PURCHASE AND SUPPLY AGREEMENT Confidential Treatment
requested for all bracketed
BETWEEN ([ ]) information. The
confidential portion has
BIO-TECHNOLOGY GENERAL CORP. been so omitted
and filed separately with
AND the Commission.
QUANTUM HEALTH RESOURCES
PURCHASE AND SUPPLY AGREEMENT
BETWEEN
BIO-TECHNOLOGY GENERAL CORP.
AND
QUANTUM HEALTH RESOURCES
EXECUTION SHEET
In consideration of the mutual promises and covenants contained herein and
other good and valuable consideration, the undersigned have agreed to be bound
by the Purchase and Supply Agreement between Bio-Technology General Corp. and
Quantum Health Resources.
QUANTUM HEALTH RESOURCES BIO-TECHNOLOGY GENERAL CORP.
By:_______________________________ By:_______________________________
Name:_____________________________ Name:_____________________________
Title:____________________________ Title:____________________________
Date:_____________________________ Date:_____________________________
TABLE OF CONTENTS
Page
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PURCHASE AND SUPPLY AGREEMENT................................................ 1
1.0 PURCHASE AND SUPPLY COMMITMENTS.................................. 1
2.0 COMPENSATION..................................................... 4
3.0 ADDITIONAL DESIGNATED PRODUCTS................................... 5
4.0 PATENT, LICENSE AND OTHER INTELLECTUAL PROPERTY RIGHTS........... 5
5.0 GENERAL WARRANTIES ............................................. 7
6.0 REGULATORY MATTERS............................................... 7
7.0 INDEMNIFICATION.................................................. 8
8.0 RECORDS AND ACCOUNTING........................................... 10
9.0 ASSIGNMENT....................................................... 11
10.0 INSURANCE........................................................ 11
11.0 FORCE MAJEURE.................................................... 12
12.0 CONFIDENTIALITY AND REPORTS ..................................... 12
13.0 JOINT PUBLICITY.................................................. 13
14.0 TERM AND TERMINATION OF AGREEMENT................................ 13
15.0 NON-SOLICITATION................................................. 15
16.0 ENFORCEMENT OF EXCLUSIVITY VIS-A-VIS THIRD PARTIES............... 15
17.0 MISCELLANEOUS.................................................... 16
18.0 SCHEDULE OF EXHIBITS ............................................ 20
EXHIBIT A - LIST OF BTG's DESIGNATED PRODUCTS FOR THE
TERRITORY........................................................A-1
EXHIBIT B - FORM OF SUMMARY OF PATENT AND/OR LICENSING
RIGHTS...........................................................B-1
EXHIBIT C - BTG'S NOTICE FOR AN ADDITIONAL DESIGNATED
PRODUCT..........................................................C-1
EXHIBIT D - PURCHASE PRICE SCHEDULE FOR DESIGNATED
PRODUCTS...................................................D-1
PURCHASE AND SUPPLY AGREEMENT
This Purchase and Supply Agreement (the 'Agreement') is entered into by and
between Bio-Technology General Corp. ('BTG'), a Delaware company, and Quantum
Health Resources ('Quantum Express'), a California company, with respect to the
following:
R E C I T A L S
WHEREAS, BTG holds patents and/or licenses to certain pharmaceutical
products and expects to hold patents and/or licenses to additional
pharmaceutical products in the future; and
WHEREAS, BTG is a manufacturer and distributor of pharmaceutical products
with no current direct manufacturing or distribution capabilities in the
Territory; and
WHEREAS, some of BTG's pharmaceutical products do or may require special
distribution services due to the unique nature of the particular products; and
WHEREAS, BTG wishes to have certain of its pharmaceutical products
distributed throughout the Territory by means of an exclusive wholesale and/or
retail distributor; and
WHEREAS, Quantum Express is a wholesale and retail distributor of numerous
pharmaceutical products, has a nationwide distribution network in place, and has
the ability and desire to serve as an exclusive wholesale and/or retail
distributor for BTG's Designated Products; and
WHEREAS, BTG and Quantum Express desire to enter into this Agreement to
provide a full written statement of their respective rights and responsibilities
under this Agreement.
NOW, THEREFORE, in consideration of the above recitals, the terms and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, and for their mutual
reliance, the parties agree as follows:
1.0 PURCHASE AND SUPPLY COMMITMENTS
1.1 BTG hereby appoints Quantum Express as BTG's exclusive wholesale
and/or retail distributor of BTG's Designated Products, as identified
in Exhibit A, in and for the Territory. BTG shall not provide, nor
enter into any contract, agreement or arrangement with a person other
than Quantum Express to provide distribution services for the
Designated Products in and for the Territory to any person or entity
(whether wholesaler, retailer, patient or anyone else) during the Term
of this Agreement.
