Exhibit 10.17(c)
Dated 27th November 2000
CEPHALON INC
and
NOVARTIS AG
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COLLABORATION AGREEMENT
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CMS Xxxxxxx XxXxxxx
Xxxxx Xxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
T x00(0)00 0000 0000
F x00(0)00 0000 0000
Doc Ref: (51771728.05)
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Table of Contents
1. Definitions and Interpretation..............................................1
2. The Collaboration...........................................................7
3. Ancillary Agreements and Obligations........................................8
4. Collaboration Committee.....................................................8
5. Executive Committee........................................................11
6. Disputes...................................................................12
7. Operating Committee........................................................13
8. Finance and Accounting Matters.............................................14
9. Supply of Product..........................................................16
10. Warranties................................................................16
11. Indemnity.................................................................18
12. Special Payments..........................................................20
13. Force Majeure.............................................................23
14. Term and Termination......................................................24
15. Confidential information..................................................25
16. Competition Restrictions..................................................26
17. Medical Information and Reporting.........................................27
18. Notices...................................................................28
19. Relationship of Parties...................................................29
20. Waiver....................................................................29
21. Severability..............................................................30
22. Third Party Rights........................................................30
23. Governing Law.............................................................30
24. Transmission of Rights....................................................31
25. Whole Agreement...........................................................31
26. Variations................................................................31
27. Costs.....................................................................31
28. Publicity.................................................................31
29. Counterparts..............................................................32
Schedule 1....................................................................34
Calculation and Allocation of Collaboration Profits......................34
Schedule 2....................................................................36
The Products.............................................................36
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 3....................................................................38
Trade Marks..............................................................38
Schedule 4....................................................................39
Collaboration Plan............................................................39
Schedule 5....................................................................40
Supply and Distribution of Novartis Products.............................40
Schedule 6....................................................................48
Part I - Collaboration Committee.........................................48
Part II - Executive Committee............................................48
Schedule 7....................................................................49
Special Payments ...................................Error! Bookmark not defined.
Schedule 8 Cephalon Licence Fee Payment.......................................50
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
THIS AGREEMENT is made on 27th November 2000
BETWEEN
(1) CEPHALON, INC. a company incorporated in Delaware, USA whose principal
office is at 000, Xxxxxxxxxx Xxxxxxx, Xxxx Xxxxxxx, 00000-0000,
Xxxxxxxxxxxx, XXX ("C. Inc"); and
(2) NOVARTIS AG a company incorporated in Basel Switzerland whose principal
office is at Xxxxxxxxxxxx 00 XX-0000 Xxxxx Xxxxxxxxxxx ("NAG").
WHEREAS
(A) The parties hereto or their Affiliates are engaged in the manufacture,
marketing, distribution and sale of pharmaceutical products.
(B) By a Licence of even date herewith, NAG will license to C. Inc for a
period of 10 (ten) years the Trademarks and Product Licences relating to
the Novartis Products.
(C) The parties wish to collaborate directly and through their respective
Affiliates in the promotion and sale of certain products of each of them.
NOW IT IS AGREED as follows:-
1. Definitions and Interpretation
1.1 In this Agreement the following terms shall have the following meanings:
"Affiliate" means any company, partnership or other entity which directly
or indirectly Controls, is Controlled by or is under common Control with
the Party in question including as a Subsidiary or Holding Company;
"Agreement" means this agreement and any and all schedules, appendices and
other addenda to it as may be varied from time to time in accordance with
the provisions of this Agreement.
1
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
"Annual Operating Plan" means the budget and operating plan of the
Collaboration in respect of any particular financial year;
"Cephalon" means C. Inc or any of its Affiliates as the context may
require;
"Cephalon Product" means the product listed in Part I of Schedule 2
together with such additions as the Parties may agree in writing to add to
the Collaboration from time to time;
"Collaboration" means the collaboration between Cephalon and Novartis
pursuant to the Collaboration Agreements for the promotion, marketing and
sale of the Products in the Territory;
"Collaboration Agreements" means this Agreement, the Licence, the
Distribution Agreement and the Managed Services Agreement;
"Collaboration Committee" or "CC" means the committee to be established
pursuant to Clause 4.1 hereof;
"Collaboration Plan" means the financial plan for the Collaboration set
out in Schedule 4 or the same as from time to time amended with the
agreement of the Collaborators.
"Collaborator" means Cephalon or Novartis as the case may be.
"Commencement Date" means 1 January 2001;
"Control" means the ownership(direct or indirect) of more than 50% of the
issued share capital, or the legal power to direct or cause the direction
of the general management and policies of the Party in question and
"Controlled" and "Controller" shall be construed accordingly;
"Cost of Goods" means the cost of goods determined as per Schedule 1;
2
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
"Distribution Agreement" means the Agreement in the agreed terms for the
supply and distribution of the Cephalon Product to be entered into
pursuant to Clause 2;
"Executive Committee" or "EC" means the committee to be established
pursuant to Clause 5 hereof;
"Force Majeure" means in relation to any Party any event or circumstance
which is beyond the reasonable control of that Party which event that
Party could not reasonably be expected to have taken into account at the
date of this Agreement including acts of God, war, riot, civil commotion,
any overriding emergency, fire, flood, storm and industrial dispute (other
than industrial dispute affecting only the employees of the Party
suffering the event of force majeure or any of its agents or
subcontractors);
"Good Manufacturing Practice" or "GMP" means the regulatory standards and
principles and guidelines of good manufacturing practice in effect from
time to time relating to the manufacture of medicinal products including,
without limitation, standards for equipment, facilities, production and
quality control established by the applicable Governmental or Regulatory
Authority;
"Governmental or Regulatory Authority" means any local or national agency,
authority, department, court, tribunal, arbitrator, inspectorate,
minister, ministry official or public or statutory person (whether
autonomous or not) of, or of any government of, any country having
jurisdiction over this Agreement or any of the Parties or any of the
Products or in respect of the regulation of medicinal products in the
Territory including the European Commission and the European Court of
Justice;
"IAS" means the international generally accepted accounting principles;
"Insolvency Event" means in relation to any Party any one of the
following:-
(a) a notice shall have been issued to convene a meeting for the purpose
of passing a resolution to wind up that Party or such a resolution
shall have
3
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
been passed other than a resolution for the solvent reconstruction
or reorganisation of that Party; or
(b) a resolution (other than a resolution for the solvent reconstruction
or reorganisation of that Party) shall have been passed by that
Party's Directors to seek a winding up or administration order or a
petition for a winding up or administration order shall have been
presented against that Party or such an order shall have been made;
or
(c) a receiver, administrative receiver, receiver and manager, interim
receiver, custodian, sequestrator or similar officer is appointed in
respect of that Party or over a substantial part of its assets or
any third party takes steps to appoint such an officer in respect of
that Party or an encumbrancer takes steps to enforce or enforces its
security; or
(d) a proposal for a voluntary arrangement shall have been made in
relation to that Party under Part I Insolvency Xxx 0000; or
(e) a step or event shall have been taken or arisen outside the
Territory which is similar or analogous to any of the steps or
events listed above; or
(f) that Party suspends or threatens to suspend making payments to all
