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Exhibit 10.24
DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
by and between
CIMA LABS INC.
and
XXXXXXX PHARMA, INC.
dated as of June 30, 2000
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TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS 2
SECTION 2 GRANT OF LICENSES; LICENSE OPTION 6
2.1 Grant of Licenses.......................................................................................6
2.2 Sublicenses.............................................................................................7
2.3 Marketing, Distribution and Sale........................................................................7
2.4 Additional Development Option...........................................................................7
2.5 Minimum Annual Net Sales................................................................................8
SECTION 3 PRODUCT DEVELOPMENT ..............................................................................8
3.1 Obligations of CIMA.....................................................................................8
3.2 Obligations of Schwarz..................................................................................8
3.3 License of Xxxxxxx Technology...........................................................................8
3.4 Regulatory Matters......................................................................................8
SECTION 4 ROYALTY, COST OF GOODS AND MILESTONE PAYMENTS ....................................................9
4.1 Royalty and Milestone Payments..........................................................................9
4.2 Records and Audit.......................................................................................9
4.3 Quarterly Reports of Royalties.........................................................................10
SECTION 5 SUPPLY OF PRODUCT ...............................................................................10
5.1 Supply of Product......................................................................................10
5.2 Identification.........................................................................................11
5.3 Trade, Sample and Placebo Product Price................................................................12
5.4 Forecasts, Delivery and Quality........................................................................12
5.5 Rejection and Replacement..............................................................................12
5.6 Invoice and Payment....................................................................................13
5.7 Supply Disruption; Alternate Manufacturing Site........................................................13
SECTION 6 CONDITIONS PRECEDENT TO THE CLOSING; CLOSING DATE ...............................................13
6.1 Conditions Precedent to Xxxxxxx?s Obligations..........................................................13
6.2 Conditions Precedent to CIMA?s Obligations.............................................................14
6.3 Closing Date...........................................................................................15
SECTION 7 REPRESENTATIONS AND WARRANTIES OF CIMA ..........................................................15
7.1 Organization, Power and Authority......................................................................16
7.2 Due Authority; No Breach...............................................................................16
7.3 Intellectual Property..................................................................................16
7.4 Technology Rights......................................................................................17
7.5 Litigation.............................................................................................17
7.6 Governmental Approval..................................................................................17
7.7 Brokerage..............................................................................................17
SECTION 8 REPRESENTATIONS AND WARRANTIES OF XXXXXXX .......................................................17
8.1 Organization, Power and Authority......................................................................17
8.2 Due Authority; No Breach...............................................................................18
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8.3 Brokerage...............................................................................................18
8.4 Litigation..............................................................................................18
8.5 Governmental Approval...................................................................................19
SECTION 9 ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES 19
9.1 Governmental Filings....................................................................................19
9.2 Compliance with Law.....................................................................................19
9.3 Recall..................................................................................................19
9.4 Confidentiality.........................................................................................20
9.5 Expenses................................................................................................21
9.6 Reasonable Efforts......................................................................................21
9.7 Publicity...............................................................................................21
9.8 Cooperation.............................................................................................21
9.9 Competition; No Sale for Resale.........................................................................21
9.10 Conflicting Rights......................................................................................22
9.11 Patent and Trademark Maintenance........................................................................22
9.12 Infringement; Enforcement of Proprietary Rights.........................................................24
9.13 Supply of Product.......................................................................................24
9.14 Liability Insurance.....................................................................................24
9.15 Referral of Orders and Inquiries........................................................................25
9.16 Deemed Breach of Covenant...............................................................................25
SECTION 10 INDEMNIFICATION 25
10.1 Indemnification.........................................................................................25
10.2 Notice and Opportunity To Defend........................................................................26
10.3 Indemnification Payment Obligation......................................................................27
10.4 Indemnification Payment Adjustments.....................................................................27
10.5 Indemnification Payment.................................................................................27
10.6 Survival................................................................................................27
SECTION 11 TERMINATION 28
11.1 Termination............................................................................................28
SECTION 12 MISCELLANEOUS 29
12.1 Successors and Assigns..................................................................................29
12.2 Notices.................................................................................................29
12.3 Waiver; Remedies........................................................................................30
12.4 Survival of Representations.............................................................................30
12.5 Independent Contractors.................................................................................30
12.6 Entire Agreement........................................................................................30
12.7 Amendment...............................................................................................30
12.8 Counterparts............................................................................................30
12.9 Governing Law...........................................................................................31
12.10 Arbitration.............................................................................................31
12.11 Captions................................................................................................31
12.12 No Third-Party Rights...................................................................................31
12.13 Severability............................................................................................31
12.14 Attachments.............................................................................................31
12.15 Force Majeure...........................................................................................31
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SCHEDULES
Schedule 2.4 [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] Extended Release Term Sheet
Schedule 2.5 Minimum Annual Net Sales Targets
Schedule 3.1 Development Schedule
Schedule 4.1(a) Royalty Rates
Schedule 4.1(b) Milestone Payments
Schedule 5.1(b) Xxxxxxx Purchase Order
Schedule 5.3 Cost of Goods
Schedule 5.4(d) Quality Assurance Addendum
Schedule 9.9(a) Competitive Products
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DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
This DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT ("this Agreement"),
dated as of June 30, 2000, is by and between CIMA LABS INC., a Delaware
corporation ("CIMA"), and XXXXXXX PHARMA, INC., a Delaware corporation
("Xxxxxxx").
W I T N E S S E T H
WHEREAS, CIMA is engaged, among other things, in the business of
research, development, manufacturing and commercialization of pharmaceutical
products through its proprietary drug delivery technologies;
WHEREAS, Xxxxxxx is engaged, among other things, in the business of
marketing and selling of pharmaceutical products;
WHEREAS, subject to the terms and conditions set forth in this
Agreement, CIMA and Xxxxxxx wish to collaborate in the development,
registration, marketing and sale of a certain prescription product; and
WHEREAS, subject to the terms and conditions set forth in this
Agreement, CIMA wishes to license to Xxxxxxx and Xxxxxxx wishes to license from
CIMA rights to CIMA's DuraSolv(R) technology for use with such prescription
product.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
SECTION 1
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Activities" shall mean the development, manufacturing, marketing,
selling and distributing of the Product in the Territory as contemplated by this
Agreement.
"Affiliates" shall mean, with respect to any Person, any Persons
directly or indirectly controlling, controlled by, or under common control with,
such other Person. For purposes hereof, the term controlled" (including the
terms "controlled by" and "under common control with"), as used with respect to
any Person, shall mean the direct or indirect ability or power to direct or
cause the direction of management policies of such Person or otherwise direct
the affairs of such Person, whether through ownership of voting securities or
otherwise.
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"Annual Net Sales" shall mean, for any Year, the Net Sales for such
Year.
"API" shall mean the active ingredient [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***].
"cGMP" shall mean current Good Manufacturing Practices, as determined
by the FDA from time to time.
"CIMA" shall have the meaning given in the preamble and shall include
its Affiliates.
"CIMA Intellectual Property" shall mean, collectively, (1) the CIMA
Patents, (2) the CIMA Technology, (3) the CIMA Trademarks, and (4) the CIMA
Marketing Materials.
"CIMA Marketing and Market Research Data" shall mean, with respect to
the Product, all CIMA marketing data, studies, market research data and reports
that pertain to the Product, and any further market research data whose
disclosure to Xxxxxxx is not prohibited by confidentiality obligations under
agreements, dated prior to the date hereof, between CIMA and Persons who are not
Affiliates of CIMA.
"CIMA Marketing Materials" shall mean all labeling, marketing and
promotional materials and inserts currently used by CIMA that are useful in
connection with the Activities.
"CIMA Patents" shall mean United States patent no. 6024981 (Rapidly
Dissolving Robust Dosage Form) and any patents and patent applications resulting
therefrom, including any extension, reissue, renewal, reexamination or
continuation-in-part of such patent or patent application.
"CIMA Technology" shall mean all of CIMA's Patents, trade secrets,
technology, know-how and all other information necessary for the manufacture of
the Product including, without limitation, that related to CIMA's DuraSolv(R)
technology.
"CIMA Trademarks" shall mean the CIMA(R), DuraSolv(R) and Meltabs(R)
trademarks.
"Closing Date" shall have the meaning given in Section 6.3 hereof.
"Damages" shall mean any and all actions, costs, losses, lost profits,
claims, liabilities, fines, penalties, demands, damages and expenses, court
costs, and reasonable fees and disbursements of counsel, consultants and expert
witnesses incurred by a party hereto (including interest which may be imposed in
connection therewith).
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"Defective" shall mean, as to the Product, the failure of such to
strictly conform to the Specifications, this Agreement and all applicable law,
including, without limitation, PDMA.
"Development Schedule" shall mean the schedule of development
activities set forth on Schedule 3.1 hereto.
"FDA" shall mean the United States Food and Drug Administration.
"Force Majeure" shall mean acts of God, explosion, fire, flood,
tornadoes, thunderstorms, earthquake or tremor, war whether declared or not,
civil strife, riots, embargo, losses or shortages of power, labor stoppage,
substance shortages, damage to or loss or product in transit, currency
restrictions, or events caused by reason of laws, regulations or orders by any
government, governmental agency or instrumentality or by an other supervening or
unforeseeable circumstances reasonably beyond the control of each party.
"GAAP" shall mean generally accepted accounting practices in the United
States as in effect from time to time.
"Indemnified Party" shall have the meaning given in Section 10.2
hereof.
"Indemnifying Party" shall have the meaning given in Section 10.2
hereof.
"Launch" shall mean the date when the Product is first made
commercially available by Xxxxxxx.
"[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]" shall mean a pharmaceutical
product containing [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], either alone or in
combination with other pharmaceutical active ingredients.
"[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] Extended Release"
shall mean a pharmaceutical product containing [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] of the active ingredient [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] in an extended release dosage form consisting of a
fast-dissolving tablet using the CIMA Technology.
"Licensed Assets" shall have the meaning set forth in Section 2.1
hereof.
