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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) AUGUST 27, 1999
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PHARMACYCLICS, INC.
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(Exact name of registrant as specified in charter)
DELAWARE 0-27066 94-3148201
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
995 EAST ARQUES AVENUE, SUNNYVALE, CALIFORNIA 94086
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 774-0330
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On August 27, 1999, Pharmacyclics, Inc. (the "Company") and Celanese,
Ltd. ("Celanese") entered into an agreement to terminate their manufacturing
development and supply agreement.
In September 1996, the Company entered into an agreement with Hoechst
Celanese Corporation ("Hoechst Celanese"), a manufacturer of chemicals and
pharmaceutical intermediates, to optimize and scale up a manufacturing process
for and supply of the Company's texaphyrin-based products (the "Manufacturing
Agreement"). In October 1997, Hoechst Celanese assigned the agreement to
Celanese, Ltd. in connection with Hoechst Celanese's corporate restructuring.
The Manufacturing Agreement granted Celanese exclusive worldwide manufacturing
rights and required Celanese to supply all of the Company's texaphyrin-based
products for late-stage clinical and commercial use.
As a result of the change in its business focus, Celanese requested that
the Company pursue alternative supply sources. Pursuant to the Termination
Agreement, dated as of August 27, 1999, between the Company and Celanese (the
"Termination Agreement"), Celanese assigned to the Company all right, title and
interest in and to the manufacturing technology and intellectual property for
the Company's texaphyrin-based products and agreed to make a cash payment of
$750,000 to the Company. The Termination Agreement also relieved the Company of
all obligations to pay Celanese for shared development costs incurred prior to
termination of the Manufacturing Agreement. As of June 30, 1999, the Company had
accrued approximately $2.8 million associated with such costs.
During discussions with Celanese that resulted in the Termination
Agreement, the Company entered into agreements with three new manufacturers to
evaluate their ability to supply the Company with the components of the
texaphyrin-based products. These manufacturers are currently in the process of
producing initial supplies, which include commercial quantities, of such
products for delivery to the Company during fiscal year 2000. The Company has
sufficient quantities of texaphyrin-based products to supply its current
clinical trial plans.
A copy of the Termination Agreement is attached hereto as Exhibit 10.1
and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements.
Registrant has determined that no financial information is required to
be filed pursuant to this item.
(b) Pro Forma Financial Information.
Registrant has determined that no pro forma financial information is
required to be filed pursuant to this item.
(c) Exhibits.
Exhibit No. Description.
10.1 Termination Agreement, dated as of August 27, 1999, by and
between Registrant and Celanese, Ltd.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
PHARMACYCLICS, INC.
(Registrant)
DATE: September 3, 1999 By: /s/ Leiv Lea
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Name: Leiv Lea
Title: Vice President, Finance and
Administration and Chief Financial
Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
10.1 Termination Agreement, dated as of August 27, 1999, by and
between Registrant and Celanese, Ltd.
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Exhibit 10.1
TERMINATION AGREEMENT
This TERMINATION AGREEMENT (the "Agreement") is made this 27th day of
August, 1999 (the "Termination Effective Date"), between CELANESE LTD., a Texas
limited partnership with its principal office at 1601 West LBJ Freeway, Dallas,
Texas 75234 ("Celanese") and PHARMACYCLICS, INC., a Delaware corporation with
its principal office at 995 E. Arques Avenue, Sunnyvale, California 94086-4521
("PCYC"). Celanese and PCYC are sometimes referred to herein individually as a
"Party" and collectively as the "Parties," and references to "Celanese" and
"PCYC" shall include their respective Affiliates.
RECITALS
WHEREAS, PCYC and Hoechst Celanese Corporation ("HCC") entered into that
certain Master Process Development and Supply Agreement, dated as of September
6, 1996, under which Celanese agreed to perform process development for, and
manufacture and supply to PCYC, bulk texaphyrin compounds (the "Supply
Agreement"); and
WHEREAS, Celanese has succeeded to the entire right, title and interest of
HCC under the Supply Agreement; and
WHEREAS, pursuant to the Supply Agreement, HCC and Celanese performed
process development for those texaphyrin compounds known as Gd-Tex and Lu-Tex;
and
WHEREAS, Celanese and PCYC desire to terminate the Supply Agreement as
provided in this Agreement;
NOW, THEREFORE, Celanese and PCYC hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
meanings set forth below. Capitalized terms not otherwise defined in this
Agreement shall have the meaning ascribed in the Supply Agreement.
1.1 "Drug Substance" means a bulk form of Lu-Tex or Gd-Tex, as applicable.
1.2 "HCC" means Hoechst Celanese Corporation, predecessor-in-interest to
Celanese.
1.3 "Intellectual Property" means all patents, patent applications,
copyrights, trade marks, trade secrets and mask works.
1.4 "Invention Assignment Agreement" means a written agreement between
Celanese and each Inventor, which agreement provides that such Inventor assigns,
or will assign,
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to Celanese all of such Inventor's right, title and interest to all inventions
in the Manufacturing Technology and all Intellectual Property rights thereto.
