Exhibit 10.13
MARKETING AND DEVELOPMENT COLLABORATION AGREEMENT
THIS MARKETING AND DEVELOPMENT COLLABORATION AGREEMENT (this "Agreement")
is dated this 10th day of June, 1999, between CEPHALON, INC., a company
organized and existing under the laws of the State of Delaware, having offices
at 000 Xxxxxxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000-0000 (hereinafter
referred to as "Cephalon") and XXXXXX LABORATORIES INC., a company organized and
existing under the laws of the State of Delaware, having offices at 000 Xxxxxx
Xxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 (hereinafter referred to as "Abbott").
WITNESSETH:
WHEREAS, Abbott licenses, manufactures and markets the pharmaceutical
product N-(4,4-di(3-methyl-2-thienyl)but-3-en-1-yl)nipecotic acid, which is
more commonly known in the United States as Gabitril(R) (the "Product");
WHEREAS, Abbott desires to collaborate with another company on marketing
and clinical development activities in the Field (as defined in Section 1.15)
related to the Product; and
WHEREAS, Abbott and Cephalon wish to enter into such an agreement for the
Product throughout the Territory (as defined in Section 1.33).
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein, both parties to this Agreement agree as follows:
ARTICLE 1- DEFINITIONS
1.1 "Abbott Detail," "Abbott Details" or "Abbott Detailing" means or refers to
a sales presentation in the Territory by an Abbott Representative during
which the Abbott Representative promotes the Product to an individual,
anti-epileptic prescribing physician identified on the target list approved
by the Collaboration Committee, which sales presentation must be performed
in accordance with the terms and conditions specified herein.
1.2 "Abbott Representative" means an individual:
(i) who is regularly employed by Abbott on a full-time basis as a member
of its sales force; and
(ii) who is qualified and has been trained by Abbott to make sales
presentations for Xxxxxx'x pharmaceutical products to physicians and
who is qualified and has been trained by Abbott, in particular, to
make sales presentations for the Product (as contemplated by Section
4.4(a)).
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1.3 "Affiliate" means, with respect to each party, any legal entity during the
term of this Agreement:
(i) at least fifty percent (50%) of whose issued voting securities or
assets are owned or controlled, directly or indirectly, by said party;
(ii) which owns or controls, directly or indirectly, at least fifty percent
(50%) of the issued voting securities or assets of said party; or
(iii) which is owned or controlled, directly or indirectly, by any of the
entities described in (i) or (ii) above, where such ownership or
control is defined as owning or controlling at least fifty percent
(50%) or more of the issued voting securities or assets of such
entity.
Notwithstanding the foregoing, for purposes of this Agreement, TAP Holdings
Inc. and its subsidiary companies shall not be deemed an "Affiliate" of
Abbott.
1.4 "Cephalon Detail," "Cephalon Details" or "Cephalon Detailing" means or
refers to a sales presentation in the Territory by a Cephalon
Representative during which the Cephalon Representative promotes the
Product to an individual, anti-epileptic prescribing physician identified
on the target list primarily made up of neurologists and approved by the
Collaboration Committee, which sales presentation must be performed in
accordance with the terms and conditions specified herein.
1.5 "Cephalon Detail Launch Date" means the date of the commencement of the
Cephalon Detailing effort as described in Section 3.1.
1.6 "Cephalon Promotional Launch Date" means the date of the commencement of
Cephalon's marketing and promotional duties under this Agreement, i.e., on
or before July 1, 1999.
1.7 "Cephalon Representative" means an individual:
(i) who is regularly employed by Cephalon on a full-time basis as a member
of its sales force; and
(ii) who is qualified and has been trained by Cephalon to make sales
presentations for Cephalon's pharmaceutical products to physicians and
who is qualified and has been trained by Cephalon, in particular, to
make sales presentations for the Product (as contemplated by Section
3.1).
1.8 "Clinical Study Plan" shall mean that part of the Collaboration Plan
developed by the Collaboration Committee for the conduct of clinical
studies by the parties hereunder.
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1.9 [* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
1.10 "Collaboration Committee" means the committee established by Cephalon and
Abbott to oversee and manage the co-promotion, marketing and further
development of the Product.
1.11 "Collaboration Period" means the period which is the shorter of: (i) the
first through tenth Sales Years; or (ii) the actual duration of this
Agreement.
1.12 "Collaboration Plan" shall have the meaning set forth in Section 3.12.
1.13 "Expiration Date" means April 23, 2008, the date the patent for the Product
(U.S. 5,010,090) expires, as such date may be extended pursuant to the
terms of Section 10.1(b) hereof
1.14 "FDA" means the Food and Drug Administration or any successor entity
thereto.
1.15 [* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
1.16 "Net Sales" means gross sales of the Product (as set forth on the invoice
for such Product) in the Territory for use in the Territory in a given
Sales Year ("Annual Net Sales"), Sales Quarter ("Quarterly Net Sales") or
such other time period by Abbott, any Abbott Affiliate or any Abbott
licensee, to unrelated third parties, in arm's length transactions,
including but not limited to, pharmaceutical wholesalers, pharmacies,
hospitals or dispensing physicians, less any of the following charges or
expenses that are incurred in connection with gross sales of the Product
during the Term:
(i) discounts, including cash discounts, customary xxxx allowances or
rebates actually taken or allowed, governmental rebates, charge-backs,
and group purchasing management fees for formulary access;
(ii) credits or allowances given or made for rejection, recall or return
(including return reserves) of previously sold Product actually taken
or allowed;
(iii) any tax or government charge (including any tax such as a value added
or similar tax or government charge) to the extent it appears on
Product invoices (other than an income tax levied on the sale,
transportation or delivery of Product); and
(iv) freight, insurance and duties on shipments of Product.
The parties agree that the only discounts, allowances or rebates permitted
to be charged against "Net Sales" hereunder shall be those that are
extended by Abbott in good faith and consistent with discounts, allowances
or rebates extended by Abbott on other Abbott
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products in the ordinary course of business. Abbott agrees that it will not sell
the Product in a bundle arrangement with other Abbott products without the prior
written approval of the Collaboration Committee.
For purposes of determining the amount of sales of Gabitril(R) outside of the
Field for a given period,
(i) the number of prescriptions as measured by IMS data for Gabitril(R)
written outside the Field for such period shall be divided by the
total number of prescriptions for Gabitril(R) written for such period
inside and outside the Field,
(ii) the quotient thereof shall be multiplied by gross sales of Gabitril(R)
minus charges and expenses permitted to be deducted from gross sales
under this Section 1.16; and
(iii) the product thereof shall be the sales of Gabitril(R) outside the
Field for the given period.
In the event the invoice includes products other than the Product, then, if
possible, such charges and expenses shall be allocated directly to the product
or products to which they relate, including the Product. In the event any
charges or expenses cannot be attributed to a specific product, including the
Product, then such charges and expenses shall be allocated on a pro-rata basis,
based on the dollar value of such products, including the Product. Any sales
among: (a) Abbott, (b) Abbott Affiliates, or (c) Abbott licensees, shall not be
included in the definition of "Net Sales."
Sales of new dosage strengths of Product shall not be included in "Net Sales"
for the ninety (90) day period following the first day of commercial shipment of
such new dosage strengths of Product by Abbott, but such sales of new dosage
strengths of Product shall be added in proportionally equal amounts to "Net
Sales" in the four (4) Sales Quarters following the end of the ninety (90) day
period, with any returns of such new dosage strengths of Product deducted from
gross sales (i) as and when received; or (ii) after the end of the ninety (90)
day period, whichever is later.
Moreover, "Net Sales" for the first Sales Year shall not include sales of
Product in the first Sales Year due to inventory loading by customers in
anticipation of the change in century ("Y2K Excess Inventory"), but the amount
of such sales shall be added to gross sales for the first Sales Quarter of the
second Sales Year. Y2K Excess Inventory shall be measured by comparing IMS
pipeline audit data related to average monthly wholesaler/chain warehouse
inventories for July, August and September, 1999, to the inventory for December
1999. This comparison shall be calculated as follows:
Y2K Excess Inventory = Actual December 1999 Month of Supply (MOS) minus
Derived Non-Y2K Excess Inventory.
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Derived Non-Y2K Excess
Inventory= Actual December 1999 MOS times
(Average MOS for July, August and
September 1999 divided by Actual
December 1999 MOS)
For example, Y2K Excess Inventory would be calculated as follows, assuming
Actual December 1999 MOS of $1,500,000 and Average MOS for July, August and
September, 1999 of $1,000,000:
Y2K Excess Inventory = $1,500,000 minus ($1,500,000 times [$1,000,000 divided by
$1,500,000] = $500,000.
As set forth in this example, Y2K Excess Inventory of $500,000 would be deducted
from the calculation of "Net Sales" for the first Sales Year and such amount
would then be added to "Net Sales" for the first Sales Quarter of the second
Sales Year.
1.17 "Patent" means United States Patent Number 5,010,090 as it relates to
N-(4,4-di(3-methyl-2-thienyl)but-3-en-1-yl)nipecotic acid licensed to
Xxxxxx Laboratories and issued on April 23, 1991, the expiration date of
which is, as of the date hereof, April 23, 2008, subject to Section 10.1(b)
hereof.
1.18 "PhRMA Code" means the Pharmaceutical Manufacturers Association's Code of
Pharmaceutical Marketing Practices, as amended from time to time.
1.19 "Primary Detail" means:
(a) a Cephalon Detail in which:
(i) the Product is the first product presented during a sales
presentation; and
(ii) more than fifty percent (50%) of the time spent during such sales
presentation is spent on the Product.
1.20 "Product" means, from the date hereof up until such time as the FDA
approves indications in addition to epilepsy, additional dosage forms or
formulations (including any extended release formulations), any
pharmaceutical product or products:
(i) for human use only;
(ii) containing N-(4,4-di(3-methyl-2-thienyl)but-3-en-l-yl)nipecotic acid
as the sole therapeutically active ingredient;
(iii) only in the oral dosage form(s) of tablets; and
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(iv) prescribed in the Field.
In the event the FDA approves indications in addition to epilepsy,
additional dosage forms or formulations (including any extended release
formulations) of the Product in the Field for human use, such indications,
dosage forms or formulations shall be included in the definition of
"Product" only if (A) they were the subject of the collaborative clinical
activities set forth in Section 3.14 hereof that were the subject of a
Supplemental New Drug Application filed with FDA for indications within the
Field; or (B) the parties have negotiated an amendment to this Agreement as
provided in Section 3.15 hereof providing for such additional
indication(s), dosage form(s) or formulation(s) to be included in the
definition of "Product" and setting forth such additional financial and
other terms that may apply to the collaborative marketing and clinical
development of such additional indication(s), dosage form(s) or
formulation(s). If neither (A) nor (B) above is applicable, the additional
indication(s), dosage form(s) or formulation(s) shall be excluded from the
definition of "Product."
1.21 "Promotional Budget" means the budget prepared by each party and submitted
to the Collaboration Committee annually setting forth in sufficient detail
the proposed allocation of such party's share of the Promotional Expenses
required to be expended by such party pursuant to Section 3.12.
1.22 "Promotional Expenses" means those types of expenses described on Exhibit
1.22 that are related to the promotion and marketing efforts of a party
with regard to the Product and which are allowed to be charged against a
party's Promotional Budget.
1.23 "Promotional Materials" means all written, printed or graphic materials,
brochures, sales training materials, sales aids, detail aids and other
promotional items related to the Product, including electronic or internet
applications thereof.
1.24 "Reasonable Commercial Efforts" means efforts which are consistent with
those utilized by a party for its own internally developed or in-licensed
pharmaceutical products with similar market potential.
1.25 "Reminder Detail" means an Abbott Detail in which the Product is emphasized
after the primary detail by the Abbott Representative either as the second
or third emphasized product during the sales presentation.
1.26 "Residual Periods" mean the two 12-month periods following the expiration
or termination of the Collaboration Period.
1.27 "Sales Quarter" means a period of three (3) consecutive calendar months
during the Term, commencing on July 1, 1999, with all subsequent Sales
Quarters occurring each successive three (3) month period thereafter.
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1.28 "Sales Year" means (i) with respect to the first Sales Year, the period
January 1, 1999 - December 31, 1999; (ii) with respect to the second
through ninth Sales Years (2000-2007), a period of twelve (12) consecutive
calendar months commencing January 1st of each calendar year; (iii) with
respect to the tenth Sales Year, the period January 1, 2008 - April 23,
2008; and (iv) each of the two - twelve (12) consecutive calendar month
periods which comprise the Residual Periods.
1.29 "Sample Pack" means a package of Product used for sampling to physicians,
as further described in Section 3.6.
1.30 "Sampling Act" means the Prescription Drug Marketing Act of 1987, as
amended from time to time, and any regulations promulgated thereunder.
1.31 "Secondary Detail" means:
(a) a Cephalon Detail sales presentation in which:
(i) the Product is the second product presented; and
(ii) the second most amount of time spent during such sales
presentation is spent on the Product.
1.32 "Term" means the Collaboration Period and the Residual Periods.
1.33 "Territory" means the fifty (50) states of the United States of America and
the District of Columbia.
1.34 "Trademarks" means the trademark for the Product, Gabitril(R), and the
trademark for Filmtab(R), registered to Abbott in the Territory, and any
new trademark applied for by, or registered to Abbott in the Territory for
the Product.
ARTICLE 2- COLLABORATION
2.1 (a) Abbott and Cephalon wish to structure and implement a marketing and
clinical development collaboration that will capitalize on the
respective strengths of their organizations and effectively drive the
commercial success of the Product in the Territory. Each party shall
exercise Reasonable Commercial Efforts and operate in good faith to
undertake all matters within the scope of that party's responsibility
in support of the Product and, more specifically, to maximize its
commercial potential during the Collaboration Period. In this regard,
and without limiting the foregoing, Abbott shall be responsible for
all matters relating to manufacturing, supply, storage, distribution,
customer service, medical and regulatory affairs, except that nothing
contained in this Section 2.1(a) shall obligate Abbott with respect to
Sample Packs, the obligations for which are described in Section 3.6
hereof. In considering matters, whether in its capacity as a member of
the
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Collaboration Committee or otherwise, representatives of the parties
shall act in good faith and deal fairly and equitably with each other,
and further shall render decisions and take actions that in each case
represent their best judgment as to how to best maximize the
commercial potential and the underlying asset value of the Product.
Notwithstanding the foregoing, Abbott shall be entitled to expend such
efforts and funds that it deems necessary with regard to Depakote(R)
and any other Abbott products in order to maximize the commercial
potential of Depakote(R) and such other Abbott products.
(b) Appointment. As set forth in this Agreement, Abbott hereby appoints
Cephalon for the Collaboration Period to co-promote, market and
provide clinical development support for the Product with Abbott in
the Field in the Territory. Abbott shall not appoint any third party
to co-promote, market or provide clinical development support (except
for clinical research organizations conducting such clinical
activities) for the Product in the Field in the Territory other than
Cephalon. Cephalon's duties as a collaborator in the marketing and
clinical development of the Product are more specifically described
herein.
