-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Gfm+YtBpu4Egoyi6GOcdhk1zdk8FQWZPhWhnQk0jAfGdJ0Bfs9I3IuZma63jP6zk bl1EUILzz7+tZpzbREroGA== 0001032210-01-501355.txt : 20020410 0001032210-01-501355.hdr.sgml : 20020410 ACCESSION NUMBER: 0001032210-01-501355 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20011106 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20011113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IMMUNEX CORP /DE/ CENTRAL INDEX KEY: 0000719529 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 510346580 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-12406 FILM NUMBER: 1785026 BUSINESS ADDRESS: STREET 1: 51 UNIVERSITY ST CITY: SEATTLE STATE: WA ZIP: 98101 BUSINESS PHONE: 2065870430 MAIL ADDRESS: STREET 1: 51 UNIVERSITY STREET CITY: SEATLE STATE: WA ZIP: 98101 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 November 6, 2001 ------------------------- Date of Report (Date of earliest event reported) IMMUNEX CORPORATION -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Washington 0-12406 51-0346580 - ---------------------------- --------------------- ------------------- (State or Other Jurisdiction (Commission File No.) (IRS Employer of Incorporation) Identification No.) 51 University Street, Seattle, Washington 98101 ------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (206) 587-0430 ------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) None ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events On November 6, 2001, Immunex Corporation entered into agreements with American Home Products Corporation and its affiliates, or together AHP, related to both the transfer of ownership of a biopharmaceutical manufacturing facility from AHP to Immunex and the manufacture, supply, inventory, and allocation of supplies of ENBREL(R) (etanercept) throughout the world. The manufacturing facility, which Immunex and AHP have worked together to retrofit to accommodate the commercial production of ENBREL bulk drug, is located in West Greenwich, Rhode Island. In order to transfer ownership of the manufacturing facility, AHP has agreed to sell, and Immunex has agreed to purchase, all of the outstanding shares of Greenwich Holdings, Inc., the AHP subsidiary which is currently the sole owner of the facility. The aggregate purchase price for these shares is expected to total more than $450 million in cash, an amount which will include the purchase price paid by AHP for the facility in 1999, AHP's costs of retrofitting the facility and an agreed interest component. Subject to the conditions set forth in the purchase agreement (including receipt of required regulatory approvals and other customary closing conditions), the share transfer is scheduled to occur on or about January 1, 2002. In addition, Immunex and AHP have agreed to collaborate regarding the manufacture, inventory, and allocation of defined supplies of ENBREL produced at the Rhode Island facility, as well as particular supplies of ENBREL produced by either the current third party manufacturer or AHP at a manufacturing facility AHP is in the process of constructing in Ireland. Copies of the purchase agreement related to the transfer of the facility and the collaboration and global supply agreement are attached to this current report as Exhibits 10.1 and 10.2. A copy of the press release related to the transfer of the facility is attached to this current report as Exhibit 99.1. This summary of the transaction is qualified in its entirety by reference to copies of the actual transaction agreements, which are attached as exhibits to this current report. Item 7. Financial Statements and Exhibits (c) Exhibits 10.1* Purchase Agreement, dated November 6, 2001, by and among American Home Products Corporation, AHP Subsidiary Holding Corporation, and Immunex Corporation. 10.2* Collaboration and Global Supply Agreement, dated November 6, 2001, by and between Immunex Corporation and American Home Products Corporation, acting through its Wyeth-Ayerst Pharmaceuticals division. 99.1 Immunex Press Release Dated November 7, 2001 * Confidential treatment requested as to certain portions SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IMMUNEX CORPORATION Dated: November 13, 2001 By /s/ Barry G. Pea ---------------------------------------- Name: Barry G. Pea Its: Senior Vice President, General Counsel and Secretary EXHIBIT INDEX Exhibit Number Description 10.1* Purchase Agreement, dated November 6, 2001, by and among American Home Products Corporation, AHP Subsidiary Holding Corporation, and Immunex Corporation. 10.2* Collaboration and Global Supply Agreement, dated November 6, 2001, by and between Immunex Corporation and American Home Products Corporation, acting through its Wyeth-Ayerst Pharmaceuticals division. 99.1 Immunex Press Release Dated November 7, 2001 * Confidential treatment requested as to certain portions EX-10.1 3 dex101.txt PURCHASE AGREEMENT, DATED NOVEMBER 6, 2001 Exhibit 10.1 * Certain confidential information contained in this document, marked by brackets, has been omitted and filed with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. The omitted portions of this exhibit have been filed separately with the Securities and Exchange Commission. PURCHASE AGREEMENT among AMERICAN HOME PRODUCTS CORPORATION AHP SUBSIDIARY HOLDING CORPORATION and IMMUNEX CORPORATION TABLE OF CONTENTS Page ---- ARTICLE I. DEFINITIONS........................................................1 ARTICLE II. THE SALE; PURCHASE PRICE..........................................8 2.1. PURCHASE AND SALE...................................8 2.2. NET ASSETS AND OTHER PAYMENTS.......................8 2.3 TRANSFER TAXES.....................................10 2.4 ADDITIONAL COSTS...................................11 ARTICLE III. CLOSING.........................................................11 3.1. THE CLOSING........................................11 3.2. DELIVERIES BY BUYER................................11 3.3. DELIVERIES BY SELLERS..............................12 3.4. FURTHER ASSURANCES.................................12 ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLERS........................13 4.1 ORGANIZATION.......................................13 4.2 CAPITALIZATION OF GREENWICH........................13 4.3 CORPORATE AUTHORITY................................13 4.4 NO VIOLATION.......................................14 4.5 LITIGATION.........................................14 4.6 FINANCIAL STATEMENTS; ABSENCE OF CERTAIN CHANGES OR EVENTS..................................14 4.7 TITLE TO PROPERTIES; ABSENCE OF LIENS..............15 4.8 CONDITION OF PHYSICAL ASSETS; INTELLECTUAL PROPERTY...........................................17 4.9 EMPLOYEE MATTERS...................................17 4.10 COMPLIANCE WITH LAW................................18 4.11 CONTRACTS AND COMMITMENTS. (a).....................18 4.12 BROKERS AND INTERMEDIARIES.........................19 4.13 LICENSES AND PERMITS...............................19 4.14 ENVIRONMENTAL MATTERS..............................19 4.15 TAXES..............................................20 4.16 DISCLAIMER.........................................21 4.17 DISCLOSURE IN SCHEDULES............................21 (i) ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER............................21 5.1 ORGANIZATION.......................................21 5.2 CORPORATE AUTHORITY................................21 5.3 NO VIOLATION.......................................21 5.4 FINANCIAL ABILITY TO PERFORM.......................22 5.5 BROKERS AND INTERMEDIARIES.........................22 ARTICLE VI CONDUCT OF BUSINESS PENDING THE CLOSING...........................23 6.1. OPERATION OF FACILITY PRIOR TO THE CLOSING DATE....23 6.2. PERMITTED ACTIONS..................................24 6.3 ACCOUNTING RECORDS.................................26 ARTICLE VII ADDITIONAL AGREEMENTS............................................27 7.1 ANCILLARY AGREEMENTS...............................27 7.2 ACCESS TO INFORMATION AND CONFIDENTIALITY..........27 7.3 REGULATORY FILINGS.................................28 7.4 COMMERCIALLY REASONABLE EFFORTS....................29 7.5 NOTICES OF CERTAIN EVENTS..........................29 7.6 START-UP AND OPERATION OF THE FACILITY.............29 7.7 CAPITAL IMPROVEMENT CONTRACTS......................30 7.8 BUYER PERSONNEL COSTS..............................30 7.9 STAFFING...........................................30 7.10 FACILITY USE.......................................30 7.11 TRANSFER OF SELLER EMPLOYEES.......................31 7.12 ASSIGNMENT OF BUYER EMPLOYEES......................31 7.13 TRANSFER OF PERMITS; CONTRACTS ....................32 7.14 TAX MATTERS........................................32 ARTICLE VIII AGREEMENTS WITH RESPECT TO EMPLOYEES AND EMPLOYEE MATTERS.......35 8.1 BUYER'S OBLIGATIONS TO EMPLOYEES...................35 ARTICLE IX. CONDITIONS.......................................................38 9.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT..........................................38 9.2. CONDITIONS TO THE OBLIGATION OF SELLERS............39 9.3. CONDITIONS TO THE OBLIGATION OF BUYER..............39 ARTICLE X. TERMINATION, AMENDMENT AND WAIVER.................................40 10.1 TERMINATION........................................40 (ii) 10.2 EFFECT OF TERMINATION..............................40 ARTICLE XI. INDEMNIFICATION..................................................41 11.1 INDEMNIFICATION BY SELLER..........................41 11.2 INDEMNIFICATION BY BUYER...........................42 11.3 CERTAIN LIMITATIONS................................42 ARTICLE XII. GENERAL PROVISIONS..............................................43 12.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.........43 12.2 COOPERATION........................................44 12.3 WAIVER.............................................44 12.4 NOTICES............................................44 12.5 GOVERNING LAW AND CONSENT TO JURISDICTION..........44 12.6 COUNTERPARTS.......................................45 12.7 HEADINGS...........................................45 12.8 ENTIRE AGREEMENT...................................45 12.9 AMENDMENT AND MODIFICATION.........................45 12.10 BINDING EFFECT; BENEFITS...........................45 12.11 ASSIGNABILITY......................................45 12.12 SELLERS' KNOWLEDGE.................................46 12.13 SEVERABILITY.......................................46 (iii) PURCHASE AGREEMENT This PURCHASE AGREEMENT dated as of November 6, 2001 (the "Agreement") by and among AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation ("AHP"), AHP SUBSIDIARY HOLDING CORPORATION, a Delaware corporation ("Holdings", and together with AHP, the "Sellers") and IMMUNEX CORPORATION, a Washington corporation ("Buyer"). W I T N E S S E T H: WHEREAS, Sellers desire to sell to Buyer and Buyer desires to acquire from Holdings one thousand (1,000) shares (the "Shares") of common stock, no par value per share, of GREENWICH HOLDINGS INC., a Delaware corporation ("Greenwich"), which shares constitute all of the issued and outstanding shares of capital stock of Greenwich, all on the terms and subject to the conditions set forth herein; and WHEREAS, in connection with such sale Buyer shall pay to Holdings certain costs incurred by Sellers related to readying the Facility (as defined below) for approval by the Food and Drug Administration (the "FDA") and EMEA (as defined below); and WHEREAS, this Agreement shall govern the parties' management of the Facility from the date first written above to the Closing Date (as defined below); NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements herein contained, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I. DEFINITIONS Whenever used in this Agreement, unless otherwise clearly indicated by the context, the terms defined below shall have the indicated meanings: 1.1 "Accountants" shall have the meaning set forth in Section 2.2(e) hereof. 1.2 "Affiliate" shall mean, with respect to any Person, any Person which directly or indirectly through stock ownership or through other arrangements either controls, or is controlled by or is under common control with, such Person, provided, however, for purposes of this Agreement the term "Affiliate" shall not include subsidiaries or other entities in which a Person owns a majority of the ordinary voting power to elect the majority of the board of directors 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. For purposes of this Agreement, Buyer 1 shall not be deemed to be an Affiliate of Greenwich or either Seller, and AHP, Greenwich and Holdings shall not be deemed to be Affiliates of Buyer. 1.3 "Applicable Laws" shall mean all laws, statutes, regulations, interpretations, publicly available policies which are published by a Governmental Authority, decrees, injunctions, judgments, orders, rulings, assessments, writs, directives, rules, codes of conduct and ordinances of any Governmental Authority. 1.4 "Applicable Permits" shall mean any waiver, exemption, variance, permit, certificate of occupancy, authorization, membership, approval, consent, clearance, franchise, orders, license or similar approval or notification required to be obtained, maintained or made under Applicable Laws in connection with the Facility or the Assets or necessary to the operation of the Facility as presently conducted. 1.5 "Assets" shall mean collectively, all of the assets (both tangible and intangible), rights, interests, privileges, appurtenances, easements, reservations, estates, awards and properties of any kind, nature and description owned by Greenwich, including, without limitation: (i) the Real Property, including the Facility; (ii) Personal Property; (iii) Transferred Books and Records; (iv) Applicable Permits; (v) all Contracts, including without limitation the EDC Ground Lease and the Phase B Ground Lease; and (vi) all of Sellers' or Greenwich's rights, claims, causes of action or rights of set-off against third parties relating to the foregoing, including, without limitation, unliquidated rights under manufacturers' and vendors' warranties. 1.6 "Buyer Indemnified Claims" shall have the meaning set forth in Section 11.1 hereof. 1.7 "Buyer Indemnitees" shall have the meaning set forth in Section 11.1 hereof. 1.8 "Buyer Losses" shall have the meaning set forth in Section 11.1 hereof. 1.9 "Catalytica Facility" shall have the meaning set forth in Section 1.8 of the Supply Agreement among AHP, Buyer and Catalytica Pharmaceuticals, Inc. effective as of October 16, 2000. 1.10 "Closing" shall have the meaning set forth in Section 3.1 hereof. 2 1.11 "Closing Date" shall have the meaning set forth in Section 3.1 hereof. 1.12 "Code" shall mean the Internal Revenue Code of 1986, as amended. 1.13 "Collaboration Agreement" shall mean that certain agreement entered into between AHP and/or one or more of its Affiliates and Buyer simultaneously with the execution of this Agreement regarding the management, inventory and allocation of Enbrel supplies substantially in the form of Exhibit A, attached hereto. 1.14 "Contracts" shall mean each contract, agreement, understanding, arrangement or commitment outstanding as of the date hereof (a) to which Greenwich is a party, or (b) to which one or more Sellers is a party and which relates primarily to the Assets. 1.15 "Disclosure Schedule" shall mean that certain schedule identified as such and delivered by Sellers to Buyer pursuant to the Agreement as the same may be supplemented and updated from time to time pursuant to the Agreement. 1.16 "EDC Ground Lease" shall mean (i) the ground lease dated March 7, 2001 with Greenwich as lessor and the EDC as lessee for the portion of the Real Property identified therein, and (ii) the subground lease dated March 7, 2001 with the EDC as lessor and Greenwich as lessee for such portion of the Real Property. 1.17 "EMEA" shall mean the European Medicines Evaluation Agency. 1.18 [*] 1.19 "Encumbrances" shall mean all claims, security interests, liens, pledges, charges, escrows, options, proxies, rights of first refusal, preemptive rights, mortgages, deeds of trust, hypothecations, prior assignments, rights-of-way, easements, encroachments, title retention agreements, indentures, security agreements or any other encumbrances of any kind. 1.20 "Environmental Laws" shall mean all Applicable Laws relating to the protection or pollution of the environment, including, but not limited to, laws protecting natural resources, laws protecting plant and animal species or habitat, and laws relating to the protection of public health or occupational health, including but not limited to the Comprehensive Environmental Response, Compensation and Liability Act, Clean Air Act, the Federal Water Pollution Control Act, the Hazardous Materials Transportation Act, the Resource Conservation and Recovery Act of 1976 and the Toxic Substances Control Act, and analogous state statutes. 1.21 "ERISA" shall mean the Employee Retirement Income Security Act, as amended from time to time, and related regulations. 1.22 "ERISA Affiliate" shall mean any corporation, partnership, limited liability company, sole proprietorship, trade, business, or other entity or organization that, together with * Confidential Treatment Requested. 3 Greenwich, is or was treated as a single employer under Section 414(b), (c), (m), or (o) of the Code. 1.23 "Excluded Assets and Liabilities" shall mean the following assets and liabilities of Greenwich: (i) intercompany receivables and payables; (ii) deferred tax assets and deferred tax liabilities; (iii) any personnel costs for employees of a Seller or Greenwich whose responsibilities at the Facility are for training only to eventually be transferred to another facility and other employee costs where such personnel costs are not related to (A) the Real Property, (B) the Project, (C) readying the Facility and the Catalytica Facility for approval by the FDA and/or EMEA or (D) production of Enbrel; and (iv) any costs already paid by Buyer pursuant to the Phase B Ground Lease between Buyer and Greenwich. 1.24 "Facility" shall mean Greenwich's biopharmaceutical manufacturing facility located at 40 Technology Way, West Greenwich, Rhode Island, which such Facility is under renovation in accordance with plans approved by Sellers and Buyer. 1.25 "Facility Costs" shall mean any costs incurred directly or indirectly by Sellers or Greenwich (other than the purchase price paid by Sellers for the Facility) after September 24, 1999 related to (i) the Real Property, (ii) the Project, (iii) readying the Facility and the Catalytica Facility for approval by the FDA and/or EMEA, and (iv) manufacturing Enbrel at the Facility. All Facility Costs shall be reflected within Net Assets. 1.26 "Facility Employees" shall have the meaning set forth in Section 4.9 hereof. 1.27 "GAAP" shall mean United States of America generally accepted accounting principles. 1.28 "Governmental Authority" shall mean any governmental department, commission, board, bureau, agency, regulatory or revenue authority, court or other instrumentality (including non-statutory authorities) of the United States, or any other nation or international body, or of any state, county, or any jurisdiction, municipality, territory (including, without limitation, Puerto Rico) or other political subdivision thereof or of any supranational authority. 1.29 "Greenwich" shall have the meaning set forth in the first WHEREAS clause of this Agreement. 1.30 "Hazardous Materials" shall mean any hazardous materials, hazardous wastes, hazardous constituents or hazardous or toxic substances defined or regulated as such in or under any Environmental Laws. 4 1.31 "HSR Act" shall mean Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the related regulations. 1.32 "Inventory" shall mean all manufactured etanercept (finished product bulk drug substance and drug product), work in-process and all raw materials. 1.33 "Material Adverse Effect" shall mean, assuming full utilization of the Facility, (i) a material adverse effect on the operation or the use of the Assets (including the cost thereof, whether or not considered as an expense under GAAP) in the manner currently operated or used and (ii) any material adverse effect on the ability of Sellers or Buyer to consummate and perform their obligations under this Agreement (without, in the case of this clause (ii), giving effect to any change in the manner that the Assets are currently operated or used, or are intended to be used by Buyer, assuming full utilization of the Facility). 1.34 "Material Permit" shall have the meaning set forth in Section 4.13 hereof. 1.35 "Material Contract" shall mean each Contract set forth in Section 4.11(a) of the Disclosure Schedule. 1.36 "MOU" shall mean the Memorandum of Understanding Regarding Greenwich's West Greenwich, RI Biopharmaceutical Facility executed by Buyer and AHP dated August 9, 2000, as amended. 1.37 "Multiemployer Plan" means each employee benefit plan described in Article VIII hereof that is a multiemployer plan, as defined in Section 3(37) of ERISA. 1.38 "Net Assets" shall mean, collectively, (i) the sum of the book value of all the Assets of any kind, nature and description, (ii) minus the sum of the book value of the liabilities of Greenwich, each so determined in accordance with GAAP. Net Assets shall include, but not be limited to, 1) fees of any legal counsel, accountants and other advisors, excluding any fees or costs of legal counsel and accountants directly related to the negotiations for the purchase and sale of the Shares contemplated herein, or for legal counsel who are employees of Greenwich, or for legal counsel and accountants of a Seller, or an Affiliate of a Seller other than Greenwich; 2) Inventory; 3) the Real Property; 4) the Personal Property; 5) the cost of obtaining approvals and Applicable Permits; 6) the cost of obtaining agreements or cooperation from Governmental Authorities; 7) deposits; 8) prepaid expenses; 9) accounts payable and accrued expenses; and 5 10) all Facility Costs. Regardless of the above, the Net Assets shall not include the Excluded Assets and Liabilities. 1.39 "Permitted Encumbrances" shall have the meaning set forth in Section 4.7 hereof. 1.40 "Person" shall mean an individual, a corporation, a partnership, an association, limited liability company or partnership, a trust or other entity, joint venture or organization, including a government or political subdivision or an agency or instrumentality thereof. 1.41 "Personal Property" shall mean (i) all tangible personal property of Greenwich, including without limitation all machinery, equipment, furniture, office equipment, communications equipment, vehicles, storage tanks, spare and replacement parts, fuel and other tangible property and all warranties and guaranties relating thereto (all of such warranties and guaranties are transferred to Buyer without recourse to Sellers). 1.42 "Phase B" shall mean Buyer's planned construction of additional biotechnology manufacturing capacity on the land leased by Greenwich to Buyer under the Phase B Ground Lease. 1.43 "Phase B Ground Lease" shall mean that ground lease, dated March 9, 2001, between Greenwich, as lessor, and Immunex Manufacturing Corporation, a wholly-owned subsidiary of Buyer, as lessee. 1.44 "Project" shall have the meaning set forth in Section 6.2(a) hereof. 1.45 "Purchase Price" shall have the meaning set forth in Section 2.1 hereof. 1.46 "Real Property" shall mean all real property of Greenwich, as more fully described on Section 4.7(a) of the Disclosure Schedule, including the Facility and any other buildings, structures and improvements thereon, all off street parking rights and spaces, all fixtures, equipment and machinery attached thereto, all oil, gas and mineral rights related to the foregoing, all development rights, land use entitlements and rights in any off-site facilities and amenities servicing the land or any improvements located thereon, all air rights, water, water rights, and riparian rights, all rights in and to all strips and gores, all alleys adjoining the land, and all right in and to the land lying in the bed of any street, road or avenue, open or proposed adjoining the land, all right, title and interest in and to any condemnation award or to any payment in lieu thereof for any taking or for any change in grade of any street, road or avenue thereto and all easements, rights of way, reservations, privileges, appurtenances and other estates and rights pertaining thereto owned by Greenwich and primarily related to the Facility and all warranties and guaranties relating thereto (all of such warranties and guaranties are transferred without recourse to Sellers). 1.47 "Returns" shall mean all returns, declarations, reports, statements, and other documents required to be filed in respect of Taxes (as defined below), and any claims for refund 6 of Taxes, including any amendments or supplements to any of the foregoing. The term "Return" shall mean any one of the foregoing Returns. 1.48 "Seller Employees" shall have the meaning set forth in Section 7.11 hereof. 1.49 "Sellers' Employee Benefit Plans" shall mean all employee benefit plans applicable to Sellers' employees, including the Facility Employees, including but not limited to Sellers' Savings Plan, Sellers' Retirement Plan, Sellers' Retiree Benefits Plans, Sellers' Spending Account Plans, as well as Sellers' medical, insurance, holiday, vacation, stock option, stock incentive plans, and any other employee benefit plan, fund, policy or program. 1.50 "Sellers Indemnified Claims" shall have the meaning set forth in Section 11.2 hereof. 1.51 "Seller Indemnitees" shall have the meaning set forth in Section 11.2 hereof. 1.52 "Sellers Losses" shall have the meaning set forth in Section 11.2 hereof. 1.53 "Shares" shall have the meaning set forth in the first WHEREAS clause of this Agreement. 1.54 "Signing" shall mean the date of execution of this Agreement. 1.55 "Steering Committee" shall have the meaning set forth in Section 6.2(b) hereof. 1.56 "Successfully Manufactured" shall mean bulk drug substance Enbrel that has been produced at the Facility and meets (i) all applicable Enbrel bulk drug substance specifications, and (ii) applicable FDA regulatory requirements. 1.57 "Suite A" shall mean Suites A and D of the Facility. 1.58 "Suite A-3" shall mean Suite B of the Facility. 1.59 "Tax" or "Taxes" shall mean any income, corporation gross receipts, profits, gains, capital stock, capital duty, franchise, withholding social security, unemployment, disability, property, wealth, welfare, stamp, excise, occupation, sales, use, value added, alternative minimum, estimated or other similar tax (including any fee, assessment or other charge in the nature of or in lieu of any tax) imposed by any Governmental Authority (whether national, local, municipal or otherwise) or political subdivision thereof, and any interest, penalties, additions to tax or additional amounts in respect of the foregoing, and including any transferee or secondary liability in respect of any tax (whether imposed by law, contractual agreement or otherwise) and any liability in respect of any tax as a result of being a member of an affiliated, consolidated, combined, unitary or similar group. 1.60 "Technology Transfer Agreement" shall mean that certain technology transfer agreement between AHP and Buyer, to be entered into simultaneously with the Signing, substantially in the form of Exhibit B hereto. 7 1.61 "Termination Date" shall have the meaning set forth in Section 10.1 hereof. 1.62 "Transferred Books and Records" shall mean owner or use guides, all construction records and invoices related to the Facility, engineering and other manuals and drawings for operation of the Facility and the machinery and equipment contained therein, as well as all Applicable Permits, Contracts, utility bills and documents evidencing ownership of the Assets; provided, that Transferred Books and Records shall also include all books and records relating to the Assets or the manufacture of Enbrel (or copies thereof) including, but not limited to, all regulatory documents, Facility inspection records, validation records, protocols and standard operating procedures related thereto. Sellers shall be entitled to keep copies of any Transferred Books and Records, subject to confidentiality obligations to which Sellers are subject under this Agreement or other applicable agreements. 1.63 "Transferred Employees" shall have the meaning set forth in Section 8.1 hereof. 1.64 "WARN Act" shall mean the Worker Adjustment and Retraining Notification Act. Certain other terms are defined as indicated throughout this Agreement. ARTICLE II. THE SALE; PURCHASE PRICE 2.1. PURCHASE AND SALE. Upon the terms and subject to the conditions of this Agreement, (i) Holdings shall sell, assign, transfer and deliver to Buyer the Shares, effective as of Closing, and (ii) Buyer shall purchase and accept the Shares from Holdings for an aggregate purchase price (the "Purchase Price") equal to the sum of (x) Sixty Million Dollars ($60,000,000), payable at Closing, (y) the Interest Payments, and (z) an amount equal to the book value of the Net Assets as of the Closing Date, payable as provided for herein. Sellers shall not charge or otherwise pass through to Immunex any cost of capital for any portion of the Purchase Price or Net Assets except as provided for in Section 2.2(c). 2.2. NET ASSETS AND OTHER PAYMENTS. (a) Within one (1) day of Signing, Buyer shall pay Holdings fifty percent (50%) of the book value of the Net Assets as of the last day of the calendar quarter ending immediately prior to the Signing for which financial statements of Greenwich have been prepared and are available. Payment of the book value of the Net Assets shall be based upon an invoice furnished by Sellers to Buyer prior to the Signing, which invoice is accompanied by an unaudited statement of Net Assets and a calculation of the payment 8 due under this Section 2.2(a). Buyer shall have dispute and audit rights as set forth in Section 2.2(e). (b) Buyer shall pay Holdings fifty percent (50%) of the sum of the book value of the Net Assets as of the last day of each calendar quarter following the quarter for which the book value of the Net Assets was calculated in Section 2.2(a) until the Closing, minus amounts previously paid by Buyer under this Section 2.2(b) of the Agreement or Section 2.2(a), within thirty (30) days after receipt of Sellers' invoice, which invoice shall be accompanied by an unaudited statement of Net Assets and a calculation of the payment due under this Section 2.2(b). Buyer shall have dispute and audit rights as set forth in Section 2.2(e). (c) Sellers shall invoice Buyer at the Signing, or as soon as practicable thereafter, for the "Interest Payment," as detailed below, and Buyer shall pay Holdings the Interest Payment within thirty (30) days after receiving the invoice. Interest at the Interest Rate began accruing on May 1, 2001 (as if the Signing had occurred on such date) on one-half (1/2) of the book value of the Net Assets as of such date and, thereafter, interest at the "Interest Rate" accrued as of the last day of each month with respect to one-half (1/2) of the book value of the Net Assets at the end of such month, up to and until the date of payment pursuant to subsection (a) above. So long as the Interest Payment is paid within such thirty (30) day period, no interest shall accrue after the payment pursuant to subsection (a) above. "Interest Rate" shall be defined as "the three-month LIBOR rate as published in the Wall Street Journal on May 1, 2001 plus 50 basis points and then on the first date of each calendar quarter plus 50 basis points, which shall be the interest rate for that calendar quarter. Buyer shall have dispute and audit rights as set forth in Section 2.2(e). Notwithstanding the foregoing, between November 8, 2001 and the date of the payment due under subsection (a) above, the Interest Rate shall be the applicable LIBOR rate plus 250 basis points, and if not paid prior to December 1, 2001, such rate shall be the applicable LIBOR rate plus 600 basis points. (d) On the Closing Date, Buyer shall pay Holdings (i) the Sixty Million Dollars ($60,000,000) referred to in Section 2.1(ii)(x) above, plus (ii) an amount equal to the estimated book value of the Net Assets as of the Closing Date, or another date mutually agreed to by the parties, minus the sum of all of the amounts previously paid by Buyer pursuant to Sections 2.2(a) and 2.2(b) above. Not less than five (5) days prior to the Closing, Sellers shall provide Buyer an invoice detailing the amounts that will be payable at the Closing. As soon as practicable after the Closing, Sellers shall provide Buyer with an invoice detailing the actual book value of the Net Assets as of Closing and any amount due the Sellers or Buyer as a result of finalizing the actual book value of the Net Assets or the amounts previously paid by the Buyer. In addition, if Sellers pay any Facility Costs to any third party after the Closing, Sellers shall promptly provide Buyer with an invoice detailing such payment. Buyer shall pay all invoices provided by Sellers after the Closing within thirty (30) days after Buyer's receipt thereof. Buyer shall have dispute and audit rights as set forth in Section 2.2(e). 