IMPAX LABORATORIES INC
FORM 10-12G/A (Amended Securities Registration (section 12(g)))
Filed 11/12/08
Address 30831 HUNTWOOD AVENUE HAYWARD, CA 94544 Telephone 510-240-6000 CIK 0001003642 Symbol IPXL SIC Code 2834 - Pharmaceutical Preparations Industry Biotechnology & Drugs Sector Healthcare Fiscal Year 12/31
http://www.edgar-online.com © Copyright 2011, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10/A
(Amendment No. 1)
GENERAL FORM FOR REGISTRATION OF SECURITIES Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934 IMPAX LABORATORIES, INC. (Exact name of registrant as specified in its charter)
Delaware 65 -0403311 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
30831 Huntwood Avenue, Hayward, CA 94544 (Address of principal executive offices) Zip Code
Registrant’s telephone number, including area code: (510) 476-2000
Copies to: Michael Joseph, Esquire Blank Rome LLP 600 New Hampshire Avenue, NW Washington, DC 20037 Telephone: (202) 772-5959 Facsimile: (202) 772-5960
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which Title of each class to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value per share (Title of class) Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Accelerated filer Non-accelerated filer Smaller Reporting Company (Do not check if a smaller reporting company)
TABLE OF CONTENTS
Explanatory Note 1 Item 15. Financial Statements and Exhibits. 1
Signatures
Exhibit Index Exhibit 10.13 Exhibit 10.13.1 Exhibit 10.13.2 Exhibit 10.13.3 Exhibit 10.13.4 Exhibit 10.13.5 Exhibit 10.14 Exhibit 10.14.1 Exhibit 10.14.2 Exhibit 10.15 Exhibit 10.15.1 Exhibit 10.15.2 Exhibit 10.16 Exhibit 10.16.1 Exhibit 10.17 Exhibit 10.18 Exhibit 10.19 Exhibit 10.20 Exhibit 10.21
Table of Contents
Explanatory Note
This Amendment No. 1 amends the Registration Statement to file Exhibits 10.13 - 10.21 and to indicate in Item 15. “Financial Statements and Exhibits” that confidential treatment was requested for certain portions of Exhibits 10.13 - 10.21 (excluding Exhibits 10.14.1 and 10.14.2) pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended, which portions were omitted in such exhibits and filed separately with the Commission.
Item 15. Financial Statements and Exhibits. (b) Exhibits
Exhibit No. Description of Document 3.1 Restated Certificate of Incorporation, dated August 30, 2004. +
3.2 By -Laws. +
4.1 Specimen of Common Stock Certificate. +
4.2 Form of Debenture ( incorporated by reference to Exhibit A to the Indenture, dated as of June 27, 2005, between the Company and HSBC Bank USA, National Association, as Trustee, listed on Exhibit 4.3).
4.3 Indenture, dated as of June 27, 2005, between the Company and HSBC Bank USA, National Association, as Trustee. +
4.4 Supplemental Indenture, dated as of July 6, 2005, between the Company and HSBC Bank USA, National Association, as Trustee. +
4.5 Registration Rights Agreement, dated as of June 27, 2005, between the Company and the Initial Purchasers named therein. +
4.6 Promissory Note dated June 7, 2006, issued by the Company to Solvay Pharmaceuticals, Inc. +
10.1 Amended and Restated Loan and Security Agreement, dated as of December 15, 2005, between the Company and Wachovia Bank, National Association. +
10.2 Purchase Agreement, dated June 26, 2005, between the Company and the Purchasers named therein. +
10.3 1995 Stock Incentive Plan.* +
10.4 1999 Equity Incentive Plan.* +
10.5 2001 Non -Qualified Employee Stock Purchase Plan.* +
10.6 Amended and Restated 2002 Equity Incentive Plan (Corrected).* +
10.7 Executive Non -Qualified Deferred Compensation Plan, restated effective January 1, 2005.* +
10.8 Employment Agreement, dated as of December 14, 1999, between the Company and Charles Hsiao, Ph.D.* +
10.9 Employment Agreement, dated as of December 14, 1999, between the Company and Larry Hsu, Ph.D.* +
10.10 Employment Agreement, dated as of September 1, 2006, between the Company and David S. Doll.* +
10.11 Separation Agreement and General Release, dated July 30, 2008, between the Company and David S. Doll.* +
10.12 Consulting Agreement, effective as of September 4, 2008, between the Company and David S. Doll.* +
10.13 Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.1 Letter Amendment, dated October 8, 2003, to Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.2 Letter Agreement, dated March 24, 2005, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.3 Letter Amendment, dated March 24, 2005 and effective January 1, 2005, to Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.4 Amendment, dated January 24, 2006, to Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.5 Amendment, dated February 9, 2007, to Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.14 Development, License and Supply Agreement, dated as of June 18, 2002, between the Company and Wyeth, acting through its Wyeth Consumer Healthcare Division.**
10.14.1 Amendment, dated as of July 9, 2004, to Development, License and Supply Agreement, dated as of June 18, 2002, between the Company and Wyeth, acting through its Wyeth Consumer Healthcare Division.
1 Table of Contents
Exhibit No. Description of Document 10.14.2 Amendment, dated as of February 14, 2005, to Development, License and Supply Agreement, dated as of June 18, 2002, between the Company and Wyeth, acting through its Wyeth Consumer Healthcare Division.
10.15 Licensing, Contract Manufacturing and Supply Agreement, dated as of June 18, 2002, between the Company and Schering Corporation.**
10.15.1 Amendment No. 3, effective as of July 23, 2004, to Licensing, Contract Manufacturing and Supply Agreement, dated as of June 18, 2002, between the Company and Schering Corporation.**
10.15.2 Amendment No. 4, effective as of December 15, 2006, to Licensing, Contract Manufacturing and Supply Agreement, dated as of June 18, 2002, between the Company and Schering Corporation.**
10.16 Supply and Distribution Agreement, dated as of November 3, 2005, between the Company and DAVA Pharmaceuticals, Inc.**
10.16.1 Amendment No. 2, dated February 6, 2007, to Supply and Distribution Agreement, dated November 3, 2005, between the Company and DAVA Pharmaceuticals, Inc.**
10.17 Patent License Agreement, dated as of March 30, 2007, by and among Purdue Pharma L.P., The P.F. Laboratories, Inc., Purdue Pharmaceuticals L.P. and the Company.**
10.18 Supplemental License Agreement, dated as of March 30, 2007, by and among Purdue Pharma L.P., The P.F. Laboratories, Inc., Purdue Pharmaceuticals L.P. and the Company.**
10.19 Sublicense Agreement, effective as of March 30, 2007, between the Company and DAVA Pharmaceuticals, Inc.**
10.20 Promotional Services Agreement, dated as of January 19, 2006, between the Company and Shire US Inc.**
10.21 Co-promotion Agreement, dated as of July 16, 2008, between the Company and Wyeth, acting through its Wyeth Pharmaceuticals Division.**
11.1 Statement re computation of per share earnings (incorporated by reference to Note 17 to the Notes to the Consolidated Financial Statements and Note 10 to (Unaudited) Interim Consolidated Financial Statements included in this registration statement).
21.1 Subsidiaries of the registrant. +
* Management contract, compensatory plan or arrangement.
** Confidential treatment requested for certain portions of this exhibit pursuant to Rule 24b-2 under the Exchange Act, which portions are omitted and filed separately with the SEC.
+ Previously filed.
2 Table of Contents
SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 11, 2008 Impax Laboratories, Inc.
By: /s/ Larry Hsu, Ph.D. Name: Larry Hsu, Ph.D. Title: President and Chief Executive Officer
3 Table of Contents
EXHIBIT INDEX
Exhibit No. Description of Document 3.1 Restated Certificate of Incorporation, dated August 30, 2004. +
3.2 By -Laws. +
4.1 Specimen of Common Stock Certificate. +
4.2 Form of Debenture ( incorporated by reference to Exhibit A to the Indenture, dated as of June 27, 2005, between the Company and HSBC Bank USA, National Association, as Trustee, listed on Exhibit 4.3).
4.3 Indenture, dated as of June 27, 2005, between the Company and HSBC Bank USA, National Association, as Trustee. +
4.4 Supplemental Indenture, dated as of July 6, 2005, between the Company and HSBC Bank USA, National Association, as Trustee. +
4.5 Registration Rights Agreement, dated as of June 27, 2005, between the Company and the Initial Purchasers named therein. +
4.6 Promissory Note dated June 7, 2006, issued by the Company to Solvay Pharmaceuticals, Inc. +
10.1 Amended and Restated Loan and Security Agreement, dated as of December 15, 2005, between the Company and Wachovia Bank, National Association. +
10.2 Purchase Agreement, dated June 26, 2005, between the Company and the Purchasers named therein. +
10.3 1995 Stock Incentive Plan.* +
10.4 1999 Equity Incentive Plan.* +
10.5 2001 Non -Qualified Employee Stock Purchase Plan.* +
10.6 Amended and Restated 2002 Equity Incentive Plan (Corrected).* +
10.7 Executive Non -Qualified Deferred Compensation Plan, restated effective January 1, 2005.* +
10.8 Employment Agreement, dated as of December 14, 1999, between the Company and Charles Hsiao, Ph.D.* +
10.9 Employment Agreement, dated as of December 14, 1999, between the Company and Larry Hsu, Ph.D.* +
10.10 Employment Agreement, dated as of September 1, 2006, between the Company and David S. Doll.* +
10.11 Separation Agreement and General Release, dated July 30, 2008, between the Company and David S. Doll.* +
10.12 Consulting Agreement, effective as of September 4, 2008, between the Company and David S. Doll.* +
10.13 Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.1 Letter Amendment, dated October 8, 2003, to Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.2 Letter Agreement, dated March 24, 2005, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.3 Letter Amendment, dated March 24, 2005 and effective January 1, 2005, to Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.4 Amendment, dated January 24, 2006, to Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.13.5 Amendment, dated February 9, 2007, to Strategic Alliance Agreement, dated June 27, 2001, between the Company and Teva Pharmaceuticals Curacao N.V.**
10.14 Development, License and Supply Agreement, dated as of June 18, 2002, between the Company and Wyeth, acting through its Wyeth Consumer Healthcare Division.**
10.14.1 Amendment, dated as of July 9, 2004, to Development, License and Supply Agreement, dated as of June 18, 2002, between the Company and Wyeth, acting through its Wyeth Consumer Healthcare Division.
Table of Contents
Exhibit No. Description of Document 10.14.2 Amendment, dated as of February 14, 2005, to Development, License and Supply Agreement, dated as of June 18, 2002, between the Company and Wyeth, acting through its Wyeth Consumer Healthcare Division.
10.15 Licensing, Contract Manufacturing and Supply Agreement, dated as of June 18, 2002, between the Company and Schering Corporation.**
10.15.1 Amendment No. 3, effective as of July 23, 2004, to Licensing, Contract Manufacturing and Supply Agreement, dated as of June 18, 2002, between the Company and Schering Corporation.**
10.15.2 Amendment No. 4, effective as of December 15, 2006, to Licensing, Contract Manufacturing and Supply Agreement, dated as of June 18, 2002, between the Company and Schering Corporation.**
10.16 Supply and Distribution Agreement, dated as of November 3, 2005, between the Company and DAVA Pharmaceuticals, Inc.**
10.16.1 Amendment No. 2, dated February 6, 2007, to Supply and Distribution Agreement, dated November 3, 2005, between the Company and DAVA Pharmaceuticals, Inc.**
10.17 Patent License Agreement, dated as of March 30, 2007, by and among Purdue Pharma L.P., The P.F. Laboratories, Inc., Purdue Pharmaceuticals L.P. and the Company.**
10.18 Supplemental License Agreement, dated as of March 30, 2007, by and among Purdue Pharma L.P., The P.F. Laboratories, Inc., Purdue Pharmaceuticals L.P. and the Company.**
10.19 Sublicense Agreement, effective as of March 30, 2007, between the Company and DAVA Pharmaceuticals, Inc.**
10.20 Promotional Services Agreement, dated as of January 19, 2006, between the Company and Shire US Inc.**
10.21 Co-promotion Agreement, dated as of July 16, 2008, between the Company and Wyeth, acting through its Wyeth Pharmaceuticals Division.**
11.1 Statement re computation of per share earnings (incorporated by reference to Note 17 to the Notes to the Consolidated Financial Statements and Note 10 to (Unaudited) Interim Consolidated Financial Statements included in this registration statement).
21.1 Subsidiaries of the registrant. +
* Management contract, compensatory plan or arrangement.
** Confidential treatment requested for certain portions of this exhibit pursuant to Rule 24b-2 under the Exchange Act, which portions are omitted and filed separately with the SEC.
+ Previously filed.
EXHIBIT 10.13 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
STRATEGIC ALLIANCE AGREEMENT between TEVA PHARMACEUTICALS CURACAO N.V. World Trade Center Curacao, Unit T.M.I. 14, Piscadera Bay Curacao, Netherlands Antilles (“ Teva ”) and IMPAX LABORATORIES, INC. a corporation organized under the laws of Delaware, 30831 Huntwood Avenue, Hayward, CA 94544; (“ Impax ”) WHEREAS, Impax is engaged in the development, manufacture, sale, marketing and distribution of pharmaceutical products and has in various stages of development the pharmaceutical products listed in Annex A hereto (collectively the “Products ” as defined further below); WHEREAS, Teva together with its Affiliates (as defined below) is engaged in the development, manufacture, sale, marketing and distribution of pharmaceutical products; WHEREAS, Teva and Impax desire to cooperate in completing the development of the Products and to register, manufacture, market, sell and distribute the Products in the United States and, at Teva’s option, Canada, Israel, Mexico, the European Union, Central America and South America (collectively, as defined further below, the “ Territory ”), all in accordance with the terms and subject to the conditions set forth in this Agreement; and WHEREAS, in connection with the above-referenced cooperative effort and in accordance with the terms and subject to the conditions set forth below, (a) Impax, with the financial support of Teva provided for herein, shall develop, manufacture, and package the Products and seek regulatory approval of the Products for the United States, and (b) Teva, with the technical support of Impax provided for herein, shall market, sell and distribute the Products in the Territory and, to the extent applicable, manufacture and/or seek regulatory approval of the Products for the Optional Territory (as defined below).
NOW THEREFORE, intending to be legally bound hereby and in consideration of the mutual representations, warranties and covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, IT IS HEREBY AGREED BY THE PARTIES AS FOLLOWS: 1 INTERPRETATION AND DEFINITIONS 1.1 The preamble to this Agreement forms an integral part hereof.
1.2 Sections headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the interpretation of this Agreement.
1.3 All annexes to this Agreement, signed by both Parties, whether attached at the time of signature hereof or at any time thereafter, shall be construed as an integral part of this Agreement.
1.4 For the purposes of this Agreement, the following words and phrases shall bear the respective meanings assigned to them below (and cognate expressions shall bear corresponding meanings): 1.4.1 “Affiliates ” — shall mean with respect to any Party, any Person that is controlled by, controls, or is under common control with that Party. For this purpose, “control” of a corporation or other business entity shall mean direct or indirect beneficial ownership of more than fifty percent (50%) of the voting interest in, or more than fifty percent (50%) in the equity of, or the right to appoint more than fifty percent (50%) of the directors or management of such corporation or other business entity.
1.4.2 “ANDA ” — shall mean an Abbreviated New Drug Application filed with the FDA pursuant to its rules and regulations.
1.4.3 “Applicable Law” — shall mean the applicable laws, rules, regulations, guidelines and requirements related to the development, registration, manufacture, importation, Marketing, sale and distribution of the Products in the Territory.
1.4.4 “Approval(s) ” — shall mean any and all approvals, licenses, registrations or authorizations of the applicable Regulatory Authority necessary for the Marketing of the Products and reimbursement, if applicable, in the relevant country of the Territory.
1.4.5 “API” — shall mean the bulk unformulated drug substances used in the manufacture of each of the Products.
2
1.4.6 “Calendar Quarter ” — shall mean a three (3) consecutive month period ending on March 31, June 30, September 30 or December 31.
1.4.7 “Canada ” — shall mean Canada and its territories, districts and possessions.
1.4.8 “cGMP ” — shall mean current good manufacturing practices as required by the rules and regulations of the FDA or such similar requirements of non-U.S. Regulatory Authorities, as applicable to the manufacture, packaging, handling, storage and control of the Products in the Territory.
1.4.9 “Competing Product ” — shall mean on a Product-by-Product basis any finished pharmaceutical product for sale in the prescription drug marketplace that contains the same active ingredients in the same dosage form and strength as the subject Product.
1.4.10 “Confidential Information ” - shall mean all information, data and/or know-how disclosed by either Party to the other Party in writing (or if disclosed orally, visually and/or in another non-written form, identified as confidential at the time of disclosure, and summarized in reasonable detail in writing as to its general content within thirty (30) days after original disclosure) concerning the Products or concerning the technology, marketing strategies or business of the disclosing Party (whether disclosed prior to or subsequent to the Effective Date). Confidential Information shall not include information, data or know -how that the receiving Party can show: (a) was in the public domain at the time of the disclosure by the disclosing Party, or thereafter becomes part of the public domain without any fault of the receiving Party;
(b) rightfully was in its possession prior to the disclosure by the disclosing Party;
(c) was lawfully obtained from a third party, who had the right to make such disclosures as evidenced by written records; or
(d) was developed by it independently of such disclosure as evidenced by written records. 1.4.11 “Cost of Materials ” — shall mean on a Product-by-Product basis the actual direct cost for inactive and active materials required for the manufacture of the particular Product (which
3
for purposes of clarity shall not include handling, inspection or any other indirect charges).
1.4.12 “Designated Share Price ” — shall mean, with respect to the applicable Teva investment or stock payment to Teva pursuant to Section 10, the average closing sale price for the Impax Common Stock measured over the ten (10) trading days ending two (2) days prior to the date on which the Impax Common Stock is acquired by Teva or its Affiliate.
1.4.13 “Effective Date ” — shall mean the date on which this Agreement is signed by the latter of the Parties to sign this Agreement.
1.4.14 “EU ” — shall mean those countries set forth in Annex F.
1.4.15 “FDA” — shall mean the United States Food and Drug Administration and all agencies under its direct control or any successor organization.
1.4.16 “First to File Exclusivity” — shall mean, to the extent applicable, up to six (6) months of marketing exclusivity in the U.S. from the FDA under and pursuant to 21 U.S.C. Section 355(j)(5)(B)(iv) of the Federal Food, Drug and Cosmetic Act, as amended.
1.4.17 “Force Majeure Events” — shall have the meaning set forth in Section 25.1.
1.4.18 “Impax Common Stock ” — shall mean Impax common stock, $0.01 par value.
1.4.19 “IMS Data” — shall mean total prescription data from IMS Health National Prescription Audit Plus , Complete Package — (retail, mail order, LTC, prescriber specialty report).
1.4.20 “Impax Margin” — shall mean on a Product-by-Product basis for each country in the Territory, an amount equal to XXXXX percent ( XXXXX %) of the Profit; provided, however, for the Tier 2 Products in the U.S. such amount shall be equal to XXXXX percent ( XXXXX %) of the Profit.
1.4.21 “Intellectual Rights Legal Expenses ” — shall mean all fees, out of pockets costs and expenses (including, without limitation, all attorneys fees and settlement costs), third party damages, verdicts and/or awards incurred by either Party and/or their respective Affiliates in connection with the defense and/or arising out of a judgment or settlement of an Intellectual Rights Suit.
4
1.4.22 “Intellectual Rights Suit ” — shall mean any litigation instituted by a third party relating to a claim or claims of infringement of patents or other intellectual property rights against Teva and/or an Affiliate of Teva and/or their respective directors and/or officers and/or employees and/or consultants, and/or against Impax or an Affiliate of Impax and/or their respective directors and/or officers and/or employees and/or consultants during or prior to the Term, related to or arising from the filing of Regulatory Documentation for any Product(s) and/or the manufacturing, Marketing, use or offer for sale of any Product(s). An Intellectual Rights Suit shall also include a declaratory judgment action as referenced in Section 17.
1.4.23 “Launch Date ” — shall mean on a Product-by-Product basis the date on which Teva makes its first commercial sale of a particular Product to an unrelated third party in an arms-length transaction in a particular country in the Territory, and Impax has supplied to Teva full launch quantities of such Product for such country pursuant to Teva ’s forecast.
1.4.24 “Manufacturing Costs” — shall mean on a Product-by-Product basis, the total of all actual direct manufacturing (including packaging material) costs allocable to the manufacture of the particular Products for each country in the Territory, as determined in accordance with U.S. GAAP, not to exceed, however, (i) for each Tier 1 Product, the amounts set forth in Annex B, plus the Cost of Materials; and (ii) for each Tier 2 Product and Tier 3 Product, the amounts to be agreed upon by the Parties and added to Annex B promptly following the filing of each ANDA for each Tier 2 Product and Tier 3 Product, plus the Cost of Materials.
1.4.25 “Market” — shall mean to promote, distribute, market, advertise and/or sell.
1.4.26 “Net Sales ” - shall mean, on a Product-by-Product basis, the gross amount invoiced for each of the Products sold by Teva or Teva’s Affiliates on an arms-length basis in each country in the Territory, less the sum of: (a) trade, quantity and/or cash discounts, allowances, rebates, retroactive price adjustments, free goods, bad debts, cash incentive payments (e.g. slotting allowance), and chargebacks; (b) credits or refunds for rejected, outdated or returned Product; (c) any tax, duty or other government charge upon or related to the sale, delivery or use of that Product; (d) cost of short dated Product, which is destroyed by Teva or its Affiliates; (e) three percent (3%) as a contribution towards selling, administrative and other similar expenses of Teva; and (f) other specifically identifiable
5
amounts included in the Product’s gross sales that will have been or ultimately will be credited and are substantially similar to those listed above; in each case determined in accordance with U.S. GAAP.
1.4.27 “Optional Products ” — shall have the meaning set forth in Section 4.1.
1.4.28 “Optional Territory ” — shall mean Canada, Israel, Mexico and each of the countries in the EU, Central America and South America.
1.4.29 “OTC Product(s)” — shall mean the finished pharmaceutical products listed in Annex A for the non-prescription drug marketplace.
1.4.30 “Party”, “Parties” — shall mean Teva and/or Impax, as applicable.
1.4.31 “Person ” — shall mean any individual, partnership, association, corporation, limited liability company, trust, or other legal person or entity.
1.4.32 “Product(s) ” - shall mean the finished pharmaceutical products listed in Annex A for the prescription drug marketplace developed by or for Impax or any of its Affiliates , including the five (5) Tier 1 Products (“ Tier 1 Products ”), the three (3) Tier 2 Products (“ Tier 2 Products ”) the three (3) additional Products to be agreed upon by the Parties (“ Tier 3 Products ”), and subject to Section 4 hereof the Optional Products listed in Annex G .
1.4.33 “Profit” — shall mean, with respect to each Product, calculated separately for each country in the Territory, an amount equal to Net Sales less the applicable Manufacturing Costs.
1.4.34 “Regulatory Authority” — shall mean any and all governmental bodies, organizations and agencies whose approval is necessary to develop, manufacture, import, use, and/or Market the Products in the relevant country of the Territory.
1.4.35 “Regulatory Documentation ” — shall mean all submissions to Regulatory Authorities, including clinical studies, tests, and biostudies relating to the Products, including, without limitation, all ANDAs, 505(b)(2) applications, and DMFs, as well as all correspondence with Regulatory Authorities (registration and licenses, regulatory drug lists, advertising and promotion
6
documents), adverse event files, complaint files, manufacturing records and inspection reports.
1.4.36 “Regulatory Expenses ” — shall mean all costs and expenses in connection with preparing, submitting, obtaining and maintaining Approvals of the subject Products.
1.4.37 “ Revised Impax Margin ” — shall mean, on a Product-by-Product basis, an amount equal to the product obtained by multiplying (a) a fraction, the numerator of which is the subject Product sales in the subject country in the Territory by Teva and its Affiliates, based upon the IMS Data for the three (3) month period immediately preceding the Transaction Event, and the denominator of which is the sum of the numerator plus the applicable Competing Product sales in the subject country in the Territory based upon the IMS Data for the three (3) month period immediately preceding the Transaction Event, by (b) the Impax Margin; provided, however, that if such three (3) month sales data is not available for either the Product or the Competing Product, then the Revised Impax Margin shall be deemed to be XXXXX percent ( XXXXX %) of the Profit unless and until the Parties otherwise agree in good faith, taking into account the principles underlying the above formula and the relative commercial potential of each such Product and Competing Product. For the purposes of calculating the Revised Impax Margin, Net Sales, Manufacturing Costs, and Profit for a Competing Product, shall be calculated in the same manner as Net Sales, Manufacturing Costs, and Profit are calculated for a Product hereunder.
1.4.38 “Specifications ” — shall mean, for a particular Product, the agreed specifications, methods and processes of the Product as contained in the applicable Approval for that Product.
1.4.39 “Supply Term ” — shall mean, on a Product-by-Product basis for each country in the Territory, an initial period of ten (10) years from the Launch Date of that Product in the particular country in the Territory and any extension periods pursuant to Section 21.1, unless terminated prior to such date as expressly provided for in this Agreement.
1.4.40 “Term ” — shall mean the duration of this Agreement starting on the Effective Date and continuing until the end of the last to expire of the Supply Terms, unless terminated prior to such date pursuant to Section 21.
1.4.41 “Territory ” — shall mean the U.S. and, subject to Section 3, the Optional Territory.
7
1.4.42 “Transaction Event ” — shall mean any merger, acquisition, business combination or transaction of any kind pursuant to which Teva or any of its Affiliates acquires or obtains the right to Market Competing Products in any countries in the Territory.
1.4.43 “U.S.” — shall mean the United States of America and its territories, districts and possessions.
1.4.44 “U.S. GAAP ’ — shall mean generally accepted accounting principles in the U.S., consistently applied. 2 GRANT OF RIGHTS 2.1 Impax, for itself and its Affiliates, grants to Teva and its Affiliates in accordance with the terms and conditions of this Agreement, the exclusive right (even as to Impax and its Affiliates), under applicable Approvals and all other existing or future rights owned or controlled by Impax or its Affiliates, to Market the Products in the Territory throughout the respective Supply Terms. The effective date of such grant for (a) each of the Tier 1 Products for the U.S. shall be the date that the Loan is reduced by the Milestone Amount corresponding to the Launch Date Milestone Event for such Product as set forth in Annex C or Annex D , as applicable, or the date the Loan is reduced by fifty percent (50%) of such Milestone Amount pursuant to Section 10.1 (b), as applicable, and (b) for the Tier 2 Products and Tier 3 Products, collectively, for the U.S., on the first Launch Date of any Tier 2 Product or Tier 3 Product in the U.S. and (c) for the Products for the Optional Territory as provided in Section 3.1. Teva accepts the grant of such exclusive Marketing rights from Impax.
2.2 Except as otherwise expressly provided in this Agreement and subject to the provisions of Section 8, Impax and its Affiliates shall, during the period from the Effective Date to the expiration of the Supply Term for each of the Products, (a) manufacture and supply to Teva and its Affiliates all of their requirements for the Products in the Territory, and (b) supply the Products for the Territory exclusively and only to Teva and Teva ’s Affiliates in accordance with the terms of this Agreement.
2.3 Teva and its Affiliates shall, during the period from the Effective Date to the expiration of the Supply Term for each of the Products, obtain all quantities of the Products it requires for Marketing the Products in the Territory from Impax, except as otherwise specifically permitted by the terms of this Agreement.
2.4 Neither Impax nor its Affiliates shall, directly or indirectly, during the period from the Effective Date to the expiration of the Supply Term for each of the Products, Market such Product or cause or permit such Product to be Marketed in or for the subject countries in the Territory,
8
except as otherwise specifically permitted by the terms of this Agreement. 2.5 Neither Impax nor its Affiliates shall, directly or indirectly, during the period from the Effective Date to the expiration of the Supply Term for each of the Products, register, develop, manufacture, supply or Market any Competing Product to such Product for any countries in the Territory, except as otherwise may be specifically permitted by the terms of this Agreement.
2.6 Neither Teva nor its Affiliates shall, directly or indirectly, during the Supply Term for each of the Products, Market any Competing Product to such Product in the subject countries of the Territory in which the applicable Product is Marketed by Teva and/or its Affiliates hereunder, except as otherwise may be specifically permitted by the terms of this Agreement.
2.7 Teva shall within thirty (30) days of the completion of a Transaction Event provide Impax with written notice of same (a “Transaction Event Notice” ). Notwithstanding the provisions of Section 2.6, Teva shall have one (1) year from the date of such Transaction Event to determine, in its sole discretion, whether or not Teva or any of its Affiliates wish to Market in any countries in the Territory the Competing Product and if so with or without the subject Product. From and after the date of written notice to Impax communicating such decision, Teva shall pay Impax the Revised Impax Margin rather than the Impax Margin with respect to the sale of such Competing Product and/or Product in the subject countries in the Territory; provided, however, if final Approval for the subject Product has not been obtained in the given country then neither the Impax Margin nor the Revised Impax Margin shall be payable to Impax, and provided further that if the final Approval for the subject Product has been obtained in the given country and final Approval for the Competing Product has not been obtained, then the Impax Margin (and not the Revised Impax Margin) shall continue to be paid until such Approval for the Competing Product has been obtained.
2.8 In the event Teva or its Affiliate decides to Market in the subject countries in the Territory only the Competing Product pursuant to Section 2.7, then the grant hereunder to Teva pursuant to Section 2.1 to Market such applicable Product for the subject countries of the Territory shall terminate and immediately revert back to Impax. Teva and Impax shall within thirty (30) days of Teva’s decision to Market only the Competing Product make a good faith determination of the financial consideration payable to Teva for such reversion giving due regard to the financial contributions made by Teva hereunder (including, without limitation, the Loan hereunder and forgiveness of portions thereof). If the Parties are unable to agree upon such consideration and terms of payment within such thirty (30) days the dispute shall be resolved by arbitration pursuant to Section 32.
9
2.9 In the event Teva or its Affiliate decides to Market in the U.S. only the Competing Product of an applicable Tier 1 Product pursuant to Section 2.7, then, for purposes of determining whether or not the relevant milestone events for such Tier 1 Product have been met (assuming such milestone events have not already been met on or before the date of the Transaction Event), the respective Loan amount for such milestones will be forgiven if Impax has achieved final Approval (instead of meeting the Launch Date for such milestone) in the U.S. for the subject Tier 1 Product no later than the dates set forth in Annex C or Annex D , as applicable, for the given Launch Date.
2.10 In the event Teva or its Affiliate decides to Market both the Competing Product and the applicable Product pursuant to Section 2.7, Impax shall not be obligated to fill any purchase order for such Product for the subject countries of the Territory in excess of one hundred and thirty percent (130%) of the amount last forecasted for the Calendar Quarter immediately preceding the date Teva or its Affiliates commences Marketing the Competing Product in such countries.
2.11 Except as may otherwise be provided for under the provisions of this Agreement, Teva shall use its commercially reasonable best efforts to Market the Products in and for the Territory in order to maximize Profits.
2.12 Impax and its Affiliates shall not, directly or indirectly, during the Term disclose to any third party any data, know-how or information used or useful to develop, register or manufacture the Products, if such third party may or has the ability to use such data, know -how or information to directly or indirectly Market a Competing Product in or for the Territory.
2.13 Impax shall provide to Teva within thirty (30) days of the Effective Date and, thereafter, as soon as available, all technical information, data and know-how in Impax’s possession or under its control with respect to the Products useful or necessary for Teva or its nominee to set up a facility for the commercial manufacture of the Products (the “Technical Package ”) in accordance with and subject to the provisions of this Agreement. Teva shall maintain the Technical Package subject to the confidentiality restrictions set forth in Section 20.
2.14 Teva and Impax, through the Working Committee referenced in Section 6, below, shall in good faith negotiate and agree upon the Tier 3 Products within ninety (90) days of the Effective Date or such longer period of time as may be necessary and as mutually agreed upon by the Parties (the “Tier 3 Period” ). During the Tier 3 Period or until three (3) Tier 3 Products have been agreed upon whichever shall first occur, neither Impax nor any of its Affiliates shall directly or indirectly grant to any third party the right to Market any product in the Territory without first disclosing that product to Teva and if Teva so desires, then the
10
Parties shall designate that product as a Tier 3 Product subject to the terms of this Agreement. 2.15. Notwithstanding anything contained herein to the contrary, in the event that Impax or any of its Affiliates shall directly or indirectly develop, register, manufacture and/or Market any OTC Products in the Territory the Parties shall in each such case equally share any revenues, royalties or other consideration received, directly or indirectly, by Impax or any of its Affiliates on account of such activity in excess of the first Five Hundred Thousand Dollars ($500,000) received, directly or indirectly, by Impax and its Affiliates for all OTC Products in the aggregate less, to the extent Impax shall manufacture the subject OTC Product(s), documented consideration paid to Impax to cover direct manufacturing costs of such OTC Products.
2.16 If any product containing the same active ingredients in the same dosage form and strength as any of the Products is approved by the FDA for sale by any third party to the non-prescription drug marketplace prior to Impax achieving the Milestone Amount corresponding to the Launch Date Milestone Event set forth in Annex C or Annex D , as applicable, for the corresponding Product or within six (6) months after Impax achieves such milestone, then Teva shall have a credit in an amount equal to fifty percent (50%) of all milestone amounts corresponding to the subject Product to apply against the payment of its share of any Regulatory Expenses and Intellectual Rights Legal Expenses for any of the Products hereunder.
2.17 If any product containing the same active ingredients in the same dosage form and strength as any of the Products is approved by the FDA for sale by any third party to the non-prescription drug marketplace after six (6) months and prior to twelve (12) months following the achievement by Impax of the Milestone Amount corresponding to the Launch Date Milestone Event set forth in Annex C or Annex D , as applicable, for the corresponding Product, then Teva shall have a credit in an amount equal to twenty five percent (25%) of all milestone amounts corresponding to the subject Product to apply against the payment of its share of any Regulatory Expenses and Intellectual Rights Legal Expenses for any of the Products hereunder. 3 OPTIONAL TERRITORY 3.1 Teva shall have the option on a Product-by-Product basis to add any or all of the Optional Territory to this Agreement by delivering a notice in writing to Impax within twelve (12) months following the Effective Date. During such twelve (12) month period neither Impax nor any of its Affiliates shall directly or indirectly negotiate with or grant any rights to any of the Products to any third parties in or for the Optional Territory. In the event that Teva exercises such option, Impax shall have six (6) months following Teva ’s written notification of exercise to choose on a
11
country-by-country basis with respect to the countries selected by Teva to either (a) manufacture and supply Teva’s and its Affiliates’ requirements and grant Teva and its Affiliates the exclusive right to Market the Product(s) designated by Teva in the subject countries, or (b) grant Teva a non-exclusive right to manufacture, register and Market the Product(s) designated by Teva in the subject countries. In the event Impax chooses option (a), above, the Parties shall share equally all future Regulatory Expenses and Intellectual Rights Legal Expenses, attributable to such Product(s) in such countries in the Territory, and Impax shall receive the Impax Margin for the applicable Product(s). In the event Impax chooses option (b), above, Teva and/or its nominee shall have the right at its option to carry out in its discretion and at its cost and expense all future activities to obtain Approvals attributable to such Products in such countries of the Territory and manufacture such Product(s) for such countries in the Territory. In such case, the applicable Approvals shall be in Teva’s name and Teva shall be the sole owner thereof, and Impax shall receive an amount equal to XXXXX percent ( XXXXX %) of Net Sales of the applicable Product(s) in the subject countries (the “Optional Territory Fee” ). Impax shall be deemed to have chosen option (b), above, if Teva fails to receive written notification from Impax within the applicable six (6) month period.
3.2 In the event option 3.1 (a) is exercised by Impax, the terms and conditions of this Agreement respecting the U.S. shall apply to such Products for the subject countries with the following modifications: (in addition and subject to the above provisions in Section 3.1 (a)). 3.2.1 Teva shall prepare each Approval for each of the selected Products and use its commercially reasonable best efforts to file such Approval and to obtain Approval of each of the Products in the subject countries from the Regulatory Authorities as promptly as possible.
3.2.2 Teva shall use its commercially reasonable best efforts to conduct all tests and studies reasonably required to enable Teva to apply for, obtain and maintain Approval for each of the Products in the subject countries.
3.2.3 Impax shall grant Teva reasonable and unrestricted access, without any charges, costs or expense, to any and all relevant documentation, data, information, tests, studies or know-how related to the Products, including without limitation, any Regulatory Documentation, in its possession or under its control, and provide free of charge any and all assistance that Teva may reasonable request in order for Teva to perform its obligations under this Agreement.
3.2.4 Teva shall be primarily responsible for all communications with the Regulatory Authorities in the subject countries relating to the
12
Approval of the Products in the subject countries; provided, however, Teva and Impax shall collaborate in determining the appropriate strategy for obtaining and maintaining Approval of the Products in the subject countries and Teva shall promptly provide to Impax copies of all filings, documents and correspondence directed to such Regulatory Authorities and related to the Products in draft form for comment by Impax and, provided further, that Teva shall in good faith give due regard to reasonable comments, suggestions and input from Impax. Teva shall promptly provide to Impax copies of all documents and correspondence received by Teva from the Regulatory Authorities that are related to obtaining and maintaining Approval of the Products, and Teva shall allow Impax to attend in all meetings with same.
3.2.5 The Approvals shall be filed in Impax’s name and Impax shall be the sole owner of such Approvals and Regulatory Documentation in connection therewith to the extent permitted by Applicable Law and subject to the grant hereunder to Teva. If not permitted the Approvals shall be filed in Teva ’s or its nominee ’s name.
3.2.6 Teva shall assume direction and control of any Intellectual Rights Suit for the Tier 1 Products in the manner provided for the Tier 2 Products and Tier 3 Products as set forth in Section 15.5. Settlement of payments with respect to such expenses shall be effected within thirty (30) days following each Calendar Quarter and payment made to the Party entitled.
3.2.7 Teva shall have the right to appoint a third party on a country-by-country and/or Product-by-Product basis to register and/or Market the Products in the Optional Territory. Teva shall provide written notice to Impax of any such appointment.
3.2.8 The Profit for the applicable Products in the subject countries shall be reduced by Teva’s and/or its nominee’s direct Marketing expenses.
3.2.9 Subject to Section 3.2.6, the provisions of Section 15.5 and 15.6 hereof shall apply to all Teva selected Products in the subject countries.
3.2.10 With respect to any Transaction Events that have occurred prior to such exercise by Impax, Teva shall have the right to issue a Transaction Event Notice within sixty (60) days of Impax ’s exercise of option (a). 3.3 In the event option 3.1 (b) is exercised by Impax, (a) none of the provisions of this Agreement, except Sections 1, 2.15, 3.1, 3.3, 4.1, 9, 11.4, 11.6, 11.8, 12, 13, 14 and 20 — 33 shall apply to Teva and/or Impax or their respective Affiliates for the subject countries; and (b)
13
Impax shall grant Teva reasonable and unrestricted access without charge to any and all relevant documentation, data, information, tests, studies, or know how related to such Products, including without limitation, the Regulatory Documentation, in its possession or under its control, and provide free of charge any and all assistance that Teva may reasonably request in order for Teva to prepare, file, obtain and maintain the Approvals for the subject countries, and to manufacture the Products for the subject countries. 4. OPTIONAL PRODUCT 4.1 Teva shall have the option to add the products listed in Annex G (the “ Optional Products ”) to this Agreement as Tier 1 Products upon issuance of written notice to Impax at any time from the Effective Date until February 1, 2002. In the event of such election, the terms and conditions of this Agreement respecting Tier 1 Products shall apply in the same manner to the Optional Products with the following modifications: (a) Impax shall provide to Teva the Technical Package with respect to the Optional Products within thirty (30) days following receipt of Teva ’s written notice pursuant to this Section 4.1.
(b) Teva shall have six (6) months following the written notification to Impax pursuant to this Section 4.1 to add the Optional Products to any or all of the Optional Territory in accordance with the terms and conditions set forth in Sections 3.1 — 3.3. 4.2 In the event Teva does not exercise the option under Section 4.1 to add the Optional Products to this Agreement, it shall have the right to extend the option period, upon written notice of extension given to Impax prior to February 1, 2002, until ten (10) business days following the last tentative Approval by the FDA for all Optional Products. If Teva extends the option period and subsequently does not exercise this option with respect to the Optional Products in the U.S., and thereafter during the Term, Markets in the U.S. a product containing the same active ingredients in the same dosage form and strength as any of the Optional Products, Teva shall pay to Impax consideration for such extension to be agreed upon by the Parties in good faith.
4.3 In the event that Teva does not add the Optional Products to this Agreement pursuant to Section 4.1 or 4.2, then, the milestones in Annex C shall be amended as provided in Annex D , and Impax shall repay to Teva on January 15, 2004 pursuant to the provisions of Section 10.1 Five Million U.S. Dollars (U.S. $5,000,000) in addition to any other amounts owed to Teva if Impax fails to meet any of the milestones set forth in Annex D .
14
5 REGULATORY APPROVAL 5.1 Impax shall prepare each ANDA for each of the Products and use its commercially reasonable best efforts to file such ANDAs and to obtain Approval of each of the Products in the U.S. from the FDA as promptly as possible.
5.2 Impax shall use its commercially reasonable best efforts to conduct all tests and studies reasonably required to enable Impax to apply for, obtain and maintain Approval for each of the Products in the U.S.
5.3 Impax shall be primarily responsible for all communications with the FDA relating to the Approval of the Products in the U.S.; provided, however, Teva and Impax shall collaborate in determining the appropriate strategy for obtaining and maintaining Approval of the Products in the U.S. and Impax shall promptly provide to Teva copies of all Regulatory Documentation and all other filings, documents and correspondence directed to the FDA and related to the Products in draft form for comment by Teva and, provided further, that Impax shall in good faith give due regard to the reasonable comments, suggestions and input from Teva. Impax shall promptly provide to Teva copies of all Regulatory Documentation and all other documents and correspondence received by Impax from the FDA that are related to obtaining and maintaining Approval of the Products, and Impax shall allow Teva to attend all meetings with the FDA.
5.4 The ANDAs shall be filed in Impax’s name and Impax shall be the sole owner of such Approvals and Regulatory Documentation in connection therewith, subject to Teva ’s rights hereunder.
5.5 Impax shall grant Teva reasonable and unrestricted access, without any charges, costs or expense, to any and all relevant documentation, data, information, tests, studies or know-how related to the Products, including without limitation, the ANDA and/or other Regulatory Documentation, in its possession or under its control, and provide free of charge any and all assistance that Teva may reasonably request in order for Teva to perform its obligations under this Agreement.
5.6 Teva or its Affiliates shall be responsible for filing each of the Products, and thereafter processing such filings with appropriate federal, state or private formularies in the Territory.
5.7 Each Party shall perform, or cause to be performed, its activities in furtherance of the provisions of this Section 5 in a good scientific manner, in compliance in all material respects with all requirements of Applicable Law, and in an efficient and expeditious manner.
15
5.8 Impax and Teva shall share equally all reasonable out-of-pocket Regulatory Expenses incurred by either Party and/or their respective Affiliates, after the Effective Date for the Territory; provided, however, Impax shall bear all Regulatory Expenses for Tier 1 Products for the U.S. and fifty-five percent (55%) of Regulatory Expenses for Tier 2 Products for the U.S. Settlement of payments with respect to Regulatory Expenses shall be effected within thirty (30) days following the end of each month and payment made to the Party entitled.
5.9 Teva shall pay to Impax Three Hundred Thousand U.S. Dollars (U.S. $300,000) within thirty (30) days following the Effective Date for regulatory expenses incurred by Impax prior to the Effective Date for development of the Tier 2 Products. 6 WORKING COMMITTEE Within thirty (30) days of the Effective Date, each of Teva and Impax shall appoint three (3) appropriately qualified representatives to a working committee to coordinate the selection and identification of the Tier 3 Products, to facilitate the exchange of information relating to the development of the Products, to monitor the costs and activities related to the development and manufacture of the Products, and to oversee the renovation and construction of the new Impax manufacturing facilities in Hayward, California (the “Working Committee”) . In each instance such activities shall not extend beyond the scope of this Agreement relating to the Products in the Territory. 7 SUPPLY 7.1 Subject to Teva’s compliance with Section 8, Impax shall use its commercially reasonable best efforts to supply on a timely basis all of Teva ’s and its Affiliates ’ requirements for the Products for the Territory.
7.2 Without limiting the provisions of Section 8.2, Impax shall use its commercially reasonable best efforts to ensure that it has an adequate supply of API and other ingredients required for the manufacture of the Products in order to meet at least one hundred and twenty percent (120%) of Teva’s and its Affiliates’ forecasted requirements for the Products for the Territory. In furtherance of the foregoing obligation, Impax hereby acknowledges that Teva (including its Affiliates) is and shall remain throughout the Supply Term a preferred customer and as such shall have priority over all other parties (including Impax and its Affiliates) with regard to the supply of API and Products.
7.3 Without limiting any of its obligations under this Agreement, in the event that for any reason Impax may have an insufficient supply of API and other required ingredients to meet its obligations under Section 7.1, Impax shall use its commercially reasonable best efforts to obtain a third party source for such API and other required ingredients in consultation with Teva through the Working Committee.
16
7.4 Impax shall supply the Products to Teva and its Affiliates in finished final dosage form and fully packaged.
7.5 Subject to the provisions of Section 8, Teva, its Affiliates and/or a third party reasonably acceptable to both Parties shall have the right, at Teva’s sole option, to manufacture any of the Products in the event of the inability of Impax to meet Teva’s and/or its Affiliates’ requirements for such Products for any reason including, but not limited to, force majeure, provided, however, that Impax shall have failed to cure such inability within sixty (60) days of written notice from Teva. In the event Teva and/or its Affiliate and/or such third party, as applicable, shall elect to manufacture any of the Products: (a) Impax agrees that upon receipt of the above-referenced notice and expiration of the sixty (60) day cure period, to the extent not otherwise contained in the Technical Package, it shall promptly furnish free of charge all technical information, data and know-how, including without limitation, any Regulatory Documentation, and provide such cooperation (including the reasonable availability of Impax personnel) as reasonably required to enable Teva, its Affiliate and/or such third party, as applicable, to effectively manufacture and supply Teva’s and its Affiliates’ requirements of the Products for the applicable countries of the Territory; (b) the Impax Margin or Revised Impax Margin (as the case may be) for such Products shall be reduced by fifty percent (50%) (in half); and (c) Teva shall receive a credit against any payments thereafter due or outstanding to Impax under this Agreement for any and all reasonable out-of-pocket costs incurred by Teva and/or its Affiliates, and/or paid by Teva to Impax, in connection with or resulting from the foregoing manufacturing activities and/or transfer (including, without limitation, for any required tests or studies and for any expenses incurred by Teva and/or its Affiliates pursuant to Section 7.10 in connection with the applicable Products).
7.6 Impax shall use its commercially reasonable best efforts in accordance with its standard manufacturing practices to reduce its Manufacturing Costs of each of the Products throughout the respective Supply Term in order to maximize Profit. In the event that any of Impax’s Manufacturing Costs excluding Cost of Materials for any of the Products equal or exceed seventy-five percent (75%) of the amounts set forth in Annex B , the Parties shall negotiate on a Product-by-Product basis in good faith a way to reduce such Manufacturing Costs, including, without limitation, by transferring the manufacture of the Products to Teva, its Affiliates and/or a third party, and the sharing of costs associated with such transfer.
7.7 If Teva believes that all or any part of any lot of Product it obtains from Impax has not been manufactured in accordance with the requirements of this Agreement, including, without limitation, with the Specifications, Impax’s representations and warranties hereunder or any other defect in the Product, or that there is a shortage of Product, then Teva will promptly notify Impax in writing setting forth in reasonable detail the
17
alleged nonconformity, defect or shortage. Subject to the provisions of Section 7.9, Teva agrees to notify Impax of any nonconformity, defect or shortage of any shipment of Product that Teva discovers by its standard receiving procedures within thirty (30) days after Teva’s receipt of the Product from Impax. Upon receipt of such notification of nonconformance, defect or shortage, Impax will have fifteen (15) days to inspect the affected Product and make a reasonable assessment of the alleged nonconformance, defect or shortage. If the Parties agree that there is a nonconformance, defect or shortage, Impax, at its sole cost and expense, shall promptly replace any nonconforming or defective Product or make up the shortage, to be shipped at Impax’s cost. Nonconforming or defective Product will be returned to Impax at its expense.
7.8 Any dispute between the Parties concerning the rejection of all or any part of a shipment of Product (including, without limitation, any Latent Defects) which the parties are unable to resolve within a sixty (60) day period will be submitted to an agreed upon qualified independent laboratory for testing using test methods set forth in the Approval for the Product and/or any other mutually agreed upon test methods. Impax will use its best efforts to replace promptly any shipment or portion of a shipment under dispute until the dispute is resolved. The replacement Product and the cost of the laboratory will be at Impax’s cost if the laboratory finds that the lot in question is non-conforming to Specifications or otherwise defective. The costs of the independent laboratory will be paid by Teva if the lot in question is found by the laboratory to be conforming and compliant. The findings of the laboratory shall be final and binding upon the Parties, and shall not be subject to appeal or review by any third party.
7.9 The Parties acknowledge that it is possible for Product to have manufacturing defects that are not discoverable upon reasonable physical inspection or testing (referred to as “Latent Defect” or “Latent Defects” ). Latent Defects may include, by way of illustration and not definition or limitation, defects not present in preshipment samples, loss of stability, separation, discoloration or other manufacturing defects. Impax is responsible for all Latent Defects that are attributable to the production of the Product by or on behalf of Impax or failure of such Product to otherwise comply with the provisions of this Agreement (including without limitation, Impax’s representations and warranties hereunder). As soon as Impax discovers or becomes aware of a Latent Defect in any Product it produced and shipped, it will immediately notify Teva of the lot(s) involved and Impax will replace that Product in the manner described in Sections 7.7 and 7.8, above.
7.10 In order to ensure continuous supply of the Products and to maximize sales and profits, commencing six (6) months following the Effective Date, at Teva’s option, on a Product-by-Product and country-by-country basis, the Parties shall use their commercially reasonable best efforts
18
to supplement for each of the Products the ANDAs submitted with the FDA as of the Effective Date, as well as any Approvals (including ANDAs) to be submitted with the FDA or any non-U.S. Regulatory Authority thereafter in order to permit Teva and/or its Affiliate or a third party reasonably acceptable to both Parties, to manufacture and/or package the Products for the Territory. Subject to Impax providing an estimate of anticipated expenses, and except as otherwise provided in Section 7.5 and 7.6, above Teva shall pay all expenses associated with the foregoing, such expenses consisting of pre-approved reasonable out-of-pocket expenses of Impax, supply of API at cost to Impax, and a per diem charge of One Thousand U.S. Dollars (U.S. $1,000) for each employee of Impax, assisting at Teva ’s request, with supplementing the ANDAs. 8 FORECASTS AND ORDERS 8.1 Within one hundred and eighty (180) days prior to the anticipated Launch Date for each of the Products for each country in the Territory, Teva shall provide to Impax a nonbinding written forecast of estimated quantities of Product that Teva and its Affiliates anticipate ordering from Impax during the twelve (12) month period commencing with the Launch Date for such country. Teva shall update such forecast on a Calendar Quarter rolling basis, for the twelve (12) month period commencing ninety (90) days from each such update. Teva shall communicate any changes to its forecast as soon as the changes are known by Teva. Teva shall use its commercially reasonable best efforts to ensure the accuracy of its forecasts. The first quarter of each such updated forecast shall be deemed a firm purchase order.
8.2 Each firm purchase order shall set forth the quantities of Products ordered, dates for delivery of the Products, the country for which the Products are designated, the place of delivery and reasonable instructions for shipping. Impax shall supply to Teva and its Affiliates’ the quantity of Products on the delivery dates and at the delivery destination stated therein; provided, however, Impax shall not be obligated but shall be required to use its commercially reasonable best efforts to fill any purchase order to the extent of quantities exceeding one hundred and twenty percent (120%) of the amount last forecasted for the applicable Calendar Quarter except as otherwise provided in Section 2.10.
8.3 Any terms and conditions of an invoice, acknowledgement or similar document provided by Impax for Products, or, any terms and conditions of purchase orders provided by Teva for Products, which are inconsistent with or in addition to the terms of this Agreement shall be null and void.
19
9 TRADEMARK(S)
Teva and its Affiliates shall have the right, in their respective sole discretion and at their expense, to select and to register any of their trademarks, as they wish to employ in connection with the Marketing of any of the Products in any of the countries in the Territory and to Market Product using such trademarks. Teva or its Affiliate shall own all right, title and interest in and to all such trademarks, and Impax hereby agrees it shall have no right, title or interest in same.
10 CONSIDERATION AND LOAN 10.1 Teva shall, within five (5) business days of the Effective Date, loan to Impax the sum of Twenty Two Million U.S. Dollars (U.S. $22,000,000) (the “ Loan ”) towards the development of the Products and the establishment of the production facilities and infrastructure necessary to meet Teva’s and/or its Affiliates’ Product requirements hereunder. Impax hereby undertakes and agrees that it shall expend not less than Twenty Two Million U.S. Dollars (U.S. $22,000,000) towards the construction of the production facilities located in Hayward California, including the facility located on San Antonio Street (the “New Facility” ) and the development of the Products. The Loan shall be evidenced by Impax’s promissory note in the form annexed hereto at Annex H (the “Note” ). Without limiting any other rights and remedies available to Teva under this Agreement, the Note, at law or in equity, from and after the occurrence of an Event of Default as defined in Section 10.7 Teva shall have the right to declare the Loan immediately due and payable by delivering written notice to such effect to Impax. Impax shall repay the then outstanding balance of the Loan to Teva, in cash, within thirty (30) days of its receipt of such notice. In the event Impax achieves the milestones set forth in Annex C or Annex D , as applicable, on a timely basis, then the outstanding balance of the Loan shall be reduced by the corresponding amounts designated for each such achieved milestone (each such amount is referred to herein as the “ Milestone Amount ”). If, on the other hand, Impax fails to meet any of the milestones set forth in Annex C or Annex D, as applicable, by the respective dates set forth for each such milestone (including as a result of an early termination of this Agreement), then Teva shall have the option, on a Product-by- Product basis with respect to the applicable milestone, to either: (a) require Impax to repay to Teva that portion of the Loan equal to the applicable Milestone Amount; or
(b) require Impax to repay to Teva that portion of the Loan equal to fifty percent (50%) of the applicable Milestone Amount. Repayment by Impax of the amounts under subparagraphs (a) and (b), above, and Section 4.3, if applicable, shall be made to Teva not later
20
than January 15, 2004, and shall be paid, at the option of Impax, in cash or (subject to Section 10.5) in Impax Common Stock at the Designated Share Price.
10.2 In the event Teva chooses option 10.1(a), above, then the grant to Teva with respect to the Marketing of the subject Product for the U.S. shall be deemed nonexclusive and effective as of such exercise, and the provisions of Sections 2.3 - 2.11 and such other provisions of this Agreement respecting Competing Products of the subject Products shall no longer apply to Teva and/or Impax or their respective Affiliates with respect to such Products for the U.S.; provided, however, in any event, Impax shall remain obligated to supply Teva ’s and/or its Affiliates ’ requirements of the applicable Product on a most -favored basis.
10.3 Subject to the provisions of the Stock Purchase Agreement, being executed by the Parties concurrently herewith, and Section 10.5, Teva shall, on each of September 15, 2001, December 15, 2001, March 15, 2002 and June 15, 2002, purchase from Impax such number of shares of Impax Common Stock at the Designated Share Price as equals Three Million Seven Hundred and Fifty Thousand U.S. Dollars (U.S. $3,750,000).
10.4 Upon the first Launch Date of any Tier 2 or Tier 3 Product in the U.S., Teva shall sell back to Impax for an aggregate purchase price of One U.S. Dollar (U.S. $1.00) such number of shares of Impax Common Stock that equals sixteen and two thirds percent (16 2/3%) of the aggregate shares of Impax Common Stock purchased by Teva from Impax pursuant to Section 10.3.
10.5 Notwithstanding anything contained in Sections 10.1 or 10.3 to the contrary, in no event shall Teva be obligated to purchase (or accept as repayment of the Loan pursuant to Section 10.1) such number of shares of Impax Common Stock that at the time of transfer to Teva or its Affiliate would, in the aggregate, exceed nineteen point nine percent (19.9%) of the then issued and outstanding shares of Impax Common Stock. If any such transfer would result in Teva and its Affiliates owning more than nineteen point nine percent (19.9%) of the outstanding Impax Common Stock then, at Teva’s request, such excess amounts shall be paid by Impax to Teva in cash.
10.6 Throughout the period that the Loan, or any portion thereof, is outstanding, Impax hereby covenants and agrees it will not, nor will it permit any of its Affiliates to: (a) Liquidate, windup or dissolve.
(b) Assume, endorse, be or become liable for or guarantee any indebtedness of any Person excluding however, the
21
endorsement of negotiable instruments for deposit or collection in the ordinary course of business.
(c) Declare or pay any dividends on its capital stock (other than dividends payable solely in shares of Impax Common Stock), or purchase, redeem, retire or otherwise acquire any of its capital stock at any time outstanding except as provided in Section 10.4, except any Affiliate wholly owned by Impax may declare and pay dividends to Impax.
(d) Materially alter the nature of its business.
(e) Directly or indirectly purchase, acquire or lease any property from, or sell, transfer or lease any property to, or enter into any other transaction, with any Affiliate of Impax or any party related to the management of Impax except the assignment of Impax’s right to purchase the New Facility to Affiliates (subject to Teva’s rights pursuant to Section 10.11) at prices and on terms not less favorable to it than those which would have been obtained in an arm’s- length transaction with a non -affiliated third party. 10.7 Subject to any applicable grace, notice and cure period provided for herein the occurrence and the continuance of any of the following events is referred to herein as an “ Event of Default ”: (a) If Impax shall fail to pay, when due, any portion of the Loan or interest thereon; or
(b) Any representation or warranty made by Impax herein or in the Stock Purchase Agreement or Registration Rights Agreement shall prove to have been false in any material respect on or as of the date made; or
(c) This Agreement or the Stock Purchase Agreement or the Registration Rights Agreement is terminated by Teva as a result of a breach, default, misrepresentation or other act or omission by Impax giving rise to the right of termination by Teva hereunder or thereunder, respectively. 10.8 The purchase of Impax Common Stock by Teva or the repayment of all or a portion of the Loan by Impax in shares of Impax Common Stock pursuant to this Section 10 shall be conditioned upon the execution by the Parties of a Stock Purchase Agreement and Registration Rights Agreement in the form attached as Annex E.
10.9 The Loan shall bear interest at the annual rate of eight percent (8%) accruing from the date of grant (the “ Interest Obligation ”). The Interest Obligation shall be due and payable on January 15, 2004 or such earlier date that the outstanding balance of the Loan is due (without right of set -off, deduction or other withholding), to the extent
22
there remains any outstanding balance on the Loan pursuant to this Section 10, and only with respect to such portion of the Loan that had not been forgiven as of such date. Notwithstanding the foregoing, Teva agrees to forgive the Interest Obligation in the event and upon the date that Impax has obtained tentative or final Approvals for any three of the Products.
10.10 By no later than December 31, 2001, as additional security for the repayment of the Loan, Impax shall grant to Teva a mortgage on the New Facility subordinate to a senior lien of up to Three Million U.S. Dollars ($3,000,000) in form and substance reasonably satisfactory to Teva, or such other collateral as may be reasonably satisfactory to Teva. 11 PRICES, TERMS, CONDITIONS, TITLE AND RISK 11.1 Impax shall deliver each order of Products to Teva and its Affiliates CIP (as per Incoterms 2000) to a location to be designated by Teva or its Affiliates.
11.2 Impax will invoice Teva when Product is shipped to Teva at an amount equal to the applicable Manufacturing Cost. Teva shall subject to Sections 7.7, 7.8 and 7.9 pay for such Product thirty (30) days from the date of receipt of the applicable shipment.
11.3 Within thirty (30) days following each Calendar Quarter during the Supply Term, Teva shall compute and report to Impax in a mutually acceptable format the Net Sales and Profit for each Product in each country in the Territory during that Calendar Quarter and Teva shall pay to Impax the Impax Margin, Revised Impax Margin, or Optional Territory Fee, as the case may be, for each Product for that Calendar Quarter as reflected in the report. In addition, within seven (7) business days after the end of each month, Teva shall provide to Impax information (which could be good faith estimates if final data is not available) as to the amount of Net Sales, Profit, and number of units sold of each Product during that month.
11.4 Teva shall have the sole and exclusive right to determine all terms and conditions of sale of the Products to its customers.
11.5 Subject to Teva having received full launch quantities of the applicable Product based upon Teva’s forecast, Teva shall launch each Product on a country-by-country basis within fifteen (15) days of final Approval of each Product; provided, however, that if either Party has a written opinion of patent counsel reasonably acceptable to the other Party that launch would result in a significant risk of damages for infringement of third party intellectual property rights, then the Parties shall agree upon a later launch for such Product in the subject country in the Territory or, alternatively, Teva may compel launch of the Product in such country in
23
the Territory. If Teva so compels a launch of a Product in any country in the Territory, then it shall indemnify, defend and hold harmless Impax for any damages and expenses of an Intellectual Rights Suit to the extent directly related to the patents set forth in the above-referenced Impax patent opinion and to the extent caused by the launch of the Product and not attributable in whole or in part to any untrue representation or warranty of Impax or breach of a covenant made by Impax hereunder. Further, in such case, (a) during the period commencing with the applicable Launch Date and ending on the earlier of six (6) months or the date the Parties receive a final non-appealable court decision with respect to the applicable Intellectual Rights Suit, if any, the Impax Margin shall be deemed to be XXXXX percent ( XXXXX %) and Revised Impax Margin, if applicable, shall be reduced by thirty percent (30%) and (b) any expenses and/or damages paid by Teva in connection with any Intellectual Rights Suit related to the applicable Product, or the above indemnity, shall be set-off, credited or reimbursed against any amounts paid or payable to Impax hereunder related to such Product (including, without limitation, Impax Margin, Revised Impax Margin, and Optional Territory Fee).
11.6 Teva and its Affiliates shall permit an independent certified public accounting firm selected by Impax, and reasonably acceptable to Teva, to have access, during normal business hours and upon reasonable prior notice (not more often than once in any calendar year), to those books and records maintained by Teva necessary for Impax to verify the accuracy of Teva’s calculation of any Net Sales, Profit, Regulatory Expenses, Impax Margin, Revised Impax Margin and/or Optional Territory Fee hereunder for any period ending not more than five (5) years prior to the date of such request. All such information shall be retained on a confidential basis by the accounting firm, and such accounting firm’s use of such information shall be limited to the aforementioned verification.
11.7 Impax and its Affiliates shall permit an independent certified public accounting firm selected by Teva, and reasonably acceptable to Impax, to have access, during normal business hours and upon reasonable prior notice (not more often than once in any calendar year), to those books and records maintained by Impax necessary for Teva to verify the accuracy of Impax’s calculation of any Manufacturing Costs, Regulatory Expenses and/or Intellectual Rights Legal Expenses hereunder for any period ending not more than five (5) years prior to the date of such request. All such information shall be retained on a confidential basis by the accounting firm, and such accounting firm’s use of such information shall be limited to the aforementioned verification.
11.8 Teva and Impax shall calculate and record Net Sales, Manufacturing Costs, Profit, Impax Margin, Revised Impax Margin, Optional Territory Fee, Regulatory Expenses and/or Intellectual Rights Legal Expenses in
24
accordance with U.S. GAAP, and shall maintain all books and records related thereto in accordance with standard cost accounting policies and practices, in accordance with U.S. GAAP for the Term plus an additional three (3) years thereafter. 12 ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF IMPAX 12.1 Impax hereby represents and/or warrants and/or undertakes to Teva that: 12.1.1 it has the corporate authority to enter into this Agreement and to perform its obligations hereunder;
12.1.2 neither the execution and delivery of this Agreement by Impax nor its performance hereunder conflicts with or results in any violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under any of the terms or conditions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which it or any of its Affiliates is a party or by which it or any of its Affiliates or any of their respective properties or assets may be bound, or to its best knowledge, violate any statute, law, rule, regulation, writ, injunction, judgment, order or decree of any court, administrative agency or governmental authority binding on it or any of its Affiliates or any of their respective properties or assets, excluding any such breaches or defaults that, individually and in the aggregate, would not have a material adverse effect on its business or financial condition;
12.1.3 this Agreement is a legal, valid and binding agreement of Impax enforceable in accordance with its terms;
12.1.4 neither it nor any of its Affiliates have or will, directly or indirectly, enter into any contract or any other transaction with any third party or Affiliate that conflicts or derogates from its undertakings hereunder;
12.1.5 all Products supplied to Teva or its Affiliates shall: (a) meet the applicable Specifications at the time of shipment; (b) meet regulatory requirements of any relevant Regulatory Authority in the Territory; (c) be manufactured, packaged, tested, stored and shipped in accordance with applicable cGMPs, the Approvals, and Applicable Law; (d) not be adulterated or misbranded under the United States Food, Drug and Cosmetic Act including any other relevant laws and regulations of the Territory as amended from time to time; and (e) be produced, packaged, tested and stored in facilities that have been approved by the applicable Regulatory Authority, to the extent required by Applicable Law;
25
12.1.6 the API does not violate, infringe, or otherwise conflict or interfere with the intellectual property of any third party in the U.S. and, to Impax’s best knowledge, the API does not violate, infringe, or otherwise conflict or interfere with the intellectual property of any third party in any other country of the Territory;
12.1.7 Impax has furnished Teva with access to a complete copy of the U.S. Regulatory Documentation for the Products, including all material amendments and supplements thereto; Impax is and was, at all times prior to the Effective Date, the lawful holder of all rights under the Regulatory Documentation and to the best of Impax’s knowledge, Impax has complied in all material respects with all Applicable Laws and regulations in connection with the preparation and submission to the FDA of the Regulatory Documentation;
12.1.8 neither it nor any of its Affiliates have been debarred or is subject to debarment and will not use in any capacity, in connection with the services to be performed under this Agreement, any Person who has been debarred pursuant to Section 306 of the United States Food, Drug and Cosmetic Act or equivalent laws of any country in the Optional Territory selected hereunder;
12.1.9 Impax’s manufacturing facilities conform, and shall continue to conform throughout the Term, in all respects to Applicable Law governing such facilities; and
12.1.10 all Products supplied hereunder shall be free and clear of all security interests, liens, or other encumbrances of any kind or character. 13 ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF TEVA 13.1 Teva hereby represents and/or warrants and/or undertakes to Impax that: 13.1.1 it has the corporate authority to enter into this Agreement and to perform its obligations hereunder;
13.1.2 neither the execution and delivery of this Agreement by Teva nor its performance hereunder conflicts with or results in any violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under any of the terms or conditions of any note, bond, mortgage, indenture, license, agreement or other instrument or obligation to which it is a party or by which it or any of its properties or assets may be bound, or to its best knowledge, violate any statute, law, rule,
26
regulation, writ, injunction, judgment, order or decree of any court, administrative agency or governmental authority binding on it or any of its properties or assets, excluding any such breaches or defaults that, individually and in the aggregate, would not have a material adverse effect on its business or financial condition;
13.1.3 this Agreement is a legal, valid and binding agreement of Teva, enforceable in accordance with its terms;
13.1.4 it has not and will not, directly or indirectly, enter into any contract or any other transaction with any third party or Affiliate (excluding those, if any, respecting, the Optional Territory or Optional Products) that conflicts or derogates from its undertakings hereunder;
13.1.5 in the event and to the extent that Teva and/or its Affiliates shall manufacture the Products, all such Products shall: (a) meet the applicable Specifications at the time of shipment; (b) meet regulatory requirements of any relevant Regulatory Authority in the Territory; (c) be manufactured, packaged, tested, stored and shipped in accordance with applicable cGMPs, the Approvals, and Applicable Law; (d) not be adulterated or misbranded under the United States Food, Drug and Cosmetic Act or relevant laws and regulations of Canada, as amended from time to time; and (e) be produced, packaged, tested and stored in facilities that have been approved by the applicable Regulatory Authority, to the extent required by Applicable Law;
13.1.6 in the event and to the extent that Teva and/or its Affiliates shall manufacture the Products, Teva’s and/or its Affiliates’ manufacturing facilities for such Products shall conform in all respects to Applicable Law governing such facilities;
13.1.7 neither it nor any of its Affiliates have been debarred or is subject to debarment and will not use in any capacity, in connection with the services to be performed under this Agreement, any Person who has been debarred pursuant to Section 306 of the United States Food, Drug and Cosmetic Act or equivalent laws of any country in the Optional Territory selected hereunder, or who is the subject of a conviction described in such section; and
13.1.8 all Products that it shall Market hereunder shall have been Marketed and stored in accordance with Applicable Law. 14 INDEMNIFICATIONS AND LIABILITY 14.1 Except as otherwise expressly provided in Section 15, Impax shall indemnify, defend and hold Teva, its Affiliates, and their respective
27
officers, directors, employees, and representatives harmless from and against any and all losses, liabilities, damages, costs and expenses, including reasonable attorney’s fees and disbursements, (collectively, “Damages” ) in connection with any and all suits, investigations, claims or demands by third parties resulting from or arising out of: (a) any breach or alleged breach by Impax (or its Affiliates) of any representation, warranty, undertaking or covenant hereunder; (b) events occurring prior to the Effective Date and relating to the Products; (c) any negligence or willful misconduct by Impax (or its Affiliates); or (d) a defect contained in a Product manufactured by Impax, its Affiliates or any third party on its behalf.
14.2 Except as otherwise expressly provided in Section 15, Teva shall indemnify, defend and hold Impax, its Affiliates, and their respective officers, directors, employees, and representatives harmless from and against any and all Damages in connection with any and all suits, investigations, claims or demands by third parties resulting from or arising out of: (a) any breach or alleged breach by Teva (or its Affiliates) of any representation, warranty, undertaking or covenant hereunder; (b) any negligence or willful misconduct by Teva (or its Affiliates); (c) any defect contained in a Product manufactured by Teva, it Affiliates or any third party on its behalf; or (d) any claim of trademark infringement arising from the use by Teva (or its Affiliates) of any of its trademarks in connection with the Products.
14.3 In the event that in determining the respective obligations of indemnification under Section 14, it is found that the fault of Impax, Teva or their respective Affiliates, contributes to any Damages relating to the Products supplied and/or distributed or sold hereunder, then each of Impax and Teva shall be responsible for that portion of the Damages to which its fault contributed.
14.4 As soon as a Party becomes aware of the possibility of a claim involving indemnification under this Section 14, the indemnified Party shall give the indemnifying Party prompt written notice in writing and shall permit the indemnifying Party to have control over the defense of such claim or suit. The indemnified Party agrees to provide all reasonable information and assistance to the indemnifying Party in such defense. No such claims shall be settled other than by the Party defending the same, and then only with the consent of the other Party, which shall not be unreasonably withheld or delayed; provided, however, that the indemnified Party shall have no obligation to consent to any settlement of any such claim which imposes on the indemnified Party any liability or obligation which cannot be assumed and performed in full by the indemnifying Party.
14.5 Except in the event of and to the extent of Damages awarded to a third party in connection with the indemnification provisions set forth in Sections 14.1 and 14.2, above, or awarded to a third party in connection with an Intellectual Rights Suit, neither Teva nor Impax shall be liable to the other for special, indirect, incidental or consequential
28
damages, whether in contract, warranty, negligence, tort, strict liability or otherwise, arising out of the manufacture, Marketing, distribution, sale or use of the Products.
14.6 Without limiting the respective obligations of the Parties hereunder, each Party shall maintain, throughout the Term sufficient product liability insurance coverage to satisfy its obligations hereunder. Each Party shall cause the other Party to be named in such policies as an additional insured and, upon request, each Party agrees to provide to the other certificates of insurance, evidencing such insurance. Without derogating from the foregoing, Impax shall purchase and maintain throughout the Term insurance provided by an insurance company reasonably satisfactory to Teva, at its own expense to cover product liability in an amount not less than Twenty Million U.S. Dollars (U.S. $20,000,000) per occurrence and in the aggregate on or before the launch of the first Tier 1 Product (in any strength), One Hundred Million U.S. Dollars (U.S. $100,000,000) per occurrence and in the aggregate on or before the launch of the second Tier 1 Product (in any strength), and One Hundred and Fifty Million U.S. Dollars (U.S. $150,000,000) per occurrence and in the aggregate as of January 1, 2004. In addition, the deductible for any Impax insurance policies shall not exceed one percent (1%) of the applicable coverage in the aggregate. 15 PATENT LITIGATION 15.1 Promptly following the Effective Date, the Parties shall enter into a joint defense agreement mutually acceptable to both Parties containing customary terms and conditions for the purpose of, among other things, preserving confidentiality and any applicable privilege attaching to information and data exchanged by the Parties under and pursuant to this Agreement.
15.2 Following execution of such joint defense agreement, Impax, upon receiving any written request from Teva, shall promptly provide Teva with reasonable access to information and data about, and personnel knowledgeable of the Products, their formulation, use and process of manufacture, to enable Teva to: (a) ascertain whether the Marketing of the Products in the Territory would infringe any existing patent or other third party intellectual property rights; (b) determine its conduct in relation to any proceedings alleging infringement of a patent or other third party intellectual property right; and/or (c) provide witnesses or documentation from Impax in connection with any proceedings alleging infringement of a patent or other third party intellectual property right.
Tier 1 Products for the U.S.
15.3 With regard to the Tier 1 Products in the U.S., Impax shall have the right to assume or continue, as applicable, the direction and control of any Intellectual Rights Suit and the defense of claims arising therefrom, including without limitation, the selection of legal counsel; provided,
29
however, that once it exercises its right to assume or continue control, Impax shall obtain the prior written consent of Teva prior to ceasing to defend, settling or otherwise disposing of such claim, said consent not to be unreasonably withheld or delayed. Furthermore, Impax shall provide Teva with copies of all pleadings and other litigation documents and shall consult with Teva in connection with litigation strategy. Teva shall fully cooperate with Impax in the defense or prosecution of any such litigation (regardless of which party is a named party to such litigation). Notwithstanding anything to the contrary contained herein, with respect to any Product(s) that are currently the subject of litigation, legal counsel retained by Impax as of the Effective Date shall continue to prosecute or defend such litigation unless the Parties mutually agree to replace such legal counsel.
15.4 With regard to the Tier 1 Products in the U.S., Impax shall bear one hundred percent (100%) of all Intellectual Rights Legal Expenses in connection with the defense and/or arising out of a judgment or settlement of any Intellectual Rights Suit; provided, however, that with respect to attorney fees and associated disbursements Impax shall bear one hundred percent (100%) of any and all such fees up to a maximum amount of Seven Million U.S. Dollars (U.S. $7,000,000) for all of the Tier 1 Products in the U.S. combined, after which, the Parties shall each bear fifty percent (50%) of such attorney fees and associated disbursements. If the foregoing $7,000,000 limitation is exceeded then Impax shall invoice Teva on a monthly basis and Teva shall reimburse Impax for Teva’s share of such attorney fees and associated disbursements within thirty (30) days of receipt of such invoice.
Tier 2 and Tier 3 Products for the Territory
15.5 With regard to the Tier 2 and Tier 3 Products in the Territory, Teva shall have the right to assume direction and control of any Intellectual Rights Suit and the defense of claims arising there from, including without limitation, subject to the consent of Impax, not to be unreasonably withheld, the selection of legal counsel; provided, however, that once it exercises its right to assume control, Teva shall obtain the prior written consent of Impax prior to ceasing to defend, settling or otherwise disposing of such claim, said consent not to be unreasonably withheld or delayed. Furthermore, Teva shall provide Impax with copies of all pleadings and other litigation documents and shall consult with Impax in connection with litigation strategy. Impax shall fully cooperate with Teva in the defense or prosecution of any such patent litigation (regardless of which Party is a named party to that litigation).
15.6 Teva and Impax shall share equally all Intellectual Rights Legal Expenses for the Tier 2 Products and Tier 3 Products for the Territory incurred following the Effective Date; provided, however, with regard to the Tier 2 Products for the U.S., Impax shall bear fifty -five percent
30
(55%) and Teva shall bear forty-five percent (45%) of all Intellectual Rights Legal Expenses. Teva shall invoice Impax on a monthly basis and Impax shall reimburse Teva for Impax’s share of such Intellectual Rights Legal Expenses within thirty (30) days of receipt of such invoice.
15.7 With regard to any of the Products, the provisions set forth in Sections 15.4, 15.5 and 15.6, above, relating to Intellectual Rights Legal Expenses (for the U.S. and all other countries in the Territory), shall not apply with respect to litigation relating to any breach by Impax of its representations and warranties set forth in Section 12.1.6 or 12.1.7 of this Agreement. In such instance, and to the extent related thereto, Impax shall be responsible for one hundred percent (100%) of all Intellectual Rights Legal Expenses.
15.8 With regard to any of the Products, each Party shall obtain the prior written consent of the other Party prior to ceasing to defend, settling or otherwise disposing of any Intellectual Rights Suit or other intellectual property dispute related to the Products. Each Party further agrees that it will not whether in the context of litigation or otherwise related thereto, without the prior written consent of the other Party, enter into any agreement or arrangement with any third party which in any way compromises, relinquishes, waives, or otherwise affects, in whole or in part, the rights of the other Party under this Agreement in respect of the Products. 16 REGULATORY LITIGATION
If Teva and Impax mutually agree in writing to commence legal proceedings against any Regulatory Authority, including without limitation, the FDA, in connection with the Product(s) in order to accelerate the Approval and/or Launch Date of the Product(s), the Parties shall each bear fifty percent (50%) of all out of pocket costs and expenses incurred by either Party in connection with that litigation including, without limitation, legal fees and disbursements. Impax and Teva shall cooperate with one another (regardless of which Party is a named party to that litigation) and shall jointly direct and control the litigation, including without limitation, selection of legal counsel, decisions to settle or compromise the case or a position, and taking any other action.
17 DECLARATORY JUDGMENT LITIGATION
If Teva and Impax mutually agree in writing to institute a declaratory judgment action with respect to any intellectual property rights of any third party relating to the Products, the provisions set forth in Section 16 shall apply mutatis mutandis to this Section 17.
18 ADVERSE REACTIONS, COMPLAINTS AND RECALLS 18.1 Each Party shall provide prompt notice to the other Party of any information concerning side effects, injury, toxicity, or sensitivity reaction associated with the Products, whether or not determined to be attributable to the Products. Further, each Party shall notify the other
31
Party in writing within one (1) business day of the time such Party first becomes aware of a circumstance that might necessitate expedited notification of relevant Regulatory Authorities or significant change in the labeling of the Product(s). The holder of the Approval shall be responsible for all adverse drug event reporting for the applicable countries of the Territory for the Products and responding to all adverse drug event reports received from lay persons and/or health care professionals respecting the Products.
18.2 Copies of complaints with regard to the Products received by either Party will be sent promptly by facsimile to the other Party. Impax shall investigate all complaints associated with the manufacturing of the Products and shall provide a written summary to Teva of all such investigations and a prompt written response to the complainant, with a copy to Teva.
18.3 To the extent permitted or required by law, any decision to recall, withdraw or cease distribution of any Product as a result of a violation of the applicable Approval or any Applicable Law, or because the Product presents a possible safety risk may be made by either Party after consulting with the other Party and taking such reasonable action as the Parties consider to be appropriate under the circumstances to minimize the risk to both Parties and to assure compliance by the Parties with the requirements of the applicable Approval. Any such recall or market withdrawal shall be controlled by Teva; provided, however, that the Parties shall use their best efforts to work together to repossess the affected Product. If any recall or market withdrawal of any Product is the result of the negligence of either Party (or its Affiliate) or the breach by either Party (of its Affiliate) of any representation, warranty, covenant or agreement under this Agreement by that Party (or its Affiliate), including the Product warranties, then the negligent or breaching Party shall pay the costs of any such recall action and such costs shall not be charged to the other Party. If any such recall or market withdrawal of any Product is not the result of negligence of either Party (or its Affiliate) or the breach by either Party (or its Affiliate) of any representation, warranty, covenant or agreement under this Agreement, then the Parties shall equally share the out of pocket cost of any such recall or market withdrawal. For the purposes of this Section 18.3, expenses of recall shall include, without limitation, the expenses of notification and destruction or return of the recalled Product(s) and the refund to consumers of amounts paid for the recalled Product(s). 19 AUDITS 19.1 Teva or its Affiliates shall have the right, at its own cost, to visit any manufacturing site at which any of the Products or API are being manufactured and/or stored, during regular business hours and upon not less than three (3) business days prior written notice to Impax. During any such visit, Teva or its Affiliates shall have the right: (a) to
32
inspect the manufacturing, packaging, testing, quality control, transport and/or storage facilities for such Products or API; (b) to inspect the procedures relating to any of the activities referred to in subsection (a) above; and/or (c) to audit any books, records and reports pertinent to the activities referred to in subsection (a) above to ensure compliance with all Applicable Laws, including without limitation, compliance with cGMP, ANDAs, and other Approvals.
19.2 Impax or its Affiliates shall have the right, at its own cost, to visit any manufacturing site at which any of the Products or API are being manufactured and/or stored, during regular business hours and upon not less than three (3) business days prior written notice to such manufacturer and Teva. During any such visit, Impax or its Affiliates shall have the right: (a) to inspect the manufacturing, packaging, testing, quality control, transport and/or storage facilities for such Products or API; (b) to inspect the procedures relating to any of the activities referred to in subsection (a) above; and/or (c) to audit any books, records and reports pertinent to the activities referred to in subsection (a) above to ensure compliance with all Applicable Laws, including without limitation, compliance with cGMP, ANDAs, and other Approvals.
19.3 Each Party shall promptly supply the other Party with a copy of any notices or reports received from any Regulatory Authority related to an audit or other investigation by the Regulatory Authority with respect to the API and/or Products. Each Party shall use its commercially reasonable best efforts to provide such Regulatory Authority with a prompt, accurate and complete response to any deficiencies noted, and to promptly address, and if necessary correct, any and all such deficiencies to the satisfaction of the Regulatory Authority. 20 CONFIDENTIALITY 20.1 Each of the Parties agrees that: (a) it will not disclose any Confidential Information of the other to any third party at any time during the Term without the prior written consent of the disclosing Party; (b) it will not make use of any Confidential Information of the other Party for any purpose other than for the purposes set forth in, or in furtherance of the transactions contemplated by this Agreement; and/or (c) it will use all reasonable efforts to prevent unauthorized publication or disclosure by any person of such Confidential Information including requiring its employees, consultants or agents to enter into similar confidentiality agreements in relation to such Confidential Information.
20.2 Notwithstanding the foregoing, either Party shall be permitted upon reasonable prior written notice to the other Party to disclose Confidential Information if required by law or court order. 20.3 All Confidential Information in any form will be returned to the Party who disclosed the Confidential Information within thirty (30) days of the
33
termination or expiration of this Agreement, save for the retention of one (1) copy of the Confidential Information by the receiving Party as a record of the receiving Party ’s ongoing confidentiality obligations under this Agreement.
20.4 Neither Party shall use the name of the other Party in any publicity or advertising nor, except as required by law or court order, publicly disclose information related to this Agreement or the terms and conditions hereof without the prior written consent of the other Party.
20.5 Each of the Parties agrees that all Confidential Information that it receives from the other Party and/or its Affiliates in connection with the Products is the sole property of the disclosing Party and shall be used by it only in accordance with the terms and provisions of this Agreement.
20.6 This Section 20 shall be in effect during the Term and for a period of five (5) years following the termination or expiration thereof.
20.7 The Parties acknowledge that it is their intention to limit the disclosure of Confidential Information hereunder to the Products and matters directly related thereto. 21 TERM AND TERMINATION 21.1 Any Supply Term shall be extended for successive terms of two (2) years unless either Teva or Impax provides the other with written notice of its intention not to extend that Supply Term at least twelve (12) months before the expiration of such initial Supply Term or any extension thereof.
21.2 Subject to Sections 21.2.1 and 21.2.2, this Agreement may be terminated by either Party by written notice provided to the other Party at any time during the Term if the other Party (the “ Breaching Party ”) is in material breach or default of any of its obligations hereunder (including, without limitation, any payment obligations) or any of its representations or warranties hereunder were untrue in a material respect when made, as follows: (i) the terminating Party shall send written notice of the material breach or material default to the Breaching Party, and (ii) the termination shall become effective sixty (60) days after written notice thereof was provided to the Breaching Party, unless the Breaching Party has cured any such material breach or default prior to the expiration of the sixty (60) day period or if such material breach or material default is not capable of being cured within such sixty (60) day period, and the Breaching Party has commenced activities reasonably expected to cure such material breach or material default within such sixty (60) day period and thereafter uses diligent efforts to complete the cure as soon as practicable, but in no event shall such period exceed ninety (90) days.
34
21.2.1 Teva’s right to terminate in the event of Impax’s failure to supply Teva’s or its Affiliates’ requirements for Products hereunder shall be on a Product -by -Product basis for each of the relevant countries of the Territory.
21.2.2 The failure of Impax to supply Teva’s or its Affiliates’ requirements for Products hereunder shall not give rise to a right of termination by Teva if following such failure, Teva, its Affiliate or a third party designated by Teva manufactures the Product pursuant to the provisions of Section 7.5 hereof. 21.3 Subject to the provisions of Section 22.3 hereof, either Party may terminate this Agreement effective upon issuance of written notice if, at any time, the other Party files a petition in bankruptcy, or enters into an arrangement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes an assignment for the benefit of creditors, or suffers or permits the entry of an order adjudicating it to be bankrupt or insolvent.
21.4 In addition to the other provisions of this Section 21, Teva shall be entitled to terminate this Agreement with respect to any Tier 2 Product in the U.S. by providing written notice to Impax by no later than the earlier of (i) twelve (12) months following the Effective Date, or (ii) fifteen (15) days after acceptance by the FDA of the ANDA for the applicable Tier 2 Product(s). Upon such termination the grant hereunder to Teva to Market such Tier 2 Products in the U.S. shall revert to Impax and, except as provided in this Section 21.4, Teva’s obligations hereunder with regard to such Tier 2 Products shall terminate. To the extent applicable, Teva shall indicate in its notice if it intends to commercialize a Competing Product to the subject Tier 2 Product that it internally developed (as distinguished from a “Transaction Event”). Upon receipt of Teva’s written notice, Impax shall have sixty (60) days to elect to, if applicable (as a result of Teva setting forth in its notice its intention to commercialize a Competing Product), to participate in Teva’s commercialization of such Competing Product(s), in the U.S., in which case, such Competing Product(s) shall be deemed to be the corresponding Tier 2 Product terminated by Teva for purposes of this Agreement. In the event Impax elects to participate in Teva’s commercialization of the Competing Product, Teva shall manufacture the applicable Competing Product, carry out all regulatory and legal activities and Impax shall reimburse Teva twenty-five percent (25%) for all past and future Regulatory Expenses and Intellectual Rights Legal Expenses incurred by Teva and/or its Affiliates for such Competing Product(s), and the Impax Margin for such Competing Product(s) payable to Impax shall be deemed to be twenty-five percent (25%) of Profit. Within sixty (60) days following launch of the applicable terminated Tier 2 Product(s) by Impax or Impax’s Affiliate, nominee, assignee, licensee or other similar entity, Impax shall reimburse Teva an amount equal to all Regulatory Expenses and
35
Intellectual Rights Legal Expenses paid by Teva under this Agreement with respect to the applicable Tier 2 Product(s).
21.5 Teva shall be entitled to terminate this Agreement, upon thirty (30) days notice to Impax, in the event of an Event of Default (as set forth in Section 10.7).
21.6 In the event that there is no launch of any of the Products in any of the countries in the Territory by July 15, 2004, Teva shall have the right, at its option, to terminate this Agreement on ten (10) days notice. 22 CONSEQUENCES OF TERMINATION 22.1 Termination of this Agreement for whatever reason shall not affect the liabilities or obligations of the Parties hereunder in respect of matters accrued at the time of such termination, and shall be without prejudice to any other right or remedies available at law or in equity. (Impax acknowledges and agrees, however, that notwithstanding the immediately preceding sentence it shall not have any other rights or remedies against Teva in the event of a termination pursuant to Section 21.4, 21.5, or 21.6).
22.2 In the event of early termination of this Agreement by Teva pursuant to Section 21.3 or 21.5, and without derogating from any other rights or remedies available to Teva, Impax shall, at the election of Teva exercised within thirty (30) days of Teva’s notice to Impax of termination, promptly and free of charge: 22.2.1 transfer to Teva or a Teva designee all information, data and know-how in its possession or control necessary for the manufacture of the API and Products;
22.2.2 grant and/or transfer to Teva the right of access or use of all Regulatory Documentation and Approvals in its possession or control for the Products to enable Teva to manufacture and/or Market the Products in the Territory; and
22.2.3 use its best efforts to assist Teva to assure that such transfers as set forth in this Section 22.2 are effected as effectively and expeditiously as possible. 22.3 In the event this Agreement is terminated under Section 21.3, all rights and licenses granted pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of 11 U.S.C. §101 et seq. (the “Bankruptcy Code” ), licenses of rights to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code. The Parties agree that Teva, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights (including, without limitation, any right to enforce any exclusivity provision of this Agreement (including any embodiment of such “intellectual property”)), remedies and elections under the Bankruptcy Code. To the fullest extent permitted by Applicable Law, the Parties
36
further agree that, in the event of the commencement of a bankruptcy proceeding by or against Impax under the Bankruptcy Code, Teva shall be entitled to all applicable rights under Section 365 of the Bankruptcy Code, including but not limited to, a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property upon written request therefore by Teva, and such, if not already in its possession, shall be promptly delivered to Teva. 23 INDEPENDENT CONTRACTORS
The status of the Parties under this Agreement shall be that of independent contractors. Nothing is this Agreement shall be construed as establishing a partnership or joint venture relationship between the Parties hereto. No Party shall have the right to enter into any agreements on behalf of the other Party, nor shall it represent to any person that it has any such right or authority. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party. 24 SUCCESSORS AND ASSIGNS
The terms and provisions hereof shall inure to the benefit of, and be binding upon, Teva, Impax and their respective successors and permitted assigns. Neither Party shall assign this Agreement or any part of it to any third party without the prior written consent of the other Party; provided, however, that Teva may, without obtaining the consent of Impax, assign this Agreement or delegate any of its rights or obligations hereunder to any of its Affiliates, provided that Teva agrees to remain primarily liable for the full and timely performance by such Affiliate of all its obligations hereunder. 25 FORCE MAJEURE 25.1 Neither Party shall be liable for non -performance or delay in the fulfillment of its obligations with the exception of payment obligations and those obligations respecting the timely achievement of the applicable milestones, when any such non-performance or delay shall be occasioned by any unforeseeable cause beyond the reasonable control of Teva or Impax, as the case may be, including without limitation, acts of God, fire, flood, earthquakes, explosions, sabotage, strikes, or labor disturbances (regardless of the reasonableness of the demands of the labor force), civil commotion, riots, military invasions, wars, failure of utilities, failure of carriers, or any acts, restraints, requisitions, regulations, or directives issued by a competent government authority ( “Force Majeure Events” ).
25.2 In the event that either Party is prevented from discharging its obligations under this Agreement on account of a Force Majeure Event, such Party shall notify the other forthwith, and shall nevertheless make every endeavor, in the utmost good faith, to discharge its said obligations, even if in a partial or compromised manner.
37
26 CURRENCY
All payments under this Agreement shall be made in U.S. Dollars and, as applicable, the calculation of exchange rates shall be based upon the average over a twenty (20) business day period preceding the date that payment is due of the applicable rate of exchange as published in the Wall Street Journal.
27 PUBLICITY AND DISCLOSURE OF AGREEMENT
Concurrently with the execution of this Agreement, the Parties shall agree in good faith on a form of press release which Impax may release. The Parties agree that until February 1, 2002, no future publicity release or announcement concerning the transactions contemplated hereby shall be issued without the advance written consent of the other Party, which consent shall not be unreasonably withheld, to the extent such release or announcement includes statements concerning terms of this Agreement and/or explicitly includes the Products or either Parties’ name(s), except to the extent such release or announcement may be required by Applicable Law. For releases or announcements required by law, the Party making the release or announcement shall, before making any such release or announcement, afford the other Party a reasonable opportunity to review and comment. Any copy of this Agreement to be filed with the Securities and Exchange Commission or any other Regulatory Authority shall be redacted to the fullest extent permitted by Applicable Law and to the reasonable satisfaction of both Parties; provided, however, in the event that the Securities and Exchange Commission or Regulatory Authority, as applicable, objects to the redaction of any portion of the Agreement after the initial submission, the filing Party shall inform the other Party of the objections and shall in good faith respond to the objections in an effort to limit the disclosure required by the Securities and Exchange Commission or Regulatory Authority, as applicable.
28 SEVERABILITY
Should any part or provision of this Agreement be held unenforceable or in conflict with applicable law, the invalid or unenforceable part or provision shall, provided that it does not go to the essence of this Agreement, be replaced with a revision which accomplishes, to the extent possible, the original commercial purpose of such part or provision in a valid and enforceable manner, and the balance of this Agreement shall remain in full force and effect and binding upon the Parties hereto.
29 ENTIRE AGREEMENT
This Agreement (including its Annexes), together with the Note, the Stock Purchase Agreement and Registration Rights Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior agreements, arrangements, dealings or writings between the Parties. This Agreement may not be amended or modified except in writing executed by the duly authorized representatives of both Parties.
38
30 WAIVER
No waiver of a breach or default hereunder shall be considered valid unless in writing and signed by the Party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.
31 GOVERNING LAW
This Agreement shall be governed, interpreted and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles of conflicts of law. Subject to Section 32, each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the Commonwealth of Pennsylvania or United States Federal Court sitting in the City of Philadelphia and Commonwealth of Pennsylvania over any action or proceeding arising out of or relating to this Agreement, and each hereby waives the defense of any inconvenient forum for the maintenance of such action or proceeding. To the extent that it may otherwise be applicable, the Parties hereby expressly agree to exclude from the operation of this Agreement the United Nations Convention on Contracts for the International Sale of Goods, concluded at Vienna, on 11 April 1980, as amended and as may be amended further from time to time.
32 WORKING COMMITTEE AND SECTION 2.8 DISPUTE RESOLUTION
Any and all disputes within the Working Committee as well as pursuant to Section 2.8 shall be submitted to a panel of three (3) arbitrators having expertise in the specific area that is the subject of dispute. Teva and Impax shall each select one arbitrator. The arbitrators selected by Teva and Impax shall select the third arbitrator. All arbitrators shall be selected within twenty (20) days. Any arbitration shall be held in Philadelphia, Pennsylvania at such place as may be agreed upon by the Parties. The arbitrators shall have sole discretion with regard to the admissibility of any evidence and all other matters relating to the conduct of the arbitration and the arbitration shall be conducted in accordance with the American Arbitration Association. The arbitrators shall in rendering their decision, apply the substantive laws of the Commonwealth of Pennsylvania (regardless of its or any other jurisdiction’s choice of law principles). The decision of the arbitrators shall be final and not appealable, except in the case of fraud or bad faith on the part of the arbitrators or any Party to the arbitration proceeding in connection with the conduct of such proceedings. The arbitrators shall determine the proportion in which the Parties shall pay the costs and fees of the arbitration, and each Party shall pay its own costs (including, without limitation, reasonable attorney’s fees) and expenses in connection with such arbitration. The arbitration proceeding shall be confidential and, except as required by Applicable Law, neither Party shall make (or instruct the arbitrators to make) any public announcement with respect to the proceedings or decision of the arbitrator without prior written consent of the other Party. The existence of any dispute submitted for arbitration, and the award of the arbitrator, shall be
39
kept in confidence by the Parties and the arbitrators, except as required in connection with the enforcement of such award or as otherwise required by Applicable Law.