ARTICLE 3
3.1 Cephalon Detailing Effort.
(a) General. During the Collaboration Period, Cephalon, by and through the
Cephalon Representatives, shall perform Cephalon Details of the
Product in accordance with the terms of this Agreement, including
adherence to the Collaboration Plan. Cephalon shall perform Cephalon
Details of the Product only in strict accordance with: (i) the PhRMA
Code; (ii) the approved Product labeling; and (iii) the applicable
Federal, state and local laws and regulations of the Territory,
including, but not limited to, the Sampling Act. Cephalon shall only
perform Cephalon Details to individual, anti-epileptic prescribing
physicians in the Field identified on the target list primarily made
up of neurologists and approved by the Collaboration Committee, unless
agreed otherwise with Abbott by written amendment to the Collaboration
Plan.
(b) Number of Details. Commencing on September 15, 1999, Cephalon, by and
through the Cephalon Representatives, shall perform the following
numbers of Primary and Secondary Details of the Product within the
Territory:
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[* The confidential material contained herein has been omitted and has
been separately filed with the Commission].
(c) Physician Observations. Cephalon shall advise Abbott from time to time
of the Cephalon Representatives' observations of physicians' reactions
to the format of Cephalon Details. This shall be accomplished through
the use of Cephalon Representative and Abbott Representative focus
groups, surveys or as otherwise mutually agreed by the parties.
3.2 Variance In Details Per Sales Year/Quarter.
(a) Cephalon shall perform the required number of annual Cephalon Details
in a proportionate manner so that beginning in the second Sales Year,
the number of Cephalon Primary and Secondary Details performed in each
Sales Quarter is [* The confidential material contained herein has
been omitted and has been separately filed with the Commission.]
respectively, with a permitted variance per Sales Quarter of minus ten
percent (- 10%) (except for the 1999 Cephalon Detailing Period and the
first Sales Quarter of the second Sales Year, where the permitted
variance shall be based on [* The confidential material contained
herein has been omitted and has been separately filed with the
Commission.] Primary Details and [* The confidential material
contained herein has been omitted and has been separately filed with
the Commission.] Secondary Details). Except as set forth in Section
3.2(b) below, the permitted variance per Sales Quarter shall not
affect Cephalon's overall obligation to perform the minimum number of
Cephalon Details per Sales Year as required under Section 3.1(b)
above.
(b) In the event Cephalon fails to perform the required number of Cephalon
Details in a given Sales Year by a variance of minus ten percent(-10%)
or less (the "Detail Variance"), then Cephalon shall be entitled
to make up the Detail Variance by performing all of the Detail
Variance in the first Sales Quarter of the subsequent Sales Year, in
addition to the Cephalon Details that Cephalon is required to perform
in that Sales Quarter pursuant to Section 3.1(b). If Cephalon performs
all of the Detail Variance in the subsequent first Sales Quarter (it
being agreed that the number of Cephalon Details performed in such
first Sales Quarter shall be counted first toward the required number
of Cephalon Details for that Sales Quarter, and second toward the
Detail Variance, then Abbott shall pay to Cephalon within forty-five
(45) days of the end of such first Sales Quarter the amount of
compensation withheld by Abbott for the prior Sales Year pursuant to
the provisions of Section 4.1. In the event Cephalon fails to perform
all of the
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Detail Variance as aforesaid, then the reduction in Cephalon's
compensation pursuant to the provisions of Section 4.1 shall stand, no
payment for any of such Detail Variance shall be due to Cephalon, and
Cephalon shall have no further obligation to make up such Detail
Variance. For purposes of clarification and explanation, Cephalon
shall not be entitled to any variance in the number of Cephalon
Details in the first Sales Quarter of a Sales Year when it is
attempting to make up a Detail Variance for the previous Sales Year.
Furthermore, this provision entitling Cephalon to make up a Detail
Variance may only be invoked once by Cephalon in any consecutive
period of four (4) Sales Years. For example, if Cephalon invokes its
right in the third Sales Year to make up a Detail Variance that
occurred in the second Sales Year, Cephalon shall not be permitted to
invoke this right again until at least the seventh Sales Year or
thereafter, in order to make up the Detail Variance for the preceding
Sales Year.
3.3 Cephalon Representative Training. Cephalon shall, on an on-going basis, and
at Cephalon's expense, train and supervise the Cephalon Representatives in
the Cephalon Detailing of the Product, which training shall include adverse
event reporting in a manner reasonably acceptable to Abbott. Cephalon
agrees that the composition of the Cephalon Representative sales force is
an important and material element of its promotional effort hereunder, and
that, beginning in the second Sales Year, Cephalon shall ensure that at
least fifty percent (50%) of Cephalon Representatives promoting the Product
are Cephalon's longest-tenured Cephalon Representatives. At the beginning
of the Collaboration Period, Abbott shall provide to Cephalon, at no cost
to Cephalon, Xxxxxx'x existing sales force training materials for use by
Cephalon in its initial sales training activities. In the event that such
training materials need to be reprinted, Abbott agrees to reprint such
materials and to sell them to Cephalon, at Xxxxxx'x cost of reproduction,
as an allowable expense against Cephalon's Promotional Budget. Abbott shall
consult with Cephalon regarding the appropriate levels of sales force
training materials. During the first and second Sales Years, Abbott agrees
to provide Cephalon with reasonable access to Xxxxxx'x sales trainers,
sales force personnel and in-house personnel, such as scientists and
product managers, as their schedules may permit, to consult with Cephalon
on its sales training activities. Cephalon agrees that the Cephalon
Representatives shall not negatively position Depakote(R) or any other
current or future Abbott epilepsy product in any oral presentation or
written sales force training materials relating to the Product.
3.4 Cephalon Representatives' Incentive Compensation. For the Collaboration
Period, Cephalon, at its expense, shall award incentive compensation,
bonuses or prizes to Cephalon Representatives for achieving goals for
volume of sales generated for the Product in the sales territory of such
Cephalon Representative. [*The confidential material herein has been
omitted and has been separately filed with the Commission.]
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Pursuant to Section 3.7(c), throughout the Collaboration Period, Cephalon
shall keep Abbott informed with respect to Cephalon's current incentive
compensation plan for the Product. Pursuant to Section 4.5(b), Abbott shall
supply certain sales information to aid Cephalon in the determination of
incentive compensation due to Cephalon Representatives and related to the
Product.
3.5 Promotional Materials and Promotional Practices.
(a) Development. Throughout the Collaboration Period, Abbott and Cephalon
shall collaborate by means of the Collaboration Committee on the
development of all Promotional Materials and promotional practices.
Any new Promotional Materials and promotional practices developed
hereunder must be approved in writing through the Xxxxxx Medical
Regulatory Review Process in accordance with Section 3.5(e) hereof.
Cephalon shall be responsible for ensuring that all final Promotional
Materials distributed in the Territory are exactly the same as the
Promotional Materials approved by Abbott in accordance with Section
3.5(e) hereof. All such Promotional Materials shall be sold to Abbott,
at Cephalon's cost of reproduction, for use by Abbott Representatives
who perform Abbott Detailing, to be expensed against Xxxxxx'x
Promotional Budget. Cephalon shall be solely responsible for the cost
of developing such Promotional Materials, which cost shall be
considered a Promotional Expense to be expensed against Cephalon's
Promotional Budget. Cephalon agrees that all Promotional Materials and
promotional practices developed by it shall not conflict with the
PhRMA Code, with any law or regulation of the Territory, nor with
Xxxxxx'x Operating Guidelines for Program Funding, a copy of which has
been provided to and reviewed by Cephalon. Cephalon further agrees
that its Promotional Materials and promotional practices shall not
negatively position Depakote(R) or any other current or future Abbott
epilepsy product in any oral presentation or Promotional Materials.
(b) Development Services. Cephalon agrees to consider contracting with
Abbott for the creative development of all Promotional Materials to be
developed by Cephalon hereunder, provided that any such decision
remains in Cephalon's sole discretion. In return for Cephalon's
consideration of Abbott, Abbott agrees that any bid submitted by it
for the creative development of such Promotional
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Materials shall be based on Xxxxxx'x cost, as if Abbott was providing
the development service to one of its internal divisions.
(c) Distribution. Cephalon Representatives shall distribute Promotional
Materials to anti-epileptic prescribing physicians in connection with
Cephalon Detailing. The parties shall consult with each other with
respect to the distribution of the Promotional Materials. Cephalon
Representatives shall not use any Promotional Materials other than the
Promotional Materials supplied by Abbott or such other Promotional
Materials developed by Cephalon and approved in writing by the
Collaboration Committee or designees of the Collaboration Committee
and by Abbott pursuant to Section 3.5(e) hereof.
(d) Electronic Programs. All Cephalon Promotional Materials that are
electronic or internet-based programs and that focus on the Product
must also be approved in writing by the Collaboration Committee and
approved in writing by Abbott through the Xxxxxx Medical Regulatory
Review Process described in Section 3.5(e) hereof Examples of such
programs include the promotional content of Cephalon's web site
related to Product and associated links to chat rooms, e-mail or
related medical sites.
(e) Xxxxxx'x Medical Regulatory Review Process. Abbott shall use
Reasonable Commercial Efforts to review the Promotional Materials in a
timeframe consistent with other Abbott products, but with the
understanding that Xxxxxx'x Medical Regulatory Review Process may take
approximately two (2) weeks from submission of Promotional Materials
and promotional practices to rendering of approval/disapproval of such
Promotional Materials and promotional practices by Xxxxxx'x Medical
Regulatory Review Process. In the event approval/disapproval is not
given within such two (2) week period, the parties agree to discuss
the reason for such delay. Notwithstanding anything herein to the
contrary, the only basis for disapproval of new Promotional Materials
or promotional practices shall be
(i) a good faith belief by Abbott that such Promotional Materials or
practices may violate any applicable law, regulation or guidance,
including but not limited to, those promulgated by the FDA;
and/or
(ii) a good faith belief by Abbott that the Promotional Materials are
not medically accurate. For any Promotional Materials or
practices which Abbott disapproves hereunder, Abbott shall
provide Cephalon with sufficient detailed information and/or
comments about the noted violation(s) of law, regulation,
guidance or medical accuracy, and the parties shall thereafter
engage in constructive discussions to enable Cephalon to make
corrections to the Promotional Materials or practices so that
they may be promptly resubmitted to Abbott for approval.
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(f) Submittal of Promotional Materials to FDA. Once Promotional Materials
have been approved in accordance with the foregoing provisions of this
Section 3.5, Cephalon shall supply Abbott with copies of such
Promotional Materials within forty-eight (48) hours of the time they
are submitted to Cephalon Representatives, to enable Abbott to submit
such Promotional Materials to the FDA.
(g) Physician Observations. Cephalon shall advise Abbott from time to time
of the Cephalon Representatives' observations of physicians' reactions
to Promotional Materials. This shall be accomplished through the use
of Cephalon Representative and Abbott Representative focus groups,
surveys or as otherwise mutually agreed by the parties.
(h) Cost. Where it is provided in this Agreement that an item will be
provided by one party to another at the providing party's cost, (i) in
the case of an item produced internally by a party, the parties agree
to set a specific transfer price for such item prior to placement of
the first order by the receiving party intended to cover all of the
providing party's internal costs, which transfer price shall be
subject to annual adjustment based upon changes to the relevant
Consumer Price Index applicable to such item, or based upon changes in
the cost to manufacture such item if the design or configuration of
the item is materially changed, in which case the transfer price shall
be re-set based upon the direction of the Collaboration Committee; and
(ii) in the case of an item procured by the providing party from a
third party vendor, the cost shall be a direct pass-through of the
amount paid by the providing party to the third party vendor, which
cost shall be evidenced by the invoice of the third party vendor.
3.6 Sample Packs.
(a) Supply and Distribution of Sample Packs. Commencing on August 25, 1999
and continuing thereafter during the Collaboration Period, Abbott will
sell to Cephalon, at Xxxxxx'x cost, Sample Packs for distribution to
Cephalon Representatives in accordance with the promotional program
approved by the Collaboration Committee and the procedures set forth
in Section 3.6(b) below. The cost of the Sample Packs as of the date
hereof is set forth in Exhibit 3.6 and is based upon Xxxxxx'x current
packaging of cases containing forty (40) cartons, with each carton
containing a 40 ct. bottle of 4 mg. tablets. The parties understand
that such cost is subject to change on an annual basis thereafter to
reflect changes in costs to Abbott to produce such Sample Packs,
whether by change in the cost of Xxxxxx'x standard development process
to produce Product, change in configuration of the Sample Packs, or
otherwise. Any change in the design or configuration of Sample Packs
during the Collaboration Period shall be subject to the approval of
the Collaboration Committee. All Sample Packs shall be delivered to
Cephalon F.O.B. Abbott facility, and the costs for them shall be
considered Promotional Expenses to be expensed against Cephalon's
Promotional Budget. Cephalon shall cause the Cephalon Representatives
to distribute Sample
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Packs in connection with the Cephalon Detailing of the Product and in
accordance with: (i) the PhRMA Code; and (ii) all applicable Federal,
state and local laws and regulations of the Territory, including, but
not limited to, the Sampling Act. No later than thirty (30) days after
the effective date of this Agreement, Abbott shall have been apprised
by Cephalon of Cephalon's detailed procedures for handling of Sample
Packs by Cephalon employees, which will include tracking of Sample
Packs delivered to and distributed by Cephalon Representatives, and
Abbott shall have the right to approve/disapprove of such procedures,
in Xxxxxx'x reasonable discretion. After accepting delivery from
Abbott, Cephalon shall be solely responsible for such storage,
tracking, accounting, distribution and handling of Sample Packs and
shall perform such activities in strict accordance with the PhRMA Code
and all applicable Federal, state and local laws and regulations of
the Territory, including, but not limited to, the Sampling Act. if
Cephalon is responsible for any declared violation of the Sampling
Act, or if in good xxxxx Xxxxxx reasonably believes that Cephalon has
violated the Sampling Act, Abbott shall have the right to cease
providing Sample Packs to Cephalon.
(b) Orders and Forecasts.
(i) Within thirty (30) days after the date of this Agreement,
Cephalon shall notify Abbott in writing of its delivery
requirements for Sample Packs and provide firm purchase orders
for a six (6) month period commencing August 25, 1999. Cephalon
shall also provide a forecast of its estimated delivery
requirements for an additional twelve (12) month period following
the initial six (6) month period. The twelve (12) month forecast
shall represent Cephalon's reasonable estimates, not firm orders,
to facilitate Xxxxxx'x capacity planning.
(ii) Thereafter, on or before the tenth (10th) day of each month
during the Collaboration Period, Cephalon shall provide Abbott
with an additional one (1) month firm purchase order to
supplement the existing five (5) month firm order period, thereby
establishing a new six (6) month firm order delivery requirements
period, and shall provide an updated forecast estimate for the
twelve (12) months succeeding such new six (6) month firm order
requirements period.
(iii) Abbott shall have the opportunity to comment upon each such
twelve (12) month forecast and shall advise Cephalon within three
(3) weeks of Xxxxxx'x receipt of any such Product forecast if
such forecast for a specified period exceeds Xxxxxx'x capacity
planning. Abbott shall use reasonable commercial efforts to
adjust its production capacity to accommodate such forecast, but
shall have no obligation to incur expense in the expansion or
purchase of production facilities or equipment in order to meet
such forecast.