or some of that Party's creditors or the Party submits to any type
of voluntary arrangement; or
(g) where that Party is resident in the Territory it is deemed to be
unable to pay its debts within the meaning of Xxxxxxx 000 Xxxxxxxxxx
Xxx 0000;
"Licence" means the Licence of even date between NAG and C. Inc under
which NAG licenses to X.Xxx the Trademarks and Product Licences to the
Novartis Products for a period of up to 10 (ten) years;
"Managed Services Agreement" means the Agreement in the agreed terms for
the provision of certain services to the Collaboration by Cephalon to be
entered into pursuant to Clause 2;
4
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
"Net Profit" means Net Sales less the Cost of Goods and other items
customarily subtracted in accordance with IAS and agreed by the CC;
"Net Sales Revenue" means in relation to the Products the aggregate amount
of sales to third parties represented by invoices and/or other sales
documentation prepared or presented by or on behalf of Novartis
facilitating or making sales of Products on its own behalf or on behalf of
Cephalon but less the following amounts:-
i) discounts, including cash discounts, trade allowances or
rebates actually allowed or granted; and,
ii) credits or allowances actually granted upon claims or returns,
regardless of the party requesting the return in accordance
with criteria agreed between the Collaborators;
"Novartis" means NAG or any of its Affiliates as the context may require;
"Novartis Products" means the Products listed in Part II of Schedule 2
together with such additions as the Parties may agree in writing to add to
the Collaboration from time to time;
"Operating Committee" or "OC" means the committee to be established
pursuant to Clause 7.1 hereof;
"Party" means C. Inc or NAG (or their respective successors) and "Parties"
shall mean both of them;
"Products" means the Cephalon Product and the Novartis Products taken
together;
"Product Licence" means the authorisation for the sale and marketing of a
Product in the Territory granted by a Governmental or Regulatory Authority
as may be varied from time to time by Cephalon in the case of Cephalon
Products or Novartis in the case of the Novartis Products;
5
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
"Rights" means all or any copyright, design right, trademarks, tradenames,
patents, know how, trade secrets and other intellectual property or other
proprietary rights which may at any time subsist throughout all or any
part of the world whether registered or otherwise including, without
limitation the Trademarks and all extensions and renewals thereof;
"SKU" means stock keeping unit;
"Specification" means the specification for a Product set out in the
relevant Product Licence;
"Subsidiaries" or "Holding Company" has the meaning ascribed to those
expressions by Section 736 of the Companies Xxx 0000 as amended;
"Term" means the period of [**] from the Commencement Date;
"Territory" means the United Kingdom together (in the case of the Cephalon
Product only) with the Republic of Ireland or as may be agreed between the
parties from time to time;
"Trademarks" means the registered trademarks for the Products set out in
Schedule 3;
"Working Day" means a day other than a Saturday, Sunday, bank or other
public holiday in the United Kingdom, the USA or Switzerland;
1.2 In this Agreement:
1.2.1 unless the context otherwise requires all references to a particular
Clause, Schedule or paragraph shall be a reference to that Clause,
Schedule or paragraph, in or to this Agreement as it may be amended
from time to time pursuant to this Agreement;
1.2.2 the table of contents and headings are inserted for convenience only
and shall be ignored in construing this Agreement;
6
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
1.2.3 unless the contrary intention appears words importing the masculine
gender shall include the feminine and vice versa and words in the
singular include the plural and vice versa;
1.2.4 unless the contrary intention appears words denoting persons shall
include any individual, partnership, company, corporation, joint
venture, trust, association (incorporated or unincorporated),
organisation or other entity, in each case whether or not having
separate legal personality;
1.2.5 reference to any statute or regulation includes any modification or
re-enactment of that statute or regulation; and
1.2.6 reference to the words "include" or "including" are to be construed
without limitation to the generality of the preceding words.
2. The Collaboration
2.1 The Parties hereby establish the Collaboration and agree to collaborate in
accordance with the terms of this Agreement, the Licence, the Distribution
Agreement and the Managed Services Agreement to promote, market, sell, and
distribute the Products in the Territory.
2.2 Both Parties shall use and shall procure that their Affiliates shall use
all reasonable endeavours (subject to provisions of any of the
Collaboration Agreements) to promote the business and operations of the
Collaboration in accordance with the best interests of the Collaboration
from time to time and to further the marketing and sale of the Products in
the Territory in accordance with the Collaboration Plan.
2.3 C. Inc hereby undertakes with Novartis to perform and/or to procure the
due performance by its Affiliates of all obligations and the due
compliance by its Affiliates with all limitations under or pursuant to the
Collaboration Agreements and to indemnify NAG and its relevant Affiliates
against all claims damages losses liabilities penalties and expenses
arising from any breach by any of C. Inc's Affiliates of their obligations
as aforesaid.
7
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
2.4 NAG hereby undertakes with Cephalon to perform and/or to procure the due
performance by its Affiliates of all obligations and the due compliance by
its Affiliates with all limitations under or pursuant to the Collaboration
Agreements and to indemnify C. Inc and its relevant Affiliates against all
claims, damages, losses, liabilities, penalties and expenses arising from
any breach by any of NAG's Affiliates of the obligations as aforesaid.
2.5 The liability of a Party under Clauses 2.3 or 2.4 shall not be discharged
or impaired by any amendment to or variation of any agreement any release
of or granting of time or other indulgence to any of its Affiliates or any
third party or any other act, event or omission which but for this Clause
would operate to impair or discharge the liability of such Party under
this Clause.
3. Ancillary Agreements and Obligations
3.1 Upon the execution hereof the Parties shall execute the Licence and shall
procure their relevant Affiliates to enter into the Distribution Agreement
and the Managed Services Agreement.
3.2 In the event of any conflict between the provisions of this Agreement and
any other of the Collaboration Agreements, the provisions of this
Agreement shall prevail.
3.3 The Parties agree that the provisions of Schedule 5 will govern the
obligations of the Parties in relation to the sale, promotion, marketing
and distribution of the Novartis Products in the Territory.
4. Collaboration Committee
4.1 The Parties shall establish a Collaboration Committee ("CC") which shall
be charged with the management and administration of the Collaboration and
the promotion, distribution and sale of the Products in the Territory. The
CC shall have the responsibility to take all decisions as to the marketing
of the Products, their manufacture and distribution, the approval of the
Annual Operating Plan
8
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
pursuant to Clause 7 and the setting of annual budgets and forecasts for
the Collaboration and shall have full authority and discretion with
respect to the management of the Collaboration, subject to (i) the
authority of the EC in certain matters as set out in Clause 5 and (ii) the
budget for the first three years of the Collaboration being set out in
Schedule 4 hereto.
4.2 The CC shall comprise six members of whom three shall be appointed by each
of Cephalon ("Cephalon Members") and Novartis ("Novartis Members"). The
initial CC members shall be those persons listed in Schedule 6 Part I.
4.3 A Party may remove any CC Member appointed by it and appoint any person in
his place. Any appointment or removal shall be in writing signed by the
appointing Party and shall take effect (unless the appointment or removal
specifies to the contrary) upon delivery to the other Party of the
appropriate notice. The Parties shall procure that the persons appointed
to the CC shall be suitably qualified and experienced to carry out the
responsibilities thereof as set out herein in a competent and professional
manner.
4.4 The provisions of this Clause 4.4 shall apply to meetings of the CC:
4.4.1 No business shall be transacted at any meeting of the CC unless at
least one member appointed by Cephalon and one member appointed by
Novartis is present. The Cephalon Members shall collectively have
one vote and the Novartis Members shall collectively have one vote
and in the event that the Cephalon Members or the Novartis Members
shall not agree as to which way to exercise their respective
collective vote they shall be deemed to have voted against the
proposed resolution in question;
4.4.2 A resolution of the CC shall be binding on the Parties if approved
by the collective vote of the Cephalon Members present and the
collective vote of the Novartis Members present and reflected in
minutes of the relevant meeting signed by a Cephalon Member and a
Novartis Member;
9
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
4.4.3 Meetings of the CC shall take place alternately at premises
nominated by Cephalon and premises nominated by Novartis. It shall
be the responsibility of the Party at whose premises a meeting is to
take place to prepare and issue a notice of meeting, agenda and
minutes of the meeting and to nominate the Chairman of the meeting;
4.4.4 Not less than 5 Working Days' notice of any meeting of the CC
(including a detailed agenda) shall be given to each of the CC
Members unless such notice is waived by all the CC Members.
