Exhibit 10.2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
CONFIDENTIAL
CO-PROMOTION AND MARKETING SERVICES AGREEMENT
by and between
CRITICAL THERAPEUTICS, INC.
and
XXX, X.X.
MARCH 13, 2007
1
THIS CO-PROMOTION AND MARKETING SERVICES AGREEMENT (the "Agreement" or
"Definitive Agreement") is made as of March 13, 2007 ("Effective Date") by and
between CRITICAL THERAPEUTICS, INC., a corporation organized and existing under
the laws of the State of Delaware and having its principal offices at 00
Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("CRTX" ) and XXX, X.X., a limited
partnership organized and existing under the laws of the State of Delaware and
having its principal offices 0000 Xxxx Xxxxxx Xxxxxxxxx Xxxxx, Xxxx, XX 00000
("XXX").
WITNESSETH
WHEREAS, the Parties desire that XXX engage in the Promotion (as hereinafter
defined) of the Products (as hereinafter defined) in the Territory (as
hereinafter defined) in the Field (as hereinafter defined) for a certain period
of time and to coordinate DEY's activities with those of CRTX, subject to the
terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing statements and the mutual
agreements and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
AGREEMENT
ARTICLE 1
DEFINITIONS
Unless specifically set forth to the contrary herein, the following terms, where
used in the singular or plural, shall have the respective meanings set forth
below:
1.1 "Act" means the United States Food, Drug, and Cosmetic Act of 1938, as
amended, and the rules and regulations promulgated thereunder, or any successor
act, as the same shall be in effect from time to time.
2
1.2 "Above Baseline Quarterly NSMR" means the amount by which Quarterly NSMR
exceeds the Quarterly NSMR Baseline.
1.3 "Additional Zileuton Products" means any CRTX products with Zileuton as one
of the active pharmaceutical ingredients in the Territory for the treatment of
asthma and, subject to FDA approval, other respiratory conditions but shall not
mean or include (i) the Products or (ii) any product in the Excluded Field.
1.4 "Adverse Event(s)" or "AE(s)" means adverse drug experiences, as defined by
21 CFR Section 314.80, relating to a Product.
1.5 "Affiliate" means (i) any corporation, association or other entity of which
more than fifty percent (50%) of the voting securities or other ownership
interests representing the voting equity, the voting stock or general
partnership interest are owned, controlled or held, directly or indirectly, by a
Party; or (ii) any corporation. association or other entity which, directly or
indirectly, owns, controls or holds more than fifty percent (50%) of the voting
securities or other ownership interests representing the voting equity, the
voting stock or, if applicable, the general partnership interest, or the right
to of a Party.
1.6 "Applicable Laws" means all applicable federal, state and local laws,
statutes, rules, regulations and ordinances.
1.7 "Quarterly NSMR" shall mean Net Sales in any Calendar Quarter less the
royalty payments related to the Products paid or to be paid to CRTX's licensors
related to such Net Sales. The schedule for such royalty payments is shown in
Schedule 7.2(i). "Quarterly NSMR Baseline" shall mean U.S. $1.95 million.
1.8 "Business Day" means any day that is not a Saturday or a Sunday or a day on
which the NASDAQ Global Market is closed.
3
1.9 "Calendar Quarter" means each of the three month periods ending March 31,
June 30, September 30 and December 31, provided that the first Calendar Quarter
shall commence as of the Detail Commencement Date and end on June 30, 2007.
1.10 "Call" means an in person contact between a Sales Representative of a Party
and a Detail Target during which a Detail is made to the Detail Target.
1.11 "CFR" means the United States Code of Federal Regulations.
1.12 "Claims" means any suits, claims, actions, demands, complaints, lawsuits or
other proceedings that are brought by any Third Party, including without
limitation product liability claims and claims seeking to recover for personal
injury or death, that is alleged to have been caused, in whole or in part, by a
Product regardless of the legal theory alleged.
1.13 "Commercial Launch Date" means the date after FDA approval of the NDA for
Zileuton XR when Zileuton XR has been produced and released by CRTX, ready for
purchase by Third Party wholesalers and/or retailers in the Territory.
1.14 "Commercial Milestone Date" means the date after FDA approval of the NDA
for Zileuton XR when an aggregate of [**] Units of Zileuton XR has been produced
and released by CRTX, ready for purchase by Third Party wholesalers and/or
retailers in the Territory.
1.15 "Commercially Reasonable Efforts" means, with respect to the efforts to be
expended by a Party with respect to any objective, such reasonable, diligent,
good faith efforts to accomplish such objective as such Party would normally use
to accomplish a similar objective under similar circumstances exercising
reasonable business judgment for a product owned by it or to which it has
rights, which product is of similar market potential, taking into account
efficacy, safety, approved labeling, the competitiveness of alternative products
in the marketplace and other relevant factors commonly considered in similar
circumstances.
1.16 "CRTX Patents" shall mean those patents listed on Schedule 1.16.
4
1.17 "CRTX Trademark(s)" means the ZYFLO(R) trademark and domain names listed on
Schedule 1.17, together with all related common law trademark rights of CRTX
related thereto.
1.18 "Current Good Manufacturing Practices" or "GMP" or "cGMP" means the current
good manufacturing practice and standards as provided for (and as amended or
updated from time to time) in applicable ICH Harmonized Tripartite Guidelines
and as defined in Parts 210 and 211 of Title 21 of the CFR, as may be amended
from time to time, or any successors thereto.
1.19 "Committee" means the Joint Commercial Committee described in Section 3.1.
1.20 "Detail" means a Call during which relevant characteristics of a Product
are described by the Sales Representative of a Party aimed at encouraging the
appropriate use of a particular prescription pharmaceutical product and using,
if necessary or desirable, the Promotional Materials. A sample drop shall not be
considered a primary or secondary Detail. When used as a verb, "Detail" shall
mean to engage in a Detail.
1.21 "Detail Commencement Date" means the date that CRTX receives written notice
from XXX indicating that the first Call has been made by XXX' Sales
Representatives under the terms of this Agreement, and which is anticipated to
be May 1, 2007.
1.22 "Detail Targets" means all office-based physicians and other health care
professionals in the Territory that significantly influence use with respect to
any Product in the Territory and who the JCC agrees qualify as potential targets
for the Products.
1.23 "XXX Trademarks" shall mean the trademarks listed on Schedule 1.23.
1.24 "Excluded Field" shall mean the research, diagnostics, therapeutics and
services related to the following: (i) to humans aged seven (7) years and under
for intravenous or buccal administration of Zileuton and (ii) cardiovascular and
vascular devices, including, without limitation, stents.
1.25 "FDA" means the United States Food and Drug Administration and any
successor agency having substantially the same functions.
5
1.26 "Field" shall mean the use as a pharmaceutical product in humans for asthma
or other respiratory indications for which CRTX has received FDA approval,
except for the Excluded Field.
1.27 "Finished Product" means the formulation of any Product described in the
specifications included in the NDA for such Product (the "Zileuton IR or
Zileuton XR Specifications") and packaged and labeled and in a form ready for
distribution in the Territory.
1.28 "Forecast(s)" has the meaning set forth in Section 3.
1.29 "GAAP" means U.S. generally accepted accounting principles.
1.30 "Launch Period" shall mean the period from the Commercial Launch Date of
Zileuton XR in the Territory through the end of December 31, 2008.
1.31 "Losses" means any and all damages, awards, deficiencies, settlement
amounts, defaults, assessments, fines, dues, penalties (including penalties
imposed by any governmental authority), costs, fees, liabilities, obligations,
taxes, liens, losses, and expenses (including court costs, interest and
reasonable fees of attorneys, accountants and other experts) awarded or
otherwise paid or payable to Third Parties.
1.32 "NDA" means a new drug application (as defined in the Act and applicable
regulations promulgated thereunder, as amended from time to time) filed with the
FDA, including any supplements or amendments thereto which may be filed.
1.33 "Net Sales" shall mean the total gross sales of the Products in the
Territory determined in accordance with GAAP and CRTX's revenue recognition
policies less Standard Deductions (as defined below). Sales or other transfers
between CRTX and its Affiliates and/or sublicensees in the Territory shall be
excluded from the computation of Net Sales and no payments will be payable on
such sales or transfers except where such Affiliates or sublicensees are end
users in the Territory, but Net Sales shall include the subsequent sales to
Third Parties in the Territory by such Affiliates or sublicensees in the
Territory. "Standard Deductions" shall mean the total of the following
deductions actually allowed or taken and not in
6
excess of industry standard amounts and determined in accordance with GAAP and
CRTX's revenue recognition policies:
(a) credits or allowances actually granted for damaged or spoiled Product,
returns, recalls or rejections of Product, and retroactive price
reductions;
(b) normal and customary trade, cash and quantity discounts, allowances
and credits actually allowed;
(c) sales, value added, excise or similar taxes paid or allowed, or other
governmental charges imposed upon the importation, use or sale of
Product in the Territory;
(d) legally allowed chargebacks, rebates, fees or similar payments
actually granted to customers, including, but not limited to, managed
health care organizations, wholesalers, distributors, buying groups,
retailers, health care insurance carriers, pharmacy benefit management
companies, health maintenance organizations, or other institutions or
health care organizations or to federal, state/provincial, local and
other governments, their agencies and purchasers and reimbursers;
(e) credit card processing charges and fees, freight, postage, shipping
and insurance charges relating to delivery of the Products; and
(f) launch discounts, stocking fees and other discounts extended to
wholesalers.
1.34 "Party" means XXX or CRTX. "Parties" means XXX and CRTX.
1.35 "Patent Office" means the United States Patent and Trademark Office.
1.36 "PDMA" means the United States Prescription Drug Marketing Act of 1987, as
amended, or any successor act thereto, and the regulations promulgated
thereunder from time to time.
1.37 "Post-Launch Period" shall mean the period from January 1, 2009 until
December 31, 2010.
1.38 "Post-Exclusivity Period" shall mean the period from January 1, 2011 until
December 31, 2013.
7
1.39 "Pre-Launch Period" shall mean the periods between the Detail Commencement
Date and the start of the Launch Period.
1.40 "Product" or "Products" means individually or collectively, as applicable,
Zileuton IR and/or Zileuton XR, but shall not mean or include any (i)
injectable, topical, buccal, nasal or inhaled or intra-rectal formulation of
Zileuton or (iii) any form of zileuton other than the racemic form of Zileuton
described in the sNDA for Zileuton IR and the NDA for Zileuton XR. Products
shall not mean or include such alternative forms of Zileuton as salts,
enantiomers, polymorphs, metabolites or prodrugs of Zileuton.
1.41 "Product Label(ing)" shall have the same meaning as defined in the Act and
regulations as interpreted by the FDA.
1.42 "Product Quality Complaint" shall mean any legitimate complaint (as
reasonably determined by the Party receiving such complaint) by a Third Party
that (a) questions the purity, identity, potency or quality of the Product, its
packaging, or labeling, or (b) claims that the Product or its labeling is
mistaken for, or applied to, another article or any bacteriological
contamination, or (c) claims a significant chemical, physical, or other change
or deterioration exists in the distributed drug product, or (d) claims a failure
of one or more distributed batches of Product to meet the specifications
thereof.
1.43 "Promotion" means those activities normally undertaken by a pharmaceutical
company to implement promotion plans and strategies aimed at encouraging the
appropriate use of a particular prescription pharmaceutical product under a
common trademark, up to the point of offering Product for sale. When used as a
verb, "Promote" shall mean to engage in such activities.
1.44 "Promotional Materials" means all written, printed or graphic material
provided by CRTX and intended for use by a Party's Sales Representatives during
a Call, or marketing sponsored speaker programs including, but not limited to,
visual aids, file cards, premium items, clinical
8
studies, reprints, drug information updates and any other promotional support
items or advertising that CRTX, following consultation with the Committee, deems
necessary or appropriate in connection with the Promotion of Product.
Promotional Materials shall include only those materials describing FDA-approved
indicated uses, safety, effectiveness, contraindications, side effects, warnings
and other relevant characteristics of a Product that meet the regulations as
outlined in the CFR. Promotional Materials shall not include any Product
packaging or Product labeling or Sample labeling.
1.45 "Promotion Budget" means the budgets setting forth Promotion Expenses
relating to the Promotion of Products.