-14-
(iv) Abbott operates its plants and schedules production in monthly
delivery buckets. Therefore, Cephalon's delivery date shall
indicate only the desired month and year of delivery. Abbott
shall use Reasonable Commercial Efforts to supply Cephalon with
Sample Packs in accordance with Cephalon's purchase orders
provided in accordance with this Section 3.6(b). Abbott agrees
to notify Cephalon as soon as reasonably practicable whenever
purchase order delivery dates cannot be met.
(v) Cephalon shall send purchase orders to:
Xxxxxx Laboratories
PPD Materials Management Dept. 507,
Building J23 0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
(c) Sample Pack Logos and Company Names. Until Xxxxxx'x existing stock of
Sample Packs is depleted, the labeling of the Sample Packs shall
contain only the Abbott company name and logo. As soon as reasonably
practicable thereafter, Abbott shall use Reasonable Commercial Efforts
to add the Cephalon company name and logo on the labeling of the
Sample Packs, the design for which shall be approved in advance by the
Collaboration Committee. Cephalon, or its designee reasonably
acceptable to Abbott, shall have the sole responsibility for storing
and distributing Sample Packs purchased by Cephalon for Cephalon
Representatives.
3.7 Cephalon Reports and Abbott Audit Rights.
(a) Details.
(i) Cephalon Report. Not later than thirty (30) days after the end of
each Sales Quarter, Cephalon shall supply Abbott with a report
containing:
(A) the actual number of Cephalon Details of the Product
performed during such Sales Quarter;
(B) a breakdown of the Cephalon sales territories (including
territory number) where such Cephalon Details were
performed;
(C) the Cephalon Representative number and territory alignment;
(D) types and names of physicians to whom Cephalon Details were
made, including ME number for each physician;
(E) percentage of Cephalon Details where Sample Packs were
distributed to physicians;
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(F) type of Cephalon Detail (i.e., Primary Detail or Secondary
Detail); and
(G) type and quantity of Sample Packs distributed to each
physician.
(ii) Audit Right. If Abbott determines, in its reasonable judgment,
that an audit is necessary to determine Cephalon's compliance
with the stated requirements of Sections 3.1 and 3.7, then Abbott
or its designee, provided such designee is an independent
certified public accountant reasonably acceptable to Cephalon and
bound by an obligation of confidentiality to Cephalon, shall have
the right to perform, at Xxxxxx'x expense, on at least fifteen
(15) days advance notice, an audit of Cephalon's relevant books
and records not more than once in any twelve (12) month period,
to determine Cephalon's compliance with Sections 3.1 and 3.7;
provided, however, Abbott must notify Cephalon of its intent to
exercise this audit right within six (6) months of receipt of
Cephalon's final report of Cephalon's Details for a Sales Year.
If Abbott has not notified Cephalon within such six (6) month
period, Xxxxxx'x audit right for such Sales Year shall terminate.
Notwithstanding the foregoing, if an audit discloses an
overstatement of five percent (5%) or more in the number of
Cephalon Details actually performed, then the cost for such audit
shall be paid by Cephalon and Xxxxxx'x twelve (12) month audit
right shall become a quarterly audit right, at Cephalon's
expense, for the succeeding three (3) Sales Quarters. Thereafter,
Abbott shall have a twelve (12) month audit right in accordance
with the first sentence of this paragraph, subject to such right
again reverting to a quarterly audit right in accordance with the
second sentence of this paragraph.
(b) Sales Force Report. In conjunction with the Cephalon Detail report
provided to Abbott pursuant to Section 3.7(a)(i), Cephalon shall
provide a statement of the number of Cephalon Representatives
performing Cephalon Details during such Sales Quarter.
(c) Incentive Compensation Plan.
(i) Report. Within thirty (30) days after preparation of its
incentive compensation plan for the Product and at least once
during the first Sales Quarter of each Sales Year of the
Collaboration Period, Cephalon shall provide Abbott with a copy
of Cephalon's current incentive compensation plan for the Product
for the Cephalon Sales Force. Cephalon shall consider any
comments to such incentive compensation plan made by Abbott,
provided that the design and content of the incentive
compensation plan shall be in Cephalon's sole discretion, subject
to Section 3.4. In addition, if Cephalon amends its incentive
compensation plan for the Product at any time during the
Collaboration Period, Cephalon
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shall notify Abbott of the proposed amendment at least thirty
(30) days prior to its proposed effective date in order to give
Abbott a reasonable time for comment prior to Cephalon's
implementation of such amendment.
(ii) Audit Right. Xxxxxx'x designee, provided it is bound by an
obligation of confidentiality to Cephalon and is an independent
certified public accountant reasonably acceptable to Cephalon,
shall have the right to audit, not more than once in any twelve
(12) month period and on at least fifteen (15) days advance
written notice, at Xxxxxx'x expense, Cephalon's relevant books
and records relating to Cephalon's incentive compensation plan
for the Product for the Cephalon Representatives, as well as
Cephalon's incentive compensation plans for other products for
which the Cephalon Representatives make sales presentations, if
Abbott determines, in its reasonable judgment, such audit is
necessary to ensure compliance with the stated requirements of
Section 3.4. Such audit shall report to the parties whether
Cephalon is in compliance with its obligations under Section 3.4,
and if non-compliance is found, it shall report to the parties
the particulars of such non-compliance by Cephalon. Except for
the foregoing, the independent certified public accountant shall
not disclose to Abbott any other particulars of Cephalon's
incentive compensation plan for products other than the Product.
if the audit reports non-compliance, the cost of the audit shall
be paid by Cephalon.
(d) Sampling Activities.
(i) Quarterly Reports. Cephalon shall supply Abbott with quarterly
reports of Cephalon Representatives' sampling activity with
respect to Product no later than thirty (30) days after the end
of each Sales Quarter to which it relates. To the extent required
by applicable laws and regulations of the Territory, Cephalon
shall also make available to Abbott such original documentation
of Cephalon Representatives' sampling activities as Abbott may
need to comply with the requirements of such laws and
regulations, including, but not limited to, the Sampling Act.
Cephalon shall maintain all records required pursuant to the
Sampling Act, including, without limitation, maintenance of
actual business reply cards and delivery receipts for any Sample
Packs delivered to its sales force.
(ii) Sampling Act Compliance. Abbott, or its designee, provided such
designee is an independent certified public accountant reasonably
acceptable to Cephalon and under an obligation of confidentiality
to Cephalon, shall have the right to audit, within ninety (90)
days of the execution date of this Agreement, and once per Sales
Year thereafter on at least fifteen (15) days advance written
notice, at Xxxxxx'x expense, Cephalon's relevant books and
records relating to Cephalon's Sample Pack management and Sample
Pack accountability records if Abbott
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determines, in its reasonable judgment, that such an audit is
necessary to ensure compliance with Section 3.6 and to ensure
Cephalon's compliance with the Sampling Act.
(e) Format of Reports. The parties shall appoint primary liaison(s) to
communicate with each other with regard to information required
pursuant to this Article 3 and Sections 4.1(g) and 4.5. Not later than
thirty (30) days after the date of this Agreement, the primary
liaisons shall agree upon the format of any information to be provided
in all reports required pursuant to this Article 3 and Sections 4.1(g)
and 4.5, which format and details shall be reasonably acceptable to
Abbott. Either party may change its primary liaison(s) upon notice to
the other party.
3.8 Collaboration Committee.
(a) The Collaboration Committee shall be charged with responsibility for
overseeing and managing the collaboration, marketing and further
development of the Product in accordance with the terms of this
Agreement, including the establishment and approval of an annual
Collaboration Plan, Clinical Study Plan and Promotional Budget. The
Collaboration Committee shall be comprised of an equal number of
representatives from each party representing the sales, marketing and
clinical functions of each party, including the personnel identified
on Exhibit 3.8 attached hereto. The Collaboration Committee shall be
co-chaired by representatives from Abbott and Cephalon throughout the
Collaboration Period. The chair shall be responsible for preparing and
distributing the agenda to members in advance of each meeting and for
the preparation of minutes for each meeting. In addition to the
representatives identified on Exhibit 3.8, it is understood that from
time to time additional personnel having specialized experience and
training may be requested to assist the Collaboration Committee,
including, but not limited to, regulatory, finance, legal, and medical
personnel, et. al. Furthermore, upon mutual agreement of the parties,
membership on the Collaboration Committee may be expanded or reduced
in equal measure from time to time to include additional (or fewer)
personnel from each party. The Collaboration Committee shall have the
right to establish subcommittees containing any of such members and
having such charter(s) as the Collaboration Committee may designate
from time to time. The Collaboration Committee shall also have the
right to delegate duties to individual designees of each party (i.e.,
product managers, clinical development managers, et. al.), with the
authority to make decisions relevant to their delegated duties, so
long as such designees regularly apprise the Collaboration Committee
of their activities. The Collaboration Committee shall also have the
right to rescind the delegation of any such duties to designees. All
matters relating to the responsibilities of the Collaboration
Committee (or such duties delegated to designees of the Collaboration
Committee) that cannot be resolved shall be referred by any member of
the Collaboration Committee to Xxxxxx'x Vice President, Pharmaceutical
Commercial Operations, and Cephalon's Chief Operating Officer
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for resolution. If such dispute cannot be resolved as aforesaid, the
matter shall be submitted to alternative dispute resolution in
accordance with Section 18.7 hereof.
(b) In accordance with their respective promotional obligations under this
Agreement, Abbott and Cephalon shall work together to promote the
Product in the Territory and shall present their views on the
marketing and promotion of the Product by means of the Collaboration
Committee. The Collaboration Committee, by itself or through its
designees, shall develop strategies for the promotion of the Product
and undertake the activities necessary to implement those strategies,
which may include coordinating the parties' detailing messages,
methodologies, and their physician and trade targeting and call
programs, approving the target list of physicians for detailing
efforts, and reviewing Promotional Materials. The parties also agree
to share freely with each other all market research data pertaining to
the Product that currently exists or that may be generated for a party
during the Collaboration Period, subject, however, to the receiving
party's obligation to treat such data as Confidential Information
pursuant to Article 14.
(c) The parties agree that Abbott shall have sole discretion with respect
to pricing decisions for the Product, but that the only price
increases, price decreases, discounts, allowances or rebates offered
by Abbott regarding the Product shall be those that are extended by
Abbott in good faith and consistent with price increases, price
decreases, discounts, allowances or rebates extended by Abbott on
other Abbott products in the ordinary course of business. Abbott
agrees that it will not sell the Product in a bundle arrangement with
other Abbott products without the prior written approval of the
Collaboration Committee.
(d) Both parties acknowledge that the minimum level and specifics of each
party's detailing obligations shall be as set forth in Sections 3.1(b)
and 4.4(a).
(e) The parties shall take all necessary steps to ensure that all
activities of the Collaboration Committee are performed in compliance
with applicable Federal, state and local laws and regulations of the
Territory.
(f) Within sixty (60) days after the date of this Agreement,
representatives of the parties' Quality Assurance departments shall
meet to develop and approve a Quality Manual outlining
responsibilities and key contacts for quality and compliance related
issues. Items to be included in the Quality Manual include, but are
not limited to recalls, annual product reviews, returned goods,
regulatory audits, compliance with FDA current Good Manufacturing
Practices, compliance with PDMA and such other quality related
concerns deemed appropriate.
(g) In addition, the Collaboration Committee shall review the pricing of
Sample Packs on an annual basis in accordance with Section 3.6(a).
-19-
3.9 Replacement of Personnel. Each party shall have the right, at any time, to
designate by written notice to the other party a replacement for any of
such party's members on the Collaboration Committee, provided that such
replacement has a functionally equivalent position (regardless of title) to
the person being replaced.
3.10 Meetings. The Collaboration Committee shall meet as necessary, with the
initial expectation that it will meet four (4) times each Sales Year,
alternating locations of the meetings between Xxxxxx Park, Illinois and
West Chester, Pennsylvania, or any other mutually agreed location. The
frequency of such meetings may fluctuate in accordance with the desires of
the Collaboration Committee, and such meetings may be held by
teleconference, if the parties so elect. A minimum of four (4)
representatives must be present at each meeting to constitute a quorum (or
such other number equal in proportion to the total membership of the
Collaboration Committee if such membership is reduced or increased as
provided in Section 3.8(a) above). Assuming a quorum, an equal number of
representatives from each party must participate in any voting of the
Collaboration Committee and a majority of those voting participants must
concur in order for a measure to be approved. A member of the Collaboration
Committee may, from time to time, designate in writing to the other members
a substitute to attend meetings of the Collaboration Committee and, if so
designated in writing, to cast votes on behalf of such member.
3.11 Expenses. Each party shall bear all its own costs, including travel costs,
for personnel serving on the Collaboration Committee.
3.12 Collaboration Plan.
(a) In addition to such other responsibilities as may be agreed to by the
parties from time to time, the Collaboration Committee shall develop,
propose and oversee the implementation of an annual plan for the
clinical development, marketing and promotion of the Product (the
"Collaboration Plan"), including approval of each party's Promotional
Budget for each Sales Year, a sampling program, sales targets, Product
positioning, sales and marketing strategies, indications, and thought
leader development.
(b) The Collaboration Committee shall meet within thirty (30) days after
the execution date hereof to develop a Collaboration Plan for the
remainder of the first Sales Year. The Collaboration Committee shall
finalize the Collaboration Plan for the second Sales Year by October
1, 1999. For each subsequent Sales Year, the Collaboration Plan for
the subsequent Sales Year shall be finalized by October 1 of the
current Sales Year. The parties agree that the Collaboration Plan for
the ninth and tenth Sales Years shall be one and the same
Collaboration Plan, which shall be finalized by October 1, 2006. Each
Collaboration Plan, including the Promotional Budgets and clinical
development expenses of each party, shall be subject to final review
and acceptance by the Collaboration Committee, whose approval with
regard to allocations set forth in such Promotional Budgets shall not
-20-
be unreasonably withheld or delayed; provided, however, that each
Collaboration Plan shall provide that neither party shall be required
to expend Promotional Expenses exceeding the amounts set forth in
Section 3.13, nor clinical development expenses exceeding the amounts
set forth in Section 3.14. Any disputes between the parties concerning
a Collaboration Plan which cannot be resolved by the Collaboration
Committee shall be submitted by any representative of the
Collaboration Committee to Xxxxxx'x Vice President, Pharmaceutical
Commercial Operations, and to Cephalon's Chief Operating Officer for
resolution. If such dispute cannot be resolved as aforesaid, the
matter shall be submitted to alternative dispute resolution in
accordance with Section 18.7 hereof.
(c) The Collaboration Plan shall be reviewed by the Collaboration
Committee at each quarterly meeting. Any changes to the Collaboration
Plan proposed by the parties are subject to the prior approval of the
Collaboration Committee.