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"Net Sales" shall mean, with respect to the Product, the gross amount
invoiced to unrelated third parties for the Product in the Territory, less:
(a) trade and reasonable and customary cash discounts allowed;
(b) refunds, rebates, chargebacks, retroactive price adjustments
and any other allowances which effectively reduce the net
selling price; and
(c) returns, credits and allowances.
Such amounts shall be determined from books and records maintained in accordance
with GAAP, consistently applied.
"PDMA" shall mean the Prescription Drug Marketing Act of 1987, as
amended from time to time, together with any rules or regulations promulgated
thereunder.
"Person" shall mean a natural person, a corporation, a partnership, a
trust, a joint venture, a limited liability company, any governmental authority
or any other entity or organization.
"Product" shall mean a pharmaceutical product containing
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] of the active ingredient
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], in a fast-dissolving tablet using the
CIMA Technology, as more specifically described below:
Active ingredient and potency: [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
Tablet size: 1/4"
Tablet weight: 50 - 120 mg
Flavor: Mint
Color: White
Tablet disintegration: 30 seconds or less
Intagliation (Engraving): [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]
"Promotional Materials" shall mean any advertising and promotional
labeling bearing a name (trade name or generic name) used in the promotion of
the Product, including, without limitation, promotional materials produced by or
on behalf of Xxxxxxx (examples include, but are not limited to, journal ads,
brochures, service items, managed care pull through sheets, formulary
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presentations, price lists, monographs, Internet pages and telephone or
television advertisements) and materials produced by outside sources (examples
include, but are not limited to, medical reprints, textbooks and CME materials)
to the extent funded by, created in cooperation with, reviewed, or distributed
by Xxxxxxx. The definition of Promotional Materials shall also include press
releases and other releases of information to the media regarding the Product.
"Quarter" shall mean, as the case may be, the three months ending on
March 31, June 30, September 30 or December 31 in any Year.
"Xxxxxxx" shall have the meaning given in the preamble and shall
include its Affiliates.
"Xxxxxxx Technology" shall mean all of Xxxxxxx'x patents, trade
secrets, technology, know-how and all other information necessary to the
manufacture of the Product including, without limitation, that related to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***].
"Xxxxxxx Trademarks" shall have the meaning given in Section 9.11(c).
"Specifications" shall mean, at any time, the specifications for the
Product that are included in the Quality Assurance Addendum set forth on
Schedule 5.4(d).
"Territory" shall mean the fifty (50) states, the District of Columbia
and the territories and possessions comprising the United States of America,
including Puerto Rico.
"Year" shall mean a calendar year during the term of this Agreement.
SECTION 2
GRANT OF LICENSES; LICENSE OPTION
2.1 Grant of Licenses.
(1) CIMA hereby grants to Xxxxxxx an exclusive, subject to
Section 2.5, license for the term of this Agreement under the following
assets to develop, manufacture, market, distribute and sell the
Product, for all indications and for all agreed upon product line
extensions, in the Territory (such assets are referred to herein
collectively as the "Licensed Assets"):
(i) all current and future regulatory filings,
approvals, registrations and governmental authorizations that
relate to the Product in the Territory;
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(ii) the CIMA Intellectual Property; and
(iii) the CIMA Marketing and Market Research Data.
(2) CIMA grants to Xxxxxxx an exclusive, royalty bearing
license to use the CIMA Trademarks to market, distribute and sell the
Product, during the term of this Agreement, for all indications and for
all agreed upon product line extensions in the Territory.
(3) The license to Xxxxxxx will be exclusive in that CIMA will
not grant any licenses of the Licensed Assets of the CIMA trademarks to
any other Person with respect to the Product or any other
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] products during the
term of this Agreement except as provided in Section 2.5.
2.2 Sublicenses. Xxxxxxx shall have the right to extend the licenses
granted pursuant to this Section 2 in whole or in part to any Affiliate of
Xxxxxxx, provided that Xxxxxxx is not then in default with respect to any of its
obligations to CIMA under this Agreement. All the terms and provisions of this
Agreement shall apply to the Affiliate to which this license has been extended
to the same extent as they apply to Xxxxxxx, and the operations of the Affiliate
shall be deemed to be the operations of Xxxxxxx and Xxxxxxx shall account
therefor and be responsible for the performance of such Affiliate of all of its
obligations hereunder. In addition, Xxxxxxx shall have the right to extend the
licenses granted pursuant to this Section 2 in whole or in part to Persons who
are not Affiliates of Xxxxxxx with the prior written consent of CIMA, such
consent not to be unreasonably withheld or delayed.
2.3 Marketing, Distribution and Sale. After the Launch, Xxxxxxx shall
use its commercially reasonable efforts to market, distribute and sell the
Product in the Territory. Such efforts shall be consistent with industry norms,
given the product profile, product potential and the state of the market at
Launch.
2.4 Additional Development Option. Xxxxxxx shall have the one-time
option to cause CIMA to collaborate with Xxxxxxx for the development of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] Extended Release utilizing the CIMA
Technology (the "Additional Development Option"). Xxxxxxx may exercise the
Additional Development Option by delivering to CIMA an Additional Development
Option Notification (an "ADO Notification") at any time prior to December 31,
2001. The ADO Notification shall set forth the specifications for the product
that Xxxxxxx proposes to develop and the principal terms under which Xxxxxxx
proposes to undertake such development. Upon receipt of an ADO Notification by
CIMA, Xxxxxxx and CIMA shall use their commercially reasonable efforts to
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finalize a Development, License and Supply Agreement substantially in the form
and substance of this Agreement within sixty (60) days after CIMA's receipt of
such ADO Notification; provided, however, that the terms of any such
Development, License and Supply Agreement in respect of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] Extended Release shall incorporate the terms reflected
on Schedule 2.4 hereto.
2.5 Minimum Annual Net Sales. Subject to Section 4.1(c), Xxxxxxx shall
endeavor to meet or exceed the minimum Annual Net Sales targets set forth on
Schedule 2.5 hereto. Any provision in this Agreement to the contrary
notwithstanding (but still subject to Section 4.1(c)), in the event that Xxxxxxx
fails to meet the minimum Annual Net Sales targets set forth on Schedule 2.5
hereto, CIMA's sole remedy for such failure shall be, subject to Section 4.1(c),
to (i) convert the exclusive licenses granted in Sections 2.1 to non-exclusive
licenses, and/or (ii) reduce the list of pharmaceutical products on Schedule
9.9(a) to those pharmaceutical products that contain [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] as their primary active ingredient. In the event that Xxxxxxx
fails to meet the minimum Annual Net Sales targets set forth on Schedule 2.5
hereto, CIMA may exercise any remedies it is entitled to pursuant to this
Section 2.5, if at all, by the delivery of written notice thereof to Xxxxxxx.
SECTION 3
PRODUCT DEVELOPMENT
3.1 Obligations of CIMA. CIMA shall be responsible for the satisfactory
performance of each of the development activities set forth on Schedule 3.1 at
least by the times set forth on Schedule 3.1.
3.2 Obligations of Xxxxxxx. Xxxxxxx shall, in a timely fashion, supply
CIMA with sufficient quantities of API for CIMA to perform the development
activities described on Schedule 3.1 and the supply activities described in
Sections 5.1 and 5.5.
3.3 License of Xxxxxxx Technology. Xxxxxxx hereby grants to CIMA a
non-exclusive license under the Xxxxxxx Technology so that CIMA may carry out
its obligations under Section 3.1. Such license may not be sublicensed without
the prior written consent of Xxxxxxx.
3.4 Regulatory Matters. All Product supplied to Xxxxxxx shall be
produced under cGMP and in accordance with the Specifications. CIMA shall
furnish Xxxxxxx with a Certificate of Analysis with a cGMP statement to
demonstrate that each shipment of Product has been manufactured under cGMP and
other FDA guidelines and in accordance with the Specifications. In addition,
Xxxxxxx reserves the right, at its own expense, to audit the facility of CIMA,
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including its processes, records and other facets of the operation as may be
necessary to assure that all applicable regulations have been complied with, and
the Specifications have been met. CIMA shall permit duly authorized
representatives of Xxxxxxx to audit all manufacturing and processing operations
at reasonable times with a prior appointment. The right to audit shall commence
with the effective date of this Agreement. These audits will be conducted to
assure compliance with all pertinent acts, regulations, and guidelines
promulgated by the FDA and other regulatory authorities, as well as standards
then in effect in the regulatory environment. Such audits will be permitted
during normal business hours and will be performed with a minimum of disruption.
SECTION 4
ROYALTY, COST OF GOODS AND MILESTONE PAYMENTS
4.1 Royalty and Milestone Payments.
(1) Xxxxxxx shall make royalty payments to CIMA, at the times, in the
amounts and subject to the conditions set forth on Schedule 4.1(a).
(2) Xxxxxxx shall make milestone payments to CIMA as set forth on
Schedule 4.1(b).
(3) In the event of (i) any patent infringement, illegality or severe
side effect profile, that, in each case, has a materially adverse effect on the
Product, and/or (ii) the occurrence of an interruption in the supply of the
Product for a period of 120 days or more, then, in each case, the obligation of
Xxxxxxx to make any payments pursuant to Sections 4.1(a) or 4.1(b) or Schedules
4.1(a) or 4.1(b) or to meet any minimum Annual Net Sales targets pursuant to
Section 2.5 or Schedule 2.5 shall, in each case, terminate and be deemed waived
by CIMA and shall be promptly renegotiated in good faith by Xxxxxxx and CIMA.
Any renegotiated obligations pursuant to this Section 4.1(c) shall be
retroactively effective to the date the applicable event described above
occurred.
