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Exhibit 10.31
EXECUTION COPY
NORTH AMERICAN TERMINATION AND TRANSITION AGREEMENT
BY AND BETWEEN
GENZYME CORPORATION
AND
WYETH
ACTING THROUGH ITS
WYETH PHARMACEUTICALS DIVISION
NOVEMBER 3, 2004
CONFIDENTIAL
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NORTH AMERICAN TERMINATION AND TRANSITION AGREEMENT
THIS NORTH AMERICAN TERMINATION AND
TRANSITION AGREEMENT (THE "AGREEMENT") is
entered into as of November 3, 2004 (the
"SIGNING DATE") by and between Genzyme
Corporation, a Massachusetts corporation
("GENZYME"), and Wyeth, a Delaware
corporation, acting through its Wyeth
Pharmaceuticals division ("WYETH"). Unless
the context clearly requires otherwise, all
references to Genzyme and Wyeth
shall include any predecessor entity
thereto that was a party to the Synvisc
Agreements (defined below), including
Biomatrix, Inc. ("BIOMATRIX"), in the case
of Genzyme, and American Home Products
Corporation, acting through its
Wyeth-Ayerst Laboratories Division ("AHP"),
in the case of Wyeth. Genzyme and
Wyeth are referred to individually as a
"Party" and collectively as the
"Parties."
RECITALS
WHEREAS, Genzyme and Wyeth are parties to the Synvisc
Agreements
(defined below) regarding the development,
supply and marketing of
intra-articular treatments of
osteoarthritis by viscosupplementation;
WHEREAS, the Parties now desire to terminate the Synvisc
Agreements;
WHEREAS, Wyeth desires to transfer or license to Genzyme, in some
cases,
and revert back to Genzyme, in other cases,
and Genzyme desires to acquire or
license from Wyeth, all of Wyeth's right,
title and interest in and to certain
of Wyeth's assets relating to the Synvisc
Products (defined below); and
WHEREAS, Genzyme desires to obtain performance of specified
transitional
services from Wyeth, and Wyeth is willing
to perform such services for Genzyme.
NOW, THEREFORE, in consideration of the foregoing recitals and
the
mutual covenants and agreements contained
in this Agreement, the Parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS
The following terms, when capitalized, shall have the following
meanings
(such meanings to be equally applicable to
both the singular and plural forms of
the terms defined) as used in this
Agreement:
1.1
"AFFILIATE" means, with respect to any person, any person
which,
directly or indirectly through the
ownership of equity securities or through
other arrangements, either controls, or is
controlled by or is under common
control with, such person. A person shall
be deemed to be in control of another
entity if it owns or controls at least
fifty percent (50%) of the equity
securities of the subject entity entitled
to vote in the election of directors
(or, in the case of an entity that is not a
corporation, for the election of the
corresponding managing authority);
PROVIDED, HOWEVER, that a person shall not be
deemed to be in control of an entity in
which a person owns a majority of the
ordinary voting power to elect a majority
of the board of directors
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
1
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or other governing board but is restricted
from electing such majority by
contract or otherwise, until such time as
such restrictions are no longer in
effect. As used in this Section 1.1, the
term "person" shall mean any
individual, corporation, partnership,
trust, unincorporated organization or a
government or any agency or political
subdivision thereof.
1.2
"BENEFIT ARRANGEMENT" means the arrangements referenced in
Section 6.1(b).
1.3
"CAUSE" shall have the meaning set forth in Section 6.2(b)(ii).
1.4
"CODE" means the Internal Revenue Code of 1986, as amended.
1.5
"CUMULATIVE NET SALES" means the aggregate amount of Synvisc
Net
Sales during the Term.
1.6
"EMPLOYEES" means those individuals as set forth on
SCHEDULE 1.6.
1.7
"EMPLOYEE PLANS" shall have the meaning set forth in Section
6.1(a).
1.8
"ENCUMBRANCE" means any lien, pledge, hypothecation, charge,
mortgage, security interest, encumbrance,
equitable interest, claim, preference,
right of possession, lease, license,
encroachment, covenant, infringement,
interference, order, right of first
refusal, defect, reservation, limitation,
impairment, imperfection of title,
condition or restriction of any nature,
including any restriction on the transfer
of any asset, any restriction on the
receipt of any income derived from any
asset, any restriction on the use of any
asset and any restriction on the
possession, exercise or transfer of any other
attribute of ownership of any asset; except
any of the foregoing or other
matters, individually and in the aggregate,
that are not materially adverse to,
or materially interfere with, the use of
the asset as they are currently or
contemplated to be used or their adequacy
for such use. "Encumbered" has a
correlative meaning.
1.9 "ERISA" means
the Employee Retirement Income Security Act of
1974, as amended.
1.10
"ERISA AFFILIATE" means, with respect to any entity, any other
entity which, together with such entity,
would be treated as a single employer
under Section 414 of the Code.
1.11 "FDA"
means the United States Food and Drug Administration, or
any successor agency thereto.
1.12
"GENZYME COLLABORATION IP" means any and all intellectual
property rights licensed to Wyeth pursuant
to the terms of the Synvisc
Agreements.
1.13
"GENZYME CONFIDENTIAL INFORMATION" means any (a) Information
and
other information and materials furnished
to Wyeth by Genzyme pursuant to the
Synvisc Agreements or this Agreement; (b)
Information relating solely to the
Synvisc Products, which Information was
developed by or on behalf of Wyeth in
the course of the collaboration under the
Synvisc Agreements; and (c) provisions
of this Agreement that are the subject of
an effective order of the
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
2
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U.S. Securities and Exchange Commission
granting confidential treatment pursuant
to the Securities Act of 1934, as
amended.
1.14
"GENZYME'S SAVINGS PLAN(S)" shall have the meaning set forth in
Section 6.3(c).
1.15
"GENZYME'S SPENDING ACCOUNT PLAN" shall have the meaning set
forth in Section 6.3(h).
1.16
"GENZYME'S WELFARE PLANS" shall have the meaning set forth in
Section 6.3(d).
1.17
"GOVERNMENT CONTRACTS" means the contracts between Wyeth or its
Affiliates and governmental agencies with
respect to Synvisc Products as set
forth on SCHEDULE 1.17.
1.18 "HSR
ACT" means the Hart Scott Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and
regulations promulgated thereunder.
1.19
"INFORMATION" means techniques, information, know-how and data
relating to commercialization of the
Synvisc Products and including (but not
limited to) marketing, pricing,
distribution, cost, sales and manufacturing data
or descriptions.
1.20
"INVENTION" means any patentable invention or discovery
relating
to the Synvisc Products.
1.21
"KNOW-HOW" means any and all product specifications, processes,
product designs, plans, trade secrets,
ideas, concepts, manufacturing,
engineering and other manuals and drawings,
standard operating procedures, flow
diagrams, chemical, pharmacological,
toxicological, pharmaceutical, physical and
analytical, safety, efficacy, stability,
quality assurance, quality control and
clinical data, technical information, data,
research records, compositions,
process validation reports, analytical
method validation reports, specifications
for stability trending and process
controls, testing and reference standards for
impurities and degradation products,
customer and supplier lists and similar
data and information, formulation for
administration and all other confidential
or proprietary technical and business
information whether written or oral and in
whatever format kept.
1.22
"PATENT" means patents, applications for patent, provisional
applications for patent, and any patents
issuing therefrom, including any
divisions, continuations, continued
prosecution applications and
continuations-in-part thereof,
confirmations, and reexamination certificates,
renewals, reissue patents, patent
extensions and patent term restorations, and
any foreign equivalents of the foregoing or
corresponding patents or patent
applications, in each case filed anywhere
in the Territory.
1.23
"PENSION PLAN" means an employee pension benefit plan (as such
term is defined in Section 3(2) of ERISA)
that is intended to qualify under
Section 401(a) of the Code, is subject to
the funding requirements of Section
412 of the Code and is maintained by
Sellers or an ERISA Affiliate.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
3
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1.24
"PRODUCT LIABILITY" means a breach of any product warranty
(whether express or implied), strict
liability in tort, product recall, or any
other liability, claim or expense arising
from the manufacturing, packaging,
labeling (including instructions for use),
marketing, distribution or sale of
Synvisc Products (whether for clinical
study purposes, commercial use or
otherwise).
1.25
"SUPPLY AGREEMENT" means that certain Supply Agreement by and
between Biomatrix and AHP, dated as of
February 7, 1997, as amended.
1.26
"SYNVISC ADVERSE MEDICAL EXPERIENCE" means any medical
complaint
from a user of the Synvisc Product without
regard to whether the medical
complaint was related to Synvisc Product
use.
1.27
"SYNVISC AGREEMENTS" means the Supply Agreement, the Trademark
License Agreement and the U.S. License
Agreement.
1.28
"SYNVISC NET SALES" means the total gross invoice price
received
from the sale of all Synvisc Products by
Genzyme, its Affiliates and licensees
in the Territory during the Term to
non-Affiliated distributors, wholesalers,
hospitals, retail pharmacies, patients,
physicians, clinics and other Third
Party purchasers, less, provided that such
items do not exceed reasonable and
customary amounts in the Territory, (i)
trade, cash and quantity discounts
actually allowed and taken with respect to
such sales or because of rebates or
retroactive price reductions and billing
corrections with respect to sales; (ii)
tariffs, duties, excises, sales taxes,
value added or other taxes imposed upon
and paid with respect to such sales
(excluding national, state or local taxes
based on income); (iii) amounts repaid or
credited to third party purchasers by
reason of rejections, defects, recalls or
return; and (iv) reasonable freight,
transportation and insurance expenses
actually paid. Such amounts shall be
determined from the books and records of
Genzyme, its Affiliates and licensees
maintained in accordance with generally
accepted accounting principles,
consistently applied.
In the case of any sale or other disposal
of Synvisc Product between or among
Genzyme and its Affiliates or licensees,
for resale, Net Sales shall be
calculated as above only on the amount
received from the first arm's length sale
thereafter to a Third Party.
1.29
"SYNVISC PRODUCT(s)" means (a) hylan gel-fluid 20
(hylan G-F 20), including the product
currently known as "Synvisc", (b) all
extensions of label claims for such
products, including new dosage and
presentation forms and packaging
improvements therefor, and (c) the
bacterially-fermented HA (hylastan SGL-80)
product currently under development
by Genzyme, sometimes referred to as AVS,
in each case for all uses and
applications thereof so long as such
products are approved for the treatment of
osteoarthritis. Synvisc Product does not
include any product in which the
Synvisc Product described in the foregoing
(a), (b) or (c) is used as a carrier
for local delivery of a therapeutic agent
which is approved by the FDA in the
United States of America or the HPB in
Canada and is proprietary to Genzyme.
1.30
"TERM" means the period from the Closing Date to June 30, 2012.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
4
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1.31
"TERRITORY" means United States of America, Canada and, solely
to the extent Genzyme reacquires for itself
rights to Synvisc Products from its
licensee in Mexico, Mexico, in each case at
any time during the Term.
1.32
"THIRD PARTY(-IES)" means any person or entity other than
Genzyme or Wyeth and their respective
Affiliates.
1.33
"TRADEMARK LICENSE AGREEMENT" means that certain Trademark
License Agreement by and between Biomatrix
and AHP dated as of February 7, 1997,
as amended.
1.34
"TRANSFERRED EMPLOYEES" shall have the meaning set forth in
Section 6.2(a).
1.35 "U.S.
LICENSE AGREEMENT" means that certain United States
License Agreement by and between Biomatrix
and AHP, dated as of February 7,
1997.
