1
EXHIBIT 10.22
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
SUPPLY AGREEMENT
BETWEEN
CIMA LABS INC.
AND
AMERICAN HOME PRODUCTS CORPORATION
ESI LEDERLE DIVISION
2
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT is signed this 14th day of January 2000
between CIMA LABS., a corporation organized and existing under the laws of the
State of with offices located at 00000 Xxxxxx Xxxx Xxxx, Xxxx Xxxxxxx, Xxxxxxxxx
00000-0000 (hereafter, together with its Affiliates, referred to "CIMA"), and
American Home Products Corporation (acting through its division, ESI Lederle), a
corporation organized and existing under the laws of the State of Delaware with
offices located at 000 Xxxxx Xxxxxx-Xxxxxxx Xxxx, Xx. Xxxxxx, Xxxxxxxxxxxx 00000
("ESI").
ARTICLE I
DEFINITIONS
1.1 [...***...]
1.2 ADVERSE DRUG EXPERIENCE means the definition in the current 21 CFR
" Sections 312.32 and 314.80, as in effect from time to time.
1.3 AFFILIATE means (i) any Person which at the time of determination
is directly or indirectly controlled by any party hereto; (ii) any Person which
at the time of determination directly or indirectly controls any party hereto;
or (iii) any Person which is under the direct or indirect control of any such
Person as described in subparagraphs
3
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
(i) or (ii). "Control" shall in this Section mean ownership of greater than
fifty percent (50%) of the voting stock or other voting interests in the Person
in question. For purposes of this Agreement, Immunex Corporation shall not be
considered to be an affiliate of ESI.
1.4 AGENCY means any governmental regulatory authority responsible for
granting approvals, including Pricing Approvals, for the sale of a Product in a
country in the Territory.
1.5 COMMERCIALLY REASONABLE EFFORTS means efforts and resources
normally used by a party for a compound or product owned by it or to which it
has rights, which is of similar market potential at a similar stage in its
product life, taking into account the competitiveness of the marketplace, the
proprietary position of the compound or product, the regulatory structure
involved, the profitability of the applicable products, and other relevant
factors. It is anticipated that the level of efforts and resources may change at
different times during the product life cycle of a compound or product.
1.6 CONTROL OR CONTROLLED in the context of intellectual property
rights means rights to intellectual property sufficient to allow a grant of
rights without any obligation to any Third Party.
1.7 [...***...]
4
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
1.8 DEVELOPMENT AND LICENSE AGREEMENT means the Development and
License Agreement between the parties signed contemporaneously with this
Agreement
1.9 EFFECTIVE DATE means the effective date of the Development and
License Agreement.
1.10 EXTENDED TERM shall have the meaning set forth in Section 9.1.
1.11 FDA means the United States Food and Drug Administration, or any
successor thereto.
1.12 GOOD MANUFACTURING PRACTICE OR GMP means the current standards for
the manufacture of pharmaceuticals, as set forth in the United States Federal,
Food, Drug and Cosmetics Act and applicable regulations promulgated thereunder,
as amended from time to time, and such standards of good manufacturing practices
as are required by the European Union and other organizations and governmental
agencies in countries in which Product is intended to be sold, to the extent
such standards are not inconsistent with United States GMP.
1.13 INITIAL TERM shall have the meaning set forth in Section 9.1
1.14 LAUNCH DATE means the date of first commercial shipment of a
Product by ESI or its Affiliates or their respective subdistributors of Product
to Third Parties in a country of the Territory.
5
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
1.15 MAJOR COUNTRY means any of the United States, Germany, or the
United Kingdom. The foregoing countries may also collectively be referred to as
Major Countries.
1.16 NDA means a New Drug Application, as defined in the United States
Food, Drug and Cosmetic Act, as amended, and applicable FDA rules and
regulations.
1.17 PERSON shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency thereof.
1.18 PRICING APPROVAL means any approval for price or reimbursement as
may be necessary or appropriate as a prerequisite for marketing Product in a
particular country of the Territory.
1.19 PRODUCT means rapid dissolving tablets containing 10 milligrams
Active Ingredient meeting the Specifications.
1.20 REGULATORY APPROVAL means the product license or marketing
approval necessary as a prerequisite for marketing Product in a particular
country in the Territory.
1.21 REGULATORY DOCUMENTS means all regulatory submissions, Regulatory
Approvals, and Pricing Approvals.
6
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
1.22 SPECIFICATIONS means the initial specifications for the Product as
set forth in Exhibit A hereto, as may be amended from time to time by the
parties in the course of Product development and in accordance with the
regulatory submissions and/or Regulatory Approvals, or as otherwise required by
regulatory authorities.
1.23 TECHNICAL INFORMATION means (a) techniques and data, including
ideas, inventions (including patentable inventions), practices, methods,
knowledge, know-how, trade secrets, skill, experience, documents, apparatus,
clinical and regulatory strategies, test data, including pharmacological,
toxicological and clinical test data, analytical and quality control data,
manufacturing, patent data or descriptions relating to Product, and (b) chemical
formulations, compositions of matter, product samples and assays relating to
Product.