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1.2 Quantum Express hereby agrees to serve as BTG's wholesale and/or
retail distributor of BTG's Designated Products in and for the
Territory. During the term of this Agreement (the 'RESTRICTION
PERIOD'), Quantum Express agrees that it will not enter into any
agreement, arrangement or understanding with any third party
(including, without limitation, any pharmaceutical company which
manufactures, sells and/or distributes branded or generic drug
products) to provide integrated brand and launch support (e.g.,
purchasing, warehousing, distribution, reimbursement, and
compassionate care services) for a Competitive Product without first
obtaining BTG's prior written approval. If Quantum Express terminates
this Agreement without cause under Section 14.2.2 below, or if Quantum
Express elects to discontinue distribution of a Designated Product
pursuant to Section 1.12, then the Restriction Period shall run for an
additional period of six (6) months from the date that this Agreement
terminates, or Quantum Express ceases to distribute such Designated
Product, as the case may be. Notwithstanding the foregoing, Quantum
Express shall be entitled to enter into such an agreement, arrangement
or understanding in connection with the distribution of a Competitive
Product: (a) to patients to whom Quantum Express was distributing such
Competitive Product at the time Quantum Express began distributing the
applicable Designated Product under this Agreement; or (b) where such
Competitive Product is required under the physician's prescription or
by the applicable payor, or by other similar requirements. For
purposes of this Section 1.2, a Competitive Product shall mean a
pharmaceutical product that is an alternative treatment for a
Designated Product for the prescribed indication.
1.3 As set forth in Section 3.0, Quantum Express has the exclusive right
of first refusal to add any additional BTG product to the list of
Designated Products herein which BTG wishes to make available in the
Territory. The previous sentence will not apply if BTG fully licenses
the rights of an additional product to another entity or determines to
distribute a BTG product in the Territory itself.
1.4 BTG agrees to supply to Quantum Express the quantity of Designated
Products necessary to meet market demand, as mutually determined.
1.5 Quantum Express agrees to purchase Designated Products at the
compensation terms set forth in Section 2.0 according to a master
purchase order ('MASTER PURCHASE ORDER') for each Designated Product
and periodic releases ('RELEASES') against such Master Purchase
Orders. BTG agrees, to the best of its ability, to accommodate Quantum
Express's request for Designated Products contained in the Releases.
1.6 BTG agrees to use its commercially reasonable efforts to provide
Quantum Express's requirements for Designated Products in a timely
fashion without interruption. BTG agrees that if it exercises its
rights under Section 14.2.2, it will
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continue to be bound by this Section until the effective date of the
termination of this Agreement.
1.7 Quantum Express shall have the right to return any expired, defective
or damaged Designated Products to BTG for replacement of the same
Designated Product; provided, however, that any Designated Product
with a patent defect (e.g., a damaged box) that could reasonably be
expected to be discovered by Quantum Express in the ordinary course of
business may be returned not later than forty five (45) days after its
receipt by Quantum Express. There will be no additional charge to
Quantum Express for a replacement Designated Product.
1.8 BTG agrees that during the term of this Agreement or any renewal
thereof, it shall not discontinue sale of any of the Designated
Products to Quantum Express except on one hundred eighty (180) days'
prior written notice unless otherwise required by order of any
governmental body having jurisdiction over BTG.
1.9 Quantum Express shall place all Master Purchase Orders and Releases
with BTG, which will forward them to BTG's Exclusive Warehouse Agent.
All Designated Products released under a Master Purchase Order shall
be shipped by BTG's Exclusive Warehouse Agent to Quantum Express.
1.10 Quantum Express shall take title to Designated Products when it
receives the Designated Products from BTG's Exclusive Warehouse Agent.
1.11 Quantum Express shall have the sole responsibility for determining the
prices at which it sells Designated Products to its wholesale and
retail customers.
1.12 Quantum Express agrees to make good faith efforts to distribute the
Designated Products. If Quantum Express chooses to discontinue
distribution of a Designated Product, it shall provide one hundred
eighty (180) days' prior written notice to BTG. Quantum Express agrees
that if it exercises its rights under this Section 1.12 or Section
14.2.2, it will continue to be bound by this Section until the
effective date of the termination of this Agreement or the effective
date of Quantum Express' discontinuation of distribution of such
Designated Product, as the case may be.
1.13 Quantum Express agrees to distribute Designated Products in the
Territory through any means it determines to be reasonably appropriate
and which are in compliance with any and all applicable federal or
state statutes and regulations. Such methods of distribution may
include distribution to patients following discharge from hospitals
upon receipt of written notice from the hospital, to other
distributors, and/or to other retailers.
1.14 Quantum Express agrees to use its commercially reasonable efforts to
successfully disseminate Designated Products into the Territory.
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2.0 COMPENSATION
2.1 Quantum Express agrees to pay for the Designated Products based on the
purchase price schedule set forth in Exhibit D, within ninety (90)
days of the date of BTG's invoice. In the event that Quantum Express
fails to pay any fees in full within thirty (30) days after its
receipt of the invoice, Quantum Express shall pay BTG late charges of
eight percent (8%) per annum on all unpaid amounts due within ninety
(90) days calculated from the end of that thirty (30) day period.
2.2 In consideration of the distribution services set forth in Section
1.0, BTG agrees to pay Quantum Express a fee of [ ] percent ([ ]%) of
the amount paid or payable by Quantum Express to BTG for Designated
Products sold by Quantum Express (as indicated on the invoice).
Quantum Express shall, on a monthly basis, submit to BTG an accounting
of the value of the cost of Designated Products sold and BTG shall pay
Quantum Express any fee payable within thirty (30) days of BTG's
receipt of such accounting.
2.2.1 The fee that BTG pays to Quantum Express for distribution
services provided for herein shall be renegotiated by the
parties prior to the end of each year, with changes in the
distribution services fee, if any, to become effective with
respect to the Designated Products received by Quantum Express
after the end of the year.
