EXHIBIT 10.1
DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
BY AND BETWEEN
CIMA LABS INC.
AND
SCHERING-PLOUGH LTD.
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS......................................................................... 2
ARTICLE II - LICENSE; DISCLOSURE OF INFORMATION DEVELOPMENT AND
COMMERCIALIZATION............................................................................... 9
2.1 EXCLUSIVE LICENSE GRANT................................................................ 9
2.2 DISCLOSURE OF INFORMATION.............................................................. 10
2.3 DEVELOPMENT PROGRAM.................................................................... 10
2.4 SPECIFICATIONS AND BULK SPECIFICATIONS................................................. 10
2.5 COMPLETION OF DEVELOPMENT PROGRAM...................................................... 11
2.6 SCHERING COOPERATION IN DEVELOPMENT PROGRAM............................................ 11
2.7 COSTS OF DEVELOPMENT PROGRAM........................................................... 11
2.8 REPORTING RELATING TO DEVELOPMENT PROGRAM.............................................. 11
2.9 LIAISONS FOR DEVELOPMENT PROGRAM....................................................... 11
2.10 DELIVERY OF ACTIVE INGREDIENT FOR DEVELOPMENT PROGRAM.................................. 12
2.11 SHIPMENT OF LICENSED PRODUCT FOR DEVELOPMENT PROGRAM................................... 12
2.12 OUTSIDE SERVICES AGREEMENT............................................................. 12
ARTICLE III - PAYMENTS; ROYALTIES AND REPORTS................................................... 12
3.1 CONSIDERATION FOR LICENSE.............................................................. 12
3.2 ROYALTIES.............................................................................. 13
3.3 REPORTS AND PAYMENT OF ROYALTY......................................................... 15
3.4 MAINTENANCE OF RECORDS; AUDITS......................................................... 16
ARTICLE IV - PATENTS............................................................................ 17
4.1 FILING, PROSECUTION AND MAINTENANCE OF PATENTS......................................... 17
4.2 OPTION OF SCHERING TO PROSECUTE AND MAINTAIN PATENTS................................... 17
4.3 ENFORCEMENT............................................................................ 18
4.4 INFRINGEMENT AND THIRD PARTY LICENSES.................................................. 19
4.5 THIRD PARTY INFRINGEMENT SUIT.......................................................... 20
4.6 ABANDONMENT............................................................................ 21
4.7 IDENTIFICATION OF CIMA ON PACKAGING OF LICENSED PRODUCT................................ 21
ARTICLE V - QUALITY CONTROL AND REGULATORY COMPLIANCE........................................... 21
5.1 FACILITY COMPLIANCE AND RELATED MATTERS................................................ 21
5.2 QUALITY CONTROL PROGRAM................................................................ 22
5.3 APPROVAL FOR MANUFACTURING CHANGES; THIRD PARTY MANUFACTURING.......................... 22
5.4 RETENTION OF SAMPLES................................................................... 22
5.5 BATCH FAILURE.......................................................................... 22
5.6 NOTIFICATION OF REGULATORY INSPECTIONS................................................. 23
5.7 INSPECTION BY SCHERING................................................................. 23
5.8 ENVIRONMENTAL AND OTHER LAWS........................................................... 23
ARTICLE VI - PRODUCT RECALL..................................................................... 24
6.1 NOTIFICATION AND RECALL................................................................ 24
6.2 RECALL EXPENSES........................................................................ 24
ARTICLE VII - APPROVAL SUPPORT; REGULATORY MATTERS.............................................. 25
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7.1 APPROVAL SUPPORT....................................................................... 25
7.2 FILING AND MAINTENANCE OF THE HEALTH REGISTRATIONS..................................... 25
7.3 REGULATORY ASSISTANCE FOR MAINTAINING FILINGS.......................................... 26
7.4 SPECIFICATIONS AND BULK SPECIFICATIONS; AMENDMENTS..................................... 26
7.5 COMPLAINTS OR ADVERSE EXPERIENCES...................................................... 26
7.6 RECORD KEEPING......................................................................... 27
7.7 CIMA APPROVALS......................................................................... 28
ARTICLE VIII - SUPPLY OF BULK ACTIVE AND RAW MATERIALS.......................................... 28
8.1 SCHERING OBLIGATION.................................................................... 28
8.2 CIMA OBLIGATION........................................................................ 29
8.3 ACCEPTANCE OF BULK ACTIVE.............................................................. 29
8.4 STORAGE AND FORMULATION OF BULK ACTIVE AND RAW MATERIALS; OWNERSHIP OF BULK ACTIVE..... 29
8.5 YIELD LOSSES........................................................................... 29
ARTICLE IX - SUPPLY OF MANUFACTURED PRODUCT..................................................... 29
9.1 SUPPLY OF SCHERING'S REQUIREMENTS...................................................... 29
9.2 GOOD FAITH FORECASTS................................................................... 30
9.3 PURCHASE ORDERS........................................................................ 30
9.4 STOPPAGE DUE TO GOOD CAUSE............................................................. 31
9.5 SCHERING OPTION TO MANUFACTURE......................................................... 31
ARTICLE X - DELIVERY AND RELATED MATTERS........................................................ 33
10.1 CERTIFICATE OF ANALYSIS................................................................ 33
10.2 RISK OF LOSS........................................................................... 33
10.3 STORAGE................................................................................ 33
10.4 DELAY AND FAILURE TO SUPPLY............................................................ 33
10.5 REJECTION.............................................................................. 34
ARTICLE XI - PAYMENT............................................................................ 35
11.1 PRICE.................................................................................. 35
11.2 PRICE ADJUSTMENT....................................................................... 35
11.3 MAXIMUM PRICE INCREASE................................................................. 37
11.4 TAXES.................................................................................. 37
ARTICLE XII - CONFIDENTIALITY AND PUBLICATION................................................... 37
12.1 CONFIDENTIALITY........................................................................ 37
12.2 NO PUBLICITY........................................................................... 39
12.3 PUBLICATION............................................................................ 39
12.4 ORAL DISCLOSURE OF PROPRIETY INFORMATION............................................... 40
ARTICLE XIII - REPRESENTATIONS AND WARRANTIES................................................... 40
13.1 REPRESENTATIONS AND WARRANTIES OF EACH PARTY........................................... 40
13.2 CIMA'S REPRESENTATIONS AND WARRANTIES.................................................. 41
13.3 CIMA COVENANTS......................................................................... 42
13.4 SCHERING'S REPRESENTATIONS AND WARRANTIES.............................................. 43
13.5 SCHERING COVENANTS..................................................................... 44
13.6 COVENANTS OF EACH PARTY................................................................ 44
13.7 CONTINUING REPRESENTATIONS............................................................. 44
13.8 NO INCONSISTENT AGREEMENTS............................................................. 44
13.9 REPRESENTATION BY LEGAL COUNSEL....................................................... 44
ARTICLE XIV - INDEMNIFICATION AND LIMITATION ON LIABILITY....................................... 45
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14.1 INDEMNIFICATION BY SCHERING......................................................... 45
14.2 INDEMNIFICATION BY CIMA............................................................. 45
14.3 CONDITIONS TO INDEMNIFICATION....................................................... 45
14.4 SETTLEMENTS......................................................................... 46
14.5 LIMITATION OF LIABILITY............................................................. 46
14.6 INSURANCE........................................................................... 46
ARTICLE XV - TERM AND TERMINATION............................................................... 46
15.1 TERM AND EXPIRATION................................................................. 46
15.2 TERMINATION BY SCHERING............................................................. 47
15.3 TERMINATION......................................................................... 47
15.4 EFFECT OF TERMINATION............................................................... 49
ARTICLE XVI - MISCELLANEOUS..................................................................... 49
16.1 ASSIGNMENT.......................................................................... 50
16.2 GOVERNING LAW....................................................................... 50
16.3 WAIVER.............................................................................. 50
16.4 INDEPENDENT RELATIONSHIP............................................................ 50
16.5 EXPORT CONTROL...................................................................... 51
16.6 ENTIRE AGREEMENT; AMENDMENT......................................................... 51
16.7 NOTICES............................................................................. 51
16.8 PROVISIONS FOR INSOLVENCY........................................................... 52
16.9 FORCE MAJEURE....................................................................... 54
16.10 SEVERABILITY........................................................................ 54
16.11 COUNTERPARTS........................................................................ 55
16.12 CAPTIONS............................................................................ 55
16.13 RECORDING........................................................................... 55
16.14 FURTHER ACTIONS..................................................................... 55
APPENDIX A - CHEMICAL FORMULA OF [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
APPENDIX B - BULK SPECIFICATIONS FOR BULK ACTIVE
APPENDIX C - DEVELOPMENT PROGRAM
APPENDIX D - LICENSED PATENTS RIGHTS
APPENDIX E - COPY OF OUTSIDE SERVICES AGREEMENT
APPENDIX F - PACKAGING COMPONENTS FOR LICENSED PRODUCT
APPENDIX G - PRICE OF LICENSED PRODUCT SUPPLIED BY CIMA FOR COMMERCIAL USE
APPENDIX H - SPECIFICATIONS FOR LICENSED PRODUCT
APPENDIX I - ADVERSE EVENT REPORTING PROCEDURES FOR PRODUCTS
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SAFETY AGREEMENT APPENDIX I
SAFETY AGREEMENT APPENDIX 2
APPENDIX J - STORAGE CONDITIONS
APPENDIX K - EXPENSE GUIDELINES
APPENDIX L - KEY SCHERING MARKETS
APPENDIX M - ARBITRATION PROVISIONS
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THIS DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT (the "Agreement") is
made as of the last date on the signature page hereof (the "Effective Date") by
and between CIMA LABS INC., a Delaware corporation having its principal place of
business at 10,000 Valley View Road, Eden Prairie, Minnesota 55344 (hereinafter
referred to as "CIMA") and Schering-Plough Ltd., a corporation duly organized
and existing under the laws of Switzerland, with an office at Toepferstrasse 5,
CH 6004 Lucerne, Switzerland (hereinafter referred to as "Schering"). CIMA and
Schering are sometimes referred to herein individually as a party and
collectively as the parties. References to "Schering" and "CIMA" shall include
their respective Affiliates (as hereinafter defined).
WHEREAS, CIMA and its Affiliates have developed a fast-dissolving drug
delivery system and possess confidential technology, manufacturing know-how and
experience related thereto; and
WHEREAS, Schering and its Affiliates have developed a proprietary
pharmaceutical product, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***], which will be
sold in various finished pharmaceutical dosage forms by Schering; and
WHEREAS, the parties have entered into an Outside Services Agreement
(as defined below), under which CIMA has performed and will perform certain
development work relating to the Licensed Product (as defined below); and
WHEREAS, the parties desire to enter into an agreement whereby, subject
to the terms of this Agreement, CIMA shall continue to develop the Licensed
Product for Schering including, without limitation, scale-up and validation of
the manufacturing process, and shall provide data necessary to support an NDA
for the Licensed Product and shall manufacture the Licensed Product for
Schering; and
WHEREAS, Schering, together with its Affiliates, possess extensive
capabilities in the development and commercialization of pharmaceutical products
on a worldwide basis; and
WHEREAS, Schering desires to obtain and CIMA is willing to grant to
Schering, an exclusive license under the Licensed Patent Rights (as hereinafter
defined) and to use the CIMA Know-How (as hereinafter defined) in combination
with the Active Ingredient (as hereinafter defined) upon the terms and
conditions set forth herein; and
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NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, Schering and CIMA hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following capitalized terms, whether
used in the singular or plural, shall have the respective meanings set forth
below:
1.1 The term "Active Ingredient" shall mean [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***], having the chemical formula contained in Appendix A,
and its pharmaceutically acceptable salts.
1.2 The term "Approved Facility" shall mean that FDA approved
facility of CIMA located at 10,000 Valley View Road, Eden Prairie, Minnesota, to
be used by CIMA in its performance of this Agreement or such other facility as
may be approved by Schering in accordance with Section 5.1, including, all of
the equipment, machinery and facilities of CIMA at such location that are to be
used in the Manufacturing and storage of Licensed Product.
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 fifty percent (50%) or more of the outstanding voting
securities of an entity, or the right to receive fifty percent (50%) or more 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 "Bulk Active(s)" shall mean the Active Ingredient in
bulk form and meeting the Bulk Specifications.
1.5 The term "Bulk Specifications" shall mean the specifications
and quality control testing procedures for the Bulk Active set forth in Appendix
B hereto, as amended from time to time, in accordance with the terms of this
Agreement.
1.6 The term "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.
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1.7 The term "Calendar Year" shall mean each successive period of
twelve (12) months commencing on January 1 and ending on December 31, for so
long as this Agreement is in effect.
1.8 The term "CIMA Know-How" shall mean any of CIMA's or its
Affiliates' proprietary information and materials relating to the research,
development, registration, or Manufacture of Licensed Product which during the
Term of this Agreement are in CIMA's or its Affiliates' possession or control,
through license or otherwise, and which are not generally known or become known
during the Term of the Agreement. CIMA Know-How shall include, without
limitation, discoveries, methods, knowledge, Improvements, processes, formulas,
data, ideas, experience, inventions, know-how, technology, trade secrets,
manufacturing procedures, purification and isolation techniques, test data and
other intellectual property, patentable or otherwise, developed by or on behalf
of CIMA relating to the OraSolv Technology or its use in combination with the
Active Ingredient.
1.9 The term "CIMA Trademark" shall mean any trademark(s)
proposed, chosen, owned or controlled by CIMA or its Affiliates.
1.10 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 Licensed Product and its components and the control and
Manufacturing process for the Licensed Product, as amended or supplemented from
time to time.
1.11 The term "Development Program" shall mean all development work
undertaken under the Outside Services Agreement or hereunder by or on behalf of
CIMA or its Affiliates with respect to development of Licensed Product
including, without limitation, the work set forth in Appendix C hereto, as well
as all development work undertaken by Schering or its Affiliates as set forth in
Appendix C hereto, as such Appendix C may be amended by mutual written agreement
of the parties hereto.
1.12 The term "EXW" shall mean Ex Works as that term is used in
Incoterms 2000.
1.13 The term "FDA" shall mean the United States Food and Drug
Administration or any successor agency thereof.
1.14 The term "FDCA" shall mean the Federal Food, Drug and Cosmetic
Act, 21 U.S.C. [sec]301-397, as amended.
1.15 The term "First Commercial Sale" shall mean, with respect to
any Licensed Product, the first sale for end use of such Licensed Product.
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1.16 The term "GMPs" shall mean current good manufacturing
practices for the methods to be used in, and the facilities and controls to be
used for, the manufacture, processing, packing and holding of drugs, all as set
forth from time to time by the FDA and any other relevant Regulatory Authorities
in the Territory.
1.17 The term "Health Registrations" shall mean the technical,
medical and scientific licenses, registrations, authorizations and/or approvals
of the Licensed 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, supra-national (e.g., the European Commission or the
Council of the European Union), regional, state or local regulatory agency,
department, bureau or other governmental entity in the Territory, for the
Manufacture, distribution, use or sale of Licensed Product in the Territory, as
amended or supplemented from time to time. With respect to the United States,
the term Health Registrations shall include, without limitation, an
"Investigational New Drug Application" or a "New Drug Application," as defined
in 21 C.F.R. pt. 312 and 21 C.F.R. pt. 314 respectively, for the Licensed
Product, as amended or supplemented from time to time.
1.18 The term "Improvement" shall mean any enhancement in the
formulation, ingredients, preparation, presentation, means of delivery, dosage,
packaging of, manufacture, or any new or expanded therapeutic indications(s) for
the Licensed Product, in each case which is developed prior to or during the
Term of this Agreement by or on behalf of CIMA or by or on behalf of Schering,
as applicable.
1.19 The term "Independent Auditor" shall mean a nationally
recognized certified public accounting firm, provided, however, no certified
public accounting firm shall be engaged for the purpose of determining a Price
adjustment if that firm has, or at any time within the last five (5) years prior
to such engagement has had, any business relations or affiliations with either
Schering or CIMA.
1.20 The term "IND" shall mean an investigational new drug
application submitted to the FDA or its equivalent in countries outside the
United States, approval of which permits the clinical investigation of Licensed
Product.
1.21 The term "Law" or "Laws" shall mean all applicable federal,
state, local or foreign statutes or laws and shall be deemed also to refer to
all rules and regulations promulgated thereunder by any Regulatory Authorities
in the Territory, unless context requires otherwise. Any reference to a
particular statute, law, rule or regulation will be interpreted to include any
revision of or
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successor to such statute, law, rule or regulation regardless of how it is
numbered or classified.
1.22 The term "Licensed Patent Rights" shall mean all claims of any
patent applications or issued patents in the Territory, whether in existence as
of the date of this Agreement, or filed or issued during the Term of this
Agreement, to which CIMA and/or its Affiliates has or acquires any right and
which cover the manufacture, use or sale of Licensed Product, including, without
limitation, the United States and foreign patent applications and issued patents
which:
(a) are listed, as of the effective date of this Agreement,
in Appendix D which is attached hereto and made a part hereof and which
shall be periodically updated by written notice from CIMA to Schering
in a timely fashion during the term of the Agreement;
(b) relate to the OraSolv Technology or the CIMA Know-How;
(c) arise out of or are developed during and under the
performance of the Development Program by CIMA or its Affiliates;
and/or
(d) cover any patentable Improvement of any of the
foregoing.
Licensed Patent Rights shall include any reissues, reexaminations, extensions
(or other governmental actions which provide exclusive rights to the patent
holder in the patented subject matter beyond the original patent expiration
date), substitutions, confirmations, registrations, revalidations, additions,
continuations, continuations-in-part, or divisions of or to any patent
applications or issued patents described in (a)-(d) of this Section.
1.23 The term "Licensed Product" shall mean any dosage form
utilizing any material elements of the CIMA Know-How, and/or the Licensed Patent
Rights, in its Manufacture or use, and which contains the Active Ingredient as a
pharmaceutically active ingredient.
1.24 The term "Manufacture", "Manufactured" or "Manufacturing"
shall mean the manufacture, formulating, finishing (including packaging),
filling, and quality control testing (including in-process, release, and
stability testing) of the Licensed Product.
1.25 The term "NDA" shall mean a New Drug Application, Product
License Application or its equivalent filed with the FDA seeking approval to
market and sell a Licensed Product in the United States.
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1.26 The term "Net Sales" shall mean the sales invoiced by
Schering, its Affiliates or sublicensees on all sales of Licensed Product to an
unaffiliated third party (whether an end-user, a distributor or otherwise), and
exclusive of intercompany transfers or sales in the Territory, less the
reasonable and customary deductions utilized in the pharmaceutical industry,
from such gross amounts including:
(i) normal and customary trade, cash and quantity discounts,
allowances and credits;
(ii) credits or allowances actually granted for damaged goods,
returns or rejections of Licensed Product and retroactive price reductions;
(iii) sales or similar taxes (including duties or other governmental
charges levied on, absorbed or otherwise imposed on the sale of Licensed Product
including, without limitation, value added taxes or other governmental charges
otherwise measured by the billing amount, when included in billing);
(iv) freight, postage, shipping, customs duties and insurance
charges; and
(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.
1.27 The term "OraSolv Technology" shall mean the fast-dissolving
drug delivery system described in U.S. Patent 5,178,878 and U.S. Patent
Application 08/468,913 including, formulations, materials, methods and other
technologies which are owned by CIMA or licensed to CIMA with the right to grant
sublicenses.
1.28 The term "Outside Services Agreement" shall mean the Outside
Services Agreement by and between the parties effective May 21, 2001, as amended
by the Amendment #1 to Outside Services Agreement entered into on September 25,
2001 and Amendment #2 to Outside Services Agreement entered into on December 3,
2001, copies of which are attached hereto as Appendix E, as amended from time to
time.
1.29 The term "Packaging Insert" shall mean the written materials
approved by the FDA and required to be inserted into any packaged Licensed
Product utilized by patients after approval of all Health Registrations
necessary to sell the Licensed Product in the Territory.