3.13 Promotional Expenses
(a) Per Sales Year. During the Collaboration Period, Cephalon and Abbott
agree to share the annual cost of Promotional Expenses for the Product
in the Field and to expend the amounts required in the Promotional
Budget so that Cephalon is responsible for [* The confidential
material contained herein has been omitted and has been separately
filed with the Commission.] of such expenses and Abbott is responsible
for [* The confidential material contained herein has been omitted and
has been separately filed with the Commission.] of such expenses in
any given Sales Year (except in the first Sales Year where Xxxxxx'x
share is greater than [* The confidential material contained herein
has been omitted and has been separately filed with the Commission.],
subject to the requirement that neither party shall be required to
expend Promotional Expenses in any given Sales Year in excess of the
amounts set forth on the following chart:
[* The confidential material contained herein has been omitted and has
been separately filed with the Commission.]
Notwithstanding the foregoing, if the sales of the Product warrant a
change in the amount of Promotional Expenses required from the parties
as set forth above, the parties agree to discuss such changes in good
faith and to negotiate revisions to this Agreement as they may deem
appropriate under the circumstances. Cephalon
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agrees that the Cephalon Promotional Launch Date shall occur on or
before July 1, 1999.
(b) Annual Review -- Prospective. During the last meeting of the
Collaboration Committee for a Sales Year, the Collaboration Committee
shall review each party's proposed allocation of Promotional Expenses
under such party's Promotional Budget for the upcoming Sales Year for
purposes of determining if expenses to be charged to the Promotional
Budget are the types of expenses allowed to be so charged. For
clarification purposes, the types of Promotional Expenses allowed to
be charged to the Promotional Budget are set forth in Exhibit 1.22. In
the event that the Collaboration Committee decides that expenses are
improperly charged against a party's Promotional Budget, the amount of
such improperly charged expenses shall be re-allocated to the party's
Promotional Budget in a manner acceptable to the Collaboration
Committee.
(c) Annual Review--Retrospective. During the first meeting of the
Collaboration Committee for a new Sales Year, the Collaboration
Committee shall review each party's actual allocation of Promotional
Expenses under such party's Promotional Budget for the preceding Sales
Year for purposes of determining if expenses charged to the
Promotional Budget are the types of expenses allowed to be so charged.
In the event that the Collaboration Committee decides that such
expenses were improperly charged against a party's Promotional Budget,
the amount of such improperly charged expenses shall be added to the
party's Promotional Budget and share of Promotional Expenses for the
new Sales Year in a manner acceptable to the Collaboration Committee.
In addition, for any Sales Year, any amount of a party's share of
Promotional Expenses set forth in the Promotional Budget that was not
expended by such party in such Sales Year shall be added to the amount
of Promotional Expenses required to be expended by such party in the
subsequent Sales Year, in a manner approved by the Collaboration
Committee.
(d) In the event that the Collaboration Committee is undecided as to the
proper charges against a party's Promotional Budget, then the matter
shall be referred to Xxxxxx'x Vice President, Pharmaceutical
Commercial Operations, and Cephalon's Chief Operating Officer for
resolution. if such dispute cannot be resolved as aforesaid, the
matter shall be submitted to alternative dispute resolution in
accordance with Section 18.7 hereof.
3.14 Clinical Activities.
(a) Clinical Studies. During the [*The confidential material herein has
been omitted and has been separately filed with the Commission.] Sales
Years, Cephalon and Xxxxxx agree to conduct clinical studies on
Product in the Field, as directed by the Collaboration Committee.
Xxxxxx agrees to pay a cumulative total amount not to exceed [*The
confidential material herein has been omitted and has been separately
filed with the Commission.] to conduct such study or studies as may be
directed by the Collaboration Committee, which
-22-
amount shall include the expense to Xxxxxx of obtaining all regulatory
approvals to conduct clinical research activities. Cephalon agrees to
pay a cumulative total amount not to exceed [*The confidential
material herein has been omitted and has been separately filed with
the Commission.] to conduct such study or studies as may be directed
by the Collaboration Committee. The parties agree that the
Collaboration Committee shall have discretionary authority to allocate
each party's funds to such study or studies as it deems beneficial to
the clinical development of the Product.
(b) Clinical Study Plan. Within ninety (90) days following the date of
this Agreement, the Collaboration Committee shall develop the Clinical
Study Plan and related budget, for the conduct of clinical studies
relating to the Product, including review and approval of outlines for
the studies to be conducted by each party. Thereafter, the
Collaboration Committee shall oversee the implementation of such
Clinical Study Plan. On an annual basis (or more often as decided by
the Collaboration Committee), the Collaboration Committee shall review
the current Clinical Study Plan and the progress and results of all
clinical studies performed thereunder. The Collaboration Committee
shall have the authority to revise the current Clinical Study Plan as
and when it deems necessary or desirable.
(c) Ownership of Results. The results of all clinical studies conducted
hereunder, as well as all reports and underlying data used or
generated in connection therewith, as and when such results, reports
and data become available to Cephalon, shall be turned over to Xxxxxx
and become the property of Xxxxxx, subject to the right of Cephalon to
utilize such studies for its promotional efforts hereunder if so
directed by the Collaboration Committee. The format of all such
results, reports and data shall be in a manner approved in advance by
the Collaboration Committee.
(d) Future Clinical Studies. If the Collaboration Committee determines
that the results of the clinical studies show promise for future
development of the Product (i.e., additional indications), the parties
agree to discuss in good faith the implementation of additional
clinical studies by the parties and the allocation of the costs for
such additional studies between the parties.
3.15 Additional Clinical Studies. Upon Xxxxxx'x initiation of any
Investigational New Drug Application related to any new indication, dosage
form or formulation of the Product, the parties shall meet to discuss such
Investigational New Drug Application and the projected expenses involved in
conducting a program for a Supplemental New Drug Application to the FDA,
including required expenditures for new clinical development programs. If
Cephalon is interested in pursuing a collaboration for such new indication,
dosage form, or formulation, Cephalon shall notify Xxxxxx within thirty
(30) days of their meeting and the parties shall thereafter negotiate in
good faith during the succeeding three (3) month period a sharing of the
clinical development expenditures necessary to file a Supplemental New Drug
Application, the allocation of marketing responsibilities, as well as a
sharing of the revenues related to the sale of drug under such Supplemental
New
-23-
Drug Application. The sharing of such expenditures, responsibilities and
revenues shall reflect the parties' good faith determination of the extent
to which the percentage of the market for the new indication, dosage form
or formulation is in the Field. If the parties are unable to agree on such
sharing arrangements, the matter shall be referred to Xxxxxx'x Vice
President, Pharmaceutical Commercial Operations, and Cephalon's Chief
Operating Officer for resolution. If such dispute cannot be resolved as
aforesaid, the matter shall be submitted to alternative dispute resolution
in accordance with Section 18.7 hereof. If Cephalon is not interested in
pursuing such a collaboration, or if the parties are unable to agree on the
terms of such a collaboration within three (3) months following good faith
negotiations and the dispute is not submitted to alternative dispute
resolution in accordance with Section 18.7, then Xxxxxx shall have the
right to develop and market, either by itself or with other collaboration
partners, the new indication, dosage form, or formulation that is the
subject of the Supplemental New Drug Application. If Xxxxxx markets such
new indication, dosage form, or formulation in the Territory during the
Collaboration Period, the parties further agree to examine in good faith an
appropriate methodology, if necessary, to distinguish sales of the new
indication, dosage form, or formulation from "Net Sales" of the Product so
that neither party is prejudiced hereunder by the sale of such new
indication, dosage form, or formulation in the Territory.
ARTICLE 4- XXXXXX'X RESPONSIBILITIES
4.1 Compensation.
(a) Commission. In consideration of Cephalon's performance hereunder,
Xxxxxx shall pay Cephalon a commission on Annual Net Sales (exclusive
of return reserves) in accordance with this Article 4.
[* The confidential material contained herein has been omitted and has
been separately filed with the Commission.]
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[* The confidential material contained herein has been omitted and has
been separately filed with the Commission.]
(b) Payment. Xxxxxx shall pay the commission due Cephalon on the total
Annual Net Sales generated through the end of each Sales Quarter
within forty-five (45) days after the end of each such Sales Quarter
(except for the first and tenth Sales Years, in which case the
commission shall be payable within forty-five (45) days after the end
of the applicable Sales Year), provided Xxxxxx has received Cephalon's
Detail reports required under Section 3.7(a)(i). Xxxxxx shall make
such payment in U.S. Dollars by wire transfer to such bank and account
number as Cephalon may identify to Xxxxxx from time to time. Payment
of the commission shall be as follows:
[* The confidential material contained herein has been omitted and has
been separately filed with the Commission.]
-25-
[*The confidential material herein has been omitted and has been
separately filed with the Commission.]
-26-
[*The confidential material herein has been omitted and has been
separately filed with the Commission.]
-27-
[*The confidential material herein has been omitted and has been
separately filed with the Commission.]
-28-
[*The confidential material herein has been omitted and has been
separately filed with the Commission.]
(d) Credit.
(i) General. In the event an adjustment to the commission due
Cephalon pursuant to Section 4.1(c) is required, then Xxxxxx
shall take a credit against the payment due Cephalon for the
Sales Year in which Cephalon failed to achieve the Primary and
Secondary Detail requirements set forth in Section 3.1(b). if any
credit is due Xxxxxx due to the application of Section 4.1(c),
then:
(A) Xxxxxx shall notify Cephalon of the reduced compensation
payment and the method of calculation used to determine such
amount; and
(B) Xxxxxx shall subtract from the commission installment
otherwise due for the fourth Sales Quarter, the amount of
the credit due Xxxxxx so that the sum total of all
commission installments paid for the applicable Sales Year
equals the amount due Cephalon under Section 4.1(c) above.
(ii) Detail Variance. In the event Cephalon performs all of the
required Detail Variance during the first Sales Quarter of a
Sales Year in accordance with Section 3.2(b) hereof, such Detail
Variance shall be added to the number of Cephalon Details
performed for the previous Sales Year and the commission that
would have been due Cephalon for performing all of the required
Cephalon Details shall be paid to Cephalon in accordance with
Section 3.2(b).
(e) Residual Payments. Subject to the provisions of Section 11.6, in
consideration of Cephalon's efforts in developing Product goodwill,
Xxxxxx shall pay the following commissions to Cephalon during each
Residual Period following the expiration or termination of the
Collaboration Period. The commission payments due for the Residual
Periods shall be made within forty-five (45) days following the end of
each Residual Period:
[* The confidential material contained herein has been omitted and has
been separately filed with the Commission.]
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[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
(f) Recalculation of Net Sales. For up to two (2) years following the date
of each Sales Year commission payment, Xxxxxx may recalculate the
commission due for such Sales Year as a result of any other
adjustments due to Net Sales for such Sales Year of which Xxxxxx
becomes aware or for which Xxxxxx becomes entitled. if, as a result of
such recalculation,
(i) Xxxxxx has overpaid commission to Cephalon relating to such Sales
Year, Xxxxxx shall credit such amount against Cephalon's next due
commission payment; or
(ii) Xxxxxx has underpaid commission to Cephalon relating to such
Sales Year, Xxxxxx shall pay such amount to Cephalon with its
next due commission payment.
(g) Net Sales Report and Audit.
(i) Net Sales Report. On a quarterly basis, Xxxxxx shall provide
Cephalon with a report showing: (A) gross sales of the Product in
the Territory for use in the Territory and the supporting
calculation of sales of Gabitril(R) outside the Field, so long as
the data is available from IMS within the stated time period, and
if not, as soon as reasonably practicable thereafter; (B) a
calculation demonstrating the adjustments to gross sales in order
to arrive at Quarterly Net Sales or Annual Net Sales, as
applicable; (C) Quarterly Net Sales and, if applicable, Annual
Net Sales of the Product; and (D) the calculation of the
commission payable, including any adjustments to the commission
payable. Xxxxxx shall deliver such report to Cephalon within
forty-five (45) days of the end of each Sales Quarter.
(ii) Audit of Net Sales Report. If Cephalon, in its reasonable
judgment, determines that an audit of Xxxxxx'x relevant books and
records is necessary to verify the information supplied by Xxxxxx
pursuant to Section 4. 1(g)(i), then Cephalon's designee, under
duty of confidentiality to Xxxxxx and Cephalon, and provided such
designee is an independent certified
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public accountant reasonably acceptable to Xxxxxx, shall have the
right, on fifteen (15) days' advance written notice, at
Cephalon's expense, to perform an audit of the relevant books and
records of Xxxxxx not more than once in any twelve (12) month
period to verify the information supplied by Xxxxxx pursuant to
Section 4.l(g)(i); provided however, Cephalon must notify Xxxxxx
of its intent to exercise this audit right within six (6) months
of receipt of Xxxxxx'x Annual Net Sales report. If Cephalon has
not notified Xxxxxx within such six (6) month period, Cephalon's
audit right for such Sales Year shall terminate. Notwithstanding
the foregoing, if an audit reveals that there has been a variance
of two percent (2%) or more in the determination of the
applicable Annual Net Sales, then the cost for such audit shall
be paid by Xxxxxx, and Cephalon's designee, under duty of
confidentiality to Xxxxxx and Cephalon, and provided such
designee is an independent certified public accountant reasonably
acceptable to Xxxxxx, shall have the right, on at least fifteen
(15) days' advance written notice, to audit Xxxxxx'x relevant
books and records, as set forth above, at Xxxxxx'x expense, for
each of the succeeding three (3) Sales Quarters. Thereafter,
Cephalon shall have a twelve (12) month audit right in accordance
with the first sentence of this paragraph, subject to such right
again reverting to a quarterly audit right in accordance with the
third sentence of this paragraph. In addition, Cephalon shall be
entitled to one additional right of audit, at Cephalon's expense,
as set forth in this Section 4. 1(g)(ii) for each occasion of
Xxxxxx'x recalculation of the commission payable for any Sales
Year pursuant to Section 4.1(f). Cephalon must notify Xxxxxx of
its intent to exercise such additional right within sixty (60)
days of Xxxxxx'x notice to Cephalon of payment due.
4.2 Identification of Cephalon on Promotional Materials. For the Collaboration
Period and subject to the provisions of Section 3.5(a), and except for
currently existing Promotional Materials provided by Xxxxxx to Cephalon,
the Cephalon and Xxxxxx company identifications (or names) and/or logos, as
set forth in Exhibit 4.2 attached hereto, shall be jointly presented in
equal size and prominence on advertising directed to the physicians and on
Promotional Materials directed to the physicians, unless such joint
presentation is prohibited by law in the Territory. Cephalon hereby grants
to Xxxxxx, without additional consideration, such non-exclusive rights with
respect to Cephalon's company identifications (or names) and/or logos as
Xxxxxx may require solely for the purposes of developing, producing and
distributing the Promotional Materials for the Product and advertisements
for the Product during the Term and in accordance with the terms of this
Agreement. Xxxxxx hereby grants to Cephalon, without additional
consideration, such non-exclusive rights with respect to Xxxxxx'x company
identifications (or names), the Trademarks and/or logos as Cephalon may
require solely for the purposes of developing, producing and distributing
the Promotional Materials for the Product and advertisements for the
Product during the Term and in accordance with the terms of this Agreement.
