STRATEGIC ALLIANCE AGREEMENT
between
TEVA PHARMACEUTICALS CURACAO N.V.
World Trade Center Curacao, Xxxx X.X.X. 00,
Xxxxxxxxx Xxx Xxxxxxx, Xxxxxxxxxxx Antilles
("Teva")
and
IMPAX LABORATORIES, INC.
a corporation organized under the laws of Delaware,
00000 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000;
("Impax")
WHEREAS, Impax is engaged in the development, manufacture, sale, marketing and
distribution of pharmaceutical products and has in various stages of development
the pharmaceutical products listed in Annex A hereto (collectively the
"Products" as defined further below);
WHEREAS, Teva together with its Affiliates (as defined below) is engaged in the
development, manufacture, sale, marketing and distribution of pharmaceutical
products;
WHEREAS, Teva and Impax desire to cooperate in completing the development of the
Products and to register, manufacture, market, sell and distribute the Products
in the United States and, at Teva's option, Canada, Israel, Mexico, the European
Union, Central America and South America (collectively, as defined further
below, the "Territory"), all in accordance with the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, in connection with the above-referenced cooperative effort and in
accordance with the terms and subject to the conditions set forth below, (a)
Impax, with the financial support of Teva provided for herein, shall develop,
manufacture, and package the Products and seek regulatory approval of the
Products for the United States, and (b) Teva, with the technical support of
Impax provided for herein, shall market, sell and distribute the Products in the
Territory and, to the extent applicable, manufacture and/or seek regulatory
approval of the Products for the Optional Territory (as defined below).
NOW THEREFORE, intending to be legally bound hereby and in consideration of the
mutual representations, warranties and covenants set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, IT IS HEREBY AGREED BY THE PARTIES AS FOLLOWS:
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1 INTERPRETATION AND DEFINITIONS
1.1 The preamble to this Agreement forms an integral part hereof.
1.2 Sections headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the
interpretation of this Agreement.
1.3 All annexes to this Agreement, signed by both Parties, whether
attached at the time of signature hereof or at any time
thereafter, shall be construed as an integral part of this
Agreement.
1.4 For the purposes of this Agreement, the following words and
phrases shall bear the respective meanings assigned to them
below (and cognate expressions shall bear corresponding
meanings):
1.4.1 "Affiliates" - shall mean with respect to any
Party, any Person that is controlled by, controls,
or is under common control with that Party. For
this purpose, "control" of a corporation or other
business entity shall mean direct or indirect
beneficial ownership of more than fifty percent
(50%) of the voting interest in, or more than fifty
percent (50%) in the equity of, or the right to
appoint more than fifty percent (50%) of the
directors or management of such corporation or
other business entity.
1.4.2 "ANDA" - shall mean an Abbreviated New Drug
Application filed with the FDA pursuant to its
rules and regulations.
1.4.3 "Applicable Law" - shall mean the applicable laws,
rules, regulations, guidelines and requirements
related to the development, registration,
manufacture, importation, Marketing, sale and
distribution of the Products in the Territory.
1.4.4 "Approval(s)" - shall mean any and all approvals,
licenses, registrations or authorizations of the
applicable Regulatory Authority necessary for the
Marketing of the Products and reimbursement, if
applicable, in the relevant country of the
Territory.
1.4.5 "API" - shall mean the bulk unformulated drug
substances used in the manufacture of each of the
Products.
1.4.6 "Calendar Quarter" - shall mean a three (3)
consecutive month period ending on March 31, June
30, September 30 or December 31.
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1.4.7 "Canada" - shall mean Canada and its territories,
districts and possessions.
1.4.8 "cGMP" - shall mean current good manufacturing
practices as required by the rules and regulations
of the FDA or such similar requirements of non-U.S.
Regulatory Authorities, as applicable to the
manufacture, packaging, handling, storage and
control of the Products in the Territory.
1.4.9 "Competing Product" - shall mean on a
Product-by-Product basis any finished
pharmaceutical product for sale in the prescription
drug marketplace that contains the same active
ingredients in the same dosage form and strength as
the subject Product.
1.4.10 "Confidential Information" - shall mean all
information, data and/or know-how disclosed by
either Party to the other Party in writing (or if
disclosed orally, visually and/or in another
non-written form, identified as confidential at the
time of disclosure, and summarized in reasonable
detail in writing as to its general content within
thirty (30) days after original disclosure)
concerning the Products or concerning the
technology, marketing strategies or business of the
disclosing Party (whether disclosed prior to or
subsequent to the Effective Date). Confidential
Information shall not include information, data or
know-how that the receiving Party can show:
(a) was in the public domain at the time of the
disclosure by the disclosing Party, or
thereafter becomes part of the public domain
without any fault of the receiving Party;
(b) rightfully was in its possession prior to
the disclosure by the disclosing Party;
(c) was lawfully obtained from a third party,
who had the right to make such disclosures
as evidenced by written records; or
(d) was developed by it independently of such
disclosure as evidenced by written records.
1.4.11 "Cost of Materials" - shall mean on a
Product-by-Product basis the actual direct cost for
inactive and active materials required for the
manufacture of the particular Product (which for
purposes of clarity shall not include handling,
inspection or any other indirect charges).
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1.4.12 "Designated Share Price" - shall mean, with respect
to the applicable Teva investment or stock payment
to Teva pursuant to Section 10, the average closing
sale price for the Impax Common Stock measured over
the ten (10) trading days ending two (2) days prior
to the date on which the Impax Common Stock is
acquired by Teva or its Affiliate.
1.4.13 "Effective Date" - shall mean the date on which
this Agreement is signed by the latter of the
Parties to sign this Agreement.
1.4.14 "EU" - shall mean those countries set forth in
Annex F.
1.4.15 "FDA" - shall mean the United States Food and Drug
Administration and all agencies under its direct
control or any successor organization.
1.4.16 "First to File Exclusivity" - shall mean, to the
extent applicable, up to six (6) months of
marketing exclusivity in the U.S. from the FDA
under and pursuant to 21 U.S.C. Section
355(j)(5)(B)(iv) of the Federal Food, Drug and
Cosmetic Act, as amended.
1.4.17 "Force Majeure Events" - shall have the meaning set
forth in Section 25.1.
1.4.18 "Impax Common Stock" - shall mean Impax common
stock, $0.01 par value.
1.4.19 "IMS Data" - shall mean total prescription data
from IMS Health National Prescription Audit Plus
(TM), Complete Package - (retail, mail order, LTC,
prescriber specialty report).
1.4.20 "Impax Margin" - shall mean on a Product-by-Product
basis for each country in the Territory, an amount
equal to + percent (+%) of the Profit; provided,
however, for the Tier 2 Products in the U.S. such
amount shall be equal to + percent (+%) of the
Profit.
1.4.21 "Intellectual Rights Legal Expenses" - shall mean
all fees, out of pockets costs and expenses
(including, without limitation, all attorneys fees
and settlement costs), third party damages,
verdicts and/or awards incurred by either Party
and/or their respective Affiliates in connection
with the defense and/or arising out of a judgment
or settlement of an Intellectual Rights Suit.
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+ Confidential portions omitted and filed separately with the Commission.
1.4.22 "Intellectual Rights Suit" - shall mean any
litigation instituted by a third party relating to
a claim or claims of infringement of patents or
other intellectual property rights against Teva
and/or an Affiliate of Teva and/or their respective
directors and/or officers and/or employees and/or
consultants, and/or against Impax or an Affiliate
of Impax and/or their respective directors and/or
officers and/or employees and/or consultants during
or prior to the Term, related to or arising from
the filing of Regulatory Documentation for any
Product(s) and/or the manufacturing, Marketing, use
or offer for sale of any Product(s). An
Intellectual Rights Suit shall also include a
declaratory judgment action as referenced in
Section 17.
1.4.23 "Launch Date" - shall mean on a Product-by-Product
basis the date on which Teva makes its first
commercial sale of a particular Product to an
unrelated third party in an arms-length transaction
in a particular country in the Territory, and Impax
has supplied to Teva full launch quantities of such
Product for such country pursuant to Teva's
forecast.
1.4.24 "Manufacturing Costs" - shall mean on a
Product-by-Product basis, the total of all actual
direct manufacturing (including packaging material)
costs allocable to the manufacture of the
particular Products for each country in the
Territory, as determined in accordance with U.S.
GAAP, not to exceed, however, (i) for each Tier 1
Product, the amounts set forth in Annex B, plus the
Cost of Materials; and (ii) for each Tier 2 Product
and Tier 3 Product, the amounts to be agreed upon
by the Parties and added to Annex B promptly
following the filing of each ANDA for each Tier 2
Product and Tier 3 Product, plus the Cost of
Materials.
1.4.25 "Market" - shall mean to promote, distribute,
market, advertise and/or sell.
1.4.26 "Net Sales" - shall mean, on a Product-by-Product
basis, the gross amount invoiced for each of the
Products sold by Teva or Teva's Affiliates on an
arms-length basis in each country in the Territory,
less the sum of: (a) trade, quantity and/or cash
discounts, allowances, rebates, retroactive price
adjustments, free goods, bad debts, cash incentive
payments (e.g. slotting allowance), and
chargebacks; (b) credits or refunds for rejected,
outdated or returned Product; (c) any tax, duty or
other government charge upon or related to the
sale, delivery or use of that Product; (d) cost of
short dated Product, which is destroyed by Teva or
its Affiliates; (e) three percent (3%) as a
contribution towards selling, administrative and
other similar expenses of Teva; and (f) other
specifically identifiable amounts included in the
Product's gross sales that will have been or
ultimately will be credited and are substantially
similar to those listed above; in each case
determined in accordance with U.S. GAAP.
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1.4.27 "Optional Products" - shall have the meaning set
forth in Section 4.1.
1.4.28 "Optional Territory" - shall mean Canada, Israel,
Mexico and each of the countries in the EU, Central
America and South America.
1.4.29 "OTC Product(s)" - shall mean the finished
pharmaceutical products listed in Annex A for the
non-prescription drug marketplace.
1.4.30 "Party", "Parties" - shall mean Teva and/or Impax,
as applicable.
1.4.31 "Person" - shall mean any individual, partnership,
association, corporation, limited liability
company, trust, or other legal person or entity.
1.4.32 "Product(s)" - shall mean the finished
pharmaceutical products listed in Annex A for the
prescription drug marketplace developed by or for
Impax or any of its Affiliates, including the five
(5) Tier 1 Products ("Tier 1 Products"), the three
(3) Tier 2 Products ("Tier 2 Products") the three
(3) additional Products to be agreed upon by the
Parties ("Tier 3 Products"), and subject to Section
4 hereof the Optional Products listed in Annex G.
1.4.33 "Profit" - shall mean, with respect to each
Product, calculated separately for each country in
the Territory, an amount equal to Net Sales less
the applicable Manufacturing Costs.
1.4.34 "Regulatory Authority" - shall mean any and all
governmental bodies, organizations and agencies
whose approval is necessary to develop,
manufacture, import, use, and/or Market the
Products in the relevant country of the Territory.
1.4.35 "Regulatory Documentation" - shall mean all
submissions to Regulatory Authorities, including
clinical studies, tests, and biostudies relating to
the Products, including, without limitation, all
ANDAs, 505(b)(2) applications, and DMFs, as well as
all correspondence with Regulatory Authorities
(registration and licenses, regulatory drug lists,
advertising and promotion documents), adverse event
files, complaint files, manufacturing records and
inspection reports.
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1.4.36 "Regulatory Expenses" - shall mean all costs and
expenses in connection with preparing, submitting,
obtaining and maintaining Approvals of the subject
Products.