1.46 "Promotion Expenses" means all actual out-of-pocket expenses incurred
(i.e., paid or accrued) to a Third Party by or on behalf of CRTX and/or XXX in
connection with selling, marketing and Promotion of a Product in the Territory,
including the following, but excluding expenses for Product Samples, sales
forces, and salaries for employees performing marketing functions:
(a) marketing, advertising, Promoting, and educational expenses, including
speakers' programs, medical education programs and symposia,
relationships with opinion leaders and professional societies, public
relations and market research;
(b) training and communications materials and detail and visual aids;
(c) implementing marketing programs;
(d) Third Party market data, such as data from IMS or Wolters Kluwer
Health; and,
(e) preparation, storage and distribution of Promotional Materials;
provided, however, that Promotion Expenses shall specifically exclude
salaries and other internal overhead and/or compensation paid to
either Party's employees, including their respective sales forces.
1.47 "Promotion Plan" means a plan established by the Committee, relating to the
Promotion of a Product.
9
1.48 "Proprietary Information" means any and all scientific, clinical,
regulatory, sales, marketing, financial and commercial information or data,
customer-related materials, know-how, concepts, ideas, trade secrets, expertise,
and all of the foregoing regardless of whether communicated in writing, orally
or by any other means, which is owned and under the protection of one Party and
is provided by that Party to the other Party in connection with this Agreement.
1.49 "Sales Representative" means a qualified salesperson meeting the
requirements set forth in this Agreement, including, but not limited to Section
4.2 and 4.6 of this Agreement, employed by a Party.
1.50 "Samples" means Products provided primarily to Targeted Prescribers for no
consideration as part of the marketing, advertising and promotion of the
Products.
1.51 "SEC" means the United States Securities and Exchange Commission and any
successor agency having substantially the same functions.
1.52 "Term" shall have the meaning set forth in Section 12.1.
1.53 "Territory" means the United States of America (including the District of
Columbia) and all of its territories and possessions now or at any time during
the Term(s).
1.54 "Third Party(ies)" means a person or entity who or which is neither a Party
nor an Affiliate of a Party to this Agreement.
1.55 "Unit" means one trade bottle of one hundred twenty (120) tablets of a
Product.
1.56 "Zileuton" means the [**] compound
[**]-1-(1-benzo[b]thien-2-ylethyl)-1-hydroxyurea.
1.57 "Zileuton XR" means the extended-release tablet formulation of Zileuton as
described in CRTX's NDA filed thereon. Zileuton XR also is concurrently referred
to herein as the "Product."
10
1.58 "Zileuton IR" means the immediate-release tablet formulation of Zileuton
marketed as ZYFLO(R) (zileuton tablets) as described in the supplemental NDA
relating thereto filed by CRTX. Zileuton IR also is concurrently referred to
herein as the "Product."
1.59 "Year" means each consecutive twelve-month period starting January 1 and
ending December 31, provided that the first Year of the Term shall start on the
Detail Commencement Date and end on December 31, 2007.
Where words and phrases are used herein in the singular, such usage is intended
to include the plural forms where appropriate to the context, and vice versa.
The words "including", "includes" and "such as" are used in their non-limiting
sense and have the same meaning as "including without limitation" and "including
but not limited to". References to Articles, Sections, subsections, and clauses
are to the same with all their subparts as they appear in this Agreement.
"Herein" means anywhere in this Agreement. "Hereunder" and "hereto" means under
or pursuant to any provision of this Agreement.
ARTICLE 2
GRANT OF RIGHTS
2.1 CRTX Grant of Co-Promotion Right. Subject to the terms and conditions of
this Agreement, CRTX hereby grants to XXX, in the Territory in the Field and
during the Term, the non-transferable, exclusive right and license or sublicense
(as applicable) under the CRTX Trademarks and the CRTX Patents to Promote and
Detail Zileuton IR and Zileuton XR, as applicable, together with CRTX and its
Affiliates. Notwithstanding anything to contrary in this Section 2.1, CRTX
reserves the right to Promote and Detail the Products with its sales force in
the Territory during Term; provided, however, CRTX shall not have the right to
grant or license under the CRTX Trademarks and CRTX Patents to any Third Party
the right to Promote and Detail the Products in the Territory during the Term of
this Agreement. All use by XXX of the CRTX Trademarks shall be under the control
of CRTX and subject to CRTX quality standards.
11
2.2 CRTX Grant of Exclusive Option to Negotiate Additional Collaboration Rights.
Subject to the terms and conditions of this Agreement, CRTX hereby grants to XXX
the exclusive right to negotiate in accordance with this Section 2.2 with CRTX
Territory on Additional Zileuton Products in the Territory. By September 1, 2007
with respect to the injectable formulation of Zileuton, and by December 31, 2007
for the remaining Additional Zileuton Products, XXX and CRTX shall enter into
the discussion of potential Additional Zileuton Products to determine whether
the Parties wish to collaborate on the development and commercialization of any
Additional Zileuton Product in the Territory. Until such time, CRTX shall not
engage in any discussions with any Third Party regarding the development and
commercialization of Additional Zileuton Products in the Territory without DEY's
prior written consent. If the Parties reach agreement on the development and
commercialization of any Additional Zileuton Products in the Territory, a
separate agreement will reflect the terms agreed upon ("CRTX Development
Agreement"). The CRTX Development Agreement will include co-promotion terms for
any approved Additional Zileuton Product in the Territory resulting from the
co-development. If the Parties decide not to collaborate on the development and
commercialization of any Additional Zileuton Products in the Territory, or fail
to enter into a CRTX Development Agreement by September 1, 2007 with respect to
the injectable formulation of Zileuton, and by December 31, 2007 for the
remaining Additional Zileuton Products, CRTX shall have the right to enter into
discussions and agreements with Third Parties with respect to the development
and commercialization of Additional Zileuton Products on or after September 2,
2007 with respect to the injectable formulation of Zileuton and on or after
January 1, 2008 for the remaining Additional Zileuton Products.
2.3 XXX Xxxxx of Co-Promotion Rights. As of the date hereof, the Parties shall
enter into a binding letter agreement regarding the promotion by CRTX of DEY's
[**], the subject of DEY'S NDA #[**].
2.4 Access to Information. Subject to the terms and conditions of this
Agreement, each Party shall cooperate in good faith to provide access to and
reasonable assistance with its Proprietary Information and other significant
information of which it becomes aware that may be legally disclosed and that it
reasonably believes may be required for the other to perform its obligations,
hereunder.
12
ARTICLE 3
GOVERNANCE
3.1 Joint Commercial Committee.
(1) On or within thirty (30) days after the Effective Date, the Parties shall
establish and appoint members to the Joint Commercial Committee ("JCC" or
"Committee"), which shall consist of two (2) members from each Party who shall
meet in-person, by telephone or by video-conference at least quarterly to review
the overall progress as well as the Commercial Plans (as defined below). The JCC
will have various responsibilities and all decisions and recommendations by the
Committee shall be by unanimous agreement of the respective representatives of
XXX and CRTX, and, in the event of a tie, the matter shall be referred for
resolution by the Chief Executive Officer of each Party. If the Chief Executive
Officers from the Parties cannot resolve a given dispute within thirty (30)
days, the parties shall submit the dispute to mediation pursuant to Section 13.6
of this Agreement.
(2) The JCC shall be responsible for all of the following:
a) Reviewing and approving the detailed strategic marketing, promotion,
branding, sample strategy, managed care strategies and plans, sales
plans, and annual sales goals for the Products each to the extent
allowed by Applicable Laws ("Commercial Plans"). CRTX will develop the
initial 2007 pre-launch and launch Commercial Plans, which will be
reviewed, adjusted and approved by the JCC. Throughout the Term, CRTX
will be responsible for creating and implementing the marketing
programs.
b) Reviewing and approving the annual Commercial Plans for the Products.
c) Reviewing strategic sales and marketing issues. and sales incentive
plans for the Products.
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d) Adjusting each Party's Detail responsibilities if Zileuton XR Net
Sales for the previous four (4) consecutive Calendar Quarters is less
than [**] percent ([**]%) of the annualized Net Sales as of the Launch
Period.
e) Reviewing and approving the targeting and frequency commitment for
Details by the respective sales forces on a Calendar Quarter basis.
(3) The initial members of the JCC are set forth on Schedule 3.1. Either Party
may replace any or all of its members on the JCC at any time upon written notice
to the other. A Party may designate a substitute to temporarily attend and
perform the functions of such Party's designated representative at any meeting
of the Committee.
(4) The Committee will be used as the forum during the Term for the Parties to
discuss Product Promotion strategy, including pre-launch, launch, post-launch
and ongoing Promotional activities. In particular, subject to the foregoing and
the other terms and conditions of this Agreement, the Committee shall perform
the following functions:
(a) Discuss and advise CRTX in connection with the development of
Promotion Plans and Promotion Budgets (including allocation of
Promotion Expenses within the Promotion Budget on a quarterly basis
for training, Promotional Materials, visual aids and other Promotional
activities intended to support the Promotion and Detailing of such
Product) for the Products, and any material amendments or
modifications to any Promotion Plan or Promotion Budget, provided,
however, that the Promotion Budget for the Products shall be not less
than (i) US $3.0 million for 2007, as allocated to the categories set
forth on the initial Promotion Budget for the Products; and (ii) US
$[**] for each Year thereafter until the end of the Post-Launch
Period;
(b) Discuss the actual results of the Promotion of the Products in the
Territory as compared to the Promotion Plan;
(c) Discuss the state of the markets for the Products in the Territory and
opportunities and issues concerning the Promotion of the Products in
the Territory, including consideration of marketing, promotional and
managed care strategy, marketing research plans, labeling, Product
positioning and Product
14
profile issues, to determine the kind of marketing and selling efforts
that are appropriate;
(d) Discuss the commercial terms and conditions with respect to the sale
and distribution of the Products;
(e) Review data and reports assembled by CRTX from time to time with
respect to the Promotion of the Products in the Territory;
(f) Review Promotional Materials and promotional activities to be used by
the Parties in the Promotion of the Products, including the quantity,
method of distribution of, and guidelines for the use of Promotional
Materials or educational materials and literature related to the
Products;
(g) Collaborate to develop annual and quarterly forecasts (each, a
"Forecast") for sales of the Products; and
(h) Have such other responsibilities and address any other matters
delegated to the Committee under this Agreement or as may be mutually
agreed upon in writing by the Parties from time to time.
(5) Primary Contact. XXX and CRTX each shall appoint a person (a "Primary
Contact") to be the primary contact between the Parties with respect to the
Promotion Plan and to coordinate related correspondence between the Parties.
Each Party's initial Primary Contact is set forth on Schedule 3.1. Each Party
shall notify the other in writing as soon as practicable upon changing its
initial Primary Contact appointment.
(6) Meetings. The Committee shall hold meetings as frequently as reasonably
requested during the Term by one of the Parties upon not less than three (3)
business days notice to each member of the Committee; provided, however, that
(a) the agenda may be submitted by either Party, and (b) the Committee shall
meet on at least a monthly basis during the period commencing on the Effective
Date and expiring at the end of the first Year of the Term (with the first
meeting to be held not later than thirty (30) days after the Effective Date) and
thereafter on at least a quarterly basis through the end of the Term, unless the
Parties agree otherwise. Meetings may be held in person, by telephone, or by
video conference call and, except as set forth herein, the location of each
meeting shall alternate between the Parties' selected locations in California or
Massachusetts or such other location as may be mutually agreed upon by the
15
Parties. On advance written notice to the other Party, additional participants
may be invited by any representative to attend meetings where appropriate and to
address any matters that are within the responsibilities and functions of the
Committee. Each Party shall be responsible for all travel and related costs and
expenses for its members and other representatives to participate or attend
committee meetings. Any Proprietary Information disclosed in any meeting of the
Committee by a Party shall remain Proprietary Information of such Party and
shall be treated as confidential.
(7) Minutes of Committee Meetings. Draft minutes of each Committee meeting shall
be prepared and distributed by an individual designated by the Committee at
least ten (10) Business Days prior to the date of the next scheduled meeting of
the Committee and shall be approved as the first order of business at the
immediately succeeding meeting of the JCC. Such minutes shall include only key
discussion points and decisions made and provide a list of any identified issues
yet to be resolved.
ARTICLE 4
PROMOTION AND MARKETING ACTIVITIES / PARTY OBLIGATIONS / IP / TRAINING
4.1 General. Each Party will diligently Promote the Products in the Territory
during the Term, subject to the terms and conditions of this Agreement and in
accordance with its business, legal, medical and scientific judgment and all
Applicable Laws.