33 NOTICES
Notices provided for under this Agreement shall be given in writing, in English, by facsimile; by first -class mail, federal express or similar service to the mailing address or facsimile numbers set out below:
If to Teva: TEVA PHARMACEUTICALS CURACAO N.V. World Trade Center Curacao, Unit T.M.I. 14 Piscadera Bay, Curacao Netherlands Antilles Attention: General Manager Telephone: 599 -9-463 -6388 Facsimile: 599 -9-463 -6588
With a copy to: TEVA PHARMACEUTICALS USA, INC. 1090 Horsham Road North Wales, Pennsylvania 19454 Attention: Vice President and General Counsel Teva North America Telephone: (215) 591 -3000 Facsimile: (215) 591 -8813
If to Impax: IMPAX LABORATORIES, INC. 3735 Castor Avenue Philadelphia, PA 19124 Attention: Barry R. Edwards, CEO Telephone: (215) 289 -2220 Facsimile: (215) 289 -5932
With a copy to: IMPAX LABORATORIES, INC. 30831 Huntwood Avenue Haywood, California 94544 Attention: Larry Hsu, President and COO Telephone (510) 471 -3600 Facsimile: (510) 471 -1595 or to such other addresses or facsimile numbers as a Party shall designate by notice, similarly given, to the other Party. Notices shall be deemed to have been sufficiently given and served the day transmitted by facsimile (with confirmed transmission) or a date five (5) business days after the date of express mail or by mail courier.
40
IN WITNESS WHEREOF, each of the Parties has executed this Agreement and Annexes as of the date below.
TEVA PHARMACEUTICALS CURACAO N.V. IMPAX LABORATORIES, INC.
Signature: /s/ Ido Weinstein Signature: /s/ Barry R. Edwards
Name: Ido Weinstein Name: Barry R. Edwards
Title: Managing Director Title: Co -CEO
Date: June 26, 2001 Date:
Signature: MeesPierson Trust (Curacao) NV. Signature: /s/ Larry Hsu /s/ Theo J. Andriessen Name: Theo J. Andriessen Name: Larry Hsu
Title: Director Title: President and COO
Date: June 26, 2001 Date:
41
ANNEX A The Products
BRAND* GENERIC STRENGTH Tier 1 Products Wellbutrin SR Buproprion ER 100mg, 150mg Zyban Buproprion ER 150mg Claritin Reditabs Loratadine Orally Disintegrating Tablets 10mg Claritin -D 12 hour Loratadine/PSE ER 12 hr 5mg/ 120mg Claritin -D 24 hour Loratadine/PSE ER 24 hr 10mg/ 240mg
Tier 2 Products Ditropan XL Oxybutynin 5mg, 10mg, 15mg Glucophage XR Metformin XL 500mg Allegra -D Fexofenadine/PSE 60mg/ 120mg
Tier 3 Products Three additional Products to be determined by the Parties as provided herein.
* including, without limitation, any additional brands.
42
ANNEX B Tier 1 Products and Optional Products: Manufacturing Caps
Optional Optional Optional Loratadine Loratadine Loratadine Product Product Product Buproprion Buproprion D 12 D24 OD 10mg 20 mg 40mg 100mg 150mg 5/120mg 10/240mg 10mg Bottle Size XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX $ $ $ $ $ $ $ $ Labor, OH & QC cost XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX Pkg. Mat ’l XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX Total Cost XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX
Bottle Size XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX $ $ $ $ $ $ $ $ Labor, OH & Qc cost XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX Pkg. Mat ’l XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX Total Cost XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX
43
Annex C Milestones (If Teva exercises the option for the Optional Products pursuant to Section 4)
Milestone Event Amount Forgiven (US$)** 1. *Tentative Approval for all of the Optional Products, (10 mg, 20 mg, and 40 mg) in the U.S. by no later than $2,000,000 June 15, 2002.
2. *Launch Date for all of the Optional Products, (10 mg, 20 mg, and 40 mg) in the U.S within fifteen (15) days $5,000,000 from the expiration of First to File Exclusivity, but in no event later than February 15, 2003.
3. Launch Date for XXXXX in the U.S. no later than December 15, 2003. $5,000,000
4. Launch Date for all of XXXXX mg/ XXXXX mg and XXXXX Tablets in the U.S. within fifteen (15) days from the expiration of First to File Exclusivity, but in no event later than December 15, 2003. $4,000,000
5. Tentative Approval for all of XXXXX mg and XXXXX mg in the U.S. by no later than January 15, 2003, provided that the facility in which Impax will manufacture such Product has been approved by the FDA for commercial launch. $1,000,000
6. Launch Date for all of XXXXX mg, and XXXXX mg in the U.S. within fifteen (15) days from the expiration of First to File Exclusivity, but in no event later than December 15, 2003. $5,000,000
* If Impax fails to meet the Tentative Approval condition but subsequently meets the Launch Date condition, the $2,000,000 shall nevertheless be forgiven.
** For the sake of clarification, the applicable milestone shall be achieved only if the tentative Approval and/or Launch Date is for the prescription drug marketplace only.
44
Annex D Milestones (If Teva does not exercise the option for the Optional Products pursuant to Section 4)
Milestone Event Amount Forgiven (US$)* 1. Launch Date for XXXXX mg in the U.S. no later than December 15, 2003. XXXXX
2. Launch Date for all of XXXXX mg and XXXXX in the U.S. within fifteen (15) days from the expiration of First to File Exclusivity, but in no event later than December 15, 2003. XXXXX
3. Tentative Approval for all of XXXXX mg and XXXXX mg in the U.S. by no later than January 15, 2003, provided that the facility in which Impax will manufacture such Product has been approved by the FDA for commercial launch. XXXXX
4. Launch Date for all of XXXXX mg, and XXXXX mg in the U.S. within fifteen (15) days from the expiration of First to File Exclusivity, but in no event later than December 15, 2003. XXXXX
* For the sake of clarification, the applicable milestone shall be achieved only if the tentative Approval and/or Launch Date is for the prescription drug marketplace only.
45
Annex E Stock Purchase Agreement and Registration Rights Agreement
46
Annex F EU Countries*
Austria Luxembourg Belgium Netherlands Denmark Portugal Finland Spain France Sweden Germany Switzerland Greece United Kingdom Ireland Italy
* Plus any other country added to the European Union during the Term. Teva shall have the option in the manner provided by Section 3.1 for twelve (12) months from such date of inclusion to include any such country to the Territory.
47
Annex G Optional Products
Brand * Generic Strengths Prilosec Omeprazole DR 10 mg, 20 mg, 40 mg
* including, without limitation, any additional brand.
48
Annex H The Note pursuant to Section 10.1
49 EXHIBIT 10.13.1 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
[LETTERHEAD OF TEVA PHARMACEUTICALS CURACAO N.V.] October 8, 2003
VIA FACSIMILE AND REGULAR MAIL Impax Laboratories, Inc. 3753 Castor Avenue Philadelphia, PA 19124 Attention: Barry Edwards, Co-CEO
Re: Strategic Alliance Agreement between Impax Laboratories, Inc. and Teva Pharmaceuticals Curacao N.V. effective June 27, 2001 ( “ Agreement ”).
Dear Barry: As you know, Teva Pharmaceuticals Curacao N.V. (“ Teva ”) exercised its option under Section 4.1 of the Agreement to add the Optional Products (Omeprazole DR, 10, 20 and 40 mg) to the Agreement as Tier 1 Products. The Omeprazole 40 mg is specifically excluded from this letter agreement. All defined terms used herein shall have the same meaning as set forth in the Agreement. This will confirm that only with respect to the Optional Products for the Territory of the U.S., the Parties have agreed to the following: (a) During the period set forth in the table below, the Impax Margin shall be in an amount set forth opposite each period:
PERIOD IMPAX MARGIN Commencing on the Launch Date and ending eighteen (18) months from the Launch Date XXXXX % of the Profit
Commencing eighteen (18) months from the Launch Date and ending twenty-four (24) months from the Launch XXXXX % of the Profit Date
Commencing twenty -four (24) months from the Launch Date and thereafter XXXXX % of the Profit (b) For purposes of Section 12 of the Agreement, Impax further represents and warrants that:
(1) prior to filing its ANDA for the Optional Products, it obtained an objectively reliable written opinion of independent and competent outside counsel that each of the Orange Book patents with respect to the Optional Products was invalid, unenforceable, or would not be infringed by the manufacture, use, sale, offer for sale in the U.S., or importation into the U.S. of Impax ’s omeprazole formulation;
(2) it has obtained an updated written opinion regarding U.S. patents 4,786,505 and 4,853,230, reflecting the claim construction adopted by the Southern District of New York in AstraZeneca v. Andrx et al. , dated October 16, 2002, and reported at 222 F.Supp.2d 423 (SDNY 2002);
(3) it has obtained an objectively reliable written opinion of independent and competent outside counsel that U.S. patent 6,013,281 is invalid, unenforceable, or would not be infringed by the manufacture, use, sale, offer for sale in the U.S., or importation into the U.S. of Impax ’s omeprazole formulation;
(4) it actually relied upon the opinion referred to in subparagraph (1), above in deciding whether to file an ANDA containing a paragraph IV certification with respect to each of the Orange Book listed patents with respect to the Optional Products; and
(5) it actually relied upon the opinions referred to in subparagraphs (1), (2) and (3), above in deciding whether to make, use, sell or offer to sell the Optional Products within the U.S. prior to the expiration of each of the relevant patents. (c) Only upon the commencement or amendment of any Intellectual Rights Suit, directly arising from the launch of the Optional Products in the U.S. by Teva and/or its Affiliates, Sections 11.5, 14.1, 15.3 and 15.4 of the Agreement shall not apply and the following shall apply instead: (1) Teva shall have the obligation to assume direction and control of any such Intellectual Rights Suit directly arising from the launch of the Optional Products in the U.S. by Teva and/or its Affiliates as well as any pending or future intellectual property suit involving the same patents at issue in such Intellectual Rights Suit (collectively referred to herein as the “ Optional Product Launch Litigation ”) and the defense of claims arising therefrom, including without limitation, the selection of legal counsel; provided, however, that Teva shall obtain the prior written consent of Impax prior to ceasing to defend, settling or otherwise disposing of any such Optional Product Launch Litigation, said consent not to be unreasonably withheld or delayed. Furthermore, Teva shall provide Impax with copies of all pleadings and other litigation documents and
2
shall consult with Impax in connection with litigation strategy. Impax shall fully cooperate with Teva in the defense or prosecution of any such Optional Product Launch Litigation (regardless of which Party is a named party to that litigation). Subject to the last sentence of subparagraph (2) below, Teva shall bear one-hundred percent (100%) of all Intellectual Rights Legal Expenses in connection with the defense and/or arising out of a judgment or settlement of any Optional Product Launch Litigation.
(2) Teva shall indemnify, defend and hold harmless Impax for any Intellectual Rights Legal Expenses of any Optional Product Launch Litigation to the extent not attributable in whole or in part to any untrue representation or warranty of Impax or breach of a covenant made by Impax hereunder or under the Agreement. Further, in such case, fifty percent (50%) of any Intellectual Rights Legal Expenses paid by Teva in connection with any Optional Product Launch Litigation, or the above indemnity, shall be set-off, credited or reimbursed (“ Set-Off ”) against any Impax Margin or Revised Impax Margin related to the Optional Products; provided, that the amount of the Set-Off shall in no event exceed the Impax Margin or Revised Impax Margin related to the Optional Products. Notwithstanding the foregoing, to the extent such Intellectual Rights Legal Expenses are attributable in whole or in part to any untrue representation or warranty of Impax or breach of a covenant made by Impax hereunder or under the Agreement, then in such case Impax shall be responsible for one hundred percent (100%) of all such Intellectual Rights Legal Expenses.
(3) Each Party shall obtain the prior written consent of the other Party prior to ceasing to defend, settling or otherwise disposing of any intellectual property dispute related to the Optional Products. Each Party further agrees that it will not whether in the context of litigation or otherwise related thereto, without the prior written consent of the other Party, enter into any agreement or arrangement with any third party which in any way compromises, relinquishes, waives, or otherwise affects, in whole or in part, the rights of the other Party. Also, this will confirm that the Parties have agreed that any payments due to Teva under Section 2.15 of the Agreement for the 3 rd and 4 th Calendar Quarter of 2003 shall be made to Teva on or before May 14, 2004, without interest. Finally, this will also confirm that the Parties have agreed that for purposes of Section 14.6 of the Agreement, any insurance premiums of up to XXXXX U.S. Dollars (U.S. $ XXXXX ) per year paid by Impax for product liability insurance coverage will be included in the Manufacturing Costs for the Optional Products. Without derogating from Impax’s obligation under Section 14.6 of the Agreement to maintain throughout the Term sufficient product liability insurance coverage to satisfy its obligations under the Agreement, Teva hereby waives forever the provision in Section 14.6 of the Agreement requiring Impax specifically to increase on
3
January 1, 2004 its product liability insurance coverage to XXXXX U.S. Dollars (U.S. $ XXXXX ). Except as otherwise specifically provided herein, the Agreement shall remain in full force and effect. This letter amendment shall become effective as of November 1, 2003. Please sign below as an acknowledgement of the above and return a signed copy to me via facsimile and the original by overnight mail.
Thank you.
Regards,
Teva Pharmaceuticals Curacao N.V.
By: /s/ Ido Weinstein Ido Weinstein Managing Director
Acknowledged and Agreed This 8 th day of Oct., 2003
Impax Laboratories, Inc.
By: /s/ Barry Edwards
Barry Edwards Co -CEO
4 EXHIBIT 10.13.2 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Teva Pharmaceuticals Curaçao N.V. Schottegatweg Oost 29 D Curaçao Netherlands Antilles
March 24, 2005 Barry R. Edwards Chief Executive Officer Impax Laboratories, Inc. 121 New Britain Boulevard Chalfont, PA 18914
RE: RESULTS U NDER S TRATEGIC A LLIANCE A GREEMENT , A S A MENDED (“AGREEMENT ”) FOR THE T HREE M ONTHS AND Y EAR E NDED DECEMBER 31, 2004 Dear Barry: Teva Pharmaceuticals Curacao N.V. (“Teva Curacao”), hereby certifies to Impax Laboratories, Inc. (“Impax”) that the amounts shown on the attached report (“Report”) with respect to the Net Sales and Impax Margin under the Agreement for the three months and year ended December 31, 2004, are complete and accurate based on the information available to Teva Curacao at the time of preparation of the Report. In addition, Impax agrees to make payment to Teva Curacao in the amount of XXXXX US Dollars (US $ XXXXX ) for the remaining estimated 2004 returns exposure (which payment shall be due within thirty (30) days following the receipt by Impax of an invoice). Neither Teva Curacao nor Impax shall make any further claim, demand for payment, adjustment or change with respect to the Net Sales or Impax Margin set forth in the Report. Capitalized terms used in this letter and not otherwise defined have the respective meanings set forth in the Agreement. Please sign below as your acknowledgement of the above, and return a signed copy of this letter to my attention.
Impax Laboratories Inc Teva Pharmaceuticals Curacao N.V.
By: /s/ Barry R. Edwards By: /s/ Ido Weinstein
Ido Weinstein Managing Director
Date: March 28, 2005 Date: March 29, 2005
EXHIBIT 10.13.3 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Teva Pharmaceuticals Curaçao N.V. Schottegatweg Oost 29 D Curaçao Netherlands Antilles March 24, 2005
Impax Laboratories, Inc. Attention: Barry Edwards, CEO 121 New Britain Blvd. Chalfont, Pennsylvania 18914
Re: Strategic Alliance Agreement between Impax Laboratories, Inc. ( “Impax”) and Teva Pharmaceuticals Curaçao N. V. (“Teva”) effective June 27, 2001, as amended ( “Agreement ”). Dear Barry: This letter sets forth our mutual agreement to amend, such amendment to be given effect from and after January 1, 2005 (the “Effective Date”), certain terms and conditions of the Agreement that relate to Net Sales, as such term is used in the Agreement. Defined terms used and not otherwise defined herein have the respective meanings assigned to them in the Agreement. Except as specifically provided herein, the Agreement shall remain in fill force and effect. (1) In consideration of our mutual agreement, Impax and Teva, intending to be legally bound, hereby agree, such agreement to be effective from and after the Effective Date, that the definition of “Net Sales” set forth in Section 1.4.26 of the Agreement is replaced with the following: “ Net Sales ” shall mean, on a Product-by-Product basis, the aggregate gross sales (“Gross Sales”) amount invoiced by Teva (or its Affiliates) for
1
Products sold on an arms-length basis in the Territory, less the following deductions relating to such Product sales: a) XXXXX percent ( XXXXX %) of Gross Sales, in respect of prompt pay discounts provided by Teva (and its Affiliates) to its customers; b) an agreed upon percent per Product as specified in Attachment A to this amendment, of Gross Sales for any adjustments for the reason of price adjustments, promotional payments, billing adjustments, shortages, rejected goods and damaged goods. Such percentages shall be estimated within thirty (30) days before launch of each new Product and annually readjusted by Teva, subject to approval by Impax, which such approval shall not be unreasonably withheld, based on market conditions; c) charge-backs, prime vendor rebates, administrative fee arrangements reimbursements, and similar payments to wholesalers and other distributors, buying groups, health care insurance carriers, pharmacy benefit management companies, health maintenance organizations, other institutions or health care organizations or other customers, determined by Teva on an accrual basis based on good faith estimates at the time of sale; d) XXXXX percent ( XXXXX %) of Gross Sales for any state or federal Medicare, Medicaid or similar programs related to rebates or other price reductions provided, based on sales by Teva and its Affiliates to any governmental or regulatory authority in respect of such state or federal Medicare, Medicaid or similar programs; e) XXXXX percent ( XXXXX %) of Gross Sales, in respect of customer returns; and f) XXXXX percent ( XXXXX %) of Gross Sales, in respect of selling, administrative and other similar expenses of Teva. In the event that Teva or its Affiliates sell Products as part of a bundle or group sale with other products not covered by this Agreement, and Teva or its Affiliates provide a discount, allowance or rebate to the purchaser of such products based on the invoiced prices for all products sold, such discount must be allocated by Teva pro-rata based on the selling prices of such products before taking into account the discount, allowance or rebate on Products provided as part of such bundle. A transaction in which a customer must purchase products in excess of a certain volume threshold to obtain discount, allowance or rebate regardless of what products may be purchased is not a bundled sale even if a particular customer purchases more than one type of product to achieve the specified volume. The amounts calculated pursuant to this paragraph shall not be duplicative of amounts calculated in accordance with clauses (a) through (f) above. Within XXXXX days after the end of each calendar year in which Teva (or its Affiliates) sell any Product the Parties agree to allow for a “true up”
2
reconciliation (and provide Impax a written report of such reconciliation) of the deductions from Gross Sales for each such Product. The “true up” reconciliation shall be based on actual credits issued and estimates for those incurred related to the reported invoiced sales, but not yet issued for amounts as outlined in clause (c) of the definition of “Net Sales”. If the foregoing reconciliation report shows either an underpayment by Teva to Impax or an overpayment by Teva to Impax, Impax shall pay Teva the amount of the overpayment, or Teva shall pay Impax the amount of the underpayment (whichever shall be applicable) within thirty (30) days of the date of its receipt of the report. In addition to such reconciliation report, the chief financial officer of Teva or its Affiliate, Teva Pharmaceuticals USA, Inc. shall provide Impax with a certification (in a form substantially similar to that of Attachment B), that all information included in such report is complete and accurate in all material respects, to the best of his knowledge and belief. Once Teva sends to Impax the reconciliation report, Teva shall not make any further adjustments to Net Sales or Impax Margin for the related calendar year.” (2) The Parties agree to amend Section 11.3 of the Agreement to insert the following after the first sentence: “In addition to such report, the chief financial officer of Teva or its Affiliate, Teva Pharmaceuticals USA, Inc. shall provide Impax with a certification (in a form substantially similar to that of Attachment B), that all information included in such report is complete and accurate in all material respects, to the best of his knowledge and belief.” (3) The Parties agree to replace Section 11.8 of the Agreement in its entirety with the following: “Teva and Impax shall calculate and record Net Sales, Manufacturing Costs, Profit, Impax Margin, Revised Impax Margin, Optional Territory Fee, Regulatory Expenses and/or Intellectual Rights Legal Expenses in accordance with the Agreement, and shall maintain all books and records related thereto for the period required by Applicable Law or a period of XXXXX years from the date of the record’s creation, whichever is longer.” ( 4) Impax hereby acknowledges that Teva and its Affiliates have not, with respect to periods ending on or prior to December 31, 2004, acted in bad faith in their accounting for Net Sales under the Agreement. (5) Teva agrees to cooperate with Impax to provide reasonable and necessary information in order to enable Impax, on a quarterly basis, to verify Net Sales and Impax Margin, including the chargeback accrual as defined in clause (c) of the definition of “Net Sales.” (6) Teva agrees to allow Impax’s XXXXX , access to reasonable and necessary documents and information concerning the calculation of Net
3
Sales and Impax Margin by Teva and/or its Affiliates for calendar year 2004, and the Parties agree to add the following subsection (e) to Section 14.1 of the Agreement: “or (e) the review by Impax and/or Impax’s XXXXX of the calculation by Teva and/or its Affiliates of Net Sales and Impax Margin for calendar year 2004.” (7) The Parties agree to add the following sentence to the end of Section 11.6 of the Agreement: “The accounting firm shall sign a written confidentiality agreement reasonably satisfactory to Teva; provided, however, that Impax’s principal auditor shall not be required to sign such a written confidentiality agreement, but Impax shall be required to indemnify, defend and hold harmless Teva and its Affiliates from and against any and all losses, liabilities, damages, costs and expenses, including reasonable attorney’s fees and disbursements in connection with any and all suits, investigations, claims or demands resulting from or arising out of the disclosure by such principal auditor of any Confidential Information belonging to Teva or its Affiliates.” (8) The Parties agree to add the following sentence to the end of Section 11.7 of the Agreement: “The accounting firm shall sign a written confidentiality agreement reasonably satisfactory to Impax.” Please indicate your acceptance and agreement with the foregoing in the space provided below.
Teva Pharmaceuticals Curaçao N.V.
By: /s/ Ido Weinstein
Date: March 25, 2005
ACCEPTED AND AGREED
Impax Laboratories, Inc.
By: /s/ Barry R. Edwards
Date: March 25, 2005
4
Attachment A
SKU Product Name % 00093-7267-01 METFORMIN HCL ER TABLETS 500MG 100 XXXXX 00093-7267-10 METFORMIN HCL ER TABLETS 500MG 1000 XXXXX 00093-0976-01 METHYLPHENIDATE HCL ER TABLETS 18MG 100 XXXXX 00093-5210-01 OMEPRAZOLE CAPSULES 10MG 100 XXXXX 00093-5211-0l OMEPRAZOLE CAPSULES 20MG 100 XXXXX 00093-5211-56 OMEPRAZOLE CAPSULES 20MG 30 XXXXX 00093-5211-10 OMEPRAZOLE CAPSULES 20MG 1000 XXXXX 00093-5231-01 METHYLPHENIDATE HCL ER TABLETS 36MG 100 XXXXX 00093-5232-01 METHYLPHENIDATE HCL ER TABLETS 54MG 100 XXXXX 00093-5233-01 METHYLPHENIDATE HCL ER TABLETS 27MG 100 XXXXX 00093-5501-01 BUDEPRION SR TABLETS 100MG 100 XXXXX 00093-5502-01 BUDEPRION SR TABLETS 150MG 100 XXXXX 00093 -5703 -01 BUPROBAN TABLETS 150MG 100 XXXXX
Attachment B FORM OF CFO CERTIFICATION Reference is made to the Strategic Alliance Agreement between Impax Laboratories, Inc. (“Impax”) and Teva Pharmaceuticals Curaçao N.V. ( “Teva”) effective June 27, 2001, as amended (“Agreement”). This certification is being delivered in connection with the report of Teva for the period commencing on through and including (the “Reporting Period”). Pursuant to Section 11.3 [or Section 1.4.26] of the Agreement, the undersigned hereby certifies that: 1. Attached hereto as Schedule I is the report (the “Report”) required by Section 11.3 [or Section 1.4.26] of the Agreement for the Reporting Period, which sets forth the Net Sales, Manufacturing Costs, Impax Margin or Revised Impax Margin, as defined in the Agreement, for each Product sold by Teva and/or its Affiliates in the Territory during the Reporting Period [or “true-up” reconciliation]; and 2. To the best of my knowledge and belief, all information included in the Report is complete and accurate in all material respects. IN WITNESS WHEREOF, I have made and executed this certificate this day of , 20 .
BY: Name: Title:
EXHIBIT 10.13.4 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
AMENDMENT TO STRATEGIC ALLIANCE AGREEMENT This AMENDMENT dated as of January 24, 2006 (the “ Amendment ”) to the Strategic Alliance Agreement dated as of June 27, 2001, as amended to date , by and between TEVA PHARMACEUTICALS CURACAO N.V. , a Netherlands Antilles company (“Teva”), and IMPAX LABORATORIES, INC. , a Delaware corporation (“Impax”), (the “ Strategic Alliance Agreement ”). All capitalized terms used herein, unless otherwise defined herein, shall have the respective meanings set forth in the Strategic Alliance Agreement.
WITNESSETH WHEREAS, Impax and Teva are concurrently herewith entering into that certain agreement with ANCHEN PHARMACEUTICALS, INC. , a California corporation , respecting the Marketing in the U.S. of Bupropion Products (the “Anchen Agreement”); and WHEREAS, Teva and Impax desire to hereby amend the Strategic Alliance Agreement so as to reflect their agreement under and arising out of the Anchen Agreement. NOW, THEREFORE, in consideration of the foregoing premises and the mutual representations, warranties, and covenants set forth in this Amendment and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: Section 1.1. Amendments to Definitions . (a) Section 1.4 of the Strategic Alliance Agreement is hereby amended by adding the following defined terms: “Anchen” — shall mean Anchen Pharmaceuticals, Inc., a California corporation. “Anchen Agreement” — shall mean that certain agreement, dated the same date hereof, among Anchen, Teva and Impax, respecting the Marketing in the U.S. of Bupropion Products . “Anchen Product(s)” - shall mean the product(s) Marketed by Teva and /or its Affiliates pursuant to the Anchen Agreement under Anchen’s ANDA No. 77-284 in the 150mg and 300mg strengths (the “150mg Anchen Product” and “300mg Anchen Product,” respectively).
“Bupropion Product(s)” — shall mean the Anchen Product(s) and the Impax Product(s) in the 150mg and 300mg strengths (the “150mg Bupropion Product(s),” and “300mg Bupropion Product(s),” respectively). “Impax Expense Percentage” - shall have the meaning set forth in Section 15.6. ” Impax Patent Litigation ” — shall mean Biovail Laboratories International SRL v. Impax Laboratories, Inc. , Civil Action No. 05- 1085 pending in the United States District Court for the Eastern District of Pennsylvania. “Impax Product(s)” - shall mean the product(s) Marketed under Impax’s ANDA No. 77-415 in the 150mg and 300mg strengths (the “150mg Impax Product” and “300mg Impax Product,” respectively). “Launch Quantities” — shall mean XXXXX tablets of the 300mg Impax Product. (b) Section 1.4.20 of the Strategic Alliance Agreement is hereby amended by adding the following at the end thereof: “; provided further, however, that with respect to the 300mg Bupropion Products, and, in the event the Anchen Agreement is amended to include the 150mg Bupropion Products, with respect to the 150mg Bupropion Products, such amount shall be equal to (a) for the Impax Products, XXXXX percent ( XXXXX %) of the Profit, increasing to XXXXX percent ( XXXXX %) of the Profit upon the later of (i) the date of a final, non-appealable order issued by a U.S. court of competent jurisdiction in relation to the Impax Patent Litigation, that the Impax Products do not infringe each of the patents at issue in the Impax Patent Litigation or that such patents are invalid or unenforceable, and (ii) the date of the last quarterly payment by Teva pursuant to Section 3.5 of the Anchen Agreement; and (b) for the Anchen Products, XXXXX percent ( XXXXX %) of the Profit.” (c) Section 1.4.21 of the Strategic Alliance Agreement is hereby amended by adding the following at the end thereof: “; and in addition to the foregoing, all amounts paid by Teva and/or its Affiliates to Anchen and/or its Affiliates, and/or their respective directors, officers, shareholders, employees, servants and agents, pursuant to Sections 8.1(d) and 8.1(e) (as related to patent claims) of the Anchen Agreement.” (d) Section 1.4.32 of the Strategic Alliance Agreement is hereby amended by adding the following at the end thereof: “The “Bupropion (once daily)” Tier 3 Product shall consist of the Impax Products and the Anchen Products.” (e) Section 1.4.33 of the Strategic Alliance Agreement is hereby amended by adding the following at the end thereof:
2
“; provided, however, that with respect to the 300mg Bupropion Products and, in the event the Anchen Agreement is amended to include the 150mg Bupropion Products, with respect to the 150mg Bupropion Products, it shall be an amount equal to XXXXX , except to the extent the payment obligations referenced in such Sections are expressly provided for under this Agreement.” Section 1.2. Additional Amendments. (a) Section 11.1 of the Strategic Alliance Agreement is hereby amended by adding the following after the first sentence thereof: “; provided, however, that with regard to the Launch Quantities of each Impax Product, in the event Impax may not lawfully, or Teva has instructed Impax not to, deliver such Impax Product to Teva, then Impax shall store such Impax Product in Impax’s warehouse until receipt of further instructions from Teva.” (b) Section 11.2.1 of the Strategic Alliance Agreement is hereby amended by: (i) adding the following after the first sentence thereof: “; provided, however, that in the event Impax is required to store the Launch Quantities in its warehouse pursuant to Section 11.1 of this Agreement, then Impax shall invoice Teva when such Launch Quantities are shipped to its warehouse.”; (ii) adding the following after the second sentence thereof: “, or the receipt of Impax’s invoice, if the invoice is for Launch Quantities stored in Impax’s warehouse.” (iii) adding the following at the end thereof: “Teva shall, within thirty (30) days of receipt of Impax’s invoice therefor, reimburse Impax XXXXX klucel required for the manufacture of the Launch Quantities, XXXXX .” (c) Section 11.3 of the Strategic Alliance Agreement is hereby amended by adding the following at the end thereof: “ XXXXX .”
3
(d) The phrase “or under the Anchen Agreement” is hereby added at the end of Sections 14.1(a) and 14.2(a) of the Strategic Alliance Agreement and after the word “hereunder” in Section 14.3 of the Strategic Alliance Agreement. (e) Section 15.5 of the Strategic Alliance Agreement is hereby amended by adding the following after the second sentence thereof: “Notwithstanding the foregoing, with respect to the Impax Products, Teva shall have the obligation to assume direction and control of any Intellectual Rights Suit and the defense of claims arising therefrom.” (f) Section 15.6 of the Strategic Alliance Agreement is hereby amended by adding the following after the first sentence thereof: “; and provided further, however, that with respect to Intellectual Rights Legal Expenses incurred from and after the date hereof in connection with and/or arising out of the Impax Patent Litigation, an Intellectual Rights Suit related to the Anchen Products, or Sections 8.1 (d) or 8.1(e) of the Anchen Agreement, Impax shall bear that XXXXX payable with respect to the 300mg Bupropion Products during the first six months following the Launch Date or, in the event the Anchen Agreement is amended to include the 150mg Bupropion Products, XXXXX payable with respect to the Bupropion Products during the first six months following the Launch Date of each Bupropion Product (the “Impax Expense Percentage”) (not to exceed, however, the aggregate Impax Margins paid or payable by Teva to Impax hereunder with respect to the Bupropion Products) and Teva shall bear the balance of all such Intellectual Rights Legal Expenses.” (g) Section 16 of the Strategic Alliance Agreement is hereby amended by: (i) adding the following after the first sentence thereof: “; provided, however, that in connection with the Bupropion Products, XXXXX ”; and (ii) adding the following at the end thereof: “If legal proceedings are commenced by a third party against any such Regulatory Authority seeking to delay the final Approval and/or Launch Date of the Impax Products, Impax and Teva shall cooperate with one another in taking all reasonable action in defense of such proceedings, including intervention in such proceedings, and shall similarly jointly direct and control such action. XXXXX .”
4
(h) The following provisions are hereby added to the Strategic Alliance Agreement: “Section 2.20 Marketing of the Bupropion Products. 2.20.1 In the event that on or before April 15, 2006, all of the following conditions are met with respect to the 300mg Bupropion Product: (i) Impax’s ANDA no. 77-415 is eligible for final Approval upon the relinquishment by Anchen of its First to File Exclusivity for its ANDA no. 77-284 or the selective waiver by Anchen of such First to File Exclusivity in favor of Impax’s ANDA no. 77-415; (ii) Teva believes in good faith, based upon communications with the FDA or a court order, that Impax’s ANDA no. 77-415 is not subject to a thirty (30)-month stay pursuant to 21 U.S.C. Section 355(j)(5)(B)(iii); and (iii) Impax has, in accordance with Teva’s firm purchase orders, manufactured and available for delivery to Teva and/or its Affiliates Launch Quantities of the 300mg Impax Product, then, if and when Teva and/or its Affiliates decide to Market such 300mg Bupropion Product, it shall Market the 300mg Impax Product. 2.20.2 If conditions (i), (ii) and (iii) under Section 2.20.1 are not met on or before April 15, 2006 with respect to the 300mg Bupropion Product, or alternatively the 300mg Impax Product is not available for Marketing in accordance with Applicable Law, then notwithstanding anything contained in this Agreement to the contrary, and subject to the provisions of Section 2.21 of this Agreement, Teva and/or its Affiliates shall have sole discretion to decide from time to time whether to Market the 300mg Impax Product and/or the 300mg Anchen Product, and if Teva and/or its Affiliates decide to Market the 300mg Anchen Product, it may obtain all quantities of such Anchen Product it requires from Anchen or its permitted designee. 2.20.3 Notwithstanding anything contained in this Agreement to the contrary, and subject to the provisions of Section 2.21 of this Agreement, in the event the Anchen Agreement is amended to include the 150mg Bupropion Products, Teva and/or its Affiliates shall have sole discretion to decide from time to time whether to Market the 150mg Impax Product and/or the 150mg Anchen Product, and if Teva and/or its Affiliates decide to Market the 150mg Anchen Product, it may obtain all quantities of such Anchen Product it requires from Anchen or its permitted designee.” “Section 2.21 For each of the 300mg Bupropion Product, and, in the event the Anchen Agreement is amended to include the 150mg Bupropion Products, the 150mg Bupropion Product, if Teva and/or its Affiliates Market the Anchen Product pursuant to the provisions of this Agreement, then the following shall apply:
5
2.21.1 Within one hundred and thirty-five (135) days following the date of the first commercial sale by Teva and/or its Affiliates of such Anchen Product, Teva shall provide Impax with written notice advising whether Teva and/or its Affiliates intend to either: (a) continue Marketing such Anchen Product, or (b) cease Marketing such Anchen Product not later than one hundred and eighty one (181) days from the date of such first commercial sale, and thereafter commence Marketing the same strength Impax Product. If Teva does not provide such written notice to Impax, it shall be deemed as if it provided notice advising of the intent to continue Marketing such Anchen Product. 2.21.2 In the event Teva has or is deemed to have provided notice under Section 2.21.1 above of the intent to continue Marketing such Anchen Product, then from and after such one hundred and eighty first (181) day: (a) the grant to Teva with regard to the Marketing in the U.S. of the same strength Impax Product shall be deemed nonexclusive, and the provisions of Sections 2.3 — 2.6 and 2.11 of this Agreement shall no longer apply to Teva and/or Impax or their respective Affiliates with regard to such Impax Product; provided, however, in any event, Impax shall remain obligated to supply Teva’s and/or its Affiliates’ requirements of such Impax Product; and (b) Teva and/or its Affiliates may decide from time to time in their sole discretion to Market such Impax Product, in which event Impax shall supply the Impax Product pursuant to firm purchase orders at a purchase price equal to XXXXX percent ( XXXXX %) of the applicable Manufacturing Costs, and such Impax Products shall be deemed Anchen Products for purposes of determining the Impax Margin payable with respect thereto. 2.21.3 In the event Teva has provided notice under Section 2.21.1 above of the intent to commence Marketing the applicable Impax Product, then Teva and/or its Affiliates shall cease Marketing the same strength Anchen Product not later than such one hundred and eighty first (181) day, and shall commence Marketing such Impax Product subject to the terms and conditions of this Agreement (without regard to Subsection 2.21.2(a) and (b) above). In the event Teva recommences Marketing such Anchen Product after providing such notice, Subsections 2.21.2(a) and (b) above shall apply from and after the date Teva has recommenced Marketing such Anchen Product.” (i) The provisions of Sections 2.7, 2.8, 2.10, and 11.5 of the Strategic Alliance Agreement shall be of no force or effect with respect to the 300mg Bupropion Products and, in the event the Anchen Agreement is amended to include the 150mg Bupropion Products, the 150mg Bupropion Products. (j) Attachment A to the amendment dated March 24, 2005 to the Strategic Alliance Agreement is hereby amended with respect to the 300mg Bupropion Products, and, in the event the Anchen Agreement is amended to include the 150mg Bupropion Products, with respect to the 150mg Bupropion Products, by adding the following at the end thereof:
150mg Bupropion Product XXXXX %, provided, however, that Teva may adjust such percentage pursuant to Section
6
1.4.26(b) on a quarterly basis
300mg Bupropion Product XXXXX %, provided, however, that Teva may adjust such percentage pursuant to Section 1.4.26(b) on a quarterly basis Section 1.3. Miscellaneous (a) Entire Agreement . The Strategic Alliance Agreement, as hereby amended, and the Anchen Agreement, and any attachments thereto, constitute the entire agreement between the Parties with respect to their subject matter and supersede all prior agreements, arrangements, dealings or writings between the Parties. With respect to the Bupropion Products, if and to the extent there is a conflict between the Anchen Agreement and the Strategic Alliance Agreement with respect to the rights and obligations of Teva and Impax between themselves, then the provisions of the Strategic Alliance Agreement, as amended hereby, shall control. This Amendment may not be amended or modified except in writing executed by the duly authorized representatives of both Parties. (b) Effect of Amendment . All of the terms and conditions contained in the Strategic Alliance Agreement, as hereby amended, shall remain in full force and effect. For the purposes of clarity, this Amendment shall have no force and effect with regard to the 150mg Bupropion Products unless and until the Parties enter into an agreement with Anchen respecting 150mg Bupropion Products, and, furthermore, whenever in this Amendment reference is made to an “amendment to the Anchen Agreement to include the 150mg Bupropion Products” the Parties hereby acknowledge and agree that such phrase is intended to include an amendment, supplement or similar agreement among the parties to the Anchen Agreement respecting the 150mg Bupropion Products. (c) Counterparts . This Amendment may be executed in two (2) or more counterparts, and each such counterpart shall be deemed to be an original instrument, but such counterparts together shall constitute one agreement.
[The remainder of this page is intentionally left blank]
7
IN WITNESS WHEREOF, each of the Parties has executed this Amendment, all on the day and year first above written.
TEVA PHARMACEUTICALS CURACAO N.V.
By: /s/ Ido Weinstein Name: Ido Weinstein Title: Managing Director
By: /s/ [Illegible] Name: MeesPierson Trust (Curacao) B.V. Title: Managing Director
IMPAX LABORATORIES, INC.
By: /s/ Barry R. Edwards Name: Barry R. Edwards Title: CEO
By: /s/ David S. Doll Name: David S. Doll Title: Sr. Vice President
8 EXHIBIT 10.13.5 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
EXECUTION COPY
February 9, 2007 Impax Laboratories, Inc. 30831 Huntwood Avenue Haywood, California 94544 Attention: Larry Hsu, Ph.D., President Dear Dr. Hsu: Reference is made to the Strategic Alliance Agreement, effective June 27, 2001, between Teva Pharmaceuticals Curacao N.V. (“Teva”) and Impax Laboratories, Inc. (“Impax”), as amended to date (collectively, the “Agreement”). All capitalized terms used herein, and not otherwise defined herein, shall have the respective meanings set forth in the Agreement. This shall confirm that effective as of the Effective Date, as defined in the Omnibus Agreement by and among Teva, Impax, Anchen Pharmaceuticals, Inc. (“Anchen”) and Biovail Laboratories International SRL (“Biovail”) dated the same date hereof concerning finished bupropion hydrochloride extended release tablets (“Omnibus Agreement”), Teva and Impax agree as follows (notwithstanding the foregoing, Teva and Impax hereby agree that if the Transaction Agreements (as defined in the Omnibus Agreement) become null and void pursuant to Section 3.4 of the Omnibus Agreement, this letter agreement shall also become null and void effective as of the date hereof): (1) The Impax Margin with respect to the Bupropion Products shall be revised and, accordingly, Section 1.1(b) of the amendment between Teva and Impax dated January 24, 2006 (“Amendment”) shall be deleted in its entirety and replaced with the following: “; provided further, however, that with respect to the Bupropion Products, such amount shall be equal to: (a) for the Impax Products, a percentage of the Profit according to the following chart:
EXECUTION COPY
PERIOD IMPAX MARGIN Commencing on the Launch Date and ending three (3) months from the Launch Date XXXXX % of the Profit
Commencing three (3) months from the Launch Date and ending six (6) months from the Launch Date XXXXX % of the Profit
Commencing six (6) months from the Launch Date and ending nine (9) months from the Launch Date XXXXX % of the Profit
Commencing nine (9) months from the Launch Date and ending twelve (12) months from the Launch Date XXXXX % of the Profit
Commencing twelve (12) months from the Launch Date and thereafter XXXXX % of the Profit (b) for the Anchen Products XXXXX , XXXXX percent ( XXXXX %) of the Profit.” (2) Teva hereby grants to Impax a non-exclusive sublicense (XXXXX) to all license rights granted from Biovail to Teva under the License Agreement by and between Teva and Biovail dated the same date hereof (the “Biovail License Agreement”) to the extent necessary for Impax to manufacture and supply to Teva the Impax Products to the extent such rights are provided to Teva in the Biovail License Agreement . (3) Teva shall have sole discretion to decide to Market at any time XXXXX . Further, Teva shall have the discretion to decide to XXXXX . In the event that Teva XXXXX for purposes of Section 2.21 of the Agreement, and for purposes of determining the Impax Margin payable with respect thereto. The term XXXXX . (4) Teva warrants that in the event that it launches a XXXXX .
EXECUTION COPY (5) Clause (2) of the proviso added by Section 1.1(e) of the Amendment, and revised by the letter agreement between Teva and Impax dated September 13, 2006 with respect to the 150mg Bupropion Products, shall be deleted in its entirety as it relates to the 150mg Bupropion Products and shall read as follows: “all amounts paid by Teva and/or its Affiliates to Anchen and Biovail (or their respective affiliates).” (6) Impax agrees on behalf of itself and its Affiliates that none of them shall, directly or indirectly, in any regulatory, judicial or other forum, challenge or contest the first to file exclusivity for the 150mg Ancben,Product. (7) Teva represents and warrants on behalf of itself and its Affiliates that it is unaware of any fact that would form a basis to challenge the first to file exclusivity for the 150mg Anchen Product. The Agreement, as amended by the foregoing, shall remain in full force and effect. This letter agreement shall be a legally binding agreement between Teva and Impax. This letter agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument.
(Remainder of page intentionally left blank)
This letter agreement may be delivered by facsimile transmission and receipt of facsimile copy of any party’s signature shall be considered to be receipt of an original copy thereof. Thank you. Sincerely,
Teva Phartmaceuticals Curasco N.V.
By: /s/ [Illegible] /s/ [Illegible]
Name:
Title: Managing Director Managing Director
Read and Agreed to:: This 9th day of February, 2007
Impax Laboratories, Inc.
By: /s/ Larry Hsu
Name: Larry Hsu
Title: CEO/President
EXHIBIT 10.14 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT dated as of June 18, 2002 between WYETH acting through its Wyeth Consumer Healthcare Division and IMPAX LABORATORIES, INC. for Loratadine/Pseudoephedrine Combination Tablets
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1 ARTICLE II GRANT OF RIGHTS; EXCLUSIVITY 7 ARTICLE III DEVELOPMENT ACTIVITIES AND PATENT LITIGATION 9 ARTICLE IV SUPPLY 13 ARTICLE V COMPLIANCE, QUALITY AND ENVIRONMENTAL 14 ARTICLE VI LICENSE PAYMENTS, ROYALTIES, AND SUPPLY PRICE 18 ARTICLE VII REPRESENTATIONS AND WARRANTIES 22 ARTICLE VIII INDEMNIFICATION AND INSURANCE 25 ARTICLE IX TERM AND TERMINATION 27 ARTICLE X CONFIDENTIALITY 33 ARTICLE XI TRADEMARKS; INFRINGEMENT OF IMPAX PATENTS 35 ARTICLE XII FORCE MAJEURE 36 ARTICLE XIII NOTICES 37 ARTICLE XIV MISCELLANEOUS 38 EXHIBIT A Impax Patents EXHIBIT B Pricing and Direct Manufacturing Costs EXHIBIT C Quality Agreement EXHIBIT D Adverse Experience Reporting Procedures
-i-
THIS DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT is made and entered into as of this 1 st day of June 2002, between WYETH, a corporation organized and existing under the laws of Delaware, acting through its Wyeth Consumer Healthcare Division and having an address at Five Giralda Farms, Madison, New Jersey 07940 (“WCH”) and IMPAX LABORATORIES, INC., a corporation organized and existing under the laws of Delaware and having an address at 3735 Castor Avenue, Philadelphia, Pennsylvania 19124 (“IMPAX”).
RECITALS WHEREAS , IMPAX has developed two loratadine/pseudoephedrine combination products and has filed an Abbreviated New Drug Application for each such product with the United States Food and Drug Administration; WHEREAS, WCH wishes to license IMPAX’s patents and technical information with respect to such loratadine/pseudoephedrine combination products and to have IMPAX supply WCH with such products for sale as over-the-counter drugs; and WHEREAS, IMPAX is experienced in the manufacture of pharmaceutical products and is willing to grant such license and supply WCH with such products, all on the terms and subject to the conditions set forth herein. NOW, THEREFORE , in consideration of the mutual covenants and agreements set forth herein, and for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I DEFINITIONS 1.1 Definitions . As used in this Agreement, the following capitalized terms have the meanings indicated below: 1.1.1 “Affiliate” means, in the case of either Party, any corporation, joint venture, or other business entity which directly or indirectly controls, is controlled by, or is under common control with that Party. “Control,” as used in this Section 1.1.1, means having the power to direct, or cause the direction of, the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, for purposes of this Agreement, the term “Affiliate” does not include entities in which a Party or its Affiliates owns a majority of the ordinary voting power to elect a majority of the board of directors but is restricted from electing such majority by contract or otherwise, until such time as such restrictions are no longer in effect. 1.1.2 “ANDA” means an Abbreviated New Drug Application, as defined in the FD&C Act and applicable FDA rules and regulations.
-i-
1.1.3 “Batch” means a Manufacturing run of Product which yields approximately one million two hundred thousand (1,200,000) tablets of Product, as the same may be amended from time to time by the mutual written agreement of the Parties. 1.1.4 “Certificate of Analysis” means the document identifying the results of the Methods of Analysis for a specific Batch of Product in the form agreed to by the Parties. 1.1.5 “CMC” has the meaning set forth in Section 3.1.1(ii). 1.1.6 “Commercially Reasonable Efforts” means efforts and resources normally used by a Party for a compound or product owned by it or to which it has rights, which is of similar market potential at a similar stage in its product life, taking into account the competitiveness of the marketplace, the proprietary position of the compound or product, the regulatory structure involved, the profitability of the applicable products, and other relevant factors. It is anticipated that the level of effort and resources may change at different times during the product life cycle of a compound or product. 1.1.7 “Competing Product” has the meaning set forth in Section 2.3. 1.1.8 “Confidential Information” means either WCH Confidential Information, IMPAX Confidential Information or both, as the context requires. 1.1.9 “Contract Year” means the period from the Effective Date through May 31, 2003 and each consecutive twelve (12) month period thereafter during the Term. 1.1.10 “Control” or “Controlled” in the context of intellectual property rights means rights to intellectual property sufficient to allow a grant of rights to a Party. 1.1.11 “Direct Development Cost” means (a) costs directly attributable to an activity (i.e., those costs which vary with such activity), including, but not limited to, direct labor and benefit expenses for such activity and consumable bulk and other materials, as determined in accordance with United States generally accepted cost accounting practices consistently applied, plus (b) fixed overhead costs allocable to the activity, including, but not limited to, direct benefit and labor expenses for technical services and support services, depreciation, maintenance and repairs and insurance costs associated with such activity, as determined in accordance with United States generally accepted cost accounting practices consistently applied. In no event shall any costs included in Direct Manufacturing Costs be included in Direct Development Costs. 1.1.12 “Direct Manufacturing Cost” means (a) costs directly attributable to Manufacturing, quality assurance and quality control related to a unit of Product on a per tablet basis, including, but not limited to, direct labor and benefit expenses for Manufacturing, and consumable bulk and other product materials, as determined in accordance with United States generally accepted cost accounting practices consistently applied, plus (b) fixed Manufacturing overhead costs allocable to the Product based on the actual percentage utilization (including start-up
-2-
and shut-down time) of the capacity of the manufacturing facility, including, but not limited to, direct benefit and labor expenses for technical services and support services, depreciation, maintenance and repairs and insurance costs associated with such utilization of the manufacturing facility, as determined in accordance with United States generally accepted cost accounting practices consistently applied. In no event shall charges for (i) idle capacity or underutilized facilities or (ii) any Direct Development Costs be included in Direct Manufacturing Costs. 1.1.13 “D-12 Product” means a twelve (12) hour extended release tablet containing 5 mg Loratadine and 120 mg Pseudoephedrine meeting the Specifications therefor. 1.1.14 “D-24 Product” means a twenty-four (24) hour extended release tablet containing 10 mg Loratadine and 240 mg Pseudoephedrine meeting the Specifications therefor. 1.1.15 “Effective Date” means the date determined pursuant to Section 14.10. 1.1.16 “Exclusive Territory” means the world, except the countries of China (including Hong Kong), Taiwan, Singapore, Malaysia, The Philippines, Indonesia, Myanmar, Brunei, Cambodia, Vietnam, Thailand, Laos and the Semi-Exclusive Territory. 1.1.17 “Facility” means IMPAX’s facilities located at Hayward, California or any other facility located in the United States approved in writing by WCH for the Manufacture of Product, such approval not to be unreasonably withheld or delayed. 1.1.18 “FDA” means the United States Food and Drug Administration or any successor entity thereto. 1.1.19 “FD&C Act” means the Federal Food, Drug and Cosmetic Act, as the same may be amended or supplemented from time to time. 1.1.20 “FTO Status” means that (i) final Regulatory Approval (which includes without limitation WCH’s consumer labeling and packaging) and, if applicable, Pricing Approval to market Product have been obtained, (ii) all legal claims, actions, proceedings and appeals with respect to a Product, including without limitation the Patent Litigations, have been finally resolved in WCH’s and in IMPAX’s favor or discontinued, and (iii) all relevant patents have expired, been declared invalid or determined by WCH not to be infringed by a Product. 1.1.21 “Good Clinical Practice” or “GCP” means the then current standards for clinical trials for pharmaceuticals, as set forth in the FD&C Act and applicable regulations promulgated thereunder, as amended from time to time, and such standards of good clinical practice as are required by the laws and regulations of the European Union and other Regulatory Authorities in countries in which Products are intended to be sold, to the extent such standards are not inconsistent with GCP under the FD&C Act. 1.1.22 “Good Laboratory Practice” or “GLP” means the then current standards for laboratory activities for pharmaceuticals, as set forth in the FD&C Act and applicable
-3-
regulations promulgated thereunder, as amended from time to time, and such standards of good laboratory practice as are required by the laws and regulations of the European Union and other Regulatory Authorities in countries in which Products are intended to be sold, to the extent such standards are not inconsistent with GLP under the FD&C Act. 1.1.23 “Good Manufacturing Practice” or “GMP” means the then current standards for the manufacture of pharmaceuticals, as set forth in the FD&C Act and applicable regulations promulgated thereunder, as amended from time to time, and such standards of good manufacturing practice as are required by the applicable laws and regulations of the European Union and other Regulatory Authorities in countries in which Products are intended to be sold, to the extent such standards are not inconsistent with GMP under the FD&C Act. 1.1.24 “Identity Criteria” means the XXXXX for Loratadine and Product provided in writing by WCH to IMPAX, as the same may be amended from time to time by the mutual written agreement of the Parties. 1.1.25 “Identity Tests” means the XXXXX provided in writing by WCH to IMPAX, as the same may be amended from time to time by the mutual written agreement of the Parties. 1.1.26 “IMPAX Confidential Information” means all Technical Information pertaining to IMPAX’s business or its Manufacturing operations disclosed by IMPAX to WCH hereunder. It is understood and agreed that nothing in this Agreement shall require IMPAX to disclose to WCH any of Schering Corporation’s confidential information or any other confidential information or documentation that pertains solely to Schering Corporation and IMPAX hereby agrees not to disclose any such information to WCH. 1.1.27 “IMPAX Patents” shall mean those Patents owned or Controlled by IMPAX during the Term that claim a Product, its manufacture or method of use, including the Patents which are set forth on Exhibit A hereto. 1.1.28 “Indemnified Party” has the meaning set forth in Section 8.1.3. 1.1.29 “Indemnifying Party” has the meaning set forth in Section 8.1.3. 1.1.30 “Launch” means the date on which Product in the OTC Field is sold by WCH or one of its Affiliates for the first time to a Third Party for commercial distribution in a particular country in the Territory. 1.1.31 “Loratadine” means pharmaceutical active ingredient with the following chemical composition: ethyl 4-(8-chloro-5, 6-dihydro- 11H-benzo [5,6] cyclohepta [1,2-b] pyridin-11-ylid-ene)-1 piperidinecarboxylate. 1.1.32 “Manufacture,” “Manufactured” or “Manufacturing” means all activities involved in the production of Products to be supplied to WCH or its Affiliates hereunder, including,
-4-
without limitation, the preparation, formulation, finishing, testing, packaging, storage and labeling of Products and the handling, storage and disposal of any residues or wastes generated thereby. 1.1.33 “Materials” means all materials, including, without limitation, all raw materials, ingredients, packaging supplies and labels, required for the Manufacture of Products. 1.1.34 “Methods of Analysis” means the regulatory analytical test methods for the D-12 Product set forth in ANDA 76-050 and for the D-24 Product set forth in ANDA 75-989, as the same may be amended from time to time in accordance with the provisions of Section 5.3. 1.1.35 “NDA” means a New Drug Application, as defined in the FD&C Act, and applicable FDA rules and regulations. 1.1.36 “Net Sales” means the gross invoice price for Product sold by WCH or its Affiliates (or sublicensees pursuant to Section 2.1.2) to a Third Party customer less the reasonable and customary accrual-basis deductions from such gross amounts for: (i) normal and customary trade, cash and other discounts, allowances and credits actually allowed and taken directly with respect to sales of Product; (ii) credits or allowances actually granted for damaged goods, returns or rejections of Product; (iii) sales or similar taxes (including duties or other governmental charges levied on, absorbed or otherwise imposed directly on the sales of Product, including, without limitation, value added taxes or other governmental charges otherwise measured by the billing amount) which are included in billing amount; (iv) uncollectible accounts; (v) charge back payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies and purchasers and reimbursers or to trade customers, including but not limited to, wholesalers and chain and pharmacy buying groups; and (vi) rebates (or equivalents thereof) that are granted to or charged by national, state, provincial or local governmental authorities. Such amounts shall be determined from the books and records of WCH, its Affiliates and their respective sublicensees pursuant to Section 2.1.2 maintained in accordance with U.S. generally accepted accounting principles consistently applied. Sales between or among WCH, its Affiliates and its sublicensees pursuant to Section 2.1.2 shall be excluded from the computation of Net Sales if such Affiliates or sublicensees are not end-users, but Net Sales shall include the subsequent final sales to Third Parties by any such Affiliates or sublicensees. 1.1.37 “OTC Field” means the area of non-prescription (i.e., not requiring, by law or regulation, a prescription from a medical doctor) and/or over-the-counter sales for all human pharmaceutical uses. 1.1.38 “Party” means WCH or IMPAX or both, as the context requires. 1.1.39 “Patent Litigations” has the meaning set forth in Section 3.2. 1.1.40 “Patents” means all patents and patent applications, and all additions, divisions, continuations, continuations in-part, pipeline protection, substitutions, reissues,
-5-
reexamination certificates, extensions, registrations, patent term extensions, supplementary protection certificates and renewals of any of the above. 1.1.41 “Person” means any natural person, corporation, general partnership, limited partnership, proprietorship, other business organization, trust, union, association or governmental authority. 1.1.42 “PPI Adjustment” has the meaning set forth in Section 6.3.2. 1.1.43 “Pricing Approval” means any approval for price or reimbursement as may be necessary or appropriate as a prerequisite for marketing any Product in the OTC Field in a particular country of the Territory. 1.1.44 “Product” means D-12 Product or D-24 Product or both, as the context requires. 1.1.45 “Pseudoephedrine” means the pharmaceutical active ingredient known as pseudoephedrine sulfate, USP. 1.1.46 “Recall” means any action by any Party to recover title to or possession of Product sold or shipped to Third Parties or the failure by a Party to sell or ship Product to Third Parties that would have been subject to recall if it had been sold or shipped. 1.1.47 “Regulatory Approval” means all authorizations by the competent Regulatory Authorities which are required for the manufacture, marketing, promotion, pricing, sale and use of a Product in a given country or regulatory jurisdiction in the Territory. 1.1.48 “Regulatory Authority” means any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity involved in the granting of Regulatory Approval and/or Pricing Approval for Products in a country in the Territory. 1.1.49 “Regulatory Documents” means all regulatory submissions, correspondence, and written descriptions and written accounts of conversations, with Regulatory Authorities, Regulatory Approvals and Pricing Approvals. 1.1.50 “Related Infringement” has the meaning set forth in Section 11.2.1. 1.1.51 “Rolling Forecast” has the meaning set forth in Section 4.2. 1.1.52 “Seizure” means any action by FDA or any other Regulatory Authority to detain or destroy Product or prevent the release of Product. 1.1.53 “Semi-Exclusive Territory” means the countries of Japan and Korea; “semi-exclusive license” means that IMPAX may either Manufacture and sell Products for the OTC Field
-6-
in its own name in each country in the Semi-Exclusive Territory or license one (1) other Person (other that WCH) in each country of the Semi- Exclusive Territory to make, have made, market, promote, use, distribute, sell, have sold, import and export Products for the OTC Field. 1.1.54 “Specifications” means the specifications for the D-12 Product set forth in ANDA 76-050 and for the D-24 Product set forth in ANDA 75-989, as the same may be amended from time to time in accordance with the provisions of Section 5.3. 1.1.55 “Technical Information” means (a) techniques and data, including ideas, inventions (including patentable inventions), practices, methods, knowledge, know-how, trade secrets, skill, experience, documents, apparatus, clinical and regulatory strategies, studies, test data, including pharmacological, toxicological and clinical test data (including bioequivalence studies), chemistry manufacturing and control data, analytical and quality control data, manufacturing, patent data or descriptions relating to any Product, and (b) chemical formulations, compositions of matter, product samples and assays relating to any Product. 1.1.56 “Term” has the meaning set forth in Section 9.1. 1.1.57 “Territory” shall mean both the Exclusive and Semi-Exclusive Territory. 1.1.58 “Third Party” means any Person other than WCH, IMPAX and their respective Affiliates. 1.1.59 “WCH Confidential Information” means all Technical Information and all information and data pertaining to WCH’s business or products disclosed by WCH to IMPAX hereunder, including, without limitation, marketing and sales plans, artwork, formats, logos, drawings, customer lists and operating procedures and all ordering and sales information. 1.1.60 “$” means United States dollars. 1.2 Construction of Certain Terms and Phrases . Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (ii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement; (iv) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; and (v) Article and Section headings shall not affect the meaning or construction of any provision of this Agreement.
ARTICLE II GRANT OF RIGHTS; EXCLUSIVITY 2.1 Grant of License . 2.1.1 IMPAX hereby grants to WCH an exclusive license within the Exclusive Territory and a semi-exclusive license within the Semi- Exclusive Territory, both with the right to
-7-
grant sublicenses, under the IMPAX Patents and IMPAX’s Technical Information and Regulatory Documents, to market, promote, use, distribute, sell, have sold, import and export Products for the OTC Field during the Term of this Agreement. WCH shall notify IMPAX in writing prior to having the name of any Third Party on a Product label. Notwithstanding the exclusive license set forth above, IMPAX shall be permitted to Manufacture and sell the D-12 Product to Schering Corporation in the United States, its territories and possessions. 2.1.2 IMPAX hereby grants WCH an exclusive license within the Exclusive Territory and a semi-exclusive license within the Semi- Exclusive Territory, both with the right to grant sublicenses, under the IMPAX Patents and IMPAX’s Technical Information and Regulatory Documents, to make and have made Products for the OTC Field during the Term under the circumstances described in Section 2.2. IMPAX shall provide WCH with a hard copy of IMPAX’s Technical Information, ANDA 76-050, ANDA 75-989 and Regulatory Documents relating to the Products and WCH shall have the right to file such Technical Information, ANDAs and Regulatory Documents with Regulatory Authorities, and reference the same in WCH’s applications for Regulatory Approval, as necessary or advisable to obtain Regulatory Approval of Products. Upon WCH’s request, IMPAX agrees to execute such further documents requested by WCH evidencing WCH’s rights hereunder. The right to grant sublicenses of the rights granted under this Section 2.1.2 to Affiliates and Third Parties shall be upon IMPAX’s prior written consent, which shall not be unreasonably withheld or delayed; provided however that any sublicensee under this Section 2.1.2 must agree in writing to be bound by WCH’s obligations under this Agreement including but not limited to Article X and Section 6.2. Notwithstanding the exclusive license set forth above, IMPAX shall be permitted to grant Schering Corporation a license under the IMPAX Patents and IMPAX’s Technical Information and Regulatory Documents to make and have made the D-12 Product in the United States, its territories and possessions. 2.2 Right to Manufacture . WCH shall have the right to manufacture Products pursuant to the license set forth in Section 2.1.2 at any time after (i) the fifth anniversary of the Launch of a Product in the United States by WCH upon six (6) months’ prior written notice to IMPAX or (ii) IMPAX notifies WCH pursuant to the last sentence of Section 5.3.2 that a change required by the FDA or other Regulatory Authority creates an unreasonable burden on IMPAX or results in the continuing compliance by IMPAX with this Agreement uneconomical, so long as WCH is not in breach of this Agreement as of the date such notice is delivered. In such event, IMPAX shall furnish to WCH or its designee, on a non-exclusive basis, all Technical Information relating to the Manufacture of Products, including all manufacturing know-how, that is reasonably necessary to enable WCH to make and have made Products and provide all technical assistance, at WCH’s cost, reasonably requested by WCH. 2.3 Exclusivity . During the Term, IMPAX and its Affiliates shall only sell Product for the OTC Field in the Exclusive Territory to WCH and shall not market, promote, use, distribute, sell, have sold, import, export, make or have made either a twelve-hour or twenty-four hour, extended release Loratadine and Pseudoephedrine combination product (other than the Products) which is, in dosage strength, identical to either Product (a “Competing Product”) to a Third Party for the OTC Field in the Exclusive Territory. Notwithstanding the foregoing,
-8-
IMPAX shall be permitted (i) to Manufacture and sell D-12 Product to Schering Corporation in the United States, its territories and possessions; and (ii) to market, promote, use, distribute, sell, have sold, import, export, make or have made a Competing Product that IMPAX or its Affiliate acquires through an acquisition, divestiture, merger, joint venture or other business combination, provided that such Competing Product did not account for more than seventy percent (70%) of the sales of the business acquired by IMPAX or its Affiliate in such transaction during the twelve (12) month period immediately preceding the consummation of such transaction. 2.4 Non -Compete . During the Term, neither WCH nor its Affiliates shall market, promote, use, distribute, sell, have sold, import, export, make or have made a Competing Product for the OTC Field in the Territory. Notwithstanding the foregoing, WCH and its Affiliates shall be permitted to market, promote, use, distribute, sell, have sold, import, export, make or have made a Competing Product acquired by WCH or its Affiliates through an acquisition, divestiture, merger, joint venture or other business combination, provided that such Competing Product did not account for more than seventy percent (70%) of the sales of the business acquired by WCH or its Affiliate in such transaction during the twelve (12) month period immediately preceding the consummation of such transaction. 2.5 IMPAX Patents . IMPAX shall be responsible, at its cost and expense, for prosecuting to issuance all patent applications within the IMPAX Patents, for filing and prosecuting all patent reissues and re-examinations, for applying for and obtaining any available patent term extensions and supplementary protection certificates, and for paying all maintenance fees, on a large-entity basis, on all patent applications and patents which constitute IMPAX Patents under this Agreement. 2.6 Reservation of Rights . All rights under the IMPAX Patents, IMPAX’s Technical Information, IMPAX Confidential Information and IMPAX’s Regulatory Documents not expressly granted herein to WCH are reserved to IMPAX.
ARTICLE III DEVELOPMENT ACTIVITIES AND PATENT LITIGATION 3.1 Development and Registration Responsibilities . 3.1.1 Prior to the Effective Date IMPAX has performed the following development and registration activities: (i) designed, conducted and met all bioequivalency test requirements for Regulatory Approval by FDA in accordance with FDA guidance documents;
(ii) designed and conducted all dosage form, formulation, process, and chemistry manufacturing and control (“CMC”) and related technical studies on Products, including preparation of dosage form CMC
-9-
regulatory documents required for FDA review and approval of the Products; and (iii) FDA acceptance for filing of ANDA No. 76-050 and ANDA No. 75-989 with FDA seeking approval of the D-12 Product and D-24 Product, respectively, as generic prescription drugs and is prepared for FDA ’s pre -approved inspection. 3.1.2 At WCH’s request, IMPAX shall supplement and/or amend ANDA No. 76-050 and ANDA No. 75-989 to include WCH’s consumer labeling and packaging and any other documentation necessary or advisable to support WCH’s consumer labeling and packaging for the OTC Field for the Products. IMPAX shall, at its expense, (i) complete the construction, installation, commissioning, IQ, OQ and PQ of all Facilities and all equipment necessary for Manufacture of Products and (ii) conduct all scale up and validation activities for FDA approval of Products. 3.1.3 IMPAX shall own and maintain ANDA No. 76-050 and ANDA No. 75-989 and shall use its Commercially Reasonable Efforts to pursue, and at its expense perform any additional development activities to obtain, final FDA approval of these ANDAs for the OTC Field. WCH may submit applications for Regulatory Approval for Products in the Territory as it deems advisable (including NDAs); provided that WCH shall not be required to make any such submissions for Regulatory Approval unless it determines to do so in its sole discretion. Except for ANDA No. 76-050 and ANDA No. 75-989, WCH shall file, own and maintain all other submissions for Regulatory Approval and Pricing Approval of Products for the OTC Field in the Exclusive Territory. IMPAX shall be responsible for providing the CMC and related technical components of such submissions, as jointly determined by the Parties. Upon WCH’s request and at WCH’s cost, IMPAX shall use Commercially Reasonable Efforts to provide additional registration batches (including stability and analytical testing) and required documentation to support any NDA that WCH may submit in the United States. WCH shall bear the full cost of any additional studies required for Regulatory Approval of the Products outside of the United States. To the extent that IMPAX undertakes any additional development work which is not required for FDA approval of a Product, at WCH’s written request, to support Regulatory Approval in the Territory outside the United States, WCH shall reimburse IMPAX for the Direct Development Cost thereof. 3.1.4 The Parties shall cooperate with, and assist, each other in connection with their activities hereunder including without limitation the protocol for scale up and validation and addressing regulatory questions, and preparing updates and supplements to regulatory filings for Product for the OTC Field in the Territory. IMPAX shall be responsible for all communications with FDA regarding ANDA No. 76-050 and ANDA No. 75-989. WCH shall be responsible for all communications with the FDA and other Regulatory Authorities regarding applications for Regulatory Approval submitted by WCH and post-Regulatory Approval regulatory requirements for Product marketed by WCH for the OTC Field in the Territory, including pharmacovigilance and Adverse Drug Experience reporting, unless otherwise agreed in advance in writing by the Parties.
-10-
3.1.5 Each Party represents that it has complied and shall comply with all applicable GLP, GCP and GMP in the conduct of the development activity performed by it for the Products. 3.1.6 Upon WCH’s request, IMPAX shall use Commercially Reasonable Efforts to eliminate animal derived materials from the Products and WCH shall reimburse IMPAX for the actual costs incurred by IMPAX ( provided that such are approved in writing by WCH prior to being incurred by IMPAX) in connection therewith. 3.2 Patent Litigations . S chering Corporation (“Schering”) has instituted lawsuits against IMPAX for patent infringement with respect to the D-12 Product and the D-24 Product. In Schering Corp. v. IMPAX Laboratories, Inc., Civil Action No. 01-0520 (D.N.J.), Schering has charged infringement of U.S. Patent 4,659,716 (the “‘716 patent”) with respect to the D-12 Product. In Schering Corp. v. IMPAX Laboratories, Inc., Civil Action No. 01-0009 (D.N.J.), Schering has charged infringement of both the ‘716 patent and U.S. Patent 5,314,697 (the “‘697 patent”) with respect to the D-24 Product (collectively, Civil Action No. 01-0520 (D.N.J.) and Civil Action No. 01-0009 (D.N.J.), are referred to herein as the “Patent Litigations”). Schering has also alleged in both actions that it may be necessary in the future to expand the actions to include claims for infringement of U.S. Patent 4,863,931 (the “‘931 patent”). Both of these cases have been consolidated, for pretrial purposes, with other patent infringement actions that Schering has filed against other defendants, with this consolidated action identified as Schering Corp. v. Geneva Pharmaceuticals, Inc., Civil Action Nos. 98-1259 (JAG)(GDH); 99-2237 (JAG)(GDH); 00-0255 (JAG)(GDH); 99-2820 (JAG)(GDH); 00-1439 (JAG)(GDH); 00-1657 (JAG)(GDH); 00-2944 (JAG)(GDH); 01-0009 (JAG)(GDH); 01-0279 (JAG)(GDH); 01-0520 (JAG)(GDH); and 02-0328 (JAG)(GDH). IMPAX agrees to diligently defend the allegations against it in the Patent Litigations and to use all reasonable efforts to have the ‘716 and ‘697 patents (and also the ‘931 patent, to the extent any claims are made in the future of infringement of the ‘931 patent) declared invalid, unenforceable and/or not infringed by the D-12 Product and D-24 Product, including, but not limited to, by defending all appeals by Schering, and by filing and diligently prosecuting all reasonable appeals of any ruling or decision adverse to IMPAX. WCH agrees to reasonably cooperate with IMPAX in the conduct of the Patent Litigations and other proceedings involving WCH. All liabilities, damages attorneys fees and other costs and expenses incurred in connection with defending the Patent Litigations (including any claim of infringement of the ‘931 patent) and defending and prosecuting all related appeals shall be borne by IMPAX. IMPAX shall keep WCH promptly informed of any material developments and shall from time to time consult with WCH regarding the status of the Patent Litigations and shall provide WCH with copies of all documents, not containing Schering’s confidential information, which are filed in, and all unprivileged written communications relating to the Patent Litigations. Notwithstanding anything to the contrary in this Agreement but subject to the next sentence, IMPAX shall have no obligation to supply either Product to WCH prior to the earlier of (i) a United States District Court decision that claims 1 and 3 of the ‘716 Patent are either invalid, unenforceable or not infringed by such Product or (ii) October 21, 2004 and IMPAX shall have no obligation to supply the D-24 Product to WCH prior to the earlier of (i) a United States District Court decision that the ‘697 Patent is either invalid, unenforceable or not infringed by
-11-
the D-24 Product or (ii) April 23, 2013, unless after July 25, 2003 WCH provides IMPAX with an indemnity agreement acceptable to IMPAX for any damages assessed against IMPAX for infringement of such Patent prior to the occurrence of the first of such events, such acceptance by IMPAX not to be unreasonably withheld or delayed. The foregoing shall not relieve IMPAX of its obligation to supply WCH with Product solely for uses reasonably related to the development and submission of information under the FD&C Act. 3.3 Joint Defense Agreement . Promptly following the Effective Date, the Parties shall enter into a joint defense agreement mutually acceptable to both Parties containing customary terms and conditions for the purpose of, among other things, preserving confidentiality and any applicable privilege attaching to information and data exchanged by the Parties and pursuant to this Agreement. IMPAX agrees to provide to WCH pursuant to the joint defense agreement a copy of the written opinion of IMPAX’s outside counsel, with copies of all documents referenced in said opinion, regarding the validity or invalidity of XXXXX U.S. Patent XXXXX . 3.4 Product Launch . WCH shall not be required to Launch Products in any country unless it determines, in its sole discretion, to do so. If WCH does not, subject to supply by IMPAX of launch quantities of such Product pursuant to the forecasts set forth in Section 4.2, use Commercially Reasonable Efforts to Launch a Product in the OTC Field (i) in the United States within three (3) months, or (ii) in the another country in the Territory within five (5) months, following such Product having FTO Status for the OTC Field in such country, then IMPAX, at its option and as its sole and exclusive remedy, may, upon written notice to WCH, convert the licenses granted hereunder in such country for such Product under the IMPAX Patents and Technical Information to non-exclusive licenses (and thereby remove the restrictions placed on IMPAX in Section 2.3 for such Product in such country) unless within thirty (30) days after such written notice WCH Launches Product in the OTC Field in such country. Following the Launch of a Product in any country of the Territory, WCH shall use Commercially Reasonable Efforts to market such Product in such country; provided that nothing shall require WCH to continue marketing a Product in a country if WCH determines, in its sole judgment, that such Product may be subject to a regulatory or other legal action or infringe any intellectual property right of any Third Party in such country. WCH shall promptly notify IMPAX in writing of such discontinuance. If within thirty (30) days after receipt of IMPAX’s written request, WCH does not resume marketing such Product in such country, then IMPAX, at its option and as its sole and exclusive remedy, may, upon written notice to WCH, convert the licenses granted hereunder in such country for such Product under the IMPAX Patents and Technical Information to non-exclusive licenses (and thereby remove the restrictions placed on IMPAX in Section 2.3 for such Product in such country). If at anytime after Launch of a Product in a country, IMPAX reasonably believes that WCH is not using Commercially Reasonable Efforts to market such Product in such country, then IMPAX shall notify WCH and if WCH does not begin to use Commercially Reasonable Efforts to market such Product within such country within thirty (30) days after such written notice, then IMPAX, at its option and as its sole and exclusive remedy, may, upon written notice to WCH, convert the licenses granted hereunder in such country for such Product under the IMPAX Patents and Technical Information to non-exclusive licenses
-12-
(and thereby remove the restrictions placed on IMPAX in Section 2.3 for such Product in such country).
ARTICLE IV SUPPLY 4.1 Supply . During the Term, WCH shall order from IMPAX, subject to WCH’s right to Manufacture Products set forth in Section 2.2, WCH’s requirements of Products for the OTC Field in the Territory and IMPAX shall Manufacture and deliver Products to WCH, subject to (i) WCH having complied with its obligation to provide Rolling Forecasts pursuant to Section 4.2 and (ii) IMPAX’s ability to source active ingredient (provided that IMPAX has used Commercially Reasonable Efforts to do so) in the event that such ability is impaired by WCH’s refusal to approve, or withdrawal of approval for, a supplier of active ingredient, in such quantities, in such packaging and at such times as ordered by WCH. IMPAX shall maintain the resources necessary to Manufacture Products at the Facility and shall provide, at its own expense, all equipment, Materials and labor necessary to do so. If IMPAX’s Manufacturing obligations for all products that use the same equipment and resources at the Facility as the Products exceed eighty five percent (85%) of its total capacity for such equipment and resources at the Facility for more than thirty (30) consecutive days, IMPAX shall notify WCH in writing and, upon WCH’s request, IMPAX shall use Commercially Reasonable Efforts to increase its Manufacturing capacity at the Facility to maintain a better that eighty five percent (85%) ratio. If any batch of Loratadine or Product fails to meet the Identity Criteria based on the Identity Testing performed pursuant to Section 5.2, the Parties shall be relieved of their respective obligations to supply and accept delivery of Product relating to said failed batch.
4.2. Forecasts . At least four and one-half (4 1 / 2 ) months prior to the anticipated Launch date ( provided that the anticipated Launch date shall be at least four and one-half (4 1 / 2 ) months after the date on which WCH provides IMPAX with the Identity Criteria or notifies IMPAX in writing that none are required) in each country of the Territory, WCH shall submit to IMPAX a forecast of the quantity of Product that WCH anticipates ordering from IMPAX for such country during the twelve (12) month period (broken down by Product and by month) following Launch and every month thereafter at least three (3) months prior to the beginning of the period covered by the forecast WCH shall update such forecast on a rolling twelve (12) months basis (each, a “Rolling Forecast”). WCH shall place purchase orders pursuant to Section 4.3 for at least the quantity of Product specified in the first three (3) months of each such Rolling Forecast and the remaining nine (9) months shall be a non-binding estimate prepared by WCH using Commercially Reasonable Efforts. Except as set forth in the immediately preceding sentence, WCH shall not be required to order any fixed minimum quantity of Product, notwithstanding any forecast or prior course of dealing. If WCH fails to give IMPAX Rolling Forecasts as specified above after notice by IMPAX of such failure the prior three (3) months Rolling Forecast shall apply. IMPAX shall use Commercially Reasonable Efforts to allocate capacity at the Facility to WCH so that it can supply WCH with XXXXX tablets of D-12 Product per calendar month and XXXXX tablets of the D-24 Product per calendar month. 4.3 Orders and Delivery . WCH shall place its firm orders for Products with IMPAX by submitting a purchase order which sets forth (i) the quantity of Product ordered for delivery; and
-13-
(ii) the delivery date for that order. Unless IMPAX notifies WCH in writing within fifteen (15) days of receipt of a purchase order that it is unable to deliver Products in accordance with such purchase order, IMPAX shall be deemed to have accepted such purchase order as a binding order. If IMPAX notifies WCH that it is unable to fill such purchase order, it shall indicate the portion of such purchase order IMPAX cannot supply by the requested delivery date and specify alternate delivery dates. WCH may cancel any firm purchase order (in whole or in part) at any time prior to the delivery for any quantity of Product; provided that , except in the event that this Agreement is being terminated by WCH pursuant to Section 9.2, 9.3.3 or 9.3.4 or by IMPAX pursuant to Section 5.3.2 or 9.2.3, (i) if IMPAX has completed the Manufacture of Products pursuant to such firm purchase order, WCH shall pay the price therefor and (ii) if IMPAX has commenced but not completed the Manufacture of Product pursuant to such firm purchase order, WCH shall reimburse IMPAX for Material and labor costs in respect of any works-in-progress or Materials orders pursuant to such cancelled purchase order (or part thereof) at the time notice of cancellation is received by IMPAX. All Products shall be delivered F.O.B. the Facility in accordance with WCH’s instructions. Time is of the essence for all deliveries of Products. 4.4 Manufacturing Date . IMPAX shall schedule its Manufacturing operations so that all Products delivered have the maximum shelf life reasonably possible and in any event no Product delivered hereunder shall have less than expiry less two (2) months of shelf life (unless a longer period of time is agreed to by the Parties), based on the dating included on such Products’ packaging, remaining at the time of delivery. 4.5 Inconsistent Terms and Conditions . The terms and conditions of any invoice, acknowledgement or similar document provided by IMPAX for Products, or any terms and conditions of purchase orders provided by WCH for Products, which are inconsistent with or in addition to the terms of this Agreement, shall be null and void.
ARTICLE V COMPLIANCE, QUALITY AND ENVIRONMENTAL 5.1 Compliance with Law . IMPAX and, if WCH is Manufacturing Product pursuant to Section 2.2, WCH shall conduct its Manufacturing operations hereunder in a safe and prudent manner, in compliance with all applicable laws and regulations (including, but not limited to, those dealing with occupational safety and health, those dealing with public safety and health, those dealing with protecting the environment, and those dealing with disposal of wastes), and in compliance with all applicable provisions of this Agreement. IMPAX and, if WCH is Manufacturing Product pursuant to Section 2.2, WCH shall obtain all necessary registrations and permits pertaining to activities contemplated by this Agreement. To the extent necessary for the Regulatory Approval of Products, IMPAX and, if WCH is Manufacturing Product pursuant to Section 2.2, WCH shall permit the inspection of its premises by Regulatory Authorities and shall supply all documentation and information to obtain or maintain Regulatory Approval of Products. 5.2 Manufacturing Quality . IMPAX shall obtain all Materials from WCH approved suppliers. All Products shall be Manufactured at the Facility and in accordance with GMPs. IMPAX shall sample and analyze all Materials upon receipt to ensure that such Materials are
-14-
free of defects and meet the applicable specifications therefor. Until WCH notifies IMPAX in writing that such practice may be suspended or discontinued, IMPAX shall provide samples from each batch of Loratadine to be used in the Manufacture of any Product and samples from each Batch of Product to XXXXX (or such other contract laboratory specified by WCH) to perform the Identity Testing to ensure that such Loratadine and Product, as the case may be, meet the Identity Criteria. IMPAX shall promptly provide WCH with the results of such Identity Tests. XXXXX (or such other laboratory specified by WCH) shall bill WCH directly for such services, and such amounts shall not be included in Direct Manufacturing Cost. IMPAX shall not use any Loratadine in the Manufacture of Product that does not meet the Identity Criteria and shall not ship any Product to WCH that does not meet the Identity Criteria. IMPAX shall take all necessary steps to prevent contamination and cross contamination of Products. Products shall be unadulterated (within the meaning of the FD&C Act) and free from contamination, diluents and foreign matter in any amount. IMPAX shall perform the quality control tests with respect to Products in accordance with the Methods of Analysis, the cost of the same to be included in the price hereinafter specified. IMPAX shall promptly, upon completion of such tests, deliver to WCH a copy of the record of such tests performed on, and a Certificate of Analysis for, each Batch of Product. At WCH’s request, IMPAX shall deliver a representative sample (in the same amount as the sample that IMPAX retains for its own purposes) from each Batch of Product to WCH’s designated representative. On the Effective Date or promptly thereafter, the Parties shall execute and deliver to each other the Quality Agreement substantially in the form of Exhibit C . Each Party agrees to perform its respective obligations under the Quality Agreement in accordance with such agreement. 5.3 Manufacturing Changes . 5.3.1 IMPAX shall not make any changes to the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the sources of Materials or the Methods of Analysis without the prior written consent of WCH, which consent shall not be unreasonably withheld. If either Party requests in writing a change in the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the source of Materials or Methods of Analysis with respect to any Product that is not the result of a requirement of FDA or any other Regulatory Authority, the other Party shall use Commercially Reasonable Efforts to make or accept such change, as the case may be. The requesting Party shall provide the other Party with a detailed written report of all proposed changes to the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the sources of Materials or the Methods of Analysis. 5.3.2 If FDA or any other Regulatory Authority requests or requires any change in the Manufacturing process, the Manufacturing equipment, the Specifications, the Materials, the source of Materials or Methods of Analysis with respect to any Product the Parties shall meet and discuss an implementation plan for such change and use all Commercially Reasonable Efforts to accommodate such change to meet the FDA’s or such other Regulatory Authority’s requirements. Each Party will bear its respective costs associated with, or incurred as a result of, such change. Each Party agrees to promptly forward to the other copies of any written communication received by such Party from the FDA or any other Regulatory Authority that
-15-
may affect the Manufacture or supply of any Product as contemplated herein. Notwithstanding the foregoing, if after Launch of the D-12 Product IMPAX determines, in the exercise of its reasonable judgment, that a change required by the FDA or other Regulatory Authority creates an unreasonable burden on IMPAX or results in the continuing compliance by IMPAX with this Agreement uneconomical and if, upon IMPAX’s request, WCH does not agree (i) to pay the incremental cost of complying with the changes required by FDA or such other Regulatory Authority (which costs shall not be included in Direct Manufacturing Costs hereunder to the extent paid by WCH), or (ii) to exercise its right to Manufacture pursuant to Section 2.2, then IMPAX may by notice in writing to WCH, given no later than thirty (30) days after such refusal by WCH, terminate this Agreement. 5.4 Testing by WCH . WCH may test the Product samples in accordance with the applicable Methods of Analysis. If the analysis of any Product performed by or for WCH differs from IMPAX’s analysis of the same Batch, WCH shall advise IMPAX and IMPAX and WCH agree to consult with each other in order to explain and resolve the discrepancy between each other’s determination. If, after a good faith attempt by the Parties to do so, such consultation does not resolve the discrepancy, an independent, reputable laboratory designated by WCH and reasonably acceptable to IMPAX (such acceptance not to be unreasonably withheld or delayed) shall repeat the applicable Methods of Analysis on representative samples from such Batch provided by or for WCH. The costs of the independent laboratory referred to above shall be borne by (i) WCH if such laboratory determines that the Product conforms to the Specifications or (ii) IMPAX if such laboratory determines that the Product does not conform to the Specifications. If so requested by WCH in writing, IMPAX shall promptly send a new Batch of Product (of similar quantity as to the amount of such Product being analyzed as set forth above) to WCH. WCH shall not be obligated to pay for any Product (and if WCH has paid for such Product IMPAX shall promptly reimburse WCH) that such laboratory determines that does not conform to the Specifications, but shall be obligated to pay for any new Batch of Product which conforms to the Specifications that is sent as specified above, except that IMPAX shall pay all transportation costs for such replacement Batch. If WCH shall reject any Batch of Product, IMPAX’s only obligation and liability to WCH shall be to replace the rejected Batch of Product. 5.5 Samples and Record Retention . IMPAX shall retain records and retention samples of each Batch of Product for at least thirty-six (36) months after the expiration date of that Batch and shall make the same available to WCH upon request. Retention samples shall only be destroyed after the required holding period and then only after notice to WCH. During and after the Term, IMPAX shall assist WCH with respect to any complaint, issue or investigation relating to Product. 5.6 Inspection . 5.6.1 IMPAX shall give access to representatives of WCH, at all reasonable times and upon reasonable notice during regular business hours, to the Facility and any other facility in which Products are Manufactured, tested and/or stored, and to all Manufacturing records with respect to Products for the purpose of inspection. WCH shall have the right while at any such Facility to inspect IMPAX’s records, permits, and licenses to evaluate work practices and compliance with all applicable FDA and other Regulatory Authority laws and regulations,
-16-
occupational health and safety, and environmental laws and regulations, controlled substances laws and regulations, GMP and warehousing practices and procedures. Upon WCH’s request, IMPAX shall provide copies of Batch records, quality control, quality assurance and validation documents reasonably relating to the Product. Notwithstanding any inspection performed by WCH, IMPAX shall remain solely responsible for operating its Facilities and for complying with its obligations under this Agreement. Neither the rights granted to WCH pursuant to this Section 5.6.1, nor any inspection performance by WCH, shall impose any liability on WCH, except in the case of gross negligence or willful misconduct on the part of WCH. 5.6.2 At any time during which WCH is Manufacturing Product pursuant to Section 2.2, WCH shall give access to representatives of IMPAX, at all reasonable times and upon reasonable notice during regular business hours, to the facility in which Products are Manufactured, tested and/or stored, and to all Manufacturing records with respect to Products, for the purpose of inspection. IMPAX shall have the right while at any such facility to inspect WCH’s records, permits, and licenses to evaluate work practices and compliance with all applicable FDA and other Regulatory Authority laws and regulations, occupational health and safety, and environmental laws and regulations, controlled substances laws and regulations, GMP and warehousing practices and procedures. Upon IMPAX’s request, WCH shall provide copies of Batch records, quality control, quality assurance and validation documents reasonably related to the Product. Notwithstanding any inspection performed by IMPAX, WCH shall remain solely responsible for operating its facilities and for complying with its obligations under this Agreement. Neither the rights granted to IMPAX pursuant to this Section 5.6.2, nor any inspection performance by IMPAX, shall impose any liability on IMPAX, except in the case of gross negligence or willful misconduct on the part of IMPAX. 5.7 Adverse Drug Experience Reporting . Each Party shall fully, accurately and promptly provide to the other Party with all data known to it at any time during the term of this Agreement or thereafter, which data indicate that any Product marketed by WCH is or may be unsafe, lacks utility, or otherwise does not meet Specifications in accordance with the Adverse Event Reporting Procedures set forth in Exhibit D attached hereto (as the same may be amended from time to time by notice in writing from WCH to IMPAX). WCH shall determine whether such information is required to be reported and report the same as required, to FDA and any other Regulatory Authority. 5.8 Recalls and Seizure . Each Party shall keep the other Party promptly and fully informed of any notification or other information whether received directly or indirectly which might result in the Recall or Seizure of Product. If either Party determines that it is necessary to Recall any Product, it shall immediately notify the other Party. Prior to commencing any Recall, the Parties shall review with one another the manner in which the Recall is to be carried out and any instructions or suggestions of the applicable Regulatory Authorities. IMPAX and WCH shall effect the Recall in the manner agreed upon between the Parties in as expeditious a manner as possible and in such a way as to cause the least disruption to the sales of any Products and to preserve the goodwill and reputation associated with the Products and each Party. In any such situation, WCH shall have the right to make all final decisions regarding such Recall of the Products marketed by WCH.
-17-
5.9 Environmental, Occupational Health and Safety . IMPAX shall report to WCH, and, if WCH is Manufacturing Product pursuant to Section 2.2, WCH shall report to IMPAX, as soon as possible after any of the following incidents related to the Manufacturing operations hereunder occurs: (i) significant injuries or occupational illness;
(ii) property damage in excess of $50,000;
(iii) inspections by any environmental protection agency or occupational health and safety agency; or
(iv) requests for information, notices of violations or other significant governmental and safety agency communications relating to environmental, occupational health and safety compliance. IMPAX shall only use waste haulers, brokers and disposal sites which WCH has approved in writing for hazardous waste generated by the Manufacturing operations, such approval not to be unreasonably withheld or delayed. IMPAX shall have title to and be responsible for disposing in an environmentally safe manner all residue and waste resulting from the Manufacturing operations performed by it hereunder. IMPAX shall not use WCH trademarks or trade dress to identify any waste materials or residues. At any time during which WCH is Manufacturing Product pursuant to Section 2.2, WCH shall only use waste haulers, brokers and disposal sites which IMPAX has approved in writing for hazardous waste generated by the Manufacturing operations, such approval not to be unreasonably withheld or delayed. WCH shall have title to and be responsible for disposing in an environmentally safe manner all residue and waste resulting from the Manufacturing operations performed by it hereunder.
