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UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 240.24B-2
DATE 15 December 1999
ASTRA AB
- and -
CIMA LABORATORIES, INC.
-------------------------------------------
LOAN AGREEMENT
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
200.83 AND 240.24B-2
THIS AGREEMENT is dated December 15, 1999 and made
BETWEEN:
1. ASTRA AB, a company established and existing in accordance with the
laws of Sweden under no. 556011-7482 whose headquarters is at S-151 85
Sodertalje, Sweden ("Astra"); and
2. CIMA LABORATORIES, INC., a corporation incorporated in the State of
Delaware, United States of America under no. 2110839 whose principal
place of business is at 10000 Valley View Road, Eden Prairie,
Minnesota, USA 55344 ("CIMA").
WHEREAS
(A) CIMA owns or has rights to certain oral drug-delivery technology
marketed under the trademark OraSolv(R) and related know-how.
(B) IPR has an exclusive license to make, have made, use and sell products
containing the pharmaceutical drug [...***...] on a worldwide basis.
(C) CIMA and IPR entered into a Development and License Option Agreement,
dated as of September 10, 1997 (the "Development Agreement"),
[...***...]
(D) CIMA entered into a License Agreement with IPR dated 28 May 1999
("the License Agreement") [...***...]
(E) CIMA has requested that Astra lend, or procure the loan to CIMA of,
the sum of US $3.5 million in order to assist CIMA in improving its
operations and to help to assure availability and flow of the product
from CIMA to Zeneca Limited (an affiliate of Astra).
(F) The first launch of `Zomig' (R)rapimelt took place in Portugal in
early September 1999 [...***...]
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UNDER 17 C.F.R. SECTIONS 200.80(B)(4)
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IT IS AGREED AS FOLLOWS:
1 Definitions and Interpretation
1.1 Definitions
In this Agreement, unless the context otherwise requires:
"Anniversary Date" means the date one year after the first
Payment Date and the date marking the end of each subsequent
one year period;
"Banking Day" means a day (other than Saturday or Sunday) on
which banks are open for business in London and Minnesota;
"Change of Control" means if any person or persons acting in
concert (other than the current officers and directors of
CIMA), together with Affiliates thereof, shall in the
aggregate, directly or indirectly, control or own
(beneficially or otherwise) more than 50% of the issued and
outstanding voting stock of CIMA.
"Date of this Agreement" means the date upon which this
Agreement is signed and delivered by the latter of the parties
to sign and deliver it;
"Default" means any Event of Default or any event or
circumstance which would, upon the giving of notice by Astra
and/or the expiry of the relevant period and/or the
fulfillment of any other condition (in each case as specified
in clause 10.1) constitute an Event of Default;
"Encumbrance" means any mortgage, charge (whether fixed or
floating), pledge, lien, hypothecation, assignment, trust
arrangement or security interest of any kind securing any
obligation of any person or any other type of preferential
arrangement (including without limitation title transfer
and/or retention arrangements having a similar effect) but
does not include liens arising in the ordinary course of
trading by operation of law and not by way of contract;
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"Event of Default" means any of the events or circumstances
described in clause 10.1;
"Indebtedness" means any obligation for the payment or
repayment of money borrowed, whether as principal or as surety
and whether present or future, actual or contingent;
"Interest Period" means in relation to the Loan the three
month period commencing on the Date of this Agreement and each
subsequent three month period commencing on the last day of
the previous Interest Period provided that, if any Interest
Period would otherwise overrun a Payment Date falling during
that Interest Period then, in the case of the final Payment
Date, such Interest Period shall end on such Payment Date and,
in the case of any other Payment Date such Interest Period
shall end on and the next Interest Period shall start on that
Payment Date;
"IPR" means IPR Pharmaceuticals, Inc., a corporation
incorporated in Puerto Rico under no. 61,324 whose registered
office is at P O Box 1967, Carolina, 00984 Puerto Rico (an
Affiliate of Astra);
[...***...]