Cephalon shall use only camera-ready and/or computer accessible
illustrations of the Xxxxxx logo and the Trademarks provided by Xxxxxx.
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4.3 Product Supply and Pricing. Cephalon acknowledges that Xxxxxx shall have
the sole responsibility for the manufacture, distribution, supply,
shipping, warehousing, invoicing, billing and for collection of receivables
resulting from Product sales, at Xxxxxx'x cost and expense. At all times
during the Collaboration Period, Xxxxxx shall undertake all Reasonable
Commercial Efforts to make available and sell sufficient quantities of the
Product to meet the requirements of its customers, taking into account the
actual demand for the Product and the marketing strategy for the Product.
Cephalon recognizes and accepts that the final decision for the allocation
of Product in the event of a shortage rests with Xxxxxx. Xxxxxx may take
into consideration the global market Xxxxxx is obligated to supply in
determining such allocation. In accordance with Section 3.8(c), Cephalon
recognizes and accepts that the final decision for the pricing of Product
rests with Xxxxxx.
4.4 Other Xxxxxx Responsibilities.
(a) Detailing Effort. During the first Sales Year, Xxxxxx shall perform
such number of Reminder Details so that the total number of Reminder
Details performed by Xxxxxx in calendar year 1999 is equal to [*The
confidential material herein has been omitted and has been separately
filed with the Commission.] During the second through ninth Sales
Years, Xxxxxx shall perform [* The confidential material contained
herein has been omitted and has been separately filed with the
Commission.] Reminder Details per Sales Year. During the tenth Sales
Year, Xxxxxx shall perform [* The confidential material contained
herein has been omitted and has been separately filed with the
Commission.] Reminder Details. All of the Xxxxxx Details shall be
Reminder Details. In the event Xxxxxx fails to perform the required
number of Xxxxxx Details in a given Sales Year by a variance of minus
ten percent (-10%) or less, then Xxxxxx shall be entitled to make up
such variance by performing all of the variance in the first Sales
Quarter of the subsequent Sales Year, in addition to the Xxxxxx
Details that Xxxxxx is required to perform in that Sales Quarter.
Xxxxxx may hire contract representatives to perform Xxxxxx Details
required of Xxxxxx Representatives hereunder with the prior written
consent of the Collaboration Committee, which consent shall not be
unreasonably withheld.
(b) Sample Packs. Xxxxxx shall provide the Xxxxxx Representatives with
Sample Packs in accordance with the promotional program approved by
the Collaboration Committee. Xxxxxx shall be entitled to include as a
Promotional Expense, its cost of manufacturing and packaging the
Sample Packs for the Xxxxxx Representatives. Xxxxxx shall cause the
Xxxxxx Representatives to distribute Sample Packs in connection with
the Xxxxxx Detailing of the Product and in strict accordance with the
PhRMA Code and all applicable Federal, state and local laws and
regulations of the Territory, including, but not limited to, the
Sampling Act. Xxxxxx shall maintain all records required pursuant to
the Sampling Act, including, without limitation, maintenance of actual
business reply cards and delivery receipts for any Sample Packs
delivered to its sales force. Xxxxxx shall have the sole
responsibility for storing and distributing Sample Packs purchased for
Xxxxxx Representatives.
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(c) Customer Relationships. Xxxxxx shall have sole responsibility for all
managed care account responsibilities and shall use Reasonable
Commercial Efforts with respect to contracting with and managing the
trade relationships with managed care, retail pharmacy and wholesaler
organizations, including GPOs, HMOs, PPOs, PBMs, Federal accounts and
long-term care, and will use Reasonable Commercial Efforts to manage
these relationships to maximize the commercial potential of the
Product. These responsibilities shall include, without limitation,
disseminating adequate notification of price changes, assuring
adequate pharmacy and wholesaler stocking, disseminating any Product
recall or withdrawal announcements and other material Product
announcements. Xxxxxx agrees to use its reasonable efforts to keep
Cephalon apprised of significant developments with its managed care,
retail pharmacy and wholesaler business that concern the Product.
4.5 Xxxxxx Reports and Cephalon Audit Rights.
(a) Internal Xxxxxx Report and Cephalon Audit Right.
(i) Xxxxxx Report. Not later than sixty (60) days after the end of
each Sales Year of the Collaboration Period, Xxxxxx shall supply
Cephalon with a report containing the actual number of Xxxxxx
Details performed during such Sales Year, along with a breakdown
of the Xxxxxx sales territories where such Xxxxxx Details were
performed, types of physicians to whom Xxxxxx Details were made,
and Product indications emphasized.
(ii) Audit Right. If Cephalon determines, in its reasonable judgment,
that an audit is necessary to determine Xxxxxx'x compliance with
the stated requirements of Section 4.5(a)(i), then Cephalon or
its designee, provided such designee is an independent certified
public accountant reasonably acceptable to Xxxxxx and under a
duty of confidentiality to Xxxxxx, shall have a right to perform,
at Cephalon's expense, not more than once in any twelve (12)
month period and on at least fifteen (15) days advance written
notice, an audit of Xxxxxx'x relevant books and records to
determine Xxxxxx'x compliance with Section 4.5(a)(i); provided,
however, Cephalon must notify Xxxxxx of its intent to exercise
this audit right within six (6) months of receipt of Xxxxxx'x
final report of Xxxxxx Details for a Sales Year. If Cephalon has
not notified Xxxxxx within such six (6) month period, Xxxxxx'x
audit right for such Sales Year shall terminate. Notwithstanding
the foregoing, if an audit discloses a variance of five percent
(5%) or more in the number of Reminder Details actually performed
by Xxxxxx Representatives, then the cost for such audit shall be
paid by Xxxxxx and Cephalon's twelve (12) month audit right shall
become a quarterly audit right, at Xxxxxx'x expense, for the
succeeding three (3) Sales Quarters. Thereafter, Cephalon shall
have a twelve (12) month audit right in accordance with the first
sentence of this paragraph, subject to
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such right again reverting to a quarterly audit right in
accordance with the second sentence of this paragraph.
(b) Sales Data for Purposes of Calculation of Cephalon Representative
Incentive Compensation. For each Sales Year of the Collaboration
Period, in order to aid Cephalon in accurately crediting Cephalon
Representatives for volume of sales generated, Xxxxxx shall provide to
Cephalon, within thirty (30) days after the last day of each Sales
Quarter, Xxxxxx internal sales data and such sales data concerning the
Product as Xxxxxx obtains from third parties to the extent Xxxxxx'x
agreements with the suppliers of such data permit Xxxxxx to do so. if
Xxxxxx cannot supply all sales data needed by Cephalon to calculate
properly the Cephalon Representative incentive compensation on a
Cephalon Representative sales territory basis, Cephalon shall approach
Drug Distribution Data or another third party external audit source
which both Xxxxxx and Cephalon deem to be reliable, in order to obtain
such information on a Cephalon Representative sales territory basis.
ARTICLE 5- ADVERSE EVENTS, RECALLS AND OTHER REGULATORY MATTERS
5.1 Adverse Reaction Reporting. Cephalon shall keep Xxxxxx informed of
information in or coming into its possession or control concerning side
effects, injury, toxicity or sensitivity reaction and incidents of severity
thereof associated with commercial and clinical uses, studies,
investigations or tests of the Product (in humans), within or outside the
Territory, whether or not determined to be attributable to the Product.
During the term of this Agreement, Cephalon shall notify the Xxxxxx Medical
Affairs Department within twenty-four (24) hours, by facsimile or telephone
only, and after a responsible employee of Cephalon first becomes aware of
any adverse drug experience involving the Product.
5.2 Product Information Requests. Information concerning any complaints,
inquiries and/or drug information requests from consumers, physicians, or
other third parties regarding the Product shall be forwarded to the Xxxxxx
Medical Affairs Department within twenty-four (24) hours of Cephalon's
receipt of the information and/or inquiry. The Xxxxxx Medical Affairs
Department shall respond to such complaints and inquiries, if necessary, in
accordance with its usual and customary procedures. Xxxxxx shall supply
Cephalon, for Cephalon's information purposes only, with copies of its
standard response information for the Product as well as any updates
thereto.
5.3 Governmental Reports. Xxxxxx shall be responsible for filing with the FDA
any adverse reaction reports that it receives directly from third parties
and any adverse reaction reports that it receives from Cephalon.
5.4 Product Recall. In the event that either party determines that an event,
incident or circumstance has occurred which may result in the need for a
recall or other removal of any Product, or any lot or lots thereof, from
the market, such party shall promptly advise the other and the parties
shall consult with respect thereto. Xxxxxx shall have the sole
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authority to decide whether a recall or other removal of such Product shall
be made. Except as provided below, if Xxxxxx recalls or otherwise removes
such Product or any lot or lots thereof from the market, Xxxxxx shall bear
all costs and expenses of such recall or removal, including, without
limitation, expenses and other costs or obligations to third parties, the
cost and expense of notifying customers and the costs and expenses
associated with shipment of the recalled Product and the cost and expense
of destroying the Product removed from the market, if necessary. Any such
recall or removal costs, expenses or obligations shall be borne by Cephalon
only to the extent that the recall or removal results from Cephalon's:
(i) improper distribution, storage, or shipment of Sample Packs;
(ii) improper sampling practices or mishandling of Sample Packs;
(iii) co-promotion of the Product in a manner inconsistent with the
Product's labeling or other Promotional Materials provided by
Xxxxxx; or
(iv) violation of this Agreement.
In the event of a recall, the parties shall promptly meet and discuss in
good faith whether the parties' obligations under this Agreement should be
ended or reduced.
5.5 Procedures. Within thirty (30) days after the date of this Agreement,
representatives from the drug surveillance and medical information
departments of each party shall meet to establish procedures to accomplish
the obligations set forth in this Article 5.
5.6 Governmental Contact Reporting. Each party shall notify the other within
twenty four (24) hours in writing upon being contacted by the FDA or any
other Federal, state, or local governmental agency for any regulatory
purpose pertaining to this Agreement or to the Product, including any audit
regarding safety or surveillance. Cephalon shall not respond to the FDA or
such governmental agency before consulting with Xxxxxx'x Vice President,
Corporate Quality Assurance and Regulatory Affairs and Xxxxxx'x Medical
Services Director, unless, under the circumstances pursuant to which FDA or
such other Federal, state, or local governmental agency contacts Cephalon,
it is not practical or lawful for Cephalon to give Xxxxxx advance notice,
in which event Cephalon shall inform Xxxxxx of such contact as soon as
practical and lawful. Xxxxxx shall provide Cephalon with prompt written
notice of any inquiries from, or positions taken by, the FDA or any other
Federal, state, or local governmental agencies which may affect the
co-promotion, sale or distribution of the Product. In addition, Xxxxxx
shall keep Cephalon advised with respect to information concerning the
safety or efficacy of the Products. Xxxxxx shall supply detailed
information regarding such safety, efficacy, and medical information
issues, and shall provide copies of safety reports as and when filed with
the FDA.
5.7 Clinical Trial Adverse Events, if clinical trials are to be conducted by
Cephalon, all adverse events shall be reported to Xxxxxx and all adverse
event reporting shall be the
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responsibility of the Xxxxxx Medical Affairs Department. The terms of
adverse event collection and processing must be agreed upon before the
trial initiation. All clinical trial protocols must be reviewed and
accepted by the Xxxxxx Medical Affairs Department and its appropriate
Cephalon counterpart.
5.8 Product Labeling. Xxxxxx represents that the Product is properly labeled in
accordance with applicable laws and the parties agree that Xxxxxx shall
have sole responsibility for decisions regarding labeling changes which may
be required from time to time for safety issues. Xxxxxx shall promptly
notify Cephalon of any such changes.
5.9 Annual Report. Cephalon will report to Xxxxxx in a timely manner all
information necessary to complete annual safety reports or other reports
requiring clinical safety information.
5.10 Quality Assurance. Xxxxxx shall provide FDA-483 observations and responses
associated with the manufacture of the Product to Cephalon.
ARTICLE 6 - PRODUCT REGISTRATION AND LAUNCH
6.1 Product Registration. During the Term and subject to the provisions of
Section 10.2(c) with respect to the withdrawal of the Product, Xxxxxx
shall, at its own expense, obtain and thereafter maintain all regulatory
approvals necessary for the marketing of the Product in the Territory.
Xxxxxx shall provide Cephalon with prompt notice of any change in
regulatory approvals. Xxxxxx represents that it has obtained all regulatory
approvals necessary for the marketing of the Product in the Territory.
6.2 Launch Dates. The Cephalon Promotional Launch Date shall be no later than
July 1 1999. The Cephalon Detail Launch Date shall be no later than
September 15, 1999. [* The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
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[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES
7.1 Cephalon Representations and Warranties. Cephalon hereby represents and
warrants that:
(a) Cephalon is duly authorized to enter into this Agreement.
(b) No other consents or approvals are necessary for Cephalon to enter
into this Agreement and perform its obligations hereunder.
(c) This Agreement does not conflict with any other Cephalon contractual
obligation.
(d) Cephalon shall perform its obligations hereunder in accordance with
the PhRMA Code and all applicable Federal, state and local laws and
regulations of the Territory, including, but not limited to, the
Sampling Act; provided however, Cephalon shall not be in default of
the terms of this Agreement if Cephalon violates the PhRMA Code or any
applicable Federal, state or local laws or regulations of the
Territory as a direct result of Cephalon's use of or reliance on
Xxxxxx-provided Promotional Materials, Product labeling, or Xxxxxx'x
license to the Patent or its ownership of the Trademarks or the use of
Xxxxxx'x company identification (or name) and/or logos.
(e) Cephalon is a corporation duly organized under the laws of the State
of Delaware, and is in good standing in such state.
7.2 Xxxxxx Representations and Warranties. Xxxxxx hereby represents and
warrants that:
(a) Xxxxxx is duly authorized to enter into this Agreement.
(b) No other consents or approvals are necessary for Xxxxxx to enter into
this Agreement and perform its obligations hereunder.
(c) This Agreement does not conflict with any other Xxxxxx contractual
obligation.
(d) Xxxxxx shall perform its obligations hereunder in accordance with the
PhRMA Code and all applicable Federal, state and local laws and
regulations of the Territory, including, but not limited to, the
Sampling Act; provided however, Xxxxxx shall not be in default of the
terms of this Agreement if Xxxxxx violates the PHRMA Code or any
applicable Federal, state or local laws or regulations of the
Territory as a direct result of Xxxxxx'x use of Cephalon's company
identification (or name) and/or logos.
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(e) As of the date hereof, Xxxxxx is the exclusive licensee of the Patent
in the Territory, and is the owner of the Trademarks in the Territory.
(f) As of the date hereof, there are no patents or trademarks owned by
others of which Xxxxxx is aware which would be infringed by the
promoting or selling of the Product under the Trademarks in the
Territory.
(g) As of the date hereof, there are no suits, claims or proceedings
pending against Xxxxxx or any of its Affiliates in any court or by or
before any governmental body or agency with respect to the Product or
the Patent or the Trademarks or Xxxxxx'x exclusive license to the
Patent in the Territory, and to the best of Xxxxxx'x knowledge, no
such actions, suits or claims have been threatened against it in the
Territory.
