Distributorship Agreement - Ligand Pharmaceuticals Inc. and Ferrer Internacional SA
DISTRIBUTORSHIP AGREEMENT
This Distributorship Agreement ("Agreement"), is entered into as of March 26,
1999 between:
LIGAND PHARMACEUTICALS, INCORPORATED, a corporation organized and existing under
the laws of the State of Delaware, U.S.A., with its principal place of business
at 10275 Science Center Drive, San Diego, California, U.S.A. and SERAGEN, INC. a
Delaware corporation having its principle place of business at 97 South Street,
Hopkinton, Massachusetts (collectively referred to herein as "Ligand")
and
FERRER INTERNACIONAL, S.A, a corporation organized and existing under the laws
of Spain with its principal place of business at Gran Via Carlos III, 94,
Barcelona, Spain ("Distributor")
W I T N E S S E T H:
A. Ligand is a leading researcher, developer and manufacturer of
biopharmaceutical products, including the Products, and is the exclusive
owner or licensee of proprietary rights in such Products.
B. Distributor is engaged in the marketing of pharmaceutical products and
has represented to Ligand that it has the facilities, personnel and
technical expertise to market and distribute the Products in the
Territory.
C. Ligand is willing to exclusively sell Products in the Territory to
Distributor on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the following
meanings:
1.1 "Affiliate" means any corporation or business entity which, directly or
indirectly, is controlled by, controls, or is under common control with
Ligand or Distributor, as applicable. For this purpose, "control"
includes, but is not limited to, direct or indirect ownership of more
than fifty percent (50%) of the voting shares or stock of such
corporation or business entity.
1.2 "Approvals" means and includes all filings, approvals, registrations,
permits, licenses and authorizations related to Product pricing or
marketing activities which are necessary or
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which, in the reasonable opinion of Ligand, are desirable, to be made
with or obtained from any Governmental Authority for the sale of the
Products in the Territory, including, without limitation, any pricing
approvals, government reimbursement approvals, import permits and
approvals concerning Distributor's facilities, but excluding Product
Authorizations.
1.3 "Base Price" means, with respect to each Product, the price set forth in
Attachment B.
1.4 "Confidential Information" means any and all data, trade secrets,
confidential knowledge, specifications, clinical data and protocols and
other proprietary information, not in the public domain, relating to the
Products and/or the business or affairs of either party (the "Disclosing
Party"). Confidential Information shall also include the present
Agreement and the terms set forth herein to the extent that it has not
been placed into the public domain by the Disclosing Party. Confidential
Information may be communicated to the other party (the "Receiving
Party") orally, visually, in writing, or in any other recorded or
tangible form. All data and information will be considered to be
Confidential Information hereunder (1) if the Disclosing Party has
marked them as such, (2) if the Disclosing Party, orally or in writing,
has advised the Receiving party of the confidential nature, provided
that, if disclosed orally, the Disclosing Party confirms such
confidential nature in writing within two weeks thereafter; or (3) if,
due to their character or nature, a reasonable person in a like position
and under like circumstances as the Receiving Party would treat them as
secret and confidential.
1.5 "Dealer" means a sub-distributor, agent or marketing representative of
Distributor.
1.6 "Effective Date" means the date of this Agreement as designated in
preamble to this Agreement on the first page.
1.7 [Reserved]
1.8 "Governmental Authority" means and includes all governmental and
regulatory bodies, agencies, departments or entities, whether or not
located in the Territory, which regulate, direct or control commerce in
or with the Territory.
1.9 "Intellectual Property Rights" means and includes all copyrights,
designs, databases, mask works, patents, trademarks, trade names and
other proprietary rights, and all registrations and applications
therefor, which Ligand may at any time own, adopt, use, license or
register with respect to a Product or its business, and includes the
Trademarks.
1.10 [Reserved]
1.11 "Person" means and includes any agency, association, company,
individual, or other entity regardless of the type or nature thereof.
1.12 "Product Authorizations" means and includes all filings, approvals,
registrations and
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authorizations relating to pharmaceutical or medicinal products which
are necessary or which, in the reasonable opinion of Ligand, are
desirable, to be made with or obtained from any Governmental Authority
in order for Distributor to lawfully market, promote, offer for sale and
sell the Products in the Territory, but excluding Approvals.
1.13 "Products" means the biopharmaceutical products manufactured by or on
behalf of Ligand, for the indications and applications specified, which
are listed in Appendix A, as amended by Ligand from time to time by
written notice to Distributor; and shall include all line extensions and
modified or improved versions of such products from time to time.
1.14 "Resale Price" means the price from the Distributor, as determined by
the Spanish Governmental Authorities ("Precio de Venta Laboratorio"), as
reduced by:
(a) freight, shipping and insurance with respect to such Products;
(b) sales, excise or similar taxes imposed on the sale of the
Products;
(c) any mandatory or industry standard discounts or rebates to the
competent Governmental Authorities and/or Social Security Systems
pursuant to the regulations and/or agreements in force; and
(d) cash and trade discounts and allowances as customarily applied to
products of a similar kind in the pharmaceutical industry in the
relevant country within the Territory;
but in no event may the quarterly total deductions to the Precio de
Venta Laboratorio in any country of the Territory exceed 5% of the
Precio de Venta Laboratorio, and in any case deductions may be taken
only if they are paid by Distributor or actually charged against
Distributor and evidenced in Distributor's books and records of account
and the reports provided to Ligand pursuant to Clause 9.3 hereof. If no
such price has been approved by the Spanish Governmental Authorities,
Resale Price shall mean the average, same distribution level price
agreed upon by Ligand or its other distributors for the relevant
Products with the Governmental Authorities in the first three European
Union Member States where the relevant Product is sold. If Product
prices have been approved in fewer than three European Union Member
States, the Resale Price shall be the average price in such fewer
countries or, if there is no such country, a price mutually agreed upon
by the parties.
1.15 "Technical Assistance" means and includes advice, training, information
and other support regarding the manufacture, specifications, clinical
trials and marketing specifically related to the Products.
1.16 "Term" means the term of this Agreement as determined in accordance with
Clause 3.1 and, where the context permits, includes the extensions as
per Clause 3.2 .
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1.17 "Territory" means the geographic area comprising the countries in
Central and South America, as listed on Appendix D.
1.18 "Trademarks" means the trademarks owned or licensed and designated by
Ligand for the Products in Appendix C, as well as any substitute marks
that are used for the Products in accordance with Clause 12.2.
2. GRANT OF RIGHTS
2.1 Distribution Rights: Subject to the terms and conditions of this
Agreement, Ligand grants to Distributor, and Distributor accepts, the
exclusive right to market the Products in the Territory. Right to market
under this Agreement shall mean the Distributor's right (1) to hold
itself out as Ligand's exclusive authorized distributor in the
Territory; (2) to acquire the Products from Ligand for resale to
customers on its own account in the Territory; and (3) to appoint
Affiliates of Distributor or other third parties (deemed) approved by
Ligand as Dealers in the Territory; provided, however, that (a)
Distributor shall obtain an executed copy of a sub-distributor or dealer
agreement, in a form containing terms and conditions substantially
similar to the terms and conditions of this Agreement, from the relevant
Dealer; and (b) Distributor shall notify Ligand in writing of the
desired appointment of any third party Dealer and, at Ligand's request,
provide Ligand with adequate background information on such Dealer.
Unless Ligand reasonably objects to such appointment within thirty
calendar days after its receipt of such notice and information, Ligand
shall be deemed to have given the requisite approval to the appointment.
2.2 Additional Rights: Ligand further grants Distributor the royalty-free
and (except as to Ligand) exclusive right to use the Confidential
Information, the assistance and information related thereto pursuant to
Clause 4.4, and the Trademarks solely to the extent reasonably necessary
for the distribution and marketing of the Products within the Territory
in accordance with this Agreement.
2.3 Independent Contractors: The relationship of Ligand and Distributor
established by this Agreement is of seller and buyer, or independent
contractors, and nothing in this Agreement shall be construed: (1) to
give either party the power to direct or control the daily activities of
the other party, or (2) to constitute the parties as principal and
agent, partners, or otherwise as participants in a joint undertaking.