9 (e) With each invoice submitted by Sellers to Buyer pursuant to Section 2.2(b) through (d), Sellers shall submit the applicable supporting documentation set forth in Exhibit C attached hereto, unless otherwise agreed by the parties. With respect to the invoice submitted pursuant to Section 2.2(a), Sellers shall submit such supporting documentation within twenty (20) days of Signing. Buyer may, upon reasonable advance notice to Sellers and during Sellers' usual business hours, examine or have Buyer's independent public accountants examine Sellers' books and records related to any invoice delivered pursuant to Section 2.2 and Section 2.4. Buyer may, in good faith, dispute amounts invoiced under Section 2.2 and Section 2.4 by paying such invoice and thereafter raising the dispute after the Closing Date and within one hundred twenty (120) days after the Closing Date or, in the case of invoices provided pursuant to the third or fourth sentence of Section 2.2(d), the receipt of such invoice. In the event that Buyer disputes any invoiced amount, Buyer shall notify Seller in writing that Buyer disputes the accuracy or appropriateness of such invoiced amount and specify the particular respects by balance sheet line item in which Buyer believes that such invoiced amount is inaccurate or inappropriate. The parties shall negotiate in good faith to resolve any such dispute and shall exchange any documentation reasonably required to assist in such resolution. If Sellers agree with Buyer that the results of Buyer's review of such invoices properly indicates that that Buyer has been overcharged (net of any undercharges disclosed by such examination), Sellers shall pay Buyer the amount of the net overcharge, plus interest at the Interest Rate between the date of payment and thirty (30) days prior to the date of payment of the overcharge. In the event Sellers do not agree with Buyer's calculation, the parties shall negotiate in good faith to resolve any such dispute and shall exchange any documentation reasonably required to assist in such resolution. In the event that the parties cannot agree on the proper amount of the disputed calculation, the parties agree to select a mutually acceptable firm of nationally recognized independent public accountants to determine disputed amounts. If the parties cannot agree on an acceptable firm, each party shall submit the name of its independent public accountant, who shall mutually select the nationally recognized independent public accountants to resolve the dispute. (The firm chosen by the parties or their representatives to resolve the dispute shall be referred to herein as the "Accountants"). The parties agree to submit disputed items to the Accountants, pursuant to procedures established by the Accountants, whose determination shall be binding on the parties. In the event that the amount in the aggregate invoiced to Buyer exceeds by ten percent (10%) or more the amount owed to Sellers in the aggregate, as finally determined by the Accountant, the Sellers shall bear the cost of the review and determination by the Accountant. In all other cases, Buyer shall bear such costs. 2.3 TRANSFER TAXES. All sales tax and assignment or transfer fees and taxes (exclusive of federal or state taxes on or measured by income) payable in connection with the transactions contemplated hereby shall be paid one-half by Sellers and one-half by Buyer. 10 2.4. ADDITIONAL COSTS. If the Closing occurs after manufacture of commercial Enbrel at the Facility has begun, and Greenwich or a Seller has incurred costs associated with such manufacture prior to the Closing, and such costs cannot, in Sellers' opinion, be included within the book value of the Net Assets payable by Buyer hereunder in accordance with GAAP, such costs shall nevertheless be deemed to be included within Net Assets payable by Buyer in accordance with the terms hereof. Buyer shall have the dispute and audit rights set forth in Section 2.2(e) with respect to any such costs. ARTICLE III. CLOSING 3.1. THE CLOSING. Unless this Agreement shall have been terminated in accordance with the terms hereof, on the terms and subject to the conditions of this Agreement, the closing of the sale and purchase of the Shares and the Assets and the consummation of the other transactions contemplated hereby (the "Closing") shall take place at the offices of American Home Products Corporation, Five Giralda Farms, Madison, New Jersey 07940 on (a) the later of (i) January 3, 2002 (it being understood that the parties intend to work together to have the Closing deemed effective January 1, 2002); or (ii) the next succeeding business day on which the last to be fulfilled or waived of the conditions set forth in Article 9 shall be fulfilled or waived in accordance with this Agreement or (b) at such other time, date or place as the parties may mutually agree upon in writing (the "Closing Date"). At the Closing, the parties to this Agreement will exchange funds, certificates and other documents specified in this Agreement. For purposes of this Agreement, the Closing will be treated as if it occurred at 12:01 a.m. on the Closing Date. 3.2. DELIVERIES BY BUYER At the Closing, Buyer shall deliver, or cause to be delivered, to Sellers the following: (a) the amounts specified in Sections 2.1 and 2.2 hereof, respectively, to be paid at Closing, payable by wire transfer of immediately available funds on the Closing Date to an account specified in writing by Sellers, with such notice of such account to be delivered to Buyer no less than two (2) business days prior to the Closing Date; (b) the certificate by an officer of Buyer required to be delivered pursuant to Section 9.2(c) hereof; (c) a certificate, signed by an authorized officer of Buyer, certifying (i) 11 Buyer's due organization and the fact that Buyer is current in payment of its franchise taxes, (ii) the corporate resolutions of Buyer authorizing the transactions contemplated by this Agreement, and (iii) the incumbency of officers of Buyer executing this Agreement and the other agreements, instruments or certificates delivered upon the Closing; and (d) such other instruments and documents, in form and substance reasonably acceptable to Buyer and Sellers, as may be reasonably necessary to effect the Closing. 3.3. DELIVERIES BY SELLERS. At the Closing, Sellers shall deliver to Buyer the following: (a) certificates representing the Shares duly endorsed for transfer to Buyer or accompanied by stock powers duly executed in blank; (b) the certificate by officers of Sellers required to be delivered pursuant to Section 9.3(c) hereof; (c) a certificate, signed by authorized officers of Sellers, certifying (i) the due organization and good standing of Sellers, (ii) the corporate resolutions of Sellers authorizing the transactions contemplated by this Agreement, and (iii) the incumbency of officers of Sellers executing this Agreement and the other agreements, instruments or certificates delivered upon the Closing; (d) the stock books, stock ledgers, minute books and corporate seals of Greenwich; (e) all consents and approvals of third parties (including Governmental Agencies) that are required to transfer the Shares; (f) a Foreign Investment in Real Property Tax Act Affidavit pursuant to Section 1445(b)(2) of the Code duly executed by Holdings, which affidavit shall indicate that no federal withholding shall be required; (g) such other instruments and documents, in form and substance reasonably acceptable to Buyer and Sellers, as may be reasonably necessary to effect the Closing; and (h) letters of resignation executed by the directors and officers of Greenwich. 3.4. FURTHER ASSURANCES. From time to time, at Buyer's or Sellers' request, whether at or after the Closing Date, Buyer or Sellers, as the case may be, shall execute and deliver such further instruments of conveyance, transfer and assignment, cooperate and assist in providing information for making and completing regulatory filings, and take such other actions as Buyer or Sellers, as the case 12 may be, may reasonably require of the other party to more effectively assign, convey and transfer to such party the Shares, as contemplated by this Agreement. ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLERS Sellers hereby represent and warrant to Buyer as follows (except to the extent that any representations or warranties are affected by conduct of Buyer, its employees, agents or advisors, and Sellers are not aware of such conduct): 4.1 ORGANIZATION. (a) Greenwich is a corporation duly organized, validly existing and in good standing under the laws of Delaware. Greenwich has the requisite corporate power and authority to own, operate or lease the properties that it purports to own, operate or lease and to carry on its business as it is now being conducted and is duly licensed or qualified as a foreign corporation and is in good standing in each domestic or foreign jurisdiction in which the nature of the business conducted by it or the character or location of the properties owned or leased by it makes such licensing or qualification necessary. (b) Each of Sellers is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. (c) Holdings is not, and as of the Closing shall not be, a "foreign person" as defined in Section 1445 of the Code and any related regulations. 4.2. CAPITALIZATION OF GREENWICH. The authorized and issued capital stock of Greenwich consists of one thousand (1,000) shares of common stock, no par value per share, all of which are validly issued, outstanding, fully paid and non-assessable. All of the Shares are owned by Holdings, free and clear of any security interests, liens, claims, pledges, rights of first refusal or other encumbrances of any nature whatsoever. There are no outstanding rights of first refusal or offer, preemptive rights, options, warrants, conversion rights, stock purchase rights or other agreements, either directly or indirectly, for the purchase or acquisition from Greenwich or the Sellers of any securities of Greenwich. Greenwich is not a party or subject to any agreement or understanding and, to the knowledge of Greenwich or the Sellers, there is no agreement or understanding between any Persons that affects or relates to the voting or giving of written consents with respect to any securities of Greenwich or the voting by any director of Greenwich. 4.3. CORPORATE AUTHORITY. Each of the Sellers has the full corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by Sellers of the Agreement have been duly authorized by all requisite corporate action of Sellers. This Agreement has been duly 13 executed and delivered by Sellers, and (assuming due execution and delivery by Buyer) this Agreement constitutes a valid and binding obligation of Sellers, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles. 4.4. NO VIOLATION. Except as disclosed in Section 4.4 of the Disclosure Schedule, the execution, delivery and performance by Sellers of this Agreement do not and will not contravene or conflict with (a) in any material respect any Applicable Laws (assuming compliance with the applicable requirements of the HSR Act), (b) the articles or certificate of incorporation or by-laws of Sellers or Greenwich, (c) in any material respect any mortgage, deed of trust, lease, note, contract, agreement, bond, indenture, license, permit, or trust to which Sellers or Greenwich are or any one of them is a party, or (d) in any material respect, any judgment, order, writ, injunction, consent decree or decree of any court, Governmental Authority, administrative agency or arbitrator to which Sellers or Greenwich are or any one of them is a party; that in any case would prevent or be violated by or under which there would be a default as a result of, the execution, delivery and performance by either of the Sellers of this Agreement and the consummation of the transactions contemplated hereby. Except as disclosed in Section 4.4 of the Disclosure Schedule, and assuming material compliance with any applicable requirements of the HSR Act, no material consent, approval, or authorization of or declaration or filing with any Person or Governmental Agency is required for the valid execution, delivery and performance by Sellers of the Agreement and the consummation by Sellers of the transactions contemplated hereby. 4.5 LITIGATION. Except as disclosed in Section 4.5 of the Disclosure Schedule attached hereto, as of the date hereof, there is no in rem proceeding with respect to the Assets or any action, suit, dispute or governmental, administrative, arbitration or regulatory proceeding pending or, to Sellers' knowledge, threatened against Greenwich. 4.6. FINANCIAL STATEMENTS; ABSENCE OF CERTAIN CHANGES OR EVENTS. (a) Sellers and Greenwich have delivered to Buyer (a) unaudited balance sheets of Greenwich as of December 31, 2000 and (b) an unaudited balance sheet of Greenwich as of September 30, 2001. All the foregoing financial statements are herein referred to as the "Greenwich Balance Sheets." The account balances (assets and liabilities) of the Greenwich Balance Sheets have been determined in accordance with GAAP on a basis consistent with Sellers' accounting practices for capital projects and fairly present the Net Assets of Greenwich as of the dates indicated. All of the assets primarily related to the Project and the Facility are assets of Greenwich and not of Seller, or any other Affiliate of Seller. Greenwich has no liabilities or obligations of any nature (absolute, contingent or otherwise) that are required by GAAP to be included in the Greenwich Balance Sheet and that are not fully reflected or reserved against therein, except liabilities or obligations incurred since the date of the Greenwich Balance Sheet in 14 the ordinary course of business. Greenwich is not a guarantor, indemnitor, surety or other obligor of any indebtedness for borrowed money of any other Person. (b) Except for transactions specifically contemplated in this Agreement, since September 30, 2001 and except for actions taken in the ordinary course of business, neither Greenwich nor any of its officers or directors in their representative capacities on behalf of Greenwich have: (i) taken any action or entered into or agreed to enter into any transaction, agreement or commitment other than in the ordinary course of business; (ii) granted any increase in the compensation of employees; (iii) suffered any change having a Material Adverse Effect; (iv) borrowed or agreed to borrow any funds except intercompany transactions; (v) except to the extent related to the construction of the Facility, purchased or sold, transferred or otherwise disposed of any of its material properties or Assets (real, personal or mixed, tangible or intangible); (vi) made any change in accounting methods or practices or internal control procedure; (vii) issued any capital stock or other securities; or (viii) agreed, whether in writing or otherwise, to take any action described in this Section 4.6 (b). 4.7. TITLE TO PROPERTIES; ABSENCE OF LIENS. (a) Section 4.7 of the Disclosure Schedule lists all Real Property and includes a legal description thereof. Greenwich represents and warrants that it (1) has fee simple title to the Real Property and (2) has good title to all of the Personal Property, in the case of clauses (1) and (2), free and clear of any Encumbrances, except for the following, which are referred to collectively as "Permitted Encumbrances": (i) Encumbrances set forth in Section 4.7(a) of the Disclosure Schedule; (ii) Encumbrances of record; (iii) Encumbrances related to the Phase B construction project or otherwise caused by Buyer; 15 (iv) Encumbrances for taxes, assessments or governmental charges (including, without limitation, any assessments relating to the Real Property), or mechanics', workmen's, materialmen's or similar liens, in each case that are (A) not delinquent or (B) which are being contested in good faith and are listed on Section 4.7(a)(iii) of the Disclosure Schedule. (v) Encumbrances that are reflected in the following: Title Policy No. 5312-669278 dated September 27, 1999 issued by Fidelity National Title Insurance Company of New York; and (vi) Encumbrances that an accurate survey of the Real Property would disclose; provided, however, that any such Encumbrance described in this clause (vi) shall not constitute a Permitted Encumbrance if (x) such Encumbrance is not shown or disclosed on that survey of the Real Property entitled "Plan of Land in West Greenwich and Coventry Rhode Island surveyed for American Home Products Corporation by Marrier Surveying Inc. August 1999" and (y) such Encumbrance has or would reasonably be expected to have, a Material Adverse Effect. Greenwich has no leasehold interest in any real property related to the Facility nor has Greenwich leased (as lessor) or pledged all or any part of the Assets, except in connection with the Phase B Ground Lease, License and Indemnity Agreement, Easement Agreement and the EDC Ground Lease. (b) The Real Property contains approximately seventy-three (73) acres and the Facility on the Real Property contains a total of at least two hundred thousand (200,000) square feet of floor area. To Sellers' knowledge, except as shown in a survey referred to in Section (a) above, all buildings, structures and other material improvements, including, but not limited to, any driveways, garages, parking areas and stalls, fences, overhangs, storage, docking and loading areas, landscaped areas and sewer systems, and all means of access to the Real Property are located completely within the boundary lines of the Real Property and do not encroach upon or under the property of any other Person in any material respect. Except as disclosed in Section 4.7(b) of the Disclosure Schedule, no improvements constructed on the property of any other Person encroaches upon or under the Real Property in a manner that would be reasonably likely to cause a Material Adverse Effect. To Sellers' knowledge, except as shown on the survey referred to in Section 4.7(a) above, there is no other Person or any property of any other Person that encroaches upon the Real Property such that any such encroachments, either alone or in the aggregate, would be reasonably likely to have a Material Adverse Effect. The Real Property abuts a public way or a private way to which the Buyer shall have both pedestrian and vehicular access and such private way is duly laid out or accepted as such by the city or town in which the Real Property is located. (c) Upon consummation of the transactions contemplated hereby, Buyer, by purchasing the Shares, will have acquired fee simple title to the Real Property, the Personal Property, and all other Assets owned by Greenwich free and clear of all 16 Encumbrances other than Permitted Encumbrances (and other than Encumbrances or other defects in title attributable to facts or circumstances related to, or actions taken by, Buyer). 4.8. CONDITION OF PHYSICAL ASSETS; INTELLECTUAL PROPERTY. (a) Except as disclosed in Section 4.8 of the Disclosure Schedule, to Sellers' knowledge, the buildings, structures, and improvements on the Real Property (including the Facility) and the Personal Property (in the aggregate) are in good working order, normal wear and tear excepted, taking into account that the Facility remains under construction and no representation is being given as to the operational effectiveness of the Facility. No costs referred to in Section 2.4 have been incurred to date, and assuming a Closing of January 3, 2001, no such costs are reasonably foreseeable prior to Closing. (b) Greenwich does not own any registered trademarks, tradenames, copyrights or patents, nor does a Seller own any such intellectual property rights primarily related to the Assets. 4.9. EMPLOYEE MATTERS. (a) Section 4.9(a) of the Disclosure Schedule sets forth the name, title and present salary of each present employee of Greenwich listed on the payroll for the Facility as of the date hereof ("Facility Employees"). Except as set forth in Section 4.9(a) of the Disclosure Schedule, neither Greenwich nor Sellers are a party to or bound by any collective bargaining or other labor agreement with respect to the Facility Employees, and there are no labor unions or other organizations representing or, to the knowledge of the Sellers, purporting to represent or attempting to represent, any Facility Employees. (b) Neither the Sellers nor any of their Affiliates are currently required to contribute to any Multiemployer Plan, nor have they been assessed liability for any Multiemployer Plan. The Sellers are not subject to and do no reasonably expect to incur any withdrawal liability under Title IV of ERISA which Sellers or their Affiliates will not be able to satisfy. (c) Sellers maintain the Sellers' Savings Plan which is intended to be tax-qualified under Section 401(a) of the Code (and the trust related thereto) and such Plan is intended to be tax exempt under Section 501(a) of the Code. The Sellers' Savings Plan has a favorable determination letter from the Internal Revenue Service covering the Tax Reform Act of 1986 and, to the knowledge of Sellers, such letter has not been revoked nor has such Plan been amended in any respect or any actions taken or operational defects occurred since the receipt of such letter which would result in the disqualification of Sellers' Savings Plan by the Internal Revenue Service. (d) Except for any routine contributions owed by Greenwich on behalf of the Transferred Employees to one or more of Sellers' Employee Benefit Plans for a period preceding the Closing Date, and except as set forth in Article VIII, Buyer shall not incur any liability with respect to the Sellers' Employee Benefit Plans as a result of (i) the 17 Transferred Employees' cessation of participation in such Sellers' Employee Benefit Plans on the Closing Date, (ii) any claims under such Sellers' Employee Benefit Plans arising on, prior to, or after the Closing Date, (iii) any failure by the Sellers, Greenwich, any ERISA Affiliate of a Seller or Greenwich, or any third party to comply with any provision of ERISA or the Code or any other Applicable Law; or (iv) the imposition of any term under a Sellers' Employee Benefit Plan which is triggered by the consummation of the transactions described in this Agreement. 4.10. COMPLIANCE WITH LAW. Except as disclosed in Section 4.10 of the Disclosure Schedule attached hereto, (a) the operation of the Facility is being conducted in compliance with, and the Real Property and all Assets comply with all Applicable Laws, as of the date hereof, except for violations, if any, which singly or in the aggregate have not had, and would not reasonably be expected to have, a Material Adverse Effect, (b) to the knowledge of Sellers, the operation of the Facility has been conducted in compliance with, and the Real Property and all Assets have complied with, all Applicable Laws, from September 24, 1999 up to the date hereof, except for violations, if any, which singly or in the aggregate have not had, and would not reasonably be expected to have, a Material Adverse Effect. Except as disclosed in Section 4.10 of the Disclosure Schedule, all Applicable Permits required in connection with the operation of the Facility as currently operated, have been obtained and are in full force and effect and are being complied with in all material respects, except for such failures which singly or in the aggregate have not had, and would not reasonably be expected to have, a Material Adverse Effect. 4.11. CONTRACTS AND COMMITMENTS. (a) Section 4.11(a) of the Disclosure Schedule attached hereto sets forth a complete and accurate list of each contract, agreement, understanding, arrangement or commitment relating to the Facility or the Assets outstanding as of the date hereof to which Sellers or Greenwich is a party and which: (i) imposes a right of first refusal, option or other restriction with respect to any Asset; or (ii) is or contains a lease, license (other than software, shrinkwrap licenses), joint venture agreement, partnership agreement or similar contract or arrangement, or confidentiality agreement; (iii) is or contains a non-competition agreement or other agreement which limits the freedom of Sellers or Greenwich to own, operate, sell, transfer, pledge, or otherwise dispose of or encumber any Asset or that would bind any other assets of Buyer now or in the future; (iv) is a contract involving more than $100,000 in payments or receipts annually, except for purchase orders entered into in connection with the construction of the Facility or entered into in the ordinary course of business; or (v) is a contract that guarantees any indebtedness of any other Person in excess of $100,000 in the aggregate. 18 The contracts, agreements, understandings, arrangements, and commitments set forth on Section 4.11(a) of the Disclosure Schedule are hereinafter collectively referred to as the "Material Contracts". (b) Each Material Contract is a valid and binding agreement of Sellers or Greenwich, as the case may be. There is no material default by the Sellers or Greenwich or, to the knowledge of the Sellers, by any third party, under any Material Contract. A true and complete copy of each Material Contract will be made available to Buyer and as of the Closing will have been made available to Buyer. 4.12. BROKERS AND INTERMEDIARIES. Neither the Sellers nor their Affiliates or any of them has employed or dealt with any broker or finder in connection with the transactions contemplated by this Agreement which would be entitled to a broker's or finder's, or similar fee or commission in connection therewith or upon the consummation thereof. 4.13. LICENSES AND PERMITS. Section 4.13 of the Disclosure Schedule attached hereto correctly describes each material Applicable Permit, together with the name of the Governmental Authority issuing such license or permit (the "Material Permits"). Except as set forth in Section 4.13 of the Disclosure Schedule, to Sellers' knowledge, such Material Permits are valid and in full force and effect. 4.14. ENVIRONMENTAL MATTERS. To the knowledge of Sellers, each of the representations and warranties set forth in subsections (a) through (e) of this Section 4.14 is true and correct with respect to the Assets, except to the extent that the facts and circumstances giving rise to any such failure to be so true and correct would not reasonably be expected to have a Material Adverse Effect. (a) Except as set forth in Section 4.14(a) of the Disclosure Schedule, no Hazardous Materials are present in, on, or under the Real Property, including, without limitation, the soil and groundwater thereunder; (b) Except as set forth in Section 4.14(b) of the Disclosure Schedule, the Real Property and all operations and facilities at the Real Property as operated since September 24, 1999 have been in compliance in all material respects with all Environmental Laws, and all governmental approvals, Applicable Permits and licenses required under Environmental Laws for the Real Property and all operations and facilities of the Real Property as operated since September 24, 1999 have been obtained and are in full force and effect and are being complied with in all material respects; (c) Except as set forth in Section 4.14 (c) of the Disclosure Schedule, neither the Sellers, Greenwich nor any of their Affiliates have received any written governmental complaint, notice of violation, alleged violation, or investigation or notice of potential liability or of potential responsibility regarding environmental protection matters or permit compliance with regard to the Real Property which either singly or in the aggregate would constitute a Material Adverse Effect; 19 (d) Except as set forth in Section 4.14(d) of the Disclosure Schedule, Hazardous Materials have not been generated, stored, transported, treated or disposed of on the Real Property or transferred from the Real Property to any other location except in compliance in all material respects with all Environmental Laws in effect at the time of such activities, and (e) Except as set forth in Section 4.14(e) of the Disclosure Schedule, since September 24, 1999 there have been no governmental, administrative actions or judicial proceedings pending or threatened under any Environmental Laws to which the Sellers or Greenwich are named or to be named as a party with respect to the Real Property or any Hazardous Materials transferred from the Real Property, nor have there been any consent decrees or other decrees, consent orders, administrative orders or other orders, under any Environmental Law with respect to any of the Real Property. Anything in this Agreement to the contrary notwithstanding, this Section 4.14 and Section 4.5 hereof shall be the exclusive representation and warranty of Sellers under this Agreement relating to environmental matters. 4.15. TAXES. (a) On or prior to the date hereof, Sellers and Greenwich have properly completed and filed on a timely basis and in the correct form all Returns with respect to Greenwich or the Assets required to be filed on or prior to the date hereof (taking into account any extensions) that a reasonable person would deem material. As of the time of filing, the foregoing Returns correctly reflected, in all respects that a reasonable person would deem material, the facts regarding income, business, assets, operations, activities, status or other matters therein or any other information required to be shown thereon. In particular, and without in any manner limiting the foregoing, none of the foregoing Returns contains any position which is or would subject Greenwich, a Seller, or Buyer to penalties under section 6662 of the Code (or any corresponding provision of state, local or foreign tax law). (b) With respect to all amounts in respect of Taxes imposed upon Greenwich, or for which Sellers or Greenwich are or could be liable related to the Assets, with respect to all taxable periods (or portions thereof) ending on or before the Signing or the Closing Date, as applicable, all material applicable tax laws and agreements have been fully complied with, and all such amounts required to be paid to taxing authorities or others on or before the date hereof have been fully and timely paid. (c) Except as set forth on Section 4.15(c) of the Disclosure Schedule, (i) other than with respect to Returns for which AHP files on a consolidated, combined or unitary basis, no issues have been raised (and are currently pending) by any taxing authority in connection with any Returns of Greenwich or Sellers related to the Assets, (ii) other than with respect to Returns for which AHP files on a consolidated, combined or unitary basis, no extensions or waivers of statutes of limitation with respect to any Returns of Greenwich or Sellers related to the Assets have been given by or requested by Greenwich 20 or Sellers, and (iii) there are no liens for Taxes (other than Permitted Encumbrances) upon the Assets. 