1.24 TERM shall have the meaning set forth in Section 9.1
1.25 TERRITORY means the world.
1.26 THIRD PARTY means any Person other than a party to this Agreement
or an Affiliate of a party to this Agreement.
ARTICLE II
SUPPLY AND MANUFACTURING
2.1 MANUFACTURING During the Term of this Agreement, CIMA shall
manufacture and supply ESI with, and ESI shall purchase from CIMA Product in
7
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
accordance with the terms specified in this Article II. Subject to Section 2.9,
ESI shall exclusively purchase all of ESI's requirements of Product from CIMA
and CIMA shall exclusively supply Product to ESI.
2.2 [...***...]
2.3 FORECASTS
(a) [...***...], ESI shall provide to CIMA a non-binding rolling three
(3) year Product forecast (based on calendar years and updated at least
semi-annually) for long-term manufacturing planning purposes.
(b) During the Term of this Agreement, ESI shall provide CIMA on a
calendar basis, with a non-binding one (1) year rolling forecast, providing CIMA
with a written estimate of the quantities of Product required during the next
four (4) calendar half years. Each such quarterly estimate shall contain an
update of the immediately preceding estimate with respect to the calendar
quarters referred to in such preceding estimate.
2.4 FIRM ORDERS
(a ) [...***...]
(b) Notwithstanding the foregoing, CIMA has the right to satisfy ESI's
firm order requirements pursuant to this Article II by supplying ESI with
Product in full batch
8
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
quantities provided that CIMA may round up or down ESI's actual order for
Product to the nearest full batch.
2.5 LIMITS ON FIRM ORDERS
If a firm order made pursuant to Section 2.4 is greater than
one hundred fifty percent (150%) of the one (1) year rolling forecast received
by CIMA for such ninety (90) day period, then CIMA shall use Commercially
Reasonable Efforts, but shall not be obligated, to ship that portion of the
excess over one hundred fifty percent (150%).
2.6 CANCELLATIONS OF ORDERS If ESI cancels a firm order made pursuant
to Section 2.4, then ESI shall reimburse CIMA for all costs incurred by CIMA as
a result of such cancellation of such order, including materials, labor, work in
progress, obsolete inventory disposal and overhead; but this obligation shall
not cover capital costs.
2.7 PAYMENT TERMS
(a) [...***...]
(b) [...***...]
(c) In the event the Actual Amount for Product purchased by ESI in a
calendar half year is less than the Estimated Amount for that calendar half
year, then CIMA shall pay to ESI such difference amount with CIMA's report for
that calendar half
9
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
year. In the event the Actual Amount for Product purchased by ESI in a calendar
half year is greater than the Estimated Amount for that calendar half year, then
ESI shall pay to CIMA such greater amount within fourteen (14) days of ESI's
receipt of CIMA's invoice for such amount with regard to ESI's purchases of
Product in that calendar half year.
2.8 QUALITY ASSURANCE
(a) Prior to the shipment of Product to ESI, CIMA shall test
representative samples of each of the batch(es) to be shipped in
accordance with validated, approved methods of analysis defined in the
Specifications. CIMA shall provide ESI with a Certificate of Analysis
for each batch of Product shipped to ESI stating that the Product so
shipped conforms to the Specifications. The Certificate of Analysis
shall be in a format agreed upon by the parties.
(b) CIMA shall retain production samples and batch records from
each batch of Product for the longer of (i) five (5) years after the
manufacture of each such batch of Product or (ii) the time period
required under GMP. Upon request, CIMA shall provide ESI's Quality
Control Department with production samples of Product and/or copies of
completed Batch records.
(c) Master batch process documentation will be prepared and
approved by CIMA as per its normal procedures. The parties agree that
10
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
deviations from master batch process documentation may be necessary
from time to time. Such deviations shall be discussed with ESI before
any proposed shipment of Product. Individual batch process
documentation shall be photocopied from the approval master and issued
for each batch as per CIMA's routine system. Original batch records
will be filed securely by CIMA. CIMA will perform all in-process
control tests demanded by the approved batch process.
(d) ESI shall have the right to test Product to verify compliance
with Specifications and applicable Regulatory Approvals and CIMA shall
supply ESI with its testing procedures. ESI may, by written notice
provided to CIMA within sixty (60) days of ESI's receipt of a shipment
of Product, reject all or part of such shipment of Product if, based
upon the testing of such Product conducted under this Section 2.8, such
Product does not comply with the Specifications or applicable
Regulatory Approvals. If ESI fails to notify CIMA within such sixty
(60) day period, that it is rejecting such Product, ESI shall be deemed
to have accepted such Product.
(e) If CIMA, after good faith consultation with ESI, disputes any
finding by ESI that Product does not comply with the Specifications or
applicable Regulatory Approvals, samples of such Product shall be
forwarded to a Third Party jointly selected by ESI and CIMA for
analysis, which analysis shall be
11
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
performed in compliance with applicable regulatory requirements. The
findings of such Third Party regarding whether Product complies with
the Specifications and the applicable Regulatory Approvals shall be
binding upon the parties for purposes of this Section 2.8. The cost of
such analysis by such Third Party shall be borne by the party whose
findings differed from those generated by such Third Party.
