Exhibit 10.98

Portions of this exhibit marked [*] are omitted and are requested to be treated
confidentially.

TRADEMARK LICENSE AGREEMENT (ALFA TO SALIX)

dated August 6, 2012

by and between

ALFA WASSERMANN HUNGARY KFT.

and

SALIX PHARMACEUTICALS, INC.

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TABLE OF CONTENTS

 

         Page  

Article 1 - CERTAIN DEFINITIONS

     1   

Article 2 - LICENSE GRANT AND COMPENSATION

     2   

2.1

 

Xifaxan Trademark License

     2   

2.2

 

Crohn’s EIR Trademark License

     3   

2.3

 

Other EIR Trademarks License

     4   

2.4

 

New Indication Trademark License

     4   

2.5

 

[*] Trademark License

     5   

2.6

 

Sublicenses

     6   

2.7

 

Availability of Xifaxan Trademark

     6   

2.8

 

Trademark Royalties

     7   

2.9

 

Records

     8   

Article 3 - SALIX’S OBLIGATIONS

     9   

3.1

 

Acknowledgment

     9   

3.2

 

Salix’s Obligations

     10   

Article 4 - XIFAXAN DOMAIN NAMES

     10   

4.1

 

Xifaxan Domain Name

     10   

4.2

 

Other Alfa Domain Names

     13   

Article 5 - COVENANTS

     13   

5.1

 

Registration of Alfa Licensed Trademarks

     13   

5.2

 

Infringement of Alfa Licensed Trademarks

     14   

5.3

 

Acknowledgments

     15   

5.4

 

Creative Works

     15   

5.5

 

Goodwill

     15   

Article 6 - REPRESENTATIONS AND WARRANTIES

     16   

6.1

 

AWH’s Representations

     16   

6.2

 

Disclaimers of Representations and Warranties

     16   

Article 7 - FORCE MAJEURE

     17   

Article 8 - COMMENCEMENT, DURATION AND TERMINATION

     17   

8.1

 

Term of Agreement

     17   

8.2

 

Termination

     17   

8.3

 

Effect of Termination

     18   

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

i

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Article 9 - INDEMNIFICATION AND DAMAGES

     19   

9.1

 

In Favor of Salix

     19   

9.2

 

In Favor of AWH

     19   

9.3

 

Indemnification Procedures

     19   

Article 10 - DISPUTE RESOLUTION

     21   

10.1

 

Good Faith Discussions

     21   

10.2

 

Arbitration

     21   

10.3

 

Exceptions

     22   

Article 11 - ASSIGNMENT

     22   

11.1

 

Binding Effect

     22   

11.2

 

Assignment by AWH

     22   

11.3

 

Assignment by Salix

     22   

Article 12 - ENTIRE AGREEMENT AND MODIFICATION

     23   

Article 13 - LANGUAGE AND GOVERNING LAW

     23   

13.1

 

English Language

     23   

13.2

 

Governing Law

     23   

Article 14 - WAIVER

     23   

Article 15 - NOTICES

     23   

Article 16 - SEVERABILITY

     25   

Article 17 - HEADINGS AND CONSTRUCTION

     25   

17.1

 

Headings

     25   

17.2

 

References

     25   

17.3

 

Rules of Construction

     25   

Article 18 - COUNTERPARTS

     25   

Article 19 - MUTUAL DRAFTING

     25   

Article 20 - THIRD PARTY RIGHTS

     25   

Article 21 - RELATIONSHIP OF THE PARTIES

     26   

Article 22 - PERFORMANCE BY AFFILIATES

     26   

Article 23 - FURTHER ASSURANCE

     26   

 

ii

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TRADEMARK LICENSE AGREEMENT

TRADEMARK LICENSE AGREEMENT (this “Agreement”) dated August 6, 2012 by and among
Alfa Wassermann Hungary Kft., a corporation organized under the laws of Hungary
(“AWH”), and Salix Pharmaceuticals, Inc., a corporation incorporated under the
laws of the State of California, United States of America (“Salix”) (each, a
“Party” and, collectively, the “Parties”).

WITNESSETH:

WHEREAS, Salix and Alfa Wassermann S.p.A., a corporation incorporated under the
laws of Italy (“AWSPA”) and an Affiliate of AWH, have entered into an Amended
and Restated License Agreement of even date herewith (the “Amended and Restated
License Agreement”);

WHEREAS, the Amended and Restated License Agreement provides in part for the
license by AWSPA to Salix of certain patent rights and unpatented technology
rights for the purpose of enabling Salix to sell Alfa Licensed Products within
the Field in the Salix Territory; and

WHEREAS, pursuant to the licenses granted herein by AWH to Salix, Salix wishes
to use certain AWH trademarks to Exploit the Alfa Licensed Products and
Rifaximin Products containing [*] of the Compound in the Salix Territory within
the Field and AWH desires to license such trademarks to Salix;

NOW THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, the Parties hereby agree as follows:

Article 1 - CERTAIN DEFINITIONS

All capitalized terms used herein without definitions have the respective
meanings set forth in the Amended and Restated License Agreement and are
incorporated in this Agreement by reference.

“Alfa Licensed Trademarks” means the Xifaxan Trademark, the Crohn’s EIR
Trademark, the Other EIR Trademarks, the New Indication Trademarks and [*]
Trademarks.

“Alfa Standards” has the meaning set forth in Section 4.1(g).

“[*] Trademarks” has the meaning set forth in Section 2.5(a).

“Claimant” has the meaning set forth in Section 9.3(a).

“Continuing Trademark License Option” has the meaning set forth in Section 2.8.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

1

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“Creative Works” has the meaning set forth in Section 5.4.

“Crohn’s EIR Trademark” has the meaning set forth in Section 2.2(a).

“ICC” has the meaning set forth in Section 10.2.

“Indemnitor” has the meaning set forth in Section 9.3(a).

“Losses” has the meaning set forth in Section 9.1.

“New Indication Trademarks” has the meaning set forth in Section 2.4(a).

“Other Alfa Domain Names” means all Internet domain names containing any Crohn’s
EIR Trademark, Other EIR Trademark, New Indication Trademark or [*] Trademark,
or any alternative spellings of any such Alfa Licensed Trademark.

“Other EIR Trademarks” has the meaning set forth in Section 2.3(a).

“Salix Non-Royalty Product” means, on a country-by-country and Rifaximin
Product-by-Rifaximin Product basis, an Alfa Licensed Product, a Crohn’s EIR
Product or a Rifaximin Product containing [*] of the Compound, as applicable, as
to which Salix’s obligation to pay royalties to AWSPA pursuant to Section 4.1 or
Section 4.3.3(e)(ii), respectively, of the Amended and Restated License
Agreement in the relevant country has expired or terminated pursuant to
Section 16.2.1 or Section 4.3.3(e)(ii), respectively, of the Amended and
Restated License Agreement.

“Xifaxan Domain Names” has the meaning set forth in Section 4.1(a).

“Xifaxan Trademark” means the XIFAXAN and XIFAXAN 550 marks and any current or
future registrations or applications for the registration thereof, including
(i) [*], (ii) [*], (iii) [*], and (iv) [*].

“Xifaxan Web Site” has the meaning set forth in Section 4.1(e).

Article 2 - LICENSE GRANT AND COMPENSATION

2.1 Xifaxan Trademark License.

(a) AWH hereby grants to Salix (i) an exclusive (including with respect to AWH,
AWSPA and their Affiliates) license (with the right to sublicense as set forth
herein) to use the Xifaxan Trademark to Exploit (but not to Manufacture or have
Manufactured) the Alfa Licensed Products (other than the Crohn’s EIR Product and
Other EIR Products) for Existing Indications within the Field in the Salix
Territory and (ii) a non-exclusive license (with the right

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

2

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to sublicense as set forth herein) to use the Xifaxan Trademark in connection
with the Manufacture of Alfa Licensed Products (other than the Crohn’s EIR
Product and Other EIR Products) solely for purposes of Exploitation of such Alfa
Licensed Products for Existing Indications within the Field in the Salix
Territory, subject in each case ((i) and (ii)) to compliance with the terms of
this Agreement, the Supply Agreements, and the Amended and Restated License
Agreement.

(b) Salix shall have the right to sublicense the rights granted to it in
Section 2.1(a) through multiple tiers of sublicensees to any party to whom Salix
(or its sublicensee) grants a sublicense under the Existing Indications License
in Section 4.1.1 of the Amended and Restated License Agreement, subject to
Section 2.6 of this Agreement.

(c) The term of the license granted under Section 2.1(a) shall continue on a
country-by-country and Alfa Licensed Product-by-Alfa Licensed Product basis
until the relevant Alfa Licensed Product becomes a Salix Non-Royalty Product in
the relevant country, at which time Salix shall have an option to retain the
license granted under Section 2.1(a) for such Alfa Licensed Product in such
country, as set forth in Section 2.8.

