on Block's behalf. The foregoing notwithstanding, as between
(i) Atrix and Block on the one hand and (ii) the Escrow Agent on the
other, Atrix and Block shall be jointly and severally liable to Escrow
Agent for the payment of all such fees and expenses.
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<PAGE> 64
Section 6. NOTICES. All notices, requests, demands and other
communications made hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or sent by registered or certified mail,
postage prepaid, return receipt requested, or by reputable overnight courier
service, charges prepaid to the respective address set forth below or to such
other address as any party may specify by notice to the others in accordance
with this Section 6, or if telecopied to the recipient at such party's telecopy
number set forth below:
If to Block: Senior Vice President and General
Counsel
Block Drug Corporation
105 Academy Street
Jersey City, New Jersey 07302
Facsimile: 201-333-3585
Telephone: 201-434-3000 (ext. 1463)
If to Atrix: Vice Chairman and Chief Executive
Officer
Atrix Laboratories, Inc.
2579 Midpoint Drive
Fort Collins, Colorado 80525-4417
Facsimile: 303-482-9735
Telephone: 303-482-5868
If to Escrow Agent: BankOne - Colorado N.A.
1125 17th Street, 4th Floor
Denver, Colorado 80202
Facsimile: 303-297-4799
Telephone: 303-297-4254
Attention: Debra Rayman, Vice President
Notice so given shall (in the case of notice so given by mail) be
deemed to be given and received in the fourth calendar day after posting and
(in the case of notice so given by cable, telegram, telecopier, telex or
personal delivery) on the date of actual transmission or (as the case may be)
personal or other delivery.
Section 7. MISCELLANEOUS.
(a) Termination. This Escrow Agreement shall terminate
upon release of the Documented Technology accordance with Section 3.
(b) Amendment, Waiver, or Termination. This Escrow
Agreement or any provision hereof may be amended, modified, waived or
terminated only by written instrument duly signed by the parties
hereto or in accordance with Section 7(a) hereof.
(c) Severability. If any provision of this Escrow
Agreement is held by a court of competent jurisdiction to be invalid,
void or otherwise unenforceable, the remainder of
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<PAGE> 65
this Escrow Agreement shall remain in full force and effect and shall
in no way be invalidated, void or voidable.
(d) Entire Agreement. This Escrow Agreement, and
documents and instruments referred to herein, and any appendices and
exhibits hereto which are incorporated herein by reference, constitute
the entire understanding among the parties with respect to the subject
matter hereof. No modification of this Escrow Agreement shall be
valid unless in a writing signed by each party to this Escrow
Agreement.
(e) No Waiver. The waiver of any term or condition of
this Escrow Agreement by any party shall not be construed as a waiver
of any subsequent breach or failure of the same term or condition, or
a waiver of any other term or condition of this Escrow Agreement.
(f) Applicable Law. This Escrow Agreement shall be
construed under, and governed by, the laws of the State of Colorado.
All of Escrow Agent's rights hereunder are cumulative of any other
rights it may have at law, in equity or otherwise.
(g) Headings. Section and paragraph titles and headings
herein contained are inserted only for convenience and are not
intended to be construed as a part of this Escrow Agreement or as a
limitation on the scope of the particular portions of this Escrow
Agreement to which they refer.
(h) Succession and Assignment. This Escrow Agreement
shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
(i) Several Liability. Unless expressly stated otherwise
in this Escrow Agreement, the liabilities and obligations of any party
hereto are individual with respect to such party and are not joint and
several.
(j) Remedies. The Escrow Account is for the benefit of
Atrix and Block, and the right to use the Escrow Account shall be in
addition to and not in limitation of any other right, power, privilege
and remedy of Atrix or Block, at law or in equity, to cause the other
to satisfy its obligations under the Agreement.
(k) Counterparts. This Escrow Agreement my be executed
in two or more counterparts, each of which shall be deemed an original
but all of which collectively shall constitute one and the same
instrument.
13
<PAGE> 66
IN WITNESS WHEREOF, the parties hereto have executed the Escrow
Agreement on the date first above written.
BLOCK DRUG CORPORATION
By
----------------------------------
Michael C. Alfano, Senior
Vice President
Research and Technology
ATRIX LABORATORIES, INC.
By
----------------------------------
John E. Urheim, Vice
Chairman and Chief Executive
Officer
ESCROW AGENT
BANKONE - COLORADO N.A.
By
----------------------------------
Debra Rayman, Vice President
14
<PAGE> 67
EXHIBIT A
TO
ESCROW AGREEMENT
Debra Rayman, Vice President
BankOne - Colorado N.A.
Escrow Agent
1125 17th Street, 4th Floor
Denver, Colorado 80202
Dear Ms. Rayman:
Pursuant to Section 3(a) of that certain Escrow Agreement (the "Escrow
Agreement"), dated December 19, 1996, by and among Atrix Laboratories, Inc., a
Delaware corporation ("Atrix"), Block Drug Corporation, a New Jersey
corporation ("Block") and BankOne - Colorado N.A., as escrow agent (the "Escrow
Agent"), notice is hereby given of the following (capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in
the Agreement (as defined in the Escrow Agreement)):
1. Atrix is unable or unwilling to supply Product to Block in the
amounts or at the times requested by Block in accordance with the procedures
set forth in Section 9.06 of the Agreement.
2. Block has given Atrix written Notice to Atrix of Atrix's
failure to supply the Product in acceptable sufficiency.
3. More than sixty (60) days has elapsed since Atrix's receipt of
Notice from Block of an unacceptable sufficiency of supply.
4. The Documented Technology shall be delivered to Block
immediately at the following address:
_________________________________________________________.
Dated this ____ day of ___________________, 19_____.
BLOCK DRUG CORPORATION (or ATRIX
LABORATORIES, INC.)
By:
----------------------------------
Title:
------------------------------
cc: Atrix Laboratories, Inc. (or Block Drug Corporation)
15