4.16. DISCLAIMER. Except as expressly set forth in this Agreement, SELLERS MAKE NO REPRESENTATIONS OR WARRANTIES (WHETHER EXPRESS OR IMPLIED) OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE OR OTHERWISE IN REGARD TO THE ASSETS. 4.17. DISCLOSURE IN SCHEDULES. Any disclosure contained in any section of the Disclosure Schedule to this Agreement shall, should the disclosure be relevant to any other section of the Disclosure Schedule to this Agreement, be deemed to be disclosed with respect to that other Schedule to the Agreement where such disclosure and its significance would be reasonably obvious to the party to whom the disclosure is made. Certain information set forth in the Schedules is included solely for informational purposes and may not be required to be disclosed pursuant to this Agreement. The disclosure of any information shall not be deemed to constitute an acknowledgment that such information is required to be disclosed in connection with the representations and warranties made by Sellers in this Agreement or is material, nor shall such information be deemed to establish a standard of materiality. ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents and warrants to Sellers that: 5.1. ORGANIZATION. Buyer is a corporation duly organized and validly existing under the laws of the State of Washington and has paid all excise taxes required by the Washington Department of Revenue. 5.2. CORPORATE AUTHORITY. Buyer has full corporate power and authority to enter into the Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance by Buyer of this Agreement have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due execution and delivery by Sellers) this Agreement constitutes a valid and binding obligation of Buyer, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally or by general equitable principles. 5.3. NO VIOLATION. The execution, delivery and performance by Buyer of this Agreement do not and will not contravene or conflict with: (a) assuming compliance with the applicable requirements of the HSR Act, in any material respect, any Applicable Laws; (b) the articles or certificate of incorporation or by-laws of Buyer; 21 (c) in any material respect, any mortgage, deed of trust, lease, note, contract, agreement, bond, indenture, license, permit or trust to which Buyer or any of its Affiliates is a party; or (d) in any material respect, any judgment, order, writ, injunction or decree of any court, governmental body, Governmental Authority, or arbitrator, to which Buyer or any of its Affiliates is a party, that, in any case, would prevent or be violated by, or under which there would be a default as a result of, the execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby. Assuming compliance with any applicable requirements of the HSR Act, no material consent, approval or authorization of or declaration or filing with any Person or Governmental Authority is required for the valid execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby. 5.4. FINANCIAL ABILITY TO PERFORM. As of the Closing Date, the Buyer will have sufficient funds to pay the Purchase Price on the terms and conditions contemplated by this Agreement. The Buyer acknowledges and agrees that the Buyer's performance of its obligations under this Agreement is not in any way contingent upon the availability of financing to the Buyer. 5.5. BROKERS AND INTERMEDIARIES. Neither the Buyer nor its Affiliates or any of them has employed any broker or finder in connection with the transactions contemplated by this Agreement which would be entitled to a broker's or finder's, or similar fee or commission in connection therewith or upon the consummation thereof. 5.6 DUE DILIGENCE. Prior to the Closing, Sellers and Greenwich shall afford to Buyer, its employees, accountants, counsel and other representatives full access to (a) all of the Assets, books, Contracts, commitments, records and other document of Greenwich, and (b) all books, contracts, commitments, records and other documents of Sellers that are reasonably necessary for Buyer to evaluate and undertake the transaction contemplated by this Agreement. Sellers and Greenwich shall, prior to Closing, furnish promptly to Buyer all other information concerning the business, Assets, records and Facility Employees as Buyer may reasonably request for such purpose. In connection with such due diligence, as well as Buyer's participation in the operation of the Steering Committee and its management of the Assets (including the Facility) Buyer will, as of Closing, have performed a comprehensive due diligence investigation of the Assets and obtained a thorough understanding of the operation of the Assets. In the course of these activities, nothing has come to the attention of Buyer as of the Signing (that Sellers do not have actual knowledge of) that there is a material inaccuracy in any representation or warranty of Sellers contained herein and Buyer shall disclose to Sellers any such findings between Signing and Closing (that Sellers do not have actual knowledge of). Provided that Buyer has not breached the representation and warranty set forth above in this Section 5.6, no investigation conducted pursuant to this Section 5.6 or prior to the Closing shall be deemed to modify any representation or warranty made by Sellers or Greenwich herein or any obligation of Sellers or Greenwich hereunder. 22 ARTICLE VI CONDUCT OF BUSINESS PENDING THE CLOSING 6.1. OPERATION OF FACILITY PRIOR TO THE CLOSING DATE. Sellers agree that, between the date hereof and the Closing, except as (i) contemplated by this Agreement, (ii) permitted by the prior consent of Buyer or as permitted pursuant to Section 6.2 hereof, (iii) a result of actions directly or indirectly under the authority or supervision of the Site Manger so long as the Site Manager is an employee of Buyer or its Affiliates, or (iv) pursuant to the approval or instructions of the Steering Committee: (a) Sellers shall cause Greenwich to use commercially reasonable efforts to maintain the Assets in their as-is condition, reasonable wear and tear excepted (it being understood that the facility is under ongoing construction). Sellers shall cause Greenwich to continue the construction of the facility in the ordinary course of business. (b) Sellers shall cause Greenwich to operate the Facility in compliance with all Applicable Laws in all material respects. (c) Sellers shall cause Greenwich not to do the following except in the ordinary course of business: (i) enter into a legally binding commitment to sell, transfer, pledge or lease (as lessor) any asset that is or would be, had such asset not been sold or transferred, an Asset (or commit to do any of the foregoing) if such asset had a fair market value in excess of One Million Dollars ($1,000,000); (ii) impose or permit to be imposed any Encumbrances, other than Permitted Encumbrances, upon the Shares or any of the Assets; (iii) make any change in the amount of salary or other compensation of any Facility Employee; (iv) Enter into any employment or severance agreement with any Facility Employee, or enter into any collective bargaining agreements or arrangements for the benefit of Facility Employees, except as may be required pursuant to existing agreements or Applicable Law; (v) amend or otherwise change Greenwich's certificate of incorporation or by-laws; (vi) issue, sell, contract to issue or sell, pledge, dispose of, grant, encumber or authorize the issuance, sale, pledge, disposition, grant or Encumbrance of (i) any shares of capital stock of Greenwich, or (ii) any options, 23 warrants, convertible securities or other rights of any kind to acquire any shares of such capital stock, or any other ownership interest (including, without limitation, any phantom interest) of Greenwich; (vii) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire, directly or indirectly, any of Greenwich's capital stock or other securities; (viii) acquire (including, without limitation, by merger, consolidation, or acquisition of stock or assets) any corporation, partnership, other business organization or division thereof or any material amount of assets not related to the ongoing construction of the Facility; (ix) incur any indebtedness for borrowed money or issue any debt securities or guarantee the payment obligations for borrowed money of any third party Person,; (x) take any action, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting methods, policies or procedures (including, without limitation, procedures with respect to the payment of accounts payable and collection of accounts receivable); (xi) make any Tax election or settle or compromise any Tax liability; (xii) enter into any contract not related to the Project or the Facility, except any contract entered into in the ordinary course of business and consistent with past practice; (xiii) authorize any single capital expenditure by Greenwich not related to the Project or the Facility which is in excess of one hundred thousand dollars ($100,000) or capital expenditures not related to the Project or the Facility which are, in the aggregate, in excess of five hundred thousand dollars ($500,000); (xiv) agree to do any of the foregoing in this Section 6.1(c). 6.2. PERMITTED ACTIONS. (a) Between the date hereof and the Closing Date, Buyer and Sellers, together with their respective Affiliates, shall retrofit Suite A of the Facility to accommodate the commercial manufacture of Enbrel, to perform the initial validation runs for Enbrel and to commence commercial production of Enbrel. Further, the parties have determined that, in lieu of building out Suite A-3, they will undertake the "Greenwich Project", pursuant to which Greenwich shall construct the administration building and parking facility planned to be located on the Real Property. (The retrofit of Suite A and the Greenwich Project are hereinafter collectively referred to as the "Project".) The Project shall be 24 overseen by a Steering Committee, whose objective is to recognize and utilize the strengths and competencies of each party to perform the Project. All costs incurred by Sellers or Greenwich in performing their obligations under this Section 6.2(a) shall be reflected in the book value of the Net Assets even if not appropriate under GAAP to be included because such Greenwich Project is discontinued at the direction of the Steering Committee or the Buyer. (b) If not formed before the Signing, a Steering Committee shall be formed following the date hereof, which shall have six (6) members, with Buyer and Sellers each having the right to appoint three (3) members (the "Steering Committee"). The Steering Committee shall oversee the Project through the Closing Date and shall have the following powers and duties: (i) The Steering Committee shall approve an annual budget for the Facility, including a capital budget; (ii) the Steering Committee shall approve in advance any capital expenditures by any third party or by Sellers associated with the fill and finish of bulk drug substance Enbrel manufactured at the Facility; (iii) the Steering Committee shall meet on at least a quarterly basis or more frequently as necessary, and decisions of the Steering Committee shall be made by consensus. The Steering Committee shall endeavor to reach a consensus on all matters within its authority which are in dispute within a period of ten (10) days after receiving notification from either Buyer or Sellers that such dispute has been referred to the Steering Committee for resolution. If such a resolution cannot be reached in that time period (or earlier at the election of either party), the matter shall be referred to the Chief Operating Officer of Buyer and the President of AHP's Wyeth-Ayerst Division, or their designees, for resolution in a period of ten (10) days (or such other time period agreed by the parties) through good faith discussions, or if still unresolved, the parties shall endeavor in good faith to promptly agree upon a binding third party dispute resolution mechanism intended promptly and fairly to resolve the matter in dispute. (iv) The Steering Committee shall be disbanded upon the Closing Date. (c) Sellers shall be permitted to cause Greenwich to transfer to Holdings by way of a distribution or otherwise all cash and cash equivalents held by Greenwich from time to time up to and including the Closing Date. In the event all such cash or cash equivalents are not transferred to Sellers at Closing, Sellers shall include such cash or cash equivalents in the invoice to be provided by Sellers to Buyer as soon as practicable 25 after the Closing, pursuant to Section 2.2(c) of this Agreement. (d) Buyer may perform or have performed a construction cost audit of the Project. Sellers shall pay the costs of any such audit that occurs prior to Closing and include such cost in the book value of the Net Assets whether or not appropriate under GAAP to be included. (e) Buyer may perform or have performed a cost segregation analysis and state tax analysis of the Project. Sellers shall pay the costs of any such analyses that occur prior to Closing and include such costs in the book value of the Net Assets. (f) Buyer may take actions prior to Closing in order to facilitate the smooth transition of ownership and operation of Greenwich Holdings to Buyer. Such actions may include, but are not limited to, hiring of support and administrative staff and implementation of systems and processes consistent with those of Buyer. Any costs of such actions that are incurred by Sellers prior to Closing shall be included in the book value of the Net Assets whether or not appropriate under GAAP to be included. 6.3. ACCOUNTING RECORDS. The accounting records supporting all expenditures of Greenwich shall include a classification of expenditures into the following categories: (a) Construction and make-ready Costs; (such costs shall further be supported by detailed listing of individual assets and related costs); (b) Facility testing costs (including all costs to test and validate the manufacturing processes and systems including the costs of performing the test production runs); (c) FDA filing costs (including all costs of preparing and filing the facility license application with the FDA); (d) FDA conformance runs (the cost of producing the lots of Enbrel that will be used to support the FDA filing); (e) Catalytica Facility validation costs; and (f) Start-up and operating costs (all costs incurred following completion of the FDA conformance runs). 26 ARTICLE VII ADDITIONAL AGREEMENTS 7.1. ANCILLARY AGREEMENTS. Simultaneous with the Signing, AHP and Buyer will enter into the Collaboration Agreement, the Technology Transfer Agreement, [*]. Between Signing and Closing, it is anticipated that a Seller and Buyer will enter into a transition services agreement for certain services related to the operation of the Facility. 7.2 ACCESS TO INFORMATION AND CONFIDENTIALITY. (a) During the period commencing on the date hereof and continuing through the Closing Date and, provided that the Closing occurs, for a period of at least six (6) years after the Closing Date or, with respect to any Taxes, the applicable statute of limitations, with respect to books and records reasonably deemed by Sellers to be necessary in connection with (i) the preparation or examination of Tax Returns, (ii) the Excluded Assets and Liabilities, and (iii) financial reporting, Buyer shall afford to the Sellers and to Sellers' accountants, counsel, and other representatives, reasonable access to all of the Assets, books, Contracts, commitments, records, facilities, technical and personnel information, and, during such period, shall furnish reasonably promptly to Sellers all documents and information concerning the Assets and Transferred Employees as Sellers may reasonably request; provided that the above activities do not interfere unreasonably with the conduct of the business of Buyer and provided further that Buyer shall not be required to disclose any documents or information related to Transferred Employees that would violate any Applicable Law. (b) Any information that Buyer discloses to Sellers, or to which Sellers have access, as a result of Section 7.2(a) above shall be deemed "Buyer Confidential Information" if such information (i) is designated as "Confidential" in writing at the time of any written disclosure or (ii) even if not so identified as "Confidential", would reasonably be identified or understood by Sellers as the confidential or proprietary information of Buyer. Buyer Confidential Information shall not, however, include: (1) information which was already known by the Sellers at the time of its disclosure hereunder, as evidenced by Sellers' written records; (2) information disclosed to Sellers by a third party lawfully in possession of such information and not under an obligation of nondisclosure to Buyer in respect thereof; * Confidential Treatment Requested. 27 (3) information which at the time of disclosure is or subsequently becomes patented, published or otherwise part of the public domain, except by breach of this Agreement by Sellers; (4) information developed by Sellers independently of information obtained from Buyer; or (5) information which is required to be disclosed by law, regulation or the order of a judicial or administrative authority; provided, however, that Sellers (A) give Buyer prompt written notice prior to disclosure by Sellers to permit Buyer to seek a protective order or other similar order with respect to Buyer Confidential Information, and (B) thereafter disclose only the minimum Buyer Confidential Information required to be disclosed in order to comply, whether or not a protective order or other similar order is obtained by Buyer. Unless Sellers have obtained Buyer's prior written consent, Sellers shall hold confidential all Buyer Confidential Information, shall not disclose it to any third party, and shall use it only for purposes consistent with this Agreement. The provisions of this Section 7.2(b) shall survive the expiration or termination of this Agreement or the Closing, whichever occurs first, for a period of four (4) years from the each such disclosure of Confidential Information; provided, however, that with respect to Buyer Confidential Information related to the Facility Employees, the provisions of this Section 7.2(b) shall survive indefinitely; and provided further that this Agreement shall not be deemed to alter any prior confidentiality obligations among the parties, including those related to Enbrel or the manufacture thereof. (c) During the period commencing on the Signing and continuing through the Closing Date, Sellers (i) will give and will cause Greenwich to give to Buyer, its counsel, financial advisors, auditors and other authorized representatives reasonable access to all of the offices, properties, books, records, Contracts, commitments, facilities, technical information, and personnel of Sellers or Greenwich relating to the Assets, (ii) will permit and facilitate any reasonable interview process for potential continued employment of the Facility Employees with Buyer, and (iii) will give and will cause Greenwich to give to Buyer reasonable access to Greenwich's engineering and other Facility Employees to provide planning and technical assistance related to Buyer's intended use of the Assets after the Closing as Buyer may reasonably request. 7.3 REGULATORY FILINGS. Each of the parties hereto will furnish to the other party hereto such necessary information and reasonable assistance as such other party may reasonably request in connection with its preparation of necessary filings or submissions to any Governmental Authority. Buyer and Sellers each agree to file any information required by the HSR Act as soon as reasonably practicable after the date hereof and each agrees promptly to supplement such information and promptly use commercially reasonable efforts to effect compliance with the conditions specified 28 in Article 9 hereof and shall cooperate with one another to furnish promptly to Governmental Authorities any additional information reasonably requested by them in connection with such filings. Neither party shall be required, however, to divest or outlicense products or assets or change its business or intended use of the Facility if doing so is a condition of obtaining approval under the HSR Act or other governmental approvals of the transaction contemplated by this Agreement. Each of the parties shall use commercially reasonable good faith efforts to eliminate any concerns on the part of federal or state antitrust authorities, including, without limitation, cooperating in good faith with any government investigation, including prompt production of documents and information demanded by a second request for documents and of witnesses if requested. Each party will consult and cooperate with the other party and will consider in good faith the view of the other party in connection with any analysis, appearance, presentation, memorandum, brief, opinion or proposal made or submitted in connection with any action, request or investigation under or relating to the HSR Act or any other national, federal or state antitrust, competition or fair trade law. 7.4 COMMERCIALLY REASONABLE EFFORTS. Each of the parties hereto shall use commercially reasonable efforts to fulfill or obtain the fulfillment of the conditions of the Closing, including, without limitation, the execution and delivery of all agreements contemplated hereunder to be so executed and delivered. 7.5 NOTICES OF CERTAIN EVENTS. Sellers shall promptly notify Buyer, and Buyer shall promptly notify Sellers, as the case may be, of: (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; (b) any notice or other communication from any Governmental Authority in connection with the transactions contemplated by this Agreement; and (c) any actions, suits, claims, investigations or proceedings commenced or, to the best of the notifying party's knowledge threatened against, relating to or involving or otherwise affecting Sellers, Buyer, the Shares or the Assets that, if pending on the date of this Agreement, would have been required to have been disclosed hereunder or that relate to the consummation of the transactions contemplated by this Agreement. 7.6 START-UP AND OPERATION OF THE FACILITY. During the period of Sellers' ownership of the Shares, and thereafter for such transition period as may be agreed to by the parties (which period shall not be longer than the period set forth in the Technology Transfer Agreement), a reasonable number of Buyer and Sellers and Sellers' Affiliates personnel shall be involved in all aspects of start-up and operation 29 of the Facility as are agreed by the parties, and shall also have access to all engineering, manufacturing, quality assurance, quality control, regulatory, and all other documentation related to the Facility and the Enbrel product(s) manufactured at the Facility to facilitate Sellers' and its Affiliates' knowledge and understanding of manufacturing commercial quantities of Enbrel; provided, however, that the above activities do not interfere unreasonably with the business of Buyer, and provided further that, during the term of either party's ownership of the Shares, and consistent with the terms hereunder, such party will have ultimate decision making authority with respect to day-to-day operations of the Facility. 7.7 CAPITAL IMPROVEMENT CONTRACTS. Sellers shall allow Buyer to (a) review and approve each contract entered into after the Signing involving capital improvements to the Facility which would reasonably be expected to result in payments by or on behalf of Sellers or Greenwich greater than Three Million Dollars ($3,000,000) in the aggregate, (b) review and consult with Sellers on all contracts involving the Facility and its operation of duration greater than one (1) year which would reasonably be expected to require payments by or on behalf of Sellers or Greenwich in an amount greater than Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate under such contract and (c) review and approve each contract involving the fill and finish of Enbrel produced at the Facility. Buyer shall be a party to each such contract under clause (c) of this Section 7.7, and to the extent practicable, Sellers shall name or shall cause Greenwich to name Buyer a third party beneficiary under each such contract under clauses (a) and (b) of this Section 7.7. 7.8 BUYER PERSONNEL COSTS. Technical assistance provided by Buyer to Sellers related to the Enbrel manufacturing process shall be governed by the Technology Transfer Agreement. 7.9 STAFFING. For periods prior to the Closing, and then following the Closing, Sellers and Buyers shall enter into the respective [*]. Between the Signing and the Closing Date, Buyer and Sellers shall consult with each other in good faith on all hires at or relating to the Facility for the position of manager and above and for key technical positions. Neither Sellers nor Greenwich shall hire any such prospective employee whose titles are Manager or above who is likely to become a Transferred Employee if Buyer has a good faith reasonable objection to such employee that does not violate any Applicable Law. 7.10 FACILITY USE. Buyer will have complete access to the Facility through the Closing Date, subject to standard safety and security procedures, to facilitate Buyer's participation in the Project. As * Confidential Treatment Requested. 30 between the parties, Buyer shall have the final authority with respect to decisions related to Phase B, including general timelines relating thereto, and with respect to conceptual design, basic engineering and detailed engineering. Such general timelines for Phase B shall be conducted in a manner which does not materially impact the schedule for the retrofit of Suite A. 7.11 TRANSFER OF SELLER EMPLOYEES. Buyer acknowledges that as of the Signing, there are approximately [*] of Sellers or their Affiliates working at the Facility. Such employees are not deemed to be Facility Employees, and will not be deemed to be Transferred Employees at the Closing. Notwithstanding the proceeding sentence, the parties agree that coincident with, or prior to Closing, Sellers may transfer the number of persons (having the job titles indicated) preliminarily set forth in Section 7.11(a) of the Disclosure Schedule (which such Disclosure Schedule may be updated until Closing) from the Facility to one or more of Sellers' biopharmaceutical manufacturing facilities to ensure their successful construction, start-up and operation (collectively, the "Sellers Employees"). The total number of Seller Employees shall not, under any circumstances, exceed [*] percent ([*]%) of the total number of Facility Employees at the time of the Signing. Sellers shall, not later than the Closing, provide Buyer written notice of each such Seller Employee, and in all cases, shall give Buyer at least [*] months' written notice of the transfer of each Seller Employee, in order to allow Buyer sufficient time to recruit and to train replacement personnel at the Facility; provided, however, that upon Buyer's written consent, such consent not to be unreasonably withheld, such written notice period may be shortened. Seller Employees shall not become Transferred Employees pursuant to Section 8.1(a) hereof, but shall remain or become employees of one of the Sellers or their Affiliates. Seller Employees shall remain on the payroll of Sellers and be covered by Sellers' Employee Benefit Plans and insurance coverage, including workers compensation, after the Closing. Seller Employees shall remain employed at the Facility until the earlier of the date Seller Employees are no longer needed upon mutual agreement between Buyer and Seller, or the end of the written notice period. If any Seller Employees are performing activities or services at the Facility that contribute to the operation of the Facility or the manufacture of Enbrel at the Facility, Buyer shall reimburse Seller for the full allocated costs associated with the Seller Employees after the Closing Date [*]. 7.12 ASSIGNMENT OF BUYER EMPLOYEES [*]. In addition, prior to Closing, Buyer may assign one or more of its employees to the Facility to ensure the successful transition of the business. Buyer may also, after being notified by Sellers of the identity of Seller Employees in Section 7.11, hire replacement workers. Buyer's employees assigned to work at the Facility, and replacement workers Buyer hires to work with Seller Employees prior to Closing (collectively "Buyer * Confidential Treatment Requested. 31 Transition Employees") shall remain on or be assigned to the payroll of Buyer and shall not be covered by Sellers' Employee Benefit Plans and insurance coverage, including workers compensation. If any Buyer Transition Employees are performing activities or services at the Facility that contribute to the operation of the Facility or the manufacture of Enbrel at the Facility, Sellers shall reimburse Buyer for the full allocated costs associated with the Buyer Transition Employees prior to the Closing Date [*]. 7.13 TRANSFER OF PERMITS; CONTRACTS . Before and, to the extent necessary after, the Closing, Sellers shall use, and shall cause Greenwich to use, commercially reasonable efforts to assist Buyer (without any obligation to make any payment of consideration) in effectuating transfer or reissuance of Applicable Permits required for operation of the Facility under any Environmental Laws or other Applicable Laws and Sellers shall use, and shall cause Greenwich to use, commercially reasonable efforts (without any obligation to make any payment of consideration) to obtain any necessary consents to assignment of the Contracts from Sellers or Greenwich to Buyer. 7.14 TAX MATTERS (a) AHP shall have the exclusive authority and obligation to prepare and execute on behalf of Greenwich and timely file all Returns with respect to Greenwich or the Assets for any taxable period ending on or prior to the Closing Date. Buyer shall have the exclusive authority and obligation to prepare and timely file all Returns with respect to Greenwich or the Assets for all other taxable periods. (b) AHP shall be responsible for the timely payment of all Taxes imposed on or with respect to Greenwich or the Assets for all taxable periods ending on or prior to the Closing Date, including without limitation (a) any federal income Tax liability imposed on Sellers or Greenwich resulting from the Section 338(h)(10) Election, as defined in Section 7.14(e)(i) below, and (b) any state, local, or foreign tax imposed on Sellers or Greenwich attributable to an election under the state, local or foreign law similar to the election available under Section 338(h)(10) of the Code; provided, however, that if a state, local or foreign jurisdiction does not have provisions similar to the election available under Section 338(h)(10) of the Code, Sellers shall be liable for any Tax based on income imposed on Sellers by such state, local and/or foreign jurisdiction resulting from the transaction contemplated by this Agreement. Buyer shall be responsible for the timely payment of all Taxes imposed on or with respect to Greenwich or the Assets for all other taxable periods, except to the extent otherwise expressly set forth herein. With respect to any taxable period beginning before and ending after the Closing Date (an "Overlap Period"), Taxes shall be apportioned between Sellers and Buyer as follows: (x) in the case of Taxes other than income, sales and use and withholding Taxes, on a per * Confidential Treatment Requested. 