4.2 Records and Audit. Xxxxxxx and its Affiliates shall keep full, true
and accurate books of account containing all particulars that may be necessary
for the purpose of showing the amounts payable to CIMA hereunder. Such books of
account shall be kept at Xxxxxxx'x principal place of business or the principal
place of business of the appropriate Affiliate of Xxxxxxx to which this
Agreement relates. Such books and the supporting data shall be open, at all
reasonable times and upon reasonable notice during the term of this Agreement
and for 2 years after its termination, to the inspection by a firm of certified
public accountants selected by CIMA and reasonably acceptable to Xxxxxxx, for
the limited purpose of verifying Xxxxxxx'x royalty statements; provided,
however, that such examination shall not take place more often than once each
Year and shall not cover more than the preceding 3 Years, with no right to audit
any period
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previously audited. Except as otherwise provided in this Section, the
cost of any such examination shall be paid by CIMA. In the event that any such
inspection reveals a deficiency in excess of 5% of the reported royalty for the
period covered by the inspection, Xxxxxxx shall promptly pay CIMA the
deficiency, plus interest at the rate of 8% per annum, and shall reimburse CIMA
for the fees and expenses paid to such accountants in connection with their
inspection. In the event that any such inspection reveals a deficiency that is
less than 5% of the reported royalty for the period covered by the inspection,
Xxxxxxx shall promptly pay CIMA the deficiency, plus interest at the rate of 8%
per annum. The parties agree that neither party shall be required to retain
books and records with respect to the above other than books and records
relating to the current Year and the immediately preceding 3 Years.
4.3 Quarterly Reports of Royalties. In any Year, Xxxxxxx shall, within
60 days after the end of each Quarter, deliver to CIMA true and accurate
reports, certified by an authorized official of Xxxxxxx, setting forth the
actual Annual Net Sales and total royalties due under Section 4.1(a) for such
Year. If no royalties are due, Xxxxxxx shall so report.
SECTION 5
SUPPLY OF PRODUCT
5.1 Supply of Product.
(1) For the term of this Agreement, or for as long as CIMA manufactures
the Product, whichever is shorter, Xxxxxxx agrees to purchase from CIMA and CIMA
agrees to supply Xxxxxxx with all of Xxxxxxx'x requirements for the Product,
Product samples and Product placebos for their subsequent use, sale, lease or
transfer by Xxxxxxx.
(2) Xxxxxxx agrees to initiate purchases of the Product, Product
samples and Product placebos hereunder by issuing CIMA binding purchase orders
not less than 90 days prior to the required shipping date set forth therein.
CIMA agrees to accept any order issued in accordance with this Section 5.1(b)
and to meet the delivery dates specified thereon. All purchase orders hereunder
shall be on Xxxxxxx'x standard purchase order form (a copy of which is attached
as Schedule 5.1(b) hereto and which shall not, for purposes of this Agreement
only, be modified in any material respect without CIMA's prior written consent,
such consent not to be unreasonably withheld or delayed) and shall be directed
to CIMA at the address set forth below. The terms and conditions of purchase
enumerated on the reverse side of such standard purchase order form shall
prevail over any inconsistent or conflicting language as may exist on invoices,
confirmation or order acknowledgment forms of CIMA, provided, however, that in
the event any terms thereof are in conflict, or are inconsistent with any terms
of this Agreement, the terms and conditions hereof shall prevail. No Product
delivered by CIMA shall have a shelf life that is more than two months less than
the maximum shelf life of such product; and, in any case, all Product delivered
by
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CIMA shall have at least 22 months of shelf life remaining upon delivery to
Schwarz (other than batches that were under investigation and batches for
validation which shall have at least 18 months of shelf life remaining upon
delivery to Xxxxxxx).
(3) Purchase order quantities shall be in batch sizes of 1,000,000
tablets per batch unless otherwise mutually agreed by the parties. The delivery
quantity of blistered tablets shall not exceed 4,000,000 tablets in any calendar
month; provided that this limitation shall not apply to bulk tablets.
(4) Xxxxxxx shall provide the amount of API that CIMA requires to
perform its obligations pursuant to Schedule 3.1 and Sections 5.1 and 5.5 at no
charge to CIMA sixty (60) days prior to date of tablet manufacture, as well as
one (1) month of safety stock. API must conform to Xxxxxxx'x then current raw
materials specifications. CIMA shall not be accountable for production or
shipment delays due to lack of API.
(5) EXCEPT AS SPECIFICALLY PROVIDED HEREIN, THE PRODUCT WILL BE
SUPPLIED BY CIMA WITH NO WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
ANY WARRANTY OF MERCHANTABLILITY OR FITNESS FOR A PARTICULAR PURPOSE.
5.2 Identification. Xxxxxxx may market the Product under its name, with
its packaging and logo; Xxxxxxx will, however, identify CIMA as the supplier in
a fair manner, reasonably acceptable to CIMA. CIMA will bear all the costs of
labeling the Product so as to appropriately display the Xxxxxxx name provided
Xxxxxxx supplies all the appropriate graphics, designs, logos and related and
appropriate artwork; provided that Xxxxxxx shall reimburse CIMA for any costs
incurred by CIMA in making changes to the packaging required to manufacture the
Product in accordance with changes to the PDMA or other applicable law or
changes required by Xxxxxxx, including, but not limited to plate and die charges
due to label changes and product identification requirements, and for any
packaging components rendered obsolete by the changes. In addition, CIMA shall
pay for all initial one-time, set-up charges incurred by CIMA in respect of
packaging the Product. Xxxxxxx may use CIMA's name and derivations thereof in
promoting, marketing and selling the Product in the Territory; provided,
however, that the particular formulation of any reference to CIMA's name in any
promotional material shall be subject to CIMA's review and consent; and
provided, further, that once the formulation of any such reference has been
reviewed and consented to by CIMA, any subsequent reference to CIMA's name using
such formulation shall not be subject to the further review or consent of CIMA.
All samples shall be clearly marked "for sample use only" or some similar
phrasing suggested by Xxxxxxx.
5.3 Trade, Sample and Placebo Product Price. CIMA shall supply Product,
Product samples and Product placebos to Xxxxxxx at the price set forth on
Schedule 5.3.
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5.4 Forecasts, Delivery and Quality.
(1) Xxxxxxx shall provide CIMA with 12-month non-binding forecasts
within 15 days after the end of each Quarter. Such forecasts shall be revised
and extended in each succeeding Quarter.
(2) Delivery of the Product, Product samples and Product placebos
shall be in accordance with the means of transportation, destination and dates
set forth in Xxxxxxx'x purchase order. Delivery shall be F.O.B. point of origin,
freight collect.
(3) All deliveries of the Product hereunder shall include a
Certificate of Analysis provided by the quality control manager of CIMA
attesting to the fact that such the Product (i) has been manufactured by a
process which complies with cGMP and (ii) are of quality which is in accordance
with criteria established in the Specifications and all FDA requirements.
(4) The Product, Product samples and Product placebos supplied
hereunder shall have been manufactured by a process which complies with the
quality assurance addendum set forth on Schedule 5.4(d).
5.5 Rejection and Replacement.
(1) In the event Xxxxxxx determines that any Product, Product
samples or Product placebos as manufactured and/or packaged by CIMA is
Defective, then, within 30 days after delivery of such Product, Product samples
or Product placebos to Xxxxxxx (or, in the event that such Product, Product
samples or Product placebos is Defective as a result of a latent defect, within
30 days of the discovery of such latent defect), Xxxxxxx shall provide to CIMA a
written notice of rejection, specifying in reasonable detail the manner in which
the Product is Defective (the "Notice of Rejection"). If no written Notice of
Rejection is given to CIMA by Xxxxxxx within such 30 day period, such Product,
Product samples or Product placebos shall be deemed to have been accepted by
Xxxxxxx, provided, however, that nothing contained in this Section 5.5(a) shall
be deemed to relieve CIMA of its obligations under the warranties set forth in
Section 7 below.
(2) Upon receipt of a Notice of Rejection from Xxxxxxx and in
order to minimize any hardship to Xxxxxxx'x customers, CIMA shall use its best
efforts to promptly supply to Xxxxxxx a quantity of replacement Product, Product
samples or Product placebos meeting the Specifications equal to the size of the
lot which Xxxxxxx claims was Defective so that such replacement Product shall be
received by Xxxxxxx within 30 days following CIMA's receipt of Xxxxxxx'x Notice
of Rejection. All actual and documented costs and expenses directly relating to
any rejection and replacement pursuant to this Section 5.5 shall be paid by
CIMA.
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5.6 Invoice and Payment. Upon shipment of any Product, Product
samples or Product placebos, CIMA shall be entitled to submit invoices therefor
to Xxxxxxx, and Xxxxxxx agrees to remit payment within 45 days from receipt of
the invoice.
5.7 Supply Disruption; Alternate Manufacturing Site.
(1) CIMA shall use its best efforts to supply Xxxxxxx with
the Product in a timely manner in accordance with the orders and
forecasts received by CIMA pursuant to Sections 5.1(b) and 5.4(a),
respectively. In any consecutive 120 day period, should CIMA fail to
supply Xxxxxxx with any of the Product ordered for such 120 day period
pursuant to Section 5.1(b), Xxxxxxx shall have the right to require
CIMA to transfer the manufacture of the Product to Xxxxxxx'x Xxxxxxx
facility or other designated facility. CIMA will assume all costs of
such transfer. Should CIMA cure its failure to supply, CIMA shall have
the right to resume the manufacture of the Product and Xxxxxxx and CIMA
shall, at CIMA's expense, transfer the manufacture of the Product back
to CIMA within a commercially reasonable amount of time.
(2) CIMA and Xxxxxxx shall, as soon as practicable
following the date of Launch, qualify a manufacturing plant designated
by Xxxxxxx as an alternate FDA approved manufacturing and packaging
site for the Product. The costs of obtaining such approval shall be
borne equally by CIMA and Xxxxxxx.
5.8 CIMA's Obligation to Continue Manufacture. If this Agreement
terminates or expires through no breach of Xxxxxxx, CIMA shall reasonably
cooperate with Xxxxxxx in transferring the manufacture of the product to
Xxxxxxx, its Affiliate or a third-party appointed by Xxxxxxx, the parties shall
develop a schedule for the transfer of the manufacture of the Product and CIMA
shall continue to supply the Product to Xxxxxxx pursuant to the terms of this
Agreement until twenty-four (24) months from the date this Agreement is
terminated or expires pursuant to Section 11.1.