"Loan" means the term loan in a principal amount of US Dollars
Three Million five hundred thousand (US $3,500,000) to be
advanced to CIMA by Astra pursuant to the terms of this
Agreement or, as the context requires, the principal amount
owing to Astra under this Agreement at any relevant time
together with all interest accrued thereon and unpaid for the
time being.
"Maturity Date" means the date which is the third Anniversary
Date; provided, however, that if total royalties payable to
CIMA under the License Agreement prior to the third
Anniversary Date prior to any withholding thereof by IPR under
clause 4.1 or 4.2., are less than an aggregate of $3,500,000,
then the Maturity Date shall be extended for
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a period of one year, and the Maturity Date shall thereafter
be extended for successive one-year periods until such
royalties payable have exceeded $3,500,000 in aggregate;
"month" means a period beginning in one calendar month and
ending in the next calendar month on the day numerically
corresponding to the day of the calendar month on which it
started, provided that (i) if the period started on the last
Banking Day in a calendar month or if there is no such
numerically corresponding day, it shall end on the last
Banking Day in such next calendar month and (ii) if such
numerically corresponding day is not a Banking Day, the period
shall end on the next following Banking Day in the same
calendar month but if there is no such Banking Day it shall
end on the preceding Banking Day and the expressions "months"
and "monthly" shall be construed accordingly; and
"OraSolv(R) Technology" means CIMA's effervescent,
fast-dissolving, oral drug delivery tablet technology as
defined in the License Agreement;
"Payment Dates" means each of the dates on which repayment
installments are due in respect of the Loan under clause 4.1;
"Product" or " `Zomig' rapimelt" shall mean the pharmaceutical
dosage form [...***...]
"Sale" means the disposal (whether by virtue of one
transaction or a series of related transactions) of all or not
less than 30% (by book value) of the assets of CIMA;
"Taxes" includes all present and future taxes, levies,
imposts, duties, fees or charges of whatever nature together
with interest thereon and penalties in respect thereof and the
expression "Taxation" shall be construed accordingly.
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1.2 Headings
Clause headings are inserted for convenience of reference only and
shall be ignored in the interpretation of this Agreement.
1.3 Construction of certain terms
In this Agreement, unless the context otherwise requires:
1.3.1 references to clazuses, parties, schedules and recitals are to
be construed as references to the clauses of, and the parties,
schedules and recitals to, this Agreement and references to
this Agreement include its schedules;
1.3.2 references to (or to any specified provision of) this Agreement
or any other document shall be construed as references to this
Agreement, that provision or that document as in force for the
time being and as from time to time amended in accordance with
the terms thereof, or, as the case may be, with the agreement
of the relevant parties;
1.3.3 words importing the plural shall include the singular and vice
versa;
1.3.4 references to a time of day are to London time;
1.3.5 references to a person shall be construed as including
references to an individual, firm, company, corporation,
unincorporated body of persons or any State or any agency
thereof; and
1.3.6 references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended or
extended.
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1.4 Terms defined in the Supply Agreement or the License Agreement shall
have the same meaning when used in this Agreement.
2 The Loan
2.1 Astra relying upon each of the representations and warranties in
clause 7, shall advance the Loan to CIMA within ten (10) days
after the date of this Agreement, upon and subject to the terms
of this Agreement.
2.2 Astra shall advance the Loan by crediting CIMA's bank account no.
with the sum of US$3,500,000 within (10) days after the Date of
this Agreement. Details of such bank account are as follows:
[...***...]
3 Interest
3.1 Normal interest rate
Interest shall accrue on the Loan in respect of each Interest
Period at the rate per annum which is the aggregate of (a) one
half of one percent cent, and (b) LIBOR (or, if clause 3.3.1
applies, an alternative rate calculated in accordance with clause
3.3.2). Such interest shall be compounded on the last day of each
Interest Period and added to the principal amount of the Loan
outstanding at such time.