1.4.37 "Revised Impax Margin" - shall mean, on a
Product-by-Product basis, an amount equal to the
product obtained by multiplying (a) a fraction, the
numerator of which is the subject Product sales in
the subject country in the Territory by Teva and
its Affiliates, based upon the IMS Data for the
three (3) month period immediately preceding the
Transaction Event, and the denominator of which is
the sum of the numerator plus the applicable
Competing Product sales in the subject country in
the Territory based upon the IMS Data for the three
(3) month period immediately preceding the
Transaction Event, by (b) the Impax Margin;
provided, however, that if such three (3) month
sales data is not available for either the Product
or the Competing Product, then the Revised Impax
Margin shall be deemed to be + percent (+%) of the
Profit unless and until the Parties otherwise agree
in good faith, taking into account the principles
underlying the above formula and the relative
commercial potential of each such Product and
Competing Product. For the purposes of calculating
the Revised Impax Margin, Net Sales, Manufacturing
Costs, and Profit for a Competing Product, shall be
calculated in the same manner as Net Sales,
Manufacturing Costs, and Profit are calculated for
a Product hereunder.
1.4.38 "Specifications" - shall mean, for a particular
Product, the agreed specifications, methods and
processes of the Product as contained in the
applicable Approval for that Product.
1.4.39 "Supply Term" - shall mean, on a Product-by-Product
basis for each country in the Territory, an initial
period of ten (10) years from the Launch Date of
that Product in the particular country in the
Territory and any extension periods pursuant to
Section 21.1, unless terminated prior to such date
as expressly provided for in this Agreement.
1.4.40 "Term" - shall mean the duration of this Agreement
starting on the Effective Date and continuing until
the end of the last to expire of the Supply Terms,
unless terminated prior to such date pursuant to
Section 21.
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+ Confidential portions omitted and filed separately with the Commission.
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1.4.41 "Territory" - shall mean the U.S. and, subject to
Section 3, the Optional Territory.
1.4.42 "Transaction Event" - shall mean any merger,
acquisition, business combination or transaction of
any kind pursuant to which Teva or any of its
Affiliates acquires or obtains the right to Market
Competing Products in any countries in the
Territory.
1.4.43 "U.S." - shall mean the United States of America
and its territories, districts and possessions.
1.4.44 "U.S. GAAP' - shall mean generally accepted
accounting principles in the U.S., consistently
applied.
2 GRANT OF RIGHTS
2.1 Impax, for itself and its Affiliates, grants to Teva and its
Affiliates in accordance with the terms and conditions of this
Agreement, the exclusive right (even as to Impax and its
Affiliates), under applicable Approvals and all other existing
or future rights owned or controlled by Impax or its
Affiliates, to Market the Products in the Territory throughout
the respective Supply Terms. The effective date of such grant
for (a) each of the Tier 1 Products for the U.S. shall be the
date that the Loan is reduced by the Milestone Amount
corresponding to the Launch Date Milestone Event for such
Product as set forth in Annex C or Annex D, as applicable, or
the date the Loan is reduced by fifty percent (50%) of such
Milestone Amount pursuant to Section 10.1 (b), as applicable,
and (b) for the Tier 2 Products and Tier 3 Products,
collectively, for the U.S., on the first Launch Date of any
Tier 2 Product or Tier 3 Product in the U.S. and (c) for the
Products for the Optional Territory as provided in Section
3.1. Teva accepts the grant of such exclusive Marketing rights
from Impax.
2.2 Except as otherwise expressly provided in this Agreement and
subject to the provisions of Section 8, Impax and its
Affiliates shall, during the period from the Effective Date to
the expiration of the Supply Term for each of the Products,
(a) manufacture and supply to Teva and its Affiliates all of
their requirements for the Products in the Territory, and (b)
supply the Products for the Territory exclusively and only to
Teva and Teva's Affiliates in accordance with the terms of
this Agreement.
2.3 Teva and its Affiliates shall, during the period from the
Effective Date to the expiration of the Supply Term for each
of the Products, obtain all quantities of the Products it
requires for Marketing the Products in the Territory from
Impax, except as otherwise specifically permitted by the terms
of this Agreement.
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2.4 Neither Impax nor its Affiliates shall, directly or
indirectly, during the period from the Effective Date to the
expiration of the Supply Term for each of the Products, Market
such Product or cause or permit such Product to be Marketed in
or for the subject countries in the Territory, except as
otherwise specifically permitted by the terms of this
Agreement.
2.5 Neither Impax nor its Affiliates shall, directly or
indirectly, during the period from the Effective Date to the
expiration of the Supply Term for each of the Products,
register, develop, manufacture, supply or Market any Competing
Product to such Product for any countries in the Territory,
except as otherwise may be specifically permitted by the terms
of this Agreement.
2.6 Neither Teva nor its Affiliates shall, directly or indirectly,
during the Supply Term for each of the Products, Market any
Competing Product to such Product in the subject countries of
the Territory in which the applicable Product is Marketed by
Teva and/or its Affiliates hereunder, except as otherwise may
be specifically permitted by the terms of this Agreement.
2.7 Teva shall within thirty (30) days of the completion of a
Transaction Event provide Impax with written notice of same (a
"Transaction Event Notice"). Notwithstanding the provisions of
Section 2.6, Teva shall have one (1) year from the date of
such Transaction Event to determine, in its sole discretion,
whether or not Teva or any of its Affiliates wish to Market in
any countries in the Territory the Competing Product and if so
with or without the subject Product. From and after the date
of written notice to Impax communicating such decision, Teva
shall pay Impax the Revised Impax Margin rather than the Impax
Margin with respect to the sale of such Competing Product
and/or Product in the subject countries in the Territory;
provided, however, if final Approval for the subject Product
has not been obtained in the given country then neither the
Impax Margin nor the Revised Impax Margin shall be payable to
Impax, and provided further that if the final Approval for the
subject Product has been obtained in the given country and
final Approval for the Competing Product has not been
obtained, then the Impax Margin (and not the Revised Impax
Margin) shall continue to be paid until such Approval for the
Competing Product has been obtained.
2.8 In the event Teva or its Affiliate decides to Market in the
subject countries in the Territory only the Competing Product
pursuant to Section 2.7, then the grant hereunder to Teva
pursuant to Section 2.1 to Market such applicable Product for
the subject countries of the Territory shall terminate and
immediately revert back to Impax. Teva and Impax shall within
thirty (30) days of Teva's decision to Market only the
Competing Product make a good faith determination of the
financial consideration payable to Teva for such reversion
giving due regard to the financial contributions made by Teva
hereunder (including, without limitation, the Loan hereunder
and forgiveness of portions thereof). If the Parties are
unable to agree upon such consideration and terms of payment
within such thirty (30) days the dispute shall be resolved by
arbitration pursuant to Section 32.
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2.9 In the event Teva or its Affiliate decides to Market in the
U.S. only the Competing Product of an applicable Tier 1
Product pursuant to Section 2.7, then, for purposes of
determining whether or not the relevant milestone events for
such Tier 1 Product have been met (assuming such milestone
events have not already been met on or before the date of the
Transaction Event), the respective Loan amount for such
milestones will be forgiven if Impax has achieved final
Approval (instead of meeting the Launch Date for such
milestone) in the U.S. for the subject Tier 1 Product no later
than the dates set forth in Annex C or Annex D, as applicable,
for the given Launch Date.
2.10 In the event Teva or its Affiliate decides to Market both the
Competing Product and the applicable Product pursuant to
Section 2.7, Impax shall not be obligated to fill any purchase
order for such Product for the subject countries of the
Territory in excess of one hundred and thirty percent (130%)
of the amount last forecasted for the Calendar Quarter
immediately preceding the date Teva or its Affiliates
commences Marketing the Competing Product in such countries.
2.11 Except as may otherwise be provided for under the provisions
of this Agreement, Teva shall use its commercially reasonable
best efforts to Market the Products in and for the Territory
in order to maximize Profits.
2.12 Impax and its Affiliates shall not, directly or indirectly,
during the Term disclose to any third party any data, know-how
or information used or useful to develop, register or
manufacture the Products, if such third party may or has the
ability to use such data, know-how or information to directly
or indirectly Market a Competing Product in or for the
Territory.
2.13 Impax shall provide to Teva within thirty (30) days of the
Effective Date and, thereafter, as soon as available, all
technical information, data and know-how in Impax's possession
or under its control with respect to the Products useful or
necessary for Teva or its nominee to set up a facility for the
commercial manufacture of the Products (the "Technical
Package") in accordance with and subject to the provisions of
this Agreement. Teva shall maintain the Technical Package
subject to the confidentiality restrictions set forth in
Section 20.
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2.14 Teva and Impax, through the Working Committee referenced in
Section 6, below, shall in good faith negotiate and agree upon
the Tier 3 Products within ninety (90) days of the Effective
Date or such longer period of time as may be necessary and as
mutually agreed upon by the Parties (the "Tier 3 Period").
During the Tier 3 Period or until three (3) Tier 3 Products
have been agreed upon whichever shall first occur, neither
Impax nor any of its Affiliates shall directly or indirectly
grant to any third party the right to Market any product in
the Territory without first disclosing that product to Teva
and if Teva so desires, then the Parties shall designate that
product as a Tier 3 Product subject to the terms of this
Agreement.
2.15. Notwithstanding anything contained herein to the contrary, in
the event that Impax or any of its Affiliates shall directly
or indirectly develop, register, manufacture and/or Market any
OTC Products in the Territory the Parties shall in each such
case equally share any revenues, royalties or other
consideration received, directly or indirectly, by Impax or
any of its Affiliates on account of such activity in excess of
the first Five Hundred Thousand Dollars ($500,000) received,
directly or indirectly, by Impax and its Affiliates for all
OTC Products in the aggregate less, to the extent Impax shall
manufacture the subject OTC Product(s), documented
consideration paid to Impax to cover direct manufacturing
costs of such OTC Products.
2.16 If any product containing the same active ingredients in the
same dosage form and strength as any of the Products is
approved by the FDA for sale by any third party to the
non-prescription drug marketplace prior to Impax achieving the
Milestone Amount corresponding to the Launch Date Milestone
Event set forth in Annex C or Annex D, as applicable, for the
corresponding Product or within six (6) months after Impax
achieves such milestone, then Teva shall have a credit in an
amount equal to fifty percent (50%) of all milestone amounts
corresponding to the subject Product to apply against the
payment of its share of any Regulatory Expenses and
Intellectual Rights Legal Expenses for any of the Products
hereunder.
2.17 If any product containing the same active ingredients in the
same dosage form and strength as any of the Products is
approved by the FDA for sale by any third party to the
non-prescription drug marketplace after six (6) months and
prior to twelve (12) months following the achievement by Impax
of the Milestone Amount corresponding to the Launch Date
Milestone Event set forth in Annex C or Annex D, as
applicable, for the corresponding Product, then Teva shall
have a credit in an amount equal to twenty five percent (25%)
of all milestone amounts corresponding to the subject Product
to apply against the payment of its share of any Regulatory
Expenses and Intellectual Rights Legal Expenses for any of the
Products hereunder.
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3 OPTIONAL TERRITORY
3.1 Teva shall have the option on a Product-by-Product basis to
add any or all of the Optional Territory to this Agreement by
delivering a notice in writing to Impax within twelve (12)
months following the Effective Date. During such twelve (12)
month period neither Impax nor any of its Affiliates shall
directly or indirectly negotiate with or grant any rights to
any of the Products to any third parties in or for the
Optional Territory. In the event that Teva exercises such
option, Impax shall have six (6) months following Teva's
written notification of exercise to choose on a
country-by-country basis with respect to the countries
selected by Teva to either (a) manufacture and supply Teva's
and its Affiliates' requirements and grant Teva and its
Affiliates the exclusive right to Market the Product(s)
designated by Teva in the subject countries, or (b) grant Teva
a non-exclusive right to manufacture, register and Market the
Product(s) designated by Teva in the subject countries. In the
event Impax chooses option (a), above, the Parties shall share
equally all future Regulatory Expenses and Intellectual Rights
Legal Expenses, attributable to such Product(s) in such
countries in the Territory, and Impax shall receive the Impax
Margin for the applicable Product(s). In the event Impax
chooses option (b), above, Teva and/or its nominee shall have
the right at its option to carry out in its discretion and at
its cost and expense all future activities to obtain Approvals
attributable to such Products in such countries of the
Territory and manufacture such Product(s) for such countries
in the Territory. In such case, the applicable Approvals shall
be in Teva's name and Teva shall be the sole owner thereof,
and Impax shall receive an amount equal to + percent (+%) of
Net Sales of the applicable Product(s) in the subject
countries (the "Optional Territory Fee"). Impax shall be
deemed to have chosen option (b), above, if Teva fails to
receive written notification from Impax within the applicable
six (6) month period.
