TERRITORY A ALLIANCE SUPPORT AGREEMENT

Exhibit 10.4

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TERRITORY A

ALLIANCE SUPPORT AGREEMENT

between

SANOFI

and

BRISTOL-MYERS SQUIBB COMPANY

dated as of January 1, 1997

 

 

 

 

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SCHEDULES

 

 

 

 

 

 

 

 

 

 

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TERRITORY A ALLIANCE SUPPORT AGREEMENT dated as of January 1, 1997 between Sanofi, a socièté anonyme organized under the laws of the French Republic (“ Sanofi ”), and Bristol-Myers Squibb Company, a Delaware corporation (“ BMS ” and, together with Sanofi, the “ Parties ” and, individually, each a “ Party ”);

W I T N E S S E T H :

WHEREAS, BMS, Sanofi and Sterling Winthrop Inc., a Delaware corporation (“ Sterling ”), entered into a Development Agreement dated as of July 29, 1993 (the “ Development Agreement ”) concerning the development of two new chemical entities discovered and patented by Sanofi, one known as SR 47436, with the international non-proprietary name Irbesartan (“ Irbesartan ”) and one known as SR 25990C with the international non-proprietary name Clopidogrel Hydrogenosulphate (“ Clopidogrel ”), each with potential ethical pharmaceutical applications in the cardiovascular therapeutic field;

WHEREAS, BMS, Sanofi and Sterling entered into a Master Territory A Agreement dated as of July 29, 1993 (the “ Master Territory A Agreement ”), for the commercialization of the Products in Territory A (as such terms are defined herein);

WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement dated as of September 30, 1994 among Eastman Kodak Company, Sanofi and Sterling, Sanofi acquired certain assets, and assumed certain obligations, of the ethical pharmaceutical business of Sterling, including the rights and obligations of Sterling under the Master Territory A Agreement and the Development Agreement;

WHEREAS, in accordance with Section 4.1.1 of the Master Territory A Agreement, BMS and Sanofi have determined an appropriate legal structure to be implemented for the commercialization of the Products in Territory A;

WHEREAS, Sanofi and BMS have formed, through their indirect wholly owned subsidiaries, Sanofi Pharma Bristol-Myers Squibb, a société en nom collectif organized under the laws of the French Republic (the “ SNC Partnership ”), to effectuate certain of the transactions outlined in the Master Territory A Agreement and, in furtherance thereof, the SNC Partnership will, among other things, procure the active substance chemical bulk used in the Products, enter into arrangements for the processing of such active substance chemical bulk and the packaging, if applicable, of the finished Products into bottles and blister packs, pay royalties for the use of certain patents, trademarks and know-how necessary for the Products, coordinate the maintenance of adequate supplies of such active substance chemical bulk and finished Products, arrange for the distribution of finished Products by the Marketing Entities (as defined herein), ensure the quality of finished Products, coordinate the local marketing of finished Products and further develop the Products in Territory A;

 

 

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WHEREAS, in furtherance of commercializing the Products in Territory A, the Parties and their respective Affiliates intend to enter into the following agreements:

(a) Amended and Restated Status (the “ SNC By-Laws” ) between BMS Investco and Sanofi Participations for the SNC Partnership and Règlement Intérieur (the “ Règlement Intérieur ”) for the SNC Partnership and its managing body, the Territory Management Committee (the “ Territory Management Committee ”);

(b) a Clopidogrel Intellectual Property License and Supply Agreement (the “ Clopidogrel License and Supply Agreement ”) between the SNC Partnership and Sanofi for the license of certain patent, trademark and know-how rights for Clopidogrel and Clopidogrel Products from Sanofi to the SNC Partnership and the supply of active substance chemical bulk for Clopidogrel in exchange for the payment to Sanofi of the Discovery Royalty and the Supply Payment (as such terms are defined therein);

(c) an Irbesartan Intellectual Property License Agreement (the “ Irbesartan License Agreement ”) between the SNC Partnership and Sanofi for the license of certain patent, trademark and know-how rights for Irbesartan and Irbesartan Products (as defined herein) from Sanofi to the SNC Partnership in exchange for the payment to Sanofi of the Discovery Royalty (as such term is defined therein);

(d) an Irbesartan Supply Agreement (the “ Irbesartan Supply Agreement ”) among BMS, Sanofi, the SNC Partnership and their respective Affiliates for the supply of active substance chemical bulk for Irbesartan;

(e) a Product Know-How License Agreement (the “ Know-How License Agreement ”) among the SNC Partnership, Sanofi and BMS for the license of know-how developed by Sanofi and BMS pursuant to the Development Agreement, the use of corporate names by the SNC Partnership and the development of Irbesartan and Clopidogrel on or after January 1, 1997 in exchange for the payment of the Development Royalty (as such term is defined therein) to each of Sanofi and BMS;