2.2.2 In the event that the parties are unable to agree in advance on
the distribution services fee to be paid during any year (or
portion thereof), the previously existing fee shall continue
until the earlier of the parties' agreement on such new fee, or
the termination of the Agreement.
2.3 In the event that BTG fails to pay any fees in full within thirty (30)
days after its receipt of the invoice, BTG shall pay Quantum Express
late charges of eight percent (8%) per annum on all unpaid amounts due
within ninety (90) days calculated from the end of that thirty (30)
day period.
2.4 Should any provision of this Agreement violate any law, rule or
regulation pertaining to usury or the contracting or charging of
interest, then the excess of interest contracted for or charged or
collected over the maximum lawful rate of interest shall be applied as
a prepayment of future obligations due by BTG to Quantum Express.
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3.0 ADDITIONAL DESIGNATED PRODUCTS
3.1 Whenever BTG identifies additional pharmaceutical products it wishes
to distribute or have distributed within the Territory, BTG shall
provide Quantum Express with a Notice for an Additional Designated
Product containing the information contemplated by Exhibit C. Quantum
Express shall have sixty (60) days in which to respond to such Notice
for an Additional Designated Product.
3.2 After Quantum Express responds to the Notice for an Additional
Designated Product, the parties will discuss, for up to forty-five
(45) days, whether and on what terms the proposed Additional
Designated Product will be added to this Agreement.
3.3 If the parties reach mutual agreement on the terms and conditions of
the proposed Additional Designated Product, then the proposed
Additional Designated Product will be made subject to this Agreement
and added to the relevant Exhibits. In such case, all terms and
conditions of this Agreement shall apply to that Additional Designated
Product.
3.4 If Quantum Express determines that it does not wish to be the
exclusive distributor of the proposed Additional Designated Product or
if the parties are unable to reach agreement after good faith
negotiations, then the product will not be added to the Agreement. In
such a case, BTG may, during the ensuing one hundred eighty (180)
days, contract with another distributor to distribute such additional
product within the Territory; provided, however, that the terms of
such distribution relationship are no less favorable, in the
aggregate, to BTG than those last offered by Quantum Express. The
parties also agree that such event shall have no effect whatsoever on
any of Quantum Express's exclusivity rights set forth in this
Agreement with respect to existing or other future Designated
Products.
4.0 PATENT, LICENSE AND OTHER INTELLECTUAL PROPERTY RIGHTS
4.1 BTG warrants that it holds the patent and/or licensing rights to the
Designated Products, which rights shall be described in Exhibit B. BTG
further warrants that Quantum Express, by virtue of any of its actions
taken pursuant to this Agreement, and the patent licensing rights
which shall be described in Exhibit B, will not infringe upon or
violate the rights of any third parties. As set forth in Section 7.0,
BTG agrees to protect, indemnify, and hold Quantum Express harmless
from any and all claims of infringement based on patent, trademark,
copyright, or trade secrets which may be brought by third parties
against Quantum Express in respect of the Designated Products.
4.1.1 BTG specifically warrants that except for (i) the Oxandrolone
Product Agreement between its predecessor-in-interest and G.D.
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Searle dated October 2, 1990 and amended August 19, 1991 and
September 20, 1993 (the 'SEARLE AGREEMENT') and (ii) a Patent
License and Trademark Assignment between its predecessor-in-
interest and Bristol-Myers Squibb dated March 26, 1992 (the
'BMS AGREEMENT'), there are no other agreements, amendments or
licenses which affect BTG's authority or ability to enter into
this Agreement.
4.1.2 BTG further warrants that it has obtained all necessary
consents for the Designated Products now identified in Exhibit
A including (i) consent from G.D. Searle for Quantum Express to
distribute Oxandrin in the Territory and (ii) consent from
Bristol-Myers Squibb for Quantum Express to distribute
Delatestryl in the Territory. BTG further warrants that the BMS
Agreement will terminate on March 26, 1997.
4.2 BTG warrants that, prior to the execution of this Agreement, it has
not assigned, encumbered, pledged, mortgaged, used as collateral,
granted a security interest or lien in or otherwise engaged in any
action that affects its ability to grant Quantum Express the exclusive
right to distribute the Designated Products in the Territory, except
that BTG has granted to Continental Stock Transfer and Trust Company,
as trustee of BTG's Series B 11% senior secured convertible notes due
1998, a security interest in the Designated Products.
4.3 BTG agrees that, during the term of this Agreement, it will not engage
in any action that could reasonably be anticipated to adversely affect
BTG's ability to grant Quantum Express the exclusive right to
distribute the Designated Products in the Territory.
4.3.1 BTG agrees that it will, to the extent it is able to do so,
grant Quantum Express the right (but not the obligation) to
cure such default if BTG is not able to. BTG agrees to provide
to Quantum Express within (3) days of receipt a copy of any
Notice of Default received by it from either G.D. Searle or
Bristol-Myers Squibb relating to the Searle Agreement or the
BMS Agreement.
4.4 Quantum Express will distribute the Designated Products under a
trademark(s) designated by BTG. BTG warrants and represents that the
designated trademark(s) shall not infringe the rights of any third
parties. BTG also warrants that it will register all trademarks
designated by it in the United States Patent and Trademark Office.