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1.30 The term "Packaging Components" shall mean the packaging
materials meeting the specifications described on Appendix F, to be provided by
CIMA for the packaging of Licensed Product Manufactured by CIMA after approval
of all Health Registrations necessary to sell the Licensed Product in the
Territory.
1.31 The term "Price" shall mean the price of Licensed Product
supplied to Schering by CIMA as set forth on Appendix G hereto.
1.32 The term "Proprietary Information" shall mean CIMA Know-How,
Schering Know-How and all other scientific, clinical, regulatory, marketing,
financial and commercial information or data, whether communicated in writing,
verbally or electronically, which is provided by one party to the other party in
connection with this Agreement.
1.33 The term "Raw Materials" shall mean, inter alia, all raw
materials, components, and excipients, other than Bulk Active or Active
Ingredient, useful or necessary for the Manufacture of the Licensed Product in
accordance with this Agreement.
1.34 The term "Regulatory Authority" shall mean the applicable
government regulatory authority in each country in the Territory involved in
granting the Health Registrations for the Licensed Product. Such term includes,
without limitation, the FDA and any successor thereto.
1.35 The term "Requirements" shall mean all quantities of the
Licensed Product that shall be required by Schering for clinical trial materials
(including for new indications) and for distribution, marketing (including
samples) or other research and development activities, and sale of the Licensed
Product in the Territory during the term hereof.
1.36 The term "Schering Know-How" shall mean any of Schering's or
its Affiliates' information and materials relating to the research, development,
registration, manufacture, marketing, use or sale of Active Ingredient, Bulk
Active and/or Licensed Product which during the Term of this Agreement are in
Schering's or its Affiliates' possession or control, through license or
otherwise, and which are not generally known, including without limitation such
information and materials that become known as a result of the Development
Program during the Term of this Agreement. Schering Know-How shall include,
without limitation, discoveries, methods, knowledge, Improvements, processes,
formulas, data, ideas, experience, inventions, know-how, technology, trade
secrets, manufacturing procedures, purification and isolation techniques, test
data and other intellectual property, patentable or otherwise, developed by or
on behalf of Schering or its Affiliates relating to Licensed
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Product, which relate primarily to the Active Ingredient or the therapeutic
class [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the Licensed Product,
including without limitation, test procedures and other new technologies derived
therefrom. Without limitation, Schering Know How shall include the
Specifications, the Bulk Specifications, the CMC, the production monograph
setting forth the master batch records and quality control testing, and all
other data, ideas, inventions, instructions, processes, formulae, expert opinion
and information which are owned or controlled by Schering or its Affiliates as
of the effective date of this Agreement or during the Term of this Agreement and
which are necessary for the Manufacture of the Licensed Product.
1.37 The term "Schering Trademark" shall mean any trademark(s)
proposed, chosen, owned or controlled by Schering or its Affiliates for use with
Active Ingredient and/or the Licensed Product in the Territory.
1.38 The term "Specifications" means the specifications and quality
control testing procedures for the Licensed Product as set forth in Appendix H
hereto, as amended from time to time in accordance with the terms of this
Agreement.
1.39 The term "Supply Failure" shall mean CIMA's inability to
Manufacture enough Licensed Product to deliver in a timely manner at least
seventy-five percent (75%) of the Licensed Product actually ordered by Schering
in accordance with the most recent forecast for the specified period.
1.40 The term "Territory" shall mean all of the countries and
territories in the world.
1.41 The term "Term" shall mean the period commencing on the
Effective Date and unless terminated earlier pursuant to the relevant provisions
of Article XV shall continue on a country by country basis until the later of
(i) ten (10) years after the First Commercial Sale of the Licensed Product in
such country or (ii) the expiration of the last to expire of the Licensed Patent
Rights in such country incorporating a Valid Claim.
1.42 The term "Valid Claim" shall mean a composition of matter or
method of use claim, or equivalent thereof, of an issued and unexpired patent in
the Territory covering Licensed Product(s) included within the Licensed Patent
Rights, which (i) has not been revoked or held unenforceable or invalid by a
decision of a court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal; or
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(ii) has not been abandoned, disclaimed, denied or admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise.
1.43 The term "Yield Losses" or "Yield Loss" shall mean the
percentage of Bulk Active that is lost or wasted during Manufacturing and not
included in the Licensed Product.
ARTICLE II
LICENSE; DISCLOSURE OF INFORMATION
DEVELOPMENT AND COMMERCIALIZATION
2.1 Exclusive License Grant.
(a) License to Patent Rights of CIMA. CIMA hereby grants to
Schering, as of the Effective Date, an exclusive license, exclusive
even as to CIMA, in the Territory under the Licensed Patent Rights, and
to use CIMA Know-How to develop, make, have made, import, export, use,
distribute, market, promote, offer for sale and sell Licensed
Product(s). Any Improvements shall be included in CIMA Know-How or
Licensed Patent Rights, as the case may be, for all purposes of this
Agreement. Without limiting the foregoing, CIMA hereby grants Schering
an irrevocable, worldwide, paid-up, exclusive license to use CIMA
Know-How or other intellectual property rights relating to the
Development Program and Manufacture of Licensed Product that are
necessary for Schering's filings for the purpose of obtaining and
maintaining the Health Registrations in the Territory for the Licensed
Product, including but not limited to the Manufacturing of Licensed
Product as provided in the Health Registrations. Notwithstanding the
foregoing, Schering has granted certain rights to Manufacture Licensed
Product to CIMA, which rights are set forth in Section 2.1 (c) below.
(b) Right to Sublicense. The licenses granted to Schering
under Section 2.1(a) shall include the right to grant sublicenses to
Affiliates. Schering shall provide CIMA with notice of any sublicense
to an Affiliate. In addition, in the event that Schering exercises its
option rights to Manufacture Licensed Product(s) under Section 9.5 of
this Agreement, Schering shall also have the right, with the written
consent of CIMA, which consent shall not be unreasonably withheld or
delayed, to grant sublicenses to any third party to Manufacture the
Licensed Product(s) for Schering and its Affiliates by providing CIMA
with sixty (60) days' prior written notice of the proposed sublicense.
(c) License to Manufacture. Notwithstanding the provisions
of Section 2.1 (a) above, Schering hereby grants to CIMA an exclusive
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license, exclusive even as to Schering, in the Territory, to
Manufacture Licensed Product(s) during the Term for the sale of
Licensed Product(s) to Schering in accordance with the terms of this
Agreement, subject only to Schering's option rights to Manufacture
Licensed Product(s) under Section 9.5 of this Agreement.
2.2 Disclosure of Information. Promptly after the Effective Date,
CIMA shall disclose to Schering in writing, or via electronic media acceptable
to Schering, all CIMA Know-How not previously disclosed to Schering as
reasonably necessary in order to enable Schering to exploit its rights granted
under Section 2.1 of this Agreement. In addition, during the Term of this
Agreement CIMA shall promptly disclose to Schering in writing, or via electronic
media acceptable to Schering, CIMA Know-How relating to any Improvements. Such
CIMA Know-How and other information shall be automatically deemed to be within
the scope of the licenses granted herein without payment of any additional
compensation. Notwithstanding the foregoing, the parties recognize that CIMA
will Manufacture the Licensed Product until such time as Schering exercises its
option rights under Section 9.5, and CIMA shall not be obligated to provide CIMA
Know-How relating to the Manufacture of the Licensed Product, except as
necessary for Schering to file and maintain any Health Registrations, until such
time as Schering exercises its option rights under Section 9.5.
2.3 Development Program.
(a) Outside Services Agreement. The parties acknowledge and
agree that all development activities set forth in the Outside Services
Agreement through Phase IVa, Pilot Scale Biobatch and Definitive
Stability Batches: Manufacture and Stability, as described on
Attachment B-1 of the Outside Services Agreement, have been or shall be
performed pursuant to and under the terms of the Outside Services
Agreement.
(b) Other Development. All development activities relating
to Phase IVb, Full Scale Demonstration and Stability Batches:
Manufacture and Stability, as described on Appendix C, and thereafter
(Phase V and Phase VI) shall be performed pursuant to and under the
terms of this Agreement, including all activities set forth on Appendix
C.
2.4 Specifications and Bulk Specifications. The Specifications for
the Licensed Product set forth in Appendix H and the Bulk Specifications set
forth in Appendix B hereof may be amended at any time by Schering in accordance
with Section 7.4 of this Agreement.
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2.5 Completion of Development Program. CIMA and/or its Affiliates
shall use diligent efforts to carry out in a timely fashion its obligations
under the Development Program, except if CIMA has obtained the prior written
approval of Schering to modify a portion of the Development Program. The terms
of the Development Program may only be changed by written agreement of both
parties hereto.
2.6 Schering Cooperation in Development Program. Schering and/or
its Affiliates shall use diligent efforts, at its sole cost and expense, to
carry out all tests and clinical trials set forth in the Development Program.
CIMA shall supply Schering in a timely fashion and at no additional cost to
Schering with the quantities of Licensed Product set forth in the Development
Program as shall be reasonably required to carry out such tests and clinical
trials. Quantities of Licensed Product provided for this purpose in excess of
those set forth in Appendix C hereto shall be purchased from CIMA by Schering at
a cost equal to [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] (U.S.) per batch
(minimum of 100,000 tablets per batch).
2.7 Costs of Development Program. Except for the cost of Bulk
Active, which is to be supplied to CIMA at no cost by Schering pursuant to this
Agreement, the cost of tooling unique to the Licensed Product described in
Appendix G (which costs shall be set forth in another written agreement), and
the costs specifically set forth on Appendix C as costs for which Schering shall
be responsible, CIMA shall be responsible for all direct and indirect costs and
expenses of personnel and for materials, plant and equipment which CIMA and/or
its Affiliates employs or utilizes in carrying out its obligations under the
Development Program, including, without limitation, (1) the cost of any work
performed by its personnel and/or third parties retained by CIMA under the
Development Program, and (2) all transportation, hotel and other travel expenses
incurred by CIMA's or its Affiliates' employees, agents and third party
contractors while carrying out tasks under the Development Program.
2.8 Reporting Relating to Development Program. CIMA shall keep
Schering informed of its progress under the Development Program by way of
periodic meetings and telephone conferences and, upon Schering's request, by
means of periodic written summary reports. In addition, Schering will have
reasonable access to CIMA's facilities and relevant records during and after the
Development Program to monitor the progress of the Development Program.
2.9 Liaisons for Development Program. CIMA and Schering shall
each designate one (1) senior employee as technical liaison to handle all
technical matters and communications relating to the Development Program.
-11-
2.10 Delivery of Active Ingredient for Development Program.
Schering has provided CIMA with certain Schering Know-How relating to the Active
Ingredient and shall provide CIMA with any additional Schering Know-How in
Schering's possession as CIMA shall reasonably request and Schering shall
reasonably agree is necessary to enable CIMA to perform the Development Program.
Schering shall also supply to CIMA, at no cost, sufficient quantities of Bulk
Active, reasonably required for CIMA to carry out its activities under the
Development Program as required by Section 2.3(b) and Appendix C hereof. CIMA
agrees to advise Schering, at least sixty (60) days in advance of the requested
delivery thereof, of its requirements for the Bulk Active.
2.11 Shipment of Licensed Product for Development Program. CIMA
shall ship each batch of Licensed Product for the Development Program within
five (5) calendar days of Manufacture and receipt by CIMA of shipping
instructions from Schering. Within five (5) calendar days of Manufacture of each
batch of Licensed Product, CIMA shall prepare, and deliver to Schering, all
documentation relating to the individual batch of Licensed Product that is
required by any Regulatory Authority for Schering and/or CIMA to demonstrate
that the Manufacture of the batch of Licensed Product complies with Laws and
Specifications.
2.12 Outside Services Agreement. All services performed under
the Outside Services Agreement by CIMA relating to the Development Program
shall be performed in compliance with all applicable Laws.
ARTICLE III
PAYMENTS; ROYALTIES AND REPORTS
3.1 Consideration for License. In partial consideration for the
licenses granted to Schering hereunder, Schering shall make the following
payments to CIMA on the first occurrence of the indicated triggering events.
$250,000 Within five (5) days after
execution of this Agreement
$250,000 [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE
COMMISSION.***] (already paid
01/23/02)
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[***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]
Each of the milestones payments set forth in this Section 3.1 shall be payable
once upon the initial achievement of such event and no amounts shall be due
hereunder for subsequent or repeated achievement of such event.
3.2 Royalties.
(a) Royalty Rates. In further consideration for the licenses
granted to Schering hereunder, starting on a country by country basis
with the First Commercial Sale of Licensed Product in the country,
Schering shall pay to CIMA, royalties of [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] of annual Net Sales of Licensed Product in the
Territory.
(b) Term and Scope of Royalty Obligations. Subject to the
terms of Sections 4.3(b) and 14.1, royalties on each Licensed Product
at the rate set forth in Section 3.2(a) shall continue on a country by
country basis until the later of (i) ten (10) years from the First
Commercial Sale of the first Licensed Product in the country or (ii)
the expiration of the last applicable Licensed Patent Right
incorporating a Valid Claim. No royalties shall be due upon the sale or
other transfer among Schering, its Affiliates or sublicensees, but in
such cases the royalty shall be due and calculated upon Schering's or
its Affiliates' or its sublicensees' Net Sales to the first independent
third party. No royalties shall accrue on the disposition of Licensed
Product by Schering, its Affiliates or its sublicensees as donations
(for example, to non-profit institutions or government agencies for a
non-commercial purpose), or at minimal pricing for charitable purposes
to financially disadvantaged patients, directly or indirectly, through
Schering's "Commitment to Care" and successor programs, professional
samples, or Licensed Product provided at no cost to any third party or
for clinical studies.
(c) Third Party Licenses. In the event that patent licenses
from third parties are required by Schering, its Affiliates and
sublicensees in order to use the OraSolv Technology to develop, make,
have made, import, export, use, distribute, promote, market, offer for
sale or sell Licensed Product(s) (hereinafter "Third Party Patent
Licenses"), then the royalty rates set forth in Section 3.2(a) shall be
adjusted such that the royalty rate for Net Sales of Licensed Product
which Schering is obligated
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to pay CIMA shall be reduced by [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] in royalties which Schering is obligated to pay under
Third Party Patent Licenses obtained pursuant to Section 4.4, provided,
however, that the royalty rate hereunder shall not be reduced by more
than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. By way of
example and for avoidance of doubt, if Schering is obligated to pay
royalties to CIMA on Net Sales of a Licensed Product and is also
obligated to pay a [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] percent [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] royalty on sales of the same Licensed Product under a
Third Party Patent License in order to use the OraSolv Technology, then
the royalty rate under this Agreement would be reduced by
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. For further example,
if the third party royalty obligation in the above example were
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] percent
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***], the calculated
royalty rate would be reduced by [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]. Schering acknowledges that such reductions will be
triggered only to the extent necessary for Schering to use the OraSolv
Technology, and there will be no reductions for royalties unrelated to
the use of the OraSolv Technology that Schering may be required to pay
in connection with the Licensed Product(s).
(d) Cap on Reductions. No provision of this Agreement shall
be interpreted to permit Schering to reduce any individual royalty
payment due CIMA by more than [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***].
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3.3 Reports and Payment of Royalty.
(a) Royalties Paid Quarterly. Within sixty (60) calendar
days following the close of each Calendar Quarter, following the First
Commercial Sale of a Licensed Product, Schering shall furnish to CIMA a
written report for the Calendar Quarter showing the Net Sales of
Licensed Product sold by Schering, its Affiliates and its sublicensees
in the Territory during such Calendar Quarter and the royalties payable
under this Agreement for such Calendar Quarter. Simultaneously with the
submission of the written report, Schering shall pay to CIMA, for the
account of Schering or the applicable Affiliate or sublicensee, as the
case may be, a sum equal to the aggregate royalty due for such Calendar
Quarter calculated in accordance with this Agreement (reconciled for
any previous overpayments or underpayments).
(b) Maximum Royalties. If the royalties set forth herein are
higher than the maximum royalties permitted by the Laws (without
reference to deductibility for tax purposes) in any country in the
Territory, the royalty payable for sales in such country shall be equal
to the maximum permitted royalty under such Laws.
(c) Tax Withholding. If any taxes, withholding or otherwise,
are levied by any taxing authority in connection with accrual or
payment of any royalties payable under this Agreement, Schering shall
have the right to pay such taxes to the local tax authorities on behalf
of CIMA and the payment to CIMA of the net amount due after reduction
by the amount of such taxes, together with evidence of payment of such
taxes, shall fully satisfy Schering's royalty obligations under this
Agreement. Withholding payments made by Schering pursuant to this
Section 3.3(c) shall be made based upon financial information provided
to Schering by CIMA, and to the extent that such information is
incorrect CIMA shall be liable for any deficiency, and any fine,
assessment or penalty imposed by any taxing authority in the Territory
for any deficiency in the amount of any such withholding or the failure
to make such withholding payment. If Schering is required to pay any
such deficiency, or any fine, assessment or penalty for any such
deficiency, CIMA shall promptly reimburse Schering for such payments,
which shall not be included in the calculation of Net Sales.
(d) Method of Payment. Payments to be made by Schering to
CIMA under this Agreement shall be paid by bank wire transfer in
immediately available funds to such bank account as is designated in
writing by CIMA from time to time. Royalty payments shall be made in
United States dollars.
-15-
(e) Binding Records. Upon the expiration of [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] following the end of any
Calendar Year, the calculation of royalties payable under this
Agreement with respect to such year shall be binding and conclusive
upon the parties, and Schering and its Affiliates and its sublicensees
shall be released from any liability or accountability with respect to
royalties for such Calendar Year. Nothing in this Section shall limit
the parties' rights under Section 3.4.
(f) Notice of First Sale. Schering shall provide CIMA with
notice of the First Commercial Sale of the Licensed Product in the
Territory within a reasonable period of time following such sale.
3.4 Maintenance of Records; Audits.
(a) Record Keeping by Schering. Schering and its Affiliates
shall keep complete and accurate records in sufficient detail to enable
the royalties payable hereunder to be determined. Upon forty-five (45)
days' prior written notice from CIMA, Schering shall permit an
independent certified public accounting firm of nationally recognized
standing selected by CIMA and acceptable to Schering, at CIMA's
expense, to have access during normal business hours to examine
pertinent books and records of Schering and/or its Affiliates as may be
reasonably necessary to verify the accuracy of the royalty reports
hereunder. The public accounting firm must agree in writing with
Schering to be bound by confidentiality obligations no more onerous
than those set forth in this Agreement. The examination shall be
limited to pertinent books and records for any Calendar Year ending not
more than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] prior to
the date of such request. An examination under this Section 3.4(a)
shall not occur more than once in any Calendar Year, and shall not
exceed one month in duration, unless otherwise agreed by Schering in
writing. Schering may designate competitively sensitive information
which such auditor may not disclose to CIMA, provided, however, that
such designation shall not encompass the auditor's conclusions. The
accounting firm shall disclose to CIMA only whether the royalty reports
are correct or incorrect and the specific details concerning any
discrepancies and such other information as may be reasonably necessary
to resolve any dispute over the auditor's conclusions. No other
information shall be provided to CIMA. All such accounting firms shall
sign a confidentiality agreement (in form and substance reasonably
acceptable to Schering) as to any of Schering's or its Affiliate's
confidential information which they are provided, or to
-16-
which they have access, while conducting any audit pursuant to this
Section 3.4(a).
(b) Underpayments/Overpayments. If such accounting firm
correctly concludes that additional royalties were owed during such
period, Schering shall pay the additional royalties within thirty (30)
days of the date CIMA delivers to Schering such accounting firm's
written report so correctly concluding. If such underpayment exceeds
five percent (5%) of the royalty correctly due CIMA then the fees
charged by such accounting firm for the work associated with the
underpayment audit shall be paid by Schering. Any underpayment shall
include interest at the prime rate quoted in the Wall Street Journal
from the date such payment was originally due by Schering. Any
overpayments by Schering will be credited against future royalty
obligations. In the event that Schering disagrees with the audit report
and the chief financial officers of Schering and CIMA fail to resolve
such disagreement, the dispute will be resolved through the dispute
resolution mechanism set forth in Section 16.2.