ARTICLE VI LICENSE PAYMENTS, ROYALTIES, AND SUPPLY PRICE 6.1 License Payments . Subject to Section 9.3.3, WCH shall make the following non-refundable license payments to IMPAX which shall be due and payable one (1) time only and within thirty (30) days after the occurrence of the corresponding event set forth below ( provided that with respect to the Product to which the event relates all prior events in the list involving such Product have occurred; and provided further that this Agreement is in effect with respect to the Product to which the event relates at the time of the occurrence of such event and that notice of termination shall not have been given pursuant to Section 9.3.2 with respect to the Product to which the event relates prior to the occurrence of such event):
Event Payment
(i) The Effective Date of this Agreement $ 350,000
-18-
Event Payment (ii) Placement on stability of a D -12 Product pilot batch in WCH ’s consumer blister packaging $ 75,000
(iii) Placement on stability of a D -24 Product pilot batch in WCH ’s consumer blister packaging $ 75,000
(iv) Filing with FDA an ANDA supplement/amendment for D-12 Product to support 24 month expiry based on stability studies in WCH ’s consumer blister packaging $ 100,000
(v) Filing with FDA an ANDA supplement/amendment for D-24 Product to support 24 month expiry based on stability studies in WCH ’s consumer blister packaging $ 100,000
(vi) WCH’s acceptance of successful scale-up and validation (based on WCH’s approval of final validation report) of D-12 Product $ 150,000
(vii) WCH’s acceptance of successful scale-up and validation (based on WCH’s approval of final validation report) of D-24 Product $ 150,000
(viii) The later to occur of (a) January 1, 2003 or (b) final D-12 Product ANDA approval by FDA with WCH’s consumer labeling and blister packaging $ 450,000
(ix) The later to occur of (a) January 1, 2003 or (b) final D-24 Product ANDA approval by FDA with WCH’s consumer labeling and blister packaging $ 450,000
(x) The later to occur of (a) January 1, 2003 or (b) Launch of the D -12 Product by WCH in the United States $ 1,250,000
(xi) The later to occur of (a) January 1, 2003 or (b) Launch of the D -24 Product by WCH in the United States $ 1,250,000
-19-
6.2 Royalties . 6.2.1 During the Term following the date of Launch of each Product in a country of the Territory through the later of five (5) years from Launch in such country and the expiration of the last to expire issued IMPAX Patent in such country, if any, WCH shall pay to IMPAX, on a quarterly basis, a royalty of XXXXX percent ( XXXXX %) on Net Sales of such Product (whether or not Manufactured by IMPAX, WCH pursuant to Section 2.2 or WCH’s sublicensees pursuant to Section 2.1.2) sold for the OTC Field on a country-by-country basis in the Territory during the previous quarter. 6.2.2 During any period and for each country that royalties are due and payable pursuant to Section 6.2.1, WCH shall, within thirty (30) days after each calendar quarter for sales of Product for the OTC Field in the United States and within sixty (60) days after each calendar quarter for sales of Product for the OTC Field within the Territory outside the United States, furnish to IMPAX a written quarterly report showing (i) the Net Sales of Product for the OTC Field sold by WCH and its Affiliates and sublicensees pursuant to Section 2.1.2 during the reporting period in such country; (ii) the royalties which shall have accrued hereunder in respect of such sales in such country; (iii) withholding taxes, if any, required by law to be deducted in respect of such royalty payments; and (iv) the exchange rates used in determining the amount of payment hereunder. 6.2.3 Payments accrued in each quarter shall be paid to IMPAX no later than thirty (30) days after the end of such quarter for the United States and no later than sixty (60) days after the end of such quarter for all other countries. Any amounts not paid within thirty (30) days after the due date thereof shall bear interest at the rate equal to eighteen percent (18%) per annum. 6.2.4 All royalty payments to be made pursuant to this Agreement shall be made in $. Amounts based on Net Sales in currencies other than $ shall be converted to $ at the WCH financial statement exchange rate applied by WCH on a consistent basis in WCH’s own financial accounting on the date such payment is due. 6.3 Supply Price . 6.3.1 IMPAX shall invoice WCH for the prices set forth in Exhibit B attached hereto, subject to adjustment as set forth in Sections 6.3.2, 6.3.3 and 6.3.4, for all Products delivered to WCH hereunder. All prices are inclusive of taxes, shipping costs to the point of delivery, customs duties and other charges. 6.3.2 The Direct Manufacturing Cost, and the quality control, Materials, labor and overhead components thereof, as of June 1, 2002 which formed the basis of the price for each Product are set forth on Exhibit B attached hereto. IMPAX shall use Commercially Reasonable
-20-
Efforts to minimize the Direct Manufacturing Cost of each Product. Commencing with June 1, 2003 and each December 1 st and June 1 st thereafter (in each case, an “Adjustment Date”), IMPAX may propose an adjustment to the prices to reflect documented changes in Direct Manufacturing Cost per unit of Product on such June 1 st or December 1 st , as the case may be, as compared to the Direct Manufacturing Cost per unit of Product on June 1, 2002 for the first adjustment and thereafter on the immediately preceding June 1 st or December 1 st , as the case may be, (without regard to intervening fluctuations); provided that IMPAX gives WCH not less than ninety (90) days’ prior written notice of any proposed price increase and that IMPAX may not increase the price of a Product more than once during any Contract Year; and provided , further , that any such increase shall not exceed the relevant PPI Adjustment. If WCH does not accept IMPAX’s proposed price increases, the Parties shall negotiate in good faith. If the Parties conclude their negotiations and agree upon Product prices, such agreed upon price increases shall be effective as of the expiration of such ninety (90) day notice period. In the event that the Parties are unable to agree during the negotiations described above, this Agreement shall be automatically terminated effective six (6) months after the expiration of such ninety (90) day notice period. Until the date of such termination, IMPAX shall supply WCH such Products at the prices then in effect without such price increase. “PPI Adjustment” means the amount calculated in accordance with the following formula:
DMC x PPI – BPPI BPPI
Where, = Direct Manufacturing Cost on June 1, 2002 for the first adjustment and thereafter on the Adjustment Date immediately DMC preceding the Adjustment Date in question;
BPPI = the Bureau of Labor Statistics Producer’s Price Index for Pharmaceutical Preparations (Code 2834) on June 1, 2002 for the first adjustment and thereafter on the Adjustment Date immediately preceding the Adjustment Date in question; and
PPI = the Bureau of Labor Statistics Producer’s Price Index for Pharmaceutical Preparations (Code 2834) on the Adjustment Date in question. 6.3.3 Continuous improvement initiatives, mutually agreeable to the Parties shall be established to provide for continuous cost reductions during the Term of this Agreement. Continuous improvement teams consisting of equal representation from each Party shall use reasonable efforts to work to identify and implement cost savings at a targeted rate of five percent (5%) of WCH’s purchase price per Contract Year, but the foregoing shall not constitute a guarantee by IMPAX of any cost reductions. Any documented savings shall be allocated to the Parties in proportion to the level of contribution by each Party to realize the savings. Any cost savings allocated to WCH shall be in the form of reduced purchase price. 6.3.4 Notwithstanding any provision herein to the contrary, if at any time IMPAX makes sales of any Product to any person in any country of the Territory at a price lower than the price then in effect hereunder for such Product, such lower price shall be made available to WCH hereunder, with respect to WCH’s inventory of Product in such country as well as future
-21-
purchases of Product for resale in such country, for so long as IMPAX continues to make sales to such person at such lower price. 6.3.5 WCH shall pay invoices for Products delivered hereunder in $ not later than thirty (30) days after the later of receipt of Products covered by such invoice and receipt of such invoice. In addition to its other rights and remedies, IMPAX shall have the right to assess interest on amounts past due by more than fifteen (15) days at the rate of one and one-half percent (1 1 / 2 %) per month, or the highest rate permissible by law, if lower. 6.4 Withholdings . Any and all income or similar taxes imposed or levied on account of the receipt of payments under this Agreement which are required to be withheld shall be paid by WCH on behalf of IMPAX and shall be paid to the proper taxing authority. Proof of payment shall be secured, if available, and sent to IMPAX by WCH as evidence of such payment in such form as required by the tax authorities having jurisdiction over WCH. Such taxes shall be deducted from the payments that would otherwise be remittable by WCH. 6.5 Audit Rights . WCH shall have the right, at its own expense, through its independent certified public accountant (reasonably acceptable to IMPAX) to access the books and records of IMPAX and its Affiliates, as may be reasonably necessary, to verify the accuracy of IMPAX’s Direct Development Costs and Direct Manufacturing Costs. IMPAX shall have the right, at its own expense, through its independent certified public accountant (reasonably acceptable to WCH) to access the books and records of WCH and its Affiliates, as may be reasonably necessary, to verify the accuracy of WCH’s Net Sales. Such access shall be conducted after thirty (30) days’ prior written notice to the Party being audited and during ordinary business hours and shall not be more frequent than once per Contract Year or in respect of any Contract Year ending more than thirty-six (36) months prior to the date of such notice. If such independent certified public accountant’s report shows any overpayment or underpayment by a Party, the other Party shall remit to such Party within thirty (30) days after such Party’s receipt of such report, (i) the amount of such overpayment or underpayment, as the case may be, (ii) interest on such overpayment or underpayment, as the case may be, at the prime rate quoted by Chase Manhattan Bank N.A. from the date payment was first due until the date of payment of such overpayment or underpayment, as the case may be, and (iii) if such overpayment or underpayment, as the case may be, exceeds five percent (5%) of the total amount owed for the period then being audited, the reasonable fees and expenses of any independent accountant performing the audit on behalf of such Party.
ARTICLE VII REPRESENTATIONS AND WARRANTIES 7.1 Representation and Warranties of Each Party . Each of WCH and IMPAX hereby represents and warrants to the other Party hereto as follows: 7.1.1 it is a corporation or entity duly organized and validly existing under the laws of the state or other jurisdiction of incorporation or formation;
-22-
7.1.2 the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action and do not require any shareholder action or approval; 7.1.3 it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder; 7.1.4 the execution, delivery and performance by such Party of this Agreement and its compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) any other contract entered into by such Party; (ii) a loan agreement, guaranty, financing agreement, agreement affecting a product or other agreement or instrument binding or affecting it or its property; (iii) the provisions of its charter or operative documents or by laws; or (iv) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound; and 7.1.5 is in compliance with all applicable laws and regulations relating to its activities under this Agreement. 7.2 Representations and Warranties of IMPAX . 7.2.1 IMPAX hereby represents and warrants to WCH with respect to each delivery of Products that: (i) the Products (a) have been Manufactured in the United States; (b) have been Manufactured, stored and shipped in accordance with GMPs and all applicable laws, rules, regulations or requirements in effect at the time of Manufacture; (c) conform to the Specifications, are free from defects and are merchantable; (d) at the point of shipment to WCH or WCH’s designee are not adulterated or misbranded; and (e) have been shipped and stored in accordance with approved procedures agreed between WCH and IMPAX;
(ii) the D-12 Products and D-24 Products are pharmaceutically equivalent and bioequivalent to CLARITIN-D® 12-hour Extended Release Tablets and CLARITIN -D® 24 -hour Extended Release Tablets, respectively;
(iii) IMPAX has good and marketable title to all Products and Products are free from all liens, charges, encumbrances and security interests;
(iv) to the knowledge of IMPAX, (A) as of the Effective Date and (B) thereafter, except as disclosed in writing by IMPAX to WCH, the Manufacture, use, importation, offer for sale and sale of Products do not infringe any intellectual property rights of any Third Party,
-23-
including but not limited to U.S. Patents 4,659,716; 4,863,931; XXXXX ; and 5,314,697 and any foreign counterparts thereof; (v) the Facilities conform in all respects to applicable law governing such Facilities; and
(vi) neither IMPAX nor its Affiliates used in any capacity the services of any person debarred under the U.S. Generic Drug Enforcement Act, 21 USA §335a(k)(l) and further it did not use any person who has been convicted of a crime as defined under the Generic Drug Enforcement Act in connection with the Manufacture of Products or any service rendered to WCH. 7.2.2 IMPAX hereby represents and warrants with respect to the IMPAX Patents and Technical Information: (i) IMPAX has no knowledge that the IMPAX Patents (a) are not valid and enforceable; or (b) are dominated or the practice of then claimed subject matter infringes the intellectual property rights of any Third Party in the Territory as of the Effective Date;
(ii) IMPAX has the full right, power and authority to grant the licenses set forth in Sections 2.1 and 2.2;
(iii) IMPAX has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in the Products, the IMPAX Patents or the Technical Information in the OTC Field in the Exclusive Territory; and
(iv) IMPAX is the sole and exclusive owner of the IMPAX Patents and Technical Information free and clear of all liens, charges, encumbrances and security interests. 7.3 Representations and Warranties of WCH . 7.3.1 WCH hereby represents and warrants to IMPAX that with respect to any Product that WCH or one of its Affiliates Manufactures pursuant to Section 2.2: (i) such Products (a) have been Manufactured, stored and shipped in accordance with GMPs and all applicable laws, rules, regulations or requirements in effect at the time of Manufacture; (b) conform to the Specifications, are free from defects and are merchantable; (c) are not adulterated or misbranded; and (d) have been shipped and stored in accordance with approved procedures agreed between WCH and IMPAX;
-24-
(ii) WCH’s and/or its Affiliates’ manufacturing facilities for such Products conform in all respects to applicable law governing such facilities; and
(iii) neither WCH nor its Affiliates used in any capacity the services of any person debarred under the U.S. Generic Drug Enforcement Act, 21 USA §335a(k)(l) and further it did not use any person who has been convicted of a crime as defined under the Generic Drug Enforcement Act in connection with the Manufacture of Products. 7.3.2 WCH hereby represents and warrants to IMPAX that all Products which WCH shall market, store, sell, distribute, import and export under this Agreement shall have been marketed, stored, sold, distributed, imported and exported in accordance with applicable law. 7.4 Representation by Legal Counsel . Each Party hereto represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption shall exist or be implied against the Party which drafted such terms and provisions. 7.5 No Further Warranties . EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, CONCERNING THE PRODUCTS OR THE MERCHANTABILITY OR FITNESS THEREOF FOR ANY PURPOSE.
ARTICLE VIII INDEMNIFICATION AND INSURANCE 8.1 Indemnification . 8.1.1 IMPAX shall indemnify, defend and hold harmless WCH, its Affiliates and their respective directors, officers, employees and agents from and against all damages, losses, liabilities, expenses, claims, demands, suits, penalties or judgments or administrative or judicial orders (including reasonable attorneys’ fees and expenses) (“Costs”) incurred, assessed or sustained by or against WCH, its directors, officers, employees or agents with respect to or arising out of (i) the negligent or willful acts or omissions or strict liability of IMPAX; (ii) any breach by IMPAX of its representations, warranties or covenants hereunder; (iii) any Recall or Seizure attributable to IMPAX’s performance; (iv) any allegation that the Manufacture, importation, sale, offer for sale or use of any Product in the United States infringes any Patent or other proprietary or protected right, other than trademark rights; or (v) IMPAX’s failure to comply with any applicable law, regulation or order (including but not limited to environmental laws, regulations and orders, and laws and orders relating to the Manufacture, storage, sale, import and export of Products).
-25-
8.1.2 WCH shall indemnify, defend and hold harmless IMPAX, its Affiliates and their respective directors, officers, employees and agents from and against all damages, losses, liabilities, expenses, claims, demands, suits, penalties or judgments or administrative or judicial orders (including reasonable attorneys’ fees and expenses) incurred, assessed or sustained by or against IMPAX, its directors, officers, employees or agents with respect to or arising out of (i) the negligent or willful acts or omissions or strict liability of WCH; or (ii) any breach by WCH of its representations, warranties or covenants hereunder; or (iii) any Recall or Seizure attributable to WCH’s performance; (iv) any allegation that the importation, sale, offer for sale or use of any Product by WCH in any country in the Exclusive Territory outside the United States infringes any Patent or other proprietary or protected right; or (v) WCH’s failure to comply with any applicable law, regulation or order (including but not limited to environmental laws, regulations and orders, and laws and orders related to the Manufacture (if WCH is Manufacturing Product pursuant to Section 2.2), storage, marketing, distribution, sale, import and export of the Products). 8.1.3 Each Party and its Affiliates and their respective directors, officers, employees or agents (an “Indemnified Party”) shall promptly notify the other Party (the “Indemnifying Party”), in writing, of any claim asserted or threatened against such Indemnified Party for which such Indemnified Party is entitled to indemnification hereunder from the Indemnifying Party. With respect to any such claim the Indemnified Party shall, at no out-of-pocket expense to it, reasonably cooperate with and provide such reasonable assistance to such Indemnifying Party as such Indemnifying Party may reasonably request. Such reasonable assistance may include, without limitation, providing copies of all relevant correspondence and other materials that the Indemnifying Party may reasonably request. The obligations of an Indemnifying Party under Sections 8.1.1 and 8.1.2 are conditioned upon the delivery of written notice to the Indemnifying Party of any asserted or threatened claim promptly after the Indemnified Party becomes aware of such claim; provided , that the failure of the Indemnified Party to give such notice or any delay thereof shall not affect the Indemnified Party’s right to indemnification hereunder, except to the extent that such failure or delay impairs the Indemnifying Party’s ability to defend or contest any such claim. The Indemnifying Party shall have the right to assume the defense of any suit or claim for which indemnification is sought. If the Indemnifying Party defends the suit or claim, the Indemnified Party may participate in (but not control) the defense thereof at its sole cost and expense. An Indemnifying Party may not settle a suit or claim, without the consent of the Indemnified Party, if such settlement would impose any monetary obligation on the Indemnified Party for which indemnification is not provided hereunder or require the Indemnified Party to submit to an injunction or otherwise limit the Indemnified Party’s rights under this Agreement. Any payment made by an Indemnifying Party to settle any such suit or claim shall be at its own cost and expense. 8.1.4 With respect to any claim by one Party against the other Party arising out of the performance or failure of performance of the other Party under this Agreement, the Parties expressly agree that the liability of such Party to the other Party for such breach shall be limited under this Agreement or otherwise at law or equity to direct damages only and in no event shall a Party be liable for lost profits, punitive, exemplary or consequential damages; provided , however , that such limitation shall not apply with respect to the obligations of either Party to
-26-
indemnify the other under Sections 8.1.1 or 8.1.2 hereof in connection with a liability to a Third Party. 8.2 Insurance . Each Party shall maintain the following kinds of insurance with the minimum limits set forth below.
Kind of Insurance Minimum Limits
Commercial General Liability, including $2,000,000 Per Occurrence Contractual, Completed Operations and $5,000,000 Aggregate Products Liability
Workers Compensation Statutory with Employer ’s Liability of not less than $1,000,000 Per Accident/Disease
Automobile Bodily Injury Liability $1,000,000 Each Accident (including hired automobile and non- Combined Single Limit ownership Liability) WCH may be self insured for such amounts. Upon request, IMPAX shall furnish insurance certificates as directed by WCH, satisfactory in form and substance to WCH, showing the above coverages, and providing for at least ten (10) days’ prior written notice to WCH by the insurance company of cancellation or modification. WCH shall be named as an additional insured on the IMPAX’s policies. Coverage shall be procured with carriers having an A.M. Best rating of A-VII or better.
ARTICLE IX TERM AND TERMINATION 9.1 Term . This Agreement shall commence on the Effective Date and continue, unless sooner terminated as set forth below in this Article IX or in Article XII or Sections 5.3.2, 6.3.2 or 14.10, until the later to occur of (i) the fifth anniversary of the Launch date of a Product in the United States or (ii) the date of the expiration of the last to expire of the IMPAX Patents (the “Term”). 9.2 Termination by Either Party . 9.2.1 If either Party shall materially breach any of its obligations hereunder and shall fail to correct such breach within thirty (30) days after the other Party shall have given notice to it thereof, the aggrieved Party shall be entitled to notify the other Party that it intends to terminate this Agreement unless such breach is corrected and may so terminate ten (10) days after the end of such thirty (30) day period if such breach is continuing, unless, to the extent the breach can be cured, the time period of thirty (30) days is not sufficient to cure such breach in which event the Party in breach shall have such additional time as shall be reasonably necessary to cure such breach, but in
-27-
no event to exceed six (6) months. Such termination shall not give rise to the payment of any penalty, damages or indemnity by the terminating Party. 9.2.2 If either Party by voluntary or involuntary action goes into liquidation, dissolves or files a petition for bankruptcy or suspension of payments, is adjudicated bankrupt, has a receiver or trustee appointed for its property or estate, becomes insolvent or makes an assignment for the benefit of creditors, the other Party shall be entitled by notice in writing to such Party to terminate this Agreement forthwith. Such termination shall not give rise to the payment of any penalty, damages or indemnity by the terminating Party. 9.2.3 If, upon the decision of a court of competent jurisdiction from which either no appeal can be taken or the time for an appeal has expired without an appeal having been filed, a claim is upheld that the Manufacture, storage, importation, sale, offer to sell or use of the Product, or Products, respectively, infringes any Patent or other proprietary or protected right (other than trademark rights) of a Third Party, then either Party shall have the right to immediately terminate this Agreement, upon written notice to the other Party, as to the country or other geographic area, and Product, or Products, respectively, covered by the Patent or other proprietary or protected right. Upon any such termination by WCH, WCH shall have no further rights to such Product or Products in that country or geographic area. 9.3 Termination by WCH . 9.3.1 WCH may terminate this Agreement upon ten (10) days’ written notice to IMPAX either in its entirety, or with respect to the Product to which the event relates, if any of the following events does not occur by the date set forth opposite such event:
Event Date
(i) Successful completion of scale-up and validation (based on WCH’s The later of (i) November 30, 2002 or (ii) ninety (90) days from the approval of final validation report) for the D-12 Product date on which WCH provides IMPAX with the Identity Criteria for the D-12 Product or notifies IMPAX in writing that none are required
(ii) Successful completion of scale-up and validation (based on WCH’s The later of (i) June 30, 2003 or (ii) ninety (90) days from the date approval of final validation report) for the D-24 Product on which WCH provides IMPAX with the Identity Criteria for the D-24 Product or notifies IMPAX in writing that none are required
(iii) Final ANDA approval (which August 30, 2003
-28-
Event Date
includes without limitation WCH’s consumer labeling and blister packaging) of D -12 Product by FDA
(iv) Final ANDA approval (which includes without limitation WCH’s March 31, 2004 consumer labeling and blister packaging) of D -24 Product by FDA
(v) Failure to deliver at least seventy-five percent (75%) of the Launch Four and one-half (4 1 / 2 ) months after the later of (i) receipt of quantities of D-12 Product consistent with the forecasts required by WCH’s purchase order therefor or (ii) the date on which WCH Section 4.2 provides IMPAX with the Identity Criteria for the D-12 Product or notifies IMPAX in writing that none are required
(vi) Failure to deliver at least seventy-five percent (75%) of the Launch Four and one-half (4 1 / 2 ) months after the later of (i) receipt of quantities of D-24 Product consistent with the forecasts required by WCH’s purchase order therefor or (ii) the date on which WCH Section 4.2 provides IMPAX with the Identity Criteria for the D-24 Product or notifies IMPAX in writing that none are required Such termination shall not give rise to the payment of any penalty, damages or indemnity by either Party and WCH shall have no further rights under Sections 2.1 and 2.2, except where the event is a failure to deliver Launch quantities of the D-12 and D-24 Product in which case the provisions of Section 9.5.1 shall apply. 9.3.2 WCH may terminate this Agreement either in its entirety or with respect to any Product upon three (3) months’ written notice to IMPAX. If WCH terminates this Agreement pursuant to this Section 9.3.2, then WCH shall make the following payments with respect to the Product so terminated:
Event Payment
I. D-12 Product
If on or before the date on which notice of termination is given for the D -12 Product the event described in
-29-
Event Payment
Section 6.1(viii) has not occurred $ 450,000 or If on or before the date on which notice of termination is given for the D-12 Product the event described in Section 6.1 (viii) has occurred but the event described in Section 6.1(x) has not occurred $ 675,000 or If on or before the date on which notice of termination is given for the D-12 Product the event described in Section 6.1 (x) has occurred Zero
II. D -24 Product
If on or before the date on which notice of termination is given for the D-24 Product the event described in Section 6.1 (ix) has not occurred $ 450,000 or If on or before the date on which notice of termination is given for the D-24 Product the event described in Section 6.1 (ix) has occurred but the event described in Section 6.1(xi) has not occurred $ 675,000 or If on or before the date on which notice of termination is given for the D-24 Product the event described in Section 6.1 (xi) has occurred Zero It is understood and agreed that the amounts set forth above are in lieu of and not in addition to the license payments for the corresponding event set forth in Section 6.1 and that, effective upon termination, WCH’s obligation to make future license payments with respect to any terminated Product shall be canceled. Except as specifically set forth above, such termination shall not give rise to the payment of any penalty, damages or indemnification by either Party and WCH shall have no further rights to the Product or Products to which such termination applies. 9.3.3 In addition to, and not in limitation on, WCH’s rights under Section 9.2.3, WCH may terminate this Agreement in its entirety or with respect to any Product immediately (i) if FDA takes any action ( provided that with respect to such action either (a) no appeal can be taken or the time for an appeal has expired without an appeal having been filed or an appeal has been filed and FDA’s action has been upheld or (b) such action is a final regulatory action), the result of which is to prohibit the Manufacture, storage, importation, sale, offer for sale or use of the Products or a Product, respectively; (ii) if the Loratadine to be used by IMPAX to Manufacture Product does not meet the Identity Criteria upon completion of the initial analysis by XXXXX (or such other contract laboratory specified by WCH); provided that such notice of termination is given by WCH in this subparagraph (ii) by no later than March 31, 2003; (iii) if the Loratadine to be used by IMPAX to Manufacture Product is not determined upon testing by WCH to be outside the scope of XXXXX or any Patent that issues based thereon; or (iv) if a
-30-
decision is rendered in favor of Schering in any of the Patent Litigations either by a United States District Court and the time for an appeal has expired without an appeal having been filed, or by the United States Court of Appeals for the Federal Circuit and the time for an appeal has expired without an appeal having been filed, or by the United States Supreme Court. Notwithstanding the foregoing, (a) if a United States District Court renders a decision in favor of Schering with respect to the ‘716 Patent, then WCH’s obligation to make any further payments under Section 6.1 shall be suspended until such time as the decision in favor of Schering is reversed and a final decision from which no appeal can be taken is entered in IMPAX’s favor in such case; and (b) if a United States District Court renders a decision in favor of Schering with respect to the ‘697 Patent, then WCH’s obligation to make any further payments under Section 6.1 with respect to the D-24 Product shall be suspended until such time as the decision in favor of Schering is reversed and a final decision from which no appeal can be taken is entered in IMPAX’s favor in such case. Such termination shall not give rise to the payment of any penalty, damages or indemnity by WCH and WCH shall have no further rights to such Product so terminated. 9.3.4 In addition to, and not in limitation on, WCH’s rights under Section 9.2.3, WCH may terminate this Agreement with respect to any Product in a country (other than the United States which is provided for in Section 9.3.3) in which a Regulatory Authority has taken any action (with respect to such action either (a) no appeal can be taken, or the time for an appeal has expired without an appeal having been filed or an appeal has been filed and such Regulatory Authorities’ action has been upheld or (b) such action is a final regulatory action), the result of which is to prohibit the Manufacture, storage, importation, sale, offer for sale or use of the Products or a Product respectively, or an action is commenced alleging that the Manufacture, storage, importation, sale, offer for sale or use of the Products or a Product, respectively, infringe any Patent or other proprietary or protected right of any Third Party in such country. Such termination shall not give rise to the payment of any penalty, damages or indemnity by WCH and WCH shall have no further rights to such country so terminated. 9.4 Termination by IMPAX . 9.4.1 If IMPAX requests in writing that WCH file an application for Regulatory Approval for a Product in the OTC Field in a particular country in the Exclusive or Semi-Exclusive Territory (other than the United States) and if WCH does not commence using Commercially Reasonable Efforts to submit such an application within six (6) months, then IMPAX, at its option and as its sole and exclusive remedy, may terminate this Agreement with respect to such Product in such country (thereby modifying the Exclusive or Semi-Exclusive Territory to exclude such Product in such country) by providing six (6) months’ written notice to WCH, and WCH shall have no further rights to such Product in such country. Such modification shall not give rise to the payment of any penalty, damages or indemnification by either Party. 9.4.2 If WCH fails to use Commercially Reasonable Efforts to Launch a Product in a country of the Exclusive or Semi-Exclusive Territory within one (1) year after having obtained FTO Status for such Product in the OTC Field in such country, IMPAX, at its option and as its sole and exclusive remedy, may terminate this Agreement with respect to such Product in such country
-31-
(thereby modifying the Exclusive or Semi-Exclusive Territory to exclude such Product in such country) by providing six (6) months’ written notice to WCH. Such modification shall not give rise to the payment of any penalty, damages or indemnification by either Party and WCH shall have no further rights to such Product in such country. 9.5 Effect of Expiration or Termination . 9.5.1 Upon expiration of this Agreement pursuant to Section 9.1 (i) or (ii) or termination by WCH pursuant to Section 9.2.2, 9.3.1(v) or 9.3.1(vi) or termination by IMPAX pursuant to 9.2.3 ( provided that in the case of termination by IMPAX pursuant to Section 9.2.3 only, (i) upon IMPAX’s written request prior to termination by IMPAX, WCH shall cooperate with IMPAX in attempting to identify a means to address or avoid the subject infringement, (ii) the license set forth below is limited to the countries or geographic area to which such termination applies and (iii) WCH provides IMPAX with an indemnity agreement acceptable to IMPAX for any damages assessed against IMPAX, arising out of WCH’s exercise of the license set forth below, for infringement of such Patent or other proprietary or protected right, such acceptance not to be unreasonably withheld or delayed), WCH shall have the fully paid-up, royalty free, perpetual, irrevocable (except that such license may be terminated pursuant to the proviso set forth below), non-exclusive license, with the right to grant sublicenses, to make, have made, market, promote, use, distribute, sell, have sold, import and export Products for the OTC Field within the Territory pursuant to the Regulatory Documents, the IMPAX Patents and IMPAX’s Technical Information (including manufacturing know-how); provided that if WCH breaches the terms of the license set forth in this Section 9.5.1 and fails to correct such breach within ten (10) days after notice in writing from IMPAX, IMPAX may terminate this license if such breach is continuing by notice in writing given at the end of such ten (10) day period. 9.5.2 Upon termination of this Agreement by WCH for an uncured material breach of this Agreement pursuant to Section 9.2.1, WCH shall have a fully paid up, royalty free, perpetual, irrevocable (except that such license may be terminated pursuant to the proviso set forth below), non-exclusive license, with the right to grant sublicenses, to make, have made, market, promote, use, distribute, sell, have sold, import and export Products for the OTC Field within the Territory pursuant to the Regulatory Documents, the IMPAX Patents and IMPAX’s Technical Information (including manufacturing know-how); provided that if WCH breaches the terms of the license set forth in this Section 9.5.2 and fails to correct such breach within ten (10) days after notice in writing from IMPAX, IMPAX may terminate this license if such breach is continuing by notice in writing given at the end of such ten (10) day period. 9.5.3 In the event that WCH terminates this Agreement under the circumstances described in Section 9.5.1 or 9.5.2, (i) IMPAX shall promptly but no later than within thirty (30) days after receipt of notice of such termination, furnish to WCH, on a non-exclusive basis, all of IMPAX’s Technical Information (including manufacturing know-how) as relates to Product for the OTC Field in the Territory and (ii) IMPAX shall, within thirty (30) days of a request by WCH, furnish to WCH and/or its Affiliates all Regulatory Documents which relate to Product for the OTC Field in the Territory. Upon WCH’s request, IMPAX shall within the same period deliver to WCH or its designees full copies, at WCH’s expense, (both paper and electronic,
-32-
where available) of any Regulatory Documents in IMPAX’s or its Affiliates’ possession or control and provide all technical assistance, at WCH’s cost, reasonably requested by WCH. IMPAX agrees to promptly execute and deliver any additional documents and instruments, and perform any additional acts, that may be reasonably necessary to effect this right. 9.5.4 Except as otherwise set forth in this Agreement, neither Party shall be entitled to any compensation whatsoever as a result of expiration or termination of this Agreement, but without limiting either Party’s damages for any breach of this Agreement. 9.5.5 Termination or expiration of this Agreement, in whole or in part, shall be without prejudice to the right of either Party to receive all payments accrued and unpaid at the effective date of such termination or expiration, without prejudice to the remedy of either Party in respect to any previous breach of any of the representations, warranties or covenants herein contained and without prejudice to any other provisions hereof which expressly or necessarily call for performance after such termination or expiration. 9.5.6 The following provisions shall survive the expiration or termination of this Agreement: Section 9.5 and Articles I, VII, VIII, X and XIV, in each case for the time periods and subject to the limitations set forth therein.
ARTICLE X CONFIDENTIALITY 10.1 Nondisclosure Obligation . Each of IMPAX and WCH shall use only in connection with the Manufacture of Product or otherwise in accordance with this Agreement and shall not disclose to any Third Party the Confidential Information received by it from the other Party pursuant to this Agreement, without the prior written consent of the other Party. The foregoing obligations shall survive for a period of five (5) years after the termination or expiration of this Agreement. These obligations shall not apply to Confidential Information that: (i) 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 business records; (ii) is at the time of disclosure or thereafter becomes published or otherwise part of the public domain without breach of this Agreement by the receiving Party; (iii) is subsequently disclosed to the receiving Party by a Third Party who has the right to make such disclosure; (iv) is developed by the receiving Party independently of the Confidential Information received from the disclosing Party and such independent development can be documented by the receiving Party; or
-33-
(v) is required by law, regulation, rule, act or order of any governmental authority or agency to be disclosed by a Party, provided that notice is promptly delivered to the other Party in order to provide an opportunity to seek a protective order or other similar order with respect to such Confidential Information and thereafter the disclosing Party discloses to the requesting entity only the minimum Confidential Information required to be disclosed in order to comply with the request, whether or not a protective order or other similar order is obtained by the other Party. 10.2 Permitted Disclosures . Each Party may disclose the other Party’s Confidential Information to its employees and Affiliates on a need- to-know basis and to its agents, counsel or consultants to the extent required to accomplish the purposes of this Agreement; provided that the recipient Party obtains prior agreement from such agents and consultants to whom disclosure is to be made to hold in confidence and not make use of such Confidential Information for any purpose other than those permitted by this Agreement. WCH may disclose IMPAX Confidential Information in connection with seeking Regulatory Approval of Products. Each Party will use at least the same standard of care as it uses to protect proprietary or confidential information of its own to ensure that such employees, agents, consultants, and Affiliates do not disclose or make any unauthorized use of the other Party’s Confidential Information, but in no event less than a reasonable degree of care. 10.3 Disclosure of Agreement . Neither IMPAX nor WCH shall release to any Third Party or publish in any way any non-public information with respect to the terms of this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed, provided that , either Party may disclose the terms of this Agreement (i) to the extent required to comply with applicable laws, including, without limitation the rules and regulations promulgated by the United States Securities and Exchange Commission; provided , further , that prior to making any such disclosure, the Party intending to so disclose the terms of this Agreement shall (a) provide the nondisclosing Party with written notice of the proposed disclosure and an opportunity to review and comment on the intended disclosure which is reasonable under the circumstances and (b) shall seek confidential treatment for as much of the disclosure as is reasonable under the circumstances, including, without limitation, seeking confidential treatment of any information as may be requested by the other Party; or (ii) to one or more Third Parties and/or their advisors in connection with a proposed spin-off, joint venture, divestiture, merger or other similar transaction involving all, or substantially all, of the assets or business of the disclosing Party to which this Agreement relates or to lenders, investment bankers and other financial institutions of its choice solely for purposes of financing the business operations of such Party; provided ,
-34-
further , that either (a) upon the written consent of the other Party or (b) if the disclosing Party uses reasonable efforts to obtain a signed confidentiality agreement with such Third Parties with respect to such information on terms no less restrictive than those contained in this Article X. 10.4 Publicity . Subject to Section 10.3, all publicity, press releases and other announcements relating to this Agreement or the transactions contemplated hereby shall be reviewed in advance by, and shall be subject to the approval of, both Parties.
ARTICLE XI TRADEMARKS; INFRINGEMENT OF IMPAX PATENTS 11.1 Trademarks . WCH may advertise, promote, market and sell Products under any trademarks, copyrights, tradenames or logos, whether registered or unregistered, selected by WCH in its sole discretion. IMPAX shall have no right, title or interest in or to any such trademark, copyright, tradename or logo. So long as WCH or any Affiliate of WCH shall have any interest in any such trademark, copyright, tradename, or logo, whether registered or unregistered, whether as proprietor, owner, or licensee in any country of the world, IMPAX shall not adopt, use, apply for registration, register or own such trademark, copyright, tradename, or logo, or any such item confusingly similar thereto in any country of the world, or take any action which, in WCH’s sole opinion, weakens or undermines WCH’s proprietary rights. 11.2 Infringement of IMPAX Patents . 11.2.1 Each Party shall promptly report in writing to the other Party during the term of this Agreement any known infringement or suspected infringement of any of the IMPAX Patents in the Territory by manufacture, use or sale of a Product on a commercial scale in derogation of the rights granted to WCH hereunder (hereinafter, a “Related Infringement”) of which it becomes aware, and shall provide the other Party with all available evidence supporting said infringement or suspected infringement. 11.2.2 Except as provided in Section 11.2.4, IMPAX shall have the right to initiate an infringement or other appropriate suit anywhere in the Territory against any Third Party who at any time has infringed, or is suspected of infringing, any of the IMPAX Patents. IMPAX shall give WCH sufficient advance notice of its intent to file any suit on account of a Related Infringement and the reasons therefor, and shall provide WCH with an opportunity to make suggestions and comments regarding such suit. IMPAX shall keep WCH promptly informed, and shall from time to time consult with WCH regarding the status of any such suit on account of a Related Infringement and shall provide WCH with copies of all documents filed in, and all written communications relating to, such suit. 11.2.3 IMPAX shall have the sole and exclusive right to select counsel for any suit referred to in Section 11.2.2 and shall, except as provided below, pay all expenses of the suit, including without limitation attorneys’ fees and court costs. In the event that WCH elects
-35-
not to contribute to the costs of such litigation, IMPAX shall be entitled to retain any damages, royalties, settlement fees or other consideration for infringement resulting therefrom. If necessary, WCH shall join as a Party to the suit but shall be under no obligation to participate except to the extent that such participation is required as the result of being a named Party to the suit. WCH shall offer reasonable assistance to IMPAX therewith at no charge to IMPAX except for reimbursement of reasonable out-of-pocket expenses incurred in rendering such assistance. WCH shall have the right to participate and be represented in any such suit by its own counsel at its own expense. IMPAX shall not settle any such suit on terms which grant any license to any other Party in derogation of the rights granted to WCH hereunder without obtaining the prior written consent of WCH, which consent shall not be unreasonably withheld. 11.2.4 In the event that IMPAX elects not to initiate an infringement or other appropriate suit pursuant to Section 11.2.2 above on account of a Related Infringement after reasonable efforts to abate such Related Infringement without litigation have failed, but in no event later than one hundred and twenty (120) days after WCH’s notice to IMPAX under Section 11.2.1, IMPAX shall promptly advise WCH of its intent not to initiate such a suit, WCH shall have the right, at the expense of WCH, of initiating an infringement or other appropriate suit against the Party or Parties committing such Related Infringement. In exercising its rights pursuant to this Section 11.2.4, WCH have the sole and exclusive right to select counsel and shall, except as provided below, pay all expenses of the suit including without limitation attorneys’ fees and court costs. IMPAX, in its sole discretion, may elect within sixty (60) days after the commencement of such litigation, to contribute to the costs incurred by WCH in connection with such litigation, and, if it so elects, any damages, royalties, settlement fees or other consideration received by WCH as a result of such litigation shall be shared by WCH and IMPAX pro rata based on their respective sharing of the costs of such litigation provided that such pro rata share shall not exceed fifty percent (50%) unless WCH has consented to a higher share in writing. In the event that IMPAX elects not to contribute to the costs of such litigation, WCH shall be entitled to retain any damages, royalties, settlement fees or other consideration for infringement resulting therefrom. If necessary, IMPAX shall join as a Party to the suit but shall be under no obligation to participate except to the extent that such participation is required as a result of being named a Party to the suit. At WCH’s request, IMPAX shall offer reasonable assistance to WCH in connection therewith at no charge to WCH except for reimbursement of reasonable out-of- pocket expenses incurred in rendering such assistance. IMPAX shall have the right to participate and be represented in any such suit by its own counsel at its own expense.
ARTICLE XII FORCE MAJEURE 12.1 Force Majeure . If the production, delivery, acceptance, or use of Products specified for delivery under this Agreement, or the performance of any other obligation of one of the Parties hereunder is prevented, restricted or interfered with by reason of any cause or event beyond the reasonable control of such Party and without the fault or negligence of such Party, the Party so affected, upon prompt notice to the other Party (including a statement of impact), shall be excused from performing such obligation during the continuance of such event. If such event continues for a period of ninety (90) consecutive days or more the other Party may terminate this Agreement by
-36-
notice in writing provided that such event of force majeure is continuing. If as a result or any of the force majeure events described above, IMPAX is unable to fully supply WCH’s orders hereunder, IMPAX shall allocate all available quantities of Materials and Products to WCH in the ratio that the quantities ordered by WCH in twelve (12) month period immediately preceding such force majeure event bears to IMPAX’s requirements for it own use and for supply to Third Parties for that same period; provided that if this Agreement has not been in effect for a full twelve (12) month period, then such shorter period shall be used in lieu of a twelve (12) month period.
ARTICLE XIII NOTICES 13.1 Ordinary Notices . Correspondence, reports, documentation, and any other communication in writing between the Parties in the course of ordinary implementation of this Agreement shall be delivered by hand, sent by facsimile or overnight courier to the employee or representative of the other Party who is designated by such other Party to receive such written communication at the address or facsimile numbers specified by such employee or representative. 13.2 Extraordinary Notices . Extraordinary notices and communications (including without limitation, notices of termination, force majeure, material breach, change of address, requests for disclosure of Confidential Information, claims or indemnification) shall be in writing and sent to each Party by prepaid registered or certified airmail, or by facsimile confirmed by prepaid registered or certified airmail letter (and shall be deemed to have been properly served to the addressee upon receipt of such written communication) to the address set forth in Section 13.3 or such other address as notified in writing by such Party to the other Party. 13.3 Addresses . If to WCH: Wyeth Consumer Healthcare Five Giralda Farms Madison, New Jersey 07940 Attention: President Facsimile No.: 973-660-7199 With a copy to: Wyeth Five Giralda Farms Madison, New Jersey 07940 Attention: General Counsel Facsimile No.: 973-660-7050 If to IMPAX:
-37-
Impax Laboratories, Inc. 3735 Castor Avenue Philadelphia, Pennsylvania 19124 Attention: Barry R. Edwards, Co-Chief Executive Officer Facsimile No.: 215-289-5932 With a copy to: Sol Genauer, Esq. Blank, Rome, Comisky & McCauley LLP One Logan Square Philadelphia, Pennsylvania 19103-6998 Facsimile No.: 215-569-5628
ARTICLE XIV MISCELLANEOUS 14.1 Governing Law . This Agreement shall be construed in accordance with and governed by the law of the State of New York, without giving effect to its conflict of laws provisions. 14.2 Equal Opportunity Clause . The Equal Opportunity Clause required by Executive Orders 11246, as amended (41-CFR 60-1.4) and 11375, the Employment Assistance to Veterans Clause required by Executive Order 11701 (41 CFR 60-250.4), the Vietnam Era Veteran Readjustment Act of 1972, the Employment of the Handicapped Clause required by the Rehabilitation Act of 1973 (41 CFR 60-741.4) and the Americans with Disabilities Act of 1991 are part of this Agreement and binding upon each Party unless exempted by rules, regulations or orders of the Secretary of Labor. IMPAX agrees that the applicable clause with regard to the utilization of minority contractors set forth at 41 CFR 1-1.303 and the applicable clause with regard to the Utilization of Small Business Concerns and Small Business Concerns Owned and Controlled by Socially and Economically Disadvantaged Individuals set forth at 41 CFR 1-1.13 are incorporated herein by reference, as applicable. IMPAX agrees to provide information and documentation with respect to the foregoing to WCH upon request. 14.3 Assignment . This Agreement shall not be assignable or transferable by either Party hereto without the prior written consent of the other Party, except that either Party may assign this Agreement without the other Party’s consent to the successor or the transferee of all, or substantially all, of the Products, assets or business to which this Agreement relates or to one of its Affiliates; provided that if IMPAX is the assigning Party, IMPAX also transfers the Facility to such assignee. IMPAX shall not subcontract any of its work hereunder without WCH’s prior written consent and any such consent given by WCH shall not release IMPAX from its obligations hereunder. WCH’s sublicensing of its obligations under this Agreement shall not release WCH from its obligations hereunder. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their successors and permitted assigns.
-38-
14.4 Entire Agreement . This Agreement and all Exhibits attached hereto (as the same may be amended from time to time by the written agreement of the Parties) constitute the entire agreement between the Parties with respect to the subject matter hereof and supersedes all other documents, agreements, verbal consents, arrangements and understandings between the Parties with respect to the subject matter hereof. This Agreement shall not be amended orally, but only by an agreement in writing, signed by both Parties that states that it is an amendment to this Agreement. 14.5 Severability . If any term of this Agreement shall be found to be invalid, illegal or unenforceable, it is the intention of the parties that the remainder of this Agreement shall not be affected thereby; provided that neither Party’s rights under this Agreement are materially adversely affected. 14.6 Independent Contractor . IMPAX shall act as an independent contractor and neither Party shall have any authority to represent or bind the other Party in any way. 14.7 No Waiver . Any waiver by one Party of any right or such Party or obligation of the other Party must be in writing signed by the Party waiving such right or performance of such obligation and shall not operate as a waiver of any subsequent right or obligation. 14.8 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same Agreement. 14.9 Compliance Issues . The Parties acknowledge that the export of technical data, materials or products is subject to the exporting Party receiving the necessary export licenses and that the Parties cannot be responsible for any delays attributable to export controls which are beyond the reasonable control of either Party and any such delay shall not constitute a force majeure event or constitute a breach of this Agreement. The Parties agree that regardless of any disclosure made by the Party receiving an export of any ultimate destination of any technical data, materials or products, the receiving Party will not re-export either directly or indirectly, any technical data, material or products without first obtaining the applicable validated or general license from the United States Department of Commerce, FDA and/or any other agency or department of the United States Government as required. 14.10 HSR Filing . To the extent necessary, each of IMPAX and WCH shall file as soon as practicable after the date this Agreement was signed by each of the Parties, with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the United States Department of Justice (the “Antitrust Division”) the notification and report form (the “Report”) required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (“HSR Act”) with respect to the transactions as contemplated hereby and shall reasonably cooperate with the other Party to the extent necessary to assist the other Party in the preparation of its Report and to proceed to obtain necessary approvals under the HSR Act, including but not limited to the expiration or earlier termination of any and all applicable waiting periods required by the HSR Act. Each Party shall bear its own expenses, including, without limitation, legal fees, incurred in connection with preparing such
-39-
filings. If a Report is filed by the Parties under the HSR Act, then the Effective Date shall be the date upon which the necessary approvals have been obtained under the HSR Act or that the notice and waiting period under the HSR Act has expired or been terminated. If the Parties determine that no Report is required to be filed under the HSR Act, the Effective Date shall be the date first written above. In the event that a Report is required to be filed under the HSR Act, either Party may, prior to the Effective Date, terminate this Agreement by written notice to the other Party, if, within one hundred twenty (120) days after this Agreement is signed by each of the Parties, approval of the transactions contemplated by this Agreement under the HSR Act has not been obtained or the notice and waiting period, as may be extended by the FTC, under the HSR Act has not expired without adverse action regarding this Agreement or the transactions contemplated hereby. If this Agreement is terminated pursuant to this Section 14.10, then, notwithstanding any provision in this Agreement to the contrary, neither Party shall have any further obligation to the other Party with respect to the subject matter of this Agreement except for the obligations set forth in Article X hereof, which obligations shall survive any termination of this Agreement.
-40-
IN WITNESS WHEREOF , the Parties have executed this Agreement as of the Effective Date.
WYETH, acting through its Wyeth Consumer Healthcare Division
By: /s/ Gregory Bobyock Name: Gregory Bobyock Title: Vice President of Global Business
Development
IMPAX LABORATORIES, INC.
By: /s/ Barry R. Edwards Name: Barry R. Edwards Title: Co -Chief Executive Officer
-41- EXHIBIT 10.14.1
AMENDMENT TO THE DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT BETWEEN WYETH, ACTING THROUGH ITS WYETH CONSUMER HEALTHCARE DIVISION, AND IMPAX LABORATORIES, INC. This Amendment, effective as of the last date of signature appearing below (the “Effective Date”), to the Development, License and Supply Agreement, dated as of June 1, 2002 and amended by letters dated November 19, 2002, April 23, 2003 and May 15, 2003, for Loratadine/Pseudoephedrine Combination Tablets (the “Agreement”) is entered into by and between Wyeth, acting through its Wyeth Consumer Healthcare Division (hereinafter called “WCH”), and Impax Laboratories, Inc. (hereinafter called “Impax”).
PURPOSE WHEREAS, under the Agreement, Impax has agreed to supply Wyeth with D-24 Product (as defined in the Agreement); WHEREAS, Impax’s ANDA No. 75-989 seeking FDA approval of D-24 Product was submitted on September 14, 2000 and was accepted for filing by the FDA on September 18, 2000; WHEREAS, on January 2, 2001, Schering Corporation (“Schering”) commenced an action against Impax in the United States District Court for the District of New Jersey captioned Schering Corporation v. Impax Laboratories, Inc., Civil Action No. 01-0009 (JWB) (GDH) (the “Action”), alleging that Impax infringed and is infringing Schering’s U.S. Patent Nos. 5,314,697 and 4,659,716 through its filing of ANDA No. 75 -989; WHEREAS, in the Action, Impax answered that it did not infringe Schering’s patents and that those patents were invalid, and sought a declaration that the D-24 Product did not and would not infringe Schering’s patents and that those patents were invalid; WHEREAS, on August 8, 2002, the district court handling the Action entered an order granting Defendants’ Motion for Summary Judgment with respect to U.S. Patent No. 4,659,716 and ruled that claims 1 and 3 of that patent were invalid. On August 1, 2003, a panel of the U.S. Court of Appeals for the Federal Circuit affirmed the lower court’s order concerning U.S. Patent No. 4,659,716. On August 15, 2003, Schering filed a petition for rehearing and rehearing en banc of that panel decision which was denied in November 2003; WHEREAS, Impax and Schering have settled the remaining claims in the Action on mutually agreeable terms without admission of liability by either, on the terms and subject to the conditions set forth in the Settlement and License Agreement, dated October 24, 2003, between Impax and Schering (the “Settlement Agreement”);
-1-
WHEREAS, pursuant to the Settlement Agreement Schering granted Impax the right under the Patent (as such term is defined in the Settlement Agreement) to have up to two Impax Entities (as such term is defined in the Settlement Agreement) offer to sell, sell, import, package, and/or distribute Impax Product (as such term is defined in the Settlement Agreement) manufactured by Impax or an Impax Affiliate (as such term is defined in the Settlement Agreement); and WHEREAS, Impax desires to convert the exclusive license granted under the Agreement with respect to the D-24 Product in the United States, its territories and possessions, to a semi-exclusive license allowing Impax to authorize one other Impax Entity to offer to sell, sell, import, package, and/or distribute Impax Product and WCH is willing to agree to such amendment on the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein and intending to be legally bound hereby, the parties hereby agree as follows: 1. Unless otherwise expressly defined herein, all capitalized terms used herein shall have the same meaning as defined in the Agreement. 2. Section 1.1 of the Agreement is hereby amended to add the following new definitions: “1.1.61 ‘Settlement Agreement’ means that certain Settlement Agreement, dated as of October 24, 2003, between IMPAX and Schering Corporation relating to the D-24 Product and the settlement of the claims raised in Schering Corp. v. Impax Laboratories, Inc., Civil Action No. 01 -0520 (D.N.J.).” “1.1.62 ‘Impax Entity’ has the meaning set forth in the Settlement Agreement.” “1.1.63 ‘Impax Product’ has the meaning set forth in the Settlement Agreement.”
-2-
3. Section 2.1.1 of the Agreement is amended to read in its entirety as follows: “2.1.1 IMPAX hereby grants to WCH an exclusive license within the Exclusive Territory and a semi-exclusive license within the Semi- Exclusive Territory, both with the right to grant sublicenses, under the IMPAX Patents and IMPAX’s Technical Information and Regulatory Documents, to market, promote, use, distribute, sell, have sold, import and export Products for the OTC Field during the Term of this Agreement. WCH shall notify IMPAX in writing prior to having the name of any Third Party on a Product label. IMPAX hereby agrees that WCH is an Impax Entity within the meaning of Section 2.1 of the Settlement Agreement, and that WCH may, while acting as an Impax Entity, offer to sell, sell, import, package and/or distribute the D-24 Product (the “Rights”). WCH understands that the Settlement Agreement does not authorize WCH, as an Impax Entity, to manufacture or have manufactured the D-24 Product or to sublicense the Rights. Notwithstanding the exclusive license set forth above, IMPAX shall be permitted to Manufacture and sell (i) the D-12 Product to Schering Corporation in the United States, its territories and possessions and (ii) the D-24 Product to one other Impax Entity who is authorized only to offer to sell, sell, package, and/or distribute D-24 Product in the United States, its territories and possessions in compliance with the Settlement Agreement.” 4. Section 2.3 of the Agreement is amended to read in its entirety as follows: “During the Term, IMPAX and its Affiliates shall only sell Product for the OTC Field in the Exclusive Territory to WCH and shall not market, promote, use, distribute, sell, have sold, import, export, make or have made either a twelve-hour or twenty-four hour, extended release Loratadine and Pseudoephedrine combination product (other than the Products) which is, in dosage strength, identical to either Product (a “Competing Product”) to a Third Party for the OTC Field in the Exclusive Territory. Notwithstanding the foregoing, IMPAX shall be permitted (i) to Manufacture and sell D-12 Product to Schering Corporation in the United States, its territories and possessions; (ii) to Manufacture and sell D-24 Product to one other Impax Entity authorized to offer to sell, import, package, and/or distribute D-24 Product in the United States, its territories and possessions in compliance with the Settlement Agreement; and (iii) to market, promote, use, distribute, sell, have sold, import, export, make or have made a Competing Product that IMPAX or its Affiliate acquires through an acquisition, divestiture, merger, joint venture or other business combination, provided that such Competing Product did not account for more than seventy percent (70%) of the sales of the business acquired by IMPAX or its Affiliate in such transaction during the twelve (12) month period immediately preceding the consummation of such transaction.”
-3-
5. The last sentence of Section 4.2 is hereby amended in its entirety to read as follow: “IMPAX shall use Commercially Reasonable Efforts to allocate capacity at the Facility to WCH so that it can supply WCH with (i) three million (3,000,000) tablets of D-12 Product per calendar month and (ii) up to three million (3,000,000) tablets per month of WCH’s forecasted requirements of the D-24 Product on a priority basis over the other Impax Entity.” 6. Section 6.3 of the Agreement is hereby amended by adding new subsection 6.3.6 as follows: “6.3.6 If WCH receives an offer for supply of D-24 Product at a price lower than the price for D-24 Product then in effect hereunder and WCH informs IMPAX of such offer, within thirty (30) days thereafter either (i) IMPAX shall agree to meet such lower price for a quantity of D-24 Product equal to the quantity offered by such other supplier or (ii) WCH shall be free to source D-24 Product from such other supplier and in such latter event the quantity of D-24 Product that WCH is obligated to purchase hereunder pursuant to Section 4.1 of this Agreement shall be commensurately reduced and WCH shall- be relieved of its non-compete obligation pursuant to Section 2.4 of this Agreement to the same extent.” 7. Subsections (iii), (v), (vii), (ix) and (xi) of Sections 6.1 of the Agreement are hereby amended to read in their entirety as follows:
“(iii) Placement on: stability of a D -24 Product pilot batch in WCH ’s consumer blister packaging $37,963 ”
“(v) Filing with FDA an ANDA supplement/amendment for D-24 Product to support 24 month expiry based on stability studies and WCH ’s consumer blister packaging $50,617 ”
“(vii) WCH’s acceptance of successful scale-up and validation (based on WCH’s approval of final validation report) of D -24 Product $75,926 ”
“(ix) The latter to occur of (a) January 1, 2003 or (b) final D-24 Product ANDA approval by FDA with WCH’s consumer labeling and blister packaging $227,778 ”
“(xi) The latter to occur of (a) January 1, 2003 or (b) Launch of the D -24 Product by WCH in the United States $632,716 ” 8. Section 7.2.1(1) of the Agreement is amended to add thereto a new subsection (f) that reads as follows:
-4-
“;and (f) in the case of D-24 Product, constitute Impax Products within the meaning of the Settlement Agreement.” 9. Paragraph II of Section 9.3.2 of the Agreement is amended to read in its entirety as follows: “II. D-24 Product If on or before the date on which notice of termination is given for the D-24 Product, the event described in Section 6.1(ix) has not occurred $227,778 or If on or before the date on which notice of termination is given for the D-24 Product, the event described in Section 6.1(ix) has occurred but the event described in Section 6.1(xi) has not occurred $341,667 or If on or before the date on which notice of termination is given for the D-24 Product, the event described in Section 6.1(xi) has occurred Zero” 10. All other terms and conditions of the Agreement are hereby confirmed and shall remain in full force and effect. In the event of any conflict with the provisions of this Amendment and any of the provisions of the Agreement, the provisions of this Amendment shall control.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
-5-
IN WITNESS WHEREOF, the undersigned have executed this Amendment. WYETH, acting through its Wyeth Consumer Healthcare Division
By: /s/ Gregory E. Bobyock Name: Gregory E. Bobyock Title: Vice President
Global Business Development Date: June 29, 2004
IMPAX LABORATORIES, INC.
By: /s/ David S. Doll Name: David S. Doll Title: Sr. Vice President, Sales & Mktg Date: July 9, 2004
-6- EXHIBIT 10.14.2
AMENDMENT TO THE DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT BETWEEN WYETH, ACTING THROUGH ITS WYETH CONSUMER HEALTHCARE DIVISION, AND IMPAX LABORATORIES, INC. This Amendment, effective as of February 14, 2005 (the “Effective Date”), to the Development, License and Supply Agreement, dated as of June 1, 2002 and amended by letters dated November 19, 2002, April 23, 2003 and May 15, 2003 and amendment dated July 9, 2004, for Loratadine/Pseudoephedrine Combination Tablets (the “Agreement”) is entered into by and between Wyeth, acting through its Wyeth Consumer Healthcare Division (hereinafter called “WCH”), and Impax Laboratories, Inc. (hereinafter called “IMPAX”).
PURPOSE WHEREAS, under the Agreement, IMPAX has agreed to supply WCH with D-24 Product (as defined in the Agreement); WHEREAS, IMPAX and WCH wish to terminate the Agreement with respect to the D-24 Product only, all in accordance with the terms and subject to the conditions set forth in this Amendment. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein and intending to be legally bound hereby, the parties hereby agree as follows: 1. Unless otherwise expressly defined herein, all capitalized terms used herein shall have the same meaning as defined in the Agreement. 2. The Parties hereby agree that as of the Effective Date the Agreement shall be terminated with respect to the D-24 Product only. All references to the D-24 Product and any provisions of the Agreement which relate solely to the D-24 Product shall be deemed removed from the Agreement. Such termination shall not give rise to the payment of any penalty, damages or indemnification by either Party to the other Party and WCH shall have no further rights or obligations with respect to the D-24 Product, including, without limitation, any right or license to use any of IMPAX Confidential Information with respect to the D-24 Product. In full satisfaction of any and all obligations (past, present or future) that WCH has or may have with respect to the D-24 Product under the Agreement or otherwise, WCH agrees to pay IMPAX within thirty (30) days after the Effective Date, and IMPAX agrees to accept, the sum of Three Hundred Thousand Dollars ($300,000). In consideration of IMPAX executing this Amendment and agreeing to the terms herein, WCH agrees that IMPAX does not have any further
obligations to WCH (past, present or future) with respect to the D-24 Product under the Agreement. Nothing contained herein shall relieve either Party from its obligations to maintain confidentiality under the Agreement. 3. All other terms and conditions of the Agreement are hereby confirmed and shall remain in full force and effect. In the event of any conflict with the provisions of this Amendment and any of the provisions of the Agreement, the provisions of this Amendment shall control. IN WITNESS WHEREOF, the undersigned have executed this Amendment. WYETH, acting through its Wyeth Consumer Healthcare Division
By: /s/ Illegible Name: Title:
IMPAX LABORATORIES, INC.
By: /s/ David S. Doll Name: David S. Doll Title: Sr. Vice President, Sales and Marketing
-2- EXHIBIT 10.15 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
LICENSING, CONTRACT MANUFACTURING & SUPPLY AGREEMENT between SCHERING CORPORATION and IMPAX LABORATORIES, INC.
LICENSING, CONTRACT MANUFACTURING & SUPPLY AGREEMENT THIS AGREEMENT, effective as of the last date of signature appearing below (the “Effective Date”), is entered into by and between Schering Corporation, a corporation organized under the laws of New Jersey, with its principal office at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033 (hereafter called “Schering”), and Impax Laboratories, Inc., a corporation organized under the laws of Delaware, with its principal offices at 30831 Huntwood Avenue, Hayward, California 94550 (hereafter called “Impax”).
PURPOSE WHEREAS, Impax desires to manufacture and supply to Schering, and Schering desires to purchase from Impax, Schering’s orders of the Product for sale in the Territory (as hereinafter defined). NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained and intending to be legally bound hereby, the parties hereby agree as follows:
ARTICLE I DEFINITIONS In this Agreement, and in the exhibits to this Agreement the following terms, whether used in the singular or plural, shall have the respective meanings set forth below: 1.1. The term “Active Pharmaceutical Ingredient” shall mean loratadine and/or pseudoephedrine sulfate in bulk form conforming to the Active Pharmaceutical Ingredient Specifications. 1.2. The term “Active Pharmaceutical Ingredient Specifications” shall mean the specifications and quality control testing procedures for the Active Pharmaceutical Ingredient set forth in Exhibit 1.2 hereto which conforms to the ANDA for the Product, as amended from time to time by the mutual agreement of the parties hereto. 1.3. The term “Affiliate” shall mean any individual or entity directly or indirectly controlling, controlled by or under common control with, a party to this Agreement. For purposes of this Agreement, the direct or indirect ownership of over fifty percent (50%) of the outstanding voting securities of an entity, or the right to receive over fifty percent (50%) of the profits or earnings of an entity shall be deemed to constitute control. Such other relationship as in fact results in actual control over the management, business and affairs of an entity shall also be deemed to constitute control. 1.4. The term “Agreement” shall mean this agreement and any and all exhibits, appendices and other addenda attached hereto, including as they may be modified from time to time in accordance with the provisions of this Agreement.
1.5. The term “Approved Facilities” shall mean that facilities of Impax located at Buildings No. 1 and No. 2, 30831 Huntwood Avenue, Haywood, California 94545 and its facility located at 3735 Castor Avenue, Philadelphia, PA 19124 and referenced in the Health Registrations as an approved site for the Manufacture of the Product, including without limitation all of the equipment, machinery and facilities of Impax at such location that are used in the Manufacturing, testing, stability oversight, and storage of Product. 1.6. The term “ANDA” shall mean an abbreviated new drug application filed with the FDA seeking approval to market and sell a generic prescription or OTC pharmaceutical product in the Territory and any supplements and amendments, and any such approvals granted by the FDA based upon such application. 1.7. The term “CMC” shall mean the chemistry, manufacturing, and controls section(s) and data in the Health Registrations that cover the chemical composition of the Product and its components and the control and Manufacturing process for the Product, as amended or supplemented from time to time. 1.8. “Commercially Reasonable Efforts” means efforts and resources normally used by a party for a compound or product owned by it or to which it has rights, which is of similar market potential at a similar stage in its product life, taking into account the competitiveness of the marketplace, the proprietary position of the compound or product, the regulatory structure involved, the profitability of the applicable products, and other relevant factors. It is anticipated that the level of efforts and resources may change at different times during the product life cycle of a compound or product. 1.9. The term “Cure Price” shall mean the out-of-pocket cost to Schering for the Product Manufactured by Schering, an Affiliate of its or a Third Party, due to a Supply Failure, failure in Product quality or other failure to comply with the Product Specifications, which Cure Price shall not exceed 125% of the Price set forth on Exhibit 1.29. 1.10. The term “FCA” shall mean Free Carrier as that term is used in Incoterms 2000 and as further set forth in Section 5.2 hereof. 1.11. The term “FDA” shall mean the United States Food and Drug Administration, or any successor entity having jurisdiction over the transactions contemplated by this Agreement. 1.12. The term “FDCA” shall mean the Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§301-397, as amended. 1.13. The term “Force Majeure” shall mean any cause beyond the reasonable control of any non-performing party, including without limitation, , strikes, lockouts, inability to procure labor or material, fuels shortages, fires, explosions, earthquakes, riots, interference by civil or military authorities, terrorism, outbreak of war or insurgence, acts of war (declared or undeclared), sabotage, embargo, a national health emergency, or compliance with any order or regulation of any government entity acting with color of right.
1.14. The term “cGMPs” shall mean current good manufacturing practices for the methods to be used in, and the facilities and controls to be used for, the manufacture, testing, stability oversight, processing, packing and holding of drugs, as set forth in all applicable laws, rules and regulations in the Territory or as may otherwise be established by the FDA, including all amendments and supplements thereto, during the term of this Agreement. 1.15. The term “Health Registrations” shall mean the technical, medical and scientific licenses, registrations, authorizations and/or approvals of the Product (including the prerequisite manufacturing approvals or authorizations, marketing authorization based upon such approvals and pricing, Third Party reimbursement and labeling approvals related thereto) that are required by any national, regional, state or local regulatory agency, department, bureau or other governmental entity in the Territory, for the Manufacture, distribution, use or sale of Product in the Territory, as amended or supplemented from time to time, including, without limitation, an ANDA or NDA, for the Product, as amended or supplemented from time to time. 1.16. The term “Impax Know-How” shall mean the formulation for the Product, Impax’s technology related to slow release and/or sustained release tablet dosage forms, Impax’s ANDA for the Product (including the CMC portions thereof), and all other data, information, instructions, processes, procedures, assays and methods related to the Manufacture and/or testing of the Product which are owned or controlled by Impax as of the Effective Date. 1.17. The term “Initial Term” shall mean the period of time beginning on the Effective Date and ending three (3) years after the date of the first purchase of Product by Schering from Impax for sale in the Territory following receipt of Health Registration for the Product in the Territory. 1.18. The term “Intellectual Property” shall mean any patents, patent applications, trademarks, trademark applications, trade names, copyrights, trade secret rights, technology and all other intellectual property rights owned or controlled by a party that are related to the Product or the Manufacture or use thereof. With respect to Impax, Intellectual Property shall include, without limitation, the Impax Know-How and Impax’s rights to any Inventions. 1.19. The term “Inventions” shall mean any inventions, discoveries, or innovations, whether patentable or not, relating to or arising out of the use of the Impax Know-How in connection with the development and/or Manufacture of the Product by Impax. 1.20. The term “Laws” shall mean all applicable federal, state or local statutes or laws, as well as all rules and regulations promulgated thereunder, by any Regulatory Authorities in the Territory, unless context requires otherwise. Any reference to a particular law or regulation will be interpreted to include any revision of or successor to such statute, law, rule or regulation regardless of how it is numbered or classified. 1.21. The term “Loss” shall mean claims, liabilities, costs, damages, losses, judgments for damages, or expenses (including reasonable attorneys’ fees).
1.22. The term “Manufacture” “Manufactured” or “Manufacturing” shall mean all activities involved in the manufacture, packaging, handling, storage and testing of the Product in accordance with and pursuant to the terms of this Agreement. 1.23. The term “NDA” shall mean a new drug application filed with the FDA seeking approval to market and sell a new prescription or OTC pharmaceutical product in the Territory, and any such approvals granted by the FDA based upon such application. 1.24 The term “Orders” shall mean all quantities of the Product that shall be ordered by Schering for the Territory for research and development (including without limitation clinical trial materials), and for distribution, marketing (including samples), and sale of the Product in the Territory. 1.25. The term “Packaging Components” shall mean all materials and components used or incorporated in the final (primary and secondary) packaging of the Product for distribution and sale in the Territory . 1.26. The term “Product” shall mean a product containing the Active Pharmaceutical Ingredients in a twelve hour extended release tablet which is Manufactured in accordance with this Agreement and conforming to the Product Specifications as marketed as a product not requiring a prescription by a medical doctor or other health professional by Schering in the Territory. 1.27. The term “Product Specifications” shall mean the specifications and quality control testing procedures for the Product and as more fully set forth in Exhibit 1.27 hereto, as amended from time to time in accordance with the terms of this Agreement and consistent with the ANDA covering the Product. 1.28. The term “Proprietary Information” shall mean any scientific, technical, clinical, regulatory, marketing, financial or commercial information or data relating to the Product or the Manufacture or use thereof, that is disclosed by one Party to the other Party pursuant to this Agreement, or that is developed by a Party in the performance of its obligations under this Agreement. 1.29. The term “Price” shall mean the price as set forth on Exhibit 1.29 hereto for the Initial Term. After the Initial Term, the Price shall be determined as set forth in Section 6.1 hereof. 1.30. The term “Raw Materials” shall mean all raw materials, components, excipients, and Packaging Components, other than Active Pharmaceutical Ingredient, useful or necessary for the Manufacture of Product in accordance with this Agreement. 1.31. The term “Regulatory Authority” shall mean the applicable government regulatory authority in the Territory involved in granting the Health Registrations for the Product.
1.32. The term “Supply Failure” shall mean Impax’s inability on more than two occasions during the Initial Term or on more than two occasions during any renewal period of this Agreement or any period subsequent to such failures to Manufacture enough Product pursuant to the forecasts referred to in Section 3.3 to deliver no later than the delivery date set forth in the purchase order at least seventy-five percent (75%) of the Product ordered by Schering for one calendar month. 1.33. The term “Territory” shall mean the United States, and its commonwealths, territories and possessions. 1.34. The term “Third Party” shall mean any individual, corporation, trust, association, estate, partnership, joint venture, limited liability company, governmental entity or other legal entity other than Impax, Schering or their respective Affiliates.
ARTICLE II LICENSE FEE 2.1 License Fee . (a) In consideration of the initial fee and milestone payment set forth in this Section 2.1, Impax grants to Schering a non- exclusive license under Impax’s ANDA, know-how and other intellectual property as they relate to the Product and the other rights granted to Schering under this Agreement including, but not limited to the rights to obtain supply of, market and distribute the Product, for the Initial Term and any renewal term of this Agreement. (b)Within ten (10) business days of execution of this Agreement, Schering shall make an initial payment of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000); provided, however, in the event that Impax does not receive tentative ANDA approval for the Product by January 1, 2003, Impax shall immediately reimburse Schering such initial fee. As soon as commercially reasonable after receipt of tentative ANDA approval, Impax shall purchase, install and qualify additional manufacturing machinery at a cost of at least One Million Five Hundred Thousand Dollars ($1,500,000) for the purpose of increasing its capacity to produce the Product in accordance with its ANDA, as set forth on Exhibit 2.1(b). (c) Impax shall invoice Schering for its additional license payment of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000) (the “Final License Payment”) and Schering shall pay such amount with its payment of the initial invoice from Impax for the first commercial delivery of Product to Schering in accordance with this Agreement; provided, however, if the Product is not approved to be sold as Over-The Counter pharmaceutical product by the FDA (“OTC”) in the Territory on or prior to January 1, 2003, Schering shall not be required to pay the Final License Payment until such approval has been granted. In the event that the Product has not been approved to be sold OTC by November 30, 2003, Schering shall have the right to terminate the Agreement, with no further obligations from either party, provided, however, Schering must pay for any product delivered pursuant to firm purchase orders issued in accordance with Section 3.4 hereof. In the event that Impax has received final ANDA approval,
and Impax has fulfilled all of its obligations under the Agreement, but Schering has not placed a firm purchase order for Product by December 15, 2003, Schering shall pay Impax the Final License Payment on such date.
ARTICLE III SUPPLY OF PRODUCT 3.1 Supply of Product . Subject to the terms and conditions of this Agreement, Impax shall Manufacture and supply to Schering, and Schering shall purchase from Impax, the Product in accordance with Impax’s ANDA and in amounts to be determined by Schering in its sole discretion (but no less than batch size quantities); provided that Schering shall be required to purchase a minimum of XXXXX tablets of the Product during the twelve (12) month period beginning with the first shipment of Product from Impax for commercial sale by Schering. Notwithstanding the other provisions of this Section 3.1, Schering shall not be subject to such minimum purchase requirements until Impax has received approval to sell its Product OTC. Schering shall prepay 75% of the initial order; provided, however, that such order shall not exceed Schering’s initial three months’ forecast of supply of Product. Nothing herein shall be construed as restricting or limiting Schering’s right to manufacture the Product at Schering’s or its Affiliate’s facilities for use and/or sale in the Territory. 3.2 Supply of Raw Materials . Impax shall be responsible for procuring, at its own expense, the supply of all Raw Materials and Active Pharmaceutical Ingredient necessary for the Manufacture of Product in accordance with this Agreement. However, Schering shall have the right to supply or procure the supply of Active Pharmaceutical Ingredient at the fixed price to Impax set forth in Exhibit 3.1. 3.3 Good Faith Forecasts . Impax represents that it can adequately supply Schering with Product in accordance with the preliminary non- binding forecast as set forth in Exhibit 3.3. Although the forecast on Exhibit 3.3 does not obligate Schering to make any purchases of Product, the parties acknowledge that it represents a good faith estimate of possible orders by Schering for Product during the Initial Term and any renewal term. Within thirty (30) days after the Effective Date, Schering shall provide Impax with a written twelve (12) month forecast estimating the amounts to be supplied by Impax under this Agreement, and the desired delivery dates therefor. Impax shall be obligated to provide Product up to 125% of the most recent forecast (and use Commercially Reasonable Efforts to provide Product in excess of 125% of the most recent forecast), upon receipt of a Purchase Order for such amount, as described in Section 3.4. Thereafter, on or before the first day of each month during the term hereof, Schering shall provide Impax with an updated written rolling forecast estimating Schering’s purchases from Impax and the desired delivery dates therefor, for the succeeding twelve (12) month period. Such rolling forecasts shall include the forecast from the previously forecasted eleven (11) month period in addition to a forecast for the new month added. Such estimates shall be prepared in good faith, but shall not be binding on Schering, except that Schering shall place purchase orders for at least the quantity of products specified in the first three (3) months of each such rolling forecast. Schering shall not be responsible for any loss or expense incurred by Impax arising from such forecasts, except for such three (3) months’ purchase orders. The obligation to give estimates is acknowledged by the parties to be a material provision of this
Agreement. Accordingly, if Schering fails to give Impax an estimate after notice by Impax of such failure and Schering’s continuing failure to provide an estimate to Impax, Impax and Schering shall discuss the reasons for Schering’s failure and Impax will not decline to supply if Impax determines in its reasonable judgment that Schering has an adequate reason for its failure to furnish the estimate. 3.4 Purchase Orders . Schering shall issue to Impax firm purchase orders for each delivery, not later than twelve (12)weeks prior to the forecasted delivery date. In the event that Schering’s initial purchase order for Product exceeds XXXXX tablets, Schering shall issue to Impax a firm purchase order not later than six (6) months prior to the forecasted delivery date. Schering shall be obligated to purchase, and Impax shall be obligated to sell, such quantities of the Product as are set forth in the purchase order, on the delivery schedule set forth therein with packaging initially to be either in bulk or in bottles of 1000 tablets pursuant to the approved ANDA for the Product. In the event that the terms of any such purchase order are not consistent with this Agreement, the terms of this Agreement shall prevail in the event that the amount of the purchase order exceeds 125% of the good faith forecast, then Impax shall make all Commercially Reasonable Efforts to modify its production schedule so as to deliver such additional quantities of Product to Schering as soon as practicable. Impax shall promptly confirm receipt of the purchase order as well as the delivery dates contained in the purchase order by written acknowledgment. Notwithstanding the foregoing, Schering may change firm purchase order dock dates, only if changed at least —four (4) weeks prior to the original firm purchase order dock date, but any costs incurred by Impax as a result of such change shall be borne by Schering (subject to approval of such costs by Schering, such approval not to be unreasonably withheld) . In addition, Impax will consider requests for changes to firm purchase order dock dates with less than four (4) weeks prior notice, but Impax is under no obligation to agree to such changes. Such dock date changes shall in no way reduce Schering’s liability for such firm purchase orders. Also, Schering may change the Product Specifications of the Product, provided, however, that such changes shall in no way reduce Schering’s liability for such firm purchase order, and further provided, that Schering shall be responsible for all costs associated with such change to the Product Specifications and, provided further, that Impax may delay delivery of Products which are the subject of a change in Product Specifications for such reasonable period of time to enable Impax to comply with the changed Product Specifications. 3.5 Stoppage Due to Good Cause . Upon Schering’s written notice, Impax shall stop a scheduled production run of the Product, at no cost to Schering, provided that such request is based upon good cause. Good cause is defined as Impax’s failure to comply, or its inability to assure compliance with cGMPs, Health Registrations or any other applicable Regulatory Authority requirements, rules or regulations. Exercise by Schering of its rights under this Section 4.4 shall not prejudice any other rights or remedies that Schering may have under this Agreement or otherwise at law or equity. 3.6 Stoppage At Schering ’s Discretion . Upon Schering’s discretion and upon written notice, Impax shall stop a scheduled production run of the Product at no cost to Impax and Schering shall promptly reimburse Impax for any cost which Impax incurs as a result of such stoppage of production (subject to approval of such costs by Schering, such approval not to be unreasonably withheld).
3.7 Alternative Supply . Impax agrees to fully cooperate with Schering, at Schering’s request and expense, to establish a back-up facility for the manufacture of the Product at one of Schering’s, its Affiliate’s or Third Party’s manufacturing sites. Upon such request, Impax shall promptly initiate a complete technology transfer of the manufacturing process, procedures and standards used by Impax to Manufacture the Product so as to enable the back-up facility to manufacture the Product in accordance with the applicable Health Registrations for the Product. Impax and Schering shall use diligent efforts to ensure that the technology transfer is completed as soon as reasonably practicable. In the event that Schering decides to exercise its rights under this Section 3.7 and no Supply Failure or any other uncured material breach by Impax has occurred, Schering shall be obligated to pay Impax XXXXX per tablet of Product or tablet of Schering’s existing proprietary D-12 formulation manufactured by or for Schering for sale in the Territory during the Agreement; provided, however, Schering shall not be obligated to pay Impax for any Schering proprietary D-12 formulation product manufactured by Schering prior to the first shipment by Impax of Product to Schering for commercial sale in accordance with the Agreement. Any such payments due under this Section 3.7 shall be paid to Impax within sixty (60) days of the close of each calendar quarter within which the tablets were manufactured and shall be accompanied by a statement detailing the number of tablets manufactured and the calculation of the payment owed to Impax. Schering shall keep records in sufficient detail to enable Impax to verify the calculation of the number of tablets of Product manufactured during each quarter. Impax has the right, at its discretion and expense, but not more frequently than one (1) time per calendar year, to inspect, during ordinary business hours of Schering, records as may be necessary to verify Schering’s calculation of any payment due under this Section 3.7. 3.8 Capacity . Upon receipt of the forecasts provided for in Section 3.3, Impax shall confirm its ability to meet such demand with existing capacity. If Impax confirms that it is unable to meet such Schering forecast, the parties agree to negotiate revised forecasts or add capacity as set forth below. Impax further agrees that any funding for additional capacity to support the manufacture of the Product in accordance with the Agreement shall be born solely by Impax; provided, however, in the event that such forecasts require capacity in excess of existing capacity and such forecasts exceed by more than 25% the forecasts shown on Exhibit 3.3, Schering and Impax shall share equally in the documented costs to add such capacity.
ARTICLE IV DEVELOPMENT ACTIVITIES 4.1 Impax ’s Obligation . (a) Impax shall be responsible, at its expense, for all development and regulatory activities performed by or on behalf of Impax in connection with the preparation, filing and maintenance of the ANDA for the Product. (b) At Schering’s option and expense, but subject to Impax’s Manufacturing and Product development capabilities and capacity, Impax shall perform all development and regulatory activities agreed upon by the parties beyond those activities required by Section 4.1(a).
(c) Impax shall use its Commercially Reasonable Efforts to accelerate its development, Manufacturing and regulatory activities related to the Product to enable it to supply Product to Schering for sale in the Territory as soon as is reasonably practicable. (d) Subject to Section 3.8 hereof, Impax shall also purchase the necessary equipment and take all other necessary steps to enable it to supply Schering’s Orders for the Products. (e) Impax shall provide 300,000 tablets (in two deliveries of 150,000 tablets each) to be manufactured for stability testing purposes for currently unsubmitted bulk drum and blister packages; and Impax shall further provide stability testing services in support of commercialization of the Product in such packages. 4.2. Cost Reductions . The parties shall work together to develop cost reductions, but the foregoing does not constitute a guarantee by Impax of any cost reductions. Both parties agree that cost reductions may be possible by improvements in the technology for Manufacturing or by negotiating with regulatory authorities to achieve cost effective product specifications or by changes in regulatory standards applicable to manufacturing, among other reasons. Any such cost reduction program shall be expressly agreed to in writing by Impax and Schering prior to implementation and prior to any reduction in the price of the Product hereunder. In the event a cost reduction program is accepted, both parties agree to a sharing plan based upon the following conceptual guidelines: a) Any cost savings initiated by Schering related to independently negotiated material pricing, formula change or packaging changes shall be to Schering’s sole benefit. b) Any cost savings resulting from process changes initiated by Impax shall be allocated 75% to Impax and 25% to Schering. c) Any Raw Material cost savings resulting from joint sourcing strategies/synergies or by Impax sourcing activities shall be negotiated and shared with no less than 50% of such savings allocated to Schering.
ARTICLE V DELIVERY AND RELATED MATTERS 5.1 Certificate of Analysis . Impax shall provide Schering with each shipment of Product a certificate from Impax’s quality assurance department that includes the results of quality control testing in accordance with the Product Specifications and which indicates that the Product contained in the shipment meets the Product Specifications. Impax shall also notify Schering in writing of the specific storage conditions and any special handling procedures for the Product. 5.2 Risk of Loss . Delivery of each shipment of the Product shall be made FCA. Impax shall arrange for transportation of the Product to a destination designated by Schering and by a common carrier designated by Schering. Title to and risk of loss of the Product shall pass to Schering at the time of delivery to the carrier. Impax shall promptly invoice Schering for all
Product shipped. 5.3 Storage . Impax, at its own expense, shall maintain adequate and appropriately segregated facilities in accordance with cGMPs and Health Registrations at the Approved Facilities for storage of the Product pending delivery to the designated carrier pursuant to Section 5.2 hereof. 5.4 Delay and Failure to Supply . (a) In the event that Impax shall have reason to believe that it will be unable to supply Schering with the full quantity of the Product forecasted to be ordered or actually ordered by Schering in a timely manner, Impax shall promptly (and in any event within five (5) business days) notify Schering thereof. If Impax shall so notify Schering, or if Impax shall fail to provide Schering with adequate assurances of timely performance upon Schering’s request therefor (regardless of whether past performance has complied herewith or not), Schering and Impax shall promptly meet to discuss how to thereafter supply Product in a timely manner. If, however, Schering at any time determines in the exercise of its reasonable judgment that there will be a Supply Failure or that there is a Supply Failure, Schering or an Affiliate of Schering may (but shall not be obligated to) Manufacture such quantity of the Product or its equivalent that Impax is unable to produce or, alternatively, Schering may enter into a supply agreement with a Third Party to manufacture such quantity of the Product or its equivalent that Impax is unable to provide (taking into account minimum batch sizes and pricing efficiencies of such supplier), upon such terms and conditions as Schering shall determine in its sole discretion, whereupon Schering’s purchase obligation under Article IV hereof shall be adjusted accordingly. If the Cure Price for the Supply Failure is in excess of the Price, Schering shall invoice Impax for an amount equal to the excess of the Cure Price over the Price and provide reasonable documentation evidencing the Cure Price to Impax with such invoice. Impax shall pay such invoice within 30 days and such payment obligation shall constitute Impax’s sole and exclusive liability for claims under this Section 5.4. (b) In the event that any Supply Failure shall be caused by a Force Majeure, Schering or an Affiliate of Schering may (but shall not be obligated to) Manufacture the Product or, alternatively, Schering may enter into a supply agreement with a Third Party to purchase such quantity of Product or its equivalent that Impax is unable to produce, upon such terms and conditions as Schering shall determine in its sole discretion, whereupon Schering’s purchase obligation under Article IV hereof shall be adjusted accordingly and Impax shall not be required to pay the Cure Price. (c) In the event of a Supply Failure under Section 5.4 (a) or (b) above, Impax shall exercise Commercially Reasonable Efforts to resume production as quickly as possible and shall notify Schering in writing upon resumption of production, whereupon it shall supply Schering with Product with such modified requirements for the Product as Schering may have for the remaining term of this Agreement.
(d) The failure by Impax on more than two occasions during the Initial Term or on more than two occasions during any renewal period of this Agreement or any period subsequent to such failures to fill in a timely manner at least 75% of any delivery specified on a purchase order placed by Schering pursuant to Article IV of this Agreement shall, subject to the terms of Section 16.2, be a material breach of this Agreement. 5.5 Rejection . If Schering claims that any shipment of Product did not, at the time of delivery to the carrier designated by Schering, meet the warranties in Section 12.2(b), (c), (d), (e)(ii), e(v) or (f) or that Impax did not comply with the covenants in Section 12.1, Schering shall notify Impax. If Impax agrees with Schering’s claim, Impax at its option shall either promptly replace such Product or reimburse Schering for any payment Schering may have made to Impax for such Product and for any out-of-pocket expense Schering may have incurred with respect thereto prior to Schering’s discovery of the defect, including without limitation shipping, insurance, taxes, and if applicable, packaging costs. If Schering and Impax are unable to agree as to whether such Product met the warranties or whether Impax complied with the covenants, the parties shall cooperate to have the Product in dispute analyzed by an independent Third Party testing laboratory of recognized repute jointly selected by Schering and Impax. If the Product is determined by such Third Party to meet the Product Specifications, then Schering shall bear the cost of the independent laboratory testing and pay for the Product in accordance with this Agreement. If the Product is determined not to have met the Product Specifications at time of delivery, then Impax shall bear the cost of the independent laboratory testing, and Impax shall, at Schering’s election, either replace the rejected Product as soon as possible but no later than within sixty (60) days after the date of such determination, at no cost to Schering, or refund or credit, as designated by Schering, the price paid for such Product plus any applicable delivery charge, within sixty (60) days after written notice from Schering. Such laboratory costs, refund, credit or replacement shall constitute Impax’s sole and exclusive liability for claims under this Section 5.5.
ARTICLE VI PAYMENT 6.1 Price . The Price to be paid by Schering to Impax for the Product during the Initial Term shall be as set forth on Exhibit 1.29 hereto, and shall be made in United States dollars within thirty (30) days from date of receipt of invoice therefor for Product received by Schering. After the Initial Term, the Price to be paid by Schering to Impax for the Product may be increased for any increase in the United States Consumer Price Index for material, labor and overhead costs during the immediate preceding year (excluding the fixed costs set forth in Exhibit 1.29), but in no event shall such cost increase by more than a total of three percent (3%) for such year over the Price at the end of the immediate preceding year. 6.2 Taxes . Impax and Schering agree to cooperate in order to minimize, in the manner permitted under applicable tax and customs laws and regulations, the taxes (including value-added taxes) and duties associated with the importation and/or exportation of the Active Pharmaceutical Ingredient and the Product, as the case may be.
ARTICLE VII APPROVAL SUPPORT; REGULATORY MATTERS 7.1 Approval Support . Impax shall produce stability batches and validation batches,
engage in various development activities and perform various tests as necessary for receipt of the Health Registrations in the Territory, including without limitation, being prepared for the pre-approval inspections by the Regulatory Authorities and performing the other activities set forth in Exhibit 7.1 hereto. 7.2 Filing and Maintenance of the Health Registrations . Impax shall be responsible for the preparation, filing and maintenance of the ANDA for the Product, including without limitation the CMC sections and shall promptly undertake to qualify bulk supply of Product in drums. In the event Impax subsequently modifies any relevant Health Registration (or the CMC) for which it is responsible, it shall promptly notify Schering and provide it with copies of such Health Registration (or CMC) supplements or amendments. 7.3 Specifications Amendments . Except to the extent specifically required by relevant Health Authorities, Impax shall not modify the Product Specifications without Schering’s prior written approval, such approval not to be unreasonably withheld. 7.4 Impax Approvals . Except as otherwise specifically set forth herein, Impax shall be responsible for obtaining and maintaining all approvals from the Regulatory Authorities and any other governmental authorities required in connection with the performance of its obligations hereunder. 7.5 Complaints As soon as practical after the Effective Date (and in any event within one hundred twenty (120) days), Impax and Schering shall negotiate in good faith and agree upon mutually acceptable guidelines and procedures for investigating, responding to and reporting product complaints. Notwithstanding any provisions of Section 7.5 and 7.6, Impax is not relieved of any of its responsibilities as the ANDA holder of the Product. Accordingly, Impax shall perform all of its obligations in compliance with all applicable laws, rules and regulations, including without limitation, FDA regulations. 7.6 Adverse Events . As soon as practical after the Effective Date (and in any event within one hundred twenty (120) days), Impax and Schering shall negotiate in good faith and agree upon mutually acceptable guidelines and procedures for adverse drug event information exchange and reporting.
ARTICLE VIII QUALITY CONTROL AND REGULATORY COMPLIANCE 8.1 Facility Compliance and Related Matters. Impax shall maintain the Approved Facility and shall conduct all Manufacturing in compliance with all applicable laws, rules and regulations, including cGMPs, and the Impax Know-How at all times during the term of this Agreement. Impax shall be responsible for all costs and expenses related to the compliance of the Approved Facility with such laws, rules and regulations and with the Impax Know-How. Impax agrees to Manufacture the Product at the Approved Facility, and not to change the location thereof without Schering’s prior written consent. 8.2 Quality Control Program . Impax shall maintain a quality control program consistent with cGMPs, as required by the applicable Regulatory Authorities in the Territory. Impax shall, within thirty (30) days of the Effective Date, provide Schering with a written summary description of such program establishing that it has met such cGMPs, which may be
amended or supplemented from time to time; provided that Impax gives Schering prompt written notice of such amendments or supplements. Impax shall have sole responsibility for quality control testing of each batch of Product supplied to Schering hereunder to ensure that such Product meets the Product Specifications. Impax shall retain records of all such testing, copies of which shall be provided to Schering upon written request. Impax shall provide Schering with a certificate of analysis for each batch of Product. Schering shall have the right to test Product to verify compliance with the applicable Product Specifications, at its expense. 8.3 Approval for Third Party Manufacturing . Impax agrees not to contract with any Third Party to conduct part or all of the Manufacturing of the Product without the prior written consent of Schering, which consent can be withdrawn at any time. Impax further agrees not to contract with any Third Party, other than those listed on its ANDA, to conduct part or all of the testing of the Product without the prior written consent of Schering, such consent not to be unreasonably withheld, but which consent can be withdrawn upon at least six (6) months prior notice. 8.4 Retention of Samples . Impax shall retain a sufficient quantity of each batch of Product to perform at least two full sets of quality control tests (which shall be in addition to the quality control testing performed by Impax prior to delivery). Impax shall maintain samples of each batch in a suitable environmentally controlled storage facility until at least the first anniversary of the end of the approved shelf life of all Product from such batch, or such longer period as may be required under applicable law, regulation or rule. All such samples shall be available for inspection and testing by Schering or a Third Party chosen by Schering at its sole discretion, including but not limited to any Affiliate, upon reasonable notice. 8.5 Batch Failure . Impax agrees to notify Schering within thirty-six (36) hours of discovery after any batch failure which could result in Impax’s inability to meet Schering’s requested delivery dates, or of learning of any failure of any batch of Product to meet standards set forth in the Impax Know-How. Impax shall notify Schering within thirty-six (36) hours after any failure of a released batch during stability testing. Impax shall complete out-of-specification investigations within thirty (30) calendar days from date of discovery. 8.6 Notification of Regulatory Inspections . Impax agrees to notify Schering within thirty-six (36) hours after the initiation of any inquiries, notifications, or inspection activity by any Regulatory Authority in regard to the Product or the Approved Facility. In furtherance and not in limitation of the foregoing, Impax shall notify Schering prior to the commencement of any inspection activity by any Regulatory Authority regarding the Product or any general cGMP inspection, unless such inspection activity is an unannounced inspection. Further, Impax shall provide a reasonable description to Schering of any such governmental inquiries, notifications or inspections promptly (but in no event later than two (2) calendar days) after such visit or inquiry. Impax shall furnish to Schering, (a) within two (2) days after receipt, any report or correspondence issued by the Regulatory Authority in connection with such visit or inquiry, including but not limited to, any FDA Form 483, Establishment Inspection Report, or warning letter, or other regulatory communications and (b) copies of any and all responses or explanations to any Regulatory Authority relating to items set forth above, in each case purged only of trade secrets of Impax that are unrelated to its obligations under this Agreement and are unrelated to the Product, prior to the submission of
such responses or explanations to any Regulatory Authority by Impax. 8.7 Inspection by Schering . Schering shall have the right, during normal business hours (and after normal business hours if reasonably requested and in connection with a production run commenced during the normal business hours) and with reasonable advance notice, to visit the Approved Facility for the purpose of observing the Manufacturing, packaging, testing, and storage of the Product, and to inspect for compliance to cGMPs and other applicable regulatory requirements. Impax’s quality assurance department shall cooperate with Schering, as necessary and useful, in any inspection conducted pursuant to this Section 8.7, and resolve any open observations to Schering’s satisfaction. Further, Impax shall maintain records of its involvement with any inspection in accordance with its customary business practices, as long as such practices satisfy the recordkeeping requirements set forth in Section 15.2 hereof. 8.8 Environmental and Other Laws and Regulations . In carrying out its obligations under this Agreement, Impax shall have sole responsibility for compliance with all applicable Laws, including without limitation environmental and health and safety laws, as amended from time to time. Impax shall immediately notify Schering in writing of any event, including the receipt of any notice, warning, citation, finding, report or service of process or the occurrence of any release, spill, upset, or discharge of hazardous wastes or substances, relating to the Manufacture of the Product that may give rise to liability on the part of Impax under the Laws or this Agreement. Schering reserves the right to conduct an environmental inspection of Impax’s facility, during normal business hours and with reasonable advance notice, for the purpose of determining compliance with this Section 8.8. Schering shall share the results of any such environmental inspection with Impax. Such inspection, if any, shall not relieve Impax of its sole obligation to comply with the Laws and does not constitute a waiver of any right otherwise available to Schering.
ARTICLE IX PRODUCT RECALL 9.1 Notification and Recall . In the event that any Regulatory Authority issues or requests a recall or takes similar action in connection with the Product, or in the event either party hereto determines an event, incident or circumstance has occurred that may result in the need for a recall or market withdrawal, the party notified of or determining the need for such recall or similar action shall, within twenty-four (24) hours, advise the other party thereof by telephone or facsimile. Following notification of a recall, within forty-eight (48) hours, the parties shall discuss whether or not to conduct a recall, and if so, the timing of the recall, the breadth, extent and level of customer to which the recall shall reach, the strategies and notifications to be used, and other related issues. In the event that the parties cannot agree on any such decision, the issue shall be resolved by Schering. 9.2 Recall Expenses . Impax shall bear the expenses of any recall resulting from a breach of its obligations hereunder. Such expenses of recall shall include, without limitation and without duplication, the expenses of notification and destruction or return of the recalled Product, the sum paid by Schering to Impax for the Manufacture of the recalled Products, Schering’s costs relating to the testing, packaging, shipping, and retail trade related costs of the recalled Products and the cost to Schering for the Active Pharmaceutical Ingredient and other Raw Materials or Packaging Components supplied by Schering and used in the Manufacture of the recalled Products and not paid for by Impax, and any Losses caused by, arising out of, or resulting from such recall. The rights of Schering under this Section 9.2 shall be Schering’s sole remedy under this Agreement or at law for such recall.
ARTICLE X INTELLECTUAL PROPERTY RIGHTS 10.1 Intellectual Property Rights . (a) Schering shall own all right, title to and interest in the Intellectual Property of Schering or derivatives thereof developed by or on behalf of Schering in performance of this Agreement. In no case, except as provided explicitly herein, whether during the term of this Agreement or upon expiration or any termination thereof, shall Impax or any Third Party be deemed to have or be entitled to any right or license to any Intellectual Property of Schering or any Intellectual Property controlled or licensed by Schering. Impax shall provide Schering with reasonable assistance in executing and filing any documents necessary to evidence Schering’s ownership of its Intellectual Property, including, without limitation, executing any assignments or providing assistance with filing for and maintaining patents with respect to the Intellectual Property of Schering. (b) Impax shall own all right, title to and interest in the Intellectual Property of Impax or derivatives thereof developed by or on behalf of Impax in performance of this Agreement. In no case, except as provided explicitly herein, whether during the term of this Agreement or upon expiration or any termination thereof, shall Schering or any Third Party be deemed to have or be entitled to any right or license to any Intellectual Property of Impax or any Intellectual Property controlled or licensed by Impax. Schering shall provide Impax with reasonable assistance in executing and filing any documents necessary to evidence Impax’s ownership of its Intellectual Property, including, without limitation, executing any assignments or providing assistance with filing for and maintaining patents with respect to the Intellectual Property of Impax. (c) During the term of this Agreement, in the event that Impax develops, discovers or creates any Inventions relating to the Product or the Manufacture and use thereof, such Inventions shall be the sole property of Impax. 10.2. Licenses . Schering shall grant to Impax, upon the earlier of (a) the date Schering’s existing proprietary D-12 formulation is approved for OTC sale, or (b) such other date as otherwise agreed to by the parties, a limited non-exclusive, non-transferable license and right to use in the Territory, without the right to sub-license, the Schering Intellectual Property solely to the extent required for Impax to perform its obligations hereunder and only for the benefit of Schering. Subsequent to such grant, Schering shall in good faith cooperate with Impax to seek removal of any statutory stay or prohibition on approval then in effect by the Regulatory Authorities of ANDA 76-050 so that Impax may manufacture and supply Product for Schering; provided, however, that nothing in this Agreement shall be construed to obligate Schering to settle, dismiss, or take any other particular actions in Civil Action No. 01-0279 currently pending in the United States Distinct Court for the District of New Jersey. Notwithstanding any other provision of this Agreement, nothing in this Agreement shall constitute either an express or implied grant to Impax of any rights to Schering Intellectual Property for use or manufacture for any other party other than Schering.
10.3. Trademarks and Trade Names . Schering and Impax hereby acknowledge that neither party has, nor shall either party acquire by reason of this Agreement, any interest or rights of use in any of the other party’s trademarks, trade names, trade dress, designs or logos unless otherwise expressly agreed in writing between the parties hereto.