(f) a Development Services Agreement (the “ Development Services Agreement ”) among the SNC Partnership and Affiliates of Sanofi and BMS pursuant to which such Affiliates will provide services to the SNC Partnership in connection with the continuing development of the Products;

(g) an Irbesartan Toll Manufacturing Agreement (the “ Irbesartan Toll Manufacturing Agreement ”) for the contract manufacturing of active substance chemical bulk for Irbesartan into Irbesartan Products;

 

 

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(h) a Clopidogrel Toll Manufacturing Agreement (the “ Clopidogrel Toll Manufacturing Agreement ” and, together with the Irbesartan Toll Manufacturing Agreement, the “ Toll Manufacturing Agreements ”) for the contract manufacturing of active substance chemical bulk for Clopidogrel into Clopidogrel Products;

(i) a Purchase and Sale Agreement (the “ Puerto Rico Purchase and Sale Agreement ”) among the SNC Partnership and Affiliate(s) of BMS for the sale of active substance chemical bulk to such Affiliate(s) and the purchase of finished Products; and

(j) a Partnership Services Agreement (the “ Partnership Services Agreement ”) between the SNC Partnership and an Affiliate of Sanofi for the provision of administrative and operating services to the SNC Partnership; and

WHEREAS, the Parties wish to enter into this Agreement to support the general framework for the commercialization and development of the Products in Territory A;

NOW, THEREFORE, in consideration of the mutual covenants and the terms and conditions contained herein, and for other good, valuable and binding consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms. As used in this Agreement, the following terms shall have the following meanings:

“ Adverse Event ” means any negative symptom experienced at the time of or after the taking of any Product of which any Party or any of its Affiliates becomes aware, whether or not considered drag related, including, without limitation, any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action, as well as instances of symptomatic overdose, abuse or withdrawal reactions.

“ Affiliate ”, when used with reference to any Person, means any other Person controlling, controlled by, or under common control with, such Person; provided, however, that, with respect to Sanofi, the definition of Affiliate shall exclude Elf Aquitaine and any Person not controlled by Sanofi that would be an Affiliate of Sanofi solely by reason of its being controlled by Elf Aquitaine. For the purposes of

 

 

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this definition, “ control ” shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person or to veto any material decision relating to the management or policies of a Person, in each case whether through the ownership of voting securities, by contract or otherwise, (b) the beneficial ownership, directly or indirectly, of securities (excluding general partnership interests) representing at least 40% of the voting power of all outstanding voting securities of a Person or (c) the beneficial ownership of at least 50% of the partnership interests of a general partnership. The Parties confirm that each Co-Promotion Entity in Territory A shall be considered to be an Affiliate of Sanofi.

“ Agreement ” means this Territory A Alliance Support Agreement, as originally executed and as amended, modified, supplemented or restated from tune to time, in accordance with Section 8.11 hereof.

“ Alliance Agreements ” means the agreements listed in Schedule 1.01(a) attached hereto, as well as any other agreement entered into by any Affiliate of BMS or Sanofi, as the case may be, in furtherance of the development and/or commercialization of any Product in Territory A.

“ Beneficial owner ” has the meaning set forth in Rule 13d-3 of the U.S. Securities Exchange Act of 1934, as amended.

“ BMS Affiliate ” means an Affiliate of BMS.

“ Clopidogrel Product ” means the product or products having as an active ingredient Clopidogrel or any salt, ester, metabolite or pro-drug thereof.

“ Co-Marketing ” means, for each Product and for any country in Territory A, the marketing of such Product in such country under two or more trademarks by the applicable Marketing Entities.

“ Co-Promotion ” means, for each Product and any country in Territory A, the marketing of such Product in such country under one trademark by me applicable Marketing Entity.

“ Competing Product ” means, with respect to any Product, any other product that [*], but which is not [*]set forth in Schedule [*] or selected for [*] by [*].

 

 

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“ Damages ” means any liability (whether arising out of [*] or otherwise), obligation, loss, fine, damages, arbitration award, settlement amount, penalty, claim, cost or expense (including, without limitation, [*], fees and expenses [*], but excluding any [*]). Damages shall include, without limitation, [*] liability,[*] liability (including, without limitation, any liability relating to [*] and damages for [*].

“ Development Committee ” has the meaning set forth in the Know-How License Agreement.

“ Elf Aquitaine ” means Société Nationale Elt Aquitaine, a société anonyme organized under the laws of the French Republic.

“ Encumbrance ” means any security interest, pledge, mortgage, lien (including, without limitation, tax liens), charge, encumbrance, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership.

“ Governmental Authority ” means any federal, state or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.

“ Irbesartan Product ” means the product or products having as an active ingredient Irbesartan or any salt, ester, metabolite or pro-drug thereof.

“ License Functional Committee ” has the meaning set forth in the Know-How License Agreement.

“ License_Steering Committee ” has the meaning set forth in the Know-How License Agreement.

“ License Strategic Decision ” has the meaning set forth in the Know-How License Agreement.