ARTICLE IV
PATENTS
4.1 Filing, Prosecution and Maintenance of Patents. Subject to
Section 4.2, CIMA agrees to diligently file, prosecute and maintain in all of
the countries listed in Appendix D, any Licensed Patent Rights owned in whole or
in part by CIMA and licensed to Schering under this Agreement. CIMA shall give
Schering an opportunity to review the text of the applications that relate to
the Licensed Product, before filing, shall consult with Schering with respect
thereto, and shall supply Schering with a copy of the applications as filed,
together with notice of its filing date and serial number. CIMA shall keep
Schering advised of the status of all actual and prospective patent filings that
relate to the Licensed Product, including grant of any such patent, and upon the
written request of Schering shall provide advance copies of any substantive
papers related to the filing, prosecution and maintenance of such patent filings
that relate to the Licensed Product.
4.2 Option of Schering to Prosecute and Maintain Patents. CIMA
shall give ninety (90) days' notice to Schering of any desire to cease
prosecution and/or maintenance of a particular Licensed Patent Right and, in
such case, shall permit Schering, at its sole discretion, to continue
prosecution or maintenance at its own expense. If Schering elects to continue
prosecution or maintenance, CIMA shall execute such documents and perform such
acts, at Schering's expense, as may be reasonably necessary to effect an
assignment of such Licensed Patent Rights to Schering. Any such assignment shall
be
-17-
completed in a timely manner to allow Schering to continue such prosecution or
maintenance. Any patents or patent applications so assigned shall thereafter not
be considered Licensed Patent Rights.
4.3 Enforcement. In the event that either Schering or CIMA becomes
aware of any infringement within the Territory of any issued patent within the
Licensed Patent Rights, it will notify the other party in writing to that
effect. Any such notice shall include evidence to support an allegation of
infringement by such third party.
(a) Discontinuance of Infringement. Provided that Schering
has not commenced exercise of its rights under Section 4.3(b), CIMA
shall have the right, but not the obligation, to obtain a
discontinuance of such infringement or bring suit against the third
party. CIMA shall bear all the expenses of any suit brought by it.
Schering shall have the right, prior to commencement of the trial, suit
or action brought by CIMA, to join any such suit or action, and in such
event shall pay one-half of the costs of such suit or action. In the
event that Schering has joined in the action and shared in the costs
thereof as set forth above, no settlement, consent judgment or other
voluntary final disposition of the suit may be entered into without the
consent of Schering, which consent shall not be unreasonably withheld.
In the event that Schering has not joined the suit or action, Schering
will reasonably cooperate with CIMA in any such suit or action and
shall have the right to consult with CIMA and be represented by its own
counsel at its own expense, provided that CIMA shall periodically
reimburse Schering for its reasonable out-of-pocket costs (excluding
the costs of retaining its own outside counsel) incurred in cooperating
with CIMA. Any recovery or damages derived from a suit which Schering
has joined and shared costs shall be used first to reimburse each of
CIMA and Schering for its documented out-of-pocket legal expenses
relating to the suit, with any remaining amounts to be shared equally
by the parties. Any recovery of damages derived from a suit which
Schering has not joined shall be retained by CIMA. In the event that a
third party has joined in any such suit or action, the parties agree
that any costs, or recovery of damages, will be shared equitably by
CIMA, Schering and such third party.
(b) Continuance of Infringement. If, within three (3) months
from the date of notice of infringement, CIMA has not commenced, or if
commenced is not actively pursuing, legal action against an infringer
as specified in Subsection 4.3(a), and such infringement is continuing,
then Schering shall have the right [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] on a country by country
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basis, for any country(ies) in the Territory where the infringement
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] provided, however,
that [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] shall not
be [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] by more
than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] of the
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] in the respective
country. Schering shall have [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] until said infringement ceases and, thereafter, the
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] In addition, Schering
shall have the right, but not the obligation, to bring suit against
such infringer under the Licensed Patent Rights and join CIMA as a
party plaintiff, provided that Schering shall bear all the expenses of
such suit. CIMA will cooperate with Schering in any suit for
infringement of a Licensed Patent Right brought by Schering against a
third party, and shall have the right to consult with Schering and to
participate in and be represented by its own counsel in such litigation
at its own expense. Schering shall periodically reimburse CIMA for its
reasonable out-of-pocket costs (excluding CIMA's costs of retaining its
own counsel) incurred in cooperating with Schering. Schering shall
incur no liability to CIMA as a consequence of such litigation or any
unfavorable decision resulting therefrom, including any decision
holding any of the Licensed Patent Rights invalid or unenforceable. In
the event that Schering recovers any sums in such litigation by way of
damages or in settlement thereof, such recovery shall be (i) first
applied to reimburse Schering for its documented out-of-pocket legal
expenses relating to the suit, (ii) then applied to reimburse Schering
for any lost sales in the Territory during the pendency of such suit
(which shall be deemed for purposes hereof to be equal to the sales of
infringing products during such period), (iii) then applied to
reimburse CIMA for royalty reductions by Schering and (iv) shall
thereafter be retained by Schering.
4.4 Infringement and Third Party Licenses. In the event that
Schering's, its Affiliates' or its sublicensees' use of the OraSolv Technology
in connection with making, having made, importing, exporting, using,
distributing, marketing, promoting, offering for sale or selling Licensed
-19-
Product(s) infringes, will infringe or is alleged by a third party to infringe a
third party's patent, the party becoming aware of same shall promptly notify the
other.
If Schering in good faith concludes that such use of the OraSolv
Technology infringes or may infringe a third party's patent, Schering shall
negotiate with said third party for a suitable license or assignment. In the
event that such negotiation results in a consummated agreement, then any lump
sum payment made thereunder shall be paid by Schering [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] but only to the extent of [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] in any Calendar Quarter. [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] shall be [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] any
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] CIMA [***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] Any [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] can be
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] to subsequent quarters. Schering shall
periodically advise CIMA of the status of negotiations under this Section 4.4,
and CIMA may provide its comments regarding the negotiations to Schering, with
Schering determining, in its sole discretion, whether to incorporate such
comments of CIMA into its negotiations with the third party.
4.5 Third Party Infringement Suit. In the event that a third party
sues Schering alleging that Schering's, its Affiliates' or its sublicensees' use
of the OraSolv Technology in connection with making, having made, importing,
exporting, using, distributing, marketing, promoting, offering for sale or
selling Licensed Product(s) infringes or will infringe said third party's
patent, then Schering shall defend such suit and, during the period in which
such suit is pending, Schering shall have the right to apply up to
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] of the royalties due CIMA on sales of
the allegedly infringing Licensed Product against its litigation expenses,
including settlement costs and royalties paid in settlement of any such suit,
provided, however, that in the event Schering recovers any such expenses such
recovery shall be first applied to pay any royalties applied by Schering against
-20-
its litigation expenses. CIMA shall have the right to participate in and be
represented by its own counsel at its own expense. CIMA or its counsel may
provide CIMA's comments regarding the litigation to Schering, and Schering shall
determine, in its sole discretion, whether to incorporate such comments into its
litigation strategy. Schering shall have sole discretion to settle any such
suit, or enter into any consent judgment or other voluntary final disposition of
the suit without the consent of CIMA, except that Schering may not enter into
any such consent judgment or other voluntary final disposition if such consent
judgment or other voluntary final disposition constitutes an admission of CIMA
which will foreclose CIMA from raising the issue in any future litigation,
without the written consent of CIMA, which consent shall not be unreasonably
withheld. Upon Schering's request and in connection with Schering's defense of
any such third party infringement suit, CIMA shall provide reasonable assistance
to Schering for such defense.
4.6 Abandonment. Subject to Schering's rights pursuant to Section
4.2, CIMA shall at the earliest known date give notice to Schering of the grant
lapse, revocation, surrender, invalidation or abandonment of any Licensed Patent
Rights licensed to Schering for which CIMA is responsible for the filing,
prosecution and maintenance under this Agreement.
4.7 Identification of CIMA on Packaging of Licensed Product. Any
Licensed Product Manufactured by or on behalf of Schering, if requested in
writing by CIMA, shall reference CIMA's name and patent numbers and/or patent
application numbers, as listed on Appendix D. In addition, CIMA may request that
Schering consent to additional language or markings suggested by CIMA in
writing, in order to assist CIMA in obtaining or preserving CIMA's rights in its
intellectual property. Schering, in its sole discretion, shall determine whether
such additional language or markings shall be added to the packaging. Except as
set forth in this Section, there shall be no other references to CIMA on
packaging of Licensed Product.
ARTICLE V
QUALITY CONTROL AND REGULATORY COMPLIANCE
5.1 Facility Compliance and Related Matters. CIMA shall maintain
the Approved Facility and shall conduct the Development Program and all
Manufacturing in compliance with all Laws, including but not limited to GMPs,
the Specifications, and any written instructions provided by Schering, at all
times during the Term of this Agreement. CIMA shall be responsible for all costs
and expenses related to the compliance of the Approved Facility with such Laws,
Specifications, and any written instructions provided by Schering. CIMA agrees
to manufacture the Licensed Product at the Approved Facility, and not to change
the location thereof without Schering's prior written consent,
-21-
which consent shall not be unreasonably withheld or delayed. In the event CIMA
gains access to a second manufacturing facility and Schering desires that CIMA
Manufacture Licensed Product at the second manufacturing facility as well as at
the Approved Facility, Schering will reimburse CIMA for all reasonable expenses
associated with establishing the second manufacturing facility to Manufacture
Licensed Product. The parties shall agree in advance in writing to the costs
reimbursable to CIMA under this Section.
5.2 Quality Control Program. CIMA shall maintain a quality control
program consistent with GMPs, as required by the applicable Regulatory
Authorities in the Territory. CIMA shall, within thirty (30) days of the date of
this Agreement, provide Schering with a written description of such program
establishing that it has met such GMPs, which may be amended or supplemented
from time to time; provided that CIMA gives Schering prompt written notice of
such amendments or supplements.
5.3 Approval for Manufacturing Changes; Third Party Manufacturing.
CIMA shall not make any changes in any materials, equipment or methods of
production or testing used in the Manufacture of the Licensed Product without
Schering's prior written consent, which consent shall not be unreasonably
withheld or delayed. CIMA shall notify Schering promptly in writing of any such
changes that may be required by GMPs or other applicable Laws in the Territory.
CIMA agrees not to contract with any third party to conduct any part or all of
the Manufacturing or testing of the Licensed Product without Schering's prior
written consent.
5.4 Retention of Samples. CIMA shall retain a sufficient quantity
of each batch of Licensed Product to perform at least two full sets of quality
control tests (which shall be in addition to the quality control testing
performed by CIMA prior to delivery). CIMA shall maintain samples of each batch
in a suitable storage facility until at least the first anniversary of the end
of the approved shelf life of all Licensed Product from such batch, or such
longer period as may be required under applicable Laws. 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.
5.5 Batch Failure. CIMA agrees to notify Schering within
seventy-two (72) hours of discovery after any batch failure which could result
in CIMA's inability to meet Schering's requested delivery dates, or of learning
of any failure of any batch of Licensed Product to meet Specifications. CIMA
shall notify Schering within seventy-two (72) hours after any failure of a
released batch during stability testing. CIMA shall provide Schering with an
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investigative report setting forth the reasons for the batch failure within
seven (7) days of such batch failure.
5.6 Notification of Regulatory Inspections. CIMA agrees to notify
Schering within forty-eight (48) hours after the initiation of any inquiries,
notifications, or inspection activity by any Regulatory Authority in regard to
the Licensed Product. In furtherance and not in limitation of the foregoing,
CIMA shall notify Schering prior to the commencement of any inspection activity
by any Regulatory Authority in regard to or potentially related to the Licensed
Product, unless such inspection activity is an unannounced inspection. Schering
shall have the right to be present at any such inspection, subject to such
limitations or restrictions as CIMA may reasonably require to maintain trade
secrets of CIMA or confidential information of its customers. Further, CIMA
shall provide a reasonable description to Schering of any such governmental
inquiries, notifications or inspections promptly (but in no event later than
five (5) calendar days) after such visit or inquiry. CIMA 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, 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 CIMA or confidential information of its customers prior
to the submission of such responses or explanations to any Regulatory Authority
by CIMA.
5.7 Inspection by Schering. Schering shall have the right, during
normal business hours and with reasonable advance notice, to visit the Approved
Facility for the purpose of observing the Manufacturing, testing, and storage of
the Licensed Product, and to inspect for compliance with Laws. CIMA's quality
assurance, environmental and other departments shall cooperate with Schering, as
necessary and useful, in any inspection conducted pursuant to this Section 5.7.
5.8 Environmental and Other Laws. Except as otherwise set forth in
this Section 5.8, in carrying out its obligations under this Agreement, CIMA
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. CIMA 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
Licensed Product that may give rise to liability on the part of CIMA under the
Laws or this Agreement. In the event Schering conducts an environmental
inspection of CIMA's facility for the purpose of determining compliance with
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environmental Laws, Schering shall share the results of any such environmental
inspection with the Laws and does not constitute a waiver of any right otherwise
available to Schering.
ARTICLE VI
PRODUCT RECALL
6.1 Notification and Recall. In the event that any Regulatory
Authority issues or requests a recall or takes similar action in connection with
the Licensed 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.
6.2 Recall Expenses.
(a) CIMA shall bear the expenses of any recall to the extent
it results from a breach of its obligations hereunder. Such obligation
shall only apply to Licensed Product Manufactured by CIMA that is not
in compliance with Specifications or written instructions of Schering.
Such expenses of recall shall include, without limitation and without
duplication, the expenses of notification and destruction or return of
the recalled Licensed Product, Schering's costs relating to the
testing, packaging, and shipping of the recalled Licensed Product, the
agreed upon cost to Schering for the Bulk Active, as set forth in
Section 6.2 (b) below, and the cost of Package Inserts supplied by
Schering and used in the Manufacture of the recalled Licensed Product.
In addition, CIMA shall within sixty (60) days replace any such
Licensed Product. If CIMA is unable to replace any such Licensed
Product within sixty (60) days (or at any time that CIMA fails to
deliver the replacement Licensed Product at an agreed upon date, as set
forth below), Schering shall have the right, at its sole discretion, to
extend the timeframe for delivery of replacement Licensed Product to a
mutually agreed upon date, or, in the alternative, to require CIMA to
reimburse Schering for all expenses of notification and destruction or
return of the recalled Licensed Product set forth above, as well as the
sum paid by Schering to CIMA for the Manufacture of the recalled
Licensed Product. Such reimbursement shall be made, if
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requested by Schering, within thirty (30) days of such notice. CIMA
shall not be liable for, and Schering hereby waives any right to, any
claim by Schering for consequential, incidental, special, or punitive
damages, including all claims for lost profits or lost opportunities
resulting from any such recall. The rights of Schering under this
Section 6.2 shall be in addition to, and not in lieu of, any other
rights not inconsistent with this Agreement that Schering may have
under this Agreement or at law.
(b) In order to avoid any issues or disputes regarding the
cost of Bulk Active, including but not limited to damages, the parties
agree that CIMA's sole obligation with respect to reimbursement to
Schering by CIMA for the cost of Bulk Active under this Agreement shall
be to pay Schering [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] per gram in order to partially compensate Schering for
its cost of Bulk Active. In such event, Schering shall provide CIMA
with replacement Bulk Active within a reasonable period of time, it
being understood that Schering and its Affiliates have a limited supply
of Bulk Active.
ARTICLE VII
APPROVAL SUPPORT; REGULATORY MATTERS
7.1 Approval Support. CIMA shall produce stability batches and
validation batches of the Licensed Product, engage in various development
activities and perform various tests as reasonably necessary to support
Schering's Health Registrations in the Territory, including without limitation,
being prepared for the pre-approval inspections by the Regulatory Authorities
and performing the other activities as set forth in Appendix C hereto.
7.2 Filing and Maintenance of the Health Registrations. Schering
shall be the sole owner of all Health Registrations. Schering shall have
responsibility for the preparation and filing of the Health Registrations,
including the CMC, with the applicable Regulatory Authorities. The Health
Registrations shall include a designation of CIMA and the Approved Facility as a
Manufacturer and Manufacturing site of the Licensed Product. Schering shall
provide CIMA with a copy of those sections of the CMC applicable to CIMA to the
extent necessary to facilitate its Manufacture of the Licensed Product in
accordance with this Agreement and the Health Registrations. In the event
Schering subsequently modifies any relevant Health Registration (or the CMC
related to the Manufacture of the Licensed Product), it shall notify CIMA of any
modifications that affect CIMA's obligations under this Agreement and provide it
with copies of applicable sections, or summaries of, such Health Registration
(or CMC) supplements or amendments.
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7.3 Regulatory Assistance for Maintaining Filings. CIMA shall
provide Schering with such information and assistance as Schering may reasonably
require for purposes of applying for and maintaining all relevant Health
Registrations for the Licensed Product including without limitation, providing
Schering with any or all reports, authorizations, certificates, methodologies,
specifications and other documentation in the possession or under the control of
CIMA relating to the Development Program and Manufacture of Licensed Product
that are reasonably necessary for Schering's filings. CIMA shall not provide
such information, data or other intellectual property rights, as they relate to
the Licensed Product, to any third party or use such information, data or other
intellectual property rights relating to the Licensed Product for any purpose
other than performing its obligations under this Agreement.
7.4 Specifications and Bulk Specifications; Amendments. Schering
reserves the right upon thirty (30) day's notice to amend and/or supplement the
Specifications and/or Bulk Specifications unilaterally for the purpose of
complying with GMPs or applicable Health Registrations, incorporating
Improvements, or for any other reasonable business purpose. Schering will
provide CIMA with prompt notice of changes in the Specifications and/or Bulk
Specifications required by Regulatory Authorities. Subject to agreement on the
respective responsibilities of the parties for equitable costs associated with
implementing any changes, CIMA shall implement any changes in the Specifications
and/or Bulk Specifications within a mutually agreed upon and reasonable time
frame. The costs of implementing changes in the Specifications and/or Bulk
Specifications shall be agreed by the parties in advance in writing. Without
limiting the foregoing, with respect to amendments of the Specifications and/or
Bulk Specifications required by Regulatory Authorities that are not specific to
the Licensed Product, such costs shall be allocated to Schering equitably and in
a manner generally consistent with other customers of CIMA.
7.5 Complaints or Adverse Experiences. CIMA agrees to notify
Schering by phone within twenty-four (24) hours (and in writing within
forty-eight (48) hours) of the receipt of any complaints and reports of adverse
drug events ("AEs") associated with the Manufacture of Licensed Product by CIMA.
With respect to complaints and reports of adverse drug events ("AEs")
associated with the Manufacture of Licensed Product by CIMA, Schering shall have
primary responsibility for fielding, investigating and responding to all
Licensed Product complaints and AEs. CIMA's quality assurance department shall
cooperate with Schering, as necessary and useful, to investigate such complaints
or AEs and to provide such information including without limitation, providing
Schering with the information and complying with the policy set forth on
Appendix I hereto, as amended from time to time by
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Schering, or assistance as is requested by Schering in order to support
Schering's compliance with AE's, field alert and other reporting requirements
imposed by the Regulatory Authorities. The parties shall exchange reports on the
resolution of complaints monthly, or more frequently if requested by Schering.
CIMA shall cooperate with Schering in investigating and responding to Licensed
Product complaints and CIMA shall assume all responsibility for investigating
and preparing initial responses to complaints or AEs which are determined to
result from the Manufacture of the Licensed Product by CIMA and shall provide
responses, which shall include any revisions of the initial responses, to
Schering for submission to the Regulatory Authority. CIMA shall report to
Schering on a monthly basis, or more frequently if requested by Schering, on all
actions that CIMA is taking, if necessary, to prevent future complaints of the
same type. In the event the parties' expenses to undertake the activities
described in this paragraph result in, or may result in, extraordinary costs of
investigation or testing (other than expenses associated with the resolution of
Manufacturing problems of CIMA), Schering and CIMA agree to negotiate whether to
incur, and how to allocate, such costs.