4.5 Any CC Member may participate in a meeting of the CC by means of a
conference telephone, video link or similar communicating equipment
whereby all persons participating in the meeting can hear each other.
Resolutions and decisions of the kind normally made or taken at a physical
meeting of the CC can accordingly be so made or taken in circumstances
where none or only some of the CC Members are physically present with each
other. Such a meeting shall be deemed to take place where the largest
group of those participating is assembled, or, if there is no such group,
where the chairman of the meeting is.
4.6 A meeting of the CC shall be held on a quarterly basis (unless otherwise
agreed) for the purpose, without limitation, of:
(i) reviewing all financial information and reports provided under
Clause 7.2 during or in respect of the previous quarterly period or
in respect of any accounting period terminating at the end of that
period;
(ii) reviewing the cash flow and funding position of the Collaboration
during such quarterly period and considering, and if thought fit,
approving any measures necessary for easing any adverse situation in
the ensuing periods;
(iii) reviewing and approving the Annual Operating Plan for the
Collaboration for the following year presented by the Operating
Committee pursuant to Clause 7.2; and
(iv) reporting to the Executive Committee in respect of the above
matters.
10
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
5. Executive Committee
5.1 The Parties shall establish an Executive Committee ("EC") which shall be
charged with the strategic and financial matters relating to the
Collaboration (including consideration of new business opportunities for
the Collaboration which may be brought to its attention by either Party)
and the resolution of disputes arising at the CC.
5.2 The EC shall comprise eight (8) members of whom four (4) shall be senior
personnel of each of Cephalon and Novartis. The initial EC Members shall
be those persons listed in Schedule 6 Part II.
5.3 The provisions of Clause 4.3 shall apply mutatis mutandis in respect of
the appointment and removal of EC Members.
5.4 The provisions of Clause 4.4 and 4.5 shall apply mutatis mutandis in
respect of meetings of the EC.
5.5 A meeting of the EC shall be held on a quarterly basis not more than 15
(fifteen) Working Days after the corresponding meeting of the CC (unless
otherwise agreed) for the purpose, without limitation of:-
(i) reviewing the report of the preceding meeting of the CC;
(ii) determining and reviewing strategy for the Collaboration;
(iii) reviewing profit calculations of the Collaboration and determining
upon distributions of Net Profit; and
(iv) reviewing and making any adjustments to the Collaboration Plan, the
Ritalin Terminal Value, the Tegretol Sales Shortfall and the
Provigil Sales Shortfall calculations (each as referred to in
Schedule 7) consequent on the review of the then current Annual
Operating Plan and any other relevant circumstances, provided that
such adjustments should not impose any additional or increased
financial obligations on Cephalon.
11
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
6. Disputes
6.1 In the event of a failure of the CC or the EC to agree upon any material
matter:-
In the first instance the CC or the EC (as the case may be) shall procure
the preparation of a report setting out the matter in question and the
likely consequences to the Collaboration if such matter is on the one hand
approved or on the other hand rejected. Such report shall be prepared
within 30 days of the meeting of CC or the EC at which the matter was
raised and shall be submitted (in the case of the CC) to the EC which
shall consider such report and attempt to resolve the issue or (in the
case of the EC) to the Chief Executive officer of Novartis Pharma AG and
the Chairman/Chief Executive officer of C. Inc (the "Senior Executives").
6.2 In the event that the EC shall fail to resolve a matter referred to it by
the CC within 60 days of the same being referred to it the matter shall be
referred to the Senior Executives.
6.3 In the event that the Senior Executives cannot resolve the issue within 60
days of the same being referred to them, then the same shall be referred
to an independent mediator to be agreed upon by the Senior Executives, and
whose terms of reference shall be agreed between the Senior Executives but
whose recommendations shall in any event be non-binding. In the event that
the Senior Executives fail to agree upon the identity of such mediator, or
the terms of reference, or if notwithstanding his services the Senior
Executives fail to reach agreement the issue shall be referred to
arbitration under Clause 6.5.
6.4 Whilst ever any dispute at EC level relating to an Annual Operating Plan
and/or the Collaboration Plan is on going, the provisions of the last
agreed Annual Operating Plan or the last agreed version of the
Collaboration Plan as the case may be shall prevail.
6.5 Any dispute which has not been resolved under the preceding provisions of
this Clause 6 shall be finally settled under the Rules of Arbitration of
the International
12
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Chamber of Commerce by a panel of three arbitrators sitting in London
appointed in accordance with the said rules.
6.6 For the purposes of this Clause it is agreed that each of the
Collaborators shall have a veto in regard to any proposal put to the CC or
the EC which in either Party's reasonable opinion would have a materially
adverse effect either (i) on that Collaborator's other commercial
activities outside the Collaboration or (ii) in respect of the long term
value of that Collaborator's Products. The exercise of such veto (provided
that the same is exercised within 30 days of the proposal in question
being put forward to the CC or the EC (as the case maybe)) shall not
constitute a failure to agree for the purposes of this Clause 6.
7. Operating Committee
7.1 The Parties shall establish an Operating Committee ("OC") (comprising
persons nominated by Cephalon from time to time together with assistance
from appropriate persons to be made available by Novartis at the
reasonable request of Cephalon from time to time) which shall have the day
to day operational responsibility for the Collaboration, including without
limitation forecasting and ordering requests in accordance with the
forecasting and ordering procedures of each party, and in accordance with
the current Collaboration Plan approved by the CC or otherwise in
accordance with the directions of the CC.
7.2 The OC shall deliver to the CC for approval not later than September 30 in
each year a draft Annual Operating Plan for the forthcoming calendar year
of the Collaboration covering, among other things, projections and budgets
with respect to sales, operational and capital expenditure, and
promotional and marketing plans, Provided that in respect of the first
three years of operation of the Collaboration the CC shall be empowered
only to increase (and not to decrease) any costs shown in the budget of
the Collaboration above those set out the Collaboration Plan.
13
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
7.3 The OC shall present to the CC for each quarterly meeting a report on the
financial position of the Collaboration and its performance against the
Annual Operating Plan.
7.4 The Parties shall procure that the persons comprising the OC shall be
suitably qualified to carry out the responsibilities thereof as set out
herein in a competent and professional manner.
8. Finance and Accounting Matters
8.1 It is agreed that:
8.1.1 Novartis shall develop and keep separate books of account relating
to its distribution of the Products in the Territory for the
Collaboration which shall be available for inspection by Cephalon at
all reasonable times upon request. Such books of account shall be
maintained in accordance with IAS. Novartis shall make available all
relevant financial and operational information to the OC, CC and the
EC for the purposes of enabling them to carry out their functions.
Cephalon shall make available all financial and operational
information of Cephalon necessary to enable Novartis to carry out
its obligations under this Clause.
8.1.2 Upon Cephalon's written request a firm of accountants appointed by
agreement between the Parties or, failing such agreement with [**]
Working Days of the initiation of discussions between them on this
point and at the request of either Party by the President for the
time being of the Institute of Chartered Accountants of England and
Wales in London and
(a) such firm of accountants shall be given access to and shall be
permitted to examine and copy such books and records upon [**]
Working Days' notice having been given by Cephalon and at all
reasonable times on Working Days for the purpose of certifying
to Cephalon that the Net Profit calculated by Novartis
14
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
during any year was reasonably calculated, true and accurate
or, if this is not their opinion certify the Net Profit
figures for such period which in their judgment are true and
correct.