SECTION 6
CONDITIONS PRECEDENT TO THE CLOSING; CLOSING DATE
6.1 Conditions Precedent to Xxxxxxx'x Obligations. Subject to
waiver as set forth in Section 12.3, all obligations of Xxxxxxx to close the
transactions contemplated under this Agreement are subject to the fulfillment or
satisfaction of each of the following conditions precedent:
(1) Representations and Warranties True as of the Closing
Date. The representations and warranties of CIMA contained in this
Agreement or in any schedule,
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certificate or document delivered by CIMA to Xxxxxxx pursuant to the
provisions hereof shall have been true on the date hereof and shall be
true on the Closing Date with the same effect as though such
representations and warranties were made as of such date.
(2) Compliance with this Agreement. CIMA shall have
performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by it prior to or by
the Closing Date.
(3) Closing Certificate. Xxxxxxx shall have received a
certificate from CIMA, executed by an officer of CIMA, certifying in
such detail as Xxxxxxx may reasonably request that the conditions
specified in Sections 6.1(a) and 6.1(b), above, have been fulfilled and
certifying that CIMA has obtained all consents and approvals required
hereunder.
(4) No Threatened or Pending Litigation. On the Closing
Date, no suit, action or other proceeding, or injunction or final
judgment relating thereto, shall, to the best of CIMA's knowledge, be
threatened or be pending before any court or governmental or regulatory
official, body or authority in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby,
and no investigation that might result in any such suit, action or
proceeding shall be pending or, to the best of CIMA's knowledge,
threatened.
6.2 Conditions Precedent to CIMA's Obligations. Subject to waiver
as set forth in Section 12.3, all obligations of CIMA to close the
transactions contemplated under this Agreement are subject to the
fulfillment or satisfaction of each of the following conditions
precedent:
(1) Representations and Warranties True as of the Closing
Date. The representations and warranties of Xxxxxxx contained in this
Agreement or in any schedule, certificate or document delivered by
Xxxxxxx to CIMA pursuant to the provisions hereof shall have been true
on the date hereof and shall be true on the Closing Date with the same
effect as though such representations and warranties were made as of
such date.
(2) Compliance with this Agreement. Xxxxxxx shall have
performed and complied with all agreements and conditions required by
this Agreement to be performed or complied with by it prior to or by
the Closing Date.
(3) Closing Certificate. CIMA shall have received a
certificate from Xxxxxxx, executed by an officer of Xxxxxxx, certifying
in such detail as CIMA may reasonably request that the conditions
specified in Sections 6.2(a) and 6.2(b), above, have been
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fulfilled and certifying that Xxxxxxx has obtained all consents and
approvals required hereunder.
(4) No Threatened or Pending Litigation. On the Closing
Date, no suit, action or other proceeding, or injunction or final
judgment relating thereto, shall, to the best of Xxxxxxx'x knowledge,
be threatened or be pending before any court or governmental or
regulatory official, body or authority in which it is sought to
restrain or prohibit or to obtain damages or other relief in connection
with this Agreement or the consummation of the transactions
contemplated hereby, and no investigation that might result in any such
suit, action or proceeding shall be pending or, to the best of
Xxxxxxx'x knowledge, threatened.
6.3 Closing Date.
(1) Subject to Section 6.3(b), below, the closing of the
transactions contemplated by this Agreement shall take place at 10:00
a.m., local time, on June 30, 2000, or on such other date as may be
mutually agreed upon in writing by the parties (the "Closing Date"), at
the offices of Xxxxx, Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
(2) Each party hereby agrees to use its best efforts to
consummate the transactions contemplated herein, as modified, on or
before June 30, 2000; provided, however, that if the parties are unable
to close the transactions contemplated hereby by August 31, 2000, or
such later date as shall be mutually agreed to in writing by CIMA and
Xxxxxxx, then all of the rights and obligations of the parties under
this Agreement shall terminate without liability.
SECTION 7
REPRESENTATIONS AND WARRANTIES OF CIMA
CIMA hereby represents and warrants to Xxxxxxx that:
7.1 Organization, Power and Authority. CIMA is a corporation duly
organized and validly existing under the laws of the State of Delaware. CIMA has
all necessary corporate power and authority to enter into, and be bound by the
terms and conditions of, this Agreement, and to license the Licensed Assets and
the CIMA Trademarks to Xxxxxxx pursuant hereto.
7.2 Due Authority; No Breach. The execution, delivery and
performance by CIMA of this Agreement and each agreement or instrument
contemplated by this Agreement, and the performance of the transactions
contemplated hereby and thereby, have been duly authorized by
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all necessary corporate action by CIMA. This Agreement is, and each agreement or
instrument contemplated by this Agreement, when executed and delivered by CIMA
in accordance with the provisions hereof, will be (assuming the due execution
and delivery hereof and thereof by Xxxxxxx) the legal, valid and binding
obligation of CIMA, in each case enforceable against CIMA in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization, or similar laws from time to time in
effect which affect the enforcement of creditors' rights generally and by legal
and equitable limitations on the availability of specific performance and other
equitable remedies against CIMA. All persons who have executed this Agreement on
behalf of CIMA, or who will execute on behalf of CIMA any agreement or
instrument contemplated by this Agreement, have been duly authorized to do so by
all necessary corporate action. Neither the execution and delivery of this
Agreement or any such other agreement or instrument by CIMA, nor the performance
of the obligations contemplated hereby and thereby, will (i) conflict with or
result in any violation of or constitute a breach of any of the terms or
provisions of, or result in the acceleration of any obligation under, or
constitute a default under any provision of the articles of incorporation or
by-laws of CIMA or any material contract or any other material obligation to
which CIMA is a party or to which it is subject or bound, or (ii) violate any
judgment, order, injunction, decree or award of any court, administrative
agency, arbitrator or governmental body against, or affecting or binding upon,
CIMA or upon the securities, property or business of CIMA, or (iii) constitute a
violation by CIMA of any applicable law or regulation of any jurisdiction as
such law or regulation relates to CIMA, or to the property or business of CIMA
except for such conflict, acceleration, default, breach or violation that is not
reasonably likely to have a material adverse effect on CIMA's ability to perform
its obligations under this Agreement or under any agreement or instrument
contemplated hereby.
7.3 Intellectual Property. CIMA is the lawful owner of the
Licensed Assets and CIMA Trademarks, CIMA can license the Licensed Assets and
CIMA Trademarks without the consent of any third party, there is no pending or
overtly threatened claim against CIMA asserting that any of the Licensed Assets
and CIMA Trademarks infringes or violates the rights of third parties or that
Xxxxxxx, by practicing under the Licensed Assets and CIMA Trademarks in
performing the Activities, would violate any of the intellectual property rights
of any third party, and nothing has come to the attention of CIMA which has, or
reasonably should have, led CIMA to believe that any of the Licensed Assets and
CIMA Trademarks infringes or violates the right of third parties. CIMA has not
given any notice to any third parties asserting infringement by such third
parties upon any of the Licensed Assets and CIMA Trademarks. CIMA is not aware
of and has not received any communications challenging the ownership, validity
or effectiveness of any of the Licensed Assets and CIMA Trademarks. CIMA has not
granted any right to any third party relating to the Activities which would
violate the terms of or conflict with the rights granted to Xxxxxxx pursuant to
this Agreement.
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7.4 Technology Rights. The CIMA Technology, when combined with the
Xxxxxxx Technology, includes all the technology, patents, know-how, trade
secrets and other intellectual property necessary to manufacture the Product.
7.5 Litigation. There are no pending or, to the best of CIMA's
knowledge, threatened judicial, administrative or arbitral actions, claims,
suits or proceedings pending as of the date hereof against CIMA relating to the
Activities, the Licensed Assets or the CIMA Trademarks which, either
individually or together with any other, would have a material adverse effect on
the Activities, the Licensed Assets, the CIMA Trademarks or the ability of CIMA
to perform its obligations under this Agreement or any agreement or instrument
contemplated hereby. There are no pending, and CIMA does not presently
contemplate bringing, any actions or suits relating to the Activities, the
Licensed Assets or the CIMA Trademarks against others.
7.6 Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution, delivery and performance
of this Agreement, or any agreement or instrument contemplated by this
Agreement, by CIMA or the performance by CIMA of its obligations contemplated
hereby and thereby.
7.7 Brokerage. No broker, finder or similar agent has been
employed by or on behalf of CIMA, and no Person with which CIMA has had any
dealings or communications of any kind is entitled to any brokerage commission,
finder's fee or any similar compensation, in connection with this Agreement or
the transactions contemplated hereby.
SECTION 8
REPRESENTATIONS AND WARRANTIES OF XXXXXXX
Xxxxxxx represents and warrants to CIMA that:
8.1 Organization, Power and Authority. Xxxxxxx is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Xxxxxxx has all necessary corporate power and authority to
enter into, and be bound by the terms and conditions of, this Agreement, to
license the Licensed Assets, the Patents and the CIMA Technology from CIMA, and
to license the Xxxxxxx Technology to CIMA pursuant hereto.
8.2 Due Authority; No Breach. The execution, delivery and
performance by Xxxxxxx of this Agreement, and each agreement or instrument
contemplated by this Agreement, and the performance of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action by Xxxxxxx. This Agreement is, and each agreement or instrument
contemplated by this Agreement, when executed and delivered by Xxxxxxx in
accordance with the
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provisions hereof, will be (assuming due execution and delivery hereof and
thereof by CIMA) the legal, valid and binding obligation of Xxxxxxx, in each
case enforceable against Xxxxxxx in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization, or similar laws from time to time in effect which affect the
enforcement of creditors' rights generally and by legal and equitable
limitations on the availability of specific performance and other equitable
remedies against Xxxxxxx. All persons who have executed this Agreement on behalf
of Xxxxxxx, or who will execute on behalf of Xxxxxxx any agreement or instrument
contemplated by this Agreement, have been duly authorized to do so by all
necessary corporate action. Neither the execution and delivery of this Agreement
by Xxxxxxx, or any such other agreement or instrument by Xxxxxxx, nor the
performance of the obligations contemplated hereby and thereby, will (i)
conflict with or result in any violation of or constitute a breach of any of the
terms or provisions of, or result in the acceleration of any obligation under,
or constitute a default under any provision of its articles of incorporation or
by-laws or any material contract or any other material obligation to which
Xxxxxxx is a party or to which it is subject or bound, or (ii) violate any
judgment, order, injunction, decree or award of any court, administrative
agency, arbitrator or government body against, or affecting or binding upon,
Xxxxxxx or upon the securities, property or business of Xxxxxxx, or (iii)
constitute a violation by Xxxxxxx of any applicable law or regulation of any
jurisdiction as such law or regulation relates to Xxxxxxx or to the property or
business of Xxxxxxx, except for such conflict, acceleration, default, breach or
violation that is not reasonably likely to have a material adverse effect on
Xxxxxxx'x ability to perform its obligations under this Agreement or any
agreement or instrument contemplated hereby.