7.6 Record Keeping.
(a) Development Program and Manufacturing Records. CIMA
shall maintain all records necessary to comply with the Laws and in
accordance with the Health Regulations, including but not limited to
those relating to the Development Program and the Manufacturing of
Licensed Product. Without limitation, CIMA shall prepare and adhere to
batch process documentation consistent in accordance with Laws, its
normal procedures, and Section 7.6(b) below. 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,
stability and quality control of each batch of the Licensed Product
shall be retained at least until the first anniversary of the end of
the approved shelf life for all Licensed Product from such batch. Prior
to destruction of any record relating to the Licensed Product, CIMA
shall give notice to Schering, which shall have the right to request
delivery of such record to Schering at Schering's expense.
(b) Batch Documentation and Master Batch Record. Prior to
the Manufacture of any Licensed Product, CIMA shall prepare a form of
master batch record, which must be approved by Schering in writing
before any Manufacture of any Licensed Product.
Such documentation shall include, without limitation, copies of batch
records, a statement setting forth that the batch of Licensed Product was
Manufactured in compliance with GMP's, release information and
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recertification dates for all Active Ingredient and Raw Materials, batch
reconciliation and yield calculations, applicable variance reports, and such
other information as may be reasonably requested by Schering from time to time
("Batch Documentation"). An authorized employee in CIMA's Quality Assurance
department shall sign all Batch Documentation, and print his or her name, title
and contact information.
(c) Deliveries to Schering. All Batch Documentation, as
well as the Master Batch Record, relating to the Development Program
shall be sent to:
Schering-Plough Research Institute 2015 Galloping Hill
Road, K-11-2, J3 Kenilworth, New Jersey 07033 Attention:
Stanley Zweibel, Manager of Operations.
(d) All Batch Documentation, as well as the Master Batch
Record, relating to the commercial supply of Licensed Product in the
United State shall be sent to:
Schering Corporation 2000 Galloping Hill Road, K-2-1
Kenilworth, New Jersey 07033 Attention: Tom Jacobs,
Manager of Operations.
7.7 CIMA Approvals. Except as otherwise specifically set forth in
this Agreement, CIMA shall be responsible for obtaining and maintaining all
approvals, licenses and permits from the Regulatory Authorities and any other
governmental authorities required in connection with the performance of its
obligations hereunder.
ARTICLE VIII
SUPPLY OF BULK ACTIVE AND RAW MATERIALS
8.1 Schering Obligation. Schering shall supply to CIMA, at
Schering's sole expense, the Bulk Active and Package Inserts, or procure the
supply of the Bulk Active and Package Inserts for CIMA, at Schering's sole
expense, in quantities sufficient to Manufacture the Licensed Product for which
Schering has placed firm orders pursuant to Article IX hereof, subject to
Schering's ability to obtain a sufficient supply of the Bulk Active. Schering
will supply CIMA with the Bulk Active and Package Inserts no less than ninety
(90) days prior to the date of Manufacture. Schering shall notify CIMA in the
event that a shortage of the Bulk Active is likely to impact Schering's ability
to supply pursuant to this Section 8.1.
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8.2 CIMA Obligation. Other than Package Inserts, CIMA shall be
responsible for procuring the supply of all Raw Materials and Packaging
Components that comply with the Specifications as well as the specifications for
packaging as set forth on Appendix F, that are necessary for the Manufacture of
Licensed Product in accordance with this Agreement.
8.3 Acceptance of Bulk Active. Each delivery of Bulk Active to
CIMA will be accompanied by a certificate of analysis and CIMA shall not
incorporate any Bulk Active into the Manufacture of the Licensed Product that is
not accompanied by a certificate of analysis. Before incorporating any Bulk
Active into the Manufacture of the Licensed Product, CIMA shall conduct such
quality control inspection and testing as it deems necessary, which tests shall
include those tests set forth in the Bulk Specifications and/or written
instructions provided by Schering from time to time. CIMA shall promptly (and in
any event within twenty (20) business days of delivery of Bulk Active) notify
Schering of any defective Bulk Active which does not meet the Bulk
Specifications. Absent any such notification, CIMA shall be deemed to have
accepted the Bulk Active supplied by Schering as of the date of delivery.
8.4 Storage and Formulation of Bulk Active and Raw Materials;
Ownership of Bulk Active. CIMA shall store the Bulk Active and Raw Materials
used in the Manufacture of the Licensed Product under suitable conditions at the
Approved Facility, including those set forth on Appendix J, as amended from time
to time by Schering, at its reasonable discretion. The Bulk Active shall at all
times remain the property of Schering, and CIMA shall indemnify and hold
harmless Schering against any expenses, claims, demands or costs arising out of
any loss or damage to the Bulk Active after it has been delivered to CIMA, to
the extent that such losses or damages result from the negligent or intentional
acts of CIMA, its employees and/or agents, except for Yield Losses which the
parties agree are acceptable, as set forth below.
8.5 Yield Losses. CIMA shall use its commercially reasonable
efforts to minimize Yield Losses. The parties shall agree in writing upon the
Yield Loss of the Bulk Active that shall not be exceeded on an annual basis.
CIMA shall be responsible for excess Yield Loss. Periodically, but not less than
annually, CIMA shall provide Schering with a written accounting of the
disposition of each lot of Bulk Active provided by Schering, utilizing a format
mutually agreed upon by the parties.
ARTICLE IX
SUPPLY OF MANUFACTURED PRODUCT
9.1 Supply of Schering's Requirements. Subject to the terms and
conditions of this Agreement, including Schering's obligations to provide Bulk
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Active, CIMA shall Manufacture and supply to Schering, and Schering shall
purchase from CIMA, Schering's Requirements of Licensed Product.
9.2 Good Faith Forecasts. At the time of an NDA filing (or
Supplemental NDA filing), Schering shall provide CIMA with a written eighteen
(18) month forecast estimating Schering's monthly Requirements of the Licensed
Product, broken down to set forth Requirements by dosage strength (and the
desired delivery dates therefor). Thereafter, on or before the first day of each
calendar quarter during the Term hereof, Schering shall provide CIMA with an
updated written rolling forecast estimating Schering's monthly Requirements of
the Licensed Product (and the desired delivery dates therefor) for the
succeeding eighteen (18) month period. Such rolling forecasts shall include the
forecast from the previously forecasted fifteen (15) month period in addition to
a forecast for the new calendar quarter added. Such estimates shall be prepared
in good faith, but shall not be binding on Schering. Schering shall not be
responsible for any loss or expense incurred by CIMA arising from such
forecasts.
9.3 Purchase Orders. Schering shall issue to CIMA firm purchase
orders for each delivery, not later than three (3) months prior to the
forecasted delivery date, and provide CIMA with the Bulk Active no later than
ninety (90) days prior to the forecasted delivery date. The quantities ordered
shall not be less than seventy-five percent (75%) nor more than one hundred
twenty-five percent (125%) of the quantities set forth in the preceding
quarterly good faith forecast. Subject to the terms of this Agreement, Schering
shall be obligated to purchase, and CIMA shall be obligated to sell, such
quantities of the Licensed Product as are set forth in the purchase order, on
the delivery schedule set forth therein. 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 most recent good faith forecast, then CIMA shall make all
commercially reasonable efforts to modify its production schedule so as to
deliver such additional quantities of Licensed Product to Schering as soon as
practicable. CIMA shall promptly confirm receipt of the purchase order as well
as the delivery dates contained in the purchase order by written acknowledgment.
If CIMA provides Schering with written notice of issues relating to the delivery
schedule set forth in the purchase order, the parties agree to negotiate in good
faith to modify the delivery dates to reasonably accommodate CIMA's
manufacturing schedule and Schering's requested delivery schedule, provided that
nothing in this paragraph shall be interpreted to modify or eliminate the
parties' respective obligations to purchase or sell, as the case may be the
quantities of Licensed Product (not be less than seventy-five percent (75%) nor
more than one hundred twenty-five percent (125%)) set forth in the preceding
quarterly good faith forecast.
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9.4 Stoppage Due to Good Cause. Upon Schering's written notice,
CIMA shall stop a scheduled production run of the Licensed Product, provided
that such request is based upon good cause. Good cause is deemed to include
CIMA's failure to comply, or its inability to assure compliance with, any Laws,
including but not limited to any GMPs, the Specifications, or any written
instructions provided by Schering. Exercise by Schering of its rights under this
Section 9.4 shall not prejudice any other rights or remedies that Schering may
have at law or under this Agreement.
9.5 Schering Option to Manufacture.
(a) Option Notice. At any time on or after the third
anniversary of the First Commercial Sale of the Licensed Product in any
country, Schering, at its sole discretion, shall have the option to
assume all Manufacturing of the Licensed Product. Schering shall
provide CIMA with a minimum of six (6) months' prior written notice of
its exercise of such option (the "Option Notice"). CIMA shall provide
information concerning the process and personnel time for a technology
transfer. This will allow the parties to address the issue of payment,
if any, for personnel time of CIMA relating to the transfer.
(b) Protocol. Following CIMA's receipt of the Option Notice,
the parties shall establish a mutually acceptable protocol for transfer
of the CIMA Know-How necessary to enable Schering to assume
responsibility for the Manufacture of the Licensed Product. This shall
include, among other things, the identification of all machinery
necessary to Manufacture the Licensed Product, the time necessary for
the machinery to be delivered, installed and validated, the training
necessary to Manufacture the Licensed Product, the estimated transfer
period for the CIMA Know-How ("Transfer Period") and the criteria for
determining when the CIMA Know-How has been successfully transferred
(the "Protocol"). Both parties shall diligently follow the Protocol,
and advise the other party in a timely manner of any difficulties
encountered. The Protocol shall be modified only in writing, and the
parties agree to modify the Protocol as necessary to accomplish the
transfer of the CIMA Know-How. During the Transfer Period and
throughout the Term of this Agreement, CIMA shall provide such
reasonable assistance to Schering as is necessary for Schering to
Manufacture the Licensed Product.
(c) Technical Liaison. CIMA and Schering shall each
designate one (1) senior employee as technical liaison to handle all
technical matters and communications relating to the transfer and
implementation of Manufacturing technology during the Transfer Period.
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(d) Transfer Payments. In the event of Schering's exercise
of its option under this Section 9.5, Schering shall pay CIMA the
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***] fee set forth in
Section 3.1. The payment of the [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] fee shall be made as follows:
[***CONFIDENTIAL TREATMENT Within thirty (30) days
REQUESTED, PORTION OMITTED after Schering's delivery of
FILED SEPARATELY WITH THE the Option Notice
SECURITIES AND EXCHANGE
COMMISSION.***]
[***CONFIDENTIAL TREATMENT Within thirty (30) days
REQUESTED, PORTION OMITTED after establishment of the
FILED SEPARATELY WITH THE Protocol
SECURITIES AND EXCHANGE
COMMISSION.***]
[***CONFIDENTIAL TREATMENT Within thirty (30) days of
REQUESTED, PORTION Schering completing three
OMITTED FILED SEPARATELY full-size validation
WITH THE SECURITIES batches for each Licensed
AND EXCHANGE Product that comply with all
COMMISSION.***] Laws
Schering's royalty obligation set forth in Section 3.2 shall
continue in accordance with the terms of this Agreement and payment of
the payments set forth in this Section 9.5 shall not impact Schering's
obligation to pay such royalties.
(e) Except for direct personnel costs and reasonable out of
pocket costs incurred by CIMA in connection with its obligations under
this Section 9.5 and agreed upon in writing in advance of the Transfer
Period by the parties, Schering shall not be responsible for any costs
incurred by CIMA relating to the Transfer Period. CIMA shall comply
with Schering's guidelines for reimbursement of expenses set forth on
Appendix K.
(f) After the Transfer Period has been completed,
notwithstanding anything else to the contrary contained in this
Agreement, Schering may, without any additional payments to CIMA,
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subcontract Manufacture of the Licensed Product to a third party at any
time, including but not limited to Affiliates of Schering, and provide
a limited nontransferable license to any such third party to the CIMA
Know-How, solely to fulfill its Manufacturing obligations to Schering.
(g) Nothing in this Section 9.5 shall be interpreted to
provide Schering with any rights to utilize the CIMA Know-How other
than for those license rights set forth in Section 2.1, or to amend the
parties' confidentiality obligations set forth in Article XII.
ARTICLE X
DELIVERY AND RELATED MATTERS
10.1 Certificate of Analysis. CIMA shall provide Schering with each
shipment of Licensed Product a certificate from CIMA's quality assurance
department that includes the results of quality control testing in accordance
with the Specifications and which indicates that the Licensed Product contained
in the shipment meets the specifications set forth in the Specifications.
10.2 Risk of Loss. Delivery of each shipment of the Licensed
Product shall be made EXW. CIMA shall arrange for transportation of the Licensed
Product to a destination designated by Schering and by a common carrier
designated by Schering.
CIMA shall clear the shipment for export and obtain, at its own risk
and expense, any export license or other official authorization and carry out,
where applicable, all customs formalities necessary for the export of the
Product. Schering shall obtain, at its own risk and expense, any import license
or other official authorization required and carry out, where applicable, all
customs formalities for the import of the Product. Title to and risk of loss of
the Licensed Product shall pass to Schering at the time of delivery to the
carrier. CIMA shall promptly invoice Schering for all Licensed Product shipped.
10.3 Storage. CIMA, at its own expense, for a period not to exceed
fifteen (15) days, shall maintain adequate and reasonably segregated facilities
for storage of the Licensed Product pending delivery to the designated carrier
pursuant to Section 10.2 hereof.
10.4 Delay and Failure to Supply.
(a) In the event that CIMA shall have reason to believe that
it will be unable to supply Schering with the full quantity of the
Licensed Product forecasted to be ordered or actually ordered by
Schering in a timely manner, CIMA shall promptly (and in any event
within thirty (30)
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business days) notify Schering thereof. If CIMA shall so notify
Schering, or if CIMA 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 CIMA shall promptly meet to discuss how to thereafter
supply Schering's Requirements in a timely manner.
(b) In the event of a Supply Failure, CIMA shall exercise
diligent efforts to resume production as quickly as possible and shall
notify Schering in writing upon resumption of production, whereupon it
shall supply Schering with such modified requirements for the Licensed
Product as Schering may have for the remaining Term of this Agreement.
(c) Notwithstanding the foregoing, the parties agree that
a Supply Failure shall be a material breach of this Agreement.
10.5 Rejection. Schering shall promptly (and in any event within
forty-five (45) days after delivery) notify CIMA of any Licensed Product which
did not, at the time of delivery to the carrier designated by Schering, comply
with the covenants in Section 13.3(a). If Schering claims that any shipment of
Licensed Product did not, at the time of delivery to the carrier designated by
Schering, meet the representations and warranties in Section 13.2, or covenants
set forth in Sections 13.3 (and in any event within forty-five (45) days after
discovery), Schering shall promptly notify CIMA. If CIMA agrees with Schering's
claim, CIMA at its option shall either replace such Licensed Product or
reimburse Schering for any payment Schering may have made to CIMA for such
Licensed Product and for any out-of-pocket expense Schering may have incurred
with respect thereto prior to its discovery of the defect, including without
limitation shipping, insurance and taxes. In either case, CIMA shall reimburse
or credit Schering (as Schering shall elect), at the agreed upon cost to
Schering, for the Bulk Active as set forth in Section 6.2(b), destruction costs,
and the cost of Package Inserts, used in the non-conforming Licensed Product. If
Schering and CIMA are unable to agree as to whether such Licensed Product met
the warranties or whether CIMA complied with the covenants, the parties shall
cooperate to have the Licensed Product in dispute analyzed by an independent
testing laboratory of recognized repute jointly selected by Schering and CIMA.
If the Licensed Product is determined to meet the Specifications, then Schering
shall bear the cost of the independent laboratory testing and pay for the
Licensed Product in accordance with this Agreement. If the Licensed Product is
determined not to have met the Specifications at time of delivery, then CIMA
shall bear the cost of the independent laboratory testing. In addition, CIMA
shall either replace the rejected Licensed Product 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 Licensed Product plus any
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applicable delivery charges, including, without limitation, shipping, insurance
and taxes, within sixty (60) days after written notice from Schering. If CIMA is
unable to replace any such Licensed Product within sixty (60) days (or at any
time that CIMA fails to deliver the replacement Licensed Product at an agreed
upon date, as set forth below), Schering shall have the right, at its sole
discretion, to extend the timeframe for delivery of replacement Licensed Product
to a mutually agreed upon date, or, in the alternative, to require CIMA to
reimburse Schering for the price paid for such Licensed Product plus
out-of-pocket expense Schering may have incurred. Such reimbursement shall be
made, if requested by Schering, within thirty (30) days of such notice. In
either case, CIMA shall reimburse or credit Schering (as Schering shall elect),
at the agreed upon cost to Schering, for the Bulk Active (as set forth in
Section 6.2(b)) and Package Inserts used in the non-conforming Licensed Product,
as well as destruction costs. Such laboratory costs, refund, credit or
replacement shall constitute CIMA's sole and exclusive liability for claims
under this Section 10.5.
ARTICLE XI
PAYMENT
11.1 Price. The Price to be paid by Schering to CIMA for the
Licensed Product for commercial supply of the Licensed Product shall be as set
forth on Appendix G hereto, as adjusted pursuant to this Article XI, and shall
be made in United States dollars within thirty (30) days from date of invoice
therefor.
11.2 Price Adjustment.
(a) The Price shall be effective from the first date that
CIMA Manufactures Licensed Product pursuant to Article IX
("Manufacturing Date") and shall be effective through December 31,
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. Thereafter, subject
to Section 11.2 (c) hereof, the Price shall be subject to an annual
review, initiated by CIMA as set forth below. Such annual review shall
take into account any increase or decrease in CIMA's costs of labor,
raw materials and/or components directly allocable to the Manufacture
of the Licensed Product ("Raw Materials"), and Overhead, with all such
allocable costs being calculated in an equitable manner, in accordance
with CIMA's accounting principles and reasonably acceptable to Schering
at the time of execution of this Agreement, consistent with generally
accepted accounting principles, and on the same basis and utilizing the
same criteria as for other pharmaceutical products of CIMA that are
subject to similar pricing adjustments.
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CIMA shall determine the amount of any increase or decrease by
no later than the following February 28, and CIMA shall notify Schering
of such amount in writing at that time. If Schering disagrees with the
price adjustment, Schering shall notify CIMA in writing on or before
March 31, and the parties shall discuss and resolve any issues relating
to the price adjustment. Licensed Product delivered to Schering between
January 1 and February 28 each year, and during any time period that
the parties are resolving issues relating to the price adjustment,
shall be invoiced to Schering at the price applicable to Licensed
Product delivered to Schering during the immediately preceding calendar
year. Then on or about February 28 of each year, or within thirty (30)
days following the parties' resolution of issues relating to the price
adjustment, CIMA shall transmit to Schering a corrected invoice for
Licensed Product delivered between January 1 and February 28 of each
year, and during any time period that the parties were resolving issues
relating to the price adjustment, taking into account the final amount
of any such price increase or decrease, and setting forth the
applicable additional charges or credits.
(b) Without limiting the foregoing, the parties hereto
acknowledge that significant cost reductions may be available to CIMA
through improvements in the technology for Manufacturing the Licensed
Product, through negotiated changes in applicable regulatory standards
or specifications with Regulatory Authorities or otherwise. In the
event that any cost reductions are realized, then the parties shall
agree on a mechanism by which the benefits of such cost reductions are
equitably allocated to the parties, taking account of their relative
contributions to the cost reduction. Further, CIMA agrees to use
commercially reasonable efforts to obtain competitive prices for Raw
Materials, materials used in the manufacture of Packaging Components,
and services from any qualified third party vendor.