(b) prior to any such examination taking place, such firm of
accountants shall undertake to Novartis in a deed that they
shall keep all information and data contained in such books
and records, strictly confidential and shall not disclose such
information or copies of such books and records to any other
person including Cephalon, but shall only use the same for the
purpose of the calculations which they need to perform in
order to issue the certificate to Cephalon which this Clause
8.1.2 envisages.
(c) any such access examination and certification shall occur no
more than once per year and will not go back over records more
than [**] old unless a discrepancy is found.
(d) Novartis shall make available personnel to answer queries on
all books and records required for the purpose of that
certification.
(e) the cost of the accountant shall be the responsibility of
Novartis if the certification shows Novartis to have
underestimated the Net Profit payable to Cephalon by more than
[**] and the responsibility of Cephalon otherwise.
8.1.3 Within [**] 10 Working Days following such certification any monies
which such certification shows as being due and owing by one Party
to the other (whether because of an underpayment or overpayment)
shall be paid by that Party.
8.2 The Net Profit of the Collaboration and allocation thereof shall be
calculated on an estimated interim basis as at the last day of March, June
and September in each year and a final calculation in respect of each
calendar year shall be made as at the last
15
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
day of December. The method of calculation (including definition of
allowable revenues and costs) and allocation of Net Profit shall be as set
out in Schedule 1. Such calculation shall be prepared by Novartis and
submitted to the Executive Committee.
8.3 Any interim allocation of Net Profit to either Party shall paid within 20
(twenty) Working Days of the end of the quarter in question subject to the
provisions of Clause 12.2 Any adjustment to be made following the year end
reconciliation and audit shall be made to the payment to be made at the
end of the next quarter.
9. Supply of Product
The Parties shall procure that sufficient Product of suitable quality is
supplied to the Collaboration in a timely manner to enable the
Collaboration to operate in accordance with the relevant Annual Operating
Plan.
10. Warranties
10.1 NAG hereby represents and warrants to C. Inc that at the date of this
Agreement:
10.1.1 Novartis has the full legal right to enter into the
Collaboration Agreements and to perform its obligations
thereunder. The Collaboration Agreements being duly executed and
delivered by Novartis, constitute a legal, valid and binding
obligation, enforceable against Novartis in accordance with
their respective terms.
10.1.2 Novartis has obtained and will continue to maintain (save for
any reason beyond its control) during the term of this Agreement
all necessary notices, consents, approvals, Regulatory Approvals
and authorisations of all Governmental and Regulatory
Authorities and other parties, required in connection with its
entering into and performing the Collaboration Agreements.
16
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
10.1.3 The execution and delivery of the Collaboration Agreements and
the performance of Novartis' obligations thereunder to NAG's
best knowledge and belief (i) do not conflict with or violate
any requirement of applicable laws or regulations, (ii) do not
conflict with, or constitute a default under, any contractual or
other obligation of Novartis and (iii) will not infringe the
Rights of any third party.
10.1.4 Novartis has not granted to any third party any sub-licence or
other interest of any kind (including any charge, lien or
encumbrance) in respect of the Novartis Product which would
affect Cephalon's rights under the Collaboration Agreements.
10.2 C. Inc hereby represents and warrants to NAG that at the date of
this Agreement:
10.2.1 Cephalon has the full legal right to enter into the
Collaboration Agreements and to perform its obligations
thereunder. Each of the Collaboration Agreements, being duly
executed and delivered by Cephalon, constitutes a legal, valid
and binding obligation, enforceable against Cephalon in
accordance with their respective terms.
10.2.2 Cephalon has obtained and will continue to maintain during the
Term of this Agreement all necessary notices, consents,
approvals and authorisations of all Governmental and Regulatory
Authorities and other parties required in connection with its
entering into and performing the Collaboration Agreements.
10.2.3 The execution and delivery of the Collaboration Agreements and
the performance of Cephalon's obligations thereunder to C. Inc's
best knowledge and belief (i) do not conflict with or violate
any requirement of applicable laws or regulations, (ii) do not
conflict with, or constitute a default under, any contractual or
other obligation of Cephalon and (iii) will not infringe the
Rights of any third party.
17
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
10.2.4 Cephalon has not granted to any third party any sub-licence or
their interest of any kind (including any charge lien or
encumbrance) in respect of the Cephalon Products which would
affect Novartis' rights under the Collaboration Agreements.
11. Indemnity
11.1 Each Party (the "Indemnifying Party") agrees to indemnify, defend, and
hold harmless the other Party, such other Party's Affiliates and their
respective officers, directors, employees, agents and representatives (the
"Indemnitees"), from and against any and all claims, damages, losses,
liabilities, penalties and expenses (including without limitation
reasonable attorneys' fees and expenses) (collectively, "Liabilities") to
the extent resulting from or arising out of any breach of the
representations or warranties as set out in Clause 10.1 in the case of
Novartis and Clause 10.2 in the case of Cephalon, or non-fulfilment of or
failure to perform or other breach of any covenant or agreement made by
the Indemnifying Party or any of its Affiliates pursuant to the
Collaboration Agreements; provided that (a) any such Liabilities are not
caused by the negligence or misconduct of the Indemnitees; (b) the
Indemnitee gives the Indemnifying Party prompt written notice as soon as
practicable of any such Liabilities; (c) the Indemnitee co-operates fully
with the Indemnifying Party and its legal representatives in the defence
of any and all such Liabilities; and (d) the Indemnitee agrees to the
complete control of the settlement and defence of such Liabilities by
Indemnifying Party. Subject to the provisions of Clause 11.2, neither
Party nor its Affiliates shall be liable to the other Party or its
Affiliates for incidental special, consequential or punitive damages,
including without limitation, any claims for damages based upon lost
revenues or profits, however caused or any theory of liability.
11.2 If the Collaboration is terminated by reason of a fundamental breach of
its terms by either Party in circumstance where the conduct of such party
(including, without limitation, the continued promotion, marketing and
selling by such Party of its Products in the Territory after such
termination; or the disposal by that Party, of any of its Products in the
Territory to third parties) is indicative of its wilful
18
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
abandonment of the Collaboration then such Party (the "Breaching Party")
shall pay to the other Party (the "Innocent Party") by way of liquidated
damages a sum equal to the value at the date of termination of the share
of Net Profit attributable to the Products of the Breaching Party which
the Innocent Party would have received from the date of termination to the
end of the Term calculated by reference to the Collaboration Plan as it
stands at the date of termination, adjusted if appropriate to take account
of:
(a) any payment or repayment under Schedule 7 which might be
payable by reason of such termination or might but for such
termination have become payable subsequently;
(b) any payments made or withheld in accordance with Clause 12;
and
(c) any other sums which are due from one Party to the other
pursuant to the Collaboration Agreements.
11.3 If any claim against either Party, its Affiliates, recognised distributors
or agents (the "Indemnified Party") is brought by reason of the fact that
any Product belonging to the other Party (Cephalon Products where Novartis
is the Indemnified Party and Novartis Products where Cephalon is the
Indemnified Party) has caused illness, death or bodily injury, then,
unless such claim is a result solely of the gross negligence or misconduct
of the Indemnified Party, NAG or X.Xxx (as the case may be) shall
indemnify the other and its Affiliates for any and all liabilities,
claims, damages and costs incurred or suffered by the other Party or its
Affiliates or recognised distributors, and for any and all other
liabilities, claims, damages and costs suffered by such Party or its
Affiliates, as a result of any associated Product recall, final packaging
and similar costs associated with such Product. Such indemnity will
include the reimbursement of the legal expenses reasonably incurred in
contesting or defending such claim.
