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EXHIBIT 10.2
Use and License Agreement
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This Use and
License Agreement (this "Agreement") is dated and entered into
on this the 19th day of March, 2004 (the
"First Closing Date"), by and among
HALSEY DRUG CO., INC., a New York
corporation with offices at 616 N. North
Court, Suite 120, Palatine, Illinois 60067
("Halsey"), AXIOM PHARMACEUTICAL
CORPORATION, a Delaware corporation and
wholly-owned direct subsidiary of Halsey
with offices at 616 N. North Court, Suite
120, Palatine, Illinois 60067 ("Axiom"
and, together with Halsey, collectively and
individually, the "Seller"), and
IVAX PHARMACEUTICALS NEW YORK LLC, a New
York limited liability company with
offices at 77 Brenner Drive, Congers, New
York 10920 (the "Purchaser") (the
Seller and the Purchaser, collectively, the
"Parties", and each individually, a
"Party").
PRELIMINARY STATEMENTS
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A. In connection
with the assignment to the Purchaser of (i) all the
Seller's rights, title and interests in and
to the Brenner Contract of Sale (as
defined in the Asset Purchase Agreement)
relating to the Brenner Facility (as
hereinafter defined) and (ii) Seller's
tenant interest in the Wells Avenue Lease
(as defined in the Asset Purchase
Agreement) relating to the Wells Facility (as
hereinafter defined, collectively together
with the Brenner Facility, the
"Facilities", and each individually, a
"Facility"), each pursuant to the
transactions, documents and deliveries
contemplated by the Asset Purchase
Agreement entered into by the Parties on
this date (the "Asset Purchase
Agreement"), the Seller also desires to
sell, and the Purchaser desires to
purchase, subject to the terms and
conditions set forth therein, the Seller's
rights in the Products as well as the
Halsey Equipment, Intellectual Property,
Product Registrations, Transferred
Documentation and Manufacturing Information
(each, as defined in the Asset Purchase
Agreement).
B. The Parties
have agreed that, pending Shareholder Approval of the
Transactions Requiring Shareholder Approval
(as such terms are defined in the
Asset Purchase Agreement), the Seller shall
grant to the Purchaser the exclusive
right and license to exploit the Second
Closing Acquired Assets (as defined in
the Asset Purchase Agreement) for its own
commercial purposes, as more
particularly set forth in this
Agreement.
C. The Purchaser
and the Seller have entered into this Agreement to induce
the Purchaser to enter into the Asset
Purchase Agreement which it would not do
but for the agreement of the Seller to
enter into this Agreement.
NOW, THEREFORE,
in consideration of the foregoing preliminary statements
and the mutual agreements and covenants set
forth herein, the Parties hereby
agree as follows:
1.
DEFINITIONS; INTERPRETATION
1.1 Definitions.
Capitalized terms not otherwise defined in this Agreement
shall have the meanings assigned to such
terms in the Asset Purchase Agreement.
As used in this
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Agreement, the following terms shall have
the respective meanings set forth in
this Section 1.1, unless otherwise
specifically indicated.
(a) "Affiliates" shall mean, with respect to any Person, any
Persons
directly or indirectly controlling,
controlled by, or under common control with,
such Person. For purposes hereof, the term
"controlled" (including the terms
"controlling," "controlled by" and "under
common control with"), as used with
respect to any Person, shall mean the
direct or indirect ability or power to
direct or cause the direction of management
policies of such Person or otherwise
direct the affairs of such Person, whether
through ownership of voting
securities or otherwise.
(b) "ANDA" shall mean an abbreviated new drug application
requesting
permission to place a drug on the market in
accordance with 21 C.F.R. Part 314
Subpart C, and all supplements filed
pursuant to the requirements of the FDA,
including all documents, data and other
information concerning the applicable
drug which are necessary for FDA approval
to market the drug in the United
States.
(c) "Bankruptcy Code" shall have the meaning assigned to such term
in
Section 4.1.