2.2 Crohn’s EIR Trademark License.

(a) AWH, in consultation with Salix, shall select the trademark to be used in
connection with the Exploitation of the Crohn’s EIR Product in the Salix
Territory (the “Crohn’s EIR Trademark”). The Crohn’s EIR Trademark shall be
owned by AWH.

(b) AWH hereby grants to Salix (i) an exclusive (including with respect to AWH,
AWSPA and their Affiliates) license (with the right to sublicense as set forth
herein) to use the Crohn’s EIR Trademark to Exploit (but not to Manufacture or
have Manufactured) the Crohn’s EIR Product within the Field in the Salix
Territory and (ii) a non-exclusive license (with the right to sublicense as set
forth herein) to use the Crohn’s EIR Trademark in connection with the
Manufacture of Crohn’s EIR Product solely for purposes of Exploitation of
Crohn’s EIR Product within the Field in the Salix Territory, subject in each
case ((i) and (ii)) to compliance with the terms of this Agreement and the
Amended and Restated License Agreement.

(c) Salix shall have the right to sublicense the rights granted to it in
Section 2.2(b) through multiple tiers of sublicensees to any party to whom Salix
(or its sublicensee) grants a sublicense under the Crohn’s EIR License, subject
to Section 2.6 of this Agreement.

(d) The term of the license granted under Section 2.2(b) shall continue on a
country-by-country and product-by-product basis until the relevant Crohn’s EIR
Product becomes a Salix Non-Royalty Product in the relevant country, at which
time Salix shall have an option to retain the license granted under
Section 2.2(b) for such Crohn’s EIR Product in such country, as set forth in
Section 2.8. Without limiting the generality of the foregoing, the license
granted under Section 2.2(b) shall terminate if Salix elects to terminate its
license to Exploit the Crohn’s EIR Product pursuant to Section 16.4.4 of the
Amended and Restated License Agreement or if AWSPA terminates Salix’s rights
with respect to the Crohn’s EIR Product and the Crohn’s EIR License pursuant to
Section 16.4.5 of the Amended and Restated License Agreement.

 

3

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2.3 Other EIR Trademarks License.

(a) AWH, in consultation with Salix, shall select the trademarks to be used in
connection with the Exploitation of the Other EIR Products in the Salix
Territory (the “Other EIR Trademarks”). The Other EIR Trademarks shall be owned
by AWH.

(b) AWH hereby grants to Salix (i) an exclusive (including with respect to AWH,
AWSPA and their Affiliates) license (with the right to sublicense as set forth
herein) to use the Other EIR Trademarks to Exploit (but not to Manufacture or
have Manufactured) the Other EIR Products within the Field in the Salix
Territory and (ii) a non-exclusive license (with the right to sublicense as set
forth herein) to use the Other EIR Trademarks in connection with the Manufacture
of Other EIR Products solely for purposes of Exploitation of Other EIR Products
within the Field in the Salix Territory, subject in each case ((i) and (ii)) to
compliance with the terms of this Agreement and the Amended and Restated License
Agreement.

(c) Salix shall have the right to sublicense the rights granted to it in
Section 2.3(b) through multiple tiers of sublicensees to any party to whom Salix
(or its sublicensees) grants a sublicense under the Existing Indications EIR
License or the Salix New Indications License, subject to Section 2.6 of this
Agreement.

(d) The term of the license granted under Section 2.3(b) shall continue on a
country-by-country and Alfa Licensed Product-by-Alfa Licensed Product basis
until the relevant Alfa Licensed Product becomes a Salix Non-Royalty Product in
the relevant country, at which time Salix shall have an option to retain the
license granted under Section 2.3(b) for such Alfa Licensed Product in such
country, as set forth in Section 2.8. Without limiting the generality of the
foregoing, the license granted under Section 2.3(b) shall terminate if Salix
elects to terminate its license to Exploit the Crohn’s EIR Product pursuant to
Section 16.4.4 of the Amended and Restated License Agreement or if AWSPA
terminates Salix’s rights with respect to the Existing Indications EIR License
pursuant to Section 16.4.5 of the Amended and Restated License Agreement.

2.4 New Indication Trademark License.

(a) AWH, in consultation with Salix, shall select the trademarks to be used in
connection with the Exploitation of Alfa Licensed Products (other than Crohn’s
EIR Product or Other EIR Products) for New Indications in the Salix Territory
(the “New Indication Trademarks”). For clarity, New Indication Trademarks shall
not include the Crohn’s EIR Trademark or the Other EIR Trademarks. The New
Indication Trademarks shall be owned by AWH.

(b) AWH hereby grants to Salix (i) an exclusive (including with respect to AWH,
AWSPA and their Affiliates) license (with the right to sublicense as set forth
herein) to use the New Indication Trademarks to Exploit (but not to Manufacture
or have Manufactured)

 

4

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Alfa Licensed Products (other than Crohn’s EIR Product or Other EIR Products)
for New Indications within the Field in the Salix Territory and (ii) a
non-exclusive license (with the right to sublicense as set forth herein) to use
the New Indications Trademarks in connection with the Manufacture of Alfa
Licensed Products (other than Crohn’s EIR Product or Other EIR Products) for New
Indications solely for purposes of Exploitation of such Alfa Licensed Products
within the Field in the Salix Territory, subject in each case ((i) and (ii)) to
compliance with the terms of this Agreement and the Amended and Restated License
Agreement.

(c) Salix shall have the right to sublicense the rights granted in
Section 2.4(b) through multiple tiers of sublicensees to any party to whom Salix
(or its sublicensee) grants a sublicense under the Salix New Indications
License, subject to Section 2.6 of this Agreement.

(d) The term of the license granted under Section 2.4(b) shall continue on a
country-by-country and Alfa Licensed Product-by-Alfa Licensed Product basis
until the relevant Alfa Licensed Product becomes a Salix Non-Royalty Product in
the relevant country, at which time Salix shall have an option to retain the
license granted under Section 2.4(b) for such Alfa Licensed Product in such
country, as set forth in Section 2.8.

2.5 [*] Trademark License.

(a) AWH, in consultation with Salix, shall select the trademarks to be used in
connection with the Exploitation of Rifaximin Products containing [*] of the
Compound in the Field in the Salix Territory (the “[*] Trademarks”). The [*]
Trademarks shall be owned by AWH.

(b) AWH hereby grants to Salix (i) an exclusive (including with respect to AWH,
AWSPA and their Affiliates) license (with the right to sublicense as set forth
herein) to use the [*] Trademarks to Exploit (but not to Manufacture or have
Manufactured) Rifaximin Products containing [*] of the Compound within the Field
in the Salix Territory and (ii) a non-exclusive license (with the right to
sublicense as set forth herein) to use the [*] Trademarks in connection with the
Manufacture of Rifaximin Products containing [*] of the Compound solely for
purposes of Exploitation of such Rifaximin Products within the Field in the
Salix Territory, subject in each case ((i) and (ii)) to compliance with the
terms of this Agreement and the Amended and Restated License Agreement.

(c) Salix shall have the right to sublicense the rights granted in
Section 2.5(b) through multiple tiers of sublicensees to any party to whom Salix
(or its sublicensee) grants a license to Exploit Rifaximin Products containing
[*] of the Compound in the Field in the Salix Territory, subject to Section 2.6
of this Agreement.

(d) The term of the license granted under Section 2.5(b) shall continue on a
country-by-country and Rifaximin Product-by-Rifaximin Product basis until the
relevant Rifaximin Product becomes a Salix Non-Royalty Product in the relevant
country, at which time Salix shall have an option to retain the license granted
under Section 2.5(b) for such Rifaximin Product in such country, as set forth in
Section 2.8.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

5

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2.6 Sublicenses.

(a) The terms of any sublicense granted by Salix under the rights granted to it
in this Agreement shall be in accordance with the terms of the particular
license granted to Salix hereunder. Salix shall comply with the provisions of
Section 4.1.6 of the Amended and Restated License Agreement (which is
incorporated in this Agreement by reference) in connection with all such
sublicenses.

(b) Salix shall be responsible to AWH for its sublicensees’ compliance with the
terms of this Agreement. Any failure by a sublicensee to comply with such terms
shall be deemed to be a breach of this Agreement by Salix.

(c) For the avoidance of doubt, it is hereby acknowledged that the appointment
by Salix of a distributor for Rifaximin Products, any manufacturer to
Manufacture Compound (including EIR Formulation) or Rifaximin Products to the
extent permitted under the Amended and Restated License Agreement and the Supply
Agreements, or of any Third Party to assist in the Development and the obtaining
of Marketing Approvals for Rifaximin Products shall not be deemed to constitute
the appointment of any sublicensee or the sublicense by Salix of any rights
under this Agreement.