Ligand shall have no obligation or authority, express or implied, to
exercise any control whatsoever over the employees or the business
affairs of Distributor. Except as specifically provided in this
Agreement, Distributor shall have no power or authority to make or give
any representation or warranty or to incur any liability or obligation,
or to waive any right, on Ligand's behalf.
2.4 Ligand's Rights: Ligand reserves the right to modify and/or to
discontinue developing or producing the Products at its discretion at
any time either (1) due to legal or regulatory requirements,
administrative or court orders, or safety risks, or (2) so long as the
Product in question is also withdrawn from the European or the North
American market for a justified and reasonable motive; provided,
however, that Ligand shall notify Distributor as soon as
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practicable after any such modification or discontinuance and that
Distributor shall be entitled to market any modified versions of
Products pursuant to the terms of this Agreement. Nothing in this
Agreement shall be deemed to restrict Ligand from selling the Products
or other products to Persons outside the Territory for use within the
Territory, nor from appointing distributors in countries outside the
Territory who may be permitted, by operation of law, to sell the
Products in the Territory, and Distributor shall receive no compensation
for such sales by Ligand or any other distributor; provided, however,
that Ligand shall impose upon its other distributors restrictions on
their active marketing of the Products in the Territory equivalent to
restrictions placed upon Distributor's active marketing of Products
outside the Territory in this Agreement, to the extent such restrictions
are legally permissible.
2.5 Ligand Exclusive Supplier: During the Term, Distributor shall purchase
all of its requirements of the Products from Ligand or any party
designated by Ligand for this purpose.
3. TERM
3.1 Term: The term of this Agreement shall commence on the Effective Date
and shall continue, with respect to a particular Product, for a period
of ten years from the date of first sale of that particular Product to
Distributor anywhere in the Territory after the Product Authorization is
obtained for such Product, unless the Agreement is earlier terminated in
accordance with Clause 16.
3.2 Extensions: Ligand and Distributor agree that, at least one year before
the expiration of the initial ten-year term of the Agreement, they shall
engage in good faith discussions for a period not to exceed six months
concerning the extension of the term of the Agreement for the relevant
Product(s) for a period of three to five years at commercial terms and
conditions to be negotiated during the six month discussion period.
4. AUTHORIZATIONS
4.1 Distributor to Use Diligent Efforts to Apply for and Pursue Product
Authorizations: Following the issuance of any Product Authorization by
the FDA, the EMEA, or any other Governmental Authority and in
consultation with Ligand, Distributor shall be responsible for, and
shall use diligent efforts to, file applications for, pursue and
maintain, in each country within the Territory, during the Term, all
Product Authorizations. All Product Authorizations shall be in Ligand's
name, whenever legally permissible, unless otherwise agreed to by
Ligand. Distributor shall obtain Ligand's prior approval of all
applications and submissions to any Governmental Authority in respect of
any Product Authorization. Distributor shall keep Ligand informed, in
writing, of the status of its applications for Product Authorizations on
a regular basis, and in any event no less frequently than once every
three months, and shall immediately notify Ligand in writing of any
substantial change in the status of any Product Authorization or any
substantive questions received from any Governmental Authority in
respect of such Product Authorizations. Distributor
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shall provide copies of all Product Authorizations to Ligand at its
request. If at any time there is a choice in respect of the appropriate
type of such Product Authorization to be obtained or maintained in
respect of any one or more of the Products, Ligand may, in its sole and
absolute discretion, exercise such choice and shall direct Distributor
as to the appropriate Product Authorization to be requested. If Ligand,
at its sole discretion, informs Distributor that it does not intend to
apply for any requisite Product Authorization in any country in the
Territory, Distributor may give Ligand written notice of its intention
to seek such Product Authorization on its own and shall have the right
to do so, unless Ligand proceeds with or authorizes the filing on its
behalf within thirty calendar days after its receipt of Distributor's
notice. In any given case when Distributor seeks Product Authorization,
Ligand shall provide Distributor with all reasonably necessary and
available clinical data, documentation and assistance to such effect.
4.2 Distributor to Apply for Approvals: Distributor, at its cost, shall file
applications for and maintain Approvals for all Products listed on
Appendix A in effect as of the Effective Date in each country in the
Territory during the Term. If Distributor believes that any application
for Approval for any particular future Product or indication that may be
included within the scope of this Agreement is not economically
justified, Ligand may proceed with the application at its own cost and,
upon issuance of the Approval, Distributor shall market the Product in
the country concerned, if Ligand so requests. Distributor shall
immediately notify Ligand in writing of any substantial change in the
status of any Approval or any substantive questions received from any
Governmental Authority in respect of such Approvals. Distributor shall
provide copies of all Approvals to Ligand.
4.3 Pricing Approvals: Without limiting the generality of Clause 4.2, any
applications, submissions, negotiations and agreements with any
Governmental Authority on Product prices will require Ligand's prior
consent provided, however, that Ligand shall give its consent if the
price from the Distributor to the wholesalers in the relevant country of
the Territory is not less than ***percent of the price as determined by
the Spanish Governmental Authorities ("Precio de Venta Laboratorio").
4.4 Ligand to Provide Assistance: Ligand shall provide such assistance as
Ligand may deem reasonably necessary to Distributor in respect of
Distributor's Product Authorization and Approval obligations under
Clauses 4.1, 4.2 and 4.3, and in particular shall provide:
(a) written materials and information concerning the Products,
including copies, or summaries, of materials prepared for
submission to the United States and Europe (or, at Ligand's
discretion, Central or South American) Governmental Authorities
concerning the Products or their labeling, to the extent that
Ligand is legally and contractually permitted or required to do
so, for Distributor's use in obtaining Product Authorizations in
respect of each of the Products; and
(b) access to such clinical data and documentation in respect of the
Products generated by research and trials funded by Ligand or to
which Ligand may have access with
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the right to disclose, as Ligand may deem reasonably necessary,
to be relevant and useful to Distributor in obtaining Product
Authorizations in respect of each Product.
4.5 Distributor to Bear Costs: Subject to Clauses 4.1 and 4.6 below,
Distributor shall be responsible for all costs and expenses associated
with filing for and maintaining Product Authorizations and Approvals,
including, without limitation, the Base Price of Product supplied by
Ligand and the costs of any clinical trials conducted by or on behalf of
Distributor for the purposes of any Product Authorizations, unless
otherwise agreed in writing between the parties prior to such costs
being incurred.
4.6 Clinical Trial Program: The parties agree to jointly evaluate the merits
of a clinical trial program for one or more of the Products for severe,
recalcitrant, plaque psoriasis vulgaris.
4.7 No Marketing of Products without Product Authorizations: Except to the
extent permitted by law and as may be agreed in writing between the
parties, Distributor shall not market, promote, offer for sale or sell
any one of the Products unless and until Distributor obtains the
appropriate Product Authorizations in respect of such Product. In the
event that Distributor is legally permitted, due to an individual
pre-approval in respect of any Product, to market any Product prior to
obtaining the relevant Product Authorization, Distributor shall not do
so without obtaining the prior written consent of Ligand, which will not
be unreasonably withheld.
5. ORDERS AND FORECASTS
5.1 Forecasts: In order to permit Ligand and its suppliers to allocate their
manufacturing capacity, Distributor shall provide Ligand with written
4-quarter rolling forecasts of its Product requirements. Such forecast
shall be broken down by Product, quantities, and shipping dates, and
shall be delivered to Ligand not later than one hundred twenty days
prior to the beginning of each calendar quarter (commencing after
Distributor has obtained the first Product Authorization and Approval in
respect of any Product). Ligand shall either accept or reasonably reject
such forecasts within thirty days after receipt. Any forecast accepted
by Ligand or not rejected within that period shall be binding on the
Parties as follows: Unless otherwise agreed, Distributor shall order,
and Ligand shall supply, one hundred percent of the quantities forecast
for the first calendar quarter and between eighty and one hundred twenty
percent of the quantities forecast for the next quarter. Quantities
forecasts for subsequent quarters shall be non-binding indications for
production schedules, only, until included in subsequent quarterly
forecasts.