32 diem basis; and (y) in the case of income, sales and use and withholding Taxes, as determined as though the taxable period ended on the Closing Date. The parties agree to consult in good faith regarding the calculation of such Taxes and apportionment. (c) Except as otherwise provided in this Section 7.14(c), AHP shall have the exclusive authority to control any audit or examination by any taxing authority, initiate any claim for refund, amend any Return, and contest, resolve and defend against any assessment for additional Taxes, notice of tax deficiency or other adjustment of Taxes ("Tax Controversies") with respect to Greenwich or the Assets for any taxable period ending on or prior to the Closing Date. Buyer shall have the exclusive authority over Tax Controversies with respect to Greenwich or the Assets for all other taxable periods and Tax Controversies which (x) arise after the Closing Date and (y) relate to Taxes for which Buyer has paid Sellers under Article 2 hereof as Net Assets or otherwise.. Notwithstanding the foregoing, with respect to any Overlap Period and with respect to any Tax Controversies that could possibly affect the Tax liability of both (a) Buyer or its Affiliates and (b) one or more Sellers or their Affiliates): (i) no party shall, without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed, enter into any settlement of any contest or otherwise compromise any issue that affects or may affect the Tax liability of the other parties or any of their Affiliates; (ii) with respect to any Overlap Period, any additional Taxes determined to be payable and any refund of Taxes shall be apportioned as provided in Section 7.14(b) hereof; and (iii) the parties agree to consult in good faith regarding any Tax Controversies with respect to Greenwich or the Assets, including to provide each other draft copies of proposed audit adjustments and other documents with respect to Tax Controversies for review and comment. (d) Notwithstanding anything to the contrary contained in this Section 7.14, Buyer shall be liable for all Taxes (including Taxes arising from Tax Controversies) other than Income Taxes, which constitute either Facility Costs or amounts of Net Assets and shall pay such Taxes to the appropriate taxing authorities or to Sellers in accordance with the provisions of Sections 2.2 or 11.2 hereof, as the case may be. (e) Section 338(h)(10) election. (i) Sellers represent that they filed a consolidated income tax return with Greenwich for the taxable year immediately preceding the current taxable year and that Sellers are eligible to make an election under section 338(h)(10) of the Code (and any comparable 33 election under state, local or foreign law) (the "338(h)(10) Election") with respect to Greenwich. (ii) Buyer and Sellers shall jointly make an election under section 338(h)(10) of the Code (and any comparable election under state, local or foreign tax law) with respect to the acquisition of Greenwich by Buyer. Buyer and Sellers shall cooperate fully with each other in the making of such election. Not withstanding any language contained in this Agreement, Sellers and Buyer agree that for Tax purposes, all monies or consideration paid under this Agreement by Buyer are for the express purpose of purchasing the Shares. (iii) Buyer shall initially prepare a complete IRS Form 8023 (and any comparable forms required to be filed under state, local or foreign tax laws) and any additional data or materials required to be attached to Form 8023 pursuant to the Treasury Regulations promulgated under Section 338 of the Code (the "Section 338 Forms"). AHP shall deliver to Buyer, no later than one hundred twenty (120) days prior to the date the Section 338 Forms are required to be filed, such documents and other information as reasonably requested by Buyer to complete the Section 338 Forms. Buyer shall deliver said forms to AHP for review no later than sixty (60) days prior to the date the Section 338 Forms are required to be filed. In the event AHP objects to the manner in which the Section 338 Forms have been prepared, AHP shall notify Buyer within thirty (30) days of receipt of the Section 338 Forms of such objection, and the parties shall endeavor within the next fifteen (15) days in good faith to resolve such dispute. If the parties are unable to resolve such dispute within said fifteen (15) day period, Buyer and AHP shall submit such dispute to an independent accounting firm chosen in the manner described in Section 2.2(e) above (the "Allocation Arbiter") selected by Buyer and AHP. Promptly, but not later than fifteen (15) days after its acceptance of appointment hereunder, the Allocation Arbiter will determine (based solely on presentations of Buyer and AHP and not by independent review) only those matters in dispute and will render a written report as to the disputed matters and the resulting preparation of the Section 338 Forms shall be conclusive and binding upon the parties. 34 ARTICLE VIII AGREEMENTS WITH RESPECT TO EMPLOYEES AND EMPLOYEE MATTERS 8.1 BUYER'S OBLIGATIONS TO EMPLOYEES. (a) Effective on the Closing Date, Buyer shall be obligated to continue the employment of all Facility Employees (except Seller Employees) at [*] salary [*] such Facility Employee immediately prior to the Closing Date (hereinafter referred to as "Transferred Employees") (assuming Seller's compliance with Section 7.2(c)(ii)), subject to Buyer's ability to discontinue employment of Transferred Employees pursuant to Sections 8.1(h) and (l) below. [*]. All Transferred Employees shall be entitled to participate in the benefit plans, programs and arrangements of Buyer on the day after the Closing Date as set forth below. (b) Buyer maintains a defined contribution 401(k) plan on behalf of its employees ("Buyer's Tax-Deferred Savings Plan"). Buyer agrees that effective immediately after the Closing Date, Buyer shall promptly take all action necessary to extend coverage under Buyer's Tax-Deferred Savings Plan to the Transferred Employees who have satisfied such plan's eligibility requirements. Buyer shall credit all service completed by Transferred Employees with Greenwich or Sellers, as the case may be, prior to the Closing Date for eligibility and vesting purposes under Buyer's Tax-Deferred Savings Plan. Sellers shall amend its defined contribution 401(k) savings plan and nonqualified supplemental savings plan ("Sellers' Savings Plans") to provide that Transferred Employees shall be fully vested in all employer matching contributions as of the Closing Date. Sellers agree and acknowledge that the consummation of the transactions contemplated by this Agreement will result in, and constitute, a distributable event pursuant to Code Section 401(k)(10)(A)(iii) (the "Distributable Event") with respect to Sellers' Savings Plans for all Transferred Employees. Buyer's Tax-Deferred Savings Plan shall accept elective transfers of distributions of benefits, including notes representing participant's loans from Sellers' Savings Plan. Sellers shall amend its defined benefit pension plan and non-qualified supplemental pension plan ("Sellers' Retirement Plans") to provide that service with Buyer after the Closing Date shall continue to be credited under Sellers' Retirement Plans for purposes of vesting and eligibility for early retirement subsidies but not for benefit accrual purposes. Transferred Employees shall not be eligible to commence receipt of retirement benefits under Sellers' Retirement Plans until they have satisfied the age and service requirements under Sellers' Retirement Plans and terminated employment with Buyer or any successor thereto. (c) Buyer provides to its employees medical (including prescription drugs), dental, vacation, life insurance, accidental death and dismemberment, spending account plans, short-term disability and long-term disability benefit plans ("Buyer's Welfare Plans") for its employees; [*]. Immediately after the Closing Date, Transferred Employees shall be eligible to participate in such Buyer's Welfare Plans in accordance * Confidential Treatment Requested. 35 with the terms of such plans, and employment with Sellers or any predecessor shall be taken into account for purposes of determining eligibility for participation and benefits under such Buyer's Welfare Plans; provided, however, the Transferred Employees shall participate in such Buyer's Welfare Plans that are core plans provided to all Buyer's employees (and not optional or supplemental plans) (i) without any waiting periods, pre-existing condition restrictions or evidence of insurability [*]; and (ii) Buyer shall count claims arising on or prior to the Closing Date, during the calendar year of the Closing, for purposes of satisfying deductibles, out-of-pocket maximums, lifetime maximums, and other similar limitations, and (iii) Transferred Employees shall participate in Buyer's vacation plan according to the terms set forth in Section 8.1(g) below. Prior to the Closing Date, according to a schedule agreed upon by Sellers and Buyer, Sellers shall provide Buyer with all of the information necessary to facilitate the Transferred Employees' participation in Buyer's Welfare Plans on the day after the Closing in accordance with the terms of this Agreement, including without limitation information regarding claims arising on or prior to the Closing Date. Sellers and Buyer shall cooperate as necessary after the Closing to ensure that such information is complete and updated. (d) Sellers maintain a program of medical and life insurance benefits for certain retired employees ("Sellers' Retiree Benefit Plans"). All Transferred Employees who satisfy the eligibility criteria for benefits under Sellers' Retiree Benefit Plans on or prior to the Closing Date shall be entitled to benefits from Sellers' Retiree Benefit Plans following termination from Buyer or any successor thereto or its Affiliates, in accordance with the terms of Sellers' Retiree Benefit Plans. However, Transferred Employees shall not be eligible to receive medical and life insurance benefits under Sellers' Retiree Benefit Plans while the Transferred Employees are eligible for coverage under Buyer's Welfare Benefit Plans. Transferred Employees shall receive primary coverage under Buyer's retiree welfare plans, if Buyer institutes any such plans in the future, ("Buyer's Retiree Welfare Plans") upon termination of employment if the Transferred Employees are eligible for coverage under Buyer's Retiree Welfare Plans, with Sellers' Retiree Welfare Plans being responsible for secondary coverage. Transferred Employees shall participate in Buyer's Retiree Welfare Plans, if any, in accordance with the terms of such plans (but only to the extent Transferred Employees elect to participate therein) and Buyer shall recognize service with Sellers or its Affiliates or predecessors for purposes of Buyer's Retiree Welfare Plans. (e) Sellers agree that any claims for welfare benefits arising on or before the Closing Date with respect to any Transferred Employees (or their covered dependents or beneficiaries) shall be the responsibility of Sellers, and Buyer agrees that any claims arising subsequent to the Closing Date with respect to any Transferred Employees (or their covered dependents or beneficiaries) shall be the responsibility of Buyer. A claim is deemed to have arisen when the event giving rise to the claim occurred or, with respect to health coverages, when the related health services were rendered. Notwithstanding the foregoing, however, a Transferred Employee's claim for long-term disability coverage * Confidential Treatment Requested. 36 shall be deemed to have arisen when the initial claim for such disability was submitted if such employee (a) is already on long-term disability coverage on the Closing Date, or (b) is on short-term disability coverage on the Closing Date. (f) Sellers shall be responsible for any legally-mandated continuation of health care coverage for Facility 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 or any successor thereto and the regulations thereunder) that occurs on or prior to the Closing Date, including any Facility Employee or covered dependent who is receiving health care coverage under COBRA on the Closing Date. Buyer shall be responsible for any legally-mandated continuation of health care coverage for Transferred Employees and/or their covered dependents who have a loss of health coverage due to a qualifying event that occurs after the Closing Date as described in Exhibit F. (g) Effective as of the Closing Date, all service completed by Transferred Employees with the Sellers, Greenwich or a predecessor thereof on or prior to the Closing Date shall be recognized by Buyer for purposes of determining the Transferred Employees' [*]. [*]. Sellers shall, within a reasonable time prior to Closing, provide Buyer with a schedule of accrued vacation time and completed service for each Transferred Employee. (h) Buyer shall be free to terminate the employment of any Transferred Employee in accordance with Buyer's policies and practices generally applicable to all of its employees, as well as Applicable Laws. Buyer shall be responsible for severance liabilities, in accordance with the severance policy set forth in Exhibit F, attached hereto, only to Transferred Employees who meet the following criteria whose employment is terminated by Buyer after the Closing Date: (i) [*] (ii) [*] Severance payments hereunder shall include [*]. [*]. Such extension shall represent the first six (6) months of any COBRA continuation coverage. (i) Sellers maintain spending account plans for the benefit of their employees ("Sellers' Spending Account Plans"). For a period of ninety (90) days following the Closing Date, Transferred Employees who are participants in Sellers' Spending Accounts Plans shall be permitted to submit claims for expenses incurred during the plan year on or prior to the Closing Date. At the end of the ninety (90)-day period, Sellers shall cause the account balances remaining in the accounts of Transferred Employees to be transferred in cash to the spending account plans of Buyer ("Buyer's Spending Account Plans"). Following such transfer, Buyer (or one of its Affiliates) shall be responsible for all liabilities for Transferred Employees under Buyer's Spending Account Plans and shall be * Confidential Treatment Requested. 37 entitled to all funds forfeited from such plans. (j) If, after the Closing, a bonus plan established by Sellers for Facility Employees prior to Closing is still in effect, Buyer shall assume liability for payments to Transferred Employees under such bonus plan that have not yet been made as of Closing and shall make all such payments in accordance with the plan. At the conclusion of such bonus plan, Buyer shall then be free to implement a different bonus plan for Transferred Employees. (k) Buyer shall not have taken any action on the Closing Date or within ninety (90) days on or after the Closing Date the result of which would be to effectuate a "plant closing" or "mass layoff" as those terms are defined in the WARN Act. Buyer shall assume all liabilities arising under any state law related to severance for actions taken on or after Closing. (l) No provision of this Agreement shall create any third party beneficiary or other rights to any Facility Employee or Transferred Employee (including any beneficiary or dependent thereof) or any other Persons in respect of continued employment with Buyer, with Sellers or any of their Affiliates and no provisions of this Agreement shall create any rights in any such persons in respect of any benefits which may be provided, directly or indirectly, under any benefit plans, programs or arrangements which may be operated or maintained by either Buyers or any of its Affiliates. Notwithstanding anything herein seemingly to the contrary, subject to the provisions of this Article VIII, no provision of this Agreement shall constitute a limitation on the right of Buyer or any of its Affiliates, in its sole discretion, to terminate any Transferred Employee at will, to modify the terms of employment or salary of any Transferred Employee, or to change the terms of any of Buyer's Welfare Plans or other employee benefit plans. (m) [*] (n) All Transferred Employees shall become eligible to enroll in Buyer's employee stock purchase plan during the next open enrollment period following the Closing. ARTICLE IX. CONDITIONS 9.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. The obligation of each party to effect the transactions contemplated by this * Confidential Treatment Requested. 38 Agreement shall be subject to the fulfillment by such party or written waiver by the other party at or prior to the Closing Date of the following conditions: (a) all governmental and other consents and approvals, if any, necessary to permit the consummation of the transactions contemplated by this Agreement shall have been obtained and any waiting period (and any extension thereof) applicable to the consummation of the Agreement under the HSR Act or under other Applicable Laws shall have expired or been terminated; and (b) no preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a Governmental Authority nor any Applicable Law shall be in effect as of the Closing Date that would restrain or otherwise prevent the consummation of the transactions contemplated by this Agreement. 9.2. CONDITIONS TO THE OBLIGATION OF SELLERS. The obligation of Sellers to effect the transactions contemplated by this Agreement is subject to the fulfillment by Buyer or written waiver by Sellers at or prior to the Closing Date of the following conditions: (a) Buyer shall have performed in all material respects each obligation and agreement and complied in all material respects with each covenant to be performed and complied with by it hereunder at or prior to the Closing Date, including without limitation Buyer's delivery obligations as set forth in Section 3.2; and (b) the representations and warranties of Buyer in this Agreement shall be true and correct in all material respects as of the Closing Date with the same force and effect as though made at such time except (i) for changes expressly permitted by this Agreement and (ii) to the extent that any representation and warranty is made as of a specified date (other than Signing), in which case such representation and warranty shall be true in all material respects as of such date and (iii) for results of actions directly or indirectly under the authority or supervision of the Plant Manager so long as the Plant Manager is an employee of Buyer or its Affiliates; and (c) Buyer shall have furnished to Sellers a certificate, dated as of the Closing Date, signed by a duly authorized officer of Buyer to the effect that all conditions set forth in Sections 9.2(a) and (b) above have been satisfied. 9.3. CONDITIONS TO THE OBLIGATION OF BUYER. The obligation of Buyer to effect the transactions contemplated by this Agreement is subject to the fulfillment by Sellers or written waiver by Buyer at or prior to the Closing Date of the following conditions: (a) Sellers shall have performed in all respects each of their respective obligations and agreements required by this Agreement to be performed or complied with by 39 them prior to or at the Closing, including without limitation Sellers' delivery obligations as set forth in Section 3.3; (b) the representations and warranties of Sellers in this Agreement shall be true and correct in all material respects as of the Closing Date with the same force and effect as though made at such time except (i) for changes expressly permitted by this Agreement and (ii) to the extent that any representation and warranty is made as of a specified date (other than Signing), in which case such representation and warranty shall be true in all material respects as of such date; and (c) Sellers shall have furnished to Buyer a certificate, dated as of the Closing Date, signed by a duly authorized officer of each of the Sellers to the effect that all conditions set forth in Sections 9.3(a) and (b) above have been satisfied. ARTICLE X. TERMINATION, AMENDMENT AND WAIVER 10.1 TERMINATION. This Agreement may be terminated at any time prior to the Closing Date: (a) without liability on the part of any party hereto (unless occasioned by reason of a breach by any party hereto of any of its representations, warranties or obligations hereunder) by mutual written consent of Buyer and Sellers; (b) subject to Section 7.3 hereof, by Buyer or Sellers if a court of competent jurisdiction, Governmental Authority, or other regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action, in each case permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement, and such order, decree, ruling or other action shall have become final and nonappealable; or (c) by Buyer or Sellers if the Closing has not been consummated by [*]; provided, however, that the right to terminate this Agreement under Section 10.1(c) shall not be available to any party whose willful failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur. The date on which this Agreement is terminated pursuant to any of the foregoing subsections of this Section 10.1 is herein referred to as the "Termination Date." 10.2 EFFECT OF TERMINATION. * Confidential Treatment Requested. 40 Except as set forth in Section 7.2 and this Section 10.2 hereof, upon the termination of this Agreement pursuant to Section 10.1 above, all further obligations of the parties under this Agreement shall terminate without further liability of any party to the others, except that nothing herein shall relieve any party from liability for breach of any provision of, or for any misrepresentation under this Agreement or be deemed to constitute a waiver of any available remedy for any such breach or misrepresentation. If this Agreement is terminated by Buyer in accordance with Section 10.1, Sellers and Greenwich shall repay all payments made by Buyer to a Seller or Greenwich under this Agreement on or before the Termination Date. Such repayment shall be made by wire transfer in immediately available funds, no later than thirty (30) days after the Termination Date, to an account designated in writing by Buyer. ARTICLE XI. INDEMNIFICATION 11.1 INDEMNIFICATION BY SELLER. Sellers hereby agree to defend, indemnify and hold harmless Buyer, its Affiliates and its successors and assigns and their respective officers, directors, employees, attorneys, consultants and agents (collectively, the "Buyer Indemnitees") from and against any and all losses, deficiencies, liabilities, damages, assessments, judgments, costs and expenses, including reasonable attorneys', consultants', and experts' fees (collectively, "Buyer Losses"), to the extent caused by, resulting from or arising out of: (a) any breach of a representation or warranty hereunder on the part of Greenwich or either or both Sellers in this Agreement; (b) any failure by Greenwich or either or both Sellers to perform or otherwise fulfill, any undertaking or other agreement or obligation hereunder; (c) any Excluded Assets and Liabilities; and/or (d) any and all actions, suits, proceedings, claims, and demands incident to any of the foregoing or such indemnification; provided, however, that if any claim, liability, demand, assessment, action, suit or proceeding shall be asserted against a Buyer Indemnitee in respect of which a Buyer Indemnitee proposes to demand indemnification ("Buyer Indemnified Claims"), Buyer or such other Buyer Indemnitee shall notify Sellers in writing thereof as promptly as practicable, provided further, however, that the failure or delay to so notify Sellers of such a claim shall not reduce or affect Sellers' obligations with respect thereto except to the extent that Sellers are prejudiced thereby. Sellers shall have the right promptly upon receipt of such notice to assume the control of the defense, compromise or settlement of any such Buyer Indemnified Claims including, at their own expense, employment of counsel reasonably satisfactory to Buyer; provided, however, that if Sellers shall have exercised their right to assume such control, Buyer may, in its sole discretion 41 and at its expense, employ counsel to represent it (in addition to counsel employed by Sellers) in any such matter, and in such event counsel selected by Sellers shall be required to cooperate with such counsel of Buyer, counsel selected by Buyer shall be required to cooperate with such counsel of Sellers and each of Buyer and Sellers shall be required to cooperate with such other party and its counsel in such defense, compromise or settlement. Sellers shall not settle or compromise any Buyer Indemnified Claim that does not result in a full release without any obligation of Buyer and Buyer Indemnitees without the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed. 11.2 INDEMNIFICATION BY BUYER. Buyer hereby agrees to defend, indemnify and hold harmless Sellers, their Affiliates and their successors and assigns and their respective officers, directors, employees, attorneys, consultants and agents (collectively, "Seller Indemnitees") from and against any and all losses, deficiencies, liabilities, damages, assessments, judgments, costs and expenses, including reasonable attorneys', consultants', and experts' fees (collectively, "Sellers Losses"), to the extent caused by, resulting from or arising out of: (a) any breach of a representation or warranty hereunder on the part of Buyer in this Agreement; (b) any failure by Buyer to perform or otherwise fulfill, in whole or in part, any undertaking or agreement or obligation hereunder; and/or (c) any and all actions, suits, proceedings, claims and demands incident to any of the foregoing or such indemnification. provided, however, that if any claim, liability, demand, assessment, action, suit or proceeding shall be asserted in respect of which a Seller Indemnitee proposes to demand indemnification ("Sellers Indemnified Claims"), Sellers or such other Seller Indemnitee shall notify Buyer in writing thereof as promptly as practicable, provided further, however, that the failure or delay to so notify Buyer of such a claim shall not reduce or affect Buyer's obligations with respect thereto except to the extent that Buyer is prejudiced thereby. Buyer shall have the right promptly upon receipt of such notice to assume the control of the defense, compromise or settlement of any such Sellers Indemnified Claims including, at its own expense, employment of counsel reasonably satisfactory to Sellers; provided, however, that if Buyer shall have exercised its right to assume such control, Sellers may, in their sole discretion and at their expense, employ counsel to represent them (in addition to counsel employed by Buyer) in any such matter, and in such event counsel selected by Sellers shall be required to cooperate with such counsel of Buyer, counsel of Buyer shall be required to cooperate with counsel of Sellers and each of Buyer and Sellers shall be required to cooperate with such other party and its counsel in such defense, compromise or settlement. Buyer shall not settle or compromise any Sellers Indemnified Claim that does not result in a full release without any obligation of Sellers and Seller Indemnitees without the prior written consent of Sellers, which consent shall not be unreasonably withheld or delayed. 11.3 CERTAIN LIMITATIONS. 42 (a) Other than Sellers' obligation to indemnify for Buyer Losses under Section 11.1(a) of this Agreement arising out of a breach of representation or warranty contained in Section 4.2 (capitalization) or Section 4.12 (brokers), Sellers' obligation to indemnify for Buyer Losses under Section 11.1(a) of this Agreement shall not accrue until the aggregate of all such Buyer Losses exceeds [*] Dollars ($[*]) (the "Loss Threshold") and then Sellers shall be liable for all such Buyer Losses in excess of such initial $[*] and shall be limited to [*] Dollars ($[*]) in the aggregate. There shall be no Loss Threshold or limit on liability with respect to Sellers' obligations to indemnify under Sections 11.1(b) through (d). (b) In no event shall any punitive, exemplary, special, indirect, incidental or consequential damages whatsoever be recoverable by any indemnitee under Article 11 hereof; except that, if punitive, exemplary, special, indirect, incidental or consequential damages have been asserted by a third party against a Seller Indemnitee or Buyer Indemnitee, the indemnifying party shall be liable therefor under the provisions of this Article 11. (c) Any payment required under this Article 11 paid to any Buyer Indemnitee or any Seller Indemnitee, as the case may be, shall be treated by the Buyer and the Sellers as an adjustment of the Purchase Price; provided, however, that no Buyer Losses indemnified hereunder shall be considered payment by Sellers for Net Assets or Facility Costs, and Buyer shall have no obligation to pay any amounts to Sellers under Article 2 with respect to such Buyer Losses. (d) This Article 11 sets forth the exclusive rights and remedies of Buyer and Sellers for breach of this Agreement or any of the transactions contemplated hereby, including, without limitation, the right to obtain compensation or otherwise seek indemnity pursuant to any cause of action including, but not limited to, a claim for breach of contract, for any loss directly or indirectly related to the Facility, including without limitation, any Buyer Losses or Sellers Losses, but without prejudice to the right of any party hereto to seek specific performance of the other party's obligations hereunder. ARTICLE XII. GENERAL PROVISIONS 12.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The covenants contained in this Agreement shall survive the Closing Date without limitation except as expressly set forth herein. The representations and warranties contained herein shall survive the Closing Date for a period of [*], except for (i) the representations and warranties contained in Section 4.15 (taxes), which shall survive until the expiration of the applicable statute of limitations, and (ii) the representations and warranties contained in Sections 4.2 (capitalization), 4.3 (corporate authority), 4.12 (brokers and intermediaries), 5.2 (corporate * Confidential Treatment Requested. 43 authority) and 5.5 (brokers and intermediaries), which shall survive the Closing Date without limitation. Buyer's and Sellers' right to make a claim for indemnification under Section 11.1(a) or Section 11.2(a), respectively for a breach of any representation or warranty expires upon the expiration of the applicable period set forth above, it being understood that claims made on or prior to such expiration date shall survive such expiration date. 12.2 COOPERATION. Each of the parties hereto shall use commercially reasonable efforts to take or cause to be taken all actions, to cooperate with the other party hereto, with respect to all actions, and to do, or cause to be done all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement. 12.3 WAIVER. Any failure of Sellers to comply with any of their obligations or agreements herein contained may be waived only in writing by Buyer. Any failure of Buyer to comply with any of its obligations or agreements herein contained may be waived only in writing by Sellers. 12.4 NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given upon receipt of: hand delivery; certified or registered mail, return receipt requested; or telefax transmission with confirmation of receipt: (a) If to Sellers, to: American Home Products Corporation Five Giralda Farms Madison, New Jersey 07940 Telefax: (973) 660-7156 Telephone: (973) 660-5000 Attention: General Counsel (b) If to Buyer, to Immunex Corporation 51 University Avenue Seattle, Washington 98101 Attention: General Counsel Telefax: (206) 292-9271 Telephone: (206) 587-0430 Such names and addresses may be changed by written notice to each person listed above. 