ARTICLE XI TERM AND TERMINATION 11.1 Term . This Agreement shall terminate upon the expiration of the Initial Term, unless sooner terminated by one of the parties in accordance with this Article XI or unless renewed pursuant to Section 11.5 below. 11.2 Termination by Schering . (a) Schering shall have the right to terminate this Agreement upon ninety (90) days’ prior notice to Impax if: (i) Impax is subject to any Regulatory Authority warning letter or sanction, which is general in nature or relates specifically to the Product, and which is not conclusively resolved between Impax and the Regulatory Authority within one hundred eighty (180) days of issue; provided, however, that Impax must diligently pursue resolution of such warning letter or sanction during such period; (ii) there is a change in control of Impax. For purposes of this provision, a “change in control” shall mean the acquisition of direct or indirect ownership of over fifty percent (50%) of the outstanding voting securities of Impax, or actual control over the management, business and affairs of Impax, by a non-Affiliate thereof; or (iii) Impax files a petition in bankruptcy, or enters into an arrangement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes an assignment for the benefit of creditors, or suffers or permits the entry of an order adjudicating it to be bankrupt or insolvent. In the event this Agreement is terminated under this Section 11.2(iii), all rights and licenses granted pursuant to Section 10.2 of this Agreement by Impax to Schering are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(52) of the Bankruptcy Code. The parties agree that Schering, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code. The parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against Impax under the Bankruptcy Code, Schering shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property upon written request therefor by Schering. Such intellectual property and all embodiments thereof shall be promptly delivered to Schering (i) upon any such commencement of a bankruptcy proceeding upon written request therefor by Schering, unless Impax elects to continue to perform all of its obligations under this Agreement or (ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of Impax upon written request therefor by Schering. (b) Either party shall have the right to terminate this Agreement on or after January 1, 2003, if Impax has not yet received tentative ANDA approval by January 1, 2003. 11.3 Termination for Material Default . (a) Except for a breach under Section 11.3(b) hereof, upon default by a party in the performance of any material obligation under this
Agreement, the non-defaulting party shall give notice in writing to the party in default and the defaulting party shall have sixty (60) days thereafter to cure the default. The defaulting party shall, immediately upon receipt of such notice, take diligent steps to cure such default. If the defaulting party does not cure or institute measures to substantially cure such default within thirty ( 30) days and diligently complete the cure within an additional thirty (30) days (unless such thirty (30) day period is not a sufficient period of time to cure such default, in which event the defaulting party shall have up to an additional 30 days to cure such default), the non-defaulting party may terminate this Agreement by providing written notice of intent to terminate which shall take effect ten (10) days following the receipt by the defaulting party of such notice. (b) Impax recognizes that, in the absence of this Agreement, it would be barred by applicable laws and regulations from making, using, selling, offering to sell or importing within the United States the loratadine product defined by ANDA 76-050, prior to the earlier of July 25, 2003 or a decision by the New Jersey District Court in Civil Action No. 01-0279 holding that Claims 1 and 3 of U.S. Patent No. 4,659,716 are invalid, unenforceable or not infringed by such product. Accordingly, it shall constitute a material breach of this Agreement in the event that Impax, prior to the earlier of July 25, 2003 or a decision by the New Jersey District Court in Civil Action No. 01-0279 holding that Claims 1 and 3 of U.S. Patent No. 4,659,716 are invalid, unenforceable or not infringed by such product, undertakes to, or actually, , sells or distributes within the United States the loratadine product defined by ANDA 76-050 for any purpose other than supplying Schering under the terms of this Agreement (hereinafter “Prohibited Actions”). Impax stipulates and agrees that such Prohibited Actions and material breach of this Agreement would: (1) not be subject to the provisions of Section 11.3(a) of this Agreement; (2) cause Schering immediate, irreparable harm for which monetary damages would not be adequate compensation; and (3) entitle Schering to obtain a temporary restraining order, and injunction enjoining such Prohibited Actions. 11.4 Effect of Termination . Expiration or termination of this Agreement shall not relieve the parties of any obligation accruing prior to such expiration or termination, and the provisions of Sections 7.5, 7.6, 8.4, 8.6, 11.4, 11.6 and 16.8 hereof and Articles IX, X, XII, XIII, XIV and XV hereof shall survive the expiration or termination of this Agreement. Any expiration or early termination of this Agreement shall be without prejudice to the rights of either party against the other accrued or accruing under this Agreement prior to termination. 11.5 Option to Renew . So long as Schering is not in breach of this Agreement, the term of this Agreement may be extended for an additional term of two (2) years at Schering’s option, in accordance with the same terms of this Agreement; provided however that the Active Ingredient Prices for the renewal period shall be as set forth on Exhibit 3.1 hereof. In the event that Schering, in its sole discretion, wishes to extend the term of this Agreement it shall provide written notice to that effect to Impax at least one hundred and eighty (180) days prior to the end of the Initial Term. Impax shall respond in writing to such notice within thirty (30) days, acknowledging the extension of the term of the Agreement. If Schering elects not to extend the Agreement, then the Agreement shall expire at the end of the Initial Term. 11.6 Right to Manufacture . Notwithstanding any other provisions of this Agreement, in the event that Impax has an uncured material breach in accordance with Section 11.3 hereof,
Schering shall have the right to manufacture the Product or have the Product manufactured by a Third Party in accordance with the Agreement, with no further payment obligations to Impax for any amounts relating to such manufactured Product.
ARTICLE XII COVENANTS; REPRESENTATIONS AND WARRANTIES 12.1 Impax ’s Covenants . Impax covenants that, (a) at the time of delivery of the Product to the designated carrier pursuant to Section 5.2 hereof, the Product shall: (i) have been Manufactured, tested, stored and shipped and had stability oversight conducted in accordance with applicable cGMPs and all other applicable laws, rules, regulations or requirements of Regulatory Authorities in the Territory; (ii) have been Manufactured in accordance with the Impax Know-How, including without limitation the Product Specifications and the CMC; (iii) not be adulterated or misbranded under the FDCA or the Laws; (iv) have been Manufactured no more than two (2) months (if shipment in bulk) or three (3) months (if shipment in bottles)prior to delivery to the designated carrier pursuant to Section 5.2 hereof; and (v) be in good, usable and merchantable condition and fit for its intended purpose. (b) it will have good and marketable title, free and clear of any liability, pledge, lien, restriction, claim, charge, security interest or other encumbrance, to all Product delivered to the designated carrier pursuant to Section 5.2 hereof; (c) it will not use in any capacity, in connection with the services to be performed under this Agreement, any person who has been debarred pursuant to Section 306 of the FDCA (codified at 21 U.S.C. §335a), or who is the subject of a conviction described in such section; (d) it will inform Schering in writing immediately if it or any person who is performing services hereunder is debarred or is the subject of a conviction described in Section 306 of the FDCA, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or, to the best of Impax’s knowledge, is threatened, relating to the debarment or conviction of Impax or any person performing services hereunder; and
(e) it will promptly notify Schering in writing of any material adverse change in the business of Impax which could affect Impax’s ability to perform its obligations under this Agreement. (f) it will not , sell or distribute within the United States, loratadine for the purpose of commercially marketing a loratadine product under ANDA 76-050, outside of supplying Schering under the license granted under this agreement (hereinafter “prohibited actions”) prior to the earlier of July 25, 2003 or a decision by the New Jersey District Court in Civil Action No. 01-0279 holding that claims 1 and 3 of U.S. Patent No. 4,659,716 are invalid, unenforceable or not infringed by the product defined by ANDA 76 -050. 12.2 Impax ’s Representations and Warranties . Impax represents and warrants to Schering that, (a) it has the financial resources, appropriate skills, personnel, equipment, permits, and approvals necessary or useful to perform its obligations under this Agreement in compliance with the Laws; (b) it owns, or is licensed with the right to sublicense, all Intellectual Property rights (including without limitation the Impax Know-How) necessary or useful to Manufacture the Product; (c) to the best of its knowledge as of the Effective Date, the Impax Intellectual Property does not infringe the Intellectual Property rights of any Third Party; (d) it is not aware of any Third Party infringement of its Intellectual Property rights; (e) no material adverse change has occurred within the past six (6) months, with respect to Impax and its operations including without limitation material changes in or to its; (i) insurance coverage; (ii) threatened or pending legal claims affecting the Product; (iii) labor pool; (iv) suppliers; (v) quality assurance systems; or (vi) key personnel; (f) it has good and marketable title to and/or right to use, the equipment and other assets useful or necessary to Manufacture the Product at the Approved Facilities;
(g) it has adequate capacity to meet Schering’s initial forecast as set forth on Exhibit 3.3, its own requirements for Product and the requirements of any other purchasers of Product that Impax chooses to sell Product. 12.3 Representations and Warranties of Schering . Schering hereby further represents and warrants to Impax that: (a) Schering has not and will not, enter into any agreement or any other transaction with any third party or Affiliate that impedes Schering’s obligations under this Agreement; provided, however, that Impax acknowledges that Schering is in the business of developing, manufacturing and selling pharmaceutical products and nothing in this Agreement shall be construed as restricting such business. (b) In the event that Schering and/or its Affiliates shall manufacture a product pursuant to Section 5.4(a), all such product shall (a) meet the applicable Specifications at the time of shipment, (b) meet all regulatory requirements of any relevant Regulatory Authority in the Territory, (c) be manufactured, packaged, tested, stored and shipped in accordance with Regulatory Approval and all Laws, (d) not be adulterated or misbranded under the FDCA or relevant laws and regulations and (e) be produced, packaged and tested and stored in environmentally controlled facilities that have been approved by the applicable Regulatory Authority to the extent required by Law. (c) In the event and to the extent that Schering and/or its Affiliates shall manufacture a product pursuant to Section 5.4(a), Schering’s and/or its Affiliates’ manufacturing facilities for such product shall conform in all respects to Laws governing such facilities. (d) Neither Schering nor any of its Affiliates shall have been debarred or is subject to debarment and will not use in any capacity, in connection with the services to be performed under this Agreement, any Person who has been debarred pursuant to Section 306 of the FDCA or is the subject of a conviction described in such section, and (e) All Product which Schering shall package, test, store, ship or market under this Agreement shall have been marketed and stored in accordance with Regulatory Approval and all Laws. 12.4. Impax ’s and Schering ’s Representations and Warranties . Each of Impax and Schering hereby represents and warrants to the other as follows: (a) it is a corporation duly organized and validly existing under the laws of the state or other jurisdiction in which it is incorporated; (b) the execution, delivery and performance of this Agreement by such party has been duly authorized by all requisite corporate action;
(c) it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (d) the execution, delivery and performance by such party of this Agreement and its compliance with the terms hereof does not and will not conflict with or result in a breach of any term of, or constitute a default under (i) any agreement or instrument binding or affecting it or its property; (ii) its charter documents or bylaws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound; (e) it has obtained any consent, approval or authorization of, or notice, declaration, filing or registration with, any governmental or Regulatory Authority required for the execution, delivery and performance of this Agreement by such party, and the execution, delivery and performance of this Agreement will not violate any law, rule or regulation applicable to such party; (f) this Agreement has been duly executed and delivered and constitutes such party’s legal, valid and binding obligation enforceable against it in accordance with its terms subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to the availability of particular remedies under general equity principles; and (g) it shall comply with all applicable laws, rules and regulations relating to its performance under this Agreement. 12.5. EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, EXPRESS OR IMPLIED.
ARTICLE XIII INDEMNIFICATION AND INSURANCE 13.1 Impax ’s Indemnification Obligation . Impax shall indemnify, defend and hold Schering, its Affiliates and each of its and their respective employees, officers, directors and agents harmless from and against all Losses caused by, arising out of, or resulting from: (a) Impax’s breach of this Agreement; or (b) any infringement of Third Party patents by Impax’s use of its Intellectual Property for the Manufacture of the Product or by Schering’s use of Impax’s Intellectual Property as licensed hereunder, in each case except to the extent caused by the negligence or intentional misconduct of Schering. 13.2 Schering ’s Indemnification Obligation . Schering shall indemnify, defend and hold Impax, its Affiliates and each of its and their respective employees, officers, directors and agents harmless from and against all Losses caused by, arising out of, or resulting from: (a) Schering’s breach of this Agreement; or (b) the marketing, packaging, storage, shipment and sale of Product in the Territory by Schering, in each case except to the extent caused by the negligence or intentional misconduct of Impax. 13.3 Conditions to Indemnification . (a) The indemnified party shall give the indemnifying
party prompt written notice of (i) the institution of any suit against the indemnified party for which it may seek indemnification under this Article XIII and (ii) any claims, including any claims asserted or made by any Regulatory Authority having jurisdiction, against the indemnified party for which it may seek indemnification under this Article XIII. The failure to give such notice shall not relieve the indemnifying party from any liability that it may have to the indemnified party under this Article XIII except to the extent that the indemnifying party’s ability to defend such suit or claim is materially prejudiced by the failure to give such notice. The indemnifying party shall be entitled to participate in the defense of such suit or claim and to assume control of such defense; provided , however , that if it assumes such defense: (i) the indemnified party shall be entitled to participate in the defense of such claim and to employ counsel at its own expense to assist in the handling of such claim; (ii) the indemnifying party shall obtain the prior written approval of the indemnified party before entering into any settlement of such claim or ceasing to defend against such claim, if, pursuant to or as a result of such settlement or cessation, injunctive or other equitable relief would be imposed against the indemnified party; and (iii) the indemnifying party shall not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified party of a release from liability in respect of such claim. Notwithstanding the foregoing, the indemnified party shall be entitled to have sole control at its own expense over the defense or settlement of any suit or claim to the extent the suit or claim could materially adversely affect the business, operations, assets, condition or prospects of the indemnified party and the indemnifying party shall be entitled to participate at its own expense in such defense or settlement. (b) After written notice by the indemnifying party to the indemnified party of its election to assume control of the defense of any such action, the indemnifying party shall not be liable to such indemnified party hereunder for any legal fees and expenses subsequently incurred by such indemnified party in connection with the defense thereof. If the indemnifying party does not assume control of the defense of such claims as provided in this Section 13.3(b), the indemnified party shall have the right to defend such claim in such manner as it may deem appropriate at the cost and expense of the indemnifying party, and the indemnifying party shall promptly reimburse the indemnified party therefor in accordance with this Section 13.3(b). The reimbursement of fees, costs and expenses required by this Section 13.3(b) shall be made by periodic payments during the course of the investigation or defense, as and when bills are received or expenses incurred. The indemnified party shall provide to the indemnifying party, as promptly as practicable after any claim for indemnification hereunder, such information and documentation as may be reasonably requested by the indemnifying party to support and verify the claim asserted, so long as such disclosure would not violate the attorney-client privilege of the indemnified party.
13.4 Insurance . Impax represents and warrants that during the term of this Agreement, it shall maintain the types and amounts of insurance set forth below: (a) general liability insurance, including contractual liability coverage of all of Impax’s obligations under this Agreement and products liability/completed operations coverage with a minimum limit of ten million dollars ($10,000,000). (b) Such insurance shall be evidenced by a certificate of insurance which shall provide that Schering shall receive thirty (30) days’ prior written notice of cancellation or material change of such policy. 13.5 Exclusion . Notwithstanding any provision of this Agreement to the contrary, in no event shall either party be liable to the other under this Agreement for any incidental, consequential, punitive or special damages, including without limitation loss of profit or revenues; provided , however , such limitation shall not apply to lawsuits, claims, actions or proceedings instituted by a Third Party against a party hereto, which are caused (directly or indirectly) by facts or circumstances constituting a breach of this Agreement by the other party.
ARTICLE XIV CONFIDENTIALITY 14.1 Confidentiality . Impax and Schering acknowledge that each party considers its Proprietary Information to be of significant value and that such information shall be maintained as confidential. Each party shall use Proprietary Information disclosed to it by or on behalf of the other party only for the purposes contemplated by this Agreement and shall not disclose such Proprietary Information to any Third Party without the prior written consent of the disclosing party. The foregoing obligations shall survive the expiration or termination of this Agreement for a period of ten (10) years. These obligations shall not apply to Proprietary Information that: (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 business records; (b) is at the time of disclosure, or thereafter becomes, published or otherwise part of the public domain without breach of this Agreement by the receiving party; (c) is subsequently disclosed to the receiving party by a Third Party who has the right to make such disclosure; (d) is independently developed by the receiving party without the aid, application of Proprietary Information or other information received from the disclosing party and such independent development is properly documented by the receiving party; (e) is disclosed to governmental or other regulatory agencies (including without limitation Institutional Review Boards) in order to gain approval to conduct clinical trials or to market Product, provided that such disclosure is permitted only to the extent reasonably necessary to obtain such authorizations; (f) is required to be disclosed by law, regulation, rule, act or order of a governmental authority or agency, provided that the receiving party promptly notifies the other party in order to provide an opportunity to seek a protective order or other similar order with respect to such
Proprietary Information and thereafter discloses only the minimum information required to be disclosed in order to comply, whether or not a protective order or other similar order is obtained by the other party. Nothing herein shall be interpreted to prohibit Schering from publishing the results of its studies in accordance with industry practices. Each party shall have the right to disclose the other party’s Proprietary Information to its Affiliates in connection with the research and development, manufacturing and/or marketing of Product in accordance with the terms of this Agreement, provided that each party shall be responsible for ensuring that its Affiliates comply with the confidentiality and use restrictions set forth herein. The parties acknowledge that the terms and provisions of the Secrecy Agreement dated January 7, 2002, which the parties entered into are incorporated herein by reference. 14.2 No Publicity . A party may not use the name of the other party in any publicity or advertising and may not issue a press release or otherwise publicize or disclose the existence of this Agreement, any information related to this Agreement or the terms or conditions hereof, without the prior written consent of the other party. Nothing in the foregoing, however, shall prohibit a party from making such disclosures as are necessary to comply with applicable federal or state securities laws or any rule or regulation of any nationally recognized securities exchange; provided , however , that the party required to make such disclosure shall use good faith efforts to consult with the other party prior to such disclosure and, where applicable, shall request confidential treatment to the extent available.
ARTICLE XV RECORDS 15.1 Financial and Other Records . Impax shall maintain records with respect to the performance of its obligations under this Agreement, including without limitation its costs incurred in connection therewith. Specifically, but without limitation, Impax shall maintain all records reasonably necessary to support financial accounting entries necessary to support changes in Price pursuant to Section 6.1 hereof . All such records shall be available for inspection, audit and copying by Schering and its representatives and agents, including Schering’s auditors, upon reasonable request during normal business hours. All such records shall be maintained until at least two (2) years after the date of a change in Price pursuant to Section 6.1 hereof, or such longer period as may be required by the Laws. 15.2 Product Records . Impax shall maintain all records necessary to comply with the Laws and in accordance with the Health Regulations. In addition, Impax shall prepare and adhere to batch process documentation consistent with the Impax Know-How, and in accordance with its normal procedures, including without limitation quality control records and all raw data relating to each batch processed. Specifically, but without limitation, Impax shall maintain complete and accurate records reasonably necessary to support cGMPs and other applicable regulatory requirements in the Territory, including without limitation quality control records. All such records shall be available for inspection, and audit by Schering (at its expense) and its representatives and agents, including Schering’s auditors upon reasonable request during normal business hours. All such records shall be maintained for the longest period as may be required by the Laws; provided , however , that all records relating to the Manufacture, testing, stability oversight and quality control of each batch of the Product shall be retained at least until the third
anniversary of the end of the approved shelf life for all Product from such batch. Impax shall provide Schering on a periodic basis, and at least annually, such information concerning Product, production batches, yields and quality status as is specified in the Health Registrations (commonly referred to as Annual Product Reviews) and as may be reasonably requested by Schering from time to time. Prior to destruction of any record, Impax shall give notice to Schering, which shall have the right to request and retain such record. 15.3 Financial Information Reporting . Impax shall provide Schering on a quarterly basis with quarterly financial statements which are made available to the public and prepared in accordance with GAAP.
ARTICLE XVI MISCELLANEOUS 16.1 Assignment . Neither this Agreement nor any or all of the rights and obligations of a party hereunder shall be assigned, delegated, sold, transferred, sublicensed (except as otherwise provided herein) or otherwise disposed of, by operation of law or otherwise, to any Third Party other than an Affiliate of such party, without the prior written consent of the other party, and any attempted assignment, delegation, sale, transfer, sublicense or other disposition, by operation of law or otherwise, of this Agreement or of any rights or obligations hereunder contrary to this Section 16.1 shall be void and without force or effect; provided , however , Schering may, without such consent, and Impax may with Schering’s consent (which consent shall not be unreasonably withheld), assign the Agreement and its rights and obligations hereunder in connection with the transfer or sale of all or substantially all of its assets related to the division or the subject business, or in the event of its merger or consolidation or change in control or similar transaction. This Agreement shall be binding upon, and inure to the benefit of, each party, its Affiliates, and its permitted successors and assigns. Each party shall be responsible for the compliance by its Affiliates with the terms and conditions of this Agreement. 16.2. Force Majeure . Failure of either party hereto to perform its obligations under this Agreement (except the obligation to make payments when due) shall not subject such party to any liability to the other party or place it in breach of any term or condition of this Agreement if such failure is caused by a Force Majeure, provided , however , that the party affected shall promptly notify the other party of the condition constituting a Force Majeure and shall exert Commercially Reasonable Efforts to overcome any such causes and to resume performance of its obligations with all possible speed, and provided, further that nothing contained herein shall require any party to settle on terms unsatisfactory to such party any strike, lock-out or other labor difficulty, any investigation or proceeding by any public authority, or any litigation by any Third Party. If a condition constituting a Force Majeure exists for more than ninety (90) consecutive days, the parties shall meet to negotiate a mutually satisfactory solution to the problem, if practicable. 16.3. Governing Law . This Agreement shall be governed, interpreted and construed in accordance with the laws of the State of New Jersey, without giving effect to conflict of law principles. 16.4. Waiver . Any delay or failure in enforcing a party’s rights under this Agreement or any waiver as to a particular default or other matter shall not constitute a waiver of such party’s rights to the future enforcement of its rights under this Agreement, nor operate to bar the exercise or enforcement thereof at any time or times thereafter,
excepting only as to an express written and signed waiver as to a particular matter for a particular period of time. 16.5. Independent Relationship . Nothing herein contained shall be deemed to create an employment, agency, joint venture or partnership relationship between the parties hereto or any of their agents or employees, or any other legal arrangement that would impose liability upon one party for the act or failure to act of the other party. Neither party shall have any power to enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf of, the other party, or to bind the other party in any respect whatsoever. 16.6. Export Control . This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States of America which may be imposed upon or related to Impax or Schering from time to time by the government of the United States of America. Furthermore, Schering agrees not to export, directly or indirectly, any technical information acquired from Impax under this Agreement or any products using such technical information to any country for which the United States government or any agency thereof at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the Department of Commerce or other agency of the United States government as required by an applicable statute or regulation. 16.7. Entire Agreement; Amendment . This Agreement, including the exhibits and schedules hereto, sets forth the complete and final agreement and all the covenants, promises, agreements, warranties, representations, conditions and understandings between the parties hereto and supersedes and terminates all prior agreements, writings and understandings between the parties with respect to the subject matter hereof. The parties agree that there are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the parties other than as are set forth herein and therein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the parties unless reduced to writing and signed by an authorized officer of each party. 16.8. Notices . Each notice required or permitted to be given or sent under this Agreement shall be given by facsimile transmission (with confirmation copy by registered first-class mail) or by registered or overnight courier (return receipt requested), to the parties at the addresses and facsimile numbers indicated below. If to Impax, to: Impax Laboratories, Inc. 3735 Castor Avenue Philadelphia, PA 19124 Attention: Barry R. Edwards, Co-Chief Executive Officer Facsimile No.: 215-289-5932 with copies to: Sol Genauer, Esq. Blank, Rome, Comisky & McCauley
If to Schering, to: Schering Corporation 2000 Galloping Hill Road Kenilworth, New Jersey 07033 Attention: James Martin, Director of Strategic Sourcing Facsimile No.: (908) 629-3062 with copies to: Attention: Law Department, Staff Vice-President, Licensing Facsimile No.: (908) 298-2739 Any such notice shall be deemed to have been received on the earlier of the date actually received or the date five (5) days after the same was posted or sent. Either party may change its address or its facsimile number by giving the other party written notice, delivered in accordance with this section. 16.9. Severability . If any provision of this Agreement is declared invalid or unenforceable by a court having competent jurisdiction, it is mutually agreed that this Agreement shall continue in effect except for the part declared invalid or unenforceable by order of such court. The parties shall consult and use diligent efforts to agree upon a valid and enforceable provision which shall be a reasonable substitute for such invalid or unenforceable provision in light of the intent of this Agreement. 16.10. Recording . Each party hereto shall have the right, at any time, to record, register, or otherwise notify this Agreement with or to appropriate governmental or regulatory entities in the Territory, and the other party shall provide reasonable assistance as required in effecting such recording, registration or notification. 16.11. Counterparts . This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, have been executed on behalf of each of the parties hereto. This Agreement may be executed in any number of counterparts, each of which shall be an original as against any party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. 16.12 Arbitration. Prior to submission of any controversy or dispute arising out of or relating to this Agreement (“Dispute”) to arbitration in accordance with this Section 16.12, the Parties will negotiate in good faith to resolve such Dispute. If the Parties cannot reach agreement within ten (10) days of written notice by a Party to the other that a Dispute exists, the Dispute shall be settled by arbitration before three (3) neutral arbitrators (at least one of which arbitrators shall have substantial intellectual property experience) in accordance with the then current rules of the American Arbitration Association. Any such arbitration shall be conducted and determined in Philadelphia, Pennsylvania. The decision of the arbitrators shall be binding on the parties. The award rendered by the arbitrators shall be final and judgment may be entered upon it in any court having jurisdiction thereof. The prevailing party shall be entitled as part of the award to all
reasonable fees and expenses incurred in connection with the arbitration, including the reasonable fees and expenses of the arbitrators and reasonable attorney’s fees. The parties agree that arbitration proceedings must be instituted within one (1) year after knowledge of the occurrence of the breach and that the failure to institute arbitration proceedings within such period shall constitute a waiver of all claims and an absolute bar to institution of any and all proceedings to arbitrate or adjudicate such claims.
IN WITNESS WHEREOF, Schering and Impax have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written.
SCHERING CORPORATION IMPAX LABORATORIES, INC.
By: /s/ Steven Chellevold By: /s/ Barry R. Edwards
Name: Steven Chellevold Name: Barry R. Edwards Title: Senior Vice President — Technical Operations Title: Co -Chief Executive Officer
Date: June 10, 2002 Date: June 18, 2002
EXHIBIT 10.15.1 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
AMENDMENT NO. 3 TO LICENSING, CONTRACT MANUFACTURING AND SUPPLY AGREEMENT BETWEEN SCHERING CORPORATION AND IMPAX LABORATORIES, INC. This Amendment No. 3, effective as of the last date of signature appearing below (the “Effective Date”), is entered into by and between Schering Corporation, (hereafter called “Schering”), and Impax Laboratories, Inc., (hereafter called “Impax”).
Purpose WHEREAS Schering and Impax are the parties to the Licensing, Contract Manufacturing and Supply Agreement with an effective date of June 18, 2002 as subsequently amended by Amendment No. 1 dated November 22, 2002, and Amendment No. 2 dated December 4, 2002 (the “License Agreement”); and WHEREAS Schering and Impax desire, in accordance with Section 16.7 of the License Agreement to amend certain aspects and provisions of the License Agreement related to the Pricing and Supply of the Product, the License granted by Impax to Schering and the responsibility for reporting Adverse Event information as set forth below; NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein and intending to be legally bound hereby, the parties hereby agree as follows: 1. Unless otherwise expressly defined herein, all capitalized terms used herein have the meaning as defined in the License Agreement. 2. Section 1.17 is amended to read in its entirety as follows: The term “Initial Term” shall mean the period of time beginning on the Effective Date of the License Agreement and ending February 28, 2008. 3. Section 1.29 is amended to read in its entirety as follows:
The term “Price” shall mean the Price set forth in Section 6.1 hereof. 4. Section 1.32 is amended to read in its entirety as follows: The term “Supply Failure” shall mean Impax’s failure to Manufacture and deliver to Schering on more than one occasion at least 95% of the amount of Product ordered by Schering pursuant to the forecasts referred to in Section 3.3, for one calendar month by the delivery date set forth in Schering’s purchase order. 5. Section 2.1, License Fee , is amended by adding the following new Sections 2.1(d), (e) and(f): (d) In consideration of the Royalty Amount set forth in Section 2.1(e) below, Impax hereby grants to Schering, effective upon the earlier of: (a) the delivery by Impax of the XXXXX tablets, as provided in Section 3.1 (as such amount may be adjusted in accordance with Section 5.4 (a)), or (b) approval by FDA to allow Schering or its designated party to manufacture the Product under Impax’s ANDA or (c) such other date as otherwise agreed to by the parties, a non-exclusive, transferable, assignable, irrevocable, non-expiring license under Impax’s ANDA, Know- How, and other intellectual property as they relate to the Product and the other rights granted to Schering under the Agreement, including, but not limited to rights to manufacture, market, and distribute the Product. So long as Impax is supplying the Product to another customer, Impax shall not withdraw the ANDA, and shall be obligated to, and shall perform at its own expense, all acts necessary to maintain the ANDA in full force and effect, it being understood that Schering shall continue to furnish Impax with the information required for those portions of the ANDA specific to Schering. Within thirty (30) days after written notification from Impax that Impax is no longer required to maintain the ANDA for its other customer, Schering shall notify Impax if it desires Impax to continue to maintain the ANDA and Impax shall, until otherwise notified by Schering, perform, at Schering’s expense, all acts necessary to maintain the ANDA in full force and effect. In such event and at Schering’s request, the parties shall enter into good faith negotiations regarding the transfer of the ANDA to Schering, and Schering shall have the right of first refusal in connection with any transfer or other disposition of the Impax ANDA, other than a transfer or other disposition to an Affiliate of Impax. In the alternative, Schering may choose to file for its own ANDA using Impax Know-How, in which case Impax shall be obligated to maintain at Schering’s expense, the Impax ANDA for the Product until Schering receives FDA approval for Schering’s ANDA. In any event, the amount, if any, that Impax may charge to Schering for maintaining the Impax ANDA pursuant to this Section 2.1(d) shall be limited to the reasonable, actual, documented costs incurred by Impax for maintaining the ANDA. Invoices for any such amount charged to Schering shall be sent by Impax on an annual basis, and shall be accompanied by a detailed statement itemizing the costs. Such invoices shall be paid by Schering within 30 days of receipt. Impax shall keep records sufficient in detail to enable Schering to verify the amounts charged. Schering shall have the right, at its discretion and expense, to inspect, during ordinary business hours of Impax, records as may be necessary to verify the amounts charged by Impax pursuant to this Section 2.1(d). Without limiting the generality of the foregoing, Impax shall, subject to the provisions of Section 7.6, be responsible for filing any and all ADE (as herein defined) reports.
2
(e) In consideration of the license rights granted pursuant to Section 2.1(d), Schering agrees to pay Impax a total of $ XXXXX per XXXXX tablets of Product produced by Schering and sold by it, net of any and all returns (the “Royalty Amount”), during the course of the 24 months following the date of the completion of the Technology Transfer (as hereinafter defined), provided that Impax is no longer obligated to supply the Product to Schering, or if so obligated, the date on which Impax has delivered to Schering a total of XXXXX tablets (subject to any adjustment in accordance with Section 5.4 (a))of the Product and is no longer required to deliver any additional Product to Schering. Schering shall pay the Royalty Amount to Impax on a quarterly basis within 45 days of the close of the preceding calendar quarter. Upon payment of this amount and notwithstanding any other provision in the License Agreement to the contrary, Schering shall not be obligated to make any further payments for the license rights granted to it by Impax pursuant to Section 2.1(d) herein. (f) Payments due under Section 2.1(e) shall be accompanied by a statement detailing the number of tablets manufactured by Schering and sold by it, net of any and all returns, and the calculation of the payment owed to Impax. Schering shall keep records in sufficient detail to enable Impax to verify the calculation of the payment. Impax has the right, at its discretion and expense, but no more frequently than one (1) time per calendar year, to inspect, during ordinary business hours of Schering, records as may be necessary to verify Schering’s calculation of any payment due under Section 2.1(e). 6. Section 3.1, Supply of Product , is amended to read in its entirety as follows: Subject to the terms and conditions of the License Agreement as amended, Impax shall Manufacture and supply to Schering, and Schering shall purchase from Impax, the Product in accordance with Impax’s ANDA and in amounts to be determined by Schering in its sole discretion (but no less than batch size quantities); provided that, and subject to Section 5.4(a), Impax shall Manufacture and supply to Schering, and Schering shall purchase from Impax, a minimum total of XXXXX tablets of the Product during the period beginning March 1, 2004 and ending February 28, 2008; provided further, however, that in the event that FDA or any other Regulatory Authority shall take any action, the effect of which is to prevent or prohibit Schering from marketing and distributing the Product, Schering shall be relieved of its obligation to purchase any minimum quantity of the Product. During calendar year 2004, Impax agrees to manufacture and deliver to Schering XXXXX tablets of the Product per calendar month for each of the calendar months of March, April, May, June, July and August; provided, however, that Impax may deliver the XXXXX tablets due for the month of April, 2004 to Schering by May 10, 2004. Impax shall thereafter be obligated to produce up to XXXXX tablets of the Product for any remaining calendar year of the Initial Term. Impax shall deliver Schering’s requirements of the Product as per Schering’s delivery dates on Schering’s Purchase Orders. Impax represents and warrants that it has and will maintain the capacity to Manufacture up to XXXXX tablets per month for the duration of the Initial Term, and further represents and warrants that it will Manufacture and deliver to Schering at least XXXXX tablets in any given month, subject to receipt of forecasts and purchase orders in accordance with Sections 3.3 and 3.4 of the Agreement. Notwithstanding the foregoing, Impax will use its Commercially Reasonable efforts, during the Initial Term, to supply Schering with more than XXXXX tablets, up to XXXXX tablets, in any given calendar month, subject to
3
receipt of forecasts and purchase orders. Nothing herein shall be construed as restricting or limiting Schering’s right to manufacture the Product at Schering’s or its Affiliate’s facilities for use and/or sale. 7. Section 3.7, Alternative Supply , is amended to read in its entirety as follow: Impax agrees to fully cooperate with Schering, at Schering’s request and expense, to establish a back-up facility for the manufacture of the Product at one of Schering’s, its Affiliate’s or Third Party’s manufacturing sites. Upon such request, Impax shall promptly initiate a complete technology transfer of the manufacturing process, procedures and standards used by Impax to Manufacture the Product (the “Technology Transfer”), so as to enable the back-up facility to manufacture the Product in accordance with the applicable Health Registrations for the Product. Impax and Schering shall use diligent efforts to ensure that the Technology Transfer is completed as soon as reasonably practicable. 8. Section 7.2, Cost Reductions , is hereby deleted in its entirety. 9. Section 5.4(a), Delay and Failure to Supply , is amended to read in its entirety as follows: (a) In the event that Impax shall have reason to believe that it will be unable to supply Schering in a timely manner with the full quantity of the Product forecasted to be ordered or actually ordered by Schering, Impax shall promptly (and in any event within five (5) business days) notify Schering thereof. If Impax shall so notify Schering, or if Impax shall fail to provide Schering with adequate assurances of timely performance upon Schering’s request therefore (regardless of whether past performance has complied herewith or not), Schering and Impax shall promptly meet to discuss how to thereafter supply the Product in a timely manner. If at any time Schering determines in its reasonable judgment that there will be a Supply Failure, or that there is a Supply Failure, then Schering or an Affiliate of Schering may (but shall not be obligated to) Manufacture such quantity of the Product or its equivalent that Impax is unable to produce or has failed to deliver or, Schering or its Affiliate may enter into a Supply Agreement with a Third Party to manufacture such quantity of the Product or its equivalent that Impax is unable to produce and deliver (taking into account minimum batch sizes and pricing efficiencies of such supplier), upon such terms and conditions as Schering shall determine in its sole discretion. If the Cure Price for the Supply Failure is in excess of the Price, Schering shall invoice Impax for an amount equal to the excess of the Cure Price over the Price and provide reasonable documentation evidencing the Cure Price to Impax with such invoice. Impax shall pay such invoice within 30 days and such payment obligation shall constitute Impax’s sole and exclusive liability for claims under this Section 5.4(a) where Schering elects to either Manufacture the Product itself or enter into an agreement with a Third Party to do so. Notwithstanding the foregoing, with regard to any supply agreement or the Manufacture of the Product by Schering or an Affiliate of Schering, Impax shall pay the Cure Price in excess of the Price for the longer of three (3) months from the date of a Supply Failure or the date that Impax advises Schering that it is able to resume deliveries of the Product in the amounts referred to in Section 3.1.
4
In the event a Supply Failure occurs in any given month (“Short Month”), and Schering elects not to Manufacture the Product or to enter into an agreement with a Third Party to do so, then (i) In addition to delivering the full quantity of Schering’s order for the immediately following month, Impax shall also deliver to Schering the amount of any shortage from the Short Month (“Cure Amount”) in the immediately following calendar month (“Cure Month”), unless otherwise directed by Schering. Subject to subparagraph (ii) below, pricing for all Product delivered during any Short Month and any Cure Month shall be $ XXXXX per XXXXX tablets of the Product. (ii) Should Impax fail to deliver any given full Cure Amount, then pricing shall be at the price of $ XXXXX per XXXXX tablets (the “Amended Cure Price”), which Amended Cure Price shall remain in effect for a minimum of the next three months (the “Minimum Cure Period”) and in any event, until the full Cure Amount(s) and all amounts required pursuant to Schering’s regular orders have been delivered. Upon delivery of all Schering’s requirements pursuant to its regular orders and the full Cure Amount(s), or the expiration of the Minimum Cure Period, whichever is later, the price to be paid by Schering for Product ordered and delivered thereafter shall revert back to $ XXXXX per XXXXX tablets. (iii) In addition to, and notwithstanding the foregoing cure obligations of Impax, Schering shall be relieved from the minimum purchase obligation established pursuant to the Amended Section 3.1 set forth above. Subject to the provisions of Section 3.1, Impax shall nevertheless be required for the remainder of the Initial Term to Manufacture and supply to Schering, and Schering shall purchase from Impax, the Product, in amounts to be determined by Schering in its sole discretion (but no less than current batch size quantities), at the price set forth in subparagraph 5.4(a)(ii), above, as applicable. 10. Section 6.1, Price , is hereby amended to read in its entirety as follows: Beginning March 1, 2004, and subject to Section 5.4(a), the Price to be paid by Schering to Impax for the Product during the Initial Term shall be $ XXXXX per XXXXX tablets, and shall be made in United States dollars within 30 days from date of receipt of invoice therefore for Product received by Schering. After February 28, 2008, the Price to be paid by Schering to Impax for the Product may be increased for any increase in the United States Consumer Price Index for material, labor and overhead costs during the immediate preceding year, but in no event shall such cost increase be more than a total of three percent (3%) for such year over the Price at the end of the immediate preceding year. 11. Section 7.6 of the Agreement, Adverse Events , is hereby amended to read in its entirety as follows: Commencing no later than February 1, 2005, Impax shall be responsible for, and shall bear the expense of collecting and reporting to FDA in accordance with the applicable laws and regulations, all Adverse Drug Experiences (ADEs) regarding the Product; until such date, Impax shall only be responsible for reporting to FDA all ADEs. In the event Schering shall receive an ADE for the Product, Schering shall notify Impax within five (5) business days if the ADE is
5
serious or unexpected, and on a quarterly basis with respect to any non-serious or expected ADEs. 12. Section 8.4, Retention of Samples, is hereby amended by adding the following Section 8.4(a): Until such time as Schering or its designated party receives approval by FDA to manufacture the Product under Impax’s ANDA, Impax shall be responsible for, and shall bear the expense of, conducting all ongoing stability requirements in accordance with applicable laws and regulations and all applicable Schering requirements for all presentations of the Product marketed by Schering. Notwithstanding the foregoing, Impax shall only be required to bear the expense of the conduct of on-going stability testing for the initial three (3) batches of Product heretofore manufactured for Schering and for one (1) batch of Product manufactured during each year of the Initial Term. If Schering shall require the conduct of additional stability testing, Schering shall pay to Impax the sum of $ XXXXX for each batch tested. 13. All other terms and conditions of the License Agreement are hereby confirmed and shall remain in full force and effect. In the event of any conflict with the provisions of this Amendment No. 3 and any of the provisions of the License Agreement, the provision of this Amendment No. 3 shall control.
SCHERING CORPORATION IMPAX LABORATORIES, INC.
By: /s/ Jerry Martino By: /s/ David S. Doll
Jerry Martino David S. Doll Vice President Sr. Vice President Sales and Marketing
Date: 7/19/04 Date: 7/23/04
6 EXHIBIT 10.15.2 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Amendment No. 4 to Licensing, Contract Manufacturing and Supply Agreement between Schering Corporation and Impax Laboratories, Inc. This Amendment No. 4, effective as of the last date of signature appearing below (the “Effective Date”), is entered into by and between Schering Corporation (hereinafter called “Schering”) and Impax Laboratories, Inc. (hereinafter called “Impax”).
PURPOSE WHEREAS , Schering and Impax are the parties to the Licensing, Contract Manufacturing and Supply Agreement with an effective date of June 18, 2002, as subsequently amended by Amendment No. 1, dated November 22, 2002, Amendment No. 2, dated December 4, 2002, and Amendment No. 3, dated July 15, 2004 (the “License Agreement”); and WHEREAS , Schering and Impax desire, in accordance with Section 16.7 of the License Agreement, to amend certain aspects and provisions of the License Agreement related to the Pricing and Supply of the Product and the license granted by Impax to Schering, as set forth below. NOW, THEREFORE , in consideration of the foregoing premises and the mutual covenants contained herein, and intending to be legally bound hereby, the parties hereby agree as follows: 1. Unless otherwise expressly defined herein, all capitalized terms used herein have the meaning as defined in the License Agreement.
2. Section 2.1(e) is amended to read in its entirety, as follows: (e) In consideration of the license rights granted pursuant to Section 2.1(d), Schering agrees to pay Impax a total of $ XXXXX per XXXXX tablets of Product produced by Schering, or a Third Party engaged by Schering to Manufacture the Product, and sold by Schering, net of any and all returns (the “Royalty Amount”) during the course of the twenty-four (24) months following the Manufacture by Schering, its Affiliate or a Third Party
Manufacturer of the first commercial batch of Product following the date of the completion of the Technology Transfer (as hereinafter defined). Schering shall pay the Royalty Amount to Impax on a quarterly basis within forty-five (45) days of the close of the preceding calendar quarter. Upon payment of the Royalty Amount and notwithstanding any other provision in the License Agreement to the contrary, Schering shall not be obligated to make any further payments for the license rights granted to it by Impax pursuant to Section 2.1(d) herein. 3. Section 3.1, Supply of Product , is amended to read in its entirety as follows: Subject to the terms and conditions of the License Agreement, as amended, Impax shall Manufacture and supply Schering, and Schering shall purchase from Impax, the Product in accordance with Impax’s ANDA and in amounts to be determined by Schering in its sole discretion (but no less than batch quantities). 4. Section 3.3, Good Faith Forecasts , and Section 3.4, Purchase Orders, are deleted in their entirety.
5. Section 3.7, Alternative Supply , is amended to read in its entirety, as follows: Promptly following the execution of this Amendment No. 4, Impax agrees to fully cooperate with Schering, at Schering’s request and expense (except as set forth in the second paragraph of paragraph (b) of this Section 3.7), to establish a facility for the Manufacture of the Product at one of Schering’s, its Affiliates’ or a Third Parties’ manufacturing sites and Impax shall promptly initiate a complete technology transfer of the manufacturing process, procedures and standards used by Impax to Manufacture the Product (the “Technology Transfer”), so as to enable such facility to Manufacture the Product in accordance with the applicable Health Registrations for the Product. Impax and Schering shall use diligent efforts to ensure that the Technology Transfer is completed as soon as reasonably practicable, but by no later than March 1, 2009. The license rights granted to Schering pursuant to Section 2.1(d) in exchange for the Royalty Amount set forth in Section 2.1(e) shall take effect upon the execution of this Amendment No. 4. In order to accomplish the Technology Transfer as efficiently and as timely as possible, Impax shall provide the following assistance to Schering (and such other assistance as requested by Schering, subject to Impax’s agreement with respect to such additional services):
2
(a) During the term of this Agreement, Schering shall be permitted to conduct up to four (4) site visits at Impax’s Manufacturing facilities of no longer than three (3) days’ duration per visit and limited to no more than four (4) employees or agents of Schering for technical discussions, to view Impax’s Manufacturing process and to review and verify equipment capabilities. (b) No more than ten (10) times during the term of this Agreement Schering may request Impax to provide its personnel at Schering’s facilities for process development or technical services, including product development, stability batch manufacturing and technical transfer demonstration of batch capability, each site visit to be no longer than three (3) days’ duration. Impax and Schering shall be responsible for their own domestic travel expenses related to the foregoing site visits. 6. Section 3.8, Capacity , is amended to read in its entirety, as follows: 3.8 Impax Performance Obligation . To facilitate the Manufacture and delivery of Products, beginning August 1, 2006 and each month thereafter, Schering shall provide Impax with firm purchase orders for the subsequent six (6) months on a rolling six-month basis and the desired delivery dates for the Products so ordered so as to enable Impax to plan and prioritize Schering’s purchase orders to maximize the delivery of Products in order to meet requested and agreed upon Schering delivery dates. Impax will use its Commercially Reasonable Efforts to maintain the Manufacturing priority and capacity required for Schering’s firm purchase orders in order to meet agreed upon monthly delivery quantities. The rolling six month firm purchase order schedule is intended to provide both Impax and Schering with sufficient notification of scheduling issues and changes as far out on the horizon as possible. If Impax confirms that it is unable to meet Schering’s purchase order quantity and delivery dates, the parties agree to negotiate revised delivery dates. 7. Article III, Supplied Product , is hereby amended by adding the following Section 3.9: 3.9 Optional Territory . Within twenty-four (24) months from the date of execution of this Amendment, Schering shall have the right to add Canada as an additional country in the Territory by delivering notice thereof to Impax, provided that Impax shall not be required to deliver to Schering and its Affiliates an aggregate of more than XXXXX tablets of Products in any calendar year of this
3
Agreement. The Price for the Products to be delivered to Schering’s Canadian subsidiary shall be as set forth in Section 6.1. In all other respects, the terms and provisions of this Agreement shall govern the Manufacture and sale of Products to Schering’s Canadian subsidiary. 8. Section 4.2, Cost Reductions (identified incorrectly as Section 7.2 in Amendment No. 3), is hereby deleted in its entirety.
9. Section 5.4, Delay and Failure to Supply , is hereby deleted in its entirety.
10. Section 6.1, Price , is hereby amended to read in its entirety, as follows: 6.1 Price . Subject to the other provisions of this Section 6.1, the Price for the Product shall be as follows: (a) Beginning July 1, 2006, and through and including September 30, 2006, the Price shall be $ XXXXX per XXXXX tablets; (b) Beginning October 1, 2006, through and including December 31, 2006, the Price shall be $ XXXXX per XXXXX tablets; and (c) Beginning January 1, 2007, through and including June 30, 2007, the Price shall be $ XXXXX per XXXXX tablets. The Price shall be paid in United States dollars within thirty (30) days from the date of receipt of invoice therefor for the Product received by Schering. The Price of Product ordered for delivery in calendar year 2007 in excess of XXXXX tablets shall be $ XXXXX per XXXXX tablets in excess of XXXXX tablets, plus the Cost Increases referred to below. If Impax successfully releases and ships batches to Anderson during the months of July through December, 2006, according to the schedule set forth below, within forty-five (45) days after the end of each applicable month Schering shall pay to Impax the additional sum of $ XXXXX for each month that Impax successfully releases and ships such scheduled batches to Anderson; provided , however , that if there is a shortage in any month, Impax may make up the shortage in the subsequent month in order to be paid the $ XXXXX amount for the short month.
4
NO. O F B ATCHES NO. O F B ATCHES REQUIRED T O B E S HIPPED REQUIRED T O B E BY T HE E ND O F T HE 2006 M ONTH SHIPPED MONTH June XXXXX XXXXX July XXXXX XXXXX August XXXXX XXXXX September XXXXX XXXXX October XXXXX XXXXX November XXXXX XXXXX December XXXXX XXXXX Prior to April 1, 2007, Impax shall provide to Schering documentation supporting any increases since July 1, 2006 in the cost of Raw Materials and Packaging Components and any other increases in the cost of Manufacturing including labor, QC and QA (collectively “Cost Increases”), and unless Schering objects to the Cost Increases, the Price for the Product for the period July 1, 2007 through and including December 31, 2007, shall be $ XXXXX per XXXXX tablets plus the amount of the agreed upon Cost Increases (the “2007 Price”). If the agreed upon Cost Increase is more than five percent (5%) of $ XXXXX , the Royalty Amount shall be reduced by the amount by which the agreed upon Cost Increase exceeds $XXXXX . Prior to October 1, 2007, Impax shall provide to Schering documentation supporting any Cost Increases since April 1, 2007, and unless Schering objects to the Cost Increases, the Price for the Product for the period January 1, 2008 through and including December 31, 2008, shall be the 2007 Price plus the amount of the agreed upon Cost Increases (the “2008 Price”). If the 2008 Price exceeds the 2007 Price by more than five percent (5%), the Royalty Amount shall be reduced by the amount of such excess. In the event that Impax supplies Product to Schering after December 31, 2008, prior to October 1, 2008 Impax shall provide Schering documentation supporting any Cost Increases since October 1, 2007 and unless Schering objects to the Cost Increases, the Price for the Product shall be the 2008 Price plus the amount of the agreed upon Cost Increases (the “2009 Price”). If the 2009 Price exceeds the 2007 Price by more than ten percent (10%), the Royalty Amount shall be reduced by the amount of such excess, and the amount of any Royalty Amount reduction referred to in the preceding paragraph shall not apply. If the 2009 Price does not exceed the 2007 Price by more than ten percent (10%), the Royalty Amount shall be reduced only by the amount of any Royalty Amount reduction referred to in the preceding paragraph.
5
If Schering shall object to a Cost Increase, it must so notify Impax within thirty (30) days of receipt of Impax’s documentation supporting the Cost Increase. If the parties are unable to agree upon the Cost Increase within ten (10) days after Schering’s objection, the parties will retain a mutually acceptable, nationally recognized independent certified public accounting firm, which may not be any of the parties’ primary outside accountants, to review the relevant books and records and to submit to the parties its written determination as to the amount of the Cost Increases and the basis for its determination. The Cost Increase so determined shall be retroactive to July 1, 2007, or January 1, 2008, or January 1, 2009, as the case may be. The determination by the independent accounting firm will be binding on the parties absent manifest error. 11. Section 8.4, Retention of Samples , is amended by adding the following paragraph: Product supplied by Impax shall have a shelf life of at least (a) thirty (30) months from the date of Manufacture for all Products shipped during the period January 1, 2007 through June 30, 2007 and (b) thirty-six (36) months from the date of Manufacture for all Products shipped beginning July 1, 2007, unless Impax notifies Schering that there are issues regarding stability results. 12. Section 11.2, Termination by Schering , is amended to read in its entirety, as follows: 11.2 Termination by Schering or Impax . (a) Schering shall have the right to terminate this Agreement upon ninety (90) days’ prior notice to Impax if: (i) Impax is subject to any Regulatory Authority warning letter or sanction which materially effects Impax’s ability to Manufacture the Product and which is not being actively contested by Impax; (ii) there is a change in control of Impax. For purposes of this provision, a “change in control” shall mean the acquisition of direct or indirect ownership of over fifty percent (50%) of the outstanding voting securities of Impax, or actual control over the management, business and affairs of Impax, by a non-Affiliate thereof; or (iii) Impax files a petition in bankruptcy, or enters into an arrangement with its creditors, or applies for or consents to the appointment of a receiver or trustee, or makes an assignment
6
for the benefit of creditors, or suffers or permits the entry of an order adjudicating it to be bankrupt or insolvent. In the event this Agreement is terminated under this Section 11.2(iii), all rights and licenses granted pursuant to Section 10.2 of this Agreement by Impax to Schering are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(52) of the Bankruptcy Code. The parties agree that Schering, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code. The parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against Impax under the Bankruptcy Code, Schering shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property upon written request therefor by Schering. Such intellectual property and all embodiments thereof shall be promptly delivered to Schering (i) upon any such commencement of a bankruptcy proceeding upon written request therefor by Schering, unless Impax elects to continue to perform all of its obligations under this Agreement or (ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of Impax upon written request therefor by Schering. (b) Schering shall have the right to terminate this Agreement for any or no reason upon six (6) months’ prior notice to Impax given at any time from and after July 1, 2008. (c) Impax shall have the right to terminate this Agreement upon six (6) months’ prior notice to Schering given on the earlier of (i) the date of completion of the Technology Transfer or (ii) on or after July 1, 2008 for any or no reason. (d) In the event that no notice of termination is given by either party prior to July 1, 2008, this Agreement shall be automatically extended for an additional one (1) year term. (e) In the event Impax shall notify Schering of its intention to terminate this Agreement pursuant to Section 11.2(c)(ii) and the Technology Transfer has not been completed so as to enable Schering or a Third Party to Manufacture the Product, the term of this Agreement shall be extended for an additional period of three (3) months beyond the termination date set forth in Impax’s notice of termination. If Schering believes that the Technology Transfer cannot be completed by March 1, 2009, and the failure to complete the Technology Transfer is not due to an act or failure to act on the part of Schering, Schering shall so notify Impax and the parties
7
shall then engage in good faith negotiations to modify and extend the term of this Agreement so as to enable a continuity of supply of the Product to Schering, which modification will include increases in the price of the Product, it being understood that notwithstanding the forgoing Impax is under no obligation to extend the term of this Agreement beyond March 1, 2009. 13. Clause (b) of Section 13.2 is amended to read in its entirety, as follows:
the manufacture, marketing, packaging, storage, shipment, and sale of Product in the Territory by Schering in each case, except to the extent caused by the negligence or intentional misconduct of Impax.
14. Except for use by Schering of the confidential information of Impax relative to the license rights granted to Schering and the Technology Transfer hereunder, and notwithstanding the provisions of the Secrecy Agreement entered into between Schering and Impax on January 7, 2002 (the “Secrecy Agreement”) and the License Agreement to the contrary, the confidentiality provisions of the Secrecy Agreement and License Agreement shall survive the termination of the License Agreement for a period of ten (10) years.
15. All other terms and conditions of the License Agreement are hereby confirmed and shall remain in full force and effect. In the event of any conflict with the provisions of this Amendment No. 4 and any of the provisions of the License Agreement, the provisions of this Amendment No. 4 shall control.
SCHERING CORPORATION
By: /s/ Richard J. Appledoorn Name: Richard J. Appledoorn Title: General Manager Date: December 15, 2006
IMPAX LABORATORIES, INC.
By: /s/ David S. Doll Name: David S. Doll Title: Executive Vice President, Commercial
Operations Date: December 13, 2006
8 EXHIBIT 10.16 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
SUPPLY AND DISTRIBUTION AGREEMENT BETWEEN IMPAX LABORATORIES, INC. AND DAVA PHARMACEUTICALS, INC. DATED AS OF NOVEMBER 3, 2005
SUPPLY AND DISTRIBUTION AGREEMENT This Supply Agreement (“ Agreement ”) is dated as of the 3rd day of November, 2005 by and between DAVA Pharmaceuticals, Inc., a Delaware corporation (hereinafter referred to as “ DAVA ”), with offices located at 400 Kelby Street, 10 th Floor, Fort Lee, NJ 07024, and IMPAX Laboratories, Inc., a Delaware corporation (hereinafter referred to as “IMPAX” ), with headquarters located at 30831 Huntwood Avenue, Hayward, CA 94544. WHEREAS, IMPAX is the holder of the ANDA for the 80mg dosage strength of the Product (as hereinafter defined), has received tentative approval for the ANDA for the 10mg, 20mg and 40mg dosage strengths of the Product and is or expects to be approved by the FDA (as hereafter defined) to manufacture, market and sell the Products as noted above, in the Territory (as hereinafter defined); and WHEREAS, DAVA is engaged in marketing and distributing generic pharmaceutical products in the Territory and possesses qualified marketing and distribution systems and organizations to enable it to promote, market and distribute the Products throughout the Territory; and WHEREAS, DAVA and IMPAX have determined that it would be in their mutual interests to enter into this Agreement in order to grant to DAVA the exclusive right to market and distribute the Products in the Territory, subject to the terms and provisions of this Agreement. NOW, THEREFORE, in consideration of the premises set forth and covenants exchanged herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, DAVA and IMPAX, intending to be legally bound, agree as follows:
I. DEFINITIONS 1.1 “Accountant ” means one of the then ten (10) largest independent certified public accounting firms.
1.2 “Acquisition Price” means, initially, for each Product, by dosage strength, the price set forth in Exhibit A , as attached hereto and incorporated herein, and as may be modified pursuant to Section 5.2(b) hereof.
1.3 “Adverse Drug Experience” or “ADE” has the meaning set forth in 21 CFR §314.80(a), as amended from time to time.
1.4 “Affiliate(s) ” means any corporation, association, company, organization or other entity that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with DAVA or IMPAX, as the case may be. For purposes of this definition, control includes the ability, directly or indirectly, through ownership of securities, by agreement, or by any other method, to direct fifty percent (50%) or more of the outstanding equity votes of any entity, whether or not represented by securities.
Page 1 of 45
1.5 “Agreement ” means this Agreement, together with all appendices, exhibits and schedules attached hereto, as the same may be amended or supplemented from time to time, by written agreement of the Parties.
1.6 “ANDA ” means the abbreviated new drug applications of IMPAX numbered, with respect to the 80mg, 76-318, and with respect to the 40mg, 20mg, and 10mg 76-446, seeking approval for the Products under Section 505(j) of the FFDCA and FDA’s implementing regulations, including all amendments and supplements, filed pursuant to the requirements of the FDA, including all documents, data and other information concerning such Products submitted by IMPAX as part of the application or in amendments or supplements thereto that are necessary for FDA approval to market such Products in the Territory during the term of this Agreement.
1.7 “Appointment Fee ” has the meaning set forth in Section 5.1(a) hereof.
1.8 “Availability Notice ” has the meaning set forth in Section 4.3 hereof.
1.9 “Business Day ” means any day other than a Saturday, Sunday or any day banks are authorized or required to be closed in the State of New York.
1.10 “cGMPs ” means current good manufacturing practices set forth in Title 21 of the C.F.R., Parts 210 and 211, as amended from time to time, and all other Laws applicable to the manufacture of the Products that are in effect at the time and place of manufacture of the Products during the term of this Agreement.
1.11 “Calendar Quarter” means those three (3) month periods beginning on January 1, April 1, July 1, and October 1.
1.12 “COA ” has the meaning set forth in Section 6.1 hereof.
1.13 “Competing Equivalent Product(s) ” means any dosage strength of the tablet form of generic oxycodone hydrochloride extended release product(s) approved under (i) an Abbreviated New Drug Application, (ii) a 505(b)(2) New Drug Application, or (iii) in the case of the “authorized generic ”, the new drug application ( “NDA ”) held by Purdue Pharma, L.P. or its Affiliates.
1.14 “Confidential Information ” has the meaning set forth in Section 10.2 hereof.
1.15 “DAVA Activities” has the meaning set forth in Section 9.1 hereof.
1.16 “DAVA Label and Tablet Specifications ” means the label copy (which shall include DAVA’s National Drug Code (“NDC”)), packaging and tablet imprinting requirements of DAVA, which are subject to final approval by IMPAX, as attached hereto and incorporated herein in Exhibit B .
1.17 “DEA ” means the United States Drug Enforcement Administration, or any successor
Page 2 of 45
agency with responsibilities comparable to those of the United States Drug Enforcement Administration.
1.18 “Delay Payment ” has the meaning set forth in Section 4.1(d) hereof.
1.19 “Discount” has the meaning set forth in Section 5.3(d).
1.20 “Effective Date ” means the date first above written in this Agreement.
1.21 “Excess Gross Profit Split ” has the meaning set forth in Section 5.3(c) hereof.
1.22 “FDA ” means the Food and Drug Administration of the United States or any successor entity thereto.
1.23 “FFDCA ” means the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C. §301 et seq., and any related federal and/or state law or regulation pertaining to the safety, effectiveness, adulteration, misbranding, mishandling, packaging, labeling or storage of pharmaceutical ingredients, finished pharmaceutical products, and/or medical devices that may be applicable to the Product during the term of this Agreement.
1.24 “Firm Order ” means a firm, binding, written purchase order for Product to be manufactured by IMPAX, specifying quantities and delivery schedules for each Product, which order shall be in full manufacturing lot size quantities as described in Exhibit A .
1.25 “Force Majeure ” has the meaning set forth in Article XV hereof.
1.26 “Forecasts ” has the meaning set forth in Section 4.1(b) hereof.
1.27 “GAAP” means generally accepted accounting principles in the United States of America, consistently applied.
1.28 “Gross Profit ” means Net Sales minus the sum of (i) the Marketing Allowance, (ii) with respect to the Products sold during the period commencing on the Launch Date and ending on the first anniversary of the Launch Date, the Label Conversion Fee and (iii) the Acquisition Price of such Products.
1.29 “Gross Profit Split ” has the meaning set forth in Section 5.3(b) hereof.
1.30 “IMPAX Activities ” has the meaning set forth in Section 9.2 hereof.
1.31 “Indemnified Party” has the meaning set forth in Section 9.3 hereof.
1.32 “Indemnifying Party ” has the meaning set forth in Section 9.3 hereof.
1.33 “Initial Delivery Schedule ” has the meaning set forth in Section 4.1(a) hereof.
Page 3 of 45
1.34 “Initial Firm Order ” has the meaning set forth in Section 4.1(a) hereof.
1.35 “Initial Forecast ” has the meaning set forth in Section 4.1(a) hereof.
1.36 “Initial Term” has the meaning set forth in Section 8.1 hereof.
1.37 “Intellectual Property ” means all intellectual property owned by, or licensed to a Party related to the Products including, without limitation, patents, patent applications, continuations-in-part, divisionals, trade secrets, know-how, copyrights, trade names, trademarks, and trade dress.
1.38 “Label Conversion Fee ” means XXXXX percent ( XXXXX %) of Net Sales.
1.39 “Launch Date ” means, with respect to any Product, the later of December 5, 2005 or the date of FDA final approval of the ANDA applicable to the Product.
1.40 “Law ” means any local, state or federal rule, regulation, statute or law relevant to the manufacture, distribution, promotion, marketing, handling, storage and/or sale of the Products, and to any other matters set forth herein.
1.41 “Losses ” means any liabilities, damages (including, solely for purposes of Section 4.1(d) hereof, diminished, forfeited or lost Gross Profits), costs or expenses, including reasonable attorneys’ fees, incurred by any Party that arise from any claim, lawsuit or other action by a Third Party.
1.42 “Marketing Allowance ” means XXXXX percent ( XXXXX %) of Net Sales.
1.43 “MSDS” has the meaning set forth in Section 6.1 hereof.
1.44 “Net Sales ” means the gross amount invoiced by DAVA to Third Parties for the Products sold by DAVA in the Territory, less the sum of (i) the Sales Amount and (ii) the Shipping Expense incurred by DAVA with respect to such Products.
1.45 “Party ” or “Parties ” means DAVA or IMPAX, or both of them, depending upon the context in which such word may appear.
1.46 “Person” means a natural person, a corporation, a partnership, a trust, a joint venture, a limited liability company, any governmental authority or any other entity or organization.
1.47 “Pre-Marketing Period” means that period commencing on the Effective Date and ending on the Launch Date.
1.48 “Product ” means each of the finished 80mg, 40mg, 20mg, and 10mg dosage strengthsof oxycodone hydrochloride extended release tablets that are approved for sale in the Territory under the ANDA as generic versions of OxyContin ® tablets.
Page 4 of 45
1.49 “Promotional Materials ” means all printed or graphic matter containing the name of or any information about any of the Products that is intended for distribution to a person who is not an employee or agent of DAVA and any such matter that does not reference a Product but is intended for use in the promotion of a Product. Promotional Materials include, but are not limited to, print and broadcast advertisements in any medium, brochures, booklets, mailing pieces, detailing pieces, file cards, bulletins, calendars, catalogs, letters to physicians or consumers, audio or video recordings, exhibits, literature, reprints, and press releases in any medium.
1.50 “Quality Agreement ” has the meaning set forth in Section 7.8 hereof.
1.51 “Receiving Facility ” has the meaning set forth in Section 4.3 hereof.
1.52 “Reconciliation Statement” has the meaning set forth in Section 5.3(a) hereof.
1.53 “Reporting Period ” means a three -month period corresponding to a Calendar Quarter.
1.54 “Risk Management Plan ” means the activities and security controls that IMPAX will require to institute in order to enter into this Agreement as set out on Exhibit F hereto.
1.55 “Rolling Forecasts” has the meaning set forth in Section 4.1(b) hereof.
1.56 “Sales Amount ” has the meaning set forth in Section 5.3(d) hereof.
1.57 “Serious ADE ” has the meaning set forth in 21 CFR §314.80(A), as amended from time to time.
1.58 “Shipping Expense” means DAVA’s actual freight, storage, and incremental insurance expense incurred exclusively in connection with the storage and distribution of the Products.
1.59 “Specifications ” means all product design, regulatory, manufacturing, quality control, and quality assurance procedures, processes, practices, standards, instructions and specifications comprising IMPAX’s FFDCA approval applicable to the manufacture, labeling and packaging of Products as set forth in the ANDA, as attached hereto and incorporated herein as Exhibit C , and as may be hereafter modified by written agreement of the Parties.
1.60 “States ” means the 50 states of the United States and the localities therein.
1.61 “Territory” means the United States of America and the Commonwealth of Puerto Rico.
1.62 “Third Party ” means any Person that is neither a Party nor an Affiliate of a Party.
1.63 “Wholesalers ” means any recognized national or major regional pharmaceutical wholesaler.
Page 5 of 45
II. SCOPE OF AGREEMENT 2.1 Subject to the provisions of this Agreement, IMPAX hereby appoints DAVA as the sole and exclusive distributor of the Products for the Territory and DAVA hereby accepts such appointment and agrees to act as the sole and exclusive distributor of the Products for the Territory and to promote, market and distribute the Products to maximize Gross Profit therefrom in the Territory upon the terms and conditions herein provided.
2.2 During the Pre-Marketing Period, DAVA shall be permitted to communicate, including the solicitation and receipt of orders, with customers regarding the Product to the extent permitted by Law. The foregoing notwithstanding, DAVA shall only be permitted to ship Product to its customers during the Pre-Marketing Period, if and to the extent Product is available for shipment, provided that the receiving customers agree not to commence sales of the Product prior to the Launch Date. Upon the Launch Date, DAVA’s customers shall be permitted to commence dispensing Product.
2.3 Except as otherwise provided in this Section 2.3 or in Section 4.1(d) hereof, during the term of this Agreement, DAVA shall purchase from IMPAX all of its requirements of Products for sale in the Territory and DAVA shall not directly or indirectly manufacture, market or distribute a Competing Equivalent Product. IMPAX shall use its commercially reasonable efforts to timely manufacture and sell such Products to DAVA at the Acquisition Price and on an exclusive basis in the Territory. The foregoing notwithstanding, to the extent that for any reason (other than by reason of a material breach by DAVA of its obligations under this Agreement), including Force Majeure, IMPAX is unable to supply to DAVA, for a period of three (3) consecutive calendar months, at least ninety percent (90%) of the quantity of any Product specified by DAVA in a Firm Order submitted to IMPAX in accordance with Section 4.1(b), DAVA shall be entitled to purchase a Competing Equivalent Product from a supplier other than IMPAX (provided that DAVA shall use its commercially reasonable efforts to limit its contractual obligations to purchase such Competing Equivalent Product and provide IMPAX with copies of all such commitments) and shall be entitled to market, sell, promote and/or distribute such Competing Equivalent Products in the Territory during such time. For purposes of this Section 2.3, the amount of Product that IMPAX is unable to supply to DAVA shall include Product delivered by IMPAX that is rejected by DAVA pursuant to Article VI hereof. Other than with respect to the Delay Payments referred to in Section 4.1(d), the foregoing provision shall be DAVA’s exclusive remedy for the failure of IMPAX to timely supply Product to DAVA. DAVA shall be permitted to purchase such Competing Equivalent Product only until the later of (i) DAVA’s receipt of written notice from IMPAX to the effect that IMPAX shall resume delivery of Products to DAVA in accordance with DAVA’s Firm Orders and Forecasts and (ii) the date DAVA, using commercially reasonable efforts, is able to terminate the agreement(s), if any, under which it is has been
Page 6 of 45
acquiring such Competing Equivalent Product.
2.4 During the term of this Agreement, neither IMPAX nor any of its Affiliates shall directly manufacture and sell or supply for resale in the Territory (except for the supply of Products to DAVA pursuant to this Agreement) or sell, market or distribute any Product in the Territory to any Third Party outside of the Territory that IMPAX intends to cause to resell, or that IMPAX has reason to know intends to resell, such Product in the Territory.
2.5 During the term of this Agreement, neither DAVA nor any of its Affiliates shall promote or distribute the Products outside the Territory or to any purchaser, distributor or distributee that DAVA has reason to know intends to utilize, resell or redistribute the Products outside the Territory.
2.6 If, based upon the rolling two-year average of past payments made to IMPAX in respect of the Gross Profit Split (as calculated on April 1 of each calendar year), such payments shall be less than XXXXX dollars ($ XXXXX ) for a 12-month period, the appointment effected by Section 2.1, upon written notice to DAVA, shall convert to a non-exclusive appointment of DAVA as a distributor of the Products in the Territory, and DAVA shall continue to comply with the terms and conditions of this Agreement as if such conversion shall not have occurred. The foregoing notwithstanding, the conversion to a non-exclusive appointment contemplated in this Section 2.6 shall not occur if, within ten (10) Business Days of receipt of notice from IMPAX, DAVA elects to remit to IMPAX the amount by which such payments were less than XXXXX dollars ($ XXXXX ).
III. DISTRIBUTION OF PRODUCTS 3.1 During the term of this Agreement, DAVA shall use commercially reasonable efforts (utilizing its marketing, distribution and management systems), which shall be at least equivalent to those efforts used by DAVA with respect to other generic products distributed by it, to develop a market for the Products in the Territory and to actively and continuously promote the sale of and sell the Products in the Territory to maximize Gross Profit. However, DAVA shall not be deemed to have failed to abide by or have failed to perform in accordance with the foregoing standard to the extent that DAVA is prevented from performing or hindered in its performance of such standard by any act or omission of IMPAX. DAVA shall be solely responsible for the advertising and promotion of the Products, including the Promotional Materials, and shall comply with all applicable Laws in that regard including, without limitation, applicable DEA and FDA regulations and guidelines.
3.2 DAVA shall have sole discretion in setting the price for the sale of the Products in the Territory.
3.3 DAVA shall conduct or cause to be conducted such quality control tests as are required of DAVA by Law including, but not limited to, cGMPs, prior to sale or other release of
Page 7 of 45
a Product in the Territory.
IV. FORECASTS AND SUPPLY 4.1 (a) Initial Forecast. The initial forecast, which covers the period commencing on the Launch Date through the end of the subsequent five (5) Calendar Quarters (“Initial Forecast”), is attached as Exhibit D . The forecast for the period from the Launch Date through the end of the third (3 rd ) full calendar month of the Initial Forecast will be considered firm and binding (“Initial Firm Order”) and is attached hereto and incorporated herein as Exhibit E . The delivery of Product from IMPAX to DAVA pursuant to the Initial Firm Order shall occur in accordance with the delivery schedule specified in the Initial Firm Order (the “Initial Delivery Schedule ”). (b) Subsequent Forecasts. Within five (5) days prior to the start of each calendar month, DAVA shall provide IMPAX with an updated written rolling forecast of DAVA’s expected requirements, in full manufacturing lot quantities, for the Products during the following fifteen (15) calendar months (“Rolling Forecasts” and, together with the Initial Forecast, the “Forecasts”). The first two (2) calendar months of such forecast shall be a restatement of the remaining firm order period of the prior forecast. The third calendar month shall be within plus or minus twenty five percent (+/- 25%) of the amount stated for such then non-binding calendar month in the immediately preceding forecast, rounded up to the next incremental full standard lot size (i.e., DAVA shall be obligated to order and purchase at least seventy-five percent (75%) of the amount, rounded up to full lot size, set forth in the forecast for such calendar month in the prior forecast). The forecast for the first three (3) months shall be deemed a Firm Order. The amounts set forth for each of the following twelve (12) calendar months shall constitute a non-binding, good faith estimate of the Product requirements of DAVA for such period. IMPAX shall deliver Product to DAVA’s Receiving Facility pursuant to each Firm Order no more than five (5) days after DAVA’s requested delivery date, provided that such Firm Order (other than the Initial Firm Order and the subsequent two (2) Firm Orders is delivered to IMPAX at least three (3) months prior to DAVA’s requested delivery date. The terms and conditions of this Agreement shall be controlling over any conflicting terms and conditions stated in DAVA’s purchase order or IMPAX’s invoice or confirmation. Any other document which shall conflict with or be in addition to the terms and conditions of this Agreement is hereby rejected (unless the Parties shall have mutually agreed to the contrary in writing in respect of a particular instance).
(c) IMPAX shall promptly notify DAVA in writing if at any time IMPAX has reason to believe that IMPAX will not be able to fill at least ninety -five percent (95%) of a Firm Order for any Product in accordance with
Page 8 of 45
the delivery schedule specified therein by DAVA and pursuant to the terms and conditions of this Agreement.
(d) To the extent that (1) IMPAX’s delivery to DAVA of at least ninety percent (90%) of any Product set forth in a Firm Order is delayed for more than forty-five(45) days beyond the period permissible under Section 4.1(b) hereof and (2) as a result of such delay DAVA is unable to fill an order by a Third Party for such Product or a Third party rejects or fails to accept a delivery of an order that included such delayed Product, then IMPAX shall pay to DAVA an amount equal to DAVA’s Losses resulting from such inability, rejection or failure to accept. (“Delay Payment”); provided, however, that no such Delay Payment shall be payable if the delay is caused by (i) Force Majeure, (ii) Product recall, (iii) a material breach by DAVA of its obligations under this Agreement including, without limitation, DAVA’s failure to deliver or delay in delivery of properly executed DEA Forms 222, or (iv) IMPAX’s inability, through no fault of its own, to acquire sufficient active ingredient of the Product due to DEA quota restrictions. Notwithstanding the foregoing, such Delay Payment will be payable with respect to the Products specified for the fourth shipment of the Initial Firm Order irrespective of the cause of the delay, unless the delay is caused by the material breach by DAVA as set forth in clause (iii) of the proviso to the preceding sentence. Any obligation to make Delay Payments hereunder shall not exceed the sum of XXXXX dollars ($ XXXXX ) . Any Delay Payment shall be paid by IMPAX within seventy-five (75) days after receipt of DAVA’s invoices therefor, which invoices shall set forth in reasonable detail the manner in which the Delay Payments were calculated. If IMPAX disputes the amount of such invoice, it shall notify DAVA within ten (10) days of its receipt of such invoice and thereafter the Parties shall enter into good faith negotiations in order to revise, if necessary, the amount of the Delay Payment. If the Parties are unable to agree upon revisions to the Delay Payment within twenty (20) days after the date of DAVA’s invoice therefor, any Party shall have the right, exercisable by written notice to the other Party, to invoke the arbitration provisions set forth in Article XXXI. During the time period during which the Parties are unable to agree upon the amount of the Delay Payment, IMPAX shall pay such invoice only to the extent it is in agreement with it. Notwithstanding the provisions of Section 2.3, DAVA, to mitigate its Losses, shall use its commercially reasonable efforts to cause a Third Party to produce and sell to DAVA a Competing Equivalent Product as to which there has been such delay in delivery by IMPAX. To the extent that DAVA is able to purchase Competing Equivalent Products from a Third Party, DAVA shall be entitled to Delay Payments with respect to the sale of such Competing Equivalent Product to the extent sales thereof result in Losses to DAVA.
(e) All Firm Orders and Forecasts shall be in writing or may be provided
Page 9 of 45
electronically to IMPAX. Firm Orders shall be accompanied by appropriate documentation, including DEA Form 222, if necessary. 4.2 IMPAX shall accept all Firm Orders submitted in accordance with and on the terms set forth in this Agreement. Notwithstanding anything to the contrary contained herein, no terms and conditions contained in any Firm Order, acknowledgment, invoice, bill of lading, acceptance or other preprinted form issued by either Party shall be effective to the extent such are inconsistent with the terms of this Agreement or the Quality Agreement.
4.3 Subject to receipt of proper documentation, including DEA Form 222 (if necessary), IMPAX shall deliver ordered Product to the U.S. based warehouse designated by DAVA (the “Receiving Facility”) C.I.F. DAVA facility(ies) in the United States. Title to and risk of loss or damage to the Products shall pass to DAVA upon delivery and receipt of the Products at the Receiving Facility. IMPAX shall promptly provide DAVA by fax with a copy of the bill of lading stating that any order (or part thereof) has been shipped to the Receiving Facility (this bill of lading shall hereafter be referred to as the “Availability Notice ”).
4.4 Products supplied by IMPAX shall (i) have a shelf life of at least twenty four (24) months from the date of manufacture and (ii) at the time of the Availability Notice, conform to the DAVA Label and Tablet Specifications. IMPAX agrees that no Product shall have a remaining shelf life of less than eighteen (18) months from the date of the Availability Notice.
4.5 All Products supplied hereunder will be in finished dosage form, filled, packaged and labeled for commercial sale in accordance with the terms and conditions of this Agreement, the Quality Agreement, the Specifications and applicable Laws. IMPAX will be responsible for the purchase of all other materials that are included in finished Products.
4.6 IMPAX shall be responsible for all DEA reporting, where applicable, in connection with the shipment of the Products to DAVA’s designated distribution facility and DAVA shall be responsible for all DEA reporting in connection with the receipt of Products from IMPAX and the sale of Products to DAVA ’s customers.
4.7 The Acquisition Price includes the expense of providing tablet imprinting, package inserts and labelling and packaging materials in conformity with the DAVA Label and Tablet Specifications and includes shipping costs. All packaging materials, inserts and labels shall comply with the DAVA Label and Tablet Specifications provided to IMPAX by DAVA. IMPAX shall be responsible, except with regard to DAVA’s logos, trademarks and any other information provided by DAVA, for compliance of the packaging materials, inserts and labels with the requirements of the Specifications, FDA and FFDCA. IMPAX will not change in any manner the labelling of Products supplied to
Page 10 of 45
DAVA without the prior written consent of DAVA, except as may be required by Law, the FDA or the FFDCA, in which case IMPAX shall give DAVA prompt and prior written notice thereof. DAVA shall, at its sole cost and expense, supply to IMPAX in a timely fashion, all required artwork for DAVA’s logo, trademarks and other identifying features to be used in connection with the Product packaging and labelling. DAVA acknowledges that all DAVA package inserts, labels, labeling and Promotional Materials will be submitted by IMPAX to the FDA.
4.8 All orders for Product shall be placed using DAVA’s standard form of purchase order and shall be invoiced using IMPAX’s standard form of invoice. All purchase orders submitted by DAVA shall require the purchase of Product in minimum production whole batch sizes, which sizes are indicated in Exhibit A hereto, or multiples thereof (unless IMPAX agrees in writing to smaller quantities either generally or in respect of any particular purchase order) and shall specify, amongst other things, the required delivery date (which shall anticipate an order\delivery cycle of at least twelve (12) weeks from acceptance or deemed acceptance thereof (as contemplated below)).
4.9 Any and all transfer, sales, use, registration and other taxes imposed upon or with respect to or measured by the sale or delivery by IMPAX to DAVA of any Product under this Agreement will be the responsibility of and for the account of DAVA. Unless IMPAX is provided with a certificate evidencing DAVA’s exemption from the payment of sales taxes (i.e., Certificate of Authority), Sales tax will be included on IMPAX’s invoices to DAVA for such Products. Notwithstanding the previous sentence, DAVA will have no obligation to pay any income tax imposed on IMPAX or any of its Affiliates, which may arise from the transactions contemplated by this Agreement.
V. PAYMENTS AND REPORTS 5.1 Appointment Fee. In consideration for being appointed the exclusive distributor of the Products for the Territory, DAVA shall pay the Appointment Fee set forth in Exhibit G hereto. 5.2 (a) Acquisition Price. DAVA shall remit payment for shipments of Products sent by IMPAX to DAVA in U.S. dollars within seventy-five (75) days following the date of IMPAX’s invoice which will be transmitted no earlier than with delivery of the Product; provided, however, that with respect to the Initial Firm Order, DAVA shall remit payment within one-hundred five (105) days of date of invoice and shipment. The invoice, which shall not be dated prior to the date IMPAX provides DAVA with an Availability Notice, shall reflect the Acquisition Price on date of shipment by IMPAX for each Product. (b) The Acquisition Price for each Product for the period commencing on the
Page 11 of 45
Launch Date and ending on December 31, 2006 is set forth on Exhibit A attached hereto. By November 1 of each year (commencing with November 1, 2006) and each twelve (12) month period thereafter, IMPAX will provide DAVA with (i) the new Acquisition Price and (ii) documentation of the increase, if any, of IMPAX’s cost of the active ingredient of the Product over the past twelve month period. The new Acquisition Price for any year shall be the then-current fully-burdened cost of manufacturing the Product (as calculated using the same methodology and components used to calculate such costs for purposes of Exhibit A hereto), plus an amount equal to XXXXX percent ( XXXXX %) of such change. The foregoing notwithstanding, the percentage increase in the Acquisition Price in any one year for all components of the Acquisition Price, other than the cost of the active ingredient of the Product, shall not exceed the annual percentage increase for the period ending on the immediately preceding October 30th in the Consumer Price Index, National for All Urban Consumers, All Items, as reported by the United States Bureau of Labor Statistics or any government successor thereof.
(c) With respect to any payments which are not made when due under this Agreement, DAVA shall, within five (5) days of receipt of written notice from IMPAX, pay IMPAX interest at the rate of twelve percent (12%) per annum or part thereof, until paid in full. 5.3 (a) Gross Profit Split/Reconciliation Statement. Within fifteen (15) days following the end of each Reporting Period, DAVA shall submit to IMPAX a written report (“Reconciliation Statement”) setting forth the quantity of each Product sold by DAVA during the Reporting Period and the Net Sales, Acquisition Price, Marketing Allowance, Label Conversion Fee (if applicable), Shipping Expense and Gross Profit related to such sales. DAVA will (i) provide IMPAX with ending inventory quantities for each Product as of the end of each Reporting Period and (ii) upon reasonable notice to DAVA and during normal business hours, make available to IMPAX, at DAVA’s offices, once each quarter, all original invoicing source documentation regarding sales of the Products to enable IMPAX to verify sales of Products and all adjustments made to calculate Gross Profit. (b) Gross Profit Split. DAVA shall pay IMPAX an amount equal to XXXXX percent ( XXXXX %) of the Gross Profit (“Gross Profit Split”) with respect to all Products sold by DAVA during each Reporting Period, which amount shall be due and payable to IMPAX no later than thirty (30) days after each Reporting Period. In the event that Gross Profit is a negative amount for any Reporting Period, no payment or refund shall be due from DAVA to IMPAX or from IMPAX to DAVA, in respect thereof, provided, however, the Gross Profit with respect to the subsequent Reporting Period, shall be reduced by such negative amount for purposes
Page 12 of 45
of determining IMPAX’s Gross Profit Split for such subsequent Reporting Period. For purposes of this Section 5.3(b), the period commencing on the Launch Date and ending on December 31, 2005 shall be included in the Reporting Period ending March 31, 2006.
(c) Excess Gross Profit. The provisions of Section 5.3(b) hereof notwithstanding, to the extent the aggregate Gross Profit generated by DAVA with respect to the Products during any calendar year exceeds XXXXX dollars ($ XXXXX ), IMPAX’s share of the amount of Gross Profits generated during such calendar year in excess of XXXXX dollars ($ XXXXX ) shall be XXXXX percent ( XXXXX %) (the “Excess Gross Profit Split”). DAVA shall remit any amount payable by operation of this Section 5.3(c) simulatenously with the Reconciliation Statement deliverable with respect to the fourth (4 th ) Reporting Period in the calendar year to which this Section applies, if any. DAVA will not knowingly engage in any practice which has as its primary purpose the shifting of sales from one period into another period so as to shift Gross Profits from one period to another period.
(d) Sales Amount/Adjustment. In determining Net Sales, the Parties shall agree upon a fixed percentage of the gross amount invoiced by DAVA to be deducted from such gross amount (the “Discount”) to reflect, with respect to sales to Third Parties, applicable (i) trade discounts, (ii) promotional allowances, (iii) cash discounts, (iv) customer refunds and credits, (v) returns, (vi) reprocurement charges, (vii) customer and government rebates (viii) chargebacks, (ix) retroactive price or shelf stock adjustments and price equalizations. The product of the gross amount invoiced multiplied by the Discount is referred to herein as the “Sales Amount.” During the period commencing on the Effective Date and ending on March 31, 2006, the Discount shall be XXXXX percent ( XXXXX %) with respect to sales to Wholesalers and XXXXX percent ( XXXXX %) with respect to sales to customers other than Wholesalers. With repect to the Calendar Quarters beginning April 1, July 1, and October 1, 2006, no later than fifteen (15) days prior to the commencement of each such Calendar Quarter, the Parties shall mutually agree, in writing, upon the Discounts to be applied with respect to Product sales during the immediately following Calendar Quarter. With repect to each calendar year commencing with the calendar year ending on December 31, 2007, no later than 30 days prior to the beginning of each such calendar year, the Parties shall mutually agree, in writing, upon the Discounts to be applied with respect to Product sales during such calendar year.
If the Parties are unable to agree upon any such Discount within the periods set forth in this Section 5.3(d), any Party shall have the right, exercisable by written notice to the other Party, to invoke the arbitration provisions set forth in Article XXXI, and the Discount then in effect shall remain in effect
Page 13 of 45
pending resolution or agreement.
(e) Records and Audit . (i) DAVA shall keep complete and accurate books and records setting forth Gross Profit, gross sales, Net Sales (including all deductions to determine Net Sales), Marketing Allowance, Label Conversion Fee, Shipping Expense, aggregate Acquisition Price, and any and all amounts due to IMPAX hereunder, which books and records shall be maintained in accordance with GAAP on an individual Product basis. DAVA shall permit IMPAX, at IMPAX’s expense, to engage an Accountant, reasonably acceptable to DAVA, to examine such books and records at any reasonable time, but not more than two (2) times per year and not later than three (3) years following the rendering of the reports, accountings and payments that are the subject of the examination. IMPAX shall use resonable efforts to cause the Accountant to execute a written agreement, reasonably satisfactory to DAVA, obligating such Accountant to maintain in confidence all information disclosed to such Accountant during the examination and all information generated by such Accountant pursuant to the examination. In the event such examination determines that DAVA has underpaid IMPAX for the period under review by more than five percent (5%), DAVA shall also reimburse IMPAX for the cost of such examination and pay to IMPAX interest on such underpayment at the rate of 12% per annum. The determination by the Accountant will be binding on the Parties.
(ii) IMPAX shall keep complete and accurate books and records setting forth the cost of the active ingredient of the Product and the cost of the components comprising, and the methodology of calculating, the Acquisition Price. IMPAX shall permit DAVA, at DAVA’s expense, to engage an Accountant, reasonably acceptable to IMPAX, to examine such books and records at any reasonable time, but not more than one (1) time per year and not later than three (3) years following the rendering of the reports, accountings and payments that are the subject of the examination. DAVA shall use resonable efforts to cause the Accountant to execute a written agreement, reasonably satisfactory to IMPAX, obligating such Accountant to maintain in confidence all information disclosed to such Accountant during the examination and all information generated by such Accountant pursuant to the examination. In the event such examination determines that DAVA has overpaid IMPAX for the period under review by more than five percent (5%), IMPAX shall also reimburse DAVA for the cost of such examination and pay to DAVA interest on such underpayment at the rate of 12% per annum. The determination by the Accountant will be binding on the Parties.
Page 14 of 45
VI. PRODUCT TESTING/INSPECTION 6.1 IMPAX shall perform quality assurance testing with respect to the Products sold hereunder, including stability testing, so that the Products conform with the Specifications as of the date of the Availability Notice. Upon each delivery of Product to DAVA, IMPAX shall provide to DAVA a certificate for the Product describing the Product, product number, lot number and expiration date and certifying that the Product meets the Specifications in the form of a Certificate of Analysis (hereinafter “COA”). IMPAX will also provide DAVA with Material Safety Data Sheets (hereinafter “MSDS”) as required by Law for the Products, and updates of same as necessary. DAVA will permit IMPAX’s personnel, upon reasonable notice, to visit at reasonable intervals, and for reasonable durations during regular business hours, any DAVA facility used for the storage and distribution of the Products and will allow such personnel to review and make copies of any relevant records in connection therewith.
6.2 DAVA shall have a period of thirty (30) days from the later of (a) the date of shipment of the Products in accordance with Sections 4.3 and 4.4 hereof, or (b) the date of DAVA’s receipt of the COA’s applicable to such Product, to inspect any shipment of a Product to determine whether such shipment conforms to the Specifications. If DAVA determines that a Product does not conform to the Specifications, it shall notify IMPAX, immediately, if possible, but no later than five (5) Business Days after determining a Product does not conform to the Specifications. DAVA’s failure to notify IMPAX within the stipulated period will be deemed, for purposes of this Agreement, as DAVA’s acceptance of such shipment and shall constitute a waiver of any claims DAVA may have against IMPAX under this Article VI with respect to such shipment including, without limitation, the right to return any such shipment. DAVA shall have no right to return a Product unless such Product does not conform to the Specifications or is damaged. If IMPAX agrees that a Product does not conform to the Specifications, DAVA’s sole remedy shall be as set forth in this Section 6.2. DAVA shall return the non-conforming Product to IMPAX, at a location designated by IMPAX and at IMPAX’s expense. IMPAX, at no expense to DAVA, shall either, in IMPAX’s sole discretion, (i) use commercially reasonable efforts to replace any non-conforming Product, or (ii) immediately provide a credit to DAVA for any amounts paid by DAVA to IMPAX on account of the Products in question. If IMPAX proceeds with replacing the non-conforming Product, then replacement Products shall be supplied by IMPAX to DAVA at no cost to DAVA if DAVA has already paid for the rejected Products and not received a credit therefor, as aforesaid. DAVA shall have one (1) full Business Day after receipt of the Product to claim a delivery shortage and failure of such notice shall constitute acceptance of the amount of Product delivered.
6.3 In the event IMPAX does not agree with DAVA’s determination that a Product fails to meet Specifications, the Parties shall, in good faith, attempt to resolve such dispute. In the event the Parties cannot resolve such dispute among
Page 15 of 45
themselves, either Party may submit the matter to an independent testing laboratory agreeable to both DAVA and IMPAX for a binding opinion. The expenses of obtaining the binding opinion shall be equally shared by DAVA and IMPAX. In the event that the Parties do not agree to submit the dispute to a testing laboratory or do not agree on an independent testing laboratory, the Parties shall remain free to pursue a remedy in a manner consistent with Article XIV hereof.
VII. REGULATORY COMPLIANCE 7.1 IMPAX shall remain responsible for maintaining and fulfilling all regulatory requirements in the Territory with respect to a Product that are imposed by Law upon IMPAX as the manufacturer of the Product and the holder of the ANDA in connection therewith. IMPAX shall be responsible for all DEA reporting related to the manufacture of the Products and sale to DAVA and DAVA shall be responsible for all DEA reporting relating to its receipt of Products from IMPAX and the sale of the Products to its customers. DAVA shall be responsible for obtaining, maintaining and fulfilling all regulatory requirements in the Territory with respect to a Product that are imposed by Law upon DAVA in connection with DAVA’s marketing, distribution and sale of such Product. DAVA and IMPAX shall cooperate, to the fullest extent, to ensure that the Parties comply with such regulatory requirements, including but not limited to the prompt reporting of ADE information and other postmarketing reports as are required to be filed with the FDA or its equivalent; provided however, that this provision shall not be interpreted to require IMPAX to disclose to DAVA any Intellectual Property owned by any Third Party, regardless of whether IMPAX has access to such Intellectual Property. The parties agree that DAVA shall submit to IMPAX or its designee all complaints, ADE reports and other medical inquiries associated with a Product as soon as possible but within forty-eight (48) hours of DAVA’s receipt of such reports. IMPAX will be responsible for fulfilling any regulatory requirements with respect to such events and will make any necessary contact with the FDA regarding the subject matter of same. 7.2 IMPAX shall notify DAVA promptly, but in no event later than ten (10) Business Days after it obtains knowledge, of any pending or threatened litigation or governmental investigation, proceeding or action involving a Product or the facility where a Product is being manufactured by IMPAX or its Affiliate of which IMPAX becomes aware and of any defective, adulterated or misbranded Product manufactured by it or its Affiliate. IMPAX shall notify DAVA promptly, but in no event later than ten (10) Business Days, of any complaints related to the Products which it receives from customers of DAVA or others concerning any Product. 7.3 Each of IMPAX and DAVA shall keep, or cause its Affiliates to keep, as required, such samples and such records (or copies thereof) in respect of the
Page 16 of 45
Products being manufactured, supplied or distributed by it as are required by the applicable Specifications and/or applicable Law for such period of time as may be required thereunder. Each of IMPAX and DAVA shall, and shall cause its Affiliate to, permit the other to have access to such samples and original records as are required to be maintained by such Party or its Affiliate upon reasonable notice to the other. 7.4 Each of IMPAX and DAVA shall promptly, but in no event later than ten (10) Business Days following its receipt thereof, provide the other with a copy of any correspondence or notices received by such Party (or its Affiliate) from the FDA regarding the Products. Further, each of IMPAX and DAVA shall promptly, but in no event later than ten (10) Business Days following its transmission thereof, provide a copy of any response to any such correspondence (provided that IMPAX or its Affiliate or DAVA, as the case may be, shall be entitled to delete from any such correspondence any references to IMPAX’s or such Affiliate’s, or DAVA’s, Confidential Information unrelated to the Products). Each of IMPAX and DAVA shall notify the other promptly, but in no event later than ten (10) Business Days following the occurrence thereof, of any materially adverse inspections by the FDA, DEA or other regulatory authorities which pertain to the Products or to the facilities of such Party or its Affiliate where the Products are being manufactured or stored and provide the other with a copy of the report received by such Party or its Affiliate from the FDA relating to such inspection (appropriately redacted for Confidential Information unrelated to the Products). 7.5 In the event DAVA or IMPAX shall be required or requested by any governmental authority within the Territory (or shall voluntarily decide) to recall a Product because such Product may violate any Laws or for any other reason, the Parties shall cooperate fully with one another in connection with any recall. If either Party believes a voluntary recall is necessary, the other Party shall not object to such recall. If a recall is due to IMPAX’s negligence, willful misconduct or breach of this Agreement, IMPAX shall reimburse DAVA for the Acquisition Price paid by DAVA for such recalled Product (to the extent paid by DAVA), all of the reasonable costs and expenses actually incurred by DAVA in connection with the recall, including, but not limited to, the costs of retrieving Products already delivered to customers, the costs and expenses DAVA is required to pay for notification, shipping and handling charges, reasonable attorney’s fees, and such other costs as may be reasonably related to the recall. If a recall is due to DAVA’s negligence, willful misconduct or breach of this Agreement, DAVA shall remain responsible for the Acquisition Price for the recalled Product and shall reimburse IMPAX for all the reasonable costs and expenses described above actually incurred by IMPAX in connection with such recall including administration of the recall and such other actual costs as may be reasonably related to the recall. If a recall results from a cause other than the negligence, willful misconduct or breach of this Agreement of or by DAVA or IMPAX, the Parties shall equally share all costs of the recall, including the Acquisition Price. Prior to any reimbursements pursuant
Page 17 of 45
to this Section 7.5, the Party claiming any reimbursement shall provide the other Party with reasonably acceptable documentation of all reimbursable costs and expenses. Neither party shall be liable to the other for consequential damages or lost profits whether in contract, warranty, negligence, tort, strict liability or otherwise, due to a product recall or the manufacture, storage, shipping, transportation, delivery, labeling, sale, marketing, distribution or use of the Product. 7.6 DAVA shall be responsible for filing and maintaining all documentation and other information as required by each and every State and the Commonwealth of Puerto Rico (“Puerto Rico”) for the purpose of listing each Product on each such State’s and Puerto Rico’s formulary or other similar authority, and for obtaining any approvals as may be necessary to sell such Products in the Territory. IMPAX shall provide DAVA with such assistance as reasonably necessary to obtain such listings including taking such steps on DAVA’s behalf as may be required by a manufacturer under any State’s laws, regulations or procedures. DAVA will pay Medicaid and other applicable rebates required by law or contract. 7.7 It shall be DAVA’s responsibility to enter into all agreements with state and federal governments necessary for coverage of the Products under state or federal health care programs and to list the Products under such agreements, including, but not limited to, the Medicaid Rebate Agreement with the Centers for Medicare and Medicaid Services, the PHS Pharmaceutical Pricing Agreement and the Master Agreement with the U.S. Department of Veterans Affairs. It shall be DAVA’s responsibility to make any required reporting and payments under such government agreements.