2.7 Availability of Xifaxan Trademark.

(a) With respect to the trademarks to be used in connection with the
Exploitation of Alfa Licensed Products or Crohn’s EIR Products by Salix in the
Field in the Salix Territory under Sections 2.2 through 2.4 or the Exploitation
of Rifaximin Products containing [*] of the Compound by Salix in the Field in
the Salix Territory under Section 2.5, the Parties agree that the Xifaxan
Trademark shall be available for use by Salix as a Crohn’s EIR Trademark, an
Other EIR Trademark, a New Indication Trademark, or an [*] Indication Trademark,
as the case may be.

(b) With respect to the trademarks to be used in connection with the
Exploitation by Salix in the Field in the Salix Territory of Rifaximin Products
licensed by Salix to AWSPA pursuant to Section 4.2.1 of the Amended and Restated
License Agreement, the Salix Designated Indication Product or Other New
Formulation Products, the Parties will, subject to the following sentence,
determine by mutual agreement whether the Xifaxan Trademark shall be available
for such use by Salix. In the event that any Regulatory Authority in the Salix
Territory requires the use of the Xifaxan Trademark in connection with the
Exploitation by Salix in the Field in the Salix Territory of Rifaximin Products
licensed by Salix to AWSPA pursuant to Section 4.2.1 of the Amended and Restated
License Agreement, the Salix Designated Indication

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

6

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Product or Other New Formulation Products or the Parties determine that the
commercial potential of any such product would be enhanced in the Field in the
Salix Territory by the use of the Xifaxan Trademark in connection with the
Exploitation by Salix in the Field in the Salix Territory of the relevant
product, then the Parties shall cooperate and negotiate in good faith to
structure arrangements pursuant to which the Xifaxan Trademark will be made
available for the Exploitation of the relevant product by Salix in the Field in
the Salix Territory on terms that preserve the relative economic arrangements
envisioned by the Amended and Restated License Agreement and the Trademark
License Agreements had a trademark other than the Xifaxan Trademark been used
for purposes of the Exploitation of the relevant product by Salix in the Field
in the Salix Territory.

(c) In the event that the Parties determine to use the Xifaxan Trademark in
connection with the Exploitation by AWSPA in the Field in the Alfa Territory of
Rifaximin Products licensed by Salix to AWSPA pursuant to Section 4.2.1 of the
Amended and Restated License Agreement, the Salix Designated Indication Product
or Other New Formulation Products, then the Parties shall cooperate and
negotiate in good faith to structure arrangements pursuant to which the Xifaxan
Trademark will be made available for the Exploitation of the relevant product by
AWSPA in the Field in the Alfa Territory on terms that preserve the relative
economic arrangements envisioned by the Amended and Restated License Agreement
and the Trademark License Agreements had a trademark other than the Xifaxan
Trademark been used for purposes of the Exploitation of the relevant product by
AWSPA in the Field in the Alfa Territory.

2.8 Trademark Royalties.

(a) No royalty shall be payable by Salix to AWH with respect to any of the
licenses granted under Sections 2.1 through 2.5, except as set forth in this
Section 2.8. With respect to each Alfa Licensed Product, Crohn’s EIR Product or
Rifaximin Product containing [*] of the Compound that becomes a Salix
Non-Royalty Product in a particular country, Salix shall have the option to
continue to use the respective Alfa Licensed Trademarks associated with such
Rifaximin Product in such country (the “Continuing Trademark License Option”).
Salix may exercise the Continuing Trademark License Option by delivering a
written notice of exercise to AWH within [*] days following the date of notice
given by AWPSA to Salix that Salix’s obligation to pay royalties on the relevant
Rifaximin Product in a particular country has expired or terminated pursuant to
Section 16.2.1 or Section 4.3.3(e)(ii), as applicable, of the Amended and
Restated License Agreement. If the Continuing Trademark License Option is
exercised by Salix, the exclusive (and sublicensable) license granted to Salix
with respect to such Alfa Licensed Trademark(s) pursuant to Sections 2.1 through
2.5 above, as applicable, shall continue in respect of such Salix Non-Royalty
Product until terminated as provided herein, provided that Salix shall pay
royalties for the continued use of such Alfa Licensed Trademark(s) thereafter in
respect of such Salix Non-Royalty Product in such country in an amount equal to
[*] percent ([*]%) of the Net Sales of the Salix Non-Royalty Product in such
country. Salix may at any time thereafter notify AWH or its Affiliate (including
AWSPA) in writing that it wishes to terminate

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

7

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the specific license granted under Sections 2.1 through 2.5 above for the
applicable Alfa Licensed Trademark(s) with respect to the Salix Non-Royalty
Product in any country, in which case Salix shall have no further right to use
such respective Alfa Licensed Trademark(s) in connection with such Salix
Non-Royalty Product in such country, and Salix shall timely pay all royalties
due on Net Sales made up to and including the date of termination and thereafter
shall have no further obligation to pay royalties in respect of such Salix
Non-Royalty Product in such country.

(b) Within [*] days of the end of each calendar quarter (such quarters to end on
the last days of March, June, September and December in each Calendar Year),
Salix shall submit to AWH a written report setting out the details of all of its
Net Sales in such calendar quarter that are subject to a royalty under this
Agreement. Such report shall include a calculation of the Net Sales on a
country-by-country and product-by-product basis and the royalties payable
thereon. Following receipt of such report, AWH shall issue to Salix an invoice
for the amount of royalties set forth in Salix’s report. Invoices shall be due
and payable not later than [*] days after receipt of such invoice by Salix. In
the event that any payment due hereunder shall not be paid by the due date, then
such payment shall from the due date until the actual date of payment bear
interest at the annual rate of [*] percent ([*]%) above the official prime rate
published by [*], or, if [*] ceases to publish a prime rate, such other United
States banking institution as the Parties shall agree upon. All payments to be
made hereunder shall be made in United States Dollars by [*] wire transfer to
such bank as AWH shall designate in writing. Except as expressly stated in this
Agreement, Salix shall not be entitled in any circumstances to withhold any
money due to AWH under the terms of this Agreement in respect of any possible
(justified or unjustified) claims against AWH or AWSPA related to this
Agreement, the Amended and Restated License Agreement, or any of the other
Related Agreements. All bank transfer and wire charges imposed on payments made
by Salix under this Agreement shall be borne by Salix.

(c) All payments under this Agreement shall be made without any deduction or
withholding of or on account of any tax, duties, levies, or other charges by
Salix unless such deduction or withholding is required by applicable law to be
assessed against AWH. If Salix is so required to make any deduction or
withholding from payments due to AWH, Salix shall (i) promptly notify AWH of
such requirement, (ii) pay to the relevant authorities on AWH’s behalf the full
amount required to be deducted or withheld promptly upon the earlier of
determining that such deduction or withholding is required or receiving notice
that such amount has been assessed against AWH, and (iii) promptly forward to
AWH an official receipt (or certified copy) or other documentation reasonably
acceptable to AWH evidencing such payment to such authorities.

2.9 Records. At all times following the exercise by Salix of the Continuing
Trademark License Option and until such time that Salix elects to exercise its
right to terminate all extended licenses with regard to Salix Non-Royalty
Products pursuant to Section 2.8, Salix shall, and shall cause its Affiliates
and sublicensees to, maintain during the term of this Agreement normal
accounting books (in accordance with normal United States accounting practice)
containing accurate details of all sales of Salix Non-Royalty Products

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

8

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that are subject to a royalty under this Agreement and of the calculation of Net
Sales and the royalty payments due hereunder. AWH shall have the right, during
the term of the Agreement and for [*] year following the expiration or
termination of the Agreement, upon written notice, during normal working hours
to cause qualified professional accountants of its choice to inspect the books
and records and any other documentation and records maintained by Salix or its
Affiliates or sublicensees relevant to the calculation of any royalty payable
under this Agreement. The accountants shall provide a copy of their report to
each Party. The cost of the above accountants’ inspections shall be borne by AWH
save only where any such inspection reveals a discrepancy in excess of [*]
percent ([*]%) of royalties due and payable, in which event the costs shall be
borne by Salix, provided that:

(a) such inspection shall not take place more than [*]; and

(b) such inspection shall only be in respect of records and accounts for the
period of [*] years preceding the date of such inspection and Salix shall not be
required to retain records for any period exceeding [*] years.

If any such inspection reveals that there has been an underpayment or
overpayment of royalties, Salix shall promptly pay to AWH the full amount of the
underpayment or AWH shall promptly pay to Salix the full amount of the
overpayment, as applicable; provided, however, that if Salix or AWH has a
reasonable good faith objection to the calculation of the underpayment or
overpayment, the Parties shall discuss the dispute in good faith and seek to
reach resolution on whether there was an underpayment or overpayment of
royalties, and if so, the amount of such underpayment or overpayment. If the
Parties are unable to resolve such dispute, then it shall be resolved through
the dispute resolution procedures set forth in Article 10 -.