12.5 GOVERNING LAW AND CONSENT TO JURISDICTION. (a) This Agreement shall be governed by and construed in accordance with the internal substantive laws and not the choice of law rules of the State of New York. 44 (b) Any judicial proceeding brought with respect to this Agreement must be brought in any court of competent jurisdiction in (i) if brought by Buyer, in the State of New York and (ii) if brought by any Seller, in the State of Washington. By execution and delivery of this Agreement, each party (x) accepts, generally and unconditionally, the exclusive jurisdiction of such courts and any related appellate court, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement and (y) irrevocably waives any objection it may now or hereafter have as to the venue of any such suit, action or proceeding brought in such a court or that such court is an inconvenient forum. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT. 12.6 COUNTERPARTS. This Agreement may be executed simultaneously in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. 12.7 HEADINGS. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 12.8 ENTIRE AGREEMENT. This Agreement, including the Schedules and Exhibits hereto and the documents referred to herein, embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter, including, without limitation, the MOU. 12.9 AMENDMENT AND MODIFICATION. This Agreement may be amended or modified only by written agreement of the parties hereto. 12.10 BINDING EFFECT; BENEFITS. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns; nothing in this Agreement, express or implied, is intended to confer on any Person other than the parties hereto and their respective successors and assigns (and, to the extent provided in Sections 11.1 and 11.2, the other Buyer Indemnitees and Seller Indemnitees) any rights, remedies, obligations or liabilities under or by reason of this Agreement. 12.11 ASSIGNABILITY. This Agreement and the rights and obligations hereunder shall not be assignable or transferable by the Buyer or the Sellers without the prior written consent of the other party hereto; provided, however, that either party may assign its rights and obligations hereunder, without the prior written consent of the other party, to an Affiliate of such party or to a successor of the assigning party's business by reason of merger, 45 sale of all or substantially all of its assets, or other form of acquisition; provided that such successor agrees in writing to be bound by this Agreement, and provided further, however, that no assignment shall limit or affect the assignor's obligations hereunder. Any attempted assignment in violation of this Section 12.11 shall be void. 12.12 SELLERS' KNOWLEDGE. When "to the knowledge of Sellers" or similar phrase is used herein it shall refer to (a) the actual knowledge of any employee of Sellers and the actual knowledge of the individuals employed by Affiliates of Sellers contained in Section 12.12 of the Disclosure Schedule after reasonable investigation of such matters. 12.13 SEVERABILITY. If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, all other provisions shall continue in full force and effect. 12.14 The Parties shall be entitled to specific performance of the payment terms of this Agreement and the transfer of the Shares, respectively, in addition to any other remedy at law or equity. 46 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above. AMERICAN HOME PRODUCTS CORPORATION By: /s/ Kenneth J. Martin ------------------------------------- Name: Kenneth J. Martin Title: Senior Vice President Finance AHP SUBSIDIARY HOLDING CORPORATION By: /s/ Timothy T. Slater ------------------------------------- Name: Timothy T. Slater Title: Vice President and Assistant Secretary IMMUNEX CORPORATION By: /s/ David A. Mann ------------------------------------- Name: David A. Mann Title: Executive Vice President and Chief Financial Officer 47 EX-10.2 4 dex102.txt COLLABORATION AND GLOBAL SUPPLY AGREEMENT Exhibit 10.2 * Certain confidential information contained in this document, marked by brackets, has been omitted and filed with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. The omitted portions of this exhibit have been filed separately with the Securities and Exchange Commission. COLLABORATION AND GLOBAL SUPPLY AGREEMENT By and Between IMMUNEX CORPORATION and AMERICAN HOME PRODUCTS CORPORATION acting through its WYETH-AYERST PHARMACEUTICALS division COLLABORATION AND GLOBAL SUPPLY AGREEMENT This COLLABORATION AND GLOBAL SUPPLY AGREEMENT (the "Agreement") is entered into this 6th day of November, 2001 (the "Effective Date"), by and between IMMUNEX CORPORATION, a Washington corporation having its principal place of business at 51 University Street, Seattle, Washington 98101, together with its Affiliates (collectively, "Immunex") and AMERICAN HOME PRODUCTS CORPORATION, a Delaware corporation having its corporate headquarters at Five Giralda Farms, Madison, New Jersey 07940, together with its Affiliates (collectively, "AHPC"), acting through its WYETH-AYERST PHARMACEUTICALS division, having offices at 555 East Lancaster Avenue, St. Davids, Pennsylvania 19087, together with its Affiliates (collectively, "Wyeth"). Background WHEREAS, Immunex and AHPC entered into a TNFR License and Development Agreement dated July 1, 1996 (the "TNFR Agreement"), in which they agreed to collaborate as set forth in the TNFR Agreement with regard to Enbrel(R) (etanercept) ("Enbrel"), a biopharmaceutical product for the treatment of rheumatoid arthritis and other diseases; WHEREAS, in the TNFR Agreement, the Parties agreed that Immunex would have certain rights to market and sell Enbrel in the United States, its territories and possessions (including Puerto Rico), and Canada, and that Wyeth would have certain rights to market and sell Enbrel in all other countries; WHEREAS, Immunex and AHPC entered into a Promotion Agreement dated September 25, 1997, regarding the marketing and promotion of Enbrel in the Immunex Territory (the "Promotion Agreement"); WHEREAS, Immunex and AHPC entered into an Enbrel Supply Agreement with Boehringer Ingelheim Pharma KG (including any successor thereto, "BIP") dated November 5, 1998, which agreement was amended by Amendment No. 1 to the Enbrel Supply Agreement dated June 27, 2000, in which BIP agreed to manufacture certain quantities of Enbrel and supply those quantities to Immunex and Wyeth; WHEREAS, Greenwich Holdings, Inc. ("Greenwich"), a wholly-owned subsidiary of AHP Subsidiary Holding Corporation ("AHPS"), a wholly-owned subsidiary of AHPC, owns a manufacturing facility located in West Greenwich, Rhode Island at which Enbrel is expected to be manufactured; WHEREAS, Immunex, AHPC, and AHPS have entered into a Purchase Agreement simultaneously with this Agreement, pursuant to which AHPS is obligated to sell, and Immunex is obligated to purchase, the shares of Greenwich; WHEREAS, AHP Manufacturing B.V., a wholly-owned indirect subsidiary of AHPC, through its Wyeth Medica Ireland branch, is in the process of constructing a manufacturing facility in Ireland, at which it plans to manufacture Enbrel, among other products; WHEREAS, the Parties entered into a letter agreement regarding the short-term allocation of Enbrel supplies dated August 9, 2000 (the "Short-Term Allocation Agreement"), which agreement is attached hereto as Exhibit C; WHEREAS, the Parties agreed, in a Memorandum of Understanding Regarding Long-Term Allocation of ENBREL Supplies dated August 9, 2000, as amended on April 18, 2001 (the "MOU"), to enter into a Collaboration Agreement regarding the manufacture, inventory, and allocation of supplies of Enbrel throughout the world, which MOU is superceded by this Agreement and is of no further force and effect; and WHEREAS, the Parties now wish to set forth their mutual agreements concerning the manufacture, supply, inventory, and allocation of supplies of Enbrel throughout the world. NOW THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows: Article 1. Definitions The following terms, whether used in the singular or the plural, shall have the meaning assigned to them below for purposes of this Agreement. 1.1 "Affiliate" shall mean: (a) any corporation or business entity of which a Party owns, directly or indirectly, fifty percent (50%) or more of the assets or outstanding stock; (b) any corporation, or business entity which a Party directly or indirectly controls; (c) any corporation or business entity that is under common control with a Party; (d) any corporation or business entity that owns, directly or indirectly, fifty percent (50%) or more of the assets or outstanding stock of a Party; or (e) any corporation or business entity that directly or indirectly controls a Party. For the purposes of this Agreement, neither Party shall be considered to be an Affiliate of the other Party, even if a Party owns, directly or indirectly, fifty (50%) or more of the assets or outstanding stock of the other Party, directly or indirectly controls the other Party, or is under common control with the other Party. 1.2 "Allocable Overhead" shall mean costs allocated to the manufacture of Bulk Drug Substance based on methodology consistently applied in the project accounting system and determined in accordance with GAAP. Allocable Overhead shall include: 2 (i) indirect labor, benefits and taxes, indirect supplies, outside laboratory services, laboratory and plant consumables, and other indirect department expenses; (ii) facility costs such as rent, depreciation (excluding depreciation of capitalized interest), utilities, facility repair and maintenance and monitoring; (iii) other overhead costs, including infrastructure services, purchasing, information systems, accounting, period costs, and other related expenses; and (iv) such other costs as the Parties may agree upon in writing from time to time. An example of the methodology to be used in calculating Allocable Overhead is included in Exhibit A attached hereto. Allocable Overhead shall not include any costs attributable to general corporate activities, including but not limited to executive management, investor relations, business development, legal affairs, and finance. 1.3 "BIOS Capacity" shall mean the volume of Bulk Drug Substance that the Parties reasonably expect to be manufactured within bioreactors having a working volume equivalent to the RI Capacity during a Calendar Year. 1.4 "BIOS Site" shall mean the portion of the biopharmaceutical manufacturing facility to be built at the Wyeth BioPharma campus at Grange Castle International Business Park, Clondalkin, Dublin 22, Ireland, within which the BIOS Capacity will be manufactured. The BIOS Site shall not include such manufacturing facility with respect to its manufacture of Excluded Supply or products other than the Product. 1.5 "BIP Capacity" shall mean the volume of Bulk Drug Substance that Immunex and Wyeth reasonably expect to purchase collectively from BIP pursuant to the Enbrel Supply Agreement during a Calendar Year, excluding any Bulk Drug Substance from Bulk Drug Substance Runs that have been separately negotiated pursuant to an agreement between only one of the Parties hereto and a Third Party customer of BIP on or before March 26, 2001. 1.6 "BIP Site" shall mean that portion of BIP's facility at Birkendorfer Stra(beta)e 65, 88397 Biberach an der Riss, Federal Republic of Germany, within which the BIP Capacity is or will be manufactured, including but not limited to the [*], during a Calendar Year. In the event that the manufacture of the Product is transferred to another facility of BIP, a BIP Affiliate, or a successor of BIP in accordance with the terms of the Enbrel Supply Agreement, then the BIP Site shall refer to that portion of such successor facility in which the BIP Capacity is manufactured. - ---------- *Confidential Treatment Requested. 3 1.7 "Blended Price" shall mean the price for Bulk Drug Substance that is calculated as [*] for each of the Sites for a Calendar Year, as further described in Section 9.3 below. An example of the calculation of the Blended Price is set forth on Exhibit A attached hereto. 1.8 "Bulk Drug Substance" shall mean etanercept that has been processed to result in bulk drug substance and purified to a concentrated form, and that can be stored in liquid or frozen form under appropriate conditions. 1.9 "Bulk Drug Substance Lot" shall mean a single lot of Bulk Drug Substance, produced at a fermentation scale of [*], or any other scale mutually agreed by the Parties. 1.10 "Bulk Drug Substance Run" shall mean a single run of the process for manufacturing a Bulk Drug Substance Lot. 1.11 "Calendar Quarter" shall mean a three (3)-month period commencing on the first day of January, April, July, and October of each Calendar Year during the Term. 1.12 "Calendar Year" shall mean a twelve (12)-month period beginning on January 1 of each year during the Term. 1.13 "Catalytica Supply Agreement" shall mean the Supply Agreement, dated October 16, 2000, among Immunex, Wyeth, and Catalytica Pharmaceuticals, Inc. (including any successor thereto, "Catalytica"). 1.14 "cGMP" shall mean the regulatory requirements for current good manufacturing practices promulgated by the FDA under the FD&C Act, 21 C.F.R.ss.210 et seq., and under the PHS Act, Biological Products, 21 C.F.R.ss.ss.600-610, or the applicable regulatory guidance documents promulgated by the EMEA or Koseisho, as the same may be amended from time to time. 1.15 "Collaboration" shall mean the collaborative efforts of the Parties as further described herein. 1.16 "Confidential Information" shall mean all proprietary and confidential information of a Party, including, without limitation, trade secrets, technical information, business information, sales information, customer and potential customer lists and identities, product sales plans, license and sublicense agreements, inventions, developments, discoveries, know-how, methods, techniques, formulae, data, processes, and other proprietary ideas, whether or not protectable under patent, trademark, copyright, or other legal principles, that the other Party has access to or receives, but does not include information that (a) is or becomes publicly available through no fault of the receiving Party; (b) was already known to the receiving Party at the time it was disclosed to the receiving Party, as shown in the records of the receiving Party maintained during the ordinary course of business; (c) is independently developed by employees of the - ---------- *Confidential Treatment Requested. 4 receiving Party who had no knowledge of or access to such information, as shown in the records of the receiving Party maintained in the ordinary course of business; or (d) is received from a Third Party who is under no obligation of confidentiality to the disclosing Party. As used herein, "Confidential Information" shall include, without limitation, any and all technical information regarding the Product, Five-Year Requirement Schedules, Five-Year Capacity Projections, and Five-Year Plans. 1.17 "Direct Costs" shall include: (a) direct labor costs, which shall include all wages directly attributable and allocable to labor for the production of Bulk Drug Substance at the RI Site and the BIOS Site, as applicable; and (b) material costs, including the costs of acquiring all materials directly attributable and allocable to the production of Bulk Drug Substance at the RI Site and the BIOS Site, as applicable. 1.18 "Drug Product" shall mean Bulk Drug Substance that has been appropriately formulated, compounded, filled into containers and lyophilized (if applicable), but is not labeled (i.e., unlabeled vial or syringe packed in a labeled secondary shipper). 1.19 "EMEA" shall mean the European Medicines Evaluation Agency, or any successor agency. 1.20 "Enbrel Supply Agreement" shall mean the November 5, 1998 agreement among Immunex, BIP, and AHPC for the manufacture of Product at the BIP Facility, as amended on June 27, 2000 and as may be amended from time to time by the parties thereto. 1.21 "European Union" shall mean those countries within the jurisdiction of the EMEA. 1.22 "Excluded Supply" shall mean (a) any quantities of Product manufactured or acquired by Immunex outside of the RI Capacity or BIP Capacity, and (b) any quantities of Product manufactured or acquired by Wyeth outside of the BIOS Capacity or the BIP Capacity. 1.23 "FDA" shall mean the United States ("U.S.") Food and Drug Administration, or any successor agency. 1.24 "Finished Product" shall mean Drug Product in a vial or syringe that has been appropriately labeled and that is suitable for shipment in bulk packaging to Immunex, Wyeth and/or their respective designee(s) for final commercial packaging and conversion to Product Supply. 1.25 "Fully Absorbed Manufacturing Cost" shall have the meanings set forth below: (a) For Bulk Drug Substance manufactured at the RI Site or the BIOS Site, Fully Absorbed Manufacturing Cost shall mean [*] of all costs, expenses, and period costs incurred at the Site for the manufacturing of Bulk Drug Substance - ---------- *Confidential Treatment Requested. 5 incurred by the Party controlling such Site, determined according to GAAP and as mutually agreed upon by the Parties. Such costs shall include Direct Costs and Allocable Overhead at each stage of the process for manufacturing Bulk Drug Substance at such Site. Fully Absorbed Manufacturing Cost shall also include any other costs borne by the Party controlling such Site for transport, customs clearance and storage of Bulk Drug Substance (if necessary) at the request of another Party or a Third Party (i.e., freight, customs duty, and transportation related insurance). Fully Absorbed Manufacturing Cost shall exclude any losses at the RI Site or BIOS Site resulting from a significant or catastrophic event that would otherwise be covered by property insurance, regardless of whether such insurance is in place. To the extent that the manufacturing capacity at the RI Site or BIOS Site is utilized to manufacture a product other than the Product, the Direct Costs and Allocable Overhead incurred for the manufacture of such other product shall be excluded from the calculation of Fully Absorbed Manufacturing Cost. (b) For Bulk Drug Substance manufactured at the BIP Site, Fully Absorbed Manufacturing Cost shall mean the amount paid or payable by a Party to BIP for Bulk Drug Substance purchased by a Party under the Enbrel Supply Agreement, whether purchased in the form of Bulk Drug Substance itself or as incorporated into Drug Product or Finished Product, as the case may be. An example of the calculation of Fully Absorbed Manufacturing Cost is included in Exhibit A attached hereto. 1.26 "GAAP" shall mean U.S. Generally Accepted Accounting Principles consistently applied. 1.27 [*] 1.28 [*] 1.29 "Immunex Territory" shall mean the U.S., its territories and possessions (including Puerto Rico) and Canada. 1.30 "Inventory Carrying Costs" shall mean [*] per annum of the Fully Absorbed Manufacturing Cost of Bulk Drug Substance manufactured at either the RI Site or the BIOS Site, as applicable, and held in storage by or on behalf of a Party for a period greater than [*] days after release by both Parties, commencing after such [*]-day period has elapsed. 1.31 [*] shall mean the Immunex proprietary process for manufacturing Bulk Drug Substance, which, if used at the RI Site, shall include the [*], and which process is the subject of a letter agreement among Immunex, Wyeth, and BIP dated May 29, 2001. - ---------- *Confidential Treatment Requested. 6 1.32 "Major Markets" shall mean the U.S., the European Union, and Japan. 1.33 "Manufacturing Process" shall mean a process for manufacturing Bulk Drug Substance and/or Drug Product, including but not limited to the T1 Process, the [*], and the T2 Process. 1.34 "Party" or "Parties" shall refer to Immunex, AHPC, and/or Wyeth, as applicable. 1.35 "Phase A Capacity" shall mean the volume of Bulk Drug Substance that the Parties reasonably expect to be manufactured within the [*] liter nominal volume bioreactors contained in the Phase A Facility during a Calendar Year, or, if Immunex transfers such manufacturing to the Phase B Facility, the volume of Bulk Drug Substance that the Parties reasonably expect to be manufactured within bioreactors of equivalent working volume in the Phase B Facility during a Calendar Year. 1.36 "Phase A Facility" shall mean the manufacturing plant at the RI Site that Wyeth is currently in the process of retrofitting to manufacture Bulk Drug Substance. 1.37 "Phase B Additional Capacity" shall mean the volume of Bulk Drug Substance that the Parties reasonably expect to be manufactured within [*] liter nominal volume bioreactors in the Phase B Facility per Calendar Year. 1.38 "Phase B Facility" shall mean the new manufacturing facility that Immunex plans to construct located on the portion of the RI Site that Immunex Manufacturing Corporation has leased from Greenwich pursuant to the Ground Lease between those parties dated March 9, 2001. 1.39 "Product" shall mean the pharmaceutical product etanercept, in any form. 1.40 "Product Supply" shall mean Finished Product that has been fully packaged and is in final form for distribution for commercial sale or clinical testing in any country in the Immunex Territory or the Wyeth Territory. 1.41 "Product Supply Units" shall refer to individual units of Product Supply. 1.42 "Production Surplus" shall mean the situation, as may be determined by the JSC from time to time, in which the Parties' forecasted needs for Product Supply in any Calendar Year fall more than [*] below the total quantity of Bulk Drug Substance that can be manufactured in the Subject Capacity during such Calendar Year. 1.43 "Quality Agreement" shall mean the Quality Agreement attached hereto as Exhibit D, as the same may be amended from time to time, setting forth the terms and conditions relating to (a) the quality, safety, efficacy, and purity of the Bulk Drug Substance supplied by each Party to the other hereunder, (b) the respective roles and - ---------- *Confidential Treatment Requested. 7 responsibilities of Immunex and Wyeth relating to quality control, quality assurance, validation, ongoing manufacturing, materials, standards, and the functions of person(s)-in-the-plant, and (c) procedures for resolving disputes regarding any of the foregoing. 1.44 "Regulatory Authority" shall mean (a) the applicable government agency or agencies in a country whose permission, approval, or clearance must be obtained for, or which has jurisdiction over, the manufacturing, production, clinical testing, and/or marketing of the Product, including, but not limited to, the FDA, the EMEA, and Koseisho; and (b) any state, provincial, or local government agency or entity with jurisdiction, to any extent, over the Party supplying the Product, a Site, or the Product. 1.45 "Regulatory Filings" shall mean all documents and other information filed with and/or submitted to one or more Regulatory Authorities and which are related to the Product. 1.46 "Regulatory Requirements" shall mean (a) all Specifications, methods of manufacture, and other information in one or more Regulatory Filings in a Major Market related in any way to the Product, and (b) all laws, rules, regulations, applicable regulatory guidance documents, and other requirements of any Regulatory Authority in a Major Market that govern the Product, the manufacture of the Product, and use of the Product in or with Finished Products, including, but not limited to, the requirements set forth in the United States Federal Food, Drug, and Cosmetic Act (the "FD&C Act"), 21 U.S.C. Section 301 et seq., the Public Health Service Act (the "PHS Act"), 42 U.S.C. Section 262 et seq., cGMPs, any applicable regulations promulgated by the EMEA, and any applicable regulations promulgated by Koseisho, as the same may be amended from time to time. 1.47 "Released Bulk Drug Substance" shall mean, with respect to a particular Site and a particular Calendar Year, Bulk Drug Substance that is, or is expected to be, released at such Site during such Calendar Year, including (a) any such Bulk Drug Substance for which manufacturing was commenced and completed and which was released during such Calendar Year, and (b) any such Bulk Drug Substance released during such Calendar Year that was Work In Process at the end of the prior Calendar Year. 1.48 "RI Capacity" shall mean the volume of Bulk Drug Substance that the Parties reasonably expect to be manufactured from the combined capacity of the Phase A Capacity and the Phase B Additional Capacity in a Calendar Year. 1.49 "RI Site" shall mean the portion of the biopharmaceutical manufacturing facility in West Greenwich, Rhode Island, currently owned by Greenwich, within which the RI Capacity is or will be manufactured. The RI Site shall not include such manufacturing facility with respect to its manufacture of Excluded Supply or products other than the Product. 1.50 "Safety Agreement" means the Memorandum of Understanding between Immunex Drug Safety Surveillance and Wyeth-Ayerst for the Identification, Collection, Evaluation and Regulatory Reporting of Adverse Events and Product Quality and for 8 the Provision of Medical Information for Enbrel(R) (etanercept), effective as of December 13, 2000, as the same may be amended from time to time. 1.51 "Site" shall mean the BIOS Site, the BIP Site, and/or the RI Site, as applicable. 1.52 "Specifications" shall mean a set of specifications for Bulk Drug Substance agreed upon by the Parties pursuant to the Quality Agreement. 1.53 "Subject Capacity" shall mean that manufacturing capacity subject to the Collaboration as further set forth in Section 2.2 below. 1.54 "Supply Shortage" shall mean the situation, as may be determined by the JSC from time to time, that in [*] of a Five-Year Plan approved by the JSC, the total quantity of Bulk Drug Substance that can be manufactured in the Subject Capacity is less than [*]. When a Supply Shortage is in effect, it shall be deemed to be in effect for the [*]. 1.55 "T1 Process" shall mean the Immunex proprietary Manufacturing Process used by BIP as of the Effective Date to manufacture Bulk Drug Substance. 1.56 "T2 Process" shall mean the Immunex proprietary process for manufacturing Bulk Drug Substance, which process is currently the subject of the T2 Development Agreement: TNFR:FC Process (Phase I), dated January 1, 1999, among Immunex, AHPC, and BIP, as the same may be amended from time to time. 1.57 "Territory" shall mean the Immunex Territory or the Wyeth Territory, as applicable, and "Territories" shall mean both the Immunex Territory and the Wyeth Territory, collectively. 1.58 "Third Party" shall mean any party other than Immunex, Wyeth, BIP, and their respective Affiliates. 1.59 "Total BIOS Facility Capacity" shall mean the BIOS Capacity plus the volume of Excluded Supply that can be produced in the biopharmaceutical manufacturing facility to be built at the Wyeth BioPharma campus at Grange Castle International Business Park, Clondalkin, Dublin 22, Ireland. 1.60 "Type" shall mean Bulk Drug Substance produced by a specified Manufacturing Process meeting a defined Specification approved by Immunex and Wyeth pursuant to the provisions of the Quality Agreement. 1.61 "Work in Process" shall mean Bulk Drug Substance for which manufacturing has commenced in a Calendar Year but which has not yet been released by the end of such Calendar Year. - ---------- *Confidential Treatment Requested. 9 1.62 "Wyeth Territory" shall mean all the countries in the world other than those within the Immunex Territory. Each of the following definitions are found in the body of this Agreement as indicated: Section ------- "Additional Term" 14.1 "Adjusted Standard Product Price" 9.1(b)(iv) "Base Allocation" 5.2(a) "Clinical Development Requirements" 5.2(b) "Cost of Goods" 2.2(d) "Delivery Dates" 8.2 "Detailed Forecast Schedule" 8.2 "Firm Order" 8.2 "Five-Year Capacity Projection" 4.2(b) "Five-Year Plan" 4.2(c) "Five-Year Requirement Schedule" 4.2(a) "Force Majeure Event" 16.1 "Greater Volume Party" 2.2(d)(i) "Immunex License Agreements" 10.3 "Indemnitor" 13.3 "Indemnitee" 13.3 "Initial Term" 14.1 "JSC" 3.1 "Kg" 5.2(a) "Liabilities" 13.1 "Lower Volume Party" 2.2(d)(i) "Net Sales" 2.2(d) "Product Development Steering Committee" 5.2(b) "Product Gross Profits" 2.2(d) "Production Plan" 4.2(c)(i) "Publication" 15.4 "Reasonable Steps" 15.1 "RI Approval" 4.1 "Royalities" 2.2(d) "Standard Product Price" 9.1(a) "Sublicense Agreements" 10.3 "Supply Plan" 4.2(c)(ii) "Technology Transfer and License Agreement" 7.3 "Term" 14.1 "Territory Shortage" 2.2(d) 10 Article 2. Scope of Agreement; Subject Capacity 2.1 Scope of Agreement. The purpose of the Collaboration is for the Parties to allocate and manage in a collaborative manner the manufacture and supply of Product deriving from the Subject Capacity. 2.2 Subject Capacity. (a) Included Capacities. The Subject Capacity subject to the Collaboration shall be composed of the following: (i) the BIP Capacity; (ii) the RI Capacity; and (iii) the BIOS Capacity. (b) Excluded Supply. Each Party shall be free to manufacture quantities of Product in addition to those included in the Subject Capacity, or to contract with a Third Party to manufacture at such Third Party's facilities such additional Product, for use by such Party within its Territory. All such additional quantities of Product Supply in excess of those included in the Subject Capacity, whether manufactured by or for a Party, shall be considered Excluded Supply that is not included within the Subject Capacity and, except as expressly set forth herein, shall not be subject to this Agreement. Without limiting the generality of the foregoing, (i) Immunex may, in its discretion, manufacture additional Product in the Phase B Facility or elsewhere at the RI Site, which additional Product shall be considered Excluded Supply, and (ii) Wyeth may, in its discretion, manufacture additional Product at the BIOS Site in excess of that included in the BIOS Capacity, which additional Product shall be considered Excluded Supply. (c) [*] (d) Equivalency of Capacities. Until [*], all supply within the Subject Capacity shall be allocated as set forth in this Agreement and purchased by the Parties for the prices set forth in Article 9 (except as set forth in Section 2.2(c)), without regard for whether the bioreactor working volume available from the RI Site is equivalent to the bioreactor working volume available from the BIOS Site. If, at any time after [*], the RI Site and the BIOS Site have and continue to have substantially equivalent bioreactor working volumes within the Subject Capacity, all supply within the Subject Capacity shall be allocated as set forth in this Agreement and purchased by the Parties for the prices set forth in Article 9 (except as set forth in Section 2.2(c)). Notwithstanding anything to the contrary in this Agreement, if, at any time after [*], the RI Site - ---------- *Confidential Treatment Requested. 