(f) If as determined in accordance with this Section 2.8, a
shipment of Product does not conform to the Specifications or
applicable Regulatory Approvals, CIMA shall replace such shipment free
of charge with a substitute shipment which meets such Specifications
and applicable Regulatory Approvals according to the following time
frame: If the Product is in inventory then conforming Product will be
shipped so as to arrive as soon as practicable. If the Product is not
in inventory, CIMA will take all reasonable steps to ensure expeditious
manufacture of conforming Product which will be shipped on the next
shipping day after completion of manufacture so as to arrive as soon as
possible thereafter. In the event that testing at ESI indicates that
Product does not conform with Specifications or applicable Regulatory
Approvals: (i) ESI shall immediately notify CIMA (ii) ESI and CIMA
shall mutually agree on an investigation program to determine the cause
of the discrepancy and the
12
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
outcome of this investigation shall be used to determine disposition of
the batch; (iii) where appropriate, given the timetable for the agreed
upon investigation program, CIMA shall take all reasonable steps to
ensure expeditious manufacture and shipment of conforming Product; and
(iv) shipment of such replacement Product shall take place the next
shipping day following completion of analytical work to demonstrate
conformance with Specifications and applicable Regulatory Approvals.
Shipment shall be by the quickest agreed route. At CIMA's expense and
at ESI's sole option: the non-conforming shipment shall be (i) returned
to CIMA; or (ii) disposed of by ESI, upon final determination in
accordance with this Section 2.8 that it does not meet the
Specifications or applicable Regulatory Approvals. If the
non-conformity in the Product is due to a non-conformity of the Active
Ingredient with the Specifications at the time of its delivery to CIMA,
then the Replacement Product manufactured and shipped by CIMA under
this Section 2.8 and the disposal of the non-conforming shipment shall
be at the sole cost and expense of ESI.
2.9 [...***...]
2.10 NOTIFICATION OF INSPECTIONS Each party agrees to notify the other
within two (2) business days of its receipt of notification of any inquiries,
notifications, or inspection activity by any Agency, regulatory authority or
other authority in regard to
13
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
or affecting Product. The recipient party shall provide a reasonable description
to the other party of any such governmental inquiries, notifications or
inspections promptly (but in no event later than five (5) calendar days) after
notification of completion of such visit or inquiry. The recipient party shall
furnish to the other party, (i) within two (2) business days after receipt any
report or correspondence issued by the Agency or regulatory authority in
connection with such visit or inquiry, including but not limited to, any FDA
Form 483, Establishment Inspection Reports or warning letters and (ii) at the
same time it provides to any Agency or regulatory authority, copies of any and
all documents, responses or explanations relating to items set forth above, in
each case purged only of trade secrets of the recipient that are unrelated to
the obligations under this Agreement or are unrelated to Product. In the event
such governmental agency or authority requests or requires any action to be
taken to address any citations, the recipient agrees, after consultation with
the other party, to take such action as necessary to address such citations ,
and agrees to cooperate with the other party with respect to any such citation
and/or action taken with respect thereto.
2.11 INSPECTION BY ESI CIMA shall permit ESI (at its own expense) to
visit, during normal business hours and with reasonable advance notice CIMA's
manufacturing facility(ies) and warehouse, subject to the confidentiality
provisions of this Agreement, for the purposes of (a) observing the manufacture,
packaging, testing
14
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
and warehousing of Product and to inspect for compliance with GMP's, applicable
regulatory requirements, the requirements of any applicable Regulatory
Approvals, and environmental monitoring, (b) solving technical or quality
problems, (c) examining the premises, equipment, procedures and personnel used
when producing, testing or controlling Product and (d) all books and records
relating to (a), (b) or (c). CIMA representatives shall be entitled to accompany
ESI representatives on any such inspection.
2.12 ENVIRONMENTAL AND OTHER LAWS AND REGULATIONS
(a) In carrying out its obligations under this Agreement, CIMA shall
comply with all applicable environmental, health and safety laws (current or as
amended or added, collectively "Laws"), and shall be solely responsible for
determining how to comply with same. CIMA represents and warrants that it has
the appropriate skills, personnel, equipment, permits or approvals necessary to
perform its services under this Agreement in compliance with all applicable
Laws.
(b) CIMA shall notify ESI, in writing, no later than one (1) business
day after the event, of any circumstances, including the receipt of any notice,
warning, citation, finding, report or service of process, relating to compliance
with the Laws, or the occurrence of any release, spill, upset or discharge of
"Hazardous Active Ingredients" as defined by the Comprehensive Environmental
Response, Compensation and
15
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
Liability Act of 1980, as amended, which relates to CIMA's ability to
manufacture or supply Product. ESI reserves the right to conduct an
environmental inspection of CIMA's facility(ies), during normal business hours
and with reasonable advance notice, for the purpose of determining compliance
with this Section 2.12(b), no more frequently than once per year during the term
hereof and under conditions of confidentiality as provided under Article VIII.