4.2 Sales Forces. During the Term, each Party will provide a professional,
appropriately-trained sales force to support its obligations under this
Agreement. The sales force of each Party shall remain under the direct and
exclusive authority, supervision and control of that Party at all times during
the Term. For purposes of this Agreement, all members of DEY's sales force
performing Details on the Product shall be employees of XXX. CRTX shall not be
involved in the interviewing, selection or hiring or the management or
supervision of DEY's sales force. XXX shall use Commercially Reasonable Efforts
to ensure that the qualifications of its Sales Representatives meet or exceed
the minimum criteria (including, without limitation, with respect to education
and sales experience) required by XXX as of the date hereof with respect to its
Sales Representatives detailing products other than the Products. For purposes
of this
16
Agreement, all members of CRTX's sales force shall be employees of CRTX. XXX
shall not be involved in the interviewing, selection or hiring or the management
or supervision of CRTX's sales force.
4.3 XXX Obligations:
(1) During the Pre-Launch Period, XXX shall perform Details on at least [**]
Detail Targets on an average of [**] times per month to Detail Zileuton IR in
the second position.
(2) During the Launch Period, XXX shall deliver [**] Details per full calendar
month to Detail Targets for Zileuton XR in the second position. [**] percent
([**]%) of the Details shall be delivered to Detail Targets who are respiratory
specialists (i.e., allergists and pulmonologists) at a frequency of [**] per
month.
(3) During the Post-Launch Period, XXX shall deliver [**] Details per month to
Detail Targets for Zileuton XR in the second position. [**] percent ([**]%) of
the Details shall be delivered to Detail Targets who are respiratory specialists
(i.e., allergists and pulmonologists)
(4) During the Post-Exclusivity Period, XXX shall deliver [**] Details per month
to Detail Targets for Zileuton XR in at least the tertiary or reminder position.
[**] percent ([**]%) of the Details shall be delivered to Detail Targets who are
respiratory specialists (i.e., allergists and pulmonologists); provided,
however, XXX shall have the option not to do so for the remainder of the initial
Term (i) if the JCC estimates that annual Zileuton XR total Net Sales will be
less than US $[**], or (2) if the total Net Sales in the prior four (4) Calendar
Quarters were less than US $[**]. XXX shall exercise this option by providing a
written notice to CRTX one month before terminating its Detailing efforts.
(5) For Details described in Subsections 4.4 (1) through (4), XXX shall provide
Details to Detail Targets who the JCC agrees qualify as potential targets for
the Products. The JCC also will determine an optimal level of Detail frequency
for all targeted physicians.
17
(6) In Years 2008 through 2010, XXX will contribute fifty percent (50%) of the
documented total Zileuton XR Promotion Expenses that are developed and approved
by the JCC. DEY'S contribution to the annual Zileuton XR Promotion Expenses
shall be a minimum of US $3.0 million per Year and, upon achievement of that
minimum, no more than [**] percent ([**]%) of the Net Sales for the Year. During
the Term of the Agreement, XXX also is responsible for salaries for its own
employees performing marketing functions, which shall be separate from and in
addition to the required Zileuton XR Promotion Expenses. Sales Representative
expenses and Sample expenses shall also be separate from and in addition to the
required Zileuton XR Promotion Expenses.
(7) XXX shall acquire from CRTX supplies of Zileuton IR Samples for
Committee-approved sampling activities by XXX sales force at [**] percent
([**]%) of the actual cost of such Zileuton IR Samples to CRTX, except for the
calendar year 2007, during which CRTX will provide such Zileuton IR Samples free
of charge to XXX.
(8) XXX shall acquire from CRTX the Zileuton XR Sample supplies for the sampling
activities by XXX sales force at CRTX's [**] in all periods during the Term.
(9) DEY'S incentive compensation plan for its Sales Representatives detailing
the Products shall reflect secondary position or tertiary position of the
Products with the goal of ensuring quality secondary or tertiary product
Details. Compensation shall align with such plan.
(10) XXX shall provide the support of its managed care group to negotiate
contracts and otherwise engage in activities with payors to ensure favorable
managed care access. This support will begin on the April 1, 2007 and will
continue throughout the year ended December 31, 2007. As part of such support,
the managed care group will provide CRTX with advice and logistical support
regarding managed care strategy, provide regular status and progress reports,
details regarding current, past and future managed care presentations regarding
the Products, provide contact information and copies of actual and template
contracts and presentations as reasonably requested by CRTX. For subsequent
Years, CRTX will have the option to have XXX continue this effort on a Calendar
Quarter basis, but will provide XXX with three (3) months
18
prior written notice if it wishes XXX to stop such efforts, and XXX will assist
with transition of such managed care efforts to CRTX.
(11) XXX shall not, directly or indirectly, manufacture, Detail, sell, market or
promote any product (except for Products during the Term of the Agreement)
containing Zileuton as one of the active pharmaceutical ingredients in the
Territory during the Term. If this Agreement expires or terminates for any
reason, XXX shall not, directly or indirectly, manufacture, Detail, sell, market
or promote any product containing Zileuton as one of the active pharmaceutical
ingredients for sale in the Territory until the later of (i) one year after such
expiration or termination or (ii) March 15, 2012 (the "Post-Termination
Non-Compete Period"); provided, however, if a Third Party AB-rated generic
product to Zileuton XR enters the Territory during this Post-Termination
Non-Compete Period, XXX will (i) have the exclusive right to be CRTX's exclusive
Authorized generic authorized generic co-promotion partner on terms to be
mutually-agreeable to the Parties and (ii) XXX will no longer be held to the
Post-Termination Non-Compete Period. Notwithstanding the foregoing, if this
Agreement is terminated by XXX pursuant to Section 12.2(2), by XXX pursuant to
Section 12.2(4), or by XXX pursuant to Section 12.2(6), the Post-Termination
Non-Compete Period in this Section 4.3(11) shall be void; provided, however, the
XXX and CRTX shall continue to abide by the provisions of Section 9 of this
Agreement after such termination.
(12) XXX shall use Commercially Reasonable Efforts to initiate its Promotions of
Products with its existing sales force no later than May 1, 2007.
4.4 CRTX Obligations:
(1) During the Pre-Launch Period, CRTX shall deliver at least [**] Details per
month in the first position for Zileuton IR.
(2) During the Launch Period and the Post-Launch Period, CRTX shall deliver at
least [**] Details per full calendar month in the first position for Zileuton
XR.
19
(3) During the Post-Exclusivity Period, CRTX shall deliver at least [**] Details
per month in at least tertiary position; provided, however, CRTX shall have the
option not to do so for the remainder of the initial Term (i) if the JCC
estimates that annual Zileuton XR total Net Sales will be less than US $[**], or
(2) if the total Net Sales in the prior four (4) Calendar Quarters were less
than US $[**]. CRTX shall exercise this option by providing a written notice to
XXX one month before terminating its Detailing efforts.
(4) CRTX is responsible for all Promotion Expenses for the Products in Year
2007, which shall be a minimum of US $3.0 million. In Years 2008 through 2010,
CRTX will contribute fifty percent (50%) of the Zileuton XR Promotion Expenses,
which are developed and approved by the JCC. CRTX contribution to the Zileuton
XR Promotion Expenses shall be at least US $3.0 million per Year, and upon
achievement of that minimum, no more than [**] percent ([**]%) of the Net Sales
for the Products for the Year. During the term of the Agreement, CRTX is also
responsible for salaries for its own employees performing marketing functions,
which shall be separate from and in addition to Product Promotion Expenses (and
also includes detail aids, promotional items, market research). CRTX Sales Force
expenses and Sample expenses shall also be separate from and in addition to
Product Promotion Expenses.
(5) CRTX'S incentive compensation plan for its Sales Representatives detailing
the Products shall reflect primary, secondary or tertiary position of the
Products with the goal of ensuring quality primary, secondary or tertiary
product Details. Compensation shall align with such plan.
(7) CRTX shall conduct, control, and fund Phase III/IV clinical trials for
Zileuton XR at its discretion. The aggregate total cost of the trials for 2007
and 2008 shall be a minimum of US $[**].
(8) CRTX, at its sole expense, will be responsible for obtaining and maintaining
all applicable regulatory approvals for Products and approving and submitting
all Promotional Materials in Territory, all as according to Applicable Laws.
(9) CRTX will also be solely responsible for the following:
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a) Setting the pricing of the Products covered under this Agreement and
approving Standard Deductions to wholesalers, managed care
organizations or Federal, state or local government programs (e.g.,
Medicare or Medicaid) related to the Products;
b) Maintaining its exclusive rights to the Products in the Territory,
other than those granted to XXX herein;
c) Using Commercially Reasonable Efforts to supply and distribute GMP
compliant Products in accordance with each Product's respective
specifications;
d) Using Commercially Reasonable Efforts to supply and ship to XXX at
DEY'S facility in Allen, TX sufficient quantities of GMP-compliant
commercial Zileuton IR Samples for DEY's sampling program, as approved
by the Committee, which Zileuton IR Samples shall be provided [**] to
XXX during calendar year 2007 and at [**] percent ([**]%) of the
actual cost to CRTX for Zileuton IR Samples provided to XXX after
calendar year 2007 and for which Zileuton IR Samples; provided, CRTX
shall pay for all shipping charges of such Zileuton IR Samples; and
e) Using Commercially Reasonable Efforts to supply and ship to XXX at
DEY'S facility in Allen, TX sufficient quantities of GMP-compliant
commercial Zileuton XR Samples for DEY's sampling program, which
Zileuton XR Samples shall be provided at CRTX's [**]; provided, CRTX
shall pay for all shipping charges of such Zileuton XR Samples.
(10) CRTX shall use Commercially Reasonable Efforts to provide XXX with final
draft Promotional Materials updated as agreed by the Parties and training
materials for the performance and supervision of Calls by no later than April 6,
2007, which the Parties agree is necessary in order for XXX to meet the Detail
Commencement Date. Such Promotional Materials shall be provided without cost to
XXX, and the cost shall be part of the Annual Promotion Budget. CRTX shall be
solely responsible for the preparation, content and method of distribution of
the Promotional Materials to one location designated by XXX. DEY's Sales
Representatives shall use only the Promotional Materials provided by CRTX in
conducting Calls hereunder and shall not develop, create, or use any other
promotional material or literature, or any other materials of any kind in
connection with the Detailing of the Products. CRTX will coordinate with XXX to
replenish supplies of Promotional Material to one location designated by XXX
when depleted on a timely basis. CRTX shall advise XXX promptly of any
inaccuracy or
21
incompleteness of the Promotional Materials or labeling. Upon such notice, XXX
will advise its representatives to cease the use of all of the Promotional
Materials or labeling (or any portion thereof) so identified by CRTX and will
either destroy or return such Promotional Materials or labeling to CRTX, at
CRTX's instruction and expense, and CRTX shall furnish XXX with corrected or
complete Promotional Materials or labeling as soon as practicable thereafter.
CRTX shall be responsible for all interactions with the FDA regarding approval
and /or submission of all Promotional Materials.
(11) CRTX shall use Commercially Reasonable Efforts to provide all necessary
support to XXX to enable XXX to begin Promoting the Products by the Detail
Commencement Date.
4.5 Intellectual Property. Each of CRTX and XXX shall retain their respective
intellectual property rights, including without limitation, all patents
(including CRTX Patents) and patent applications, copyrights and trademarks
(including CRTX Trademarks), owned by such Party as of the Effective Date or
otherwise arising during the Term and relating to such Party's respective
existing programs and materials in all formats (print, video, audio, digital,
computer, etc.) regarding sales training, patient education and disease
management programs owned or controlled by such Party at the time such materials
are shared with the other Party, as well as any modifications of such programs
each may develop in the future which are not specific to the Products. Except as
otherwise prohibited by Applicable Laws and as otherwise set forth herein, all
Promotional Materials used during the Term, including journal advertising and
sales aids (excluding packaging and FDA approved Product labeling) may display
the names and logos of CRTX and XXX. Except as otherwise prohibited by
Applicable Laws, and to the extent reasonably practicable, all Promotional
Materials will indicate that the applicable Product is manufactured and sold by
CRTX, promoted by XXX and CRTX, and that the CRTX Trademarks are owned by CRTX
and that the XXX Trademarks are owned by XXX. Notwithstanding the foregoing, the
Parties acknowledge and agree that, to the extent CRTX has existing stock of
Promotional Materials, CRTX shall be permitted to utilize such stock and to
provide such stock to XXX for use in connection with its promotional efforts
prior to the development and distribution of new Promotional Materials
displaying the names and logos of both CRTX and XXX. During the Term, all
applicable logos, subject to compliance with Applicable Laws, shall be
prominently displayed in accordance with each Party's specifications and be of
similar size to
22
each other on all such materials. Each Party hereby consents to such use of its
name and logo, provided that the other Party adheres to the agreed upon format
and language and, provided further, that neither Party will acquire any
ownership rights in the other Party's name or logo, or any rights to use the
other Party's name or logo beyond those set forth in this Section 4.5. After
expiration of the Term or after the termination of this Agreement, neither Party
will include any of the other Party's names or logos on any Promotional
Materials, except as required by Applicable Laws. If either party's corporate
name or logo should change from what it is at Effective Date of this Agreement,
such Party shall be responsible and reimburse the other party for all additional
expenses in connection with procuring additional stock of Promotion Materials as
a result of such name or logo change.