(c) If, within thirty (30) days following CIMA's receipt of
Schering's notice that Schering disagrees with the suggested price
adjustment, the parties are unable to reach agreement on a Price
adjustment, Schering shall appoint an Independent Auditor, who shall be
reasonably acceptable to CIMA, to determine the adjusted Price. The
Independent Auditor's determination of the adjusted Price shall reflect
any net increase or decrease in CIMA's costs of labor, Raw Materials,
and Overhead. CIMA shall promptly make its cost documentation available
on a confidential basis to the Independent Auditor, and both parties
shall submit in writing to the Independent Auditor a proposed adjusted
Price. The parties agree that the determination by the Independent
Auditor of the adjusted Price shall be final and binding, subject to
Section 11.3
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hereof. The fees and disbursements of the Independent Auditor shall be
borne by the party whose proposed adjusted Price differs most from the
adjusted Price as determined by the Independent Auditor.
11.3 Maximum Price Increase. Any increase or decrease in the costs
of Raw Materials, as such term is defined in Section 11.2, shall be passed
directly on to Schering by CIMA, and Schering shall be responsible for the
entire increase in such costs, subject to Schering's audit and other rights set
forth in Section 11.2(c), or, alternatively, Schering shall receive the entire
benefit from any decrease in such costs. In no event shall the weighted average
percentage of increased costs attributable to CIMA's Overhead and labor costs
combined, stated as a percentage of the then-current Price, exceed the lesser of
either (i) the increase, if any, in the national Producer's Price Index, as
reported in the Wall Street Journal, for the calendar year immediately preceding
the proposed price increase; or (ii) [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***].
11.4 Taxes. Schering shall pay any applicable taxes or duties
relating to Bulk Active. CIMA and Schering agree to cooperate in order to
minimize, in the manner permitted under applicable tax and customs Laws, the
taxes (including value-added taxes) and duties associated with the importation
and/or exportation of the Bulk Active and the Licensed Product, as the case may
be.
ARTICLE XII
CONFIDENTIALITY AND PUBLICATION
12.1 Confidentiality.
(a) Nondisclosure Obligation. Each of CIMA and Schering
shall use only in accordance with this Agreement and shall not disclose
to any third party any Proprietary Information received by it from the
other party, without the prior written consent of the other 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:
(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;
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(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 Proprietary Information or other information received from
the disclosing party and such independent development can be
documented by the receiving party;
(v) is disclosed to any institutional review board of
any entity conducting clinical trials or any governmental or
other regulatory agencies in order to obtain patents or to
gain approval to conduct clinical trials or to market Active
Ingredient and/or Licensed Product, but such disclosure may be
made only to the extent reasonably necessary to obtain such
patents or authorizations; or
(vi) is required by Law, 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 Proprietary Information and
thereafter the disclosing party discloses to the requesting
entity only the minimum Proprietary 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.
(b) Disclosure to Agents. Notwithstanding the provisions of
Section 12.1(a) and subject to the other terms of this Agreement,
Schering shall have the right to disclose CIMA Proprietary Information
to Schering's sublicensees, agents, consultants, Affiliates or other
third parties (collectively "Agents") in accordance with this Section
12.1(b). Such disclosure shall be limited only to those Agents directly
involved in the research, development, manufacturing, marketing or
promotion of Licensed Product(s) (or for such Agents to determine their
interest in performing such activities) in accordance with this
Agreement. Any such Agents must agree in writing to be bound by
confidentiality and non-use obligations essentially the same as those
contained in this Agreement. The term of confidentiality and non-use
obligations for such Agents shall be no less than ten (10) years
following the termination or expiration of this Agreement. Schering
shall be responsible for any breach of this confidentiality provision
by its agents.
(c) Disclosure to a Third Party. Notwithstanding anything
herein to the contrary, CIMA shall not disclose, provide or transfer to
any
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third party without the prior written approval of Schering (i) any
Schering Know-How, or (ii) any CIMA Know-How relating to the
combination of the OraSolv Technology and Active Ingredient.
12.2 No Publicity. A party may not use the name of the other party
in any publicity or advertising and, except as provided in Section 12.1, may not
issue a press release or otherwise publicize or disclose any information related
to the existence of this Agreement or the terms or conditions hereof, without
the prior written consent of the other party. The parties shall agree on a form
and timing of the initial press release that may be used by either party to
describe this Agreement. Nothing in the foregoing, however, shall prohibit a
party from making such disclosures to the extent deemed necessary under
applicable federal or state securities laws or any rule or regulation of any
nationally recognized securities exchange including, without limitation, NASDAQ.
In such event, however, the disclosing party 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.
12.3 Publication. Schering and CIMA each acknowledge the potential
benefit in publishing results of certain studies to obtain recognition within
the scientific community and to advance the state of scientific knowledge. Each
party also recognizes the mutual interest in obtaining valid patent protection
and in protecting business interests and trade secret information. No
publication of a party's Proprietary Information may be made by the other party
without the prior written consent of such party. The parties agree that
Schering, its Affiliates, employees or consultants shall be free to make any
publication which does not disclose CIMA's Proprietary Information, and CIMA
shall be free to make any publication which does not (i) disclose Schering's
Proprietary Information; or (ii) substantially relate to the Licensed Product or
the Active Ingredient. In the event that any proposed publication (as defined
below) discloses Proprietary Information, the following procedure shall apply:
either party, its Affiliates, employees or consultants wishing to make a
publication shall deliver to the other party a copy of the proposed written
publication or an outline of an oral disclosure at least sixty (60) days prior
to submission for publication or presentation. For purposes of this Agreement,
the term "publication" shall include, without limitation, abstracts and
manuscripts for publication, slides and texts of oral or other public
presentations, and texts of any transmission through any electronic media, e.g.
any computer access system such as the Internet or World Wide Web. The reviewing
party shall have the right (i) to propose modifications to the publication for
patent reasons, trade secret reasons or business reasons or (ii) to request
delay of the publication or presentation in order to protect patentable
information. If the reviewing party requests a delay, the publishing party shall
delay submission or presentation for a period not less than eighteen
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(18) months from the filing date of the first patent application covering the
information contained in the proposed publication or presentation. If the
reviewing party requests modifications to the publication, the publishing party
shall edit such publication to prevent disclosure of trade secret or proprietary
business information prior to submission of the publication or presentation.
12.4 Oral Disclosure of Propriety Information. When Propriety
Information is disclosed in a manner other than in writing, it shall be reduced
to written form, marked "Confidential" and transmitted to the receiving party
within twenty (20) business days of disclosure to the receiving party.
ARTICLE XIII
REPRESENTATIONS AND WARRANTIES
13.1 Representations and Warranties of Each Party. Each of CIMA and
Schering hereby represents and warrants 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;
(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 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;
(e) except for the Health Registrations required to market
the Licensed Product in the Territory, the execution, delivery and
performance of this Agreement by such party does not require the
consent, approval or authorization of, or notice, declaration, filing
or registration with, any governmental or regulatory authority and the
execution, delivery or performance of this Agreement will not violate
any Law applicable to such party; and
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(f) this Agreement has been duly authorized, 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.
13.2 CIMA's Representations and Warranties. CIMA hereby represents
and warrants to Schering as follows:
(a) the Licensed Patent Rights are subsisting and are not
invalid or unenforceable, in whole or in part, in countries set forth
on Appendix L, and, to the best knowledge of CIMA, are subsisting and
are not invalid or unenforceable, in whole or in part, in any other
country;
(b) it has the full right, power and authority to grant all
of the right, title and interest in the licenses granted under Article
II hereof;
(c) In the countries set forth on Appendix L, and, to the
best knowledge of CIMA, in countries other than countries set forth on
Appendix L, it is the sole and exclusive owner of the Licensed Patent
Rights, all of which are free and clear of any liens, charges and
encumbrances, other than license rights granted to other parties which
are not inconsistent with the license rights granted hereunder, and no
other person, corporate or other private entity, or governmental entity
or subdivision thereof, has or shall have any claim of ownership with
respect to the Licensed Patent Rights or CIMA Know-How, whatsoever;
(d) To the best of its knowledge, it is the sole and
exclusive owner of the CIMA Know-How, all of which is free and clear of
any liens, charges and encumbrances, other than license rights granted
to other parties which are not inconsistent with the license rights
granted hereunder, and no other person, corporate or other private
entity, or governmental entity or subdivision thereof, has or shall
have any claim of ownership or use of the CIMA Know-How which in any
manner interferes with or will interfere with the ability of Schering
to practice the Licensed Patent Rights;
(e) it has not assigned, transferred, conveyed or otherwise
encumbered, and during the Term of this Agreement will not assign,
transfer, convey or otherwise encumber, its right, title and interest
in the Licensed Patent Rights in any manner that interferes with or
will interfere with the ability of Schering to practice the Licensed
Patent Rights;
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(f) it has not assigned, transferred, conveyed or otherwise
encumbered, and during the Term of this Agreement will not assign,
transfer, convey or otherwise encumber, its right, title and interest
in the CIMA Know-How in any manner that interferes with or will
interfere with the ability of Schering to practice the Licensed Patent
Rights;
(g) to the best of its knowledge, as of the date hereof, the
Licensed Patent Rights and CIMA Know-How, and the development,
manufacture, use, distribution, marketing, promotion and sale of
Licensed Product, do not interfere or infringe on any intellectual
property rights owned or possessed by any third party;
(h) to the best of its knowledge, as of the date hereof,
there are no third party pending patent applications which, if issued,
may cover the use of the OraSolv Technology in connection with
development, manufacture, use or sale of Licensed Product;
(i) to the best of its knowledge, as of the date hereof,
there are no claims, judgments or settlements against or owed by CIMA,
or pending or threatened claims or litigation, relating to the Licensed
Patent Rights or CIMA Know-How;
(j) as of the date hereof, it has no knowledge of any
circumstances that would materially and adversely affect the commercial
utility of the Licensed Product and/or the use of the OraSolv
Technology in combination with Active Ingredient, or that would render
Schering liable to a third party for patent infringement as a
consequence of Schering's sale of Licensed Product;
(k) there are no collaborative, licensing, material
transfer, supply, distributorship or marketing agreements or
arrangements or other similar agreements to which it or any of its
Affiliates are party relating to the combination of the OraSolv
Technology and Active Ingredient, nor has it granted any rights to any
third party with respect to such combination; and
(l) as of the date hereof, it is in compliance in all
material respects with any agreements with third parties which provide
for intellectual property rights applicable to the development,
manufacture, use or sale of the OraSolv Technology.
13.3 CIMA Covenants. CIMA hereby agrees as follows:
(a) at the time of delivery of the Licensed Product to the
designated carrier pursuant to this Agreement, the Licensed Product
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shall (i) have been Manufactured, stored and shipped in accordance with
applicable Laws in the Territory; (ii) have been Manufactured in
accordance with the Specifications, any written instructions provided
by Schering, and the CMC; (iii) not be adulterated or misbranded under
the FDCA or the Laws; and (iv) be in good and usable condition;
(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 Licensed Product delivered to the
designated carrier pursuant to this Agreement;
(c) it and/or its Affiliates shall neither use nor seek to
register any trademarks which are confusingly similar to any Schering
Trademark, or any other trademarks, trade names, trade dress or logos
used in connection with the Licensed Product;
(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 [sec]306 of the FDCA, or if any
action, suit, claim, investigation, or legal or administrative
proceeding is pending or, to the best of CIMA's knowledge, is
threatened, relating to the debarment or conviction of CIMA or any
person performing services hereunder; and
(e) during the Term of this Agreement, it will use best
efforts not to diminish the rights under the Licensed Patent Rights and
CIMA Know-How licensed to Schering hereunder, including, without
limitation, by not committing or permitting any actions or omissions
which would cause the breach of any agreements between itself and third
parties which provide for intellectual property rights applicable to
the development, manufacture, use or sale of the OraSolv Technology in
connection with the Licensed Product(s) and that it will provide
Schering promptly with notice of any such alleged breach.
13.4 Schering's Representations and Warranties. Schering hereby
represents and warrants to CIMA as follows:
(a) to the best of its knowledge, it is the sole and
exclusive owner and/or licensee of all rights to Active Ingredient
which is free and clear of any liens, charges and encumbrances, and no
other person, corporate or other private entity, or governmental entity
or subdivision thereof, has or shall have any claim of ownership with
respect to Active Ingredient, whatsoever;
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(b) to the best of its knowledge, Active Ingredient and the
development, manufacture, use, distribution, marketing, promotion and
sale of Active Ingredient does not interfere or infringe on any
intellectual property rights owned or possessed by any third party;
(c) there are no claims, judgments or settlements against or
owed by Schering or pending or threatened claims or litigation relating
to Active Ingredient; and
(d) it will launch the Licensed Product within a
commercially reasonable period of time after approval of all Health
Registrations necessary to sell the Licensed Product in the Territory.
13.5 Schering Covenants. Schering hereby agrees that it will use
diligent efforts for obtaining and maintaining all Health Registrations
necessary to sell the Licensed Product in the Territory and launch the Licensed
Product within a commercially reasonable period of time after approval of all
Health Registrations necessary to sell the Licensed Product in the Territory.
13.6 Covenants of Each Party. Each of the parties hereby agrees as
follows:
(a) it shall comply with all applicable Laws relating to its
activities under this Agreement; and
(b) during the Term of this Agreement it will not use in any
capacity, in connection with any services to be performed under this
Agreement, any individual who has been debarred pursuant to the FDCA or
been excluded from participating in a federal health care program,
including, without limitation, the Medicare or Medicaid programs.
13.7 Continuing Representations. The representations and warranties
of each party contained in Sections 13.1, 13.2 and 13.4 shall survive the
execution of this Agreement and shall remain true and correct after the date
hereof with the same effect as if made as of the date hereof.
13.8 No Inconsistent Agreements. Neither party has in effect and
after the Effective Date neither party shall enter into any oral or written
agreement or arrangement that would be inconsistent with its obligations under
this Agreement.
13.9 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
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parties agree that no presumption shall exist or be implied against the party
which drafted such terms and provisions.
ARTICLE XIV
INDEMNIFICATION AND LIMITATION ON LIABILITY
14.1 Indemnification by Schering. Schering shall indemnify, defend
and hold harmless CIMA and its Affiliates, and each of its and their respective
employees, officers, directors and agents (each, a "CIMA Indemnified Party")
from and against any and all liability, loss, damage, cost, and expense
(including reasonable attorneys' fees) (collectively, a "Liability"), subject to
the limitations in Section 14.5 which the CIMA Indemnified Party may incur,
suffer or be required to pay resulting from or arising out of (i) Schering's
negligent acts and/or omissions related to the marketing, distribution and sale
of the Active Ingredient or Licensed Product, (ii) the sale or use of the
Licensed Product, except to the extent that such liability is attributable to
the CIMA Know-How and/or the Licensed Patent Rights, or (iii) any breach of
Schering's covenants, representations and warranties hereunder by Schering, its
Affiliates or sublicensees. Notwithstanding the foregoing, Schering shall have
no obligation under this Agreement to indemnify, defend or hold harmless any
CIMA Indemnified Party with respect to claims, demands, costs or judgments which
result from willful misconduct or negligent acts or omissions of CIMA, its
Affiliates, or any of their respective employees, officers, directors or agents.
14.2 Indemnification by CIMA. CIMA shall indemnify, defend and hold
harmless Schering and its Affiliates, and each of its and their respective
employees, officers, directors and agents (each, a "Schering Indemnified Party")
from and against any Liability, subject to the limitations in Section 14.5,
which the Schering Indemnified Party may incur, suffer or be required to pay
resulting from or arising in connection with (i) Schering's use of the CIMA
Know-How and/or the Licensed Patent Rights (subject to Schering's rights under
Section 4.5) (ii) negligent acts and/or omissions by CIMA and/or its Affiliates
related to the development or Manufacture of Licensed Product by CIMA or the
failure of Licensed Product Manufactured by CIMA to meet the Specifications set
forth in Appendix H hereto, or (iii) any breach of CIMA's covenants,
representations and warranties hereunder. Notwithstanding the foregoing, CIMA
shall have no obligation under this Agreement to indemnify, defend or hold
harmless any Schering Indemnified Party with respect to claims, demands, costs
or judgments which result from willful misconduct or negligent acts or omissions
of Schering, its Affiliates, or any of their respective employees, officers,
directors or agents.
14.3 Conditions to Indemnification. The obligations of the
indemnifying party under Sections 14.1 and 14.2 are conditioned upon the
delivery of
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written notice to the indemnifying party of any potential Liability promptly
after the indemnified party becomes aware of such potential Liability; provided,
however, that any delay on the part of a party to provide notice to the
indemnifying party shall not relieve the indemnifying party of its obligation to
indemnify unless the indemnifying party has been materially prejudiced by such
delay. The indemnifying party shall have the right to assume the defense of any
suit or claim related to the Liability if it has assumed responsibility for the
suit or claim in writing; however, if in the reasonable judgment of the
indemnified party, such suit or claim involves an issue or matter which could
have a materially adverse effect on the business operations or assets of the
indemnified party, the indemnified party may waive its rights to indemnity under
this Agreement and control the defense or settlement thereof, but in no event
shall any such waiver be construed as a waiver of any indemnification rights
such party may have at law or in equity. 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.
14.4 Settlements. Neither party may settle a claim or action
related to a Liability without the consent of the other party, if such
settlement would impose any monetary obligation on the other party or require
the other party to submit to an injunction or otherwise limit the other party's
rights under this Agreement. Any payment made by a party to settle any such
claim or action shall be at its own cost and expense.
14.5 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.
14.6 Insurance. Each party acknowledges and agrees that during the
Term of this Agreement it shall maintain adequate insurance and/or a
self-insurance program for liability insurance, including products liability and
contractual liability insurance, to cover such party's obligations under this
Agreement. Each party shall provide the other party with evidence of such
insurance and/or self-insurance program, upon request.
ARTICLE XV
TERM AND TERMINATION
15.1 Term and Expiration. This Agreement shall be effective as of
the Effective Date and unless terminated earlier by mutual written agreement of
the parties or pursuant to Sections 15.2 or 15.3 below, the Term of this
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Agreement shall continue in effect in each country in the Territory until the
later of (i) ten (10) years after the First Commercial Sale of the Licensed
Product in each such country or (ii) expiration of the last to expire Licensed
Patent Right incorporating a Valid Claim in each such country. Upon expiration
of this Agreement due to expiration of the last to expire Licensed Patent Right
incorporating a Valid Claim, Schering's licenses pursuant to Section 2.1 and 2.2
shall become fully paid-up, perpetual licenses, provided, however, that CIMA's
exclusive right to Manufacture shall continue unless Schering has exercised its
option to Manufacture under Section 9.5 of this Agreement.
15.2 Termination by Schering.
(a) Notwithstanding anything contained herein to the
contrary, Schering shall have the unilateral right to terminate this
Agreement, without cause, at any time by giving ninety (90) days
advance written notice to CIMA, or one hundred and eighty (180) days
advance written notice at any time after the first good faith forecast
provided by Schering pursuant to Section 9.2. In the event of the
exercise by Schering of such termination rights, the rights and
obligations hereunder, including any payment obligations not due and
owing as of the termination date shall terminate and all rights to
Licensed Patent Rights and CIMA Know-How shall revert to CIMA.
(b) In the event the ownership or control of CIMA is to be
acquired by a pharmaceutical company, CIMA shall promptly notify
Schering in writing to that effect, and to the extent practicable and
within CIMA's control, it shall provide such notice not less than sixty
(60) days prior to such transfer of control. For the avoidance of
doubt, CIMA shall have the obligation to disclose to any such
pharmaceutical company that it is obligated to provide the notice set
forth in this Section, and CIMA shall not provide, in any such
agreement with a pharmaceutical company, that such notice will be
delayed or omitted. Schering shall have the unilateral right, but not
the obligation, by giving sixty (60) days' advance written notice to
CIMA to terminate this Agreement following receipt of such notice. Such
right shall terminate one hundred and twenty (120) days following
Schering's receipt of notice of such transfer of control. CIMA shall
use best efforts to ensure that such acquiring party does not have any
access to any of Schering's Proprietary Information. For purposes of
this section, control shall mean the ability to control the management
decisions of CIMA, and the direct or indirect acquisition of thirty
percent (30%) or more of CIMA's stock shall be deemed control.
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15.3 Termination.