Upon CIMA's request, ESI shall share the results of any environmental inspection
with CIMA. Such inspection, if it occurs, does not relieve CIMA of its sole
obligation to comply with the Laws and does not constitute a waiver of any right
otherwise available to ESI.
2.13 SPECIFICATIONS AMENDMENTS The Specifications shall be amended or
supplemented to comply with GMPs and to comply with any applicable Agency
directive and may also be amended or supplemented (including, without
limitation, for the purpose of incorporating improvements) from time to time. In
the event CIMA intends to amend the Specifications, ESI shall receive prompt
advance notice of any such amendments. No such amendment shall be filed with any
applicable Agency or otherwise become effective without the prior written mutual
approval of ESI and CIMA. In the event that after the parties have initially
agreed upon the Specifications, ESI requests that the Specifications be amended,
CIMA shall receive prompt advance notice of any such amendment for the purpose
of determining what, if any, impact the
16
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
proposed amendment would have on the manufacture of Product for ESI hereunder
and ESI shall reimburse CIMA for the actual costs incurred by CIMA (provided
that such costs are approved in writing by ESI prior to being incurred by CIMA)
because such amendment requires changes to be made in the processes, equipment,
testing procedures, or components used to manufacture Product for ESI hereunder.
Such costs may include, without limitation, validation of new processes,
equipment and facilities, development of testing methods and start-up costs. Any
costs incurred by CIMA in implementing an amendment of the Specifications under
this Section shall not be included in CIMA's Direct Manufacturing Cost.
2.14 APPROVAL FOR MANUFACTURING CHANGES; THIRD PARTY MANUFACTURING CIMA
agrees that no changes will be made to any materials, equipment or methods of
production or testing which are specified in the Specifications or any
Regulatory Approval by any Agency for Product without ESI's prior written
approval, which approval shall not be unreasonably withheld. Under no
circumstances will CIMA contract out all or any part of the manufacturing of
Product to a Third Party without prior written approval from ESI.
2.15 PERMITTED SUBCONTRACTORS CIMA shall ensure that the permitted
contract manufacturers for the manufacture of Product have sufficient knowledge
and expertise to carry out the manufacture of Product and other subcontracted
17
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
responsibilities. In addition CIMA shall ensure that (i) each such contract
manufacturer shall be in compliance with GMPs and shall be under the inspection
of all relevant Agencies and audited to be in compliance therewith, and (ii) ESI
will have the right to inspect and audit each such subcontractor's facilities
and records as provided in Section 2.11 hereof.
ARTICLE III
ACTIVE INGREDIENT
3.1 SUPPLY OF ACTIVE INGREDIENT
(a) ESI agrees to supply CIMA, at no charge, all Active Ingredient
CIMA requires for the manufacture of Product under this
Agreement and CIMA agrees to use all and only, Active
Ingredient supplied by ESI exclusively in the manufacture of
Product.
(b) As of the time of delivery to CIMA, all Active Ingredient will
conform to the Specifications.
(c) CIMA shall procure all ingredients other than the Active
Ingredient used in the manufacture of Product, including
excipients, inactive ingredients, imprinting materials,
packaging and labeling materials unless otherwise mutually
agreed to by the parties.
18
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
(d) CIMA agrees to notify ESI in writing of its requirements for
Active Ingredient in a timely manner so as to assure the timely
filling of ESI's purchase orders for Product. In the event that
ESI fails to have supplied CIMA with sufficient quantities of
conforming Active Ingredient at least sixty days prior to the
due date for delivery of a Product order, CIMA will be relieved
of its obligation to timely fill ESI's purchase orders for such
Product to the extent prevented by ESI's failure to have Active
Ingredient timely delivered.
(e) Upon receipt of Active Ingredient, CIMA shall promptly, and in
no event later than thirty (30) business days following
receipt, sample and analyze the same to assure that it complies
with the applicable Specifications. CIMA agrees to provide ESI
with the results of such analysis as soon as reasonably
possible, but in no event later than CIMA's manufacture of
Product containing such Active Ingredient, and to keep, true,
accurate and complete records of all such sampling and
analyses, which records shall at all reasonable times be
available for examination, audit and copying by ESI and its
representatives.
(f) In the event that any Active Ingredient is determined by CIMA
not
19
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
to be in compliance with applicable Specifications, CIMA shall
immediately notify ESI and shall follow all instructions of ESI
regarding, and be responsible for, re-analysis, sampling,
processing, return, disposal or destruction, including
certification of destruction, of such non-conforming Active
Ingredient.
(g) If CIMA and ESI disagree as to whether any Active Ingredient
meets the applicable Specifications, the matter will be
submitted to an independent testing laboratory, acceptable to
both parties, for analysis, which analysis shall be performed
in compliance with applicable regulatory requirements. If the
Active Ingredient is determined to be non-conforming, ESI will
reimburse CIMA for CIMA's out-of-pocket expenses relating to
re-analysis, sampling, processing, returns, disposal and/or
destruction thereof.