3.2 Default interest
If CIMA fails to pay any sum (including, without limitation, any
sum payable pursuant to this clause 3.2) on its due date for
payment under this Agreement CIMA shall pay interest on such sum
from the due date up to the date of actual payment (as well after
as before judgment) at a rate of the aggregate of (a) two percent
per annum, and (b) the interest rate in effect from time to time
for the Loan pursuant to clause 3.1.
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3.3 Market disruption; non-availability
3.3.1 If and whenever, at any time prior to the commencement
of any Interest Period Astra shall have determined,
[...***...]
3.3.2 [...***...]
3.4 [...***...]
4 Repayment
4.1 On each date when any royalties fall due from IPR to CIMA under
the License Agreement in respect of sales of Zomig Rapimelt,
there shall become due and payable from CIMA to Astra such part
of the Loan outstanding at that time (including accrued and
unpaid interest thereon) as is equal to 50% of the royalty
payment then due from IPR to CIMA (or, if less, the total amount
of the Loan (including accrued unpaid interest thereon)
outstanding at that time). Payment shall be made by CIMA to Astra
in accordance with clause 6 and all other relevant provisions of
this Agreement. On each Payment Date IPR shall be entitled to
withhold up to 50% (except as provided in clause 4.2) of the
amount of royalty then due to CIMA (or, if less, the total amount
of the Loan (including accrued unpaid interest thereon)
outstanding at that time), but only if CIMA has failed to make
payment to Astra in whole or in part of the amount due on such
Payment Date and only until such amount of principal and interest
has been paid by CIMA to Astra. If IPR so agrees with Astra, IPR
may apply to such withheld amount by way of set-off in repayment
of an equivalent amount of the Loan (including accrued unpaid
interest thereon). The License Agreement shall be deemed amended
accordingly.
4.2 If and when the Loan becomes repayable in full for any reason,
then without prejudice to any other remedies Astra might have,
IPR shall be entitled to withhold up to 100% of the amount of
royalties due to CIMA from time to time (or, if less, the total
principal amount of the Loan
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(including accrued unpaid interest thereon outstanding at that
time)), but only if CIMA has failed to make payment to Astra in
whole or in part of the amount then due to Astra, and only until
such amount has been paid by CIMA to Astra. If IPR so agrees with
Astra, IPR may apply such amount(s) by way of set-off in
repayment of an equivalent amount of the Loan (including all
accrued unpaid interest thereon), until such time as the Loan
(including all accrued unpaid interest thereon) have been repaid
in full. The License Agreement shall be deemed amended
accordingly.
4.3 CIMA may at any time on a Banking Day prepay in whole or in part
the outstanding amount of the Loan (including interest accrued
thereon) without premium or penalty provided that any such
pre-payment of part only of the Loan must be of not less than
US$100,000 and subject to Astra being given not less than 5
Banking Days' prior written notice of CIMA's intention so to
repay the Loan or such part thereof.
4.4 [...***...]
4.5 [...***...]
5. [...***...]
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6. Payments; accounts and calculations
6.1 No set-off or counterclaim
All payments to be made by CIMA under this Agreement (whether of
principal or interest) shall be made in full, without any set-off
or counterclaim whatsoever and, except as provided in clause 3.4,
free and clear of any deductions or withholdings, on the due date
to such account of Astra as Astra may from time to time specify
for this purpose.
6.2 Non-Banking Days
When any payment under this Agreement would otherwise be due on a
day which is not a Banking Day, the due date for payment shall be
extended to the next following Banking Day.
6.3 Calculations
All interest and other payments of an annual nature under this
Agreement shall accrue from day to day and be calculated on the
basis of actual days elapsed and a 365 day year.