(h) Incentive compensation paid to Xxxxxx Representatives performing
Reminder Details of the Product will not be reduced during the
Collaboration Period to a level below that currently paid to Xxxxxx
Representatives performing Reminder Details of the Product.
(i) The number of annual Reminder Details performed by Xxxxxx
Representatives since January 1, 1999 until the date hereof is
proportionally no less than the [* The confidential material contained
herein has been omitted and has been separately filed with the
Commission.] Reminder Details required to be performed annually by
Xxxxxx hereunder.
(j) Xxxxxx shall manufacture, package, label, store, ship and handle the
Product in compliance with GMPs.
(k) To the best of Xxxxxx'x knowledge, Xxxxxx has provided Cephalon with
copies of its files relating to Product recalls, adverse events and
warning letters received by Xxxxxx and relating to the Product in the
Territory.
(l) As of the date hereof, Xxxxxx is not aware of any contract, agreement
or intellectual property matters that might adversely impact Xxxxxx'x
ability to perform its obligations under this Agreement.
(m) To the best of Xxxxxx'x knowledge, as of the date hereof, Xxxxxx is
not aware of any legal challenge relating to the validity of the
Patent.
(n) As of the date hereof, Xxxxxx'x exclusive license for the Product is
in full force and effect and Xxxxxx agrees to maintain said exclusive
license in full force and effect for the Term, or obtain such other
rights to the Product as will allow Xxxxxx and Cephalon to perform
their respective obligations as contemplated under this Agreement.
(o) As of the date hereof, Xxxxxx is not engaged in any discussions with
FDA, nor, to the best of Xxxxxx'x knowledge, are there any actions
pending with FDA that
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would materially change the labeling of the Product or materially
change Xxxxxx'x ability to market, promote or sell the Product.
7.3 NO OTHER WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, EACH PARTY MAKES NO OTHER WARRANTIES OR REPRESENTATIONS,
INCLUDING FITNESS FOR PURPOSE AND MERCHANTABILITY, WHETHER EXPRESS OR
IMPLIED.
ARTICLE 8 - NON-COMPETITION
8.1 (a) [* The confidential material contained herein has been omitted and has
been separately filed with the Commission.]
(b) Xxxxxx agrees that it shall not negatively position the Product in any
of its marketing efforts during the Term.
[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
8.3 New Forms. In addition, if pursuant to Section 1.20 and 3.15, Cephalon
co-promotes any new indication(s), dosage form(s) or formulation(s) of the
Product, then the restriction of
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this Article 8 shall be automatically expanded to include such new
indication(s), dosage form(s) or formulation(s).
ARTICLE 9 - RELATIONSHIP
The parties agree that they are independent contractors. Neither party nor any
employee of such party is an employee, officer, agent, partner, business
representative of, or legal representative of, or joint venturer with the other
party. Neither party has authority to assume any obligation on behalf of the
other party and shall not hold out to third parties that it has any authority to
do so unless otherwise specified herein. Neither party shall take any action
that might mislead or confuse third parties in this regard. Unless otherwise
provided herein, each party shall be responsible for its own expenses and shall
not incur expenses for the other party's account unless expressly authorized in
writing to do so by the other party.
ARTICLE 10 - TERM AND TERMINATION
10.1 (a) Term. This Agreement shall become effective on July 1, 1999 and shall,
unless sooner terminated as otherwise provided, be in full force and
effect until April 23, 2010, unless extended pursuant to Section
10.1(b) below.
(b) Patent Extension. In the event that the term of the Patent is extended
from its current expiration date of April 23, 2008, whether through an
extension under 35 U.S.C.ss.155 or otherwise, then the Collaboration
Period may be extended as follows: Xxxxxx shall notify Cephalon that
an extension of the term of the Patent has been granted, and Cephalon
shall then have a first right of negotiation to extend the
Collaboration Period for a term commensurate with the extended term of
the Patent. If Cephalon desires to exercise its right of first
negotiation, Cephalon shall so inform Xxxxxx within thirty (30) days
of its receipt of notice from Xxxxxx, and the parties shall, in good
faith, proceed within a reasonable period of time thereafter to
negotiate the terms of their relationship during the extended
Collaboration Period. If the parties are unable to reach agreement on
the terms of such extension within six (6) months thereafter, Xxxxxx
shall have the right to promote the Product on its own for the
extended term of the Patent, or to collaborate with, co-promote with
and/or license rights to, third parties for such extended term of the
Patent.
10.2 Early Termination. This Agreement may be terminated prior to the expiration
of the Term upon the occurrence of any of the following events:
(a) Material Breach. Termination pursuant to the application of this
Section 10.2(a) shall be deemed termination due to a material breach
of this Agreement.
(i) Either party's giving ninety (90) days' prior notice to the other
party of a material breach of any of the terms or conditions of
this Agreement by such other party and the other party fails to
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(A) cure its breach, provided such breach is capable of cure,
within the ninety (90) days' notice period; or
(B) commence and diligently pursue efforts to cure such breach
if such breach is not capable of cure within the ninety (90)
day notice period, provided such cure is completed no later
than one hundred eighty (180) days following receipt of
initial notice.
(ii) Xxxxxx'x notice to Cephalon with respect to breach of any of
the following provisions, as such provisions are material
breaches not capable of cure: Section 6.2 Cephalon Detail
Launch Date and Cephalon Promotional Launch Date), Article 8
(non-competition) and Section l0.2(a)(iii) (failure to
perform Cephalon Details).
(iii) Xxxxxx giving ninety (90) days' prior notice to Cephalon if
Cephalon fails to perform a minimum of [* The confidential
material contained herein has been omitted and has been
separately filed with the Commission.]
(iv) Cephalon giving ninety (90) days' prior notice to Xxxxxx if
Xxxxxx fails to perform a minimum of [* The confidential
material contained herein has been omitted and has been
separately filed with the Commission.]
(b) Withdrawal of Product. Either party giving ninety (90) days' prior
notice to the other if Xxxxxx permanently withdraws the Product from
the market in the Territory upon request of FDA. Termination pursuant
to the application of this Section 10.2(b) shall not be deemed
termination due to a material breach of this Agreement by either
party.
(c) Patents. Either party giving ninety (90) days' prior notice to the
other if
(i) the Patent no longer provides the Product with exclusivity in the
Territory; or
(ii) the manufacture, importation, sale or use of the Product is
adjudicated by a court of competent jurisdiction to infringe the
patent rights of any third party.
Notwithstanding the foregoing, in the case of (i) and (ii) above,
either party's right to terminate shall not become effective until
such time as Xxxxxx has (i) exhausted all possible appeals; or (ii)
after utilizing Reasonable Commercial Efforts, failed to secure a
license from the third party claiming infringement to allow the
Product to maintain its exclusivity in the Territory; provided that
during the pendency of any such appeals or the securing of a license
the Patent retains its exclusivity.
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Termination pursuant to the application of this Section 10.2(c) shall
not be deemed termination due to a material breach of this Agreement
by either party.
(d) Force Majeure. Either party giving ninety (90) days' prior notice to
the other party if an event of Force Majeure as described in Article
17 continues for more than six (6) months. Termination pursuant to the
application of this Section 10.2(d) shall not be deemed termination
due to a material breach of this Agreement by either party.
(e) Bankruptcy. Immediately, upon either party giving notice to the other
party in the case of any adjudication of bankruptcy or insolvency,
appointment of a receiver by a court of competent jurisdiction,
assignment for the benefit of creditors, or institution of liquidation
proceedings by or against the other party. Termination pursuant to the
application of this Section 10.2(e) shall not be deemed termination
due to a material breach of this Agreement by either party.
[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
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[* The confidential material contained herein has been omitted and has
been separately filed with the Commission.]
-43-
[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
-44-
[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
(g) Sales. Either party giving at least three (3) months notice during the
first Sales Quarter of the fifth Sales Year if Net Sales of the
Product in the fourth Sales Year were not at least seventy-five
percent (75%) of [* The confidential material contained herein has
been omitted and has been separately filed with the Commission.] and
neither party is making a profit from its activities under this
Agreement, with no substantial likelihood to achieve profitability, as
reasonably determined based upon projected sales forecasts of the
Collaboration Committee. Termination pursuant to the application of
this Section 10.2(g) shall not be deemed termination due to a material
breach of this Agreement.
ARTICLE 11 - CONSEQUENCES OF TERMINATION
11.1 Confidential Information. In the event of termination of this Agreement for
any reason, both parties shall stop using all Confidential Information, as
defined in Section 14.1, supplied by the other party. Upon either party's
request, the other shall return to its owner all written and/or tangible
Confidential Information. Both parties and their Affiliates shall continue
to be bound by the provisions of Article 14 for a period of five (5) years
after the termination of this Agreement or ten (10) years after the
execution of this Agreement, whichever is later; provided however, both
parties shall bind their employees with respect to Confidential Information
for at least five (5) years after termination of such employee's employment
or for as long as such party binds its employees with respect to its own
Confidential Information, whichever is longer; provided however, in no
event shall any employee be bound for a period of time longer than that set
forth herein. Furthermore, Cephalon shall not use any Confidential
Information which is related to the safety or efficacy of the Product
(including adverse drug experience information) and Xxxxxx shall not use
any Confidential Information which is related to the safety or efficacy of
Provigil(R) (Modafinil) until the later of: (i) such time as the Patent for
the Product or the patent for Provigil(R) (Modafinil), as the case may be,
has expired or been declared invalid by a court of competent jurisdiction;
(ii) a period of five (5) years after termination of this Agreement; or
(iii) a period of ten (10) years after the execution of this Agreement.
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11.2 Accrued Obligations. Termination of this Agreement shall not relieve the
parties hereto of any liability which accrued hereunder prior to the
effective date of such termination nor prejudice either party's right to
obtain performance of any obligation provided for in this Agreement which
expressly survives termination.
11.3 Return of Materials. Upon termination or expiration of this Agreement,
Cephalon shall, at Xxxxxx'x election, either destroy or return to Xxxxxx or
its designee all Promotional Materials relating to the Product and all
Sample Packs then in Cephalon's possession.
11.4 Commission Rates.
(a) Material Breach by Cephalon. If this Agreement is terminated due to a
Cephalon material breach or due to an acquisition or change of
ownership under Section 10.2(f) (change of ownership resulting in
breach of Article 8), then the applicable commission rate on the Net
Sales of the Product for the Sales Year in which such termination
occurred shall be the rate which would be applicable if the Net Sales
accrued at the time of termination were the entire Annual Net Sales
for such Sales Year.
(b) Material Breach by Xxxxxx. In the event the Agreement is terminated
due to an Xxxxxx material breach under Section 10.2(a), the applicable
commission rate for the Net Sales then accrued for the Sales Year in
which such termination occurred shall be the pro-rated amount which
would be applicable if the Net Sales were annualized for the entire
Sales Year. [* The confidential material contained herein has been
omitted and has been separately filed with the Commission.]
(c) Termination for Purpose other than Xxxxxx Material Breach or Cephalon
Material Breach. If this Agreement is terminated for any cause other
than those identified in Section 11.4(a) and (b) above, then the
applicable commission rate on the Net Sales of the Product for the
Sales Year in which such termination occurred shall be determined by
calculating the commission payment due as if Section 11.4(a) were
applicable, and the commission payment due as if Section 11.4(b) were
applicable, and taking the average of the results of such
calculations.
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[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
11.6 Residual Payment. Pursuant to Section 4.1(e), Xxxxxx shall pay Cephalon
residual payments for the Residual Periods in accordance with Section
4.1(e), except as set forth in this Section 11.6. if this Agreement
terminates due to: (i) a Cephalon material breach; or (ii) termination
pursuant to Section 10.2(f), then Xxxxxx shall not pay any residual payment
to Cephalon, except as specifically provided in Section l0.2(f)(ii). If
this Agreement terminates due to an Xxxxxx material breach, then Xxxxxx
shall pay the residual payment due Cephalon pursuant to Section 4.1(e). In
the event such termination by Cephalon is due to an Xxxxxx material breach,
the amount of the residual payment due Cephalon shall not be construed as a
penalty or as damages, but rather as compensation, and as such, it shall be
included for purposes of calculating compensatory damages in the event
Cephalon exercises any remedies available to it pursuant to Section 11.7 as
a result of Xxxxxx'x material breach. If the Agreement terminates for any
other reason, such residual payment shall be paid with respect to Net Sales
accrued during the two - twelve (12) month periods immediately following
the termination date and the residual commission rate shall be determined
as follows: the residual payment commission rate as set forth in Section
4.1(e) shall be multiplied by a fraction, the numerator of which is the
number of months completed under this Agreement and the denominator of
which is one hundred four (104) months, the number of months in the full
Collaboration Period. The newly-calculated commission rate shall be the
commission rate used to calculate commissions due to Cephalon for the two -
twelve (12) month periods immediately following the termination date.
Xxxxxx shall pay Cephalon the amounts payable pursuant to this Section 11.6
within forty-five (45) days of the end of each such twelve (12) month
period. Xxxxxx shall make such payment by wire transfer to such bank and
account number as Cephalon may identify to Xxxxxx from time to time.
11.7 Remedies. The fact that either party exercises any right of termination for
material breach that it may have under this Agreement shall not prevent
such party from seeking any other remedy it may be entitled to in law or
equity for material breach, except as set forth in Section 6.2 and Section
11.10. If this Agreement terminates for any reason, except as set forth in
Section 10.2(a) and Section 10.2(f)(i), (iii) and (iv), the parties shall
have no
-47-
further recourse against each other in law or equity, except for any
obligations accrued prior to such termination. Any provision under this
Agreement which provides a remedy to a party for the other party's
non-performance shall be deemed to be an exclusive remedy. The parties
agree to seek any such remedies in law or equity solely through the
mechanism set forth in Section 18.7 hereof.
11.8 Survival. The provisions of Section 6.2, with respect to liquidated
damages, Article 11, Article 12, Article 13, Article 14, and Sections
16.3,16.4 and 16.5 and Sections 18.7 and 18.9, shall survive the
termination of this Agreement; provided however, with respect to Section
16.6, for those matters which arose during the term of this Agreement,
each party shall continue to provide assistance to the other in order to
restrain such infringement as set forth in Section 16.6.
11.9 Intellectual Property. Upon termination of this Agreement for any reason,
all use by Cephalon of Xxxxxx'x company identification (or name), Xxxxxx'x
logo and the Trademarks shall cease. All use by Xxxxxx of Cephalon's
company identification (or name) and Cephalon's logo shall cease.
11.10 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL,
INCIDENTAL, INDIRECT OR CONSEQUENTIAL LOSSES ARISING OUT OF OR RELATING TO
THIS AGREEMENT; PROVIDED, HOWEVER, THIS LIMITATION SHALL NOT APPLY TO
LOSSES FOR WHICH A PARTY IS INDEMNIFIED UNDER THE TERMS OF THIS AGREEMENT.