3.2 In the event option 3.1 (a) is exercised by Impax, the terms
and conditions of this Agreement respecting the U.S. shall
apply to such Products for the subject countries with the
following modifications: (in addition and subject to the above
provisions in Section 3.1 (a)).
3.2.1 Teva shall prepare each Approval for each of the
selected Products and use its commercially reasonable
best efforts to file such Approval and to obtain
Approval of each of the Products in the subject
countries from the Regulatory Authorities as promptly
as possible.
3.2.2 Teva shall use its commercially reasonable best
efforts to conduct all tests and studies reasonably
required to enable Teva to apply for, obtain and
maintain Approval for each of the Products in the
subject countries.
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3.2.3 Impax shall grant Teva reasonable and unrestricted
access, without any charges, costs or expense, to any
and all relevant documentation, data, information,
tests, studies or know-how related to the Products,
including without limitation, any Regulatory
Documentation, in its possession or under its
control, and provide free of charge any and all
assistance that Teva may reasonable request in order
for Teva to perform its obligations under this
Agreement.
3.2.4 Teva shall be primarily responsible for all
communications with the Regulatory Authorities in the
subject countries relating to the Approval of the
Products in the subject countries; provided, however,
Teva and Impax shall collaborate in determining the
appropriate strategy for obtaining and maintaining
Approval of the Products in the subject countries and
Teva shall promptly provide to Impax copies of all
filings, documents and correspondence directed to
such Regulatory Authorities and related to the
Products in draft form for comment by Impax and,
provided further, that Teva shall in good faith give
due regard to reasonable comments, suggestions and
input from Impax. Teva shall promptly provide to
Impax copies of all documents and correspondence
received by Teva from the Regulatory Authorities that
are related to obtaining and maintaining Approval of
the Products, and Teva shall allow Impax to attend in
all meetings with same.
3.2.5 The Approvals shall be filed in Impax's name and
Impax shall be the sole owner of such Approvals and
Regulatory Documentation in connection therewith to
the extent permitted by Applicable Law and subject to
the grant hereunder to Teva. If not permitted the
Approvals shall be filed in Teva's or its nominee's
name.
3.2.6 Teva shall assume direction and control of any
Intellectual Rights Suit for the Tier 1 Products in
the manner provided for the Tier 2 Products and Tier
3 Products as set forth in Section 15.5. Settlement
of payments with respect to such expenses shall be
effected within thirty (30) days following each
Calendar Quarter and payment made to the Party
entitled.
3.2.7 Teva shall have the right to appoint a third party on
a country-by-country and/or Product-by-Product basis
to register and/or Market the Products in the
Optional Territory. Teva shall provide written notice
to Impax of any such appointment.
13
3.2.8 The Profit for the applicable Products in the subject
countries shall be reduced by Teva's and/or its
nominee's direct Marketing expenses.
3.2.9 Subject to Section 3.2.6, the provisions of Section
15.5 and 15.6 hereof shall apply to all Teva selected
Products in the subject countries.
3.2.10 With respect to any Transaction Events that have
occurred prior to such exercise by Impax, Teva shall
have the right to issue a Transaction Event Notice
within sixty (60) days of Impax's exercise of option
(a).
3.3 In the event option 3.1 (b) is exercised by Impax, (a) none of
the provisions of this Agreement, except Sections 1, 2.15,
3.1, 3.3, 4.1, 9, 11.4, 11.6, 11.8, 12, 13, 14 and 20 - 33
shall apply to Teva and/or Impax or their respective
Affiliates for the subject countries; and (b) Impax shall
grant Teva reasonable and unrestricted access without charge
to any and all relevant documentation, data, information,
tests, studies, or know how related to such Products,
including without limitation, the Regulatory Documentation, in
its possession or under its control, and provide free of
charge any and all assistance that Teva may reasonably request
in order for Teva to prepare, file, obtain and maintain the
Approvals for the subject countries, and to manufacture the
Products for the subject countries.
4. OPTIONAL PRODUCT
4.1 Teva shall have the option to add the products listed in Annex
G (the "Optional Products") to this Agreement as Tier 1
Products upon issuance of written notice to Impax at any time
from the Effective Date until February 1, 2002. In the event
of such election, the terms and conditions of this Agreement
respecting Tier 1 Products shall apply in the same manner to
the Optional Products with the following modifications:
(a) Impax shall provide to Teva the Technical Package
with respect to the Optional Products within thirty
(30) days following receipt of Teva's written notice
pursuant to this Section 4.1.
(b) Teva shall have six (6) months following the written
notification to Impax pursuant to this Section 4.1 to
add the Optional Products to any or all of the
Optional Territory in accordance with the terms and
conditions set forth in Sections 3.1 - 3.3.
14
4.2 In the event Teva does not exercise the option under Section
4.1 to add the Optional Products to this Agreement, it shall
have the right to extend the option period, upon written
notice of extension given to Impax prior to February 1, 2002,
until ten (10) business days following the last tentative
Approval by the FDA for all Optional Products. If Teva extends
the option period and subsequently does not exercise this
option with respect to the Optional Products in the U.S., and
thereafter during the Term, Markets in the U.S. a product
containing the same active ingredients in the same dosage form
and strength as any of the Optional Products, Teva shall pay
to Impax consideration for such extension to be agreed upon by
the Parties in good faith.
4.3 In the event that Teva does not add the Optional Products to
this Agreement pursuant to Section 4.1 or 4.2, then, the
milestones in Annex C shall be amended as provided in Annex D,
and Impax shall repay to Teva on January 15, 2004 pursuant to
the provisions of Section 10.1 Five Million U.S. Dollars (U.S.
$5,000,000) in addition to any other amounts owed to Teva if
Impax fails to meet any of the milestones set forth in Annex
D.
5 REGULATORY APPROVAL
5.1 Impax shall prepare each ANDA for each of the Products and use
its commercially reasonable best efforts to file such ANDAs
and to obtain Approval of each of the Products in the U.S.
from the FDA as promptly as possible.
5.2 Impax shall use its commercially reasonable best efforts to
conduct all tests and studies reasonably required to enable
Impax to apply for, obtain and maintain Approval for each of
the Products in the U.S.
5.3 Impax shall be primarily responsible for all communications
with the FDA relating to the Approval of the Products in the
U.S.; provided, however, Teva and Impax shall collaborate in
determining the appropriate strategy for obtaining and
maintaining Approval of the Products in the U.S. and Impax
shall promptly provide to Teva copies of all Regulatory
Documentation and all other filings, documents and
correspondence directed to the FDA and related to the Products
in draft form for comment by Teva and, provided further, that
Impax shall in good faith give due regard to the reasonable
comments, suggestions and input from Teva. Impax shall
promptly provide to Teva copies of all Regulatory
Documentation and all other documents and correspondence
received by Impax from the FDA that are related to obtaining
and maintaining Approval of the Products, and Impax shall
allow Teva to attend all meetings with the FDA.
5.4 The ANDAs shall be filed in Impax's name and Impax shall be
the sole owner of such Approvals and Regulatory Documentation
in connection therewith, subject to Teva's rights hereunder.
15
5.5 Impax shall grant Teva reasonable and unrestricted access,
without any charges, costs or expense, to any and all relevant
documentation, data, information, tests, studies or know-how
related to the Products, including without limitation, the
ANDA and/or other Regulatory Documentation, in its possession
or under its control, and provide free of charge any and all
assistance that Teva may reasonably request in order for Teva
to perform its obligations under this Agreement.
5.6 Teva or its Affiliates shall be responsible for filing each of
the Products, and thereafter processing such filings with
appropriate federal, state or private formularies in the
Territory.
5.7 Each Party shall perform, or cause to be performed, its
activities in furtherance of the provisions of this Section 5
in a good scientific manner, in compliance in all material
respects with all requirements of Applicable Law, and in an
efficient and expeditious manner.
5.8 Impax and Teva shall share equally all reasonable
out-of-pocket Regulatory Expenses incurred by either Party
and/or their respective Affiliates, after the Effective Date
for the Territory; provided, however, Impax shall bear all
Regulatory Expenses for Tier 1 Products for the U.S. and
fifty-five percent (55%) of Regulatory Expenses for Tier 2
Products for the U.S. Settlement of payments with respect to
Regulatory Expenses shall be effected within thirty (30) days
following the end of each month and payment made to the Party
entitled.
5.9 Teva shall pay to Impax Three Hundred Thousand U.S. Dollars
(U.S. $300,000) within thirty (30) days following the
Effective Date for regulatory expenses incurred by Impax prior
to the Effective Date for development of the Tier 2 Products.
6 WORKING COMMITTEE
Within thirty (30) days of the Effective Date, each of Teva and Impax
shall appoint three (3) appropriately qualified representatives to a
working committee to coordinate the selection and identification of the
Tier 3 Products, to facilitate the exchange of information relating to
the development of the Products, to monitor the costs and activities
related to the development and manufacture of the Products, and to
oversee the renovation and construction of the new Impax manufacturing
facilities in Hayward, California (the "Working Committee"). In each
instance such activities shall not extend beyond the scope of this
Agreement relating to the Products in the Territory.
7 SUPPLY
7.1 Subject to Teva's compliance with Section 8, Impax shall use
its commercially reasonable best efforts to supply on a timely
basis all of Teva's and its Affiliates' requirements for the
Products for the Territory.
16
7.2 Without limiting the provisions of Section 8.2, Impax shall
use its commercially reasonable best efforts to ensure that it
has an adequate supply of API and other ingredients required
for the manufacture of the Products in order to meet at least
one hundred and twenty percent (120%) of Teva's and its
Affiliates' forecasted requirements for the Products for the
Territory. In furtherance of the foregoing obligation, Impax
hereby acknowledges that Teva (including its Affiliates) is
and shall remain throughout the Supply Term a preferred
customer and as such shall have priority over all other
parties (including Impax and its Affiliates) with regard to
the supply of API and Products.
7.3 Without limiting any of its obligations under this Agreement,
in the event that for any reason Impax may have an
insufficient supply of API and other required ingredients to
meet its obligations under Section 7.1, Impax shall use its
commercially reasonable best efforts to obtain a third party
source for such API and other required ingredients in
consultation with Teva through the Working Committee.
7.4 Impax shall supply the Products to Teva and its Affiliates in
finished final dosage form and fully packaged.
7.5 Subject to the provisions of Section 8, Teva, its Affiliates
and/or a third party reasonably acceptable to both Parties
shall have the right, at Teva's sole option, to manufacture
any of the Products in the event of the inability of Impax to
meet Teva's and/or its Affiliates' requirements for such
Products for any reason including, but not limited to, force
majeure, provided, however, that Impax shall have failed to
cure such inability within sixty (60) days of written notice
from Teva. In the event Teva and/or its Affiliate and/or such
third party, as applicable, shall elect to manufacture any of
the Products: (a) Impax agrees that upon receipt of the
above-referenced notice and expiration of the sixty (60) day
cure period, to the extent not otherwise contained in the
Technical Package, it shall promptly furnish free of charge
all technical information, data and know-how, including
without limitation, any Regulatory Documentation, and provide
such cooperation (including the reasonable availability of
Impax personnel) as reasonably required to enable Teva, its
Affiliate and/or such third party, as applicable, to
effectively manufacture and supply Teva's and its Affiliates'
requirements of the Products for the applicable countries of
the Territory; (b) the Impax Margin or Revised Impax Margin
(as the case may be) for such Products shall be reduced by
fifty percent (50%) (in half); and (c) Teva shall receive a
credit against any payments thereafter due or outstanding to
Impax under this Agreement for any and all reasonable
out-of-pocket costs incurred by Teva and/or its Affiliates,
and/or paid by Teva to Impax, in connection with or resulting
from the foregoing manufacturing activities and/or transfer
(including, without limitation, for any required tests or
studies and for any expenses incurred by Teva and/or its
Affiliates pursuant to Section 7.10 in connection with the
applicable Products).