3.2 USE OF ACTIVE INGREDIENT
(a) Title to all Active ingredient supplied to CIMA by ESI shall at
all times remain in ESI. CIMA shall clearly xxxx such Active
Ingredient as the property of ESI and keep such Active
Ingredient separate and apart from other raw materials.
(b) CIMA shall not at any time sell or offer for sale, assign,
mortgage,
20
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
pledge, or allow any lien to be created upon the
Active Ingredient provided by ESI or any portion
thereof.
(c) At the termination of this Agreement, CIMA shall
surrender to ESI all Active Ingredient in CIMA's
possession.
(d) CIMA shall be responsible for all loss or damage,
howsoever occasioned, in Active Ingredient at all
times it is in the possession of CIMA excepting only
reasonable loss necessarily inherent in the
manufacturing process. The parties agree that the
amount of Active Ingredient loss reasonable to the
Product's manufacturing process shall in no event be
more than six percent (6%) per batch or more than
four percent (4%) per any twelve month production
period. CIMA shall permit ESI, during normal business
hours and upon reasonable advance written notice,
access to all records necessary to determine and
verify Active Ingredient loss or damages. CIMA shall
reimburse ESI for all costs and expenses (including
shipping costs incurred by ESI in replacing Active
Ingredient lost or damaged but not Active Ingredient
which is determined by on analysis pursuant to
Paragraph 5.1(g) not to be in compliance with the
Specifications.
21
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
(e) ESI shall not be liable for any damage, loss or
injury directly or indirectly resulting from the
storage or handling by CIMA of any Active Ingredient.
ARTICLE IV
REGULATORY COMPLIANCE
4.1 ADVERSE DRUG EXPERIENCES In order for the parties to comply with
their respective responsibilities under this Article IV and otherwise relating
to the reporting of Adverse Drug Experiences, to the extent either party
receives any information regarding Adverse Drug Experiences related to use of
Product, such party shall promptly provide the other party with such information
in accordance with the Adverse Event Reporting Procedures set forth in Exhibit B
hereto (as may be amended from time to time upon written agreement of the
parties).
4.2 PRODUCT COMPLAINTS ESI shall be solely responsible for interacting
with the public with respect to customer complaints regarding Product quantity.
With respect to any such complaints, each party shall have the responsibility
for promptly conducting an investigation of any activities conducted by it under
this Agreement which may be relevant to the complaint. Each party shall inform
the other party of the nature, scope and details of any such complaint which
requires an investigation by the other party, and each party shall promptly
report the results of such investigation to the
22
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
other party. Either party shall cooperate in any investigation by the other
party of each such complaint which involves the parties' duties under this
Agreement.
4.3 COMPLIANCE ISSUES The parties acknowledge that the export of
technical data, materials or products is subject to the exporting party
receiving the necessary export licenses and that the parties cannot be
responsible for any delays attributable to export controls which are beyond the
reasonable control of either party. The parties agree that regardless of any
disclosure made by the party receiving an export of any ultimate destination of
any technical data, materials or products, the receiving party will not
re-export either directly or indirectly, any technical data, material or
products without first obtaining the applicable validated or general license
form the United States Department of Commerce.
ARTICLE V
PAYMENT PROVISIONS
5.1 INSPECTION OF RECORDS The parties shall maintain at their offices,
accurate and complete books and records consistent with sound business and
accounting practices and in such form and in such detail as to enable the amount
of payments payable under this Agreement by the respective party to be
determined. ESI and CIMA shall permit an independent certified accountant
(subject to obligations of confidentiality) appointed by the other party and
reasonably acceptable to ESI or
23
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
CIMA(as applicable), at the other party's expense, to examine such books and
records at all reasonable times for the sole purpose of (i) verifying ESI's or
CIMA's (as applicable) reports and accounting submitted to the other party
hereunder and (ii) determining the correctness of payments. In the event of any
underpayment of any payment by at least five percent (5%), the costs of such
inspection shall be borne by the party who made such underpayment and such
underpayment shall be forthwith paid by such party to the other party with
interest at the rate specified in Section 5.3.
5.2 PAYMENTS Each party shall make all payments due to the other party
hereunder by wire transfer in immediately available funds to an account
designated by the payee party.
5.3 INTEREST The parties shall pay interest on any amounts overdue
under this Agreement at a rate equal to the U.S. dollar prime or equivalent rate
quoted by Citibank N.A. or another mutually acceptable bank, as in effect during
the period from the date due until payment.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6. REPRESENTATION AND WARRANTIES OF EACH PARTY Each of CIMA and ESI
hereby represents, warrants and covenants to the other party hereto as follows:
24
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
(a) it is a corporation or entity duly organized and validly existing
under the laws of the state or other jurisdiction of incorporation or formation;
(b) the execution, delivery and performance of this Agreement by such
party has been duly authorized by all requisite corporate action and does not
require any shareholder action or approval;
(c) it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder; and
(d) the execution, delivery and performance by such party of this
Agreement and its compliance with the terms and provisions hereof does not and
will not conflict with or result in a breach of any of the terms and provisions
of or constitute a default under (ii) a loan agreement, guaranty, financing
agreement, agreement affecting a product or other agreement or instrument
binding or affecting it or its property (ii) the provisions of its charter or
operative documents or bylaws; or (iii) any order, writ, injunction or decree of
any court or governmental authority entered against it or by which any of its
property is bound.