11 and the BIOS Site do not have and continue not to have substantially equivalent bioreactor working volumes within the Subject Capacity, all supply within the Subject Capacity shall be allocated as set forth in this Agreement and purchased by the Parties at the following prices: (i) Supply from Equivalent Bioreactor Working Volumes. All supply from an equivalent bioreactor working volume within the Subject Capacity from the RI Site or the BIOS Site, as applicable, shall be purchased by the Parties for the prices set forth in Article 9 (except as set forth in Section 2.2(c)). If a Party (the "Lower Volume Party") has a lower total bioreactor working volume in the Subject Capacity than the total bioreactor working volume of the other Party (the "Greater Volume Party") in the Subject Capacity with respect to all or a portion of a particular Calendar Year after [*], the supply from the Greater Volume Party to the Lower Volume Party priced in accordance with Article 9 (except as set forth in Section 2.2(c)) for such portion of such Calendar Year shall equal [*]. (ii) Supply from Additional Bioreactor Working Volumes. Quantities of Bulk Drug Substance allocated to the Lesser Volume Party in the applicable Five-Year Plan in excess of the quantities supplied to the Lower Volume Party from its own Site and the BIP Site and quantities purchased pursuant to subsection (i) above shall be purchased by the Lesser Volume Party from the Greater Volume Party, and shall be priced as follows: (A) Supply Shortage and Territory Shortage. If both a Supply Shortage and a Territory Shortage are in effect with respect to all or a portion of a particular Calendar Year after [*], then such Bulk Drug Substance purchased by the Lesser Volume Party shall be priced as follows for that portion of such Calendar Year in which such Supply Shortage and Territory Shortage are in effect: (1) If Wyeth is the Lesser Volume Party, then Wyeth shall pay Immunex for such Bulk Drug Substance the sum of: (a) the Standard Product Price determined as set forth in Section 9.1; and (b) the [*]. (2) If Immunex is the Lesser Volume Party, then Immunex shall pay Wyeth for such Bulk Drug Substance the sum of: (a) the Standard Product Price determined as set forth in Section 9.1; and (b) the [*]. - ---------- *Confidential Treatment Requested. 12 (B) Absence of Supply Shortage and/or Territory Shortage. If either a Supply Shortage or a Territory Shortage is not in effect, or if neither a Supply Shortage nor a Territory Shortage is in effect, then such Bulk Drug Substance purchased by the Lesser Volume Party shall be priced as follows: (1) the Fully Absorbed Manufacturing Cost allocated to the manufacture of such Bulk Drug Substance; plus (2) [*]. As used in this Section 2.2(d), "Territory Shortage" shall mean the situation in which the [*]. As used in this Section 2.2(d), "Product Gross Profits" shall mean Net Sales of Product Supply Units, less the sum of Cost of Goods and Royalties. As used in this Section 2.2(d), "Cost of Goods" shall mean, with respect to Product Supply Units, the total cost of finished goods, including, but not limited to, the Bulk Drug Substance at the Standard Product Price, other bulk materials, fill and finish, quality control, labeling, packaging, and shipping to a Party or its agent, and storage. As used in this Section 2.2(d), "Net Sales" shall mean the gross invoice price of Product Supply Units sold in a Party's Territory by a Party, its Affiliates, sublicensees, distributors, or other designees to a Third Party after deducting, if not already deducted in the amount invoiced or not otherwise accounted for in Cost of Goods: (a) the standard inventory cost (actual acquisition cost) of devices used for dispensing or administering such Product Supply Units and that accompany such Product Supply Units as they are sold; (b) then normal or customary trade, cash, and/or quantity discounts; (c) returns, allowances, free goods, rebates, and chargebacks; (d) retroactive price reductions applicable to sales of such Product Supply Units; (e) fees paid to distributors, selling agents (excluding any sales representatives of a Party or any of its Affiliates), group purchasing organizations, or managed care entities; (f) sales taxes, excise taxes, tariffs, and duties; and (g) [*] of the amount invoiced to cover bad debt, freight, or other transportation charges, insurance charges, additional special packaging, and other governmental charges. As used in this Section 2.2(d), "Royalties" shall mean all running royalties paid to Third Parties or to the other Party pursuant to Sublicense Agreements under patent or technology licenses that are necessary or desirable in order to manufacture, import, use, sell, or distribute Product, provided that such royalties for purposes of the calculation of Product Gross Profits shall be capped at [*] of Net Sales, and any royalties above such amount shall be for the account of the Party that sold such Product. - ---------- *Confidential Treatment Requested. 13 Article 3. Governance 3.1 Joint Steering Committee. The Parties hereby establish a Joint Steering Committee (the "JSC") to manage the Collaboration. Each Party shall designate two (2) senior executives to serve on the JSC on the basis of their expertise in pharmaceutical manufacturing and supply management. The initial members of the JSC are listed on Exhibit B attached hereto. A Party shall be free to change either or both of its designated representatives upon reasonable written notice to the other Party. The Parties shall be free to increase the number of their respective representatives upon mutual agreement of the Parties in writing. The JSC shall appoint a chairperson from among its members, provided that the chairperson shall alternate between the Immunex members and the Wyeth members on an annual basis. 3.2 Role of JSC. The JSC shall be responsible for general management of the Collaboration. Its responsibilities shall include, without limitation, the following: (a) Reviewing and approving the Five-Year Requirement Schedules, as further described in Section 4.2(a) below; (b) Reviewing and approving the Five-Year Capacity Projections, as further described in Section 4.2(b) below; (c) Establishing, maintaining, and updating the Five-Year Plan, as further described in Section 4.2(c) below; (d) Overseeing the management of the Parties' joint relationship with BIP, with other contractors performing services related to the Product with regard to the Subject Capacity, and with suppliers of raw materials and other supplies for the Product with regard to the Subject Capacity; (e) Serving as the initial forum for resolution of disputes between the Parties related to matters within the scope of the Collaboration, as set forth in Section 3.4 below; (f) Establishing the quantities of safety inventories of Product to be maintained by the Parties, except as set forth in Section 5.5 below; (g) Establishing the operating guidelines pursuant to which the Parties will allocate tasks to accomplish the effective functioning of the Collaboration; (h) Creating a quality review board and such other subcommittees as the JSC deems necessary or appropriate for the effective functioning of the Collaboration; 14 (i) Enforcing the responsibilities of and resolving disputes between the finance representatives designated by the Parties as set forth in Section 9.5(b); (j) Making decisions regarding process improvements as set forth in Section 7.4(a)(i); and (k) Performing the other tasks specifically set forth herein, as well as any other tasks that the JSC deems necessary or appropriate for the effective functioning of the Collaboration. Except as expressly set forth herein, or as determined by the JSC, the Parties shall be bound by the decisions made by the JSC hereunder. Each Party shall cause its members of the JSC to act in accordance with, and perform the functions of the JSC required by, this Agreement. 3.3 Meetings. The JSC shall meet as frequently as necessary to manage the Collaboration effectively, but at least semi-annually. The Chairperson shall send notices and agendas for all regular meetings to all JSC members. The location of regularly scheduled meetings shall alternate between the offices of the Parties. Meetings may be held telephonically, by video conference, or by any other media agreed to by the JSC. Members of the JSC shall have the right to participate in and vote at meetings by telephone or proxy. Each Party shall have one (1) vote on all matters within the jurisdiction of the JSC. The Party hosting any meeting shall appoint a person to record the minutes of the meeting; such minutes shall be circulated to the Parties promptly following the meeting for review, comment, ratification, and distribution. Each Party shall bear its own travel and related costs incurred in participation in the JSC. The JSC may invite additional participants from relevant functions to attend JSC meetings when appropriate for the issues being addressed at the meeting. 3.4 Dispute Resolution. The JSC shall endeavor to reach a consensus on all matters within its purview. In the event that the JSC cannot reach consensus on a matter, or in the event that a disputed matter between the Parties is referred to the JSC, the JSC shall strive to resolve such matter within a period of ten (10) calendar days after the disputed matter is identified or referred to the JSC in writing for resolution. If the JSC cannot reach a resolution within the applicable time period (or earlier at the election of either Party), the matter shall be referred to resolution in accordance with Article 18 below. Article 4. Allocation; Five-Year Plans 4.1 Short-Term Allocation. Until either the FDA or EMEA has approved manufacture of Bulk Drug Substance at the RI Site ("RI Approval"), the supply of Bulk Drug Substance shall be allocated as follows: 15 (a) Product Manufactured at the BIP Site. Until RI Approval, Wyeth shall have the right to receive such quantities of Bulk Drug Substance as set forth in the Short-Term Allocation Agreement, pursuant to the terms of the Short-Term Allocation Agreement, and any written agreements involving both of the Parties relating to importation of Product Supply Units from Immunex's customers into the Wyeth Territory. (b) Clinical Trial Material Manufactured at RI Site. In the event that Bulk Drug Substance manufactured at the RI Site, prior to RI Approval, is used in Product Supply for the Parties' clinical trials, and such use permits additional Product manufactured at the BIP Site to be allocated for use and used for the commercial market, the amount of additional Product obtained for the commercial market because of such substitution shall be [*]. The JSC shall determine the amount of such Product, if any, subject to such allocation. 4.2 Five-Year Planning. (a) Five-Year Requirement Schedules. On [*] each Party shall provide the JSC with a written five-year requirement schedule (a "Five-Year Requirement Schedule") for the period beginning [*] of its projected requirements for Bulk Drug Substance from the Subject Capacity for its Territory, net of Bulk Drug Substance reasonably expected to be satisfied from Excluded Supply, according to Type, divided into monthly increments for the first Calendar Year and divided into yearly increments for the remaining four (4) Calendar Years. By each [*] thereafter, each Party shall submit to the JSC an updated Five-Year Requirement Schedule for the period beginning [*] of the following Calendar Year. Within thirty (30) days after each such submission, the JSC shall review the Five-Year Requirement Schedules, and either, at its discretion, approve the Five-Year Requirement Schedules, or request additional information from the Parties as needed to use the Five-Year Requirement Schedules to establish the Five-Year Plan. At the JSC's discretion and request, the Parties shall update their Five-Year Requirement Schedules by each [*] thereafter. Each Five-Year Requirement Schedule provided hereunder shall include, for each Calendar Year included therein: (i) total Bulk Drug Substance requirements from the Subject Capacity, separated according to Type, on a region-by-region basis; (ii) Bulk Drug Substance requirements by indication on a Territory-wide basis, separated according to Type; (iii) a schedule of expected dates of submission and approval by Regulatory Authorities, on a country-by-country basis within such Party's Territory, of initial marketing applications for the Product, and - ---------- *Confidential Treatment Requested. 16 supplemental submissions for additional indications to be added to the Product labeling; (iv) information concerning sales of Product during the preceding six (6) months on a Territory-wide basis; and (v) any other information reasonably requested by the JSC. (b) Five-Year Capacity Projections. On [*], each Party shall provide the JSC with a written five-year capacity projection (a "Five-Year Capacity Projection") beginning [*] for the Subject Capacity from each of its Sites according to Type, divided into monthly increments for the first Calendar Year of a Capacity Projection and divided into yearly increments for the remaining four Calendar Years of a Capacity Projection. Immunex shall submit the Five-Year Capacity Projection for the BIP Site and the RI Site, and Wyeth shall submit the Five-Year Capacity Projection for the BIOS Site. By each [*] thereafter, each Party shall submit to the JSC an updated Five-Year Capacity Projection for the period beginning [*] of the following Calendar Year. Within thirty (30) days after each such submission, the JSC shall review the Five-Year Capacity Projections, and either, at its discretion, approve the Five-Year Capacity Projections, or request additional information from the Parties as needed to use the Five-Year Capacity Projections to establish the Five-Year Plan. At the JSC's discretion and request, the Parties shall update their Five-Year Capacity Projections by each [*] thereafter. Each Five-Year Capacity Projection provided hereunder shall include, for each year included therein: - ---------- *Confidential Treatment Requested. 17 (i) the total quantity of Bulk Drug Substance that can reasonably be expected to be produced and released at the Site within bioreactors included in the Subject Capacity, separated according to Type; (ii) the projected Standard Product Price for Released Bulk Drug Substance at the Site within bioreactors included in the Subject Capacity, according to Type, which price shall be non-binding on the Parties; (iii) a schedule of expected dates of submissions to and approval by Regulatory Authorities, of Regulatory Filings regarding additional Sites to manufacture the Product and process and other changes, on a regional or country-by-country basis; (iv) inventory of Product on hand from the Subject Capacity, separated according to Type, on a region-by-region basis, as of one month before the date of submission of the such Five-Year Capacity Projection; and (v) any other information reasonably requested by the JSC. (c) Five-Year Plan. By [*], and by each [*] thereafter during the Term, the JSC shall establish the "Five-Year Plan" for the upcoming five (5) Calendar Years. The JSC shall determine, in its discretion, whether it is necessary to adjust each such Five-Year Plan after receiving submissions from the Parties by each [*] and, shall make any such necessary adjustments. The Five-Year Plan shall include, for each Calendar Year included therein, a Production Plan and a Supply Plan, as further described below. (i) Production Plan. Each Five-Year Plan shall indicate the quantity of Bulk Drug Substance separated according to Type reasonably expected to be manufactured and released at each specific Site within the Subject Capacity (the "Production Plan"). The Production Plan shall be established on a Calendar Year basis within the applicable Five-Year Plan. (ii) Supply Plan. Each Five-Year Plan shall indicate: (A) the quantity of Bulk Drug Substance reasonably expected to be supplied to each of the Territories separated according to Type; and (B) the quantity of Bulk Drug Substance reasonably expected to be manufactured at each specific Site separated according to Type to be supplied to each of the Parties for their respective Territories (the "Supply Plan"). The Supply Plan shall be established on a monthly basis for the first Calendar Year included in the Five-Year Plan, and on a Calendar Year basis for the remaining four (4) Calendar Years within the Five-Year Plan, on a Territory-wide basis. - ---------- *Confidential Treatment Requested. 18 (iii) Reconciliation. In establishing a Five-Year Plan, the JSC shall review the Bulk Drug Substance that was actually distributed to the Parties from the Subject Capacity during the preceding Calendar Year to determine whether the capacity actually received by each Party during the preceding Calendar Year equaled the capacity to which each Party was entitled pursuant to this Agreement. If one Party did not receive the capacity from the Subject Capacity to which such Party was entitled under the Five-Year Plan for such preceding Calendar Year, the JSC shall make any appropriate adjustments to the Five-Year Plan that it is establishing to account for such discrepancy. 4.3 General Principles of Allocation. In the absence of a Supply Shortage or a Production Surplus, the JSC shall be guided by the following principles in establishing the Five-Year Plans. (a) The JSC shall use its best efforts to prevent any out-of-stock situation in any Major Market, including but not limited to resolving any short supply issues for each Type. The JSC shall use its commercially reasonable efforts to prevent any out-of-stock situation in any non-Major Market, including but not limited to resolving any short supply issues for each Type. (b) [*] (c) The JSC shall use its best efforts to prevent out-dating of Bulk Drug Substance. (d) The JSC shall use its best efforts to minimize costs to the extent they impact the Blended Price. (e) The JSC shall use its best efforts to allocate supply such that each Party receives the Type of Bulk Drug Substance that such Party requires. 4.4 Binding Portion of Five-Year Plan. The [*] of each Five-Year Plan shall be binding on the Parties. Notwithstanding anything herein to the contrary, the initial Five-Year Plan shall not become effective nor bind the Parties until RI Approval, and prior to that time, the supply of Bulk Drug Substance shall be allocated according to Section 4.1 above. The JSC shall not change a binding portion of a Five-Year Plan. The Parties shall be obligated to utilize the capacity and to purchase the quantities of Bulk Drug Substance set forth in the binding portion of the Five-Year Plan. The remaining portions of a Five-Year Plan shall not be binding on the Parties, but the Parties shall use such Five-Year Plan for joint planning purposes. 4.5 Specific Product Purchases. - ---------- *Confidential Treatment Requested. 19 The Parties shall purchase Product from each other in the quantities specified in the Five-Year Plan, according to the terms set forth in this Agreement. (a) BIP Site. Under the Enbrel Supply Agreement, the Parties have the option to receive Bulk Drug Substance Lots manufactured by BIP; the remainder of the Bulk Drug Substance manufactured by BIP is converted by BIP to Drug Product and/or Finished Product that is sold to the Parties thereunder. (i) In the event that a Party desires to receive Bulk Drug Substance from BIP, such Party shall so specify in its Five-Year Requirement Schedule submitted to the JSC. The JSC shall approve any such request that complies with the Enbrel Supply Agreement or, if necessary, shall limit the quantities of Bulk Drug Substance requested by one or both Parties to ensure such compliance. Any Party who requests Bulk Drug Substance from BIP shall pay BIP the cost therefor under the Enbrel Supply Agreement and shall bear the cost of and the risk of loss during the fill-finish, labeling, packaging, and other services necessary to convert such Bulk Drug Substance to Product Supply. (ii) In the event that a Party requests Drug Product or Finished Product from BIP, such Party shall pay BIP the cost therefor under the Enbrel Supply Agreement and shall bear the cost of the labeling, packaging, and other services necessary to convert such Product to Product Supply. (b) RI Site. (i) For the quantities of Bulk Drug Substance that Wyeth receives from the RI Site, Wyeth shall purchase the Bulk Drug Substance form of the Product and shall pay Immunex therefor in accordance with Article 9 below. Wyeth may enter into an agreement with Immunex or a Third Party pursuant to which Immunex or a Third Party would perform certain fill-finishing, labeling, packaging, and other services necessary to convert such Bulk Drug Substance to Product Supply on terms and conditions mutually agreed upon in writing by Wyeth and Immunex, or a Third Party, as applicable. (ii) When (A) more than [*] liter nominal volume bioreactors are used to produce Bulk Drug Substance in the Phase B Facility in a given Calendar Year, or, (B) if the Phase A Capacity is moved to the Phase B Facility, more than [*] liter nominal volume bioreactors are used to produce Bulk Drug Substance in the Phase B Facility in a given Calendar Year, the quantity of Bulk Drug Substance subject to allocation and purchase in accordance with the applicable Five-Year Plan shall equal the [*]. (c) BIOS Site. - ---------- *Confidential Treatment Requested. 20 (i) For the quantities of Bulk Drug Substance that Immunex receives from the BIOS Site, Immunex shall purchase the Bulk Drug Substance form of the Product and shall pay Wyeth therefor in accordance with Article 9 below. Immunex may enter into an agreement with Wyeth or a Third Party pursuant to which Wyeth or a Third Party would perform certain fill-finishing, labeling, packaging, and other services necessary to convert such Bulk Drug Substance to Product Supply on terms and conditions mutually agreed upon in writing by Immunex and Wyeth, or a Third Party, as applicable. (ii) If a greater number of bioreactors than those included in the BIOS Capacity are used to produce Bulk Drug Substance in the Total BIOS Facility Capacity in a given Calendar Year, the quantity of Bulk Drug Substance subject to allocation and purchase in accordance with the applicable Five-Year Plan shall equal the [*]. Article 5. Product Allocation During Supply Shortage 5.1 Scope. Except as set forth in Section 5.6 below, in the event that there is a Supply Shortage, the JSC shall allocate the total quantity of Bulk Drug Substance manufactured in the Subject Capacity as set forth in this Article 5, for each of the Calendar Years for which the Supply Shortage is in effect pursuant to Section 1.54 above. 5.2 Allocation of Combined BIP Capacity and Phase A Capacity. The total volume of Bulk Drug Substance available from the combined BIP Capacity and Phase A Capacity shall be allocated as follows, in the following priority: (a) Base Allocation. The first [*] Kilograms ("Kg ") of Bulk Drug Substance available from the combined BIP Capacity and Phase A Capacity (the "Base Allocation") shall be allocated as follows: (i) Immunex shall receive [*] Kg; and (ii) Wyeth shall receive [*] Kg. In the event that fewer than [*] Kg of Bulk Drug Substance are available from the combined BIP Capacity and Phase A Capacity, then Immunex shall receive [*] and Wyeth shall receive [*] of the available quantities. (b) Clinical Development Requirements. Additional volumes of Bulk Drug Substance above the Base Allocation that are available from the combined - ---------- *Confidential Treatment Requested. 21 BIP Capacity and Phase A Capacity, if any, shall be used to satisfy any ongoing clinical trials being conducted by the Parties, as well as any new clinical trials agreed upon by the "Product Development Steering Committee" under the TNFR Agreement (as that term is defined therein) (collectively, the "Clinical Development Requirements"). [*] To the extent that the Parties agree that excess quantities of Bulk Drug Substance from the quantities allocated to the Clinical Development Requirements are available from time to time, such quantities shall be allocated as follows: (i) If the Base Allocation has not been satisfied as set forth in Section 5.2(a) in the Calendar Years in which the Parties agree that excess quantities are available, the excess quantities shall be allocated as set forth in Section 5.2(a). (ii) If the Base Allocation has already been satisfied as set forth in Section 5.2(a) in the Calendar Years in which the Parties agree that excess quantities are available, the excess quantities shall be allocated as set forth in Section 5.2(c). (c) Additional Quantities. Additional quantities of Bulk Drug Substance that are available from the combined BIP Capacity and Phase A Capacity, if any, above that necessary to satisfy the Base Allocation and the Clinical Development Requirements, shall be allocated as follows: Immunex Wyeth -------------------------------------------------------------------- First [*] Kg or portion thereof [*] [*] -------------------------------------------------------------------- Next [*] Kg or portion thereof [*] [*] -------------------------------------------------------------------- Next [*] Kg or portion thereof [*] [*] -------------------------------------------------------------------- Next [*] Kg or portion thereof [*] [*] -------------------------------------------------------------------- All additional supplies from the combined BIP Capacity and Phase A Capacity [*] [*] -------------------------------------------------------------------- (d) Example. By way of example only, the following table demonstrates how the quantities of total Bulk Drug Substance available from the BIP and Phase A Capacity, as shown below, would be allocated during a Supply Shortage. (The numbers shown below have been rounded to the nearest 0.5 Kg.) - ---------- *Confidential Treatment Requested. 22 ---------------------------------------------------------------------- Clinical Total Supply from BIP Development Capacity and from Phase A Immunex Wyeth Requirements Capacity Kg Kg Kg ---------------------------------------------------------------------- [*] [*] [*] [*] ---------------------------------------------------------------------- [*] [*] [*] [*] ---------------------------------------------------------------------- [*] [*] [*] [*] ---------------------------------------------------------------------- [*] [*] [*] [*] ---------------------------------------------------------------------- [*] [*] [*] [*] ---------------------------------------------------------------------- [*] [*] [*] [*] ---------------------------------------------------------------------- 5.3 Allocation of Phase B Additional Capacity. In the event of a Supply Shortage, the volume of Bulk Drug Substance available from the Phase B Additional Capacity shall be allocated [*] to Immunex and [*] to Wyeth. 5.4 Allocation of BIOS Capacity. In the event of a Supply Shortage, the volume of Bulk Drug Substance available from the BIOS Capacity shall be allocated [*] to Wyeth and [*] to Immunex. 5.5 Safety Stock. During any period of Supply Shortage, each Party shall be responsible for maintaining its own inventory of safety stock from among the quantities it is allocated pursuant to this Article 5. 5.6 Sale of Product between Parties. If there is a Supply Shortage and the allocation of Bulk Drug Substance according to this Article 5 provides a Party with excess supply above that required to meet such Party's supply needs, as determined in such Party's sole discretion, such Party shall have the right, but not the obligation, to sell additional Bulk Drug Substance to the other Party beyond that allocated to such other Party according to this Article 5; provided, however, that any such quantities of Bulk Drug Substance that derive from the Subject Capacity and are sold by one Party to the other Party shall be sold at a price that does not exceed the applicable Blended Price established for such Bulk Drug Substance during the Calendar Year in which the sale occurs. 5.7 Allocation According to Type. In establishing a Five-Year Plan, the JSC shall use its best efforts to allocate to a Party the Type of Bulk Drug Substance required by such Party. If the JSC is bound, according to this Article 5, to allocate a certain percentage of Bulk Drug Substance from one Site or a portion thereof to a Party, and such Site manufactures a particular Type of Bulk Drug Substance that is not required by such Party, the JSC shall substitute an equivalent quantity of Bulk Drug Substance from a different Site that produces a Type required by such Party, and shall make any necessary corresponding adjustments to maintain compliance with Article 5. - ---------- *Confidential Treatment Requested. 23 Article 6. Product Allocation During Production Surplus 6.1 Allocation. In the event that there is a Production Surplus, the total quantity of Bulk Drug Substance that can be manufactured in the Subject Capacity shall be allocated as set forth below. (a) BIP Obligations. [*]. (b) Additional Supply Needs. If there is additional demand for Product Supply beyond the quantities produced as a result of the allocation to the BIP Capacity under Section 6.1(a) above, then production shall be allocated among the RI Capacity and the BIOS Capacity according to the following formula. [*] (c) Example. By way of example only, assume that the respective capacities of the Subject Capacities as follows: BIP Capacity: [*] RI Capacity: [*] BIOS Capacity: [*] Total: [*] Assume further that (i) the worldwide demand for Product Supply is [*] per year, and (ii) the Parties must purchase [*] from BIP to meet their minimum contractual obligation under the Enbrel Supply Agreement. Production shall be allocated as follows: BIP Capacity: [*] RI Capacity: [*] BIOS Capacity: [*] Article 7. Manufacturing Strategy 7.1 Regulatory Approvals. - ---------- *Confidential Treatment Requested. 24 The Parties shall cooperate in good faith and use all commercially reasonable efforts to obtain approval from the applicable Regulatory Authorities for each Site to manufacture Bulk Drug Substance for each of the Major Markets. Immunex shall be responsible for all Regulatory Filings for each Site to enable each Site to manufacture Bulk Drug Substance for countries within the Immunex Territory as deemed necessary by Immunex, and Wyeth shall be responsible for all Regulatory Filings for each Site to enable each Site to manufacture Bulk Drug Substance for countries within the Wyeth Territory as deemed necessary by Wyeth. Each Party shall offer its reasonable assistance to the other Party in preparing any such Regulatory Filings. Each Party shall reimburse the other for [*] incurred by such other Party in connection with the performance of such other Party's obligations under the preceding sentence. The Parties shall attempt to obtain such approvals as quickly as practicable. The Parties shall attempt to qualify the Subject Capacity in those Major Markets where the qualification is reasonably likely to be obtained the earliest, as agreed upon by Immunex and Wyeth; provided, however, that the Parties shall simultaneously use all commercially reasonable efforts to qualify the Subject Capacity for manufacturing Bulk Drug Substance for use in the United States, the European Union, and Japan. 7.2 Raw Materials and Supplies. (a) General. Each Site shall be responsible for purchasing the raw materials and other supplies necessary to manufacture Bulk Drug Substance, Drug Product, and/or Finished Product, as applicable, at its location. The Parties shall, however, cooperate with regard to purchasing from specific suppliers, particularly sole source suppliers, and shall, when reasonably practicable, enter into joint contracts or other purchasing arrangements with suppliers, with the objective of obtaining more favorable pricing and other terms than if such Party was purchasing alone. In addition, the Parties shall cooperate in working with BIP in purchasing from such suppliers. The JSC shall direct the Parties' management of the relationship with common suppliers, and in the event that entering into a joint purchasing arrangement with a sole source supplier is not reasonably practicable, then the JSC shall oversee and direct each Party's individual contractual relationship with such supplier. Section 5.3 of the Quality Agreement addresses quality issues related to raw materials. (b) Shortage. [*] 7.3 Technology Transfer and License. Immunex and Wyeth shall enter into a technology transfer and license agreement simultaneously herewith setting forth the terms and conditions simultaneously herewith pursuant to which transfer of the technology for the Manufacturing Process to Wyeth will occur (the "Technology Transfer and License Agreement"). 