(a) Termination for Cause. This Agreement may be terminated
by written notice by either party at any time during the Term of this
Agreement:
(i) subject to Section 16.2, if the other party is in
breach of its material obligations hereunder and has not cured
such breach within ninety (90) days after notice requesting
cure of the breach with reasonable detail of the particulars
of the alleged breach or initiated actions reasonably expected
to cure the cited failure within ninety (90) days of receiving
notice and thereafter diligently pursued such actions to cure
the failure (even if requiring longer than the ninety (90)
days set forth in this subsection); or
(ii) upon the filing or institution of bankruptcy,
reorganization, liquidation or receivership proceedings, or
upon an assignment of a substantial portion of the assets for
the benefit of creditors by the other party, or in the event a
receiver or custodian is appointed for such party's business,
or if a substantial portion of such party's business is
subject to attachment or similar process; provided, however,
that in the case of any involuntary bankruptcy proceeding such
right to terminate shall only become effective if the
proceeding is not dismissed within sixty (60) days after the
filing thereof.
(b) Effect of Termination for Cause on License.
(i) Termination by Schering under Section 15.3(a)(i).
In the event Schering terminates this Agreement under Section
15.3(a)(i) Schering's licenses pursuant to Sections 2.1 and
2.2 shall continue so long as Schering is not in default of
its payment obligations hereunder (including royalty
payments), subject to such offset as may be awarded to
Schering as damages for CIMA's breach of this Agreement in
accordance with the dispute resolution provisions set forth in
Section 16.2. Notwithstanding the foregoing, nothing in this
Section shall be interpreted to eliminate or restrict any
rights Schering has or may have relating to a default by CIMA
under applicable Laws.
(ii) Other Terminations. In the event of a termination
of this Agreement for any reason other than by Schering under
Section 15.3(a)(i), then the rights and licenses granted to
Schering under Sections 2.1 and 2.2 of this Agreement shall
terminate and
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all rights to Licensed Patent Rights and CIMA Know-How shall
revert to CIMA.
(iii) Effect of Bankruptcy. In the event Schering
terminates this Agreement under Section 15.3(a)(ii) or this
Agreement is otherwise terminated under Section 15.3(a)(ii),
the parties agree that Schering, as a licensee of rights to
intellectual property under this Agreement, shall retain and
may fully exercise all of its rights and elections under Title
11, including as set forth in Section 16.8 hereof.
(iv) Return of Bulk Active and Proprietary Information.
Upon termination or expiration of this Agreement for any
reason, or at Schering's request at any time during this
Agreement, CIMA shall promptly deliver to Schering all unused
Bulk Active and Licensed Product, all documentation and all
copies thereof in whatever form or media in its possession or
control relating to Bulk Specifications, CMCs, Specifications,
Schering Know-How and all other Proprietary Information of
Schering and any and all other documents and materials (and
all copies thereof) in its possession or control containing
any Proprietary Information of Schering.
15.4 Effect of Termination. Expiration or termination of the
Agreement shall not relieve the parties of any obligation accruing prior to such
expiration or termination, and the provisions of Articles XII and XIV shall
survive the expiration of the 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,
including the obligation to pay royalties for Licensed Product(s) sold prior to
such termination. Schering shall have the right to continue to sell its existing
inventory of Licensed Product(s) and, if this Agreement is terminated by
Schering pursuant to Section 15.3(a)(i), Schering's other payment obligations
shall survive, including royalties to CIMA, on sales of Licensed Product(s) in
accordance with this Agreement, subject to such offset as may be awarded to
Schering as damages for CIMA's breach of this Agreement in accordance with the
dispute resolution provisions set forth in Section 16.2. Notwithstanding the
foregoing, nothing in this Section shall be interpreted to eliminate or restrict
any rights Schering has or may have relating to a default by CIMA under
applicable Laws.
ARTICLE XVI
MISCELLANEOUS
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16.1 Assignment. Except as set forth in this Section 16.1, 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 a material breach of this Agreement by
the attempting party, and shall be void and without force or effect. Schering
may, upon written notice to CIMA, assign to an Affiliate(s) any or all of its
(i) obligations to pay royalties to CIMA; or (ii) option and other rights to
Manufacture Licensed Product pursuant to Section 9.5 of this Agreement, except
that no such assignment shall release Schering from its liability to pay
royalties, or payments relating to Schering's exercise of its option to
Manufacture Licensed Product, should the Affiliate default in its obligations.
The forgoing notwithstanding, either party may, without such consent, assign the
Agreement and its rights and obligations hereunder to an Affiliate or 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 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. Subject to the terms of this
Agreement, all disputes under this Agreement shall be governed by binding
arbitration pursuant to the mechanism set forth in Appendix M attached hereto
and incorporated hereby.
16.3 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.
16.4 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
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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.
16.5 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 CIMA or
Schering from time to time by the government of the United States of America.
Furthermore, each party agrees that it will not export, directly or indirectly,
any technical information acquired from the other party 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 when required by an applicable statute or regulation.
16.6 Entire Agreement; Amendment. This Agreement, including the
Attachments hereto and all the covenants, promises, agreements, warranties,
representations, conditions and understandings sets forth the complete, final
and exclusive agreement between the parties and supersedes and terminates all
prior and contemporaneous agreements and understandings between the parties,
whether oral or in writing. 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. 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.
16.7 Notices. Any notice required or permitted to be given or sent
under this Agreement shall be hand delivered or sent by express delivery service
or certified or registered mail, postage prepaid, or by facsimile transmission
(with written confirmation copy by registered first-class mail) to the parties
at the addresses and facsimile numbers indicated below.
If to CIMA, to: CIMA LABS INC.
10,000 Valley View Road
Eden Prairie, Minnesota 55344
Attn.: President and CEO
Fax No.: (952) 947-8711
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If to Schering, to: Schering-Plough Ltd.
Toepferstrasse 5, CH 6004
Lucerne, Switzerland
Attention: President
with copies to: Schering Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attn.: Vice President, Business
Development
Fax No.: (908) 298-7366
Schering Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attn.: Law Department - Senior Legal
Director, Licensing
Fax No.: (908) 298-2739
with copies of any notices regarding commercial supply of Licensed Product in
the United States to:
Schering Corporation
1095 Morris Avenue
Union, NJ 07083
Attn.: Vice President Materials
Management
Fax No.: 908-629-3062
Any such notice shall be deemed to have been received on the date
actually received. Either party may change its address or its facsimile number
by giving the other party written notice, delivered in accordance with this
Section.
16.8 Provisions for Insolvency. All rights and licenses granted
under or pursuant to this Agreement by CIMA to Schering are, for all purposes of
Section 365(n) of Title 11 of the United States Code ("Title 11"), licenses of
rights to "intellectual property" as defined in Title 11.
(a) Effect on Licenses. CIMA agrees that Schering, as
licensee of such rights under this Agreement shall retain and may fully
exercise all of its rights and elections under Title 11. CIMA agrees
during the Term of this Agreement to create and maintain current copies
or, if not amenable to copying, detailed descriptions or other
appropriate embodiments, to the extent feasible, of all such
intellectual property. If a
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case is commenced by or against CIMA under Title 11, CIMA (in any
capacity, including debtor-in-possession) and its successors and
assigns (including, without limitation, a Title 11 Trustee) shall,
(i) as Schering may elect in a written request,
immediately upon such request:
(A) perform all of the obligations provided in
this Agreement to be performed by CIMA including, where
applicable and without limitation, providing to
Schering portions of such intellectual property
(including embodiments thereof) held by CIMA and such
successors and assigns or otherwise available to them;
or
(B) provide to Schering all such intellectual
property (including all embodiments thereof) held by
CIMA and such successors and assigns or otherwise
available to them; and
(ii) not interfere with the rights of Schering under
this Agreement, or any agreement supplemental hereto, to such
intellectual property (including such embodiments), including
any right to obtain such intellectual property (or such
embodiments) from another entity.
(b) Rights to Intellectual Property. If a Title 11 case is
commenced by or against CIMA, and this Agreement is rejected as
provided in Title 11, and Schering elects to retain its rights
hereunder as provided in Title 11, then CIMA (in any capacity,
including debtor-in-possession) and its successors and assigns
(including, without limitation, a Title 11 Trustee) shall provide to
Schering all such intellectual property (including all embodiments
thereof) held by CIMA and such successors and assigns, or otherwise
available to them, immediately upon Schering's written request.
Whenever CIMA or any of its successors or assigns provides to Schering
any of the intellectual property licensed hereunder (or any embodiment
thereof) pursuant to this Section 16.8, Schering shall have the right
to perform the obligations of CIMA hereunder with respect to such
intellectual property, but neither such provision nor such performance
by Schering shall release CIMA from any such obligation or liability
for failing to perform it.
(c) Schering's Rights. All rights, powers and remedies of
Schering provided herein are in addition to and not in substitution for
any and all other rights, powers and remedies now or hereafter existing
at law or in equity (including, without limitation, Title 11) in the
event of
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the commencement of a Title 11 case by or against CIMA. Schering, in
addition to the rights, powers and remedies expressly provided herein,
shall be entitled to exercise all other such rights and powers and
resort to all other such remedies as may now or hereafter exist at law
or in equity (including, without limitation, Title 11) in such event.
The parties agree that they intend the foregoing Schering rights to
extend to the maximum extent permitted by Law, including, without
limitation, for purposes of Title 11:
(i) the right of access to any intellectual property
(including all embodiments thereof) of CIMA, or any third
party with whom CIMA contracts to perform an obligation of
CIMA under this Agreement, and, in the case of the third
party, which is necessary for the development, registration,
manufacture and marketing of Active Ingredient and/or Licensed
Product; and
(ii) the right to contract directly with any third
party described in (i) to complete the contracted work.
16.9 Force Majeure. Failure of any party to perform its obligations
under this Agreement (except the obligation to make payments when properly due)
shall not subject such party to any liability or place them in breach of any
term or condition of this Agreement to the other party if such failure is due to
any cause beyond the reasonable control of such non-performing party ("force
majeure"). Causes of non-performance constituting force majeure shall include,
without limitation, acts of God, fire, explosion, flood, drought, war, riot,
sabotage, embargo, strikes or other labor trouble, failure in whole or in part
of suppliers to deliver on schedule materials, equipment or machinery,
interruption of or delay in transportation, a national health emergency or
compliance with any order or regulation of any government entity acting with
color of right. The party affected shall promptly notify the other party of the
condition constituting force majeure as defined herein and shall exert
reasonable efforts to eliminate, cure and overcome any such causes and to resume
performance of its obligations with all possible speed. If a condition
constituting force majeure as defined herein exists for more than ninety (90)
consecutive days, the parties shall meet to negotiate a mutually satisfactory
resolution to the problem, if practicable.
16.10 Severability. If any provision of this Agreement is declared
illegal, invalid or unenforceable by a court having competent jurisdiction, it
is mutually agreed that this Agreement shall endure except for the part declared
invalid or unenforceable by order of such court, provided, however, that in the
event that the terms and conditions of this Agreement are materially altered,
the parties will, in good faith, renegotiate the terms and conditions of this
-54-
Agreement to reasonably substitute such invalid or unenforceable provisions in
light of the intent of this Agreement.
16.11 Counterparts. This Agreement shall become binding when any one
or more counterparts hereof, individually or taken together, shall bear the
signatures 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 either
party whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument.
16.12 Captions. The captions of this Agreement are solely for the
convenience of reference and shall not affect its interpretation.
16.13 Recording. Each party shall have the right, at any time, to
record, register, or otherwise notify relevant portions of this Agreement in
appropriate governmental or regulatory offices anywhere in the world, and each
party shall provide reasonable assistance to the other in effecting such
recording, registering or notifying and in obtaining or maintaining such
confidential treatment as may be reasonably available.
16.14 Further Actions. Each party agrees to execute, acknowledge and
deliver such further instruments, and to do all other acts, as may be reasonably
necessary or appropriate in order to carry out the purposes and intent of this
Agreement including, without limitation, any filings with any antitrust agency
which may be required.
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized representatives of the parties as of the dates set forth below.
CIMA LABS INC. SCHERING-PLOUGH LTD.
By: /s/ John M. Siebert By: /s/ David Poorvin
---------------------------------- --------------------------------
John M. Siebert David Poorvin
Title: President & CEO Title: Prokurist
------------------------------- ----------------------------
Date: May 20, 2002 Date: May 17, 2002
------------------------------- -----------------------------
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APPENDIX A
CHEMICAL FORMULA OF [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
-1-
APPENDIX B
BULK SPECIFICATIONS FOR BULK ACTIVE
Specifications for [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Specification Number [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Date [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] Supercedes: [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***]
Test Acceptance Limits Procedure Reference
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
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APPENDIX C
DEVELOPMENT PROGRAM
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
DEVELOPMENT ACTIVITIES, COSTS AND TIMING
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. THREE PAGES OMITTED.***]
-1-
APPENDIX D
LICENSED PATENTS RIGHTS
- ---------------------------------------------------------------------------------------------------------
Patent or Patent Patents by Country Expiration
Application Title
- ---------------------------------------------------------------------------------------------------------
"Effervescent Dosage U.S. Patent 5,178,878 January 12, 2010
Form with US
Microparticles" - US Australian Patent 646,232
"Effervescent Dosage Canada Patent 2,061,917
Form and Method of
Administering Same" - EU Patent 494,972 issued in Austria
EU [E145,551], Belgium, Denmark, France,
Australian & Canada Great Britain, Germany [69029273.2],
Italy, Spain [2,097,155], Sweden, and
Switzerland.
Japanese patent
application (2-514500)
"Effervescent Dosage filed August 29, 1990 Unknown
Form and Method of
Administering Same" -
US
- ---------------------------------------------------------------------------------------------------------
"Blister Package and U.S. Patent 6,155,423 April 1, 2018 US
Packaged Tablet"
Australian Patent No.
732,118 issued April 12,
2001
Foreign applications were
also filed on April 1, 1998
in: Canada (2,284,132)
European Patent Office
(98913352.5) (EP 1,015,351 A1) Japan
(541,960/1998)
- ---------------------------------------------------------------------------------------------------------
-1-
- ---------------------------------------------------------------------------------------------------------
"Apparatus for U.S. Patent 6,269,615 March 9, 2019 US
Handling and
Packaging Friable Australian Patent No.
Tablets" 734,383 issued
September 27, 2001
Foreign applications were
also filed on March 9,
1999 in: European Patent
Office (99914893.5) (EP
1,107,411 A1) Japan
(535,554/2000)
- ---------------------------------------------------------------------------------------------------------
"Apparatus for U.S. Patent 6,311,462 March 9, 2019
Handling and US
Packaging Friable No foreign counterparts
Tablets"
CIMA 3.0-028 DIV
- ---------------------------------------------------------------------------------------------------------
"( )" indicates an application number
"[ ]" indicates a patent number
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APPENDIX E
OUTSIDE SERVICES AGREEMENT
AGREEMENT effective as of the last date of signature hereof ("Effective
Date"), by and between Schering-Plough Research Institute, 2015 Galloping Hill
Road, Kenilworth, New Jersey 07033 ("SPRI") and CIMA Labs, Inc., 10000 Valley
View Road, Eden Prairie, MN 55344, and its Affiliates ("CIMA") for services to
be performed by CIMA.
In consideration of CIMA's engagement hereunder, the parties hereto
agree to the following terms and conditions. CIMA will provide to SPRI research
services including but not limited to feasibility studies for [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] orally disintegrating tablet in CIMA's ODT drug
delivery technology as set forth in Phase IB and Phase II of Attachment B (the
"Project"). The Project shall be subject to the following terms and conditions:
1. CIMA will perform the Project for SPRI during the term of this
Agreement at such times as are reasonably available to CIMA and in response to
SPRI's needs. In addition, SPRI shall have the option to expand the Project to
include the additional services provided for in Attachment C (attached hereto),
at the cost set forth in such Attachment C, by providing written notice to CIMA
to that effect.
2. The term of this Agreement shall be retroactively effective from
April 1, 2001, and continue until March 31, 2002 and may be extended or modified
by written agreement by both SPRI and CIMA.
3. This Agreement and/or any service to be performed hereunder
shall be immediately terminable at any time by SPRI upon ten (10) days' written
notice to CIMA. Upon the delivery of such notice by SPRI, CIMA shall immediately
cease work on the Project, deliver to SPRI all work in progress, and return all
Confidential Information (as defined in paragraph 7) with respect thereto. Upon
termination, SPRI's sole obligation to CIMA shall be to pay any monies due and
owing up to the time of termination for services actually performed and all
reasonable expenses actually incurred.
4. SPRI will pay CIMA for services performed hereunder pursuant to
detailed invoices to be provided by CIMA. In addition, CIMA shall be reimbursed
for all reasonable and customary travel expenses, if any, incurred in the
performance of such services for SPRI. Requests for
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payment for services and/or travel reimbursement shall be submitted upon
completion on detailed invoices, with original supporting documentation
attached. All reimbursements will be subject to SPRI's Reimbursement Policy
(Attachment A). The total payment for services rendered and travel reimbursement
shall not exceed [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]. All invoices will
be paid by SPRI within thirty (30) days of receipt.
5. SPRI or its authorized agents shall have the right to audit
financial documentation (e.g., time logs) relating to the Project to verify
amounts billed under this Agreement. "Pass-through" costs (i.e., direct third
party costs that may be billed to SPRI) shall not include any overhead or profit
and must be supported by original invoices (not merely itemized or referenced in
a billing).
6. In connection with services to SPRI, CIMA will have access to
certain valuable materials and technical information and data which SPRI
considers to be confidential and proprietary. This will include information
relating to research and development and commercial plans of SPRI and affiliated
companies of Schering-Plough Corporation (the corporate parent of SPRI).
7. During the term of this Agreement and for a period of five (5)
years thereafter (including following any termination or expiration), CIMA
agrees to retain in confidence and to refrain from disclosing and/or using for
its benefit or the benefit of any third party, any and all information and/or
data disclosed to CIMA as a result of its services under this Agreement and/or
obtained by CIMA or its representatives while visiting SPRI's facilities and any
and all data and/or analyses and studies arising or derived from such
information and/or data ("Confidential Information"). This restriction shall not
apply to Confidential Information: (i) which is or becomes public knowledge
(through no fault of CIMA or its representatives); or (ii) which is lawfully
made available to CIMA by an independent third party (and such lawful
availability can be properly demonstrated by CIMA); or (iii) which is already in
its possession at the time of initial receipt from SPRI (and such prior
possession can be properly demonstrated by CIMA); or (iv) which is independently
developed by CIMA or its representatives (and such independent development can
be properly demonstrated by CIMA); or (v) which is required by law, regulation,
rule, act or order of any governmental authority or agency to be disclosed by
CIMA provided, however, that CIMA gives SPRI sufficient advance written notice
to permit it to seek a protective order or other similar order with
-2-
respect to such information and thereafter CIMA discloses only the minimum
Confidential Information required to be disclosed in order to comply, whether or
not a protective order or other similar order is obtained by SPRI.
8. CIMA agrees that it will not, without the prior written
permission of SPRI, use information and data received by it under paragraphs 6
or 7 hereof for any purpose other than in carrying out this Agreement CIMA
further agrees not to submit for publication any paper containing such
information or data without the prior written permission of SPRI's legal
department.
Neither party may use the name of the other party in any publicity or
advertising nor issue a press release or otherwise publicize or disclose any
information related to the existence of this Agreement or the terms and
conditions hereof, without the prior written consent of the other party.
9. CIMA agrees to promptly inform SPRI in writing of any event or
circumstance which could reasonably affect its ability to perform hereunder in
the manner contemplated by SPRI.