5.2 Orders: Purchase of Products by Distributor hereunder shall be made only
pursuant to written orders executed by Distributor, and shall be for a
minimum of the Distributor's quarterly requirements for the Territory.
The orders of Panretin(TM) Gel, Ontak(TM) and Targretin(TM) Gel shall
separately specify the labeling requirements so as to allow Ligand to
label those products before shipment. The orders shall be accepted in
writing by Ligand at the offices specified in Clause 19.7. Subject to
Clause 5.1 above, no order shall be binding upon Ligand until accepted
by Ligand in writing. Subject to Clause 5.1 above, Ligand
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reserves the right to accept or reject any order, offer or request for
Products in its sole discretion. The terms and conditions of this
Agreement shall apply to all orders placed by Distributor and shall
override and supersede any different or additional terms on orders from
or any general conditions maintained by Distributor. All orders must be
received by Ligand from Distributor at least 120 days prior to the
desired shipment date. If any order for quarters 2, 3 or 4 of a forecast
exceeds the forecasts for that calendar quarter provided by Distributor
under Clause 5.1 hereof by more than twenty percent (20%), Ligand shall
use its reasonable efforts, but shall not be obligated, to ship the
requested quantities of Products, with the normal lead time stated
above. If the order cannot be fully shipped, Ligand will notify
Distributor by the end of that period, and the parties will jointly
determine an appropriate shipment schedule.
5.3 Shipment Frequency: The Products shall be shipped at a frequency no
greater than once per month with a minimum purchase price to Distributor
of $ *** U.S. provided, however, that Distributor may request shipments
at a frequency greater than once per month at the same minimum purchase
price during the first year of the Agreement.
5.4 Inventory Requirements: Distributor shall maintain a reasonable supply
of Products adequate to serve the appropriate customer base in each
country of the Territory from time to time. For the first six months
beginning with the first sale of a Product, such inventory shall be
sufficient to cover not less than a three month supply of Ontak(TM),
Panretin(TM) and Targretin(TM) Products based on Distributor's
forecasts. Thereafter, the inventory may be reduced to a two months
supply.
5.5 Cancellation and Rescheduling. Ligand will use its reasonable best
efforts to honor any request of Distributor to reschedule shipment of
any order accepted by Ligand. For Panretin(TM) and Targretin(TM)
capsules, orders for bulk capsules or capsules in unlabeled bottles
accepted by Ligand may be canceled by Distributor, provided that
Distributor cancels the order at least forty five (45) days in advance
of the shipment date and pays a cancellation charge equal to *** of the
order price. No cancellation shall be allowed for any other Products
once a firm order has been accepted by Ligand.
5.6 Terms of Shipment and Transfer of Title. All shipments of Products shall
be made in Ligand's standard shipping packages CIF Distributor's
designated port of entry in Spain or such other port of entry agreed
upon by the parties. Unless otherwise agreed in writing between the
parties, Ligand shall select the method of shipment and the carrier, and
Distributor shall be responsible for all actions and documents necessary
to obtain clearance to import the Products into the Territory. Ligand
shall retain title to the Products until full payment of the Base Price
for the Products is irrevocably credited to Ligand's bank account, and
Distributor shall store all Products in its facilities so that they are
readily identifiable as Ligand's Products.
5.7 Product Availability. Ligand will use its reasonable efforts to deliver
to Distributor the
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Products in the quantities and at the dates specified on the orders
submitted by Distributor and accepted by Ligand; provided, however, that
Ligand (1) reserves the right to allocate the Products equitably among
its customers in the event of a shortage of any Products; and (2) shall
not be liable to Distributor for any delay in delivery without Ligand
being at fault.
6. REGISTRATION SERVICES AND PAYMENTS
6.1 Initial Service Reimbursement: On execution of this Agreement
Distributor shall make a non-refundable initial payment to Ligand in the
sum of US$ *** as reimbursement for services rendered in the
registration of the Products in the Territory.
6.2 Additional Service Reimbursement : On either (a) the date on which
Distributor obtains the first Product Authorization for Panretin or
Targretin, but not for Ontak, in any country in the Territory; or (b)
September 30, 1999, whichever is the earlier, Distributor shall make a
non-refundable payment to Ligand in the sum of US$ *** as reimbursement
for services rendered in the registration of the Products in the
Territory.
6.3 [Reserved]
6.4 Product Pricing: Ligand shall supply the Products CIF to the port of
entry designated pursuant to Clause 5.6. For all Products supplied,
Distributor shall pay to Ligand the Base Price. All payments under this
Agreement shall be made in United States dollars. Where payment must be
converted into U.S. dollars from another currency, the conversion shall
be made based on the applicable exchange rate as published on the
European Central Bank's Web Site for the date of Ligand's invoice.
6.5 Payment of Base Price: Unless otherwise agreed in writing by Ligand,
Distributor shall pay the invoiced estimated Base Price for each order
of Products under this Agreement within forty-five calendar days' net by
international wire transfer to the bank identified by Ligand from time
to time. If Distributor at any time has become delinquent, Ligand shall
have the right to make sales contingent upon Distributor's payment by
irrevocable letter of credit confirmed by a major US merchant bank and
payable in United States Dollars (US$) by draft at sight against
delivery of bill of lading (which may be marked "freight collect" and
which shall permit transshipments and partial shipments), commercial
invoice and packing list.
6.6 Payment Reconciliation: Within ninety (90) days of the end of each
calendar quarter (commencing after Distributor has made the first sale
of any Product), the amounts paid by Distributor to Ligand under Clause
6.5 shall be adjusted as follows:
(a) Distributor or Ligand, as the case may be, shall pay or credit to
the other, the amount, if any, by which the estimated Base Prices
paid by Distributor to Ligand under Clause 6.5 differ from the
Base Prices payable by Distributor after deducting the
deductions, not to exceed 5% of the Precio de Venta Laboratorio,
actually paid or charged against Distributor pursuant to Clause
1.14 during that quarter.
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6.7 Late Payments: Whenever a late payment is due to a cause attributable to
a party, all amounts not paid to the other party when due shall accrue
interest daily at the lesser of an annual rate of twelve percent (12%)
or the highest rate permissible by law on the unpaid balance until paid
in full.
6.8 Taxes. All amounts payable to Ligand under this Agreement are exclusive
of any income, sales, use, property, ad valorem, value added or other
taxes, levies, imposts, duties, charges or withholdings of any nature
(collectively, "Taxes"), arising out of any transaction contemplated by
this Agreement and imposed against Distributor or the Products by any
taxing authority in the Territory (excluding, however, any Taxes on, or
measured solely by, the net income of Ligand and Taxes imposed on Ligand
in the United States). Distributor shall pay all applicable Taxes or
provide Ligand with a certificate of exemption acceptable to the
relevant taxing authority, and shall also be liable for all bank charges
levied in connection with payments made to Ligand (excluding, however,
any bank charges levied by Ligand's bank). In the event that any
payments to Ligand under this Agreement are subject to any withholding
taxes, Distributor shall promptly provide all tax certificates,
applications and related documents to Ligand. If Ligand is required to
pay any Taxes in the Territory, other than Taxes imposed upon the
payments under Clause 6.1 or 6.2, Distributor shall promptly reimburse
Ligand upon written request therefor.
7. MARKETING AND PROMOTION
7.1 Marketing Plans: At least six (6) months prior to the anticipated date
on which the relevant Product Authorization and Approval shall be issued
in respect of each Product, Ligand and Distributor shall consult in good
faith to determine an appropriate marketing plan in respect of each
Product for the Territory. All such marketing plans shall be harmonized
with, and shall not prejudice, Ligand's global and regional marketing
strategies covering the Territory. Distributor shall be responsible for
implementing such marketing plans and for advertising and promoting each
Product within the Territory from the dates on which it obtains the
relevant Product Authorization and Approval for each Product.
Distributor shall at all times adhere to the policies set by Ligand in
the execution of mutually agreed upon annual marketing plans for the
Products, including any marketing plans which Ligand wishes to implement
among its distributors in other territories and which are set by Ligand
and agreed to by Distributor in good faith provided, however, that
Distributor, at its sole discretion (but in accordance with any relevant
Approvals in the Territory in respect of pricing), may determine the
resale prices for the Products and the terms and conditions of
distribution.