7.8 Within thirty (30) days following the Effective Date, DAVA and IMPAX shall enter into a Quality Agreement in form and content reasonably acceptable to DAVA and IMPAX (“Quality Agreement”). The Quality Agreement will include protocols and specific responsibilities for handling all Product quality complaints, ADE reports, and professional medical service inquiries in accordance with IMPAX ’s standard operating procedures and in conformity with applicable Laws.
7.9 IMPAX will permit DAVA’s representatives access, once prior to the Launch Date and no more than once each calendar year during the Initial Term, at reasonable times and on reasonable notice, to IMPAX’s manufacturing facilities for Product to conduct inspections of the premises where the Products are being manufactured. All of DAVA’s representatives will be obligated to execute a reasonable confidentiality agreement prior to commencing any such inspection. DAVA will provide IMPAX with a written report of the results of any inspections of IMPAX’s manufacturing facilities for Product within 30 days of any such inspection. If IMPAX disputes the findings of the inspection, such dispute will be resolved through the resolution procedures set forth in the Quality Agreement.
Page 18 of 45
7.10 The Risk Management Plan that IMPAX is implementing in connection with the execution of this Agreement is attached hereto as Exhibit F . Beginning in the calendar year ending December 31, 2006 DAVA will reimburse IMPAX for XXXXX percent ( XXXXX %) ( XXXXX percent ( XXXXX %)) in any year in which IMPAX shall have received a payment under Section 5.3(c) hereof) of IMPAX’s actual out-of-pocket expenses related to the implementation of the Risk Management Plan, provided that DAVA’s obligation in any one calendar year, under this Section 7.10 shall not exceed XXXXX dollars ($ XXXXX ). DAVA shall remit amounts owing to IMPAX under this Section 7.10 within forty five (45) days of receipt of an invoice from IMPAX detailing IMPAX’s expenses, but in no event prior to IMPAX’s completion of delivery of Product ordered by DAVA in its Initial Firm Order to DAVA in accordance with the Initial Delivery Schedule. DAVA shall cooperate with IMPAX and IMPAX’s implementation of the Risk Management Plan including, without limitation, including inserting elements of the Risk Management Plan in DAVA’s Promotional Materials and on its website and in other materials, where appropriate.
7.11 IMPAX, in its sole discretion, and at its cost, may perform periodic security audits of DAVA’s Product distribution system and will disclose its findings to DAVA. Except for cause, such security audits may be made no more than two times each calendar year, at reasonable times and on reasonable notice. DAVA will give IMPAX reasonable access and cooperation in connection with IMPAX ’s security audits.
VIII. TERM AND TERMINATION 8.1 The term of this Agreement shall begin on the Effective Date and shall terminate on the tenth (10 th ) anniversary of such date (the “Initial Term”). Thereafter, this Agreement shall automatically renew for successive one-year terms on the terms and conditions described herein unless one Party informs the other in writing of its intent to terminate this Agreement no less than twelve (12) months prior to the expiration of the then current term. 8.2 (a) If either Party commits a material breach of this Agreement, the other Party shall have the right to terminate this Agreement upon sixty (60) days written notice to the breaching Party specifying the breach, unless the Party allegedly in breach cures the asserted breach within such sixty (60) day cure period. (b) If either Party (i) institutes or has instituted against it any insolvency, receivership, bankruptcy or other proceedings for the settlement of that Party’s debts, and such proceedings are not dismissed within sixty (60) days, (ii) makes an assignment for the benefit of creditors, or (iii) dissolves or ceases to do business, the other Party may terminate this
Page 19 of 45
Agreement immediately upon written notice. (c) If IMPAX shall have paid DAVA a Delay Payment for a period of twelve (12) consecutive months, DAVA may terminate this Agreement immediately upon written notice.
(d) DAVA may terminate this Agreement upon written notice to IMPAX in the event that (i) any court in the Territory determines either that the sale of the Product or any Competiting Equivalent Product is in violation of Intellectual Property rights of the owner of OxyContin ® or (ii) a settlement is entered into between the owner of OxyContin ® , on the one hand, and IMPAX or the seller of a Competing Equivalent Product, on the other hand, pursuant to which it is agreed that sales of the 40 mg. and 80 mg. dosage strengths of the Product or Competing Equivalent Products, as the case may be, shall cease. Notwithstanding anything to the contrary contained in this Section 8.2, DAVA may not terminate this Agreement pursuant to the provisions of Section 8.2(a) or 8.2(c), if there shall have been a material breach on the part of DAVA under this Agreement. 8.3 Effect of Termination. (a) Termination of this Agreement for any reason shall be without prejudice to: (i) IMPAX ’s right to receive all payments already due from DAVA;
(ii) DAVA ’s right to sell such Product remaining in its inventory, and
(iii) Any other legal, equitable, or administrative remedies as to which a Party is or may become entitled, subject to the limitations provided in this Agreement. (b) Upon termination of this Agreement by IMPAX pursuant to the provisions of Section 8.2(a), the installments of the Appointment Fee remaining unpaid at the time of termination shall become immediately due and payable.
(c) Upon expiration or termination of this Agreement, IMPAX shall, at the election of the terminating Party, either (i) manufacture and ship, and DAVA shall purchase from IMPAX in accordance with the terms and conditions of this Agreement, any and all amounts of Products actually ordered for shipment by DAVA pursuant to a Firm Order prior to the
Page 20 of 45
effective date of such expiration or termination or (ii) cease shipment of product to DAVA whether or not subject to a Firm Order. (d) Termination of this Agreement for any reason shall not release either Party hereto from any obligation or liability which at such time has already accrued or which thereafter accrues from a breach prior to such expiration or termination, nor affect in any way the survival of any other right, duty or obligation of either Party hereto which is expressly stated elsewhere in this Agreement to survive such termination.
(e) Termination of this Agreement by DAVA under Section 8.2 hereof shall relieve DAVA of its obligation to pay any installments of the Appointment Fee payable subsequent to such termination.
(f) In the event of a termination under Section 8.2 hereof, DAVA shall either (i) sell to Third Parties any inventory of the Product held by DAVA or by DAVA’s distributor at the time of such termination, or (ii) return the inventory of Product held by DAVA or by DAVA’s distributor to IMPAX at IMPAX’s expense if such sale is prohibited by court order or regulatory action. 8.4 (a) Suspension of Payment of Appointment Fee . Notwithstanding Section 5.1, upon notice to IMPAX of the occurrence of any of the events set forth below (each, an “Event”), DAVA may suspend payment of any installment of the Appointment Fee not paid as of the date of the Event. An Event giving rise to a suspension of the Appointment Fee payments is as follows: (i) the failure of IMPAX to supply DAVA with ninety percent (90%) of the amounts of any Product ordered in a Firm Order (the amount by which the amount supplied failed to constitute 90% being referred to herein as a “Deficiency”) for any three months during any calendar year as a result of IMPAX’s inability, through no fault of its own, to acquire sufficient active ingredient of the Product due to DEA quota restrictions, unless such failure is a result of a material breach by DAVA of its obligations hereunder (e.g. an Event shall have occurred under this Section 8.4(a)(i) if during a calendar year (1) IMPAX delivers 50% of any amount of a dosage strength of the Product ordered in each of January, February and June or (2) IMPAX delivers (i) only 85% of the amont of the 80mg dosage strength Product ordered in January (ii) 70% of the amount of the 40mg dosage strength Product ordered in February and (iii) 75% of the amount of the 20mg dosage strength Product ordered in March); provided, however, that no Deficiency shall be deemed to exist as to any month if IMPAX, in fulfilling DAVA’s Firm Orders for the next suceeding one month, delivers additional Product in the amount of the Deficiency;
Page 21 of 45
(ii) if the Launch Date is delayed for a period of more than five (5) days after December 5, 2005,
(iii) in the event the sale of the 20mg, 40mg, or 80mg dosage strength of OxyContin® is discontinued (either voluntarily or involuntarily), or
(iv) in the event that the NDA related to the 80mg or 40mg dosage strength of OxyContin® is withdrawn voluntarily or suspended or terminated by a regulatory body. (b) Upon the occurrence of an Event, the Parties shall enter into good faith negotiations in order to revise, if necessary, the remaining unpaid Appointment Fee, Gross Profit Split and Excess Gross Profit Split (collectively, the “Revised Terms”). If the Parties are unable to agree upon the Revised Terms within ten (10) days after the occurrence of an Event, any Party shall have the right, exercisable by written notice to the other Party, to invoke the arbitration provisions set forth in Article XXXI. During the time period during which the Parties are unable to agree upon Revised Terms, the terms then in effect, other the remaining unpaid Appointment Fee, which shall remain suspended, shall continue to remain in effect.
IX. INDEMNIFICATION AND INSURANCE 9.1 DAVA shall defend, indemnify and hold harmless IMPAX, its Affiliates and the respective officers, directors, agents and employees of each from and against any Losses resulting from or arising out of (i) DAVA’s storage, handling, marketing, promotion, distribution, and/or delivery of the Products, including, without limitation, product liability claims arising out of DAVA’s storage, handling, marketing, promotion, distribution, or delivery of the Products, (ii) the execution by DAVA of this Agreement, (iii) the performance or breach by DAVA of its representations, warranties or obligations under this Agreement or (iv) the negligence or willful misconduct of DAVA, its employees or its agents (collectively “DAVA Activities”), except to the extent such Losses result from IMPAX Activities.
9.2 IMPAX shall defend, indemnify and hold harmless DAVA, its Affiliates and the respective officers, directors, agents and employees of each from and against any Losses resulting from or arising out of (i) IMPAX’s design, manufacturing, testing, packaging, storage, handling, and labeling (other than Losses resulting from or arising out of DAVA Label and Tablet Specifications) of the Products, including, without limitation, product liability claims except for any claims arising out of DAVA’s storage, handling, marketing, promotion, or delivery of the Products, (ii) the execution by IMPAX of this Agreement, (iii)
Page 22 of 45
the performance or breach by IMPAX of its representations, warranties or obligations under this Agreement, (iv) the negligence or willful misconduct of IMPAX, its employees or its agents (collectively “IMPAX Activities”), or (v) a violation of the Intellectual Property rights of a Third Party arising out of the marketing and sale of the Products in the Territory, except, to the extent such Losses result from DAVA Activities. The foregoing notwithstanding, with respect to Section 9.2(v), DAVA Activities shall be limited to the design of the DAVA Label and Tablet Specifications and DAVA ’s Promotional Materials. 9.3 A Party seeking indemnification (“Indemnified Party”) shall notify, in writing, the other Party or Parties (“Indemnifying Party”) within thirty (30) days of the assertion of any claim or discovery of any fact upon which the Indemnified Party intends to base a claim for indemnification. An Indemnified Party’s failure to so notify the Indemnifying Party shall not, however, relieve such Indemnifying Party from any liability under this Agreement to the Indemnified Party with respect to such claim except to the extent that such Indemnifying Party is actually denied, during the period of delay in notice, the opportunity to remedy or otherwise mitigate the event or activity(ies) giving rise to the claim for indemnification and thereby suffers or otherwise incurs additional liquidated or other readily quantifiable damages as a result of such failure. The Indemnifying Party, while reserving the right to contest its obligations to indemnify hereunder, shall be responsible for the defense of any claim, demand, lawsuit or other proceeding in which the allegations, if proved, would trigger the Indemnifying Party’s obligations under Section 9.1 or 9.2. The Indemnified Party shall have the right at its own expense to participate with the Indemnifying Party in the defense of any such claim, demand, lawsuit or other proceeding. The Indemnifying Party shall have the right to settle, try or otherwise dispose of or handle such claim, demand, lawsuit or other proceeding on such terms as the Indemnifying Party shall deem appropriate subject to the consent of the Indemnified Party, which consent shall not be unreasonably withheld; provided that the Indemnified Party shall have no obligation to consent to any settlement of any such claim which imposes on the Indemnified Party any liability or obligation which will not be assumed and performed in full by the Indemnifying Party. 9.4 During the term of this Agreement and for a period of not less than twenty four (24) months following the termination of this Agreement, each of DAVA and IMPAX shall (and shall cause their respective Affiliates who are involved in the manufacture or distribution of the Products to) carry or be subject to coverage under (as an additional insured under its own policy or policies or a policy or policies of its parent corporation), at its own cost and expense, comprehensive general liability insurance and product liability and contractual liability insurance with respect to suits brought in the Territory, or maintain self insurance coverage (directly or through an Affiliate), in an amount of not less than twenty million dollars (US$20,000,000) in the aggregate and ten million dollars (US$10,000,000) per occurrence, which insurance, if not in the form of self
Page 23 of 45
insurance coverage, will be written on a claims made policy form for product liability with an insurance carrier or carriers reasonably acceptable to the other Party (which will have a retroactive date no later than the Effective Date). Each of IMPAX and DAVA shall, at the request of the other, provide reasonable evidence to such requesting Party of compliance with its insurance obligations under this Section 9.4 and evidence of renewals of any such policy, from time to time. IMPAX shall cause DAVA to be named as an additional insured\vendor under the product liability insurance policy or policies to be obtained and maintained (or caused to be obtained and maintained) by IMPAX pursuant hereto for bodily injury and property damage caused by Products supplied by IMPAX to DAVA. DAVA shall cause IMPAX to be named as an additional insured for bodily injury and property damage caused by those acts or omissions for which DAVA is responsible hereunder under the product liability insurance policy or policies to be obtained and maintained (or caused to be obtained and maintained) by DAVA pursuant hereto.
X. CONFIDENTIAL INFORMATION 10.1 Each of the Parties hereto agrees that, without the prior written consent of the other, or except as may be required by law or court order, the existence and terms of this Agreement shall remain confidential and shall not be disclosed to any Person other than employees and professional advisers of such Party or its Affiliates who reasonably require knowledge of the existence or terms of this Agreement and who are bound to such Party or its Affiliates by a like obligation of confidentiality. Such employees and advisors will be advised of the nature and existence of the confidentiality undertakings of this Agreement and of the applicability of such undertakings to them. 10.2 The Parties acknowledge that they are party to a Bilateral Confidential Disclosure Agreement, dated October 14, 2005, (“CDA”) which is expressly superseded by the terms provided herein. The Parties further acknowledge that the obligations set forth in this Article X shall apply retroactively to the treatment of any and all Confidential Information disclosed pursuant to the CDA. Confidential information is any information relating to the business or business plans of a Party including, without limitation, know-how, formulas, trade secrets, clinical or non-clinical data, processes, specifications, costs and customers (“Confidential Information”). Confidential Information as to either Party shall not include any portion thereof which (i) is known to the receiving Party before receipt thereof under this Agreement or is independently developed by or for the receiving Party without benefit of the Confidential Information supplied hereunder, as evidenced by such Party’s written records; (ii) is disclosed to the receiving Party without restriction after acceptance of this Agreement by a Third Party having a legal right to make such disclosure; or (iii) is or becomes part of the public domain through no breach of this Agreement by the receiving Party. During the term of this Agreement and for five (5) years thereafter, no Party and no Affiliate of a Party shall release to any Third Party any Confidential
Page 24 of 45
Information of any other Party or any information with respect to the existence and terms of this Agreement without the prior written consent of such other Party. Notwithstanding anything to the contrary contained herein, a Party may release Confidential Information if (a) required by statute, ordinance, regulation or by court order, (b) necessary in the opinion of the disclosing Party’s counsel, to comply with any reporting or disclosure requirements of the Securities and Exchange Commission, the New York Stock Exchange, NASDAQ or any governmental agency or other regulatory body, (c) required pursuant to compulsory legal process or (d) to those employees and professional advisors of a Party who reasonably require knowledge of Confidential Information, provided, however, that such employees and advisors are bound to such Party or its Affiliates by a like obligation of confidentiality and have been advised of the nature and existence of the confidentiality undertakings of this Agreement and of the applicability of such undertakings to them. If a Party is disclosing information relating to this Agreement, or any of the terms hereof, to comply with statutory or regulatory reporting or disclosure or legal process requirements, such Party intending to make such disclosure shall give each other Party at least one (1) days’ prior notice in writing of the content of the intended disclosure and shall, in good faith, give reasonable consideration to any comments proposed by such other Party. Once a particular disclosure has been approved, notice of additional disclosure of the same information shall not be required. If such statutory or regulatory reporting or legal process disclosure requirements would require earlier disclosure, the notice shall be provided as early as practicable. 10.2 The Parties agree that equitable relief, including injunctive relief and specific performance, is appropriate in enforcing the confidentiality provisions of this Agreement. In the event of any such action to construe this provision, the prevailing Party will be entitled to recover, in addition to any charges fixed by the court, its costs and expenses of suit, including reasonable attorney’s fees. Such remedies shall not be deemed to be the exclusive remedies for a breach of this provision, but shall be in addition to all other remedies available at law or equity. The foregoing notwithstanding, in no event shall DAVA’s promotional communications with customers during a Pre -Marketing Period be considered a violation of the provisions of Section 10.2 or Section 10.4. 10.3 Press Releases. As soon as practicable following the Effective Date, the Parties agree to exert their best efforts to agree upon a public release announcing the Agreement. During the term of this Agreement and for five (5) years thereafter, no Party and no Affiliate of a Party shall make any public announcement or press release or public disclosures or release to any Third Party any information with respect to the existence and terms of this Agreement without the prior written consent of each other Party, unless required by Law or previously disclosed.
XI. REPRESENTATIONS, WARRANTIES AND COVENANTS
Page 25 of 45
11.1 IMPAX hereby represents, warrants and covenants to DAVA as follows: (a) IMPAX is a corporation duly organized and validly existing under the laws of the State of Delaware.
(b) IMPAX has all the requisite corporate power and authority to execute and deliver this Agreement and the Quality Agreement and to perform all of its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Quality Agreement and the performance by the Parties of their respective obligations hereunder and thereunder have been authorized by all requisite corporate action on their respective parts. This Agreement has been validly executed and delivered by each Party, and, assuming that such document has been duly authorized, executed and delivered by such Party, constitute a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.
(c) Any Product provided by IMPAX to DAVA, at the time of shipment shall (i) have been manufactured, packaged, stored and shipped by IMPAX in conformity with cGMPs, Specifications and shall not be adulterated or misbranded, (ii) conform to the standards set forth in the ANDA filing commitment and the manufacturing process described in the ANDA and related product approval and (iii) shall not be an article which may not, under the provisions of Section 505 of the FFDCA, be introduced into interstate commerce.
(d) The execution of this Agreement and performance of IMPAX’s obligations hereunder are not, and will not be, in violation of or in conflict with any obligation it may have to any Third Party, and
(e) IMPAX will use commercially reasonable efforts to maintain throughout the term of this Agreement all permits, licenses, registrations and other forms of governmental authorization and approval required in order for IMPAX to perform its obligations hereunder in accordance with all applicable Laws.
(f) IMPAX will use commercially reasonable efforts to secure DEA quota of the active ingredient of the Product in an amount sufficient to fulfill DAVA ’s demand as provided for in DAVA ’s Forecasts.
(g) IMPAX owns and possesses all right, title and interest in, to and under the ANDAs. The ANDA for the 80mg dosage strength of the Product has been approved by the FDA, and the ANDA for the 10mg, 20mg, and 40mg dosage strengths of the Product has been tenatively approved by the FDA, and neither IMPAX nor any of its Affiliates has received any notice in writing which has, or reasonably should have, led IMPAX to believe that the ANDA for the 80mg dosage is not currently effective or not
Page 26 of 45
currently in material compliance with all material Laws. (h) To IMPAX’s knowledge upon due investigation, the manufacture, use, importation or sale of the Products in the Territory pursuant to this Agreement do not infringe, misappropriate or otherwise conflict with any intellectual property rights of any Third Party.
(i) To IMPAX’s knowledge upon due investigation, the inventory of the 80mg dosage strength of the Product held by Third Parties as of the Effective Date does not, on average, exceed three (3) months average usage of the Products by each such Third Party and such inventory amount is consistent with the average inventory over the four (4) months preceding the execution of this Agreement.
(j) Between the Effective Date and the Launch Date, IMPAX shall sell and distribute the 80mg dosage strength of the Product only in the ordinary course of business.
(k) IMPAX has successfully completed validation testing of three (3) batches of each of the 10 mg, 20 mg, and 40 mg dosage strengths of the Product, but the validation reports for the 20 mg and 40 mg dosage strengths have not been finalized. 11.2 IMPAX MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
11.3 DAVA hereby represents, warrants and covenants to IMPAX as follows: (a) DAVA is a corporation duly organized and in good standing under the laws of the State of Delaware.
(b) DAVA has all the requisite corporate power and authority to execute and deliver this Agreement and the Quality Agreement and to perform all of its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Quality Agreement and the performance by the Parties of their respective obligations hereunder and thereunder have been authorized by all requisite corporate action on their respective parts. This Agreement has been validly executed and delivered by each Party, and, assuming that such document has been duly authorized, executed and delivered by such Party, constitute a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms.
(c) The execution and performance of DAVA’s obligations hereunder, are not and will not be in violation of or in conflict with any obligations it may have to any Third Party.
Page 27 of 45
(d) DAVA will use commercially reasonable efforts to maintain throughout the term of this Agreement all permits, licenses, registrations and other forms of governmental authorization and approval required in order for DAVA to execute and deliver this Agreement and to perform its obligations hereunder in accordance with all applicable Laws.
(e) All Products made available or supplied to DAVA by or on behalf of IMPAX will be received, handled, stored and delivered in accordance with the Specifications applicable thereto and applicable cGMP and other FDA requirements (and the requirements of all other applicable governmental or regulatory bodies and agencies in the Territory) so that such Products do not become adulterated or otherwise cease to meet their Specifications as a result of any acts or omissions of DAVA, its Affiliates, and their respective agents, employees, carriers, transporters or those for whom DAVA or any of its Affiliates are responsible.
(f) The DAVA Label and Tablet Specifications do not infringe any Third Party trademarks, service marks, trade names, logos, designations, or trade dress, and
(g) The DAVA Label and Tablet Specifications do not violate the FFDCA.
(h) DAVA will not use the IMPAX name or any IMPAX trademark, service mark, trade name, logo, designation, or trade dress without IMPAX ’ss prior written consent. 11.4 DAVA and IMPAX, in performing their respective obligations hereunder, shall comply in all material respects with all applicable Laws (including FDA and DEA). In the event IMPAX receives notice of an inspection or other notification by a governmental entity, including FDA, directly relating to the Product, DAVA Promotional Materials or other matters within the scope of this Agreement, IMPAX shall notify DAVA as soon as practicable, and provide to DAVA, within ten (10) days, copies of all relevant documents, including FDA Forms 482, 483 warning letters and other correspondence and notifications, as DAVA may reasonably request. DAVA and IMPAX agree to cooperate with each other during any inspection, investigation or other inquiry by FDA or any other governmental entity, including providing information and/or documentation, as requested by FDA or other governmental entity.
XII. LIMITATION OF LIABILITY EXCEPT AS EXPRESSLY PROVIDED IN SECTION 4.1(d), IN NO EVENT SHALL IMPAX OR DAVA BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, INCIDENTAL OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER (INCLUDING WITHOUT LIMITATION, LOST REVENUE, LOST PROFITS OR
Page 28 of 45
LOST BUSINESS) ARISING OUT OF THIS AGREEMENT, WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHERWISE.
XIII. NOTICES Any notices or reports required or permitted under this Agreement shall be deemed to have been given for all purposes if mailed by first class certified or registered mail, by overnight delivery service with mailed confirmation of receipt or transmitted electronically by facsimile with mailed confirmation copy to the following address of such Party:
For DAVA: DAVA Pharmaceuticals, Inc. Lewis Tepper, Esq. Parker Plaza Vice President Global Business 400 Kelby Street, 10 th Floor Development & General Counsel Fort Lee, NJ 07024 Attn: Lewis Tepper Facsimile No.: (201) 947 -7536
For IMPAX: IMPAX Laboratories, Inc. David S. Doll, 121 New Britain Boulevard Senior Vice President Chalfont, PA 18914 Attn: David S. Doll Facsimile No.: (215) 933 -0333 or to such other addresses as shall have been subsequently furnished by written notice to the other Parties.
XIV. GOVERNING LAW The validity and interpretation of this Agreement and the legal relations of the Parties to it shall be governed by the internal laws, and not the law of conflicts, of the State of Delaware. The parties acknowledge and agree not to contest that the courts of the State of Delaware have personal jurisdiction over them with respect to any action that may be taken hereunder, and venue shall lie in such courts as to any such action.
XV. FORCE MAJEURE No Party shall be liable to another for its delay or failure to perform any of its obligations hereunder (except for payments due hereunder) caused by contingencies beyond its control, including acts of God, fire, flood, wars, acts of terrorism, sabotage, strike and government actions (“Force Majeure”). Any Party asserting its inability to perform any obligation hereunder for any such contingency shall promptly notify the other Party of the existence of any such contingency and shall use its commercially reasonable efforts to re-commence its performance of such obligation a soon as commercially practicable.
Page 29 of 45
XVI. NO ORAL MODIFICATIONS No change, modification, amendment or waiver of any obligation, term or provision contained herein shall be valid or enforceable unless same is reduced to writing and signed by a duly authorized representative of each of the Parties to be bound hereby.
XVII. INDEPENDENT CONTRACTORS This Agreement does not constitute or create (and the parties do not intend to create hereby) a joint venture, pooling arrangement, partnership, employee — employer relationship, or formal business organization of any kind between the Parties. Each Party is an independent contractor engaged in the operation of its own respective business, in connection with the relationship created hereby. Neither Party shall be considered to be an agent of the other for any purpose whatsoever. Neither Party has the power or authority to act for, represent, or bind the other (or its Affiliates) in any manner.
XVIII. NO IMPLIED RIGHTS Nothing in this Agreement shall be deemed or implied to be the grant by one Party to the other of any right, title or interest in the Product (s), Intellectual Property (including improvements) or any other proprietary right of any other Party except as is expressly provided for herein.
XIX. SEVERABILITY To the extent any provision or term set forth herein is or becomes unenforceable by operation of Law, such unenforceability shall not affect the remaining provisions of this Agreement. The Parties agree to renegotiate in good faith any provision or term held to be unenforceable and to be bound by the mutually agreed substitute provision.
XX. CAPTIONS AND HEADINGS Article and section headings are provided for convenience only and are not to be used in construing the intent of the Parties.
XXI. SURVIVORSHIP Any provisions contained herein which by their nature or effect are required or intended to be observed after termination of this Agreement will survive the termination and remain binding.
XXII. ENTIRE AGREEMENT This Agreement, including the Exhibits attached hereto, contains the entire agreement between the Parties relating to the matters described herein and supersedes all prior drafts or understandings.
Page 30 of 45
XXIII. WAIVER The waiver by any Party to this Agreement of a breach of any provision set forth herein or of any right contained herein shall not operate as or be construed as a continuing waiver or a waiver of any subsequent breach or right granted herein.
XXIV. SINGULAR AND PLURAL The singular form of any noun or pronoun shall include the plural when the context in which such a word is used is such that it is apparent the singular is intended to include the plural or vice versa.
XXV. COUNTERPARTS This Agreement may be executed in counterparts each of which is to be considered an original and taken together as one and the same document.
XXVI. ASSIGNMENT 26.1 Neither this Agreement nor rights of a Party hereunder may be assigned nor may the performance of any duties hereunder be delegated by DAVA or by IMPAX without the prior written consent of the other Party.
26.2 Notwithstanding the limitation of Section 26.1 hereof, IMPAX and/or DAVA may delegate and assign from time to time some or all of their respective duties and rights hereunder to (i) any of their respective Affiliates (but only for so long as such Person remains an Affiliate of such Party) or (ii) to any Third Party that acquires more than fifty percent (50%) of the voting securities of that Party whether by stock purchase or by merger, provided in either case, that prior to any such delegation or assignment, the delegating or assigning Party must provide written notice thereof to the other Party hereto (indicating the duties being so delegated or assigned and the duration of such delegation or assignment).
26.3 No assignment or delegation permitted under this Agreement shall relieve the assigning Party of any of its obligations hereunder and any such delegation or assignment must be in compliance with all of the requirements of the FDA and any other requirements of applicable governmental or regulatory agencies in the Territory.
26.4 Subject to the foregoing this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.
Page 31 of 45
XXVII. DOCUMENT PREPARATION The Parties acknowledge that this Agreement is a product of negotiations and that no inference should be drawn regarding the drafting or preparation of this document.
XXVIII. DEBARMENT AND EXCLUSION 28.1 DAVA represents and warrants that neither it, nor any of its employees or agents working on IMPAX’s behalf, has ever been, is currently, or is the subject of a proceeding that could lead to that party becoming, as applicable, a Debarred Entity or Individual, an Excluded Entity or Individual or a Convicted Entity or Individual. DAVA further covenants, represents and warrants that if, during the term of this Agreement, it, or any of its employees or agents working on IMPAX’s behalf, becomes or is the subject of a proceeding that could lead to that party becoming, as applicable, a Debarred Entity or Individual, an Excluded Entity or Individual or a Convicted Entity or Individual, DAVA shall immediately notify IMPAX, and IMPAX shall have the right to immediately terminate this Agreement upon written notice. This provision shall survive termination or expiration of this Agreement. For purposes of this provision, the definitions provided in subsections (c) through (f) shall apply.
28.2 IMPAX represents and warrants that neither it, nor any of its employees or agents working on DAVA’s behalf, has ever been, is currently, or is the subject of a proceeding that could lead to that party becoming, as applicable, a Debarred Entity or Individual, an Excluded Entity or Individual or a Convicted Entity or Individual. IMPAX further covenants, represents and warrants that if, during the term of this Agreement, it, or any of its employees or agents working on DAVA’s behalf, becomes or is the subject of a proceeding that could lead to that party becoming, as applicable, a Debarred Entity or Individual, an Excluded Entity or Individual or a Convicted Entity or Individual, IMPAX shall immediately notify DAVA, and DAVA shall have the right to immediately terminate this Agreement upon written notice. This provision shall survive termination or expiration of this Agreement. For purposes of this provision, the definitions provided in subsections (c) thorugh (f) shall apply.
28.3 A “Debarred Individual” is an individual who has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from providing services in any capacity to a person that has an approved or pending drug product application.
28.4 A “Debarred Entity” is a corporation, partnership or association that has been debarred by the FDA pursuant to 21 U.S.C. §335a (a) or (b) from submitting or assisting in the submission of any abbreviated drug application, or a subsidiary or affiliate of a Debarred Entity.
28.5 An “Excluded Individual” or “Excluded Entity” is (i) an individual or entity, as applicable, who has been excluded, debarred, suspended or is otherwise ineligible
Page 32 of 45
to participate in federal health care programs such as Medicare or Medicaid by the Office of the Inspector General (OIG/HHS) of the U.S. Department of Health and Human Services, or (ii) is an individual or entity, as applicable, who has been excluded, debarred, suspended or is otherwise ineligible to participate in federal procurement and non-procurement programs, including those produced by the U.S. General Services Administration (GSA). 28.6 A “Convicted Individual” or “Convicted Entity” is an individual or entity, as applicable, who has been convicted of a criminal offense that falls within the ambit of 42 U.S.C. §1320a — 7(a), but has not yet been excluded, debarred, suspended or otherwise declared ineligible.
XXIX. EXPENSES Each of IMPAX and DAVA will bear its own direct and indirect expenses incurred in connection with the negotiation and preparation of this Agreement and the Quality Agreement and, except as set forth in this Agreement or the Quality Agreement, the performance of the obligations contemplated hereby and thereby.
XXX. NO THIRD PARTY BENEFICIARIES This Agreement will be binding upon and inure solely to the benefit of the Parties hereto, their successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or will confer upon any other Person or Persons any right, benefits or remedies of any nature whatsoever under or by reason of this Agreement.
XXXI. ARBITRATION OF CERTAIN DISPUTES 31.1 Delay Payment/Discount/Revised Terms. If the Parties are unable to agree upon the amount of the Delay Payment as provided in Section 4.1(d), any Discount, as provided for in Section 5.3(d), or Revised Terms, as provided in Section 8.4(b), within five (5) days after the time period set forth in Sections 4.1(d), 5.3(d) and 8.4(d), as applicable, the Parties shall promptly submit their dispute for expedited determination to a panel comprised of three (3) arbitrators having expertise in the pharmaceutical industry. Each Party shall select one arbitrator and the arbitrators shall then select a third arbitrator. The Parties shall use commercially reasonable efforts to expedite resolution of the arbitration. The arbitration shall be conducted in New York, New York within thirty (30) days after submission of the dispute to arbitration. Each Party shall submit to the arbitrators its proposed Delay Payment, Discount or Revised Terms, as the case may be, and the Parties shall exchange their proposals, provided that the proposals, once exchanged, may only be changed thereafter in a manner that moves a Party’s proposal closer to the other Party’s proposal. At the time of the exchange, each Party shall provide the other Party with any data and information not previously provided to the other Party relevant to the issue of resolving the dispute. There shall be no additional changes in each Party ’s proposal after the
Page 33 of 45
tenth (10th) day following the date set by the arbitrators for completion of any information exchange. The arbitrators shall make their own joint evaluation of any Delay Payment, Discount or Revised Terms, as the case may be, and shall determine the Discount or Revised Terms, as the case may be, as between the two proposals the one that is closest to the amount they determine. The authority of the arbitrators shall be limited solely to a choice between the two proposed Delay Payment, Discounts or Revised Terms, as the case may be, that are submitted to them. The decision of the arbitrators shall be final and not appealable, except in the case of fraud or bad faith. The arbitrators shall determine the proportion in which the Parties shall pay the costs and arbitrator fees of the arbitration and each Party shall pay its own costs and expenses in connection with such arbitration.
Promptly following the determination of the arbitrators, the Discount so determined shall be applied retroactively to the Calendar Quarter or calendar year in question and any payment due from one party to the other party as a result of such retroactive application shall be paid within ten (10) days following the determination of the arbitrators.
[The remainder of this page is intentionally left blank.]
Page 34 of 45
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate by their duly authorized representatives in the places provided below:
DAVA PHARMACEUTICALS, INC. IMPAX LABORATORIES, INC.
By: /s/ John H. Klein By: /s/ David S. Doll
Name: John H. Klein Name: David S. Doll Title: Chief Executive Officer Title: Senior VP, Sales and Marketing
Page 35 of 45
EXHIBIT A 2005 & 2006 ACQUISITION PRICE
Fully-Burdened Standard Cost of NDC Description Batch Size Shelf Life Manufacturing Acquisition Price 0115 -1611 -01 10 mg 100 ct XXXXX tablets 24 months $ XXXXX $ XXXXX 0115 -1622 -01 20 mg 100 ct XXXXX tablets 24 months $ XXXXX $ XXXXX 0115 -1633 -01 40 mg 100 ct XXXXX tablets 24 months $ XXXXX $ XXXXX 0115 -1644 -01 80 mg 100 ct XXXXX tablets 24 months $ XXXXX $ XXXXX • Manufacturing Full Lot Quantities (Actual Yields will vary).
• The Acquisition Price of each Product is equal to the fully -burdened cost of manufacturing, plus XXXXX %.
Page 36 of 45
EXHIBIT B DAVA LABEL AND TABLET SPECIFICATIONS Initially, the DAVA Tablet specifications shall be identical to the current tablet identification. The Parties shall exert Commercially Reasonable Efforts to modify such specifications to DAVA’s Corporate Tablet specifications within six (6) months of the Launch Date.
Page 37 of 45
EXHIBIT C SPECIFICATIONS (See Attachment)
Page 38 of 45
EXHIBIT D INITIAL FORECAST (See Attachment)
Page 39 of 45
EXHIBIT E INITIAL FIRM ORDER (See Attachment)
Page 40 of 45
EXHIBIT F RISK MANAGEMENT PLAN Presented below is an overview of the Risk Management Plan needed to support ongoing marketing of Oxycodone HCI ER Tablets. We will need to adjust certain elements of the RMP to accommodate a scenario whereby a marketing partner takes over either partial or complete distribution of this product.
Online Training and Educational Materials We now have the following training/educational materials in place, which are currently accessible from the IMPAX/Globalphar website: • Physician Training
• Pharmacist Training
• Patient Information
• Distributor Manual
• (www.globaIphar.com) The links on the Globalphar website all lead to a server maintained by LearnSomething, the company that developed the training materials through collaboration with IMPAX and BuzzeoPDMA. Links could also be assigned on the DAVA website (www.davapharma.com). The accreditatiion body providing CME credits for the Physician Training required that no company affiliation appear on that particular training module. As such, IMPAX’s logo and sponsorsh!ip is not associated with the Physician Training. The other three modules all feature an IMPAX banner logo at the top of each webpage. This will likely have to be modified to feature, for example, IMPAX and DAVA or DAVA alone. Even if DAVA is the sole distributor of all product strengths we will still have some 80 mg product in commercial channels that bear the Global label. Thus, it may be necessary to feature both companies on the webpage banner until such time as no more Global branded product remains in distribution channels. The content of the training materials is now complete. Any additional changes to the webpage presentation should involve just the revision of logo and other branding elements, so this should be relatively easy to update. We will have to coordinate any such changes through LearnSomething and BuzzeoPDMA.
Call Center Support We currently use MedComm Solutions (Emeryville, CA) to provide Call Center support for questions from healthcare providers, patients, and caregivers. Our labeling and marketing materials cite the IMPAX toll-free number in Philadelphia (800-934-6729). Callers are then given the option to enter “5” and be connected to IMPAX’s oxycodone information hotline.
Page 41 of 45
Entering the number 5 redirects callers to MedComm Solutions in Emeryville. MedComm identifies incoming calls using the caller ID and answers the call on behalf of IMPAX. If DAVA is the sole distributor of IMPAX’s oxycodone product line they will need to incorporate a separate toll-free number on their labeling and marketing materials. MedComm Solutions maintains a bank of unused toll-free numbers and can easily assign one for use by DAVA. The caller ID should then allow MedComm Solutions to distinguish calls coming from IMPAX or from DAVA.
Adverse Event Support We currently use Drug Safety Alliance (Durham, NC) to provide post-marketing adverse event support. DSA collects all spontaneous AE’s, enters them into their validated database, conducts a medical evaluation for severity and expectedness, and then prepares the appropriate MedWatch form, which IMPAX RA submits to FDA. Reports from DSA are either expedited reports, requiring submission to FDA within 15 days, or quarterly reports. After oxycodone has been marketing for 3 years we will only be required to submit adverse event reports, other than 15-day reports, annually. We will need to coordinate with DAVA and DSA in order that DAVA immediately forward any spontaneous AE’s they receive on to DSA. It would make no sense for DAVA to forward any AE’s to IMPAX as we in turn would just forward them on to DSA. IMPAX will continue to submit all required AE reports since we remain the holder of the ANDA.
Adverse Event,Trendinq Reports A significant piece of the ongoing RMP resides in the biannual trending reports prepared by GALT Associates (Blue Bell, PA). GALT initially prepared a baseline trending report that evaluated trends for 3 drug definitions over the most recently available 3-year baseline time interval. The 3 drug definitions were: a) all narcotic products, b) single entity hydromorphone, and c) single entity oxycodone. The baseline report was submitted to FDA in our Year 1 I Quarter 2 periodic Adverse Event report. Under the terms of the RMP we need to submit biannual trending reports that cover subsequent 6-month time intervals. Our plan is to submit these with every other periodic quarterly adverse event report. If subsequent trending reports reveal increased incidences of abuse, misuse, diversion, etc., we are then expected to implement measures aimed at curbing such abuse, misuse, and diversion. Obviously, it is still too early in the marketing history of this product for such trending reports to reveal any pattern of abuse or misuse associated with the IMPAX product. The first 6-month report is due to FDA about the end of October.
Page 42 of 45
EXHIBIT G APPOINTMENT FEE DAVA shall pay sixty million dollars ($60,000,000)(“Appointment Fee”) to IMPAX as follows: (i) One million dollars ($1,000,000) on the Effective Date;
(ii) Nine million dollars ($9,000,000) upon delivery of Product ordered by the Initial Firm Order, to be paid pro -rata based upon delivery in accordance with the Initial Delivery Schedule, in each case, within fifteen (15) Business Days of such delivery;
(iii) Ten million dollars ($10,000,000) on December 31, 2006;
(iv) Ten million dollars ($10,000,000) on December 31, 2007;
(v) Ten million dollars ($10,000,000) on December 31, 2008;
(vi) Ten million dollars ($10,000,000) on December 31, 2009; and
(vii) Ten million dollars ($10,000,000) on December 31, 2010; provided, however, that in the event that DAVA shall have instituted or have instituted against it any insolvency, receivership, bankruptcy or other proceeding for the settlement of its debts, any portion of the Appointment Fee then remaining unpaid shall, in the event such proceeding shall have been instituted by DAVA, thereupon become immediately due and payable and, in the event such proceeding shall have been instituted by a Third Party, become due and payable on the 61 st day that such proceeding remains pending.. If the last Business Day of the year is other than December 31, any of the above payments shall be made on the last Business Day. The foregoing amounts shall be payable even in the event that the appointment shall have been converted to a non-exclusive arrangement pursuant to the provisions of Section 2.6.
Page 43 of 45 EXHIBIT 10.16.1 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
AMENDMENT NO. 2 to Supply and Distribution Agreement Between IMPAX Laboratories, Inc. and DAVA Pharmaceuticals, Inc. Dated as of November 3, 2005 This agreement (“Amendment No. 2”) amends that certain Supply and Distribution Agreement (“Agreement”) between DAVA Pharmaceuticals, Inc., a Delaware corporation (hereinafter referred to as “ DAVA ”), and IMPAX Laboratories, Inc., a Delaware corporation (hereinafter referred to as “ IMPAX ”), as amended by letter dated November 3, 2005 (“Amendment No. 1”). Capitalized terms not otherwise defined herein shall have the meaning given to them in the Agreement. WHEREAS, DAVA and IMPAX entered into the Agreement, pursuant to which IMPAX appointed DAVA as its exclusive distributor of the Products in the Territory and agreed to supply the Products to DAVA in accordance with the terms of the Agreement; WHEREAS, the Parties simultaneously entered into Amendment No. 1, pursuant to which DAVA agreed to provide a standby letter of credit to secure payment of the Appointment Fee to IMPAX under the Agreement; WHEREAS, the Parties now wish to further amend the Agreement as set forth herein; NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. Section 1 of the Agreement is amended by adding the following definitions: “Amendment Effective Date” shall mean November 29, 2006. “Bottle Delivery Target” means XXXXX bottles (100 Ct) of Product. “Gross Profit Split Reversal Date” means the date upon which the aggregate number of bottles (100 ct) of Product delivered by IMPAX to DAVA for the period commencing on the Amendment Effective Date equals the Bottle Delivery Target. In addition, the definition of “Net Sales” is amended and restated in its entirety as follows:
“Net Sales” means the actual gross amount invoiced by DAVA for sales of Products in the Territory to unaffiliated third parties (as distinct from gross revenue recorded by DAVA in accordance with GAAP) less the sum of actual (or accrued in accordance with GAAP) (i) trade discounts, promotional allowances, cash discounts, customer refunds and credits, returns, customer and government rebates, chargebacks, retroactive price or shelf stock adjustments and other price equalizations, and other similar allowances taken against the gross selling price that effectively reduce the amount paid by the customer from the invoiced amount, and (ii) the Shipping Expense incurred by DAVA with respect to such Products. 2. Section 2.6 of the Agreement is deleted in its entirety. 3. The following is added to Section 4.1(d) of the Agreement at the end thereof: With respect to all Product shipped following the Gross Profit Split Reversal Date, the foregoing Delay Payment obligations shall be inapplicable and IMPAX shall not be subject to payment of Delay Payments pursuant to this Section 4.1(d). At any time following the Gross Profit Split Reversal Date, IMPAX, in its sole discretion, may suspend the shipment of Products under this Agreement (a “Voluntary Suspension”) in exchange for a one-time payment to DAVA of an amount equal to DAVA’s share of Gross Profits with respect to the immediately prior Reporting Period (“Voluntary Suspension Payment”). During such a Voluntary Suspension, DAVA shall have the right to purchase Competing Equivalent Products from an alternative supplier and IMPAX shall have no rights or obligations with respect to any products so purchased. No Voluntary Suspension Payment shall be payable by IMPAX in connection with a Litigation Suspension. Should IMPAX determine to lift a Voluntary Suspension and resume shipment of Products, DAVA shall have the option of (i) continuing to purchase Competing Equivalent Products from an alternative supplier, in which event DAVA’s appointment as distributor of the Products shall no longer be exclusive and IMPAX’ obligations under Section 2.4 shall terminate, or (ii) ceasing to purchase Competing Equivalent Products and purchasing all of its requirements for Products for sale in the Territory from IMPAX in accordance with Section 2.3 and distributing them in accordance with the terms of this Agreement. 4. A new Section 4.10 is added to the Agreement, reading in its entirety as follows: DAVA agrees to use its best efforts to reasonably anticipate demand so as not to forecast its requirements in any month for the Products in excess of amounts that can reasonably be sold within a forty-five (45) day period following delivery and which will provide DAVA with an inventory stock level of approximately three months of its supply needs. IMPAX’s obligation to manufacture Products hereunder will be subject to reasonable capacity and API quota limitations. 5. Section 5.2(a) of the Agreement is amended and restated in its entirety to read as follows:
2
Acquisition Price. DAVA shall remit payment for shipments of Products sent by IMPAX to DAVA by wire transfer or check in U.S. dollars within seventy-five (75) days following the date of IMPAX’ invoice (the “Acquisition Price Payment Date”). In the event that DAVA fails to remit such payment to IMPAX within five (5) Business Days following the Acquisition Price Payment Date, then DAVA shall make the payment by wire transfer within two (2) Business Days following DAVA’s receipt of a written request for such amount from IMPAX. Failure to remit such payment on the Acquisition Price Payment Date shall constitute a material breach by DAVA, following which IMPAX may terminate this Agreement unless DAVA cures such breach within twenty-five (25) days following written notice of such breach. The invoice, which shall not be dated or transmitted prior to the date IMPAX provides DAVA with an Availability Notice, shall reflect the Acquisition Price on date of shipment by IMPAX for each Product. 6. Section 5.2(b) of the Agreement is amended and restated in its entirety to read as follows: The Acquisition Price for each Product commencing on the Amendment Effective Date shall be one-hundred percent (100%) of the fully- burdened cost of manufacturing the Product on the Amendment Effective Date, as set forth on Exhibit A attached hereto. By January 1 of each year, IMPAX will provide DAVA with (i) the new Acquisition Price for the following twelve-month period, and (ii) documentation of the increase, if any, of IMPAX’ cost of the active ingredient of the Product over the past twelve-month period. The new Acquisition Price for any year shall be the then-current fully burdened cost of manufacturing the Product. The foregoing notwithstanding, the percentage increase in the Acquisition Price in any one year for all components of the Acquisition Price, other than the cost of the active ingredient of the Product, shall not exceed the annual percentage increase for the period ending on the immediately preceding December 31st in the Consumer Price Index, National for All Urban Consumers, All Items, as reported by the United States Bureau of Labor Statistics or any government successor thereof. 7. Section 5.3(b) of the Agreement is amended and restated in its entirety to read as follows: Gross Profit Split. IMPAX’ share of the Gross Profit (IMPAX’ “Gross Profit Split”) shall be calculated as follows: (i) for sales of Products delivered by IMPAX to DAVA from the Effective Date through the Gross Profit Split Reversal Date, DAVA shall pay IMPAX an amount equal to XXXXX percent ( XXXXX %) of the Gross Profit;
3
(ii) for sales of Products delivered by IMPAX to DAVA following the Gross Profit Split Reversal Date, DAVA shall pay IMPAX an amount equal to XXXXX percent ( XXXXX %) of the Gross Profit;
(iii) in the event IMPAX determines, in its sole discretion and in accordance with Section 8.2(e), following the later to occur of the Gross Profit Split Reversal Date and March 31, 2007, that it is in IMPAX’ interest to voluntarily suspend Product shipment in light of the risks related to pending litigation, the Parties will negotiate in good faith terms of a further amendment to this Agreement that, in lieu of such voluntary suspension, will provide IMPAX with a greater share of the Gross Profits from sales of the Products, including by terminating DAVA ’s right to distribute the Products in exchange for royalty payments. DAVA shall remit IMPAX’ Gross Profit Split by check or wire transfer (i) no later than thirty (30) days after the end of each Reporting Period with respect to Products shipped during the first two months of such Reporting Period, and (ii) no later than sixty five (65) days after the end of each Reporting Period with respect to Products shipped during the last month of such Reporting Period (each, a “Gross Profit Split Payment Date”). In the event that DAVA fails to remit the Gross Profit Split to IMPAX within five (5) Business Days following the Gross Profit Split Payment Date, then DAVA shall make such payment by wire transfer within two (2) Business Days following DAVA’s receipt of a written request for such amount from IMPAX. Failure to remit such payment on the Gross Profit Split Payment Date shall constitute a material breach by DAVA, following which IMPAX may terminate this Agreement unless DAVA cures such breach within twenty-five (25) days following written notice of such breach. In the event that Gross Profit is a negative amount for any Reporting Period, no payment or refund shall be due from DAVA to IMPAX or from IMPAX to DAVA, in respect thereof, provided, however, that the Gross Profit with respect to the subsequent Reporting Period shall be reduced by such negative amount for purposes of determining the Gross Profit Split for such subsequent Reporting Period. 8. Section 5.3(c) of the Agreement is deleted in its entirety. 9. Section 5.3(d) of the Agreement is deleted in its entirety. 10. Section 5.3(e)(i) of the Agreement is amended and restated in its entirety to read as follows: DAVA shall keep complete and accurate books and records setting forth Gross Profit, gross sales, Net Sales (including all deductions to determine Net Sales), Marketing Allowance, Label Conversion Fee, Shipping Expense, aggregate Acquisition Price, and any and all amounts due to IMPAX hereunder, which books and records shall be maintained in accordance with GAAP on an individual Product basis. DAVA shall permit IMPAX, at IMPAX’ expense, to engage an Accountant, reasonably acceptable to DAVA, to examine DAVA’s books and
4
records at any reasonable time, but not more than quarterly and not later than three (3) years following the rendering of the reports, accountings and payments that are the subject of the examination. With respect to DAVA’s calculation of Net Sales, IMPAX’ audit right shall include a right to (i) verify actual credits granted to customers, other actual reductions from gross sales, and sales pursuant to specific contracts, (ii) reconcile reported transactions to originating source documentation, and (iii) discuss such information with relevant DAVA management. IMPAX shall use reasonable efforts to cause the Accountant to execute a written agreement, reasonably satisfactory to DAVA, obligating such Accountant to maintain in confidence all information disclosed to such Accountant during the examination and all information generated by such Accountant pursuant to the examination. In the event such examination determines that DAVA has underpaid IMPAX for the period under review by more than five percent (5%), DAVA shall also reimburse IMPAX for the cost of such examination and pay to IMPAX interest on such underpayment at the rate of 12% per annum. The determination by the Accountant will be binding on the Parties. 11. Upon execution of this Amendment No. 2, DAVA shall, prior to March 31, 2007, provide IMPAX with a written report setting forth a recalculation, based upon the definition of Net Sales set forth in this Amendment No. 2, of Net Sales for Products sold by DAVA in the Territory during the period from April 1, 2006 through the Amendment Effective Date. Concurrently with DAVA’s first Gross Profit Split payment to IMPAX following the Gross Profit Split Reversal Date, DAVA shall remit to IMPAX, by check or wire transfer in immediately available funds, the amount (if any) by which IMPAX’ Gross Profit Split for such period as recalculated using the definition of Net Sales set forth in this Amendment No. 2 exceeds IMPAX’ Gross Profit Split as determined in accordance with the original definition of Net Sales under the Agreement. The foregoing notwithstanding, in the event the amount payable to IMPAX under this Paragraph 9 exceeds the amount of DAVA’s share of Gross Profits for Products delivered in excess of the Bottle Delivery Target for the Reporting Period during which IMPAX achieves the Bottle Delivery Target, then the excess of the amount due under this Paragraph 9 over DAVA’s share of Gross Profits in respect of bottles of Product delivered in excess of the Bottle Delivery Target for such period shall be payable concurrently with the Gross Profit Split payable to IMPAX for the immediately subsequent Reporting Period. IMPAX shall have the right to audit such recalculation and, thereafter, to conduct audits in accordance with Section 5.3(e). 12. The sixty (60)-day cure period for a material breach provided by Section 8.2(a) of the Agreement is subject to any other cure period specified elsewhere in the Agreement. 13. A new Section 8.5 is added to the Agreement, reading as follows: 8.5 Litigation Suspension. (a) IMPAX, in its sole discretion, may enter into a settlement of any litigation regarding the Product with Purdue Pharma, LP or any of its Affiliates (collectively, “Purdue ”), which settlement ( “Settlement ”) may include
5
IMPAX’ suspension or cessation of sales of Products, or IMPAX may voluntarily suspend Product shipment in light of the risks relating to pending litigation with respect to the Products. IMPAX will notify DAVA of the terms of any proposed Settlement. IMPAX shall use commercially reasonable efforts to include in any Settlement terms that will permit the sale of DAVA’s then existing Product inventory and shall not enter into any Settlement with Purdue that does not include a release by Purdue, in a form and on terms reasonably acceptable to DAVA, of any and all patent infringement claims by Purdue against DAVA with respect to the Products. Further, IMPAX shall use its commercially reasonable efforts to obtain a release of all non-patent infringement claims by Purdue against DAVA related to the Products.
(b) In the event of a Settlement or voluntary suspension in light of the risks relating to pending litigation with respect to the Products, IMPAX shall be entitled, subject to its rights and obligations under Section 5.3(b)(iii), to suspend its obligations with respect to the supply Products under the Agreement and cause DAVA to cease selling the Products in a manner consistent with the terms of the Settlement or with the voluntary suspension, as the case may be (in either case, a “Litigation Suspension”). IMPAX shall revoke the Litigation Suspension on the first date that the manufacture or sale, whichever is earlier, of the Product is allowable under the Settlement or, in light of the risks relating to pending litigation relating to the Products, is voluntarily resumed. Notwithstanding anything to the contrary herein, in the event of a Litigation Suspension, all outstanding Firm Orders shall be void, and DAVA and IMPAX shall share the cost of any remaining Product inventory and returned Product in proportion to each of their respective shares of Gross Profits effective at the time of such Litigation Suspension. 14. Section 31.1 is amended and restated in its entirety to read as follows: Delay Payment/Revised Terms. If the Parties are unable to agree upon the amount of the Delay Payment as provided in Section 4.1(d), or Revised Terms, as provided in Section 8.4(b), within five (5) days after the time period set forth in Sections 4.1(d) and 8.4(d), as applicable, the Parties shall promptly submit their dispute for expedited determination to a panel comprised of three (3) arbitrators having expertise in the pharmaceutical industry. Each Party shall select one arbitrator and the arbitrators shall then select a third arbitrator. The Parties shall use commercially reasonable efforts to expedite resolution of the arbitration. The arbitration shall be conducted in New York, New York within thirty (30) days after submission of the dispute to arbitration. Each Party shall submit to the arbitrators its proposed Delay Payment or Revised Terms, as the case may be, and the Parties shall exchange their proposals, provided that the proposals, once exchanged, may only be changed thereafter in a manner that moves a Party’s proposal closer to the other Party’s proposal. At the time of the exchange, each Party shall provide the other Party with any data and information not previously
6
provided to the other Party relevant to the issue of resolving the dispute. There shall be no additional changes in each Party’s proposal after the tenth (10th) day following the date set by the arbitrators for completion of any information exchange. The arbitrators shall make their own joint evaluation of any Delay Payment or Revised Terms, as the case may be, and shall determine the Delay Payment or Revised Terms, as the case may be, as between the two proposals the one that is closest to the amount they determine. The authority of the arbitrators shall be limited solely to a choice between the two proposed Delay Payment or Revised Terms, as the case may be, that are submitted to them. The decision of the arbitrators shall be final and not appealable, except in the case of fraud or bad faith. The arbitrators shall determine the proportion in which the Parties shall pay the costs and arbitrator fees of the arbitration and each Party shall pay its own costs and expenses in connection with such arbitration. 15. An amended and restated Exhibit G to the Agreement is attached hereto. The Parties acknowledge that (i) the Appointment Fee represents consideration for DAVA’s appointment as exclusive distributor of the Products for the period from the Effective Date through the Amendment Effective Date only, and that, in light of the change in the allocation of profits subsequent to the Gross Profit Split Reversal Date contemplated by the Amendment, no Appointment Fee is payable with respect to the period subsequent to the Amendment Effective Date and (ii) IMPAX’ share of profits subsequent to the Gross Profit Split Reversal Date, which was negotiated at arms’ length, constitutes fair and adequate consideration for the license granted hereunder for the period subsequent to the Gross Profit Split Reversal Date. 16. Amendment No. 1 is deleted in its entirety. 17. Each of DAVA and IMPAX waives and holds the other harmless for any and all claims, lawsuits or other actions resulting from or arising out of events or activities relating to the Agreement or the Products (other than obligations under Section 7.5 and Article IX of the Agreement) that occurred prior to the Amendment Effective Date, provided that in the event IMPAX fails to meet the Bottle Delivery Target, such waivers shall extend only to the percentage of the total amount of any such claim equal to the proportion of the Bottle Delivery Target delivered by IMPAX at the time of the claim. 18. DAVA and IMPAX will mutually agree upon a public statement to be released in connection with the execution of this Amendment No. 2. For clarity, this Section 20 shall not limit IMPAX ’ ability to make any and all statements and filings that may be required by applicable law. 19. Except as amended herein, all other terms and conditions of the Agreement remain in full force and effect. 20. The validity and interpretation of this Amendment and the legal relations of the Parties to it shall be governed by the internal laws, and not the law of conflicts, of the State of Delaware. The parties acknowledge and agree not to contest that the courts of the State of Delaware have personal jurisdiction over them with respect to any action that may be taken hereunder, and venue shall lie in such courts as to any such action.
7
21. This Amendment may be signed in two counterparts, each of which shall be deemed an original and both of which shall together constitute one agreement. 22. This Amendment is to take effect when both parties to it have signed the Agreement and shall not be applied retroactively.
[The remainder of this page is intentionally left blank.]
8
IN WITNESS WHEREOF , the parties hereto have executed this Amendment to the Supply and Distribution Agreement on this 6 th day of February, 2007.
DAVA PHARMACEUTICALS, INC. IMPAX LABORATORIES, INC.
By: /s/ Aram Moezinia By: /s/ David S. Doll
Printed Name: Aram Moezinia Printed Name: David S. Doll Title: Executive Vice President Title: Executive Vice President, Commercial Operations
9
EXHIBIT G APPOINTMENT FEE DAVA shall pay ten million dollars ($10,000,000) (“Appointment Fee”) to IMPAX as follows: (i) One million dollars ($1,000,000) on the Effective Date; and
(ii) Nine million dollars ($9,000,000) upon delivery of Product ordered by the Initial Firm Order, to be paid pro -rata based upon delivery in accordance with the Initial Delivery Schedule, in each case, within fifteen (15) Business Days of such delivery.
10 EXHIBIT 10.17 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
PATENT LICENSE AGREEMENT This Patent License Agreement, dated as of March 30, 2007 (the “Patent License Agreement”), is by and among Purdue Pharma L.P., a Delaware limited partnership, The P.F. Laboratories, Inc., a New Jersey corporation, Purdue Pharmaceuticals L.P., a Delaware limited partnership (the foregoing are individually and collectively referred to as the “Purdue Companies”), and IMPAX Laboratories, Inc., a Delaware corporation (“IMPAX”). The Purdue Companies and IMPAX are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.
WITNESSETH: WHEREAS, the Purdue Companies are the owners of United States patent numbers 5,549,912, 5,508,042 and 5,656,295 (the “Purdue Patents”), relating to and protecting controlled-release oxycodone products, including the product OxyContin ® , a controlled-release oxycodone product; and WHEREAS, certain of the Purdue Companies and IMPAX (i) are involved in litigation, Civil Actions Nos. 02 CV 2803, 02 CV 7569, 02 CV 8036 (SHS) (SDNY), and (ii) were involved in Civil Action NO. 02-1481 (JJF) (D.Del.), which action was dismissed without prejudice (the actions referred to the clauses (i) and (ii) above are collectively referred to herein
as, the “Actions”), concerning, inter alia, the validity and enforceability of the Purdue Patents, as well as the infringement by IMPAX of the Purdue Patents resulting from IMPAX’s requesting approval from the United States Food and Drug Administration (the “FDA”) of generic versions of OxyContin ® products through their submission of ANDA No. 76-318 and ANDA No. 76-446, along with all amendments and supplements thereto (collectively referred to herein as the “IMPAX ANDA”), and IMPAX’s subsequent manufacture, use, sale, offer to sell or importation of oxycodone pursuant to the IMPAX ANDA; and WHEREAS, the Purdue Companies and IMPAX have entered into a settlement agreement, dated as of the date hereof (the “Settlement Agreement”), to resolve the Actions and as a result of and pursuant to the Settlement Agreement, the Purdue Companies desire to grant to IMPAX certain limited license rights under the Purdue Patents to manufacture, use, offer to sell, sell and have sold generic versions of OxyContin ® products described in IMPAX ANDA in the United States. NOW THEREFORE, the Parties agree as follows: 1. License Grant; Option . (a) Grant of License . The Purdue Companies hereby grant to IMPAX a non-exclusive, royalty-free, non-transferable (except as provided in Sections 1(d) and 12 below) license of limited duration under the Purdue Patents to make, have made, use, offer to Sell (as defined below), Sell and have Sold not more than that number of bottles each containing 100 tablets (“Bottles”) equal to the difference between (i) XXXXX minus (ii) the number of Bottles Sold by IMPAX, DAVA Pharmaceuticals, Inc. (“DAVA”) or any party acting on their behalf from March 1, 2007 until and including the day which immediately precedes the date the License period described below commences (the “License Amount”), allocated among dosage strengths
2
as set forth in Section 1(b) below, of the generic versions of OxyContin ® products specifically described in, and sold under, the IMPAX ANDA as approved as of the Signing Date (the “IMPAX Product”) in the United States (the “License”), during the period commencing at 12:01 a.m., New York City time, on the Signing Date and terminating upon the earlier of (the “License Termination Date”): (i) 11:59 p.m., New York City time on June 14, 2007; and (ii) the date upon which this Patent License Agreement is terminated in accordance with Section 10 hereof. For purposes of Sections 1(a), 1(b) and 1(d) hereof, the terms “Sell, “Selling”, or “Sold” mean selling and shipping by IMPAX, DAVA, or any party acting on their respective behalves to a third party bona fide purchaser for commercial sale. For the avoidance of any doubt, sales and shipments of Bottles by IMPAX to DAVA for subsequent selling and shipping to a third party bona fide purchaser for commercial sale under a sublicense validly granted by IMPAX to DAVA under Section 1(d) shall be permitted under the terms and conditions of this Patent License Agreement until the License Termination Date and shall be excluded for purposes of determining the Bottles Sold hereunder. (b) The Bottles Sold by IMPAX, DAVA or any party acting on their respective behalves, from March 1, 2007 through the License Termination Date shall be allocated according to dosage strength such that the quantity of Bottles Sold of each dosage strength shall not vary by more than XXXXX percent ( XXXXX %) from the number of Bottles set forth next to each dosage strength in Schedule 1 hereto; provided, that such variations, in the aggregate, may not increase the License Amount or increase the aggregate number of labeled kilograms of oxycodone hydrochloride in the Bottles Sold pursuant to this License above XXXXX .
3
(c) Immediately upon the occurrence of the License Termination Date, all solicitations for sale of IMPAX Product, offers to sell IMPAX Product, sales of IMPAX Product and shipments IMPAX Product into interstate commerce for commercial sale in the United States under the License shall cease as set forth in Section 2 hereof. During the period of the License, IMPAX shall use its commercially reasonable efforts to sell the License Amount. Nothing herein will prohibit IMPAX from making, having made, using, selling, or offering for sale, any IMPAX Product, after the Terminal Date and subject to the provisions of the Settlement Documents. (d) IMPAX shall have no right to sublicense the license rights granted herein except to grant only the limited, non-transferable right to Sell, offer to Sell and distribute IMPAX Product permitted to be Sold hereunder to DAVA under the terms and conditions of this Patent License Agreement. Except as expressly granted herein, no other right, written or oral license or sublicense, covenant not to sue, waiver or release of future infringement of other written or oral authorization is granted or implied by this Patent License Agreement. The Purdue Companies reserve all rights not expressly granted herein, including the right to sue for patent infringement for sales that are not permitted pursuant to the License or the Supplemental License (as defined in the Supplemental License Agreement), except to the extent such suit is prohibited by Section 8(b) hereof. For the avoidance of any doubt, nothing herein shall preclude the Purdue Companies, for themselves or through a third party acting on their behalf, from soliciting offers for sale, offering for sale, selling, shipping or causing to be shipped a generic version of OxyContin ® produced under NDA No. 20-553 (“Generic NDA Equivalent”). (e) Supplemental License Agreement . Subject to compliance by IMPAX and, subject to Section 11, all entities acting on IMPAX’s behalf with the terms of this Patent License
4
Agreement and, in the case of IMPAX, the Settlement Agreement, including, without limitation, the provisions of Section 2 hereof, IMPAX and the Purdue Companies shall enter into a Supplemental License Agreement in the form of Exhibit A hereto (the “Supplemental License Agreement”). Such Supplemental License Agreement shall be executed by the Parties on, and shall become effective as of, November 27, 2007; provided, however, that the Purdue Companies shall have the right to designate an earlier execution and effective date with IMPAX’s written consent. 2. Effective Date and Termination Date . (a) The provisions of Sections 1, 2, 3(a), and 4 through 20 of this Patent License Agreement shall become effective on the Signing Date. All other provisions of this Patent License Agreement shall become effective on the Effective Date, as defined in the Settlement Agreement. The Patent License Agreement and all rights granted to IMPAX under the License (including any permitted sublicense thereof) will terminate on the License Termination Date; provided, however, that nothing herein shall limit any rights granted to IMPAX pursuant to an effective Supplemental License Agreement. Without limiting the foregoing, from and after the License Termination Date until the Terminal Date, except as otherwise expressly provided in the Supplemental License Agreement, IMPAX may not solicit offers for, offer to sell, sell, ship, or cause to be shipped or distributed, or indemnify others regarding or participate in the profits of others arising from the sale of any controlled-release oxycodone product that (i) is covered by the IMPAX ANDA or (ii) otherwise infringes any of the claims of any of the Purdue Patents, including without limitation any sales or shipments from IMPAX of IMPAX Product into interstate commerce for commercial sale in the United States, including without limitation any sales or shipments from IMPAX to DAVA; provided, however, that this sentence shall not be deemed to be breached in connection with any IMPAX Product
5
that is shipped to a bona fide purchaser for commercial sale by IMPAX or DAVA, as permitted under this Patent License Agreement, prior to the License Termination Date. Except as otherwise provided in the Supplemental License Agreement, from and after the License Termination Date until the Terminal Date, IMPAX shall prohibit DAVA or any licensee, distributor, or any other party acting in a similar capacity to DAVA, from soliciting offers for, offering to sell, selling, shipping, or causing to be shipped, IMPAX Product into interstate commerce for commercial sale in the United States; provided, however, that this sentence shall not be deemed to be breached in connection with any IMPAX Product that is shipped by DAVA to a bona fide third party purchaser for commercial sale, as permitted under this Patent License Agreement, prior to the License Termination Date. Promptly after the License Termination Date, IMPAX shall segregate the IMPAX Product and conspicuously place a sign where it can easily be seen at the location in IMPAX’s facility where the IMPAX Product is separately held, identifying the IMPAX Product as not available for sale or distribution. Following the License Termination Date, IMPAX shall deliver to the Purdue Companies certificates from the Chief Financial Officer of IMPAX or any other executive officer of IMPAX certifying (i) that IMPAX ceased soliciting offers for, offering to sell, selling, shipping or causing to be shipped or distributed, or indemnifying others regarding or participating in the profits of others arising from the sale of any controlled-release oxycodone product specified in clause (i) and (ii) herein (and has instructed DAVA to cease soliciting offers for, offering to sell, selling, shipping or causing to be shipped or distributed), IMPAX Product into interstate commerce for commercial sale in the United States on or before the License Termination Date, (ii) the number of Bottles of IMPAX Product in each dosage strength sold by IMPAX from March 1, 2007 to the License Termination Date, (iii) that no sales resulting in sales above the Licensed Amount were made by IMPAX
6
prior to the License Termination Date, (iv) that all inventories of IMPAX Product in IMPAX’s possession or control and remaining on the License Termination Date have been quarantined and (v) that it has requested a certificate from DAVA and any party acting on IMPAX’s or DAVA’s behalf making the certifications referred to in clauses (ii) through (v) above with respect to DAVA or such party. The certifications referred to in clause (i) above shall be delivered two (2) business days following the License Termination Date and the certifications referred to in clauses (ii)-(v) above shall be delivered within ten (10) calendar days following the License Termination Date. The certifications of DAVA and any other party acting on IMPAX’s or DAVA’s behalf shall be delivered as soon as possible following the License Termination Date. (b) IMPAX acknowledges and agrees that IMPAX’s violation or breach of this Patent License Agreement would cause the Purdue Companies to suffer substantial damages and irreparable harm that could not adequately be remedied by an action at law. Accordingly, IMPAX agrees that Purdue Companies will be entitled, without limitation, to specific performance or preliminary or permanent injunctive relief without the requirement of posting a bond in any action, hearing, litigation or suit for violation or breach of this Patent License Agreement, such rights and remedies being in addition to all other rights and remedies available to the Purdue Companies request for any equitable relief that the Purdue Companies have an adequate remedy at law. IMPAX hereby waives and agrees not to raise or assert as a defense or counterclaim in any action brought by the Purdue Companies to enforce IMPAX’s obligations hereunder, any contention of non-infringement, invalidity or unenforceability of the Purdue Patents, or invalidity or unenforceability of the 331 Patent, or any contention under Federal or state antitrust or unfair competition laws; provided, however, that IMPAX shall not be prohibited from providing evidence that XXXXX . In addition to the foregoing rights and reservations,
7
should IMPAX or DAVA (or any other party acting on their respective behalves) ship any IMPAX Product into interstate commerce for commercial sale in the United States in excess of the Licensed Amount or after the License Termination Date but prior to the Terminal Date (in either case, “Excess Sales”), the Purdue Companies shall have the right to receive, and IMPAX agrees to promptly pay the Purdue Companies (without any waiver or offset by the Purdue Companies of any right to further damages), an amount equal to $ XXXXX ; provided, however, that the XXXXX payable by IMPAX shall be increased by a percentage equal to the amount of any announced percentage increase in XXXXX by the Purdue Companies subsequent to the Signing Date. If, and only if, IMPAX has not complied with Section 11( which shall not, for the avoidance of doubt, affect the liability of IMPAX to make payments to the Purdue Companies in respect of Excess Sales under this Section 2 (b)), any breach of the provisions of this Section 2 by DAVA or any licensee, distributor, or nay other party acting in a similar capacity to DAVA shall be deemed to be a breach by IMPAX of this Patent License Agreement. (c) If any of the certificates of the Chief Financial Officer of IMPAX (or any other executive officer of IMPAX, if applicable) referred to in Section 2(a) hereof is not delivered to the Purdue Companies in a timely manner, the Purdue Companies shall have, as their sole remedy for such failure to deliver in a timely manner (as opposed to any noncompliance with any of the other requirements of this Patent License Agreement) the right to engage KPMG (provided such firm is not regularly engaged by IMPAX) or other independent certified public accounting firm chosen by the Purdue Companies and reasonably acceptable to IMPAX (a “CPA Firm”) to conduct an audit of IMPAX for the purposes of confirming that no
8
sales of IMPAX Product resulted in Excess Sales. The CPA firm shall be given access to and shall be permitted to examine and copy such books and records of IMPAX, and to the extent permitted by DAVA, of DAVA, as it shall request upon seven (7) business days’ notice having been given by the Purdue Companies and at all reasonable times on business days for the purpose of reporting to the Parties that no sales of IMPAX Product resulted in Excess Sales. Prior to any such examination taking place, the CPA firm shall commit to IMPAX and, to the extent the CPA Firm is afforded access to DAVA’s books and records, DAVA, to keeping all information and data contained in such books and records, strictly confidential and shall not disclose such information or copies of such books and records to any third person, including the Purdue Companies, but shall use the same only for the purpose of the reviews and/or calculations which the CPA Firm needs to perform in order to confirm that no sales of IMPAX Product resulted in Excess Sales. Notwithstanding the foregoing, if the CPA firm determines that sales of IMPAX Product resulted in Excess Sales, then the Purdue Companies shall be entitled to receive a full written report of the CPA Firm with respect to its findings. The determination by the CPA Firm following such audit shall be final and binding on the Parties; provided, however, that IMPAX shall have the right, prior to such determination becoming binding on the Parties, to make a presentation to the CPA Firm (which presentation shall be completed in one (1) business day) to ensure such CPA Firm has adequate information to make its determination; provided further that, the Purdue Companies may be present at such presentation and may make a presentation to the CPA firm following the IMPAX presentation. If the report of the CPA Firm shows that sales of IMPAX Product resulted in Excess Sales, IMPAX shall pay to the Purdue Companies (i) the amount specified in Section 2(b) and (ii) the fees and expenses of the CPA Firm. If the CPA Firm reports that no such sales resulted in Excess Sales, the Purdue Companies
9
shall pay the fees and expenses of the CPA Firm. IMPAX shall cooperate with and shall use its best efforts to cause DAVA and its Affiliates to cooperate with the CPA firm in conducting such audit, including, without limitation, by providing sales records relating to their sale of IMPAX Product. (d) The Purdue Companies will use their commercially reasonable efforts to assist IMPAX with respect to its submission of applications to the Drug Enforcement Administration for quota allocations of oxycodone hydrochloride for use in manufacturing the IMPAX Product under the License or the Supplemental License, including providing information about the Settlement Agreement, this Patent License Agreement and the Supplemental License Agreement relevant to such applications by IMPAX. 3. Food and Drug Administration . (a) Pursuant to 21 C.F.R. § 314.94(a)(12)(v), and within 10 business days after the Signing Date, IMPAX shall submit to the FDA, with a copy to the Purdue Companies, a statement that IMPAX has been granted a license with respect to the Purdue Patents with respect to the IMPAX Product, pursuant to the terms of this Patent License Agreement. (b) Pursuant to 21 C.F.R. § 314.107(e), within 10 business days of entry of the Consent Judgment, IMPAX shall submit to the FDA, with a copy to the Purdue Companies, a copy of such Consent Judgment. (c) Pursuant to 21 C.F.R. § 314.94(a)(12)(viii)(A), and upon the earliest to occur of (i) the Supplemental License Termination Date (as defined in the Supplemental License Agreement), (ii) the date that is five business days following any termination of this Patent License Agreement by the Purdue Companies for a material breach by IMPAX under Section 10 of this Patent License Agreement, and (iii) November 30, 2007, if the Supplemental License
10
Agreement has not been entered into, other than as a result of the breach by the Purdue Companies of their obligations under Section 1.1(e) hereof, IMPAX shall submit to the FDA, with a copy to the Purdue Companies, an amendment to IMPAX’s certifications in the IMPAX ANDA with respect to the Purdue Patents, changing those certifications to certifications under 21 C.F.R. § 314.94(a)(12)(i)(A)(3) and requesting that the FDA promptly change the IMPAX ANDA approval from an effective approval to a tentative approval. In the event the Terminal Date (as defined in the Settlement Agreement) has occurred prior to the date upon which IMPAX would otherwise be required to amend, pursuant to the terms of this Section 3(c), IMPAX’s certifications in the IMPAX ANDA, then IMPAX shall not be required to amend such certifications with respect to the IMPAX Product. From and after the Terminal Date, nothing herein will prohibit IMPAX from filing or maintaining with respect to the IMPAX Product a certification, including but not limited to a certification based on invalidity or unenforceability, pursuant to 21 U.S.C. § 355(j)(2)(A)(vii)(IV) and 21 C.F.R. § 314.94(a)(12)(i)(A)(4); provided, however, XXXXX , IMPAX shall submit to the FDA, with a copy to the Purdue Companies, XXXXX . 4. Registration . IMPAX will be responsible for, and will bear all costs involved in respect of, the registration of the IMPAX Product with any governmental regulatory agencies. 5. WARRANTY DISCLAIMER . EXCEPT AS EXPRESSLY SET FORTH IN THIS PATENT LICENSE AGREEMENT OR IN THE SETTLEMENT AGREEMENT, NEITHER PARTY NOR THEIR AFFILIATES MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY,
11
FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT, INCLUDING WITHOUT LIMITATION (1) FOR THE PURDUE COMPANIES, WITH RESPECT TO THE PURDUE PATENTS OR ANY LICENSE GRANTED BY ANY OF THE PURDUE COMPANIES HEREUNDER, OR (2) ANY MATERIALS OR INFORMATION PROVIDED BY SUCH PARTY OR ANY OF ITS AFFILIATES UNDER THIS PATENT LICENSE AGREEMENT OR THE SETTLEMENT AGREEMENT, OR (3) WITH RESPECT TO ANY PRODUCTS OR SERVICES OF EITHER PARTY HERETO OR THEIR AFFILIATES. FURTHERMORE, UNLESS EXPRESSLY STATED IN THIS PATENT LICENSE AGREEMENT OR IN THE SETTLEMENT AGREEMENT, NOTHING IN THIS PATENT LICENSE AGREEMENT OR THE SETTLEMENT AGREEMENT SHALL BE CONSTRUED AS A WARRANTY THAT ANY PATENT, THE PRACTICE OF ANY INVENTION CLAIMED IN AN PATENT OR OTHER PROPRIETARY RIGHTS INCLUDED IN THE PURDUE PATENTS OR ANY LICENSE GRANTED BY ANY OF THE PURDUE COMPANIES DO NOT, OR THE MAKING, HAVE MADE, USING, SELLING, OFFERING FOR SALE OR IMPORTING OF IMPAX PRODUCTS BY IMPAX DOES NOT, INFRINGE ANY PATENT RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY WHO IS NOT AN AFFILIATE OF THE PURDUE COMPANIES. IT IS HEREBY AGREED AND ACKNOWLEDGED BY IMPAX THAT THE PURDUE COMPANIES ARE GIVING NO GUARANTEE OR WARRANTY, EXPRESS OR IMPLIED, TO IMPAX IN RELATION TO THE SAFETY OR THERAPEUTIC EFFECTIVENESS OF THE IMPAX PRODUCT. FURTHER, IMPAX WILL NOT GIVE ANY SUCH GUARANTEE OR WARRANTY TO ANY THIRD PARTIES ON BEHALF OF THE PURDUE COMPANIES.
12
6. Bankruptcy . The License is, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title XI of the United States Code (the “Bankruptcy Code”), a license of rights to “intellectual property,” as defined in Section 101(56) of the Bankruptcy Code. 7. Indemnification . (a) IMPAX shall defend, indemnify and hold harmless the Purdue Companies, their Affiliates and the respective owners, directors, officers, agents and employees of each of them (collectively, the “Purdue Parties”), from and against any and all expenses, demands, liabilities, damages or money judgments (“Losses”) incurred by or rendered against the Purdue Parties resulting from (i) any claim, action or proceeding by any third party arising out of the making, use, offer for sale or sale of the IMPAX Product or any products previously made, used or sold under the IMPAX ANDA, (ii) any claim, action or proceeding by any third party arising out of any material breach by IMPAX of any of its representations, warranties, covenants or agreements made under this Patent License Agreement, and (iii) any breach by IMPAX of the fourth through the sixth sentences of Section 2(a) of this Patent License Agreement; provided, however, that IMPAX will not be liable to indemnify the Purdue Parties for any Losses of the Purdue Parties to the extent such Losses were caused by: (x) the negligence or willful misconduct or wrongdoing of the Purdue Parties or (y) any material breach by the Purdue Parties of their representations, warranties, covenants or agreements under this Patent License Agreement and, provided, further, that IMPAX’s maximum liability for claims made (other than claims based on willful misconduct) by the Purdue Companies under Section 7(a)(ii) with respect to claims made XXXXX and for claims made (other than claims based on willful misconduct) by the Purdue Companies under Section 7(a)(iii), shall be limited to the greater of (A) XXXXX and (B) $ XXXXX shall be increased by a percentage equal to the amount of any announced percentage increase in
13
XXXXX by the Purdue Companies subsequent to the Signing Date under this Patent License Agreement (the greater of such amounts, the “ Aggregate Gross Margin ”), determined in accordance with United States generally accepted accounting principles, consistently applied (and derived from IMPAX’s audited financial statements to the extent possible). In the event that the Purdue Companies object to a determination made by IMPAX as to the Aggregate Gross Margin in connection with a claim for indemnification made by the Purdue Companies hereunder, the Purdue Companies will have the right to engage a CPA Firm to conduct an audit of IMPAX for the purposes of confirming the Aggregate Gross Margin on substantially the same basis as in Section 2(c) hereof. The determination made by the CPA firm following such audit of Aggregate Gross Margin shall be final and binding on the Parties; provided, however, that IMPAX shall have the right, prior to such determination becoming binding upon the Parties, to make a presentation to the CPA Firm (which presentation shall be completed in one (1) business day) to ensure such CPA Firm has adequate information to make its determination; provided further that, the Purdue Companies may be present at such presentation and may make a presentation to the CPA firm following the IMPAX presentation. (b) The Purdue Companies shall defend, indemnify and hold harmless IMPAX, its Affiliates, and the respective directors, officers, agents and employees of each of them (together, the “IMPAX Parties”), from and against any and all Losses incurred by or rendered against the IMPAX Parties resulting from (i) any claim, action or proceeding by any third party arising out of the sale by the Purdue Companies of their controlled-release oxycodone product, including the product OxyContin ® , ( ii) any claim, action or proceeding by any third party arising out of the Purdue Companies material breach of any of their representations,
14
warranties, covenants or agreements made under this Patent License Agreement, and (iii) any breach by the Purdue Companies of paragraph 5 (c) of the Settlement Agreement or Section 1(e) of this Patent License Agreement; provided, however, that the Purdue Companies will not be liable to indemnify IMPAX for any Losses of IMPAX to the extent such Losses were caused by: (x) the negligence or willful misconduct or wrongdoing of IMPAX or (y) any material breach by IMPAX of its representations, warranties, covenants or agreements under this Patent License Agreement. The provisions of this Section 7 shall not apply to any claims made by either Party or by third parties under Federal or state antitrust or unfair competition laws. 8. Purdue Companies Representations and Warranties: Covenant Not to Sue . (a) The Purdue Companies hereby represent and warrant as of the date hereof that: (i) each of them has all necessary partnership or corporate, as applicable, power and authority to execute and deliver this Patent License Agreement and to perform its obligations hereunder, and that the execution, delivery and performance of this Patent License Agreement have been duly and validly authorized by each of them; (ii) upon execution and delivery of this Patent License Agreement by each of the Purdue Companies, this Patent License Agreement shall constitute the legal, valid and binding agreement of each of them, enforceable against each of them in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors rights generally and other general equitable principles which may limit the right to obtain certain remedies; (iii) neither the execution, delivery and performance of this Patent License Agreement nor the consummation or performance of this Patent License Agreement by the Purdue Companies shall contravene, conflict with or result in any material violation or material breach, as the case may be, of any law applicable to the Purdue Patents or any material contract to which the Purdue
15
Companies are a party; (iv) the Purdue Companies or their Affiliates collectively own all right, title and interest in and to each and every patent and/or patent application within the Purdue U.S. Patent Family, and have not granted or otherwise transferred to any third party any right to enforce any patent or patent applications included in. the Purdue U.S. Patent Family, or any right to practice any patent or patent applications included in the Purdue U.S. Patent Family that would conflict with the License granted to IMPAX hereunder; (v) the licenses granted to XXXXX , respectively, are the only licenses or options to license to the Purdue Patents granted by the Purdue Companies for the sale in the United States of any 10 mg, 20 mg, 40 mg or 80 mg controlled-release oxycodone product that is (A) an AB rated generic version of OxyContin ® as described in NDA No, 20-553, together with all amendments and supplements thereto or (B) an authorized generic approved pursuant to NDA No. 20-553, together with all amendments and supplements thereto, and (vi) to its knowledge, Purdue has not received any notice of certification pursuant to 21 C.F.R § 3l4.94(a)(12)(i)(A)(4) for any. AB rated genetic version of OxyContin ® as described in NDA No. 20 -553, together with all amendments and supplements thereto from any third party other than XXXXX . The Purdue Companies also represent and warrant to IMPAX that any violation or breach of this Patent License Agreement by IMPAX may cause the Purdue Companies to suffer substantial damages and irreparable harm, including causing the Purdue Companies to be in violation or breach of, or severely disadvantaged under, certain material agreements the Purdue Companies have entered into with third parties, provided however, that the Purdue Companies acknowledge and agree
16
that IMPAX has not been provided a copy of such agreements nor an opportunity to review such agreements. (b) The Purdue Companies hereby covenant that neither they, nor any of their Affiliates will sue, assert any claim or counterclaim against or otherwise participate in any action or proceeding in the United States against IMPAX or its Affiliates claiming that the manufacture, use, sale, offer for sale or importation of IMPAX Product (i) pursuant to the License between the Signing Date and the License Termination Date, and (ii) pursuant to the Supplemental License, assuming the Supplemental License Agreement is entered into, between the Commencement Date and the Supplemental License Termination Date, infringes any patents owned, licensed, or controlled by the Purdue Companies or their Affiliates. Moreover, if and only if (1) the Supplemental License Agreement is entered into and IMPAX does not breach Section 2(a) thereof, (2) XXXXX , and (3) IMPAX manufactures, uses, sells, offers for sale or imports XXXXX , then the Purdue Companies hereby covenant that neither they nor any of their Affiliates will sue, assert any counterclaim against or otherwise participate in any action or proceeding against IMPAX or its Affiliates in the United States claiming that the manufacture, use, sale, offer for sale or importation of XXXXX by virtue of paragraph 5(a)(B) of the Settlement Agreement; provided, however, XXXXX . These covenants not to sue shall be non-transferable, (except as provided in Section 12 of this Patent License Agreement). Nothing in this Section shall be interpreted to prohibit the Purdue Companies from (A) suing, asserting any claim or counterclaim against or otherwise participating in any action or proceeding against IMPAX with respect to any formulations of oxycodone (other than the activities permitted pursuant to the License or the Supplemental License or other than the covenants granted in the first and second sentences of this Section 8(b)), or (B) enforcing this Patent License Agreement,
17
the Settlement Agreement, the Supplemental License Agreement or the Consent Judgment. Notwithstanding any provision herein to the contrary, this Section does not apply to, negate, or in any way limit any legal rights which the Purdue Companies may have relating in any manner to claims regarding any patents against owners, holders, licensees or beneficiaries of an ANDA (other than the manufacture, use, sale, offer for sale or importation of IMPAX Product under clause (A) of the immediately preceding sentence of this Section 8(b)) approved by, or submitted before or after the date of this Patent License Agreement to, the FDA for a controlled-release oxycodone product that is an AB rated generic version of OxyContin ® (oxycodone hydrochloride controlled-release) Tablets under NDA No. 20-553, together with all amendments and supplements thereto, regardless of whether such ANDA owner, holder, licensee or beneficiary is or would otherwise be a manufacturer, supplier, importer, distributor, purchaser or user of the IMPAX Product. The Purdue Companies further acknowledge that: (I) the appropriate remedy for breach of this Section 8(b) by the Purdue Companies is immediate dismissal, with prejudice of any patent infringement action brought in breach of this Section 8(b); (II) time is of the essence in dismissing any action brought in breach of this Section 8(b); and (III) that any available form of expedited relief to have the dismissal granted and/or considered on appeal, including but not limited to, a motion for hearing on shortened time, shall be appropriate in the event any of the Purdue Companies brings an action in violation of this Section 8(b). The Purdue Companies further agree not to oppose directly or indirectly, any motion to dismiss an action brought in breach of this Section 8(b) and not to oppose any request for expedited ruling on such motion to dismiss. (c) The Purdue Companies hereby covenant that prior to the License Termination Date and between the Commencement Date and the Supplemental License
18
Termination Date, if the Supplemental License Agreement is entered into, neither they, nor any of their Affiliates, will file, assist (directly or indirectly) in the filing of, cause any other person (directly or indirectly) to file, participate (directly or indirectly) in, or otherwise assist (directly or indirectly) a XXXXX ; provided that IMPAX has been in full compliance with the provisions of the fourth, fifth and sixth sentences of Section 2(a) of this Patent License Agreement. The Purdue Companies further acknowledge that IMPAX would suffer substantial and irreparable harm from their breach of this covenant, that IMPAX would not have an adequate remedy at law for such breach, and that a temporary restraining order, preliminary injunction, and/or permanent injunction requiring XXXXX would be an appropriate remedy for such breach. 9. IMPAX ’s Representations and Warranties . IMPAX hereby represents and warrants as of the date hereof that: (i) it has all necessary corporate power and authority to execute and deliver this Patent License Agreement and to perform its obligations hereunder, and that the execution, delivery and performance of this Patent License Agreement have been duly and validly authorized by it; (ii) upon execution and delivery of this Patent License Agreement by IMPAX, this Patent License Agreement shall constitute the legal, valid and binding agreement of IMPAX, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally and other general equitable principles which may limit the right to obtain certain remedies; (iii) neither the execution, delivery and performance by IMPAX of this Patent License Agreement nor the consummation or performance of this Patent License Agreement by IMPAX shall contravene, conflict with or result in any material violation or material breach, as the case may be, of any law applicable to IMPAX or any material contract to
19
which IMPAX is a party; and (iv) no party other than IMPAX and DAVA is authorized to ship items from IMPAX’s warehouse. 10. Termination . In the event of a material breach by IMPAX of this Patent License Agreement or the Settlement Agreement, the Purdue Companies will have the right to terminate this Patent License Agreement upon written notice to IMPAX, such termination to take effect immediately upon the delivery of such notice to IMPAX. 11. DAVA Breach Event . Notwithstanding anything to the contrary contained in this Patent License Agreement (except for liability in respect of Excess Sales in Section 2(b) hereof), including without limitation the first sentence of Section 1(e) and the last sentence of Section 2 (b) hereof, IMPAX shall not be deemed to have breached this Patent License Agreement to the extent that such breach has resulted solely from the actions (or inactions) of DAVA under the DAVA Supply Agreement that were not directly or indirectly taken (or not taken) at the direction of IMPAX or in any way suggested, encouraged or expressly or tacitly approved of, authorized, waived or released by IMPAX (any such event, a “DAVA Breach Event”), provided that IMPAX shall have complied with each of the following: (i) Within two days of the Signing Date, IMPAX shall have delivered a written notice to DAVA and DDN/Obergfel Pharmaceutical Logistics (“DDN”), in a form reasonably acceptable to the Purdue Companies, notifying such persons of the License Termination Date, that such persons will be prohibited from selling, offering for sale, making customer solicitations, or shipping IMPAX Product from and after such date, that any rights granted to DAVA under Section 1(d) will have expired, and, with respect to DAVA only, of IMPAX’s intention to pursue all available legal and equitable remedies against DAVA to the
20
extent that DAVA takes any such actions from and after such date; including the sale, offer for sale, distribution or shipment of IMPAX Product. (ii) Upon the earlier of (A) any time during the period commencing on June 7, 2007 and ending on June 21, 2007 and (B) within two business days of receipt of a written request from the Purdue Companies after the License Termination Date, IMPAX shall have delivered a written notice to DAVA and DDN in the same form as the notice provided, under clause (i) above, notifying such persons of the License Termination Date, that such persons will be prohibited from selling, offering, for sale, making customer solicitations or shipping IMPAX Product from and after such date, that any rights granted to DAVA under Section 1(d) will have expired, and, with respect to DAVA only, of IMPAX’s intention to pursue all available legal and equitable remedies against DAVA to the extent that DAVA takes any such actions from and after such date, including the sale, offer for sale, distribution or shipment of IMPAX Product. (iii) IMPAX shall have used its best efforts to cause DAVA to deliver the certifications required by Section 2(a) hereof. (iv) If the License Termination Date shall have occurred, IMPAX shall have delivered a written notice to DAVA within two business days thereafter requesting that any IMPAX Product then in DAVA’s possession or control promptly be returned to IMPAX, at IMPAX’s expense. (v) IMPAX shall forward copies of the notices referred to in clauses (i), (ii) and (iv) above to the Purdue Companies in the manner provided in Section 16, within two business days of the sending of each such notice,
21
(vi) If a DAVA Breach Event shall have occurred, IMPAX shall pursue any and all legal and equitable remedies it may have against DAVA in connection with the facts and circumstances giving rise to such event, and shall allow the Purdue Companies to participate in any action or claim that it makes and/or asserts against DAVA in relation thereto at IMPAX’s expense (including any expense incurred by the Purdue Companies for the retention of its own counsel in connection with such matter). Any recoveries made against DAVA in accordance with this Section 11 shall be for the benefit of, and be promptly paid by IMPAX to, the Purdue Companies. (vii) IMPAX shall have monitored DAVA’s inventory levels of IMPAX Product prior to the License Termination Data as reported to IMPAX under and in a manner consistent with the DAVA Supply Agreement and via any other lawful method reasonably available to IMPAX, and shall have taken steps reasonably calculated to ensure, based on such information, that IMPAX Product is not supplied to DAVA in an amount that is reasonably anticipated to have resulted in Excess Sales, and to minimize the inventory of IMPAX Product in DAVA’s possession or control as of the License Termination Date. 12. No Assignment . This Patent License Agreement is binding upon and shall inure to the benefit of each Party hereto and each of its successors and permitted assigns. IMPAX may not assign (by way of merger, acquisition, statute, operation of law or otherwise) this Patent License Agreement (an “Assignment”) without the prior written consent of the Purdue Companies which may be withheld in the Purdue Companies’ sole discretion; provided, however, that the Purdue Companies’ consent shall not be required if such Assignment is part of the transfer of all or substantially all of IMPAX’s assets or all of the equity or capital stock of IMPAX; provided that such assignee is bound by and subject to the Settlement Agreement. Any
22
Assignment, attempted Assignment or assignment of the rights granted hereunder by IMPAX, in contravention of the provisions of this Section 12 shall be void and shall have no force or effect. In the event that any of the Purdue Companies (or any of their respective successors and assigns) sells or assigns (other than in connection with the grant of a security interest) any of the Purdue Patents to any other person or entity, such person or entity shall agree to assume the obligations of such Purdue Company under this Patent License Agreement in writing as a condition to such acquisition. 13. Entire Agreement . This Patent License Agreement, along with the Settlement Agreement and the documents referred to herein and therein, set forth the entire agreement and understanding among the Parties hereto as to the subject matter hereof and supersede all other documents, oral consents or understandings, if any, made between the Purdue Companies and IMPAX (excluding any agreements or stipulations endorsed by court order) before the Signing Date with respect to the subject matter hereof. None of the terms of this Patent License Agreement shall be amended or modified except in a writing signed by each of the Parties hereto. To the extent there is an inconsistency between any provision of this Patent License Agreement and the Settlement Agreement, the provisions of the Settlement Agreement shall govern. The Parties acknowledge that there have been a number of drafts of this Patent License Agreement exchanged between them prior to the Parties’ agreement on the final version of this Patent License Agreement which has been executed by them. The Parties expressly agree that all such prior drafts have been superseded by this executed Patent License Agreement and shall not be used in any dispute between the Parties as evidence with respect to interpreting the meaning of any provision of this Patent License Agreement.