8.3 Brokerage. No broker, finder or similar agent has been
employed by or on behalf of Xxxxxxx and no Person with which Xxxxxxx has had any
dealings or communications of any kind is entitled to any brokerage commission,
finder's fee or any similar compensation, in connection with this Agreement or
the transactions contemplated hereby.
8.4 Litigation. There are no pending or, to the best of Xxxxxxx'x
knowledge, threatened judicial, administrative or arbitral actions, claims,
suits or proceedings pending as of the date hereof against Xxxxxxx which, either
individually or together with any other, will have a material adverse effect on
the ability of Xxxxxxx to perform its obligations under this Agreement or any
agreement or instrument contemplated hereby or affect adversely the grant to
CIMA of the non-exclusive license of the Xxxxxxx Technology pursuant to Section
3.3.
8.5 Governmental Approval. No consent, approval, waiver, order or
authorization of, or registration, declaration or filing with, any governmental
authority is required in connection with the execution, delivery and performance
of this Agreement, or any agreement or instrument contemplated by this
Agreement, by Xxxxxxx or the performance by Xxxxxxx of its obligations
contemplated hereby and thereby.
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SECTION 9
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
9.1 Governmental Filings. CIMA and Xxxxxxx each agree to prepare
and file whatever filings, listings, requests or applications are required to be
filed with any governmental authority in connection with this Agreement or the
Product and to cooperate with one another as reasonably necessary to accomplish
the foregoing.
9.2 Compliance with Law. Xxxxxxx and CIMA shall each comply with
all federal, state and local laws and regulations applicable to developing,
approving, manufacturing, marketing and selling the Product in the Territory,
the Licensed Assets, the Patents and the Technology or the performance of their
respective obligations hereunder. CIMA and Xxxxxxx each shall keep all records
and reports required to be kept by applicable laws and regulations, and each
shall make its facilities available at reasonable times during business hours
for inspection by representatives of governmental agencies. CIMA and Xxxxxxx
each shall notify the other within forty-eight (48) hours of receipt of any
notice or any other indication whatsoever of any FDA or other governmental
agency inspection, investigation or other inquiry, or other material notice or
communication of any type, involving the Product. Xxxxxxx and CIMA shall
cooperate with each other during any such inspection, investigation or other
inquiry including, but not limited to, allowing upon request a representative of
the other to be present during the applicable portions of any such inspection,
investigation or other inquiry and providing copies of all relevant documents.
Xxxxxxx and CIMA shall discuss any written response to observations or
notifications received in connection with any such inspection, investigation or
other inquiry and each shall give the other an opportunity to comment upon any
proposed response before it is made. In the event of disagreement concerning the
form or content of such response, however, CIMA shall be responsible for
deciding the appropriate form and content of any response with respect to any of
its cited activities and Xxxxxxx shall be responsible for deciding the
appropriate form and content of any response with respect to any of its cited
activities.
9.3 Recall. Xxxxxxx and CIMA shall consult with one another as to
all decisions concerning recall or withdrawal of the Product from the market,
including, but not limited to, determining whether or not to make any such
recall or withdrawal, the timing and scope thereof, and the means of conducting
any recall or withdrawal. The party requesting any recall or withdrawal must
receive the prior written consent of the other party, such consent not to be
unreasonably withheld, prior to initiating such recall or withdrawal. No consent
shall be necessary if the recall or withdrawal is requested by the FDA or other
governmental authority. CIMA shall bear the costs (including but not limited to,
shipping and product credits) for any recall or withdrawal primarily due to the
failure of the product integrity of the Product, including but not limited to,
CIMA's failure to comply with this Agreement, cGMP, the PDMA or the
Specifications. The costs for any other recall or withdrawal shall be the
responsibility of Xxxxxxx.
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9.4 Confidentiality. Xxxxxxx shall treat as confidential the
Licensed Assets, the Patents, the CIMA Technology, and all other information of
CIMA of which Xxxxxxx becomes aware in connection with this Agreement
(collectively, "CIMA Proprietary Information"). Xxxxxxx shall neither disclose
CIMA Proprietary Information to any third party nor use CIMA Proprietary
Information for any purpose other than as set forth in this Agreement. CIMA
shall treat as confidential the Xxxxxxx Technology and all other information of
Xxxxxxx of which CIMA becomes aware in connection with this Agreement
(collectively, "Xxxxxxx Proprietary Information"). CIMA shall neither disclose
Xxxxxxx Proprietary Information to any third party nor use Xxxxxxx Proprietary
Information for any purpose other than as set forth in this Agreement.
Nothing contained herein will in any way restrict or impair either
party's (the "Using Party's") right to use, disclose or otherwise deal with any
Proprietary Information of the other party which:
(1) at the time of disclosure is known to the public or
thereafter becomes known to the public by publication or otherwise
through no fault of the Using Party;
(2) the Using Party can establish was in its possession
prior to the time of the disclosure and was not obtained directly or
indirectly from the other party;
(3) is independently made available as a matter of right
to the Using Party by a third party who is not thereby in violation of
a confidential relationship with the other party;
(4) is developed by the Using Party independently of the
Proprietary Information received from the other party and the Using
Party can establish such development; or
(5) is information required to be disclosed by legal or
regulatory process; provided, in each case the Using Party timely
informs the other party and uses reasonable efforts to limit the
disclosure and maintain confidentiality to the extent possible and
permits the other party to intervene and contest or attempt to limit
the disclosure.
Xxxxxxx shall obtain no right or license of any kind under the CIMA Proprietary
Information except as set forth in this Agreement. CIMA shall obtain no right or
license of any kind under the Xxxxxxx Proprietary Information except as set
forth in this Agreement.
9.5 Expenses. CIMA and Xxxxxxx shall each bear their own direct
and indirect expenses incurred in connection with the negotiation and
preparation of this Agreement and, except as set forth in this Agreement, the
performance of the obligations contemplated hereby.
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9.6 Reasonable Efforts. CIMA and Xxxxxxx each hereby agrees to use
all reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done all things necessary or proper to make effective the
transactions contemplated by this Agreement, including such actions as may be
reasonably necessary to obtain approvals and consents of governmental Persons
and other Persons.
9.7 Publicity. The parties agree that no publicity release or
announcement concerning the transactions contemplated hereby shall be issued
without the advance written consent of the other, except as such release or
announcement may be required by law, in which case 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 upon such release
or announcement.
9.8 Cooperation. If either party shall become engaged in or
participate in any investigation, claim, litigation or other proceeding with any
third party, including the FDA, relating in any way to the Product or any of the
Licensed Assets, the Patents or the Technology, the other party shall cooperate
in all reasonable respects with such party in connection therewith, including,
without limitation, using its reasonable efforts to make available to the other
such employees who may be helpful with respect to such investigation, claim,
litigation or other proceeding, provided that, for purposes of this provision,
reasonable efforts to make available any employee shall be deemed to mean
providing a party with reasonable access to any such employee at no cost for a
period of time not to exceed 24 hours (e.g., three 8-hour business days).
Thereafter, any such employee shall be made available for such time and upon
such terms and conditions (including, but not limited to, compensation) as the
parties may mutually agree.
9.9 Competition; No Sale for Resale.
(1) CIMA agrees that, commencing on the Closing Date and
continuing for the period ending five (5) years after the term of this
Agreement, it shall not directly or indirectly, engage in any activity
in competition with the Activities in the Territory. Subject to Section
2.5, such prohibited activity shall include, without limitation, using
or licensing to any third party for use, the Licensed Assets or CIMA
Trademarks in connection with (i) any pharmaceutical product listed on
Schedule 9.9(a)(i) in the Territory during the period commencing on the
Closing Date and ending at the end of the term of this Agreement;
provided, however, that the non-competition period with respect to any
pharmaceutical product containing the active ingredient
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall continue for an
additional five (5) years after the term of this Agreement or (ii) any
pharmaceutical product listed on Schedule 9.9(a)(ii) in the Territory
during the period commencing on the Closing Date and ending five (5)
years after the Closing. It is further understood that the remedies at
law are inadequate in the case of any breach of this covenant and that
Xxxxxxx
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xxxxx xx entitled to equitable relief, including the remedy of specific
performance, with respect to any breach of such covenant.
(2) Neither Xxxxxxx nor any sublicensee of Xxxxxxx shall
knowingly sell any Product to anyone in the Territory for subsequent
distribution or resale outside the Territory and each shall take all
reasonable precautions to prevent such distribution or resale outside
the Territory. CIMA shall not knowingly sell any Product to anyone in
the Territory or outside the Territory for subsequent distribution or
resale in the Territory and CIMA shall take all reasonable precautions
to prevent such distribution or resale in the Territory.
9.10 Conflicting Rights. CIMA shall not grant any right to any
third party relating to the Activities which would violate the terms of or
conflict with the rights granted to Xxxxxxx pursuant to this Agreement.
9.11 Patent and Trademark Maintenance.
(1) CIMA shall be solely responsible for filing,
prosecuting, and maintaining all of the CIMA Patents, and CIMA shall
pay the costs associated therewith. CIMA shall file, prosecute, and
maintain all CIMA Patents so as to fully continue the benefits under
the licenses granted to Xxxxxxx hereunder. CIMA may, however,
discontinue prosecuting and maintaining any CIMA Patent if (i) CIMA has
a valid business reason to do so, and (ii) obtains the prior written
approval of Xxxxxxx, such approval not to be unreasonably withheld or
delayed.