7.4 Changes to the Product. (a) Process Changes. - ---------- *Confidential Treatment Requested. 25 (i) The Parties shall collaborate with regard to any process improvement efforts for the Manufacturing Process. The JSC shall make all decisions regarding joint investments for development work for process improvements, allocating costs of such development work if such costs are to be allocated other than as set forth in Section 3.05 of the TNFR Agreement, whether to implement any such jointly funded process improvements into the Manufacturing Process, the timing of such implementation at the various Sites, [*]. The JSC shall consider the requirements of all countries within the Territories in determining whether to jointly fund development work for process improvements. (ii) The Parties, through the JSC, shall cooperate in good faith to help ensure that, as improvements to the Manufacturing Process are implemented, [*]. (iii) Implementation of process changes is also addressed in Article 10 of the Quality Agreement. (b) Other Changes. The Parties' technical, production scheduling, regulatory and other appropriate personnel shall work together to coordinate other changes to the Product, including but not limited to formulation changes, presentation changes [*], and assay changes. The JSC shall provide general direction to the Parties with respect to the implementation and timing of such changes, with the objective of ensuring that (i) Product incorporating a particular change is available from one or more of the Sites to support the Major Markets where such change is approved, (ii) to the extent commercially practicable, Product not incorporating a particular change is available from one or more of the Sites to support the Major Markets where such change is not approved, and (iii) Product inventory is managed appropriately to accomplish (i) and (ii) above and to implement changes as efficiently as possible. Implementation of such changes is also addressed in Article 10 of the Quality Agreement. 7.5 Manufacturing Strategy. The Parties shall use commercially reasonable efforts to manufacture Bulk Drug Substance to meet [*] Regulatory Requirements in the Major Markets. [*] Any disputes regarding the foregoing shall be resolved as set forth in the Quality Agreement. 7.6 Quality Agreement. Immunex and Wyeth shall comply with the provisions of the Quality Agreement. To the extent possible, the provisions of the Quality Agreement shall be interpreted consistently with the provisions of this Agreement. - ---------- *Confidential Treatment Requested. 26 Article 8. Supply of Bulk Drug Substance Between Immunex and Wyeth 8.1 Supply of Bulk Drug Substance. Immunex shall supply Bulk Drug Substance to Wyeth from the RI Site, and Wyeth shall supply Bulk Drug Substance to Immunex from the BIOS Site, subject to the terms and conditions of this Agreement and the Quality Agreement. All Bulk Drug Substance supplied by Immunex or Wyeth hereunder shall conform to the provisions of the Quality Agreement, including, without limitation, the Specifications for such Bulk Drug Substance set forth in the Quality Agreement. 8.2 Forecasts. On the [*] after each Five-Year Plan is established pursuant to Section 4.2(c), each of Immunex and Wyeth shall provide to the other a One Year "Detailed Forecast Schedule" for the amount of [*] of Bulk Drug Substance, separated according to Type, to be delivered on delivery dates (the "Delivery Dates"), by [*], for the following Calendar Year. The Detailed Forecast Schedule shall be considered a "Firm Order" in accordance with the binding portion of the Five Year Plan. 8.3 Delivery. (a) Delivery Terms. Wyeth and Immunex shall each arrange for shipment of the Bulk Drug Substance to the other Party and/or its respective designee at the purchasing Party's expense, F.O.B. the purchasing Party's designated carrier, and in accordance with the purchasing Party's instructions, including instructions as to designated carrier(s) to utilize. Title to, and risk of loss of, the Bulk Drug Substance shall remain with the supplying Party until delivery to the designated carrier specified by the purchasing Party, at which time the purchasing Party shall assume risk of loss of the Bulk Drug Substance. (b) Filling Firm Orders. The supplying Party shall fulfill each Firm Order submitted pursuant to Section 8.2 above, for such quantities of Bulk Drug Substance specified in such Firm Order for each purchasing Party, on or before the specified Delivery Date applicable thereto and in accordance with any instructions of the purchasing Party; provided, however, that the Parties shall deliver Bulk Drug Substance in whole Bulk Drug Substance Lots. Notwithstanding anything herein to the contrary, if supply from a Bulk Drug Substance Lot is lower than expected, the deficiency shall not constitute a breach of an obligation to fulfill a Firm Order. If a Supply Shortage is in effect when such deficiency occurs, Immunex and Wyeth shall receive a reduced quantity of Bulk Drug Substance to accommodate such deficiency proportionately based on the allocation set forth in the applicable Five-Year Plan on a monthly basis. If a Supply Shortage is not in effect when such deficiency occurs, the deficient quantity shall be placed on backorder. (c) Delivery Schedule. The Parties will cooperate to maintain a non-binding rolling [*] delivery schedule. Such schedule shall be updated at least monthly - ---------- *Confidential Treatment Requested. 27 and will specify the quantity of and delivery dates for Bulk Drug Substance to be delivered in the next [*]. (d) Compliance. Each Party shall comply with all applicable laws and regulations regarding the transportation and shipment of the Bulk Drug Substance for all deliveries made by such Party pursuant to this Agreement. 8.4 Division of Orders for and Delivery of Allocated Supply. The Parties will use commercially reasonable efforts to deliver Product in accordance with the binding forecast (as described in Section 4.4) in each month of the Detailed Forecast Schedule, unless otherwise agreed by the Parties in writing. 8.5 Product Warranties. (a) Warranties by Wyeth. Wyeth hereby warrants to Immunex that the Bulk Drug Substance that Immunex purchases from Wyeth under this Agreement, at the time of sale and shipment by Wyeth: (i) shall conform to the provisions of the Quality Agreement, including, without limitation, the applicable Specifications for such Bulk Drug Substance; (ii) shall have been manufactured in compliance with all Regulatory Requirements in the United States; and (iii) shall be transferred free and clear of any liens or encumbrances of any kind related to Wyeth's activities hereunder. (b) Warranties by Immunex. Immunex hereby warrants to Wyeth that the Bulk Drug Substance that Wyeth purchases from Immunex under this Agreement, at the time of sale and shipment by Immunex: (i) shall conform to the provisions of the Quality Agreement, including, without limitation, the applicable Specifications for such Bulk Drug Substance; (ii) shall have been manufactured in compliance with all Regulatory Requirements in the Major Markets; and (iii) shall be transferred free and clear of any liens or encumbrances of any kind related to Immunex's activities hereunder. (c) Continuing Warranties. The warranties set forth in this Section 8.5(a) and (b) shall be continuing warranties and shall be applicable to all of the Bulk Drug Substance delivered by Wyeth or Immunex to the other Party pursuant to this Agreement. (d) Disclaimer. THE WARRANTIES SET FORTH IN SECTIONS 8.5(a) AND 8.5(b) ABOVE ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY AND ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE WARRANTIES EXPRESSED IN SECTIONS 8.5(a) AND 8.5(b) ABOVE, NEITHER PARTY MAKES ANY OTHER WARRANTY, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCT. 8.6 Validation. - ---------- *Confidential Treatment Requested. 28 Product and process validation shall be governed by Article 11 of the Quality Agreement. 8.7 Claims. (a) Notice of Claims. In the event that any of the Bulk Drug Substance supplied hereunder shall fail to conform with any warranty set forth in Section 8.5(a) or Section 8.5(b) hereof, the purchasing Party may reject the same by giving written notice thereof to the supplying Party within [*] days after shipment (or in the case of a latent defect, within [*] days after discovery of such latent defect, but in no case later than [*] after delivery to the designated carrier specified by the purchasing Party), which notice shall specify the manner in which such Bulk Drug Substance fails to conform to any warranty. In the alternative, rather than initially issuing a notice of rejection, the purchasing Party may give written notice to the supplying Party within the time period specified in this Section 8.7(a) of a decision by the purchasing Party to investigate whether a potentially nonconforming shipment should be rejected, which investigation shall, unless otherwise agreed upon by the Parties, be completed within the time period set forth in this Section 8.7(a). (b) No Supplier Liability. If it is determined by agreement of Immunex and Wyeth (or in the absence of such agreement, by a mutually acceptable qualified Third Party whose determination shall be binding on Immunex and Wyeth and whose fees shall be paid by the non-prevailing Party) that the nonconformity is due to damage to the Bulk Drug Substance caused by the purchasing Party or its agents subsequent to delivery of such Bulk Drug Substance by the supplying Party, the supplying Party shall have no liability to Purchaser with respect thereto. (c) Supplier Liability; Replacement Product. If it is determined by agreement of Immunex and Wyeth (or in the absence of such agreement, by a mutually acceptable qualified Third Party whose determination shall be binding on Immunex and Wyeth and whose fees shall be paid by the non-prevailing Party) that the nonconformity is caused by the supplying Party, the supplying Party shall as soon as reasonably possible replace such nonconforming Bulk Drug Substance with conforming Bulk Drug Substance, at no additional cost to the purchasing Party, and the supplying Party shall pay the full cost of disposal or return of such Bulk Drug Substance to the supplying Party. (d) Disposition of Nonconforming Product. In any case where a purchasing Party expects to make a claim against a supplying Party with respect to damaged or otherwise nonconforming Bulk Drug Substance, the purchasing Party shall not dispose of or allow to be disposed such Product without written authorization and instructions of the supplying Party either to dispose of or return to the supplying Party such Bulk Drug Substance. Upon written request by the purchasing Party, the supplying Party agrees promptly to give the purchasing Party such authorization and instructions within a reasonable period of time. - ---------- *Confidential Treatment Requested. 29 8.8 Manufacturing Audits, Regulatory Matters. (a) Manufacturing Audits. The Parties shall have the right to perform manufacturing audits as set forth in Sections 8.4 and 8.5 of the Quality Agreement. (b) Records. Each Party shall maintain records relating to the production of the Product hereunder in accordance with Section 7.6 of the Quality Agreement. Each Party agrees that, in response to any complaint or in the defense by the other Party of any litigation, hearing, regulatory proceeding or investigation relating to the Product, it shall use reasonable efforts to make available to the other Party during normal business hours and upon reasonable prior written notice, such Party's employees and records reasonably necessary to permit the effective response to, defense of, or investigation of such matters, subject to appropriate confidentiality protections. Each Party shall reimburse the other for [*] by such other Party in connection with the performance of such other Party's obligations under the preceding sentence. (c) Notification to Other Party of Regulatory Correspondence. Within [*] business days after receiving or finalizing such document, each of Immunex and Wyeth shall promptly notify the other Party in writing of, and shall provide each other with copies of, any correspondence and other documentation received or prepared by such Party in connection with receipt of a regulatory letter, warning, or similar item, from any Regulatory Authority related to an inspection of the RI Site or the BIOS Site, as applicable, that could affect production of the Product; (ii) any recall, market withdrawal or correction of any lot of any Product provided by such Party to the other Party hereunder; and (iii) any comments by a Regulatory Authority concerning the Product requiring a response or action by Immunex or Wyeth. 8.9 Recalls. (a) Immunex Territory. Each Party shall notify the other Party promptly (and, in any event, within [*] business days of receipt of written notice) if any Bulk Drug Substance, Finished Product, Drug Product, or Product Supply is alleged or proven to be the subject of a recall, market withdrawal or correction in any country in the Immunex Territory. Immunex and Wyeth shall cooperate in the handling and disposition of such recall, market withdrawal or correction in the Immunex Territory; provided, however, that in the event of disagreement as to any matters related to such recall, market withdrawal or correction, other than the determination of who shall bear the costs as set forth in the immediately following sentence, Immunex, after consultation with Wyeth, shall have final authority with respect to such matters in the Immunex Territory, which authority shall be exercised reasonably in and in good faith. Immunex shall bear the cost of all recalls, market withdrawals, or corrections of Bulk Drug Substance, Finished Product, Drug Product, or Product Supply in the Immunex Territory unless such recall, market withdrawal or correction shall have - ---------- *Confidential Treatment Requested. 30 been the result of any breach of Wyeth's covenants, representations, or warranties set forth in this Agreement or shall have been the result of Wyeth's grossly negligent breach of any of its obligations hereunder, in which case Wyeth shall, upon substantiation, bear the cost of such recall, market withdrawal, or correction. Immunex or its agent shall in all events be responsible for conducting any recalls, market withdrawals or corrections with respect to Bulk Substance, Finished Product, Drug Product, or Product Supply in the Immunex Territory. (b) Wyeth Territory. Each Party shall notify the other Party promptly (and, in any event, within [*] business days of receipt of written notice) if any Bulk Drug Substance, Finished Product, Drug Product, or Product Supply is alleged or proven to be the subject of a recall, market withdrawal or correction in any country in the Wyeth Territory. Immunex and Wyeth shall cooperate in the handling and disposition of such recall, market withdrawal or correction in the Wyeth Territory; provided, however, that in the event of disagreement as to any matters related to such recall, market withdrawal or correction, other than the determination of who shall bear the costs as set forth in the immediately following sentence, Wyeth, after consultation with Immunex, shall have final authority with respect to such matters in the Wyeth Territory, which authority shall be exercised reasonably in and in good faith. Wyeth shall bear the cost of all recalls, market withdrawals, or corrections of Bulk Drug Substance, Finished Product, Drug Product, or Product Supply in the Wyeth Territory unless such recall, market withdrawal or correction shall have been the result of any breach of Immunex's covenants, representations, or warranties set forth in this Agreement or shall have been the result of Immunex's grossly negligent breach of any of its obligations hereunder, in which case Immunex shall, upon substantiation, bear the cost of such recall, market withdrawal, or correction. Wyeth or its agent shall in all events be responsible for conducting any recalls, market withdrawals or corrections with respect to Bulk Substance, Finished Product, Drug Product, or Product Supply in the Wyeth Territory. 8.10 Safety Agreement. Immunex and Wyeth shall comply with the provisions of the Safety Agreement. To the extent possible, the provisions of the Safety Agreement shall be interpreted consistently with the provisions of this Agreement. In the event of a conflict between the provisions of the Safety Agreement and the provisions of this Agreement, the provisions of this Agreement shall control. Article 9. Pricing of Product Between the Parties 9.1 Standard Product Prices. (a) Calculation. For each Calendar Year (or portion thereof remaining in the Term) for which a Five-Year Plan is in effect, a "Standard Product Price" for 31 Bulk Drug Substance manufactured at each of the Sites will be established, [*], as further described below. A separate Standard Product Price shall be calculated for Bulk Drug Substance manufactured using [*], Bulk Substance manufactured using the T1 Process, and Bulk Drug Substance manufactured using the T2 Process, if each such Manufacturing Process is being used at one or more Sites, and all references to calculation or adjustment of the Standard Product Price shall include all such Standard Product Prices, if applicable. (i) RI Site and BIOS Site. For the RI Site and the BIOS Site, the Standard Product Price shall be calculated, for a particular Calendar Year, by [*] In such calculation, the Fully Absorbed Manufacturing Cost shall first be allocated between all Released Bulk Drug Substance for which the release is completed during such Calendar Year and Bulk Drug Substance that is Work In Process at the end of such Calendar Year. The Fully Absorbed Manufacturing Cost for all Released Bulk Drug Substance for which the release is completed during such Calendar Year shall be included, and the Fully Absorbed Manufacturing Cost for Bulk Drug Substance that is Work In Process at the end of such Calendar Year shall be carried over and used in calculating the Standard Product Price in the Calendar Year that such Bulk Drug Substance is released. The Standard Product Price for the RI Site and the BIOS Site shall not include any Excluded Supply, unless the Excluded Supply is manufactured in the same manufacturing facility at the Site as the Subject Capacity, in which case Excluded Supply shall be included in both subsections (A) and (B) of the calculation above. (ii) BIP Site. For Product manufactured at the BIP Site, the Standard Product Price for Bulk Drug Substance will be calculated, for a particular Calendar Year, by [*] The Standard Product Price shall be calculated for Bulk Drug Substance to be purchased by the Parties, whether purchased in the form of Bulk Drug Substance itself or as incorporated into Drug Product or Finished Product. If incorporated into Drug Product or Finished Product, the Standard Product Price will be calculated based on the portion of the price attributable to Bulk Drug Substance. (b) Schedule for Establishing Standard Product Prices. (i) BIP Site. Within [*] after the Effective Date, and thereafter on or before [*] of each Calendar Year, the Parties shall submit to each other in writing the total quantity of Product that each plans to purchase from BIP during the following Calendar Year in accordance with the binding Supply Allocation for such Calendar Year in the Five-Year Plan, along - ---------- *Confidential Treatment Requested. 32 with the cost of the Bulk Drug Substance used in such Product in U.S. dollars. The Parties shall cooperate in good faith in using such information to determine the Standard Product Price for Bulk Drug Substance for the BIP Site. (ii) RI and BIOS Sites. Immunex shall be responsible for establishing the Standard Product Price for the RI Site. Wyeth shall be responsible for establishing the Standard Product Price for the BIOS Site. Within [*] after the Effective Date, and thereafter on or before [*] of each Calendar Year, each Party shall submit to the other in writing (A) the Standard Product Price for the following Calendar Year for the Site(s) for which it bears responsibility according to the previous sentence, and (B) its planned purchases from the Site owned by the other Party (pursuant to the applicable Five-Year Plan issued by the JSC) during the following Calendar Year, and (c) the quantity of Bulk Drug Substance deriving from the Subject Capacity at its own Site that such Party plans to manufacture for its own use. (iii) Finalizing Standard Product Prices and Projected Blended Price. Within thirty (30) days after receiving the initial submissions pursuant to Section 9.1(b)(i) and (ii) above, and thereafter by no later than [*] of each subsequent Calendar Year, the Parties shall agree upon in writing (A) the Standard Product Prices for all of the Sites for the upcoming Calendar Year, and (B) the projected Blended Price for the upcoming Calendar Year. The JSC shall resolve any disputes between the Parties with regard to the Standard Product Prices and the projected Blended Price, and the Parties shall agree upon in writing no later than December 1 of each Calendar Year the Standard Product Prices for all Sites and the projected Blended Price for the upcoming Calendar Year. The Standard Product Prices and Blended Price shall be established in U.S. dollars, and the Parties' finance representatives shall negotiate in good faith to determine the exchange rate to be used in calculating the Standard Product Prices for the BIP Site and the BIOS Site. Each Party may enter into hedging contracts related to currency exchange, but such contracts will not be considered in calculation of the quarterly settlement pursuant to Section 9.3 below. (iv) Updating Standard Product Prices and Blended Price. Each Party shall [*] submit to the other Party any necessary adjustments to (a) the Standard Product Price for its Site, (b) the quantity and timing of its purchases from the BIP Site or the other Party's Site for the then-current Calendar Year, or (c) the quantity of Bulk Drug Substance deriving from the Subject Capacity at its own Site that such Party plans to manufacture for its own use. Each Party shall make such submissions updating such information for past, then-current, and future Calendar Quarters in the - ---------- *Confidential Treatment Requested. 33 then-current Calendar Year by no later than [*]. Based upon any such updated information, the Parties shall agree upon any updated Standard Product Prices (the "Adjusted Standard Product Price") and projected Blended Price for the then-ongoing Calendar Year. (c) Example. An example of the calculation of Standard Product Prices is set forth on Exhibit A1 attached hereto. 9.2 Purchase Price. A Party purchasing Bulk Drug Substance from one of the Sites hereunder during a Calendar Year shall pay the Standard Product Price applicable to such Site and to the form of the Manufacturing Process used to manufacture such Bulk Drug Substance (e.g., [*], the T1 Process, or the T2 Process) for such Calendar Year, as established pursuant to Section 9.1(b)(iii) above. Notwithstanding the foregoing, if the Standard Product Price for Bulk Drug Substance for the BIP Site differs from the applicable price due to BIP under the Enbrel Supply Agreement, the Party purchasing from BIP shall pay the amount therefor set forth in the Enbrel Supply Agreement. If, during such Calendar Year, the Standard Product Price for a Site is adjusted pursuant to Section 9.1(b)(iv) above, the original Standard Product Price established pursuant to Section 9.1(b)(iii) above shall continue to apply to purchases of Bulk Drug Substance from such Site, and settlement to the Adjusted Standard Product Price shall occur during the quarterly settlements described in Section 9.3(b) below. 9.3 Blended Price; Quarterly Settlement. (a) Adjustments to Projections. Within [*] following the end of each Calendar Quarter, each Party shall submit to the other Party the following information, if applicable and if not already submitted pursuant to Section 9.1(b)(iv) above: (i) Any adjustments to the quantity or price of Bulk Drug Substance for Product that such Party purchased from BIP, compared to the projections of such purchases that were used in calculating the Standard Product Price for the BIP Site for the applicable Calendar Year; (ii) Any adjustments to the quantity of Bulk Drug Substance that such Party purchased from the Site owned by the other Party, or to the quantity of Bulk Drug Substance manufactured at such Party's own Site for its own use, compared to the previous projections of such purchases that were used in calculating the Blended Price for the current Calendar Year; and (iii) Any adjustments to the Fully Absorbed Manufacturing Cost for Bulk Drug Substance manufactured at the Site owned by such Party, or the applicable Inventory Carrying Costs, compared to the projections made in calculating the Standard Product Price for such Site for such Calendar Year. - ---------- *Confidential Treatment Requested. 34 In addition, if a Party at any other time becomes aware of a material variance in actual performance, compared to projections used in calculating the Standard Product Price, for any of the items set forth in Sections 9.3(a)(i)-(iii) above, then such Party shall provide written notice to the other Party of such variance as soon as reasonably practicable, and the JSC shall make any necessary adjustments to the Standard Product Price and the Blended Price. (b) Settlement to Adjusted Standard Product Price. Each Calendar Quarter, according to the schedule set forth in Section 9.4 below, the finance representatives designed by the Parties as set forth in Section 9.5(b) shall settle Calendar Year-to-date purchases of Bulk Drug Substance, made at the initial Standard Product Prices, to the Adjusted Standard Product Prices. The settlement due from one Party to the other Party shall be calculated by: (i) determining the difference between (A) Calendar Year-to-date purchases, multiplied by the Adjusted Standard Product Price, and (B) Calendar Year-to-date purchases, multiplied by the Standard Product Price, and (ii) subtracting therefrom the previous Calendar Year-to-date settlements made to the Adjusted Standard Product Price under this Section 9.3(b). (c) Calculation of Blended Price and Settlement. Each Calendar Quarter, according to the schedule set forth in Section 9.4 below, the finance representatives designated by the Parties as set forth in Section 9.5(b) shall jointly make the following calculations. (i) The finance representatives shall calculate the Blended Price applicable to such Calendar Quarter, based on [*]. A separate Blended Price shall be calculated for Bulk Drug Substance manufactured using [*], Bulk Substance manufactured using the T1 Process, and Bulk Drug Substance manufactured using the T2 Process, if each such Manufacturing Process is being used at one or more Sites. (ii) The finance representatives shall determine the settlement due from one Party to another by calculating: (A) the difference between (I) the cumulative Calendar Year-to-date purchases of Bulk Drug Substance purchased by each Party from all Sites, multiplied by the Blended Price as calculated in Section 9.3(c)(i) above, and (II) the cumulative Calendar Year-to-date purchases of Bulk Drug Substance purchased by each Party from all Sites multiplied by the applicable Adjusted Product Prices, - ---------- *Confidential Treatment Requested. 35 (B) and subtracting therefrom the previous Calendar Year-to-date settlements made to the Blended Price under this Section 8.3(c). An example of the calculation of the Blended Price Settlement is set forth on Exhibits A2 and A3 attached hereto. 9.4 Consolidated Reporting and Forecasting. The finance representatives designated by the Parties as set forth in Section 9.5(b) shall jointly perform consolidated reporting for the Collaboration. The finance representatives will provide each other with financial information prepared in accordance with the terms contained in this Agreement for preparation of the consolidated reports according to the schedule set forth herein. The finance representatives shall negotiate in good faith to resolve any issues arising during the preparation of consolidated reports, if the issue cannot be resolved, shall refer such dispute to the JSC. Subject to resolution of any issues by the JSC, the consolidated reporting shall be binding on the Parties, subject to Section 11.2 below, and the Party who owes the other Party a cash settlement shall pay the other Party the amount owed no later than [*] days following the close of the Calendar Quarter at issue, as further set forth in Section 11.1 below. 9.5 Accounting and Financial Reporting. (a) Reporting. Each Party shall report costs in a manner consistent with GAAP, the terms hereof and such Party's project cost system. Each Party's financial representative will disclose the project cost system methodologies used, as well as any material changes thereto, to the other Party's financial representative. (b) Finance Representatives. Each Party shall appoint a representative from its finance department with expertise in the areas of accounting, cost allocation, budgeting, and financial reporting to assist in the matters addressed by this Article 9. Each such representative shall act as its Party's finance manager hereunder reporting to the JSC, with authority and responsibility for determining financial accounting and reporting methods, reports, budgets and forecasts. Such representatives shall also provide services to and consult with the JSC in order to address any financial, budgetary and accounting issues that arise in connection with each Five-Year Plan. Each Party may designate a substitute financial representative to perform such functions temporarily or may replace its designated financial representative at any time by providing notice thereof to the other Party. Article 10. Relationship with BIP, Catalytica, and Third Party Licensors 10.1 Relationship with BIP. [*] - ---------- *Confidential Treatment Requested. 36 10.2 Relationship with Catalytica. The Catalytica Supply Agreement sets forth the [*]. During the term of the Catalytica Supply Agreement, the Parties shall abide by the terms thereof [*]. Neither Party shall take any action with Catalytica that such Party knows would interfere with fulfillment of a Five-Year Plan established hereunder. 