2.10 Ownership of Licensed Marks. Salix acknowledges and agrees that AWH shall
have and retain, directly or indirectly, through its Affiliates, full and
complete ownership of the Alfa Licensed Trademarks during the entire term of
this Agreement, and Salix agrees that nothing contained herein shall vest or
otherwise give to Salix any right, title or interest in or to any of the Alfa
Licensed Trademarks, except the right to use the same in accordance with the
terms of this Agreement and the Amended and Restated License Agreement.

Article 3 - SALIX’S OBLIGATIONS

3.1 Acknowledgment. Salix recognizes that, as a result of many years of
advertising, investment and providing dependable products to the consuming
public, the Xifaxan Trademark has acquired a high degree of favorable
recognition and goodwill with the purchasing public in connection with the goods
with which the Xifaxan Trademark has been used.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

9

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3.2 Salix’s Obligations. Salix shall:

(a) use commercially reasonable efforts to maintain high standards with regard
to the nature and quality of Rifaximin Products sold under any of the Alfa
Licensed Trademarks by Salix or its Affiliates or sublicensees during the term
of this Agreement;

(b) use commercially reasonable efforts to preserve the high standards and
goodwill of the Alfa Licensed Trademarks and to exercise such supervision and
control with respect to all Rifaximin Products sold under any of the Alfa
Licensed Trademarks by Salix or its Affiliates or sublicensees so as to preserve
and enhance the goodwill of the Alfa Licensed Trademarks and the high and
favorable recognition with the purchasing public that the Alfa Licensed
Trademarks now (and will) carry and to otherwise protect the public from
confusion and deception;

(c) not use the Alfa Licensed Trademarks in a descriptive or generic manner;

(d) not (i) assert any claim adverse to AWH’s right, title or interest in or to
any of the Alfa Licensed Trademarks or (ii) use any of the Alfa Licensed
Trademarks in any way that could injure the goodwill associated with the Alfa
Licensed Trademarks or prejudice AWH’s rights therein;

(e) not apply to register the Alfa Licensed Trademarks in its own name in any
part of the Salix Territory or outside the Salix Territory;

(f) not, during or after the term of this Agreement, unlawfully use in its
business any trademark or trade name which is confusingly similar to, or so
nearly resembles any of the Alfa Licensed Trademarks, as to be likely to cause
deception or confusion, except as otherwise specifically contemplated by this
Agreement;

(g) not (i) misuse any of the Alfa Licensed Trademarks or take any other action
to bring them into disrepute or (ii) use the Alfa Licensed Trademarks in
violation of any trademark usage guidelines that AWH may from time to time
provide to Salix in writing;

(h) maintain a degree of continuity respecting the appearance, design and usage
of the Alfa Licensed Trademarks in accordance with the common standards and
procedures of trademark practice;

(i) use the “®” symbol (with the use of any registered mark) or the “TM” symbol
(with the use of any unregistered mark) or such other appropriate notice as AWH
may specify to Salix in writing in connection with Salix’s use of the Alfa
Licensed Trademarks; and

(j) provide all such assistance as AWH may reasonably request in relation to any
application to register AWH as the owner of any trademark applications for the
Alfa Licensed Trademarks, including the prosecution of such applications, and
provide reasonable cooperation with all maintenance activities conducted by AWH
regarding the Alfa Licensed Trademarks.

Article 4 - XIFAXAN DOMAIN NAMES

4.1 Xifaxan Domain Name.

(a) Representations. Salix represents and warrants that it (i) is the registrant
listed in the records of Network Solutions as the owner of the Internet domain
name XIFAXAN.COM and other related domains using the name XIFAXAN or

 

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variations thereon listed in Exhibit A attached hereto (hereafter the “Xifaxan
Domain Names”), (ii) is the holder of said Xifaxan Domain Names, free from any
and all encumbrances, (iii) is free to transfer or sell said Xifaxan Domain
Names, and (iv) has all necessary legal authority to make such transfer.

(b) Transfer of Xifaxan Domain Names. Salix agrees to sell, convey, assign and
otherwise transfer to AWH all of its right, title and interest in, to and
associated with the Xifaxan Domain Names (but not any content associated with
any website at such Xifaxan Domain Names), upon the terms and conditions set
forth in this Agreement. Promptly after the Amendment Effective Date, Salix
shall (i) take such action as required or necessary to effect the transfer of
the Xifaxan Domain Names to AWH including, without limitation, releasing any
“lock” placed on the Xifaxan Domain Names, obtaining the authorization codes and
providing such codes to AWH, confirming the requested transfer upon receipt of a
request to do so from the registrar used by AWH for the Xifaxan Domain Names,
executing and delivering all authorizations necessary to effectuate electronic
transfer of the Xifaxan Domain Names, and executing and delivering all further
documents and instruments as AWH may reasonably request to effectuate the
assignment and transfer of the Xifaxan Domain Names, and (ii) do and cause to be
done such further acts and things as may be necessary or as AWH may reasonably
request to effectuate the assignment and transfer of the Xifaxan Domain Names to
AWH. Salix shall work diligently and in good faith with AWH or AWH’s designated
registrar to facilitate, coordinate, and complete the transfer of the Xifaxan
Domain Names from Salix to AWH.

(c) Maintenance; Costs. AWH shall be responsible for all registration fees
charged by its registrar or any third parties in connection with the transfer of
the Xifaxan Domain Names, and AWH shall be responsible for all renewal fees
necessary for maintaining the continued registration of the Xifaxan Domain
Names. AWH shall also pay for any costs and expenses incidental to the transfer
of the Xifaxan Domain Names, including all registration or transfer fees and
other costs and expenses. Salix shall pay all of its own expenses and charges,
legal fees, and any delinquent charges due and owing for the Xifaxan Domain
Names through the date of transfer, and AWH shall be responsible for all such
fees incurred after the transfer. AWH and Salix agree to cooperate and to take
all steps necessary to affect the transfer of the Xifaxan Domain Names and to
otherwise achieve the goals contemplated by this Agreement.

(d) Rights and Responsibilities. Salix shall not claim ownership of the Xifaxan
Domain Names as of the Amendment Effective Date, nor shall Salix challenge,
interfere, solicit, encourage or assist others to challenge or otherwise
interfere with AWH’s title, interest, right or use of the Xifaxan Domain Names.

(e) License. Effective immediately after the transfer of the Xifaxan Domain
Names from Salix to AWH, AWH hereby grants to Salix an exclusive right and
license to use, and control the content of any websites associated with any of,
the Xifaxan Domain Names (collectively, the “Xifaxan Web Site”) in connection
with the Exploitation of Alfa Licensed Products for Existing Indications for the
Field in the Salix Territory or for any other Rifaximin Product for which the
Parties may agree to use the Xifaxan Trademarks as provided herein, in such
latter event in a manner consistent with and limited to Salix’s permitted use of
the Xifaxan

 

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Trademarks. To give Salix control over such Xifaxan Web Site content, AWH shall
use the same technical contact and server information used by Salix for each
Xifaxan Domain Name prior to their transfer to AWH following the transfer of
such Xifaxan Domain Name. From time to time, during the term of this Agreement,
Salix may request that AWH change or update the technical contact and/or server
information for a particular Xifaxan Domain Name. Promptly upon receipt of such
a request from Salix, AWH shall contact the domain name registrar for such
Xifaxan Domain Name and revise the information accordingly. During the term of
this Agreement, AWH shall not change the technical contact or server information
for any Xifaxan Domain Names or take any action to direct Internet traffic to
any of the Xifaxan Domain Names to any servers or IP addresses other than those
identified by Salix. AWH and Salix agree to cooperate in ensuring that access to
the Xifaxan Web Site is maintained and all the technical requirements are
complied with during the course of this Agreement. The content of the Xifaxan
Web Site(s) shall be directed at information pertaining exclusively to the
Rifaximin Products for Existing Indications sold by Salix or to any other
Rifaximin Product for which the Parties may agree to use the Xifaxan Trademarks
as provided herein. Salix shall be permitted to upload, publish, display or
otherwise include or use content on the Xifaxan Web Site(s), so long as such
content is in compliance with applicable U.S. Federal laws and regulations. AWH
shall not require prior approval of content changes to the Xifaxan Web
Site(s). Salix agrees that it shall provide AWH with a status report on any
content changes to the Xifaxan Web Site(s) (and reasons for such changes) every
[*] months or after major changes to the Xifaxan Web Site(s). If no changes are
made the report shall so indicate. The report should be sent to: Dr. Emília
Zubornyák, Alfa Wassermann Hungary Kft., Garibaldi u.4. Budapest 1054 Hungary.