4.6 Training.
(1) Each Party shall have the responsibility for training its sales force with
respect to the Promotion of the Products in the Territory, and each Party will
be solely responsible for all costs associated with training its respective
sales force. During the Term, CRTX shall provide XXX with such assistance as is
reasonably requested by XXX and as mutually agreed to in connection with the
training programs to help ensure that the training of DEY'S sales force will be
consistent with the training provided to CRTX's sales force regarding the
Products in the Territory.
(2) During the Term, CRTX shall provide XXX with sufficient quantities of
training materials relating to the Products in order to meet the Projected
Detail Commencement Date, including an up-to-date programmed learning unit for
"at home" study. Such materials shall be provided to XXX free of charge for
distribution to the XXX sales force, and all costs associated with the
preparation and distribution of training materials shall be deemed Promotion
Expense and the cost counted toward the Annual Promotion Budget.
(3) All expenses during the Term that are incurred by either Party and
associated with any launch meeting or any training meetings for the Products for
such Party's sales force shall be the responsibility of the Party incurring such
cost. Promptly after the Effective Date, CRTX and
23
XXX shall agree on a mutually convenient schedule that will enable the training
of the XXX sales force in sufficient time to meet the Projected Detail
Commencement Date.
(4) In addition to the training referred to above, during the Term, each Party
shall conduct separate training programs for their respective sales force with
respect to the Medicare and Medicaid Anti-Kickback Statute, as set forth at 42
U.S.C. Section 1320(a)-7b(b) and the acts prohibited thereunder, PDMA
regulations, and all other applicable guidances relating to promotion of
Product, including, without imitation, the PhRMA Code on Interactions with
Healthcare Professionals. Upon completion of such additional training, each
sales force member shall be required to sign a certificate acknowledging their
receipt of such training and certifying and acknowledging their understanding of
the conduct of the training.
4.7 Other Marketing and Promotion Services.
(1) CRTX shall provide such other Promotional activities, as applicable, which
are an integral part of the implementation of Promotion plans to support the
activities normally undertaken by a professional sales representative of a
pharmaceutical company comparable in size to XXX and CRTX to Promote a
particular prescription pharmaceutical product aimed at encouraging the
appropriate use of such product by a health care professional with actual
prescribing authority or influence or, in the case of the Products, to prepare
for such activities. CRTX shall incur Promotional Expenses up to the amount set
forth in the applicable Promotion Budgets. CRTX shall be responsible for payment
on a timely basis of all Promotion Expenses set forth in the Promotion Budgets
in accordance with such budgets.
(2) CRTX or its Third Party contractor shall provide reasonable order entry,
customer service, reimbursement management, medical affairs (including reports
for all Adverse Events as set forth herein at Article 6), medical or drug
information, warehousing, physical distribution, invoicing, credit and
collections (including maintaining and enforcing the credit policy applicable to
the Products) production forecasting and other related facilities and services
necessary or desirable for the manufacturing and supply, distribution,
marketing, Promotion and sales of the Products under this Agreement. Such
services shall include contract administration, including handling wholesaler
chargebacks, managed care contracts, federal and state government
24
contracts, rebate contracts, long-term care contracts, performance-based
contracts, and hospital purchasing contracts. CRTX shall book all sales and be
exclusively responsible for accepting and filling purchase orders for Product
and for processing billing and returns with respect to the Products.
(3) CRTX will (i) provide XXX with reasonable access (at DEY's expense for any
additional work that XXX may request) to all medical advisors and consultants
and with medical education, medical or drug information regarding the Products
and FAQs, and public relations agencies engaged by CRTX with respect to the
Promotion of the Products (collectively, "Product Advisors") and (ii) allow XXX
to participate in meetings or discussions relating to marketing, medical
education programs, or any other promotional activities relating principally to
the Products between CRTX and any Product Advisor.
(4) In addition to any other reports required by this Agreement, CRTX shall
provide to XXX at no cost to XXX (i) on a monthly basis, within [**] days after
the end of each month beginning or ending during the Term, (A) a reconciliation
of actual Promotion Expenses incurred to the Promotion Budget; (B) reports of
Net Sales, including any Standard Deductions from the gross amount invoiced for
the immediately preceding month; (ii) on a monthly basis, the number of Units of
each Product sold in the Territory by customer account; and, as well as such
other reports as may be reasonably requested by XXX in connection with the
performance of the Parties' obligations hereunder.
4.8 Covenants of the Parties.
(1) CRTX covenants that, during the Term, the CRTX sales force shall (i) limit
its claims of efficacy and safety for the Products to those that are consistent
with approved promotional claims and FDA-approved prescribing information for
the Products in the Territory; (ii) not add, delete or modify claims of efficacy
and safety in the Promotion of the Products from those claims of efficacy and
safety that are consistent with the FDA-approved prescribing information; (iii)
use the Promotional Materials in accordance with this Agreement and Applicable
Laws; (iv) Promote the Products in accordance with Applicable Laws; and, (v)
comply with the CRTX code of business conduct and Comprehensive Compliance
Program.
25
(2) XXX covenants that, during the Term, the XXX sales force shall (i) limit its
claims of efficacy and safety for the Products in the Territory to those that
are consistent with approved promotional claims and FDA-approved prescribing
information for the Products; (ii) not add, delete or modify claims of efficacy
and safety in the Promotion of the Products under this Agreement from those
claims of efficacy and safety that are consistent with the FDA-approved
prescribing information; (iii) use the Promotional Materials in accordance with
this Agreement and Applicable Laws; and (iv) Promote the Products in accordance
with Applicable Laws; and, (v) comply with the XXX Code of Conduct and
compliance program.
ARTICLE 5
FINANCIAL TERMS / PAYMENTS / STATEMENTS
5.1 XXX will make a US $3 million non-refundable payment to CRTX upon the
Effective Date of this Agreement.
5.2 XXX will pay CRTX non-refundable payments of:
a. US $4 million within twenty (20) days after the US FDA's NDA approval
of Zileuton XR;
b. US $5 million within twenty (20) days after the Commercial Milestone
Date for Zileuton XR in the Territory; and
c. Amounts owed by XXX for its portion of (i) Zileuton XR Promotion
Expenses pursuant Section 4.3(6) of this Agreement, (ii) Sample costs
pursuant Section 4.3(7) of this Agreement, or (iii) Sample costs
pursuant to Section 4.3(8) of this Agreement, each within thirty (30)
days after from receipt of invoice from CRTX.
5.3 CRTX shall pay XXX for the support of DEY's Managed Care group to negotiate
contracts and otherwise engage in activities with payors to ensure favorable
managed care access from April 1, 2007 until December 31, 2007 and for
subsequent Calendar Quarters that CRTX exercises its option to have XXX continue
this effort during the Term of this Agreement. The payment for each Calendar
Quarter shall be $70,312.50 (prorated for partial Calendar Quarters), which
shall be paid quarterly in arrears to XXX and which shall be increased each
26
Year, if CRTX elects to extend such services, by [**] percent ([**]%) per annum
during the Term of the Agreement.
5.4 CRTX will pay XXX a Co-Promotion Fee for the Pre-Launch Period, which shall
be calculated and paid as follows:
a. The Co-Promotion Fee shall be seventy percent (70%) of the Zileuton IR
total Above Baseline Quarterly NSMR, calculated on a quarterly basis.
b. No Co-Promotion Fee will be paid with respect to NSMR of Zileuton IR
in any Calendar Quarter if the NSMR of Zileuton IR in such quarter is
less than the Baseline Quarterly NSMR.
c. The Co-Promotion Fee will be paid quarterly within 30 days after the
end of the applicable Calendar Quarter.
5.5 CRTX will pay XXX a Co-Promotion Fee for the Launch Period, which shall be
calculated and paid as follows:
a) The Co-Promotion Fee shall be thirty-five percent (35%) of the
Products' total Above Baseline Quarterly NSMR, calculated on a
quarterly basis.
b) No Co-Promotion Fee will be paid with respect to NSMR of Products in
any Calendar Quarter if the NSMR of Products in such quarter is less
than the Baseline Quarterly NSMR.
c) Subject to Section 5.8(3), the Co-Promotion Fee will be paid quarterly
within 30 days after the end of the applicable Calendar Quarter.
5.6 CRTX will pay XXX a Co-Promotion Fee for the Post-Launch Period, which shall
be calculated and paid as follows:
a) The Co-Promotion Fee shall be thirty-five percent (35%) of the
Products' total Above Baseline Quarterly NSMR, calculated on a
quarterly basis.
b) No Co-Promotion Fee will be paid with respect to NSMR of Products in
any Calendar Quarter if the NSMR of Products in such quarter is less
than the Baseline Quarterly NSMR.
27
c) Subject to Section 5.8(3), the Co-Promotion Fee will be paid quarterly
within 30 days after the end of the applicable Calendar Quarter.
5.7 CRTX will pay XXX a Co-Promotion Fee for the Post-Exclusivity Period, which
shall be calculated and paid as follows:
a) The Co-Promotion Fee shall be twenty percent (20%) of the Products'
total Above Baseline Quarterly NSMR, calculated on a quarterly basis.
b) No Co-Promotion Fee will be paid with respect to NSMR in any Calendar
Quarter if the NSMR of Products in such quarter is less than the
Baseline Quarterly NSMR.
c) Subject to Section 5.8(3), the Co-Promotion Fee will be paid quarterly
within 30 days after the end of the applicable Calendar Quarter.
d) If, pursuant to Section 12.2(1), CRTX terminates this Agreement, CRTX
will be obligated to pay XXX until the end of the initial Term, as
follows: [**] percent ([**]%) of the amount due XXX under Section
5.7a, above, for up to four (4) subsequent Calendar Quarters after the
effective date of such termination and, for any additional Calendar
Quarters until the end of the initial Term, if any, [**] percent
([**]%) of the amount due XXX under Section 5.7a, above.
5.8 Reports / Reconciliations / Records.
(1) XXX will provide CRTX actual Product detailing information monthly within
[**] days of the close of each month. XXX shall keep complete and accurate
records of the actual Product Details made by its Sales Representatives
(including, without limitation, names and identification numbers of doctors,
dates of presentations, whether the call is a primary, secondary or tertiary
product presentation, and the number of Samples delivered per Detail, as well as
the number of Sales Representatives in DEY's sales force Detailing the Products
at the end of each calendar month) and the other activities carried out pursuant
to this Agreement. For Sample distribution, the records shall include the number
of Samples dropped, the lot number of each sample, the doctor's name and address
and date of delivery made by each Sales Representative. XXX shall make such
records available to CRTX during DEY's regular
28
business hours upon reasonable advance notice and no more than four times during
any Agreement Year and shall provide CRTX a report summarizing such matters
within [**] days after the end of each calendar month. The summary shall contain
the details of sample distribution records as detailed above. XXX shall maintain
such records for [**] years following the period to which they relate. XXX shall
provide CRTX [**] months' prior written notice of its intention to destroy such
records; CRTX shall have the right to obtain such records from XXX prior to the
time of DEY's proposed destruction date at CRTX's own expense. XXX acknowledges
and agrees that CRTX may from time to time (but no more often than once in any
Year) audit, or retain an independent third party audit service to audit, DEY's
activities under this Agreement, including, but not limited to, Details and call
and Sample reporting. Such independent audit service shall keep confidential any
information obtained during such examination and shall report only the
information which is the subject of the audit.
(2) Any change in the amount that would have been payable from CRTX to XXX under
this Agreement which results from any restatements to a prior period's financial
results due to errors, omissions, or any other misstatements, shall be added to
or deducted from, as applicable, the amount of the next Quarterly Payment due
under this Agreement.