ARTICLE 12 - RIGHTS TO PROVIGIL(R) (MODAFINIL)
12.1 Right of First Negotiation. Cephalon hereby grants to Xxxxxx, and Xxxxxx
hereby accepts a first right of negotiation to obtain from Cephalon,
co-marketing, co-development and/or license rights to Provigil(R)
(Modafinil) in the Territory.
[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
12.2 Additional Points of Understanding
12.2.1 Cephalon shall not grant any third party any rights that conflict
with Xxxxxx'x right of first negotiation unless Xxxxxx has waived
its right to exercise its right of first negotiation to co-market,
co-develop and/or license with respect to Provigil(R)
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(Modafinil). [* The confidential material contained herein has been omitted and
has been separately filed with the Commission.]
12.2.2 Any information provided with respect to Provigil(R) (Modafinil)
shall be subject to the confidentiality and non-disclosure
obligations set forth in Article 14.
[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
ARTICLE 13 - INDEMNIFICATION
13.1 Xxxxxx Indemnification. Xxxxxx shall defend, indemnify and hold Cephalon
and all of its officers, directors, employees and representatives harmless
from and against all suits, claims, liabilities, costs, damages, judgments
and other expenses (including, but not limited to, reasonable legal
expenses and court costs) to the extent that such claims stem from claims
brought by third parties and are attributable, in whole or in part, to:
(i) Xxxxxx'x breach of this Agreement;
(ii) an infringement claim arising from Cephalon's authorized use or
promotion of the Product or use of the Xxxxxx company name, logo,
trade dress, service xxxx or the Trademarks in connection with the
Product;
(iii) the Product (including claims relating to the manufacture of the
Product) or Xxxxxx'x promotion of the Product, (including, but not
limited to, claims made with respect to Xxxxxx advertising or
Xxxxxx-provided Promotional Materials, and claims made with respect
to advertising or Promotional Materials approved by Xxxxxx'x Medical
Review Process pursuant to Section 3.5(e) herein, provided and to
the extent such claims are based upon the negligent review and
approval provided by Xxxxxx'x Medical Review Process) including, but
not limited to, death or personal injury;
-49-
(iv) Xxxxxx'x violation of applicable law, including, without limitation,
the Sampling Act, in the performance of this Agreement; or
(v) the negligence, recklessness or willful misconduct on the part of
Xxxxxx, its officers, directors, Xxxxxx Representatives and other
employees or representatives with respect to the Product or in the
performance of the Agreement, including, but not limited to, product
liability claims arising from out-of-label promotions made by Xxxxxx
or Xxxxxx Representatives with respect to the Product;
provided that Xxxxxx shall not be required to indemnify Cephalon to the
extent any such claim is attributable to the negligence or willful
misconduct of Cephalon or the Cephalon Representatives in the
performance of their obligations hereunder, including, but not limited
to, out-of-label promotion of the Product and/or any breach by Cephalon
of this Agreement. For purposes of Section 13.1(v) above only, Xxxxxx
shall not be considered negligent, reckless or willful if such claim
arises in connection with Xxxxxx'x performance under this Agreement, so
long as such performance was in accordance with the terms of this
Agreement; nor shall Xxxxxx be considered negligent, reckless or
willful for purposes of Section 13.1(v) only, if such claim arises with
respect to content of the Promotional Materials, advertising or other
materials provided to Xxxxxx by Cephalon as long as Xxxxxx has
distributed or employed such advertising, Promotional Materials or
other such materials in accordance with the terms of this Agreement,
except if such claim arises with respect to the negligent review and
approval of Cephalon advertising or Promotional Materials approved by
Xxxxxx pursuant to Section 3.5(e) hereof.
13.2 Cephalon Indemnification. Cephalon shall defend, indemnify and hold
Xxxxxx and all of its officers, directors, employees and
representatives harmless from and against all suits, claims,
liabilities, costs, damages, judgments and other expenses (including
but not limited to, reasonable legal expenses and court costs) to the
extent that such claims stem from claims brought by third parties and
are attributable, in whole or in part, to:
(i) Cephalon's breach of this Agreement;
(ii) a trademark infringement claim arising from Xxxxxx'x
authorized use of the Cephalon company name and/or logo in
connection with the Product;
(iii) Cephalon advertising or Cephalon-provided Promotional
Materials (except to the extent such claim is based on such
advertising or Promotional Materials having been negligently
reviewed and approved by Xxxxxx'x Medical Review Process
pursuant to Section 3.5(e) herein), including, but not limited
to, death or personal injury;
(iv) Cephalon's violation of applicable law, including, without
limitation, the Sampling Act, in the performance of this
Agreement; or
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(v) the negligence, recklessness or willful misconduct on the part
of Cephalon, its officers, directors, Cephalon
Representatives, and other employees or representatives with
respect to the Product or in the performance of this
Agreement, including, but not limited to, product liability
claims arising from out-of-label promotions made by Cephalon
or Cephalon Representatives with respect to the Product;
provided that Cephalon shall not be required to indemnify Abbott to
the extent any such claim is attributable to the negligence or
willful misconduct of Abbott or the Abbott Representatives in the
performance of their obligations hereunder, including, but not
limited to, out-of-label promotion of the Product and/or any breach
by Abbott of this Agreement. For purposes of Section 13.2(v) above
only, Cephalon shall not be considered negligent, reckless or
willful if such claim arises in connection with Cephalon's
performance under this Agreement, so long as such performance was in
accordance with the terms of this Agreement; nor shall Cephalon be
considered negligent, reckless or willful for purposes of Section
13.2(v) only, if such claim arises with respect to the content of
the Promotional Materials, Product labeling, advertising or other
materials provided to Cephalon by Abbott so long as Cephalon has
distributed or employed such Promotional Materials, Product
labeling, advertising or such other materials in accordance with
the terms of this Agreement.
13.3 Indemnification Procedures. Upon obtaining knowledge of the institution of
any action, proceeding, or other event which could give rise to a claim of
indemnity hereunder, the party seeking indemnification (the "Indemnified
Party") shall promptly notify in writing the other party thereof (the
"Indemnifying Party"). The Indemnifying Party shall have the right, at its
expense, to employ counsel to defend such claim or demand and the
Indemnified Party shall have the right, but not the obligation, at its
expense to participate in the defense of any such claim or demand. So long
as the Indemnifying Party is defending such claim or demand in good faith,
the Indemnified Party shall not settle such claim or demand without the
Indemnifying Party's consent. The Indemnified Party shall make available
to the Indemnifying Party all records and other material reasonably
required by it in contesting a claim or demand against the Indemnified
Party and shall cooperate in the defense thereof.
ARTICLE 14 - CONFIDENTIALITY
14.1 Non-Disclosure. Neither party shall disclose any information received from
the other party or an Affiliate of such other party pursuant to this
Agreement or to any previous agreements between the parties or their
Affiliates relating to this Agreement (including Product,
Provigil(R)(Modafinil) and Depakote(R) and information received by
Cephalon pursuant to Article 5 with respect to adverse drug experience
data) (the "Confidential Information") without the other party's written
consent; provided however, either party may disclose Confidential
Information as reasonably necessary to its Affiliates in order to perform
its obligations hereunder. Each party shall ensure that any Affiliate
receiving Confidential Information pursuant to this Article 14 shall not
disclose such information
-51-
and such Affiliate shall conduct itself as if it were bound by the
provisions of this Agreement with respect to Confidential Information.
Confidential Information shall not include:
(a) information which is or was known to the receiving party or its
Affiliates at the time of its disclosure as evidenced by such
party's or its Affiliates' written records, provided such
information was not already subject to a confidentiality obligation;
(b) information disclosed to the receiving party by a third party (other
than its Affiliates) having the right to disclose such information;
(c) information which becomes patented, published or otherwise part of
the public domain as a result of acts of the disclosing party or of
a third party (other than the disclosing party's Affiliates)
obtaining such information and having the right to disclose the
same;
(d) information which is developed by or for a party or its Affiliates
independently of: (i) the information provided under this Agreement;
and independently of (ii) information provided under any
co-promotion, collaboration or co-marketing agreement entered into
by Cephalon or its Affiliates with Abbott or its Affiliates; as
evidenced by such party's or Affiliate's written records; or
(e) information which is required to be disclosed by law, provided that
in such case the receiving party shall immediately inform the
disclosing party and allow the disclosing party to obtain such
protection of the Confidential Information as may be legally
permissible prior to disclosure.
14.2 Non-Use. Each party agrees that it shall not use Confidential Information
obtained as set forth in Section 14.1 above for any purpose other than
that indicated in this Agreement without the prior written approval of the
other party.
14.3 Disclosure of Confidential Information to Third Parties.
(a) Auditors. If either party appoints a designee to perform an audit of
the books and records of the other party pursuant to the terms of
any of the audit provisions provided for hereunder, then such
auditor shall execute a written confidentiality agreement with the
party to be audited, which confidentiality agreement shall be at
least as stringent as that provided herein. The scope of such
designee's report to the hiring party shall be strictly limited to
the scope of the audit permitted pursuant to the terms of this
Agreement and a copy of such report shall be delivered to both
parties.
(b) Other Parties. If either party appoints any consultant to advise it
in connection with its performance of this Agreement, then such
party shall execute a written confidentiality agreement with such
consultant, which confidentiality agreement
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shall be at least as stringent as that provided herein. Prior to the
disclosure of any confidential information to such consultant, the
consent of the other party shall be obtained, which consent shall
not be unreasonably withheld.
ARTICLE 15 - PUBLIC ANNOUNCEMENTS
Each party agrees that, except as may be required by law, it shall not disclose
the existence, substance or details of this Agreement (or any other publicity
related thereto) without the prior written consent of the other party; provided,
however, nothing contained herein shall be deemed to prohibit Abbott from
issuing any publicity, press release or announcement relating to the Product
which does not mention Cephalon or refer to this Agreement; and provided further
that a party shall not be required to obtain consent of the other to
subsequently disclose the contents of any previously approved publicity, press
release or announcement. Cephalon shall only disclose details of this Agreement
to those Cephalon employees, including Cephalon Representatives, on a need to
know basis. In cases in which disclosure may be required by law, the disclosing
party, prior to such disclosure, shall notify the non-disclosing party of the
contents of the proposed disclosure. Consistent with applicable law, the
non-disclosing party shall have the right to make reasonable changes to the
disclosure to protect its interests. The disclosing party shall not unreasonably
refuse to include such changes in its disclosure.
ARTICLE 16 - TRADEMARKS
16.1 Promotion. Cephalon shall promote the Product in the Territory only under
the Trademarks and using company names, service marks and devices approved
by Abbott and only using Promotional Materials approved by Abbott pursuant
to Section 3.5.
16.2 Compliance with Laws. Cephalon shall, when referring to Xxxxxx'x
trademarks and the Trademarks, company names, trade dress, service marks
or devices, diligently comply with all laws pertaining to trademarks,
service marks, trade dress or other intellectual property rights at any
time in force in the Territory. Abbott shall, when referring to Cephalon's
company name and/or logo, diligently comply with all laws pertaining to
company names and/or logos at any time in force in the Territory.
16.3 No Assertion of Right. Cephalon shall not have, assert or acquire any
right, title or interest in or to the Trademarks or any part of any label,
company name, trade dress, service xxxx or device applied by Abbott,
except those which are owned by Cephalon as set forth in Exhibit 16.3
attached hereto. Except as provided herein, Abbott shall not have, assert
or acquire any right, title or interest in or to Cephalon's company name
and/or logo.
16.4 Validity. Cephalon acknowledges the validity of Xxxxxx'x right, title and
interest in and to the Trademarks or any labels, company names, trade
dress, service marks, logos and devices as set forth in Exhibit 4.2.
Cephalon shall not take or fail to take any action which may impair any
such right, title or interest in the Trademarks, other than as provided
for herein; nor shall Cephalon take any action which may create any right,
title,
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or interest in the name "Abbott" or the Trademarks adverse to Abbott or
any Abbott Affiliate. Abbott acknowledges the validity of Cephalon's
right, title and interest in and to its company name and/or logo as set
forth in Exhibit 4.2. Abbott shall not take or fail to take any action
which may impair any such right, title or interest in Cephalon's company
name and/or logo, other than as provided for herein; nor shall Abbott take
any action which may create any right, title, or interest in the name
"Cephalon" adverse to Cephalon or any Cephalon Affiliate.
16.5 Non-Use. Cephalon shall not use the Trademarks (or any trademark
confusingly similar thereto), label, company name, trade dress, service
xxxx, logo or device which is applied to the Product, on any other goods
or products, notwithstanding that such goods or products are dissimilar to
the Product or have a different use. Abbott shall not use Cephalon's
company name and/or logo which is applied to the Product, on any other
goods or products, notwithstanding that such goods or products are
dissimilar to the Product or have a different use.
16.6 Notice of Infringement. Cephalon shall give Abbott prompt notice of any
infringement or threatened infringement of the Trademarks, label, company
name, trade dress, service xxxx, logo or device used in connection with
the Product and shall, upon Xxxxxx'x request and at Xxxxxx'x sole expense
if Abbott elects, in its sole discretion, to prosecute such infringement
action, use its best efforts to assist Abbott to restrain the infringement
or threatened infringement. Abbott shall give Cephalon prompt notice of
any infringement or threatened infringement of Cephalon's company name
and/or logo used in connection with the Product and shall, upon Cephalon's
request and at Cephalon's sole expense if Cephalon elects, in its sole
discretion, to prosecute such infringement action, use its best efforts to
assist Cephalon to restrain the infringement or threatened infringement.
16.7 License Agreement. if Abbott determines that it is necessary or
appropriate to reflect the parties' agreement with respect to the use of
the Trademarks in a separate agreement, Cephalon agrees that it will
execute such agreement. Such agreement shall reflect the terms hereof with
respect to the use of the Trademarks.
ARTICLE 17 - FORCE MAJEURE
Failure of either party to perform its obligations under this Agreement (except
for the payment of monies due and owing) shall not subject such party to any
liability to the other if such failure is caused or occasioned by act of God, or
the public enemy, fire, explosion, flood, drought, war, riot, sabotage, embargo,
strikes, or other labor trouble, failure in whole or in part, of Xxxxxx'x
suppliers to deliver on schedule materials, equipment or machinery to Abbott,
interruption of or delay in transportation, compliance with any order,
regulation or request of any government of competent jurisdiction or any
officer, department, agency or committee thereof, including requisition or
allocation or establishment of priority, or by compliance with a request
authorized by such governmental authority of any manufacturer for material to be
used by it, or by any other event or circumstance of like or different character
to the foregoing beyond the reasonable control of the party so failing. The
party suffering an event of Force Majeure shall immediately
-54-
notify the other party and shall use all reasonable efforts to minimize the
damages suffered by both parties. Both parties shall cooperate in good faith in
order to minimize such damages and, subject to the provisions of Section
10.2(d), reach an agreement as to how to proceed.
ARTICLE 18 - GENERAL
18.1 Property Interest. Abbott shall retain all property interests in the
Product until the point of sale and shall retain such property interest in
all Sample Packs and Promotional Materials until their delivery to
Cephalon. Cephalon shall neither have nor represent that it has any
control or property interest in the Product. Nothing contained herein
shall be deemed to grant, either expressly or impliedly, a license or
other right or interest in any patent, trademark, including the
Trademarks, or other similar intellectual property of Abbott except as may
be necessary for Cephalon to perform its obligations as provided in this
Agreement.