1.36
"VISCOSUPPLEMENT PRODUCT" means a locally delivered product
derived from Hyaluronan, sodium hyaluronate
or any other polymeric biomaterial
that is intended to treat the pain
associated with osteoarthritis.
Viscosupplement Product does not include
any product in which Hyaluronan, sodium
hyaluronate or any other polymeric
biomaterial is used as a carrier for local
delivery of a therapeutic agent which is
approved by the FDA in the United
States of America or the HPB in Canada and
is proprietary to Wyeth.
1.37
"WYETH CONFIDENTIAL INFORMATION" means any provisions of this
Agreement that are the subject of an
effective order of the U.S. Securities and
Exchange Commission granting confidential
treatment pursuant to the Securities
Act of 1934, as amended.
1.38
"WYETH'S PENSION PLAN" shall have the meaning set forth in
Section 6.3(b).
1.39
"WYETH'S RETIREE WELFARE PLANS" shall have the meaning set
forth
in Section 6.3(f).
1.40
"WYETH'S SAVINGS PLAN" shall have the meaning set forth in
Section 6.1(e).
1.41
"WYETH'S SESP" shall have the meaning set forth in Section
6.3(c).
1.42
"WYETH'S SPENDING ACCOUNT PLANS" shall have the meaning set
forth in Section 6.3(h).
1.43
"WYETH'S SUPPLEMENTAL PLANS" shall have the meaning set forth
in
Section 6.3(b).
1.44
"WYETH'S WELFARE PLANS" shall have the meaning set forth in
Section 6.3(d).
1.45 OTHER
DEFINED TERMS. The following terms are defined in the
specified sections of this Agreement:
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
5
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<Table>
<Caption>
DEFINED TERM
SECTION
------------
-------
<S>
<C>
Acquired Assets
3.1
AHP
Preamble
Assigned Contracts
3.1(g)
Associated Parties
15.1(a)
Audit Disagreement
7.8(b)
Base Pay
6.2(b)(ii)
Biomatrix
Preamble
Claims
15.1(a)
Closing
2.5
Closing Date
2.5
Completed Transition
8.1
Damages
13.1
Disabled Employee
6.2(b)(iv)
Dispute
17.1
Domain Name
3.1(d)
Excluded Assets
3.2
Genzyme
Preamble
Genzyme HR Policies
6.2(b)(ii)
Hiring Transition Period
6.2(b)(iv)
Indemnified Party
13.3
Indemnifying Party
13.3
Mandated Health Care Coverage
6.3(g)
Party/Parties
Preamble
Payment Period
7.4(b)
Pre-Closing Period
11.1
Promotional Materials
5.7
Released Claims
15.1(a)
Salary Continuation Period
6.2(b)(iii)
Severance
6.2(b)(ii)
Signing Date
Preamble
Transition Services
8.1
Workers' Compensation Employee
6.2(b)(v)
Wyeth
Preamble
Wyeth Copyrights
3.1(a)
Wyeth House Marks
3.1(b)
Wyeth Sales Force
11.1(b)
Wyeth Trademarks
3.1(b)
</Table>
ARTICLE 2
TERMINATION OF COLLABORATION AGREEMENTS
2.1
COLLABORATION AGREEMENTS. Effective upon the Closing Date and
notwithstanding anything to the contrary
contained in any of the Synvisc
Agreements, except as
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
6
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otherwise set forth in this Section 2.1,
each of the Synvisc Agreements and all
verbal understandings relating thereto
shall be irrevocably terminated and of no
further force and effect, including without
limitation, those provisions in the
Synvisc Agreements expressly stated to
survive termination, and the Parties
shall be released from all obligations set
forth in the Synvisc Agreements in
accordance with the terms of Article 15.
Notwithstanding the foregoing to the
contrary, those terms of the Synvisc
Agreements expressly stated in Sections
13.4 and 16.3 of this Agreement to survive
termination (as well as any
definitions referenced by such terms) shall
remain in full force and effect in
accordance with the terms and conditions of
this Agreement.
2.2
EFFECTS OF TERMINATION. Without limiting the generality of
Section 2.1, upon the Closing Date, all
licenses and other rights granted by
Genzyme to Wyeth under the Synvisc
Agreements will irrevocably terminate
immediately and all rights in and to the
Genzyme Collaboration IP shall revert
immediately to Genzyme. Except as set forth
in this Agreement and except for any
Transition Services to be provided by
Wyeth, Wyeth will have no further right or
obligation to develop, manufacture, sell,
distribute or otherwise commercialize
the Synvisc Products under the Synvisc
Agreements from and after the Closing
Date, and Genzyme shall be solely
responsible for the development, manufacture,
transportation, testing, sale, distribution
and commercialization of Synvisc
Products from and after the Closing Date.
Without limiting the generality of the
foregoing:
(a)
CHARGEBACKS. Upon Closing, Genzyme shall be responsible
for all customer chargebacks under customer
contracts for Synvisc Products sold
in the Territory. Genzyme shall be
responsible for reimbursing Wyeth for all
qualified customer chargebacks received by
Wyeth on or after the Closing Date
and processed by Wyeth, which chargebacks
shall be for the account of Genzyme.
(b)
RETURNS. Wyeth shall be financially responsible for all
qualified returns of Wyeth labeled Synvisc
Product sold in the United States
prior to the Closing Date, up to a maximum
of [**] cumulative credits or refunds
to customers for returns of such product.
Genzyme shall be financially
responsible for all returns of Synvisc
Product in excess of [**] of returns. For
the avoidance of doubt, all returns in
excess of [**] of Wyeth labeled Synvisc
Product sold by Wyeth prior to the Closing
Date shall be for the account of
Genzyme. Returns shall be processed as set
forth below.
(i)
Within five (5) business days after the Closing
Date, Wyeth will notify all wholesalers,
physicians, clinics, pharmacy chains
and pharmacy benefit management companies
within Wyeth's customer database that
Genzyme has acquired the rights to the
Synvisc Products. The notification to be
sent by Wyeth shall be reviewed and
approved in advance by Genzyme, such
approval not to be unreasonably withheld.
Such notice will specify that future
qualified returns of Synvisc Products after
the Closing Date must be returned to
Genzyme's return goods processor for
credit.
(ii) In
the event that after the Closing Date, Wyeth
(or Wyeth's designated third party
processor) receives any qualified returns of
Synvisc Product (whether sold by Wyeth or
Genzyme), Wyeth shall be responsible
for processing such qualified returns
and
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
7
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shall refund or credit the purchase price
to the customer, subject to
subsections (iii) and (iv) below.
(iii) In the
event that after the Closing Date Genzyme
(or Genzyme's designated third party
processor) receives any returns of Synvisc
Product (whether sold by Wyeth or Genzyme),
then Genzyme shall be responsible
for processing all such qualified returns
of Synvisc Product and for crediting
or refunding the purchase price to such
customers, at Genzyme's expense;
provided, however, that Wyeth shall be
financially responsible for qualified
returns of Wyeth-labeled Synvisc Product
sold in the United States prior to the
Closing Date until the amount refunded or
credited to customers for such returns
totals [**] in the aggregate (the "WYETH
RETURN LIABILITY").
(iv) Wyeth
shall satisfy the Wyeth Return Liability
in the following manner: (A) Wyeth shall
provide written documentation to
Genzyme of any credit or refund to any
customer under subsection (ii) above and
the Wyeth Return Liability shall be reduced
by the amount refunded to the
customer thereunder, and (B) Genzyme shall
deduct from the payments due to Wyeth
under Section 7.4 the amount of any credit
or refund to customers by Genzyme for
qualified returns of Wyeth labeled Synvisc
Product sold in the United States
prior to the Closing Date until the Wyeth
Return Liability (as may be adjusted
pursuant to (A)) has been met. After the
Wyeth Return Liability has been met,
any return liability shall be for the
account of Genzyme and Genzyme shall
reimburse Wyeth for the full amount of the
credit or refund made by Wyeth to the
customer for qualified returns of Wyeth
labeled Synvisc Product sold in the
United States by Wyeth prior to the Closing
Date.
(c)
REIMBURSEMENT. Wyeth shall provide Genzyme with an
invoice for amounts due under Sections 2.2
(a) and (b) not later than ten (10)
days after the end of each calendar quarter
with the documentation required to
verify the same. Genzyme agrees to
reimburse Wyeth in accordance with such
Sections within thirty (30) days after the
receipt of the invoice and all
required documentation. In the event of a
dispute over any amounts owed which
cannot be resolved between the Parties, the
Parties agree to select a reputable
independent national accounting firm
mutually acceptable to the Parties to
determine the actual amounts owed. Such
amounts owed shall be no greater than
the higher amount nor lower than the lower
amount asserted by the Parties. The
cost of such accounting firm shall be paid
by the Party asserting the amount
farthest from the actual amount to be paid
as determined by the accountant. The
accountant's determination shall be final
and binding upon the Parties.
2.3
RETURN OF CONFIDENTIAL INFORMATION AND COLLABORATION
INTELLECTUAL PROPERTY. Not later than sixty
(60) days following the Closing
Date, Wyeth, at its expense, shall return
and deliver to Genzyme: (a) all
Confidential Information of Genzyme (as
defined under the Synvisc Agreements and
disclosed thereunder); (b) all tangible
embodiments of Genzyme Collaboration IP;
and (c) any other Genzyme Confidential
Information in the possession or control
of Wyeth and its Affiliates, except (i) in
all cases, Genzyme Confidential
Information and Genzyme Collaboration IP to
be used by Wyeth in performance of
the Transition Services (but which shall be
returned within thirty (30) days
after completion of performance of the
Transition Services), and (ii) one
archival copy of the Genzyme Confidential
Information to be retained by legal
counsel to allow Wyeth to determine its
confidentiality obligations and enforce
its rights under
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
8
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this Agreement. If delivery of any of the
foregoing materials is not practicable
within such sixty (60) day period, the
Parties shall in good faith agree upon a
reasonable timetable for such delivery. The
foregoing delivery will be at
Wyeth's expense and in a manner to be
mutually agreed upon by the Parties.
2.4
FINANCIAL RECONCILIATION. Within thirty (30) days following the
end of the calendar quarter in which the
Closing Date occurs, Wyeth shall
provide to Genzyme the final accounting of
all amounts due and not yet paid
under the provisions of the Supply
Agreement and the U.S. License Agreement.
Simultaneously with the provision of such
accounting, if a balance is due
Genzyme, Wyeth shall pay to Genzyme all
such amounts that are due. If a balance
is due Wyeth, Wyeth shall promptly invoice
Genzyme, and Genzyme shall pay to
Wyeth all such amounts that are due within
thirty (30) days of receipt of
Wyeth's invoice.
2.5
CLOSING. The closing of the transactions contemplated herein
(the "CLOSING") will take place at the
offices of Wilmer Cutler Pickering Hale
and Dorr LLP, 60 State Street, Boston,
Massachusetts 02109, at a time and on a
date to be determined by mutual agreement,
which will be during the month of
January, 2005 or such later date that the
Parties determine that is not more
than forty five (45) days prior to the date
on which the Parties determine that
Wyeth's obligations under SCHEDULE 7.3 can
be satisfied. For purposes of this
Agreement, "CLOSING DATE" means the date on
which the Closing actually takes
place.