(3) CRTX shall keep, and shall require its Affiliates to keep, complete and
accurate records in sufficient detail to permit accurate determination of all
amounts necessary for calculation and verification of all payment obligations
set forth in this Article 5. In the event payments required to be made under
this Section 5 are not made on or prior to the required payment date, the amount
of the late payment shall bear interest at the Prime Rate plus 2% commencing on
the date such payment is due until such date as the payment is made. "Prime
Rate" for purposes of this Section 5 shall mean the prime rate of Citibank, N.A.
in New York, New York as published in the Wall Street Journal computed on a
daily basis and shall change when and as the Prime Rate changes.
5.9 Audits.
(1) Upon no less than [**] Business Days prior written notice of XXX, CRTX shall
permit an independent certified public accounting firm of recognized standing
(but not Deloitte & Touche
29
LLP or DEY's current accounting firm), selected by XXX and reasonably acceptable
to CRTX (the "Independent Accountant"), as well as representatives of XXX, to
have access during normal business hours to such of the records of CRTX to the
extent necessary to verify the accuracy of the reports under this Section 5 for
any Year ending not more than [**] months prior to the date of such request. The
Independent Accountant shall disclose to XXX whether the reports are correct or
incorrect, the specific details concerning any discrepancies and such other
information that should properly be contained in a report required under this
Agreement. The number of audits conducted of the records of CRTX pursuant to
this Section 5 shall not exceed [**] with respect to each Year of the Term or
[**] with respect to the last Year of the Term.
(2) If the Independent Accountant concludes that additional amounts were owed by
CRTX for such Year, CRTX shall pay the additional payments, together with
interest at the Prime Rate on the amount of such underpayment, within [**]
Business Days of the date XXX delivers to CRTX the Independent Accountant's
written report so concluding unless the report and alleged underpayment is
reasonably contested in accordance with Section 5.9(5) of the Agreement. In the
event that, following the Independent Accountant's review and the conclusion of
any dispute with respect thereto, it is determined that that amounts were
overpaid by CRTX during such period, XXX shall repay CRTX the amount of such
overpayment within [**] Business Days of the date XXX delivers to CRTX such
accounting firm's written report so concluding. The fees charged by such
accounting firm shall be paid by XXX; provided, however, that if an error in
favor of XXX of more than [**]% of the Co-Promote Fee for most recent Calendar
Year is discovered, then the fees and expenses of the accounting firm shall be
paid by CRTX.
(3) Upon the expiration of [**] months following the end of any Year for which
CRTX has made payment in full of amounts payable with respect to such year, and
in the absence of negligence or willful misconduct of CRTX or a contrary finding
by an accounting firm provided pursuant to this Section 5, such calculation
shall be binding and conclusive upon CRTX, and CRTX shall be released from any
liability or accountability with respect to payments for such year.
(4) Each Party shall treat all financial information subject to review under
this Section 5.3 in accordance with the confidentiality provisions of this
Agreement.
30
(5) Either Party may dispute the report of the Independent Accountant by written
notice to the other Party given within [**] days of receipt of such report,
setting forth in reasonable detail such Party's objections to such report and
the basis therefor. Any such dispute shall be resolved in accordance with the
provisions of Section 13.6 of this Agreement.
5.10 Calculations / Currency of Payment. All calculations herein shall give
pro-rata effect to and shall be proportionally adjusted by giving effect to the
actual number of days in the applicable Calendar Quarter or Year, respectively.
All payments due under this Agreement shall be payable in United States dollars.
ARTICLE 6
REGULATORY MATTERS
6.1 CRTX shall fulfill and discharge on a timely basis all obligations under all
Applicable Laws as are necessary or customary in accordance with accepted
business practices and legal requirements to maintain the authorization and/or
ability to manufacture, finish, package, store, label and promote the Products
in each country where they are so manufactured, finished, packaged, stored,
labeled, and promoted and to import, sell, or market Products in the Territory,
including, without limitation, the obligations set forth in this Article 6. CRTX
shall be responsible for review and approval of all Promotional Materials to be
used by the Parties for the Products.
6.2 CRTX's obligations hereunder shall include as reasonably necessary and
applicable the maintenance of all regulatory approvals necessary (i) for the
manufacture, finishing and labeling of Products in accordance with cGMPs, (ii)
for the importation of Product into the U.S., if applicable, and (iii) for the
use and marketing of Products for all approved indications in the U.S.,
including, without limitation, maintaining such records and filing such reports
as may be required under the provisions of the Act, as well as applicable state
and federal law including, without limitation, all Promotional Materials and
labeling relating to Products. All communications with government agencies
concerning any Product shall be the sole responsibility of CRTX, provided that
during the Term, XXX shall (i) provide reasonable cooperation with CRTX to the
extent deemed reasonably necessary by the Parties to respond to
31
such communications; and (ii) have the right to communicate with the FDA or any
other governmental agency regarding the Products if such communication is
necessary to comply with the terms of this Agreement or the requirements of
Applicable Laws or governmental order.
6.3 CRTX's obligations hereunder shall include obtaining any necessary FDA
approvals of any Product Label, FDA-Approved Prescribing Information, labeling,
monographs and packaging, and Promotional Materials used in connection with the
Products. post FDA approval. CRTX will provide XXX draft copies of proposed
post-approval labeling changes or modifications to the Product Label,
FDA-Approved Prescribing Information and labeling for comments, which will be
considered by CRTX. CRTX shall also provide XXX with final copies of such FDA
submissions within [**] days after filing with the FDA. In addition, CRTX will
provide XXX copies of DDMAC 2253 submissions and copies of any correspondence
with DDMAC regarding Products post-approval.
6.4 Recalls and Other Corrective Action. CRTX shall have the sole right and
responsibility to conduct, [**] any recall, market withdrawals, or other
corrective action related to Product in the Territory. At CRTX's [**], Xxx shall
provide information, as needed by CRTX to conduct such recall, market
withdrawals, or other corrective action related to Product in the Territory.
6.5 Adverse Events. CRTX shall use its established operating procedures to
report Adverse Events to the FDA in accordance with Applicable Laws. Such
operating procedures shall include any measures necessary for CRTX to fully
comply with such Applicable Laws. In any event, XXX shall use Commercially
Reasonable Efforts to notify CRTX within [**] hours of XXX becoming aware of any
Adverse Event (as set forth in 21 CFR 314.80); provided, however, such
failure(s) shall not be a breach under this Agreement unless the frequency is
more than [**] in any Calendar Year. CRTX shall be solely responsible for the
timely filing with the FDA of all Adverse Event reports. CRTX shall promptly
provide to XXX copies of all 7 day or 15 day expedited reports, periodic reports
and safety analyses, and safety summary submissions to the FDA or other
governmental agency. CRTX's central safety department will use its existing
toll-free phone number for patients, physicians and others to report Adverse
Events. The costs of such reporting and of all services provided in connection
with Adverse Events hereunder shall
32
be borne solely by CRTX. CRTX will timely collect information about the Adverse
Events, initiate and conduct reasonably required investigations, determine if
physical or other testing of Product appears to be reasonably required,
determine the nature of the Adverse Event based on data and reports it has
obtained, and issue any reports, analyses, or summaries of its activities as may
be required by Applicable Laws, including, without limitation, preparing and
filing with the FDA on a timely basis such reports as are necessary and
appropriate. Copies of all such reports, including reports filed by CRTX with
the FDA, will be provided to XXX within [**] days.
6.6 Regulatory Cooperation. During the Term, each Party shall inform the other
Party within [**] days of its receipt of any information that: (i) raises any
concern regarding the safety or efficacy of Product; (ii) concerns suspected or
actual Product tampering or contamination or other similar problems with respect
to Product; (iii) is reasonably likely to lead to a recall or market withdrawal
of Product; or (iv) concerns any ongoing or potential FDA investigation,
inspection, detention, seizure or injunction or other action involving Product
or (v) any circumstances that are reasonably likely to materially adversely
impact the manufacturing or supply of the Products (including the failure of any
batch of Finished Products to meet the Zilueton IR or Zileuton XR Specifications
that CRTX reasonably deems such failure likely to impact such supply).
6.7 Safety Contacts. All safety related reports and correspondence shall be
addressed to: Xxxx X. Xxxx, M.D., Chief Medical Officer, Critical Therapeutics,
Inc., (fax number (000) 000-0000; telephone number (000) 000-0000), or such
other safety representative as may be designated by CRTX.
6.8 Safety Meetings. A representative of XXX shall be entitled to attend in
person or by telephone conference, and to receive on a timely basis any written
minutes of, any internal safety review or annual product labeling meetings held
by CRTX relating to a Product. CRTX shall provide XXX with reasonable advance
notice of the date, time and location of such meetings. Such information shall
be confidential.
33
6.9 Medical Inquiries. CRTX and its Third Party contractors shall be responsible
for responding to medical questions or inquiries from members of the medical and
paramedical professions and consumers regarding the Products, including the
distribution of standard medical or drug information letters, provided a form of
such letter has been approved by CRTX, resulting from the activities of the
sales forces except as otherwise specifically agreed to between the Parties.
During the Term, XXX shall promptly communicate to CRTX all comments, requests
and inquiries of the medical profession or any other Third Parties for
information relating to the Products, including prescription, Sampling, and
safety information, within the Territory, of which it becomes aware. During the
Term, upon the reasonable request of CRTX, XXX shall provide reasonable
cooperation to CRTX to the extent deemed necessary to respond to such
communications and CRTX shall provide copies of the responses given, in
accordance with the Applicable Laws, including, but not limited to, any
regulations and policies of the FDA, applicable to XXX. CRTX shall formulate
responses to such inquiries, including the content of any Frequently Asked
Questions. If appropriate, CRTX shall establish a centralized database to
document and track medical inquiries.
6.10 Product Quality Complaints. During the term CRTX or its designated agent
shall have the full responsibility for responding to complaints from CRTX's
Product Quality Complaints. XXX shall promptly notify CRTX in writing of any and
all Product Quality Complaints received by XXX in accordance with a procedure
mutually agreed to by the parties. All out-of-pocket costs incurred in respect
of this Section 6.10 shall be borne by CRTX.
6.11 Storage of Product Samples. Product Samples stored by or on behalf of XXX
during the Term has been and will be stored in accordance with and will conform
to the storage conditions of the Product Samples, cGMPs, other applicable FDA
and other regulatory standards and such quality assurance practices as are
standard. Upon request of CRTX, XXX shall permit duly authorized representatives
of CRTX or its third party designees, [**] every calendar year (or more
frequently if an audit reveals significant concerns from the perspective of
CRTX, acting reasonably, that require appropriate additional audit follow-up)
during normal business hours and upon reasonable prior written notice, and in
any event on not less than [**] days notice, to audit DEY's warehouse facility.
CRTX shall provide XXX with the approved storage conditions for the Product
Samples.
34
6.12 Product Samples and PDMA Compliance. XXX is responsible to distribute
Product Samples and maintain all documentation of sampling and reporting in
compliance with all Applicable Laws, including the PDMA. XXX shall notify
promptly CRTX in writing of any FDA reportable event in connection with all
reports submitted to FDA on diversion, theft or loss of Product Samples in
connection with the CFR. Upon request of CRTX, XXX shall permit duly authorized
representatives of CRTX or its third party designees, [**] every calendar year
(or more frequently if an audit reveals significant concerns from the
perspective of CRTX, acting reasonably, that require appropriate additional
audit follow-up) during normal business hours and upon reasonable prior written
notice, and in any event on not less than [**] days notice, to audit DEY's PDMA
compliance records relating to the Product Samples.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 General Representations. Upon the Effective Date, each Party hereby
represents and warrants to the other Party as follows:
(a) Such Party is a corporation (in the case of CRTX) or limited
partnership (in the case of XXX) duly organized, validly existing and
is in good standing under the laws of the jurisdiction of its
organization, is qualified to do business and is in good standing as a
foreign corporation or limited partnership, as the case may be, in
each jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification and failure to
have such would prevent it from performing its obligations under this
Agreement;
(b) The execution, delivery and performance by such Party of this
Agreement have been duly authorized by all necessary corporate action
and do not and will not (i) violate any provision of any law, rule,
regulation, order, writ, judgment, injunction, decree, determination
or award presently in effect having applicability to it or any
provision of its charter or bylaws (in the case of CRTX) or
certificate of limited partnership or limited partnership agreement
(in the case of XXX); or
35
(ii) conflict with or constitute a default under any other agreement
to which such Party is a party;
(c) This Agreement has been duly executed and is a legal, valid and
binding obligation of such Party, enforceable against it in accordance
with the terms and conditions hereof, except as enforceability may be
limited by (i) any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditor's rights generally, or
(ii) general principles of equity, whether considered in a proceeding
in equity or at law; and
(d) Such Party has obtained all authorizations, consents and approvals,
governmental or otherwise, necessary for the execution and delivery of
this Agreement, and to otherwise perform such Party's obligations
under this Agreement.