(2) CIMA shall be solely responsible for filing,
prosecuting, and maintaining all CIMA Trademarks, and CIMA shall pay
the costs associated therewith. All registrations, variations, logos,
goodwill and other rights under or acquired through use of the CIMA
Trademarks shall accrue and belong to CIMA. Except as provided herein,
Xxxxxxx shall have no rights to use the CIMA Trademarks. Xxxxxxx will
not use in its business, in or outside of the Territory, any other xxxx
or name which is similar to or nearly resembles any of the CIMA
Trademarks in use by CIMA to indicate the source and origin of the CIMA
Technology as to be likely to cause deception or confusion. Xxxxxxx
recognizes that CIMA is the owner of all CIMA Trademarks used in
commerce to indicate the source of the CIMA Technology and agrees that
the CIMA Trademarks shall remain vested in CIMA both during the term of
this Agreement and thereafter. Xxxxxxx shall not contest the validity
of the CIMA Trademarks or CIMA's ownership of the CIMA Trademarks. Use
of the CIMA Trademarks by Xxxxxxx in conjunction with the manufacture,
use, and sale of the Product and all goodwill related thereto shall
inure to the benefit of CIMA for purposes of building the longevity and
extent of use of the CIMA Trademarks.
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(3) Xxxxxxx shall be solely responsible for filing,
prosecuting, and maintaining all trademarks it develops or owns for the
Product (the "Xxxxxxx Trademarks"), and Xxxxxxx shall pay the costs
associated therewith. All registrations, variations, logos, goodwill
and other rights under or acquired through use of the Xxxxxxx
Trademarks shall accrue and belong to Xxxxxxx. CIMA shall have no
rights to use the Xxxxxxx Trademarks, including, without limitation, in
connection with any product subsequently developed by CIMA pursuant to
Section 2.4. CIMA will not use in its business, in or outside of the
Territory, any other xxxx or name which is similar to or nearly
resembles the Xxxxxxx Trademarks in use by Xxxxxxx in a manner that is
likely to cause deception or confusion. CIMA recognizes that Xxxxxxx is
the owner of all of the Xxxxxxx Trademarks used in commerce to indicate
the source of the Product and agrees that the Xxxxxxx Trademarks shall
remain vested in Xxxxxxx both during the term of this Agreement and
thereafter. CIMA shall not contest the validity of the Xxxxxxx
Trademarks or Xxxxxxx'x ownership of the Xxxxxxx Trademarks. Use of the
Xxxxxxx Trademarks by Xxxxxxx in conjunction with the manufacture, use,
and sale of the Product and all goodwill related thereto shall inure to
the benefit of Xxxxxxx for purposes of building the longevity and
extent of use of the Xxxxxxx Trademarks.
(4) Xxxxxxx and CIMA agree that, where applicable, all
packaging of the Product shall identify (i) the number of the CIMA
Patents and CIMA as the owner thereof and (ii) Xxxxxxx as the owner of
the Xxxxxxx Trademarks.
(5) Any improvements to the CIMA Technology (whether or not
patentable) shall be owned solely by CIMA.
(6) Any improvements to the Xxxxxxx Technology (whether
or not patentable) shall be owned solely by Xxxxxxx.
(7) Xxxxxxx shall have full ownership rights to the Product
and, with the exception of any improvements to the CIMA Technology as
contemplated by Section 9.11(e), any patents, know-how or other
intellectual property that relate to the Product and are discovered
during the development process contemplated hereby.
(8) Any provisions in this Agreement to the contrary
notwithstanding, Xxxxxxx acknowledges that, for all purposes, CIMA is
the owner of the CIMA Technology and CIMA acknowledges that, for all
purposes, Xxxxxxx is the owner of the Xxxxxxx Technology.
9.12 Infringement; Enforcement of Proprietary Rights.
(1) Infringement of Patent Rights. Each party shall
promptly notify the other of any alleged infringement by third parties
of any CIMA Patent and provide any
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27
information available to that party relating to such alleged
infringement. CIMA shall have the responsibility to investigate such
alleged infringement and act diligently, at its own expense, to end any
infringement of such rights that materially affect Xxxxxxx'x rights
pursuant to this Agreement, including, but not limited to, bringing
suit against such third party infringer. In the event that CIMA does
not bring suit against such third party infringer, Xxxxxxx may, at its
own expense, bring suit against such third party infringer on CIMA's
behalf.
(2) Procedures. No settlement, consent judgment or other
voluntary final disposition of any suit contemplated by Section 9.12(a)
may be entered into without the consent of each party, which consent
shall not be unreasonably withheld or delayed. Any recovery of damages
in any such suit shall be retained by the party bearing the costs of
such suit. In the event of any infringement suit against a third party
brought by either party pursuant to this Section 9.12, the party not
bringing such suit shall cooperate in all respects, execute any
documents reasonably necessary to permit the other party to prosecute
such suit, and to the extent reasonable shall make available its
employees and relevant records to provide evidence for such suit.
(3) Infringement of Third Party Rights. If, during the term
of this Agreement, any third party (other than an Affiliate of Xxxxxxx)
claims that Xxxxxxx'x marketing or selling of the Product hereunder
infringes on a third party patent based upon claims that dominate
claims in the Patents, within 120 days after notice by Xxxxxxx, CIMA
shall procure for Xxxxxxx the right to exercise all rights licensed
under this Agreement without any additional payment therefor by
Xxxxxxx.
9.13 Supply of Product. CIMA shall maintain sufficient capacity
throughout the term of this Agreement to meet the requirements of Xxxxxxx for
the supply of Product hereunder.
9.14 Liability Insurance. At and after Launch, CIMA shall use its
best efforts to obtain and carry in full force and effect product liability
insurance in respect of the Product in the amount of $10,000,000 per occurrence,
$10,000,000 in the aggregate. At and after Launch, Xxxxxxx shall use its best
efforts to obtain and carry in full force and effect product liability insurance
in respect of the Product in the amount of $10,000,000 per occurrence,
$10,000,000 in the aggregate.
9.15 Referral of Orders and Inquiries. CIMA shall refer all Persons
sending orders or making inquiries regarding the Product within the Territory to
Xxxxxxx and shall promptly notify Xxxxxxx of the name of each such Person and
the nature of the inquiry of such Person.
9.16 Deemed Breach of Covenant. Neither CIMA nor Xxxxxxx shall be
deemed to be in breach of any covenant contained in this Section 9 if such
party's deemed breach is the result of any action or inaction on the part of the
other party.
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SECTION 10
INDEMNIFICATION
10.1 Indemnification.
(1) CIMA shall indemnify, defend and hold Xxxxxxx (and its
directors, officers, employees, and Affiliates) harmless from and against any
and all Damages incurred or suffered by Schwarz (and its directors, officers,
employees, and Affiliates) as a consequence of:
(1) any breach of any representation or warranty made
by CIMA in this Agreement or any agreement, instrument or
document delivered by CIMA pursuant to the terms of this
Agreement;
(2) any failure to perform duly and punctually any
covenant, agreement or undertaking on the part of CIMA
contained in this Agreement;
(3) any act or omission of CIMA with respect to the
operation of CIMA's business, or the handling, manufacturing,
sale, consumption or use of the Product by CIMA; or
(iv) the infringement of the Licensed Assets, the
Patent or the Technology of any patent, trademark, copyright,
trade secret or other intellectual property right of any
person other than CIMA or Xxxxxxx.
(2) Xxxxxxx shall indemnify, defend and hold CIMA (and its
directors, officers, employees, and Affiliates) harmless from and against any
and all Damages incurred or suffered by CIMA (and its directors, officers,
employees, and Affiliates) as a consequence of:
(1) any breach of any representation or warranty made
by Xxxxxxx in this Agreement or any agreement, instrument or
document delivered by Xxxxxxx pursuant to the terms of this
Agreement;
(2) any failure to perform duly and punctually any
covenant, agreement or undertaking on the part of Xxxxxxx
contained in this Agreement; or
(3) any act or omission of Xxxxxxx with respect to
the operation of Xxxxxxx'x business or the handling,
manufacturing, sale, consumption or use of the Product by
Xxxxxxx, including Xxxxxxx'x supply of API hereunder.
-25-
29
10.2 Notice and Opportunity To Defend. Promptly after receipt by a
party hereto of notice of any claim which could give rise to a right to
indemnification pursuant to Section 10.1. such party (the "Indemnified Party")
shall give the other party (the "Indemnifying Party") written notice describing
the claim in reasonable detail. The failure of an Indemnified Party to give
notice in the manner provided herein shall not relieve the Indemnifying Party of
its obligations under this Section, except to the extent that such failure to
give notice materially prejudices the Indemnifying Party's ability to defend
such claim. The Indemnifying Party shall have the right, at its option, to
compromise or defend, at its own expense and by its own counsel, any such matter
involving the asserted liability of the party seeking such indemnification. If
the Indemnifying Party shall undertake to compromise or defend any such asserted
liability, it shall promptly (and in any event not less than 10 days after
receipt of the Indemnified Party's original notice) notify the Indemnified Party
in writing of its intention to do so, and the Indemnified Party agrees to
cooperate fully with the Indemnifying Party and its counsel in the compromise or
defense against any such asserted liability. All reasonable costs and expenses
incurred in connection with such cooperation shall be borne by the Indemnifying
Party. If the Indemnifying Party elects not to compromise or defend the asserted
liability, fails to notify the Indemnified Party of its election to compromise
or defend as herein provided, fails to admit its obligation to indemnify under
this Agreement with respect to the claim, or, if in the reasonable opinion of
the Indemnified Party, the claim could result in the Indemnified Party becoming
subject to injunctive relief or relief other than the payment of money damages
that could materially adversely affect the ongoing business of the Indemnified
Party in any manner, the Indemnified Party shall have the right, at its option,
to pay, compromise or defend such asserted liability by its own counsel and its
reasonable costs and expenses shall be included as part of the indemnification
obligation of the Indemnifying Party hereunder. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnified Party may settle or
compromise any claim over the objection of the other; provided, however, that
consent to settlement or compromise shall not be unreasonably withheld. In any
event, the Indemnified Party and the Indemnifying Party may participate, at
their own expense, in the defense of such asserted liability. If the
Indemnifying Party chooses to defend any claim, the Indemnified Party shall make
available to the Indemnifying Party any books, records or other documents within
its control that are necessary or appropriate for such defense. Notwithstanding
anything to the contrary in this Section 10.2, (i) the party conducting the
defense of a claim shall (A) keep the other party informed on a reasonable and
timely basis as to the status of the defense of such claim (but only to the
extent such other party is not participating jointly in the defense of such
claim), and (B) conduct the defense of such claim in a prudent manner, and (ii)
the Indemnifying Party shall not cease to defend, settle or otherwise dispose of
any claim without the prior written consent of the Indemnified Party (which
consent shall not be unreasonably withheld).