17
7.6 Impax shall use its commercially reasonable best efforts in
accordance with its standard manufacturing practices to reduce
its Manufacturing Costs of each of the Products throughout the
respective Supply Term in order to maximize Profit. In the
event that any of Impax's Manufacturing Costs excluding Cost
of Materials for any of the Products equal or exceed
seventy-five percent (75%) of the amounts set forth in Annex
B, the Parties shall negotiate on a Product-by-Product basis
in good faith a way to reduce such Manufacturing Costs,
including, without limitation, by transferring the manufacture
of the Products to Teva, its Affiliates and/or a third party,
and the sharing of costs associated with such transfer.
7.7 If Teva believes that all or any part of any lot of Product it
obtains from Impax has not been manufactured in accordance
with the requirements of this Agreement, including, without
limitation, with the Specifications, Impax's representations
and warranties hereunder or any other defect in the Product,
or that there is a shortage of Product, then Teva will
promptly notify Impax in writing setting forth in reasonable
detail the alleged nonconformity, defect or shortage. Subject
to the provisions of Section 7.9, Teva agrees to notify Impax
of any nonconformity, defect or shortage of any shipment of
Product that Teva discovers by its standard receiving
procedures within thirty (30) days after Teva's receipt of the
Product from Impax. Upon receipt of such notification of
nonconformance, defect or shortage, Impax will have fifteen
(15) days to inspect the affected Product and make a
reasonable assessment of the alleged nonconformance, defect or
shortage. If the Parties agree that there is a nonconformance,
defect or shortage, Impax, at its sole cost and expense, shall
promptly replace any nonconforming or defective Product or
make up the shortage, to be shipped at Impax's cost.
Nonconforming or defective Product will be returned to Impax
at its expense.
7.8 Any dispute between the Parties concerning the rejection of
all or any part of a shipment of Product (including, without
limitation, any Latent Defects) which the parties are unable
to resolve within a sixty (60) day period will be submitted to
an agreed upon qualified independent laboratory for testing
using test methods set forth in the Approval for the Product
and/or any other mutually agreed upon test methods. Impax will
use its best efforts to replace promptly any shipment or
portion of a shipment under dispute until the dispute is
resolved. The replacement Product and the cost of the
laboratory will be at Impax's cost if the laboratory finds
that the lot in question is non-conforming to Specifications
or otherwise defective. The costs of the independent
laboratory will be paid by Teva if the lot in question is
found by the laboratory to be conforming and compliant. The
findings of the laboratory shall be final and binding upon the
Parties, and shall not be subject to appeal or review by any
third party.
18
7.9 The Parties acknowledge that it is possible for Product to
have manufacturing defects that are not discoverable upon
reasonable physical inspection or testing (referred to as
"Latent Defect" or "Latent Defects"). Latent Defects may
include, by way of illustration and not definition or
limitation, defects not present in preshipment samples, loss
of stability, separation, discoloration or other manufacturing
defects. Impax is responsible for all Latent Defects that are
attributable to the production of the Product by or on behalf
of Impax or failure of such Product to otherwise comply with
the provisions of this Agreement (including without
limitation, Impax's representations and warranties hereunder).
As soon as Impax discovers or becomes aware of a Latent Defect
in any Product it produced and shipped, it will immediately
notify Teva of the lot(s) involved and Impax will replace that
Product in the manner described in Sections 7.7 and 7.8,
above.
7.10 In order to ensure continuous supply of the Products and to
maximize sales and profits, commencing six (6) months
following the Effective Date, at Teva's option, on a
Product-by-Product and country-by-country basis, the Parties
shall use their commercially reasonable best efforts to
supplement for each of the Products the ANDAs submitted with
the FDA as of the Effective Date, as well as any Approvals
(including ANDAs) to be submitted with the FDA or any non-U.S.
Regulatory Authority thereafter in order to permit Teva and/or
its Affiliate or a third party reasonably acceptable to both
Parties, to manufacture and/or package the Products for the
Territory. Subject to Impax providing an estimate of
anticipated expenses, and except as otherwise provided in
Section 7.5 and 7.6, above Teva shall pay all expenses
associated with the foregoing, such expenses consisting of
pre-approved reasonable out-of-pocket expenses of Impax,
supply of API at cost to Impax, and a per diem charge of One
Thousand U.S. Dollars (U.S. $1,000) for each employee of
Impax, assisting at Teva's request, with supplementing the
ANDAs.
8 FORECASTS AND ORDERS
8.1 Within one hundred and eighty (180) days prior to the
anticipated Launch Date for each of the Products for each
country in the Territory, Teva shall provide to Impax a
nonbinding written forecast of estimated quantities of Product
that Teva and its Affiliates anticipate ordering from Impax
during the twelve (12) month period commencing with the Launch
Date for such country. Teva shall update such forecast on a
Calendar Quarter rolling basis, for the twelve (12) month
period commencing ninety (90) days from each such update. Teva
shall communicate any changes to its forecast as soon as the
changes are known by Teva. Teva shall use its commercially
reasonable best efforts to ensure the accuracy of its
forecasts. The first quarter of each such updated forecast
shall be deemed a firm purchase order.
19
8.2 Each firm purchase order shall set forth the quantities of
Products ordered, dates for delivery of the Products, the
country for which the Products are designated, the place of
delivery and reasonable instructions for shipping. Impax shall
supply to Teva and its Affiliates' the quantity of Products on
the delivery dates and at the delivery destination stated
therein; provided, however, Impax shall not be obligated but
shall be required to use its commercially reasonable best
efforts to fill any purchase order to the extent of quantities
exceeding one hundred and twenty percent (120%) of the amount
last forecasted for the applicable Calendar Quarter except as
otherwise provided in Section 2.10.
8.3 Any terms and conditions of an invoice, acknowledgement or
similar document provided by Impax for Products, or, any terms
and conditions of purchase orders provided by Teva for
Products, which are inconsistent with or in addition to the
terms of this Agreement shall be null and void.
9 TRADEMARK(S)
Teva and its Affiliates shall have the right, in their respective sole
discretion and at their expense, to select and to register any of their
trademarks, as they wish to employ in connection with the Marketing of
any of the Products in any of the countries in the Territory and to
Market Product using such trademarks. Teva or its Affiliate shall own
all right, title and interest in and to all such trademarks, and Impax
hereby agrees it shall have no right, title or interest in same.
10 CONSIDERATION AND LOAN
10.1 Teva shall, within five (5) business days of the Effective
Date, loan to Impax the sum of Twenty Two Million U.S. Dollars
(U.S. $22,000,000) (the "Loan") towards the development of the
Products and the establishment of the production facilities
and infrastructure necessary to meet Teva's and/or its
Affiliates' Product requirements hereunder. Impax hereby
undertakes and agrees that it shall expend not less than
Twenty Two Million U.S. Dollars (U.S. $22,000,000) towards the
construction of the production facilities located in Hayward
California, including the facility located on San Antonio
Street (the "New Facility") and the development of the
Products. The Loan shall be evidenced by Impax's promissory
note in the form annexed hereto at Annex H (the "Note").
Without limiting any other rights and remedies available to
Teva under this Agreement, the Note, at law or in equity, from
and after the occurrence of an Event of Default as defined in
Section 10.7 Teva shall have the right to declare the Loan
immediately due and payable by delivering written notice to
such effect to Impax. Impax shall repay the then outstanding
balance of the Loan to Teva, in cash, within thirty (30) days
of its receipt of such notice. In the event Impax achieves the
milestones set forth in Annex C or Annex D, as applicable, on
a timely basis, then the outstanding balance of the Loan shall
be reduced by the corresponding amounts designated for each
such achieved milestone (each such amount is referred to
herein as the "Milestone Amount"). If, on the other hand,
Impax fails to meet any of the milestones set forth in Annex C
or Annex D, as applicable, by the respective dates set forth
for each such milestone (including as a result of an early
termination of this Agreement), then Teva shall have the
option, on a Product-by-Product basis with respect to the
applicable milestone, to either:
20
(a) require Impax to repay to Teva that portion of the
Loan equal to the applicable Milestone Amount; or
(b) require Impax to repay to Teva that portion of the
Loan equal to fifty percent (50%) of the applicable
Milestone Amount.
Repayment by Impax of the amounts under subparagraphs (a) and
(b), above, and Section 4.3, if applicable, shall be made to
Teva not later than January 15, 2004, and shall be paid, at
the option of Impax, in cash or (subject to Section 10.5) in
Impax Common Stock at the Designated Share Price.
10.2 In the event Teva chooses option 10.1(a), above, then the
grant to Teva with respect to the Marketing of the subject
Product for the U.S. shall be deemed nonexclusive and
effective as of such exercise, and the provisions of Sections
2.3 - 2.11 and such other provisions of this Agreement
respecting Competing Products of the subject Products shall no
longer apply to Teva and/or Impax or their respective
Affiliates with respect to such Products for the U.S.;
provided, however, in any event, Impax shall remain obligated
to supply Teva's and/or its Affiliates' requirements of the
applicable Product on a most-favored basis.
10.3 Subject to the provisions of the Stock Purchase Agreement,
being executed by the Parties concurrently herewith, and
Section 10.5, Teva shall, on each of September 15, 2001,
December 15, 2001, March 15, 2002 and June 15, 2002, purchase
from Impax such number of shares of Impax Common Stock at the
Designated Share Price as equals Three Million Seven Hundred
and Fifty Thousand U.S. Dollars (U.S. $3,750,000).
10.4 Upon the first Launch Date of any Tier 2 or Tier 3 Product in
the U.S., Teva shall sell back to Impax for an aggregate
purchase price of One U.S. Dollar (U.S. $1.00) such number of
shares of Impax Common Stock that equals sixteen and two
thirds percent (16 2/3%) of the aggregate shares of Impax
Common Stock purchased by Teva from Impax pursuant to Section
10.3.
21
10.5 Notwithstanding anything contained in Sections 10.1 or 10.3 to
the contrary, in no event shall Teva be obligated to purchase
(or accept as repayment of the Loan pursuant to Section 10.1)
such number of shares of Impax Common Stock that at the time
of transfer to Teva or its Affiliate would, in the aggregate,
exceed nineteen point nine percent (19.9%) of the then issued
and outstanding shares of Impax Common Stock. If any such
transfer would result in Teva and its Affiliates owning more
than nineteen point nine percent (19.9%) of the outstanding
Impax Common Stock then, at Teva's request, such excess
amounts shall be paid by Impax to Teva in cash.
10.6 Throughout the period that the Loan, or any portion thereof,
is outstanding, Impax hereby covenants and agrees it will not,
nor will it permit any of its Affiliates to:
(a) Liquidate, windup or dissolve.
(b) Assume, endorse, be or become liable for or guarantee
any indebtedness of any Person excluding however, the
endorsement of negotiable instruments for deposit or
collection in the ordinary course of business.
(c) Declare or pay any dividends on its capital stock
(other than dividends payable solely in shares of
Impax Common Stock), or purchase, redeem, retire or
otherwise acquire any of its capital stock at any
time outstanding except as provided in Section 10.4,
except any Affiliate wholly owned by Impax may
declare and pay dividends to Impax.
(d) Materially alter the nature of its business.
(e) Directly or indirectly purchase, acquire or lease any
property from, or sell, transfer or lease any
property to, or enter into any other transaction,
with any Affiliate of Impax or any party related to
the management of Impax except the assignment of
Impax's right to purchase the New Facility to
Affiliates (subject to Teva's rights pursuant to
Section 10.11) at prices and on terms not less
favorable to it than those which would have been
obtained in an arm's-length transaction with a
non-affiliated third party.
22
10.7 Subject to any applicable grace, notice and cure period
provided for herein the occurrence and the continuance of any
of the following events is referred to herein as an "Event of
Default":
(a) If Impax shall fail to pay, when due, any portion of
the Loan or interest thereon; or
(b) Any representation or warranty made by Impax herein
or in the Stock Purchase Agreement or Registration
Rights Agreement shall prove to have been false in
any material respect on or as of the date made; or
(c) This Agreement or the Stock Purchase Agreement or the
Registration Rights Agreement is terminated by Teva
as a result of a breach, default, misrepresentation
or other act or omission by Impax giving rise to the
right of termination by Teva hereunder or thereunder,
respectively.