1.5 "Inventor" means an inventor of an invention in the Manufacturing
Technology.
1.6 "Manufacture" or "Manufacturing" means to manufacture, synthesize,
handle, store, label, package and transport.
1.7 "Manufacturing Documentation" means all original documentation,
whether in written, graphic or electronic form, of the Manufacturing Technology,
including, but not limited to, documentation covering the following:
(a) All information necessary or useful to qualify one or more third
party suppliers and to enable such third party suppliers to Manufacture Gd-Tex,
Lu-Tex, Intermediates and/or Texaphyrins, porphyrins, expanded porphyrins, and
precursors thereof under cGMP conditions;
(b) All QA/QC information generated by or on behalf of Celanese
pursuant to its activities under the Supply Agreement, including without
limitation manufacturing batch records, certificates of compliance and
certificates of analysis;
(c) All information required to demonstrate that the Intermediates
supplied by Celanese pursuant to the Supply Agreement and the MOU meet the
regulatory requirements necessary for the use of such Intermediates in the
Manufacture of drug products to be used in human clinical trials;
(d) Raw data relating to the development and validation of the
Manufacturing Technology that reasonably might be anticipated to be the subject
of regulatory and compliance inspections; and
(e) Draft patent applications and supporting documentation, including
without limitation that certain "Record of Inventions Memo."
Notwithstanding the foregoing, "Manufacturing Documentation" shall be
limited to (i) documentation, whether in graphic, electronic or written form,
that is in Celanese's possession as of the Termination Effective Date, and (ii)
certain documentation specified by PCYC to Celanese.
1.8 "Manufacturing Technology" means all Technology developed, or
conceived of and reduced to practice, solely by or on behalf of Celanese or
jointly by Celanese and PCYC, pursuant to the Supply Agreement and/or the MOU
that is necessary or useful for the Manufacture of Gd-Tex, Lu-Tex, Intermediates
and/or Texaphyrins, porphyrins, expanded porphyrins, and precursors thereof.
1.9 "Manufacturing Patents" means all patent applications prepared by or
on behalf of Celanese that cover inventions within the Manufacturing Technology,
and all patents issuing therefrom. As used in this Section 1.9 and throughout
this Agreement, "patent applications" includes without limitation divisionals,
continuations, and continuations-in-part, and "patents"
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includes without limitation re-issues, re-examinations, extensions, inventor's
certificates and supplementary protection certificates.
1.10 "Supply Agreement" means that certain Master Process Development and
Supply Agreement entered into by and between PCYC and HCC, effective September
6, 1996, which is attached as Schedule 1.10 hereto.
1.11 "Technology" means information, results and data of any type
whatsoever, in any tangible or intangible form, including without limitation
inventions, improvements, processes, developments, practices, methods,
techniques, specifications, formulations, formulae, knowledge, know-how, skill,
experience, trade secrets, test data (including pharmacological, biological,
chemical, biochemical, toxicological and clinical test data), analytical and
quality control data, stability data, studies and procedures.
2. TERMINATION OF SUPPLY AGREEMENT; OFFSET OF COSTS; SURVIVING OBLIGATIONS
2.1 Termination of Supply Agreement. The Parties agree that the Supply
Agreement and the MOU are hereby terminated in their entirety as of the
Termination Effective Date, except as otherwise set forth in Section 2.3 below,
subject to Section 4.1 of this Agreement. For clarity, any purchase orders
placed pursuant to the Supply Agreement that have not been filled, and any
invoice arising under the Supply Agreement that has not been paid by a Party as
of the Termination Effective Date, shall be null, void and of no effect.
2.2 Celanese Payment. Celanese shall pay to PCYC seven hundred fifty
thousand dollars ($750,000) upon execution of this Agreement.
2.3 Surviving Obligations.
(a) Section 11.8 of the Supply Agreement shall survive termination of
the Supply Agreement hereunder to the extent specified in such Section.
(b) Notwithstanding the provisions of Section 12.4(b) of the Supply
Agreement, all Sections of the Supply Agreement except as specifically described
in subsection (a) above shall terminate in their entirety upon the Termination
Effective Date, including without limitation Sections 9.7, 9.10, 9.12, 9.13,
10.6, 11.6, 11.9, 11.10, 11.11, 11.12, 11.13 and 12.2 and Articles 14 and 16 of
the Supply Agreement.
3. TECHNOLOGY TRANSFER
3.1 Assignment of Manufacturing Technology.
(a) Celanese hereby assigns to PCYC, and its successors and assigns,
all right, title and interest in and to the Manufacturing Technology and to all
Intellectual Property rights therein. Celanese represents and warrants that
there are no Manufacturing Patents filed by or on behalf of Celanese as of the
Termination Effective Date. Celanese represents and warrants that it is the
successor in interest to the entire right, title and interest of HCC in and to
the Supply Agreement and that HCC has no rights or claims against PCYC, its
successors or assigns, under the Supply Agreement or the MOU or with respect to
the Manufacturing Technology.