11.4 Each Party shall give the other Party prompt written notice of any claim
or threat of claim it receives with respect to any matter for which it or
its Affiliates may be
19
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
entitled to indemnification, and the indemnifying Party shall thereafter
defend or settle any such claim at its sole expense, and with counsel
selected by the indemnifying Party and reasonably acceptable to the
Indemnified Party. In the defence or settlement of any such claim, the
Indemnified Party shall cooperate with and assist the indemnifying Party
to the extent reasonably possible, but the indemnifying Party shall bear
and pay any and all expenses incurred by the Indemnified Party in
providing such cooperation and assistance, either directly or upon request
of the Indemnified Party who has incurred such expense. Failure to give
notice shall not constitute a defence, in whole or in part, to any claim
by the Indemnified Party hereunder except to the extent the rights of the
indemnifying Party are materially prejudiced by such failure to give
notice.
12. Special Payments
Licence Fee
12.1 Payment for the Licence to the Novartis Products as referred to in Clause
6 of the Licence Agreement of even date shall be made by way of 3 (three)
equal payments of [**], payable on 1 January 2001, 31 December 0000 ( "xxx
Xxxxxx Payment"), 31 December 2002 ("the Third Payment"), subject to the
provision of Clause 12.2.5 regarding Cephalon's right to settle the
obligation early.
12.2 Provided termination of the Collaboration has not occurred in accordance
with the provisions of Clause 14 then the following provisions shall
apply:
12.2.1 If Cephalon fails to make any of the payments payable in
accordance with Clause 12.1 within [**] Working Days of the due
date then Novartis shall give notice to Cephalon of such failure
at any time thereafter. If Cephalon shall fail to remedy such
failure within [**] Working Days of receiving such notice then,
without prejudice to any other claims or actions Novartis may
have accrued against Cephalon, whether under this Agreement or
otherwise, this Agreement will terminate and all of Cephalon's
rights granted under the Collaboration Agreements shall
terminate forthwith;
20
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
12.2.2 Until either the Second Payment has been made, or Cephalon pays
the full amount outstanding pursuant to Clause 12.2.5 prior to
the Second Payment falling due, the payments due to Cephalon
pursuant to Clauses 8.2 and 8.3 and any payments due to Cephalon
under the Managed Services Agreement in the first year following
the Commencement Date will be withheld by Novartis until either
the Second Payment has been made (whereupon the withheld amounts
will be immediately paid to Cephalon), or Cephalon repays the
agreed full amount pursuant to Clause 12.2.5 (whereupon the
total amount withheld will be offset against the agreed
settlement amount to arrive at the amount payable by Cephalon).
12.2.3 Provided that Cephalon has not exercised its right under Clause
12.2.5 during the first year following Commencement Date, then
if Cephalon fails to pay the Second Payment within [**] Working
Days of the due date, Novartis shall give notice to Cephalon of
such failure at any time thereafter. If Cephalon shall fail to
remedy such failure within [**] Working Days of receiving such
notice then Novartis shall be entitled to retain all payments of
Net Profit under Clauses 8.2 and 8.3 and any other payments due
to Cephalon pursuant to the Managed Services Agreement.
12.2.4 The provisions of sub-Clauses 12.2.2 and 12.2.3 shall apply
mutatis mutandis to the profit and payments payable in the
second year following the Commencement Date and the Third
Payment, provided however, that if the aggregate amount of
payments due to Cephalon pursuant to Clauses 8.2 and 8.3 and the
other sums payable to Cephalon under the Managed Services
Agreement and/or paid under the Distribution Agreement during
the second year following the Commencement Date reaches [**],
Novartis shall be entitled to retain the amounts payable in
respect of Net Profits due to Cephalon and amounts payable under
the Managed Service Agreement at the date [**] is reached unless
and until either the Third Payment is made or Cephalon pays the
agreed full amount outstanding prior to the due date of the
Third Payment pursuant to Clause 12.2.5, but
21
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
shall pay to Cephalon any Net Profit or other payments due
under the Managed Services Agreement in excess of the amounts
so retained accruing after the date the [**] as referred to
above is reached.
12.2.5 Cephalon shall have the right and option to repay to Novartis at
any time during the first two years following the Commencement
Date an amount which represents full and final settlement of the
remaining outstanding Licence fee. The method of assessing the
amount to be paid by Cephalon to Novartis is illustrated in
Schedule 8, and the interest rate that is to be applied to the
amount of liability assessed as being outstanding at the end of
each month is fixed (ie agreed) at 1.88% per month.
12.3 Ritalin
Cephalon hereby undertakes to Novartis to make certain payments in respect
of Ritalin in the circumstances and in accordance with the formula set out
in Schedule 7 Part I.
12.4 Tegretol
Cephalon hereby undertakes to Novartis to make certain payments in respect
of Tegretol in the circumstances and in accordance with the formula set
out in Schedule 7 Part II.
12.5 The Cephalon Product Adjustment Payment
Cephalon hereby undertakes to Novartis to make certain payments in respect
of the Cephalon Product in the circumstances and in accordance with the
formula set out in Schedule 7 Part III.
22
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
13. Force Majeure
13.1 If a Party (the "Non-Performing Party") is unable to carry out any of its
obligations under the Collaboration Agreements due to Force Majeure this
Agreement shall remain in effect but:-
13.1.1 the Non-Performing Party's relevant obligations under the
relevant Collaboration Agreement; and
13.1.2 the relevant obligations of the other Party ("the Innocent
Party") under the relevant Collaboration Agreement,
shall be suspended for a period equal to the circumstance of
Force Majeure or [**] whichever is the shorter provided that:-
(a) the suspension of performance is of no greater scope
than is required by the Force Majeure;
(b) the Non-Performing Party gives the Innocent Party prompt
notice describing the circumstances of Force Majeure,
including the nature of the occurrence and its expected
duration, and continues to furnish regular reports
during the period of Force Majeure;
(c) the Non-Performing Party uses all reasonable efforts to
remedy its inability to perform and to mitigate the
effects of the circumstances of Force Majeure; and
(d) as soon as practicable after the event which constitutes
Force Majeure the Parties discuss how best to continue
their operations as far as possible in accordance with
the Collaboration Agreements.
23
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
14. Term and Termination
14.1 This Agreement shall commence on the Commencement Date and continue for
the Term unless otherwise terminated in accordance with this clause 14.
14.2 If any decision of any Governmental or Regulatory Authority results in the
inability to continue effectively to commercialise any Cephalon Product in
the Territory or if Cephalon shall dispose of or abandon the Cephalon
Product the Parties shall negotiate in good faith with a view to agreeing
appropriate amendments to the Collaboration Agreements to reflect such
development including without limitation, the making of any payment or the
amendment of any payment obligation thereunder. If such negotiations shall
not result in agreement being reached within [**] of the event in question
Novartis shall be entitled to terminate this Agreement immediately upon
the expiry of such period.
14.3 If any decision of any Governmental or Regulatory Authority results in the
inability to continue effectively to commercialise any Novartis Product in
the Territory or if Novartis shall dispose of or abandon any Novartis
Product in respect of the Territory the Parties shall negotiate in good
faith with a view to agreeing appropriate amendments to the Collaboration
Agreements to reflect such development including without limitation, the
making of any payment or the amendment of any payment obligation
thereunder. If such negotiations shall not result in agreement being
reached within [**] of the event in question Cephalon shall be
entitled to terminate this Agreement immediately upon the expiry of such
period.