“ Line Extension ” means, for each Product and with respect to development conducted on or after January 1, 1997, any new dosage or new form of administration of such Product.

 

 

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“ Loss of Exclusivity ” means the loss of exclusivity of a Product in any country in Territory A upon the occurrence of all of the three following conditions: (i) such Product shall have lost its marketing exclusivity (whether by virtue of compulsory license under, or expiration, invalidity or unenforceability of, the patents covering such Product, loss or expiration of any exclusivity conferred de facto or de jure by any statutory marketing or data exclusivity or any other cause); (ii) one or more Competing Products shall have been legally marketed in such country by one or more Third Parties; and (iii) Net Sales of such Product in such country over any period of [*] (after the conditions set forth in sub-clauses (i) and (ii) above shall have been satisfied) shall have [*] the level of Net Sales of such Product in such country over the immediately preceding period of [*]).

“ Major A Country ” means France, Germany, Italy, Spain and the United Kingdom, and any country in Territory A representing at least [*] of aggregate Net Sales of both Products in Territory A, as determined from time to time by [*].

“ Market Penetration ” means, with respect to one or more, Competing Products in any given country in Territory A, the number of units of such Competing Products sold in such country, expressed as a percentage of the sum of (i) the [*] with respect to which [*] constitute [*]and (ii) [*], in each case over a period of [*], as reported by [*].

“ Marketing Entity ” has the meaning set forth under the definition Entité de Marketing in the Règlement Intérieur.

“ Net Sales ” means for any given period and with respect to any Product, the gross amount invoiced in respect thereof by the Marketing Entities to any Person (excluding any transfers between any Party and its Affiliates for purposes of resale, promotional use or clinical trials), less (i) quantity and/or cash discounts, allowances and/or rebates actually allowed or given, (ii) freight, postage and shipping insurance expenses (if separately identified in such invoice), (iii) sales taxes directly related to the sale to the extent included in the gross invoice price (but not including taxes assessed against the income derived from such sale) and (iv) amounts repaid or credited on account of rejections, outdating or the return of such Product.

“ New Indication ” means, for each Product and with respect to development conducted on or after January 1, 1997, any new therapeutic use or application of such Product.

 

 

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“ Person ” means any individual, partnership, firm, corporation, société anonyme, société en nom collectif, société en participation, limited liability company, joint venture, association, trust or other entity or any government or any agency or political subdivision thereof, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the U.S. Securities Exchange Act of 1934, as amended.

“ Product ” means a Clopidogrel Product or an Irbesartan Product, and “ Products ” means both a Clopidogrel Product and an Irbesartan Product.

“ Sanofi Affiliate ” means an Affiliate of Sanofi.

“ Sanofi Pharma ” means Sanofi Pharma, a société anonyme organized and existing under the laws of the French Republic.

“ Selling Effort Remuneration ” means, for each country in which there is Co-Promotion of the Products, the aggregate remuneration paid by the Co-Promotion Entity in such country to the local Affiliates of the Parties to compensate them for their selling efforts, which shall be an amount equal to [*] of Net Sales of the Products in such country, subject to adjustment, or as otherwise determined by [*].

“ Serious Adverse Event ” means any Adverse Event that is life-threatening in that such Adverse Event places the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in permanent disability, birth defect, cancer or death.

“ Territory ” means either Territory A or Territory B and “ Territories ” means both Territory A and Territory B.

“ Territory A ” means the countries and geographic areas described and listed in Schedule 1.01(b) attached hereto.

“ Territory B ” means the countries and geographic areas described and listed in Schedule l.01(c) attached hereto. which shall not include the United States of America for Irbesartan Products.

“ Third Party ” means a Person who or which is neither a Party nor an Affiliate of a Party.

“ United States of America ” means any State or Commonwealth of the United States of America, the District of Columbia, Puerto Rico, the U.S. Virgin Islands,

 

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Guam, American Samoa and any other territory, possession or military base of the United States of America.

“ U.S. GAAP ” means generally accepted accounting principles in the United States of America in effect from time to time applied consistently throughout the periods involved,

SECTION 1.02. Additional Defined Terms. The following additional defined terms shall have the meanings set forth in the sections of this Agreement listed below:

 

 

 

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SECTION 1.03. Accounting Terms . Except as otherwise specifically provided herein, all terms herein that relate to accounting matters shall be interpreted in accordance with U.S. GAAP.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

SECTION 2.01. BMS Representations . BMS represents and warrants each of the following:

(a) Organization: Powers . BMS (i) is a corporation duly organized and in good standing under the laws of the State of Delaware and (ii) has the corporate power to execute and deliver, and to perform its obligations under, this Agreement. Each of the BMS Affiliates that is, or will be, a party to any of the Alliance Agreements (i) is, or will be on the date of execution of such Alliance Agreement, a

 

 

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corporation, general partnership or other entity duly organized and validly existing under the laws of its jurisdiction of organization and (ii) has, or will have on the date of execution of such Alliance Agreement, the power to execute and deliver, and to perform its obligations, under such Alliance Agreement.