10.8 The purchase of Impax Common Stock by Teva or the repayment of
all or a portion of the Loan by Impax in shares of Impax
Common Stock pursuant to this Section 10 shall be conditioned
upon the execution by the Parties of a Stock Purchase
Agreement and Registration Rights Agreement in the form
attached as Annex E.
10.9 The Loan shall bear interest at the annual rate of eight
percent (8%) accruing from the date of grant (the "Interest
Obligation"). The Interest Obligation shall be due and payable
on January 15, 2004 or such earlier date that the outstanding
balance of the Loan is due (without right of set-off,
deduction or other withholding), to the extent there remains
any outstanding balance on the Loan pursuant to this Section
10, and only with respect to such portion of the Loan that had
not been forgiven as of such date. Notwithstanding the
foregoing, Teva agrees to forgive the Interest Obligation in
the event and upon the date that Impax has obtained tentative
or final Approvals for any three of the Products.
10.10 By no later than December 31, 2001, as additional security for
the repayment of the Loan, Impax shall grant to Teva a
mortgage on the New Facility subordinate to a senior lien of
up to Three Million U.S. Dollars ($3,000,000) in form and
substance reasonably satisfactory to Teva, or such other
collateral as may be reasonably satisfactory to Teva.
11 PRICES, TERMS, CONDITIONS, TITLE AND RISK
11.1 Impax shall deliver each order of Products to Teva and its
Affiliates CIP (as per Incoterms 2000) to a location to be
designated by Teva or its Affiliates.
11.2 Impax will invoice Teva when Product is shipped to Teva at an
amount equal to the applicable Manufacturing Cost. Teva shall
subject to Sections 7.7, 7.8 and 7.9 pay for such Product
thirty (30) days from the date of receipt of the applicable
shipment.
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11.3 Within thirty (30) days following each Calendar Quarter during
the Supply Term, Teva shall compute and report to Impax in a
mutually acceptable format the Net Sales and Profit for each
Product in each country in the Territory during that Calendar
Quarter and Teva shall pay to Impax the Impax Margin, Revised
Impax Margin, or Optional Territory Fee, as the case may be,
for each Product for that Calendar Quarter as reflected in the
report. In addition, within seven (7) business days after the
end of each month, Teva shall provide to Impax information
(which could be good faith estimates if final data is not
available) as to the amount of Net Sales, Profit, and number
of units sold of each Product during that month.
11.4 Teva shall have the sole and exclusive right to determine all
terms and conditions of sale of the Products to its customers.
11.5 Subject to Teva having received full launch quantities of the
applicable Product based upon Teva's forecast, Teva shall
launch each Product on a country-by-country basis within
fifteen (15) days of final Approval of each Product; provided,
however, that if either Party has a written opinion of patent
counsel reasonably acceptable to the other Party that launch
would result in a significant risk of damages for infringement
of third party intellectual property rights, then the Parties
shall agree upon a later launch for such Product in the
subject country in the Territory or, alternatively, Teva may
compel launch of the Product in such country in the Territory.
If Teva so compels a launch of a Product in any country in the
Territory, then it shall indemnify, defend and hold harmless
Impax for any damages and expenses of an Intellectual Rights
Suit to the extent directly related to the patents set forth
in the above-referenced Impax patent opinion and to the extent
caused by the launch of the Product and not attributable in
whole or in part to any untrue representation or warranty of
Impax or breach of a covenant made by Impax hereunder.
Further, in such case, (a) during the period commencing with
the applicable Launch Date and ending on the earlier of six
(6) months or the date the Parties receive a final
non-appealable court decision with respect to the applicable
Intellectual Rights Suit, if any, the Impax Margin shall be
deemed to be + percent (+%) and Revised Impax Margin, if
applicable, shall be reduced by thirty percent (30%) and (b)
any expenses and/or damages paid by Teva in connection with
any Intellectual Rights Suit related to the applicable
Product, or the above indemnity, shall be set-off, credited or
reimbursed against any amounts paid or payable to Impax
hereunder related to such Product (including, without
limitation, Impax Margin, Revised Impax Margin, and Optional
Territory Fee).
--------
+ Confidential portions omitted and filed separately with the Commission.
24
11.6 Teva and its Affiliates shall permit an independent certified
public accounting firm selected by Impax, and reasonably
acceptable to Teva, to have access, during normal business
hours and upon reasonable prior notice (not more often than
once in any calendar year), to those books and records
maintained by Teva necessary for Impax to verify the accuracy
of Teva's calculation of any Net Sales, Profit, Regulatory
Expenses, Impax Margin, Revised Impax Margin and/or Optional
Territory Fee hereunder for any period ending not more than
five (5) years prior to the date of such request. All such
information shall be retained on a confidential basis by the
accounting firm, and such accounting firm's use of such
information shall be limited to the aforementioned
verification.
11.7 Impax and its Affiliates shall permit an independent certified
public accounting firm selected by Teva, and reasonably
acceptable to Impax, to have access, during normal business
hours and upon reasonable prior notice (not more often than
once in any calendar year), to those books and records
maintained by Impax necessary for Teva to verify the accuracy
of Impax's calculation of any Manufacturing Costs, Regulatory
Expenses and/or Intellectual Rights Legal Expenses hereunder
for any period ending not more than five (5) years prior to
the date of such request. All such information shall be
retained on a confidential basis by the accounting firm, and
such accounting firm's use of such information shall be
limited to the aforementioned verification.
11.8 Teva and Impax shall calculate and record Net Sales,
Manufacturing Costs, Profit, Impax Margin, Revised Impax
Margin, Optional Territory Fee, Regulatory Expenses and/or
Intellectual Rights Legal Expenses in accordance with U.S.
GAAP, and shall maintain all books and records related thereto
in accordance with standard cost accounting policies and
practices, in accordance with U.S. GAAP for the Term plus an
additional three (3) years thereafter.
12 ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF IMPAX
12.1 Impax hereby represents and/or warrants and/or undertakes to
Teva that:
12.1.1 it has the corporate authority to enter into this
Agreement and to perform its obligations hereunder;
25
12.1.2 neither the execution and delivery of this
Agreement by Impax nor its performance hereunder
conflicts with or results in any violation or
breach of, or constitute (with or without due
notice or lapse of time or both) a default under
any of the terms or conditions of any note, bond,
mortgage, indenture, license, agreement or other
instrument or obligation to which it or any of its
Affiliates is a party or by which it or any of its
Affiliates or any of their respective properties or
assets may be bound, or to its best knowledge,
violate any statute, law, rule, regulation, writ,
injunction, judgment, order or decree of any court,
administrative agency or governmental authority
binding on it or any of its Affiliates or any of
their respective properties or assets, excluding
any such breaches or defaults that, individually
and in the aggregate, would not have a material
adverse effect on its business or financial
condition;
12.1.3 this Agreement is a legal, valid and binding
agreement of Impax enforceable in accordance with
its terms;
12.1.4 neither it nor any of its Affiliates have or will,
directly or indirectly, enter into any contract or
any other transaction with any third party or
Affiliate that conflicts or derogates from its
undertakings hereunder;
12.1.5 all Products supplied to Teva or its Affiliates
shall: (a) meet the applicable Specifications at
the time of shipment; (b) meet regulatory
requirements of any relevant Regulatory Authority
in the Territory; (c) be manufactured, packaged,
tested, stored and shipped in accordance with
applicable cGMPs, the Approvals, and Applicable
Law; (d) not be adulterated or misbranded under the
United States Food, Drug and Cosmetic Act including
any other relevant laws and regulations of the
Territory as amended from time to time; and (e) be
produced, packaged, tested and stored in facilities
that have been approved by the applicable
Regulatory Authority, to the extent required by
Applicable Law;
12.1.6 the API does not violate, infringe, or otherwise
conflict or interfere with the intellectual
property of any third party in the U.S. and, to
Impax's best knowledge, the API does not violate,
infringe, or otherwise conflict or interfere with
the intellectual property of any third party in any
other country of the Territory;
26
12.1.7 Impax has furnished Teva with access to a complete
copy of the U.S. Regulatory Documentation for the
Products, including all material amendments and
supplements thereto; Impax is and was, at all times
prior to the Effective Date, the lawful holder of
all rights under the Regulatory Documentation and
to the best of Impax's knowledge, Impax has
complied in all material respects with all
Applicable Laws and regulations in connection with
the preparation and submission to the FDA of the
Regulatory Documentation;
12.1.8 neither it nor any of its Affiliates have been
debarred or is subject to debarment and will not
use in any capacity, in connection with the
services to be performed under this Agreement, any
Person who has been debarred pursuant to Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Food, Drug and Cosmetic
Act or equivalent laws of any country in the
Optional Territory selected hereunder;
12.1.9 Impax's manufacturing facilities conform, and shall
continue to conform throughout the Term, in all
respects to Applicable Law governing such
facilities; and
12.1.10 all Products supplied hereunder shall be free and
clear of all security interests, liens, or other
encumbrances of any kind or character.
13 ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF TEVA
13.1 Teva hereby represents and/or warrants and/or undertakes to
Impax that:
13.1.1 it has the corporate authority to enter into this
Agreement and to perform its obligations hereunder;
13.1.2 neither the execution and delivery of this
Agreement by Teva nor its performance hereunder
conflicts with or results in any violation or
breach of, or constitute (with or without due
notice or lapse of time or both) a default under
any of the terms or conditions of any note, bond,
mortgage, indenture, license, agreement or other
instrument or obligation to which it is a party or
by which it or any of its properties or assets may
be bound, or to its best knowledge, violate any
statute, law, rule, regulation, writ, injunction,
judgment, order or decree of any court,
administrative agency or governmental authority
binding on it or any of its properties or assets,
excluding any such breaches or defaults that,
individually and in the aggregate, would not have a
material adverse effect on its business or
financial condition;
13.1.3 this Agreement is a legal, valid and binding
agreement of Teva, enforceable in accordance with
its terms;
13.1.4 it has not and will not, directly or indirectly,
enter into any contract or any other transaction
with any third party or Affiliate (excluding those,
if any, respecting, the Optional Territory or
Optional Products) that conflicts or derogates from
its undertakings hereunder;
27
13.1.5 in the event and to the extent that Teva and/or its
Affiliates shall manufacture the Products, all such
Products shall: (a) meet the applicable
Specifications at the time of shipment; (b) meet
regulatory requirements of any relevant Regulatory
Authority in the Territory; (c) be manufactured,
packaged, tested, stored and shipped in accordance
with applicable cGMPs, the Approvals, and
Applicable Law; (d) not be adulterated or
misbranded under the United States Food, Drug and
Cosmetic Act or relevant laws and regulations of
Canada, as amended from time to time; and (e) be
produced, packaged, tested and stored in facilities
that have been approved by the applicable
Regulatory Authority, to the extent required by
Applicable Law;
13.1.6 in the event and to the extent that Teva and/or its
Affiliates shall manufacture the Products, Teva's
and/or its Affiliates' manufacturing facilities for
such Products shall conform in all respects to
Applicable Law governing such facilities;
13.1.7 neither it nor any of its Affiliates have been
debarred or is subject to debarment and will not
use in any capacity, in connection with the
services to be performed under this Agreement, any
Person who has been debarred pursuant to Xxxxxxx
000 xx xxx Xxxxxx Xxxxxx Food, Drug and Cosmetic
Act or equivalent laws of any country in the
Optional Territory selected hereunder, or who is
the subject of a conviction described in such
section; and
13.1.8 all Products that it shall Market hereunder shall
have been Marketed and stored in accordance with
Applicable Law.