ARTICLE 3
PURCHASE AND SALE OF ASSETS
3.1
PURCHASE AND SALE OF ASSETS. Subject to the terms and
conditions
set forth herein, Wyeth shall cause to be
sold, assigned, transferred, and
conveyed to Genzyme, and Genzyme shall
purchase and acquire from Wyeth, at the
Closing, good and valid title and all other
rights and interests in and to the
Acquired Assets, free of any Encumbrances,
on the terms and subject to the
conditions set forth in this Agreement.
For purposes of this Agreement, the
"ACQUIRED ASSETS" shall mean and include:
(a)
COPYRIGHTS. All copyrights, copyright registrations and
copyright applications to the extent owned
by Wyeth and solely embodied in the
Acquired Assets (the "WYETH COPYRIGHTS").
Wyeth represents that there are no
copyright registrations or copyright
applications.
(b)
TRADEMARKS. All trademarks, design marks, service marks,
trade names, trade dress and product
packaging, whether registered or not, as
well as all registrations and applications
for the same that are owned by Wyeth
that relate to the Synvisc Products as set
forth on SCHEDULE 3.1(b), or any
substantially similar variations thereof,
and the goodwill of the business
symbolized thereby, excluding Wyeth House
Marks (collectively the "WYETH
TRADEMARKS"). "WYETH HOUSE MARKS" are any
trademarks or service marks, and
registrations and applications therefor,
utilized by Wyeth or planned to be
utilized by Wyeth, in whole or in part, in
connection with any product (other
than the Synvisc Products) or service of
Wyeth or
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
9
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any of its Affiliates or that contain the
name or any part of the name or logo
now or previously used by Wyeth or any of
its Affiliates, and the goodwill of
the business symbolized thereby.
(c)
CUSTOMER INFORMATION. The third party payor lists and
customer lists, billing records, and
reimbursement records related to the
Synvisc Product which are listed in
SCHEDULE 3.1(c).
(d)
DOMAIN NAMES. The domain names listed in SCHEDULE 3.1(d)
(the "DOMAIN NAMES").
(e)
CLINICAL DATA. The existing clinical data relating to
the Synvisc Product listed in SCHEDULE
3.1(e).
(f)
MARKETING AND SALES ASSETS. The Synvisc Product
marketing materials, corporate
communication materials and sales operations
materials listed in SCHEDULE 3.1(f).
(g)
ASSIGNED CONTRACTS. All rights and obligations on or
after the Closing Date under the agreements
with Third Parties listed in
SCHEDULE 3.1(g) hereof (the "ASSIGNED
CONTRACTS").
(h)
GENZYME COLLABORATION IP.
(i)
INVENTORY. All right, title and interest in all
inventory of Synvisc Product repurchased by
Genzyme pursuant to Section 5.6 of
this Agreement.
(j)
OTHER. Any additional assets related solely to Synvisc
Product as the Parties may reasonably
identify and agree upon during the
Pre-Closing Period.
3.2
EXCLUDED ASSETS. Notwithstanding anything in Section 3.1 to the
contrary, the Acquired Assets do not
include any assets, rights or interests of
Wyeth that are not specifically stated as
Acquired Assets including, but not
limited to, the following assets, rights or
interests of Wyeth (collectively,
the "EXCLUDED ASSETS"):
(a)
contracts or agreements with any Third Party other than
the Assigned Contracts;
(b)
real property and leasehold interests in real property;
(c)
employment agreements or employees, subject to the
provisions of Article 6;
(d)
any Patents, or Know-How controlled by Wyeth other than
the Genzyme Confidential Information and
the Information; and
(e)
accounts receivables for Wyeth labeled Synvisc Product
sold by Wyeth prior to the Closing
Date.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
10
<Page>
3.3
DELIVERY OF ACQUIRED ASSETS. (a) Wyeth will deliver to Genzyme
the Acquired Assets (together with any
tangible manifestations thereof) within
the following time periods. All costs
associated with delivery and preparation
of the Acquired Assets shall be solely at
Wyeth's expense and shall be delivered
in a manner mutually agreed by the
Parties.
<Table>
<Caption>
Acquired Assets
Delivery Date
-------------------------------------------------------------------------------------------------
<S>
<C>
Trademarks under Section 3.1(b)
Within thirty (30) days after the Closing Date
Customer Information under Section 3.1(c)
In accordance with SCHEDULE 3.1(c)
Domain Names under Section 3.1(d)
Within thirty (30) days after the Closing Date
Clinical Data under Section 3.1(e)
Within thirty (30) days after the Closing Date
Marketing and Sales Assets under Section
3.1(f) In
accordance with SCHEDULE 3.1(f)
Assigned Contracts under Section 3.1(g)
On the Closing Date
Genzyme Collaboration IP
On the Closing Date
Inventory under Section 3.1(i)
In accordance with Section 5.6 and Attachment 1
to SCHEDULE 8.1
</Table>
(b)
In the event that Wyeth discovers any Acquired Assets in its
possession within two (2) years following
the Closing Date, it shall promptly
notify Genzyme and deliver all such
Acquired Assets to Genzyme. For the purposes
of clarity, it is agreed by the Parties
that Wyeth shall have no duty to search
for Acquired Assets other than those set
forth hereinabove and included in the
referenced schedules after the
aforementioned delivery dates.
ARTICLE 4
TRADEMARK RIGHTS
4.1
PRODUCT TRADEMARKS. Wyeth agrees and acknowledges that from and
after the Closing Date, it has no right,
title or interest in and to use the
trademark "Synvisc", or any mark consisting
of the trademark "Synvisc" or the
Wyeth Trademarks, nor has it any right,
title or interest in and to the goodwill
of the business symbolized thereby and any
applications and registrations for
the same in the Territory. Wyeth shall not
adopt, use or register any other
domain name, trademark or service mark
confusingly similar to the trademark
"Synvisc" or the Wyeth Trademarks in the
Territory.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
11
<Page>
4.2
USE OF WYETH HOUSE MARKS. Other than with respect to existing
Synvisc Product inventory purchased by
Genzyme pursuant to Section 5.6, Genzyme
shall use commercially reasonable efforts
to as expeditiously as practicable
(but in no event longer than ninety (90)
days) revise product labeling and
literature, change packaging and
stationery, and otherwise discontinue use of
the Wyeth House Marks. In no event shall
Genzyme use any Wyeth House Marks after
the Closing Date in any manner or for any
purpose different from the use of such
Wyeth House Marks during the ninety (90)
day period preceding the Closing. After
the Closing Date, Genzyme may use the Wyeth
House Marks for a period of six (6)
months to sell Synvisc Products included in
existing Synvisc Product inventory
purchased by Genzyme pursuant to Section
5.6, and shall not be required to
sticker any such Synvisc Product inventory
unless its is not sold during such
six (6) month time period.
ARTICLE 5
NON-COMPETITION; NOTIFICATION; CERTAIN COVENANTS
5.1
WYETH COVENANT NOT TO COMPETE. [**]
5.2
SYNVISC ADVERSE MEDICAL EXPERIENCES OBLIGATIONS. Wyeth shall
remain responsible for all adverse event
follow up, appropriate due diligence,
and timely forwarding of adverse event
related information to Genzyme
Pharmacovigilance in accordance with the
Pharmacovigilance Procedures Addendum
effective October 29, 2003 for all adverse
experiences (including adverse events
associated with literature review) received
prior to the Closing Date.
Notwithstanding the foregoing, from and
after the Closing Date, Genzyme shall be
solely responsible for all device vigilance
activities, including but not
limited to: Synvisc Adverse Medical
Experiences reporting, including literature
review and associated reporting; Synvisc
Adverse Medical Experiences follow-up
reporting; preparation and submission of
all Synvisc Adverse Medical Experiences
reports to the regulatory authorities as
required by local laws and/or
regulations; maintaining the Synvisc
Adverse Medical Experiences database for
such Synvisc Product; all interactions with
health authorities regarding safety;
periodic submissions; labeling
modifications; safety monitoring and detection;
and safety measures (e.g., Dear Doctor
Letters, restriction on distribution,
etc.). After the Closing Date, to the
extent Wyeth receives any information
regarding Synvisc Adverse Medical
Experiences related to the use of the Synvisc
Product (regardless of where occurring),
Wyeth shall promptly provide Genzyme
with such information within three (3)
business days of receipt by Wyeth.
5.3
MEDICAL INFORMATION SERVICES. Wyeth shall remain responsible
for
responding to any and all medical inquiries
received before the Closing Date.
Wyeth shall satisfy these requirements
within thirty (30) days after the Closing
Date. From and after the Closing Date,
Genzyme shall be solely responsible for
all medical information support related to
all medical inquiries received from
and after the Closing Date, including but
not limited to: provision of standard
medical responses, custom creation of
medical responses, maintaining a medical
inquiry database which captures the nature
of the inquiry and the response
provided, literature review for relevant
Synvisc-related publications and
appropriate capture and forwarding of
post-marketing adverse events and product
complaints. In the event that Wyeth
receives any medical inquiry or request
related to Synvisc Product after the
Closing Date, Wyeth shall promptly refer
such inquiry to an individual designated by
Genzyme.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
12
<Page>
5.4
PRODUCT COMPLAINTS. Product quality complaints shall be handled
in accordance with the procedure set forth
in Attachment 2 to SCHEDULE 8.1.
5.5
RECALLS OF SYNVISC PRODUCT.
(a)
With respect to Synvisc Product sold by Wyeth prior to
the Closing Date, if Genzyme in good faith
determines that a recall of such
Synvisc Product in the United States is
warranted for medical or safety
purposes, Genzyme shall immediately notify
Wyeth in writing and shall advise
Wyeth of the reasons underlying its
determination that a recall is warranted.
Genzyme shall be responsible for any recall
of all Synvisc Products sold by
Wyeth prior to the Closing Date and Genzyme
shall at its cost replace any
recalled Synvisc Product. Wyeth shall
provide any information and assistance as
may be reasonably requested by Genzyme to
effectuate such recall. Genzyme shall
reimburse Wyeth for all direct costs and
expenses incurred by Wyeth as a result
of providing such information and
assistance. Wyeth shall reimburse Genzyme for
all direct costs and expenses (including
without limitation shipping, quality
control testing and notification costs)
incurred by Genzyme and its Affiliates
as a result of a recall if such recall is
the result of the failure of Wyeth to
comply with its obligations under the
Synvisc Agreements.
(b)
With respect to Synvisc Product sold by Genzyme on or
after the Closing Date, Genzyme shall be
responsible for all recalls of such
Synvisc Product, at Genzyme's expense.
5.6
INVENTORY REPURCHASE. On the Closing Date, Genzyme shall
repurchase from Wyeth all remaining
inventory of Synvisc Products held by Wyeth
at any location at a price equal to Wyeth's
acquisition cost for such inventory,
PROVIDED THAT (a) Genzyme shall not be
obligated to purchase in excess of three
months' supply of such inventory based upon
average monthly requirements for
sales to customers over the six (6) month
period immediately preceding the
Closing Date, and (b) Genzyme shall not be
obligated to purchase any inventory
with an expiration date less than eighteen
(18) months from the Closing Date.
5.7
PROMOTIONAL MATERIALS. The Parties agree that Wyeth will use
commercially reasonable efforts to delay
the printing of sales visual aids,
leave items, formulary binders, reprints,
direct mail, direct to consumer
advertising, Internet postings, and sales
reminder aids (collectively, the
"PROMOTIONAL MATERIALS") for the Synvisc
Product in the United States to permit
printing of Promotional Materials with
Genzyme's approved trademark usage. Wyeth
shall be financially responsible for all
costs related to Promotional Materials
produced with Genzyme's approved trademark
usage, unless the Closing does not
occur in which case Genzyme shall be
financially responsible for all such costs.