10.3 Indemnification Payment Obligation. No Indemnifying Party will
have any obligations under Sections 10.1(a) or 10.1(b) until the cumulative
aggregate amount of Damages incurred or suffered by the Indemnified Party which
the Indemnifying Party is otherwise subject to under this Agreement exceeds
$50,000 at which time the entire cumulative aggregate amount of
-26-
30
such Damages shall be covered. The provisions of this Section 10.3 shall not
limit or otherwise affect the obligations of any Indemnifying Party under any
other Section of this Agreement.
10.4 Indemnification Payment Adjustments. The amount of any Damages
for which indemnification is provided under this Section 10 shall be reduced to
take account of any net tax benefit and shall be increased to take account of
any net tax detriment arising from the incurrence or payment of any such Damages
or from the receipt of any such indemnification payment and shall be reduced by
the insurance proceeds received and any other amount recovered, if any, by the
Indemnified Party with respect to any Damages; provided, however, that an
Indemnified Party shall not be subject to an obligation to pursue an insurance
claim relating to any Damages for which indemnification is sought hereunder. If
any Indemnified Party shall have received any payment pursuant to this Section
10 with respect to any Damages and shall subsequently have received insurance
proceeds or other amounts with respect to such Damages, then such Indemnified
Party shall pay to the Indemnifying Party an amount equal to the difference (if
any) between (i) the sum of the amount of those insurance proceeds or other
amounts received and the amount of the payment by such Indemnifying Party
pursuant to this Section 10 with respect to such Damages and (ii) the amount
necessary to fully and completely indemnify and hold harmless such Indemnified
Party from and against such Damages; provided, however, in no event will such
Indemnified Party have any obligation pursuant to this sentence to pay to such
Indemnifying Party an amount greater than the amount of the payment by such
Indemnifying Party pursuant to this Section 10 with respect to such Damages.
10.5 Indemnification Payment. Upon the final determination of
liability and the amount of the indemnification payment under this Section 10,
the appropriate party shall pay to the other, as the case may be, within 10
business days after such determination, the amount of any claim for
indemnification made hereunder.
10.6 Survival. The provisions of Section 10 shall survive any
termination of this Agreement. Each Indemnified Party's rights under Section 10
shall not be deemed to have been waived or otherwise affected by such
Indemnified Party's waiver of the breach of any representation, warranty,
agreement or covenant contained in or made pursuant this Agreement, unless such
waiver expressly and in writing also waives any or all of the Indemnified
Party's right under Section 10.
SECTION 11
TERMINATION
11.1 Termination. The term of this Agreement shall begin upon the
Closing Date and, unless sooner terminated as hereinafter provided, shall end
upon the expiration of the last Patent to expire or, if later, the expiration of
any other patent resulting from the development process
-27-
31
contemplated hereby. Notwithstanding the foregoing, this Agreement may be
terminated as follows:
(1) Termination for Insolvency. If either Xxxxxxx or CIMA
(i) makes a general assignment for the benefit of creditors or becomes
insolvent; (ii) files an insolvency petition in bankruptcy; (iii)
petitions for or acquiesces in the appointment of any receiver, trustee
or similar officer to liquidate or conserve its business or any
substantial part of its assets; (iv) commences under the laws of any
jurisdiction any proceeding involving its insolvency, bankruptcy,
reorganization, adjustment of debt, dissolution, liquidation or any
other similar proceeding for the release of financially distressed
debtors; or (v) becomes a party to any proceeding or action of the type
described above in (iii) or (iv) and such proceeding or action remains
undismissed or unstayed for a period of more than 60 days, then the
other party may by written notice terminate this Agreement in its
entirety with immediate effect.
(2) Termination for Default. Xxxxxxx and CIMA each shall
have the right to terminate this Agreement for default upon the other's
failure to comply in any material respect with the terms and conditions
of this Agreement. At least 60 days prior to any such termination for
default, the party seeking to so terminate shall give the other written
notice of its intention to terminate this Agreement in accordance with
the provisions of this Section 11.1(b), which notice shall set forth
the default(s) which form the basis for such termination. If the
defaulting party fails to correct such default(s) within 60 days after
receipt of notification, then such party immediately may terminate this
Agreement. This Section 11.1(b) shall not be exclusive and shall not be
in lieu of any other remedies available to a party hereto for any
default hereunder on the part of the other party.
(3) Continuing Obligations. Termination of this Agreement
for any reason shall not relieve the parties of any obligation accruing
prior thereto with respect to the Product and any ongoing obligations
hereunder with respect to the remaining Product and shall be without
prejudice to the rights and remedies of either party with respect to
any antecedent breach of the provisions of this Agreement. Without
limiting the generality of the foregoing, no termination of this
Agreement, whether by lapse of time or otherwise, shall serve to
terminate the obligations of the parties hereto under Sections 5.8,
9.3, 9.4, 9.5, 9.7, 9.9(a), 10, 11.1(c) and 12 hereof, and such
obligations shall survive any such termination.
SECTION 12
MISCELLANEOUS
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12.1 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, however, that neither CIMA nor
Xxxxxxx may assign any of its rights, duties or obligations hereunder without
the prior written consent of the other, which consent shall not be unreasonably
withheld, except that no prior written consent shall be required in the event
that a third party acquires substantially all of the assets or outstanding
shares of, or merges with, Xxxxxxx or CIMA, as the case may be.
12.2 Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand or facsimile and confirmed in writing, or
mailed first class, postage prepaid, by registered or certified mail, return
receipt requested (mailed notices and notices sent by facsimile shall be deemed
to have been given on the date received) as follows:
If to CIMA, as follows:
CIMA LABS INC.
00000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: President and CEO
If to Xxxxxxx, as follows:
Xxxxxxx Pharma, Inc.
0000 Xxxx Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: General Counsel
or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 12.2 by any party hereto to the other
party.
12.3 Waiver; Remedies. Any term or provision of this Agreement may
be waived at any time by the party entitled to the benefit thereof by a written
instrument executed by such party. No delay on the part of CIMA or Schwarz in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of either CIMA or Schwarz of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. The
indemnification provided in Section 10 shall be the sole remedy available
-29-
33
for any Damages arising out of or in connection with this Agreement except for
any rights or remedies which the parties hereto may otherwise have in equity.
12.4 Survival of Representations. Each of the representations and
warranties made in this Agreement shall continue for the term of this Agreement
and shall thereafter be extinguished.
12.5 Independent Contractors. The parties hereto are independent
contractors and nothing contained in this Agreement shall be deemed to create
the relationship of partners, joint venturers, or of principal and agent,
franchisor and franchisee, or of any association or relationship between the
parties other than as expressly provided in this Agreement. Xxxxxxx acknowledges
that it does not have, and Xxxxxxx shall not make representations to any third
party, either directly or indirectly, indicating that Xxxxxxx has any authority
to act for or on behalf of CIMA or to obligate CIMA in any way whatsoever. CIMA
acknowledges that it does not have, and it shall not make any representations to
any third party, either directly or indirectly, indicating that it has any
authority to act for or on behalf of Xxxxxxx or to obligate Xxxxxxx in any way
whatsoever.
12.6 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements or understandings of the parties relating
thereto.
12.7 Amendment. This Agreement may be modified or amended only by
written agreement of the parties hereto.
12.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute a single instrument.
12.9 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of New York excluding any choice of law
rules which may direct the application of the law of another state.
12.10 Arbitration. Any dispute, controversy or claim arising out of
or in connection with this Agreement shall be determined and settled by
arbitration in New York, New York, pursuant to the Rules of Arbitration then in
effect of the American Arbitration Association. Any award rendered shall be
final and conclusive upon the parties and a judgment thereon may be entered in a
court having competent jurisdiction. Any arbitration hereunder shall be (i)
submitted to an arbitration tribunal comprised of three (3) independent members
knowledgeable in the pharmaceutical industry, one of whom shall be selected by
Schwarz, one of whom shall be selected by CIMA, and one of whom shall be
selected by the other two arbitrators; (ii) allow for the parties to request
discovery pursuant to the rules then in effect under the Federal Rules of Civil
Procedure for a period not to exceed 90 days; and (iii) require the award to be
accompanied
-30-
34
by findings of fact and a statement of reasons for the decision. Each party
shall bear its own costs and expenses, including attorney's fees incurred in any
dispute which is determined and/or settled by arbitration pursuant to this
Section. Except where clearly prevented by the area in dispute, both parties
agree to continue performing their respective obligations under this Agreement
while the dispute is being resolved. Arbitration shall not prevent any party
from seeking injunctive relief where such remedy is an appropriate form of
remedy under the circumstances.
12.11 Captions. All section titles or captions contained in this
Agreement, in any Schedule referred to herein or in any Exhibit annexed hereto,
and the table of contents, if any, to this Agreement are for convenience only,
shall not be deemed a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement.
12.12 No Third-Party Rights. No provision of this Agreement shall be
deemed or construed in any way to result in the creation of any rights or
obligation in any Person not a party or not affiliated with a party to this
Agreement.