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(b) Celanese shall undertake all necessary actions to perfect PCYC's
title to the Manufacturing Technology, and all Intellectual Property rights
therein, at Celanese's expense. Such actions shall include without limitation
the execution of all necessary documentation of such assignment. In particular,
Celanese will assist PCYC in every proper way to obtain, and from time to time
enforce, United States and foreign Intellectual Property rights relating to the
Manufacturing Technology in any and all countries. To that end Celanese will,
and will cause the applicable Inventors to, execute, verify and deliver such
documents and perform such other acts (including appearances as a witness) as
PCYC may reasonably request for use in applying for, obtaining, perfecting,
evidencing, sustaining and enforcing all such Intellectual Property rights in
the Manufacturing Technology and the assignment thereof. In addition, Celanese
will, and will cause the applicable Inventors to, execute, verify and deliver
assignments of all such Intellectual Property rights to PCYC or its designee. To
the extent that PCYC requests assistance from Celanese under this subsection (b)
at any time beyond ninety (90) days after the Termination Effective Date, such
assistance shall be subject to reasonable reimbursement by PCYC of Celanese's
reasonable costs and expenses, including if appropriate a reasonable
reimbursement for significant time spent by Celanese personnel in providing such
assistance. Reimbursement shall not be required for routine review, verification
and execution of documents.
(c) In the event that PCYC is unable for any reason, after reasonable
effort, to secure the signature from the appropriate Celanese personnel,
contractor or agent on any document needed in connection with the actions
specified in subsection (b) above, Celanese hereby irrevocably designates and
appoints PCYC and its duly authorized officers and agents as Celanese's agent
and attorney in fact, which appointment is coupled with an interest, to act for
and in Celanese's behalf to execute, verify and file any such documents and to
do all other lawfully permitted acts to further the purposes of subsection (b)
above with the same legal force and effect as if executed by Celanese. Celanese
hereby waives and quitclaims to PCYC, and its successors and assigns, any and
all claims, of any nature whatsoever, which Celanese now or may hereafter have
for infringement of any Intellectual Property rights assigned under this
Agreement to PCYC, and hereby covenants that neither Celanese nor its Affiliates
shall bring suit or make any claim against PCYC, or its Affiliates, successors,
assigns or licensees, in connection with any such Intellectual Property rights.
(d) In order to further effectuate subsections (b) and (c) above,
Celanese agrees that PCYC is an intended third party beneficiary of each and
every Invention Assignment Agreement with respect to those provisions of such
agreements pertaining to the assignment of inventions in the Manufacturing
Technology to Celanese. PCYC shall have the right to directly enforce such
provisions against the applicable Inventor, and Celanese shall cooperate and
assist PCYC with such enforcement, at Celanese's expense. Within ten (10) days
of the Termination Effective Date, Celanese shall (i) provide to PCYC a copy of
each and every Invention Assignment Agreement, which copy may be redacted to the
extent necessary to protect Celanese's confidential information unrelated to the
Inventor's assignment to Celanese of an invention in the Manufacturing
Technology and to Celanese's rights in enforcing such assignment, and (ii)
identify to PCYC all inventions in the Manufacturing Technology and the
respective Inventor(s) thereof.
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(e) PCYC shall, in its sole discretion, determine whether to proceed
with the filing, prosecution and/or maintenance of any Manufacturing Patent,
whether prepared by or on behalf of Celanese or otherwise, including without
limitation any decision not to file patent applications in favor of maintaining
the corresponding Manufacturing Technology as a trade secret.
3.2 Manufacturing Documentation. Celanese shall complete documentation of
all Manufacturing Technology and shall provide to PCYC all Manufacturing
Documentation, at Celanese's expense, as promptly as reasonably possible
following the Termination Effective Date, but in no event later than ninety (90)
days following the Termination Effective Date. Celanese hereby assigns to PCYC,
and its successors and assigns, the Manufacturing Documentation and all
Intellectual Property rights therein, with the unrestricted right to use, assign
or dispose of the Manufacturing Documentation as PCYC sees fit in its sole
discretion, including without limitation supplying the Manufacturing
Documentation to any third party supplier for use in the Manufacture of Gd-Tex
or Lu-Tex or Intermediates, and any other Texaphyrins, porphyrins, expanded
porphyrins and precursors thereof.
3.3 Assistance by Celanese Personnel.
(a) Celanese shall assign sufficient personnel to effect the
completion and transfer of the Manufacturing Documentation described in Section
3.2 as expeditiously as reasonably possible. In addition, Celanese shall make
available to PCYC, on a full-time basis and at Celanese's expense, three (3)
individuals to be designated by the Parties (each, a "Designated Individual")
for the purpose of assisting PCYC or its designee in establishing Manufacturing
operations using the Manufacturing Technology (the "Services"). Such Services
shall continue until the earlier of (i) completion of the pilot plant validation
of the Texaphyrin Manufacturing process covered by the Manufacturing Technology
by PCYC or its designee, or (ii) ninety (90) days following the Termination
Effective Date (the "Service Term").