7.2 Marketing Materials. In the promotion and marketing of the Products,
Distributor shall develop sales literature and promotional materials
provided to Distributor by Ligand pursuant to Clause 7.3. Distributor
shall have the right to prepare other product descriptions and other
promotional and marketing materials relating to the Products; provided
however,
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that (1) all costs and expenses incurred by Distributor in the
preparation and distribution of such product descriptions and other
promotional and marketing materials shall be borne solely by
Distributor; and (2) all such product descriptions and other promotional
and marketing materials shall not be released by Distributor until
approved in writing by Ligand, such approval not to be unreasonably
withheld. Distributor shall submit samples of final copy for all key
product descriptions and other promotional and marketing materials it
proposes to use in respect of the Products for Ligand's approval within
sixty (60) days prior to the first date of anticipated use of such
materials. Ligand shall use its reasonable efforts to respond to any
such request for approval within thirty (30) days of its receipt
thereof. If no written response is given by Ligand denying such request
within the aforesaid term, then Ligand's approval shall be deemed
granted.
7.3 Product Literature: To the extent that it is legally and contractually
permitted to do so, Ligand will share with Distributor samples of
product descriptions, sales aids and advertising and promotional
materials developed and used by Ligand, its other distributors or
licensees (collectively "Promotional Materials") in respect of each
Product as soon as practicable. Distributor shall bear all costs of
reproducing and/or adapting such Promotional Materials for use within
the Territory, and shall not use any adaptations of such Promotional
Materials without Ligand's prior approval of such adaptations. Likewise,
Distributor agrees to share samples of its Promotional Materials with
Ligand and Ligand's other distributors and licensees.
7.4 Rights to Reproductions: All translations, reproductions, adaptations
and creations of derivative works of all of Ligand's Promotional
Materials (collectively "Reproductions") created by Distributor will be
created as "works made for hire" with Ligand as the hirer, and copyright
and all other proprietary rights in all of the Reproductions shall vest
in Ligand from the date of completion thereof by Distributor. To the
extent that any Reproductions do not qualify as "works made for hire",
then Distributor hereby assigns to Ligand all copyrights and all other
proprietary rights in the Reproductions to Ligand. In this event,
Distributor will, at Ligand's request, execute any assignment or "work
made for hire" documents and shall take all other steps as necessary or
appropriate to perfect copyrights and all other proprietary rights in
the Reproductions in the name of Ligand. If, notwithstanding the
foregoing, Ligand, for any reason, is deemed not to own all rights,
title, and interest in and to the Reproductions, Distributor shall be
automatically considered to have granted to Ligand a royalty-free,
perpetual and transferable license to use, distribute, translate and
reproduce the Reproductions. Such license shall be exclusive to Ligand
and shall survive the expiration or termination of this Agreement for
any reason whatsoever.
7.5 Sales Assistance: Whenever Ligand considers it reasonably necessary in
order to maintain or increase the volume of sales of Products in the
Territory, Ligand shall be entitled to send, at its own cost,
representatives to visit Distributor or Distributor's customers or
prospective customers. Ligand shall keep Distributor informed of
promotional methods and techniques used by Ligand in respect of the
Products.
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8. OBLIGATIONS OF DISTRIBUTOR
8.1. Diligent Efforts: Distributor shall use its diligent efforts to market
and sell the Products within the Territory at its own expense, including
but not limited to professional sales calls on target medical audiences
(e.g. physicians, hospitals, pharmacists, etc.), advertising the
Products in appropriate media and participating in trade shows,
conferences, expositions, and promotional seminars, all with due
consideration for the local marketing environment in the Territory.
Distributor shall conduct its marketing activities in a lawful manner
with the highest standards of pharmaceutical product promotional
practices, fair trade, fair competition, and business ethics, and shall
cause its employees and Dealers to do the same.
8.2. Offices and Personnel. Distributor shall maintain offices adequate to
market and support the Products in the Territory and shall retain and
have at its disposal at all times an adequate staff of trained and
qualified personnel to perform its obligations under this Agreement.
8.3. Dealers: Distributor may only appoint Affiliates or other third parties
pursuant to the terms and conditions set forth in Clause 2.1. Any such
appointment shall be made in writing and only in the name and for the
account of Distributor, and shall terminate upon the expiration,
non-renewal, or termination of this Agreement for any reason; provided,
however, that:
(a) Distributor shall not undertake to grant to any Dealer any rights
greater than those which are granted by Ligand to Distributor
under this Agreement;
(b) In order to protect the goodwill of Ligand and the Products in
the Territory, Distributor shall secure the agreement of each and
every Dealer that it shall assume the same obligations as have
been assumed by Distributor under this Agreement; and
(c) Distributor shall defend, indemnify and hold Ligand harmless
against any claim, loss, liability or expense (including
attorney's fees and court costs) arising out of or based upon (1)
any act or omission of any Dealer, or (2) any claim made by any
Dealer against Ligand.
8.4. Alterations: Distributor shall ensure that the Products are distributed,
sold, and advertised in the form and with the labeling or marking
designated by Ligand and in accordance with the applicable regulations
in the Territory and, in particular, shall not alter, remove, or deface
any Trademark. Distributor acknowledges that it shall have no right to
sell any products under Ligand's name or trademark if they were not
originally manufactured or supplied by, or on behalf of, Ligand.
8.5. Clinical Evaluations: Prior to conducting any clinical evaluation of any
of the Products, Distributor shall furnish to Ligand, for its prior
review and written approval, the protocols for such evaluation written
in the English language. Ligand shall use its reasonable efforts to
respond to any such written request for approval within ninety (90) days
of its receipt thereof, granting its approval or, if duly and reasonably
justified, denying it. If no written notice is given by Ligand denying
its approval within the aforesaid term, then Ligand's
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approval shall be deemed granted. Results from any such clinical
evaluation shall not be publicly disclosed or disclosed in confidence to
any third party without Ligand's prior written approval, such approval
not to be unreasonably withheld.
8.6 Insurance. Both parties shall obtain and at all times during the term of
this Agreement maintain, and bear the cost of, liability insurance
which, in the judgment of Ligand, is adequate to cover their respective
obligations under this Agreement. A certificate of insurance and any
other documentation necessary to prove compliance with this provision
will be provided to the other party upon request.
9. REPORTING OBLIGATIONS
9.1 Foreign Laws and Regulations: In addition to its obligations under
Clauses 4.1, 4.2 and 4.3 to provide Product Authorization and Approval
information, Distributor shall advise Ligand of any legislation, rule,
regulation or other law (including but not limited to any customs, tax,
foreign exchange or foreign trade, antimonopoly, pharmaceutical products
or intellectual property law) which is in effect or which may come into
effect in the Territory after the date of this Agreement and which may
affect the importation of the Products into the Territory or the use of
the Products or the protection of Ligand's Intellectual Property Rights
therein.
9.2 Record Keeping: At all times during the term of this Agreement,
Distributor shall maintain at its principal place of business full,
complete and accurate books of account and records with regard to its
activities under this Agreement, including, without limitation, records
of all sales of the Products including the names of customers to whom
Products are sold and total gross sales and net sales for each calendar
quarter. Upon reasonable notice, and not more than twice a year,
Distributor shall grant Ligand or its representatives access during
normal business hours to any premises of Distributor in order that
Ligand, at its expense, may inspect Distributor's books and premises
related to the Products for the sole purpose of verifying and enforcing
compliance by Distributor with its obligations under this Agreement;
provided, however, that Distributor shall reimburse Ligand for the full
amount of the inspection costs if any inspection under this Clause 9.2
reveals any substantial breach by Distributor of this Agreement,
provided that Ligand shall have the burden of establishing any such
substantial breach.
9.3 Reports: Distributor shall provide Ligand with quarterly operation
reports of Distributor's activities to register, develop and market the
Products in the Territory, and shall provide to Ligand copies of all
such reports received by Distributor from Dealers. Each such report
shall be due within thirty (30) days after the end of the period to
which it relates. Each report shall include:
(a) a monthly compilation of all Products distributed by Distributor,
including the revenues derived therefrom and a breakdown of the
prices charged in respect of each Product; and
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(c) a monthly list of the amount of inventory on hand; and
(d) monthly gross and net sales on a per Product, per country basis
in local currency and U.S. dollars, using the average exchange
rate set forth in the European Central Bank's Web Site for the
month.