14.4 Either Party may terminate this Agreement on 30 days' written notice to
the other if (i) Control of the other or of any of its Controllers shall
pass from the present shareholders or owners or Controllers to other
persons or (ii) the other Party shall cease to control any Affiliate
relevant to the Collaboration.
14.5 Without prejudice to any right or remedy that either Party may have
against the other for breach or non-performance of this Agreement either
Party shall have the right to terminate this Agreement immediately:
24
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
14.5.1 on the other Party committing a breach of any of the provisions of
any of the Collaboration Agreements providing that (where the
breach is capable of rectification) the Party in breach has been
advised in writing of the breach and has not rectified it within
thirty days of receipt of such advice; or
14.5.2 if an Insolvency Event occurs in relation to the other Party.
14.6 Upon termination of this Agreement for any cause whatsoever the Licence
Agreement, the Managed Services Agreement and the Distribution Agreement
shall terminate.
14.7 Termination of this Agreement for whatever reason shall not affect the
accrued rights of the Parties arising in any way out of this Agreement as
at the date of termination including without limitation the right to
recover damages against the other and all provisions which are expressed
to survive this Agreement shall remain in full force and effect.
14.8 Subject to the provisions of 12.1 and 12.2 in the event of the termination
of this Agreement the provisions of Schedule 7 Part IV shall apply to
determine whether any payment shall be due by Novartis to Cephalon by way
of reimbursement of all or part of the payment made by Cephalon under
Clause 12.1 hereof.
15. Confidential information
15.1 Each Party shall treat (both during and after the subsistence of this
Agreement) as confidential all know-how and confidential information of
the other including, without limitation, all information and data in
respect of the Products supplied or made available by or on behalf of
either Party, and details of trade prices at which the Products are sold
between the Parties or between Affiliates of either of them (the
"Confidential Information") and neither Party shall without the prior
written consent of the other:
25
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
15.1.1 exploit any part of the Confidential Information save as is
reasonably necessary to enable it to perform its obligations under
the Agreement;
15.1.2 disclose any part of the Confidential Information (other than to
Regulatory Authorities who require the same where the Party
concerned is legally obliged to disclose the same or entitled to do
so under this Agreement) or to its employees or customers (or
potential customers) who need to know the Confidential Information
for the purpose of performing their Agreements provided that:
(a) such person is made aware prior to disclosure of the
proprietary and confidential nature of the Confidential
Information; and
(b) such person owes an express duty of confidence to the
Disclosing Party which the Disclosing Party shall fully
enforce.
16. Competition Restrictions
16.1 Neither of the Parties shall at any time during the subsistence of
the Collaboration (subject to a maximum period of [**] from the date
hereof) do or permit any of its Affiliates to do (and whether alone
or jointly with others or whether as principal, agent, shareholder or
otherwise and whether for its own benefit or that of others) any of
the following in the Territory without the prior written consent of
the other Party:-
16.1.1 directly or indirectly carry on or be engaged, concerned or
interested (except in relation to Ritalin, and as the holder for
investment of shares amounting in aggregate to less than 3
percent of the share capital quoted or dealt in on a recognised
stock exchange) in the manufacture, distribution or sale of
products which compete with, and/or are essentially similar to,
the Cephalon Product, where "compete with" means licensed for
the treatment of narcolepsy, fatigue associated with multiple
sclerosis, attention deficit hyperactivity disorder or sleep
apnoeia and "essentially similar" means products which contain
the same active pharmaceutical
26
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
ingredient(s) including, but not limited to, any isomers or
derivatives thereof, as the relevant Product;
16.1.2 solicit the custom of any person in the Territory who is or has
been at any time during the term of this agreement a customer of
the Collaboration for the purpose of offering to such customer
goods or services similar to or competing with those of the
Collaboration.
16.2 In the event that either Party or any of their respective Affiliates shall
become licensee or distributor of or enter into similar arrangements
regarding any product which (i) competes with the Cephalon Product, or
(ii) competes with and is essentially similar to the Novartis Products (in
this Clause 16.2 "competes with " shall mean has the same therapuetic
effect as and "essentially similar" shall be as defined in 16.1.1) that
Party will, if permitted by the terms of the relevant arrangement, enter
into good faith discussions with the other Party as to the possibility of
such product being made part of the Collaboration. If the terms of the
relevant arrangement do not permit for the relevant product to be made
part of the Collaboration or the Parties fail to agree upon principal
business terms [**] of the commencement of such discussions, the Parties
shall negotiate in good time the appropriate adjustments to the payments
made under Clause 12 hereof and/or the allocation of Net Profit of the
Collaboration.
16.3 For the duration of this Agreement and for [**] thereafter neither Party
shall and shall procure that its Affiliates shall not solicit, entice or
offer employment to any member of Staff employed by the other Party or any
of its Affiliates without the express written consent of the other Party
except where such employee is recruited as a result of an otherwise
unsolicited response to a public recruitment advertisement.
17. Medical Information and Reporting
17.1 Novartis agrees in respect of Novartis Products and Cephalon Products to
comply with Novartis' and Cephalon's standard operating procedures
("SOPs")
27
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
respectively in respect of adverse events and product recall, supply of
medical information and other similar or associated matters and Cephalon
shall provide such SOPs in respect of Cephalon Products to Novartis from
time to time.
17.2 In addition to the requirements of Clause 17.1 each Party agrees to inform
the other Party and keep it informed within 48 hours of notification of
any action by, or notification or other information which it receives
(directly or indirectly) from any Governmental or Regulatory Authority,
which (a) raises any material concerns regarding the safety or efficacy of
any Product, (b) which indicates or suggests a potential material
liability for either Party to third parties arising in connection with any
Product, or (c) which is reasonably, likely to lead to a recall of any
Product, including in all cases, but not limited to:
(i) Governmental or Regulatory Authority inspections of manufacturing,
distribution of other related facilities, in which Product is
manufactured, stored or otherwise present;
(ii) receipt of a warning letter from any Governmental or Regulatory
Authority relating to any Product; or
(iii) on initiation of any Governmental or Regulatory Authority
investigations, detention, seizure or injunction concerning any
Product.
17.3 Where either Party proposes to provide information, data or documentation
to any Governmental or Regulatory Authority in respect of or relating to
any of the Products, it shall, unless otherwise required by law, first
obtain the prior written consent of Cephalon (in the case of Cephalon
Products) and Novartis (in the case of the Novartis Products).
18. Notices
18.1 Any notice to be given in connection with this Agreement shall be in
writing and shall be deemed duly served if delivered personally or sent by
first class or recorded delivery post or by facsimile to the Company
Secretary at the address of the Party
28
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
concerned which is set out in this Agreement or as may be notified to the
other Party in accordance with the provisions of this Clause. Any notices
which are sent by e-mail shall not be valid unless and until confirmed by
personal delivery, first class or recorded delivery post or by facsimile.
Any such notice shall be deemed to be served:
18.1.1 if delivered personally, on the day on which it is delivered;
18.1.2 if sent by post, 5 Business Days after the time of posting;
18.1.3 if sent by facsimile, on acknowledgement by the recipient's
facsimile receiving equipment on a Business Day if the
acknowledgement occurs before 1700 hours local time of the
recipient and in any other case on the following Business Day.
19. Relationship of Parties
19.1 This Agreement shall not permit or authorise either Party to:
19.1.1 incur any expenses on behalf of the other Party;
19.1.2 enter into any commitment or make any representation or warranty
on behalf of the other Party;
19.1.3 pledge the credit of, or otherwise bind or oblige the other Party;
or
19.1.4 commit the other Party in any way whatsoever
without in each case obtaining the other Party's prior written consent.