23
14. Enforceability . Any term or provision of this Patent License Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability, without rendering invalid or unenforceable the remaining terms and provisions of this Patent License Agreement in such jurisdiction or in any other jurisdiction. 15. Governing Law . This Patent License Agreement, and the rights and obligations created hereunder, shall be governed by and interpreted according to the substantive laws of the State of New York without regard to its choice of law or conflicts of law principles. 16. Notices . Any notice required under this Patent License Agreement shall be in writing and shall be given (and shall be deemed to be duly given upon receipt) by delivery in person, by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified by like notice): If to any of the Purdue Companies: Purdue Pharma L.P. One Stamford Forum 201 Tresser Boulevard Stamford, CT 06901-3431 Attn: Howard R. Udell Executive Vice President Chief Legal Officer Fax No.: (203) 588-6204 with a copy to: Chadbourne & Parke LLP 30 Rockefeller Plaza New York, NY 10112 Attn: Stuart D. Baker Fax No.: (212) 489-7130 If to IMPAX:
24
IMPAX Laboratories, Inc. 30831 Huntwood Avenue Hayward, CA 94544 Attention: Chief Executive Officer Fax No.: 510-471-1595 with a copy to: IMPAX Laboratories, Inc. 30831 Huntwood Avenue Hayward, CA 94544 Attention: Legal Department Fax No.: 510-476-2092 17. Effect of Waiver . A waiver by any Party of any term or condition of this Patent License Agreement in any one instance shall not be deemed or construed to be a waiver of such term or condition for any other instance in the future (whether similar or dissimilar) or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this Patent License Agreement shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking, obligation or agreement of any of the Parties. 18. Legal Advice; Investigation . Each of the Parties agrees that it has received independent legal advice from its attorneys with respect to the rights and asserted rights arising out of this Patent License Agreement and the Settlement Agreement. Each of the Parties further agrees that it and its counsel have had adequate opportunity to make whatever investigation or inquiry they may deem necessary or desirable in connection with the subject matter of this Patent License Agreement, prior to the execution hereof. 19. Counterparts . This Patent License Agreement may be executed in counterparts (including by facsimile or other electronic transmission), and each fully executed counterpart shall be deemed an original of this Patent License Agreement. 20. Definitions . All capitalized terms used herein and not defined shall have the meanings specified in the Settlement Agreement. The definitions of the terms herein apply
25
equally to the singular and plural of the terms defined. Whenever the context may require, any pronoun will include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” will be deemed to be followed by the phrase “without limitation”. Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein) and (B) the words “herein”, “hereof” and “hereunder”, and words of similar import, will be construed to refer to this Patent License Agreement in its entirety and not to any particular provision hereof.
[remainder of this page intentionally left blank]
26
Patent License Agreement Signature Page IN WITNESS WHEREOF, each of the Parties has caused this Patent License Agreement to be executed as of the date first written above by its duly authorized officer or agent.
PURDUE PHARMA L.P.
By: Purdue Pharma Inc., its general partner
By: /s/ Edward B. Mahony Name: Edward B. Mahony Title: Executive V.P., Chief Financial Officer
THE P.F. LABORATORIES, INC.
By: /s/ Edward B. Mahony Name: Edward B. Mahony Title: Executive V.P., Chief Financial Officer
PURDUE PHARMACEUTICALS L.P.
By: Purdue Pharma Inc., its general partner
By: /s/ Edward B. Mahony Name: Edward B. Mahony Title: Executive V.P., Chief Financial Officer
IMPAX LABORATORIES, INC.
By: /s/ Larry Hsu Name: Larry Hsu Title: President & CEO
On April 12, 2007 before the undersigned Notary Public in and for Alameda County, California, personally came and appeared Larry Hsu, who deposed and said that he initially affixed his signature to this document on March 30, 2007 on behalf of Impax Laboratories, Inc. and appears herein to execute the document in the presence of the undersigned Notary after being duly sworn.
/s/ Larry Hsu Larry Hsu
/s/ Alison K. Skamangas Notary Public
Schedule 1 To Patent License Agreement
Dosage Strength Number of Bottles
10 mg XXXXX 20 mg XXXXX 40 mg XXXXX 80 mg XXXXX
EXHIBIT 10.18 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
SUPPLEMENTAL LICENSE AGREEMENT This Supplemental License Agreement (“Supplemental License Agreement”), dated as of March 30 , 2007 (the “Commencement Date”), is by and among Purdue Pharma L.P., a Delaware limited partnership, The P.F. Laboratories, Inc., a New Jersey corporation, Purdue Pharmaceuticals L.P., a Delaware limited partnership (the foregoing are individually and collectively referred to as the “Purdue Companies”), and IMPAX Laboratories, Inc., a Delaware corporation (“IMPAX”). The Purdue Companies and IMPAX are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
WITNESSETH : WHEREAS, the Purdue Companies are the owners of United States patent numbers 5,549,912, 5,508,042 and 5,656,295 (the “Purdue Patents”), relating to and protecting controlled-release oxycodone products, including the product OxyContin®, a controlled-release oxycodone product; and WHEREAS, the Purdue Companies and IMPAX entered into a Settlement Agreement, dated as of March 30, 2007 (the “Settlement Agreement”), and a Patent License Agreement, dated as of March 30, 2007 (the “PLA”), pursuant to which IMPAX was granted (i) a license of limited duration under the Purdue Patents to make, have made, use, offer to Sell, Sell and have Sold (as such terms are defined below) a certain number of Bottles (as defined below) of the generic versions of OxyContin® products specifically described in ANDA No. 76-318 and
ANDA No. 76-446, along with all amendments and supplements thereto (collectively referred to herein as the “IMPAX ANDA”), and (ii) an option to request, among other things, that the Purdue Companies enter into this Supplemental License Agreement; and WHEREAS, this is the Supplemental License Agreement referred to in Section 1(e) of the PLA. NOW THEREFORE, the Parties agree as follows: 1. License Grant; Supplemental License Amount . (a) Grant of License . The Purdue Companies hereby grant to IMPAX, a non-exclusive, royalty-free, non-transferable (except as provided in Sections 1(d) and 12 below) license of limited duration under the Purdue Patents to make, have made, use, offer to Sell, Sell and have Sold the number of bottles, each containing 100 tablets (“Bottles”), determined in accordance with Section 1(e) below (the “Supplemental License Amount”), of the generic versions of OxyContin® products specifically described in, and sold under, the IMPAX ANDA as approved as of the Signing Date (the “IMPAX Product”) in and for the United States (the “Supplemental License”), during the period (the “Supplemental License Period”) commencing at 12:01 a.m., New York City time, on the Commencement Date and terminating at 11:59 p.m., New York City time, on the “Supplemental License Termination Date” (as provided in Section 1(e) below). (b) The Bottles sold by IMPAX, DAVA, or any party acting on their respective behalves, pursuant to the Supplemental License shall be allocated according to dosage strength such that the quantity of Bottles Sold of each dosage strength shall not vary by more than XXXXX percent ( XXXXX %) from the number of Bottles set forth next to each dosage strength in Schedule 1 hereto; provided that, such variations, in the aggregate, may not
2
increase the Supplemental License Amount or increase the aggregate number of labeled kilograms of oxycodone hydrochloride in the Bottles Sold pursuant to this Supplemental License above XXXXX . (c) Immediately upon the occurrence of the Supplemental License Termination Date all solicitations for sale of IMPAX Product, offers to sell IMPAX Product, sales of IMPAX Product and shipments of IMPAX Product into interstate commerce for commercial sale in the United States under the Supplemental License shall cease as set forth in Section 2 hereof. Nothing herein shall prohibit IMPAX from making, having made, using, selling, or offering for sale, any IMPAX Product after the Terminal Date and subject to the provisions of the Settlement Documents. (d) IMPAX shall have no right to sublicense the license rights granted herein except to grant only the limited, non-transferable right to Sell, offer to Sell and distribute IMPAX Product permitted to be Sold hereunder to DAVA under the terms and conditions of this Supplemental License Agreement until the Supplemental License Termination Date. Except as expressly granted herein, no other right, written or oral license or sublicense, covenant not to sue, waiver or release of future infringement or other written or oral authorization is granted or implied by this Supplemental License Agreement. The Purdue Companies reserve all rights not expressly granted herein, including the right to sue for patent infringement for sales that are not permitted pursuant to the Supplemental License, except to the extent such suit is prohibited by Section 8(b) hereof. For the avoidance of any doubt, nothing herein shall preclude the Purdue Companies, for themselves or through a third party acting on their behalf, from soliciting offers for sale, offering for sale, selling, shipping or causing to be shipped a Generic NDA Equivalent (as defined in the PLA).
3
(e) Supplemental License Amount and Supplemental License Termination Date . (i) The “Supplemental License Amount” shall mean the sum of the following amounts; (1) XXXXX Bottles; plus (2) if at any time during the period which is fewer than XXXXX calendar days immediately prior to the Commencement Date XXXXX (as defined below) into interstate commerce for commercial sale to the Trade (as defined below) (that is not an Affiliate of XXXXX ) in the United States and intended for subsequent immediate distribution for patient use, then an additional XXXXX Bottles; plus (3) if at any time during the period which is XXXXX calendar days immediately prior to the Commencement Date XXXXX into interstate commerce for commercial sale to the Trade (that is not an Affiliate of XXXXX ) in the United States and intended for subsequent immediate distribution for patient use, then an additional XXXXX Bottles; plus (4) if at any time during the period which is XXXXX calendar days immediately prior to the Commencement Date XXXXX into interstate commerce for commercial sale to the Trade (that is not an Affiliate of XXXXX ) in the United States and intended for subsequent immediate distribution for patient use, then an additional XXXXX Bottles; plus
4
(5) provided that IMPAX used its commercially reasonable efforts to sell the License Amount during the License period under the PLA, in the event IMPAX sells fewer than XXXXX Bottles from March 1, 2007 through the License Termination Date, the number of Bottles equal to the difference between (A) XXXXX Bottles and (B) the number of Bottles Sold by IMPAX, DAVA or any parties acting on their respective behalves from March 1, 2007 through the License Termination Date, but in no event will such amount exceed XXXXX Bottles; plus (6) in the event (A) XXXXX , or (B) XXXXX sells and ships during the period commencing on the Signing Date and ending on the License Termination Date any XXXXX into interstate commerce for commercial sale to the Trade (that is not an Affiliate of XXXXX ) in the United States and intended for subsequent immediate distribution for patient use pursuant to a license granted by any of the Purdue Companies, in the case of either (A) or (B) but not both, then an additional XXXXX Bottles. For the avoidance of doubt, the Supplemental License Amount (a) is the maximum number of Bottles permitted to be sold hereunder and all sales of the IMPAX Product must immediately cease no later than the Supplemental License Termination Date regardless of whether the amount of Bottles actually sold during the Supplemental License Period is less than the Supplemental License Amount and (b) will not exceed XXXXX Bottles.
5
(ii) The “Supplemental License Termination Date” shall be: (1) if the Supplemental License Amount is XXXXX Bottles, or if the Supplemental License Amount is equal to XXXXX Bottles plus only one or both of the additional amounts specified in clauses (i)(5) or (i)(6)(B) of the definition thereof, then 11:59 p.m., New York City time on XXXXX ; provided , however , that if this clause (1) applies and the Supplemental License Amount also includes the additional amount specified in clause (i)(6)(A), then 11:59 p.m., New York City time on XXXXX ; or (2) if the Supplemental License Amount includes one of the additional amounts specified in clauses (i)(2) through (i)(4) of the definition thereof, then 11:59 p.m., New York City time on XXXXX ; provided , however , that if this clause (2) applies and the Supplemental License amount includes one of the additional amounts specified in clauses (i)(5) or (i)(6)(A), then 11:59 p.m., New York City time on XXXXX ; provided , however , that if this Supplemental License Agreement is terminated pursuant to Section 10 hereof prior to the dates set forth in (1) or (2) above, then the Supplemental License Termination Date shall be the effective date of such termination. (iii) For purposes of this Supplemental License Agreement, the following terms have the following meanings: “Branded Product” means OxyContin® (oxycodone hydrochloride controlled-release) tablets, under NDA number 20-553, together with all amendments and supplements thereto.
6
XXXXX . “Product” means, except when used in “Branded Product” and “IMPAX Product”, any of the authorized generic versions of 10 mg, 20 mg, 40 mg and 80 mg OxyContin® (oxycodone hydrochloride controlled-release) tablets, under NDA number 20-553, together with all amendments and supplements thereto and as marketed by the Purdue Companies as of the Signing Date. “Trade” means wholesalers, chains, distributors, retailers, pharmacies, mail order pharmacies or any other classes of trade that participate in the distribution or sale of pharmaceutical products. (iv) For purposes of this Section 1, the terms “Sell”, “Selling” or “Sold” mean selling and shipping by IMPAX, DAVA, or any other party acting on their respective behalves to a third party bona fide purchaser for commercial sale. For the avoidance of any doubt, sales and shipments of Bottles by IMPAX to DAVA for subsequent selling and shipping to a third party bona fide purchaser for commercial sale under a sublicense validly granted by IMPAX to DAVA under Section 1(d) shall be permitted and shall be excluded for purposes of determining the Bottles Sold hereunder. (v) Each Party will inform the other Party in writing within five (5) business days of becoming aware of the fact that XXXXX has sold and shipped any XXXXX into interstate commerce for commercial sale to the Trade (that is not an Affiliate of XXXXX ) in the United States and intended for subsequent immediate distribution for patient use. The Purdue Companies will inform IMPAX in writing within five (5) business days of entering into an agreement with any third party, the effect of
7
which may result in additional Bottles being included within the Supplemental License Amount. 2. Effective Date and Supplemental License Termination Date . (a) The provisions of this Supplemental License Agreement shall become effective on the Commencement Date. This Supplemental License Agreement and all rights granted to IMPAX under this Supplemental License Agreement (including any permitted sublicense thereof) will terminate on the Supplemental License Termination Date. Without limiting the foregoing, from and after the Supplemental License Termination Date until the Terminal Date, IMPAX will not, directly or indirectly, make, have made, use, sell or offer to sell, import or distribute, or authorize, permit or solicit others to make, use, have made, use, sell or offer to sell, import or distribute, or indemnify others regarding or participate in the profits of others arising from the sale of, any controlled-release oxycodone product that (i) is covered by the IMPAX ANDA or (ii) otherwise infringes any of the claims of any of the Purdue Patents, including without limitation any sales or shipments from IMPAX to DAVA; provided, however, that this sentence shall not be deemed to be breached in connection with any IMPAX Product that is shipped to a bona fide purchaser for commercial sale by IMPAX or DAVA, as permitted under this Supplemental License Agreement, prior to the Supplemental License Termination Date. From and after the Supplemental License Termination Date until the Terminal Date, IMPAX shall prohibit DAVA or any licensee, distributor, or any other party acting in a similar capacity to DAVA, from soliciting offers for, offering to sell, selling, distributing, shipping, or causing to be shipped, IMPAX Product into interstate commerce for commercial sale in the United States; provided, however, that this sentence shall not be deemed to be breached in connection with any IMPAX Product that is shipped by DAVA to a bona fide third party purchaser for commercial sale, as
8
permitted under this Supplemental License Agreement, prior to the Supplemental License Termination Date. Promptly after the Supplemental License Termination Date, IMPAX shall destroy any inventories of the IMPAX Product remaining in its possession or control, or in the possession or control of any licensee, distributor or any other party acting in a similar capacity on the Supplemental License Termination Date; provided, however, that IMPAX shall not be so obligated to destroy such inventories in the event the Terminal Date occurs prior to the Supplemental License Termination Date. Following the Supplemental License Termination Date, IMPAX shall deliver to the Purdue Companies certificates from the Chief Financial Officer of IMPAX or any other executive officer of IMPAX certifying (I) that IMPAX ceased, directly or indirectly, shipping, making, having made, using, selling, offering to sell, importing, distributing, or indemnifying others regarding or participating in the profits of others arising from the sale of any controlled-release oxycodone product specified in clause (i) and (ii) herein (and has instructed DAVA to cease soliciting offers for, offering to sell, selling, distributing, shipping or causing to be shipped) IMPAX Product into interstate commerce for commercial sale in the United States on or before the Supplemental License Termination Date, (II) the number of Bottles of IMPAX Product in each dosage strength sold by IMPAX from the Commencement Date to the Supplemental License Termination Date, (III) that all inventories of IMPAX Product remaining on the Supplemental License Termination Date have been destroyed (unless IMPAX is not so obligated because the Terminal Date has occurred prior to the Supplemental License Termination Date), (IV) that no sales resulting in sales above the Supplemental License Amount were made by IMPAX between the Commencement Date and the Supplemental License Termination Date and (V) that it has requested a certificate from DAVA and any party acting on IMPAX’s or DAVA’s behalf making the certifications referred to in clauses (II) through (V)
9
above with respect to DAVA or such party. The certifications referred to in clause (I) above shall be delivered two (2) business days following the Supplemental License Termination Date and the certifications referred to in clauses (II)-(V) above shall be delivered within ten (10) calendar days following the Supplemental License Termination Date. The certifications of DAVA and any other party acting on IMPAX’s or DAVA’s behalf shall be delivered as soon as possible following the Supplemental License Termination Date. (b) IMPAX acknowledges and agrees that IMPAX’s violation or breach of this Supplemental License Agreement would cause the Purdue Companies to suffer substantial damages and irreparable harm that could not adequately be remedied by an action at law. Accordingly, IMPAX agrees that the Purdue Companies will be entitled, without limitation, to specific performance or preliminary or permanent injunctive relief without the requirement of posting a bond in any action, hearing, litigation or suit for violation or breach of this Supplemental License Agreement, such rights and remedies being in addition to all other rights and remedies available to the Purdue Companies at law, in equity or otherwise, and IMPAX will not assert in opposition to the Purdue Companies’ request for any equitable relief that the Purdue Companies have an adequate remedy at law. IMPAX hereby waives and agrees not to raise or assert as a defense or counterclaim in any action brought by the Purdue Companies to enforce IMPAX’s obligations hereunder, any contention of non-infringement, invalidity or unenforceability of the Purdue Patents, or invalidity or unenforceability of the ‘331 Patent, or any contention under Federal or state antitrust or unfair competition laws; provided, however, that Impax shall not be prohibited from providing evidence that the XXXXX . In addition to the foregoing rights and reservations, should IMPAX or DAVA (or any other party acting on their respective behalves) ship any IMPAX Product into interstate commerce for commercial sale in
10
the United States in excess of the Supplemental License Amount or after the Supplemental License Termination Date but prior to the Terminal Date (in either case, “Excess Sales”), the Purdue Companies shall have the right to receive, and IMPAX agrees promptly to pay the Purdue Companies (without any waiver or offset by the Purdue Companies of any right to further damages) an amount equal to $ XXXXX provided, however, that the XXXXX payable shall be increased by a percentage equal to the amount of any announced percentage increase in XXXXX by the Purdue Companies subsequent to the Signing Date. If, and only if, IMPAX has not complied with Section 11 (which shall not, for the avoidance of doubt, affect the liability of IMPAX to make payments to the Purdue Companies in respect of Excess Sales under this Section 2 (b)), any breach of the provisions of this Section 2 by DAVA or any licensee, distributor, or any other party acting in a similar capacity to DAVA shall be deemed to be a breach by IMPAX of this Supplemental License Agreement. (c) If any of the certificates of the Chief Financial Officer of IMPAX (or any other executive officer of IMPAX, if applicable) referred to in Section 2(a) hereof is not delivered to the Purdue Companies in a timely manner, the Purdue Companies shall have, as their sole remedy for such failure to deliver in a timely manner (as opposed to any noncompliance with any of the other requirements of this Supplemental License Agreement), the right to engage a CPA Firm to conduct an audit of IMPAX for the purposes of confirming that no sales of IMPAX Product resulted in Excess Sales. Upon request by the Purdue Companies, IMPAX shall use its best efforts to exercise its audit rights to conduct an audit of DAVA for the purposes of confirming that no sales of IMPAX Product resulted in Excess Sales and that no sales of IMPAX Product occurred between the License Termination Date and the Commencement Date. The CPA Firm shall be given access to and shall be permitted to examine and copy such books and records of IMPAX, and to the extent permitted by DAVA, of DAVA, as it shall request upon seven (7) business days’ notice having been given by the Purdue Companies and at all reasonable times on business days for the purpose of reporting to the Parties that no sales of IMPAX Product resulted in Excess Sales and that no sales of IMPAX Product occurred between the License Termination Date and the
11
Commencement Date. Prior to any such examination taking place, the CPA Firm shall commit to IMPAX and, to the extent the CPA Firm is afforded access to DAVA’s books and records, DAVA, to keeping all information and data contained in such books and records, strictly confidential and shall not disclose such information or copies of such books and records to any third person, including the Purdue Companies, but shall use the same only for the purpose of the reviews and/or calculations which the CPA Firm needs to perform in order to confirm that no sales of IMPAX Product resulted in Excess Sales and that no sales of IMPAX Product occurred between the License Termination Date and the Commencement Date. Notwithstanding the foregoing, if the CPA Firm determines that sales of IMPAX Product resulted in Excess Sales or that sales of IMPAX Product occurred between the License Termination Date and the Commencement Date, then the Purdue Companies shall be entitled to receive a full written report of the CPA Firm with respect to its findings. The determination by the CPA Firm following such audit shall be final and binding on the Parties; provided, however, that IMPAX shall have the right, prior to such determination becoming binding on the Parties, to make a presentation to the CPA Firm (which presentation shall be completed in one (1) business day) to ensure such CPA Firm has adequate information to make its determination; provided further that, the Purdue Companies may be present at such presentation and may make a presentation to the CPA Firm following the IMPAX presentation.
12
If the report of the CPA Firm shows that sales of IMPAX Product resulted in Excess Sales or that sales of IMPAX Product occurred between the License Termination Date and the Commencement Date, IMPAX shall pay to the Purdue Companies (i) the amount specified in Section 2 (b) and (ii) the fees and expenses of the CPA Firm. If the CPA Firm reports that no such sales resulted in Excess Sales and that no sales of IMPAX Product occurred between the License Termination Date and the Commencement Date, the Purdue Companies shall pay the fees and expenses of the CPA Firm. IMPAX shall cooperate with and shall use its best efforts to cause DAVA and its Affiliates to cooperate with the CPA Firm in conducting such audit, including, without limitation, by providing sales records relating to their sale of IMPAX Product. (d) During the Supplemental License Period, the Purdue Companies will use their commercially reasonable efforts to assist IMPAX with respect to its submission of applications to the Drug Enforcement Administration for quota allocations of oxycodone hydrochloride for use in manufacturing the IMPAX Product under the Supplemental License, including providing information about the Settlement Agreement and this Supplemental License Agreement relevant to such applications by IMPAX. (e) The Supplemental License and all rights granted to IMPAX under the Supplemental License may be terminated immediately by the Purdue Companies by notice to IMPAX if IMPAX (i) fails to comply with any of the terms or provisions of this Supplemental License Agreement, the Settlement Agreement or the PLA, (ii) has solicited offers for, offered to sell, sold, shipped or caused to be shipped, IMPAX Product into interstate commerce for commercial sale in the United States, including without limitation any sales or shipments among IMPAX and its Affiliates between the License Termination Date and the Commencement Date or (iii) XXXXX .
13
3. Food and Drug Administration . (a) Pursuant to 21 C.F.R. § 314.94(a)(12)(v), and within 10 business days after the Commencement Date, IMPAX shall submit to the FDA, with a copy to the Purdue Companies, a statement that IMPAX has been granted a license with respect to the Purdue Patents with respect to the IMPAX Product, pursuant to the terms of this Supplemental License Agreement. (b) Pursuant to 21 C.F.R. § 314.94(a)(12)(viii)(A), and within 10 business days of the Supplemental License Termination Date, IMPAX shall submit to the FDA, with a copy to the Purdue Companies, an amendment to IMPAX’s certifications in the IMPAX ANDA with respect to the Purdue Patents, changing those certifications to certifications under 21 C.F.R. § 314.94(a)(12)(i)(A)(3) and requesting that the FDA promptly change the IMPAX ANDA approval from an effective approval to a tentative approval. In the event the Terminal Date (as defined in the Settlement Agreement) has occurred prior to the date upon which IMPAX would otherwise be required to amend, pursuant to the terms of this Section 3(b), IMPAX’s certifications in the IMPAX ANDA, then IMPAX shall not be required to amend such certifications with respect to the IMPAX Product. From and after the Terminal Date, nothing herein will prohibit IMPAX from filing or maintaining with respect to the IMPAX Product a certification, including but not limited to a certification based on invalidity or unenforceability pursuant to 21 U.S.C. § 355 (j)(2)(A)(vii)(IV) and 21 C.F.R. § 314.94(a)(12)(i)(A)(4); provided, however, XXXXX , IMPAX shall submit to the FDA, with a copy to the Purdue Companies, XXXXX . 4. Registration . IMPAX will be responsible for, and will bear all costs involved in respect of, the registration of the IMPAX Product with any governmental regulatory agencies.
14
5. WARRANTY DISCLAIMER . EXCEPT AS EXPRESSLY SET FORTH IN THIS SUPPLEMENTAL LICENSE AGREEMENT, THE PLA OR IN THE SETTLEMENT AGREEMENT, NEITHER PARTY NOR THEIR AFFILIATES MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT, INCLUDING WITHOUT LIMITATION (1) FOR THE PURDUE COMPANIES, WITH RESPECT TO THE PURDUE PATENTS OR ANY LICENSE GRANTED BY ANY OF THE PURDUE COMPANIES HEREUNDER, OR (2) ANY MATERIALS OR INFORMATION PROVIDED BY SUCH PARTY OR ANY OF ITS AFFILIATES UNDER THIS SUPPLEMENTAL LICENSE AGREEMENT, THE PLA OR THE SETTLEMENT AGREEMENT, OR (3) WITH RESPECT TO ANY PRODUCTS OR SERVICES OF EITHER PARTY HERETO OR THEIR AFFILIATES. FURTHERMORE, UNLESS EXPRESSLY STATED IN THIS SUPPLEMENTAL LICENSE AGREEMENT, THE PLA OR IN THE SETTLEMENT AGREEMENT, NOTHING IN THIS SUPPLEMENTAL LICENSE AGREEMENT, THE PLA OR THE SETTLEMENT AGREEMENT SHALL BE CONSTRUED AS A WARRANTY THAT ANY PATENT, THE PRACTICE OF ANY INVENTION CLAIMED IN ANY PATENT OR OTHER PROPRIETARY RIGHTS INCLUDED IN THE PURDUE PATENTS OR ANY LICENSE GRANTED BY ANY OF THE PURDUE COMPANIES DO NOT, OR THE MAKING, HAVING MADE, USING, SELLING, OFFERING FOR SALE OR IMPORTING OF IMPAX PRODUCTS BY IMPAX DOES NOT INFRINGE ANY PATENT RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY WHO IS NOT AN AFFILIATE OF THE PURDUE COMPANIES. IT IS
15
HEREBY AGREED AND ACKNOWLEDGED BY IMPAX THAT THE PURDUE COMPANIES ARE GIVING NO GUARANTEE OR WARRANTY, EXPRESS OR IMPLIED, TO IMPAX IN RELATION TO THE SAFETY OR THERAPEUTIC EFFECTIVENESS OF THE IMPAX PRODUCT. FURTHER, IMPAX WILL NOT OWE ANY SUCH GUARANTEE OR WARRANTY TO ANY THIRD PARTIES ON BEHALF OF THE PURDUE COMPANIES. 6. Bankruptcy . The Supplemental License is, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title XI of the Bankruptcy Code, a license of rights to “intellectual property” as defined in Section 101(56) of the Bankruptcy Code. 7. Indemnification . (a) IMPAX shall defend, indemnify and hold harmless the Purdue Companies, their Affiliates and the respective owners, directors, officers, agents and employees of each of them (collectively, the “Purdue Parties”), from and against any and all expenses, demands, liabilities, damages or money judgments (“Losses”) incurred by or rendered against the Purdue Parties resulting from (i) any claim, action or proceeding by any third party arising out of the making, use, offer for sale or sale of the IMPAX Product or any products previously made, used or sold under the IMPAX ANDA, (ii) any claim, action or proceeding by any third party arising out of any material breach by IMPAX of any of its representations, warranties, covenants or agreements made under this Supplemental License Agreement, and (iii) any breach by IMPAX of the third and fourth sentences of Section 2(a) of this Supplemental License Agreement; provided, however, that IMPAX will not be liable to indemnify the Purdue Parties for any Losses of the Purdue Parties to the extent such Losses were caused by (x) the negligence or willful misconduct or wrongdoing of the Purdue Parties or (y) any material breach by the Purdue Parties of their representations, warranties, covenants or agreements under this
16
Supplemental License Agreement and provided, further, that IMPAX’s maximum liability for claims made (other than claims based on willful misconduct) by the Purdue Companies under Section 7(a)(ii) with respect to claims made XXXXX and for claims made (other than claims based on willful misconduct) by the Purdue Companies under Section 7(a)(iii), shall be limited to the greater of (A) XXXXX and (B) $ XXXXX shall be increased by a percentage equal to the amount of any announced percentage increase in XXXXX by the Purdue Companies subsequent to the Signing Date (the greater of such amounts, the “Aggregate Gross Margin”), determined in accordance with United States generally accepted accounting principles, consistently applied (and derived from IMPAX’s audited financial statements to the extent possible), without duplication for any amounts paid to the Purdue Companies by IMPAX pursuant to the limitation on liability provided for in the proviso to Section 7(a) of the PLA. In the event that the Purdue Companies object to a determination made by IMPAX as to the Aggregate Gross Margin in connection with a claim for indemnification made by the Purdue Companies hereunder, the Purdue Companies will have the right to engage a CPA Firm to conduct an audit of IMPAX for the purposes of confirming the Aggregate Gross Margin on substantially the same basis as in Section 2(c) hereof. The determination by the CPA Firm following such audit of Aggregate Gross Margin shall be final and binding on the Parties; provided, however, that IMPAX shall have the right, prior to such determination becoming binding upon the Parties, to make a presentation to the CPA Firm (which presentation shall be completed in one (1) business day) to ensure such CPA Firm has adequate information to make its determination; provided further that, the Purdue Companies may be present at such presentation and may make a presentation to the CPA Firm following the IMPAX presentation.
17
(b) The Purdue Companies shall defend, indemnify and hold harmless IMPAX, its Affiliates, and the respective directors, officers, agents and employees of each of them (together, the “IMPAX Parties”), from and against any and all Losses incurred by or rendered against the IMPAX Parties resulting from (i) any claim, action or proceeding by any third party arising out of the sale by the Purdue Companies of their controlled-release oxycodone product, including the product OxyContin® and (ii) any claim, action or proceeding by any third party arising out of the Purdue Companies’ material breach of any of their representations, warranties, covenants or agreements made under this Supplemental License Agreement; provided, however, that the Purdue Companies will not be liable to indemnify IMPAX for any Losses of IMPAX to the extent such Losses were caused by: (x) the negligence or willful misconduct or wrongdoing of IMPAX or (y) any material breach by IMPAX of its representations, warranties, covenants or agreements under this Supplemental License Agreement. The provisions of this Section 7 shall not apply to any claims made by either Party or by third parties under Federal or state antitrust or unfair competition laws. 8. Purdue Companies ’ Representations and Warranties; Covenant Not to Sue . (a) The Purdue Companies hereby represent and warrant as of the date hereof that: (i) each of them has all necessary partnership or corporate, as applicable, power and authority to execute and deliver this Supplemental License Agreement and to perform its obligations hereunder, and that the execution, delivery and performance of this Supplemental License Agreement have been duly and validly authorized by each of them; (ii) upon execution and delivery of this Supplemental License Agreement by each of the Purdue Companies, this Supplemental License Agreement shall constitute the legal, valid and binding agreement of each of them, enforceable against each of them in accordance with its terms, subject to bankruptcy,
18
insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally and other general equitable principles which may limit the right to obtain certain remedies; (iii) neither the execution, delivery and performance of this Supplemental License Agreement nor the consummation or performance of this Supplemental License Agreement by the Purdue Companies shall contravene, conflict with or result in any material violation or material breach, as the case may be, of any law applicable to the Purdue Patents or any material contract to which the Purdue Companies are a party; (iv) the Purdue Companies, their Affiliates and any purchaser acquiring the Purdue Patents in compliance with the Settlement Documents, collectively own all right, title and interest in and to each and every patent and/or patent application within the Purdue U.S. Patent Family, and have not granted or otherwise transferred to any third party any right to enforce any patent or patent applications included in the Purdue U.S. Patent Family, or any right to practice any patent or patent application included in the Purdue U.S. Patent Family that would conflict with the Supplemental License granted to IMPAX hereunder; (v) as of the Signing Date, the licenses granted to XXXXX , respectively, are the only licenses or options to license to the Purdue Patents granted by the Purdue Companies for the sale in the United States of any 10 mg, 20 mg, 40 mg or 80 mg controlled-release oxycodone product that is (A) an AB rated generic version of OxyContin® as described in NDA No. 20-553, together with all amendments and supplements thereto or (B) an authorized generic approved pursuant to NDA No. 20-553, together with all amendments and supplements thereto, and (vi) as of the Signing Date, to its knowledge, Purdue had not received any notice of certification pursuant to 21 C.F.R § 314.94(a)(12)(i)(A)(4) for any AB rated generic version of Oxycontin® as described in NDA No. 20-553, together with all
19
amendments and supplements thereto from any third party other than XXXXX . The Purdue Companies also represent and warrant to IMPAX that any violation or breach of this Supplemental License Agreement by IMPAX may cause the Purdue Companies to suffer substantial damages and irreparable harm, including causing the Purdue Companies to be in violation or breach of, or severely disadvantaged under, certain material agreements the Purdue Companies have entered into with third parties, provided however, that the Purdue Companies acknowledge and agree that IMPAX has not been provided a copy of such agreements nor an opportunity to review such agreements. (b) The Purdue Companies hereby covenant that neither they, nor any of their Affiliates will sue, assert any claim or counterclaim against or otherwise participate in any action or proceeding in the United States against IMPAX or its Affiliates claiming that the manufacture, use, sale, offer for sale or importation of IMPAX Product pursuant to the Supplemental License, between the Commencement Date and the Supplemental License Termination Date, infringes any patents owned, licensed or controlled by the Purdue Companies or their Affiliates. Moreover, if and only if (1) IMPAX does not breach Section 2(a) hereof, (2) XXXXX , and (3) IMPAX manufactures, uses, sells, offers for sale or imports XXXXX thereafter, then the Purdue Companies hereby covenant that neither they nor any of their Affiliates will sue, assert any counterclaim against or otherwise participate in any action or proceeding against IMPAX or its Affiliates in the United States claiming that the manufacture, use, sale, offer for sale or importation of XXXXX by virtue of paragraph 5(a)(B) of the Settlement Agreement; provided, however, XXXXX . These covenants not to sue shall be non-transferable (except as provided in Section 12 of this Supplemental License Agreement). Nothing in this Section shall be interpreted
20
to prohibit the Purdue Companies from (i) suing, asserting any claim or counterclaim against or otherwise participating in any action or proceeding against IMPAX with respect to any formulations of oxycodone (other than the activities permitted pursuant to the Supplemental License or other than the covenants granted in the first and second sentences of this Section 8(b)), or (ii) enforcing this Supplemental License Agreement, the Settlement Agreement, the PLA or the Consent Judgment. Notwithstanding any provision herein to the contrary, this Section does not apply to, negate, or in any way limit any legal rights which the Purdue Companies may have relating in any manner to claims regarding any patents against owners, holders, licensees or beneficiaries of an ANDA (other than the manufacture, use, sale, offer for sale or importation of IMPAX Product under clause (i) of the immediately preceding sentence of this Section 8(b)) approved by, or submitted before or after the date of this Supplemental License Agreement to, the FDA for a controlled-release oxycodone product that is an AB rated generic version of OxyContin® (oxycodone hydrochloride controlled-release) Tablets under NDA No. 20-553, together with all amendments and supplements thereto, regardless of whether such ANDA owner, holder, licensee or beneficiary is or would otherwise be a manufacturer, supplier, importer, distributor, purchaser or user of the IMPAX Product. The Purdue Companies further acknowledge that (1) the appropriate remedy for breach of this Section 8(b) by the Purdue Companies is immediate dismissal, with prejudice of any patent infringement action brought in breach of this Section 8(b); (2) time is of the essence in dismissing any action brought in breach of this Section 8(b); and (3) that any available form of expedited relief to have the dismissal granted and/or considered on appeal, including but not limited to, a motion for hearing on shortened time, shall be appropriate in the event any of the Purdue Companies brings an action in violation of this Section 8(b). The Purdue Companies further agree not to oppose, directly or
21
indirectly, any motion to dismiss an action brought in breach of this Section 8(b) and not to oppose any request for expedited ruling on such motion to dismiss. (c) The Purdue Companies hereby covenant that between the Commencement Date and the Supplemental License Termination Date neither they, nor any of their Affiliates, will file, assist (directly or indirectly) in the filing of, cause any other person (directly or indirectly) to file, participate (directly or indirectly) in, or otherwise assist (directly or indirectly) XXXXX ; provided that IMPAX has been in full compliance with the provisions of the fourth, fifth and sixth sentences of Section 2(a) of the PLA. The Purdue Companies further acknowledge that Impax would suffer substantial and irreparable harm from their breach of this covenant, that Impax would not have an adequate remedy at law for such breach, and that a temporary restraining order, preliminary injunction, and/or permanent injunction requiring XXXXX would be an appropriate remedy for such breach. 9. IMPAX ’s Representations and Warranties . (a) IMPAX hereby represents and warrants as of the date hereof that: (i) it has all necessary corporate power and authority to execute and deliver this Supplemental License Agreement and to perform its obligations hereunder, and that the execution, delivery and performance of this Supplemental License Agreement have been duly and validly authorized by it; (ii) upon execution and delivery of this Supplemental License Agreement by IMPAX, this Supplemental License Agreement shall constitute the legal, valid and binding agreement of IMPAX, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforceability of creditors’ rights generally and other general equitable principles which may limit the right to obtain certain remedies; (iii) neither the execution, delivery and performance by IMPAX of this Supplemental
22
License Agreement nor the consummation or performance of this Supplemental License Agreement by IMPAX shall contravene, conflict with or result in any material violation or material breach, as the case may be, of any law applicable to IMPAX or any material contract to which IMPAX is a party; (iv) no party other than IMPAX and DAVA is authorized to ship items from IMPAX’s warehouse; and (v) IMPAX has not solicited offers for, offered to sell, sold, shipped or caused to be shipped IMPAX Product into interstate commerce for commercial sale in the United States between the License Termination Date and the Commencement Date. 10. Termination . In the event of a material breach by IMPAX of this Supplemental License Agreement or the Settlement Agreement, the Purdue Companies will have the right to terminate this Supplemental License Agreement upon written notice to IMPAX, such termination to take effect immediately upon the delivery of such notice to IMPAX. 11. DAVA Breach Event . Notwithstanding anything to the contrary contained in this Supplemental License Agreement (except for liability in respect of Excess Sales in Section 2(b) hereof), including without limitation the last sentence of Section 2(b) hereof, IMPAX shall not be deemed to have breached this Supplemental License Agreement to the extent that such breach has resulted solely from the actions (or inactions) of DAVA under the DAVA Supply Agreement that were not directly or indirectly taken (or not taken) at the direction of IMPAX, or in any way suggested, encouraged or expressly or tacitly approved of, authorized, waived or released by IMPAX (any such event, a “DAVA Breach Event”), provided that IMPAX shall have complied with each of the following: (i) Within two days of the Commencement Date, IMPAX shall have delivered a written notice to DAVA and DDN/Obergfel Pharmaceutical Logistics (“DDN”), in a form reasonably acceptable to the Purdue Companies, notifying such
23
persons of the Supplemental License Termination Date, that such persons will be prohibited from selling, offering for sale, making customer solicitations or shipping IMPAX Product from and after such date, that any rights granted to DAVA under Section 1(d) will have expired, and, with respect to DAVA only, of IMPAX’s intention to pursue all available legal and equitable remedies against DAVA to the extent that DAVA takes any such actions from and after such date, including the sale, offer for sale, distribution or shipment of IMPAX Product. (ii) Upon the earlier of (A) any time during the period commencing on the 5th business day preceding the Supplemental License Termination Date and ending on the 2nd business day preceding the Supplemental License Termination Date and (B) if this Supplemental License Agreement is terminated by the Purdue Companies under Section 10 hereof, within two business days of receipt of a written request from the Purdue Companies after the Supplemental License Termination Date, IMPAX shall have delivered a written notice to DAVA and DDN in the same form as the notice provided under clause (i) above, notifying such persons of the Supplemental License Termination Date, that such persons will be prohibited from selling, offering for sale, making customer solicitations or shipping IMPAX Product from and after such date, that any rights granted to DAVA under Section 1(d) will have expired, and, with respect to DAVA only, of IMPAX’s intention to pursue all available legal and equitable remedies against DAVA to the extent that DAVA takes any such actions from and after such date, including the sale, offer for sale, distribution or shipment of IMPAX Product. (iii) IMPAX shall have used its best efforts to cause DAVA to deliver the certifications required by Section 2(a) hereof.
24
(iv) If the Supplemental License Termination Date shall have occurred, IMPAX shall have delivered a written notice to DAVA within two business days thereafter requesting that any IMPAX Product then in DAVA’s possession or control promptly be returned to IMPAX, at IMPAX’s expense. (v) IMPAX shall forward copies of the notices referred to in clauses (i), (ii) and (iv) above to the Purdue Companies in the manner provided in Section 16 within two business days of the sending of each such notice. (vi) If a DAVA Breach Event shall have occurred, IMPAX shall pursue any and all legal and equitable remedies it may have against DAVA in connection with the facts and circumstances giving rise to such event, and shall allow the Purdue Companies to participate in any action or claim that it makes and/or asserts against DAVA in relation thereto at IMPAX’s expense (including any expense incurred by the Purdue Companies for the retention of its own counsel in connection with such matter). Any recoveries made against DAVA in accordance with this Section 11 shall be for the benefit of, and be promptly paid by IMPAX to, the Purdue Companies. (vii) IMPAX shall have monitored DAVA’s inventory levels of IMPAX Product prior to the Supplemental License Termination Date as reported to IMPAX under and in a manner consistent with the DAVA License Agreement and via any other lawful method reasonably available to IMPAX, and shall have taken steps reasonably calculated to ensure, based on such information, that IMPAX Product is not supplied to DAVA in an amount that is reasonably anticipated to have resulted in Excess Sales, and to minimize the inventory of IMPAX Product in DAVA’s possession or control as of the Supplemental License Termination Date.
25
12. No Assignment . This Supplemental License Agreement is binding upon and shall inure to the benefit of each Party hereto and each of its successors and permitted assigns. IMPAX may not assign (by way of merger, acquisition, statute, operation of law or otherwise) this Supplemental License Agreement (an “Assignment”) without the prior written consent of the Purdue Companies which may be withheld in the Purdue Companies’ sole discretion; provided, however, that the Purdue Companies’ consent shall not be required if such Assignment is part of the transfer of all or substantially all of IMPAX’s assets or all of the equity or capital stock of IMPAX; provided that such assignee is bound by and subject to the Settlement Agreement. Any Assignment, attempted Assignment or assignment of the rights granted hereunder, by IMPAX, in contravention of the provisions of this Section 12 shall be void and shall have no force or effect In the event that any of the Purdue Companies (or any of their respective successors and assigns) sells or assigns (other than in connection with the grant of a security interest) any of the Purdue Patents to any other person or entity, such person or entity shall agree to assume the obligations of such Purdue Company under this Supplemental License Agreement in writing as a condition to such acquisition. 13. Entire Agreement . This Supplemental License Agreement, along with the PLA, the Settlement Agreement and the documents referred to herein and therein, set forth the entire agreement and understanding among the Parties hereto as to the subject matter hereof and supersede all other documents, oral consents or understandings, if any, made between the Purdue Companies and IMPAX (excluding any agreements or stipulations endorsed by court order) before the Commencement Date with respect to the subject matter hereof. None of the terms of this Supplemental License Agreement shall be amended or modified except in a writing signed by each of the Parties hereto. To the extent there is an inconsistency between any provisions of
26
this Supplemental License Agreement and the Settlement Agreement, the provisions of the Settlement Agreement shall govern. The Parties acknowledge that there have been a number of drafts of this Supplemental License Agreement exchanged between them prior to the Parties’ agreement on the final version of the Supplemental License Agreement which has been executed by them. The Parties expressly agree that all such prior drafts have been superseded by this executed Supplemental License Agreement and shall not be used in any dispute between the Parties as evidence with respect to interpreting the meaning of any provision of this Supplemental License Agreement. 14. Enforceability . Any term or provision of this Supplemental License Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability, without rendering invalid or unenforceable the remaining terms and provisions of this Supplemental License Agreement in such jurisdiction or in any other jurisdiction. 15. Governing Law . This Supplemental License Agreement, and the rights and obligations created hereunder, shall be governed by and interpreted according to the substantive laws of the State of New York without regard to its choice of law or conflicts of law principles. 16. Notices . Any notice required under this Supplemental License Agreement shall be in writing and shall be given (and shall be deemed to be duly given upon receipt) by delivery in person, by facsimile or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified by like notice): If to any of the Purdue Companies: Purdue Pharma L.P. One Stamford Forum 201 Tresser Boulevard
27
Stamford, CT 06901-3431 Attn: Howard R. Udell Executive Vice President Chief Legal Officer Fax No.: (203) 588-6204 with a copy to: Chadbourne & Parke LLP 30 Rockefeller Plaza New York, NY 10112 Attn: Stuart D. Baker Fax No.: (212) 489-7130 If to IMPAX: IMPAX Laboratories, Inc. 30831 Huntwood Avenue Hayward, CA 94544 Attn: Chief Executive Officer Fax No.: (510) 471-1595 with a copy to: IMPAX Laboratories, Inc. 30831 Huntwood Avenue Hayward, CA 94544 Attn: Legal Department Fax No.: (510) 476-2092 17. Effect of Waiver . A waiver by any Party of any term or condition of this Supplemental License Agreement in any one instance shall not be deemed or construed to be a waiver of such term or condition for any other instance in the future (whether similar or dissimilar) or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this Supplemental License Agreement shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking, obligation or agreement of any of the Parties. 18. Legal Advice; Investigation . Each of the Parties agrees that it has received independent legal advice from its attorneys with respect to the rights and asserted rights arising
28
out of this Supplemental License Agreement, the PLA and the Settlement Agreement. Each of the Parties further agrees that it and its counsel have had adequate opportunity to make whatever investigation or inquiry they may deem necessary or desirable in connection with the subject matter of this Supplemental License Agreement, prior to the execution hereof. 19. Counterparts . This Supplemental License Agreement may be executed in counterparts (including by facsimile or other electronic transmission), and each fully executed counterpart shall be deemed an original of this Supplemental License Agreement. 20. Definitions . All capitalized terms used herein and not defined shall have the meanings specified in the PLA or in the Settlement Agreement. The definitions of the terms herein apply equally to the singular and plural of the terms defined. Whenever the context may require, any pronoun will include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” will be deemed to be followed by the phrase “without limitation.” Unless the context requires otherwise, (A) any definition of or reference to any agreement, instrument or other document herein will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein) and (B) the words “herein,” “hereof” and “hereunder,” and words of similar import, will be construed to refer to this Supplemental License Agreement in its entirety and not to any particular provision hereof.
[remainder of this page intentionally left blank]
29
Supplemental License Agreement Signature Page IN WITNESS WHEREOF, each of the Parties has caused this Supplemental License Agreement to be executed as of the date first written above by its duly authorized officer or agent.
PURDUE PHARMA L.P.
By: Purdue Pharma Inc., its general partner
By: /s/ Edward Mahoney Name: Ed Mahoney Title: EVP & CFO
THE P.F. LABORATORIES, INC.
By: /s/ Edward Mahoney Name: Ed Mahoney Title: EVP & CFO
PURDUE PHARMACEUTICALS L.P.
By: Purdue Pharma Inc., its general partner
By: /s/ Edward Mahoney Name: Ed Mahoney Title: EVP & CFO
IMPAX LABORATORIES, INC.
By: /s/ David S. Doll Name: David S. Doll Title:
Schedule 1
SUPPLEMENT LICENSE AMOUNT
(a) XXXXX Bottles
Description Number of Bottles 10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(b) XXXXX Bottles
Description Number of Bottles 10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(c) XXXXX Bottles
Description Number of Bottles 10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(d) XXXXX Bottles
Description Number of Bottles 10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(e) XXXXX Bottles
Description Number of Bottles 10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(f) Additional Bottles
Percentage of Supplemental Description License Amount 10 mg 100 ct XXXXX % 20 mg 100 ct XXXXX % 40 mg 100 ct XXXXX % 80 mg 100 ct XXXXX %
32 EXHIBIT 10.19 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
SUBLICENSE AGREEMENT This Sublicense Agreement (the “Agreement”), effective as of March 30, 2007 (the “Effective Date”), is by and between DAVA Pharmaceuticals, Inc., a Delaware corporation (“DAVA”), and IMPAX Laboratories, Inc., a Delaware corporation (“IMPAX”). WHEREAS, IMPAX and DAVA are parties to that certain Supply and Distribution Agreement dated as of November 3, 2005, as amended to date (the “Supply Agreement”) by which IMPAX appointed DAVA as its exclusive distributor of the Products in the Territory and agreed to supply the Products to DAVA in accordance with the terms of the Supply Agreement. WHEREAS, the Supply Agreement provides that IMPAX may suspend its obligations with respect to the supply of the Products under the Supply Agreement in the event of a settlement of litigation regarding the Products with Purdue; WHEREAS, IMPAX has entered into a Settlement with Purdue (the “Purdue Settlement”), pursuant to which (1) IMPAX admitted that its manufacture and sale of the Products infringe Purdue’s patents and that said patents are valid and enforceable; (2) Purdue and IMPAX entered into a Patent License Agreement dated March 30, 2007 (the “Patent License Agreement”), pursuant to which Purdue has granted IMPAX a license to manufacture and sell, with a right to sublicense to DAVA the right to sell, XXXXX bottles of the Product, from March 1, 2007 through June 14, 2007; and (2) IMPAX and Purdue agreed to enter into a Supplemental License Agreement (the “Supplemental License Agreement”) pursuant to which Purdue will grant IMPAX a license to manufacture and sell, with a right to sublicense to DAVA the right to sell, at least XXXXX and not more than XXXXX bottles of the Product from on or about November 27, 2007 through the termination of such Supplemental License Agreement; and WHEREAS, IMPAX desires to sublicense its license rights under the Patent License Agreement to DAVA, and to agree to sublicense its license rights under the Supplemental License Agreement to DAVA, all on the terms and conditions set forth in this Agreement; NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
1. DEFINITIONS . 1.1 “Branded Product” means OxyContin® (oxycodone hydrochloride controlled-release) tablets, under NDA number 20-553, together with all amendments and supplements thereto. 1.2 “Distribution Fee” shall have the meaning set forth in Section 5 hereof.
1.3 “Patent License Effective Date” shall mean March 30, 2007. 1.4 “Patent License Termination Date” shall mean the earlier of (i) 11:59 p.m., New York City time on June 14, 2007 and (ii) the date upon which the Patent License Agreement is terminated. 1.5 “Supplemental License Effective Date” shall mean November 27, 2007, subject to change to an earlier date by Purdue with IMPAX’s consent. 1.6 “Supplemental License Period” shall mean the period between the Supplemental License Effective Date and the Supplemental License Termination Date. 1.7 “Supplemental License Termination Date” shall mean the earlier of (i) 11:59 p.m., New York City time on January 29, 2008 as such time may be extended pursuant to the terms of the Supplemental License Agreement and (ii) the date upon which the Supplemental License Agreement is terminated. 1.8 “Supply Resumption Date” shall mean the date, following the Supplemental License Termination Date, on which IMPAX is permitted, by the terms of the Settlement or by virtue of the expiration, invalidity or unenforceability of Purdue’s patents related to the Branded Product, to resume manufacture and sale of the Product. 1.9 Capitalized terms not otherwise defined herein shall have the meaning given to them in the Supply Agreement.
2. SUPPLY . 2.1 During the Term of this Agreement, the supply of Product by IMPAX to DAVA under the Supply Agreement shall be subject to the terms of this Agreement. IMPAX’s obligation under the Supply Agreement to supply Product to DAVA shall be suspended from the Patent License Termination Date until the Supplemental License Effective Date and from the Supplemental License Termination Date until the Supply Resumption Date.
3. PATENT SUBLICENSE . 3.1 IMPAX hereby grants to DAVA an exclusive, royalty-free, non-transferable sublicense of limited duration of IMPAX’s license rights granted under the Patent License Agreement (“Patent Sublicense”) to offer to Sell, Sell and distribute not more than that number of bottles of the Product each containing 100 tablets (“Bottles”) equal to the difference between (i) XXXXX minus (ii) the number of Bottles sold by DAVA from March 1, 2007 through March 29, 2007 (the “License Amount”), allocated among dosage strengths as set forth in Section 3.2 below in the United States during the period commencing on the Patent License Effective Date and terminating upon the Patent License Termination Date. IMPAX shall use commercially reasonable efforts to manufacture XXXXX Bottles for Sale by DAVA during the period commencing March 1, 2007 and ending on the Patent License Termination Date. The terms “Sell,” “Selling” or “Sold,” for purposes of Sections 3 and 4 of this Agreement, mean selling and shipping by DAVA or any party acting on its behalf to a third-party bona fide purchaser for commercial sale.
2
3.2 The Bottles Sold by DAVA from March 1, 2007 through the Patent License Termination Date shall be allocated according to dosage strength such that the quantity of Bottles Sold of each dosage strength shall not vary by more than twelve and one half percent (12.5%) from the number of Bottles set forth next to each dosage strength on Schedule 1 hereto; provided, that variations, in the aggregate, may not increase the License Amount or increase the XXXXX . 3.3 All rights granted to DAVA under the Patent Sublicense will terminate on the Patent License Termination Date. From and after the Patent License Termination Date until the Supply Resumption Date, except as otherwise expressly provided in Section 4 hereof, DAVA shall not solicit offers for, offer to sell, sell, ship or cause to be shipped or distribute or indemnify others regarding or participate in profits of others arising from the sale of the Products. Within ten (10) Business Days following the License Termination Date, DAVA will deliver to IMPAX a certificate of the Chief Financial Officer of DAVA certifying (i) the number of Bottles of each dosage strength sold by DAVA from March 1, 2007 through the License Termination Date; (ii) that no sales resulting in sales above the License Amount were made by DAVA prior to the License Termination Date; and (iii) that all inventories of the Products in DAVA’s possession or control and remaining on the Patent License Termination Date have been quarantined or returned to IMPAX. The foregoing notwithstanding, DAVA shall not be in default of this Section 3.3 if, despite using its commercially reasonable efforts, DAVA has not received sufficiently specific information from DDN Pharmaceutical Logistics to provide the certification described in subsection (i) of the preceding sentence within such 10 Business Days, in which case it shall provide such certification as soon as it is in possession of such information. 3.4 Should DAVA (or any other party acting on its behalf) ship any Products into interstate commerce for commercial sale in the United States in excess of the Licensed Amount or after the Patent License Termination Date but prior to the Supply Resumption Date except pursuant to Section 4 (in either case, “Excess Sales”), and to the extent that IMPAX is required under the Patent License Agreement to pay Purdue such amount with respect to such Excess Sales, IMPAX shall have the right to receive from DAVA, and DAVA agrees to promptly pay to IMPAX (without any waiver or offset by IMPAX of any right to further damages), an amount equal to $ XXXXX of Excess Sales sold, which is the amount IMPAX would be required to pay Purdue under the Patent License Agreement; provided, however , that the XXXXX payable by DAVA shall be increased by a percentage equal to the amount of any announced percentage increase in the price of the wholesale acquisition cost of the Branded Product by Purdue. If an independent certified public accounting firm (a “CPA Firm”) chosen by Purdue under the Patent License Agreement conducts an audit of IMPAX for the purposes of confirming that no sales of the Products resulted in Excess Sales, DAVA shall make its books and records available at DAVA’s offices in Fort Lee, New Jersey for a period of no more than two (2) Business Days to such CPA Firm upon seven (7) Business Days prior notice from IMPAX and at all reasonable times on Business Days for the purpose of reporting to Purdue and IMPAX that no sales of the Products resulted in Excess Sales. Prior to any such examination taking place, the CPA firm shall commit in writing to DAVA, in an agreement of form and substance reasonably acceptable to DAVA, to keep all information and data contained in such books and records strictly confidential and shall not disclose such information or copies of such books and records to any third person, including Purdue, but shall use the same only for the purpose of the reviews and/or calculations that the CPA Firm needs to perform in order to confirm that no sales of the Products resulted in
3
Excess Sales. Notwithstanding the foregoing, if the CPA Firm determines that sales of the Products resulted in Excess Sales, then Purdue shall be entitled to receive a full written report from the CPA Firm with respect to the findings. If the CPA Firm report shows that sales by DAVA resulted in Excess Sales, DAVA shall reimburse IMPAX for any amount IMPAX is required under the Patent License Agreement to pay to Purdue for the fees and expenses of the CPA Firm.
4. SUPPLEMENTAL PATENT SUBLICENSE . 4.1 Subject to IMPAX and Purdue having entered into the Supplemental License Agreement, IMPAX hereby grants to DAVA an exclusive, royalty-free, non-transferable sublicense of limited duration of Impax’s license rights granted under the Supplemental License Agreement (“Supplemental Patent Sublicense”) to offer to Sell, Sell and distribute XXXXX Bottles plus such additional Bottles as are determined pursuant to the Supplemental License Agreement (the “Supplemental License Amount”), allocated among dosage strengths as set forth in Section 4.2 below in the United States during the period commencing on the Supplemental License Effective Date and terminating upon the Supplemental License Termination Date. IMPAX shall notify DAVA within one (1) Business Days of becoming aware of (i) Bottles in excess of XXXXX being included within the Supplemental License Amount and (ii) any change in the Supplemental License Effective Date and Supplemental License Termination Date. 4.2 Notwithstanding anything to the contrary herein, if DAVA fails to comply with any instruction from IMPAX to cease sales of the Products, which instruction is mandated by the terms of the Purdue Settlement, the Patent License Agreement or the Supplemental License Agreement, then the Supplemental Patent Sublicense shall automatically terminate and DAVA shall have no further right to offer to Sell, Sell or distribute the Products, and shall have no right to any proceeds from sales of the Products, until the Supply Resumption Date. 4.3 The Bottles Sold by DAVA during the Supplemental License Period shall be allocated according to dosage strength such that the quantity of Bottles Sold of each dosage strength shall not vary by more than twelve and one half percent (12.5%) from the number of Bottles set forth next to each dosage strength on Schedule 2 hereto; provided , that variations, in the aggregate, may not increase the Supplemental License Amount or increase the XXXXX . 4.4 All rights granted to DAVA under the Supplemental Patent Sublicense will terminate on the Supplemental License Termination Date. From and after the Supplemental License Termination Date until the Supply Resumption Date, DAVA may not solicit offers for, offer to sell, sell, ship or cause to be shipped or distribute or indemnify others regarding or participate in profits of others arising from, the Products. Promptly after the Supplemental License Termination Date, DAVA shall follow the instructions of IMPAX to return or destroy, at IMPAX’s sole cost and expense, all inventories of the Products remaining in its possession or control, unless the Supply Resumption Date occurs prior to the Supplemental License Termination Date. Within ten (10) Business Days following the Supplemental License Termination Date, DAVA will deliver to IMPAX a certificate of the Chief Financial Officer of DAVA certifying (i) the number of Bottles of each dosage strength sold by DAVA during the Supplemental License Period; (ii) that all inventories of the Products remaining in DAVA’s possession or control on the Supplemental License Termination Date have been returned to
4
IMPAX or destroyed; and (iii) that no sales resulting in sales above the Supplemental License Amount were made by DAVA during the Supplemental License Period. The foregoing notwithstanding, DAVA shall not be in default of this Section 3.3 if, despite using its commercially reasonable efforts, DAVA has not received sufficiently specific information from DDN Pharmaceutical Logistics to provide the certification described in subsection (i) of the preceding sentence within such 10 Business Days, in which case it shall provide such certification as soon as it is in possession of such information. 4.5 Should DAVA (or any other party acting on its behalf) ship any Products into interstate commerce for commercial sale in the United States in excess of the Supplemental License Amount or after the Supplemental License Termination Date but prior to the Supply Resumption Date (in either case, “Excess Sales”), and to the extent that IMPAX is required under its Supplemental License Agreement with Purdue to pay Purdue such amount with respect to such Excess Sales, IMPAX shall have the right to receive from DAVA, and DAVA agrees to promptly pay to IMPAX (without any waiver or offset by IMPAX of any right to further damages), an amount equal to $ XXXXX of Excess Sales sold, which is the amount IMPAX would be required to pay Purdue under the Supplemental License Agreement; provided, however , that the XXXXX payable by DAVA shall be increased by a percentage equal to the amount of any announced percentage increase in the price of the wholesale acquisition cost of the Branded Product by Purdue. If a CPA Firm chosen by Purdue and reasonably acceptable to IMPAX conducts an audit of IMPAX for the purposes of confirming that no sales of the Products resulted in Excess Sales, DAVA shall make its books and records available to such CPA firm at DAVA’s offices in Fort Lee, New Jersey for a period of no more than two (2) Business Days upon seven (7) Business Days prior notice from IMPAX and at all reasonable times on business days for the purpose of reporting to Purdue and IMPAX that no sales of the Products resulted in Excess Sales. Prior to any such examination taking place, the CPA firm shall commit in writing to DAVA, in an agreement of form and substance reasonably acceptable to DAVA, to keep all information and data contained in such books and records strictly confidential and shall not disclose such information or copies of such books and records to any third person, including Purdue, but shall use the same only for the purpose of the reviews and/or calculations which the CPA Firm needs to perform in order to confirm that no sales of the Products resulted in Excess Sales. Notwithstanding the foregoing, if the CPA Firm determines that sales of the Products resulted in Excess Sales, then Purdue shall be entitled to receive a full written report from the CPA Firm with respect to the findings. If the CPA Firm report shows that sales by DAVA resulted in Excess Sales, DAVA shall reimburse IMPAX for any amount IMPAX is required under the Supplemental License Agreement to pay to Purdue for the fees and expenses of the CPA Firm.
5. GROSS PROFIT SPLIT . 5.1 The Gross Profit Split under Section 5.3 of the Supply Agreement shall be applicable only to Product sales through the Patent License Termination Date and from and after the Supply Resumption Date and shall not be applicable to Product sales during the Supplemental License Period.
6. DISTRIBUTION FEE .
5
6.1 For Products sold during the Supplemental License Period IMPAX shall pay DAVA XXXXX % of Gross Margin (the “Distribution Fee”); provided, however , that to the extent that fewer than XXXXX Bottles are sold from March 1, 2007 through the License Termination Date, the Distribution Fee shall be equal to XXXXX % of Gross Margin. Gross Margin shall mean Net Sales minus Acquisition Price.
7. TERMINATION . 7.1 The term of this Agreement shall commence on the Effective Date and shall continue until the sooner to occur of the (i) Supply Resumption Date and (ii) the termination of the Supply Agreement (the “Term”).
8. REPRESENTATIONS, WARRANTIES AND COVENANTS . 8.1 IMPAX represents that, as of the Effective Date: (i) the Patent License Agreement is in full force and effect; (ii) subject to its compliance with the terms of the Patent License Agreement, IMPAX has the right to enter into the Supplemental License Agreement; (iii) IMPAX is not in default under the Patent License Agreement; (iv) IMPAX has the right and authority to enter into this Agreement and to grant the sublicenses granted hereunder to DAVA; and (v) the terms of Sections 3 and 4 hereof reflect, and are consistent in their entirety with, the terms of the Patent License Agreement and the form of Supplemental License Agreement that IMPAX and Purdue have agreed to enter into. If IMPAX receives any notice of default under either the Patent License Agreement or under the Supplemental License Agreement, which in IMPAX’s reasonable judgment is likely to result in the termination of either of those agreements, IMPAX will promptly notify DAVA. 8.2 IMPAX represents and warrants that (i) prior to DAVA’s entering into the letter agreement with IMPAX dated March 27, 2007 relating to the Purdue Settlement (the “Letter Agreement”), IMPAX disclosed to DAVA all facts concerning the Settlement that were material to DAVA’s decision to enter into the Letter Agreement and (ii) the Purdue Settlement includes no material changes or additions to the Settlement terms described in the second paragraph of the Letter Agreement.
9. WARRANTY DISCLAIMER . 9.1 EXCEPT AS EXPRESSLY SET FORTH HEREIN, IMPAX MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT WITH RESPECT TO THE PURDUE PATENTS OR ANY SUBLICENSE GRANTED BY IMPAX HEREUNDER. FURTHERMORE, UNLESS EXPRESSLY STATED HEREIN, NOTHING HEREIN SHALL BE CONSTRUED AS A WARRANTY THAT ANY PURDUE PATENT, THE PRACTICE OF ANY INVENTION CLAIMED IN ANY PURDUE PATENT OR OTHER PROPRIETARY RIGHTS INCLUDED IN THE PURDUE PATENTS OR ANY SUBLICENSE GRANTED BY IMPAX HEREUNDER DO NOT, OR THE SELLING, OFFERING FOR SALE, OR DISTRIBUTION OF THE PRODUCTS BY DAVA
6
DOES NOT, INFRINGE ANY PATENT RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY (OTHER THAN THOSE OF PURDUE).
10. INDEMNIFICATION . 10.1 DAVA shall defend, indemnify and hold harmless IMPAX, its Affiliates and their respective owners, directors, officers, agents and employees (together, the “IMPAX Parties”), from and against any and all expenses, demands, liabilities, damages or money judgments incurred by or rendered against the IMPAX Parties resulting from DAVA’s breach of any of its covenants or agreements made under this Agreement. 10.2 IMPAX shall defend, indemnify and hold harmless DAVA, its Affiliates and their respective owners, directors, officers, agents and employees (together, the “DAVA Parties”), from and against any and all expenses, demands, liabilities, damages or money judgments incurred by or rendered against the DAVA Parties resulting from IMPAX’s breach of any of its covenants, representations, warranties, or agreements made under this Agreement.
11. MISCELLANEOUS . 11.1 Except as set forth herein, all other terms and conditions of the Supply Agreement remain in full force and effect. In case of any inconsistency between the terms of this Agreement and the Supply Agreement, the terms of this Agreement shall prevail. 11.2 The validity and interpretation of this Amendment and the legal relations of the Parties to it shall be governed by the internal laws, and not the law of conflicts, of the State of Delaware. The parties acknowledge and agree not to contest that the courts of the State of Delaware have personal jurisdiction over them with respect to any action that may be taken hereunder, and venue shall lie in such courts as to any such action. 11.3 This Agreement, together with each Schedule attached hereto, states the entire understanding among the parties with respect to the subject matter hereof, and supersedes the Letter Agreement. 11.4 This Agreement may be signed in two counterparts, each of which shall be deemed an original and both of which shall together constitute one agreement.
7
DAVA PHARMACEUTICALS, INC. IMPAX LABORATORIES, INC.
By: /s/ Lewis Tepper By: /s/ David S. Doll
Printed Name: Lewis Tepper Printed Name: David S. Doll Title: Senior Vice President and Title: Executive Vice President, General Counsel Commercial Operations
Date: August 8, 2007 Date: August 7, 2007
8
SCHEDULE 1 ALLOCATION AMONG DOSAGE STRENGTHS DURING PATENT LICENSE PERIOD
Dosage Strength Number of Bottles 10 mg XXXXX 20 mg XXXXX 40 mg XXXXX 80 mg XXXXX
9
SCHEDULE 2 ALLOCATION AMONG DOSAGE STRENGTHS DURING SUPPLEMENTAL LICENSE PERIOD
(a) XXXXX Bottles
Dosage Strength Number of Bottles
10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(b) XXXXX Bottles
Dosage Strength Number of Bottles
10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(c) XXXXX Bottles
Dosage Strength Number of Bottles
10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(d) XXXXX Bottles
Dosage Strength Number of Bottles
10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
10
(e) XXXXX Bottles
Dosage Strength Number of Bottles
10 mg 100 ct XXXXX 20 mg 100 ct XXXXX 40 mg 100 ct XXXXX 80 mg 100 ct XXXXX
(f) Additional Bottles
Dosage Strength Percentage of Supplemental License Amount
10 mg 100 ct XXXXX % 20 mg 100 ct XXXXX % 40 mg 100 ct XXXXX % 80 mg 100 ct XXXXX %
11 EXHIBIT 10.20 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
PROMOTIONAL SERVICES AGREEMENT
DATE: As of January 19, 2006 PARTIES: (1) SHIRE US INC., having its place of business at 725 Chesterbrook Boulevard, Wayne, PA 19087 ( “ Shire ”); and
(2) IMPAX LABORATORIES, INC. , having its place of business at 30831 Huntwood Avenue, Hayward, CA 94544 ( “ Impax ”).
RECITALS (A) WHEREAS , Shire markets and distributes certain pharmaceutical products, including the Shire Product for the treatment of epilepsy.
(B) WHEREAS , Impax intends to market, sell and distribute the Impax Product.
(C) WHEREAS , Shire had determined that it requires a sales organization committed to high and legally compliant standards for the promotion of the Shire Product in the Territory.
(D) WHEREAS , Shire is willing to engage Impax and Impax desires to be engaged in the hiring and management of a Sales Force for the Shire Product in the Territory.
(E) WHEREAS , the Sales Force shall promote the Shire Product and the Impax Product in the Territory on the terms and conditions set out in this Agreement. NOW, THEREFORE , in consideration of the mutual covenants set out in this Agreement, and intending to be legally bound hereby, the Parties agree as follows.
Article 1 INTERPRETATION 1.1 Interpretation . In this Agreement, unless the context otherwise requires: (a) capitalized terms are given the meaning set out in Schedule 1;
(b) references to “persons” includes individuals, bodies corporate (wherever incorporated), unincorporated associations and partnerships;
(c) the headings are inserted for convenience only and do not affect the construction of the Agreement;
(d) references to one gender includes both genders; and
(e) any reference to an enactment or statutory provision is a reference to it as it may have been, or may from time to time be amended, modified, consolidated or re -enacted. 1.2 Inconsistency . The Schedules comprise part of and shall be construed in accordance with the terms of this Agreement. In the event of any inconsistency between the Schedules or any standard operating procedures used in the performance of the Services, the terms of this Agreement shall prevail.
Article 2 GRANT OF RIGHTS TO IMPAX 2.1 Engagement. Subject to the terms of this Agreement, Shire appoints Impax as its exclusive agent to provide the Services solely within the Territory.
2.2 Rights Reserved. Shire reserves the right (a) to promote the Shire Product itself within the Territory and to promote the Shire Product itself, or to grant to one or more third Parties the right to promote the Shire Product, outside the Territory, (b) to promote any products other than the Shire Product itself, or to grant to one or more Third Parties the right to promote any product other than the Shire Product, within and outside the Territory, in each case on such terms as Shire may elect and determine in its sole and absolute discretion.
Article 3 SHIRE RESPONSIBILITIES 3.1 Materials . During the Services Term, Shire, at Shire ’s expense, shall provide to Impax: (a) the Shire Materials;
(b) samples of the Shire Product, as determined by Shire in accordance with Section 3.2;
(c) documents relating to the alignment of the Sales Force with Shire ’s sales force;
(d) Shire Product sales data, Call List, Call Plan, physician validation, establishment and maintenance of Shire Product sampling procedures and strategies. The Quarterly Call Plan (and the timing of the Call Plan) shall be agreed to by the Parties. In the event that Shire seeks an amendment to the Call Plan, Shire shall provide Impax with reasonable notice of such amendment and the Parties shall, in good faith, discuss and agree upon the terms of such amendment, its method of implementation, and any increase in costs associated with the amendment; and
2
(e) the Compliance Training and the subsequent training as provided in Section 4.5, in each case subject to Impax bearing Sales Force expenses as set forth in Section 4.5. 3.2 Advertising and Promotional Activities. Shire shall expend at least $ XXXXX during each Services Year with respect to advertising and promotional activities (such activities to be of a similar kind and nature as those which Shire utilizes to advertise and promote its other products) for the Shire Product, such activities to be determined in Shire’s sole discretion, but shall be consistent with the activities which Shire had planned to undertake if it were not for the grant to Impax as provided in Section 2.1. In the event a Generic Product launches during the Services Term, the Parties shall meet to discuss in good faith an appropriate reduction to the amount Shire is obligated to expend on advertising and promotional activities. For clarification purposes, the cost of samples shall be included in the aforementioned amount to be expended by Shire on advertising and promotional activities.
3.3 Events and Clinical Studies . Shire shall not have any obligation to conduct clinical or non-clinical trials on the Shire Product, or initiate or participate in symposia, seminars, technical or scientific exhibits or other professional events with respect to the Shire Product; provided, however that Shire may in its sole discretion conduct any clinical or non-clinical trials it deems necessary or appropriate with respect to the Shire Product. Notwithstanding the foregoing, the Parties understand and agree that Impax shall not have any right to conduct clinical or non-clinical trials on the Shire Product, or without Shire’s consent, which consent shall not be unreasonably withheld, delayed or conditioned, initiate or participate in symposia, seminars, technical or scientific exhibits or other professional events with respect to the Shire Product.
3.4 Regulatory Responsibility . Shire shall have sole and exclusive authority over any regulatory matter relating to the Shire Product, including without limitation, any Shire Product label changes, responding to complaints regarding the Shire Product, reporting on adverse events, handling Shire Product returns and recalls and any communication with any Regulatory Authority. Impax shall promptly inform Shire upon becoming aware of any regulatory issue concerning the Shire Product and shall promptly provide Shire with copies of any correspondence Impax may receive from a Regulatory Authority relating to the Shire Product.
3.5 Safety Agreement . The Parties shall execute a Safety Agreement in the form attached in Schedule 5 at the same time as the execution of this Agreement.
3.6 Managed Care . Shire shall use commercially reasonable efforts to maintain the Shire Product on formularies of managed care customers consistent with the inclusion thereon of the Shire Product as of the Effective Date of this Agreement. The current formulary positions for the Shire Product are attached as Schedule 7.
3
Article 4 IMPAX RESPONSIBILITIES 4.1 Impax Personnel . Impax shall employ (or otherwise engage) and manage the Sales Force for the performance of the Services. As between Shire and Impax, all Sales Force members shall at all times remain employees of (or otherwise engaged by) Impax for all purposes, including without limitation, any federal, state and local tax and employment laws. The Sales Force shall remain under the authority and control of Impax.
4.2 Term of Services . Impax shall commence providing the Services as soon as practicable following the Effective Date of this Agreement, and shall commence carrying out Calls on or prior to July 1, 2006 (the date of such first Call to be referred to as the “ Detail Commencement Date ”). Impax shall continue providing the Services until the third anniversary of the Detail Commencement Date or the expiration of the Extension Period if Impax elects to extend the Services Term through June 30, 2009. Such election shall be made by written notice to Shire at least thirty (30) days prior to the third anniversary of the Detail Commencement Date if such anniversary would occur prior to June 30, 2009.
4.3 Initial Training . Upon receipt of the Shire Materials relating to product training for the Shire Product, Impax shall make the Sales Force available to Shire for initial product training for the Shire Product prior to commencing any marketing or promotion of the Shire Product, including without limitation, product training with respect to the marketing and promotion of the Shire Product in accordance with all applicable Laws ( “ Compliance Training ”).
4.4 New Hire Training . Impax shall make any new personnel hired (or otherwise engaged) by Impax after the Effective Date to join the Sales Force (“ New Hires ”) available to Shire for Compliance Training prior to commencing any sales or marketing of the Shire Product. Impax shall cooperate as reasonably necessary in arranging for such New Hires to receive such training.
4.5 Subsequent Training . Impax shall ensure that: (a) all Sales Force members receive Compliance Training (twice in each Services Year) or further training (as agreed upon by the Parties) in relation to the Shire Product at the Plan of Action ( “ POA ”) meetings;
(b) at least two (2) but not more than four (4) POA meetings are held during each year of the Services Term; and
(c) all Sales Force members are trained in accordance with Shire ’s Selling Skills Training Module. Impax shall cooperate as reasonably necessary in arranging for Sales Force members to attend the aforementioned training and meetings and shall bear any expenses incurred by any Sales Force members in attending such training and meetings (including, without limitation, expenses relating to travel, lodging and meals).
4
4.6 Training Certification . Impax covenants and warrants that the Sales Force members that have attended the Compliance Training shall certify at least once annually in writing that he or she shall comply with the PDMA and any other policies, procedures and Compliance Training provided by Impax or Shire. Impax shall maintain and have available for inspection by Shire (or its nominee) a record of such certification by each Sales Force member.
4.7 Incentive Compensation Plan and Management . Subject to Shire’s prior approval, which shall not be unreasonably withheld, delayed or conditioned, Impax shall implement an Incentive Compensation Plan which shall be communicated to the Sales Force prior to commencing promotion of the Shire Product. Impax shall not amend or modify the terms of the Incentive Compensation Plan without Shire ’s prior written approval, which approval shall not be unreasonably withheld, delayed or conditioned.
4.8 Sales Force . Impax shall not knowingly employ or otherwise retain or permit to be retained as a member of the Sales Force: (a) a practicing physician or a person affiliated on a professional level with or employed by any physician, physician practice or other healthcare professional or provider; or
(b) a person who may be in a position to unduly influence the purchase of the Shire Product. 4.9 Communications to Sales Force . All written communications from Impax to the Sales Force regarding strategy, positioning, safety, efficacy, labeling or promotion for the Shire Product are subject to the prior review and written approval of Shire, which approval shall not be unreasonably withheld, delayed or conditioned. For other material communications relating to the Shire Product, Impax shall provide Shire’s Principal Contact, within five (5) Business Days of transmission, complete copies or transcripts (if any exist) of such communications.
4.10 Impax Efforts . Impax shall: (a) diligently provide the Services in accordance with the terms of this Agreement and Shire’s reasonable directions. Such efforts shall not be less than those that Impax exerts to promote other products, even if the Services are, or may be, in competition with any other product or services being marketed or promoted by Impax or its Affiliates;
(b) ensure that those of its personnel whose decisions are necessary for the performance of the Services are available to Shire at all reasonable times upon reasonable notice for consultation on any matter relating to the Services;
(c) ensure that the Sales Force promotes the Shire Product either in the Primary Position Detail or the Secondary Position Detail as set forth in Schedule 3 (unless otherwise requested by Shire and agreed to by the Parties); and
5
(d) use commercially reasonable efforts to ensure that the Sales Force meets the targets set out in the Call Plan. 4.11 Use of Materials Provided by Shire . Impax covenants and warrants that: (a) except as otherwise set forth in this Agreement, it shall only use the Shire Materials for the provision of the Services and such use shall be in accordance with the terms of this Agreement, and shall not use the Shire Materials for the promotion of any product other than the Shire Product;
(b) it shall only use samples of Shire Product provided by Shire for the provision of the Services and such use shall be in accordance with the terms of this Agreement;
(c) the Shire Materials and Shire Product samples shall not be modified, changed, misbranded, altered or adulterated by Impax or the Sales Force at any time; and
(d) the Shire Materials and samples of Shire Product which are not used during the Services Term shall be returned to Shire as soon as reasonably practicable (and in no event later than sixty (60) days) after the earlier of the expiry of the Services Term or the termination of this Agreement. 4.12 Impax Product . Impax may elect to include the Impax Product (but not any other product) as the primary or secondary product in any Call it performs as part of the Services, subject to the Call Plan set forth on Schedule 3 and the terms and conditions of this Agreement.
Article 5 IMPAX ’S SALES FORCE 5.1 Impax ’s Sales Force . The Sales Force may consist of employees of Impax and/or persons employed by a CSO; provided that any such CSO shall be subject to the prior written approval of Shire, such approval not to be unreasonably withheld, delayed or conditioned. Impax shall ensure that prior to the deployment of any Sales Force member to make Calls, each member of the Sales Force shall execute agreements with Impax (if an employee of Impax) or with the applicable CSO (if an employee of such CSO), substantially in the form of Schedule 2, including appropriate language under which the individual agrees to maintain confidentiality of Confidential Information and agrees to perform his or her obligations hereunder in accordance with all Laws.
5.2 Trademark and Identification . To the extent necessary for Impax to identify itself as representing the Shire Product, Impax shall be entitled to use Shire’s company name and logo. The form of all Sales Force business cards and badges shall require advance written approval from Shire.
5.3 Background Checks . Impax shall be responsible for performing drug testing and background checks of all Sales Force members. Impax represents and warrants that it will complete or cause to be completed (with respect to sales representatives employed by
6
Impax or a CSO who become Sales Force members) a thorough background check of all Sales Force members to ensure that they have no felony convictions relating to the job responsibilities of such Sales Force members. Impax further represents and warrants that it will perform or cause to be performed (with respect to sales representatives employed by Impax or a CSO who become Sales Force members), background checks to confirm that no Sales Force member: (a) is an excluded person on the Office of Inspector General’s List of Excluded Individuals/Entities and is not on the General Services Administration Excluded Parties List; and
(b) is, so far as it is aware, an unfit or an improper individual for the performance of the Services. 5.4 Other Testing . Impax shall use commercially reasonable efforts to conduct, or cause to be conducted, additional background checks, consistent with Laws and Impax’s internal employment policies, on Sales Force members in an effort to ensure that such members have not been: (a) the subject of pending or threatened investigations or enforcement actions by any Regulatory Authority; or
(b) engaged in any fraudulent or unlawful activity, or other inappropriate conduct as measured by the other requirements of this Agreement. Notwithstanding anything in this Section 5.4 to the contrary, Impax shall conduct drug testing on the Sales Force members where there is a reasonable suspicion of the presence of substances of abuse or drug paraphernalia. Impax shall institute prompt corrective or disciplinary action against any Sales Force member who fails to meet the requirements set forth in this Section 5.4. Impax further agrees to cooperate and comply with all investigations by or on behalf of Shire with respect to wrongdoing, or alleged or suspected wrongdoing, in respect of any obligations of Impax or its Sales Force under this Agreement. With respect to any persons employed by a CSO, Impax shall cause such CSO to comply with the provisions of this Section 5.4 with respect to its employees who are Sales Force members. 5.5 Information to Shire . Impax shall promptly provide Shire with such information as is reasonably necessary (provided such disclosure is permitted by Law and in the possession of Impax) for Shire to ascertain its risk or liability, if any, resulting from Impax’s termination or removal of any Sales Force member or any CSO (or the termination or removal by any CSO of any employee thereof who is a Sales Force member).
5.6 Disciplinary Actions . Impax shall be solely responsible and liable for all disciplinary, probationary and termination actions taken by it (or by an applicable CSO with respect to an employee thereof who is a Sales Force member), and for the formulation, content and dissemination of all employment policies and rules (including written disciplinary, probationary and termination policies) applicable to its employees, contractors and Affiliates. Impax shall provide the Oversight Committee with monthly reports regarding
7
any probationary, corrective, preventative, termination or other employment actions taken by it with respect to its or its Affiliate’s employees, or taken by any CSO with respect to such CSO’s employees, engaged in the promotion, sale, sampling or marketing of the Shire Product. 5.7 Impax Employee Removal . Impax shall immediately remove any Sales Force member from the provision of Services with respect to the Shire Product if (a) such member breaches a material provision of the agreement referenced in Section 5.1 or fails any of the tests referenced in Sections 5.3 or 5.4; or
(b) subject to compliance with Impax’s human resource policies (in the case of a Sales Force member who is an employee of Impax), Shire in its sole discretion, desires the removal of such member. Shire shall not be liable for any costs associated with the removal of such Sales Force member. 5.8 Worker ’s Compensation Insurance . Impax shall obtain and maintain worker’s compensation insurance and other insurances required for the Sales Force (or ensure that such insurances are obtained and maintained by an applicable CSO) and acknowledges that Shire does not, and shall have no obligation to maintain such insurances, all of which (as between Impax and Shire) shall be Impax’s sole responsibility.
5.9 No Participation in Shire Benefit Plans . Impax acknowledges and agrees that the Sales Force members are not, and are not intended to be or be treated as, employees of Shire and that no such individual is, or is intended to be, eligible to participate in any benefits programs or in any Shire “employee benefit plans,” (as defined in Section 3(3) of ERISA) (“Shire Benefits Plan”). As between Impax and Shire, all matters of compensation, benefits and other terms of employment for any Sales Force member shall be the sole responsibility of Impax, including without limitation, the payment of all compensation and benefits under any such Impax employee benefit plan and under the Incentive Compensation Plan.
5.10 No Shire Liability . Shire shall have no responsibility to Impax or any Sales Force member for any compensation, expense reimbursements or benefits (including, without limitation, vacation and holiday remuneration, healthcare coverage or insurance, life insurance, pension or profit-sharing benefits and disability benefits), payroll-related or withholding taxes, or any governmental charges or benefits (including, without limitation, unemployment and disability insurance contributions or benefits and workers compensation contributions or benefits) that may be imposed upon or be related to the performance by Impax or any Sales Force member of the obligations under this Agreement, all of which (as between Impax and Shire) shall be the sole responsibility of Impax, even if it is subsequently determined by any court, the IRS or any other Regulatory Authority that such individual may be a common law employee of Shire.
5.11 Indemnification for Employee Reclassification . Impax shall indemnify, defend, and hold harmless Shire and its Affiliates and their respective directors, officers, employees
8
and contractors (each of the foregoing, a “ Shire Party ”) from and against any damages, liability, loss and costs, including but not limited to attorneys fees (collectively, “ Liability ”), that may be paid or payable by any such Shire Party resulting from any claim or other cause of action asserted by any Sales Force member, CSO or any other Third Party (including without limitation federal, state or local Regulatory Authorities) and based on or with respect to: (a) costs, damages and losses that Shire may incur resulting from any claims for benefits that any Sales Force member may make under or with respect to any Shire Benefits Plan;
(b) any payment or obligation to make a payment to any Sales Force member relating in any way to any compensation, benefits of any type under any employee benefit plan (as such term is defined Section 3(3) of ERISA), or any other bonus, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance and other similar fringe or employee benefit plans, programs or arrangements that may be sponsored at any time by Shire, even if it is subsequently determined by any court, the IRS or any other Regulatory Authority that any Sales Force member may be a common law or de facto employee of a Shire Party;
(c) the payment or withholding of any contributions, payroll taxes, or any other payroll-related item by or on behalf of Impax, CSO or any Sales Force member with respect to which Impax, CSO or any Sales Force member may be responsible hereunder or pursuant to applicable Law to pay, make, collect, withhold or contribute, even if it is subsequently determined by any court, the IRS or by any other Regulatory Authority that any Sales Force member may be a common law or dc facto employee of a Shire Party;
(d) failure of Impax to withhold or pay required taxes or failure to file required forms with regard to compensation paid to Impax by Shire and compensation and benefits paid or extended by Impax or CSO to the Sales Force; or
(e) any other liabilities which may arise as a result of a court, tribunal or other Regulatory Authority determination that any Sales Force member is a common law or de facto employee of any Shire Party or any other co -employment relationship is determined.
Article 6 CONTACT PERSONS AND OVERSIGHT COMMITTEE 6.1 Oversight Committee . Within 30 days after the Effective Date of this Agreement, the Parties shall create an Oversight Committee comprising three representatives from each Party to oversee the performance of the Services. Each Party may designate and change its representatives upon written notice to the other Party. Each Party shall also identify its Principal Contact on the Oversight Committee for exchanging information and
9
communicating its position regarding the day -to -day implementation and management of the obligations under this Agreement. 6.2 Oversight Committee Meetings . The Oversight Committee shall meet not less than once each Quarter unless otherwise agreed by the Parties. Meeting locations shall alternate between the offices of each Party, or as otherwise agreed by the Parties, and may also be conducted using telephonic or electronic means whereby each committee member in attendance is able to hear the others and view materials which are the subject of discussion. Each Party shall bear the costs and expenses of its designated members incurred in connection with the Oversight Committee meetings.
6.3 Oversight Committee Duties . The Oversight Committee shall be responsible for the following: (a) designing and implementing programs to encourage and improve cooperation between Shire and Impax with respect to maximizing sales of the Shire Product;
(b) reviewing the implementation of the Call Plan (developed by Shire) and the associated call frequency; and
(c) such other matters as the Parties agree from time to time. 6.4 Shire Approval . Notwithstanding anything contained in this Agreement, Shire shall have the sole right to make final decisions relating to any advertising, marketing material or promotion material, brand strategy and messaging relating to the Shire Product.
6.5 Senior Management . The SVP of Sales and Marketing of Impax and the EVP of Sales & Marketing North America of Shire, or their designees, shall meet on an annual basis, at a place and time to be agreed by the Parties, to discuss overall performance and strategy for the promotional activities performed hereunder.
Article 7 PAYMENTS 7.1 Consideration . In consideration of the performance of the Services, Shire shall pay Impax the Fees and other amounts payable to Impax as further described on Schedule 5. Impax shall provide Shire with an invoice each Quarter for the Fees and other amounts payable in accordance with Schedule 5. The invoice shall set out a short description of the Services provided and the amount due in respect of the Services. Impax shall pay to Shire any amounts that may be due with respect to Shortfall PDEs (if Shire does not elect a credit) as further described in Schedule 5.
7.2 Payment . Shire shall pay the amounts due under the relevant invoice within thirty (30) days after the date of receipt of the invoice. Upon request from Shire, Impax shall provide detailed documentary support for invoices submitted and Impax’s provision of such detailed documents shall not be treated as a Non-Standard Report. Impax shall maintain its records in accordance with GAAP. In the event of a dispute over any payment or portion of any payment for the provision of Services under this Agreement,
10
the Parties shall use commercially reasonable efforts to resolve such dispute as soon as commercially practicable after either Party provides notice to the other Party of such dispute. In the event Impax is required to pay Shire any amounts with respect to Shortfall PDEs, such amounts shall be due (if Shire does not elect a credit) within thirty (30) days after the expiration of the second Quarter following the applicable first or second Services Year, or the expiration of the final Services Year, as the case may be and as further described in Schedule 5. Shire shall pay to Impax within five (5) days following the effective date of an agreement between Impax and a CSO, as provided in Section 5.1, an amount equal to the implementation fees payable to the CSO, as well as other start-up fees that Impax may incur on its own, such as fees to recruit management, fees to purchase data necessary for territory alignment, and other reasonable fees incurred in the cost of implementing the Sales Force (collectively, referred to as the “ Advance Fees ”); provided, however, that Advance Fees are payable only to the extent that they are related to Impax’s promotion of the Shire Product. The Advance Fees that Shire shall pay to Impax cannot exceed $ XXXXX and can only be paid with respect to the first agreement that Impax enters into with a CSO. Shire shall recoup all Advance Fees paid to Impax on a prorated basis over the next two (2) Quarters of the Agreement, via a credit against amounts otherwise payable to Impax under this Section 7.2. 7.3 Electronic Funds Transfer (EFT). All payments due under this Agreement shall be made by EFT (automated clearing house) in the United States dollars and shall be delivered to the applicable Party ’s bank account as designated in writing to the other Party.
Article 8 REPORTS AND AUDIT 8.1 Shire Reports. Shire shall provide to Impax a written report(s) identifying the retail prescriptions for the Shire Product in the Territory for each Sales Force member, as determined by the Exponent Data issued by IMS, and the NPA data issued by IMS for the Shire Product in the Territory, in each case for the previous Quarter and as soon as practicable after Shire’s receipt of the corresponding information from IMS.
8.2 Impax Reports . Impax shall provide Shire with monthly raw data extracts of Call activity, Call data and attendance information in a form to be agreed between the Parties. In addition, Impax shall provide Shire within ten (10) days after the end of each month, a Sample delivery report for the prior month and the number and date of promotional program activities for the Shire Product for the relevant month.
8.3 Reports . The Parties shall maintain and preserve records and audit trails sufficient to confirm the information contained in such reports. Any reports prepared pursuant to this Section 8 shall be accurate and contain detail to the reasonable satisfaction of the Party receiving it.
8.4 Maintenance of Records . During the Term, and for a period of three (3) years thereafter, Impax shall, and shall procure that its Affiliates shall, keep at either its normal place of business (or at an off -site storage facility), detailed, accurate and up to date:
11
(a) records and books of account sufficient to confirm the calculation of the Fees and to identify any pass through costs and expenses; and
(b) information and data contained in any reports provided to the other Party in connection with this Agreement. 8.5 Inspection . During the Term, and for a period of three (3) years thereafter, on no less than five (5) Business Days notice from Shire, Impax shall make all such records, books of account, information and data (concerning this Agreement) available for inspection during normal business hours by Shire (or its nominee) for the purpose of general review or audit (but not more than once in any calendar year). Upon reasonable belief of discrepancy or dispute, Shire ’s external auditors shall be entitled to take copies or extracts from such records, books of account, information and data (but only to the extent related to the contractual obligations set out in this Agreement) during any review or audit provided the external auditor signs a confidentiality agreement with Impax providing that such records, books of account, information and data shall be treated as confidential information which may be disclosed to Shire.