9.4 Annual Statements: Distributor shall provide Ligand with annual
statements within thirty (30) days after the end of each calendar year
showing annual sales figures and the amount of inventory on hand as at
December 31 of each year, and shall provide to Ligand copies of all such
annual statements received by Distributor from Dealers. Such annual
statements shall also contain a summary of all promotional activities
undertaken by Distributor with respect to the Product during the
preceding calendar year, and current credit references.
9.5 Exchange of Adverse Event Information: The recipient of Adverse Event
(AE) reports and/or data, either Distributor or Ligand, will mutually
exchange and promptly provide in writing, using the latest applicable
International Conference on Harmonization of Technical Requirements for
Registration of Pharmaceuticals for Human Use (ICH) and Council for
International Organizations of Medical Sciences (CIOMS) guidelines for
reporting, any adverse event information obtained by the receiving party
associated with the use of the Products either as a result of marketed
use or from investigational clinical trials:
(a) Without limiting the foregoing, the party that is the original
recipient of AE information relating to incidents of serious and
unexpected reactions and/or events associated with the use of any
of the Products, as defined by the ICH and/or CIOMS guidelines,
shall make an initial written report of that information to the
other party, via facsimile, not more than 72 hours following
receipt of that information. A full written report, following the
content and format guidelines indicated in the applicable current
ICH and CIOMS guidelines, is to be sent to and received by the
other party within seven (7) days following the date the initial
recipient receives such AE information.
(b) Distributor shall also provide Ligand with routine quarterly and
annual adverse event reports and/or safety data received from any
source in the Territory, using the ICH guidelines for the content
and format for these types of reports. These reports are intended
to be used for and incorporated into Periodic Safety Update
Reports [PSUR] as defined by ICH guidelines. Ligand will provide
a copy of each of the Products' complete PSUR to the Distributor
within five (5) days of submission of the applicable Product's
PSUR to the U.S. regulatory authorities.
(c) Distributor shall be responsible for submitting the adverse
event/ medical safety (safety surveillance) reports in the
countries of the Territory as required by the regulatory
authorities. Ligand will hold and maintain the Central AE/ safety
database for the Products and reports based on this database, as
necessary to meet the requirements of regulatory authorities in
the Territory, will be made available
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to Distributor during the agreement life. Without limiting the
generality of the foregoing, Distributor shall cooperate with
Ligand for the development of standard operating procedures for
exchange of information concerning Adverse Events and Product
safety information derived from Products use in the Territory and
each party shall at all times comply with the procedures so
developed.
(d) For all of the reports specified above, the language of all
exchange between and among the Parties will be English.
Distributor will provide Ligand all of the above-required AE
reports to the following address:
Ligand Medical Safety
Ligand Pharmaceuticals Inc.
10275 Science Center Drive
San Diego, California 92121 U.S.A.
Tel: 1 (619) 550-7588
Fax: 1 (619) 550-1860
Ligand will provide Distributor all of the above-required AE
reports to the following address:
Ferrer Group
Pharmacoepidemiology and Safety
Medical Department
Gran Via Carlos III, 86
08028 Barcelona Spain
Tel: +34 93 330 61 11
Fax: +34 93 490 70 78
9.6 Recall Procedures: Ligand will provide Distributor with a copy of
Ligand's standard operating procedure for recalls of products.
Distributor acknowledges the importance of the development and the
observance of correct procedures in case of recalls. Distributor shall
cooperate with Ligand for the development of recall standard operating
procedures and shall at all times comply with the procedures so
developed and adhere to Ligand's instructions from time to time and
always in accordance with mandatory requirements applicable in the
Territory.
10. PRODUCT AUTHORIZATIONS
10.1 Distributor acknowledges that Ligand cannot and does not guarantee the
issuance of any Product Authorization for any or all of the Products in
any country in the Territory.
11. COVENANTS OF DISTRIBUTOR
11.1 Restrictions: To the extent permissible by law, Distributor is
prohibited from:
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(a) Advertising, circulating price lists or otherwise soliciting
orders for the Products, and from establishing or maintaining
branches, sales offices or distribution depots, outside the
Territory for the distribution of the Products;
(b) During the term of this Agreement, seeking the Approval for, or
marketing, (a) any products of a third party for a registration
indication of CTCL or, (b) any oral or topical product of a third
party for a registration indication of Kaposi's Sarcoma, except
as agreed by the parties.
12. INTELLECTUAL PROPERTY RIGHTS
12.1 Acknowledgment: Distributor acknowledges Ligand's exclusive right, title
and interest in and to any and all Intellectual Property Rights
pertaining to the Products. Distributor shall not at any time during or
after the term of this Agreement take any act or step impairing the
Intellectual Property Rights or do anything that may otherwise adversely
affect the Intellectual Property Rights, provided that any good faith
legal challenge shall not be deemed to be such an act or step.
12.2 Notices, Trademarks and Name. Distributor shall have the royalty-free
and (except as to Ligand) exclusive right to use in the Territory, and
shall use where available, the trademarks in Appendix C designated by
Ligand for each Product. If no trademark in Appendix C is available for
a Product in a country of the Territory and Ligand is unable or elects
not to provide an alternative trademark, then Distributor shall have the
right to secure, in Ligand's name and for its benefit, trademark rights
to a substitute mark for the Products in the relevant country and Ligand
will reimburse Distributor for the pre-approved expenses of securing
such rights. The rights to the substitute mark shall remain with the
Product it is used for and shall be transferred accordingly in the event
that corresponding Product rights are transferred. Distributor shall not
alter, deface, remove, cover, mutilate, or add to, in any manner
whatsoever, any patent notice, copyright notice, trademark, trade name,
serial number, model number or brand name that Ligand may attach or
affix to the Products. Distributor shall not market the Products under
any name, sign or logo other than the Trademarks approved by Ligand.
Distributor may use the Trademarks solely in connection with the
distribution of the Products and in accordance with Ligand's
instructions and quality control standards from time to time, and will
execute any document reasonably requested by Ligand in connection with
the use and maintenance of the Trademarks in the Territory. Distributor
acknowledges and agrees that it shall not have any rights in respect of
the Trademarks except to the extent expressly granted in this Agreement,
and that all use of the Trademarks in the Territory and all goodwill in
the Trademarks shall inure to the benefit of Ligand.
12.3 Third Party Claims: Distributor shall promptly notify Ligand of any
claims or objections that its use of the Intellectual Property Rights in
connection with the marketing, support or service of the Products may or
will infringe the copyrights, patents, trademarks or other proprietary
rights of another Person ("Third Party Claim"). If Distributor is served
with a legal action or otherwise forced to respond in a legal proceeding
due to a Third Party Claim,
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Distributor shall (1) without delay, tender the defense of such Third
Party Claim to Ligand; and (2) render Ligand all reasonable assistance,
at Ligand's expense, in connection with the defense of any such third
party claim or objection, whether in the courts, before administrative
agencies, or otherwise. If Ligand refuses to assume the defense of a
Third Party Claim, Distributor shall have the right to defend itself
against such Third Party Claim, in which case Ligand shall render
Distributor all reasonable assistance, at Ligand's expense. Distributor
shall not, except as required by law, knowingly make any admission to
jeopardize, compromise or otherwise limit the validity of Intellectual
Property Rights.
12.4 Infringement of Intellectual Property Rights: Distributor shall promptly
notify Ligand of any infringement or suspected infringement of
Intellectual Property Rights in the Territory relating to the Products
of which it becomes aware, and provide Ligand with any available
evidence of such infringement or suspected infringement.