4.4.1 BTG warrants that it has within the last three (3) years made
commercial use in the United States of the trademarks OXANDRIN
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and DELATESTRYL and that to its knowledge, no third-party is
presently using OXANDRIN or DELATESTRYL in connection with any
product in the United States.
4.5 Quantum Express agrees that it will distribute the Designated Products
in original packaging (except under the practice of pharmacy) bearing
a notice of copyright and which shall be registered in the United
States Copyright Office. BTG warrants and represents that this
original packaging will not infringe the rights of any third parties.
5.0 GENERAL WARRANTIES
5.1 BTG warrants that all of its Designated Products shall: (i) be free
from defects in design, material and workmanship; (ii) be in
compliance with applicable law and all regulatory requirements of the
Food and Drug Administration ('FDA'), including those related to the
adulteration or misbranding of products within the meaning of Section
501 and 502 of the Food Drug and Cosmetics Act; (iii) not be articles
which may not be introduced into interstate commerce pursuant to the
requirements of Section 505, 514, 515, 516 or 520 thereof; and (iv) be
manufactured in accordance with current FDA Good Manufacturing
Practices as required by 21 C.F.R. 210 and 820.
5.2 Quantum Express warrants that it possesses all federal and state
licenses and permits necessary to its performance of this Agreement
and agrees to comply, in all material respects, with all federal and
state laws applicable to it.
6.0 REGULATORY MATTERS
6.1 BTG represents that all of the Designated Products have received
clearance from the FDA to be marketed or studied in the Territory for
the indications described in Exhibit A, and that all federal and state
approvals and permits for the manufacture, importation, design,
testing, inspection, labeling, warning, instructions for use, sale and
distribution of all Designated Products in the Territory have been
obtained. BTG agrees that it shall be solely responsible for, and
comply with, all applicable federal and state laws governing the
regulation of the manufacture, importation, design, testing,
inspection, labeling, sale, warning and instructions for use of all
Designated Products in the Territory.
6.2 Quantum Express shall notify BTG promptly of any inspection by any
federal, state or local regulatory representative concerning any
Designated Products and shall provide BTG with a summary of the
results of such inspection and such actions, if any, taken to remedy
conditions cited in such inspections.
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6.3 Each party agrees to inform the other party promptly (but in no event
no later than forty-eight (48) hours after becoming aware of same) of
any information concerning any package or complaint involving a
Designated Product or any adverse drug experience (as defined in 21
CFR 314.80), injury, toxicity, or sensitivity reaction associated with
the clinical use of the Designated Product, whether or not considered
related to the Designated Product.
If the adverse drug experience is serious, as defined in 21 CFR 314.80
(including an adverse drug reaction that is fatal or life-threatening,
is permanently disabling, requires inpatient hospitalization, or is a
congenital anomaly, cancer or overdose), then each party shall notify
the other party within twenty-four (24) hours. All notifications to
BTG shall be by facsimile and on BTG's designated adverse event forms.
6.4 If there is a recall or withdrawal of a Designated Product, then
Quantum Express agrees to stop shipping recalled lots immediately, and
in no event later than twenty-four (24) hours after Quantum Express
receives written notification of such recalls. Quantum Express shall
cooperate fully in any such recall.
6.5 Quantum Express agrees to cooperate with any inspection of a
Designated Product shipment conducted by a governmental agency.
6.6 BTG agrees to reimburse Quantum Express for any costs or expenses
(including reasonable attorneys' fees) Quantum Express may incur due
to recalls, withdrawals, replacements or government inspections of any
Designated Product. Quantum Express shall prepare an invoice of such
costs which invoice shall be paid by BTG within thirty (30) days of
its receipt of such invoice.
6.7. Quantum Express shall at all times during the Term of the Agreement
comply, in all material respects, with all federal and state laws,
regulations and orders applicable to its operations as a wholesale
and/or retail distributor.
7.0 INDEMNIFICATION
7.1 BTG will indemnify, defend, and hold harmless Quantum Express, its
affiliates, parents, subsidiaries, directors, officers, agents and
employees (collectively, 'QUANTUM EXPRESS INDEMNITEES') from and
against, and reimburse Quantum Express Indemnitees for, any and all
claims, demands, actions, causes of action, losses, judgements,
damages, costs and expenses (including, but not limited to, attorneys'
fees, court costs and costs of settlement) arising out of claims
against a Quantum Indemnitee based on: (a) BTG's manufacture of a
Designated Product; (b) the death of, or bodily injury to, any person
on account of the use of a Designated Product, to the extent such
death or bodily injury results from a defect in the design,
workmanship or manufacture of a Designated Product; (c) any recall
8
or withdrawal of a Designated Product; (d) BTG's violation of any
applicable law or government regulation; (e) any claims that Quantum's
distribution or sale of a Designated Product infringes the patent or
other proprietary rights of any third party; or (f) any breach by BTG
of any of its representations, warranties, covenants or agreements in
this Agreement.
7.2 Quantum Express will indemnify, defend, and hold harmless BTG, its
affiliates, parents, subsidiaries, directors, officers, agents and
employees (collectively 'BTG INDEMNITEES') from and against, and
reimburse BTG Indemnitees for, any and all claims, demands, actions,
causes of action, losses, judgements, damages, costs and expenses
(including, but not limited to, attorneys' fees, court costs and costs
of settlement) arising out of claims against a BTG Indemnitee based
on: (a) the death of, or bodily injury to, any person on account of
the use of a Designated Product, to the extent such death or bodily
injury results from Quantum Express's negligence or willful
misconduct; (b) Quantum Express's violation of any applicable law or
governmental regulation; or (c) any breach by Quantum Express of any
of its representations, warranties, covenants or agreements in this
Agreement.