(f) AWH shall rely upon the expertise and experience of Salix for determining
the information and content that shall be included on the Xifaxan Web Site(s).
AWH’s review of the status report shall not be construed as AWH’s representation
or warranty that such content is accurate, complete, truthful or correct.

(g) Salix agrees that its use of the Xifaxan Domain Names and Xifaxan Trademark,
including the use of the Xifaxan Trademark on the Xifaxan Web Site(s), shall be
in accordance with the guidelines or specifications issued by AWH (collectively
referred to as the “Alfa Standards”).

(h) Salix agrees that its use of the Xifaxan Domain Names shall be in the form
and style conforming to the Alfa Standards, as updated from time to time, and as
approved by AWH in writing, such approval not to be unreasonably withheld. Salix
shall submit to AWH for review and approval, at least [*] Business Days prior to
Salix’s proposed use, any planned changes to the representation of the Xifaxan
Domain Names that have not been previously approved by AWH.

(i) AWH shall (i) use Commercially Reasonable Efforts to maintain, and to take
all acts required to maintain, the Xifaxan Domain Names, including timely
renewing the Xifaxan Domain Names’ registration, and (ii) not assign any of the
Xifaxan Domain Names to

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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any Third Party without Salix’s prior written consent, such consent not to be
unreasonably conditioned, withheld or delayed except in connection with any
assignment of this Agreement permitted under Section 11.2, or unless the
assignee agrees in writing to assume AWH’s obligations under this Agreement with
respect to the Xifaxan Domain Names.

4.2 Other Alfa Domain Names. All Other Alfa Domain Names shall be the property
of AWH. Salix shall execute any documentation reasonably requested by AWH
necessary to assign to AWH or its designee the rights set forth in this
Section 4.2.

Article 5 - COVENANTS

5.1 Registration of Alfa Licensed Trademarks.

(a) AWH undertakes to take all such steps as may be required at its own expense
to obtain registration of the Xifaxan Trademark throughout the Salix Territory
for use of the Xifaxan Trademark on Alfa Licensed Products (other than the
Crohn’s EIR Product and Other EIR Products) for Existing Indications within the
Field in the Salix Territory and to maintain and renew all such registrations as
required throughout the period in which the license granted under Section 2.1(a)
shall remain in effect.

(b) Forthwith upon agreement between Salix and AWH of any Crohn’s EIR Trademark,
AWH undertakes to take all such steps as may be required at its own expense to
obtain registration of such Crohn’s EIR Trademark throughout the Salix Territory
for use of the Trademark on Crohn’s EIR Products within the Field in the Salix
Territory and to maintain and renew all such registrations as required
throughout the period in which the license granted under Section 2.2(b) shall
remain in effect.

(c) Forthwith upon agreement between Salix and AWH of any Other EIR Trademark,
AWH undertakes to take all such steps as may be required at its own expense to
obtain registration of such Other EIR Trademark throughout the Salix Territory
for use of the Other EIR Trademark on Other EIR Products within the Field in the
Salix Territory and to maintain and renew all such registrations as required
throughout the period in which the license granted under Section 2.3(b) shall
remain in effect.

(d) Forthwith upon agreement between Salix and AWH of any New Indication
Trademark, AWH undertakes to take all such steps as may be required at its own
expense to obtain registration of such New Indication Trademark throughout the
Salix Territory for use of the New Indication Trademark on Alfa Licensed
Products for New Indications within the Field in the Salix Territory and to
maintain and renew all such registrations as required throughout the period in
which the license granted under Section 2.4(b) shall remain in effect.

(e) Forthwith upon agreement between Salix and AWH of any [*] Trademark, AWH
undertakes to take all such steps as may be required at its own expense to
obtain registration of such [*] Trademark throughout the Salix Territory for use
of the [*] Trademark on Rifaximin Products containing [*] of the Compound within
the Field in the Salix Territory and to maintain and renew all such
registrations as required throughout the period in which the license granted
under Section 2.5(b) shall remain in effect.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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5.2 Infringement of Alfa Licensed Trademarks.

(a) In the event that any Third Party infringes or allegedly infringes in the
Salix Territory any Alfa Licensed Trademark, and AWH becomes aware of any such
infringement, AWH shall have the first right, but not the obligation, promptly
and at its sole expense, either directly or indirectly through a duly authorized
agent, to prevent any violation or infringement of the Alfa Licensed Trademarks
within the Salix Territory and to procure that any such infringement or
violation is discontinued. AWH shall bear the cost of any such action and shall
be entitled to [*]% of the recovery, if any, from the Third Party.

(b) AWH’s right to control the prosecution of a claim under Section 5.2(a) shall
also include the right to control settlement of such claim; provided, however,
that (i) no settlement shall be entered into by AWH without the prior written
consent of Salix if such settlement would adversely affect or diminish the
rights and benefits of Salix under this Agreement, impose any new obligations on
Salix under this Agreement, or adversely affect the validity or enforceability
of the Alfa Licensed Trademarks and (ii) AWH shall not be entitled to settle any
such Third Party claim by granting a license or covenant not to sue under or
with respect to the Alfa Licensed Trademarks without the prior written consent
of Salix.

(c) If AWH does not initiate such an infringement action as contemplated by
Section 5.2(a) within [*] days of notice from Salix of the relevant
infringement, then Salix shall have the right, at its sole expense, either
directly or indirectly through a duly authorized agent, to prevent such
violation or infringement of the Alfa Licensed Trademarks within the Salix
Territory and to procure that such infringement or violation is discontinued.
Salix shall bear the cost of any such action and shall be entitled to [*]% of
the recovery, if any, from the Third Party.

(d) Salix’s right to prosecute a claim under Section 5.2(c) shall also include
the right to control settlement of such claim; provided, however, that no
settlement in respect of any Alfa Licensed Trademark or AWH’s rights therein
shall be entered into by Salix without the prior written consent of AWH.

(e) Salix shall promptly notify AWH in writing if Salix determines or reasonably
believes that any of the Alfa Licensed Trademarks are being infringed or are
adversely affected by any unauthorized and unlawful use by any Third Party, and,
except as contemplated by Section 5.2(c), shall refrain from taking any action
with respect to such infringement or adverse use, except in accordance with the
express written authorization of

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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AWH. Each Party shall provide to the other such assistance as the prosecuting
Party may reasonably require in connection with the prosecution of a claim under
this Section 5.2, provided that the requesting Party shall reimburse to the
other Party all reasonable costs incurred by such other Party in providing such
assistance.

5.3 Acknowledgments. Salix shall include in its web sites, press releases,
product packaging, product literature, SEC filings and all other public
documents which use or reference any of the Alfa Licensed Trademarks,
acknowledgments in form and substance satisfactory to AWH of the ownership of
the Alfa Licensed Trademarks by AWH and that the Alfa Licensed Trademarks are
used pursuant to a license granted to Salix by AWH. Salix undertakes to print on
the packaging of and on all promotional and advertising material relating to the
Alfa Licensed Products, Crohn’s EIR Products or Rifaximin Products containing
[*] of the Compound under the Alfa Licensed Trademarks the words “Licensed by
Alfa Wassermann” or similar language to the extent permitted under any
applicable law and agreed to by AWH, and AWH hereby grants to Salix a
non-exclusive (with the right to sublicense as set forth herein), royalty-free
license to use AWH’s or AWSPA’s corporate name in such form only for such
purpose during the term of this Agreement. For clarity, AWH shall obtain no
ownership right or title therein or any other right to the Salix corporate name
(or any associated mark) as a result of any Salix corporate name (or any
associated mark) appearing on a label for a Rifaximin Product Exploited under
the Amended and Restated License Agreement or using an Alfa Licensed Trademark
licensed hereunder. Salix shall abide by and comply with all applicable laws,
rules, regulations and orders applicable to the marketing and packaging of
Rifaximin Products sold under the Alfa Licensed Trademarks, including all local
laws applicable to the marking of goods with respect to shipping, advertising,
sale and distribution or any other commercial activity.

5.4 Creative Works. Salix expressly agrees that, except as otherwise provided
herein, all artwork for any logo associated with an Alfa Licensed Trademark and
designs for the Alfa Licensed Trademarks created or invented by or for Salix or
its sublicensees (collectively the “Creative Works”) shall be owned by AWH, and
Salix shall assign, and shall cause its sublicensees (and its and their
employees and contractors) to assign, to AWH all right, title and interest in
and to such Creative Works. Further, the Creative Works may, in AWH’s sole
discretion, be registered in the U.S. Copyright Office or in the U.S. Patent and
Trademark Office, as appropriate, in the name of AWH or its assignee or, if
registered in the name of Salix, such Creative Works shall be assigned to AWH.