(b) Authorization . The execution and delivery by BMS, the performance by it of its obligations under this Agreement, the execution and delivery by each BMS Affiliate of each Alliance Agreement entered into on the date hereof or hereafter and the performance by each BMS Affiliate of its obligations under such Alliance Agreement to which it is, or will be, a party (i) have been, or will be on the date of execution of such Alliance Agreement, duly authorized by all necessary action by BMS and each such BMS Affiliate and do not, or will not on the date of execution of such Alliance Agreement, require the consent or approval of the stockholders or creditors of BMS or any such BMS Affiliate, except such consents as have been obtained, and (ii) do not, or will not on the date of execution of such Alliance Agreement, (A) violate (x) any material provision of law, statute, rule or regulation, (y) the certificate of incorporation or by-laws or other constituent documents of BMS or such BMS Affiliate or (z) any order of any court or other Governmental Authority binding upon BMS or such BMS Affiliate or (B) violate, be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any material provisions of any indenture, agreement or other instrument to which BMS or such BMS Affiliate is a party of by which BMS or such BMS Affiliate or any of their properties or assets is bound.

(c) Enforceability . This Agreement and each Alliance Agreement have been, or will be on the date of execution of such Alliance Agreement, duly executed and delivered by BMS and each BMS Affiliate that is, or will be, a party to any Alliance Agreement and constitute, or will constitute on the date of execution of such Alliance Agreement, legal, valid and binding obligations of BMS and each such BMS Affiliate, enforceable against BMS and each such BMS Affiliate in accordance with their respective terms.

(d) Ownership of Capital Stock . BMS owns, beneficially or of record, a majority of the aggregate voting power of the issued and outstanding voting securities, or otherwise has the right to elect a majority of members to the Board of Directors or similar governing body, of each BMS Affiliate that is, or will be, a party to any Alliance Agreement or that has, or will have, a direct or indirect majority interest in a party to any Alliance Agreement and all such voting securities are fully paid, nonassessable and are owned free and clear of any Encumbrance.

(e) Efficacy and Safety . BMS and each BMS Affiliate that is or will be a party to any Alliance Agreement, to their best knowledge and belief, have not made

 

 

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any statement to Sanofi or any Sanofi Affiliate that is or will be a party to any Alliance Agreement regarding the efficacy or safety of any Product or any process for manufacturing, processing or finishing such Product that is in any material respect untrue or misleading, nor has BMS or such BMS Affiliate omitted to disclose to Sanofi or such Sanofi Affiliates any material fact or information regarding the efficacy or safety of any such process or Product.

SECTION 2.02. Sanofi Representations . Sanofi represents and warrants, as of the date hereof, each of the following:

(a) Organization: Powers . Sanofi (i) is a société anonyme duly organized and validly existing under the laws of the French Republic and (ii) has the corporate power to execute and deliver, and to perform its obligations under, this Agreement. Each of the Sanofi Affiliates that is, or will be, a party to any of the Alliance Agreements (i) is, or will be on the date of execution of such Alliance Agreement, a société anonyme, société en nom collectif or other entity duly organized and validly existing under the laws of its jurisdiction of organization and (ii) has, or will have on the date of execution of such Alliance Agreement, the power to execute and deliver, and to perform its obligations, under such Alliance Agreement.

(b) Authorization . The execution and delivery by Sanofi, the performance by it of its obligations under this Agreement, the execution and delivery by each Sanofi Affiliate of each Alliance Agreement entered into on the date hereof or hereafter and the performance by each Sanofi Affiliate of its obligations under such Alliance Agreement to which it is, or will be, a parry (i) have been, or will be on the date of execution of such Alliance Agreement, duly authorized by all necessary action by Sanofi and each such Sanofi Affiliate and do not, or will not on the date of execution of such Alliance Agreement, require the consent or approval of the stockholders or creditors of Sanofi or any such Sanofi Affiliate, except such consents as have been obtained, and (ii) do not, or will not on the date of execution of such Alliance Agreement, (A) violate (x) any material provision of law, statute, rule or regulation, (y) the statuts or other constituent documents of Sanofi or such Sanofi Affiliate or (z) any order of any court or other Governmental Authority binding upon Sanofi or such Sanofi Affiliate or (B) violate, be in conflict with, result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any material provisions of any indenture, agreement, or other instrument to which Sanofi or such Sanofi Affiliate is a party or by which Sanofi or such Sanofi Affiliate or any of their properties or assets is bound.

(c) Enforceability . This Agreement and each Alliance Agreement have been, or will be on the date of execution of such Alliance Agreement, duly executed and delivered by Sanofi and each Sanofi Affiliate that is, or will be, a party to any

 

 

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Alliance Agreement and constitute, or will constitute on the date of execution of such Alliance Agreement, legal, valid and binding obligations of Sanofi and each such Sanofi Affiliate, enforceable against Sanofi and each such Sanofi Affiliate in accordance with their respective terms.