5.8
FORECASTS.
(a)
Not later than thirty (30) days after the Closing Date,
and on the first day of November of each
calendar year thereafter during the
Term, Genzyme shall provide to Wyeth a
non-binding good faith estimate of
Synvisc Net Sales by quarter in the
Territory for the twelve (12) month period
starting on the first day of the following
calendar year. Genzyme shall also
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
13
<Page>
provide to Wyeth a non-binding revised good
faith estimate of Synvisc Net Sales
by quarter in the Territory for the balance
of the then-current calendar year
not later than the first day of February,
May and August for each calendar year
during the Term.
(b)
Simultaneously with the delivery of each forecast on
each of February 1, May 1, August 1, and
November 1, Genzyme shall deliver to
Wyeth a report that provides data that
Genzyme collects in the normal course of
business regarding the inventory of the
amount of Synvisc Products held by each
of Genzyme, its Affiliates, licensees,
distributors and wholesalers.
(c)
Genzyme shall provide the forecasts and reports set
forth in (a) and (b) until the satisfaction
of Genzyme's obligation to make
payments to Wyeth under Article 7 of this
Agreement, and thereafter no further
forecasts or reports shall be required.
5.9
FURTHER ASSURANCES. Wyeth agrees to execute, acknowledge and
deliver such further instruments, and to do
all such other reasonable acts, as
may be necessary or appropriate in order to
carry out the purposes and intent of
this Agreement.
5.10
APPLICABLE LAWS. Wyeth shall comply (and cause its Affiliates
to
comply) in all material respects with all
applicable laws and regulations in
Wyeth's performance of the Transition
Services. Genzyme shall comply (and cause
its Affiliates and use commercially
reasonable efforts to require its licensees
to comply) in all material respects with
all applicable laws and regulations in
Genzyme's development, manufacturing and
commercialization of the Synvisc
Products and in the performance of
Genzyme's obligations under this Agreement.
ARTICLE 6
EMPLOYEES AND EMPLOYEE BENEFITS
6.1
EMPLOYEE PLANS. Wyeth hereby represents and warrants to Genzyme
that:
(a) SCHEDULE 6.1(a) sets forth a
list of each employee
benefit plan (including the retiree life
and medical benefit plan), as such term
is defined in Section 3(3) of ERISA, which
(i) is subject to any provision of
ERISA, (ii) is maintained by or contributed
to by Wyeth, and (iii) covers
Employees (hereinafter referred to
collectively as the "EMPLOYEE PLANS").
(b)
SCHEDULE 6.1(b) sets forth a list of (x) each
management, employment, consulting, or
other contract with any individual
providing for the retention of personal
services involving the payment of [**]
, and (y) each plan or arrangement
providing for vacation benefits,
supplemental nonqualified benefits,
severance benefits, bonuses, stock
options, stock appreciation or other forms
of incentive compensation,
compensation or benefits which (i) is not
an Employee Plan, (ii) is entered
into, maintained or contributed to, as the
case may be, by Wyeth, and (iii)
covers Employees, and dependents or
beneficiaries thereof. Such contracts,
plans and arrangements as are described
above, copies or descriptions of all
of which have been made available to
Genzyme, are hereinafter referred to
collectively as the "BENEFIT
ARRANGEMENTS."
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
14
<Page>
(c)
Except as set forth on SCHEDULE 6.1(c) neither Wyeth or
any of its ERISA Affiliates has incurred
any liability under Title IV of ERISA
arising in connection with the termination
of any Pension Plan which is subject
to Title IV of ERISA that could become,
after the Closing Date, the liability of
Genzyme or any of its ERISA Affiliates.
(d)
Except as disclosed on SCHEDULE 6.1(d), Wyeth (with
respect to the Employees) has not been
required, and does not have any
obligation, to contribute to a
multiemployer plan, as defined in Section 3(37)
of ERISA, or to a multiple employer plan
(defined as a plan to which two or more
employers contribute, at least two of whom
are not under common control within
the meaning of "common control" as used in
Section 4063(a) of ERISA) and do not
have or expect to have any withdrawal
liability assessed against them with
respect to any such multiemployer plan.
(e)
The Wyeth Savings Plan ("WYETH'S SAVINGS PLAN") is
intended to satisfy Section 401(a) and
401(k) of the Code and has received a
favorable determination letter from the
Internal Revenue Service, which letter
is currently in effect with respect to
Wyeth's Savings Plan and all amendments
thereto through the Closing Date. To the
knowledge of Wyeth, nothing has
occurred since the issuance of such letter
which could reasonably affect its
qualification.
6.2
GENZYME'S OBLIGATIONS TO EMPLOYEES.
(a)
On the Closing Date, the Parties will execute an
"Employee Leasing Agreement" substantially
in the form of SCHEDULE 6.2(a).
Subject to Sections 6.2(c), (d) and (e),
Genzyme agrees to offer or to cause an
Affiliate of Genzyme to offer to hire each
Employee on the Closing Date, in a
comparable position, at the same or greater
base pay than that enjoyed by such
Employee immediately prior to the Closing
Date. With respect to each Employee
who is not actively at work on the Closing
Date due to short-term disability or
other authorized leave of absence, such
offer shall be contingent upon the
Employee offering to return to active
employment following the end of such
short-term disability or authorized leave
of absence and within the [**] period
following the Closing Date as more fully
set forth in Sections 6.2(c) and (d).
All offers to hire are subject to the
Employees' completion and submission to
Genzyme of (i) Genzyme's agreement related
to confidentiality, nonsolicitation,
noncompetition and intellectual property
(which will be substantially in the
form attached hereto as SCHEDULE
6.2(a)(i)), (ii) Genzyme's employment
application (which will be substantially in
the form attached hereto as SCHEDULE
6.2(a)(ii)), and (iii) Form I-9. Genzyme
represents and warrants to Wyeth that
all employees of Genzyme must sign the
foregoing documents as a pre-condition to
employment at Genzyme. Subject to Sections
6.2(c), (d) and (e), the employment
of such Employees shall be considered
effective and their employment by Wyeth
shall terminate and transfer to Genzyme on
the Closing Date. Employees who
accept employment with Genzyme effective as
of the Closing Date, or upon
employment pursuant to Sections 6.2(c), (d)
and (e), shall hereafter be referred
to as the "TRANSFERRED EMPLOYEES."
(b)
Genzyme shall make the following payments or provide the
following notification to Transferred
Employees whom it terminates after the
Closing Date:
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
15
<Page>
(i)
After the Closing Date, Genzyme will have sole
responsibility for any obligations or
liabilities to Transferred Employees under
the Worker Adjustment and Retraining
Notification Act or similar applicable laws
of any jurisdiction relating to any plant
closing or mass layoff or as otherwise
required by any such applicable law. For
the avoidance of doubt, Genzyme shall
have no obligation or liability under the
Worker Adjustment and Retraining
Notification Act or similar applicable laws
of any jurisdiction relating to any
plant closing or mass layoff or as
otherwise required by any such applicable law
for any Employee terminated by Wyeth;
and
(ii)
Genzyme shall provide severance payments
("SEVERANCE") to each Transferred Employee
whose employment is terminated by
Genzyme because of a termination without
Cause (as defined herein) or reduction
in the workforce or job elimination at any
time within the [**] following the
Closing Date.
Except as set forth below, Severance shall be
paid to such Transferred Employee in the form of bi-weekly
salary continuation payments and will be calculated:
(A) for any such Transferred Employee employed
by Genzyme in the position of Clinical Account Executive/MSM,
except those certain Transferred Employees set forth in
SCHEDULE
6.2(b)(ii)(A), on the basis of [**], or
(B) for any such Transferred Employee in the
position of Regional Sales Director/District Manager, except
for
those certain Transferred Employees set forth in SCHEDULE
6.2(b)(ii)(B), and including those certain Transferred
Employees
set forth in SCHEDULE 6.2(b)(ii)(A), on the basis of [**], or
(C) for any such Transferred Employee in the
position of Regional Sales Director/District Manager set forth
in SCHEDULE 6.2(b)(ii)(B), on the basis of [**];
provided that, in each case, in no event will the Severance
exceed [**] of Base Pay. Any Transferred Employee who does not
have a job title set forth above shall receive such Severance
as
shall be determined in good faith by the Parties.
For purposes of this Section 6.2, "BASE PAY"
shall mean the base salary of the Transferred Employee on the
date of termination of employment or the Closing Date,
whichever
is greater. No such Severance payments shall be made if a
Transferred Employee is terminated for Cause. For purposes of
this Section 6.2, "CAUSE" shall mean [**].
Genzyme may terminate any Transferred Employee
who at the Signing Date or Closing Date (a) is on a Wyeth
performance corrective action plan or (b) was given a Wyeth
performance rating of [**] at his or her most current
performance evaluation ("PLAN EMPLOYEE"), for Failure to Meet
Job Expectations, as defined in the Genzyme HR Policies and as
such Genzyme HR Policies are generally applied to all Genzyme
employees. [**]
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
16
<Page>
Genzyme shall also provide Severance payments if
a Transferred Employee resigns from employment with Genzyme
within [**] after the Closing Date because (a) there is a
reduction in the aggregate cash compensation, including
eligible targeted bonus, for which he or she is eligible
(other than for Cause), (b) a condition of his or her
continued employment is assignment to a new sales territory
reasonably requiring relocation to a new principal work
place/home office, (c) a material reduction in employee
benefits
offered to him/her compared to similarly situated Genzyme
employees, or (d) a material reduction in the nature and extent
of his/her job responsibilities after taking into account
possible new titles and reporting structures at Genzyme.
(iii) During the
period during which bi-weekly
severance payments are being made pursuant
to subsection (ii) above ("SALARY
CONTINUATION PERIOD"), Genzyme shall
provide continued coverage under Genzyme's
medical, dental, and prescription drug
plans at the same coverage and
contribution level as when the Transferred
Employee was employed with Genzyme.
The Transferred Employees' rights under the
COBRA statute shall attach at the
completion of the Salary Continuation
Period. In addition, Genzyme shall provide
outplacement services to terminated
Transferred Employees that are substantially
equivalent to those offered by Genzyme to
similarly situated employees upon
termination.
(c)
Any Employee who is, as of the Closing Date, disabled
within the meaning of the applicable
short-term disability plan or policy or the
applicable long-term disability plan of
Wyeth or its Affiliates ("DISABLED
EMPLOYEE") shall not be offered employment
by Genzyme effective on the Closing
Date. Wyeth shall continue to pay the
applicable disability benefits to such
Disabled Employee and provide such other
benefits as are provided to
similarly-situated disabled employees of
Wyeth or its Affiliates. If within a
period of [**] after the Closing Date (the
"HIRING TRANSITION PERIOD") a
Disabled Employee provides written notice
to Wyeth that such Disabled Employee
is no longer disabled within the meaning of
both the applicable short-term
disability plan or policy and the long-term
disability plan of Wyeth or its
Affiliates, (i) Wyeth shall notify Genzyme
as soon practicable, and (ii) Genzyme
shall offer employment to such Disabled
Employee in accordance with the
provisions of this Section 6.2 that apply
to Transferred Employees (other than
Disabled Employees or Workers' Compensation
Employees (as defined below)) as
soon as practicable following such
notification and if during the Hiring
Transition Period any such Disabled
Employee accepts employment with Genzyme he
or she shall be a Transferred Employee for
all purposes; provided, that, if
during the Hiring Transition Period such
disability coverage ceases due to
death, retirement or other termination of
employment by the Disabled Employee,
Genzyme shall have no obligation to offer
employment to such Disabled Employee.