(b) During the Service Term, Celanese shall not cause any Designated
Individual to discontinue providing his or her Services without PCYC's prior
written consent. However, in the event that a Designated Individual becomes
disabled or otherwise becomes unavailable or unable to adequately perform the
Services for reasons beyond Celanese's control, Celanese shall immediately
notify PCYC and the Parties shall promptly meet and agree upon a replacement for
such Designated Individual, which replacement person shall have the equivalent
technical background, knowledge and skill to effectively replace the original
Designated Individual, at Celanese's cost.
(c) All Designated Individuals shall enter into a proprietary
information agreement relating to their Services with PCYC and/or its designee,
at PCYC's request.
(d) Although Celanese shall make available the three individuals
contemplated by sub-paragraph (a) above at no cost to PCYC, PCYC shall reimburse
Celanese for all reasonable, out-of-pocket travel expenses associated with such
activities in accordance with Celanese's usual travel policies, provided that
such expenses are approved in advance by PCYC.
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3.4 Drug Substance and Intermediates. Within thirty (30) days of the
Termination Effective Date, Celanese shall provide to PCYC or its designee
certain Drug Substance and Intermediates to be identified by the Parties. Such
Drug Substance and Intermediates shall be shipped FCA the Celanese Manufacturing
Facility (Incoterms 1990), provided that, except for shipping costs due to the
designated carrier and related insurance costs, such Drug Substance and
Intermediates shall be supplied at Celanese's sole cost and expense. Celanese
shall supply such Drug Substance and Intermediates "as is," except as expressly
agreed otherwise by the Parties in writing. Such Drug Substance and
Intermediates shall be supplied with all documentation relating to the
Manufacture of such Drug Substance and Intermediates, including without
limitation batch records (including deviation reports and cleaning batch
records), Certificates of Analysis and documentation of release by Celanese QA,
where available. All such documentation shall be reviewed and approved, where
appropriate, by Celanese QA.
3.5 Regulatory Matters.
(a) Celanese shall transfer to PCYC or its designee all the records
described in Section 9.7 of the Supply Agreement, at Celanese's expense.
(b) Celanese shall transfer to PCYC or its designee all samples of
Drug Substance as described in Section 9.10 of the Supply Agreement, at
Celanese's expense.
3.6 Audits.
(a) Upon the request of any Governmental Entity, such entity shall
have access to observe and inspect Celanese's facilities and procedures used for
the Manufacture of any Drug Substance, including process development and
Manufacturing operations, and to audit such facilities for compliance with cGMP
and/or other applicable regulatory standards. Celanese agrees to cooperate in
any such audit as reasonably requested. Access to Celanese's facilities may be
subject to restrictions customarily placed upon visitors to the site. If
authorized personnel from a regulatory agency (e.g., FDA ) request access to
Celanese's records or conduct such an inspection, Celanese shall promptly notify
PCYC by telephone. Celanese shall send PCYC copies of all communications between
Celanese and the agency concerning observations related to the records. PCYC
may, but shall not be required to, attend and participate in any such inspection
and/or assist Celanese in responding to any observations made by the agency.
(b) PCYC acknowledges that the Celanese Manufacturing Facility may
cease to be operative, in which event such facility may not be available for
such audits or inspections. Nothing contained in the provisions of Section
3.5(a) above shall obligate Celanese to refrain from dismantling, selling,
scrapping or otherwise disposing of all or any part of the Manufacturing
Facility at any time after the Termination Effective Date, subject to its
obligations under Section 3.5.
3.7 Completion of Technology Transfer. Following Celanese's full, complete
and satisfactory compliance with Sections 3.1, 3.2, 3.3, 3.4 and 3.5 of this
Agreement, and upon Celanese's written request, PCYC shall provide to Celanese a
letter stating that Celanese has completed the transfer of the Manufacturing
Technology.
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4. RELEASE OF CLAIMS
4.1 Mutual Release.
(a) Effective upon the Termination Effective Date, Celanese hereby
forever generally and completely releases and discharges PCYC and its servants,
agents, directors, officers and employees, and all others, of and from any and
all claims and demands of every kind and nature, in law, equity or otherwise,
known and unknown, suspected and unsuspected, disclosed and undisclosed, and in
particular of and from all claims and demands of every kind and nature, known
and unknown, suspected and unsuspected, disclosed and undisclosed, for damages
actual and consequential, past, present and future, arising out of or in any way
related to the Parties' respective obligations, activities and/or dealings with
one another at any time prior to the Termination Effective Date, but excluding
from the foregoing any claims or demands arising out of or in any way related to
claims asserted by third parties.