7.2 Additional CRTX Representations and Warranties. Upon the Effective Date,
CRTX hereby represents and warrants to XXX that:
(a) The Promotional Materials are not false or misleading in any material
respect, and are substantially in compliance with the Act and all
rules and regulations of the FDA;
(b) CRTX has no reason to believe that any of the CRTX Patents are, or are
likely to be held, invalid or unenforceable; and the CRTX Patents are
in full force and, to the knowledge of CRTX, not subject to any
pending or threatened re-examination, opposition, interference or
litigation proceedings;
(c) Except as otherwise indicated in Schedule 1.16, CRTX is the sole and
exclusive owner of, or controls and has the exclusive rights to use,
license and/or sublicense in the Territory, the CRTX Patents and the
CRTX Trademarks, and the CRTX Patents owned by CRTX and the CRTX
Trademarks are not subject to any encumbrance, lien or claim of
ownership by any Third Party except as set forth in the "Other CRTX
Agreements" (as defined below); CRTX has not granted to any Third
Party any license, or other rights to use the CRTX Patents or the CRTX
Trademarks in the Territory or to import, manufacture, distribute,
use, sell or offer to sell any of the Products in the Territory, which
conflict with the rights
36
granted to XXX hereunder; at no time during the Term shall CRTX
encumber or grant rights in or with respect to the CRTX Patents or the
CRTX Trademarks that conflict with the rights granted to XXX under
this Agreement;
(d) The manufacture, authorized use, importation and/or sale of any
Product in the Territory does not infringe or misappropriate any
United States patents and/or trademarks and, to the knowledge of CRTX,
any other intellectual property right of any Third Party;
(e) The data and information provided to XXX prior to the Effective Date
relating to (i) pre-clinical and clinical study results and protocols
related to the Products; (ii) any communications to and from any
Regulatory Authority with respect to the Products, including any
regulatory submissions and filings, correspondence with, and minutes
of meetings and telephone conferences with Regulatory Authorities; and
(iii) Adverse Events and other IND safety reports with respect to any
of the Products, has been accurate and complete in all material
respects and CRTX has made no material misrepresentation or material
omission in connection with such data and information. No information
has come to the attention of CRTX as would render the IND or NDA for
any Product untrue, incomplete or inaccurate in any material respect;
(f) All Finished Product and Product Samples manufactured and supplied by
or on behalf of CRTX during the Term has been and will be manufactured
in accordance with and will conform to the specifications of such
Product, cGMPs, other applicable FDA and other regulatory standards
and such quality assurance and quality control practices as are
standard in the pharmaceutical manufacturing industry;
(g) CRTX is the owner of the registration of the xxxx ZYFLO(R) and no
claim or demand has been asserted in writing against CRTX as of the
Effective Date alleging trademark infringement resulting from the use
and/or registration of the ZYFLO trademark;
(h) CRTX has full legal rights to grant the rights, licenses, and
sublicenses described under this Section pursuant to its own ownership
rights and/or pursuant to rights granted to CRTX under the following
agreements: (1) License Agreement with Xxxxxx Laboratories dated
December 18, 2003, subject to compliance with Abbott
37
Laboratories' Co-Commercialization Right of First Negotiation under
Section 2.4 of such License Agreement; (2) Agreement with Jagotec AG
dated December 3, 2003; (3) License Agreement with Xxxxxx Laboratories
dated March 19, 2004 and, (4) Development and Scale-Up Agreement with
SkyePharma AG dated May 5, 2004 (collectively, the "Other CRTX
Agreements"); and, CRTX has met, and will continue to be in
substantial compliance with all of its obligations under the Other
CRTX Agreements; and
(i) Insofar as the details in their respective agreements have not been
made available to XXX on due diligence due to the confidentiality
provisions of such agreements, CRTX represents and warrants that the
royalties due and being paid under the Other CRTX Agreements are
accurately summarized in Schedule 7.2(i).
7.3 DISCLAIMERS. EXCEPT AS PROVIDED ELSEWHERE IN THIS AGREEMENT, NEITHER PARTY
MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, WHETHER EXPRESS OR
IMPLIED, STATUTORY, OR BY OPERATION OF LAW OR OTHERWISE, AND EACH PARTY
EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT AND SUITABILITY OF THE PRODUCT AND/OR THE
CO-PROMOTION SERVICES TO BE PROVIDED HEREUNDER.
ARTICLE 8
TRADEMARK MATTERS
8.1 General. Solely on the terms and conditions set forth herein, it is the
intent of the Parties to use the CRTX Trademarks and the XXX Trademarks, on and
in connection with the marketing, sale, advertising and/or Promotion of the
Products in the Territory in the Field during the Term. Subject to the terms and
conditions of this Agreement, each of the Parties grants to the other Party and
its Affiliates a non-transferable right to use its respective trademarks in
connection with the performance of such Party's obligations pursuant to this
Agreement. Each Party expressly reserves the sole and exclusive ownership of its
respective trademarks and all rights relating thereto, including the right to
control the use by the other Party and to establish
38
standards for such use. Use of the trademarks of a Party under this Agreement
shall inure to the benefit of such Party.
8.2 Maintenance. Each Party shall use Commercially Reasonable Efforts to
maintain all registrations of its respective trademarks referenced in Section
8.1 above in the Territory. If necessary to permit the other Party to use its
trademark in connection with the performance of such other Party's obligations
pursuant to this Agreement, a Party shall make application to register the other
Party as a permitted user or registered user of its trademark.
8.3 Enforcement. During the Term, each Party shall promptly notify the other of
any actual, alleged or threatened infringement of such Party's trademark or of
any unfair trade practices, passing off of counterfeit goods, or similar
offenses of which it becomes aware. Each Party reserves the right to determine,
in its sole discretion, whether to and to what extent to institute, prosecute or
defend any actions or proceedings involving or affecting any rights relating to
such Party's trademark in the Territory. Upon a Party's reasonable request, the
other Party shall cooperate with and assist such Party in its enforcement
efforts with respect to its trademark. The Party to whom the trademark belongs
shall be responsible for all costs and expenses incurred by either Party at the
first Party's request in connection with any such action defending its
trademark, and, following each Party's recovery of its respective costs and
expenses, the Parties will share all money damages, if any, recovered in
connection with such action in proportion to the amount of damage actually
suffered by such Party.
ARTICLE 9
CONFIDENTIALITY AND PUBLICITY
9.1 Non-Disclosure and Non-Use Obligations. All Proprietary Information
disclosed by one Party to the other Party hereunder shall be maintained in
confidence and shall not be disclosed to any Third Party or used for any purpose
except as expressly permitted herein without the prior written consent of the
Party that disclosed the Proprietary Information to the other Party during the
Agreement Term and for a period of [**] years thereafter. The foregoing
non-disclosure and non-use obligations shall not apply to the extent that such
Proprietary Information:
39
(a) is known by the receiving Party at the time of its receipt, and not
through a prior disclosure by the disclosing Party, as documented by
the receiving Party's business records;
(b) is or becomes properly in the public domain or knowledge without
breach by either Party;
(c) is subsequently disclosed to a receiving Party by a Third Party who
may lawfully do so and is not under an obligation of confidentiality
to the disclosing Party; or
(d) is developed by the receiving Party independently of Proprietary
Information received from the other Party, as documented by the
receiving Party's research and development records.
9.2 Permitted Disclosure of Proprietary Information. Notwithstanding Section
9.1, a Party receiving Proprietary Information of another Party may disclose
such Proprietary Information:
(a) upon prior written approval of the other Party to governmental or
other regulatory agencies in order to obtain patents pursuant to this
Agreement, or to gain approval to conduct clinical trials or to market
Product, but such disclosure may be only to the extent reasonably
necessary to obtain such patents or authorizations and in accordance
with the terms of this Agreement or as otherwise requested by the FDA;
(b) by either Party to its agents, consultants or Affiliates for the
Promotion of Product or to otherwise enable such Party to fulfill its
obligations and responsibilities under this Agreement, on the
condition that such Third Parties and its Affiliates agree to be bound
by confidentiality obligations at least as restrictive as those in
this Agreement; or if required to be disclosed by law or court order,
provided that notice is promptly delivered to the non-disclosing Party
in order to provide an opportunity to challenge or limit the
disclosure obligations at the expense of the non-disclosing party,,
and the disclosing Party renders reasonable cooperation to the
non-disclosing Party in such effort; and
(c) to the extent required by legal or regulatory process, provided that
prior to any such disclosure the putative disclosing Party shall
inform the other Party and
40
allow such Party a reasonable time to seek at its expense a protective
order or other legal mechanism to avoid such disclosure.
9.3 Disclosure of Agreement. Without limiting any of the foregoing, it is
understood that the Parties or their Affiliates may make disclosure of this
Agreement and the terms hereof in any filings required by the SEC, other
governmental authority, the NASDAQ Global Market, or other securities exchange,
may file this Agreement as an exhibit to any filing with the SEC, other
governmental authority or securities exchange, and may distribute any such
filing in the ordinary course of its business; provided, however, that each
Party shall be given the opportunity to review the redacted version (if any) of
this Agreement prior to filing and provide comments within [**] Business Days.
9.4 Other Public Statements. Except as set forth in this Agreement or as
required by law, including federal and state securities laws or the rules or
regulations of any stock exchange (including the NASDAQ Global Market) or
quotation service on which the disclosing Party's securities are listed or
traded, neither Party shall make any press release or other public announcement
or other disclosure to a Third Party concerning the existence of or terms of
this Agreement or the subject matter hereof without the prior written consent of
the other Party, which consent shall not be unreasonably withheld. Each Party
agrees to provide to the other Party a copy of any public announcement as soon
as reasonably practicable under the circumstances prior to its scheduled
release. Each Party shall have the right to expeditiously (but in any event
within forty-eight (48) hours of receipt) review and recommend changes to any
press release or announcement regarding this Agreement or the subject matter of
this Agreement; provided, however, that such right of review and recommendation
shall only apply for the first time that specific information is to be
disclosed, and shall not apply to the subsequent disclosure of substantially
similar information that has previously been disclosed unless there have been
material developments relating to Product since the date of the previous
disclosure.
9.5 Trading in Securities. XXX acknowledges and agrees that (i) CRTX is a
publicly-held company and (ii) XXX is aware and has advised its employees,
directors, officers and agents involved in the relationship with CRTX that
applicable securities laws prohibit any person who is
41
aware of material, non-public information about a company obtained directly or
indirectly from that company from purchasing or selling securities of such
company or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.
9.6 Xxxxxx Laboratories. Notwithstanding the Confidentiality Agreement between
the Parties or any provision of this Agreement, XXX acknowledges that CRTX has,
with DEY's consent, contacted Xxxxxx Laboratories to discuss the terms of the
transaction contemplated by this Agreement pursuant to Xxxxxx'x rights to
co-commercialize Zileuton XR. Prior to the public announcement of this
Agreement, CRTX represents that it has not identified, and will not identify,
XXX or any of its products, to Abbott. CRTX shall not disclose any XXX
Proprietary Information to Abbott without DEY's prior written consent.
ARTICLE 10
ORDERS AND SUPPLY
10.1 Orders and Terms of Sale. CRTX shall (i) receive, accept and fill orders
for Products; (ii) reject orders for Products based on a negative credit
assessment for a prospective customer (as determined in CRTX's reasonable
discretion); (iii) control invoicing, order processing and collection of
accounts receivable for sales of Products; and, (iv) book all Net Sales and
record all sales of Products in its books of account.
10.2 Mis-directed Orders. Except in the event specifically authorized in writing
to do so by CRTX, (i) XXX will not accept or fill purchase orders for Products
and will not process billing or returns with respect to Products (and in any
event XXX shall have no obligation to do so); and (ii) at no time shall XXX have
any power or authority to accept or reject orders on behalf of CRTX. If, for any
reason, XXX receives orders for Products, XXX shall forward such orders to CRTX
or CRTX Third Party Logistics vendor immediately for acceptance or rejection.
10.3 Product Returns. If any quantities of Products are returned to XXX, XXX
shall notify CRTX in writing within [**] Business Days and promptly ship them to
the facility designated by CRTX, with any shipping or other associated
out-of-pocket costs to be paid by CRTX.