(d)
Any Employee who has, as of the Closing Date, incurred
an injury or illness which entitles such
Employee to workers' compensation or a
similar workers' protection claim
("WORKERS' COMPENSATION EMPLOYEE") shall not
be offered employment by Genzyme on the
Closing Date. Wyeth shall be obligated
to provide and liable for any workers'
compensation or similar workers'
protection claim to such Workers'
Compensation Employee. If within the Hiring
Transition Period a Workers' Compensation
Employee ceases to be entitled to
workers' compensation or similar workers'
protection benefits, (i) Wyeth shall
notify Genzyme as soon as
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
17
<Page>
practicable, and (ii) Genzyme shall offer
employment to such Workers'
Compensation Employee in accordance with
the provisions of this Section 6.2 that
apply to Employees (other than Disabled
Employees or Workers' Compensation
Employees) as soon as practicable following
such notification and if during the
Hiring Transition Period any such Workers'
Compensation Employee accepts
employment with Genzyme he or she shall be
a Transferred Employee for all
purposes; provided, that, if during the
Hiring Transition Period such workers'
compensation or similar workers' protection
entitlement ceases due to death,
retirement or other termination of
employment by the Workers' Compensation
Employee, Genzyme shall have no obligation
to offer employment to such Workers'
Compensation Employee.
(e)
Any
Employee who is, as of the Closing Date, performing
services pursuant to the terms of the
Employee Leasing Agreement (the "Leased
Employees") shall not be offered employment
by Genzyme on the Closing Date. Such
Leased Employees shall be offered
employment by Genzyme at the end of the
"Transition Period" (as defined in the
Employee Leasing Agreement) with respect
to each such Leased Employee, and if the
Leased Employee accepts employment with
Genzyme, he or she shall be a Transferred
Employee for all purposes.
6.3
TREATMENT OF WYETH'S AND GENZYME'S EMPLOYEE PLANS AND BENEFIT
ARRANGEMENTS.
(a)
(i)
No assets of any defined benefit Pension Plan,
Employee Plan (except as may be otherwise
provided in this Article 6) or Benefit
Arrangement shall be transferred to Genzyme
or any of its Affiliates or to any
plan of Genzyme or any of its Affiliates
and, except as set forth in this
Article 6, Genzyme and its Affiliates shall
assume no liability or obligation of
Wyeth or any of their Affiliates under any
of the Employee Plans, the Benefit
Arrangements or the Pension Plans except as
set forth in this Article 6.
(ii) After
the Closing Date Genzyme shall offer
Transferred Employees the Employee Benefit
Plans and Employee Benefit
Arrangements which are the same Employee
Benefit Plans and Employee Benefit
Arrangements as those provided to similarly
situated employees of Genzyme.
(iii) Except for
the liabilities as set forth on
SCHEDULE 6.3(a)(iii), Genzyme shall assume
no liability for the Transferred
Employees' compensation and bonus relating
to events which occurred on or prior
to the Closing Date or to actions taken by
Wyeth or one of Wyeth's Affiliates,
or to consequences which are deemed to have
occurred by operation of law as a
result of the transactions contemplated
herein.
(iv)
Genzyme agrees to grant to Transferred Employees
prior service credit for purposes of sick
leave, entitlements, and other
policies or arrangements which count
service for eligibility or entitlement to
benefits.
(v)
Genzyme shall assume the vacation liability for
each Transferred Employee in accordance
with Wyeth's vacation policy solely with
respect to vacation allocated on January 1,
2005. Immediately after the Closing
Date, Wyeth shall provide Genzyme with
a
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
18
<Page>
schedule reflecting the 2005 vacation
allotment for each Transferred Employee
less any vacation days taken through the
Closing Date ("EARNED WYETH VACATION").
In the event a Transferred Employee
terminates employment during 2005 prior to
utilizing all of their Earned Wyeth
Vacation, Genzyme shall provide pay for the
Earned Wyeth Vacation as well as any
additional vacation time accrued under
Genzyme's 2005 vacation policy. To the
extent that the payment to the
Transferred Employee for the unused
vacation time attributable to the Earned
Wyeth Vacation and determined in accordance
with the terms of the Wyeth 2005
vacation policy with respect to cash-out of
unused vacation exceeds the payment
for unused vacation time that Genzyme would
have paid to the Transferred
Employee under Genzyme's 2005 vacation
policy, Wyeth shall reimburse Genzyme for
the excess cash-out of unused vacation.
Genzyme shall provide Wyeth with a copy
of its 2005 vacation policy prior to the
Closing Date. For calendar year 2005,
Genzyme agrees to provide any Transferred
Employee with 20 or more years of
service credit to Wyeth with a vacation
benefit of 5 weeks (including Earned
Wyeth Vacation, if any). Effective January
1, 2006, Genzyme shall accrue
vacation for all Transferred Employees
under Genzyme's vacation policy giving
such Transferred Employees past service
credit for their employment with Wyeth.
(b)
Wyeth shall amend the Wyeth Retirement Plan - United
States ("WYETH'S PENSION PLAN") and Wyeth
non-qualified supplemental retirement
plans ("WYETH'S SUPPLEMENTAL PLANS") to
provide that all service completed by
the Transferred Employees for Genzyme or
its Affiliates after the Closing Date
shall be recognized for purposes of vesting
and satisfying any requirements for
early retirement subsidies for benefits
accrued as of the Closing Date under
Wyeth's Pension Plan and Supplemental
Plans, but Wyeth shall not be required to
take such service into account for benefit
accrual purposes under Wyeth's
Pension Plan and Supplemental Plans.
However, Transferred Employees shall not
commence receipt of retirement benefits
under the Wyeth Pension Plan until he or
she terminates employment with Genzyme or
its Affiliates.
(c)
Wyeth shall amend the Wyeth's Savings Plan and Wyeth's
supplemental employee savings plan
("WYETH'S SESP") to provide that all
Transferred Employees are fully vested in
their account balances under Wyeth's
Savings Plans and Wyeth's SESP as of the
Closing Date. Genzyme maintains
qualified savings plan(s) for the benefit
of its employees ("GENZYME'S SAVINGS
PLAN(s)"). Genzyme shall recognize
Transferred Employees' service with Wyeth or
their Affiliates for purposes of
determining eligibility to participate and
vesting of benefits in Genzyme's Savings
Plan(s). Wyeth shall allow for
distribution from the Wyeth Savings Plan to
the Transferred Employees as soon as
practicable after the Closing Date and
Genzyme shall accept rollovers (including
loans outstanding under the Wyeth Savings
Plan that are fully compliant with all
applicable legal requirements but excluding
after-tax contributions) by
Transferred Employees of such distributions
to Genzyme's Savings Plan(s) which
meet the requirements of Section 401(a) of
the Code to the extent that any
Transferred Employee opts to roll over such
distributions.
(d)
With respect to the Transferred Employees, Wyeth shall
retain liability under any group life,
accident, worker's compensation, medical,
hospitalization, prescription drug, dental,
spending account or short-term or
long-term disability plan ("WYETH'S
WELFARE
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
19
<Page>
PLANS"), whether or not insured, for any
claims incurred on or prior to the
Closing Date, and Genzyme shall assume all
liability for any claims arising
after the Closing Date under its group
life, accident, worker's compensation,
medical, hospitalization, prescription
drug, dental, spending account or
short-term or long-term disability plans
("GENZYME'S WELFARE PLANS"). For
purposes of this Section 6.3(d), claims
shall be deemed to have arisen:
(i)
With respect to all death or dismemberment
claims, on the actual date of death or
dismemberment;
(ii) With
respect to disability or salary continuance
claims, on the day the claimant became
disabled or otherwise entitled to salary
continuation;
(iii) With
respect to all hospital, medical, drug or
dental claims on the date the service or
supply was purchased or received by the
claimant; and
(iv) With
respect to worker's compensation claims
that are single-accident specific, on the
date of the occurrence, and with
respect to all other worker's compensation
claims, on the date the claim is
made.
(e)
After the Closing Date, all Transferred Employees shall
be eligible to participate in Genzyme's
Welfare Plans in accordance with the
terms of such plans, and employment with
Wyeth or their Affiliates will be taken
into account for purposes of determining
eligibility to participate and benefits
under Genzyme's Welfare Plans; PROVIDED,
HOWEVER, that
(i)
Transferred Employees shall participate under
Genzyme's Welfare Plans as of the day after
the Closing Date without any waiting
periods, without evidence of insurability
for such Genzyme's Welfare Plans that
are prohibited from discriminating on the
basis of insurability under the Health
Insurance Portability and Accountability
Act of 1996 as amended, and without
application of any pre-existing physical or
mental condition limitations except
to the extent applicable under similar
plans maintained by Wyeth; and
(ii)
Genzyme shall count claims arising during the
calendar year on or prior to the Closing
Date for purposes of satisfying
deductibles, out-of-pocket maximums, and
all other similar limitations under
Genzyme's Welfare Plans.
(f)
Wyeth maintains a program of medical and life insurance
benefits for certain retired employees
("WYETH'S RETIREE'S WELFARE PLANS"). All
Transferred Employees who satisfy the
eligibility criteria for benefits under
the Wyeth's Retiree Welfare Plans on or
prior to the Closing Date shall receive
such benefits from the Wyeth's Retiree
Welfare Plans following their termination
from Genzyme or its Affiliates or any
successor thereto in accordance with the
terms of the Wyeth's Retiree Welfare Plans
as in effect on the date of
termination of the Transferred Employee
from Genzyme or its Affiliates or
successor thereto. However, Transferred
Employees who are eligible for medical
coverage under Genzyme's medical plan shall
receive coverage under Genzyme's
medical plan while employed by Genzyme.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
20
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(g)
Genzyme shall be responsible for any legally mandated
continuation of health care coverage
("MANDATED HEALTH CARE COVERAGE") for all
Transferred Employees and/or their covered
dependents who have a loss of health
care coverage due to a qualifying event (as
defined in Section 4980B of the
Code) (each, a "RECIPIENT") that occurs
after the Closing Date and Wyeth shall
remain responsible for any Mandated Health
Care Coverage for all Recipients who
have a loss of health care coverage due to
a qualifying event (as defined in
Section 4980B of the Code) that occurs
prior to the Closing Date.
(h)
Wyeth maintains a dependent care spending account plan
and a medical spending account plan for the
benefit of their employees ("WYETH'S
SPENDING ACCOUNT PLANS"). Transferred
Employees who are participants in Wyeth's
Spending Account Plans shall be permitted
to submit claims for expenses incurred
during the plan year on or prior to the
Closing Date for a period of sixty (60)
days after the Closing. Wyeth shall treat
the Transferred Employees for purposes
of Wyeth's Spending Account Plans the same
as Wyeth treats any employee whose
employment is terminated by Wyeth. The
Transferred Employees will be free to
enroll in the medical spending account plan
of Genzyme ("GENZYME'S MEDICAL
SPENDING ACCOUNT PLAN"). Genzyme shall be
responsible for all liabilities for
Transferred Employees under Genzyme's
Medical Spending Account Plans following
the Closing Date.
6.4
STOCK OPTIONS. Wyeth shall be responsible for and incur the
costs of stock option compensation for all
Transferred Employees with stock
options from Wyeth. This includes payments,
if any, to Transferred Employees
relating to non-exercisable stock options
as of the Closing Date. Wyeth shall be
liable for any payments, withholding
obligations and reporting obligations that
arise after the Closing Date under this
Section 6.4 under any applicable stock
option or stock incentive plan of Wyeth in
accordance with its terms.