(d) "Brenner Facility" shall mean the land, facilities and
equipment
leased by the Seller at 77 Brenner Drive,
Congers, New York, being formerly
known as Lot 22.02, Block A, Section 128
and being currently known as Lot 12,
Block 2, Section 44.7 on the tax map of the
Town of Clarkstown, Rockland County,
New York.
(e) "Confidential Asset Information" shall have the meaning
assigned
to such term in the Asset Purchase
Agreement.
(f) "DEA" shall mean
the United States Drug Enforcement Administration
and any successor agency or entity that may
be established hereafter.
(g) "FDA" shall mean the United States Food and Drug
Administration
and any successor agency or entity that may
be established hereafter.
(h) "First Closing Date" shall have the meaning assigned to such
term
in the Asset Purchase Agreement.
(i) "First Refusal Period" shall have the meaning set forth in
Section
3.3.
(j) "Licensee" shall have the meaning set forth in Section 4.2.
(k) "Licensor" shall have the meaning set forth in Section 4.2.
(l) "Non-Packaging Assets" shall mean any and all Second
Closing
Acquired Assets other than the Packaging
Equipment.
(m) "Notice" shall have the meaning set forth in Section 3.3.
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(n) "Packaging Equipment" shall mean any and all Halsey Equipment
with
application in the packaging of
pharmaceutical products.
(o) "Person" shall mean a natural person, a corporation, a
partnership, a trust, a joint
venture, a limited liability company, any
governmental authority or any other entity
or organization.
(p) "Refundable Amount" shall have the meaning assigned to such
term
in the Asset Purchase Agreement.
(q) "Related Agreement" shall have the meaning assigned to such
term
in the Asset Purchase
Agreement.
(r) "Retained Information" shall have the meaning assigned to
such
term in the Asset Purchase Agreement.
(s) "Second Closing Date" shall have the meaning assigned to such
term
in the Asset Purchase Agreement.
(t) "Term" shall have the meaning assigned to such term in
Section
3.1.
(u)
"Third Party" shall mean any person or entity who or which is
neither a Party nor an Affiliate
of a Party.
(v) "Wells Facility" shall mean the land and facilities leased by
the
Seller at 125 Wells Avenue, Congers, New
York, being formerly known as Lot 26,
Block A, Section 128 and being currently
known as Lot 3, Block 3, Section 44.11
on the tax maps of the Town of Clarkstown,
New York.
2.
DELIVERY; USE AND OWNERSHIP; GRANT; RESERVATION OF RIGHTS
2.1 Delivery;
Use and Ownership. On or before the First Closing Date, the
Seller shall deliver to the Purchaser
possession of all of the Second Closing
Acquired Assets and all information,
records and materials contained therein
(e.g. full access to use, copies of
documents etc.). All such information,
records and materials provided by the
Seller shall be filed in files at the
Facilities or packaged, organized and
listed in a commercially reasonable
manner, at the Seller's cost. While the
Purchaser shall be permitted to exploit
and use the Second Closing Acquired Assets
in accordance with this Agreement,
during the Term the Seller shall retain
title and ownership to the Second
Closing Acquired Assets. During the Term
prior to the effectiveness of the
termination of this Agreement with respect
to the Non-Packaging Assets, the
Purchaser shall have the undisturbed quiet
use and enjoyment of all of the
Non-Packaging Assets and the Seller shall
not interfere in any way with the
Purchaser's quiet use and enjoyment of any
of the Non-Packaging Assets. During
the Term, the Purchaser shall have the
undisturbed quiet use and enjoyment of
all of the Packaging Equipment and the
Seller shall not interfere in any way
with the Purchaser's quiet use and
enjoyment of any of the Packaging Equipment.
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2.2 Grant of
License.