20. Waiver
In no event shall any delay, failure or omission on the part of any Party
in enforcing, exercising or pursuing any right, power, privilege, claim or
remedy, which is conferred by this Agreement, or arises under this
Agreement, or arises
29
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
from any breach by the other Party to this Agreement of any of its
obligations under this Agreement, be deemed to be or be construed as:
20.1.1 a waiver thereof, or of any other such right power privilege
claim or remedy, in respect of the particular circumstances in
question; or
20.1.2 operate so as to bar the enforcement or exercise thereof, or of
any other such right, power, privilege, claim or remedy, in any
other instance at any time or times afterwards.
21. Severability
Any provision of this Agreement which is held invalid or unenforceable in
any jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the
remaining provisions hereof, and any such invalidity or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such
provisions in any other jurisdiction
22. Third Party Rights
Save for the provisions of Clauses 2.2, 2.3, 2.4 and Clause 11 nothing in
this Agreement is intended to confer on any person any right to enforce
any term of this Agreement which that person would not have had but for
the Contracts (Rights of Third Parties) Xxx 0000.
23. Governing Law
This Agreement is governed by and shall be construed in accordance with
the laws of England and the Parties hereby submit to the non-exclusive
jurisdiction of the English Courts.
30
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
24. Transmission of Rights
Neither Party shall assign the benefit and/or the burden of this Agreement
to any third party without the prior written consent of the other.
25. Whole Agreement
25.1 This Agreement together with the other Collaboration Agreements shall
supersede any and all promises, representations, warranties or other
statements whether written or oral, made by or on behalf of a Party to
another of any nature whatsoever or contained in any leaflet, brochure or
other document given by a Party to another concerning such subject matter.
25.2 No provision contained in this Clause, or elsewhere in this Agreement or
the other Collaboration Agreements, shall operate so as to exclude any
liability of any Party in respect of a fraudulent misrepresentation made
by that Party to another, or to restrict or exclude any remedy which the
other Party may have in respect of such misrepresentation.
26. Variations
Except as provided herein, this Agreement may not be amended, varied or
modified except in writing signed by a duly authorised officer or
representative of each of the Parties.
27. Costs
The Parties shall bear their own legal accounting and other costs and
expenses incurred in connection with the preparation of the Collaboration
Agreements.
28. Publicity
Each Party agrees that, except as may be required by law or regulation, it
shall not disclose the existence, substance or details of this Agreement
without the prior
31
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
written consent of the other Party. In cases in which disclosure is
proposed or required by law, the disclosing Party, prior to such
disclosure, will notify the non-disclosing Party of the contents of the
proposed disclosure, provided however, that subsequent disclosure(s) of
the same or substantially similar contents shall not require further
consent. The non-disclosing Party shall have the right to make reasonable
changes to the disclosure to protect its interests, such changes to be
notified to the disclosing Party within five Working Days. The disclosing
Party shall not unreasonably refuse to include such changes in its
disclosure. The Parties will agree upon the text of a joint announcement
of this Agreement and, once agreed, the information contained in that
announcement may be used by either Party in subsequent announcements.
29. Counterparts
This Agreement may be executed in any number of counterparts and by the
Parties on separate counterparts, each of which when so executed shall be
an original of this Agreement, and all of which shall together constitute
one and the same instrument. Complete sets of counterparts shall be lodged
with each Party.
32
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the day
and year first before written.
SIGNED by )
for and on behalf of ) J. Xxxxx Xxxxx
CEPHALON INC )
in the presence of: )
Xxxx Xxx Xxxx
SIGNED by )
for and on behalf of ) Xxxxxx Xxxxxx
NOVARTIS AG ) Xxxx Xxxxxxx
in the presence of: ) Xxxxxxxx Xxxxxx
Xxxxx X Xxxxxxxxx
33
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 1
Calculation and Allocation of Collaboration Profits
[**]
This profit will be allocated between the Parties as follows:
Attributable to Novartis [**]
Attributable to Cephalon [**]
Once the overall profit has been ascertained and allocated, account needs to be
taken of profit already taken by each Party via the following means:
1. The transfer price of the Products between Affiliates of each Party
(adjusted downward to account for stocks held of Collaboration Products at
the end of each period of assessment)
2. The profit realised by Cephalon under the Distribution Agreement (adjusted
downward to account for stocks of Cephalon Products held by Novartis at
the end of each period of assessment)
3. The profit realised by Cephalon under the Managed Services Agreement
If the profit realised by Cephalon under points 1 to 3 above exceeds its total
allocated profit under the collaboration, Cephalon will pay the excess amount to
Novartis. If the profit realised by Cephalon under points 1 to 3 above is less
than its total allocated profit under the collaboration, Novartis will pay the
amount of this deficit to Cephalon.
This calculation will be done on a quarterly basis during each calendar year
based on unaudited and where necessary on estimated information, with a final
annual full year calculation based on independently audited and accurate
information.
In ascertaining profits and allocations, no account will to be taken for the
time-value of money or the effect of uneven cashflows arising between the
parties.
Net Profit shall be calculated in sterling.
34
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
[**]
35
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 2
The Products
Part I - Cephalon Product
Brand Name/Active Ingredient Pack Size (SKU) NHS Supply Price
PROVIGIL/modafanil 100mg tabs - 30 (pounds)60.00
Part II - Novartis Products
Trademark/Active Ingredient Pack Size (SKU) NHS Supply Price (pounds)
ANAFRANIL - clomipramine
hydrochloride 10mg caps - 84 2.75
25mg caps - 84 5.40
50mg caps - 56 6.85
ANAFRANIL SR 75mg tab - 28 7.51
ANAFRANIL SYRUP 25mg/5ml - 150ml 7.23
ANAFRANIL INJECTION 25mg/2ml amp - 10 4.70
LIORESAL - baclofen 10mg tab - 84 9.03
LIORESAL LIQUID 5mg/5ml - 300ml 7.46
(save for sales for use in
intrathecal pumps)
RITALIN - methylphenidate 10mg tab - 30 5.57
36
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
TEGRETOL - carbamazepine 100mg tab - 84 2.43
200mg tab - 84 4.50
400mg tab - 56 5.90
TEGRETOL CHEWTAB 100mg - 56 2.95
200mg - 56 5.49
TEGRETOL RETARD 200mg - 56 4.82
400mg - 56 9.48
TEGRETOL LIQUID 100mg/5ml - 300ml 5.72
TEGRETOL SUPPS 125mg - 5 7.50
250mg - 5 10.00
The Products shall include essentially similar products, where "essentially
similar" has the same meaning as defined in Clause 16.1.1 of this Agreement.
37
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 3
Trade Marks
Registered
Novartis Product Territory Class number Valid until
ANAFRANIL UK 5 884607 2010
LIORESAL UK 5 853707 2008
RITALIN UK 5 669833 2007
TEGRETOL UK 5 831335 2007
Registered
Cephalon Product Territory Class number Valid until
PROVIGIL UK 5 1566855 2005
38
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 4
Collaboration Plan (in (pounds)'000)
YEAR
[**]
39
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 5
Supply and Distribution of Novartis Products.
Part I
1. Definition and interpretation
1.1 The following terms shall have the following meanings in this Schedule and
all other defined terms shall have the definitions ascribed to them in the
Collaboration Agreement:
"Adverse Reaction" means a response to a substance that is noxious and
unintended and which occurs at doses normally used in man for prophylaxis,
diagnosis and therapy;
"End Users" means customers who are not reselling the Products to third
parties;
"Good Distribution Practice" or "GDP" means the regulatory standards and
principles and guidelines of good distribution practice as in force from
time to time relating to the warehousing, storage and physical
distribution of medicinal products established by the applicable
Governmental or Regulatory Authority including, without limitation, the
Guidelines on Good Distribution Practice of Medicinal Products for Human
Use published by the European Commission, as the same may be amended from
time to time;
"Products" means the Products listed in Part II together with such
additions as the Parties may agree in writing;
40
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
"Specification" means the specification for a Product set out in the
relevant Product Licence;
"Trademarks" means the trademarks relating to the Products listed in Part
III.