(a) Enforcement by Ligand: Ligand, at its option, shall be entitled
to institute enforcement proceedings ("Enforcement Proceedings")
in respect of any infringement or unauthorized use of
Intellectual Property Rights in the Territory. Distributor agrees
to provide all reasonable co-operation and assistance to Ligand
in relation to any such Enforcement Proceedings (and agrees to be
named as a party if legally required). Any reasonable fees and
costs borne by Distributor shall be reimbursed by Ligand. Ligand
shall be entitled to deduct its reasonable expenses in relation
to such Enforcement Proceedings (including reasonable attorney's
fees and expenses and reimbursements to Distributor) from any
recovery and any remaining amount shall be distributed pro rata
among the parties in which Distributor shall receive 50% of any
remaining recovery and Ligand shall receive 50% of any remaining
recovery.
(b) Enforcement by Distributor: If, after six (6) months of receipt
of credible evidence of infringement or unauthorized use of
Intellectual Property Rights in the Territory or such lesser
period of time if further delay would result in a loss of right
to bring an Enforcement Proceeding, Ligand elects not to
institute or continue an already instituted, Enforcement
Proceeding then Distributor, using attorneys of Distributor's
choosing reasonably acceptable to Ligand, can undertake or
continue such Enforcement Proceeding at Distributor's expense. In
such event, Distributor shall keep Ligand fully and timely
informed of the action so as to enable Ligand to provide input
which Distributor shall reasonable consider. Distributor may not
enter into any settlement agreement or consent to judgement
relating to the invalidity, unenforceability or noninfringement
of the Intellectual Property Rights without Ligand's prior
written consent. Ligand agrees to provide all reasonable
co-operation and assistance to Distributor in relation to any
such Enforcement Proceeding at Distributor's expense and agrees
to be named as a party in any Enforcement Proceeding. Any
reasonable fees and costs borne by Ligand shall be reimbursed by
Distributor. If Distributor enforces Intellectual Property Rights
in the Territory in accordance with this paragraph, Distributor
shall be entitled to deduct its reasonable expenses in relation
to such Enforcement Proceeding (including reasonable
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attorney's fees and expenses and reimbursements to Ligand) from
any recovery and any remaining amount shall be distributed pro
rata among the parties in which Distributor shall receive 50% of
any remaining recovery and Ligand shall receive 50% of any
remaining recovery.
13. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
13.1 Non-Disclosure Obligations: During the term of this Agreement, the
Disclosing Party will disclose certain Confidential Information to the
Receiving Party to permit the Receiving Party to perform its obligations
under this Agreement. The Receiving Party shall refrain from using or
exploiting any and all Confidential Information for any purposes or
activities other than those expressly authorized in this Agreement. The
Receiving Party agrees that such Confidential Information shall be kept
secret by the Receiving Party during the term of this Agreement and
after the expiration hereof. The Receiving Party shall disclose
Confidential Information only to its agents, representatives or
employees with a need to know and shall implement appropriate security
measures in order to avoid the disclosure or misappropriation of such
Confidential Information.
13.2 Confidentiality Agreements: Both parties shall cause each of their
directors, officers and employees and the directors, officers and
employees of, respectively, Distributor's Dealers and agents, and
Ligand's assignees, who will receive Confidential Information pursuant
to Clause 13.1 to enter into a Confidentiality Agreement in a form
approved by both parties. The Distributor and Ligand, respectively,
shall at their own expense undertake the enforcement of any such
Confidentiality Agreement in the event of any breach thereof. Execution
of Confidentiality Agreements by the parties shall not, however, be
construed as limiting their duties or obligations hereunder.
13.3 Ownership of Ligand's Materials. All files, lists, records, documents,
drawings, specifications and records, whether in written or electronic
form, which incorporate or refer to all or a portion of Ligand's
Confidential Information shall remain the sole property of Ligand. Such
materials shall be promptly returned (1) upon Ligand's reasonable
request, or (2) in accordance with Clause 17.2 of this Agreement upon
termination of this Agreement, whichever is earlier.
13.4 Exceptions. The provisions of this Clause 13 shall not apply, or cease
to apply, to information supplied by Ligand if it (1) was already known
to Distributor; (2) came into the public domain without breach of
confidence by Distributor or any other Person; (3) was received by
Distributor from a third party without restrictions on their use in
favor of Ligand; or (4) is required to be disclosed pursuant to any
statutory or regulatory provision or court order; provided that
Distributor shall have the burden of establishing any of the foregoing
exceptions.
14. LIGAND WARRANTY, INDEMNITY, AND LIMITATIONS OF LIABILITY
14.1 Non-Infringement. To the best of Ligand's knowledge, the sale and use of
the Products
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does not infringe the proprietary rights of any third party in the
Territory, and no court proceedings or any other procedure for
infringement of patent, copyright, trademark, trade secret or any other
property rights have been brought against Ligand with respect to the
Products as of the effective date of this Agreement. Ligand makes no
warranty or representation, implied or otherwise, that the Products
and/or their sale or use will not infringe the property rights of any
third party in the Territory.
14.2 Products Warranty: Ligand warrants that all Products supplied hereunder
shall (1) conform to the products specifications therefor, as published
by Ligand from time to time consistent with the data contained in the
Product Authorizations, and (2) have a shelf life of one year or more
(or in the case of Ontak, nine months or more) from the date of shipment
to Distributor. The aforementioned shelf life terms shall be
proportionally increased from time to time in accordance with improved
stability data.
14.3 Indemnity: Ligand shall defend, indemnify and hold Distributor and its
shareholders, managers, officers, directors, agents and employees
harmless against any and all losses, damages, claims, liabilities, costs
and expenses (including reasonable attorney's fees) resulting solely
from the personal injury or death caused by the defective design and/or
manufacture of the Products when supplied to Distributor by Ligand or by
Ligand's appointee, provided that Distributor promptly notifies Ligand
in writing of any claim, action or suit potentially giving rise to the
indemnification obligation hereunder. Ligand shall have the sole and
absolute control of, and discretion in, the handling of the defense
and/or settlement of any such claim, action or suit, including, without
limitation, the selection of defense counsel, and Distributor shall
fully cooperate with Ligand in the defense and settlement of all such
claims, actions or suits, provided, however, that Distributor may take
any appropriate action necessary to preserve or avoid prejudice to its
interests, or the interests of Ligand as indemnitor, in the event that
(1) notice to Ligand cannot be given in sufficient time for Ligand to
take action, or (2) Ligand, after prompt notice and inquiry from
Distributor, fails to acknowledge its obligation to indemnify
Distributor under this clause.
14.4 DISCLAIMERS. TO THE FULL EXTENT PERMITTED BY LAW, APART FROM THE
FOREGOING WARRANTIES AND INDEMNITY, LIGAND MAKES NO ADDITIONAL
REPRESENTATIONS OR WARRANTIES AND HEREBY DISCLAIMS ALL WARRANTIES,
REPRESENTATIONS, AND LIABILITIES, WHETHER EXPRESS OR IMPLIED, ARISING
FROM CONTRACT OR TORT (EXCEPT FRAUD), IMPOSED BY STATUTE OR OTHERWISE,
RELATING TO THE PRODUCTS AND/OR ANY PATENTS OR TECHNOLOGY USED OR
INCLUDED IN THE PRODUCTS, INCLUDING ANY WARRANTIES AS TO
MERCHANTABILITY, FITNESS FOR PURPOSE, CORRESPONDENCE WITH DESCRIPTION,
OR NON-INFRINGEMENT.
14.5 LIMITATION. IN NO EVENT WILL LIGAND BE LIABLE FOR CONSEQUENTIAL,
INCIDENTAL OR SPECIAL DAMAGES, INCLUDING ANY LOSS OF PROFITS, EVEN IF
LIGAND HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
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DAMAGES.
14.6 LIABILITY CAP. IN NO EVENT SHALL LIGAND'S LIABILITY TO DISTRIBUTOR
EXCEED AN AMOUNT EQUAL TO THE AGGREGATE BASE PRICES PAID BY DISTRIBUTOR
TO LIGAND FOR PRODUCTS DURING THE LAST CALENDAR QUARTER, except that
this liability limitation shall not apply to Ligand's indemnity
obligation under section 14.3 arising from personal injury or death
caused by the defective design and/or manufacture of the Products when
supplied to Distributor by Ligand or by Ligand's appointee.