6.2 REPRESENTATIONS AND WARRANTIES OF CIMA In addition to the
representations and warranties made by CIMA under Section 6.1 above, CIMA hereby
further represents and warrants to ESI that:
25
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
(a) At the time of delivery of Product to the specified point of
delivery, Product shall (i) have been manufactured, stored and shipped in
accordance with GMPs, as applicable, and all other applicable laws, rules,
regulations or requirements in effect at the time of manufacture in the country
of manufacture (for example, in accordance with the procedures described in the
applicable Regulatory Approval); (ii) conform to the Specifications; (iii)) meet
the provisions of the Specifications; (iv) shall not be adulterated or
misbranded as provided for under any applicable law, order or regulation in
effect in the country of manufacture and the country in which Product is being
sold; (v) shall have been manufactured and have shelf-life in accordance with
[to be discussed]; and (vi) have been shipped in accordance with approved
procedures agreed between ESI and CIMA.
(b) It shall have good and marketable title to all Product delivered to
ESI.
6.3 NO INCONSISTENT AGREEMENTS Neither party has in effect and after
the Effective Date neither party shall enter into any oral or written agreement
or arrangement that would be inconsistent with its obligations under this
Agreement.
6.4 REPRESENTATION BY LEGAL COUNSEL Each party hereto represents that
it has been represented by legal counsel in connection with this Agreement and
acknowledges that it has participated in the drafting hereof. In interpreting
and applying the terms and provisions of this Agreement, the parties agree that
no
26
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
presumption shall exist or be implied against the party which drafted such terms
and provisions.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION BY ESI ESI shall indemnify, defend and hold
harmless CIMA and its Affiliates, and each of its and their respective
employees, officers, directors and agents (each a "CIMA Indemnified Party") from
and against any all liability, loss, damage, cost and expense (including
reasonable attorney's fees) (collectively, a "Liability") which the CIMA
Indemnified Party may incur, suffer or be required to pay resulting form or
arising in connection with (i) the breach by ESI of any representation or
warranty contained in this Agreement, or (ii) the manufacture, promotion,
distribution, use, testing, marketing, sale or other disposition of Product by
ESI, its Affiliates or sublicenses. Notwithstanding the foregoing, ESI shall
have no obligation under this Agreement to indemnify, defend or hold harmless
any CIMA Indemnified Party with respect to claims, demands, costs or judgments
which result from either (x) the failure of Product supplied by CIMA or its
Affiliates to comply with the Specifications or the applicable Regulatory
Approvals or (y) the willful misconduct or negligent acts or omissions of CIMA,
its Affiliates, or any of their respective employees, officers, directors or
agents.
27
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
7.2 INDEMNIFICATION BY CIMA CIMA shall indemnify, defend and hold
harmless ESI and its Affiliates, and each of its and their respective employees,
officers, directors and agents (each, an "ESI Indemnified Party") form and
against any Liability which the ESI Indemnified Party may incur, suffer or be
required to pay resulting from or arising in connection with the breach by CIMA
of any representation or warranty contained in this Agreement. Notwithstanding
the foregoing, CIMA shall have no obligation under this Agreement to indemnify,
defend, or hold harmless any ESI Indemnified Party with respect to claims,
demands, costs of judgments which result from the willful misconduct or
negligent acts or omissions of ESI, its Affiliates, or sublicensees or any of
their respective employees, officers, directors or agents.
7.3 CONDITIONS TO INDEMNIFICATION The obligations of the indemnifying
party under Sections 7.1 and 7.2 are conditioned upon delivery of written notice
to the indemnifying party of any potential Liability promptly after the
indemnified party becomes aware of such potential Liability, provided, however,
that the failure to give such notice promptly shall not impair a party's rights
to indemnification under this Article VII unless the delay in providing such
notice has a material adverse effect on the ability of the indemnifying party to
defend against such Liability. The indemnifying party shall have the right to
assume the defense of any suit or claim related to the Liability if it has
assumed responsibility for the suit or claim in writing; however, if in the
28
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
reasonable judgment of the indemnified party, such suit or claim involves an
issue or matter which could have a materially adverse effect on the business
operations or assets of the indemnified party, the indemnified party may waive
its rights to indemnity under this Agreement and control the defense or
settlement thereof, but in no event shall any such waiver be construed as a
waiver of any indemnification rights such party may have at law or in equity. If
the indemnifying party defends the suit or claim, the indemnified party may
participate in (but not control) the defense thereof at its sole cost and
expense.