(b) Effective upon the Termination Effective Date, and subject to
Celanese's payment to PCYC as set forth in Section 2.2 of this Agreement and its
full, complete and satisfactory compliance with Sections 3.1, 3.2, 3.3, 3.4 and
3.5 of this Agreement, PCYC hereby forever generally and completely releases and
discharges Celanese and its servants, agents, directors, officers and employees,
and all others, of and from any and all claims and demands of every kind and
nature, in law, equity or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed, and in particular of and from all claims
and demands of every kind and nature, known and unknown, suspected and
unsuspected, disclosed and undisclosed, for damages actual and consequential,
past, present and future, arising out of or in any way related to the Parties'
respective obligations, activities and/or dealings with one another at any time
prior to the Termination Effective Date, but excluding from the foregoing any
claims or demands arising out of or in any way related to claims asserted by
third parties.
(c) Each Party hereby authorizes a dismissal with prejudice of any
and all causes of action now or hereafter brought by it and arising out of or
related to any matter released pursuant to subsection (a) or (b) above to be
entered on its behalf without further notice by the other Party.
(d) It is understood and agreed that the release set forth in
subsection (a) above, in the case of Celanese, and subsection (b) above, in the
case of PCYC, is a full, complete and final general release of any and all
claims described as aforesaid, and each Party agrees that such release shall
apply to all unknown, unanticipated, unsuspected and undisclosed claims,
demands, liabilities, actions or causes of action, in law, equity or otherwise,
as well as those which are now known, anticipated, suspected or disclosed.
(e) Each Party has been fully advised by its respective attorney of
the contents of section 1542 of the Civil Code of the State of California, and
that section and the benefits thereof, and of any equivalent law or rule in any
other applicable jurisdiction, are hereby expressly waived. Section 1542 reads
as follows:
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"Section 1542. (General Release - Claims Extinguished.) A
general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially
affected his settlement with the debtor."
4.2 Period of Effectiveness. For the avoidance of doubt, the Parties
acknowledge and agree that the releases set forth in Section 4.1 above are
effective only as to claims, demands, liabilities, actions or causes of action,
in law, equity or otherwise, whenever made, arising out of or related to the
activities of the Parties prior to the Termination Effective Date, and shall be
of no force and effect with respect to any claims, demands, liabilities, actions
or causes of action, in law, equity or otherwise, arising out of or in any way
related to this Agreement.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Mutual Representations and Warranties. Each Party hereby represents
and warrants to the other Party that (a) it has the right and capacity to enter
into this Agreement; (b) this Agreement is legal and valid and the obligations
binding upon such Party are enforceable in accordance with their terms; and (c)
that the execution, delivery and performance of this Agreement does not conflict
with any agreement, instrument or understanding, oral or written, to which such
Party may be bound, nor violate any law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it.
5.2 Celanese Representations and Warranties. Celanese hereby represents
and warrants that:
(a) For each invention in the Manufacturing Technology, Celanese has
entered into an effective and binding Invention Assignment Agreement with each
Inventor of such invention, and will within ten (10) days of the Termination
Effective Date provide PCYC with a copy of each such Invention Assignment
Agreement in accordance with Section 3.1(b);
(b) As of the Termination Effective Date, Celanese has no knowledge
of (i) any third party right, title or interest in or to the Manufacturing
Technology, (ii) any third party Intellectual Property right that will be
infringed by PCYC's practice of the Manufacturing Technology as contemplated by
this Agreement, or (iii) any misappropriation of any of the Manufacturing
Technology by any Celanese employee, consultant or agent;
(c) The Manufacturing Documentation to be provided hereunder
comprises the full and complete documentation of the Manufacturing Technology in
the possession of Celanese.
6. INDEMNITY.
6.1 Indemnification by PCYC. Subject to Celanese's compliance with Section
6.3, PCYC agrees to indemnify, defend and hold Celanese and its directors,
officers, employees and agents harmless from and against any damages, claims,
liabilities and expenses (including, but not limited to, reasonable attorneys'
fees) resulting from any third party claims, demands or suits arising out of (a)
the Manufacture, distribution, marketing or sale of a Drug Substance or Product
by PCYC or its sublicensees, (b) PCYC's breach of any of its warranties or
representations
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hereunder or (c) PCYC's negligent or reckless acts or omissions or willful
misconduct (collectively, "General Claims Against Celanese"). Notwithstanding
the foregoing, PCYC will not be required to indemnify, defend and hold Celanese
or its directors, officers, employees and agents harmless from and against any
General Claims Against Celanese to the extent that such claims arise out of (i)
Celanese's breach of any of its warranties or representations hereunder, or (ii)
Celanese's negligent or reckless acts or omissions or willful misconduct,
including without limitation, with respect to Celanese's Manufacture of
Intermediates or Drug Substance.