42
10.4 Supply Obligations. Subject to the terms and conditions of this Agreement,
CRTX shall use Commercially Reasonable Efforts to supply or cause to be supplied
all requirements of Finished Products and Samples of Products for use in the
Territory during the Term. CRTX shall use Commercially Reasonable Efforts to
procure sufficient supplies of Finished Products and of Samples of Products to
meet the Forecast requirements at all times during the Term and to distribute
Finished Products and Samples of Products in the Territory such that no material
shortages of Finished Products and/or Samples of Products occur during the Term.
CRTX shall promptly, but in no event later than [**] Business Days after
becoming aware thereof, inform XXX in writing of any material shortages that
occur during the Term and of the steps that CRTX is taking to correct any such
situation.
10.5 Conformity / Specifications / Quality Control. All Finished Product and
Product Samples supplied, distributed and sold by or on behalf of CRTX in the
Territory during the Term shall (i) be manufactured, packaged and labeled in
accordance with cGMPs and with Applicable Laws; (ii) not be adulterated or
misbranded; and (iii) meet and comply with each Product's Specifications
contained in the applicable NDA. CRTX shall conduct, or cause to be conducted,
quality control testing of Product, in accordance with such specifications,
prior to shipment and prepare and retain records pertaining to such testing in
accordance with the NDA, Applicable Laws and CRTX's internal standard operating
procedures. In the event of any failure to comply with this Section 10.5 (other
than a failure due to CRTX's gross negligence or intentional misconduct), CRTX's
sole and exclusive liability under this Agreement, and DEY's sole and exclusive
remedy, shall be that CRTX shall replace the non-conforming Product.
ARTICLE 11
INDEMNIFICATION AND INSURANCE
11.1 Indemnification by CRTX. CRTX will indemnify, defend and hold harmless XXX
and its Affiliates, employees, officers and directors and its successors and
assigns (each, a "XXX Indemnified Party") from and against any Claims and
Losses, in each case that a XXX Indemnified Party may incur, suffer or be
required to pay, arising out of or attributable to a Third
43
Party claim or action based upon (i) the manufacture, testing, storage,
marketing, sale, distribution, use or Promotion of any Product by CRTX in breach
of this Agreement; (ii) CRTX's negligence, gross negligence, recklessness or
willful misconduct in exercising or performing any of its rights or obligations
under this Agreement; (iii) a material breach by CRTX of any of its
representations or warranties under this Agreement; (iv) any failure by CRTX to
Promote the Products substantially in accordance with the FDA-approved labeling,
the Promotional Materials and the contractual provisions provided by CRTX for
distribution to customers, and all Applicable Laws; (v) the content or legal
sufficiency of the NDA for any Product or the Promotional Materials relating to
any Product; or (vi) the manufacture of any Product and/or the Promotion,
authorized use, importation, offer for sale, or sale by CRTX, XXX or any of
their respective Affiliates in the Territory of any Product that is determined
by a court of proper jurisdiction to infringe upon any Third Party's United
States patent rights, copyrights or trademarks; provided, however, CRTX shall
not be obligated under this Section 11.1 to the extent it is shown by evidence
acceptable in a court of law having jurisdiction over the subject matter and
meeting the appropriate degree of proof for such Claim that the Claim arose out
of (A) a material breach by XXX of any of its obligations, representations,
warranties or covenants under this Agreement; (B) negligence, gross negligence,
recklessness or willful misconduct on the part of any XXX Indemnified Party; or,
(C) misuse of the Product not attributable to CRTX.
11.2 Indemnification by XXX. XXX will indemnify, defend and hold harmless CRTX
and its Affiliates, employees, officers and directors, and its successors and
assigns, (each, a "CRTX Indemnified Party") from and against any Claims or
Losses, in each case that a CRTX Indemnified Party may incur, suffer or be
required to pay arising out of or attributable to (i) the Promotion of any
Product by XXX; (ii) DEY'S negligence, gross negligence, recklessness or willful
misconduct in exercising or performing any of its rights or obligations under
this Agreement; (iii) a material breach by XXX of any of its representations or
warranties under this Agreement; or (iv) any failure by XXX to Promote the
Products substantially in accordance with the FDA-approved labeling, the
Promotional Materials and the contractual provisions provided by CRTX for
distribution to customers, and all Applicable Laws; provided, however, that XXX
shall not be obligated under this Section 11.2, to the extent it is shown by
evidence acceptable in a court of law having jurisdiction over the subject
matter and meeting the appropriate degree of proof for such Claim that the Claim
arose out of (A) a failure to warn, a product design, or a
44
manufacturing defect attributable to CRTX (regardless of legal theory,
including, without limitation, product liability, strict liability and/or
negligence); (B) a material breach by CRTX of any of its obligations,
representations, warranties or covenants under this Agreement; (C) negligence,
gross negligence, recklessness or willful misconduct on the part of any CRTX
Indemnified Party; or, (D) misuse of the Product not attributable to XXX.
11.3 Indemnification Procedure. Each Party shall promptly notify the other Party
in writing of any Claim. Concurrently with the provision of notice pursuant to
this section, the Indemnified Party shall provide to the other Party copies of
any complaint, summons, subpoena or other court filings or correspondence
related to such Claim and will give such other information with respect thereto
as the other Party shall reasonably request. The Party obligated to indemnify
the other Party pursuant to this Section 11 (the "Indemnifying Party") and the
party or parties entitled to such indemnification (the "Indemnified Party")
shall meet to discuss how to respond to such Claim. Failure to provide prompt
notice shall not relieve any Party of the duty to defend or indemnify unless
such failure prejudices the defense of any matter. Each Party agrees that it
will take reasonable steps to minimize the burdens of the litigation on
witnesses and on the ongoing business of the Indemnified Party including,
without limitation, making reasonable accommodations to witnesses' schedules
when possible and seeking appropriate protective orders limiting the duration
and/or location of depositions.
11.4 Defense of Claims. Each Party shall undertake the defense of the Claims
that it has obligated itself to defend and indemnify the other Party against in
this Section 11 (provided that if the obligated Party declines or fails to
assume such role thirty (30) days after receiving written notice of such Claim,
then the other Party shall be entitled to assume such role at the obligated
Party's expense). The Indemnified Party shall have the right to participate in
the defense of any such Claim utilizing attorneys of its choice, at its own
expense. The Indemnified Party shall have a reasonable opportunity to
participate in decision-making with respect to the strategy of such defense, and
the Parties shall reasonably cooperate with each other in connection with the
implementation thereof. Each Party shall keep any counsel selected by the other
Party reasonably informed of the status and progress of the defense and shall
consult with any counsel selected by the other Party on all material aspects of
the defense, including, without limitation, settlement, of such Claim.
45
11.5 Settlement of Indemnified Claims. The Indemnifying Party shall have the
sole authority to settle any indemnified Claim without the consent of the other
Party, provided, however, that an Indemnifying Party shall not, without the
written consent of the Indemnified Party, as part of any settlement or
compromise (i) admit to liability on the part of the Indemnified Party; (ii)
agree to an injunction against the Indemnified Party; or (iii) settle any matter
in a manner that separately apportions fault to the Indemnified Party. The
Parties further agree that as part of the settlement of any Indemnified Claim,
an indemnifying party shall obtain a full, complete and unconditional release
from the claimant on behalf of the Indemnified Parties.
11.6 Insurance. Each Party shall obtain and maintain, as of the Detail
Commencement Date and for a period of at least one (1) year after any expiration
of termination of this Agreement, a Commercial General Liability Insurance
policy or policies or extended reporting period under a policy or policies
(including coverage for Contractual Liability, Bodily Injury, Property Damage
and Personal Injury), with minimum limits of per occurrence of at least $10
million and in the aggregate of at least $10 million. Each Party also shall
obtain and maintain, as of the Detail Commencement Date and for a period of at
least one (1) year after any expiration or termination of this Agreement, other
policies of insurance with commercially appropriate limits of coverages that are
usual and ordinary in the day-to-day conduct of its business to meet all of its
obligations hereunder. Upon request each Party shall provide any applicable
Certificates of Insurance to the other Party evidencing the coverage specified
herein. Except as expressly stated herein, a Party's liability to the other is
in no way limited to the extent of the Party's insurance coverage. CRTX shall
obtain and maintain, as of the Detail Commencement Date and for a period of at
least six (6) years after any expiration of termination of this Agreement, a
products liability and clinical trials insurance policy or policies or extended
reporting period under a policy or policies, with minimum limits of per
occurrence of at least $10 million and in the aggregate of at least $10 million.
11.7 Limitation of Liability - Indirect Damages. IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY,
PUNITIVE, MULTIPLE OR OTHER INDIRECT DAMAGES, OR FOR LOSS OF PROFITS, LOSS OF
DATA OR LOSS OF USE DAMAGES, ARISING OUT OF THIS
46
AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE MANUFACTURE, SALE, SUPPLYING OR
FAILURE OR DELAY IN SUPPLYING OF THE PRODUCTS OR SERVICES RELATED THERETO,
WHETHER BASED XXXX XXXXXXXX, XXXXXXXX, XXXX, XXXXXX LIABILITY OR OTHERWISE, EVEN
IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES.
11.8 Limitation of Liability - Aggregate. EACH PARTY'S AGGREGATE LIABILITY
ARISING OUT OF THIS AGREEMENT, INCLUDING THE MANUFACTURE, SALE, SUPPLYING OR
FAILURE OR DELAY IN SUPPLYING OF THE PRODUCTS OR THEIR USE OR DISPOSITION,
WHETHER BASED XXXX XXXXXXXX, XXXXXXXX, XXXX, XXXXXX LIABILITY OR OTHERWISE,
SHALL NOT EXCEED $10,000,000.
ARTICLE 12
TERM AND TERMINATION
12.1 Term and Expiration. This Agreement shall be effective as of the Effective
Date and, unless terminated earlier pursuant to Section 12.2, shall continue for
a period expiring on December 31, 2013 (the " Term "), provided that the Term
may be extended upon mutual agreement by the Parties or this Agreement may be
earlier terminated as further described below in Section 12.2.
12.2 Termination and Effects.
(1) This Agreement may be terminated by either Party by providing the other
Party a minimum of six (6) months prior written notice at any time after the
date that is the third anniversary of the Commercial Launch Date for Zileuton
XR.
(2) If the Commercial Launch Date for Zileuton XR is delayed beyond May 31,
2008, XXX shall have the right, on or before July 1, 2008, to terminate this
Agreement by providing CRTX written notice, which termination shall be effective
sixty (60) days after receipt of such notice. In such event, if XXX has paid to
CRTX the $4 million milestone payment described in Section
47
5.2(a) of this Agreement, CRTX shall make a payment to XXX in the amount of US
$2 million within five (5) Business Days of receipt of DEY's termination notice.
(3) If either Party breaches this Agreement by not fulfilling its Detailing
requirements set forth in this Agreement, in addition to the right to terminate
this Agreement as set forth in Section 12.2(4) below, as liquidated damages and
not as a penalty, the Co-Promotion Fees described in Section 5 shall be adjusted
as mutually agreed to between the Parties.
(4) Either Party may terminate this Agreement prior to expiration of the Term in
the event that the other Party materially breaches or defaults in the
performance of any of its obligations hereunder, and has not cured such breach
within [**] days after notice requesting cure of the breach has been received.
The Parties agree that if either Party meets less than [**] percent ([**]%) of
their Detailing requirements set forth in this Agreement for any three (3) month
period, such failure shall constitute a material breach unless the Parties agree
otherwise in writing.
(5) If any acquirer of XXX markets, manufacturers, sells, details or promotes a
product containing Zileuton for sale in the Territory, CRTX will have the option
to terminate this Agreement upon at least three (3) months prior written notice
to XXX.
(6) XXX has the right to terminate this Agreement if Net Sales of Zileuton XR
for any four consecutive Calendar Quarters after the Commercial Launch Date for
Zileuton XR are below US $25 million; provided, however, that this termination
right must be exercised providing at least two (2) months prior written notice
to CRTX.
(7) The right of either XXX or CRTX to terminate this Agreement as provided in
this Section 12 shall not be affected in any way by such Party's waiver or
failure to take action with respect to any previous breach or default.