6.5
NO HIRING OF TRANSFERRED EMPLOYEES. For a period of [**] after
the Closing Date, neither Wyeth nor its
Affiliates shall hire as an employee (or
retain as a consultant or contractor) any
Transferred Employee; provided,
however, that Wyeth and its Affiliates may
hire any Transferred Employee whose
employment has been terminated by
Genzyme.
6.6
NO THIRD PARTY BENEFICIARIES. No provision of this Agreement
shall create any third party beneficiary or
other rights in any Employee
(including any beneficiary or dependent
thereof) or any persons in respect of
continued employment with Wyeth, or with
any of their Affiliates, and no
provision of this Agreement shall create
any such rights in any such persons in
respect of any benefits that may be
provided, directly or indirectly, under any
Benefit Plan or Benefit Arrangement, or any
plan or arrangement which may be
maintained or established by Wyeth or any
of their Affiliates. No provision of
this Agreement shall constitute a
limitation on the right of Genzyme or any
Affiliates of Genzyme to terminate any
Employee at will.
ARTICLE 7
PAYMENTS
7.1
UP-FRONT PAYMENT. In addition to the repurchase of inventory of
Synvisc Product pursuant to Section 5.6 and
the other payments hereunder,
Genzyme shall pay to Wyeth a
non-refundable, one-time payment in the amount of
ninety-five million dollars
($95,000,000)
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
21
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on the Closing Date as partial
consideration for the termination of the Synvisc
Agreements, the transfer of the Acquired
Assets and the other rights and
licenses granted to Genzyme hereunder.
7.2
MILESTONE PAYMENT RELATING TO PRODUCT NET SALES. In addition to
the other payments hereunder, within thirty
(30) days following the achievement
by Genzyme (taking into account all Synvisc
Net Sales) of the following
milestone during the Term and in the
Territory, Genzyme shall pay to Wyeth the
non-refundable, one-time payment below:
<Table>
<Caption>
MILESTONE EVENT
AMOUNT
<S>
<C>
Achievement of Synvisc Net Sales during any
$ 60,000,000
twelve (12) month period of at least
$200,000,000
</Table>
For the avoidance of doubt, the milestone payment under this
Section 7.2
shall be payable only once during the Term,
irrespective of the number of
additional periods during which the
milestone event may be achieved.
7.3
POST-CLOSING PAYMENT. Upon performance of the "Wyeth's
Deliverables" in accordance with SCHEDULE
7.3, Genzyme shall pay to Wyeth a
one-time, non-refundable payment of twenty
million dollars ($20,000,000).
7.4
CONTINGENT PAYMENTS.
(a)
PAYMENT RATE. With respect to Cumulative Net Sales:
(i)
thirty percent (30%) of Cumulative Net Sales for
that portion of Cumulative Net Sales that
is less than or equal to $438,000,000;
(ii)
fifteen percent (15%) of Cumulative Net Sales
for that portion of the total amount of
Cumulative Net Sales that is greater
than $438,000,000 but less than or equal to
$1,100,000,000; and
(iii) no
payments shall be owed with respect to
Cumulative Net Sales that are greater than
$1,100,000,000.
(b)
CONTINGENT PAYMENT REPORTS AND PAYMENTS. Within fifteen
(15) days after the last day of each
calendar month during the Term, Genzyme
shall deliver to Wyeth a true and accurate
report of Synvisc Net Sales by
Genzyme, its Affiliates and licensees
during the preceding calendar month period
(any such period, a "PAYMENT PERIOD"), with
all contingent payments, if any, due
under Section 7.4(a) for the period covered
by such report being due within
thirty (30) days of the end of the
applicable calendar month. Such report shall
also include (i) a statement of Cumulative
Net Sales as of the end of the
Payment Period and (ii) the information
necessary for Wyeth to verify "Synvisc
Net Sales" during the applicable period on
a country-by-country (or such other
territory as is reported by a Genzyme
licensee) and Synvisc Product-by- Synvisc
Product basis. Genzyme shall continue to
provide such reports for a period
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
22
<Page>
of six (6) months following the
satisfaction of Genzyme's obligation to make
payments to Wyeth under this Agreement, and
thereafter no further reports shall
be required.
7.5
PAYMENT METHOD. All payments due to Wyeth under this Agreement
shall be made by Genzyme in the United
States in U.S. Dollars by wire transfer
to a bank account designated by Wyeth.
7.6 EXCHANGE RATE. For any
given Payment Period, if any portion of
Synvisc Net Sales would be otherwise
determined in currency other than U.S.
Dollars then, for the purposes of
calculating contingent payments due under
Section 7.4(a), that portion of Synvisc Net
Sales attributable to each type of
such currency will be converted to U.S.
Dollars in the following manner:
(a)
Synvisc Net Sales will be determined in its original
currency for each of the three (3) months
during the Payment Period; then
(b)
the Synvisc Net Sales values for each month as
calculated under Section 7.6(a) will be
separately converted into U.S. Dollars
based on the average rate of exchange for
that month (based on the rates
published in the WALL STREET JOURNAL during
such month); and then
(c)
the portion of Synvisc Net Sales attributable to that
currency for that Payment Period will be
the sum of the three (3) monthly values
calculated under Section 7.6(b).
7.7
WITHHOLDINGS. All taxes, assessments and fees of any nature
levied or incurred on account of any
payments accruing under this Agreement, by
national, state or local governments, will
be assumed and paid by Genzyme,
except taxes levied thereon as income taxes
to Wyeth, and if such taxes are
required to be withheld by Genzyme by the
applicable national, state or local
governmental entity, then Genzyme shall
deduct such taxes from such payments due
to Wyeth and shall pay such taxes on the
account of Wyeth, and shall secure and
provide to Wyeth a receipt of such payment,
together with copies of all
pertinent communications from or with such
governmental entities with respect
thereto. Genzyme agrees to reasonably
cooperate with Wyeth in any effort by
Wyeth in claiming any exemption from such
deductions or withholdings under any
double taxation or similar agreement or
treaty from time to time in force and in
minimizing the amount required to be so
withheld or deducted, such cooperation
to consist of providing receipts of payment
of such withheld tax or other
documents reasonably available to
Genzyme.
7.8
RECORDS; AUDIT.
(a)
GENZYME RECORDS. Genzyme will maintain, and cause its
Affiliates, and licensees to maintain,
complete and accurate records regarding
its activities relating to this Agreement
(including, without limitation, the
means of calculating the amounts which are
relevant to the calculation of
Synvisc Net Sales under this Agreement),
and such records shall be retained and
open during reasonable business hours for a
period of three (3) years from the
creation of individual records for
examination or for a longer period of time,
if required by applicable law, and not more
often than once each calendar year,
by an independent certified
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
23
<Page>
public accountant that is selected by Wyeth
and reasonably acceptable to Genzyme
for the sole purpose of verifying the
correctness of calculations and
classifications of payments made by
Genzyme, its Affiliates or licensees, under
this Agreement and that is subject to a
binding confidentiality and non-use
agreement no less restrictive than the
terms of Article 14. The auditing expense
shall be paid by Wyeth; PROVIDED, HOWEVER,
that if the audit reveals an
underpayment by Genzyme of amounts due
under this Agreement in excess of five
percent (5%), Genzyme shall bear and
promptly reimburse Wyeth for the auditing
expense. In any case, Genzyme shall make
any payments necessary to Wyeth to
correct any underpayment by Genzyme. Any
records or accounting information
received from Genzyme, its Affiliates, or
licensees shall be Confidential
Information for purposes of Article 14.
Results of any such audit shall be
provided to both Parties, subject to
Article 14.
(b)
AUDIT. If there is a dispute between the Parties solely
with respect to the results of the audit
performed pursuant to Section 7.8(a),
Wyeth may refer the issue (an "AUDIT
DISAGREEMENT") to an independent certified
public accountant (selected in accordance
with Section 7.8(b)(ii)) for
resolution. In the event Wyeth refers an
Audit Disagreement for resolution, the
Parties shall comply with the following
procedures:
(i)
Wyeth shall provide written notice to Genzyme
that it is invoking the procedures of this
Section 7.8(b).
(ii)
Within thirty (30) business days of the giving
of such notice, the Parties shall jointly
select a recognized international
accounting firm to act as an independent
expert to resolve such Audit
Disagreement.
(iii)
The Audit
Disagreement submitted for resolution
shall be described by the Parties to the
independent expert in writing within
ten (10) business days of the selection of
such independent expert.
(iv) The
independent expert shall render a decision
on the matter (including a determination
with respect to the allocation of costs
as described in Section 7.8(c)) as soon as
practicable.
(v)
The decision of the independent expert shall be
final and binding, unless such Audit
Disagreement involves alleged fraud, breach
of this Agreement or construction or
interpretation of any of the terms and
conditions hereof.
(c)
COSTS. The cost of the independent expert shall be borne
equally by the two parties and the parties
shall otherwise bear their own costs
associated with participating in the
procedure called for in Section 7.8(b).
7.9
LATE PAYMENTS. Genzyme shall pay interest to Wyeth on the
aggregate amount of any payments that are
not paid on or before the date such
payments are due under this Agreement at a
rate per annum equal to the lesser of
the prime interest rate as reported by
Chase Manhattan Bank NA plus three
percent (3%), for the applicable period, or
the highest rate
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
24
<Page>
permitted by applicable law, calculated
from such payment was due to the date
such payment is made.
ARTICLE 8
SERVICES
8.1
TRANSITION SERVICES. Wyeth shall provide and deliver, and as
necessary shall cause its Affiliates or
relevant Third Parties to provide and
deliver, the transition services and items
specified on SCHEDULE 8.1
(collectively, the "TRANSITION SERVICES")
in each case by the respective dates
described on such schedule and in
accordance with the terms and conditions of
this Agreement.
8.2
SERVICES. It is understood that the performance of the
Transition Services may be subject to
disruption that may be a consequence of
the announcement of this Agreement, but
such disruption does not release Wyeth
from its obligations to perform such
Services in accordance with the terms of
this Agreement.
8.3
TRANSITION COORDINATION. As of the Closing Date and for the
duration of the Transition Services, each
Party shall designate one or more
employees to coordinate the management of
the Transition Services. At least once
every two weeks, these coordinators (or
their respective designees) shall meet
either in-person or by telephone to assess
the progress towards completion of
the Transition Services and each will use
his or her reasonable efforts to
facilitate completion of the Transition
Services, including the review of the
costs and expenses incurred in connection
with the performance of the Transition
Services.
8.4
STANDARDS OF PERFORMANCE. Wyeth shall provide (and cause its
Affiliates to provide) the Transition
Services with at least the same level of
skill, quality, care, timeliness, and cost
effectiveness as such services,
functions, equipment and tasks existed or
were performed prior to the Signing
Date, if applicable, but in no event with a
standard less that commercial
reasonableness; and for such services not
performed prior to the Signing Date
they shall be performed to a standard of no
less than commercial reasonableness.
Genzyme will make its facilities,
equipment, materials and employees available
to Wyeth as necessary and reasonably
requested by Wyeth for the provision of the
Transition Services.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF WYETH
Wyeth represents and warrants as of the Signing Date as
follows:
9.1
DUE ORGANIZATION. Wyeth is a corporation duly organized under
the laws of the State of Delaware and has
all necessary power and authority to
conduct its business in the manner in which
it is currently being conducted.