2. Licence
Cephalon hereby grants Novartis the right to sell, promote, market and
distribute the Products under the Trademarks and Product Licences in the
Territory. 3. Appointment as Distributor
3.1 C. Inc hereby appoints NAG with effect from the Commencement Date as its
supplier and distributor of the Products in the Territory on and subject
to the terms and conditions of this Agreement.
3.2 Novartis shall supply Products in accordance with the terms of Clause 9 of
the Collaboration Agreement.
3.3 NAG shall be entitled to carry out any of its obligations hereunder
through any of its Affiliates.
3.4 Novartis shall be responsible for obtaining payment in respect of all
sales made of Product in the Territory.
3.5 Cephalon will not appoint in the Territory any other distributor or
reseller of the Product nor will it directly supply for its own account
any Product to distributors, resellers or End Users located within the
Territory.
3.6 The provisions of Clause 3.5 shall terminate on the fifth anniversary of
the Commencement Date unless expressly renewed by the Parties.
3.7 Payment for the provision of the supply and distribution services shall be
provided for in the Collaboration Agreement.
41
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
4. Novartis' Obligations
4.1 Novartis shall perform its obligations hereunder as principal. Except as
provided in this Schedule 5, it shall not otherwise dispose of the
Products within the Territory, and shall not sell the Products within the
Territory on behalf of, or in the name of, Cephalon.
4.2 Novartis shall not during the Term do anything which may prevent the sale,
or interfere with the development of, sales of the Products in the
Territory or which may adversely affect the quality of the Products.
4.3 Novartis shall maintain sufficient resources (either its own employees or
through permitted subcontracts) in order to perform in a timely and
satisfactory manner its obligations under this Agreement in respect of the
Products throughout the Territory.
4.4 Novartis shall supply the Product in packaging which incorporates any
information that may be required by the relevant Product Licence, any
Governmental or regulatory authority or any applicable law, rule or
regulation from time to time.
4.5 Novartis shall obtain and maintain at its own cost and expense all
necessary permissions, consents and licences to enable it to carry out its
obligations hereunder in the Territory and to ensure the full and legal
operation of this Agreement.
4.6 Novartis shall keep Cephalon informed in writing of respect of any
complaint, claim, demand or dispute concerning the Products in the
Territory.
4.7 Novartis agrees during the Term to comply with, and not to take any action
which would be subject to penalty under, all laws, rules and regulations
applicable to this Agreement in the Territory, and to conduct its business
in accordance with all applicable ethical business practices and Good
Distribution Practice.
4.8 Novartis undertakes during the Term that it will not copy, produce, make,
modify or manufacture or assist any other party to copy, produce, make or
manufacture the
42
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Products or any part thereof for use, sale, or any other purpose inside
the Territory. Provided that the provisions of this Clause 4.8 shall
terminate after five years following the Commencement Date unless renewed
by agreement between the Parties.
4.9 Novartis undertakes during the Term to store the Products in accordance
with the terms of the Product Licences and GDP under conditions that will
prevent deterioration of the Products. Novartis agrees to allow Cephalon
or its authorised representative to inspect the Products when in storage
under the control of Novartis from time to time upon reasonable notice.
4.10 Novartis shall advise Cephalon within 48 hours of any reported Adverse
Reaction occurring in the Territory and reported to Novartis in respect of
the Products. Novartis shall have sole responsibility for reporting
Adverse Reactions to the Medicines Control Agency and will conduct all
communication relating to safety issues.
4.11 Novartis shall be responsible for reporting any Adverse Reaction relating
to the Products to the health authorities in the Territory in accordance
with the applicable legal requirements.
4.12 Novartis shall provide Cephalon with copies of the periodic safety update
reports (if any) on Adverse Reactions and update requirements and
recommendations as to the best use of the Products.
4.13 Novartis shall be responsible for entering all Adverse Reactions to the
Products into their global Adverse Reactions database. This information
will be available for analysis and comment if required in relation to any
emerging safety issue in relation to the Products.
4.14 Novartis agrees to inform Cephalon and keep it informed within 48 hours of
notification of any action by, or notification or other information which
it receives (directly or indirectly) from any Governmental or Regulatory
Authority, which (a) raises any material concerns regarding the safety or
efficacy of any Product, (b)
43
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
which indicates or suggests a potential material liability for either
Party to third parties arising in connection with any Product, or (c)
which is reasonably, likely to lead to a recall of any Product, including
in all cases, but not limited to:
4.14.1 Governmental or Regulatory Authority inspections of
manufacturing, distribution of other related facilities, in
which Product is manufactured, stored or otherwise present;
4.14.2 receipt of a warning letter from any Governmental or Regulatory
Authority relating to any Product; or
4.14.3 on initiation of any Governmental or Regulatory Authority
investigations, detention, seizure or injunction concerning any
Product.
4.15 Novartis shall supply Products which meet the Specification and which are
manufactured in accordance with Good Manufacturing Practice and shall be
responsible for creating and retaining manufacturing, analytical and
distribution records, testing and releasing materials, undertaking product
and quality controls, including in-process controls and all necessary
stability studies, and analysis relating to the Product all in accordance
with such Specification and Good Manufacturing Practice.
44
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Part II
The Products
Brand Name Pack Size (SKU) NHS Supply Price (pounds)
ANAFRANIL 10mg caps - 84 2.75
25mg caps - 84 5.40
50mg caps - 56 6.85
ANAFRANIL SR 75mg tab - 28 7.51
ANAFRANIL SYRUP 25mg/5ml - 150ml 7.23
ANAFRANIL INJECTION 25mg/2ml - amp x 10 4.70
LIORESAL 10mg tab - 84 9.03
LIORESAL LIQUID 5mg/5ml - 300ml 7.46
(excluding sales for use in
intrathecal pumps)
RITALIN 10mg tab - 30 5.57
TEGRETOL 100mg tab - 84 2.43
200mg tab - 84 4.50
400mg tab - 56 5.90
TEGRETOL CHEWTAB 100mg - 56 2.95
200mg - 56 5.49
TEGRETOL RETARD 200mg - 56 4.82
400mg - 56 9.48
45
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
TEGRETOL LIQUID 100mg/5ml 300ml 5.72
TEGRETOL SUPPS 125mg - 5 7.50
250mg - 5 10.00
46
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Part III
The Trademarks
Registered
Product Territory Class number Valid until
ANAFRANIL UK 5 884607 2010
LIORESAL UK 5 853707 2008
RITALIN UK 5 669833 2007
TEGRETOL UK 5 831335 2007
47
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 6
Part I - Collaboration Committee
Cephalon Members
Sales and Marketing Director - UK
Finance Director - UK
Medical Director - UK
Novartis Members
Marketing Manager -- CNS - UK
Medical Manager -- CNS - UK
Planning Executive -- Finance - UK
Part II - Executive Committee
Cephalon Members
Senior VP and CFO Cephalon, Inc.
Senior VP Pharmaceutical Operations Cephalon, Inc.
Senior VP Business Development Cephalon, Inc.
UK Country Manager
Novartis Members
CEO Country Sector Organisation UK
Finance and Administration Director, UK
Director Business Units -- CNS - UK
Finance and Administration Manager - Basel
48
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 7
[**]
49
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Schedule 8
[**]
50
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