(d) Ownership of Capital Stock . Sanofi owns, beneficially or of record, a majority of the aggregate voting power of the issued and outstanding voting securities, or otherwise has the right to elect a majority of members to the Board of Directors or similar governing body, of each Sanofi Affiliate that is, or will be, a party to any Alliance Agreement or that has, or will have, a direct or indirect majority interest in a party to any Alliance Agreement and all such voting securities are fully paid, nonassessable and are owned free and clear of any Encumbrance.

(e) Efficacy and Safety . Sanofi and each Sanofi Affiliate that is or will be a party to any Alliance Agreement, to their best knowledge and belief, have not made any statement to BMS or any BMS Affiliate that is or will be a party to any Alliance Agreement regarding the efficacy or safety of any Product or any process for manufacturing, processing or finishing such Product that is in any material respect untrue or misleading, nor has Sanofi or such Sanofi Affiliate omitted to disclose to BMS or such BMS Affiliates any material fact or information regarding the efficacy or safety of any such process or Product.

ARTICLE III

MANAGEMENT OF THE ALLIANCE

SECTION 3.01. Alliance Strategic Committee . In order to ensure the implementation of the agreements set forth herein and in the Alliance Agreements, Sanofi and BMS shall be represented by an Alliance Strategic Committee (the “ Alliance Strategic Committee ”), which shall be responsible for the following decisions (collectively, the “ Alliance Strategic Decisions ”):

(i) approval of Annual Budgetary Targets and Long-Range Plans, substantially in the form of Schedules 4.01(a)-l and 4.01(a)-2 attached hereto, as well as the Territory A Budget;

(ii) establishment of a manufacturing plan for Territory A and coordination of such manufacturing plan with the manufacturing plan for Territory B;

(iii) selection of the commercial structures (i.e., Co-Marketing vs. Co-Promotion) and entities to market the Products in Territory A; and

 

 

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(iv) resolution of any disagreement of the Territory Management Committee concerning the allocation of selling responsibilities of the local Affiliates of the Parties in any country where there is Co-Promotion of a Product.

SECTION 3.02. Alliance Functional Committees . Subject to the general oversight and authority of the Alliance Strategic Committee, the following functional committees (the “ Alliance Functional Committees ”) are hereby established and shall be maintained and empowered as hereinafter provided: (i) a finance committee (the “ Finance Committee ”) and (ii) a manufacturing and sourcing committee (the “ Manufacturing and Sourcing Committee ”).

SECTION 3.03. Finance Committee . The Finance Committee shall be responsible for (i) proposing, implementing and modifying, as necessary, the appropriate legal and tax operating arrangements and structures for the marketing of the Products in each country in Territory A, (ii) establishing a calculation methodology for allocating the Selling Effort Remuneration between the Affiliates of the Parties in countries where there is Co-Promotion of the Products in Territory A, (iii) proposing, implementing and modifying, as necessary, the appropriate consolidation, reporting and sharing procedures relating to the commercialization of the Products in Territory A, (iv) selecting the names for the Co-Promotion Entities, (v) determining the method and amount of financing for the SNC Partnership and the Co-Promotion Entities, (vi) determining which countries are Major A Countries, (vii) determining the terms and conditions for distribution arrangements in Non-Promotional Countries (as such term is defined in the Règlemet Intérieur) in Territory A and (viii) implementing the decisions of the Alliance Strategic Committee in Territory A. The Finance Committee shall report and make its recommendations to the Alliance Strategic Committee.

SECTION 3.04. Manufacturing and Sourcing Committee . The Manufacturing and Sourcing Committee shall be responsible for (i) subject to Section 3.08(b) hereof, assuring the supply of active substance chemical bulk for Irbesartan on the most favorable terms then available and negotiating contracts for such supply with appropriate manufacturer(s), (ii) in the event Sanofi ceases to be the exclusive supplier of the active substance chemical bulk for Clopidogrel, selecting one or more alternate sources of supply for such active substance chemical bulk, (iii) setting the manufacturing fee and the other terms and conditions for the processing of active substance chemical bulk into finished Products, (iv) coordinating the supply of active substance chemical bulk and finished Products in Territory A, Territory B and, with respect to Irbesartan and Irbesartan Products, the United States of America, (v) implementing the decisions of the Alliance Strategic Committee and (vi) making recommendations concerning the establishment of a manufacturing plan for Territory A and the coordination of such plan with the manufacturing plan for Territory B. The Manufacturing and Sourcing Committee shall report and make its recommendations concerning the establishment of a manufacturing plan under clause (vi)

 

 

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above to the Alliance Strategic Committee and shall report and make all other recommendations and decisions to Alliance Management, who shall then decide whether such recommendations should be reported to the Alliance Strategic Committee or directly to the Territory Management Committee.