9.2
THIRD PARTY AGREEMENTS. Neither Wyeth nor any of its Affiliates
has entered into any agreement with any
Third Party pursuant to which such Third
Party has granted a
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
25
<Page>
license, or covenant not to sue or to
assert, under such Third Party's Patents,
which Patents relate to the research,
development, manufacture, use, sale, offer
for sale of any Synvisc Products.
9.3
INTELLECTUAL PROPERTY. Wyeth has not granted any sublicense in
or to or otherwise Encumbered any of the
Genzyme Collaboration IP.
9.4
PROCEEDINGS; ORDERS.
(a)
There is no pending proceeding, and to the knowledge of
Wyeth, no Third Party has threatened by
written communication to commence any
proceeding: (i) that involves Wyeth and
that specifically relates to the
Acquired Assets or Wyeth's performance
under the Synvisc Agreements; or (ii)
that challenges, or that may have the
effect of preventing, delaying, making
illegal or otherwise interfering with, the
execution of this Agreement and the
Closing. To the knowledge of Wyeth, no
event has occurred, and no claim, dispute
or other condition or circumstance exists,
that might give rise to or serve as a
basis for the commencement of any such
proceeding;
(b)
To the knowledge of Wyeth, there are no pending
proceedings that involve Wyeth and that
specifically relate to the Synvisc
Products other than the product liability
proceedings set forth in SCHEDULE
9.4(b); and
(c)
To the knowledge of Wyeth, there is no judicial or
administrative order relating to any
Synvisc Products to which Wyeth is subject.
9.5
AUTHORITY; BINDING NATURE OF AGREEMENTS. Wyeth has the power
and
authority to enter into and to perform its
obligations under this Agreement. The
execution, delivery and performance by
Wyeth of this Agreement have been duly
authorized by all necessary corporate
action on the part of Wyeth. This
Agreement constitutes the legal, valid and
binding obligation of Wyeth,
enforceable against Wyeth in accordance
with its terms, subject to (i) laws of
general application relating to bankruptcy,
insolvency and the relief of debtors
and (ii) rules of law governing specific
performance, injunctive relief and
other equitable remedies.
9.6
NON-CONTRAVENTION; CONSENTS.
(a)
The consummation or performance of any of the
obligations under this Agreement by Wyeth
will not (with or without notice or
lapse of time):
(i)
contravene, conflict with or result in a
violation of (A) any of the provisions of
Wyeth's Certificate of Incorporation
or bylaws, or (B) any resolution adopted by
Wyeth's Board of Directors (or any
committee thereof) or stockholders;
(ii) to
the knowledge of Wyeth, contravene, conflict
with or result in a violation of, any legal
requirement or any judicial or
administrative order to which Wyeth, or any
of the assets owned or used by
Wyeth, is subject; or
(iii) result in
the imposition or creation of any
Encumbrance upon or with respect to the
Acquired Assets.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
26
<Page>
(b)
Other than filings under the HSR Act, Wyeth was not, is
not and will not be required to make any
filing with or give any notice to, or
to obtain any consent from, any person
prior to the consummation or performance
of this Agreement.
9.7
BROKERS. Wyeth has not agreed or become obligated to pay, or
has
taken any action that might result in any
Third Party claiming to be entitled to
receive, any brokerage commission, finder's
fee or similar commission or fee in
connection with this Agreement.
9.8
ADDITIONAL REPRESENTATIONS.
(a)
Wyeth and its Affiliates have no assets (including
without limitation any intellectual
property rights, information or materials)
related solely to the Synvisc Products
other than the Acquired Assets;
(b)
To the knowledge of Wyeth, all schedules attached to
this Agreement are complete and accurate in
all material respects;
(c)
the Acquired Assets are acquired by Genzyme free of any
Encumbrances; and
(d)
the inventory of Synvisc Product to be repurchased by
Genzyme pursuant to Section 5.6 has not
been adulterated or misbranded by Wyeth
and has been stored in accordance with
Synvisc Product labeling.
9.9
DISCLAIMER. WYETH MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED (INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF INFRINGEMENT,
TITLE, MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE) EXCEPT AS EXPRESSLY
SET FORTH IN THIS ARTICLE 9. WITHOUT
LIMITATION OF THE FOREGOING, AND EXCEPT AS
EXPRESSLY SET FORTH IN THIS ARTICLE
9, NOTHING CONTAINED IN THIS AGREEMENT
SHALL BE CONSTRUED AS EXTENDING ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO
THE ACQUIRED ASSETS, THE TRANSFERRED
INTELLECTUAL PROPERTY OR THE TRANSITION
SERVICES.
9.10
SURVIVAL. The representations and warranties set forth in this
Article 9 shall expire eighteen (18) months
after the Closing Date, with the
exception of the representation and
warranty set forth in Section 9.7 which
shall be perpetual. Any claims made with
respect to such representations and
warranties (including, without limitation,
any claim made under Section 13.1)
must be brought prior to the applicable
expiration date (if any) for such
representation and warranty; PROVIDED,
HOWEVER, that such expiration date shall
not affect the continued adjudication of
such claim brought prior to such
applicable expiration date.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES OF GENZYME
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
27
<Page>
Genzyme represents and warrants as of the Signing Date as
follows:
10.1
DUE
ORGANIZATION. Genzyme is a corporation duly organized under
the laws of the State of Massachusetts, and
has all necessary power and
authority to conduct its business in the
manner in which it is currently being
conducted.
10.2
NON-CONTRAVENTION; CONSENTS.
(a)
The consummation or performance of any of the
obligations under this Agreement by Genzyme
will not (with or without notice or
lapse of time):
(i)
contravene, conflict with or result in a
violation of (A) any of the provisions of
Genzyme's Certificate of Incorporation
or bylaws or (B) any resolution adopted by
Genzyme's Board of Directors (or any
committee thereof) or stockholders; or
(ii) to
the knowledge of Genzyme, contravene,
conflict with or result in a violation of
any legal requirement or any judicial
or administrative order to which Genzyme or
any of the assets owned or used by
Genzyme is subject.
(b)
Other than filings under the HSR Act, Genzyme was not,
is not and will not be required to make any
filing with or give any notice to,
or to obtain any consent from, any person
prior to the consummation or
performance of this Agreement.
10.3
PROCEEDINGS; ORDERS. There is no pending proceeding, and to the
knowledge of Genzyme, Genzyme has not
received written notice or other
communication threatening to commence any
proceeding: (i) that involves Genzyme
and that relates to or might affect the
Acquired Assets or the ability of
Genzyme to perform this Agreement; or (ii)
that challenges, or that may have the
effect of preventing, delaying, making
illegal or otherwise interfering with,
the execution of this Agreement and the
Closing. To the knowledge of Genzyme, no
event has occurred, and no claim, dispute
or other condition or circumstance
exists, that might give rise to or serve as
a basis for the commencement of any
such proceeding.
10.4
AUTHORITY; BINDING NATURE OF AGREEMENT. Genzyme has the right,
power and authority to enter into and
perform its obligations under this
Agreement. The execution, delivery and
performance of this Agreement by Genzyme
have been duly authorized by all necessary
corporate action on the part of
Genzyme. This Agreement constitutes the
legal, valid and binding obligation of
Genzyme, enforceable against Genzyme in
accordance with its terms, subject to
(a) laws of general application relating to
bankruptcy, insolvency and the
relief of debtors, and (b) rules of law
governing specific performance,
injunctive relief and other equitable
remedies.
10.5
BROKERS. Genzyme has not agreed or become obligated to pay, or
taken any action that might result in any
person or entity claiming to be
entitled to receive, any brokerage
commission, finder's fee or similar
commission or fee in connection with this
Agreement.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
28
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10.6
ADDITIONAL REPRESENTATIONS. Genzyme is not engaged in, and has
no current plans to commence, a clinical
study for the use of a Synvisc Product
for any use other than the treatment of
osteoarthritis. As of the Signing Date,
other than Synvisc Product for use for the
treatment of osteoarthritis, Genzyme
is not engaged in, and has no current plans
to commence, a clinical study for
the use of a candidate Viscosupplement
Product.
10.7
DISCLAIMER. GENZYME MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTY OF ANY KIND, EITHER EXPRESS OR
IMPLIED (INCLUDING, WITHOUT LIMITATION,
ANY WARRANTIES OF INFRINGEMENT, TITLE,
MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE) EXCEPT AS EXPRESSLY SET
FORTH IN THIS ARTICLE 10.
10.8
SURVIVAL. The representations and warranties set forth in this
Article 10 shall expire eighteen (18)
months after the Closing Date, with the
exception of the representation and
warranty set forth in Section 10.5 which
shall be perpetual. Any claims made with
respect to such representations and
warranties (including, without limitation,
any claim made under Section 13.2)
must be brought prior to the applicable
expiration date (if any) for such
representation and warranty; PROVIDED,
HOWEVER, that such expiration date shall
not affect the continued adjudication of
any such claim brought prior to such
applicable expiration date.
ARTICLE 11
PRE-CLOSING COVENANTS
11.1
PRE-CLOSING COVENANTS OF WYETH.
(a)
ACCESS. Subject to the provisions of the confidentiality
obligations below in Article 14, during the
period from the Signing Date through
the Closing Date (the "PRE-CLOSING
PERIOD"), Wyeth will, after receiving
reasonable advance notice from Genzyme,
give Genzyme reasonable access (during
normal business hours) to Wyeth's
facilities, to Wyeth's books and records
relating to the Acquired Assets and to the
Transferred Employees and will
provide Genzyme with such information, data
and materials regarding the Acquired
Assets and Transferred Employees and any
other appropriate matters germane to
the subject matter of this Agreement as
Genzyme may reasonably request. Such
access shall include but not be limited to
Wyeth providing Genzyme with the
information, data and materials set forth
in SCHEDULE 11.1(a) (the "PRE-CLOSING
INFORMATION") within a reasonable amount of
time but in no event later than the
periods set forth in SCHEDULE 11.1(a).
After the Closing Date and subject to the
confidentiality obligations below in
Article 14, Genzyme shall have the right to
use the Pre-Closing Information for any
purpose related to the Acquired Assets
and Transferred Employees. In addition,
Wyeth will assist Genzyme in
communicating with the Transferred
Employees so as to prepare for and facilitate
the transition of the Transferred Employees
to Genzyme on the Closing Date. All
Genzyme employees and agents participating
in such facility visits shall comply
with all Wyeth written policies and
procedures while on Wyeth sites as
reasonably notified in advance by
Wyeth.
(b)
CONDUCT OF BUSINESS. Except as contemplated or permitted
by this Agreement, or as otherwise approved
in writing by Genzyme, during the
Pre-Closing Period
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
29
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Wyeth will (i) continue to sell, promote
and distribute the Synvisc Product in
substantially the same manner as it has
been doing so immediately prior to the
Signing Date, including maintaining current
levels of sales and marketing
investment in the Synvisc Products; (ii)
continue to share one-half of the
clinical study expenses for the hip trial
and the Synvisc II pilot study
incurred as of the Closing Date; and (iii)
use reasonable efforts to retain, and
maintain the integrity and value of, the
Wyeth sales force and brand team
dedicated to the Synvisc Products (the
"WYETH SALES FORCE"). [**] During the
Pre-Closing Period and after the Closing
Date, Wyeth will not provide any
severance benefits to any Employee who
declines a position with Genzyme which is
offered by Genzyme in accordance with
Section 6.2(a). Wyeth shall ensure that
the transfer of the Acquired Assets and
information under this Agreement
complies with all applicable privacy, data
protection or data transfer laws and
regulations including without limitation
the Health Insurance Portability and
Accountability Act (HIPAA), as amended,
and, to the extent that such privacy
regulations restrict Wyeth's ability to
transfer any Acquired Assets or
information to Genzyme hereunder, the
Parties will cooperate and share equally
any reasonable Third Party costs, if any,
in obtaining any required
authorizations or consents for such
transfer. Wyeth shall use reasonable efforts
to obtain any required consents from any
Third Party who is a party to the
Assigned Contracts for the assignment of
the Assigned Contracts to Genzyme
effective on the Closing Date.