18.2 Assignment. Neither party may assign its interest under this Agreement
without the prior consent of the other party [* The confidential material
contained herein has been omitted and has been separately filed with the
Commission.]
18.3 Headings. All headings are for reference purposes only and shall not in
any way affect the meaning or interpretation of this Agreement.
18.4 Notices. All notices, consents, approvals, orders, acceptances and
requests shall be in writing addressed to the parties at the following
addresses, respectively.
If to Cephalon: President
Cephalon, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Fax: (000) 000-0000
With a copy to: Senior Vice President, Secretary and
General Counsel
Cephalon, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxxxxx 193804245
Fax: (000)000-0000
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If to Abbott: Vice President,
Pharmaceutical Commercial Operations
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxx. 533; Bldg. AP30
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
With a copy to: Senior Vice President, Secretary and
General Counsel
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxx. 00X; Bldg. AP6D
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Fax: (000)000-0000
Notices, consents and approvals shall be effective when delivered
personally or sent by telex, facsimile or other telegraphic mode or when
sent by registered or certified mail, postage prepaid, so addressed. By
written notice, a party may change its address for future communications.
18.5 Waiver. No failure on the part of either party to exercise, and no delay
in exercising any right or remedy shall operate as a waiver of such right
or remedy, nor shall any single or partial exercise of any right or remedy
preclude any further or other exercise of such right or remedy. All rights
and remedies under this Agreement are cumulative and shall not be deemed
exclusive of any other rights or remedies provided by law except as
otherwise provided herein.
18.6 Severance. If any Article or part thereof contained in this Agreement is
declared invalid by any court of competent jurisdiction or a government
agency having jurisdiction, such declaration shall not affect the
remainder of the Article or the other Articles and each shall remain in
full force and effect. To the extent possible, the parties shall reform
such invalidated Article or part thereof in a manner that will render such
provision valid without impairing the parties' original intent.
18.7 Dispute Resolution.
(a) General. The parties recognize that a bonafide dispute as to certain
matters may arise from time to time during the term of this
Agreement which may relate to either party's rights and/or
obligations hereunder. The parties agree that they shall use all
reasonable efforts to resolve any dispute which may arise in an
amicable manner.
(b) Management Resolution. If the parties are unable to resolve such a
dispute within thirty (30) days, either party may, by notice to the
other party, have such dispute
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referred to the respective officers of the parties designated below.
Such officers shall attempt to resolve the referred dispute by good
faith negotiations within thirty (30) days after such notice is
received. The said designated officers are as follows:
For Abbott: Senior Vice President,
Pharmaceutical Operations
For Cephalon: President
(c) Mediation and Alternative Dispute Resolution. if the designated
officers are not able to resolve such dispute within such thirty
(30) day period, then either party may initiate the alternative
dispute resolution procedure set forth in Exhibit 18.7.
18.8 Year 2000 Compliance. Both parties hereby certify to the other that their
respective internal computer systems are Year 2000 compliant and that
neither party will experience difficulties or changes in service levels
related to the change in century as a result of the other party's internal
computer systems not being able to process the century date change. Each
party hereby represents and warrants to the other that all computer
hardware and software used by each of them in performing their obligations
under this Agreement will (i) have no lesser functionality with respect to
records containing dates before or after January 1, 2000, than previously
with respect to dates prior to January 1, 2000; and (ii) be interoperable
with other software used by the other party which may deliver records to,
receive records from, or otherwise interact with software in the course of
data processing.
18.9 Governing Law. The laws of the State of New York, United States of
America, excluding conflicts of law principles, shall govern the
interpretation, performance and enforcement of this Agreement.
18.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original and all of which, when taken
together, shall constitute the Agreement.
18.11 Non-Solicitation. During the Collaboration Period and for one (1) year
thereafter, neither party shall target or recruit the other party's
employees without the other party's prior written consent. The parties
agree that this provision shall not apply to situations where a party's
employee is hired by the other party as a result of such employee
responding to an advertisement to the general public that was placed by
the hiring party.
18.12 Entire Agreement. This Agreement, including the Exhibits, contains the
entire understanding between the parties hereto with respect to the
subject matter hereof. This Agreement cannot be amended, except by a
writing signed by the parties.
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IN WITNESS WHEREOF, each of the parties has by its duly authorized
representative signed this Agreement as of the day and year first above written.
XXXXXX LABORATORIES INC. CEPHALON, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx By /s/ Xxxxx Xxxxxxx, Xx.
------------------------------------ ---------------------------
Xxxxxx X. Xxxxxxxxxx Xxxxx Xxxxxxx, Xx., PhD
Vice President, President and
Pharmaceutical Commercial Operations Chief Executive Officer
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Exhibit 1.22
Promotional Expense Definitions
------------------------------------------------------------------------------------------------------------------------------------
Category Definition
------------------------------------------------------------------------------------------------------------------------------------
Product Samples Production and shipping cost of samples
------------------------------------------------------------------------------------------------------------------------------------
Discretionary Funds Funds allocated to sales reps to use to promote products, speaker programs, reminder items,
special events
------------------------------------------------------------------------------------------------------------------------------------
Continuing Education Programs Costs to provide development programs for sales representatives
------------------------------------------------------------------------------------------------------------------------------------
Grants/Contributions Funds given to institutions or third parties to support product research and xxxxxx general
company goodwill
------------------------------------------------------------------------------------------------------------------------------------
Reminder Items/Giveaways Tangible goods to be distributed by reps to doctors including items such as mugs, golf
balls, pens
------------------------------------------------------------------------------------------------------------------------------------
Sales Aids/Detail Aids Printed reference materials for reps. Usually, a glossy multi-page booklet highlighting a
product's key attributes and used in a product detail
------------------------------------------------------------------------------------------------------------------------------------
MD/Pharmacist/Nurse Kits Brochures, pamphlets, and other information distributed to clinicians, excluding reprints
------------------------------------------------------------------------------------------------------------------------------------
Incentives Any cash bonuses, gift certificates, tangible items to be distributed to sales reps to
motivate them
------------------------------------------------------------------------------------------------------------------------------------
Product and Sales Training Any sales rep training cost including: materials at the training classes along with the
meeting itself
------------------------------------------------------------------------------------------------------------------------------------
Speaker Program Cost of staging speaker programs including: materials at the training classes along with the
meeting itself
------------------------------------------------------------------------------------------------------------------------------------
Convention - Exhibition Costs of exhibiting at major conventions, including booth displays (not construction)
------------------------------------------------------------------------------------------------------------------------------------
Convention - Symposia Costs of satellite symposia/meetings conducted at major conventions for MD's and ancillary
health professionals
------------------------------------------------------------------------------------------------------------------------------------
Fellowships - Tutorials All costs to support doctors/other third part participation in fellowships, tutorials, and
preceptorships, and general medical education
------------------------------------------------------------------------------------------------------------------------------------
Journal Ads Costs to run journal ads
------------------------------------------------------------------------------------------------------------------------------------
Public Relations Services provided by a public relations firm including: monthly fees, out-of-pocket, and
other fees
------------------------------------------------------------------------------------------------------------------------------------
Ad Agency Fees Services provided by an ad agency including: monthly fees, out-of-pocket expenses, and other
fees
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Market Research/Statistics/Reports Costs of syndicated reports, databases, and other reports, as well as primary research
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Market Related Clinical Studies Phase IIIB/IV studies which support the growth of products through data creation
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Indigent Care Programs Operation costs, management and drug, to support uninsured low-income segment for limited
duration
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Expanded Access Programs (Small Phase IV studies supporting academic center research of the Product including drug
and operating costs)
------------------------------------------------------------------------------------------------------------------------------------
Advisory Panels/Thought Leader Panels Cost of running advisory panels with physicians to obtain information on current therapies
and future trends
------------------------------------------------------------------------------------------------------------------------------------
Reprints Costs of production and distribution of reprints from key journals related to the product
------------------------------------------------------------------------------------------------------------------------------------
Internet Programs Internet based programs that focus on the Product, provide medical and promotional
information, and target multiple audiences. Examples include a Cephalon web site with
promotional content and links to chat rooms, e-mail or related medical sites.
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EXHIBIT 3.6
Cost of Sample Packs
1999
SIZE PRICE
---- -----
1 CASE* [* The confidential material contained herein has been omitted
and has been separately filed with the Commission.]
* 40 cartons, each containing a 40 count bottle of 4 mg.
Delivery F.O.B. Abbott facility
EXHIBIT 3.8
Members of Collaboration Committee
ABBOTT
[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
CEPHALON
[* The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
EXHIBIT 4.2
Cephalon and Xxxxxx Company Identifications (Names) and/or Logos
ABBOTT
XXXXXX LABORATORIES
XXXXXX LABORATORIES INC.
ABBOTT
GABITRIL(R)
FILMTAB(R)
[LOGO]
[LOGO] Cephalon
EXHIBIT 16.3
Cephalon Trademarks. Company Identifications (Names) and Logos
[LOGO] Cephalon
EXHIBIT 18.7
Alternative Dispute Resolution
The parties recognize that a bona fide dispute as to certain matters may arise
from time to time during the term of this Agreement which relates to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution (ADR) provision, a party must send written notice
of the dispute to the other party for attempted resolution by good faith
negotiations between their respective presidents (or their equivalents) of the
affected subsidiaries, divisions, or business units within twenty-eight (28)
days after such notice is received (all references to "days" in this ADR
provision are to calendar days). If the matter has not been resolved within
twenty-eight (28) days of the notice of the dispute, or if the parties fail to
meet within such twenty-eight (28) days, either party may initiate an ADR
proceeding as provided herein. The parties shall have the right to be
represented by counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the other
party of the issues to be resolved by ADR. Within fourteen (14) days after
receipt of such notice, the other party may, by written notice to the party
initiating the ADR, add additional issues to be resolved within the same ADR.
2. Within twenty-one (21) days following receipt of the original ADR notice, the
parties shall select a mutually acceptable neutral to preside in the resolution
of any disputes in this ADR proceeding. If the parties are unable to agree on a
mutually acceptable neutral within such period, either party may request the
President of the CPR Institute for Dispute Resolution (CPR), 000 Xxxxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to select a neutral pursuant to the
following procedures:
(a) The CPR shall submit to the parties a list of not less than five (5)
candidates within fourteen (14) days after receipt of the request, along with a
Curriculum Vitae for each candidate. No candidate shall be an employee,
director, or shareholder of either party or any of their subsidiaries or
affiliates.
(b) Such list shall include a statement of disclosure by each candidate of
any circumstance likely to affect his or her impartiality.
(c) Each party shall number the candidates in order of preference (with the
number one (1) signifying the greatest preference) and shall deliver the list to
the CPR within seven (7) days following receipt of the list of candidates. If a
party believes a conflict of interest exists regarding any of the candidates,
the party shall provide a written explanation of the conflict to the CPR along
with its list showing its order of preference for the candidates. Any party
failing to return a list of preferences on time shall be deemed to have no order
of preference.
(d) If the parties collectively have identified fewer than three (3)
candidates deemed to have conflicts, the CPR shall designate as neutral the
candidate for whom the parties collectively have indicated the greatest
preference. If a tie shall result between two candidates, the CPR may designate
either candidate. If the parties collectively have identified three (3) or more
candidates deemed to have conflicts, the CPR shall review the explanations
regarding conflicts, and, in its sole discretion, may either (i) immediately
designate as the neutral the candidate for whom the parties collectively have
indicated the greatest preference, or (ii) issue a new list of not less than
five (5) candidates, in which case the procedures set forth in subparagraphs
2(a) - 2(d) shall be repeated.
3. No earlier than twenty-eight (28) days or later than fifty-six (56) days
after the selection, the neutral shall hold a hearing to resolve each of the
issues identified by the parties. The ADR proceeding shall take place at a
location agreed upon by the parties. If the parties cannot agree, the neutral
shall designate a location other than the principle place of business of either
party or any of their subsidiaries or affiliates.
4. At least seven (7) days prior to the hearing, each party shall submit the
following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely in any oral
or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the hearing, and
a short summary of the anticipated testimony of each witness;
(c) a proposed ruling on each issue to be resolved, together with a request
for a specific damage award or other remedy for each issue. The proposed rulings
and remedies shall not contain any recitation of the facts or any legal
arguments and shall not exceed one (1) page per issue.
(d) a brief in support of each party's proposed rulings and remedies
provided that the brief shall not exceed twenty (20) pages. This page limitation
shall apply regardless of the number of issues raised in the ADR proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d), no discovery shall
be required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents.
5. The hearing shall be conducted on two (2) consecutive days and shall be
governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each party has had the
five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately after their direct
testimony, and cross examination shall be charged against the party conducting
the cross-examination.
(c) The party initiating the ADR shall begin the hearing and, if it chooses
to make an opening statement, shall address not only issues it raised but also
any issues raised by the responding party. The responding party, if it chooses
to make an opening statement, also shall address all issues raised in the ADR.
Thereafter, the presentation of regular and rebuttal testimony and documents,
other evidence, and closing arguments shall proceed in the same sequence.
(d) Except when testifying, witnesses shall be excluded from the hearing
until closing arguments.
(e) Settlement negotiations, including any statements made therein, shall
not be admissible under any circumstances. Affidavits prepared for purposes of
the ADR hearing also shall not be admissible. As to all other matters, the
neutral shall have sole discretion regarding the admissibility of any evidence.
6. Within seven (7) days following completion of the hearing, each party may
submit to the other party and the neutral a post-hearing brief in support of its
proposed rulings and remedies, provided that such brief shall not contain or
discuss any new evidence and shall not exceed ten (10) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
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7. The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its entirety the
proposed ruling and remedy of one of the parties on each disputed issue but may
adopt one parties proposed rulings and remedies on some issues and the other
party's proposed rulings and remedies on other issues. The neutral shall not
issue any written opinion or otherwise explain the basis of the ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the prevailing
party (including all expert witness fees and expenses), the fees and expenses of
a court recorder, and any expenses for a hearing room, shall be paid as follows:
(a) If the neutral rules in favor of one party on all disputed issues in
the ADR, the losing party shall pay 100% of such fees and expenses.
(b) If the neutral rules in favor of one party on some issues, and the
other party on other issues, the neutral shall issue with the rulings a written
determination as to how such fees and expenses shall be allocated between the
parties. The neutral shall allocate the fees and expenses in a way that bears a
reasonable relationship to the outcome of the ADR, with the party prevailing on
more issues, or on issues of greater value or gravity, recovering a relatively
larger share of its legal fees and expenses.
9. The rulings of the neutral and the allocation of fees and expenses shall be
binding, non-reviewable, and non-appealable, and may be entered as a final
judgment in any court having jurisdiction.
10. Except as provided in paragraph 9 or as required by law, the existence of
the dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings, and briefs), and the rulings
shall be deemed Confidential Information. The neutral shall have the authority
to impose sanctions for unauthorized disclosure of Confidential Information.
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