SECTION 3.05. Committee Composition and Decision Making. (a) The Alliance Strategic Committee shall at all times consist of six (6) representatives, three (3) of whom shall represent BMS and three (3) of whom shall represent Sanofi. The representatives of BMS shall be the persons serving from time to time as (i) President, Worldwide Medicines Group, (ii) Senior Vice President, Worldwide Franchise Management and (iii) Vice President, Alliance Management. The representatives of Sanofi shall be the persons serving from time to time as (i) President and Executive Director, Sanofi Pharma, (ii) Senior Vice President, Strategy, Sanofi Pharma and (iii) Vice President, Alliance Management, Sanofi Pharma. If any such position has been modified or eliminated, the Party so affected shall appoint an individual whose position is substantially similar to the position so modified or eliminated. The Alliance Strategic Committee shall have the sole power, by a consensus of the representatives of Sanofi and BMS, to make any and all Alliance Strategic Decisions and to resolve any deadlock or conflict arising among or within the Alliance Functional Committees that has not been resolved by Alliance Management.

(b) Each of the Manufacturing and Sourcing Committee and the Finance Committee shall at all times consist of any equal number of representatives of BMS and Sanofi. All representatives of each Alliance Functional Committee shall be senior management personnel of Sanofi, BMS or their respective Affiliates. All recommendations and decisions made by each Alliance Functional Committee shall be made by a consensus of the representatives of Sanofi and BMS thereon. Each Alliance Functional Committee shall be authorized only to make recommendations to the Alliance Strategic Committee unless, and only to the extent that, it shall have received a specific written delegation of greater authority from the Alliance Strategic Committee pursuant to Section 3.10 hereof; provided, however, that each Alliance Functional Committee shall have the authority, by a consensus of the representatives of Sanofi and BMS thereon, to make decisions on issues within such Alliance Functional Committee’s specific scope of responsibilities as set forth in Sections 3.03 and 3.04 hereof, respectively.

SECTION 3.06. Deadlock Resolution. (a) Each Alliance Functional Committee and each License Functional Committee shall inform Alliance Management of any disagreements existing within such Functional Committee and/or with any other Functional Committee within 10 business days of such disagreement and Alliance Management shall attempt to resolve any such disagreement by consensus. If Alliance Management is unable to resolve any such disagreement by consensus within 15 business days after being informed of such disagreement, Alliance Management shall submit the matter(s) in dispute to the Alliance Strategic Committee or the License Steering Committee, as the case may be.

 

 

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(b) If (i) the Alliance Strategic Committee is unable to agree on any Alliance Strategic Decision, (ii) the License Steering Committee is unable to agree on any License Strategic Decision, (iii) the Alliance Strategic Committee is unable to resolve any disagreement arising within any Alliance Functional Committee or among the Alliance Functional Committees or (iv) the License Steering Committee is unable to resolve any disagreement arising within any License Functional Committee or among the License Functional Committees, as evidenced, in each case, by the relevant committee’s failure to agree unanimously following two consecutive attempts at consensus, with the second attempt following the first by not less than 10 business days (in any such case, an “ Unsatisfactory Final Outcome ”), then such committee may agree unanimously to submit such Unsatisfactory Final Outcome to non-binding arbitration on such terms as it may unanimously agree, or either Sanofi or BMS may terminate its participation in the commercialization of the Product to which the Unsatisfactory Final Outcome relates in accordance with Article VII hereof:

(i) in the country(ies) affected by such Unsatisfactory Final Outcome pursuant to Section 7.02(i) hereof;

(ii) throughout Territory A if the Unsatisfactory Final Outcome affects the commercialization of such Product in France and any two of the other Major A Countries pursuant to Section 7.04(i) hereof;

provided, however, that any such termination may also be elected by either Party following the outcome of any such non-binding arbitration.

(c) Notwithstanding anything to the contrary contained in this Article III, no Unsatisfactory Final Outcome shall be deemed to have occurred as a result of the failure by the representatives on the Alliance Strategic Committee, the License Steering Committee, any Alliance Functional Committee or any License Functional Committee to agree on (i) [*] unless the actions required by [*] are no longer permitted as a result of [*] and such change is [*] or (ii) any other matter [*], unless it would [*], in accordance with the terms of this Agreement and the Alliance Agreements, without [*] with respect to such matter. In the event of the failure by the representatives on such committee to reach agreement on [*], such committee’s [*] shall not be [*] or [*] with respect to such matter, as the case may be, and the [*] in accordance with the framework established by such committee’s [*] until such agreement shall have been reached, to the extent permitted by applicable law.