(c)
INVENTORY REPORTS. During the Pre-Closing Period, Wyeth
shall provide Genzyme with a monthly report
of its inventory levels, such report
to be substantially in the form attached
hereto as SCHEDULE 11.1(c).
(d)
NEGATIVE COVENANTS. Except as contemplated or permitted
by this Agreement or as otherwise approved
in writing by Genzyme, during the
Pre-Closing Period Wyeth will not (i)
license or dispose of any material
Acquired Assets, (ii) prematurely terminate
or materially amend, grant a
sublicense under or assign any of the
Assigned Contracts, or (iii) commit a
material breach of any Assigned Contract.
If Wyeth requests Genzyme's approval
of a proposed action that would otherwise
result in a breach by Wyeth of this
Section 11.1(d), Genzyme will respond
promptly to Wyeth's request and will not
unreasonably withhold its approval of the
proposed action.
(e)
CONDITIONS. Wyeth will use commercially reasonable
efforts (i) to cause the conditions set
forth in Section 12.1 to be satisfied on
a timely basis and (ii) otherwise to cause
the Closing to take place as soon as
reasonably practicable.
(f)
FINANCIAL STATEMENTS. If requested by Genzyme, Wyeth
will provide reasonable assistance, as
appropriate, and at Genzyme's expense,
for Genzyme to produce any audited
financial statements or other financial data
required by Genzyme to comply with the
requirements of the securities laws with
respect to the transaction contemplated in
this Agreement.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
30
<Page>
11.2
PRE-CLOSING COVENANTS OF GENZYME.
(a)
PRE-CLOSING COMMITMENTS. Genzyme shall use commercially
reasonable efforts to minimize the extent
and period of Transition Services
required by Genzyme, and to be as ready as
permitted by applicable law to take
over conduct of the Synvisc Product
business in the United States as of the
Closing Date.
(b)
CONDITIONS. Genzyme
will use commercially reasonable
efforts (i) to cause the conditions set
forth in Section 12.2 to be satisfied on
a timely basis and (ii) otherwise to cause
the Closing to take place as soon as
reasonably practicable.
11.3 HSR
ACT.
(a)
Each of Genzyme and Wyeth shall, as promptly as
practicable after the date hereof, file or
supply, or cause to be filed or
supplied, all notifications and information
required to be filed or supplied
pursuant to the HSR Act in connection with
the transactions contemplated by this
Agreement. Each of Genzyme and Wyeth shall
furnish to the other such necessary
information and reasonable assistance as
the other may request in connection
with its preparation of any filing or
submission which is necessary under the
HSR Act. As promptly as practicable,
Genzyme and Wyeth shall make, or cause to
be made, all such other filings and
submissions under laws, rules and
regulations applicable to them, or to their
Affiliates, as may be required for
them to consummate the transactions
contemplated hereby in accordance with the
terms of this Agreement. Genzyme and Wyeth
shall keep one another apprised of
the status of any communications with, and
inquiries or requests for additional
information from, any governmental
authority, including the United States
Federal Trade Commission and the Antitrust
Division of the United States
Department of Justice, and shall comply
promptly with any such inquiry or
request. Genzyme shall pay the costs of all
filing fees under the HSR Act.
(b)
Each of Genzyme and Wyeth shall use reasonable
commercial efforts to resolve any
objections that may be asserted by the United
States Federal Trade Commission and the
Antitrust Division of the United States
Department of Justice with respect to the
transactions contemplated hereby, and
shall cooperate with each other to contest
any challenges to the transactions
contemplated hereby by any such
governmental entity. The Parties agree to
cooperate and to use their respective
reasonable commercial efforts to obtain
any government clearances or approvals
required for Closing under the HSR Act,
to respond to any government requests for
information under the HSR Act, and to
contest and resist any action, including
any legislative, administrative or
judicial action, and to have vacated,
lifted, reversed or overturned any decree,
judgment, injunction or other order
(whether temporary, preliminary or
permanent) that restricts, prevents or
prohibits the consummation of the
transactions contemplated by this Agreement
under the HSR Act or which is
otherwise required to consummate the
transactions contemplated by this
Agreement.
ARTICLE 12
CONDITIONS PRECEDENT TO CLOSING
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
31
<Page>
12.1
CONDITIONS PRECEDENT TO GENZYME'S OBLIGATION TO CLOSE.
Genzyme's
obligation to purchase the Acquired Assets
and to take the other actions
required to be taken by Genzyme at the
Closing and thereafter is subject to the
satisfaction, at or prior to the Closing,
of each of the following conditions
(any of which may be waived by Genzyme, in
whole or in part, in writing):
(a)
ACCURACY OF REPRESENTATIONS. Those representations and
warranties of Wyeth set forth in Article 9
shall be accurate in all material
respects as of the Closing Date as if made
on and as of the Closing Date.
(b)
PERFORMANCE OF COVENANTS. Wyeth shall have performed, in
all material respects, all covenants
required by this Agreement to be performed
by Wyeth on or before the Closing Date.
(c)
HSR ACT. The waiting period (and any extension thereof)
applicable to the consummation of the
Agreement under the HSR Act applicable to
the transactions contemplated hereby shall
have expired or been terminated.
(d)
ADDITIONAL DOCUMENTS. Wyeth shall have executed and
delivered such bills of sale, assignments
and other instruments as Genzyme may
reasonably require as necessary to evidence
and effectuate the transfer of the
Acquired Assets to Genzyme.
(e)
NO RESTRAINTS. No injunction or other order preventing
the consummation of the transactions
contemplated by this Agreement shall have
been issued since the Signing Date by any
foreign, United States federal or
state court of competent jurisdiction and
shall remain in effect; and no
foreign, United States federal or state
law, rule or regulation that makes
consummation of the transactions
contemplated by this Agreement illegal shall
have been enacted or adopted since the
Signing Date and shall remain in effect.
12.2
CONDITIONS PRECEDENT TO WYETH'S OBLIGATION TO CLOSE. Wyeth's
obligation to sell and transfer the
Acquired Assets to Genzyme and to take the
other actions required to be taken by Wyeth
at the Closing is subject to the
satisfaction, at or prior to the Closing,
of each of the following conditions
(any of which may be waived by Wyeth, in
whole or in part, in writing):
(a)
ACCURACY OF REPRESENTATIONS. The representations and
warranties of Genzyme set forth in Article
10 shall be accurate in all material
respects as of the Closing Date as if made
on and as of the Closing Date.
(b)
PERFORMANCE OF COVENANTS. Genzyme shall have performed,
in all material respects, all covenants
required by this Agreement to be
performed by Genzyme on or before the
Closing Date.
(c)
HSR ACT. The waiting period (and any extension thereof)
applicable to the consummation of the
Agreement under the HSR Act applicable to
the transactions contemplated hereby shall
have expired or been terminated.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
32
<Page>
(d)
NO RESTRAINTS. No injunction or other order preventing
the consummation of the transactions
contemplated by this Agreement shall have
been issued since the Signing Date by any
foreign, United States federal or
state court of competent jurisdiction and
shall remain in effect; and no
foreign, United States federal or state,
law, rule or regulation that makes
consummation of the transactions
contemplated by this Agreement illegal shall
have been enacted or adopted since the
Signing Date and shall remain in effect.
(e)
ADDITIONAL DOCUMENTS. Genzyme shall have executed and
delivered such other documents as Wyeth may
reasonably require evidencing
Genzyme's assumption of the obligations
being assigned to Genzyme pursuant to
this Agreement.
ARTICLE 13
INDEMNIFICATION
13.1
INDEMNIFICATION BY WYETH. Except as set forth in Section 13.2
hereof, and except to the extent caused by
Genzyme's, or its Affiliates' or
licensees' negligent, reckless or willful
acts or omissions, Wyeth shall
indemnify, defend and hold Genzyme and its
directors, officers, employees,
agents and Affiliates harmless from and
against any liabilities, damages, costs
or expenses, including reasonable
attorneys' fees (collectively, "DAMAGES")
incurred or suffered as the result of Third
Party claims, demands, or judgments
to the extent arising out of or relating
to: (a) any material breach of any
covenant, agreement, representation or
warranty of Wyeth contained in this
Agreement, and (b) any Product Liability
relating to Synvisc Product sold by
Wyeth prior to the Closing but excluding
defects introduced into such Synvisc
Product by Genzyme in violation of the
warranties under the Supply Agreement.
The indemnification obligations arising in
connection with the breach of any
representation or warranty by Wyeth shall
expire upon the expiration of the
applicable representation or warranty as
set forth in Section 9.10 or, if later,
with respect to any claim brought under
this Section 13.1 prior to the
expiration date of the applicable
representation or warranty, until the final
adjudication of such claim.
13.2 INDEMNIFICATION BY GENZYME.
Except as set forth in Section 13.1
hereof, and except to the extent caused by
Wyeth's or its Affiliates', or
licensees' negligent, reckless or willful
acts or omissions, Genzyme shall
indemnify, defend and hold Wyeth and its
directors, officers, employees, agents
and Affiliates harmless from and against
any Damages incurred or suffered as the
result of Third Party claims, demands, or
judgments, to the extent arising out
of or relating to: (a) any activities
relating to any Synvisc Product, including
without limitation the development,
manufacture, storage, distribution,
promotion, and commercialization of
Products, that are performed by or on behalf
of Genzyme, its Affiliates, or licensees
after the Closing; (b) any Product
Liability relating to any Synvisc Product
sold by Genzyme after the Closing, and
(c) any material breach of any covenant,
agreement, representation or warranty
of Genzyme contained in this Agreement. The
indemnification obligations arising
in connection with the breach of any
representation or warranty by Genzyme shall
expire upon the expiration of the
applicable representation or warranty as set
forth in Section 10.7, or, if later, with
respect to any claim brought under
this Section 13.2 prior to the expiration
date of the applicable representation
and warranty, until the final adjudication
of such claim.
[**] = Portions of this exhibit have been
omitted pursuant to a confidential
treatment request. An unredacted version of
this exhibit has been filed
separately with the Commission.
33
<Page>
13.3
INDEMNIFICATION PROCEDURE. Each Party will notify the other
Party in writing in the event it becomes
aware of a claim for which
indemnification may be sought hereunder. In
case any proceeding (including any
governmental investigation) shall be
instituted involving any Party in respect
of which indemnity may be sought pursuant
to this Article 13, such Party (the
"INDEMNIFIED PARTY") shall promptly notify
the other Party (the "INDEMNIFYING
PARTY") in writing and the Indemnifying
Party and Indemnified Party shall meet
to discuss how to respond to any claims
that are the subject matter of such
proceeding. The Indemnified Party shall
cooperate fully with the Indemnifying
Party in defense of such matter. The
Indemnifying Party, upon request of the
Indemnified Party, shall retain counsel
reasonably satisfactory to the
Indemnified Party to represent the
Indemnified Party and shall pay the fees and
expenses of such counsel related to such
proceeding. In any such proceeding, the
Indemnified Party shall have the right to
retain its own counsel, but the fees