7 Representations and Warranties
7.1 CIMA represents and warrants to Astra that:
7.1.1 Corporate power to borrow
it has power to execute, deliver and perform its
obligations under this Agreement and to borrow the Loan;
all necessary corporate, shareholder and other action
has been taken to authorize the execution, delivery and
performance of the same and no limitation on the powers
of CIMA to borrow will be exceeded as a result of
entering into this Agreement;
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7.1.2 Binding obligations
this Agreement constitutes valid and legally binding
obligations enforceable in accordance with its terms;
7.1.3 No conflict with other obligations
the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of
this Agreement will not:
7.1.3.1 contravene any existing applicable law,
statute, rule or regulation or any judgment,
decree or permit to which it is subject;
7.1.3.2 conflict with, or result in any breach of
any of the terms of, or constitute a default
under, any agreement or other instrument to
which the it is a party or is subject or by
which it or any of its property is bound;
7.1.3.3 contravene or conflict with any provision of
it's By-Laws or equivalent documents; and
7.1.4 Default
No Default has occurred and is continuing which has not
been waived in writing by Astra;
7.2 Repetition
The representations and warranties in clause 7.1 shall be deemed
to be repeated by CIMA on and as of each Payment Date as if made
with reference to the facts and circumstances existing on each
such day.
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8 Undertakings
8.1 CIMA undertakes with Astra that from the date of this Agreement
and so long as any monies are owing under this Agreement, it
will:
[...***...]
8.2 CIMA undertakes with Astra that, from the Date of this Agreement
and so long as any monies are owing under this Agreement, without
the prior written consent of Astra, it will not :
[...***...]
9 Indemnities
9.1 Miscellaneous indemnities
CIMA shall on demand indemnify Astra, without prejudice to any of
its rights under this Agreement, against any loss or expense
which Astra shall certify as sustained or incurred by it as a
consequence of the occurrence of any Event of Default.
10 Events of Default
10.1 There shall be an Event of Default if:
10.2 any sum due and payable by CIMA to Astra hereunder is not paid in
full within 14 days after the due date; or
10.3 CIMA shall be in breach of or fail to perform or observe any of
the undertakings, conditions, covenants, agreements or
stipulations on its part contained in this Agreement and which
could have a material adverse effect on the ability of CIMA to
comply with its payment obligations under this Agreement and, in
the case of a breach capable of being remedied, fails to remedy
that breach within thirty (30) days
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after receiving written notice from Astra specifying that breach
and requiring the same to be remedied; or
10.4 if CIMA commits a breach of any the provisions of the License
Agreement or of the Supply Agreement and, in the case of a breach
capable of being remedied, fails to remedy that breach within
thirty (30) days after receiving written notice from Astra
specifying that breach and requiring the same to be remedied; or
10.5 CIMA becomes insolvent or bankrupt, or admits in writing its
inability to pay its debts as they mature, or makes an assignment
for the benefit of creditors, or ceases doing business as a going
concern, or CIMA applies for or consents to the appointment of a
trustee or receiver for itself or for the major part of its
property; or
10.6 a trustee or receiver is appointed for CIMA or for the major
part of its property and the order of such appointment is not
discharged, vacated or stayed within thirty (30) days after such
appointment; or
10.7 any judgment, writ or warrant of attachment or of any similar
process in an amount in excess of $250,000 shall be entered or
filed against CIMA or against any of its property or assets and
remains unpaid, unvacated, unbonded or unstayed for a period of
thirty (30) days; or
10.8 an order for relief shall be entered in any Federal bankruptcy
proceeding in which CIMA is the debtor; or if bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings for relief under any bankruptcy
or similar law or laws for the relief of debtors, are instituted
by or against CIMA and, if instituted against CIMA, are consented
to or, if contested by CIMA, are not dismissed by the adverse
parties or by an order, decree, or judgment within sixty (60)
days after such institution; or
10.9 CIMA shall default in any material respect in the due and
punctual performance of any covenant or agreement in any note,
bond, indenture, loan agreement, note agreement, mortgage,
security
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agreement or other instrument evidencing or related to
Indebtedness in excess of $500,000, and such default shall
continue for more than the period of notice and/or grace, if
any, therein specified and shall not have been waived;
10.10 CIMA suspends or ceases to carry on its business or any
material part thereof in the ordinary course of business as
now conducted; or
10.11 any representation or warranty made by CIMA contained in this
Agreement becomes materially incorrect; or
10.12 it becomes unlawful for CIMA to perform any of its obligations
under this Agreement.