12.13 Severability. If any provision of this Agreement is found or
declared to be invalid or unenforceable by any court or other competent
authority having jurisdiction, such finding or declaration shall not invalidate
any other provision hereof, and this Agreement shall thereafter continue in full
force and effect.
12.14 Attachments. All Schedules, Exhibits and other attachments to
this Agreement are by this reference incorporated herein and made a part of this
Agreement.
12.15 Force Majeure. In the event that a party is prevented from
carrying out its obligations under this Agreement by an event of Force Majeure,
then such party's performance of its obligations under this Agreement shall be
excused during the period of such event and for a subsequent reasonable period
of recovery.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered on the day and year first above written.
CIMA LABS INC.
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx Ph.D.
Title: President and CEO
XXXXXXX PHARMA, INC.
By: /s/ Xxx Xxxxxxxx
-------------------------------
Name: Xxx Xxxxxxxx
Title: President and COO
36
Schedule 2.4 to
Development License
and Supply Agreement
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] EXTENDED
RELEASE TERM SHEET
I. Royalties: Tiers of [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***], with
Annual Net
Sales thresholds TBD
II. COGs: TBD
III. Product Specifications: TBD
IV. Development Schedule and Performance Milestones:
COMPLETION DATE FOR
DEVELOPMENT ACTIVITY PHASES DEVELOPMENT PHASE
1) Prototype Development TBD
Extended release coating & formulation development - Analytical methods
development - Methods validation - Excipient compatibility - Final prototype:
Initiation of accelerated stability study, and a room temperature stability
study.
2) Stability Data TBD
Acceptable 3 month stability data on prototype batch
3) Process Optimization TBD
Scale-up, demonstration batch stability, and process validation (finished
product and coated active) - Initial scale-up activities - Full scale
experimental batch - Demonstration batch - Initiation and acceptable 3 month
data from demonstration batch, blister package stability studies as per agreed
upon stability protocol - Process Validation
4) Process Validation stability TBD
Initiation of blister stability studies on process validation batches (total 3
studies) as per agreed upon stability protocol
Milestone Payments
(a) Xxxxxxx shall pay to CIMA each of the milestone
payments set forth below (each a "Milestone Payment") promptly after CIMA
demonstrates the Satisfactory Completion (as defined below) of the research and
development milestone (each a "Milestone") set forth opposite such Milestone
Payment:
Earned upon signing but payable ###
90 days after Effective Date
Completion of Development
37
Activity Phases 1 & 2 ###
Completion of Development of
Phase 3 (Product acceptable for Launch) ###
### - [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
(b) Promptly after the completion of each Milestone, CIMA
shall notify Xxxxxxx of such completion and shall provide Xxxxxxx sufficient
written materials to allow Xxxxxxx to evaluate whether or not such Milestone has
been Satisfactorily Completed. Unless CIMA satisfactorily completes a Milestone
within 60 days after the deadline therefor, the underlying Milestone shall have
been deemed not to be Satisfactorily Completed for purposes of paragraph (a)
above and Xxxxxxx'x obligation to make the related Milestone Payment shall
terminate and be deemed waived by CIMA. For purposes of this term sheet and as
to any Milestone described herein, "Satisfactory Completion" shall mean the
completion of such Milestone in a manner which is (i) appropriate to support the
commercialization of the Product and (ii) consistent with this Agreement.
38
Schedule 2.5 to
Development License
and Supply Agreement
Minimum Annual Net Sales Targets
Subject to Section 4.1(c), Xxxxxxx shall endeavor to meet or exceed the minimum
Annual Net Sales targets set forth below. References to Years below are to full
calendar years after the Year in which the Product is Launched.
Year Minimum Annual Net Sales Target
---- -------------------------------
Year 1 ###
Year 2 ###
Year 3 ###
Year 4 ###
Year 5 ###
### - [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
39
Schedule 3.1 to
Development License
and Supply Agreement
Development Schedule
------------------------------------------------------------------- -----------------------------
COMPLETION DATE FOR
DEVELOPMENT ACTIVITY PHASES DEVELOPMENT PHASE*
------------------------------------------------------------------- -----------------------------
1) Prototype Development ###
------------------------------------------------------------------- -----------------------------
- Formulation development**
- Analytical methods development
- Methods validation
- Excipient compatibility
- Final prototype:
Initiation of accelerated stability, and a room
temperature bulk stability study.
------------------------------------------------------------------- -----------------------------
2) Acceptable 3 month stability data on prototype batch in ###
blisters and bulk
------------------------------------------------------------------- -----------------------------
3) Process optimization, scale-up, demonstration batch ###
stability and process validation
------------------------------------------------------------------- -----------------------------
- Initial scale-up activities
- Full scale experimental batch
- Demonstration batch
- Initiation and acceptable 3 month data from
demonstration batch and blister package stability
studies as per mutually agreed upon stability protocol
- Process Validation
------------------------------------------------------------------- -----------------------------
4) Process Validation Stability ###
- Initiation of blister stability studies on process
validation batches (total 3 studies) as per mutually
agreed upon stability protocol
------------------------------------------------------------------- -----------------------------
### - [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
*These are the completion dates if direct blending or geometric dilution
techniques yield acceptable tablet content uniformity. Otherwise, 8 additional
weeks will be added to the completion date schedules of Development Activity
Phases 1 and 2, and 4 weeks shall be added to the completion date schedule of
Development Xxxxxxxx Xxxxx 0.
** Xxxxxxx shall increase the applicable milestone referenced in Schedule
4.1(b) by [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] if any process
other than milling or geometric dilution are needed to meet the CU
requirements.
40
Schedule 4.1(a)
to Development License and
Supply Agreement
Royalty Rates
In any Year, Xxxxxxx shall pay to CIMA a percentage of Annual Net Sales,
if any, actually recorded during such Year, as indicated on the following
schedule.
----------------------------------------- ----------------------------------
ANNUAL NET SALES ROYALTY
----------------------------------------- ----------------------------------
Less than $4,000,000 ###
----------------------------------------- ----------------------------------
Greater than $4,000,000, ###
Less than $15,000,000
----------------------------------------- ----------------------------------
Greater than $15,000,000 ###
----------------------------------------- ----------------------------------
### - [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Xxxxxxx shall pay the royalty payment due in respect of any Quarter (a
"Quarterly Installment") by remitting a check, together with the report required
by Section 4.3, to CIMA within 60 days after the end of each Quarter during such
Year. For purposes of determining the royalty payment pursuant to this Schedule
4.1(a) the amount of each Quarterly Installment shall be calculated based on
actual Net Sales recorded during such Quarter.
41
Schedule 4.1(b)
to Development, License
and Supply Agreement
Milestone Payments
(a) Subject to paragraph (b) of this Schedule 4.1(b), Xxxxxxx shall pay to
CIMA any of the milestone payments set forth below (each a "Milestone Payment")
promptly after CIMA demonstrates the Satisfactory Completion (as defined below)
of the research and development milestone (each a "Milestone") set forth
opposite such Milestone Payment:
Earned on signing and payable within 90 days of the date hereof ###
Timely and satisfactory completion of Development Activity ### *
Phases 1 & 2
###
Timely and satisfactory completion of Development Activity
Phase 3 (Product acceptable for Launch)
* Xxxxxxx shall increase the applicable milestone referenced in
Schedule 4.1(b) by ### if any process other than milling or geometric
dilution are needed to meet the CU requirements.
### - [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
(b) Promptly after the completion of each Milestone, CIMA shall notify
Xxxxxxx of such completion and shall provide Xxxxxxx sufficient written
materials (a "Milestone Notice") to allow Xxxxxxx to evaluate whether or not
such Milestone has been Satisfactorily Completed. Unless CIMA satisfactorily
completes a Milestone within 60 days after the deadline therefor, as stated in
Schedule 3.1, the underlying Milestone shall have been deemed not to be
Satisfactorily Completed for purposes of paragraph (a) above and Xxxxxxx'x
obligation to make the related Milestone Payment shall terminate and be deemed
waived by CIMA. As to any Milestone, "Satisfactory Completion" shall mean the
completion of such Milestone in a manner which is (i) appropriate to support the
commercialization of the Product and (ii) consistent with this Agreement.
42
Schedule 5.1(b)
to Development, License
and Supply Agreement
Xxxxxxx Purchase Order
[See Attached]
43
Schedule 5.4(d) to
Development, License
and Supply Agreement
Quality Assurance Addendum
[To be mutually agreed by parties on
or prior to October 31, 2000]
44
Schedule 5.3
to Development, License
and Supply Agreement
Cost of Goods
Xxxxxxx shall pay to CIMA the amounts indicated on the following schedule
in respect of CIMA's manufacturing obligations hereunder. Such payment shall be
made in accordance with Section 5.6.
SAMPLES
-------------------------------------------- --------------------------------------------
Volumes
-------------------------------------------- --------------------------------------------
20MM max.
per year
-------------------------------------------- ---------------------- ---------------------
costs per tablet ###*
-------------------------------------------- ---------------------- ---------------------
PLACEBOS
-------------------------------------------- --------------------------------------------
Volumes
-------------------------------------------- --------------------------------------------
Bulked, cost per tablet ###
-------------------------------------------- --------------------------------------------
TRADE
-------------------------------------------- --------------------------------------------
Volumes
-------------------------------------------- --------------------------------------------
Configuration <30MM >30MM
-------------------------------------------- ---------------------- ---------------------
Bulked, cost per tablet ### ###
-------------------------------------------- ---------------------- ---------------------
5 cards of 6 cartoned, cost per ### ###
tablet
-------------------------------------------- ---------------------- ---------------------
Bottles of 100, cost per tablet ** ### ###
-------------------------------------------- ---------------------- ---------------------
### - [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
* To be [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] per tablet for the initial 6,132,000
tablets.
** Complete finished package, only upon installation and
validation of bottling line at CIMA's facility.
45
Schedules 9.9(a)(i) and (ii)
to Development, License
and Supply Agreement
COMPETITIVE PRODUCTS UNDER SECTION 9.9(a)(i)
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
COMPETITIVE PRODUCTS UNDER SECTION 9.9(a)(ii)
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