5.5 Goodwill. Salix’s use of the Alfa Licensed Trademarks under this Agreement
and the goodwill associated with such use shall inure to the benefit of AWH, and
Salix agrees to execute any and all documents requested by AWH confirming the
same, or confirming AWH’s title and ownership of the Alfa Licensed Trademarks.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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Article 6 - REPRESENTATIONS AND WARRANTIES

6.1 AWH’s Representations. AWH represents and warrants to Salix that:

(a) AWH is an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, is qualified to do business
and is in good standing as a foreign corporation in each jurisdiction in which
the conduct of its business or the ownership of its properties requires such
qualification, and has all requisite power and authority, corporate or
otherwise, to conduct its business as now being conducted, to own, lease and
operate its properties, to execute, deliver and perform this Agreement, and to
grant the rights and licenses granted in this Agreement;

(b) the execution, delivery and performance by AWH of this Agreement have been
duly authorized by all necessary corporate action and do not and will not
(i) require any consent or approval of its stockholders, (ii) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to it or
any provision of its charter or by-laws, or (iii) result in a breach of or
constitute a default under any agreement, mortgage, lease, license, permit,
patent or other instrument or obligation to which it is presently a party or by
which it or its assets may be bound or affected;

(c) except as contemplated herein, no authorization, consent, approval, license,
exemption of, or filing or registration with, any court or governmental
authority or regulatory body is required for the due execution, delivery or
performance by it of this Agreement;

(d) as of the date hereof, AWH is the sole owner of the entire right, title and
interest in and to the Xifaxan Trademark, free and clear of any liens, claims,
encumbrances, restrictions, options, licenses, and other legal or equitable
claims of any kind or nature;

(e) as of the date hereof, AWH is the record owner of registrations and
applications for the Xifaxan Trademark described in the definition of Xifaxan
Trademark set forth in Article 1 and all such registrations and applications are
in full force and effect, are valid and to AWH’s knowledge, enforceable, have
not lapsed, expired or been forfeited, cancelled or abandoned, and all
maintenance and renewal fees, as applicable, due as of the date hereof in
respect thereof have been timely paid;

(f) AWH has the right to grant to Salix the rights and licenses set forth in
this Agreement;

(g) AWH, to its knowledge, is not aware of any infringement by a Third Party of
the Xifaxan Trademark in the Salix Territory; and

(h) as of the date of this Agreement there are no pending or, to AWH’s
knowledge, threatened claims, judgments or settlements asserted against AWH
relating to the Xifaxan Trademark.

6.2 Disclaimers of Representations and Warranties. With respect to the licenses
and rights granted to Salix under this Agreement and the Alfa Licensed
Trademarks, AWH makes no other representation, express or implied, other than
those set forth in Section 6.1.

 

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Article 7 - FORCE MAJEURE

Neither Party shall be liable to the other Party for any failure or delay in
performing any obligation under this Agreement (other than any payment
obligations) when such failure or delay is caused by events beyond its
reasonable control, including fire, flood, other natural disasters, acts of God,
war, labor disturbances, interruption of transit, accident, explosion and civil
commotion; provided that the Party so affected shall give prompt notice thereof
to the other Party and shall use reasonable efforts to mitigate the adverse
consequences thereof. No such failure or delay shall terminate this Agreement,
and each Party shall complete its obligations hereunder as promptly as
reasonably practicable following cessation of the cause or circumstances of such
failure or delay.

Article 8 - COMMENCEMENT, DURATION AND TERMINATION

8.1 Term of Agreement. This Agreement shall come into force and effect on the
date first stated above and shall continue thereafter unless and until
terminated in accordance with the provisions set out below.

8.2 Termination.

(a) Either Party may terminate this Agreement following the material breach of
any material provision hereof if the breaching Party shall have failed to remedy
such breach within [*] days of receipt of written notice from the non-breaching
Party specifying such breach and requesting remedy (or, if such breach cannot be
cured within such [*]-day period, if the breaching Party does not commence
actions to cure such default within such period and thereafter diligently
continues such actions or if such breach is not otherwise cured within [*] days
after receipt of such notice, except in the case of a payment default, as to
which the breaching Party shall have only a [*]-day cure period).

(b) Either Party may terminate this Agreement upon written notice to the other
Party should the other Party become the subject of proceedings involving
bankruptcy, receivership, administration, insolvency, moratorium of payment,
reorganization or liquidation, make any assignment for the benefit of the
creditors or any equivalent measures in any relevant jurisdiction or admit in
writing its inability to meet its financial obligations as they fall due in the
ordinary course of business.

(c) This Agreement shall immediately terminate in its entirety if (i) AWSPA
terminates the Amended and Restated License Agreement pursuant to Sections
16.3.4, 16.4.1 or 16.4.2 of the Amended and Restated License Agreement; or
(ii) Salix terminates the Amended and Restated License Agreement pursuant to
Section 16.4.3 of the Amended and Restated License Agreement.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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(d) This Agreement shall immediately terminate with respect to the Crohn’s EIR
Trademark, Other EIR Trademarks and the New Indication Trademarks (to the extent
pertaining to the EIR Formulation) in the event that either (i) Salix terminates
its license to Exploit the Crohn’s EIR Product pursuant to Section 16.4.4 of the
Amended and Restated License Agreement or (ii) AWSPA terminates the Amended and
Restated License Agreement with respect to the Crohn’s EIR Product, the Crohn’s
EIR License, the Existing Indications EIR License and the Salix New Indication
License (to the extent it pertains to the EIR Formulation) pursuant to
Section 16.4.5 of the Amended and Restated License Agreement.

8.3 Effect of Termination.

(a) Upon the termination of this Agreement, Salix shall cease all use of the
Alfa Licensed Trademarks for any purpose whatsoever, except in connection with
the sale of the then-existing inventory of Alfa Licensed Products, Crohn’s EIR
Products or Rifaximin Products containing [*] of the Compound to the extent
permitted in the Amended and Restated License Agreement. The following
provisions shall survive the termination of this Agreement in its entirety:
Sections 2.6 (subject to Section 8.3(c)), 2.8(b), 2.8(c), 2.9, and 2.10, 4.1(d),
4.2, 5.4, 5.5, and 6.2, and Article 1 - Article 8 - and Article 9 - through
Article 23 -. Without limiting the foregoing, all such other provisions which by
their terms are intended to survive the termination of this Agreement shall so
survive in accordance with their terms.

(b) Upon the termination of this Agreement in respect of some but not all of the
Alfa Licensed Trademarks, Salix shall cease all use of the Alfa Licensed
Trademarks as to which such termination has occurred for any purpose whatsoever,
except in connection with the sale of the then-existing inventory of Alfa
Licensed Products, Crohn’s EIR Products or Rifaximin Products containing [*] of
the Compound bearing the relevant Alfa Licensed Trademarks to the extent
permitted in the Amended and Restated License Agreement. All provisions of this
Agreement which by their terms are intended to survive the termination of this
Agreement in respect of the Alfa Licensed Trademarks as to which termination has
occurred shall so survive in accordance with their terms.

(c) Upon termination of this Agreement, whether in whole or in part, any
sublicenses that may have been granted pursuant to Section 2.6 shall be handled
in a manner consistent with the intent and purpose of Section 17.3 of the
Amended and Restated License Agreement so that use of Alfa Licensed Trademarks
shall continue to be available to any sublicensee holding a sublicense granted
pursuant to Section 2.6 to the extent necessary or appropriate to permit such
sublicensee to exercise any surviving rights that it may have under any
sublicense granted to it under and in respect of rights granted by AWSPA to
Salix under the Amended and Restated License Agreement.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

18

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Article 9 - INDEMNIFICATION AND DAMAGES

9.1 In Favor of Salix. AWH shall indemnify, defend and hold harmless Salix, its
Affiliates, and their respective officers, directors, employees and agents, from
and against any and all costs, claims, damages and expenses (including but not
limited to reasonable attorneys’ fees and other expenses of legal proceedings)
(collectively, “Losses”), in connection with any and all suits, actions,
investigations, claims or demands of Third Parties arising from or occurring as
a result of:

(a) any default by AWH of its obligations under this Agreement; and

(b) any breach by AWH of any of its representations and warranties set forth in
this Agreement.

Notwithstanding the foregoing, AWH shall not be required to indemnify Salix, its
Affiliates, and their respective officers, directors, employees and agents for
any Losses to the extent such Losses are attributable to any of the matters as
to which Salix has an obligation to indemnify (i) AWH or any other Persons
pursuant to Section 9.2 hereof, or (ii) AWSPA or any other Persons pursuant to
the Amended and Restated License Agreement or any of the other Related
Agreements.