7.3 Quantum Express agrees that upon receipt of any claim or liability
asserted in writing against it which would give rise to a claim
against BTG under this Section, it shall promptly notify BTG in
writing of the same within fifteen (15) days. BTG agrees that Quantum
Express is entitled to retain counsel of its own choosing at Quantum
Express's expense to the extent necessary, in Quantum Express's sole
discretion, to protect Quantum Express's interests and to act as
co-counsel in the litigation or settlement of any claim or threatened
claim. Quantum Express agrees that so long as BTG does not enter any
settlement agreement or consent judgment that admits liability on the
part of Quantum Express or which fails to include an unconditional
release of Quantum Express from all liability from all asserted or
threatened claims, BTG shall have the right to control the defense,
settlement, and prosecution of any litigation. Anything in this
section notwithstanding:
7.3.1 If there is a reasonable probability in the opinion of Quantum
Express's counsel that a claim may materially and adversely
affect Quantum Express other than as a result of monetary
damages or other monetary payments for which BTG will be able
to indemnify Quantum Express, Quantum Express shall have the
right to defend, and with BTG's prior consent, compromise and
settle such claim. Quantum Express's right to indemnification
in such cases shall be limited to its reasonable attorney's
fees and costs plus any monetary settlement amount.
7.3.2 In the event that Quantum Express determines in its sole
discretion, based upon the written advice of counsel, that
there is a conflict in the position or defenses to be asserted
by BTG and Quantum Express regarding liability, Quantum Express
shall be entitled to its own defense, including the right,
9
with BTG's prior consent, to settle or compromise all or any of
the claims against it, at BTG's expense.
7.4 BTG agrees that upon receipt of any claim or liability asserted in
writing against it which would give rise to a claim against Quantum
Express under this Section, it shall promptly notify Quantum Express
in writing of the same within fifteen (15) days. Quantum Express
agrees that BTG is entitled to retain counsel of its own choosing at
BTG's expense to the extent necessary, in BTG's sole discretion, to
protect BTG's interests and to act as co-counsel in the litigation or
settlement of any claim or threatened claim. BTG agrees that so long
as Quantum Express does not enter any settlement agreement or consent
judgment that admits liability on the part of BTG or which fails to
include an unconditional release of BTG from all liability from all
asserted or threatened claims, Quantum Express shall have the right to
control the defense, settlement, and prosecution of any litigation.
Anything in this section notwithstanding:
7.4.1 If there is a reasonable probability in the opinion of BTG's
counsel that a claim may materially and adversely affect BTG
other than as a result of monetary damages or other monetary
payments for which Quantum Express will be able to indemnify
BTG, BTG shall have the right to defend, and with Quantum
Express's prior consent, compromise and settle such claim.
BTG's right to indemnification in such cases shall be limited
to its reasonable attorney's fees and costs plus any monetary
settlement amount.
7.4.2 In the event that BTG determines in its sole discretion, based
upon the written advice of counsel, that there is a conflict in
the position or defenses to be asserted by BTG and Quantum
Express regarding liability, BTG shall be entitled to its own
defense, including the right, with Quantum Express's prior
consent, to settle or compromise all or any of the claims
against it, at Quantum Express's expense.
7.5 The obligations of an indemnifying party under this Section 7.0 shall
not be diminished by the indemnifying party's failure to provide the
notice required above except to the extent such failure actually and
materially adversely affects the indemnifying party's ability to
defend such matter.
8.0 RECORDS AND ACCOUNTING
8.1 During the term hereof and for three (3) years thereafter, or such
longer period as may be required by law, Quantum Express shall
maintain accurate records as required to meet applicable local, state
and federal laws and regulations. Except as otherwise required by any
such laws or regulations, Quantum Express shall provide BTG access to
any requested documentation related to this Agreement during
reasonable business hours. BTG shall give Quantum Express seven (7)
days'
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prior written notice of such examination. Such examinations will not
occur more than twice annually, and such examination will be
undertaken only to such extent necessary to verify that Quantum
Express has complied with the terms of this Agreement.
9.0 ASSIGNMENT
9.1 Neither party may assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of
the other party, except in connection with the sale of a party's
entire business operations, which shall not require consent.
Notwithstanding the previous sentence, either party may assign its
rights or delegate its duties to any of its parents, subsidiaries, or
affiliates without written consent of the other party. Any
unauthorized attempted assignment or delegation shall be null and void
and of no force or effect.
10.0 INSURANCE
10.1 BTG will maintain in effect during the term of this Agreement a
comprehensive general liability policy and products liability policy
on the Designated Products and BTG shall promptly after the execution
of this Agreement designate Quantum Express as an additional named
insured on such policies. This comprehensive insurance policy shall be
in an amount not less than One Million Dollars ($1,000,000) per
incident and Three Million Dollars ($3,000,000) in the aggregate and
shall include coverage for claims of patent, trademark, copyright,
trade secret, or other forms of unfair competition including but not
limited to all claims under Section 43(a) of the Lanham Act. The
deductible for such policy shall be no more than Five Hundred Thousand
Dollars ($500,000). The policy shall provide for ten (10) days' notice
to Quantum Express by the Insurer by Registered or Certified Mail,
Return Receipt Requested, in the event of any modifications,
cancellation, or termination thereof. BTG agrees to provide Quantum
Express with a certificate of insurance evidencing compliance with
this section within ten (10) days of execution of this Agreement.