10.3 Third Party Royalties. Immunex has entered into certain license agreements that require royalties to be paid upon sales of Product Supply Units (collectively, the "Immunex License Agreements"). Immunex shall enter into sublicense agreements with Wyeth, pursuant to which Wyeth will receive certain rights and licenses to use the technology of the licensors' in the Immunex License Agreement (the "Sublicense Agreements"). Each Sublicense Agreement will state any fees or other obligations owed by Wyeth to Immunex in consideration for such rights and licenses. Article 11. Payment of Amounts Due; Audit 11.1 Payment of Amounts Due. (a) Invoices; Payment. Each Party shall invoice the other Party for any amounts owed pursuant to Article 9 hereunder. Subject to Section 11.1(c) below, such invoices shall be paid within [*] days after receipt thereof. Section 9.4 shall govern the procedure for payments between the Parties related to settlement to Blended Price; no invoices shall be required. All payments made by the Parties hereunder shall be made in U.S. dollars by bank wire transfer in immediately available funds to an account designated by the Party receiving payment. (b) Disputes. Any disputes concerning amounts due shall be referred to the finance representatives designated by the Parties as set forth in Section 9.5(b). The finance representatives shall negotiate in good faith to resolve any such disputes. If the finance representatives are unable to resolve any disputes concerning amounts due, they will refer such disputes to the JSC for resolution. (c) Late Payments. For any amounts that one Party owes to the other Party according to Section 9.4 or 11.1(a) above, and which the paying Party has not paid within the time period set forth in such section, the paying Party shall increase the amount otherwise due and payable by adding interest thereon, computed at the rate of [*] per annum, as of the date on which payment was due. 11.2 Audits and Interim Review. Each Party shall maintain accurate books and records in accordance with GAAP and the terms hereof, supporting the calculation of Standard Product Prices, Adjusted Standard Product Prices, quantities of Product purchased and sold by such Party, Blended Prices, and amounts invoiced and paid by such - ---------- *Confidential Treatment Requested. 37 Party pursuant to Section 11.1 above, for [*] years following the end of the Calendar Year to which such records pertain, or for such longer period required by an Immunex License Agreement, provided that Immunex notifies Wyeth of such longer period in writing. The period subject to audit will extend for a maximum period of [*] years preceding the then current Calendar Year. A Party, or its independent public accountants reasonably acceptable to the other Party, may have access to the books and records subject to audit of the other Party during normal business hours to conduct a review or audit of such books and records, solely and to the extent necessary to confirm the accuracy of the amounts reported and calculated in accordance with the terms hereof; provided, however, that a Party conducting such an audit must provide the other Party at least [*] days' prior written notice and may not conduct such an audit more than once in any [*] during the Term or more than once following the Term. Any payment made by the Party being audited to the other Party as a result of such an audit shall include interest from the date due, calculated as set forth in Section 11.1(b) above. Any such inspection or audit shall be at the expense of the Party conducting it; provided, however, that if such accountants reasonably determine that the Party conducting the audit has overpaid or underpaid the other Party by an amount equal to or greater than [*] percent [*] in the period of time within the scope of the audit, the other Party shall pay all reasonable fees and expenses incurred by such accountants in making such determination. Any accounting firm conducting such an audit shall enter into a confidentiality agreement reasonably acceptable to both Parties limiting the disclosure and use of information contained in such books and records. In the event that an audit performed in accordance with this Section 11.2 does not resolve the dispute between the Parties, then such dispute shall be referred to the JSC pursuant to Section 3.4 above. Article 12. Representations and Warranties; Limitation of Liabilities 12.1 Wyeth. Wyeth hereby represents and warrants to Immunex that: (a) Wyeth has the corporate power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder; and (b) Wyeth has taken all necessary corporate action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of Wyeth, and constitutes a legal, valid, binding obligation, enforceable against Wyeth in accordance with its terms. 12.2 Immunex. Immunex hereby represents and warrants to Wyeth that: - ---------- *Confidential Treatment Requested. 38 (a) Immunex has the corporate power and authority and the legal right to enter into this Agreement and to perform its obligations hereunder; and (b) Immunex has taken all necessary corporate action on its part to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of Immunex, and constitutes a legal, valid, binding obligation, enforceable against Immunex in accordance with its terms. Article 13. Indemnification 13.1 Indemnification by Immunex. Immunex shall indemnify, defend, and hold Wyeth, its Affiliates, and its and their respective directors, officers, employees and agents, harmless from and against all losses, damages, liabilities, settlements, penalties, fines, costs, and expenses (including, without limitation, reasonable attorneys' fees and expenses) (collectively, the "Liabilities") to the extent such Liabilities arise out of or result from (i) any claim, lawsuit or other action by a Third Party caused by the manufacture, use, handling, distribution, marketing, or sale of the Bulk Drug Substance, Drug Product, Finished Product, or Product Supply in the Immunex Territory, (ii) any material breach by Immunex of its representations, warranties, and covenants made hereunder, and/or (iii) Immunex's grossly negligent acts or omissions or willful misconduct. Notwithstanding the foregoing, Immunex's indemnification obligation hereunder shall not apply to the extent that any particular Liability arises out of or results from (y) any material breach by Wyeth of its representations, warranties, or covenants made hereunder, and/or (z) Wyeth's grossly negligent acts or omissions or willful misconduct. 13.2 Indemnification by Wyeth. Wyeth shall indemnify, defend, and hold Immunex, its Affiliates, and their respective directors, officers, employees, and agents harmless from and against all Liabilities arise out of or result from (i) any claim, lawsuit, or other action by a Third Party caused by the manufacture, use, handling, distribution, marketing, or sale of the Bulk Drug Substance, Drug Product, Finished Product, or Product Supply in the Wyeth Territory, (ii) any material breach by Wyeth of its representations, warranties, and covenants made hereunder, and/or (iii) Wyeth's grossly negligent acts or omissions or willful misconduct. Notwithstanding the foregoing, Wyeth's indemnification obligation hereunder shall not apply to the extent that any particular Liability arises out of or results from (y) any material breach by Immunex of its representations, warranties, or covenants made hereunder, and/or (z) Immunex's grossly negligent acts or omissions or willful misconduct. 13.3 Indemnification Procedures. A person (the "Indemnitee") which intends to claim indemnification under Section 13.1 or 13.2 hereof shall promptly notify the Party indemnifying hereunder (the "Indemnitor") in writing of any claim, lawsuit or other action in 39 respect of which the Indemnitee or any of its directors, officers, employees, agents or Affiliates intend to claim such indemnification. The Indemnitee shall permit, and shall cause its directors, officers, employees, agents, and Affiliates to permit, the Indemnitor, at its discretion, to settle any such claim, lawsuit or other action and agrees to the complete control of such defense or settlement by the Indemnitor; provided, however, that such settlement does not adversely affect the Indemnitee's rights hereunder or impose any obligations on the Indemnitee in addition to those set forth herein in order for it to exercise such rights. No such claim, lawsuit or other action shall be settled without the prior written consent of the Indemnitor and the Indemnitor shall not be responsible for any legal fees or other costs incurred other than as provided herein. The Indemnitee, its directors, officers, employees, agents and Affiliates shall cooperate fully with the Indemnitor and its legal representatives in the investigation and defense of any claim, lawsuit or other action covered by this indemnification. The Indemnitee shall have the right, but not the obligation, to be represented by counsel of its own selection and expense. Article 14. Term and Termination 14.1 Term. The initial term (the "Initial Term") of this Agreement shall begin as of the Effective Date and shall continue, unless earlier terminated as set forth in Section 14.2 below, until the later of (a) [*] years after the Effective Date, or (b) the expiration or termination of the Enbrel Supply Agreement. The Parties may extend this Agreement beyond the Initial Term for periods of [*] or more (any such period, an "Additional Term"), by mutual written agreement entered into by the Parties at least [*] years prior to the expiration of the Initial Term or Additional Term, as applicable. If an Additional Term is for a period of less than [*] years, the Parties may extend the Agreement beyond such Additional Term for periods of [*] or more by mutual written agreement entered into by the Parties at least [*] prior to the expiration of the Additional Term. The Initial Term plus any Additional Terms shall constitute the "Term" of this Agreement. 14.2 Termination. This Agreement may be terminated prior to the period set forth in Section 14.1 above as follows: (a) Mutual Agreement. This Agreement may be terminated in its entirety at any time upon mutual written agreement between Immunex and Wyeth signed by a duly authorized executive officer of each Party. (b) Material Breach. (i) This Agreement may be terminated in its entirety by either Immunex or Wyeth upon written notice to the other Party in the event of a material breach by the other Party which is not cured within [*] days from written - ---------- *Confidential Treatment Requested. 40 notice to the breaching Party specifying in reasonable detail the nature of such breach or longer if the breaching Party delivers a certificate that such material breach is not reasonably capable of being cured within [*] days and that the breaching Party is working diligently to cure such breach, but in no event shall the time for curing such breach exceed an additional [*] days. (ii) Except as expressly stated otherwise herein, remedies hereunder are cumulative, and nothing in this Agreement shall prevent either Party, in the case of a breach, from not terminating this Agreement and seeking to enforce its rights hereunder. 14.3 Consequences of Termination. (a) Amounts Outstanding. Expiration or termination of this Agreement for any reason shall not exempt either Immunex or Wyeth from paying to the other Party any amounts due to such Party under this Agreement and outstanding at the time of such expiration or termination. (b) Transitional Supply Obligation. In the event of termination of this Agreement by either Party pursuant to Section 14.2(b) above, the breaching Party shall, at the request of the non-breaching Party, continue to supply the Product to the non-breaching Party until such time as a new supplier for the Product has been approved by the applicable regulatory authorities in the non-breaching Party's Territory; provided, however, that unless otherwise agreed upon, the breaching Party shall not be required to supply the Product longer than [*]. The breaching Party shall supply the non-breaching Party with the quantities of Product that the breaching Party is obligated to supply according to the Supply Allocation included [*]. (c) Willful Breach. In the event that either Party willfully breaches its obligation to supply Product to the other Party in accordance with the terms set forth in Articles 4, 5, or 6 hereof, the non-breaching Party shall be entitled to recover its incidental, special, and consequential damages incurred as result of such willful breach, in addition to any other remedies that the non-breaching Party may have at law or in equity. EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE, NEITHER PARTY SHALL HAVE THE RIGHT TO RECOVER INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES ARISING FROM OR RELATED TO BREACH BY THE OTHER PARTY OF THIS AGREEMENT. 14.4 Specific Performance. The Parties agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the Parties shall be entitled to specific performance of the terms of this Agreement, in addition to any other remedy at law or equity. - ---------- *Confidential Treatment Requested. 41 14.5 Rights Not Exclusive. All rights to terminate, all rights upon termination, and all rights to seek specific performance are in addition to other remedies in law or equity that may be available to either Party. Article 15. Confidentiality 15.1 Confidentiality Obligations. Except as permitted elsewhere under this Agreement, each Party agrees to take Reasonable Steps (as defined in this Section 15.1) (a) to receive and maintain the Confidential Information of the other Party in confidence, (b) not to disclose such Confidential Information to any Third Party without the written consent of the disclosing Party, and (c) to promptly notify the disclosing Party upon learning of any law, rule, regulation, or court order that purports to compel disclosure of any Confidential Information of the disclosing Party and to reasonably cooperate with the disclosing Party, at the disclosing Party's expense, in the exercise of the disclosing Party's right to protect the confidentiality of such Confidential Information. Neither Party hereto shall use all or any part of the Confidential Information of the other Party for any purpose other than to perform its obligations under this Agreement. The Parties will take Reasonable Steps (as defined in this Section 15.1) to ensure that their employees, representatives, and agents comply with this provision, and will be responsible for any breach by such employees, representatives, and agents. As used herein, "Reasonable Steps" means at least the same degree of care that the receiving Party uses to protect its own Confidential Information, and in, any event, no less than reasonable care. 15.2 Exclusions. Nothing contained herein shall prevent a Party from disclosing Confidential Information pursuant to any applicable law, rule, regulation, or court order; provided, however, that such Party complies with the notice provisions of Section 15.1(c) to the extent permissible under applicable laws, rules, regulations, or court orders. Such disclosure shall not alter the status of such information hereunder for all other purposes as Confidential Information. 15.3 Remedies. Each Party acknowledges and agrees that the provisions of this Article 15 are reasonable and necessary to protect the other Party's interests in its Confidential Information, that any breach of the provisions of this Article 15 may result in irreparable harm to such other Party, and that the remedy at law for such breach may be inadequate. Accordingly, in the event of any breach or threatened breach of the provisions of this Article 15 by a party hereto, the other Party, in addition to any other relief available to it at law in equity or otherwise, shall be entitled to seek temporary and permanent injunctive relief restraining the breaching Party from engaging in and/or continuing any conduct that would constitute a breach of this Article 15, without the necessity of proving actual damages or posting a bond or other security. 42 15.4 Publications. No announcement, news release, public statement, publication, or presentation relating to the existence of this Agreement, the subject matter herein, or either Party's performance hereunder (collectively, a "Publication") shall be made without the other Party's prior approval; provided, however, that either Party may make such Publication or disclosure as is deemed necessary, in the reasonable judgment of the responsible Party, to comply with federal or state laws or regulations. Each Party agrees to submit such Publication it proposes to make to the other Party for purposes of such other Party's review and comment or, if required pursuant to this Section 15.4, approval. Any such disclosure will not contain confidential business or technical information of the other Party, unless if disclosure of such confidential business or technical information is required by law or regulation, in which case the disclosing Party will redact if permissible by such law or regulation, or otherwise make reasonable efforts to minimize such disclosure and obtain confidential treatment for any such information which is disclosed by requirement of such law or regulation. Except as otherwise required by such law or regulation, the Party whose Publication has been reviewed shall consider in good faith the removal of any information the reviewing Party reasonably deems to be inappropriate for disclosure. Each Party further agrees to respond as promptly as reasonably practicable to a proposed Publication in accordance with timelines agreed upon by the Parties, and likewise agrees that it shall not unreasonably withhold approval of such Publication. Article 16. Force Majeure 16.1 Effects of Force Majeure. Neither Immunex nor Wyeth shall be in breach of this Agreement if there is any failure of performance under this Agreement (except for payment of any amounts due hereunder) occasioned by any act of God, fire, act of government or state, war, civil commotion, insurrection, embargo, prevention from or hindrance in obtaining energy or other utilities, labor disputes of whatever nature or any other reason beyond the control and without the fault or negligence of the Party affected thereby (a "Force Majeure Event"). Such excuse shall continue as long as the Force Majeure Event continues. Upon cessation of such Force Majeure Event, the affected Party shall promptly resume performance hereunder. 16.2 Notice of Force Majeure. Each Party agrees to give the other Party prompt written notice of the occurrence of any Force Majeure Event, the nature thereof, and the extent to which the affected Party will be unable fully to perform its obligations hereunder. Each Party further agrees to use reasonable efforts to correct the Force Majeure Event as quickly as possible and to give the other Party prompt written notice when it is again fully able to perform such obligations. 43 16.3 Supply Shortage Caused by Force Majeure. If a Force Majeure Event occurs, the JSC shall determine whether it has caused a Supply Shortage, and if so, the JSC shall make any corresponding adjustments to the then-current Five-Year Plan. Article 17. Assignment 17.1 Assignment. This Agreement shall be binding upon the successors and assigns of each Party and the name of a Party appearing herein shall be deemed to include the names of its successors and assigns. Neither Party may assign its interest under this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld; provided, however, that either Party may assign its interest under this Agreement, without the prior written consent of the other Party, (a) to an Affiliate, so long as the assigning Party unconditionally guarantees the obligations of such Affiliate or (b) to a successor to the assigning Party's business by reason of merger, sale of all or substantially all of its assets or other form of acquisition, provided that such successor agrees in writing to assume all of the obligations of the assigning Party under this Agreement. Any purported assignment without a required consent shall be void. No assignment shall relieve either Party of responsibility for the performance of any obligation that accrued prior to the effective date of such assignment. 44 Article 18. Dispute Resolution 18.1 Dispute Resolution. The Parties recognize that a bona fide dispute as to certain matters may from time to time arise during the term of this Agreement that relates to a Party's rights and/or obligations hereunder. In the event of the occurrence of such a dispute, either Party may, by written notice to the other Party, have such dispute referred to their respective officers designated below, or their designees, for attempted resolution by good faith negotiations within thirty (30) days after such written notice is received. Such designated officers are as follows: For Immunex - Chief Operating Officer For Wyeth - President In the event the designated officers are not able to resolve such dispute within such thirty (30)-day period, or such other period of time as the Parties may mutually agree in writing, each Party shall have the right to pursue any and all remedies available at law or in equity. 18.2 Certain Disputes. Notwithstanding the foregoing, this Article 18 shall not apply to any disputes arising under Article 13 (Indemnification) or Article 15 (Confidentiality) hereunder. Disputes arising under the Quality Agreement shall be governed by the process set forth in Article 9 therein. Article 19. Miscellaneous 19.1 Notices. Any notice required or permitted to be given hereunder by either Party shall be in writing and shall be (a) delivered personally, (b) sent by registered mail, return receipt requested, postage prepaid, (c) sent by a nationally-recognized courier service guaranteeing next-day or second day delivery, charges prepaid, or (d) delivered by facsimile (with the original promptly sent by any of the foregoing manners), to the addresses or facsimile numbers of the other Party set forth below, or at such other addresses as may from time to time be furnished by similar notice by either Party. The effective date of any notice hereunder shall be the date of receipt by the receiving Party. If to Immunex: Immunex Corporation 51 University Street Seattle, Washington 98101 Attention: Chief Operating Officer Fax: (206) 292-9271 Phone: (206) 587-0430 45 with a copy to: Immunex Corporation 51 University Street Seattle, Washington 98101 Attention: General Counsel Fax: (206) 292-9271 Phone: (206) 587-0430 If to Wyeth: Wyeth-Ayerst Laboratories 555 E. Lancaster St. Davids, Pennsylvania 19807 Attention: Senior Vice President, Global Business Development Fax: (610) 688-9498 Phone: (610) 971-5809 with a copy to: American Home Products Corporation Five Giralda Farms Madison, New Jersey 07940 Attention: General Counsel Fax: (973) 660-7050 Phone: (973) 660-6040 19.2 Applicable Law. This Agreement shall be construed and the respective rights of the Parties determined in accordance with the laws of the State of New Jersey, without regard to conflicts of law. The Parties expressly exclude the application to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods. 19.3 Headings. The table of contents and all headings in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement. 19.4 Exhibits. All exhibits referred to herein form an integral part of this Agreement and are incorporated into this Agreement by such reference. 19.5 Severability. Both Parties hereby expressly agrees that they have no intention to violate any public policy, statutory or common laws, rules, regulations, treaty or decision of any government agency or executive body thereof of any country or community or association of countries; that if any word, sentence, paragraph, clause or combination thereof in this Agreement is found by a court or executive body with judicial powers having jurisdiction over this Agreement or either Party hereto, in a final unappealed order, to be in violation of any such provisions in any country or community or association of countries, such words, sentences, paragraphs, clauses or combination shall be inoperative in such country or community or association of countries and the remainder of this Agreement shall remain binding upon the Parties, so long as 46 enforcement of the remainder does not violate the Parties' overall intentions in this transaction. 19.6 Waiver. No waiver of any term, provision or condition of this Agreement whether by conduct or otherwise in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition or of any other term, provision or condition of this Agreement. 19.7 Construction. The Parties agree that each Party and its counsel has reviewed this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not apply to the interpretation of this Agreement. 19.8 Counterparts. This Agreement and any amendment hereto may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument. 19.9 Entirety; Amendments. This Agreement, including any exhibits attached hereto and referenced herein, constitutes the full understanding of the Parties and a complete and exclusive statement of the terms of their agreement with respect to the specific subject matter hereof, and no terms, conditions, understandings or agreements purporting to modify or vary the terms thereof shall be binding unless it is hereafter made in writing and signed by both Parties. The MOU is superceded by this Agreement and is of no further force and effect. After RI Approval, the Short-Term Allocation Agreement shall be superceded by this Agreement and shall be of no further force and effect. No modification to this Agreement shall be effected by the acknowledgment or acceptance of any purchase order or shipping instruction forms or similar documents containing terms or conditions at variance with or in addition to those set forth herein. In the event of a conflict between this Agreement and the exhibits hereto, the terms of this Agreement shall control. In the event of a conflict between this Agreement and the terms of the TNFR Agreement, the terms of this Agreement shall control. In the event of a conflict between this Agreement and the terms of the Enbrel Supply Agreement, the terms of the Enbrel Supply Agreement shall control. This Agreement may be amended and supplemented only by a written instrument signed by both Parties. [This space is intentionally left blank.] 47 IN WITNESS WHEREOF, Immunex and Wyeth have caused this Agreement to be executed as of the Effective Date. IMMUNEX CORPORATION AMERICAN HOME PRODUCTS CORPORATION, acting through its Wyeth-Ayerst Laboratories division By: /s/ David A. Mann By: /s/ Kenneth J. Martin ---------------------------------- --------------------------------- Name: David A. Mann Name: Kenneth J. Martin -------------------------------- ------------------------------- Executive Vice President and Title: Chief Financial Officer Title: Senior Vice President Finance ------------------------------- ------------------------------ Date: November 6, 2001 Date: November 6, 2001 -------------------------------- ------------------------------- 48 EX-99.1 5 dex991.txt IMMUNEX PRESS RELEASE DATED NOVEMBER 7, 2001 Exhibit 99.1 FOR IMMEDIATE RELEASE CONTACTS: Immunex November 7, 2001 Robin Shapiro (media) 206.389.4040 Mark Leahy (investors) 206.389.4363 American Home Products Doug Petkus (media) 610.902.7336 Immunex Moves to Create One of the World's Most Advanced Cell Culture Manufacturing Centers Company Accelerates Acquisition of Rhode Island Biotech Manufacturing Facility SEATTLE - Immunex Corporation [Nasdaq: IMNX] and American Home Products Corporation [NYSE: AHP] announced today that the companies intend to transfer ownership of the manufacturing facility in Rhode Island on or about January 1, 2002. The facility is being redesigned to produce ENBREL(R) (etanercept). U.S. Food and Drug Administration (FDA) approval of the facility is anticipated in the second half of 2002. "This manufacturing facility gives us greater commercial strength - positioning Immunex among the world's largest, fully integrated biopharmaceutical companies," said Peggy Phillips, Immunex chief operating officer and executive vice president. "It is the foundation of one of the world's largest cell culture manufacturing centers." Immunex will submit the FDA license application and, upon agency approval, the Rhode Island facility will become a licensed manufacturing site for commercial supply of ENBREL. The accelerated transfer of the facility will allow the company to streamline the completion of validation processes and conformance runs necessary to receive FDA approval. "We are proud of the work we did to turn this facility into a state-of-the-art manufacturing site," said L. Patrick Gage, President, Wyeth-Ayerst Research (the pharmaceutical division of AHP). "It is now ready to be integrated into the Immunex organization and will be one of the largest protein manufacturing facilities in the world." Efi Cohen-Arazi, senior vice president of supply operations at Immunex said, "The early transfer also allows us to manage the development of the new biotech manufacturing center in Rhode Island and to continue to build our team of highly skilled biotechnology manufacturing professionals." The facility is expected to cost more than $450 million when completed. This includes the acquisition of the 75-acre site and current manufacturing facility. In addition, more than 320 current employees at the plant will join the Immunex team. Located in West Greenwich, RI, the current 250,000 square foot facility is being redesigned for the manufacture of ENBREL. This work involves the design and installation of hundreds of pieces of equipment, including: eight commercial-scale bioreactors; more than 25 miles of stainless steel pipe; and approximately 240 miles of electrical wire. The transfer of the facility to Immunex is subject to customary regulatory approvals. Pending approval of permits, Immunex expects to break ground this fall on a second cell culture manufacturing facility at this same location. The BioNext Project(TM) will be a 500,000 square foot facility. When the facility is completed, which is estimated to be in 2005, it will provide employment for approximately 350 additional people. The two manufacturing plants are expected to comprise the largest cell culture manufacturing center in the world. About ENBREL Immunex recently reported that several important milestones for ENBREL were achieved in the last quarter: o Record quarterly sales of ENBREL totaled $198.1 million. The company is managing access to the drug through the ENBREL Enrollment Program because current demand is greater than available supply. o The first manufacturing process improvement for ENBREL was filed with the U.S. Food and Drug Administration (FDA). Upon FDA approval, Immunex expects to implement this process throughout 2002 and projects that it may increase the yield of ENBREL by 10 to 30 percent, augmenting overall supply of the drug next year. o ENBREL was granted priority review for a potential new indication in psoriatic arthritis by the FDA. Thus, the regulatory agency agreed to act on the application by mid-January 2002. Psoriatic arthritis is a disease which affects more than 300,000 people in the United States (U.S.) and there is currently no therapy approved by the FDA to treat the disease. o Positive Phase 2 results with ENBREL in moderate to severe psoriasis, a serious skin disease affecting more than one million people in the U.S., were announced. Data from this Phase 2 study of 112 patients will be presented at a medical meeting in 2002. Immunex Corporation is a leading biopharmaceutical company dedicated to improving lives through immune system science innovations. NOTE: Except for the historical information contained herein, this news release contains forward-looking statements that involve substantial risks and uncertainties. Among the factors that could cause actual results or timelines to differ materially are risks associated with research and clinical development, regulatory approvals, our supply capabilities and reliance on third-party manufacturers, product commercialization, competition, litigation and other risk factors listed from time to time in reports filed by Immunex with the SEC, including but not limited to risks described under the caption "Important Factors That May Affect Our Business, Our Results of Operations and Our Stock Price" within our most recently filed Form 10-Q. The forward-looking statements contained in this news release represent our judgment as of the date of this release. Immunex undertakes no obligation to publicly update any forward-looking statements. # # # -----END PRIVACY-ENHANCED MESSAGE-----