9.2 In Favor of AWH. Salix shall indemnify, defend and hold harmless AWH, its
Affiliates, and their respective officers, directors, employees and agents, from
and against any and all Losses, in connection with any and all suits, actions,
investigations, claims or demands of Third Parties arising from or occurring as
a result of:

(a) any default by Salix of its obligations under this Agreement; and

(b) any breach by Salix of any of its representations and warranties set forth
in this Agreement.

Notwithstanding the foregoing, Salix shall not be required to indemnify AWH, its
Affiliates, and their respective officers, directors, employees and agents for
Losses to the extent such Losses are attributable to any of the matters as to
which (i) AWH has an obligation to indemnify Salix or any other Persons pursuant
to Section 9.1 hereof or (ii) AWSPA has an obligation to indemnify Salix or any
other Persons pursuant to the Amended and Restated License Agreement or any of
the other Related Agreements.

9.3 Indemnification Procedures.

(a) Notice of Claim. In the event of any claim, action or proceeding for which a
Person is entitled to indemnity hereunder, the Person seeking indemnity
(“Claimant”) shall promptly notify the relevant Party (“Indemnitor”) of such
matter in writing, but in no event shall the Indemnitor be liable for any Losses
that result from any delay in providing such notice.

(b) Control of Defense. As its option, Indemnitor may then assume responsibility
for and shall have full control of such matter by giving written notice to
Claimant

 

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within [*] days after the Indemnitor’s receipt of notice from Claimant. The
assumption of the defense of a Third Party claim by the Indemnitor shall not be
construed as an acknowledgment that Indemnitor is liable to indemnify Claimant
in respect of the Third Party claim, nor shall it constitute a waiver by
Indemnitor of any defenses it may assert against Claimant’s claim for
indemnification. Upon assuming the defense of a Third Party claim, Indemnitor
may appoint as lead counsel in the defense of the Third Party claim any legal
counsel selected by Indemnitor. In the event Indemnitor assumes the defense of a
Third Party claim, Claimant shall immediately deliver to Indemnitor all original
notices and documents (including court papers) received by Claimant in
connection with the Third Party claim. Should Indemnitor assume the defense of a
Third Party claim, except as provided below, Indemnitor shall not be liable to
Claimant for any legal expenses subsequently incurred by such Claimant in
connection with the analysis, defense or settlement of the Third Party claim. In
the event that it is ultimately determined that Indemnitor is not obligated to
indemnify, defend or hold harmless Claimant from and against the Third Party
claim, Claimant shall reimburse Indemnitor for any and all costs and expenses
(including attorneys’ fees and costs of suit) and any Third Party claims
incurred by Indemnitor in its defense of the Third Party claim. Without limiting
the foregoing, any Claimant shall be entitled to participate in, but not
control, the defense of such Third Party claim and to employ counsel of its
choice for such purpose; provided, however, that such employment shall be at
Claimant’s own expense unless (i) the employment thereof has been specifically
authorized by Indemnitor in writing, (ii) Indemnitor has failed to assume the
defense and employ counsel in accordance with this Section 9.3(b) (in which case
Claimant shall control the defense) or (iii) the interests of Claimant and
Indemnitor with respect to such Third Party claim are sufficiently adverse to
prohibit the representation by the same counsel of both Parties under applicable
law, ethical rules or equitable principles.

(c) Settlement. With respect to any Losses relating solely to the payment of
money damages in connection with a Third Party claim and that shall not result
in Claimant’s becoming subject to injunctive or other relief or otherwise
adversely affecting the business of Claimant in any manner, and as to which
Indemnitor shall have acknowledged in writing the obligation to indemnify
Claimant hereunder, Indemnitor shall have the sole right to consent to the entry
of any judgment, enter into any settlement or otherwise dispose of such Loss, on
such terms as Indemnitor, in its sole discretion, shall deem appropriate. With
respect to all other Losses in connection with Third Party claims, where
Indemnitor has assumed the defense of the Third Party claim in accordance with
Section 9.3(b), Indemnitor shall have authority to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Loss, provided
it obtains the prior written consent of Claimant (which consent shall not be
unreasonably withheld or delayed). Indemnitor shall not be liable for any
settlement or other disposition of a Loss by Claimant that is reached without
the written consent of Indemnitor. Regardless of whether Indemnitor chooses to
defend or prosecute any Third Party claim, no Claimant shall admit any liability
with respect to or settle, compromise or discharge, any Third Party claim
without the prior written consent of Indemnitor, such consent not to be
unreasonably withheld or delayed.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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(d) Cooperation. Regardless of whether Indemnitor chooses to defend or prosecute
any Third Party claim, Claimant shall cooperate in the defense or prosecution
thereof and shall furnish such records, information and testimony, provide such
witnesses and attend such conferences, discovery proceedings, hearings, trials
and appeals as may be reasonably requested in connection therewith. Such
cooperation shall include access during normal business hours afforded to
Indemnitor to, and reasonable retention by Claimant of, records and information
that are reasonably relevant to such Third Party claim, and making employees and
agents available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder, and Indemnitor
shall reimburse Claimant for all its reasonable out-of-pocket expenses in
connection therewith.

(e) Expenses. Except as provided above, the costs and expenses, including fees
and disbursements of counsel, incurred by Claimant in connection with any claim
shall be reimbursed on a calendar quarter basis by Indemnitor, without prejudice
to Indemnitor’s right to contest Claimant’s right to indemnification and subject
to refund in the event Indemnitor is ultimately held not to be obligated to
indemnify Claimant.

(f) Limitations on Liability. UNDER NO CIRCUMSTANCES SHALL A PARTY HERETO BE
LIABLE TO THE OTHER PARTY HEREOF FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR
SPECIAL DAMAGES IN RESPECT OF PERFORMANCE OF THIS AGREEMENT; PROVIDED, HOWEVER,
THAT ALL AMOUNTS THAT AN INDEMNIFIED PERSON IS REQUIRED TO PAY TO ANY THIRD
PARTY AS THE RESULT OF A MATTER FOR WHICH SUCH INDEMNIFIED PERSON IS ENTITLED TO
BE INDEMNIFIED UNDER THIS ARTICLE 9 - SHALL BE CONSIDERED TO BE DIRECT DAMAGES
WHICH ARE INDEMNIFIABLE HEREUNDER.

Article 10 - DISPUTE RESOLUTION

10.1 Good Faith Discussions. In the event that any controversy or claim shall
arise between the Parties under, out of, in connection with, or relating to this
Agreement or the breach thereof, the Party initiating such controversy or making
such claim shall provide to the other Party written notice containing a brief
and concise statement of the initiating Party’s claims, together with relevant
facts supporting them. During a period of [*] days, or such longer period as may
be mutually agreed upon in writing by the Parties, following the date of said
notice, the Parties shall make good faith efforts to settle the dispute. Such
efforts may include, but shall not be limited to, full presentation of both
Parties’ claims and responses, with or without the assistance of counsel, before
the chief executive officers (or their designees) of the Parties.

10.2 Arbitration. In the event that the Parties have been unable to reach accord
using the procedures set forth in Section 10.1 and only if such is the case,
either Party may seek final resolution of the matter through binding
arbitration, and only through binding arbitration. The failure of a Party to
comply with the provisions of Section 10.1 with respect to any controversy or
claim shall constitute an absolute bar to the institution of any proceedings, by
arbitration or otherwise, with respect to such controversy or claim. Any such
arbitration shall be held in Paris, France in the English language before a
panel of three (3) arbitrators in accordance with the then existing Rules of
Arbitration of the International Chamber

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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of Commerce (the “ICC”) and judgment upon the award rendered by the arbitrators
may be entered or enforced in any court having jurisdiction thereof. In any
arbitration proceeding hereunder, each Party shall select one arbitrator and the
arbitrators selected by the Parties shall then select a third arbitrator, who
shall have at least [*] years’ experience in pharmaceutical patent licensing.
The decision of the arbitrators shall be final and binding on the Parties and
shall be accompanied by a written opinion of the arbitrators explaining the
arbitrators’ rationale for their decision. Except as may otherwise be determined
by the arbitrators in their award to be just and appropriate in light of the
particular circumstances and outcome of the arbitration, the Party losing the
arbitration shall pay all fees and costs of the arbitrators and the ICC and
reimburse the prevailing Party for its reasonable attorneys’ fees, costs and
disbursements (including, for example, expert witness fees and expenses,
photocopy charges and travel expenses). The intent of the Parties is that except
for the entering of an arbitration order in a court of competent jurisdiction,
disputes shall be resolved finally in arbitration as provided above, without
appeal, and without recourse to litigation in the courts, to the fullest extent
allowed by law.