14 INDEMNIFICATIONS AND LIABILITY
14.1 Except as otherwise expressly provided in Section 15, Impax
shall indemnify, defend and hold Teva, its Affiliates, and
their respective officers, directors, employees, and
representatives harmless from and against any and all losses,
liabilities, damages, costs and expenses, including reasonable
attorney's fees and disbursements, (collectively, "Damages")
in connection with any and all suits, investigations, claims
or demands by third parties resulting from or arising out of:
(a) any breach or alleged breach by Impax (or its Affiliates)
of any representation, warranty, undertaking or covenant
hereunder; (b) events occurring prior to the Effective Date
and relating to the Products; (c) any negligence or willful
misconduct by Impax (or its Affiliates); or (d) a defect
contained in a Product manufactured by Impax, its Affiliates
or any third party on its behalf.
28
14.2 Except as otherwise expressly provided in Xxxxxxx 00, Xxxx
shall indemnify, defend and hold Impax, its Affiliates, and
their respective officers, directors, employees, and
representatives harmless from and against any and all Damages
in connection with any and all suits, investigations, claims
or demands by third parties resulting from or arising out of:
(a) any breach or alleged breach by Teva (or its Affiliates)
of any representation, warranty, undertaking or covenant
hereunder; (b) any negligence or willful misconduct by Teva
(or its Affiliates); (c) any defect contained in a Product
manufactured by Teva, it Affiliates or any third party on its
behalf; or (d) any claim of trademark infringement arising
from the use by Teva (or its Affiliates) of any of its
trademarks in connection with the Products.
14.3 In the event that in determining the respective obligations of
indemnification under Section 14, it is found that the fault
of Impax, Teva or their respective Affiliates, contributes to
any Damages relating to the Products supplied and/or
distributed or sold hereunder, then each of Impax and Teva
shall be responsible for that portion of the Damages to which
its fault contributed.
14.4 As soon as a Party becomes aware of the possibility of a claim
involving indemnification under this Section 14, the
indemnified Party shall give the indemnifying Party prompt
written notice in writing and shall permit the indemnifying
Party to have control over the defense of such claim or suit.
The indemnified Party agrees to provide all reasonable
information and assistance to the indemnifying Party in such
defense. No such claims shall be settled other than by the
Party defending the same, and then only with the consent of
the other Party, which shall not be unreasonably withheld or
delayed; provided, however, that the indemnified Party shall
have no obligation to consent to any settlement of any such
claim which imposes on the indemnified Party any liability or
obligation which cannot be assumed and performed in full by
the indemnifying Party.
14.5 Except in the event of and to the extent of Damages awarded to
a third party in connection with the indemnification
provisions set forth in Sections 14.1 and 14.2, above, or
awarded to a third party in connection with an Intellectual
Rights Suit, neither Teva nor Impax shall be liable to the
other for special, indirect, incidental or consequential
damages, whether in contract, warranty, negligence, tort,
strict liability or otherwise, arising out of the manufacture,
Marketing, distribution, sale or use of the Products.
14.6 Without limiting the respective obligations of the Parties
hereunder, each Party shall maintain, throughout the Term
sufficient product liability insurance coverage to satisfy its
obligations hereunder. Each Party shall cause the other Party
to be named in such policies as an additional insured and,
upon request, each Party agrees to provide to the other
certificates of insurance, evidencing such insurance. Without
derogating from the foregoing, Impax shall purchase and
maintain throughout the Term insurance provided by an
insurance company reasonably satisfactory to Teva, at its own
expense to cover product liability in an amount not less than
Twenty Million U.S. Dollars (U.S. $20,000,000) per occurrence
and in the aggregate on or before the launch of the first Tier
1 Product (in any strength), One Hundred Million U.S. Dollars
(U.S. $100,000,000) per occurrence and in the aggregate on or
before the launch of the second Tier 1 Product (in any
strength), and One Hundred and Fifty Million U.S. Dollars
(U.S. $150,000,000) per occurrence and in the aggregate as of
January 1, 2004. In addition, the deductible for any Impax
insurance policies shall not exceed one percent (1%) of the
applicable coverage in the aggregate.
29
15 PATENT LITIGATION
15.1 Promptly following the Effective Date, the Parties shall enter
into a joint defense agreement mutually acceptable to both
Parties containing customary terms and conditions for the
purpose of, among other things, preserving confidentiality and
any applicable privilege attaching to information and data
exchanged by the Parties under and pursuant to this Agreement.
15.2 Following execution of such joint defense agreement, Impax,
upon receiving any written request from Teva, shall promptly
provide Teva with reasonable access to information and data
about, and personnel knowledgeable of the Products, their
formulation, use and process of manufacture, to enable Teva
to: (a) ascertain whether the Marketing of the Products in the
Territory would infringe any existing patent or other third
party intellectual property rights; (b) determine its conduct
in relation to any proceedings alleging infringement of a
patent or other third party intellectual property right;
and/or (c) provide witnesses or documentation from Impax in
connection with any proceedings alleging infringement of a
patent or other third party intellectual property right.
Tier 1 Products for the U.S.
15.3 With regard to the Tier 1 Products in the U.S., Impax shall
have the right to assume or continue, as applicable, the
direction and control of any Intellectual Rights Suit and the
defense of claims arising therefrom, including without
limitation, the selection of legal counsel; provided, however,
that once it exercises its right to assume or continue
control, Impax shall obtain the prior written consent of Teva
prior to ceasing to defend, settling or otherwise disposing of
such claim, said consent not to be unreasonably withheld or
delayed. Furthermore, Impax shall provide Teva with copies of
all pleadings and other litigation documents and shall consult
with Teva in connection with litigation strategy. Teva shall
fully cooperate with Impax in the defense or prosecution of
any such litigation (regardless of which party is a named
party to such litigation). Notwithstanding anything to the
contrary contained herein, with respect to any Product(s) that
are currently the subject of litigation, legal counsel
retained by Impax as of the Effective Date shall continue to
prosecute or defend such litigation unless the Parties
mutually agree to replace such legal counsel.
30
15.4 With regard to the Tier 1 Products in the U.S., Impax shall
bear one hundred percent (100%) of all Intellectual Rights
Legal Expenses in connection with the defense and/or arising
out of a judgment or settlement of any Intellectual Rights
Suit; provided, however, that with respect to attorney fees
and associated disbursements Impax shall bear one hundred
percent (100%) of any and all such fees up to a maximum amount
of Seven Million U.S. Dollars (U.S. $7,000,000) for all of the
Tier 1 Products in the U.S. combined, after which, the Parties
shall each bear fifty percent (50%) of such attorney fees and
associated disbursements. If the foregoing $7,000,000
limitation is exceeded then Impax shall invoice Teva on a
monthly basis and Teva shall reimburse Impax for Teva's share
of such attorney fees and associated disbursements within
thirty (30) days of receipt of such invoice.
Tier 2 and Tier 3 Products for the Territory
15.5 With regard to the Tier 2 and Tier 3 Products in the
Territory, Teva shall have the right to assume direction and
control of any Intellectual Rights Suit and the defense of
claims arising there from, including without limitation,
subject to the consent of Impax, not to be unreasonably
withheld, the selection of legal counsel; provided, however,
that once it exercises its right to assume control, Teva shall
obtain the prior written consent of Impax prior to ceasing to
defend, settling or otherwise disposing of such claim, said
consent not to be unreasonably withheld or delayed.
Furthermore, Teva shall provide Impax with copies of all
pleadings and other litigation documents and shall consult
with Impax in connection with litigation strategy. Impax shall
fully cooperate with Teva in the defense or prosecution of any
such patent litigation (regardless of which Party is a named
party to that litigation).
15.6 Teva and Impax shall share equally all Intellectual Rights
Legal Expenses for the Tier 2 Products and Tier 3 Products for
the Territory incurred following the Effective Date; provided,
however, with regard to the Tier 2 Products for the U.S.,
Impax shall bear fifty-five percent (55%) and Teva shall bear
forty-five percent (45%) of all Intellectual Rights Legal
Expenses. Teva shall invoice Impax on a monthly basis and
Impax shall reimburse Teva for Impax's share of such
Intellectual Rights Legal Expenses within thirty (30) days of
receipt of such invoice.
15.7 With regard to any of the Products, the provisions set forth
in Sections 15.4, 15.5 and 15.6, above, relating to
Intellectual Rights Legal Expenses (for the U.S. and all other
countries in the Territory), shall not apply with respect to
litigation relating to any breach by Impax of its
representations and warranties set forth in Section 12.1.6 or
12.1.7 of this Agreement. In such instance, and to the extent
related thereto, Impax shall be responsible for one hundred
percent (100%) of all Intellectual Rights Legal Expenses.
31
15.8 With regard to any of the Products, each Party shall obtain
the prior written consent of the other Party prior to ceasing
to defend, settling or otherwise disposing of any Intellectual
Rights Suit or other intellectual property dispute related to
the Products. Each Party further agrees that it will not
whether in the context of litigation or otherwise related
thereto, without the prior written consent of the other Party,
enter into any agreement or arrangement with any third party
which in any way compromises, relinquishes, waives, or
otherwise affects, in whole or in part, the rights of the
other Party under this Agreement in respect of the Products.
16 REGULATORY LITIGATION
If Teva and Impax mutually agree in writing to commence legal
proceedings against any Regulatory Authority, including without
limitation, the FDA, in connection with the Product(s) in order to
accelerate the Approval and/or Launch Date of the Product(s), the
Parties shall each bear fifty percent (50%) of all out of pocket costs
and expenses incurred by either Party in connection with that
litigation including, without limitation, legal fees and disbursements.
Impax and Teva shall cooperate with one another (regardless of which
Party is a named party to that litigation) and shall jointly direct and
control the litigation, including without limitation, selection of
legal counsel, decisions to settle or compromise the case or a
position, and taking any other action.
17 DECLARATORY JUDGMENT LITIGATION
If Teva and Impax mutually agree in writing to institute a declaratory
judgment action with respect to any intellectual property rights of any
third party relating to the Products, the provisions set forth in
Section 16 shall apply mutatis mutandis to this Section 17.
18 ADVERSE REACTIONS, COMPLAINTS AND RECALLS
18.1 Each Party shall provide prompt notice to the other Party of
any information concerning side effects, injury, toxicity, or
sensitivity reaction associated with the Products, whether or
not determined to be attributable to the Products. Further,
each Party shall notify the other Party in writing within one
(1) business day of the time such Party first becomes aware of
a circumstance that might necessitate expedited notification
of relevant Regulatory Authorities or significant change in
the labeling of the Product(s). The holder of the Approval
shall be responsible for all adverse drug event reporting for
the applicable countries of the Territory for the Products and
responding to all adverse drug event reports received from lay
persons and/or health care professionals respecting the
Products.
32
18.2 Copies of complaints with regard to the Products received by
either Party will be sent promptly by facsimile to the other
Party. Impax shall investigate all complaints associated with
the manufacturing of the Products and shall provide a written
summary to Teva of all such investigations and a prompt
written response to the complainant, with a copy to Teva.
18.3 To the extent permitted or required by law, any decision to
recall, withdraw or cease distribution of any Product as a
result of a violation of the applicable Approval or any
Applicable Law, or because the Product presents a possible
safety risk may be made by either Party after consulting with
the other Party and taking such reasonable action as the
Parties consider to be appropriate under the circumstances to
minimize the risk to both Parties and to assure compliance by
the Parties with the requirements of the applicable Approval.
Any such recall or market withdrawal shall be controlled by
Teva; provided, however, that the Parties shall use their best
efforts to work together to repossess the affected Product. If
any recall or market withdrawal of any Product is the result
of the negligence of either Party (or its Affiliate) or the
breach by either Party (of its Affiliate) of any
representation, warranty, covenant or agreement under this
Agreement by that Party (or its Affiliate), including the
Product warranties, then the negligent or breaching Party
shall pay the costs of any such recall action and such costs
shall not be charged to the other Party. If any such recall or
market withdrawal of any Product is not the result of
negligence of either Party (or its Affiliate) or the breach by
either Party (or its Affiliate) of any representation,
warranty, covenant or agreement under this Agreement, then the
Parties shall equally share the out of pocket cost of any such
recall or market withdrawal. For the purposes of this Section
18.3, expenses of recall shall include, without limitation,
the expenses of notification and destruction or return of the
recalled Product(s) and the refund to consumers of amounts
paid for the recalled Product(s).