10.2 Quantum Express will maintain in effect during the term of this
Agreement a comprehensive general liability policy and Quantum Express
shall promptly after the execution of this Agreement designate BTG as
an additional named insured on such policy. This comprehensive
insurance policy shall be in an amount not less than One Million
Dollars ($1,000,000) per incident and Three Million Dollars
($3,000,000) in the aggregate. The deductible for such policy shall be
no more than One Hundred Thousand Dollars ($100,000). The policy shall
provide for ten (10) days' notice to BTG by the Insurer by Registered
or Certified Mail, Return Receipt Requested, in the event of any
modifications, cancellation, or termination thereof. Quantum Express
agrees to provide BTG with a certificate of insurance
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evidencing compliance with this section within ten (10) days of
execution of this Agreement.
11.0 FORCE MAJEURE
11.1 Notwithstanding any provision contained herein to the contrary,
neither party shall be deemed to be in default hereunder for failing
to perform or provide any of the services or other obligations to be
performed or provided pursuant to this Agreement if such failure is
the result of any labor dispute, act of God, inability to obtain labor
or materials, governmental restrictions or any other event which is
beyond the reasonable control of the party.
12.0 CONFIDENTIALITY AND REPORTS
12.1 'CONFIDENTIAL INFORMATION' of a party shall mean any and all
information including, but not limited to, the terms and conditions of
this Agreement that is or has been disclosed in writing or orally by
such party to the other party which is either confidential or
proprietary in nature; provided, however, that 'Confidential
Information' shall not include information which:
12.1.1 is or becomes generally available to the public through no
fault of the receiving party;
12.1.2 was known to the receiving party before such party received it
under this Agreement and was not acquired, directly or
indirectly, from the disclosing party; or
12.1.3 is disclosed in good faith to the receiving party by a third
party lawfully in possession of such information and who was
not under an obligation of nondisclosure with respect of such
information.
12.2 Each party acknowledges that it may have heretofore received and may
from time to time hereafter receive Confidential Information of the
other party, and such party receiving such Confidential Information
shall do the following:
12.2.1 maintain such Confidential Information in confidence and shall
not disclose such Information to any third party;
12.2.2 not use such Confidential Information other than in performance
of this Agreement; and
12.2.3 disclose such Confidential Information to its employees or to
employees of its affiliates only to the extent that such
employees
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need to know such Confidential Information to carry out the
receiving party's obligations under this Agreement.
12.3 Each party agrees to maintain as confidential both during the term of
this Agreement and thereafter all Confidential Information provided to
it pursuant to this Agreement and shall not, without the specific
written consent of the other party, disclose it to any third party
(except as required by law) or use it for its own purpose (except as
contemplated herein).
13.0 JOINT PUBLICITY
13.1 If either party wishes to make a public disclosure concerning this
Agreement or the relationship established hereunder and such
disclosure mentions the other party by name or description, such other
party shall be provided with an advance copy of the disclosure and
shall have five (5) business days within which to approve or
disapprove such use of its name or description (including mention of
the name of the Designated Product). Approval shall not be
unreasonably withheld by either party. Failure to respond within such
five (5) business days shall be deemed to be approval. Absent
approval, no public disclosure shall use the name of or otherwise
describe such party except to the extent required by law, or to the
extent that the description of the other party is limited to public
information about the availability of the Designated Product.
Notwithstanding the foregoing, Quantum Express acknowledges that BTG
is a publicly traded company, and hereby consents to BTG's disclosure
of this Agreement and its relationship with Quantum Express in its
filings with the Securities and Exchange Commission and its
disclosures to its stockholders; provided, however, that BTG shall use
its commercially reasonable efforts not to disclose the specific
financial terms and conditions of this Agreement except when such
disclosure is required by law.
14.0 TERM AND TERMINATION OF AGREEMENT
14.1 Term. This Agreement shall commence upon the Effective Date and shall
continue for a term of five (5) years. This Agreement shall
automatically renew for successive additional one (1) year terms
unless, not less than one hundred eighty (180) days prior to the
anniversary date, either party notifies the other of its intent to
terminate this Agreement as of the anniversary date.
14.2 Termination. The initial term of this Agreement or any renewal term
may be terminated only as follows:
14.2.1 Mutual Consent. This Agreement may be terminated, with or
without cause at any time upon the mutual written consent of
both parties.
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14.2.2 Without Cause. This Agreement may be terminated by either
party without cause upon one hundred eighty (180) days' prior
written notice to the other party.
14.2.3 Event of Material Breach: Good Cause. This Agreement may be
terminated by either party if the other party shall default in
the performance of any of its material obligations under this
Agreement, upon forty-five (45) days' prior written notice to
the other, specifying the nature of the default, unless such
other party shall cure that default within the forty-five (45)
day notice period.
14.2.4 Insolvency. This Agreement may be terminated by either party
immediately upon notice to the other, if the other party shall
make an assignment for the benefit of creditors, shall file a
petition in bankruptcy, is adjudicated insolvent or bankrupt,
or if a receiver or trustee is appointed with respect to a
substantial part of such other party's property or a
proceeding is commenced against it which will substantially
impair its ability to perform hereunder.