7.4 SETTLEMENTS Neither party may settle a claim of action related to a
Liability without the consent of the other party, if such settlement would
impose any monetary obligation on the other party or require the other party to
submit to an injunction or otherwise limit the other party's rights under this
Agreement. Any payment made by a party to settle any such claim or action shall
be at its own cost and expense except in the event that such payment was made
with the prior written consent of the indemnifying party, in which case such
payment will be subject to the indemnification obligations of the parties as set
forth in this Article VII.
7.5 INSURANCE Each party further agrees to obtain and maintain, during
the term of this Agreement, Comprehensive General Liability Insurance, including
Products Liability Insurance, with reputable and financially secure insurance
carriers to cover its
29
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
indemnification obligations under Section 7.1or 7.2, as applicable, or, in the
case of ESI, self-insurance, in each case with limits of not less than five
million dollars ($5,000,000.00) per occurrence and ten million dollars
($10,000,000.00) in the aggregate.
ARTICLE VIII
CONFIDENTIALITY
8.1 NONDISCLOSURE During the Term of this Agreement and for a period of
five (5) years thereafter, all proprietary and confidential business, technical,
scientific and/or regulatory information, including Technical Information,
disclosed to the receiving party or its Affiliates (herein collectively, the
(Receiving Party) by the other party or its Affiliates (herein collectively, the
(Disclosing Party) hereunder or under the existing Confidentiality Agreement
between the parties, which is marked as confidential at the time of disclosure,
or if disclosed or obtained orally or visually (or otherwise in a non-written
form), was described or summarized in a writing or other tangible form and
identified as confidential and forwarded to the Receiving Party within thirty
(30) days of such disclosure (collectively, Confidential Information), shall be
deemed to be confidential and shall be treated as such by the Receiving Party
and shall not be disclosed, in whole or in part, by the Receiving Party to any
other Person except as expressly set forth herein, and shall be used only for
the purposes of this
30
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
Agreement. Notwithstanding the foregoing these mutual obligations of
confidentiality shall not apply to any information to the extent that such
information is:
(i) independently developed by such party as documented by prior
written records outside the scope and not in violation of this Agreement;
(ii) legally in the public domain at the time of its receipt or
thereafter legally becomes part of the public domain through no fault of the
recipient;
(iii) received without an obligation of confidentiality from a Third
Party having the right to disclose such information;
(iv) released from the restrictions of this Article VIII by the express
written consent of the Disclosing Party;
(v) as may be required for securing Regulatory Approval, or as may be
required to be disclosed to an Agency or as otherwise required by a court order
or any law or regulation (including, as may be required in connection with any
filings made with the Securities and Exchange Commission or by the disclosure
policies of a major stock exchange in the Territory); provided, however, that at
the other party's request, the disclosing party shall request that the relevant
legal or regulatory authority, or major stock exchange, treat as confidential
any Confidential Information of either party included in any such disclosure and
generally use diligent efforts to seek confidential treatment where available.
31
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
8.2 SCOPE OF CONFIDENTIALITY
CIMA and ESI agree to limit the disclosure of any Technical Information
and other Confidential Information received hereunder to such Affiliates,
employees, consultants and distributors as are necessary to carry out the
provisions of this Agreement and who are likewise bound by provisions equivalent
to this Article VIII, except that, ESI may disclose Confidential Information to
actual or potential sublicenses and subdistributors, provided that they are
likewise bound by confidentiality provisions similar to, or more stringent than,
those set forth in this Article VIII. The parties shall take reasonable measures
to assure that no unauthorized use or disclosure is made by Persons to whom
access to such Confidential Information is granted.
ARTICLE IX
TERM AND TERMINATION
9.1 TERM This Agreement shall be effective as of the Effective Date,
and, unless sooner terminated by mutual agreement or pursuant to any other
provision of this Agreement, shall continue in full force and effect in each
country of the Territory for a period of ten (10) years after the Launch Date of
Product in the first Major Country of the Territory which shall be deemed to
occur no later than six (6) months after obtaining
32
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
Regulatory Approval or where applicable, Pricing Approval, in the first Major
Country of the Territory (the Initial Term). After the Initial Term, this
Agreement shall be automatically renewed for successive two (2) year periods
(each, an Extended Term), unless ESI notifies CIMA of ESI's intent not to renew
this Agreement at least nine (9) months prior to the expiration of the Initial
Term or the then current Extended Term. The Term shall include the Initial Tem
and any Extended Term. If the Development and License Agreement is terminated
for any reason other than expiration, then this Agreement shall automatically
terminate.
9.2 TERMINATION FOR DEFAULT Each party may terminate this Agreement as
a whole if the other party commits a material breach of any material obligation
under this Agreement and fails to remedy such breach within sixty (60) days (or,
in the case of a late payment, ten (10) business days of notice of such breach,
or other longer period of time if mutually agreed.
9.3 TERMINATION BY ESI ESI shall have the right, in its sole
discretion, to terminate this Agreement at any time during the Term of this
Agreement upon six (6) months' prior written notice to CIMA.