15. DISTRIBUTOR'S WARRANTIES, INDEMNITY AND LIMITATIONS OF LIABILITY
15.1 Warranties: Distributor represents and warrants to Ligand that:
(a) Distributor is a corporation duly organized, validly existing and
in good standing under the laws of Spain and has the corporate
power to execute this Agreement and to perform its obligations
hereunder;
(b) the person or persons executing this Agreement on behalf of
Distributor have been duly authorized to do so by all requisite
corporate or other actions of Distributor;
(c) this Agreement is the legal, valid and binding obligation of
Distributor, enforceable in accordance with its terms;
(d) the execution, delivery and performance of this Agreement by
Distributor does not and will not conflict with or result in a
breach of any agreement, instrument or understanding, oral or
written, to which Distributor is a party or by which Distributor
may be bound, nor violate any law or regulation of any court or
Governmental Authority having jurisdiction over Distributor;
(e) Distributor will maintain at all times during this Agreement all
necessary Approvals, according to Clause 4.2; and
(f) all Affiliates of Distributor are duly organized, validly
existing and in good standing under the laws of the country in
which they operate and have the power to perform all obligations
under this Agreement that they are assigned by Distributor.
15.2 Indemnity: Distributor shall indemnify and hold Ligand and its
shareholders, managers, officers, directors, agents and employees
harmless against any and all losses, damages, claims, liabilities, costs
and expenses (including reasonable attorneys' fees) resulting from any
breach by Distributor of this Agreement so declared by a court of
competent jurisdiction or as agreed between the parties, or resulting
from any claim that may be made by reason of any damage caused by an act
or omission of Distributor or any of its shareholders, managers,
officers, directors, agents or employees whenever such act or omission
is in connection with this Agreement, contrary to the law and is so
declared by
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a court of competent jurisdiction or as agreed between the parties.
15.3 LIMITATION. IN NO EVENT WILL DISTRIBUTOR BE LIABLE FOR CONSEQUENTIAL,
INCIDENTAL OR SPECIAL DAMAGES, INCLUDING ANY LOSS OF PROFITS, EVEN IF
DISTRIBUTOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
16. TERMINATION
16.1 Termination by Ligand: Ligand may terminate this Agreement, at its sole
discretion: (1) in its entirety; or (2) in respect of any specified part
of the Territory and/or any one or more of the Products only, by giving
Distributor thirty (30) days written notice of termination, effective on
the date such notice is received, in the event that:
(a) Distributor breaches any of its material obligations under this
Agreement, and fails to cure such breach within thirty (30) days
of receiving a written notice from Ligand specifying such breach
and requiring it to be cured;
(b) Distributor takes any act or step impairing the Intellectual
Property Rights or does anything that may otherwise adversely
affect the Intellectual Property Rights of Ligand, provided,
however, that Ligand may exercise its rights of termination
pursuant to this Clause 16.1(b) whether or not the Distributor's
legal challenge of Ligand's rights is in good faith;
(c) Distributor enters into insolvency or bankruptcy or is unable to
pay its debts as they fall due, or a trustee or receiver or the
equivalent is appointed to Distributor, or proceedings are
instituted against Distributor in the Territory relating to
dissolution, liquidation, winding up, bankruptcy, insolvency or
the relief of creditors, if such proceedings are not terminated
or discharged within thirty days;
(d) there is a change of control of Distributor, beyond its corporate
structure and owners on the Effective Date, or a sale or
disposition by Distributor to a third party other than its owners
and companies in its corporate structure on the Effective Date of
substantially all of its assets, without the prior written
approval of Ligand, which approval may be given or withheld in
Ligand's sole discretion. For the purposes of this Clause
16.1(d), the transfer (whether direct or indirect) of all or a
majority of the capital stock of Distributor or the merger,
consolidation or reorganization of Distributor beyond its
corporate structure and owners on the Effective Date shall be
considered a "change in control" of Distributor;
(e) any event of Force Majeure, as defined in Clause 19.6 hereof,
occurs and prevents Distributor from performing its obligations
under this Agreement for a period of 90 days or more, provided
there is no commercially reasonable alternative;
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(f) Distributor ceases to carry on business in the marketing of
pharmaceutical products in the Territory;
(g) any law, decree, or regulation is enacted within the Territory
which would substantially impair or restrict (1) Ligand's right
to terminate or elect not to renew this Agreement as herein
provided; (2) Ligand's right, title or interest in the Products
or the Intellectual Property Rights therein; or (3) Ligand's
right to collect the purchase prices for the Products as set
forth in this Agreement; or
(h) an adverse event occurs which has substantially impaired the
ability of Distributor to continue to perform its obligations
hereunder and Distributor is unable to provide Ligand with
adequate assurance of future performance.
16.2 Termination by Distributor: Distributor may terminate this Agreement, at
its sole discretion: (1) in its entirety; or (2) in respect of any
specified part of the Territory and/or one or more of the Products only,
by giving Ligand thirty (30) days written notice of termination,
effective on the date such notice is received, in the event that:
(a) Ligand breaches any of its material obligations under this
Agreement, and fails to cure such breach within thirty (30) days
of receiving a written notice from Distributor specifying such
breach and requiring it to be cured;
(b) any event of Force Majeure, as defined in Clause 19.6 hereof,
occurs and prevents Ligand from performing its obligations under
this Agreement for a period of 90 days or more, provided there is
no commercially reasonable alternative;
(c) the Governmental Authorities have not issued the requisite
Product Authorization or Approval for any Product for any country
in the Territory;
(d) any law, decree, or regulation is enacted within the Territory
which would substantially impair or restrict (1) Distributor's
right to terminate or elect not to renew this Agreement as herein
provided; (2) Ligand's right, title or interest in the Products
or the Intellectual Property Rights therein; or (3) Distributor's
right to market and distribute the Products in accordance with
this Agreement; or
(e) an adverse event occurs which has substantially impaired Ligand's
ability to continue to perform its obligations hereunder and
Ligand is unable to provide Distributor with adequate assurance
of future performance.
17. RIGHTS AND OBLIGATIONS UPON TERMINATION/NONRENEWAL
17.1 Cessation of Rights: Upon expiration or termination (collectively, the
"Termination") of this Agreement for any reason whatsoever as provided
herein all rights and obligations of the parties hereunder shall cease,
except as provided in Clauses 19.5 of this Agreement; provided, however,
that Termination of this Agreement shall not relieve the parties hereto
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of any obligations accrued prior to said Termination. Distributor,
following notice of Termination by Ligand, shall be entitled to purchase
under the terms and conditions of this Agreement, any Products the
orders for which were accompanied by payment and which were accepted by
Ligand prior to the effective date of Termination, even though shipment
of the Products may be made subsequent to the date of Termination,
provided that Distributor has paid all outstanding obligations to
Ligand. Upon Termination by Ligand pursuant to Clauses 16.1, Distributor
shall immediately cease to use any advertising or promotional materials
relating to the Products and discontinue any previously authorized use
of the Trademarks and Confidential Information (except for activities
permitted by the last sentence of Clause 17.3), and shall cease all
conduct that might cause any Person to believe that Distributor is a
distributor of the Products or otherwise connected with Ligand.
17.2 Return of Materials and Customer List: Upon Termination, Distributor
shall promptly return to Ligand, or deliver to a third party designated
by Ligand, and shall cause its Dealers and employees to return or
deliver, all sales materials, Confidential Information in written,
recorded or other tangible form and other items in Distributor's
possession, which Ligand has furnished or supplied to Distributor, or
which Distributor has furnished to its Dealers and employees, and all
customer lists for Ligand Products. If Distributor purchased any such
materials or other items, Distributor shall be reimbursed in an amount
equal to the net price paid by Distributor for the same.
17.3 Repurchase of Inventory: Ligand shall have the option, exercisable at
its sole discretion by written notice to Distributor within thirty (30)
days after Termination, to repurchase all or part of Distributor's
remaining inventory of Products. The price payable by Ligand upon the
exercise of the option shall be the net price paid by Distributor to
Ligand for the Products, plus the costs of re-shipment to San Diego,
California, or to such other destination within the Territory as Ligand
may designate. Upon receipt of Ligand's notice of exercise of its option
pursuant to this clause, Distributor shall ship its inventory of
Products on hand to such location as Ligand may designate. If Ligand
does not exercise its rights under this clause, Distributor shall have
the right to sell its existing inventory for a period of six (6) months
following the date of Termination.