6.2 Indemnification by Celanese. Subject to PCYC's compliance with Section
6.3, Celanese agrees to indemnify, defend and hold PCYC and its directors,
officers, employees and agents harmless from and against any damages, claims,
liabilities and expenses (including, but not limited to, reasonable attorneys'
fees) resulting from any third party claims, demands or suits arising out of (a)
Celanese's breach of any of its warranties or representations hereunder; or (b)
Celanese's negligent or reckless acts or omissions or willful misconduct,
including without limitation, with respect to Celanese's Manufacture of
Intermediates or Drug Substance (collectively, "General Claims Against PCYC").
Notwithstanding the foregoing, Celanese will not be required to indemnify,
defend and hold PCYC or its directors, officers, employees and agents harmless
from and against any General Claims Against PCYC to the extent that such claims
arise out of (i) PCYC's breach of any of its warranties or representations
hereunder, or (ii) PCYC's negligent or reckless acts or omissions or willful
misconduct.
6.3 Indemnification Procedures. A Party (the "Indemnitee") which intends
to claim indemnification under this Article 6 shall promptly notify the other
Party (the "Indemnitor") in writing of any action, claim or other matter in
respect of which the Indemnitee or any of its Affiliates, or any of their
respective directors, officers, employees or agents intend to claim such
indemnification; provided, however, the failure to provide such notice within a
reasonable period of time shall not relieve the Indemnitor of any of its
obligations hereunder except to the extent the Indemnitor is prejudiced by such
failure. The Indemnitee shall permit, and shall cause its Affiliates and their
respective directors, officers, employees and agents to permit, the Indemnitor,
at its discretion, to settle any such action, claim or other matter. The
Indemnitee agrees to the complete control of such defense or settlement by the
Indemnitor; provided, however, such settlement does not adversely affect the
Indemnitee's rights hereunder or impose any obligations on the Indemnitee in
addition to those set forth herein in order for it to exercise such rights. No
such action, claim or other matter shall be settled without the prior written
consent of the Indemnitor, and the Indemnitor shall not be responsible for any
attorneys' fees or other costs incurred other than as provided herein. The
Indemnitee, its Affiliates, and their respective directors, officers, employees
and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any action, claim or other
matter covered by this indemnification. The Indemnitee shall have the right, but
not the obligation, to be represented by counsel of its own selection and at its
own expense.
7. CONFIDENTIALITY.
7.1 Confidentiality and Exceptions - PCYC Information. Except as set forth
below, (i) all information disclosed by PCYC to Celanese pursuant to this
Agreement, the Supply Agreement or the MOU, and (ii) the Manufacturing
Technology and the Manufacturing Documentation, collectively shall be deemed to
be "Confidential Information" of PCYC.
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Confidential Information shall include, but not be limited to, information
relating to the structure of any Drug Substance or Intermediate, any know-how
relating to the manufacture of any Drug Substance, and the manufacturing cost
and other financial arrangements made pursuant to this Agreement. Celanese
agrees that it will take the same steps to protect the confidentiality of the
PCYC Confidential Information as it takes to protect its own proprietary and
confidential information, which shall in all events be no less than reasonable.
Celanese and its employees and agents shall protect and keep confidential and
shall not use, publish or otherwise disclose to any third party, except as
permitted by this Agreement, or with PCYC's written consent, the PCYC
Confidential Information. For the purposes of this Agreement, "PCYC Confidential
Information" shall not include such information that can be proved by competent
evidence to have been:
(a) already known to Celanese at the time of disclosure by PCYC,
other than under an obligation of confidentiality; or
(b) generally available to the public or otherwise part of the public
domain at the time of disclosure, or became generally available to the public or
otherwise part of the public domain after disclosure other than through any act
or omission of Celanese in breach of this Agreement; or
(c) lawfully disclosed to Celanese, other than under an obligation of
confidentiality, by a third party who had no obligation not to disclose such
information to others; or
(d) developed by or for Celanese, other than in connection with the
Supply Agreement or this Agreement, without the aid, application or use of PCYC
Confidential Information by persons who did not access the PCYC Confidential
Information; or
(e) disclosed to a third party by PCYC without an obligation of
confidentiality.
7.2 Authorized Disclosure - PCYC Information. Celanese may disclose PCYC
Confidential Information hereunder solely to the extent such disclosure is
necessary for prosecuting or defending litigation or complying with applicable
government regulations, provided that if Celanese desires to make such
disclosure or is required by law or regulation to make any such disclosure of
the PCYC Confidential Information it will, except where impracticable for
necessary disclosures, for example in the event of medical emergency, give
reasonable advance notice to PCYC of such disclosure requirement and will
cooperate fully with PCYC's efforts to secure a protective order or confidential
treatment of such PCYC Confidential Information required to be disclosed.
Celanese shall not disclose PCYC Confidential Information in any patent filings
without the prior written consent of PCYC.