(a) During the Term until the effectiveness of the termination of
this
Agreement with respect to the Non-Packaging
Assets, the Seller hereby grants to
the Purchaser and its Affiliates an
exclusive, worldwide, royalty-free right and
license, together with the right to grant
sublicenses, to (i) all of the
Seller's rights, as of the First Closing
Date, to make, have made, use, offer
for sale, sell, import, develop and
commercialize the Products, (ii) use and
operate for any purpose the Halsey
Equipment which is not included in the
Packaging Equipment, (iii) utilize for any
purpose the Manufacturing Information
relating to the Halsey Equipment which is
not included in the Packaging
Equipment, (iv) utilize for any purpose the
Intellectual Property relating to
the Halsey Equipment which is not included
in the Packaging Equipment, (v)
utilize for any purpose the Product
Registrations and the Transferred
Documentation, and (vi) to utilize the
Retained Information in connection with
any of the foregoing.
(b) In addition, during the Term, Seller hereby grants to the
Purchaser and its Affiliates an exclusive,
worldwide, royalty-free right and
license, together with the right to grant
sublicenses, to (i) use and operate
for any purpose the Packaging Equipment,
(ii) utilize for any purpose the
Manufacturing Information relating to the
Packaging Equipment, (iii) utilize for
any purpose the Intellectual Property
relating to the Packaging Equipment, and
(iv) to utilize the Retained Information in
connection with any of the
foregoing.
3.
TERM; TERMINATION
3.1 Term;
Termination. The term of this Agreement (the "Term") shall
commence on the First Closing Date and
shall continue until the earlier of: (a)
the Second Closing Date, or (b) June 30,
2007, or (c) with respect to the
Non-Packaging Assets only, following
termination of the Asset Purchase Agreement
and payment in full to the Purchaser by the
Seller of the Refundable Amount as
well as any other amounts which are then
due and payable by the Seller to the
Purchaser under the Asset Purchase
Agreement or any Related Agreement in
accordance with Section 9.2 of the Asset
Purchase Agreement, six (6) months
written notice to the Purchaser of the
Seller's intention to remove the
Non-Packaging Assets from the Facilities
(which notice may only be given after
payment of such amounts). Following such
notice, during such six (6) month
period and thereafter until the obligations
of the Seller described in Section
3.2 are fully performed, the Seller shall
use its best efforts to cooperate with
the Purchaser in the unwinding of the
relationship established herein with
respect to the Non-Packaging Assets in an
orderly manner. The provisions of this
Section 3 shall survive any termination of
this Agreement.
3.2 Effect of
Notice under Section 3.1(c). If and when the Seller gives
notice in accordance with and as
permitted under Section 3.1(c), then:
(a) Except as otherwise agreed by the Parties, promptly, but in
no
event less than 3 business days, following
the end of the six (6) month period
described in Section 3.1(c), the
Non-Packaging Assets shall be removed from the
Facilities by the Seller, at the Seller's
cost, in a manner so as to be
minimally disruptive to the operations of
the Purchaser and to the
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Purchaser's use and enjoyment of the
Facilities, the improvements thereon or the
other equipment located at the
Facilities.
(b) The Seller shall, at its expense, promptly restore the
Facilities
to good condition and reimburse or pay the
Purchaser for any and all reasonable
costs and expenses incurred or to be
incurred by the Purchaser in connection
with the Seller's activities in removing
the Non-Packaging Assets from the
Facilities, including (i) any damages
sustained to the Facilities, the
improvements thereon or the other equipment
located at the Facilities, and (ii)
repairing the Facilities and the
improvements thereon such that they once again
can be used by the Purchaser for the
purposes for which they were used by the
Purchaser prior to the removal of the
Non-Packaging Assets.
(c) On the first business day following the end of the six (6)
month
period described in Section 3.1(c), the
Seller shall post a performance bond in
the amount of One Hundred Fifty Thousand
Dollars ($150,000) with a Third Party
bank or trust company, both the form of
bond and institution being acceptable to
the Purchaser, to support payment and
performance of the S