10.3 Exceptions. Notwithstanding the foregoing provisions of this Article 10,
either Party may initiate an action before any court having competent
jurisdiction in order to obtain emergency interim or conservatory relief, such
as an order to preserve the status quo and to avoid incurring irreparable harm
pending the resolution of any dispute that is submitted to arbitration, to
prevent or enjoin a breach or threatened breach of confidentiality, or to
enforce provisions of this Agreement relating to ownership rights in
intellectual property without complying with the procedures set forth in this
Article 10.

Article 11 - ASSIGNMENT

11.1 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of Parties hereto and their respective successors and permitted assigns.

11.2 Assignment by AWH. AWH shall have the right to assign this Agreement as it
relates to any specific Alfa Licensed Trademark to any Affiliate of its choice
to whom ownership of such Alfa Licensed Trademark is transferred, whether by way
of sale and assignment, merger or consolidation, operation of law or otherwise,
and Salix hereby acknowledges and accepts any such assignment, but AWH shall not
otherwise assign or purport to assign this Agreement (in whole or in part)
without the prior consent in writing of Salix, such consent not to be
unreasonably withheld or delayed.

11.3 Assignment by Salix. Salix shall have the right to assign this Agreement,
in whole or in part, to any Affiliate of its choice to whom Salix assigns its
rights under the Amended and Restated License Agreement, whether by way of sale
and assignment, merger or consolidation, operation of law or otherwise, and AWH
hereby acknowledges and accepts any such assignment, but Salix shall not
otherwise assign or purport to assign this Agreement (in whole or in part)
without the prior consent in writing of AWH, such consent not to be unreasonably
withheld or delayed.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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Article 12 - ENTIRE AGREEMENT AND MODIFICATION

This Agreement together with the Amended and Restated License Agreement and
other Related Agreements constitutes the final and complete understanding
existing between AWH and Salix relating to the subject matter hereof. The terms
of this Agreement cannot be substituted, superseded, waived or modified in any
manner except by written agreement executed for and on behalf of each of AWH and
Salix. In the event of any conflict between the terms of this Agreement, the
Amended and Restated License Agreement and the other Related Agreements, this
Agreement and the Amended and Restated License Agreement and the other Related
Agreements shall be read as a single whole so as to accomplish the intent of the
Parties as it so manifests itself.

Article 13 - LANGUAGE AND GOVERNING LAW

13.1 English Language. This Agreement is written and undersigned in two
originals in the English language. All communications notices and proceedings
required to be given hereunder shall be in the English language.

13.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Switzerland, without giving effect to any conflict
of laws principles or rules. The Parties agree to exclude the application to
this Agreement of the United Nations Convention on Contracts for the
International Sale of Goods.

Article 14 - WAIVER

No waiver of any default by either Party shall be deemed to constitute a waiver
of any subsequent default with respect to the same or any other provision
hereof. No waiver shall be effective unless made in writing with specific
reference to the relevant provision(s) of this Agreement and signed by a duly
authorized representative of the party granting the waiver.

Article 15 - NOTICES

Except as otherwise herein provided, all notices to be served or notified to the
Parties hereunder shall (a) be mailed by internationally recognized courier
service or by registered airmail return receipt requested to their respective
addresses listed below or to any other address subsequently communicated in
writing, or (b) delivered by e-mail marked as being of high importance to the
e-mail address set forth below (to be confirmed by written notice sent in the
manner set forth in clause (a)), and shall be deemed to have been given [*]
Business Days after the day on which such mailing is made, or on the next
Business Day after the day on which it is sent in the case of any e-mail which
is followed by written notice as aforesaid.

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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Party

Address

 

to Salix:

Salix Pharmaceuticals, Inc.

Attn: General Counsel

8510 Colonnade Center Drive

Raleigh, North Carolina 27615 United States

with copies (which shall not constitute notice) to:

 

  Salix Pharmaceuticals, Inc.

Attn: Executive Vice President Business Development

8510 Colonnade Center Drive

Raleigh, North Carolina 27615 United States

E-Mail: [*]

 

  and

 

  Covington & Burling LLP

1201 Pennsylvania Avenue, N.W.

Washington, D.C. 20004 United States

Attention: Edward C. Britton, Esq.

E-mail: ebritton@cov.com

 

to AWH:

Alfa Wassermann Hungary Kft.

Attn: Dr. Emília Zubornyák

Garibaldi u.4.

Budapest 1054 Hungary

Email: [*]

with copies (which shall not constitute notice) to:

 

  Alfa Wassermann, Inc.

4 Henderson Drive

West Caldwell, New Jersey 07006 United States

Attention: Ira S. Nordlicht, President and Chief Executive Officer

E-mail: [*]

and

 

  Nordlicht & Hand

800 Westchester Avenue

Rye Brook, New York 10514 United States

Attention: Brian M. Hand, Esq.

E-mail: [*]

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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Article 16 - SEVERABILITY

If any part of this Agreement is held unenforceable or in conflict with the
applicable laws or regulations of any applicable jurisdiction, the invalid or
unenforceable part or provision shall be replaced with a provision which
accomplishes, to the extent possible, the original business purpose of the
invalid or unenforceable part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the Parties
hereto.

Article 17 - HEADINGS AND CONSTRUCTION

17.1 Headings. Headings are inserted for convenience and shall not by themselves
define, describe, extend, limit or determine the interpretation of this
Agreement.

17.2 References. References in this Agreement to Sections, Articles and Exhibits
refer to Sections and Articles of, and Exhibits to, this Agreement except as
otherwise specifically noted.

17.3 Rules of Construction. Except where the context otherwise requires,
wherever used, the singular shall include the plural, the plural the singular,
the use of any gender shall be applicable to all genders and the word “or” shall
be interpreted in accordance with its ordinary meaning as the context indicates.
The term “including” as used herein shall mean including, without limiting the
generality of any description preceding such term.

Article 18 - COUNTERPARTS

This Agreement may be executed in two or more counterparts each of which shall
be deemed an original and which together shall constitute one and the same
instrument.

Article 19 - MUTUAL DRAFTING

This Agreement constitutes the joint product of the Parties hereto. Each
provision has been subject to the mutual consultation and agreement of such
Parties and shall not be construed for or against either of them based on
authorship.

Article 20 - THIRD PARTY RIGHTS

No provision of this Agreement is intended to be enforceable by any person other
than the Parties hereto and their permitted assigns, and Parties entitled to
indemnification pursuant to Article 9 -.

 

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Article 21 - RELATIONSHIP OF THE PARTIES

It is expressly agreed that AWH, on the one hand, and Salix, on the other hand,
shall be independent contractors and that the relationship between the two
Parties shall not constitute a partnership, joint venture or agency. Neither
AWH, on the one hand, nor Salix, on the other hand, shall have the authority to
make any statements, representations or commitments of any kind, or to take any
action, which shall be binding on the other, without the prior written consent
of the other Party to do so. All persons employed by a Party shall be employees
of such Party and not of the other Party and all costs and obligations incurred
by reason of any such employment shall be for the account and expense of such
Party.

Article 22 - PERFORMANCE BY AFFILIATES

Each of AWH and Salix acknowledges that its performance of its obligations and
its exercise of rights under this Agreement may be performed or exercised,
respectively, by Affiliates of AWH and Salix. Each of AWH and Salix guarantees
performance of this Agreement by any of its Affiliates.

Article 23 - FURTHER ASSURANCE

Each Party shall duly execute and deliver, or cause to be duly executed and
delivered, such further instruments and do and cause to be done such further
acts and things, including the filing of such assignments, agreements, documents
and instruments, as may be necessary or as the other Party may reasonably
request in connection with this Agreement or to carry out more effectively the
provisions and purposes hereof, or to better assure and confirm unto such other
Party its rights and remedies under this Agreement.

(Signatures appear on the next page)

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first written above.

 

SALIX PHARMACEUTICALS, INC.   ALFA WASSERMAN HUNGARY KFT. By:   /s/ Rick Scruggs
  By:   /s/ Dr. Emília Zubornyák Name:   Rick Scruggs   Name:   Dr. Emília
Zubornyák Title:   EVP Business Development   Title:   Managing Director

Alfa Wassermann S.p.A., a corporation incorporated under the laws of Italy,
hereby guarantees to Salix Pharmaceuticals, Inc., one of the two parties to the
foregoing agreement, the full and timely performance by Alfa Wassermann Hungary
Kft., the other party to the foregoing agreement and an Affiliate of the said
Alfa Wassermann S.p.A, of all of the said Alfa Wassermann Hungary Kft.’s
obligations under the said agreement. This is a guarantee of performance and not
merely of payment.

 

ALFA WASSERMANN S.p.A By:   /s/ Andrea Golinelli Name:   Andrea Golinelli Title:
  Chief Strategy Officer

[Signature page for Trademark License Agreement (Alfa to Salix)]

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EXHIBIT A

Domain Names

[*]

 

 

* Confidential treatment requested; certain information omitted and filed
separately with the SEC.

 

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