17.4 Product Authorizations, Trademarks and other Product rights: Upon
Termination of this Agreement as provided herein for any reason
whatsoever, Distributor shall immediately take all steps necessary to
transfer to Ligand, or to Ligand's designee, any and all rights
Distributor may have to Product Authorizations, Trademarks and any other
rights associated with the Products, to the extent permitted by
applicable law and at Distributor's cost. Distributor shall, at the time
for application for Product Authorizations, take all reasonable steps to
ensure that such transfers may later be completed. If such transfer is
not possible, Distributor shall use its best efforts to arrange for
Ligand or its designee to rely upon such Product Authorizations and
shall permit Ligand or its designee to use and reference such Product
Authorizations in its own applications.
17.5 Survival of Non-Disclosure Obligation: Notwithstanding the Termination
of this Agreement, both Parties shall continue to abide by the terms of
its non-disclosure
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obligations with respect to Confidential Information under Clause 12
of this Agreement.
17.6 Waiver of Termination Compensation: Neither Party shall be liable for,
and each Party hereby waives, all right to compensation and all claims
of any kind whether on account of the loss by the other of present or
prospective profits, or anticipated orders, or expenditures,
investments, or commitments made in connection with this Agreement,
goodwill created, or on account of any other cause whatsoever.
18. CERTAIN PAYMENTS
18.1 No Payments: Distributor shall not make, offer or agree to offer
anything of value to any government official, political party or
candidate for government office. Distributor undertakes that there is
not now nor will there be any employment of or beneficial ownership of
Distributor by governmental or political officials in the Territory.
Distributor will indemnify and hold harmless Ligand against any and all
losses, costs, expenses or liabilities resulting from any breach by
Distributor of its obligations under this Clause 18.
19. GENERAL PROVISIONS
19.1 Waivers: The waiver by either party of a breach or default in any of the
provisions of this Agreement by the other party shall not be construed
as a waiver of any succeeding breach of the same or other provisions.
19.2 Entire Agreement and Amendments: This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements between the parties, whether written
or oral, relating to the same subject matter. No modification,
amendments or supplements to this Agreement shall be effective for any
purpose unless in writing, signed by each party.
19.3 Governing Language: This Agreement has been prepared and executed in the
English language. No authorized translation has been prepared or
executed. In the event that any translation is prepared, the English
language version of this Agreement shall govern. All written
correspondence between the parties shall be in the English language.
19.4 Further Assurances: Each party agrees to do such acts and execute such
further documents as may be necessary or desirable to enable the
performance of and to fulfill the provisions and intent of this
Agreement.
19.5 Assignments: This Agreement is entered into by Ligand in reliance upon
the facilities, personnel and technical expertise of Distributor, and
Distributor may only transfer or delegate the performance of the
Agreement or any part thereof to a Dealer pursuant to the terms and
conditions of Clause 2.1. Nothing herein contained, however, shall
prevent Ligand or Distributor from assigning this Agreement in whole or
in part to, or causing any order or orders to be filled in whole or in
part by, any Affiliate of Ligand or the Distributor, respectively.
Ligand shall also have the right to assign this agreement in amerger or
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acquisition in which Ligand is not the surviving entity, or as part of a
transfer of all or substantially all of the assets of its business to
which this Agreement pertains.
19.6 Force Majeure: Neither party shall be liable to the other party for any
delay or omission in the performance of any obligation under this
Agreement, other than the obligation to pay monies, where the delay or
omission is due to any cause or condition beyond the reasonable control
of the party obliged to perform, including, but not limited to, strikes
or other labor difficulties, acts of God, acts of government (in
particular with respect to the refusal to issue necessary import or
export licenses), war, riots, embargoes, or inability to obtain supplies
("Force Majeure"). If Force Majeure prevents or delays the performance
by a party of any obligation under this Agreement, then the party
claiming Force Majeure shall promptly notify the other party thereof in
writing.
19.7 Notices: Unless otherwise specifically provided, all notices required or
permitted by this Agreement shall be in writing and in English,
effective upon receipt, and may be delivered personally, or may be sent
by facsimile, commercial express courier, or first class air mail,
postage prepaid, addressed as follows:
If to Ligand: Ligand Pharmaceuticals Incorporated
10275 Science Center Drive
San Diego, California 92121
Attention: General Counsel
Facsimile: (+) (1) (619) 550-1825
If to Distributor: Ferrer Internacional, S.A.
Gran Via Carlos III, 94,
08028 Barcelona, Spain
Attention: Licensing Department (cc. Legal Department)
Facsimile: (+) (34) (3) 330 80 57
20. CHOICE OF LAW AND DISPUTE RESOLUTION
20.1 Choice of Law: This Agreement is governed by, and shall be construed in
accordance with, the laws of the State of California, United States of
America, excluding (a) conflicts of laws rules, and (b) the United
Nations' Convention on Contracts for the International Sale of Goods.
The parties shall endeavor to resolve amicably any and all disputes
arising under or in connection with this Agreement, including but not
limited to the interpretation of this Agreement, its validity and the
performance hereunder.
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20.2 Disputes: Any dispute between the parties relating to the validity,
performance, interpretation or construction of this Agreement that
cannot be resolved amicably between the parties shall be submitted to
the exclusive jurisdiction of the courts, including the United States
District Courts, in the State of California. Each party hereto
irrevocably submits to the personal jurisdiction of the courts in
California, for the resolution of all disputes hereunder.
20.3 Right to Judicial Remedies: Nothing in this Clause 20 shall be construed
to impair or restrict either Party's right to judicial remedies,
including preliminary and permanent injunctions from any court of
competent jurisdiction to prevent any infringement of the Intellectual
Property Rights, representation of competitive products, and/or
disclosure of the Confidential Information.
IN WITNESS WHEREOF, each party has caused its duly authorized representative to
execute and deliver this Agreement in reliance on the due authority of the
representative of the other party, to be effective as of March 26, 1999.
DISTRIBUTOR: LIGAND PHARMACEUTICALS, INC:
By: /s/ R. FOGUET By: /s/ David E. Robinson
--------------------------- ------------------------------
Title: CEO Title: Chairman, President and OEO
------------------------- ----------------------------
SERAGEN, INC.:
By: /s/ Paul V. Maier
-------------------------
Title: CEO
------------------------
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APPENDIX A
PRODUCTS
PRODUCT COVERED INDICATIONS
Panretin(TM) Gel (alitretinoin) All indicatioNS
Panretin(TM) Capsules (alitretinoin) All indicatioNS
Ontak(TM) (denileukin diftitox) All indicatioNS
Targretin(TM) Gel (bexarotene) The treatment, palliation, prevention
and/or remission of cancer and
dermatological diseases
Targretin(TM) Capsules (bexarotene) The treatment, palliation, prevention
and/or remission of cancer and
dermatological diseases
App. 1
<PAGE> 28
APPENDIX B
BASE PRICE SCHEDULE
1. Targretin(TM) products: ***% of Resale Price.
2. Ontak(TM) products: ***% of Resale Price.
3. Panretin(TM) products: ***% of Resale Price.
----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
App. 2
<PAGE> 29
APPENDIX C
LIGAND TRADEMARKS
Trademark Generic Product Name Country Trademark Status
--------- -------------------- ------- ----------------
Panretin(TM) alitretinoin US Registered
Brazil Pending
Chile Pending
Colombia Pending
Venezuela Pending
Targretin(TM) bexarotene US Registered
Argentina Pending
Brazil Pending
Chile Pending
Colombia Pending
Venezuela Pending
Ontak(TM) denileukin diftitox US Pending
Onact(TM) denileukin diftitox Brazil Pending
App. 3
<PAGE> 30
APPENDIX D
COUNTRIES INCLUDED IN TERRITORY
* Argentina
* Chile
* Uruguay
* Paraguay
* Bolivia
* Brazil
* Peru
* Ecuador
* Colombia
* Venezuela
* Guyana
* Surinam
* French Guyana
* Panama
* Costa Rica
* Nicaragua
* Honduras
* El Salvador
* Guatemala
* Belize
* Dominican Republic
App. 4