(8) Either Party may terminate this Agreement upon the filing or institution of
bankruptcy, reorganization, liquidation or receivership proceedings, or upon an
assignment of a substantial portion of the assets for the benefit of creditors
by the other Party; provided, however, that in the case of any involuntary
bankruptcy, reorganization, liquidation, receivership or assignment
48
proceeding such right to terminate shall only become effective if the Party
consents to the involuntary proceeding or such proceeding is not dismissed
within ninety (90) days after the filing thereof.
12.3 Effect of Expiration or Termination.
(1) Expiration or termination of this Agreement shall not relieve either Party
of any obligation accruing prior to such expiration or termination, including,
without limitation, the obligation to satisfy all accrued payment obligations
arising hereunder. In addition, the Parties shall have the following obligations
upon the expiration or termination of this Agreement: (i) XXX shall promptly
return to CRTX any and all Promotional Materials and Product Samples not
delivered to customers, and XXX shall receive a full refund for all Product
Samples it has paid for and returned; and (ii) each Party shall (and shall cause
its respective agents, employees and subcontractors to) return or destroy, as
the owner may direct, any and all documentation in any medium that contains,
refers to, or relates to the other Party's Proprietary Information.
(2) In addition to any other provisions of this Agreement which by their express
terms continue after the expiration of this Agreement, the provisions of Article
9, Article 11 and this Article 12.3 shall survive the expiration or termination
of this Agreement and shall continue in effect for at least six (6) Years from
the date of expiration or termination. In addition, any other provisions
required to interpret and/or enforce the Parties' rights and obligations under
this Agreement shall also survive, but only to the extent required for the full
observation and performance of this Agreement. Any expiration or early
termination of this Agreement shall be without prejudice to the rights of any
Party against the other accrued or accruing under this Agreement prior to
termination. Except as expressly set forth herein, the rights to terminate as
set forth herein shall be in addition to all other rights and remedies available
under this Agreement, at law, or in equity, or otherwise.
ARTICLE 13
MISCELLANEOUS
49
13.1 Force Majeure. Neither Party shall be held liable or responsible to the
other Party nor be deemed to have defaulted under or breached the Agreement for
failure or delay in fulfilling or performing any term of the Agreement during
the period of time when such failure or delay is caused by or results from
factors beyond the reasonable control of a Party, including, without limitation,
fire, flood, earthquake, explosion, storm, blockage, embargo, war, acts of war
(whether war be declared or not), terrorism, insurrection, riot, civil
commotion, strike, lockout or other labor disturbance, failure of public
utilities or common carriers, act of God or act, omission or delay in acting by
any governmental authority or the other Party. The affected Party shall notify
the other Party of such force majeure circumstances as soon as reasonably
practicable, but in no event later than five (5) days after the commencement of
the Force Majeure circumstances. Either Party may terminate upon thirty (30)
days written notice if a Force Majeure event continues beyond sixty (60) days.
13.2 Assignment. The Agreement may not be assigned or otherwise transferred
without the prior written consent of the other Party; provided, however, either
Party may, subject to the terms and conditions of this Agreement, assign this
Agreement to an Affiliate or in connection with the transfer or sale of its
business or all or substantially all of its assets or in the event of a merger,
consolidation, change in control or similar corporate transaction, without such
consent. This Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the Parties. Any permitted assignee shall
assume in writing all obligations of its assignor under this Agreement. Any
assignment not in accordance with this Agreement shall be void.
13.3 Severability. In the event that any of the provisions contained in this
Agreement are held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, unless the absence
of the invalidated provision(s) adversely affects the substantive rights of the
Parties. In such event, the Parties covenant and agree to renegotiate any such
term, covenant or application thereof in good faith in order to provide a
reasonably acceptable alternative to the term, covenant or condition of this
Agreement or the application thereof that is invalid or unenforceable, it being
the intent of the Parties that the basic purposes of this Agreement are to be
effectuated.
50
13.4 Notices. Notices and communications (including but not limited to notices
of termination, force majeure, material breach, change of address, or any other
notices required by this Agreement) shall be in writing and shall be deemed to
be effective upon receipt or documented refusal to receive, if delivered in
person, if sent by overnight courier service (e.g., FedEx), postage prepaid, or
if sent by prepaid registered or certified air mail, return receipt requested,
to the following persons at the following addresses of the Parties (or to such
other person or persons or address or addresses as may be specified from time to
time in a written notice by either Party):
IF TO XXX: XXX, X.X.
0000 Xxxx Xxxxxx Xxxxxxxxx Xxxxx
Xxxx, XX 00000
Attention: President / Chief Executive Officer
Attention: SVP, Legal Affairs
IF TO CRTX: CRITICAL THERAPEUTICS, INC.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President and Chief Executive Officer
With a required copy to:
CRITICAL THERAPEUTICS, INC.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
13.5 Specific Performance. Each of the Parties acknowledges and agrees that the
other Party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in all material respects or otherwise are
breached. Accordingly, and notwithstanding anything herein to the contrary, each
of the Parties agree that the other Party shall be entitled to seek injunctive
relief to prevent breaches of the provisions of this Agreement, and/or to
enforce
51
specifically this Agreement and the terms and provisions hereof, in any action
instituted in any court or tribunal having jurisdiction over the Parties and the
matter, without posting any bond or other security, and that such injunctive
relief shall be in addition to any other remedies to which such Party may be
entitled, at law or in equity.
13.6 Applicable Law and Dispute Resolution. This Agreement shall be governed by
the laws of the State of New York, without regard to the conflict of laws
provisions thereof. The Parties agree to attempt initially to solve all claims,
disputes, or controversies arising under, out of, or in connection with this
Agreement (a "Dispute") by promptly conducting good faith negotiations. Any
Disputes which cannot be resolved by good faith negotiation within thirty (30)
Business Days, shall be referred, by written notice from either Party to the
other, to the Chief Executive Officers of both Parties. Such Chief Executive
Officers shall negotiate in good faith to achieve a resolution of the Dispute
referred to them within thirty (30) Business Days after such notice is received.
If the Chief Executive Officers are unable to settle the Dispute between them
within thirty (30) Business Days, they shall so report to the Parties in
writing. The Dispute shall then be referred to mediation as set forth in the
following paragraph.
For any such unresolved Dispute between the Parties, either Party shall give the
other written notice to pursue mediation. Within thirty (30) days following the
delivery of such notice, the parties shall participate in good faith in
non-binding mediation at the New York, New York office of J.A.M.S./ENDISPUTE.
Each party agrees to pay its own costs in connection with the mediation, as well
as its share the fees and costs of J.A.M.S./ENDISPUTE in connection with the
mediation. If the dispute is not resolved by mediation, either party may file an
action in any court of competent jurisdiction in the City of New York, State of
New York; provided, however, no party to any such action shall be entitled to
punitive, exemplary, special, indirect, consequential, or similar damages of any
kind, including lost profits and lost business opportunity.
13.7 Entire Agreement. This Agreement, including the exhibits, appendices, and
schedules hereto, contains the entire understanding of the Parties with respect
to the subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made, including any offering
letters or term sheets, are expressly superseded by this
52
Agreement. This Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by all Parties hereto.
13.8 Independent Contractors. It is expressly agreed that the Parties shall be
independent contractors and that the relationship between the Parties shall not
constitute a partnership, joint venture or agency. Neither Party shall have the
authority to make any statements, representations or commitments of any kind, or
to take any action, which shall be binding on the other Party, without the prior
consent of such other Party.
13.9 Waiver. The waiver by a Party hereto of any right hereunder or the failure
to perform or of a breach by another Party shall not be deemed a waiver of any
other right hereunder or of any other breach or failure by said other Party
whether of a similar nature or otherwise.
13.10 Headings / References. The captions to the Articles and Sections hereof
are not a part of the Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof. Any reference in
this Agreement to an Article, Exhibit, Schedule, Appendix or Section shall,
unless otherwise specifically provided, be to an Article, Exhibit, Schedule,
Appendix or Section of this Agreement.
13.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original and all of which, together,
shall constitute one and the same Agreement. This Agreement, once executed by
either Party, may be delivered via electronic facsimile transmission with the
same force and effect as if it were executed and delivered by the Parties in the
presence of one another.
13.12 No Third Party Beneficiaries. Except as specifically set forth herein, no
provision of this Agreement shall be for the benefit of, or be enforceable by,
any Third Party, including without limitation any creditor of either Party
hereto. No such Third Party shall obtain any right under any provision of this
Agreement or shall by reasons of any such provision make any claim in respect of
any debt, liability or obligation (or otherwise) against either Party hereto.
53
13.13 No Benefits. Employees and Sales Representatives of a Party are not
eligible to participate in any benefits programs offered by the other Party to
its employees, or in any pension plans, profit sharing plans, insurance plans or
any other employee benefit plans offered from time to time by it to its
employees. Each Party acknowledges and agrees that the other Party shall not be
responsible for, and shall not maintain or procure, any worker's compensation or
unemployment compensation insurance for or on behalf of the first Party's
employees or Sales Representatives. Each Party shall be solely responsible for
any personal injury or property damage suffered by the Party, its employees, its
Sales Representatives or its agents in the course of carrying out any duties
under this Agreement. Each Party acknowledges and agrees that it shall be solely
responsible for paying all salaries, wages, benefits and other compensation
which its employees, its Sales Representatives or its agent may be entitled to
receive in connection with the performance of the services here under and that
each Party shall likewise be liable for all taxes, excises, assessments and
other charges levied by any government authority on, or because of, the services
to be provided by it under the terms of this Agreement.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
54
SIGNATURE PAGE
IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the
Effective Date, intending to be bound hereby.
XXX, X.X.,
BY XXX, INC., ITS GENERAL PARTNER
BY: /s/ J. Xxxxxxxx Xxxxx
---------------------------------
NAME: J. Xxxxxxxx Xxxxx
TITLE: President / CEO
DATE: March 13, 2007
CRITICAL THERAPEUTICS, INC.
BY: /s/ Xxxxx X. Xxxxxx
---------------------------------
NAME: Xxxxx X. Xxxxxx
TITLE: President and CEO
DATE: March 13, 2007
THE FOLLOWING SCHEDULES ARE ATTACHED HERETO:
SCHEDULE 1.16 CRTX Patents
SCHEDULE 1.17 CRTX Trademarks
SCHEDULE 1.22 XXX Trademarks
55
SCHEDULE 3.1 JCC Membership
SCHEDULE 7.2(i) CRTX Schedule for Royalty Payments for Zileuton IR and
Zileuton XR
SCHEDULE 1.16
CRTX PATENTS
A. ZILEUTON PATENT RIGHTS (LICENSED FROM ABBOTT)
CTI DOCKET NUMBER COUNTRY PATENT NO. TITLE ISSUE DATE EXPIRATION DATE
----------------- ------- ---------- ----- ---------- ---------------
[**] [**] [**] [**] [**] [**]
B. EXTENDED-RELEASE FORMULATION (LICENSED FROM JAGOTEC (SKYEPHARMA)**
COUNTRY PATENT NO. TITLE INVENTOR(S) ISSUE DATE EXPIRATION DATE
------- ---------- ----- ----------- ---------- ---------------
[**] [**] [**] [**] [**] [**]
** CRTX is the exclusive licensee of Jagotec AG for the dosage forms of a
finished product containing Zileuton as the sole therapeutic or
prophylactic active ingredient, in a matrix tablet using the Geomatrix
System.
56
SCHEDULE 1.17
CRTX TRADEMARKS
ZYFLO(R)
ZYFLO XR(TM)
xxx.xxxxx.xxx
xxx.xxxxxxx.xxx
57
SCHEDULE 1.22
XXX TRADEMARKS
XXX
XXX LOGO
58
SCHEDULE 3.1
JCC MEMBERSHIP
XXX designees: [**]
[**]
Primary Contact: [**]
CRTX designees: [**]
[**]
Primary Contact: [**]
59
SCHEDULE 7.2(I)
CRTX SCHEDULE FOR ROYALTY PAYMENTS FOR ZILEUTON IR AND ZILEUTON XR
ROYALTY PAYMENTS DUE ON ZILEUTON XR
ANNUAL NET SALES
$[**] CRTX & ABBOTT** CRTX & JAGOTECH JAGOTECH & ABBOTT TOTAL
---------------- --------------- --------------- ----------------- -----
[**]-[**] [**] [**] [**] [**]
[**]-[**] [**] [**] [**] [**]
[**]-[**] [**] [**] [**] [**]
[**]-[**] [**] [**] [**] [**]
0ver [**] [**] [**] [**] [**]
** For Zileuton IR the royalty payments due are identical to those agreed in
the column titled "CRTX and Abbott" for Zileuton XR
60