 

 

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SECTION 3.07. Alliance Management. The Alliance Strategic Committee shall be assisted in its management of this Agreement and the Alliance Agreements by an alliance management (the “ Alliance Management ”), which shall be responsible for (i) coordinating and managing processes and interfaces to ensure that integrated business systems are in place and fully functional for the commercialization of the Products, (ii) informing the Alliance Strategic Committee of milestones, recommendations and decisions made by the Alliance Functional Committees and the License Functional Committees, (iii) ensuring appropriate liaison among the Alliance Strategic Committee, the Alliance Functional Committees, the License Steering Committee, the License Functional Committees, the Territory Management Committee and, to the extent necessary, with each of their respective counterparts in Territory B, (iv) being the formal point of first recourse for reaching a consensual solution for any disagreement arising among or within any Alliance Functional Committee or any License Functional Committee and (v) ensuring that minutes of each meeting of each Alliance Functional Committee, each License Functional Committee and the Territory Management Committee are finalized and circulated to all appropriate Persons and committees in a timely manner. The Alliance Management shall not be a separate committee, but shall consist of an equal number of representatives of each of BMS and Sanofi. The initial membership of Alliance Management shall consist of the two persons serving from time to time as Vice President, Alliance Management for each of BMS and Sanofi Pharma. Such positions shall not be eliminated prior to the termination of this Agreement.

SECTION 3.08. Cross-Territory Issues. (a) The Alliance Strategic Committee, the License Steering Committee, any Alliance Functional Committee or any License Functional Committee may agree with its counterpart committee in Territory B that certain studies, programs or plans will benefit the sale of the Products in Territory B as well as Territory A. In such case, such committee shall negotiate in good faith with its counterpart committee in Territory B to allocate any expenses related to such studies, programs or plans between the two Territories, with the expectation that, unless otherwise agreed, such expenses shall be split evenly between the two Territories.

(b) To the extent feasible, matters within the scope of responsibilities of the Manufacturing and Sourcing Committee relating solely to Territory A shall be the sole responsibility of the Manufacturing and Sourcing Committee; provided, however, that manufacturing and sourcing issues also having an impact on the-supply of the Products in Territory B, the commercialization of Irbesartan Products in the United States of America or the supply of active substance chemical bulk containing Irbesartan shall be coordinated with the manufacturing and sourcing committee for Territory B.

(c) Each of Sanofi and BMS shall, or shall cause their respective Affiliates to, supply approximately [*], in the aggregate, of the active substance chemical bulk for Irbesartan required by the Parties and their Affiliates for the manufacturing of Irbesartan

 

 

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Products in Territory A, Territory B and the United States of America; provided, however, that [*] shall be the [*] supplier of such bulk in Territory B and the United States of America and the [*] supplier of such bulk in Territory A; provided, further, that [*] shall be the [*] supplier of such bulk in Territory A and the [*] supplier of such bulk in Territory B and the United States of America.

SECTION 3.09. Implementation of Decisions . Each of BMS and Sanofi shall, and shall cause their respective Affiliates (including, without limitation, the SNC Partnership and its manager(s)) to, implement and ensure that their actions are consistent with the decisions of the Alliance Strategic Committee, the License Steering Committee, each Alliance Functional Committee, each License Functional Committee and the Territory Management Committee and, furthermore, not to dissolve the SNC Partnership other than in accordance with the terms and conditions of the SNC By-Laws and the Règlement Intérieur.

SECTION 3.10. Delegation . The Alliance Strategic Committee may, by a consensus of the representatives of Sanofi and BMS thereon, expressly and by written resolution establish any other functional committee and delegate its powers to such functional committee and/or to any then existing Alliance Functional Committee on such terms as it deems appropriate.

ARTICLE IV

BUDGETARY PROCESS

SECTION 4.01. Budgetary Development . (a) Sanofi shall prepare and submit, or cause to be prepared and submitted, to the Alliance Strategic Committee, (x) the aggregate of the annual budgets for the upcoming calendar year for sales and pre-tax profits (the “ Annual Budgetary Targets ”) for each Product for the Marketing Entities in countries in Territory A that were established for the Co-Promotion of one or both Products (each, a “ Co-Promotion Entity ”) and projections for aggregate sales and aggregate pre-tax profits of the Co-Promotion Entities for the subsequent three calendar years (the “ Long-Range Plans ”) for each Product, which budgetary targets and projections shall be substantially in the form of Schedules 4.01 (a)-1 and 4.01 (a)-2 attached hereto, and (y) the annual budget for the SNC Partnership (the “ Territory A Budget ”). The Finance Committee shall prepare such budget, budgetary targets and projections; provided, however, that Sanofi shall have final authority to determine the budget, budgetary targets and projections to be submitted to the Alliance Strategic Committee. Pre-tax profits shall be calculated by [*] for each Product, and sales shall be calculated by [*], each in accordance with the methodology to be established by [*].

 

 

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(b) The Alliance Strategic Committee may require Sanofi to submit any financial information reasonably necessary for determining whether to approve the Territory A Budget, any Annual Budgetary Target or any Long-Range Plan for any Product.