14.2.4.1 Notwithstanding anything to the contrary, all
rights granted under or pursuant to this Agreement by
BTG to Quantum Express are, and shall otherwise be
deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code, or replacement
provision therefor (the 'CODE'), licenses to rights
to 'intellectual property' as defined in the Code.
The parties agree that Quantum Express, as the
licensee of such rights under this Agreement, shall
retain and may fully exercise all of its rights and
elections under the Code. The parties further agree
that, in the event of the commencement of bankruptcy
proceedings by or against BTG under the Code, Quantum
Express shall be entitled, at its option, to retain
all of its rights under the Agreement, in accordance
with the provisions of the Code.
14.2.4.2 Notwithstanding anything to the contrary, all rights
granted under or pursuant to this Agreement by
Quantum Express to BTG are, and shall otherwise be
deemed to be, for purposes of Section 365(n) of the
Code or replacement provision therefor, licenses to
rights to 'intellectual property' as defined in the
Code. The parties agree that BTG, as the licensee of
such rights under this Agreement, shall retain and
may fully exercise all of its rights and elections
under the Code. The parties further agree that, in
the event of the commencement of bankruptcy
proceedings
14
by or against Quantum Express under the Code, BTG
shall be entitled, at its option, to retain all of
its rights under the Agreement, in accordance with
the provisions of the Code.
14.3 Remedies. Each of the parties to this Agreement shall be entitled to
enforce its rights under this Agreement to recover damages and costs
(including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing
in its favor, regardless of any termination of this Agreement by such
breaching party pursuant to Section 14.2.3. The parties hereto agree
and acknowledge that money damages would not be an adequate remedy for
any breach of Sections 1.0, 4.0, 12.0, 15.0 and 16.0 of this Agreement
and that any party may, in its sole discretion, apply to any court of
law or equity of competent jurisdiction (without posting any bond or
deposit) for specific performance and/or other injunctive relief in
order to enforce, or prevent any violations of, these Sections of this
Agreement.
15.0 NON-SOLICITATION
15.1 BTG agrees that during the term of this Agreement, and for one (1)
year thereafter, it shall not: (i) employ or retain on an independent
contractor basis; or (ii) solicit for employment or for an independent
contracting basis any person who was, at any time during the
immediately preceding twelve (12) month period, employed by Quantum
Express or any of its affiliates, subsidiaries, or parents.
15.2 Quantum Express agrees that during the term of this Agreement, and for
one (1) year thereafter, it shall not: (i) employ or retain on an
independent contractor basis; or (ii) solicit for employment or for
independent consulting any person who was, at any time during the
immediately preceding twelve (12) month period, employed by BTG, or
any of its affiliates, subsidiaries, or parents.
16.0 ENFORCEMENT OF EXCLUSIVITY VIS-A-VIS THIRD PARTIES
16.1 BTG agrees to take all reasonable steps to prevent third parties from
importing or distributing the Designated Products in the Territory on
a regular and sustained basis. In the event that BTG discovers, either
through its own efforts or through notification by Quantum Express,
that third parties to whom it has sold the Designated Products for
distribution outside of the Territory have imported or distributed or
caused to be imported or distributed the Designated Products inside
the Territory on a regular basis, BTG shall notify such party (the
'INFRINGER') within five (5) business days that it will halt all
further business with Infringer unless BTG receives written assurances
from Infringer that it will not in the future import or distribute the
Designated Products in the Territory.
15
16.2 In the event that either party discovers, either through its own
efforts, or through notification by the other, that any third party to
whom it has not sold the Designated Products has imported or
distributed the Designated Products in the Territory on a regular and
sustained basis, it shall, within five (5) business days, commence an
investigation into how such party obtained the Designated Products and
take appropriate action to prevent any future diversion. Each party
shall share all results of this investigation with the other.
16.3 In the event that any third party shall import or distribute
Designated Products in the Territory, Quantum Express shall be
entitled if BTG elects not to take action upon request of Quantum
Express, at BTG's cost and expense, to institute all legal action
necessary to halt such importation and distribution including the
commencement of legal proceedings either inside or outside of the
Territory. If necessary, to maintain such proceeding, Quantum Express
is hereby authorized to bring such proceeding in the name and on
behalf of BTG. BTG agrees to cooperate with Quantum Express to the
extent necessary for Quantum Express to pursue its legal rights.
Quantum Express shall be entitled to all damages recovered as a result
of any proceeding commenced by it, whether in its name or the name of
BTG. If BTG has assumed the cost and expense of the action, then any
damage award shall be first allocated to those costs and expenses.
16.4 Quantum Express shall not, directly or indirectly, sell or distribute
or cause to be distributed, the Designated Products outside the
Territory.
17.0 MISCELLANEOUS
17.1 Definitions. For purposes of this Agreement, the following terms
apply:
17.1.1 'Additional Designated Products' refers to Designated Products
added to Exhibit A following the initial execution of this
Agreement.
17.1.2 'Designated Product' or 'Designated Products' refers to any BTG
product that is described in Exhibit A or may be added from
time to time for the indication(s) set forth in Exhibit A.
17.1.3 'Effective Date' refers to December 1, 1995.