8.6 Inspection Costs . Shire shall be solely responsible for its costs in making any such review and audit, unless Shire identifies a discrepancy in the Fee or the costs and expenses paid by Shire under this Agreement in any calendar year from those properly payable for that calendar year of five percent (5%) or greater, in which event Impax shall be solely responsible for the cost of such review and audit and refund Shire any overpayment. All information disclosed by Impax or its Affiliates pursuant to this Article 8 shall be deemed Confidential Information.
Article 9 SAMPLING 9.1 Sample Supply . Subject to Section 3.2 of this Agreement, Shire shall determine the sampling strategy (including determining which Call Plan Physicians are to receive samples) for, and Shire shall be responsible for providing Impax with samples of, the Shire Product for distribution in connection with performing the Services. Shire shall, in advance of each Shire Product shipment, inform Impax of the Shire Product lot numbers being shipped. The timing of such shipments and the quantities to be allocated to each Sales Force member shall be coordinated by Impax and in accordance with the sampling strategy developed by Shire.
9.2 Sample Storage . Impax represents and warrants that it and each member of the Sales Force have the necessary, secure and proper environment for the storage of samples of the Shire Product.
9.3 Use of Samples . Impax shall procure, either itself or through CSO, that the Sales Force shall: (a) only use samples of the Shire Product for sampling purposes directly in connection with the provision of the Services; and
12
(b) not resell, repackage, modify, deconstruct, reverse engineer or otherwise use samples of the Shire Product or its packaging in any other manner. 9.4 Records; Compliance; Reports . Impax shall itself, or through CSO, employ a program, including record keeping, for handling, storing, distributing and using samples of the Shire Product which shall comply with all applicable Law. Upon receipt of any shipment of samples of the Shire Product, Impax shall assume all risk in relation to such samples, including without limitation, responsibility for distributing, storing and using such samples in compliance with the PDMA and other applicable Laws. For purposes of complying with the foregoing, Shire designates Impax as an authorized distributor of samples of the Shire Product. During the Term and for a period of not less than three (3) years thereafter, on twenty-four (24) hours notice from Shire, Impax shall provide, or procure that its Affiliates provide, Shire (or its nominee) access to any records or reports relating to the receipt, storage or distribution of samples of the Shire Product. In an emergency, including without limitation, a suspected loss or diversion of samples of Shire Product, Impax shall use its best efforts to provide Shire (or its nominee) immediate access to any records or reports relating to the receipt, storage or distribution of samples of the Shire Product. In the event that Impax or CSO discovers the loss of any samples of Shire Product, Impax shall within twenty-four (24) hours, report such loss to the appropriate Shire representative. Shire shall then be responsible for reporting the theft or loss to the appropriate Regulatory Authority.
9.5 Shire Product Sample Training . The Parties recognize that a sampling program for the Shire Product will require incremental training in accountability for samples of Shire Product. Shire shall provide all Sales Force members and other personnel associated with the Shire Product with appropriate training in relation to the use, handling and storage of samples of the Shire Product in compliance with the PDMA and all other applicable Laws. Impax shall consult with Shire to ensure that the Sales Force members use sample report forms for the Shire Product that are acceptable to Shire and that such training is no less rigorous than the policies and procedures followed by Shire ’s own employees.
9.6 Electronic Records . Impax represents and warrants that: (a) it has sufficient protocols, policies and procedures to satisfy the requirements associated with the electronic records and signatures rule, as set forth in 21 Code of Federal Regulations Part 11 ( “Part 11 ”); and
(b) its hardware, software, procedures and documentation consistently meets FDA electronic records and electronic signatures criteria, including but not limited to the following: (i) functionality that provides security, audit trails, record display and printout, operational, authority and device checks;
(ii) staff training and qualifications regarding understanding the requirements of the pertinent FDA regulations; and
13
(iii) system or equipment qualification/validation to meet FDA requirements procedures and other applicable controls. 9.7 Validation of System . The Parties understand and agree that Impax shall deliver a fully Validated System to Shire in connection with the provision of the Services. For purposes of this Section, “Validation System” shall mean in compliance with regulatory requirements including 21 C.F.R. Parts 11 and 203. If revalidation of the system is required due to modifications or changes made or requested by any Regulatory Authority, such revalidation costs incurred by Impax shall be borne by Impax.
9.8 No Other Obligations . The Parties shall have no other obligations to each other with respect to samples of the Shire Product other than those obligations set forth in this Agreement.
Article 10 COMPLIANCE 10.1 Compliance with Laws . Each Party shall: (a) maintain in full force and effect all necessary licenses, permits, approvals (or waivers) and authorizations required by Law to carry out its respective obligations under this Agreement; and
(b) comply with all applicable Laws, including without limitation, any requirements of any product license relevant to the Shire Product. Impax and Shire shall each be solely responsible for compliance with those Laws relating to the activities conducted by or on its behalf under this Agreement (including, without limitation, those Laws that apply to documentation and records retention relating to the distribution and use of the Shire Product samples). 10.2 No Kickback . Impax shall not, and shall procure that any CSO and the Sales Force members shall not, directly or indirectly, pay, offer or authorize payment of anything of value (either in the form of compensation, gift, contribution or otherwise) to any person or entity in a position to order, recommend or purchase the Shire Product contrary to any Law.
10.3 Cooperation . The Parties shall cooperate with one another with the goal of ensuring full compliance with Laws.
10.4 No Inconsistent Warranties.
Impax shall not, and shall ensure that the Sales Force members shall not, directly or indirectly, make any representations or warranties relating to the Shire Product that conflict, or are inconsistent with the NDA, applicable Law or the FDA approved label for the Shire Product.
10.5 Compliance and Investigations. Impax covenants and warrants that:
14
(a) each Sales Force member shall promote, market and sell the Shire Product in accordance with all applicable Laws, including but not limited to the OIG Guidance and the P h RMA Code;
(b) there are no pending or threatened investigations or enforcement actions by any Regulatory Authorities against it or its Affiliates in which it is alleged or under investigation that Impax or its Affiliates has engaged in any fraudulent or unlawful activity; and
(c) it and its Affiliates have policies and procedures that address Regulatory Authority inspections of any kind, including a “for- cause -audit ”. 10.6 Future Investigations . Upon being contacted by any Regulatory Authority in connection with any general inspection of any kind or in relation to the Shire Product, (including periodic random or for-cause audits or investigations of either Party, its Affiliate’s or any CSO or the Sales Force activity relating to Shire Product), Impax and Shire shall, and shall procure that each of its Affiliates and any CSO shall: (a) immediately inform the other Party of the nature of the inspection or audit and the circumstances surrounding such inspection or audit;
(b) periodically update the other Party on the status of the inspection or audit;
(c) promptly respond to the Regulatory Authority to the extent necessary to comply with its obligations under applicable Law after consultation with legal counsel and the other Party; and
(d) cooperate in good faith with any Regulatory Authority inspections, provided that, the foregoing shall not be construed to prevent a Party in any way from complying with its obligations under any applicable Law.
10.7 Bioterrorism Act . Impax shall, and shall procure that its Sales Force and CSO shall, adhere to the requirements of the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act) as amended from time to time.
Article 11 INTELLECTUAL PROPERTY 11.1 Intellectual Property Rights . Nothing in this Agreement shall affect the ownership of any Intellectual Property Rights existing at the date of this Agreement or generated outside the Services which one Party agrees to make available to the other in the course of the Services. Except for any Intellectual Property Rights that relate exclusively to the Impax Product, all right, title and interest in any Intellectual Property Rights created, generated or arising in connection with the provision of the Services shall vest in Shire. Impax shall execute and cause to be executed any document prepared by or on behalf of Shire, and take such further actions or cause such further actions to be taken (all at
15
Shire ’s sole cost and expense), as are reasonably necessary to vest ownership of any such Intellectual Property Rights in Shire. 11.2 Trademark . Shire hereby grants Impax a limited, non-exclusive license (without the right to sub-license) to use the Trademark in relation to the sale, promotion and marketing of the Shire Product in the Territory for the Services Term (including use of the Trademark for production by Third Party vendors of business cards, name tags, training materials and meeting planners). In addition, upon receipt of prior written approval from Shire, Impax may authorize any CSO approved in accordance with this Agreement (in addition to the Third Party vendors set forth in the preceding sentence) to use the Trademark, in relation to the sale, promotion and marketing of the Shire Product and in accordance with the terms of this Agreement. Impax shall: (a) use the Trademark only in a manner which conforms to the reasonable directions and standards notified to it (in writing) by Shire from time to time;
(b) market the Shire Product throughout the Territory under the Trademark;
(c) not use, register or attempt to register any trade marks, company, business or trading names or domain names which are identical or similar to (or which incorporate) any of the Trademarks, any aspect of them, or any other trademarks or trade names used by Shire, without Shire ’s prior written consent;
(d) not do anything which could, in Shire’s reasonable opinion, bring the Trademark or Shire into disrepute or which could otherwise damage the goodwill attaching to the Trademark or any other trademarks or trade names of Shire; or
(e) not use the Trademark in a manner which could, in Shire’s reasonable opinion, result in any of them becoming generic or in Shire’s rights in them becoming diluted, or which could otherwise prejudice or invalidate any registration or application for registration of any of the Trademark anywhere in the world. 11.3 Rights in the Trademark . Impax acknowledges that: (a) it shall not acquire, nor claim, any right, title or interest in or to the Trademark or the goodwill attaching to them by virtue of this Agreement or its use of the Trademark, other than the rights specifically granted to it under Section 11.2; and
(b) all goodwill arising from use of the Trademarks by Impax or its Affiliates before, during or after the Term shall accrue and belong to Shire and Impax shall (and shall procure that its Affiliates shall), at Shire’s request and cost, promptly execute all documents required by Shire to confirm this. 11.4 Third Party Trademark Use . Impax shall promptly notify Shire if it or CSO becomes aware of the use of any mark by a Third Party that Impax or CSO considers a possible infringement, passing off, or misappropriation of the Trademark. Shire shall have the sole right and discretion to decide whether or not any action or proceeding shall be brought against such Third Party. In the event that Shire decides that an action should be taken
16
against such Third Party, Shire shall take such action at its sole expense and in its own name. Impax agrees to cooperate with Shire, and to procure such cooperation from any CSO or Sales Force member, to the extent reasonably necessary to prosecute such action (and Shire shall pay all reasonable costs and fees of Impax associated therewith). Any damages recovered under such action shall be for the account of Shire. 11.5 Warranties . Shire and Impax each represent and warrant that: (a) it is a company duly organized and existing under the laws of Delaware and each has the power and authority to enter into this Agreement;
(b) it has obtained all corporate authorizations required to empower it to enter into and perform its obligations under this Agreement;
(c) this Agreement is valid and binding obligation enforceable against it in accordance with its terms and conditions;
(d) it is not under any obligation to any person, contractual or otherwise, that conflicts with the terms of this Agreement;
(e) the execution of this Agreement and the performance of its obligations hereunder are not, and will not be, in violation of or in conflict with any obligation it may have to any Third Party; and
(f) it will maintain throughout the Services Term all permits, licenses, registrations and other forms of governmental authorization and approval required in order to perform its obligations under this Agreement. 11.6 Shire covenants and warrants that, to Shire’s knowledge upon due investigation, the manufacture, use or sale of the Shire Product in the Territory pursuant to this Agreement does not infringe, misappropriate or otherwise conflict with any intellectual property rights of any Third Party.
11.7 Limitation of Warranty . Except for the warranties, obligations and undertakings of each of the Parties set forth in this Agreement, no warranty, condition, term, undertaking or representation (express or implied, statutory or otherwise) is given by one Party to the other in respect of the Trademark, the Shire Product or the Impax Product; such warranties, conditions, terms, undertakings and representations are to the extent permitted by law expressly excluded.
Article 12 CONFIDENTIALITY 12.1 Confidentiality Obligation . Each Party shall keep and maintain as confidential any Confidential Information supplied by the other Party during the Term. The confidentiality and non-disclosure obligations contained in this Agreement shall not apply to the extent that such Confidential Information is:
17
(a) at the time of disclosure by one Party to the other, in the public domain or otherwise publicly known;
(b) after disclosure by one Party to the other becomes part of the public domain, other than by breach of any obligation of confidentiality;
(c) information which the receiving Party can establish by documentary evidence was already in its possession at the time of receipt or was independently developed by the receiving Party; or
(d) received from a Third Party who was lawfully entitled to disclose such information. 12.2 Exceptions . Notwithstanding Section 12.1, the Party receiving Confidential Information may disclose such Confidential Information to the extent that such disclosure has been ordered by a court of law or directed by a governmental authority, provided that, the disclosure is limited to the extent ordered or directed and wherever practicable, the Party that owns the Confidential Information has been given sufficient written notice in advance to enable it to seek protection or confidential treatment of such Confidential Information.
12.3 Expiration of Confidentiality . The confidentiality obligation contained in this Section 12 shall survive the termination or expiry of this Agreement.
12.4 Disclosure . If Impax is subpoenaed or otherwise requested by any person including, without limitation, any Regulatory Authority to give testimony or provide information which in any way relates to this Agreement, the Sales Force, the Shire Product or practices associated with the Shire Product, Impax shall give Shire prompt notice of such request, and unless otherwise required by Law, shall make no disclosure until Shire has had a reasonable opportunity to contest the right of the requesting person to such disclosure. Impax shall provide Shire with all reasonable cooperation and generally make its employees available to give testimony or to provide reasonable assistance in connection with any lawsuits, claims, proceedings and investigations relating to this Agreement, the Sales Force members, the Shire Product or practices associated with the Shire Product.
Article 13 TERM AND TERMINATION 13.1 Term. This Agreement shall commence on the Effective Date and remain in effect for a period of five (5) years from the Detail Commencement Date (the “ Term ”) unless terminated pursuant to the other provisions of this Agreement. For clarification purposes, expiration of the Services Term shall be distinct and separate from the expiration of the Term.
13.2 Termination . Either Party shall be entitled to terminate this Agreement by written notice to the other if:
18
(a) the other Party commits a material breach of this Agreement, and fails to remedy it within sixty (60) days of receipt of notice from the first Party of such breach and of its intention to exercise its rights under this Section; or
(b) an order is made or a resolution is passed for the winding up of the other Party (other than voluntarily for the purposes of solvent amalgamation or reconstruction) or an order is made for the appointment of an administrator to manage the other Party’s affairs, business and property or if a receiver (which expression shall include an administrative receiver) is appointed over any of the other Party’s assets or undertaking or if circumstances arise which entitle the court or a creditor to appoint a receiver or manager or which entitle the court to make a winding-up order or if a voluntary arrangement is proposed in respect of the other Party or if the other Party takes or suffers any similar or analogous action in consequence of debt, and such order, appointment or similar action is not removed within ninety (90) days. 13.3 Termination by Shire . Shire may terminate this Agreement upon forty-five (45) days’ prior written notice, in the event of Change of Control of Impax to a Shire Competitor.
13.4 Effect of Termination . In the event of expiry or termination of this Agreement for any reason, Impax shall: (a) immediately cease to use the Trademark and cease to provide, or procure the provision of the Services; and
(b) promptly return to Shire all Confidential Information of Shire provided to Impax and samples of the Shire Product provided to Impax or its Affiliates during the Term. In the event of expiry or termination of this Agreement for any reason, Shire shall promptly return to Impax all Confidential Information of Impax provided to Shire or its Affiliates during the Term. 13.5 Payments on Termination . On termination of this Agreement by either Party for any reason, Shire shall pay Impax all Fees and expenses through the actual date of termination.
13.6 Liability on Termination . The termination or expiry of this Agreement shall not release either of the Parties from any liability which at the time of termination or expiry has already accrued to the other Party, nor affect in any way the survival of any other right, duty or obligation of the Parties which is expressly stated elsewhere in this Agreement to survive such termination or expiry.
13.7 Surviving Sections . The provisions of Sections 5.10, 5.11, 8.4, 8.5, 8.6, 9.4, 11.1 and 11.3, and Articles 12, 13, 15, 16 and 20 shall continue in force in accordance with their respective terms notwithstanding expiry or termination of this Agreement for any reason. In addition, the provisions of Sections 7.1 and 7.2 shall survive the expiry or termination
19
of this Agreement solely to the extent of any amounts owing under this Agreement and which have not been paid as of such expiration or termination.
Article 14 DISPUTE RESOLUTION 14.1 Preliminary Processes . If there is a disagreement between the Parties as to the interpretation of this Agreement or in relation to any aspect of the performance by either Party of its obligations under this Agreement, the Oversight Committee shall, within ten (10) Business Days of receipt of a written request from either Party, meet in good faith and try to resolve the disagreement without recourse to legal proceedings.
14.2 Escalation of Dispute . If resolution of the disagreement does not occur within five (5) Business Days after such meeting, the matter shall be escalated for determination by the SVP of Sales and Marketing of Impax and the EVP Sales & Marketing North America of Shire for resolution, who may resolve the matter themselves or jointly appoint a mediator or independent expert to do so.
14.3 Equitable Relief . Nothing in this Article 14 restricts either Party’s freedom to seek urgent relief to preserve a legal right or remedy, or to protect a proprietary or trade secret right.
Article 15 INDEMNIFICATION 15.1 Impax Indemnity . Impax shall defend, indemnify and hold harmless each Shire Party from and against any and all claims, actions, demands, losses, damages, costs and reasonable expenses (including reasonable legal, counsel and expert fees) (“ Impax Liability ”) arising from or in connection with: (a) any Third Party claim, lawsuit, investigation, proceeding, regulatory action, or other cause of action ( “ Claim ”): (i) resulting from any negligent or willful acts of any Impax Party in connection with the performance of the Services; or
(ii) arising from either Party’s use of Impax’s Intellectual Property Rights in a manner consistent with the provisions set forth in this Agreement; (b) the breach by Impax of any of its representations or warranties contained in this Agreement; or
(c) any misuse by an Impax Party of the Trademark, Shire ’s company name or logo; except, in each case, to the extent that the Impax Liability is caused by the negligence, breach of the terms of this Agreement, or willful misconduct of a Shire Party.
20
15.2 Shire Indemnity . Shire shall defend, indemnify and hold harmless each of Impax and its Affiliates, and their respective directors, officers, employees and contractors (“ Impax Party ”) from and against any and all claims, actions, demands, losses, damages, costs and reasonable expenses (including reasonable legal, counsel and expert fees) ( “ Shire Liability ”) arising from or in connection with: (a) any Claim: (i) resulting from any negligent or willful acts of any Shire Party in connection with the performance of its obligations under this Agreement;
(ii) arising from either Party’s use of Shire’s Intellectual Property Rights relating to the Shire Product in a manner consistent with the provisions set forth in this Agreement;
(iii) resulting from Shire ’s manufacture of the Shire Product; or
(iv) resulting from Shire ’s advertising and promotional materials and activities; (b) the breach by Shire of any of its representations or warranties contained in this Agreement; or
(c) any misuse by a Shire Party of Impax ’s company name or logo; except, in each case, to the extent that the Shire Liability is caused by the negligence, breach of the terms of this Agreement, or willful misconduct of an Impax Party. 15.3 Control of Proceedings . The indemnifying Party shall have the sole control over the defense of any Claim, provided that, the indemnifying Party shall obtain the written consent of the indemnified Party prior to settling or otherwise disposing of such Claim if as a result of the settlement or Claim disposal the Indemnified Party ’s interests are in any way adversely affected.
15.4 No Admissions . The indemnified Party shall not make any payment or incur any expenses in connection with any Impax Liability or Shire Liability (as the case may be), or make any admissions or do anything that may compromise or prejudice the defense of any Claim without the prior written consent of the indemnifying Party.
15.5 Claim Information . Each Party shall promptly: (a) inform the other by written notice of any actual or threatened Claim to which Sections 15.1 or 15.2 apply;
(b) provide to the other Party copies of all papers and official documents received in respect of any such Claim; and
21
(c) cooperate as reasonably requested by the other Party in the defense of any such Claim. 15.6 Contributory Negligence . If any Shire Liability or Impax Liability is caused by the negligence of both Shire and Impax, the apportionment of liability shall be shared between Shire and Impax based upon the comparative degree of each Party’s negligence and each Party shall be responsible for its own defense and its own costs including, but not limited to, the cost of defense attorneys’ fees and witnesses ’ fees and expenses incident thereto.
15.7 Limitation of Liability . Except as may be included in a Claim under Section 16.1 or 16.2, in no event shall either Party or their respective Affiliates be liable for special, punitive, indirect, incidental or consequential loss or damage based on contract, tort or any other legal theory arising out of this Agreement.
Article 16 INSURANCE 16.1 Insurance . Each Party shall maintain, at its own cost, general commercial liability insurance (including comprehensive product liability) in such amount as Shire and Impax respectively, customarily maintain with respect to its other products and which is reasonable and customary in the U.S. pharmaceutical industry for companies of comparable size and activities but in any event not less than $10,000,000 per occurrence and $10,000,000 in the aggregate. In the event the insurance policy obtained by a Party is a “claims made” policy (as opposed to an “occurrence” policy), such Party shall obtain comparable insurance for not less than 6 (six) years following the expiry or termination of this Agreement.
16.2 Notice . Each Party shall provide thirty (30) days prior written notice to the other of cancellation or material change in the coverage before such cancellation or change takes effect and shall provide the other Party evidence of such insurance upon written request.
Article 17 FORCE MAJEURE 17.1 Force Majeure . Neither Party shall be entitled to terminate this Agreement or shall be liable to the other under this Agreement for loss or damages attributable to any Force Majeure, provided the Party affected shall give prompt notice thereof to the other Party. Subject to Section 17.2, the Party giving such notice shall be excused from such of its obligations hereunder for so long as it continues to be affected by Force Majeure.
17.2 Continued Force Majeure . If any Force Majeure continues unabated for a period of at least ninety (90) days, the Parties shall meet to discuss in good faith what actions to take or what modifications should be made to this Agreement as a consequence of such Force Majeure in order to alleviate its consequences on the affected Party.
22
Article 18 NOTICES 18.1 Notice . Any notice or other document given under this Agreement shall be in writing in the English language and shall be given by hand or sent by prepaid airmail, by fax transmission or e-mail to the address of the receiving Party as set out in Section 18.2 below unless a different address or fax number has been notified to the other in writing for this purpose.
18.2 Receipt of Notice . Each such notice or document shall: (a) if sent by hand, be deemed to have been given when delivered at the relevant address;
(b) if sent by prepaid mail, be deemed to have been given five (5) days after posting; or
(c) if sent by fax or email transmission be deemed to have been given when transmitted, provided that, a confirmatory copy of such fax or email transmission shall have been sent by prepaid mail within twenty -four (24) hours of such transmission. 18.3 Address for Notice . The address for services of notices and other documents on the Parties shall be:
To Shire To Impax
Address: Address: Shire US, Inc. Impax Laboratories, Inc. 725 Chesterbrook Blvd. 121 New Britain Blvd. Wayne, PA 19087 Chalfont, PA 94544 United States of America United States of America
Attention: Associate General Attention: Senior Vice President Counsel, North America Sales and Marketing Fax : 484 -595 -8163 Fax: 215 -933 -0333 Copy To: Shire Legal Department Copy To: Fax: 1-484 -595 -8674 Fax:
Article 19 ASSIGNMENT 19.1 Assignment. Impax shall not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of Shire, such consent not to be unreasonably withheld, delayed or conditioned.
23
Article 20 GENERAL PROVISIONS 20.1 Relationship. In making and performing this Agreement, the Parties are acting, and intend to be treated, as independent entities; and nothing contained in this Agreement shall be construed or implied to create an agency, partnership, joint venture, or employer and employee relationship between Shire and Impax. Except as otherwise provided herein, neither Party may make any representation, warranty or commitment, whether express or implied, on behalf of or incur any charges or expenses for or in the name of the other Party.
20.2 No Third Party Benefit. This Agreement shall be binding upon and inure solely to the benefit of the Parties hereto, their successors and permitted assigns, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person or Persons any right, benefits or remedies of any nature whatsoever under or by reason of this Agreement.
20.3 Public Announcements. The form and content of any public announcement to be made by one Party regarding this Agreement, or the subject matter contained herein, shall be subject to the prior written consent of the other Party (which consent may not be unreasonably withheld, delayed or conditioned), except as may be required by applicable law, in which event the other Party shall endeavor to give the other Party reasonable advance notice and review of any such disclosure.
20.4 Further Assurances. Each of the Parties shall do, execute and perform and shall procure to be done and perform all such further acts deeds documents and things as the other Party may reasonably require from time to time to give full effect to the terms of this Agreement.
20.5 Agreement Costs. Each Party shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and completion of this Agreement.
20.6 Entire Agreement. This Agreement together with the Schedules attached hereto and the Safety Agreement sets out the entire agreement and understanding between the Parties in respect of the subject matter of this Agreement. It is agreed that: (a) neither Party has entered into this Agreement or the Safety Agreement in reliance upon any representation, warranty or undertaking of the other Party which is not expressly set out in this Agreement or the Safety Agreement;
(b) neither Party shall have any remedy in respect of misrepresentation or untrue statement made by the other Party or for any breach of warranty which is not contained in this Agreement or the Safety Agreement; and
(c) this Section 20.6 shall not exclude any liability for, or remedy in respect of, fraudulent misrepresentation.
24
20.7 Construction. Nothing in this Agreement shall operate to: (a) exclude any provision implied into this Agreement by law and which may not be excluded by law; or
(b) limit or exclude any liability, right or remedy to a greater extent than is permissible under law. 20.8 Variation. No variation of this Agreement shall be valid unless it is in writing and signed by or on behalf of both Parties.
20.9 Severability. If and to the extent that any provision of this Agreement is held to be illegal, void or unenforceable, such provision shall be given no effect and shall be deemed not to be included in this Agreement but without invalidating any of the remaining provisions of this Agreement.
20.10 Waiver. No failure or delay by either Party in exercising any right or remedy provided by law under or pursuant to this Agreement shall impair such right or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude any other or further exercise of it or the exercise of any other right or remedy.
20.11 Cumulative Rights. The rights and remedies of each of the Parties under or pursuant to this Agreement are cumulative, may be exercised as often as such Party considers appropriate and are in addition to its rights and remedies under general law.
20.12 Counterparts. This Agreement may be executed in any number of counterparts and by the Parties on separate counterparts, each of which is an original but all of which together constitute one and the same instrument.
20.13 Governing Law and Venue . This Agreement shall be governed by and construed in accordance with the laws in effect in the Commonwealth of Pennsylvania (without reference to any principles regarding conflicts of law) and any action brought by either Party shall be filed in the state or federal courts located in the Commonwealth of Pennsylvania.
[The rest of this page has been left intentionally blank]
25
IN WITNESS WHEREOF , the Parties have caused this Agreement to be executed as of the date first stated above.
SHIRE US INC.
/s/ Matthew W. Emmens Name: Matthew W. Emmens Title: CEO
IMPAX LABORATORIES, INC.
/s/ Barry R. Edwards Name: Barry R. Edwards Title CEO
26
Schedule I Agreement Definitions
In this Agreement: “ Act ” means United States Federal Food, Drug and Cosmetics Act, as amended from time to time, and the rules, regulations and guidelines promulgated thereunder. “ Affiliates ” means any firm, person or company which controls, is controlled by or is under common control with a Party to this Agreement and for the purpose of this definition the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such firm, person or company, whether through the ownership of voting securities, by contract or otherwise or the ownership either directly or indirectly of more than fifty percent (50%) of the voting securities of such firm, person or company. “ Agreement ” means this agreement, together with its Schedules as the same may be amended from time to time. “ Business Day ” means any day other than Saturday or a Sunday on which the Banks in New York are open for business. “ Call ” means a face-to-face meeting with one or more Call Plan Physicians in an individual, group practice or clinical setting, between a Sales Force member during which a Detail for the Shire Product is made to a Call Plan Physician on the Call Plan and, if applicable, Shire Product samples are offered in conformity with the Shire Product’s sampling strategy set out in Schedule 3. “ Call List ” means the entire group of Call Plan Physicians. “ Call Plan Physician ” means a physician who is eligible to receive a Detail and who is on the Call List, as designated on Schedule 3. “ Call Plan ” means the plan to Call the list of physicians and hospitals and the associated call frequency for each such physician as set out in Schedule 3. “ Change of Control ” means a transaction or series of related transactions, which result directly or indirectly in the change of: (a) control of more than half of the voting power of the issued share capital of Impax; or
(b) control of more than half of the issued share capital (excluding any part thereof which carries no right to participate beyond a specified amount in the distribution of either profit or capital) of Impax; or
1
(c) control of the power to direct or cause the direction of the management and policies of Impax, by virtue of any power conferred under the articles of association or other documents relating to Impax. “ Claim ” has the meaning given to it in Section 15.1(a). “ Competing Product ” means any product that contains carbamazepine as its sole active ingredient. “ Compliance Training ” has the meaning given to it in Section 4.3. “ Confidential Information ” means any scientific, technical, formulation, process, manufacturing, clinical, non-clinical, regulatory, marketing, financial or commercial information or data relating to the business, projects, employees (including name, address and phone number, unless such employee is converted pursuant to Article 10) or products of either Party and provided by one Party to the other by written, oral, electronic or other means in connection with this Agreement. “ Contract Year ” means the first twelve (12) month period commencing on the Detail Commencement Date and each of the four following twelve (12) month periods commencing on the anniversary of the Detail Commencement Date. “ CSO ” means any contract sales organization retained by Impax to provide Services. “ Deployment ” means the date the Sales Force commences Calls in relation to the Shire Product. “ Detail ” means either a Primary Position Detail or a Secondary Position Detail. “ Detail Commencement Date ” has the meaning given to it in Section 4.2. “ Effective Date ” means the date of this Agreement. “ ERISA ” means the Employee Retirement Income Security Act of 1974. “ Extension Period ” has the meaning given to it in Schedule 3. “ FDA ” means Food and Drug Administration of the United States of America and any successor thereto. “ Fees ” means the fees to be paid by Shire to Impax each Quarter for the performance of the Services as set out in Schedule 5. “ Force Majeure ” means any circumstances reasonably beyond a Party’s control, including, without limitation, acts of God, civil disorders or commotions, acts of aggression, fire, explosions, floods, drought, war, sabotage, embargo, unexpected safety or efficacy results obtained with the Shire Product, utility failures, supplier failures, material shortages, labor disturbances, a national health emergency, or appropriations of property. “ GAAP ” means U.S. Generally Accepted Accounting Principles, consistently applied.
2
“ Generic Product ” means a product that consists of an active ingredient that is the active ingredient in the Shire Product, and which is submitted to the FDA for regulatory approval through an abbreviated NDA that references the NDA for the Shire Product and is approved by the FDA as being bioequivalent to and substitutable for the Shire Product. “ Impax Liability ” has the meaning given to it in Section 15.1. “ Impax Party ” has the meaning given to it in Section 15.2.
“ Impax Product ” means all formulations and dosages of VADOVA ® (carbidopa/levadopa), subject to approval by the FDA. “ IMS ” means the International Marketing Services Prescription Reporting Service, or such other prescription reporting service to which Impax and Shire may mutually agree to in writing. “ Incentive Compensation Plan ” means a plan for providing incentive compensation to the Sales Force members for sales of the Shire Product, such plan to contain terms and conditions as are customary for sales representatives in the pharmaceutical industry. “ Intellectual Property Rights ” means patents, trade marks, service marks, logos, get-up, trade names, internet domain names, rights in designs, copyright (including rights in computer software) and moral rights, database rights, semi-conductor topography rights, utility models, rights in know-how and other intellectual property rights, in each case whether registered or unregistered and including applications for registration, and all rights or forms of protection having equivalent or similar effect anywhere in the world. “ IRS ” means the Internal Revenue Service of the United States of America and any successor thereto. “ Law ” means any laws, rules, and regulations, including any statutes, rules, regulations, guidelines, or other requirements that may be in effect from time to time and apply to the development, manufacture, registration, or marketing of the Shire Product in the Territory. “ NDA ” means a New Drug Application and all supplements filed with the FDA, including all documents, data and other information concerning the Shire Product which are necessary for, or included in, a product approval to market the Shire Product in the United States of America, as more fully defined in the Federal Food Drug and Cosmetic Act of 1934, and the rules and regulations promulgated thereunder, as in effect from time to time. “ New Hires ” has the meaning given to it in Section 4.3. “ Oversight Committee ” has the meaning given to it in Section 6.1. “ Party ” means either Impax or Shire (as applicable) and “Parties” means both Impax and Shire. “ PDMA ” means the Prescription Drug Marketing Act 1987.
3
“ Primary Position Detail ” means the meaningful presentation of the Shire Product to a Call Plan Physician by a Sales Force member in which the Shire Product is the first Detail of the Call and receives a majority of the time and focus of the Call. “ Principal Contact ” has the meaning given to it in Section 6.1. “ Quarter ” means the first three month period commencing on the Detail Commencement Date and each following three (3) month period during the remainder of the Term. “ Regulatory Authority ” shall mean any instrumentality, subdivision, court, administrative agency, commission, official or other authority of the United States or any other country or any state, province, prefect, municipality, locality or other government or political subdivision thereof, or any quasi-governmental or private body exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority, including the FDA. “ Sales Force ” means the sales representatives, each being the full time employees of Impax or independent contractors engaged by Impax and each dedicated to the provision of the Services. “ Secondary Position Detail ” means the meaningful presentation of the Shire Product to a Call Plan Physician by a Sales Force member in which the Shire Product is presented immediately after the presentation of the product that receives the majority of the time and focus of the Call. “ Selling Skills Training Module ” means the training module provided by Shire to Impax to utilize and to train the Sales Force. “ Services ” means the marketing and promotion services for the Shire Product to be provided by Impax to Shire through the Sales Force as set forth on Schedule 4, and in accordance with the Call Plan. “ Services Term ” means the period commencing upon the Effective Date of this Agreement until the third anniversary of the Detail Commencement Date, subject to extension at the election of Impax in accordance with Section 4.2. “ Services Year ” means the first twelve (12) month period commencing on the Detail Commencement Date and each of the two following twelve (12) month periods commencing on the anniversary of the Detail Commencement Date. “ Shire Benefits Plan ” has the meaning given to it in Section 5.10. “ Shire Competitor ” any company involved in the development, distribution or sale of pharmaceutical products for the treatment of epilepsy and has annual sales of at least $100 million. “ Shire Materials ” means any promotional, sales, marketing, training and educational materials for the Shire Product in written, electronic or other form, to be used in connection with Services. “ Shire Liability ” has the meaning given to it in Section 15.2.
4
“ Shire Party ” has the meaning given to it in Section 5.11. “ Shire Product ” means all formulations and dosages of CARBATROL® (carbamazepine) approved by the FDA, but excluding EQUETRO®. “ Term ” has the meaning given to it in Section 13.1. “ Territory ” means the United States of America but excluding Puerto Rico and other U.S. territories and possessions. “ Third Party ” means any person or entity who or which are neither a Party nor an Affiliate of a Party. “ Trademark ” means U.S. Trademark Registration No. 1,975,246 for “CARBATROL”.
5
Schedule 2 Form of Sales Force Agreement EMPLOYMENT POLICIES AGREEMENT This Employment Policies Agreement (“Agreement”) is made by and between Impax Laboratories, Inc., a Delaware corporation with its principal place of business at 30831 Huntwood Avenue, Hayward, CA 94544 (hereinafter “Employer”) [or CSO] and ( employee’s name ), (hereinafter “I” or “me”), to be effective as of ( date of receipt ):
1.0 CONFIDENTIAL INFORMATION AND COMPANY PROPERTY 1.1 Confidential Information. I acknowledge that Employer and its parents, subsidiaries, divisions and affiliates, as well as majority-owned companies of such subsidiaries, divisions and affiliates, and their respective predecessors and successors (hereinafter collectively, “Company”) possess certain Confidential Information which has been and may be revealed to or learned by me during my employment with Company. I acknowledge that the term “Confidential Information” includes all information that has or could have commercial value or other utility relating to the Company’s Business and/or that of its clients or the unauthorized disclosure of which could be detrimental to the interests of the Company and/or its clients, whether or not such information is specifically identified as Confidential Information by Company. 1.2 Company Business. I acknowledge that Company’s Business includes any or all of the following: (i) providing sales and marketing representatives on a contract basis to organizations in the pharmaceutical and/or healthcare industry; and (ii) such other businesses as Company may enter or make preparation to enter subsequent to the date that this Agreement is executed. 1.3 Examples of Confidential Information. By way of example and not limitation, Confidential Information includes any and all information, whether or not meeting the legal definition of a trade secret, concerning Company’s: (i) marketing plans, business plans, strategies, forecasts, budgets, projections and costs; (ii) information concerning the directors, officers, employees, and agents of the Company; (iii) client, vendor and supplier lists; (iv) client, vendor and supplier needs, transaction histories, contacts, volumes, characteristics, agreements and prices; (v) promotions, operations, sales, marketing, and research and development; (vi) business operations, internal structures and financial affairs; (vii) systems and procedures; (viii) pricing structure of Company’s services and products; (ix) proposed services and products; and (x) contracts with other parties. I specifically acknowledge that Confidential Information includes all of the information defined above belonging or relating to clients of the Company. Confidential Information does not include information that has become widely known to the public, except where that information has become known through the improper disclosure by me. Notwithstanding anything to the contrary
1
in this Agreement, however, Confidential Information includes any and all information that Company is obligated to maintain as confidential. 1.4 Patient Information as Confidential Information. I expressly agree and acknowledge that the following described information or data that I may obtain during the course of my employment for the Company are proprietary to the Company’s clients and maybe legally protected under applicable federal and state law, shall be held by me in strict confidence and, accordingly, shall not be disclosed by me to any other person or entity without the Company’s and the Company’s client’s prior written consent and authorization, and shall be treated as Confidential Information for purposes of this Agreement: (i) Information relating to the identity of any patient; Information relating to any services provided to any individual patient; (iii) Information relating to the diagnosis and treatment of any individual patient; and/or (iv) Information relating to any amounts charged to, or funds received from, any individual patient or any Third Party payer with respect to any services provided to such individual patients. I understand that any unauthorized disclosure of individually identifiable patient information could be a violation of federal law, and could subject me to criminal penalties. 1.5 Use of Confidential Information. During the term of my employment with Company and thereafter, I will not, directly or indirectly, use or disclose to anyone, or authorize disclosure or use of, any of the Confidential Information revealed to or learned by me during the course of my employment with Company (regardless of the source of such information), unless such use or disclosure is both consistent with Company’s obligations and is for the sole purpose of carrying out my duties to Company. 1.6 Protection and Return of Company Property. I acknowledge that Confidential Information is essential to Company’s Business and/or to the Company’s clients. I agree that I will not make any copies of Confidential Information or other Company property except as authorized by Company. I agree that at the end of my employment I will return to Company immediately any and all Company property and documents and other media containing Confidential Information (and all copies thereof) in my possession, custody or control. Company’s property includes but is not limited to all financial books, records, instruments and documents; customer lists; data; reports; programs; software; hardware; tapes; rolodexes; telephone and address books; call cards listings; credit and phone cards; programming; customer files and records; training materials, marketing materials and books and policy manuals; and any and all other instruments, computers and other equipment, products, literature, records and documents recorded or stored on any medium whatsoever relating or pertaining, directly or indirectly, to corporations, governmental entities and other
2
persons and entities with whom Company has contractual relations, the services or products provided by Company, or Company’s Business or business affairs.
2.0 NON-SOLICITATION OF EMPLOYEES I agree that during the term of my employment and for a period of twelve (12) months thereafter, I shall not directly or indirectly induce any person associated with or employed by the Company or any of its clients to leave the employ of or terminate his or her association with the Company, or solicit the employment of any such person on either my behalf or on behalf of any other business entity.
3.0 COMPLIANCE WITH PHARMACEUTICAL LAWS I agree to perform my obligations as an employee of Company in compliance with all applicable Federal, State and local laws and regulations including without limitation, the Prescription Drug Marketing Act of 1987 (“PDMA”) and if my job includes using samples of pharmaceutical products of Company’s clients, to use and account for those samples as instructed by Employer and as required by law and regulation, including without limitation the PDMA and any applicable final and proposed FDA regulations.
4.0 ITEMS OF VALUE OFFERED TO HEALTHCARE PROFESSIONALS 4.1. General. I understand that company and/or company client funds must never be allocated with strings attached, used as a “reward” for prescribing particular products or placing them on a formulary, or applied to cover operational expenses of healthcare professionals nor for the financial gain of those persons receiving the funding on the benefits of the funding. 4.2 Expenditures on Healthcare Professionals. I acknowledge that expenditures, such as lavish entertainment, are not consistent with either professional ethics and applicable anti-kickback laws and regulations. Items of nominal value may be permissible as long as they are directly related to the healthcare professional activities of the healthcare professional involved and they have been previously approved for distribution by the Company in consultation with the relevant client. However, even an item related to patient care may be inappropriate because of its cost. Attached to this Agreement as Schedule A are some examples you have given me of permissible expenditures and of unacceptable expenditures. I understand that if I have any question with respect to a particular social event or gift, I should discuss this with my Manager. 4.3 Government Healthcare Professionals. Federal government employees, including physicians at Veterans Administration hospitals, and many state employees may not accept an item of value of any kind from or on behalf of companies, such as the Company, whose products or services they use. Federal, State and Private Restrictions.
3
Federal law and the laws of some states prohibit or severely restrict giving any items of value to healthcare professionals. In addition, PhRMA, the American Medical Association, some managed care organizations and some other private associations have adopted ethical rules and similar restrictions on healthcare professionals receiving items of value. I understand that I must be careful to observe all applicable limits. If I have any questions, I will consult with my Manager.
NO ALTERATION OF MARKETING MATERIALS I understand and agree that I am not permitted to make any change, abbreviation or other modification of or to any marketing materials provided to me concerning any pharmaceutical product or any medical device which I have been assigned to detail to healthcare professionals or otherwise to market. I further understand and agree that I may not use any marketing materials in connection with detailing or otherwise marketing any pharmaceutical product or medical device other than marketing materials provided to me by the Company. I acknowledge that any action of mine contrary to my agreements may be a violation of Federal and/or state law and may expose me to criminal sanctions and/or civil liability. If I have any question about any statement or omission in any marketing materials, I will promptly bring that question to the attention of my Manager.
6.0 ACCESS BY COMPANY TO EMPLOYEE COMMUNICATIONS AND WORK AREA I agree and consent that, during the term of my employment with Company and thereafter, Company may review, audit, intercept, access and disclose all messages created, received or sent over the electronic mail and internet access, or disclosure may occur during or after working hours. I further consent and agree that Company may, at any time, access and review the contents of all computers, computers disks, other data storage equipment and devices, files, desks, drawers, closets, cabinets and work stations which are either on Company’s premises or which are owned or provided by Company.
7.0 INDEPENDENT FROM CLIENTS I agree that (i) I have no authority to act for or represent any client of Company in any way except as expressly authorized by Employer; (ii) I am not and shall not be deemed to be an employee or agent of any client of Company for any purpose (and I may not hold myself out as an agent of any client of Company), including federal, state and local tax purposes, and (iii) I am not eligible to participate in, and shall not be entitled to participate in, any pension, profit sharing or other “employee benefit plan” of any client of Company, as such term is defined in section 3(3) of ERISA, even if I am subsequently determined by any court, the Internal Revenue Service or any other governmental agency to be a common law employee of that client.
8.0 AT WILL EMPLOYMENT In consideration for my agreements here, Company agrees to extend an offer of at-will employment to me or to continue my at-will employment. My employment can be terminated with or without cause by me or by Company at any time. Nothing contained in this Agreement will limit or otherwise alter the foregoing, except that as additional consideration for entering
4
into this Agreement, Company agrees to provide ten (10) days’ pay in lieu of notice unless such termination is for cause. If termination is for cause, no notice or pay in lieu of notice is required. Further consideration for this Agreement is provided by Company’s disclosure of such Confidential Information to me as is necessary for the performance of my duties.
9.0 INTERPRETATION OF AGREEMENT 9.1 Continuation Obligations. Wherever this Agreement contemplates that I will have an obligation or restriction at or after the term of my employment with Company, I agree that that obligation or restriction will exist without regard to which party to the Agreement terminates the employment relationship, and without regard for the reason (or lack thereof) for the termination of the employment relationship. 9.2 Entire Agreement. Employer and I agree that this Agreement constitutes the entire understanding and agreement of Company and me with respect to the subject matter of this Agreement, and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between Company and me. 9.3 Severability. Company and I agree that if any provision of this Agreement, or the application thereof, will for any reason and to any extent be invalid or unenforceable, such provision will be deemed severable and the remainder of this Agreement will remain valid and fully enforceable.
10.0 ENFORCEMENT OF AGREEMENT 10.1 Breach Will Cause Irreparable Harm. I agree that if I engage in any activities prohibited by this Agreement or fail to take actions required by this Agreement, irreparable harm to Company will likely result, for which a remedy in the form of damages may not be adequate or otherwise ascertainable. Consequently, Company will be entitled to temporary, preliminary and permanent injunctive relief against me. This section will not limit any other legal or equitable remedies that Company may have against me for violations of these restrictions. 10.2 Attorneys’ Fees. Company and I agree that, in any lawsuit for breach of this Agreement, the prevailing party will be entitled to recover its/his/her reasonable attorneys’ fees and costs, including expert witness fees, unless there is an express determination by the court that the nonprevailing party’s position was substantially justified.
11.0 GENERAL
5
11.1 Policies of Company Clients. I agree that I will promptly read any specific policy of a Client of the Company (including any amendment or restatement of that policy), which is provided to me in writing by the company. I will further promptly make certain that I understand the policy of the Company client, including asking any questions I might have about the meaning or scope of the policy. I will comply with each client policy to the extent it is more restrictive that what is provided in this Employment Policies Agreement, so long as such policies are given to me in writing by the Company in advance. I agree and understand that, if I fail to comply with a Client written policy given to me in a timely fashion, I may be subject to disciplinary action by the Company, including termination of employment. 11.2 Successors and Assigns. Company and I agree that this Agreement will be binding upon and inure to the benefit of Company, its successors and assigns. This Agreement may be assigned in whole or in part by Employer to a successor to all or substantially all of the business or assets of Employer; or to any division or part of Employer; or to any subsidiary, affiliate or division; or to any entity which is majority-owned by Employer or its subsidiaries, divisions or affiliates. 11.3 Waiver In Writing. Employer and I agree that any term or provision of this Agreement may only be amended or waived by a writing signed by an officer of Employer and by me. The failure of either party to enforce any of the provisions in this Agreement will not be construed to be a waiver of the right of that party to enforce such provision thereafter. 11.4 Agreement Not Confidential. I agree that this Agreement is not confidential, and that Company may, during the term of my employment with Company and thereafter, provide copies of this Agreement to others, including persons or entities which may employ, do business with, or consider employing or doing business with me in the future. 11.5 Employee Review; Right to Consult Counsel. By my signature below, I acknowledge that I (i) have had sufficient opportunity to read each provision of this Agreement and understand each provision, (ii) have had an opportunity to review the Agreement with legal counsel of my choice, (iii) am not under duress and (iv) am not relying on any representations or promises that are not set forth in the Agreement.
6
Schedule 3 Call Plan Subject to the provisions of Article III of Schedule 5 of this Agreement, Impax shall cause the Sales Force to perform at least XXXXX Primary Detail Equivalents (“ PDEs ”) during each Services Year. To the extent Impax elects to extend the Services Term beyond the scheduled expiration of the third Services Year to June 30, 2009 (the “Extension Period”), Impax shall cause the Sales Force to perform a prorated number of PDEs for the Extension Period. One Primary Position Detail shall count as a single PDE, and XXXXX Secondary Position Details shall also count as a single PDE. The neurologists and any other physicians who shall comprise the Call Plan Physicians shall be determined in the manner set forth in the following paragraph. The Party(ies) with the right to determine the designations of the Call Plan Physicians in the following paragraph shall also have the right to amend such designations from time to time. Shire shall identify, in its sole discretion, epilepsy-focused physicians (each, an “ Epilepsy Physician ”) to be included as Call Plan Physicians. Impax shall identify, in its sole discretion, Parkinson’s Disease-focused physicians (each, a “ PD Physician ”) to be included as Call Plan Physicians. Call Plan Physicians who are both Epilepsy Physicians and PD Physicians shall instead be considered “ Dual-Focused Physicians ”. Impax may carry out (a) only Primary Position Details with respect to Epilepsy Physicians, (b) only Secondary Position Details with respect to PD Physicians, and (c) either Primary Position Details or Secondary Position Details with respect to Dual-Focused Physicians. The Parties shall determine the Call List in accordance with the preceding paragraph within 30 days of execution of this Agreement.
1
Schedule 4 Services Impax shall provide the following Services at its sole expense:
Implementation Services • Recruit the Sales Force and, subject to Section 3.1 of this Agreement, arrange for the Sales Force to be trained by Shire with respect to conducting Calls for the Shire Product.
• Develop relevant implementation and monitoring procedures as required under this Agreement and for the conduct of Call Plan activities.
• Establish and maintain Call activity reporting in accordance with the terms of this Agreement.
Deployment Services • Deploy at least sixty-six (66) full time employees (“FTEs”) as Sales Force members dedicating their full business time to undertake Call Plan activities.
• Deploy a reasonable number of dedicated regional coordinators (but in any event each coordinator shall not supervise more than eleven (11) Sales Force members) and a dedicated Project Director to oversee and manage the Sales Force and its Call Plan activities, it being understood that Impax will employ a National Sales Director who shall be responsible for the management of both the Impax Product and Shire Product. The personnel reference in the preceding clause shall not be counted as FTEs.
• Replace Sales Force members, regional coordinators, the Project Manager or the Project Director as and when necessary.
• Arrange for the Sales Force (or new Sales Force recruits) to be receive further training by Shire as provided under the terms of this Agreement.
• Provide storage for samples of Shire Product as necessary, and audits of samples of Shire Product as requested by Shire from time to time.
• Provide all necessary Sales Force equipment including handhelds, and laptop computers as reasonably necessary for the conduct of the Services.
• Reimbursement of all Sales Force business expenses, such as meals, travel and entertainment, consistent with the policies of Impax or CSO.
1
Call Plan Services • Visit physicians and healthcare professionals, making Calls on such individuals in accordance with the Call Plan.
• Distribution of promotional materials and samples for the Shire Product in accordance with the terms of this Agreement and the Call Plan.
• Storage of Shire Product samples as agreed between the Parties.
• Such other Services as are agreed under this Agreement or between the Parties in writing from time to time.
2
Schedule 5 Fees and Financial Terms The Parties shall make the following payments set forth in this Schedule 5. All amounts are in U.S. dollars.
I. FEES A. Fees for Gain Share Arrangement. With respect to each Quarter of the Term commencing July 1, 2006, Shire shall pay to Impax the amount set forth below (the “ Gain Share Fees ”) for each prescription, as measured by IMS (“ Prescription ”), filled in the Territory for the Shire Product in excess of XXXXX :
Time Period Amount per Prescription Filled Each Quarter from July 1, 2006 through June 30, 2009 $ XXXXX
Each Quarter from July 1, 2009 through June 30, 2011 $ XXXXX In addition, in the event greater than an aggregate of XXXXX Prescriptions are filled in the Territory for the Shire Product during the period from January 1, 2009 through June 30, 2009, Shire shall pay to Impax an additional one-time payment of $5 million (the “ Year 3 Bonus ”). In the event Shire is unable to supply the Shire Product in (i) sufficient quantities such that there is a commercially meaningful backorder in the Territory for the Shire Product for two consecutive Quarters and (ii) an amount equal to the number of Prescriptions filled in the Territory for the Shire Product for the two immediately preceding consecutive Quarters (the two Quarters referenced in clause (i), the “ Unsupplied Quarters ”) during the period from July 1, 2006 through June 30, 2009, then Shire shall pay to Impax the Year 3 Bonus at such time as such payment would otherwise have been due if and only if: (i) the number of Prescriptions filled in the Territory for the Shire Product increased in the aggregate over the four Quarters immediately preceding the Unsupplied Quarters, or any such quarters if there are less than four Quarters preceding the Unsupplied Quarters, (the “ Reference Quarters ”), and (ii) taking the average Quarter-to-Quarter percentage increase during the Reference Quarters and applying such percentage increase to each Quarter commencing with the Unsupplied Quarters, the number of prescriptions filled in the Territory for the Shire Product for the period from January 1, 2009 through June 30, 2009 is reasonably forecasted to be at least XXXXX . Payment of the FTE fees shall not be affected by Shire’s inability to manufacture the Shire Product. In the event of Unsupplied Quarters, the Parties shall meet to discuss the adjustment to the calculation of the Gain Share Fees, including a reduction to the baseline, in order to provide Impax with the same incentives in place during the period prior to the Unsupplied Quarters. If the Parties are unable to agree to the adjustment, either Party shall have the right to take this issue related to the adjustment to binding arbitration, consistent with the rules of the American Arbitration Association, provided that it has given the other Party thirty (30) days’ advance notice of its intention to take the issue to arbitration.
1
In the event a Generic Product is launched, or a Competing Product is launched by Shire, in the Territory during the Services Term, the number of Prescriptions of such Generic Product and/or of any Competing Product launched by Shire shall be considered Prescriptions for the Shire Product in calculating the Gain Share Fees, provided, for clarity, that such calculation shall not include any Prescriptions of any Authorized Generic Product distributed by Impax. B. FTE Fees . Shire shall pay to Impax an amount for each Sales Force member, up to a maximum of sixty-six (66) Sales Force members (prorated for employment of a Sales Force member for partial Service Years), at the rate of $200,000 per Services Year, plus a prorated amount for the Extension Period, if any. Impax may in its sole discretion employ or retain Sales Force members in excess of such maximum number, it being acknowledged and agreed, however that Shire shall have no obligation to pay to Impax any amounts with respect to more than sixty-six (66) Sales Force members.
II. AUTHORIZATION OF GENERIC In the event a Generic Product is launched in the Territory during the Services Term, Shire shall either (i) pay to Impax the Year 3 Bonus at such time as such payment would otherwise have been due, or (ii) grant Impax the right to promote the Authorized Generic Product in the Territory pursuant to the terms of a Supply Agreement to be entered into between the Parties and having such terms as a mutually acceptable and commercially reasonable commensurate with those standard in the industry for supply agreements under similar circumstances. Under such supply agreement the authorized Generic Product shall be supplied by Shire to Impax for the unexpired term of the Services Term. The purchase price for the authorized Generic Product shall be XXXXX . For purposes of this Section II, “ Authorized Generic Product ” shall mean generically labeled Shire Product approved for sale by the FDA pursuant to a labeling supplement to Shire’s NDA for the Shire Product. Payment of the FTE fees shall not be affected by the launch of a Generic Product. Shire’s ability to grant Impax the right to promote the Authorized Generic Product above shall be conditioned on Shire’s ability to provide reasonably adequate quantities of such product for launch at or prior to the Third Party launch of the Generic Product, and Impax’s acceptance of such quantity as being reasonably adequate. If Impax does not accept the quantity as being reasonably adequate, Shire shall pay to Impax the Year 3 Bonus at such time as such payment would otherwise have been due.
III. SHORTFALL REIMBURSEMENTS In the event Impax fails to perform at least XXXXX PDEs during any Quarter of any Services Year (the number of the shortfall, the “ Shortfall PDEs ”) and fails to perform all of the Shortfall PDEs by the expiration of the second Quarter following the Quarter in which the Shortfall PDEs occurred, then Impax shall pay to Shire an amount equal to $ XXXXX for each Shortfall PDE that remains unperformed upon the expiration of such second Quarter; provided, that Impax may also apply up to XXXXX PDEs from the immediately preceding Quarter in excess of XXXXX PDEs from such preceding Quarter to reduce the Shortfall PDEs. For clarification purposes, a PDE can only be counted once towards achieving the XXXXX PDEs required for any Quarter. In the event of any Shortfall PDEs with respect to either of the final
2
two Quarters of the third and final Services Year, Impax shall have the right to perform Services to reduce such Shortfall PDEs during the first two Quarters immediately following the third Services Year; provided, that Shire shall have no obligation to make any payments to Impax with respect to such Services other than as may be owed to Impax as FTE fees for any Extension Period. Impax’s repayment of $ XXXXX for each Shortfall PDE shall be Shire’s sole remedy with respect to each Shortfall PDE.
3
Schedule 6 CARBATROL ® SAFETY AGREEMENT
DATE: As of January 19, 2006 PARTIES: (1) SHIRE US INC., having its place of business at 725 Chesterbrook Boulevard, Wayne, PA 19087 -5637 ( “ Shire ”)
(2) IMPAX LABORATORIES, INC., having its place of business at 30831 Huntwood Avenue, Hayward, CA 94544 ( “ Impax ”).
RECITALS
(A) With effect from January 19, 2006, Shire and Impax entered into a Promotional Services Agreement (the “ Promotional Agreement ”) with respect to the promotion of the Shire Product (as defined below) in the Territory (as defined below).
(B) Pursuant to the terms of the Promotional Agreement, the Parties are obligated to enter into this Agreement to provide for the Parties’ respective obligations in relation to medical information and pharmacovigilance services for the Shire Product.
(C) In consideration of the above recitals and the mutual promises, covenants and obligations as set out in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, and intending to be legally bound, the Parties agree as follows.
OPERATIVE PROVISIONS
1 INTERPRETATION 1.1 In this Agreement:
“ Adverse Event ” means any untoward medical occurrence in a patient or clinical investigator subject administered the Shire Product and which does not necessarily have a causal relationship with this treatment for which the Shire Product is used. An adverse event can therefore be any unfavorable and unintended sign (including an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal (investigational) product, whether or not related to the Shire Product. A pre -existing condition that worsened in severity after administration of the Product would be considered an adverse event.
“ Awareness Date ” or “ Clock Date ” means the date on which a Party first becomes aware of an Adverse Event or a Suspected Adverse Drug Reaction and, in relation to a third party Representative of a Party, such as clinical research organizations or distributors, that have contractual and/or regulatory obligations to report Adverse Events or a Suspected Adverse Drug Reaction to that Party, the date on which such Third Parties
1
first become aware of that Adverse Event or a Suspected Adverse Drug Reaction. For both Parties this is considered day zero. “ Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for business.
“ Confidential Information ” has the meaning given to it in the Promotional Agreement.
“ Promotional Agreement ” has the meaning given to it in Recital (A).
“ Effective Date ” has the meaning given to it in the Promotional Agreement.
“ Marketing Authorization ” means any authorization granted by a Regulatory Authority required to permit the commercial marketing and sale of the Shire Product in the Territory.
“ Medical Information ” means information about the Shire Product including, but not limited to, clinical and technical matters such as therapeutic uses for both the licensed and unlicensed indications, drug interactions, drug-disease information, Adverse Events, product stability and other product characteristics.
“ Periodic Safety Report ” means a safety report generated at set times and in accordance with FDA guidelines for the purpose of demonstrating the current risk/benefit analysis of the Shire Product according to present knowledge and produced to provide a historical perspective on the safety issues surrounding the Shire Product.
“ Shire Product ” has the meaning given to it in the Promotional Agreement.
“ Reference Safety Information ” means the recognized Adverse Reactions to the Shire Product contained in all or any one of Shire’s Developmental Core Safety Information (DCSI) in an investigator’s brochure, Shire’s Company Core Safety Information (CCSI) in a marketed product Company Core Data Sheet (CCDS) and Shire’s official local product labeling (including the local Summary of Product Characteristics (SPC)).
“ Regulatory Approval ” means the granting of all necessary regulatory and governmental approvals by a regulatory or other governmental body required to market and sell the Shire Product in the Territory.
“ Regulatory Authority ” means any competent regulatory authority or other governmental body responsible for granting any Regulatory Approval.
“ Representatives ” means the directors, officers, employees, agents and advisors of each of the Parties or their respective Affiliates.
“ Safety Issue ” means any event, report, data or information, which could cause a re-evaluation of the safety of the Shire Product including, but not limited to, Suspected Adverse Drug Reaction and Unexpected Suspected Adverse Drug Reaction.
2
“ Serious Adverse Event ” means any Adverse Event in relation to any dose of the administered Product that: A. results in death; B. is life threatening; C. requires in-patient hospitalization or prolongation of existing hospitalization; D. results in persistent or significant disability or incapacity; or E. is a congenital anomaly or birth defect. Medical and scientific judgment should be exercised in deciding whether expedited reporting for the Shire Product is appropriate in other situations, such as medically important events that may not be immediately life-threatening or result in death or hospitalization but may jeopardize the patient or may require intervention to prevent one of the other outcomes listed above. These should also usually be considered as Serious Adverse Events.
“ Serious Suspected Adverse Drug Reaction ” means any Suspected Adverse Drug Reaction in relation to any dose of the administered Shire Product that: F. results in death; G. is life threatening; H. requires in-patient hospitalization or prolongation of existing hospitalization; I. results in persistent or significant disability or incapacity; or J. is a congenital anomaly or birth defect. Medical and scientific judgment should be exercised in deciding whether expedited reporting for the Shire Product is appropriate in other situations, such as medically important events that may not be immediately life-threatening or result in death or hospitalization but may jeopardize the patient or may require intervention to prevent one of the other outcomes listed above. These should also usually be considered as Serious Suspected Adverse Drug Reactions.
“Signal ” means an unexpected observation of an event in relation to treatment with the Shire Product which deviates so much from expectations that it calls for immediate and greater attention, including (but not limited to) unlabelled Suspected Adverse Drug Reactions, increased frequency or severity of labelled Suspected Adverse Drug Reactions and any change in the risk/benefit/profile of the Shire Product.
3
“Spontaneous Report ” means a communication from an individual (e.g., a health care professional, consumer) to a company or regulatory authority that describes a Suspected Adverse Drug Reaction or medication error. It does not include cases identified from information solicited by the applicant or contractor, such as individual case safety reports or findings derived from a study, company-sponsored patient support program, disease management program, patient registry, including pregnancy registries, or any organized data collection scheme. It also does not include information compiled in support of class action lawsuits.
“Suspected Adverse Drug Reaction ” means a noxious and unintended response to any dose of the Shire Product for which there is a reasonable possibility that the Shire Product caused the response. In this definition, the phrase “a reasonable possibility ” means that the relationship cannot be ruled out.
“Term ” means the term of this Agreement commencing on the Effective Date and expiring on the date set out in Section 14 hereof.
“Territory ” has the meaning given to it in the Promotional Agreement.
“Unexpected Suspected Adverse Drug Reaction ” means any Suspected Adverse Drug Reaction that is not included in the current U.S. labeling for the Shire Product.
“Valid Safety Reports” means the minimum information required for expedited reporting which should at least include all of the following: A. an identifiable patient; B. a suspected medicinal product or therapeutic device; C. an identifiable reporter; and D. a Suspected Adverse Drug Reaction or an Adverse Event. 1.2 In this Agreement, unless the context otherwise requires: A. references to “persons” includes individuals, bodies corporate (wherever incorporated), unincorporated associations and partnerships; B. reference to a “Party” is to a Party to this Agreement and “Parties” is to both of them; C. the headings are inserted for convenience only and do not affect the construction of the Agreement; D. references to one gender includes both genders; and
4
E. any reference to an enactment or statutory provision is a reference to it as it may have been, or may from time to time be amended, modified, consolidated or re-enacted. 1.3 The Schedules comprise part of and shall be construed in accordance with the terms of this Agreement. In the event of any inconsistency between the Schedules and the terms of this Agreement, the terms of this Agreement shall prevail.
1.4 Terms used in this Agreement, which are not otherwise defined within the Agreement or the Promotional Agreement shall have the meaning given to them in accordance with FDA Guidelines and
Shire Standard Operating Procedures (SOPs). In the event of any conflict between Shire’s SOP’s and FDA guidelines, FDA guidelines shall prevail.
2 PURPOSE 2.1 In consideration of the mutual obligations contained in this Agreement, the Parties have agreed to provide for the procedures relating to the exchange of safety and pharmacovigilance information for the Shire Product between Shire and Impax in order to comply with worldwide regulatory reporting requirements for the Shire Product.
2.2 As between Shire and Impax, Shire shall have sole responsibility, and Impax shall have no responsibility, for: A. Compliance with all Regulatory Authority reporting requirements related to Adverse Events and Suspected Adverse Drug Reactions, including but not limited to FDA requirements, Periodic Safety Reports, 15-day safety reports and MedWatch reports.
B. Except to the extent required by law, responding to Third Parties, whether governmental or private, regarding complaints, notices and inquiries as to Adverse Events, Suspected Adverse Drug Reactions, or data, documents or reports related to any of them. Impax shall refer all drug safety and pharmacovigilance related queries from healthcare providers or their staff, or any Third Party (as such terms is defined in the Promotional Agreement) in relation to the Shire Product arising in the context of Impax’s activities pursuant to the Promotional Agreement. The Shire contact to receive this information is identified in 11.1 of this agreement as the “Appointed Medical Information Contact ”. 2.3 Except as specifically set forth in paragraph 2.2 above, Impax ’s sole responsibilities pursuant to this Agreement shall be to: A. Ensure that there is a mechanism available during normal business hours to receive notices regarding any safety issue under this Agreement;
5
B. Handle all telephone calls and other communications that it may receive regarding Adverse Events and/or Suspected Adverse Drug Reactions in accordance with the terms of this Agreement;
C. Inform Shire as soon as possible of any communications of any kind received by Impax from any Regulatory Authority involving safety issues in relation to the Shire Product in the Territory; to the extent permitted by law, the Regulatory Authority shall be referred to Shire for response. To the extent that Impax is required by law to respond, Impax shall, if there is time to do so, submit its response to Shire before submitting it to the Regulatory Authority. Shire will provide Impax with safety data required to respond to a Regulatory Authority request and written approval of and/or comments on such response within a timeframe sufficient to meet any deadlines imposed by the requesting Regulatory Authority. Impax shall, to the extent possible, conform its response to comments timely received from Shire; however, Impax reserves the right to exercise final control over its response to Regulatory Agency communications directed to, and requiring a response from, Impax, to the extent required by Impax, in its sole judgment, in order to maintain Impax’s compliance with all applicable legal requirements. Impax shall, to the extent permitted by law, cooperate fully with Shire and keep Shire fully informed as to Regulatory Agency requests received by Impax within the scope of this paragraph and Impax responses.
D. Promptly inform Shire in the event that, at any time, Impax identifies potential safety issues in relation to the Shire Product and will provide such further assistance as Shire and Impax shall agree.
E. Submit to an audit by Shire on a “for cause” basis concerning Pharmacovigilance and adverse event collection and reporting in line with FDA regulations, in accordance with Section 10.2. below and the terms of this Agreement.
3 SCOPE 3.1 This Agreement covers: A. all Spontaneous Reports of Adverse Events and Suspected Adverse Drug Reactions in relation to the Shire Product;
B. all Serious Suspected Adverse Drug Reactions arising from post -marketing surveillance with the Shire Product;
C. all information required for periodic reporting in relation to the Shire Product;
D. all other information as required by Regulatory Authorities for the Shire Product; and
E. the provision of Medical Information to support third party inquiries.
4 LANGUAGE OF ALL EXCHANGE AND TERMINOLOGY
6
4.1 The language of all information exchanged pursuant to this Agreement, including reports to Regulatory Authorities, shall (unless specifically stated otherwise) be in English, or if any other language, accompanied by a translation into English. In the event of any conflict between the English text and the text in any other language, the English text shall prevail.
5 CONTACT PERSONNEL AND METHODS FOR ADVERSE EVENT TRANSMISSION 5.1 The names and details of contact personnel for Shire and Impax are detailed in Schedule 1.
5.2 Any changes in names or details of any of the contact personnel for a Party in relation to the Shire Product must be notified by that Party to the other Party in writing to the address set out in Schedule 1 as soon as reasonably practicable after the change occurs.
5.3 Any notice given under this Agreement shall be in writing and (i) personally delivered or (ii) sent by fax or (iii) e-mail to the address of the other Party as set out in Schedule 1 (or such other address as may have been notified in writing from time to time by a Party to the other Party) and any such notice shall be deemed to have been served at the time of delivery (if personally delivered) or upon receipt of confirmation of transmission by the sender’s fax machine (if sent by fax) and in the case of email upon receipt of delivery confirmation by the sender’s computer (if sent by e -mail).
6 SAFETY DATABASE 6.1 The safety information generated pursuant to this Agreement shall be added to the safety database for the Shire Product and shall be held and maintained by Shire and shall be the central repository for all drug safety information received worldwide for the Shire Product.
6.2 Impax acknowledges and agrees that all rights in and to the safety database shall vest in Shire.
6.3 The safety database shall be used for all drug safety and pharmacovigilance regulatory responses and purposes for the Shire Product.
6.4 Impax may reasonably request safety information from Shire’s safety database to provide a response to answer any drug safety and pharmacovigilance related queries in relation to the Shire Product. Shire will provide the information within a reasonable timeline according to the urgency of request.
6.5 With the exception of FDA exchange, which may be implemented at some future point in time, and except as otherwise set forth herein, Impax shall not have direct access to the safety database for security and data privacy reasons.
7
7 EXCHANGE OF ADVERSE EVENT AND SUSPECTED ADVERSE DRUG REACTION INFORMATION 7.1 All notification and response periods referred to in this Agreement (unless otherwise specified) will be in calendar days in accordance with FDA regulations.
7.2 The relevant period for any notification or response for either Party (including their Representatives) will commence on the Awareness Date.
7.3 Impax will attempt to warm transfer all Adverse Event and Suspected Adverse Drug Reactions calls to Shire at (888) 300-6414 at the time of receipt. Prior to transferring the call, Impax staff will obtain a name and contact number. If the warm transfer is not successful, Impax will fax the caller’s name and contact information to Shire’s Pharmacovigilance Department at (866) 557- 4473 within one Business Day of receipt. Shire will be responsible for the intake of the Adverse Events and Suspected Adverse Drug Reactions and preparing MedWatch reports for any Adverse Reaction occurring. All written Adverse Events and Suspected Adverse Drug Reactions received by Impax will be forwarded to Shire within two Business Days of receipt.
7.4 Shire shall ensure that there is a mechanism available 24-hour/7 days per week to receive notices for any safety issue under this Agreement.
7.5 Upon receipt of any report from Impax under Section 7.3, Shire will notify Impax of receipt of the report as soon as possible; however in no event longer than two Business Days thereafter. Any report from is considered transmitted only after an acknowledgement of receipt is received from Shire.
7.6 Shire will provide written reports to the FDA meeting all 15 -day safety report and periodic/PSUR regulated timelines.
7.7 No later than the 15th day of each month, Shire will provide a line listing including reported term, manufacturing number, demographics and a narrative for each report received from Impax the previous month.
Reports received from Literature Reviews 7.8 Shire will be responsible for monitoring the worldwide scientific literature to meet global regulatory reporting requirements and for monitoring drug safety for the Shire Product. Once an Adverse Event or a Suspected Adverse Drug Reaction has been identified, Shire will assess it according to seriousness and where appropriate report it as a literature report quoting the reference for the article for onward reporting to the appropriate Regulatory Authority in the Territory.
Management of Follow up information
Follow up of initial reports
8
7.9 Shire shall be responsible for all follow -up activities for any Adverse Events occurring in the Territory.
7.10 Impax shall notify Shire of any additional information it reasonably requires regarding an Adverse Event occurring in the Territory that Shire has notified it of pursuant to this Section 7 and Shire will use its reasonable endeavors to obtain the additional information within the applicable timeframe.
8 ASSESSMENT OF ADVERSE EVENTS
Assessment of Listedness (Expectedness) 8.1 All Adverse Events and Suspected Adverse Drug Reactions will be reported to Shire irrespective of any assessment regarding listedness (expectedness).
8.2 Shire shall be responsible for assessing all Adverse Events and Suspected Adverse Drug Reactions in the Territory and shall determine if any report is required to be made to the Regulatory Authorities in accordance with Section 10.
9 SAFETY ISSUES/SIGNALS AND REGULATORY INQUIRIES INVOLVING SAFETY ISSUES 8.3 Shire shall, within 24 hours of it becoming aware, notify Impax of any significant safety issues other than individual ADRs referenced in Section 7 in relation to the Shire Product. Shire and Impax shall discuss in good faith how to deal with any such significant safety issues and shall co-operate with the reasonable requests of the other Party in relation to such issues. Significant safety issues relating to the Shire Product may occur as a result of a request from a Regulatory Authority; potential changes in the risk/benefit of the Shire Product; Shire Product quality issues that may have a clinical impact such as Shire Product contamination or deterioration; external influences such as media or literature and ongoing safety surveillance.
8.4 Shire is responsible for the maintenance of labeling changes and will notify Impax of all changes.
8.5 Should Shire become aware of any potential safety signal, Shire shall promptly notify Impax.
10 REGULATORY AUTHORITY INTERACTION
Expedited Reporting Responsibilities 10.1 Subject to Sections 7.8 to 7.9, Shire will be responsible for assessing the “reportability” and submitting reports of Serious Suspected Adverse Drug Reactions for the Shire Product (according to current FDA regulations) to the relevant Regulatory Authorities.
9
10.2 Either Party may request an audit of the other Party on a “for cause” basis, and at least 2 weeks notice will be provided before the audit request date. An audit will not be conducted more than twice a year unless serious compliance issues have been identified in previous audits. The audit will be for Pharmacovigilance and concentrate on adverse event collection and reporting in line with FDA regulations and in compliance with each company’s standard operating procedures. Any audit shall be conducted so as to not interfere with the other Party’s business operations and the costs of any such audit shall be borne by the party conducting the audit.
Periodic Reporting 10.3 Shire shall prepare and submit to the FDA, with a copy to Impax, the Periodic Safety Report for the Shire Product in the Territory, according to its internal standard operating procedures and in the format as detailed in 21 CFR 314. The periodicity of the Periodic Safety Report will be according to the International Birth Date of the Shire Product.
10.4 Shire will provide Impax with a copy of each final Periodic Safety Report within 10 Business Days of the submitted Periodic Safety Report to the FDA in accordance to regulatory timelines for submission.
10.5 Prior to regulatory submission, there should be discussion between the Parties to promote harmonization and co-ordination if any safety signals or proposed amendments to the Reference Safety Information are recommended. However, this must be achieved within the applicable regulatory timeframe.
11 MEDICAL INFORMATION/QUESTIONS 11.1 Impax shall transfer all Medical Information inquiries received from third Parties in the Territory regarding the Shire Product to the person or persons specified in Schedule 1 ( “ Appointed Medical Information Contact ”).
11.2 If the inquiry is a request for information in connection with a report of an Adverse Event or Suspected Adverse Drug Reaction, Impax shall confirm to the Appointed Medical Information Contact that the report has been notified to Shire in accordance with Sections 7.3 and 7.6.
12 AMENDMENTS TO THIS SAFETY AGREEMENT 12.1 This Safety Agreement becomes effective on the Effective Date.
12.2 If a Party becomes aware of any change of law or regulation which affects any of the matters the subject of this Agreement, it shall notify the other Party of any such change. The Parties shall promptly meet and discuss any such changes and negotiate in good faith any amendments to this Agreement, which either Party honestly believes are necessary or desirable as a result of such changes.
10
12.3 Revision of attachments (Schedules) will not require that this Safety Agreement be re-issued and signed off, but shall require the written agreement of both Parties.
12.4 Changes in company personnel and methods of communication must be conveyed immediately to both Parties, to ensure the correct and timely flow of information.
13 CONFIDENTIALITY 13.1 Each Party agrees and undertakes that it will treat and keep confidential all Confidential Information, which may become known, to that Party from the other Party.
13.2 Each Party acknowledges and agrees that Article 12 of the Promotional Agreement (entitled “ Confidential Information ”) is hereby incorporated into this Agreement in its entirety.
14 DURATION AND TERMINATION 14.1 This Agreement commences on the Effective Date and shall continue in force until the Promotional Agreement is terminated or expires and this Agreement shall immediately terminate on such date and Section 15 shall apply.
15 CONSEQUENCES OF TERMINATION 15.1 Upon the termination of this Agreement, Impax shall: A. continue to comply with its obligations under this Agreement if and to the extent it continues to have the right to sell the Shire Product after the expiration or termination of the Promotional Agreement;
B. comply with its obligations in Section 8.4 for a period of 6 months after the termination of this Agreement. 15.2 Sections 13, 15, 16 and 17 shall survive the termination of this Agreement.
15.3 The termination or expiration of this Agreement shall not release either of the Parties from any liability which at the time of termination or expiration has already accrued to the other Party, nor affect in any way the survival of any other right, duty or obligation of the Parties which is expressly stated elsewhere in this Agreement to survive such termination or expiration.
16 RESOLVING DISPUTES 16.1 If there is a disagreement between Shire and Impax in the interpretation of this Agreement or any aspect of the performance by either Party of its obligations under this Agreement, representatives of the Parties will resolve such dispute in accordance with the dispute resolution procedure set out in Article 13 of the Promotional Agreement.
11
17 GENERAL PROVISIONS 17.1 Except as expressly provided for in this Agreement, no variation to the terms of this Agreement shall be effective unless in writing and signed on behalf of each Party by a director or other authorised person.
17.2 If any term or provision of this Agreement is held by any court or other competent authority to be void or unenforceable in whole or in part, the other provisions of this Agreement and the remainder of the affected provision shall continue to be valid.
17.3 Failure by either Party on one or more occasions to avail itself of a right conferred by this Agreement shall not be construed as a waiver of such Party ’s right to enforce such right or any other right.
17.4 This Agreement and the Promotional Agreement contain the entire agreements and understandings between the Parties and supersede all previous agreements and understandings between the Parties with respect to the subject matter of this Agreement. In the event of a conflict between the terms of any of the aforementioned agreements, the Promotional Agreement (excluding Article 7.1) shall control to the extent of any inconsistency. Each Party acknowledges that, in entering into this Agreement, it is not relying on any representation or warranty (whether made orally or in writing) except as expressly provided in this Agreement.
17.5 Nothing in this Agreement is deemed to constitute a partnership between the Parties nor constitute any Party the agent of the other Party for any purpose.
17.6 The Parties to this Agreement do not intend that any term of this Agreement should be enforceable by any person who is not a Party to this Agreement.
17.7 The rights and remedies of each of the Parties under or pursuant to this Agreement are cumulative, may be exercised as often as such Party considers appropriate and are in addition to its rights and remedies under general law.
17.8 Each of the Parties shall do, execute and perform and shall procure to be done, executed and performed all such further acts deeds documents and things as the other Party may reasonably require from time to time to give full effect to the terms of this Agreement.
17.9 This Agreement may be executed in any number of counterparts and by the Parties to it on separate counterparts, each of which is an original but all of which together constitute one and the same instrument.
17.10 This Agreement and the obligations of the Parties shall be governed by and construed in accordance with the laws in effect in the State of New York (without reference to principles regarding conflicts of law)
12
IN WITNESS WHEREOF , this Agreement has been signed by the authorized representatives of the Parties on the day and year first written above.
SIGNED for and on behalf of ) /s/ Matthew W. Emmens
SHIRE US INC. ) Signature
Matthew W. Emmens, CEO
Print Name and Title
SIGNED for and on behalf of ) /s/ Barry R. Edwards
IMPAX LABORATORIES, INC ) Signature
Barry R. Edwards, CEO
Print Name and Title
13
Schedule 7 Formulary Status
XXXXX
1 EXHIBIT 10.21 XXXXX INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
COPROMOTION AGREEMENT By and between IMPAX LABORATORIES, INC. and WYETH acting through its WYETH PHARMACEUTICALS DIVISION July 16, 2008
TABLE OF CONTENTS
Page
1. DEFINITIONS 1
2. APPOINTMENT AND OBLIGATIONS 11 2.1. Appointment 11 2.2. Adjustment to Initiation Date 11 2.3. Wyeth ’s Option to Designate Substitute Products 11 2.4. Permitted Subcontractors 13 2.5. Undertaking not to Compete 13 2.6. Obligations of Impax 14 2.7. Obligations of Wyeth 22 2.8. Coordination Meetings 24 2.9. Ownership of Product 25 2.10. No Distribution 27
3. PAYMENTS 27 3.1. Detail Fee 27 3.2. Adjustments to Detail Price 27 3.3. No Payment for Extra Details 28 3.4. Incentive Fee 28 3.5. Taxes and Withholding 28 3.6. Currency 28
4. RECORD KEEPING; REPORTING AND AUDITS 28 4.1. Impax Records and Audits 28 4.2. Impax Reports 29 4.3. Market Research 30 4.4. Wyeth Records and Audits 30
5. RELATIONSHIP AND PUBLICITY 31 5.1. Relationship of Parties 31 5.2. Public Announcements 31
6. REGULATORY COMPLIANCE 31 6.1. Marketing Authorization 31 6.2. Recalls 31 6.3. Returns 31 6.4. Adverse Drug Experiences 31 6.5. Product Complaints 33 6.6. Product Inquiries 34 6.7. Communications with FDA 35 6.8. Additional Responsibilities of the Parties 35
Page
7. REPRESENTATIONS, WARRANTIES AND COVENANTS 35 7.1. Mutual Representations and Warranties 35 7.2. Impax Representations and Warranties 36 7.3. Wyeth Representations and Warranties 36 7.4. Wyeth Covenants 37 7.5. Other Opportunities 37
8. INDEMNIFICATION AND INSURANCE 37 8.1. Indemnification by Impax 37 8.2. Indemnification by Wyeth 38 8.3. Defense of Actions; Settlements 38 8.4. Limitation of Liability 38 8.5. Insurance Requirements 39
9. TERM AND TERMINATION 39 9.1. Term 39 9.2. Termination for Cause 39 9.3. Termination by Wyeth 39 9.4. Termination without Cause by Impax 39 9.5. Effect of Termination 39 9.6. Survival of Certain Provisions 40
10. SAMPLES 40 10.1. Provision of Samples 40 10.2. Shipping and Distribution of Samples 40 10.3. Compliance with PDMA 41 10.4. Sample Carry Program 42 10.5. Sampling Activity System Audit 44 10.6. Investigation, Corrective & Preventative Actions 44 10.7. Monitoring & Auditing Programs 44 10.8. Responsibility for Compliance 45 10.9. In -Transit Losses 45 10.10. Improper Handling 45 10.11. Indemnity for Failure to Comply 45 10.12. Additional Requirements 45
11. CONFIDENTIALITY 46 11.1. Nondisclosure and Nonuse Obligations 46 11.2. Permitted Disclosures 46 11.3. Return of Confidential Information 47 11.4. Disclosure of Agreement 47 11.5. Equitable Relief 47
12. MISCELLANEOUS 48 12.1. Force Majeure 48 12.2. Severability 48 12.3. Assignability 48
ii
Page
12.4. Notices 49 12.5. Governing Law; Jurisdiction 49 12.6. Dispute Resolution 49 12.7. No Waiver 49 12.8. Headings; Defined Terms 50 12.9. Counterparts 50 12.10. Entire Agreement; Amendments 50 12.11. Further Actions 50
iii
SCHEDULES
Schedule 1.79 — Sample Receipt Forms
Schedule 1.94 — Wyeth Sales Training Program for the Initial Product Exhibit A to Schedule 1.94
Schedule 3.4 — Sample Calculation of Incentive Fee
Schedule 7.3 — Initial Product Patents
Schedule 6.4.6 — Wyeth Form 1747(b)
Schedule 6.6 — Wyeth Form 8202
iv
COPROMOTION AGREEMENT This Copromotion Agreement (the “Agreement”) is made and entered into as of July 16, 2008 (the “Effective Date”), by and between Wyeth, acting through its Wyeth Pharmaceuticals Division, having a place of business at 500 Arcola Road, Collegeville, Pennsylvania 19426 (“Wyeth”) and Impax Laboratories, Inc., having a place of business at 30831 Huntwood Avenue, Hayward, California 94544 (“Impax”). Wyeth and Impax may each be referred to herein individually as a “Party” and collectively as the “Parties.” WHEREAS, Wyeth owns and/or controls marketing and proprietary rights to the Product (as defined below); and WHEREAS, Impax has a sales and marketing organization that promotes certain pharmaceutical products to physicians and other health care professionals; WHEREAS, the Parties desire that Impax participate in detailing the Product to Neurologists (as defined below) in the United States; WHEREAS, the Parties have agreed to amicably settle patent litigation currently ongoing between them, and on June 9, 2008, Wyeth and Impax entered into a Settlement and Release Agreement (the “Settlement Agreement”) in connection therewith; and WHEREAS, the Settlement Agreement requires the Parties, upon the Settlement Date (as such term is defined in the Settlement Agreement), to enter into this Agreement and a License Agreement (the “License Agreement”) for the grant by Wyeth to Impax of a non- exclusive license under the Licensed Patents (as such term is defined in the License Agreement) under which Impax would be permitted to make, have made, use, sell, offer for sale, import, market, promote and/or distribute the 37.5 mg, 75 mg and 150 mg dosage strength extended release venlafaxine hydrochloride capsules that are the subject of ANDA 78-057 filed by Impax on or about December 15, 2005 with the FDA for the treatment of XXXXX , subject to the terms and conditions of the License Agreement. NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereto agree as follows: 1. DEFINITIONS.
The following capitalized terms shall have the following meanings for all purposes of this Agreement: 1.1. “Affiliate” of any Party shall mean any Person, directly or indirectly controlling, controlled by, or under common control with such Party. For purposes of this Section 1.1, “control” shall mean (a) in the case of corporate entities, direct or indirect ownership of more than fifty percent (50%) of the stock or shares having the right to vote for the election of directors and (b) in the case of non -corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity
interest with the power to direct the management and policies of such non-corporate entity, provided, however , for purposes of this Agreement, the term “Affiliate” shall not include subsidiaries in which a Party or its Affiliates owns a majority of the ordinary voting power to elect a majority of the Board of Directors, but is restricted from electing such majority by contract or otherwise, until such time as such restrictions are no longer in effect.
1.2. “Agency ” shall mean any applicable supra-national, federal, national, regional, state or local regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to the Marketing, sale, distribution or Promotion of the Product.
1.3. XXXXX .
1.4. XXXXX .
1.5. “Applicable Laws ” shall mean (a) the American Medical Association Guidelines on Gifts to Physicians from Industry, (b) the PhRMA Code on Interactions with Healthcare Professionals, (c) the FD&C Act and all other federal, state and local laws, and (d) the rules, regulations, guidance, guidelines and requirements of all Agencies in effect from time to time applicable to the manufacture, marketing, advertising, promotion, distribution and sale of the Product, in each case as applicable to a Party’s obligations hereunder.
1.6. XXXXX .
1.7. XXXXX .
1.8. “Breach ” shall have the meaning set forth in Section 9.2.
1.9. “Breaching Party ” shall have the meaning set forth in Section 9.2.
2
1.10. “Business Day ” shall mean any day other than (a) a day which is a Saturday or a Sunday or (b) a day on which banks in New York City, New York are authorized or obligated by law or executive order to not open or remain closed.
1.11. “Calendar Quarter ” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30, or December 31, for so long as this Agreement is in effect.
1.12. “Claims ” shall have the meaning set forth in Section 8.1.
1.13. “Commercially Reasonable Efforts” shall mean commercially reasonable efforts and resources.
1.14. “Competing Product ” shall mean any product that is labeled to treat one or more indications, illnesses or conditions that the then -current Product is also labeled to treat.
1.15. “Confidential Information ” shall mean any proprietary technical, business and Marketing information of the other Party (including, without limitation, all sales and Marketing plans) disclosed by one Party to the other under this Agreement after the Effective Date, and whether or not such information is identified as confidential at the time of disclosure. This Agreement (including the existence and terms and conditions thereof) shall be considered Confidential Information of each Party.
1.16. “Contract Year” shall mean any of Contract Year 1, Contract Year 2 or Contract Year 3.
1.17. “Contract Year 1 ” shall mean the period beginning on the Initiation Date and ending on the day prior to the first anniversary of the Initiation Date.
1.18. “Contract Year 2 ” shall mean the period beginning on the first day following Contract Year 1 and ending on the day prior to the second anniversary of the Initiation Date.
1.19. “Contract Year 3 ” shall mean the period beginning on the first day following Contract Year 2 and ending on the day prior to the third anniversary of the Initiation Date.
1.20. “CPI ” shall mean the Consumer Price Index for All Urban Consumers (CPI-U): U.S. City Average, published by the U.S. Department of Labor.
1.21. “Cumulative Detail Maximum ” shall have the meaning set forth m Section 2.6.12(a).
1.22. “Cumulative Details ” shall mean, with respect to a given period of time period, the XXXXX actually performed during such period.
3
1.23. “Detail ” shall mean a face-to-face meeting, in an individual or group practice setting, between a Neurologist and one or more Impax PSRs during which a complete Product presentation that is consistent with Wyeth’s marketing and promotional strategies as communicated to Impax, is communicated to such Neurologist, and which meeting may also involve Sampling. When used as a verb, “Detail” shall mean to engage in a Detail. A complete Product presentation made to more than one neurologist shall constitute a separate Detail for each participating Neurologist (e.g., a complete presentation made to three Neurologists simultaneously shall constitute three Details.)
1.24. “Detailed Product ” shall mean the Product and all prior products designated by Wyeth as the Product pursuant to this Agreement, including, without limitation, the Initial Product.
1.25. “Disclosing Party ” shall mean the Party who is disclosing its Confidential Information to the Receiving Party.
1.26. “Early Initiation Notice ” shall have the meaning set forth in Section 2.2.
1.27. “Extra Detail” shall have the meaning set forth in Section 2.6.12(b).
1.28. “FDA ” shall mean the United States Food and Drug Administration, or any successor entity thereto.
1.29. “FD&C Act” shall mean the United States Federal Food, Drug, and Cosmetic Act, as amended, and the rules and regulations promulgated thereunder.
1.30. “Impax Baseline PSR Cost ” shall mean the Impax PSR Cost for the XXXXX the Initiation Date.
1.31. “Impax Cost Adjustment ” shall mean, with respect to any Contract Year, XXXXX .
1.32. “Impax Cost Increase ” shall mean, with respect to any Contract Year, XXXXX .
1.33. “Impax Director of Sales ” shall mean Impax’s Vice President of Sales and Marketing, or a position of similar seniority occupied by a full-time employee of Impax, which position has primary oversight responsibility for the implementation of Impax’s obligations under this Agreement, for leading and supervising the Impax Sales Management Team and, in conjunction with the Impax Sales Management Team, for leading and supervising the Impax PSRs.
4
1.34. “Impax Personnel ” shall mean the Impax PSRs, the Impax Sales Management Team and any other employee, representative or agent of Impax or any Permitted Subcontractor that is involved in performing Impax ’s obligations under this Agreement.
1.35. “Impax PSR ” shall mean a professional sales representative who is an employee of either (a) Impax or (b) a Permitted Subcontractor (in accordance with Section 2.4 below), which professional sales representative is responsible for Detailing the Product to Neurologists in accordance with this Agreement.
1.36. “Impax PSR Cost” shall mean, with respect to any Contract Year, for the Impax Baseline Cost, with respect to the twelve (12) month period ending on the Initiation Date, XXXXX . In the event that, during any Contract Year, Impax provides Impax PSRs who are employees of Impax rather than employees of a Permitted Subcontractor, the Parties shall agree in good faith on a method for XXXXX .
1.37. “Impax Regional Manager ” shall mean a full time employee of Impax who is responsible for supervising Impax PSRs in a specified collection of sales territories.
1.38. “Impax Sales Force ” shall mean the Impax PSRs and the Impax Sales Management Team.
1.39. “Impax Sales Management Team ” shall mean (a) the Impax Regional Managers; (b) Impax’s Director of Sales Operations or equivalent thereof; and (c) the Impax Director of Sales.
1.40. “Impax Supervisory Costs ” shall mean, with respect to any Contract Year, that portion of XXXXX , determined in accordance with GAAP on a consistent basis.
1.41. “IMS ” shall mean IMS Health Incorporated.
1.42. “Incentive Fee ” shall have the meaning set forth in Section 3.4.
5
1.43. “ XXXXX ” shall mean, with respect to any Product and any Contract Year, the XXXXX .
1.44. “ XXXXX ” shall mean, XXXXX : (a) XXXXX , and
(b) XXXXX . In the case of any Product that is Detailed under this Agreement for only a portion of a Contract Year (a “Partial Contract Year”), XXXXX shall be determined by reference to such Partial Contract Year by determining the following on the basis of such Partial Contract Year rather than the full Contract Year: XXXXX .
1.45. “Indemnified Party ” shall have the meaning set forth in Section 8.3.
1.46. “Indemnifying Party ” shall have the meaning set forth in Section 8.3.
1.47. “Initial Product ” shall mean XXXXX under the brand name XXXXX in the Territory.
1.48. “Initial Training ” shall have the meaning set forth in Section 2.6.8(a).
1.49. “Initiation Date” shall mean XXXXX , or such earlier date as may be established pursuant to Section 2.2.
1.50. “Market” shall mean, when used as a verb, to market, sell, distribute, Promote, or advertise a product.
1.51. “XXXXX ” shall mean, with respect to any Product and any period, the XXXXX for the Product in the Territory during such period XXXXX in the Territory during such period, XXXXX for the Initial Product shall be the XXXXX .
1.52. “Minimum Detail Requirement” shall have the meaning set forth in Section 2.6.12(a).
1.53. “Monthly Detail Report ” shall mean, collectively, the raw data, written report and other information that Impax is required to deliver to Wyeth on a monthly basis pursuant to Section 4.2.
6
1.54. “XXXXX” shall mean the XXXXX .
1.55. “Neurologist ” shall mean a medical doctor who is (a) licensed to practice medicine in the Territory, (b) certified in the practice of neurology by the American Board of Psychiatry and Neurology and (c) identified as a neurologist or as practicing any subspecialty of neurology, other than pediatric neurology or any pediatric subspecialty, based on the American Medical Association specialty code contained within the monthly prescriber log delivered by IMS (or such other Third Party vendor as Wyeth may utilize). “Neurologist” shall also include any nurse practitioner or physician’s assistant having prescribing authority and acting under the supervision of a Neurologist, provided, however, that for the purpose of determining the number of Details, (i) any nurse practitioner or physician’s assistant together with his or her supervising Neurologist shall be treated as a single Neurologist and (ii) any nurse practitioner or physician ’s assistant shall be treated as being under the supervision of only one Neurologist.
1.56. “New Hire Training ” shall have the meaning set forth in Section 2.6.8(b).
1.57. “Non -Breaching Party ” shall have the meaning set forth in Section 9.2.
1.58. “XXXXX ” shall mean a XXXXX .
1.59. “Permissible Initiation Dates ” shall mean each of the following: XXXXX .
1.60. “Permitted Subcontractor ” shall have the meaning set forth in Section 2.4.
7
1.61. “Person ” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
1.62. “Prescribing Information ” shall mean the prescribing information published by Wyeth in connection with the Marketing of the Product.
1.63. “Primary Detail ” shall mean a Detail in which Product information is communicated by an Impax PSR to a XXXXX , in each case subject to the provisions of Section 2.6.12(b), with the specified content as defined from time to time by Wyeth within its reasonably exercised discretion, where (a) such information is the first such product information communicated by such Impax PSR, (b) the predominant portion of time and emphasis during such communication is focused on the Product and (c) such Detail involves the communication of information with respect to no more than three (3) products.
1.64. “Primary Detail Price ” shall have the meaning set forth in Section 3.1.