SECTION 4.02. Budgetary Deadlocks. The Alliance Strategic Committee shall consider and unanimously approve, by December 15 of each calendar year, the Annual Budgetary Targets for each Product, the Long-Range Plans for each Product and the Territory A Budget. In accordance with Section 3.06 hereof, if the Alliance Strategic Committee cannot reach agreement with respect to any Annual Budgetary Target, Long-Range Plan or the Territory A Budget submitted by Sanofi, the Annual Budgetary Targets and the Territory A Budget for the current calendar year shall carry over to the next calendar year, and the Long-Range Plans shall remain unchanged, until the Annual Budgetary Targets, the Territory A Budget and the Long-Range Plans for the current calendar year shall have been approved.

SECTION 4.03. Out-of-Budget Situations. During April, July and October of each calendar year, Sanofi shall submit to the Alliance Strategic Committee a statement providing revised annual projections of aggregate sales and pre-tax profits for the Co-Promotion Entities for each Product for such calendar year (which shall be calculated in the same manner as, and compared to, the Annual Budgetary Targets for such calendar year approved by the Alliance Strategic Committee) revised, if necessary, to take into account the actual year-to-date results and any other relevant factors, together with an explanation of any material revisions in the projections relative to the budgeted amounts thereof approved by the Alliance Strategic Committee (the “ Revised Projection ”). To the extent that a Revised Projection shows (or Sanofi advises BMS) that the annual aggregate pre-tax profits of the Co-Promotion Entities in Territory A for any Product will fall short of the annual aggregate pre-tax profit amount in the relevant Annual Budgetary Target for such Product approved by the Alliance Strategic Committee by [*] of such Annual Budgetary Target, BMS may, within 30 days of receipt of such Revised Projection or such notice, require Sanofi to secure the Alliance Strategic Committee’s approval of either (i) [*]; or (ii) [*].

ARTICLE V

ADDITIONAL AGREEMENTS

SECTION 5.01. Termination of Master Territory A Agreement. This Agreement and the Alliance Agreements cancel and supersede the Master Territory A Agreement, which shall terminate with effect as of the date upon which this Agreement shall have been executed.

 

 

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SECTION 5.02. Non-Competition . During the period from and after the date hereof until [*], each Party shall not, and shall cause its Affiliates not to, directly or indirectly, [*].

SECTION 5.03. Confidentiality . (a) During the period from and after the date hereof until the [*] of the expiration or early termination of this Agreement, each of the Parties shall, and shall cause their respective Affiliates and its and their officers, employees and advisors to, keep confidential all information acquired from the other Party or its Affiliates, in connection with this Agreement or the Alliance Agreements and the transactions contemplated hereby and thereby, including the contents of this Agreement and the Alliance Agreements, other than any information that (i) is or hereafter becomes generally available to the public other than by reason of any default with respect to a confidentiality obligation; (ii) was already known to the recipient as evidenced by prior written documents in its possession; or (iii) is disclosed to the recipient by a Third Party who is not in default of any confidentiality obligation to the disclosing Party (such information being “ Confidential Information ”).

(b) The provisions of Section 5.03(a) hereof shall not apply to Confidential Information that (i) is submitted by the recipient to Governmental Authorities to facilitate the issuance of marketing approvals for a Product, provided, however, that reasonable measures shall have been taken to ensure confidential treatment of such information, (ii) is provided by the recipient to Third Parties under appropriate terms and conditions, including confidentiality provisions equivalent to those in this Agreement, for consulting, manufacturing development, manufacturing, external testing and marketing trials, or (iii) is otherwise required to be disclosed in compliance with applicable laws or regulations or order by a court or other regulatory body having competent jurisdiction.

(c) Each Party shall, and shall cause its Affiliates and its and their officers, employees and advisors to, use any Confidential Information obtained by it from the other Party or its Affiliates in connection with this Agreement and the Alliance Agreements, solely in connection with the commercialization of the Products and the transactions contemplated hereby and thereby.

(d) Except as required by applicable law, neither of the Parties shall issue a press release or make a public announcement that has, as its major focus, any aspect of the commercialization of the Products, without the prior written approval of the other Party, which approval shall not be unreasonably withheld.

 

 

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SECTION 5.04. Insurance. Each of the Parties shall maintain, or shall cause to be maintained with respect to itself and each of its Affiliates that is a party to any of the Alliance Agreements, such types and levels of insurance (including, without limitation, general and product liability and environmental liability insurance), which may include self-insurance, as are customary in the pharmaceutical industry to provide coverage for the activities contemplated hereby and thereby. Each Party shall keep the other Party informed of the general parameters of its liability insurance program and any proposed substantive change therein.

SECTION 5.05. Further Assurances. (a) Each Party agrees to, and to cause its Affiliates to, execute, acknowledge, deliver, file, record and publish such further certificates, amendments to certificates, instruments and documents, and do all such other acts and things as may be required by law, or as may he required to carry out the intent and purposes of this Agreement and the Alliance Agreements.

(b) No later than September 30, 1997, BMS shall, and shall cause its Affiliates to, assign to Sanofi all of their rights, title and interests in and to any patent and patent application related to Irbesartan, Clopidogrel or the Products, existing as of June 6, 1997, and shall take all reasonable actions to ensure the filin