17.1.4 'Exclusive Warehouse Agent' refers to the company which has
entered into an agreement with BTG to be the exclusive
warehousing agent of Designated Products in the Territory.
17.1.5 'Notice for Additional Designated Products' refers to the
Notice set forth in Exhibit C.
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17.1.6 'Territory' refers to all of the fifty (50) states, the
territories and the possessions of the United States.
17.2 Choice of Law
17.2.1 This Agreement shall be governed by and construed under the
laws of the State of Indiana, inclusive of its
conflicts-of-laws rules.
17.3 Waiver
17.3.1 No waiver of any default hereunder by either party or any
failure to enforce any rights hereunder shall be deemed to
constitute a waiver of any subsequent default with respect to
the same or any other provision hereof. No waiver shall be
effective unless made in writing with specific reference to the
relevant provision(s) of this Agreement and signed by a duly
authorized representative of the party granting the waiver.
17.4 Notice
17.4.1 All notices and other communications made or given under or in
connection with this Agreement shall be validly given or made
if in writing and shall be effective either (a) when delivered
in person to the other party, or (b) on the same business day
that it is transmitted by facsimile to the facsimile number(s)
set forth below, if transmitted prior to 5:00 p.m. Eastern Time
on such business day, or on the first business day following
such transmission if transmitted after 5:00 p.m. Eastern Time
or if transmitted on a day other than a business day; provided
a hard copy is deposited within one (1) day after such
transmissions in the U.S. mail, postage prepaid, and addressed
as set forth below for notices by U.S. mail; or (c) on the
third business day following its deposit in the U.S. mail,
postage prepaid, and addressed as follows:
if to BTG:
Bio-Technology General Corp.
70 Wood Avenue South
Iselin, NJ 08834
Attention: William H. Pursley
Facsimile No.: 908-767-1349
17
if to QUANTUM EXPRESS:
Quantum Express
7345 Airport Freeway
Fort Worth, TX 76118
Attention: Tom Mitchell
Facsimile No.: 817-590-5332
With copy to:
John McIlwraith, Esq.
Senior Vice President of Strategic
Planning and Legal Counsel
Quantum Health Resources
9100 Keystone at the Crossing
Suite 500
Indianapolis, IN 46240
Facsimile No.: 317-580-6843
17.5 Amendment
17.5.1 Neither this Agreement nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally,
except by an instrument in writing signed by each party.
17.6 Survival of Provisions
17.6.1 All indemnification and confidentiality provisions contained
herein shall survive the expiration or other termination of
this Agreement.
17.7 Relationship of Parties
17.7.1 Quantum Express's relationship with BTG hereunder shall be that
of independent contractor, and neither party shall be
considered the agent, partner or employee of or a joint venture
with the other party, in its performance of all duties under
this Agreement.
17.8 Cumulative Remedies
17.8.1 Except as expressly provided in this Agreement, and to the
extent permitted by law, any remedies described in this
Agreement are cumulative and not alternative to any other
remedies available at law or in equity.
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17.9 Severability
17.9.1 In the event that any one or more of the provisions contained
in this Agreement are for any reason held to be invalid,
illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall be
construed as if such invalid, illegal or unenforceable
provision or provisions had never been included. The parties
shall, in good faith, amend this Agreement to provide, to the
extent possible, each party with the benefits provided by such
invalid or unenforceable provision.
17.10 Headings
17.10.1 The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
17.11 Counterparts
17.11.1 This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.
17.12 Signature Authority
17.12.1 Each signatory to this Agreement has signature authority and
is empowered on behalf of his or her respective party to
execute this Agreement.
17.13 Integration
17.13.1 This Agreement, together with all agreements attached hereto,
constitutes the entire agreement between the parties with
respect to the subject matter hereof, and supersedes all prior
oral or written agreements, commitments or understandings with
respect thereto.
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18.0 SCHEDULE OF EXHIBITS
EXHIBIT A List of BTG's Designated Products for the Territory
EXHIBIT B Form of Summary of Patent and/or Licensing Rights
EXHIBIT C Form of BTG's Notice for an Additional Designated Product
EXHIBIT D Purchase Price Schedule for Designated Products
20
EXHIBIT A
LIST OF BTG's DESIGNATED PRODUCTS FOR THE TERRITORY
Oxandrin
Delatestryl
A-1
EXHIBIT B
FORM OF SUMMARY OF PATENT AND/OR LICENSING RIGHTS
Product Patent/licensing rights
- ------- -----------------------
Oxandrin [To Be Completed By BTG]
Delatestryl [To Be Completed By BTG]
B-1
EXHIBIT C
BTG'S NOTICE FOR AN ADDITIONAL DESIGNATED PRODUCT
BTG hereby provides Quantum Express notice of its intent to have
distributed in the Territory the following Additional Designated Product:
1.0 NAME AND FDA APPROVED INDICATED USES
2.0 COST TO DISTRIBUTORS
3.0 SUMMARY OF PATENT/LICENSE RIGHTS
4.0 OTHER PERTINENT INFORMATION
C-1
EXHIBIT D
PURCHASE PRICE SCHEDULE FOR DESIGNATED PRODUCTS
Product Price
- ------- -----
Oxandrin [
Delatestryl
]
D-1
D-2
Purchase and Supply Agreement - Bio-Technology General Corp. and Quantum Health Resources
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