10. Intellectual Property
a. In this Agreement, "SPRI Intellectual Property
Rights" means any intellectual and industrial
property (including, without limitation, any ideas,
trade secrets, inventions, discoveries, copyright
material or confidential know-how) relating to the
Compound (including the Compound itself) or any other
compound, product, technology, design, process, or
method existing, created, discovered, conceived or
under development prior to the date of this Agreement
first written above owned or licensed by SPRI or any
of its associated companies and which is used in or
disclosed for the purposes of the study.
b. In this Agreement "CIMA Intellectual Property Rights" means any
intellectual and industrial property (including, without limitation,
any ideas, trade secrets, inventions, discoveries, copyright material
or confidential know-how) relating to the technology (including the
technology itself) or any other product, technology, design, process,
-3-
or method existing, created, discovered, conceived or under development
prior to the date of this agreement first written above, owned or
licensed by CIMA or any of its associated companies and which is used
in or disclosed for the purposes of the study.
c. In this Agreement, "SPRI Intellectual Property Discoveries" means any
intellectual property (including, without limitation, any invention,
discovery or confidential know-how) which arises in the course of the
study (i) relating to the Compound, SPRI Intellectual Property Rights
and the Formulation (but not including CIMA Intellectual Property
Rights); or (ii) arises from SPRI information protected under clause 7
above or work carried out by SPRI.
d. In this Agreement, "CIMA Intellectual Property Discoveries" means any
intellectual property (including, without limitation, any ideas, trade
secrets, inventions, discoveries, copyright material or confidential
know-how) which may be made or discovered by any of CIMA's employees or
other members of its staff relating to technology and which arises in
the course of any study carried out under this Agreement and which is
not SPRI Intellectual Property Rights or SPRI Intellectual Property
Discoveries.
e. Ownership
(i) SPRI Intellectual Property Rights and SPRI
Intellectual Property Discoveries shall
belong absolutely to SPRI and shall not be
used by CIMA in any way other than for the
purposes of carrying out the study.
(ii) CIMA Intellectual Property Rights and CIMA
Intellectual Property Discoveries shall
belong absolutely to CIMA and shall not be
used by SPRI in any way other than for the
purposes contemplated by the parties under
this Agreement. For the avoidance of doubt,
SPRI shall not commercialize the resultant
formulation, without a license to CIMA's
Intellectual Property Rights.
-4-
(iii) Each party agrees, at the request of the
other, to do all acts and execute all
documents necessary and/or desirable to give
effect to the provisions of sub-clauses
10(e)(i) and (ii) above at the cost of the
party making the request and each party
shall inform the other promptly of any
results arising out of the study relating to
the other's Intellectual Property Rights
which may be patentable and provide full
details thereof.
(iv) Other than as contemplated in this
Agreement, each party acknowledges that they
are granted no other right to license to
use, exploit or otherwise derive any
advantage from the other's Intellectual
Property Rights under this Agreement.
11. CIMA warrants and represents that as of the date of this
Agreement CIMA (i) has the authority to execute this Agreement; and (ii) is not
a party to any oral or written contract or understanding with any third party
that is inconsistent with this Agreement and/or its performance hereunder, or
that will in any way limit or conflict with its ability to fulfill the terms of
this Agreement. CIMA further represents that it will not enter into any such
agreement during the term of this Agreement.
12. CIMA understands and agrees that in its relationship with SPRI
under this Agreement, CIMA is not a SPRI employee but, instead, CIMA is acting
in the capacity of an independent contractor and has no authority to represent
or act on behalf of SPRI. SPRI shall assume no liability for any damages and/or
losses which may result from CIMA's negligence or from the performance of CIMA's
services and obligations hereunder, and CIMA shall indemnify and hold SPRI, its
officers, directors and employees harmless from and against any suits, claims,
actions and/or liabilities arising from CIMA's breach of any of CIMA's
obligations under this Agreement or from CIMA's negligent acts, omissions or
failure to act and CIMA hereby acknowledges that CIMA is totally responsible for
the payment of any and all taxes, including any quarterly estimated payments,
applicable to CIMA's performance hereunder.
CIMA understands and agrees that it is not entitled to
participate in any of the employee benefit plans, including but not limited to
the group health insurance plan, the Schering-Plough Retirement Plan, the
Schering-Plough Employees' 401K Savings Plan, the Schering-
-5-
Plough Employees' Profit-Sharing Incentive Plan, and the Schering-Plough Stock
Incentive Plan. CIMA further understands and agrees that, if it is found to be a
common law or statutory employee by (i) the Internal Revenue Service; (ii) any
other taxing authority; (iii) any regulatory authority; or (iv) a court of law,
then CIMA hereby waives any right of eligibility which might thereby accrue to
CIMA to participate in the aforesaid benefit plans of SPRI.
CIMA agrees that during the term of this Agreement and for a
period of six (6) months thereafter, it shall neither directly nor indirectly
solicit for employment, or otherwise retain employees of SPRI, whom CIMA has met
as a result of CIMA's performance of services for SPRI.
13. CIMA warrants that all services shall be performed in a
professional and workmanlike manner. If the scope of the Project pertains to
programming and/or software maintenance, CIMA warrants and represents that all
software shall have logic pertaining to dates which will enable SPRI to identify
and use the century portion of date fields without special processing; thus
enabling the software to calculate and to store dates accurately including and
following January 1, 2000.
14. This Agreement shall be construed in accordance with New Jersey
law without regard to its conflict of laws, rules or principles. It is
understood and agreed that both parties hereby submit to the jurisdiction of New
Jersey state and federal courts.
15. CIMA represents and warrants that neither it nor its
representatives or employees involved with the Project have been debarred
pursuant to the Federal Food, Drug and Cosmetic Act, or excluded from a federal
health care program.
16. CIMA warrants and represents that CIMA has insurance sufficient
to cover CIMA's obligations and/or any liability assumed by CIMA under this
Agreement. CIMA shall produce proof of such insurance within thirty (30) days of
SPRI's request.
17. CIMA shall not assign this Agreement to any person, firm,
partnership, corporation or other entity (including by operation of law,
judicial process or otherwise) without the prior written consent of SPRI, which
consent may be withheld for any reason. SPRI shall be entitled to assign this
Agreement to any of its subsidiaries, affiliates, and/or its parent corporation,
or any of such parent corporation's subsidiaries
-6-
and/or affiliates (including by operation of law, judicial process
or otherwise) without the prior written consent of CIMA.
18. No term, condition or other provision of any attachment(s) or
addenda to this Agreement shall supersede any term, condition or other provision
of this Agreement and the Reimbursement Policy, and with respect to any
inconsistency or ambiguity, this Agreement, together with the Reimbursement
Policy shall control. This Agreement represents the entire understanding of the
parties and hereby supersedes all prior understandings and agreements, whether
oral or written, between the parties with respect to the services to be
performed. This Agreement may only be amended by a written instrument signed by
both parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed, by duly authorized representatives, as of the last date written below.
CIMA LABS, INC. SCHERING-PLOUGH RESEARCH INSTITUTE
By:/s/John M. Siebert By: /s/ Lisbeth Hume
--------------------- ------------------------------
Name: John M. Siebert Name: L. Hume, Ph.D.
Title: President and CEO Title: Group Director SPC
Development Operations
Date: 27 April 2001 Date: May 21, 2001
-7-
ATTACHMENT A
REIMBURSEMENT POLICY
In accordance with SPRI's standard policies and procedures, the following are
types of expenses for which SPRI will not reimburse, unless expressly agreed to
in a prior writing by the parties:
- - Commuting expenses to and/or from the CIMA's place of business or
residence (excluding commuting to and/or from airport for
SPRI-requested business).
- - First-class or business-class air travel
- - Add-on costs with respect to outside services
- - Mark-up for the work product of outside professionals, including but
not limited to freelancers
- - Meals (excluding meals while traveling for SPRI-requested business).
- - Administrative and/or overhead percentages
- - Agency presentations for new business
- - Gifts to SPRI's employees
- - Entertainment of SPRI's employees
- - Mark-up on any out-of-pocket expenses
Note: This list sets forth the major items for which SPRI will not
reimburse CIMA and is meant to be merely illustrative and not
exhaustive. All CIMA expenses shall be reviewed with respect to the
reasonableness of such expenses.
-1-
ATTACHMENT B
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] Development Activities, Costs and
Timing: Outside Services Agreement
- -------------------------------------------------------------------------------
Phase Activity Anticipated Costs ($)
Completion/Duration
- -------------------------------------------------------------------------------
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. TWO PAGES OMITTED***]
- -------------------------------------------------------------------------------
-1-
ATTACHMENT C
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
Product: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Format: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] only
Quantity: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Delivery date: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
Ship to: Jim Kou, Schering-Plough
Cost: [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
-1-
Amendment #1
THIS AMENDMENT #1 to Outside Services Agreement is entered into as of this 25th
day of September, 2001.
Whereas, CIMA LABS Inc. ("CIMA") and Schering-Pough Research Institute ("SPRI")
have entered into an Outside Services Agreement with an Effective Date of May
21, 2001 ("Outside Services Agreement") regarding research on the development of
a pharmaceutical product containing [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***];
Whereas, CIMA has been conducting research and development activities according
to Attachment B of the Outside Services Agreement; and
Whereas, CIMA and SRI have determined that changes to the Outside Services
Agreement, including the inclusion of development milestone payments, are
desirable;
Therefore, for good and valid consideration, the Parties agree to amend the
Outside Services Agreement as follows:
1) In Paragraph 4 line 1 - after "services performed" insert "or
milestones achieved";
2) In Paragraph 4 after the first sentence - insert "In the event
that the pilot biostudy conducted by SPRI indicates that
CIMA's [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] oral disintegration table prototype is
bioequivalent to SPRI's [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] solid oral dosage form, SPRI shall
pay CIMA a milestone payment ("Milestone Payment") of
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]";
3) In Paragraph 4, change "[***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] to [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]"; and
4) In Paragraph 4 in the last sentence - after "thirty (30) days
of receipt" insert ", provided, however that the Milestone
Payment shall be due and payable, within five (5) days after
the execution of a development, license and supply agreement
for a pharmaceutical product containing [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] between CIMA and
Schering Corporation.
5) In all other respects, the terms and conditions of the Outside
Services Agreement remain in full force and effect.
Capitalized terms in this Amendment shall have the same
meaning as in the Outside Services Agreement.
CIMA LABS Inc. Schering-Plough Research Institute
-1-
By: /s/ John M. Siebert By: /s/ Cecil B. Pickett
--------------------------- ----------------------------
Signature Signature
John M. Siebert Cecil B. Pickett
--------------------------- ----------------------------
(Print or Type Name) (Print or Type Name)
Title: President & CEO Title: Acting President
-------------------------- ----------------------------
25 September 01
-2-
Amendment #2 to Outside Services Agreement
THIS AMENDMENT #2 to the Outside Services Agreement is entered into as of this
3rd day of December, 2001.
Whereas, CIMA LABS Inc. (CIMA) and Schering-Plough Research Institute (SPRI)
have entered into an Outside Services Agreement with an Effective Date of May
21, 2001 (Outside Services Agreement) regarding research on the development of a
pharmaceutical product containing [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***];
Whereas, the Outside Services Agreement was subsequently amended by Amendment #1
to the Outside Services Agreement dated September 25, 2001;
Whereas, CIMA has been conducting research and development activities according
to Attachment B of the Outside Services Agreement as amended; and
Whereas, CIMA and SPRI have determined that further changes to the Outside
Services Agreement, including the payment of a development milestone payment and
additional development activities, are desirable;
Therefore, for good and valid consideration, the Parties agree to further amend
the Outside Services Agreement as follows:
1) Attachment B is replaced with Attachment B-1 of this
Amendment;
2) In the second preamble paragraph replace "Phase 1B and Phase
II of Attachment B" with "Phase IIa, Phase IIb, Phase III and
Phase IVa of Attachment B-1";
3) In Paragraph 4, change "[***CONFIDENTIAL TREATMENT
REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] to [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]" ; and
4) In Paragraph 4 in the last sentence delete "the Milestone
Payment shall be due and payable, upon the completion of a
development, license and supply agreement for a pharmaceutical
product containing [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] between CIMA and Schering
Corporation." and replace with "the Milestone Payment shall be
payable thirty (30) days from the date of execution by SPRI of
this Amendment #2."
5) In all other respects, the terms and conditions of the Outside
Services Agreement, as amended by Amendment #1, remain in full
force and effect. Capitalized terms in this Amendment #2 shall
have the same meaning as in the Outside Services Agreement and
Amendment #1.
CIMA LABS Inc. Schering-Plough Research Institute
By: /s/ John M. Siebert By: /s/ Cecil B. Pickett
--------------------------- -----------------------------
Signature Signature
John M. Siebert Cecil B. Pickett
--------------------------- -----------------------------
-3-
(Print or Type Name) (Print or Type Name)
Title: President & CEO Title: Acting President
------------------------- ---------------------------
Date: 3 Dec 2001 Date: 1/7/02
------------------------- ---------------------------
-4-
ATTACHMENT B-1
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
DEVELOPMENT ACTIVITIES, COSTS AND TIMING
05 DECEMBER 01
- -------------------------------------------------------------------------------
Phase Activity Anticipated Costs ($)
Completion/
Duration
- -------------------------------------------------------------------------------
[*** CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. TWO PAGES OMITTED.***]
-5-
APPENDIX F
PACKAGING COMPONENTS FOR LICENSED PRODUCT
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
-1-
APPENDIX G
PRICE OF LICENSED PRODUCT SUPPLIED BY CIMA FOR COMMERCIAL USE
Estimated prices per OraSolv(R) tablet
- -------------------------------------------------------------------------
Type Potency Packaging Price/tab ($) in
Configuration Cartons*
- -------------------------------------------------------------------------
Samples [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]
- -------------------------------------------------------------------------
Trade [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]
- -------------------------------------------------------------------------
NOTE: Price per tablet is an estimate and assumes that Schering will provide
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***] for manufacturing of tablets and package
inserts. Price per tablet is based on a 550 kilogram batch (~3,000,000 tablets)
and a five (5) batch minimum order. Final price will be determined upon final
formulation and packaging configuration of the Product.
* Tablet Prices for the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] tablets
will not exceed the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] price
quoted herein. Final [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] prices
will be determined upon final formulation and packaging configuration of
these Products.
** If the [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***] format is used
there will be an additional tooling charge of up to
-1-
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.***] for each tablet size.
-2-
APPENDIX H
SPECIFICATIONS FOR LICENSED PRODUCT
Specifications for [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
- -------------------------------------------------------------------------------------------------
Physical Appearance [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
- -------------------------------------------------------------------------------------------------
Identity [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.***]
- -------------------------------------------------------------------------------------------------
Assay [***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]label claim
- -------------------------------------------------------------------------------------------------
Uniformity of Dosage Units Meets the requirements of the current USP for Content
Uniformity of Compressed Tablets
- -------------------------------------------------------------------------------------------------
Dissolution To be determined prior to regulatory submission
- -------------------------------------------------------------------------------------------------
Degradation Products To be determined prior to regulatory submission
- -------------------------------------------------------------------------------------------------
Tablet Disintegration Not more than [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]
- -------------------------------------------------------------------------------------------------
-1-
APPENDIX I
ADVERSE EVENT REPORTING PROCEDURES FOR PRODUCTS
1.0 PURPOSE
The purpose of this agreement is to describe the procedures and define
the responsibilities which Schering and CIMA, will employ to ensure that adverse
event notification and reporting requirements meet current health agency
regulations and guidelines worldwide.
Schering and CIMA (the "Parties") understand and agree that these
procedures are intended to comply with 21 CFR 310.305(a), 312.32, 314.80(b), and
314.98 concerning standard written procedures for adverse event reporting in the
United States and Laws applicable to Adverse Event (AE) and Adverse Drug
Reaction (ADR) reporting outside the US. References within this document to AEs
also include ADRs as appropriate. These procedures may be amended by the Parties
at any time by mutual written agreement to ensure that they fully and accurately
reflect the procedures in place for surveillance, receipt, evaluation and
reporting of adverse drug experiences by the Pharmacovigilance departments of
the Parties and comply with applicable Laws in the countries in which the
product is marketed and/or is under investigation. In that regard, upon the
written request of either Party, the Parties shall meet to renegotiate in good
faith, all or some of these procedures. Notwithstanding the foregoing, the
procedures set forth in this Attachment shall not be construed as restricting
either Party's ability to take action that it deems to be appropriate or
required of it under applicable Law.
All defined terms used in this agreement are intended to be interpreted
in a manner consistent with the corresponding definitions in ICH E2A1 and E2C,
and with FDA regulations and guidelines (Appendix 1).
2.0 EXCHANGE OF ADVERSE EVENT INFORMATION
The language of all exchanges of AE information will be English. Each
party can also elect not to receive documents.
2.1 Spontaneous Reports - Marketed Product.
- -------------------------
(1) Directive 75/319 EEC chapter Va - Pharmacovigilance and EC valid guidelines
such as Notice to Marketing Authorization Holders - Pharmacovigilance guide,
and CPMP/ICH-guidelines - CPMP/ICH/287/95 (E2A), CPMP/ICH/377/95 (E2B)
CPMP/ICH/288/95 (E2C).
-1-
a) Each party will send the other party for all Serious
Adverse Events reported to it regardless of source (other than from
disclosure by or on behalf of the other Party) a completed
CIOMS/MEDWATCH within eight calendar days after the first person in the
receiving party (Schering or CIMA) is first made aware of it, or source
documents within two calendar days after the first person in the
receiving party (Schering or CIMA) is made aware of it by Fax. This
applies to initial and all follow-up information.
If both parties have the capabilities, by mutual agreement,
data exchange can be done electronically.
b) Each party will send the other party for all Non-Serious
Adverse Events regardless of source (other than from disclosure by or
on behalf of the other Party) a CIOMS/MEDWATCH line listing, by fax or
courier mail, for all initial and follow-up Non-Serious adverse events
on a monthly basis. If both parties have the capabilities, by mutual
agreement, data exchange can be done electronically.
2.2 Serious Adverse Events (SAEs) from Clinical Studies
a) For Fatal or Life-threatening adverse events reported to
a party regardless of source (other than from disclosure by or on
behalf of the other Party) the party will send to the other party a
completed CIOMS/MEDWATCH within three calendar days after the first
person in the receiving party (Schering or CIMA) is first made aware of
it, by fax or source documents within Two calendar days after the first
person in the receiving party (Schering or CIMA) is first made aware of
it via Fax. . This applies to initial and all follow-up information.
If both parties have the capabilities, by mutual agreement,
data exchange can be done electronically.
b) Each party will send the other party for all Serious
Adverse Events reported to it regardless of source (other than from
disclosure by or on behalf of the other Party) a completed
CIOMS/MEDWATCH within eight calendar days after the first person in the
receiving party (Schering or CIMA) is first made aware of it, or source
documents within two calendar days after the first person in the
receiving party (Schering or CIMA) is first made aware of it by Fax.
This applies to initial and all follow-up information.
-2-
If both parties have the capabilities, by mutual agreement,
data exchange can be done electronically.
c) Non-serious AE reports from Clinical Studies will not be
exchanged between the Parties' Pharmacovigilance departments.
2.3 Pregnancy Reports. All reports of drug exposure to a pregnancy
(male or female partner using the product) received by either party, including
both, those reports associated with an adverse event and those reports not
associated with an adverse event, will be exchanged. Serious AE's will be
treated as explained in sections 2.1 and 2.2. If a non-serious AE or no adverse
event is involved and the report is simply one of a pregnancy in a patient or
partner on a S-P product the report is to be sent to DSS within 7 calendar days.
The pregnancy will be followed to term by the reporting group and/or DSS to
obtain the outcome of the pregnancy (Pregnancy Register).
2.4 Animal Studies. A written report for AEs for animal studies
which suggest a potential significant risk for humans shall be forwarded to the
other Party via fax within two working days of receipt by the Party making the
report.
3.0 ASSESSMENT OF ADVERSE EVENTS
3.1 Spontaneous Reports - Marketed Product. N/A.
3.2 Serious AEs from Clinical Studies. Causality: Each party
will be responsible for the causality assessment of AEs in their own clinical
studies.
4.0 REPORTING RESPONSIBILITIES
Each party will send via fax to the other party a copy of all reports
sent to Health Authorities within one day of transmission to the Heath
Authority, except for those already sent to the other party. For example, but
not limited to, PSUR, Periodic reports, etc.
4.1 Spontaneous Reports-Marketed Product. Each party will have the
responsibility for the reporting of AEs to Health Authorities where they hold
the Marketing Authorization.
4.2 Product in Clinical Trials. Each party will have the
responsibility for the reporting of AEs to Health Authorities and its
investigators in those territories where they are conducting clinical trials.