7.3 Confidentiality and Exceptions - Celanese Information. Except as set
forth below, all information disclosed by Celanese to PCYC, or accessed by PCYC
by virtue of the presence of its employees at the Manufacturing Facility,
related to the business, technology or research activities of Celanese,
including all non-public information regarding Celanese's operations at the
Corpus Christi Technical Center, but specifically excluding from the foregoing
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all PCYC Confidential Information, collectively shall be deemed to be
"Confidential Information" of Celanese. PCYC agrees that it will take the same
steps to protect the confidentiality of the Celanese Confidential Information as
it takes to protect its own proprietary and confidential information, which
shall in all events be no less than reasonable. PCYC and its employees and
agents shall protect and keep confidential and shall not use, publish or
otherwise disclose to any third party, except as permitted by this Agreement, or
with Celanese's written consent, the Celanese Confidential Information. For the
purposes of this Agreement, "Celanese Confidential Information" shall not
include such information that can be proved by competent evidence to have been:
(a) already known to PCYC at the time of disclosure by Celanese,
other than under an obligation of confidentiality; or
(b) generally available to the public or otherwise part of the public
domain at the time of disclosure, or became generally available to the public or
otherwise part of the public domain after disclosure other than through any act
or omission of PCYC in breach of this Agreement; or
(c) lawfully disclosed to PCYC, other than under an obligation of
confidentiality, by a third party who had no obligation not to disclose such
information to others; or
(d) independently developed by or for PCYC without the aid,
application or use of Celanese Confidential Information by persons who did not
access the Celanese Confidential Information; or
(e) disclosed to a third party by Celanese without an obligation of
confidentiality.
7.4 Authorized Disclosure - Celanese Information. PCYC may disclose
Celanese Confidential Information hereunder solely to the extent such disclosure
is necessary for prosecuting or defending litigation or complying with
applicable government regulations, provided that if PCYC desires to make such
disclosure or is required by law or regulation to make any such disclosure of
the Celanese Confidential Information it will, except where impracticable for
necessary disclosures, for example in the event of medical emergency, give
reasonable advance notice to Celanese of such disclosure requirement and will
cooperate fully with Celanese's efforts to secure a protective order or
confidential treatment of such Celanese Confidential Information required to be
disclosed. PCYC shall not disclose Celanese Confidential Information in any
patent filings without the prior written consent of Celanese.
7.5 Confidentiality and Publicity. The Parties agree that, except as may
otherwise be required by applicable laws, regulations, rules, or orders, and
except as may be authorized in Section 7.2 or 7.4, no information concerning
this Agreement and the transactions contemplated herein shall be made public by
either Party without the prior written consent of the other. The Parties agree
that the public announcement of the execution of this Agreement shall be by one
or more press releases mutually agreed to by the Parties.
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7.6 Survival of Confidentiality. All obligations of confidentiality and
non-use imposed upon the Parties under this Agreement shall continue
indefinitely until such time as the information that is subject to such
obligations no longer comprises Confidential Information under one of the
exceptions set forth in Section 7.1 or 7.3.
8. GENERAL PROVISIONS.
8.1 Notice. All notices under this Agreement must be made in writing and
mailed or delivered to the following:
PCYC: Pharmacyclics, Inc.
995 E. Arques Avenue
Sunnyvale, California 94086-4521
Attention: Senior Vice President, Business Development
with a copy to:
Legal Department
Pharmacyclics, Inc.
995 E. Arques Avenue
Sunnyvale, California 94086-4521
Celanese: Celanese Ltd.
1601 West LBJ Freeway
Dallas, Texas 75234
Attention: General Counsel
with a copy to:
Celanese Ltd.
Corpus Christi Technical Center
Clarkwood Road
Corpus Christi, Texas
Attention: Facility Manager
8.2 Assignment. This Agreement may not be assigned or otherwise
transferred by either Party without the prior written consent of the other
Party; provided, however, either Party may, without such consent, assign this
Agreement (a) in connection with the transfer or sale of all or substantially
all of the assets of such Party or the line of business of which this Agreement
forms a part, or (b) in the event of the merger or consolidation of a Party
hereto with another company. Any purported assignment in violation of the
preceding sentence shall be null, void and of no effect. No assignment shall
relieve either Party of responsibility for the performance of any obligation
which accrued prior to the effective date of such assignment. This Agreement
shall be binding upon, and shall inure to the benefit of, the respective
successors and permitted assigns of the Parties. Nothing in this Section 8.2
shall restrict or limit the right of PCYC, its successors and assigns, to own,
use, transfer, assign and otherwise dispose of the Manufacturing Technology and
the Manufacturing Documentation, in its or their absolute discretion.
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8.3 Applicable Law. This Agreement will be interpreted in accordance with
the state laws of Delaware, as such laws are applied to contracts entered into
between Delaware residents to be performed entirely in Delaware.
8.4 Severability. If any portion of this Agreement is held invalid by a
court of competent jurisdiction, such portion will be deemed to be of no force
and effect and the Agreement will be construed as if such portion had not been
included herein.
8.5 Entire Agreement. This Agreement, together with its Schedules,
contains the sole and entire understanding of the Parties related to its subject
matter and supersedes all prior or contemporaneous oral or written agreements
concerning the subject matter. Where a conflict exists between this Agreement
and the Supply Agreement, this Agreement shall control.