1.65. “Product ” shall mean the Initial Product or such other product as Wyeth may designate from time to time pursuant to Section 2.3 to have Detailed by Impax for Wyeth under this Agreement.
1.66. “Product Substitution Notice ” shall have the meaning set forth in Section 2.3.1.
1.67. “Promotion” shall mean those activities, including, without limitation, detailing and distributing samples of a product, normally undertaken by a pharmaceutical company’s sales force to implement marketing plans and strategies aimed at encouraging the appropriate use of a particular prescription pharmaceutical product. When used as a verb, “Promote” shall mean to engage in such activities.
1.68. “Quarterly Detail Minimum ” shall mean XXXXX ( XXXXX ) Cumulative Details (such amount to be prorated for any partial period of three consecutive calendar months, including that portion of such period during which there is a downward adjustment as provided in this Section 1.68), provided that the Quarterly Detail Minimum shall be adjusted XXXXX .
1.69. “Quarterly Details” shall mean the number of Cumulative Details performed by Impax during a given Calendar Quarter.
8
1.70. “Quarterly Meeting ” shall mean those meetings between Impax and Wyeth as described in Section 2.8.
1.71. “Receiving Party ” shall mean the Party who is receiving Confidential Information from the Disclosing Party.
1.72. “Refresher Training” shall have the meaning set forth in Section 2.7.6(c).
1.73. “Retired Neurologist ” shall mean a Neurologist that is deceased or is no longer practicing in the Territory.
1.74. “Sales Call ” shall mean an interaction between an Impax PSR and a Neurologist in which the Product is the subject of either a Primary Detail or a Secondary Detail.
1.75. “Sales Call Plan” shall mean the plan established from time to time pursuant to Section 2.6.11, which sets forth the Detailing reach (i.e., number of Neurologists) and frequency (i.e., number of Details per Neurologist and the relevant timing of such Details) objectives for the Impax PSRs.
1.76. “Sample ” shall mean a unit of the Product packaged as a sample, as used by Wyeth, that is not intended to be sold and is intended to promote the sale of the Product. When used as a verb, “Sample ” shall mean to provide Samples to Neurologists.
1.77. “Sample Audit ” shall have the meaning set forth in Section 10.5.
1.78. “Sample Carry Program ” shall have the meaning set forth in Section 10.4.
1.79. “Sample Receipt Forms ” shall mean those multi-part forms, whether paper or electronic, supplied by Impax or Impax’s Permitted Subcontractor for the purpose of recording Detail and Sample activity performed by Impax PSRs during Sales Calls. These forms shall also be used as Sample receipts on which to obtain a Neurologist’s signature in acknowledgment of receipt of Samples. Each Sample Receipt Form shall include, at a minimum, the information set forth in Schedule 1.79.
1.80. “Secondary Detail ” shall mean a Detail in which information about the Product is communicated by an Impax PSR to a XXXXX , in each case subject to the provisions of Section 2.6.12(b), with the specified content as defined from time to time by Wyeth within its reasonably exercised discretion, where (a) such information is the second product information communicated by such Impax PSR, (b) the amount of time and emphasis of such communication is less than that for the communication of information of the product that is the subject of the primary Detail during such communication, but is more than that for the communication of information with respect to any other product that is promoted during such Sales Call and (c) such
9
Detail involves the communication of information with respect to no more than three (3) products.
1.81. “Secondary Detail Price ” shall have the meaning set forth in Section 3.1.
1.82. “Substitution Date” shall have the meaning set forth in Section 2.3.1.
1.83. “XXXXX ” shall have the meaning set forth in Section 2.7.3.
1.84. “XXXXX” shall mean, with respect to any Product and any period, the XXXXX during such period XXXXX .
1.85. “XXXXX” shall mean the XXXXX .
1.86. “XXXXX ” shall mean the XXXXX identified by Wyeth from time to time as XXXXX .
1.87. “XXXXX ” shall mean any XXXXX other than a XXXXX .
1.88. “Term ” shall have the meaning set forth in Section 9.1.
1.89. “Territory” shall mean the fifty (50) states of the United States and the District of Columbia.
1.90. “Therapeutic Category ” shall mean, with respect to any Product, the therapeutic category or categories for which IMS reports prescriptions written for such Product and other products included in the same category or categories.
1.91. “Third Party ” shall mean any Person other than Wyeth, Impax or any of their respective Affiliates.
1.92. “Trademark” shall have the meaning set forth in Section 2.9.2.
1.93. “Wyeth Improvements ” shall have the meaning set forth in Section 2.9.6.
1.94. “Wyeth Policy on Sales and Marketing Practices ” shall mean Wyeth’s promotion guidelines for the Product, as the same may be amended from time to time by Wyeth, in its sole discretion.
10
1.95. “Wyeth Sales Training Program ” shall mean the sales training program described in Schedule 1.95. 2. APPOINTMENT AND OBLIGATIONS 2.1 Appointment . Wyeth hereby appoints Impax, on a non-exclusive basis, and Impax agrees, to Detail the Product in the Territory to Neurologists, as of the Initiation Date and thereafter during the Term in accordance with the terms and conditions of this Agreement. Impax, without charge or expense to Wyeth (other than as expressly set forth in Article 3 of this Agreement), shall provide all facilities, personnel (including management and sales representatives) and other resources as are reasonably necessary to successfully perform Impax’s obligations under this Agreement. The Parties specifically agree that, without Wyeth’s written consent, which Wyeth may withhold in its sole discretion, Impax shall not intentionally Detail the Product to any physician other than a Neurologist, sell or distribute the Product, place journal or other advertisements for the Product, issue press releases regarding the Product, conduct opinion leader development activity in connection with the Product, establish or participate in advisory boards concerning the Product, participate in or conduct peer selling activity concerning the Product, enter into or discuss with customers or potential customers (including, without limitation, managed care organizations) contracts for the sale of or discounts or rebates on the sale of the Product, conduct other general marketing activities with respect to the Product, or initiate, conduct or participate in any studies for the Product other than Detailing of the Product to the extent expressly permitted by this Agreement.
2.2 Adjustment to Initiation Date . Impax shall begin Detailing the Product in accordance with this Agreement no later than XXXXX . In the event that Impax procures the necessary resources and is prepared to begin Detailing the Product prior to XXXXX , Impax shall promptly notify Wyeth in writing (such notice referred to herein as the “Early Initiation Notice”). If Wyeth receives the Early Initiation Notice XXXXX , then the Initiation Date shall automatically be adjusted to July 1, 2008. If Wyeth receives the Early Initiation Notice at any other time prior to XXXXX , then the Initiation Date shall automatically be adjusted XXXXX following Wyeth’s receipt of such Early Initiation Notice, provided that in no event shall the Initiation Date occur after XXXXX . Notwithstanding any provision of this Section 2.2 to the contrary, in no event shall Impax permit any member of the Impax Sales Force to begin Detailing the Product before such individual has successfully completed all training required pursuant to Section 2.6.8.
2.3 Wyeth ’s Option to Designate Substitute Products . 2.3.1 General . During the Term, Wyeth may, from time to time and in its sole discretion, elect to designate an alternate product as the Product that is to be Detailed by Impax under this Agreement, provided that (a)
11
any such alternate product must (i) be indicated for the treatment of one or more neurological conditions or (ii) target one or more illnesses or conditions commonly treated by Neurologists, and (b) Wyeth may not designate more than one (1) Product to be Detailed under this Agreement at any given time during the Term. In the event Wyeth elects to substitute an alternate product as the Product pursuant to this Section 2.3.1, Wyeth shall notify Impax in writing of such substitution (each such notice referred to herein as a “Product Substitution Notice”) no later than sixty (60) days prior to the date specified in such Product Substitution Notice as the date that such alternate product is to first be Detailed pursuant to this Agreement which date shall be the later of the date of resolution of any dispute under Section 2.3.2 and the date of the completion of Initial Training for the substituted Product (the “Substitution Date”). For the avoidance of doubt, Wyeth may elect to substitute an alternate product as the Product under this Agreement on one or more occasions during the Term, in its sole discretion provided that, without Impax’s consent, such substitution shall not occur more than once in any XXXXX period. Notwithstanding the foregoing limitation, in the event that a Product undergoes a recall or voluntary withdrawal from the market due to one or more adverse events, regulatory action, potential or actual infringement of any patent or other intellectual property right of any Third Party, or other reasons outside of Wyeth’s control, Wyeth may, and shall, promptly designate a substitute Product. In such event and subject to the limitations set forth in Section 2.6.12(a), with respect to the time period for which Impax is not able to Detail any Product, Wyeth shall pay to Impax XXXXX .
2.3.2 Designation of Competitive Products . Notwithstanding any provision of Section 2.3.1 to the contrary, if at the time Wyeth delivers a Product Substitution Notice (a) Impax owns or otherwise controls a product (i) that Impax is detailing to Neurologists or Promoting, selling or marketing; (ii) for which Impax or any of its Affiliates has filed or, during the Term, expects to file, an accepted marketing approval application with the FDA; and which Impax reasonably expects to detail, Promote, sell or market during the Term or (b) Impax has previously entered into an agreement with a Third Party that obligates Impax to detail, Promote, sell or market one or more products on behalf of such Third Party, and Impax believes that the Product Substitution Notice can reasonably be expected to conflict with Impax’s activities under clauses (a) and/or (b), above then Impax shall so notify Wyeth with five (5) business days of delivery of such Product Substitution Notice. Within thirty (30) business days after receipt of Impax’s notification, Wyeth will advise Impax whether it agrees that such a conflict is reasonably likely. If Wyeth agrees, Wyeth may elect, in its sole discretion, to either (i) designate another substitute product as the
12
Product pursuant to Section 2.3.1 or (ii) require Impax to continue detailing the then-current Product. If Wyeth disagrees as to whether a conflict is reasonably likely, the matter will be referred to the Wyeth Pharmaceuticals President, U.S., Pharmaceuticals and Women’s Health Care and the President of Impax Pharmaceuticals for further review, which review shall be completed within ten (10) Business Days after such referral. If after such referral, either Party, in its reasonable judgment, believes a conflict is reasonably likely, Wyeth may elect, in its sole discretion, to either (i) designate another substitute product as the Product pursuant to Section 2.3.1 or (ii) require Impax to continue detailing the then-current Product.
2.3.3 Alternate Product Training . Following Wyeth’s delivery of a Product Substitution Notice, each Party shall use Commercially Reasonable Efforts to complete their respective Impax PSR training obligations under Sections 2.6.8 and 2.7.6(a) with respect to the alternate product designated in such Product Substitution Notice prior to the relevant Substitution Date. Impax shall ensure that no Impax PSR engages in the Detailing of such alternate product before such individual has successfully completed all training required pursuant to Section 2.6.8. 2.4 Permitted Subcontractors . Impax may enter into written agreements with one or more nationally recognized contract sales organizations, whether such organization is a Third Party or an Affiliate of Impax, having experience in the promotion and detailing of pharmaceutical products (each a “Permitted Subcontractor”) whereby each such Permitted Subcontractor provides professional sales representatives to serve as Impax PSRs for purposes of Detailing the Product hereunder; it being understood and agreed that XXXXX (“ XXXXX ”) shall be a Permitted Subcontractor. The identity of any such Permitted Subcontractor shall be subject to Wyeth’s prior approval, not to be unreasonably withheld. Impax shall provide Wyeth with a copy of any such written agreement and all amendments thereto with such Permitted Subcontractor no later than ten (10) days after execution of such agreement or amendment thereto so that Wyeth can confirm that such agreement or amendment complies with the terms of this Agreement. Impax may redact the financial terms of any such agreement to the extent that such redaction does not relate to any obligation of Impax to Wyeth hereunder. Without limiting Wyeth’s ability to withhold approval for other valid reason, any such agreement or any amendment or modification thereto shall provide for such Permitted Subcontractor to fulfill the obligations imposed under this Agreement on Impax and/or its Permitted Subcontractors and shall name Wyeth as a Third Party beneficiary with direct enforcement rights against the Permitted Subcontractor.
2.5 Undertaking not to Compete . During the Term, Impax shall not Promote to physicians, sell or market, and Impax shall cause its Affiliates and each member of the Impax Sales Force not to Promote to physicians, in the Territory, any Competing Product, provided, however , that Impax shall not be prohibited under
13
this Section 2.5 from (i) exercising its rights to sell, market and distribute XXXXX to the extent permitted under the XXXXX even if a XXXXX would otherwise be considered to be a Competing Product under this Agreement, provided that any such XXXXX is not being Promoted by any member of the Impax Sales Force that is Detailing the Product under this Agreement, or (ii) selling, marketing or distributing any generic product that is AB rated to another product XXXXX that, if sold, marketed or distributed by Impax, would otherwise be a Competing Product under this Agreement, provided such generic product is not AB rated to the Product under this Agreement, in each case provided that any such product is not being Promoted by any member of the Impax Sales Force that is Detailing the Product under this Agreement. Any breach of this provision shall constitute a basis for termination by Wyeth pursuant to Section 9.2.
2.6 Obligations of Impax . 2.6.1 Impax Sales Force . Impax shall, at its sole expense, diligently Detail the Product in the Territory in accordance with the terms and conditions of this Agreement. In connection therewith, Impax shall maintain, in the Territory, a sales force trained in accordance with this Agreement of full-time Impax PSRs to Detail the Product using promotional materials supplied to Impax by Wyeth. Impax shall not permit any Impax PSR to Detail the Product until such Impax PSR has been trained in accordance with Section 2.6.8 below and has been certified in accordance with all certification standards established by Wyeth. All Details provided by Impax PSRs shall be either Primary Details or Secondary Details, subject to the limitations set forth in Section 2.6.12. Impax shall supervise the sales force provided by it hereunder and be responsible for its remuneration and incentives. Impax shall be an independent contractor hereunder as further described in Section 5.1 and the Impax PSRs shall remain exclusively under the authority of Impax and/or Impax’s relevant Permitted Subcontractor.
2.6.2 Removal of Impax Personnel . Impax shall promptly remove any Impax Personnel from having any responsibilities relating to the Detailing of the Product under this Agreement if required by any Applicable Laws. Further, Wyeth may request Impax to promptly remove any Impax Personnel from such responsibilities if any material events relating to the Detail of the Product have occurred to justify such removal ( e.g. , failure of such Impax Personnel to comply, in connection with the performance of such responsibilities, with any Applicable Laws or the Wyeth Policy on Sales and Marketing Practices). Impax shall honor any such request to the extent that Impax is permitted to do so pursuant to applicable laws.
14
2.6.3 Sales Management . Impax shall be responsible for supervising the Impax PSRs, whether they are employees of Impax or a Permitted Subcontractor. In connection therewith, Impax shall provide a sufficient number of full time Impax employees to serve as Impax Regional Managers, such that the average ratio of Impax Regional Managers to Impax PSRs shall be no greater than XXXXX . Impax may, but shall not be obligated to appoint one or more full time Impax employees to serve as regional directors having the responsibility for supervising a group of Impax Regional Managers in a particular geographic region of the Territory. Additionally, Impax shall designate a full time Impax employee as the Impax Director of Sales who will be responsible for (i) leading and supervising the Impax Sales Management Team, (ii) together with the Impax Sales Management Team, leading and supervising the Impax PSRs, (iii) the implementation of Impax’s responsibilities hereunder and (iv) serving as Impax’s primary point of contact for communications between Wyeth and Impax regarding the Detailing of the Product by Impax hereunder.
2.6.4 Impax Personnel . Impax Personnel shall, at all times during the Term, be employees of Impax or a Permitted Subcontractor for which Impax or such Permitted Subcontractor shall have all responsibilities as an employer, including hiring, firing, compensation and promotions. Impax Personnel shall not be, and shall not be considered to be, “employees” or “joint employees” of Wyeth for any purpose as a result of their activities under this Agreement. Wyeth shall not be responsible for the control of any members of the Impax Personnel, Impax and, as applicable, its Permitted Subcontractors, shall be solely responsible for determining all conditions of employment of all Impax Personnel. Impax shall and, as applicable, shall cause its Permitted Subcontractors to, (i) maintain all necessary personnel and payroll records for all Impax Personnel; (ii) compute wages for all Impax Personnel and withhold applicable federal, state, and local taxes and Federal FICA payments; (iii) remit employee withholdings to the proper governmental authorities and make employer contributions for federal FICA and federal and state unemployment insurance payments; (iv) pay net wages and fringe benefits, if any, directly to the Impax Personnel; and (v) provide for liability and Workers’ Compensation insurance coverage for all Impax Personnel.
2.6.5 No Wyeth Benefits . Impax acknowledges and agrees that none of the Impax Personnel, nor anyone acting on its or their behalf, shall receive any employee benefits of any kind from Wyeth in connection with their activities under this Agreement. In addition, Impax (on behalf of itself and the Impax Personnel) declines any offer now or hereafter made to participate in any of Wyeth’s benefit plans or programs. The acknowledgment and declination set forth in this Section 2.6.5 is intended to apply even if Wyeth is determined to be a co -employer or
15
common law or statutory law employer of any of the Impax Personnel, including the members of the Impax Sales Force, notwithstanding the Parties’ express agreement to the contrary. Wyeth shall not maintain or procure any workers’ compensation or unemployment compensation insurance for or on behalf of the Impax Personnel.
2.6.6 Equal Opportunity Employer . Impax shall not and shall cause its Permitted Subcontractors to not discriminate because of race, color, religion, sex, age, national origin, disability, or status as a Vietnam veteran, as defined and prohibited by applicable laws, in the recruitment, selection, training, utilization, promotion, termination, or other employment-related activities concerning the Impax Personnel. In addition, Impax represents and warrants that both it and its Permitted Subcontractors each are and shall continue to be during the Term an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations including, to the extent required by such laws and regulations, Title VII of the Civil Rights Act of 1964; the Equal Pay Act of 1963; the Age Discrimination in Employment Act of 1967; the Immigration Reform and Control Act of 1986; the Americans with Disabilities Act; Executive Order 11246; the Rehabilitation act of 1972; the Vietnam Era Veterans Readjustment Assistance Act of 1975; and any applicable additions or amendments to any of the foregoing.
2.6.7 Compliance with Applicable Laws . In connection with the Detailing of the Product in the Territory, Impax shall comply and shall cause each of its employees, representatives, Permitted Subcontractors and agents, including, without limitation, all Impax Personnel, to comply with all Applicable Laws and shall do nothing which Impax knows would jeopardize the goodwill or reputation of Wyeth or the reputation of the Product. Any material breach of this provision shall constitute a basis for termination by Wyeth of this Agreement, at Wyeth ’s option, pursuant to Section 9.2.
2.6.8 Sales Training . (a) Promptly following Impax’s delivery of an Early Initiation Notice pursuant to Section 2.2, but in no event later than the Initiation Date, Impax shall cause all members of the Impax Sales Force to attend and complete the Wyeth Sales Training Program (whether in person or remotely, as determined in Wyeth’s sole discretion), as described in Section 2.7.6, to educate the Impax Sales Force on the Product and the Detailing thereof. At any time that Wyeth elects to designate an alternate product as the Product pursuant to Section 2.3, Impax shall, promptly following its receipt of the applicable Product Substitution Notice but in no event later than the Substitution Date specified therein, cause all members of the
16
Impax Sales Force to attend and complete the Wyeth Sales Training Program with respect to such alternate product (such training for the initial Product or an alternate Product, the “Initial Training”). Impax shall ensure, record and track that each member of the Impax Sales Force has successfully completed the Wyeth Sales Training Program and is certified to Detail the Product by the Wyeth Sales Training Department before such individual is permitted to engage in any activity relating to the Detailing of the then-current Product. Any Initial Training described in this Section 2.6.8(a) shall be held at a location of Wyeth’s choosing that is reasonably acceptable to Impax (unless Wyeth elects to hold such Initial Training remotely). Impax shall bear the cost of all travel, lodging, meals, compensation and ancillary expenses of all Impax Personnel who attend any Initial Training. Wyeth shall bear the cost of delivering any Initial Training pursuant to Section 2.7.6(a).
(b) After the Initial Training has occurred. Impax shall ensure, record and track that each new member of the Impax Sales Force has successfully completed the Wyeth Sales Training Program (“New Hire Training”) and is certified to Detail the Product by the Wyeth Sales Training Department before such individual is permitted to engage in any activity relating to the Detailing of the then-current Product. All New Hire Training shall be conducted by experienced Impax sales training personnel who have themselves been trained by Wyeth’s sales training personnel with respect to the Product and the Detailing thereof. Impax shall offer New Hire Training three (3) times per Contract Year, or more frequently as reasonably necessary based on turnover of the Impax Sales Force. Impax shall be responsible for all expenses incurred in connection with New Hire Training.
(c) On an ongoing basis during the Term, Impax shall ensure, record and track that each member of the Impax Sales Force successfully completes at least four (4) hours of Refresher Training every six (6) months. All Refresher Training shall be conducted by experienced Impax sales training personnel who have themselves been trained by Wyeth’s sales training personnel with respect to the Product and the Detailing thereof. Impax shall be responsible for all expenses incurred in connection with Refresher Training.
(d) In the event Impax conducts any sales training meetings related to the Product, Impax shall provide Wyeth with reasonable notice and shall allow Wyeth to have one or more Wyeth representatives attend such training at Wyeth ’s expense.
17
2.6.9 Adverse Event or Experience Reporting Procedures . Impax shall maintain standard operating procedures consistent with and comparable to Wyeth’s standard operating procedures for handling AEs and shall conduct periodic training of the Impax Sales Force in all aspects of AE reporting and maintain training records of such trainings. At Impax’s request, Wyeth will provide training to the Impax Sales Force on standard operating procedures for handling AEs.
2.6.10 Meetings . At Wyeth’s request, Impax shall cause (i) the members of the Impax Sales Management Team, other than the Impax Regional Managers, to attend, at Impax’s expense, that portion of Wyeth’s senior sales management meetings during which the Product is discussed and (ii) the Impax Regional Managers to attend that portion of the semi-annual Wyeth district managers plan of action (“POA”) meetings during which the Product is discussed. After attending each such meeting, each Impax Regional Manager shall meet with the Impax PSRs under his or her supervision to discuss the Product POA content. Impax shall provide reasonable notice to Wyeth of similar meetings conducted by Impax during which the Product is discussed and shall permit Wyeth representatives to attend any such meeting at Wyeth ’s expense.
2.6.11 Sales Call Plan . No later than thirty (30) days prior to the Initiation Date, Impax shall provide Wyeth with a copy of the proposed initial Sales Call Plan. Such Sales Call Plan shall govern the Detailing efforts of the Impax PSRs and the Impax Regional Managers. Thereafter, Impax shall propose modifications to the Sales Call Plan from time to time, but not later than sixty (60) days prior to the effective date of such modified Sales Call Plan, to reflect Wyeth’s changes to the XXXXX and as otherwise necessary to enable Impax to satisfy its obligations pursuant to Section 2.6.12.
2.6.12 Performance of Details . (a) General . During the Term, Impax shall complete no less than XXXXX ( XXXXX ) Cumulative Details (the “Minimum Detail Requirement”) and no more than XXXXX ( XXXXX ) Cumulative Details (the “Cumulative Detail Maximum”) of the Product to Neurologists in accordance with the terms of this Agreement and the then current Sales Call Plan. Without limiting the foregoing, in no event shall Impax deliver less than XXXXX ( XXXXX ) or more than XXXXX ( XXXXX ) Cumulative Details pursuant to this Agreement during any Calendar Quarter without Wyeth’s prior written consent. For the avoidance of doubt, Details completed with respect to more than one Product in the event Wyeth elects to substitute an alternate Product pursuant to Section 2.3 shall be aggregated for the purposes of determining the foregoing amounts of Cumulative Details.
18
(b) Detail Allocation . Impax shall ensure that at least XXXXX percent ( XXXXX %) of the Quarterly Details delivered by Impax in each Calendar Quarter are delivered to XXXXX . Impax shall Detail each XXXXX at least XXXXX every Calendar Quarter, but in no event XXXXX and (ii) with respect to XXXXX . In the event that Impax elects to Detail any XXXXX , Impax shall not Detail such XXXXX per Calendar Quarter. Any Details performed in excess of the limitations set forth in this Section 2.6.12 or otherwise in contravention of any provision of this Agreement (each, an “Extra Detail”) shall not be considered a Detail performed by Impax under this Agreement for any purpose, including, without limitation, for purposes of determining whether Impax has delivered the minimum number of Details that it is required to deliver during a given period. Further, notwithstanding any provision of this Agreement to the contrary, Wyeth shall have no obligation to pay Impax any amount with respect to the performance of any Extra Detail.
(c) Detail Standards . Impax shall ensure that each Detail performed hereunder is conducted in strict accordance with the then-current Wyeth Policy on Sales and Marketing Practices and the terms of this Agreement. Impax shall cause each Impax PSR when conducting each Detail to leave a business card with each Neurologist Detailed by such Impax PSR, which business card shall identify the Impax PSR as an employee or representative of Impax. In no event shall any member of the Impax Sales Force or any other Impax Personnel at any time identify, either expressly or through implication, themselves as a an employee or agent of Wyeth. 2.6.13 Data Collection and Reporting Systems . Impax shall, at no expense to Wyeth, establish and, during the Term and the three (3) year period following the expiration or earlier termination of this Agreement, maintain data collection and reporting systems, for all Details performed and all Samples distributed by any member of the Impax Sales Force, which systems and the corresponding data collection and reporting procedures shall be in compliance with Wyeth’s accountability requirements, as the same may be communicated to Impax by Wyeth in writing from time to time. In connection therewith, Impax, at its own expense, shall provide each Impax Regional Manager and each Impax PSR with a laptop computer and the necessary software to enable recording, reporting and regular transmission of data over a secured line consistent with Wyeth standards. Additionally, Impax, at its own expense, shall provide each member of the Impax Sales Force with email and voicemail access for use by Impax, each of its Permitted
19
Subcontractors and Wyeth in communicating with the Impax Sales Force, as the same may be communicated to Impax by Wyeth in writing from time to time. Wyeth and Impax shall agree on a data format to provide for transfer of Detail and Sample activity from Impax to Wyeth no later than sixty (60) days prior to the Initiation Date. Wyeth shall provide Impax a file format for the purpose of sending Impax PSR information to Wyeth no later than thirty (30) days prior to the initiation of the Initial Training.
2.6.14 Promotional Claims . Impax shall limit the claims of efficacy and safety for the Product made by Impax Personnel to those which are consistent with (i) Wyeth’s approved labeling for the Product in the Territory and (ii) the Wyeth Sales Training Program. Impax shall not add, delete or modify claims of efficacy or safety in its Detailing of the Product nor make any changes in Promotion materials and literature provided by Wyeth. Impax’s Detailing of the Product shall be in strict adherence to all regulatory, professional and legal requirements including, without limitation, FDA’s regulations and guidelines concerning the advertising and promotion of prescription drug products, the American Medical Association’s Guidelines on Gifts to Physicians, the PhRMA Code on Interactions with Health Care Professionals, the ACCME Standards for Commercial Support of Continuing Medical Education, the Wyeth Policy on Sales and Marketing Practices, and any amendments or updates applicable to any of the foregoing. Upon notice to Impax of any breach of this Section 2.6.14, Impax shall ensure that there is no continuance of any such offending activity. Without limiting any other provision of this Agreement or any remedy Wyeth may have hereunder, any breach of the previous sentence or any intentional breach by Impax of the other provisions of this Section 2.6.14 by Impax shall constitute a material breach for the purposes of Section 9.2.
2.6.15 Promotional Materials . The determination of the content and the quantity of any promotional materials related to the Product shall, subject to Section 2.7.7, be the sole responsibility of Wyeth. Wyeth shall send such promotional material, at its own expense, to Impax at a single location within the Territory and Impax shall be responsible, at its own expense, for distributing such promotional materials to the Impax Sales Force. In connection with the Detailing of the Product, Impax shall use only promotional materials provided by Wyeth which shall be used only for the purposes of this Agreement and all unused quantities of such promotional materials shall be returned to Wyeth upon expiration or earlier termination of this Agreement. Impax shall not, and shall cause its Permitted Subcontractors, each member of the Impax Sales Force to not, alter, in any way, any promotional materials provided by Wyeth hereunder. All copyright and other intellectual property rights in said promotional materials shall remain vested solely in Wyeth. Impax shall not create, distribute or use sales, promotion or
20
other similar material relating to the Product without the prior written consent of Wyeth. If any promotional materials provided to Impax by Wyeth need to be withdrawn from use for any reason, Wyeth shall notify Impax of such withdrawal and Impax shall cooperate with Wyeth in effectuating any such withdrawal. Wyeth shall reimburse Impax for any reasonable and documented incremental out-of-pocket costs incurred by Impax in connection with conducting such withdrawal, except to the extent the withdrawal is attributable to (a) the breach of this Agreement by Impax or (b) the negligence or intentional misconduct of Impax or any of the Impax Personnel, in which event Impax shall (i) bear its own costs in connection with taking such actions and (ii) reimburse Wyeth for any reasonable and documented out-of-pocket costs incurred by Wyeth in connection with conducting such withdrawal to the extent that such withdrawal is attributable to such breach, negligence or intentional misconduct.
2.6.16 Sample Receipt Forms . Each Impax PSR shall complete a Sample Receipt Form with respect to each Sample disbursed by such Impax PSR. In each instance where a Sample is disbursed, the Impax PSR providing such Sample shall ensure that the Neurologist receiving such Sample signs the applicable Sample Receipt Form in acknowledgment of receipt of such Sample. Each Impax PSR shall mail to Impax or Impax’s Permitted Subcontractor (as determined by Impax), in pre- addressed, postage-paid envelopes provided by Impax, or send via electronic means, on a regular basis no less frequently than quarterly the original completed Sample Receipt Forms for Sample disbursements performed by such Impax PSR during the period covered by the report. A copy of all such Sample Receipt Forms shall be kept by Impax or its Permitted Subcontractor. Impax shall ensure that each Impax PSR fills out the Sample Receipt Forms accurately, completely and timely. For the avoidance of doubt, the foregoing obligations are in addition to the procedures set forth in Article 10.
2.6.17 Communications with Sales Representatives . Impax shall have full responsibility for the dissemination of information regarding the Product to the Impax Sales Force based on information provided by Wyeth. All written communications from Impax to any member of the Impax Sales Force containing any substantive drug information about the Product other than the Product name, description and price shall be subject to prior written approval by Wyeth. Communications such as tactical memos, competitive alerts and other routine business reports which contain no substantive drug information about the Product shall not require approval by Wyeth.
2.6.18 Sales Force Compensation Plan . Impax shall establish and, throughout the Term, maintain a sales force compensation and incentive plan. The Impax sales force compensation and incentive plan may provide for
21
compensation based, in part, on activities outside of Impax’s responsibilities under this Agreement (e.g., the promotion of other pharmaceutical products by the Impax PSRs to the extent permitted by this Agreement), provided, however , that such sales force compensation and incentive plan shall include, for each member of the Impax Sales Force, as part of the total target bonus compensation available to be earned, a target bonus compensation based on XXXXX , and provided, further , that the percentage of such target bonus compensation based on activities under this Agreement shall in no event be XXXXX percent (XXXXX %). 2.7 Obligations of Wyeth . 2.7.1 Marketing Planning, Strategy and Content . Wyeth shall have exclusive responsibility and authority for all Marketing planning and strategy for the Product and the content of promotional message(s) for the Product. Wyeth reserves the right, at its sole discretion and at any time, to change the Marketing and sales strategy and tactics for the Product, the promotional message(s) for the Product and the marketing budget for the Product.
2.7.2 Product Promotion Guidelines . Wyeth shall provide Impax with a complete copy of the Wyeth Policy on Sales and Marketing Practices no later than thirty (30) days prior to the Initiation Date. Wyeth may subsequently revise the Wyeth Policy on Sales and Marketing Practices upon written notice to Impax, which notice shall specify all relevant revisions to the then -current Wyeth Policy on Sales and Marketing Practices.
2.7.3 XXXXX . Wyeth shall have exclusive responsibility and authority for the establishment and maintenance of a XXXXX . Impax shall provide Wyeth with Impax’s XXXXX the Initiation Date. Wyeth shall provide the XXXXX to Impax at least thirty (30) days prior to the Initiation Date, with the Parties’ expectation being that substantially all of the XXXXX shall have been selected from XXXXX . For clarity, any individual who is included on the XXXXX shall be deemed a XXXXX , regardless of whether such individual’s credentials meet the technical definition of the term “Neurologist” in Section 1.55. Wyeth shall update the XXXXX
22
on a semi-annual basis such that the XXXXX . The XXXXX may be modified by Wyeth on a more frequent basis from time to time within its reasonably exercised discretion upon sixty (60) days prior written notice to Impax.
2.7.4 Pricing . Wyeth shall have exclusive responsibility and authority with respect to the pricing of the Product. Wyeth shall inform Impax of list price increases or decreases for the Product in the Territory at the time such information is generally announced to the trade by Wyeth.
2.7.5 Distribution and Sale of Product . Except to the extent that Impax distributes Samples of the Product to Neurologists in accordance with this Agreement, Wyeth shall have the sole right and responsibility to arrange for all distribution of the Product in the Territory, to effect and account for all sales of the Product in the Territory, and to establish and modify the terms and conditions with respect to the sale of the Product in the Territory, including any terms and conditions relating to or affecting the price at which the Product will be sold, any discount attributable to payments on receivables, distribution of the Product, credit to be granted or refused and the like.
2.7.6 Training . (a) Wyeth shall cause its sales trainers to conduct an Initial Training of all of the members of the Impax Sales Force with respect to the Product and the Detailing thereof in accordance with the Wyeth Sales Training Program, it being understood and agreed that Impax is responsible for general sales training. Any Initial Training shall be provided at such times and locations as Wyeth may designate and may be conducted remotely at Wyeth’s election; provided that such times and locations provide Impax with a reasonable opportunity to comply with Impax’s obligations under Section 2.6.8(a). In connection with any Initial Training, Wyeth shall provide training materials relating to the initial training in sufficient quantities to adequately train the Impax Sales Force. Wyeth shall be responsible for all expenses that it incurs in connection with delivering training pursuant to this Section 2.7.6(a). Pursuant to Section 2.6.8(a), Impax shall bear the cost of all travel, lodging, meals, compensation and incidental expenses of all Impax Personnel who attend any such training.
(b) Within a reasonable period of time after the Initiation Date and at reasonable intervals throughout the Term, Wyeth shall cause one or more of Wyeth’s sales trainers to train Impax’s designated professional sales trainers, who, in turn, will conduct New Hire
23
Training and Refresher Training of the Impax Sales Force with respect to the Product and the Detailing thereof.
(c) From time to time during the Term, Wyeth shall provide electronic training materials containing new information relating to the Product or the Detailing thereof as Wyeth deems necessary or appropriate to enable Impax to conduct ongoing training of the Impax Sales Force in regard thereto ( “Refresher Training ”). 2.7.7 Promotional Materials . Wyeth shall use its Commercially Reasonable Efforts to provide Impax with promotional materials for Detailing the Product to Neurologists (in such quantities as Wyeth shall reasonably determine, taking into account the number of Details such Impax PSRs are expected to deliver and which are the same as or comparable to the promotional materials Wyeth supplies to its own Sales Force with respect to the Product). Impax shall be responsible, at its own expense, for distributing such promotional materials to the Impax PSRs in accordance with Section 2.6.15.
2.7.8 Samples . Wyeth shall use Commercially Reasonable Efforts to provide Impax with Samples for distribution to Neurologists as set forth in Article 10 of this Agreement
2.7.9 Promotion by Wyeth . Wyeth shall use Commercially Reasonable Efforts (i) to minimize any targeted detailing of the Product to XXXXX and (ii) not to include XXXXX for use by Wyeth or any of its Affiliates or Third Parties for use in Promoting the Product. Except as expressly provided herein, Wyeth reserves the right to Promote, detail or distribute Samples of the Product to any physician or other health care provider, at any time during the Term and/or to retain one or more of its Affiliates and/or one or more Third Parties to Promote, detail or distribute Samples of the Product to any such physician or other health care provider. 2.8 Coordination Meetings . Two (2) or more representatives of Wyeth and Impax shall meet periodically as needed, but in no event less than once during each Calendar Quarter during the Term, to discuss strategies relating to Promoting the Product, including, without limitation, Detailing, field funding and program opportunities. Each Party shall appoint a primary contact person (which, in Impax’s case, shall be the Impax Director of Sales and, in Wyeth’s case, shall be Wyeth’s Global Business Manager for the Product) to coordinate on its behalf meetings and communications between the Parties. Each Party’s primary contact person shall involve such Party’s functional experts as required to discuss any issues that arise under this Agreement. Wyeth shall consider, in good faith, input from Impax in reaching its decisions; however, Wyeth shall have final authority
24
and responsibility for the Product’s Promotional strategy, identification of XXXXX and for the content and selection of the sales and Promotional material which it shall provide Impax under the terms of this Agreement.
2.9 Ownership of Product . 2.9.1 Ownership of Product . Wyeth retains and shall retain all proprietary and property interests in and to the Product. Without limiting the foregoing, Wyeth shall retain title to all Samples until delivered to Neurologists in accordance with this Agreement. Impax shall not have nor represent that it has any control over or proprietary or property interests in the Product or any Samples thereof. Nothing contained in this Agreement shall be deemed to grant to Impax, its Affiliates or any Third Party any license, right, title or interest in or to any patent, trademark, copyright, domain name, trade secret or other similar property of Wyeth except as may be authorized, in writing, by Wyeth, as applicable, for Impax to Detail the Product pursuant to this Agreement.
2.9.2 Trademark . The initial Product shall be Detailed by Impax under the trademark XXXXX owned by Wyeth. Any replacement product designated by Wyeth pursuant to Section 2.3 shall be Detailed by Impax under the trademark designated for such product in the relevant Product Substitution Notice. This Agreement does not grant to Impax any property right or interest including goodwill in the trademark XXXXX or any other trademarks, designs, logos, slogans, taglines, trade names, domain names or trade dress which Wyeth or any of its Affiliates own, use or control (collectively, the “Wyeth Trademarks”), it being understood and agreed that Impax does not require any such right or interest to fulfill its obligations under this Agreement. Impax recognizes the validity of the right, title and interest of the Wyeth Trademarks, in any country in connection with the Product, whether registered or not. Impax shall not use, and shall cause its Affiliates and Permitted Subcontractors not to use, or register in any way any Wyeth Trademark or any trademarks, designs, logos, slogans, taglines, trade names, domain names or trade dress in the course of performing Impax ’s obligations under this Agreement which are confusingly similar to any Wyeth Trademark.
2.9.3 Trademark Infringement . Impax shall promptly advise Wyeth of all cases of Third Party infringement of trademarks associated with the Product that come to Impax’s attention, and shall, at the specific written request of Wyeth, render all assistance reasonably requested in connection with any action taken by Wyeth in relation to any alleged trademark infringement. The control of such action, including whether to initiate action and/or to settle, shall solely be under the control of Wyeth and Wyeth shall retain for its own account any damages or other
25
monetary relief in connection with such action. Impax shall not undertake any action with respect to infringement of such trademarks or trade names without Wyeth ’s prior written consent.
2.9.4 Patents and Patent Infringement . This Agreement does not grant to Impax, its Affiliates or any other Third Party any license, right, title or interest in or to any Patent Right owned or controlled by Wyeth or its Affiliates. Impax shall promptly advise Wyeth of all cases of Third Party infringement of patents associated with the Product that come to Impax’s attention, in the course of performing Impax’s obligations under this Agreement and shall, at the written request of Wyeth and, as between Impax and Wyeth, at Wyeth’s cost, provide any information or documents generated or obtained in connection with this Agreement as may be requested by Wyeth for use by Wyeth in connection with actions taken or to be taken by Wyeth in relation to such alleged patent infringement. The control of such action, including whether to initiate action and/or to settle, shall solely be under the control of Wyeth.
2.9.5 No Implied Licenses . Except as expressly set forth in this Agreement, this Agreement provides Impax with no right, title or interest, either express or implied, by estoppel or otherwise, in or to any intellectual property rights owned or controlled by Wyeth or any of Wyeth’s Affiliates, including, without limitation, any Patent Right, trademark, copyright, domain name, trade secret or know -how.
2.9.6 Ownership of Improvements . Wyeth or its designee shall own all right, title and interest in and to any and all inventions, discoveries, know how and other intellectual property, including any improvements thereto, that are conceived, reduced to practice or otherwise made by Impax or any of its employees or agents (whether solely or jointly with others) as a result of or in connection with the performance of its obligations under this Agreement to the extent related to any of the Detailed Products and any patent, trade secret or other intellectual property rights with respect thereto (collectively, the “Wyeth Improvements”). Impax shall promptly (a) disclose to Wyeth in writing the conception, reduction to practice or making of any Wyeth Improvements, as the same are conceived of, reduced to practice or made and (b) without additional consideration, and, at Wyeth’s expense (for reasonable and documented out-of-pocket costs incurred), assign and transfer, and cause each of its employees and agents to assign and transfer, to Wyeth or its designee any and all right, title and interest they each may have in and to such Wyeth Improvements throughout the world.
2.9.7 No Distribution . It is recognized by the Parties that Impax and/or its Permitted Subcontractors may from time to time receive orders for the Product directly from Third Parties. In such event, Impax promptly
26
shall advise or shall cause the Impax PSRs to advise the customer that neither Impax nor its Permitted Subcontractors are authorized to accept orders for the Product, but that Impax will forward the order to Wyeth for acceptance or rejection at Wyeth’s sole discretion. Immediately thereafter, Impax shall transmit said orders and purchase order numbers promptly to Wyeth for acceptance or rejection at Wyeth ’s sole discretion. 3. PAYMENTS. 3.1 Detail Fee . In consideration for Impax’s Detailing of the Product during the Term, subject to Section 3.3, Wyeth shall pay to Impax a fee (the “Detail Fee”) in the amount of (i) XXXXX dollars ($ XXXXX ) for each Primary Detail (the “Primary Detail Price”) and (ii) XXXXX dollars ($ XXXXX ) for each Secondary Detail (the “Secondary Detail Price”), each amount as adjusted as provided in Section 3.2, delivered by the Impax PSRs during the Term, provided that in the event that at the conclusion of any Calendar Quarter during the Term Impax certifies to Wyeth in the applicable Monthly Detail Report that the XXXXX , subject to adjustment as provided in Section 3.2. Each Detail Fee shall be due and payable within thirty (30) days after Impax delivers an invoice to Wyeth stating the Detail Fee that is due for the relevant Calendar Quarter.
3.2 Adjustments to Detail Price . At the beginning of Contract Year 2 and Contract Year 3, the Primary Detail Price and Secondary Detail Price shall each be increased by the amount, if any, of the Impax Cost Adjustment. 3.2.1 For example, XXXXX .
27
3.2.2 Impax shall report to Wyeth Impax’ calculation of the proposed Impax Cost Adjustment for any applicable Contract Year, together with all relevant back -up information, within sixty (60) days of the beginning of such Contract Year. 3.3 No Payment for Extra Details . Wyeth shall have no obligation to pay Impax any amount with respect to the performance of any Extra Detail.
3.4 Incentive Fee . Within ninety (90) days after the end of each Contract Year, Wyeth shall report to Impax XXXXX and the basis for Wyeth’s calculation thereof. Together with such report, Wyeth shall pay to Impax an amount XXXXX (the “Incentive Fee”) for such Contract Year. For the avoidance of doubt, the Incentive Fee shall not be due for a partial Contract Year in the event this Agreement is terminated pursuant to Section 9.2 or Impax terminates this Agreement pursuant to Section 9.3. By way of example only, a sample calculation of the Incentive Fee is set forth on Schedule 3.4.
3.5 Taxes and Withholding . Impax shall be solely responsible for all taxes that may be due to any governmental authority in connection with the payments made to it by Wyeth hereunder. All payments under this Agreement will be made without any deduction or withholding for or on account of any tax unless such deduction or withholding is required by Applicable Laws. If Wyeth is so required to deduct or withhold, Wyeth will (a) promptly notify Impax of such requirement, (b) pay to the relevant authorities the full amount required to be deducted or withheld promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Impax, and (c) promptly forward to Impax an official receipt (or certified copy) or other documentation reasonably acceptable to Impax evidencing such payment to such authorities.
3.6 Currency . All amounts payable and calculations hereunder shall be in United States dollars. 4. RECORD KEEPING; REPORTING AND AUDITS. 4.1 Impax Records and Audits . Impax shall keep complete and accurate records of (i) all Details delivered by the Impax Sales Force, (ii) with respect to Samples delivered by the Impax Sales Force, the quantity and dates of delivery of such Samples to each Neurologist and (iii) all information required to determine any Impax Cost Increase (including any information required to determine any Impax PSR Cost). Impax also shall keep its copies of the completed Sample Receipt Forms. All such records shall be retained for not less than three (3) years following the Contract Year in which they are generated and, at Wyeth’s request, made available for review and copying by Wyeth or its designees during normal
28
business hours at an Impax facility in the United States. Wyeth, either itself or using an Affiliate or Third Party auditor designated by Wyeth and reasonably acceptable to Impax, shall have the right to audit Impax’s Detail and Sample distribution activity reporting system to determine whether or not the reports submitted by Impax to Wyeth under Section 4.2 are complete and accurate. Wyeth may conduct such an audit once per year or more often as may be warranted in the event of regulatory inquiries regarding Sample distribution or Detail activity or in the event of discrepancies arising from market research activity conducted pursuant to Section 4.3. If any audit or review conducted pursuant to this Section 4.1 reveals an over-payment by Wyeth of any amount payable by Wyeth pursuant to Article 3, Impax shall reimburse Wyeth the amount of such overpayment within thirty (30) days following the date Wyeth delivers to Impax notice of such overpayment. Wyeth shall bear any costs that it incurs with conducting any audit pursuant to this Section 4.1 unless such audit determines that Wyeth has overpaid by more than five percent (5%) with respect to the payments subject to Wyeth’s audit, in which case Impax shall reimburse Wyeth for the costs of the audit. 4.2 Impax Reports . Following the Initiation Date and during the Term, within twenty-one (21) Business Days after the end of each calendar month, Impax shall provide to Wyeth the raw electronic data generated in connection with Sales Call activity and Sample disbursements (if any) and a written report, each formatted in such manner as requested by Wyeth, setting forth: (i) an updated list of full names, addresses and geographic sales territory covered (identified by zip code(s)) with respect to each member of the Impax Sales Force active during such calendar month;
(ii) the number of Primary Details, the number of Secondary Details and the total number of Cumulative Details delivered by each member of the Impax Sales Force during such calendar month and Contract Year-to-date, and on a cumulative basis for all members of the Impax Sales Force for such calendar month;
(iii) the number of Primary Details, the number of Secondary Details and the total number of Cumulative Details delivered by the members of the Impax Sales Force to each Neurologist during such calendar month and Contract Year-to-date, sorted by XXXXX ;
(iv) if applicable, the total number of Samples delivered by each member of the Impax Sales Force during such calendar month, Contract Year-to-date, and on a cumulative basis for all members of the Impax Sales Force during such calendar month;
(v) if applicable, the total number of Samples delivered to each Neurologist by the Impax Sales Force during such calendar month and Contract Year -
29
to -date, which report shall also identify each such Neurologist XXXXX ;
(vi) if applicable, the number of Samples remaining in Impax’s inventory and/or in the possession of authorized Impax Personnel on the last day of such calendar month;
(vii) XXXXX during such calendar month and for the Contract Year -to -date;
(viii) the identity of any Third Party products Promoted by the Impax PSRs during such calendar month; and
(ix) the number of Cumulative Details since the Initiation Date as of the end of such calendar month. Wyeth shall treat each such Monthly Detail Report as Impax’s Confidential Information pursuant to Article 11 of this Agreement.
4.3 Market Research . Detailing performance by the Impax PSRs also may be measured through review of market research. Without limiting Impax’s obligation under Section 2.6.12 and Wyeth’s rights under Sections 2.6.12, 9.2 or 9.3, in the event such review reveals a discrepancy with the performance reported by Impax in accordance with Section 4.2 above, the Parties, upon Wyeth’s request, and in addition to Wyeth’s rights pursuant to Section 4.1, shall promptly meet to discuss the matter and agree upon a plan or mechanism to address the discrepancy.
4.4 Wyeth Records and Audits . Wyeth shall keep complete and accurate records of all information required to determine XXXXX and any resulting Incentive Fee. All such records shall be retained for not less than three (3) years following the Contract Year in which they are generated and, at Impax’s request, made available for review and copying by an independent third party auditor reasonably acceptable to both Parties during normal business hours at a Wyeth facility in the United States. Impax, either itself or using an Affiliate or Third Party auditor designated by Impax and reasonably acceptable to Wyeth, shall have the right to audit Wyeth’s records of XXXXX to determine whether or not the reports submitted by Wyeth to Impax under Section 4.2 are complete and accurate. Impax may conduct such an audit once per year. If any audit or review Wyeth conducted pursuant to this Section 4.4 reveals an under-payment by Wyeth of any amount payable by Wyeth pursuant to Section 3.4. Wyeth shall pay Impax the amount of such underpayment within thirty (30) days following the date Impax delivers to Wyeth notice of such underpayment. Impax shall bear any costs that it incurs with conducting any audit pursuant to this Section 4.4 unless such audit determines that Wyeth has underpaid by more than five percent (5%)
30
with respect to the payments subject to Impax ’s audit, in which case Wyeth shall reimburse Impax for the costs of the audit. 5. RELATIONSHIP AND PUBLICITY. 5.1 Relationship of Parties . Neither Party shall have any responsibility for the hiring, termination, compensation or benefits of the other Party’s employees. No employees or representatives of either Party shall have any authority to bind or obligate the other Party for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party’s authorized written approval. For all purposes, and notwithstanding any provision of this Agreement to the contrary, Impax ’s legal relationship under this Agreement to Wyeth shall be that of independent contractor.
5.2 Public Announcements . Subject to the provisions of Section 11.4, and except as otherwise required by applicable laws or the terms of this Agreement, neither Party shall distribute or have distributed any publicity or information which bears the name of the other without the prior written approval of the other. Notwithstanding the foregoing, but still subject to Section 11.4, either Party, to the extent required by applicable laws, may issue a press release or other public announcement to announce the Detailing arrangement contemplated hereunder, provided that the content thereof is subject to prior review by the other Party, and that the announcing Party shall not unreasonably refuse comments from the reviewing Party and shall redact any requested Confidential Information of the reviewing Party. 6. REGULATORY COMPLIANCE. 6.1 Marketing Authorization . As between the Parties, Wyeth shall have the sole right and responsibility to take, and shall take, all actions with respect to the Product as would normally be taken in accordance with the accepted business practices and legal requirements in order to maintain the authorization to Market the Product as a pharmaceutical product in the Territory.
6.2 Recalls . At Wyeth’s reasonable request and, as between Wyeth and Impax, at Wyeth’s cost, Impax shall reasonably assist Wyeth in handling any recalls or voluntary withdrawal of the Product. Impax shall make available to Wyeth, upon request, all pertinent records of Impax which Wyeth may reasonably request to assist Wyeth in effecting any such recall.
6.3 Returns . Any Product returned to Impax shall be shipped to a location designated by Wyeth, with any reasonable direct cost to be paid by Wyeth.
6.4 Adverse Drug Experiences . For the reporting of adverse drug experiences, the responsibilities of the Parties are as follows: 6.4.1 Wyeth shall be responsible for follow-up of all reports of adverse events or experiences (“AEs”) or Other Information Reportable to Wyeth (as
31
hereinafter defined) and for the preparation and submission to the FDA of all safety reports required per US Code of Federal Regulations (CFR), title 21 § 314.80.
6.4.2 An AE is any untoward, undesired, or unplanned event in the form of signs, symptoms, disease, or laboratory or physiological observations occurring in a person administered any Detailed Product or in a clinical study. The event or experience does not need to be causally related to such Detailed Product or clinical study. An AE includes, but is not limited to: (a) Any clinically significant worsening of a pre -existing condition;
(b) An AE occurring from Detailed Product overdose ( i.e. , a dose higher than that prescribed by a healthcare professional for clinical reasons, or a dose higher than that described on the Detailed Product label) whether accidental or intentional;
(c) An AE occurring from abuse ( e.g. , use for non -clinical reasons) of the Detailed Product;
(d) An AE occurring from discontinuation of the Detailed Product (Detailed Product withdrawal); and
(e) Any failure of expected pharmacological action. 6.4.3 “Other Information Reportable to Wyeth ” means information not meeting the definition of an AE and includes: (a) Abuse (e.g., use for non -clinical reasons) without an AE;
(b) Inadvertent or accidental exposure, without an AE;
(c) An unexpected therapeutic or clinical benefit from use of the product;
(d) A case involving a pregnancy exposure to the product;
(e) Overdose without an AE;
(f) Drug exposure through breast -feeding without an AE;
(g) Medication errors without an AE;
(h) Any failure of expected pharmacological action; or
(i) AEs of special interest as designated by Wyeth or regulatory authority.
32
6.4.4 To the extent Impax, any Permitted Subcontractor or any of the Impax Personnel, including, without limitation, any member of the Impax Sales Force, becomes aware of or receives any information regarding an AE related to the use of any Detailed Product, Impax shall promptly provide Wyeth with such information within two (2) Business Days of the date received by Impax, such Permitted Subcontractor or any of the Impax Personnel, including, without limitation, any member of the Impax Sales Force.
6.4.5 For all AEs, Impax shall not, and shall cause its Permitted Subcontractors and the Impax Personnel not to, make any statement or give any opinion (written or verbal) to anyone that could be construed as an admission of fault on Wyeth’s part or a promise that Wyeth will compensate anyone. Impax, Impax’s Permitted Subcontractors, and the Impax Personnel may only promise to report the AE and follow the appropriate procedures as outlined herein.
6.4.6 AE related information shall be forwarded (by fax or overnight mail) to:
Wyeth Global Safety Surveillance, Epidemiology and Labeling (GSSEL) on a Wyeth 1747(b) Form (a sample of which is attached hereto as Schedule 6.4.6): a. Facsimile: 610 -989 -5544; or b. Overnight courier to:
Global Safety Surveillance & Epidemiology GSSE Triage Unit Wyeth Research Dock E 500 Arcola Road Collegeville, PA 19426 6.4.7 Wyeth and Impax shall each appoint a contact person to address AE reporting issues as they arise. 6.5 Product Complaints . In the event Impax receives any complaints regarding any Detailed Product, Impax’s responsibilities shall be as follows: 6.5.1 If any of the Impax Personnel, including without limitation, any Impax PSR, receives a complaint concerning any Detailed Product, such employee shall call Wyeth’s Product Quality Department at (800) 99-WYETH [(800) 999-9384] to report such complaint and follow Wyeth’s instructions regarding the return and replacement of any Samples distributed by such employee.
33
6.5.2 If any of the Impax Personnel, including, without limitation, any Impax PSR, receives notice of a serious Detailed Product tampering, Wyeth Product Quality should be immediately contacted by: (a) E-mail at: [email protected]
(b) Phone at: 1 -800 -99 -WYETH ((800) 999 -9384);
(b) Any other individuals as Wyeth may designate from time to time by written notice to Impax. 6.5.3 If any of the Impax Personnel, including, without limitation, any Impax PSR, receives notice of or information concerning any incident that causes any Detailed Product or its labeling to be mistaken for, or applied to another article, the following should be called during business hours: (a) [email protected], or 1 -800 -99 -WYETH ((800) 999 -9384);
(b) Any other individuals as Wyeth may designate from time to time by written notice to Impax. 6.6 Product Inquiries . In the event that any of the Impax Personnel, including, without limitation, any Impax PSR, receives any inquiries about any Detailed Product, Impax ’s responsibilities shall be as follows: 6.6.1 For questions which Impax PSRs are unable to answer concerning Detailed Product identification, Detailed Product ingredients or stability/storage information, Impax and/or Impax’s Permitted Subcontractor(s) shall contact Wyeth Product Quality, at (800) 999-9384 or at P.O. Box 26609, Richmond, VA 23261-6609 (or such other person(s), address (es) and phone number(s) as Wyeth may designate from time to time by written notice to Impax).
6.6.2 For medical inquiries, including those related to information outside of labeling or which Impax PSRs are unable to answer, a form 8202 — Health Care Professional Request for Medical Information (a sample of which is attached hereto as Schedule 6.6) or equivalent (which equivalent is acceptable to Wyeth) (any such form, an “RPI Form”) must be completed (including the signature of the health care professional and such health care professional’s complete mailing address, telephone number and email address or fax number) and faxed to (800) 955-2534 or (888) 237-3389, or mailed to Wyeth Global Medical Communications, P.O. Box 8299, Philadelphia, PA 19101 (or such other address as Wyeth may designate from time to time by written notice to Impax). For emergency medical inquiries, call 800-934-5556 (or such other phone number as Wyeth may designate from time to time by written notice to Impax). Impax shall not, and shall cause the Impax
34
PSRs to not, (i) solicit such medical inquiries and (ii) submit adverse event information on an RPI Form.
6.6.3 All responses to form 8202 inquiries from the medical profession or other Third Parties shall be given solely by Wyeth, Impax shall provide reasonable assistance to Wyeth to the extent deemed necessary by Wyeth to fully respond to such communications. 6.7 Communications with FDA . All communications with FDA concerning any Detailed Product shall be the sole responsibility of Wyeth. Impax shall provide reasonable assistance to Wyeth to the extent deemed necessary by Wyeth to fully respond to such communications.
6.8 Additional Responsibilities of the Parties . 6.8.1 Impax and Wyeth shall keep each other advised of significant market, economic, regulatory and other developments which may affect the Promotion or Detailing of the Product in the Territory during the Term.
6.8.2 Impax shall report promptly to Wyeth all other significant information concerning any complaint of any kind regarding any Detailed Product, its labeling, quality or packaging, including, but not limited to, any adverse drug experience not reported pursuant to Section 6.4 above.
6.8.3 It is understood and agreed that the reporting requirements set forth in this Article 6 are based on Wyeth policies and procedures and regulatory reporting requirements. Accordingly, in the event of changes to regulatory requirements or Wyeth policies and procedures, Impax agrees to comply with all reasonable revised notification procedures as requested in writing by Wyeth. Wyeth shall promptly advise Impax in the event of the change of the person or phone number for any of the contacts specified above.
6.8.4 Wyeth shall retain sole responsibility for communicating with all government agencies, including, without limitation, the FDA, and satisfying all requirements regarding maintenance of approvals to Market any Detailed Product in the Territory. 7. REPRESENTATIONS, WARRANTIES AND COVENANTS. 7.1 Mutual Representations and Warranties . As of the Effective Date, each of Impax and Wyeth hereby represents, warrants, and covenants to the other Party hereto as follows: (a) it is a corporation or entity duly organized and validly existing under the laws of the state or other jurisdiction of its incorporation or formation;
35
(b) the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action and does not require any shareholder action or approval;
(c) it has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder;
(d) the execution, delivery and performance by such Party of this Agreement and its compliance with the terms and provisions hereof does not and will not conflict with or result in a breach of any of the terms and provisions of or constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement affecting a product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or bylaws; or (iii) any order, writ, injunction or decree of any court or governmental authority entered against it or by which any of its property is bound; and
(e) it shall at all times comply with all Applicable Laws relating to its activities under this Agreement. 7.2 Impax Representations and Warranties . In addition to the representations, warranties and covenants made by Impax elsewhere in this Agreement, Impax hereby represents, warrants, and covenants to Wyeth that it has not been debarred and is not subject to debarment and that it shall not use in any capacity, in connection with the performance of its obligations under this Agreement, any Person who has been debarred pursuant to Section 306 of the FD&C Act or who is the subject of a conviction described in such section. Impax shall notify Wyeth in writing immediately if it or any of the Impax Personnel is debarred or is the subject of a conviction described in Section 306 of the FD&C Act, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or, to the best of Impax’s knowledge, is threatened, relating to the debarment or conviction of Impax or any of the Impax Personnel. Impax shall notify Wyeth in writing immediately if any Third Party (including any agency) alleges that Impax ’s Detailing activities pursuant to this Agreement are not in compliance with Applicable Laws.
7.3 Wyeth Representations and Warranties . In addition to the representations, warranties and covenants made by Wyeth elsewhere in this Agreement, Wyeth hereby represents and warrants to Impax that, as of the Effective Date: (a) Ownership . Wyeth is the sole and exclusive owner of the entire right, title and interest in and to (i) the patents listed on Schedule 7.3 (the “Initial Product Patents”), which patents are listed by Wyeth in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”) claiming the Initial Product or the method of using the Initial Product, as required by
36
the FD&C Act, and are existing as of the Effective Date and (ii) the Wyeth Trademarks,
(b) Non -Infringement . To Wyeth’s knowledge, the manufacture, use or sale of the Initial Product in the Territory or the use of the Wyeth Trademarks in the Territory do not infringe or misappropriate, and the Detailing by Impax as contemplated by this Agreement will not infringe or misappropriate, the patent rights, trade secret or other intellectual property rights of any Third Party. 7.4 Wyeth Covenants . (a) Compliance with Law . Wyeth will perform its obligations under this Agreement in accordance with all Applicable Laws, including without limitation provision of Promotional Materials and the labeling of the Product or the Samples in compliance with all Applicable Laws
(b) Samples . The Samples provided by Wyeth to Impax are not unfit for distribution under any Applicable Laws (including, but not limited to, not being adulterated or misbranded as defined under the FD&C Act or an article that may not, under the FD&C Act, be introduced into interstate commerce). 7.5 Other Opportunities . The Parties, within ninety (90) days after the Effective Date, and with no obligation as to outcome, shall meet to discuss other potential opportunities on which they may collaborate. 8. INDEMNIFICATION AND INSURANCE. 8.1 Indemnification by Impax . Impax shall indemnify, defend and hold Wyeth, and its officers, directors, agents, employees, and Affiliates, harmless from any claims, damages, actions, liabilities, losses, costs and expenses, including attorneys’ fees incurred in defending against them, (hereinafter, “Claims’’) of a Third Party, which arise out of or in connection with (i) the breach by Impax, any Permitted Subcontractor or any of the Impax Personnel of any of Impax’s representations, warranties or obligations under this Agreement; (ii) any claims or cause of action brought by or on behalf of any of the Impax Personnel in connection with their employment (including, without limitation, the reassignment of any Impax PSR or other employee pursuant to Section 2.6.2 as a result of a product liability claim) or the performance of Impax’s obligations under this Agreement; (iii) any negligent or wrongful act or omission of Impax, any Permitted Subcontractor, any member of the Impax Sales Force or any other Impax Personnel; or (iv) a failure to comply with the PDMA or other Applicable Laws in its Detailing of the Product under this Agreement, including any off -label promotion of the Product or mishandling or improper distribution of Samples,
37
except to the extent that such Claims are subject to indemnification by Wyeth pursuant to Section 8.2 below.
8.2 Indemnification by Wyeth . Wyeth shall indemnify, defend and hold Impax, its officers, directors, agents, employees, and Affiliates, harmless from any Claims of a Third Party, which arise out of or in connection with (i) the breach by Wyeth of any of its representations, warranties or obligations under this Agreement, (ii) the manufacture, sale, or use of the Product and the manufacture or use of the Promotional Materials, (iii) infringement or misappropriation of any Third Party patent, trade secret or trademark by the Product or the Wyeth Trademarks, or (iv) any negligent or wrongful act or omission of Wyeth, except to the extent that such Claims are subject to indemnification by Impax pursuant to Section 8.1 above.
8.3 Defense of Actions; Settlements . Any Party seeking to be indemnified hereunder (the “Indemnified Party”) shall provide prompt written notice to the other Party (the “Indemnifying Party”) no later than thirty (30) days after becoming aware of any actual claim in respect of which indemnification may be sought; provided, however , that the failure by the Indemnified Party to provide such prompt notice to the Indemnifying Party shall only be a bar to recovering losses to the extent that the Indemnifying Party is actually prejudiced and directly damaged by such failure. The Indemnified Party shall permit the Indemnifying Party, at the Indemnifying Party’s expense, to assume the complete defense of any Claims with a full authority to conduct such defense and to settle or otherwise dispose of the Claims. The Indemnified Party will fully cooperate in such defense and shall provide the Indemnifying Party with all information in its possession and shall provide assistance necessary to enable the indemnifying Party to defend such claims. The Indemnifying Party will not, except with the consent of the Indemnified Party, not to be unreasonably withheld, consent to the entry of any judgment or enter into any settlement which provides for any relief other than the payment of monetary damage and which does not include as an unconditional term thereof the giving by the claimant or plaintiff to the Indemnified Party a release from all liability in respect thereof. The Indemnifying Party shall not be responsible for or bound by any settlement made by the Indemnified Party without the prior written consent of the Indemnifying Party.
8.4 Limitation of Liability . WITH RESPECT TO ANY CLAIM BY ONE PARTY AGAINST THE OTHER ARISING OUT OF THE PERFORMANCE OR FAILURE OF PERFORMANCE OF THE OTHER PARTY UNDER THIS AGREEMENT, THE PARTIES EXPRESSLY AGREE THAT THE LIABILITY OF SUCH PARTY TO THE OTHER PARTY FOR SUCH BREACH SHALL BE LIMITED UNDER THIS AGREEMENT OR OTHERWISE AT LAW OR EQUITY TO DIRECT DAMAGES ONLY AND IN NO EVENT SHALL A PARTY BE LIABLE FOR, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES. THE LIMITATIONS SET FORTH IN THIS SECTION 8.4 SHALL NOT APPLY WITH RESPECT TO THE OBLIGATIONS OF EITHER PARTY UNDER ARTICLE 11 OR THEIR OBLIGATION TO INDEMNIFY THE OTHER PARTY UNDER SECTIONS 8.1 OR 8.2 IN CONNECTION WITH A
38
LIABILITY TO A THIRD PARTY OR IMPAX ’S OBLIGATION TO INDEMNIFY WYETH UNDER SECTION 10.11.
8.5 Insurance Requirements . Impax shall obtain, and maintain during the Term, a Commercial General Liability Insurance policy, including Products Liability Insurance, on a claims made basis, with liability limits of no less than XXXXX . Such insurance policy shall be procured from insurers having an A.M. Best Rating of A-VII or better and shall name Wyeth as an additional insured. Impax shall provide Wyeth, upon request, with a certificate of insurance evidencing its liability coverage. 9. TERM AND TERMINATION. 9.1 Term . This Agreement shall be effective as of the Effective Date and shall continue in effect until the third anniversary of the Initiation Date, unless terminated earlier as set forth in this Article 9 (the “Term ”).
9.2 Termination for Cause . Without prejudice to any remedy or claim it may have against the other Party for material breach or non-performance of this Agreement, either Party (the “Non-Breaching Party”) may terminate this Agreement for cause in the event that the other Party (the “Breaching Party”) fails to materially comply with or perform any material provision of this Agreement (a “Breach ”) in accordance with the following provisions: (a) The Non-Breaching Party shall notify the Breaching Party of any such Breach in writing, specifying such Breach in reasonable detail and stating such Non-Breaching Party’s intention to terminate this Agreement for cause (the “Notification ”).
(b) In the event that the Breaching Party fails to cure such Breach within a period of thirty (30) days following receipt by the Breaching Party of such Notification, this Agreement shall terminate upon written notice by the Non- Breaching Party. 9.3 Termination by Wyeth . In the event Impax fails to meet the Quarterly Detail Minimum during any period of three consecutive calendar months, Wyeth may terminate this Agreement effective immediately on notice to Impax, such right to be exercisable within a period of XXXXX following the date on which Wyeth receives from Impax the report due under Section 4.2 that discloses such failure.
9.4 Termination without Cause by Impax . Impax shall have the right to terminate this Agreement at any time, without cause, upon no less than XXXXX prior written notice to Wyeth.
9.5 Effect of Termination . Upon any termination or expiration of this Agreement, Impax will immediately cease any and all Detailing of the Product and Impax will cooperate with Wyeth in the collection and return to Wyeth of all promotional
39
materials, items and literature, Samples, and other sales or sales training materials in the possession of, or under the control of, Impax, Impax’s Permitted Subcontractor(s), and/or any of the Impax Personnel as promptly as practicable after the date thereof. Additionally, in the event this Agreement is terminated pursuant to this Article 9, Impax shall be due no compensation under Sections 3.1 or 3.4 or under any other provision of this Agreement for any activity conducted by Impax after the effective date of such termination. Except as expressly provided otherwise in this Section 9.5 or any other provision of this Agreement, termination of this Agreement shall be without prejudice to (a) any remedies which any Party may then or thereafter have hereunder or at law, (b) Impax’s right to receive any amounts accrued under this Agreement prior to the effective date of termination but which are unpaid or become payable thereafter and (c) either Party’s right to obtain performance of any obligation provided for in this Agreement which shall survive termination.
9.6 Survival of Certain Provisions . The provisions of this Agreement set forth in Articles 1 (to the extent definitions are embodied in the following Articles and Sections), 5, 8, 11 and 12 and Sections 2.6.13, 2.9, 2.10, 4.1, 4.2, 6.1-6.7, 9.6 and 10.11, to the extent applicable, and any remedies for the breach thereof, shall survive the expiration or any termination of this Agreement. 10. SAMPLES. 10.1 Provision of Samples . Wyeth shall use Commercially Reasonable Efforts to make available to Impax Samples of the Product for use in Promoting the Product to Neurologists as provided in Section 2.7.8 and as described in this Article 10. Subject to availability of Samples, Wyeth shall provide Samples to Impax XXXXX .
10.2 Shipping and Distribution of Samples . Wyeth shall send Samples to Impax, on a periodic basis, such quantities of Samples of the Product as Wyeth shall reasonably determine, to a single location within the Territory designated by Impax. Impax shall further distribute such Samples, in the case of the Sample Carry Program described in Section 10.4 below, to the Impax Sales Force and shall cause the Samples to be distributed to Neurologists in accordance with good business practices, strict first to expire/first-out inventory practices and the applicable Sales Call Plan (to the extent such Sales Call Plan addresses the distribution of Samples); provided, however , that XXXXX . The storage by Impax, Permitted Subcontractor(s), and any of the Impax Personnel of such Samples shall be at Impax’s expense and Impax shall be responsible for storing such Samples or causing such Samples to be stored under environmental conditions that assure the integrity of the Product in accordance with its labeled storage conditions and with adequate security to maintain the
40
integrity and usability of such Samples. All Samples which are in the possession of Impax, Permitted Subcontractor(s) or the Impax Personnel and which are undistributed prior to three months prior to their expiration date shall be returned by Impax, at Impax’s expense, to Impax’s or such Permitted Subcontractor’s preferred destruction vendor reasonably agreeable to Wyeth. Destruction of expired Samples shall be at Wyeth’s expense, provided, however , that if Impax has not adhered to first to expire/first out inventory practices, such destruction shall be at Impax’s expense. Destruction of Samples which are returned as the result of a recall shall, as between Impax and Wyeth, be at Wyeth’s expense, provided however , that if the Sample recall is the result of Impax ’s or its Permitted Subcontractor(s) ’ omission or commission, such expense shall be Impax’s responsibility.
10.3 Compliance with PDMA . 10.3.1 Designation as Authorized Distributor . Impax and Impax’s Permitted Subcontractor(s) shall be an Authorized Distributor of Record solely for the Product for purposes of the requirements of the Prescription Drug Marketing Act of 1987 (“PDMA”) and shall comply with the PDMA, FDA regulations and applicable state law requirements regarding the Marketing, sale and distribution of the Product, including but not limited to applicable wholesale drug distribution licensing guidelines and requirements. Impax and Impax’s Permitted Subcontractor(s) shall indicate that it is a Wyeth Authorized Distributor solely for the Products on Sample Receipt Forms and Sample Request Forms, if any. Impax and Impax’s Permitted Subcontractor(s) shall not attempt to source, purchase, trade, exchange or otherwise obtain Wyeth products or Products from entities other than Wyeth and shall not represent to others that its Authorized Distributor status for any product other than with the Products.
10.3.2 Compliance with PDMA . Impax shall take all steps necessary to ensure that its Permitted Subcontractor(s), each member of the Impax Sales Force and all other Impax Personnel comply with the requirements of the PDMA, all regulations promulgated thereunder, and each State’s companion PDMA statutes and regulations which relate to the distribution of samples of a prescription drug product utilizing the Sample Carry Program set forth below in Sections 10.4.
10.3.3 Compliance with Company Procedures . Impax shall take all steps necessary to ensure that Impax’s Permitted Subcontractor(s), each member of the Impax Sales Force and all other Impax Personnel comply with all Impax rules, policies and standard operating procedures for product sampling utilizing the Sample Carry Program as more specifically outlined below in Sections 10.4.
41
10.4 Sample Carry Program . Impax and Impax’s Permitted Subcontractor(s) shall implement the following program for samples (“Sample Carry Program”) that includes the following elements and shall operate such program in accordance with Applicable Law and regulations and its company standard operating procedures for product sampling. 10.4.1 Impax and Impax’s Permitted Subcontractor(s) shall receive sample shipments from Wyeth at its licensed facility and immediately upon deliver of the Products, to examine the Products to determine and confirm the quantities delivered and that the Products are not damaged. If Impax or Impax’s Permitted Subcontractor(s) determine that there are damages evident at the time of delivery or shortages it shall make a notation on the delivery receipt and immediately notify Wyeth Customer Service within seven (7) Business Days of receipt of the Product at Impax or Impax’s Permitted Subcontractor (s) ’ licensed facility.
10.4.2 Impax and Impax’s Permitted Subcontractor(s) shall store, implement and maintain appropriate inventory management practices to ensure that the product is handled, transported and distributed in accordance with current Good Manufacturing Practices and that the inventory of the Product is secured and protected against theft, tampering, and diversion during storage and transport to the Impax Sales Force.
10.4.3 Impax and Impax’s Permitted Subcontractor(s) shall distribute samples of the Product to the Impax PSRs in sufficient quantities to support the Sales Call Plan, Impax and Impax’s Permitted Subcontractor(s) shall track sample distributions to the Impax Sales Force by lot number, sufficient to permit the tracking of Sample units to the point of a licensed practioner.
10.4.4 Each member of the Impax Sales Force shall (i) in accordance with the party’s standard operating procedures, secure the samples of the Product against theft, tampering, and diversion during storage and transport by such member of the Impax Sales Force and (ii) carry in their automobile or on their person only those quantities of samples of the Product that can be used during XXXXX , provided that the Samples are stored in a controlled temperature environment outside of normal detailing hours.
10.4.5 Prior to distribution of any samples of the Products by any Impax PSR, such Impax PSR shall: (i) visually check the Product expiration date to ensure that the sample has a reasonable dating period remaining; (ii) verify, in accordance with its standard operating procedures for product sampling the XXXXX Neurologist’s identity as a practitioner authorized by Applicable Law to receive drug samples; (iii) confirm that Product packaging is intact and includes the designation
42
“sample” and package insert; (iv) obtain an executed sample request form or electronic equivalent from such Neurologist in accordance with PDMA requirements; and (v) confirm Product identity to be accurate by visual inspection of the Product packaging, At the time of delivery, such Impax PSR shall obtain a Sample Receipt Form (which may be electronic) from the XXXXX Neurologist executed in accordance with the requirements of the PDMA.
10.4.6 Impax and Impax’s Permitted Subcontractor(s) shall notify the FDA of falsification of drug sample records, diversion, significant loss and theft of drug samples according to its standard operating procedures and in compliance with Applicable Laws. If the diversion, significant loss or theft involves samples of the Product, Impax and Impax’s Permitted Subcontractor(s) shall notify Wyeth by providing copies of all correspondence with the FDA regarding the event within forty-eight (48) hours after delivery of the notification to the FDA on the initial report and provide a copy of the draft follow -up report to Wyeth twenty -four (24) hours prior to its submission to FDA.
10.4.7 Impax and Impax’s Permitted Subcontractor(s) shall provide Wyeth with monthly drug accountability/inventory reports for each Impax PSR with respect to samples of the Product within five (5) days after the end of each calendar month. At least annually, Impax and Impax’s Permitted Subcontractor(s) shall reconcile each Impax PSR’s quarterly or annual inventory with respect to samples of the Product. In addition, Impax and Impax’s Permitted Subcontractor(s) shall make drug accountability/inventory reports, information, Sample Request and Sample Receipt Forms and any other records pertaining to samples of the Products or matters relating to PDMA available to Wyeth within XXXXX after a request from Wyeth for such information.
10.4.8 When an Impax PSR leaves the sales force of either Impax or Impax’s Permitted Subcontractor(s) that is detailing or had detailed the Product, Impax and Impax’s Permitted Subcontractor(s) shall conduct a “close-out” inventory of carried samples of the Product in accordance with its standard operating procedures and reconcile such close -out inventory.
10.4.9 Upon reasonable advance notice to Impax and Impax’s Permitted Subcontractor(s) and not more than once during any Calendar Year, Wyeth shall be entitled, at the expense of Wyeth, to conduct an inspection and audit of Impax’s and Impax’s Permitted Subcontractor(s) inventory of samples of the Products (including samples held by any Impax PSR or Impax’s Permitted Subcontractor(s), documents, records, and policies and procedures to ensure compliance with the provisions of the Section 10.4.
43
10.4.10 Impax shall maintain and provide to Wyeth an updated list of full names and addresses of each member of the Impax Sales Force as well as the address of the site(s) where Samples are stored. Impax shall provide Wyeth, on a monthly basis, notice of any changes to this list including any change in employment status or change of address. 10.5 Sampling Activity System Audit . Impax and Impax’s Permitted Subcontractor(s) shall not conduct any sampling activity with respect to the Product until the Parties agree that appropriate systems are in place with respect to such activity to ensure compliance with Applicable Law and appropriate reporting. Impax and Impax’s Permitted Subcontractor(s) shall each submit to audits by Wyeth or by an outside auditor hired by Wyeth to assess Impax and Impax’s Permitted Subcontractor(s) standard operating procedures and distribution operations with respect to its sampling activities, and its compliance with respect thereto, prior to Wyeth making Samples available to Impax. Upon request by Wyeth. Impax shall provide to Wyeth copies of a certificate of compliance with PDMA, state registration certificate as a licensed distribution center and state board of pharmacy inspection report, DEA inspection report or similar governmental inspection report for any agent that Impax intends to use as a distribution facility for handling of the Product. Impax understands that no samples shall be shipped until such agent is verified by Wyeth to be in compliance with PDMA. Further, at any time during the Term, Impax and Impax’s Permitted Subcontractor(s) shall each submit to audits by Wyeth or by an outside auditor hired by Wyeth to assess Impax and Impax’s Permitted Subcontractor(s) standard operating procedures and distribution operations with respect its sampling activities, and its compliance with respect thereto. If Wyeth has a concern with respect to the results of the sample audit, then Wyeth shall submit its concerns in writing to Impax and Impax’s Permitted Subcontractor(s) for review and discussion. The Parties shall work to resolve such concerns. If Impax is not able to resolve any material concerns Wyeth has with respect to the Sample Audit of Impax, then Wyeth shall have the right in its sole discretion, to immediately terminate Impax’s right to sample under this Article 10 or terminate this Agreement pursuant to Section 9.2. For the sake of clarity, a Sample Audit shall not be deemed an audit pursuant to Section 4.1. All documentation of Sample transactions in the possession of Impax and/or Impax’s Permitted Subcontractor(s) shall be provide to Wyeth no later than sixty (60) days after expiration or any termination of this Agreement.
10.6 Investigation, Corrective & Preventative Actions . Impax and Impax’s Permitted Subcontractor(s) shall each maintain its own investigation, corrective and preventive action program for the handling of samples of Product in accordance with its internal policies and procedures, applicable to its Sample Carry Program.
10.7 Monitoring & Auditing Programs . Impax and Impax’s Permitted Subcontractor(s) shall each maintain its own monitoring and auditing programs
44
capable of detecting losses, potential diversion and falsification of records related to samples of the Product.
10.8 Responsibility for Compliance . Impax and Impax’s Permitted Subcontractor(s) shall each be responsible for its own compliance with Applicable Law with respect to Product samples and shall bear its own cost relating to such compliance.
10.9 In -Transit Losses . Impax shall notify Wyeth immediately upon learning that any Samples shipped by Wyeth to Impax have been lost or have not been received as scheduled.
10.10 Improper Handling . Each Party shall notify the other Party immediately upon learning information which could raise a suspicion that any of the subject Samples had not been properly handled or had been handled in a manner prohibited by law. Impax shall take all steps necessary to conduct a full investigation of any suspected mishandling of any Samples in accordance with the procedures referenced in Section 10.6, and shall notify Wyeth of the results of each such investigation promptly upon completion thereof. Additionally, upon Wyeth’s request, Impax shall take all steps necessary to aid and support Wyeth in any investigation of any suspected mishandling of any Samples that Wyeth may elect to conduct.
10.11 Indemnity for Failure to Comply . In the event that Impax or any Impax Personnel fail to comply or cause Wyeth to fail to comply with applicable legal requirements and as a direct result a penalty(ies) is assessed against Wyeth or any of its Affiliates or employees, then Impax shall hold harmless and indemnify Wyeth, its Affiliates or its employees from any such civil or criminal penalty or other damages or losses related thereto, including reasonable attorneys ’ fees, costs and expenses
10.12 Additional Requirements . 10.12.1 Pursuant to Section 2.6.13, Impax and its Permitted Subcontractor(s) shall exchange with Wyeth data to enable the Parties to produce accurate and timely reports and analysis of Impax’s Detailing and Sample distribution activities. Data requirements, file formats and frequency of exchange shall be as determined by Wyeth.
10.12.2 In the event of a request by FDA to Wyeth for any of the foregoing information, Impax shall, immediately upon request from Wyeth, provide such information to Wyeth’s Regulatory Affairs Department for submission to FDA. Such information shall only be used by Wyeth to submit to FDA pursuant to 21 U.S.C.A. §353(d). Impax acknowledges Wyeth ’s obligation to provide such information to FDA within forty eight (48) hours of FDA ’s request.
45
10.12.3 Wyeth shall not initiate any direct communication between Wyeth and any Impax PSR regarding the Promotion of the Product without the prior approval of Impax, which shall not be unreasonably withheld or delayed.
10.12.4 Neither Party shall recruit or attempt to recruit any employee of the other Party or any agent of the other Party (including, in the case of Impax, any Permitted Subcontractor) who is engaged in performing activities under this Agreement, unless such employee resigns without solicitation from the Party, is terminated by the other Party or is responding to a general solicitation to the public, general advertising or untargeted advertisements for employment 11. CONFIDENTIALITY. 11.1 Nondisclosure and Nonuse Obligations . Each of Impax and Wyeth shall use Confidential Information of the Disclosing Party only in accordance with and as expressly Permitted by this Agreement and shall not disclose to any Third Party (except as expressly provided in Section 11.2) any Confidential Information of the Disclosing Party, in each case without the prior written consent of the Disclosing Party, which consent may be provided or withheld in the Disclosing Party’s sole discretion. The foregoing obligations shall survive the expiration or earlier termination of this Agreement for a period of ten (10) years. The foregoing non-disclosure and non-use obligations shall not apply to specific Confidential Information of a Disclosing Party that the Receiving Party can demonstrate: (i) is known by the Receiving Party at the time of its receipt other than through a prior disclosure by the Disclosing Party, as documented by business records; (ii) is at the time of disclosure or thereafter becomes published or otherwise part of the public domain without breach of this Agreement by the Receiving Party; (iii) is subsequently disclosed to the Receiving Party by a Third Party who has the right to make such disclosure not in confidence; (iv) is developed by the Receiving Party independently of access to or use of any Confidential Information received from the Disclosing Party and such independent development can be documented by the Receiving Party; or (v) is required by law, regulation, rule, act or order of any governmental authority or agency to be disclosed by the Receiving Party to a Third Party, provided that to the extent practicable notice is promptly delivered to the Disclosing Party and the Receiving Party agrees to reasonably assist the Disclosing Party in order to provide an opportunity to seek a protective order or other similar order with respect to such Confidential Information and thereafter the Receiving Party discloses to the requesting entity only the minimum Confidential Information required to be disclosed in order to comply with the request, whether or not a protective order or other similar order is obtained by the Disclosing Party.
11.2 Permitted Disclosures . The Receiving Party may disclose specific Confidential Information of the Disclosing Party to its (and, with respect to Wyeth, Wyeth ’s Affiliate ’s, or, with respect to Impax, Impax ’s Permitted Subcontractor ’s)
46
employees, consultants or professional advisors, only to the extent reasonably required to accomplish the purposes of this Agreement and only if the Receiving Party obtains prior written agreement from such employees, consultants and professional advisors (other than legal counsel who are otherwise required to maintain confidentiality) to hold in confidence and not make use of such Confidential Information for any purpose other than those permitted by this Agreement. The Receiving Party will use at least the same standard of care (but in no event less than a reasonable standard of care) as it uses to protect its own proprietary or confidential information of a similar nature to ensure that such employees, agents, consultants or suppliers do not disclose or make any unauthorized use of the Confidential Information of the Disclosing Party. Additionally, a Receiving Party may use or disclose specific Confidential Information of the Disclosing Party to the extent it is necessary to do so to take action against the Receiving Party to enforce its rights under this Agreement.
11.3 Return of Confidential Information . Upon expiration or earlier termination of this Agreement for any reason, the Receiving Party, upon receipt of a written request from the Disclosing Party, shall return to the Disclosing Party all copies of the Confidential Information received from the Disclosing Party hereunder, provided, however , that the Receiving Party’s legal counsel may retain one copy of such Confidential Information in a secure location solely for purposes of determining the Receiving Party ’s continuing obligations under this Article 11.
11.4 Disclosure of Agreement . The Parties agree that, except as expressly provided herein, neither Party shall disclose to any Third Party the terms and conditions of this Agreement. Subject to the provisions of this Section 11.4, either Party may disclose this Agreement and the terms and conditions thereof to (i) such Party’s auditors in connection with such auditors’ audit of such Party’s financial statements; (ii) to such Party’s legal counsel and financial advisors; (iii) to any permitted assignee in connection with a permitted assignment by such Party and/or (iv) as required by law, regulation, rule, act or order of any governmental authority or agency to be disclosed, provided that to the extent practicable notice is promptly delivered to the other Party and the disclosing Party seeks, and to allows the other Party to seek, a protective order or other similar order with respect to any information to be disclosed and that the disclosing Party discloses to the requesting entity only the minimum information required to be disclosed in order to comply with the request, whether or not a protective order or other similar order is obtained. Either Party may make an announcement disclosing entry into this Agreement, with the prior approval of the other Party, not to be unreasonably withheld or delayed.
11.5 Equitable Relief . The Parties acknowledge and agree that the restrictions set forth in Section 11.1 are reasonable and necessary to protect the legitimate interests of the Parties and that any material breach of Section 11.1 may result in irreparable injury to the other Party for which there would be no adequate remedy at law. In the event of an uncured material breach of Section 11.1 by a Party, the other Party shall be authorized and entitled to seek from any court of competent
47
jurisdiction injunctive relief, whether preliminary or permanent or specific performance and the breaching Party agrees to waive any requirement that the non-breaching Party post a bond or other security as a condition for obtaining any such relief. Nothing in this Section 11.5 is intended, or shall be construed, to limit the Parties’ rights to equitable relief or any other remedy for a breach of any provision of this Agreement. 12. MISCELLANEOUS 12.1 Force Majeure . Neither Party shall be liable to the other for delays in delivery of Product or failure to perform any other provision of this Agreement if such failure or delay results from an act of God, war conditions, sabotage, governmental regulations or actions, embargo, fire, strike, labor trouble or any other cause beyond the affected Party’s reasonable control. Upon the occurrence of any such event which results or will result in failure or delay to perform hereunder as described above, the Party whose performance is hereby prevented or delayed shall immediately give notice of such occurrence and the effect and/or anticipated effect of such occurrence on the performance of such Party to the other Party. The Party whose performance is so affected shall use Commercially Reasonable Efforts to minimize disruptions in performance and to resume full performance hereunder as soon as possible under the circumstances.
12.2 Severability . If any provision of this Agreement or the application thereof to any Party or circumstance will, to any extent, be held to be invalid or unenforceable, then (i) the remainder of this Agreement, or the application of such provision to Parties or circumstances other than those as to which it is held invalid or unenforceable, will not be affected thereby and each provision of this Agreement will be valid and be enforced to the fullest extent permitted by law, and (ii) the Parties covenant and agree to renegotiate any such provision in good faith in order to provide a reasonably acceptable alternative to such provision or the application thereof that is invalid or unenforceable, it being the intent of the Parties that the basic purposes and business intent of this Agreement are to be effectuated, with the consequence that this Agreement shall terminate in full if the Parties are unable to renegotiate and agree on such provision.
12.3 Assignability. Impax shall not assign, including by operation of law, this Agreement or any of its rights or obligations hereunder to any Person without the prior written consent of Wyeth, which consent may be provided or withheld in Wyeth’s sole discretion, provided, however, that Impax may assign this Agreement and all of its rights and obligations hereunder (a) to a Third Party successor in interest to all or substantially all of the business of the Impax Pharmaceuticals division or (b) to any of Impax’s Affiliates, provided, however, that any such assignee under (a) or (b) above XXXXX . Any such permitted assignment shall not relieve Impax of any of its responsibilities for performance of its obligations under this Agreement. Any assignment attempted in contravention of this Section 12.3 shall be void and unenforceable. For the
48
avoidance of doubt, Wyeth may assign this Agreement and its rights and obligations hereunder without the consent of Impax.
12.4 Notices . All notices given under this Agreement shall be in writing and delivered by hand or sent by nationally recognized overnight delivery service, prepaid registered or certified air mail, or by facsimile confirmed by prepaid first class, registered or certified mail letter, and shall be deemed to have been properly served to the addressee upon receipt of such written communication, Notices to Wyeth shall be sent to: Wyeth Pharmaceuticals 500 Arcola Road Collegeville, Pennsylvania 19426 Attn: Senior Vice President, Corporate Business Development Fax: (484) 865-6476 with a copy to: Wyeth 5 Giralda Farms Madison, New Jersey 07940 Attn: General Counsel Fax: (973) 660-7156 Notices to Impax shall be sent to: Impax Laboratories, Inc. 30831 Huntwood Avenue Hayward, CA 94544 Attn: President, Impax Pharmaceuticals Fax: (510) 471-1595 with a copy to: Impax Laboratories, Inc. 30831 Huntwood Avenue Hayward, CA 94544 Attn: Legal Department Fax: (510) 476-2092. In the event that either Party changes its address, such Party shall promptly notify and update the other Party in writing as to such change.
12.5 Governing Law; Jurisdiction . This Agreement is subject to and governed by the laws of the State of New York, excluding its conflict of laws provisions. Each of the Parties hereby submits to the exclusive general jurisdiction of the courts of the State of Delaware and the courts of the United States of America for the District of Delaware in any action or proceeding arising out of or relating to this Agreement and to the jurisdiction of the appellate courts to which appeals are required to be taken from any of the foregoing. Each of the Parties irrevocably waives (i) any defense of inconvenient forum to the maintenance of any such action or proceeding and (ii) its right to a jury trial.
12.6 Dispute Resolution . In the event of the occurrence of a dispute, either Party may, by written notice to the other Party, have such dispute referred to their respective officers (designated below) or their successors or designees for attempted resolution by good faith negotiations within thirty (30) days after such notice is received. Said designated officers are as follows: For Wyeth: Wyeth Pharmaceuticals President, U.S., Pharmaceuticals and Women’s Health Care For Impax: President, Impax Pharmaceuticals. In the event the designated officers are not able to resolve such dispute through good faith negotiations within such thirty (30) day period, either Party may pursue any legal or equitable remedies available to it by filing a claim in the state or federal courts designated in Section 12.5. Notwithstanding the foregoing, nothing in this Section 12.6 shall prohibit a Party from seeking temporary or injunctive relief from any state or federal court pending the resolution of a dispute in accordance with the provisions of this Section 12.6.
12.7 No Waiver . The failure of either Party to require performance by the other Party of any of that other Party’s obligations hereunder shall in no manner affect the right of such Party to enforce the same at a later time. No waiver by any Party of
49
any condition, or of the breach of any provision, term, representation or warranty contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach, or of any other condition or of the breach of any other provision, term, representation or warranty hereof.
12.8 Headings; Defined Terms . The headings and captions used in this Agreement are solely for the convenience of reference and shall not affect its interpretation. The term “including” means “including, without limitation,” and “herein”, “hereof’, and “hereunder” refer to this Agreement as a whole. The word “will” shall be construed to have the same meaning and effect as the word “shall”. All references herein to Articles, Sections, Exhibits or Schedules shall be construed to refer to Articles, Sections, Exhibits and Schedules of this Agreement, and references to this Agreement include all Exhibits and Schedules hereto.
12.9 Counterparts . This Agreement may be executed in one or more counterparts each of which shall be an original and all of which shall constitute together the same document. Facsimile execution and delivery of this Agreement by either Party shall constitute a legal, valid and binding execution and delivery of this Agreement.
12.10 Entire Agreement; Amendments . This Agreement (including all of the attached Exhibits), and all the covenants, promises, agreements, warranties, representations, conditions and understandings contained herein and therein, sets forth the complete, final and exclusive agreement between the Parties with respect to the subject matter hereof and supersedes and terminates all prior and contemporaneous agreements and understandings between the Parties, whether oral or in writing, including the XXXXX , with respect to the subject matter hereof. There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties with respect to the subject matter of this Agreement other than as are set forth in this Agreement. No subsequent alteration, amendment, change, waiver or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized officer of each Party. No understanding, agreement, representation or promise, not explicitly set forth herein, has been relied on by either Party in deciding to execute this Agreement. Notwithstanding the foregoing, this Agreement shall not relieve either Party of any existing obligation under XXXXX .
12.11 Further Actions . Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
[Remainder of page intentionally left blank]
50
IN WITNESS WHEREOF, the Parties hereto have caused this Copromotion Agreement to be executed by their duly authorized officers as of the Effective Date.
IMPAX LABORATORIES, INC. WYETH, acting through its Wyeth Pharmaceuticals Division
By: /s/ Larry Hsu By: /s/ Gregory Norden
Name: Larry Hsu Name: Gregory Norden Title: President & CEO Title: Senior Vice President and CFO, Wyeth
51
SCHEDULE 1.79 Sample Receipt Forms Sample Receipt Forms utilized by Impax for distribution of Samples under this Agreement shall contain the following information: XXXXX
SCHEDULE 1.94 Wyeth Sales Training Program for the Initial Product XXXXX .
Exhibit A to Schedule 1.94
XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX : XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX
2
SCHEDULE 3.4 Sample Calculation of Incentive Fee
XXXXX XXXXX XXXXX XXXXX XXXXX XXXXX
XXXXX XXXXX XXXXX
XXXXX XXXXX % XXXXX % XXXXX %
XXXXX XXXXX XXXXX
XXXXX XXXXX XXXXX
XXXXX XXXXX % XXXXX % XXXXX %
XXXXX XXXXX
XXXXX XXXXX
XXXXX $ XXXXX
XXXXX XXXXX
XXXXX $ XXXXX
XXXXX $ XXXXX
XXXXX $ XXXXX
XXXXX XXXXX
3
4
Confidential
SCHEDULE 6.4.6 Wyeth Form 1747(b) SEE ATTACHED XXXXX
5
Confidential
SCHEDULE 6.6 Wyeth Form 8202 SEE ATTACHED XXXXX
14
SCHEDULE 7.3 Initial Product Patents U.S. Patent XXXXX U.S. Patent XXXXX
16