9.4 NO DAMAGES UPON EXPIRATION OR TERMINATION Except as otherwise set
forth in this Agreement, neither party shall be entitled to any compensation
whatsoever
33
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
as a result of expiration or termination of this Agreement, but without limiting
either party's damages for any breach of this Agreement.
9.5 CONTINUING OBLIGATIONS Termination or expiration of this Agreement
for any reason shall be without prejudice to any obligations which shall have
accrued to the benefit of either party prior to such termination or expiration.
Upon termination or expiration of this Agreement, any payments owed to the other
party on or before the effective date of termination would be due within thirty
(30) days of the effective date of such termination or expiration. The following
provisions of this Agreement shall survive expiration or termination hereof:
Articles VIII, IX, and XI.
ARTICLE X
PUBLICATIONS
10.1 PUBLICATIONS The parties shall mutually agree upon publications
and the publication strategy with respect to work undertaken by the parties
relating to Product, and neither party shall publish any result or study
generated or developed under this Agreement except upon review by the other
party at least sixty (60) days prior to submission of an abstract or manuscript
for publication.
34
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
ARTICLE XI
MISCELLANEOUS
11.1 FORCE MAJEURE Neither party shall be liable for delay or failure
to perform its obligations hereunder for so long as that failure or delay is the
result of an event beyond its control which it could not have avoided by the
exercise of reasonable diligence, (a force majeure event), provided that such
party uses Commercially Reasonable Efforts to comply with the terms of this
Agreement as soon as practicable. A party asserting a force majeure event shall
notify the other party promptly, giving an indication of the likely extent and
duration thereof.
11.2 ASSIGNMENT; SUCCESSORS AND ASSIGNS Neither party shall at any
time, without obtaining the prior written consent of the other party, assign or
transfer this Agreement to any Person. Notwithstanding the foregoing, each party
shall be permitted to assign this Agreement to its Affiliates or to perform this
Agreement, in whole or in part, through its Affiliates, provided that such party
shall be primarily liable and responsible for performance by such Affiliate
hereunder; and each party may also assign this Agreement to any successor by
merger or upon a sale of all or substantially all of its assets. This Agreement
shall be binding upon and shall inure to the benefit of the parties and their
successors and permitted assigns.
35
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
11.3 NOTICES Any notices required or permitted to be given hereunder
shall be in writing in the English language and shall be delivered by
international courier service (requiring signature upon receipt) or sent by
first class air mail, postage prepaid, or telefax (confirmed by phone
conversation with the recipient) to the addresses set forth below. The parties
may change the address at which notice is to be given by giving notice to the
other party as herein provided. All notices shall be deemed effective upon
receipt by the party to whom it is addressed.
If to CIMA: CIMA, Labs. Inc.
00000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxxxx
President and CEO
Telephone: (000) 000-0000
Telefax: (000) 000-0000
36
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
If to ESI: With a copy to:
ESI Lederle American Home Products Corporation
000 Xxxxx Xxxxxx-Xxxxxxx Xxxx 0 Xxxxxxx Xxxxx
Xx. Xxxxxx, Xxxxxxxxxxxx 00000 Xxxxxxx, Xxx Xxxxxx 00000
Attention: President Attention:
Telephone: (000) 000-0000 Senior Vice President & General Counsel
Telefax: (000) 000-0000 Telephone: (000) 000-0000
Telefax: (000) 000-0000
11.4 GOVERNING LAW AND JURISDICTION This Agreement and its execution,
validity and interpretation shall be governed in all respects in accordance with
the laws of the State of New York, excluding conflicts of law rules.
11.5 SEVERABILITY In the event that any provision of this Agreement
shall be held to be unenforceable, invalid or in contravention of applicable
law, such provision shall be of no effect, and the parties shall negotiate in
good faith to replace such provision with a provision which effects to the
extent possible the original intent of such provision.
11.6 COMPLETE AGREEMENT; MODIFICATIONS This Agreement, together with
the Development and License Agreement and all Exhibits attached to each,
constitutes the entire Agreement between the parties with respect to the present
subject matter, all prior negotiations, agreements and understandings being
expressly canceled hereby. This Agreement may be amended only by a written
agreement embodying the full terms of the amendment signed by authorized
representatives of both parties.
37
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 204.24B-2
11.7 NO AGENCY Neither party shall by virtue of this Agreement have any
power to bind the other to any obligation nor shall this Agreement create any
relationship of agency, partnership or joint venture.
11.8 NO WAIVER No term or condition of this Agreement shall be
considered waived unless reduced to writing and duly executed by an officer of
the waiving party. Any waiver by any party of a breach of any term or condition
of this Agreement will not be considered as a waiver of any subsequent breach of
this Agreement, of that term or condition or any other term or condition hereof.
11.9 COUNTERPARTS This Agreement may be executed in counterparts, each
of which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CIMA LABS INC. ESI LEDERLE
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxx Xxx
Name: Xxxx X Xxxxxxx Name: Xxxx Xxx
Title: President and CEO Title: President