19 AUDITS
19.1 Teva or its Affiliates shall have the right, at its own cost,
to visit any manufacturing site at which any of the Products
or API are being manufactured and/or stored, during regular
business hours and upon not less than three (3) business days
prior written notice to Impax. During any such visit, Teva or
its Affiliates shall have the right: (a) to inspect the
manufacturing, packaging, testing, quality control, transport
and/or storage facilities for such Products or API; (b) to
inspect the procedures relating to any of the activities
referred to in subsection (a) above; and/or (c) to audit any
books, records and reports pertinent to the activities
referred to in subsection (a) above to ensure compliance with
all Applicable Laws, including without limitation, compliance
with cGMP, ANDAs, and other Approvals.
19.2 Impax or its Affiliates shall have the right, at its own cost,
to visit any manufacturing site at which any of the Products
or API are being manufactured and/or stored, during regular
business hours and upon not less than three (3) business days
prior written notice to such manufacturer and Teva. During any
such visit, Impax or its Affiliates shall have the right: (a)
to inspect the manufacturing, packaging, testing, quality
control, transport and/or storage facilities for such Products
or API; (b) to inspect the procedures relating to any of the
activities referred to in subsection (a) above; and/or (c) to
audit any books, records and reports pertinent to the
activities referred to in subsection (a) above to ensure
compliance with all Applicable Laws, including without
limitation, compliance with cGMP, ANDAs, and other Approvals.
33
19.3 Each Party shall promptly supply the other Party with a copy
of any notices or reports received from any Regulatory
Authority related to an audit or other investigation by the
Regulatory Authority with respect to the API and/or Products.
Each Party shall use its commercially reasonable best efforts
to provide such Regulatory Authority with a prompt, accurate
and complete response to any deficiencies noted, and to
promptly address, and if necessary correct, any and all such
deficiencies to the satisfaction of the Regulatory Authority.
20 CONFIDENTIALITY
20.1 Each of the Parties agrees that: (a) it will not disclose any
Confidential Information of the other to any third party at
any time during the Term without the prior written consent of
the disclosing Party; (b) it will not make use of any
Confidential Information of the other Party for any purpose
other than for the purposes set forth in, or in furtherance of
the transactions contemplated by this Agreement; and/or (c) it
will use all reasonable efforts to prevent unauthorized
publication or disclosure by any person of such Confidential
Information including requiring its employees, consultants or
agents to enter into similar confidentiality agreements in
relation to such Confidential Information.
20.2 Notwithstanding the foregoing, either Party shall be permitted
upon reasonable prior written notice to the other Party to
disclose Confidential Information if required by law or court
order.
20.3 All Confidential Information in any form will be returned to
the Party who disclosed the Confidential Information within
thirty (30) days of the termination or expiration of this
Agreement, save for the retention of one (1) copy of the
Confidential Information by the receiving Party as a record of
the receiving Party's ongoing confidentiality obligations
under this Agreement.
34
20.4 Neither Party shall use the name of the other Party in any
publicity or advertising nor, except as required by law or
court order, publicly disclose information related to this
Agreement or the terms and conditions hereof without the prior
written consent of the other Party.
20.5 Each of the Parties agrees that all Confidential Information
that it receives from the other Party and/or its Affiliates in
connection with the Products is the sole property of the
disclosing Party and shall be used by it only in accordance
with the terms and provisions of this Agreement.
20.6 This Section 20 shall be in effect during the Term and for a
period of five (5) years following the termination or
expiration thereof.
20.7 The Parties acknowledge that it is their intention to limit
the disclosure of Confidential Information hereunder to the
Products and matters directly related thereto.
21 TERM AND TERMINATION
21.1 Any Supply Term shall be extended for successive terms of two
(2) years unless either Teva or Impax provides the other with
written notice of its intention not to extend that Supply Term
at least twelve (12) months before the expiration of such
initial Supply Term or any extension thereof.
21.2 Subject to Sections 21.2.1 and 21.2.2, this Agreement may be
terminated by either Party by written notice provided to the
other Party at any time during the Term if the other Party
(the "Breaching Party") is in material breach or default of
any of its obligations hereunder (including, without
limitation, any payment obligations) or any of its
representations or warranties hereunder were untrue in a
material respect when made, as follows: (i) the terminating
Party shall send written notice of the material breach or
material default to the Breaching Party, and (ii) the
termination shall become effective sixty (60) days after
written notice thereof was provided to the Breaching Party,
unless the Breaching Party has cured any such material breach
or default prior to the expiration of the sixty (60) day
period or if such material breach or material default is not
capable of being cured within such sixty (60) day period, and
the Breaching Party has commenced activities reasonably
expected to cure such material breach or material default
within such sixty (60) day period and thereafter uses diligent
efforts to complete the cure as soon as practicable, but in no
event shall such period exceed ninety (90) days.
35
21.2.1 Teva's right to terminate in the event of Impax's
failure to supply Teva's or its Affiliates'
requirements for Products hereunder shall be on a
Product-by-Product basis for each of the relevant
countries of the Territory.
21.2.2 The failure of Impax to supply Teva's or its
Affiliates' requirements for Products hereunder
shall not give rise to a right of termination by
Teva if following such failure, Teva, its Affiliate
or a third party designated by Teva manufactures
the Product pursuant to the provisions of Section
7.5 hereof.
21.3 Subject to the provisions of Section 22.3 hereof, either Party
may terminate this Agreement effective upon issuance of
written notice if, at any time, the other Party files a
petition in bankruptcy, or enters into an arrangement with its
creditors, or applies for or consents to the appointment of a
receiver or trustee, or makes an assignment for the benefit of
creditors, or suffers or permits the entry of an order
adjudicating it to be bankrupt or insolvent.
21.4 In addition to the other provisions of this Xxxxxxx 00, Xxxx
shall be entitled to terminate this Agreement with respect to
any Tier 2 Product in the U.S. by providing written notice to
Impax by no later than the earlier of (i) twelve (12) months
following the Effective Date, or (ii) fifteen (15) days after
acceptance by the FDA of the ANDA for the applicable Tier 2
Product(s). Upon such termination the grant hereunder to Teva
to Market such Tier 2 Products in the U.S. shall revert to
Impax and, except as provided in this Section 21.4, Teva's
obligations hereunder with regard to such Tier 2 Products
shall terminate. To the extent applicable, Teva shall indicate
in its notice if it intends to commercialize a Competing
Product to the subject Tier 2 Product that it internally
developed (as distinguished from a "Transaction Event"). Upon
receipt of Teva's written notice, Impax shall have sixty (60)
days to elect to, if applicable (as a result of Teva setting
forth in its notice its intention to commercialize a Competing
Product), to participate in Teva's commercialization of such
Competing Product(s), in the U.S., in which case, such
Competing Product(s) shall be deemed to be the corresponding
Tier 2 Product terminated by Teva for purposes of this
Agreement. In the event Impax elects to participate in Teva's
commercialization of the Competing Product, Teva shall
manufacture the applicable Competing Product, carry out all
regulatory and legal activities and Impax shall reimburse Teva
twenty-five percent (25%) for all past and future Regulatory
Expenses and Intellectual Rights Legal Expenses incurred by
Teva and/or its Affiliates for such Competing Product(s), and
the Impax Margin for such Competing Product(s) payable to
Impax shall be deemed to be twenty-five percent (25%) of
Profit. Within sixty (60) days following launch of the
applicable terminated Tier 2 Product(s) by Impax or Impax's
Affiliate, nominee, assignee, licensee or other similar
entity, Impax shall reimburse Teva an amount equal to all
Regulatory Expenses and Intellectual Rights Legal Expenses
paid by Teva under this Agreement with respect to the
applicable Tier 2 Product(s).
36
21.5 Teva shall be entitled to terminate this Agreement, upon
thirty (30) days notice to Impax, in the event of an Event of
Default (as set forth in Section 10.7).
21.6 In the event that there is no launch of any of the Products in
any of the countries in the Territory by July 15, 2004, Teva
shall have the right, at its option, to terminate this
Agreement on ten (10) days notice.
22 CONSEQUENCES OF TERMINATION
22.1 Termination of this Agreement for whatever reason shall not
affect the liabilities or obligations of the Parties hereunder
in respect of matters accrued at the time of such termination,
and shall be without prejudice to any other right or remedies
available at law or in equity. (Impax acknowledges and agrees,
however, that notwithstanding the immediately preceding
sentence it shall not have any other rights or remedies
against Teva in the event of a termination pursuant to Section
21.4, 21.5, or 21.6).
22.2 In the event of early termination of this Agreement by Teva
pursuant to Section 21.3 or 21.5, and without derogating from
any other rights or remedies available to Teva, Impax shall,
at the election of Teva exercised within thirty (30) days of
Teva's notice to Impax of termination, promptly and free of
charge:
22.2.1 transfer to Teva or a Teva designee all
information, data and know-how in its possession or
control necessary for the manufacture of the API
and Products;
22.2.2 grant and/or transfer to Teva the right of access
or use of all Regulatory Documentation and
Approvals in its possession or control for the
Products to enable Teva to manufacture and/or
Market the Products in the Territory; and
22.2.3 use its best efforts to assist Teva to assure that
such transfers as set forth in this Section 22.2
are effected as effectively and expeditiously as
possible.
37
22.3 In the event this Agreement is terminated under Section 21.3,
all rights and licenses granted pursuant to this Agreement
are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of 11 U.S.C. ss.101 et seq. (the "Bankruptcy
Code"), licenses of rights to "intellectual property" as
defined under Section 101(35A) of the Bankruptcy Code. The
Parties agree that Teva, as a licensee of such rights under
this Agreement, shall retain and may fully exercise all of its
rights (including, without limitation, any right to enforce
any exclusivity provision of this Agreement (including any
embodiment of such "intellectual property")), remedies and
elections under the Bankruptcy Code. To the fullest extent
permitted by Applicable Law, the Parties further agree that,
in the event of the commencement of a bankruptcy proceeding by
or against Impax under the Bankruptcy Code, Teva shall be
entitled to all applicable rights under Section 365 of the
Bankruptcy Code, including but not limited to, a complete
duplicate of (or complete access to, as appropriate) any such
intellectual property and all embodiments of such intellectual
property upon written request therefore by Teva, and such, if
not already in its possession, shall be promptly delivered to
Teva.
23 INDEPENDENT CONTRACTORS
The status of the Parties under this Agreement shall be that of
independent contractors. Nothing is this Agreement shall be construed
as establishing a partnership or joint venture relationship between the
Parties hereto. No Party shall have the right to enter into any
agreements on behalf of the other Party, nor shall it represent to any
person that it has any such right or authority. 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.
24 SUCCESSORS AND ASSIGNS
The terms and provisions hereof shall inure to the benefit of, and be
binding upon, Teva, Impax and their respective successors and permitted
assigns. Neither Party shall assign this Agreement or any part of it to
any third party without the prior written consent of the other Party;
provided, however, that Teva may, without obtaining the consent of
Impax, assign this Agreement or delegate any of its rights or
obligations hereunder to any of its Affiliates, provided that Teva
agrees to remain primarily liable for the full and timely performance
by such Affiliate of all its obligations hereunder.
25 FORCE MAJEURE
25.1 Neither Party shall be liable for non-performance or delay in
the fulfillment of its obligations with the exception of
payment obligations and those obligations respecting the
timely achievement of the applicable milestones, when any such
non-performance or delay shall be occasioned by any
unforeseeable cause beyond the reasonable control of Teva or
Impax, as the case may be, including without limitation, acts
of God, fire, flood, earthquakes, explosions, sabotage,
strikes, or labor disturbances (regardless of the
reasonableness of the demands of the labor force), civil
commotion, riots, military invasions, wars, failure of
utilities, failure of carriers, or any acts, restraints,
requisitions, regulations, or directives issued by a competent
government authority ("Force Majeure Events").