8.6 Modification. This Agreement cannot be changed orally and no
modification of this Agreement will be recognized or have any effect, unless the
writing in which it is set forth is signed by Celanese and PCYC, nor will any
waiver of any of the provisions of this Agreement be effective unless in writing
and signed by the Party to be charged therewith.
8.7 Waiver. The failure of either Party to enforce, at any time, or for
any period of time, the provisions hereof or the failure of either Party to
exercise any option herein will not be construed as a waiver of such provision
or option and will in no way effect that Party's right to enforce such
provisions or exercise such option. No oral waiver of any provision hereof will
be deemed a waiver of any succeeding breach of the same or any other provisions
of this Agreement.
8.8 Disclaimer of Consequential Damages. In no event shall either Party be
liable to the other Party for incidental, special or consequential damages,
including, but not limited to, any claim for damages based upon lost profits.
8.9 Headings. The headings herein are for the purpose of convenience of
reference only and are not intended to define or limit the contents of this
Agreement.
8.10 Force Majeure. Any delays in performance by any Party under this
Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the Party
affected, including but not limited to acts of God, embargoes, fire, flood,
explosion, riots, wars, civil disorder, rebellion or sabotage. The Party
suffering such occurrence shall immediately notify the other Party as soon as
practicable, and any time for performance hereunder shall be extended by the
actual time of delay caused by the occurrence.
8.11 Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against either Party, regardless of which Party is deemed to have
authored such provision.
8.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by the respective duly authorized officers as of the date first written above.
CELANESE LTD.
By: /s/ KNUT ZEPTNER
-----------------------------------
Knut Zeptner
President and Chief Executive Officer
PHARMACYCLICS, INC.
By: /s/ RICHARD A. MILLER
-----------------------------------
Richard A. Miller, M.D.
President and Chief Executive Officer
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SCHEDULE 1.10
SUPPLY AGREEMENT
15
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<TABLE>
<S> <C> <C>
1. DEFINITIONS.......................................................................... 1
1.1 "Drug Substance"........................................................... 1
1.2 "HCC"...................................................................... 1
1.3 "Intellectual Property".................................................... 1
1.4 "Invention Assignment Agreement"........................................... 1
1.5 "Inventor"................................................................. 2
1.6 "Manufacture" or "Manufacturing"........................................... 2
1.7 "Manufacturing Documentation".............................................. 2
1.9 "Manufacturing Patents".................................................... 2
1.10 "Supply Agreement"......................................................... 3
1.11 "Technology"............................................................... 3
2. TERMINATION OF SUPPLY AGREEMENT; OFFSET OF COSTS; SURVIVING OBLIGATIONS............. 3
2.1 Termination of Supply Agreement............................................ 3
2.2 Celanese Payment........................................................... 3
2.3 Surviving Obligations...................................................... 3
3. TECHNOLOGY TRANSFER................................................................. 3
3.1 Assignment of Manufacturing Technology..................................... 3
3.2 Manufacturing Documentation................................................ 5
3.3 Assistance by Celanese Personnel........................................... 5
3.4 Drug Substance and Intermediates........................................... 6
3.5 Regulatory Matters......................................................... 6
3.6 Audits..................................................................... 6
3.7 Completion of Technology Transfer.......................................... 6
4. RELEASE OF CLAIMS................................................................... 7
4.1 Mutual Release............................................................. 7
4.2 Period of Effectiveness.................................................... 8
5. REPRESENTATIONS AND WARRANTIES...................................................... 8
5.1 Mutual Representations and Warranties...................................... 8
5.2 Celanese Representations and Warranties.................................... 8
</TABLE>
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<TABLE>
<S> <C> <C>
6. INDEMNITY........................................................................... 8
6.1 Indemnification by PCYC.................................................... 8
6.2 Indemnification by Celanese................................................ 9
6.3 Indemnification Procedures................................................. 9
7. CONFIDENTIALITY..................................................................... 9
7.1 Confidentiality and Exceptions - PCYC Information.......................... 9
7.2 Authorized Disclosure - PCYC Information................................... 10
7.3 Confidentiality and Exceptions - Celanese Information...................... 10
7.4 Authorized Disclosure - Celanese Information............................... 11
7.5 Confidentiality and Publicity.............................................. 11
7.6 Survival of Confidentiality................................................ 12
8. GENERAL PROVISIONS.................................................................. 12
8.1 Notice..................................................................... 12
8.2 Assignment................................................................. 12
8.3 Applicable Law............................................................. 13
8.4 Severability............................................................... 13
8.5 Entire Agreement........................................................... 13
8.6 Modification............................................................... 13
8.7 Waiver..................................................................... 13
8.8 Disclaimer of Consequential Damages........................................ 13
8.9 Headings................................................................... 13
8.10 Force Majeure.............................................................. 13
8.11 Ambiguities................................................................ 13
8.12 Counterparts............................................................... 13
</TABLE>
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