Alterations in this
-3-
procedure may be agreed upon by both parties in writing at any time during the
Term of this Agreement.
5.0 QUESTIONS FROM HEALTH AUTHORITIES
Each Party will be responsible for responding to Health Authorities
where they hold the Marketing Authorization. Each party will immediately (within
2 working days) advise the other Party of any Product safety communication
received from a health authority and consult with the other Party with respect
to any proposed change to product warnings, labeling or an Investigator's
Brochure involving safety issues, including, but not limited to, safety issues
agreed to by the Parties. Each party will send the other party a copy of
correspondence sent to the Health Authority when sent to the Health Authority.
6.0 LITERATURE REVIEW
Each party will be responsible for reviewing all published/unpublished
articles in the territories where they are the Marketing Authorization holder or
are conducting clinical trials. All adverse events identified in the literature
will be processed as described in Section 2.1 and Section 2.2.
7.0 SIGNALING
Each Party will signal unexpected adverse events from their databases.
Each party will notify the other in writing of any proposed safety changes in
U.S. and/or core labeling documents for discussion and comment prior to
implementation of the label change.
8.0 AUDIT
Each Party agrees to maintain accurate and complete records of all
adverse events relating to product(s) and submissions to government authorities
relating thereto (collectively, "Records"). Each party agrees to permit
representatives of the other party to examine and audit the Records, during
normal business hours and at no charge, upon reasonable written notice;
provided, however, that such audit must be reasonable in scope and in
relationship to the adverse events for the product(s). Both parties shall have
the opportunity to participate in any post-audit meeting and receive a copy of
any audit report relating thereto; and provided further that, if either party
-4-
seeks to use the services of a Third Party in such an audit, the Third Party
must be acceptable to both Parties and be willing to comply with reasonable
requirements of the party being audited, such as signing a confidentiality
agreement.
9.0 TERM
This Agreement will become active as of the latest date signed below
and supersedes all previous agreements for the exchange of AE information. This
Agreement will remain in effect until such time that a new agreement is
negotiated by the parties and approved by the Law Department and DSS. This
agreement will survive the termination of the contract that it is attached to up
until the point that the product is no longer being sold.
10.0 MISCELLANEOUS
a) Definitions: Each party accepts the definitions in the Safety
Agreement Appendix 1 for the interchange AE information.
b) Contact List: Each party will supply the required information
found in the Safety Agreement Appendix 2 and will notify the other party within
five working days via fax of any changes to this information.
c) Amendments to the license contract: Each party will notify the
other party's safety contact of any amendments, extensions, terminations of the
License contract within five working days via Fax.
d) Amendments to this safety agreement: Both parties by mutual
agreement may add written amendments to this agreement covering arrangements for
the handling of other safety issues (e.g. labeling, periodic safety update
report preparation, exceptional issues in one or more countries etc.).
-5-
SAFETY AGREEMENT APPENDIX 1
DEFINITIONS
A. MARKETED DRUG
Refers to a human drug, biological product, or device that is being
commercialized anywhere in the world. This includes products sold "under
license".
B. ADVERSE EVENT (AE)
1. Any undesirable medical occurrence (and for devices, any
malfunction with or without an accompanying untoward medical occurrence), in a
patient or clinical investigation subject administered a pharmaceutical
product/biologic (at any dose), or device. An AE can therefore be any
unfavorable and unintended sign (including an abnormal laboratory finding, for
example), symptom or disease temporally associated with the use of a medicinal
product whether or not considered related to the medicinal product:
- occurring in the course of the use of a drug, biological product or
device
- associated with, or observed in conjunction with product overdose,
whether accidental or intentional,
- associated with, or observed in conjunction with product abuse,
and/or
- associated with, or observed in conjunction with product withdrawal.
2. Any failure of expected pharmacological or biologic therapeutic
action (with the exception of such failure occurring in a clinical trial).
C. ADVERSE DRUG REACTION (ADR)
1. Post-marketing: A response to a drug which is noxious and
unintended and which occurs at doses normally used in man for prophylaxis,
diagnosis, or therapy of disease or for the modification of physiological
functions.
2. In the pre-approval clinical experience with a new medicinal
product or its new usages: any response to a medicinal product which is noxious
or unintended, and which occurs at any dose used or tested in humans for
prophylaxis, diagnosis, or therapy of disease, or for the modification of
physiologic function.
-6-
D. SERIOUS ADVERSE EVENT (SAE) is an event meeting one or both of the
following definitions:
1. Definition = FDA Definition Serious. Any adverse drug experience
occurring at any dose that results in any of the following outcomes: Death, a
life-threatening adverse drug experience, inpatient hospitalization or
prolongation of existing hospitalization, a persistent or significant
disability/incapacity, or a congenital anomaly/birth defect. Important medical
events that may not result in death, be life-threatening, or require
hospitalization may be considered serious when, based upon appropriate medical
judgment, they may jeopardize the patient or subject and may require medical or
surgical intervention to prevent one of the outcomes listed in this definition.
Examples of such medical events include allergic bronchospasm requiring
intensive treatment in an emergency room or at home, blood dyscrasias or
convulsions that do not result in inpatient hospitalization, or the development
of drug dependency or drug abuse.
2. Serious Adverse Event (experience) or Reaction Definition from
ICH E2A. Any untoward medical occurrence that at any dose:
- results in death,
- is life-threatening,
- requires inpatient hospitalization or prolongation of existing
hospitalization,
- results in persistent or significant disability/incapacity, or is a
congenital anomaly/birth defect.
E. NON-SERIOUS ADVERSE EVENT
Any AE which does not meet the criteria for serious.
F. UNEXPECTED ADVERSE EVENT (UNLABELED)
1. Marketed Product. Any AE, the nature, severity or frequency of
which is inconsistent with the most current SmPC for within the EU; US PI for
within the US; or Local Package Insert for countries outside the EU/US. This
includes reports of adverse events which add significant information on the
specificity of an already known adverse event. Events considered more severe or
specific than those in the SmPC, US PI or Local PI constitute unexpected events.
For example:
a) Acute renal failure is labeled, with a report of
interstitial nephritis (nephritis is not labeled).
-7-
b) Hepatitis with new report of fulminant hepatitis (fulminant
hepatitis is not labeled).
2. Product in Clinical Trials.
a) Based on the Investigator Brochure (IB)
b) Any adverse event, the nature, severity or frequency of
which is not consistent with information in the most current SmPC
(Phase IV studies for indications approved in the SmPC) or IB (Phase
I-III or Phase IV studies for indications not approved in the SmPC), as
described above.
G. STUDY DURATION
Adverse events will be collected for the duration of all studies. Study
completion (closure) is defined as later of:
- the last dose of the study medication,
- the last visit by the subject or patient or,
- the last subject or patient contact (e.g., phone contact) with the
Investigator or designee as defined in the protocol.
SAEs that occur within 30 days after this closure must be reported. For survival
studies, only deaths (not all serious AE's), that occur after the 30 day period
(study completion for each patient) need be reported.
H. RELATED OR POSSIBLY OR PROBABLY RELATED TO THE "BIOMEDICAL RESEARCH"
For the purposes of this agreement, all events attributed to the trial
or study or imposed by it, including drugs (study drugs, placebo, concomitant
drugs given for the study or "no treatment"), investigations performed and the
conditions in which they are carried out. Events which are not related to the
biomedical research are those which are due to the underlying disease being
treated. That is, events are considered possibly or probably related to the
biomedical research if they cannot be clearly attributed to the underlying
disease. Thus, any event in the trial which is due to the study drug, to
placebo, to concomitant medications, to a trial procedure, to a trial
investigation or any other "constraint" imposed by the trial is to be reported
as an adverse event.
I. INVESTIGATIONAL DRUG, BIOLOGICAL PRODUCT, OR DEVICE
A drug, biological product or device in clinical trials. This includes
clinical trials being conducted for new indications with marketed products.
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J. CLINICAL INVESTIGATION/TRIAL/STUDY
All experiments or systematic studies in which a drug is administered
or dispensed to or used in dosing one or more human subjects.
K. SIGNALING
The purpose of signaling is to identify "possible signals" which need
further review and consideration for possible label changes. These events are
generally unexpected (unlabeled). These events may or may not be serious and may
or may not be due to or caused by the drug.
L. INITIAL RECEIPT DATE
The day the regulatory clock starts and is the earliest date that an
employee, agent, representative etc. of either party, first becomes aware of the
event.
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SAFETY AGREEMENT APPENDIX 2
CONTACT PEOPLE FOR EXCHANGE OF SAFETY INFORMATION:
Schering Plough or Affiliate
Company Name:
- ----------------------------------------------------------------------------------------------
Primary Back-up
- ----------------------------------------------------------------------------------------------
NAME Taiwo Omolodun Kathy Rodriguez
- ----------------------------------------------------------------------------------------------
TITLE Manager, Drug Surveillance Manager, Training and
Compliance
- ----------------------------------------------------------------------------------------------
PHONE NUMBER 1 973-921-7415 973-921-7452
- ----------------------------------------------------------------------------------------------
PHONE NUMBER 2
- ----------------------------------------------------------------------------------------------
FAX NUMBER 1 973-921-7424 973-921-7425
- ----------------------------------------------------------------------------------------------
FAX NUMBER 2
- ----------------------------------------------------------------------------------------------
E-MAIL 1 Taiwo.Omolodun@spcorp.com Kathy.Rodriguez@spcorp.com
- ----------------------------------------------------------------------------------------------
E-MAIL 2
- ----------------------------------------------------------------------------------------------
MAILING ADDRESS Schering Plough Research Institute Schering Plough Research Institute
- ----------------------------------------------------------------------------------------------
50 Lawrence Road 50 Lawrence Road
- ----------------------------------------------------------------------------------------------
Springfield, NJ Springfield, NJ
- ----------------------------------------------------------------------------------------------
07081-0735 07081-0735
- ----------------------------------------------------------------------------------------------
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LICENSE PARTNER OR AFFILIATE
Company Name:
- ------------------------------------------------------------------------------------------------------------------------------
Primary Back-up
- ------------------------------------------------------------------------------------------------------------------------------
NAME Ken Manning Jackie Torfin
- ------------------------------------------------------------------------------------------------------------------------------
TITLE Vice President, Quality Director, Quality Systems
- ------------------------------------------------------------------------------------------------------------------------------
PHONE NUMBER 1 952-947-8714 952-947-8773
- ------------------------------------------------------------------------------------------------------------------------------
PHONE NUMBER 2 952-947-8707 (after hours at CIMA) 952-947-8707 - after hours at CIMA
[***CONFIDENTIAL TREATMENT REQUESTED, [***CONFIDENTIAL TREATMENT REQUESTED, PORTION
PORTION OMITTED OMITTED FILED SEPARATELY WITH THE SECURITIES AND
FILED SEPARATELY WITH THE EXCHANGE COMMISSION.***] (emergencies only)
SECURITIES AND EXCHANG
COMMISSION.***] (emergencies only)
- ------------------------------------------------------------------------------------------------------------------------------
FAX NUMBER 1 952-947-8770 952-947-8948
- ------------------------------------------------------------------------------------------------------------------------------
FAX NUMBER 2 952-947-8770
- ------------------------------------------------------------------------------------------------------------------------------
E-MAIL 1 kenm@cimalabs.com Jackiet@cimalabs.com
- ------------------------------------------------------------------------------------------------------------------------------
E-MAIL 2
- ------------------------------------------------------------------------------------------------------------------------------
MAILING ADDRESS 10000 Valley View Road 10000 Valley View Road
Eden Prairie, MN 55344 Eden Prairie, MN 55344
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
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APPENDIX J
STORAGE CONDITIONS
A recertification period of [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***] has been assigned for [***CONFIDENTIAL TREATMENT REQUESTED,
PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***]. An assessment for the extension of the [***CONFIDENTIAL
TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.***] recertification period will be made when additional
data become available.
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APPENDIX K
EXPENSE GUIDELINES
In accordance with Schering's standard policies and procedures, the following
are types of expenses for which Schering will not reimburse, unless expressly
agreed to in a prior writing by the parties:
- - Taxi/Sedans/Limousines to and/or from Schering, to and/or from Company's
place of business (excluding taxis to and/or from airports for
Schering-requested business)
- - First-class or business-class air travel
- - Add-on costs with respect to outside services
- - Mark-up on the work product of outside professionals, including but not
limited to freelancers
- - Lunches and dinners
- - Administrative and/or overhead percentages
- - Presentations for new business
- - Gifts to Schering employees
- - Entertainment of Schering employees
- - Mark-up on out-of-pocket expenses
Note: This list sets forth the major items for which Schering will not
reimburse Company and is meant to be merely illustrative and not
exhaustive. All Company expenses shall be reviewed with respect to the
reasonableness of such expenses.
-1-
APPENDIX L
KEY SCHERING MARKETS
[***CONFIDENTIAL TREATMENT REQUESTED, PORTION OMITTED FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.***]
-1-
APPENDIX M
ARBITRATION PROVISIONS
(a) Scope. Subject to and in accordance with the terms of this
Agreement and this Appendix M, all differences, disputes, claims or
controversies arising out of or in any way connected or related to this
Agreement, whether arising before or after the expiration of the term of this
Agreement, and including, without limitation, its negotiation, execution,
delivery, enforceability, performance, breach, discharge, interpretation and
construction, existence, validity and any damages resulting therefrom or the
rights, privileges, duties and obligations of the parties under or in relation
to this Agreement (including any dispute as to whether an issue is arbitrable)
shall be referred to binding arbitration in accordance with the rules set forth
herein and of the American Arbitration Association, as in effect at the time of
the arbitration. The time frames set forth herein shall control the timing of
the arbitration procedure.
(b) Parties to Arbitration. For the purposes of each arbitration
under this Agreement, Schering shall constitute one party to the arbitration and
CIMA shall constitute the other party to the arbitration.
(c) Notice of Arbitration. A party requesting arbitration hereunder
(the "Requesting Party") shall give a notice of arbitration to the other party
(the "Non-requesting Party") containing a concise description of the matter
submitted for arbitration (a "Notice of Arbitration"). Notice of Arbitration
shall be delivered to the other party in accordance with Section 16.7 of the
Agreement.
(d) Response. The Non-requesting Party must respond in writing
within thirty (30) days of receiving a Notice of Arbitration with an
explanation, including references to the relevant provisions of the Agreement.
The Non-requesting Party may add additional issues to be resolved.
(e) Meeting. Within fifteen (15) days of receipt of the response
from the Non-requesting Party pursuant to Paragraph (d), the parties shall meet
and discuss in good faith options for resolving the dispute. The Requesting
Party must initiate the scheduling of this resolution meeting. Each party shall
make available appropriate personnel to meet and confer with the other party
during such fifteen (15) day period.
(f) Selection of Arbitrator. Any and all disputes that cannot be
resolved pursuant to Paragraphs (c), (d) and (e) shall be submitted to an
arbitrator (the "Arbitrator") to be selected by mutual agreement of the parties.
The Arbitrator shall be a retired judge of a state or federal court, to be
chosen
-1-
from a list of such retired judges to be prepared jointly by the parties within
fifteen days following the response, with each party entitled to submit the
names of three such retired judges for inclusion in the list, provided that to
the extent the dispute involves issues of patent law the parties shall limit
such list to judges from federal courts having jurisdiction over patent law
issues. Upon completion of the list, the parties shall decide within ten (10)
days thereafter which of the retired judges will be selected as the Arbitrator.
No Arbitrator appointed or selected hereunder shall be an employee, director or
shareholder of, or otherwise have any current or previous relationship with, any
party or its respective Affiliates. If the parties fail to agree on the
selection of the Arbitrator within the allotted time frame, the Arbitrator shall
be designated by the then President of the American Arbitration Association.
(g) Powers of Arbitrator. The Arbitrator may determine all questions
of law and jurisdiction (including questions as to whether a dispute is
arbitrable) and all matters of procedure relating to the arbitration, except
that the Arbitrator shall be bound by the time frames set forth herein in
connection with such arbitration. The Arbitrator shall have the right to grant
legal and equitable relief (including injunctive relief and to award costs
(including reasonable legal fees and costs of arbitration) and interest. Nothing
contained herein shall be construed to permit the Arbitrator to award punitive,
exemplary or any similar damages.
(h) Arbitration Procedure. The arbitration shall take place in the
City of Chicago, Illinois at such place and time, consistent with the time
frames set forth herein, as the Arbitrator may fix for the purpose of hearing
the evidence and representations that the parties may present. The law
applicable to the arbitration shall be the law of the State of New Jersey. No
later than twenty (20) business days after hearing the representations and
evidence of the parties, the Arbitrator shall make its determination in writing
and deliver one copy to each of the parties.
(i) Discovery and Hearing. During the meeting referred to in
Paragraph (e), the parties shall negotiate in good faith the scope and schedule
of discovery, relating to depositions, document production and other discovery
devices, taking into account the nature of the dispute submitted for resolution.
If the parties are unable to reach agreement as to the scope and schedule of
discovery, the Arbitrator may order such discovery as it deems necessary. The
parties and the Arbitrator must adhere to the following schedule: (1) all
discovery shall be completed within sixty (60) days from the date of the
selection of the Arbitrator, and (2) the arbitration hearing shall commence no
earlier than twenty (20) business days and no later than thirty (30) business
days after completion of such discovery. At the arbitration hearing, the parties
may present testimony (either live witness or deposition), subject to
cross-examination, and documentary evidence. To the extent practicable taking
into account the nature of the dispute submitted for resolution and the
availability
-2-
of the Arbitrator, the hearing shall be conducted over a period not to exceed
thirty (30) consecutive business days, with each party entitled to approximately
half of the allotted time.
(j) Witness Lists. At least fifteen (15) business days prior to the
date set for the hearing, each party shall submit to each other party and the
Arbitrator a list of all documents on which such party intends to rely in any
oral or written presentation to the Arbitrator and a list of all witnesses, if
any, such party intends to call at such hearing and a brief summary of each
witness' testimony. Each party shall be given the opportunity to depose any such
designated witnesses not already deposed during the discovery phase. At least
five (5) business days prior to the hearing, each party must submit to the
Arbitrator and serve on each other party a proposed findings of fact and
conclusions of law on each issue to be resolved. Following the close of
hearings, the parties shall each submit such post-hearing briefs to the
Arbitrator addressing the evidence and issues to be resolved as may be required
or permitted by the Arbitrator.
(k) Confidentiality. The arbitration proceedings shall be
confidential and, except as required by Law, no party shall make, or instruct
the Arbitrator to make, any public announcement with respect to the proceedings
or decision of the Arbitrator without the prior written consent of the other
party. The existence of any dispute submitted to arbitration and the award of
the Arbitrator shall be kept in confidence by the parties and the Arbitrator,
except as required in connection with the enforcement of such award or as
otherwise required by Law.
(l) Awards and Appeal. Subject to the provisions of this Appendix M,
the decision of the Arbitrator shall be final and binding upon the parties in
respect of all matters relating to the arbitration, the conduct of the parties
during the proceedings, and the final determination of the issues in the
arbitration. There shall be no appeal from the final determination of the
Arbitrator to any court, except in the case of fraud or bad faith on the part of
the Arbitrator or any party to the arbitration proceeding in connection with the
conduct of such proceedings. Judgment upon any award rendered by the Arbitrator
may be entered in any court having jurisdiction thereof.
(m) Costs of Arbitration. The costs of any arbitration hereunder
shall be borne by the parties in the manner specified by the Arbitrator in its
determination.
(n) Performance of the Agreement. During the pendency of the
arbitration proceedings, the parties shall continue to fully perform their
respective obligations under the Agreement. Any aspects of such performance
which encompass the matter which is the subject of such arbitration proceedings
shall be performed by the parties in accordance with Schering's
-3-
position with respect to such matter. For purposes of this Paragraph (n) the
term "pendency of the arbitration proceeding" shall mean the period starting on
the date on which arbitration proceedings are commenced by a party in accordance
with Paragraph (c) of this Appendix M and ending on the date on which the
Arbitrator delivers its final determination in writing to the parties.
-4-