38
25.2 In the event that either Party is prevented from discharging
its obligations under this Agreement on account of a Force
Majeure Event, such Party shall notify the other forthwith,
and shall nevertheless make every endeavor, in the utmost good
faith, to discharge its said obligations, even if in a partial
or compromised manner.
26 CURRENCY
All payments under this Agreement shall be made in U.S. Dollars and, as
applicable, the calculation of exchange rates shall be based upon the
average over a twenty (20) business day period preceding the date that
payment is due of the applicable rate of exchange as published in the
Wall Street Journal.
27 PUBLICITY AND DISCLOSURE OF AGREEMENT
Concurrently with the execution of this Agreement, the Parties shall
agree in good faith on a form of press release which Impax may release.
The Parties agree that until February 1, 2002, no future publicity
release or announcement concerning the transactions contemplated hereby
shall be issued without the advance written consent of the other Party,
which consent shall not be unreasonably withheld, to the extent such
release or announcement includes statements concerning terms of this
Agreement and/or explicitly includes the Products or either Parties'
name(s), except to the extent such release or announcement may be
required by Applicable Law. For releases or announcements required by
law, the Party making the release or announcement shall, before making
any such release or announcement, afford the other Party a reasonable
opportunity to review and comment. Any copy of this Agreement to be
filed with the Securities and Exchange Commission or any other
Regulatory Authority shall be redacted to the fullest extent permitted
by Applicable Law and to the reasonable satisfaction of both Parties;
provided, however, in the event that the Securities and Exchange
Commission or Regulatory Authority, as applicable, objects to the
redaction of any portion of the Agreement after the initial submission,
the filing Party shall inform the other Party of the objections and
shall in good faith respond to the objections in an effort to limit the
disclosure required by the Securities and Exchange Commission or
Regulatory Authority, as applicable.
28 SEVERABILITY
Should any part or provision of this Agreement be held unenforceable or
in conflict with applicable law, the invalid or unenforceable part or
provision shall, provided that it does not go to the essence of this
Agreement, be replaced with a revision which accomplishes, to the
extent possible, the original commercial purpose of such part or
provision in a valid and enforceable manner, and the balance of this
Agreement shall remain in full force and effect and binding upon the
Parties hereto.
39
29 ENTIRE AGREEMENT
This Agreement (including its Annexes), together with the Note, the
Stock Purchase Agreement and Registration Rights Agreement constitutes
the entire agreement between the Parties with respect to its subject
matter and supersedes all prior agreements, arrangements, dealings or
writings between the Parties. This Agreement may not be amended or
modified except in writing executed by the duly authorized
representatives of both Parties.
30 WAIVER
No waiver of a breach or default hereunder shall be considered valid
unless in writing and signed by the Party giving such waiver, and no
such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
31 GOVERNING LAW
This Agreement shall be governed, interpreted and construed in
accordance with the laws of the Commonwealth of Pennsylvania, without
regard to principles of conflicts of law. Subject to Section 32, each
of the Parties hereby irrevocably submits to the exclusive jurisdiction
of the Commonwealth of Pennsylvania or United States Federal Court
sitting in the City of Philadelphia and Commonwealth of Pennsylvania
over any action or proceeding arising out of or relating to this
Agreement, and each hereby waives the defense of any inconvenient forum
for the maintenance of such action or proceeding. To the extent that it
may otherwise be applicable, the Parties hereby expressly agree to
exclude from the operation of this Agreement the United Nations
Convention on Contracts for the International Sale of Goods, concluded
at Vienna, on 11 April 1980, as amended and as may be amended further
from time to time.
32 WORKING COMMITTEE AND SECTION 2.8 DISPUTE RESOLUTION
Any and all disputes within the Working Committee as well as pursuant
to Section 2.8 shall be submitted to a panel of three (3) arbitrators
having expertise in the specific area that is the subject of dispute.
Teva and Impax shall each select one arbitrator. The arbitrators
selected by Teva and Impax shall select the third arbitrator. All
arbitrators shall be selected within twenty (20) days. Any arbitration
shall be held in Philadelphia, Pennsylvania at such place as may be
agreed upon by the Parties. The arbitrators shall have sole discretion
with regard to the admissibility of any evidence and all other matters
relating to the conduct of the arbitration and the arbitration shall be
conducted in accordance with the American Arbitration Association. The
arbitrators shall in rendering their decision, apply the substantive
laws of the Commonwealth of Pennsylvania (regardless of its or any
other jurisdiction's choice of law principles). The decision of the
arbitrators shall be final and not appealable, except in the case of
fraud or bad faith on the part of the arbitrators or any Party to the
arbitration proceeding in connection with the conduct of such
proceedings. The arbitrators shall determine the proportion in which
the Parties shall pay the costs and fees of the arbitration, and each
Party shall pay its own costs (including, without limitation,
reasonable attorney's fees) and expenses in connection with such
arbitration. The arbitration proceeding shall be confidential and,
except as required by Applicable Law, neither Party shall make (or
instruct the arbitrators to make) any public announcement with respect
to the proceedings or decision of the arbitrator without prior written
consent of the other Party. The existence of any dispute submitted for
arbitration, and the award of the arbitrator, shall be kept in
confidence by the Parties and the arbitrators, except as required in
connection with the enforcement of such award or as otherwise required
by Applicable Law.
40
33 NOTICES
Notices provided for under this Agreement shall be given in writing, in
English, by facsimile; by first-class mail, federal express or similar
service to the mailing address or facsimile numbers set out below:
If to Teva: TEVA PHARMACEUTICALS CURACAO N.V.
World Trade Center Curacao, Xxxx X.X.X. 00
Xxxxxxxxx Xxx, Xxxxxxx
Xxxxxxxxxxx Antilles
Attention: General Manager
Telephone: 000-0-000-0000
Facsimile: 599-9-463-6588
With a copy to: TEVA PHARMACEUTICALS USA, INC.
0000 Xxxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxxxxx 00000
Attention: Vice President and General Counsel
Teva North America
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Impax: IMPAX LABORATORIES, INC.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
41
With a copy to: IMPAX LABORATORIES, INC.
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxx, President and COO
Telephone (000) 000-0000
Facsimile: (000) 000-0000
or to such other addresses or facsimile numbers as a Party shall
designate by notice, similarly given, to the other Party. Notices shall
be deemed to have been sufficiently given and served the day
transmitted by facsimile (with confirmed transmission) or a date five
(5) business days after the date of express mail or by mail courier.
IN WITNESS WHEREOF, each of the Parties has executed this Agreement and Annexes
as of the date below.
TEVA PHARMACEUTICALS CURACAO N.V. IMPAX LABORATORIES, INC.
Signature: Signature:
----------------------- ------------------------
Name: Name:
---------------------------- ------------------------------
Title: Title:
--------------------------- ----------------------------
Date: Date:
---------------------------- ------------------------------
Signature: Signature:
----------------------- ------------------------
Name: Name:
---------------------------- ------------------------------
Title: Title:
--------------------------- ----------------------------
Date: Date:
---------------------------- ------------------------------
42
ANNEX A
The Products
---------------------------------------------------------------------------------------------------------------
BRAND* GENERIC STRENGTH
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Tier 1 Products + + +
---------------------------------------------------------------------------------------------------------------
+ + +
---------------------------------------------------------------------------------------------------------------
+ + +
---------------------------------------------------------------------------------------------------------------
+ + +
---------------------------------------------------------------------------------------------------------------
+ + +
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------
Tier 2 Products + + +
---------------------------------------------------------------------------------------------------------------
+ + +
---------------------------------------------------------------------------------------------------------------
+ + +
---------------------------------------------------------------------------------------------------------------
Tier 3 Products Three additional Products
to be determined by the
Parties as provided
herein.
---------------------------------------------------------------------------------------------------------------
--------
* including, without limitation, any additional brands.
+ Confidential portions omitted and filed separately with the Commission.
43
ANNEX B
Tier 1 Products and Optional Products: Manufacturing Caps
Optional Optional Optional + + + + +
Product Product Product + + + + +
10mg 20 mg 40mg + + +
Bottle + + + + + + + +
Size
$ $ $ $ $ $ $ $
Labor,OH
& QC cost + + + + + + + +
Pkg. Mat'l + + + + + + + +
Total Cost + + + + + + + +
Bottle + + + + + + + +
Size
$ $ $ $ $ $ $ $
Labor,OH
& Qc cost + + + + + + + +
Pkg. Mat'l + + + + + + + +
Total Cost + + + + + + + +
--------
+ Confidential portions omitted and filed separately with the Commission.
44
Annex C
Milestones (If Teva exercises the option for the
Optional Products pursuant to Section 4)
---------------------------------------------------------- --------------------------
Milestone Event Amount Forgiven (US$)**
---------------------------------------------------------- --------------------------
1. *Tentative Approval for all of the Optional $+
Products, (+mg, + mg, and + mg) in the U.S. by no
later than+.
---------------------------------------------------------- --------------------------
2. *Launch Date for all of the Optional Products, (+ mg,
+ mg, and + mg) in the U.S within fifteen (15) days
from the expiration of First to File Exclusivity, but
in no event later than+.
---------------------------------------------------------- --------------------------
3. Launch Date for + in the U.S. no later than +. +
---------------------------------------------------------- --------------------------
4. Launch Date for all of + mg and + Tablets in the +
U.S. within fifteen (15) days from the expiration
of First to File Exclusivity, but in no event later
than +.
---------------------------------------------------------- --------------------------
5. Tentative Approval for all of + mg and + mg in the +
U.S. by no later than +, provided that the facility
in which Impax will manufacture such Product has
been approved by the FDA for commercial launch.
---------------------------------------------------------- --------------------------
6. Launch Date for all of + mg, and + mg in the U.S. +
within fifteen (15) days from the expiration of
First to File Exclusivity, but in no event later
than +.
---------------------------------------------------------- --------------------------
* If Impax fails to meet the Tentative Approval condition but subsequently meets
the Launch Date condition, the $+ shall nevertheless be forgiven.
** For the sake of clarification, the applicable milestone shall be achieved
only if the tentative Approval and/or Launch Date is for the prescription drug
marketplace only.
--------
+ Confidential portions omitted and filed separately with the Commission.
45
Annex D
Milestones (If Teva does not exercise the option for the
Optional Products pursuant to Section 4)
---------------------------------------------------------- ----------------------------
Milestone Event Amount Forgiven (US$)*
---------------------------------------------------------- ----------------------------
1. Launch Date for + in the U.S. no later than +. +
---------------------------------------------------------- ----------------------------
2. Launch Date for all of + mg and + in the U.S. +
within fifteen (15) days from the expiration of
First to File Exclusivity, but in no event later
than +.
---------------------------------------------------------- ----------------------------
3. Tentative Approval for all of + mg and + mg in the +
U.S. by no later than+, provided that the facility
in which Impax will manufacture such Product has
been approved by the FDA for commercial launch.
---------------------------------------------------------- ----------------------------
4. Launch Date for all of + mg, and + mg in the U.S. +
within fifteen (15) days from the expiration of
First to File Exclusivity, but in no event later
than +.
---------------------------------------------------------- ----------------------------
* For the sake of clarification, the applicable milestone shall be achieved only
if the tentative Approval and/or Launch Date is for the prescription drug
marketplace only.
--------
+ Confidential portions omitted and filed separately with the Commission.
46
Annex E
Stock Purchase Agreement and Registration Rights Agreement
47
Annex F
EU Countries*
Austria Luxembourg
Belgium Netherlands
Denmark Portugal
Finland Spain
France Sweden
Germany Switzerland
Greece United Kingdom
Ireland
Italy
* Plus any other country added to the European Union during the Term. Teva shall
have the option in the manner provided by Section 3.1 for twelve (12) months
from such date of inclusion to include any such country to the Territory.
48
Annex G
Optional Products
-------------------- ---------------------- ----------------------
Brand * Generic Strengths
-------------------- ---------------------- ----------------------
-------------------- ---------------------- ----------------------
+ + +
-------------------- ---------------------- ----------------------
*including, without limitation, any additional brand.
--------
+ Confidential portions omitted and filed separately with the Commission.
49
Annex H
The Note pursuant to Section 10.1
50