10.13 At any time after any Event of Default has occurred, Astra
shall without prejudice to its other rights hereunder be
entitled to demand immediate repayment of the Loan (including
accrued unpaid interest thereon) and all other sums due under
this Agreement.
11 General
11.1 Benefit and burden
This Agreement shall be binding upon, and enure for the
benefit of, Astra, IPR and CIMA and their respective
successors.
11.2 [...***...]
11.3 [...***...]
11.4 Without prejudice to clauses 4.1 and 4.2 CIMA hereby agrees
that Astra and IPR may at any time after an Event of Default
has occurred without notice set-off any sum owing by Astra or
IPR to CIMA against any sums due to Astra hereunder.
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11.5 [...***...]
12 Notices and other matters
12.1 Notices
Every notice, request, demand or other communication under
this Agreement shall:
12.2 be in writing delivered personally, by facsimile transmission
or by first-class prepaid letter;
12.3 be deemed to have been received, subject as otherwise provided
in this Agreement, in the case of a letter when delivered or
(if sent by airmail) 5 days after it has been put into the
post and in the case of facsimile transmission, on the date
the facsimile is received; and
12.4 be sent:
to CIMA at: 10000 Valley View Road
Eden Prairie, MN USA 55344
Fax No: 612/947-8770
marked for the attention of: President and Chief Executive
Officer; and
to Astra at: Vastra Malarehamnen 9
S-151 36 Sodertalje
Sweden
Fax No: 08-553 290 00
marked for the attention of: Legal Affairs Department.
12.5 or to such other address or for the attention of such other
person as is notified by CIMA or Astra to the other party to
this Agreement.
12.6 No implied waivers, remedies cumulative
No failure or delay on the part of Astra to exercise any
power, right or
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remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise by Astra of any
power, right or remedy preclude any other or further exercise
thereof or the exercise of any other power, right or remedy.
The remedies provided in this Agreement are cumulative and are
not exclusive of any remedies provided by law.
13 First Right of Refusal
As further consideration for Astra agreeing to advance the Loan, CIMA
hereby grants to Astra a first right of refusal to exploit any new
technology to which CIMA may have the right from time to time and which
may have application in conjunction with any technology or products of
Astra or any of its Affiliates. Accordingly, CIMA may not grant to any
third party the right to exploit any such technology if within one year
from the date upon which CIMA notifies Astra of its intention to grant
such a right to any third party, Astra (or one of its Affiliates) has
entered into a license and development option agreement with CIMA in
respect of such new technology for at least one application. For these
purposes, CIMA agrees to negotiate any such agreement in good faith and
that the terms of any such agreement shall be at least equivalent to
those offered by CIMA to any third party.
14 Entire Agreement
14.1 This Agreement contains the entire agreement and understanding
of the parties with respect to the Loan and supersedes all
prior agreements, written or oral with respect to the Loan.
Each party acknowledges that it has not been induced to enter
into this Agreement by reason of any representation made by or
on behalf of the other party.
14.2 No variation to this Agreement shall be effective unless in
writing and signed by or on behalf of both parties.
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15 Governing law and jurisdiction
15.1 Law
This Agreement is governed by and shall be construed in
accordance with the laws of the State of Delaware without
regard to its choice of law provisions and each party submits
to the non-exclusive jurisdiction of the Federal courts of the
United States sitting in the State of Delaware and the courts
of the State of Delaware.
15.2 The submission by the parties to such jurisdiction shall not
limit the right of Astra or CIMA to commence any proceedings
arising out of this Agreement in any other jurisdiction it
considers appropriate. Any notice of proceedings or other
notices in connection with or which would give effect to any
such proceedings may without prejudice to any other method of
service be served in accordance with Clause 12.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
ASTRA AB (in the process of changing its name to AstraZeneca AB)
Signed /s/ Johannes Linda
Johannes Linda
Assistant General Counsel
December 13, 1999
CIMA LABORATORIES, INC.
Signed /s/ John M. Siebert
Title President and CEO
Date 15 December 99